The World Bank FOR OFFICIAL USE ONLY Report No. 7119-BD PROJECT COMPLETION REPORT BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (CREDIT 787-BD) February 17, 1988 Asia Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS USS1.00 - Tk26.50 Tkl a USSO.0377 Tkl M - US$37,700 ABBREVIATIONS AND GLOSSARY AGO - Authorised Grain Dealer Aman - The main rice crop, harvested November-January Aus - Rice crop harvested in July-August bn - Billion Boro - Rice crop harvested in April-June BRBD - Bangladesh Rural Development Board CSD - Central Storage Depot CIDA - Canadian International Development Agency DCA - Development Credit Agreement DGF - Director General of Food DICT - Directorate of Inspection, Control and Training DOF - Directorate of Food FAO - Food and Agriculture Organization of the United Nations GOB - Government of Bangladesh FRG - Federal Republic of Germany IDA - International Development Association LSD - Local Storage Depot M - Million PECU - Project Engineering and Construction Unit PP - Project Proforma PSC - Project Steering Committee PWD - Public Works Department RMB - World Bank Resident Mission, Bangladesh TPC - Temporary Purchase Centres UCCA - Upazilla Central Cooperative Association USAID - United States Agency for International Development Ka eWKOAL U emLY TH* WORLD SANK Wash˘wton. DC 20433 U.S.A. O0ke dS DwfatGal February 17, 1988 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Bangladesh Second Foodarain Storafe Proiect (Credit 787-BDI Attached, for information, is a copy of a report entitled 'Project Completion Report on Bangladesh Second Foodgrain Storage Project (Credit 787-BD)" prepared by the FAO/IBRD Cooperative Program. Further evaluation of this project by the Operations Evaluation Department has not been made. Attachment This document has ruuticted distrbution nd meg be u by reciplents only In the performance of their o:1cial duties. Its contents may not otherwise be dhcbrkod without World Bank autbodutin| BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) PROJECT COMPLETION REPORT TABLE OF CONTENTS Page No. Preface ... . . . * .................i Basic Data Sheet ................................... .... ........... ii Evaluation Summary ..... .... .... ......... . iii I. INTRODUCTION .. ............................................... 1 II. PROJECT PREPARATION AND APPRAISAL . . . 2 Origin and Preparation . .. ................................. 2 Pre-appraisal .. ..... ................. 3 Appraisal . ... ... .......... 4 Project Description ............. .......4 III. PROJECT IMPLEMENTATION . .. ................ 5 Delays in Effectiveness .................. . 5 Implementation Schedule .......... ............. . 6 Project Cost ....... ......... 6 Project Changes after Appraisal ........ ....... 7 Godown Construction ............ . ....... ........ 7 Relief Storage ..... ........ ...... . 8 Rehabilitation ..... ............ 9 Mechanical Drying Facilities ........... ... ....9 Weighing and Testing Equipment ..................... 9 Grain Quality control and Inspection ................ . 9 Cooperative Marketing .... ................ . . .10 Project Financing .... .... ......... ... .. 11 Credit Allocation . ..................... 12 IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT ... 13 Implementing Agencies . .... ............... 13 Project Steering Committee . . . 13 Project Implementation Unit . . . 13 project Engineering and Construction Unit ........... 14 Pest Control Training . ... . ............. 15 Organizational Improvements . . . 16 Planning, Monitoring and Evaluation ...................... 17 Accounting and Reporting . .................... ........ 17 Compliance with Covenants ....... . .......... ....... 18 V. PROJECT IMPACT ........................... 18 Utilization of Godovns ................................... 18 Physical Losses of Stored Grains . . 19 Beneficiaries. ............. 20 Impact on Private Sector. 20 Economic Re-evaluation . .21 Economic Rate of Return . .21 VI. IDA PERFORMANCE ..22 Overall Performance ..22 Supervision ..23 VII. WONCLUSIONS AND LESSONS LEARNED .23 TABLES 1. Foodgrain Production and Procurement 2. Comparison of Appraisal Cost Estimates and Actual Costs 3. District-wise Storage Capacity (LSD) 4. Purchase of Equipment and Vehicles 5. UCCA Paddy Marketing Programme 6. Annual Project Expenditures 7. Domestic Procurement 8. percentage Utilization of Selected Godowns 9. On-going and Approved MOF GRain STorage Construction Programme 10. Foodgrain Storage Capacity Utilization 11. Staffing and Staff Training of DICT 12. Foodgrain Recommended for Auction Sale and Destruction 13. Annual Operating Costs in Economic Terms 14. Investment Costs in Financial and Economic Terms 15. Economic Value of Paddy, Rice and Wheat 16. Computation of Economic Rate of Return ,HARTS 1. Organization of the Directorate General of Food 2. Monthly Open Market Rice Price MAP Location of Project Local Storage Depots APPENDICES 1. List of Documents Consulted 2. Status of Covenants MAP IBRD 12656R1 PROJECT COMPLETION REPORT BANGLADESH - SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) PREFACE This is the Project Completion Report (PCR) of the Second koodgrain Storage Project in Bangladesh, for which Credit 787-BD in the amount of US$25.0 million was approved on March 15, 1978. The Credit was closed on December 31, 1984, two and a half years later than originally expected; an unu.ed balance of US$4.6 million was cancelled. The date of final disbursement was October 7, 1985. The PCR was prepared by the PAO/IBRD Coorerative Program following missions to Bangladesh in July and September 1985, a review of the Staff Appraisal Report (No. 1715a-BD) dated February 15. 1978, the President's Report (No. P-2263-BD) dated.March 15, 1978, the Loan Agreement of April 12, 1978, correspondence with the Borrower, internal Bank memoranda on project issues as contained in relevant Bank files, as well as interviews with officials both in the Bank and in Bangladesh who have been associated with the project. A copy of the draft report was sent to the Borrower on August 31, 1987 for comments. No comments were received. This project has not been subjected to an audit by OED. non.cr OOIWlUYIO 3108Wl? BANGLADRat i0MID POO6O N BSTOtn PcrCT (CarT 787-3D) USIC DATA 3 mlT PcrCT DATA Appraisal Actual or Actual * * of expectation currat eatimate apPai"I estimte Pro ct cost (US$ mllIona 40.0 33.0 82 Lo Credit amount (US$ llionl 1 10* Dlebure d (US$ mill OU2 25.0 20.4 Uz CancaI U mls dllon) Data rd approval 0 Data Loan rent Date sffcty7ss Data phsical co inanta cov sta / Po rtion than co atd Closin dast 06/30/82 12/31/84 Economic rate of return zX a Financial rate of raturn (X) institutional performmnce Satisfactory Technlcal performance Sattiactory STAFF INPUTS /b FY74 FY75 Fm76 FY77 m78 Y79 Fo FY81 m2 mF3 W84 F5 FY6 Total Preapprfisal - 4.1 1.1 30.5 0.4 - - - 34.1 APraisal M.1 _ -_68.8 25.4 - - - - - - - - Nhlotiation- - - - 8.7 - - - - - - - - 8.7 Superlsion - - - - 8.0 29.5 11.4 35.4 15.7 26.8 17.7 9.2 6.5 160.3 Othtr - - - 0.2 1.7 - - - 0.2 - - - - .1 Total 0.1 4.1 1.1 99.5 44.2 29.5 11.4 35.4 15.9 26.8 17.r7 9.2 5. 301.5 CUMULATIVE DISWRSEMENTS FY9 F80 FY81 FY82 FY3 FY84 FY85 m6_6 Appraial eatiete (USS dillion) 0.3 7.8 16.6 25.0 25.0 25.0 25.0 25.0 Actual US millon 0.5 1.2 3.9 T.8 10.2 14.6 19.7 20.2 Actual as 2 of eatimat- 167 15 23 31 41 58 79 81 Date of final disburasment October 7. 1985 MISSION DATA Date No. of No. of Specializa- Nan- Date of Perfomaece Type of Mission (no/yr) days personw tioans / weeka report r tins /f Trend/s problem /b Preparation /c - - - - 10/75 Pre ppraeal 11/6 1 4 I ppraisal 04-05177 20 6 - 1 2178 Subtotal 37 27 Supervision 1 07/78 7 2 * 2 07/19/78 1 2 N supervisn 2 06/79 14 3 e.m_ f 6 06119/79 1 2 0 Supervision 3 097Y0 /d I _/ 09/18/80 1 2 0 Supervisto, 4 06/81 14 2 .f 4 528/81 2 2 0 Sumrvison 5 12781 Id 3 d.p c N Supervision 6 04/82 5 I f.b 04/28182 2 1 Supervision 7 02/83 Id 2 P /d 02/22/83 2 1 N SuprSion 8 11/8 10 l 211N Supervfion 9 06184 Id 2 o. d 06/1084 2 I Subtotal 50 16 Completion 07/85 8 2 3 11/85 * 09-10/85 Total 95 46 OT1HE PROJECT DATA Borrower noleani of Inaladesb Executing ministry ini `tr of Food Executing agencies Directorate of Food. Vublic Wor rtmnt and Mangledoh ural Developmnt Fund ?Fical year of borrower July I - June 30 Nme of currency (abbrevition) Taks (Tk) Apprai al rear aversas US$1.00 - k 15.51 Interven ng year avrate US$1.00 Tk 20.81 Coapletion year averae_ US$1.00 - ________ Follow-on project: None /a Calculated in term of sonthe from date of Board approval. 7 Inputs as staff-weeks. Source: World Bonk Planning and Budgeting Departmnt. 7 Based on the feasibility study finaced under First Foodgrals Storage Project (Credit 381-3D). 7 Done by R3B staff, number of days not specified. ae a - agriculturist; e - economist; p - program officer; d - engineer; f - financial analyst, - nagemnt consultant; b - agroindustrisa specialist; c - procur ment officer. /f I - problem-free or inor problem; 2 - moderato proble_; and 3 - major problem. i I - Improving; 2 - stetionary; 3 - deteriorating. h1 F - financial; M- mnageril; T - technical; P - politiecl; snd 0 - other. - iii - PROJECT COMPLETION REPORT BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (CR. 787-BD) EVALUATION SJJHARY Introduction i. The foodgrain production strategy of the Government of Bangladesh aims at increasing domest!:: production through a wide range of measures including the operation of a domestic foodgrain procurement and farmgate price support policy. The Second Fc3dgrain Storage Project is a sequel to the First Project which consisted of financing four grain silos with a total capacity of 226,500 tons primarily a storage and transshipment facilities for imported foodgrains. Obiectives ii. The main objective of the Second Project was to provide additional safe grain storage and procurement facilities in major grain surplus regions, thereby improving the Government's domestic foodgrain procurement program and reducing storage losses. The project was expected to cost US$40 million (Tk 620 million) over four years, with US$25 million financed by IDA. To achieve the objectives, the project included construction of 145,000 tons (290 godowns) new storage capacity.,/ 20,000 tons capacity *Twin Nissen* and similar godowns, and provision of other related facilities, equipment, technical assistance an training. The new and improved storage was expected to benefit the country through reducing annual foodgrain losses by some 11,000 tons, pest control in all Ministry of Food (MOF) facilities in the project area would reduce losses by at. additional 7,000 tons and the paddy dryer component by 1,000 tons. Implementation Experience iii. Responsibility for project implementation rested primarily with MOP. The Director General of Food was the manager of the project supported by a Project Implementation Unit. A Project Engineering and Construction Unit (PECU) within the Ministry of Public Works was made responsible for the engineering design and construction of godowns. A number of problems is Adding 70,000 tons and replacing some 75,000 tons of MOF storage facilities in the project area. - iv - arose during implementation that delayed completion. These included slowness in the establishment of PECU, acquisition oA' sites for storage buildings, and approval of project proforma, shortages of materials particularly cement and limited Annual Development Program (ADP) funds. The project was completed in 1983/84, two and a half years later than originally planned. Total project cost amounted to Tk 706 million (US$33 million), exceeding the appraisal estimate by 14S in the Taka terms. The lower than estimated project cost in dollars was due to shortfalls in some project components. Due to implementation delays and changed needs of the project, the rehabilitation component was reduced to 10,000 tons capacity; 20,000 tons capacity earmarked for relief storage was diverted for procurement functions; the paddy dryer coiaponent was dropped and sun-drying yards were added at 171 godown sites; purchase of vehicles and equipment was curtailed. The pest control component, which was supposed to generate significant savings in storage losses, has been severely hampered by deficiencies in staffing, training, equipment and mobility. Results iv. It appears that need for suitable storage facilities wus pressing in the early years of the project. In later years a rapid expansion of grain storage capacity has taken place in the seven project districts. By June 1984, the total nominal storage capacity in these districts rose to some 580,000 tons of which project godowns accounted for 25? (145,000 tons). At appraisal, domestic procurement of foodgrains in 1985/86 was projected at 725,000 in a normal year and 1,240,000 tons in a good year. However, only in 1980/81 was a volume of over 1 M tons domestically procured, in the remaining years procurement was between ?00,000-350,000 tons. The annual average utilization of project godowns has ranged between 57? and 124S over the past five years. V. Recent studies have indicated that losses prevented through storage are less then expected at appraisal. The annual grain losses prevented by the project as completed (excluding rehabilitated storage) is now estimated at about 8,000 tons. The re-estimated economic rate of return (ERR) is 8? compared with 21 2./estimated at appraisal. However, the re-estimated ERR does not include benefits from rehabilitation, pest control and paddy drying, which could not be quantified but are believed to be substantial. The ERR hna also been significantly reduced by a lower rice price projection than at appraisal and slow implementation. As at appraisal, the ERR does not take into account a significant but unquantifiable benefit from increased production likely to have arisen from incentive support prices to producers. 