Technical Assistance Consultant’s Report€¦ · Final Report update – April 2014 ADB PPTA 8053...

Technical Assistance Consultant’s Report

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Project Number: 42173 April 2014

People’s Republic of Bangladesh: Preparing the Khilkhet Water Treatment Plant Project (Financed by the TASF)

Prepared by

Mott MacDonald Ltd.

Croydon, United Kingdom

For Dhaka Water Supply and Sewerage Authority

Technical Assistance

ADB TA 8053BAN:

Technical Assistance to the People’s Republic of Bangladesh for

Preparing the Khilkhet Water Treatment Plant Project

Final Report Revised to reflect change of WTP location to Gandharbpur

Mott MacDonald Ltd. April 2014

ADB PPTA 8053 BAN:

Preparing the Khilkhet Water Treatment Plant

Project

Final Report

Revised to reflect change of WTP location to Gandharbpur

April 2014

Final Report update – April 2014

ADB PPTA 8053 BAN: Khilkhet Water Treatment Plant Project Mott MacDonald

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Issue and revision record

This document is issued for the party which commissioned it

and for specific purposes connected with the above-captioned

project only. It should not be relied upon by any other party or

used for any other purpose.

We accept no responsibility for the consequences of this

document being relied upon by any other party, or being used

for any other purpose, or containing any error or omission

which is due to an error or omission in data supplied to us by

other parties

This document contains confidential information and

proprietary intellectual property. It should not be shown to

other parties without consent from us and from the party

which commissioned it.

Revision Date Originator Checker Approver Description

A 13 Mar 2013 K. Schonfeld

F. Chowdhury

A Ghumra J Piotrowski DFR Issue

B 19 May 2013 K. Schonfeld

F. Chowdhury

N. Osmaston

J. Barrie J Piotrowski DFR 2 Issue

C 19 June 2013 F. Chowdhury N. Osmaston

J. Barrie J Piotrowski Final Report Issue

D 24 March 2014 N. Osmaston F Chowdhury J. Piotrowski Updated Executive Summary

E 16 April 2014 N. Osmaston F Chowdhury J. Piotrowski As above with ADB comments addressed



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PREFACE

This document is the Final Report for the Asian Development Bank’s Project Preparatory Technical Assistance TA 8053 BAN: Khilkhet Water Treatment Plant Project. It follows our Inception Report of 19 October 2012 and Interim Report of 25 December 2012 and Draft Final Reports. The Executive Summary has been updated in March 2014 to reflect the changes in contract packaging, funding and phasing, following ADB’s loan fact finding mission and Aide Memoir in June 2013. The status of “Issues to be resolved” (Exec Summary section 9) has been updated to reflect the situation in February 2014. Note: The main text following the Executive Summary is unchanged from the 19/6/2013 Final Report. The Final Report draws upon the review of the Feasibility Study, site visits, analytical work, and the consultations conducted by the TA team with senior officers from Dhaka Water Supply and Sewerage Authority and the Institute of Water Modeling. Meetings with Bangladesh Inland Waterways Transport Authority (BIWTA), Bangladesh Water Development Board (BWDB), DoE, Department of Fisheries (DoF), Department of Forests, MoA, MoWR, PPP Office, RAJUK, RHD, Standard Chartered Bank, and WHO provided additional insights and information. The report takes into account the consultations held with numerous stakeholders including the participants to the Inception Brief presentation held on 3 October 2012 in Dhaka, tripartite meetings following the presentations of the Inception Brief and the Interim Report, and the PPP workshop on 10 December 2012, as well as numerous comments received from ADB, Dhaka Water Supply and Sewerage Authority, and Design and Management Consultants. The Final Report takes into account the March 2013 change in location of the water treatment plant from Khilkhet to Gandharbpur. The views presented in the report are the responsibility of Mott MacDonald and the TA team and do not necessarily reflect the views of Dhaka Water Supply and Sewerage Authority, the Government of Bangladesh, and the Asian Development Bank.



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CONTRIBUTORS TO THE FINAL REPORT

Shireen Akhter

Sinora Chakma

Farook Chowdhury

Md. Imtiaz Farooq

Md. Quaisarul Islam

Ary de Koning

Gazi Anwarul Hoq Rahmani

Jagadish Chandra Saha

Falko Josef Sellner

Eric van Woerkom

Nigel Osmaston

Mott MacDonald

&

National Social Safeguards Specialist

National Social Development & Gender Specialist

Project Director & International Economist

National Legal Specialist

Deputy Team Leader & National Water Supply Engineer

International Waste Water Management Expert

National Waste Water Engineer

National Environmental Safeguards Specialist

International Legal Expert

International Project Finance Specialist

Team Leader 2

Support staff

We also acknowledge the valuable contributions from Mr R. Viswanathan and Ms Hafiza Khatun,

two consultants engaged directly by ADB,

who led the environmental and social safeguards activities.



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TABLE OF CONTENTS

CONTRIBUTORS TO THE FINAL REPORT........................................................................................................... iii

ACRONYMS .................................................................................................................................................... xii

EXECUTIVE SUMMARY ................................................................................................................... 1

I. INTRODUCTION & BACKGROUND ........................................................................................ 1

II FEASIBILITY STUDY REVIEW ................................................................................................ 8

A Volume I – 1: MAIN FEASIBILITY REPORT .................................................................................................... 8

1. INTRODUCTION AND BACKGROUND ...................................................................... ....................................... 8

1.1 Introduction .................................. ................................................... ................................................... ..... 8

1.2 Terms of Reference .............................................................................. ................................................... 8

1.3 Methodology of Study ......................... ................................................... ................................................ 8

1.4 Output of the study .......................... ................................................... ................................................... . 9

1.5 Structure of this report (FS) ................................................................... ................................................. 9

2. PROJECT AREA .................................. ................................................... ................................................... ....... 9

2.1 Geographic and demographic characteristics ....................................................... ................................... 9

2.2 Topography .................................... ................................................... ................................................... .... 9

2.3 Socio-economic conditions ..................... ................................................... .............................................. 9

3. DHAKA WATER SUPPLY SITUATION ...................................................................... .......................................... 9

3.1 Existing water supply situation ............... ................................................... .............................................. 9

3.2 History of DWASA ............................. ................................................... ................................................... 9

3.3 Related water projects in Dhaka ................................................................. ............................................ 9

4. EXISTING RESOURCES ............................. ................................................... ................................................... 11

4.1 Existing Groundwater Resources .................................................................. ........................................ 11

4.2 New Groundwater resources, Singair and Savar wellfield .......................................... .......................... 11

4.3 Existing Surface Water Sources .................................................................. ........................................... 11

4.4 Planned Surface water sources ................................................................... .......................................... 12

5. WATER DEMAND ................................... ................................................... ................................................... . 12

5.1 Introduction ................................. ................................................... ................................................... ... 13

5.2 Present water consumption and real losses ........................................................ .................................. 14

5.3 Population forecast .......................... ................................................... .................................................. 14

5.4 Demand scenarios ............................. ................................................... ................................................. 1 4

5.4.1 Demand Scenario Parameters ..................................................................... ................................... 14

5.4.2 Best Scenario ............................... ................................................... ................................................ 14

5.4.3 Worst Scenario .............................. ................................................... .............................................. 14

5.4.4 Realistic Scenario .......................... ................................................... ............................................... 14

5.4.5 The realistic scenario with high groundwater supply ............................................ ......................... 14

5.4.6 Realistic demand scenario with medium groundwater supply ....................................... ............... 14

5.5 Proposed Water Demand Scenario and Supply Scenario ............................................... ....................... 14

5.6 Demand vs. supply ............................. ................................................... ................................................. 1 5

6. OPTIONS FOR SUPPLY ............................ ................................................... ................................................... 16

6.1 Introduction ................................. ................................................... ................................................... ... 16



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6.2 Main Options for Supply of Water to Gandharbpur ................................................. ............................ 17

6.2.1 Saidabad raw water supply ................... ................................................... ...................................... 17

6.3 Alternatives for Intake Locations ............................................................... ........................................... 17

6.3.1 Introduction ................................ ................................................... ................................................. 1 7

6.3.2 Intake at Sitalkhya ........................ ................................................... .............................................. 18

6.3.3 Intake at Meghna & 6.3.4 Conclusions on intake locations ..................................... ..................... 19

6.4 Alternatives for technical Solutions ............................................................ .......................................... 19

6.4.1 Intakes Types .............................. ................................................... ................................................ 19

6.5 Raw water pumping station .................... ................................................... ........................................... 20

6.6 Transmission Main Route and Methods ............................................................. .................................. 21

6.6.1 Transmission line route .................... ................................................... .......................................... 21

6.6.2 Transmission line Alternatives ................................................................ ....................................... 23

6.7 Gandharbpur Water Treatment Plant ............................................................... .................................... 25

6.8 Transmission lines inside Dhaka............... ................................................... .......................................... 26

6.9 Environmental Considerations ................. ................................................... .......................................... 27

6.9.1 Background .................................. ................................................... ................................................ 29

6.9.2 Environmental requirements of the government and ADB .......................................... ................. 30

6.9.3 Anticipated environmental changes prior to construction of the project ........................ ............. 30

6.9.4 Anticipated environmental impacts during construction of the project ........................... ............. 32

6.9.5 Anticipated environmental impacts during post-construction or O&M of the project .................. 32

6.9.6 Environmental monitoring .......................... ................................................... ............................ 33

6.9.7 Conclusions ................................. ................................................... ................................................. 3 3

7. COST ESTIMATES FOR MAIN OPTIONS .................................................................. ...................................... 35

7.1 Basis for cost estimates ........................................................................ ................................................. 3 5

7.2 Cost estimates for options ................... ................................................... .............................................. 35

7.3 Operation and maintenance .................... ................................................... .......................................... 35

8. COMPARISON OF OPTIONS ......................... ................................................... ............................................. 35

8.1 Evaluation of water source and intake ........................................................... ...................................... 35

8.2 Evaluation of transmission system ............................................................... ......................................... 36

8.3 Supply scenarios ............................. ................................................... ................................................... . 36

8.4 Financial analysis ........................... ................................................... ................................................... .. 37

8.5 Recommended Option ........................... ................................................... ............................................ 37

8.5.1 Recommendation ............................. ................................................... .......................................... 37

8.5.2 Components of the recommended system .......................................................... ......................... 38

8.6 Supply from Sitalkhya......................... ................................................... ................................................ 39

8.7 Security of supply ........................... ................................................... ................................................... . 39

8.8 Recommendation for additional Investigations .................................................... ................................ 39

8.9 Implementation arrangements ..................................................................... ........................................ 40

8.10 Social Impact Assessment ........................................................................ ............................................ 42

8.10.1 Methodology of SIA preparation ................................................................ .................................. 42

8.10.2 Review of survey findings ..................................................................... ........................................ 42

8.10.3 Impact on intake area ......................................................................... .......................................... 42

8.10.4 Impact of raw water transmission line ......................................................... ................................ 42

8.10.5 Impact of water treatment plant (WTP) ......................................................... .............................. 42

8.10.6 Impact of treated water transmission line inside Dhaka ........................................ ...................... 42

8.10.7 Summary assessment of impact ......................................................................... ................... 42

8.10.8 Social impact assessment Conclusion .......................................................... ................................ 42

B Volume I - 2: TECHNICAL REPORT .............................................................................................................. 43



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9. DESIGN PARAMETERS ............................. ................................................... .................................................. 43

9.1 Water demand ................................. ................................................... .................................................. 43

9.2 Water quality and water treatment ............................................................... ....................................... 43

9.3 Security of Supply ........................... ................................................... ................................................... . 43

10. WATER QUALITY ................................ ................................................... ................................................... .. 44

10.1 Water Sources Analyzed ......................................................................... ............................................ 44

10.2 Sampling program ............................ ................................................... ................................................ 44

10.2.1 External sources of data ..................................................................... ......................................... 44

10.3 Results from water quality survey by the Project ............................................... ................................ 44

10.4 Data from Saidabad SWTP ..................... ................................................... .......................................... 45

10.5 Results from Department of Environment, Dhaka, August 1993...................................... .................. 45

10.6 Water Quality Assessment ....................................................................... ........................................... 46

10.7 Conclusions ................................. ................................................... ................................................... .. 46

11. HYDROLOGICAL CONSIDERATIONS ..................................................................... ...................................... 46

11.1 Maximum and minimum flows .................... ................................................... ..................................... 46

11.2 Meghna River ................................ ................................................... ................................................... 46

11.2.1 General description ........................ ................................................... ........................................... 46

11.2.2 Maximum and minimum flow in Meghna River ..................................................... ..................... 46

11.2.3 Tidal Influence in Meghna River ............................................................... .................................... 46

11.3 Sitalkhya River ............................. ................................................... ................................................... .. 46

11.3.1 General description ........................ ................................................... ........................................... 46

11.3.2 Maximum and minimum flow in Sitalkhya River ................................................... ....................... 46

11.3.3 Tidal influence in Sitalkhya River ............................................................ ...................................... 47

12. RIVER MORPHOLOGY ............................. ................................................... ................................................ 47

12.1 Introduction and methodology ................ ................................................... ........................................ 47

12.2 Interpretation of water levels ................................................................. ............................................ 47

12.3 Sediment data ............................... ................................................... ................................................... 47

12.4 Satellite images ............................ ................................................... ................................................... . 47

12.5 Cross section changes ....................... ................................................... ............................................... 48

12.6 Mathematical ................................ ................................................... ................................................... 48

12.7 Conclusion .................................. ................................................... ................................................... ... 48

13. GEOTECHNICAL ASSESSMENT ...................... ................................................... .......................................... 48

13.1 Introduction ................................ ................................................... ................................................... .. 48

13.2 Geological/geotechnical profiles................................................................ ......................................... 48

13.3 Seismicity/liquefaction ..................... ................................................... ................................................ 48

13.4 Engineering aspects ......................... ................................................... ................................................ 48

13.4.1 Dewatering of trenches ....................................................................... ........................................ 48

13.4.2 Bearing capacity of piles .................................................................... .......................................... 48

13.5 Liquefaction ................................ ................................................... ................................................... .. 48

14. BASIC DESIGN ................................. ................................................... ................................................... ..... 48

14.1 Introduction ................................ ................................................... ................................................... .. 48

14.2 General description of system .................................................................. .......................................... 48

14.3 Intake at Meghna River ......................................................................... .............................................. 50

14.3.1 Location and access ....................... ................................................... ........................................... 50

14.3.2 Maximum and minimum water levels ............................................................. ............................ 50

14.3.3 Alternatives for intake ...................................................................... ........................................... 50

14.3.4 Intake channel Alternative 1 ................................................................. ....................................... 50

14.3.5 Intake with pipes in trench – Alternative 2 .................................................. ............................... 50

14.3.6 Intake with pier – Alternative 3 ............................................................. ...................................... 50



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14.4 Intake pump station ......................... ................................................... ................................................ 51

14.4.1 General ................................... ................................................... .................................................. 51

14.4.2 Pumps ..................................... ................................................... .................................................. 51

14.4.3 Design parameters ............................................................................ ........................................... 51

14.4.4 Monitoring and pump controls............... ................................................... .................................. 52

14.4.5 Power installations at Meghna ................................................................ .................................... 52

14.4.6 Design parameters for pump transformers at Meghna ............................................ .................. 52

14.4.7 Power distribution system for pumps .......................................................... ............................... 52

14.4.8 Power distribution system for building and control system .................................... .................... 52

14.4.9 Emergency generator operation................................................................. ................................. 52

14.5 Transmission mains .......................... ................................................... ................................................ 52

14.5.1 Introduction .............................. ................................................... ................................................ 52

14.5.2 Pipe material ............................. ................................................... ................................................ 53

14.5.3 Hydraulic calculations .................... ................................................... ........................................... 59

14.5.4 Design of transmission lines ................................................................. ....................................... 60

14.5.5 Pipe corridor and pipe route ................................................................. ...................................... 60

14.5.6 Installations on transmission line ........................................................... ..................................... 61

14.5.7 Transmission main alternative-pipe on surface................................................. .......................... 61

14.5.8 Culvert alternative .......................................................................... ............................................. 61

14.5.9 Tunnel solution ............................ ................................................... .............................................. 62

14.5.10 River crossings .......................... ................................................... .............................................. 62

14.6 Comparison of river crossing methods ........................................................... .................................... 62

14.7 Optional Intake and pumping station at Kanchan bridge .......................................... ......................... 62

14.8 Gandharbpur water treatment plant .............................................................. .................................... 62

14.8.1 Design parameters and reference design criteria. Raw water quality .......................... ............. 62

14.9 Detailed description of the plant .............................................................. .......................................... 64

14.9.1 Inline water monitoring ...................................................................... ......................................... 64

14.9.2 Raw water metering and flow regulation ........................................................ ............................. 64

14.9.3 Distribution chamber ...................... ................................................... .......................................... 65

14.9.4 Rapid mixing chambers ..................... ................................................... ........................................ 65

14.9.5 Flocculators .............................. ................................................... ................................................. 6 5

14.9.6 Clarifiers ................................ ................................................... ................................................... . 65

14.9.7 Sludge pumping facilities ................. ................................................... ......................................... 66

14.9.8 Drying beds ............................... ................................................... ................................................ 66

14.9.9 Rapid sand filters ........................ ................................................... .............................................. 66

14.9.10 Water metering at the outlet of the filters ................................................. ............................... 66

14.9.11 Air scour blowers ........................ ................................................... ............................................ 66

14.9.12 Backwash water pumps ........................................................................ ..................................... 66

14.9.13 Back-wash recycling facilities .............................................................. ...................................... 66

14.9.14 Contact and storage tank .................................................................... ...................................... 67

14.9.15 Alum storage and dosing ..................................................................... ...................................... 67

14.9.16 Lime storage and dosing ..................................................................... ....................................... 67

14.9.17 Full option ( polymer) dosing facilities .................................................... .................................. 67

14.9.18 Chemical storage room ....................................................................... ....................................... 68

14.9.19 Pre and post chlorination facilities ........................................................ .................................... 68

14.9.20 Instrumentation .......................... ................................................... ............................................ 68

14.9.21 Drainage issues to avoid flooding ........................................................... ................................... 68

14.9.22 Gandharbpur treated water pump station ...................................................... .......................... 68

14.9.23 Power Distribution at Gandharbpur WTP ....................................................... ........................... 69



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14.9.24 Design parameters for transformers for WTP and treated water pumps .......................... ....... 69

14.9.25 Power distribution system for WTP ........................................................... ................................ 69

14.9.26 Power distribution system for outlet pumps .................................................. ........................... 69

14.9.27 Generator operation ......................................................................... ......................................... 69

14.9.28 Balancing reservoirs ........................................................................ ........................................... 69

14.10 Power Supply Consideration .................................................................... ......................................... 70

14.10.1 Power demand for main plants ................................................................ ................................. 70

14.10.2 Sources of power supply...................................................................... ...................................... 70

14.10.3 Power from National grid .................................................................... ...................................... 70

14.10.4 Power generated by gas generators ........................................................... ............................... 70

14.10.5 Diesel generators ........................................................................... ............................................ 70

14.10.6 Proposed supply of power .................................................................... ..................................... 70

14.11 Philosophies of the control system ............................................................ ....................................... 70

14.11.1 Automation technology .................... ................................................... ...................................... 70

14.11.2 Control concept .......................... ................................................... ............................................ 71

14.12 Cabling and installation ................... ................................................... ............................................... 71

14.13 Building Services and Installations ........................................................... ......................................... 71

15. TRANSMISSION SYSTEM REQUIRED TO SUPPLY WATER FROM GANDHARBPUR ................................... ... 71

15.1 Introduction ................................ ................................................... ................................................... .. 71

15.2 Existing Transmission System................. ................................................... .......................................... 71

15.3 Existing estimated water demand in zones ....................................................... ................................. 72

15.4 Hydraulic Model Construction ................ ................................................... ......................................... 72

15.5 Basis of Analysis ........................... ................................................... ................................................... . 72

15.6 Design Scenario ............................. ................................................... ................................................... 72

15.7 Transmission System Required to Supply Water from Gandharbpur .................................. ............... 72

15.8 Equalization storage close to treatment plant .................................................. .................................. 72

16. DETAILED COST ESTIMATES ...................... ................................................... .............................................. 72

16.1 Capital Cost ................................ ................................................... ................................................... ... 72

16.2 Operation and Maintenance Costs ................................................................ ..................................... 76

C. FS APPENDICES ......................................................................................................................................... 76

D. Volume I – 3: DRAWINGS ......................................................................................................................... 76

E. Summary Opinions on other FS volumes .................................................................................................. 76

Volume III Geotechnical Report ....................................................................... ................................................ 76

Volume IV Hydrogeological and hydrological Considerations ............................................ ............................. 76

Volume IV-1 Determination of minimum and maximum flow in Sitalkhya and Meghna rivers .............. 76

Volume IV-2 Dhaka Area Hydrogeological Assessment .................................................... ....................... 76

Volume V Water Treatment .......................... ................................................... ................................................ 77

V-I Water Treatment Design Report .................................................................... ............................................ 77

V-II Water Treatment Functional Analysis ............................................................. .......................................... 77

Volume VI Dhaka Transmission system .................................................................. .......................................... 77

Volume VII Topographic Survey ..................... ................................................... ............................................... 77

Volume VIII Preliminary Environmental Assessment ..................................................... .................................. 77

Volume IX (SIA) ................................... ................................................... ................................................... ........ 77

III OTHER TOPICS ........................................................................................................................ 78



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A. Waste Water ............................................................................................................................................ 78

B. Institutional Development ....................................................................................................................... 82

C. Gender & Poverty .................................................................................................................................. 106

D. Project Financial and Economic Analysis ................................................................................................ 106

E. Legal Framework .................................................................................................................................... 127

F. Contract Types & Packaging ................................................................................................................... 140

1.0 Contract Packaging Considerations .................................................................... .......................... 140

2.0 Operations Stage .............................. ................................................... ................................................. 1 49

3.0 Bid Documents ................................. ................................................... ................................................. 1 51



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Figure 1: DESWSP Project Schematic ................................................................................................... 4 Figure 2: Project Layout Plan .................................................................................................................. 4 Figure 3: STP Map .................................................................................................................................. 5 Figure 4: Schematic ................................................................................................................................ 6 Figure 5: Planned Water Supplies ........................................................................................................ 13 Figure 6: Water Supply vs Demand ...................................................................................................... 15 Figure 7: Typical Pipe Corridor ............................................................................................................. 21 Figure 8: Effective Services Centers ..................................................................................................... 28 Figure 9: Project Implementation Schedule .......................................................................................... 41 Figure 10: 20 year forecast of DWSA Income Statement ................................................................... 101 Figure 11: Expenditure vs Reported Problems ................................................................................... 116 Figure 12: Deciles of household expenditure versus wtp ................................................................... 117 Figure 13: Years of education versus willingness to pay .................................................................... 117 Figure 14: Aggregate Demand ............................................................................................................ 118 Figure 15: Demand for Water: Poorest and richest households ......................................................... 119 Figure 16: Median WTP by expenditure category............................................................................... 120 Figure 17: Water consumption by expenditure ................................................................................... 120 Figure 18: Water demand with a volumetric rate ................................................................................ 122 Figure 19: Aggregated Water Demand ............................................................................................... 123 Figure 20: Aggregate water demand with a volumetric rate ............................................................... 123 Figure 21: Contract Packages Schematic ........................................................................................... 140

Table 1: Issues to be resolved ................................................................................................................ 2 Table 2: Project Component Sizing ........................................................................................................ 5 Table 3: Project Cost Breakdown ........................................................................................................... 7 Table 4: Tentative Financing Plan .......................................................................................................... 7 Table 5: Financial ratios ........................................................................................................................ 13 Table 6: Summary DWSA 20 yr Financial Forecast ............................................................................. 15 Table 7: Present and Planned Surface WTPs in DWASA Service Area .............................................. 12 Table 8: Intake Criteria .......................................................................................................................... 17 Table 9: Project Component Options .................................................................................................... 20 Table 10: Mark-ups ............................................................................................................................... 35 Table 11: Project Phasing ..................................................................................................................... 38 Table 12: 2200 Ø Pipe Cost Comparison ............................................................................................. 57 Table 13: 2200 Ø Pipe Cost Comparison Summary ............................................................................. 57 Table 14: Duties + Tax Rate Estimates from DWASA HS Codes ........................................................ 74 Table 15: Project Cost Estimate (excl. Saidabad) ................................................................................ 75 Table 16: Tentative Financing Plan (excl. Saidabad) ........................................................................... 75 Table 17: Waste Water & Sewerage Component – Progress to date .................................................. 79 Table 18: Water Supply from Gandharbpur WTP ................................................................................. 81 Table 19: Phase 2 Priority Projects ....................................................................................................... 81 Table 20: Relevant Procurement Guidelines for DWASA under PPR 2008 ......................................... 87 Table 21: Training provided under the FCB component ....................................................................... 89 Table 22: Ongoing and planned WS investments ................................................................................ 97 Table 23: Summary DWASA income statement ................................................................................... 98 Table 24: DWASA Balance Sheet ........................................................................................................ 98 Table 25: Operational & Financial Ratios ............................................................................................ 99 Table 26: Input Data ............................................................................................................................ 103 Table 27: Results of Different Tariff levels on Financial Performance of DWSA ................................ 105 Table 28: PE Model Outputs ............................................................................................................... 106 Table 29: PE Model Sensitivity ........................................................................................................... 107 Table 30: Financing Plan ($ Million) .................................................................................................... 108 Table 31: Weighted Average Cost of Capital (Actual Rates) .............................................................. 108 Table 32: EIRR and Sensitivity Analyses – Gandhabpur Water Treatment Plant .............................. 112 Table 33: Estimated coefficients ......................................................................................................... 115 Table 34: Willingness to Pay by Expenditure (Income) Category....................................................... 119 Table 35: Water consumption and expenditure .................................................................................. 121 Table 36: Project Contract Packaging ................................................................................................ 125



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Table 37: PPP Entry Points................................................................................................................. 130 Table 38: Requirements ...................................................................................................................... 130 Table 39: Issues Addressed................................................................................................................ 138 Table 40: Contract Packaging Considerations.................................................................................... 140 Table 41: DBO Operations Stage ....................................................................................................... 149 Table 42: Bid Documents .................................................................................................................... 151 Table 43: Saidabad and other Questions ........................................................................................... 153

Appendix 1: terms of reference for consultants Appendix 2: persons met Appendix 3: meeting notes Appendix 4: plan of action for decommissioning dtws in dhaka city Appendix 5: supply vs. Demand – spreadsheet data Appendix 6: capex and opex estimates Appendix 7: bangladesh water quality standards Appendix 8: review notes on morphology study Appendix 9: annexes 1-4 in waste water section iii.a.2 Appendix 10: financial management assessment Appendix 11: meghna water quality monitoring program Appendix 12: gender action plan Appendix 13: review notes on fs financial analysis Appendix 14: annexes 1-3 in economic analysis section iii.d.2 Appendix 15: annex 1 to legal report Appendix 16: meghna and sitalkhya hydrology Appendix 17: sector assessment Appendix 18: development coordination Appendix 19: risk assessment and risk monitoring plan Appendix 20: social safeguard costs Appendix 22: morphological assessment Appendix 23: notes on pipe size optimisation Appendix 24: response to dwasa comments on dfr2



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ACRONYMS

ADB Asian Development Bank

ADF Asian Development Fund

ADP annual development plan

AFD Agence Française de Développement

APs affected persons

BOD biochemical oxygen demand

BOI Board of Investments

BOO build-own-operate

BOOT build-own-operate-transfer

BOT build-operate-transfer

BWDB Bangladesh Water Development Board

capex capital expenditures

CBO community-based organization

CEGIS Centre for Environmental Geographical Information System COD chemical oxygen demand

CS cadastral survey

DCC Dhaka City Corporation

DFR draft final report

DI ductile iron

DMC Design and Management Consultants

DO dissolved oxygen

DoE Department of Environment

DoF Department of Fisheries

DPD Deputy project director

DPP Development Project Proposal

DPHE Department of Public Health Engineering

DPP Development project proposal

DWASA Dhaka Water Supply and Sewerage Authority

DWSSDP Dhaka Water Supply Sector Development Project

EA Executing Agency

ECA Environmental Conservation Act

ECOP Environmental Code of Practice

ECR Environmental Conservation Rules

EIA Environmental Impact Assessment

EMP environmental management plan

FERA Foreign Exchange Regulation Act

FGD focus group discussion

FIDIC International Federation of Consulting Engineers

FS feasibility study

GAP gender action plan

GDP gross domestic product

GPS global positioning system

GRP glass fiber reinforced polyester resin

HDPE high density polyethylene



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IDC interest during construction

IEE initial environmental examination

ISA initial social assessment

IsDB Islamic Development Bank

ITO income tax ordinance

IWM Institute of Water Modelling

IWTA Inland Water Transport Authority

JRC Joint River Commission

kg kilograms

kV kilo Volts

kWh kilo watt hours

L/s liters per second

LCC Location Clearance Certificate

Lcd liters per capita per day

LGED local government engineering department

LIC low income community

MCC motor control center

m3 cubic meters

mg/L milligrams per liter

MLD million (mega) liters per day

MoA Ministry of Agriculture

MODS Maintenance Operations and Distribution Services

MoLGRD&C Ministry of Local Government, Rural Development and Cooperatives

MoWR Ministry of Water Resources

NAV net asset value

NBR National Board of Revenue

NGO non-governmental organization

NRW non-revenue water

Ntot total nitrogen

NTU nephelometric turbidity units

NWRC National Water Research Council

O&M operations and maintenance

opex operating expenditures

PLC programmable logic controller

Ptot total phosphorus

PS Pump station

RAJUK Rajdhani Unnayan Kartripakkha (Capital Development Authority) Bangladesh

REA rapid environmental assessment

REB Rural Electrification Board

RHD Department of Roads and Highways

RRI River Research Institute

RS revised survey

SIA social impact assessment

SIM social intermediation model

SMP sewerage master plan

SPS Safeguards Policy Statement



xiv 309128

STP sewage treatment plant

TDS total dissolved solids

TSS total suspended solids

TOR terms of reference

URECA urgent rehabilitation education for children association

VAT value added tax

VGF viability gap financing

WACC weighted average cost of capital

WARPO Water Resources Planning Organisation

WATSAN water supply and sanitation

WERC Water Economic Regulatory Commission

WHO World Health Organization

WL water level

WTP water treatment plant

wtp willingness to pay

Glossary

inter alia among others

mastaan illegal enforcer

mohalla Neighborhood

Mouza Administrative subdivision-village level

Parishad Rural administrative and local government units

Pourashava Municipality

prima facie Apparently

shat rasta Seven roads

Thana/Upazila Sub-districts

vis-à-vis Regarding

Final Report update – April 2014 Executive Summary


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EXECUTIVE SUMMARY 1. This consultancy was to review the previous Feasibility Study (FS) for a Water

Treatment Plant (WTP) to be built at Khilkhet and this report was written and issued on that

basis on 13 March 2013. However, at the same time the location of the WTP was changed

from Khilkhet to Gandharbpur, some 10km nearer the intake, due to which some 20 km of

the raw water and treated water transmission pipeline routes had to change from the initial

proposed routes. The consultancy was extended to carry out a new feasibility study and

detailed surveys for these new routes. This report still contains the original review of the FS

for a WTP at Khilkhet, but is now extended and revised to cover the new proposed system

with the WTP re-located to Gandharbpur with its associated new raw water supply and

treated water delivery pipe routes. The name of the PPTA project remains ‘Khilkhet’ and the

review sections still refer to the reviewed Khilkhet WTP where the comments are nonspecific

to the new WTP location, e.g. when referring to recommended sizes or treatment process,

but the name Gandharbpur is used wherever we refer specifically to the new WTP location.

The future project will be named “Dhaka Environmentally Sustainable Water Supply Project”

(DESWSP).

Introduction and Background

2. Dhaka is surrounded by water and often inundated by monsoon downpours. And

yet, it suffers from a potable water shortage. The primary reason is that population growth

has overtaken its water supply, and particularly, its groundwater sources that are derived

from the world’s largest well field. The fact that the water supply system is burdened by over

40% non-revenue water (NRW) exacerbates the situation.

3. In response, the government, through Dhaka Water Supply & Sewerage Authority

(DWASA) acting as the executing agency and assisted by the Asian Development Bank

(ADB) and other development banks and bilateral agencies, has embarked on an ambitious

and much needed expansion and refurbishment of Dhaka’s water and sewerage systems.

The Dhaka water sector requirement is partially addressed by the Dhaka Environmentally

Sustainable Water Supply Project, funded by ADB. It aims to increase surface raw water

sources and thereby decrease reliance on groundwater abstraction, which, at current rates,

mines the aquifers at the rate of 2 to 3 meters per year. It further aims to strengthen the

distribution system, thereby adding to the service areas and significantly reducing the NRW.

Under a Sewerage Master Plan (SMP), DWASA intends to deal with the additional volume of

sewage generated by refurbishing and renewing existing sewers and treatment plants,

adding to the collection network, and installing new pump stations and treatment plants.

4. One of the components of DWASA’s plan to augment the overall water supply and to

reduce the amount of groundwater abstraction is the Khilkhet Water Treatment Plant Project.

DWASA prepared a comprehensive feasibility study (FS) in 2011, the review of which and

endorsement, or identification and filling of gaps, are the central objectives of this PPTA.

5. The main components of the Khilkhet Water Treatment Plant Project are the supply

and construction of about 85 km1 large diameter raw and treated water transmission pipe

1 Comprises 35 km of 2200 or larger raw + treated transmission for the Gandharbpur Phase 1 system plus 21

km smaller network reinforcement in Dhaka plus 30 km of 2200 or larger transmission for Saidabad Phase 1



S-2 309128

lines connecting a 2000 MLD raw water intake and its pump station on the Meghna River to

a WTP 22 km away beside the Sitalakhya river. Both PS and WTP are to be 500MLD in

Phase 1 plus 500MLD in Phase 2. Also the treated water transmission pipeline connecting

with the water distribution system inside Dhaka, mostly benefitting Uttara, Gulshan/Banani,

North Badda, and Mirpur districts (

6. Figure 1). The project also includes provision of pumping equipment and pipelines to

supply Saidabad WTPs (475 MLD in phase 1 and another 475 MLD in phase 2).

7. A review is included of DWASA’s plan to collect, treat, and dispose of the resulting

sewage and the sludge produced by the additional water directed into the Dhaka water

distribution system, approximately 75% of which will be converted to domestic sewage. The

PPTA team considered which of nine Phase 1 and nineteen Phase 2 priority investments

outlined in DWASA’s sewerage master plan could be prepared to tender stage. After much

consideration and discussions with DWASA, it was concluded that none of the priority

projects would be included under the ensuing project.

8. Objectives & Outcome. The objective of the PPTA assignment is to obtain the

agreement of the government, the executing agency (EA) that is the DWASA, and ADB to

the Project design and feasibility study (FS) within 30 weeks from start of the assignment.

Because of the change in scope, the PPTA assignment was expanded to incorporate the

changes that resulted from the relocated WTP and new raw and treated water pipelines.

9. The outcome is this Final Report, which is a composite of endorsements of the FS

prepared for DWASA and clear identification of gaps therein with proposals and

recommendations on how to fill those gaps.

10. Issues (as at end of February 2014)

Table 1: Issues to be resolved

Issue Affected component

Status / Action

River morphology Intake design ADB engaged an independent individual consultant whose report is summarised herein; Further recommended study /modeling is to be agreed as the contractor’s scope of work.

River water quality monitoring

WTP design, bid documents + bid costs

DWASA’s WQ monitoring contractor started in February 2014 on detailed weekly raw water sampling at River Meghna intake site to give bidders essential information for their WTP + Intake bid designs to improve their bids, reduce risk cost and strengthen operational guarantees.

Gandharbpur WTP and intake sites flooding

Structure designs, bid documents + bid costs + ground raising

Reliable hydrological data and analysis giving the expected 1:100 year river flood level at the intake and WTP site location was not available. Instead, levels for the highest flood in living memory (1988) have been surveyed from

system. Doubling the flow capacity with 65 km of 2200 or similar raw and treated transmission will follow in

later phases.



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interviews with a number of different people.

To include Saidabad pipeline or not?

Loan funding + much more

It was agreed at fact finding mission in Dhaka late June 2013 to transfer the Saidabad supply, including associated expansion of the raw water PS, to a future project to be funded by AFD and other development partners.

Pipeline routes adjacent to existing roads

Pipeline design DWASA to formally agree with RHD, RAJUK, LG, and Water Board on utilizing areas of their respective ROWs where pipelines are planned tobe constructed near adjacent to roads.

Demand / Supply Projection

Timing of future new sources

The brief Demand / Supply projection in this report contains significant unknowns due to conflicting /unconfirmed data, which make it unreliable for predicting when future new sourcesare needed. A more reliable projection should be made using the IWM’s first Water Supply Master Plan (first draft July ‘13).

Contract Packaging Bid Documents and Contractor interest.

Final decisions on packaging made by DWASA +financiers in the June 2013 Aide Memoire are:

1) D&B contract (FIDIC yellow) from Intake to WTP with connecting transmission pipe and 3 years operation

2) Construction contract (FIDIC red) for treated water main from WTP to injectionpoint into Dhaka distribution

3) Construction contract (FIDIC red) for distribution pipe reinforcement in Dhaka

4) Consultancy contract to design packages2+3 and supervise all 3 packages.

Operation Modality DBO contract terms

PPTA recommended a long operating duration (15+ years), and market sounding confirmed this to be contractors’ preference but DWASA prefer 3 years and the financiers have agreed to this.

Land Title + purchase Contractor confidence /interest + Construction program

DWASA has land title on the WTP site and is well advanced with land purchase at Intake and the pipeline corridors. It is expected that all but a small part of the pipe route will be available to hand over to the contractor at commencement.

Soils + Geotechnical surveys

Contractor confidence /interest + competitive price

DWASA’s geotechnical contractor started extra surveys along the raw water pipe route + geotechnical borehole drilling at intake and WTP to give contractors a sound basis for tender design + costing to lower risk cost in bid prices. Surveys for the TW pipe route will be done by the design and supervision consultancy.

New Pipe modeling Bid Documents + Design

IWM or detail design consultants must remodel Dhaka distribution pipe reinforcement needed fornew injection point.



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Duty rate on GRP pipe Pipe material selection + Bid Documents

A big apparent difference in total duty+ taxes for GRP pipes (29%) vs. others (60%) is very significant, and uncertain. Source duty data is not specific to large pipes (Table 14). If such low duty does apply, it will strongly favor GRP, but if DWASA pays duty on behalf of contractors, it willnot influence their choice. DWASA must budget accordingly.

Pipe bridges over rivers, vs. thrust boring under rivers

Bid Documents + Design

DWASA to decide, before detail design of TW pipe if difficulty of permissions for pipe bridges outweighs advantage of having pipes easily accessible for quick emergency repair, after failure, if on a bridge, vs inaccessible if thrust bored under the rivers.

Public consultations Pipeline and WTP

DWASA to ensure objections have been settled, especially at WTP site.

11. The overall “Khilkhet” scheme, as envisaged after ADB’s fact-finding mission, is

illustrated below.

Figure 1: DESWSP Project Schematic

The DESWSP comprises the part in green, supplying Dhaka via Gandharbpur WTP,

excluding the system supplying raw water to Saidabad, which will be funded by others.

N

Balu R.

Proposed new

2000mm treated water pipelines* WTP at Gandharbpur

13 km

River bank protection

Intake structure

Saidabad WTPs Raw water PS

4.5 km 17 km

2200 mm raw water pipeline*

Juice Factory on

Exist Twin box culvert 13 km Dhaka-Sylhet Hwy.

to Saidabad Intake

Meghna R.

This project

Future project

(* sizes to be conf irmed)

Sita

lkhya R

.

3

1 2

Existing DND Canal to Saidabad 1 & 2

(connects to Sitalkhya 2km downstream)

Dhaka



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An ongoing feasibility study by Egis is considering an alternative intake location on R

Meghna and raw water pipe route for the Saidabad supplies shown in blue.

Water Supply

12. The DESWSP project components are recommended to be designed and

constructed for the following capacity:

Table 2: Project Component Sizing

Project Component Design for Phase MLD

Intake structure, riverbank protection and under-river pipelines 2 2,000

Raw water pumping station 1 525

Raw water pipe to Gandharbpur 1 525

Gandharbpur WTP 1 500

Treated water pipes to + in Dhaka 1 500

Intake and WTP & pipeline route land purchase 2 n/a

Power supply connections 1 n/a

Plant + pumps at Intake 1 525

Plant + pumps at Gandharbpur WTP 1 500

Access roads along raw water pipelines 2 n/a

The project costs in this report cover all the project components above, sized for the design

capacity stated above, and are given in more detail in Table 11.

13. The feasibility of the design and construction of these major components, as well as

associated lesser components, was demonstrated in the Feasibility Study. We have stated

our agreement - and where appropriate, our disagreement with the FS recommendations - in

our detailed review comments.

14. DWASA, has stated its preference for a design-build contract approach and we also

recommend that Gandharbpur Phase 1 be implemented this way, similar to the recently

inaugurated and successful 225MLD Saidabad 2 WTP that came in on budget and slightly

ahead of time. This approach means any design changes required by DWASA can be

addressed in the performance specifications of bidding documents and designs can be

optimised during bidding, evaluation, design and construction. Essentially, design

optimization can be achieved through the market place; i.e. bidders will be obliged to find the

most economic, whole life cost options and justify the quality of their final designs to

DWASA’s supervision consultants.

15. The main options are few:

• Intake design - an expert review of the morphology report has been made including

detailed recommendations and cost estimates for physical river modeling and river

bank protection works.

• Intake pump station - the design-build contractor will demonstrate that the pump

type (vertical turbine or horizontal split-case) and line-up (the number and vari-speed

or not) he proposes for implementation is optimum.



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• Transmission mains –the design-build contractor will be asked in the bid to prove

by way of optimization calculations, based on fixed economic parameters defined in

the bid documents, and with the tenderer’s actual tender costs, what the economic

pipe size for the project should be (considering that as the diameter increases, the

cost of the pipe and attendant civil works increase but the cost of power to pump the

water decreases). This diameter is subject to a minimum calculated by the

consultants who prepare the bid documents based on the optimisation approach in

Appendix 23.

• Water Treatment Plant – we have concerns about the overall philosophy of the

WTP design: full automation with inflow control. It is possible to design a plant and to

operate it in full automatic mode but we do not believe that the time is right for that in

Bangladesh.

We also have reservations on two other aspects proposed in the FS. One is the use

of tube or plate settlers in the sedimentation tanks. We believe that the plant should

be designed more conservatively to operate without such settling devices so that

they can be added at a later date to increase the throughput, if that should be

required. The other is the concept of operating in direct filtration mode when turbidity

is relatively low, even bypassing the flocculation process. We do not believe that the

raw water quality is good enough for that mode of filtration to be successful.

However, the design-build contractor will be required to guarantee that his unit

process designs will at all times produce treated water of the quality standards

required by DWASA and will suffer financial penalties based on long-term operating

costs if extra power and chemicals are required to meet the quality standards.

16. Project costs. We agree with the approach to feasibility cost estimation taken in the

FS and have adopted most of the estimates. Our estimate differs in four respects:

(i) we have added certain sums for project components left out and others

additionally proposed (e.g., the access road, social safeguards costs, and sludge

dewatering);

(ii) we have added for design and construction supervision (5.5% and 5%

respectively, with 0.5% added to the design cost to account for expandability);

(iii) we have included costs explicitly excluded in the FS (e.g., duty, VAT and other

taxes, cost of resettlement and compensation actions, consultancy services, and

land acquisition);

(iv) we have revisited the pipeline costs and revised both supply and install rates for

some of them based on up to date pipe supply quotations and more detailed pipe

installation calculations.

The following tables show the total estimated cost of the project, including duties, taxes,

contingencies, land acquisition, design and supervision. A financing plan is also provided.



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Table 3: Project Cost Breakdown

The “without Saidabad” cost estimate assumes the intake civil works are constructed for

2,000 MLD to be able to accommodate the future Saidabad flows, but excluding the

Saidabad mechanical and electrical plant. Costs have been considerably refined since the

draft FR. Significant changes are: Land acquisition and compensation increased, previously

estimated but now known from completed, detailed surveys; pipe costs reduced due to

reduced pipe length and more competitive, validated quotes received from pipe suppliers. A

cost breakdown, with IDC + RC + PC for the “without Saidabad” option, is in Table 15.

The financing plan for this “without Saidabad” option, to which all parties have agreed, is:

Table 4: Tentative Financing Plan

ADB 37.4% 250

AFD 17.0% 100

EIB 17.0% 100

GoB 28.5% 225

Total 675 Notes

• Based on 5.5% design, 5% supervision, 15% physical contingencies

• 4% VAT + 5% Tax on civil works only, 60% duty + taxes on imported plant + pipes

1.0 Intake 40,238,383 29,621,540

2.0 Gandharbpur WTP 111,062,358 111,062,358

3.0 Pipelines (incl. river crossings)

3.1 Intake to Juice Factory 114,356,123 57,178,062

3.2 Juice Factory to WTP 19,063,019 19,063,019

3.3 WTP to Injection point + 21 km of D 102,158,317 102,158,317

3.4 Juice Factory to DND canal 44,254,767 -

3.5 DND canal - Saidabad chamber 20,635,831 -

Total Design included above 20,479,937 14,464,934

Total Physical Contingency incl.above 58,926,365 41,619,560

4.0 Other costs

4.1 Land acquisition GoB 61,000,000 61,000,000

4.2 Power supply (G) GoB 1,543,750 1,543,750

4.3 Power supply (S) GoB 1,787,500 -

4.4 River study & modeling 388,500 388,500 4.5 Environmental cost GoB 380,750 323,638

4.6 Social cost / resettlement GoB 16,220,203 14,759,329

4.7 IDC excl. excl.

4.8 Recurrent Cost of PMU excl. excl.

4.9 Price Contingency excl. excl.

4.10 Duty & taxes GoB 119,510,415 95,343,438

Construction Supervision 18,618,125 13,149,940 Project Cost (excl IDC, RC, PC, incl supervis 671,218,042 505,591,891

Saving if all Saidabad pipes + pumps omitted 165,626,151

Whole

Project

ComponentConstruction Base Cost

excl. all Saidabd

pipes+pumps



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Waste Water

17. Introduction. There are two main components referenced in the TOR; namely,

waste water generated at the Gandharbpur WTP and the effects of additional water supplied

to the Dhaka distribution system.

18. We have reviewed DWASA’s plan to collect, treat, and dispose of the resulting

sewage and the sludge produced by the augmented amount of water directed into the Dhaka

water distribution system, approximately 75% of which will be converted into domestic

sewage. The PPTA team considered which of Phase 1 and Phase 2 priority investments

outlined in DWASA’s sewerage master plan2 (SMP) could be prepared to tender stage. In

addition, the issue of sludge and septage management is implied as it is discussed in the

SMP.

19. The importance of the proposed priority projects (Sewerage Systems and Sewage

Treatment Plants at Uttara and Mirpur, and septic tank sludge management) has been

assessed and justified.

20. Inventory and assessment of Operation and Maintenance (O&M) actions on bases of

the SMP for the proposed priority projects are formulated and presented in Appendix 11 -

Annex 3, including a brief overview of PPP Schemes for O&M actions.

21. A pilot study for improved Septic Tank Management with possible World Bank

funding is under consideration at DWASA. Septage management is not further studied

because it is reportedly part of another already funded project.

22. Review of SMP 2012. The review of the SMP resulted in our recommendations for

improvements and extensions. The main observation is that the SMP covers essentially all

DWASA MODS areas with adequate sewerage and STP construction projects with priorities

in line with the water supply schemes reportedly contained in a proposed 50-year water

supply master plan. Phase 1 priority projects as listed in the SMP are defined, funded, and

under preparation so there is no need for further PPTA work on this issue. Phase 2 projects

are under development by DWASA and will be prepared to tender stage by DWASA

consultants. Reportedly, Development Project Proposals have been prepared.

Considerations and Recommendation

23. Increased water supply from the Gandharbpur WTP will serve the population in

four DWASA MOD Zones (4, 5, 8 and 9). Review of the SMP and interviews with DWASA

officials indicated that the increased wastewater volume from Zone 05 and 08 (together 262

MLD) can be fully treated by the ongoing government-funded Dasherkandi sewerage and

500MLD development project (Phase 1 Priority Projects).

24. However, for Zones 04 and 09, no STPs to treat their share of the increased water

supply (178 and 60 MLD respectively) have been provided and therefore, DWASA is

planning the construction of sewerage systems and STPs at Uttara and Mirpur on priority

basis together with a Development Project Proposal.

2 Dhaka Sewerage Master Plan Project Package DS-1A, funded by DWASA



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25. Importance of Phase 2 Priority Projects. The following priority projects for Zones

04 and 09 have been identified by DWASA:

• Sewerage Dhaka North (Uttara): $57 million

• Sewerage Dhaka West (Mirpur): $86 million

• STP Dhaka North (Uttara): $80 million

• STP Dhaka West (Mirpur): $140 million

26. These projects are directly related to the increased water supply from the

Gandharbpur WTP. Funding for these projects is not yet assured and as such subject of

further investigation by DWASA.

27. Key issues requiring government consideration and policy decisions include:

(i) Reconsideration of the waste water treatment technologies to be applied

under the SMP (the initial recommended ‘trickling filter’ technology offers

better sludge processing, disposal and energy recovering potential than the

currently favored more advanced activated sludge technology whereas the

operation and maintenance costs will be significantly lower, unless high levels

of BOD, COD, N, and P removal are required based on environmental or

legal considerations).

(ii) Environmental assessment should be undertaken into the required removal

levels of waste water treatment system for BOD, COD, total nitrogen (Ntot)

and total phosphorus (Ptot) in order to select the minimum required treatment

technology.

(iii) Extensive technical and feasibility study is recommended into STP sludge

processing and disposal as this is an increasing environmental problem.

(iv) Combined STP and septage processing at the new STPs to be constructed

under the SMP should be seriously considered as the probably most

economic and practical way to deal with both problems.

(v) Small Bore Sewer Systems should be reconsidered as economic and

practical sanitation solution for urban poor settlements in spite of earlier

failures and difficult but not insuperable organizational and managerial

aspects.

Institutional Development

28. Dhaka Water & Sewerage Authority is embarking on a major investment to increase

water supply to a growing population of Dhaka and to ensure sustainable sourcing of water.

Financing of this investment will come from different sources including ADB, other

cofinanciers, and the private sector. The objective of the institutional assessment component

for the PPTA is to undertake a capacity assessment of DWASA and if required propose

ways and means to strengthen the capacity of DWASA and related agencies. Specifically,

the objective is to enhance competence levels; i.e., the skills and ability to cope with the

required practices and technology that will allow the sectoral achievement of the

government’s goal, which is improved access to more reliable and sustainable water supply

for greater Dhaka City. A financial assessment of DWASA has been also carried out with a



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forecasted operational performance over the next 20 years. The assessment together with

the forecast outlines the financial environment of DWASA and risks that may impact the loan

payment position.

29. Organization and Management. The DWASA is a service oriented autonomous

commercial organization in the public sector, entrusted with the responsibility of providing

water supply, sewerage, storm water drainage services, and environmental health

management. Its jurisdiction covers Dhaka and Narayangonj cities encompassing more than

360 sq. km service area. The service area of WASA is divided into 11 Maintenance,

Operations and Distribution Services (MODS) and Revenue zones. The total number of staff

positions is 4,375 of which 3,294 are currently employed.

30. The DWASA Board consists of 13 members from various disciplines including its

chairman. The Board is the Governing Body of DWASA. In the spirit of the WASA Act 1996

the Board should perform its functions in full autonomy. However, political interference is not

uncommon. The Managing Director (MD) and Deputy Managing Director (DMD) are

employed on a contractual basis on commercial terms and conditions with a term of four

years. It appears that recent reforms and “turn around program” introduced by the new MD

are gradually turning DWASA into a more laudable and effective organization. Achievements

include, (i) considerable improvement in financial performance and computerization of

financial management systems, (ii) annual updating of the 5-year Business Plan, (iii)

strengthening of the financial control systems, (iv) integrating billing and collection process

and accounts through computer networking systems, and (v) public education and citizen’s

awareness campaigns is bringing more transparency and spreading water conservation

messages.

31. There is a lack of coordination between the O&M and other departments within

DWASA. Functions performed by other departments directly impacts efficient operation of

the O&M department. Under the current Financial Capacity Building (a component of the

DWSSDP project of ADB) O&M manual and training has been developed and provided to a

number of the staff. However, the training will remain limited since it is impossible to provide

training to over 3,000 personnel. It appears that the current training program should continue

even when DWSSDP implementation is completed.

32. DWASA complies with both government and IFI and donor procurement rules and

regulations. The majority of large-scale procurement occurs under projects financed by the

ADB and the WB. The procurement rules and guidelines in case the procurement is financed

by ADB/WB are the particular procurement guidelines of the funding agency. These general

procurement rules are applicable for all types of procurements; procurement of goods,

works, and services. DWASA does not have experience with PPP procurement/agreements.

PPP procurement includes review, analysis, and negotiations of commercial and technical

details that require knowledge and skills not available within the organization.

33. DWASA has taken advantage of the provision in the WASA Act 1996 whereby

authority is provided for autonomous increases in tariff by 5%, which DWASA has

implemented from 2009 such that the current tariff for private consumers stands at

BDT6.99/m3 in 2013. Tariff setting and adjustments will remain key issue in the near future



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and will be required to be addressed by WASA and the government for full cost recovery,

including capital costs.

34. DWASA has very little private sector participation in its operation. All physical work is

contracted out to local firms and international and national firms provide advisory support

services under technical assistance programs. Bill collection in several zones is outsourced

to an employees’ cooperative, The Employees’ Consumers Supplies Cooperative Society

Ltd (ECSCSL), under contract with DWASA. The limited exposure of DAWSA with the

private sector suggests that procuring and managing a PPP project, if DWASA enters into

one in the future, will require strengthening DWASA’s capacity.

35. Financial Assessment. Given the expected significant increases in the capex and

opex, it is highly relevant that a regular financial management assessment (FMA) of DWASA

is conducted. Not only will the planned investments strongly increase DWASA’s future debts

and repayment capacity, but also DWASA’s operating costs will significantly increase, since

the O&M costs of surface water treatment are considerably higher than water supplied from

ground water sources. To ensure sustainable DWASA financial results, up to date and

effective financial management by DWASA is a critical success factor. If DWASA does not

have the proper staff strength and competences to effectively manage its financial

resources, the benefits of the projects may not be as sustainable as planned.

36. The FMA has considered two types of risks; (i) inherent risks; i.e., risks outside the

direct control of the DWASA financial management (FM), and (ii) control risks; i.e., risks

concerning the internal functioning and control of the DWASA Finance and Accounting

division. A summary of the main risks identified is outlined in the ADB template risk

assessment.

37. Clearly the biggest inherent risk that DWASA will be facing in the coming years is the

increasing unstable political future situation, which may result in seriously hampering

economic development and possibly reduced investments in water supply and sanitation

(WSS) infrastructure projects. This risk may affect the on-going organizational reforms, given

that DWASA may still not operate as a financially autonomous entity, that top management

is still via political appointment, and last but not least, that tariff setting beyond 5% per

annum is still dependent on political approvals.

38. The results of the FMA of the internal (control) risks indicate that the existing financial

management capabilities and performances of DWASA Finance and Accounting division

may be considered acceptable; however, with several medium to significant risks involved.

These risks are acknowledged by the DWASA management and programs are on-going and

further developed to mitigate these risks.

39. The double entry accounting system has been implemented some years ago and is

currently operated without major problems. Improvement of the accounting software has

been started under the FCB project but is not yet completed. An important bottleneck is that

the existing hardware is outdated and insufficient to fulfil the requirements of the proposed

new, custom-designed and interlinked DWASA accounting software system.



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40. In addition to the lack of proper IT infrastructures, the DWASA Finance and

Accounting staff does not presently have the required background and experience to operate

the new accounting software systems. This may be considered at least as a medium risk,

since this lack of adequate competences is a dominant and crucial issue. Without the FM

division staff having the proper background, manpower strength, or competences, all

targeted measures for FM system improvement and/or procedures will not show significant

results or impacts.

41. The PPTA team recommends that DWASA top management give more focussed

attention to initiate and monitor the necessary improvement of FM staff competences and IT

infrastructure.

42. Other identified medium DWASA FM risks are:

(i) Internal auditing unit. An internal auditing unit does exist, but is mainly

addressing queries from the Government and other stakeholders, concerning

DWASA’s annual report. It does not sufficiently address the internal auditing issues

for which it was established.

(ii) Monthly performance reporting. The submission of the monthly

performance reports is mostly late; i.e., about 4-5 months after the respective month,

while 3 weeks is the target. As a result, the reported monthly performance data are

not very useful for possibly required DWASA top management actions.

(iii) Management information system (MIS). MIS development and

implementation and further development seems to have high interest of senior

DWASA management, insufficient budgets are presently being made available. The

DWASA Information Communication Technology (ICT)/MIS unit consists of only two

staff collecting and processing all required MIS information. As noted, there is a lack

of proper ICT hardware and software infrastructure, with inadequate hardware and

slow (2G) internet connections, using mostly pirated software and no virus protection.

The result is that no actual assessment or analyses of the collected data is being

conducted.

43. DWASA PPP. The DWASA PPP cell is still in its infancy and does not have real

experience with PPP type of projects. A specific training program is required, particularly if in

the future a PPP set up within DWASA’s WSS operations will be implemented. FMA

indicates there are no significant FM risks. Nevertheless, given the on-going and planned

major investments and expected strong increases of the DWASA annual operating and

loan/DSL costs in the coming years, DWASA’s top management should give more and

serious attention to the identified FM risks, and make the necessary budgets available to

mitigate these risks, in order to be able to effectively direct and guide the DWASA middle

management and staff through the difficult operational and financial tasks which are

expected to be encountered by the DWASA organization in the coming 5 to10 years

44. Project Institutional Framework. DWASA at the central level through the field

offices at the project level will have the overall responsibility for project implementation,

coordination and planning, internal monitoring and overall reporting. DWASA will be the

executing agency (EA) for the DESWS project. A Project Management Unit (PMU) has been



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set up to manage project activities with distinct parts being managed and implemented by

DWASA.

45. The PMU should comprise a director, two deputy project directors (civil and

mechanical), three executive engineers with staff consisting of assistant Engineers (6) and

sub-assistant engineers (12), a water chemist, a procurement specialist with staff, an

accountant with staff, and two safeguard specialists (environment and social).3

46. The DESWS project will be financed by multi-donor organizations. While ADB is

taking the lead for the investment funds, AFD and EIB are the other cofinanciers. DWASA

has a sound record of experience with ADB and donor lending procedures and projects and

in the past handled several projects and programs. DWASA has no experience with PPP,

specifically with private sector equity investments. As suggested by the consultant’s legal

analysis a local legal entity will need to be formed to assume the contractual obligations vis-

à-vis DWASA. The shareholder structure and agreements will outline the provisions which

are of interest of DWASA.

Table 5: Financial ratios

Financial ratios 2012/11 2011/10 Remarks

Quick ratio 1.79 2.75 High; questionable since high amount (investments/ deposits) more likely to be fixed assets

Equity/Total Eq+Liabilities 32.84% 33.4% Favourable, but will decrease due to new project/GOB loans

LT liability / Total Eq+Liabilities 67.4% 66.54% High, see Audit comments on 'Grant & other Funds

Interest coverage ratio 5.9 5.6 High, mainly since interest payments are still limited; will in coming years rapidly decrease

Debt Service Coverage Ratio 1.4 53. Still favourable, but will further significantly decrease due to strong increase in due (GOB) loan repayments

47. 20 yr financial forecast. The latest available Audit Report4 of DWASA is for the

fiscal year (FY) 2011/2012. An overview of the present financial position of DWASA and

some key financial ratios derived from the annual reports is shown in Table 5.

48. The starting year of the 20-year forecast of the financial performance of DWASA is

based on the financial position in the FY 2011/12. Other relevant data were used from the 5-

year DWASA business plan and multi-annual financial forecasts which were developed

under the on-going FCB Project. A summary of the DWASA 20 year forecast Income

Statement is given in the next page.

49. The following main observations are made:

3The PMU was officially announced on 15 May 2013; however, the full complement of staff has not been

appointed. 4DWASA Auditor’s report and financial statements for year ending 30 June 2012, submitted 26 December 2012



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• DWASA’s annual net profits (after tax and interests) will remain positive in the coming 2-

3 years, but will turn negative in 2015/16, when the Saidabad II loans become due for

repayments, and the operating expenses related to the Ghandarbpur WTP phase I is

expected to start in the FY 2017/18.

• DWASA’s annual expenditures include presently a major (incidental) provision for

additional contributions to the pension fund to close the existing pension ‘gap’. For the

FY 2011/12 this concerned about 2.0 billion BDT (i.e. 30% of total costs). This incidental

provision may end in the coming 2 years, thus leaving significant financial ‘room’ to

compensate for the expected increases in the annual O&M and Debt Service Liabilities

(DSL) costs.

• The negative Return on Sales (RoS) will vary during 2015/2016 to 2020/2021 between -

/-2.2% and -/-11.5%. The minimum Debt Service Coverage Ratio (DSCR) for the same

period is 0.4, indicating a poor financial position.

• Clearly the most logical and effective measure to improve the DWASA future negative

financial results is to increase the annual water-sewerage service fee/m3 from the current

level. Different levels of tariff increases are possible and they are outlined in elsewhere in

this document.

50. It may be concluded that with serious DWASA management efforts and actions to

improve the revenues, increase tariff rates, and to control the expenditure levels, DWASA

does have the financial capacity to absorb the expected strong O&M and financial cost

increases, which will result from the necessary change from ground water sources to surface

water sources in the coming 20 years.



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Summary DWASA 20 yr Financial forecastF

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2011/12 9.137 2.998 1.285 2.680 6.963 3.685 1.937 148 955 6.724 239 70 1,0% 1,2

2012/13 9.860 3.408 1.688 2.851 7.947 3.211 2.028 532 1.508 7.279 668 303 3,8% 2,2

2013/14 9.988 3.635 1.801 3.036 8.472 2.263 2.098 557 1.500 6.418 2.054 1.446 17,1% 3,4

2014/15 10.101 3.871 1.917 3.238 9.026 1.942 2.169 567 1.495 6.173 2.853 332 3,7% 0,9

2015/16 10.096 4.073 2.018 3.457 9.548 2.000 2.212 754 1.493 6.458 3.090 -982 -10,3% 0,5

2016/17 12.553 5.331 2.641 3.695 11.667 2.060 2.367 2.854 3.424 10.705 962 -1.698 -14,6% 0,3

2017/18 13.021 5.760 2.853 3.924 12.537 2.122 2.532 3.054 3.310 11.018 1.519 -1.001 -8,0% 0,5

2018/19 13.496 6.218 3.080 4.171 13.470 2.185 2.710 3.268 3.209 11.372 2.097 -2.346 -17,4% 0,3

2019/20 15.201 7.296 3.619 4.437 15.352 2.251 2.642 4.003 3.121 12.018 3.334 -837 -5,5% 0,6

2020/21 15.657 7.827 3.901 4.723 16.452 2.318 2.827 4.284 4.238 13.667 2.785 -1.111 -6,8% 0,6

2021/22 16.127 8.397 4.203 5.032 17.632 2.388 3.025 4.583 4.088 14.085 3.548 -65 -0,4% 0,7

2022/23 16.611 9.009 4.469 5.364 18.843 2.460 3.237 4.904 3.955 14.556 4.286 925 4,9% 0,9

2023/24 17.109 9.665 4.692 5.723 20.081 2.533 3.463 5.248 3.839 15.083 4.998 -183 -0,9% 0,7

2024/25 17.622 10.370 5.300 6.110 21.779 2.609 3.005 5.615 3.737 14.966 6.814 1.979 9,1% 1,0

2025/26 18.151 11.125 5.565 6.526 23.217 2.688 3.215 7.038 4.842 17.783 5.434 944 4,1% 0,9

2026/27 18.696 11.935 5.843 6.976 24.755 2.768 3.440 7.531 4.683 18.422 6.333 2.188 8,8% 1,1

2027/28 19.256 12.805 6.136 7.461 26.401 2.851 3.681 8.058 4.544 19.134 7.267 3.685 14,0% 1,4

2028/29 19.834 13.738 6.442 7.984 28.164 2.937 3.939 8.622 4.423 19.920 8.244 5.006 17,8% 1,7

2029/30 20.429 14.738 6.765 8.548 30.051 3.025 4.214 9.225 4.318 20.783 9.268 6.375 21,2% 2,0

2030/31 21.042 15.812 8.103 9.156 33.071 3.116 4.509 15.151 4.230 27.006 6.065 3.512 10,6% 1,4

2031/32 21.673 16.964 9.559 9.813 36.336 3.209 4.825 16.212 4.157 28.403 7.932 1.568 4,3% 1,1

Revenues (x BDT milion) Expenditures (x BDT million) Results

Table 6: Summary DWSA 20 yr Financial

Forecast



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Environmental Safeguards

51. An Initial Environmental Examination (IEE) has been prepared as part of the PPTA to

address environmental impacts resulting from the Project. It is based on our review,

identification of gaps, and updating of the Environmental Impact Assessment (EIA) carried out

by the FS (Vol. VIII - Preliminary Environmental Assessment). The gaps identified in the EIA

were addressed through field visits (including field visits to the relocated WTP site and all

related pipeline route changes, collection of primary and secondary data to characterize the

environment and identify potential impacts; and substantiated through consultations with

stakeholders. The impacts during pre-construction, construction, and operation stages were

identified for which mitigation/monitoring measures are identified and detailed in the IEE. Based

on the IEE findings, an EMP outlining the specific environmental measures to be adhered to

during implementation of the Project has been prepared.

52. The IEE has been prepared as a uniform document satisfying ADB and the government

requirements. While any additional studies to conform to the government clearance

requirements are not envisaged, data updating if required, will be carried out prior to seeking

DoE approval.

53. There are no notified protected areas or environmentally sensitive areas or features in the

project area that will be impacted adversely due to the proposed interventions. However, the

magnitude of construction related impacts will be significant given the scale of the project

components. The location related impacts are addressed through incorporation of

environmental protection measures and specific design approaches to minimize impacts. IEE

confirms that the significance of the environmental impacts will be more due to the construction

related impacts. The resultant potential impacts during construction can be offset through

provision of proven mitigation measures during the design and adoption of good engineering

practices during construction and implementation. In addition to the construction impacts

typically associated with construction of water intake and transmission lines, the key impacts

identified in the IEE for which mitigation measures have been proposed include: (i) impacts on

fisheries at the Meghna intake, (ii) impacts on the river crossings of Sitalkhya, Balu, and lesser

streams and canals notified as ecologically critical areas, (iii) impacts on agricultural lands and

low lying areas along the transmission mains, (iv) loss of trees/vegetation along the

transmission mains; (iv) spoil/debris disposal due to laying of the transmission mains, and, (v)

sludge disposal at the treatment plants.

54. The effective implementation of the measures proposed will be ensured through the

building up of capacity towards environmental management within the PMU supplemented with

the technical expertise of an Environmental Safeguards Specialist as part of the design-build

contractor. Further, the environmental monitoring plans provide adequate opportunities towards

course correction to address any residual impacts during construction or operation stages.

Social Safeguards

55. The preparation of the Social Impact Assessment and Resettlement Plan was delayed

due to several reasons, including a large number of public disturbances and the difficulties to

obtain useful survey and land title information so they were submitted under separate cover.



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Gender & Poverty

56. As in some other developing countries, the women and girls of Bangladesh have less

access to health, education, ownership of assets, infrastructure (market, toilet facilities, tube

well, tap water, water reservoir), and other major services. Women are the primary

collectors, transporters, and users of domestically consumed water. They spend a significant

amount of time in collecting water for drinking, cooking, and washing. They also manage

household hygiene. However, women’s participation and their views are rarely reflected in

institutional arrangements for the development and management of water supply and

sanitation and other water resources. Focusing on gender mainstreaming, the “Khilkhet

Water Treatment Plant Project” is expected to improve water supply for the people of Uttara,

North Badda, Gulshan, and Mirpur areas in Dhaka.

57. In parallel with the improved water supply, DWASA has also planned improved

sewage collection, treatment, and disposal, which, together with more abundant water, is

expected to improve the health of affected residents. At the same time, a considerable

number of households will be affected by the construction of this water supply project as well

as the construction of the improvements to the sewerage system, albeit, temporarily. The

project has two components for intervention: (i) surface water supply augmentation and (ii)

institutional capacity development. The average citizens in Dhaka are the primary

beneficiaries of the project. The poor and the socially excluded can also benefit from

improved service level of the water supply services and new connection to the piped

network. Therefore, the poorer sections of the community will also benefit from the project,

including female-headed households.

58. The sections below provide a summary of intended measures to offset against these

social trends as described above within the design of the proposed project.

59. Project Component: Surface water supply augmentation. This component

should result in employment for many unskilled laborers to construct roads, pipelines, and

major structural works. The target will be at least 30% women laborer to be recruited for

construction of roads and earth work. In this regard, destitute women should be prioritized to

get unskilled employment. Both men and women should get equal wages and female

workers will be provided with separate toilet and water access facilities. These specifications

will be written into the bidding documents and reviewed during assessments. Contractors will

be expected to set aside adequate budget to ensure these contract specifications are

respected. All job advertisements for civil works and for utility agency should include the pro-

active sentence “applications by women encouraged”. 30% women representation will be in

community consultation and 50% LIC women participation in design and implementation of

water points as well as in awareness program. 50-60% women will be CBO members and

90-100% women are the members of water management committees in the position of

leadership in LIC.

60. Project Component: Institutional capacity development. To support the

implementing agencies to enhance competence levels; i.e., the skills and ability to cope with

the required practices and technology that will allow the sectoral achievement of the


for all the people in Dhaka City.



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61. The PMU should include a gender focal person. At least 20% of staff should be

women and special training session on gender awareness will be integrated in all training

schedule where gender issues will also be addressed. This process will sensitize male and

female staff to promote gender development plans and their implementation.

Project Finance and Economics

62. Project Finance. The major components of the project include investments in

intake, water treatment plant, transmission lines, infrastructure and others. In provision of the

consultant’s ToR to assess PPP options and opportunities and from various discussions with

ADB, it was agreed that the intake and water treatment plant will be considered for private

financing depending on viability and interests from private sector. A PPP model with private

equity participation and a combined project model were built to assess financial viability of

the proposed PPP and the project. The financial viability of the PPP and the project depend

on the following factors.

63. Starting Price and Price Escalation: Based on a number of assumptions, the

private sector would require a price of BDT 14.9/m3 of bulk water sold to DWASA from

Gandhabpur. This yields an Equity IRR of 25.01%. At a more realistic price of BDT 8/m3 the

minimum DSCR is well below 1 and the Equity IRR is 10.02%. The model assumes an

annual price increase of 10%, which currently exceeds DWASA’s mandate.

64. Capital Grant: Availability of viability gap funding (VGF) was analyzed and that

observed that VGF can significantly alter the treated water price required by the private

sector. The price of BDT 14.9/m3 assumes a 20% capital grant to the private sector. Without

this grant, the required treated water price would be BDT 17/m3 and the minimum DSCR

would fall below 1. These prices for treated water is well below the end user price charged

by DWASA which currently stands at BDT 7.44/m3 with a practice of annual increases of 5%.

65. It was concluded that unless DWASA is able to substantially increase water tariff

private investments in Ghandarbpur is not viable. It is understood that under the current

political regime substantial increases in water tariff is not possible, although some increases

are being explored by DWASA for the future. Under the circumstances consultants

assessments has come with the suggestions that Ghandarbpur will operate under a DBO

contract somewhat similar to the Saidabad II WTP. Further financial analysis based on a

project model with DBO scheme provide a treated water (“proxy”) price of BDT 5.44m3 that

fully covers all operational expenses of the intake and Ghandarbpur WTP. During the year of

operation of the Gandharbpur WTP when treated water will be supplied the consumer price

of water from DWASA will stand at BDT 9.02/m3, if no future tariff reforms are applied.

66. Economics. The project will replace groundwater sources in supplying water to four

zones in Uttara, Gulshan, Badda, and Mirpur. The project will establish facilities within the

intake pumping station to supply raw water to Saidabad WTPs. This is critical since the

existing water source from Sitalakhya River is degenerating from major pollutions and raw

water from Meghna River will replace the current water supply of Saidabad WTPs. The

project therefore indirectly covers larger consumer base that includes not only the above four

areas but also several other zones of DAWSA operations. The principal benefits will

therefore be sustainable water supply for a growing population within the above zones and

improved quality of water supply services. There are also resource cost savings associated

with replacement of non-incremental water and obviating need to boil water, and decrease in



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household health care expenditures from better water quality and reduction in water-borne

diseases.

67. The proposed project is found to be economically viable under the base case

scenarios and also under various adverse changes in conditions. The economic analysis is

most sensitive to delay in project benefits and reduction in benefits. In all cases the EIRR

remains above the EOCC.

Willingness-to-Pay. A willingness-to-pay survey was undertaken to understand

whether tariff rates could be increased as well as to assess economic viability of the project,

taking into consideration low-income households.

68. A total of 1,041 randomly selected households in Gulshan, Badda, Uttara and Mirpur

were surveyed during the study through a structured questionnaire. A contingent valuation

methodology was utilized with a dichotomous choice elicitation question to assess

willingness-to-pay.

69. Mean willingness-to-pay values were estimated using an econometric model. A probit

model was developed, through which household income and level of education were derived

to estimate the willingness-to-pay of each household. As expected, it was found that

willingness-to-pay rises with rising household income and higher level of education.

70. The average willingness-to-pay was 377.32 BDT per month per household (which is

equivalent to BDT 11.43/m3, while the current tariff is BDT 6.99/m3) with a minimum value of

139.67 BDT, a maximum value of 775.88 BDT, and a standard deviation of 99.14. The

median willingness-to-pay was given by 368.89 BDT.

71. An aggregate demand curve by income groups were derived from the study. All

households keep connected so long the monthly expenditure does not exceed 200 BDT,

(equivalent to BDT 6.02/m3) after which point, the poorest 20% of the households start to

disconnect. At a price of 328 BDT (equivalent to a tariff of 9.94/m3) per month, no poor

household keep connected. At this price, 84.5% of the remaining households maintain their

connection.

72. In each income decile, the willingness to pay is substantially higher than the current

monthly expense. This indicates that substantial tariff increases are economically viable.

73. Some inferences could be made about volumetric price (price per m3) from the

results of the survey. Demand analysis indicates that at a rate of 7.22 taka per cubic meter

of water consumed, no poor households would disconnect. The average willingness-to-pay

of 377.32 BDT per month translates into a tariff of BDT 11.43/m3.

Legal Framework

74. We identified the two highest ranked PPP options in the Interim Report as (i) BOT

and (ii) the JV-PPP option and discussed these options with DWASA and other relevant

stakeholders; namely, ADB and the PPP office. In discussions, we found that the Joint

Venture option is not seen as a viable alternative, mainly because the private and public

sectors are not on a level playing field and the level of mutual trust is rather low. While still

legally possible, the Joint Venture Option as a PPP was dropped and another Operations

and Maintenance Contract, was considered. During subsequent discussions and analysis it

was observed that neither was a viable option mainly due to the inability of DWASA (and the



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GOB) to undertake any major tariff reforms. The appetite for a private sector participation at

this stage appears to be one similar to Saidabad II scheme where a DB(O) type

arrangement is acceptable. A design build contract with more than five years operation has

been assessed and based on it the PPTA team formulated the technical and financial

analysis of the project. Below we summarize the major issues relevant to a PPP scheme

within the Bangladesh WSS.

75. A “Government PPP Support Agreement” should be considered, where relevant

ministries not party to the PPP, or other institutions, commit to the PPP and the

implementation phase. This might be necessary, since the competencies of the public party

to the PPP contract will almost likely not be sufficient to address required issues (permits,

exemption, etc.).

76. The following issues have been identified as “legally” important for the successful

design and implementation of a PPP project:

• Delegation of water abstraction rights to the PPP

• Commercial security mechanism for private sector

• Ownership of assets

• Spatial planning

• PPP Corporate Structure

• Expatriation of profits

• VAT regime

The following paragraphs summarize the recommendations for these legally important

issues.

77. Delegation of Abstraction Rights to the PPP. The Ministry for Water Resources

(MoWR) should, as competent authority for river water abstraction, be committed into the

project development, PPP contract design, and governmental support structure from an

early stage. Whichever option is chosen , i.e. BOT, O&M contract, the permit for river water

abstraction of sufficient quantities of river water is vital. The permit should be a condition

precedent or a covenant of the public side to the contract. A “Governmental side-support

Agreement” should be considered if vital ministries, such as the MoWR, are not considered

as co-signatories to the PPP contract.

78. Commercial security mechanism for private sector. The private sector

investment will require financial safeguards. The most promising, because least

burdensome, would be an Escrow Account in favor of the operator. This could be a simple

interest bearing current account that can be accessed by the operator if and when the public

side fails to pay the operator for the undisputed delivery of services as per the contract. The

escrow account would, as a condition precedent, be sourced with a number of months’ (3 to

6) worth of revenues. Each time the balance drops under a certain threshold (e.g., 50% of its

original balance) it needs to be replenished fully. A letter of credit could back up the public

replenishment obligation. The initial sourcing of the Escrow Account is a condition

precedent, or subsequent to contract effectiveness. If the escrow account is not used, the

balance could be reduced over time and cease with the anticipated recovery of the

investment.

79. Ownership of assets. Assets should be categorized into (i) those in public and

private ownership, (ii) those essential and not essential for the operation of the facilities, and



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(iii) those that have a book value and no longer have a book value. Accordingly, regimes can

be tailored into the PPP contract, where (i) essential private assets with a residual book

value are transferred to the public against appropriate compensation; and (ii) non-essential

private assets can be removed, or left behind, and all other assets would either be

transferred free of charge, or remain with the original owner. Some kind of fair compensation

should be considered, as otherwise the operator would not invest in the final period and

assets might be handed over in a state only fit for the purpose at the moment of transfer.

80. Spatial planning. All issues pertaining to spatial planning should be completed at

the time of launch of the tender. Open issues, if any, would need to be conditioned in the

draft PPP contract and be reflected in a “Governmental PPP Support Agreement”.

81. PPP Corporate Structure. The operator will appear as a legal entity established

under Bangladeshi laws and regulations. Its shareholders will be, most likely or by majority,

investors from abroad. The shareholding structure of the implementing / operating vehicle

should be fixed so that an element of continuity is provided over the course of the PPP

project. Legitimate concerns of shareholders should be addressed at the bidding or pre-

bidding stage and reflected in the bid documents. These concerns usually pertain to issues

like (i) non-recourse financing and parental guarantees, (ii) internal transfer of shares, and

(iii) external share transfers. A market-sounding exercise can address these issues in the bid

development phase and an element of flexibility should be kept in the bid documents.

82. Expatriation of profits. Investors need to feel comfortable about expatriation of

their funds, profits, or dividends. The applicable regime should be clearly shown and

demonstrated in an Information Memorandum. The “Government PPP Support Agreement”

should contain a section on this issue, where the Central Bank of Bangladesh declares that

relevant “approvals” for the expatriation of funds, profits, and dividends will be issued as

soon as possible and practicable.

83. VAT regime. The issue of VAT exemption of local goods, works, and services, if

remunerated in foreign currency, needs to be clarified further with the PPP Office and the

Ministry of Finance. In order to reduce the VAT burden for the investor consortium (local and

international companies), waivers and approvals will be required upon application. These

should be listed in the Information Memorandum and the “Government PPP Support

Agreement”.

84. DBO Scheme. The preferred option is Design-Build-Operate. In order to select a

quality DBO contractor DWASA will require technical assistance in the pre-bid and bid

phases. Either as one comprehensive TA project, or two smaller projects, with one

addressing the development of the bid documents and DBO contracts and the other

providing support during the bid, contract negotiations, and project start up.

85. The following activities would require assistance during the pre-bid phase:

• procurement plan

• expression of Interest

• prequalification criteria

• request for proposal

• draft DBO contract

• draft off-take agreement



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86. The following activities would require assistance during the bid phase:

• prequalification evaluation

• shortlisting

• questions and answers

• bidders meetings

• bid evaluations

• DBO contract negotiation assistance

• project start-up assistance

Final Report update – April 2014 I. Introduction and Background


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I. INTRODUCTION & BACKGROUND

1. This consultancy was to review the previous Feasibility Study (FS) for a WTP to be

built at Khilkhet and this report was written and issued on that basis on 13 March 2013.

However, two days before issuing the Draft Final Report, the PPTA team was advised by

ADB that the location of the WTP should be changed from Khilkhet to Gandharbpur, some

10km nearer the intake, and also some 20 km of the raw water and treated water

transmission pipeline routes had to change. The PPTA consultancy was extended to carry

out a new feasibility study and detailed surveys for these new proposals. This report still

contains the original review of the FS for a WTP at Khilkhet, but is now extended and revised

to cover the new proposed system with the WTP re-located to Gandharbpur with its

associated new raw water supply and treated water delivery pipe routes. The name of the

PPTA project remains ‘Khilkhet’ and the review sections still refer to the reviewed Khilkhet

WTP where the comments are nonspecific to the new location, e.g. when referring to

recommended sizes or treatment process, but the name Gandharbpur is used wherever we

refer specifically to the new WTP location. The future project will be named “Dhaka

Environmentally Sustainable Water Supply Project”.

2. Dhaka is surrounded by water and often inundated by monsoon downpours. And

yet, it suffers from a potable water shortage. The primary reason is that population growth

has overtaken its water supply, and particularly, its groundwater sources that are derived

from the world’s largest well field5. The fact that the water supply system is burdened by

over 40% non-revenue water6 (NRW) exacerbates the situation.

3. In response, the government, through Dhaka Water Supply and Sewerage Authority

(DWASA) acting as the executing agency (EA), assisted by the Asian Development Bank

(ADB) and other development banks and bilateral agencies, has embarked on an ambitious

and sorely needed expansion and refurbishment of Dhaka’s water and sewerage systems.

The water sector is addressed by the Dhaka Water Supply Sector Development Project

(DWSSDP), funded by ADB7. It aims to increase surface raw water sources and thereby

decrease reliance on groundwater abstraction, which, at current rates, mines the aquifers at

the rate of 2 to 3 meters per year. It further aims to strengthen the distribution system,

thereby adding to the service areas and significantly reducing the NRW. Under a Sewerage

Master Plan8, DWASA intends to deal with the additional volume of sewage generated by

refurbishing and renewing existing sewers and treatment plants, adding to the collection

network, and installing new pump stations and treatment plants.

5 Pers. comm., 2012: Director, Water Resources Planning Division, Institute of Water Modelling, (IWM), Dhaka

6 NRW is estimated to be over 40% and DWASA expects to be able to reduce that to about 20% through the

replication of a successful pilot project that promises achievement of this ambitious reduction. 7 ADB. 2007. Report and Recommendation of the President to the Board of Directors: Proposed Loans and

Technical Assistance Grant to the People’s Republic of Bangladesh for the Dhaka Water Supply Sector Development Program. Manila. The scope of the program included preparation of a feasibility study of the project.

8 Dhaka Water Supply and Sewerage Authority, 2012, , Master Plan Report (Updating/Preparation of Sewerage

Master Plan of Dhaka City and Preparation of Detail Design & Bidding Documents for Priority Works for Existing Sewerage System of Dhaka City),Grontmij A/S, March 2012



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4. One of the components of DWASA’s plan to augment the overall water supply and to

reduce the amount of groundwater abstraction is the 500 million liters per day9 (MLD)

Khilkhet Water Treatment Plant Project. DWASA published a comprehensive feasibility

study10 (FS) in 2011, the review of which and endorsement or identification and filling of

gaps are the central objectives of this Project Preparatory Technical Assistance (PPTA)11.

5. The largest component of the Khilkhet Water Treatment Plant Project (Phase 1) is

the supply and construction of about 85 km large diameter raw and treated water

transmission pipe lines12 connecting, as shown schematically in Error! Reference source

not found., a 2000 MLD raw water intake and pump station on the Meghna River with the

WTP, as well as treated water transmission lines connecting with the distribution system

inside Dhaka, mostly benefitting Uttara, Gulshan/Banani, North Badda, and Mirpur districts.

The project also includes provision of pumping equipment and pipelines to supply Saidabad

WTPs.

6. We also reviewed DWASA’s plan to collect, treat, and dispose of the resulting

sewage and the sludge produced by the additional amount of water directed into the Dhaka

water distribution system, approximately 75% of which will be converted to domestic

sewage13. The PPTA team considered which of nine Phase 1 and nineteen Phase 2 priority

investments outlined in DWASA’s sewerage master plan14 could be prepared to tender

stage15. After much consideration and discussions with DWASA, it was concluded that none

of the priority projects would be included under the ensuing project. The revised

Gandharbpur system with its new WTP location and revised pipe routes are in Figure 2 and

the originally envisaged Khilkhet Water Treatment Plant Project is shown in Figure 3.

7. Objectives & Outcome. The objective of the PPTA assignment is to obtain the

agreement of the government, the executing agency (EA) that is the Dhaka Water and

Sewerage Authority (DWASA), and ADB to the Khilkhet Water Treatment Plant Project

(Project) design and feasibility study (FS) within 30 weeks from start16 of the assignment.

9 This is Phase 1, with an expansion of 500 MLD Phase 2 planned to go into production in 2020. The intake is

proposed to be designed for 2000 MLD; i.e., the future supply for Gandharbpur 1 and 2 as well as Saidabad 1, 2, and 3.

10 DWASA, 2011, Feasibility Study for Augmentation of Water Supply to Dhaka, Design and Management Consultancy Services, Dhaka, August 2011

11 The PPTA was approved by ADB on 21 February 2012 with an amount of $900,000, financed on a grant basis by ADB’s Technical Assistance Special Fund. The TA became effective on 24 July 2012, which was procedurally delayed due to a late approval of the Technical Project Proforma (TPP) by the government. DWASA is the executing agency of the TA.

12 About 51 km of 2200 mm dia (including Saidabad), 13 km 2000 mm dia. (Treated Water main from WTP), and distribution reinforcement pipes within Dhaka, comprising: 0.9 km 1800 mm dia, 13.3 km 1400 mm dia., and 6.4 km 1000 mm dia.

13The incremental volume of waste water is estimated at 70% of the Gandharbpur WTP due to groundwater replacement of which approximately 75% will end up as sewage; i.e., 262.5 MLD. The extension of Pagla STP from 100 to 200 MLD and the construction of the new 500 MLD Dasherkandi STP will amply treat this increased waste water volume.

14 Dhaka Sewerage Master Plan Project Package DS-1A, funded by DWASA

15Tendering implies pre-design unless the design-build option is preferred, in which case, performance specifications are required.

16The start of the assignment has been taken as 19 September 2012 with the arrival of the team leader in Dhaka. That determines the end of the 30-week PPTA as 16 April 2013, the submission of the Final Report incorporating comments from ADB and DWASA.



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8. The outcome is this Final Report (FR), which is a composite of endorsements of the

FS prepared for DWASA and clear identification of gaps therein with proposals and

recommendations on how to fill those gaps.

9. The TOR (Appendix 1) specify tasks and set out the expected output that is echoed

in the Concept Paper17; namely, a more reliable and sustainable potable water supply in

Dhaka. Our efforts have been in that direction.

10. The TOR require that “The outcome of the project preparatory technical assistance

(PPTA) for Preparing the Khilkhet Water Treatment Plant Project will be project design and

feasibility study that the government and ADB have agreed upon.” We have assessed a

comprehensive Feasibility Study (FS) that asserts, and documents, technical feasibility and

financial feasibility and in very general terms, we agree with both assertions. Evidently, the

government (DWASA) also agrees, as witnessed by its activities, specifically those related to

acquisition of necessary properties.

11. We have undertaken a due diligence exercise for the Asian Development Bank to

support its intention to partially fund the Khilkhet Water Treatment Plant Project. To that

end, we have reviewed the Feasibility Study by DMC for DWASA and discussed various

aspects with pertinent agencies including, foremost, DWASA as well as Bangladesh Inland

Waterways Transport Authority (BIWTA), Bangladesh Water Development Board (BWDB),

DoE, Department of Fisheries (DoF), Department of Forests, MoA, MoWR, PPP Office,

RAJUK, RHD, IWM, Standard Chartered Bank, and WHO. Since the FS is extensive, our

approach is to list all sections in order of appearance in the FS and either endorse them or

offer proposed or recommended changes. Interested parties need therefore read this report

with reference to the FS.

17

ADB. February 2012. Concept Paper for People’s Republic of Bangladesh: Khilkhet Water Treatment Plant Project (formerly Khilkhet Water Supply Project).



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Figure 2: Project Layout Plan



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Figure 3: STP Map



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Figure 4: Schematic

Final Report update – April 2014 II. Feasibility Study Review


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12. We are referring to the Feasibility Study for Augmentation of Water Supply to Dhaka,

Final Report, August 2011, by Design & Management Consultancy Services18 for Dhaka

Water Supply Sector Development Project (DWSSDP), ADB Loan No 2382-BAN (SF). The

FS consists of the following volumes:

Volume I Feasibility Study Report

• Vol I-1 Main Feasibility Report

• Vol I-2 Technical Report

• Vol I-3 Drawings (separate volume), and its appendices:

• Appendix 1: Water Demand Calculations

• Appendix 2: Hydraulic calculations and cost of pipeline construction

• Appendix 3: Comparison of pipe material.

• Appendix 4: Net Present Calculations of Investments

• Appendix 5: Comments and Clarifications to Final Draft

Volume II. Morphological Assessment of Intake Sites

Volume III. Geotechnical Report

Volume IV Hydrogeological and hydrological Considerations

• Vol IV-1. Determination of minimum and maximum flow in Sitalkhya and Meghna

rivers

• Vol IV-2. Dhaka Area Hydrogeological Assessment

Volume V Water Treatment

• Vol V-I Water Treatment Design Report

• Vol V-II Water Treatment Functional Analysis

Volume VI Dhaka Transmission system

Volume VII Topographic Survey

Volume VIII Preliminary Environmental Assessment.

Volume IX (SIA) was mentioned in the FS and we unofficially obtained a copy as

DWASA did not approve it.

13. We have compared Volume I - 1 Main Feasibility Report and Volume I - 2 Technical

Report and provided a summary opinion on the remaining volumes. Volume II.

Morphological Assessment of Intake Sites has been reviewed by a bona fide expert. The

results of that review will be included in the Final Report. Volume VIII Preliminary

Environmental Assessment will be replaced by an IEE under separate cover. Similarly, a

comprehensive SIA, together with an RP, will be submitted under separate cover.

18

The Design and Management Consultants comprised Grontmij-Carl Bro (GMCB) in Joint Venture with AQUA

Consultant and Associates (AQUA), Bangladesh Engineering& Technology Services (BETS), and the Institute of Water Modelling (IWM).



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II FEASIBILITY STUDY REVIEW

A Volume I – 1: MAIN FEASIBILITY REPORT

14. This section reviews the FS for a WTP at Khilkhet, but is now extended and revised

to cover the new proposed system with the WTP re-located to Gandharbpur with its

associated new raw water supply and treated water delivery pipe routes. The name of the

project remains ‘Khilkhet’ and the text still refers to the reviewed Khilkhet WTP Project,

where the comments are non-specific to the new location, e.g. when referring to

recommended size or treatment process, but the name Gandharbpur is used wherever we

refer specifically to the new WTP location.

1. INTRODUCTION AND BACKGROUND 15. The introduction refers to the water supply to be augmented by 2013 through a new

500 MLD WTP to be located in Khilkhet. The FS was completed in August 2011 and it

should have been recognized that the 2013 date was impossible to achieve. We have

based our analysis on a 3-year construction period starting in 2015, which would put the

Gandharbpur WTP on line by 2018.

1.1 Introduction 16. The introduction makes the valid case that surface water supplies are necessary to

meet the demands of Dhaka’s rapidly growing population since the vast aquifer underlying

the city is mined at an average rate of over 2 m/year and that the poor state of the current

distribution system exacerbates that situation19.

1.2 Terms of Reference 17. The TOR for the FS required that only preliminary social and environmental

safeguard documents (SIA and EIA) be prepared and excludes institutional development, an

economic analysis, gender action plan (GAP), and did not require the assessment of PPP

feasibility. To satisfy the TOR for this PPTA, we have provided in addition to a detail review

of the FS Study (i) an IEE to satisfy ADB environmental category B20, (ii) a resettlement plan

(RP), (iii) a GAP, (iv) a section on institutional development including a financial

management assessment (FMA) of DWASA and a 20-year financial forecast, (v)

development of a project finance model and analysis for private equity investment and

alternative scenarios, and (v) an economic analysis including a willingness-to-pay survey, as

well as (vi) a thorough review of the legal framework that pertains to PPP.

1.3 Methodology of Study 18. The study follows a rational methodology.

19

The “Dhaka Water Supply Sector Development Project” (DWSSDP) which is currently under implementation,

aims to reduce the present 40% NRW to around 20% by rehabilitating or replacing much of the distribution network in Dhaka as well as installing some 88 district meters and new household connection meters. The project is funded by the government and the Asian Development Bank.

20An EIA to satisfy the DOE environmental category Red will be prepared by the design-build contractor. The EIA is expected to closely follow the content of the IEE. This arrangement has the agreement of the DOE and ADB.



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1.4 Output of the study The output is listed in paragraph 7.

1.5 Structure of this report (FS) The six steps listed are well chosen; however, we have reservations about some of the

content21, which we elaborate under the individual sections.

2. PROJECT AREA 19. This section provides a general introduction to Dhaka and Bangladesh with respect

to geographic and demographic characteristics, topography, and socio�economic

conditions.

2.1 Geographic and demographic characteristics No comment.

2.2 Topography No comment.

2.3 Socio-economic conditions No comment.

3. DHAKA WATER SUPPLY SITUATION

3.1 Existing water supply situation 20. The existing water supply situation is generally described. However, we believe that

the deep aquifer as a source is underestimated due to a misunderstanding of its capacity.

3.2 History of DWASA 21. Section 3.2 provides a very brief history of DWASA.

3.3 Related water projects in Dhaka 22. Section 3.3 lists related water projects in Dhaka.

(i) Dhaka Water Supply Project. The purpose of the project is to improve the

water supply situation in Dhaka by improving the network and introducing District

Metering Areas (DMA) which are hydraulically self-contained and maintain water

pressure 24 hours per day. The project is ongoing with a scheduled finalization by

2013. The project is being funded by ADB and the government. The current

estimated completion is mid-2014. It is expected that an extension of 2 years will be

sought in order to complete the task.22

(ii) Pagla/Keraniganj WTP project. A feasibility study has been completed by

Institute of Water Modelling (IWM) with the purpose of assessing a 900 MLD WTP

located in the south western part of Dhaka and drawing water from the river Padma.

The project is in two phases with phase 1 with capacity of 500 MLD to be completed

by year 2015 and Phase 2 with capacity 500 MLD to be finished by 2020. However,

21

In order: river morphology, hydrological considerations, water quality, water treatment methodology, transmission system methodology and route alternatives, pipe material alternatives, cost estimates for options, and comparison of technical alternatives and recommendations.

22Pers. comm., DMC



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we understand the project has not started and have deferred it to 2017 in our

Demand / Supply balance calculation.

(iii) Saidabad WTP Phase 2. Construction of the Saidabad II surface water

treatment plants was started in 2010 and completed in mid-December 2012. The

project doubles the capacity of Saidabad I from 225 MLD to 450 MLD. The project

was financed by Danida and the government.

(iv) Singair and Savar ground water project. IWM has prepared hydraulic

modeling for this project which covers a new well field to the west of Dhaka. The aim

is to provide 300 MLD from the new well field with a possible implementation in the

period from 2015 to 2020.

(v) A 150 MLD WTP Project (Tetuljhara-Bhakurta) was mentioned in PPTA

Meeting Notes 9, but no further information could be obtained. This has not been

included.



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4. EXISTING RESOURCES 23. This section aims to describe all existing water resources available to DWASA.

4.1 Existing Groundwater Resources 24. The number of wells used in the FS is apparently a moving target. We have been

advised that there are about 630 wells in operation. The extraction rate must be considered

an estimate as most of the wells are reportedly not equipped with water meters. ADB (2007)

is cited variously as advising that by 2015, about 50% of the wells will be inoperative. We

assume that is based on the rate of the falling water table, rendering pumps inoperative,

rather than DWASA’s program of well retirements. In our discussion on supply vs. demand,

we assume a present extraction rate from the aquifers of 1950 MLD . We have also

assumed the IWM-recommended maximum of 1260 MLD from the upper aquifer and 380

MLD extraction from the lower aquifer through 94 wells for a total sustainable extraction rate

of 1640 MLD. Since the lower aquifer is confined, sustainability does not apply; however,

IWM has advised that the available volume may be tapped for many years, possibly

decades, to come. Consequently, we have included the abstraction from the lower aquifer in

our supply vs. demand analysis in Appendix 5.

25. Whereas the FS notes that one of its JV partners, Institute of Water Modelling (IWM),

has estimated that a sustainable extraction from current groundwater sources is

approximately 1640 MLD, the study is nevertheless based on significantly less, and in our

view overly conservative, abstraction of 600 MLD. It should be noted that IWM arrived at its

estimate based on scientific observations and up-to-date mathematical modeling.

Consequently, we have based our supply assumption on the sustainable yield suggested by

IWM, with a gradual reduction based on future measurable demands. In order to dispel any

doubt about the sustainable availability of groundwater, we have recommended that IWM

prepare a program of systematic retirement of deep wells since the aquifer is not depleted

evenly, as the commonly referred to 2 to 3 meter subsidence implies. The TOR for that task,

schedule, and estimated costs are in Appendix 5. We note that the FS also recommends

“that further analysis is implemented regarding availability of groundwater.”.

26. The FS utilizes 600 MLD as safe extraction from upper and lower aquifer. In view of

the fact that a bona fide scientific institution (IWM) is on record as pegging that number at

1640 MLD23, we strongly believe that 600 MLD is overly conservative, the difference

representing almost three Gandharbpur WTPs.

4.2 New Groundwater resources, Singair and Savar wellfield 27. We have adopted the exploitable yield from this well field of 300 MLD, as estimated

by IWM, as well as the earliest dates of production in 2015 and 2020.

4.3 Existing Surface Water Sources 28. Saidabad 1 with design capacity of 225 MLD has been in operation for close to 10

years and Saidabad 2, with the same design capacity, has recently been inaugurated24 and

is under O&M contract for three years. Saidabad 2 is very similar in design to Saidabad 1

except for two features. To ensure treatability of the increasing ammonia load that is caused

23

A maximum abstraction rate of 1260 MLD sustainable yield from the upper 2 aquifers and 380 MLD from the

lower, confined aquifer. 24

Saidabad 2 was inaugurated 13 December 2012, ahead of schedule and reportedly on budget.



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by urban pollution, a biological ammonia reduction unit process25has been added.

Secondly, the FS lauds the use of Degrémont’s PulsatorsR; however, we recommend

utilizing conventional settling tanks at a relatively small premium (additional concrete

structure minus the cost of the inclined plates or tubes) since that would allow a simple

retrofit of tubes or plates later on when additional output may be required.

29. Chandnighat. We have included the current output of 10 MLD from the

Chandnighat WTP in our supply vs. demand analysis and assumed that it will be refurbished

to deliver its design capacity of 39 MLD by 2015.

30. Goodnail and Sonakanda. The two WTPs supply about 19 MLD to Narayanganj,

which, although in DWASA’s service area, was not included in the project area.

Consequently, the output is not included in our supply vs. demand analysis. Likewise, the

planned 58MLD WTP for Narayanganj is not included in the project area and therefore not

included in our supply vs. demand analysis.

4.4 Planned Surface water sources 31. Present and planned surface WTPs are listed in Table 7 and illustrated in Figure 3.

The Dhaka Water Supply Master Plan is under preparation by IWM (with draft findings due

in July 2013) is expected to provide updated estimates of the sustainable aquifer yields,

phasing of groundwater reduction and resulting impact on planned surface water sources.

5. WATER DEMAND 32. This section attempts to rationalize a design “demand” of 130 Lcd based primarily on

the results of the Manikdi Pilot Study but also refers to the estimated water production from

deep wells, an assumed 40% “leakage”, and an assumed population base. Whereas we

believe that the non-revenue water (NRW) may be 40% or more, we are quite certain that

the 40% is not actually leakage; rather, it is a combination of real and administrative losses.

Table 7: Present and Planned Surface WTPs in DWASA Service Area

WTP Present MLD

Future MLD Area served

Chandnighat 10 39 (2015)a Dhaka

Goodnail & Sonakanda 19 Narayanganj (not in project)

Narayanganj 58 (2017) Narayanganj (not in project)

Saidabad 1 225 Dhaka (South-East)

Saidabad 2b 225 Dhaka (South-East)

Saidabad 3 450 (2020) Dhaka (South-East)

Gandharbpur 1 500 (2018) Uttara, Badda, Gulshan, Mirpur

Gandharbpur 2 500 (2025) Uttara, Badda, Gulshan, Mirpur

Pagla 1 450 (2017)c Dhaka (South-West)

Pagla 2 450 (2025) Dhaka (South-West)

a Dates shown above for bringing WTPs on line are as assumed by PPTA in the graph below, not

necessarily reflecting the current DWASA plans, of FS, as these often conflict / change. b operational since 13 December 2012, 2 years ahead of the date in the FS

c We do not believe that Pagla 1 can be operational in 2015, as suggested in Section 5.5 of the FS

25

It is interesting to note that the IFAS MeteorR

is marketed by Degrémont as a sewage treatment unit process.



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Figure 5: Planned Water Supplies

Source: DMC Feasibility Study

5.1 Introduction 33. Although the introduction promises that population projections are included in this

section, none can be found except for one tentative population figure of around 10 million

GANDHARBPUR WTPs

Water injection points from different planned sources

SAIDABAD WTPs

PAGLA WTPs

SINGAIR & SAVAR

WELL FIELD



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based on an assumed percentage of coverage. We understand that the base population

used in the FS derives from the 2001 Census while our population projections are based on

the 2011 Census; i.e., 12 million.

5.2 Present water consumption and real losses 34. Since the only real data derived from the Manikdi Pilot Study showed a water

consumption of 135 Lcd as a two-year average rising to 146 Lcd towards the end of the

study, we have adopted 150 Lcd as a base (2012) consumption figure that is expected to

level off once a rational tariff system is introduced by DWASA. By rational, we mean a

progressive block system26 that inherently promotes conservation where the first block is a

small amount at a small rate (say 15 m3/month at BDT4/m3) to guarantee the very poor

access to DWASA water supply and two (or more) blocks at progressively larger unit costs,

such that the average tariff is sufficient to fund DWASA’s O&M plus debt service.

5.3 Population forecast 35. As noted, we have based our population base on the 2011 Census27; i.e., 12 million,

and have further assumed that the service population will rise to 20 million by 2030, which

represents a 3% annual compounded population increase.

5.4 Demand scenarios 36.

5.4.1 Demand Scenario Parameters

5.4.2 Best Scenario

5.4.3 Worst Scenario

5.4.4 Realistic Scenario

5.4.5 The realistic scenario with high groundwater supply

5.4.6 Realistic demand scenario with medium groundwater supply

5.5 Proposed Water Demand Scenario and Supply Scenario We appreciate the idea of presenting three scenarios (best, worst, and realistic cases); however, we have pursued the objective of the PPTA constructing only a realistic case and testing the robustness through sensitivity analyses at the financial analysis stage. In addition, instead of presenting three separate cases with many similar assumptions, we have presented the output of a simple MS Excel model that is interactive and could serve as one of the planning tools for DWASA in its very difficult job of deciding how to satisfy its mandate to provide potable water to a large, rapidly growing population.

26

The problem of multiple families living in apartment blocks equipped with only one meter needs to be resolved, as noted by ADB. 27

The population of Dhaka district was 11,875,000 according to the 2011 Population & Housing Census: Preliminary Results, BBS, July 2011.



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Figure 6: Water Supply vs Demand

5.6 Demand vs. supply 37. Figure 6 shows the output of a simple MS Excel model to derive a water balance of

demand vs. supply. It illustrates the estimated total demand and supply of water in Dhaka

for the period between 2012 and 2035. Demand is forecasted based on assumptions about

population and per capita consumption as well as estimates of informal demand. Supply is

forecasted as a function of existing and planned construction of water treatment plants and

reduction in the abstraction of ground water with non-revenue water (NRW) deducted, e.g.

“Supply” is actual water delivered to the consumers. Therefore non-revenue water is not

included in the demand curve. Gandharbpur WTP is assumed to come on stream in 2018,

Saidabad 3 in 2020 and Gandharbpur 2 in 2025, but these increments do not appear

significant in the graph above, as they are matched by a simultaneous reduction in

groundwater abstraction. The figure depicts a declining deficit until 2019 and a surplus in the

following years. This result, however, depends on a number of assumptions which were

validated over the course of the PPTA in close consultation with DWASA and IWM. All

assumptions were discussed with DWASA and agreement was reached (Meeting Notes 16

refer).

(i) The starting date and design capacity of operation for each planned water plant

(ii) The starting date and safe yield of a new groundwater source

(iii) The phasing-out dates of aquifer extractions28

28

In our Interim Report, we observed that one of the most significant variables is the reduction of ground water

as a source. The FS has assumed between 600 and 1000 MLD as a safe abstraction rate whereas IWM firmly believes that 1640 MLD is the sustainable yield from upper + lower aquifers. The difference is more than one Khilkhet WTP; i.e., a significant and costly difference. Meetings with IWM and perusal of its seminal report on ground water in Dhaka clearly show that ground water is depleted very unevenly, mostly in the central west

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

Year

ML

D

Supply Demand



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(iv) The safe yields of aquifers

(v) The linear reduction of NRW from present 45% to 20% in 2026

(vi) A 2012 population of 12 million based on the preliminary results of the 2011

Population and Housing Census

(vii) A population growth rate of 3.0% compounded per annum, to 2030

(viii) A current per capita demand of 150 Lcd

(ix) A decline of per capita demand at a rate of 0.8% per annum to 130Lcd in 2030

in response to an effective tariff structure and expected reduced wastage

(x) Informal demand estimated at 84 MLD assuming 1300 wells, 20,000 persons

@ 200 Lcd, and industrial demand assuming 400 industries at 200,000 L/d

each

(xi) A linear decline in informal demand to 5 MLD in 2030 based on DWASA’s

vigilant pursuit of illegal connections and industrial abstraction without adequate

license fees

38. All variables are clearly identified in Appendix 5, an interactive MS Excel

spreadsheet.

This is only a rapid water balance analysis which contains significant uncertainties (e.g.

industrial demand and sustainable aquifer yield within the DWASA supply area), which make

it unreliable for predicting the timing of future new sources.

Significant sources of potential error are:

- Only the industrial demand taken from DWASA is included, but as most is taken from

private wells (quantity unknown) this will reduce the available groundwater for DWASA. If

industries continue to use it, DWASA must reduce its extraction to ensure the overall

sustainable aquifer yield is not exceeded by DWASA and industry combined. This reduced

supply, not reflected in the graph above will require new sources to be brought on stream

earlier than shown.

- Population in the actual DWASA service area must be smaller than the 12 million taken

from the census, but a reliable figure was not available.

A Dhaka Water Supply Master Plan under preparation by IWM (with draft findings due in

July 2013) will have a more reliable demand projection, which should be used instead of this

for predicting when new sources are required.

6. OPTIONS FOR SUPPLY

6.1 Introduction 39. The section presents different options for the supply of 2000 MLD, including the 500

MLD from the Gandharbpur WTP Phase 1.

areas, although generally quoted as averaging 2 to 3 m/year. To assist DWASA with the orderly and effective reduction of ground water dependence, we believe that IWM is in the best position to serve that function. Consequently, we have recommended that IWM provides advisory services in this regard to DWASA by way of developing a plan of action for DWASA such that deep wells are taken out of service in the most critical areas of aquifer subsidence and as surface water treatment plants come on line.



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6.2 Main Options for Supply of Water to Gandharbpur 40. Gandharbpur has been chosen for the revised location of the new WTP because

DWASA had previously acquired the land, obviating the expense of land acquisition.

Whereas we fully agree with the location of the injection into the Dhaka distribution network,

serving mainly Uttara, Baddha, Gulshan, and Mirur, we expressed reservations about the

location of the plant recommending it be better placed at the intake site on the Meghna River

for good technical reasons, improved operational flexibility and potential cost savings of

some $43 million, Appendix 6 provides further details. Re-locating the WTP to Gandharbpur,

as proposed, achieves most of those benefits, chiefly :

• 10km further from Dhaka city, so treated water can be supplied more easily to future

expansion areas east of the city

• Using free land already acquired by DWASA many years ago for such a purpose on

which only compensation payments must now be paid.

6.2.1 Saidabad raw water supply

41. Two separate raw water transmission lines are proposed in the FS to feed water to

Khilkhet and also the Saidabad WTP via the DND canal. During a site visit we observed that

the canal appears to serve as an open sewer. We therefore proposed that the canal not be

utilized as a raw water source and that the 2200mm diameter pipeline be extended some 4.2

km to the twin 2.5m x 2.0m box culvert leading to Saidabad WTPs. Based on the FS unit

cost rates, this would add about $17 million to the project but it would ensure that the

relatively good raw water quality from the Meghna River would be preserved. We further

proposed to construct an inlet headworks chamber at the end of the pipeline to provide

additional head in the existing box culvert. DWASA accepted both proposals.

42. We agree with the analysis in the FS that recommends Option 1A (except for the

location of the WTP as detailed in Appendix 7) of the DFR “Alternative WTP location –

Rationale”. The scheme is shown diagrammatically in Figure 4 and on satellite imagery in

Figure 3.

6.3 Alternatives for Intake Locations

6.3.1 Introduction

43. We agree with all of the considerations listed in the FS and here in Table 8 for the

selection of an intake

Table 8: Intake Criteria

Intake criterion listed in Feasibility Study PPTA team comment

(i) Raw water should be treatable by conventional methods.

(i) Raw water quality is suitable for conventional treatment

(ii) The distance from intake to treatment plant should be as short as possible.

(ii) The distance from the intake to the WTP is not as short as possible.

(iii) The risk of near future urban (domestic) or industrial development upstream of the intake point must be acceptable.

(iii) The location is quite remote. The nearest potential polluter is about 100 km upstream. Inter-ministerial cooperation will be sought to uphold



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watershed protection measures set out in DOE guidelines. The EMP contains related monitoring stipulations.

(iv) The river must be stable or controllable at the intake point site.

(iv) While the morphology study endorses the intake location, it is weak and unconvincing. Consequently, an expert review of the study did recommend further investigations, including a physical model study, to confirm the selection and provide guidance to the designers of the intake structure as well as the protection of the river bank in the vicinity.

(v) Intake points and transmission route should not involve unusual construction methods

(v) The intake will incorporate river bank protection as well as measures to exclude most fish.

(vi) A road should ideally be available between the intake point and the treatment site, where the transmission main can be constructed on the shoulder of the road

(vi) We have based our recommended route from the intake to the Sejan juice factory and onward to the WTP on adding a permanent road costing $7.5m, for use during construction and later, for public transport as well as convenient maintenance access.

