Water Supply and Sanitation Sector Programme Support (WSSPS) Phase II BANGLADESH WATER SUPPLY AND SANITATION COMPONENT HYSAWA PROJECT

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1 Government of Bangladesh Ministry of Foreign Affairs, Denmark Water Supply and Sanitation Sector Programme Support (WSSPS) Phase II BANGLADESH WATER SUPPLY AND SANITATION COMPONENT HYSAWA PROJECT Project Document Ministry of Local Government, Rural Development & Cooperatives Ref. No. 104.Bang October 2005

2 COVER PAGE Country: Bangladesh Programme Title Water Supply and Sanitation Sector Programme support Project Title Hygiene, Sanitation and Water Supply (HYSAWA) Project National Agency Local Government Division (LGD), MoLGRD&C Duration: 5 years Starting date: December 2005 Overall Budget: DKK 265 Million (BDT 2654 Million) Danida DKK 141 Million (BDT 1405 Million) Government of Bangladesh: DKK 31 Million (BDT 306 Million) Communities: DKK 94 Million (BDT 943 Million) The HYSAWA Project is part of the Water Supply and Sanitation (WSS) Component under WSSPS II, and consists of the Local Government Support Unit (LGSU) and the HYSAWA Fund. The LGSU provides capacity building to Local Government Institutions for implementation of Hygiene, Sanitation and Water services. The HYSAWA Fund will be established as a financial institution under the Company Law which, on application, can provide funding to eligible Union Parishads (UPs) for the implementation of Hygiene, Sanitation and Water services. The objective of the Project is to develop and demonstrate sustainable hygiene, sanitation and water supply service delivery through local governments and in consultation with local people. The immediate objectives are: To improve hygiene behaviour/ practices To promote community-led total sanitation To increase coverage of safe water supply services To strengthen the capacity of Government, Local Government Institutions (LGIs) and non-government stakeholders at all levels to play the roles required to achieve the above three immedi-ate objectives. To promote greater devolution of administrative and financial authority to local government insti-tutions in regard to hygiene, sanitation and water supply. The project will support improved hygiene, sanitation and water in 200 UPs in Rajshahi, Naogaon and Nawabganj Districts in the North West of Bangladesh and to 146 UPs in Patuakhali, Barguna, Jhalokahti, Perojpur, Barisal, Noakhali, Feni and Laksmipur Districts in the Coastal Belt. The Project will also provide funding to 350 UPs capacitated through NGO Forum in various districts around the country. Some 1.7 million people are expected to benefit from improved WSS facilities under the HYSAWA Project. On behalf of the Government of Bangladesh Date On behalf of the Embassy of Denmark, Dhaka: Date i

3 TABLE OF CONTENT LIST OF ABBREVIATIONS... III MAP OF BANGLADESH... V EXECUTIVE SUMMARY... VI 1 INTRODUCTION SECTOR CONTEXT PROJECT BACKGROUND DESCRIPTION OF THE PROJECT OBJECTIVES STRATEGIES OUTPUTS ACTIVITIES INPUTS BUDGET MANAGEMENT AND ORGANISATION INSTITUTIONAL FRAMEWORK OF LGD AND SPS PROJECT ORGANISATIONAL SET UP AND MANAGEMENT FINANCIAL MANAGEMENT AND PROCUREMENT PROJECT FUND MANAGEMENT PROJECT ACCOUNTING PRINCIPLES AND PROCEDURES FOR REPORTING PROJECT PROCUREMENT PROJECT AUDITING MONITORING, REPORTING, REVIEWS AND EVALUATION MONITORING AND REPORTING MONITORING INDICATORS REVIEWS AND EVALUATION ASSUMPTIONS, RISKS AND PRECONDITIONS PROJECT IMPLEMENTATION PLAN ANNEX 1 DETAILED BUDGET ANNEX 2 ORGANISATIONAL SET-UP OF WSSPS II ANNEX 3 IMPLEMENTATION GUIDELINES ANNEX 4 ROLES AND RESPONSIBILITIES AND TOR S ANNEX 5 ACTION PLAN FOR SETTING UP HYSAWA FUND ii

4 LIST OF ABBREVIATIONS ADP Annual Development Plan AIDS Acquired Immune Deficiency Syndrome BDT Bangladesh Taka (1 BDT = 0.1 DKK) BMDF Bangladesh Municipal Development Fund BRAC Bangladesh Rural Advancement Committee CBO Community-based Organisation CCU Central Coordination Unit CD/VAT Customs Duty/ Value Added Tax CHT Chittagong Hill Tracts CLTS Community Led Total Sanitation CMP Community Management Promotion Danida Danish International Development Assistance DFID Department for International Development (United Kingdom) DKK Danish Kroner (1 DKK = 10 BDT) DPHE Department of Public Health Engineering DSP Deep Set Pump EE Executive Engineer FMO Fund Management Office GoB Government of the People s Republic of Bangladesh HIV Human Immune Deficiency Virus HYSAWA Hygiene Promotion, Sanitation and Water Supply IEC Information, Education and Communication ITN International Training Network (BUET) LGD Local Government Division LGED Local Government Engineering Department LGI Local Government Institution LGSU Local Government Support Unit MDG Millennium Development Goals MIS Management Information System NFUP National Forum for Union Parishads NPD National Programme Director PD Project Director NILG National Institute of Local Government NGO Non-government Organisation O&M Operation and Maintenance PIG Project Implementation Guidelines PRSP Poverty Reduction Strategy Paper PSC Programme Steering Committee RDA Rural Development Academy SAE Sub-Assistant Engineer SO Support Organisation SPS Sector Programme Support SPS-CG Sector Programme Support Coordination Group TA Technical Assistance ToR Terms of Reference iii

5 ToT UDCC UNDP UNICEF UNO UP UPDF VDF WSS WSSPS Training of Trainers Upazila Development Coordination Committee United Nations Development Programme United Nations Children Fund Upazila Nirbahi Officer Union Parishad Union Parishad Development Fund Village Development Forum Water Supply and Sanitation Water & Sanitation Sector Programme Support iv

6 WSSPS Phase II, HYSAWA Project MAP OF BANGLADESH PANCHAGAR W SSPS - II Programme Area THAKURGAON NILPHAMARI LALMONIRH AT N KURIGRAM DIN AJPUR RANGPUR IN D IA GAIBANDHA JOYPURHAT SHERPU R NAOGAON SUN AMGAN J SYLHET BOGRA CHAPAI NAWABGANJ JAMALPUR NETRAKONA MYMENSINGH MOULVI BAZAR RAJSHAH I SIRAJGANJ TAN GAIL NAT ORE KISH OREGANJ HABIGANJ IN D IA PABNA GAZIPUR NARSIN GDI KUSHTIA MEHERPUR MANIKGANJ DHAKA BRAHMANBARIA NARAYANGANJ RAJBARI CH UADAN GA IN D IA JH ENAIDAH MUNSHIGANJ FARIDPUR MAGURA COMILLA SHARIATPUR CH ANDPUR KH AGRACHHARI MADARIPUR NARAIL JESSORE GOPALGANJ LAKSMIPUR FENI BARISAL NOAKHALI RANGAMATI JHALAKATI SATKHIRA BAGERH AT KH ULNA CH ITTAGONG BHOLA PIROJPUR PATUAKHALI W SS Component - HYSAW A Fund Project Legend S u n d a r b a n Union under the NGO-F. Project Prog ram me A rea W S S & CHT H YS A W A Rive r/kh al International Boundary District Boundary Costal Boundary BORGUNA Bay of B engal Bangladesh Map W SS Component - W SS Coastal Belt Project - HYSAW A F und Project Kilo me ters Scale 1 : 2,880,000 Chittagong Hill Tracts - HYSAW A Fund Project COX'S BAZAR BANDARBAN MYANMA R v

7 EXECUTIVE SUMMARY Towards the end of the last millennium the average coverage for access to drinking water for the rural population in Bangladesh was reported to be as high as 97%. However, this figure did not reflect the fact that there are still many under and un-served areas in the country. Neither did it take account of the arsenic contamination in groundwater which has affected about 25% of the tube-wells. There are many underserved areas particularly in the coastal belt districts and in the North-Western Districts where the relatively inexpensive shallow tube-wells are not feasible and expensive deep tube-wells technologies are required. The areas where the poorer sections of the community live are often underserved because of their low ability to pay for this type of expensive technologies. Even where water supply coverage is high, this has not necessarily also resulted into substantial improvements in public health. Improper hygiene practices and low sanitation coverage are the prime factors for the poor public health conditions. While Bangladesh has gained itself a good reputation with regard to the active role played by individual households and private sector in the provision of rural water supply, Government and donor-funded WSS programmes are still to a very large extend implemented by centrally placed Government Agencies such as the Department of Public heath Engineering (DPHE). The existing centralised service delivery system is seen as a bottleneck for achieving effective and sustainable services to in particular those who cannot (fully) afford to pay for the WSS facilities or services themselves. The development objective of the HYSAWA Project is to develop and demonstrate sustainable hygiene, sanitation and water supply service delivery through local governments and in consultation with local people. The HYSAWA Project is part of the Water Supply and Sanitation (WSS) Component of the Danida supported Water and Sanitation Sector Programme Support Phase II (WSSPS II). The Project will comprise of two distinct parts, i.e., a HYSAWA Fund and a Local Government Support Unit (LGSU). The HYSAWA Fund will be established as an independent financial institution under the Ministry of Local Government, Rural Development and Cooperatives. The Fund will receive funds from the Government of Bangladesh (GoB) and Danida and may, upon receiving formal proposals and/or applications from eligible Local Government Institutions (LGIs) and subject to certain conditions, provide grants to these LGIs to implement locally developed, community-based, hygiene, sanitation and water service programmes. The Local Government Support Unit (LGSU) will be established within the Local Government Division (LGD)/Department of Public Health Engineering (DPHE) to provide capacity building inputs to the LGIs to prepare these for accessing the funding opportunities from the HYSAWA Fund. In a bottom-up planning process, the communities will plan their own projects for hygiene, sanitation and water supply interventions according to their need and affordability. They will submit the community schemes to the respective UPs for implementation. The HYSAWA Project will facilitate the establishment of necessary institutional arrangements vi

8 within the government institutions, and engage private sector management/engineering firms and NGOs, to provide capacity support to the UPs. Cross cutting issues like human rights, gender, culture and development and transparency will be in-built in the scheme preparation processes and be mainstreamed throughout all stages of implementation. The Project will support the development and demonstration of a demand driven and decentralised service delivery mechanisms in three different geographical areas - (i) three districts with about 200 Unions in north-western region 1, (ii) 146 Unions in coastal belt districts 2 which are not covered by the Coastal Belt Project, and (iii) 350 Unions that will receive capacity support through NGO Forum from the NGO and Civil Society Networking Project under the WSSPS II. Once the delivery model is developed and duly tested, it can also be used for other public services like rural infrastructure, primary health care and mass education. The model is based on permanent government structures and the prevailing capacities of NGOs and private sector; it can easily be scaled up for undertaking large-scale decentralised investment programmes. The immediate objectives of the programme are the same as for the WSSPS II as a whole: To improve hygiene behaviour /practices To promote community-led total sanitation To increase coverage of safe water supply services To strengthen the capacity of Government, Local Government Institutions (LGIs) and nongovernment stakeholders at all levels to play the roles required to achieve the above three objectives. To promote greater devolution of administrative and financial authority to local government institutions in regard to hygiene, sanitation and water supply. The objectives will be achieved through outputs delivered through demand-driven activities carried out with financial assistance from the HYSAWA Fund as well as through more supply-driven activities supported through the Local Government Support Unit. Demand-driven activities supported with funding by the HYSAWA Fund will produce the following specific outputs:- Improved and sustainable hygiene behaviour/practise achieved in the participating communities in the NW and Coastal Belt Districts. Improved access to sanitation facilities and its proper use achieved in the participating communities in the NW and Coastal Belt Districts. Access to safe water source and safe water use increased in the participating communities in the NW, Coastal Belt Districts and NGO-F Unions. Technical and management capacities of LGIs increased through support from DPHE, NILG and HYSAWA FMO. The outputs produced by the more supply driven activities supported through the LGSU will be as follows:- 1 Rajshahi, Naogaon and Nawabganj Districts 2 Patuakhali, Barguna, Jhalokahti, Perojpur, Barisal, Noakhali, Feni and Laksmipur Districts vii

9 Capacities of 200 UPs in NW Districts and 146 UPs in Coastal Belt Districts developed to support community to formulate schemes, appraise them and manage their implementation Technical, management and facilitating capacities of DPHE, other government agencies and private sector increased. Capacity of Government agencies at central and district levels developed to respond to demand driven decentralised service delivery. The project is funded jointly by GoB, the Communities, and Danida as shown in Table 1. HYSAWA Project Budget (amounts in 1000 DKK) Total Danida GoB Com. Cont. A.1 HYSAWA Fund - 3 NW Districts 124,486 56,649 14,174 53,663 Obj.1 To improve hygiene behaviours/practices 9,692 7,753 1,938 Obj.2 To promote community-led total sanitation 50,411 9,132 2,283 38,996 Obj.3 To increase the coverage of safe water supply services 46,162 25,196 6,299 14,667 Obj.4 To strengthen the capacity of government, local government 18,222 14,568 3,654 institutions and non-government stakeholders at all levels A.2 HYSAWA Fund - Coastal Belt Districts 88,512 40,516 9,333 38,663 Obj.1 To improve hygiene behaviours/practices 7,508 6,006 1,502 Obj.2 To promote community-led total sanitation 38,455 4,852 1,213 32,390 Obj.3 To increase the coverage of safe water supply services 34,368 22,476 5,619 6,273 Obj.4 To strengthen the capacity of government, local government 8,182 7, institutions and non-government stakeholders at all levels A.3 HYSAWA Fund - NGO-F 9,800 6,272 1,568 1,960 Obj.3 To increase the coverage of safe water supply services 9,800 6,272 1,568 1,960 B. LG Support Unit 36,159 30,606 5,553 Obj.4 Obj.5 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels To promote greater devolution of administrative and financial authority to local government institutions in regard to Hygiene, Sanitation and Water Supply 27,081 24,581 2,500 9,078 6,025 3,053 Total 258, ,043 30,628 94,286 Contingencies 5 % of Danida Budget excluding TA 6,473 6,473 Total 265, ,517 30,628 94,286 Table 1: Total HYSAWA Project Budget Project performance will be reviewed during Joint Annual Sector Reviews. The Project may also be subject to technical or thematic reviews. The first formal review is expected to take place one year after start of the Project, and will focus on community schemes planning processes, funding mechanisms, and the institutional arrangements. The implementation of the HYSAWA Project will be driven by demand from the UPs, and, although the proposed delivery model takes into account some of the lessons learnt in similar local government support projects, flexibility in the timing and implementation will be required in terms of budgeting and disbursements. Successful implementation of the HYSAWA Project is furthermore based on the assumption that the decentralisation process continues in Bangladesh; DPHE and other relevant line agencies at different levels will cooperate actively in the project activities; and the UPs will develop the necessary capacity to identify, plan and administer the implementation at local level. Assumption is further that LGD will arrange issuance of necessary Government Orders to facilitate and direct the establishment of the envisaged institutional arrangement between UPs and various government agencies like DPHE, Health Department and the Upazila administrative units. viii

