Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004544 IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-80270) ON A LOAN IN THE AMOUNT OF US$150 MILLION TO THE REPUBLIC OF INDONESIA FOR THE Water Resources and Irrigation Sector Management Program 2 (P114348) 20 November 2018 Water Global Practice East Asia And Pacific Region Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document of
The World Bank FOR OFFICIAL USE ONLY
Report No: ICR00004544
IMPLEMENTATION COMPLETION AND RESULTS REPORT
(IBRD-80270)
ON A
LOAN
IN THE AMOUNT OF US$150 MILLION
TO THE
REPUBLIC OF INDONESIA
FOR THE
Water Resources and Irrigation Sector Management Program 2 (P114348)
20 November 2018
Water Global Practice
East Asia And Pacific Region
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CURRENCY EQUIVALENTS
(Exchange Rate Effective {May 27, 2018})
Currency Unit = Indonesian Rupiah
IDR [14,083] = US$1
US$ [0.0071] = IDR 1
FISCAL YEAR
July 1 - June 30
Regional Vice President: Victoria Kwakwa
Country Director: Rodrigo Chaves
Senior Global Practice Director: Guang Zhe Chen
Practice Manager: Sudipto Sarkar
Task Team Leader(s): Jun Matsumoto
ICR Main Contributor: Victoria Rigby Delmon
ABBREVIATIONS AND ACRONYMS
Bappeda Local government planning agency (Bappeda)
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DATA SHEET
BASIC INFORMATION
Product Information
Project ID Project Name
P114348 Water Resources and Irrigation Sector Management
Program 2
Country Financing Instrument
Indonesia Investment Project Financing
Original EA Category Revised EA Category
Partial Assessment (B) Partial Assessment (B)
Organizations
Borrower Implementing Agency
Ministry of Finance Ministry of Public Works (DG Water Resources)
Project Development Objective (PDO) Original PDO
the Project Development Objective is to assist the Borrower to improve its capacity for basin water resource and irrigationmanagement and increase irrigated agriculture productivity in the Project area. PDO as stated in the legal agreement
The Project Development Objective is to assist the Borrower to improve its capacity for basin water resource and irrigation management and increase irrigated agriculture productivity in the Project area.
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FINANCING
Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$)
World Bank Financing IBRD-80270
150,000,000 150,000,000 119,287,947
Total 150,000,000 150,000,000 119,287,947
Non-World Bank Financing
Borrower 52,560,000 52,560,000 41,640,000
Total 52,560,000 52,560,000 41,640,000
Total Project Cost 202,560,000 202,560,000 160,927,947
KEY DATES
Approval Effectiveness MTR Review Original Closing Actual Closing
28-Dec-2015 60.56 Change in Results Framework Change in Components and Cost Change in Loan Closing Date(s) Change in Financing Plan Reallocation between Disbursement Categories Change in Disbursements Arrangements Change in Implementation Schedule
Regional Vice President: James W. Adams Victoria Kwakwa
Country Director: Stefan G. Koeberle Rodrigo A. Chaves
Senior Global Practice Director: John A. Roome Jennifer J. Sara
Practice Manager: Narasimham Vijay Jagannathan Sudipto Sarkar
Task Team Leader(s): Xiaokai Li Jun Matsumoto
ICR Contributing Author: Victoria Hilda Rigby Delmon
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I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES
A. CONTEXT AT APPRAISAL
Context
1. Water resource management and irrigation are essential for Indonesia’s economic growth and social development through their role in providing food and water security. Most grain crops produced in Indonesia are grown on irrigated land and whilst Indonesia is a water rich country, it also faces significant spatial and seasonal variation in water availability. This makes the management of water resources and irrigation essential to agriculture.
2. In the 1970s to mid-1990s, following serious food shortages, the Government of Indonesia (GoI) objective in developing water resources and irrigation was to achieve self-sufficiency in rice. Under the five consecutive five-year plans from 1969, 2.5 million hectares (ha) of irrigation schemes were rehabilitated and 1.7 million ha were developed. River basin management was deemed a necessity for securing irrigation supplies and flood protection. This was combined by massive expansion and farm input programs leading to self-sufficiency in rice by 1984. GoI could not maintain this self-sufficiency, partly due to limited operation and maintenance (O&M) of irrigation systems due to a focus on new investments, leading to a rehabilitation – degradation – rehabilitation cycle.
3. Meanwhile, increasing pressure on land and water resources from population growth, urbanization, economic development, and climate change were leading to rapid degradation of many catchments, with severe soil erosion and sedimentation of storage reservoirs, increased floods, landslides, and reduced availability of water in dry seasons. High seasonal variation exacerbated competition for water between agricultural, domestic, and industrial uses. This, together with rising water pollution and farmland conversion, created risks for Indonesia’s water and food security and socio-economic development.