2/ Appraisal ERR were: 14? on the storage component, over 50 on pest control and 242 on paddy drying. v Sustainability vi. The project achieved its basic objective of providing additional safe grain storage and procurement facilities and, through these, (a) reduced physical losses in foodgrains, (b) strengthened the Government's farm price support system needed to increase foodgrain production, (c) improved the operation of the Public Food Distribution System, and (d) enhanced the efficiency of foodgrain stock management and transportation. The p"3ject component strengthening grain inspection and pest control operations eas complemented by additional technical assistance provided by FAO. And further support in the areas of grain transportation logistics and telecommunications was made available vith financial and technical assistance from the Federal Republic of Germany. The technology supported by the project is adopted to the local conditions and no change in technology is expected to be required in the foreseeable future. Based on the project's achievements as observed, the complementary assistance provided, and the suitability of the storage and stock management technology, it can be safely assumed that the project is sustainable. Findins and Lessons vii. The following main lessons can be learned from the experience gained with this projects (a) Land acquisition is a complex matter in Bangladesh and required close attention during preparation and appraisal to avoid delays in project implementation. (b) The importance of careful preparation and project design cannot be over-emphasized. Although the Dhaka-type godown chosen in the project is sturdy and functional, its costs appear to be high compared to storage constructions in other countries of the region. For future storage projects a study of alternative designs used in the region is recommended. Another point that came out in this project is that storage would be more efficient if sites were planned and developed to include a complete package of godowns and ancillaries such as concrete yards for receiving and drying procured grain. (c) Proper technical supervision during construction and startup of operations is critical, and capable accounting staff should be recruited early to keep project accounts and prepare disbursement claims in a timely fashion. (d) Once again the experience suggests the importance of adequate and timely release of budget funds to enable continuous progress in project implementation. Availability of funds for maintenance is critical for - vi - effective utilization of project constructions. For future projects it is suggested that each storage manager be provided with an annual budget for undertaking minor repairs and maintenance, thereby avoiding bureaucratic delays in decision-making. LANGLADESH SECOND FOODGRAIN STORAGE PROJECT (CREDIT 787-1D) PROJECT COMPLETION REPORT I. INTRODUCTION 1.1 The foodgrain production strategy of the Government of Bangladesh (GOB) alms at increasing domestic production through - (a) development of drainage, flood control and irrigation facilities for multiple cropping; (b) provision of yield-increasing technology such as HYV seeds, fertilizers and pesticides; (c) strengthenirg the extension, credit, and other farmer support services; and (d) operating a domestic foodgrain procurement and farmgate price support policy and related efforts. While the other elements of the strategy have had a longer history, GOB's domestic procurement operations became significant only recently with markedly increased procurement in 1975/76 when a bumper crop enabled GOB to procure 415,000 tons of rice out of a crop of 12.8 N tons (see Table 1). The coincidence of heavy imports of foodgrain and relief food into the country in that year has focussed attention on the need for a more immediate and practical policy for improving grain storage capacity in the country. Since then, a number of investment projects have been implemented in the agricultural sector, which, combined with GOB's procurement and pricing policies, have helped to increase production and procurement, rendering the public sector storage capacity inadequate in the subsequent five years. 1.2 Other major problems in the sub-sector were abnormal foodgraln losses in transit as well as in storage due to various factors including sub-standard storage facilities, and the lack of an effective pest control management, and organizational and managerial weaknesses of the Directorate of Food (DOF). 1.3 Traditionally, the public foodgrain procurement and distribution * system was Intended to prevent famines and provide food security through building up stocks from good harvests and distributing these in times of shortages. In recent years, the system has added on a number of other obJectives which include assurance of incentive prices for producers of foodgrains and fair prices to consumers, gradual reduction of foodgrain subsidies, targeting an increasing share of total public foodgrain distribution through various programes designed to reach the very poor, and distribution of emergency food relief to areas and people affected by natural disasters. 1.4 Policy decisions on grain marketing and storage are carried out through the Ministry of Food (MOF) which operates the public sector procurement, distribution and storage system. The Directorate of Food is the operating department of the Ministry. The Directorate has been reorganized in January 1984 in a general move by the GOB to decentralise operations of the various govermuent departments. 2 1.5 The Bank Group's involvement in the grain storage sub-sector started with the first Foodgrain Storage Project (Credit 381-BD) which provided funds for the construction of four silos with a total capacity of 226,500 tons of grain; improvements in grain inventory control and insect control for stored grain; technical assistance in management and operation of grain storage and transport facilities; and consultants for study of future foodgrain movements and storage needs of Bangladesh. The silos were intended primarily as storage and transshipment facilities for imported grains. IDA provided US$19.7 N and the Swedish Government Skr.25 M (about USS5.3 M). The project replaced Credit 83-PAK which was signed in February 1966, but suspended in December 1971 as a result of the liberation war and the subsequent independence of Bangladesh. By that time, project works had been almost completed. The project was reactivated in May 1973. After some delays following the civil war, It was successfully completed in June 1977. The project contributed considerably to alleviate Bangladesh's problem in timely and efficient handling and distribution of imported grain, exceeding in some years 2 N tons (Table 1), two to three-times the appraisal estimate. 1.6 In July 1978 IDA approved a Second Credit (787-B) of US$25 M for a four-year period (1978/79-1981/82) aimed at providing additional safe grain storage and procurement facilities in selected districts to strengthen domestic procurement operations in the public sector. The project was estimated to cost US$40 N including a foreign exchange component of USS11.7 M. 1.7 This project is the subject of this completion report. The report prepared by FAO/CP, is based on a review of the Appraisal Report (1715a-BD) dated 15 February 1978, the President's Report (P-2263-BO) dated 15 March 1978, the Development Credit Agreement dated 12 April, 1978 together with information obtained from the implementing agencies; a review of supervision reports and project files; field visits in June 1985 to selected project sites; discussions with project staff in the Directorate of Food; Interviews with Bank staff (Resident Mission - Ohaka) who have been associated with the project and a perusal of documents listed in Appendix 1. The report was reviewed by the Bank's RMB and headquarters project staff and finalised after incorporating only some changes and additions. II. PROJECT PREPARATION AND APPRAISAL 2.1 A consulting firm carried out a preparation study and finalised its report in October 1975. Pre-appraisal by Bank staff took place in November 1976; appraisal followed in April/May 1977. Oriain and Preparation 2.2 As part of the First Foodgrain Project, a consulting firm Carl Bro, Denmark, was engaged to prepare a Second Foodgrain Storage project. The consulting firm submitted its project preparation report in October 1975 - Bangladesh Foodgrain Storage II Feasibility Study" - recommending a project designed to enable the DOF to handle a foodgrain throughput of 1.7 M tons per annum, consisting largely of imported grain. The project comprised rehabilitation of existing flat storage involving a total capacity of 254,000 tons, construction of silos at Chalna and Khulna with an additional combined capacity of 52,000 tons, organizational improvements and training, and possibly provision of grain dryers in selected locations. The estimated total cost of the project was about US$29 M. Pre-appralsal 2.3 The consultant's study had raised a number of policy issues. These were addressed by a pre-appraisal mission which visited the country in November 1976 followed by an IDA Food Price Policy mission in 1977. The Ministry of Food refuted the study's conclusions on storage capacity, assessing the public sector storage need at 2 N tons capacity. 2.4 During the pre-appraisal mission's field work, the DOF submitted a revised project proposal which placed greater emphasis on the rehabilitation of existing storage facilities and the construction of new godowns to supplement the existing godown capacity. These proposals included rehabilitation of existing godowns involving a total capacity of 356,000 tons, construction of silos at Chalna and Khulna with an additional combined capacity of 75,000 tons, construction of new Dacca-type godowns j/ with a total nominal capacity of 243,000 tons and technical assistance for organizational improvements and project implementation. The estimated total -ost of the proposal was USS76.2 M. The project was to be implemented by an Engineering Directorate proposed to be set up within the OOF. 2.5 These proposals were examined and the pre-appraisal mission came up with a revised proposal deleting the silo and rehabilitation components and substantially increasing the technical assistance component. As revised by the mission, the proposed project included construction of new Dacca-type godowns with a total capacity of 200,000 tons, located mostly in major procurement regions; provision of dryers and electronic desk calculators and technical assistance (21 man-years) and training. The project was estimated to cost US$25.7 M. A new Directorate, within the Food Directorate, (Directorate of Maintenance and Construction) was proposed for the implementation of the project. 2.6 The mission excluded the silo component in view of its desire to keep the project and choice of construction techniques as simple as possible and within the management capacity of the DOF while meeting the most pressing need for grain storage, i.e. to strengthen the logistical base for expanding the GOB's procurment of domestic grain. Furthermore, inclusion of a Khulna/Chalna silo complex was considered to require further study of grain transport alternatives, which could not be done without unduly * delaying the project processing. The rehabilitation component was not considered because a country-wide government godown rehabilitation project was about to be implemented with British assistance. 2.7 The new construction of 200,000 tons capacity was in part based on the 'ssumption that GOB could only handle a throughput of some 2 M tons per year, given its budgetary and administrative constraints. With this addition, the MOF would have a total loading capacity of at least 1.6 M tons which would be adequate to handle 1.5 M tons of rice projected for domestic procurement for the 1986/87 crop year and to facilitate the government grain distribution of a volume well over 2 M tons per year. 1/ The Dacca-type godown is an enclosed structure made of concrete floor, brick walls and concrete roofs. 4 Appraisal 11&.8 As noted above, an important issue revolved around the estimate of additional grain storage requirements. Transport difficulties in Bangladesh were such that national availability of foodgrains co-existed with regional shortages. For storage designed to meet domestic procurement or emergency relief, location was considered more important than size of storage in determining ability to meet requirements. A case was therefore made for additional storage on a thana by thana basis. The project area was restricted to certain 'core' districts where more grain surplus areas existed and where the potential for streamlining procurement appeared to be available. In addition, CIDA's proposal to build Dacca-type godowns with a total capacity of 50,000 tons was also taken into account. Another concern during appraisal was the possible duplication of godown rehabilitation effort. Since the British assistance was confined to rehabilitation of Dacca-type godowns (which, the GOB considered, had not all been covered), rehabilitation of Twin-Nissen sheds and similar godowns were included in the IDA project. 2.9 As a complementary investment to protect stored grain, support to pest control activities was included at appraisal. Cooperative marketing assistance was another additional component being supported on a pilot basis. The scope of technical assistance was reduced by excluding some studies planned earlier and proposing assistance only to support activities directly concerned with project implementation. This reduction was in part to allay GOB's concern that the technical assistance requirement was excessive, particularly engineering consultants. 