6.3.2 Intake at Sitalkhya

44. We note that much unnecessary effort was devoted to the analysis of the Sitalkhya

River since a cursory investigation revealed that (i) its quality is deteriorating at an alarming

rate, making it at best a marginally acceptable source and certainly an expensive one29 and

(ii) the dry-weather flow barely exceeds the design capacity of Gandharbpur 1+2 plus

Saidabad 1+2+3. This effort was also wasted in Volume II. “Morphological Assessment of

Intake Sites”, and Volume IV - 1 “Determination of minimum and maximum flow in Sitalkhya

and Meghna rivers”.

The FS leaves a key question unanswered: “Is it better /cheaper to upgrade the Saidabad WTP process so it can treat Sitalkhya raw water, or to build a new intake and 30km of 2.2m dia pipeline to pump better quality raw water from the distant Meghna river?” The FS dismisses the question with the unsubstantiated claim that it may soon become impossible to treat such high levels of ammonia as may become common in R. Sitalkhya in the dry season. We have reviewed this more carefully.

DWASA operations staff at Saidabad confirmed that last dry season, the Sitalkhya had

exceptionally high ammonia levels (up to 17mg/L, whereas the FS quoted 15mg/l), and

these have increased each year due to uncontrolled and uncontrollable industrial effluent

discharges into the Sitalkhya from paper pulp, edible oil and other factories.

29

The quality issue was reported but it was not demonstrated that the amortized cost of (i) providing the

necessary unit processes to cope with the variety of pollutants and (ii) the increased O&M costs to treat Sitalkhya water exceeds the cost for the raw water pipelines and pumping from R Meghna,



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Based on this information our water treatment process experts confirm that the current proposal, to pump from R Meghna, is probably the best long term solution for the following reasons:

• Also low oxygen 0 to 3 mg/L.

• From a safety view it is better to pump water with a better quality.

• Water with these levels of ammonia can be treated, but other issues arise.

• If the water quality is decreasing every year, the treatment plant must be oversized, which will have a huge impact on the cost.

• There is no catchment management and no way to limit pollution and ammonia

levels

• From a process point of view, we recommend that it is preferable to treat a better quality raw water.

• If the quality deteriorates year after year the process solution may not be

economically viable.

6.3.3 Intake at Meghna & 6.3.4 Conclusions on intake locations

45. We agree with the conclusions to locate the intake for this project on the Meghna

River based on (i) abundant supply even during the dry season when the total future design

flow of 2000 MLD is less than 1% of the 100-year dry weather flow of the Meghna and (ii)

adequate water quality that should respond well to conventional treatment technology

recommended for this project, requiring only two simple pre-treatment processes; i.e.,

sedimentation (to avoid settlement of particles in the transmission pipes) and chlorination (to

avoid organic growth in the transmission pipes).

46. As noted in Table 3, (iv), the conclusion reached in the FS that an intake can safely

be located along the river reach at Bisnondi may be correct; however, we do not believe that

the morphology study presented convincing arguments. An expert review of the river

morphology and its effect on the intake is expected to fill that gap.

47. Whereas the FS hydrological considerations focused on the flow variations in the

Meghna, we are more concerned about the level variations. The FS quotes the 50 year

flood level variation as 7m. We believe that for this project, a 100-year return period is more

appropriate and have therefore recommended a conservative difference of 8m between low

water level in the Meghna and high water level that will govern the design of the intake

structure and the raw water pumps.

6.4 Alternatives for technical Solutions 48. Table 3 lists the six project components for which various technical solutions have

been analyzed in the FS.

6.4.1 Intakes Types

49. As noted in Table 3, we agree with the recommended intake type – a twin concrete

channel – that offers the advantage of serving as simple pre-sedimentation chambers.



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6.5 Raw water pumping station 50. We agree with the FS to utilize vertical turbine pumps as they offer price advantages

over dry-pit pumps. A disadvantage is, of course, that maintenance is more difficult and

potentially, more onerous as vertical turbine pumps should be maintained by periodic

withdrawal and dismantling whereas dry-pit pumps can be maintained based on external

monitoring (such as sound analysis) and may therefore have to undergo major maintenance

less frequently. We further agree that there will be two sets of pumps, one to supply

Gandharbpur and one for Saidabad. We do not agree that the pump station should be

designed such that each set could pump to both destinations as the discharge heads are not

close enough. Because of the large inlet level variations that will be experienced and the

large portion that the suction head variations represent of the total discharge head (TDH),

we believe that the pump lineup should include several, variable speed pumps (through

variable frequency drives) and possibly, all. This enables pumps to run more efficiently

which will provide power cost savings many times the extra investment. Consequently, we

have added 10% to the pump set costs in our cost estimate. The final line-up will be

determined by the design-build contractor in his proposal for approval by DWASA and non-

objection by ADB.

Table 9: Project Component Options

Project component 1. Technical solutions

(i) Type of intake (i) We agree with the recommended intake type that offers the advantage of serving as a pre-sedimentation chamber.

(ii) Detailed routing of transmission line

(ii) We agree with the routing of the raw water transmission pipelines.

(a) From the intake to Sejan juice factory, the pipelines will be constructed in a 31m wide corridor (mostly paddy fields to be acquired by DWASA) that will also contain the paved access road.

(b) From Sejan juice factory to the DND canal, the pipelines will be contained within the road allowance of the road to the Tarabo/Demra Bridge. The RHD advises that the road will be widened from 2 lanes to 4 lanes no earlier than 2016; accordingly, our pipeline construction will precede road widening construction which should make RHD approval routine.

(c) The FS proposed to inject the raw water from the Meghna into the DND canal. We recommended against that plan and instead, proposed to extend the pipelines some 4.2km to where the existing twin box culverts are located that currently feed Saidabad WTPs from the DND canal. DWASA accepted our proposal.

(iii) Transmission line Alternatives

(iii) The FS details a variety of alternatives for the transmission pipelines. We agree with the recommendation to install all pipelines underground via trenches. To save some land acquisition cost for the intake to Sejan juice factory route, we recommend the use of sheet piling. Sheet piling may also be used on the routes near existing roads. Ultimately, the design-build contractor will make the best choice.

(iv) Pipe material (iv) The FS considered only GRP and DI as suitable materials for the pipelines. We believe that both PCCP and epoxy coated steelpipe, should be included in the evaluation of potential pipe materials.

(v) Treatment Processes

(v) We agree with the concept of conventional water treatment (pre-chlorination – pH adjustment if required - alum coagulation plus lime



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and polymer coagulation aid – flocculation – sedimentation – rapid sand filters – post-chlorination). We do not agree with several aspects proposed in the FS; i.e.,

(a) Full automation (b) Influent flow control based on turbidity (c) High rate sedimentation

(vi) Design of transmission system inside Dhaka

(vi) We agreed with the details proposed in the FS for the previous injection point, but now it has moved 3km south, the exact details of pipes required is yet to be determined through numerical modeling by IWM under contract to DWASA.

6.6 Transmission Main Route and Methods 51. We agree with the concept of determining the pipeline route from the intake to Sejan

juice factory based on minimizing resettlement. We also agree that the corridor from the

intake to Sejan juice factory should be acquired so that all pipelines can be accommodated.

We do not believe that the 24m width recommended in the FS is adequate and after several

discussions with DWASA, our recommendation for a 31m width was accepted. One of the

reasons for the additional width is that we recommended, and DWASA agreed, to construct

an access road that would be permanent and as such, would become a useful link between

Bisnondi and the Dhaka – Sylhet highway. Figure 7 shows the main dimensions and

general design considerations of the access road / pipeline corridor.

Figure 7: Typical Pipe Corridor

6.6.1 Transmission line route

52. We agree that:

(i) there will be two separate transmission systems, one to Gandharbpur WTP but the other one not to the DND channel but a further 4.2 km to a purpose-built chamber



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that then discharges the raw water to an existing twin box culvert leading to the Saidabad WTP complex;

(ii) from Meghna to Sejan juice factory the system will consists of 4 x 2200 mm pipes

in Phase 2 but only 2x2200 mm pipes are constructed in this Phase 1 project; (iii) from Sejan juice factory, the system will split with 2 x 2200 mm pipes going to

Gandharbpur WTP in Phase 2 (1 x 2200 mm pipe in this Phase 1 project) and 2 x 2200 mm pipes going to Saidabad in Phase 2 (1 x 2200 mm pipe in this Phase 1 project);

(iv) these pipes will supply the full amount of water in year 2030; i.e., 1050 MLD to

Gandharbpur Phase 1 and 2 and 950 MLD to Saidabad Phases 1, 2, and 3; (v) from Meghna River to Sejan juice factory, the transmission lines will cross mostly

open land (paddy fields), while the pipes will be installed alongside the main roads from Sejan juice factory to Gandharbpur and from Sejan juice factory to the Saidabad intake chamber;

(vi) there are several river crossings along the route, most importantly, the crossings

of Sitalkhya and Balu rivers. (vii) crossings of the Sitalkhya and Balu rivers pose special challenges. We do not

agree these can equally well be achieved by either bridge crossings or by trenched method.

(viii) Gandharbpur WTP to American Embassy:

53. Most of this route is rural. Going north from the WTP the 2000 dia pipes will lie in a Bangladesh Water Development Board reserve along the road to the river crossing, then they follow the alignment of a proposed RAJUK road. We have proposed the stronger DI or RCCP pipe here, rather than steel, because its inherent strength can resist crushing loads from vehicles, GRP is also possible, if strengthened with thicker walls, though this will make it less economical. Even though the pipe should lie in a reservation to one side of the road, and therefore be protected, it is likely the pipe will be laid before construction of the road and will therefore be at risk of damage from heavy road construction vehicles. The cheaper GRP pipe option is not suitable in this situation, unless the pipe walls are specially strengthened, but if the road (for which construction has started at both ends) is completed before pipe laying, this pipe may be changed to GRP with anticipated cost savings. The last 2km to the American Embassy injection point will be laid quite easily, but not cheaply under a wide, straight dual carriageway, currently under construction.

(ix) Juice Factory to DND Canal, South side: This route section is characterized by a busy 2 lane asphalt road with many commercial properties alongside, some of which are built partly over the pipe corridor and will require partial demolition. The commercial nature of the area and the many industrial entrances which cross the pipe route mean extensive vehicle loading is inevitable and therefore GRP is risky and DI is recommended. A wide, stagnant drain runs along much of the route on the S side of the road. It is typically only 8m from the edge of asphalt and 20m wide, extending right up to industry /property boundaries, so the pipes will inevitably have to be laid under water in the drain. The drain is stagnant with little or no flow, evidenced by many access roads which cross it and virtually



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dam it. This means the 20m width of could be partly infilled for pipe laying without detrimental impact on hydraulic capacity. Some drain capacity may be needed for temporary balancing storage for road storm water runoff and this must be checked at detail design. We recommend the pipes be laid at the far side of the drain channel, close to the property boundaries, to leave space for road widening. Pipelaying will be facilitated if a small portion of the drain can be filled to create an access track above water level, for pipe laying plant close to the property boundaries. The pipes can be laid under or beside this track and it should remain in place for access to do emergency pipe repairs. Near the Sitalkhya river crossing, the drain is replaced by commercial buildings, some of which are multi-storey concrete and built within the road reserve, only 10m from edge of asphalt. We recommend designing the pipe to cross the road in these locations to avoid demolition of these obstructions if /where the route is free on the other side of the road. DND Canal to Saidabad box culvert along Demra road DWASA requested (verbally on 11/5/13 site visit) that the Saidabad raw water pipelines should be constructed on the North side of the Demra Road and not in the DND canal reservation on S side, as previously proposed. Demra road south side - Advantages: Less compensation because no demolition of illegal business or industry access roads, but the whole road is likely to be blocked to traffic for considerable periods during construction. - Disadvantages: The steep canal bank is so close to the edge of busy road, the 2 pipes (2.2m dia) must be laid either under the canal bed or above grade. The first option is not recommended because underwater excavation and earth filling to create a working platform in the canal will pollute Saidabad raw water (turbidity and likely worse), causing the treatment process to fail or, at best, to jeopardize the treatment process, increase treatment costs and cut the production rate. It is only possible to put the pipe here if it is elevated above ground on concrete piers on the canal bank. Elevated pipes will be susceptible to vandalism and risk accident from traffic impact. Elevated pipe will have to be steel, not GRP (corrosion risk). Road will be fully blocked during construction (may require night only working, so slower). Demra road north side – Advantages:

• Wide working corridor means simpler, quicker pipe laying (buried in trench beside existing road – same as elsewhere).

• Busy road can remain open for traffic during construction. • Minimal risk of polluting Saidabad intake source during construction. • Buried pipe is safer from vandalism.

Disadvantages: • Delay for extra social, environmental and topo surveys. • More disruption / compensation during construction for industries +

businesses on N side of road. We agree with DWASA this change to the north side is the better option. Route characteristics and pipe laying techniques are similar to the previous section from the Juice Factory to DND Canal.

6.6.2 Transmission line Alternatives



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54. Not used.

55. The purpose of the analysis, as stated in the FS, was to find the optimum

combination of cost and technical considerations. The FS failed in this attempt as the only

component that was selected on a least-cost basis is the pipeline diameter, which was

based on an economic pipe diameter analysis, with a minimum velocity restriction of 1.6m/s

to limit solids deposition. We agree with the method and velocity restriction. We also agree

with the pipeline routing, with these exceptions

i) Our recommendation that the DND canal not be utilized as a raw water source and that

the 2200mm diameter pipeline be extended some 4.2 km to the twin 2.5m x 2.0m box culvert

leading to Saidabad WTPs was accepted by DWASA.

ii) A late30 request by DWASA to investigate the feasibility to utilize an approximately 4 km

long, 30 ft (~9m) strip of land acquired by DWASA many years ago for the purpose of

supplying a WTP near Demra was withdrawn by DWASA since the DPP process for land

acquisition had advanced to a stage where changes such as this would result in

unacceptable delays to the project.

iii) Pipe bridge vs. under river

There are many rivers to cross, ranging from a few meters wide to the Sitalkhya over 300m wide and the Balu River which both carry large ships. The FS considered 4 pipe crossing methods:

1. Pipe bridge at USD 6,000 /m 2. Pipe in shallow trench in river bed at USD 8,000 /m 3. Tunnel deep under river 4. Directional drilling up to 700 dia.

The FS was right to disregard the last 2 on account of high cost (3) and impracticality (too many small pipes required for option 4). The FS supports both options 1 and 2, suggesting similar costs, but we believe the cost estimate for 2 is greatly underestimated. Also, in the absence of proven successful examples of other trenched pipe crossings in similar rivers, we strongly recommend avoiding this crossing method. It is very risky. River depths, flow velocities and effects of seasonal floods on underwater scour depth and erosion are unknown. Scour depths are well known to be deep, unpredictable and destructive in some Bangladesh rivers. It is not feasible to bury the pipe in the river bed with more than 1 or 2 meters cover, which puts the pipe at risk of:

• losing its protective cover and support bedding due to scour, • being holed or dragged by ship anchor, • being swept away by erosion /flood.

We recommend bridge option (1) because it is the inherently safe, while trench alternative (2) is inherently risky and unproven. Such bridges are the most common pipe/river crossing method used in most other countries. Furthermore this is the only river crossing option that will allow quick and easy repairs.

However, DWASA consider that it will be impossible to get a permit (from navigation department) to construct bridges, and state a preference for micro tunnelling or thrust boring under the river bed from deep vertical shafts either side of the rivers. PPTA have estimated the cost for long thrust-bores with 2.4m dia. outer steel sleeve, some $2,500 /m more

30

19 February 2013 Meeting Notes refer



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expensive than steel box girder bridges. These rates need to be verified, but indicate the additional cost of thrust boring vs. bridges may be $2.5m for an anticipated total of 1,000m of river crossings. Although the bridge is cheaper to build than trench and thrustbore, it will be 20m above water level and raise the pipe above its normal level. We must therefore increase pumping pressure to lift Saidabad raw water over the Sitalkhya bridge. The extra pumping required by a pipe bridge over such navigable rivers is 15m extra head, which will cost about $715,000 /year extra in pumping costs. At 7% discount rate, the net present cost is around $6.5 million. The Saidabad route has about 400m of river crossings, so may save $1m in construction by using bridges rather than thrust boring, but cost a multiple of that over the life of the project in extra pumping costs. The extra pumping cost for using bridges on the raw water main to Gandharbpur is less than Saidabad, as the river crossings are further from the outlet, so the project life cost saving of bridges is less. These costs are less significant when considering the security of a pipe carrying a major part of Dhaka’s water supply. There is no extra pumping cost for using bridges on the treated water main from Gandharbpur to Dhaka because it is already at higher pressure, so the aprox 400m of river crossings will cost approx $1m extra using thrust bore instead of bridges. DWASA should decide, before bid document preparation, if the difficulty of getting permission for pipe bridges outweighs the advantage of having pipes easily accessible for quick emergency repair, in the event of failure, as on a bridge, vs thrust bored under the rivers. In this case, repairs could only be carried out, in a rudimentary fashion, after emptying the pipes with difficulty, by men working inside the pipes, with considerable danger, deep under the river. Alternatively, in case of a major failure, preventing man access, a new parallel thrust bore would have to be made, taking several months to construct, before reinstating the supply. In the case of Saidabad, the Sitalkhya might provide the alternative emergency supply.

6.7 Gandharbpur Water Treatment Plant 56. The FS discusses the plant and process aspects in detail but makes no mention of

site and construction constraints or civil works aspects. The Gandharbpur site is on an island

at the edge of the Balu river connected to a good permanent asphalt road by a short 2 lane

causeway which is shared with at least 2 other industrial enterprises on the island. The

other industries are on raised ground and the DWASA site is about 4m below river flood

water level, according to local people who farm all the DWASA land in the dry season.

We anticipate the whole site will need massive land fill to raise it above the expected 1 in

100 year river flood level. This could be done with imported sand, as is done elsewhere, and

also with spoil from the pipe laying works to save in spoil disposal costs. This filling

operation will delay start of construction work on the site and likely lead to long term ground

settlement. Therefore, all the WTP structures are likely to need deep piling. We recommend

borehole geotechnical investigations be carried out as an urgent priority before bidding so

that contractors have a sound basis for their designs and costing.

DWASA also need to obtain reliable hydrological data giving the expected 1 in 100 year river

flood level at the site location, or commission a study to do it – again before bidding.

57. We agree that Gandharbpur WTP Phase 1 (this project) will have a design output

capacity of 500 MLD, with provisions for doubling the capacity in Gandharbpur Phase 2; and

that the treatment plant will include conventional unit processes: pre-chlorination, pH



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correction (lime), coagulation (alum, lime, and polyelectrolytes), flocculation, sedimentation,

rapid sand filtration, and post chlorination.

58. We have assumed 5% wastage to account for sedimentation sludge withdrawal, filter

backwashing, and general housekeeping. Consequently, the WTP should be designed to

process 525MLD. A corresponding adjustment has been made to the raw water pump

design capacity. If backwash recycle and sludge dewatering with recycle are adopted in the

final design, the wastage could be reduced to maybe 2% or even less. The decision to

include either or both features is a financial one best taken at detail design stage when costs

are more accurately known.

The splitting of inflow in three main treatment trains rather than two or four should be re-

evaluated at design stage with a view to maximizing utility and minimizing cost. The same

consideration should apply to the number of filters in each process train.

59. We do not agree that the plant is designed to be fully automatic31; rather, that it is

operated manually, based on data provided by a full-fledged SCADA system, with only

certain semi-automatic32 functions, such as backwashing and the opening and closing of

process valves. We also do not agree with several other detail design recommendations in

the FS

60. The FS pre-design includes for the settling of sedimentation and filtration sludge in

20 drying beds. The FS does not refer to the ultimate disposal method, which we include in

the EMP. We are unclear how sludge would receive “preliminary thickening” in the

sedimentation tanks. Consequently, we propose that sludge thickeners are added to the

process.

61. The FS also proposes to (i) consider the recirculation of sludge to enhance

coagulation and floc formation and (ii) .pump sludge to the sewer line.

(i) We do not agree that recirculation of sludge that contains residual alum could

benefit coagulation, as that is an almost instantaneous process.

(ii) Whether pumping sludge to a nearby planned sewage treatment plant

(Dasherkandi) would be appropriate depends on the treatment process chosen for

the STP and the pumping distance. If the distance is short, say, no more than 1 km,

and the STP aims to remove phosphorous through chemical precipitation, then this

option may have merit and should be further investigated.

6.8 Transmission lines inside Dhaka 62. The purpose of this project is to inject 500 MLD into the NE sector through large

diameter pipelines. This decision was reportedly based on an overall analysis of the water

31

It is conceded that to design and operate a fully automatic large water treatment plant is possible. However, the focus of maintenance would then need to shift from relatively routine mechanical and electrical O&M to include highly specialized electronic maintenance and IT capabilities and access to sophisticated spares and diagnostic instrumentation. To then integrate several fully automatic WTPs into an optimized system supply would pose added challenges, although, again, it is conceded that this would be possible.

32By semi-automatic functions we mean manually initiated functions that are implemented automatically. For example, a pump is started in manual mode by an operator pushing a “pump start” button. That action triggers a program in a PLC (programmable logic controller) with input and output signals to start the motor, check the inlet valve for “open” status, open the discharge valve over a selectable period of time (say, 1 minute), check the discharge valve for “full open” status, and check the output signal of a flow meter for “adequate” flow. The same sequence, or one similar, could be initiated from an input signal such as a level measurement, which would make this particular pump start sequence fully automatic.



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demand centers that appears rational, however, the details will change when IWM complete

their Water Supply Network Master Plan modeling.

63. The FS recommends the use of DI for these treated water transmission mains. We

recommend that the choice of pipe material should be proposed by the design-build

contractor in his bid together with costs for several choices. Assisted by competent

consultants, DWASA would make the final decision after bid evaluation. Source: DMC & IWM

64. Figure 8 shows the areas benefitting from the 500 MLD Gandharbpur WTP injection

into the Dhaka water distribution network and the proposed pipe reinforcement provided

The 21 km of 1m to 1.8m dia pipes included in the project costs, for reinforcing the existing

distribution system, to enable it to absorb the extra inflow, were modeled by IWM for the old

injection point from Khilkhet WTP. IWM were unable to re-model this in the time available,

for the new injection point 3km south of here. The pipe proposals and 21km cost estimates

are therefore provisional and likely to change by +/- 30%. DWASA must commission IWM to

redo the modeling before bid documents.

6.9 Environmental Considerations 65. The preliminary EIA that was presented by the FS in Volume VIII was considered

inadequate and the following FS sections 6.9.1 to 6.9.7 have been replaced as follows.



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Source: DMC & IWM

Figure 8: Effective Services Centers

UTTARA



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6.9.1 Background

66. Not used.

67. An Initial Environmental Examination (IEE) has been prepared as part of the PPTA to

address environmental impacts resulting from the Project. It is based on our review

identification of gaps, and updating of the Environmental Impact Assessment (EIA) carried out

by the FS (Vol. VIII - Preliminary Environmental Assessment). The key gaps identified in the

EIA are as follows:

(i) While the EIA confirms that there are no significant or irreversible impacts

envisaged due to the project interventions, it is not based on a comprehensive

assessment of potential environmental impacts.

(ii) The baseline information on the environment is not complete and the report did

not include information like general environment of the project area, climate and

weather conditions and data, soil characteristics, seismicity, etc.

(iii) The baseline environmental status with respect to air, water, and noise quality

along the project locations is not presented. In addition, specific information on the

following key aspects is not included: (a) impacts on fisheries at the intake, (b) impacts

on the ecologically critical areas (ECA) and the low lying areas in the project locations,

(c) impacts from spoil disposal, and, (d) impacts on flora and fauna in the project

locations;

(iv) The EIA methodology includes public consultations and focus group discussions

(FGDs). However, the report does not document the consultations carried out, the key

issues discussed and identified, and whether the stakeholder concerns have been

integrated into the project designs.

(v) While a series of mitigation measures are proposed to address the identified

impacts, the measures are not location specific and require to be described in sufficient

detail to enable integration into the contract documents.

(vi) The section on institutional arrangements is generic and does not specify the

institutional structure with respect to safeguards implementation, roles and

responsibilities of the environmental personnel of DWASA, capacity building

requirements, and consultant support required.

(vii) The costs for implementation of environment measures have been considered

integral to the civil works / construction, and hence an environmental budget has not

been provided. There is a need to include the following provisions in the environment

budget: (a) monitoring of environmental parameters during construction and operation

stages and (b) capacity building.

68. The gaps identified in the EIA were addressed through field visits, collection of primary

and secondary data to characterize the environment and identify potential impacts; and

substantiated through consultations with stakeholders. Secondary and primary data were used

in updating the IEE. All possible secondary information and data were collected from relevant

sources and from field observations. Primary surveys on air and noise levels at the project

locations were carried out to establish the environmental baselines. Data collection on fisheries,

wetlands, environmentally critical areas, upstream pollution sources, etc. have been carried out

from site visits, secondary data sources, and consultations.

69. Review of Government’s Statutory Requirements and ADB policies were carried out.

This included review of relevant laws, ordinances acts, rules, public notices, standards



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governing environmental quality, health and safety, protection of sensitive areas, protection of

endangered species, etc. at the local, national, and international levels.

70. Consultations with relevant agencies were held to gather information including DWASA,

DoE, Bangladesh Inland Waterways Transport Authority (BIWTA), Department of Fisheries

(DoF), Bangladesh Water Development Board (BWDB), Department of Forests, and RAJUK. In

addition, consultations at the project locations were undertaken to understand specific

environmental concerns. Inputs from these consultations provided inputs to the identification of

mitigation measures and integration into the project designs. The impacts during pre-

construction, construction, and operation stages were identified for which mitigation/monitoring

measures are identified and detailed in the IEE.

71. Based on the IEE findings, an EMP outlining the specific environmental measures to be

adhered to during implementation of the Project has been prepared. During the detailed

design, the IEE/EMP will be further updated as a stand-alone EMP for each of the procurement

packages (and appended to the contract document). This will enable integration of

environmental provisions and management measures in the contract document.

6.9.2 Environmental requirements of the government and ADB

72. In accordance with ADB’s Safeguard Policy Statement SPS, (2009) the Project is

classified as Category B as no significant impacts are envisioned. In accordance with the

government’s Environmental Impact Assessment requirements as outlined in the

Environmental Conservation Act (ECA, 1997) (Amendment 2000) and the Environmental

Conservation Rules (ECR, 1997) the project is classified as a Red Category requiring an EIA

for necessary Environmental Clearance requirements.

73. In accordance with the government’s and ADB’s environmental and safeguard policies,

the IEE assesses the environmental impacts due to the proposed Khilkhet water supply project.

Consultations with the DoE on the nature of documentation required for the environmental

clearances indicated conformance to ADB safeguard policies will be considered as compliance

to the requirements of the government. This IEE therefore presents a uniform document

satisfying ADB and the government requirements. While any additional studies to conform to

the government clearance requirements are not envisaged, data updating if required, will be

carried out, prior to seeking DoE approval.

6.9.3 Anticipated environmental changes prior to construction of the project

74. Not used.

75. Land acquisition and resettlement at the intake site. The proposed intake site on

the banks of the Meghna River at the Bisnondi village is on private agricultural lands owned by

88 families. The crops cultivated are rice, other grains, and vegetables. There are no residential

/commercial structures within the identified lands. A resettlement plan in line with the SPS,

2009 has been prepared based on census and socio-economic surveys of the affected persons

to address the impacts due to land acquisition and resettlement in the project. Full details of the

costs are given in Appendix 20.

76. Impacts on fisheries / river ecology. Intake screens are proposed to be designed

considering the swimming characteristics of hilsa (the key species in the Meghna) to ensure

that the impacts on hilsa as well as the smaller fish including the Jatka (Hilsa fry) are minimized.

Inputs of a fisheries expert as part of the detailed design is recommended, to provide inputs to



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the design of intake screen to minimize impacts on fish. With these interventions, the impacts

on the fishery resources are expected to be minimal.

77. In addition to the small fish, eggs and larvae of the fishes will be impacted. The scale of

impacts, based on consultations, is not significant as the eggs / larvae are uniformly available in

the river. Efforts to minimize such will be integrated into the detailed designs by the fisheries

expert.

78. Impacts on downstream uses. The proposed abstraction accounts for only 0.6% of

the lean flow (Q-95) for 2035, and about 0.2% of the maximum flow (Q-5) for 2035. These

levels of abstraction are within the safe levels of water uptake from the river and will not

adversely impact downstream uses or adversely impact the ecological flows of the Meghna

River. Further, these levels of abstraction are not envisaged to result in any flow modifications

in the river, which can potentially lead to salinity intrusion or result in impacts on downstream

water uses.

79. A 31m wide corridor is proposed to accommodate the transmission mains and provide

an access road to the intake location. The alignment passes through agriculture fields and low

lying areas. There are no environmentally sensitive areas in the vicinity of the proposed

transmission main / access road. Land acquisition and resettlement of private agricultural lands

and resettlement is envisaged. The impacts are being addressed through the provisions of the

RP. Cutting of trees in private lands will be minimized through retaining of trees to the extent

possible. Compensatory plantation for the trees lost at a rate of 10 trees for every tree cut will

be taken up and the conditions for such replacements and estimated cost will be specified in

the EMP. Impact on inland water bodies including fish ponds will be addressed in the detailed

designs through appropriate measures to provide for cross-drainage to minimize severance

impacts.

80. The Saidabad transmission lines from Sejan juice factory to Demra DND canal are

proposed to be accommodated within the RoW of the RHD roads from Sejan juice factory to

Demra en route to the Saidabad WTP. Along this, two pipes of 2200mm are to be laid within

the road reserve (one during this project and one more for Phase 2). This section includes

crossing of River Sitalkhya at Sultana Kamal bridge near Demra. Based on a review of options,

supporting the transmission lines on bridges is preferred to burying the pipes within the river

bed. Other impacts along these stretches include cutting roadside trees and filling low lying

areas along the roads, which can be minimized by careful alignment design during the detailed

designs. The last section along Demra road to the box culvert will run on the north side of

Demra road, on the far side from the canal, in a wide, but partly overbuilt road corridor. Similar

conditions exist as above.

81. Not Used.

82. The new pipe route from the WTP to Dhaka and the new WTP site will be described in

the final IEE which was not ready for this report, as the new surveys took a long time

Transmission pipelines along the DND canal

83. It was proposed to locate the two 2200mm diameter pipelines within the DND canal

corridor for a length of 4.2 km to the twin 2.5m x 2.0m box culvert leading to Saidabad WTPs. It

was foreseen this would avoid compensation costs incurred by following the built up north side

of the road. The pipe could not be laid underwater in the canal however, without serious impact

on the raw water supply quality for Saidabad. It would have to be raised above ground on



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plinths, but DWASA will not accept that for the security risk it poses. Fortunately DWASA now

prefer the wide RoW on the north side of the road for other reasons. We also recommend this

location. While land acquisition is not envisaged, impacts on non-titleholders at the junctions

along the DND Canal are being addressed through the RP provisions. Laying these pipes will

result in felling trees. While efforts to minimize tree felling will be carried out at the detailed

designs stage, compensatory plantation towards the trees to be felled is integrated into the

EMP costs.

Transmission pipelines from the WTP to Dhaka and within Dhaka

The two 2000mm diameter treated water feeder mains (one in Phase 1) leaving the WTP

northwards, will be located first within a Bangladesh Water Development Board corridor on

the road west side, then after the river crossing, laid beside the RoW of the RAJUK “300

foot” road for some 4km. Further on, 1800 ~ 1000mm diameter feeder mains will be laid along

major arterial roads, connecting, as shown in Figure 8, at strategic points that are based on the

Dhaka water distribution model designed and operated for DWASA by IWM under the DMC.

6.9.4 Anticipated environmental impacts during construction of the project

84. The impacts during construction will include typical construction related impacts

associated with construction of water intakes, treatment plants, and laying of transmission lines.

While the nature of these impacts is not expected to be significant, the magnitude is significant

given the size and scale of the proposed facilities. However, these impacts are known and can

be addressed through adoption of good engineering practices and undertaking specific

mitigation measures towards minimization of construction impacts on the sensitive receptors

and communities in the vicinity of locations / alignments of the proposed facilities.

85. Key impacts identified and addressed in the IEE include: (i) loss of productive

agricultural lands and conservation of topsoil; (ii) impacts on low lying areas and water bodies

wherein protection measures are required to minimize impacts on water quality, disposal of

wastes/debris on to the water bodies, and potential disruption of flows; (iii) air, noise, and

vibration impacts due to construction vehicles, equipment, and machinery in the vicinity of

construction site and inhabited sections, in addition to dust control during construction activities;

(iv) impacts on the river courses and the water quality during the construction of the

transmission mains across the rivers Sitalkhya and Balu ; (v) management of spoil disposal due

to the excavation for the transmission mains; (vi) safety measures during construction including

traffic diversions; (vii) management of sites temporarily used for construction activities, including

borrow areas, construction camps, etc., and rehabilitation of the sites after completion of the

temporary use; and (viii) impacts on community health and safety hazards posed to the public,

specifically in inhabited areas. In addition to these measures, environmental measures that

shall be implemented as part of good engineering practices during construction are laid down in

the IEE.

6.9.5 Anticipated environmental impacts during post-construction or O&M of the

project

86. With the careful siting of the project components to avoid environmentally sensitive

areas and the efforts to incorporate environmentally sound designs to minimize impacts (as

part of the design of the components), the impacts during the maintenance and operation of the

proposed facilities will not be significant. There will be beneficial impacts on the communities

due to the improved access to potable water and minimization of extraction of ground water.



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While the disposal of the alum sludge is proposed in the landfill site of Dhaka, efforts towards

alternative uses will be explored and suitably incorporated in the designs.

87. To address risks during the operation of the proposed facilities, DWASA shall prepare

and implement an Emergency Action Plan, which shall include environmental risks and

potential pollution incidences. Capacity building and training of personnel on the emergency

response systems and procedures shall be incorporated in the project.

88. The project will result in increased sewage generation. DWASA, with support from other

development banks and bilateral agencies, has a sewerage master plan (SMP) and has a

phased strategy to implement the SMP, which will address the additional wastewater to be

generated in the city.

89. Protection of the source through regulation of upstream developments especially

discharge of industrial effluents (either untreated or partially treated) has been identified as a

key policy level intervention requiring inter-ministerial coordination. While consultations with

other concerned line departments (Department of Industries and BWDB) do not indicate any

large scale industrial development immediately upstream of the intake, enforcement of the

discharge standards and treatment of the wastes in industrial clusters, both in case of small

scale textile units and the larger industrial units in Ashuganj will be critical to ensure the long-

term protection of the water quality at the intake. While the waste discharges from the existing

Manikpur ferry ghat are not significant in terms of quantum of wastes, provision of sanitation

facilities and waste collection facilities at the ferry ghat (as part of the project) will initiate an

awareness towards arresting the direct discharges into the river.

6.9.6 Environmental monitoring

6.9.7 Conclusions

90. The proposed interventions will improve the environmental conditions in the Dhaka

metropolitan areas, through improved access to treated water and significantly contribute to the

DWASA’s long term objective to reduce the existing pressure on groundwater extraction. While

there are no notified protected areas or environmentally sensitive areas or features in the

project area that will be impacted adversely due to the proposed interventions, the magnitude of

construction related impacts will be significant given the scale of the project. The location

related impacts pertaining are addressed through incorporation of environmental protection

measures and specific design approaches to minimize the impacts.

91. The IEE confirms that the significance of the environmental impacts will be mostly due

to construction related impacts. It is to be noted that the resultant potential impacts can be

offset through provision of proven mitigation measures during the design and adoption of good

engineering practices during construction and operation. The specific management measures

laid down in the IEE will effectively address any adverse environmental impacts due to the

project. The effective implementation of the measures proposed will be ensured through the

building up of capacity towards environmental management within the PMU supplemented with

the technical expertise of an Environmental Safeguards Specialist as part of the design-build

contractor. Further, the environmental monitoring plans provide adequate opportunities

towards course correction to address any residual impacts during construction or operation

stages.

92. The IEE carried out for the Project shows that the adverse environmental impacts can

be addressed through proper location, planning, and design of the proposed Project



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components, control of construction activity, and mitigation measures. The EMP provides for

mitigation of all identified impacts and the contract clauses for the environmental provisions will

be part of the civil works contracts. Further, the proposed Project elements have been

discussed with the stakeholders and no significant issues requiring redress in terms of

environmental safeguards were identified.



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7. COST ESTIMATES FOR MAIN OPTIONS

7.1 Basis for cost estimates

7.2 Cost estimates for options 93. The assumptions for the cost estimates at feasibility stage have been done in

adequate detail and we agree with the source accuracy of most derived unit rates. We note,

that the estimate includes some Phase 2 components but excludes some other required cost

components, only some of which are noted in the FS. We have prepared new cost estimates

that are segregated to facilitate extraction of cost items into separate components.. Further

details are given under review section 16.

94. The FS text that accompanies the cost table states that civil, mechanical, electrical,

and pipeline cost components comprise “bare” costs plus overhead and profit plus a

percentage for installation. Table 10 shows the inconsistencies in the text and tables as well

as the mark-up adopted for the PPTA estimates.

Table 10: Mark-ups

Type OH&P Installation

FS text FS tables PPTA

Civila

Mechanical 20% 20% 20% 20%

Electrical 40% 6% 20% 20%

Pipelines 20% 40% 20%-33% 40%

Fittingsb 20% 20%

a civil costs are all inclusive

b fittings are included as a percentage in pipelines

7.3 Operation and maintenance 95. We have adopted essentially all of the O&M costs detailed in the FS, except that the

foreign exchange conversion rate has changed from BDT70/$ in the FS to BDT80/$. Our

detailed capital and O&M cost estimates are in Appendix 6 with a summary and financing

plan in review section 16.

8. COMPARISON OF OPTIONS

96. Figures 8-1 and 8-2 in the FS summarize the options that were compared and

analyzed. Notwithstanding our recommendation that the optimum location of the WTP33

would be at the intake, we agree with the recommended realistic option 1A and, have based

our cost estimates on it.

8.1 Evaluation of water source and intake 97. We agree that the Sitalkhya River is not a suitable choice for the raw water supply for

this project. We also agree that the Meghna River represents a suitable choice for that raw

water source. The expert review of the morphology study includes an endorsement of the

location of the intake at Bisnondi with possible caveats and recommendations for further

investigations, including a physical model study.

33

Appendix 7 refers.



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8.2 Evaluation of transmission system 98. We agree with the type of transmission lines; i.e., buried, even though it is more

expensive than an above-ground system on pillars. Whereas the above-ground system

would be more convenient to monitor and maintain, it would also afford much easier access

for vandalism, terrorism, and pilferage.

99. The FS recommends DI where the pipeline is laid near or under roads and GRP

elsewhere. We considered steel and precast concrete cylinder pipes (PCCP) as well,

because these are often used and found economical on other projects with pumping mains

of this very large size, but due to the particular installation conditions (weak soils, high

groundwater, and high corrosion potential, we agree with the FS recommendations, but

propose to allowing the bid documents for the design-build contractor to offer alternative

materials with evidence of technical compliance that will be evaluated and will inform

DWASA’s final material choice.

8.3 Supply scenarios 100. The FS discusses the rationale for recommending for this project the infrastructure to

deliver 500MLD treated water through the Gandharbpur WTP and 450MLD34 raw water for

treatment in the Saidabad WTPs 1 & 2. We agree with the approach but also recommend to

include in the design of Phase 1 some of the components for the ultimate Phase 2 capacity

of 2000MLD. Those components are:

(i) Land acquisition suitable for the Phase 2 intake structure,

(ii) intake channels for Phase 2,

(iii) the intake pump station (but only Phase 1 pumps and associated electrical

components),

(iv) pipe and valve configuration to facilitate future expansion of the intake pump

station,

(v) power supply for the Phase 2 requirements (but only Phase 1 transformers),

(vi) land acquisition for the intake-Sejan juice factory corridor to suit the

construction of the access/service road and all pipelines for Phase 2 (but

construct only two pipelines for Phase 1) – this would require 31m wide land

acquisition instead of the 20m proposed in the FS,

(vii) Phase 1 pipeline to Gandharbpur WTP (but construction of river crossings for

Phase 2),

(viii) Phase 1 pipeline to DND canal (but construction of river crossings for Phase

2),

(ix) Phase 1 pipeline to existing twin box culvert feeding Saidabad with raw water

from the DND canal (this was not contemplated in the FS; rather, the FS

concept is to discharge the Meghna River water into the canal for

conveyance, as now, to the Saidabad WTPs),

(x) Gandharbpur WTP with rated capacity of 500MLD,

(xi) pipe and valve configuration as well as channel, floor, and wall design to

facilitate future expansion of the WTP,

34

As noted elsewhere, we have assumed 5% wastage and therefore added about 5% to the Saidabad design

output capacity of 450MLD for a raw water feed of 475MLD.



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(xii) power supply for the Phase 2 requirements (but only Phase 1 transformers),

and

(xiii) land reservation suitable for the future expansion of the WTP.

101. The bid documents for the design-build contractor should specify these

recommendations. A detailed list of components is in Table 9.

8.4 Financial analysis 102. We reviewed the financial analysis and found several anomalies35. Aside from a few

other details with which we differ, we have undertaken a comprehensive financial analysis

that is described in detail in Section III D.

(i) We have increased the design cost from 5% to 5.5% to account for the effort

to include for expansion to Phase 2.

(ii) We have assumed that the design-build contractor will apply for, and be

awarded if applicable, exemption from tax and VAT on all cost items except

civil works. The costs are included in the Financing plan as a cost for GoB.

(iii) We agree that DWASA should finance the project from revenues, which are

derived from water tariff and new connection fees. Our financial analysis

does not, however, factor in future network expansion and water treatment

plant capacity increases that must be derived from additional tariff increases

or other sources.

(iv) We agree with most of the assumptions underlying the NPV analysis in the

FS except:

(a) We have estimated the yearly O&M at about $14 million which

compares to BDT69 crore, which at the FS ForEx rate of BDT70/$ is

approximately $10 million.

(b) We have assumed a linear reduction of NRW from 40% to 20%, rather

than the 15% in the FS.

(c) The assumed technical/design life of the different main project

components and related replacements of major project components foreseen

over the project’s economic life are: Civil: 40-60 years, Mechanical/Electrical:

15 to 20 years and Control: 10 years.

103. We agree with the conclusion not to provide the facilities for Phase 2 capacity at this

stage but to plan for a phased increase based on demand and sustainable groundwater

availability.

104. The TOR for the FS did not include an economic analysis. The TOR for the PPTA

include for such an analysis and it is presented in Section 3 D 2.

8.5 Recommended Option

8.5.1 Recommendation

105. We agree with the reasons in the FS for adopting option 1A and endorse that choice.

We do not, however, endorse the construction of the full transmission system as proposed in

the FS but endorse the phased construction, as also recommended in the FS.

35

Appendix 13 refers.



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8.5.2 Components of the recommended system

106. We agree with the components listed and refer to Table 11 as a summary.

This is also the basis of the project cost estimate.

Table 11: Project Phasing

Component Sized + costed for Phase

General

Land acquisition 2

Environmental safeguards 1

Social safeguards 2

Gender & poverty considerations 2

Intake

33 kV power line to intake 2

Transformers 1

MCCs 1

Access road 2

Pretreatment channels 2

Raw water pump station 2

Raw water pumps, Gandharbpur WTP 1

Isolating valves 2

Check valves 1

Raw water pumps, Saidabad 1

Isolating valves 2

Check valves 1

Pre-chlorination building, Gandharbpur 1

Pre-chlorination equipment, Gandharbpur 1

Pre-chlorination building, Saidabad 1

Pre-chlorination equipment, Saidabad 1

Transmission pipelines

Raw water main - intake to Sejan juice factory 1

Raw water main - Sejan juice factory to Gandharbpur 1

Raw water main - Sejan juice factory to Saidabad box culvert 1

Treated water mains to Dhaka distribution network 1

Clean-out chambers and air valves 1

Cleaning equipment 1

River crossings 1/2

Gandharbpur Water Treatment Plant

33 kV power line to WTP 2

Transformers 1

MCCs 1

Access road 2

Control building 2



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WTP process units (coag, floc tanks, sed tanks, filters) 1

Backwash and high lift pumps 1

Chemical storage building 2

Chemical feed equipment (Cl2, acid, alum, lime, polymer) 1

8.6 Supply from Sitalkhya 107. As noted repeatedly, we agree that the Sitalkhya River is not an adequate source of

raw water for this project.

8.7 Security of supply 108. The topic is repeated in 9.3 of Report Section I-2: Technical Report where we have

addressed it.

8.8 Recommendation for additional Investigations 109. The FS recommends that the following three additional studies be undertaken.

(i) Confirmation of available groundwater resources. We fully agree that this

fundamentally important project parameter be confirmed. We have proposed that

IWM be engaged to advise DWASA on an orderly retirement of deep wells. This

would necessarily require an up-to-date knowledge of the aquifer levels throughout

Dhaka; knowledge we believe IWM has, or will confirm, when undertaking the

assignment. The TOR for the task and a cost estimate have been forwarded to ADB

and DWASA for approval.

(ii) Additional water analysis. We note that the FS did not obtain any samples

during the dry season. Opinions are divided on the likelihood and magnitude of tidal

influence at Bisnondi and more importantly, saline intrusion. It is therefore strongly

recommended to immediately engage the services of a qualified entity to undertake a

sampling regimen to augment existing qualitative and quantitative data of the

Meghna River near the proposed intake location. The investigation should focus on

the seasonal variations in water levels, tidal influence, salinity intrusion, TSS, TDS,

and metals. If this study is commissioned soon, a very useful two years of data could

be obtained. We also recommend that the program be set up to be continuous during

the construction period and as an adjunct to the WTP O&M procedures. The TOR

for the program and a cost estimate have been forwarded to ADB and DWASA and

have been approved. ADB agreed to pay the water quality monitoring of Meghna

River. But when DWASA evaluated proposals in April, they found that all the firms

are not qualified. So they re-issued the request for quotation. Because of this, the

implementation is being delayed. It is expected to start in July.

(iii) Additional geotechnical investigations. We believe that the geotechnical

report was thoroughly prepared and informative. We do agree with the FS that

additional geotechnical investigations will be undertaken by the design-build

contractor as a matter of course since all designs have not been finalized.

(iv) Meghna River morphology. The review of the river morphology report (Vol.

2 in the FS) indicates two major issues. Firstly, only two sources are contemplated,



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one of which, the Sitalkhya River that currently supplies raw water for Saidabad

WTPs 1 & 2, which suffers from ever increasing pollution and lack of adequate flow

in the dry season. Consequently the morphological data collected in this regard and

the analyses presented are superfluous. The second choice; namely, the Meghna

River, is obviously a better choice, since the only other choice presented is not a

bona fide option. The effort devoted to accumulating that data would have been

better spent adding to the insufficient data presented for the Meghna River. While

the quantitative and qualitative data for the Meghna are significantly better and likely

support the choice of intake in those regards, the morphology part is weak and

fraught with repetitive, vague assertions and the suggestion to accept opinion instead

of evidence. We have recommended that due to its significance in the design of the

intake and pre-treatment process designs, we recommend that the report be

reviewed by an expert to arrive at a sustainable intake structure and upstream and

downstream river bank protection. We recommend that a physical model study

should be seriously contemplated. ADB engaged the services of an expert who

began the review in March 2013 and submitted a draft final in June 2013, which is

summarized in Appendix 22 “Morphological assessment Meghna water intake”. He

recommended river training works for the FS preferred intake option, costs for which

($1,5m) have been included in our project cost estimate. He also required further

modeling, which will be done by the DB contractor. However, he points out that the

river training works may not be required if an alternative intake design option is

chosen by the DB contractor.

8.9 Implementation arrangements 110. The FS notes that the preparation of bid documents according to ADB standards is

part of the Feasibility Study. It further proposes to divide the works into three packages;

namely, (i) Intake works and transmission lines, (ii) surface water treatment plant at

Gandharbpur, and (iii) transmission lines inside Dhaka and estimates that the construction

period will be at least 3 years.

111. Firstly, the FS appears not to contain tender documents and we recommend that

they be prepared by DWASA, suitably assisted by competent and experienced consulting

engineers, as shown in Figure 9: Project Implementation Schedule. Secondly, while any

contract packaging proposed is possible, the final arrangement will depend on several

factors, including (i) whether PPP through private investment is part of project financing and

the amount, (ii) ADB and DWASA policy and preference on contract packaging, (iii) opinions

expressed by potential bidders, and (iv) our recommendation. Lastly, we believe that

bidding based on design-build, whether that includes PPP through private investment or not,

can limit the construction period to 3 years. Based on assumed activities, their sequence,

and their duration, we believe that Gandharbpur WTP Phase 1 can deliver 500MLD potable

water by late 2017 - 2018 and raw water to Saidabad 1+2 by the same time. The Project

Implementation Schedule below shows the major activities of consultants, contractors and

other players.



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Figure 9: Project Implementation Schedule



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112. Figure 9 shows the extent of the rainy season as demonstrated by a superimposed

graph of the average monthly rainfall intensities (mm/month). Obviously, the total of the

pipeline construction will require the most time. We have estimated that all of the pipes can

be laid in the available time in relatively dry conditions so long as the successful bidder(s)

will field a sufficient number of pipe laying crews. It also lists a maximum of seven design

and build packages. These are not to be construed as procurement packages, although

they could be.

Further discussion and recommendations are in Section D 4.

8.10 Social Impact Assessment

8.10.1 Methodology of SIA preparation

8.10.2 Review of survey findings

8.10.3 Impact on intake area

8.10.4 Impact of raw water transmission line

8.10.5 Impact of water treatment plant (WTP)

8.10.6 Impact of treated water transmission line inside Dhaka

8.10.7 Summary assessment of impact

8.10.8 Social impact assessment Conclusion

The preparations of the Social Impact Assessment and Resettlement Plan were delayed due

to several reasons, including a large number of public disturbances, several late changes to

the pipeline route and the difficulties to obtain useful survey and land title information.

Consequently, these documents will be submitted separately.



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B Volume I - 2: TECHNICAL REPORT 9. DESIGN PARAMETERS

9.1 Water demand 113. Water demand for Dhaka is discussed in Section 5.

9.2 Water quality and water treatment 114. The FS advises to produce treated water that conforms to WHO guidelines and

Bangladesh drinking water quality ECR 1997. One of the two most important parameter that

is reduced by the WTP is turbidity (the other is microbiological matter by providing a multi-

stage barrier). In Section 10.3, the FS quotes WHO and Bangladesh standards of 10 and 5

NTU respectively. We recommend that the turbidity in the treated water leaving the WTP

should never exceed 1.0 NTU and that the operational guideline should be set at 0.5 NTU,

to be achieved 95% of the time.36. The design of the process units and their controls should

accommodate these recommendations. Operational procedures must be devised to achieve

these recommendations. Computerized monitoring equipment must be provided and staff

trained in its use to display real-time trends and record events. Laboratory staff must

monitor, record, and report treated water quality parameters to review past trends and

predict operational changes, if required.

115. As noted, we do not agree with the FS recommendation to design the WTP for fully

automatic operation.37

9.3 Security of Supply 116. The FS asserts that it has analyzed risks for the supply and taken into consideration

the following factors during the choice of options and technical alternatives.

(i) Failure of power supply (ii) Failure of utility components including pumps, valves, etc. (iii) Earthquake (iv) Flooding and low water levels (v) Human interference including vandalism, terrorism, etc. (vi) Pollution of source

117. We found no evidence in the FS of any special considerations to prevent any of the

six situations from affecting the water supply.

(i) Failure of power supply. The FS discussed stand-by power generation but did not include for it in the cost estimate. We have included stand-by power generation in our capex and opex estimates. (ii) Failure of utility components. The only stand-by component noted is one stand-by pump out of five; i.e., 20%. We have not added any other stand-by facilities except for an alternate power supply.

(iii) Earthquakes. It is a requirement under the Bangladesh building code to allow for seismic activity. While the project area is in a moderate zone where

36

We recently discussed this recommendation with WHO staff in Dhaka while sharing ideas on the components of a water safety plan for Dhaka

37We assume that the FS recommendation for the WTP to be “fully operational” is a typographical error and what was meant was “fully automatic”.



44 309128

a=0.15g, we recommend that greater acceleration is assumed during detail design to guard against what experts believe to be the likelihood of stronger earthquakes affecting the country. We recommend that this requirement will be reflected in the specifications for the design and construction of the works. Of particular concern is the choice of pipe material in locations where the geotechnical investigations have predicted the potential for liquefaction. GRP requires engineered bedding and fill, to enhance its strength in operation and to help protect it against detrimental liquefaction of surrounding material in an earthquake of sufficient magnitude..38

(iv) Flooding and low water levels. The FS referred to 50-year return periods for flood levels and low flows whereas we propose a more prudent, and less risky, 100-year return.

(v) Human interference. We assume that based on the Saidabad examples, the facilities will be walled as a normal provision and security guards would patrol the premises on a 24-hour basis. Beyond that, we found no evidence of any other design features that would prevent willful damage. Our O&M costs include for 24h/d, 365d/yr security staffing.

(vi) Pollution of source. While we believe that the Meghna River water quality is good – now – we found no discussion on the steps required to ensure that upstream conditions will not deteriorate due to industrial or commercial activities in the waters We recommend that DWASA initiates the preparation of a water safety plan as an adjunct to the EMP, at least as it would pertain to watershed protection and monitoring measures.

We have made recommendations for providing security of supply measures to pipelines under section 14.5.6

10. WATER QUALITY

10.1 Water Sources Analyzed

10.2 Sampling program

10.2.1 External sources of data

10.3 Results from water quality survey by the Project 118. The FS records a summary of water quality sampling results from its program. Two

issues are apparent:

(i) The program was conducted from late March until August 2010 and as noted,

did not obtain data for the dry season. We would expect some of the parameters to

peak in the dry season. We recommended that a more comprehensive water quality

sampling program be undertaken and one has been commissioned under the PPTA.

It is expected to provide further information to be incorporated in the design-build

specifications and then, be continued during the implementation and operation

stages of the project.

38

We have on hand several quotations for 2200mm diameter GRP from different countries. The estimated cost

varies by a factor of >2 , but direct communication with the suppliers gives us confidence that the lower quoted rates used in our cost estimates are realistic and do not infer inferior materials or strength which will reduce its performance during earthquake..



45 309128

(ii) Some of the values attributed to Bangladesh guidelines (presumably ECR

1997) in Figure 10-1 of the FS are apparently not for drinking water. These are DO

(6mg/L), COD (4mg/L), and TSS (10mg/L) although the latter is approximately

equivalent to the Bangla standard of 10 NTU. We agree with the FS assessment

that the raw water quality of the Meghna River as evidenced by the FS sampling

results is suitable for conventional treatment provided by a conventional WTP as

described variously so long as the intake and the WTP are competently designed,

constructed, and subsequently adequately operated and maintained. We further

believe that such a WTP, aided by pre-treatment at the intake, will produce high-

quality drinking water that will meet our recommended quality standards.

(iii) We have prepared a comparative set of guidelines from WHO, Europe,

Canada, as well as ECR 1997 and have proposed water quality standards for this

project and for general adoption by DWASA. One of the most important standards

we propose is turbidity as it is the only one that can be affected by process design

and plant operation. We recommend less than 0.5 NTU in at least 95% of the

measurements made, or at least 95% of the time each calendar month, and less than

1.0 NTU at any time. The comparison and recommended project standards are in

Appendix 7.

10.4 Data from Saidabad SWTP 119. Since there is unanimous agreement that the Sitalkhya River will not be the source of

raw water for Saidabad WTPs, we will not comment on the various quality parameters

presented.

10.5 Results from Department of Environment, Dhaka, August 1993 120. Results for 8 water quality parameters collected by DOE over a 3-year period are

presented in 4 graphs: (i) solids, (ii) alkalinity, (iii) DO and BOD, and (iv) conductivity.

Information about an eighth parameter, turbidity, was also provided.

(i) Solids. The graph presents total solid (TS), total dissolve solids (TDS), and

suspended solids (SS). TS peak four times over the 3-year period as does

TDS, in April-May, September-October, May-June, and April-May. At all

times, TS>TDS>SS. TS varies from 40mg/L to 225mg/L; TDS varies from 25

mg/L to 175mg/L; and SS varies from 10mg/L to 60mg/L. There is no

discussion. We conclude that the SS concentrations are consistent with the

rudimentary information about turbidity levels and that the TDS is, as

expected, reflected by the conductivity measurements.

(ii) Alkalinity. The graph provides no seasonal indicators although several lows

are around mid-year. Alkalinity varied from 20mg/L to 70mg/L with an

apparent upward trend. The FS provides no discussion. At the lower

concentrations, the treatment will require lime addition to raise the alkalinity

for better coagulation and it is noted that lime addition is contemplated.

(iii) DO and BOD. DO varied from 5.5mg/L to 9mg/L with no seasonal indicator

but an apparent slight downward trend. BOD varied from 1.0mg/L to 4.0mg/L



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with no clear seasonal indicator although a reoccurring relative low around

mid-year, a slight downward trend, and no clear correlation with DO.

(iv) Conductivity. Conductivity varied from 30µS/cm to 190 µS/cm with two

relative peaks occurring around May-June followed by relative lows around

July-August. There appears to be a slight upward trend. The discussion on

conductivity

(v) Turbidity. The FS notes that turbidity was measured; however, it was not

graphed. It notes that 15 of 21 samples were assumed to have values of

<25NTU, the lower detection level, and the other 6 samples were between 25

and 50NTU. We are concerned that the lack of precision was not discussed.

10.6 Water Quality Assessment

10.7 Conclusions 121. In summary, we agree with the FS conclusion that the Meghna River water quality

will respond well to conventional treatment. However, we also believe that the water quality

sampling program was inadequate and based on our recommendation, a water quality

sampling program recommended under the PPTA soon to be underway will provide more

useful and convincing information (Appendix 11 refers).

11. HYDROLOGICAL CONSIDERATIONS

11.1 Maximum and minimum flows

11.2 Meghna River

11.2.1 General description

11.2.2 Maximum and minimum flow in Meghna River

122. We agree with the FS assessment of minimum and maximum flows in the Meghna

and note that at future design flow of 2000MLD, the abstraction by the project is less

than 1% at the lowest predicted flow in the dry season. Consequently, there is no

concern over the availability of raw water for this project. We are, however, concerned

over the precise information on water levels (see Appendix 16).

11.2.3 Tidal Influence in Meghna River

123. We note in paragraph 114 that opinions are divided on the likelihood and magnitude

of tidal influence at Bisnondi and more importantly, saline intrusion. The additional sampling

program that we have recommended should, in addition to normal water quality parameters,

focus on the seasonal variations in water levels, tidal influence, salinity intrusion.

11.3 Sitalkhya River

11.3.1 General description

11.3.2 Maximum and minimum flow in Sitalkhya River



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11.3.3 Tidal influence in Sitalkhya River

Since the Sitalkhya River is obviously unsuitable as a raw water source for this project, a

discussion on what the FS presents in this regard would not be useful.

12. RIVER MORPHOLOGY

12.1 Introduction and methodology 124. We have stated our position on the morphology report in Appendix 8. We expect that

the expert review of the morphology report (Vol. 2 in the FS) will present a more convincing

case for the intake location as well as discussing intake design and river bank protection

upstream and downstream, a vital element that was not discussed in the FS.

12.2 Interpretation of water levels 125. This section in the FS prides the useful information that for the 1:50 year and 1:100

year floods, maximum water levels are predicted to be 7.75m and 8.2m respectively and for

the 1:50 year and 1:100 year droughts, minimum water levels are predicted to be 1.18m

and 1.07m respectively. The FS also notes that river levels vary about 4-5m in a year. The

FS also emphasizes that the data behind the analysis stem from a mathematical model

(Mike 11) which is only partly calibrated and that, therefore, the actual values may in reality

vary. This is only one of the uncertainties that led us to recommend further investigations of

the morphology and hydrology. Maximum and minimum expected water levels are very

important design factors, both, for the design of the intake structure and surrounding banks

and also, for the proper selection of pumps. The levels should be very carefully evaluated

and utilized with a judiciously applied factor of safety.

12.3 Sediment data 126. The FS provides no useful information in this paragraph. We have proposed water

quality monitoring to address this lack of essential design data and this was about to start in

June 2013.

12.4 Satellite images 127. The FS suggests that the river bank at the proposed intake location shifts by about

1m/yr based, inter alia, the review of 30 years of satellite imagery. We believe that 30 years

ago, the resolution of satellite imagery available to the general public was not nearly

accurate enough to detect 1m. Recognizing that the average rate cited is based on all of the

30 years, we are obliged to point out that different residents in the area who have lived there

for over 50 years have indicated on several occasions to several PPTA members that the

bank in the vicinity of the intake has shifted much more than 30m over the past 30 or 40

years. Without relying seriously on one account, we were told that the bank had shifted from

near the middle of the river, some 500m, in his 50 years of recollection. All this supports our

recommendation to review the intake location and the requirement for further study and

possibly a physical model study to indicate design considerations for the intake type and

structure and river bank protection.



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12.5 Cross section changes

12.6 Mathematical

12.7 Conclusion 128. This section in the FS does nothing to support a substantial position on

morphological changes and consequently, the intake location. It refers to one section 2.5km

upstream from the intake and inconclusive 1-D modeling results. Sections are available for

only a 3-year period and the FS quite rightly notes that three years is “quite short …for

assessing morphological changes. “

13. GEOTECHNICAL ASSESSMENT

13.1 Introduction

13.2 Geological/geotechnical profiles

13.3 Seismicity/liquefaction

13.4 Engineering aspects

13.4.1 Dewatering of trenches

13.4.2 Bearing capacity of piles

13.5 Liquefaction

129. The geotechnical assessment was well prepared and should form a very solid base

on which the design-build contractor can make more detailed soils investigations. In

particular, the report provides sound advice on (i) dewatering during construction of the

transmission lines across the flood plains between the Balu and Meghna rivers, (ii) river

crossing difficulties and indicative techniques, and (iii) the issue of liquefaction as a result of

earthquakes. The latter is of particular concern as it affects the selection of pipe material

and pipe laying methods. The design-build contractor is expected to present the detailed

analyses on which he will base his proposed pipe material and construction methods. It is

entirely possible that he will offer two kinds of material, one for areas with liquefaction

potential and one for areas without. The assessment reports will be reviewed during bid

document preparation to inform the specifications and will be provided to contractors to

assess location + extent of areas with greater liquefaction risk.

14. BASIC DESIGN

14.1 Introduction 130. This section summarizes the components of the recommended project with which we

agree. Alternatives noted may be proposed by design-build contractor, which will be

reviewed by DWASA’s consultants and be subject to DWASA’s approval and ADB’s non-

objection.

14.2 General description of system 131. We agree with the general description for A. Intake structure except (in order):



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(i) The intake structure and pump station shall be designed for the 100-year

flood and the most probable drought.

(ii) The option for pre-chlorination, to avoid organic growth in the transmission

mains (such as algae and mussels) is mentioned as included in the costs, but

not elaborated. We think this is an essential pre-treatment process, unless

the designer can prove from similar examples on this river that organic growth

is not a problem. We recommend the bidders be required to make detailed

proposals, which may include shock dosing of chlorine, rather than

continuous. The water quality monitoring we have proposed will provide only

limited data for bidders to assess this requirement and further investigation of

the extent of the problem will be required at detail design.

132. We agree with the general description for B. Pumping station except (in order):

(i) Raw water pumps for Saidabad 1 & 2 shall be designed for discharge into the

existing twin box culvert.

(ii) To cope with significant variation in suction conditions, the pumps shall be

equipped with variable speed motors (through variable frequency controls).

133. We agree with the general description for C. Transmission mains except (in order):

(i) Raw water pumps for Saidabad 1 & 2 shall be designed for discharge into the

existing twin box culvert instead of to the DND canal.

134. From Meghna to Sejan juice factory the system will consist of two 2200 mm pipes.

From Sejan juice factory the system will split with one 2200 mm pipes going north to

Gandharbpur and one 2200 mm pipes going to south to the existing twin box culvert instead

of to the DND canal. These pipes will supply the design capacity of water in Phase 1; i.e.,

525 MLD to Gandharbpur and 475 MLD for Saidabad 1 & 2.

135. We do not agree with the consideration for D. Optional Intake from Sitalkhya and

therefore, have not commented on the details in the FS.

136. We agree with the general description for Gandharbpur Water Treatment Plant

except (in order):

(i) The WTP shall be designed for manual operation with specific automatic

functions.

137. We agree with the general description for F. Treated Water Pumping Station except

(in order):

(i) The treated water pumping station shall be designed for delivering a

maximum flow of 500MLD and peak capacities and pressures as determined

by modeling of the Dhaka water distribution network.

(ii) The design-build contractor will be provided with the pipe sizes, capacities,

and pressures at the injection points into the Dhaka distribution system by

DWASA. IWM is currently carrying out a modeling study for DWASA to re-

define the 8 supply Sectors in the city and prioritize retirement of tubewells to



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identify the future surface water demand. This network modeling will provide

(by mid-2013) the required information. In our cost estimates we have

assumed an injection pressure of 3 bar.

138. We agree with the general description for G. Transmission system inside Dhaka.

14.3 Intake at Meghna River 139. While we agree with the conceptual design of the intake at Meghna River, the

design-build contractor will submit the detail design for approval by DWASA and non-

objection by ADB based on, inter alia,:

(i) the finally agreed design high and low water levels and

(ii) the outcome of the morphology review and further studies (if recommended).

14.3.1 Location and access

We agree with the general description of the location for, and access to, the intake. We

have proposed a permanent access road.

14.3.2 Maximum and minimum water levels

We agree with the minimum and maximum design water levels of 0m and 8.2m respectively,

pending the outcome of the morphological review and resulting further studies (if any) and

the outcome of further hydrological investigations, resulting in the determination of the 100-

year flood level and the minimum probable drought level.

140. The current review of the river morphology includes access to 30 years of satellite

imagery and the expertise to interpret the data. This will provide a more precise estimate of

where the high water mark should be considered.

14.3.3 Alternatives for intake

14.3.4 Intake channel Alternative 1

14.3.5 Intake with pipes in trench – Alternative 2

14.3.6 Intake with pier – Alternative 3

141. We agree with the FS recommendation to implement Alternative 1; however, based

on his own investigations, the design-build contractor will submit the detail design for

approval by DWASA and non-objection by ADB. The details noted in this section that

will be reviewed and possibly changed by the design-build contractor are (in order):

(i) The channel invert at -3.5m

(ii) The flood level at 8.0m

(iii) The dimensions of 32m x 7.5m x 15m

(iv) The height of the bottom weir, if any



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(v) The use of penstocks to control the flow of water (rather than to isolate each

channel)

(vi) The placement of various structures in the flood plain (Fig 14-4 refers)

(vii) A 5mm x 5mm fine screen instead of a mechanically operated fine screen

(viii) The design particle size of 200µ

(ix) The design velocity in the channel of 0.25m/s

(x) The size of each channel

(xi) The mode of sludge removal. We recommend that consideration be given to

include in the design a reservoir that would be filled during high water levels

and utilized to back-flush the channels during low water levels, utilizing the

difference in water levels as motive power. A preliminary estimate suggests a

reservoir about 150m x 150m, the fixed cost of which would have to be

compared to the NPV of a system involving pumping (and quite likely, double

pumping, of, say, 12m3/s for, say, 2 hours each channel each year (or more).

14.4 Intake pump station

14.4.1 General

142. We agree with the general description of the intake pump station except that the

design should include mechanically cleaned fine screens.

14.4.2 Pumps

14.4.2.1 Pumping philosophy 143. We agree with most of this section with the following recommendations (in order):

(i) The supply to Gandharbpur Phase 1 shall be 525MLD and the supply to

Saidabad 1 & 2 shall be 475MLD. For Phase 2, the plan is to double the

Phase 1 capacities such that the Phase 2 intake capacity shall be 2000MLD.

(ii) The duty and stand-by line-up will finally be determined by the design-build

contractor for approval by DWASA and non-objection by ADB.

(iii) The FS recommendations to reduce the number of duty pumps operating

based on the demand at the WTP and the requirement to maintain the design

minimum velocity in the pipelines cannot be implemented and some operating

regime compromise will have to be adopted.

(iv) We recommend against regulating the inflow at the WTP based on raw water

turbidity.

14.4.3 Design parameters



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144. The length of the raw water conveyance to Saidabad has increased by 4.2km as a

consequence of our recommendation not to discharge Meghna River water into the DND

canal but to continue to the existing twin box culvert.

145. We note that the minimum and maximum pump heads assumed (or calculated) in the

FS are 42m and 37m respectively for the Gandharbpur route and 31m and 30m respectively

for the Saidabad route. We believe that these numbers are basically incorrect as the total

head on the pumps will vary by the difference of the high and low water levels in the Meghna

River; i.e., 8.2m. As noted, the duty and stand-by line-up will finally be determined by the

design-build contractor for approval by DWASA and non-objection by ADB as will the

calculation for the total pump heads. The comment about maintaining minimum velocity at

all times, even if the flow is at 66% of full capacity should be disregarded.

14.4.4 Monitoring and pump controls

146. We agree with the basic concept of pump control; however, the detail design for

approval by DWASA and non-objection by ADB should include a ladder diagram detailing

each input and output of the intake pump station PLC(s)

14.4.5 Power installations at Meghna

14.4.6 Design parameters for pump transformers at Meghna

14.4.7 Power distribution system for pumps

14.4.8 Power distribution system for building and control system

14.4.9 Emergency generator operation

We note that the TOR for the PPTA does not include the requirement for electrical expertise.

Notwithstanding that caveat, we make the following comments.

147. We are in general agreement with the discussion on main and stand-by power

supply; high, medium, and low voltage selection; duplicate power distribution (main and

stand-by); redundant transformers; reduced-Voltage motor starters, and UPS-backed control

voltage; except, perhaps, the control and signal voltage (24V DC).

(i) The FS does not recommend the type of stand-by generator, diesel or natural

gas. Since natural gas is less expensive than diesel, and does not require potentially

troublesome storage, natural gas is the preferred fuel and we recommend its

application. Since potentially a large flow-rate is required, inter-ministerial agreement

must be obtained to guarantee the supply (paragraph 94 refers).

14.5 Transmission mains

14.5.1 Introduction

148. We agree with the FS assessment that the construction of transmission main will

pose large challenges, the largest of which will be the ground conditions in the intake –

Sejan juice factory route and the various river crossings. Constructing pipelines along

narrow, crowded roads will present special challenges of traffic control, implementation of



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environmental safeguards, and social safeguards by way of many individual compensation

scenarios. As noted, we agree with the recommended “pipe in trench” option.

14.5.2 Pipe material

149. We note that the FS has not considered steel or PCCP as potential pipeline materials

even though for the size required, steel has been popular for a century and PCCP for some

30 years. Discussions with the DMC suggest that soil conditions were considered too

aggressive to include steel as a pipe material option, although there is no reference to that in

the FS. Procedures to mitigate corrosion, such as impressed current or sacrificial anode

cathodic protection, have been used for many years and therefore, steel should at least be

considered as a pipeline material. The characteristics that should define large diameter

water pipes, apart from the manufacturing techniques and laying criteria and methods, are:

• Mechanical resistance to internal and external loads

• Resistance of physical, biological, and chemical nature related to the quality

of the conveyed water and to the soil

• Flow resistance (smoothness) that must be the lowest possible

• Ease and safety of installation

• Comprehensive optimal cost, considering not only materials and installation

but also Maintenance and duration

150. There are four bona fide pipe materials that can be considered for our application:

• PCCP

• DI

• GRP / FRP

• Steel

• HDPE (not really bona fide but is listed as it was mentioned in the FS)

(i) PCCP. Prestressed Concrete Cylinder Pipe is reportedly used in China and

elsewhere at these pressures and sizes. It has often been used at bigger

sizes and higher pressures, but it is much less commonly used than Steel, DI

or GRP for reasons that are valid on this project. It is a complex, composite

pipe fabricated to special order, in specialist factories. It employs thin sheet

steel, reinforced by high tensile, prestressed wire windings, protected by extra

dense, high specification concrete. First class quality control in fabrication

and care in transport, handling and installation is critical to its longevity. The

fabrication process is arguably more complex than GRP and the potential for

error much greater. Due to its weight and general brittleness, it may be

impractical to import. The pipe could in theory be manufactured in

Bangladesh, if the manufacturers decided to import and set up a factory here.

We believe there is no facility yet capable of producing this product to

appropriate specifications. Although a Chinese manufacturer promised to

send quotes, they did not and we believe the price could not compete with

other materials. However, contractors are better able to source and negotiate

competitive deals for pipe supply and shipping, and assess the laying costs

and problems, therefore, we do not discount it as an optional pipe material.

PCCP. can be included in bid documents as an option, with tight



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specifications on production control, quality testing and factory acceptance

tests (witnessed).

(ii) DI. Ductile iron pipe is a proven material for water pipe since the mid-1950s,

when it essentially replaced cast iron due to its superior mechanical

properties. Whereas DI is manufactured in the project diameter of 2200mm,

few installations of that size or larger exist because it is rarely economic for

general use at this size, when competing with GRP, steel or PCCP.

Nevertheless, it is a recommended pipe material on this project where the

situation requires a robust pipe and where laying conditions are less than

ideal.

(iii) GRP /FRP. We agree that glass-fiber reinforced plastic pipe is an excellent

material as it is light (ease of handling) and almost unaffected by the

elements. It is more rigid than steel, but it must be laid much more carefully

than DI, or it can be easily damaged and fail. For underground use, it requires

better engineered backfill than DI, hence vigilant construction supervision. For

above ground applications, it needs more frequent supports than would be

required for steel pipe. Therefore it is better to use steel for the pipe bridges.

One factor that mitigates against its use is the little available practical

evidence of longevity, because this type of pipe only came into common use

in the last 30 years. Even so, there is little evidence that manufacturers’

claims of a 50-year life or more, are in any way unfounded which has led to

FRP /GRP replacing steel as the ‘material of choice’ for pumping mains of

this size, anywhere that the pipes are protected against impact and /or in

corrosive conditions with aggressive soils or seawater.

GRP pipes must be handled more carefully than steel or DI during loading,

shipping, ground transport, unloading, and installation, to prevent cracking

which can allow water to reduce adhesion between the fibers and the resin

and cause the pipe to loose strength. The manufacturers provide a resin “gel”

coat both internally and externally to provide a barrier to protect the fibers

from the ingress of water. However if this “gel” coat is damaged during

installation water can be absorbed and cause leakage. GRP has an

advantage over other pipes that it can be ‘nested’ during shipping. (Thus

pipes of 2m dia can be stacked inside pipes of 2.2m dia nearly halving the

shipping cost).

Manufactures of other pipe materials tend to exaggerate historic reports of

GRP pipe failures. These have occurred, but are invariably related to failure

of isolated fittings, which have been underdesigned, or individual pipes that

have been physically damaged, usually during installation, but they do not

question the integrity of whole pipelines, which would be the case with a

corroding steel pipeline, for example. GRP is not used in UK for treated

water because it does not yet meet the stringent Directorate of Water

Inspectorate (DWI) Regulation 31 which ensures the material (coatings)

cannot dissolve in water. We are not aware of any other country which



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legislates against GRP for drinking water pipes and elsewhere in the world

they are used for this purpose. Sophisticated software is nowadays used to

design every GRP pipe component to meet the particular duty of its location

in the pipeline (e.g. surge and working pressures and ground conditions vary

along the route) which now address the cause of failures in the past. The

remaining concerns for GRP are that it is well designed with sufficient data on

pressures and soil conditions (there are design procedures specifically for

earthquake loads and soils prone to liquefaction), supplied from a reputable

manufacturer, and is installed with reasonable care to avoid physical damage.

(iv) Steel. Steel pipe is traditionally the material of choice in large diameter

pressure water mains (over about 1.5m dia). Nevertheless, steel usually

outperforms all other materials in large diameter pressure pipe (high hoop

strength with thin walls allows minimum material, low weight). The main draw-

backs, are its susceptibility to corrosion and its flexibility. Flexing in transit

tends to crack the normal cement mortar lining, but epoxy lining could be

used at little extra cost. Its resistance to damage from external loads e.g.

vehicles, depends on particularly good soil surround and backfilling, which is

difficult to guarantee on this project due to the poor native soils and shortage

of good granular fill material. Corrosion protection systems are quite

expensive both to install and maintain. They need substantial and costly long

term maintenance, which is often ignored with serious consequences –

usually a much shorter pipe life than expected – commonly as little as 20-30

years

(v) HDPE. High density polyethylene is a robust pipeline material with the best

hydraulic characteristic; i.e., it exhibits the lowest loss of head due to friction,

which is a significant factor in the power required to pump the water. Pipe

lengths are usually fusion welded and a well-made fusion joint is stronger

than the pipe itself. The ability of PE systems to withstand end loads and

ground movement has been demonstrated dramatically in the Kobe

earthquake in Japan in1995 where Osaka Gas found a high level of failure in

their iron and steel systems but none in the PE part of their network. This

would be a great benefit for this project as the area is in a seismic zone and

parts of the soils that will be encountered are prone to liquefaction.

Unfortunately, HDPE pipe is not economical for pressure pipe at this large

diameter where the poor tensile strength of the material makes the required

wall thickness uneconomic. Furthermore, it is a more flexible pipe than steel

and relies upon good compacted bedding and surround material for its in-situ

strength, even more than steel, to prevent ovalisation in service and

subsequent failure during negative pressure surge. For these reasons, HDPE

will not be considered for use in this project.

151. Relatively thin-wall pipes of steel and GRP (and HDPE because it is so flexible) are

affected by pressure surges that can cause vacuum in the pipeline if it is not protected. For

that reason, surge protection facilities will be installed at the intake and the high-lift pump

station at the WTP.



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152. Hydraulic characteristics. Ductile iron pipes and the steel pipes with cement

mortar lining have an absolute roughness greater than the fiberglass pipes and this is

important in as much as higher head losses in pumped pipelines. GRP pipe has a polished

internal surface and therefore a very low absolute roughness with benefits deriving from

better flow and lower sedimentation and incrustation on the internal surface. Steel pipes are

normally lined with centrifugally applied cement mortar; however, when large diameter steel

pipes are so lined, the flexing during transport or installation can spall the mortar lining. The

alternative coating is epoxy resin, which is not only crack-resistant and much more

effectively repaired but also provides an internal smoothness similar to that of fiberglass and

other plastic material.

153. Installation

(i) DI pipe installation is simpler as jointing is usually by push-on bell and spigot,

but is also expensive due to its weight. As in the above cases heavy equipment is

required and progress can reach 50m/day.

(ii) GRP pipes are lighter to install, do not require any corrosion protection,

fittings are prefabricated and installed without slowing down the installation, heavy

equipment and service roads are not required and with light equipment progress can

be in the order of 100m/day, assuming engineered backfilling can keep pace.

(iii) Steel pipes are supplied in random lengths of around 10m, which determines

the weight and therefore the weight limit of the site machinery. Progress is slowed by

the joint welding process and therefore also the continuity of the internal and external

protection that must be restored. Progress is reportedly about 40m/day. In order to

benefit financially from the use of thin wall pipe with low rigidity, all resistance to

vertical loading in operation must be provided by engineered bedding and backfill,

adding to the cost..

154. Corrosion resistance

(i) Metallic pipes are subject to corrosion both chemical in the ground and from

the transported fluid and also due to galvanic corrosion as opposed to GRP that is

impervious to corrosion. Corrosion control in steel pipes is made possible with

internal and external coatings of the pipes in the factory and during installation and

during the life of the pipeline with cathodic protection on the external surface.

Cathodic protection requires continuous monitoring and in certain areas is even

subject to theft.

(ii) Ductile iron pipes in general are adequately protected from the cement mortar

internal coating and from various external coatings related to the soil corrosiveness.

In very aggressive environments DI pipes can be protected with insulating coatings

and cathodic protection.

155. Resistance to Ageing

(i) Ductile iron, a development of cast iron, and steel pipes have had a history of

over 100 years to establish a good record of resistance to ageing.



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(ii) Neither HDPE nor GRP have been installed long enough, and studied, to

make a definitive statement about their resistance to ageing. If PVC is any

indication, HDPE should have good resistance to ageing – many of the first PVC

pipes installed in Germany since 1936 are still in use.

(iii) GRP is designed with high safety factors to account for ageing. There are no

data to support the longevity of large diameter GRP pressure pipelines; however,

data extrapolation to 50 years of a study of the long-term failure of GRP pipes under

the influence of moisture absorption predicts a reduction of strength of about 60%39

156. Cost Comparison. We have reviewed the various assumptions in the FS and have

made our own estimation based on quotations obtained previously by Mott MacDonald, in

the course of this PPTA, and experience gained within Mott MacDonald and the PPTA team.

Table 12: 2200 Ø Pipe Cost Comparison

Table 13: 2200 Ø Pipe Cost Comparison Summary

39

POLYM. COMPOS., 2010. © 2009 Society of Plastics Engineers

Install Test Total

Class $/m $/m $/m $/m

Ductile Iron CIF Chittagong

FS 2,352 1,129 80 3,560

BX Steel (PRC) K9 1,831 80 1,911

Isaeeme Group (PRC) K10 2,295 80 2,375

Average 2,159 1038 80 3,277

PPTA (avg (sum - hi - lo)) 2,295 1038 80 3,413

GRP (all quotes for PN 16 although PN 6 is sufficient) -

FS 1,297 622 80 1,999

Rukun (Indonesia) 16 4,559 80 4,639

Graha (Indonesia) 16 3,861 80 3,941

Amianti (S Arabia) 16 8,026 80 8,106

Future Pipe (Abu Dhabi) 16 1,179 80 1,259

Universal Polymers (India) 16 1,748 80 1,828

Average 3,445 963 80 4,488

PPTA (avg (sum - hi - lo)) 2,866 2,866 963 80 3,909

Steel mm -

FS na na na

Tyco (Australia) 16 3,225 6 3,231

Emek (Turkey) 16 1,440 6 1,446

Indahl (Indonesia) 18 2,655 6 2,661

KHI 15 3,236 6 3,242

Average 2,639 964 6 3,609

PPTA (avg (sum - hi - lo)) 2,940 2,940 964 6 3,910

Material Length

(km) FS PPTA FS PPTA

GRP 27.36 2179 3,909 60 107

DI 37.80 3951 3,413 149 129

209 236

Steel 65.16 3,910 255

Unit cost ($/m) Total cost ($ million)



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157. Comparing the raw water pipeline costs in the FS with the PPTA estimated costs, as

summarized in Table 13, three facts emerge:

(i) The PPTA estimate for GRP/DI pipes is $27 million higher than the FS

estimate; i.e., 13%.

(ii) Our estimate for GRP/DI pipes is 19 million lower than our estimate for steel

pipes; i.e., 7.5%.

(iii) We have adjusted the pipeline costs in the FS estimate in line with new rates

we have obtained from two reputable suppliers. We have also revised some

other FS costs where the impact is significant and we have more reliable

rates. We have sized and costed some components for Phase 2; e.g., river

crossings, where we believe it would be cost effective to construct Phase 2

elements at once.

158. Recommendation. All three alternatives can guarantee a long service life, Steel,

GRP, and even ductile iron can be a cost-effective solution, depending on the specific site

and service conditions. Although steel is usually the least expensive overall at this size and

pressure, we are concerned that poor ground conditions and high water table risk its

premature failure from corrosion or external vertical loading, DI is the most reliable in such

conditions.. All things considered, GRP is likely to be the best choice for most of the route,

being technically adequate, cheaper than DI, better suited to the ground conditions than

steel and probably longer life.

159. From the required investment point of view, pipe prices have proven so variable that

it is not possible to make an estimate lasting over long periods and also the location not only

of the project but also of the manufacturing plants (they may be thousands of miles apart)

can alter any economic evaluation. The very large range of pipe supply rates obtained, even

within one material type, reflect a general problem with cost estimates based on quotations

like these. Suppliers know when quotes are “for real” or just for comparative purposes like

this. They know when projects are only at feasibility study stage and tend to under-quote to

consultants to ensure future interest in their product, knowing the quotes will expire long

before an order will be placed. For example, the quotations we received from Futurepipe of

UAE for GRP pipe were very competitive compared to similar quotes received recently from

the same company for another SE Asian country, because they see this as a market

opening opportunity. Sometimes decisions on pipe materials are taken too long before the

job is tendered resulting in a satisfactory and cheaper pipe material being excluded without

good reason. The final material choice should be taken case by case in a defined market

situation just before the pipe is needed. Flexibility in pipe material selection can be controlled

to DWASA’s advantage with tight tender specifications to prevent contractors winning the

contract with low cost, low quality pipe. A carefully written tender specification for the D&B

contract can list the allowed pipe materials, the minimum technical specifications and define

the variables for economic evaluation so that tender evaluation is straight forward.

Our approach for project cost estimating is to take an average of the lower pipe supply rates

from quotations / sources we can trust. The aim is to base the cost estimate on the lowest

rates we feel confident that bidders in competition will be able to meet or improve upon.



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160. Since the actual installed unit price of a pipe cannot be accurately determined, in

advance, and this is the key variable needed for optimal sizing, we recommend to allow the

design-build contractors to propose the preferred and alternative pipeline materials over a

small range of diameters so that economic optimization during evaluation can guarantee the

optimal pipe material and diameter for DWASA..

14.5.3 Hydraulic calculations

161. The FS notes here that hydraulic calculations have been carried out based on the

Hazen-Williams formula. That formula was derived based on empirical data for a limited set

of conditions. Pertinent to this project, one of the conditions is water temperature at 60oF

(15.6oC). Since Meghna River water routinely exceeds 30oC, a substantial error would be

introduced due to the decrease in viscosity. Fortunately, the actual hydraulic calculations in

Appendix 2 to the FS were based on the rational Darcy-Weissbach equation, with which we

agree.

162. Roughness. The discussion on pipe roughness, one of the critical factors in

determining headloss and with it, the cost to pump the water, is inadequate. We expect that

when the design-build contractor submits his design calculations that will determine the size

and type of pipe, they will include a comprehensive analysis of the appropriate roughness

factor.

163. Minor losses. We agree in principle with the discussion on minor losses (losses

induced by fittings along the pipeline). We do not, however, agree with the casual

assessment of 1m/km for minor losses, which would add about 20m to the intake-

Gandharbpur headloss. We believe this may be a mistake in the units as an averaged

coefficient of 1.0/km (not 1m/km) would be appropriate. . A review of the assumed fittings

indicates that both lists are short two tees (assumed to be required in the two blow-off/clean-

out chambers in each route) and one 90o elbow. Based on a velocity of 1.6m/s, the minor

losses40 for the intake- Gandharbpur and intake-Saidabad (including the additional 4.2km)

pipelines are 2.6m and 1.7m respectively; i.e., 0.8m and 1.7m respectively less than

assumed41. Again, we expect that when the design-build contractor submits his design

calculations that will determine the pump selection based on, inter alia, size and type of pipe

and an accurate count of fittings along each route, they will include a comprehensive

analysis of the appropriate k-factors for those fittings.

164. Minimum velocity. We agree that the determination of the raw water pipe diameter

must take into account a minimum “self-cleaning” flow velocity to guard against solids

deposition.

165. We note that this section in the FS includes a discussion on the operation during

Phase 2 (four available pipelines), which does not apply here.

166. Economical diameter. We agree with the preliminary determination of the

economical diameter of 2200mm. The FS analysis is based on sound principles, calculating

the capital cost + discounted operating cost over long term operation for a range of pipe

diameters and comparing these to establish life time least cost. The assumptions are sound

and within the accuracy suited to a FS. Greater accuracy will be possible only when pipe

40

The minor losses are calculated based on Σkv2/2g, where k=loss coefficient for a fitting, v=velocity, and

g=gravitational constant 9.81m/s2

41We calculate that to pump 500MLD against 1m head would cost USD 62,000/year based on a pump efficiency of 75% and the cost of electricity of BDT 7.1 /kWh.



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costs are better known as they have by far the biggest impact on pipe size optimization. It is

important to understand that the choice between a 2000 or 2200 dia pipe will have a very

small impact on project life cost. Over such a range of sizes, the extra capital cost of the

larger pipe closely matches the reduced lifetime cost of pumping, and vice versa, so concern

over an exact ‘optimum diameter’ is often exaggerated. See Appendix 23 – “Notes on Pipe

Size Optimisation”. We have based our O&M calculations and corridor sizing on the FS

recommendation. We also agree with the FS recommendation that the design-build

contractor performs a final calculation as part of his detailed design in order to achieve the

final economical diameter.

167. Final choice of pipe diameter. We agree with the FS preliminary conclusion of

pipelines with the same diameter but consequently, different head conditions requiring

different pump sets. We also agree that another option would be to equalize the two

headloss conditions by selecting different pipe sizes, which would have the benefit of using

the same, and possibly fewer, pump sets for both applications. Again, we recommend, as

does the FS, that the design-build contractor analyze the options during detail design.

168. Design parameters for pumps. We note several inconsistencies in this section;

i.e.,

(i) Maximum water level at intake. The assumed 8m42 is probably close to the

100-year flood level; however, further study of the hydrology and morphology

will determine this factor more accurately.

(ii) Minimum water level at intake. This level should reflect the 100-year

drought level of near 0m, which, again, based on further study of the

hydrology and morphology, will be determined more accurately.

(iii) Head losses. Given that the river level variation is about 8m, it is difficult to

reconcile differences in pump heads in Figure 14-13 of the FS of only 1m and

5m respectively for Saidabad and Gandharbpur for new pipes and 3m and

5m respectively for Saidabad and Gandharbpur for 10-year old pipes. There

are other anomalies; however, these are all expected to be resolved when the

design-build contractor presents his detail design for DWASA approval and

ADB non-objection. For our O&M calculations, we have assumed total

discharge heads of 30m for Saidabad and 40m for Gandharbpur.

14.5.4 Design of transmission lines

169. As noted, we agree with the construction of Phase 1 pipelines; i.e., one to

Gandharbpur WTP and one to Saidabad box culvert.

14.5.5 Pipe corridor and pipe route

170. As noted and illustrated in Figure 7, we disagree with the width required to construct

a permanent service road and ultimately, four 2200mm diameter pipelines in a 24m corridor.

171. RHD and RAJUK have advised the PPTA team that (i) the roads to Kanchan Bridge

and Tarabo/Demra Bridge are planned to be widened from 2 lanes to 4 within the existing

42

This and other references to elevations are based on Bangladesh National bench mark elevations that are related to mean sea level.



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RoW and (ii) that the road from Kanchan Bridge to the Khilkhet WTP site is a “300 foot”43

road that should be able to accommodate two 2200mm pipelines. It will require further

discussions between DWASA and RHD and RAJUK to establish (i) each agency’s

agreement to construct the project pipelines within their RoWs and (ii) where exactly the

pipelines can be constructed within those RoWs. It may be that 14m is sufficient to

construct the two pipelines, one at a time. It should be noted that an excavation to house

both would be at least 13m wide, unless costly sheet piling or trench boxes were used.

14.5.6 Installations on transmission line

172. We agree with the FS considerations regarding water hammer. Soft pump starts

against closed valves that open slowly and slow valve closures against pump shut-off heads

are standard procedures to avoid water hammer. What additional measures should be

taken to reduce water hammer as a result of power failures are expected to be identified by

the design-build contractor when he presents his detail design for DWASA approval and

ADB non-objection.

173. Air valves. Installing air release and relief valves is standard procedure and both

the FS and our cost estimates include an estimated number.

Installing access chambers every km is suggested in the FS. This may seem too frequent,

but the distance is determined by safety requirements for workers in the pipeline involved in

inspection and cleaning operations. These should be designed as wash-outs to facilitate the

removal of silt deposits both manually and hydraulically. We have also included in our

capital cost estimate, as has that in the FS, two chambers in each pipeline that would allow

flushing each pipeline. We have also included periodic flushing, with the attendant loss of

revenue water, in our O&M cost estimate.

The FS does not address security of supply for pipe burst / maintenance downtime. We

recommend adding cross connections between the 2 parallel raw water pipes at both ends,

so that in emergency and during maintenance shutdown of one pipeline, a partial supply can

be provided by the other. Tee connections with blank flanges should also be added to all the

single pipelines - Juice Factory to Saidabad and WTP to Dhaka, (and Intake to WTP, if

Saidabad pipe is dropped from the project) to allow cross connections to be added when the

parallel reinforcing pipes are installed in future.

174. Thrust blocks. Thrust blocks are required on all pipelines that utilize friction-type

jointing and fittings. The only pipeline design that does not require thrust blocks is fully

welded joints, which are only available for steel and HDPE pipe.

14.5.7 Transmission main alternative-pipe on surface

175. We agree with the FS assessment, based on expert opinion, that a tunnel solution

would not be economically feasible; i.e., it would cost too much.

14.5.8 Culvert alternative

176. We do not agree with this alternative as it requires double pumping, never an

economical idea, and its only plus is that the cost would probably be less than the pipeline

option. We note that the calculated slope of the energy grade line s=0.00001 seems to be in

error. Using the given dimensions and the FA assumed roughness factor n=0.013 for the 43

The RoW from Kanchan Bridge to the WTP and further, to Dhaka, actually varies from 300 to 200 ft.; however, the lesser width can still accommodate the pipelines.



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Manning’s equation44, the corresponding flow rate is 3.72 m3/s, not the required 500MLD, or

11.6 m3/s. For n=0.013 and Q=11.6 m3/s, s=0.000113. The difference over 15km amounts

to a significant 1.3 m. We note that the FS recommends this alternative (FS Figure 14-1

refers) but also rejects it variously. We note that this alternative is not part of the

recommended Option 1A with which we agree.

14.5.9 Tunnel solution

177. We agree with the FS analysis on alternative conveyances and endorse the

recommendation to utilize only the pipe-in-trench method.

14.5.10 River crossings

178. We appreciate the details presented under this section but suggest that ultimately,

the choice of how to cross the various rivers should rest with the proposal by the design-

build contractor, subject to any limitations imposed by the bid documents, such as

disallowing bridges, IF this is what DWASA decide (see Table 1). The idea to try to

persuade RHD to incorporate the Sitalkhya River pipe crossings into their design of a new

bridge has been dropped. We have had these issues before and know road authorities to be

very reluctant to commit themselves to the liability and inconvenience having huge

infrastructure obstructing access to their structures..

179. We have revised the FS cost estimate for pipe bridges based on our own

calculations for steel truss bridges with steel pipes..

14.6 Comparison of river crossing methods 180. We agree with the FS advice that utilizing bridge crossings would incur significant

pumping costs. We therefore fully expect that the proposal for river crossings from the

design-build contractor includes a detailed cost-benefit analysis. Extrapolating the previous

calculated cost in footnote 41 for pumping 1m head, the yearly cost to pump across bridges

per pipeline would be BDT42 million plus the differential cost of larger pumps and

switchgear.

14.7 Optional Intake and pumping station at Kanchan bridge 181. We agree with the FS conclusion that an intermediate pumping station at Kanchan

Bridge is not feasible.

14.8 Gandharbpur water treatment plant

14.8.1 Design parameters and reference design criteria. Raw water quality

182. We agree that turbidity is one of the important factors for the selection of the unit

operations of the water treatment plant. We are, however, unclear as to the utility of normal,

average, and maximum turbidity except perhaps to determine the amount of chemicals

required to remove the solids. We do not agree in this context that treated water quality shall

fulfill WHO and Bangladesh standards; instead, we have recommended a much more

stringent standard for treated water turbidity.

44

V=nR2/3

s1/2

, where v=velocity in m/s, R=hydraulic radius A/P, A=wetted area in m2, P=wetted perimeter in m,

and s=slope of the energy grade line in m/m



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183. Type of community. We agree that the type of treatment should include rapid sand

filtration but not because of the community this WTP will serve but because of the barriers to

bacteriological contamination of the treated water it provides.

184. Capacity for operation and maintenance. We agree that DWASA has experience

successfully operating a conventional WTP gained at Saidabad 1. Whether that success will

continue at Saidabad 2 with its highly unconventional unit process to reduce ammonia is not

been demonstrated. Regarding maintenance, what can be said is that DWASA has

experience at routine plant maintenance but sub-contracts all major maintenance and

repairs to off-site firms.

185. Industrial development. We are unclear as to the purpose of this discussion. We

recommend to adopt tried and true design criteria and would relax on that recommendation

only in case the WTP is part of a long-term BOT PPP. An example is the use of plate or

tube settlers in the clarification process. We would recommend not to use such settling aids

but instead, enlarge well designed conventional basins with the view to retrofit them at a

later stage if a relatively small increase in demand warrants it.

186. Limitations of the proposed design. We fully agree with the correlation between

turbidity and bacteriology of the raw water to be treated. We are therefore surprised that the

FS recommends only the WHO and Bangladesh standard for treated water turbidity of 5

to10 NTU, which is at least an order of magnitude greater than has been accepted in the

industry for several decades.

187. We have assumed that the output of the WTP will be 500MLD based on a raw water

flow of 525MLD; i.e., a 95% efficiency that can be obtained with well-designed and operated

supernatant returns of settled water sludge and backwash water from dewatering plant.

188. The plant configuration will be decided based on alternatives proposed by the

design-build contractor. It may well coincide with the FS configuration of 3 lines treating

about 2m3/s each.

189. Main sections of the plant. We agree with most of the description, except (in

order):

(i) We do not agree with two rapid mix chambers in series as that defeats the

purpose of near instantaneous mixing.

(ii) We do not understand the theory behind 3 lines of 2x2 floc chambers in

series; instead, we recommend 3 lines of 3 chambers in series to allow for

tapered flocculation based on operational data.

(iii) We recommend to use a more conservative design based on no tube or plate

settlers (paragraph 204 refers).

(iv) We agree in principle; however, we would encourage DWASA and the

design-build contractor to consider declining rate filtration and/or inter-filter

backwash. We endorse the recommendation for deep filter beds as it affords

the opportunity later on to install Granular Activated Carbon (GAC) if the raw

water quality demands it.



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(v) We are unclear to what configuration “common treated water pumping

station”. If that is a suggestion to locate the PS so it can serve Phase 2, we

agree and note that our cost estimate includes only for Phase 1 pump sets

but also piping, valving, and structural considerations (at some additional

cost) for convenient expansion.

(vi) Other facilities

(a) If inter-filter backwashing is included in the WTP design, elaborate

backwash water tanks and pumps will not be required.

(b) We are unclear to what by-products from water treatment refers and

can only endorse the recycle of backwash water and supernatant from

sedimentation tank sludge dewatering plant.

(c) We assume that the FS recommends to recycle water through the

distribution chamber and endorse that recommendation.

(d) We recommend to include in the design sludge dewatering tanks to

reduce the volume of sludge directed to sludge drying beds.

(e) We are not prepared to endorse the proposal to pump sludge to a

sewer.

(f) We are not convinced that recycling sludge to enhance

coagulation/flocculation would be beneficial but would endorse a side-

stream pilot project to verify the utility of the proposal.

14.9 Detailed description of the plant

14.9.1 Inline water monitoring

190. We agree with the generality of the inline water monitoring recommendations.

191. We do not, however, agree with the recommendation to regulate plant inflow based

on turbidity. Instead, we strongly recommend to include sufficient flexibility in the unit

process that would be able to cope with turbidities in excess of “threshold”, which we

interpret as 50 NTU (maximum per FS Figure 14-17).

192. We would endorse the added complexity of plant design to allow direct filtration only

based on a pilot study since the average turbidity cited in Figure 14-17 of 20NTU that

exceeds the US EPA guideline of 2NTU for application of direct filtration by an order of

magnitude.

193. We recommend to add in-line monitoring of residual chlorine at various points in the

plant, including: (i) upstream of post-chlorine addition, (ii) outlet of the chlorine contact

chambers, (iii) outlet of the storage reservoirs, and (iv) in the discharge piping where it

leaves the WTP site.

14.9.2 Raw water metering and flow regulation

194. We agree in general with the raw water metering and flow regulation provisions,

except (in order):

(i) We do not think regulating inflow with the 3 inlet valves is necessary. We

recommend only open /shut, not modulating.



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(ii) We do not understand the purpose of the valve on the inlet pipe; if it is to

regulate flow into the WTP, we recommend as above.

(iii) The level of detail devoted to raw water sampling is superfluous, as that is

one of many routine sampling points in a conventional WTP.

(iv) Automation of the inlet regulating valve according to flow setting is

unnecessary, We recommend non-automated open /shut.

(v) Linking the start of all WTP equipment with the opening of the inlet valve

implies a level of automation which we think inappropriate. Instead, we

should ensure that the operations manual provided by the design-build

contractor as a condition of his contract will detail the sequence of unit

operations and their inter-relationship, whether it be manual or automatic.

14.9.3 Distribution chamber

195. We agree with the various details for the distribution chamber except, as variously

noted, that we disagree with the regulation of the inlet valve by any means.

14.9.4 Rapid mixing chambers

196. We agree with the various details for the distribution chamber except we recommend

to limit each line to one chamber. We do not agree to link the start of the rapid mixers with

the opening of the inlet valve.

14.9.5 Flocculators

197. We agree with the various details for the flocculators and tankage except we

recommend to consider providing tapered flocculation through 3 tanks in series, each

equipped with variable speed flocculators. We do not agree to link the start of the

flocculators with the opening of the inlet valve.

198. We do not understand the purpose of “by-pass facilities including 2 actuated valves

between the flocculators and the filters – 2 lines to the filters”. If this arrangement is to

facilitate direct filtration, we disagree with it.45

14.9.6 Clarifiers

199. We agree with the various details for the clarifiers except, although not included in

the description, the use of tube or plate settlers. We also do not agree to link the start of the

clarifier mechanism with the opening of the inlet valve.

200. We question the operational utility of automating the speed of the scrapers and the

timing of the sludge blow-down valves with inlet turbidity; however, since this provision is not

costly and can be over-ridden by the operator, we have no objection. Perhaps a research

project into the utility of this recommendation would benefit further WTP designs.

45

We note that the last FS recommendation under “Flocculators” appears to indicate a lack of understanding of the fundamentals of water treatment: it implies that direct filtration should occur without flocculation. In view of another unacceptable recommendation; i.e., to achieve treated water quality of only 5 or 10NTU, it is conceivable that an otherwise well designed plant could achieve 5 or 10 NTU based on 15 NTU raw water quality utilizing the connecting piping to induce some sort of floc formation. It is highly unlikely that the design-build contractor will offer this as a viable option.



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14.9.7 Sludge pumping facilities

201. We agree with the various details for the sludge pumping facilities

14.9.8 Drying beds

202. In view of the fact that Saidabad 1 includes only two drying beds, we wonder why the

FS recommends 20. The designer should review the need for so many drying beds (and

associated piping and valves).

The FS is silent on modality and facilities for sludge handling. This must be addressed by

the designers.

14.9.9 Rapid sand filters

203. We agree in general with the details proposed for the rapid sand filters and in

particular with the provision of filtering to drain, except (in order):

(i) We recommend to consider declining rate filtration because of its simplicity of

control.

(ii) We do not understand the relevance of All filter valves to be replaced

including compressed air actuators – pipes and accessories. We assume it is

a typographical error and will ignore it.

(iii) We specifically do not agree to regulate filters linked with the opening of the

inlet valve.

(iv) We recommend to consider the addition of a surface wash system.

(v) We note that automation of the backwash cycle is advocated, including the

start of the backwash. We further note that the end of the backwash is not

defined explicitly. It is usual to define the backwash cycles in terms of time,

with the last cycle controlled by an experienced operator who stops the

backwash before the water is clear.

14.9.10 Water metering at the outlet of the filters

204. This appears to be a gratuitous section as it provides information on components

different from the title. We do not agree with chlorine dosage to the contact chambers

controlled by inlet flow alone; rather, we prefer that the dosage is set through feed-back loop

control based on chlorine residual.

14.9.11 Air scour blowers

205. We agree in general with the details proposed for the air scour blowers.

14.9.12 Backwash water pumps

206. We agree in general with the details proposed for the backwash water pumps except

that we recommend only 3 units (2 duty+1 stand-by), which is sufficient to produce high and

low backwash rates.

14.9.13 Back-wash recycling facilities



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207. We agree in general with the details proposed for the backwash recycling facilities

except that we recommend only 2 recycling pumps (1 duty+1 stand-by).

14.9.14 Contact and storage tank

208. We agree in general with the details proposed for the chlorine contact chambers and

treated water reservoirs. We note that the last recommendation - to provide alarm before

overflow and automatically stop back-wash process first, and after timer the entire WTP

process – appears out of place.

14.9.15 Alum storage and dosing

209. We agree with the various details for the alum storage and dosing facilities except (in

order):

(i) Since we have recommended against direct filtration, we also do not agree

with the injection of alum upstream of each filter battery.

(ii) We also do not agree to link the start of the alum dosing pumps with the

opening of the inlet valve.

14.9.16 Lime storage and dosing

210. We agree with the various details for the lime storage and dosing facilities except (in

order):

(i) Since it appears that lime is recommended for pH adjustment as a coagulant

aid, we recommend to inject lime ahead of the rapid mix tanks, such as into a

static in-line mixer.

(ii) We do not agree to link the start of the lime dosing pumps with the opening of

the inlet valve.

(iii) We do not see the need for more than two dosing pumps (+ 1 stand-by) for

pH correction in the two treated water discharge mains and in this connection,

we note that there would be more than two suction pipes.

14.9.17 Full option ( polymer) dosing facilities

211. We agree with the various details for the polymer storage and dosing facilities except

(in order):

(i) Since it appears that polymer is recommended for coagulant aid and

specifically, cationic polymer, we recommend to base the initial selection of

polymer for the WTP on a pilot study using Meghna River water at somewhat

lower temperatures than were obtained during water quality sampling. An

attempt should be made to calculate the lower temperature resulting from

several hours of exposure to the underground pipeline.

(ii) We do not agree to link the start of the polymer dosing pumps with the

opening of the inlet valve.



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(iii) We make two recommendations based on the experience of the international

water treatment engineer46:

(a) We recommend to pilot test polyaluminum chloride (PACl), which, if

readily available, represents a less expensive option than aluminum

sulphate.

(b) We recommend to provide polymer feed points at all filters such that

a small dosage is fed at a precise time and duration to pre-coat the

sand surface after a backwash.

14.9.18 Chemical storage room

212. We agree in general with the details proposed for the Chemical storage building.

14.9.19 Pre and post chlorination facilities

213. We agree with the various details for the pre and post chlorination facilities except we

do not agree to link the regulation of the chlorinators with the opening of the inlet valve.

14.9.20 Instrumentation

214. We agree with the two general recommendations for laboratory equipment and

sampling facilities and note that reference is made under the various unit process

descriptions to individual unit process control and instrumentation. Usually, this section

would refer to a PID.

14.9.21 Drainage issues to avoid flooding

215. We agree with the sentiment expressed in this section. We recommend that any

critical components be designed for the 100-year flood level.

14.9.22 Gandharbpur treated water pump station

216. We agree with the general guidelines for the design of the Khilkhet treated water

pumps and delivery piping. We have, however, some reservations about the proposed pump

line-up. In order for centrifugal pumps in parallel to produce a design flow at a design head

(here, 25,000m3/h at 25m TDH), each pump must be rated for more than 1/3 of the design

capacity and head (here, 4,200m3/h at 25m TDH). We note that this is common procedure

and fully expect the design-build contractor to submit calculations to support his pump

selection for DWASA approval and ADB non-objection.

217. We agree in particular with the FS recommendation to provide variable speed (and

thus, variable output) through frequency converter. How many of the pumps should be so

equipped will be determined by the design-build contractor – our recommendation is for all,

as we recommended for raw water pumps in the intake pump station.

218. The discharge piping of the treated water pumps will be about 800mm diameter. For

such pipe size, we recommend motorized shut-off valves and our preference would be ball

valves over gate valves. The type of valves finally selected will be determined through the

design-build contractor’s proposal.

46

Hands-on experience gained during 4 years as Senior Engineer responsible for process and research at Metropolitan Toronto Water Supply Department in 4 WTPs (conventional and direct filtration plants).



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219. Controls. We agree that the control method proposed can function. Since the water

meter in each of the two 2000mm diameter distribution mains may be a revenue meter (if the

WTP becomes a BOT PPP component based on a 500MLD take-or-pay agreement), great

care must be exercised to select the meters to eliminate arguments about their accuracy.

The design-build contractor should provide with his proposal evidence of the proposed

meter’s accuracy – such evidence should include certified factory test results and test

witnessing by DWASA’s construction supervision consultant.

220. Level controls & Pressure meter outlet pipe. We agree with the basic concept of

pump control through level and pressure sensor signals; however, the detail design for

approval by DWASA and non-objection by ADB should include a ladder diagram detailing

each input and output of the intake pump station PLC(s).

14.9.23 Power Distribution at Gandharbpur WTP

14.9.24 Design parameters for transformers for WTP and treated water pumps

14.9.25 Power distribution system for WTP

14.9.26 Power distribution system for outlet pumps

14.9.27 Generator operation

We note that the TOR for the PPTA does not include the requirement for electrical expertise.

Notwithstanding that caveat, we make the following comments.

(i) We are in general agreement with the discussion on main and stand-by

power supply; high, medium, and low voltage selection; duplicate power distribution

(main and stand-by); redundant transformers; reduced-Voltage motor starters, and

UPS-backed control voltage; except, perhaps, the control and signal voltage (24V

DC). .

(ii) The FS does not recommend the type of stand-by generator, diesel or natural

gas. Since natural gas is abundant in Bangladesh, less expensive than diesel, and

does not require potentially troublesome storage, natural gas is the preferred fuel

and we recommend its application. Since potentially a large flow-rate is required,

inter-ministerial agreement must be obtained to guarantee the supply.

14.9.28 Balancing reservoirs

221. We agree with the general discussion on the need for balancing reservoirs. We

recommend that DWASA confers with IWM, whose staff are engaged with operating the

water distribution network model and are currently preparing the Water Supply Master Plan

for DWASA. That will recommend the size and location of the balancing/storage reservoir for

the Gandharbpur WTP, if any. That recommendation must then be integrated with the basic

design provided to prospective bidders, if the cost impact is acceptable. If not, the reservoir

could be deferred and direct pumping to distribution, as done at present, continued as an

interim measure.



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14.10 Power Supply Consideration

14.10.1 Power demand for main plants

222. We agree with the brief description of, and estimate for, the power demand of the

intake and WTP. We note that the FS advises that “considerable investments [are]

necessary” for the provision of power supply, both grid-supplied and through stand-by.

However, the FS cost estimate does not include for these project components whereas our

cost estimates (capex and opex) do.

14.10.2 Sources of power supply

223. We agree with the options presented.

14.10.3 Power from National grid

224. Supply to Bisnondi intake and Gandharbpur. We agree that Rural Electricity of

Bangladesh (REB) and Dhaka Electric Supply Company Ltd (DESCO) are the agencies

responsible for 33kV power supply to the intake and Gandharbpur WTP respectively.

225. We note that the alternative of an intake at Kanchan Bridge will not be considered

and therefore, power supply is not an issue.

14.10.4 Power generated by gas generators

226. We note that the two gas suppliers, Petrobangla for the intake and Titas Gas Co.Ltd

for Gandharbpur, may be reluctant to commit to supply gas for the project due to a general

lack of capacity of gas in Bangladesh . We recommend that the steering committee, through

inter-ministerial assistance, obtains a Memorandum of Understanding (MOU) from the gas

companies for sustained gas supply for the project.

