Table-1: Overall Cost of the Flood

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1 EXECUTIVE SUMMARY Preliminary Damage and Needs Assessment Disaster Overview 1. Pakistan experienced extraordinary rainfall in mid-july 2010, which continued until September The result was unprecedented floods affecting the entire length of the country. The floods have been assessed to be the worst since According to the National Disaster Management Authority (NDMA) the rains/floods have affected over 20 million people. Additionally, flash floods and landslides triggered by the rain caused severe damage to infrastructure in the affected areas. Entire villages have been washed away, urban centers have been flooded, homes have been destroyed, and thousands of acres of crops and agricultural lands have been damaged with major soil erosion happening in some areas. 2. The overall recovery and reconstruction cost associated with the floods is estimated at approximately US$ 8.74 billion to billion 1, which includes estimated costs for relief, early recovery, and medium- to long-term reconstruction (Table 1). Table-1: Overall Cost of the Flood 3. This report focuses on an assessment of damage and medium- to long-term reconstruction costs. It has a companion report entitled "Pakistan Floods Emergency Response Plan", which has been prepared by the United Nations. These two reports have been coordinated to ensure consistency and facilitate coordination. About the Damage and Needs Assessment Objective 4. In the wake of the floods, the Government of Pakistan requested ADB and WB to lead the Damage and Needs Assessment (DNA) and the One UN to lead the Early Recovery Needs Assessment in parallel. The DNA assesses the extent of the damage and the required needs for rehabilitation and reconstruction of the damaged assets and infrastructure; and restoration of livelihoods and economic productivity. 5. The objective of the DNA is: "To provide the strategic underpinnings for medium- to long-term postfloods reconstruction, recovery planning, prioritization, and programming" 6. This report represents a quantification and validation of physical damage and presents sector level 1 Overall costs are presented as a range since reconstruction cost has multiple options 2 Relief, Early Recovery and Relief/Early Recovery estimates are from UN's Pakistan Floods Emergency Response Plan 3 Reconstruction costs range from low to high cost options 13

2 Pakistan Floods 2010 recovery and reconstruction strategies in respect of public and private infrastructure, services, and livelihoods. The quantification of corresponding needs is then done with reference to these two points, i.e. damage and sector level reconstruction strategies. Scope 7. The DNA focuses on medium- to long-term reconstruction and provides the guiding principles for recovery. An assessment of the damage and reconstruction strategies for each sector are provided in the detailed sector assessments. 8. With respect to financial costs the DNA has been generated against three assessment categories: Direct Damage refers to the monetary value of the completely or partially destroyed assets, such as social, physical and economic infrastructure immediately following a disaster. Wherever possible, the direct damage for assets is assessed in "as was" condition, i.e. at their book values; Indirect Losses are income losses, and comprise both the change of flow of goods and services and other economic flows such as increased expenses, curtailed production and diminished revenue, which arise from the direct damage to production capacity and social and economic infrastructure; Reconstruction Costs measure the cost of rebuilding lost assets and restoring lost services. It is generally assessed as the replacement cost with a premium added for building back smarter. Sectors 9. The seventeen sectors covered in this DNA can be broken down into four categories: (i) cross-cutting; (ii) social infrastructure; (iii) physical infrastructure; (iv) economic sectors. Table-2: Breakdown of Sectors Methodology 10. ADB and WB DNA core teams coordinated the assessment with the Economic Affairs Division, Planning Commission and National Disaster Management Authority at the federal level, and with the provincial/state/fata Planning and Development Departments and Disaster Management Authorities (or equivalents). Data collection for the DNA focused on secondary data available through various sources that primarily include the relevant provincial and district government departments. Data from district and tehsil level was collected by the government and verified and validated by the DNA sector teams. Under the DNA methodology, all secondary data received was closely scrutinized through var- 14