4. From 1998, GoI started to democratize and decentralize the country, including responsibility for development, investment and management of irrigation and drainage systems. This process was supported by development partners, including the World Bank, with the Water Resources Sector Adjustment Loan (WATSAL, 1999-2004) (P064118), the Indonesia Water Resources and Irrigation Reform Implementation Program (IWIRIP, 2001- 2004) (P073720) and the Water Resources and Irrigation Sector Management Program (WISMP Program). The process culminated in promulgation of the Law on Water Resources (Law no.7/2004) which, together with its implementing regulations, created a new institutional framework for decentralization of the sector, established participatory management of river basins and irrigation systems including stakeholder transparency and accountability.
5. For water resource management, key elements of the reform were: (i) the introduction of river basin-based
integrated water resource planning and management to be implemented by river basin organizations (RBO) and (ii) the establishment of river basin multi-stakeholder platforms (TKPSDA) for planning and decision making to improve governance and service delivery of bulk water supply, irrigation and, flood management.
6. Management and financing authority for irrigation was decentralized based on the size of irrigation systems:
systems less than 1,000 ha to district government, between 1,000 and 3,000 ha to provincial government, and larger
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than 3,000 ha to national government. Law no.7/2004 required all activities in water management to include stakeholder participation through basin level stakeholder platforms (TKPSDA) and irrigation commissions (ICs) at district and provincial level (KOMIR). Fiscal sustainability of systems was to be addressed through asset management practices and needs-based O&M arrangements, with more contributions from local governments and users. The key strategy was to promote participatory irrigation management (PIM). PIM focused on modernizing irrigation by improving infrastructure and management institutions and empowering farmer user communities with the establishment of Water Users Associations (WUAs) and their Federations (WUAFs), linking them to irrigation and agricultural services through multi-stakeholder irrigation committees at district level. PIM sought to address cost recovery through joint management and sharing of O&M responsibilities, and system performance linked to increased agricultural water productivity, and, in turn, increased food security and farm income.
7. The WISMP Program was designed as a three-phase project to be backed by an Adaptable Program Loan (APL)
originally also planned in three phases. WISMP Program was to support GoI in introducing and implementing decentralization and democratization of water resources and irrigation in selected provinces and districts1.
8. Four triggers were provided in the program appraisal document (PAD) of WISMP-1 for initiating WISMP-2. These included: (a) four fully functional provincial river basin management units (PSDA); (b) fifty WUAFs legally established and functional; (c) operational guidelines agreed on river basin management including environmental and social safeguards; and (d) fifty percent of external funding disbursed. While the triggers to move to the next phase were met satisfactorily, WISMP-1 closed in December 2010 with a moderately unsatisfactory rating due to shortcomings in achievement of objectives and delays in implementation caused by late issuance of laws and regulations.
9. Following the WISMP-1 implementation review, it was decided in consultation with the GoI that APL2 and APL3
would be combined into one final phase – WISMP-2 - given the delays incurred in WISMP-1. WISMP-2 was designed to continue the reforms and key institutional development interventions, as well as minor rehabilitation, of the WISMP APL Program. While WISMP-1 focused on provincial and district systems only, WISMP-2 also included one (1) national irrigation system, Jatiluhur, as a pilot for application of PIM principles in large irrigation systems. Most of the 7.2 million ha of irrigated areas in Indonesia are located within the project in local provinces and districts2. The project covers eighteen (18) river basins out of 134 basins, with 360,000 irrigation schemes below 3,000 ha in size, and 30,000 above 3,000 ha. The basins, provinces and districts were largely those under WISMP-1; and the EU-funded and World Bank administered sister program NTB Water Resources Management Project. They were selected based on their performance under those projects through an extensive consultation process with participating national, provincial and district agencies. WISMP-2 was designed to be implemented by three ministries, Ministry of Public Works and Housing (MPWH), Ministry of Home Affairs (MHA) and Ministry of Agriculture (MoA).
1 For more on the WISMP Program and WISMP 1 see Annex 7 2 See map at annex 13
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Theory of Change (Results Chain)
10. The project sought to use a series of interlinked operations with a long-term goal to improve food security, water
security and economic growth. Three outcome goals were used as mechanisms to achieve these long-term goals, together comprising the project objective: (i) to improve the capacity for basin water resources management at the central and provincial levels in selected national and provincial river basins; (ii) to improve irrigation management in selected provinces and districts, including in Jatiluhur3; and (iii) to improve agricultural productivity in selected provincial and district irrigated areas, including the Jatiluhur command area.