2.10 Because of MOF's organizational problems and its difficulty in getting qualified and experienced staff, responsibility fcr project implementation was entrusted to a new MOF Project Implementation Unit (PIU), instead of creating a new Directorate within MOF. Design, sub-contracting, supervision of construction works were to be carried out by a Project Engineering and Construction Unit (PECU) within GOB's Public Works Department (PWD), which would be responsible to the PIU. 2.11 From the preceding paragraphs it can be noted that from preparation to pre-appraisal the focus of the project shifted from assisting GOB in efficiently handling imported grain to strengthening the government's farmgate price support programme and procurement operations by providing storage facilities, equipment and technical assistance in core areas for domestic grain procurement. By addressing this issue and others like level of storage capacity, type and locations of storage, storage management and grain quality control, in retrospect, pre-appraisal and appraisal concentrated on the right issues. ProJect DescriPtion 2.12 The project covered seven districts of Bangladesh (Dinajpur, Rangpur, Bogra, Rajshahi, Jamalpur 1/ Mymensingh 1/ and Sylhet) and as negotiated, comprised the following components: I/ In December 1978, Mymensingh was divided into two districts - Mymensingh and Jamalpur. ! a) Construction of 145,000 ton (nominal) 1/ new storage capacity, including necessary ancillaries, at about 150 existing or new sites chosen for the availability of suitable Temporary Purchase Centres (TPCs) sites in their vicinity and rehabilitation of 25,000 tons of *Twin-Nissen" and similar godowns. b) Provision of weighing and testing equipment and mechanical drying facilities; c) Strengthening of the grain inspection and pest control operations of MOF through provision of equipment and vehicles, including motor launches, and the establishment of a new foodgrain testing laboratory. d) Implementation of a pilot project to develop the grain marketing potential of selected Upazilla Central Cooperative Associations. g/ e) Provision of technical assistance (10 man years) in engineering, pest control training, paddy drying and procurement systems and studies for the evaluation of project benefits. f) Establishment of a Project Implementation Unit and a Monitoring Cell and strengthening of the Planning Cell, within MOF. g) Additionally, in selected flood or cyclone prone districts outside the project area, the project would provide for the construction of 20,009 tons of storage godowns to facilitate GOB relief response to emergencies. III. PROJECT IMPLEMENTATION I .~~~~~~~~~~~~~~~~~~~ Delays in Effectiveness 3.1 The negotiations for the credit took place in December 1977. The Bank's Board of Directors approved the credit on 3 March 1978. The Credit was signed on 12 April 1978 and the target date in the Development Credit Agreement for fulfilling the conditions of effectiveness was specified as 12 July 1978. Because of delays in the approval of the Project Proforma (PP), administrative clearance for the establishment of PECU, and the opening of separate accounts for project funds, the Credit effectiveness was postponed to 30 September 1978. / A loading capacity of paddy which provides ideal storage conditions but which can be safely and economically exceeded for short periods. 2/ Previously known as Thana Central Cooperative Associations (TCCA). 6 3.2 Delays in PP approval resulted from maJor differences in the project as agreed at negotiations, particularly in regard to insufficient vehicles for pest control squads and procurement staff, omission of the engineer and operators for the paddy dryers, omission of the new zonal testing laboratory and insufficient allocation for price escalation. These deficiencies were remedied following Bank's intervention in July 1978. Implementation Schedule 3.3 At appraisal, it was estimated that the construction programme would be completed by December 1981, with a project closing date of 30 June 1982. Final construction took place in December 1984 and the Credit closing date was extended to 31 December 1984. 1/ 3.4 A number of problems arose during implementation that delayed completion. Slowness in the acquisition of sites for storage buildings, shortage of funds under the Annual Development Programme (ADP) and material shortages were major contributory factors. Other problems were inadequate planning and monitoring, project administration and construction supervision, mainly due to frequent changes in responsible staff in PIU, tack of effective coordination between PIU and PECU, lack of authority of PECU over PWD field staff and Insufficient use of the engineering consultant (See also paras 3.9, 4.6, 4.7, 4.10 and 4.11). ProJect Cost 3.5 The total cost of the project at completion was Tk706 M compared to Tk621 N 9/ at appraisal, implying an overall cost increase of 14% (see Table 2). xpressed in dollars which reflect the depreciation of Taka (increase of 70% over 1978/79 to 1984/85), there was a cost underrun of 18%. However, if allowance is made for project components which are not carried out (paddy dryers) or partially carried out (rehabilitation and pest control), the actual project cost would have a higher cost overrun (35%). The godown component 3/ cost Tk 682 M (Tk 414 M in constant 1977 prices) as against Tk 499 M (Tk 413 M base cost including physical contingencies) at appraisal. As a result, the share of godown component in the total project cost rose from 80% at appraisal to 97% at completion. Expressed on a per ton basis, the cost of godowns (excluding rehabilitation) was Tk 4,100 per ton or about 52% above the appraisal estimate. 1/ Loan disbursement continued till September 1985 without officially extending the closing date. Disbursements were, of course, restricted to expenditures incurred up to the official closing date. 3/ Due to difficulties in getting proper cost data from PIU, data up to 1983/84 were taken from audited accounts and the data for 1984/85 from PIU records. PECU has provided detailed cost data. ./ comprising land acquisition cost, construction cost and engineering services. 7 3.6 Price escalation and quantity changes have both contributed to the cost overruns. Indicative of price rise was the almost doubling of the consumer price index over the project impleeratation period. Quantity changes were due to (a) changes in foundation design in some sites where poor soil conditions existed, (b) provision of additional facilities like drying yards, (c) higher than expected site filling, and (d) remoteness of many sites involving increased cost particularly carriage of materials. The provision of 5% for physical contingencies at appraisal proved therefore inadequate. Project Changes after ApDraisal 3.7 As a result of implementation delays, changed needs in several components and of tne need to keep total project cost in line with appraisal cost estimates, the project was amended on several occasions during implementation. The main changes were reductions in rehabilitation capacity from 25.000 tons to 10,000 tons, deletion of paddy dryers, inclusion of paddy drying yards, and modification of relief storage to cater forprocurementoutside the main projectarea. In addition, provision of equipnenttand vehicles had been curtailedmainly to avoid duplication with those provided under other projects. 3.8 The project storage facilities now account for 32% of the 'core' project area LSD capacity, 15% of the total LSO capacity, and 10% of the national storage capacity (Table 3). Total public sector storage capacity in 1978 was 1,135 M tons, compared to 1,774 M tons in 1985. Since the project added only 165,000 tons, about 474,000 tons (of which 81,000 tons in the project core area) was constructed during the project period under other programmes. I Godown Construction 3.9 Godown construction was scheduled in three phases extending over four years; 56,000 tons in Phase I, 53,000 tons in Phase II and the remaining 36,000 tons in Phase III in the seven northern producing districts. Oespite delays, appraisal targets of 145,000 tons have been achieved and all the godowns are now operational as shown below. 1j78.91 1979130 1960/31 1981/32 19T2/83 1983164 19U4/85 Total lb. of wits aplftd - - 34 10 74 19 3 290 StMnal capcity created - - 17.000 0.m 37.000 9.50 1.50 145.000 (tos) lb. of umits operational - - 34 194 2M 29 290 _rational mammal - - 17.000 97.000 134.000 l4.500 145.000 145.000 c4city (tons) As can be seen above, the godowns were brought into operation im_ediately on completion. Construction delays were caused by the length of time taken for acquistion of land (8-10 months), for preparation of construction estimates (3-4 months), and administrative approval (2 months). Material shortages and inadequate provision of ADP funds have also caused delays. Some of the difficulties with material shortages and land acquisition could have been avoided. When allocating coal for brick burning, PWD appeared to have given preference to other godown programmes, and construction sites earmarked for the project had le some cases been diverted to other storage projects. 81 3.10 Arrangements for the award of tenders and for construction were generally regarded as satisfactory. The simple and sturdy 'Dacca' design is well tried and tested under local conditions and only minor improvements have been suggested, at appraisal. The concrete outside the store were added later to facilitate handling and conditioning operations and to provide a suitable base for emergency storage. 3.11 Of the 330 units 1/ constructed, four have been found to be defective, obviously due to lack of adequate supervision. Three of these have now been rectified while the fourth is still under dispute as to quality of construction. However, It has been handed over to MOF and it has become operational. Minor defects are still being reported by the District Food Controllers and these have been taken up with PWD for remedial action. Construction of boundary walls at nine sites as well as drying yards at three sites were not completed due to land disputes. Relief Storage 3.12 After an initial delay of r.early 18 months, the construction of relief storage godowns was finally completed in 1984. These godowns are now operational as shown below. Relief Storage 1978/79 1979/80 1980/81 1961/82 1902/U3 1983/84 Total lo. of units copleted - - 6 25 2 7 40 Uiinal caacity - - 3.000 12.500 1.000 3.500 20.000 (tons) I No. of units operational - - 6 31 33 40 40 Oerational nominal - - 3.000 15.500 16.500 20.000 20,000 capacity (tons) As previously noted, the above godowns were also brought into operation immediately after completion. 3.13 The main cause of delay was GOB's slowness in selecting sites. Meanwhile wheat procurement in Jessore, Kushtia and Comilla districts had picked up very rapidly requiring additiondl storage capacity. About the same time, the Food Security Assistance Scheme of FAO was under consideration. The Bank therefore agreed that the relief storage located outside the main project areas be used for procurement. Accordingly the capacity of 20,000 tons under this category was built in the following districts predominantly for wheat procurement - Jessore, Kushtia, Faridpur, Khulna, Noakhali, Tangail, Pabna and Ohaka (see Table 3). 1/ Including relief storage of 40 units. Rehabilitation 3.14 As in the case of relief storage, the start of the rehabilitation programme was delayed by about 18 months. The delay was caused by disagreement between PIU and MOF as to the choice of sites for rehabilitated storage and replacement. Some of the stores considered for rehabilitation under the project such as Twin Nissen huts and Assam sheds had already been replaced and rehabilitation of some other facilities did not appear cost effective. Moreover, the government could not find enough stores within the project area for rehabilitation. The programme was therefore reduced from 25,000 tons to 10,000 tons. It was completed in 1983/84. Mechanical Drying Facilities 3.15 Initial delays arose from difficulties of recruiting a consultant. The first engaged consultant left after six months. His replacement did not take up duties until September 1980, but had a slow start, because initially he had no counterpart. When he finally had selected equipment for a reduced pilot project of five sites 1/ orders were not placed because DOF found that results with similar driers installed under a DANIDA project were not encouraging. Farmers and traders apparently were not interested in bringing their grain to a drier because of unfamiliarity with the system of price deductions to be applied for moisture loss, even though fuel and labour costs had not been charged. Under the circumstances MOF decided not to use the funds allocated for the pilot driers and to drop the component altogether. The deletion of this component has been partially offset by inclusion at a later stage of drying yards at some 171 godown sites. Weighing and Testing Equipment 3.16 As shown in Table 4, most of the equipment required by the new Temporary Procurement Centres and godowns was procured rather belatedly, conforming to the revised PP. The items purchased were 15 units of sieves, 250 units of moisture meters. Weighing scales and the 3 launches were not purchased as envisaged at appraisal due to their omission in the PP. Vehicles (one car and 40 motorcycles) were purchased on time. Grain Quality Control and Inspection 3.17 The project provided for vehicles and other equipment to be given to 25 pest control squads, the establishment of a foodgrain testing laboratory, training programme for operators, spraymen, godown managers and inspectors. In addition the project Included two man years of quality control expertise, three equipped training vans and budget for training courses. 1/ In mutual consultation between IDA and MOF the initial number of 15 drier sites was reduced to five. On the basis of a pilot project the initial number proposed at appraisal was much too large. 10 3.18 Implementation of this component faced numerous problems. Some 15 posts were not filled in a total sanctioned strength of 62 pest control operators. They were not provided with vehicles as anticipated. In fact, 10 land Rovers which were donated under the British assisted - godown rehabilitation scheme, were impounded under a martial law direction after only three months of operation. After repeated requests by the Bank supervision missions, 5 jeeps have been purchased in 1984/85. The Foodgrain testing laboratory at Naogaon in Rajshahi district has been completed in 1984/85. The food technologist has yet to be appointed. 3.19 As regards training, the first PP omitted any reference to either mobile training units, training aids, or a local budget. After-a series of discussions spanning a period of two years, a revised PP was approved by MOF in February 1982 with mobile training unit, training aids and local budget for training all deleted. In view of the abuve, the pest control consultant virtually filled the role of grain storage/pest control adviser encompassing the whole field of technical operations of the DOF. He has reviewed its operations and made proposals including the reorganization of the Directorate of Inspection, Control and Training. His proposals were not fully implemented and a need exists for promoting an effective pest control system, substantially improving the key areas of staffing, vehicles and training. It is worth noting that after expiry of his contract with IDA, the consultant has continued to assist HOF in pest control training activities until July 1985 with financing through the Food Security Project executed by FAO (see para 4.14). 