227. As a back-up, we recommend that consideration be given to specify that the drivers

for the stand-by power generating be designed to run on diesel or compressed natural gas

(CNG).

14.10.5 Diesel generators

228. We agree with the reservations noted regarding diesel as fuel for the gen-sets.

14.10.6 Proposed supply of power

229. We agree that the primary power for the project should be provided from public grids.

We recommend to fully explore the secure availability of natural gas for stand-by power fuel;

however, DWASA should consider opting for dual-fuel engines in case natural gas becomes

less available.

14.11 Philosophies of the control system 230. We agree with the control philosophy presented and expect that the design-build

contractor will provide a fully documented description of it, including specifications for Man

Machine Interfaces, events printers, and data storage and ladder diagrams for all

Programme Logic Controllers and Remote Terminal Units, with his proposal for approval by

DWASA and non-objection by ADB.

14.11.1 Automation technology



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231. We are intimately familiar with the potential of full automation to reach the objectives

noted in the FS. We also know from experience that automatic systems fail and that such

failures need to be addressed immediately by on-site, highly trained and experienced

electronics and control technicians. We do not believe that there is sufficient experience in

Bangladesh in those disciplines and that hiring such expertise from abroad may be too

costly. We therefore recommend that the design-build contractor provides a plan that

describes in detail in an operations manual the operation of the intake PS and WTP,

including the response from the operators in case of system failure of the automatic

features. Ultimately, it will be people who are responsible for reaching the objectives stated

and that means, people need to be able to over-ride all automatic functions envisaged.

14.11.2 Control concept

232. We agree in general with the details presented and add that the software should

allow for real-time operator-selectable trend displays of various treatment parameters

including incoming and outgoing pH, alkalinity, turbidity, chlorine residual, various flow rates,

and various levels.

233. Control and monitoring communication between the Intake PS and Gandharbpur

WTP. We recommend that the design-build contractor propose a secure communication

system for digital signals (we do not see the need to transfer analog signals as noted in the

FS) between the intake and the WTP that will be based on the best available technology at

the time.

14.12 Cabling and installation 234. We agree with the details presented in the FS for cabling and its installation.

14.13 Building Services and Installations 235. We agree with the details presented in the FS for building services and their

installations. We recommend to add the following:

(iv) Telephones connected to the control room from various strategic locations

throughout the WTP and intake.

(v) Strategically located toilets for men and women.

(vi) Strategically located refrigerated water fountains fed from the treated water

pump header.

15. TRANSMISSION SYSTEM REQUIRED TO SUPPLY WATER FROM GANDHARBPUR

15.1 Introduction

15.2 Existing Transmission System 236. The introduction and brief description of the existing transmission system is noted.



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15.3 Existing estimated water demand in zones

15.4 Hydraulic Model Construction

15.5 Basis of Analysis

15.6 Design Scenario

15.7 Transmission System Required to Supply Water from Gandharbpur We believe that it is beyond the scope of the PPTA to study the various considerations on

which the overall water supply for Dhaka has been planned. We believe that IWM is a

competent organization and that the modeling on which the design requirements for the

Khilkhet WTP project are based and which were adopted by the FS authors (DMC) are

appropriate. Furthermore, we believe that the FS captures all of the design requirements

and has addressed them, with a few exceptions noted in our review and with the addition of

a few recommendations.

237. We note that the only design considerations for the Gandharbpur WTP project are:

(i) 500MLD potable water to WHO and Bangladesh quality standards or better,

as recommended and treated water pumps capable to provide flow for a daily

peak factor of 1.2.

(ii) An intake on the Meghna River designed for 2000MLD.

(iii) A raw water pump station designed to provide 1000MLD in two directions: (a)

525MLD to Gandharbpur WTP and (b) 475MLD to Saidabad existing box

culvert.

(iv) Raw water transmission mains: (a) one 2200 mm diameter from intake to

Gandharbpur WTP, (b) one 2200mm diameter from intake to Saidabad

existing box culvert.

(v) Large diameter treated water transmission mains from Khilkhet WTP to

Dhaka water distribution network totaling some 34km47.

15.8 Equalization storage close to treatment plant 238. We note that the design consideration for the equalization storage at the WTP are

distinct from the design considerations for the WTP. We also note that Figure 15-11

incorrectly shows the average flow from the WTP as 520MLD; it is 500MLD.

16. DETAILED COST ESTIMATES 239. The assumptions for the cost estimates at feasibility stage have been done in

adequate detail and we agree with the source accuracy of most derived unit rates. We note,

that the estimate includes some Phase 2 components but excludes some other required cost

components, only some of which are noted in the FS. We have prepared new cost

estimates that are segregated to facilitate extraction of cost items into separate components

that may comprise a PPP private investment.

16.1 Capital Cost 240. We agree with the approach to feasibility cost estimation taken in the FS and have

adopted many of the unit rates. Our estimate differs in 4 respects:

47

Approximately 13km 2000mm dia, 0.9km 1800mm dia, 13.2km 1400mm dia, and 6.4km 1000mm dia.



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1) we have added certain sums for project components left out and others additionally

proposed (e.g., the access road, social safeguards costs, and sludge dewatering),

2) we have added for design and construction supervision (5.5% and 5% respectively, with

0.5% added to the design cost to account for expandability), and

3) we have included costs explicitly excluded in the FS (custom duty, VAT and other taxes,

cost of resettlement and compensation actions, consultancy services, and land acquisition).

4) We have verified the most significant unit rates by comparison with our own company cost

data base and recent similar projects. We also obtained new suppliers quotations to ensure

the supply cost of the recommended pipe (GRP) was viable. Where we found significant

difference, we have used new unit rates.

Assumptions in Cost Estimate: The FS project cost estimate has been revised using new costs and rates where we disagree with the FS, and includes costs for all our revised recommendations. Our updated project cost estimate covers only Phase 1 investments, as detailed in Table 11, and assumes:- 1) Pipe cost rates for the following materials:

• GRP for the raw water pipes to Gandharbpur and Saidabad • DI from WTP to Dhaka and within Dhaka • Steel for river crossings

2) Steel pipe bridges at river crossings 3) Partially manual control of the WTP. 4) Duty and VAT should be included on all materials, as advised by DWASA citing Saidabad as an example where DWASA paid duty and VAT on all M&E equipment. The cost estimate includes:

(i) Civil works: VAT and tax on basic price excl. overhead and profit (O&H) (ii) M&E equipment, including pipes: 60% Duty and taxes on ex-works invoice price

The 60% is based on advice from DWASA and actual duty invoices for recent M&E imports, which indicate the duty breakdown shown below.



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Table 14: Duties + Tax Rate Estimates from DWASA HS Codes

Duties + Taxes due on Imports Electric Pipes (2)

Payable on Invoice Price (ex-works) Equip't (1)

Steel GRP (3)

DI

CD Custom Duty 25% 25% 5%

Info

rmation n

ot

availa

ble

SD Supplementary Duty 0% 0% 0%

VAT VAT 20% 15% 15%

AIT Advance IncomeTax 5% 5% 5%

RD Regulatory Duty 5% 5% 0%

AVT Advance Trade VAT 0% 3% 3%

DF Document Process Fee 0.0% Information not available

CV VAT on C&F Commission 0.2%

ITC Income Tax on C&F Commission

0.1%

Total Assessment 55% 59% 29% 60% (1) Source: DWASA project invoice

(2) Source: HS Codes from DWASA

(3) HS Code 70195910 for "Fibre Glass for deep tube well" but for 70195990 "Other fibre Glass fabrics" TTI = 37%

This suggests 55 to 60% duty+taxes are applicable, and this might be reduced by 5% for the

AVT, which is adjustable /refundable, but DWASA advise from experience on Saidabad that

overall duty varies from 50% to 70%, depending on type of material and other factors. It was

not possible to obtain definitive data on the different duty rates, and which HS codes applied

to pipes. It seems that duty is not always assessed consistently, so we have adopted an

average of 60% for all imported materials.

The big difference between 29% total duty + taxes for GRP pipes vs. 60% for others is very

significant, and uncertain. Contradictory information was provided which didn’t related

specifically to large pipes (footnote 3). If such a low duty rate does indeed apply to large

imported GRP pipes, it will strongly favor selecting this pipe material, but if DWASA pays the

duty on behalf of contractors, it will not influence their choice at bidding. The duty rate must

be verified by DWASA before bid document preparation.

Our updated project cost estimate below covers all Phase 1 investments, as listed in Table 2



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Table 15: Project Cost Estimate (excl. Saidabad)

Component Cost $

1.0 Intake 30,092,888

2.0 Gandharbpur WTP 111,062,358

3.0 Pipelines

3.1 Intake to Juice Factory 57,178,062

3.2 Juice Factory to WTP 19,063,019

3.3 WTP to Injection point + 21 km of Distribution Reinforcement 102,158,317

4.0 Other costs

4.1 Land acquisition 75,759,329

4.2 Power supply (G) 1,543,750

4.3 Power Supply (S) 0

4.4 River study & Modeling

4.5 Environmental cost 323,638

4.6 Social cost / resettlement

4.7 IDC 19,981,668

4.8 Recurrent cost of PMU 2,348,403

4.9 Price contingency 59,241,177

4.10 Duty & taxes 95,343,438

4.11 Construction supervision 13,169,365

Total Cost (Excl Saidabad pipes, mech / elec, but incl full intake and pump stn 587,265,412

Table 16: Tentative Financing Plan (excl. Saidabad)

ADB 37.4% 220

AFD 17.0% 100

EIB 17.0% 100

GoB 28.5% 167

Total 587

Notes

1. Includes 5.5% design, 5% supervision, 15% contingencies

2. 4% VAT + 5% Tax on civil works only, excl. OH and profit

3. 60% Duties + Taxes on imported pipes + equipment..



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16.2 Operation and Maintenance Costs 241. We have adopted essentially all of the O&M costs detailed in the FS, except that the

foreign exchange conversion rate has changed from BDT70/$ in the FS to BDT80/$. Our

capital and O&M cost estimates are in Appendix 6.

C. FS APPENDICES FS Appendix 1: Water Demand Calculations

FS Appendix 2: Hydraulic calculations and cost of pipeline construction

FS Appendix 3: Comparison of pipe material.

FS Appendix 4: Net Present Calculations of Investments.

We have addressed the contents of these appendices. FS Appendix 5: Comments and Clarifications to Final Draft

D. Volume I – 3: DRAWINGS

E. Summary Opinions on other FS volumes

242. Vol I-3 contains all topographic maps for the three routes (intake to Sejan juice

factory, Sejan juice factory to Demra, and Sejan juice factory to Gandharbpur) showing

contours, land features, structures, center lines of pipeline corridors, and cadastral plots.

Since the cadastral survey (CS) was performed over 70 years ago, the plots and their

assigned plot numbers are no longer current and consequently, are of no use to the social

surveyors. Consequently, we produced mapping in GPS coordinates that reflects current

ownership, in accordance with the Revised Survey (RS) and mouza maps.

Volume II - Morphological Assessment of Intake Sites

243. The morphology study for the assessment of intake sites was not convincing. Consequently, we recommended that it be reviewed by a bona fide expert to either endorse its findings or recommend and specify further study and possibly, a physical model study. . Our review comments of the report are in Appendix 8.

Volume III Geotechnical Report Volume IV Hydrogeological and hydrological Considerations

Volume IV-1 Determination of minimum and maximum flow in Sitalkhya and Meghna

rivers

Volume IV-2 Dhaka Area Hydrogeological Assessment



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Volume V Water Treatment V-I Water Treatment Design Report V-II Water Treatment Functional Analysis Volume VI Dhaka Transmission system Volume VII Topographic Survey Volume VIII Preliminary Environmental Assessment Volume IX (SIA)

A preliminary SIA was mentioned in the FS and we unofficially obtained a copy as DWASA

did not approve it. The preparation of our Social Impact Assessment and Resettlement Plan

was delayed due to several reasons, including a large number of public disturbances and

the difficulties to obtain useful survey and land title information. Consequently, these

documents will be submitted under separate cover.

Final Report update – April 2014 III. Other Topics


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III OTHER TOPICS

244.

The following topics were included in our TOR but were not in the FS:

• Waste Water

• Institutional Development

• Gender & Poverty

• Project Finance and Economic Analyses

• Legal Framework

• Contract Packaging and Operational recommendations

A. Waste Water

1. Introduction

245. There are two main components referenced in the TOR; namely, waste water

generated at the Gandharbpur WTP and the effects of additional water supplied to the

Dhaka distribution system. The latter were subject of the PPTA Waste Water & Sewerage

component. In addition, the issue of sludge and septage management is implied as it is

discussed in the Dhaka Sewerage Master Plan (SMP).

246. We have reviewed DWASA’s plan to collect, treat, and dispose of the resulting

sewage and the sludge produced by the augmented amount of water directed into the

Dhaka water distribution system, approximately 75% of which will be converted to domestic

sewage48. The PPTA team considered which of the Phase 1 and Phase 2 priority projects

outlined in DWASA’s sewerage master plan49 could be prepared to tender stage50.

247. The effects of additional water supplied to the Dhaka distribution system are in

principle foreseen in the SMP; i.e., it sets out priority projects to cope with initially 500 MLD

water supply from the Gandharbpur WTP as discussed in this section. Our progress of the

activities on the Waste Water & Sewerage Component is summarized in Table 12.

2. Review of SMP 2012

248. The review of the SMP is summarized in Appendix 9 - Annex 1 including

recommendations for improvements and extensions. Besides chapter-wise detailed findings,

comments, and recommendations, the main observation is that the SMP covers in principle

48

The incremental volume of waste water is estimated at 70% of the Khilkhet WTP due to groundwater replacement of

which approximately 75% will end up as sewage; i.e., 263 MLD. 49

Dhaka Sewerage Master Plan Project Package DS-1A, funded by DWASA 50

Tendering implies pre-design unless the design-build option is preferred, in which case, performance specifications are

required.



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all DWASA MODS areas with adequate sewerage and STP construction projects with

priorities in line with the planned water supply schemes in DWASA’s 50-year Water Supply

Master Plan. However, the recommended waste water treatment technologies (trickling filter)

are reportedly replaced by activated sludge systems, which may entail considerable

consequences for type and amount of sludge generation and its more complex treatment

and disposal technology are not properly addressed in the SMP. This will need further

consideration by DWASA consultants for detailing of the priority projects. Phase 1 priority

projects as listed in the SMP are defined, funded, and under preparation so there is no need

for further PPTA work on this issue. Phase 2 projects as listed in Table 19are under

development by DWASA and will be prepared to tender stage by DWASA consultants

(reportedly Development Project Proposals (DPPs) have been prepared).

Table 17: Waste Water & Sewerage Component – Progress to date

No. Task Progress Status

1 Review of the DWASA Sewerage Master Plan (SMP)

1.1 Selection of relevant priority projects, including improved sewage and septic tank sludge processing out of the (SMP)

The SMP has been reviewed and priority projects have been selected. Referred is to Annex 151 for the SMP Review and Annex 2 for the list of selected priority projects.

Alternatives for sludge disposals are presented in Annex 4.

Completed

1.2 Cost estimate of priority projects

Largely available in the following vital information sources:

(i) Sewerage Master Plan (SMP) Report: Appendix 6 - Cost Estimates for Wastewater Treatment.

(ii) Development Project Proposal (DPP) for Sewerage Systems and Sewage Treatment Plants at Uttara and Mirpur.

The requested SMP appendices were received on 4 December 2012 and have been reviewed

The DPP has not been received yet.

1.3 Identification of potential sources of funding

Sewerage Systems and Sewage Treatment Plants at Uttara and Mirpur are not funded yet.

Further investigation were cancelled.

1.4 Description of importance of priority projects

The importance of the proposed priority projects (Sewerage Systems and Sewage Treatment Plants at Uttara and Mirpur, and septic tank sludge management) is discussed in this report.

Completed

2 Actions for sound operation and management (O&M)

51

Where Annexes 1 - 4 are referenced in this section, they are located in Appendix 9.



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No. Task Progress Status

2.1 Inventory and assessment of O&M actions, including improved sewage and septic tank sludge processing

Inventory and assessment of O&M actions on bases of the SMP for the proposed priority projects are formulated and presented in Annex 3.

Completed

2.2 Rehabilitation and removal of existing sewerage system

This work is supposed to be included in the ongoing detailed designs of the priority projects by the design consultant

Cancelled

3 Program of investments

3.1 Preparation of a prioritized program of investments

The prioritized investment program is included in the SMP 2012.

Skipped because redundant

3.2 Preparation of an implementation schedule

Ditto Ditto

4 Overview of PPP schemes

4.1 Prepare an overview of PPP schemes

A brief overview of PPP Schemes for O&M actions is included in Annex 3.

Completed

5 Diagnostic review of regulations, policies, and guidelines in Bangladesh relevant to PPP

5.1 Prepare the diagnostic review

No actions taken as per decision of the TL and Project Director.

Cancelled

5.2 Analyzing PPP options No actions taken as per decision of the TL and Project Director.

Cancelled

6 Preliminary set of proposals with outline scope of consulting services

6.1 Preparation of proposals No actions taken as per decision of the TL and Project Director.

Cancelled

6.2 Preparation of draft TOR No actions taken as per decision of the TL and Project Director.

Cancelled

3. Considerations and Recommendation

249. Increased water supply from the Gandharbpur WTP

250. The Khilkhet WTP Feasibility Study shows that the projected water supply from the

Khilkhet WTP will serve the population with water supply as listed in Table 11.



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Table 18: Water Supply from Gandharbpur WTP

MODS Zone

Name Population % Water supply

(MLD)

04 Mirpur 537,300 36% 178

05 Gulshan 253,050 17% 84

08 Badda 536,621 36% 178

09 Uttara 179,907 12% 60

Total 1,506,878 100% 500

251. We learned through review of the Dhaka SMP and interviews with DWASA officials

that the increased waste water volume from Zone 05 and 08 (together 262 MLD) will be fully

absorbed by the ongoing government-funded Dasherkandi sewage collection system and

STP (500 MLD) development project (Phase 1 Priority Projects). So no input from PPTA is

envisaged in this respect. However Zones 04 and 09 have as yet no funding for facilities to

treat their share of the increased water supply (178 and 60 MLD respectively). For this

reason, DWASA is planning the construction of sewerage systems and Sewage Treatment

Plants at Uttara and Mirpur on priority basis and reportedly, a DPP has been developed.

252. Importance of Phase 2 Priority Projects. Table 19 lists priority projects for Zones

04 and 09 identified by DWASA:

Table 19: Phase 2 Priority Projects

Project Dimension/ Capacity

Details Cost estimate ($million)

1. Sewerage Dhaka North (Uttara)

Not yet available*

Construction of the sewerage system and transmission mains to the new STP

57

2. Sewerage Dhaka West (Mirpur)

Not yet available*

Construction of the sewerage system and transmission mains to the new STP

86

3. STP Dhaka North (Uttara)

240,000 MLD Construction of a new sewage treatment plant

80

4. STP Dhaka West (Mirpur)

420,000 MLD Construction of a new sewage treatment plant

140



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253. These projects are directly related to the increased water supply from the Khilkhet

WTP. Funding of these projects is not yet assured and as such subject of further

investigation by DWASA.

4. Key issues requiring government consideration and policy decisions

(i) Reconsideration of the waste water treatment technologies to be applied

under the SMP (the initial recommended ‘trickling filter’ technology offers

better sludge processing, disposal and energy recovering potential than the

currently favored more advanced activated sludge technology whereas the

operation and maintenance costs will be significantly lower, unless high levels

of BOD, COD, N, and P removal are required based on environmental or

legal considerations).

(ii) Environmental assessment should be undertaken into the required removal

levels of waste water treatment system for BOD, COD, total nitrogen (Ntot)

and total phosphorus (Ptot) in order to select the minimum required treatment

technology.

(iii) Extensive technical and feasibility study is recommended into STP sludge

processing and disposal as this is an increasing environmental problem.

(iv) Combined STP and septage processing at the new STPs to be constructed

under the SMP should be seriously considered as the probably most

economic and practical way to deal with both problems.

(v) Small Bore Sewer Systems should be reconsidered as economic and

practical sanitation solution for urban poor settlements in spite of earlier

failures and difficult but not insuperable organizational and managerial

aspects.

254. The tangible outputs of the work on the waste water component of the Khilkhet WTP

Project PPTA are presented in the annexes of this section that can be found in Appendix 9.

• Annex 1 - Review of the Dhaka Sewerage Master Plan (March 2012)

• Annex 2 - Identified Priority Projects from the Sewerage Master Plan (March

2012)

• Annex 3 - Actions for Sound Operation and Management (O&M)

• Annex 4 - Alternatives for Sludge Disposal

B. Institutional Development

255. In this section, we present (i) Institutional Assessment, (ii) Financial Management

Assessment, and (iii) a 20-year Financial Forecast of DWASA operations.

1. Institutional Assessment



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256. Introduction. DWASA is embarking on a major investment to increase water supply

to a growing population of Dhaka and to ensure sustainable sourcing of water. Financing of

this investment will come from different sources including ADB, other cofinanciers, and may

include the private sector. The objective of the institutional assessment component for the

PPTA is to undertake a capacity assessment of DWASA and if required, propose ways and

means to strengthen the capacity of DWASA and related agencies. Specifically, the

objective is to enhance competence levels; i.e., the skills and ability to cope with the

required practices and technology that will allow the sectoral achievement of the


for greater Dhaka City.

257. Institutional arrangements. Currently, DWASA is implementing water and

sanitation sector development programs with separate consultancy services addressing

financial and capacity building (FCB) and project performance monitoring. This program has

addressed several key reform and organizational issues impacting DWASA operation. Our

assessment of the DWASA capacity and organization follows from discussions with the FCB

team and various officials of DWASA..

2. Capacity assessment of DWASA

The FCB team undertook a comprehensive review and assessment of the human resources

of DWASA. A training needs assessment (TNA) was carried out for all the Class 1, 2, and 3

employees. Following the TNA, a detailed 5-year Human Development Plan (HDP) has been

prepared. The Board of DWASA approved the HDP and implementation started in 2010.

This plan provides systematic strategies for human resource development and proposes

comprehensive trainings on relevant areas in order to strengthen management and staff

skills and institutional capacity for managing and operating DWASA. Our assessment of

DWASA capacity and skills level of staff heavily relies on this recent assessment. However,

focus is placed in the areas of financial management, procurement, and technical areas of

operation.

258. Organization. DWASA is a service oriented, autonomous, commercial organization

in the public sector, entrusted with the responsibility of providing water supply, sewerage,

storm water drainage services, and environmental health management. Its jurisdiction

covers Dhaka and Narayangonj cities encompassing more than 360km2 service area.

259. DWASA was established in 1963 as an independent organization under the East

Pakistan Ordinance XIX of 1963; namely, The Water Supply and Sewerage Authority

Ordinance 1963. In 1989, the drainage system of Dhaka City was handed over to DWASA.

In the year 1990, water and sanitation and drainage service of Narayangonj City were added

to the operational responsibility of DWASA. Since then, it has been expanding its service

domain and upgrading level of services to keep pace with the growing demand. Now, Dhaka

WASA is functioning under the newly approved "Table of Organization & Equipment" run by

the Dhaka WASA Board, which consists of 13 members who formulate policy and provide

overall guidelines. The chief executive of DWASA is the Managing Director.

260. The service area of WASA is divided into 11 Maintenance, Operations, and

Distribution Services (MODS) and Revenue Zones. Several reform agendas have been

initiated by the government through the Dhaka Water Supply Sector Development Program



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(DWSSDP) relating to its governance and operational matters, the most significant of which

are outlined below.

(i) As per the WASA Act, 1996 coupled with the Financial Regulations52, DWASA has

the power to exercise financial autonomy to manage its affairs.

(ii) As per WASA Act 1996 together with the Service Regulations 2009, DWASA has

autonomy in matters of personnel management.

(iii) DWASA can borrow money from commercial banks or any other financial institutions

to perform its responsibilities. The terms and conditions of borrowing will be fixed by the

government, if the borrowings are taken from the government or its guarantors.

(iv) Under section 4 of the WASA Act 1996, the Share Capital of DWASA will be fixed as

determined by the government and all share capital will be assumed by the government.

The capital may be increased by the government from time to time for its necessity.

(v) DWASA Board53 approves investments funded from its own sources. For

investments by the government, the Executive Committee of National Economic Council

(ECNEC) approves large investments. The Prime Minister is the chairperson of the

committee and the finance minister is the alternative chairperson.

261. The present organogram as shown in Figure 9 was approved in 2009. According to

the management, the organizational structure is appropriate and reflects the service

requirement and planned geographic expansion of DWASA. The total number of staff

positions is 4,375 of which 3,294 are currently employed.

262. Technical. The Operations and Maintenance (O&M) department of DWASA

consists of 3,169 staff. A deputy managing director heads the unit and the chief engineer of

O&M reports to him.

263. DWASA has established a total of 11 MODS areas throughout the Dhaka

metropolitan area to undertake O&M activities. The number of staff in each MODS varies

and according to the DWASA officials, capacity is inadequate to undertake appropriate O&M

requirements. This limits the effectiveness of these zones. Additionally, funding shortage

constrains proper O&M activities.

264. There is a lack of coordination between the O&M and other departments within

DWASA. Functions performed by other departments directly impact efficient operation of the

O&M department. For example, when MODS require chlorine for water treatment, purchase

orders are placed to the procurement unit where often delays occur. This is not to say that

there is a lack of synergy and cooperation between O&M department and other departments

and units of DWASA but to point out that efficiency of the O&M department significantly

depends on having adequate funds, number of personnel, and reasonably satisfactory

responses from other departments.

265. The FCB team has prepared an O&M manual and training has been provided to a

number of the staff. However, the training will remain limited since it is impossible to provide

training to over 3,000 personnel through the present training program under DWSSDP. We

strongly recommend that it continue even when implementation is completed.

52

Dhaka Water Supply & Sewerage Authority (Financial) Regulations, 2009 were published in gazette on 27 July 2010.

53 Under section 34 of the WASA Act 1996



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266. Procurement. DWASA being a public utility follows rules and regulations framed by

the government. Many procurement initiatives are financed by international financial

institutions (IFIs) and donor resources and it is mandatory to follow the rules and guidelines

of IFIs and donors. Therefore, DWASA complies with both government and IFIs and donors.

The majority of large-scale procurement occurs under projects financed by ADB and the

World Bank (WB) under their respective procurement rules and guidelines that are

applicable for all procurements of goods, works, and services.

267. Procurement of goods and services under government financing and internal funds

of DWASA is conducted under the guidelines of the Public Procurement Rules 2008

following a competitive bidding process. Tenders for works and services follow a two-stage

process of shortlisting by evaluating qualifications and capacity of interested bidders and

with review of technical and financial positions of bids. Over 90% of all bids are for goods

conducted by reviewing quotations and selecting the least cost products.



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Saidabad

Water

Treatment

(Operation)

Saidabad

Water

Treatment

(Maintenance)

Pagla Sewer

Treatment

Division

Quality

Control

Unit

Saidabad

Water

Treatment

Security

Division

Waste

Prevention

Division

Meter

Division

Civil

Maintenanc

e Division

SOC

Division

Store

Division

Constructio

n (Civil)

Division

Water

Rehabilitation

and

Development

Division 1

Water

Rehabilitation

and

Development

Division 2

Sewer

Rehabilitation

and

Development

Division 1

Sewer

Rehabilitation

and

Development

Division 2

Drainage

R&D

Division 1

Drainage

R&D

Division 2

P&D (Water

&

Hydrology

Division)

P&D

(Sewer)

Division

P&D

(Drainage)

Division

P&D

(Electrical and

Mechanical)

Division

Environmental

Monitoring

Division

Accounts

Division 1

Accounts

Division 2

Finance

Division

Budget

Division

Revenue

Zones 1-10

Narayangang

Revenue Zone

Central

Function

and PDR

Common

Service

Division

Labour and

Welfare

Division

Employee

Management

Division 1, 2

Magistrate

Court 1, 2,

3

Health

Division

Library

Section

MIS and

Billing

Division

GIS

Division

Drainage

(Electrical

and

Mechanical

Division)

Land

Division

Training

Center

Microbiology

Division

Figure: DWASA Organogram

Managing Director

Deputy Managing Director (Operation and

Maintenance)

Deputy Managing Director (Research,

Planning and Development)

Deputy Managing Director

(Finance)

Deputy Managing Director

(Administration)

Chief Engineer (Operation and

Maintenance)

Additional Chief Engineer (Research, Planning and

Development)

Commercial Manager

MODS

Circle 1

Drainage

(O&MCircl

e)

Water and

Sewer

Treatment

Circle

MODS

Circle 2

RPE&M

Circle

SMWC

Circle

Water

Rehabilitation

and

Development

Circle

Sewer

Rehabilitation

and

Development

Circle

Drainage

Research and

Development

Circle

Planning and

Development

(P&D) Circle

Accounts

Department

Revenue

Department

Office of

the

Secretary

MIS and

Billing

Department

Dhaka WASA Board

MODS Zone

1

MODS

Zone2

MODS Zone

3

MODS Zone

4

MODS Zone

5

MODS Zone

6

MODS Zone

7

MODS Zone

8

MODS Zone

9

MODS Zone

10

MODS

Narayanganj

MODS

Drainage

(O&M)

Division 1

Drainage

(O&M)

Division 2

FM Division

1

FM Division

2

Generator

Division

Procurement

Division 1

Procurement

Division 2

Chemical Division



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Table 20: Relevant Procurement Guidelines for DWASA under PPR 2008

Relevant Procurement Guidelines for DWASA under PPR 2008

PW1 National/International

Procurement

Standard Request for Quotation Document for

Procurement of Works under Request for Quotation

Method (SRFQ)

(for values up to BDT0.5 million)

PW2 National Procurement Standard Tender Document for Procurement of Works under Limited Tendering Method (STD)

PW3 National Procurement Standard Tender Document for Procurement of

Works under Open Tendering Method without Pre-

qualification (STD)

(for values up to BDT350 million)

PW4 National Procurement Standard Tender Document for Procurement of

Works or Design Build Infrastructure under Open

Tendering Method (STD)

(for values above BDT350 million)

268. Purchase Department Project Division is responsible for procurement. On receiving

the approved requisition from the concerned department the Purchase Department takes

initiative to complete the formalities required as per guidelines.

269. The following steps involve the procurement process:

(i) Preparation and approval of a procurement plan outlining the entire procurement;

(ii) deciding on the procurement method; (iii) preparation of terms of reference and tender documents by the Procurement

Committee; (iv) publication of procurement notice (expression of interest and pre-

qualifications criteria);

(v) shortlisting and issuing Request for Proposal (RFP); (vi) tender evaluation and selection of firms; (vii) signing of contract document; (viii) delivery of goods/completion of works and services; and

(ix) work order for goods follow inspection procedures, payment, and monitoring procurement.

270. DWASA does not have experience with PPP procurement/agreements. Although

similar in approach as above, PPP procurement includes review, analysis, and negotiations

of commercial and technical details that require knowledge and skills not available within the

organization.

271. Management. The DWASA Board consists of 13 members from various disciplines

including its chairman. The Board is the governing body of DWASA. In the spirit of the

WASA Act 1996, the Board should perform its functions in full autonomy. However, political

interference is not uncommon. The Managing Director (MD) and Deputy Managing Director

(DMD) are employed on a contractual basis with a term of four years. They are recruited



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from outside the organization on commercial terms and conditions. The salaries and benefits

of staff at other levels are fixed as per the public service benefit structure with no incentive

packages.

272. For several years the governance of DWASA has been strengthened such that the

DWASA Board and MD are currently able to exercise their powers without undue

interference from the government. Management is able to rationalize staff positions,

recruitments, and operations. Because of short tenure and high turnover of management in

the past, DWASA suffered from many operational difficulties that hurt its performance. It

appears that recent reforms and “turn around program” introduced by the new MD are

gradually turning DWASA into a more laudable and effective organization. A review of

DWASA operations by ADB in late 2011 pointed out that, “the current assessment is – per

provisions of the WASA Act 1996, coupled with the Service Regulations – that DWASA has

sufficient autonomy in personnel management...strong management and expert board –

DWASA is gradually gaining ownership of its operations.” It appears that indeed much

gradual improvement in operations is being made by DWASA with continued

encouragement from the government and an effective management and board.”54

3. Review of progress of ongoing capacity development programs and sector reform

issues

273. In December 2007, ADB approved a program loan, a project loan, and a TA grant to

the government for the Dhaka Water Supply Sector Development Program. The aim of the

Program is to contribute to sustained economic growth and improved health conditions in the

urban centers of Bangladesh by improving the water supply services. ADB’s Special Funds

resources financed the program loan of $50 million, the project loan of $150 million, and the

TA grant of $2.5 million.

274. With the support of the DWSSDP as well as a DWASA Turnaround Plan. several key

issues relating to administrative and financial autonomy of DWASA were addressed,

including: (i) strengthening of capacity of staff with increased budget allocations for training,

(ii) development of a comprehensive human resources strategy, and (iii) development of a 5-

year business plan have been addressed.

275. The following achievements outline the progress of ongoing capacity development

programs:

(i) DAWSA has prepared an organogram and is implementing its organization

structure by recruiting new staff and personnel.

(ii) The accounts have been fully computerized and currently up-to-date accounts

are produced. However, they remain incomplete because of the late processing of

revenue details from the Zonal sites.55 The audited accounts of FY2012 have been

made available in December 2012.

54

Bangladesh: Dhaka Water Supply Sector Development Program (Second Tranche): Progress Report on

Tranche Release November 2011 55

For details see Financial Management Assessment report



89 309128

(iii) DWASA financial performance has considerably improved and with ongoing

programs for computerization and efficiency improvements further strengthening of

financial management are expected to occur.

(iv) The 5-year Business Plan is being annually updated. The FCB team is

carrying out training and workshops to strengthen staff skills in order to enable

preparation of corporate plans without outside assistance.

(v) To strengthen the existing financial control systems, a Finance and Accounts

Manual comprising 13 relevant sections has been prepared. Once the manual is

approved by the management, intensive training on operation flow, computerization,

and accounting systems will be carried out.

(vi) Although the billing and collection process and accounts have been

computerized, the two processes are being integrated through the development of

computer networking systems.

(vii) Public education and citizens’ awareness campaigns are being carried out to

involve citizens in the activities of DWASA for more transparency and to spread

important messages such as water conservation. Since January 2012, several

NGOs56 have been contracted to carry out consumer perception studies and report

on consumer satisfactions. They are also engaged in carrying out campaigns for

water conservation, meter reading, and water supply features/facilities for better

maintenance especially among low-income communities.

(viii) Under the DWSSDP project, around 46 training courses have been provided.

The majority of the training has been provided through the DWASA training center,

while a few have been conducted in other specialized institutions57. Only one course

has been provided internationally58. So far, around 800 DWASA employees have

received training. Table 21shows the type and number of employees undertaking

training. In order to build the capacity of the DWASA training center and help

facilitate to be sufficient, external trainers are sometimes brought in. DWASA

established a Training Center in 1980 with two branches: (i) engineering and (ii)

administration and finance. These branches provide training to DWASA employees in

their respective fields. In FY2010-11, the Training Center carried out most of the

organized training for over 400 DWASA personnel. Aside from the training provided

by the Training Center external institutions such as Bangladesh Public Administration

Training Center, Planning and Development Academy, Bangladesh Computer

Council, Institute of Diploma Engineers, Institute of Personnel management, BUET

etc. are also engaged to train DWASA staff.

Table 21: Training provided under the FCB component

No Trainings No Officers No Staff

Management Training 13 181 58

56

DWASA has partnered with 19 NGOs. They are DSK, WSUP, Water Aid, Plan International, UNICEF, Desh Bidesh International, Resource Integration Center, Shobar Jonno Pani, Prodipon, FULKI, ASD, BASA, NDIBUS, PSTC, CUP, Shelter for the Poor and Nogor Seba

57Bangladesh Public Administration Training center, Planning and Development Academy, Bangladesh Computer Council, Institute of Diploma Engineers, Institute of Personnel management, BUET

58 Bangkok, Thailand (unspecified institution)



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Financial Training 15 96 121

Technical Training 12 41 194

Awareness Training 3 50 -

Total 43 368 373

276. The formal training courses are a major source for strengthening the capacity of

DWASA and enhancement of skills level of staff. According to the FCB team there are

several bottlenecks being faced that have slowed down the achievements of the capacity

building program. They are:

(i) Short tenure of training center staff: Most staff (trainers) of the Training

Center are seconded from other DWASA departments, with tenure of around 3 years.

These staff also lack training center management and operational skills. Hence, long

term planning and target implementation are hampered in the training center.

(ii) Funding restrictions: Government policy stipulates that no internal training

course can spend over BDT50, 000 per course. In order to accommodate this

budget, the number of trainees has to be restricted while the course lengths

sometimes need to be shortened. Hence all employees with a particular training need

may not receive it while those who do, cannot get a comprehensive one.

(iii) Lack of incentive for trainees: Training attendances are not recorded in the

annual confidential report of employees. Hence it does not add to their career

progress. This creates a disincentive to those who receive training.

277. DWASA has variously stated that its operational efficiency has improved in the last

few years. Reportedly, non-revenue-water is down to 29% from a high of 40%, operating

ratio59 is down to 0.79 from a high of 0.90, and collection rate improved to bring about a 25%

increase in revenue income in FY2011-2012 compared to the previous FY. Notwithstanding

the validity and accuracy of these figures, it is commendable that serious attempts are being

made to improve operational efficiency and hence performances of DWASA by the

incumbent management. Many challenges remain and addressing the water need of a

growing population of Dhaka will require a strong DWASA willing to meet those challenges.

278. Although DWASA has been able to recently increase its tariff by 5%, there is a need

for higher rate increases to meet its costs. Under the WASA Act 1996, WASAs have the

authority to increase tariff by 5% annually and with approval of the government, they can

increase tariff by more than 5%. DWASA has taken advantage of the provision in the Act

only recently and has increased tariff rates over the last two years by 5%. The Tariff

Adjustment Plan prepared together with the 5-year Business Plan recommended a base

tariff increase of 59% and thereafter a 5% increases. This recommendation has not been

accepted. Tariff setting and adjustments will remain key issue in the near future and will be

required to be addressed by WASA and the government for full cost recovery, including

capital costs.

279. Tariff setting processes and other regulatory issues such as water quality, service

quality, water resource allocation and protection, etc. will be addressed in an upcoming

project “Establishing Regulatory Framework for Urban Water Supply and Sanitation Sector”

funded by ADB. The project intends to assist the government in making the water cell in the

Policy Support Unit (PSU) of the Local Government Division (LGD) fully functional by

59

Operating expenses as a percentage of net sales



91 309128

developing necessary rules and standards for regulating water utilities operating in the urban

sector and starting performance monitoring of major water utilities. Specific outputs will

include: (i) drafting adequate rules and standards for regulating water utilities, including

financial management regulations, tariff setting and review methodologies, service standards

and key performance indicators, and customer service regulations; (ii) preparing monitoring

reports on the performance of major water utilities by using the approved rules and

standards by reviewing the reports submitted by water utilities; (iii) initiating preparation for

the establishment of a water economic regulatory commission (WERC), including

preparation of a road map; and (iv) capacity building of the government officers, particularly

those of the water cell, to meet their obligations.

280. DWASA has very little private sector participation in its operation. All physical work is

contracted out to local firms and advisory support services are provided by international and

national firms under technical assistance programs. Bill collection in several zones is

outsourced to an employees’ cooperative, The Employees’ Consumers Supplies

Cooperative Society Ltd (ECSCSL). The limited exposure of DAWSA with the private sector

suggests that procuring and managing a PPP project will require strengthening DWASA’s

capacity. There is currently a PPP Cell at DWASA that is moribund and does not have any

activities under it.

4. Proposed measures for further strengthening capacity

281. As noted, DWASA is currently undergoing substantial capacity strengthening from

the DWSSP within the financial and capacity building component. Capacity building

processes mainly deliver formal training with developed course modules and preparation of

operating manuals such as O&M manual. Training has focused particularly on technical and

financial aspects. There is a need for further training of staff since the FCB component will

be ending in December 2013 and delivery of planned training could not be fully completed

due to constraints noted. Training needs to focus on financial management and IT systems

and applications. Although DWASA has embarked on preparing corporate plan and budget

with support of the FCB team, there is little capacity within its own staff to ensure continued

updating and preparation of such plans and budgets.60 We understand that the IT hardware

is only being revamped but it still is a long way for the field offices to digitize operations and

establishing fully connected networking with the central unit in DWASA. Very few of the staff

are computer literate and capacity for both computer literacy and use of computers needs to

be increased.

282. DAWSA needs to strengthen its capacity for PPP management as well as

skills/knowledge of its staff with respect to procurement and regulatory areas of PPP

projects. Although specific transaction advisory services from external parties will be sought,

it is clear that a strong PPP unit staffed with a few knowledgeable and skilled senior

professionals is necessary if the PPP route is selected. Strengthening of the capacity in this

area could entail several new recruitments as well as training cum study tours for staff

responsible for various aspects of the PPP project during the pre-tender and tender

phases.61

5. Project Institutional Framework

60

Further details on capacity strengthening for financial management is outlined in the Financial Management Assessment Report

61 Further details on specific areas of pre-tender and tender phases are outlined in the Legal Framework



92 309128

283. Introduction. Timely establishment and involvement of appropriate institutions

would significantly facilitate achievement of the project objectives. Several institutions,

largely government departments, are key players in the establishment and operation of the

Gandharbpur WTP and cooperation and timely implementation of each institution’s activities

will be a deciding factor for timely delivery of project outputs/milestones. The main

institutions involved in the Khilkhet WTP project activities will be:

(i) DWASA (Ministry of Local Government, Rural Development and Cooperatives)

(ii) RAJUK (Ministry of Housing and Public Works)

(iii) Directorate of Land Records and Survey (Ministry of Land)

(iv) LGED (Ministry of Local Government, Rural Development and Cooperatives)

(v) BWDB (Ministry of Water Resources)

(vi) RHD (Roads and Highways Department, LGED)

(vii) DoE (Ministry of Environment and Forests)

(viii) Local Level authorities

(ix) PPP Cell

284. Project institutions and framework. DWASA, at the central level through the field

offices and at the project level, will have the overall responsibility for project implementation,

coordination and planning, internal monitoring, and overall reporting. DWASA will depute

officials in the central office (HQ) and in the field office/PMU who will be responsible for the

implementation of the project activities.

285. Close cooperation and coordination of work will be organized during the early stages

of the project with RAJUK and Directorate of Land Records for land acquisition, and with

LGED for construction of access roads. DoE will provide site certificate and clearance for the

construction of the intake, pipelines, and WTP and approval of the EIA and EMP in order to

start construction activities. DoE will remain a critical partner to the project as monitoring and

control of pollution discharged in the Meghna River, particularly upstream will have to be

controlled and made compliant. Finally, the project will need to define water abstraction right

and provide assurances to the Project Company, if PPP option is selected, so that the

Ministry of Water Resources grants water abstraction rights to the Project Company.62

286. Roles and Responsibilities. DWASA will be the executing agency for the Khilkhet

WTP project. A Project Management Unit (PMU) will be set up to manage project activities

with distinct parts being managed and implemented by DWASA. The PMU should comprise

of at least a director, three engineers with staff (civil, mechanical, electrical, one or two of

whom would be designated deputy directors), a procurement specialist with staff, an

accountant with staff, and two safeguard specialists (environment and social).

62

Further details on this issue is outlined in the Legal Framework



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287. The roles and responsibilities of DWASA in implementing the Khilkhet WTP project are outlined below. It will:

(i) co-ordinate the implementation of Khilkhet WTP project activities with field

staff;

(ii) review monthly progress reports prepared by the contractors and the PMU;

(iii) monitor the progress on project design and construction implementation;

(iv) advise PMU on policy related issues during design (if design--build) and

construction;

(v) coordinate tasks relating to PPP with the PPP Office and transaction advisory

team for any PPP components of the Project;

(vi) coordinate tasks relating to water abstraction rights with Ministry of Water

Resources;

(vii) coordinate tasks relating to land acquisition with Ministry of Lands and its

local offices;

(viii) coordinate tasks relating to policy reform issues dealing with the water and

sanitation sector with the Water Cell and the Water Economic Regulatory

Commission when it is established;

(ix) coordinate tasks with DoE and ensure timely submission of

Project Implementation Unit

Safeguard Implementation Unit (SIU)

Assistant Engineer

Safeguard Officer

Environment

DPD (Civil) (Exn level) DPD (Electrical/Mechanical)

(Exn level)

Executive Engineer

Civil 1 Executive

EngineerCivil 2

Executive Engineer

Electr/Mecha 3

Assistant Engineer

Safeguard Officer

Social and Gender Assistant

Engineer Assistant

Engineer Assistant

Engineer

Assistant

Engineer Assistant

Engineer

SAE level

SAE SAE SAE SAE

SAE SAE SAE SAE

Project Director (PD) (ACE level)

SAE level



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reports/documents necessary to obtain statutory licenses;

(x) appoint service provider for resettlement and rehabilitation implementation;

(xi) appoint Independent Engineer for assistance with contract document

preparation, design check, and construction supervision; and

(xii) appoint contractors and construction supervision engineers.

288. Modalities for Investment and O&M. The Khilkhet WTP project will be financed by

multi-donor organizations. While ADB is taking the lead for the investment funds, AFD and

EIB are the other cofinanciers. DWASA has a sound record of experience with ADB and bi-

lateral donor lending procedures and projects and in the past handled several projects and

programs. The fund flow mechanism and disbursements are detailed in ADB template Fund

Flow mechanism.

289. DWASA has no experience with PPP, specifically with private sector equity

investments. As suggested by the consultant’s legal analysis a local legal entity will need to

be formed to assume the contractual obligations vis-à-vis DWASA. The shareholder

structure and agreements will lay out the provisions which are of interest of DWASA.

Detailed analyses are provided in the Section E - Legal Framework.

290. Under a PPP scheme and operation, such as BOT, it is expected that the private

operator will undertake O&M both on and off-site. The O&M agreements between DAWSA

and the private operator may follow similar modality as in the current Saidabad plant.

6. Financial Management Assessment of DWASA

291. One of the components of DWASA’s long term plans to increase the overall water

supply capacity and to reduce the amount of present groundwater abstraction is the

establishment of the 500 MLD Khilkhet Water Treatment Plant Project phase 1, with an

estimated investment costs of about $587 million.

Other components of the DWASA long term plan are (i) the recent construction of the

Saidabad WTP phase 2 (total costs about $110 million), (ii) the ongoing DWSSDP network

rehabilitation project (total costs about $200 million), and (iii) the future construction of Pagla

WTP phase 1 & 2 as well as the Saidabad WTP phase 3, totaling more than $1 billion, and

several priority wastewater projects that our outlined in the SMP. Not only will these projects

strongly increase the DWASA debt service loan costs in the near future but DWASA’s

operating costs will also significantly increase, since the O&M costs of surface water

treatment are considerably higher than water supplied from ground water sources.

Given the expected significant increases in the capex and opex, it is highly relevant that a

regular financial management (FM) assessment of DWASA be conducted. To ensure

sustainable DWASA financial results, up to date and effective financial management by

DWASA is a critical success factor. If DWASA does not have the proper staff strength and

competences to effectively manage its financial resources, the benefits of the projects may

not be as sustainable as planned.

292. Our assessment is based on the results of a financial management assessment

questionnaire (Appendix 10 refers), discussions with senior officials of DWASA, and

information made available by the presently ongoing ADB funded Financial Capacity

Building component of the DWSSDP project. The FMA has considered two types of risks; (i)

inherent risks; i.e., risks beyond the direct control of the DWASA FM, and (ii) control risks;



95 309128

i.e., risks related to the internal functioning and control of the DWASA Finance and

Accounting division.

293. Clearly, the biggest inherent risk that DWASA will be facing in the coming years is

the increasing unstable political situation, which may result in seriously hampering economic

development and possibly reduced investments in water supply and sanitation (WSS)

infrastructure projects. This risk may affect the ongoing organizational reforms, given that

DWASA may still not operate as a financially autonomous entity, that top management is still

via political appointment, and last but not least, that tariff setting is still dependent on political

approvals.

294. The immediate risk may also involve delays with the internal bureaucratic procedure

of the GOB with respect of the project. This may involve in delays occurring from the

preparation of the Development Project Proforma (DPP) that details out the GOB and in

processing approval of the DPP. Lessons from development projects informs delays ranging

from anywhere between 9 to 12 months. Delays of such length will jeopardize the

implementation schedule for the Gandharbpur WTP construction and operation resulting in

cost overruns and further delays. It is highly recommended that DWASA is assisted by ADB

to ensure the preparation of DPP is carried out on schedule. Frequent monitoring of the DPP

approval process is also recommended.

295. The results of the FM assessment of the internal (control) risks indicate that the

existing financial management capabilities and performances of DWASA Finance and

Accounting division may be considered acceptable; however, with several medium to

significant risks involved. These risks are acknowledged by the DWASA management and

programs are ongoing and further developed to mitigate these risks.

296. Since several years the double entry accounting system has been implemented and

is currently operated without major problems. The former, manual accounting system has

been mostly automated; however, the accounting software is considered of too low a level,

using simple standard accounting software packages that cannot be interlinked to other

systems.

297. Improvement of the accounting software has been started under the FCB project but

is not yet completed. An important bottleneck is that the existing hardware is outdated and

insufficient to accommodate the requirements of the proposed new, custom-designed and

interlinked DWASA accounting software system.

298. In addition to the lack of proper Information Technology (IT) infrastructures, the

DWASA Finance and Accounting staff does not presently have the required background and

experience to operate the new accounting software systems. This may be considered at

least as a medium risk, since this lack of adequate competences is a dominant and crucial

issue. Without the FM division staff having the proper background, manpower strength, or

competences, all targeted measures for FM system improvement and/or procedures will not

show significant results or impacts.

299. We recommend that DWASA top management give more focused attention to initiate

and monitor the necessary improvement of FM staff competences and IT infrastructure




96 309128

(iv) Internal auditing unit. An internal auditing unit does exist, but is mainly

addressing queries from the government and other stakeholders, concerning

DWASA’s annual report. It does not sufficiently address the internal auditing

issues for which it was established.

(v) Monthly performance reporting. The submission of the monthly

performance reports is mostly late; i.e., about 4-5 months after the respective

month, while 3 weeks is the target. As a result, the reported monthly

performance data are not very useful for possibly required DWASA top

management actions.

(vi) Management information system (MIS). MIS development and

implementation and further development seems to have high interest of

senior DWASA management, insufficient budgets are presently being made

available. The DWASA ICT/MIS unit consists of only two staff, who have to

collect and process all required MIS information. As noted, there is a lack of

proper ICT hardware and software infrastructure, with inadequate hardware

and slow (2G) internet connections, using mostly pirated software and no

virus protection. The result is that no actual assessment or analyses of the

collected data is being conducted.

(vii) DWASA PPP Cell. The DWASA PPP cell is still in its infancy and does not

have real experience with PPP type of projects such as Gandharbpur WTP

phase 1 may include. A specific training program is required, particularly if a

Gandharbpur PPP set up will be implemented.

301. In summary, we conclude that we did not identify any significant FM risks.

Nevertheless, given the on-going and planned major investments and expected strong

increase of the DWASA annual operating and loan/DSL costs in the coming years,

DWASA’s top management should give serious attention to the identified FM risks, and

make the necessary budgets available to mitigate these risks, in order to be able to

effectively direct and guide the DWASA middle management and staff through the difficult

operational and financial tasks which are expected to be encountered by the DWASA

organization in the coming 5 to10 years

7. 20-Year Financial Projections of DWASA

302. One of the project tasks is to undertake an analysis of the financial position,

performance, and projections of DWASA for the coming 20 years in order to assess the

financial capacity of the DWASA to absorb on a sustainable basis not only the investment in

the Ghandarbpur WTP, but also in view of the other major on-going and future investments

which will significantly increase both the annual O&M costs as well as the Debt Service

Liability (DSL) Costs; i.e., the principal loan repayments and the interest costs.

303. These on-going and planned major water and sanitation investments are listed below

and summarized in Table 22:

(i) Saidabad WTP 1 - in operation since about 8-9 years ago and of which the payments of DSL costs will start in 2013/2014.

(ii) Saidabad WTP 2 – in operation since December 2012 and of which the payment of the DSL costs will be starting in 2015/2016.



97 309128

(iii) Dhaka WWSDP project (rehabilitation of distribution network; investment costs about $150 million), of which the payment of the DSL costs will start in 2012/1363

(iv) Ghandarbpur WTP Phase 1 project (estimated investment $600 million), planned to become operational in 2017/18, and of which the payment of the DSL costs will start 5 years after start of construction.

(v) Pagla (/Jasaldia) WTP 1 project (estimated investment $450 million), planned to become operational in 2020/2021, and of which the payment of the DSL costs will start 5 years after start of construction.

(vi) Saidabad WTP 3 project (estimated investment costs $450 million), planned to become operational by 2020, and of which the payment of the DSL costs will start 5 years after start of construction.

(vii) Pagla (/Jasaldia) WTP 2 project (estimated investment $500 million), planned to become operational in 2025/2026, and of which the payment of the DSL costs will start 5 years after start of construction.

(viii) Khilkhet WTP Phase 2 project (estimated investment $550 million), planned to become operational in 2030/2031, and of which the payment of the DSL costs will start 5 years after start of construction.

(ix) Phase 1 priority SMP projects (estimated investment $69 million), planned to become operation in 2015 but since no action has been taken yet possibly at end 2030

(x) Phase 2 priority projects (estimated investment $1,087 million) planned to become operational in 2025.

(xi) Phase 3 priority projects (estimated investment $530 million, planned to become operation in 2035 and not impacting the 20 year projection ending in 2031/32.

304. Not only will the above projects significantly increase the annual DSL costs in the

coming years, also the respective O&M costs will significantly increase DWASA’s overall

annual expenditures, since the O&M costs of surface water treated by a water treatment

plant are considerable higher than water being produced from ground water wells.

Table 22: Ongoing and planned WS investments

Project Start Operations

WTP Saidabad II 2012/13

WTP Gandharbpur I 2017/18

WTP Pagla/Jasaldia I 2020/2021

WTP Saidabad III 2025/2026

WTP Pagla/jasaldia II 2025/2025

WTP Gandharbpur II 2030/2031

SMP Phase 1 2015/2020

SMP Phase 11 2020/2035

305. The 20-year DWASA financial forecast starts from the fiscal year (FY) 2011/2012, for

which year the Auditor’s report and financial statements have been made available. A

63

according to Loan Agreement no. 2382-BAN (SF) between GOB and DWASA, dated 22.09.2008



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summarised overview of the key items of the present financial position of DWASA, as

reflected in the DWASA Income Statement, Balance Sheet for the years 2011 and 2012, as

well as key financial ratios are given in Table 23, Table 24 and Table 25.

306. The starting point for the DWASA 20-year forecast is the officially recorded financial

position for the fiscal year (FY) 2011/12 (ending 30 June 2012), as laid down in the Auditors

report and financial statement64.

307. Relevant data were used from the Audit report 2011/2012, but also from the 5-year

DWASA business plan and multi-annual financial forecasts, which were developed in the on-

going ADB FCB project. Unfortunately the local financial FCB expert, responsible for the set

up and drafting of the DWASA financial model had left the FCB project earlier and therefore

no clarifications on the many, sometimes different and inconsistent figures, could be

obtained. In drafting the DWASA 20-year financial forecasts, also Gandharbpur PPTA cost

reference data were used, such as investment cost components and O&M cost figures.

308. To obtain the relevant additional financial information from the DWASA financial

departments, for instance on the existing and upcoming DSLs, turned out a time consuming

activity. Table 23: Summary DWASA income statement

Item (million BDT)

2012/11 2011/10

Revenues

Water 4,283 3,602

Sewage surcharge 1,642 1,331

Other 1,038 814,7

Total income 6,964 5,747

Operating expenses

Salary & wages 3,176 2,307

Repair and Maintenance 2,389 2,114

Administration 508 443

Depreciation-Amortization 625 661

Other 26 5

Total expenses 6,724 5,530

Operating profit 240 218

Interest expenses 146 158

Income tax 23 15

Net profit (after tax) 70 45

Table 24: DWASA Balance Sheet

Item million BDT

2012/11 2011/10

Assets

Fixed assets . .

Property, plant & equipment 42,949 43,522

64

DWASA Auditor’s report and financial statements for year ending 30 June 2013, submitted 26 December 2012



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Capital work in progress 13,941 10,458

Other 20 20

Total Fixed assets 56,909 53,999

Current assets . .

Materials and supplies 422 149

Accounts receivables 3,599 3,108

Advances-prepayments 771 908

Investments/deposits 4,433 3,371

Cash 663 1,884

Other 39 28

Total Current assets 9,928 9,450

Total Assets 66,838 63,449

Equity & Liabilities

Capital & Reserves 20,263 20,192

LT Liabilities . .

Grant & Funds 29,563 27,588

Deferred tax liability 7,787 7,787

Other LT liabilities 4,374 4,839

Total LT liabilities 41,724 40,214

Current liabilities .

For expenses 4,305 2,610

Other 545 433

Total current liabilities 4,850 3,043

Total Equity & Liabilities 66,838 63,449

Table 25: Operational & Financial Ratios

Operational & Financial ratios 2012/11 2011/10 Remarks

Operational

Operating margin 12.4% 12.5% All 3 ratios are too low, due to insufficient operating result, i.e. too low revenue incomes

Gross margin 3.4% 3.8%

Return (net) on Sales 1.0% 3.8%

Revenue collection period (months) 7.2 7.5 Too long, action to reduce this period are undertaken

Costs

Salary costs (% total expenses) 47.2% 41.7% Very high, mainly due to (incidental) high provisions for extra pension fund contributions

,, ,, (excl. pension fund provisions)

17.1% 18.6%

Admin. costs (% of total expenses) 7.6% 8.0%

Maintenance &Repair costs (% of total expenses)

52.8% 61.8% High, mainly due to high power costs. Overall result vulnerable for power costs increases (in particular when more WTP’s will come in operation)

Power costs (% of M&R expenses) 40.6% 38.6%

Financial

Quick ratio 1.7 2.75 High; questionable since high amount (investments/ deposits) more likely to be fixed assets



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Equity/Total Eq+Liabilities 32.8% 33.4% Favourable, but will decrease due to new project/GOB loans

LT liability / Total Eq+Liabilities 67.4% 66.5% High, see Audit comments on 'Grant & other Funds

Interest coverage ratio 5.9 5.6 Satisfactory, mainly since interest payments are still limited; will rapidly decrease in the coming years

Debt Service Coverage Ratio 1.4 5.3 Still favourable, but will further significantly decrease due too strong increase in due (GOB) loan repayments

The forecasting of the 20-year DWASA financial results was carried out under various

assumptions that are included in the data input sheet in Appendix 10.

309. For the presentation the DWASA 20-year financial forecast, a summary of the annual

Income Statement (with forecasted revenues and expenditures) was made, while for the

supporting calculations of the main revenue streams and cost components are made in

separate excel sheets. The Income Statement summary sheet is presented on the following

page.

Final Report update – April 2014 3. Other Topics


101 309128 Figure 10: 20 year forecast of DWSA Income Statement



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310. Considering the financial results of the DWASA 20-year forecast, the following can be observed:

(i) The annual financial results, i.e. the net profit (after tax and interests), will remain

positive in the coming years, but will become negative in 2015/16 (when the Saidabad II

loans are due for repayments) and more negative after the Khilkhet WTP phase I is

expected to start its operations in the FY 2016/17.

(ii) The DWASA annual profits show good positive results till 2014/2015, mainly

since for the FY 2011/12 and 2013/14 a significant part of the annual expenditures

consists of a major (incidental) provision for additional contributions to the pension fund,

in order to close the existing ‘gap’. This provision for the fiscal year 2011/12 was about

2.02 billion BDT (i.e., about 30% of the total costs), i.e. without this incidental provision

the DWASA annual operating result would have been 2.0 BDT billion higher, mainly due

to relatively strong increased revenue incomes over the past 2 years. It may be expected

that this incidental provision for the pension fund will end in the coming 2 years, thus

leaving significant ‘room’ to compensate for the expected increases in the annual O&M

and DSL costs.

(iii) After the Gandharbpur WTP phase I may come into operations in 2017/18, the

DWASA annual results will become more negative, due to the high Gandhabpur

investment costs for the treated water (BDT 5.44/m3), and also due to the fact that

various DSL costs (i.e., interest and principal repayments) of the different committed

loans of the past years will have to be paid for from that year on. (i.e. Saidabad 1 & 2,

DWSSDP project, ADB loans (no. 1, 2, 3 and 4), Gandhabpur 1).

(iv) The net annual profit losses will further increase due to a strong increase of the

depreciation cost resulting from the on-going and planned WTP investments.

(v) The expected Return on Sales (RoS) will vary after 2015/2016 between ~2.2%

and ~11.5%, and the debt service cover rate (DSCR) may become as low as 0.4, which

is an indication of the poor financial position reached by DWASA.

311. The 20-year DWASA forecast show that also the annual revenues are expected to increase significantly, due to the following factors:

• increase of population to be covered, and thus more connections and consumption

• increased water supply resources and capacity

• reduction of UfW, thus less production losses

• annual increase of the water/sewerage fee (5% increase per year)

• increase billing collection rate

312. Future cost reductions may be expected:

• from some lower O&M costs for Saidabad WTP II operations, when the 3 yr O&M

contract with French company Degremont ends.

• if DWASA will be able to re-negotiate the various on-going or future loan/DSL

agreements with the GOB.



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313. Besides the above mentioned possible cost reductions, clearly the most logical and

preferred option to improve the DWASA expected negative annual financial results, is an annual

increase of the water-sewerage fee/m3 to be charged to the households and

commercial/industrial users. It is generally acknowledged that the present water fee of 6.99

BDT/m3 (recently increased to BDT 7.34/m3) is much too low to enable DWASA to deliver

adequate water supply and sewerage services at the required quality level and on a sustainable

basis.

317. In order for a greater understanding of the impact of service fees on the financial position

of DWASA estimates and analysis based on several tariff options have been carried out. Four

scenarios have been analyzed and they are:

1) Business-as-usual case: under this scenario DWASA financial performances are

analyzed with the current levels of tariff rate and annual increases. DWASA in the past

few years have increased tariff rates by 5% which is what its management has the

authority to do without seeking approval from the government.

2) Initial high tariff levels case: Tariff rates are substantially increased in the initial period

and leveled off for later years at the 5% annual increases.

3) Delayed tariff increase case: Under this scenario tariff rates are kept at the current levels

for the first few years annual increases are at 5%. A steeper tariff rate is introduced at a

later year subsequently leveling it off with annual 5% increases.

4) Increasing tariff by BDT 1 each year for 5 years.

In order to mitigate tariff increase impacts on the poorest population DWASA could introduce

block tariff structure that is not currently used. From the Willingness-to Pay survey the derived

aggregate demand curve indicates that all households keep connected so long the water tariff is

BDT 6.06/ m3, after which point, the poorest 20% of the households start to disconnect. At a

tariff of 9.94/m3, no poor household keep connected.

The main input data/ assumptions used are detailed below.

Table 26: Input Data

Unit Amount

Water demand

Population (x1000) 12,000

annual increase % 3.0%

lpcd (liter per capita per day) ltr 150

annual in/decrease % -0.8%

Commercial /Industry sector (% of total) MLD 30%

annual increase MLD 3%

UfW/NRW %



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Results and Conclusions from Different Tariff Level Analysis

Service fee levels over the 20 years, Operating cash flows and DSCR is shown in Table 27

below. The conclusions are as follows:

1) Under the business-as-usual case the minimum DSCR falls to 0.6 and over several years

the DSCR is less than 1 indicating that DWASA is unable to service its loan and perhaps

unable to meet operating expenses. Earnings before interest and taxes remain positive.

2) An increase of tariff in the order of 30% in year 2013 and thereafter, annual increases of

5% make the financial position of DWASA much better and reasonably satisfactory. This

increase is both for domestic and non-domestic tariff. If only domestic tariff would be

considered then an increase of around 50% would become necessary. This increase is

commensurate with the recommendations being provided by FCB team that asked for

57% increases and then leveling off with annual increases of 5%.

3) With a delay in tariff increases and following current trends of annual 5% increases

2015/16 there would be a need of 40% increase in tariff rates to reach a viable financial

position by DWASA. This indicates that it would be more prudent for DWASA to approve

a steep increase in tariff over the current levels and then leveling off over the years to

come.

4) As a variation of the above scenario viewed by the management of DWASA, is to

increase tariff rates by BDT 1 each year for five years and then move towards a yearly

increase of 5%. The DSCR for each year is above 1 and indicates a more healthy

financial position. However, this increases needs to be undertaken in Fiscal Year 2013-

2014, since further delay will increase the amount needed to obtain a sound financial

position for DWASA.

annual decrease % -2.0%

Revenues

Water fee charge/m3 2012/13

. Domestic & sewerage BDT/m3 6.99

. Comm/Industry BDT/m3 22.23

. Billing collection rate 90%

annual increase 1%

O&M costs

O&M Cost increases 7%

Other cost increases 3%

Costs raw water supply Saidabad (PPP) BDT/m3 1.7

Production costs Gandharbpur WTP (PPP)

BDT/m3 11.7

Costs Khilkhet (non-PPP, Pipelines) BDT/m3 5.8



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Table 27: Results of Different Tariff levels on Financial Performance of DWSA

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32

Scenario 1 (Business-as-usual)

Service Fees

Domestic 6.99 7.34 7.71 8.09 8.50 8.92 9.37 9.84 10.33 10.84 11.39 11.96 12.55 13.18 13.84 14.53 15.26 16.02 16.82 17.66 18.55

Non-Domestic 22.23 23.34 24.51 25.73 27.02 28.37 29.79 31.28 32.84 34.49 36.21 38.02 39.92 41.92 44.01 46.21 48.53 50.95 53.50 56.17 58.98

Cashflow from operations 808 2,081 3,467 4,269 4,509 4,396 4,860 5,360 6,577 7,173 7,816 8,452 9,075 10,839 10,598 11,374 12,208 13,104 14,068 10,874 12,773

DSCR 1.1 2.7 3.8 1.1 0.6 0.5 0.2 0.4 0.8 0.9 0.9 0.8 0.8 1.2 1.1 1.4 1.3 1.5 1.8 1.0 0.9

Scenario 2 (Initial High Tariff)

Service Fees

Domestic 6.99 7.34 9.54 10.02 10.52 11.05 11.60 12.18 12.79 13.43 14.10 14.80 15.54 16.32 17.13 17.99 18.89 19.84 20.83 21.87 22.96

Non-Domestic 22.23 23.34 30.34 31.86 33.45 35.13 36.88 38.73 40.66 42.70 44.83 47.07 49.43 51.90 54.49 57.22 60.08 63.08 66.24 69.55 73.03


DSCR 1.1 2.7 6.4 1.9 1.2 1.2 1.1 1.3 1.9 2.1 1.9 1.7 1.7 2.2 2.2 2.5 2.3 2.6 3.0 2.1 2.0

Scenario 3 (Delayed Tariff Increase)

Service Fees

Domestic 6.99 7.34 7.71 10.79 11.33 11.89 12.49 13.11 13.77 14.46 15.18 15.94 16.74 17.57 18.45 19.38 20.34 21.36 22.43 23.55 24.73

Non-Domestic 22.23 23.34 24.51 34.31 36.03 37.83 39.72 41.71 43.79 45.98 48.28 50.69 53.23 55.89 58.69 61.62 64.70 67.94 71.33 74.90 78.64


DSCR 1.1 2.7 3.8 2.2 1.4 1.6 1.4 1.7 2.3 2.5 2.3 2.0 2.1 2.6 2.6 3.0 2.7 3.1 3.5 2.6 2.4

Scenario 4 (Tariff increase by 1 taka for five years)

Service Fees

Domestic 6.99 7.34 8.34 9.34 10.34 11.34 12.34 12.957 13.605 14.285 14.999 15.749 16.537 17.364 18.232 19.143 20.101 21.106 22.161 23.269 24.432Non-Domestic 22.23 23.34 24.34 25.34 26.34 27.34 28.34 29.757 31.245 32.807 34.447 36.17 37.978 39.877 41.871 43.965 46.163 48.471 50.895 53.439 56.111


DSCR 1.1 2.7 4.4 1.5 1 1.1 1.1 1.3 1.8 2 1.8 1.6 1.7 2.1 2.1 2.4 2.3 2.6 2.9 2 1.9



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314. Therefore it may be concluded that with focussed and adequate DWASA

management actions to improve the revenues and to control the necessary expenditures,

DWASA has in principle the capacity to absorb the expected strong operating and financial

cost increases which will result from the necessary future change from ground water sources

to surface water sources.

C. Gender & Poverty

315. The result of our surveys and investigations into the integration into this project of

gender mainstreaming is contained in Appendix 12: Gender Action Plan.

D. Project Financial and Economic Analysis

1. Project Financial Analysis

Initially the PPTA team developed a project finance model with private equity financing for the Intake and Water Treatment Plant components. The Project Finance model consists of two components: (i) privately financed component that includes the Intake and Water Treatment Plant components of the project and (ii) publicly financed component that includes transmission lines, infrastructures and others. The two components are combined under a separate worksheet to arrive at the assessment for the total project. The analysis based on several assumptions indicates the requirement of a treated water price of 14.9 BDT/m3 in order to maintain an Equity IRR of 25% and a DSCR above 1.2. Under various scenarios and assumptions the model indicates that at a price of 8 BDT/ m3 the minimum DSCR is well below 1 and Equity IRR drops to 10.02%. This treated water price levels are reached by incorporating a viability gap funding of 20% of total capital costs. The outputs of the model are in Table.

Table 28: PE Model Outputs

With 20% Capital

Grant (14.7 BDT/m3)

Without Capital

Grant (16.5 BDT/m3)

Without Intake, no Capital Grant (8 BDT/m3)

Total Project Cost (BDT million) 12,636 12,837 12,636

Min DSCR 1.16 0.93 0.31

Project IRR 20.65% 23.47% 8.89%

Equity IRR 25.01% 25.11% 10.02%

316. PE Model– Sensitivity. Table 29records the sensitivity of the cases modeled to

various factors. Sensitivity was tested for changes in key parameters; e.g., price (±20%),

capital cost (±10%), O&M costs (±10%), capital grant (0-30%), interest rates (10-20%), and

D/E (1-2.3).



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Table 29: PE Model Sensitivity

Case No.

Sensitivity Cases

Total Project Cost (BDT

million)

Min DSCR

TEST DSCR>

1 Project IRR Equity IRR

1 Base 12636 1.16 YES 20.65% 25.01%

2 Lower Capital Cost 11372 1.31 YES 22.37% 27.36%

3 Higher Capital Cost 13899 1.04 NO 19.17% 23.01%

4 Lower Price 12636 0.80 NO 16.21% 19.10%

5 Higher Price 12636 1.53 YES 24.60% 30.46%

6 Lower Capital & O&M Costs

11372 1.43 YES 23.42% 28.85%

7 Higher Capital & O&M Costs

13899 1.00 NO 18.72% 22.39%

8 No Capital Grant 12837 0.76 NO 20.65% 21.47%

9 Higher Capital Grant 12538 1.56 YES 20.65% 26.98%

10 Lower Interest Rate 12362 1.43 YES 20.65% 26.43%

11 Higher Interest Rate 12910 0.97 NO 20.65% 23.66%

12 Lower D/E Ratio 12345 1.59 YES 20.65% 24.45%

13 Higher D/E Ratio 12940 0.91 NO 20.65% 25.72%

14 Combined Negative 14045 0.45 NO 14.43% 13.04%

15 Combined Positive 11242 2.24 YES 27.55% 41.14%

The model is most sensitive to prices. Currently DWASA has the mandate to independently

increase service fees by 5% annually. Given a 7-8% inflation rate p.a., the real cost of water

is actually decreasing. Under the circumstances, DWASA needs to accommodate higher

price increases in order to sustain and expand its operations that are not being considered at

this stage. The feasibility of the PPP hence largely depends on the ability of DWASA to

charge higher tariffs as well as the availability of viability gap funding.

317. Under the circumstances that substantial tariff rate increases whether initially or after

a few years and debt restructuring of DWASA loan by the Ministry of Finance is not

forthcoming the private equity project financing is not feasible option since a private equity

investment will not be viable. An alternative PPP scheme that of Design-Build-Operate

(DBO) is analyzed as an option to private sector participation in the project.

Operating Gandharbpur WTP under a Design-Build-Operate scheme

318. The project financial model under a DBO scheme assumes that the project capital

costs are 100% debt financed by loans from IFIs and developing partners. It assumes that

the design, supervision, and operations and maintenance of the plant and transmission lines

are outsourced under a performance based DBO contract. In addition, we assume that the

required maintenance capital costs are borne by the contracted party and financed from its

cash reserves. We also assume that in the DBO contract, an additional three international



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staff will be employed full time at a cost of USD 24,000 per month per person. Full list of

assumptions are produced in Appendix 10. The financing plan is shown in Table 30, while

the detailed capital costs are presented in Appendix 6.

Table 30: Financing Plan ($ Million)

319.

Source Total %

ADB Loans 220.0 37.4

AFD Loans 100.0 17.0

EIB Loans 100.0 17.0

Government 167.8 28.5

Total 587.8 100.0

Financial Results

The weighted cost of capital (WACC) is 3.5% estimated based on the GoB on lending rate of

5% to DWASA. However, based on the actual rates of the loans from the financiers the

WACC is 2.24% as shown below.

Table 31: Weighted Average Cost of Capital (Actual Rates)

Value Rate

ADB 220000 2.00%

AFD 100000 3.07%

EIB 100000 2.98%

GoB 167765 5%

Return on Debt (Weighted) 3.21%

WACC 2.24%

320. Four different pricing scenarios are presented below: (i) business-as-usual scenario,

which is just 5% per annum increase, (ii) increase in price of 1 taka per year until 2018, (iii)

base case with initial price of 14 followed by 10% price increase per annum, (iv) initial high

increase in tariff followed by gradual increase (5%). Table 32 shows the results of the

financial analysis for the project under the four scenarios.

Table 32: DBO Model Outputs

Scenario

(i)

Scenario

(ii)

Scenario

(iii)

Scenario

(iv) –

Base

Initial tariff (BDT/m3) 9.37 12.34 12.30 20.55



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Tariff Increase 5% 10.0% 10.0% 5%

Project IRR -9.84% 3.54% 3.51% 3.50%

Operating Expense Ratio 75.70% 35.56% 35.67% 34.52%

The above table shows different combinations of initial tariff and subsequent annual tariff

increases needed. In scenario (i), in which the current 5% annual tariff increase persists

until 2018 and beyond, the project is not viable as the project IRR is negative.

Scenario (ii) includes an increase in price of 1 taka per year until 2018, as suggested by the

MD of DWASA, followed by subsequent increased a 10% p.a. The project IRR exceeds

WACC in this scenario and this is a viable option.

Scenario (iii), our base case, requires an initial tariff of 12.30 BDT/m3 and subsequent

increases at 10% p.a. This initial tariff can be achieved by increasing the tariff at 11%

annually from 2013 to 2018. In the base scenario the operating expense ratio is at a 35.67%.

Scenario (iv) depicts that a very high initial price of 20.55 BDT/m3 is needed if DWASA

wants to maintain annual tariff increase at 5% and still exceed the WACC of 3.5%.

Hypothetically, eliminating all capital costs, the project’s net cashflows yield an NPV of BDT

55,052 Million using a WACC of 3.5%. Operating expenses are BDT 5.78/m3.

321. Two main issues emerge from the financial analysis. Both the Private Equity and

DBO options require substantial increases in DWASA’s present level of tariff. While the DBO

option requires a lower tariff than the PE option, in both cases it is crucial to ensure that

DWASA is committed to adequately increase the level of tariff required in order to ensure the

financial viability of the project. Debt service coverage is a major point of sensitivity for the

project in either of the two options. A revision of loan conditions or restructuring of debt

repayment structure may become essential.

2. Economic Analysis

322. Methodology and Assumptions. Economic analyses have been conducted in

accordance with the ADB’s Guidelines for the Economic Analysis of Projects (1997) and the

Guidelines for the Economic Analysis of Water Supply Projects (March 1998).

323. The following approach and assumptions have been used in the analysis:

Without Project Scenario

In order to assess the existing situation (without project) the following estimations have been

carried out.

• The total population has been estimated from the 2011 census data as 2.5 million and growing by 3% each year

• Annual production of water has been obtained from the MIS report of end June 2012. The only figures reported for the four zones are volume of water supplied to DWASA



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connection points. The production volume is estimated accounting for NRWs. The total production is estimated as 566 MLD for the four zones.

• MLD reduces in “without” project scenario because it is assumed without project the production of water will fall due to the reduction of groundwater abstraction. Production capacity has been assumed to drop gradually and stand at around 350 MLD during the final year of the analysis.

• Non Revenue Water has been included in line with the water balance analysis. DWASA has an ongoing pipe rehabilitation and strengthening project covering most of its distribution system and planned reduction in NRW by DAWASA has been reflected in the water balance analysis.

• Number of domestic and non-domestic connections have been derived from MIS reports (2012)

• 153 Lcd has been assumed to be unchanged throughout the analysis period.

• Water tariff increases are at the current level of 5% per year. The current tariff is BDT 6.99/m3 for domestic water and 23/m3 for non-domestic water.

With Project Scenario

• Population figure and growth remains same as in “without” project case.

• Treated surface water is intended to replace ground water with the reduction calculated to be 150 MLD. During the period the Ghandarbpur WTP become operational the production capacity is estimated to be 416 from the current ground water source and 500 from the WTP.

• It is assumed that the excess capacity of water will be used in other zones of DWASA and indicated service coverage drops below 100% with population growth

• Lpcd drops in accordance with the water balance analysis

• Reduction in NRW is similar to without project scenario because of the ongoing program of DWASA

• The ratio of domestic to non-domestic consumption is kept unchanged throughout the analysis period

324. Additionally we have used the following assumptions:

(i) All prices are expressed in 2012 prices and economic analysis is conducted at 2012

constant price. A simple 15 year time series trend analysis of inflation reflects complex

economic cycle variability and it is not possible to prepare a forecast of inflation.

Instead a qualitative value has been selected and kept constant throughout the

analysis period.

(ii) Exchange rate assumed is Taka 80 per US$1.00

(iii) Economic prices of capital works and annual operation and maintenance are

calculated from the financial cost estimates, adjusted to allow for transfer payments

and to correct for any other market distortions;



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(iv) Price contingencies and interest during construction (as a result of any debt financing)

are excluded in the calculation of economic internal rate of return (EIRR) but physical

contingencies are included because they represent real consumption of resources;

(v) Taxes and duties are excluded because they represent transfer payments;

(vi) All costs are valued using the domestic price numeraire; tradable inputs, net of duties

and taxes, are adjusted by the shadow exchange rate factor of 1.13 while non-tradable

inputs (except for unskilled labor), net of duties and taxes, are adjusted by a

conversion factor of 0.9; unskilled labor is adjusted by a conversion factor of 0.7 of the

market wage rate to estimate the shadow wage rate;65

(vii) Consumers benefits and satisfaction is derived from better quality water and regular

supply of water compared to the without project scenario. Consumers will save costs

from not boiling water, from less expenditures in health care (assumed to be 3% of

annual expenditures on health), and resource cost savings by reducing costs of

alternative water supply

(viii) The economic opportunity cost of capital (EOCC) is assumed at 12% in real terms. The

purpose of the economic analysis is to determine if the project’s EIRR exceeds the

EOCC, in real terms. If the component’s EIRR exceeds the EOCC, it can be concluded

that the component is economically viable; and

(ix) Useful economic life of the project is assumed to be 50 years with zero residual value.

325. Sensitivity analyses have been undertaken in order to test the robustness of the

economic results to adverse changes in conditions. The following adverse changes have

been analysed:

(i) A capital cost overrun of 10%;

(ii) An increase in the O&M cost by 10%;

(iii) A reduction in the benefits by 10%; and

(iv) Project component benefits delayed by one year.

Results. The Gandharbpur Water Treatment Plant will supply bulk water to DWASA for

distribution to the four zones in Uttara, Gulshan, Badda, and Mirpur. Major portions of water

currently supplied to these areas are extracted ground water. The project will mitigate the

current depletion of groundwater resources by reducing the amount of water being supplied

from Gandharbpur. The principal benefits that would be derived are a sustainable water

supply for the future to a growing population including improved accessibility, convenience

and reliability of water supply, as well as increased quantities of water and improved water

quality. The benefits of the project component therefore have been quantified in terms of:

• Resource cost savings associated with the replacement of non-incremental water

consumed previously obtained from non-piped alternative sources with those from the

piped water supply system, valued in terms of the average supply price from existing

non-piped water sources estimated at about BDT 13/m3;

65

Conversion factors for economic shadow pricing are based on recently approved ADB project “City region

Development (2010) in Bangladesh.



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• Access to water supply, reflected in the incremental water consumed in the four project

zones and in other DWASA zones, valued in terms of the price of water of existing

domestic and non-domestic water consumptions; per capita water consumption

decreases each year to reach 125 lpcd in year 2040, based on the water balance

analysis;

• Improved water quality will eradicate the need to boil water. Cost savings associated with

it is valued in terms of the consumption of water and costs foregone for boiling it;

• Health benefits likely to occur have been assessed as 3% reduction of household health

expenditures. Total household expenditures have been obtained from the household survey

undertaken by the PPTA team.

Sustainability

326. Based on the above assumptions, a 50-year economic cash flow has been prepared

for the project indicating incremental costs and benefits, and the net incremental cash flow

from which economic internal rates of return (EIRRs) have been estimated. All costs and

benefits are considered to be incremental. The project is found to be economically viable

under the base case scenario66 and also under various adverse changes in conditions. The

proposed component is most sensitive to delay in project benefits and reduction in benefits.

In all cases the EIRR remains close to or above the EOCC of 12%. Switching values indicate

the percentage by which benefits would need to decline or costs increase to reduce the

EIRR after allowing for project costs to the assumed cut-off rate of 12% below which the

project is not considered economically viable.

Table 32: EIRR and Sensitivity Analyses – Gandhabpur Water Treatment Plant

Scenario NPV / 1

(‘000 Taka) EIRR (%) SI / 2 SV / 3

%

Change

Base Case 37,369,572 22.48%

10% Increase in Capital Costs 33,481,121 21.34% 17.79 6% 10%

10% Increase in O&M Costs 33,965,831 20.07% 18.39 5% 10%

10% Decrease in Benefits 29,052,232 20.83% 17.35 6% 10%

Project Benefits Delayed by One Year 28,059,285 19.73% 16.45 6% 10% 1/ NPV = Net Present Value discounted at EOCC

2/ SI = Sensitivity Indicator (ratio of % change in EIRR above the cut-off rate of EOCC to % change in a variable)

3/ SV = Switching Value (% change in a variable to reduce the EIRR to the cut-off rate of EOCC)

Source: Consultant’s calculation

The project finances are assured and adequately reflect the project expenditure (both capital

and operation) requirements. Over 28% of the project costs will be met from the budget of

the Government. Past experiences and commitment of the GOB for this project ensures that

these funds will be made available as required and without delays. Detailed cost of the

project and financing plan is outlined in the financial analysis section.

66

The base case assumes capital cost BDT 39,580,174 thousand, existing O&M cost per m3 = BDT 8.3,

additional O&M cost from project finance model, current cost per m3 of untreated water = BDT 12, cost per m

3 of

boiling water = BDT 3.92



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The financial IRR is around 10% and is above the WACC of 3.5% estimated from on-lending

rates of 5% to DWASA by the GOB. The revenue derived from treated water is able to

recover all operational expenditures. With increases in revenue some 35% to 40% operating

expenses will be met from the project beneficiaries.

The project aims to ensure its contribution to sustainable water resource management in

Bangladesh. Switching from groundwater to surface water accomplishes that by maintaining

a balanced groundwater abstraction level. This will significantly contribute to the

environmental management and sustainability in Bangladesh. Sourcing surface water from

Meghna River, where the water is of reasonable good quality, will also require over the long-

term to maintain the quality of water. The water quality monitoring plan and implementation

of it will ensure that the quality of water in Meghna will be maintained.

Distribution Analysis

327. A distribution analysis to determine to what extent the poor benefit from the project is

difficult to undertake mainly because disaggregated data on household income for the four

zones is not available. DWASA also does not maintain any disaggregated data on end

users. However, utilizing the household survey carried out by the PPTA some qualitative

observations with strong assumptions can be made and they are described below.

The benefits of the projects as outlined in the economic analysis all accrue to the poor. The

survey indicates that 14% of the sample households are unconnected to piped water and

they are the poorest decile of the population with an average household monthly income of

BDT 6,282.75. Currently these households pay BDT 20.12/m3 for water obtained from

vendors. Significant resource cost savings are obtained by the poor being connected to and

accessing water from the project. Similarly, benefits from health cost savings and increased

consumption of water can be estimated assuming 14% of the beneficiaries are poor67. The

estimates from the above provide a weighted share of net benefit to the poor being 20%.

There are other indirect benefits arising from the one-off employment as skilled and semi-

skilled workers engaged in the construction of civil works, access roads, and pipelines. As is

the practice in Bangladesh it is expected that many laborer days will be utilized from the

poorer segment of the population for those works. Without further data and numbers on the

labor requirements no specific results can be presented.

3. Willingness-to-Pay (wtp)

328. Introduction. This willingness-to-pay study was conducted as part of the Khilkhet

WTP Plant Project. The project aims at improving the water supply services and ensuring

future access to water in Dhaka City through establishing a surface water treatment plant.

329. Dhaka is the largest city in Bangladesh with a population of approximately 12 million.

According to our household survey, 41% of the surveyed households perceived the supplied

water to be of poor quality, and 21% rated the service standards very poor or poor.

Evidently, there is room for improvement in the current quality of supplied water.

67

The incidences of poverty in urban population in the Dhaka division in HIES 2010 (Chapter 6, Table 6.2) is 18%.



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330. This study was undertaken partly to understand the benefits of improved water

services. Since there is no existing market for improved water services, direct questioning is

the only way to estimate the benefits. Willingness-to-pay (wtp) values provide crucial

information for assessing economic viability of projects, setting affordable tariff, and

assessing financial sustainability. The current water tariff in Dhaka is a very low rate of

BDT6.99/m3 for domestic connections. This low tariff does not meet the costs of operation

and maintenance and therefore a study to understand consumer willingness to pay is

necessary to learn whether tariff rates can be increased. ADB and current research

practices68 recommend undertaking contingent valuation studies in preparation of water

supply projects to understand the consumer preference and design the projects aligning to

consumer needs.

331. Survey Methodology. A household survey covering 1,041 households in the

Gulshan, Badda, Uttara, and Mirpir areas was conducted during November and December

2012. Of the 1041 households sampled, 1,000 were connected to the network, reflecting the

strong network coverage of DWASA in the selected areas.

332. A stratified random sampling procedure was used to develop the sampling frame.

The number of samples drawn from each of the four target areas and all neighborhoods

(mohallas) within those areas were proportionate to the total number of households in those

areas as indicated by the preliminary results of the 2011 population and household census.

Mohallas were randomly selected. Details of selected mohallas are provided in Appendix 14

- Annex 2. Sample households were chosen by taking the 5th building/house along streets in

chosen mohallas. In case the original sample household was unwilling or unavailable to

complete the survey, enumerators were instructed to replace the sample with the house

immediately to the right. In the absence of a complete list of households together with

addresses, this was the only pragmatic way to select a representative sample.

333. Questions and multiple-choice responses were prepared and refined through review

and pre-testing. About 100 households were interviewed in pre-tests. Based on the results of

pre-tests, some questions were rephrased, and the initial bid distribution was refined. The

survey includes household characteristics (income, expenditures, employment status, and

others), use of various sources of water (consumption, cost, perception on quality and cost),

and contingency valuation of piped water services. The enumerators were deployed after

training and supervised by field supervisors. The enumerators were trained particularly to

propose contingency questions in a proper manner. Survey design, enumerator training, and

survey implementation closely followed the good practices recommended in Whittington

(2002)69, barring restrictions from time constraints.

334. During the survey, households were asked whether they were willing to continue to

be connected to the network by paying a certain monthly charge and a one-time connection

cost for those not currently connected. The monthly charge and the connection cost (called

bid price) were randomly assigned to each household covered under the survey. The

68

ADB Economics and Research Department (ERD) Technical Notes 23 (Gunatilake et al., 2007) 69

Whittington, D., 2002, ‘Improving the Performance of Contingent Valuation Studies in Developing Countries,

Environmental and Resource Economics 22: 323–367, 2002



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monthly charge was 100, 200, 300, 400, 500, or 800 BDT70; the connection cost was

BDT2,000, 4,000, or 6,000. The respondents were informed about the contingent scenario:

by paying these charges, they will have continuous and sufficient water supply with sufficient

pressure, and the water will be of good quality, potable without boiling or any other

treatment. The full English version of the questionnaire is attached in Appendix 14 - Annex

371.

335. It is important that respondents were asked whether they would remain connected to

the improved services by paying the proposed charges, rather than asking an open-ended

question such as how much they would pay for the proposed services. Closed-ended or

dichotomous choice questions have been the preferred form of elicitation question

(Gunatilake et al, 2007)72. This is because answering an open-ended question on a new

commodity requires a higher level of cognitive demand on the part of respondents.

336. Households without a connection with the network were asked whether they would

choose to connect to the network by paying the connection fee and monthly charges. The

following sections focus on analysis of households which have a connection, since over 96%

of the households in the surveyed areas were connected to the DWASA network.

337. Model Estimation. Although easier for respondents to answer than open-ended

questions, a closed-ended question does not directly reveal the respondent’s wtp. The mean

wtp values of respondents should be estimated using econometric models.

338. Our study focused exclusively on monthly charge and used a conventional wtp

model. Based on a Probit model, 1/σ and β/σ were estimated, which then identifies β and σ.

With the estimated β, willingness to pay can be estimated for each household by

wtp = exp(Xβ)

where X is a matrix of explanatory variables and β a matrix of their coefficients

Our wtp estimation is given by:

wtp=exp(1.772 + 0.370*Log(Total Expenditure) + 0.020*Years education)

Table 33: Estimated coefficients

β Wald p-value

Bid Price73 -3.074 217.969 0.000 Household Expenditure 1.137 47.510 0.000 Years of Education of Household Head 0.061 9.749 0.002 Constant 5.448 9.190 0.002

70

The level of the bid price was chosen based on the current cost of water and such that most respondents answer positively to the lower offered bid price, and negatively to the highest offered price. Suitability of the bids was tested during the pretesting and a bid level of BDT800 was added.

71 The survey instrument was translated to Bangla and the survey was conducted in Bangla.

72 Gunatilake, H., Yang, J., Pattanayak, S., and Choe, K., 2007, ‘Good Practices for Estimating Reliable

Willingness-to-Pay Values in the Water Supply and Sanitation Sector’, ERD TECHNICAL NOTE Series No. 23

73 The transformed bid price equals (1) the original bid price when the respondent would pay a higher amount to stay connected or (2) the original bid price plus 100 Taka when the respondent declares that he would not pay more than the original bid price to keep connected. We assume that the respondent will disconnect when he declares that the original bid price is his maximum price to be connected and this original bid price is increased in 100 Taka.



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339. Table 38 summarizes the estimated results of the model. Attributes of households,

which were found statistically significant at the 5% confidence level, are household

expenditure, and years of education of household head. These variables have the expected

signs. Statistical significance and expected signs indicated the construct validity of the

elicitation question; i.e., that the respondents have understood the questions and answered

truthfully. The willingness to pay of households rises as households become richer. More

educated household heads are also ready to pay higher charges for water.

Figure 11: Expenditure vs Reported Problems

340. Dummy variables for perception, such as those indicating problems with pressure,

color, dirt, and iron were tested but found to be not very significant. Figure 10 shows that in

each decile of income, the distribution of the wtp is quite similar in the cases in which

problems with turbidity are reported to those in which none are reported. The same holds

true for other problems, such as odor, cleanliness, and pressure adequacy. Moreover, most

of the problems with water appear in those households with lower income. Consequently,

once the effect of the income is discounted in the Probit model, the water quality variables

do not modify the wtp of the respondents.

341. The direct relation between the WTP and total expenditure is clearly represented in

the box-plot graph in Figure 11 using deciles of total expenditure. The relation between wtp

and education is shown in Figure 12.



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Figure 12: Deciles of household expenditure versus wtp

Figure 13: Years of education versus willingness to pay

342. The wtp is estimated for each household with the coefficients obtained in the

regression. wtp has minimum values of 139.67 Taka and maximum value of 775.88 Taka,

with an average of 377.32 Taka and a standard deviation of 99.14. The median of the wtp is

368.89 Taka.

343. Consumer Demand Analysis - Flat rate (BDT per month). The aggregated

demand curve is presented in Figure 14 with the following results:



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(i) All the households keep connected until the price per month reaches 200 Taka.

(ii) To analyze the viability of a change in the monthly price of water connection

on poor households, we apply the concept of relative poverty. We also

consider the total expenditure of the household as a proxy variable for the

income level. Under this approach, we define as ‘poor’ those 20% of the

households in our survey with the lowest monthly expenditure (households

corresponding to deciles 1 and 2 as defined in the previous section). In

absolute figures, a household is considered poor when its total monthly

expenditure is lower or equal to 21,000 Taka.

Figure 14: Aggregate Demand

344. The graphs Figure 15 present the comparison of the aggregated demand curves for

the 20% of the households with the lowest expenditure level (poor households) and the 80%

of the households with the largest expenditure (rich households). All the households, no

matter what their expenditure levels are, keep connected until the price reaches 200 Taka

per month. No rich household would disconnect until the price rises to 300 Taka. At a

monthly price slightly higher than 300 Taka (328 Taka per month), no poor household keeps

connected. At this price, 84.5% of the rich households would maintain their connection.



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Figure 15: Demand for Water: Poorest and richest households

345. To complete the analysis of the viability for poor households, Table 39 and the graph

in Figure 16 show the evolution of the willingness to pay in terms of the household

expenditure:

Decile

expenditure

Median Average Standard

Deviation

1 (Poorest) 216.46 216.67 49.68

2 279.71 280.3 29.55

3 316.08 316.89 26.76

4 340.87 346.15 24.54

5 357.97 358.96 31.73

6 398.49 386.84 31.08

7 402.75 396.88 36.37

8 442.41 431.52 28.19

9 462.59 457.17 41.13

10 (Richest) 569.49 577.69 76.05

Total 368.89 377.32 99.14

Table 34: Willingness to Pay by Expenditure (Income) Category



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Figure 16: Median WTP by expenditure category

346. Volumetric Price. Apartments in our four areas of DWASA (and in major parts of

Dhaka City) have a single metered connection to the building and households are unable to

measure how much water is actually being consumed by each. A flat rate is charged to the

households by splitting the total water consumed in the building. The survey thus failed to

obtain direct information of the willingness to pay in terms of Taka per cubic meter. However,

the available data do provide some indirect information on this issue.

347. Relation between expenditure and consumption. The first step to transform the

flat rate wtp into a wtp in terms of Taka per cubic meter is the analysis of the relation

between expenditure and consumption. The following graph shows this relation (after the

elimination of the consumption outliers):

Figure 17: Water consumption by expenditure



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348. The existence of a direct relation between these two variables is confirmed by the

rejection of the null hypothesis of equality of the means of the consumption74 among the

different deciles of expenditure by a one-way ANOVA statistical test. Table 35shows the

mean and median of water consumption among expenditure deciles:

Table 35: Water consumption and expenditure

Decile expenditure

Median

m3/mo

Average

m3/mo

1 20.0 27.7

2 20.0 26.2

3 25.0 27.8

4 29.0 35.9

5 35.0 64.8

6 35.0 42.6

7 33.0 43.8

8 39.0 44.8

9 42.5 52.1

10 54.0 82.0

Total 33.0 44.6

349. The flat tariff wtp is transformed into a unitary price wtp dividing the first one by the

median consumption of the corresponding expenditure decile. For example, if an interviewee

in decile 5 is able to pay a maximum price of 350 Taka per month and the median

consumption of decile 5 is 35 cubic meters per month, we assume that the maximum

amount that a person is willing to pay for water is 350 / 35 = 10 Taka per cubic meter. In this

instance we are actually assuming that the demand of water (number of cubic meters per

month) is completely inelastic and that the water tariff is established through a constant

unitary price for each cubic meter that is consumed by the household, without any other type

of fixed payment (the connection rate is zero).

350. This assumption is unrealistic and may distort (and actually does as discussed

below) the estimation of the wtp for the richest households exhibiting large water

consumption (average consumption = 82 cubic meters in decile 10). These households

would rationalize and reduce their consumption as a reaction to a unitary tariff increment

before getting disconnected. Notice that the assumption of inelastic water demand will have

a lighter impact on the poorest households that have already adjusted their consumption.

Following the above methodology, the aggregated demand curve for all the households and

the poor households is presented in Figure 20 and Error! Reference source not found..

74

The one-way ANOVA have been performed with the logarithm of the consumption that satisfies the requirement

of normality. The p-value of this test is 0.000.



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Figure 18: Water demand with a volumetric rate

351. As discussed, a distortion of the demand curve appears when wtp is estimated with

this methodology and the 20% poorest and the 80% richest households are considered

separately. For prices over BDT10/m3, the assumption of inelastic demand makes the

willingness to pay of the richest households lower than that of the poorest ones.



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Figure 19: Aggregated Water Demand

Figure 20: Aggregate water demand with a volumetric rate

352. Figure 20 is a transformation of the demand curve for monthly rates with a change of

scale (the price per month is divided by the mean consumption of 33.0 cubic meters per

month. As an alternative approach to deal with this problem, we could estimate a new

demand curve in terms of a unitary wtp obtained as the quotient between the total wtp per

month and the mean consumption of water of all the households. The result for the richest

and poorest households is presented in Figure 20.



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353. Summary of Key Findings and Conclusions. This contingent valuation study was

undertaken following the good practices recommended by ADB’s Economics and Research

Department (ERD) Technical Note 23 (Gunatilake et al. 2007). The survey covered 1,000

households and was carefully conducted to ensure sound sampling and measures to avoid

the potential biases of contingent valuation studies. The regression results verify that the

respondents understood the wtp-eliciting questions and provided reasonable responses. The

study results show that perceived benefits by households of the improved water services are

large enough to justify the project costs. Further assessments are needed to determine

whether the required tariff increases are otherwise viable. The following conclusions can be

drawn:

(i) Of the 1041 sampled households, 1,000 were connected to the network,

reflecting the strong network coverage of DWASA in the selected areas

(ii) Willingness to pay has a minimum value of 139.67 Taka/month and a

maximum value of 775.88 Taka/month, with an average of 377.32

Taka/month and a standard deviation of 99.14.

(iii) The distribution of the estimated WTP is positively skewed and the median

value is 368.89 Taka/month, lower than the mean.

(iv) There is a strong correlation between household expenditure (proxy for

income) and willingness to pay. Similarly, higher education is strongly

correlated with willingness to pay higher fees for improved water services,

such as better water quality and regular water supply.

(v) Monthly expenses per category of income are:

(a) Low income households (<28,200 Taka/Month) spend 184 Taka/month.

(b) Medium income households (>28,200) and (<44,200 Taka/month)

spend 260 Taka/month

(c) High income households (>44,200 taka/month) spend 352 Taka/month.

(vi) In comparison, the average willingness to pay is:

(a) 280.3 Taka/month for the 2nd income decile

(b) 358.96 Taka/month for the 5th income decile

(c) 431.52 Taka/month for the 8th income decile

(vii) In each of the income group, the willingness to pay is substantially higher

than the current monthly expense. This indicates that substantial tariff

increases are economically viable. Project financial and economic analyses

indicate that with the current low tariff, the project is not feasible financially

with a negative FIRR under different scenarios. The economic analysis,

however, indicates that the incremental benefits outweigh the incremental

costs and the EIRR is above 12%; i.e., the project is economically feasible.

(viii) Our demand analysis indicates that as long as the monthly payment for water

consumed does not exceed 200 Taka, no poor household will disconnect.

The average willingness-to-pay is BDT 377.32/m3. All households keep



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connected so long the monthly expenditure does not exceed 200 BDT

(equivalent to BDT 6.06/m3), after which point, the poorest 20% of the

households start to disconnect. At a price of 328 BDT per month (equivalent

to a tariff of 9.94/m3), no poor household keep connected. At this price, 84.5%

of the remaining households maintain their connection.

(ix) The regression results verify that the respondents understood the wtp-eliciting

questions and provided reasonable responses. The study results show that

perceived benefits by households for improved water services are large

enough to justify the project costs.

354. The proposed component is found to be economically viable under the base case

scenario75 and also under various adverse changes in conditions. The proposed component

is most sensitive to delay in project benefits and reduction in benefits. In all cases the EIRR

remains above the EOCC of 12%.

4. Contract Packaging

If Saidabad is built, the DBO contractor 'A' for the intake + WTP could be monitored for

performance by a bulk raw water meter at the Sejan Juice factory, into the pipeline built by

another D&B contractor 'B'. DWASA will then be responsible for running the system from

Sejan Juice Factory to the DND box culvert.

Table 36: Project Contract Packaging

5. Procurement Plan

This is presented in Section III F

75

The base case assumes capital cost BDT 48,973,890 million, existing O&M cost per m3 = BDT 8.3, additional

O&M cost from project finance model, cost per m3 of current untreated water = BDT 10, cost per m

3 of boiling

water = BDT 3.99

C PROJECT Contract Packaging

Contract Package

Type1 DBO 284,992,865 69,805,734

2 D&B 102,158,317 29,791,239

3 D&B 64,890,598 19,913,443

2000 Mld Bisnondi Intake + river training works +

1000 Mld pump station + 2 raw water pipes (17 km +

22 km), in same trench + 250m of twin pipe bridges,

to Gandharbpur + 500 Mld WTP. (but only operate 1

pipe).

2 m dia. treated water pipeline 13 km from

Gandharbpur WTP to Dhaka city injection point + 21

km of buried network reinforcement pipes within

Dhaka 1 m to 2 m dia. + 650m of pipe bridges.

2.2 m dia. raw water pipeline 13 km from Sejan Juice

Factory, buried along Dhaka - Sylhet highway to

culvert near Saidabad WTP + 200m of pipe bridges,

+ Duties

+ taxes $

Contract

Value $



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Packages 2 and 3 can both be split conveniently into two smaller D&B packages.

More packages can lead to faster construction but usually create more problems, requiring

more management and administration.

If split, Package 3 could be:

1. Sejan Juice factory to the Sitalkhya River.

2. From Sitalkhya River to the Saidabad box culvert inlet.

The pipe laying conditions for these 2 are not very different – along usy highway verges with

a lot of ponds / wide stagnant drains that need access tracks to be built within them for

access for excavation plant and construction.

If split, Package 2 could be:

3. The straight forward rural section from Gandharbpur to the injection point

near American Embassy all 2m dia. But including some long river bridges.

4. The more difficult under-asphalt road sections of network reinforcement within

urban Dhaka, which require traffic management and very different

construction methods. 1m to 1.8m dia.



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E. Legal Framework

1. Introduction

355. The methodology for this final part of the legal delivery follows the structure set out in

the inception report, which was aligned to the TOR for this project.

356. The detailed PPP Analysis focuses on the preferred PPP options and address the

most important issues pertaining to a viable PPP, as those have been mentioned during the

implementation of this project and as those have become apparent during interviews,

workshops and based on the analytical review of the applicable legal and regulatory

framework. In parallel, this more detailed analysis will define the legal framework for the

PPP.

357. The final chapter defines additional requirements for the PPP project to be

implemented successfully, such as further technical assistance in the final preparation of the

transaction, support during the transaction and start up assistance.

358. The project has progressed since the Interim Report was issued, the following

amendments, or further developments to the findings, recommendations, etc of the Interim

Report, legally relevant can be stated, or indicated and therefore guide the detailed analysis:

(i) The investment required for the private sector and the repayment obligations would entail a higher tariff. If this higher tariff is deemed unaffordable, viability gap financing or another method needs to be identified to keep the tariffs at an affordable level. One version would be to reduce the investment burden for the private sector to the treatment plant only and to publicly finance the construction of the transmission and intake structures. To which extent this would affect the tariff is more a financial question. (ii) The ultimate decision on the affordability of a particular tariff is less a legal but more a political and social issue. Therefore, if the required (even if subsidized) tariff for a PPP (BOT) project is deemed unacceptable, another “fall back” option shall forthwith be considered; a publicly financed PPP project, where the private sector assumes the operational risk only; in other words, the construction and demand risks are with the public. (iii) This would be an engagement with the private sector in operating, maintaining and managing the PPP project. If this option is chosen, it would need to be brought in line with (one of) the mandatory elements of Article 3 of the Policy and Strategy for PPP, 2010. This could be done by shifting the entire operation and maintenance risk to the private sector, together with a capital contribution to the project as such. (iv) The originally second ranked PPP option in the Interim Report, the “Joint Venture type PPP”, shall no longer be considered. Experience shows the difficulties in establishing a level playing field between the public and private partners in a Joint Venture. There are not many positive examples in the wider region where this approach is deemed successful.



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359. To re-emphasize, and to provide a visual aid, the PPP BOT and the PPP O&M would

be structured as shown below. The first graph shows the privately financed Intake Facilities,

Water Treatment Plant and related facilities and the transmission lines from the Water Intake

to the Water Treatment Plant publicly financed. The second graph shows the entire

investment being publicly financed, with the private sector assuming only the operational

risk, with investments added (to be defined), not on the scale of large facilities though:

BOT PPP O&M PPP

2. Detailed PPP Analysis and PPP Framework

360. The interim report provided a comprehensive high level review of applicable laws and

regulations. This detailed PPP analysis addresses the most important issues specifically. In

each chapter below, the applicability of the issues pertaining to the (i) BOT PPP option and

the (ii) O&M PPP option is indicated. The chapter concludes with a table summarizing the

issues addressed. The important issues pertain to the following:

(i) Delegation of water abstraction rights to the PPP (ii) Commercial security mechanism for private sector (iii) Ownership of assets (iv) Spatial planning (v) PPP Corporate Structure (vi) Expatriation of profits (vii) VAT regime

1.1. Water Abstraction Rights

361. Issue. Water abstraction rights are essential, as any significant abstraction of water

will affect others with entitlement to the water resource, both up and downstream. The

issuing of abstraction rights is a public act. Therefore, clarity is needed as to who issues

these abstraction rights and under which circumstances and also as to the future possibilities

to revoke, reduce, or increase any water abstraction entitlement.

362. In addition, the issue as to who will be entitled to abstract water will be important; this

could be the private PPP operator, or DWASA, who will pass on the water for “treatment”

and transmission to the operator and then takes it back at the delivery points. This is part of

any investor’s due diligence and upfront clarity of this issue is required. This would also be a

condition precedent to PPP contract effectiveness.

363. Analysis. Any abstraction of water requires a permit from the competent authorities;

this case concerns abstraction of river water. According to the National Water Policy of

Bangladesh, Chapter 4.3, the ownership of water vests not on any individual but on the

Transm.

pipeline

Supply to Dhaka

A

River

Water Intake Water Treat.’

O&M

Transm.

pipeline

Supply to Dhaka

A

River

Water Intake Water Treat.’

Construct O&M

Construct O&M

Take off



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State. The National Water Policy allows the Government to develop rules for water allocation

for the purpose of, inter alia, abstraction. However, no such unified rule has been developed

by the Government of Bangladesh to this date. Thus it would be the designated ministry of

the Government; i.e., Ministry of Water Resources, who would exercise the rights over river

water on behalf of the State, and can therefore grant abstraction rights. This is in line with

the Rules of Allocation of Business between Ministries as Amended vide S.R.O No. 231-

Law/2008-CD-4/5/2008-Rules, dated 24 July 2008, Ministry of Water Resources has

authority for regulation of rivers and river resources.

364. Although Bangladesh Water Development Board and local Water Supply &

Sewerage Authorities have been given the prerogative to abstract water under the

Bangladesh Water Development Board Act 2000 and the Water Supply and Sewerage

Authority Act 1996 respectively, there exists no law which empowers a third party to abstract

water from the rivers for any purpose.

365. Thus for the project company to have water abstraction rights, the Ministry of Water

Resources needs to be made a party to the original Concession Agreement and grant of

abstraction rights for a specific period of time and renewable upon application thereafter can

be made part of the concession. This way, even if the construction of the facilities takes

longer than anticipated, the abstraction rights can be renewed pursuant to the Concession

Agreement.

366. Recommendation. If and when a “project implementing steering committee” is

established, the Ministry for Water Resources (MWR) should definitely be a member. This is

to demonstrate the MWR commitment to the PPP project, conveying comfort to the potential

investors that the respective water abstraction permit will be issued to the implementing

consortium.

367. In addition, it should be considered to have the Ministry for Water Resources bound

into the PPP agreement, either as co-signatory, in which case there should be an

undertaking obliging the “public side” (as the public contractual parties could be defined) to

renew any permits and licenses when and to the extent required; alternatively, there could

even be a brief side agreement, a “Governmental Support Agreement” regulating issues

outside the direct scope of competencies of the parties to the agreement and their respective

functions.

1.2. Commercial security mechanism for private sector

368. Issue. This chapter concerns more the BOT type PPP since guarantees are for

protection and securing of investments. . The private sector investing into this PPP project

has a legitimate wish to secure payment for its provision of services. In other words, the

private investor consortium, with its lending banks in the background, will require a

guarantee mechanism accompanying the public payment obligation for the provision of the

output; i.e., the supply of treated water to the interconnector and then to the “owner”

DWASA.

369. It is at least questionable how traditional Operation and Management contracts could

classify as PPP projects, if there is little investment and therefore little risk burden shifted to

the private sector. However, if this option is chosen and in order to classify as a PPP under

the draft PPP law and the Strategy and Policy for PPP (2010) (PPP Policy), an investment

component can be woven into the PPP.



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370. Analysis. Operations and Management Contract as PPP. The first issue to analyze

pertains to the potential of having an “Operation and Management Contract” classifying as a

PPP. For this, one of the basic criteria of Article 4(a) of the PPP Policy will need to be met.

All these pertain to investment needs and requirements.

371. These five PPP entry points merit a brief discussion as to their suitability to serve as

a basis for an Operation and Management PPP contract. These are listed in Table 37below.

Table 37: PPP Entry Points

Lit. Provision text Comment

i. The implementation of the project is difficult with the financial resources or expertise of the government alone.

While this might be the case, an Operation and Management Contract will not render the required investments, so lit. i cannot be used.

ii. Private investment would increase the quality or level of service or reduce the time to implement compared to what the government could accomplish on its own.

This lit. ii might be a possible entry point for Operations and Management contracts, if a significant investment component can be tailored to the contract.

iii. There is an opportunity for competition, where possible, among prospective private investors, which may reduce the cost of providing a public service.

Not per se suitable, this provision is meant for sectors that are not a natural monopoly.

iv. Private investment in public service provides an opportunity for innovation.

Not suitable, since the investment would not lead to innovation.

v. There are no regulatory or legislative restrictions in taking private investment in the delivery of public service.

This would seem a “catch all” provisions, if none of the others (lit. i to vi) apply. But, it is an investment heavy provision and is therefore less suitable than lit. ii.