10 1 INTRODUCTION 1.1 Sector Context Bangladesh has achieved a remarkable success in providing access to drinking water for its rural population and by the end of the last millennium nearly 97% of the people were believed to be served by about 11 million hand tube-wells 3. This success, to a large extent, was attributed to the simple, robust, low cost and widely available shallow tube-well technology used in a vast majority of the rural areas. Moreover, most tube-wells (80-85%) were actually installed by individual households themselves with services from the from the private sector 4. In these shallow tube-well areas there is about 1 tube-well for every 20 people. However, the above high coverage figure does reflect the fact that many areas within the country are still under or un-served, the latter mainly for three reasons: First, arsenic contamination in groundwater (i.e., beyond the national permissible limit of 0.05 mg/l) is estimated to have affected some 25% of all tube-wells. This has brought down the country s rural gross coverage water supply coverage to about 74% 5. Second, the inexpensive shallow tube-well technologies are not effective for hydrogeological reasons in mainly two areas of Bangladesh: a) the coastal belt areas where expensive deep tube-well technologies are required to void the shallow, saline, aquifers, and b) the north-west region where expensive Deep Set Pump (DSP) technologies are required to tap water from aquifers with low water table. In both the areas, because of the high cost of technologies, the contribution by the private sector is minimal and people mostly use public tube-wells. In average, one deep tubewell presently serves about 93 people and one DSP tube-well about 188 people. This compared to one shallow tube-well serving only 20 people. The third reason is social inequities. Though there are high gross average coverage in most of the districts, there are many pockets, mostly of poor and disadvantaged sections of the community who do not have access safe drinking water. In spite of a relative high gross coverage of water supply in rural areas, this has, thus far, also not resulted in a substantial improvement of health. Mortality rates of infants and children under five years are 66 and 94 deaths per 1,000 live births respectively 6. Waterrelated diseases still account for the majority of the deaths. Poor hygiene and sanitation conditions in Bangladesh is among others reflected in the following facts: (i) Not all the houses use latrines. Rural sanitation coverage by any type of latrine (except hanging latrines) is only 53 %. When considering sanitary latrines only, the 3 DPHE Year Book, Reports from BAMWSP arsenic screening programme 5 Risk assessment of Arsenic Mitigation Option, 2004 by APSU, ITN-Bangladesh 6 Preliminary report of Bangladesh Demographic and Health Survey, September 2004 by NIPORT 1

11 coverage is only 29%. The remaining 47% practice open defecation or use hanging unhygienic latrines 7, (ii) Poor hygiene practices are still prevalent in the rural areas (e.g., only 43 % wash their hands after defecation with soap 8, (iii) Although ground water is believed to be safe in terms of bacteriological contamination, a recent study showed that 29% of the shallow tube-wells are contaminated with bacteria 9, mainly because of poor maintenance of the tube-well surroundings. 1.2 Project Background The Government of Denmark through Danida has provided assistance since 1972 to the Government of Bangladesh (GoB) in the Water Supply and Sanitation (WSS) sector. This technical and financial support was channelled through various agencies and projects. Since June 1999, Danida supported the sector in a more comprehensive way through the first phase of the Water Supply and Sanitation Sector Programme Support (WSSPS I). A Second Phase, WSSPS II, will be implemented for a further five-year period starting from December WSSPS II will have three Components: the Policy Support Component, the WSS Component and the Sector Capacity Building Component. The latter two Components are again divided into Projects (see Box 1.1). In addition, the WSSPS II will support a HYSAWA Project in the Chittagong Hill Tracts (CHT). Under the WSS Component, one of the projects is the present Hygiene Promotion, Sanitation and Water Supply Project (HYSAWA Project). The HYSAWA Project will facilitate and promote Union Parishad (UP) based investments focusing on the poor, un-served and under-served areas. Funding for interventions will be channelled through a dedicated HY- SAWA Fund. The HYSAWA Project is expected to contribute to all the WSSPS II immediate objectives. Since the proposed approach is be relatively new for a large scale investment in Bangladesh, a feasibility study was carried out during early The feasibility study ascertained that direct funding to the Local Government Institutions (LGIs) i.e. Box 1.1: Water Supply and Sanitation Sector Programme Support, Phase II (WSSPS-II) Long-term Objective To contribute to poverty reduction through improved public health and sustainable environment. Immediate Objectives To improve hygiene behaviour /practices To promote community-led total sanitation To increase coverage of safe water supply services To strengthen the capacity of Government, Local Government Institutions (LGIs) and non-government stakeholders at all levels to play the roles required to achieve the above three immediate objectives. To promote greater devolution of administrative and financial authority to LGIs in regard to hygiene, sanitation and water supply. WSSPS II Components and Projects Sector Policy Support Component WSS Component consisting of: WSS Coastal Belt Project HYSAWA Fund Project Chittagong Hill Tracts HYSAWA Fund Project Sector Capacity Building Component consisting of: Local Government Institutions (LGIs) Capacity Building Project NGO and Civil Society Networking Project Training Networking Project 7 National Sanitation Survey, Unicef MIC 9 Risk assessment of Arsenic Mitigation Option, 2004 by APSU, ITN-Bangladesh 2

12 the UPs, from the central level is feasible. It identified the key areas of intervention, gested arrangements for service delivery, and prioritized a list of districts in the Northwestern part of the country. A joint Bangladesh-Danish Governments WSSPS II Appraisal mission in April 2005 recommended a stronger focus on WSS implementation activities. It also recommended that the remaining 146 Unions in the eight coastal belt districts, i.e., those that were not covered under the Phase I WSS Coastal Belt Project, should be included under the HY- SAWA Project. To further increase the emphasis on WSS implementation, it was eventually also decided that the HYSAWA Fund would also provide funding support to WSS services in the 350 Unions which will receive capacity building support through the NGO and Civil Society Networking Project. The intervention in these areas will follow similar modalities as established in the HYSAWA Fund. The implementation modalities of the HYSAWA Project are prepared according to the findings of the Feasibility Study Report while the selection of the districts is based on the recommendations of the Feasibility Study as well as the recommendations of the Joint Appraisal Mission. 3

13 2 DESCRIPTION OF THE PROJECT The ultimate goal of the Project is to contribute to the Bangladesh Government s policy to reduce poverty through improved and sustainable public health, create a sustainable environment, and to reach the Millennium Developments Goals (MDG) for water and sanitation. The development objective of the Project is to develop and demonstrate sustainable hygiene, sanitation and water supply service delivery through local government in consultation with local people. The HYSAWA Project will consist of two distinct parts: the HYSAWA Fund and the Local Government Support Unit (LGSU). The HYSAWA Fund will finance eligible and applying UPs directly to implement WSS schemes, and is the main focus of the project. The LGSU will be established to provide necessary capacity building support to the UPs so that they can access financing opportunities from the HYSAWA Fund and implement the WSS schemes effectively. The HYSAWA Project will establish a dedicated HYSAWA Fund as a financial institution which will receive funds from GoB and Danida. The HYSAWA Fund will be an autonomous body established under the Companies Act of 1994 and be guided by a Governing Board chaired by the Secretary, LGD. A HYSAWA Fund Management Office (FMO) will be set up to facilitate transparent and accountable administration of the Fund. The HYSAWA Fund is envisaged to be a long-term funding mechanism that can attract funding from various donor agencies and the GoB, and as such can possibly be a basis for a common programmatic approach in the rural hygiene, sanitation and water sector. The communities will plan their own community schemes for hygiene, sanitation and water supply interventions according to their needs and affordability. They will share the costs of water supply facilities, and will fully contribute to household sanitation. The communities will be fully responsible for Operation and Maintenance (O&M) of all the schemes. The HYSAWA Fund will, upon application from the UPs and subject to certain conditions (Annex 3), provide a grant to the participating UPs to engage a local firm or NGO to assist the communities in formulating proposals for schemes and capacity building of community organisations. Such a firm or NGO may also provide support to the community organisations for hygiene and sanitation promotion and in safe water use. The community organisations will forward the community schemes to the UPs for implementation. The UP will appraise and compile the community schemes into a consolidated proposal and fund request and submit the same to the HYSAWA FMO. Upon approval of the application by, and receipt of funds from, the FMO, the UP will then manage the implementation, e.g., through local service providers. The LGSU established under the Project will facilitate capacity building support to the UPs to carry out their responsibilities. For this purpose, the LGSU among others envisages to establish linkages with, and use the services of, government line agencies such as the Department of Public Health Engineering (DPHE), the Health Department and National Institute for Local Government (NILG). The capacity support to the UPs will furthermore be supplemented by engaging a Support Organisation (SO), typically a consortium of an NGO and a Management/Engineering Firm from the private sector. 4

14 Direct funding from the central level (HYSAWA Fund) to the UPs is the key to empower LGIs and will promote greater devolution of administrative and financial power to them. The accountability of the UPs to the local people will be ensured by setting up mandatory public disclosure systems. Cross cutting issues like human rights, addressing the special needs of women and poor, culture and development, etc. will be embedded into the participatory planning process and this will be reflected in all field level activities. The hygiene promotion element will include awareness about primary health care, common female and male diseases and HIV/AIDS. Description of Project Area The objective to demonstrate local government based decentralised WSS service delivery modalities will be done in three different areas. These are: (i) 200 UPs in three districts in NW Bangladesh, (ii) 146 UPs in the coastal belt districts and (iii) 350 UP that will be capacitated through the NGO-F managed NGO and Civil Society Networking Project. Although Bangladesh is a homogenous country in terms of social aspects and behavioural practices related to hygiene and sanitation, there are some differences particularly in terms of water supply in these three areas. They are explained below. (i) North-Western Districts The three North-Western Districts of Rajshahi, Nawabganj and Naogoan are among the very poor areas of the country. The water supply coverage is low (1 tube-well for 188 people). The groundwater levels in these districts goes down during the dry seasons (technically known as low water table areas), thereby causing water scarcity by making the widely used shallow tube-wells inoperative. To mitigate this, so-called Deep Set Pumps (DSP) are required to draw water from a low ground water level. These technologies are more expensive than the normal tube-wells and difficult to afford for low-income communities. (ii) Coastal Belt Districts - The WSS Coastal Belt Project under WSSPS II will, during a 2½ year period between , cover 303 UPs out of total 469 UPs in the eight coastal belt districts. WSS in the remaining 146 UPs in 19 Upazilas in these eight districts will be supported by the HYSAWA Project and will thus be implemented according to the decentralised local government based service delivery. Like the low water table areas in the NW districts, the coastal belt districts are water scarce areas because very expensive deep tube-wells are generally required to avoid the arsenic and saline-effected shallow aquifers. (iii) The NGO and Civil Society Networking Project under WSSPS II will facilitate capacity support to UPs and communities in WSS service delivery in 350 unions of 104 Upazilas located in 45 Districts throughout the country. The project will also arrange for hygiene promotion and sanitation facilities. The demand for water supply facilities will be met from the HYSAWA Fund upon applications received from these UPs. NGO-F will facilitate this process. Although the water supply coverage is generally high in the country, the water supply facilities for these Unions are needed for some un-covered low-income communities of the UP supported through NGO Forum are located in Barisal District that will also be supported through the WSS Coastal Belt Project/ HYSAWA Project. The detailed implementation plan shall ensure that there will not be support to the same unions through NGO-F and LGSU. 5

15 2.1 Objectives The ultimate goal of the Project is to contribute to the government s policy to reduce poverty through improved and sustainable public health and environment and to reach the MDGs for water and sanitation. The development objective of the Project is: To develop and demonstrate sustainable hygiene, sanitation and water supply service delivery through local government institutions in consultation with local people. The immediate objectives of the Project are same as that of the five immediate objectives of the WSSPS-II: To improve hygiene behaviour /practices To promote community-led total sanitation To increase coverage of safe water supply services To strengthen the capacity of Government, Local Government Institutions (LGIs) and nongovernment stakeholders at all levels to play the roles required to achieve the above three immediate objectives. To promote greater devolution of administrative and financial authority to local government institutions in regard to hygiene, sanitation and water supply. 2.2 Strategies The following strategies will be used to achieve the immediate objectives of the Project: Decentralisation Strategy The Project implementation modalities will promote decentralised service delivery. National and international experiences have shown that public services are most effective when they are managed by the lowest possible level of management i.e. they are closest to the users. In case of Bangladesh the UPs are the lowest tier of the local government. Direct funding to the UPs without the influence of national politics or higher level authorities is the key to empower these Local Government Institutions and advance the decentralisation process. To ensure effective design and sustainable use of the WSS interventions it is essential that the communities are involved in planning and implementation according to their need and ability to pay. However, both the UPs and the communities do not presently have the means and capacity to carry out these responsibilities. In order to address this, the Project will facilitate the establishment of the following two support mechanisms: Financing mechanism (the HYSAWA Fund), which, upon application and subject to certain conditions, will provide funds, as grants, to the UPs to enable these; (i) to help the communities in preparing their own WSS schemes, and (ii) to implement those community schemes. 6