3.20 Equipment supplied under the FAO projects together with those procured under IDA and FRG projects has provided the operational directorates with an adequate and appropriate range of equipment for procurement, storage and protection of foodgrains. Cooperative Marketinc 3.21 The original PP provided financing for only one UCCA (Muktagacha) under the pilot scheme. The pilot project was launched In 1978 through the Muktagacha UCCA in Mymensingh district. Local management was undertaken by the staff of the Bangladesh Rural Development Board (BROB) and support from the staff of the World Bank in Dhaka. The revised PP has increased UCCA participation to 10, the number envisaged at appraisal. Only four have so far participated in the programme. Moisture meters, weighing scales, motorcycles, training cost and other development expenditure for UCCAs as well as a 50 ton capacity godown at Kotwali UCCA, Dinajpur district, have been funded under the project. Despite problems in getting paddy marketing loans, the UCCAs have managed to run their limited programmes satisfactorily using their own funds (members share and savings). 3.22 The scheme has proved financially beneficial to the farmers and all the four UCCAs have made profits (Table 5). It must be noted that in arriving at these profits, indirect costs of BRDB and other government inputs have not been taken into account. 3.23 In recognition of the success of this programme, BROB has decided to replicate it in other districts including IDA-financed Rural Development tI Project areas. ProJect financing 3.24 IDA was expected to finance about 75% of the total project cost (net of 18.5% duties and taxes) with the remaining portion contributed by GOB. USAID participated in the local cost financing of the project to the value of Tkl3.3 M (USS528,000) out of PL480 proceeds. 3.25 Throughout the project implementation period, disLirsements consistently lagged behind the volume forecast at appraisal (see Basic Data Sheet). The total expenditure up to 30.6.1984 was Tk497 1, of which Tk373 M was due for reimbursement but reimbursement was claimed for only Tk276 M leaving a backlog of Tk97 M. The backlog of Tk97 M comprised Tk56 M against civil works and Tk41 M against security deposit as shown below. Disbursement Performance Up to 30.6.1984 Actual Amount eliaible Amount expenditure for reimbursement claimed . .. .. .. .. .(Tk- M) . . . . . . . . . . . Civil works 491.1 368.4 271.5 Vehicles & equipment 1.2 0.7 0.7 Technical assistance 2.8 2.8 2.8 Operating Cost of PIU 1.8 1.4 1.4 Total 496.9 373.3 276.4 ==man 5s3..3 s 3.26 Pro,ress of claiming reimbursement against security deposit by PECU was very poor. In certain cases, claims were submitted two or three years after the actual refund of the mount to the contractors. Main reasons for the delay in preparing claims against civil works were as follows: a) In some cases, contractors have preferred appeal against the departmental decision in finalising the works contract. In a few cases, the contractors have sought arbitration or legal action thereby delaying final disposal of cases. b) For works which continued up to 30 June 1985, bill vouchers could not be submitted as these have to be processed and collected from PWO field offices. In some other cases, the final bills could not be prepared due to non-cooperation or non-availability of contractors in measurement of works and finalising bills. c) Procurement delays to replace materials used from PWD's own stock (see para 4.8). 3.27 In addition, substantial delays occurred in the submission of withdrawal applications for local expenditure by executing agencies particularly PECU. They have little Incentive to seek reimbursement in foreign exchange (which goes to Bangladesh Bank) once they have made expenditure from their own budgets. In addition, over-centralised bureaucratic procedures have also contributed to the delays. 12 Credit Allocation 3.28 Upon GOB's request, IDA agreed (under the Special Action Programme) to raise the disbursement rate for civil works from 65% to 90% (for claims submitted from November 1, 1982 onwards) in order to (1) better utilize the Credit, which had substantial savings, mainly due to Taka depreciation 1/ ; and (ii) to maintain IDA's share at about 75% of total project costs, net of duties and taxes (estimated in SAR at 18.5% of total costs). The Increased rite for civil works about halfway through the project compensated for reduced or deleted components with a 100% disbursement rate (see table below and para 3.5). Disbursement Credit Allocation a/ Rate Planned Actual Achievement T ' (US'00) . . Construction materials and 65/90 17,000 19,240 civil works Equipment & vehicles 100/60 3,000 458 a/ Technical assistance & training 100 1,375 587 Operating costs of PIU 80 125 73 Unallocated 3,500 _ Total Allocation 25,000 20,358 Cancelled/unused - 4,642 Credit amount 25,000 25,000 a Includes US$41,000 for testing laboratory. 1/ The October 1983 supervision mission estimated that if disbursements rates remained unchanged credit savings would amount to US$6.5 M This compares to the USS4.6 N that has been cancelled upon closing of the credit accounts. IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT Implementing Agencies 4.1 The Director General of Food (DGF) was the manager of the Project, supported by a Project Implementation Unit (PIU). He reported directly to the Secretary of Food who was assisted in project implementation by a Project Steering Committee (PSC), consisting of representatives of other interested ministries and agencies. The Public Works Department (PWO) under the Ministry of Public Works was made responsible for the engineering design and construction of godowns, for which a special unit called Project Engineering and Construction Unit (PECU) headed by an Additional Chief Engineer was set up within PWD to operate in close association with the PIU. BRDB was given responsibility for the execution of the UCCA pilot scheme. In addition, to improve the overall performance of the MOF, the project provided for strengthening the Ministry's Planning Cell, for establishing a monitoring cell, for technical assistance, and for improvements in DOF organization, ooerating systems and procedures. 4.2 The institutional impact of the project was satisfactory but variable among the executing agencies. 4.3 In assessing the impact of the project on the overall performance of the DOF, it is worth noting that the Directorate during the project period had undergone changes in its organization, operating systems and procedures. These changes were in part due to various initiatives taken at different times by IDA as well as other institutions. 4.4 The performance of the individual agencies is discussed in the following paragraphs. Project Steering Committee 4.5 A Project Steering Comittee was formed under the Secretary of Food to review progress of project implementation in conjunction with other ministries and institutions involved in project execution. Until April 1980, regular meetings were held to discuss the quarterly progress reports prepared by the Project Implementation Unit and the annual reports prepared by the Planning Cell. Due to Increasing responsibilities of the committee members in their day-to-day work, the Project Steering Comittee has not met since April 1980. However the committee members headed by the Secretary, Ministry of Food met in every quarter to discuss project issues raised in the QRR (and lately introduced CROPS) prepared by RMB. Project Implementation Unit 4.6 The Project Implementation Unit has not been as effective as anticipated at appraisal. This is attributed to a lack of staff experienced in implementing such projects, high staff turnover (five different officers served as Deputy Director during the project period), and a lack of engineering capability to deal at an equal level with PECU/PWD. Lack of delegation of financial powers to the Director General was also a reason for slow project implementation. 14 Project Enaineerino and Construction Unit 4.7 Although all new godowns and most of the ancillary works have been successfully completed, eventually it was generally felt that over the project period coordination and works supervision by PECU have not always been satisfactory, which has been partly the reason for the delays. Some of the pre-construction delays, like preparation of cost estimates, site surveying and tendering were due to slow actions of PWO field staff over which PECU clearly had not sufficient authority. Although on paper adequate engineering and accounting staff were assigned to PECU, construction supervision by PECU has hardly been of any significance. Preparation of accounti and disbursement claims have been unduly delayed because of inaction by PECU and PWD field staff. Also, PECU/PWD has not. been very imaginat've in impro-ing or overhauling the very traditional godown design, In order to reduce construction costs and improve functionality. 4.8 Procurement. Procurement requirements under the project required that contractors were given the option to bid based on self-procured materials or materials made available to contractors by PWD from its stocks. Project use of such stocks would be replenished by normal commercial Imports, not otherwise financed, using international shopping under procedures acceptable to IDA. 4.9 There were delays in procurement of building materials due to lengthy procedures and lack of quick decision. Procurement of 8,000 tons of Portland Cement was greatly delayed due to belated approval by the Ministry of Works. In another case, the Min;stry sought reimbursement against the procurement of 3,000 tons of cement but failed to establish that these were procured through proper tendering. Also the procurement of jeeps ran into problems. After IDA approval of tender award, the Ministry required that the jeeps be procured from the lone local manufacturer. It took months before the Ministry accepted the bid of the lowest conforming foreign bidder, by which time the validity of the bids had expired and the bidder refused to supply. A reduced number of vehicles was then procured from the local manufacturer whose bid was still valid. 4.10 Performance of ensineerina consultant. The appraisal mission had originall1yplaced the engineering advisor in the Food Ministry to deal with PWD on technical matters. However, the engineering consultant who was to monitor progress and to assist and advise both PIU and PECU was engaged by and reporting to PECU. This arrangement has proved not to be appropriate. According to his terms of reference the consultant was to assist PECU in review of specifications, contract documents and bid evaluations, recommend standards of supervision and train personnel In supervision methods. In practice, however, design estimates and tender documents were all prepared by PWD without reauesting or accepting any input from the consultant. The actual arrangement has been that the consultant was undertaking only supervision for which PECU had neither the staff nor vehicles. In making inspection visits at construction sites supervised by PWO field staff the engineering consultant has done a good Job in helping to maintain minimum standards of quality. However, the rapport between the engineering consultant and PWO has not been very good and the services of the consultant have not been optimally utilized by PECU/PWD. 4.11 The expatriate consultant and later only the resident engineer of the firm travelled frequently to the sites to report on the status of works and certify completed works. Generally their work has been useful. Due to delays in construction completion, the fim's contract was extended twice, expiring finally on 30 June 1984. This resulted in many 1.0 completion certificates for works finished after 30 June 1984, not having their counter signature. Another consequence was the non-submission of the terminal report by the consultants. Their final bills had however been paid by PECU. 4.12 Performance of contractors. The performance of local contractors was generally satisfactory. In a few cases of unsatisfactory work, as found by the engineering consultant action was taken by PW0 by demolishing and redoing the defective work. The reasons for poor performance in some of the cases can be attributed to low bidding and slender financial resources of some of the contractors. To overcome their liquidity problems, PWO has provided in many cases construction materials on credit and rented construction machinery. 