372. Following the table above, Article 4(a) lit. ii would appear to be the provisions most

suitable for the classification of an investment type Operation and Management PPP

contract. This requires further analysis. This provision requires:

Table 38: Requirements

Requirement Approach

Private investment […] Private investment could be defined as consisting of private know how and expertise, and, more closely to the nature and understanding of “investments” to invest an asset management plan, hard and software, etc into the PPP project; this is just an example, this scope could be widened to whatever is traditionally sourced but financed through the public in an Operations and Management Contract. This could even cover expansions of the networks, access to new water resources, etc. as long as an investment component can be defined, the requirement of “private investment” can be satisfied and therefore an Operation and Management Contract modeled around this.

[…] increase the quality or These points can be fulfilled, since a professional private



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Requirement Approach

level of service or reduce the time to implement […]

operator would, per se, be better placed to increase the quality of service delivery, and would do this, again, per se, more efficiently and therefore quicker than the public side.

[…] compared to what the government could accomplish on its own.

See above.

373. Guarantee. There are some options and combinations at hand.

(i) Standard sovereign guarantee (ii) Guarantee through the PPPTAF Fund (iii) Commercial payment guarantee (Escrow Account)

374. Sovereign Guarantee. A sovereign guarantee means the government guarantees

to the banks the repayment of the project debt raised by the investor consortium. While this

type of guarantee used to be a standard requirement, modern PPP structures no longer

revert to sovereign guarantees for a number of reasons, one being that it shifts risks back to

the public and is therefore not in line with modern understanding of PPP projects.

375. Guarantee through the PPPTA Fund. The PPP office has a PPPTA Fund

(PPPTAF) available to finance and support certain activities pertaining to PPP projects.

These can be found in Article 3 of the Guidelines for PPP Technical Assistance Financing,

2012. This article refers to activities “till signing of the contract”. This, per se, would exclude

any post signature support to a PPP project from the PPPTA Fund. However, Article 3

second paragraph mentions that the PPPTA Fund may also be used for activities as

stipulated in the PPP Policy 2010.

376. The PPP Policy 2010 offers an entry point for securing ongoing payment obligations

of the public side to a PPP. Article 10 of the Policy, last sentence reads: “The incentives may

be in the areas […] protection of return to the private investor”. This provision strongly

indicates that “the protection of private investors return” could be seen as an “activity” as

mentioned in Article 3 of the Guidelines for PPPTAF.

377. Since Article 3 of Annex 1 to the PPPTAF Guidelines lays out that the fund be

administered and used by the PPP Office. Therefore, a guarantee of the public payment

obligations can be almost certainly be covered by the PPPTA Fund. For this, close

involvement of the PPP office into this discussion is required in the transaction advisory

phase, when the PPP contracts will be drafted.

378. Escrow Account. An escrow account secures the public payment obligation to the

private consortium that is undisputed due for the provision of the services, the delivery of

treated water to the off-take, the interconnector.

379. This escrow account would be sourced by the public party to the PPP, most likely

DWASA, and would be a simple interest bearing current account. The private party could

only access this account if and to the extent a number of events (trigger events) have

occurred. These would be defined when the transaction documents are drafted, but

traditionally, the trigger events are:

(i) Services delivered, invoice/s issued



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(ii) Non-payment of undisputed (parts of) invoices (iii) Certain period of time (iv) Bank or escrow account manager (lawyer, accountant, etc) has confirmed the

trigger events

380. The private party could then access the escrow account and satisfy itself over an

amount equal to the invoice/s due and interest (if this will be foreseen). The questions

regarding the escrow account are:

(i) Initial funding (ii) Replenishment, when and who guarantees that the escrow account will be

replenished (iii) Duration

381. Initially, the escrow account would either be a multiple of monthly revenues of the

operator, or a lump sum. This would be a condition precedent to contract effectiveness for

the public party to the PPP. Once the escrow account drops under a certain percentage of

its original value, the public will be obliged to replenish it fully.

382. A letter of credit can back up the escrow account, in the event the public side is

unable to replenish it, or there could be a secondary guarantee from the PPPTAF Fund

(which, by nature, is a recurring fund).

383. The escrow account could be reduced in value over time, for example, if it has not

been used for a certain period, its overall value can also be reduced.

384. Recommendation. The establishment of an escrow account should be discussed

and established, conveying comfort to the private sector for the payment obligation of the

public party to the PPP. This escrow account should cover 3 to 6 months payment

obligations of the public side and would be a condition precedent for contract effectiveness

or a condition subsequent starting with the commercial operation date. The escrow account

will need to be replenished fully once it drops beyond a certain threshold, for example under

50% of its applicable (maximum) value. The PPPTAF Fund or a letter or credit would

guarantee the replenishment obligation of the public, ensuring the escrow account is a

sustainable security mechanism.

385. As to the fall back option of an Operations and Management Contract, with an

investment component, if the financial burden for the public through a PPP / BOT type

contract is deemed too high, and linked component, infrastructure and viability gap financing

cannot bridge this gap and reduce the public burden to an acceptable level, then an

Operation and Management Contract can be considered, with an integrated investment

component, allowing classification as a PPP and in due course all other benefits provided for

by the (draft) PPP Law, assuming it is signed into force in the near future. In the event the

PPP Law is not in force at the time of tendering this project, then the PPP Office would, in its

role to design PPP projects, allocate the benefits deemed appropriate into the PPP structure

(this can include tax breaks, etc.).

1.3. Ownership of assets



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386. Issue. Ownership of assets is an issue in many aspects. The owner of the assets

can use the assets as collateral with banks. Then, the owner can write the assets off. And,

the owner enjoys an absolutely protected constitutional right.

387. If the asset ownership remains with the public, then using these assets as collaterals

for project financing purposes is difficult. If the asset ownership is with the private party, then

financing might be easier, but (re)gaining ownership for the public can be difficult and

burdensome. The public could, in extreme cases, only revert to nationalization.

388. The question as to who, or which organization, institution, company holds which title

at different times and the associated regimes is important.

389. Analysis. The common law principle of fixtures and fittings stipulates that all assets

that are irreversibly connected with land will share the ownership of the land. This principle

can be effectively enforced by expressly defining fixtures that are irrevocably connected to

the land as part of the land asset in the Concession Agreement.

390. Therefore, any structures either buried in, or put onto the land, that cannot easily be

removed, without “reducing significantly” its value, will share the same ownership as does

the land. In other words, whoever owns the land will also have the title to these assets.

These are: houses, other buildings, assets submerged into the subsoil (such as pipelines,

cables, etc). Other assets are vehicles, machinery, computers, etc. etc.

391. An easy way of handling various assets is to classify assets along a number of

criteria. These criteria could include:

(i) Movable or immovable; (ii) Essential or non-essential for operations and maintenance; (iii) Privately or publicly owned; and (iv) New (book value) or old (written off).

392. Along these criteria, regimes can be introduced. For example, all essential assets are

to be in public ownership. This would include all structures built. Non-essential assets, such

as vehicles would be owned by the purchaser and this could be both, the public or private

side. Assets have a certain value and once written off will need replacement. But,

experience shows that not all assets are replaced once they are written off.

393. To illustrate this, there could be a movable asset, not essential, written off and

privately owned (a vehicle for example). At the end of term, the private sector can remove

this asset. There could be a movable, essential and also privately owned asset with a book

value attached; for example a turbine. This asset is needed and will therefore be subjected

to a “hand over” procedure at the end of term, against adequate compensation (book value).

394. There might be assets that are immovable, non-essential and written off where the

public has little interest in “receiving” it, for example a disused structure, pumping station,

dead-ended pipelines, etc. and there could be movable, non-essential and publicly owned

assets, for example some building and construction equipment and material.

395. Recommendation. Upon completion of the land acquisition, the land should be

given to DWASA, so that DWASA is the owner of the land and therefore becomes owner of

the immovable assets automatically.



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396. An asset transfer regime should be designed, where all essential assets, at the end

of term, are handed over to DWASA; compensation should be considered if the respective

assets are still in use and have a book-value. Otherwise, the private consortium will not

invest into the facilities in the last couple of years.

1.4. Spatial planning

397. Issue. The area where the water treatment plant and other structures and facilities

are to be built will require correct spatial planning permits. Without the appropriate spatial

planning, any building, excavation etc activity could be challenged. Therefore, the areas

where building and construction activities take place will need to be industrial land.

398. Analysis. The land is owned by DAWSA and a land record establishing ownership

is available. Upon obtaining a Land Use Clearance, another application must be made to

RAJUK under Rule 13 of the 2008 Rules for obtaining Building Permit for the purpose of

constructing the water treatment plant.

399. Recommendation. The spatial planning should be completed as soon as

reasonably possible and well before the tender for this project is launched. Efforts should be

diverted to this issue and the future land-owning institution DWASA should monitor the

efforts to this end, as regards the land acquisition process. RAJUK should be included in the

project implementing steering committee at an early stage.

400. If and to the extent the spatial planning is completed at the stage when the tender is

launched, respective information (clearance) should be included in the Information

Memorandum. If at the stage of the launching the tender, this process is still ongoing, then

support of RAJUK should be conveyed by a kind of “Governmental Support Agreement”.

1.5. PPP Corporate Structure

401. Issue. This concerns the corporate structure of the desired investor consortium. In

both cases, the BOT PPP and the O&M PPP will require a local legal entity assuming the

contractual obligations vis-à-vis DWASA.

402. The shareholders’ agreement (or equivalent) will lay out some vital provisions which

are of interest to the public side and therefore should be predetermined. These are the

freeze-in of the initial shareholding structure and the issues pertaining to the so-called non-

recourse financing.

403. The public side has a legitimate interest that the consortium is actually assuming its

obligations as per the TOR, the technical and financial proposal and the PPP contract. Thus,

until such time the main obligations are met, or major milestones are achieved, the

consortium should not be allowed to significantly change the shareholding structure of the

consortium and the (to be established) local company. So, there is an interest that the Joint

Venture remains in place, with the companies from abroad bound into and committed to the

project just as if it was a local company.

404. At the same time, international companies cannot endanger or risk their mother

company’s standing by the success or failure of a single project. There is, therefore, a

legitimate wish of these international players, to reduce the financial impact of a project to



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the consolidated finances, in particular if the mother company is a publicly traded legal

entity. The so-called no-recourse financing reduces or limits the financial impact a failed

project has on the consolidated finances of international companies.

405. Therefore, a balance has to be found, by the public wish to bind these international

companies into the projects, yet, at the same time allowing sufficient flexibility in the financial

engineering.

406. Analysis. The commercial law applicable in Bangladesh resembles the regulatory

environment applicable in the United Kingdom. Section 5 of the Companies Act 1994 allows

for the incorporation of traditional forms of corporate legal entities, i.e. private companies

and public companies limited by shares/guarantee, reference is made to the Legal Review

submitted under cover of the Interim Report.

407. Because of the freedom commercial entities enjoy, a transfer of shares of a private

limited company or public limited company not listed in stock exchange is not restricted by

the Companies Act 1994. The only means to restrict the free transfer of shares is by the

contract, imposing a contractual penalty and even entailing contract termination in extreme

cases or by special legislations (e.g. Bank Companies Act 1991 which restricts share

transfer of a borrower company without approval of lender). The restrictions to consider

contractually are:

(i) Absolute restriction of share transfer; (ii) Temporary (initial) restriction of share transfer; (iii) External restriction of share transfer (shares can be transferred internally

amongst consortium partners); (iv) Floating restriction of share transfer (over time, shares can be transferred,

externally and internally); (v) Free transfer of shares, provided a certain minimum shareholding remains

with the leading consortium partner.

408. Recommendation. The above listed share restriction options can be combined and

a market sounding prior to the PPP transaction will help to tailor this system according to

legitimate demands of the potential investors and financing institutions.

409. With respect to the non-recourse financing, this is possible under applicable

legislation. Again, it is suggested to identify appropriate parental guarantees following the

market sounding and to define an appropriate level of mother company commitment for the

project implementation phases.

1.6. Expatriation of profits

410. Issue. Investors expect free and unhindered expatriation of dividends and/or profits.

Any regime putting undue burdens to such free and unhindered expatriation will attract two

unwanted issues: (i) there will be a risk premium on the financing, if and to the extent there

would appear to be question marks on the expatriation of profits; and (ii) corporations will

revert to other methods in repatriating their funds. Examples could be inter-consortium loans,

high management, administration and back office support fees, cost items being inflated etc.

411. It is always better to allow for free and unhindered expatriation of profits and / or

dividends and to convey comfort to this end, thereby encouraging transparency than the

alternative. Investor consortia are more experienced in handling these situations than

normally governments are. Recent example in the UK show that politicians found



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themselves in an uncomfortable situation, because transparency was missing and big

companies made legitimately use of legal loopholes. These loopholes are not necessary, if

the regime is predictable and free from any unnecessary burdens.

412. Analysis. Article 10 of the 2010 PPP policy sets out the Incentives to the Private

Investor, these can be of (directly) fiscal and non-fiscal nature and concern direct subsidies,

waiver or exemption from import duties, applicable tax regimes, etc. The expatriation of

funds was not explicitly mentioned in this provision and it is likely that, by way of analogy,

this was not included by the intent of the drafters; whether this was an oversight or

deliberately is not relevant.

413. The Government of Bangladesh however, being “keen to provide fiscal and non-fiscal

incentives to the private investor” may also consider “incentives in the areas […] of

protection of return” (Article 10 Water Policy 2010). This is a general entitlement for the

Government to take measure “protecting the return”. This is an interesting provision, it

sounds, per se, like an enabling clause that would entitle Government to override otherwise

applicable laws.

414. Step by step: does protection of return cover the expatriation of profits? A return (of

investment) would primarily mean a flow of funds that were invested or in compensation for

investments “returning” to source. The sources for these types of investment are either local

or from abroad. So, both, local and foreign investment must be covered; otherwise there

would need to be a disclaimer to this end, suggesting that foreign investment not be covered

by this provision. Then, a return can necessarily only mean that (legitimate) funds arrive

abroad, at source, “protected” from undue interference. The returns as such are some kind

of profit, whether a dividend or a declared profit should make no difference. So, it is safe to

assume that “protection of return” covers the expatriation of profits, otherwise, a contratio, if

it was not covered, then where would the protection of returns be? It could only mean that

local investments are concerned, but the provision does not limit the scope. This is rather

unlikely.

415. Then, does the “protection of return” actually mean free and unhindered expatriation

of profits (or dividends)? The first question would need to address “protection” from what?

This will allow defining the scope of the protection. Since this is a public policy, it can only

mean public policy implementation and Article 10 PPP Policy actually stipulates that benefits

are to be granted through the “appropriate agencies”. This means that all relevant public

institutions, organizations, administration etc within the sphere of competencies of the

Government of Bangladesh are concerned. Otherwise this provision would, a contrario, not

make sense. So the “protection” would address undue interference of any public body and

the Government will do its part in “protecting” the return (and, above, the expatriation). But,

this does not necessarily mean that all interference is undue. If, for example, there are

ongoing disputes and the investor consortium is attempting to drain their funds in

Bangladesh, then the Government has a legitimate interest that the investors are tangible

within the country. So, some restrictions are certainly acceptable.

416. On the other hand, if there are no significant potential liabilities and the investor just

need to repay their banks or equity investors, then there should be as little bureaucratic as

possible. Thus, if there are too many formalities, permits, approvals and loops an investor

consortium has to go through each and every time before it sends funds abroad, then this

certainly would not be in the spirit of “protection of returns”.



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417. The detailed legal review, submitted as part of the Interim Report and updated with

the findings at this final stage (included in Appendix 15 Annex 1 to the legal report), has

shown the steps an investor consortium has to go through in order to expatriate profits. For

dividends, according to Paragraph 31, Chapter 10 of the Bangladesh Bank Foreign

Exchange Guidelines of Bangladesh, the Authorized Dealers (banks) are permitted to remit

dividends (both interim and final) to the non-resident shareholders on receipt of an

application in the prescribed form from the company duly certified by its auditor filed along

with some supporting documents.

418. Recommendation. In order to convey the necessary comfort to investors to be able

to expatriate profits (or dividends), the Information Memorandum should contain a chapter

addressing this issue, together with a statement from the Central Bank of Bangladesh either

in the Information Memorandum, or a “Governmental Support Agreement” that these

“approvals” for the expatriation of dividends will be issued as soon as possible and

practicable. This Central Bank of Bangladesh approval can take from 2 weeks up to 3

months.

1.7. VAT regime

419. Issue. The Khilkhet WTP project will require plant and machinery, goods, works and

services, sourced locally and from abroad. While the imports are traditionally less

problematic, because those are usually VAT exempt, the provision of local goods, works and

services, can make up a significant part of the overall investment required.

420. Therefore, the extent local VAT can be waived for the sourcing and provision of local

goods, works and services will have a direct impact on project financing and ultimately the

burden for the public to carry through the tariff.

421. Analysis. According to section 3 of the VAT Act 1991 all locally bought goods,

works and services, save and except the goods mentioned in Schedule 1 of the VAT Act and

services mentioned in Schedule 2 of the VAT Act, are subject to VAT. Whilst there might be

a VAT exemption applicable to the implementation of the consortium directly, this does not,

per se, extend to local subcontractors and works since the services expected to be supplied

on account of the same, including, without limitation consultancy, advisory, engineering,

legal etc do not fall within the purview of Schedule 2 of the VAT Act and as such shall attract

VAT

422. But, there is a possibility that local goods, works and services too are VAT exempt.

According to Rule 31(Ka) of the VAT Rules 1991 read with SRO No 1 (5) VAT (redemption)/

99 (part-2)/133 dated 17.10.2004, any manufacturer or service provider with a VAT

Registration who provides a goods/services pursuant to a local or international tender called

by any person for the purpose of a development project in Bangladesh funded by foreign

donation or loan, shall be deemed to be exporting their goods/ services. Any local

subcontractors, suppliers, etc falling within this category shall be exempt from payment of

VAT by operation of section 3 read in conjunction with Schedule 2 of the VAT Act 1991,

which exempts all exports from payment of VAT.

423. In practice however, instead of exemption of payment, such local contractors would

be entitled to reclaim any VAT they might have paid. However, it is not possible to

conclude whether the local sub-contractors or suppliers will qualify for the aforesaid VAT



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exemption without precise information about the funding mechanism of the Project. The

relevant factors for this possible exemption are:

• Local contractor provides goods/services pursuant to a local or international

tender called by any person for the purpose of a development project in

Bangladesh funded by foreign donation or loan;

• The local contractor is a VAT registered;

• The local contractor is Bangladeshi national/registered;

• The consideration for local contractor’s service is paid in foreign currency;

• Such consideration is remitted through normal banking channels

424. While this cannot be guaranteed, there is a possibility that such VAT exemption can

be effected and if this is the case, which means local VAT will not apply to locally

procured goods, works and services

425. Recommendation. In the following phases of this project, this issue of VAT

exemption of local goods, works and services, if remunerated in foreign currency, should

be discussed and taken up with the PPP Office and the Ministry of Finance. If a general

waiver can be obtained, then, perhaps the respective invoices to the project can be Zero

VAT invoices and therefore significantly reduce the overall financial burden.

426. Since the exemption would depend on the nature of funding of the project (and

consequentially the contract arrangement with local contractor) it is highly unlikely that at

this stage a conclusive view would be taken by the VAT regulators at this stage.

Customary practice is that PPP/concession contracts provide for such allowances only

after contract execution and such exemption applications are made to the regulators,

who then take a decision looking at the executed contracts and recommendation from

the procuring entities.

1.8 Summary

427. The table below provides an overview of the issues addressed and the relative

applicability to the two PPP options, BOT and O&M

Table 39: Issues Addressed

N. Issue BOT PPP O&M PPP

1 Water Abstraction Rights. √√√ √

2 Commercial security mechanism.

√√√ √√

3 Ownership of assets. √√√ √

4 Spatial planning. √√ √

5 Corporate structure √√√ √

6 Expatriation of Profits. √√√ √√√

7 VAT Regime √√√ √√



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428. These issues will have to be addressed in order of priority, depending on the chosen

PPP option. In the event of a BOT PPP, this means all these issues will require

resolution before the launch of the tender thereby establishing a favorable environment

for investment and inviting investment from abroad. In the event of an O&M PPP the

most important issues pertain to the commercial security and profitability issues (tax and

expatriation of profits).

3. Definition of Additional Requirement

429. For this project to include a PPP component, either as a BOT or Operation and

Maintenance PPP, additional support is required. This can be summarized as traditional

transaction advisory, with two phases; the pre-tender and preparatory phase and the

tender assistance phase leading up to the PPP contract signature.

1.9 Pre-Tender Phase

430. In this phase the tender documents and the PPP contract should be drafted. The

associated documents are:

(i) Procurement plan, outlining the entire (planned) procurement;

(ii) Expression of Interest; together with the prequalification criteria;

(iii) Request for Proposal, together with the financial and technical bid evaluation

criteria;

(iv) Time schedule for award;

(v) Draft PPP contract for the design, construction, operation, maintenance and

ultimate transfer of the intake, transmission pipeline, the water treatment plant

and interconnector for the BOT PPP and the Operation and Maintenance of

all these facilities and the investment component for the O&M PPP;

(vi) The off-take agreement with between the BOT Operator and DWASA

together with a commercial mechanism allowing remuneration of the BOT

Operator and a support type agreement, where the public side commits to the

project.

431. All these documents will need to be drafted, in principle agreed upon by the main

public stakeholders and financial institutions (such as the ADB) and cleared for the

tender phase, ensuring a swift and efficient tender process.

1.8. Tender Phase

1. In the tender phase, assistance should be provided for the following actions:

(i) Prequalification evaluation

(ii) Shortlisting

(iii) Questions and answerer

(iv) Bidders meetings

(v) Bid evaluation

(vi) Negotiation assistance



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F. Contract Types & Packaging

The main issues and alternatives considered before arriving at recommendations are summarized

below:

Figure 21: Contract Packages Schematic

1.0 Contract Packaging Considerations

Table 40: Contract Packaging Considerations

Ref. Question/Issue Response Date

1 What to include in DBO A “large DBO” is not necessarily best. It has a

cost, and the right choice is not straightforward.

It is expected that “the contractor” feels

accountable from intake to WTP if there’s only

one large contract, but it might be more

complex. There will be a consortium (maybe a JV,

maybe a joint and several consortium, maybe a

13/06/

2013

N

Balu R.

Proposed new

New Injection Point 2000mm treated water pipelines* WTP at Gandharbpur

13 km

River bank protection

Intake structure

Saidabad WTPs Raw water PS

4.5 km 17 km

2200 mm raw water pipeline

Proposed New

Junction chamber

Juice Factory on

Exist Twin box culvert 13 km Dhaka-Sylhet Hwy.

to Saidabad Intake 2200 mm raw water pipeline*

Meghna R.

(* sizes to be confirmed)

Sita

lkhya R

.

1 2

3

Existing DND Canal to Saidabad 1,2,3

(connects to Sitalkhya 2km downstream)

Package 04

Package 03

Package 01

Package 02

Package 01

Package 05



141 309128

lead contractor with sub-contractors).

One company may be in charge of pipes (supply +

laying) and civil engineering, and another one in

charge of the water treatment process + intake.

If the intake is very complex (and it certainly is), it

may actually be left to a 3rd, specialized

company.

The “civil engineering” will have the lion’s share

during the works phase (all pipes + 50% of WTP

cost + xx % of intake), maybe 80% of the total

cost. Then, during operations, the water

treatment specialist will certainly be the one in

charge (pipe maintenance will be minimal). That

means that the structure of the consortium will

have to change between these 2 phases (e.g. in a

JV, the share of equity of each company will have

to be modified), responsibilities will change,

specific interest of each partner will differ along

the project’s life, etc. So it’s not so easy.

An independent, competent engineer to do

detailed design could instead promote an

unbiased approach.

2 Saidabad pipeline 1. The original project plan for a parallel pipe

from intake to Saidabad needs to be changed,

considering the complication (and additional

cost) of having two contractors from juice factory

to Saidabad at the same time.

2. Having a partial pipeline from intake to juice

factory under this project (which will continue to

Saidabad under a future project) is not supported

by any party.

3. So the most plausible option for this project is

just one pipe from intake to Gandharbpur.

Condition will be made that Contractor 2 (under

Saidabad) will come to intake-juice factory

section only after Contractor 1 (under this

project) will complete the section.

13/06/

2013

3 Is it possible to construct two trenches • It will be impossible to manage 12/06/



142 309128

simultaneously from intake to juice

factory in case the pipe contracts for

Gandharbpur and Saidabad are by

different contractors at the same

time?

/coordinate 2 contractors working

simultaneously in the same pipe

corridor.

• The access road is long and narrow and

will frequently be blocked by one

contractor, which will cause claims for

disruption /delay by the other.

• It is impossible to have 2 separate open

trenches adjacent to each other. Access

problems + accident risk.

• It is expensive, risky and inefficient to

excavate a deep trench close to another

existing pipe, so it is avoided whenever

possible. Pipe 1 must have careful

protection from trench 2 e.g. Sheet piled

trench support which is expensive, to

protect its compacted bedding. Pipe 1

risks being damaged by construction

plant working on pipe 2. Compared to

placing 2 pipes simultaneously in 1

trench, the cost for 2 separate trenches

is approximately 2 x the full installation

cost (which is ~30% of total pipe cost)

e.g. 2x the working time; 1.5x the

excavated waste to be removed; 2x the

dewatering cost; 2x trench support

costs; 2x environmental impact. Hence ~

30% increase in pipe costs.

2013

4 While we need to see when exactly

the construction of each package will

start and end, there is a possibility that

Saidabad 3 construction will start

before the completion of construction

under Gandharbpur.

If financing constraints and commitment delays

dictate that both raw water pipes from Intake to

Juice, cannot be installed under 1 contract at the

same time, then the extra cost, risk and

inefficiency of sequential construction must be

accepted.

To make this work, we agree it will be best to

either:

1. Impose a construction schedule on Contractor

2, to avoid interference with Contractor 1. That

means persuading contractor 1, during award

negotiations, to commit to a programme which

finishes substantial independent sections of the

pipe route as early as possible, which can be

accessed without using the project access road

(probably new roads will have to be built)

Or :

12/06/

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143 309128

2. Find a different alignment for Saidabad

(1+2+3).

5 Having two different contractors to

work in the same site (both from

intake to juice factory and from juice

factory to Saidabad) may sound

difficult (and costly), but how can this

be avoided?

Having two different contractors to work in the

same pipe reservation will be a disaster. Installing

1 big pipe right next to another, which has just

been laid and backfilled is very risky, difficult,

much more expensive and very bad planning.

If you want to build 2 Saidabad pipes within 2

years of each other, the only technically

acceptable way to do it is :-

Contract 1 = Supply + lay triple pipe* from Intake

Pump station to Juice Factory (+ single pipe

onward to WTP). This should be part of the DBO

contract.

Contract 2 = Supply + lay double pipe from Juice

Factory to Saidabad.

*Actually, it is economically indefensible to lay 3

pipes at the same time next to each other. Two

pipes is OK because they provide security of

supply, but 3 is a waste of money and bad

planning.

Therefore, it is much better if :-

Contract 1 = Supply + lay 2 pipes in same trench

from Intake Pump station to Juice Factory: dia

~2200 for Gandharbpur + dia 3500 (aprox) for

Saidabad.

These 'big + small' pipes will have cross

connection at Juice F (for emergency supply).

After the Juice Factory, the big Saidabad pipe

should revert to twin ~2200 dia for security of

supply

While technically most logical, this proposal will

not be accepted by financiers unless there is very

firm commitment from the government and

financiers of Saidabad 3 that Contact 2 will come

without delay.

11/06/

2013

6 Comment from Lionel Goujon Regarding pipe diameter: leaving the diameter

undecided would without a doubt add

07/06/



144 309128

complexity to the cfps. So, if a proper NPV

analysis can be performed during the bid

document preparation, and prove that the

optimal choice is clear and/or that enforcing a

diameter will not have a real impact on the NPV

(compared to a pipe one size larger or smaller), I

fully agree that it is better.

2013

7 Phasing We propose the following:

(i) intake + WTP + interconnecting raw water

pipework: DBO, with 15-20 years operation

(ii) another raw water pipework to Saidabad

(from junction): DB (whether this will be

consolidated with (i) will be determined through

market sounding)

(iii) treated water pipework: DB, possibly split

into 2: Rural/Urban, (to be determined through

market sounding)

07/06/

2013

8 Is the following a plausible option (i)

DBO for intake and WTP and

(ii) only Build for pipes, with Design to

be made by the loan consultants?

(i) Yes but we still recommend the

interconnecting raw pipework is

included

(ii) This is technically the better, lower

risk way to do it, but takes longer..

Usually it results in project cost

savings.

07/06/

2013

9 Only if B duration of pipe laying is

much shorter than DB duration of

intake and WTP, the above option

would make sense. But pipe laying

would take longer than WTP?

Not necessarily. This depends on how many pipe

laying teams the contractor mobilises to work

concurrently. With sufficient plant and

management a good, well financed contractor

can squeeze his construction time down to fit a

shorter deadline by working in many places at

once, but the risk of overrun increases (which

becomes an extra bid cost).

07/06/

2013

10 Split contract for T.W. pipeline We recommend (from technical perspective) to

split Package 3 (treated water from WTP to

Dhaka) because the rural 2m dia pipe route is

quite different contracting work from laying

smaller DI pipes under congested asphalt roads

within urban Dhaka. It would suit different

contractors.

03/06/

2013

11 It has been pointed out that having

one single contractor would increase

its accountability during the “Operate”

part of the DBO. What seems

important is that the (future) operator

of the system participates in the pipe

package acceptance (for its completion

certificate), and that should be enough

Generally, whenever a contractor is allowed to

bid on more than one package in a multi-package

project, he would offer substantial discounts to

obtain more than one or all packages. This is

driven by economy of scale (e.g. mobilisation +

preliminaries + management costs + risk cost will

be shared across several packages). However, it

may be right to say the package size is already big

02/06/

2013



145 309128

" . enough to override any economy of scale

considerations. True or not? - market sounding

would confirm.

12 These are not “small” vs. “large”

packages. We’re rather talking of “very

large” vs. “very very large”. We are

confident that we can attract world-

class companies on these tenders (and

even more in the currently tough

market conditions).

Others say the Bangladesh political and social

environment may not be so attractive to world

class contractors needing to fully commit to a

project that requires procurement to move fast,

transparency of bids, third party delivery

/approval, supportive regulations, predictable

implementation and a host of other activities and

potential liabilities that deny them comfort.

Without careful packaging, we may end up with

only Chinese and Indian bidders.

02/06/

2013

13 Above a certain size, economies of

scale do not really apply anymore: 2

tenders of 100KUSD might lead to

160KUSD in total if grouped, but 2

tenders of 100MUSD would more

probably lead to ~200MUSD if

grouped.

Agreed, but unsure where that threshold is.

Market sounding can check.

02/06/

2013

14 On the other side, one large package

may somehow reduce the

competition.

This is a beneficial objective, to attract good DBO

contractors.

02/06/

2013

15 One key question is: can there be

design-related linkages between the

pipes and the intake/plant?

Actually, there might be: if we procure

the (raw water) pipes on “red FIDIC”,

that means we will calculate ex-ante

the acceptable headloss, then we will

ask for pipes with the relevant

diameter on one side, and for pumps

adapted to this diameter on the other

side.****

Yes, possible if the bid docs :-

(1) Contain minimum specifications for each

allowed pipe material.

(2) Ask bidders to provide supply & lay rates for

several diameters (which bracket the likely

optimal dia).

(3) Define the economic parameters which will

be used to select optimal dia. During evaluation

(e.g. power tariff, pump efficiency, pipe

roughness, average pipe depth, discount rate,

annual (non power) opex costs,

(4) Tell bidders that the final pipe size + material

selection will be made by client.

02/06/

2013

16 A design-build procurement might

make sense for these pipes if it also

includes the treated water pumps, so

that the competitors might propose

optimized solution for the investment

Agree pumps to stay with WTP, but pipe dia can

be fixed after DB bidding as suggested

in ***** above

02/06/

2013



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+ operations (energy) cost. But can we

recommend that the treated water

pumps should be included in the WTP

package, not in the treated water

pipes package (these pumps will be

located at the plant, operated by the

plant manager… so they must be

chosen by him)?

17 Alternatively, with a global “yellow

FIDIC”, we can let the competitors

propose an optimised “investment +

operation cost” arrangement (e.g. A

smaller diameter – i.e. Higher headloss

– might be financially relevant with a

specific pump configuration).

This only works if the operating period is long

enough for opex to outweigh their capex savings

from an undersized pipe - say 15 years

02/06/

2013

18 How certain are we that 2200mm will

be the optimal diameter in the end?

Not certain at all. Pipe supply + install cost is the

major variable which is only known at bid

evaluation. It can change the optimal diameter

by 300mm.

02/06/

2013

19 If much doubt remains on this, one

global package including raw water

pipes might make sense (but more for

design issues than for maintenance

issues, in my opinion).

Agreed 02/06/

2013

20 Please note that if we choose design-

build, we should think in terms of

specifications for the “system output”,

i.e. “we want that much water of that

quality, with this resistance to

earthquake, this xxx, etc.”, but not “we

want pipes of 2200mm, DI, with this

kind of pre-treatment, etc.). So it is not

clear whether a “base bid” should be

mentioned.

Agreed 02/06/

2013

21 Or the “base condition” should relate

to outputs (e.g. “base condition for

turbidity of treated water is below 1

NTU, but alternatives up to 2 NTU can

be proposed if they result in significant

cost savings”.

The principle is correct, but there is a problem as

we don't have enough (years of) raw water data

to give them, so promising a particular t. W.

Quality is a costly risk to bidder. (depending on

the penalties to be defined in bid docs). Another

point to be explored in market sounding.

02/06/

2013

22 For that reason, a “red FIDIC”

procurement for treated water pipes

(if not for the raw water) is more

favorable. The diameters, exact routes

It can still be DB with flexible bid docs demanding

prices for several different pipe dias so the final

decision on size + material can be made during

bid evaluation and contract negotiation. This is a

02/06/

2013



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and allowed headloss will have to be

clearly stated in the tender

documentation.

workable option, not the only one. We can also

consider a partial design by consultant during

bid doc preparation, to analyse optimal pipe size,

based on best costs available at that time and fix

these pipe + pump sizes in bid docs, but guessed

prices mean they might not be optimal size

hence a penalty in long term discounted total

cost.

23 Even if partial pipe design is made, can

bidders still propose alternatives? If so,

what's the merit of partial design?

First approach above offers win-win by saving red

FIDIC design time while still allowing DWASA to

choose the optimal size.

02/06/

2013

24 For pipeline construction, the key

advantage of DB is time-saving. But if

we do not fix the pipe diameter, how

can we stop bidders proposing smaller

pipes by claiming incremental pumping

costs are not large?

Indeed - this is our big concern. It is the main

disadvantage of DB over red book. Only the bid

documents can prevent this unwanted outcome.

They must be skillfully crafted to enable the

client to get optimal design. It is not simple, but

we suggest as follows:-

Bid docs must :-

(1) Contain minimum specifications for each

allowed pipe material.

(2) Ask bidders to provide supply & lay rates for

several diameters (which bracket the likely

optimal dia).

(3) Define the economic parameters which will

be used to select optimal dia. During evaluation

(e.g. power tariff, pump efficiency, pipe

roughness, average pipe depth, discount rate,

annual opex costs (non power),

(4) Tell bidders that the final pipe size + material

selection will be made by client.

01/06/

2013

25 Disadvantage of few/large packages Two or three large contract packages have a risk

advantage over one big one, in that if it fails, the

other(s) may be in a good position to take over

and finish their work.

On the other hand, many packages attract small

contractors, who may not have capacity to do

this.

31/05/

2013

26 As for using one single trench for both

pipes (if there are two pipes) what are

the expected advantages (and

evaluate the cost impact compared to

2 trenches)?

Single trench for 2 pipes is assumed in DFR. The

cost for 2 trenches is much higher than for one

twin (2x the working time; 1.5x the excavated

waste to be removed; 2x the dewatering cost; 2x

trench support costs; 2x environmental

31/05/

2013



148 309128

impact); pipe corridor space too narrow for 4

separate pipe trenches = risk damaging the

installed pipe(s). Problematic for 2 different

contractors to use the same access road at the

same time.

27 Size of package The bigger the package, the more attractive it is

to good international contractors, who we are

targeting. Small packages give them less

incentive to bid and less incentive to put effort

into good designs. This is a major infrastructure

project on which a big portion of Dhaka will rely

and breakdown would be catastrophic. It

demands first class design to reduce the many

technical risks inherent in a long pipeline in

difficult ground conditions, with insufficient base

data (geotec + water quality + river

characteristics).

Good big international contractors know that

small packages mean:-

- more competition from small, cut-price

contractors,

- more chance that the considerable cost and

effort required to prepare a winning DBO bid will

be wasted,

- smaller profit so less incentive to mobilise a top

team to Dhaka

30/05/

2013

28 Number of packages If package 1 + 2 are not combined, or worse, if

they are split into 3 contracts, DWASA will

probably :-

- get poorer design (see above).

- have trouble managing the different operators

because each will blame the other for any

problem.

30/05/

2013



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2.0 Operations Stage

Table 41: DBO Operations Stage


1 Why longer "O" duration?

DWASA is expecting a DBO with “a

small o”, Saidabad 2: 1 year warranty +

2 years management contract. Why is

15 years++ recommended? What

would be the objective? Reaching a

“stabilized” performance and building

the capacity of DWASA on such a large

plant can be done in 3 years.

A short period operating commitment gives DB

contractor no incentive to design the system and

select equipment for low plant maintenance,

simple operation, long term reliability etc. He

could use cheap fast running pumps with short

life, shallow pipes, minimal surge protection,

labour intensive treatment processes, reduced

stand-by capacity, low corrosion protection etc.

We can try to avoid some of these with tight

specifications, but contractor with short

operating obligation will design system very

differently to DWASA disadvantage. A long

operating obligation is DWASA's guarantee for a

good design. It should cover most of the

expected lifespan of major equipment.

07/06/

2013

2 What is the best duration of the DBO

contract? DWASA prefer a short one as

in Saidabad phase 2 (3 years).

DWASA staff were not enthusiastic for longer

than 5 years operation, but we recommend

DWASA should consider the benefits of longer

op, unless 'Design' is separated from

'Operations', but this is not advised for the intake

+ WTP.

07/06/

2013

3 Why include raw water pipe Intake to

WTP in DBO?

Breakage /burst frequency depends on good

design and good supervision to prevent: damage

from vehicles, flotation, river erosion, failed

/flooded air valves, failed thrust blocks, and

surge pressures caused by intake operator.

(latter can collapse or burst the pipe; if so, who is

responsible - the pipe contractor or operator?).

We strongly recommend keeping pipes from

intake to WTP under responsibility of operator.

The more pipes we can give to the operator the

better the design + construction quality will be.

31/05/

2013

4 Duration of operation To achieve full benefits from a DBO approach,

the 'O' part should preferably be nearer 20 years

to capture the potential breakdown and need to

replace major items of (potentially

underdesigned) mechanical plant.

Five years or less would be most unusual and

risky for DWASA in the long term.

It is the obligation to operate for a long time that

30/05/

2013



150 309128

forces a contractor to design & build an efficient,

reliable solution that is easy + cheap to operate +

maintain



151 309128

3.0 Bid Documents Table 42: Bid Documents


1 Advantage of fixing pipe diameter: Leaving the diameter undecided would without a

doubt add complexity to the tender evaluation.

So, if a proper NPV analysis can be performed

during the bid document preparation, and prove

that the optimal choice is clear and/or that

enforcing a diameter will not have a real impact

on the NPV (compared to a pipe one size larger

or smaller), we agree that it is better.

Enforcing a pre-determined diameter reduces

the “design link” between intake and raw water

pipes (the characteristics of the raw water pumps

will become independent from the pipes – except

for the roughness, which has a small impact.

08/06/

2013

2 Starting Bidding at the same time This allows bidders to bid for more than one

package (with possible discounts), but some say

discounts may be negligible when contracts are

this big

07/06/

2013

3 Concern about pipe diameter The consultants who will prepare the bid

documents should analyze optimal pipe diameter

during bid document preparation. This will be

done for the pipes of all packages. Long term

NPV cost penalty of slightly wrong pipe size is

relatively small, so this can be acceptable. Merit

will be much clearer, simpler, more professional

pipe bid docs with fixed sizes and only alternative

pipe materials offered. Bidders may be alarmed

(= extra risk costs added) to find pipe size is

undecided and it would involve them in much

extra work + bid time.

07/06/

2013

4 Detail design/ Red Book vs. D&B 1) A Red Book approach for the pipe contracts

would likely result in better designs/quality than

if implemented under a DB/Yellow Book contract

2) A DBO contract for intake + pipe + WTP could

be expected to result in higher quality pipe

designs than if the pipes were implemented

under a DB/Yellow Book contract. The validity of

this statement will increase with the length of

the O component. With a short operation period,

the difference to a DB contract is less

pronounced than with a long O-period.

06/06/

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3) Recruitment of consultants for Red book

design of pipes would take at least a year and

require more resources than funds are available

for, without further delay. To avoid these delays

of one year, or more, risks of inferior

construction must be accepted.

5 Advantages of FIDIC Red Book Detail

Design

FIDIC Red Book may be an appropriate option for

the pipe packages. This would allow a competent

and objective consultant to make the final

decision on e.g. pipe material and pipe

dimension, rather than leaving such decisions in

the hands of a price pressing contractor, less

concerned about the long-term performance.

This approach would facilitate the tender

evaluation, but would also influence the time

schedule and TA fund needs. The DBO approach

for the intake and WTP in one package,

eliminates the risk of intake and WTP plant

contractors blaming each other for any problem.

31/05/

2013



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Table 43: Saidabad and other Questions


1 The DFR suggests not using the DND

canal anymore to supply Saidabad 1 &

2 as this canal is considered an “open

sewer” putting at risk the quality of

the raw water.

Degrémont considers the canal is dirty

because the Sitalkhya water is dirty.

The canal is not the source of

pollution. Switching to the Meghna

water will solve this issue, according to

them.

PPTA appreciates this opinion. It could easily be

verified by water quality sampling at beginning

and end of canal. If Degremont + DWASA confirm

that Sitalkhya raw water can be treated

satisfactorily throughout the year and in future,

(DWASA disagreed at ADB wrap-up) this last

proposed pipe section along the canal can

possibly be omitted from this current project.

12/06/

2013

2 Saidabad 1 and 2 cannot receive water

directly from a pipe with a pressure

head.

This was understood by PPTA consultant who

propose in DFR to pump into an open inlet box

(included in costs) at start of culvert so Saidabad

inlet arrangement is unchanged

12/06/

2013

3 Degrémont say the DND canal

capacity is not sufficient for 1000 MLD.

This implies that the canal must be

used for Saidabad 1 & 2

Not necessarily – see above

But Degremont say the canal cannot be used for

Saidabad 3, which should receive water directly

from pipes

12/06/

2013

4 The new pre-treatment currently

enables Saidabad 1 and 2 to produce

drinking water of good quality, from

the Sitalkhya. Switching to the Meghna

water will increase the cost (because

water from Meghna requires more

energy).

But expect that cost is partly offset by reduced

chemical treatment cost. So it may not be

relevant to switch the water supply until the

Sitalkhya becomes too deteriorated.

12/06/

2013

5 How is security of supply considered? If we have two pipes instead of 3 from Intake to

Juice, (one small for G1 and one big for S1+2+3)

to save money, they will be joined at Juice with a

connecting pipe + valve which is opened when

one pipe has failed. This will allow the flow from

the good pipe to be shared between

Gandharbpur and Saidabad while repairs are

made.

11/06/

2013

6 Can 15% Physical contingency be

reduced? A number of ADB projects'

cost estimates, and contingencies are

15% physical contingency is not high at FS stage. I

feel it is uncomfortably low.

05/06/

2013



154 309128

Ώ

normally more or less 10%, not more

than 15%.

10% ph contingency for this sort of project (with

many unknowns) is only acceptable following a

very good detail design, based on full site

investigations + client and gov't approvals etc.

Even then, many /most contracts incur variation

orders for unforeseen problems, oversights and

instructed extra works in excess of 10%.

Projects where all risks are passed over to the

contractor can have smaller physical

contingency, but then the contractor's risk costs

must be added to the contract value (works cost

estimate), so the cost still has to be included.

We cannot support reducing it from 15%.

7 Why DB for pipes? Having a separate d is technically the better,

lower risk way to do it, but takes longer and if we

wait for the loan consultants to do the design,

this will be delayed by a year. If we squeeze the

construction period of these contracts to

compensate for the delay, bid price could go up.

So it makes more sense to start all packages at

the same time. By fixing the pipe diameter during

bid document preparation, risk of design

manipulation by prospective bidders will be less.

Technical Assistance

ADB TA 8053BAN:

Technical Assistance to the People’s Republic of Bangladesh for

Preparing the Khilkhet Water Treatment Plant Project

Final Report

Mott MacDonald Ltd. June 2013

ADB PPTA 8053 BAN: Preparing the Khilkhet Water Treatment Plant

Project

Final Report June 2013

Draft Final Report – June 2013

ADB PPTA 8053 BAN: Khilkhet Water Treatment Plant Project Mott MacDonald Project Number 309128

0

Table of Contents

APPENDIX 1: TERMS OF REFERENCE FOR CONSULTANTS 1

APPENDIX 2: PERSONS MET 1

APPENDIX 3: MEETING NOTES 1

APPENDIX 4: PLAN OF ACTION FOR DECOMMISSIONING DTWS IN DHAKA CITY 1

APPENDIX 5: SUPPLY VS. DEMAND – SPREADSHEET DATA 1

APPENDIX 6: CAPEX AND OPEX ESTIMATES 1

APPENDIX 7: BANGLADESH WATER QUALITY STANDARDS 1

APPENDIX 8: REVIEW NOTES ON MORPHOLOGY STUDY 1

APPENDIX 9: ANNEXES 1-4 IN WASTE WATER SECTION III.A.2 1

APPENDIX 10: FINANCIAL MANAGEMENT ASSESSMENT 1

APPENDIX 11: MEGHNA WATER QUALITY MONITORING PROGRAM 1

APPENDIX 12: GENDER ACTION PLAN 1

APPENDIX 13: REVIEW NOTES ON FS FINANCIAL ANALYSIS 1

APPENDIX 14: ANNEXES 1-3 IN ECONOMIC ANALYSIS SECTION III.D.2 1

APPENDIX 15: ANNEX 1 TO LEGAL REPORT 1

APPENDIX 16: MEGHNA AND SITALKHYA HYDROLOGY 1

APPENDIX 17: SECTOR ASSESSMENT 1

APPENDIX 18: DEVELOPMENT COORDINATION 1

APPENDIX 19: RISK ASSESSMENT AND RISK MONITORING PLAN 1

APPENDIX 20: SOCIAL SAFEGUARD COSTS 1

APPENDIX 21: OUTLINE SUPERVISION TOR 1

APPENDIX 22: MORPHOLOGICAL ASSESSMENT 1

APPENDIX 23: NOTES ON PIPE SIZE OPTIMISATION 1

APPENDIX 24: RESPONSE TO DWASA COMMENTS ON DFR2 1

Draft Final Report – June 2013 Appendix 1


1

APPENDIX 1: TERMS OF REFERENCE FOR CONSULTANTS

Objective

1. The outcome of the project preparatory technical assistance (PPTA) for Preparing the Khilkhet Water Treatment Plant Project will be project design and feasibility study that the government and ADB have agreed upon. The Consultants will propose the project design for the ensuing project including detailed scope of the project, rationale, financing and institutional arrangements, and scope of consulting services under the ensuing project in close consultation with the government, Dhaka Water Supply and Sewerage Authority (DWASA) and ADB. The DWASA will be the executing agency of the TA as well as the ensuing loan. Scope of work of consultants

2. Consulting services for this assignment will be engaged by international consulting firm(s) in association with national consulting firm(s) for a total of 46 person-months of consulting services (17 international and 29 national). The terms of reference (TOR) for the services will include, but not be limited to, the following: 1. Specific Tasks of Consultants 3. Institutional arrangements. Consultants will: (i) undertake technical, procurement and management capacity assessment of the executing agency; (ii) assess progress and achievements of the ongoing capacity development programs and sector reform issues; (iii) propose measures to further strengthen capacity of the organizations assessed, and/or advance the sector reform, if deemed necessary; (iv) propose an effective and workable institutional arrangement for the project, including mechanisms to enhance coordination and coherence among different organizations; and (v) propose appropriate modality for investment as well as operation and maintenance (O&M) of the facilities to be built with due consideration to public-private partnership (PPP). 4. Financial arrangements. Consultants will: (i) undertake a financial management assessment of the executing agency; (ii) review the current arrangement for private sector participation where applicable; (iii) undertake an assessment of the financial position, performance and financial projections for the next 20 years of DWASA; (iii) propose measures to improve and rationalize the current private sector participation arrangement; (iv) propose measures to strengthen the financial position to ensure entity’s financial sustainability; and (iv) propose appropriate financial arrangements for the project involving PPP, including design of the fund flow and disbursement mechanisms. ADB’s Financial Management and Analysis of Projects (2005) and ADB’s Financial Management Assessment Questionnaire should be utilized. 5. Technical scope. Consultants will (i) review and analyze all the existing studies relevant to the project, including the feasibility report prepared by DWASA under the ongoing loan (Loan 2383-BAN); (ii) undertake a rapid water balance analysis relevant to the project, by taking into account holistic water resources management in Dhaka and current and planned future extraction and replenishment processes in the Meghna river; (iii) undertake sector analysis; (iv) prepare a summary of assistance from development partners outlining existing and proposed interventions in the sector; (v) identify gaps to fulfill ADB requirements and undertake additional surveys/studies to fill the gap; and (vi) firm up the detailed scope of



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the project and implementation schedule.1 The sites and design of facilities will take into account future climate variability and change by reviewing the existing studies and literature. Land requirements for the project, include those for transmission lines and treatment plant, will be reviewed and associated costs will be adjusted. As for the wastewater management, Consultants will review the sewerage master plan being developed by DWASA and identify the scope of work in the ensuing project. This may or may not include the investment in priority projects. Consultants will also review the effectiveness of ongoing “soft” programs such as awareness programs on water conservation and hygiene education, and propose programs to be implemented in the ensuing project to ensure public health benefits. 6. Cost estimates and economic and financial analysis. For the identified scope, Consultants will (i) prepare detailed cost estimates, by investment phases, including but not limited to initial and replacement capital expenditures, O&M and administrative expenditures, costs for design and supervision, costs for capacity development, land acquisition costs, environmental management costs and other relevant costs, (ii) undertake an economic and financial analysis, and (iii) prepare a financing plan. Cost estimates will be prepared in accordance with ADB’s Guidelines, including Financial Management and Analysis of Projects (2005). Based on the detailed implementation schedule, Consultants will prepare the item-wise and total cost estimates using the ADB-standard price and physical contingencies, and detailed financing and disbursement plans. Economic analysis including estimation of economic internal rate of return (EIRR) and performing relevant economic analyses will be made in accordance with ADB’s guidelines, including Guidelines for the Economic Analysis of Projects2 and Guidelines for the Economic Analysis of Water Supply Projects.3 Outputs of the socioeconomic surveys, including willingness-to-pay surveys, will be incorporated in the design of the project. Financial analysis including estimation of financial internal rate of return (FIRR) and performing relevant financial analyses will be made in accordance with ADB’s guidelines, including Financial Management and Analysis of Projects (2005).4 The financial model should be based on standard “project finance” assumptions for the project, and compute the FIRR, Equity IRR, and the minimum Debt Service Coverage Ratio (DSCR). The model should compute the extent of capital and/or operating financial support required to make the minimum DSCR at least at 1.0x in the stressed case scenario. 7. Safeguards. Consultants will prepare environmental and social safeguard documents in accordance with ADB’s Safeguard Policy Statement (SPS) (2009) and the country’s legal requirements. Regarding the environmental safeguards, Consultants will (i) conduct detailed review of the proposed project and existing draft Environmental Impact Assessment (EIA); (ii) revise the draft EIA based on updated project information, and revise in accordance with ADB’s SPS, specifically Appendix 1 and Annex to Appendix 1; (iii) submit Environmental Categorization Form with updated Rapid Environmental Assessment checklist; (iv) review each project alternative and include an options analysis in the Initial Environmental Examination, providing adequate details and description for each alternative with summary of environmental impacts and sufficient justification for the preferred option; (v) include maps and aerial photography with locations of project facilities overlaid; (vi) conduct extensive field work and consultations with project stakeholders including government, local people, and relevant experts; (vii) ensure that the executing agency endorses all environmental assessment documents; (viii) prepare Environmental Assessment and Review Framework, if found necessary; and (ix) assist the executing agency to obtain environmental clearance from the government, if deemed appropriate.

1 Consultants will prepare a “sector and/or subsector analysis” and “development coordination” in accordance

with the forms provided by ADB. 2 http://www.adb.org/Publications/title.asp?id=G&s=0&wp=6&ps=25

3 http://www.adb.org/Documents/Guidelines/Water_Supply_Projects/default.asp

4 http://www.adb.org/documents/guidelines/financial/default.asp



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Specifically, due diligence will be conducted to ascertain if old pipes to be rehabilitated contain asbestos, and if so, propose measures to mitigate health impacts during construction and disposal. As for the social safeguards, Consultants will (i) conduct detailed review of the existing social impact assessment; (ii) conduct socioeconomic surveys and a census in close cooperation with the executing agency with appropriate socioeconomic baseline data to identify all persons who will experience major impacts; (iii) prepare a resettlement plan based on updated project information and in accordance with ADB’s SPS; (iv) submit Involuntary Resettlement and Indigenous Peoples Categorization Forms; (v) conduct extensive field work and consultations with project stakeholders including government, project-affected people, and relevant experts, (vi) prepare a Resettlement Framework and Indigenous Peoples Planning Framework, if found necessary; and (vii) ensure that the executing agency endorses all social safeguard documents. If the project is likely to have impacts on Indigenous Peoples, an Indigenous Peoples Plan, including assessment of social impacts, will also be prepared. The Resettlement Plan and Indigenous Peoples Plan may be combined. If and after international safeguards expert(s) are engaged separately, Consultants will work under the supervision and guidance of respective international expert(s) for the safeguard issues. 8. Gender and poverty. Consultants will undertake a social and gender analysis, focusing on how women, the poor and other vulnerable groups could/should be involved in the project. Based on the review of existing practices of DWASA and analysis undertaken, a gender action plan (GAP) or gender equality and social inclusion action plan with monitorable targets and indicators will be developed to ensure that women, the poor and vulnerable groups will better benefit from the project.5 As the project is intended to pursue an effective gender mainstreaming (EGM) category in ADB, relevant guidelines should be referred to in order to satisfy the criteria. 9. Consultation and participation. Consultants will (i) prepare a consultation and participation plan, outlining how to consult various stakeholders, through such mechanisms as focus group discussions and workshops during TA implementation; (ii) assist the executing agency, based on the plan, in organizing consultation meetings and workshops for gathering ideas from and sharing findings with all key stakeholders of the ensuing project; and (iii) prepare a plan for consultation and participation during the project implementation to ensure inclusiveness in the water supply and sewerage service delivery, either separately or as a part of GAP. ADB’s Handbook on Social Analysis (2007), ADB’s Poverty Handbook (2006), and ADB’s Policy on Gender and Development (1998) should be referred to. 10. Public-private partnership (PPP). Based on the assessment of the financial position, performance and financial projections for the next 20 years for DWASA as well as the financial model, the Consultants will:

(i) Provide an overview of similar projects realized under PPP-schemes, preferably in countries with comparable socio-economic situation as found in Bangladesh.

(ii) Review regulations, policies, and guidelines in Bangladesh relevant to PPP. (iii) Explore possible approach for PPP development, and prepare a financially

and commercially viable and implementable PPP scheme. PPP-schemes may also include, amongst others, concession agreements for Build-Operate-Transfer models with viability-gap-funding by the Government, performance based O&M contracts with targeted investments of the contractor in infrastructure, or any combination of such schemes. The consultant will discuss the benefits and challenges of each scheme and recommend based on the results of the technical feasibility study and the economic and financial

5 Consultants will prepare a “gender action plan” (or gender equality and social inclusion action plan) and

“summary poverty reduction and social strategy” in accordance with the forms provided by ADB.



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analysis an option to be followed and further prepared during the detailed design period of the project. It is possible that the scheme in its entirety is not feasible to be taken under PPP, so the focus would be on identifying discrete components that can be so managed.

(iv) Identify requirements for successful delivery of PPP and prepare possible government and ADB support strategies for making the project/ project components bankable in a credible manner that meets the requirements of the investors and lenders, as well as for accentuating on financial and operational sustainability of the entity.

11. Design and monitoring framework (DMF). Consultants will develop a DMF outlining impact, outcome, outputs, assumptions, risks, and key activities with clear links to performance targets and indicators. The contribution of the project to output aggregates of the ADB Results Framework (2008) will also be estimated. Consultants will collect necessary baseline data and information, including those related to social and gender features. 12. Risk assessment. Consultants will undertake risk assessment covering the areas of public financial management, procurement, and corruption pertaining to the project and propose a risk management plan. The second Governance and Anticorruption Action Plan (GACAP II) should be referred to.

13. Procurement plan. Consultants will propose contract packaging in the form of a procurement plan, considering the size, nature, and institutional arrangements of the project, including the proposed PPP components. 14. Scope of consulting services during project implementation. Consultants will: (i) assess the requirements of consulting services during project implementation (which may include services to be provided by nongovernment organizations); (ii) propose the outline terms of reference, required expertise (international and national), and inputs; and (iii) incorporate the proposal in the overall project cost estimates. Terms of Reference for Team Members

15. Team leader and deputy team leader, among the team members, will take the lead in coordinating all the works under the contract to ensure timely, high quality, and effective inputs to finalize the project design, by closely working with the executing agency. Tasks of each expert will include, but not be limited to, the following:

(i) International Water Supply Expert/Team Leader (6 person-months) will, as the team leader, (i) lead the TA, and guide, supervise, and coordinate among all the team members to undertake the defined activities; (ii) ensure that all tasks in the TOR are performed satisfactorily; (iii) be responsible for delivering various outputs of high quality; and (iv) closely communicate with the government counterparts and ADB project officer. As the expert, he/she will particularly lead the tasks described in paras 3, 5, 6, and 11-14. He/she should have at least 15 years of international experience in designing, supervising, and/or implementing water supply projects, including in Asia, with a postgraduate degree in water supply engineering or related fields. Experience on working in PPP projects and as team leader for complex donor-funded projects is highly desirable.

(ii) National water supply engineer/Deputy team leader (6 person-months) will assist the team leader in all aspects of his/her work, including strengthening communication with counterpart staff of the government. He/she will ensure sufficient and meaningful involvement of the counterpart staff of the government in the process of TA to maximize knowledge transfer from the



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Consultants. He/she should have at least 12 years of experience in designing, implementing, and supervising water supply projects, with a degree in engineering.

(iii) International wastewater management expert (2 person-months) will take the lead in the wastewater component of tasks in paras 3, 5, and 6 and make necessary inputs in other tasks including 11-14. He/she should have at least 12 years of international experiences in planning, designing, supervising, and/or implementing wastewater management/treatment projects, including in Asia, and a postgraduate degree in sanitary engineering or related fields.

(iv) National wastewater engineer (2 person-months) will undertake the tasks in paras 3, 5, and 6 with respect to wastewater management, and assist the international wastewater management expert in accomplishing all the tasks under his/her responsibility. He/she should have at least 10 years of experiences in designing, supervising, and/or implementing wastewater management/treatment projects, and a degree in sanitary engineering or related fields.

(v) International economist (2 person-months) will take the lead in economic analysis as described in para 6, including preparation of a brief report on macroeconomic performance and outlook as well as a short summary of sector economic policies and development and institutional arrangement, preparation of a project economic analysis, least cost analysis, EIRR calculation, sensitivity and poverty analysis, where applicable, and performing or compiling socioeconomic surveys necessary to estimate economic benefits/costs of the project and assess willingness-to-pay and affordability of the proposed user charges. He/she should have at least 12 years of international experience in economic analysis of projects including the water supply sector, with a postgraduate degree in economics.

(vi) National economist (3 person-months) will assist the international economist in accomplishing the above-mentioned tasks under his/her responsibility; his/her work will also include economic analysis and preparation of itemized and total cost estimates as stated in para 6. He/she should have at least 10 years of experiences on project economic analyses, and a degree in economics.

(vii) International legal expert (3.5 person-months) will assess and structure the possible PPP Options for the project or discrete components of the project in view of the financial analysis and the existing legal framework and suggest international best practices for taking up such discrete components on PPP through BOT models with viability-gap-funding by the Government, performance based O&M contracts with targeted investments of the contractor in infrastructure, or any combination of such schemes. He/she will develop detailed legal frameworks for the most appropriate option. The legal expert shall consider international best practices, but also consider and recommend options based on a study of the policy, legal, and contractual frameworks in Bangladesh.

(viii) National legal specialist (4 person-months) will assist the International legal expert in assessing the possible PPP Options for the project or discrete components of the project, through various PPP options. The National legal specialist shall provide local law inputs based on a study of the policy, legal, and contractual frameworks in Bangladesh, as well as an understanding of practically workable models based on the capacity of the executing agency, contractors and financial institutions. S/he shall also consider ongoing developments in the PPP space in Bangladesh government.

(ix) International project finance expert (3.5 person-months) will be responsible for the tasks in para 4 and financial analysis described in para 6. In carrying out these tasks, he/she has three broad areas of activity (a) Preparing a project finance model that indicates a project/ project components that can be



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implemented and operated on a financially sustainable basis through PPP, (b) Examining the extent of financial support (capital or O&M) that is required to meet this objective, and (c) Assessing the financial capacity of the executing agency/ government in providing such support and making user payments on an ongoing basis. He/she should have at least 15 years of experience in project finance, preferably in the water supply sector or other public utility sector, with an MBA degree and/or a professional designation such as the Chartered Financial Analyst (CFA) or Chartered Accountant (CA) or equivalent.

(x) National project finance specialist (4 person-months) will assist the international project finance expert in accomplishing all the tasks under his/her responsibility. He/she would also examine and recommend solutions based on the local financial market for project finance transactions in Bangladesh. He/she should have at least 10 years of experience in project finance, with a professional designation such as the CFA or CA or equivalent.

(xi) National social safeguards specialist (3 person-months) will conduct a social safeguards due diligence assessment as stated in para 7, and make inputs in other tasks including paras 8, 9 and 14. He/she will assist the executing agency in undertaking meaningful consultations with project-affected people for drafting the safeguard documents. He/she will ensure that the safeguard documents prepared will be consistent with the proposed project scope. He/she should have at least 10 years of experience in social safeguards work or social and community development, and a degree in social science or related fields.

(xii) National environmental safeguards specialist (3 person-months) will conduct an environmental safeguards due diligence assessment as stated in para 7, and make inputs in other tasks including paras 9 and 14. He/she will assist the executing agency in undertaking meaningful consultations with project-affected people for drafting the safeguard documents. He/she will ensure that the safeguard documents prepared will be consistent with the proposed project scope. He/she should have at least 10 years of experience in environmental management or environmental impact assessment, and a degree in environmental engineering or related fields.

(xiii) National social development and gender specialist (2.5 person-months) will take the lead in tasks described in paras 8 and 9. He/she will coordinate with safeguard specialists in conducting public consultation meetings. He/she should have at least 10 years of experience in social, gender, and poverty assessment, social development, and public participation/consultation, with a degree in social science or related fields.

(xiv) National institutional development specialist (1.5 person-months) will assess progress and achievements of the ongoing capacity development programs and sector reform issues, as stated, and propose, if found necessary, institutional development component to be implemented under the project. He/she will work under the close guidance of the team leader and deputy team leader. He/she should have at least 10 years of experience in institutional development including in the water sector.

Reporting

16. The Consultants will submit to ADB and the government: (i) an inception report within 4 weeks after commencing the services, presenting the approach, a detailed work plan, implementation schedule, and key issues that could affect achievement of the tasks in time, if any; (ii) an interim project report within 14 weeks after commencing the services, which provides progress of various analyses and assessment, provisional project scope, and key issues requiring government consideration and policy decisions; (iii) draft final report



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including all the required information within 24 weeks after commencing the services; workshop will be held and ADB and the government will provide written comments within 3 weeks from the receipt of the report; (iv) final report after receiving the comments on the draft final report from the government and ADB within 30 weeks after commencing the services. Tripartite meetings will be organized among the government, consultants, and ADB after the submission of the inception report, interim report, and draft final report, and at other occasions as required. 17. The Consultants will assist the executing agency in organizing the workshops at least two times, after the submission of interim and draft final reports. The results of analyses and assessments undertaken, preliminary ideas on the project design, remaining work, and timetable will be shared at the first workshop by inviting relevant government agencies, development partners, and other stakeholders. The draft project design including proposed financial and institutional arrangements, cost estimates, and implementation schedule will be presented at the second workshop to obtain feedback from the participants.



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APPENDIX 2: PERSONS MET

Persons met Name Position Asian Development Bank Norio Saito Task Manager Md. Rafiqul Islam Senior Project Officer, Bangladesh Resident Mission Ravi Venkat Peri Principal Public-Private Partnership Specialist M. Teresa Kho Country Director, BRM R. Viswanathan Consultant, Environmental Safeguards Specialist Hafiza Khatun Consultant, Social Safeguards Specialist Gerrit J. Klaassen Consultant, River Morphology Dhaka WASA Engr Taqsim Khan Managing Director Engr. Md. Shahjahan Additional Chief Engineer & Project Director Engr. Md. Mahmudul Islam Superintending Engineer & Deputy Project Director Engr, Md. Abul Kashem Project Director Md. Ruhul Amin Superintending Engineer & Deputy Project Director Md. Abdus Salam Bapary EE/DWSSDP Md. Kamrul Hasan SE/MODS 2 Abul Hashanat SE/RPEM Engr. Md. Ariful Islam Executive Engineer (DWSSDP) G.N.M. Shawkat Hayat Khan SE/P&D circle Md. Manjur Murshid Khondaker Deputy Project Director (DWSSDP) Md. Mosfiqur Rahman SE SMWC Circle Engr. Abdus Salam Executive Engineer (DWSSDP) M.A. Rashid Siddique SE/PD Humayun Kabir Executive Engineer David J Turton TL, Financial & Capacity Building Consultancy (DWSSDP)

Saidabad 1 & 2 WTPs Engr. Md. Shah Alam Executive Engineer, Operations, Saidabad 1 WTP Matthew Ball Project Manager (MTHøjgaard), Saidabad 2 WTP Dr. Engr. Dewan Md. Matiur Rahman

Superintending Engineer, Water & Sewage TP Circle

Md. Serajuddin Additional Chief Engineer, Project Director Grontmij/Carl Bro Shahidur Rahman Prodhan Deputy Team Leader, DWSSDP Simon de Haan Team Leader (DMC), DWSSDP Pascal Jansen Deputy Team Leader (DMC), DWSSDP PPP Office Syed Afsor H. Uddin Chief Executive Officer Institute of Water Modelling (IWM) S. M. Mahbubur Rahman Director, Water Resources Division Mizanur Rahman Senior Groundwater Specialist David M. Khan Associate Specialist PPP Global Investors' Forum: Bangladesh 2012 Lionel Goujon Task Team Leader, W&S Division, Tech Dept, AFD



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Persons met Name Position Annelise Boysen Civil Engineer, Senior Advisor, Danida Business Finance Md. Saiful Islam Chairman, Western Marine Shipyard Ltd. Eric Blanc Embassy of France (Dhaka), Economic Department Syed Shadman Rahim Director, Financial Markets Sales, Standard Chartered Faisal Mubin Chaudhury Country Director, InfraCo, Asia Boris S. Gusev Bangladesh Rep., JSC TECHNOPROMEXPORT Department of Environment Md. Shahjahan Director (Environmental Clearance) Syed Nazmul Ahsan Deputy Director (Environmental Clearance) Roads and Highways Department Engr. Md. Akkas Ali Howlader Assistant Engineer Engr. Iftekhar Kabir Superintending Engineer Shamima Yasmin SDE, Road Safety Department Md. Shahin Sharkar Road Safety Department RAJUK (Rajdhani Unnayan Kartripakkha) Md. Mahbub Ul Alam Joint Secretary, Member (Development) Dr.-Ing. Khurshid Zabin Hossain Taufique

Director (Town Planning)

Degrémont Bruno Hochart Director, Indonesia/Malaysia Martial Dautreye +88 0171 156 5748

World Health Organization Water, Sanitation & Healthy Environments Shamsul Gafur Mahmud National Professional Officer Alauddin Ahmed National Consultant - WSH Standard Chartered Bank Arif Ainul Suman Director Syed Shadman Rahim Director, Financial Markets Sales Sabiqun Naher Sub-Registrar, Gulshan (Registration Complex, Tejgaon) Asraf uz zaman MD, Bangladesh Geo Services



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APPENDIX 3: MEETING NOTES

Register - Meeting Notes

No. Rev. Date Venue Purpose

01 0 19 Sep 12 DWASA Offices Introductory meeting

02 0 24 Sep 12 Saidabad WTP Phase 1 Saidabad WTP Phase 1 site visit

03 0 25 Sep 12 Mott MacDonald Dhaka office

To meet with consultants and discuss the way forward

04 0 27 Sep 12 DWASA ADB kick-off

05 0 01 Oct 12 Project site To familiarize the PPTA team with the project site conditions

06 1 03 Oct 12 DWASA Inception Brief presentation

07 0 10 Oct 12 DWASA, Interim Urgent Sewer Rehabilitation & Development Circle

To familiarize the PPTA team with the Waste Water Projects

08 0 11 Oct 12 Pagla STP To familiarize the PPTA team with the Waste Water Treatment Plant

09 1 11 Oct 12 IWM To discuss ground water and surface water data

10 0 18 Oct 12 DMC at DWASA, F10 To discuss Khilkhet effect on water distribution

11 0 18 Oct 12

DWASA MD office To discuss waste water issues and tripartite meeting

12 0 22 Oct 12 ADB BRM To discuss Meghna River morphology and hydrology

13 0 22 Oct 12 RAJUK To discuss the Khilkhet Water Treatment Plant Project

14 0 25 Oct 12 DWASA Meeting to discuss Inception Report

15 0 30 Oct 12 DWASA Discussion on draft EIA and category

16 0 01 Nov 12 DWASA Meeting to discuss specific technical issues

17 0 05 Nov 12 DMC office at DWASA Discussion on water supply

18 0 08 Nov 12 Roads and Highways Department (RHD)

Introductory Meeting

19 0 11 Nov 12 Department of Environment (DoE)

Introductory meeting and review of DoE categories

20 0 11 Nov 12 IWM To review underground water sources

21 0 14 Nov 12 DWASA Discussion on cost estimate items

22 0 19 Nov 12 DWASA Tripartite meeting for Inception Report

23 0 21 Nov 12 DWASA To discuss options for PPTA input in sewerage and waste water priority projects

24 1 22 Nov 12 MM Office - DWASA Discussion on resettlement issue

25 0 26 Nov 12 MM Office - Gulshan Discuss Financial Assessment of DWASA

26 0 03 Dec 12 DoE To verify categorization of project and obtain agreement to produce IEE, deferring EIA to design phase



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Register - Meeting Notes

No. Rev. Date Venue Purpose

27 0 13 Dec 12 Westin Hotel, Dhaka To obtain commercial bank conditions from Standard Charter staff in connection with the potential private investment portion of the Khilkhet Water Treatment Plant Project

28 0 08 Jan 13 MM Office - Gulshan Project status review

29 0 08 Jan 13 RHD To discuss with RHD regarding extent of land acquired by RHD along Bhulta-Kanchan Bridge & Bhulta – DND (Tarabo), for 4 lane widening program and how the proposed Raw Water transmission pipeline of Khilkhet water treatment plant can be laid within RHD acquired land.

30 0 14 Jan 13 DWASA Project status review

31 0 22 Jan 13 DWASA To discuss issues related to land acquisition

32 0 24 Jan 13 DND canal To obtain additional insight regarding the routing of the raw water pipeline extension

33 0 24 Jan 13 MM Office - Gulshan To discuss the Khilkhet Water Treatment Plant Project status

34 0 27 Jan 13 WHO Discussion on DWASA water safety plan

35 0 14 Feb 13 DWASA To review pipeline corridor width

36 0 14 Feb 13 DWASA with ADB Project status review

37 0 14 Feb 13 DWASA 2F 1. To inform about status of the FM assessment questionnaire

2. To obtain missing information concerning DWASA 20 yr financial forecast

38 0 14 Feb 13 DWASA 10F To obtain additional information concerning DWASA 20 yr financial forecast made by the FCBP project

39 0 14 Feb 13 DWASA 8F To obtain additional information on existing & future Debt Service Liabilities of DWASA.

40 0 14 Feb 13 DWASA 4F To obtain additional information on existing & future DSL of DWASA.

41 0 14 Feb 13 DWASA 8F To obtain additional information on existing & future DSL of DWASA.



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Meeting Notes 1

Date: 19 September 2012 Location: DWASA Offices Purpose: Introductory meeting Attendees: DWASA: Md. Shahjahan, Project Director; Md. Mahmudul Islam, Deputy Project

Director; Md. Ruhul Amin; Md. Ariful Islam; Md. Manjur Murshid Khondaker; Abdus Salam Mott MacDonald (MM): Farook Chowdhury, Project Director; Klaus Schonfeld, Team Leader; Md. Quaisarul Islam, Deputy Team Leader

Issue Action

1. Brief introduction of attendees. None 2. KS assured DWASA that MM will review the Feasibility Study

and endorse its proposals if deemed most appropriate. He then described the benefits of low mechanical content plant design.

None

3. DWASA advised MM that it has operated one 225 M/d WTP for some 10 years and has another 225 M/d WTP pending complete commissioning. DWASA agreed to facilitate a field visit on Sunday, 22 September 2012.

MM’s Tridevi Chakma to follow up

4. The possible inclusion of PPP in the PPTA was discussed and it was noted that DWASA are generally in favor of adopting some level of PPP.

None

5. DWASA advised that a PPP cell was established in the Prime Minister’s office. MM asked if a meeting can be arranged at DWASA’s earliest convenience.

MM’s Tridevi Chakma to set up a meeting for Sunday, 30 Sep 12 (Note: Falko will be here and ADB’s Norio Saito may attend)

6. DWASA advised that reports should be produced in MS Office 2007.

PPTA staff – please note.

/kks



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Meeting Notes 2

Date: 24 September 2012 Location: Saidabad WTP Phase 1 Purpose: Saidabad WTP Phase 1 site visit Attendees: DWASA: Dr. Engr. Dewan Md. Matiur Rahman, Superintending Engineer, Water

& Sewage TP Circle; Engr. Md. Shah Alam, Executive Engineer, Operations, Saidabad WTP Mott MacDonald (MM): Klaus Schonfeld, Team Leader; Md. Quaisarul Islam, Deputy Team Leader; Tridevi Chakma, Finance

Issue Action

1. Mr. Rahman has been in his position since January 2012 and Mr. Alam since 2005.

2. Saidabad WTP Phase 1 has a design capacity of 225 MLD. Phase 2 with the same capacity is under construction on an adjoining property. Phase 1 is a conventional plant with very little automation and no SCADA. It consists of a raw water low lift PS, distribution chamber, 4 sedimentation tanks that also provide flocculation, 12 rapid sand filters, a 2-cell reservoir, and a treated water high lift PS. Peripherals and main equipment include a spacious alum and lime storage building and slurry production facilities, a chlorine ton container building, a gas-driven power generating building, an administration building that houses inter alia a laboratory for the Saidabad WTP and near-by WWTP, 3 backwash pumps, 3 backwash air compressors, 7 high lift pumps, and 2 sludge holding ponds. Drying beds that receive settled sludge were not apparent but were said to exist. Raw water that has deteriorated in quality will receive biological ammonia treatment in a 10-cell facility currently constructed at Saidabad 2 WTP.

3. The plant operates in semi-automatic mode and any automatic functions appear to be effected via relays and analog timers, instead of more modern PLCs (programmable logic controllers). Several control cabinets were opened and it was noted that in all cases, the original wiring was intact without any frayed or lose wires and no jumpers. Plant staff noted that adequate maintenance budget is available.

4. There is no provision for SCADA; consequently, all operational data are manual entries.

5. The laboratory is reportedly operated 24 hours a day in 2 shifts of 2 persons. The lab staff we met was a female with training in microbiology. Her helper had no training in chemistry. The lab is equipped with various devices, including several by Hach. A small handheld turbidity meter is apparently utilized to assess the raw water, together with analytical method to determine SS. A spot check indicated current raw water turbidity of 15 NTU and a corresponding SS of 2~3 mg/L. Together with that information, a pH reading (currently 6.87), and bench-scale treatability experiments, alum dosage is set – currently 18 mg/L. I observed that the dosage is quite high but both the lab staff and the plant Superintending Engineer disagreed. Lab staff noted that adequate maintenance budget is available for replacement equipment and reagants.

6. The Superintending Engineer agreed to demonstrate a filter



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backwash. BW is initiated manually based on wet and dry season and headloss across the filter bed. In the wet season, filters are backwashed every 36 hours and in the dry season, every 12 hours. In both seasons, filters are backwashed if the indicated headloss reaches 1.00 m before the scheduled BW. The sequence of backwashing is: (i) Move selector switch to “Drain” – the inlet and outlet valves close and the drain valve opens (ii) When the level reaches the central trough elevation, move selector switch to “Agitate” – the air valve opens and 2 blowers provide air to agitate the filter bed (iii) After 3 minutes or as otherwise determined by the operator, move the selector switch to “backwash” – the backwash valve opens and one backwash pump adds water to the expanded bed (iv) After 5~6 minutes, a second backwash pump starts and adds more water (v) After 5 minutes or as otherwise determined by the operator, move the selector switch to “Stop” and the air valve and backwash valve close. The operator is instructed to continue the backwash until the water above the bed is clear. I suggested that it is a better practice to stop backwashing when the water is still cloudy in order to establish a “schmutzdecke” sooner.

7. The operator noted that in the 10 years of operation, no mud balls had been observed and that no filter bed had been excavated. If that is true, it indicates that the filter bed design and its operation are very good. The filter bed consists of 0.95 m sand (0.95mm Ø) and 0.05m gravel. Each year, about 0.05~0.10m sand is added to each filter. The filters are not enclosed.

8. The plant is operated by some 130 staff in 3 shifts, including 24/7 security personnel. Dr. Rahman noted that the plant is adequately staffed.

9. The plant appears reasonably well designed and to function as intended. Materials show no sign of significant deterioration after 10 years of operation and construction quality appears adequate. The plant appears well maintained. It was noted during the second site visit to Saidabad that all major maintenance is performed in off-site shops and/or off-site specialist services. This was obviously planned as the maintenance shop is small and without any of the equipment that would be required to undertake major maintenance work. Inspection of electrical and mechanical equipment is performed by on-site staff as is minor maintenance.

10. Without operating data, it is not possible to comment on how well plant is operated, although it appears to be operated adequately. The PPTA team will obtain the data.

Kindly bring to the attention of the writer any errors and omissions. /kks



6

Meeting Notes 3

Date: 25 September 2012 Location: Mott MacDonald Dhaka office Purpose: To meet with consultants and discuss the way forward Attendees: Shireen Akhter, National social safeguards specialist

Farook Choudhury, Project Director & International economist Imtiaz Farooq, National legal specialist Md. Quaisarul Islam, Deputy Team Leader& National water supply expert Sayeedul Kawnine, National institutional development specialist Gazi AH Rehmani, National waste water engineer Dr. Jagadish Chandra Saha, National environmental safeguards specialist Klaus Schonfeld, Team Leader & International water supply expert Falko Josef Sellner, International legal expert

Issue Action 1. Brief introductions none

2. Discussions on technical, institutional, legal, environmental, and social issues

none

3. Discussion on basic contributions from consultants towards production of an “Inception Brief”and presentation of it. It was noted that the “Inception Report” is due 4 weeks after the start of the assignment, which is assumed 18 September 2012, the arrival in Dhaka of the Team Leader. ADB’s Project Officer, S. Saito, will be in Dhaka for this assignment from 30 September to 4 October and expects a presentation of our “Inception Brief” then. To that end, it was agreed that all consultants will review their respective TOR and produce a summary of current knowledge, identify any gaps or modifications, and suggest a practical work plan that addresses the delivery schedule of our various outputs (Inception Report, Interim Report, Final Report, and several workshops). Although 3 October was the expected date for the production of these “Inception Briefs”, kindly submit your writings before that date to facilitate incorporation in a cohesive brief.

All, by 2 October 2012

4. The next meeting with DWASA will be 09:30, Thursday, September. The meeting will be attended by Imtiaz Farooq, Klaus Schonfeld, and Falko Josef Sellner. The purpose of that meeting is to discuss PPP.

Imtiaz Farooq Sayeedul Kawnine (ifavailable) Falko Josef Sellner

5. After the meeting at DWASA, Shireen Akhter, Md. Quaisarul Islam, Gazi AH Rehmani, Dr. Jagadish Chandra Saha, and Klaus Schonfeld will visit Saidabad WTP Phase 2, a 225 MLD addition on the property adjoining the 225 MLD Saidabad WTP Phase 1

Shireen Akhter Md. Quaisarul Islam Gazi AH Rehmani Dr. Jagadish ChandraSaha Klaus Schonfeld




7

Meeting Notes 4

Date: 27 September 2012 Location: DWASA Purpose: ADB kick-off Attendees: Asian Development Bank (ADB) Norio Saito, Project Officer DWASA Md. Shahjahan, Project Director Md. Mahmudul Islam, Deputy Project Director Md. Ruhul Amin, Deputy Project Director MottMacDonald PPTA team members (MM)

Shireen Akhter, National social safeguards specialist Tridev iChakma, Project coordinator Farook Choudhury, Project Director & International economist Md. Imtiaz Farooq, National legal specialist Iqbal Hossain, Project finance specialist Md. Quaisarul Islam, Deputy team leader& National water supply expert Gazi AH Rehmani, National waste water engineer Dr. Jagadish Chandra Saha, National environmental safeguards specialist Klaus Schonfeld, Team leader & International water supply expert Falko Josef Sellner, International legal expert

Issue Action

1. DWASA PD’s opening remarks included reference to (i) DWASA’s groundwater is currently produced from 632

tube wells, (ii) DWASA’s 10-year target of 70/30 ratio of surface water to

groundwater sources, (iii) DWASA’s intention to secure financing including via PPP, (iv) DWASA’s agreement to lend the PPTA team the only

hard copies of the missing 8 volumes of the Feasibility Study (FS) report (Vol 1.3 to Vol, 8 inclusively) for reproduction,

(v) DWASA’s undertaking to provide the PPTA team with copies of the reports referenced in the FS in due course, and

(vi) the fact that DWASA does not have any legal staff members.

DWASA to provide PPTA team with hard copies of the FS volumes except Vols 1.1 and 1.2 DWASA to provide PPTA team with hard copies of the references in FS

2. ADB made a few opening remarks for this kick-off meeting, and (i) acknowledged that Mr Md. Mahmudul Islam, Deputy

Project Director, is the TA coordinator for DWASA; (ii) advised that ADB will field two experts in 2 to 3 weeks to

assist the PPTA team with adherence to ADB’s Environmental and Social Safeguard requirements;

(iii) advised that so far, ADB’s attempts to secure co-financing have been unsuccessful except that the AgenceFrançaise de Développement (AFD) has indicated its interest to invest $100 million; and

(iv) suggested that that the shortfall between ADB’s current loan ceiling for the project of $200 million is expected to be provided by the government and the private sector through PPP.

3. MM gave a short summary on issues related to PPP, including



8

the necessary guarantees, and suggested that a PPP development fund may be a vehicle.

4. ADB asked if land for the Khilkhet project is available and has been secured.

DWASA to advise.

5. DWASA agreed to facilitate a meeting with the PPP cell. 6. All present were advised of the following activities:

(i) 01 Oct 12 – Khilkhet project site visit (ii) 02 Oct 12 – Meeting with PPP cell (iii) 03 Oct 12 – Inception Brief presentation at DWASA (iv) 04 Oct 12 – Wrap-up meeting at DWASA

(i) MM to coordinateand providetransport

(ii) DWASA advisedthat the meeting isset for 11:00

(iii) DWASA to advisethe venue and thetime

(iv) DWASA tocoordinate with ADBand advise venueand time




9

Meeting Notes 5

Date: 01 October 2012 Location: Khilkhet Water Treatment Plant site Purpose: To familiarize the PPTA team with the project site conditions Attendees: DWASA Md. Mahmudul Islam, Deputy Project Director Aqua Consult engineer Mott MacDonald PPTA team members (MM)

ShireenAkhter, National social safeguards specialist Shireen Akhter’s proposed assistant Sinora Chakma, Gender Specialist Md. Quaisarul Islam, Deputy team leader& National water supply expert Gazi AH Rehmani, National waste water engineer Dr. Jagadish Chandra Saha, National environmental safeguards specialist Klaus Schonfeld, Team leader & International water supply expert

Issue Action 1. Sites visited, in order (i) Injection point into DND canal (Saidabad WTP future raw

water source) (ii) Shitalakhya River crossing at Tarabo bridge (iii) Transmission pipeline (TL) route to Booster Pump Station

(BPS) along Dhaka-Sylket Hwy. (iv) BPS in paddy field / flood plain (v) Along Mahajampur Road to intake site (Note: this road is

not the pipeline route) (vi) Intake site on Meghna River (vii) TL route past BPS along Dhaka-Sylket / Bhulta Hwy. (viii) Shitalakhya River crossing at Kanchan bridge (ix) TL route past Kanchanbridge along Dhaka-Sylket / Bhulta

Hwy. (x) Khilkhet WTP site (xi) Note: the PPTA team did not travel along the TL from

Khilkhet WTP site to Dhaka water distribution system

2. Injection point into DND canal (i) The canal, which is the raw water source for Saidabad 1

WTP and will be for Saidabad 2 WTP when it comes on line in December 2012 and provides irrigation water, is about 20m wide on average and bounded on both sides by a wall less than 1m high. It is reportedly maintained by DWASA although it was not obvious of what that maintenance consists. In the area of the injection point, the canal is surrounded by domestic and commercial housing as well as some industrial buildings. The water in the canal appears to be weak sewage and is said to contain high ammonia content. Note 1: Alternate routing of Meghna water than via a polluted stream will be investigated. Note 2: the high ammonia content is the reason for an expansive biological ammonia reduction process unit at Saidabad 2, which will serve Saidabad 1 WTP as well. When Saidabad 3 is completed, the three plants will then be fed by raw water from Meghna River through two



10

2200mmØ pipelines that are currently part of this project, making the ammonia reduction process unit at Saidabad 2 redundant. Note 3: If sufficient funding cannot be identified for this project, these two pipelines could be deleted from this project and included in the Saidabad 3 project, which is planned for 2025. That would mean that Saidabad 1 and 2 would continue to utilize raw water from the DND canal, which is reportedly deteriorating rapidly.

3. Shitalakhya River crossing at Tarabo bridge (i) Crossing the Shitalakhya River utilizing the bridge as a

supporting structure will be considered.

Structural engineer toinvestigate

4. TL route to BPS (i) Entire route is through paddy fields. (ii) Will require funds for rights-of-way and limited land

acquisitions for by-pass / access chambers.

5. BPS in paddy field / flood plain (i) Will require funds for right-of-way and land acquisitions for

BPS site and access road. (ii) Eliminating BPS will be investigated. This would mean

that the Intake PS would supply directly to Khilkhet WTP and the DND canal. Note: Note 1 in 2. (i) refers.

6. Intake site on Meghna River (i) Informal discussions with the some long-term local

residents supports the general estimate in the FS on bank erosion rates.

(ii) The local opinions varied from 1.5 m/yr to 60 m/10 yr, with one elderly man claimed about 150 m in 20 years, referring to a boat in the Meghna that he remembers would have been the bank.

7. TL route past BPS (i) The route is in paddy field for about 2 km and then

parallels the Dhaka-Sylket / Bhulta Hwy.

8. Shitalakhya River crossing at Kanchan bridge (i) Crossing the Shitalakhya River utilizing the bridge as a

supporting structure will be considered.

Structural engineer toinvestigate

9. TL route past Kanchan bridge (i) No remarkable features

10. Khilkhet WTP site (i) The 25 ha site is near blocks of government housing

units. Access appears reasonably good although DWASA noted that it is not.

(ii) The site is reportedly owned by several (perhaps many) private parties, which could make acquisition a lengthy process.

(iii) The PPTA will coordinate closely with DWASA to determine the final site location.

(iv) A different site would require additional geotechnical investigations.




11

Meeting Notes 6, Rev. 1

Date: 03 October 2012 Location: DWASA Purpose: Inception Brief presentation Attendees: Asian Development Bank (ADB) Norio Saito, Task Manager Md. Rafiqul Islam, Senior Project Officer, Bangladesh Resident Office DWASA Engr. Taqsim Khan, Managing Director

Md. Shahjahan, Project Director Md. Mahmudul Islam, Deputy Project Director Md. Ruhul Amin, Deputy Project Director

Md. Mosfiqur Rahman, SE SMWC Circle Abul Hashanat, SE/RPEM G.N.M. Shawkat Hayat Khan, SE/P&D circle Md. KamrulHasan, SE/MODS 2 Md. Abdus Salam Bapary, EE/DWSSDP M.A. Rashid Siddique, SE/PD Design and Management Consultants (DMC) Simon de Haan, Team Leader, DWSSDP Mott MacDonald PPTA team members (MM) Shireen Akhter, National social safeguards specialist Sinora Chakma, National Gender Specialist Tridevi Chakma, Project coordinator Farook Choudhury, Project Director & International economist Md. Imtiaz Farooq, National legal specialist Iqbal Hossain, National project finance specialist Md. Quaisarul Islam, Deputy Team leader& National water supply expert Gazi AH Rahmani, National waste water engineer Dr. Jagadish Chandra Saha, National environmental safeguards specialist Sinora Chakma, Gender Specialist Klaus Schonfeld, Team Leader & International water supply expert Falko Josef Sellner, International legal expert\

Issue Action

1. DWASA Managing Director welcomed attendants. 2. PPTA Team Leader presented the Inception Brief, noting that

the Interim Progress ReportInterim Progress Reportwould be issued on 16 October 2012. It was noted that only one of eight volumes was available prior to 3 October (all but one (the drawings in Volume 8) of the missing documents were received following the presentation). Discussions ensued pertaining to several topics in the Brief as well as on the Issues presented. Summaries follow.

3. PPP (i) It was noted that the draft PPP law is considered

exemplary and as such, if promulgated, will be an advantage

(ii) PPP models that will be considered include BOT6 and BOO7. If BOO is used, it is recommended to exclude

6 Build – Operate - Transfer

7 Build – Own - Operate



12

transfer. If BOT and BOO are not feasible, Joint Venture may be an option, in which case, DWASA would need to become a corporate entity.

(iii) Concession agreements will not qualify because the project is greenfield with no assets to be taken over.

(iv) The PPP cell in the Prime Minister’s Office will hold a conference on 7-8 December. The scheduled PPTA PPP workshop will be advanced to immediately following the PPP cell conference so that the conference participants, especially private investors, are able to participate in the workshop.

(v) DWASA noted that it has a PPP cell. 4. Supply - Demand curves

(i) Agreement is needed on baseline data, including population and growth rates, groundwater quantities, and NRW8 reduction rate.

DWASA and IWA to provide data

5. Environmental safeguards (i) The project is class B according to ADB and category red

according to the Government. PPTA team to undertake many baseline studies.

(ii) If all project components are identified during PPTA then an EARF9 will not be required. If some components are uncertain or to be finalized during implementation, the consultants are to provide a framework/EARF.

6. Social safeguards (i) Need to undertake large survey in current route. Need to

revise plan if route is changes,

7. Procurement (i) Procurement plan will be consistent with proposed PPP

scheme.

8. Issues (i) Need baseline data and more in depth study. Need

experts to review river morphology, geotechnical, hydrology, and hydrogeology reports.

(ii) Ways to save money that will be considered: rerouting transmission line, using steel as construction material

(iii) Another option is to defer investment of TL to Saidabad until S3 is built.

(iv) DND Channel is polluted. Consider other options. (v) Is the sewerage master plan approved? (vi) Need a big survey team for social safeguard.

9. The following comments and questions were made/raised after the inception brief presentation: (i) The project has several components. Which component

will be financed by PPP? (ii) A resettlement action plan should be included. (iii) FS does not include seasonal variation. The flow of

River Meghna may be affected by factors other than climate/nature. Data from Bangladesh River Commission were used in choosing intake site. The site is historically stable.

(i) It was noted that the most likely candidate is the WTP through BOT, with a take-or-pay condition. (ii)A RAP will be included in PPTA report (iii)The review of the hydrological report will

8 Unaccounted-for water

9 Environmental Assessment and Review Framework



13

(iv) There is uncertainty about riverbank/erosion rate. (v) If a different route is considered, additional soil testing

will be required. (vi) NRW can be reduced down to 10-15% as all pipes are

being replaced. There are meters for measurement. (vii) There is a large gap between IWM’s sustainable

abstraction rate and that in the FS. (viii) If this project is to be financed by PPP, DWASA can

send a proposal to the line ministry to forward to the PM’s office. In principal, the PPP cell can approve the project to assess its suitability for PPP.

determine if sufficient data were available for an adequate basis of design (iv)The review of the morphology report and intake structure details will determine if sufficient data were available for an adequate basis of design (vi)Review of methodology and IWM data will corroborate this assumption and a representative NRW reduction rate will be used to determine a safe supply-demand relationship (vii) Meetings with IWM have been scheduled to ascertain the reason for the discrepancies and a representative rate will be agreed with DWASA to determine a safe supply-demand relationship

10. ADB Task Manager raised four issues on which DWASA’s guidance is required: (i) Funding Gap: Total project cost for option 2 is US$700

million. ADB has committed US$185 million, Government has agreed to commit about US$210 million, AFD has agreed to co-finance US$100 million. A funding gap of US$200 million remains. There are 4 ways to deal with the funding gap: 1. Increase ADB funding 2. seek other cofinanciers 3. 3. PPP 4. Drop, change, or defer components of the project

(ii) Waste Water Management: sewerage master plan is approved. The ADB loan project cannot cover investment in waste water management. But design, etc. can be supported. Is WB planning to finance it? To what extent should the ADB loan project address this issue? The waste water component will not only focus on Khilkhet WTP’s effect on waste water management but may also include priority projects in waste water management.

(i)The PPTA report will consider all options (ii)The PPTA report will include the review of the master plan with special emphasis of 9 priority projects as well as recommendations for sludge utilization and/or disposal not only from the Khilkhet WTP but also from the existing and planned STPs that are needed because of the additional hydraulic load on the collection system in the Gulshan area



14

(iii) How will Gender issues be addressed? ADB considers this project under effective gender mainstreaming. Perhaps inclusiveness can be addressed by considering households headed by females and the poor access to treated water. This does not have to be limited to Khilkhet.

(iv) Demand supply projection: More recent data needed. Does DWASA intend to expand its service area or improve access in currently services areas?

(iii)We will review to what extent disadvantaged groups can benefit from the improved water and sanitation systems (iv)Re data: item 9. Refers. From early discussions with DWASA and references in the FS, DWASA intends to expand its service area and improve access in all service areas

11. DWASA Managing Director closed the meeting noting that gaps have been identified and need to be minimized. The inception brief and proposed schedule is acceptable.

Kindly bring to the attention of the writer any errors and omissions. tc/ks



15

Meeting Notes 7

Date: 10 October 2012 Location: DWASA, Interim Urgent Sewer Rehabilitation & Development Circle Purpose: To familiarize the PPTA team with the Waste Water Projects Attendees: DWASA Dr. Mananan Mia, Project Director Dhaka Water Supply and Sanitation Project Mr. Kazi Habib Ullah, Executive Engineer, DWSSP Mott MacDonald PPTA team members (MM)

Ary de Koning, International Waste Water Management Expert Md.Quaisarul Islam, Deputy Team leader& National water supply expert Gazi AH Rahmani, National waste water engineer

Item

The priority projects of the Sewerage Master Plan are now clustered in 5 packages under an on-going World Bank/IDA Project. The budgets of these packages were provided and are presented in the table below. The project development is in the stage of ‘preparation of tender documents’ and ‘pre-qualification of contractors’.

Another project titled “Western Trunk Sewer Line.” is a government funded project for the period July 2010 to Dec 2012. The budget is Tk. 8389 lakh (US$ 10.48 million).

Numbers of packages are tendered and it is most unlikely to be completed within the project period. The main package is Western Trunk Sewer Line and area covered is Mohammadpur- Japan Garden City- Hazaribagh, also from Nilkhet&Rayer Bazar. Also included are four pumps having a capacity of 300 m3/h each.

Although evaluation of other packages is in progress, budget is not yet finalized.

Contracting Packaging of Phase 1 Priority Projects

No. Packages* Details

Investment cost estimate ($ million)

1. Sewerage system Gulshan

Construction of a new sewerage system in Gulshan

11

2. Sewerage system Banani and Tejgaon + 2 pump stations

Construction of a new sewerage system in Banani/Tejgaon

6.5

3. Trunk main (Narinda to Pagla) and reconnection of laterals

Replacement of the eastern trunk sewer from Madhubag (near Tejgaon) to Pagla

12

4. Trunk main (Madhubag to Narinda) incl. 2 pump stations and reconnection of laterals

Replacement of the eastern trunk sewer from Madhubag (near Tejgaon) to Pagla

12

5. Rehab Pagla STP Rehabilitate and augment the capacity of the existing treatment process at Pagla Sewage Treatment Plant (design peak capacity of 120 MLD; current capacity: QA = 96,000 m3/day; area 110.5 ha)

21

Total under WB loan 62.5 6. Tejgaon/Gulshan trunk

sewer Construction of new trunk sewer for re-directing waste water from Tejgaon and Gulshan to the new Dasherkandi system

1



16

Meeting Notes 8

Date: 11 October 2012 Location: Pagla Sewer Treatment Plant, Syampur, Dhaka Purpose: To familiarize the PPTA team with the Waste Water Treatment Plant Attendees: DWASA Mr. Humayun Kabir, Executive Engineer Chief chemist Mott MacDonald PPTA team members (MM) Md. Quaisarul Islam, Deputy Team Leader & National water supply expert Ary de Koning, International Waste water Management Expert Gazi AH Rahmani, National waste water engineer Dr. J. C Shaha, National Environment Specialist Ms. Nabila Rahman, Junior Environmental Specialist

Item

1. DWASA operates a sewage treatment plant (STP) at Pagla located on a 110.5 ha site

approximately 8km from the city centre in the south-east of Dhaka City and approximately 1km north of the Buriganga River. The Pagla STP was originally constructed in 1978 and provides treatment of the waste water collected by the central sewerage system and is currently the only treatment facility in the city, although another is in preparation to service the Hartijheel scheme located at Dasherkandi.

2. The design capacity is 96MLD (average flow rate) and 120MLD (peak flow rate). Due to damage of the trunk mains and sewerage system, the actual flow rate entering the Pagla STP is approximately 30-40MLD; i.e., the treatment plant is significantly under-loaded and should provide a high level of treatment.

3. Pagla has undergone a number of refurbishments, the last of which was 1991-2,

financed by JICA. A condition assessment was undertaken on the treatment plant and which was the subject of Design Memorandum No. 1. The table below gives the basic design performance of the various stages of treatment that should result in a 50 mg/L BOD5 and 60 mg/L suspended solids discharge effluent:

Table 1: Key Design Characteristics of Pagla Sewage Treatment Plant

Water Quality

Parameters

Influent

(mg/L)

Primary Sedimentation Tank Facultative Lagoon Total Removal

Ratio (%) Removal Ratio

(%)

Effluent

(mg/L)

Removal

Ratio (%)

Effluent

(mg/L)

BOD 200 40 120 59 50

75

SS 200 60 80 25 60 70

4. The following table indicates the performance of the Pagla STP. Although the present treatment performance complies with the design removal rate (75% for BOD5 and 70% for SS), the effluent quality (BOD5) exceeds the existing DoE effluent standards.



17

Table 2: Water Quality and Removal Rate of BOD5 and Suspended Solids (2009-2010)

Date

Inlet

(mg/L) PST effluent (mg/L)

Facultative Lagoon

effluent (mg/L) Overall Removal (%)

BOD SS BOD SS BOD SS BOD SS

Average 340 351 127 119 49 58 85 83

5. There is limited unused area remaining on the existing site hence the existing treatment process of facultative ponds cannot be utilized to meet the long-term requirements of the Pagla catchment. Further, the existing treatment plant suffers from a number of operations and maintenance problems which decreases the quality of the effluent, incl.: (i) Primary sedimentation tank scrapers do not efficiently cover the tank floor hence

sludge is not collected and removed. It is recommended to fix the scrapers or de-rate the capacity of the primary sedimentation tanks to 100MLD.

(ii) The facultative ponds have accumulated sludge which should be emptied (iii) It is reported by the Executive Engineer Mr.HumayunKabir that the proposed

extension to 200 MLD is possible with the existing lagoons (4 2-cell basins of different capacities). No additional land is available.

(iv) Only one Sedimentation Tank was operating due to lack of influent/raw sewage. (v) There are 64 approved staff but currently only 40 on site of which eight are for

routine and preventive maintenance. (vi) There are 27 pump stations in the collection area of which only 18 are in operation.

Operation is under the jurisdiction of the Zonal offices but maintenance is carried out by the eight staff of the STP.

(vii) No disinfection is carried out nowadays. The design dosage is 3 mg/l of chlorine gas. The disinfection system is not operational.

(viii) The outfall of the treated sewage/effluent is to the Buriganga river at a distance of 2 km through pipes but could not be visited due to inaccessible road conditions..

(ix) Due to toxic substances of industrial waste water being mixed with the ‘influent’, the fish from the lagoons are caught and destroyed twice a year, because of toxicity found in them as tested by Food Department and found to be unsuitable for human consumption. These are fresh water fish including Telapia, Rui, and Katla.

(x) The spacious laboratory was found in neat and tidy condition but only tests BOD & SS. It does not have the facilities to test COD nor for toxic substances. Although not required by the official regulations, the laboratory should be upgraded including facilities for testing COD as toxic substances may influence the BOD, which will give a wrong picture of the actual treatment efficiency. Such a proposal is being considered by the government. Measures to eliminate the discharge of toxic industrial substances are reportedly not in place but it is highly recommended to do so.

(xi) The location is also used as a yard for random storage of concrete pipes. There is a huge quantity of pipes of different diameter all over the premises. These are to be used for sewer & drainage systems.

(xii) The facility seems to be operated and maintained properly at the current limited capacity.

(xiii) The available land is quite large and seems more than sufficient for the projected 1st and 2nd phase STP extension with trickling filter technology with a much smaller footprint. In 3rd phase a plan for decommissioning of the existing lagoons to be replaced by a trickling filter system is proposed what will allow further extension of the STP to meet future increased influent.

Kindly bring to the attention of the writer any errors and omissions. AdK/ks



18

Meeting Notes 9

Date: 11 October 2012 Location: Institute of Water Modelling (IWM), House 496, Road 32, New DOHS, Mohakhali. Purpose: Meeting with IWM Water Resources Planning Division Attendees: Institute of Water Modelling (IWM)

Mahbubur Rahman, Director, Water Resources Planning Division Shahidur Rahman Prodhan, Deputy Team Leader, Master Plan and Design of Priority Works for Sewerage System of Dhaka City Mizanur Rahman, Senior Groundwater Specialist, Water Resources Planning Division David M. Khan, Associate Specialist Imtiaz Taher, Water Supply and Sanitation Specialist. Mott MacDonald (MM) Klaus Schonfeld, Team Leader Tridevi Chakma, Finance

Issue Action

1. Population FS was done in 2009-2011. Demographic data and assumptions

are provided in the FS. Latest 2011 census data is available from the BBS.

Obtain 201census data.

2. Groundwater Availability (i) Sustainable Yield

a. Upper Aquifer: 600 million m3/yr (1643 MLD) b. Lower Aquifer: 139 million m3/yr (381 MLD) c. Total Safe Yield: 739 million m3/yr (2024 MLD)

(ii) Current abstraction is large. There are many tube wells that are not recorded. In 2004-05, more than 1300 private and industrial tube wells could be identified but there are more now. Abstractions from these wells are unknown. DWASA records abstraction only from its wells.

(iii) Only DWASA should be able to use aquifer. All unregistered wells should be shut down. DWASA’s current wells are unplanned. It is possible to plan the water distribution from the wells.

(iv) All DWASA wells are metered. DWASA produces a 1 page report everyday about its abstraction. DWASA also produces a monthly MIS report. All DWASA wells have similar designs but different yields, on average 2m3/s. Most DWASA wells have gas/diesel generators.

(v) A survey of about 450 tube wells was undertaken by the DMC consultants in 8 zones in 2009. More details can be obtained from Simon de Haan.

(vi) IWM noted that wells should be stopped for 4 hours a day to assist in aquifer recharge. There is high demand for groundwater in central Dhaka. Pumps should be moved to the periphery of Dhaka to relieve the concentrated extraction.

ADB suggests reducing the number of wells by 50%. IWM suggests that a 15% reduction in production is sufficient.

3. Distribution (i) WaterGEMS, a multi-platform hydraulic and water quality

distribution model. Details can be obtained from Simon de

(i) KKS to meet

with Simon de



19

Haan10, Team Leader, DWSSDP. (ii) Dhaka has a single distribution network. This is being

reorganized into 88 separate Distribution Management System (DMS) controlled areas under a $200 million project. This pressurized system is expected to reduce NRW to 15%.

(iii) DWASA currently has a flat rate tariff that should be changed to a block tariff structure before pressurization to prevent wastage.

Haan to obtain Khilkhet water service area

(ii) Q Islam to find out from DWASA when the project is scheduled for completion

(iii) KKS will include in PPTA report

4. Sewerage Master Plan (SMP) The SMP Identifies 9 priority projects. Master plan is comprehensive. About 75% of water from Khilkhet WTP will end up in the sewerage system. The SMW considers increase in population and therefore accounts for increased future water use regardless of the source. A sewage treatment plant, Dhasherkandi, located near Khilgaon, is currently in tender stage.

5. Morphology. IWM was not engaged in the river morphology study. The assigned morphologist used time series of satellite imagery to identify the most stable river bank. IWM has river flow data but these data may not have been utilized in the river morphology study. IWM is unable to review the morphology study due to conflict of interest.

KKS to engage river morphology expert

6. DND canal is no longer used for irrigation. Present intake from Sitalkhya will be closed. IWM thinks there is no substantial industrial effluent but agrees that the adjacent population dump refuse into the canal.

KKS to review recommendation re DND canal use

7. Reports and data from IWM. The Director, Water Resource Planning, IWM noted that should we require any reports or data, we can request the same via email. IWM can provide us with reports and data that are not restricted. We borrowed one of DWASA’s monthly MIS reports on production and billings for copying and return.

TC to return borrowed report Note: report was returned Monday, 15 Oct 12

8. IWM noted that another water treatment plant is planned; i.e., a 150 MLD plant for the Tetuljhara – Bhakurta well field.

TC to obtain location and planned completion date

Kindly bring to the attention of the writer any errors and omissions.

tc/kks

10

0175 118 0377, [email protected]



20

Meeting Notes 10

Date: 18 October 2012 Location: DMC at DWASA, 10th Floor Purpose: Meeting with DMC re Khilkhet effect on water distribution Attendees: Design & Management Consultancy Services (DMC) Pascal Jansen, Deputy Team Leader Institute of Water Modelling (IWM)

David M. Khan, Associate Specialist Adil Hassan, Engineer Rocky Chowdhury, Engineer Mott MacDonald (MM) Klaus Schonfeld, Team Leader Farook Chowdhury, Economist and Project Director

Issue Action

Pascal and David explained their work with the distribution model and the extent to which water pipes will be restored – Pascal noted that “all” pipes would be replaced (some 2000 km in 7 zones plus 500 km in zones 1 and 2.

Zones on map refer to well fields. Well/pump/meter data:

(i) total number of wells 626 (ii) nominal well pump capacity 2 m3/s (iii) actual capacity closer to 1 m3/s (iv) all wells metered but accuracy is questionable

(i) MM to adjust reference to number of wells (ii) – (iii) Discuss with DWASA as to effect on supply data (iv) Same as (iii)

Served population

(i) DMC can provide number of customers (connections) (ii) DMC can provide current DWASA service area

(i) Tridevi to obtain (ii) Tridevi to obtain

FS Vol V1- Transmission Line report – DMC can provide soft copy

Tridevi to obtain


tc/kks



21

Meeting Notes 11

Date: 18 October 2012 Location: DWASA, MD office Purpose: Meeting with MD to discuss waste water issues and tripartite meeting Attendees: DWASA Engr. Engr Taqsim Khan, Managing Director

Mott MacDonald (MM) Klaus Schonfeld, Team Leader

Issue Action

MM raised the question whether funding for Phase 1 waste water priority projects as listed in sewerage master plan have funding in place.

MM will follow up with letter

Further to recommendations in the Inception Report regarding STP sludge and septage management, MM raised the question whether DWASA is interested to discuss ADB support regarding those or any other waste water related issues.

MM will follow up with letter

DWASA confirmed that septage management is provided entirely by private entities, not DWASA.

MM will take into account regarding septage management proposals.

DWASA confirmed that a 50-year water supply master (WSMP) plan is under preparation by Deccon and IWM and that the sewerage master plan (SMP) currently in the approval stage would be reviewed within 10 years and at that time, the decision to extend the SMP to coincide with the WSMP would be taken.

It was agreed that MM would provide DWASA with three hard copies of the Inception Report on Sunday, 21 October 2012.

3 copies of the IR were delivered to DWASA on 21 October 2012.

DWASA set the earliest date for an IR tripartite meeting as Thursday, 25 October 2012 at 11:00.

MM to coordinate with ADB and advise




22

Meeting Notes 12

Date: 22 October 2012 Location: ADB BRM Purpose: To discuss Meghna River morphology and hydrology Attendees: ADB Md. Rafiqul Islam, Senior Project Manager Zahir Uddin Ahmad, Team Leader Water Resources Management

Mott MacDonald (MM) Klaus Schonfeld, Team Leader

Issue Action

MM briefly reviewed the major aspects of the project, noting that the PPTA is essentially a due diligence exercise.

MM enquired about prominent experts in Bangladesh who may be involved in reviewing detail reports:

(i) River morphology (ii) Hydrology (iii) Hydrogeology (iv) Geotechnical

Mr Ahmad suggested to contact Mr M. Zaman11 as a candidate for the morphology and geotechnical expertise and also good source ofcontacts for the other two disciplines. He also suggested to discuss the morphological aspects with Mr Sazed Karim12, a hydrologist who is at the time engaged and could therefore only participate informally.

The source of water was discussed briefly.

(i) Sitalkhya River is polluted and getting worse but the main issue is that it does not carry sufficient quantity.

(ii) Balu River may carry sufficient quantity but is extremely polluted and in addition, would present major difficulties connecting with the distribution network serving the intended areas. It was noted that no matter how polluted raw water is, it can be treated at a cost

(iii) Meghna River carries sufficient quantity and the current level of pollution is easily met by conventional treatment; however, since this is regarded a 50-year project, the security of supply may be in some doubt. If the Tipaimukh hydroelectric project in India proceeds and if it is constructed with a hydro dam and an irrigation barrage as some fear, then the Meghna flow regime would be severely affected.

