PAD - LGED

B. Project Financing
1. Lending Instrument
34. The Bank's investment lending instrument selected for the proposed project consists of a
Specific Investment Loan (SIL). LGED has substantial experience with the Bank’s financial
management, disbursement procedures and financial reporting requirements. LGED will have an
effective accounting system in place for project financial management (FM) requirements at
project effectiveness. By project mid-term, LGED will develop a well-advanced comprehensive
LGED-wide transaction based FMS. Additional details, including project FM arrangements, are
in Annex 3.
2. Project Cost and Financing
35. Total project costs are estimated at US$417 million (about Takas 3,500 crores). The
Bank’s projected contribution is US$302 million. Detailed costs estimates in US dollars are
provided in the table below. Annex 2 contains a detailed cost table.
Component
Table 1: Proposed Project Cost Summary for RTIP-II
Indicative % of GoB
Costs (US$M) Total (US$M) gob
WB
(US$M)
rpa
% of WB's
Share
Component A: Accessibility Improvement 338.1 81% 83.9 254.2 75%
Component B: Institutional
11.9 3% 0.8 10.6 90%
Strengthening, Capacity Building and
Governance Enhancement
Component C: Road Safety 3.5 0% 0.2 3.2 90%
Component D: Contingent Emergency
0 0% 0.0 0.0 0%
Response Component
Physical Contingency (10%) 32.1 8% 8.2 23.9 74%
Price Contingency (4%) 12.8 3% 3.3 9.6 74%
Sub-Total 398.4 96% 96.5 302.0 76%
Other GoB Overhead Costs 18.7 4% 18.7 0.0 0%
Grand Total 417.1 100% 115.1 302.0 72%
C. Program Objective and Phases (If Applicable):
Not applicable.
D. Lessons Learned Under RTIP-I
36. The project design has benefited from implementation of the recently completed RTIP-I,
as well as other Bank-funded rural road projects completed in recent years. LGED has attained
extensive experience through implementing three Bank-funded projects, and has capacity to
implement the proposed project. The main lessons learnt and incorporated in the proposed
project design are described below and in Annex 11:
• Project Supervision. Effective supervision of large and dispersed rural road improvement
and maintenance contracts was challenging for LGED’s existing capacity. LGED’s staffing
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