4.13 Maintenance. Repair and regular maintenance of godowns, equipment and vehicles owned by the DOF are genewally poor. A number of godowns have cracks in the floors and adjoining walls. Due to shortage of funds, no repair and maintenance of the godowns and staff quarters had been done since completion of the construction work. Other reasons for maintenance problems are unclear responsibilities for carrying out repair and maintenance work, time-consuming administrative procedures for even minor repairs, and a lack of engineering expertise in the Directorate of Food. At present, MOF requests the PWD on a job-by-job basis to carry out almost all godown repairs, which is an unsatisfactory situation. Either PWD should take the godowns in repairs or DOF should have funds and some engineering staff available to do minor repairs on their own. Pest Control Training 4.14 Pest control training was proposed under the project to be provided by a consultant. Accordingly, an expert, who had previously worked with the British-assisted godown rehabilitation project was recruited and took up his post in October 1980. As the Warehouse Training Centre, under the auspices of which he was intended to function, had ceased to exist, he was placed directly in the Directorate of Inspection, Control and Training (DICT), reporting to DGF. He was required to provide intensive training in the field for all MOF personnel in the 7 core districts starting with pest control operators, spraymen and godown managers in addition to participants from UCCAs and the private sector. As stated in para 3.19 the training effort did not materialise to the extent expected because the key elements of staffing, equipment and mobility remained unresolved due to emission in the PP despite efforts by successive IDA supervision missions to; redress the situation. Furthermore, the consultant was not given a counterpart until the expiry of his contract. He was then recruited by FAO to perform similar functions sucessfully under two Food Security Projects for a total period of 17 months. These projects provided for supply of vehicles and equipment and conducted a series of training courses. As a result , the entire national complement of quality control inspectors (previously designated technical Inspectors and pest control operators) appointed or promoted under the reorganization plan was given a two-week training course in all aspects of pest and quality control. In addition, a series of regional training courses for quality control inspectors were also given, making up for a limited effort under the IDA project. These efforts were also supported by the FRG Food Security Assistance Project. 16 Organizational Improvements 4.15 OOF field administration. Field administration of the DOF was required to be improved in order to establish an effective food management system. As a first step, the posts of the District and Sub-divisional Controllers of Food were upgraded in 1979 as recommended by IDA. Later in January 1984, DGF was reorganized following the report of the Martial Law Committee. Most of the changes were in line with IDA proposals. 4.16 Under the new set-up (see Chart 1), the Director General is assisted by an Additional Director General as Chief of Operations. The Directorate General now consists of six directorates - (a) Administration, (b) Movement, Storage and Silos, (c) Procurement (d) Inspection, Development and Technical Services (e) Supply, Oistribution and Marketing and (f) Accounts and Finance. The role and duties of the Director General as well as those of the Directors have been clearly defined. 4.17 New staff cadres and career avenues were introduced in several cases transferring serving staff across traditionally exclusive working discipline boundaries. These changes were more marked and fundamental in the DICT (now DIOTS) which lost its operat!rna' role in the fields of pest and quality control. For the first time, the oesciplines of storage engineering and processing technology have been Introciued into the OGF. the Director, Additional Director and one Deputy Oire totr of 0OTS are all engineers. Pest and quality control has been made the responsibility of the line managers - godown managers and technical inspectors respectively - under the District Controllers of Food. 4.18 Foodgrain procurement. Procurement operations have been streamlined. The focus of the operations has been shifted from ensuring a target level of public stocks to ensuring an adequate 'floor' price to producers. In line with this development, procurement prices have been adjusted regularly with announcement in advance of crop planting. To illustrate, increased procurement prices for the aman crops were announced on 30 June 1984. The new prices represented a 15% increase for paddy and 10% increase for milled rice, levels considered to offer farmers a significant price incentive to produce. However, achievements in the actual procurement of foodgrains are a function of various factors, of which the procurement prices set by Government is one. Consequently, actual procurement was only 266,000 tons in 1983/84 (see Table 7) As shown in Chart 2, this was not because procurement price was inadequate but rather because the commercial prices were consistently above the procurement price. 4.19 Access to procurement centres. The restrict.ve system of Authorised Grain Oealers (AGO) has been abandoned. In addition, farmers' and traders' access to MOF procurement centres has been improved, in some areas with the result that competiton for farmers' grain has Increased somewhat and farmgate prices have probably been higher than they would have been otherwise. Furthermore, the number of purchasing centres has been greatly increased in the last four years and improved handling, quality standard and payment procedures have been put into effect. 4.20 Constraints. NOF's procurement efforts could, however, not always prevent market prices from falling below the support price levels. Farmers, therefore, still lack full confidence in GOB's price support policy. Indicative of this was the decline in low-lift pumps used by farmers for irrigating the 1981/82 boro crop. The decline was attributed to, among various factors, the low prices received by many farmers for the preceeding aman crop. 4.21 Foodgrain distribution. The increasing effectiveness of MOF's foodgrain distribution operations was demonstrated in the crisis period of May to December 1984 (during which three floods occurred), by the absence of famine conditions which were evident after the 1974 floods. The noteworthy factors contributing to MOF's success were (a) significant additions to public storage capacity in LSDs over the past few years, (b) local transport improvements through road, bridges and ferry construction programmes, (c) improvements in management, information, organization and logistical capacity of the MOF, (d) effective coordination of food operations between different ministries and line agencies and (e) better targeting of relief operations. The project's contributior to LSD construction and, to a certain extent, to improvements in organization and management has been significant. Planning, Monitoring and Evaluation 4.22 The Planning Cell in the MOF has been strengthened by the appointment of a research officer and an economist as required at appraisal. The planning cell has taken on broad responsibilities for planning and monitoring the work of the MOF and for implementing its development activities in general. The start-up of the monitoring cell was delayed due to problems in staffing and non-availability of office accommodation. It was eventually set up within the office of the OGF to streamline the compilation, processing and analysis of operational information. Under the reorganization, the cell has been strengthened, and is headed by an Additional Director who is assisted by a Deputy and one Assistant Director. Under FRG assistance, the Directorate has procured and installed 13 teleprinters at district level. In addition, FAO provides technical assistance to help develop the Directorate's management information system. 4.23 During the project period, the monitoring cell has been largely ineffective. This in part was due to lack of an appropriate monitoring system. Reports submitted by the consultant appointed to assist in this regard have not been acted upon. Other reasons for the ineffectiveness of the monitoring cell have been frequent personnel changes, inadequately trained and experienced staff and lack of motivation. 4.24 Project monitoring efforts have not been addressed by the PSC which has not met since April 1980. A consultant firm was appointed to develop a continuous farmgate price monitoring system. The consultants' report has not been finalised by the GOB yet. Since farmgate pricing monitoring is handled by the Marketing Directorate of the Ministry of Agriculture, placing of the responsibility with MOF did not seem appropriate. Moreover, a need existed for the assessment of storage losses which remained the responsibility of the MOF but no study was proposed. Meanwhile, a grain loss assessment study started by the pest control consultant under the Food Security Project was not proceeded with when the consultant left the country on expiry of his contract. Accounting and Reporting 4.25 The usual government system of accounts was followed by both PIU and PECU. This meant that separate accounts were not maintained for project activities. To satisfy credit conditions relevant records of expenditures were kept to allow identification of project spending. On this basis project accounts up to 1983/84 have been audited by the Office of the Director General Comercial Audit. Several discrepancies were noted during audit. These included - moisture meters imported for the project but is distributed outside the project area, excessive issue of materials to contractors, materials issued but contract neither executed nor materials returned, distribution of motorocycles outside the project area, delayed execution of works allowed without penalty, payment at rates higher than scheduled rates, paddy drying yards smaller than approved size, award of sub-contract in violation of tender agreement and over-payments against defective and incomplete works. 4.26 Quarterly progress reports were submitted by PIU until March 1982 and ceased thereafter due to changes in key staff and lack of initiative. Compliance With Covenants 4.27 Appendix 2 sets out the status of covenants with brief explanatory notes. It is seen that compliance has been in general, satisfactory except for submission of quarterly reprts and audit reports. Quarterly reports have not been submitted to IDA since March 1982 while audit of 1984/85 accounts of PECU and PIU are due since December 31, 1985. V. PROJECT IMPACT Utilization of Godcwns 5.1 It would appear that the need for suitable storage facilities particularly in the major procurement regions was pressing in the early years of the project. This conclusion is supported by the fact that many of the godowns constructed under the project had become operational immediately after completion and were used to capacity, (see paras 3.9 and 3.12 and Table 8) some exceeding the full rated capacity, and a utilization rate of 124% was achieved by resorting to higher stacking. During the FY 1981 aman, ' boro and wheat and FY 1982 aus procurement season, support prices could not be maintained because the public foodgrain storage was so overloaded that procurement could not be expanded sufficiently. The later years witnessed a rapid expansion in grain storage capacity in the seven project districts (see Tables 9 and 10). By June 1984, total nominal storage capacity in these districts rose to some 580,000 tons of which project godowns accounted for 25% (145,000 tons). At appraisal, domestic procurement of foodgrains in 1985/86 was proJected at 725,000 tons if it was a normal year or 1,240,000 tons if it was a good year. Domestic procurement has, however, not expanded as forecast at appraisal. Only in 1980/81 a volume of over 1 M tons was procured, in the remaining years since appraisal, procurement was between 200,000 tons to 350,000 tons (Table 1). As expected, the bulL of the procurement came from these seven 'core' districts rising from 65% of total procurement in 1977/78 to 87% in 1983/84, justifying, the appropriate choice of the project area (see Table 7). As a result, annual utilization rate fell rapidly from 124% in 1980/81 to 57% in 1984/85. jj This situation is j/ Based on a sample analysis of 10 project godowns. This conclusion must be treated with caution because some of the reported data may be inaccurate as PIU was not able to supply inflow-outflow data to the PCR mission. corroborated further by the fact that GOB's target stock level of 1.2 M tons of grains (comprising minimum operational stock of about 500,000 to 550,000 tons plus emergency stock of at least 700,000 to 750,000 tons) represent some 67% of nominal storage capacity (1.8 N tons) or 46% of effective capacity through 50% (2.7 M tons) higher stacking. UtiiHzation also fell because GOB since 1981 had started constructing substantial storage capacity (approximately 250,000 tons) under two crash programmes (see Table 9). As mentioned in para 3.8, since appraisal, almost 81,000 tons was newly constructed in the project core area in addition to the project storage. Physical Losses of Stored Grains 5.2 As discussed earlier, pest control operations under the project were limited because the equipment provided along with suplementary items financed by other multilateral and bilateral sources were used to strengthen the national network. The project area did not recieve any special treatment. Moreover, weaknesses in the key areas of staffing (see Table 11), staff training and mobility persisted for the better part of the project period. Under these circumstances, physical losses of stored grains should have been higher if not for the rapid turnover of the stocks due to low procurement and high offtake in most of the years. However, in FY 1981 and early FY 1982, extensive grain spoilage and losses from infestation were reported when substantial quantities of grains had to be stored in sub- standard facilities or out in the open and in the godowns which were generally overstocked (see Table 12). Pest control and stock maintenance operations could not be carried out as required. 5.3 Grain losses are generally recorded in accordance with a system of specified permissible limits for storage and transit losses. These allowances are small, never greater than 1% as set out below. The system does not differentiate between storage facilities of different quality, or between different regions and seasons of storage. Storage Losses Previous permissible Period Revised (1985) current Loss limit permissible loss limit Paddy Rice/Wheat Paddy Rice/Wheat 0.50 Up to 45 days 0.3 0.1 0.75 0.50 Up to 3 months 0.4 0.2 0.75 0.50 Up to 6 months 0.5 0.3 1.00 1/ 0.75 1/ Over 6 months 0.6 0.4 1/ For storage period in excess of one year, additional 0.25% storage loss is permitted for each 3 months beyond one year. 5.4 Absence of hard data on the cause and extent of grain losses has prevented precise estimation of storage losses. The monitoring study on loss assessment started by the pest control consultant under the Food Security Project was not proceeded with when the consultant left the country on expiry of his contract. Thus the lack of hard data required efforts by the mission to collect data through interviews and field assessments based on judgement. Based on these, physical losses of grain are estimated at 2% with project and 6% without the project (appraisal estimates average 4.2% savings). 