16 Capacity support mechanism (through the LGSU), which will provide the necessary capacity support to the UPs to carry out their responsibilities. When developing detailed eligibility criteria and procedures HYSAWA funding, the Project will among others refer to the UP performance evaluations carried out by the Monitoring, Evaluation and Information (MEI) Wing of the LGD. The procedures for the HYSAWA Fund shall be furthermore aligned with the procedures for the recently established UP Development Fund 11, while lessons will be drawn from the experiences gained in other, similar, projects such as the Bangladesh Municipal Development Fund (BMDF). The UP WSS projects shall also be included in the Annual Development Plans in order to mainstream and link the HYSAWA funding to the normal government planning procedures Project Organisational Design Strategy Taking recognisance of the above strategy to combine capacity building and funding, the Project will facilitate and support the establishment of the following two independent sections: HYSAWA Fund: The Project will facilitate the establishment of a financial institution, called HYSAWA Fund, to provide financial support to eligible, applying, UPs for implementing schemes prepared by the communities. A Fund Management Office (FMO) will manage the Fund operations. Local Government Support Unit (LGSU): A LGSU will be established to assist the Unions in accessing the HYSAWA Fund. The LGSU will, with the support of government agencies, private sector and NGOs, facilitate and support initial supply driven information and capacity building support to the UPs. It will furthermore provide support to DPHE and other government agencies to develop their required facilitating capacity as envisaged in the National Policy for WSS, The organisational structure and the roles and responsibilities of the HYSAWA Fund and LGSU are described in detail in Chapter 3: Management and Organisation Community Level Implementation Strategies Community Development: Community organisations will be formed at the community level at the initial stages of the project with a view to develop their capacity to take over the responsibilities of planning, implementation, operating and maintaining community schemes. To ensure participation of all sections of population in a village or a peri-urban area, including disadvantaged groups like women and poor, the organisational structure of the community organisation will be like a federation in nature and comprise of three groups: (i) poor, (ii) women and (iii) general public including also the richer sections of the community. This structure will ensure equity-based representation of poor, women and general families in the organisation and help all segments of the community to bring their relevant agendas into the village development plan. The community consultation process during the feasibility study suggested naming the community organisation as VDF or Village Development Forum (In Bangla Gram Unnyan Shamiti) to highlight the introduction of multiple groups in the organisation. 11 Use of Union Parishad Development Fund Guidelines LGD. 5 February

17 Community Management Promotion (CMP) methods will be used for planning and implementing the community schemes. CMP means developing community capacities to plan, implement, monitor and evaluate their development activities and is usually supported by an external facilitating institution, a NGO in this case. A local NGO will be engaged by the each participating UP. The NGO will use appropriate instruments to form community organisations and develop their capacities for planning, O&M of WSS interventions. The community development and the training and promotional activities for hygiene, sanitation and safe water to be carried out by the local NGO are interlinked and often overlapping. It is expected that the NGOs will spend fifty percent of their time on hygiene promotion, thirty percent in sanitation and twenty per percent on water supply. Formulation of Community Schemes: The three main items of community schemes will be (i) hygiene promotion, (ii) community-led total sanitation (CLTS) and (iii) water supply. A demand responsive strategy will be adopted to formulate the community schemes the communities (VDF) will plan their own schemes, according to their ability to contribute towards these investments, and will be fully responsible to operate and maintain the system. These community schemes will be forwarded to the UPs through the Gram Sarkar (village council) for further processing and implementation. The local NGO will support the VDF in preparing the community schemes. The procedures and modalities for processing and implementing community schemes are described in more detail in Annex 3. Hygiene Promotion: Hygiene promotion is a crucial element for achieving the Project objectives. Improved hygiene awareness is expected to generate demand for improved sanitation and safe water use. Hygiene promotion will be implemented through the community organisations (VDF) following the CMP method. The hygiene promotion massages will follow Health Message Guidelines under preparation by LGD. A range of hygiene behaviour practices will be considered for promotion, some of which are shown in Box 2.1. Box 2.1: Hygiene Promotion Aspects Disposal of human faeces: bring about awareness among people about benefit of sanitary means of excreta disposal and health and environmental problems due to open defecation; Personal hygiene, hand washing with soap or ash after defecation and before taking food and meal Create awareness among mothers about proper disposal of faeces of under-1 children Protection of safe water source, storage of water from contaminations Food preparation and handling Environmental sanitation: animal and other solid waste disposal in a sanitary manner General cleanliness of homesteads, living, cooking places Use of sandals, particularly for latrine use Keeping the latrines clean Use of safe water for drinking and if possible for all other domestic purposes Sanitation: The Community-led Total Sanitation (CLTS) approach will be adopted as per the National Sanitation Strategy (2005) prepared by the LGD. In CLTS, the term Sanitation is defined in a broader sense as Environmental Sanitation, which means not only installation and use of hygienic latrines but also includes homestead cleanliness, management of animal and other solid 8

18 waste, drainage of waste water including water from tube-well platforms etc. In CLTS the communities are motivated to take collective action by themselves. CLTS address the communities as a whole and importantly, it aims for 100% coverage in sanitation. As a result of the hygiene promotion and other functions of the VDFs, the communities are expected to be motivated to stop open defecation, install hygienic latrines or upgrade unhygienic (e.g., hanging ) latrines to hygienic latrines. The Project will not subsidise any household latrine or other environmental sanitation aspects. However, the UPs will be supported in planning the utilisation of the government s special Annual Development Plan (ADP) allocation for sanitation (20% of the annual block grant to Upazilas) for delivery of latrines to poor households. The Project will support installation of community latrines for groups of poor users and for schools as identified by the VDF. The communities will in these cases contribute 20% of the cost, while the remainder will be financed from the HYSAWA Fund. In peri-urban areas, an environmental sanitation package will be designed in a participatory way with the communities, assisted by the SO under the LGSU. The environmental sanitation package may include community latrines at public places, small drains, and limited solid waste management systems. Here, the communities are also expected to share 20% of the total costs. Water Supply: The community organisations (VDF) will identify under-served areas for installation of community water installations, and the Pro-poor Strategy for Water and Sanitation Sector in Bangladesh, 2005 prepared by LGD will be followed. A technology choice will be made according to technical requirements and the community s ability to pay their share of the investment cost and the full cost of O&M. The VDF will be responsible for identifying tube-well sites and be fully responsible for O&M. The VDFs or the user groups will contribute 20% of the capital cost. The UPs will be responsible for contracting a suitable service provider (government agency, NGO or private sector) for the construction of water supply installation. In case of arsenic contaminated areas, the water supply implementation modalities will follow the National Policy for Arsenic Mitigation, 2004, including relevant protocols prescribed under that policy. Piped Water Supply: Piped water supply may be feasible in the Project areas where the technology cost is relatively high (Deep tube-well areas in Coastal Belt Districts and low water table areas NW District), in arsenic affected areas, and in densely populated areas (e.g. peri-urban areas). Piped water supply systems have been introduced in rural Bangladesh only recently. Private sector initiatives in rural piped water supply are presently being promoted and tried out under the World Bank supported Bangladesh Water Supply Program Project. In this case, the project will support about 50% of the investment cost while a private sector partner ( sponsor ) will arrange the remaining 50% from the communities and capital market. Other organisations having (limited) experience with rural piped water supply are the Department of Public Health Engineering (DPHE), Rural Development Academy (RDA), BMDF and NGOs like NGO Forum, Asia Arsenic Network and Bangladesh Rural Advancement Committee (BRAC). These systems vary in service level (for drinking and cooking only or for all purposes), technology and scale. 9

19 The Project will in first instance consider the private sector participation model of Bangladesh Water Supply Program Project. However, as piped water supply systems for rural areas are in an emerging stage in Bangladesh, more experience and information from the ongoing initiative will be necessary to better design the implementation modalities. Thus, the Project will review the experience of the piped water systems before the inception of piped water supply works and, if necessary, modify its implementation modalities Union Parishad Level Implementation Strategies The UPs will receive requests for support to community schemes from villages, appraise them, prepare a consolidated Union scheme incorporating all the community schemes, and send them to Upazila Development Coordination Committee (UDCC) for validation. Once a Union scheme is validated, the UP will then send the proposal to the HY- SAWA FMO with a request for financing. The SO will assist the UPs in the community scheme appraisal, and in the preparation and processing of project proposals and fund requests. The UPs will not directly implement the community schemes but will manage the implementation by contracting out the different elements of the community schemes to suitable service providers like NGOs (e.g. for hygiene promotion and sanitation) and private sector (e.g. for tube-wells and piped water supply). With regard to the overall, more supply driven, capacity building support and technical assistance facilitated through the LGSU, the Project will generally rely on the existing government institutional structures, rather than creating new institutions. The Project will thus take advantage of the national territorial network and technical capacity of government line agencies like DPHE and Health Department, as well as the existing coordination and management capacity of the government s administrative units at Upazila level. To supplement the government institutional support, the UPs will furthermore receive support from a Support Organisation which may comprise of an Engineering/ Management Firm from the private sector. This support will include technical design, supervision and project management. Among others, the National Institute for Local Government (NILG) will be engaged by the LGSU to provide training to the UPs in the NW and Coastal Belt Districts. The training to the UPs supported by NGO-Forum will generally be carried out by NGO-Forum. The combination of government agencies, private sector and NGOs is expected to have a synergic effect while delivering support to the UPs. The benefit of the UP based arrangement is that the same can be applied country wide while implementing other large scale programmes. Such an institutional arrangement will enable both a bottom-up planning process and a smooth flow of funds from the centre. The Project will support capacity building among UP Chairperson, UP members, Gram Sarkar members, as well as other key persons in the locality such as Imams and school teachers. The SO will, in close consultation with the respective UPs, engage a UP Facilitator (UF) in each of the participating UP. The UF, preferably a local, will be actively involved, and receive on-the-job training, in all activities of supporting institutions like SO, 10

20 government institutions and NGOs. When the Project is completed, the UP Facilitators can then be utilised for other development purposes Poverty and Cross Cutting Issues The following general issues will be imbedded into the community scheme preparation process and thus will be reflected in all implementation activities: Poverty: The Project interventions will be designed and implemented to support poverty alleviation. The water supply facilities will be subsidised for the poorer sections of the population of un-served and underserved areas. Provisions for community sanitation facilities and low-cost sanitation options will be promoted. The Project will adopt possible actions at the grass root level in accordance with the Poverty Reduction Strategy Paper (PRSP), and the LGD pro-poor strategy. Human Rights and Gender: The communities will be responsible for planning and designing their schemes and the local NGOs will facilitate the overall process using the CMP approach. CMP will not only address the hygiene, sanitation and water supply related activities, but will also be able to address broader issues like equitable resource allocation and human rights, particularly improving the vulnerable situation of the poor and women. The structure of the community organisation, i.e. VDF, will comprise three groups: (a) poor, (b) women and (c) general public, i.e., including richer sections of the community. This structure will ensure equity-based representation of poor, both women and men and general families in the organisation, and help all segments of the communities to bring their relevant agenda in the village development plan. The Project will in the inception phase formulate Project Implementation Guidelines (PIG), which will incorporate details of the above activities. Good Governance: Good governance will be ensured through establishing systems for accountability, community participation and transparency through mandatory public disclosure systems. The PIG will spell out well-defined business rules for systematic implementation of the Project. Proper handling of funds by the UPs will be addressed by setting up an accountability relationship with the people. The UPs will have a mandatory and transparent public disclosure system. The UP members are obliged to perform properly as the people will judge their performance, based on correct information, and may or may not elect them in the next election. In addition to this bottom-up monitoring, there will be a financial and performance monitoring from higher levels of governments and line agencies. Culture and Development: The development interventions under the Project will be planned and implemented considering the culture prevailing in the Bangladeshi society. Design, site selection and construction of WSS facilities will be given due attention to privacy as well as cultural aspects. Traditional cultural events will be an integral part of the social mobilisation activities of the NGOs engaged in the Project. The voices of theatre groups, teachers, religious leaders and elderly people of the communities will be re- 11

21 spected and their acceptance in society will be utilised by involving them in dissemination of WSS messages under the Project. HIV/AIDS: The hygiene promotion messages will include issues and contents to create awareness about primary health care, preventing common diseases and HIV/AIDS. Environment: Environmental improvement activities will be undertaken under the CLTS campaign. This will improve the local environmental situation in terms of cleanliness, proper waste management, etc. All the community schemes will be technically appraised at the Upazila level which will include environmental assessments Sustainability The HYSAWA Project will address sustainability of both the services provided and the capacity developed. The sustainability of the facilities will be relatively easily ensured as the technologies will be simple and the skills and spares required for implementation, O&M are readily available in the market. However, what is more important is the behavioural sustainability which is essential for continuing the good hygiene, sanitation and safe water use practices that are expected to be developed by the Project. Recent experience in Bangladesh and in regional countries has shown that sanitation installations may not necessarily be used properly, and that people do tend to go back to their previous bad hygiene habits. The main reason identified was that the motivational work was withdrawn before the communities were actually prepared to permanently retain the behavioural changes and fully take over the responsibilities of O&M. Based on these experiences, the Project will give adequate emphasis to transform the current attitude of people to internalise and permanently retain their behavioural changes. A trail period of one year after completion of the major implementation works is provided within the community scheme implementation period. During the trial period, CMP and hygiene promotion will continue together with the O&M of sanitation and water installations. In this period the VDFs will take a lead role but still supported by the local NGO. The support of the local NGO will be phased out on the basis of a clear exit strategy by the end of the trial period. By that time, the VDF will be fully capable and functional to continue with any follow up work Incentive Fund The Project will provide for an Incentive Fund (or award system) for well-performing UPs and villages, which will be judged by a set of transparent performance parameters. The Incentive Fund will be about 10% of the hardware cost. This Fund will encourage good performance through a healthy competitive environment. The Incentive Fund can be used by the UPs for any interventions in water and environmental sanitation e.g. drains, solid waste management etc. This mechanism is expected to create motivation and efficiency both among the people and UPs since the fund will be able to respond to the local priorities. The planning for utilising the Fund will be done by the VDFs and UPs during the scheme preparation stage and will follow the same implementation modalities and accountability rules as the normal WSS funding. 12