(i) We agree with the FS

findings and conclusion (ii) This may be an issue

to pursue as the B was not considered as a raw water source

(iii) This is obviously beyond the scope of the PPTA and should be a topic dealt with by the Joint River Commission.


11

0171 502 2212 12

0171 152 6140



23

Meeting Notes 13

Date: 22 October 2012 Location: RAJUK Purpose: To discuss the Khilkhet Water Treatment Plant Project Attendees: RAJUK

M. Mahbub Ul Alam, Joint Secretary (GoB) & Member (Development) RAJUK, Ministry of Housing & Public Works

Dr.-Ing. Khurshid Zabin Hossain Taufique, Director (Town Planning), Mott MacDonald (MM) Klaus Schonfeld, Team Leader

Issue Action Mr Alam explained that RAJUK is essentially the Capital (i.e., Dhaka City) Development Authority responsible for planning, development, and development control. In this last respect, it was noted that RAJUK is empowered through the Town Improvement Act 1959 to approve major infrastructure projects, such as this project.

Falko and Imtiaz: please note and incorporate

Mr Alam noted that (i) RAJUK is involved in a >15 year BOT for the ongoing 15 km elevated toll road project. MM advised that the PPP Office is planning a PPP conference on 7 and 8 December 2012 and that (ii) MM is planning a PPP workshop on 9 December

(i) Imtiaz should follow up and ask PPP cell to invite RAJUK (ii) KKS to invite RAJUK by email

Mr Alam noted that RAJUK is in the process of planning a “diplomatic enclave” in East Baisara together with a new arterial road on a 100 ft (~30 m) RoW from about the US Embassy 6.5 km to Balu Road and from there some 15 km east to Bhulta, connecting with the national highway. Mr Alam noted that all of the property has been acquired.

Q Islam to confirm that this is approximately the route of our potential alternative transmission pipeline route.

Mr Alam and Mr Taufique reviewed the “300 foot Road” and the Khilkhet WTP site proposed in the feasibility study (FS). They noted (i) that it would be “difficult to impossible” to acquire the identified property as it is part of the new town Purabachal City, planned to house 1 million people within 10 years. They indicated on a map the location of a water treatment plant site and in that regard, asked (ii) if our project could supply water for the Purabachal City. MM advised that technically, that would be a relatively simple addition to our project13 as 1 million represents only about 5% of the design population at project horizon year 2030; however, since it is not in DWASA’s current service area, this would be a matter for RAJUK and DWASA to consider although MM agreed (iii) to advise ADB of RAJUK’s interest for ADB support.

(i) MM to discuss with DWASA; Mr Taufique agreed to email a plan of the area

Note: email was received 24 Oct 12.

(ii) MM to discuss with DWASA

(iii) MM to email ADB Note: email sent with copy of these Meeting Notes 13.

The source of water for the project was discussed briefly.

(iv) Sitalkya is polluted and getting worse but the main issue is that it does not carry sufficient quantity.

(v) Buriganga River was not considered a potential source in the FS. It may carry sufficient quantity but is extremely

(iv) We agree with the FS

findings and conclusion (v) This may be an issue

to pursue as the

13

The WTP site identified on the planning map for Purabachal City is located due north of, and fairly near, our

raw water transmission line just west of the Kanchan Bridge.



24

polluted and in addition, would present major difficulties connecting with the distribution network serving the intended areas. Mr Alam noted that the Buriganga has several meters of accumulated benthic deposits – MM noted that no matter how polluted raw water is, it can be treated, albeit at a cost.

(vi) Meghna River carries sufficient quantity and the current level of pollution is easily met by conventional treatment.

Buriganga was not considered as a raw water source – Q Islam to investigate

Mr Alam asked why the WTP is not located near the intake. MM advised that the FS considered that location but rejected it14 and that in any case, the cost of piping and pumping would be essentially be the same.


14

(i) This would meet one of the criteria in the FS; i.e., that “The distance from intake to treatment plant

should be as short as possible.”

(ii) The location of the water treatment plants (Khilkhet I and Saidabad I and II) has in this connection been

considered fixed, although the possibility of changing the location of Khilkhet I have also been considered

(option 1B: Treatment Plant at intake location).

(iii) The originally planned location of a new treatment plant is in the Khilkhet area. The FS team considered

the possibility of changing the location of the treatment plant to the intake location at Meghna as this would

offer some advantages; e.g., no pumping of raw water and no problems with sludge disposal in populated

areas. It was concluded that it will not be advantageous to move the plant to Meghna, considering the fact

that Saidabad I and Saidabad II are already located inside Dhaka and raw water needs to be pumped there

anyway.



25

Meeting Notes 14

Date: 25 October 2012 Location: DWASA Offices Purpose: Meeting to discuss Inception Report Attendees: DWASA

Kamrul Chowdhury, Deputy Managing Director Md. Abul Kashem, Project Director Md. Mahmudul Islam, Deputy Project Director Sirazuddin, Project Director of Saidabad 2 and 3 Md. Ruhul Amin Md. Ariful Islam Abdus Salam Rafiqul Islam Quazi Khairul Mott MacDonald (MM) Farook Chowdhury, Project Director Klaus Schonfeld, Team Leader Md. Quaisarul Islam, Deputy Team Leader Tridevi Chakma, Project Coordinator

Issue Action

1. DMD introduced the meeting, noting that since ADB was not present, it was not a tripartite meeting. MM advised that ADB Task Manager has provided comments and that the meeting should proceed without him or the ADB representative at the BRM due to his unavailability.

2. DWASA noted that the inception report (IR) must be reviewed by the consultants that prepared the feasibility study (FS). The team leader of the FS is not available until the second week of November; however, it may be possible for him to provide feedback by email.

3. KS noted that ADB and DWASA need to consider whether they would agree that MM reviews feasible alternatives to the current recommendation in the FS. DWASA noted that a Development Project Proposal (DPP) has already been submitted for land acquisition of the recommended transmission route because the FS was accepted by ADB. This presents a dilemma for MM who are required to undertake a due diligence exercise through this PPTA.

4. MM assured DWASA that we intend to agree with DWASA on the basis on any conclusion.

5. DWASA requires more time to review and comment on the inception report. DWASA is to send comments on the IR to the TA team before the next meeting. DWASA also wishes to meet with the TA team prior to the rescheduled tripartite meeting. However, no date was agreed upon.

M. Islam to set date

6. It was agreed that the tripartite meeting will be held on 6 November 2012.

M. Islam to set time




26

Meeting Notes 15

Date: 30 October 2012 Location: DWASA Purpose: Discussion on draft EIA and category Attendees: DWASA Md. Mahmudul Islam, Deputy Project Director Mott MacDonald PPTA team members (MM)

J.C. Saha, Environmental Safeguards Specialist

Issue Action

1. Dr. Saha explained the requirement of environmental safeguard for ADB as well as DoE of the project.

2. Dr. Saha confirmed that the project falls under red category as per existing GoB 1997 rules and regulation and also considering the nature and size of the project.

3. Dr. Saha informed that our review of the EIA in the feasibility study indicates major gaps and that it does not follow DoE norms to obtain ECC.

4. Mr. Islam noted that he realizes the fact and that he will take necessary steps for rectifying the feasibility report up to DoE standards.

Kindly bring to the attention of the writer any errors and omissions. jcs/kks



27

Meeting Notes 16

Date: 01 November 2012 Location: DWASA Offices Purpose: Meeting to discuss specific technical issues Attendees: DWASA

Md. Mahmudul Islam, Deputy Project Director Mott MacDonald (MM) Farook Chowdhury, Project Director Klaus Schonfeld, Team Leader Md. Quaisarul Islam, Deputy Team Leader

Issue Action

1. MM provided the agenda for this meeting (Attachment 1 refers).

2. Re 1. Sewerage, DWASA

(i) confirmed that the funding for Phase 1 sewerage priority projects is in place (4 packages by WB and one package by the government;

(ii) will confirm by 6 November if ADB support may be sought for 3 Phase 2 priority projects; and

(iii) will confirm by 6 November if ADB support may be sought for sewage treatment plant sludge and septage management.

(i) M Islam to confer with senior DWASA staff

(ii) M Islam to confer with senior DWASA staff

3. Re 2. Water

The variables that are proposed for the water balance (supply vs. demand) were discussed. DWASA agreed with MM on most variables proposed but also suggested several changes:

Variable Agreed value

(a) Population 12 million (b) Population growth (or target date population) 3.0 % (c) Current demand 150 Lcd

15 (d) Demand reduction (or target date demand) 0.8 % (e) Informal demand, domestic 1.0 MLD (f) Informal demand, industrial 40 MLD (g) Target date informal demand 5.0 MLD (h) Current NRW 37

16 %

(i) NRW reduction (or target date NRW) 20 % (j) Current deep well abstraction, upper aquifer 1,950

17 MLD

(k) Current deep well abstraction, lower aquifer 3802 MLD

(l) Sustainable yield, upper aquifer 1,6502 MLD

(m) Yield to target date, lower aquifer 380 MLD (n) Additional ground water abstractions from 300 MLD (o) Target dates for add’l ground water abstractions 2020/2022 (p) Current surface water sources

MM will modify the input variables and update Figure 3 in the Inception Report: Water Balance – Supply vs. Demand (this will feature in MM’s upcoming Progress Note 1

15

DWASA agrees with ADB’s comment that this rate is high; however, recognizes that the proposed reduction percentage

will result in a reasonable usage rate until the target date of 2030 16

Including an estimated 20 % leakage and pilferage 17

Source: IWM



28

Issue Action

1) Saidabad 1 2) Other small WTPs

225 MLD 50 MLD

(q) Target completion dates for surface WTPs 1) Saidabad 2 2) Saidabad 3 3) Khilkhet 1 4) Khilkhet 2 5) Pagla 1 6) Pagla 2

2013 2020 2017 2025 2017 2025

4. An alternative route from Bhulta to the Khilkhet WTP site was discussed. DWASA noted that although the route would reduce the pipe line length by some 11 km18, the route presents several difficulties; (i) two river crossings, (ii) low-lying lands, (iii) privately-owned property, and (iv) no access road. MM explained that the PPTA requires to review the FS critically, and that includes the assessment if other feasible options exist.

5. An alternative location for the Khilkhet WTP site was discussed; i.e., at the intake site, which was option 1b that was casually dismissed in the FS. DWASA explained its position as adamantly opposed. MM enumerated the advantages, not the least of which is that it obviates the need to to acquire the site currently regarded by RAJUK as “difficult to impossible”19.

Q Islam to obtain the names and outputs of other small WTPs M Islam to confer with senior DWASA staff and provide DWASA’s position on 06 Nov 12 M Islam to confer with senior DWASA staff and provide DWASA’s position on 06 Nov 12

6. MM observed that steel as pipe material was never considered in the FS and that MM considers that an oversight. Also, while HDPE was mentioned in the FS, it was also not considered a viable option. Both pipe materials proposed in the FS are viable; however, both have some disadvantages in comparison with steel and HDPE. DI is very expensive and GRP requires extreme care in handling and installation; otherwise, it is prone to fail in service. DWASA agreed to reconsider the choice of pipe material.

MM will recommend the pipe material considered most appropriate (this does not eliminate either DI or GRP)

7. Phased pipeline installation was discussed. DWASA referred to the FS, which includes a discussion on the phasing of the pipelines, although the proposed project includes all pipelines.

MM will study the benefits of pipeline phasing together with an analysis of the water balance and after discussions with DWASA, recommend an appropriate development schedule

8. MM briefly reiterated its position on the WTP design philosophy already discussed in the Inception Report. In particular, MM regards full automation as proposed in the FS as inappropriate20. MM questioned the inlet control of the plant

M Islam to confer with senior DWASA staff and possibly provide DWASA’s position on

18

The distance saved is about 5.5 km and there are two pipes proposed 19

Meeting Notes 13 refer. 20

MM noted that if the WTP were to become a BOT project based on a design-build modality, then the plant may indeed

be designed and built and consequently operated in full automatic mode.



29

Issue Action

based on turbidity and also, by-passing to direct filtration mode during low turbidity events, apparently without flocculation21.

9. MM briefly introduced the idea of SCADA-based central control, of particular interest and importance when DWASA is operating several large WTPs. In this regard, it may be advantageous to arrange for a field trip to Metropolitan Toronto where automated plant operation has been practiced since the 1980s and where a central control system has been in place for its four major WTPs and several large reservoirs and pump stations.22

10. MM reiterated that several documents have yet to be handed over. The list in the attached agenda item (xi) refers.

11. Other matter. Mr M Islam noted that DWASA wants to meet with the PPTA consultant and the Steering Committee.

06 Nov 12 MM will discuss with ADB as to including a central control component in its support for Dhaka water supply. M Islam to provide the documents by middle of next week; i.e., 07 Nov 12 M Islam will provide the date of the meeting on 06 Nov 12


21

It was observed that this opinion was made without access to the drawings, which may explain this apparent oversight. 22

The team leader was senior engineer in charge of process and research at Metro Toronto Water Supply from 1986 to

1989 and is well acquainted with the plant operator at the Frank J. Horgan WTP that includes essentially full automation.



30

Meeting Notes 17

Date: 05 November 2012 Location: DMC office at DWASA Purpose: Discussion on water supply Attendees: DWASA Md. Mahmudul Islam, Deputy Project Director Md. Abdus Salam Bapary, EE/DWSSDP

Md. Ariful Islam, EE/DWSSDP Design and Management Consultants (DMC) Simon de Haan, Team Leader, DWSSDP Md. Harunur Rashid, DWSSDP IWM David Khan Mott MacDonald PPTA team members (MM) Klaus Schonfeld, Team Leader & International water supply expert Md. Quaisarul Islam, Deputy Team leader& National water supply expert M. Hassan Khaleque, Willingness-to-pay survey coordinator

Issue Action

MM introduced the purpose of the meeting, referring to the attached agenda.

1. Khilkhet area of effect. (i) The purpose of this discussion was to obtain from IWM a map

that indicates the area of influence of Khilkhet WTP water so that the PPTA can undertake a willingness-to-pay survey of only the beneficiaries. It was noted that the feasibility study (FS) refers to the three benefitting districts of Uttara, Gulshan, and Badda, and elsewhere also to Zone 10, which includes Mirpur. It was agreed that IWM will provide two such maps: (i) showing the 2020 area based on Khilkhet 1 (500 MLD) and the total water supply based on 50% groundwater and 50% surface water and (ii) showing the 2030 area based on Khilkhet 1 + 2 (1000 MLD) and the total water supply based on 30% groundwater and 70% surface water.

(ii) DWASA advised that Narayanganj, which was briefly discussed in the FS but not included in the FS project area, is in DWASA’s service area, although outside of Dhaka City. It was agreed to exclude Narayanganj from the PPTA.

IWM to provide the two maps and coordinate with MM as to the geographical location of the boundaries.

2. Water supply (i) DWASA noted that the current deep well abstraction of 1950

MLD from the upper aquifer includes Narayanganj and advised to refer to its most recent monthly report for the basis if this water balance variable.

(ii) DWASA noted that the current number of operational wells is 601, not 632.

(iii) DWASA noted that the sustainable yield of the upper aquifer is 1650 MLD, including Narayanganj.

(iv) The current abstraction from the lower aquifer is taken to be 380 MLD; however, that is the rate IWM has advised to be the maximum abstraction rate utilizing 94 wells. A discussion ensued that suggested, based on DWASA experience (a) deep wells in the lower aquifer last only 2 to 4 years and are difficult to rehabilitate and (b) the water quality is not good.

(i) DWASA to provide MM with its most recent report on groundwater extractions

(ii) Noted. (iii) DWASA to provide

MM with the sustainable yield excluding Narayanganj.

(iv) IWM to confirm the total volume that could be abstracted



31

(v) DWASA will advise how many wells are currently operational in the lower aquifer (In the FS, that number is 28).

(vi) (iv) and (v) refer. (vii) It was agreed that additional ground water abstractions from

Singair could be 150 and 300 MLD in 2020 and 2022 respectively

from the lower aquifer at the rate of 380 MLD. DWASA’s experience with lower aquifer wells is noted.

(v) DWASA to provide number of wells operational in the deep aquifer..

3. Potential augmentation (i) The FS repeatedly refers to 40% UFW, leakage, and losses.

In a previous meeting, DWASA advised that the current NRW is 37%, of which 20% is attributed to leakage and pilferage. It was agreed that the PPTA water balance would be based on 37% and that DWASA will provide the basis for the number.

(ii) DMC advised that pipes are replaced up to 10 km/week and that the total replacement of some 3,500 km will be completed in 5 years

(iii) DMC advised that very few AC pipes have been encountered and when they are, they are buried in place as are all replaced water pipes.

(iv) DWASA advised that well pumps in the upper aquifer wells are routinely replaced or added, which explains why the FS refers to some 450 wells when on 25 October, the number was 632 and today, 601.

(v) DWASA advised that well pump capacities vary from 1 ft3/s23 to 2 ft3/s (2.5 to 5 MLD)

(i) DWASA to

provide the reference for 37% NRW.

(ii) Noted. (iii) Noted.

4. Other matters (i) The meeting on 6 November 2012 to formally discuss the

Inception Report (IR) was cancelled because the MD is not available to attend.

(ii) A brief discussion ensued over recommendations in the IR. DWASA is of the opinion that when the IR recommends, for example, to include steel in the choice of pipe materials, the IR recommends that steel should be used. MM explained that such is not the case; rather, the apparent omission in the FS of steel should be addressed. If then DWASA decides not to consider steel as a viable option, that, together with DWASA’s reasons, would be noted.

(iii) A brief discussion ensued over the lack of adequate reason in the FS to dismiss the location of the WTP at the intake site. DMC noted that the FS team had been advised that the WTP site was fixed, which is also noted in the FS. MM advised that considering all known factors, the intake site appears to be a viable option.

(iv) DWASA advised that the WTP site is no longer available and that a new site is under consideration.

(i) DWASA to advise to what date the meeting will be rescheduled.

(ii) – (iii) – (iv) DWASA to advise

the PPTA team where the new location of the WTP is.


23

Also referred to as cu.sec.



32

/kks



33

Issue Action

Topics for discussion 1. Khilkhet area of effect – network analysis - isobar 2. Water supply 3. Potential augmentation

1. Khilkhet area of effect in Uttara – Gulshan – Badda

network analysis isobar

2. Water supply (b) Current deep well abstraction, upper aquifer

1950 MLD

(c) Number of wells 632

(d) Sustainable yield, upper aquifer 1650 – 1000 – 600 MLD 4 hours “rest”

(e) Current deep well abstraction, lower aquifer 380 MLD

(f) Number of wells ?

(g) “Sustainable” yield, lower aquifer Number of years at this rate? Increased yield?

(h) Additional ground water abstractions from Singair 150/300 MLD in 2020/2022

(i) Water balance variables (Supply vs. Demand graph)



34

Meeting Notes 18

Date: 08 November 2012 Location: Roads and Highways Department (RHD) Purpose: Introductory Meeting Attendees: RHD

Shamima Yasmin, SDE, Road Safety Department Md. Shahin Sharkar, Road Safety Department Iftekhar Kabir, Superintending Engineer, Establishment and Administration Mott MacDonald (MM) Klaus Schonfeld, Team Leader Tridevi Chakma, Project Coordinator

Issue Action

1. It is a procedural requirement to seek RHD’s consent. During the planning stage, RHD wants a proposal showing transmission pipes that are planned on RHD acquired land. Final approval will be issued by the Ministry.

MM to include this requirement in the Draft Final Report

2. RHD has plans to widen its existing roads from 2 lanes to 4 or 6 lanes in phases. Lands adjacent to the highways may no longer be available in a few years’ time. It may be possible to lay pipes on RHD land if the pipes are laid before the road extension takes place, in which case the roads can be built on top of the transmission line. Planned implementation schedule can be obtained from the Planning division24.

Q Islam to obtain planned schedule for road extensions from Planning, RHD.

3. RHD stressed the need to obtain consent from RHD before starting the project. In a similar project in Chittagong (ADB-funded), RHD claims that CWASA planned to use RHD acquired land without consent of RHD. RHD is now refusing to let CWASA lay the pipes along the roads and this is causing delays.


4. Details of existing roads and highways can be obtained from the Dhaka25 and Narayanganj26 Roads Division. Both soft and hard copies of RHD’s GIS maps of the Dhaka circle as well as Bangladesh were provided to the TA team.

5. KS mentioned that there is a dirt road from Meghna to Bhulta and a stronger access road will have to be built. RHD speculated that the road is most probably owned by LGED or the Union Council.

Q Islam to discuss with the appropriate jurisdiction.

6. There are two bridges (Kanchan and Tarabo) in the transmission pipeline routes. Both are under the jurisdiction of RHD’s Bridge Design and Construction Department27.

7. Water related data can be obtained from the Water Development Board under the Ministry of Water Resources.


8. RHD thinks that inter-ministerial relations are good. For large MM to include this

24

Shahidun Nabi, SE, Planning, 01711530345 25

Zikarul Hasan, Executive Engr, Dhaka Roads Division, 01711881974. Call Iftekhar Kabir before meeting if required. 26

Habibur Rahman, Executive Engr, Narayanganj Roads Division, 01712064650. Call Iftekhar Kabir before meeting if

required. 27

Ashraful Islam, SE, Bridge Design, 01711609137



35

Issue Action

projects, RHD recommends that inter-ministerial meetings be held for better coordination.

requirement in the Draft Final Report

Kindly bring to the attention of the writer any errors and omissions. tc/kks



36

Meeting Notes 19

Date: 11 November 2012 Location: Department of Environment (DoE) Purpose: Introductory meeting and review of DoE categories Attendees: DoE

Md. Shahjahan, Director (Environmental Clearance) Syed Nazmul Ahsan, Deputy Director (Environmental Clearance) Mott MacDonald (MM) Klaus Schonfeld, Team Leader J.C. Saha, Environmental Safeguard Specialist

Issue Action

1. DoE confirmed that the project is environment category Red, noting that this project does not only comprise of a “plant” but also, significant pipeline construction, river crossings, and river abstraction.

2. DoE confirmed that the environmental regulations that contain the lists that categorize projects as green, orange, and red are under review and that a draft of the revised document will be submitted to the Ministry and is expected to be approved within one year.

3. DoE advised that generally, entities cannot apply for reclassification but agreed that DWASA could make a formal application.

4. DoE noted that the feasibility study draft EIA had not been submitted to DoE.

MM to discuss with DWASA

5. DoE advised that baseline data must be provided.




37

Meeting Notes 20

Date: 11 November 2012 Location: Institute of Water Modelling (IWM) Purpose: To review underground water sources Attendees: Institute of Water Modelling (IWM)

Mahbubur Rahman, Director, Water Resources Planning Division David M. Khan, Associate Specialist Imtiaz Taher, Water Supply and Sanitation Specialist Mott MacDonald (MM) Klaus Schonfeld, Team Leader Md.Quaisarul Islam, Deputy Team Leader

Issue Action

1. IWM confirmed that its July 2006 “Final report on Resource Assessment” has not been updated. IWM provided MM a copy of Volume 1: Main Report (to be returned).

MM to return report

2. The various numbers that MM use to construct the Supply vs. Demand water balance were discussed and generally agreed.

(i) Current abstraction rate may be tenuous as many of DWASA’s 600+ wells are unmetered

(ii) Sustainable yield from the upper aquifer was again confirmed at 1,648 MLD

(iii) Sustainable yield from the lower aquifer was again confirmed at 380 MLD with the proviso that pumping is stopped for 4 hours per 24 hours.

3. IWM explained that the 2-3 m subsidence of the water table is an average number over the whole of Dhaka and is less on the periphery and more in the center.

MM to discuss with DWASA: the reduction in groundwater abstraction should be carefully planned

4. IWM advised that there are approximately 1300 registered private tube wells and “many” that are unregistered (illegal).

MM to discuss with DWASA

5. IWM advised that the many (could be 2 million or more) slum dwellers affect the “demand”

6. IWM advised that the many (could be 1 million or more) floating population affect the “demand” as well as the sewage flow.




38

Meeting Notes 21

Date: 14 November 2012 Location: DWASA Purpose: Discussion on cost estimate items Attendees: DWASA Abul Kashem, Project Director

Md. Mahmudul Islam, Deputy Project Director Khairul Basher, Executive Engineer Areful Islam, Executive Engineer

Mott MacDonald PPTA team members (MM) Klaus Schonfeld, Team Leader Md. Quaisarul Islam, Deputy Team Leader

Issue Action

Inception Report 1. MM hand-delivered three copies of the finalized Inception

Report to DWASA

M Islam to distribute the copies

Cost estimate 2. MM advised DWASA that the feasibility study (FS) does not

include the following cost items: (i) Access and service roads to intake pump house (ii) Construction road for the 15 km pipelines from intake

to Bhulta (iii) Access roads to clean-out stations along the

pipelines (iv) 33kV electric feeder lines to intake pump house and

Khilkhet WTP (v) Stand-by power for intake pump house and Khilkhet

WTP (vi) Environmental management (vii) Social costs (resettlement and compensation) (viii) Land acquisition

3. A discussion ensued during which DWASA were of the opinion that the FS cost estimate does include for roads and stand-by power and produced an email from DMC to that effect.

4. MM disputed the information based on detail review of the FS and suggested that DWASA check once more.

5. A further discussion on the 15 km road necessary to construct the pipelines ensued. It was noted that the road would belong to LG and that DWASA would request LG to construct it.

DWASA to discuss with LG

6. MM cautioned that the road must be strong enough for heavy ruck traffic.

7. MM noted that the following costs would be included in the revised cost estimate:

(i) Access and construction roads (ii) Electric feeder lines (iii) Stand-by power facilities (iv) Only Phase 1 components (v) Environmental management and mitigation,

which MM suggested would be around 1% of the estimated project cost.

(vi) Social costs (resettlement and compensation, which DWASA estimate at 1 crore BDT)



39

Issue Action

(vii) Land acquisition, which DWASA estimate at 300 crore BDT

8. DWASA advised that the DMC has produced bid documents for the Khilkhet WTP and suggested that the documents be reviewed under the PPTA. MM noted that review of the bid documents is not in the scope of work of the PPTA consultant.

Other matters 9. The tripartite meeting will take place on 15 November at 15:30

and would likely not include the MD because he is not available.




40

Meeting Notes 22

Date: 19 November 2012 Location: DWASA Purpose: Tripartite meeting for Inception Report Attendees: ADB Norio Saito, Task Manager Dr. Hafiza Khatun, ADB Social Safeguards staff consultant, DWASA Engr. Md. Abdul Kashem, Project Director

Md. Mahmudul Islam, Deputy Project Director Md. Ruhul Amin, Deputy Project Director

Md. Ariful Islam, Executive Engineer Khairul Bashar, Executive Engineer Abdus Salam Bepary, Executive Engineer DMC Simon de Haan, Team Leader (DWSSDP) Md. Harunur Rashid, Civil Engineering Expert (DWSSDP) Mott MacDonald (MM) Klaus Schonfeld, Team Leader Md.Quaisarul Islam, Deputy Team Leader Farook Chowdhury, Project Director Gazi Anwarul Hoque, Waste Water Engineer Iqbal Hossain, Project Finance Specialist Shireen Akhter, Social Safeguards Specialist

Issue Action

1. A PowerPoint presentation listed issues that ensued during the inception period (19 September – 19 October 2012) for the Khilkhet WTP project (project). Discussions on each topic are summarized below.

2. Waste water

(i) It was noted that all 19 Phase 1 priority projects as listed in the Sewerage Master Plan (SMP) are funded by World Bank or the government.

(ii) It was noted that funding for three Phase 2 priority projects for Kamringarchar STP and associated sewers with an estimated value of about $150 million has not been secured.

(iii) It was noted that the SMP regards septage & sludge management as "high priority" and as such, the PPTA is prepared to develop the TOR for a pilot plant at the existing Pagla STP to render sludge and septage essentially inert and in the process, generate electric power for feeding into the Dhaka grid (refer section 5.6.5 Septic Tank Sludge Management of the SMP).

(iv) It was noted that the Small-bore Sewerage System at Mirpur pilot is regarded a failure in the SMP (refer section 3.4). It was further noted that technically, a small bore sewerage system is a viable option; however, it requires special management. The PPTA is prepared to review the Mirpur experiment and provide recommendations for a suitable management system expected to result in a successful component of the Dhaka sewage collection system.



41

Issue Action

(v) DWASA indicated that sludge and septage management is part of another consultancy.

3. Environmental Impact Assessment

(i) It was noted that notwithstanding the attempt in the Feasibility Study (FS) to categorize the project as “orange”, the Department of Environment (DoE) has determined that the project falls under its “red” category, requiring an IEE and an EIA.

(ii) It was noted that according to DoE, requests for recategorization are normally not approved but that DWASA may formally apply for a change in category.

(iii) DoE advised that New Draft Regulations are currently under review and that approval is expected in 1 year.

(iv) ADB suggested that it may be possible to prepare the IEE under the PPTA and the EIA during the design period of the project.

(v) DoE advised that the EIA process requires various baseline studies.

(iv)MM to discuss with DoE

4. Gender & Poverty

(i) It was reported that MM has conducted 12 initial Focus Group Discussions (FGDs) in the four urban project areas of Uttara, Badda, Gulshan, and Mirpur and that it is planned to continue FGDs at the area surrounding the intake site.

(ii) DWASA noted that it prefers suc h FGDs to be postponed to facilitate land acquisition. MM advised that would not be possible due to the time limitation of the PPTA and that in any event, the local population is already aware of the general planning and the location of the intake.

(iii) DWASA, through DMC, agreed to provide the exact location of the intake facilities.

(iii)MM to obtain the intake location from DMV

5. PPP

(i) It was agreed that the venue for the first PPP workshop on 28 November 2012 is at DWASA.

(ii) It was noted that no arrangements have been made yet regarding (a) MM’s attendance at the PPP Cell Conference and (b) the PPP workshop on 9 December 2012.

(iii) It was agreed that the 9 December workshop will be held in a hotel.

(iv) It was agreed that MM attendance at PPP conference would be a useful way to attract attendees at our workshop but also, that MM will use other means.

(v) MM has analyzed 7 pertinent statutes and reviewed the draft PPP law, which is considered exemplary.

(vi) MM has prepared agenda & power point presentations for PPP workshop on 28 November for DWASA and other stakeholders.

(vii) MM has prepared agenda for PPP workshop on 9 December for private investors attending PPP conference (7 & 8 Dec) and DWASA PPP cell. The power point presentation will be prepared after final analysis and submitted for review before 4 December.

(i) MM to

coordinate with DWASA re funding

(ii) MM to coordinate with PPP Cell

(iii) MM to organize workshop venue

(iv) MM to develop a plan for its attendance at the PPP conference and also one for



42

Issue Action

inviting attendees

(v) –

(vi) MM to provide DWASA with a copy for comment

(vii) MM to provide ADB and DWASA with a copy for comment before 4 December

6. Finance & Economy

(i) It was noted that MM’s International Finance Expert is arriving in Dhaka on 20 November.

(ii) It was noted that (a) the Willingness-to-pay survey budget has been approved, (b) the w-t-p questionnaire has been approved and translated, (c) enumerators have been interviewed and trained, (d) IWM has provided maps delineating 2020 (500 MLD) and 2030 (1000 MLD) areas of influence of the Khilkhet WTP supply, and (e) that the field survey will start 22 November.

7. Water Supply

(i) WTP location. MM reiterated its position vis-a-vis the location of the WTP at the intake site, noting that the FS referred to similar advantages but followed DWASA’s advice to locate at the “fixed” Khilkhet site. It was agreed that MM will compare the advantages and disadvantages of locating the WTP at Khilkhet and the intake.

(ii) Pipe material. MM observed that the FS did not include steel in its analysis of suitable pipeline materials. DMC advised that steel was discussed and eliminated but that the process had not been included in the FS. DMC noted that “mild steel” is unsuitable for the Bangladesh environment. MM noted that the “steel pipe” contemplated consists of mortar-lined, bitumen (or equivalent)-coated pipe complete with cathodic protection. MM also repeated that while GRP is less expensive, it requires very careful installation, which adds to the cost.

(iii) DND canal. MM reiterated its position on utilizing some 4.5 km DND canal to convey relatively clean Meghna River water. DWASA apparently shares that opinion although it was agreed that it is much less expensive. Note: Per FS prices, 4.5 km twin 2200 mm pipelines cost

(i) MM to prepare analysis of WTP location at Khilkhet vs. intake including indicative costs (ii) MM to prepare analysis of pipe materials including steel pipe. (iii) MM and DWASA to discuss whether to include the raw water pipeline for Saidabad in this project



43

Issue Action

almost $18 million. DWASA advised that the water from the DND canal to Saidabad is conveyed through a twin 2.5 m x 2.0 m concrete box culvert .

(iv) Cost estimate. MM noted that while the FS recommends phasing of the project from 500 MLD to 1000 MLD and provides a total cost, and that MM agrees with that recommendation and approximately with the cost, the detail cost estimate includes Phase 2 components totaling some $730 million. MM noted that several cost components were not included in the FS estimate (land acquisition, roads, electric feeders, stand-by power, environmental and social costs). By subtracting Phase 2 cost elements and adding provisional costs for the missing elements, the preliminary cost for the Phase 1 project is about $570 million. MM cautioned that this preliminary cost estimate will be further developed in conjunction with DWASA. ADB requested MM to provide that estimate as soon as possible.

(iv) MM to prepare cost estimate as soon as possible.

8. Inception Report. ADB advised that the revised Inception Report is now regarded as final.

MM will invoice for this milestone payment.




44

Meeting Notes 23

Date: 21 November 2012 Location: DWASA Office, Dhaka Purpose: To discuss options for PPTA input in sewerage and waste water priority projects Attendees: DWASA Mr. Abul Kashem (PD) Mott MacDonald (MM) Md. Quaisarul Islam, Deputy Team Leader & National water supply engineer Ary de Koning, International waste water management expert

Issue Actions

1. The water supply from the projected Khilkhet WTP will be directed to 2 service areas in Dhaka:

(i) Dhaka North: about 200 MLD (Uttara, where no sewerage is in position yet);

(ii) Dhaka South: about 300 MLD (Gulshan, Baridhara and Mirpur, where partly sewerage systems are in place).

This will result in increased sewage generation in these areas for which no sewerage and treatment facilities are in place.

2. In addition to the ongoing sewerage and treatment facilities for Dhaka-South - Dasherkandi STP, DWASA is planning to consider construction of sewerage systems including STPs in Uttara and Mirpur on priority basis for which DWASA has prepared a Development Project Proposal (DPP).

3. Mr. Kashem noted that a copy of that DPP can be available soon.

4. The World Bank is not yet committed for these projects; therefore, ADB funding may be sought.

Mr Q Islam to obtain the DPP

5. World Bank/IDA is currently committed in 3 sanitation projects in Dhaka:

(i) Slum rehabilitation program; (ii) Improvement of stormwater drainage systems, and (iii) New sewerage systems & Phase 1 upgrading of Pagla

STP.

6. The Sewerage Master Plan (SMP) recommends trickling filters; however, DWASA has decided to employ activated sludge process technology instead for Pagla STP upgrade and Dasherkandi STP. The PPTA consultants are in full agreement with that decision.

7. For 2nd Phase and further phases of Pagla STP extension, ADB funding could also be sought.

8. DWASA regards the proper management of septic tank sludge as a priority and noted that the pilot project at Pagla STP recommended in the SMP is already under development with WB/IDA funding.



45

Issue Actions

9. Mr. Kashem showed clear interest in the option of co-digesting with energy recovery of septage and STP sludge at Pagla STP and asked for a further meeting on this subject. This meeting can be scheduled in early February 2013.

Make appointment for meeting in early February 2013

Kindly bring to the attention of the writer any errors and omissions. adk/kks



46

Meeting Notes 24

Date: 22 November 2012 Location: MM.DWASA Purpose: Discussion on resettlement issue Attendees: Mott MacDonald PPTA team members (MM)

Hafiza Shireen Klaus Schonfeld

Issue Action

1. Based on the discussion a number of steps will be taken and a work plan has been done especially for the month of November and December 2012. The Study team will start work in the alignment (already selected location and intake areas) from Sunday the field coordinator/s and field supervisor will conduct the study by the support from Ms Shireen and Mrs. Hafiza. Mrs. Hafia will monitor and follow up the census.

1. S Akhter to prepare work plan 2. Note: tentative work plan attached

2. Ms. Shireen Akhter will not work in December for personal reasons but keep some time for a close touch with the team to monitor and follow up the work (develop a mechanism). Shireen will also help in preparing a coding list and discuss with the data analyst to prepare an analysis plan.

3. Filled-out questionnaire will be checked on the same day the interview is done and sent for data entry and coordinators are responsible for doing this and also time to time inform Mrs. Hafiza and Shireen.

4. All core study team members’ telephone numbers will be provided to Mrs Hafiza. Hafiza and Mott MacDonald (concerned person)

4. Shireen to obtain from Q Islam (DTL)

Kindly bring to the attention of the writer any errors and omissions. sa/kks



47

3. Tentative work plan

4. Date 5. Activities 6. Participants 7. Status / comments

8. 23 Nov 12

9. Submit revised budget to TL and PD Mott MacDonald. 10. Send census questionnaire to ADB consultant for feedback and required correction 11.

12. Shireen Akhter

13. Submitted

14. 25 Nov 12

15. Field trip with the ADB and Core team members

16. Mrs. Hafiza, Shireen Akhter, Nasima Rumi, Pavel Mahin. Shaheen and Munir ( core team member of the study)

17. Already organized

18. 26 Nov 12

19. Finalize questionnaire and send for printing, discussion with the core team members on training and other relevant issues, collect topography map and Mauja maps

20. Hafiza ,Shireen, Nasima , Mahin , Munir and Shamim

21. Team work

22. 27 Nov 12

23. Conduct training 24. 8 field investigators and core team members will participate

25. Hafiza and Shireen will conduct training. Team leader and some engineers invited to join

26. 28 Nov 12

27. Continue training, discussion on the questionnaire Discussion on the feedback of the questionnaire pre testing will be held on 29 November. The whole day will be devoted for this purpose. 28.

29. Shireen and core team members

30.

31. 29 Nov 12

32. Field visit , organize to move forward field staff , arrange finance and other necessary things

33. Shireen and core team member

34. By the support of Mott MacDonald



48

Meeting Notes 25

Date: 26 November 2012 Location: Mott MacDonald Office Purpose: Discuss Financial Assessment of DWASA Attendees: Eric van Woerkom Tridevi Chakma Iqbal Hossain Sayed Golam Ahammad

Issue Action

1. Need to check ADB’s Financial Assessment Questionnaire for relevance. Need to modify questionnaire to make it relevant and to include important missing information. For example, the questions regarding a PIU maybe revised to make it more relevant. Need to include additional questions on revenue and billing. Such as, how many billing officers does DWASA have? What is the collection rate? It was noted that billing is computerized with more than 600 people working in revenue. 70% of the collection is outsourced but revenue is collected in a single account held by DWASA. Iqbal Hossain and Sayed Golam Ahammad are to complete the some of the questions for which the answers are already known.

Update Questionnaire. Fill in parts of questionnaire. Email by Thursday, November 29, 2012 by 11 am.

2. For question 1.5, we need to define the needs of the project. This may include institutional capacity and organizational requirements for DWASA to be able to engage in a contract with the private sector and monitor the private sector. DWASA has a training center and program in place with Mr. Siddique as Chief Training Officer.

Obtain organogram, training curriculum on finance, accounts, revenue. Consult legal experts on requirements.

3. Discussions were carried out on how a 20 year forecast of DWASA’s revenue was to take place. Need to decide on how the Khilkhet and other projects will affect DWASA’s revenue. Do we need to consider other projects? It was further noted that DWASA requires Ministry of LGRD&C approval for any increase in fees exceeding 5%. Need to examine that the ministry is willing to support an increase in fees.

Discuss further.

4. It was noted that LGED, under the same line ministry as DWASA (Ministry of LGRD&C), is carrying out the first PPP in Bangladesh to build the Jatrabari Flyover. The flyover project is being implemented under a BOOT contract with Orion Group28. Orion group will charge a toll29.

5. A further meeting is to be held on Thursday, November 29, 2012 at 2:30 pm at the Mott MacDonald office.

Meeting on Nov 29, 2:30 pm.

28

http://www.orion-group.net/flyover.php 29

http://www.newagebd.com/detail.php?date=2012-10-06&nid=26099#.ULLtYeRllcA



49

Meeting Notes 26

Date: 03 December 2012 Location: DOE Purpose: To verify categorization of project and obtain agreement to produce IEE,

deferring EIA to design phase Attendees: DoE Md. Shahjahan, Director (Environmental Clearance) Syed Nazmul Ahsan, Deputy Director (Environmental Clearance)

Mott MacDonald (MM), JC Saha

Issue Action

1. DOE confirmed that project is category red 2. DOE agreed to accept IEE on the condition that full

EIA is prepared during design phase

Kindly bring to the attention of the writer any errors and omissions. /jcs



50

Meeting Notes 27

Date: 13 December 2012 Location: Westin Hotel, Dhaka Purpose: To obtain commercial bank conditions in connection with the potential private

investment portion of the Khilkhet Water Treatment Plant Project Attendees: Standard Chartered Bank Arif Ainul Suman30

Mott MacDonald (MM) Klaus Schonfeld

Issue Action

3. KKS briefly described the project and the extent and proportion of potential private investment through PPP (~$130 million out of $600 million).

4. Arif Ainul Suman disclosed the following commercial bank parameters that would likely prevail if a local bank, such as the Standard Chartered, were to provide the debt portion of the private investment:

(i) Equity/debt must be at least 30/70; i.e., 30% equity and 70% debt

(ii) BDT- based loan (a) 15.5% to 16% per annum (b) Term = 7 years maximum

(iii) $-based loans (a) 6% per annum (b) Term = 12-14 years

(iv) Additional credit support required (a) Export bank guarantee (b) ADB political guarantee

(i) - (ii) Ravi Peri to advise what’s the most likely. To avoid potentially debilitating currency devaluation, loan should be in $. (iii) – (iv) (v) MM to find out about ADB political guarantee from ADB

5. These parameters will be used in the PPP finance model as applicable.


30

(880-2) 883 2002~4, +88 0171 153 5149



51

Meeting Notes 28

Date: 8 January 2013 Location: MM Office Purpose: To review project status Attendees: Mott MacDonald (MM)

Farook Choudhury (FC) Klaus Schonfeld (KS)

Issue Action

6. Project Finance Model - It was agreed that we will produce two models:

(i) Overall model (dubbed “DWASA Model”) (ii) PPP model, the result of which would be input to

the DWASA model

7. ADB has advised it will provide its review of the Interim Report by 11 January 2013. If the comments on the model are significant, we will convene another meeting to define our response.

FC to implement

8. Staff review - (i) Falko: Falko has spent time in his home office.

(ii) Ary: There may be more scope; however, KS believes that ADB no longer wish to pursue septage, sludge, and/or waste water treatment.

(iii) Institutional expert: The candidate was not available when proposed and the project for which he is working cannot release him on a part-time basis although the DWASA PD is in favour of sharing him.

(iv) Eric: It seems that ADB has made its position clear.

(v) International Environmental Safeguards Expert & JC Saha: The expert emailed previously that he would arrive in Dhaka on 7 January 2013 but has not contacted MM. Time is running short and it is assumed that the EA will not be finished by the 19 February 2013 deadline for inclusion in MM’s draft Final Report (4. refers). This raises the question whether the report will be stand-alone and submitted to ADB under separate cover.

(vi) International Social Safeguards Expert & Shireen: The budget as not been approved. Also, the team is experiencing problems identifying ownership of the many plots through which the pipeline passes.

(vii) Gender: Sinora is up-to-date

(viii) Financial analysis: FA will be undertaken by FC (1. refers) (ix) Economics: Economics will be undertaken by FC

(i) FC to draft letter to ADB requesting home office time approval. (ii) FC to advise Ary of the situation. KS to draft letter to either return Ary for more work or to reallocate his time.

(iii) FC to draft letter to ADB explaining the situation.

(iv) FC to advise MM and to draft letter to ADB to transfer remaining time to FC for financial analysis (FA) and institutional expert (to be named – (iii) refers.

(v) KS will email the expert and ask him and JC Saha to attend a meeting forthwith. KS will also email ADB to clarify the submission of the EA.

(vi) FC to email ADB requesting approval of budget. After another meeting with the Social team, KS to determine if additional time is required to complete the survey.

(vii) No action

(viii) No additional action



52

Issue Action

as planned. (x) Legal: Falko and Imtiaz up-to-date

(ix) No additional action (x) No additional action except as noted in 3. (i)

9. Draft Final Report – (i) staff were advised previously to submit contributions to the draft Final Report by 19 February 2013. In that regard, it is noted that contributions to the Interim Report were not all received on time (in that case, the team was advised and reminded that the date for submissions was 12 December 2012). Thanks to those of you who submitted your contributions on time. The others who either submitted late, very late, too late, or not at all are hereby reminded to submit on time. We cannot delay this submission. (ii) This time around, I will return text that is not at least spell-checked (use US English). Also, please observe my previous request, and reminders, to use A4 format, 1” margins all around, Ariel 11 text font (Ariel 9 for footnotes), and ADB-style tables unless impractical. I am not a secretary and I do not have one.

(i) Team Khilkhet to implement.

(ii) Team Khilkhet to implement.

10. Budget – To re-allocate time, we need to have an up-to-date analysis of the time budget.

FC to produce a time record and propose re-allocations.




53

Meeting Notes 29

Date: 08 January 2013 Location: Roads and Highways Department (RHD), Narayanganj Division (Near Kanchan

Bridge) Purpose: To discuss with RHD regarding extent of land acquired by RHD along Bhulta-

Kanchan Bridge & Bhulta – DND (Tarabo), for 4 lane widening program and how the proposed Raw Water transmission pipeline of Khilkhet water treatment plant can be laid within RHD acquired land.

Attendees: RHD Md. Firoj Ahmed, Assistant Engineer Mr. Kashem, Surveyor Mr. Humayun Kabir, Surveyor DWASA Md. Mahmudul Islam, Deputy Project Director Mott MacDonald (MM) Md. Quaisarul Islam, Deputy Team Leader

Issue Action

1. RHD has already submitted DPP for upgrading Bhulta-Kanchan Bridge and Bhulta-DND (Tarabo) for two to four lanes. They have acquired earlier 200 feet width of land during the initial stage of road construction (two lanes) & this land is sufficient for widening the four lanes. RHD Narayangonj Division has the land plan of the acquired land on C.S. R.S. Map will indicate Govt. (RHD) acquired land.

DWASA will write to The Executive Engineer RHD Narayangonj Division to procure acquired land plan.

2. The names of the mouzas are: Tarabo (JL-17), Khadon (JL-2), Digibarapa (JL-16), Tatlabo (JL-6), Arriyonb (JL-8), Barapa (JL-9), Moukuli (JL-11), Amlabo, Bhulta, Kandua, Kanchan.

DWASA will also approach survey department for the procurement of R.S. Mouza maps.

3. It is possible to lay raw water pipeline at the end of the RHD road. Agreement between RHD & DWASA is required in this respect.

A meeting with RHD Senior Officials is required to discuss the laying of raw water transmission pipeline beside RHD road. DWASA is to arrange this meeting.

Md. Quaisarul Islam



54

Meeting Notes 30

Date: 14 January 2013 Location: DWASA PD Office Purpose: To review project status Attendees: ADB Norio Saito Hafiza DWASA Shahjahan M Islam Mott MacDonald (MM)

Farook Choudhury (FC) Klaus Schonfeld (KS) Shireen Akhter

Issue Action

1. 1. The status of the social survey was reviewed 2.

3. 2. Intake: All owners and occupants of lands that will be occupied by the intake pump station site have been identified




55

Meeting Notes 31

Date: 22 January 2013 Location: DWASA Purpose: To discuss issues related to land acquisition Attendees: DWASA

Mr.Mahmudul Islam, DPD PPTA Team (MM) Dr.Hafiza Khatun, Social Safeguards specialist R.Viswanathan, Environmental Specialist Dr.J.C.Saha, Environmental Specialist

Issue Action

17. The DPD was briefed on the consultation findings that were held at the intake site on 19h January 2013 by the PPTA team.

18. The following issues were discussed.

(i) Transmission main alignment from intake to Bhulta: The cadastral map information as available in the feasibility study (FS) does not match on ground. The need for establishing the transmission line on ground was stressed. DPD informed that the staking out of the alignment including the marking on the RS maps shall be undertaken as part of the PPTA. Any cost implications towards the same shall be required to be accommodated within the contingencies of the TA.

(i) MM to respond with a budget and time increase.

(ii) Transmission main alignment along the RHD Roads: (a) Confirmation of the RoW along the RHD corridor from Bhulta to Kanchan Bridge and Bhulta to Demra (b) Details on the proposed four laning by the RHD and collection of design details of the same, so that we can review the practicality of laying two 2200 mm diameter pipelines within the RoW and initiate census surveys of any affected persons., and (c) status of any MoU between DWASA and RHD to permit the laying of pipes within the RoW and RHD’s schedule for the widening.

(ii) (a) DWASA to provide (b) DWASA to provide (c) DWASA to provide

(iii) Transmission mains along the 300 ft wide road: DPD informed that while there was no formal agreement or MoU between RAJUK and DWASA on accommodation of pipes within the 300 foot RoW, there were initial consultations held with the Member Planning of the RAJUK informing of the proposed plans of DWASA. There is a need for firming up the arrangements as this would pose a significant risk at a later stage.

(iii) DWASA to obtain RAJUK approval to lay the Khilkhet WTP project pipes in the 300 foot RoW.

(iv) Conservation of water source at Meghna. The team requested guidance on the consultations to be undertaken with the Ministry of Water Resources to understand the potential implications due to upstream developments. The DPD suggested that this will require a formal communication from LGRD Ministry to the Water Resources ministry.

(iv) DWASA to facilitate a meeting with MoWR at the earliest date.

(v) Interactions with the Member of Parliament on the proposed project. During the Consultations at the intake, the PPTA team was informed by the Chairperson, Araiazhar Upazila and the village communities, that the project proponents should discuss and consult with the MP prior to project siting. The DPD informed that

(v) MM to send DWASA a letter inviting MPs from Araihazar, Demra, Rupgonj, and Khilkhet for a project briefing.



56

the Khilkhet project was extensively publicized including by the Prime Minister but noted that there is a need for the PPTA team to consult and brief all of the elected representatives (MPs) in the project locations formally. (vi) Need for a steering committee meeting. The issues highlighted have significant inter-ministerial interactions and require decisions which have a bearing on the completion of the current PPTA assignment. The DPD requested for MM to send a letter to the PD to facilitate a meeting with the Steering Committee at the earliest date to expedite the decision making.

(vi) MM to send DWASA a letter requesting to facilitate a meeting with the Steering Committee at the earliest date.

Kindly bring to the attention of the writer any errors and omissions. rv/kks



57

Meeting Notes 32

Date: 24 January 2013 Location: Khilkhet Water Treatment Plant site Purpose: To obtain additional insight regarding the routing of the raw water pipeline

extension Attendees: MottMacDonald PPTA team members (MM)

Shireen Akhter, National social safeguards specialist Klaus Schonfeld, Team leader & International water supply expert R. Viswanathan, International environmental safeguards specialist

Issue Action

19. As previously reported (Meeting Notes dated 1 October 2012), the canal, which is the raw water source for Saidabad 1 WTP and the recently inaugurated Saidabad 2 WTP varies in width from about 40m to 70m and is bounded on both sides by a wall less than 1m high. It is reportedly maintained by DWASA. From the injection point at Demra Circle to the end of the canal near the intersection of the Dhaka Demra Road and Sonir Akhra To Mridha Road, it is surrounded by domestic and commercial housing as well as some industrial buildings. The water in the canal appears to be weak sewage and is said to contain high ammonia content. For that reason, MM recommended to extend the raw water pipeline, a recommendation that was accepted by DWASA.

1. n/a

20. The distance from the injection point to the box culvert connection was estimated by comparing odometer readings with landmarks on Google Earth satellite images. The distance is approximately 4.2 km instead of the 4.5 km previously discussed in this regard.

2. MM to revise cost estimate.

21. There appear to be two options for the pipeline extension: (i) to lay the pipes North of the road and (ii) to lay the pipes South of the road inside of the canal.

3. n/a

22. Because of the congestion and volume of traffic on the Dhaka Demra Road, we will recommend to implement the second option; i.e., to lay the pipes South of the road inside of the canal.

4. n/a

23. Near the end of the canal, about 25m east of the Saidabad abstraction point, we noted an irrigation sluice gate. This poses the questions:

(i) who has jurisdiction over the canal and (ii) is the canal still formally utilized for irrigation?

5. MM to obtain answers from DWASA

24. One significant advantage of laying the pipes within the canal is that social impact is minimized, consisting mainly of small vendors near the bridges.

6. MM (social) to survey (additional to the TOR)

25. About one or two meters South of the northern canal boundary wall is a row of trees that need to be surveyed. Some of the trees are quite old and should be retained if feasible.

7. MM (environment) to survey (additional to the TOR)




58

Meeting Notes 33

Date: 24 January 2013 Location: MM Office Purpose: To discuss the Khilkhet Water Treatment Plant Project status Attendees: F Chowdhury (FC) K Schonfeld (KS)

Issue Action Status

1. Finance and economics responses to ADB comments on Interim Report (IR) outstanding.

FC agreed to submit. Responses received and incorporated in revised IR.

2. Latest Excel spreadsheets of project finance model required for attachment to revised IR.

FC agreed to submit. Spreadsheet received and attached to IR submission.

3. It was previously agreed to review status of staff time to prepare a completion schedule as requested by ADB to be included in revised IR.

(i) FC informed that remaining times are not known or available. (ii) FC agreed to prepare economics completion schedule. (iii) FC proposed to prepare completion schedule without reference to available time

(i) Completion schedule not included in IR. (ii) Schedule not received. (iii) KS noted that may be ok for local staff, some of whose time utilization is vague, but not international staff, including KS’.

4. The recommendation to extend the pipeline along the DND canal has environmental and social cost implications.

KS to prepare a note for FC to include in contract variation.

KS provided note on 27 Jan

5. Research assistants. FC to provide. FC advised that “there isn’t any”.

6. ADB comments re waste water. Ary did not provide responses so Gazi Rahmani (national waste water specialist) can provide.

KS to request responses from Gazi.

Gazi’s responses not appropriate for inclusion; consequently, only some responses prepared by KS are included in revised IR.

/kks



59

Meeting Notes 34

Date: 27 January 2013 Location: WHO, DPHE Bhaban, Kakrail Purpose: Discission on DWASA water safety plan Attendees: World Health Organization Shamsul Gafur Mahmud, National Professional Officer (Water, Sanitation &

Healthy Environments) Alauddin Ahmed, National Consultant - WSH

MottMacDonald PPTA team members (MM) Klaus Schonfeld, Team leader & International water supply expert

Issue Action

1. Thanks to Mr. Md. Rafiqul Islam, ADB, for facilitating this meeting.

1.

2. KS provided an overview of the Khilkhet WTP project.

2.

3. WHO provided an overview of its efforts to promote a water safety framework (WSF) in Bangladesh. The strategy employed is to test its framework by implementing it in small to medium sized towns (100,000 to 150,000). The focus is on combining maintenance and monitoring towards decreasing waterborne diseases. So far, it has successfully introduced the WSF in 10 such towns, using as an indicator of success the drop in gastro-intestinal incidents as reported by mayors. Eventually, WHO will attempt to persuade DWASA to integrate a WSF in its O&M. Towards that goal, the Ministry of Local Government, Rural Development and Cooperatives has created a WSF cell within MoLGRD&C; however, it has not developed TOR for its implementation.

3. The full exploration of this topic; i.e., to integrate WSF in DWASA’s institutional fabric, is beyond the scope of this PPTA. We will, however, refer to the advisability of implementing WSF as a beneficial component of DWASA’s mandate to provide potable (i.e., safe) water.

4. WHO has proposed a set of primary and secondary standards for drinking water quality that are listed in Water Safety Framework (WSF) in Bangladesh by the Policy Support Unit of MoLGRD&C published with WHO’s assistance in October 2011. The Department of Environment is in its final stages of approval of these standards.

3. We will review the standards and cite them as appropriate. On first look, the turbidity standard is too high and the absence of a standard of nitrite (instead of the nitrate standard included) is not clear.

5. WHO has an extensive publication listing manywater quality standards under the headings ofphysical, chemical, and microbiological. In addition,there is a set of standards for radionucleides. It is verydifficult to compile a set of standards/guidelines fromthis compendium and so, Mr. Mahmud offered toassemble one and send it.

4. We will cite the standards andguidelines, list Bangladesh standards,and recommend a set for application.




60

Meeting Notes 35

Date: 14 February 2013 Location: DWASA DPD Office Purpose: To review pipeline corridor width Attendees: DWASA Mahmudul Islam Abdus Salam Bapary Ariful Islam Mott MacDonald (MM)

Klaus Schonfeld

Issue Action

4. 1. The width of the approximately 15 km pipeline corridor from Bisnondi to Bhulta was reviewed in detail.

1. n/a

2. It was agreed that the previously proposed width of 35 m can be reduced to 31 m; however, it would be necessary to utilize sheet piling as indicated in the revised sketch attached.

2. PPTA social survey team to base its investigations and DWASA to base its land acquisition on a 31 m corridor.




61

Meeting Notes 36

Date: 14 February 2013 Location: DWASA PD Office Purpose: To review project status Attendees: ADB Norio Saito Hafiza DWASA Md Shahjahan M Islam Mott MacDonald (MM)

Farook Choudhury (FC) Klaus Schonfeld (KS) Shireen Akhter

Issue Action

1. The status of the social survey was reviewed 5.

1.

(i) Intake: 6. All owners and occupants of lands that will be occupied by

the intake pump station site have been identified.

(i) MM to resurvey as necessary to ensure the right owners and occupants have been identified.

(ii) Intake to Bhulta: If additional budget, extra time, and contract extension can be approved quickly, the social survey work can be accomplished in two weeks.

(ii) MM to confirm time commitment. DWASA advised that mouza maps have not been obtained.

(iii) Bhulta – Demra: Road route has been surveyed.

(iii) MM to confirm status

(iv) Bhulta – Kanchan Bridge: Road route has been surveyed.

(iv) MM to confirm status

(v) Khilkhet WTP site: Predictably, the land developer has not been cooperative and consequently, land ownership of the WTP site has not been established. Interministerial cooperation should solve this stalemate for which the long-awaited Steering Committee is required.

(v) DWASA to organize the Steering Committee meeting to address this and several other issues.

(vi) Demra to Saidabad box culvert: No progress todate; need ADB approval of additional budget, extrat time, and contract extension.

(vi) MM to seek ADB approval.

2. Resettlement Plan Preparation of the plan is now a bottleneck.

2. MM to seek ADB’s approval to submit the RP separately from DFR.

3. Morphology study: ADB has identified an expert to review the study. If physical model study is required, DWASA will need 6 months to engage the laboratory.

3. MM to include this time frame in project schedule.




62

Meeting Notes 37

Date: 14 February 2013 Location: DWASA Office, 2nd floor Purpose: 1. To inform about status of the FM assessment questionnaire 2. To obtain missing information concerning DWASA 20 yr financial forecast Attendees:

DWASA Md. Sayed Golam Ahammad, Deputy Managing Director for Finance Mott MacDonald Eric van Woerkom, Project Finance specialist (absent: Mr Iqbal Hossain, Project Finance Specialist; not able to reach DWASA office due to riots and traffic blockades in some city areas)

Issue Action

Note: Mr. Sayed Golam was recently, i.e. since Febr 4th, (re-) appointed in the position of DMD. ( before that he was involved as a resource person in the Khilket project, o.a. for the DWASA FM Assessment questionnaire) 17. Status of DWASA FM Assessment questionnaire. A cover letter was drafted for the Khilkhet PD (Mr. Shahjahan), which was send together with the questionnaire to the relevant DWASA FM persons in December. No responses were received yet. Mr. Golam would follow this up, in coordination with Mr. Iqbal Hossain.

Mr. Golam promised to follow this up, in coordination with Mr. Iqbal Hossain

18. Missing info concerning the DWASA 20yr forecast. The following issues were mentioned: . Usual % of salary for reservations to pensionfund . Split between Water Supply and Sewerage of (i) salary & wages costs, and (ii) administrative costs. . Costs of Saidabad Lease (O&M) contract with French private company Desgremont. Mr. Golam recommended to further discussing these issues with Mr. Iqbal Hossain, as well as Mr. David Turton (FCBP project).

Issues to be further discussed with Mr. Iqbal Hossain and Mr. David Turton (FCBC)

19. Other issues discussed by phone/confirmed by email: . Overview of O&M costs which may not be covered by the Saidabad O&M contract, i.e. still have to be paid by separately by DWASA . Overall/total investment costs for the Saidabad I/II WTP, and the amount of the related (ADB?) loan, incl. interest %, tenure/period and grace period, if any. Final requested crucial info: .Overview/summary of the existing/ loans (ADB, WB, Danida, GoB, other), as well as an overview of the expected future loan amounts (and their conditions) for the planned investments for the new Water Treatment Plants (Khilkhet, Pagla I-II, Saidabad III) planned to be built in the coming 10-20 years?

Mr. Iqbal Hossain to follow this up


/EW



63

Meeting Notes 38

Date: 14 February 2013 Location: DWASA Office, 10nd floor Purpose: To obtain additional information concerning DWASA 20 yr financial forecast

made by the FCBP project Attendees:

DWASA David Turton, Team Leader FCBP project Mott MacDonald Eric van Woerkom, Project Finance specialist (absent: Mr Iqbal Hossain, Local Project Finance Specialist; not able to reach DWASA office due to riots and traffic blockades in some city areas)

Issue Action

1. The main topic of the discussion was to obtain additional explanation the 25 yr financial forecasts made by the FCBP project concerning the existing and future debt service liabilities.

2. Mr. Turton informed that unfortunately the financial model wasn’t updated since July 2012, since the involved (local) financial expert left the project, and yet no replacement could have been arranged.

3. He handed over the complete financial FCBP DWASA model. 4. He suggested contacting the newly appointed DMD for

Finance Mr. Sayed Golam.


/EW



64

Meeting Notes 39

Date: 17 February 2013 Location: DWASA Office, 8th floor Purpose: To obtain additional information on existing & future Debt Service Liabilities of

DWASA. Attendees:

DWASA Md. Mahmudul Islam, DWASA Deputy Project Director Khilket project Mott MacDonald Eric van Woerkom, Project Finance specialist Ahmed Sahadat, Mott Mac office

Issue Action

1. The problems concerning obtain the necessary information concerning the existing and future Debt Service Liabilities of DWASA was explained to Mr. M. Islam. He suggested to contact Mr. Khumar Roy, the Commercial Manager, since he had been involved in such financial matters before.

To contact Mr. Khumar Roy

2. Mr. M Islam contacted Mr. Khumar Roy for introduction. Mr. Khumar Roy requested a letter with further explanation of the purpose of the visit. Mr. M. Islam arranged this accordingly.

3. It was also requested to arrange a meeting with the DWASA Saidabad PD, in order to obtain the financial O&M (/lease) and investment costs for the Sadabad I/II WTP Project. Mr. M. Islam promised to arranges such meeting on short notice

Mr. M. Islam to arrange meeting with DWASA Saidabad PD


/EW



65

Meeting Notes 40

Date: 17 February 2013 Location: DWASA Office, 4th floor Purpose: To obtain additional information on existing & future DSL of DWASA. Attendees:

DWASA Md. Uttam Kumar Roy, DWASA Commercial Manager Mott MacDonald (MM) Eric van Woerkom, Project Finance specialist Ahmed Sahadat, Mott Mac office

Issue Action

1. After introduction (Mr. Khumar hadn’t received the letter) and explanation of the purpose of the meeting Mr. Khumar ultimately couldn’t provide the requested DSL information. He did provide a summary overview, made by the MoF concerning the status of the present Loans. Unfortunately this overview did not provide all the requested information.

2. Mr. Khumar cautioned that the (re-lended) IFI loans from the MoF to DWASA were not final yet, since several of these loan were still under discussing and might partly granted.

3. Mr. Kumar recommended to approach the DWASA Central Economic Department or the FCBP project (Mr. D. Turton) for more detailed information.

To discuss with Khilket PD Mr. Shajahan how to obtain this info on short notice


/EW



66

Meeting Notes 41

Date: 19 February 2013 Location: DWASA Office, Purpose: To obtain additional information on existing & future DSL of DWASA. Attendees:

DWASA Meeting 1: Md. M. Shahjahan, PD DWSSDP project Meeting 2: Md. S.M. F. Uddin, Chief Acounts Officer Meeting 3: Md. Sayed Golam Ahammad, Deputy Managing Director for Finance Mott MacDonald (MM) Eric van Woerkom, Project Finance specialist Ahmed Sahadat, Mott Mac office

Issue Action

• Meeting with Mr. Shahjahan 1. First (short) meeting was held with Mr. Shajahan to explain

the purpose of collecting the info on DWASA’s existing and future Loan/Debt Service Liabilities (DSL’s). Consequently Mr. Shahjahan arranged for meeting with Mr. Farrid Uddin, DWASA Chief Accounts Officer.

2. Further Mr. Shajahan agreed to arrange a.s.a.p. for meeting with the PD of the Saidabad WTP project, Mr. Shiray Uddin.

To meet CAO Mr. F. Uddin

Issue Consequent meeting with Mr. F. Uddin Action

• Meeting with Mr. F. Uddin (4th floor) 3. After introduction and explaining of purpose of meeting and

request for information, the list/overview of requested information was handed over and discussed. It became clear that the requested DSL information was not readily available, if at all. It turned out that most of the loans are allocated under the balance sheet item (14) 'Grants and other funds' and that the respective loan arrangements are still under discussion with the MoF and not finalised with respect which part will be grant, or which part will be a loan. Mr. Uddin promised that he would provide us with the overview of which funds/grants of the "Grants and other funds'' are concerning loans, and that also the questionnaire will be answered a.s.a.p. An email has been sent to Mr. Uddin to request for meeting on coming Sunday (24th) to discuss the results of the questionnaire.

To arrange for follow up meeting with Mr. Uddin

Issue Consequent meeting with Mr. S. Golam, DMD of Finance Action

• Meeting with Mr. S. Golam (2nd floor) 4. Short visit was paid to Mr. S. Golam, to see whether he – as DMD for finance could may help to speed up the requested information from the Chief Accounts office. Mr. Golam wouldn’t help, and advised to send letter to Mr. Uttam Kumar Roy, Commercial Manager, who was the official boss of Mr. Uddin.



67

Meeting Notes 44

Date: 06/8 May 2013

Location: DWASA

Purpose: To review status of project and 10-point action list

Attendees: DWASA

Md. Shahjahan (p)

Mahmudul Islam

Md. Ariful Islam (p)

Kazi Khairul Basar (p)

Abdus Salam Bapary (p)

S.M. Mostafa Kamal Mazumder Ex Eng, Saidabad 2 (p)

Mott MacDonald (MM)

Klaus Schonfeld

Shireen Akhter (p)

ADB

Hafiza (p)

(p) part-time

Issue Action

1. Some of the 10 action items (email from ADB to DWASA refers) were discussed. The items are:

(i) Status of project scope & surveys (topo and social) (ii) PMU comments on DFR (iii) Construction sequence (iv) Preferred contract modality (DFR recommends design-build) (v) Appetite for outsourced plant operations (a la Saidabad 2) and general contract information (vi) Copies of MOUs from concerned Ministries regarding details of pipe corridors - or, if MOUs are not available, arrangements for meetings with the concerned planning departments no later than 9 May. (vii) Appropriate cost of electricity (BDT/kWh) (viii) Import tax/duty situation based on Saidabad 2 (exemptions?) (ix) WTP site ownership documentation (x) Site visit

1. (i) Item refers (ii) PPTA responses were discussed in 8 May meeting; the comment-response matrix is attached and will be repeated in the overall DFR comment-response matrix. (iii) Construction sequence was discussed in 8 May meeting with reference to DFR Figure 8. It was noted that the schedule will change in the new DFR to reflect the new scope. (iv) Item refers. (v) Item refers (vi) Item 7. refers (vii) Item 16 (i) refers. (viii) Item 16 (iii) refers (ix) Item …. Refers (x) A site visit has been scheduled for Saturday, 11 May starting at 07:30 at the Pan Pacific Hotel. Participants are: DWASA: M. Islam plus one engineer PPTA: K. Schonfeld, Nigel Osmaston, Shireen Akhter

2. It was noted that the PMU has not been formed but that the formation is imminent. It was agreed that

2. DWASA to establish a fully-staffed PMU at the earliest. On 8



68

Issue Action

having the PMU in place as soon as possible is necessary for the smooth implementation of the project.

May, DWASA advised that a PMU will be formed in 2~3 days.

3. The relocation of the WTP has changed the name of the project to “Gandharbpur Water Treatment Plant Project”. The DFR will therefore be titled ADB PPTA 8053 BAN: Gandharbpur Water Treatment Plant Project (formerly Khilkhet WTP Project)

3. Noted. On 8 May, ADB advised that the name of the project will remain as before: Khilkhet Water Treatment Plant Project. DWASA confirms that the spelling of the new WTP site is

4. It was agreed that M Islam will provide MM with drawings showing the final alignment of the pipeline routes, which correspond to the areas of the social survey.

4. The social survey to be completed at the earliest – attached schedule refers.

5. It was agreed that DWASA will provide MM with (i) the name of the agency who will provide electric power to the new WTP location (ii) the length of the 33kV transmission line (iii) the cost of the 33kV transmission line (8MW) (iv) Connection charges (4MW in 2018 and 8MW in 2025) (v) Cost of electricity (BDT/kWh)

5. M Islam: please note

6. It was noted that the topographical survey has not been completed and that consequently, the Draft Final Report (DFR) will not include survey maps but instead, graphical representations on Google Earth satellite imagery background.

6. Noted

7. DPD advised that MOUs for the cooperation between responsible Ministries and line agencies have not been drafted. Due to the very short time available, the PPTA team cannot now wait for the MOUs but will obtain detail information from concerned planning departments on existing and future road geometries to ensure that the pipeline construction can be accommodated.

7. M Islam: please note DWASA agreed to expeditiously arrange for meetings with concerned planning departments to obtain details of existing and future road geometries. First of 4 meetings (RHD) scheduled for 9 May. DWASA advised that all four letters requesting the meetings have been sent.

8. DPD advised that RS-based drawings are available for the Bhulta-US Embassy route.

8. M Islam: please provide earliest. DWASA agreed to provide the drawings on Sunday, 12 May

9. A discussion ensued about the modality of contract implementation. The general differences between FIDIC Red Book and Yellow Book were discussed. DWASA appears of the opinion that the Red Book approach (conventional detail design by a consultant followed by construction of the works by a contractor) is less expensive that the Yellow Book approach (design-build where a contractor designs the works based on more or less detailed specifications and constructs the works based on periodically approved designs). Both

9. M Islam: please note, DWASA to confirm. design/construction modality. DWASA agreed to design-build in general and advised that its (bad) experience with design-build was based on the current project in Dhaka.



69

Issue Action

modalities require the Owner (DWASA) to engage consultants to produce detail design (red) or d-b specifications (yellow) as well as supervision consultants who, for the d-b modality, approve designs and supervise construction on behalf of the Owner. It was noted that the main reason for d-b is the potential for time savings. 10. While there will be multiple procurement packages identified in the DFR, the possibility to award any or all to a single general contractor may be viable under a parallel co-financing scenario. MM is convinced that awarding the multiple contracts to a single bidder would save significant money. The opportunity for a contractor to bid on any or all procurement packages would be included in the Information for Bidders part of the RFQ.

10. ADB to determine

11. While discussing some of the details of conventional design and design-build, it was noted that the design-build specifications can include some very specific details, such as any aspects of a control building, the color of walls, and the type of pumps. In this context, it was also noted that the Owner could pre-purchase certain items such as long-delivery equipment but that this would require additional consultant actions and, of course, agreement by the senior financier on behalf of all financiers.

11.

12. Unless otherwise instructed by ADB, the DFR financing plan will be based on four sources of funds: ADB, AFD, EIB, and the government.

12. ADB to advise

13. PD advised that the operation of the WTP will very likely be outsourced (as Saidabad 2). MM advised that by ADB’s definition, the project will have a PPP component (construction plus outsourced O&M is greater than 5 years).

13. DFR will refer to DBO option

14. DPM agreed to provide copies of legal documents indicating legal ownership of the Gandharbpur WTP site as well as its size.

14. M Islam: please note Imtiaz Farooq to review DWASA agreed to provide the documents on Monday, 13 May.

15. DPD offered to introduce the Executive Engineer who worked on Saidabad 1 and 2 to advise the current cost of electricity (BDT/kWh), O&M contract, and all based on Saidabad 2 and.

15. Very useful meeting held

16. S.M. Mostafa Kamal Mazumder advised: (i) 5.96 BDT/kWh during non-peak hours and 9.33 BDT/kWh during peak hours (10am~2pm and 6pm~10pm) (ii) The 3-year O&M contract with Dégremont is in the amount of BDT 50 crore. 3 full-time expatriate expert operators augmented by 7 to 10 temporary expatriates supervise some 50 national plant staff. The BDT 50 crore includes all costs except power

16. (i) The cost estimates and financial and economic analyses will be revised to reflect these prices. (ii) The cost estimates and financial and economic analyses will be revised to reflect these prices. (iii) The cost estimates and



70

Issue Action

and chemicals; i.e., all salaries and replacement parts. (iii) Equipment for Saidabad 2 (design-build, financed by DANIDA) was subject to import duty and taxes paid by DWASA

financial and economic analyses will be revised to reflect this information or our legal analysis – Imtiaz Farooq has reiterated our position in the DFR that import duties and taxes may be exempt upon application to the National Board of Revenue (NBR).

17. The DPD was advised to add the following two items to the contract for water quality monitoring:

(i) Water levels in addition to water depths (ii) Salinity sampling at four locations

approximately 3 km apart upstream of the Meghna Bridge

17. DWASA to modify the contract for Meghna River water quality monitoring to include these two additional components. DWASA confirms that the contract for Meghna River water quality monitoring will be modified as noted.

18. Shireen was contacted. She agreed to join the discussion on the progress of the social survey on 6 May.

18.

19. The DPD advised that the raw water pipeline route to the WTP has been changed and that this is the final alignment. The status of the social survey is:

19.

Area/route Done Market survey

Notes (attached schedule refers)

Intake Yes Yes Property values have been determined (Hafiza)

Intake-Bhulta Yes Yes Property values will be determined 9 May (Hafiza)

Bhulta-Shejan Juice Yes Yes Coding to be delivered to Hafiza 10 May (Shireen) Property values will be determined 11 May (Hafiza)

Shejan Juice-WTP No No (i) It should be noted that all work with respect to this new route is additional. (ii) Shireen was informed of this new route informally on 30 April 2013. (iii) DWASA to provide route survey mapping with GPS coordinates. (iv) When mapping received, Shireen will survey and code in 15 unobstructed calendar days. (v) Livelihood compensation to be incorporated by Hafiza in overall RP.

WTP site No n/a (i) We were advised that the DWASA MD should request assistance from local MP before our social team canvasses the current occupants (vegetable growers). (ii) Due to the political unrest, we believe that the MP will be unavailable for an indefinite period of time. (iii) In order to proceed, it was agreed that the social team obtains information on a sample basis of about 10% starting 10 May. (iv) Sample survey, coding, data entry will be complete by 17 May. (v) Livelihood compensation to be incorporated by Hafiza in overall RP.



71

Issue Action

WTP-Mura Para Yes Yes (i) Along West side of highway, route identified by DPD without reference to drawings; small temporary commercial structures, a few modest squatter dwellings, drainage canals and ponds. (ii) Livelihood compensation and replacement data (Shireen) to Hafiza 10 May (iii) Livelihood compensation and replacement to be incorporated by Hafiza in overall RP 12 May.

Mura Para-Balu R. Yes Yes (i) Market values to be delivered to Hafiza 11 May (Shireen) (ii) Property values will be determined 2 days after receipt of market values (Hafiza)

Balu R.-US Embassy Yes No (i) Market survey (Shireen) 8 May (ii) Market values to be delivered to Hafiza 12 May (Shireen) (iii) Livelihood compensation and replacement to be incorporated by Hafiza in overall RP 2 days after.

Shejan Juice-Bridge Yes Yes (i) Market values to be delivered to Hafiza 12 May (Shireen) (ii) Livelihood compensation and replacement to be incorporated by Hafiza in overall RP by 14 May.

Bridge-Box culvert Yes No (i) Market survey (Shireen) 8 May (ii) Market values to be delivered to Hafiza 12 May (Shireen) (iii) Livelihood compensation and replacement to be incorporated by Hafiza in overall RP 2 days after.

Note: meeting notes copied to DPD 7 May 2013 via memory stick (no internet connection)


/kks



72

ADB PPTA 8053 BAN: Gandharbpur Water Treatment Plant Project

Mott MacDonald Project Number 309128

Social Survey Tasks - May/June 2013

May June

Route/task Consultant 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3

Intake-Bhulta

Determine property market values Hafiza

Bhulta-Shejan Juice

Deliver coding to Hafiza Shireen

Determine property values Hafiza

Shejan Juice-WTP (new)

DWASA provide mapping & GPS DWASA

Social survey & code to Hafiza Shireen

Incorporate livelihood comp in RP Hafiza

WTP site

10% social survey & code to Hafiza Shireen


WTP-Mura Para

Livelihood comp & replacement data to Hafiza Shireen


Mura Para-Blu River

Deliver property market data to Hafiza Shireen

Determine property market values Hafiza

Balu River-US Embassy

Market survey Shireen


Incorporate livelihood & replacement comp in RP Hafiza

Shejan Juice-Demra Bridge



Demra Bridge-Box culvert

Market survey Shireen

Livelihood comp & replacement data to Hafiza Shireen




73

DWASA PMU Comments

ADB: #6 is reiteration of ADB's comments. Technical issues raised by DWASA are very

important, so I request that these will be addressed sufficiently.

1

PPTA team response to DWASA comment 1

1.1 We note that the “new” route has since been changed again and trust that this

is the final change (Item 19. of Meeting Notes 44 refers).

1.2 The simplest way to obtain the required documents would be to amend the

existing topographic survey contract. Failing that, we could engage a separate

survey team to produce the necessary base information for the social survey to

be completed. Please advise.



74

DWASA PMU Comments

2


Note: $3350/m DI is from Q Islam’s cost estimate; $1273/m GRP is from Q Islam’s

cost estimate; $2672/m steel is in line with our estimated $2639 (average of 4

quotations).

Our recommended approach is for the design-build bids to determine the least-cost

alternative.

(para 153 ~ 170 and Table 9 refer)

3


The addition of a dam at the intake site as a raw water source, while interesting,



75

DWASA PMU Comments

was not considered. If DWASA deems it advantageous, such an option could be

included as an alternative in the design-build bid for the intake/intake pump station.

If pursued by the bidders, this would show the financial feasibility (cost of reservoir

vs. savings in pump operation). Please note that pumping 500MLD for one month

per year and assuming an effective depth of 3m, a reservoir area of about 500ha

would be required.

4


The feasibility study recommends vertical turbine pumps. Submersible usually

means that the pump motor is submerged whereas in a vertical turbine pump

installation, only the pump element and some discharge piping is submerged. We

discussed the merits of vertical turbine pumps vs dry-pit horizontal split-case.

We agree that expert engineering judgment is necessary for the selection of all

pumps, including those for the intake pump station and have endeavored to

provide some insight in the DFR (para 51. refers, also slide from steering

committee presentation).



76

DWASA PMU Comments


We endorsed the methodology as set out in the feasibility study and did not find it

necessary to repeat standard hydraulic and financial calculations. In any case, our

recommended approach is for the design-build bids to determine the least-cost

alternative.



77

DWASA PMU Comments

6


6.1 (i) We agree that this is from the PPTA TOR and advise that this was addressed

in the Khilkhet DFR and that it will also be covered in the new Gandharbpur DFR.

6.2 (ii) We agree that this is from the PPTA TOR

6.3 (iii) We agree that this is from the PPTA TOR and note that DWASA has already

received such documentation.

6.4 (iv) We agree that this is from the PPTA TOR and advise that this will be

covered in the new Gandharbpur DFR.

6.5 We believe that we have addressed our TOR adequately and refer, for example,

to our response to DWASA comment 5.

6.6 We have addressed most tasks set out in the TOR and will address all

outstanding tasks in the new Gandharbpur DFR.



78

Meeting Notes 46

Date: 16 May 2013

Location: DWASA

Purpose: To discuss technical and financial aspects of DFR

Attendees: DWASA

Engr. Choudhury, DMD (p)

Mahmudul Islam, DPD

Mahboob Hassan, Sr. Finance Officer (p)

Mott MacDonald (MM)

Klaus Schonfeld

(p) – part-time

Issue Action

20. It was noted that the PMU has apparently not been formed but that the formation is imminent. It was agreed that having the PMU in place as soon as possible is necessary for the smooth implementation of the project.

20. DWASA to establish a fully-staffed PMU at the earliest. On 16 May, DWASA advised that the formation and composition of the PMU will be announced by the MD upon his return on 19 May.

21. It was noted that drawings showing the final alignment of the pipeline routes have not been received per schedule (15 May).

21. The social survey will be started as soon as the drawings are received. Consequently, a further delay in the production of the RP can be expected.

22. It is noted that copies of legal documents indicating legal ownership of the Gandharbpur WTP site as well as its size have not been provided.

22. M Islam: please note

23. Re. Duty etc.: (i) The cost estimate is based on VAT and tax on

civil works and no duty for M&E equipment, including pipes.

(ii) DWASA is of the opinion that duty and VAT should be included on all materials and cited Saidabad as an example where DWASA paid duty and VAT on all M&E equipment.

(iii) DWASA agreed to provide the PPTA team with a definite answer, citing rates of duty for the following items, with specific references in relevant Acts or Regulations: Pipes (2200mm dia, GRP, DI, steel, PCCP) Pumps (vertical turbine type, ~800 hp) Valves (butterfly, non-return, ~800mm dia) Electric equipment (transformers, MCCs)

(iv) DWASA noted that cement will not be imported.

23. (i) n/a (ii) DWASA agreed to

provide the answers today.

(iii) DWASA provided some approximate rates (60% and 70%); however, not with reference to any document.

(iv) Noted.



1

APPENDIX 4: PLAN OF ACTION FOR DECOMMISSIONING DTWS IN DHAKA CITY

1. INTRODUCTION. Dhaka Water Supply and Sewerage Authority (DWASA) is mandated to supply water to the city dwellers. The jurisdiction of DWASA extends to around 600 km2. However, DWASA is actively involved only in the present Dhaka City area of around 350 km2 with a population of over 10 million. As per DWASA, the present demand of the city is approximately 2200 million liters per day (MLD) against an average supply of 1950 MLD. A recent estimate shows that the demand of the city will be around 4300 MLD by the year 2030. The main source of water supply to the city is groundwater, which accounts for 88% of the total supply. The rest is from surface water. 2. Dhaka City has one of the largest wellfields in the world. As per DWASA records there were 632 deep tubewells (DTWs) with a combined production of about 1678 MLD on January 9, 2013. In July 2012 the number of DTWs was 627 and total production was 1932 MLD. The difference is because of lowering of production from DTWs by DWASA due to lower water demand in winter and addition of Saidabad WTP Phase II production in the system. 3. Over reliance on the local upper aquifer has lead to a groundwater mining situation. A recent estimate by IWM shows that 14-15% of the total abstraction is from mining of upper aquifers. As a result the groundwater level is declining at an alarming rate of 2-3 meters per year. In some parts of the city, the rate is even higher. The deeper aquifer is a pressurized aquifer with limited potential for safe abstraction. Recently a fourth aquifer layer below 350 m has been detected.

4. DWASA is now shifting its focus to surface water sources. The peripheral rivers have relatively good flow, e.g. dependable (80 percentile) flows of Buriganga and Lakhya Rivers are 59 and 89 cumecs respectively. However, the dry season water quality of these sources are very poor. Therefore, larger, regional rivers are being considered as supply sources for the city. These include the major rivers of Padma and Meghna, which have 80% dependable flows of about 9,000 and 4,000 m3/s respectively. Therefore, Dhaka City does not face constraints from the point of view of water resources availability. 5. In the context mentioned above, it has now become necessary to develop a plan of action to decommission the DTWs in phases as DWASA shifts to surface water sources in the future.

6. OBJECTIVE. The objective of the study is to develop a plan of action to lessen the dependency on groundwater for Dhaka City water supply by decommissioning of DTWs in critical areas of groundwater level depletion and matching the actions with the commissioning of the planned surface water treatment plans in coming years.



2

7. SCOPE OF WORK. The scope of the study includes, but is not limited to, the following:

(i) Collection and acquisition of data (a) Hydrogeological, lithological, hydro-geochemical data from secondary

sources (b) Build comprehensive data base from secondary sources on the geology

and stratigraphy for study area (c) Study drill logs of tube wells in the area to gather further up-to-date

information on the aquifer system (d) Identify the gaps in the information and determine need additional data

for the study (e) Drill test wells to acquire data required (f) Test drilling and aquifer test to depths below 350 m where the fourth

aquifer layer is envisaged (g) Carry out chemical analysis of the existing and new wells (h) Collect production well yields and performance data (i) Collect monitoring well data in both upper and deeper aquifers

(ii) Hydrogeological data compilation, analysis and investigation

(a) Database development and analysis of long-term data from secondary

and primary sources (b) Aquifer system delineation and aquifer mapping (c) Mapping of DTWs locations (d) Analyze groundwater quality, geo-chemistry (e) Analyze aquifer test data and production well data (f) Determine storage capacity, transmissivity, specific yield, and other

aquifer characteristics and parameters (g) Analytically determine safe yield from different aquifer units

(iii) Groundwater modeling

(a) Update the existing groundwater model of Dhaka City and surrounding

areas with recent data (b) Calibrate and validate the groundwater model (c) Apply the groundwater model to decommission the existing DTWs as

new surface water plants are commissioned in phases and assess the impacts of such decommissioning on groundwater level depletion, groundwater level recovery and DTW production.

(iv) Plan of action

Formulate, based on hydrogeological investigations and groundwater modeling and mapping, a 30 year phased action plan for decommissioning of DTWs in Dhaka City keeping within the safe, sustainable yield of the aquifers.



3

8. TIME LINE. The following schedule is proposed

Table 1: Proposed Time Line

Sl. No. Items Schedule

1 Inception Report End of month 2

2 Interim Report End of month 12

3 Draft Final Report End of month 22

4 Final Report End of month 24

9. COST ESTIMATE. The estimated cost is shown in Table 2. Table 3: Cost Estimate

Cost item (BDT) ($US)¹

Direct Costs - Investigations 20,413,000 255,163

Fees 6,537,000 81,713

Expenses 1,716,000 21,450

Sub-total 28,666,000 358,325

VAT (15%) 4,299,900 53,749

Income Tax (IWM is exempted from IT by NBR) 0 0

Total (for Indirect Local Tax) 32,965,900 412,074

¹ForEx $ US = BDT 80.00

Details of the costs are in Tables 4, 5, and 6

Draft Final Report – March 2013


4



1

APPENDIX 5: SUPPLY VS. DEMAND – SPREADSHEET DATA

Draft Final Report – March 2013 Appendix 6


1

APPENDIX 6: CAPEX AND OPEX ESTIMATES

A PROJECT CAPITAL COST $

Notes

1.0 Intake

1.1 Civil Work 13,468,156

1.1.1 Gandharbpur portion 70.0% 9,427,710 9,427,710

1.1.2 Saidabad portion 30.0% 4,040,447 4,040,447

1.1.3 Dredging & revetment 1,275,000 1,275,000

1.2 Mechanical Supply 13,724,000 1.2.1 Gandharbpur portion 52.5% 7,205,100 7,205,100

1.2.2 Saidabad portion 47.5% 6,518,900 -

1.3 Electrical Supply 3,130,517


1.3.2 Saidabad portion 47.5% 1,486,996 -

1.4 M&E Install 1,568,107 1.4.1 Gandharbpur portion 823,256 823,256

1.4.2 Saidabad portion 744,851 -

1.5 Design


1.5.2 Saidabad portion 5.5% 703,516 222,225

1.6 Construction supervision

1.6.1 Gandharbpur portion 5.0% separate separate

1.6.2 Saidabad portion 5.0% separate separate

1.7 Subtotal G 21,495,189 21,495,189

1.8 Subtotal S 13,494,709 4,262,672

1.9 Physical Contingency G 15.0% 3,224,278 3,224,278

1.10 Physical Contingency S 15.0% 2,024,206 639,401

1.11 Intake - Gandharbpur portion 24,719,468 24,719,468

1.12 Intake Saidabad portion 15,518,915 4,902,072

1.13 Intake TOTAL 40,238,383 29,621,540

2.0 Gandharbpur WTP

2.1 Civil 40,568,401 40,568,401

2.2 Mechanical 44,235,150 44,235,150 2.3 Electrical 2,081,173 2,081,173

2.4 M&E installation 4,656,473 4,656,473

2.5 Subtotal 91,541,197 91,541,197

2.6 Design 5.5% 5,034,766 5,034,766

2.7 Construction supervision 5.0% separate separate

2.8 Subtotal 96,575,963 96,575,963

2.9 Physical Contingency 15.0% 14,486,395 14,486,395

2.10 Total WTP 111,062,358 111,062,358

3.0 Pipelines (incl. river crossings)

3.1 Intake to Juice Factory

3.1.1 Pipe + bridges supply & install 94,256,026 47,128,013

3.1.2 Design 5.5% 5,184,081 2,592,041

3.1.3 Construction supervision 5.0% separate separate

3.1.4 Subtotal 99,440,107 49,720,054

3.1.5 Physical Contingency 15.0% 14,916,016 7,458,008

3.1.6 Total 114,356,123 57,178,062

ComponentConstruction Base Cost

excl. all Saida-

bd pipes+pumps

Whole

Project



2

3.2 Juice Factory to WTP

3.2.1 Pipe supply & install 15,712,359 15,712,359

3.2.2 Design 5.5% 864,180 864,180

3.2.3 Construction supervision 5.0% separate separate

3.2.4 Subtotal 16,576,538 16,576,538


3.2.6 Total 19,063,019 19,063,019

3.3 WTP to Injection point + 21 km of Distribution Reinforcement

3.3.1 Pipe supply & install 84,202,198 84,202,198

3.3.2 Design 5.5% 4,631,121 4,631,121

3.3.3 Construction supervision 5.0% separate separate3.3.4 Subtotal 88,833,319 88,833,319


3.3.6 Total 102,158,317 102,158,317

3.4 Juice Factory to DND canal

3.4.1 Pipe supply & install 36,476,214

3.4.2 Design 5.5% 2,006,192

3.4.3 Construction supervision 5.0% separate

3.4.4 Subtotal 38,482,406

3.4.5 Physical Contingency 15.0% 5,772,361

3.4.6 Total 44,254,767 -

3.5 DND canal - Saidabad chamber

3.5.1 Pipe supply & install 17,008,722

3.5.2 Design 5.5% 935,480

3.5.3 Construction supervision 5.0% separate3.5.4 Subtotal 17,944,201

3.5.5 Physical Contingency 15.0% 2,691,630

3.5.6 Total 20,635,831 -

SUB TOTAL CAPEX (1.0 + 2.0 + 3.0) 451,768,799 319,083,296

Total Design included above 20,479,937 14,464,934

Total Physical Contingency incl.above 58,926,365 41,619,560

4.0 Other costs

4.1 Land acquisition GoB 0% 61,000,000 61,000,000

4.2 Power supply (G) GoB 0% 1,543,750 1,543,750

4.3 Power supply (S) GoB 100% 1,787,500 -

4.4 River study & modeling 0% 388,500 388,500 4.5 Environmental cost GoB 15% 380,750 323,638

4.6 Social cost / resettlement GoB 16,220,203 14,759,329

4.7 IDC 15% t.b.c t.b.c

4.8 Recurrent Cost of PMU 0% t.b.c t.b.c

4.9 Price Contingency 15% t.b.c t.b.c

4.10 Duty & taxes GoB 119,510,415 95,343,438

4.11 Total Other costs 200,831,118 173,358,655

Project Cost (excl IDC, RC, PC, supervision) 652,599,917 492,441,950

Construction Supervision 18,618,125 13,149,940

Project Cost (excl IDC, RC, PC, incl supervision) 671,218,042 505,591,891

Saving if all Saidabad pipes + pumps omitted excl. IDC, RC, PC 165,626,151

Green = Local costs Brown = Foreign costs Italic = Saida Items reduced

Assumed

Saida %



3

B PROJECT Operating & Maintenance (O&M) COST - $ /year

1.0 Bisnondi Intake BDT/$ 80

1.1 Re Gandharbpur

1.1.1 Staff 13 4,500 58,500

1.1.2 Maintenance

1.1.2.1 Civil 0.5% 9,427,710 47,139

1.1.2.2 Mechanical 5.0% 7,205,100 360,255 1.1.2.3 Electrical 2.5% 1,643,521 41,088

1.1.3 Power (BDT/kWh, kWh/year) 7.1 2,035 1,581,852

1.1.4 Chlorine (mg/L @$/kg, MLD) 3 0.10 525 57,488

1.1.5 Subtotal 2,146,321

1.1.6 Contingencies 10% 214,632

1.1.7 Total (Gandharbpur WTP portion) 2,360,953

1.2 Re Saidabad

1.2.1 Staff (No, $/year) 13 4,500 58,500

1.2.2 Maintenance

1.2.2.1 Civil 0.5% 4,040,447 20,202

1.2.2.2 Mechanical 5.0% 6,518,900 325,945 1.2.2.3 Electrical 2.5% 1,486,996 37,175

1.2.3 Power (BDT/kWh, kWh/year) 7.1 2,848 2,213,886

1.2.4 Chlorine (mg/L @$/kg, MLD) 3 0.10 475 52,013

1.2.5 Subtotal 2,649,221

1.2.6 Contingencies 10% 264,922

1.2.7 Total Saidabad portion) 2,914,143

2.0 Gandharbpur WTP

2.1 Staff (No, $/year) 80 4,500 360,000

2.2 Maintenance

2.2.1 Civil 0.5% 40,568,401 202,842

2.2.2 Mechanical 5.0% 44,235,150 2,211,758

2.2.3 Electrical 2.5% 2,081,173 52,029 2.2 Power (BDT/kWh, kWh/year) 7.1 3,785 2,942,432

2.3 Chemicals (ex FS: p.241 @ BDT70/$) 3,360,886

2.4 Subtotal 8,769,947

2.5 Contingencies 10% 876,995

2.6 Total 9,646,942

3.0 Pipeline maintenance (assume bi-annually)

3.1 Intake to WTP

3.1.1 Personnel (cleaning outsourced) 28,000

3.1.2 Staff (monitoring) 2 4,500 9,000

3.1.3 Equipment (monitoring & cleaning) 50,000

3.1.4 Lost Water (Vol @ BDT15/m³) 21.85 3.80133 15.0 15,574

3.1.5 Total per year 63,574

3.2 Intake to Saidabad

3.2.1 Personnel (cleaning outsourced) 28,000

3.2.2 Staff (monitoring) 2 4,500 9,000

3.2.3 Equipment (monitoring & cleaning) 50,000

3.2.4 Lost Water (Vol @ BDT15/m³) 30 3.80133 15.0 21,382

3.2.5 Total per year 69,382

4.0 Total O&M 15,054,993

Component $/year



4

C PROJECT Contract Packaging

Contract Package

Type1 DBO 284,719,884 69,805,734

2 D&B 102,158,317 29,791,239

3 D&B 64,890,598 19,913,443

+ Duties

+ taxes $

Contract

Value $

2000 Mld Bisnondi Intake + river training works +

1000 Mld pump station + 2 raw water pipes (17 km +

22 km), in same trench + 250m of twin pipe bridges,

to Gandharbpur + 500 Mld WTP. (but only operate 1

pipe).

2.2 m dia. raw water pipeline 13 km from Sejan Juice

Factory, buried along Dhaka - Sylhet highway to

culvert near Saidabad WTP + 200m of pipe bridges,

2 m dia. treated water pipeline 13 km from

Gandharbpur WTP to Dhaka city injection point + 21

km of buried network reinforcement pipes within

Dhaka 1 m to 2 m dia. + 650m of pipe bridges.



5

Including Saidabad

Table 1: Project Investment Costs ($ Million)

Total

A. Base Costs

1 Intake

1.1 Civil Work

1.1.1 Gandharbpur portion 9.4

1.1.2 Saidabad portion 4.0

1.1.3 River study, model and bank training 1.7

1.2 Mechanical Supply



1.3 Electrical Supply



1.4 M&E Install



2 Gandharbpur WTP

2.1 Civil 40.6

2.2 Mechanical 44.2

2.3 Electrical 2.1

2.4 M&E installation 4.7

3 Pipelines (incl. clean-outs and crossings)

3.1 Intake to Juice Factory 94.3

3.2 Juice Factory to WTP 15.7

3.3 WTP to Injection point + 21 km of Distribution Reinforcement 84.2

3.4 Juice Factory to DND canal 36.5

3.5 DND canal - Saidabad chamber 17.0

4 Other costs

4.1 Land acquisition and resettlement 77.2

4.2 Power supply (G) 1.5

4.3 Power supply (S) 1.8

4.4 Environmental cost 0.4

4.5 Construction Supervision 18.6

4.6 Total Design 20.5

5 Duty & taxes 119.5

6 PMU Operational costs 2.3

Subtotal (A) 614.7

B. Contingencies

1 Physical 59.0

2 Price 75.7

Subtotal (B) 134.7

C. Financial Charges During Implementation 23.7



6

Total (A+B+C) 773.1


Source Total %





Total 773.1 100.0



7

Table A.1 Detailed Cost Estimate by Expenditure Category

Local Currency Units Thousand $ thousand % Foreign % Base

Foreign Local Total Foreign Local Total Exchange Costs

A. Investment Costs

1 Civil Works

1.1 Intake

1.1.1 Gandharbpur portion 0.0 754,216.8 754,216.8 0.0 9,427.7 9,427.7 0% 2%

1.1.2 Saidabad portion 0.0 323,235.8 323,235.8 0.0 4,040.4 4,040.4 0% 1%

1.1.3 River study, model and bank training 0.0 133,080.0 133,080.0 0.0 1,663.5 1,663.5 0% 0%

1.2 Gandhrabpur WTP

1.2.1 WTP 0.0 3,245,472.1 3,245,472.1 0.0 40,568.4 40,568.4 0% 7%

1.3 Pipelines (incl. clean-outs and crossings)

1.3.1 Intake to Juice Factory 4,731,261.2 2,809,220.9 7,540,482.1 59,140.8 35,115.3 94,256.0 63% 15%

1.3.2 Juice Factory to WTP 708,173.4 548,815.3 1,256,988.7 8,852.2 6,860.2 15,712.4 56% 3%

1.3.3 WTP to Injection point + 21 km of Distribution Reinforcement

4,715,321.7 2,020,854.1 6,736,175.9 58,941.5 25,260.7 84,202.2 70% 14%

1.3.4 Juice Factory to DND canal 2,130,361.7 787,735.4 2,918,097.1 26,629.5 9,846.7 36,476.2 73% 6%

1.3.5 DND canal - Saidabad chamber 1,020,613.4 340,084.3 1,360,697.7 12,757.7 4,251.1 17,008.7 75% 3%

2 Mechanical and Equipment

2.1 Intake

2.1.1 Gandharbpur Mechanical 576,408.0 0.0 576,408.0 7,205.1 0.0 7,205.1 100% 1%

2.1.2 Saidabad Mechanical 521,512.0 0.0 521,512.0 6,518.9 0.0 6,518.9 100% 1%

2.1.3 Gandharbpur Electrical 131,481.7 0.0 131,481.7 1,643.5 0.0 1,643.5 100% 0%

2.1.4 Saidabad Electrical 118,959.6 0.0 118,959.6 1,487.0 0.0 1,487.0 100% 0%

2.1.5 Gandharbpur M&E Install 0.0 65,860.5 65,860.5 0.0 823.3 823.3 0% 0%

2.1.6 Saidabad M&E Install 0.0 59,588.1 59,588.1 0.0 744.9 744.9 0% 0%

2.2 Gandhrabpur WTP

2.2.1 Mechanical 3,538,812.0 0.0 3,538,812.0 44,235.2 0.0 44,235.2 100% 7%

2.2.2 Electrical 166,493.8 0.0 166,493.8 2,081.2 0.0 2,081.2 100% 0%

2.2.3 M&E installation 0.0 372,517.8 372,517.8 0.0 4,656.5 4,656.5 0% 1%

3 Environmental and Social Mitigation

3.1 Environmental cost 0.0 30,460.0 30,460.0 0.0 380.8 380.8 0% 0%

4 Other costs

4.1 Land acquisition and resettlement 0.0 6,177,616.2 6,177,616.2 0.0 77,220.2 77,220.2 0% 13%

4.2 Power supply (G) 123,500.0 0.0 123,500.0 1,543.8 0.0 1,543.8 100% 0%

4.3 Power supply (S) 143,000.0 0.0 143,000.0 1,787.5 0.0 1,787.5 100% 0%

4.4 Construction Supervision 1,491,004.0 0.0 1,491,004.0 18,637.5 0.0 18,637.5 100% 3%



8



4.5 Total Design 1,640,104.4 0.0 1,640,104.4 20,501.3 0.0 20,501.3 100% 3%

5 Duty & taxes 0.0 9,560,833.2 9,560,833.2 0.0 119,510.4 119,510.4 0% 19%

Subtotal (A) 21,757,007.0 27,229,590.5 48,986,597.5 271,962.6 340,369.9 612,332.5 44% 100%

B. Recurrent Costs

1 Salaries 0.0 101,136.2 101,136.2 0.0 1,264.2 1,264.2 0% 0%

2 Equipment Operations and Maintenance 0.0 6,100.0 6,100.0 0.0 76.3 76.3 0% 0%

3 PMU Investment Cost 0.0 80,636.0 80,636.0 0.0 1,008.0 1,008.0 0% 0%

Subtotal (B) 0.0 187,872.2 187,872.2 0.0 2,348.4 2,348.4 0% 0%

Total Base Costs 21,757,007.0 27,417,462.7 49,174,469.8 271,962.6 342,718.3 614,680.9 44% 100%

C. Contingencies

1 Physical 4,719,027.6 0.0 4,719,027.6 58,987.8 0.0 58,987.8 100% 10%

2 Price 6,058,468.7 0.0 6,058,468.7 75,730.9 0.0 75,730.9 100% 12%

Subtotal (C) 10,777,496.3 0.0 10,777,496.3 134,718.7 0.0 134,718.7 100% 22%

D. Financial Charges During Implementation

1 Interest During Construction 1,842,105.1 0.0 1,842,105.1 23,026.3 0.0 23,026.3 100% 4%

2 Commitment Charges 52,000.0 0.0 52,000.0 650.0 0.0 650.0 0%

3 Front-End Fees 0.0 0.0 0.0

Subtotal (D) 1,894,105.1 0.0 1,894,105.1 23,676.3 0.0 23,676.3 100% 4%

Total (A+B+C+D) 34,428,608.4 27,417,462.7 61,846,071.1 430,357.6 342,718.3 773,075.9 56% 126%



9

Excluding Saidabad

Table 3: Project Investment Costs without any Saidabad Pipeline

but incl. Intake + Pump Stn for Saidabad pumps in future ($ Million)

Total

A. Base Costs

1 Intake

1.1 Civil Work



1.1.3 River study, model and bank training 1.7

1.2 Mechanical Supply


1.3 Electrical Supply


1.4 M&E Install


2 Gandharbpur WTP

2.1 Civil 40.6

2.2 Mechanical 44.2

2.3 Electrical 2.1

2.4 M&E installation 4.7

3 Pipelines (incl. clean-outs and crossings)

3.1 Intake to Juice Factory 47.1

3.2 Juice Factory to WTP 15.7

3.3 WTP to Injection point + 21 km of Distribution Reinforcement 84.2

4 Other costs

4.1 Land acquisition and Resettlement 75.8

4.2 Power supply (G) 1.5

4.3 Environmental cost 0.3

4.4 Construction Supervision 13.2

4.5 Total Design 14.5

5 Duty & taxes 95.3

6 PMU Operational costs 2.3

Subtotal (A) 466.4

B. Contingencies

1 Physical 41.7

2 Price 59.2

Subtotal (B) 100.9



10

C. Financial Charges During Implementation 20.5

Total (A+B+C) 587.8


Source Total %





Total 587.8 100.0

Government: items 4.1, 4.2, 4.5 and 5: $174 million plus a part of contingency

ADB $220 million, AFD $100 million, EIB $100 million = total $420 million minus a part of contingency



11

Table A.2 Detailed Cost Estimate by Expenditure Category



A. Investment Costs

1 Civil Works

1.1 Intake

1.1.1 Gandharbpur portion 0.0 754,216.8 754,216.8 0.0 9,427.7 9,427.7 0% 2%

1.1.2 Saidabad portion 0.0 323,235.8 323,235.8 0.0 4,040.4 4,040.4 0% 1%

1.1.3 River study, model and bank training 0.0 133,080.0 133,080.0 0.0 1,663.5 1,663.5 0% 0%

1.2 Gandhrabpur WTP

1.2.1 WTP 0.0 3,245,472.1 3,245,472.1 0.0 40,568.4 40,568.4 0% 9%

1.3 Pipelines (incl. clean-outs and crossings)

1.3.1 Intake to Juice Factory 2,365,630.6 1,404,610.4 3,770,241.0 29,570.4 17,557.6 47,128.0 63% 10%

1.3.2 Juice Factory to WTP 708,173.4 548,815.3 1,256,988.7 8,852.2 6,860.2 15,712.4 56% 3%

1.3.3 WTP to Injection point + 21 km of Distribution Reinforcement

4,715,321.7 2,020,854.1 6,736,175.9 58,941.5 25,260.7 84,202.2 70% 18%

2 Mechanical and Equipment

2.1 Intake

2.1.1 Gandharbpur Mechanical 576,408.0 0.0 576,408.0 7,205.1 0.0 7,205.1 100% 2%

2.1.2 Gandharbpur Electrical 131,481.7 0.0 131,481.7 1,643.5 0.0 1,643.5 100% 0%

2.1.3 Gandharbpur M&E Install 0.0 65,860.5 65,860.5 0.0 823.3 823.3 0% 0%

2.2 Gandhrabpur WTP

2.2.1 Mechanical 3,538,812.0 0.0 3,538,812.0 44,235.2 0.0 44,235.2 100% 9%

2.2.2 Electrical 166,493.8 0.0 166,493.8 2,081.2 0.0 2,081.2 100% 0%

2.2.3 M&E installation 0.0 372,517.8 372,517.8 0.0 4,656.5 4,656.5 0% 1%

3 Environmental Mitigation

3.1 Environmental cost 0.0 25,891.0 25,891.0 0.0 323.6 323.6 0% 0%

4 Other costs

4.1 Land acquisition and Resettlement 0.0 6,060,746.3 6,060,746.3 0.0 75,759.3 75,759.3 0% 16%

4.2 Power supply (G) 123,500.0 0.0 123,500.0 1,543.8 0.0 1,543.8 100% 0%

4.3 Construction Supervision 1,053,549.2 0.0 1,053,549.2 13,169.4 0.0 13,169.4 100% 3%

4.4 Total Design 1,158,904.1 0.0 1,158,904.1 14,486.3 0.0 14,486.3 100% 3%

5 Duty & taxes 0.0 7,627,475.1 7,627,475.1 0.0 95,343.4 95,343.4 0% 20%

Subtotal (A) 14,538,274.6 22,582,775.2 37,121,049.8 181,728.4 282,284.7 464,013.1 39% 99%

B. Recurrent Costs

1 Salaries 0.0 101,136.2 101,136.2 0.0 1,264.2 1,264.2 0% 0%



12



2 Equipment Operations and Maintenance 0.0 6,100.0 6,100.0 0.0 76.3 76.3 0% 0%

3 PMU Investment Cost 0.0 80,636.0 80,636.0 0.0 1,008.0 1,008.0 0% 0%

Subtotal (B) 0.0 187,872.2 187,872.2 0.0 2,348.4 2,348.4 0% 1%

Total Base Costs 14,538,274.6 22,770,647.4 37,308,922.0 181,728.4 284,633.1 466,361.5 39% 100%

C. Contingencies

1 Physical 3,334,483.2 0.0 3,334,483.2 41,681.0 0.0 41,681.0 100% 9%

2 Price 4,739,294.1 0.0 4,739,294.1 59,241.2 0.0 59,241.2 100% 13%

Subtotal (C) 8,073,777.4 0.0 8,073,777.4 100,922.2 0.0 100,922.2 100% 22%

D. Financial Charges During Implementation

1 Interest During Construction 1,598,533.4 0.0 1,598,533.4 19,981.7 0.0 19,981.7 100% 4%

2 Commitment Charges 40,000.0 0.0 40,000.0 500.0 0.0 500.0 0%

3 Front-End Fees 0.0 0.0 0.0

Subtotal (D) 1,638,533.4 0.0 1,638,533.4 20,481.7 0.0 20,481.7 100% 4%

Total (A+B+C+D) 24,250,585.4 22,770,647.4 47,021,232.8 303,132.3 284,633.1 587,765.4 52% 126%



1

APPENDIX 7: BANGLADESH WATER QUALITY STANDARDS



2

DRINKING WATER STANDARDS

Abbreviations and Notes

TCU True Colour Unit (platinum cobalt scale) TON Threshhold Odour Number

NTU Nephelometric turbidity unit

FTU Formazin turbidity unit

JTU Jackson turbidity unit

MPN Most probable number

MF Microfiltration

[1] <1 NTU when disinfecting with chlorine

[2] Asthetic objective

[3] When fluoridation is practised

[4] Notify Medical Officer when [Na++

] > 20 mg/L

[5] Inferential standard: high enough to promote floc formation but not so high as to cause

gastrointestinal discomfort.

"good" 80 - 100 mg/L

"poor" > 200 mg/L

"unacceptable" > 500 mg/L ... Ontario Drinking Water Objectives 1994

[6] When determined bt the MF or MPN method

[7] Sufficient residual chlorine in finished water leaving WTP to obtain chlorine residual in distribution system

[8] Ontario 1994 Drinking Water Objectives lists MACs for 13 pesticides :

Aldrin + Deldrin 0.0007 mg/L

Carbaryl 0.09 mg/L

Chlordane 0.007 mg/L

DDT + metabolites 0.03 mg/L

Diazinon 0.02 mg/L

Heptachlor + Heptachlor Epoxide 0.003 mg/L

Lindane 0.004 mg/L

Methoxychlor 0.9 mg/L Parathion 0.05 mg/L

2,4-D 0.1 mg/L

2,4,5-T 0.28 mg/L

[9] Ontario 1994 Drinking Water Objectives considers water unsafe when "Total coliform bacteria

are detected in consecutive samples from the same site or in multiple samples taken as a

single submission from a distribution system.



1

APPENDIX 8: REVIEW NOTES ON MORPHOLOGY STUDY

The following are excerpts from the Feasibility Study Vol II: Morphological Assessment of Intake Sites that demonstrate the weak case made for the intake location. We are not suggesting that the intake will silt up in a couple of years or that the bank will shift drastically. What we are asserting is that the report is not convincing.