1/ Field data suggests that the storage period would be about 8 months for rice/wheat and about 4 months for paddy, the annual stock turnover around 1.7, annual average capacity utilization approximately i0% and composition of stored grain 50% of rice and 25% each of paddy and wneat. Based on these data, it is estimated that some 8,000 tons 2/ of foodgrains would be saved annually, compared to 11,000 tons 3/ assumed at appraisal. Beneficiaries 5.5 Benefits accrue primarily to the GOB in the form of reduced grain storage losses, which, in turn, correspondingly reduces dependence on imported grains, resulting in lower foreign exchange expenditure and reduced deficits in subsidized foodgrain distribution. The project also benefits farmers and consumers. Additional storage in the grain producing areas and increased operational effectiveness enabled MOF to expand domestic procure- ment, increasing competition for the farmers' produce, and hence farmgate prices. This normally benefits especially small farmers who cannot hold grain but have to sell immediately after harvest when farmgate prices are the lowest. 5.6 Experience has shown that the participants of GOB's Food for Work and relief feeding programmes often get the poorest quality wheat available. To the extent that the quality of wheat could be better maintained, these groups will benefit from higher quality foodgrain and better nutritional standards. Benefits also accrued to UCCAs/KSSs and their members. Impact on Private and Cooperative Sector 5.7 Though the project did not directly affect the private sector storage, and the aspect was not assessed at appraisal, a covenant was included in the DCA for GOB to study the private sector storage and marketing system with a view to identify investment needs. 4/ Some of the 1/ Excludes losses avoided by rehabilitation component. 2/ Losses avoided derived as follows - 165,000 tons x 0.7 capacity utilization x 1.7 turns x 0.04 savings = 7,854 tons, rounded to 8,000 tons. An alter- native estimate made by Bank staff based on different assumptions regarding turnover and storage loss savings arrives at a similar result: 0.75 wheat or rice x 165,000 x 0.7 x 1.25 x 0.06 = 6,475 tons 0.25 paddy x 165,000 x 0.7 x 1.25 x 0.03 = 1,442 tons 7,939 tons 3/ Includes losses avoided by rehabilitation. Appraisal estimates include an additional 7,000 tons in MOF storage saved through pest control in the project area and 1,000 tons saved through paddy drying. 4/ The study was deleted from this project and then considered under 872-BD, but may be undertaken under a future TA project. improvements promoted by the project - suspension of anti-hoarding laws, abolition of the AGD system - had stimulated private sector interest in grain storage. Also some other incentive measures have been taken by the government. However, the private sector still lacks confidence to play a larger role in grain storage, due to lack of a clear policy committment from GOB to allow trade to play an Increasingly important role in grain marketing for the years to come. More incentives are needed to stimulate private investment in grain marketing facilities, at import wholesale as well as at retail level. During the implementation of the pilot paddy marketing programme of the project, storage need in the cooperative sector was identified; provisions for grain storage were introduced for cooperative societies in two rural development projects now- being implemented through IDA and IFAD assistance. Economic Re-Evaluation 5.8 Benefits. At appraisal, the estimated rate of return (ERR) for the entire project was 21% (14% for the godown, over 50% for the pest control programme and 24% for the paddy drying scheme). The main quantifiable benefit was to accrue from savings in storage losses, since the spoilage of grain in the project godowns was estimated to be much less than what it would be without the project. As discussed in para 5.4, in the analysis prepared for this report, much lower savings have been calculated. An additional benefit considered in this report but not at appraisal was identified in the course of appraising the Third Foodgrain Storage Project; it consists of savings in operational costs associated with good quality storage such as instituted under the project (see Table 13). Benefits from technical assistance and reorganization of the DOF have not been quantified. Benefits from paddy drying and pest constrol have also been excluded from analysis for reasons stated in paras. 3.15 and 5.2. Other less direct benefits which however are beyond the scope of quantitative appraisal include: contributions through buffer-stocking to price moderation, the resource benefits due to improved godown location, contribution to credible support price purchasing, stimulus to greater production, and improved food security. Economic Rate of Return (ERR) 5.9 For ERR computation, the project was equated to its major component - godown constructior., and all costs incurred by the project were charged to it. A modified economic analysis was carried out for the rehabilitation component. 5.10 Godown comDonent. Economic costs and benefit values have been computed at estimated wrder prices (see Table 14). Prices of internationally traded goods have been converted at an exchange rate of USS1 * Tk26.50. 1990 border prices in 1985 constant terms for paddy, rice and wheat, derived from IBRO commodity price forecasts have been used in the analysis 1/ (see Table 15). No distinction has been made in the prices used for valuing reduced grain losses prior to 1985 as it is insignificant in the 1/ The analysis has been carried out in 1985 prices, with past expenditures restated in 1985 price terms by using the consumer price index. context of the overall project. For calculating the economic values of non- traded goods, the standard conversion factor (SCF) of 0.8 has been applied. The shadow wage rate for unskilled labour has been estimated at 75% of the financial wage rate. All costs and benefits are expressed in constant 1985 Takas. Based on these assumptions and others detailed in para 5.4 the new estimated economic rate of return (ERR) for the entire project is about 8% (see Table 16). The reduction in the ERR for the project from the one estimated at appraisal is mainly due to (a) lower calculated storage loss savings, (b) exclusion of net benefits from rehabilitation, pest control and paddy drying components, (c) lower rice price forecast (US$ 346 fob Bangkok in 1990 compared to US$ 535 at appraisal, both in 1985 prices), and (d) slow implementation resulting in a delay of benefits (two years lag). 5.11 Rehabilitation component. ERR on the rehabilitation component has not been separately estimated due to lack of reliable data and the small volume.of storage capacity involved (10,000 tons). Instead a modified economic analysis was carried out to test its cost effectiveness. 5.12 Allowing for an average capacity utilization rate of 70% and considering a throughput of 1.7 per year, the rehabilitation cost of Tk7.08 N 1/ covering 10,000 tons nominal capacity becomes of the order of Tk595 per ton in terms of quantity stored. When this cost per ton is spread over 15 years using a discount rate of 12%, rehabilitation cost per ton per annum comes to about 4% of the value of produce stored, 2/ Justifying investment in rehabilitation of existing facilities. If rehabilitated godowns are assumed to have reduced storage losses by the same amount as the new godowns, savings would be approximately 475 tons. Adding the benefits from this component would improve overall ERR by almost 0.5%. VI. IDA PERFORMANCE Overall Performance 6.1 Bank assistance to the project allowed accelerated implementation of an expanded foodgrain storage programme by the goverment to enable official purchases of paddy and wheat in the growing areas. Along with the rapid development of minor irrigation, increased use of fertilizers, supplies of improved seeds and more effective supporting services for farmers, it was evidently necessary to give farmers the Incentive of reliable returns for their crops especially in the period Immediately after harvest when market prices were habitually depressed by the pressure of supplies. The central activity of the project thus became the construction of godowns for procurement in foodgrain surplus areas. An expanded storage programme naturally required an effective quality and pest control system to reduce physical losses of foodgrains, and an effective procurement system to provide buying service for all who wished to sell their grain at the procurement centres. The project formulation within this context, to which 1/ Expressed in economic terms - the financial costs Tk2.76 N of 1981/82 and Tk4M09 N of 1982/83 updated to 1985 price and converted to economic values. V Weighted price of Tk6,895 comprising paddy, rice and wheat. the Bank much contributed, is therefore considered appropriate and justified. 6.2 The project has, however, encountered several problems during Implementation. In hindsight, it seems that some of the problems such as modification of relief storage and reduction in rehabilitation capacity and land acquisition problems could have been taken into account more accurately. The relief storage component was neither considered at preparation nor during pre-appraisal of the project. It was included during appraisal after setting certain criteria for selection of sites. In view of FAO's Food Security Assistance Scheme, and in the absence of proposals by the government for relief sites, the Bank, in its first supervision mission in July 1978 itself indicated to the government that the provision of relief storage capacity could be used to construct godowns for procurement purposes outside the 'core' districts. The rehabilitation programme could lot be implemented fully as appraised as there were not enough godowns to meet the target of 25,000 tons within the project area. Supervision 6.3 IDA supervisory performance wa; adequate despite the numerous problems the project encountered. The project implementation was monitored closely by the Bank, drawing attention to potential difficulties and eliciting appropriate action from government agencies such as the MOf, Planning Commission and PWO. IDA fielded nine missions in the 6 1/2 year implementation period, 5 by staff in Washington and 4 by staff in RMB. Supervision missions made also recommendations on the organization of OOFs operations, notably to shift responsibility for quality control from DICT to operational managers. Reduction of the pilot drier programme was proposed by an IDA mission. IDA responded quickly to GOB requests for amendments of the Credit Agreement and has been flexible in increasing the disbursement rate, extending the closing date and keeping Credit accounts open, even more than six months. RMB staff has been instrumental in organizing coordination meetings between agencies involved, thus filling up the gap caused by the non-functioning of the Project Steering Committee. IDA responded quickly to GOB requests for amendments of the Credit Agreement. VII. CONCLUSIONS AND LESSONS LEARNED 7.1 The project has made a valuable contribution to the development of the country's post harvest sub-sector. Despite the initial delays and the modifications in scope, the project has achieved its basic objective of providing needed grain storage facilities. These facilities have helped MOF to reduce physical losses of foodgrain and to expand its grain procurement operations, thereby supporting GOB farm price support towards increased production. The operation of the procurement system, grain quality control and pest control was only partially improved. Effective working of these operations is now hampered by managerial weaknesses rather than shortages of materials or equipment. The results of the pilot scheme of cooperative marketing enabled BROB to replicate the scheme in other areas. The reorganization of the Food Directorate and other improvements in the working of the MOF has enhanced the effectiveness of GOB's foodgrain operations, as evidenced by the absence of famine conditions during the crisis period of mid to late 1984 compared to the famine conditions which were evident after the 1974 floods. 24 7.2 Major lessons which can be learned from the project are that it is desirable to: a) give close attention to acquisition of sites in the project preparation and appraisal process because land acquisition is a long and difficult exercise in Bangladesh; b) consider that, although the Dacca type godown chosen in the project is sturdy and functional, its costs are high compared to storage constructions in other countries of the Region. For future storage programes alternative designs should also be considered and/or the Dacca type design, which dates back from several decades, should be carefully reviewed aiming at reducing construction costs; c) try out artificial drying of paddy first at a small scale to test its acceptability to farmers and suitability of equipment before setting up a pilot operation at drying sites; d) plan and develop grain storage sites for a complete package of godowns and ancillaries, including concrete yards for receiving, sun drying and conditioning of procured grain; e) provide suitable project management and engineering capability in the Project Implementation Unit within the implementing agency and take care of continuity of staff; f) arrange that an engineering consultant, to assist in monitoring and supervising the construction programme, reports to the project implementing agency; he should not be contracted by and be responsible to the agency that is executing the construction programme; g) identify rehabilitation programmes for existing storage clearly at appraisal; h) obtain a specific commitment from the borrower govermnent in the Credit Agreement to provide annual budgetary provisions for regular maintenance works on project facilities; i) provide the Food Directorate with annual budget for operational managers to undertake minor repairs and maintenance; J) attach to the Project Implementation Unit capable accounting staff to keep project accounts and to prepare and assist other agencies involved in the timely preparation of disbursement claims; k) Include a covenant in the OCA requiring the Borrower during the whole project to consult with IDA on other storage program_es that could affect the utilization of project facilities; and 1) include under a storage project a study to assess and evaluate storage losses in the project storage and in the facilities to be replaced. SECON1D FOOGR7AIN iTo.ict eROJECU (Credit 787-SD).. toodara3. ProDuctipon atn ProtL*3mul Io00O long tons, unless indicated uthrw-wse) t r Matn dnIan Pear. ampt Z2/1I U3/74 74/b 5./L57 76/71 ??? 