22 2.2.8 Peri-Urban Area The activities in the peri-urban areas under the Project will be implemented in line with the modalities described above for rural areas. The project will focus on urban areas that are not declared Municipalities. Normally, peri-urban means such areas where the level of development is higher than the normal villages but less than traditional urban areas e.g. municipalities. The population density is also higher than villages and the majority of the people will demand and be willing to pay for a higher services level (e.g. piped water supply than hand pump tube-wells). For this Project, these peri-urban areas will typically include some Upazila headquarters and rural growth centres. The intervention in peri-urban areas will include hygiene promotion, sanitation (possibly with a higher level of technologies like twin pit latrines and septic tanks), small drains to discharge some stagnant water, and limited solid waste management. In some areas piped water supply may also be considered. There are about 3 to 5 peri-urban areas in an Upazila. The Project will address an average of 3 peri-urban areas in an Upazila based on the actual demand from the UPs and communities. During the second half of the Project period, limited support will be provided to the urban water supplies in nine of the Pourashavas in the Coastal Belt which have been supported by Danida during the WSSPS I. The support will focus on the further institutional development of the Pourashava Water Supply Sections with the aim to improve the sustainability of the water supply services Long-Term Development Strategy The HYSAWA Project is expected to develop and demonstrate effective and sustainable service delivery of hygiene, sanitation and water supply through LGIs. The participating UPs will directly receive funds for community scheme implementation. This will create opportunities for the UPs to develop capacity in direct fund management, implementation of project activities and managing similar development programmes. Once this path (or model) is created, it can be used for delivering public services like rural infrastructure, primary health care and mass education. As this model is based on permanent government structures and the prevailing capacities of NGOs and private sector, it can be scaled up for undertaking large scale decentralised investment programme. The legal establishment of the HYSAWA Fund will be formulated in a way that may enable other interested donors or Bangladesh Government to put in additional funds for financing similar UP based activities. The Fund can thus develop to be a common financing mechanism for the sector and facilitate the development of a sector programmatic approach. 2.3 Outputs In order to realise the project objectives, the major outputs from the HYSAWA Fund section and the LGSU are shown separately below: 13

23 HYSAWA Fund: Output A1.1 & A : Improved and sustainable hygiene behaviour/practise achieved in the participating communities in the NW and Coastal Belt Districts. Output A1.2 & A2.2: Improved access to sanitation facilities and its proper use achieved in the participating communities in the NW and Coastal Belt Districts. Output A1.3 & A2.3 & A3.3: Access to safe water source and safe water use increased in the participating communities in the NW, Coastal Belt Districts and NGO-F Unions. Output A1.4 & A2.4: Technical and management capacities of LGIs increased through demand driven capacity building support from DPHE, NILG and HYSAWA FMO. LGSU: Output B4.1 & B4.2: Capacities of 200 UPs in NW Districts and 146 UPs in Coastal Belt Districts developed to support communities and UPs to formulate schemes, appraise them, process fund requests, and manage their implementation Output B.4.3 Technical, management and facilitating capacities of DPHE, other government agencies and private sector increased. Output B.5.1 Government agencies develop capacities at central and district levels to respond to demand driven decentralised service delivery. The HYSAWA Project will be implemented with the framework of the WSSPS II, and each of the project s outputs is linked to the specific five immediate objectives of WSSPS II as indicated below. Under the HYSAWA Fund, Output A1.1 and A2.1 will contribute to the immediate Objective No. 1, i.e. To improve hygiene behaviour/practices, Output A1.2 & A2.2 to Immediate Objective No. 2, i.e. To promote Community-Led Total Sanitation (CLTS) and Output A1.3 & A2.3 & A3.3 to Immediate Objective No. 3, i.e. to increase coverage of safe water supply services. Output A1.4 & A2.4 under the HYSAWA Fund and Output B4.1 & B4.2 and Output B.4.3 under the LGSU will together contribute to the immediate Objective No. 4 of WSSPS II, i.e. To strengthen the capacity of government, local government institutions (LGIs) and non-government stakeholders at all levels. Output B.5.1 under the LGSU will contribute to achieving the immediate Objectives No. 5, i.e. To promote greater devolution of administrative and financial authority to local government institutions in regard to hygiene, sanitation and water supply. 12 Output numbering according to activity budget numbering for the different geographical areas 14

24 2.4 Activities This section briefly describes the activities under the HYSAWA Fund and the LGSU in relation to the respective, expected, outputs. HYSAWA Fund: Activities related to Output A1.1 & A2.1: Improved and sustainable hygiene behaviour/ practise achieved in the participating communities in the NW and Coastal Belt Districts: The output will be realised in close collaboration with the sanitation and water supply activities as they are interlinked. A local NGO will be engaged by each Union to support the communities in hygiene, sanitation and water supply related activities. The NGO will initiate the process through the CMP method, so that communities themselves can plan, implement and monitor their own hygiene, sanitation and water supply schemes (community schemes). This will also subsequently generate demand for hygiene promotion, sanitation and safe water use. Community organisations (VDF) will be formed and the VDF leaders will be trained on participatory need assessment, planning, resource mobilisation and specifically to prepare community schemes and their monitoring and followup activities for the scheme s sustainable operations. The VDFs will take a lead role in hygiene promotion activities and be supported by the local NGO. The NGO will also assist the communities in processing the application for the community schemes. The SO appointed by LGSU will guide and train the local NGOs. In addition the field staff of Health Directorate will support the hygiene promotion activities as a part of their regular duties and the project will facilitate supporting those activities by conducting specific training and developing Information, Education and Communication (IEC) materials for their use. The major activities related to hygiene promotion are: Train the local NGOs to support VDFs in hygiene promotion. Identify and prioritise intervention areas and target communities considering the parameters like under-served, poverty, gender and human rights. Provide training to the concerned UPs, Gram Sarkar, VDF leaders and UP Facilitators on planning and implementation of hygiene education activities. Conduct a series of motivational sessions (individual & group) among the community on hygiene promotion. Activities related to Output A1.2 & A2.2: Improved access to sanitation facilities and its proper use achieved in the participating communities in the NW and Coastal Belt Districts: The local NGO will carry out the sanitation related works in combination with the hygiene promotion activities. Sanitation under the Project represents a wide scope i.e. the so called environmental sanitation, which in the Project context includes keeping the surroundings clean, animal and solid waste management, and small scale drainage, etc. The main activities are: Provide training to the concerned UPs, Gram Sarkar, VDF leaders, Community Facilitators on planning and implementation of CLTS approach. 15

25 Conduct a series of motivational sessions (individual & group) among the community people on sanitation promotion and monitoring of progress in larine installation and eliminating open defecation Identify and provide training to the local private sector latrine producers in order to ensure availability of a range of sanitary latrine options to suit the different choices and affordability of the people. Provide technical support for installation of hygienic latrines by households themselves. Identify and install school latrines and conduct school based orientation sessions, and other motivational activities among the students, teachers and guardians on hygiene and sanitation. Identify, design and implement environmental sanitation improvement activities in peri-urban areas like installation of community latrines, small scale drains and waste disposal systems. Arrange training/motivational sessions for operations and maintenances. Activities related to Output A1.3 & A2.3 & A3.3: Access to safe water source and safe water use increased in the participating communities in the NW, Coastal Belt Districts and NGO-F Unions: The water supply activities will be contracted out by the UPs to suitable service providers (private sector, govt. agencies, community groups, etc.). The local NGO will assist communities in scheme preparation and education in safe water use. Priority will be given to under-served and disadvantaged communities. The activities will include: Identify under-served areas and disadvantaged communities, e.g. poor, women headed households, and formulate community based water supply plans. Contract private service providers/other agencies for installation of water supply systems (tube wells in rural areas and piped water supply in peri-urban areas) Conduct awareness sessions for proper operation, maintenance and protection of the water systems. Establish systems for collecting user charges to ensure proper O&M of the water supply systems. Activities related to Output A1.4 & A2.4: Technical and management capacities of LGIs increased through demand driven capacity building support from DPHE, NILG and HYSAWA FMO: A HYSAWA FMO office will be established in order to provide financial assistance to applying UPs, thereby enabling these UPs to implement WSS services and obtain (procure) capacity building support. Some basic training for the UP members would be a precondition for UPs to be eligible for receiving financial support from the HYSAWA Fund. To meet this pre-condition, UPs may among others request the HYSAWA FMO to finance training programmes provided by NILG. Similarly, UPs may also request institutions such as DPHE to carry out groundwater investigations, water quality testing, etc.. To provide an incentive for the UPs, an incentive fund will furthermore be established to enable well-performing UPs to apply for financial support to environmental sanitation interventions. 16

26 The major activities to achieve the above output are: Establishment of HYSAWA FMO. Demand based research and development works (e.g. test wells, groundwater investigation and water quality testing in low water table, coastal best and arseniceffected and/or other water quality problem areas), and support to technical design of complex installations (piped water supply, water treatment units, etc.). Demand based training programmes to UPs under NW districts and coastal belt districts provided by NILG. Institutional development activities to the Pourashavas in the coastal belt districts Establish and administer an incentive fund as an award/motivating system for well performing UPs. Procurement of logistics. LGSU: The activities under the outputs of the LGSU are given below. Activities related to Output B4.1 & B4.2: UPs capacities developed to support community to formulate schemes, appraise these, and manage their implementation: The focus of the, supply-driven, capacity building will be on institutional capacity building by designing systems and formulating procedures for effective implementation of the different activities by the UPs. A Support Organization (SO) will be appointed by LGSU to provide inputs in this regard. Upon receiving community schemes from VDFs, the UPs will appraise these and prepare a consolidated UP scheme. The SO will assist the UPs in the scheme appraisal and in other technical and management aspects. Major activities envisaged to achieve the above mentioned outputs are as follows: Engage SO to provide technical and management support to UPs. Select and engage UP Facilitators to play an active role together with the SO and other supporting agencies. Appraise community schemes and approve feasible schemes in the UP Project Committee. Prepare consolidated UP scheme incorporating all the community schemes in the Union and forward them to UDCC for validation. Activities related to Output B4.3: Technical, management and facilitating capacities of DPHE, other government agencies and private sector developed: LGSU will arrange for training and other, more supply-driven, capacity building activities for relevant government institutions (DPHE, Local Government Engineering Department (LGED), Health Dept., etc.) to enhance their facilitating capabilities. Among others, these institutions will be actively involved in supply-driven training programmes for the UP members and other key persons in the Union (local leaders associated with development activities, Imams of mosques, school teachers, etc.). Support will furthermore be provided to the formulation of guidelines for preparation of proposals, funds requests, supervision, etc.. The main activities to achieve the output are: Formulate Project Implementation Guidelines (PIG). 17

27 Provide in-house & on-the-job training, exposure visits, and orientation to the UP members, UP Facilitators and key persons at UP levels. Facilitate training programmes of UP Chairman and members by NILG. Orientation of Upazila level government staff on scheme appraisal, processing and supervision procedures. Orientation and training of different field level government and non governmental staff on their facilitating and supporting role in the field level implementation activities (hygiene education, sanitation promotion and safe water use, etc.). Support to small scale private producers in providing WSS services. Supporting UPs during natural calamities or special situations. Activities related to Output B5.1: Government agencies develop capacities at central and district levels to respond to demand driven decentralised service delivery: One of the main purposes of establishing LGSU is to guide and support the process of decentralisation. This would mean a new way of doing business and, thus, new roles for the institutions at central and lower levels of existing administrative units. This new service delivery mechanisms would be institutionalised by establishing formal linkages with the administrative set up at Upazila level and related government line agencies (e.g. DPHE and Health Department). The Project Director of LGSU will take the lead role in this respect and will pursue with the LGD to initiate necessary actions to link the UPs with the government institutions under its jurisdiction as well as those under other Ministries. The main activities are: Establish the LGSU in DPHE and engage additional professional and support staff at central and district levels. Issuance of government orders by LGD and other Divisions/Ministries to organize, direct and guide the respective Upazila administrative units (UDCC), DPHE, Health Dept. to support the UPs. Discuss community schemes planning and implementation status in UDCC meetings. Conduct action research on critical aspects of the Project specifically related to capacity needs of UPs, and develop operational tools for implementing community schemes. The research will include a baseline study of UP capacities and service status, analysis of innovative approaches related to local government-led development and devising ways to further improve the Project implementation strategies. Collect, analyse and disseminate the key lessons in LG based service delivery systems to the sector stakeholders through publications and knowledge events. 18

28 2.5 Inputs Inputs by Communities The participating communities are expected to contribute in total about BDT 943 million (DKK 94.3 million) in cash and in kind. Among others, the communities are expected to contribute a total BDT 247 million as their share of the cost for community schemes, i.e., i) 20% of the cost for the water supply installations and school/community latrines in rural areas, ii) 20-50% of the piped water supply in rural or peri-urban areas, iii) 20% of community/school sanitation, and iv) 20 % of environment sanitation package in periurban areas. The communities are furthermore expected to make direct contributions, both in cash and in labour, of about BDT 696 million for their own household sanitation and improvements in other environmental sanitation activities. In addition to the above contributions budgeted in the Project, the communities will also provide their time and supporting activities in community organisational activities and participate in development works particularly in hygiene and sanitation promotion Inputs by Bangladesh Government GoB will provide BDT 306 million, equivalent to DKK 30.6 million, towards the Project, which will be released every financial year out of its ADP allocations. The GoB contribution is about 20% of the HYSAWA Project. This amount will be utilised for the following items: Contributing 20% of the HYSAWA Fund. Cost of supervision and training by government agencies. Cost of the LGSU Project Director s office Contingencies, including emergency interventions like natural disasters. Customs Duty/Value Added Tax (CD/VAT) In addition to the above inputs against the budget allocation under the Project, GoB will also provide inputs in the following activities: Local Government Division: The HYSAWA Fund will be established as a Company. The Secretary, LGD, will be the Chair of the HYSAWA Governing Board, and will be a key person to guide the HYSAWA Fund. Department of Public Health Engineering: DPHE will provide technical support to the HYSAWA Fund and will be a member of the HYSAWA Governing Board. DPHE will provide office space for the LGSU located close to the management of the WSS Coastal Belt Project Management to ensure synergy and common use of support staff and Technical Assistance (TA) resources. The DPHE Sub-Assistant Engineer (SAE) at the Upazila level will be the focal person at the Upazila level and will advise the UDCC on the technical validation of the community schemes. The SAE may seek the assistance of higher levels of DPHE when needed. At the district level DPHE Executive Engineers (EE) will be the focal per- 19