Only quotes pertaining to the Meghna are provided since Lakhya River should have been eliminated on the ground that its low flow is only marginally higher than the required design flow for Khilkhet and Saidabad WTPs and its deteriorating quality would make treatment costs prohibitive. The recently opened Saidabad 2 WTP contains a very expensive unit process to deal with the ever-increasing ammonia load in the raw water.

Emphasis added by PPTA team as are some comments in square brackets and italics.

Page II

1) The river reach at Binondi …is suggested to have bank erosion rates less than 1m/year…[the PPTA team obtained a couple of competing anecdotes that suggested far greater movement of the bank]

2) Since the cross sections are fixed in the simulation…the results do not represent the annual calibration/validation results…

3) Therefore the results cannot be assumed to be very accurate....results from the modeling are thus used in an indicative manner

4) It is recommended to extend the morphological assessments to the design phase of the project [We endorse this recommendation as it supports our assessment of the report]

Page 1

5) The data basis for …the Upper Meghna, is sparse.

Page 3

6) Feasibility study of 2006…recommended that a morphological model study be undertaken prior to selection of intake sites.

Page 9

7) The bank line has been eroding for quite a few years

Page 17

8) Generally there is [sic] very little data available on the …Meghna

Page 18

9) Some sediment data have been published

Page 19



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10) The large difference was qualitatively confirmed [We prefer quantitative confirmation]

Page 20

11) Given the [non] availability of data

Page 21

12) Since a long term stability of the rivers in Bangladesh cannot be guaranteed

Page 23

13) Plan form activity is limited

14) The study did not provide any new data on sediment transport

15) Detailed assessment of the plan form development was not made

16) Upper Meghna perceived as a less active river [than] Ganges and Jamuna

17) Saline water merely reached into the middle Meghna river

Page 25

18) Model results may be less accurate in some years than others…minimum water levels will not be accurate since these are tidally influenced [it is very important to determine the minimum water level as it affects the performance of the raw water pumps]

19) Maximum water levels with 50 year & 100 year return period

20) Data behind the analysis stem from a mathematical model which is only partly calibrated, thus the actual values may in reality vary [not a comforting statement]

Page 26

21) The discharge is roughly an order of magnitude

22) The failure of such banks is difficult to predict

Page 27

23) These figures will not be accurate

24) Observed plan form changes provide an idea of the order of magnitude of changes which can be expected throughout the life time of the project

Page 35

25) Wherefore no firm conclusion can be made on the erosion/accretion tendencies [but we need a firm conclusion before we spend $600 million on this project]

Page 36



3

26) No determination of the erosion/accretion rates can be made [that determination must be mad]

Page 41

27) General uncertainty in the measurements

28) Due to this a one-dimensional model can hardly be used to provide information on changes in plan form or lateral movement of rivers [but it was used anyway – Mike11 is 1-D]

Page 43

29) Theses simulations are not meant to provide exact results because the data basis is not sufficient for calibration of the sediment model…[it] is applied in a relative manner [relative to what? We need more or less exact results]

30) Results should be considered with great care

31) less pronounced – fairly stable - more morphological [sic] active

32) results are only indicative

Page 44

33) The [“regime relations”] method implies uniform condition in the river [unlikely – inflow upstream and outflow downstream]

34) Subject to debate in the literature

35) One should be very careful by using the regime equations on river system other than those from which the data have been derived. This clearly limits the applicability of the equations. Despite the great uncertainty , the present study has attempted to use the regime equations for prediction of the stable width of the Meghna [We assume that a panel of experts would cringe at such remarks]

Page 45

36) It is not possible to apply the regime equations developed for the Jamuna in the Meghna [there are probably more equations that are not applicable – we are interested in applicable ones]

37) A practical alternative [refers to a method subject to debate, etc.]

Page 46

38) Because many of the uncertainties involved

39) The present analysis of the stable river width cannot stand alone

Page 47

40) Images taken during the dry season so that the observed width is expected to be somewhat lower



4

41) General uncertainty in the data, the uncertain [sic] in the prediction and considering possible dredging activities in the river, such conclusion cannot be made

Page 48

42) There has been much debate on both the validity and the usability of those findings

43) The present day study has attempted….

Page 49

44) The Meghna River appears partly in the meandering zone, partly in the braided zone

Page 50

45) Have attempted to evaluate…

46) Bisnondi appears to be the most attractive location for a water intake [as compared with one other location, which is unsuitable]

Page 51

47) It is highly recommended to deploy two dimensional mathematical modeling for the design phase of the project. This will require a certain amount of bathymetry data [We endorses this recommendation and wonders why 2-D wasn’t employed to start with instead of 1-D]

Panel of Experts

48) We propose an expert to head the panel of experts to review the study

Daniel Gunaratnam [B.E. (Civil) (Hons) 1962, M.E. 1966] studied Civil Engineering at the University of Adelaide under the Colombo Plan, achieving a B.E. with First Class Honours and subsequently an M.E. (Hydrology). Daniel returned to Malaysia for several years and achieved a Doctor of Science in Engineering (ScD) from Massachusetts Institute of Technology in 1970. He held several positions during his career, including lecturing at the University of Singapore, working as an independent Water Resources/Environmental Consultant in Malaysia, and as Senior Irrigation Engineer in the Asian Development Bank. In 1981, the World Bank invited Daniel to work with them as the Principal Water Resources/Environmental Engineer where he worked for almost 20 years before his retirement in 2001. He now works as a consultant to ADB, World Bank, and large private sector firms



1

APPENDIX 9: ANNEXES 1-4 IN WASTE WATER SECTION III.A.2

Annex 1: Identified Priority Projects from the Sewerage Master Plan

(March 2012) Phase 1 Priority Works The Priority Investment Programme (nominally 2010-2015) focuses on the Pagla catchment and Dasherkandi catchment and includes the following priority projects. List of Phase 1 Priority Projects

- Rehabilitation and augmentation of the capacity of the existing treatment process at Pagla Sewage Treatment Plant (current capacity, QA = 96,000m3/day to be increased to 200,000 m3/d)

- Construction of new sewerage system in Gulshan/Banani - New pump station construction in Gulshan - New pump station construction in Tejgaon - New pump station construction in Khilgaon - New pump station construction in Bashaboo - New pump station construction in Golapbagh - Replace eastern sewer (Madubah to Pagla) - Construction of new transmission mains to STP Dasjherkandi - Construction of new STP in Dasjherkandi (500,000 m3/d).

For a map with the locations of these projects is referred to the SMP: Figure 7.1: Phase 1 Priority Works (2010-2015). All these Phase 1 projects are currently under implementation, financed by the World Bank/IDA and GOVERNMENT. Phase 2 priority projects are not under any funding yet and may be of more interest for PPTA support. This concerns the following projects.

List of Phase 2 Priority Projects The Phase 2 Investment Programme (nominally 2015-2025) focuses on the Pagla and Dasherkandi catchments and includes:

i) the second phase of Pagla STP trickling filter system (and existing facultative ponds which has a combined capacity of 250,000 m3/d);

ii) rehabilitate the trunk sewer to Tejgaon pump station and associated sewage collection system;

iii) construct new collection system and trunk mains servicing the Baridhara, Baridhara DOHS, West Badda and Niketan areas;

iv) a subsequent third phase of the Pagla STP (decommissioning the facultative ponds hence providing a treatment capacity of 300,000 m3/d) will then be commissioned;

v) a programme of rehabilitation and replacement of the remaining existing sewerage systems in Pagla catchment will be undertaken;

vi) extensions to new sewerage systems to be constructed within the Pagla catchment;

vii) refurbish Narinda old pump station in order to increase capacity. The second component of the Phase 2 investments will include:

viii) A parallel trunk sewer shall be constructed from Golapbagh (near Swamibagh) to Pagla STP;

ix) The investment programme will also construct the sewerage system, transmission mains and wastewater treatment plants for each of the remaining urban centres,



2

incl. Rayerbazar, Mirpur, Uttara and Narayanganj, in the current DWASA service area.

For a map with the locations of these projects is referred to Figure 7.2: Phase 2 Priority Works (2015-2025) of the SMP. Other Priority works Further there is a recommendation in the Masterplan for a septic tank sludge proposal (not included in the maps and time tables of the Masterplan). Currently there are no formalized systems for collecting, transport, treatment and disposal of septic tank sludge, however in future it is proposed that there will be a number of treatment plants located throughout the city to meet the demands for wastewater treatment. As such, it will then be advantageous to collect and transport the septic tank sludge to more than one wastewater plant, for instance on a geographical basis. In order to learn lessons concerning implementation of a septic sludge management system, the following is a proposal for priority consideration. Master Plan Recommendation - Pilot Scale Testing Septic Tank Sludge Treatment: In order to provide septic tank sludge reception, treatment and disposal, it is proposed to construct septic tank sludge treatment systems at the centralized wastewater treatment plants, which include a reception facility with screening facility, anaerobic sludge treatment in ponds, drying and disposal. As an urgent priority, it is recommended to pilot scale this type of system at the Pagla Sewage Treatment Plant in order to gain experience in their construction and operation for future projects. Initially, such pilot scale testing might include DWASA developing and implementing a Service Contract with a septic tank service provider for a specified region adjacent to Pagla STP, however this should be broadened to allow private contractors to approach households directly throughout the city, once septic tank sludge facilities are constructed at the various treatment plant sites. Consequently it will be essential for the pilot scale test to determine the market interest and associated costs for private sector participation. Concerning the septic tank sludge treatment facilities, in the case of Pagla, there are two options:

1) introduction into the existing sludge lagoons; 2) introduction into the treatment plant via a dedicated process such as Anaerobic

Primary Settlement Ponds (APSPs). Option 2) is more advantageous, but would require an upgrading of Pagla in order to be effective. As priority works, it is recommended to incorporate a septic tank sludge receiving facility and treatment system in the APSPs at Pagla STP to test this process.



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Appendix 1 - Review of the Dhaka Sewerage Master Plan (March 2012)

Chapter wise findings and comments are summarized as follows:

Chapter 1: Updating/Preparation of Sewerage Master Plan of Dhaka City: 1. The design horizon is considered to be 2035. In line with the DWASA 50 years water

Supply Master Plan, the study needs to be extended /updated upto 2050. The service area need to be identified. DWASA service area extends over an area of approx 401 km2 (25%) of the Greater Dhaka (about 1425km2) administered by the Rajdhani Unnayan kartipakkha (RAJUK) and also known as the Dhaka Metropolitan Development Plan (DMDP) area. As per TOR, The Master plan for water supply is to have a planning horizon of 50 years, and the immediate project proposals are to have a planning horizon of 10 years and so on. This study/analysis also would take into account of Dhaka WASA’s sewerage operation (existing and planned) as well as Dhaka WASA’s obligations for the Dhaka drainage system, on-going and planned drainage investment.

Chapter 2.2:

2. A number of initiatives have surveyed the water pollution---. Annex 2 presents a summary of the key initiatives. The report does not have any such Annex 2, but tables 2.1 & 2.2 summarize the local financed and on-going implementation programme. This needs to be clarified.

Chapter 3.2:

3. It is estimated that only approx 20% of the population is potentially served by----. It is also reported in the report that Mirpur Small Bore Sewer System under the DUIIP was constructed but not effectively commissioned. A similar statement in Appendix 10 (page 8) notes that the system was unsuccessful because the institution was not ready to operate and maintain it. If that be the reason- it needs to be established as of now if DWASA is prepared and has the capacity to understand the Master Plan and implement proposed projects.

Chapter 3.8:

4. Based on the industrial wastewater pollution on sewerage master planning, it is assumed that (page 29) ----. The study should have recommended stringent measures to stop such discharges to sewerage system.

Chapter 4.8 notes (page 52) “Due to the range of sanitation systems ---.

5. Surprisingly the study does not provide any recommendation for pilot scale testing of sanitation interventions.

Chapter 4.10:

6. Similar to on-going implementation for water supply system/rehabilitation - large diameter tunnelling in particular trenchless technology could be proposed as of now. It is not apprehended why the study considers/opted for this system after the Design Horizon of 2035.

Chapter 4.11:

7. Our findings and recommendation is to initiate anaerobic digestion in order to exploit the energy value of the methane gas by product.

Chapter 5:



4

8. The chapter describes the proposed 11 sanitation catchments up to the year 2035. This needs to be updated for the year 2050 as per 50 years Water Supply Master Plan.

Chapter 5.3

9. provides minimum design criteria (page 63) GRP, HDPE, uPVC as pipe materials for Gravity sewers. We would also recommend Reinforced cement pipes and that the distance between two manholes are to be varied subject to pipe diameters.

Chapter 5.6.5:

10. The section provides proposal for septic tanks sludge management. It is highly recommended that DWASA immediately creates a Sludge Management Division. All households with septic tanks should be required to pay septic tank fee in order to recover the costs for septic tank sludge management. Since the sludge cleaning is subject to number of users and periodical- the proposed fee of BDT 4000/year/household does not seem to be appropriate. The recommended public awareness drive is highly appreciated.

It is also noted that due to investment costs required, it is not considered feasible (page 71)----. The Master plan does not provide any solution or alternatives to this. We just cannot conclude that septic tank management will be phased out over time.

Chapter 6.4 Prioritisation: 11. The chapter describes priority projects considering technical suitability and economic

suitability. It does not recommend rehabilitation/restoration of sewer lines by utilising the sewer pipes stored in the compound of Pagla waste water treatment plant. DWASA should immediately make use of these large / huge quantity of sewer pipes of various dia stored in the compound. It needs to be investigated as to the basis of procurement of such pipes and not utilising these. Since the pipes are available, DWASA should be able to take up implementation of new/rehabilitation/restoration of sewer lines incurring only laying and related costs. One such ongoing project is being implemented by DWASA- there is no consultant to supervise this GOVERNMENT funded project.

Chapter 7.4

12. summarizes implementation programme for the phased works taking into consideration the prioritisation of works, realistic opportunities for accessing capital funds, capacity of DWASA to absorb the funds and construction programme constraints.

The study does not throw any light on the capacity of DWASA nor does it specify any such construction programme constraints.

Chapter 8.2 page 89

13. notes that DWASA has sufficient capability to operate & maintain the new sewerage and wastewater treatment works. Surprisingly, the second line says “A capacity building programme is required to strengthen the DWASA capability” – the two statements are in contradiction. For the third phase Investment Programme (2025-2035), the study assumes 65% of population connected in sewerage network. Our recommended for such future projection would be 80%.

Chapter 9.1.2 summarizes existing resources. It may be pointed out that although all the Zones do not have hydraulic jet rodding vehicle –it requires minimum cooperation and coordination between the MODS/ZONES to share the equipment. It is not clear if budget has been considered for procurement of such equipment for other MODS.



5

Chapter 9.3 14. describes O & M programme for maintenance of sewers, pump stations and

treatment plants including proposals for improved operations and maintenance. However, it does not mention any cost involvement for such activities.

Chapter 10.2

15. rightly describes the key institutional weaknesses associated with DWASA followed by recommendations to improve the weaknesses including series of training programmes. However, it does not mention any cost involvement for such activities. We would like to propose international training programmes on design, management, operation & maintenance of sewerage treatment plant. Such a programme for five staffs for one month in any South Asian country would cost about US150, 000. This can be included in any of the priority listed project-subject to discussion with DWASA Authority.

Chapter 10.3

16. summarizes a series of services provided by DWASA – level of services not defined and recommends certain steps to improve and develop level of services similar to being practiced in India and also managed by ADB. However, it does not specify the methods and procedures for adopting such level of services, neither any cost that may be incurred to improve the level of services.

Appendix 2: Summary of Industrial waste water pollution and impacts on receiving waters

17. It provides sampling of water at different locations for surface water and also ground water. Only the test results of some parameters are provided-but no impact on receiving waters was studied. This needs to be clarified.

Appendix 4:

18. As described in chapter 4, Appendix provides details of various treatment processes in general. These are all about biological processes - it does not mention any physical and chemical methods/processes which are equally important and required for the complete treatment. The study does specify any recommended process to be considered for treating municipal waste by DWASA which would be a guideline for future projects to start with. Item 4.2 (page 4) of this appendix provides sludge accumulation rate of 30 Lpc/year for Southern Europe to 70 Lpc/year in the north. It does not provide any such data for Bangladesh or countries of similar climate conditions. Page 8 of this appendix describes Compact aerobic domestic sewage treatment modules. DWASA should take the initiative to introduce such type of compact modules in the suburban area where the public sewerage system is not planned and also for housing complexes.

Appendix 6

19. provides cost estimates for waste water treatment plants comprising capital cost, O&M cost and land cost. Items 6.2 to 6.4 provide summary of such costs for number of catchments based on preliminary design. But it does not specify type (material) of pipe considered, nor does it provide any information on pump capacities (discharge etc). Since there is no detail information on the preliminary design, we have no idea to ascertain the basic concepts of such preliminary design (pipe dia, material, pump characteristics etc).

Appendix 10

20. deals with the legislation and institutional analysis. Section 10.4.1, subclause (3) (page 6) states “The issue of demand has --- new ideas in water supply and



6

sanitation --- for capacity building.” The study should have provided few examples of such new ideas to educate DWASA for capacity building.

The following page notes

21. “The Master Plan supports --- further studies will be needed to formulate a reasonable and acceptable strategy and approach.” This needs to be further elaborated to prepare such studies on the part of DWASA.

Section 10.5.3 (page 14) notes –

22. For Master Plan implementation, a “Pilot project” approach is recommended. The concept of pilot project should be defined.



7

Annex 2: Actions for Sound Operation and Management (O&M) 2.1 Current Situation Operations and maintenance of the water supply and sanitation system within DWASA service area is undertaken by Maintenance, Operation, Distribution and Service offices (MODS), with the main store located adjacent to the Pagla Sewage Treatment Plant. The area currently provided with DWASA water supply services includes 11 MODS Zones, incl. Narayanganj. Dhaka-Narayanganj-Demra (DND) area is located within DWASA service area, but is outside of the MODS Zones, lying between MODS Zone 7 and Narayanganj. The DND is not currently served by DWASA water supply or sewerage services, but such services are foreseen to be expanded into this area within the planning horizon. The tools, machinery and equipment available to the sewerage O&M teams are significantly less that that available to the water infrastructure team although DWASA is striving to improve the performance level, taking some positive measures in sewerage systems operation and maintenance.

2.2 Current O&M Procedures for Conventional Sewerage System DWASA’s Zone Offices are responsible for the operation and maintenance of the sewerage system, in particular, MODS Zones 1-6 have components of the sewerage system (total of 882km) located within the MODS boundaries. O&M is undertaken mainly by sewer inspectors and sewer cleaners/helpers. If consumers complain to the complaint attendant of a Zone Office concerning any nuisance to the sewer line such as overflowing, sewage leakage, blockage, etc., a sewer inspector is dispatched to the problem site and, under such supervision, sewer cleaners and helpers remove any sediments/sludge using hand-tools such as bamboo sticks, shovels, buckets, hooks, ropes, etc. For maintenance of the main collectors (trunk sewers), an annual cleaning program is prepared and routine cleaning is also planned to be undertaken by the cleaning teams, however the cleaning program for the sewerage network is not fully implemented due to lack of finances and insufficient sewer cleaning vehicles.

2.3 Proposals for Improved Operations and Maintenance The following recommendations are proposed to improve the operations and maintenance of sewerage facilities within Dhaka: Organisation and budget of MODS Zone Offices • For efficient operations and maintenance activities, the organisation of the MODS offices

should have their water supply and sewerage services separated, with corresponding budgets.

Sewerage System • An electronic data base should be established for each sewerage system, incl.: i)

information on consumers; ii) detailed information on sewerage system, pump stations and treatment plants; iii) O&M programming; iv) sewer extension planning.

• DWASA to increase the manpower capacity for sewer cleaning. Manpower capacity should be increased to levels similar in regional cities of similar size to Dhaka.

• DWASA to increase staff capacity in maintenance programming via training. Sewer Cleaning Equipment • Priority requirement is the procurement of hydraulic jet rodding machines for MODS

zones 3-6 in order to clean the trunk sewers and manholes, and keep them maintained. • Additional priority is to increase the capacity of sewer cleaning equipment, esp. in MODS



8

zones 3-6. • Due to the specialist nature, CCTV services should be considered for outsourcing. Pump Stations • In order to minimise O&M demands, DWASA to consider reconstructing existing pump

stations to facilitate maintenance, e.g. by utilising submersible pump stations, and separating the function of screening wells and pump wells.

• DWASA to consider outsourcing operations and maintenance of pump stations. • In order to maximise efficiency of operations and maintenance in the future, DWASA

should consider installation of an automated system via telecommunication to a central SCADA system.

Septic Tank Sludge Management • Septic tank sludge management facilities to be constructed at sewage treatment plants.

DWASA to support private sector involvement in septic tank sludge collection and transport to the DWASA sludge treatment facilities.

• DWASA to pilot the septic tank sludge collection, transport and disposal system incl. facilitating private sector involvement.

Wastewater Treatment Plant Operations and Maintenance • The new treatment process proposed for Pagla STP and additional treatment plants

requires greater operations capability. DWASA to consider either employment of new staff and have them trained or sub-contract the operations and maintenance to private sector. It is recommended for DWASA to consider having the Contractor responsible for constructing the Pagla STP to provide early operations service (during the defects liability period) and allow technology transfer to DWASA operations staff.

• DWASA should consider whether maintenance workshop services should be outsourced31.

• DWASA to consider restricting non-authorised access to the treatment plant site. • Maintenance programmes to be developed for the treatment plants. • DWASA to consider facilitating the beneficial re-use of sewage sludge via private sector

development. • DWASA to consider incorporating anaerobic digestion gas collection and combustion in

the future, in order to produce power to operate the plant and hence reduce operating costs.

31 There is a range of options associated with private participation, including:

Option Asset Ownership O&M Capital Investment

Commercial Risk

Typical Duration

Service Contract Public Public and Private

Public Public 1-2 years

Management Contract Public Private Public Public 3-5 years Lease Public Private Public Shared 8-15 years Build-Operate-Transfer Private (bulk

services) Private Private Private 20-30 years

Concession Public Private Private Private 25-30 years Divestiture Private Private Private Private Indefinite



9

Annex 4 - Alternatives for Sludge Disposal Introduction

1. There are many emerging technologies on the market for the handling of sewage, sludge and septage. A common component of many of the alternative technologies involves either capturing the energy contained in the waste material or conserving energy during material processing. This coincides with our nation’s increased focus on energy production and conservation in light of higher fossil fuel prices and concern over climate change. A fairly strong consensus has emerged that increased energy independence is a desired goal. This can be accomplished through conservation and use of indigenous energy resources. Where practical, this approach should be applied when developing the future infrastructure and processes for sewage, septage and sludge disposal.

Treatment and Disposal Options Some alternative advanced technologies include: STP Sludge Incineration with Energy Recovery –

2. The sludge can be disposed off by incinerating it and using the heat generated for processing purposes at the facility. This is a possibility that can be considered for disposing of the generated sludge by drying it and then using it as a fuel for electricity generation.

Sludge drying options:

3. There is quite a big variety of technical solutions of dryers. The classification of dryers is based on the method of supplying heat to the sludge particle. According to that dryers can be divided into:

(i) convective dryers (represented by drum dryers) in which sludge has a direct contact with the drying factor (e.g. hot air);

(ii) contact (tray and layer) dryers in which sludge has contact only with a hot surface, that is heated from the other side by the heating factor;

(iii) mixed convective-contact dryers;



10

(iv) infrared dryers with the use of infrared radiation or high frequency currents.

4. Direct drying facilities (with a direct contact of sludge with heating factor) which are applicable to sludge drying are:

(i) pneumatic dryers (flash dryers); (ii) rotary or drum dryers; (iii) fluidized bed dryers.

5. There are also indirect sludge dryers which are applicable to sludge drying such as:

(i) paddle dryers; (ii) hollow flight dryers; (iii) disc dryers; (iv) multi-shelf dryers

Bioreactor Landfills –

6. In a bioreactor landfill, liquid or air is injected or re-circulated in a controlled fashion into the waste mass in order to accelerate decomposition of the waste. This can be done either aerobically (with oxygen) or anaerobically (without oxygen). Bioreactors operating under anaerobic conditions generate methane which can be captured and used to create electricity and/or to provide heat either on-site or elsewhere. Liquid sludge can be injected into the landfill waste to enhance microbiological processes and increase methane production.

Sludge Digester with Energy Recovery –

7. Anaerobic sludge digesters are tanks in which sludge is digested by bacteria in the absence of oxygen. They are installed at WWTPs to decrease the volume of sludge by up to 50% and to produce methane, which can be used as a heat source for internal processes and/or to generate electricity. They can provide significant sludge disposal and energy savings to WWTPs.

Septage Anaerobic Primary Settlement Ponds

8. Anaerobic bacteria occur in the intestinal tract of ruminants and do not need free



11

oxygen to survive. Conditions in an anaerobic pond allow such bacteria to continue decomposing the remaining organic compounds in the manure (polysaccharides, proteins and fats), producing methane and carbon dioxide. Anaerobic bacteria are present throughout most of the water column, but activity is concentrated in the layer immediately above the sludge.

Biological Treatment with Constructed Wetlands –

9. The biological processes that exist in wetlands can be used to treat septage. The plants along with the microbial and physical-chemical processes that exist in wetlands can effectively treat the nutrients and contaminants found in sludge.

Solids Removal and Composting –

10. Septage that has had the solids removed from it places significantly less of a load on any WWTP that accepts it for disposal. This allows a WWTP to accept much larger quantities of septage. However, this can be done with a public/private arrangement because of the high cost of disposing of the solids. The private operator could perhaps build a facility that would not only remove the solids, but also process them to make a compost/top soil product that would have greater value.

Other options:

11. Treatment at WWTP’s can take several different approaches. Septage can be added either to the liquid treatment system, the sludge handling train, or combinations of both. Some larger plants that treat larger volumes of septage allow the addition of septage in a relatively constant controlled rate at different locations around the plant. This provides protection from the potential short term overloading of downstream processes. Plants with primary clarifiers are best suited to receive septage in their liquid stream. Whereas, medium-



12

sized plants often add septage to the sludge treatment part of the plant.

Independent septage treatment plant is another option. Independent treatment plants can be mechanically complex and incorporate many unit processes to handle both the liquid and solid fractions of septage or comparatively simple.

12. Composting of septage is an option especially where bulking agents are plentiful and a demand for composted products exists. Dewatering of septage prior to composting is usually preferred. Septage is mixed with a bulking agent and then aerated mechanically by turning the septage while it is in a windrow. The dried material can then be used as a soil additive to replenish agricultural lands.

13. Anaerobic digestion is also an option for the treatment of septage and faucal sludges. Given the high organic strength frequently encountered in these materials anaerobic digestion - with or without prior solids removal in separate settling units - are a feasible option as primary units in pond treatment schemes in warm climate.



13



14

14. Another option is, BORDA’s (Bremen Overseas Research and Development Association) DEWATS (Decentralized Wastewater Treatment Solutions) STP

REFERENCES

1. http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&sqi=2&ve

d=0CDcQFjAA&url=http%3A%2F%2Fportal.ncdenr.org%2Fc%2Fdocument_library%2Fget_file

%3Fuuid%3D30647ea6-34d1-4371-84ca-

128ae3713788%26groupId%3D38364&ei=tzCfUNvyLcnwrQfL4IGgCw&usg=AFQjCNFTn5cOz4

lP9f1eAR2I0t4Fgsa6cA

2. http://civil.engr.siu.edu/311/ultdisp.htm

3. http://www.unep.or.jp/ietc/publications/freshwater/sb_summary/10.asp

4. http://www.esf.edu/pbe/scott/research/papers/023.pdf

5. http://www2.lwr.kth.se/forskningsprojekt/Polishproject/rep13/Flagasludgedrying73.pdf

6. http://www.dairyingfortomorrow.com/uploads/documents/file/effluent%20management%

20database/chapters/anaerobic%20aerobic%20and%20facultative%20ponds.pdf

http://www.borda-sea.org/fileadmin/borda-net/Service_Packages/02MSTP_web.pdf



1

APPENDIX 10: FINANCIAL MANAGEMENT ASSESSMENT

EXECUTIVE SUMMARY

1. One of the components of DWASA’s long term plans to increase the overall water supply

capacity and to reduce the amount of present groundwater abstraction is the establishment

of the 500 MLD Khilkhet Water Treatment Plant Project phase 1, with an estimated

investment costs of about USD 600 million.

2. Other components of the DWASA’s long term plan are (i) the recent construction of the

Saidabad WTP phase 2 (total costs about USD 110 million), (ii) the ongoing DWSSDP

network rehabilitation project (total costs about USD 200 million), and (iii) the future

construction of Pagla (/Jasaldia) WTP phase 1 & 2 as well as the Saidabad WTP phase 3,

totaling more than USD 1 billion. Not only will these projects strongly increase DWASA’s

future debt service loan costs, but also DWASA’s operating costs will significantly increase,

since the O&M costs of surface water treatment are considerable higher than water supplied

from ground water sources.

3. Given the expected significant increases in the capex and opex, it is highly relevant that a

regular financial management (FM) assessment of DWASA is conducted. To ensure

sustainable DWASA financial results, up to date and effective financial management by

DWASA is a critical success factor. If DWASA does not have the proper staff strength and

competences to effectively manage its financial resources, the benefits of the projects may

not be as sustainable as planned.

4. Our assessment is based on the results of a Financial Management Assessment

Questionnaire32 (FMAQ), discussions with senior officials of DWASA, and information made

available by the presently ongoing ADB funded FCB Project33. The FMA has considered two

types of risks; (i) inherent risks; i.e., risks outside the direct control of the DWASA FM , and

(ii) control risk; i.e., risks concerning the internal functioning and control of the DWASA

Finance and Accounting division. A summary of the main risks identified is given below.

Risk

Risk

Assess

ment*

Main Risk-Mitigation Measures

Inherent Risks

1. Country-Specific

Risks M

.Increasing instable political situation in future

2. Entity-Specific

Risks M-S

.Reforms are ongoing, but DWASA still can’t operate as

an (financial) autonomous entity.

.Tariff setting –a crucial issue for sustainable DWASA

32

The FMAQ with the DWASA responses is attached in Annex 1 33

DWASA/ADB Financial Capacity Building Project (FCBP), 2009-2013



2

operations- still needs political approval at several levels.

.DWASA recent proposal to increase fees, more than the

determined 5% per year, was rejected.

3. Project-Specific

Risks S

.Financial absorption capacity of DWASA for the higher

Khilket WTP I (production) costs and increased costs for

Saidabad WTP II, seems questionable if adjustments in

the tariffs keep being rejected.

.The competences of DWASA financial (/ICT) staff in

automatic accounting and reporting systems are limited.

.Same applies for related MIS & Control systems

Overall Inherent Risk M

The present political unrest and violence seems the

biggest risk to destabilise Bangladesh, and may hamper

DWASA’s development and financial situation

Control Risks

1. Implementing

Entity/ DWASA M

.DWASA is still mostly ‘traditionally’ organised, with little

internal coordination or joint approach, and also rather

centralised; no. of staff at HQ exceeds the total number

of staff/employees in all 12 zones together.

.The PPP cell in DWASA is still in its infancy and doesn’t

have experience with PPP type of projects like Khilkhet

WTP phase 1

2. Funds Flow L DWASA has handled in the past years several ADB and

other IFI loans, apparently without major problems

3. Staffing M

.The staffing of the DWASA FM division may be

considered as weak in terms of qualifications and

competences, and not really up to date with modern

automated accounting and /MIS systems.

.Also adequate FM infrastructure is lacking, i.e.

inadequate hardware (PC’s) and slow (2G) internet

connections, no central interactive database, using

mostly pirated software, no proper virus protection etc.

4. Accounting Policies

and Procedures L-N

.DWASA follows closely the Bangladesh / International

accounting requirements, including involving a qualified

professional external Auditor’s company



3

5. Internal audit M

.An internal auditing unit exists, but mainly addresses

queries from GOB, and other external stakeholders on

DWASA’s annual report.

6. External Audit L

External audits are conducted by a qualified Auditors

company, who give clear summary of deficiencies in

DWASA’s FM accounts and reporting is given.

7. Reporting &

Monitoring M

.Reporting of the monthly performances is too slow and

mostly 4-5 months after the respective month.

.No electronic data exchange linkage of financial/

accounting systems between the zones and HQ

8. Information

Systems M/S

.DWASA ICT unit consists only of 2 staff, which has to

collect and process all required MIS information. No

assessment or analyses of the data is being conducted.

Overall Control Risk M

The various FM risks are recognised by DWASA and

programs are ongoing to mitigate, or to improve that.

Continued, effective attention and involvement by

DWASA top management should be given.

H=High, S=Substantial, M=Moderate, N=Negligible or Low

5. Clearly the biggest inherent risk that DWASA will be facing in the coming years is the

increasing unstable political future situation, which may result in seriously hampering

economic development and possibly reduced investments in water supply and sanitation

(WSS) infrastructure projects. This risk may affect the ongoing organizational reforms, given

that DWASA may still not operate as a financially autonomous entity, that top management

is still via political appointment, and last but not least, that tariff setting is still dependent on

political approvals.

6. The results of the FM assessment of the internal (control) risks indicate that the existing

financial management capabilities and performances of DWASA Finance and Accounting

division may be considered acceptable; however, with several medium to significant risks

involved. These risks are acknowledged by the DWASA management and programs are

ongoing and further developed to mitigate these risks.

7. The double entry accounting system has been implemented some years ago and is

currently operated without major problems. The formerly manual accounting system has

been automated however, the accounting software is considered of too low level, using

simple standard accounting software packages that cannot be interlinked to other systems.

8. Improvement of the accounting software has been started under the FCBP project but is

not yet completed. An important bottleneck is that the existing hardware is outdated and

insufficient to fulfil the requirements of the proposed new, custom-designed and interlinked

DWASA accounting software system.



4

9. In addition to the lack of proper IT infrastructures, the DWASA Finance and Accounting

staff does not presently have the required background and experience to operate the new

accounting software systems. This may be considered at least as a medium risk, since this

lack of adequate competences is a dominant and crucial issue. Without the FM division staff

having the proper background, manpower strength, or competences, all targeted measures

for FM system improvement and/or procedures will not show significant results or impacts.

10. We recommend that DWASA top management give more focussed attention to initiate

and monitor the necessary improvement of FM staff competences and IT infrastructure.


(i) . Internal auditing unit. An internal auditing unit does exist, but is mainly

addressing queries from the Government and other stakeholders, concerning

DWASA’s annual report. It does not sufficiently address the internal auditing

issues for which it was established.

(ii) . Monthly performance reporting. The submission of the monthly

performance reports is mostly late; i.e., about 4-5 months after the respective

month, while 3 weeks is the target. As a result, the reported monthly performance

data are not very useful for possiblly required DWASA top management actions.

(iii) . Management information system (MIS). MIS development and

implementation and further development seems to have high interest of senior

DWASA management, insufficient budgets are presently being made available.

The DWASA ICT/MIS unit consists of only two staff, who have to collect and

process all required MIS information. As noted, there is a lack of proper ICT

hardware and software infrastructure, with inadequate hardware and slow (2G)

internet connections, using mostly pirated software and no virus protection. The

result is that no actual assessment or analyses of the collected data is being

conducted.

(iv) . The DWASA PPP cell is still in its infancy and does not have real experience

with PPP type of projects such as Khilkhet WTP phase 1 may include. A specific

training program is required, particularly if a Khilkhet PPP set up will be

implemented.

12. In summary, we conclude that we did not identify any significant FM risks. Nevertheless,

given the on-going and planned major investments and expected strong increases of the

DWASA annual operating and loan/DSL costs in the coming years, DWASA’s top

management should give more and serious attention to the identified FM risks, and make the

necessary budgets available to mitigate these risks, in order to be able to effectively direct

and guide the DWASA middle management and staff through the difficult operational and

financial tasks which are expected to be encountered by the DWASA organization in the

coming 5 to10 years

INTRODUCTION & BACKGROUND

The government, through Dhaka Water Supply and Sewerage Authority (DWASA) acting as

the executing agency (EA), assisted by the Asian Development Bank (ADB) and other

development banks and bilateral agencies, is executing an on-going ambitious expansion

and rehabilitation program for the Dhaka’s water and sewerage systems (WSSDP program).



5

The funding for this water sector program will come from different sources lead by the Asian

Development Bank and includes other IFI co financiers and possibly the private sector.

One of the components of DWASA’s plan to increase the overall water supply capacity and

to reduce the amount of groundwater abstraction is the 500 MLD Khilkhet Water Treatment

Plant phase 1 Project, with an estimated investment cost of about USD 600 million.

Other components of the DWASA long term plan are (i) the recently completed Saidabad

WTP phase 2 (total costs about USD 110 million), (ii) the ongoing DWSSDP network

rehabilitation project (total costs about USD 200 million), and (iii) the future construction of

Pagla (/Jasaldia) WTP phase 1 & 2 as well as the Saidabad WTP phase 3, totaling more

than USD1 billion. Not only will these projects strongly increase the DWASA debt service

loan costs in the near future, but DWASA’s operating costs will also significantly increase,

since the O&M costs of surface water treatment are considerable higher than water supplied

from ground water sources.

To ensure sustainable results of the above projects, adequate and effective financial

management (FM) by DWASA is a critical success factor. If DWASA does not have the

proper capacity to effectively manage its financial resources, the benefits of the projects may

not be as sustainable as planned. Therefore a financial management assessment of the

DWASA Finance and Accounting division is part of the PPTA for the Khilkhet WTP phase 1

project.

The Financial Management Assessment34 (FMA) includes a review of the DWASA systems

for financial management, accounting, reporting, auditing, and internal controls.

The FMA is to be considered as a review only, to determine whether DWASA’s financial

management arrangements are considered adequate for (i) recording all transactions and

balances, (ii) supporting the preparation of regular and reliable financial statements, (iii)

safeguarding DWASA’s assets, and (iv) professional audits.

A key aspect of the FMA is evaluating the risks associated with project financial

management arrangements. ADB’s principal concern is to ensure that project funds are used

economically and efficiently for the purpose intended. In support of this, it seeks assurance

that the DWASA financial management system can report on the source and use of the

project funds.

Currently, since 2009, within the WSSDP program, a separate extensive financial capacity

building (FCB) consultancy service is ongoing (FCB Project), addressing capacity building

and improving accounting and performance monitoring systems. This program has

addressed several key reform and organizational issues impacting DWASA operation. To

enhance the capacity of DWASA in managing water supply services, DWASA prepared

together with the FCB project a 5-year business and capacity building plan for the period

2010-2015. This plan provides systematic strategies for human resource development and

34 The DWASA FMA has been conducted according the ADB guidelines Financial Management and Analysis of Projects

(2005), including ADB’s Financial Management Assessment Questionnaire (FMAQ)



6

proposes comprehensive trainings in relevant financial areas in order to strengthen

DWASA’s financial management and staff skills.

Our assessment of the financial management capacity of DWASA is based on a completed

questionnaire (FMAQ), discussions with the senior officials of DWASA, and information

made available by the FCB Project. Face-to-face interviews were conducted in December

2012 with the DWASA Deputy Managing Director of Finance, the Commercial Manager, The

Chief Revenue Officer, the Chief Accounts Officer, and the Deputy Chief Planning Officer in

order to complete the questionnaire.



7

1.0 PROJECT DESCRIPTION

KHILKHET WATER TREATMENT PLANT + RELATED INFRASTRUCTURE

The aim of the Khilkhet Water Treatment Plant (WTP) Project phase 1 (project) is to provide

more reliable and sustainable water supply in Dhaka by developing a new surface water

source and water treatment plant to increase the water supply capacity. The project also

includes enhancing the capacity development of the Dhaka Water Supply and Sewerage

Authority (DWASA) and the sector policy reform, building on the achievements under the

ongoing ADB- financed sector development program.

The largest component of the project is the construction of 90 km large diameter raw-treated

water transmission pipe lines connecting a 2000 MLD raw water intake and pump station on

the Meghna River with the WTP, as well as treated water transmission lines connecting with

the distribution system, mostly benefitting Uttara, Gulshan/Banani, North Badda, and Mirpur

districts.

Six types of project services are provided by the consultants:

(i) Technical Scope

- Review existing studies, including the feasibility report

- Undertake a water balance analysis relevant to the project

- Identify gaps to fulfil ADB requirements and undertake additional surveys/studies to fill gap

- Firm up the detailed scope of the project and implementation schedule

(ii) Cost estimates and economic and financial analysis

- Detailed cost estimates, by investment phases

- Economic and financial analysis, and preparation of a financing plan

(iii) Institutional Arrangements, amongst other:

- Proposals for appropriate modality for investment and operation and maintenance

(O&M) with due consideration to public-private partnership (PPP)

-

(iv) Safeguards; concerning the various environmental and social impacts

(v) Gender and Poverty issues (Gender Action Plan, incl. Gender Mainstreaming)

(vi) Financial Arrangements

- FMA of DWASA and financial projections for the next 20 years of DWASA.

- Proposals for appropriate financial arrangements for the project involving PPP, design of

the fund flow and disbursement mechanisms.

(vii) Public-Private Partnership

- Provide an overview of similar projects realized under PPP-schemes

- Review regulations, policies, and guidelines in Bangladesh relevant to PPP.

- Prepare a financially and commercially viable and implementable PPP scheme

- Requirements for successful delivery of PPP and possible government and ADB support

strategies for making the project/ project components bankable to the investors and lenders



8

The total costs for all main transmission pipelines including materials, installation, design,

construction supervision, and contingencies are estimated at about $389 million. The overall

estimated costs for the Khilkhet Water Treatment Plant Project are about $595 million, as

summarized below.

Table 1 Estimated Khilkhet phase 1 Investment costs

The Water Intake + Water Treatment Plant components of the Khilkhet Phase 1 project are considered for joint funding (and operating) through a PPP arrangement. The costs estimates for both components are given in below:

2. COUNTRY ISSUES

The country-level issues are based on current analytical work, amongst other the Diagnostic

Studies of Accounting and Auditing (DSAA), the World Bank Country Financial

Accountability Assessments (CFAA), Reports on the Observance of Standards and Codes

(ROSC) or any other country analytic work. Most of these issues are common to all ADB

assessments for Bangladesh.

3. EXECUTING AGENCY – DWASA

The DWASA was established in 1963 as an independent organization under the East

Pakistan Ordinance XIX of 1963. In 1989, the drainage system of Dhaka city was handed

over to DWASA. In the year 1990, water and sanitation and drainage service of Narayangonj

City was added to the operational responsibility of DWASA. Since then, DWASA has been

expanding its service domain and upgrading level of services to keep pace with the growing

demand. Now the Dhaka WASA is functioning under the newly approved “Table of

Organization & Equipment” run by the Dhaka WASA Board, which consists of 13 members

who formulate policy and provide overall guidelines. The Managing Director is the chief

executive of the DWASA. The DWASA organizational set up is as given below:

The DWASA board is comprised of a mix of different professional organizations and

government officials. Amongst the top management, the MD and DMDs are recruited from

outside on commercial terms and conditions while the rest of the employees are sourced

internally.

Component Costs

($ million)

Share of

Total (%)

Water Intake 25.3 4.3

Transmission Lines 389.1 65.4

Water Treatment Plant 93.6 17.3

Infrastructures-various 86.7 16.3

Total 594.7 100.0



9

The salaries and the benefits of the staff at other levels are fixed as per the standard public

service salary benefit structure with no incentive packages for better performance.

In the past 5 years the total number of employees has decreased from 3735 to 3294, a

decrease of about 15%. About 87% of the employees are 3rd and 4th class employees, and

13% 1st and 2nd class employees.

Figure 1 DWASA Organization Structure

DWASA is considered a service oriented commercial organization in the public sector,

entrusted with the responsibility of providing water supply, sewage disposal and storm water

drainage services, and environmental health management. Its jurisdiction covers Dhaka and

Narayangonj, encompassing more than a 360 km2 service area.

The main functions of DWASA are:

(i) to provide WSS services in accordance with the quality and service

standards set by LGD/Water Supply Regulatory Commission and monitored by

the city corporations;

(ii) to ensure customer care and services to the disadvantageous communities;

(iii) to operate the water supply section (and conservancy section) following

sound technical and commercial practices; and

(iv) to partner with the private sector and NGOs in some service delivery.

The service area of DWASA is divided into 11 Maintenance, Operations and Distribution

Services (MODS) and Revenue zones. Several reform agendas have been initiated by the

government through the DWSSDP relating to its governance and operational matters most

significant of which are:

(i) As per the DWASA Act, 1996 coupled with the Financial Regulations DWASA

has the power to exercise financial autonomy to manage its affairs

(ii) As per DWASA Act 1996 together with the Service regulations 2009 DWASA

has autonomy in matters of personnel management



10

(iii) DWASA can borrow money form commercial bank or any other financial

institutions to perform its responsibilities. The terms and condition of borrowing will

be fixed by the Government if the borrowings are taken form the government or it

grantees.

(iv) Under section 4 of the WASA Act 1996 the Share Capital of DWASA will be

fixed up by the Government and all share capital will be assumed by the

Government. The capital may be increased by the government time to time for its

necessity.

(v) DWASA Board35 approves investments funded from its own sources. For

investments by the Government the Executive Committee of National Economic

Council (ECNEC) approves large investments. The Prime Minister is the Chairperson

of the committee and the Finance minister is the Alternative Chairperson of the

same.

DWASA opened a Training Center in 1980, which presently comprises of 2 branches; one

being engineering and the other, administration and finance. These branches provide

training to DWASA employees in their respective fields. In FY2010-11, about 410 training

sessions were organized for DWASA personnel. Also, training was provided by local training

institutions (e.g., Bangladesh Public Administration Training centre, Planning and

Development Academy, Bangladesh Computer Council, Institute of Diploma Engineers,

Institute of Personnel management, BUET)

Additional information on DWASA’s organization can be found in Section F, the project’s

Institutional Assessment report

DWASA has implemented the following donor funded projects

Table 4: Donor funded projects

Agency Project Cost

($million)

IDA

1st Dhaka Water Supply project(1979 13.0

2nd Dhaka Water Supply Project(1979-84) 20.5

3rd Dhaka Water Supply Project(1986-1994) 30.0

4th Dhaka Water Supply Project(1996-2004) 80.3

ADB

Dhaka Urban Infrastructure Improvement Project (1998-2002)-

USD 24.2 mill $ 24.2

Dhaka Integrated Flood Protection Project (1991) 91.5

Dhaka water Supply Sector Development Program (2008-20013) 212

SIDA Generator Loan(1999) 2.03

35

Under section 34 of the WASA Act 1996



11

DANIDA DWASA Phase 2 WTP(2008-2012) - BDT 777 crore €85 million

4. RISK ANALYSIS

The FMA risk analysis concerns 2 types of risks:

Inherent Risk: Susceptibility of the IA/project Financial Management system to factors

arising from the outside environment in which it operates, such as country rules and

regulations and organization’s working environment.

Control Risk: Risk that the DWASA/project’s accounting and internal control framework is

inadequate to ensure that project funds are used economically and efficiently and for the

purpose intended, and that the use of funds is properly reported.

In this respect the following aspects that were considered in the FMA are relevant:

Control Environment: concerns the assessment of the project management’s attitude,

awareness and actions regarding internal controls and their importance to the entity. It

includes the budgeting, costing, management reporting, and auditing systems. The executed

FMAQ provided a basis for understanding of these systems.

Assessment of the Risks

After understanding the financial management system and internal control framework, an

assessment of control risks has been made and is recorded in the FMAQ36. The assessment

of control risk is the evaluation of the effectiveness of the project’s/DWASA’s financial

management system and internal control framework.

In the overall risk assessment, the following types of risk have been assessed:

Inherent-Specific Risks

(i) Weaknesses in the budgetary process (i.e. transparency, budget preparation-

monitoring process, sanctity of budget approvals, medium/ short-term expenditure

framework);

(ii) Weaknesses public accounting and reporting (standards, timeliness, capacity of

the IA accounting professionals);

(iii) Weaknesses in the auditing procedures (standards, capacity, independence,

timeliness);

(iv) Weaknesses in the funds flow mechanism (bureaucratic delays, cumbersome

procedures, weak banking system);

(v) Salary structure within the public sector compared with the private sector;

(vi) Degree of management independence from the politics; and

(vii) Status of the country accounting profession.

Project-Specific Risks

36

see attached FMQA



12

Concern the following inherent risk factors:

(i) Project complexity,

(ii) Project implementing agencies involved and their prior experience,

(iii) Involvement of NGOs and community groups in project implementation,

(iv) Ability of the PIU to attract and retain qualified staff,

(v) Integrity of project management, and

(vi) Susceptibility of assets to loss or misappropriation.

Having the above aspects in mind, and based on the response of the FMQA and related

interviews, below the following risks have been identified:

Table 5 Risk summary

Risk Risk

Assessment Risk-Mitigation Measures

Inherent Risks

1. Country-Specific

Risks

M

.Increasing political instable future situation, resulting in

serious hampering of economic development and

possible investments in (WSS) infrastructure projects.

.ADB, or other IFI (/Government of Bangladesh), may

put funding of DWASA’s projects on hold.

2. Entity-Specific

Risks M-S

. Lack of a National Water Regulatory Authority; no

benchmarks or KPI’s for assessment of DWASA

performances.

. Reforms are ongoing, but DWASA still can’t operate as

an (financial) autonomous entity.

. Top management is still appointed by politics for a

limited number of years, so continuity of the ongoing

(reform) programs is not ensured. DWASA MD, and

DMD’s, should be appointed for longer periods.

. Tariff setting –a crucial issue for sustainable DWASA

operations- still needs political approval at several levels.

. The present (too) low tariff is significantly hampering

sustainable development of DWASA. Present DWASA

proposals, based on the DWASA 5 yr Business plan, to

increase the fee more than the officially allowed 5%/yr

was rejected.

3. Project-Specific

Risks S . Total costs/m3 of treated water Khilket WTP I (through

PPP) are significantly higher than present fee/m3, even if



13

viability gap funding is considered.

. Financial absorption capacity of DWASA for the higher

Khilket WTP I (production) costs, as well as the higher

production costs for recently commissioned Saidabad

WTP II, seems questionable if significant adjustments in

the tariff levels keep being rejected.

. The competences and experience of DWASA financial

(/ICT) staff in automatic accounting and reporting

systems are limited. Intensified continuation of ongoing

FM training program is clearly required.

. Same applies for related MIS & Control systems

4. Overall Inherent

Risk M

Concerning the Overall Inherent Risks the present

political unrest and violence seems the biggest risk to

destabilise Bangladesh in the coming years, and thus

may hamper DWASA’s development and financial

situation

Control Risks

1. Executing Entity/

DWASA

M

See above Entity Specific Risks, in addition:

. DWASA is still a more or less ‘traditionally’ organised

organization, in which each department and/or unit is

executing their own tasks, with little coordination or a

joint overall approach.

. Presently a DWASA ‘Think-tank’ is being initiated to

discuss necessary changes in DWASA ‘mission’/strategy

and organization structure. Participants will have mixed

background; DWASA top mgt, GOVERNMENT repr’s,

knowledgeable local experts, consultants)

. DWASA is also a rather centralised organization; no. of

staff at HQ exceeds the total number of staff/employees

in all in the respective 12 zones together.

. The PPP cell in DWASA is still in its infancy and

doesn’t have experience with PPP type of projects like



14

Khilket WTP phase 1. Specific training program seems

advisable, certainly if a Khilket PPP set up will be

implemented.

2. Flow of Funds L

DWASA has handled in the past years several ADB and

other IFI loans, apparently without major problems

3. Staffing M

.The staffing of the FM division may be considered as

weak in terms of qualifications and competences, and

not really up to date with modern automated accounting

and /MIS systems.

. This is considered a result of DWASA’s low salary

levels and lack of attractive work environment.

. Most DWASA staff has a civil engineering background,

and little affinity with non-technical, or organizational -

FM issues. Therefore FM issues and problems don’t get

the proper attention at top-middle mgt level.

. Also adequate FM infrastructure is lacking, i.e.

inadequate hardware (PC’s) and (2G) internet

connections, no central interactive database, using

mostly pirated software, and no virus protection etc.

.Clearly the capacity building program as being initiated

and executed by the DCBP project should be continued

on an intensified scale.

4. Accounting

Policies and

Procedures

L-N

. DWASA follows closely the respective Bangladesh and

international accounting requirements, including

involving qualifies professional external Auditor’s

company

5. Internal audit M

.An internal auditing unit exists, but is mainly addressing

queries from the Government of Bangladesh, and other

external stakeholders on DWASA’s annual report

.The internal auditing could and should be enforced and

improved.

6. External Audit L

External audits are conducted annually by a qualified

Auditing company, with clear and adequate assignment.

In Auditor’s ‘Qualified Opinion” they give clear summary

of deficiencies in DWASA’s FM reporting and accounts.



15

7. Reporting &

Monitoring M

.Reporting of the monthly performances (I. Operations,

II. Finance, III Planning & Administration) is too slow and

mostly 4-5 months after the respective month. As a

result these figures aren’t very useful for responsive and

adequate mgt actions.

.No electronic data exchange linkage of financial/

accounting systems between the zones and HQ

.FCBC advised on computerised accounting system, but

not yet (fully) implemented, even the billing & payment

system not functioning optimal yet.

8. Information

Systems M/S

.The further development of the MIS seems to have

much interest of senior DWASA mgt, however presently

still not sufficient budgets are made available.

.Serious efforts are made (for several years now) to link

the electronic billing system to the DWASA accounting

system, which prove rather cumbersome. Even the

involved bank affiliated offices don’t always have

adequate IT infra structure for online transferring of

billing payments data

.DWASA IT unit consists only of 2 staff, which has to

collect and process all required MIS information. No

actual assessment or analyses of the data is being

conducted

. In the DWSSDP projects efforts are made to monitor

NRW losses through a GPS monitoring.

9. Overall Control

Risk M

Generally it can be stated that the FM risks, flaws and

imperfections are recognised by DWASA, and programs

are ongoing to mitigate, or to improve that. See also

activities and Q progress reports of the ADB-FCBP

project.

. However more effective attention and involvement by

the DWASA top management should be given

concerning the various risks – and the regular internal

(MIS) reporting of their impacts-, in order to be able to

effectively direct and guide the DWASA middle mgt and

staff through the difficult tasks and financial years which

lay ahead of the DWASA organization in the coming 5-

10 years..

H=High, S=Substantial, M=Moderate, N=Negligible or Low



16

5. PROJECT FINANCIAL MANAGEMENT SYSTEM WEAKNESSES

Table 6 lists some significant weaknesses of the FM system, mainly based on the findings of

the ongoing FCB Project, as well as the risk assessment in Section 4.

Table 6 DWASA FM weaknesses

Significant Weakness Resolution

FM Staff qualifications/competences

The staffing of the DWASA FM division is

considered weak in terms of qualifications

and competences, and not really up to date

with modern automated accounting and

reporting systems requirements.

Further the DWASA FM division is understaffed.

In the Accounts Department, many do not have any defined job descriptions.

DWASA accountants presently lack the right academic qualifications to understand and conceptualize the doctrine and the property of the International Accounting Standards (IAS),

Proper ICT infrastructure (i.e., up to date

hardware/software, PC’s) is not made

available.

These significant FM division/staff weaknesses

constitute a dominant and crucial issue. Without

the FM division staff having the proper

background, manpower strength, anr

competences, none of the targeted measures

for FM system improvement and/or procedures

will t show significant results or impacts.

DWASA top management should give sufficient

and continued attention to initiate and monitor

the necessary improvements

(i) to employ more university graduates

with commerce and/or computer background;

(ii) to invest in improved logistical supports,

necessary for implementing any up dated

approach for enhancing capability, i.e. adequate

office space with facilities such as desks, file

cabinets, and other office furniture, printing,

photocopier, e-mail connections, fax machine,

computers, etc.;

(iii) to draft and implement (and monitor)

comprehensive internal FM rules and

regulations to bring improved discipline in

financial management;

(iv) since the majority accounts executives

are promotee’s, not familiar with computer

environment they should be given extensive

training.

(v) to intensify ongoing training programs as

primary level (one/two week) programs are

inadequate - such trainings should be

continued (‘Refresher Courses’) for regular

periods, and being extended



17

Financial Reporting / MIS

This concerns two small FM units, which

every month have to prepare the receipt

and payment account for inclusion in the

MIS reports of the month. The MIS

reports are supposed to be published by

the 20th of the following month;

however, the MIS reports are usually 4-5

months late.

The MIS/ICT unit consists only of 2 staff,

who have to collect and process all

required MIS information; therefore, no

actual assessments or analyses of the

MIS data are being conducted.

• The significantly strengthen the FM

Reporting and MIS unit, in order for these

units to be able to provide the DWASA

management timely with relevant financial

information, analysis, and recommendations

for required actions

• DWASA top management should give

sufficient attention and efforts to guide and

monitor the necessary improvements

Note: without timely MIS reports on the actual

financial situation and KPI’s –in relation to the

budgets- the DWASA management can’t react

timely on significant deviations or flaws.

(‘One can’t steer a big tanker with a navigation

system that gives only information of a few days

ago’)

Internal audit section

This section does not carry out any

routine audit of the accounts and

finances, and only comprises of 1 Sr.

Auditor and 1Auditor, assisted by 2

UDA/LDA. There are no defined job

descriptions

• See earlier recommendations on staff

qualification and staff manpower, as well as

need for additional and continued-regular

training.

Computerization of accounts

In general terms the current practice and

procedure are in line with the

requirements of IAS. One of the key

identified problems however is the

overall tardiness of data processing.

The software must be capable of

handling huge number of data and there

should be a built in data security

provision in the software (which presently

there isn’t)

International accounting practice dictates

that at the end of every working day all

electronic data is separately backed up

and the data stored in reproof store for

use in the event of an emergency or

system failure.

• DWASA is presently investing in up-to-date

computerized accounting packages (within

scope of FCBP project). However unless the

issues concerning the competences and

hardware infrastructures are resolved

quickly, there exists the serious danger that

the new system will either not be used or will

fall into disuse.



18

Preparation/Presentation of Annual

Financial Statements:

Every year Auditors do make several critical

observations on the presented DWASA

accounts, which could have significant

impacts on DWASA’s financial position.

• See earlier recommendations on staff

qualification and staff manpower, as well as

need for additional and continued-regular

training.

Training and Development:

Under the FCBP project, a Training Centre

(TC) has been established and training

courses are now regularly being given to the

DWASA financial staff. Not clear is what will

happen with the TC after the FCBP project is

finished (mid-2013) and the continuation of

the urgently needed training program

To comply with all the statutory obligations,

professional requirements, improvement of the FM

system incl. computerization etc., most FM staff

should receive training in the following areas.

Maintaining and documenting utility finances

Recording all disbursements and receipts in the

books of accounts

Consolidating/presenting financial statements

Preparing information to the donors, government

agencies, related parties

Analyzing, planning, budgeting, and controls

Utilizing the utility finances as per approved plan

and utility activities

Meeting reporting requirements of the donors,

Government, Decision makers & others

Preparing/presenting required reports year-end and

periodical financial statements

Preparing the documents to meet the audit

requirements

Complying obligations under covenants, rules and

guidelines

Any other obligations and reporting requirements,

as required

Computerization

Audits and verifications

Fund management and timely disclosures



19

ADB

(other IFI's)

GoB

Ministry

of Finance

Bank/Imprest

account

Contractors /

Suppliers

DWASA

Consumers

Bank/Imprest

account

DWASA PMU /

Construction

supervision

(PPP

Consortium)

MIS, IAS, & AIS

6. FLOW OF FUNDS MECHANISMS

In general, the government receives loans from the ADB and other donors at soft rate and

conditions; however, DWASA receives the respective project re-lent loan at stricter

conditions and higher rates from the government. The tenure of subsidiary lending is usually

shorter while the interest rate is higher than the one government will be paying to ADB (i.e.,

5% - 7.5% vs. 1% for ADB resources). The Foreign Loan (ADB, WB, Danida, etc) and

government funds will be allocated in the Annual Development Program (ADP) with regards

to the budget estimates prepared by the DWASA based on the annual work plan of the

project.

The loan fund is kept at the Imprest account of Bangladesh Bank. The accounts are

operated by the designated officials of DWASA. From the Bangladesh Bank accounts the

respective funds are transferred to the designated accounts opened at the scheduled

commercial bank of the project. The DWASA will also use the counterpart funds generated

by the program loan, under arrangements satisfactory to lender, to support sector reform

and meet the adjustment costs associated with the loan. Further, the counterpart funds will

be transferred from the Ministry of Finance (MoF) to DWASA to meet the costs and

counterpart funding requirements for implementing the objective of the project.

Based on an agreement of the re-lending conditions between the MoF to DWASA (total

amount, tenure, rate, grace period) the respective loan amount will be transferred (in

tranches) to the respective DWASA project account, and disbursed based on the

implementation contract(s) with the contractor(s) and suppliers.

Figure 2: Fund Flow Scheme



20

Deputy Managing

Director (DMD)

Finance

Chief Accounts

Officed (CAO)

CommercialManager (CM)

Deputy CAO

Accounts Officer (1)

Deputy CAO

Accounts Officer (2)

Works

Section

Pensions

Cash

Section

Ledger

Section

Budget

Section

General

Section

GPF

Contracts &

Billing

Budgets

Reporting

Fixed

asset

Stores

The responsible project PMUs have experience in the management of disbursements from

ADB loans and in the past handled several ADB loans, amongst others

• Loan 492: Dhaka Urban Infrastructure Improvement Project (DUIIP)

• Loan 1124: Integrated Flood Protection Project (IFPP)

• Financial and Capacity Building Consultancy (FCBC) project (2009 – ongoing)

Within DWASA, every project is managed by an officially designated called Project Director

and PMU. The Project Director (PD) of the PMU is the authorized signatory to withdraw ADB

loan proceeds and is also the Drawing and Disbursement Officer (DDO) to draw the

government funds. The allocated Government funds will be released quarterly and the PMU

will present the bills to the Chief Accounts Officer (CAO) for actual disbursement.

The assigned PMU for a project, usually technically assisted by a Construction Supervision

consultant as being the ‘Employer’s Representative’ will be responsible for the control and

review of invoices and payments.

All disbursements are made as per the DWASA Financial Rules 2009 and Generally

Accepted Accounting Principles. DWASA’s own funds are used as per budget approved by

the Board of Dhaka WASA under section 34 of the WASA Act 1996.

7. DWASA FM PERSONNEL

Figure 3: DWASA HQ FM division structure



21

Table 7 Number of HQ FM staff

Position Existing Staff Numbers

Chief Accounts Officer 1

Deputy Chief Accounts Officer 2

Deputy Chief Finance Officer 1

Accounts Officer 6

Finance Officer 1

Accountant 11

Assistant Accountant

Data Entry Operator

Computer Operator

PA

Cashier

23

Driver 1

MLSS 10

TOTAL 56

DWASA’s Finance Accounts and Revenue functions, including the 12 zones, are under the

responsibility of Deputy Managing Director (Finance). The total manpower is 462. In order to

operate the billing and collection function DWASA engages a Revenue Inspector (for every

400 connections), an Inspector analyst (for 2,000 consumers), and an Assistant Revenue

Officer (for 5,000 consumers). The approved number of Revenue Inspectors is around 310

and will be increased further to 450 as of 30th June 2012.

Given the existing number of connections (about 300,000) it seems that the ratio for the

number of Revenue Inspectors should be reconsidered.



22

8. ACCOUNTING POLICIES AND PROCEDURES

DWASA keeps all its financial transactions records like a commercial organization. It follows

the accrual accounting procedure, in accordance with the International Accounting Standard,

and International Financial Reporting Standard which are similar as the Bangladesh

Accounting Standard Standards, or the Bangladesh Financial Reporting Standards.

It is the responsibility of the Managing Director to submit final accounts of DWASA to the

Board after the fiscal year, with a copy sent to the government for its monitoring role.

The DWASA annual financial statements consist of three sets of documents:

(i) the Balance Sheet containing information about the assets and liabilities;

(ii) the Income & Expenditure Statements, containing information about the

operating revenues and expenditures of DWASA; and

(iii) the Cash Flow Statements comprising information from the Balance Sheet and

the Income and Expenditure Statements, including information about the cash flow

generated from operating activities, investments and financing, as per Bangladesh

Accounting Standards and Bangladesh Financial Reporting Standards.

Allocation of costs and expenditures is done in accordance with respective cost components.

There exist in total 9 Rules for the DWASA Accounting System, under the Dhaka WASA

Financial Regulation 2009. As per the Regulations 68 to 76 the DWASA must keep its

accounts as per IAS and IFRS. Capital Accounts and Revenue Accounts must be separated.

The formation and the deposits at the capital accounts are also mentioned in Regulations 70

to 72 of 2009. The formation of Revenue Accounts is mentioned in Regulation 73. The

preparation of accounts and maintenance are also described in the sub rules 74 and 75 of

the Dhaka WASA Financial Regulation 2009. The store accounts are also maintained by the

DWASA. The Chart of Accounts prepared by consultants are being followed by the DWASA.

The main sources of income of DWASA are collection of tariffs from the various user groups

(households, commercial and industrial users). The Revenue Division manager and staff

ensure that the billing is based on consumption of water on a monthly basis. After receiving

a bill, the consumer may pay its bill through designated banks and or by cell phone.

DWASA has agreements with almost all banks and two cell phone operators for that purpose

(Robi and City Cell).

The DWASA staff of Finance and Accounts department is responsible to ensure

reconciliation with accounting records and bank statements on monthly basis. If there is any

variance, the Office of the Chief Accounts Officer and the concerned bank will take

necessary action to resolve the matter expeditiously.

Several significant shortcomings have been observed (amongst others in the annual Audit

Report) in the financial management and budgeting of DWASA, many of which are being

addressed by the presently ongoing FCB project team.

To strengthening the financial management capacity, DWASA is presently implementing a

Government/ADB financed project titled: Dhaka Water Supply Sector Development Program

(DWSSDP). The DWSSDP aims to improve DWASA’s financial sustainability and



23

strengthening DWASA’s governance and organizational structure and financial management

capacity (through FCB project).

Since May 2011 computerized billing systems operate in all DWASA Zones.. However, this

has not yet been linked to the revenue or accounts department but only to the IT

department. Work is ongoing to rectify this situation. The billing system was designed by

persons without sufficient knowledge of utility billing but essentially designed by the IT

department to provide basic data for the Management Information System. The FCBC team

is reviewing the data but because the data is very raw, there have been issues in linking the

system to the accounts package.

About 200 branches in 9 banks are under real-time on-line billing system receiving Dhaka

WASA water & sewer bill. The billing database is instantly updated when bills are paid at

these branches. Few more banks including Janata Bank Ltd., a state owned bank, will come

under this system soon.

For further detailed information on DWASA’s accounting policies and procedures, see Annex

1: Financial Management Assessment Questionnaire, with reference to the following

questions and answers:

4. Accounting Policies and Procedures (4.1 – 4.16)

Payments (4.17 – 4.19)

Policies and procedures (4.20 – 4.27)

Cash and Bank (4.28 – 4.33)

Safeguard over assets (4.34 – 4.37)

Other offices and implementing agencies (4.38 – 4.42)

9. INTERNAL AUDIT

Internal controls related to the DWASA FM system are to ensure that:

(i) transactions are executed in accordance with management’s authorization;

(ii) transactions and other events are promptly recorded in the correct amount, in

the appropriate accounts. and in the proper accounting period;

(iii) access to assets is permitted only in accordance with management’s

authorization; and

(iv) recorded assets are compared with the existing assets at reasonable intervals

and appropriate action is taken regarding any differences.

The internal audit division of DWASA is to conduct pre-audits and post-audits on pre-audit of

payments over BDT 500,000 and post-audit of payments up to BDT 500,000. To ensure the

transparency and independence the internal audit unit works under the direct supervision of

the Managing Director of DWASA. There is provision for 18 officers. Presently the Internal

audit division comprises 2 Audit Officers and 12 auditors, headed by a Sr. Audit Officer.



24

DWASA has in the past introduced methods and procedures to ensure the integrity of

financial and accounting information to meet operational and profitability targets, and to

distribute management policies throughout the organizational goal and objectives set out by

the Board under the WASA Act 1996, amongst others that:

(i) all payments are done after following the Public Procurement Rules 2008 and

Public Procurement Act 2006.

(ii) all payments are done through crossed cheque and all receipts are take

through bank which ensure the internal control of fund of the DWASA;

(iii) payrolls, overtime allowances, conveyances are to be transferred to the

concern employees accounts directly from DWASA’s designated bank accounts; and

(iv) all bank accounts are to be operated jointly as per delegation of financial power

approved by the DWASA Board as well as DWASA Finance Rules 2009.

In practice however it is observed that the personnel of the Internal Audit department have no clear job assignment. Instead of carrying the required routine internal audit activities, they are busy in preparing the audit replies on request of the government and other stakeholders’ audit teams.

In a future computerized finance and accounting environment the functions of Internal Audit should be subject to significant changes, including:

(i) Application controls through (electronic) documentation (ii) Segregation of duties and security (iii) Control over systems software, specifically control over on line program changes (iv) Control over operations & processing & distributed processing to control the transfer

of data between integrated accounting system (v) Control over application system development (vi) Regular compliance testing procedures & audit tail of individual items entered for

processing using on line terminal.

This would require substantial changes in required staff background and job competences.

10. EXTERNAL AUDIT

An audit includes examining, on a test basis, evidence supporting the amounts and

disclosures in the financial statements. An audit also includes assessing the accounting

principles used and significant estimates made by management, as well as evaluating the

overall financial statement presentation.

The DWASA accounts must be audited by an auditor appointed by the Board of DWASA on

an annual basis. The remuneration of the auditor will be fixed by the Board. The authority

must ensure that after the accounts preparation the audit and Board approval shall be

completed within two months after the end of a financial year. Ref: Section 40 of the WASA

Act 1996.

The scope of the external audit includes

(i) adequacy of the accounting and internal control systems;



25

(ii) ability to maintain adequate documentation for transactions;

(iii) eligibility of incurred expenditures;

(iv) basis of estimates; and

(v) an opinion concerning the fairness of the accounts, as maintained and provided

by the DWASA management

As DWASA is a state entity, the Office of the Comptroller and Auditor General of Bangladesh

will review and comment on DWASA’s financial reporting and records.

The accounts of DWASA are regularly audited by the Government Commercial Auditors

(CAG) Office as well. These auditors mainly focus on observance of the applicable

government rules and regulations concerning salary fixation, overtime, pension scheme,

procurements, and budget provisions.

For development projects, an audit is also performed by the FAPAD unit of the CAG. This

unit is specifically trained on loan procedures and loan negotiation documents. This unit also

reviews if the project is being implemented according to the approved loan agreements, and

reviews as well the tax payments, deviations from the loan agreements, authorizations, and

disbursements.

The Board of Dhaka WASA approved a policy for appointing auditor in 2010 and under that

policy the auditor of 2009 was appointed. Since 2009-10 M/s Rahman Rahman Huq

Chartered Accounts a Member Representative of KPMG (One of the Big Four audit firms of

the world) was appointed. The auditor already audited the accounts of Dhaka WASA for

successively three years from FY2009-10 to FY 2011-12.

Completion of the external audit is also a mandatory requirement of the development

partners; namely, World Bank, Asian Development Bank, JICA, etc. DWASA sends its audit

reports to the donor as well as Project audit Reports.

The external Audit Report should be submitted within 2 months from the end of the FY.

DWASA, however, has until now not been able to submit the audit report on time.

The Audit report for FY2010-2011 was finalized on 25 November 2011. The draft accounts

for the FY ending 30 June 2012 were finalized in December 2012.

Critical accountability issues brought up by the auditors in their audits for the fiscal years

2010/11 and 2011/12 concern:

(i) Accounting for Government Grants & Funds is not maintained as per IAS 20.

(ii) Maintenance of proper Fixed Assets Register is lacking.

(iii) Physical verification of fixed assets is lacking.

(iv) Pension Fund provisions not yet increased as per requirements as per IAS 19.

(v) Significant differences in Accounts Receivables of DWASA and its related 12

revenue zones.

(vi) Taxes on profit not totally according to ‘Income Tax Ordinance 1984

(vii) No provisions made for disputed claim of NBR VAT authority

Table 8: Overview Audit Reports 2003 - 2012



26

Fiscal

Year

Date of

completion Auditor

Time for

completing

Status of

report

2000-01 27 Aug 03 Khan Wahab Shafique Rahman & Co. 14 months Qualified

2001-02 11 May 03 Khan Wahab Shafique Rahman & Co. 11 months Qualified

2002-03 30 May 04 Huda Vasi Chowdhury & Co. 11 months Qualified

2003-04 13 May 06 Huda Vasi Chowdhury & Co. 10.5 months Qualified

2004-05 11 Dec 06 Khan Wahab Shafique Rahman & Co. 17.5 months Qualified

2005-06 03 Jan 08. Aziz Halim Khair Choudhury 18 months Qualified

2006-07 30 Jun 09 Aziz Halim Khair Choudhury. 24 months Qualified

2007-08 24 Jan 10 Aziz Halim Khair Choudhury. 17 months Qualified

2008-09 30 May 10 Khan Wahab Shafique Rahman & Co. 11 months. Qualified

2009-10 06 Feb

11.

Rahman Rahman & Huq 7 months Qualified

2010-11 11 Oct11 Rahman Rahman & Huq 4 months Qualified

2011-12 Dec 12 Rahman Rahman & Huq 6 months Qualified

11. REPORTING AND MANAGEMENT INFORMATION SYSTEMS (MIS)

The DWASA MD has to submit the annual budget to the Board 3 months before the ending

of the financial year, as per section 34 of the WASA Act 1996.

The annual budget is prepared by the Budget Committee consisting of

(i) Managing Director- Convener.

(ii) All Deputy Managing Directors- Member.

(iii) Chief Engineer- Member.

(iv) Secretary- Member and

(v) Commercial Manager- Member Secretary

As a government entity, DWASA is required to submit the revised budget of DWASA to the

Ministry of Finance by December. The Minister of Finance is required to submit the revised

budget in March as per section 12 of the Government Finance and Budget Management Act

2009 (40th Act of 2009). To facilitate the approval procedures, the DWASA Board approves

the budget for the next year together with the revised budget of the current year by

December.



27

Following important aspects are considered when preparing DWASA Budget

(i) All possible receipts and payments must be included.

(ii) All expenditures should be kept in minimal figures.

(iii) All receipts and total payments should be included.

(iv) All outstanding revenues should be included.

(v) Cash Flow Statements are to be prepared on monthly basis reporting all

figures.

(vi) As per art.26 of the DWASA (Finance) 2009 act, the departmental Head will be

responsible to control the cost of each department.

The reporting is done in accordance with accounting standards; i.e., the GAAP and the

Bangladesh Accounting Standards.

Separate Financial Statements are prepared for each project independently.. The financial

reports are partly prepared by an automated accounting system, using Tally Software ERP

9.5. In the framework of the ADB FCB Project ongoing support is given to extend the

automation of the accounting system, in particular concerning the computerization of the

billing system, starting in 2010.

The respective financial reports are intended to compare actual expenditures with budgeted

and programmed allocations. Variance analyses are undertaken for proper implementation

of budgetary control system at the DWASA.

Presently the DWASA financial reporting system has no electronic link with the financial

information systems of individual projects progress; therefore, no financial controls are in

place to reduce the risk that the physical and financial project progress data may not always

synchronize with the reported financial data37.

In 2009 the billing collection rate was 80 % and currently it has increased to about 90%

percent. The rate for outstanding debts (age) has come down from 16 months to about 7.5

months by end of 2012.

12. PROCUREMENT

Being a public entity, the DWASA procurement section follows closely the procurement rules

and procedures set by the government, IFI and other (bi-lateral) donors. These general

procurement rules are applicable for all types of procurements; procurement of goods, works

and services, as well concern national or international competitive bidding procedures.

The procurement of works, goods or services, under government and internal loan

agreements with DWASA is done in accordance with the guidelines of the Public

Procurement Rules 2008, concerning competitive bidding processes38.

Concerning the financial impact of procurement issues on the DWASA Finance Division

relates mainly to reviewing and/or approving, amongst others, the following issues:

(i) whether the PPR has been followed

37

Detailed information on the DWSA reporting/MIS may be obtained from the ongoing ADB - FCB Project, located at the

10th

floor of the DWASA HQ 38

Further details of this procurement process are presented in the Institutional Assessment Report, Section F



28

(ii) suppliers bills

(iii) material receiving reports (MMR) from store keeper

(iv) quantity/quality of materials in relation to specifications

(v) whether quality has been certified by concerned experts

(vi) whether any earlier payments already have been made

(vii) security deposits

(viii) whether deductions at sources have been made (VAT-Taxes-IT)

PPP. Presently DWASA has little to no experience with PPP/PSP procurement or

contracting arrangements. In principle PPP contractual arrangements do include extensive

review and analysis preparations, as well as detailed negotiations with potential/selected

private sector partners and ultimately the contracting specifications of commercial and

technical/O&M details. This all requires up to date technical, financial and

operating/supervising knowledge and skills, which presently are not sufficiently available

within the DWASA organization. If the funding for the Khilkhet WTP projectincludes a PPP

source through a BOT arrangement, the PPP cell in DWASA may need further

strengthening through a specialized PPP training program.

14. DISBURSEMENT ARRANGEMENTS

The disbursement arrangements are as follows:

The Foreign Loan (ADB, WB, Danida etc) and Government funds will be allocated in the

Annual Development Program (ADP) with regards to the budget estimates prepared by the

DWASA based on the annual work plan of the project.

As already stated in section 6, the (ADB/foreign) loan will through an imprest account (at the

Central bank of Bangladesh) be transferred from the ADB to the Government. Based on an

agreement of the re-lending conditions between the MoF and DWASA (total amount, tenure,

rate, grace period) the respective loan amount will be transferred in tranches through an

Imprest account to DWASA, and disbursed based on the implementation contract) with the

contractors and suppliers.

Within DWASA each main project is managed by an officially assigned Project Director (PD)

and PMU. The Project Director is the authorized signatory to withdraw ADB loan proceeds

and is also the Drawing and Disbursement Officer (DDO) to draw the Government funds.

Government funds allocated in the Annual Development Program (ADP) will be released

quarterly and the PMU will present the bills to the Chief Accounts Officer (CAO) for actual

disbursement.

The project PMU’s, usually technically assisted by a Construction Supervision consultant as

being the ‘Employer’s Representative’ (/‘Engineer’) will be responsible for the control of the

project implementation and for the review and approval of invoices and payments

All disbursements are made according to the DWASA (Financial) Rules 2009 and Generally

Accepted Accounting Principles. DWASA’s own funds are used as per budget approved by

the Board of DWASA under section 34 of the WASA Act 1996.

The ADP Funds are disbursed as per Project Accounts Manual, and Delegation of Financial

Powers for Development Project, approved by the Ministry of Finance. Borrowed funds from



29

foreign development partners are disbursed as per loan agreement. The loan proceeds will

be used to finance the foreign exchange cost (excluding local duties and taxes) of items

produced and procured. The reimbursement procedure will be used to disburse the loan

proceeds based on certification by the Government.

The loan funds are kept at the Imprest account of Bangladesh Bank. These accounts are

operated by the designated officials of DWASA. From Bangladesh Bank DOSA Accounts

the allocated funds are transferred to the designated accounts opened at the scheduled

commercial bank of the project. DWASA will also use the counterpart funds generated by the

program loan, under arrangements satisfactory to lender, to support sector reform and meet

the adjustment costs associated with the loan.

15. ACTION PLANS

There exists already an on-going reform process for the various DWASA Accounts Division

sections towards the implementation of more advanced computerization systems. Therefore

in addition to the normal control functions related to the various cash inflows/outflows, as a

consequence of the increased computerization the following accounts division control

functions need to be further developed, strengthened and regularly trained:

(i) Control over input documents – from the preparation phase to approval and

feeding into the FM system

(ii) Application control for data processing

(iii) Segregation of duties and responsibilities

(iv) Control over system software

(v) Control over operation/continuity and continuity of processing (24/7)

(vi) Control over distributed processing specifically for Revenue collection

(vii) Data base ( master data) control and its updating

(viii) Control over batch input including numbering control- ( date wise /batch wise)

(ix) Control of rejection of data input

(x) Control over output batches

(xi) Control over on-line program changes

(xii) Integrated system control

In addition, to comply with all the statutory obligations, professional requirements, improvement of

the FM system including computerization, most FM staff should receive training in the following

areas:

(i) Maintaining and documenting utility finances

(ii) Recording all disbursements and receipts in the books of accounts

(iii) Consolidating/presenting financial statements

(iv) Preparing information to the donors, government agencies, related parties

(v) Analyzing, planning, budgeting, and controls

(vi) Utilizing the utility finances as per approved plan and utility activities

(vii) Meeting reporting requirements of the donors, government, decision makers

and others



30

(viii) Preparing/presenting required reports year-end and periodical financial

statements

(ix) Preparing documents to meet the audit requirements

(x) Complying obligations under covenants, rules, and guidelines

(xi) Any other obligations and reporting requirements, as required

(xii) Computerization

(xiii) Audits and verifications

(xiv) Fund management and timely disclosures

(xv) MIS, IAS, & AIS

Solving the present DWASA’s lack of modern interlinked electronic accounting systems and

respective required ICT knowledge, on the job and classroom training programs for

computer literacy and up to date accounting systems should be the highest priority for

DWASA FM management and staff in the years to come.

Modern accounting procedures and knowledge as laid down in various international

accounting standards are to be provided to all staff members of Accounts Division,

specifically to the 2nd tier officials. The Accounts Division has to adopt the standard Chart of

Accounts conforming to the International Accounting standards.

Within the FCBC project a detailed action and training program is ongoing and regularly

reported on. For more detailed information see the latest FCBP Quarterly Progress report39.

The transition process from an old traditional manual system to a new up to date custom-

ailor made DWASA electronic accounting system is a difficult and challenging task to be

dealt jointly within DWASA management. This will only become successful if DWASA top

management will support this transition by clear directions, making sufficient budgets

available and by closely monitoring the required actions at all levels of management.

39

FCBP Quarterly Progress Report, December 2012



31



32



33



34



35



36

Completed Financial Management Assessment Questionnaire

Topic DWASA Response Remarks

1. Implementing Agency

1.1 What is DWASA’s legal status / registration?

The DWASA is an autonomous Government Utilities Services organization established under WASA Ordinance 1963. The WASA Act 1996 was promulgated to provide more autonomy and for running the DWASA on a commercial basis.

However, presently full commercial autonomy seems questionable..

1.2 Has DWASA implemented an externally-financed project in the past (if so, please provide details)?

Yes, from its inception DWASA gets foreign loan to develop infrastructure and ensure proper services to the valued customers. IDA: i. 1st Dhaka Water Supply; $13 million (1963) ii. 2nd Dhaka Water Supply. $20.5 million; (1979) iii. 3rd Dhaka Water Supply, $30 million (1986) iv. 4th Dhaka Water Supply, $80.3 million (1996) ADB i. Dhaka Urban Infrastructure Improvement Project, $24.2 million (1988) ii. Dhaka Integrated Flood Protection Project, $91.5 million (1991) SIDA Generator Loan $2.03 million (1999). Danida: The DWASA Saidabad Phase II WTP €85 million, equivalent BDT 777.62 crore (2008-2012)

1.3 What are DWASA’s statutory reporting requirements?

As per the WASA Act 1996 the DWASA has to submit its Annual Report within 3 months from the end of the fiscal year to the ministry and other stakeholders. The audit reports of DWASA must be completed and approved by the Board of DWASA within 2 months as per WASA Act 1996.

The Accounts and Annual Reports for the FY ending 30tJune 2011 already published. The audit for the FY ending 30 June 2012 is finalized and was completed by December 2012.

1.4 Is the governing body for the project independent?

The DWASA Board comprises of 13 Members including its Chairman from different discipline. The Board is the



37


Governing Body of DWASA. In the spirit of the WASA Act 1996 the Board should perform its functions in full autonomy.

1.5 Is the organizational structure appropriate for the needs of the project?

To implement the project the DWASA needs extra manpower.

Not only extra manpower, but also improved IT infrastructures, and efficiency measures

1.6 Does DWASA have experience with PPP (BOT, Concession, Management contract, etc)?

The DWASA has a PPP Cell. However the DWASA has not yet implement any project under PPP concept.

No practical PPPexperience; extra training required, if PPP set up will be opted for Khilket WTP phase I

2. Fund Flow Arrangements

2.1 Describe project fund flow arrangements, including a chart and explanation of the flow of funds from ADB, government, and other financiers.

The GoB gets loan from the ADB and other donors at soft rate but the DWASA gets loan at higher rate from the GoB. The DWASA pays off its loans with interest from its revenue.

See FMA report, section 6.

2.2 Are the proposed arrangements to transfer the proceeds of the loan (from the government / Finance Ministry) to DWASA satisfactory?

The re-lending terms are much more restrictive than the terms at which GoB borrows from ADB. The maturity of subsidiary lending is shorter while the interest rate is much higher than the one GOB will be paying to ADB (7.5% vs. 1% for ADB resources). The re-lending conditions should perhaps be revised also in consideration of the overall debt service DWASA should bear as a result of the new borrowings.

Presently an interest rate of 5 %, as well as a tenure of 20 yr and a grace period of 5 year is used.

2.3 What have been the major problems in the past in receipt of funds by DWASA?

There are no major problems.

2.4 In which bank will the Imprest Account be opened?

Bangladesh Bank (Central Bank of Bangladesh)

2.5 Does the proposed project management unit (PMU) have experience in the management of disbursements from ADB?

Yes. DWASA has already acted as the executing agency for ADB Loans: 1.Loan 492: Dhaka Urban Infrastructure Improvement Project (DUIIP) 2.Loan 1124: Integrated Flood Protection Project (IFPP) 3.ADB Funded Financial and Capacity Building Consultancy (FCBC) has been implemented from 2009

Not clear is whether responsible DWASA PMU staff is still employed within DWASA.

2.6 Does DWASA have / need Yes, DWASA has capacity to manage Not clear



38


a capacity to manage foreign exchange risks?

foreign loan. DWASA has been paying foreign loan installments from its funds.

whether indeed DWASA takes a ForEx risk on their foreign, or GOB loans.

2.7 How are the counterpart funds accessed?

The Foreign Loan (ADB, WB, Danida etc) and GOB funds will be allocated in the Annual Development Program (ADP) with regards to the budget estimates prepared by the DWASA based on the annual work plan of the project.

2.8 How are payments made from the counterpart funds?

In the DWASA every project are managed by a designated official called Project Director. The Project Director (PD) of PMU who is the authorized signatory to withdraw ADB loan proceeds is also the Drawing and Disbursement Officer (DDO) to draw the Government funds. GOB funds allocated in the ADP will be released quarterly and the PMU will present the bills to the Chief Accounts Officer (CAO) for actual disbursement.

See also FMA report, section 6.

2.9 If part of the project is implemented by communities or NGOs, does the PMU have the necessary reporting and monitoring features built into its systems to track the use of project proceeds by such agencies?

Not Applicable

2.10 Are the beneficiaries required to contribute to project costs? If beneficiaries have an option to contribute in kind (in the form of labor), are proper guidelines formulated to record and value the labor contribution?

Not Applicable.

3. Staffing

3.1 What is the organizational structure of the Accounting department? Attach an organization chart.

The existing organizational structure for the finance and accounting department includes one Finance and Accounts Department under the Commercial Manager, who reports to the DMD Finance. There are presently 45 accounting personnel.

See DWASA Financial

Management Assessment

Report, section

7

3.2 Identify the (proposed) accounts staff, including job

See Organizational Assessment Report



39


title, responsibilities, educational background and professional experience. Attach job descriptions and CVs of key accounting staff. 3.3 Is the project finance and accounting function staffed adequately?

Project finance and accounting function is usually performed by existing staff as part of regular functions. Total number of staff in the accounts department is 45, which we is believed not adequate to handle the project accounts.

See also DWASA

Financial

Management Assessment

Report, section 5, 8.

3.4 Is the finance and accounts staff adequately qualified and experienced?

Most of the staffs have adequate education and many years experience in handling DWASA. Training of existing staff as well as hiring of professional accountants are needed.

However, in particular extra

training on IT hard-software is

required

3.5 Is the project accounts and finance staff trained in ADB procedures?

DWASA has already implemented ADB projects and trained DWASA staff in ADB procedures. The projects were done prior to 2000, but since then there have been personnel movements. Training needs to be provided to current staff.

3.6 What is the duration of the contract with the finance and accounts staff?

Most the staff is permanent although the DMD Finance is recruited on contractual basis, if not deputed by the Government, for a limited period.

3.7 Indicate key positions not contracted yet, and the estimated date of appointment.

All key positions have been appointed.

3.8 Does the project have written position descriptions that clearly define duties, responsibilities, lines of supervision, and limits of authority for all of the officers, managers, and staff?

No. Once decision has been made

how the Khilkhet WTP phase I will

be implemented,

this should be further

discussed and arranged.

3.9 At what frequency are personnel transferred?

Normally low level staffs are transferred to other positions within the accounts department every 3 years. Officers handling top position ns could be transferred to other departments.

3.10 What is training policy for the finance and accounting staff?

The performance of DWASA Training Institute is poor because of severe constraints from the logistic, financial and human resources point of view.

See for proposed

extensive FCBP

training program

4. Accounting Policies and Procedures

4.1 Does the entity have an accounting system that allows for the proper recording of

Yes. Allocation of expenditures is done in accordance with respective cost components.A system allocating costs

Accounting

system is basically



40


project financial transactions, including the allocation of expenditures in accordance with the respective components, disbursement categories, and sources of funds? Will the project use the entity accounting system?

between water and sewer operations was maintained prior to 2000. This system has been discontinued.

automated, however with

low level standard

software. Needs

to be upgraded, which is ongoing

in the FCB Project.

4.2 Are controls in place concerning the preparation and approval of transactions, ensuring that all transactions are correctly made and adequately explained?

All transactions of DWASA have been executed after getting approval from the competent authority as per delegation of financial power of DWASA.

4.3 Is the chart of accounts adequate to properly account for and report on project activities and disbursement categories?

The Chart of Accounts is made by FCBC Consultants for DWASA. However it may be changed as and when required basis.

4.4 Are cost allocations to the various funding sources made accurately and in accordance with established agreements?

Yes. Errors noted in Audit Reports have been corrected.

Actually various

corrections still pending; see

also Auditor’s report 2011/12

4.5 Are the General Ledger and subsidiary ledgers reconciled and in balance?

No, subsidiary ledger for the rate receivable, inventory and fixed assets are not reconciled.

In FCBP project improvements and recommendations are made.

4.6 Are all accounting and supporting documents retained on a permanent basis in a defined system that allows authorized users easy access?

Yes. Important documents are kept on permanent basis. Other documents kept for several years as per government rule.

4.7 Are the following functional responsibilities performed by different units or persons: (i) authorization to execute a transaction; (ii) recording of the transaction; and (iii) custody of assets involved in the transaction?

Yes, (i) head of requesting department authorizes the transaction, (ii) accounts department records the transaction, (iii) Administrative and engineering department has custody of assets.

4.8 Are the functions of ordering, receiving, accounting for, and paying for goods and services appropriately segregated?

No response received. See assessment of procurement procedures in Institutional Assessment report

4.9 Are bank reconciliations prepared by someone other

Yes, bank reconciliation statements are prepared.



41


than those who make or approve payments?

Budgeting System

4.10 Do budgets include physical and financial targets?

Budget elaboration at DWASA follows an incremental approach in which the new budget figures are based on previous year’s values plus a 20-30% increase. As a result, DWASA does not adopt a results oriented budget approach in which physical and financial targets are defined.

4.11 Are budgets prepared for all significant activities in sufficient detail to provide a meaningful tool with which to monitor subsequent performance?

Budget estimates are done on an incremental basis. Investment activities are planned by the Planning and Development division in accordance with the DWASA Strategic Development Plan; however, funding for such activities is provided for by the Government as part of the Annual Development Fund allocation and the use of fund is recorded into the Development Budget held by the Planning division and separated by the operational budget of DWASA that is held by the accounting and finance division. Operation and Maintenance activities are not planned ahead but they are executed on a need basis.

Documentation related to the Development Budget is not available in English, but it should provide annual statements about the execution of the investment activities. Moreover, DWASA also publishes monthly progress reports on project execution which provide information about stage of project execution

4.12 Are actual expenditures compared to the budget with reasonable frequency, and explanations required for significant variations from the budget?

The accounting department has provided (i)“Revenue Budget at a Glance” document contains comparison of approved-revised budget figures, and (ii) monthly Income and Expense Reports including a comparison of budget and actual figures in Bangla. DWASA also prepares an MIS report every month, and this includes a comparison of budget and actual figures.

The Commercial Manager states that reports are reviewed and discussed. Budget variances are analyzed and required action is planned in monthly meetings with



42


the DMD 4.13 Are approvals for variations from the budget required in advance or after the fact?

DWASA usually resorts to the supplementary budget procedure to obtain approval from the Ministry of Finance for expenditure that unexpectedly arise during the year.

4.14 Who is responsible for preparation and approval of budgets?

The operating budget is prepared by accounts department. The Planning department is responsible only the for the Development budget. According to the DWASA Act the budget is approved by the Board and a copy is send to the Ministry of Finance. The budget is approved by respective Ministry in the budget meeting. Supplementary budget is approved by MD//DMD finance subject to approval of the board.

A budget division is provided in the proposed organization. The current practice however is that the final approval of the budget has to be given by the Ministry of Finance.

4.15 Are procedures in place to plan project activities, collect information from the units in charge of the different components, and prepare the budgets?

Operation and Maintenance activities are done on a need basis. Project activities are planned in the Strategic Development Plan of DWASA and approved by the Government

4.16 Are the project plans and budgets of project activities realistic, based on valid assumptions, and developed by knowledgeable individuals?

Yes. Usually for the bigger projects outside Consultants will be involved.

Payments

4.17 Do invoice processing procedures provide for: (i) Copies of purchase orders and receiving reports to be obtained directly from issuing departments? (ii) Comparison of invoice quantities, prices and terms, with those indicated on the purchase order and with records of goods actually received? (iii) Comparison of invoice quantities with those indicated on the receiving reports? (iv) Checking the accuracy of calculations?

Yes. All such procedures are done according to DWASA internal payment system.

See assessment of Procurement procedures in Institutional Assessment report

4.18 Are all invoices stamped PAID, dated, reviewed and approved, and clearly marked

Yes, all invoices are marked as paid by affixing PAID Stamp. All vouchers are checked and review by Accounts officer



43


for account code assignment? as a tool of internal control system. The vouchers are regularly audited by internal auditor. If the invoice amount is higher than BDT 500,0000 the pre audit is done for that payment. Otherwise post audit will be done.

4.19 Do controls exist for the preparation of the payroll and are changes to the payroll properly authorized?

The payroll system has been computerized since 2006. The proper control exits for this purpose.

Policies And Procedures

4.20 What is the basis of accounting (e.g., cash, accrual)?

Accrual

4.21 What accounting standards are followed?

Generally Accepted Accounting Principles (GAAP) and Bangladesh Accounting Standards adopted by Institute of Chartered Accountants of Bangladesh (ICAB).

4.22 Does the project have an adequate policies and procedures manual to guide activities and ensure staff accountability?

The project has not yet started.

4.23 Is the accounting policy and procedure manual updated for the project activities?

Accounting policy and procedures manuals will be prepared as part of the contract for review and computerization of accounting systems by the FCBC.

Is ongoing, but not yet implemented

4.24 Do procedures exist to ensure that only authorized persons can alter or establish a new accounting principle, policy or procedure to be used by the entity?

Accounting polices are approved by the Board of DWASA.

4.25 Are there written policies and procedures covering all routine financial management and related administrative activities?

The DWASA Financial Rule 2010 and The DWASA Service Riles 2009 already approved by the GOB and already implemented at the DWASA.

4.26 Do policies and procedures clearly define conflict of interest and related party transactions (real and apparent) and provide safeguards to protect the organization from them?

As per International Accounting Standard which is applicable in Bangladesh and Financial Rule these issues are defined.

4.27 Are manuals distributed to appropriate personnel?

After being approved, the Financial Manual(s) will be distributed to the concerned officials for implementation.

Cash and Bank

4.28 Indicate names and - Accounts Officer



44


positions of authorized signatories in the bank accounts.

- Two Deputy Chief Accounts Officer- Chief Accounts Officer - Commercial Manager- DMD Finance in the absence of Commercial Manager.

4.29 Does the organization maintain an adequate, up-to date cashbook, recording receipts and payments?

Yes all cash books are maintained and reconciliation done through Tally Software 9.20 ERP Version.

This is rather old fashioned/low level software, which is being upgraded presently within the FCB Project.

4.30 Do controls exist for the collection, timely deposit and recording of receipts at each collection location?

Yes, all cash books are maintained and reconciliation done through Tally Software 9.20 ERP Version. As well as the collections are deposited at the Central account of each bank at the end of week.

4.31 Are bank and cash reconciled on a monthly basis?

Yes, it is done bimonthly through Tally Software 9.20 ERP Versions.

4.32 Are all unusual items on the bank reconciliation reviewed and approved by a responsible official?

The Deputy Finance Office is responsible to oversee the reconciliation works done by Accountants and Accounts Officers.

4.33 Are all receipts deposited on a timely basis?

Yes, within same day the receipts must be deposited at the bank

Safeguard over Assets

4.34 Is there a system of adequate safeguards to protect assets from fraud, waste, and abuse?

There are fixed assets register where the records are maintained. Accounting record for the fixed assets transaction can also be used as a 44safeguard of assets. However a physical verification of fixed assets were done in 2010-11.

According to Auditor’s report 2010/11 this has not been done properly

4.35 Are subsidiary records of fixed assets and stocks kept up to date and reconciled with control accounts?

Records are up to date but not reconciled.

4.36 Are there periodic physical inventories of fixed assets and stocks?

Yes, physical inventorying and fixed assets were done by a committee formed vide administrative order of the DWASA for the year 2010-11.

4.37 Are assets sufficiently covered by insurance policies?

No. Insurance is not adequate to cover all the assets

Other Offices and Implementing Entities

4.38 Are there any other regional offices or executing entities participating in implementation?

Yes, there are 11 Zonal/Divisional MODS Offices for MODS and Revenue Offices.

4.39 Has the project Khilkhet project has not yet started.



45


established controls and procedures for flow of funds, financial information, accountability, and audits in relation to the other offices or entities? 4.40 Does information among the different offices/implementing agencies flow in an accurate and timely fashion?

Yes, all information among different offices and implementing agencies provide information on timely basis with assurance of accuracy.

Auditor’s Report 2011/12 notes a significant difference between recorded revenues from the 12 revenue zones and recognized revenues at DWASA central level

4.41 Are periodic reconciliations performed among the different offices / implementing agencies?

Periodic reconciliation has been done on requirement basis.

Reconciliation of discrepancies could not be provided by DWASA.

4.42 Has the project advised employees, beneficiaries and other recipients to whom to report if they suspect fraud, waste or misuse of project resources or property?

In DWASA, an enquiry committee is usually formed to handle such reports. Action is taken according to enquiry report.

5. Internal Audit

5.1 Is there an internal audit department in the entity?

Yes. There is an Audit Division comprising 2 Audit Officers and 12 auditors, headed by a Sr. Audit Officer. They conduct pre audit of payments over Tk 500,000 and post audit of payments up to Tk 500,000.

The proposed new organization chart provides for an Audit Department reporting to the MD. See also comments in the FMA report, section 9.

5.2 What are the qualifications and experience of audit department staff?

See DWASA Organizational Assessment Report

Separate sheet will be enclosed.

5.3 To whom does the internal auditor report?

Managing Director



46


5.4 Will the internal audit department include the project in its work program?

Managing Director

5.5 Are actions taken on the internal audit findings?

Yes proper actions are taken after formation a committee.

See also comments in the FMA report, section 9

6. External Audit

6.1 Is the entity financial statement audited regularly by an independent auditor? Who is the auditor?

Yes. The External auditor for last three year is Raman Rahman Huq

6.2 Are there any delays in audit of the entity? When are the audit reports issued?

Yes. The audit report should be submitted within 2 months from the end of the FY. DWASA, however, has never been able to submit the audit report on time. The Audit report for the year 2010/11 was finalized On 25th November 2011. The draft accounts for the year ended 30th June 2012 was submitted in December 2012.

See FMA report section 10

6.3 Is the audit of the entity conducted according to the International Standards on Auditing?

Yes

6.4 Were there any major accountability issues brought out in the audit report of the past three years?

Yes. Serious issues were reported regarding overstatement of revenues and profits and understatement of liabilities and debt


6.5 Will the DWASA auditor audit the project accounts or will another auditor be appointed to audit the project financial statements?

The DWASA auditor will audit the project accounts.

6.6 Are there any recommendations made by the auditors in prior audit reports or management letters that have not yet been implemented?

In the Audited Accounts 2009/10, 2010/11 following issues were mentioned: .Accounting for Government Grants is not maintained as per IAS 20. .Maintenance of Fixed Assets Register. .Physical verification. .Impairment Test of Fixed Assets. .Pension Fund not yet increased as per requirements as per IAS 19. .Aging of Receivables. .Non Compliance of Finance Act 2011.

See also FMA report section 10

6.7 Is the project subject to any kind of audit from an independent governmental entity (e.g., the supreme audit

Yes, the project is subject to audit by the Controller and Auditor General (CAG) office.



47


institution) in addition to the external audit?

6.8 Has the project prepared acceptable terms of reference for an annual project audit?

Not yet.

7. Reporting and Monitoring

7.1 Are financial statements prepared for the entity? In accordance with which accounting standards?

Yes. GAAP, and Bangladesh Accounting Standard (BAS).


7.2 Are financial statements prepared for the implementing unit?

Yes, Separate Financial Statements are prepared for each project independently.

7.3 What is the frequency of preparation of financial statements? Are the reports prepared in a timely fashion so as to useful to management for decision making?

Financial Statements are prepared annually as per WASA Act 1996.

7.4 Does the reporting system need to be adapted to report on the project components?

Yes the reports are prepared on the component basis for IMED and others stakeholders.

7.5 Does the reporting system have the capacity to link the financial information with the project's physical progress? If separate systems are used to gather and compile physical data, what controls are in place to reduce the risk that the physical data may not synchronize with the financial data?

No.

Such approach is proposed in FCB Project. Not clear when will be implemented / functional.

7.6 Does the project have established FM reporting responsibilities that specify what reports are to be prepared, what they are to contain, and how they are to be used?

The project has not yet started.

7.7 Are FM reports used by management?

The FM reports of projects are used by the management for decision making purposes.

Questionable; since the FM/MIS reports usually come 4-6 months late. See also FMA section 6

7.8 Do financial reports compare actual expenditures with budgeted and programmed

Yes variance analysis is done for proper implementation of budgetary control system at the DWASA.

Questionable



48


allocations?

7.9 Are financial reports prepared directly by the automated accounting system or are they prepared by spreadsheets or some other means?

Reports are prepared by using Tally Software ERP 9.5.

Simple set up, see also FMA report, section 11, and 5, 6

8. Information Systems

8.1 Is the financial management system computerized?

Yes Financial Management System including accounting and billing system are partially computerized from 2010.

Not fully operational yet, see FMA report section5, 6.

8.2 Can the system produce the necessary project financial reports?

Yes. ,,

8.3 Is the staff adequately trained to maintain the system?

Not yet up to the marks. More training are required.

8.4 Does the management organization and processing system safeguard the confidentiality, integrity and availability of the data?

Yes. Questionable, see also FMA section 5,6. IT systems mostly don’t even have proper virus protection

9. Revenue Information System

9.1 Is the billing for water and sewerage are done by manually or using software?

The DWASA developed a customaries billing software which has been using since 1st July 2010.

See also FMA report section 5, 6.

9.2 Are the staff and officers relating to revenue collection and management properly trained?

Yes training has been providing through DWASA Training Centre as well as DWASA Computer Centre regular basis.

,, ,,

9.3 How many billing staff/ officers are involved for DWASA billing?

No response received

9.4 What are the numbers and level of qualifications and experience of Revenue department staff and officers?


9.5 What books or register are maintained in the Revenue Offices for recording the revenue.

Ledger book for individual customers has been maintained but it will be replaced by software.

9.6 How bills are sent to the individuals consumers.

The bills are physically sent to the valued customer by the revenue inspector on monthly basis



49


9.7 Mention the number of consumers with classification and Zone-wise.

Please provide figure from the software.

9.8 What are the factors which should be considered to fix up the tariff rate?

Cost of production of water and capacity of the valued consumers.

Mainly political factors; presently not more than 5% annual increase allowed,

9.9 What are the problems the DWASA faces for keeping two rate Commercial and Residential regarding increasing the collection. What are the solutions to minimize the problem?

The gap of residential and commercial is very high. It should be minimized or even single rate to eliminate corruption and misuse of money.

Fee levels are BDT 6,66 /m3 for domestic, and BDT 21,17 /m3 for commercial/ industrial

9.10 What are the steps the DWASA has been taken to minimize the NRW or system loss / illegal connections


9.11 What are the steps the DWASA taken to ensure supply of water to the LIC or Low Income Community?


9.12 What is the collection rate compare to budgeted collection?

No response received Assumed/targeted at about 90%

9.13 What is the time frame to issue No Claim Certificates/ Outstanding Statement at the end of financial year?

Within completion of calendar year



1

APPENDIX 11: MEGHNA WATER QUALITY MONITORING PROGRAM40

Introduction:

Normally the quality of surface water does not meet drinking water quality standard due to presence of inferior substances, pollutants and treatment is needed before supply as potable water. Agricultural operations can be the source of non-point pollution in surface water with major causes of surface water pollution associated with farming and ranching being sediment and nutrients. Soil erosion and resulting suspension of sediment is the leading cause of surface water pollution. Silt is the leading cause of water quality problems in rivers. Although soil erosion is a natural process, it can be greatly accelerated and contents of polluting elements been increased by human activities such as farming, industries and urban runoff. Major sources of sediment include runoff from cropland, plantations and urban/suburban developments and are the key points for surface water pollution. A surface water treatment plant with the capacity of 500MLD is considered to be constructed by DWASA at Khilkhet area. As a result, under a feasibility study conducted in 2009-2010, four points were identified for potential surface water intakes for surface water treatment plant, which were:

• Point M1: Bishnondi,AraihazarUpazila,Meghna River (GIS Location: 23o 46' 2.5" N, 90o 43' 33.7" E) • Point M2: Badder Bazar, Sonargao -6km upstream of Meghna Bridge;

Meghna River (GIS Location: 23o 38' 57.0" N, 90o37' 36.10" E) • Point S1: Kanchan Bridge- 500 m Downstream from bridge; at Shitalakha

River (GIS Location: 23o 49' 40.8" N, 90o 33' 14.1" E) • Point S2: KaligonjKheyaGhat- 6 km downstream of Ghorashal Bridge at

Shitalakha River (GIS Location: 23o 55' 4.5" N, 90o 33' 58.2"E) The purpose of a water quality survey under the feasibility study was to make sure the acceptability and suitability of quality of surface water at these intake points by critical observation of monthly or/and seasonal variation of water quality and availability of water quantity. Based on the study, water quality of Bishnondi sampling spot (GIS Location: 23o 46' 2.5" N, 90o 43' 33.7" E) was found satisfactory. However, it is utmost priority for one full year water quality monitoring of Bishnondi intake point [Chaitankanda, Bishnandi, (Coordinates: 23o 45' 14.69" N, 90o 43' 18.07"E)] in preparation of the design and implementation of Khilkhet surface water treatment plant. Duration of the monitoring: One year (April, 2013 to March 2014) Methodology:

(a) Sampling point: The sampling point is located at Bishnondi. GIS location of

sampling points is 23o 45' 14.69" N, 90o 43' 18.07"E. (b) Water Sample:

40 Prepared by: J.T.A.Chowdhury; PhD

Water Quality Expert; DMC; DWASA Design and Management Consultants (DMC) of Dhaka Water Supply Sector Development Project (DWSSDP)



2

(i) 1st grab water sample should be collected from a depth of 0.5meter for every time. Measures some physicochemical parameters (Temperature, pH, Conductivity, Turbidity, Dissolved Oxygen, TDS and Ammonia) at field and record properly.

(ii) Sample in different depth: Made up of two equal parts collected at predetermined depth intervals between the surface and the bottom. In this case, another two grab sample (2nd & 3rd Grab) will be collected from equal depth interval and measure some physicochemical parameters (Temperature, pH, Conductivity, Turbidity, Dissolved Oxygen, TDS and Ammonia) at field for each grab sample separately and record properly.

(iii) A composite sample (combining portions of these three multiple grab samples) should be collected for detail chemical and microbiological analysis at laboratory. Composite sample should be composition of three grab samples. (iv) Measure physicochemical parameters (Temperature, pH, Conductivity, Turbidity, Dissolved Oxygen, TDS and Ammonia) for composite sample after immediate mixing of this three grab sample (1st, 2nd & 3rd Grab sample) at field and record properly.

(v) After field physicochemical measurements have been recorded, collect water sample for laboratory analysis both chemical and microbiological at the same location and same depth with same manner. It is mentioned that one grab sample (1st grab sample) and one composite sample (combining portions of 1st, 2nd & 3rd grab sample) should be collected for laboratory analysis during monthly sampling and seasonal variation for special pollutants sampling.

(vi) Measure salinity monthly basis during high tide at Meghna Bridge spot. Measure salinity in three different depths (See b i & ii).

(c) For other parameter analysis at laboratory, the volume of sample and the preservative are (1) four liter-without preservative;(2) two liter-with preservative with HCl (3) four liter- preservative with HNO3

(d) Other observation should be recorded properly according to a “Field Survey Form”.

The following points should be considered during sampling:

1. Sampling by Boat: Always collect samples upstream from the boat and as far away from the motor as possible, to minimize the chance of gas or oil contamination. Turn off the engine before collecting samples.

2. When samples are collected during abnormally high or low flow, the abnormal conditions will be recorded in the field logbook and on the observation lines of the sample data form. It is important to include flow severity and days since last rainfall rain information with each sampling event. This information is very useful in interpreting the data.

3. Upon arrival at the sampling site, record visual observations on the appearance of the water like color, unusual amount of suspended matter, debris or foam etc and other information related to water quality and water use.

4. Weather such as heavy rains, cold front, very dry, very wet etc information should be recorded.



3

5. Unusual incidences like presence of hydrogen sulfide, sewage and biological activity like excessive phytoplankton or algal growth should be recorded during sample collection and testing at field.

6. The sample location should be strictly maintained in the same place during the whole period of this survey. Samples should not be collected at the time of rain shower.

7. The required instruments to be used are Multi parameter analyzer, Turbidity meter, Ammonia kit, Flow meter, Depth measurement meter, surface water sampler, HDPE sample bottles, acid, cool box etc.

Sample Container & sample volume (A) Sample for bacteriological analysis: Sample container should be new, unused

Whirlpack bag or a sterile plastic or glass bottle. The sample container shall never be pre-rinsed. When submerging the sample container, take care to avoid contamination by surface scum. The surface film is enriched in particles and bacteria and is not representative of the water mass. In case of whirlpacks squeeze out the top one inch of water from the bag and whirl the bag to seal. The sealed bag must retain at least 200 ml of sample but with leaving a small pocket of air. This airspace will help mix the sample when it is shaken just before the filtration.

