For official use

B. Technical

46. From the technical view point, the design is robust with inputs from a set of recently completed in-depth studies and reviews. CPTU has the foundation of public procurement with clearly laid out legislations and rules (www.cptu.gov.bd) including a fully functional e-GP system (www.eprocure.gov.bd). Building upon this framework, in designing the project, specific attention is given as regards: (i) developing in-country capability to deliver quality procurement training programs in an efficient manner with twinning arrangement of local institutes with international organizations; (ii) strengthening procurement monitoring at selected sector organizations by operationalizing procurement units in each of them with skilled professionals (5-10 persons) who will be recognized as the knowledge bank in those organization to help achieve quality procurement outcomes; and (iii) sensitizing target groups of both the public and private sector including bidding community to acquire and apply procurement knowledge in their work. To strengthen objectivity, the citizen engagement subcomponent is strengthened to play effective roles at the grass root level.

47. Based on the current assessment, from an overall fiduciary perspective, the risk rating is “Substantial” (combined financial management and procurement). FM Risk is rated substantial mainly because of its decentralized operations and the inadequacy in accounting and financial reporting of CPTU in absence of a robust electronic financial management system. Implementation of an ERP system to automate most part of the financial management function is planned under the project. CPTU has experience in implementing Bank-financed project and the FM arrangements would largely be similar to the existing PPRP II project. There will be one designated account opened and managed by the CPTU for the whole project. An operational account will also be opened and managed by LGED under the designated account to pay for the expenditures to be incurred at the LGED level. LGED will maintain satisfactory financial management system including book of accounts and all evidences in support of the expenses to be incurred from this account. The project will follow report based disbursements in the form of interim unaudited financial reports which will consolidate all expenses including LGED. The external audit of the project will continue to be audited by the Foreign Aided Project Audit Directorate under C&AG of Bangladesh. Finally, the applicable government procedures, specifically Government Financial Rules [GFRs] will be applicable.

48. The project will follow the Bank’s “Procurement Regulations for IPF Borrowers”, dated July 1, 2016 (Procurement Regulations). IMED/CPTU is the implementing agency that will manage all procurements, excepting the local government institutions (LGIs). LGED, through a Memorandum of Understanding with the CPTU, will manage the procurement of LGIs, given its wide networking at decentralized level and experience in procurement. The Project Procurement Strategy for Development (PPSD) has been prepared including an initial Procurement Plan. Recognizing the overall fiduciary environment, the procurement specific risk rating is “Substantial” (similar to overall fiduciary rating). Most procurement involve consultancy, followed by IT equipment and goods. Though CPTU has wide experience of over 14 years in implementing two IDA financed projects, with no major issues, it may face challenges in sourcing and implementing the three major consultancy packages. To mitigate procurement associated risks, a full time procurement consultant will assist CPTU in conducting its procurement. Similarly, LGED will also be assisted by a procurement consultant. A set of detailed mitigation measures have been agreed that is explained in Annex 2.

49. Social and Safeguards: The project does not involve any land acquisition or civil construction. As such there is no issue with displacement of people from public or private lands, impact on livelihoods on people or communities. The Bank’s OP 4.12 Involuntary Resettlement, or OP 4.10 Indigenous Peoples is not triggered as the project will have no direct impact on small ethnic groups.