Project Launched to Improve Basic Urban Services for Over 3 Million in Bangladesh

April 20, 2014

DHAKA, April 20, 2014 — The Government of Bangladesh and the World Bank today launched the Municipal Governance and Service Project to improve municipal governance and basic urban services in city corporations and municipalities in Bangladesh. The initiative will benefit 3.4 million people in around 100 urban communities across the country.

The project will provide financial support through the Local Government Engineering Department (LGED) to the pre-selected 26 urban government bodies with high economic growth and job creation potential, located along growth corridors leading from Dhaka towards Chittagong, Rangpur, Sylhet, Mymensingh. It will also cover three district towns in the south. Support will also be provided through the Bangladesh Municipal Development Fund (BMDF) to eligible municipalities in Bangladesh on concessional terms.

“The urban population of Bangladesh almost doubled between 1980 to 2010, increasing from 15% to about 30%. Managing this rapid urbanization effectively in the coming years will be key to sustaining Bangladesh’s economic growth,” said Christine E. Kimes, Acting Head of World Bank Bangladesh. “This project aims to make the urban local bodies become strong, responsive and inclusive local government institutions able to provide better urban services to the people.”

Municipalities and towns play key roles in supporting economic growth, jobs creation and poverty reduction and are growing rapidly. However, they face challenges such as weak municipal finances and governance systems, insufficient administrative capacity, and inadequate basic urban services that constrain them from developing into competitive, innovative and livable places.

Through a demand-driven approach, the project aims to build roads, water and sanitation systems, markets, bus terminals, and municipal services centers in these communities. It will build a culture of responsible operations and routine maintenance of infrastructure assets.

Participating municipalities will receive a base allocation in the initial years of the project. Those that demonstrate improvements in basic urban services and urban governance will also get a performance-based allocation in subsequent years. The application of a performance-based evaluation and allocation system would reward urban government bodies with more funds based on improvements in governance, citizen participation, capital investment planning, financial management, and revenue enhancement.

The World Bank is providing $410 million for this project, which became effective on April 7, 2014. The launch of the project was attended by government representatives, Mayors and officials of the city corporations and pourashavas among others. Mr. Tofail Ahmed, Honorable Minister of Commerce was present as the chief guest. Mr. Manzur Hossain, Senior Secretary, Local Government Division; Mr. Wahidur Rahman, Chief Engineer, Local Government Engineering Department; and Ms. Christine E. Kimes, Acting Head of World Bank Bangladesh also graced the event. 

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