(B) Sample for metal and non-metal analysis: Metals-in-water samples collected for

status monitoring should not be collected during periods of abnormally high turbidity. Samples collected during high turbidity are unstable in terms of soluble metals and it is difficult to collect a representative grab.

The sample container should be a one liter HDPE bottle. For mercury use only 250 ml glass or Teflon bottles. All bottles should be pre-cleaned, pre-acidified. These containers and preservative are rigorously supported by QC protocols and are best for routine monitoring. Sample containers and lids are to be soaked in a solution of 5-10% metals grade nitric acid in de-ionized water and rinsed with metals-free de-ionized water. The containers and tubes are stored and transported in dust-free containers such as a plastic cool box to laboratory.

(C) Organics-in-Water Sample: One litre of water sample should be collected for TOC

analysis. (D) Pesticides/ Herbicides: The sample container for pesticides and herbicides is to be

a new, clean, unused glass jar with a Teflon-liner inside the cap, and pre-rinsed with pesticide-grade hexane, acetone, or methylene chloride. Collect one liter of water for each of the two sample types (Organophosphorus Pesticides & Organochlorine Pesticides). Minimize the air space in the top of the jar. Preserve immediately after collection by placing on ice in darkness. In addition to other sample information, label the jar “ORGANICS – Organophosphorus Pesticides or Organochlorine Pesticides,” (depending on sample type).

(E) Sediment sampling and testing: Four grab samples should be collected at different

depth and TSS should be tested at laboratory. Involvement of DWASA Lab

DWASA laboratory can provide all sterile sampling bottles (autoclave bottles), bottles with acid preservative, standardize of field equipment, recheck of sampling system etc. Laboratory people can also visit sampling site during sampling to observe proper sample collection and can provide suggestion if necessary.



4

Frequency of sampling and test parameters

Sampling Frequency Test parameter

Monthly samples: Sample should be taken/tested on a monthly basis and the monthly basis sampling periods are April/2013 to March/2014. Monthly basis sample should be taken end of each month. Some parameter should be tested in the field and few parameters should be tested in the laboratory.

Field test: Temperature, pH, Salinity, Conductivity, Turbidity, Dissolved Oxygen (DO); TDS and ammonia by using portable instruments/field kit at field and record in the field survey form. Laboratory test: Nitrate, Nitrite COD, TSS; BOD5; Phosphate

Hourly sampling for daily variation: Hourly samples will be collected four times during the sampling period: (a) 2 times during dry season and (b) 2 times during wet season

Field test: Water level; Temperature, pH, Salinity, Conductivity, Turbidity, DO; TDS and Ammonia by using portable instrument/field kit at field and record in the field survey form.

Seasonal variation for special pollutants:

• Pre monsoon (hot season-March to May): mid-April/13

• Rainy season(June to October): mid-July/13

• Cool dry season(November to February): mid-December/13

• Starting of pre-monsoon next year: mid-March/14

Laboratory test:; Algae, Alkalinity ;Arsenic ; Barium, Cadmium, Lead, Mercury, Chloride; Chromium (Hexavalent); Coliform (Fecal); Suspended Solid(S.S); Total dissolved solids(TDS); Total Organic Carbon(TOC); Pesticides (Organo Chlorine) ; Pesticides (Organo Phosphorus) ; Oil & Grease



5

Total number of parameters

Parameter Monthly Daily variation Seasonal Total

No of tests Number Total Number Total Number Total

Physicochemical parameters for field test

Temperature 4 48 4 384 - - 432 pH 4 48 4 384 - - 432 Salinity 4 48 4 384 - - 432 Conductivity 4 48 4 384 - - 432 Turbidity 4 48 4 384 - - 432 DO 4 48 4 384 - - 432 TDS 4 48 4 384 - - 432 Ammonia 4 48 4 384 - - 432

Laboratory test

Alkalinity 4 8 8 Arsenic 4 8 8 Barium 4 8 8 BOD 12 24 24 Cadmium 4 8 8 Chloride 4 8 8 Chromium +6 4 8 8 COD 12 24 24 Coliform (fecal) 4 8 8 Lead 4 8 8 Mercury 4 8 8 Nitrate 12 24 24 Nitrite 12 24 24 P / PO4 12 24 24 Oil & Grease 4 8 8 TSS 4 8 8 TDS 4 8 8 TOC 4 8 8 Pesticides (Organo P) 4 8 8 Pesticides (Organo Cl) 4 8 8 Algae 4 8 8 *Note: (1) Field test =>Number of Grab sample=3 & Number of Composite sample=1; Total sample#4

(2) Laboratory test=>Number of Grab sample=1(1st grab sample) & Number of Composite sample=1; Total

sample #2

(3)Daily variation: 4(number of sample) X 4times X 24hours = 384



6

Methods, instruments, and laboratory test cost

The methods and instruments for different parameter analysis and sample collection should be followed as per “Standard Methods” For the Examination of Water and Wastewater- APHA (American Public Health Association), AWWA (American Water Works Association) & WEF (Water Environment Federation). Methods and major instrument areas below as per

APHA

* Test cost ref. BCSIR; BARI

Sl# Parameter Major equipment for test Test cost

(in Tk)

01 Alkalinity Ion meter/ UV-Visible Spectrophotometer 800

02 Arsenic Atomic absorption spectrophotometer (HVG) 1,000

03 Barium Atomic absorption spectrophotometer 1,200

04 BOD Incubation/Titration/DO meter 2,000

05 Cadmium Atomic absorption spectrophotometer 1,500

06 Chloride Ion chromatograph (Anion) 900

07 Chromium +6 Ion chromatograph (Cr+6) 1,500

08 COD COD Reactor, burette stand. 2,000

09 Coliform (fecal) Autoclave, incubator, filtration unit. 1,300

10 Lead Atomic absorption spectrophotometer 1,300

11 Mercury Atomic absorption spectrophotometer[MVG(Cold Vapor Generation)]

1,500

12 Nitrate Ion chromatograph (Anion)/UV-Visible Spectrophotometer

1,500

13 Nitrite Ion chromatograph (Anion)/UV-Visible Spectrophotometer

1,500

14 Phosphate Ion chromatograph (Anion)/ UV-Visible Spectrophotometer

1,300

15 Oil & Grease Solvent Extraction 1,500

16 TSS Balance, Dehydrator, Desiccators, filtration unit

800

17 TDS Balance, Dehydrator, Desiccators, filtration unit

800

18 TOC TOC analyzer 2,500

19 Pesticides(Organo Cl) GC-MS 10,000

20 Pesticides (O P) GC-MS 10,000

21 Algae - 2,000



7

Sample transportation

The time between sampling and analysis should be kept to a minimum. Samples should be transported to concerned laboratory within forty-eight hours of collection. Budget:

Items QuantityUnit price (Taka)

Total price (Taka)

1. Cool Box (two box needed) 2 10,000 20,000

2. Ammonia Kit 4 15,000 60,000

3. Hydrochloric acid (One bottle) 1 8,000 8,000

4. Nitric Acid (One bottle) 1 8,000 8,000

5. HDPE Sample bottles (50bottles) 50 300 15,000

6. *Laboratory test cost LS - 508,000

7.a Man power cost-Experience on water quality [2X20=40 man-day, 4000Tk/man-day]

40 4,000 160,000

7.b Helping hand for Sample carrying

[2X20=40 man-day, 1000Tk/man-day

40 1,000 40,000

8.aTransportation cost: Motor vehicle [Duration=20 days, 4000Tk/day]

20 4,000 80,000

8.bTransportation cost: Boat [Duration=20 days, 1000Tk/day]

20 1,000 20,000

Subtotal(A)=919,000

15% overhead cost (B)=137,850

Total cost(A+B)=1,056,850

$13,210



8

*Laboratory Test Cost

Test parameter # of test Test cost /sample

Total Taka

1.Alkalinity 8 800 6,400 2.Arsenic 8 1,000 8,000 3.Barium 8 1,200 9,600 4.Cadmium 8 1,500 12,000 5.Chloride 8 900 7,200 6.Chromium(Hexavalent) 8 1,500 12,000 7.COD 24 2,000 48,000 8.BOD 24 2,000 48,000 9.Coliform (Fecal) 8 1,300 10,400 10.Lead 8 1,300 10,400 11.Mercury 8 1,500 12,000 12.Nitrate 24 1,500 36,000 13.Nitrite 24 1,500 36,000 14.Phosphate 24 1,300 31,200 15.TSS 8 800 6,400 16.Total dissolved solids 8 800 6,400 17.TOC 8 2,500 20,000 18.Pesticides (Organo Chlorine) 8 10,000 80,000 19.Pesticides (Organo Phosphorus) 8 10,000 80,000 20.Oil & Grease 8 1,500 12,000 21.Algae 8 2,000 16,000 Total Taka=508,000 $6,350

Data entry: All data should be entered properly for analysis. DMC will conduct a monthly meeting (before next sampling) to review the field data, sampling situation etc and can take any action if necessary.



9

Field Survey Data Form

DWASA Surface Water Quality Monitoring Program 1. Sample location:

Chaitankanda, Bishnondi, Meghna River (GIS Location: 23o 45' 14.69" N, 90o 43' 18.07"E)

2. Field Observations:

Upon arrival at a sampling site, record visual observations on the appearance of the water and other information related to water quality and water use as bellow:

Parameter Observation

a. Water Color Greenish /reddish / yellowish / Muddy / Colour less

b. Water appearance Unusual amount of suspended matter / debris / foam

c. Rain fall Heavy / Medium/ Low / None

d. Day Cloudy day/ very dry/very wet

e. Unusual Odors Hydrogen sulfide odor/ musty odor /sewage odor/ none

f. Biological Activity Excessive growth of algal / Phytoplankton/ others………./ none

3.A Water quality test parameters (Monthly)

Sample

Date

&

Time

Depth

(m)

Water Quality Parameter

Temp,0C

pH Salinity

ppm

Cond.

µmohs

/cm

DO mg/L

Turbidity

NTU

TDS mg/L

NH3,

mg/L

1st grab

sample

2nd

grab sample

3rd

grab sample

One composite

Sample

Temp=Temperature; Cond=Conductivity; DO=Dissolved Oxygen; NH3 = Ammonia;



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3.B River water Salinity test (Monthly) at Meghna Bridge spot during high tide

Sample location

Measurement time Parameter Concentration present

(ppm)

Meghna Bridge During high tide Salinity

4.A Water quality test parameters (Daily variation-1st grab sample)

Time Date Depth

(m)


Temp,

0C

pH Salinity

ppm

Cond.

µmohs

/cm

DO

mg/L

Turbidity

NTU

TDS mg/L

NH3

mg/Ll

4.B Water quality test parameters (Daily variation-2nd grab sample)

Time Date Depth

(m)


Temp,

0C

pH Salinity

ppm

Cond.

µmohs

/cm

DO

mg/L

Turbidity

NTU

TDS mg/L

NH3

mg/Ll

4.C Water quality test parameters (Daily variation-3rd grab sample)

Time Date Depth

(m)


Temp,

0C

pH Salinity

ppm

Cond.

µmohs

/cm

DO

mg/L

Turbidity

NTU

TDS mg/L

NH3

mg/Ll

4.D Water quality test parameters (Daily variation-Composite sample)

Time Date Depth

(m)


Temp,

0C

pH Salinity

ppm

Cond.

µmohs

/cm

DO

mg/L

Turbidity

NTU

TDS mg/L

NH3

mg/Ll



11

5. Any other observations/comments: 6. Sample volume and preservative:

(a) Non-preservative sample – four liter - Collected/ Not collected (b) Preservative-HCl – One liter - Collected/ Not collected (c) Preservative-HNO3 - Two liter - Collected/ Not collected (d) Preservative-H2SO4 –One liter - Collected/ Not collected

Name: ___________________________ Designation: ______________________ Signature: ________________________ Date: ____________________________



12

Sampling program for Surface Water Quality Monitoring-Meghna River Sampling period: April/2013 to March/2014 Sampling April/13 May/13 June/13 July/13 August/13 Sept/13 Oct/13 Nov/13 Dec/13 January/14 February/14 March/14

Monthly

Hourly

Seasonal



1

APPENDIX 12: GENDER ACTION PLAN

Contents

Page Abbreviations and Acronyms

A. Introduction 1 B. Methodology 1 C. Supporting policies 2 D. The objectives of the Gender Action Plan 2 E. Water and associated gender issues 2 F. Women’s participation in Operation and Maintenance of water supply 4 G. Women’s involvement in construction related works 4 H. Priority investment for waste water management system 5 I. Project Management and administration and institutional capacity building 6 J. Probable impacts and benefits of the project 6 Gender Action Plan 8

List of annexes: Annex 1: Field exploration findings regarding poverty and gender issues in targeted four

areas of Dhaka metropolitan city Annex 2: DWASA, LIC and NGO intervention Annex 3: Background information on intake area of Narayangonj Annex 4: ADB’s policies and frameworks for gender and development



2

Abbreviations and Acronyms ARBAN = Association for Realization of Basic Needs ASD = Association for sustainable development in Bangladesh BASA = Bangladesh association for social advancement BLAST = Bangladesh Legal Aid and Services Trust CBO = Community Based Organization DSK = Dustha Shastha Kendra DWASA = Dhaka Water Supply and Sewerage Authority FGD = Focus Group Discussion IGA = Income Generating Activities LIC = Low Income Community MODS = Maintenance Operations Development Services NBUS = Nagar Bostibasi Uannayan Songstha NDBUS = Nagar Daridra Bostibasi Uannayan Songstha NGO = Non-governmental Organization PSTC = Population Services and Training Centre SJP = Shobar Jonno Pani WatSan = Water and Sanitation WSUP = Water Supply for Urban Poor



3

A. Introduction

1. Bangladesh is becoming rapidly urbanized. According to the World Bank41 (2010), urban population growth rate is around 6%. One reason is that poor people migrate to Dhaka because of frequent natural disasters. Floods, droughts, and cyclones cause riverbank erosion, which destroys the agricultural outcomes every year. Another reason is that lack of employment opportunities in rural areas push people to the cities. Most migrants end up working in marginal employment at very low wages and live in squatter settlements and slums with little or no basic services.

2. Slum settlements in Dhaka are highly congested, population densities range from 700 to 4000 people per acre and up to 10 people often live in houses comprising of only a single room. Houses are of poor quality and are made of bamboo, straw, low quality wood and tin sheets (Akash and Singha, 200342). Some houses on the outskirts sit on bamboo stilts over stagnant water and are extremely vulnerable to seasonal flooding. Korail slum is Dhaka’s biggest squatter settlement; it is an extensive settlement having over 100 acres of public land and is home to 120,000 residents. Water supply to these areas is extremely poor, and does not meet the requirements of the urban poor (Jinah, 200743).

3. As in some other developing countries, the women and girls of Bangladesh have less access to health, education, ownership of assets, infrastructure (market, toilet facilities, tube well, tap water, water reservoir), and other major services. Women are the primary collectors, transporters, and users of domestically consumed water. They spend a significant amount of time in collecting water for drinking, cooking, and washing. They also manage household hygiene. However, women’s participation and their views are rarely reflected in institutional arrangements for the development and management of water supply and sanitation and other water resources. Focusing on gender mainstreaming, the “Khilkhet Water Treatment Plant Project” is expected to improve water supply for the people of Uttara, North Badda, Gulshan, and Mirpur areas in Dhaka. In parallel with the improved water supply, DWASA has also planned improved sewage collection, treatment, and disposal, which, together with more abundant water, is expected to improve the health of affected residents. At the same time, a considerable number of households will be affected by the construction of this water supply project as well as the construction of the improvements to the sewerage system, albeit, temporarily. The project has three components: i) surface water supply augmentation ii) institutional capacity development. General citizens in Dhaka are the primary beneficiaries of the project. The poor and the socially excluded can also benefit from improved service level of the water supply services and new connection to the piped network. Therefore, the poorer sections of the community will also benefit from the project, including female-headed households.

B. Methodology

4. We conducted a total 17 focus group discussions (FGDs) with men and women in slums, squatter settlements, private residences, and apartment houses, separately with male groups and female groups. We also conducted semi-structured interviews under poverty and gender component in Uttara, Badda, Gulshan, and Mirpur areas as well as in intake area where construction work will take place (Table 1). The targeted four areas of Dhaka have been explored through the partner NGOs of Dhaka Water Supply Sector Development Project (DWSSDP), funded by Asian Development Bank. The NGOs DSK, Catalyst, and UDOY are mainly carrying out public awareness campaign on economic use of water under

41

The World Bank, 2010, World Development Report 2010-Development and Climate Change 42

Akash & Singha, 2003, Provision of water points in low income communities in Dhaka, Bangladesh. Paper

prepared for the civil society consultation on the 2003 Commonwealth Finance Ministers Meeting 43

Jinnah, 2007, Case study: Rights of water connections for urban slum dwellers in Bangladesh



4

the project. Moreover, these NGOs have experience of implementing projects on water supply in low-income communities. Shobar Jonno Pani (SJP) and PSTC projects also have been reviewed. According to the ADB’s Handbook on Social Analysis (2007) the following issues related to poverty, social and gender analysis have been explored: (i) type of residence the community people live, (ii) headship of the household, (iii) household assets, (iv) type of employment, (v) income range and expenditures, (vi) access to education, (vii) food intake, (viii) access to health services, (ix) practice of early marriage and dowry, (x) gender roles and responsibilities at household and community level (who does, what), (xi) vulnerabilities and hazards related to urban life, and (xii) and access to water and sanitation. We also discussed the following topics specifically related to water supply: (i) availability, (ii) quality, (iii) quantity, (iv) cost, (v) who pays to whom, (vi) water sources, (vii) collection and storage, (viii) water transport, (ix) health hazards related to water, (x); willingness to pay, (xi) women’s involvement in the operation and maintenance of water and sanitation facilities, and (xii) women’s involvement in construction related laboring work. Moreover, we reviewed the involvement of community-based organizations (CBOs) and NGOs with water supply projects and their maintenance as well as poor people’s access to the service. (Annex 1)

C. Supporting policies

5. This Gender Action Plan (GAP) is consistent with the policies and strategies of the Government of Bangladesh as well as aligned with the ADB’s Poverty Reduction Strategy, Policy on Gender and Development (Annex-4)

D. The objectives of the Gender Action Plan

6. The objectives of the Gender Action Plan are

(i) To promote women’s participation in project planning and implementation (ii) To maximize women’s access to project benefits (iii) To provide opportunities to increase women’s skills, incomes and participation in

decision-making process E. Water and associated Gender issues

7. Gender division of labor. Mostly women and girls are responsible to fetch and store water. Adolescent girls work in the home with chores that include: (i) washing, (ii) cooking, (iii) storing water, and (iv) looking after young siblings. Some work as helpers in nearby apartments or government quarters. Many of them accompany their mothers and help them to finish work easily and early. Sometimes, when their mothers get sick, they continue work instead of their mothers. Men are generally involved with earning activities and rarely seen as the collectors of water. As one female respondent put it: “men do not work at home, so they never think how to manage water; they just know that we will manage it somehow”. Nevertheless, a few men reportedly help their female household members to fetch water, particularly when the women remain outside of the home due to employment.

8. Access to water and sanitation. Water and sanitation are delivered through pipe connections to homes, public taps, and tube wells. Generally people living in slum areas do not have access to legal water supply and sanitation. These basic services are limited because most slums are not recognized as legal lands and the utility companies were reluctant to provide water connections to people without land tenure. Therefore, they have to depend on the illegal water lines with high charge which are mostly local mastaans or musclemen.



5

9. Cost. Every poor or hardcore poor44 who lives in slums or other kinds of settlements pays for water. Sometimes, the cost for water is included in the house rent and sometimes, it is separate. The range of the cost for water varies from BDT150 to 300 per month per household. Some slum dwellers reported paying as much as BDT2 per bucket of water or BDT5 for a 5 liter jar. When they bought the water from outside their area, they also pay the cost for van or rickshaw.

10. Vulnerabilities related to water availability: Water related diseases are responsible for 24% of all deaths and gastroenteritis and diarrheal diseases kill 110,000 children below the age of five every year (Water Aid45). Generally, slum dwellers on privately owned lands enjoy better services than those on government owned lands. Sometimes availability of water depends on the willingness of the land owner. Almost invariably, we were told by slum dwellers that water is available only once in a day, despite their regular payments. Moreover, there is no fixed time for water supply, which creates suffering, is time consuming, and creates conflicts among the poor users. For instance, as all adult men and women are involved with earning, they have to leave for work at a certain time. If they miss the only water supply time then they cannot take a bath and can hardly manage water for cooking. In that case the inhabitants of slums often help each other and store water for absentees, which is another example of coping. Sometimes, however, other people use the collected water which generates quarrels among them. The women of the Korail slum in Gulshan reported that each household gets access to water supply for 7 minutes irrespective of their needs. Therefore, sometimes people wait in a long queue to receive their ration of water. They have to rely on unauthorized water supplies carried in rubber pipes snaking through the narrow lines. These services are operated by powerful individuals who also facilitate illegal connections to essential services such as electricity. All slums are controlled by mastaans who have different levels of authority and hierarchy. Many mastaans are reported to have close connections with municipal authorities as well as the police in the neighborhood46, allowing powerful local individuals to provide this water service for a fee by circumventing the system. Some females in Badda reported that they have to wait in queue till mid-night for cooking water collection because sometimes water is available only once a day. They also reported that they cannot get access to gas facility for cooking from 8 am to 1 or 2 pm. They observed that gas pressure becomes lower in the winter season.

11. Quantity and quality of water. The quality of water pumped from deep tube wells is considered better than water supplied illegally and through long pipes. There are some problems in quantity during dry season and in the rainy season, the water is easily contaminated. The slum dwellers in the Korail slum in Gulshan reported that as the slum is surrounded by the lake, their rubber water pipes pass through the lake water and when the pipes spring a leak, which happens frequently, the lake water pollutes the piped water. This forces them to buy water from vendors at high cost.

12. Coping strategies related to water. The women who work as domestic helpers bring water by bottle or jar from the house where they work. They also buy from vendors at high cost. The women have to buy and bring water from distant places (house, rickshaw garage, office) particularly in the dry season when they get less water in their water connection. We were told that sometimes, some house owners get annoyed to provide water to them.

44

“Hardcore poor” consume fewer than 1805 calories per day (WFP, Bangladesh Bureau of Statistics) 45 www.wateraidamerica.org/includes/.../bangladesh_info_sheet.pdf

46 The World Bank, 2007. Dhaka: Improving Living Conditions for the Urban Poor, Bangladesh Development

Series, Paper no.17



6

13. However, this scenario is somewhat different in some slums and squatter settlements where the community people have access to legal water connections through NGO intervention. The NGOs with minimum contribution by CBO/community, usually 10%, have been installing community-managed water points connected to the main water supply of Dhaka Water Supply and Sewerage Authority (DWASA). Some NGOs have been providing water and sanitation services to the low income communities without any contribution of the community people. For example, Water Supply for Urban Poor (WSUP) and his partner organizations establish the water points and carry out the construction works without any cash contribution from the community people. These NGOs have performed as intermediary between the community people and the utility service providers (DWASA and Dhaka City Corporation). Now after formation of a Community Based Organization the slum dwellers or people in squatter settlements can apply to DWASA directly for water points.

14. In addition, the demand control and public Awareness Campaigning program of DWSSDP in DWASA zone have been carrying out by the six NGOs are household visit, community meeting, tea stall meeting, mother’s committee meeting, court yard meeting, awareness campaign in schools and dissemination of sticker, poster and leaflets on the wastage of water at household level, why people should stop misuse of water and how should they work to save water in daily life. School program has provided a great impact on community support. The NGOs have targeted the persons particularly who are the main user of water for different purposes. For example, female members of the household and the housemaids who consume water for cooking, washing, and cleaning are consulted. The quarterly reports show that the people are becoming aware of economic use of water and motivated to conserve water.

F. Women’s participation in Operation and Maintenance of water supply

15. Generally, we observed that in most cases women are excluded from participation for planning and implementation of development interventions, so rarely their views and voice could reach the planners. However, under such circumstances, the NGOs involved them in the water management committee as much as possible as traditionally women take responsibility for obtaining water for their households. Originally mixed management committees were formed. Unfortunately, gender relations in Bangladesh tend to be highly unequal and men usually dominated these mixed committee. Moreover, availability of more women than men at home, their sincerity and active performance which are important for operation and maintenance of the services also have been considered. In the end, water management committees only with women were set up in every community, assisted by separate advisory committees consisting of men. As a result, it has been acknowledged in slums and squatter settlements as well as by the NGO officials that the water points are acting successfully due to the involvement of women, who carefully carry out their responsibility including cleaning the reservoir after a certain period of time, repairing minor technical damages, collect bills, monitor and keep records of meter reading, and repaying NGOs capital investment (if community contribution is included). Capacity development of the community people is necessary particularly the CBO needs to strengthen to make the water supply sustainable.

G. Women’s involvement in construction related works 16. The poor and destitute women are involved in various kinds of wage laboring jobs in the areas where construction work for the project will take place. They work others as house maids and in agricultural fields as wage laborers as well as earth cutting and carrying works in road construction and unskilled laboring works in construction works. Some of them even migrate to Dhaka and other nearest places to work as house maids, construction workers (earth cutting), garment worker, running small trade as hawkers, and so on. They expressed



7

their willingness to work as unskilled laborer in construction of roads and pipelines and other infrastructure.

17. In addition, both men and women in low income communities of the four targeted areas of Mirpur, Badda, Gulshan and Uttara stated that they are always likely to contribute in kind for installation of water service. They worked in earth cutting, carrying construction materials, plumbing, and other works that are available at local level for installation of water points.

H. Priority investment for waste water management system 18. The sewerage system of Dhaka City was initiated in 1923 but the major part of the northern side of Dhaka including Mirpur, Mohammadpur (part), Shamoli, Kollyanpur, and Uttara are not connected to the only sewerage system that flows to the Pagla Sewage Treatment Plant. Lack of resources as well as lack of awareness of the city dwellers are the major hindrance in the operation of the sewerage system. The disposal of different types of solid waste such as green coconut husks, empty plastic bottles, polyethylene bags, and other solid wastes into manholes and sewer lines causes the system to become blocked and as a result, sewage overflows from the manholes upstream of the blockage. DWASA covers 20% of total sewerage in Dhaka and the sewerage department of DWASA particularly takes care of the rehabilitation of the old lines depending on community demand and in some cases with recommendation by their own inspection team. In rehabilitation construction works, there are only men who work as unskilled laborer as it requires working in unhygienic environment.

19. So far these kinds of projects mostly have been designed and implemented without community involvement or consultation. One national NGO introduced a project on waste water management a few years back; however, it was unsuccessful. . Recently, DSK has undertaken a pilot project on waste water management named “Combining rain water harvesting and waste water reuse for water supply in urban slums of Dhaka”, in Mirpur, Bouniabadh, following a previous bio-gas project implemented by the same NGO. The project started in July 2012 and was jointly funded by Every Drop Matters (EDM)/Coca-Cola and UNDP. The outputs of the project are: (i) availability of rain water for drinking purposes in eleven schools with a total of 7000 students at Bauniabadh; (ii) fecal pollution of four ponds and one lake at Bauniabadh slum has stopped; and (iii) 20 lanes and 5 block CBOs and one water body management committee were formed/revised to enhance community capacities. Community people are involved in local supervision, procurement of construction materials, fund generation for operation and maintenance. Women occupy 50% of leadership positions.

20. Drainage system. There were some canals, which were sufficient for storm water drainage in Dhaka in Paribag, Dhanmondi, Begunbari, Dholailhal, Debdolai, Segunbagicha, Arambag. These canals were used for water navigation and plenty of wetland and low land in the city were used as reservoirs for rain water. However, the drainage systems have become severely damaged by the failure to consider the environmental impact of filling in of wetlands and by implementing different projects which have narrowed and in some cases stopped the free flow of canals in some places by various developers. 80% of the storm water drainage is managed by the DWASA and 20% by the Dhaka City Corporation in Dhaka metropolitan city. Storm water is directed to the canals and rivers through pipelines and so far, there is no community people’s involvement in operation and maintenance of the service.

21. The PPTA team has reviewed the Sewerage Master Plan of DWASA and focused on some priority projects for possible preparation under this project. None of the priority projects



8

were suitable for inclusion in this project and consequently they have not been taken into consideration in this study.

I. Project Management and administration and institutional capacity building 22. The objective of the institutional assessment component for the PPTA is to undertake a capacity assessment of DWASA and if required proposes ways and means to strengthen the capacity of DWASA and related agencies. Specifically, the objective is to enhance competence levels; i.e., the skills and ability to cope with the required practices and technology that will allow the sectoral achievement of the government’s goal, which is improved access to more reliable and sustainable water supply for greater Dhaka City.

23. Timely establishment and involvement of appropriate institutions would significantly facilitate achievement of the project objectives. Several institutions, largely government departments, are key players in the establishment and operation of the Khilkhet WTP project and cooperation and timely implementation of each institution’s activities will be a deciding factor for timely delivery of project outputs/milestones. The main institutions involved in the Khilkhet WTP project activities will be:

(i) DWASA (Ministry of Local Government, Rural Development and Cooperatives) (ii) Rajuk(Ministry of Housing and Public Works) (iii) Directorate of Land Records and Survey (Ministry of Land) (iv) LGED (Ministry of Local Government, Rural Development and Cooperatives) (v) BWDB (Ministry of Water Resources) (vi) DoE (Ministry of Environment and Forests) (vii) Local Level authorities 24. DWASA at the central level through its field offices at the project level will have the overall responsibility for project implementation, coordination and planning, internal monitoring, and overall reporting. DWASA will depute officials in the central office and in the field office/PMU who will be responsible for the implementation of the project activities. The gender intervention will be:

(i) All staff members of the project receive gender training and all training materials will be gender sensitive

(ii) PMU will have gender focal person (iii) Female candidates having equal quality with male should be prioritized for

project and Implementing Agency/Executing Agency positions (iv) At least 20% of total staff should be women (v) NGO field staff teams should have at least 1 female member in each 3-

person team (vi) Sex-disaggregated baseline data and gender analytical information as part of

any preparatory surveys, feasibility studies, assessments and reports will be available

J. Probable impacts and benefits of the project 25. Project interventions are expected to have significant impact on women’s inclusion in economic development by safeguarding environment and livelihoods. The Gender Action Plan for Khilkhet WTP project has been prepared in a generic manner. It is a flexible document and subject to readjustment and modifications based on situation analysis and lessons learned from various interventions. It addresses the following:



9

(i) Women’s participation in project preparation, planning and implementation, monitoring and evaluation of project interventions, including operation and maintenance;

(ii) Improved access to water – especially the expansion of piped water supply systems to poor households – will reduce women’s time spent on household water collection;

(iii) Expected improvement in health outcomes due to quality and improved water supply will reduce women’s time spent on caring for sick family members;

(iv) Women’s increased access to water supply and women’s reduced daily time spent in water collection will enable women to invest in IGA activities or rest;

(v) Access to quality water will reduce water borne diseases; (vi) Reduction in women’s time spent on household chores could potentially

increase women’s economic opportunities, resulting in benefits for women and their families and potentially contributing to women’s empowerment;

(vii) Increase women’s skill/practical knowledge on operation and maintenance of water sources and grow leadership;

(viii) Provide opportunities to secure alternative livelihoods for the affected and severely affected women through providing need based income generating skills training and support services;

(ix) Employment generation for destitute men and women through construction related works;

(x) Increase gender equity supportive facilities in the workplace including separate toilet facilities for women, arrangements for children including breast feeding and child care facilities;

(xi) Reduce discriminatory wages of men and women for work equal work and ensure services as per core labor standards;

(xii) Improve participation of women as agents for change like facilitators, staff and consultants;

(xiii) Improve gender awareness amongst the staff of DWASA at all levels, relevant staff of partner organizations as per Training and Capacity Building Plan;

(xiv) Improve capacity of executing and implementing agencies to plan and implement gender actions in development interventions;



10

Gender Action Plan Activities Indicators and targets Responsibility Time

Output 1: Surface water supply augmentation Intake area:

1.1 Inform local affected women and men living in the project areas where construction work will take place about the proposed intervention.

1.2 Ensure payment of equal compensation to households headed by women according to resettlement framework

1.3 Carry out motivational session/meeting/gathering for information on the types of employment available; timeframes and pay rate; the modality of applying for the work where women directly and indirectly will get preference for project work. Ensure that consultation sessions in the affected areas regarding construction work, land acquisition and resettlement, includes female landowners, female heads of households and other affected women from other groups.

1.4 Include relevant clauses in the bidding documents on core labor standards (equal pay for work of equal value, occupational health and safety, water supply, sanitation, segregated shelter and facilities) and monitor their implementation.

1.5 Employ women as unskilled and semi-skilled laborers in earth work, construction and maintenance work and enforce the labor standards including “equal pay for work of equal value, occupational health and safety, water supply, sanitation, segregated shelter and facilities.

1.6 Integrate sectoral gender issues in foundation training for construction and maintenance work where applicable

1.7 Orient all PMU/field level staff on gender aspects of resettlement and core labor standard and their roles in monitoring

1.8 Orient all contractors on gender-related aspects of core labor standards Monitor progress in the implementation of the Gender Action Plan and report periodic progress

• Organize 5 consultations at the community

level during design and implementation and, and all community and affected household consultation will ensure at least 30% women participation

• 100% affected female headed households will be aware of entitlements and compensation

• Destitute women will be prioritized for construction employment with equal pay for men and women for work of equal value

• At least 30% women will be recruited as unskilled laborer in construction work

• Disadvantaged/vulnerable women APs will receive special assistance as per RP

• Availability of water and sanitation facilities for women at all construction sites

• All job advertisements for civil works and for utility agency include sentence on “applications by women encouraged”

• All PMU/field level staff aware of gender aspects of resettlement and core labor standards and monitor implementation

• DWASA as key executing agency

• Land Acquisition and Resettlement Plan (LARP)

Year 1-



11

Water augmentation service areas: 1.9 Arrange community consultation in targeted service

areas on incremental water services/transfer, construction, O&M of water supply schemes, connection fees, tariffs and other charges

1.10 Undertake awareness programs on water conservation and hygiene education through workshops, focus group discussions, community consultation and dissemination of posters, leaflets

1.11 Establish individual water connection for the community people

1.12 Install communal taps/water points which are managed by the low income community people

1.13 Establish or strengthen CBOs or committees for the management, O&M of water supply services in LIC

1.14 Conduct training on the management and O&M of community water supply Female headed households have access to safe and reliable water supply

• Arrange…20 consultations ensuring 30% of

women representation in all community consultation

• Women will constitute 50% of participants in consultation on design and implementation of water points in LICs

• 480 awareness raising programs organized in 240 locations with 50% women participation

• Households headed by women access water supply through 100 community water supply points

• 100 CBOs formed/strengthened in 20 LICs with 50% women members

• Women will constitute 50% of the leadership positions in all CBOs and water management committees

• 2 women in each Water Management Committee will be trained on O & M of community water points

DWASA and Implementing NGOs

Year 1

Output 2: Capacity development of DWASA

3.1 Training needs assessment (organizational diagnostics) and training on sectoral gender issues and gender mainstreaming for implementing agencies including “Community Programme and Consumer Relation Division” of DWASA

3.2 Recruitment of adequate staff for the “Community Programme and Consumer Relation Division” of DWASA

3.3 A Gender and Social Development Consultant will be included in the Consultant Team to support the PMU

• All staff members (M/F) of IAs receive gender training and all training materials integrate gender aspects

• Women candidate having equal quality with male will be prioritized for project and IA/EA positions. (At least 20% of total staff to be women)

• The “Community Programme and Consumer Relation Division” will receive trainings for capacity development and will have

PMU of DWASA

Year 1



12

and the “Community Programme and Consumer Relation Division”

3.4 Identify PMU gender focal point 3.5 Conduct gender sensitization training for relevant staff

of partner NGOs and contractors

3.6 Partner NGOs specify targets for staffing 3.7Gather baseline sex-disaggregated data and gender

analytical information as part of all preparatory surveys, feasibility studies, assessments and reports

3.8Establish sex-disaggregated data base and gender oriented monitoring system

motivation and monitoring tools for strengthening the CBO’s operation

• NGO field staff teams to have at least 1 female member in each 3-person team. NGO staff will have clear understanding about gender related actions and targets that relates to their work in the community

• Sex-disaggregated project data is available and regular/quarterly reports includes gender based analysis and information

DWASA=Dhaka water and sewerage authority, PMU= project management unit, LIC= low income community, IA= implementing agency, EA=executing agency, AP= affected people



13

Annex-1

Field exploration findings regarding poverty and gender issues in targeted four areas of Dhaka metropolitan city

1. Annex-1 presents the major findings on poverty and gender issues collected from the field work through FGDs and semi-structured interviews that we conducted in slums and settlements in Uttara, Gulshan, Badda, and Mirpur areas in Dhaka as shown in Table 1. The basic information obtained from the respondents focused mainly on housing, sanitation, employment, household assets, food intake, health services, and different social issues such as early marriage, domestic violence, vulnerabilities, and coping strategies of the low income community people.

Table 1: Name places visited

Place Name of the slums/settlements

Uttara 1.Tanpara, Nikunjo-2

2.Shikdarbari slum (North), Abdullahpur

3.Shikdarbari slum (Tongi Railline), Abdullahpur

Gulshan 4.Korail slum

Mirpur 5.Shah Ali Bag, 6.Kalshi Teker Bari, 7.Shahid bag Kalapani Bastee 8.Janata housing baste

Badda 9.Moddyo Badda Post office road

Bishnondi (intake area) 10.Choitonkandi village

2. Housing. Dhaka’s poor live mainly in private slums and squatter settlements. Thirty to 35 per cent of Dhaka's population live in slum settlements. Population density varies from a low of 700 people per acre to a high of 4,210 people per acre. The average floor space for a family in Dhaka is about 32.08 sq. ft (Akash and Singha, 2003). In slums, substandard housing is built legally and illegally on privately owned and public land, including in close proximity of railway tracks. The people of low income community live in mostly poor quality huts made with bamboo, plastic, and recycled tin. We observed some small settlements of 15 to 30 rooms with tin roofs, attaching with one another within a certain boundary. In most cases, the owner of the dwellings lives in the same area. There are also many slums that developed on government owned land by people having possession for a long time. These types of settlements are very congested with very high population densities. One family typically lives in one room including younr children and sometimes with sisters and brothers. In some cases, four to five young female garment or other factory workers share one room to save house rent. Rents vary according to size of the room. Sometimes the cost of water is included and sometimes is separated from the rent, which can vary from BDT 1000-2200. Water cost is generally found BDT 150-300 per month. The rent for tin shed houses ranges from BDT 1500 to 3500 per month. In squatter settlements, occupants generally have to pay “tolls” to mastaans (musclemen) and agents of employees of the land owning authorities (World Bank, 2007).

3. Employment. Poor male workers are mainly engaged in informal sector including rickshaw pulling, van pulling and other transport works, and small trading (street vendors, retail trade, tea stall, etc.). Poor female workers are employed as domestic workers or



14

garment workers. Almost all of them live in one-room dwellings. Wages are generally low, with domestic work apparently the lowest. For instance, a domestic worker generally receives BDT 1000 per month from one household.

4. Access to electricity. Only a few households have access to electricity with relatively huge cost. Reportedly, by the respondents of Uttara, the cost for one light bulb from about 6 p.m. to 12 p.m. is BDT 15 per day47. One tailor reported to us that if the monitoring team finds anybody using light after 12 at night, he gets fined. This light bulb service is provided by some well-off or slum leaders or musclemen and collect extra charge.

5. Health: Although hospitals are supposed to be free, slum dwellers reported to us that they are required to make 150-300 tk payments only to see a doctor. As a result, the poor go to ubiquitous pharmacies when they get sick and purchase medicine entirely on the advice of the shopkeepers. Only in case of serious illness or diseases do they attend clinics or hospitals because of their general inability to pay the fee of doctors. Most pregnant women depend on midwives, only some of whom are trained. Many women return to their villages for delivery to save the delivery cost. The common diseases that were reported are diarrhea, jaundice, and typhoid. The respondents indicated that they believe those illnesses are related to polluted water.

6. Education. Though slum dwellers cannot afford their children’s associated costs such as clothes, school lunch, and supplies, more children are attending in schools operated by NGOs such as Phulki, Urgent Rehabilitation Education for Children Association (URECA), and others. However, the dropout rate is high after primary level schooling because of their poor result as well as involvement with income earning activities as well as responsibility to look after younger sibling in absence of their parents. Some NGOs also train adolescent girls in handicrafts.

7. Household assets. We were told by all respondents in slums that every household owns a mobile phone irrespective of their profession and income range. Very few slum dwellers own a television set and other furniture, except a four legged bedstead.

8. Food intake. The extreme poor, and especially the female-headed households, find it often impossible to provide three meals a day for the family, particularly in the rainy season. They can hardly save money from their low income earnings.

9. Income range and expenditure. Female domestic helpers work more than one house and earn BDT 1000 to 2000 per month per house depending on the type of work and time they spend. Small traders reported that their monthly income range is BDT 10,000 to 20,000. All respondents agreed that their income has risen; however, their huge expenditure for rent, water, fuel, electricity, and food cost rarely allows them to save.

10. Early marriage, dowry, and violence against women. All respondents were aware of the legal age of marriage (18 for female and 21 is for male); however, early marriage is practiced among slum dwellers. Dowry is expected in all places. Verbal harassment including teasing was reported in all places visited. Violence against women in connection with dowry demands was reported in some places.

11. Vulnerabilities and hazards. Income is seasonal, decreasing in the rainy season. Residents of densely populated slums feel psychologically insecure due to various reasons cited, including (i) the possibility of eviction, (ii) fire, (iii) trafficking of children, and (iv) demolishing of slums. Evictions from squatted public land often occur without resettlement

47

Assuming a 40W bulb and 6 hour use, the cost is BDT 60/kWh. That compares to the current charge by

DESCO of a little over BDT 5/kWh in a luxury condominium unit in Gulshan.



15

plans. Female respondents mentioned their sufferings related to limited access to quality drinking water and adequate water services. Waterborne diseases are common in the areas where people get contaminated water for drinking and washing. They reported that they cannot afford to purify the water by boiling due to the high cost of fuel wood.

12. Coping strategies. Poor people depend on moneylender during financial crises, even though they have to pay interest as high as 10 to15% per month. In some areas they have to deposit some valuable asset such as a mobile phone, gold, or television set with two to four witnesses and a written contract. It was also reported that some private land owners are kind enough to allow tenants one to two months overdue rent. Relatives and neighbors also extend their help. Obtaining micro-credit from national NGOs to invest in small trade is also a common coping strategy for the low income community people.

13. Water and sanitation: It has been found in the slum North Shikdarbari, Uttara, Dushthya Shasthya Kendra (DSK) established one water connection to a DWASA main line and 2 toilets with indication for male and female users. There, five to ten families share one toilet, with maintenance and cleaning carried out rotationally by the families. In some places, a caretaker performs that job weekly and receives a payment from every household. In this way, he or she can earn BDT1000 to 1200 monthly. We were told that in some slums, every household needs to pay BDT50 for using the toilet facilities. Similarly, in Uttara’s Shikdarbari, slum dwellers had two latrines built by DSK; however, they have no legal access to water supply. This slum developed near the Tongi railway track and near the government staff quarter. These dwellers are fully dependent on water pumped from a deep tube well and supplied by long pipes. During our field visit, we observed a man distributing water by the pipe and two women were having a bath in the same place. There were big drums around the place. Usually there is no fixed time of water distribution; it can be in the morning, or in the evening and sometimes, even during the night. On balance, conditions in private slums on private lands appear to be slightly better than those on public land. For instance, the low income group of Tanpara, Nikunjo, Uttara seemed to have better access to water as the owner of the land lives in the same place and constructed a big reservoir which can store enough water for the tenants.

14. Waste management and sewerage system. Among the places visited, some slum dwellers dump their garbage into garbage cans provided by the Dhaka City Corporation, some pay the waste collector, and some throw directly into water bodies. The people interviewed in the Korail slum in Gulshan dump their garbage and waste water in the lake. Waste water management is almost non-existent as all sewage flows to lakes or rivers through pipe connections or ditches.



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Annex-2

DWASA, LIC, and NGO intervention

1. DWASA is a public service institution, mandated to provide water supply, sewerage, and storm water drainage services in its service area of Metropolitan Dhaka City and the Town of Naranyanganj town through ten Maintenance Operations Development Services (MODS) Zones and Narayanganj MODS. DWASA is obliged to extend its service to the poor in slums and settlements, in line with the government’s poverty reduction strategy.

2. According to the government specific laws and rules on the supply of WSS services to slums48, DWASA has developed a mechanism to ensure W&S services in the slums of Dhaka city. A new division called “Community Programme & Consumer Relation Division” (known as DWASA LIC cell) was created and approved by the government in 2007. In this way, DWASA for the first time has taken institutional measures to respond to the needs of LIC with pro-active measures. The function of the division is managed on an ad hoc basis and coordinated by the Commercial Manager. DAWSA has specific rules to provide water supply connection to the LIC when a landowner applies for a water connection, making him responsible for the bill. Or the dwellers can form a CBO and apply for a water supply connection on a collective basis.

3. Definition of Low Income Community (LIC). A Low Income Community is defined as a neighborhood or residential area with a minimum of 10 households or a mess unit with at least 25 members with four of the following five conditions prevailing within it:

(i) Predominantly very poor housing (ii) Very high population density and room crowding (iii) Very poor environmental services, particularly water and sanitation facilities (iv) Very low socio-economic status (v) Lack of security of tenure (Capacity Building Service Group, 2010:14)

4. There are more than 3007 slums and squatter settlements within the municipal area of Dhaka according to a study of UPRP (Urban poverty reduction project) -CUS (Center for Urban Studies) in 1996. Though the statistics is very much likely to vary as on average about 50 slums are added to the city annually49 as well as frequent eviction of the slums. Unofficially it is estimated that now approximately there are 4,500 slums in Dhaka. As per the Slum Mapping and Census, 2005, 62.7% of slum dwellers use municipal taps as source of their drinking water, 33.4% use tube wells, and 3.8% use other sources like rivers, ponds, lakes, and canals (Jinnah, 2007).

5. The LIC cell of DWASA supports to Zonal/MODS managers in proactively supporting the delivery of services of low income and slum communities providing connections and in planning and developing specific programs for low income and slum community expansion. It looks after the service delivery including application processes, bulk supply contract mechanisms and connection times; set zonal targets for connecting low income and slum areas; coordinate and monitor implementation across the whole DWASA service area; monitor zone operational performance against connection targets; act as a focal point for funding and implementation agencies interested in supporting urban poor service delivery; determine communication and awareness messages to encourage connection; set policy for

48

CBSG, 2010, Ensuring services to slum dwellers: Dhaka WASA organization for Low Income and Slum Community Water

Service Delivery (report)

49 Loton, S.H., 2004, Centre for urban and community studies, university of Toronto, Toronto



17

eradication of illegal connections within DWASA network; regulation of small scale service providers etc.

6. In addition to that, the LIC cell

(i) communicates with the LIC in the vulnerable areas and to organize them and help them to form CBOs;

(ii) provides WatSan service to the CBOs with the help of NGOs; (iii) organizes training for the CBO’s for smooth functioning of the water point and

sewerage facilities; (iv) coordinates among INGOs, NGOs, CBOs, Donors, DCC and Public and

Social leaders; (v) facilitates proper working of the CBOs and set up different ToR for smooth

functioning of CBOs and ensure their proper management; (vi) meets with CBOs and community leaders on a regular basis and to have

close understanding with them on different issues and problems; (vii) helps organize workshops, seminars and gathering with different

stakeholders; (viii) monitors and supervises the activities of CBOs and NGOs with regard to

WatSan service and hygiene behavior; (ix) keeps close liaison with MODS zones, other departments within DWASA and

different departments, public leaders, and CBOs; (x) monitors revenue collection; and (xi) finds out new areas of cooperation with the LIC, so that 100% WatSan

coverage can be achieved. 7. These kinds of activities are coordinated and supervised by the cell with the support of respective NGOs. The cell also makes site visits to understand the situation and whether the CBO will be capable to pay the bill and the sustainability of the CBO. If the situation seems satisfactory, DWASA staff then helps the CBO with the application, the connection, and other software inputs for water supply.

8. There are 19 partner NGOs of DWASA, and these are: DSK, PSTC, WSUP, NDBUS, NBUS, CUP, Shelter for the Poor, Nogor Seba, Desh Bidesh International, Resource Integration Center, BASA, ASD, FULKI, ARBAN, PRODIPON, Shobar Jonno Pani (SJP), Water Aid, Unicef, and Plan international. All organizations have been following the same model of water supply except SJP. There are more than 200 slums in Dhaka city which have got the legal water points with the coordination of the LIC cell of DWASA. Out of that 158 slums are in the four targeted zones of the proposed project area. Until December 2012, 717 water points have been established having meter and account numbers with the assistance of LIC cell of DWASA. However, out of that more than 100 water points have been destroyed or became inactive due to the eviction of slum dwellers.

9. As the utility companies were reluctant to provide water connections to people without land tenure, a significant number of people who live in slums and squatter settlements were excluded from water supply and other facilities. Recognizing the suffering of the Low Income Community (LIC) people, the NGO DSK began to convince target community households to pay for water supply services if the organization would try to negotiate with the utility agencies on their behalf. After receiving positive responses from the community, DSK started to act as an intermediary between the slum communities and the public water authorities to enable the establishment of water connections in some of the slums of Dhaka city. Then DSK proposed itself as the guarantor to the municipal authorities for making all sorts of security deposits and payment of regular bills on behalf of the slum dwellers to ensure water supply to them. Eventually, DWASA officials initially approved two water points in poor settlements of Dhaka in 1992 and 1994. Based on the experience with these two first initiatives DSK started working towards developing a replicable model for



18

sustainable water supply for the urban poor. It managed to launch a pilot project in 12 slum communities by negotiating DWASA and Dhaka City Corporation (DCC) to build water points and to cut roads on lands own by the DCC. DSK and other NGOs came up with a very simple technical design by constructing an underground reservoir connected to a DWASA main, fitted on top with a hand pump.

10. Later on, several NGOs have adopted a so-called “Social Intermediation Model (SIM) of water service provision to the urban poor through the installation of community-managed water points connected to DWASA’s water main. DSK’s main aim was to set up a water system that could be handed over to the local community to manage and run in the long term. The water delivery model proved to the city authorities that when they are willing to pay, informal communities can be capable and responsible managers of essential services as well as reliable clients for the relevant service providers (Jinnah, 2007). The success of the initiative lies in the fact that the price of water paid by poor households living in slums and squatters was very high in comparison to DWASA rates (10-12 times) increased legal access made water cheaper for them (Akash & Singha 2003). For DWASA, this represents an effective system for regularization illegal connections and increasing their revenue. NGOs have also given credit and technical assistance to community groups to support them in the construction of the water points. NGOs have been approached to participate in both the planning and implementation of these projects.

11. Then NGOs paid great attention to motivate poor communities and building their capacity in order to make them capable to manage and maintain the new facilities themselves. They supervise the installation and management of the water points two-five years (depending on the project duration) or until NGO’s initial investment had been repaid. After the repayment NGOs hand over the water points to the communities. This sense of community ownership is crucial to the program’s success.

12. Dhaka City Corporation (DCC) has undertaken the following activities for the connection of water points to the slum community:

(i) Permission for using government land for construction of water points with the condition that water points will be removed when DCC needs the space

(ii) Technical supervision during the construction phase (iii) Mobilize public opinion through elected ward commissioners (iv) Advocate for policy issues (Akash & Singha 2003)

13. Common intervention by the NGOs to include the community people with the water service: At the time of baseline survey the whole community (men, women, children, poor and rich) are involved in joint analysis. After the baseline survey the communities formulate an action plan together. During the initial two or three months the whole community involvement is remarkable. But in most cases the long-term day-to-day project activities; e.g., regular hygiene education sessions, are mainly targeted to women and children; due to the nature and division of work between men and women (men mainly work outside of home and they are not responsible for work related with cleanliness at household level). Some organizations work mainly with women’s’ groups, which they have formed for other activities e.g. women development program, or savings and credit, they facilitate hygiene promotion sessions with the same group. One of the major components of any project is the installation of hardware components (water points, individual latrines, cluster latrines or sanitation blocks) for fulfilling the practical needs of the people (men, women and children). During planning and installation of these hardware components, in many cases, men play the lead role rather than the women because of their socio economic position. The hardware components are maintained and managed by community management committees. The committee is comprised in some cases of 100% women members of the



19

community, with men as ‘advisors’, in other cases it’s a mixed group where both men and women share the responsibilities.

14. The following are the steps taken for water access for the low income community people:

(i) Rapport building with community by partner NGO staff (ii) participatory community situation analysis using PRA tools to know the present water

sanitation situation, available resources in the community and socio-economic status of community people with special emphasis on poor

(iii) develop community action plan by community people (iv) formation community based organization (CBO)/management committee & inclusion

poorest and women in the CBO (v) start continuous hygiene promotion activities & capacity building support to CBO

which continues approximately two years (vi) identification of the beneficiary for water and sanitation related hardware support;

poorest first (vii) cross check the ability of each beneficiary to finalize their % of contribution for the

services (viii) provide hardware facility-collection beneficiary contribution (most of the beneficiary

pay in weekly/monthly installment) (ix) support for operation and maintenance; e.g. caretaker training, follow up support and

monitoring50. 15. Women’s involvement. The community people participate by operating water points, minor repairs and ongoing maintenance, collecting user fees, appointing caretakers and paying their salaries, regular payments of DWASA bills and repayment of NGOs capital investment. The project staff regularly visit communities and water points and continue to help build community capacity to manage the services. Through formation of community management committees with female members, they get opportunities to interact with others, often outside the home, which assists in confidence building. In addition to that, experience of dialogue and negotiation on wider issues outside the home, which creates opportunities for public mobility, and make them visible, literally, in the community51.

16. In most cases a female caretaker from the community is selected to undertake the regular maintenance of hardware and collection of community subscriptions for repayment of the installment cost. A small amount of money is paid to caretakers as an honorarium. This sort of job opportunities for women increase their visibility and voice as community development actors and provides positive models for children, men and other women. In addition, treasurer position also tends to be occupied by the female.

17. Moreover, for installation of hardware components in most cases women play a vital role in site selection, which involves them in decision-making processes with men. Technical trainings for O&M are provided to one male and one female person so that if the male is out of house, the female can fix the minor repairing.

18. The contributions of the women were highly recognized by the slum dwellers. Women were highly encouraged in the decision making process. Management committees generally consists of 9 members and all are female. One CBO consists of 13-17 members where most members are female and the president position is reserved for a female member. Other committee formations such as advisory committee, purchase committee,

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Ahmed, Rokeya, 2006. A case study on reaching the poorest & vulnerable, WaterAid, Bangladesh 51

Ahmed, Rokeya, 2002. Integration of Gender Perspectives in WaterAid’s Bangladesh Program: for improved

safe water supply, environmental sanitation and hygiene promotion



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water committee, sanitation committee encouraged the slum dwellers to adopt management system and achieve leadership quality.

19. Financial contribution of the slum dwellers are being determined based on affordability (poverty category) of the people considering their economic class. The community people repay the construction costs of establishing water point/stand and sanitation facility by installment.

20. Shobar Jonno Pani (SJP). SJP is a small-scale Bangladeshi water service company created in December 2010 by the NGO “Eau & Vie - France” (E&V) that specializes in water supply in deprived urban areas. SJP will set up, operate, and maintain a water supply system by establishing water tap in each house or courtyard in Bhashantek bustee, Mirpur, in partnership with local community and DWASA. E&V is a French association whose action is based on social entrepreneurship and close liaison with the communities. In collaboration with public services, it aims to contribute to the creation of small companies in deprived urban areas in developing countries (where few wish to invest) to create and manage water supply networks. The local NGO “Water & Life – Bangladesh” (W&L), was created in order to advise and control small water companies and to develop other projects in the same area to further improve living conditions and livelihoods of poor people.

21. W&L’s project is part of a larger development plan from the government, represented by the Dhaka North City Cooperation (DNCC), UNDP-UPPRP and UNICEF for several slums in Dhaka. After social and economic surveys, Bhashantek was selected as a location to implement this pilot project as the area was matching both the technical and social requirements of W&L: (i) a community supporting the project and willing to pay for safe water, (ii) an appropriate land owned by the government and (iii) a quasi non-existent risk of eviction securing the sustainability of the project.

22. The general goals are to improve the water supply, sanitation, drainage, hygiene and socio-economic situation. Yet, W&L wants to go beyond building a water supply network, thus once installed, the network will be managed and fixed by Shobar Jonno Pani –social business- which will also collect the fees for the water consumption.

23. Community involvement. W&L project is all the more relevant that Bashantek’s community will not only benefit from the project but will also be actively involved in the installation, implementation as well as the management. Indeed, the installation of the network as well as its maintenance will be ensured by SJP (and some contractual helpers) the employees of which are nearly all living in Bhashantek. Besides, volunteers from Bhashantek will be trained to hygiene promotion and fire prevention in order to train the community. Finally, the community leaders supervising the clusters will play a role of ombudsman between the community and SJP. Community will be the key stakeholder as the asset owner of the project, which will be built under UPPR support. The Community will sign on one hand a binding management contract with SJP, the Community's service provider, ensuring both parties rights and good cooperation. On the other hand, the community (represented by cluster committee) will sign a connection contract with DWASA that will ensure legal connection and water distribution to the Bhashantek slum.

24. The project is working with Primary Groups (PGs) established by UNDP comprising 20 women from 20 households and one Community Development Committee (CDC) is formed by 20 PGs. In addition to this, one cluster is formed with 13-15 CDCs. Therefore, women’s participation is high in the project for planning, implementation and O&M. In addition, local women are involved as collectors, field coordinator and in hygiene promotion.

25. The technical benefits for the community will be the following:



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(i) Water tap in each house or courtyard, so no more queuing and water carrying; (ii) price according to the amounts consumed (each household would have its own

meter and there would be no more disputes about splitting the bill); (iii) where pipes will be placed, a footpath with drainage will be installed on top (the

community as one of the priorities has indicated the elevation and the construction of footpaths); and

(iv) capacity building of volunteers and Community Development Committee members 26. “Establishing a Sustainable Water Supply System in Bhashantek slum” is a pilot project in Bangladesh for Water & Life (W&L) and Shobar Jonno Pani (SJP) which could usher a new era for water supply in Dhaka’s slums. Indeed, Water& Life (W&L) project could be extended to other slums in Dhaka as well as other towns with our partner’s support as well as WASA.

27. Vulnerability and challenges to work in low income communities include

(i) Slum Eviction threat (ii) Migration (iii) Lack of coordination among the DNCC and DWASA. (iv) Appropriate technology for hanging slum (v) Political influence (vi) Illegal water vendor

28. A number of slums in Dhaka city have been evicted and in April, 2012 eviction took place at one slum Karail, Gulshan, partially but with the strong role of Karail CBO the eviction drive was stopped finally. On 4th April 2012, more than 1,000 households of Karail slum had been evicted by the Bangladesh Telecommunications Company Limited- BTCL within a few hours’ notice and BTCL had a plan to evict the whole Karail slum gradually. During this eviction the CBO leaders raised their voice to stop the eviction but the law enforcing agency was determined to continue the eviction drive. So the CBO organized several meetings immediately in their community even at night to protest the eviction with the involvement of mass people and subsequently thousands of slum dwellers demonstrated on the main road of Mohakhali area to protest the on-going eviction. Authority was forced to stop the eviction. Though the eviction drive was stopped but the slum dwellers felt insecure. So the CBO went to the Supreme Court and filed a writ petition to stop slum eviction without proper rehabilitation with support of ASK, BLAST, CUP, DSK and other agencies.

29. During this period the CBO of Karail organized several meetings with illegal water vendors and community people in presences of DWASA official to legalise the water connections and finally DWASA is now giving more emphasis to ensure water supply in Korail slum as soon as possible. During this period with the assistance of DSK, NBUS constructed 2 water points and 1 community toilet at PWD (Public Works Department) Sweeper colony slum with the financial support of ACHR (Asian Coalition for Housing Rights). DSK has provided technical support to NBUS and some other NGOs for the WASH interventions.

30. Limitations of the service. Although there are various CBOs/NGOs who ensure access to water and sanitation services to poor communities, there are numerous cases which indicate that there is a dire need for appropriate monitoring of their operational and billing system. There are cases where the system is abused by third party stakeholders. For example, investigations indicate that the owner of the Shikdarbari slum charges BDT200 per month from every household for water. supply, although DSK funded by Water Aid, Bangladesh, established toilets and water points from DWASA. This way, the owner earns BDT 3400 from 17 tenants, whereas the bill is expected to be less than BDT1500. The tenants also have to pay BDT50 per month for using the toilets which were established in



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2008 through CBO with assistance from DSK. In such cases, the community people pay the money to the respective NGO through installments. According to the DSK field worker, the community people fully paid their contribution. The owner of the slum is still collecting the fee in the name of repayment of the contribution. In addition to this, the owner said that her tenants get access to water for 24 hours. Despite this, the tube well was found locked and inoperative during field visit.

31. Moreover, problems with CBOs active function after the certain period of NGO intervention: generally, every NGO has a plan to work with the CBOs for a certain period of time, such as 5 years. It includes since forming a CBO to getting connection from DWASA and supervision of payment and operation and maintenance of the services. However, often it has been reported that when NGO left, the CBOs became irregular in payment of water bill. In addition, if the community people do not get regular water from legal connection, they take another illegal connection.

32. As a result, the NGOs have developed a strategy to strengthen the CBO and particularly one person is responsible to collect the bill from WASA and also deposit the payment against the bill in the bank in every month. For example, in Kalshi Taker Bari slum, Mirpur 12, there are 29 water points and CBOs exist. One member of every CBO maintains the meter reading and keeps the record in every month. Therefore, all CBOs of different water points have adapted a collective approach and appointed one person who collects bills for them and hand over it to the respective committees. Then the committee members collect money from the users and let him pay the bill. It is announced to all CBOs to collect their payment receipts in a fixed date of the month. Usually this person is paid by the committees that are collected from the user households in addition to the exact bill amount. Some NGO also assist them to pay the bill through internet and mobile through SMS and POS (Point of Sales) of two mobile operators e.g. Rabi and Citycell. Through this way, the CBOs have been establishing as independent organization that can take care of their water points by themselves.

33. Uncertainty of receiving regular bill is a significant constraint for the community people as generally the responsible meter reader of DWASA tend to visit only the high rise buildings and privately owned houses and avoid the slums and other squatter settlement. Therefore, the LIC people receive bills of 5-6 months to more at a time which is really burdensome for them. Thus, the committees have adopted a strategy to adjust with the irregular billing system. It has been reported that now when the committee selects a caretaker, he/she has been given training on the meter reading and keeping record so that they can pay the bill regularly (according to the meter) even the official bill doesn’t come. Because the community people have felt that it is not hard to pay the bill regularly, however, it becomes burden when they need to pay the bill of some months together. In this way, they have made their own strategy to overcome the situation.

34. Institutional level (LIC cell, DWASA). In addition, the lack of manpower in relation to workload and multi dimensional works limits the efficiency of the LIC cell of DWASA. There is no water engineer in the LIC cell at DWASA which hinders the feasibility study/process of notifying whether the slum is eligible to get access to DAWSA or not. Moreover, the proposed water connection and establishment of water points and transmission lines are all designed by an engineer. Therefore, if an engineer would be integrated with the LIC cell, he or she could accompany the Senior Community Officer in bustee visits to know the pre-requisites of getting connection, sustainability of the slums in terms of pattern of landholding system, types of groups that live in the slums, availability of women at home, and so on.

35. Moreover, there is no specific person assigned to work for water connection as well as separate personal for revenue collection. Now the CBOs are required to come to DWASA with the assistance of NGOs to get the water connection but even if they are capable to come, the system does not allow them to come to DWASA directly. As a result, only two



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staffs (one male senior community organizer and one female community organizer) of the cell have carried out all kinds of tasks such as feasibility study, recommendation for approval, water connection, and revenue collection. According to the senior community organizer, though he is not assigned for revenue collection, since he is responsible for LIC people he was suggested to perform that job as well.

36. Thus, there is at least one staff needed for water connection in every zone. In addition to that, one staff is needed to recruit who will be responsible in order to collect the bills for the installed water points, present the bills to the CBOs, inform the CBOs about their unpaid bills.

37. Lessons learned. The water service has enriched the low income community people’s access to adequate quantity of water. Though the respondents have reported interruption in water flows in dry season and unclean water in rainy season, they seemed happy to have legal access to the water services. They explained the impacts of the established services in following ways:

(i) The female groups have explained their previous sufferings before the water point’s installation (two hand pumps), all women with some men used to collect water from distant places; it interrupted their involvement with earning activities. Now, all families irrespectively their profession, can collect water at their convenient time. The females who work outside (domestic help, garments and other factories and small trading) they do not need to store water in the early morning. As a result, the facilities have made them relaxed in order to mange water for cooking, washing and bathing. Instead of the women, now men and other family members also can collect water from the water points.

(ii) They also stated that it has developed social cohesion among the community people who are heterogeneous in terms of profession and ethnicity. Previously there was contention among the women and girls during the long queue for water that sometimes affected the families.

(iii) The women and particularly the adolescent girls shared the positive outcome of the water services. They said now there is a platform above or around the water reservoir for water collection, washing, and bathing. These facilities have ensured their menstrual hygiene, having adequate water for washing and cleaning.

(iv) The women’s efficiency and activeness have been proved in management committees, as a result, now almost all members are women in water management committees and the treasurer and president posts of the CBOs are occupied for female members.

(v) Women are involved in operation and maintenance; they clean the reservoir and surroundings.

(vi) It has been noticed that the communities who have been living in the settlement on private land, they enjoy this kind of services more than the communities who have insecurity and constant threat of evictions from the slums/squatter settlements on public lands.

(vii) The sense of ownership on the water services becomes strong among the people when the demand comes from the community, their involvement in problem identification, action plan, design, selection of the spot, taking care of the services and O&M.

(viii) However, poor quality water is reported in some places (ix) There are several important lessons learned from DSK’s negotiations with

DWASA to provide water to urban slum communities. Among them:



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(a) There is a willingness and ability among the urban poor to pay for basic service delivery (Ahmed, 2003). The myth that providing service delivery to poor communities requires heavy subsidies is disproved. Additionally, DWASA benefited from the increased revenue, which acted as a motivator to continue the working relationship.

(b) Community ownership is critical for the sustainable success of any project. The first attempt for a water point by DSK in a slum was taken over by the local mastaan. The second attempt put management of the water point in the hands of the community themselves, who did not allow a take-over by the mastaan. It is almost impossible for an outside NGO, such as DSK to extort any control or pressure of slum leaders; the control has to come from within the slum community.

(c) As with any successful project, the cooperation between the field staff and upper level management is essential. The commitment of senior level managers is as important as the commitment of field-based staff (The World bank, 2007).

38. However, for sustainability and real empowerment of slum communities, NGO need to build the capacity of slum dwellers to handle DWASA independently, reducing the need for NGO intervention and mediation. Women’s participation in water and sanitation program is indispensable to the promotion of safe water and safe latrines. Their involvement has increased due to their empowerment in management activities, and has thereby increased their social status. In contrast, the current domination of men in the WSS program is not conducive to gender issues and inhibits women’s broader participation. In addition, women should be consulted regarding their views and perceptions and thus considered in designing of water management to make sure that they are not overburdened with the new tasks.

39. Gender policies and staffing at organizational level: It has been found that gender and equity have been maintained in staffing in the visited and reviewed projects on water service and hygiene by different NGOs. For example, visited two projects of DSK, Catalyst and SJP it has been found that women staffs were recruited where available and female candidates were encouraged to apply and got recruited. Particularly, in SJP the top management is occupied by the female staffs. Nevertheless, in DWSSDP project there are only 8 female out of total 50 staff. According to the DPD of the project, due to the nature of the work sometimes it is difficult to recruit a female engineer and other technical person in addition to unavailability of quailed candidates. The Quarterly Report December 2012 of Financial and Capacity Building Component (FCB) of DWASA shows that in view of the ADB’s Gender Action Plan (GAP) for the Water Supply Sector, FCBC has re-oriented its training activities towards gender initiation and development. The training programs under the Human Resource Development Plan of FCBC are being addressed covering the relevant gender issues. A two-day training program on “Awareness and Motivation with Emphasis on Gender Initiation” was held on 21 and 22 October 2012. Besides the participants of DWASA, six field supervisors/field officers from six NGOs engaged in DWASA’s Demand Control and Public Awareness Campaigning had actively participated in the program. A GAP has been developed under the project in 2012.



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Annex-3 Background information on intake area of Narayangonj 1. The intake point area is located at the village named Chaitan Kanda under Araihazar thana and Araihazar Upazila, under Narayangonj district. The female literacy rate is 39.8% and school attendance is 48.2% whereas the male literacy rate is 42.1% and school attendance is 47.7% in the Upazila (Population Census, 2011). There are 12 unions, 159 mouza and 322 villages. Some small group and individual discussions were conducted with the community people of the village. 2. Source of Drinking Water. In Araihazar Upazilla the source of drinking water for 93.52% dwelling households is tube-well water, 0.40% is tap water , 0.50% is deep tube-well water, 0.21% is pond water, and the remaining 5.31% is water from other sources (Community Series: Narayanganj, 2008). The community people of Choitan Kandi stated that arsenic in water is very common problem for them. Some of the tube wells basically which had been installed 2/3 years ago were examined by the experts who came from Ariahazar Upazila. So, the newly installed tube wells were not examined and people are using water without knowing the existence of arsenic or not in water. Some of the villagers told that despite presence of arsenic in the water they are bound to use the water for cooking due to scarcity of arsenic free water. Thus, they sometimes suffer from different skin diseases. On the other hand, some villagers also shared that they carry quality water for drinking from others. 3. Sanitation. In Araihazr Upazilla, 22.62% of dwelling households have sanitary latrines with 32.01% in rural area and 48.12% in urban area. A total of 14.53% of the households have non-sanitary latrines with14.92% in rural area and 4.64% in urban area. In this Upazilla, 52.84% of the households have no toilet facility (Community Series: Narayanganj, 2008). There are open and hanging latrines have been observed in the intake village particularly among the poor households. 4. Main Source of Household Income. In the Upazilla, 28.48% of the dwelling households depend on agriculture as the main source of household income with 17.03% cropping, livestock, forestry and fishery and 11.45% as agricultural labor. Other sources of household income are non- agricultural labor (8.29%), business (20.19%), employment (5.96%), construction (1.40%), religious service (0.26%), weaving (9.05%) rent and remittance (3.44%), industry (6.08%) transport and communication (4.84%) and others (12.01%). In urban area, main sources of household income are employment (13.62%), transport & communication (4.22%), business (27.71%), non-agriculture labor (4.72%) Industry (3.54%) and others (34.54%). In rural area the main sources of household income are agriculture (29.71%) of which cropping, livestock, forestry and fishery (17.55%) and agricultural labor (12.16%). Other sources are non-agricultural labor (8.57%), business (21.62%), employment (5.78%), transport and communication (5.22%), construction (1.52%), industry (6.40%), rent and remittance (1.95%), weaving (9.80%) and others (9.43%) (Community Series: Narayanganj, 2008). 5. The major livelihoods of the Choiton Kandi village are fishing, rice and vegetable production due to its physical location to the river bank of Meghna River. As the fishing is seasonal and according to the villagers fish quantity is decreasing day by day, the fishermen have to migrate to other areas to work as laborer in order to making their livelihoods. Chili is highly produced here along with potato, onion, bean and jute. According to the villagers, the agricultural land is so productive that nobody wants to sell their land by any means. Poor destitute women including female-headed households fully depend on the laboring work in agricultural field, earth cutting for road and house construction as well as domestic help. Young girls and boys having primary education or under SSC (Secondary School Certificate) go to Dhaka to work in garments and other factories. According to the villagers, these young



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females rarely can visit the village as lack of holiday they can enjoy. During focus group discussion, the poor women and men stated that they would be happy if there is any sort of laboring work created by the project. They said that they always prefer to work within the village and near the village, so that they can stay with the family; otherwise, when they migrate, they incur additional travel costs. Therefore, they are very much willing to be involve in unskilled construction related works. 6. Education: School attendance at the age group 5 to 24 years for males is 37.8% and for females is 38.3%. In urban area the rate is higher 50.8% for males and 51.7% for females as against 37.3% for males and 37.8% for females in rural area. Among various age groups female attendance is found higher than their counterpart male in age groups 5-9, 10-14 and 15-19 years (Community Series: Narayanganj, 2008). There are primary school and high school in the village of intake area of Khilkhet Water Treatment Plant. According to the villagers now all children go to school although drop out after primary level is high, particularly among poor families who cannot afford children’s school-related expenses. Moreover, the young children need to take care and look after their siblings in the absence of their parents. As college students need to leave the villages to attend college, eventually the girls become excluded from the process due to different kinds of hazards and risks related to the daily journey. Only the rich families rent houses to continue their daughters’ higher education.



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7. Annex-4

ADB POLICIES AND FRAMEWORKS FOR GENDER AND DEVELOPMENT

1. ADB’s Long-Term Strategic Framework. The Long-Term Strategic Framework of ADB (LTSF) known as Strategy 2020, approved in 2008, states that ADB will pursue its vision and mission focusing on three strategic agenda, (i) inclusive economic growth, (ii) environmentally sustainable growth and (iii) regional integration. To maximize returns from its investments, ADB focuses on five drivers of change for results: (i) private sector development and private sector operations, (ii) good governance and capacity development, (iii) gender equality, and (iv) knowledge solutions and partnership. ADB’s operations are mainly in (i) infrastructure; (ii) environment, including climate change; (iii) regional cooperation and integration, (iv) financial sector development, and (iv) education. In other areas, ADB supports health, agriculture, and disaster and emergency assistance. The Strategy 2020 confirms that ADB will continue to promote gender equity as one of five “drivers of change” to help DMCs achieve inclusive growth and attain the Millennium Development Goals, guided by the Gender and Development Policy and Plan of Action.

2. ADB’s Policy on Gender and Development 1998. The background document regarding ADB’s transition from Women In Development (WID) policy approach (1985) to Gender and Development (GAD) approach depicts recent and emerging areas of concern for women in the Asia and Pacific region. In spite of women’s numerous achievements in many parts of the Asia and Pacific region, women continue to suffer from economic deprivation, social isolation and are constrained by socio-cultural and legal structures. These restrict their access to resources and their control over their own lives. As a result of these challenges, increasingly, focus has shifted on analyzingthe social, political, and economic costs of all forms of violence against women, alongside the traditional challenges in agriculture, health, education, and employment. In addition to this, due to various criticisms on WID approach in terms of its exclusive focus on women’s improvement, it is rather important to analyze the relation between men and women, as well as concurrence and cooperation of men.

3. The ADB Policy on Gender and Development, 1998 committed in assisting the developing member countries (DMC) to implement the commitments made at the Fourth World Conference on Women, Beijing and support in women’s advancement. It adopts mainstreaming as a key strategy for promoting gender equality and empowerment of women to ensure gender parity in all ADB activities. Gender is a crosscutting concern and affects all ADB activities, including macro-economic and sector work, lending and technical assistance (TA) operations. In addition, ADB’s poverty reduction strategy also identifies gender equality as a thematic and crosscutting area. ADB promotes the mainstreaming of gender considerations in projects and gender concerns is addressed in all appropriate stages of the project cycle from identification through post evaluation. In all ADB projects, including program and sector loans, gender considerations will be addressed as part of the initial social assessment (ISA)- this is now required for all ADB projects. If the ISA identifies significant gender issues, these will be examined further through detailed gender analysis.

4. Gender and Development Plan of Action (2008-2010), Asian Development Bank. The ADB assigns certain categories to projects, with the aim of promoting the systematic integration of gender consideration and for monitoring purposes. Effective Gender Mainstreaming (EGM) is one of the three categories. A project is included in this category when (i) the social analysis conducted during project preparation includes careful consideration of gender issues, (ii) the project includes several design features to facilitate women’s participation in activities supported by the project and/or women’s access to project/program benefits, and (iii) these design features are supported by appropriate loan covenants.



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5. ADB Country Partnership Strategy, (2011) Bangladesh 2011-2015. The overreaching objective of ADB support will be to contribute to the government’s Sixth Five-Year Plan goals and commitments for enhancing growth and reducing poverty. In line with ADB’s strategy 2020, one of the seven key thematic drivers of ADB’s Country Partnership Strategy with Bangladesh (2011-2015) is gender equity. It will concert efforts to mainstream gender equity in ADB operations and increase the proportion of projects with specific gender-equity outcomes. Gender Action Plans, sex-disaggregated data and gender analysis will be used in monitoring and reporting project results along with delivering gender equity knowledge products in setting national gender equity targets and indicators with other development partners.

6. In strategy implementation, it has been stated that “ADB will help the government expand sustainable safe water supply and sanitation and improve urban public health by expanding access to clean water in Dhaka, modernizing the Khulna water supply system, reforming selected municipal water supply providers, and improving the legal and regulatory framework of the urban water supply”(p. 8).

7. ADB’s Gender Strategy for Bangladesh. The Country Strategy and Program for Bangladesh (2006-2010) was established based on an assessment of the gender equality situation of Bangladesh and a report titled Poverty, MDG and Gender Equality in Bangladesh, which was prepared in 2004.

8. The Gender Strategy identified the low status of women and the constraints related to it. The constraints included: low access to and completion of primary and secondary education; low labor force participation; low wage and concentration in non-formal temporary jobs; low access to primary health care including ante and post natal care services; high maternal mortality; malnutrition; vulnerability to natural calamities and HIV/AIDS; low participation in decision making; gender-based violence including trafficking of women etc. The strategy aims to empower women and narrow gender gaps through policy dialogues and mainstreaming activities in ADB supported projects and programs. ADB intends to increase women’s participation and benefits from ADB’s operation by: i) increasing the return on women’s labor, ii) facilitating women’s empowerment in decision making, iii) strengthening the gender capacity within institutions, particularly the local government and executing agencies, iv) fostering women’s human development, v) providing social protection to the women who are most vulnerable to economic and social shocks, and vi) promoting a positive image of and role for women as agents of change as well as key economic producers. Building capacity of the Executing and implementing agencies, partner NGOs for designing and delivery of gender sensitive programs, collection and use of gender disaggregated data and monitoring are emphasized within the Strategy. The Strategy elaborates ADB’s GAD Policy in the Bangladesh context, and focuses on its application in project design and implementation linking them to the Millennium Development Goal (MGD) of empowering women.

9. The paper suggests entry points for mainstreaming gender concerns into ADB-supported projects in Bangladesh by sector. In water resources sector, the entry points mentioned are: effective participation of women in water-user committees for planning of interventions that build their empowerment in the community; employment opportunities and wage parity for women in construction that are closely monitored; women’s participation in maintenance operations; assessing and monitoring impact of infrastructure on women and men; assessing the impact of river erosion on women and men and providing mitigating activities that specifically address their needs; and resettlement issues.

10. National Water Policy of Bangladesh (Women’s aspects). In relation to the water sector, the National Water Policy52 and the Guidelines for Participatory Water Management53

52

Ministry of Water Resources [1999]. National Water Policy.



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both emphasize women’s needs and involvement in the sector. The second objective of the National Water Policy is ‘To ensure the availability of water to all elements of the society including the poor and the underprivileged, and to take into account the particular needs of ‘women and children’. Part of the fourth objective of the same document is ‘to enhance the role of women in water management’. The Ministry of Water Resources’ Guidelines for Participatory Water Management specifies inclusion of female stakeholders at every stage of a subproject’s development -- from planning through implementation, in the formation of local water management committees/associations, all the way through to operation and maintenance arrangements.

11. The objectives of National Water Policy (gender focus) are

(i) Ensure availability of water for all of the society including the poor and disadvantaged groups and give attention to the particular needs of women and children.

(ii) Institutional restructuring in order to decentralize the management of water resources and enhance women’s role in water management.

(iii) Development of knowledge and ability to make the country self-reliant in implementing future water plan integrated with economic efficiency, gender equity, consciousness of social rights and justice and environment, and to achieve the objectives of water management through public participation.

12. Stakeholder participation: Almost each sector of the economy and the public sectors affected by the water resources management related decisions. So, participation of the stakeholders will be established in such a way that the related person of all stages will be directly benefitted. Relation of stakeholders will be the integral part of water resources management in all stages of project activities. Programs of related institution will be redesigned completely as required to increase the role of Stakeholders. At the same time the role of the civil society will be increased in water project implementation and decision making processes. Government will play a central role to establish local institutions and to create a sensitive and unique understanding of the management within these. In the same way, to achieve this goal, the Government will must take active step to ensure women effective participation.

13. In order to ensure active participation of all stakeholders in water resources management decision making at all stages it has been mentioned that it is the policy of the Government that

(i) guidelines for formation of water user groups and similar organizations will be formulated;

(ii) 25% of the earthwork will be offered to particular target groups or beneficiaries in any public water projects;

(iii) all necessary efforts will be followed to ensure direct involvement of landless and other underprivileged group’s in participatory management of water resources; and

(iv) new projects proposed by a community or local institution will be considered for implementation on a priority basis only when the beneficiaries have mobilized a certain percentage of the total cost as their contribution to the project.

53

Ministry of Water Resources [revised, 2001], Guidelines for Participatory Water Management.



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List of persons consulted 1. Mr. Akhil Chandra Das, Project Manager of “Promoting Environmental Health for the

Urban Poor” (PEHUP), DSK

2. Md. Mahadi Hossain, Senior Community Officer of “Community Programme & Consumer Relation Division”, DWASA

3. Ms. N.R. Musfika Laiju, Deputy Country Program Manager, Bangladesh, SJP limited 4. Mr. Uttam Kumar Biswas, Project Coordinator of “Waste Water Treatment Plant”

project, DSK 5. Engr. Wahida Begum, Assistant Engineer, PMU, DWSSDP. DWASA 6. Engr. Md. Mahmudul Islam, DPD, DWSSDP, DWASA 7. Shankar Chandra Adhikary, DSK, Demand control and awareness campaign

program, DWSSDP (DWASA), 8. Mr. Abdul Hakim, Catalyst, Demand control and awareness campaign program,

DWSSDP (DWASA) 9. Ms. Hafiza, Sewerage division, DWASA 10. Mr. Imranul Islam, Drainage department, DWASA 11. Mr. Shahidul Islam, Ex-employee of WSUP and Danida



1

APPENDIX 13: REVIEW NOTES ON FS FINANCIAL ANALYSIS

The following is a listing of apparent anomalies in the FS Appendix 4: Net Present Value.

1. Under assumptions, the term “rent” is used. In the context, we assume that “rent” is “interest”. Three rates are shown: (i) Presumably $185 million ADF @ 1.25, (ii) $375 million OCR at 4, and (iii) $140 million GOB @ 4. Since the financial analysis is performed with respect to DWASA, those rates are inappropriate as DWASA obtains on-lent loans from the government at 5% and is unlikely to obtain OCR at 4%.

2. The WACC, although correctly calculated based on the assumptions in 1., is therefore incorrect.

3. The cost of construction at $533 million is incorrect for this project as it is based on Phase 2 components. Our current estimate that is largely based on FS numbers is $399.7 million “construction cost”; plus $108.2 million design, supervision, and contingency; plus $86.7 million “other” costs including land acquisition, etc. We will refine our “current” estimate.

4. The consultancy 5% is considered insufficient to cover design and construction; we have assumed 5.5% design plus 5% construction supervision. This may not become known if the contracts, as expected, are based on design-build modality (irrespective of any part being financed by the private sector through PPP).

5. The O&M cost of BDT 693 million is consistent with the details in the FS that add up to $9.902 million. Note that the FS ForEx is $1 = BDT 70. The FS does not include any O&M for the pipelines.

6. The government investment cost of $139.91 million for land acquisition, tax, and resettlement is considered too high. We have estimated:

7. Item $ million Land acquisition 36.5 54 Power supply 3.5 Access road 3.5 Environmental costs

4.0

Social costs 4.0 Total 51.5

8. While it is unclear how the NRW has been used in the FA, the assumed 15% is considered too low. We have assumed a more realistic 40% in 2012 decreasing to 20% by 2030.

9. The FA sets 2013 as its year zero, the first year of construction. That is an impossibility. We have assumed that the first year of construction is 2015. The only effect is that the FS FA assumes a 5% annual increase in the 2011 average tariff of BDT7.54/1000L. We understand that the current maximum tariff increase is 5% but that DWASA has applied to the government to raise that annual increase to 10%.

10. The FS splits the total project cost evenly across the 3-year construction period rather than in a generally accepted S-curve. We have assumed an S-curve defined by 21%, 49%, and 30% respectively in year 1, year 2, and year 3 of the construction period.

11. The FS shows revenue in year 1 of operation of BDT1,963 million. It is unclear how that amount is derived. Let T2011=BDT7.54/1000L, (where T=tariff)

54

Land acquisition cost could be much higher



2

Assume annual increase = 5% Then T2016=7.54 x (1+0.05)5 = BDT9.62/1000L Therefore, RK=500 x 0.85 x 1,000,000 x 365 x 9.62 / (1,000,000 x 1,000) = BDT746 million and RS=450 x 0.85 1,000,000 x 365 x 9.62 / (1,000 x 2) = BDT672 million for a total revenue of BDT1,418 million where RK = revenue from Khilkhet WTP RS = revenue from Saidabad WTPs QK=500 MLD and QS=450 MLD NRW = 15% (assumed for this calculation) The FS assumes 50% revenue from Saidabad during the first 10 years; however, since all of the raw water for Saidabad is produced by this project, we assume 100% should be applied.

12. The FS shows O&M in year 1 of operation of BDT802 million. It is unclear how that amount is derived. Comment 5. refers.

13. The FS does not include for replacement costs of mechanical and electrical components. We have assumed a reinvestment of about $20 million in year 20 of operation.

14. The FS assumes a 50% salvage, or residual, value in its year 25 (year 23 of operation), which raises the IRR from 1.50% (without residual value) to 3.28%. Presumably, the residual value was chosen so that the IRR = WACC. If a $20 million replacement cost were applied in year 20 (at BDT70/$), the IRR would drop to 2.64% with residual value and 0.45% without.

15. The FS assumes 5% revenue growth (based on the assumed 5% tariff increases) except that in year 11, the increase is 21% and in year 21, 19% - both unexplained.



1

APPENDIX 14: ANNEXES 1-3 IN ECONOMIC ANALYSIS SECTION III.D.2

Annex 1. Technical Note on Contingent Variation Analysis

1. Variables in the model

The analysis of the WTP is supported by the 1,000 cases (household survey data) in the original database that have already a connection to the water system in Dhaka. The variables considered in the analysis, derived from those in the original database, are as follows: (i) Dependent variable:

(a) CONNECT_T: takes the value 1 if the respondent would keep connected to the water system at the transformed bid price, and the value 0 otherwise55.

(ii) Independent variables: (a) LogBid_T10o: logarithm of the transformed bid price presented to the

respondent56. (b) Log Exp_Clean: logarithm of the total expenditure of the household after

outlier elimination57. (c) C1_14: years of education of the head of the household, after outlier

elimination58.

(iii) Perception variables: that indicates if the respondent had any problem with the water supply59: (a) a2_1e, a2_1h4, a2_1h6, a2_1h7: problems with pressure, color, dirty and

iron, recoded as 1 if this problem actually happens and 0 otherwise. All these variables are included in the companion SPSS database ‘Final_09122012_JV.sav’.

2. Estimation of the WTP

A logit model has been estimated with SPSS v19.0 with CONNECT_T as dependent variable and LogBid_T10o, Log Exp_Clean and C1_14 as covariates. The syntax for this estimation is:

LOGISTIC REGRESSION VARIABLES CONNECT_T /METHOD=ENTER LOGBID_T100 LogExp_Clean C1_14

55

This variable is a transformation of b1_1 (the actual bid price). We assume that the respondent will disconnect when he

declares that the original bid price is his maximum price to be connected and this original bid price were increased by

100 Taka. 56

The trasnformed bid price equals (1) the original bid price when the respondent would pay a higher amount to be

connected or (2) the original bid price plus 100 Taka when the respondent declares that he would not pay more than the

original bid price to keep connected. 57

Five cases are considered outliers and recoded as missing values (cases with less than 1.000 or more than 250.000 Taka

per month). 58

Three cases, corresponding to -1 and more than 100 years of education, are recoded as missing values. 59

The variables health problems with water, saline and odor have not been considered due to the small percentage of the

sample that had these problems.



2

/CRITERIA=PIN(.05) POUT(.10) ITERATE(20) CUT(.5).

The output obtained is shown below:

Model 1: Estimation and Wald test

B E.T. Wald df p-value Exp(B)

LOGBID_T100 -3.074 0.208 217.969 1 0.000 0.046 LOGEXP_CLEAN

1.137 0.165 47.510 1 0.000 3.118

C1_14 0.061 0.019 9.749 1 0.002 1.062 Constant 5.448 1.797 9.190 1 0.002 232.320

We reject the null hypotheses of any of the coefficients being equal to zero. Then, WTP actually depends on the total expenditure of the household and the years of education of the head of the household. This impact is direct (the higher the expenditure or the education, the higher the WTP), since the sign of the coefficients is positive. Let us assume that WTP=exp(a + b1*LogExp_Clean + b2*C1_14 + u) where a is a constant and u is a random normal noise with expected value zero and standard deviation s. To estimate the WTP according to the model in Gunatilke and Tachiriri (2012): ‘Willigness to pay and inclusive tariff design for improved water supply services in Khulna, Bangladesh’, page 5 model (a), the coefficients of the corresponding probit model should be computed. These coefficients can be approximated by dividing the corresponding coefficient in the logit model by π/3^0.5=1.81. The coefficient of LogBid_T100 in the probit model (with the opposite sign) is 1/s. The coefficients of LogExp_Clen and C1_14 in the probit model are b1/s and b2/s, respectively and its constant is a/s. Then, we can obtain a, b1 and b2 as follows:

Logit Coeff Probit Coeff s b

LogBID -3.074 -1.695 0.590 LogEXP 1.137 0.627 0.370 C1_14 0.061 0.034 0.020 Constant 5.448 3.004 1.772

The WTP60 is given then by:

60

This WTP is gathered in the variable WTP100_EXP_EDU of the companion SPSS database.



3

WTP=exp(1.772 + 0.370*LogExp_Clean + 0.020*C1_14 WTP has a minimum value of 139.67 Taka/month and maximum value of 775.88 Taka/month, with an average of 377.32 Taka/month and a standard deviation of 99.14. The relation between WTP, total expenditure and education is shown in the following graphs:

The direct relation between the WTP and total expenditure is clearly represented in the following box-plot graph, where the deciles of the total expenditure are given by:

Deciles of expenditure (Taka)

10 15470

20 21000

30 27639

40 30000

50 35000

60 40000

70 48423

80 51955



4

Deciles of expenditure (Taka)

10 15470

20 21000

30 27639

40 30000

50 35000

60 40000

70 48423

80 51955

90 70000

3. Impact of water perception in wtp

To test the impact of water quality in the WTP, a logit model with CONNECT_T as dependent variable and LogBid_T10o, Log Exp_Clean , C1_14, a2_1e, a2_1h4, a2_1h6, a2_1h7 as covariates is estimated. The syntax for this new model is as follows:

LOGISTIC REGRESSION VARIABLES CONNECT_T /METHOD=ENTER LOGBID_T100 LOGEXP_CLEAN a2_1e a2_1h4 a2_1h6 a2_1h7 /CONTRAST (a2_1e)=Indicator /CONTRAST (a2_1h4)=Indicator /CONTRAST (a2_1h6)=Indicator /CONTRAST (a2_1h7)=Indicator /CRITERIA=PIN(.05) POUT(.10) ITERATE(20) CUT(.5).

The result of the estimation is:

Model 2: Estimation and Wald test

B E.T. Wald df p-value Exp(B)

LOGBID_T100 -3.077 0.211 211.888 1 0.000 0.046

LOGEXP_CLEAN 1.305 0.165 62.376 1 0.000 3.688

a2_1e(1) 0.063 0.186 0.115 1 0.735 1.065

a2_1h4(1) 0.517 0.253 4.187 1 0.041 1.677

a2_1h6(1) -0.460 0.254 3.285 1 0.070 0.631

a2_1h7(1) 0.374 0.248 2.269 1 0.132 1.453

Constante 4.113 1.812 5.153 1 0.023 61.122

The analysis of the p-values shows that water perception has no impact on the WTP (the only p-value lower than 0.05 is that of the perception of dirtiness of the water, but even in this case the value is quite high 0.041). The reasons for this lack of impact are clearly shown in the following graphs:

Distribution of WTP by expenditure (deciles) and reported problems In each group of income (defined by the deciles of the total monthly expenditure), the distribution of the WTP is quite similar in those cases where problems with water are



5

reported and those with a good perception of the water quality. Moreover, as can be seen in the next graph, most of the problems with water appear in those households with lower income. Then, once the effect of the income is discounted in the logit model, the water quality variables do not modify the WTP of the respondents.



6

WTP by expenditure and reported problems



7

Annex 2: Selected Mohallas

Thana Administrative Unit Residence Community

Households Population Sample Drawn

Zone 5

Gulshan *Karail(Part-2) 1,665 6,065 32

Cantt Thana *Mohakhali D.O.H.S 1,666 7,781 32

Gulshan *Banani Model Town Blok-K 510 2,191 10

Gulshan *Gulshan Uttar-Paschim 1,066 4,868 20

Tejgaon Ind. Area *Kuni Para 8,975 33,913 47

13,882 54,818 141

Zone 8

Badda Khilbarir Tek 6,746 2,8491 59

Gulshan Shahjadpur (Purba & Paschim)

4,510 1,9871 40

Badda Uttar Badda (Paschim) 4,275 17,654 38

Badda Nurer Chala 7,829 32,463 69

Badda Satarkul 2,338 10,127 21

Badda Middle Badda

25,698 108,606 226

Zone 9

Khilkhet Thana Nikunja-2 3,939 17,146 77

Uttara Thana Mollartek 3,725 14,482 73

Uttara Thana Ahalia (Part) 1,487 6,174 29 Uttar Khan Thana Uttar Khan 13,899 59,110 95 Uttara Thana Sector No-5 1,951 8,768 38 Uttara Thana Sector No-14 3,529 15,803 69

28,530 121,483 380

Zone 10

Kafrul Thana Dakshin Ibrahimpur 7,127 24248

75 Kafrul Thana Uttar Kafrul 6,300 26419 67 Pallabi Thana Mirpur Sec-12 (Block-A) 891 4084 9

Kafrul Thana Bhashan Tek 9,027 36525 63 Pallabi Thana Mirpur Sec-11(Block-C)(Part-

2) 1609 6029 1

7 24,954 97,305 253



8

Annex 3 Survey Instrument

SERIAL NUMBER

Are you a (1) landlord or Owner (2) Tenant?

Does your family have a connection with DWASA?

(1) Yes

No

Ward # Address Date Original sample or replacement

Enumerator

(0) Or i g ina l

(1) Rep lacement

Name

ID

Phone



9

Part A. Current water supply conditions

A 1.1 What is the major source(s) of drinking water? (Enumerator: Multiple answers allowed)

(1) Water from the DWASA through a piped connection

(2) Water from the DWASA public tap

(3) Water from the DWASA through tankers

(4) Water from the private tube wells

(5) Water from private water venders (specify ____________________)

(6) Other (Specify _____________________________________)

A 1.2 Is water boiled or filtered for drinking ?

(0). No

(1). Yes

A 1.3 What do you think about the availability of good quality drinking water? (Enumerator: Allow them to answer on their own. If no answer, then prompt with the following)

(1) Abundant throughout the year

(2) Seasonally abundant

(3) Scarce throughout the year

(4) Seasonally scarce



10

A.2 Please tell us the general water use of your family, (including drinking and non-drinking purposes)

Sources Consumption Cost of Water Perception Others

A.2.1

(a) Do you use water from DWASA through piped connection?

(0) No (Go to the next row)

(1) Yes (Fill the right columns)

(b) Is your water connection metered?

(0) No

(1) Yes

(c) How much water do you consume per month?

__________

m3

per month (according to bill) Or, __________

Litre per day (estimated)

__________

m3

per month (compute from estimate)

(d) Perception on availability

0. Insufficient

1. Sufficient

(e) Water Pressure

Inadequate

Adequate

(f) How much do you spend on water per month?

_________

Taka / month (according to bill) Or,

_________

Taka / month (estimated)

(g) Perception on cost

1. Cheap

2. Fair

3. Expensive

(h) Perception on water quality

1. Good

2. Fair

3. Poor (saline)

4. Poor (color)

5. Poor (odor)

6. Poor (dirty)

7. Poor (iron)

8. Poor (other)

9. Seasonally poor

(i) How do you rank DWASA water service standards

1 Very poor

2. Poor

3. Fair

4. Good

5. Very Good

(j) How many hours is the service available?

_____ hours / day

(k) How many families share the connection?

______ families

(l)(a) Do you have storage tank(s)? 0. No (Go to A.2.2) 1. Yes

(l)(b) If yes, tell us about the size of the tank:

1. Cylindrical

diameter:_______ft

Height:________ft

OR,

2. Rectangular

Length:_______ft

Width: _______ft

Height:_______ft

AND,

Volume of the Tank: __________ m

3

(l)(c) How many times a day is the tank filled? _________

(m) Do you have a pump? 0. No 1. Yes

(n) If yes, how many minutes do you run the pump?

………….. minutes



11

A.2.2

(a) Do you use water from DWASA through public taps?

(0) No (Go to Question A.2.3)

(1) Yes (Fill the columns to the right)

(b) How much water do you consume per month?

__________

Number of containers per day

_______ liter

per container

__________

m3 per month

(compute)

(c) Perception on availability

0) insufficient

1) Sufficient

(d) How much do you pay for water?

____________ taka per day

____________ taka per container ____________ taka per month

(e) Perception on cost

1. Cheap

2. Fair

3. Expensive

(f) Perception on water quality

1. Good

2. Fair

3. Poor (saline)

4. Poor (color)

5. Poor (odor)

6. Poor (dirty)

7. Poor (iron)

8. Poor (other)

9. Seasonally poor

(g) What is the distance from the house to the tap

_____ meters

(h) How much time do you spend fetching water?

________________ minutes per day

(i) Who fetches water?

Self

Domestic Helper/ Contract

A.2.3

(a) Do you use water from DWASA through water tankers?



b) How much water do you consume per month?

__________


_______ liter

per container

__________

m3 per month

(compute)


0) insufficient

1) Sufficient


____________ taka per tank

Number of families sharing tank______

____________ taka per month


1. Cheap

2. Fair

3. Expensive


1. Good

2. Fair

3. Poor (saline)

4. Poor (color)

5. Poor (odor)

6. Poor (dirty)

7. Poor (iron)

8. Poor (other)

9. Seasonally poor

(g) How many times do you call the tanker?

______ times / month

(h) How many months do you rely on water from tankers?

________ months / year

A.2.4

(a) Do you use water from private tube wells?

(0) No (Go to


__________

Number of containers


_________


1. Good

(g) How much did you spend to build the tube well and when?

________ taka, _______ years ago



12

Question A.2.5)


per day

_______ liter

per container

__________

m3 per month

(compute)


0) insufficient

1) Sufficient

Taka /day

_________

Taka / container

_________

Taka / month

(compute)


1. Cheap

2. Fair

3. Expensive

2. Fair

3. Poor (saline)

4. Poor (color)

5. Poor (odor)

6. Poor (dirty)

7. Poor (iron)

8. Poor (other)

9. Seasonally poor

[ ] Don’t remember

[ ] I am not owner of this tube well

(h) Who fetches water?

Self

Domestic Helper/ Contract

A.2.5

(a) Do you use water from private water venders?




__________


_______ liter

per container

__________

m3 per month

(compute)


0) insufficient

1) Sufficient



____________Taka / container

_________

Taka / month

(compute)


1. Cheap

2. Fair

3. Expensive


1. Good

2. Fair

3. Poor (saline)

4 Poor (color)

5 Poor (odor)

6 Poor (dirty)

7.Poor (iron

8 Poor (other)

9. Seasonally poor

(g) Please specify the type of vender

1. bottled/jar water

2. water brought by push cart / rickshaw van

3. Others ______________

A.2.6

(a) Do you use water from any other sources?


(1) Yes (Fill the columns to the


__________


_______ liter



____________Taka / container

_________


1. Good

2. Fair

3. Poor (saline)

4. Poor (color)

(g) Please specify the water source

______________



13

right)

per container

__________

m3 per month

(compute)


0) insufficient

1) Sufficient

Taka / month

(compute)


1. Cheap

2. Fair

3. Expensive

5. Poor (odor)

6. Poor (dirty)

7. Poor (iron)

8. Poor (other)

9. Seasonally poor

A.2.7 How often does any of your family member have water borne diseases such as diarrhea and dysentery?

1. Very Often 2. Often 3. Sometimes 4. Never



14

Part B. Contingent Valuation

With the population growing, the government foresees that the water supply situation in the Dhaka will worsen in the next years if no intervention is made soon to address the situation. The Dhaka Water Supply and Sewerage Authority (DWASA) is preparing a project to improve water supply services in your area. The proposed project will involve sourcing raw water from the river to meet the water demand of households and business enterprises. Water will be treated to make it safe for human consumption. This means:

sufficient water will be made available to the household,

water will be safe to drink from the tap and therefore will not need boiling, filtering or treating.

water will be available 24 hours a day with sufficient water pressure so there would be no need to store water.

It is expected that the proposed improvements will reduce incidences of water related diseases. Houses will have meters and the water bill will be charged according to the volume of consumption, so that the lower-income families which use less volume of water will pay less than the others. DWASA will manage the new water supply system with enhanced customer service.

However, to be able to realize these improvements, major investment in water treatments plant and distribution system is necessary. Therefore, it entails costs. The costs for investment and maintenance would have to be shared between the government and the beneficiaries.

Let me conf i rm your response to the f i rs t quest ion. I asked "Does your family have a connection with DWASA?" You answered:

(1) Yes, my fami l y has a connect ion wi th DW ASA.

(ENNUMERATOR, PLEASE GO TO B-1: FAMIL IES W ITH CONNECTION)

(0) No , my fami ly has no connect ion wi th DW ASA.

(ENNUMERATOR, PLEASE GO TO B-2: FAMIL IES W ITHOUT CONNECTION)



15

B.1 FAMIL IES W ITH CONNECTION

Suppose the DWASA will provide these improved services, but it may require higher water bills. Some people say they would stay connected to the improved water supply system because they want the improved service and they can afford the higher water bill. Other people say they would not pay the higher water bill because they do not want improved services or cannot afford the higher bills, and would rather be disconnected. There are no right-or-wrong answers.

We want to know your decision to accept or reject the improved water services and how much you would like to pay for improved services. Please note that the proposed amount is for your household and the government will not contribute to any part of the proposed amount. Therefore, please answer the questions while considering your actual household income level.

Q.B.1.1 Now, I want you to assume that the improved water service would provide sufficient amount of water with good quality 24 hours per day. The proposed amount is not the planned tariff, and we are trying to assess the values of the improved water services. The water bill will depend on the volume of consumption with metering.

If your family had to pay -------taka per month for water for your household what would you do?

Stay connected and pay the bill (Go to the question B.1.2)

Disconnect to avoid the bill (Go to the question B.1.3)

(Enumerator: If the response is "I do not know", ask again. You may come back later if somebody else in the family can answer question)



16

Q. B.1.2 What are your main reasons for staying connected to the network? (Enumerator: Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

I really want/need the improved water service

The proposed water bill is not too high

I am worried about the health risks of the existing water service

(4) I do not have alternatives sources of water

(5) Other (please specify): ________________

(6) Don’t know/not sure

Q. B.1.3 If needed, would you be willing to pay more than _______?

(o) Yes

(1) No (Go to Part C)

Q. B. 1.4 If yes, what is the maximum you are willing to pay? Taka

(Go to Part C)

Q. B.1.5 What are your main reasons for choosing to not pay the bill and disconnect from the network? (Enumerator: Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

I do not really want/need the improved water service

The proposed water bill is too high; I cannot afford it

I am not worried about the health risks of the existing water service

I don't believe DWASA will provide better water service under the new project

(5) I have alternative sources of water

(6) Other (please specify): _______________


Q. B.1.6 If you disconnected from the water network, where do you think your household would obtain your water supplies? (Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)



17

Public taps

Private tube wells

Neighbors

Public tube wells

Private vendors and tankers

Other (please specify): _______


(Go to Part C)



18

B-2.FAMIL IES W ITHOUT CONNECTION

Suppose the DWASA will provide these improved services, but with higher water bills. Some people say they would get a connection to the improved water supply system because they really want the improved service and they can afford the higher water bill. Other people say they would stay disconnected because they cannot afford the higher water bill. There are no right-or-wrong answers.

We really want to know your decision to accept or reject the improved water services and how much you would like to pay for improved services. Please note that the proposed amount is for your household and the government will not contribute to any part of the proposed amount. Therefore, please answer the questions while considering your actual household income level.

Q. B.2.1 Now, I want you to assume that the improved water service would provide good quality and sufficient water for 24 hours per day. The proposed amount is not the planned tariff, and we try to assess the values of the improved water services. The water bill will depend on the volume of consumption with metering.

If you had to pay -----------Taka per month per household and in addition you need to pay a one time cost to make connection for approximately ----------- Taka. What do you think your household would do?

(1) Get a connection exclusively for my family and pay the bill (Enumerator: Go to the question B.2.2)

(2) Get a connection with other families and pay the bill (Enumerator: Go to the question B.2.2)

(3) Stay disconnected to avoid the bill (Enumerator: Go to the question B.2.3)

Q. B.2.2 What are your main reasons for getting a connection? (Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

I really want/need the improved water service

The water bill is not too high

I do not have alternatives sources with good amount of water

I am worried about the health risks of the existing water service

(5) Other (please specify): _______


Q. B.2.3 Please confirm if these are the maximum amounts you are willing to pay for the improved water services as well as the one-time connection on a monthly basis.

(0) Yes (Go to Part C)



19

(1) No

Q. B.2.4 If not, how much? Taka

Q. B.2.5 What are your main reasons for staying disconnected? (Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

The monthly water tariff is too high, though I can afford the connection charge

The connection charge is too high; though I can afford the monthly charge

Both monthly tariff and connection charge are too high

The sum of monthly tariff and connection charge is too high

I do not really want/need the improved water service, regardless of the costs

I do not believe that the DWASA can provide such a good service

I have good alternative water sources



Q. B.2.6 If you do not connect to the water network, where do you think your household would obtain your water supplies? (Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

Public taps

Private tube well

Neighbors

Community schemes

Private vendors and tankers





20

Q.B.2.7 What is the main reason for your not having connected to the network until now? (Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

Cost of connection is too high

Monthly bill is too high

My application is still pending

My house is too far from the network

I am satisfied with my current water sources

DWASA does not provide good amount of water

DWASA does not provide good quality of water

Other (please specify):______

Q. B.2.8 Have you had connection with DWASA before, and disconnected? (Allow them to answer on their own. If no answer, then prompt with the following. Multiple answers allowed)

No, I have never had a connection with DWASA

Yes, my connection was disconnected because I did not pay the bill

Yes, I disconnected the connection because there was no water

Yes, I disconnected the connection because the quality of water was bad

Yes, I disconnected the connection because the bill was too high

(6) Yes, I disconnected the connection for other reasons (Specify ________________)

(Go to Part C)



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Part C. Socio-economic status of family

C.1 Personal details of the family:

Family member Gender

(M/F)

Age Highest educational attainment (refer to code 1 below)

No. of years of education

Occupation (refer to code 2 below)

Head

Spouse

Number of family member _______________ persons

Code 1:

1. Never been to school

2. Primary school

3. SSC

4. HSC

5. Madrassa

6. Vocational and technical school

7. College, University or above

Code 2:

1. Employee of a state owned enterprise

2. Employee of a private enterprise

3. Government employee (including teachers)

4. Doctor

5. Own business

6. Daily labor

7. Homemaker/house wife



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8. Retired, pensioner

9. Student

10. Unemployed

11. Overseas workers

12. Other (please indicate) …………

C 2. (Enumerator: Apologize for asking private questions. Explain that the question is for study purposes and the responses will be kept confidential. The information will be coded and it will be impossible to identify your family)

What are the average monthly or annual expenditures of your family?

(Enumerator: fill either monthly or annual column)

Item Monthly expense (TAKA)

Annual expense (TAKA)

Note (if any)

Electricity

Total

(Enumerator: Please try hard)

C.3 What is the monthly income of your household? The information will be kept confidential.

Family member

Monthly income

Head

Spouse

Other Family member

Remittance

Total



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Remarks / Notes of enumerator (such as degree of confidence on their reply, angry reaction, or potential agitation against the project). Try to capture the feelings of the respondent as to the main issues.)

Remarks / Notes of supervisor Quality of survey response: (1) Good, (2) Fair, (3) Unacceptable

Remarks / Notes of data recorder



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APPENDIX 15: ANNEX 1 TO LEGAL REPORT

Final Report: Annex 1 “Legal Review”

1. Constitution of the People’s Republic of Bangladesh

Pursuant to Article 145 of the Constitution of the People’s Republic of Bangladesh, all contracts and deeds made in exercise of the executive authority of Bangladesh shall be expressed to be made by the President, and shall be executed on behalf of the President by such person and in such manner as the President directs or authorizes.

Therefore, any Concession Agreement or otherwise any sort of agreement executed between a private firm and a government entity would be deemed to be between the private entity and the President of Bangladesh, acting on behalf of the People’s Republic of Bangladesh.

2. Strategy and Policy for PPP and Guidelines for formulation, appraisal and

approval of large (medium and small) projects; both from 2010.

Under the Policy and Strategy for Public-Private Partnership (PPP), 2010 (“PPP Policy 2010”), the ‘concept’ of PPP is described, inter alia, as follows:

a. PPP is a win-win relationship between the government and various private sector players for the purpose of delivering a service by sharing the risks and rewards of the venture under a contractual obligation;

b. A project under PPP may include all stages of life-cycle starting from design, construction of infrastructure, where necessary and up to delivery of services and maintenance;

c. The private sector assumes the active party who undertakes activities, depending on the model, starting from the stage of conception and up to the stage of operation and maintenance;

d. In most of the cases, PPP allows the private sector into areas of business, where the government holds control over infrastructure or service before such partnership. The public sector retains a significant role in the partnership, either as the sole purchaser of the services provided or as the main enabler of the project. The private party commonly provides the detailed design, construction, operation and financing for the PPP project, and is paid according to the performance.

The PPP Policy 2010 also negatively defines PPPs by way of exclusion; for example, outsourcing of a simple function of a public service, creating a government owned enterprise (State Owned Company) and borrowing by government from the private sector are not PPPs.

The above is clearly indicative of the fact that the Government or any Governmental authority may not enter into any PPP contract or otherwise be approve or be involved with any PPP Project which would result in a State Owned Company or which would require the government or such government authority or agency to borrow funds from private companies. This would mean that a Joint Venture Company if it classifies as State Owned Company, cannot be a PPP. This begs the question of classification of a jointly owned company as “state owned”.



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There is no express provision under the Companies Act 1994 (“CA 1994”) whereupon a ‘State Owned Company’ is defined or otherwise characterised. However, pursuant to Section 2(2) of the CA 1994, a company shall be deemed to be a subsidiary of another company if the other company controls the composition of the Board of Directors of the ‘subsidiary’ company. In this regard, the composition of a company’s Board of Directors shall be deemed to be controlled by another company if that other company, by the exercise of some power exercisable by it at its discretion without the consent or concurrence of another person, can appoint or remove the holders of all or a majority of the directors. Furthermore, if the one company holds more than 50% of another company’s equity share capital in nominal value, then the company whose shares are retained by the other company may be deemed as its subsidiary.

