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 oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

USS1.00 - Tk26.50

Tkl a USSO.0377

Tkl M - US$37,700

ABBREVIATIONS AND GLOSSARY

AGO - Authorised Grain DealerAman - The main rice crop, harvested November-JanuaryAus - Rice crop harvested in July-Augustbn - BillionBoro - Rice crop harvested in April-JuneBRBD - Bangladesh Rural Development BoardCSD - Central Storage DepotCIDA - Canadian International Development AgencyDCA - Development Credit AgreementDGF - Director General of FoodDICT - Directorate of Inspection, Control and TrainingDOF - Directorate of FoodFAO - Food and Agriculture Organization of the United

NationsGOB - Government of BangladeshFRG - Federal Republic of GermanyIDA - International Development AssociationLSD - Local Storage DepotM - MillionPECU - Project Engineering and Construction UnitPP - Project ProformaPSC - Project Steering CommitteePWD - Public Works DepartmentRMB - World Bank Resident Mission, BangladeshTPC - Temporary Purchase CentresUCCA - Upazilla Central Cooperative AssociationUSAID - United States Agency for International Development

Ka eWKOAL U emLYTH* WORLD SANK

Wash¢wton. DC 20433U.S.A.

O0ke dS DwfatGal

February 17, 1988

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on Bangladesh SecondFoodarain 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. Furtherevaluation of this project by the Operations Evaluation Department has notbeen made.

Attachment

This document has ruuticted distrbution nd meg be u by reciplents only In the performanceof 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 ... . . . * ................. iBasic Data Sheet ................................... .... ........... iiEvaluation Summary ..... .... .... ......... . iii

I. INTRODUCTION .. ............................................... 1

II. PROJECT PREPARATION AND APPRAISAL . . . 2Origin and Preparation ... ................................. 2Pre-appraisal .. ..... ................. 3Appraisal . ... ... .......... 4Project Description ............. ....... 4

III. PROJECT IMPLEMENTATION . .. ................ 5Delays in Effectiveness .................. . 5Implementation Schedule .......... ............. . 6Project Cost ....... ......... 6Project Changes after Appraisal ........ ....... 7Godown Construction ............ . ....... ........ 7Relief Storage ..... ........ ...... . 8Rehabilitation ..... ............ 9Mechanical Drying Facilities ........... ... .... 9Weighing and Testing Equipment ..................... 9Grain Quality control and Inspection ................ . 9Cooperative Marketing .... ................ . ..10Project Financing .... .... ......... ... .. 11Credit Allocation . ..................... 12

IV. INSTITUTIONAL PERFORMANCE AND DEVELOPMENT ... 13Implementing Agencies . .... ............... 13Project Steering Committee . . . 13Project Implementation Unit . . . 13project Engineering and Construction Unit ........... 14Pest Control Training . ... . ............. 15Organizational Improvements . . . 16Planning, Monitoring and Evaluation ...................... 17Accounting and Reporting . .................... ........ 17Compliance with Covenants ....... ........... ....... 18

V. PROJECT IMPACT ........................... 18Utilization of Godovns ................................... 18Physical Losses of Stored Grains . . 19Beneficiaries. ............. 20Impact on Private Sector. 20Economic Re-evaluation . .21Economic Rate of Return . .21

VI. IDA PERFORMANCE .. 22Overall Performance .. 22Supervision .. 23

VII. WONCLUSIONS AND LESSONS LEARNED .23

TABLES

1. Foodgrain Production and Procurement2. Comparison of Appraisal Cost Estimates and Actual Costs3. District-wise Storage Capacity (LSD)4. Purchase of Equipment and Vehicles5. UCCA Paddy Marketing Programme6. Annual Project Expenditures7. Domestic Procurement8. percentage Utilization of Selected Godowns9. On-going and Approved MOF GRain STorage Construction Programme10. Foodgrain Storage Capacity Utilization11. Staffing and Staff Training of DICT12. Foodgrain Recommended for Auction Sale and Destruction13. Annual Operating Costs in Economic Terms14. Investment Costs in Financial and Economic Terms15. Economic Value of Paddy, Rice and Wheat16. Computation of Economic Rate of Return

,HARTS

1. Organization of the Directorate General of Food2. Monthly Open Market Rice Price

MAP Location of Project Local Storage Depots

APPENDICES

1. List of Documents Consulted2. 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 Secondkoodgrain Storage Project in Bangladesh, for which Credit 787-BD in theamount of US$25.0 million was approved on March 15, 1978. The Credit wasclosed on December 31, 1984, two and a half years later than originallyexpected; an unu.ed balance of US$4.6 million was cancelled. The date offinal disbursement was October 7, 1985.

The PCR was prepared by the PAO/IBRD Coorerative Program followingmissions to Bangladesh in July and September 1985, a review of the StaffAppraisal Report (No. 1715a-BD) dated February 15. 1978, the President'sReport (No. P-2263-BD) dated.March 15, 1978, the Loan Agreement of April 12,1978, correspondence with the Borrower, internal Bank memoranda on projectissues as contained in relevant Bank files, as well as interviews withofficials both in the Bank and in Bangladesh who have been associated withthe 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 * * ofexpectation currat eatimate apPai"I estimte

Pro ct cost (US$ mllIona 40.0 33.0 82Lo Credit amount (US$ llionl 1 10*

Dlebure d (US$ mill OU2 25.0 20.4 UzCancaI U mls dllon)

Data rd approval 0Data Loan rentDate sffcty7ssData phsical co inanta cov sta /

Po rtion than co atdClosin dast 06/30/82 12/31/84Economic rate of return zX aFinancial rate of raturn (X)institutional performmnce SatisfactoryTechnlcal 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 - - - 34.1APraisal M.1 _ -_68.8 25.4 - - - - - - - -Nhlotiation- - - - 8.7 - - - - - - - - 8.7Superlsion - - - - 8.0 29.5 11.4 35.4 15.7 26.8 17.7 9.2 6.5 160.3Othtr - - - 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 DISWRSEMENTSFY9 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 25.0Actual US millon 0.5 1.2 3.9 T.8 10.2 14.6 19.7 20.2Actual as 2 of eatimat- 167 15 23 31 41 58 79 81Date of final disburasment October 7. 1985

MISSION DATA

Date No. of No. of Specializa- Nan- Date of Perfomaece Type ofMission (no/yr) days personw tioans / weeka report r tins /f Trend/s problem /b

Preparation /c - - - - 10/75Pre ppraeal 11/6 1 4 Ippraisal 04-05177 20 6 - 1 2178

Subtotal 37 27

Supervision 1 07/78 7 2 * 2 07/19/78 1 2 Nsupervisn 2 06/79 14 3 e.m_ f 6 06119/79 1 2 0Supervision 3 097Y0 /d I _/ 09/18/80 1 2 0Supervisto, 4 06/81 14 2 .f 4 528/81 2 2 0Sumrvison 5 12781 Id 3 d.p c N Supervision 6 04/82 5 I f.b 04/28182 2 1Supervision 7 02/83 Id 2 P /d 02/22/83 2 1 NSuprSion 8 11/8 10 l 211N

Supervfion 9 06184 Id 2 o. d 06/1084 2 ISubtotal 50 16

Completion 07/85 8 2 3 11/85* 09-10/85

Total 95 46

OT1HE PROJECT DATA

Borrower noleani of InaladesbExecuting ministry ini `tr of FoodExecuting 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 15.51Interven ng year avrate US$1.00 Tk 20.81Coapletion 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 Bangladeshaims at increasing domest!:: production through a wide range of measuresincluding the operation of a domestic foodgrain procurement and farmgateprice support policy. The Second Fc3dgrain Storage Project is a sequel tothe First Project which consisted of financing four grain silos with atotal capacity of 226,500 tons primarily a storage and transshipmentfacilities for imported foodgrains.

Obiectives

ii. The main objective of the Second Project was to provide additionalsafe grain storage and procurement facilities in major grain surplusregions, thereby improving the Government's domestic foodgrain procurementprogram and reducing storage losses. The project was expected to cost US$40million (Tk 620 million) over four years, with US$25 million financed byIDA. To achieve the objectives, the project included construction of145,000 tons (290 godowns) new storage capacity.,/ 20,000 tons capacity*Twin Nissen* and similar godowns, and provision of other relatedfacilities, equipment, technical assistance an training. The new andimproved storage was expected to benefit the country through reducingannual foodgrain losses by some 11,000 tons, pest control in all Ministryof 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 withMOP. The Director General of Food was the manager of the project supportedby a Project Implementation Unit. A Project Engineering and ConstructionUnit (PECU) within the Ministry of Public Works was made responsible forthe engineering design and construction of godowns. A number of problems

is Adding 70,000 tons and replacing some 75,000 tons of MOF storagefacilities in the project area.

- iv -

arose during implementation that delayed completion. These includedslowness in the establishment of PECU, acquisition oA' sites for storagebuildings, and approval of project proforma, shortages of materialsparticularly cement and limited Annual Development Program (ADP) funds.The project was completed in 1983/84, two and a half years later thanoriginally planned. Total project cost amounted to Tk 706 million (US$33million), exceeding the appraisal estimate by 14S in the Taka terms. Thelower than estimated project cost in dollars was due to shortfalls in someproject components. Due to implementation delays and changed needs of theproject, the rehabilitation component was reduced to 10,000 tons capacity;20,000 tons capacity earmarked for relief storage was diverted forprocurement functions; the paddy dryer coiaponent was dropped and sun-dryingyards were added at 171 godown sites; purchase of vehicles and equipmentwas curtailed. The pest control component, which was supposed to generatesignificant savings in storage losses, has been severely hampered bydeficiencies in staffing, training, equipment and mobility.