29 sons for LGSU for arranging capacity support to the UPs. The EEs will be assisted by Project Officers engaged by the LGSU. Upazila administrative Unit: The Upazila Nirbahi Officer (UNO) and the administrative set-up at the Upazila, particularly the UDCC, will provide management and administrative support the UP in discharging their duties. This support will include staff time of the Upazila administrative set up and related government staff. Other government line agencies: Other government agencies, notably the Health Department, will contribute staff time and utilise its network of field level staff. They will participate in the awareness and motivational work at the field level Inputs by Danida The contribution from Danida for the HYSAWA Project will be DKK 141 million (BDT 1,410 million) of which DKK 103 million is allocated for the HYSAWA Fund, DKK 31 million for the LGSU, and DKK 6.6 million for contingencies. The Danida funding will be used to finance cost of the following: Contributing 80% of the community schemes (i.e. the costs of sanitation and water supply including the incentive fund) to be financed by the HYSAWA Fund; The cost of local NGOs for community development and sanitation promotion; The cost of the SO for providing capacity support to the UPs; The cost of training module development; The cost of action research, monitoring, training and knowledge sharing events; The cost of the HYSAWA Fund Management Office. In addition to the above inputs against the Project budget, Danida will provide the services of one Senior Project Adviser for the 5-year period of the Project as well as management support through the National Programme Director s (NPD s) office Inputs by other donor Inputs from other donors to the HYSAWA Fund are not committed, however the Fund will be established in such way that funding from other sources can be accommodated. The vision and the overall purpose of the HYSAWA Fund are to establish a common funding mechanism for the rural water and sanitation sector. 2.6 Budget A summary budget is presented in Table 2.1. The budget also describes the contribution of each partner towards implementation of various elements of the Project. A further breakdown of costs against different activities under each output is given in Annex 1. As the HYSAWA Project is demand responsive, it should be expected that there will be some variation among different items of the budget depending on the demand of the communities. Detailed budgets will be prepared in a semi-annual planning and budgeting cycle to correspond to both the GoB and the Danida financial years. 20

30 1000 DKK HYSAWA Project Items Project Total Danida Total GOB Total Community Total HYSAWA FUND: 222, ,437 25,075 94,286 Three North Western Districts 124,486 56,649 14,174 53,663 Coastal Belt Districts 88,512 40,516 9,333 38,663 NGO-Forum Supported Unions 9,800 6,272 1,568 1,960 LG SUPPORT UNIT: 36,159 30,606 5,553 0 Sub-Total 258, ,043 30,628 94,286 Contingencies 6,473 6,473 TOTAL PROJECT COST 265, ,517 30,628 94,286 Table 2.1: Project Summary Budget 1000 DKK HYSAWA Project Items Danida Total HYSAWA FUND: 103,437 2,647 7,102 26,087 39,534 28,067 Three North Western Districts 56,649 2,647 6,381 19,369 18,064 10,187 Coastal Belt Districts 40, ,210 18,960 16,625 NGO-Forum Supported Unions 6, ,509 2,509 1,254 LG SUPPORT UNIT: 30,606 2,446 5,578 7,418 7,582 7,582 Sub-Total 134,043 5,094 12,681 33,505 47,115 35,648 Contingencies 6,473 6,473 TOTAL PROJECT COST 140,517 5,094 12,681 33,505 47,115 42,122 Table 2.2: Cash flow budget Danida Contributions only 21

31 3 MANAGEMENT AND ORGANISATION 3.1 Institutional framework of LGD and SPS The HYSAWA Project will be implemented as part of the WSS Component. Overall guidance will be provided by the Programme Steering Committee (PSC) and SPS Coordination Group (SPS-CG). The PSC will also approve annual work plans and budgets for the Project which will be included in the Annual Development Plan (ADP). The PSC will furthermore discuss and take necessary remedial actions if discrepancies are observed between the Project Document and the Project Proforma as well as agreements between GoB and Danida. The main responsibilities of the SPS-CG will be to ensure coordination in planning and implementation of the different Components under WSSPS II. SPS-CG will discuss and recommend annual work plans and budget of the HYSAWA Project before submission to the SPS-SC for approval and suggest necessary remedial actions if discrepancies are observed between the Project Document and the Development Project Proforma as well as agreements between GoB and Danida. The NPD will, under the overall direction of the PSC, be responsible for overall day-today coordination of WSSPS II. Among other tasks, the NPD Office will provide inputs to the compilation and review of respective progress reports, budgets and work plans (for approval by the PSC), and will, on the basis of approved budgets and periodical fund requests, facilitate the funds flow to the respective WSSPS II components/projects. The LGSU will be located in DPHE as part of a Central Coordination Unit (CCU) for both the LGSU and the Coastal Belt Project, to facilitate coordination and promote synergy between the two projects. The LGSU will be managed by a PD from LGD or DPHE assisted by Danida Advisers. The HYSAWA Fund will be managed independently by the FMO of the HYSAWA Fund Company. The FMO will be headed by a Managing Director and will be guided by a Board of Directors with the Secretary LGD as the chairperson. Coordinated management of the Coastal Belt and the HYSAWA Project activities is seen to be important for cost effective implementation and full utilisation of the resources available in the respective projects. The Project Management will establish appropriate coordination structures e.g. joint management meetings at regular intervals to enhance the cooperation between the personnel in the respective projects. Resources transferred from the WSSPS I Central Coordination Unit, e.g. transport and office facilities, as well as some of the other project provisions such support staff, will be used for both the projects to achieve coordinated implementation and reduce the management costs. The LGSU and Coastal Belt Project will also jointly utilise the existing accounts unit established under the Phase I DPHE-Danida Components. The organogram for WSSPS II is appended as Annex 2. 22

32 3.2 Project Organisational Set Up and Management The organisational structure and Project Management is divided into two distinct sections: (i) HYSAWA Fund (ii) Local Government Support Unit (LGSU) The objectives and functions of these two organisations are separate and specific. The objective of the HYSAWA Fund is to channel the implementation funds to the demanding/applying UPs, while the objective of the LGSU is to support the UP in planning and preparing schemes for availing the funding opportunities from the HYSAWA Fund. The organisational structure and institutional arrangement for the HYSAWA Project is shown in Figure 3.A. The roles and responsibilities of the two different set-ups under the project are narrated below. GOB DANIDA NPD Accounts WSS in 200 Unions in NW Districts HYSAWA FUND (Demand Supply) WSS in 147 Coastal Unions WSS in 350 Unions supported by NGO-F Demand responsive training, studies by facilitating agencies like NILG, DPHE, etc. Support Organisations for UPs LOCAL GOVT SUPPORT UNIT (Supply Driven) Central and District Level Support Sector capacity development, logistics, etc. Figure 3.A: Project Organisational Structure 23

33 3.2.1 HYSAWA Fund The roles and responsibilities of the different organisations related to the HYSAWA Fund are: The HYSAWA Governing Board will be chaired by the Secretary LGD and will have members from relevant ministries and departments, government agencies (e.g. DPHE, a number of UP Chairmen from the Project area will be members on a rotation basis, LGED, and Health Department and civil societies (e.g. National UP Forum, NGO representative, etc.). The detailed composition of the Board will be suggested in the Project Implementation Guideline and approved by the PSC. The Board will approve HYSAWA operating procedures and annual budgets. It will also oversee the overall management of the HYSAWA Fund according to the approved procedures. The Managing Director of the HYSAWA Fund Management Office will act as the member-secretary of the Board. The HYSAWA Fund Management Office (FMO) will be established to administrate the funding for hygiene, sanitation and water supply schemes through UPs. It will have the following two main functions: (i) administration of the Fund, and (ii) monitoring and audit of UP accounts. The HYSAWA FMO will be an autonomous company established under the Companies Act The FMO will have full autonomy in its day-to-day operation under rules of business approved by the HY- SAWA Board. It will receive funds from GoB, Danida (through NPD) and other financing sources/organisation as per agreement with the government. The FMO will be a slim structure but staffed with highly qualified personnel. It will contract out most of its work and will retain only core functions. The staff of the FMO will be engaged on contracts following a transparent process of advertisement and interview with participation of EoD in the interview panel. Union Parishads will be at the centre of the Project activities at the field implementation level. The UPs will establish a UP Project Committee and open a separate project account for the purpose of scheme implementation. The UP Project Committee will coordinate with various organisations and personnel at UP level to support the Project as well as receive and retain the capacities developed through this and other projects. The UP will receive capacity building support from the SO appointed by the LGSU, NILG and other sources. Upon approval of relevant fund application, the FMO will send funds directly to the project account of the UP. The UPs will be responsible for planning, processing and implementation of the community schemes. Community schemes or their items costing less than an agreed threshold amount (e.g. Taka 75,000 as authorised in the guidelines of Union Parishad Development Fund (UPDF) will be implemented by the UPs through Project Committees in accordance with the existing system. For items exceeding the threshold amount, the UPs will invite open tenders or quotations for selecting the service provider, and manage the whole process of procurement. UPs will also contract local NGOs. The detailed modalities will be specified in the Project Implementation Guidelines. Gram Sarkars have recently been established at the ward level and are still in the process of emerging as prospective local government entities. The Gram Sarkar will be the institutional linkage between the VDFs and UP. It will play a facilitating role, and the community scheme proposals from the VDF will be formally sent to the UP through the Gram Sarkar. 24

34 Village Development Forum (VDF): The villagers will organise themselves to form a VDF. It will play a key role in community scheme identification and preparation according to their priorities. A local NGO, appointed by the UP, will work as facilitators and provide necessary social mobilisation support (training, motivation, etc.) to the VDF in undertaking the above activities. The VDF will be responsible for O&M of installed community based facilities and follow up activities required to continue good hygiene and sanitation practice. Local NGOs: The local NGOs will build the capacity of the villagers for participatory planning, identification and preparation of community schemes. They will also assist the villagers in setting up a Village Development Forum (VDF) to implement certain scheme items (motivation, monitoring, etc.) and to take over the responsibility of O&M of the community based facilities provided under the project. The SO will organise orientation sessions for the NGO staff with assistance from the relevant government agencies. The input of the NGOs in the Project will be designed on the basis of a gradually reducing scale and an exit strategy will be in place from the beginning. The NGOs will have a local base and have similar working experience in the locality. The SO will assist the UPs in short listing NGO and in the contracting process. Local Suppliers, Contractors: Local suppliers, contractors, latrine producers, etc. will offer, and on the formal request of UPs, provide services in the implementation of the WSS schemes and hygiene and sanitation promotion activities Local Government Support Unit (LGSU) The LGSU will be headed by a PD appointed by the LGD (either from LGD or DPHE) at level of Joint or Deputy Secretary or Additional Chief Engineer. S/he will be the administrative head of the LGSU and will provide necessary administrative support from the Bangladesh Government side. An international recruited Senior Adviser will provide assistance to the PD and will be a co-signatory to the LGSU account. The roles and responsibilities of the Project Director and Senior Adviser are shown in Annex 4. The main function of LGSU is to arrange for necessary capacity support to the UPs to enable them to use the funding available in HYSAWA Fund. The LGSU will arrange capacity support from the different government institutions at district and Upazila levels. A SO from the private sector will also be appointed to carry out the activities at district, Upazila and UP levels. The LGSU will furthermore establish linkages with other projects under WSSP II and other related projects for effective coordination and synergy. The functions of the different organisations that would provide capacity support to the UPs are described below. Government Agencies: Among the government agencies, DPHE and Health Department are expected to provide significant specialised inputs to the project through their existing structure. Representatives of relevant government departments will be included in project related committees at the UP, Upazila, District and National levels to enable the UPs to draw on the experience and expertise of the government line agencies. Institutions at District Level: The office of the Executive Engineer (EE), DPHE will be the focal point for the Project. The EE in cooperation with the LGSU will 25

35 guide the SO in providing necessary capacity support to the UP in their planning and implementation of schemes. The EE will also provide guidance to the Upazila level organisations and arrange for specialised technical support when required. Institutions at Upazila Level: The Upazila Development Coordination Committee (UDCC) will be the focal point for the Project at Upazila level. The UNO (Head of the government administrative unit at Upazila) will ensure necessary administrative support to the Project. S/he will organise human and other resources from various sectors available at the Upazila level and motivate and coordinate those resources particularly for behavioural change and sanitation promotion works. The scheme proposals for UPs will be placed in the UDCC meeting for validation. The Sub Assistant Engineer (SAE) of DPHE will be the focal person for the HYSAWA Project in the UDCC. S/he will provide technical assistance to the UPs in case of special technical needs, check the technical parameters using a technical checklist during scheme validation, compile monitoring reports from UPs and prepare reports for the UDCC and LGSU. If needed, the SO will provide assistance to SAE and UDCC in processing and validating the UP schemes. Support Organisation (SO): A SO will be engaged by LGSU to support the UPs in the management of the Project activities. The SO will supplement the capacity support available at the UP level from different government agencies. Given the very limited in-house technical and project management capacity of the UPs, they will need assistance from the SO in community scheme evaluation, processing them and managing their implementation. The SO will be a mobile unit travelling from UP to UP with the capacity support package. It will use the tools (guidelines, manuals) that will be developed by LGSU with the help of specialised organisations (e.g. NGO Forum, International Training Network (ITN), NILG, private firms, etc.). The SO will have a base office at the Upazila headquarters and a coordinating office at district level, covering one or two districts. The SO will need to have social as well as technical and project management skills. As an example, a National/Regional NGO and an engineering consulting firm could jointly make a consortium. 26

36 4 FINANCIAL MANAGEMENT AND PROCUREMENT The Project financial management will follow a well-defined and transparent set-up. The NPD Office will provide strategic guidelines and monitoring support, and the SPS SC will approve annual budgets and expenditure statements of the Project. The PD for the LGSU and the Danida Adviser will be the jointly signatory of the accounts for the LGSU. A Project Implementation Guideline to specify financial management at different levels will be prepared during the inception period, and be subject to the formal endorsement of the LGD and the Embassy of Denmark (EoD). Fund management, accounting and reporting will be in line with the GoB rules as well as be in accordance with the Danida Financial Management Guidelines as well as any other rules/accounts manual(s) issued by the EoD in Dhaka. GOB DANIDA NPD Accounts WSS in 200 Unions in NW Districts HYSAWA FUND (Demand Supply) WSS in 147 Coastal Unions WSS in 350 Unions supported by NGO-F Demand responsive training, studies by facilitating agencies like NILG, DPHE, etc. Support Organisations for UPs LOCAL GOVT SUPPORT UNIT (Supply Driven) Central and District Level Support Sector capacity development, logistics, etc. Figure 4.A: Fund flows to and from the HYSAWA Fund 27