Therefore, in the event that the Board of Directors of a private enterprise is controlled by the Government or a Government Authority, or if the Government or Government Authority holds more than 50% of the private enterprise’s equity share capital in nominal value, then the private enterprise may be deemed to be a State Owned Company as it would be a subsidiary of the Government Authority.

A contrario, if the private sector holds more than 50% of the shares, or controls the Board of Directors, then it is not a State Owned Company and the restrictions would not apply.

Under the PPP Policy 2010, the water and wastewater sector are expressly mentioned as a priority sector for PPP eligibility. Also, at the time of contract award, any private enterprise intending to work on a PPP Project in Bangladesh must be registered as a legal entity in Bangladesh. Furthermore, detailed and specific eligibility criteria will be specified in relevant Request for Qualification (RFQ) and Request for Proposal (RFP) documents for any specific partnership. PPP projects may enjoy import tax breaks and profit tax exemptions. Additionally, any specific project may get special unique incentives with the approval of the CCEA which shall be declared in the RFP documents. Special incentives may be extended to PPP projects targeted for rural or/and underprivileged population. Special incentives may be given to non-resident Bangladeshis (NRBs) to invest in PPP projects.

The PPP Policy 2010 also establishes an institutional framework for PPP as follows:

a. Public-Private Partnership Advisory Council (PPPAC);

b. Cabinet Committee on Economic Affairs (CCEA);

c. Office for Public-Private Partnership;

d. Line Ministry/implementing agency;

e. Finance Division; and

f. Planning Commission

The PPP Advisory Council (PPPAC) will advise on the overall PPP policy and give broad guidance on PPP affairs. The role of the PPPAC is:

a. To provide guidance to Office for Public-Private Partnership, line Ministries,

when necessary, for accelerating PPP Projects; b. To provide advice on any possible bottlenecks relating to interministerial

coordination for implementation of PPP projects; and c. To review and ensure achievement of PPP targets at a national level.



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The Office for Public-Private Partnerships (PPP Office) shall support Line Ministries in identifying, formulating, selecting, contracting and monitoring implementation of PPP projects. The PPP Office will also coordinate among various government and private agencies for fast tracking PPP projects and shall consist of officials recruited from public sector and private sector, selected on a competitive basis, having knowledge and expertise on infrastructure/PPP projects. The PPP Office is headed by a Chief Executive Officer (CEO) who reports directly to the Prime Minister of Bangladesh.

The Finance Division is primarily responsible for examining PPP proposals from financing perspective and managing various financial participation of the government in PPP projects. Furthermore, the role of the Finance Division is as follows:

a) To issue procedure and guidelines for financial participation of the

Government approved by the CCEA; b) To approve annual allocation for technical assistance for PPP projects and

capacity building within the government; c) To arrange annual allocation for VGF for PPP projects ; d) To appraise and approve funds for VGF for the selected projects as per

concession agreement; and e) To channel funds for infrastructure financing through specialized financial

institutions.

A Planning Commission is primarily responsible for inclusion of linked components of PPP Projects into the ADP, if and where applicable. The Planning Commission expedites the Linked Components which are included in the ADP to ensure timely progress of the relevant PPP projects and develop necessary procedures; it shall review ADPs in order to avoid duplication of efforts/projects.

The PPP Policy 2010 also makes provisions for 3 (three) classifications of PPP Projects in terms of the investment size of the said PPP Project. They are separated into Large, Medium and Small Projects, with Projects being classified as ‘large’ if the estimated total investment is above BDT 2.5 billion, excluding on-going capital for expansion. Furthermore, a Project is classified as ‘medium’ if the estimated total investment is between BDT 500 million and BDT 2.5 Billion, and a Project is classified as ‘small’ if its estimated total investment is below BDT 500 million.

The PPP Policy 2010 also provides for a number of types of financial participation of the Government of Bangladesh. However, only 3 (three) types of financial participation is dealt with by the PPP Policy 2010. The 3 types of financial participation dealt with by the 2010 Policy are as follows:

a) Technical Assistance Financing: this is for pre-feasibility and feasibility studies for

PPP Projects, preparation of RFQ and REP documents for PPP Projects, preparation of PPP contracts, PPP related capacity building in the Line Ministries/Implementing Agencies and other relevant agencies and, PPP related awareness building such as road shows, exhibitions, etc.

b) Viability Gap Financing: This concerns capital grant or annuity payment or both. Viability Gap Financing in the form of capital grant shall be disbursed only after the private enterprise has expended the equity contribution required for the Project; the said Viability Gap Financing is to be managed by the Finance Division and is for disbursement upon the request by the Line Ministry/Implementing Agency as per the terms of the PPP Contract/Agreement.



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c) Infrastructure Financing: The infrastructure financing is an arrangement for extending financing facilities for PPP projects in the form of debt or equity through specialized financial institutions such as Bangladesh Infrastructure Finance Fund (BIFF) and Infrastructure Development Company Limited (IDCOL). The Government may participate in such financing arrangements through necessary budget provision.

Depending on the nature of PPP projects, the line Ministry/implementing agency may consider financing and implementation of linked activities such as acquisition of land, rehabilitation and re-settlement, provision of utility services, construction of approach roads to the main highways and activities of similar nature, either by:

a) Financing as part of the PPP project; the implementation may be done by the

private investor or by the relevant line Ministry/ implementing agency, as appropriate; or

b) Financing as well as implementation (of these activities) will be done by the government. Implementation will be expedited by the government

The PPP contract will include an “Exit Clause” which specifies the terms and conditions of a potential exit of a current private investor, the possible transfer of ownership to a new investor, or partial or complete divestiture of ownership to capital markets. Such terms and conditions will identify the minimum duration after the commercial operations date during which an exit is not allowed.

3. Public procurement act 2006, public procurement rules 2008 (rule 129) Public Procurement is governed by the Public Procurement Act 2006 and the Public Procurement Rules 2008, which apply to procurement of goods, works or services by any procuring entity using public funds, by any government, semi-government or statutory body established under law; and this includes the procurement of goods, works or services under a loan, credit or grant agreement or any other agreement with a development partner or with a foreign state or an organisation. A “procuring entity” means a public body having administrative and financial powers to undertake procurement of goods, works or services using public funds. Pursuant to Section 27 of the 2006 Act, any person may, individually or in joint venture along with another person or persons, national or foreign, submit an application, an expression of interest, a proposal or a tender. A Joint Venture may be between international entities, or between an international and local entity(ies) pursuant to Section 39 (4) of the 2006 Act. Pursuant to Section 5 of the 2006 Act, the procuring entity shall prepare the necessary application, tender or proposal documents and issue those documents to persons interested in submitting an application, tender or proposal, using standard documents developed by the government. Following a tender, the Evaluation Committee (established under the 2006 Act), the “approving authority”, as specified in the delegation of financial powers, may approve the recommendations of a tender or proposal evaluation committee, or reject the same explaining the reasons thereof and direct that the tender or proposal be re-evaluated or reprocessed. If a company’s application, tender or proposal is accepted, the procuring entity shall publish the notification of award of contract in the prescribed format on its notice board and on its own website, if any, and for contracts above a prescribed price limit,



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shall send a copy of the notification of award of contract to the authority as designated by the government for publication on their website. Under Section 32 of the Act, the procuring entity may opt for Limited, Direct, Two-Stage or Request for Quotation tendering methods, subject to the approval of the head of the said procuring entity. The Public Procurement Rules 2008, Rule 54 states that Joint Ventures and states that each partner of the Joint Venture, Consortium or Association shall be jointly and severally liable for all liabilities and ethical or legal obligations under the contract. Additionally, under Rule 54(9) of the 2008 Rules, the composition or the constitution of a Joint Venture / Consortium shall remain intact and not be altered prior to the execution of the Contract; any changes at a later date require prior approval of the Head of the Procuring Entity. Pursuant to Rule 129 of the Public Procurement Rules 2008, the Government may, in accordance with Guidelines and model contract documents issued by it, enter into a concession contract with a Person for the provision and operation of public utilities and services incidental thereto through a Build Own Operate (BOO), Build Operate Transfer (BOT), Build Own Operate Transfer (BOOT) agreement or similar type of agreement with joint public and private financing or with entirely private financing. Furthermore, the concessionaire or entrepreneur under the BOO/BOT/ BOOT or similar type of Contract needs to be selected under Open Tendering procedure, implying a combination of evaluation criteria (technical and financial). Therefore, although the Public Procurement Act 2006 and the Public Procurement Rules 2008, especially Rule 129, does not categorize PPP models, but umbrella like cater for all sorts of PPP, both the BOT (and derivaties) and the Joint Venture types. However, with the imminent entering into force of the PPP Act 2012, these provisions would cease to be in force for PPP type of arrangements.

4. Dhaka Water Supply and Sewerage Authority (Finance) Rules 2009 The Dhaka Water Supply and Sewerage Authority (Finance) Rules 2009 (hereinafter to be referred to as the “DWASA Rules 2009”) lays down provisions related to the control of finances by the Dhaka WASA (Water Supply and Sewerage Authority). Although most of the provisions relate to the internal workings of budget management, etc, it is pertinent to note that certain provisions may have implications to any PPP Project or PPP Contract entered into by itself. Rule 8 of the DWASA Rules 2009 relates to the rent payable to the Dhaka WASA for any land property leased by the same to a person or entity not under its employment. The implications of this Rule seem to cement the provision under Section 17(6) of the WASAA 1996, where it is stated that the WASAA may deal with property in a number of ways. Furthermore, and more importantly, Chapter 6 of the DWASA Rules 2009 provides for Construction Works that may be implemented by the Dhaka WASA pursuant to the Public Procurement Rules 2008. According to Rule 48 of the DWASA Rules 2009, the Dhaka WASA may enter into agreements with a private enterprise and may do so after following, inter alia, the procedures under the Public Procurement Rules 2008.



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In addition, such procurement may be done by way of open tendering, and it is stated that if any contract is to be entered into by the Dhaka WASA with an entity which was chosen despite another private enterprise submitting the lowest bid for the said tender, the reasons for choosing the non-lowest bidder must be put on record, and under Rule 50 of the DWASA Rules 2009, the Dhaka WASA must submit such reasons to a Senior Authority for their approval. Therefore, it is apparent that under the DWASA Rules 2009, the Dhaka WASA is not bound to accept only the lowest bidder in a tender, but may choose any other tenderer as long as it records its reasons accordingly and obtains approval of a Senior Authority. These Rules might need amendment with entering into force of the PPP Act 2012.

5. Arbitration Act 2001 In Bangladesh, arbitration is governed by the Arbitration Act 2001, which lays out the principal laws and principles in arbitration matters, as well as enforcement of arbitral awards given both locally and abroad. Furthermore, Bangladesh has acceded to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards concluded at New York on 10 June 1958 (the “New York Convention”) and has duly implemented the New York Convention in Bangladesh. Arbitration decisions or awards made in other states which have acceded to the New York Convention (including decisions or awards made in an arbitration in London under the Rules of Arbitration of the London Court of International Arbitration (the "LCIA Rules") for as long as the United Kingdom remains as a state which has acceded to the New York Convention) will therefore be enforced in Bangladesh in accordance with the New York Convention and the terms of Bangladesh’s accession to the New York Convention.

6. Privatisation Act 25/2000 The Privatization Act 2000 was enacted in order to establish the Privatization Commission in Bangladesh, governing the privatization of Governmental industrial or commercial assets in Bangladesh. Pursuant to Section 2(i) of the Privatization Act 2000 defines the public assets (Governmental industrial or commercial establishments). Privatisation of public assets can be effected through either of the following:

(a) Sale through international tender - Local or foreign through "sealed confidential tender" or "open tender".

(b) Sale of government shares in the capital market - The Privatization Commission sells all or parts of the public owned shares via the Investment Corporation of Bangladesh (ICB) or any Member of the Stock Exchanges or any broker firm.

(c) Transfer of a portion of the shares to the employees of the enterprises in case of selling the shares through the stock exchange.

(d) Sale of government shares of the private limited company.

(e) Restructuring method – In the event that an enterprise is under the burden of a substantial loan and no potential bidder has participated even when the tender has



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been floated twice for sale of the said enterprise, the Privatization Commission has the option to restructure the company and this way make a sale more likely.

(f) Mixed sales methods - the Privatization Commission may use different methods for privatization, in which a part of the shares may be sold by tender and the remaining portion may be sold on the Stock Exchange.

(g) Management contract - the Privatization Commission may invite bidders by open tender for transferring the management of it for a certain period. This contract may not exceed more than three years.

(h) Leasing out - as an alternative to the management contract the Privatization Commission may lease out any enterprise identified for privatization or any part of its assets.

(i) Direct asset sale (liquidation) for public assets that could otherwise not be sold.

(j) Other options - If the privatization of any enterprise is not possible through adoption of any of the methods mentioned above, the Privatization Commission may apply any other option for privatization of the public asset / enterprise. Currently, non-financial public enterprises in the country have been categorized into seven sectors, namely:

• Industry • Power, Gas and Water • Transport and Communications • Trade • Agriculture • Construction • Services

Since 1993, 74 State Owned Enterprises have been privatised; until today, no public asset / public enterprise of the Water Supply and Sewerage Authority (WASA) was privatised.

Therefore, it is possibly, yet unlikely that a privatization of WASA is an option under the Privatization Act 2000.

7. Water Supply and Sewerage Authority Act 1996 The Water Supply and Sewerage Authority (“WASA”) is governed by the Water Supply and Sewerage Authority Act 1996 (hereinafter to be referred to as the “WASAA 1996”). The said Act lays down a number of provisions regarding the power of the WASA in terms of receiving finance, entering into agreements and land acquisition, all of which have deep implications in any PPP Project undertaken with the involvement of the said Statutory Authority. Under Section 10(i) of the WASAA 1996, the WASA has the authority or otherwise power to approve the financing of investment and to allocate resources for such investment. Therefore, we can clearly see that the WASA has the authority to invest, which may include companies. Such investment may be necessary in the event that the WASA enters into a Joint Venture with a private enterprise, and furthermore, the



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WASA may hold a maximum of 49% of the shares in the JV Company as per the provisions of the PPPA 2012. Pursuant to Section 15 of the WASAA 1996, the WASA may in writing, by way of general or special order delegate any of its powers, duties, rules or responsibility to any employee, especially the Chairman or Vice Chairman of the WASA. Therefore, the WASA may authorise any of its officers to enter into any agreement, such as a Joint Venture Agreement or a Concession Agreement, on behalf of the WASA itself. Section 17 WASAA 1996, WASA may compose schemes involving construction, development and conservation, for the purpose of collecting, treating, pumping, storing and supplying fresh drinkable water. For this purpose, under Section 17, the Managing Director of the WASA must present the scheme, along with the an outline of the costs, benefits and feasibility of the same to the WASA Board, and if the scheme requires financing by the Government of Bangladesh, then the “scheme” must also be submitted to the relevant Governmental body. This “scheme” shall then be implemented, subject to the approval of the Government or the WASA Board, and pursuant to Section 17(6) the WASA has the authority to, inter alia, acquire, purchase, exchange, retain, mortgage, dispose of, be bound by, sell off any moveable or immoveable property as well as enter into any agreement/contract and/or be bound by any obligations in order to fulfil its duties and obligations. Section 27 of the WASAA 1996 states that WASA may enter into any agreement for the purposes of any activity contemplated under the WASAA 1996, and such includes agreements for supply of goods and carrying out of works. Additionally, under Section 43 of the WASAA 1996, if WASA requires any land property for any public purpose, it may apply for such land as a requiring authority under the Acquisition and Requisition of Immovable Property Ordinance 1982. Under Section 24 of the WASAA 1996, only WASA may create or establish facilities for the collection, treatment, pumping, storage or supply of potable water. On the other hand, under Section 24(2) of the 1996 Act, WASA may delegate this competency to another “person” to establish such facilities, if and to the extent WASA lacks capacities to create and/or establish these facilities. As per Section 32 of the 1996 Act, WASA is authorised to borrow funds from banks or otherwise financial institutions; and under per Section 33, if such a loan facility is taken out by the WASA, then these funds cannot be utilised in any project or use other than the reason for which the money was borrowed in the first place. Therefore, WASA is authorised to enter into any Concession Agreement, Water Purchase Agreement or any other agreement as may be required in order to implement a PPP Project, and its powers and authorisation extends to any type of model of the same, such as a BOT Model or a JV with a private enterprise, due to its powers to purchase, acquire, etc moveable and immoveable property, such as shares in order to invest in a company.

8. Contract Act 1872 The law of contracts in Bangladesh is governed by the Contract Act 1872 (Act No. IX of 1872) (“Contract Act”). The Contract Act came into force in British dominion of Bengal in 1872, and was adopted in Bangladesh without change. Thus interpretation of contracts under the Contract Act has been primarily based on the English



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Common Law concept of contract, and as such the English Common Law rules of interpretation applicable to contracts are also applied by the Bangladesh Courts while interpreting contracts under the Contract Act. Moreover, the Contract Act, in almost similar form, is applied in India, and thus the jurisprudence of Indian Superior courts, in particular, Indian Supreme Court are of persuasive value under Bangladesh Law.

It has been held by the Appellate Division of the Supreme Court of Bangladesh in the case of Bangladesh Air Services (Pvt) Ltd v British Airways BLC, (1997) 49 DLR (AD) 187 that the legal provisions under Indian Jurisprudence and English Law, would, in cases of similarity, apply to Bangladesh Law under the doctrine of pari materia. Some conclusions can be drawn from this: (a) for the purpose of entering into a PPP Agreement the private enterprise must be a legal entity, being a company incorporated within the jurisdiction of Bangladesh, or at least a Branch office registered in Bangladesh; and (b) Section 28 stipulates, in principles, that arbitration can be used as a matter so resolve disputes. Section 74 of the Contract Act allows to cap liability and to determine compensation for breaches of contract. Should the parties to a contract submit to the jurisdiction of a Court outside of the jurisdiction of Bangladesh, such as English Courts, and subsequently if one or more of the contracting parties obtains an award against another party or parties in such proceedings, then the award would be enforceable in Bangladesh, as if it is an award of a competent Bangladeshi Court (but note Section 13 of the Civil Code, determining the conditions under which a foreign judgement is enforceable in Bangladesh).

9. Acquisition and Requisition of Immovable Property Ordinance 1982 Under the laws of Bangladesh, the government has two options to acquire the title to land; (1) the land title is acquired by way of a Land Acquisition Case (“LA Case”) under the Acquisition and Requisition of Immovable Property Ordinance, 1982 (“1982 Ordinance”) and (2) where the title has always been government property since the Independence of Bangladesh, under the Vested Property Act. Under the Rules of Business 1996 in Bangladesh, the government land property shall belong to the Ministry of Land, who shall vest the title to the said property upon the relevant District Commissioner. Therefore, it is only the District Commissioner which may possess title to the Demised Property and not the WASA. However, WASA or any other such governmental entity may request land and title (property) as a requiring authority, and in that case, the District Commissioner can, by due instrument, delegate to WASA the authority as an owner or otherwise grant rights to the land, which may include the authorisation to grant any term in any Land Lease Agreement or other Contract envisioned under the PPP Scheme.

10. Foreign Private Investment (Promotion and Protection) Act 1980 Pursuant to Section 4 of the Foreign Private Investment (Promotion and Protection) Act 1980 (“FPIA“), the Government of Bangladesh shall accord fair and equitable treatment to foreign investment which shall enjoy full protection and security in Bangladesh. Section 5 of the Act, regulates that the terms of any sanction, permission or licence granted by the Government of Bangladesh to a company having foreign private investment status, shall not be unilaterally changed adversely altering the conditions;



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nor shall foreign private investment be accorded a less favourable treatment than what is accorded to similar private investment by the citizens of Bangladesh in the application of relevant rules and regulations. Under Section 2(c) of the FPIA, “industrial undertaking“ means an industry, establishment or other undertaking engaged in the production or processing of any goods, or in the development and extraction of such mineral resources or products, or in the providing of such services, as may be specified in this behalf by the Government of Bangladesh. Pursuant to Section 7 of the FPIA, foreign private investment shall not be expropriated or nationalised or be subject to any measures having effect of expropriation or nationalisation except for a public purpose against adequate compensation which shall be paid expeditiously and be freely transferable. In explaining “adequate compensation“, Section 7(2) of the FPIA stated that such adequate compensation shall be an amount equivalent to the market value of investment expropriated or nationalised immediately before the expropriation or nationalisation. In terms of repatriation of investment, pursuant to Section 8 of the FPIA, the transfer of capital and the returns from it and, in the event of liquidation of industrial undertaking having such investment, of the proceeds from such liquidation is guaranteed, subject to the right which, in circumstances of exceptional financial and economic difficulties, the Government of Bangladesh may exercise in accordance with the applicable laws and regulations in such circumstances. Therefore, protection is accorded to foreign investors in Bangladesh, which would mean that any company formed in Bangladesh with foreign investment or any company registered in Bangladesh due to a Joint Venture between a foreign enterprise and a state-owned entity or authority would enjoy at least equal treatment to those of companies with local investment. This is a rather weak regime and therefore “special treatment” of the investor consortium will need to be arranged, guaranteeing, for example, free and undisturbed repatriation of profits at all times (to the extent not covered by the Foreign Exchange Regulations and other applicable legislation), corporate and income tax brakes, etc.

11. Foreign Exchange Regulations Act 1947 Bangladesh Bank Guidelines on Foreign Exchange Transactions All foreign exchange transactions, including equity and debt finance and importing securities are governed by the Foreign Exchange Regulation Act 1947 (“FERA”) and the Bangladesh Bank Guidelines on Foreign Exchange Transactions (“BB Guidelines”). According to Chapter 5, Section II of the BB Guidelines, Bangladesh does not impose any restriction on inward remittance of foreign currency and as such investors may freely inject into the economy. Chapter 6, paragraph 6 of the BB Guidelines read in conjunction with FERA further confirms that there are no restrictions on import of securities into Bangladesh. Section 4 FERA obliges all purchase, borrowing, selling, lending and/or exchange of foreign currency through an authorised dealer (“AD”) (any bank authorised by the Bangladesh Bank to deal with foreign currency) only. Section 5 FERA read in conjunction with Chapter 9, Section II, paragraph 7 of the BB Guidelines lists the



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circumstances for which special permission needs to be taken from the Bangladesh Bank (“BB”) in order to remit currency from Bangladesh. The remittance of funds abroad will not fall within the ambit of the general permission, as prescribed by law, and as such, prior special permission from the Bangladesh Bank must duly be acquired in order to remit all sums due to non-resident investors in the form of dividends, proceeds, fees, interests, profits or otherwise. Also, Section 13 regulates that irrespective of the type of securities created for funding of a the project, the transfer of any security to any investor in the project outside Bangladesh would prima facie require permission from BB since it is unlikely to fall within the purview of general permission. FERA and the BB Guidelines define ‘security’ as shares, stocks, bonds, debenture stocks and Government securities, deposit receipts in respect of securities and units or subunits of unit trusts and includes coupons or warrants representing dividends or interests. Section 18B FERA obliges to obtain a special permission from the BB before continuing or establishing in Bangladesh a branch, office or any other place of business for carrying on any activity of a trading, commercial or industrial nature, namely non-residents, those who are residents but not citizens of Bangladesh and those companies (except banking companies) whose place of incorporation is from outside Bangladesh. As such, irrespective of howsoever the PPP structure is devised, permission from BB needs to be acquired before implementation of the PPP project. Where the financing of the project is through equity investment, Chapter 9, Section I of the BB Guidelines comes into force which allows foreign investors to freely invest in Bangladesh in most industrial enterprises, either on their own or through joint collaboration with local investors. It is advised though that registration of either venture is secured by registration with the Board of Investment. According to the BB Guidelines, Chapter 9, Section I, paragraph 2(A) prior permission of BB is not required for issue of shares in favour of non-residents against foreign investment and general permission is accorded upon fulfilment of the following conditions: a) Acquisition of permission from the Registrar of Joint Stock Companies and Firms (“RJSC”)/Securities and Exchange Commission (“SEC”) about issue of capital; b) Shares are to be issued either against freely convertible foreign exchange brought in from abroad through the banking channel or against import of capital machinery. Payment against such import must be made from abroad; c) the Foreign Exchange Investment Department of BB must be informed through the concerned AD about the issuance of shares to the non-residents. Furthermore, pursuant to paragraph 2(B) transfer of Bangladeshi shares and securities from one shareholder to another irrespective or their nationality/residency does not prima facie require approval of BB. However, for transfers of shares between private/public companies not listed in the Stock Exchanges, from resident to non-resident, the BB must be informed within 14 (fourteen) days from the date of such transfer. With regards to the above investment, Non-Resident Taka Accounts are also allowed to be opened in the name of the company in which equity investment is made without prior approval from BB in order to remit the investment from abroad.



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Where financing is brought in through debt financing, pursuant to sections 4, 5 and 13 FERA highlighted above, prior permission needs to be sought from BB to receive funding from non-resident persons (including bodies) and if applicable, also for issuance of guarantee in favour of the non-resident lenders. In a BOT model, where the ultimate objective is to transfer ownership of the infrastructure to the local authorities, remittance of sales proceeds from the investments (based on the assumption that the investment is in an unlisted/private limited company) would require prior permission from the BB for such repatriation. In determining the remittable amount, the BB calculates the net asset value (NAV) on the audited financials as on the date of sales and which shall, even if it exceeds the face value of the share of the company, be repatriable. However, only the NAV shall be repatriable even if the declared sale value exceeds the NAV. Where the company formed in Bangladesh eventually becomes a public limited company listed with the Stock Exchange(s), no approval shall be required from BB for remitting the sales proceeds of securities held by any non-resident. Notwithstanding the foregoing the repatriable amount must not exceed the market price of securities prevailing in the Stock Exchange(s) on the date of sale(s) (Chapter 9, Section I, paragraph 3 of the BB Guidelines).

12. Imports and exports (Control) Act 1950 The primary laws on imports and exports are laid down in the Imports and Exports (Control) Act 1950 (“1950 Act”) which defines ‘import’ and ‘export’ as respectively bringing into, and taking out of, Bangladesh by sea, land or air. Section 3 of the 1950 Act imposes that in order to import or export goods to and from Bangladesh, requisite license must be obtained from the Chief Controller of Import and Export (“CCIE”). Therefore, any plant, machinery, equipment, spare parts, materials and supplies required for the project must be imported into Bangladesh after having acquired appropriate import license for the goods and export license/no objection certificate from the CCIE for those which will not form a permanent part of the project.

13. Income Tax Ordinance 1984 The tax liabilities of a person depends on his/her total income for the year as directed by the Income Tax Ordinance 1984 (“ITO”). As such, income earned in Bangladesh shall be taxable. Income is said to accrue or arise in Bangladesh, pursuant to section 18 ITO and income earned by the investors from the project shall, per se, be deemed as income accruing and/or arising in Bangladesh and is as such taxable. Section 20 of the ITO further confirms the following, inter alia, as the heads of income, salaries, interests on securities, income from business or profession and capital gains. Section 28 describes the following, inter alia, as income from business or profession (profits and gains of any business or profession carried on), or deemed to be carried on; Section 31 describes capital gains, in respect of any profits and gains arising from the transfer of a capital asset and such profits and gains shall be deemed to be the income of the income year in which the transfer took place. Nevertheless, importantly, section 46C ITO provides exemptions from taxation for newly established physical infrastructure facility set up in Bangladesh between 01 July 2011 and 13 July 2013 (inclusive), with respect to income and profits and gains pursuant to section 28 for a period of 10 (ten) years, with 100% exempt in year 1 and then gradually decreasing to 25% exemption in the last two years. The section further defines, at sub-section 2(i), “physical infrastructure facility” to include, inter alia, ‘large water treatment plant and supply through pipe line’.



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Section 46C(3) lays down certain conditions for the exemption, being established in Bangladesh under the Comapnies Act 1994, between 10 and 30% of the income is re-invested, etc. As such, upon application to the NBR under this section, it may be possible for the investors to enjoy tax exemption for a period of up to 10 (ten) years, unless otherwise determined by the NBR. The Board shall, upon submission of the application give its decision within 45 (forty five) days from the date of receipt of the application by the NBR, failing which the facility shall be deemed to have been approved by the NBR.

14. VAT Act 1991 The VAT Act 1991 (“VAT Act”) provides the laws on value added tax (“VAT”) on goods and services and identifies those goods and services which are exempted from VAT. Section 5(1) of the VAT Act provides that in the case of importation of goods, the value on which added value tax is to be paid shall be determined by adding the import duty and other duties, including additional duties of customs, and taxes (if any), excluding advance income tax, to the value chargeable with import duty under section 25 of the Customs Act (described hereinabove).

Section 3 also provides that save and except the goods mentioned in Schedule 1 of the VAT Act and services mentioned in Schedule 2 of the VAT Act, all other goods supplied or imported or services rendered shall have VAT imposed in them. In light of this, therefore, as Schedule 1 does not include the likes of plant, machinery, equipment, spare parts, materials and other such supplies which may be necessary for the implementation of the project, the import and/or purchase of such items shall attract VAT. Additionally, the services expected to be supplied for the implementation project, including, without limitation consultancy, advisory, engineering, legal etc does not fall within the purview of Schedule 2 of the VAT Act and as such shall attract VAT.

But, there is a possibility that local goods, works and services too are VAT exempt. According to Rule 31(Ka) of the VAT Rules 1991 read with SRO No 1 (5) VAT (redemption)/ 99 (part-2)/133 dated 17.10.2004, any manufacturer or service provider with a VAT Registration who provides a goods/services pursuant to a local or international tender called by any person for the purpose of a development project in Bangladesh funded by foreign donation or loan, shall be deemed to be exporting their goods/ services. Any local subcontractors, suppliers, etc falling within this category shall be exempt from payment of VAT by operation of section 3 read in conjunction with Schedule 2 of the VAT Act 1991, which exempts all exports from payment of VAT.

In practice however, instead of exemption of payment, such local contractors would be entitled to reclaim any VAT they might have paid. However, it is not possible to conclude whether the local sub-contractors or suppliers will qualify for the aforesaid VAT exemption without precise information about the funding mechanism of the Project. Moreover, paragraph 7(Gha) of Schedule 2 of the VAT Act states that a government body, local authorities or any part thereof, company, or organization who works to provide services for the betterment of the government shall be exempted from VAT but such bodies expressly exclude inter alia, WASA, electricity suppliers, construction company, banks and insurance companies.



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Nevertheless, the VAT Act, pursuant to section 14, provides that the Government may, by notification in the official Gazette, exempt the import or supply of any goods or services supplied from VAT or, as the case may be, additional duties of customs chargeable under the VAT Act. Also, the NBR may, by special order, on statement of the reasons in each case, exempt the import or supply of any taxable goods or any taxable services supplied from added value tax or, as the case may be, additional duties of customs chargeable under the VAT Act. Thus, upon application to the Government, explaining the reasons behind the importance of exempting VAT and other such duties that may be imposed in the course of the project, the Government and/or NBR (as applicable) may by statutory notification or by special order exempt the same from VAT implications.

15. Customs Act 1969 The Customs Act 1969 (the “Customs Act”) guides the laws on customs duties, clearance etc on goods that are imported into or exported from Bangladesh. Section 18 of the Customs Act imposes a general provision that customs duties shall be levied on goods (unless they are in value in any one consignment no more than BDT 1000.00 or where the total amount of such duty and tax does not exceed BDT 1000.00) imported into, or exported from, Bangladesh. Thus, plant, machinery, equipment, spare parts, materials and other supplies required for the project imported into Bangladesh shall prima facie attract customs duties. The value of such goods as dictated by section 25 of the Customs Act (where customs-duty is levied on goods by reference to their value) shall be the actual price. Pursuant to section 19 of the Customs Act, where the Government is satisfied and upon consultation with the National Board of Revenue (“NBR”), that it is necessary in the public interest to do so, it may, exempt any goods imported into Bangladesh from the whole or any part of the customs-duties chargeable thereon. In light of the above provisions of law, it appears prudent to make an application to the CCIE to, in public interest, exempt all goods brought into Bangladesh from customs duties.

16. Companies Act 1994

Pursuant to the Policy and Strategy for Public-Private Partnership (PPP) 2010, at the time of contract awarding, any private enterprise intending to work on a PPP Project in Bangladesh must be registered as a legal entity in Bangladesh.

Pursuant to Section 24 of the Companies Act 1994 (“CA 1994”), a company shall gain its own independent legal personality upon registration and as such under Bangladeshi law, an incorporated company has an artificial personality which is distinct from its shareholders.

Therefore, a private enterprise intending to work on a PPP Project must be registered as a company, and the same is especially true of any Joint Venture between the private enterprise and a state-owned company. Matters related to incorporation of a company in Bangladesh, irrespective of its type are dealt with by the Registrar of Joint Stock Companies and Firms.

Additional and Post-Registration Obligations for companies are the following: a) Board of Investment: Every company incorporated into Bangladesh may

register with the Board of Investment (“BOI”) to receive governmental assistance in the set up of such an entity as industrial undertaking. The companies can be classified into the following categories for the purposes of registration with the BOI:



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(i) Joint venture/100% foreign investment proposals in the private

sector; (ii) Self financed local investment proposals including industries

sanctioned/ financed by financial institutions or commercial banks; (iii) Permission for setting up joint venture industrial units with the

public sector corporations. b) Central Bank Obligations (Pursuant to Chapter 9, Section I of the

Bangladesh Bank Guidelines to Foreign Exchange Transactions Volume I), Regulations 1 and 2(C) - Temporary Bank Account: Foreign investors are free to make investment in Bangladesh in the industrial enterprises excepting a few reserved sectors. An industrial venture may be set up in collaboration with local investors or may even be wholly owned by the foreign investors. Authorised Dealers (“AD”) may open Non-Resident Taka Account (NRTA) in the name of the proposed company/enterprise of foreign investors contemplating to invest in Bangladesh, without prior approval of Bangladesh Bank. Such accounts may be credited with inward remittances received from abroad only.

c) Register with the Tax Authority: The National Board of Revenue (“NBR”) is

responsible for all tax related activities in Bangladesh and as such to commence business, every company must register itself with the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the NBR and procure a tax identification number for the new company. The provisions of the Income Tax Ordinance 1984 and Income Tax Rules 1984 govern the implications of taxation of a company.

d) Register for Value Added Tax (VAT): For VAT purposes, companies may be

registered separately with the Customs, Excise and VAT Commission, a body which operates under the NBR, pursuant to the Value Added Tax Act 1991.

e) Obtain a Trade Licence: Companies must obtain a trade licence from the

City Corporation pursuant to the City Corporation Taxation Rules 1983 (“the 1983 Rules”) in the manner prescribed by Rules 44, 45, 46, 47 and 48 of the 1983 Rules. In order to obtain a trade licence, the following accompanying documents need to be submitted:

i. A certified copy of the company’s MOA and AOA; ii. A copy of the Certificate of Incorporation; iii. The company’s statement of bank solvency; iv. A copy of the rent agreement for the company’s office v. Three photographs (copies); and vi. Particulars of the person in charge of the main corporate functions

f) Register under the Labour Act 2006: Any manufacturing company employing

ten or more workers is required to be registered under the Labour Act 2006 with the office of the Chief Inspector of Factories and Establishment. The act is primarily to regulate working conditions and to ensure safety in the factory.

i) Registration/Approval for Foreign Loan, Suppliers’ Credit, PAYEE Scheme

etc: Entrepreneurs in the private industrial sector arranging foreign credit in the form of loan, suppliers' credit, PAYEE scheme etc. falling within the following guidelines are not required to obtain prior approval from BOI for contraction of such credit:



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i. The effective rate of interest should not exceed LIBOR+4% (effective interest is the sum of the stated annual rate of interest and the annualized fees such as commitment fee, syndication fee, front-end fee, project appraisal fee etc.)

ii. The down payment, if any, in case of suppliers' credit should not exceed 10% of the credit amount.

iii. Repayment period should not be less than 7 years A copy of the foreign loan agreement signed by both parties should be submitted to BOI for registration. Period approval of BOI is required for the proposals which do not fall within the aforesaid guidelines.

j) Environmental Legislation: Under the Environment Conservation Act 1995,

all industrial projects shall obtain environmental clearance from the Department of Environment. The main criteria for obtaining clearance are set out in the Environment Conservation Rules 1997 which was established under the Act. Different levels of assessment are required depending on the particular industry concerned. As such an Environment Clearance Certificate must be obtained from the Department of Environment.

k) Obtaining Utility Connections: Entrepreneurs may apply either directly to the

concerned authority for obtaining utility services or approach BOI for assistance along with copy of registration/ sanction letter. Utility Service Cell is especially responsible within BOI to help investors in obtaining necessary utility services.

Furthermore, it is also possible for a foreign company to establish a branch office in Bangladesh for the purpose of engaging in business. This may be suitable, subject to any contractual or pre-contractual term(s) and/or condition(s) for the implementation of a BOT model of PPP by a foreign company.

In order to register a branch in Bangladesh, the foreign company must register with the BOI in the prescribed form.

The application must be submitted along with the following documents:

• Memorandum and Articles of Association of the Principal Company; • Certificate of Incorporation • Name and nationalities of the Directors/Promoters of the Principal

Company; • Board Resolution to open a Branch/Liaison/Representative Office in

Bangladesh; • Audited accounts of the last financial year; • Proposed organigram of the office; • List of activities of the proposed office.

• All papers/documents must be attested by: • the Bangladesh Embassy/High Commission of the country of origin; or • the Embassy/High Commission of the applicant’s country of origin; or • Apex Chamber of Commerce of the Country of Origin.

17. Environment Conservation Act 1995

Prior to setting up any project in Bangladesh, it is mandatory to obtain an Environmental Clearance Certificate (the “Certificate”) from the Director General of the Department of Environment established by the Government of Bangladesh as



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stated by section 12 of the Environment Conservation Act 1995 (the “Environment Act”). The Environment Conservation Rules 1997 (the “Environment Rules”) outlines the procedure for issuance of the Certificate, specifically Rule 7, which points out that the issuance of the Certificate shall at large depend upon the category of industries and projects into which it falls. The categories are Green, Orange-A, Orange-B and Red. As the present project is to set up a water purification plant, it shall fall in the category of Orange-B pursuant to Schedule-1 paragraph (C)(28) of the Environment Rules. As such, generally a Location Clearance Certificate must first be obtained prior to the Certificate from the Director General; however, the Director General may, without issuing a Location Clearance Certificate at the first instance, directly issue Environmental Clearance Certificate if he, on the application of a project, considers it appropriate. An application is to be made in the prescribed Form-3 along with appropriate fees and the following documents: report on the feasibility of the project (applicable only for proposed project), report on the Initial Environmental Examination of the project, and also the process flow diagram, Layout Plan, showing location of plant, design of the plant, report on the Environmental Management Plan (EMP) for the project, and also the Process Flow Diagram, no objection certificate from the local authority, emergency plan relating adverse environmental impact and plan for mitigation of the effect of pollution, outline of the relocation, rehabilitation plan (where applicable) and other necessary information (where applicable). The authority shall within 60 (sixty) days of the receipt of the application, issue the Location Clearance Certificate. Upon receiving the Location Clearance Certificate, the following activities may commence: (a) activities for land development and infrastructure development; (b) install machinery; and (c) apply for the Certificate upon completion of the activities specified in (a) and (b), and without the Certificate gas line connection will not be given, and the project will not be allowed to operate. The Certificate is issued within 30 (thirty) working days from receiving the application or otherwise rejected mentioning reasons. Rule 8 of the Environment Rules dictates that the Certificate shall be valid for a period of 1 (one) year and have to be renewed on an annual basis at least 30 (thirty) days before the expiry of the validity period. The amount of applicable fees for applying depends on the amount of investment made in the project. The Environment Rules also set out standards for air, water, sound, vehicles and emission therefrom, odour, sewage discharge and waste including liquid wastes and gaseous emission. However, importantly, Schedule-1 also states that (for Orange-B category) no industrial unit included in this category shall be located in any residential area and industrial units shall preferably be located in areas declared as industrial zones or in areas where there is concentration of industries or in vacant areas. Further, industrial units likely to produce sound, smoke, odour beyond permissible limit shall not be acceptable in commercial areas. Therefore, as Khilkhet (the proposed location for the plant) is not a declared industrial zone, it may prima facie be difficult to obtain the Certificate; however, the relevant authority is to be explained the reasons behind the location choice for the project and after which they are likely to issue the Certificate.

18. Local Government (Union Parishads) Ordinance 1983 Local Government (Thana Parishads and Thana Administration reorganization) Ordinance 1982 as



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amended up to 1992 and Building (Construction, Development, Conservation and Demolition) Rules 2008 The above laws deal with the roles of the local government in rural areas. As the proposed project location is Khilkhet, an urban area in Dhaka city, the relevant local authority shall be the North Dhaka City Corporation, and so the Local Government (Union Parishads) Ordinance 1983 would not apply. As such, the No Objection Certificate referred to in the Bangladesh environment laws, as described hereinabove must be obtained from the North Dhaka City Corporation.

The identified land is within the Detailed Area Plan (DAP) of Rajdhani Unnayan Kartripakkha’ (RAJUK) which stretches upto Shitalakkhya and Meghna River to the East. In accordance with the Rule 4 of the Building (Construction, Development, Conservation and Demolition) Rules 2008, once the land acquisition is complete, the land owner (then DWASA) shall file an application with RAJUK, being the concerned authority for overseeing town development in the capital, for obtaining Land Use Clearance for the purpose of setting up a water treatment plant on the said land property, which must be renewed every 2(two) years as per Rule 7 of these Rules. A special clearance under Rule 8 of these Rules would also have to be acquired if the floor area of the Project covers more than 7,500 square meters.

Upon obtaining a Land Use Clearance, another application must be made to RAJUK under Rule 13 of the 2008 Rules for obtaining Building Permit for the purpose of constructing the water treatment plant.

19. Stamp Act 1899 All agreements and certain instruments in Bangladesh are required to be printed on non-judicial stamp paper. Instruments such as agreements, mortgages, power of attorneys, letters of hypothecation, letters of credit, etc are subject to stamp duty. The said stamp duty requirement as well as amount of duty to be paid is provided in Schedule 1 of the Stamp Act 1899, which has been subsequently amended under the Finance Act 2010.

20. Public-Private Partnerships Act 2012 For the purposes of this document, it shall be assumed that the Public-Private Sponsorships Act 2012 (hereinafter to be referred to as the “PPPA 2012”) has been enacted and is therefore in force in Bangladesh.

The PPPA 2012 is an act in order to govern the selection of private partners to and regulation of public-private partnerships (“PPP”) contracts, the establishment of the Public-Private Partnership Office (“PPP Office”) and matters incidental to the above.

Pursuant to Section 3 of the PPPA 2012, the contracting authority, which is defined as the Government of Bangladesh, including any of its ministries, divisions, departments or directorates or otherwise any statutory body such as the Water Supply and Sewerage Authority (hereinafter to be referred to as “WASA”) may enter into a PPP Contract with a private enterprise subject to the provisions in the said 2012 Act.

According to Section 4 of the PPPA 2012, the initiation of any procedure for selecting private enterprises shall be subject to the approval of the Cabinet Committee of



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Economic Affairs (hereinafter to be referred to as the “CCEA”), which is a body established under Rule 18 of the Rules of Business 1996.

Furthermore, prior to the CCEA giving such approval, the contracting authority must first seek a written assessment from the PPP Office as to its (a) value for money, (b) optimum allocation of technical, operational and financial risks between the private enterprise and the contracting authority and, (c) where prescribed Government financial participation or other prescribed Government incentives are sought by the contracting authority in favour of the private partner, from the Ministry of Finance, as to whether the Government has the resources to provide for the envisaged project and the overall economic and financial implications of the project.

Upon receipt of the PPP Office’s written assessment, the same shall be submitted by the contracting authority to the CCEA for its approval.

Pursuant to Chapter II of the PPPA 2012, the contracting authority shall publish an invitation to participate in the pre-qualification stage of the envisaged project. This involves the contracting authority publishing certain specifications, criteria and details of the said project in daily newspapers and then, in a non-discriminate manner, identifying the tenderers or bidders that are suitably qualified to implement the project. Furthermore, the aforementioned information shall specify whether or not the proposed tenderers may form a bidding consortium, which shall then be assessed by the contracting authority as a whole, instead of each individual tenderer.

Therefore, under the PPPA 2012, the general process for tendering of a project is by way of open tender or competitive tender. However, the PPPA 2012 provides for circumstances where such open or competitive tender procedures would not be followed, in lieu of less competitive tendering procedures.

Under the PPPA 2012, this is to be done in a number of circumstances, such as where there is an urgent need for ensuring continuity in the provision of a public service and such open tender procedures would be impractical; where the project involves national defence or national security; where there is only one source capable of providing the required service, such as when the provision of the service requires the use of intellectual property, trade secrets or other exclusive rights owned or possessed by a certain person or persons; in the case of ‘unsolicited proposals’; in cases where the CCEA authorises in writing such an exception for compelling reasons of public interest, etc.

Although the PPPA 2012 does not specify the different types or models of PPP applicable; it does provide definitions for the types of projects envisaged under the Act. According to Section 2 of the PPPA 2012, “PPP project” means an infrastructure project, or the provision of services not associated with any infrastructure facility.

Furthermore, “infrastructure project” means the design, construction, development and operation of any new infrastructure facility or the rehabilitation, modernisation, expansion or operation of any existing infrastructure facility.

Additionally, “infrastructure facility” means physical facilities and systems that directly or indirectly provide public services, but specifically does not include any infrastructure facility owned or operated by a state-owned industry or enterprise selected by the Government of Bangladesh to be privatised under the Privatisation Act 2000.



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Therefore, it can be seen that the projects envisioned under the PPPA 2012 take into account most models of PPP projects, including BOT type projects, but due to the Privatisation Act 2000 governing the privatisation of government authorities into private entities, may also take into account Joint Venture PPP projects.

Chapter III and beyond of the PPPA 2012 provides for the contents and implementation of the PPP Contract itself. The majority of provisions seem to grant the contracting bodies (both the state-owned authority and the private enterprise) freedom to contract as per their own requirements, but give certain ‘default’ positions for contractual clauses.

PPP Contracts shall be governed by the laws of Bangladesh, unless otherwise specified in the PPP Contract itself.

One item of note is the provision under Section 33 of the PPPA 2012, according to which any requirement relating to the minimum capital of the private enterprise and the procedures for obtaining the approval of the contracting authority to its statute and by-laws and significant changes therein shall be set forth in the PPP Contract consistent with the terms of the request for proposals.

This provision clearly sets out that the PPP model of Joint Ventures is envisioned under the PPPA 2012.

Section 33 provides for PPP options such as the BOT models under the laws of Bangladesh. This is due to its recognition that certain assets may be the property of the private enterprise (such as machinery) and certain assets may be the property of the contracting authority (such as acquired land leased for the purposes of the project). Furthermore, as per Section 33(b), the contracting authority may choose to purchase assets from the private enterprise (such as the machinery in the event of transfer of the facility, or commodities such as power or water that may be the output of the project).

The rest of the provisions under Chapter III of the PPPA 2012 take into account the acquisition of land property for the purposes of the PPP project in line with the provisions of the Acquisition and Requisition of Immovable Property Ordinance 1982, as well as financial arrangements such as the payment of fees and tolls in favour of the private enterprise through the use of the infrastructure facility under the PPP Contract and/or the provision of any public service undertaken by the private enterprise under the same. However, it is pertinent to note here that in terms of JV models of PPP, the PPPA 2012 contains a substantially important provision that seems to facilitate such Joint – Ventures between a private enterprise and a governmental entity. That may be seen simply by the definition of ‘private partner’ in the said 2012 Act.

Pursuant to Section 2(h) of the PPPA 2012, a ‘private partner’ means a company registered under the Companies Act 1994 of Bangladesh, or a legal person formed by or under any other Act of Parliament, provided that no more than forty nine (49) percent of the shares in the company are owned, directly or indirectly, by the Government, a local government or a foreign government.

Therefore, the above provision seems to contemplate situations where a company is formed by way of a Joint Venture between a private organisation and the government of Bangladesh (or a foreign government) for the purposes of undertaking a PPP



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project. Alternatively, it also equally applies to private enterprises undertaking PPP projects on the basis of other models such as BOT type models.

Finally, it is important to note that the wide applicability of the PPPA 2012 in terms of a wide multitude of PPP models is evident by the PPP Rules 2012. Pursuant to Rule 4 of the PPP Rules 2012, government financial participation includes, without limitation, a) technical assistance financing, which is related to the preparation and promotion of a PPP Contract; b) viability gap financing, which is designed to assist a project where the financial viability is uncertain, but the economic and social viability is deemed high by the Government; c) infrastructure financing, where the government extends financing in the form of debt or equity through specialised financial institutions and; d) linked components financing, which relates to the acquisition of land, rehabilitation of displaced persons, construction of approach roads to highways, etc.

Therefore, upon an examination of the PPP Rules 2012, as well as the PPPA 2012, it may be understood that upon the adoption of the said Act and Rules, the implementation of PPP Projects in Bangladesh would be provide for BOT (and derivatives), JV, O&M models.

21. Guidelines for PPP Technical Assistance Financing, including the Scheme of

PPP TA Financing from 2012.

The Guidelines for Public-Private Partnership Technical Assistance Financing (hereinafter to be referred to as the “PPPTAF Guidelines”) contains provisions governing the finances related to a PPP Project, allowing the PPP Office to allocate finances more effectively to PPP Projects.

Under these Guidelines, the PPP Office shall receive the PPPTAF Fund as an initial funding by way of Government Grant in the amount of BDT 1,000,000,000 (Bangladeshi Taka One Billion) only. In the event that it is deemed necessary, the said fund may be supplemented through the budgetary support by the Finance Division of the Ministry of Finance of Bangladesh. Furthermore, the said Fund is envisaged as a revolving fund that is to be replenished either fully or partially by the reimbursement through assistance recovered from successful tenderer(s), as per any Agreement between the said tenderer and the Government.

Under the PPPTAF Guidelines, the Implementing Agency shall assess whether or not it can fund the costs of development of the PPP Project from its own budget. In the event that it cannot do so, the Implementing Agency shall apply to the PPP Office through Line Ministry for funding out of the PPPTAF Fund.

Subsequently, based upon its review, the PPP Office shall then prepare a PPPTAF proposal and present the same to an inter-ministerial committee, upon whose approval the PPP Project in question shall be enabled for PPPTAF Fund support.

Furthermore, as per the Public-Private Partnership Technical Assistance Financing Scheme, in order to be eligible for PPPTAF financing, a PPP Project shall have to meet the following criteria:

“a) PPPTAF will be generally granted only to those projects that are in-principle

approved by the competent authority as per Policy & Strategy for Public-Private Partnership (PPP), 2010;



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b) The project shall be implemented by the Line Ministry/Implementing Agency and to be developed, financed, constructed, maintained and operated by a Private Partner to be selected by the Government or its Agency through a Competitive Tendering Process;

c) The Project shall be from the sector as stipulated in the Policy and Strategy for

Public-Private Partnership (PPP), 2010; d) The project will primarily be reflected in the Implementing Agency’s Strategic

Priority; e) The capacity and appetite shall be there to attract the private sector to participate

in the project; f) The PPP project Procurement history shall reflect adequate commitment to the

project on the part of Implementing Agency with adequate policy and regulatory support.”

Additionally, it is stated that the PPPTAF shall be utilised to cover expenditure related to project development activities including (i) project identification, (ii) pre-feasibility studies, (iii) detailed feasibility studies, (iv) procurement procedures, (v) documentation and evaluation, (vi) technical, financial, commercial and legal support, (vii) contractual and negotiations and other subsequent activities in relation to the project till signing of the contract and achieving financial closing with the awarded tenderer. In this regard, the PPP Office will be able to utilize the PPPTAF Funds in order to appoint consultants to support all project development activities as may be required, and the same shall be appointed by way of competitive tendering procedures in line with the Public Procurement Act 2006 and Public Procurement Rules 2008.

22. Water abstraction rights

Any abstraction of water resource requires a permit from the competent authorities; this case concerns abstraction of river water. According to the National Water Policy of Bangladesh, Chapter 4.3, the ownership of water vests not on any individual but on the State. As such, river water falls under the ownership of the State. The National Water Policy allows the Government to develop rules for water allocation for the purpose of (inter alia) abstraction. However, no such unified rule has been developed by the Government of Bangladesh to this date.

Thus it would be the designated ministry of the Government, i.e, Ministry of Water Resources, who would exercise the rights over river water on behalf of the State, and can therefore grant abstraction rights. This is in line with the Rules of Allocation of Business between Ministries as Amended vide S.R.O No. 231-Law/2008-CD-4/5/2008-Rules, dated 24 July 2008, Ministry of Water Resources has authority for regulation of rivers and river resources.

Although Bangladesh Water Development Board and local Water Supply & Sewerage Authorities have been given the prerogative to abstract water under the Bangladesh Water Development Board Act 2000 and the Water Supply and Sewerage Authority Act 1996 respectively, there exists no law which empowers a third party to abstract water from the rivers for any purpose.



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APPENDIX 16: MEGHNA AND SITALKHYA HYDROLOGY

The following are excerpts from the Feasibility Study Vol IV: Hydrology of River [sic] Meghna and Sitalkhya (also called Lakhya R.) that demonstrate the gaps in the report vis-à-vis the intake location. We are not suggesting that the intake will silt up in a couple of years or that the river carries insufficient flow. What we are asserting is that the report is not convincing. Only quotes pertaining to the Meghna are provided since Lakhya River should have been eliminated on the ground that its low flow is only marginally higher than the required design flow for Khilkhet and Saidabad WTPs and its deteriorating quality would make treatment costs prohibitive. The recently opened Saidabad 2 WTP contains a very expensive unit process to deal with the ever-increasing ammonia load in the raw water.

Quotations from report PPTA comments

Figure 1.1 Site location for proposed river uptake

1) The location indicated in Fig 1.1 is approximately 2 km upstream of the actually proposed location.

2 The Meghna River

§ 6“…with stable banks (at least within living memory)…”

2) The Feasibility Study (FS) refers to movement of the bank of about 1 m/year, based on anecdotal reference as well as review of satellite imagery.

3) The PPTA team interviewed local residents who recollect significantly greater movement (as much as 500 feet in 20 or 30 years)

2.1 Catchment Characteristics

§ 3 “…the highest recorded flow was recorded in 1988 as 19,500 m3/s …approximately 20 km upgradient from the proposed intake. In the dry season flow can be as low as 250 m3/s…”

4) A reference should be provided.

5) How does the flow 20 km upstream relate to the flow at the intake?

6) A moot point: 2000 MLD ≈ 23 m3/s

2.1.1 Catchment Geology

§ 1 “Regional subsidence rates …need to be factored into engineering developments…over decades. The Sylhet sub basin …north of the immediate area of interest has a subsidence rate of 2 metres per century.”

7) Ensure design specs include this condition as this is a 50-year project

2.1.3 Tides

§ 1 ”…the river is tidal at least to Meghna Bridge…level monitoring records suggest that the river is tidal at the proposed intake

8) Meghna Bridge is about 20 km downstream; however, there’s no agreement of the extent of tidal influence and with it, saline intrusion.



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site and for several kilometres upstream…tidal surge …can cause tidal variation of a metre or more.”

§ 2 ”No records have been sourced to suggest that saline intrusion extends [to] Meghna bridge. IWM are adamant that sea based salinity does not intrude beyond the confluence of the Meghna and Padma rivers. However this will need to be robustly verified.”

§3 “An assessment result that salinity at the proposed intake site is not an issue, cannot be substantiated by isolated water quality measurements alone. A more thorough time series is required.”

9) As noted in § 3, a thorough time series water quality measurements is required.

4 The Procedure Adopted for the Determination of Probable Minimum River Flows

10) Since the low flow in the river (~250 m3/s) is order of magnitude greater than the project design flow of 2000 MLD (~23 m3/s), the discussion is unnecessarily extensive; i.e., it is a certainty that the Meghna River carries adequate quantity of water for the project.

11) What is of significant importance for the selection of raw water pumps and the setting of the raw water sump is the level at which the Meghna carries this Probable Minimum River Flow and that is not determined in this report.

5 The Procedure Adopted for the Determination of Probable Maximum Flows

§3 The Probable Maximum Flood (PMF) for the purposes of this report is defined as “the limiting value of the flood that can reasonably be expected to occur”.

12) The report goes to perhaps excessive length to demonstrate the maximum flows that will likely be experienced.

6.3.1 Peak Current

13) Again, what is of significant importance for the selection of raw water pumps and the setting of the raw water sump and other flood level-related structures is the level at which the Meghna carries this Probable Maximum River Flow and that is estimated as 6.4 m, assumed to be above mean sea level (amsl).

14) The peak current was calculated for the 50-year flood event. We believe that for



3

this project, all water levels that affect the selection of pumps and the potential flooding of the intake structure should be based on at least the 1 in 100 year event or the probable maximum or minimum event, as appropriate. We note in that respect that based on the Mike Numerical Model, the 1:100 year event suggests a maximum height of 7.4 m (again, assumed amsl); i.e., significantly higher than the 1:50 year event.

15) We recommend that the river level be further studied to assess what design level should be adopted. The significant increase from the 1:50 year event to the 1:100 year event suggests that the design level should be greater than 7.4 m amsl.



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APPENDIX 17: SECTOR ASSESSMENT

SECTOR ASSESSMENT: WATER SUPPLY AND OTHER MUNICIPAL INFRASTRUCTURE AND SERVICES

Sector Road Map

1. Sector Performance, Problems, and Opportunities

1. Urban Water Supply. Bangladesh is rapidly becoming urbanized. Currently about 25% of the population lives in the cities and the number keeps growing with a rate of over 6% annually. Over 81% of national population has access to improved source of drinking water. The coverage of piped water supply systems remains incomplete due to insufficient funds. Out of the total 309 urban towns, only 102 have piped water supply systems, which generally provide intermittent supply of less than 10 hours. All of the investments suffered from systemic constraints, such as lack of local capacity, and political control of water tariffs. Because of inadequate water tariff, revenue generation remain low and water utilities are unable to carry out adequate repair and maintenance work and invest in improvement. Despite these limitations, 85% of the urban population has access to drinking water from an improved source, a figure that has not improved since the 1990s. Most sources are tube wells with hand pumps, sunk by private households and developers, which are lowering local groundwater tables to a worrying degree. The quality of the water is also an issue; many of the wells are contaminated with arsenic and bacteria. Also, the water levels of deep aquifers are dropping in many towns, especially in larger industrial areas in and around Dhaka.

2. The O&M of the water supply system is inadequate, as reflected in high water losses or what is technically termed as non-revenue water (NRW). The NRW in Dhaka is estimated at about 35 - 40%; Chittagong and Khulna are estimated to have similar values. Periodic maintenance of the systems is not done properly resulting in leakages in pipelines and early deterioration of pipes, wells and machinery. Most of the connections in Dhaka and Chittagong have water meters but there are none in Khulna. No Water Supply and Sewerage Authority (WASA) has 24/7 water supply. Dhaka supplies water for about 22 hours per day, but there is a serious water crisis during the dry season. The water supply crisis is compounded by frequent power outages. The WASAs in Chittagong and Khulna can only supply water for nearly 12 hours per day. Dhaka can recover only a small part of the investment cost whereas Chittagong and Khulna can hardly recover the O&M costs. All these problems are compounded with the inability of the water utilities and organizations to increase tariff commensurate to the need for cost recovery.

3. Sanitation Services. The sanitation coverage is high when basic sanitation is considered but it declines when more stringent requirements for improved sanitation or hygienic sanitation are considered. The national sanitation coverage for improved sanitation facilities has increased from 47% in 2000 to some 56% in 2010 and open defecation has significantly gone down from 20% in 2000 to 4% in 2012. The National Campaign for Sanitation started in 2005 contributed towards such a drastic reduction of open defecation and a wider coverage of sanitation facilities. There is a lack of conventional sewer systems in all urban areas except Dhaka where some 25% of the population is served by a sewer network, the rest using onsite options such as septic tanks, pit latrines, unhygienic latrines or none at all. There is only one wastewater treatment plant in Dhaka whose capacity is limited and most of the wastewater is discharged untreated, directly into the river. The sanitary conditions of urban slums are in deplorable conditions and only eight to 12% of households have hygienic latrines. Open discharge of wastewater into drains and open fields, and by road side or river banks has significant impact on environmental pollution and health hazard.



2

4. Current Institutional Set Up for the Water Sector. At the national level, the Local Government Division of the Ministry of Local Government, Rural Development and Co-operatives (MLGRD & C) is responsible for the overall development of the WSS sector. Large urban areas, namely Dhaka, Chittagong, Khulna, and Rajshahi, have WASAs. Water supply in other urban areas is maintained by pourashavas (municipalities). Municipalities are empowered to charge tariffs to meet up maintenance cost of water supply. The Department of Public Health Engineering (DPHE) is responsible for implementation of the WSS projects in rural areas. The union WATSAN Committees (Water Supply and Sanitation Committees) that includes community leaders and DPHE representatives has responsibility for promoting hygiene education, environmental sanitation and approving the distribution of tube wells. In addition to government institutions, non-governmental organizations (NGOs) and the private sector are involved in water services but private sector participation in this sector remains limited to small business such as supply of hand pumps, pipes and tube well materials

5. The Millennium Development Goal (MDG) target for water supply for Bangladesh is to reach 89% coverage by 2015. The Government of Bangladesh has set targets of safe drinking water and sanitation for all by 2011 and 2013 respectively. .The latest BBS Multiple Indicator Survey (2009) reveals that access to improved source of water adjusted for arsenic contamination has increased to 86%. There has been unprecedented decline in open defecation from 33% in 1990 to 7% in 2008. Coordinated National Sanitation Campaigns since 2003 and facilitated community wide approaches have had a marked success in moving communities onto fixed place defecation. In spite of the relatively high percentage of sanitation coverage in the urban areas compared to the rural areas, the actual situation is not appropriate in many high-density urban areas due to lack of space and the risk of groundwater contamination. More-over de-sludging and safe disposal is another concern.

2. Government’s Sector Strategy

6. The government clearly places a strong focus on the water sector and has prepared a water supply and sanitation sector development plan (2011-2025) presenting progressive development of water supply and sanitation services during the Plan’s three strategic timeframes: short�term, medium�term, and long�term. While the water sector has been significantly supported by funding agencies, the public sector plays a dominant role in overall planning, design and implementation of programs and projects. In majority of the cases, the agencies within the public sector act as the regulatory body and ensure the management and operation of relevant activities.

7. The sector review identified a total of eleven policies and strategies which are directly and indirectly related to the WSS. National Policy for Safe Water Supply and Sanitation (1998) aims to make a change in the existing service delivery to a dynamic system through specific measures requiring a complex social, economic, technical, administrative, and management interventions. National Water Policy (1999) provided guidance to all agencies and institutions working directly or indirectly in the water sector to better the country’s water resource management system. National Water Management Plan (2004) is an operational framework for the central and local governments, and other stakeholders to implement their centered activities and projects at both local and central levels. National Environment Policy (1992) put emphasis on the capacity of the natural endowments to influence the environment. National Policy for Arsenic Mitigation (2004) provides guidelines for arsenic mitigation program countrywide. Pro-Poor Strategy for Water and Sanitation Sector (2005) succeeded in defining the basic minimum level of WSS service up to which government should provide special support to the hard-core poor. Finally the government has prepared a



3

Sector Development Plan 2011-2025 which aims to deliver an improved and universal coverage of WSS services to the population.

8. However, despite good intents, most of the policies and strategies are not widely disseminated. Hence many of them were not implemented properly, for example, pro-poor strategy which did not reach the lowest level of Local Government Institutions who are supposed to implement many parts of it. The sector development framework and development plan mostly remained in the shelves and hardly been used. Interagency coordination has been one of the bottlenecks of the development of the WSS sector. Although various policies reflect and acknowledge the importance of GO-NGOs as well as PPP, it is not visible in practice.

9. It has been estimated that to meet MDG goals by 2015, a total of $14.11 billion will be required to undertake the interventions on WSS for the period 2009 to 2015, at a per capita cost of around $11.98 in 2009 and $13.86 in 2015. The average annual estimated costs are $2.01 billion for WSS to meet interventions related to meeting MDG targets. Investment in the WSS sector comes mainly from government, donor, NGOs and the private sector. The government funds for development works are channeled through its Annual Development Programs. In recent years the allocation to WSS sector has been increasing but despite this increase there will be a resource gap of 32% in the sectoral investment to achieve universal coverage.

3. ADB Sector Experience and Assistance Program

10. ADB is a major development partner in water and sanitation development in Bangladesh and has given top priority to this sector in its country partnership strategy. The development of urban infrastructure, especially for water supply, sanitation and waste management has received ADB support with significant improvement of service delivery and positive impacts on the health of urban residents. A number of development partner initiatives have focused on improving the Water Supply and Sanitation situation in Bangladesh. In recent years ADB has supported the rehabilitation of the Dhaka water supply system, capacity strengthening and development of network distribution systems for Khulna water supply system, and plans to assist the government in establishing regulatory framework for the water supply and sanitation sector as well as the legal framework that governs the management of water supply and sewerage authorities and municipal water supply sections.

11. In December 2007 the ADB approved a program loan, a project loan, and a TA grant to the government for the Dhaka Water Supply Sector Development Program (DWSSDP). The aim of the Program is to contribute to sustained economic growth and improved health conditions in the urban centers of Bangladesh by improving the water supply services. With the support of the DWSSDP as well as a DWASA Turnaround Plan, several key issues relating to administrative and financial autonomy of DWASA, strengthening of capacity of staff with increased budget allocations for training, development of a comprehensive human resources strategy, and development of a 5-year business plan have been addressed.

12. Several other donors are engaged in the WSS sector in Bangladesh. The World Bank is supporting DWASA to improve the sustainable delivery of storm water drainage, wastewater and water services to the population of Dhaka. Other than Dhaka, the World Bank and JICA are supporting improvement of water supply systems in Chittagong, and ADB and JICA are supporting development of a new surface water treatment system in Khulna. The third phase of Danish support to WSS sector comprises the Sector Policy Support component and the Hygene, Sanitation, and Water Supply (HYSAWA) Fund component. The Sector Policy Support is providing funding for the implementation of the action plans deriving from the Sector Development Plan (SDP) in terms of policy,



4

institutional, and regulatory framework. The Policy Support Unit (PSU) in LGD plays a lead role in piloting, coordinating, and monitoring the SDP implementation. DANIDA also is assisting DWASA with the Saidabad water treatment plant management and operations. Coordination with and between development partners ensures a comprehensive programming for the overall improvement of the WSS sector in Bangladesh.



5

Problem Tree for WSS



6

Sector Results Framework: Water Supply and Other Municipal Infrastructure and Services

Country Sector Outcome Country Sector Outputs ADB Sector Operations Outcomes with ADB contributions

Indicators with Targets and Baselines

Output with ADB Contributions

Indicators with Incremental Targets (Baseline Zero)

Planned and Outgoing ADB interventions

Main Outputs Expected from ADB Contributions

More people enjoying improved water supply and sanitation services, and health care Sustainable use of groundwater by shifting extraction of surface water

Urban (Dhaka) population using improved drinking water sources improved from the current 90% to 100% in 2020.

Groundwater table is stabilized (baseline: 2-3 meters drawdown a year) Khulna city: Household coverage with access to piped water from 22.6% in 2010 to 62.3% in 2018. Average hours of supply from 5.3 hours/day in 2009 to 24 hours/day in 2017.

Water supply infrastructure in Dhaka expanded, improved and well managed Reduction in extracting groundwater and water supply increased extracting surface water Water sources in Khulna city are augmented and managed sustainably. Distribution extended and delivers water efficiently in Khulna city.

Coverage in Dhaka increased by 10 percentage points by 2020 Reduction of at least 500 MLD water currently sourced from tube wells by 2018 Additional production capacity in Khulna using surface water 110 MLD by 2016. Physical loss from 36% in 2009 to 20% in 2017.

Planned Key Activities Areas

Development of water supply infrastructure in large cities (Dhaka and Khulna)

Ongoing Projects

Dhaka Water Supply Sector Development Program ($200 million) Secondary Town Water Supply and Sanitation Program ($41 million) with OFID cofinancing of $9 million Khulna Water Supply $75 million) with JICA cofinancing of $184 million

Projects in the Pipeline

Khilkhet Water Treatment Project ( $600 million) Establishing a Regulatory Framework for Urban Water Supply and Sanitation ( $750,000) Coastal Towns Infrastructure Improvement

Planned Key Activities Areas

Water supply system improved with better management system in two megacities Urban public health services improved

Ongoing Projects

Key infrastructure improved Water supply system with installed capacity of 110 MLD in Khulna Additional 65,000 households will have piped water supply in 16 pourashavas

Projects in the Pipeline

Water Supply system with installed capacity of 500 MLD in Dhaka Regulatory regime improved including transparent tariff setting by all water utilities Vulnerable coastal towns will have sustainable water supply and improved sanitation facilities



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APPENDIX 18: DEVELOPMENT COORDINATION

DEVELOPMENT COORDINATION

A. Major Development Partners: Strategic Foci and Key Activities

1. Relevant major Development Partner (DP) projects in the water supply and sanitation sector are shown in Table 1. The main current water supply and sanitation sector DPs are ADB, World Bank, and JICA.

Table 1: Major Development Partners

Sectors and Themes

Development Partner Project Name Duration

Amount

USD (m)

Water Supply and Sanitation

World Bank

Bangladesh Rural Water Supply and Sanitation Project

2012 - 2017

75.00

World Bank Chittagong Water Supply Improvement and Sanitation Project

2010 - 2015

186.76

World Bank Dhaka Water Supply and Sanitation Project

2008 - 2017

167.50

ADB Khilkhet Water Treatment Plant Project

2013 - 2020

260.00

ADB Khulna Water Supply Project 2012 - 2018

75.70

ADB Dhaka Water Supply Sector Development Program

2007 - 2014

150.00

ADB Secondary Towns Water Supply and Sanitation Project

2006 - 2013

41.00

ADB TA Establishing a Regulatory Framework for Urban Water Supply and Sanitation

2012- 2013

0.50

JICA Small Scale Water Resources Development Project

2007 - 2013

79.50

JICA Karnaphuli Water Supply Project 2006 - 2013

128.80

JICA Chittagong Water Supply Improvement Project

2006 - 2010

179.64

JICA Project for Advocacy NRW (Non Revenue Water) Reduction Initiative (PANI) of Chittagong WASA

2005 - 2010

Unknown

DANIDA Water Supply and Sanitation Sector Program Support Phase III

2012 - 2015

34.90

DANIDA Saidabad Water Treatment Plant Project, Phase II

2010 - 2012

146.35

Chinese Josholdia Water Treatment Plant Uknown 300



2

Government

Project

ADB = Asian Development Bank, Danida = Danish International Development Assistance, TA = technical assistance,

Sources: Asian Development Bank, World Bank, JICA.

2. A number of DP initiatives have focused on improving the Water Supply and Sanitation situation in Bangladesh. In December 2007 the ADB approved a program loan, a project loan, and a TA grant to the government for the Dhaka Water Supply Sector Development Program (DWSSDP). The aim of the Program is to contribute to sustained economic growth and improved health conditions in the urban centers of Bangladesh by improving the water supply services. ADB’s Special Funds resources financed the program loan of $50 million, the project loan of $150 million and the TA grant of $2.5 million. With the support of the DWSSDP as well as a DWASA Turnaround Plan several key issues relating to administrative and financial autonomy of DWASA, strengthening of capacity of staff with increased budget allocations for training, development of a comprehensive human resources strategy, and development of a 5-year business plan have been addressed.

There are three consultancy packages under the DWSSDP: Design and Management Consultancy (DMC); Financial Capacity Building Consultancy (FCBC); and Project Performance Monitoring and Evaluation Consultancy (PPMEC).

3. The objective of the World Bank funded Dhaka Water Supply and Sanitation Project for Bangladesh is to improve the sustainable delivery of storm water drainage, wastewater and water services by the Dhaka Water Supply and Sewerage Authority (DWASA) to the population of Dhaka. There are five components to the project. The first component of the project is rehabilitation and strengthening of existing sewerage system. This component will support the rehabilitation and strengthening of the existing sewerage system, including the rehabilitation of lifting/pumping stations, the rehabilitation and augmentation of the Pagla sewage treatment plant, the rehabilitation/replacement of trunk sewer mains and sewer lines, and the laying of branch sewers to expand the coverage areas within the existing Pagla sewer basin. The second component of the project is rehabilitation and strengthening of storm water drainage system. This component will support the rehabilitation and strengthening of the storm water drainage system by installing two pumping stations at critical locations (Rampura and Kamlapur) on the east of Dhaka city to alleviate periodic flooding in the city. The third component of the project is the implementation of environment and social safeguards. This component includes supporting the resettlement action plans (RAPS) associated with the rehabilitation of selected canals and the implementation of the environmental management framework. The fourth component of the project is to service provision to low income communities. This component will support the piloting of several core approaches for DWASA to extend and mainstream services provisions to low income communities and the strengthening of the capacity of DWASA to deliver water and environmental sanitation services to these communities. The fifth and the final component of the project is project management, monitoring and evaluation (M&E), consultations and communications. This component will support technical assistance for project implementation, project monitoring and DWASA's communications program.

4. This third phase of Danish support to WSS sector will comprise two components: the Sector Policy Support Component and the Hygene, Sanitation, and Water Supply (HYSAWA) Fund Component. The Sector Policy Support Component is providing funding for the implementation of the action plans deriving from the Sector Development Plan (SDP) in terms of policy, institutional and regulatory framework. The PSU also plays a lead role in piloting, coordinating, and monitoring the SDP implementation. The HYSAWA is supporting



3

water supply and sanitation activities in three districts in the southern coastal belt, in five districts in the North-western region and in three districts in the Chittagong Hill Tracts, in total 350 Union Parishads (UP). The objective of the Project is to develop and demonstrate sustainable hygiene, sanitation and water supply service delivery through local governments and in consultation with local people.

5. The ADB funded Secondary Towns Water Supply and Sanitation programme aims to improve the living conditions and health standards in participating secondary towns and improve sustainability of purashava-level water utilities. The over-arching outcome of the project will be the sustainable access to improved and safe water and sanitation services in the project areas. More specific outcomes will include: (i) increased quantity and quality of water supply; (ii) increased sanitation coverage; (iii) improved community awareness of the link between proper hygiene, sanitation, and health; (iv) improved capacity of pourashavas to implement, operate, manage and maintain water supply and sanitation investments; (v) adoption of improved management practices consistent with SDP-WSSB for greater efficiency and sustainability of local water utilities; and (vi) improved capacity of Department of Public Health Engineering (DPHE) to plan, design, supervise, monitor and provide technical assistance to pourashavas and local water utilities.

B. Institutional Arrangements and Processes for Development Coordination

6. An agreement among several external agencies to reengage with the water supply and sewerage authorities of Dhaka and Chittagong was signed only by end-2007. ADB was assigned the role of assisting in the rehabilitation and augmentation of water supply systems in Dhaka; DANIDA was to fund the building of a water treatment plant in Dhaka; and the World Bank would focus on extending these systems to slums. The comprehensive agreement strengthened the decision of the Japan Bank for International Cooperation to support the water supply sector in Bangladesh.

Assistance from major development partners is coordinated by the Economic Relations Division of the Ministry of Finance. The ‘Bangladesh Joint Cooperation Strategy (JCS) 2010-15’ aimed at improving the way donor partners work together was signed in June 2010.61 The agreed strategy presents a shared intention of the Government of Bangladesh and the Development Partners to find a more effective way of working together in the spirit of Paris Declaration and the Accra Agenda for Action. The JCS has been aligned to the revised ‘National Strategy for Accelerated Poverty Reduction (Steps Towards Change)’ and the national ‘6th Five-Year Plan’. The JCS is expected to result in better harmonised and streamlined programmes supporting Bangladesh’s development plans and strategies by providing a common platform for inclusive partnership between all development actors and holding each other accountable for making concrete and measurable progress towards greater aid effectiveness.

C. Achievements and Issues

7. In support of the JCS, regular dialogue at the sector and thematic level is held in joint GoB and Development Partner Local Consultative Groups (LCG). The objective of the individual LCG Working Groups, of which the Urban Sector LCG is one, is to contribute towards effective and coordinated implementation of national policies, strategies, plans and

61

Development Partner signatories were the ADB, Australia, Canada, Denmark, European Union, Germany, the Islamic

Development Bank, Japan, Republic of Korea, Netherlands, Norway, Spain, Sweden, Switzerland, the United Kingdom, the United Nations,

the United States, and the World Bank.



4

programmes in Bangladesh through joint results targets and a monitoring framework. The Water Supply and Sanitation LCG is currently co-chaired by the Additional Secretary Local Government Division and the World Bank and is participated by WB,JICA, USAID, UNICEF, WHO, SIDA, UNDP, GTZ and PSU62. It is a well-established mechanism that meets regularly and has proved a successful platform for Water Supply and Sanitation dialogue and coordination.

D. Summary and Recommendations

8. It is recommended that the Water Supply and Sanitation LCG is fully utilised as a mechanism for coordinating work in the sector and promoting harmonisation and alignment of activities. Where appropriate the Water Supply and Sanitation LCG can provide a mechanism for development cooperation through joint fact-finding, joint field review and/or evaluation missions. The LCG provides the forum for the facilitating a common understanding of CRD and communicating lessons learnt.

62

WB = World Bank, JICA = Japanese International Cooperation Agency, USAID = United States Agency for International Development, UNICEF = United Nations Children's Fund, WHO = World Health Organization, SIDA= Swedish International Development Cooperation Agency, UNDP = United Nations Development Programme, GTZ = German Technical Cooperation, PSU = Project Support Unit.



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APPENDIX 19: RISK ASSESSMENT AND RISK MONITORING PLAN

RISK ASSESSMENT AND RISK MANAGEMENT PLAN

Risk summary

Risk Assessment without

Mitigation Management Plan or Measures

Assessment

with

Mitigation

Inherent Risks

5. Country-Specific Risks

Increasing political unstable

future situation resulting in

serious hampering of project

deliverables and possible

investments in (WSS)

infrastructure projects.

M

Awareness program to be implemented

by DWASA to convince stakeholders and

policymakers about the benefit of the

project.

L

6. Entity-Specific Risks M

• Lack of a National Water Regulatory

Authority; no benchmarks or KPI’s for

assessment of DWASA performances.

• Reforms are ongoing, but DWASA still

can’t operate as an (financial)

autonomous entity.

• Top management is still appointed by

politics for a limited number of years,

so continuity of the ongoing (reform)

programs is not ensured. DWASA MD,

and DMD’s, should be appointed for

longer periods.

• Tariff setting –a crucial issue for

sustainable DWASA operations- still

needs political approval at several

levels. The present (too) low tariff is

significantly hampering sustainable

development of DWASA. Present

DWASA proposals, based on the

DWASA 5 yr Business plan, to increase

the fee more than the officially

allowed 5%/yr was rejected.

•

7. Project-Specific Risks M

• Total costs/m3 of treated water

Khilket WTP I (through PPP) are

significantly higher than present

fee/m3, even if viability gap funding is

considered.

• Financial absorption capacity of

DWASA for the higher Khilket WTP I

(production) costs, as well as the

higher production costs for recently

commissioned Saidabad WTP II,

seems questionable if significant

•



2

adjustments in the tariff levels keep

being rejected.

• The competences and experience of

DWASA financial (/ICT) staff in

automatic accounting and reporting

systems are limited. Intensified

continuation of ongoing FM training

program is clearly required.

• Same applies for related MIS &

Control systems

8. Implementation delays

(a) Within Co-Financier

Organizations (ADB, AFD,

IBD)

(b) With GoB

(c) Procurement of Design

and Supervision

consultants

M

M

• Representatives from each financing

agency to be responsible for

monitoring, identifying and reporting

on milestone and critical activities.

Any potential delays to be reported in

a timely manner and action taken to

remedy or mitigate.

• DWASA should nominate Project

director and establish PMU for

monitoring, identifying and reporting

on milestone and critical activities.

Any potential delays to be reported in

a timely manner and action taken to

remedy or mitigate.

•

•

9. Overall Inherent Risk M

Concerning the Overall Inherent Risks the

present political unrest and violence

seems the biggest risk to destabilise

Bangladesh in the coming years, and thus

may hamper DWASA’s development and

financial situation

Control Risks

10. Executing Entity/

DWASA

M

See above Entity Specific Risks, in addition:

• DWASA is still a more or less ‘traditionally’ organised

organization, in which each department and/or unit is executing



3

their own tasks, with little coordination or a joint overall

approach.

• Presently a DWASA ‘Think-tank’ is being initiated to discuss

necessary changes in DWASA ‘mission’/strategy and organization

structure. Participants will have mixed background; DWASA top

mgt, GOVERNMENT repr’s, knowledgeable local experts,

consultants)

• DWASA is also a rather centralised organization; no. of staff at HQ

exceeds the total number of staff/employees in all in the

respective 12 zones together.

• The PPP cell in DWASA is still in its infancy and doesn’t have

experience with PPP type of projects like Khilket WTP phase 1.

Specific training program seems advisable, certainly if a Khilket

PPP set up will be implemented.

11. Flow of Funds L

DWASA has handled in the past years several ADB and other IFI

loans, apparently without major problems

12. Staffing M

• The staffing of the FM division may be considered as weak in

terms of qualifications and competences, and not really up to

date with modern automated accounting and /MIS systems.

• This is considered a result of DWASA’s low salary levels and lack

of attractive work environment.

• Most DWASA staff has a civil engineering background, and little

affinity with non-technical, or organizational - FM issues.

Therefore FM issues and problems don’t get the proper attention

at top-middle mgt level.

• Also adequate FM infrastructure is lacking, i.e. inadequate

hardware (PC’s) and (2G) internet connections, no central

interactive database, using mostly pirated software, and no virus

protection etc.

• Clearly the capacity building program as being initiated and

executed by the DCBP project should be continued on an

intensified scale.

13. Accounting Policies

and Procedures

L • DWASA follows closely the respective Bangladesh and

international accounting requirements, including involving

qualifies professional external Auditor’s company

14. Internal audit M

• An internal auditing unit exists, but is mainly addressing queries

from the Government of Bangladesh, and other external

stakeholders on DWASA’s annual report

• The internal auditing could and should be enforced and improved.

15. External Audit L

External audits are conducted annually by a qualified Auditing

company, with clear and adequate assignment. In Auditor’s

‘Qualified Opinion” they give clear summary of deficiencies in

DWASA’s FM reporting and accounts.

16. Reporting &

Monitoring

M

• Reporting of the monthly performances (I. Operations, II. Finance,

III Planning & Administration) is too slow and mostly 4-5 months

after the respective month. As a result these figures aren’t very

useful for responsive and adequate mgt actions.

• No electronic data exchange linkage of financial/ accounting

systems between the zones and HQ

• .FCBC advised on computerised accounting system, but not yet

(fully) implemented, even the billing & payment system not



4

functioning optimal yet.

17. Information Systems M

• The further development of the MIS seems to have much interest

of senior DWASA mgt, however presently still not sufficient

budgets are made available.

• Serious efforts are made (for several years now) to link the

electronic billing system to the DWASA accounting system, which

prove rather cumbersome. Even the involved bank affiliated

offices don’t always have adequate IT infra structure for online

transferring of billing payments data

• DWASA IT unit consists only of 2 staff, which has to collect and

process all required MIS information. No actual assessment or

analyses of the data is being conducted

• In the DWSSDP projects efforts are made to monitor NRW losses

through a GPS monitoring.

18. Overall Control Risk M

• Generally it can be stated that the FM risks, flaws and

imperfections are recognised by DWASA, and programs are

ongoing to mitigate, or to improve that. See also activities and Q

progress reports of the ADB-FCBP project.

• However more effective attention and involvement by the

DWASA top management should be given concerning the various

risks – and the regular internal (MIS) reporting of their impacts-,

in order to be able to effectively direct and guide the DWASA

middle mgt and staff through the difficult tasks and financial

years which lay ahead of the DWASA organization in the coming

5-10 years.

H=High, M=Moderate, L= Low



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APPENDIX 20: SOCIAL SAFEGUARD COSTS

DETAILS BUDGET

Sl No

Category/ Item for compensation

Unit Compensation Rate (Tk)

Amount of Compensation

Total Compensation

A. Compensation for land

A1 Intake

Cropped land Decimal 175,000 1,250 218,750,000

A2 Intake to Sejan juice

Highland (commercial) Decimal 700,000 300 210,000,000

Highland (residential) Decimal 400,000 1,000 400,000,000

Cropped land Decimal 250,000 12,100 3,025,000,000

A3 Sejan Juice to Gandharbpur


Highland (residential) Decimal 450,000 650 292,500,000

Cropped land Decimal 250,000 2106 526,500,000

Pond/water body Decimal 300,000 26 7,800,000

A4 Sejan Juice to Saidabad N/A N/A

A5 Gandharbpur WTP N/A N/A

A6 Gandharbpur to Murapara N/A N/A

A7 Shitalakhaya river crossing N/A N/A

A8 Rupganj to Beraid


Highland (residential) Decimal 450,000 286 128,700,000

Cropped land Decimal 250,000 2228 557,000,000

A9 Balu river to Baridhara N/A N/A 703,900,000

Sub-Total A 4,557,650,000

B Stamp duty & Registration cost (7.5% of the land value) (Land price X0.075)

319,035,500

Sub-Total B 319,035,500

Sub- Total (A-B) 4,876,685,500

C Other Compensation

Compensation for land lease Decimal/6 months

600 700 420,000

Sub-Total C 420,000

D Compensation for structure

D1 Main Structures

Pucca sft 1,000 42,037 42,037,000



2

Semi pucca sft 700 56,651 39,655,700

Tin Made Structure sft 250 143,009 35,752,250

Katcha/Thatched sft 150 14,749 2,212,350

D2 Secondary Structure

Latrine (Slab) No. Latrine 5,000 21 105,000

Latrine (Pucca) No. Latrine 20,000 5 100,000

Boundary Wall (Pucca) Rft RFT 600 362 217,200

Tube well tube well 5,000 127 635,000

D3 Moving allowance of structures

Pucca sft 35 42,037 1,471,295

Semi pucca sft 25 56,651 1,416,275

Tin Made Structure sft 20 143,009 2,860,180

Katcha/Thatched sft 15 14,749 221,235

D4 Compensation for structure leased

sft/6 months 60 4,100 246,000

Sub-Total D 126,929,485

E Relocation for vendors Vendor 3,000 266 798,000

Sub-Total E 798,000

F Compensation for fixed asset (utility)

HH 1,000 518 518,000

Sub-Total F 518,000

G Relocation of residence or means of livelihood

Transition allowance (for 6 months)

day/HHH 300 1,736 93,744,000

Sub-Total G 93,744,000

H Income Restoration for crop and fish loss

Cultivator (Land owner) (crop loss)

Decimal/year 900 7,968 7,171,200

Cultivator (squatter) (crop loss) Decimal/year 900 7,500 6,750,000

Sharecroppers (50%) (crop loss)

Decimal/year 450 2,380 1,071,000

Land owners (50%) (crop loss) Decimal/year 450 2,380 1,071,000

Cultivator (Pond owner) (fish loss)

Decimal/year 1,200 102 122,400

Sub-Total H 16,185,600

I Compensation for Trees/timber

Large Quantity 12,000 69 828,000

Medium Quantity 8,000 317 2,536,000

Small Quantity 2,000 190 380,000

Sub-Total I 3,744,000

J Compensation for fruit Quantity LS 364 2,000,000

Sub-Total J 2,000,000

K Cost for seeding/sapling No. of fruit trees

300 364 109,200



3

Sub-Total K 109,200

L Loss of business LS 376 4,000,000

Sub-Total L 4,000,000

M Grant to restore lost livelihood (Agriculture, business and wage earning)

DPs 20,000 1,048 20,960,000

Sub-Total M 20,960,000

N Public services and facilities

CPR CPR quantity

500,000 28 14,000,000

Sub-Total N 14,000,000

O Special provisions

Special Assistance to Vulnerable household (for 1 year) (1625X4X12)

Household 58,800 367 21,579,600

Sub-Total O 21,579,600

P Training program(s) DPs 8,000 1,048 8,384,000

Sub-Total P 8,384,000

Q Facilities in the project area

1 deep tube well with 5 km pipe line in intake area

LS 20,000,000

Sub-Total Q 20,000,000

Sub Total (C-Q) 333,371,885

R SUB TOTAL FOR COMPENSATION & RELOCATION (A+B+C+D+E+F+G+H+I+J+K+L+M+N+O+P+Q)

5,210,057,385

S Administrative cost (5% of R) 260,502,869

T SUB TOTAL (S+R) 5,470,560,254

U Contingency cost (10% of T)

547,056,025

V Cost for implementing NGO

LS 80,000,000

W Monitoring and Evaluation cost

LS 80,000,000

GRAND TOTAL (T+U+V+W) 6,177,616,279

GRAND TOTAL (Dollar amount) (1 dollar = 80 taka) 77,220,203



4

Estimated cost for Sejan juice to Saidabad Area

Sl No

Category/ Item for compensation

Unit Compensation Rate (Tk)

Amount of Compensation

Total Compensation

D Compensation for structure

D1 Main Structures

Pucca sft 1,000 35422 35,422,000

Semi pucca sft 700 21282 14,897,400

Tin Made Structure sft 250 91324 22,831,000

Katcha/Thatched sft 150 2415 362,250

D2 Secondary Structure

Latrine (Slab) No. Latrine 5,000 3 15,000

Latrine (Pucca) No. Latrine 20,000 1 20,000

Boundary Wall (Pucca) Rft RFT 600 242 145,200

Tube well tube well 5,000 25 125,000

D3 Moving allowance of structures

Pucca sft 35 35422 1,239,770

Semi pucca sft 25 21282 532,050

Tin Made Structure sft 20 91324 1,826,480

Katcha/Thatched sft 15 2415 36,225

D4 Compensation for structure leased

sft/6 months 60 4,100 246,000

Sub-Total D 77,698,375

E Relocation for vendors Vendor 3,000 81 243,000

Sub-Total E 243,000

F Compensation for fixed asset (utility)

HH 1,000 241 241,000

Sub-Total F 241,000

G Relocation of residence or means of livelihood

Transition allowance (for 6 months)

day/HHH 300 249 74,700

Sub-Total G 74,700

L Loss of business LS 241 2,563,830

Sub-Total L 2,563,830

M Grant to restore lost livelihood (Agriculture, business and wage earning)

DPs 20,000 420 8,400,000

Sub-Total M 8,400,000

N Public services and facilities

CPR CPR quantity

500,000 12 6,000,000

Sub-Total N 6,000,000



5

O Special provisions

Special Assistance to Vulnerable household (for 1 year) (1625X4X12)

Household 58,800 39 2,293,200

Sub-Total O 2,293,200

P Training program(s) DPs 8,000 459 3,672,000

Sub-Total P 3,672,000

R SUB TOTAL FOR COMPENSATION & RELOCATION (D+E+F+G+L+M+N+O+P)

101,186,105

S Administrative cost (5% of R) 5,059,305

T SUB TOTAL (S+R) 106,245,410

U Contingency cost (10% of T)

10,624,541

GRAND TOTAL (T+U) 116,869,951

GRAND TOTAL (Dollar amount) (1 dollar = 80 taka) 1,460,874



1

APPENDIX 22: MORPHOLOGICAL ASSESSMENT

Morphological assessment Meghna water intake (May 2013) - Summary The following summarizes the findings of this review by the river morphologist:

• Previous morphological assessment came to the correct conclusion that Bishnondi is a good

location for the offtake. The limited additional studies carried out under this review confirm that

Bishnondi is a proper site for the water intake.

• It would have been better when the morphologist would have been consulted for a second time

during the feasibility study when the preliminary designs of the water intake were under

preparation.

• There is no need for a physical model to better predict bank erosion rates at Bishnondi

• The preferred alternative for the water intake has a number of negative impacts: it will block

floodplain flow and might cause abutment scour near the intake, it creates a very 3-dimensional

and turbulent flow pattern at the intake and the connecting canal to the pumping station might

be attacked by strongly curved flows

• To remedy these negative impacts it is proposed to construct a guide bund upstream of the

intake.

• Tentatively the costs of the guide bund are about 1.4 million US$ assuming a length of the

straight part of the guide bund of about 150 m. The costs increase or decrease almost linearly

with the length of the guide bund. Other design parameters like the design scour depth have a

smaller impact on the costs.

• To properly dimension this guide bund and to improve the water intake an additional study is

needed.

• The costs of such an additional study is about 0.4 million US$, international travel, DSA’s and

some other costs included. Such a study will take about one year.

• The additional study includes a physical model to determine the optimal shape and length of the

guide bund and to improve the design of the intake. The costs of the model study are about 0.1

million US$, but are already included in the overall costs of the proposed additional study. The

model study will take about 7.5 months.

• As an alternative to the physical model at RRI a 2D mathematical model study could be carried

out by IWM. Probably this will be cheaper, but it will not allow to optimize the design of the

water intake proper, to test how water intake and guide bund are to be "connected" and to

check on the proposed measures to limit the sediment ingress into the intake, and hence is not

recommended.

• The required mathematical model study to determine the discharge and water level boundary

conditions for the physical model could be outsourced to IWM.

• All model studies require proper guidance from the professional staff carrying out the additional

study.

• As part of the additional study, some field surveys are proposed. In particular a topographic and

hydrographic survey of the Meghna River is required. Probably also a geotechnical survey is

required to support the analysis of the future stability of the guide bund cum bank protection

works.



2

3.6 Preliminary design of guide bund and cost estimate

Table 3.1 Estimate of costs of guide bund upstream and downstream of the intake structure of about

200 m long (150 m upstream and 50 m downstream) and upstream radius of 50 m

4.3 Field surveys

The following field surveys are needed:

• Topographic survey of the right (and possibly left) floodplain of the Meghna River in combination

detailed echo sounding of the river bed. Reach to be covered about 10 km upstream to 2 km

Length Unit cost Total costs

(m) (US$) (103 US$)

Dredging normal profile

(horizontal -5M+PWD)

160 150 24000 2.5 60,000

Dredging in floodplain (-5m

+PWD)

280 125 35000 2.5 87,500

Dredging near intake

(horizontal -12.5 m +PWD)

700 50 35000 2.5 87,500

Construction guide bund

above floodplain level

300 325 97500 2.5 243,750

Bank protection 325 2200 715,000

Land compensation (m2) 50 325 16250 5 81,250

Supervision (5%) 63,750

Contingencies (5%) 66,938

Total 1,405,688

Item Unit

(m3/m or

m2/m)

Total



3

downstream of planned intake location. Cross-sections tentatively every 200 m, and in lateral

direction level points every 25 m.

• Detailed soundings of the river and floodplain area near the planned intake and guide bund,

concentrating on the slopes of the banks (cross-sections every 50 m and lateral distance

between level points 5 m)

• Geotechnical Study: some 5 borings down to about 10 m below the deepest scour level expected

in the proposed alignment of the guide bund

4.4 Required model studies: set-up and cost estimate

For a number of issues a supporting model study is required. Depending on the type of issue to be

studied a mathematical model or a physical model is most appropriate. Table 4.1 provides an

overview of issues for which modelling support is needed, and the type of model which can best be

used is indicated. Only for the study of the guide bund dimensions both a mathematical model and a

physical model can be used. For all other issues it is obvious which type of model is relevant.

Issue to study Mathematical model Physical model

Discharge and water level

boundary conditions

On basis of General Model of IWM

Guide bund dimensions: shape,

length and upstream curvature

2D flow model Fixed bed model with part of main

channel and right floodplain

Scour assessment and level of

falling apron

Fixed bed model with locally loose

bed

3D flow pattern at intake and

reduction of sediment ingress

Fixed bed model: detailed flow

measurements

Table 4.1 Support from model studies

A physical model has the advantage that flow pattern and other phenomenon can actually be

observed. Such a model can also be used for demonstration purposes. As also scour and the flow

pattern at the intake and the reduction of the sediment ingress into the intake needs to be studied,

it is advised to carry out a physical model study in which these other issues can be studied as well.

4.5 Set-up of additional study

Activities Month

1 2 3 4 5 6 7 8 9 10 11 12 13

Selection consultants

Mobilization

Inception

Contracts outsourcing

Topographic and hydrographic survey

Geotechnical survey (if needed)

IWM model study boundary conditions

RRI scale model

River morphological study

Initial design guide bund

Improvements design intake cum guide bund

Cost estimates

Estimate required monitoring & maintenance

Contract documents

Staff input Manmonths

River Engineer/TL (Int) 3

Survey supervisor (N) 1

Geotechnical expert (N) 1

Modelling expert (N) 4

Hydraulic design engineer (I) 0.5

Costing and contract document specialist (I) 1.5



4

Table 4.2 Time schedule and staffing of proposed additional study

Table 4.2 presents a tentative time schedule of the proposed study plus the required staff input. The

required budget for this study is about 0.4 million US$ (see Table 4.3).

Table 4.3 Estimate of costs of additional study (I = international expert, N = national expert)

Cost estimates

In accordance with ADB TECH NOTE ON COST ESTIMATES (Norio email 20/5): cost estimates are prepared and presented separately for each of the main project cost items. Base Costs are prepared for each project component and subcomponent by expenditure category on the basis of a detailed estimate of project inputs for each component and subcomponent. Contingencies consist of separate physical and price contingency allowances. Physical contingencies are calculated as a percentage of base cost components. Price contingencies are calculated by applying a projected cost escalation to the sum of the base cost and physical contingencies. Physical Contingency. The physical contingency is a provision for uncertainty associated with quantities and categories of expenditures. Therefore, the greater the uncertainty, the greater the physical contingency allowance. Given that uncertainty may vary significantly between project components and subcomponents, or between expenditure categories, different allowances can be applied on this basis. Uncertainty also typically varies over the project preparation cycle. As the project design is refined over the preparation process progresses, uncertainty regarding the quantities of inputs should decline. By appraisal, the project design should have been refined to a level whereby physical contingences can be set in the range of 5–15%. However, cases may arise where more significant levels of uncertainty remain and, therefore, a greater physical contingency provision may be required. The physical contingency is calculated as a percentage of base cost for each component, subcomponent, and expenditure category.

Item Cost (US$)

Topographic and hydrographic survey 20000

Geotechnical survey 5000

IWM model study boundary conditions 20000

RRI physical model 120000

River Engineer/TL (Int) 3 35000 105000

Survey supervisor (N) 1 5000 5000

Geotechnical expert (N) 1 5000 5000

Modelling expert (N) 4 5000 20000

Hydraulic design engineer (I) 0.5 35000 17500

Costing and contract document specialist (I) 1.5 35000 52500

Contingencies (5%) 18500

Total 388500



1

APPENDIX 23: NOTES ON PIPE SIZE OPTIMISATION

Pipe Size Optimisation

The smallest pipe able to carry the flow is usually the most expensive to operate, unless it flows by

gravity. In this case (Khilkhet project), pumping is required, so an optimal balance must be sought

between the high capital cost (Capex) of over-sized pipes with less pumping, cheaper pumps and

lower operating cost (Opex), versus high pumping (electricity) cost of under-sized pipes. A typical

long term (30 years) pumping costs and depreciation calculation to establish the optimum balance

between operating and capital costs is illustrated below. It was done recently for a similar sized bulk

water supply scheme in south east Asia.

Optimisation analysis was carried out to establish the most economic pipe diameter and pump

combination by considering the annual cost of pumping for a range of pipe sizes and pipeline capital

costs. This analysis includes only the costs of project components that affect the transmission pipe

sizing. Therefore, the costs shown are not total project costs. The graphs combine the following costs:

• Capital cost of the pipeline (supply and construction only, without design, taxes, duties,

management contractor fees etc);

• Capital cost of the pump station (including pumps + electrical equipment);

• Operating, maintenance and periodic equipment replacement costs over a 30 year project

lifetime, discounted to present day prices;

• Total electricity cost of pumping over a 30 year project lifetime, discounted (NPV).

This approach allows different arrangements with different pipe sizes, pump sizes and operating costs

to be compared on an equal Net Present Value (NPV) basis. The main assumptions made for this

NPV analysis are an 8% discount rate and a 30 year project life.

Optimal pipe size is larger if pumping costs are high and smaller if pipes are more expensive to supply

or install. e.g. the cost of installing pipes in open fields (e.g. from the Intake to Dhaka) or underwater

in canals or drains, is similar, but the cost to install pipes under congested roads, restricted to

overnight working, as in Dhaka, is about double, while installing them above ground on piers is only

30% of that cost. Pipes with a concrete weight coat for underwater installation are 30 to 40% more

expensive to supply than pipes simply designed for underground or above ground use.

Typical results are plotted in Figures 1 and 2 for a wide range of pipe sizes so that the optimal

diameters can be identified; the lowest bar indicates the most economic pipe size over the life of the

project.

Pipelines are analysed in terms of hydraulic properties, pipe supply and installation costs, and the

cost of electricity for pumping the required flow through the section. The negative pumping cost seen

for pipe diameters 2000 mm and larger in Figure 1 indicates that pumping is not required and that

gravity flow is feasible.

In Fig. 1 and 2 the graphs on the left are Base Case and those on the right a sensitivity analysis

looking at key variables. The sensitivity analysis shows that optimal pipe diameter is 1-200 mm

smaller in the case of:

• Project life reduced to 20 years;

• Discount rate higher than 12.5%;

• A 20% underestimate in the cost of the pipeline.

Similarly the sensitivity analysis shows that optimal pipe diameter is 1-200 mm bigger in the case of:



2

• Electricity tariff 50% higher than estimated;

• Discount rate lower than 4%.

• A 20% overestimate in the cost of the pipeline

The bar charts show that pipe costs increase about 10% for each increase in pipe diameter, but the

total life time NPV project cost differs very little for one pipe size bigger or smaller than the optimum

size.

Figure 1: Pipe diameter Optimisation with NPV Pump and Pipe Costs 6m3/s

Figure 2: Pipe Diameter Optimisation with NPV Pump and Pipe Cost 4m3/s

-200

0

200

400

600

800

1000

1200

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200

30

Yr

NP

V C

os

t

(Rp

Billio

n)

Pipe Diameter (mm)

Optimum Pipe DiameterSteel 6.7 km, Pump head -12mPipe under Road, Q = 6m3/s

Pipeline cost Pump station cost O&M Electricity

200,000

220,000

240,000

260,000

280,000

300,000

320,000

340,000

360,000

380,000

400,000

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200

30 Y

r N

PV

Co

st

(R

p M

)

Diameter (mm)

30 Year Net Present ValueSteel 6.7 km, Pump head -12mPipe under Road, Q = 6m3/s

Base Case Low discount rate Normal Disc Rate

High discount rate Cheap Plant Expensive Plant

High Elec Cost V High Elec Cost High Pipe Cost

Low Pipe Cost Long Lifetime BOOT

Optimum Pipe Diameter

Steel 12.25 km, Pump head 27m

Pipe under Road, Q = 4 m3/s

0

100

200

300

400

500

600

700

800

900

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200

Pipe Diameter (mm)

30

Yr

NP

V C

os

t

(Rp

Bil

lio

n)

Pipeline cost Pump station cost O&M Electricity

30 Year Net Present Value

Steel 12.25 km, Pump head 27m

Pipe under Road, Q = 4 m3/s

350,000

400,000

450,000

500,000

550,000

600,000

650,000

700,000

750,000

800,000

1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 2200

Diameter (mm)

30 Y

r N

PV

Co

st

(R

p M

)

Base Case Low discount rate Normal Disc Rate High discount rate

Cheap Plant Expensive Plant High Elec Cost V High Elec Cost

High Pipe Cost Low Pipe Cost Long Lifetime BOOT



1

APPENDIX 24: RESPONSE TO DWASA COMMENTS ON DFR2

Table 6 - DFR2 – Comment-response by DWASA’s PMU

Comments on DFR2.

River Morphology: recommendation for

implementation in River Morphology report may

be incorporated in the bid document .

Summary has been added as Appendix 23.

Table -1 : Proposed treated Water turbidity will be

the same as Saidabad Phase-II Water Treatment

Plant.

Noted, thank you and table amended.

Table -1 : Public consultation at pipe line route and

WTP site are going on.

Noted, thank you and table amended

Page -5 Design Built contractor will give

recommendation and process whether the WTP

full automatic as partial automatic. We agree with

the recommendation on WTP page-5.

OK

Waste Water :As the proposed new Water

Treatment Plant resulting the additional sewage

and sludge, the detail technical extensive

feasibility study of Mirpur and Uttara sewage plant

and preparation of project of STP may be included

in loan consultant TOR.

26/2/13 email from ADB states: DWASA’s MD

advised ADB they are reasonably confident

that the capital investment funding required

for Dasherkandi STP will be secured. DWASA

expects ADB to continue support in water

supply (particularly DNI of remaining areas),

while making efforts for bringing in other DPs

in wastewater management, such as World

Bank and EDCF. Thus, no further work on

wastewater management is required by the

PPTA.

Pagra and Dasherkandi STPs under

development will more than compensate for

the incremental volume of wastewater from

Gandharbpur. Therefore not to be included in

this project.

Para 6.6.2 : the PPTA consultant recommend the

pipe bridge on river. But Dhaka WASA need the

another agency permission that is Dhaka urban

transport authority which will be very difficult. We

recommend micro tunneling method which is very

common in different countries and time saving ,

easy installed and cost saving .

Noted and report has been revised to address

this. We believe micro-tunnelling or thrust

boring is more expensive than steel box girder

pipe bridges and worse for security of supply,

but generally cheaper pumping cost. The

decision should be made by DWASAA

considering capital and pumping costs and

security of supply.

Para 109(ii) : The river water quality monitoring

cost task may be continue up to the construction

and O&M period. This cost may be include in the

project cost.

We agree the water quality monitoring should

continue as long as possible to give bidders a

sound basis for designing the WTP and

estimating their risk. The cofinanciers should

decide how it is paid.

Figure 8 : In project implementation schedule

mentioned for 7 packages but in table 40

combined and recommended for only 3 contract

package. Transmission line should be 4 packages,

PS and intake 1 package and WTP 1 package and

- The schedule has been updated to show 3

packages, but packaging is still being discussed

among cofinanciers and PPTA.

Recommendations should be presented shortly

(with justification) after agreement.



2

River crossing may be separate package. In

Saidabad first phase work , there was 6 package.

Implementation time considered 4 years Because

3 yrs is more pushy .

- The works are broken down into the smallest

potential contracts (see Section III F), so they

can be grouped, when decided, into the most

favored packages, which will be influenced by

the ongoing Market Sounding survey.

- If Saidabad is omitted, it would not be

sensible to separate out the Juice to WTP

pipeline.

- We agree the river crossings, especially if

done by thrust-boring, will likely be done by a

separate specialist contractor, but we

recommend that these be subcontracted by

the main pipeline contractor, to minimize

conflict between them, as close coordination

will be essential.

- We have not recommended splitting the

Intake from the WTP DBO for many reasons,

the most important, perhaps, to avoid the WTP

operator claiming against the Intake operator

for water quality /quantity shortfalls.

- Bothe construction and operating periods

should be agreed after seeing the results of the

Market Sounding survey with potential

bidders.

In para 149: Pipe Materials : In Para 149(i) PCCP

has been mentioned as RCCP which is wrong . This

is PCCP ( prestressed concrete cylinder pipe). This

pipe is widely using in China, south east asia, india

, Vietnam for long length bigger dia transmission

main . This is one kind of steel pipe with outside

coating by prestressed wire and concrete..Without

investigate technical reason, consultant reject

PCCP as pipe materials. The detail of the pipe are

enclosed separate sheet. We recommend to keep

the PCCP as alternate pipe options

Thank you for the information on PCCP. We

have included PCCP as an option for pipe

material, to be considered for bid document

preparation. We have included additional

discussion of pros & cons in the text of para

155.

We visited Jain irrigation, India, one of the HDPE

pipe manufacturer in last year. The manufacturer

has the capacity to produce 2000 MM dia on more

dia pipe. Our recommendation to select HDPE

pipes from 600mm to 1000mm dia treated water

transmission pipe materials for this project as

alternative.

HDPE is an excellent pipe material and very

popular for smaller pipes, but generally

uneconomic for pressure pipe at over 1m dia.

No pipelines are proposed on the project with

diameters under 1.0m.

We would always recommend installing one

larger pipe rather than 2 smaller parallel pipes.

There is no specific recommendation from PPTA

consultant regarding the selection of pipe

materials, selecting of Intake, Water Treatment

process and others. PPTA just put their

observation on feasibility study report . PPTA

consultant needs to recommend specifically for

PPTA has now included many specific

recommendations on pipe materials etc. in the

FR. Unless there is a clear technical, economic

or environmental etc. reason for rejecting a FS

option, it is not appropriate at this stage for

PPTA to select one specific option over

another, without the benefit of essential



3

each of above mentioned items. information, like site investigation, that will be

available at detail design. If there are any

options DWASA does not want included, e.g.

pipe bridges, these can be excluded at bid doc

preparation.

Treatment process Page 18 : It is agreed that full

automation of any system has yet not improved in

our country. So an option comprising of manual &

automation should be taken in consideration.

A separate component as pilot scheme for me

improvement of water treatment process may be

(Ferrate Technology). We should have positive

attitude towards introducing of any new

methodology which is better than the

conventional water treatment & cost effective in

the long run, please see the attached technical

data sheet for your kind reference.

Noted. The WTP process will be selected and

designed by the DBO contractor, based on a

performance specification which defines the

quality input and quantity / quality output,

therefore details like this should be his

decision, but the bid documents can be

prescriptive if DWASA has good reasons for

this, and especially if the operating period is

short.

Institutional Development: Dhaka WASA need to

build the capacity of existing staff and officers

specifically O&M of WTP, DMA .

PPTA consultants have drafted the TOR for

loan consultants (supervision) and included

allowance for DWASA staff training.

Ground Water : A study on existing ground water

abstraction and aquifer for further study may be

included in the project.( Para 25)

Funding this must be the decision of the

cofinanciers.

Construction & Industrial safety aspects should be

prime importance in order to turn aside hazard

during implementation and operation of the

project.

This is a very important point and should be

enforced on the winning contractors through

their contracts.

Solar panels if proved to be cost effective may be

considered as one of the additional/standby

power supply system to run the plant/Intake.

Solar PV power will be able to provide standby

supply only for small items. Power

requirements of the WTP and Intake sites will

be too high for significant contribution by PV.

Furthermore, standby power must be reliable

and solar is dependent on sunshine, without

batteries which are more expensive per kW

than generators.

The O&M period for phase-I should be not more

than 03 (three) years.

ADB and PPTA are aware a short Operating

period is DWASA’s preference. PPTA are

concerned that this will not encourage the

DBO contractor to design the Intake, PS and

WTP to run smoothly and efficiently with

minimal breakdowns, plant replacement,

control adjustments, power and chemical cost,

staff input, maintenance time, etc.

PPTA is conducting a Market sounding to check

the opinion of potential DBO contractors to the

preferred Operating period and its impact on

Bidder interest. This should be further

discussed and agreed with the financiers.

Technical Assistance Consultant’s Report€¦ · Final Report update – April 2014 ADB PPTA 8053...

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