Results

iv. It appears that need for suitable storage facilities wus pressingin the early years of the project. In later years a rapid expansion ofgrain storage capacity has taken place in the seven project districts. ByJune 1984, the total nominal storage capacity in these districts rose tosome 580,000 tons of which project godowns accounted for 25? (145,000tons). At appraisal, domestic procurement of foodgrains in 1985/86 wasprojected 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 domesticallyprocured, in the remaining years procurement was between ?00,000-350,000tons. The annual average utilization of project godowns has ranged between57? and 124S over the past five years.

V. Recent studies have indicated that losses prevented throughstorage are less then expected at appraisal. The annual grain lossesprevented by the project as completed (excluding rehabilitated storage) isnow estimated at about 8,000 tons. The re-estimated economic rate ofreturn (ERR) is 8? compared with 21 2./estimated at appraisal. However,the re-estimated ERR does not include benefits from rehabilitation, pestcontrol and paddy drying, which could not be quantified but are believed tobe substantial. The ERR hna also been significantly reduced by a lowerrice price projection than at appraisal and slow implementation. As atappraisal, the ERR does not take into account a significant butunquantifiable benefit from increased production likely to have arisen fromincentive support prices to producers.

2/ Appraisal ERR were: 14? on the storage component, over 50 on pestcontrol and 242 on paddy drying.

v

Sustainability

vi. The project achieved its basic objective of providing additionalsafe grain storage and procurement facilities and, through these, (a)reduced physical losses in foodgrains, (b) strengthened the Government'sfarm 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 controloperations eas complemented by additional technical assistance provided byFAO. And further support in the areas of grain transportation logisticsand telecommunications was made available vith financial and technicalassistance from the Federal Republic of Germany. The technology supportedby the project is adopted to the local conditions and no change intechnology is expected to be required in the foreseeable future. Based onthe project's achievements as observed, the complementary assistanceprovided, and the suitability of the storage and stock managementtechnology, it can be safely assumed that the project is sustainable.

Findins and Lessons

vii. The following main lessons can be learned from the experiencegained with this projects

(a) Land acquisition is a complex matter in Bangladesh andrequired close attention during preparation and appraisalto avoid delays in project implementation.

(b) The importance of careful preparation and project designcannot be over-emphasized. Although the Dhaka-type godownchosen in the project is sturdy and functional, its costsappear to be high compared to storage constructions inother countries of the region. For future storageprojects a study of alternative designs used in the regionis recommended. Another point that came out in thisproject is that storage would be more efficient if siteswere planned and developed to include a complete packageof godowns and ancillaries such as concrete yards forreceiving and drying procured grain.

(c) Proper technical supervision during construction andstartup of operations is critical, and capable accountingstaff should be recruited early to keep project accountsand prepare disbursement claims in a timely fashion.

(d) Once again the experience suggests the importance ofadequate and timely release of budget funds to enablecontinuous progress in project implementation.Availability of funds for maintenance is critical for

- vi -

effective utilization of project constructions. Forfuture projects it is suggested that each storage managerbe provided with an annual budget for undertaking minorrepairs and maintenance, thereby avoiding bureaucraticdelays 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 ofdrainage, flood control and irrigation facilities for multiple cropping; (b)provision of yield-increasing technology such as HYV seeds, fertilizers andpesticides; (c) strengthenirg the extension, credit, and other farmersupport services; and (d) operating a domestic foodgrain procurement andfarmgate price support policy and related efforts. While the other elementsof the strategy have had a longer history, GOB's domestic procurementoperations became significant only recently with markedly increasedprocurement in 1975/76 when a bumper crop enabled GOB to procure 415,000tons of rice out of a crop of 12.8 N tons (see Table 1). The coincidence ofheavy imports of foodgrain and relief food into the country in that year hasfocussed attention on the need for a more immediate and practical policy forimproving grain storage capacity in the country. Since then, a number ofinvestment projects have been implemented in the agricultural sector, which,combined with GOB's procurement and pricing policies, have helped toincrease production and procurement, rendering the public sector storagecapacity inadequate in the subsequent five years.

1.2 Other major problems in the sub-sector were abnormal foodgralnlosses in transit as well as in storage due to various factors includingsub-standard storage facilities, and the lack of an effective pest controlmanagement, and organizational and managerial weaknesses of the Directorateof 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 ofshortages. In recent years, the system has added on a number of otherobJectives which include assurance of incentive prices for producers offoodgrains and fair prices to consumers, gradual reduction of foodgrainsubsidies, targeting an increasing share of total public foodgraindistribution through various programes designed to reach the very poor, anddistribution of emergency food relief to areas and people affected bynatural disasters.

1.4 Policy decisions on grain marketing and storage are carried outthrough the Ministry of Food (MOF) which operates the public sectorprocurement, distribution and storage system. The Directorate of Food is theoperating department of the Ministry. The Directorate has been reorganizedin January 1984 in a general move by the GOB to decentralise operations ofthe various govermuent departments.

2

1.5 The Bank Group's involvement in the grain storage sub-sectorstarted with the first Foodgrain Storage Project (Credit 381-BD) whichprovided funds for the construction of four silos with a total capacity of226,500 tons of grain; improvements in grain inventory control and insectcontrol for stored grain; technical assistance in management and operationof grain storage and transport facilities; and consultants for study offuture foodgrain movements and storage needs of Bangladesh. The silos wereintended primarily as storage and transshipment facilities for importedgrains. IDA provided US$19.7 N and the Swedish Government Skr.25 M (aboutUSS5.3 M). The project replaced Credit 83-PAK which was signed in February1966, but suspended in December 1971 as a result of the liberation war andthe subsequent independence of Bangladesh. By that time, project works hadbeen almost completed. The project was reactivated in May 1973. After somedelays following the civil war, It was successfully completed in June 1977.The project contributed considerably to alleviate Bangladesh's problem intimely and efficient handling and distribution of imported grain, exceedingin 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 afour-year period (1978/79-1981/82) aimed at providing additional safegrain storage and procurement facilities in selected districts to strengthendomestic procurement operations in the public sector. The project wasestimated to cost US$40 N including a foreign exchange component ofUSS11.7 M.

1.7 This project is the subject of this completion report. The reportprepared 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 March1978, the Development Credit Agreement dated 12 April, 1978 together withinformation obtained from the implementing agencies; a review of supervisionreports and project files; field visits in June 1985 to selected projectsites; discussions with project staff in the Directorate of Food; Interviewswith Bank staff (Resident Mission - Ohaka) who have been associated with theproject and a perusal of documents listed in Appendix 1. The report wasreviewed by the Bank's RMB and headquarters project staff and finalisedafter incorporating only some changes and additions.

II. PROJECT PREPARATION AND APPRAISAL

2.1 A consulting firm carried out a preparation study and finalised itsreport in October 1975. Pre-appraisal by Bank staff took place in November1976; 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. Theconsulting firm submitted its project preparation report in October 1975 -Bangladesh Foodgrain Storage II Feasibility Study" - recommending a projectdesigned to enable the DOF to handle a foodgrain throughput of 1.7 M tonsper annum, consisting largely of imported grain. The project comprisedrehabilitation of existing flat storage involving a total capacity of254,000 tons, construction of silos at Chalna and Khulna with an additionalcombined capacity of 52,000 tons, organizational improvements and training,and possibly provision of grain dryers in selected locations. The estimatedtotal cost of the project was about US$29 M.

Pre-appralsal

2.3 The consultant's study had raised a number of policy issues. Thesewere addressed by a pre-appraisal mission which visited the country inNovember 1976 followed by an IDA Food Price Policy mission in 1977. TheMinistry 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 arevised project proposal which placed greater emphasis on the rehabilitationof existing storage facilities and the construction of new godowns tosupplement the existing godown capacity. These proposals includedrehabilitation of existing godowns involving a total capacity of 356,000tons, construction of silos at Chalna and Khulna with an additional combinedcapacity of 75,000 tons, construction of new Dacca-type godowns j/ with atotal nominal capacity of 243,000 tons and technical assistance fororganizational improvements and project implementation. The estimated total-ost of the proposal was USS76.2 M. The project was to be implemented by anEngineering Directorate proposed to be set up within the OOF.

2.5 These proposals were examined and the pre-appraisal mission came upwith a revised proposal deleting the silo and rehabilitation components andsubstantially increasing the technical assistance component. As revised bythe mission, the proposed project included construction of new Dacca-typegodowns with a total capacity of 200,000 tons, located mostly in majorprocurement regions; provision of dryers and electronic desk calculators andtechnical assistance (21 man-years) and training. The project was estimatedto cost US$25.7 M. A new Directorate, within the Food Directorate,(Directorate of Maintenance and Construction) was proposed for theimplementation of the project.

2.6 The mission excluded the silo component in view of its desire tokeep the project and choice of construction techniques as simple as possibleand within the management capacity of the DOF while meeting the mostpressing need for grain storage, i.e. to strengthen the logistical base forexpanding the GOB's procurment of domestic grain. Furthermore, inclusion ofa Khulna/Chalna silo complex was considered to require further study ofgrain transport alternatives, which could not be done without unduly

* delaying the project processing. The rehabilitation component was notconsidered because a country-wide government godown rehabilitation projectwas about to be implemented with British assistance.

