Dhaka, the capital city and industrial and commercial center of Bangladesh, plays a significant role in the country’s rapid economic growth, which registered an annual average of 6.5% over the last 10 years. Transport sector interventions, however, are deemed necessary to address serious traffic congestion and the lack of an alternative mass transit network. In 2016, the government formulated the Revised Strategic Transport Plan (RSTP) as an urban transport master plan for Dhaka. The RSTP proposes five mass rapid transit (MRT) lines and two bus rapid transit lines along six distinct public transport corridors that will connect Dhaka’s central business district with surrounding satellite regional centers.

The proposed project readiness financing (PRF) will support the preparation and high project readiness of the ensuing loan to the People’s Republic of Bangladesh for the Dhaka Mass Rapid Transit Development Project Readiness Financing for Line 5, Southern Route. The Dhaka MRT Line 5 (Southern Route) will be constructed  Gabtoli and Dasher Kandi stations with a length of about 17.4 kilometers (km). The PRF will prepare the detailed feasibility study, engineering design, and procurement documents, and provide assistance in procurement related processes. The project is in line with ADB’s country partnership strategy, 2016–2020, which aims to ease infrastructure constraints by undertaking transformational investments in key sectors including transport. The proposed PRF is listed in ADB’s country operations business plan, 2019– 2021 for Bangladesh.

The impact of the project is the development of an essential and priority MRT line to create an effective public transport network in Dhaka, serving one of the few east–west corridors and providing intermodal stations with other MRT and BRT lines in the north– south direction. The outcome of the ensuing project is aligned with ADB’s operational priorities under Strategy 2030: (i) sustainable and climate-resilient urban transport with low levels of greenhouse gas emissions; (ii) an integrated approach for sustainable urban development through transitoriented development;1 (iii) safe, high-quality public transport with women-friendly designs; (iv) improved access to business and job opportunities, particularly for those living in surrounding areas; and (v) capacity development of the executing agency.

The PRF will support the preparation of a full-fledged feasibility study and engineering design for civil works and equipment components of MRT Line 5 (Southern Route).2 It will also provide support for carrying out topographical, geological, and hydrological investigations; traffic surveys; safeguard studies; economic and financial analyses; and other technical assessments needed for preparing the engineering design. Measures for climate and natural disaster resilience and features for the elderly, women, children, and people with disabilities will be integrated into the engineering design. Technical compatibility with other metro lines, where relevant, will be secured in the design specifications. The design will also include advanced technology, such as an automated ticketing and fare collection system with an integrated database for operations management. The PRF will help prepare procurement documents and activities in line with the ADB Procurement Policy (2017, as amended from time to time) and Procurement Regulations for ADB Borrowers (2017, as amended from time to time). The PRF will also support the executing agency by engaging individual consultants to review the consultant’s engineering design proposal because an underground metro is a relatively new concept for the agency and Bangladesh.

A financial management assessment (FMA) for the DMTCL was conducted in May 2019 in accordance with ADB’s Guidelines for the Financial Management and Analysis of Projects and Financial Due Diligence: A Methodology Note, and Technical Guidance Notes. 3 The FMA considered the capacity of the DMTCL, including funds-flow arrangements, staffing, accounting and financial reporting systems, financial information systems, and internal and external auditing arrangements. Based on the assessment, the key financial risks identified are 

(i) lack of experience of the DMTCL in implementing ADB-funded projects and lack of familiarity with ADB financial management requirements; (ii) vacant positions of all PIU staff, including finance and accounts positions; and 

(iii) necessity of strengthening internal auditing function at the DMTCL.

The DMTCL will disburse the project readiness loan proceeds following ADB’s Loan Disbursement Handbook (2017, as amended from time to time) and detailed arrangements agreed between the government and ADB. Online training for project staff on disbursement policies and procedures is available. Project staff are encouraged to avail of this training to help ensure efficient disbursement and fiduciary control.

ADB’s disbursement procedures (direct payment and/or reimbursement) will be used for withdrawal of project funds. The DMTCL will be responsible for 

(i) preparing disbursement projections, 

(ii) requesting budgetary allocations for counterpart funds, 

(iii) collecting supporting documents, and 

(iv) preparing and sending withdrawal applications to ADB. The SOE procedure may be introduced at a later stage by a request from the government in consideration of the achievement of the financial management action plan.

No further disbursements will be made from the PRF account upon refinancing under an ensuing or ongoing loan. The PRF loan amount and accrued financing charges are paid out under the PRF cost category of the ensuing or ongoing loan that will refinance the PRF loan.

Provided the following costs are eligible expenditures, the ensuing or ongoing loan will finance 

(i) costs incurred under the PRF that have not yet been paid from the PRF account by the refinancing date, 

(ii) costs for activities initiated under the PRF and continuing beyond the refinancing date, and 

(iii) costs incurred during PRF implementation but ineligible under the PRF.

The Internal Auditor is expected to provide the following deliverables:

Provide Annual Internal Audit Plan;

Provide tentative schedule to PD PIU of field work and carrying out annual internal audit exercise Submit Draft Internal Audit Report to PD PIU/MD within 30 days for review ;

Finalization of Internal Audit Report and its submission to board of directors within 45 days;

The Internal Auditor is also expected to follow-up of status of previous observations ; Compliance over recommendations through a mid-period follow up report.

Now, assume the role of the executive project-in-charge, representing PRF, and compose a Progress report on the decisions made so far regarding the internal draft and observations to finalize the project, addressing the chief executive body of both DMTCL and ADB.

Answer rating: 100% (QA)

Answer Progress Report on the Decisions Made So Far Regarding the Internal Draft and Observations to Finalize the Project Introduction This progress report is in regards to the decisions made so far r... View the full answer