3 ious analyses, including statistical tools, rationality and plausibility checks and damage analysis across sectors. The data received by the DNA sector teams were validated through a number of measures including: field damage inspection visits by sector teams; interviews with stakeholders; desk review; satellite imagery and GIS data comparisons; and other plausibility checks. Based on the above, analytical work was undertaken by sector teams for a comparative pre- and post-disaster assessment of the infrastructure and services affected. Coordination 11. The DNA team, led by the World Bank and the Asian Development Bank, were supported by the One UN, and also by bilateral donors. GFDRR provided financial support as well as technical experts for satellite image analysis, DNA framework development, trainings and so on. Report Overview 12. The report consists of preliminary sections that contextualize the disaster by describing the background to the 2010 floods as well as Pakistan's social and economic context. The report then introduces guiding principles for reconstruction and explains in greater detail the methodology used to conduct the assessment. Next, the macro-economic impact of the floods is presented followed by a summary of the damage and needs for each sector. The report also suggests governance and institutional arrangements for implementing the reconstruction program along with an overview of cross-cutting approaches that should be taken into consideration, including social and environmental aspects, and disaster risk management and climate change considerations. The detailed sector analyses can be found in the annexes to this report. Each sector analysis gives a breakdown of damage and needs for each province as well as outlining sector-specific strategies for reconstruction. Summary Table of Total Damage and Reconstruction Needs 13. This report presents estimates for: (i) direct damage and indirect losses, estimated at approximately PKR 855 billion; and (ii) the cost of reconstruction needs ranging from PKR 578 billion (base case option) to 758 billion (recommended option). 14. The direct damage caused by the floods is estimated at PKR 552 billion (US$ 6.5 billion) while indirect losses amount to PKR 303 billion (US$ 3.6 billion). The agriculture, livestock and fisheries sector suffered the highest damages, calculated at PKR 429 billion (US$ 5.0 billion). Table 3 provides the detailed breakdown of the damage costs. 15. Total reconstruction cost is provided across the range of three options with option one as the base case and option three as the recommended option. The reconstruction cost for the base case is estimated at PKR 578 billion (US$ 6.8 billion) while for the recommended option costs are estimated at PKR 758 billion (US$ 8.9 billion). Table 4 provides the detailed breakdown of the reconstruction costs. - Preliminary Damage and Needs Assessment 15

4 Pakistan Floods 2010 Table-3: Estimate of Total Damage Costs by Sector 16

5 Preliminary Damage and Needs Assessment Table-4: Estimate of Total Reconstruction Costs by Sector 17

6 Pakistan Floods 2010 Table 5 below provides the breakdown of aforementioned costs into "physical reconstruction and procurable items" and "soft components". Table-5: Breakdown of Total Reconstruction Costs by Category * Soft components are an integral part of physical reconstruction and both need to be implemented together 18

7 Preliminary Damage and Needs Assessment Notes: a/ Private Sector & Industries : Enterprise Development Fund, cash subsidies, business restoration facilitation b/ Financial Sector : Partial credit guarantees / risk sharing facilities; re-scheduling of existing loans with interest rate subsidies; and refinancing line for liquidity support c/ Social Protection & Livelihoods : Livelihood support grants to the severely affected households for a period of 6 months 16. A breakdown of estimated damage and reconstruction costs by province/region is presented in Table 6. Table-6: Estimated Damage and Reconstruction Costs by Province/Area A. BACKGROUND OF THE 2010 FLOODS Overview 17. Over the course of the monsoon season in July and August 2010, Pakistan experienced the worst floods recorded in its history. Heavy rainfall caused flash and riverine floods in the north and north-western regions of Pakistan (parts of Khyber Pakhtunhwa [KP], Gilgit Baltistan [GB], Balochistan, and Azad Jammu and Kashmir [AJK]) that combined to create a moving body of water equal in dimension to the land mass of the United Kingdom travelling southwards. 18. The high-intensity rainfall in KP generated unprecedented flood peaks in the Swat River. 4 These floods severely damaged the Amandara Headworks and washed away the Munda Headworks, both major irrigation structures. 5 The combined flow of the Swat and Kabul Rivers generated another unprecedented flood peak at Nowshera town, causing severe damage. The flood waters travelled downstream through the barrages in Punjab and Sindh until they reached the Arabian Sea downstream of Kotri Barrage. Extreme high floods were recorded at the Chasma and Taunsa Barrages, and a near historic flood peak was also recorded at the Kotri Barrage. 4 The one-day rainfall recorded in KP on 29 July varied from 21 to 280 mm; on 30 July, 274 mm of rain was recorded in Peshawar. 5 A flood peak of 270,000 ft 3 sec-1 was recorded at Amandara and 300,000 ft 3 sec-1 at Munda Headworks. 19