2.7 The new construction of 200,000 tons capacity was in part based onthe 'ssumption that GOB could only handle a throughput of some 2 M tons peryear, given its budgetary and administrative constraints. With thisaddition, the MOF would have a total loading capacity of at least 1.6 M tonswhich would be adequate to handle 1.5 M tons of rice projected for domesticprocurement for the 1986/87 crop year and to facilitate the government graindistribution 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 ofadditional grain storage requirements. Transport difficulties in Bangladeshwere such that national availability of foodgrains co-existed with regionalshortages. For storage designed to meet domestic procurement or emergencyrelief, location was considered more important than size of storage indetermining ability to meet requirements. A case was therefore made foradditional storage on a thana by thana basis. The project area wasrestricted to certain 'core' districts where more grain surplus areasexisted and where the potential for streamlining procurement appeared to beavailable. In addition, CIDA's proposal to build Dacca-type godowns with atotal capacity of 50,000 tons was also taken into account. Another concernduring appraisal was the possible duplication of godown rehabilitationeffort. Since the British assistance was confined to rehabilitation ofDacca-type godowns (which, the GOB considered, had not all been covered),rehabilitation of Twin-Nissen sheds and similar godowns were included in theIDA project.

2.9 As a complementary investment to protect stored grain, support topest control activities was included at appraisal. Cooperative marketingassistance was another additional component being supported on a pilotbasis. The scope of technical assistance was reduced by excluding somestudies planned earlier and proposing assistance only to support activitiesdirectly concerned with project implementation. This reduction was in partto allay GOB's concern that the technical assistance requirement wasexcessive, particularly engineering consultants.

2.10 Because of MOF's organizational problems and its difficulty ingetting qualified and experienced staff, responsibility fcr projectimplementation 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 ProjectEngineering and Construction Unit (PECU) within GOB's Public WorksDepartment (PWD), which would be responsible to the PIU.

2.11 From the preceding paragraphs it can be noted that from preparationto pre-appraisal the focus of the project shifted from assisting GOB inefficiently handling imported grain to strengthening the government'sfarmgate price support programme and procurement operations by providingstorage facilities, equipment and technical assistance in core areas fordomestic grain procurement. By addressing this issue and others like levelof storage capacity, type and locations of storage, storage management andgrain quality control, in retrospect, pre-appraisal and appraisalconcentrated 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 asnegotiated, comprised the following components:

I/ In December 1978, Mymensingh was divided into two districts - Mymensinghand Jamalpur.

!

a) Construction of 145,000 ton (nominal) 1/ new storage capacity,including necessary ancillaries, at about 150 existing or new siteschosen 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 dryingfacilities;

c) Strengthening of the grain inspection and pest control operationsof MOF through provision of equipment and vehicles, including motorlaunches, and the establishment of a new foodgrain testinglaboratory.

d) Implementation of a pilot project to develop the grain marketingpotential 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 andstudies for the evaluation of project benefits.

f) Establishment of a Project Implementation Unit and a MonitoringCell and strengthening of the Planning Cell, within MOF.

g) Additionally, in selected flood or cyclone prone districts outsidethe project area, the project would provide for the construction of20,009 tons of storage godowns to facilitate GOB relief response toemergencies.

III. PROJECT IMPLEMENTATION

I .~~~~~~~~~~~~~~~~~~~

Delays in Effectiveness

3.1 The negotiations for the credit took place in December 1977. TheBank's Board of Directors approved the credit on 3 March 1978. The Creditwas signed on 12 April 1978 and the target date in the Development CreditAgreement for fulfilling the conditions of effectiveness was specified as 12July 1978. Because of delays in the approval of the Project Proforma (PP),administrative clearance for the establishment of PECU, and the opening ofseparate accounts for project funds, the Credit effectiveness was postponedto 30 September 1978.

/ A loading capacity of paddy which provides ideal storage conditions butwhich 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 theproject as agreed at negotiations, particularly in regard to insufficientvehicles for pest control squads and procurement staff, omission of theengineer and operators for the paddy dryers, omission of the new zonaltesting laboratory and insufficient allocation for price escalation. Thesedeficiencies were remedied following Bank's intervention in July 1978.

Implementation Schedule

3.3 At appraisal, it was estimated that the construction programmewould be completed by December 1981, with a project closing date of 30 June1982. Final construction took place in December 1984 and the Credit closingdate was extended to 31 December 1984. 1/

3.4 A number of problems arose during implementation that delayedcompletion. Slowness in the acquisition of sites for storage buildings,shortage of funds under the Annual Development Programme (ADP) and materialshortages were major contributory factors. Other problems were inadequateplanning and monitoring, project administration and constructionsupervision, mainly due to frequent changes in responsible staff in PIU,tack of effective coordination between PIU and PECU, lack of authority ofPECU 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 toTk621 N 9/ at appraisal, implying an overall cost increase of 14% (seeTable 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 carriedout (paddy dryers) or partially carried out (rehabilitation and pestcontrol), 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 totalproject cost rose from 80% at appraisal to 97% at completion. Expressedon a per ton basis, the cost of godowns (excluding rehabilitation) wasTk 4,100 per ton or about 52% above the appraisal estimate.

1/ Loan disbursement continued till September 1985 without officiallyextending the closing date. Disbursements were, of course, restricted toexpenditures incurred up to the official closing date.

3/ Due to difficulties in getting proper cost data from PIU, data up to1983/84 were taken from audited accounts and the data for 1984/85 fromPIU records. PECU has provided detailed cost data.

./ comprising land acquisition cost, construction cost and engineeringservices.

7

3.6 Price escalation and quantity changes have both contributed to thecost overruns. Indicative of price rise was the almost doubling of theconsumer price index over the project impleeratation period. Quantitychanges were due to (a) changes in foundation design in some sites wherepoor soil conditions existed, (b) provision of additional facilities likedrying yards, (c) higher than expected site filling, and (d) remoteness ofmany sites involving increased cost particularly carriage of materials. Theprovision of 5% for physical contingencies at appraisal proved thereforeinadequate.

Project Changes after ApDraisal

3.7 As a result of implementation delays, changed needs in severalcomponents and of tne need to keep total project cost in line with appraisalcost estimates, the project was amended on several occasions duringimplementation. The main changes were reductions in rehabilitation capacityfrom 25.000 tons to 10,000 tons, deletion of paddy dryers, inclusion of paddydrying yards, and modification of relief storage to cater forprocurementoutsidethe main projectarea. In addition, provision of equipnenttand vehicles had beencurtailedmainly 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 thenational storage capacity (Table 3). Total public sector storage capacityin 1978 was 1,135 M tons, compared to 1,774 M tons in 1985. Since theproject added only 165,000 tons, about 474,000 tons (of which 81,000 tons inthe project core area) was constructed during the project period under otherprogrammes. I

Godown Construction

3.9 Godown construction was scheduled in three phases extending overfour years; 56,000 tons in Phase I, 53,000 tons in Phase II and theremaining 36,000 tons in Phase III in the seven northern producingdistricts. Oespite delays, appraisal targets of 145,000 tons have beenachieved 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 290StMnal 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 oncompletion. Construction delays were caused by the length of time taken foracquistion of land (8-10 months), for preparation of construction estimates(3-4 months), and administrative approval (2 months). Material shortages andinadequate provision of ADP funds have also caused delays. Some of thedifficulties with material shortages and land acquisition could have beenavoided. When allocating coal for brick burning, PWD appeared to have givenpreference to other godown programmes, and construction sites earmarked forthe project had le some cases been diverted to other storage projects.

81

3.10 Arrangements for the award of tenders and for construction weregenerally regarded as satisfactory. The simple and sturdy 'Dacca' design iswell tried and tested under local conditions and only minor improvementshave been suggested, at appraisal. The concrete outside the store were addedlater to facilitate handling and conditioning operations and to provide asuitable base for emergency storage.

3.11 Of the 330 units 1/ constructed, four have been found to bedefective, obviously due to lack of adequate supervision. Three of thesehave now been rectified while the fourth is still under dispute as toquality of construction. However, It has been handed over to MOF and it hasbecome operational. Minor defects are still being reported by the DistrictFood Controllers and these have been taken up with PWD for remedial action.Construction of boundary walls at nine sites as well as drying yards atthree sites were not completed due to land disputes.

Relief Storage

3.12 After an initial delay of r.early 18 months, the construction ofrelief storage godowns was finally completed in 1984. These godowns are nowoperational 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 40Uiinal caacity - - 3.000 12.500 1.000 3.500 20.000

(tons) INo. of units operational - - 6 31 33 40 40Oerational nominal - - 3.000 15.500 16.500 20.000 20,000

capacity (tons)

As previously noted, the above godowns were also brought into operationimmediately 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 hadpicked up very rapidly requiring additiondl storage capacity. About the sametime, the Food Security Assistance Scheme of FAO was under consideration.The Bank therefore agreed that the relief storage located outside the mainproject areas be used for procurement. Accordingly the capacity of 20,000tons under this category was built in the following districts predominantlyfor 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 rehabilitationprogramme was delayed by about 18 months. The delay was caused bydisagreement between PIU and MOF as to the choice of sites for rehabilitatedstorage and replacement. Some of the stores considered for rehabilitationunder the project such as Twin Nissen huts and Assam sheds had already beenreplaced and rehabilitation of some other facilities did not appear costeffective. Moreover, the government could not find enough stores within theproject area for rehabilitation. The programme was therefore reduced from25,000 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 nottake up duties until September 1980, but had a slow start, because initiallyhe had no counterpart. When he finally had selected equipment for a reducedpilot project of five sites 1/ orders were not placed because DOF found thatresults with similar driers installed under a DANIDA project were notencouraging. Farmers and traders apparently were not interested in bringingtheir grain to a drier because of unfamiliarity with the system of pricedeductions to be applied for moisture loss, even though fuel and labourcosts had not been charged. Under the circumstances MOF decided not to usethe funds allocated for the pilot driers and to drop the componentaltogether. The deletion of this component has been partially offset byinclusion 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 newTemporary 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 notpurchased 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 givento 25 pest control squads, the establishment of a foodgrain testinglaboratory, training programme for operators, spraymen, godown managers andinspectors. In addition the project Included two man years of qualitycontrol expertise, three equipped training vans and budget for trainingcourses.