78 !/79 ZIVia L I iAZ 3LU IMU J04/85 *%l ..utmtic Pruduction ass 2.273 2.802 2.,S9 J.230 3.011 3,103 3.2S3 2.809 J.2is7 J.218 3,018 3.171 2.78t .t.-U Ama.. 5.587 6.699 6.000 7.045 6.906 7,422 7.429 7.303 7.837 t.095 7.483 7,811 7.925 8.150 lin,O 2.070 2.220 2.250 1,286 1.650 2.239 1.929 2.427 2.bo9 J.lU2 3.490 3.268 3.800 3.19rt b@etgtet 90 100 115 212 255 344 486 810 1.o75 952 1.078 1.195 1.300 1.360 it. 5ss Prodluction 10.022 11.830 11.224 12.773 11.22 13,107 13,132 13.349 14,i3 4,367 15.122 IS.465 15,S08 1b.500 Not Production 23 9.019 10.647 10.102 11.496 10.040 11.796 11.,19 12.014 13.264 1.9JI1 13.610 13.919 14.227 14.8Su touvorntment-Procuremnent _7 71 128 415 314 5SU 355 346 1.017 2i8 192 266 344 Jg , cutuoment Ns a s of not production - - 0.7 1.3 3.6 3.0 4.7 3.0 2.9 7.7 2.J 1.4 1.9 2.4 2.1Z l01uitIfn9 Stock 274 297 214 749 823 378 591 209 779 1.229 62S 630 680 I.tU41 l'gucurement (domsttic) - 71 128 415 314 SSU 355 349 1.017 299 192 tbb J'44 3da Itoport4 2-025 I 970 2.292 1-477 78-. 711 l14b 2,739 I, lS9 1..23b _ 10!9 . A,1g12 A..!- A2 totel Sunolw 3,099 2,U36 2b634 2,641 1.917 2.604 2.092 3.296 2.55 2.763 2t.661 2.024 J.b.6: 2.966 t0osses 184 96 148 14b 68 166 87 115 104 62 go 92 lusiae as s s of Supply 5 .9 4.1 5A A .6 3.5 8.4 4.2 3.5 3.6 3.01 3.6 3.1 - : gUUr.&S MOP. WFP. Dhoke and 6angladesh Bureau ot Statistics. ! ProjeCted by MOP. it Gross productian0 elnub iO to# *60d, feed *nd waste. L Lss tthon S08 tuns _ BANGLADESH SEC°"° FOOOCGA?N STOUABv, P.OJE(L (Credit 707-U0) Comperison of Aorsissl tost Estimats And Acut-J _ &" I/ AoorsI soI - &1iimaint...a..Actu ..si PmrcentjMe_ Chnv Exoanditura Cateaory 3njt 9usntj tw Jk_# USS00 ni:rf TkI uISftflD Ou-ntity T5 M basiA &kLISII Land acquisition ha n.m. 3.66 236.0 n.. 10.01 515.7 - 173 119 Civil works I/ tons 165.000 165.000 nil 86 21 ) 459.27 29,624.3 ) 623.9? 23.62?.? tons 25.000 ) 10,000 ) (60) PECU & PWO engineering - - 35.60 2.295. 3 - 48.47 2,304.0 36 may rvices Equpipent & vehicles - _ 96.6s 6,244.4 - 9.50 w06.3 (90) (921 technicol assistance M /M 120 l/ 23.12 1.49Y.6 109 _4 12.63 574.4 (45) I0b1 training Monitoring. managoant - - 2.15 139.7 1.66 60.0 (23) (4,) S evaluation Total Proiect Cost 620.6 40.030.3 70b.44 J2.90.1t 14 (is) 3383 33333333. .. ... -,. ...... . .... 53*33338 ..... I Physical contingencies of Tkl?.? 7 (USt1.14 U) and prica contingencies of TkI12. 1 U (US$7.29 U) directly allucated tca Individual expenditure category. J/ now construction 165.000 tons, reh0ilitation 25.000 tons. ,fl 468 m/ engineering consultant, 24 in. post control coniultant, 46 r/r procurement and paddy drying consult*nt. B! 54 m/m ongineering consultant. 24 ml/ post control consultant. 24 n/r procurement *nd paddy drying consultant 9 and local consultant - */. for paddy drying. N - 27 - abt3 3 BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) District-wise Storage Capacity (LSO) Project Others Total ProJect as Percent District 0... . . O..('000 Ton) ....... of Total Rajshahi 26 49 75 35 DinaJpur 40 61 101 40 Rangpur 35 39 74 47 Jamalpur 5 24 29 17 Bogra 10 35 45 22 ensingh 16 58 74 28 Sylhet 16 47 63 25 Sub-total Project 1 UT Core Area Tangail 1 32 33 3 Pabna 2 37 39 5 Dhaka 2 52 54 4 Noakhali 2 36 38 5 Khulna 1 46 47 2 Kushtia 3 32 35 9 Jessore 5 39 44 11 Faridpur 6 57 63 10 Barisal - 106 106 - Corilla - 52 52 - Chittagong - 169 169 - Total LSD 170 971 1,141 15 CSD - 389 389 Silos - 227 227 Terorary Storage 17 17 Total Fodrain Storaae Capacity 170 1.704 1.774 10 Source: PIU, Food Directorate, NOf. BANGLADESH SECOND FOOOGRAIN STORAft PRO tB1I (Credit 787-SO) Purchase of EguftE q!&LI &sL_VVjj!i Procursement C-ntr-lo )9?0/NJ Is7gI J.UE 1tal Hand tally counter No. 100lU motorcycle 20 20 40 Moisture motot 2S( 250° teepaul IIt 200 200 Pocket calculauts - 70 70 Table calculators to IO Bank locks 1,320 1,32U ft.t f-atrial Vehicle 9 14 "and sprayer so S 1 Precision bulanc- 4 4 Sieves 15 15 Gas peoo shoot 200 200 Lab, type rice mill 4 4 1 Sample divider T 70 Lab. type flour mill -2 2 Air oven I I Broke,, rIlt s*parator A Brain sample pan 350 3bo Grain pruver - 350 350 Measuring tape 25 2 lirst-mid kit 70 25 Sac:k teseLk trolley too 100 Physical balanc- 70 77 Power sprayer so so IO(0 Protective clothing 75 15 Sourc-; PIU. Food Directorate. HOF Jhdka. -4 "IS Table 5 BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) UCCA Paddy Marketing Program Muktagacha UCCA No. of No. of farmers Ant. of Paddy Net Profit KSS Dart. participated Purchased distribuonuTK (md) UCCA Bnus Serv. t Fee 4emb. otal 1978/79 8 55 180 - 4,994 4.994 1979/80 28 138 1,310 460 46,170 46,630 1980/81 14 110 1,192 2,650 40.315 42,965 1981/82 30 104 1,210 6,927 33,589 40,516 1982/83 44 162 2,590 1,827 40,448 42,275 1983/84 Aman 22 219 1,100 - - N/A Kotwali (DinaJpur) UCCA 1981/82 11 14 222 - - 10,446 1982/83 10 56 798 - - 23,200 1983/84 10 60 830 - - N/A Kaliakoir UCCA 1981/82 7 16 145 - - 3,550 1982/83 1S 66 1,150 - - 159390 JamalDur UCCA 1982/83 N/A N/A 62 - - 1,759 Source: BROB SECOND FO DG ANISTRAE PROJECT (Credit .37-OD) Annual .P.aclt Exlpanditurms J/ txp-nditurn- L-t-nrM 1971791 ID79J90 iisof!I 19"11112 1982183f 119131114 1224/11% 11 1z[41 Land acquisition J/ (Tk U) b.54 0.67 1.40 1.40 - lo.Ul (USS$00O) 312.0 31.0 17.1 5S.6 S- 5 t1 Civil works SI (Tk 9) 5.09 56.76 79.26 161.609 173.84 109.21 39.12 623.97 (U0S6000) 323.2 3.734.1 4bU11.5 7.489.1 7,095.5 4.3J3.7 1.433.5 28.921.7 PECU S PWO engineering (lb M) 0.41 4.54 6.34 12.94 13.9t /.11 2.62 46.41 services (USS$000) 26.4 293.7 406.9 509.4 567.1 306.0 9°.9 2.304.0 Equipment S vehicles (|1 9) - 1.70 4.76 1.00 0.11 0.03 1.90 9.50 IUbS6000) - Il.? 270.9 46.2 4.4 1.Z 71.9 %u6.3 Techntcal assistance (Tk U) 0.05 0.40 1.45 4.15 J.JO 2.55 - 12.0S S training (USS$000) S.2 26.5 32.3 224.6 134.5 101.3 - 574.4 Monitoring. management (Tk U) 0.10 0.16 0.32 0.21 0.29 0.49 0.05 I ob e evoluation (USS000) 6-4. 11.. _1..4 9.6 . t.7 _.. ..LL 3.1 ___.2J Iot-l Protact Expandi- (Tk U) 5.63 63.58 90.67 151.Jo 192.85 121.38 42.72 10G.Z4 turA (USS$0001 366.2 4.182.9 S.659 0 S.J99.9 7.371.0 4,316.7 1.612 4 :s2.90R.1 J/ Exchange rate used per USS1 101/199 TWI.51. 1979/10 T115.20. lUdUitI 1`17.56. 19S1102 - 1lkl.b9 1962/33 - Tk24.50. 1953/84 - Tk25.20 guut 1964/65 - Th26.5Ot date for Item 2 and 3 from PECU wh"Iil$0 otIla frum audit reports up to 1903/64 liad date provided by PIU for 1914/15. 1J Inclueo up to 31.12.84. II Annual cost for 1970/79. 10101U 1 nd 1990/i8 not available with PIU, cumulatlve up to 1100/01 s iuwus. 1/ Civil works Include godow, tonlstourttun. rehabilitation. *ncill1e.s and power. drying y5tds TkTI5.9 U). post control laboratory (1T1.97 U). TCCA godown (Tk12S.322). lo SEClONDLQOURhiIN STORAGE PROJECT (Credit 787-80) Domstjc Procurowmnt ( 000 long tons of rice equivalent) I/ District 1974J75 1975176 1976/77 1977/7S 1976/79 1979/7u 1900/S1 1981/82 1982/93 1913:04 Po otact liatricts linejpur 34 79 is 69 66 61 190 87 55 99 langpur 10 42 33 bl 20 37 62 25 2b b7 logra 6 24 20 27 19 33 s0 14 20 40 Nejhabol 14 44 42 6a 55 59 123 42 14 14 Jamatpur I3 4 9 35 a b b 9 S3 25 66 Mymensingh 47 20 IOU 29 to S Sylhet 4 33 - 29 _ A40_ 36 .14JL- U.. _? 7 .J Sub total (Proj. 01st.) a5 275 237 3s5 246 241 672 232 ISO 232 Other DOgtrluts 43 140 71 192 109 3107 406 66 total domestic procurement 128 41b 314 550 35b J4b 1.017 296 19i 260 Pm ject district procurement a a * of total procuroemnt 66 b6 75 65 69 b9 66 76 7S 07 Salrc-s COF l7 At appraisal, domestic procurement of toodgrains In b7/06 was projectud at 4b.1tlOtt tons it it was a normal year or 1.240.000 tuns If it was a good year. I/ J-emlp.r wans a subdivision of MymenstIC9t. ..atill December 1976. 1 ANMLADESL fIRCOND FOODGRAIN STORAGE PROJLTJ (Credit 787-8D) Percaintaas Utilization ot SGlsctad_QtjW. . mWtih 1/ LSD/District 1978/1979 1979/1980 1980/1981 1981/1981 1982/1983 198311954 1984/1985 , ,~~~~~~ Percus.tac Peleshbmri - Rcngpur - - 95 SI 77 too bujaneger - Pabno - - - Ob 100 15 IN Fulpur - Mymensmgh - - - - 10 9 IO R&*toary - Nodkhel- - - - 61 Phulberi - Dinajpur - - 128 91 59 so 36 Sekhipur - langail - - - - - 8 sit Joypuritat - Sogrea - - 7 70 SyIl-st Sylh-t - - - 120 115 Daulatpur - Kushtis - - - - 59 so 44 Singjami - Jamalpur 25 42 14S 2i Y3 136 Total 25 42 124 au bit9 5 SourcS: Data prowided by io1divtdual LSU*. 1/ Purcentige utilization basedO u.i l-Stontm averagje stock to noCiemal capacity. V Figures cannot be reconciled anO heOce nOt includ-d. -4 - 33 - TobLe 9 3ANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) Onaoing and Approved MOF Grain Storage Construction Programe Nominal Storage Capacity Programme Planned C leted To be CouD ited Remarks . . . . . . . (Long tons) . . . . IDA Project 165,000 165,000 ADB Project 62,500 62.500 FRG Project 20,000 20,000 Netherlands Project 12,000 11,500 - I unit of 500 tons deleted. Japan Project 0O,OOO 80,000 CIDA Project 25,000 25,000 EEC Project 48,000 48,000 DANIDA Project 14,000 14,000 GOB Crash One Prog. 234,000 234,000 - GOB Crash Two Prog. 20,000 20,000 Steel Silo 800 - - GOB Salt Godown 80,000 59,520 - 32 units, each Construction Prog. os 640 tons capacity dropped. Total 761,300 738,520 Source: Food Directorate, NOF. Dhaka. .3 m t.. ... At 111.... U Opt. U (341 Ills. U (14nW .... .R O IS... Xim. p nV41 3 &P. 9(51"6 33b. It (V7t 3/lAE MAlIM ... U IM... Total Total btal tad tot losl Tot tfed t fol TSUal boiti tem. NNI F Col. low PO .t. 1iol FE ct. luAe) htut. biftl Irnot. leiutl hDCMt. IM c teem. 11ud PtCb. Iwbe1 teMt. berpa Jtiliti wra 1tlip s stwp 111Usd Stuap Utlisin Utwap 5111. Swap tinI stop 111ti. kwa 1Sallm hep 131i.4 SImag JtilSw Capa dt btS lCAPKi btc Caci" at hta Cadtp othi CqKitp INS CWaCHP e tic Ct WilS It 11hta CaIlt at bht CaWac1 O bth C*Kip t ah ('.113 gm low a) am I'mm. a) {eatti _a. '(,mlt aon e'IUstI m t MnIt N .. V" too ) _0 . (O it) _rn I0Pt Nlam jw 14 is IV 34 IIJ I fit 30 tiI U Ill 4 iII to 113 11 1t a 113 I s I D i h S s 4 9 is a i a i U f lb 7N 0 HI 113 Is 4 1 V1 169 n to I III I 15 in as I III U MI x it 9 II S a 92 31 i at n3 E n 6 I 1 n i s o i I4 N4 U a U s 4 a 13 a U a 1s a 1 a 14 nI 4 , * 313 au n a w 1 as to as U 9 14 6 35 1 135 U I a * s o J 4 lb 41 a 14 a 27 4 27 4 P a 5 U a a a a *d1 6 E 1 4 J 3 3 N S a J a at I g a * a 41 .111 75 n * 4 a a 20 A 1 n 7 1 It 9I a IS 5 i a wadi~ 1 27 a 1 U It U 16 I 13 U a P U 4a 6 to I a a i S a a m u * D a a a u i t m P9 siap in P In U III 41 sit S to 9 IV 1 tIt as IV U t II I l3 4w so M a0 a 64 61 64 is 64 Is a5 a a1 a a U a it a fil a P 3 a a a as a J a a a a s * a a it a *w a 4 1 9 P 41 3 31 3 1 11 5 9 a J 1a a a U X t_ 16 I U U VA 41 u m 17 V4 4 6 4 41 tt 1 104c" a v a is 47 a 0 14 is 14, is " I ill- in 34 114 II I a IV 9 IV W .U 45 IV U IV x IV a1 III 1 1e1i a p P a a i e J a a a * 4 a 4 so a P a Ui e t P n 7 e * I J z u it u a U a I 4 a t 151,dK LO, CS. .iln a "Ova steep. - 6~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- Ima OF; hale Wint. c a. S1RECODFmwI&t_ i.-ft)AGE PRUJECT (CostJit 787-SD) St.attinu ._tmtf Training ot Oilr Nami of Pust No. af It f.t Staff ln QI LL-L&lo lmn&j.InnPstnualItic-tion Technical tnseg-ctuo 54 46 A/.*Sc. OuQality contro rechicCal Chiet Inspoctor 12 6 SAIS.Sc. U l atus tuo ntcn Ope ctor 62 46 U. "-. Pat.t cua..Imo Chief Op-rator 13 12 U .u.. Pest utsltsuI Sogjrcs Food Diroctorait. MOF. Dhlik. 17a SECOND FOODGQA j %rttuAGkL PROJECT (Credit 768-SD) Foodaraon Recom_nded *or _&t 10ni Sale and Destructton Commodity Aucio Destruct on Auction Destruction Auction agtr.uction Auction D°ALtw JujW . . . . . . . . . . . . . . . . (I000 UT) . . . . . . . . . . . . . . . . . . . . . Whhet 723 2 1.092 to 991 lob 927 53 nice 447 9 336 5 175 1 327 12 Paddy se n1-7143 JIM 929 _ Total 1.170 140 3.171 126 2.u7t lob 1.478 t7 mamas ..s -- - *s:aasc=s::g 50uLcS; Food 01r-ctoretw. OFf. Dh0ls. -4 BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-eD) Annual Oerrat i Costs in Economc Terms Overatina Costs New Storaae With ProJect Without ProJect Rent 14,580 31/ 41 Wages: - handling and 395 434 storage security 402 588 Maintenance 7,488 729 Pest control 7,700 12.833 Electricity 740 370 Total Annual Operating Cost 16,725 29,534 Incremental savings in operating costs 12, 89 l/ At full development; after applying the SCF; assumptions are stock turnover 1.7, scorage period Rice/Wheat 8 months, Paddy 4 months, composition of stored grain - Rice 50%, Paddy/Wheat 25% each. 2/ Based on rent Tk415 per month paid by MOF for 69'x14'x9 with 1,000 ads capacity. O Unskilled labour 75% of financial cost. S/ TkO.10 for ad, labour cost estimated to be 10% higher for rented storage owing to small capacity and scattered location. 5/ Two guards required for LSO with 4,000 tons at a financial cost of Tk6,400/man-year. Due to scattered location of rented storage, 3 guards would be required. 6/ Estimated at 1.5% of civil works cost (Tk623.97 million) for new godowns, 5% of rental fees for rented storage. 7/ Includes preventive spraying with Malathion; three fuaigations for new godown and five for rented storage. 8/ New godowns at Tk3,000-4,000 per month for 7,500 ton capacity LSD; assumed 50% of this for rented storage. BANCLADESI SECONlD F0OOGAA LSTORAGE PIOJECT (Credit 167-3D) 1hnwpstmnt Costs Iss Fio&g1,JA. and Economic Terms (Tk million) Iter 1970/79 1979/60 1960181 1981162 192/83 19431V4 1911416 0a acquisition - - 6.54 U.b0 1.40 1.40 - vil works 5.09 56.76 19.26 161.69 173.J4 109.21 33.12 giner ing services 0.41 4.54 6.34 12.W4 13.91 7.71 2.62 ulpoent and vehi;les - 1.70 4.76 1.01) U.Il 0.03 1.90 chnic-l assistance 0.06 0.40 1.4S 4.5S J.JU 2.SS - nitoring, manageent and evaluation 0D10 0191 0D32 _V.v 0-D.40 006 Total Finae- lal Costs in curr-nt prices 5.66 63.50 96.67 101.36 3 192.OS 121.35 42.12 Total Financial Costs In 1905 price 1 l- 12.04 110.63 157.67 246.65 141.11 33S.95 42.72 Total Economic Costs In 1955 price J/ 9.62 69.16 115.23 202.Us 199.Ji 112.50 J6.09 As provided by PIo Ond PECU. All Imported. Adjusted to 1965 p-ices usinV consumer price index giving adjustment factors of 2.12 (76/79). 