37 4.1 Project Fund Management The Project will have two distinct sections: the HYSAWA Fund and the LGSU. Both the sections will receive separate funds form the NPD Office for which they would be individually accountable. The HYSAWA Fund will basically be demand driven, it will, upon application, provide grants for schemes prepared by eligible UPs. The LGSU fund will mainly be supply driven; it will facilitate necessary capacity support for the UPs as well as for the supporting activities at the district and national levels. GoB will allocate its estimated yearly amount in the respective ADPs against the Project and will release funds quarterly as per normal government procedure. The NPD Office will separate the total project allocation into two parts, one for HYSAWA Fund and another for LGSU, and will transfer these funds to HYSAWA Fund accounts and to Project Director LGSU, respectively. Further specific modalities will be determined by the NPD in the financial procedures to be established by the NPD during the inception phase. To underline that the HYSAWA Fund potentially should be a general funding mechanism for the sector, the possibility of GoB funding being transferred directly to the HYSAWA Fund should be considered so that the GoB funding procedures are not linked to the Danida programme set-up. As per normal GoB procedure, separate allocations for CD/VAT will be made in the ADPs and GoB/LGD will make necessary arrangement to make payments for CD/VAT. A schematic diagram of fund flows is shown in Figure 4.A. The financial management processes of both the sections are described in the following sections HYSAWA Fund Management As Chairman of the HYSAWA Governing Board, the Secretary of LGD will oversee the financial management process whereas the Managing Director of the HYSASA FMO being its Chief Executive Officer will be responsible for the operation and accounts of the Fund. A special bank account, named HYSAWA Fund, will be opened by the LGD to receive funds from Danida and GoB. The Danida contribution for the HYSAWA Fund will be channelled from the EoD, Dhaka to the NPD Office (together with other project funds) who would subsequently transfer the funds to the HYSAWA Fund. Fund Management at FMO Level Before each financial year, FMO will prepare an estimated yearly budget to cover the financial requirements for (i) UP managed schemes, (ii) payments for different contracts that are managed by the FMO e.g. audits and (iii) its own management costs. It will submit the yearly budget to the Governing Board for review and approval. The budget for the Danida funding for the HYSAWA Fund will be approved by the SPS SC. Once the budget is approved, FMO will submit a request for transfer of funds from NPD Office to the HYSAWA account. The funding request will be supported by a fund utilisation statement for the last year, including reconciliation of the advance amount and the estimate for the coming year. 28

38 At the start of the Project, NPD will transfer an estimated quarterly requirement as advance to the HYSAWA account to get started with preparatory works and initial payments. Fund Management at UP level The UPs will be responsible for fund management at the field level. The detailed procedures for planning, budgeting and implementation at the field level by UPs and other partners like the village organisations, Gram Sarkar, Upazila level government administrative units and line agencies are given in Annex 3. The UPs will open a separate bank account (HYSAWA Account) for the Project. They will receive funds directly from FMO after the schemes have been validated by the UDCC. Funds will be released in instalments the first instalment will be released as soon as the UP schemes are approved by the FMO and the subsequent instalments upon reaching some predetermined milestones. The Secretary of UP will be responsible for fund management and will keep record of expenditure, prepare financial reports and send these to the FMO. He will receive on-the-job training from the SO. The UP Facilitator, hired and trained by the SO, will be placed to the UP for the Project period. S/he will, among other activities, assist the UP secretary in financial management. Community Fund Management The matching contribution for water supply and sanitation facilities will be deposited to the separate accounts maintained by UP. In the case of self-help items like household sanitation, the villagers will directly and fully contribute cash and labour LGSU Fund Management The PD of the LGSU will be responsible for the overall management of the fund allocated to the LGSU. Funds from the NPD Office will be transferred to the accounts of the PD LGSU. The PD will be assisted by a Danida Senior Adviser who will be cosignatory of the LGSU accounts. To reduce administrative cost, the accounts of the LGSU will initially be maintained by the accounts section of the Coastal Belt WSS Project (under the WSSPS II). Once the Costal Belt Project will be completed in 2008, the accounts section will then be transferred to the LGSU section. Fund Management at District Level At the district level, the Executive Engineer (EE) DPHE will be the focal point to arrange supply driven capacity support to the UPs. The LGSU will transfer the required funds to an account for the Project established by the EE DPHE. The EE will be assisted by a Project Officer appointed by the LGSU who will be the co-signatory of expenses under the EE account related to project. The detailed financial procedures will be specified in the Project Implementation Guideline Project Scope and Budget Adjustments The Project, especially the HYSAWA Fund section, is demand responsive, which is expected to adapt itself to the actual demand and changing implementation requirements. 29

39 To accommodate this, the FMO will be authorised to make certain adjustments within the yearly budgets, provided that the adjustment for each budget line will not exceed a predetermined percentage (normally 10%, to be determined by the Board and to be specified in the PIG). A similar flexibility may also be considered for the LGSU. In case of a need for major change in the scope of the Project, implementation modalities or budget, the MD of the FMO or the PD of the LGSU will inform the NPD Office with specific proposals for changes. The NPD Office will review the proposal and may recommend its acceptance. Subsequently, the FMO MD or the LGSU PD will seek formal approval from the SPS PSC. 4.2 Project Accounting Principles and Procedures for Reporting The MD of HYSAWA Fund and the PD of the LGSU will each be responsible for managing the funds allocated to them. Accounting for GoB funds will be in line with GoB rules and regulations. Accounting for Danish funds shall, in addition to complying with GoB procedures, be in accordance with Danida rules and regulations. The Danida Senior Adviser at the LGSU will assist the PD in the management, accounting and financial reporting on Danida funds in accordance with the Danida procedures. At the District level, a Danida Project Officer will assist the EE DPHE in establishing a proper accounting system and in financial monitoring. The EE will report to the PD LGSU for matters related to the project. At the UP level, the SO will assist in establishing an appropriate accounting system. The UPs shall maintain proper books of accounts and records in line with procedures described in the PIG. Such records will present a clear picture of the financial status of the community schemes. To ensure transparency there will be systems for mandatory public disclosure of financial status and progress of works. The detailed procedures and formats will be included in the Project Implementation Guideline. The account systems will include, as a minimum, the following: Means to ensure that funds used are appropriately accounted for Secure accounting systems Rules for the authorisation of vouchers, cheques etc Records of cash and bank assets and liability for them Control of the project budget Supervision of petty cash Maintenance and control of stores, and Control of vehicles. For both the HYSAWA Fund and the LGSU, financial reporting will have to meet the requirements of both of the GoB and Danida. Reporting shall thus be done against the budget lines presented in this document and in the GoB Development Project Proforma. In the months of January and July each year, the project shall present a detailed financial 30

40 report showing the approved budget for the past year, the expenditures over the past year, and the proposed budget for the next year. This system of annual rolling budgeting and financial reporting ensures that annual reporting requirements of both the GoB (July- Jun) and Danida (Jan-Dec) will be met. 4.3 Project Procurement All procurement under the Project shall be carried out in line with existing GoB and Danida rules and regulations. For procurement of some major goods and services (e.g. procurement of international consultancy services and imported equipment, if any), Danida rules such as those specified in relevant Aid Management Guidelines and EU directives may apply. In these cases, payments will normally also be made from the EoD directly. For the local procurements of goods and services by the LGSU, the District EEs (under LGSU section) and by the UPs for the implementation of community schemes, GoB rules such as those specified in the Public Procurement Regulations 2003 will normally apply. In line with Danida s action plan against corruption, all procurement rules and regulations adopted by the Project are subject to EoD/Danida review and approval. 4.4 Project Auditing The HYSAWA FMO accounts and UP HYSAWA accounts under the HYSAWA Fund and the LGSU accounts at the central and district levels under the LGSU will be subject to annual audits. By mutual arrangement, either Danida or LGD may initiate the audit by appointing a competent, local auditor from an EoD-approved list of qualified accounting firms in Bangladesh. These audits will take place in accordance with Danida s procedures and also in accordance with GoB rules and procedures. In addition to the annual audits, the Project may also make arrangements for internal audits, both on a regular and ad-hoc basis. Such arrangements shall be duly communicated to, and the relevant reports shared with GoB and Danida. Apart from the above, GoB and the Government of Denmark reserve the right to initiate any other audits, including technical audits, value-for-money studies, etc. 31

41 5 MONITORING, REPORTING, REVIEWS AND EVALUATION 5.1 Monitoring and Reporting The LGSU and the HYSAWA FMO will each be responsible for establishing a comprehensive Management Information System (MIS) at all levels of the project to report the outstanding issues to relevant authorities for corrective actions. The LGSU will mainly focus on monitoring the capacity support elements while FMO will monitor the utilisation of funding. At the beginning of the Project, LGSU will formulate a detail Monitoring and Evaluation Manual (Part of the Project Implementation Guideline) to specify the monitoring parameters, role of different actors, reporting formats and processing systems. The project monitoring system will focus on monitoring the key activity of implementation of WSS schemes. A general description of the Project monitoring procedure is given below. Community level - A community monitoring system will be established where the communities, through the VDFs, will monitor village level activities, particularly the behaviour change and environmental sanitation parameters (stopping open defecation, installation and use of latrines, hand washing, homestead cleanliness, etc.). Participatory monitoring tools like pictorial monitoring charts will be used. Special women group meetings will furthermore be encouraged and facilitated. The VDFs will discuss the monitoring outcomes and take corrective actions if possible. The VDFs will, through a monitoring format included in the PIG, report the monitoring results, action taken and outstanding issues to the respective UPs. During the beginning of the community level activities the local NGOs will support the VDFs in using the monitoring tools and techniques, but gradually, with the development of the VDF capacities, the VDFs will be able to self-monitor the village activities. UP level Every participating UP shall have specific responsibilities in progress monitoring and reporting of the status of different works and contracts (design completed, tender called, work order issued, progress of hardware and software works, etc.). The Project Committee formed for the purpose of the Project, will be responsible for monitoring and reporting. The committee will also compile and analyse the monitoring reports from different villages and take remedial measures. The committee will prepare a consolidated report on the status of the Project where both software and hardware activities, as well as the financial status, will be incorporated. The NGOs will assist in processing the software part of the report, while the SO will assist in the overall reporting. The UPs will send the UP progress report to the UDCC (through SAE DPHE) with a note (standard format) mentioning the outstanding issues, actions taken by the UP and the villagers, and remaining actions to be taken by higher level authorities. Upazila level - SAE DPHE will act as the focal person at the UDCC and will coordinate among different offices at Upazila level. The SO will assist the DPHE SAE and the UDCC in compiling reports from different UPs and prepare a consolidated Upazila report. This report will be discussed in regular UDCC monthly review meetings and appropriate actions possible at the Upazila level will be taken. 32

42 An Upazila progress report with a note mentioning the outstanding issues will be sent to the District level EE with a copy to the SO at the District level. District level - The EE DPHE with assistance of the Danida Project Officer and the SO at the district level will compile the monitoring reports from the UDCCs and other levels. The detailed reporting formats for the EE and SO will be prepared in the Monitoring and Evaluation Manual. The EE DPHE will try to resolve outstanding issues, consult other relevant government agencies at the district level and send a district monitoring report to the PD LGSU and the Managing Director of FMO mentioning the outstanding issues. Headquarters level The LGSU and HYSAWA FMO will both monitor the respective activities, the details of which will be worked out in the Monitoring and Evaluation Manual (as part of the PIG). They will analyse the progress reports from district levels and take initiatives to resolve issues at their levels. They will screen for outstanding issues and forward them to the SPS PSC and HYSAWA Board for appropriate action. The LGSU will provide special attention to identifying strategic issues and the PD will initiate the process of formally approaching the concerned line agencies, government units or other organisations for assistance in resolving the issues. The LGSU and FMO will each produce an Inception Report six months after commencement The LGSU and FMO will furthermore prepare progress reports including the financial status of the Project. Annual, rolling, progress reports will be prepared every six months presenting physical and financial progress during the past twelve months against approved plans and budgets. The progress reports will also include detailed work plans and budgets for the following twelve-month period for discussion and approval by the HYSAWA Board and SPS-PSC. These reports will be intended for specific purposes like for project management itself, Government (e.g., IMED) reports in their prescribed formats, and progress reports for Danida, etc.. LGSU and FMO will also provide feedback to the Upazilas, UPs and villages on the action taken, and to advise them on taking some relevant actions from their ends. 5.2 Monitoring Indicators Project performances in terms of achieving progress and outputs of interventions will be routinely monitored. A detailed Monitoring and Evaluation (M&E) matrix describing specific sets of indicators against of each output of the Project is given in Table 5.1. Proposed indicators for addressing and mainstreaming cross-cutting issues are shown in Table 5.2. Project Immediate Objectives/Outputs Indicators Objective 1. Improve hygiene behaviour and practices Output A1.1 & A2.1: Improved and sustainable hygiene behaviour/practise achieved in the participating communities in the NW and Coastal Belt Districts. % of households in Project areas washing their hands with soap/ash after defecation/ before handling foods Means of verifications Baseline Survey Report and Monitoring reports from local NGOs 33

43 Project Immediate Objectives/Outputs Indicators Objective 2. To promote community-led sanitation activities Output A1.2 & A2.2 Improved access to sanitation facilities and its proper use achieved in the participating communities in the NW and Coastal Belt Districts. % of households in Project areas having access to and use hygienic sanitation. % of hardcore poor households in Project areas having access to and use hygienic sanitation Objective 3. Increase the coverage of safe water supply services for the poor Output A1.3 & A2.3 & A3.3: Access to safe water source and safe water use increased in the participating communities in the NW, Coastal Belt Districts and NGO-F Unions. % of households in Project areas with access to a functional, adequate, safe and sustainable drinking water supply facility within 50 meters distance Means of verifications Baseline Survey Report and Monitoring reports from local NGOs Monitoring reports from UPs and SO. Objective 4. To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels to play the roles required to achieve the above three immediate objectives Output A1.4 & A2.4: Technical Number of test wells installed by DPHE Monitoring reports from UPs and management capacities of in the project areas. and SO. LGIs increased through support Number of training courses conducted from DPHE and NILG through by NILG HYSAWA FMO. % of bill collection efficiencies increased Output B4.1 & B4.2: UPs capacities developed to support community to formulate schemes, appraise them and manage their implementation Output B4.3 Technical, management and facilitating capacities of DPHE and private sector developed. in the Pourashavas Number of UPs capable of providing WSS Services Number of schemes validated by UDCC and approved by FMO Project Implementation Guideline prepared and used Number of private latrine producers trained Objective 5. To promote greater devolution of administrative and financial authority to local government institutions Output B5.1 Government agencies develop capacities at central and district levels to respond to demand driven decentralised service delivery. Table 5.1 Project Monitoring Indicators LGIs exercise the administrative and financial authorities delegated to them Number of experience sharing events held Number of policy reform initiated by LGD. Monitoring reports from EEs Progress reports from LGSU and EEs Studies and reports prepared by LGSU and FMO Review Mission reports Outcome/Impact Indicator Means of Verification 1. General recognition for crosscutting issues. Issues fully mainstreamed and routinely addressed in WSS Sector Planning and Implementation Relevant indicators for cross-cutting issues incorporated in SDP and Sector MIS Review of documents, Progress reports and work plans 2. Gender balanced approaches in WSS service delivery Gender issues included in relevant WSS manuals, training courses etc. Proportion of men and women members in VDFs and WSS user groups in Project areas Proportion of men and women in relevant Project organisations (project staff, NGOs, etc.) 3. Culture and Development Cultural issues included in relevant WSS manuals, training courses etc. Review of documents Progress reports Review of staff field reports Progress reports Review of staff field reports Review of documents 34