1/ In mutual consultation between IDA and MOF the initial number of 15drier sites was reduced to five. On the basis of a pilot project theinitial number proposed at appraisal was much too large.

10

3.18 Implementation of this component faced numerous problems. Some 15posts were not filled in a total sanctioned strength of 62 pest controloperators. They were not provided with vehicles as anticipated. In fact, 10land Rovers which were donated under the British assisted - godownrehabilitation scheme, were impounded under a martial law direction afteronly three months of operation. After repeated requests by the Banksupervision missions, 5 jeeps have been purchased in 1984/85. The Foodgraintesting laboratory at Naogaon in Rajshahi district has been completed in1984/85. The food technologist has yet to be appointed.

3.19 As regards training, the first PP omitted any reference to eithermobile training units, training aids, or a local budget. After-a series ofdiscussions spanning a period of two years, a revised PP was approved by MOFin February 1982 with mobile training unit, training aids and local budgetfor training all deleted. In view of the abuve, the pest control consultantvirtually filled the role of grain storage/pest control adviser encompassingthe whole field of technical operations of the DOF. He has reviewed itsoperations and made proposals including the reorganization of theDirectorate of Inspection, Control and Training. His proposals were notfully implemented and a need exists for promoting an effective pest controlsystem, substantially improving the key areas of staffing, vehicles andtraining. It is worth noting that after expiry of his contract with IDA, theconsultant has continued to assist HOF in pest control training activitiesuntil July 1985 with financing through the Food Security Project executed byFAO (see para 4.14).

3.20 Equipment supplied under the FAO projects together with thoseprocured under IDA and FRG projects has provided the operationaldirectorates with an adequate and appropriate range of equipment forprocurement, 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 theMuktagacha UCCA in Mymensingh district. Local management was undertaken bythe staff of the Bangladesh Rural Development Board (BROB) and support fromthe staff of the World Bank in Dhaka. The revised PP has increased UCCAparticipation to 10, the number envisaged at appraisal. Only four have sofar participated in the programme. Moisture meters, weighing scales,motorcycles, training cost and other development expenditure for UCCAs aswell as a 50 ton capacity godown at Kotwali UCCA, Dinajpur district, havebeen funded under the project. Despite problems in getting paddy marketingloans, the UCCAs have managed to run their limited programmes satisfactorilyusing their own funds (members share and savings).

3.22 The scheme has proved financially beneficial to the farmers and allthe four UCCAs have made profits (Table 5). It must be noted that inarriving at these profits, indirect costs of BRDB and other governmentinputs have not been taken into account.

3.23 In recognition of the success of this programme, BROB has decidedto replicate it in other districts including IDA-financed Rural DevelopmenttI 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 byGOB. USAID participated in the local cost financing of the project to thevalue of Tkl3.3 M (USS528,000) out of PL480 proceeds.

3.25 Throughout the project implementation period, disLirsementsconsistently lagged behind the volume forecast at appraisal (see Basic DataSheet). The total expenditure up to 30.6.1984 was Tk497 1, of which Tk373 Mwas due for reimbursement but reimbursement was claimed for only Tk276 Mleaving a backlog of Tk97 M. The backlog of Tk97 M comprised Tk56 M againstcivil works and Tk41 M against security deposit as shown below.

Disbursement Performance Up to 30.6.1984

Actual Amount eliaible Amountexpenditure 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 PECUwas very poor. In certain cases, claims were submitted two or three yearsafter the actual refund of the mount to the contractors. Main reasons forthe delay in preparing claims against civil works were as follows:

a) In some cases, contractors have preferred appeal against thedepartmental decision in finalising the works contract. In a fewcases, the contractors have sought arbitration or legal actionthereby delaying final disposal of cases.

b) For works which continued up to 30 June 1985, bill vouchers couldnot be submitted as these have to be processed and collected fromPWO field offices. In some other cases, the final bills could notbe prepared due to non-cooperation or non-availability ofcontractors 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 ofwithdrawal applications for local expenditure by executing agenciesparticularly PECU. They have little Incentive to seek reimbursement inforeign exchange (which goes to Bangladesh Bank) once they have madeexpenditure from their own budgets. In addition, over-centralisedbureaucratic 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 claimssubmitted from November 1, 1982 onwards) in order to (1) better utilize theCredit, 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 ofduties and taxes (estimated in SAR at 18.5% of total costs). The Increasedrite for civil works about halfway through the project compensated forreduced or deleted components with a 100% disbursement rate (see table belowand para 3.5).

Disbursement Credit Allocation a/Rate Planned Actual AchievementT ' (US'00) . .

Construction materials and 65/90 17,000 19,240civil 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 20,358Cancelled/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 disbursementsrates remained unchanged credit savings would amount to US$6.5 M Thiscompares to the USS4.6 N that has been cancelled upon closing of thecredit 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 tothe Secretary of Food who was assisted in project implementation by aProject Steering Committee (PSC), consisting of representatives of otherinterested ministries and agencies. The Public Works Department (PWO) underthe Ministry of Public Works was made responsible for the engineering designand construction of godowns, for which a special unit called ProjectEngineering and Construction Unit (PECU) headed by an Additional ChiefEngineer 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. Inaddition, to improve the overall performance of the MOF, the projectprovided for strengthening the Ministry's Planning Cell, for establishing amonitoring cell, for technical assistance, and for improvements in DOForganization, ooerating systems and procedures.

4.2 The institutional impact of the project was satisfactory butvariable among the executing agencies.

4.3 In assessing the impact of the project on the overall performanceof the DOF, it is worth noting that the Directorate during the projectperiod had undergone changes in its organization, operating systems andprocedures. These changes were in part due to various initiatives taken atdifferent times by IDA as well as other institutions.

4.4 The performance of the individual agencies is discussed in thefollowing paragraphs.

Project Steering Committee

4.5 A Project Steering Comittee was formed under the Secretary of Foodto review progress of project implementation in conjunction with otherministries and institutions involved in project execution. Until April 1980,regular meetings were held to discuss the quarterly progress reportsprepared by the Project Implementation Unit and the annual reports preparedby the Planning Cell. Due to Increasing responsibilities of the committeemembers in their day-to-day work, the Project Steering Comittee has not metsince April 1980. However the committee members headed by the Secretary,Ministry of Food met in every quarter to discuss project issues raised inthe QRR (and lately introduced CROPS) prepared by RMB.

Project Implementation Unit

4.6 The Project Implementation Unit has not been as effective asanticipated at appraisal. This is attributed to a lack of staff experiencedin implementing such projects, high staff turnover (five different officersserved as Deputy Director during the project period), and a lack ofengineering capability to deal at an equal level with PECU/PWD. Lack ofdelegation of financial powers to the Director General was also a reason forslow project implementation.

14

Project Enaineerino and Construction Unit

4.7 Although all new godowns and most of the ancillary works have beensuccessfully completed, eventually it was generally felt that over theproject period coordination and works supervision by PECU have not alwaysbeen satisfactory, which has been partly the reason for the delays. Some ofthe pre-construction delays, like preparation of cost estimates, sitesurveying and tendering were due to slow actions of PWO field staff overwhich PECU clearly had not sufficient authority. Although on paper adequateengineering and accounting staff were assigned to PECU, constructionsupervision by PECU has hardly been of any significance. Preparation ofaccounti and disbursement claims have been unduly delayed because ofinaction by PECU and PWD field staff. Also, PECU/PWD has not. been veryimaginat'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 requiredthat contractors were given the option to bid based on self-procuredmaterials or materials made available to contractors by PWD from its stocks.Project use of such stocks would be replenished by normal commercialImports, not otherwise financed, using international shopping underprocedures acceptable to IDA.

4.9 There were delays in procurement of building materials due tolengthy procedures and lack of quick decision. Procurement of 8,000 tonsof Portland Cement was greatly delayed due to belated approval by theMinistry of Works. In another case, the Min;stry sought reimbursementagainst the procurement of 3,000 tons of cement but failed to establish thatthese were procured through proper tendering. Also the procurement of jeepsran into problems. After IDA approval of tender award, the Ministry requiredthat the jeeps be procured from the lone local manufacturer. It took monthsbefore the Ministry accepted the bid of the lowest conforming foreignbidder, by which time the validity of the bids had expired and the bidderrefused to supply. A reduced number of vehicles was then procured from thelocal manufacturer whose bid was still valid.