1.74 119/60). 1.60 (80/1). 1.36 (81/12). 1.25 (02/03). 1.12 463/64). 1.00 (84165). *oador pei1es u*rivwd by using convwrsion factors: unskiled labour - u.15. Land e.quiblta1 a 4&-Al.m"d fortign exchange expenditure - 1.00, all others - 0.30 SCF. Civil works assumed to consiba ut 60S met-,iols and 40S lel.ouart of material local 25S # imported 75S. of l-bour; *05 unskilled and 20S skilled. Adjustd ftor duties and taxes assumed at 10%. Ooetail of working In PCR file. ..~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a UP £ 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c I aL I. . BANGLADESH SECOND FOOGRAIN STORAGE PROJECT (Credit 787-80) Economic Value of Paddy. Rice and Wheat 1. Rice and Wheat Rice Wheat .... (US$/KT).... . Projected 1990 price in 1985 constant 346 156 dollars 1/ Adjustment factors 2/ 0.90 1.10 311 172 Ocean freight and insurance 32 65 c.i.f. Chittagong 343 237 ..*..(Tk/MT).. c.i.f. Chittagong 9.090 6,281 (in 1985 Takas - Tk26.50 S USS1) 31 Plus local costs between port and market 520 520 Price in urban market 9,610 6,801 Minus local costs betwetn market and 1,410 1,129 godaown 3/ Price at godown (Tk/MT) 8,200 5,672 (Tk/ton) 8,330 5,762 2. Paddy .....(Tk/ton) Rice price at godown 8,330 Less milling costs and transport costs 400 between mill and godown If (Tk/ton) Price of 1.538 tons of paddy (which yield 7,930 1 ton of rice at the milling recovery rate of 65%). Price of paddy at godown 5,156 1W World Bank Cormodity Price Forecast, January 1985 adjusted by Manufacturing Unit Value Index to obtain price in 1985 constant dollars. 2/ Based on relationship between historical input unit value and prices of reference quality. Adjusted by SCF 0.80. - 40 - Table 16 BANGLADESH SECOND FOODGRAIN'STORAGE PROJECT (CrediT 77-BD) Computation of Economic Rate of Return 1/ (TK '000) B e n e f i t s Investment Savings in 3/ Reduced 4/ TotiF- Net Year Cost 3/ Operating Grain Loss Benefits Benefits Costs 78/79 9,620 ( 9,620) 79/80 89,160 (89,160) 80/81 118,230 _ (118,230) 81/82 202,080 1,550 6,560 8,110 (193,970) 82/83 199,380 8,730 36,910 45,690 (153,640) 83/84 112,500 11,680 49,370 61,050 ( 51,450)j 84/85 36,090 12,685 53,640 66,325 30,235 85/86 - 12,810 54,130 66,940 66,940 86/87 - 2012/2013 S/ - 12,810 54,130 66,940 66,940 Economic Rate of Return * 8% .1/ Carried out for godown construction, assumed that the benefits would start accruing one year after completion of construction, full develop- ment in year 85/86; storage life of 30 years; residual value ignored. See table 14 for investment costs. y Savings in annual operating cost given in table 13. ħ/ Grain loss savings of 4% (without project of 6% and with project of 2%) and using the following assumptions - annual average capacity utilization of 70%; stock turnover 1.7; storage period rice/wheat 8 months; paddy 4 onths composition of stored grain - rice 50 X, paddy and what 25% each; weighted economic price of produce (rice, wheat and paddy) at Tk 6,895 (Tk 8,330 x 0.50 + 5,762 x 0.25 + 5,156 x 0.25); see table 15 for economic prices. 5/ Replacement of equipment and vehicles every 10 years at Tk 7.6 M. BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) Organization of the Directorate General of Food |~ ~ ~ ~ ~ ~ ~ ~ ~~~~C OFtfftTW _ | ass.. szuttW *IIKT siWCTU ImI u| 1 Ililn ITI r 1 *X. r ION, tr|IITTZ Kw......... i Z tT N- 11mc uar ..........IN fIN T s | S Tim46. tic lowNI.I FLOU W P 1 LII lmm UT1*11". f I I u cSsX FF F | *11t. as IttTW ru WILL1)Tp q1t l t | r rtO |~~~m Sj W. TI :"XT a Al_ t 1' t |II AMT CNcat MIVITScP * fIftt t NtmiU £ AMNOW MBIL INGCW gy g PAT PU_CUA LIII g *jr i|I MIII? ~COWIPIATI SSBSWV )10S TW 151[1 ,013) I ,staft a TOSP , I ,,UI- K P _mu* mc usa TC SNUJI l@ uses WIASUi _ l Zt ITT_IS | ct l ~ ~~~ m lt OF mm Y P. tici | tt l KP N~~~~AOU"P"m KUa CS SD9c 5( secumily ~ ~ ~ ~ ~ ~ ~ ~ U C B A N 0 L A 0 E S N - SECOND FOODORAIN STORAGE PROJECT C CREDIT 767 - W3) MONTHLY OPEN MARKET RICE PRICE 9000 .j O .~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. * 000 ... 40 - C.. .C. 14C~~~~~~~ - - - ~~~JLY190- JUNE193 - 43 - |~~~~~~~~~~ A N G L A O E S H SECOND FOODGRAIN STORAGE PROJECT CcmeT 7M-1D) LOCATION OF PROJECT LOCAL STORAGE DEPOTS O U6INA.PURt" Pt' . RANPUR 4.. 26... Is..t 49 :wr la too$ '-- 35 75. . ......TOTAL 39 t3~~~~~~~~~~~~~jmthse t 4 >g I N 0 I A Km ~~ ~~ loth*q.,Km r~~- t- ~~IJ MAL#UR) . I' S L P)~~~~ so RI 10 24 ,, ;__ i)RAJs g .. - U 29 MY3EN5 NSN * 8YLHET 26 16 1 49 47 I _5 32 4 74 1 I3 a-' "PA JESOR T3^1DU<5aS\ ji s~ ~ ~ ~ ~ ~ ~ 64 " 4TA 6 -G_A ;,_L\__-.., S | j _,,*J v>,, &< N O ^ K H ^N L I ._Or I I ND I A I3 DHAK f) N DI 35~~~~~~~~~~~~~~~~~~~~~~~~~~~' % DPU~~~~~~~~~~~~~~~~ 5 6~ ~~~~~~~~~P % NOAKNALI~~~~~~~~~~4 % % I 'O ---.#~~~~'( Page 1 BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BD) LIST OF DOCUMENTS CONSULTED 1) ProJect Completion Report. First Foodgrain Storage Project (Credit 381-BD). 2) Foodgrain Storage Project Review Paper, USAID Dhaka October 1976. 3) Bangladesh Godown Rehabilitation Survey 1 Apr11 - 21 May 1976 by J.A. M4cFarlane, S.G. Millar and A.D. Gracey, Tropical Products Institute, U.K. 4) Proposal for Reorganization of the Directorate of Inspection, Control and Training July 1981, by J.A. Conway, Grain Storage/Pest Control Consultant, IDA Second Foodgrain Storage Project. 5) Report on the Study of Rural Storage system in Bangladesh January 1982, by Atrur Rahman, BIDS, Dhaka. 6) Engineering Consultants Reports - Various issues. 7) Feasibility study for setting up of a Food Corporation in Bangladesh, December 1979 in 2 volumes - FAO. 8) Mukta Marketing Project - An evaluation leport, September 1980, for the Ministry of Local Government Rural D ,velopment and Cooperatives by Md. Asliraf Ali, Md. Mustafrizar Rahman, and Md. Lutfur Rahman - Faculty of Agricultural Economics and Rural Sociology, Bangladesh, Agricultural University, Mymensingh. 9) An outline design of Information System for Monitoring Cell of the Food Directorate, Preliminary Report - December 1981 ay Eureka Consultants, Dhaka. 10) A review of the current position relating to information systems for the operation of the Food Directorate and Ministry of Food by Management Structure and Systems PVT Ltd, Bombay. 11) Study of Rehabilitation and Construction of Foodgrain Storage Structures January 1976 by 0. Pfost, FAO/OSRO Consultant. 12) Study on Information System of Monitoring Cell in the Food Directorate (Information System and Administration Manual) June 1982 by Eureka Consultants, Dhaka. 13) Study on a Teleprinter Communication System May 1981 by Prof. Dr. Lng M. Anwarul Azim, Bangladesh University of Engineering and Technology. 14) Rice in Bangladesh - an empirical analysis of farm level food losses in five post production operations by A.K. Fazlulhuq and Martin Greeley, Institute of Development Studies, Ohaka - Paper presented at the Post-harvest workshop held in Malaysia in January 29 - 31, 1980. - 46 - Appendix 1 Page 2 15) Strengthening of the Directorate of Inspection Control and Training in the Ministry of Food, Bangladesh 1985 FAO - Food Security ProJect (BGD/020/AUL). 16) Strengthening of the Directorate of Inspection, Control and Training "In the Ministry of Food, Bangladesh - 1985, FAO - Food Security Project (BGD/85/021/A/O1/12). 17) Third Grain Storage Project - Staff Appraisal Report. 18) Terminal Report of the Pest Control Training Consultant, June 1983 - IDA Second Foodgrain Storage Project. S~~~~~~~~~~~~~~~~~~~~~~~~ J I _ Page 1 BANGLADESH SECOND FOODGRAIN STORAGE PROJECT (Credit 787-BO) STATUS OF COVENANTS OCA COVENANTS STATUS 3.02. The borrower shall establish and maintain Accomplished. within its Directorate General of Food a Project Implementation Unit (PIU) which shall be headed by the Director General of Food assisted by a Deputy Director. 3.03. The Borrower shall cause its Directorate Accomplished. General of Food to establish, not later than October 31. 1978 or such other date as shall be agreed with the Assoriation, and thereafter maintain a monitoring cell (a) which shall be headed by a Deputy or Assitant Director. 3.04. The Borrower shall establish and main- Accomplished. ta1n within PWD a Project Engineering and Construction Unit (PECU) (a) which shall be headed by a Project Construction Manager of the rank of either Additional or Deputy Chief Engineer. 3.05. The Borrower shall establish and main- PSC established. tam -a Project Steering Committee (PSC) (a) No meetings has which shall be headed by the Secretary of the been convened Borrower's Ministry of Food. since April 1980. 3.06. The Borrower shall, not later than Accomplished. October 31. 1978 or such other date as shall be agreed with the Association, appoint a Research Officer and an Economist to strengthen the Planning Cell of the Ministry of Food. 3.07. The Borrower shall employ consultants and Accomplished. experts (in the areas of Engineering, Pest Control Training and Paddy Drying). The consul- tants to assist the Borrower in carrying out Part F of the Project shall be employed not later than June 30, 1979. 3.09. (h) (1i) Government to furnish to the IDA has not Association on a quarterly basis, reports on received quart- the progress of the project. erly progress reports since March 1982. - 48 - Appendix 2 Page 2 3.11. Until December 31, 1981, the Borrower Fulfilled. shall, before undertaking the construction of any new godowns for foodgrain storage in the Project Area (other than those included in the Project): (a) ensure that Such construction shall not adversely affect the utilization of the facilities constructed under the Project and (b) inform the Association of any such construction. 3.12. The Borrower shall cause the golowns Fulfilled. influded in Parts A and H of the Project to be built (a) in accordance with designs and construction standards acceptable to the Association and (b) at such locations, selected in most cases because of the prior successful operation of temporary foodgrain purchase centres. 3.13. The Borrower shall cause all usable Covenent met. existing pest control equipment presently owned by the Borrower's Ministry of Food in the Project Area to be transferred to pest control squads of the Borrower's Ministry of Food operating outside the Project Area when the equipment to be provided under Part C of the Project shall come into operation. 3.14. The Borrower shall select one day of the Accomplished. week for the purchase by the Borrower's Ministry of Food of foodgrain provided by each UCCA parti- cipating in the pilot marketing program referred to in Part 0 of the Project. 3.15. The Borrower shall: (a) not later than Waived In view October 31, 1978 or such other date as shall of similar study be agreed with the Association (i) carry out by FAO. a review of the field administration of the Borrower's Ministry of Food and (ii) inform the Association of the findings of such review; and (b) thereafter, implement such measures as shall be required to increase the effectiveness of the said field administration. 3.17. The Borrower shall take such measures as AGO system has shall be required, from time to time, to been abolished. increase the competition among foodgrain traders at the farmgate level. 3.18. For the purpose of its domestic food- Procurement grain procurement program, the Borrower shall prices revised set foodgrain procurement prices at levels which periodically. shall provide sufficient incentive for growers to increase foodgrain production through a greater use of fertilizers, high-yielding seed varieties and irrigation. - 49 - Appendix 2 Page 3 3.19. The Borrower shall (a) not 'ater than Report complet- October 31, 1978 or such other date as shall ed belatedly. be agreed with the Association (i) carry out, under ternms of reference consistent with those set forth in Schedule 5 to this Agree- ment, a review of its administrative procedures used to make payments for all foodgrains domestically procured by its Ministry of Food and (ii) inform the Assciation of the findings of measures as shall be required to improve such procedures. 3.20. Without any limitation or restriction Accomplished. upon its obligations under Section 3.01 of this Agreement and except as the Association shall otherwise agree, the Borrower shall: (a) Establish and maintain, in a commercial bank, two Project Funds, one referred to as the PIU Project Fund to be administered by the Director General of Food, and the other referred to as the PECU Project Fund to be administered by PECU's Project Construction Manager. 3.21. The Borrower shall, not later than Proposal sent December 31, 1979, or such other date as ahall to IDA, request- be agreed with the Association, (a) carry out a ing financing study of the private sector storage and market- under TA credit. ing system in the Borrower's territory with a view to identifying its operational constraints and investments needs; and (b) inform the Association of the findings of such study. 4.02. Audit accounts/reports due to IDA not Fy 84/85 audit | * later than six months after end of Fy. reports are due from both PECU and PIU. 4 BAP SECTION In a i r~~~~~~~~~~~S 40' 4194 BANGLADESH In. 6i x SECOND FOOD GRAIN STORAGE PROJECT I N D [ A LOCATION OF EXISTING AND PROPOSED GODOWN SITES ,ve , / y : @ !\1 %s5 )w1. * Agreed locations for new godown sites t Thok 2r. - Projectcoreorea -2V ll *I )[ ( i \5S V%,%( tdI * Existing local storage depots * . Existing central storage depots }DI t P R ~ ,~ ~Silos = 1 j gg - Primary roads Other roods ~ p e b X 0 ! ;} _ Railways SINS A ~~~~~~~~~~~~~~~~ ~~~~~ ~Distrkit boundaries Division boundories {;eX * ; 1W* -; r- _ _ Intemotional boundaries s to f = o i ? 2˘~~~~~~~~~~s -b IK p* I N H 23' 1'r .'° \ 05'~ I \ }>-^ ...... 1~4 .. . 'B A0 R.SAI; LeirOAK noI 0 @ i,, *0"L T, INi -Modhupur~~~~~~~Mo \ . . a1- tgh.\ H 3AGADS O,A sO 2A0l 30*K0w BURMA r, Ibo oga - KOhO . 0X C9MIcr _ INDIA~~~~~~~~~~~~~~~~~~~~~~~~K 2D\ KH LNA ,r r. Id.' J S 0 E A IPATUA AI R / 0 I N DIA LNA AK BANGLADESH~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~RAGMT 0 I4 2030jAL C0 3T od.,jBay of Bengal0 2 4 0l .p BANGLADESH ~ ~ ~ ~ ~ Ao.I.BURM OiASay ofBnal0. 1 0 s SRI "N"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t