44 Outcome/Impact Indicator Means of Verification 4. Rights-based approaches in WSS service delivery mainstreamed 5. Good governance in relation to WSS service delivery promoted and mainstreamed 6. Environmental sustainability in WSS Service delivery promoted and mainstreamed 7. Increased overall awareness on HIV/AIDS Criteria for identification of hardcore poor, disabled and other disadvantaged groups improved/developed and routinely incorporated in WSS documents, guidelines and designs. Number of hardcore poor, disabled, and other marginalized groups with access to safe WSS services Incidence of human rights violations (child labour, employment conditions, etc.) in the implementation of WSS activities in Project areas Good governance principles and guidelines fully incorporated in WSS manuals Democratic, participatory decision-making in WSS planning and implementation Steps taken to promote publication / circulation of proposals, LGI agendas and decisions; NGO and CBO plans and decisions, administrative processes and procedures etc. Environmental considerations and EIA principles and guidelines incorporated in WSS manuals HIV/AIDS issues included in syllabus for training courses, teachers manuals, community mobilisation guidelines etc. Review of documents, thematic reviews and sector reviews Relevant Projects staffs field reports Post and ex-post surveys Progress reports Review of documents Review/assessments of decision-making processes Review of minutes/proceedings Progress reports, Review of documents and assessment of actual processes Review of documents, Project progress reports Table 5.2 Indicators for addressing and mainstreaming cross-cutting issues 5.3 Reviews and Evaluation Project performance will be reviewed as part of the joint annual Sector Review. These reviews can recommend any necessary adjustments or improvements to the Project interventions. The Project may also be subject to technical or thematic reviews. These reviews can be initiated either by the Project or the NPD. The basis for the project reviews will be a baseline study to be carried out during the inception phase as well as during project preparations for each sub-project, routine monitoring reports, and the annual, rolling, progress reports prepared every six months. Periodic field visits and specific studies may also be carried out. The first formal Review of the Project objectives and outputs is expected to take place one year after start of the Project, and will focus on the outputs of the inception phase (e.g., the Project Implementation Guideline and baseline studies), the institutional arrangements, the community schemes planning processes, funding mechanisms, and the monitoring systems. After Project completion an evaluation may be undertaken to measure the overall impact of the Project and identify lessons for wider application of the Project concepts. 35

45 6 ASSUMPTIONS, RISKS AND PRECONDITIONS Successful implementation of the HYSAWA Project assumes that: The decentralisation process continues in Bangladesh DPHE staff at different levels will cooperate actively in the project activities The UPs will develop the necessary capacity to plan and administer the implementation at local level. The risks underlying these assumptions have been identified and are presented below. The risks are grouped as risks to goal, risks to objective and risks to output and activities. The risks mitigation measures are also suggested against each risk cluster. The risks are rated as high, medium and low, but no high risk factor was identified. Risks Risks Mitigation Measure Risks Rating To Goal - Strengthening process of LGIs may lose its momentum due to shift of focus or priority of reforms. - Lack of political will of some quarters to empower LGIs through increased autonomy in administration, grant and revenue raising that are required to build their management capacity. - Change in support level to LGIs with the change in government To Objectives - The model of devolution of authority to LGIs may not be acceptable to the policy makers. - DPHE, LGED and other line agencies are used to working under supply driven mode. There is a risk that those agencies may not like and may not play their envisaged role in the proposed demand driven process. To output and Activities - LGSU may find difficulties to obtain support from and integrate with the mainstream DPHE activities and may start working in isolation. - Communities may not develop confidence in UPs to provide services. - Some local staff and local power structure may not be willing to let UPs play the focal roles. - Demonstrate success story of similar kind of project and continue to earn peoples confidence. This will create a pressure on government not to shift its policy. - Undertake appropriate knowledge sharing events - Ensuring autonomy of the FMO and bottom-up voice from the communities and UPs. - Ensure guidance from LGD and arrange frequent experience sharing events among DPHE, LGSU and HYSAWA FMO. - Ensure mandatory disclosure of financial transition and transparent modalities of community scheme selection. - Ensure appropriate institutional arrangement and supervision from higher levels of authority. M M L L L M L M 36

46 Risks Risks Mitigation Measure Risks Rating - The Project has provisions for water supply, sanitation and hygiene promotion. However some people may see these provisions as an additional work for them. Therefore there is a risk that the poor are unwilling to bear the cost of the provisions particularly the latrine costs. - Contracting process for implementation may be influenced or interfered with by local power structure. - Recruitment process for the management support units may be influenced by political power. - Natural calamities like cyclone or floods may disrupt implementation of the Project - Ensure strong motivational activities for the community to understand the severity of the problem and act accordingly. - Ensure transparency in selecting SO and contractors. - Ensure transparency in all recruitment process. - Properly use the emergency support items in the Project budget M M L L H - High, M - Medium, L - Low Assumption is further that LGD will arrange issuance of necessary Government Orders to facilitate and direct the establishment of the envisaged institutional arrangement between UPs and various government agencies like DPHE, Health Department and the Upazila administrative units. 37

47 7 PROJECT IMPLEMENTATION PLAN The Project implementation plan is divided into the two sections: (i) HYSAWA Fund, and (ii) LGSU. The schedule of implementation of the activities of the two sections is shown in Figure 7.A and is explained below. The PD of LGSU will produce an Inception Report six months after commencement that will be tabled at the SPS CG and compared and coordinated with the inception reports of the other Projects. All inception reports will be presented to the SPS PSC at its first meeting for guidance and approval. Activity HYSAWA Fund: Preparatory Works (Establishment of Fund, Setting up FMO Office, etc.) Operations of HYSAWA Fund Training of UPs by NILG Implementation of WSS schemes in NW districts Implementation of WSS schemes in 350 UPs countrywide supported by NGO-F Implementation of WSS schemes in Coastal belt districts. Institutional development support to Pourashavas in coastal best districts LGSU: Baseline studies, Detailed planning and preparation of Inception Report Establishment and operations of the LGSU and support at central and district levels Preparation of procedures for HY- SAWA Fund, project implementation guidelines, etc. Engagement and operations of SO at district level Figure 7.A Project Implementation Plan Detailed description of the project implementation is provided in Annex 3 38

48 ANNEX 1 DETAILED BUDGET 39

49 A-1: Overall Budget per Objective, Output and Activity % Cost sharing per act. HYSAWA Project Budget (amounts in 1000 DKK) Total Danida GOB Commu Ref no Objectives/ Output/ Activities nity Capital Investments Danida Budgets Danida GoB Com. Cont. A.1 HYSAWA Fund - 3 NW Districts 124,486 31,100 24,069 1,479 56,649 14,174 53,663 Obj.1 To improve hygiene behaviours/practices 9,692 7,753 7,753 1,938 Output A1.1 Improved and sustainable hygiene behaviour/practise achieved in the participating communities in NW Districts 9,692 7,753 7,753 1,938 A1.1.1 Local NGO hygiene promotion support (50% of NGO cost) 9,692 80% 20% 7,753 7,753 1,938 Obj.2 To promote community-led total sanitation 50,411 4,480 4,652 9,132 2,283 38,996 Output A1.2 Improved access to sanitation facilities and its proper use achieved in 50,411 4,480 4,652 9,132 2,283 the participating communities in NW Districts 38,996 A1.2.1 Local NGO sanitation promotion support (30% of NGO cost) 5,815 80% 20% 4,652 4,652 1,163 A1.2.2 Environmental Sanitation 37, % 37,596 A1.2.3 Community/School Sanitaton 3,550 64% 16% 20% 2,272 2, A1.2.4 Environmental Sanitation packages in peri ubran areas 3,450 64% 16% 20% 2,208 2, Obj.3 To increase the coverage of safe water supply services 46,162 22,095 3,101 25,196 6,299 14,667 Output A1.3 Access to safe water source and safe water use increased in the 46,162 22,095 3,101 25,196 6,299 participating communities in NW Districts 14,667 A1.3.1 Local NGO water use promotion support (20% of NGO cost) 3,877 80% 20% 3,101 3, A1.3.2 DSP Tubewells 12,986 64% 16% 20% 8,311 8,311 2,078 2,597 A1.3.3 Alternative water supply options (DWs, PSF, RWHS, etc.) 3,200 64% 16% 20% 2,048 2, A1.3.4 Piped WS (especially for arsenic contaminated areas) 5,400 64% 16% 20% 3,456 3, ,080 A1.3.5 Peri Urban Piped Water Supply 20,700 40% 10% 50% 8,280 8,280 2,070 10,350 Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 18,222 4,526 8,563 1,479 14,568 3,654 Output A1.4 Technical and management capacities of LGIs in NW Districts increased through support from DPHE, NILG and HYSAWA FMO. 18,222 4,526 8,563 1,479 14,568 3,654 A1.4.1 R & D, test wells, studies, etc by DPHE (2.5% of hardware) 1,264 80% 20% 1,011 1, A1.4.2 Management Cost to UP (2.5% of hardware cost) 1,264 80% 20% 1,011 1, A1.4.3 Incentative Fund to UP (10% of hardware cost) 5,057 80% 20% 4,046 4,046 1,011 A1.4.4 Training by NILG to about 200 UP members 3, % 3,952 3,952 A1.4.5 HYSAWA Fund Management Office (FMO) 4,884 80% 20% 3, , A1.4.6 Logistics - HYSAWA FMO % 20% A1.4.7 CD/VAT HYSAWA FMO 1, % 1,000 Recurrent Cost TA Total Total 40

50 % Cost sharing per act. HYSAWA Project Budget (amounts in 1000 DKK) Total Danida GOB Commu Ref no Objectives/ Output/ Activities nity Capital Investments Danida Budgets Danida GoB Com. Cont. A.2 HYSAWA Fund - Coastal Belt Districts 88,512 23,987 15, ,516 9,333 38,663 Obj.1 To improve hygiene behaviours/practices 7,508 6,006 6,006 1,502 Output A2.1 Improved and sustainable hygiene behaviour/practise achieved in the participating communities in Coastal Belt Districts 7,508 6,006 6,006 1,502 A2.1.1 Local NGO hygiene promotion support (50% of NGO cost) 7,508 80% 20% 6,006 6,006 1,502 Obj.2 To promote community-led total sanitation 38,455 1,248 3,604 4,852 1,213 32,390 Output A2.2 Improved access to sanitation facilities and its proper use achieved in the participating communities in Coastal Belt Districts 38,455 1,248 3,604 4,852 1,213 32,390 A2.2.1 Local NGO sanitation promotion support (30% of NGO cost) 4,505 80% 20% 3,604 3, A2.2.2 Environmental Sanitation 32, % 32,000 A2.2.3 Community Sanitation 1,950 64% 16% 20% 1,248 1, Obj.3 To increase the coverage of safe water supply services 34,368 20,074 2,402 22,476 5,619 6,273 Output A2.3 Access to safe water source and safe water use increased in the 34,368 20,074 2,402 22,476 5,619 participating communities in Coastal Belt Districts 6,273 A2.3.1 Local NGO water use promotion support (20% of NGO cost) 3,003 80% 20% 2,402 2, A2.3.2 Deep Tubewells 30,000 64% 16% 20% 19,200 19,200 4,800 6,000 A2.3.3 Mini piped water supply % 16% 20% A2.3.4 Rain Water Harvesting % 16% 20% A2.3.5 PSF % 16% 20% A2.3.6 Iron/Arsenic RU 15 64% 16% 20% A2.3.7 Other Alternatives % 16% 20% Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 8,182 2,665 3, , Output A2.4 Technical and management capacities of LGIs in Coastal Belt Districts increased through support from DPHE, NILG and HYSAWA FMO. 8,182 2,665 3, , A2.4.1 R & D, test wells, studies, etc by DPHE (2.5% of hardware) % 20% A2.4.2 Institutional Development in Coastal Urban areas % A2.4.3 Management Cost to UP (2.5% of hardware cost) % 20% A2.4.4 Incentative Fund to UP (10% of hardware cost) 3,332 80% 20% 2,665 2, A2.4.5 Training by NILG to about 146 UP members 2, % 2,885 2,885 A.3 HYSAWA Fund - NGO-F 9,800 6,272 6,272 1,568 1,960 Obj.3 To increase the coverage of safe water supply services 9,800 6,272 6,272 1,568 1,960 Output A3.3 Access to safe water source and safe water use increased in the 9,800 6,272 6,272 1,568 participating communities in the NGO-F supported Unions 1,960 A3.3.1 Tubewells 8,400 64% 16% 20% 5,376 5,376 1,344 1,680 A3.3.2 Alternative water supply options (DWs, PSF, RWHS, etc.) % 16% 20% A3.3.3 Piped WS (especially for arsenic contaminated areas) 1,000 64% 16% 20% Recurrent Cost TA Total Total 41