4.10 Performance of ensineerina consultant. The appraisal mission hadoriginall1yplaced the engineering advisor in the Food Ministry to deal withPWD on technical matters. However, the engineering consultant who was tomonitor progress and to assist and advise both PIU and PECU was engaged byand reporting to PECU. This arrangement has proved not to be appropriate.According to his terms of reference the consultant was to assist PECU inreview of specifications, contract documents and bid evaluations, recommendstandards of supervision and train personnel In supervision methods. Inpractice, however, design estimates and tender documents were all preparedby PWD without reauesting or accepting any input from the consultant. Theactual arrangement has been that the consultant was undertaking onlysupervision for which PECU had neither the staff nor vehicles. In makinginspection visits at construction sites supervised by PWO field staff theengineering consultant has done a good Job in helping to maintain minimumstandards of quality. However, the rapport between the engineeringconsultant and PWO has not been very good and the services of the consultanthave not been optimally utilized by PECU/PWD.

4.11 The expatriate consultant and later only the resident engineer ofthe firm travelled frequently to the sites to report on the status of worksand certify completed works. Generally their work has been useful. Due todelays in construction completion, the fim's contract was extendedtwice, expiring finally on 30 June 1984. This resulted in many

1.0

completion certificates for works finished after 30 June 1984, not havingtheir counter signature. Another consequence was the non-submission of theterminal report by the consultants. Their final bills had however been paidby PECU.

4.12 Performance of contractors. The performance of local contractorswas generally satisfactory. In a few cases of unsatisfactory work, as foundby the engineering consultant action was taken by PW0 by demolishing andredoing the defective work. The reasons for poor performance in some of thecases can be attributed to low bidding and slender financial resources ofsome of the contractors. To overcome their liquidity problems, PWO hasprovided in many cases construction materials on credit and rentedconstruction machinery.

4.13 Maintenance. Repair and regular maintenance of godowns, equipmentand vehicles owned by the DOF are genewally poor. A number of godowns havecracks in the floors and adjoining walls. Due to shortage of funds, norepair and maintenance of the godowns and staff quarters had been done sincecompletion of the construction work. Other reasons for maintenance problemsare unclear responsibilities for carrying out repair and maintenance work,time-consuming administrative procedures for even minor repairs, and a lackof engineering expertise in the Directorate of Food. At present, MOFrequests the PWD on a job-by-job basis to carry out almost all godownrepairs, which is an unsatisfactory situation. Either PWD should take thegodowns in repairs or DOF should have funds and some engineering staffavailable to do minor repairs on their own.

Pest Control Training

4.14 Pest control training was proposed under the project to be providedby a consultant. Accordingly, an expert, who had previously worked with theBritish-assisted godown rehabilitation project was recruited and took up hispost in October 1980. As the Warehouse Training Centre, under the auspicesof which he was intended to function, had ceased to exist, he was placeddirectly in the Directorate of Inspection, Control and Training (DICT),reporting to DGF. He was required to provide intensive training in the fieldfor all MOF personnel in the 7 core districts starting with pest controloperators, spraymen and godown managers in addition to participants fromUCCAs and the private sector. As stated in para 3.19 the training effort didnot materialise to the extent expected because the key elements of staffing,equipment and mobility remained unresolved due to emission in the PP despiteefforts by successive IDA supervision missions to; redress the situation.Furthermore, the consultant was not given a counterpart until the expiry ofhis contract. He was then recruited by FAO to perform similar functionssucessfully under two Food Security Projects for a total period of 17months. These projects provided for supply of vehicles and equipment andconducted a series of training courses. As a result , the entire nationalcomplement of quality control inspectors (previously designated technicalInspectors and pest control operators) appointed or promoted under thereorganization plan was given a two-week training course in all aspects ofpest and quality control. In addition, a series of regional training coursesfor quality control inspectors were also given, making up for a limitedeffort under the IDA project. These efforts were also supported by the FRGFood Security Assistance Project.

16

Organizational Improvements

4.15 OOF field administration. Field administration of the DOF wasrequired to be improved in order to establish an effective food managementsystem. As a first step, the posts of the District and Sub-divisionalControllers of Food were upgraded in 1979 as recommended by IDA. Later inJanuary 1984, DGF was reorganized following the report of the Martial LawCommittee. Most of the changes were in line with IDA proposals.

4.16 Under the new set-up (see Chart 1), the Director General isassisted by an Additional Director General as Chief of Operations. TheDirectorate General now consists of six directorates - (a) Administration,(b) Movement, Storage and Silos, (c) Procurement (d) Inspection, Developmentand Technical Services (e) Supply, Oistribution and Marketing and (f)Accounts and Finance. The role and duties of the Director General as well asthose of the Directors have been clearly defined.

4.17 New staff cadres and career avenues were introduced in severalcases transferring serving staff across traditionally exclusive workingdiscipline boundaries. These changes were more marked and fundamental in theDICT (now DIOTS) which lost its operat!rna' role in the fields of pest andquality control. For the first time, the oesciplines of storage engineeringand processing technology have been Introciued into the OGF. the Director,Additional Director and one Deputy Oire totr of 0OTS are all engineers. Pestand quality control has been made the responsibility of the line managers -godown managers and technical inspectors respectively - under the DistrictControllers of Food.

4.18 Foodgrain procurement. Procurement operations have beenstreamlined. The focus of the operations has been shifted from ensuring atarget level of public stocks to ensuring an adequate 'floor' price toproducers. In line with this development, procurement prices have beenadjusted regularly with announcement in advance of crop planting. Toillustrate, increased procurement prices for the aman crops were announcedon 30 June 1984. The new prices represented a 15% increase for paddy and 10%increase for milled rice, levels considered to offer farmers a significantprice incentive to produce. However, achievements in the actual procurementof foodgrains are a function of various factors, of which the procurementprices set by Government is one. Consequently, actual procurement was only266,000 tons in 1983/84 (see Table 7) As shown in Chart 2, this was notbecause procurement price was inadequate but rather because the commercialprices were consistently above the procurement price.

4.19 Access to procurement centres. The restrict.ve system ofAuthorised Grain Oealers (AGO) has been abandoned. In addition, farmers' andtraders' access to MOF procurement centres has been improved, in some areaswith the result that competiton for farmers' grain has Increased somewhatand farmgate prices have probably been higher than they would have beenotherwise. Furthermore, the number of purchasing centres has been greatlyincreased in the last four years and improved handling, quality standard andpayment procedures have been put into effect.

4.20 Constraints. NOF's procurement efforts could, however, not alwaysprevent 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 forirrigating the 1981/82 boro crop. The decline was attributed to, amongvarious factors, the low prices received by many farmers for the preceedingaman crop.

4.21 Foodgrain distribution. The increasing effectiveness of MOF'sfoodgrain distribution operations was demonstrated in the crisis period ofMay to December 1984 (during which three floods occurred), by the absence offamine conditions which were evident after the 1974 floods. The noteworthyfactors contributing to MOF's success were (a) significant additions topublic storage capacity in LSDs over the past few years, (b) local transportimprovements through road, bridges and ferry construction programmes, (c)improvements in management, information, organization and logisticalcapacity of the MOF, (d) effective coordination of food operations betweendifferent ministries and line agencies and (e) better targeting of reliefoperations. The project's contributior to LSD construction and, to a certainextent, 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 theappointment of a research officer and an economist as required at appraisal.The planning cell has taken on broad responsibilities for planning andmonitoring the work of the MOF and for implementing its developmentactivities in general. The start-up of the monitoring cell was delayed dueto problems in staffing and non-availability of office accommodation. It waseventually set up within the office of the OGF to streamline thecompilation, processing and analysis of operational information. Under thereorganization, the cell has been strengthened, and is headed by anAdditional Director who is assisted by a Deputy and one Assistant Director.Under FRG assistance, the Directorate has procured and installed 13teleprinters at district level. In addition, FAO provides technicalassistance to help develop the Directorate's management information system.

4.23 During the project period, the monitoring cell has been largelyineffective. This in part was due to lack of an appropriate monitoringsystem. Reports submitted by the consultant appointed to assist in thisregard have not been acted upon. Other reasons for the ineffectiveness ofthe monitoring cell have been frequent personnel changes, inadequatelytrained and experienced staff and lack of motivation.

4.24 Project monitoring efforts have not been addressed by the PSC whichhas not met since April 1980. A consultant firm was appointed to develop acontinuous farmgate price monitoring system. The consultants' report has notbeen finalised by the GOB yet. Since farmgate pricing monitoring is handledby the Marketing Directorate of the Ministry of Agriculture, placing of theresponsibility with MOF did not seem appropriate. Moreover, a need existedfor the assessment of storage losses which remained the responsibility ofthe MOF but no study was proposed. Meanwhile, a grain loss assessment studystarted by the pest control consultant under the Food Security Project wasnot proceeded with when the consultant left the country on expiry of hiscontract.

Accounting and Reporting

4.25 The usual government system of accounts was followed by both PIUand PECU. This meant that separate accounts were not maintained for projectactivities. To satisfy credit conditions relevant records of expenditureswere kept to allow identification of project spending. On this basisproject accounts up to 1983/84 have been audited by the Office of theDirector General Comercial Audit. Several discrepancies were noted duringaudit. These included - moisture meters imported for the project but

is

distributed outside the project area, excessive issue of materials tocontractors, materials issued but contract neither executed nor materialsreturned, distribution of motorocycles outside the project area, delayedexecution of works allowed without penalty, payment at rates higher thanscheduled rates, paddy drying yards smaller than approved size, award ofsub-contract in violation of tender agreement and over-payments againstdefective and incomplete works.

4.26 Quarterly progress reports were submitted by PIU until March 1982and 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 explanatorynotes. It is seen that compliance has been in general, satisfactory exceptfor submission of quarterly reprts and audit reports. Quarterly reportshave not been submitted to IDA since March 1982 while audit of 1984/85accounts 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 facilitiesparticularly in the major procurement regions was pressing in the earlyyears of the project. This conclusion is supported by the fact that many ofthe godowns constructed under the project had become operational immediatelyafter completion and were used to capacity, (see paras 3.9 and 3.12 andTable 8) some exceeding the full rated capacity, and a utilization rate of124% was achieved by resorting to higher stacking. During the FY 1981 aman, 'boro and wheat and FY 1982 aus procurement season, support prices could notbe maintained because the public foodgrain storage was so overloaded thatprocurement could not be expanded sufficiently. The later years witnessed arapid expansion in grain storage capacity in the seven project districts(see Tables 9 and 10). By June 1984, total nominal storage capacity in thesedistricts rose to some 580,000 tons of which project godowns accounted for25% (145,000 tons). At appraisal, domestic procurement of foodgrains in1985/86 was proJected at 725,000 tons if it was a normal year or 1,240,000tons if it was a good year. Domestic procurement has, however, not expandedas forecast at appraisal. Only in 1980/81 a volume of over 1 M tons wasprocured, in the remaining years since appraisal, procurement was between200,000 tons to 350,000 tons (Table 1). As expected, the bulL of theprocurement came from these seven 'core' districts rising from 65% of totalprocurement in 1977/78 to 87% in 1983/84, justifying, the appropriate choiceof the project area (see Table 7). As a result, annual utilization rate fellrapidly 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 mustbe treated with caution because some of the reported data may beinaccurate as PIU was not able to supply inflow-outflow data to the PCRmission.

corroborated further by the fact that GOB's target stock level of 1.2 M tonsof grains (comprising minimum operational stock of about 500,000 to 550,000tons plus emergency stock of at least 700,000 to 750,000 tons) representsome 67% of nominal storage capacity (1.8 N tons) or 46% of effectivecapacity through 50% (2.7 M tons) higher stacking. UtiiHzation also fellbecause GOB since 1981 had started constructing substantial storage capacity(approximately 250,000 tons) under two crash programmes (see Table 9). Asmentioned in para 3.8, since appraisal, almost 81,000 tons was newlyconstructed 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 projectwere limited because the equipment provided along with suplementary itemsfinanced by other multilateral and bilateral sources were used to strengthenthe national network. The project area did not recieve any specialtreatment. Moreover, weaknesses in the key areas of staffing (see Table 11),staff training and mobility persisted for the better part of the projectperiod. Under these circumstances, physical losses of stored grains shouldhave been higher if not for the rapid turnover of the stocks due to lowprocurement and high offtake in most of the years. However, in FY 1981 andearly FY 1982, extensive grain spoilage and losses from infestation werereported when substantial quantities of grains had to be stored in sub-standard facilities or out in the open and in the godowns which weregenerally overstocked (see Table 12). Pest control and stock maintenanceoperations could not be carried out as required.

5.3 Grain losses are generally recorded in accordance with a system ofspecified permissible limits for storage and transit losses. Theseallowances are small, never greater than 1% as set out below. The systemdoes not differentiate between storage facilities of different quality, orbetween different regions and seasons of storage.

Storage Losses

Previous permissible Period Revised (1985) currentLoss 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% storageloss is permitted for each 3 months beyond one year.

5.4 Absence of hard data on the cause and extent of grain losses hasprevented precise estimation of storage losses. The monitoring study onloss assessment started by the pest control consultant under the FoodSecurity Project was not proceeded with when the consultant left the countryon expiry of his contract. Thus the lack of hard data required efforts bythe mission to collect data through interviews and field assessments basedon judgement. Based on these, physical losses of grain are estimated at2% with project and 6% without the project (appraisal estimates average4.2% savings). 1/ Field data suggests that the storage period would beabout 8 months for rice/wheat and about 4 months for paddy, the annualstock turnover around 1.7, annual average capacity utilization approximatelyi0% and composition of stored grain 50% of rice and 25% each of paddy andwneat. Based on these data, it is estimated that some 8,000 tons 2/ offoodgrains would be saved annually, compared to 11,000 tons 3/ assumed atappraisal.

Beneficiaries

5.5 Benefits accrue primarily to the GOB in the form of reduced grainstorage losses, which, in turn, correspondingly reduces dependence onimported grains, resulting in lower foreign exchange expenditure and reduceddeficits in subsidized foodgrain distribution. The project also benefitsfarmers and consumers. Additional storage in the grain producing areas andincreased operational effectiveness enabled MOF to expand domestic procure-ment, increasing competition for the farmers' produce, and hence farmgateprices. This normally benefits especially small farmers who cannot holdgrain but have to sell immediately after harvest when farmgate prices arethe lowest.

5.6 Experience has shown that the participants of GOB's Food for Workand relief feeding programmes often get the poorest quality wheat available.To the extent that the quality of wheat could be better maintained, thesegroups will benefit from higher quality foodgrain and better nutritionalstandards. 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 sectorstorage, and the aspect was not assessed at appraisal, a covenant wasincluded in the DCA for GOB to study the private sector storage andmarketing 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 utilizationx 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 regardingturnover 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 tons0.25 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 anadditional 7,000 tons in MOF storage saved through pest control in theproject 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 ingrain storage. Also some other incentive measures have been taken by thegovernment. However, the private sector still lacks confidence to play alarger role in grain storage, due to lack of a clear policy committment fromGOB to allow trade to play an Increasingly important role in grain marketingfor the years to come. More incentives are needed to stimulate privateinvestment in grain marketing facilities, at import wholesale as well as atretail level. During the implementation of the pilot paddy marketingprogramme of the project, storage need in the cooperative sector wasidentified; provisions for grain storage were introduced for cooperativesocieties in two rural development projects now- being implemented throughIDA and IFAD assistance.

Economic Re-Evaluation

5.8 Benefits. At appraisal, the estimated rate of return (ERR) for theentire project was 21% (14% for the godown, over 50% for the pest controlprogramme and 24% for the paddy drying scheme). The main quantifiablebenefit was to accrue from savings in storage losses, since the spoilage ofgrain in the project godowns was estimated to be much less than what itwould be without the project. As discussed in para 5.4, in the analysisprepared for this report, much lower savings have been calculated. Anadditional benefit considered in this report but not at appraisal wasidentified in the course of appraising the Third Foodgrain Storage Project;it consists of savings in operational costs associated with good qualitystorage such as instituted under the project (see Table 13). Benefits fromtechnical assistance and reorganization of the DOF have not beenquantified. Benefits from paddy drying and pest constrol have alsobeen excluded from analysis for reasons stated in paras. 3.15 and 5.2. Otherless direct benefits which however are beyond the scope of quantitativeappraisal include: contributions through buffer-stocking to price moderation,the resource benefits due to improved godown location, contribution to crediblesupport price purchasing, stimulus to greater production, and improved foodsecurity.

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 toit. A modified economic analysis was carried out for the rehabilitationcomponent.

5.10 Godown comDonent. Economic costs and benefit values have beencomputed at estimated wrder prices (see Table 14). Prices ofinternationally traded goods have been converted at an exchange rate of USS1* Tk26.50. 1990 border prices in 1985 constant terms for paddy, rice andwheat, derived from IBRO commodity price forecasts have been used in theanalysis 1/ (see Table 15). No distinction has been made in the prices usedfor 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 expendituresrestated 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 thefinancial wage rate. All costs and benefits are expressed in constant 1985Takas. Based on these assumptions and others detailed in para 5.4 the newestimated 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 oneestimated at appraisal is mainly due to (a) lower calculated storage loss

savings, (b) exclusion of net benefits from rehabilitation, pest control andpaddy drying components, (c) lower rice price forecast (US$ 346 fob Bangkokin 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 hasnot been separately estimated due to lack of reliable data and the smallvolume.of storage capacity involved (10,000 tons). Instead a modifiedeconomic analysis was carried out to test its cost effectiveness.

5.12 Allowing for an average capacity utilization rate of 70% andconsidering a throughput of 1.7 per year, the rehabilitation cost ofTk7.08 N 1/ covering 10,000 tons nominal capacity becomes of the order ofTk595 per ton in terms of quantity stored. When this cost per ton is spreadover 15 years using a discount rate of 12%, rehabilitation cost per ton perannum comes to about 4% of the value of produce stored, 2/ Justifyinginvestment in rehabilitation of existing facilities. If rehabilitatedgodowns are assumed to have reduced storage losses by the same amount asthe new godowns, savings would be approximately 475 tons. Adding thebenefits 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 implementationof an expanded foodgrain storage programme by the goverment to enableofficial purchases of paddy and wheat in the growing areas. Along with therapid development of minor irrigation, increased use of fertilizers,supplies of improved seeds and more effective supporting services forfarmers, it was evidently necessary to give farmers the Incentive ofreliable returns for their crops especially in the period Immediately afterharvest when market prices were habitually depressed by the pressure ofsupplies. The central activity of the project thus became the constructionof godowns for procurement in foodgrain surplus areas. An expanded storageprogramme naturally required an effective quality and pest control system toreduce physical losses of foodgrains, and an effective procurement system toprovide buying service for all who wished to sell their grain at theprocurement centres. The project formulation within this context, to which

1/ Expressed in economic terms - the financial costs Tk2.76 N of 1981/82and Tk4M09 N of 1982/83 updated to 1985 price and converted to economicvalues.