51 % Cost sharing per act. HYSAWA Project Budget (amounts in 1000 DKK) Total Danida GOB Commu Ref no Objectives/ Output/ Activities nity Capital Investments Danida Budgets Danida GoB Com. Cont. Recurrent Cost B. LG Support Unit 36,159 1,784 26,392 2,430 30,606 5,553 Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 27,081 1,284 23,297 24,581 2,500 Output B4.1 Capacities of 200 UPs in NW Districts developed to support community to formulate schemes, appraise them and manage their implementation 14,375 14,375 14,375 B4.1.1 Support Organizations at District Levels (NW) 2, % 2,430 2,430 B4.1.2 Support Organizations at Upazila Levels (NW) 11, % 11,178 11,178 B4.1.3 Facilitator at UP Levels (NW) % Output B4.2 Capacities of 146 UPs in Coastal Belt Districts developed to suuport community to formulate schemes, appraise them and manage their implementation 8,172 8,172 8,172 B4.2.1 Support Organizations at District Levels (Coastal) 1, % 1,620 1,620 B4.2.2 Support Organizations at Upazila Levels (Coastal) 6, % 6,156 6,156 B4.2.3 Facilitator at UP Levels (Coastal) % Output B4.3 Technical, management and facilitating capacities of DPHE, other govt. agencies and private sector increased 4,534 1, ,034 2,500 B4.3.1 Technical, management, training support by gov. agencies % 500 B4.3.2 Training Module Development % B4.3.3 Support to private sector on WSS 1, % 1,284 1,284 B4.3.4 Contingencies, support to UPs during disaster prepardness, special 2, % situation, emergency response, etc. 2,000 Obj.5 To promote greater devolution of administrative and financial authority to local government institutions in regard to Hygiene, Sanitation and Water Supply 9, ,095 2,430 6,025 3,053 Output B5.1 Government agencies develop capacities at central and district levels to respond to demand driven decentralised service delivery 9, ,095 2,430 6,025 3,053 B5.1.1 Project Director LG Support Unit 1, % 1,053 B5.1.2 Central Support Unit 2, % 2,430 2,430 B5.1.3 District Support Unit - NW Districts 1, % 1,377 1,377 B5.1.4 District Support Unit - Coastal Belt Districts % B5.1.5 Action Research and Knowlegde Management 1,000 50% 50% B5.1.6 Logistics - PD LGSU % B5.1.7 CD/VAT 1, % 1,500 Total 258,957 63,143 66,324 4, ,043 30,628 94,286 Contingencies 5 % of Danida Budget excluding TA 6,473 6,473 Total 265,431 63,143 66,324 4, ,517 30,628 94,286 TA Total Total 42

52 A-2: Annual Danida Budget per Objectives and Outputs HYSAWA Project Budget (amounts in 1000 DKK) Total Danida Annual Danida Budgets Ref no Objectives/ Output/ Activities Total A.1 HYSAWA Fund - 3 NW Districts 124,486 56,649 2,647 6,381 19,369 18,064 10,187 Obj.1 To improve hygiene behaviours/practices 9,692 7,753 1,551 2,326 2,326 1,551 Output A1.1 Improved and sustainable hygiene behaviour/practise achieved in the participating communities in NW Districts 9,692 7,753 1,551 2,326 2,326 1,551 Obj.2 To promote community-led total sanitation 50,411 9,132 1,602 2,964 2,964 1,602 Output A1.2 Improved access to sanitation facilities and its proper use achieved in the participating communities in NW Districts 50,411 9,132 1,602 2,964 2,964 1,602 Obj.3 To increase the coverage of safe water supply services 46,162 25, ,768 9,768 5,039 Output A1.3 Access to safe water source and safe water use increased in the participating communities in NW Districts 46,162 25, ,768 9,768 5,039 Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 18,222 14,568 2,647 2,608 4,311 3,007 1,995 Output A1.4 Technical and management capacities of LGIs in NW Districts increased through support from DPHE, NILG and HYSAWA FMO. 18,222 14,568 2,647 2,608 4,311 3,007 1,995 A.2 HYSAWA Fund - Coastal Belt Districts 88,512 40, ,210 18,960 16,625 Obj.1 To improve hygiene behaviours/practices 7,508 6,006 1,201 2,402 2,402 Output A2.1 Improved and sustainable hygiene behaviour/practise achieved in the participating communities in Coastal Belt Districts 7,508 6,006 1,201 2,402 2,402 Obj.2 To promote community-led total sanitation 38,455 4, ,065 2,065 Output A2.2 Improved access to sanitation facilities and its proper use achieved in the participating communities in Coastal Belt Districts 38,455 4, ,065 2,065 Obj.3 To increase the coverage of safe water supply services 34,368 22, ,998 10,998 Output A2.3 Access to safe water source and safe water use increased in the participating communities in Coastal Belt Districts 34,368 22, ,998 10,998 Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 8,182 7, ,807 3,495 1,159 Output A2.4 Technical and management capacities of LGIs in Coastal Belt Districts increased through support from DPHE, NILG and HYSAWA FMO. 8,182 7, ,807 3,495 1,159 A.3 HYSAWA Fund - NGO-F 9,800 6,272 2,509 2,509 1,254 Obj.3 To increase the coverage of safe water supply services 9,800 6,272 2,509 2,509 1,254 Output A3.3 Access to safe water source and safe water use increased in the participating communities in the NGO-F supported Unions 9,800 6,272 2,509 2,509 1,254 B. LG Support Unit 36,159 30,606 2,446 5,578 7,418 7,582 7,582 Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels Output B4.1 Capacities of 200 UPs in NW Districts developed to support community to formulate schemes, appraise them and manage their implementation Output B4.2 Capacities of 146 UPs in Coastal Belt Districts developed to suuport community to formulate schemes, appraise them and manage their implementation Output B4.3 Technical, management and facilitating capacities of DPHE, other govt. agencies and private sector increased Obj.5 To promote greater devolution of administrative and financial authority to local government institutions in regard to Hygiene, Sanitation and Water Supply Output B5.1 Government agencies develop capacities at central and district levels to respond to demand driven decentralised service delivery 27,081 24,581 1,001 4,133 6,373 6,537 6,537 14,375 14, ,450 3,450 3,450 3,450 8,172 8,172 2,615 2,778 2,778 4,534 2, ,078 6,025 1,445 1,445 1,045 1,045 1,045 9,078 6,025 1,445 1,445 1,045 1,045 1,045 Total 258, ,043 5,094 12,681 33,505 47,115 35,648 Contingencies 5 % of Danida Budget excluding TA 6,473 6,473 Total 265, ,517 5,094 12,681 33,505 47,115 35,648 43

53 A-3: Annual GoB Budget per Objective and Output HYSAWA Project Budget (amounts in 1000 DKK) Total GoB Budgets according to GOB Financial Year Ref no Objectives/ Output/ Activities Jan July July July July Total June 2006 June 2007 June 2008 June 2009 June 2010 July Dec 2010 A.1 HYSAWA Fund - 3 NW Districts 124,486 14, ,794 2,909 4,572 3,531 1,245 Obj.1 To improve hygiene behaviours/practices 9,692 1, Output A1.1 Improved and sustainable hygiene behaviour/practise achieved in the participating communities in NW Districts 9,692 1, Obj.2 To promote community-led total sanitation 50,411 2, Output A1.2 Improved access to sanitation facilities and its proper use achieved in the participating communities in NW Districts 50,411 2, Obj.3 To increase the coverage of safe water supply services 46,162 6, ,299 2,442 1, Output A1.3 Access to safe water source and safe water use increased in the participating communities in NW Districts 46,162 6, ,299 2,442 1, Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 18,222 3, , Output A1.4 Technical and management capacities of LGIs in NW Districts increased through support from DPHE, NILG and HYSAWA FMO. 18,222 3, , A.2 HYSAWA Fund - Coastal Belt Districts 88,512 9,333 3,017 4,349 1,967 Obj.1 To improve hygiene behaviours/practices 7,508 1, Output A2.1 Improved and sustainable hygiene behaviour/practise achieved in the participating communities in Coastal Belt Districts 7,508 1, Obj.2 To promote community-led total sanitation 38,455 1, Output A2.2 Improved access to sanitation facilities and its proper use achieved in the participating communities in Coastal Belt Districts 38,455 1, Obj.3 To increase the coverage of safe water supply services 34,368 5,619 1,495 2,749 1,375 Output A2.3 Access to safe water source and safe water use increased in the participating communities in Coastal Belt Districts 34,368 5,619 1,495 2,749 1,375 Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels 8, Output A2.4 Technical and management capacities of LGIs in Coastal Belt Districts increased through support from DPHE, NILG and HYSAWA FMO. 8, A.3 HYSAWA Fund - NGO-F 9,800 1, Obj.3 To increase the coverage of safe water supply services 9,800 1, Output A3.3 Access to safe water source and safe water use increased in the participating communities in the NGO-F supported Unions 9,800 1, B. LG Support Unit 36,159 5, , Obj.4 To strengthen the capacity of government, local government institutions and non-government stakeholders at all levels Output B4.1 Capacities of 200 UPs in NW Districts developed to support community to formulate schemes, appraise them and manage their implementation Output B4.2 Capacities of 146 UPs in Coastal Belt Districts developed to suuport community to formulate schemes, appraise them and manage their implementation Output B4.3 Technical, management and facilitating capacities of DPHE, other govt. agencies and private sector increased Obj.5 To promote greater devolution of administrative and financial authority to local government institutions in regard to Hygiene, Sanitation and Water Supply Output B5.1 Government agencies develop capacities at central and district levels to respond to demand driven decentralised service delivery 27,081 2, ,375 8,172 4,534 2, ,078 3, , ,078 3, , Total 258,957 30, ,004 4,133 9,127 9,262 3,824 Contingencies 5 % of Danida Budget excluding TA 6,473 Total 265,431 30, ,004 4,133 9,127 9,262 3,824 44

54 A-4: Budget Details and Unit Rates The Overall Activity Budget is based on the following unit rates and input of Local NGOs: COST ESTIMATE - LOCAL NGO Items Unit Rate Year 1 Year 2 Year 3 Total Amounts in BDT Nr Amount Nr Amount Nr Amount Nr Amount Local NGO for 1 UP 3 x Community. Organizer month , , , ,000 PRA for VDF formation sessions ,000 15,000 Training for UP & VDF sessions LS LS 20,000 20,000 10,000 50,000 BCC activities & aid materials LS LS 20,000 20,000 20,000 60,000 Documentaion & dissemination LS LS 10,000 10,000 10,000 30,000 Survey and monitoring LS LS 20,000 20,000 10,000 Exposure visits LS LS 5,000 10,000 15,000 Local Advoccay on goverence, LS LS 5,000 15,000 20,000 human rights, gender,culture and development Overhead, logistics cost (50%)(including management cost & logistics) 155, , , ,000 Total Cost for 1 UP 466, , ,000-1,365,000 Community Management Promotion for a UP 80 CD Facilitator (2person x 20 month , , ,000 1,920,000 villages) in a UP Cost 1 UP 576, , ,000 - The Overall Activity Budget is based on the following unit rates and input of the Support Organisation: COST ESTIMATE - SUPPORT ORGANISATION (SO) Amounts in BDT Items Unit Rate One Year Number Amount SO at Upa Zila level 1x Upazila Coordinator month 30, ,000 1x Accountant month 15, ,000 Training & Com Dev. Officer month 15, ,000 Overhead, logistics (50%) 360,000 Total 1 Upazila 1,080,000 Total 23 Upazilas Units 23 24,840,000 1x UP Facilatator per UP 142 1, ,704,000 1 UP Facilatator 1, ,000 Note : 3 district levels units NW & 8 Coastal Belt SO at District level 1x District Coordinator 50, ,000 1xEngineer month 30, ,000 1x Data Operator/Monitoring 20, ,000 officer Overhead, logistics (50%) 600,000 Total 1 District 1,800,000 45

55 The Overall Activity Budget is based on the following input and unit rates for staffing of the FMO: COST ESTIMATE - Staffing HYSAWA Fund Management Office (FMO) Items Rate per month Month Yearly Amount BDT Managing Director 120, ,440,000 Director Finance 80, ,000 Financial Officer 60, ,000 Programme Officer 60, ,000 Adminstrative Officer 60, ,000 Director Monitoring 80, ,000 MIS Specialst 60, ,000 National Consultants 150, ,000 Audits, Studies, etc. LS 1,000,000 Overhead Cost (including support staff and office) 20% 1,628,000 HYSAWA FMO in 1 year 9,768,000 HYSAWA FMO Cost in 5 year 48,840,000 COST ESTIMATE - Logistics HYSAWA FMO Items Rate Quantity Amount BDT 2 x Jeeps 2,000, ,000,000 Office Equipment and furnitures LS LS 2,000,000 Vehicle and recurring costs (per year) 400, ,000,000 TOTAL LOGISTICS 8,000,000 The Overall Activity Budget is based on the following unit rates for community mobilisation activities and water supply construction: Number 3-NW Districts Number Coastal Belt Number NGO Forum Unit Costs (1000 BDT) Unit Cost Unit Community sanitation 65 per facility 300 Env. Packages (Peri-urban) 500 per community 69 Water Supply Materials & Labour DHTW 50 per DHTW 6,000 Materials & Labour DSPTW 15 per DSPTW 15,364 Materials & Labour TW 8 per TW 10,500 Mini Pipe Scheme 1000 Pipe Scheme 8 10 Pipe Scheme 3000 Pipe Scheme 87 RWHS 15 per system 120 PSF 40 per system 60 Iron/Arsenic RU 10 per system 15 Alternative WS options dug wells, PSF, RWHS, etc. 40 per system 800 Alternatives 100 per system

56 The Overall Activity Budget is based on the following input and unit rates for the LGSU: COST ESTIMATE - Staffing Project Director LGSU Items Rate per month Month Yearly Amount BDT Project Director, LGSU 35, ,000 Executve Engineer, DPHE (NW) 20, ,000 Executve Engineer, DPHE (Coastal) 20, ,000 Accuntant 15, ,000 3x Support Staff 15, ,000 Overhead Cost 30 % (including utilities, office space, etc.) 486,000 PD LGSU Cost in 1 year 2,106,000 PD LGSU Cost in 5 years 10,530,000 COST ESTIMATE - Logistics Project Director LGSU Items Rate Quantity Amount BDT 3 x Jeeps 2,000, ,000,000 Office Equipment and furnitures LS LS 1,000,000 Vehicle and recurring costs (per year) 600, ,000,000 TOTAL LOGISTICS 8,000,000 COST ESTIMATE - Staffing Central Support Unit (attached to PD LG Support Unit) Items Rate per month Month Yearly Amount BDT 2x Danida National Advisor 100, ,400,000 2 X Support Staff 30, ,000 National Consultants 150, ,000 Overhead Expences 70, ,000 Total Cost for 1 year 4,860,000 Total Cost for 5 year 24,300,000 COST ESTIMATE - District Support (attached to Territorial EE, DPHE) Items Rate per Month Yearly Amount month BDT District Project Officer (Monitoring) 40, ,000 2 X Support Staff 10, ,000 Overhead Expences 25, ,000 Total Cost for 1 year 1,020,000 47

57 ANNEX 2 ORGANISATIONAL SET-UP OF WSSPS II 48

58 49 WSSPS Phase II, HYSAWA Project