V Weighted price of Tk6,895 comprising paddy, rice and wheat.

the Bank much contributed, is therefore considered appropriate andjustified.

6.2 The project has, however, encountered several problems duringImplementation. In hindsight, it seems that some of the problems such asmodification of relief storage and reduction in rehabilitation capacity andland acquisition problems could have been taken into account moreaccurately. The relief storage component was neither considered atpreparation nor during pre-appraisal of the project. It was included duringappraisal after setting certain criteria for selection of sites. In view ofFAO's Food Security Assistance Scheme, and in the absence of proposals bythe government for relief sites, the Bank, in its first supervision missionin July 1978 itself indicated to the government that the provision of reliefstorage capacity could be used to construct godowns for procurement purposesoutside the 'core' districts. The rehabilitation programme could lot beimplemented fully as appraised as there were not enough godowns to meet thetarget of 25,000 tons within the project area.

Supervision

6.3 IDA supervisory performance wa; adequate despite the numerousproblems the project encountered. The project implementation was monitoredclosely by the Bank, drawing attention to potential difficulties andeliciting appropriate action from government agencies such as the MOf,Planning Commission and PWO. IDA fielded nine missions in the 6 1/2 yearimplementation period, 5 by staff in Washington and 4 by staff in RMB.Supervision missions made also recommendations on the organization of OOFsoperations, notably to shift responsibility for quality control from DICT tooperational managers. Reduction of the pilot drier programme was proposed byan IDA mission. IDA responded quickly to GOB requests for amendments of theCredit Agreement and has been flexible in increasing the disbursement rate,extending the closing date and keeping Credit accounts open, even more thansix months. RMB staff has been instrumental in organizing coordinationmeetings between agencies involved, thus filling up the gap caused by thenon-functioning of the Project Steering Committee. IDA responded quickly toGOB requests for amendments of the Credit Agreement.

VII. CONCLUSIONS AND LESSONS LEARNED

7.1 The project has made a valuable contribution to the development ofthe country's post harvest sub-sector. Despite the initial delays and themodifications in scope, the project has achieved its basic objective ofproviding needed grain storage facilities. These facilities have helped MOFto reduce physical losses of foodgrain and to expand its grain procurementoperations, thereby supporting GOB farm price support towards increasedproduction. The operation of the procurement system, grain quality controland pest control was only partially improved. Effective working of theseoperations is now hampered by managerial weaknesses rather than shortages ofmaterials or equipment. The results of the pilot scheme of cooperativemarketing enabled BROB to replicate the scheme in other areas. Thereorganization of the Food Directorate and other improvements in the workingof the MOF has enhanced the effectiveness of GOB's foodgrain operations, asevidenced by the absence of famine conditions during the crisis period ofmid to late 1984 compared to the famine conditions which were evident afterthe 1974 floods.

24

7.2 Major lessons which can be learned from the project are that it isdesirable to:

a) give close attention to acquisition of sites in the projectpreparation and appraisal process because land acquisition is along and difficult exercise in Bangladesh;

b) consider that, although the Dacca type godown chosen in the projectis sturdy and functional, its costs are high compared to storageconstructions in other countries of the Region. For future storageprogrames alternative designs should also be considered and/or theDacca type design, which dates back from several decades, should becarefully reviewed aiming at reducing construction costs;

c) try out artificial drying of paddy first at a small scale to testits acceptability to farmers and suitability of equipment beforesetting up a pilot operation at drying sites;

d) plan and develop grain storage sites for a complete package ofgodowns and ancillaries, including concrete yards for receiving,sun drying and conditioning of procured grain;

e) provide suitable project management and engineering capability inthe Project Implementation Unit within the implementing agency andtake care of continuity of staff;

f) arrange that an engineering consultant, to assist in monitoringand supervising the construction programme, reports to the projectimplementing agency; he should not be contracted by and beresponsible to the agency that is executing the constructionprogramme;

g) identify rehabilitation programmes for existing storage clearly atappraisal;

h) obtain a specific commitment from the borrower govermnent in theCredit Agreement to provide annual budgetary provisions for regularmaintenance works on project facilities;

i) provide the Food Directorate with annual budget for operationalmanagers to undertake minor repairs and maintenance;

J) attach to the Project Implementation Unit capable accounting staffto keep project accounts and to prepare and assist other agenciesinvolved in the timely preparation of disbursement claims;

k) Include a covenant in the OCA requiring the Borrower during thewhole project to consult with IDA on other storage program_es thatcould affect the utilization of project facilities; and

1) include under a storage project a study to assess and evaluatestorage losses in the project storage and in the facilities to bereplaced.

SECON1D FOOGR7AIN iTo.ict eROJECU(Credit 787-SD)..

toodara3. ProDuctipon atn ProtL*3mulIo00O 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.-UAma.. 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 8.150lin,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 3.19rtb@etgtet 90 100 115 212 255 344 486 810 1.o75 952 1.078 1.195 1.300 1.360it. 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.500Not 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 14.8Sutouvorntment-Procuremnent _7 71 128 415 314 5SU 355 346 1.017 2i8 192 266 344 Jg

, cutuoment Ns a s ofnot 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.tU41l'gucurement (domsttic) - 71 128 415 314 SSU 355 349 1.017 299 192 tbb J'44 3daItoport4 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 2b

6 34 2,641 1.917 2.604 2.092 3.296 2.55 2.763 2t.661 2.024 J.b.6: 2.966t0osses 184 96 148 14b 68 166 87 115 104 62 go 92lusiae 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_ ChnvExoanditura Cateaory 3njt 9usntj tw Jk_# USS00 ni:rf TkI uISftflD Ou-ntity T5 MbasiA &kLISIILand 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 36may rvices

Equpipent & vehicles - _ 96.6s 6,244.4 - 9.50 w06.3 (90) (921technicol assistance M /M 120 l/ 23.12 1.49Y.6 109 _4 12.63 574.4 (45) I0b1training

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 tcaIndividual 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 9and 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 PercentDistrict 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 25Sub-total Project 1 UTCore 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 15CSD - 389 389Silos - 227 227Terorary Storage 17 17Total 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. 100lUmotorcycle 20 20 40Moisture motot 2S( 250°teepaul IIt 200 200Pocket calculauts - 70 70Table calculators to IOBank locks 1,320 1,32U

ft.t f-atrial

Vehicle 9 14"and sprayer so S 1Precision bulanc- 4 4Sieves 15 15Gas peoo shoot 200 200 Lab, type rice mill 4 4 1Sample divider T 70Lab. type flour mill -2 2Air oven I IBroke,, rIlt s*parator ABrain sample pan 350 3boGrain pruver - 350 350Measuring tape 25 2lirst-mid kit 70 25Sac:k teseLk trolley too 100Physical balanc- 70 77Power sprayer so so IO(0Protective 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 ProfitKSS Dart. participated Purchased distribuonuTK

(md) UCCA BnusServ. tFee 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 46.41services (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 9.50IUbS6000) - 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 - 12.0SS 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 obe 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.Z4turA

(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.b91962/33 - Tk24.50. 1953/84 - Tk25.20 guut 1964/65 - Th26.5Ot date for Item 2 and 3 from PECU wh"Iil$0 otIla frum auditreports 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 b9 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 procurementa 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 or1.240.000 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 CapacityProgramme 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 500tons 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, eachConstruction Prog. os 640 tons

capacitydropped.

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 TSUalboiti 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 JtilSwCapa 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 Is I D i h S s 4 9 is a i a i U f lb 7N0 HI 113 Is 4 1 V1 169 n to I III I 15 in as I III UMI x it 9 II S a 92 31 i at n3 E n 6 I 1 n i so 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 awadi~ 1 27 a 1 U It U 16 I 13 U a P U 4a 6to I a a i S a a m u * D a a a u i t m P9siap in P In U III 41 sit S to 9 IV 1 tIt as IV U t II I l34w so M a0 a 64 61 64 is 64 Is a5 a a1 a a U a it afil 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 Xt_ 16 I U U VA 41 u m 17 V4 4 6 4 41tt 1 104c" a v a is 47 a 0 14 is 14, is " Iill- in 34 114 II I a IV 9 IV W .U 45 IV U IV x IV a1 III 11e1i a p P a a i e J a a a * 4 a 4 so a P a Uie 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 PustNo. af It f.t Staff ln QI LL-L&lo

lmn&j.InnPstnualItic-tion

Technical tnseg-ctuo54 46 A/.*Sc. OuQality contro

rechicCal Chiet Inspoctor12 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 t7mamas .. 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 StoraaeWith ProJect Without ProJect

Rent 14,58031/ 41

Wages: - handling and 395 434storage

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 arestock turnover 1.7, scorage period Rice/Wheat 8 months, Paddy 4months, 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 1,000ads capacity.

O Unskilled labour 75% of financial cost.

S/ TkO.10 for ad, labour cost estimated to be 10% higher for rentedstorage owing to small capacity and scattered location.

5/ Two guards required for LSO with 4,000 tons at a financial cost ofTk6,400/man-year. Due to scattered location of rented storage, 3guards would be required.

6/ Estimated at 1.5% of civil works cost (Tk623.97 million) for newgodowns, 5% of rental fees for rented storage.

7/ Includes preventive spraying with Malathion; three fuaigationsfor 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"dfortign exchange expenditure - 1.00, all others - 0.30 SCF. Civil works assumed to consiba ut 60S met-,iolsand 40S lel.ouart of material local 25S # imported 75S. of l-bour; *05 unskilled and 20S skilled. Adjustd ftorduties 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 156dollars 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)

31Plus local costs between port and market 520 520

Price in urban market 9,610 6,801

Minus local costs betwetn market and 1,410 1,129godaown 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 400between mill and godown If (Tk/ton)

Price of 1.538 tons of paddy (which yield 7,9301 ton of rice at the milling recovery rateof 65%).

Price of paddy at godown 5,156

1W World Bank Cormodity Price Forecast, January 1985 adjusted byManufacturing Unit Value Index to obtain price in 1985 constant dollars.

2/ Based on relationship between historical input unit value andprices 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 sInvestment Savings in 3/ Reduced 4/ TotiF- Net

Year Cost 3/ Operating Grain Loss Benefits BenefitsCosts

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 wouldstart 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.

±/ Grain loss savings of 4% (without project of 6% and with project of 2%)and using the following assumptions - annual average capacity utilizationof 70%; stock turnover 1.7; storage period rice/wheat 8 months; paddy 4onths 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 economicprices.

5/ Replacement of equipment and vehicles every 10 years at Tk 7.6 M.

BANGLADESHSECOND 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 ..........INfIN 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 tNtmiU £ AMNOW MBIL INGCW gy g

PAT PU_CUA LIII g *jr i|IMIII? ~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

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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 HSECOND FOODGRAIN STORAGE PROJECT CcmeT 7M-1D)

LOCATION OF PROJECT LOCAL STORAGEDEPOTS

O U6INA.PURt" Pt'. RANPUR 4.. 26... Is..t49 :wr la too$

'-- 35 75. . ......TOTAL39 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 16 149 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 DI35~~~~~~~~~~~~~~~~~~~~~~~~~~~'

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% 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 (Credit381-BD).

2) Foodgrain Storage Project Review Paper, USAID Dhaka October 1976.

3) Bangladesh Godown Rehabilitation Survey 1 Apr11 - 21 May 1976 byJ.A. M4cFarlane, S.G. Millar and A.D. Gracey, Tropical ProductsInstitute, U.K.

4) Proposal for Reorganization of the Directorate of Inspection,Control and Training July 1981, by J.A. Conway, Grain Storage/PestControl Consultant, IDA Second Foodgrain Storage Project.

5) Report on the Study of Rural Storage system in Bangladesh January1982, by Atrur Rahman, BIDS, Dhaka.

6) Engineering Consultants Reports - Various issues.

7) Feasibility study for setting up of a Food Corporation inBangladesh, December 1979 in 2 volumes - FAO.

8) Mukta Marketing Project - An evaluation leport, September 1980, forthe Ministry of Local Government Rural D ,velopment and Cooperativesby 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 theFood Directorate, Preliminary Report - December 1981 ay EurekaConsultants, Dhaka.

10) A review of the current position relating to information systemsfor the operation of the Food Directorate and Ministry of Food byManagement Structure and Systems PVT Ltd, Bombay.

11) Study of Rehabilitation and Construction of Foodgrain StorageStructures January 1976 by 0. Pfost, FAO/OSRO Consultant.

12) Study on Information System of Monitoring Cell in the FoodDirectorate (Information System and Administration Manual) June1982 by Eureka Consultants, Dhaka.

13) Study on a Teleprinter Communication System May 1981 by Prof. Dr.Lng M. Anwarul Azim, Bangladesh University of Engineering andTechnology.

14) Rice in Bangladesh - an empirical analysis of farm level foodlosses in five post production operations by A.K. Fazlulhuq andMartin Greeley, Institute of Development Studies, Ohaka - Paperpresented at the Post-harvest workshop held in Malaysia in January29 - 31, 1980.

- 46 - Appendix 1Page 2

15) Strengthening of the Directorate of Inspection Control and Trainingin the Ministry of Food, Bangladesh 1985 FAO - Food SecurityProJect (BGD/020/AUL).

16) Strengthening of the Directorate of Inspection, Control andTraining "In the Ministry of Food, Bangladesh - 1985, FAO - FoodSecurity 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 ProjectImplementation Unit (PIU) which shall be headedby the Director General of Food assisted by aDeputy Director.

3.03. The Borrower shall cause its Directorate Accomplished.General of Food to establish, not later thanOctober 31. 1978 or such other date as shall beagreed with the Assoriation, and thereaftermaintain a monitoring cell (a) which shall beheaded by a Deputy or Assitant Director.

3.04. The Borrower shall establish and main- Accomplished.ta1n within PWD a Project Engineering andConstruction Unit (PECU) (a) which shall beheaded by a Project Construction Manager ofthe rank of either Additional or Deputy ChiefEngineer.

3.05. The Borrower shall establish and main- PSC established.tam -a Project Steering Committee (PSC) (a) No meetings haswhich shall be headed by the Secretary of the been convenedBorrower's Ministry of Food. since April 1980.

3.06. The Borrower shall, not later than Accomplished.October 31. 1978 or such other date as shallbe agreed with the Association, appoint aResearch Officer and an Economist to strengthenthe Planning Cell of the Ministry of Food.

3.07. The Borrower shall employ consultants and Accomplished.experts (in the areas of Engineering, PestControl Training and Paddy Drying). The consul-tants to assist the Borrower in carrying outPart F of the Project shall be employed notlater than June 30, 1979.

3.09. (h) (1i) Government to furnish to the IDA has notAssociation on a quarterly basis, reports on received quart-the progress of the project. erly progress

reports sinceMarch 1982.

- 48 - Appendix 2Page 2

3.11. Until December 31, 1981, the Borrower Fulfilled.shall, before undertaking the construction ofany new godowns for foodgrain storage in theProject Area (other than those included in theProject): (a) ensure that Such constructionshall not adversely affect the utilization ofthe facilities constructed under the Projectand (b) inform the Association of any suchconstruction.

3.12. The Borrower shall cause the golowns Fulfilled.influded in Parts A and H of the Project to bebuilt (a) in accordance with designs andconstruction standards acceptable to theAssociation and (b) at such locations, selectedin most cases because of the prior successfuloperation of temporary foodgrain purchasecentres.

3.13. The Borrower shall cause all usable Covenent met.existing pest control equipment presently ownedby the Borrower's Ministry of Food in theProject Area to be transferred to pest controlsquads of the Borrower's Ministry of Foodoperating outside the Project Area when theequipment to be provided under Part C of theProject shall come into operation.

3.14. The Borrower shall select one day of the Accomplished.week for the purchase by the Borrower's Ministryof Food of foodgrain provided by each UCCA parti-cipating in the pilot marketing program referredto in Part 0 of the Project.

3.15. The Borrower shall: (a) not later than Waived In viewOctober 31, 1978 or such other date as shall of similar studybe agreed with the Association (i) carry out by FAO.a review of the field administration of theBorrower's Ministry of Food and (ii) inform theAssociation of the findings of such review; and(b) thereafter, implement such measures as shallbe required to increase the effectiveness of thesaid field administration.

3.17. The Borrower shall take such measures as AGO system hasshall be required, from time to time, to been abolished.increase the competition among foodgraintraders at the farmgate level.

3.18. For the purpose of its domestic food- Procurementgrain procurement program, the Borrower shall prices revisedset foodgrain procurement prices at levels which periodically.shall provide sufficient incentive for growersto increase foodgrain production through agreater use of fertilizers, high-yielding seedvarieties and irrigation.

- 49 - Appendix 2Page 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 withthose set forth in Schedule 5 to this Agree-ment, a review of its administrative proceduresused to make payments for all foodgrainsdomestically procured by its Ministry of Foodand (ii) inform the Assciation of the findingsof measures as shall be required to improvesuch procedures.

3.20. Without any limitation or restriction Accomplished.upon its obligations under Section 3.01 of thisAgreement and except as the Association shallotherwise agree, the Borrower shall:

(a) Establish and maintain, in a commercialbank, two Project Funds, one referred to asthe PIU Project Fund to be administered bythe Director General of Food, and the otherreferred to as the PECU Project Fund to beadministered by PECU's Project ConstructionManager.

3.21. The Borrower shall, not later than Proposal sentDecember 31, 1979, or such other date as ahall to IDA, request-be agreed with the Association, (a) carry out a ing financingstudy of the private sector storage and market- under TA credit.ing system in the Borrower's territory with aview to identifying its operational constraintsand investments needs; and (b) inform theAssociation 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 PECUand PIU.

4

BAP SECTION

Ina

i

r~~~~~~~~~~~S 40' 4194

BANGLADESH

In. 6i x SECOND FOOD GRAIN STORAGE PROJECTI N D [ A LOCATION OF EXISTING AND PROPOSED GODOWN SITES

,ve , / y : @ !\1 %s5 )w1. * Agreed locations for new godown sitest 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

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3AGADS O,A sO 2A0l 30*K0w BURMA

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INDIA~~~~~~~~~~~~~~~~~~~~~~~~K

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BANGLADESH~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~RAGMT

0 I4 2030jAL C0 3T

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BANGLADESH ~ ~ ~ ~ ~ Ao.I.BURM

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SRI "N"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~t