11. Delving further into the first outcome goal, the project describes reasons leading to inefficient and suboptimal water management as various and complex. The newly established river basin organizations underperformed due to regulatory, human resources, accountability, and fiscal sustainability constraints, as well as inadequate system planning, management and maintenance that occurred as a result. In the context of this analysis, the project sought to achieve its first outcome goal, i.e. improving basin water resource capacity, by strengthening the river basin organizations (RBOs) the functions of which were basin planning, development, and management, and river infrastructure development and O&M. Institutional strengthening was to be achieved through: (a) improving the physical infrastructure in river basins; (b) improving RBO capacity for hydrology management, asset management planning, flood management, and information management in ten (10) national and eight (8) provincial basins; (c) increasing the capacity of provincial and basin water councils (multi stakeholder platforms) by training members on concepts of integrated water resources management, national water resources policies and related legal instruments, providing office facilities and equipment to the Secretariat, and having public consultations/workshops in ten (10) national and eight (8) provincial basins; and (d) enhancing DGWR’s knowledge base and capacity to provide guidance for water resource management to national and provincial basins through the preparation of strategic plans for three national and one provincial basin.
12. Similarly, the availability and efficiency of water use for irrigation and effective O&M of irrigation infrastructure were pertinent elements of food and water security. A second outcome goal of the project was to improve irrigation management in the project areas. Improved irrigation management was to be achieved by strengthening provincial and district irrigation service providers, the IC as the multi-stakeholder platform for planning and coordination for decision making. This involved: (i) rehabilitation and upgrading of infrastructure in selected provinces and districts, including selected parts of the Jatiluhur command area; and (ii) strengthening PIM institutions, in particular, by empowering farmer user communities through the establishment of WUAs and WUAFs, training and linking them to irrigation and agricultural services through the multi-stakeholder irrigation committees at district level. This PIM approach was also adopted to tackle cost recovery for irrigation schemes through joint management and a sharing of O&M responsibilities.
13. The third goal of the project, as set out in the PDO, was to achieve increased agricultural productivity in selected provincial and district irrigated project areas, including the Jatiluhur command area. This outcome was to be achieved through increasing the command area and increasing cropping intensity. Productivity was to be improved not only through better water reliability due to infrastructure upgrades and improved institutional functioning of the Irrigation Commission and WUA/Fs (mentioned above), but also through: (i) support to farmers to carry out climate change adaptation measures; (ii) training on administration and management, and mobilization of
3 Jatiluhur is the largest irrigation command area and one out of the country’s two self-financed River Basin Corporations (PJTII Jatiluhur) in Indonesia. The other one is B in Brantas PJTI. Thus, irrigation management in Jatiluhur is carried out by a state-owned enterprise rather than the government agency itself.
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community facilitators to provide information to farmers on agriculture practices; and (iii) grants for agri-business support and new technology provision.
Figure 1: Schematic Overview of the Project’s Theory of Change Activities Outputs Outcomes/PDOs LT Outcomes
Project Development Objectives (PDOs)
14. PDO of the project is to assist the Borrower to improve its capacity for basin water resource and irrigation
management and increase irrigated agriculture productivity in the project area.
15. The PDO was not changed during project implementation.
Strengthening national and provincial river basin organizations
River infrastructure established
Increased irrigated
agricultural productivity in the project area.
Basin water allocation plans operational
Increasing capacity of water resource policy and coordination institutions
Rehabilitating irrigation system infrastructure
Improving participatory management process & institutions in provinces and districts
River infrastructure and O&M plans formulated & implemented
Improved capacity for irrigation management
Improved food security Improved water security Economic growth
Improved capacity for basin water resource agencies.
Improving physical systems in river basins
Command area with improved irrigation infrastructure and facilities established
Water User Associations established and strengthened
Establishment of web-based MIS system in PMU and PIUs
Completion of local regulatory frameworks for irrigation management
Provision of support to farmers in relation to adoption of new technology and development of agribusiness management
DINAS SDA equipped with multi-year planning, asset management, monitoring, and quality assurance.
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Key Expected Outcomes and Outcome Indicators
16. The project’s key expected outcomes, as stated in the PDO, are to improve capacity for basin water resource and irrigation management and the aim to increase irrigated agriculture productivity in the project area. Achievement of these objectives is evaluated through key outcome indicators: (a) number of national and provincial basin management agencies fully functional; (b) number of Irrigation Commissions (ICs) fully functional; and (c) increase in irrigated areas with over fifteen (15) percent increase in agricultural production. Two core indicators were added to the Results Framework at project restructuring as part of the core sector indicators initiative: (d) area provided with new/ improved irrigation or drainage services and (e) number of operational water user associations created and or strengthened4. Many sub-indicators were used to measure achievement of indicators (set out in the PMM). There were also several intermediate results indicators related to different components, as presented in Annex 1.
18. Under this component, programs were implemented to improve operational effectiveness of basin management institutions and pilot community-based catchment management programs and to improve physical system performance of river basins at central and provincial level in selected national and provincial river basins. Activities included: (i) operational management plan preparation, network/system development and implementation, and training; (ii) provision of office facilities and equipment to the Secretariat of the Basin Coordination Council, establishment of data base and management information systems and study tours to more developed basins; (iii) preparation of selected Basin Management Strategic Plans and Basin Master Plans, operational support to the National Hydrology Management Program (NHMP), and support to operation of the National Water Resources Information System (SISDA); and (iv) rehabilitation and/or improvement of check weirs, river bank protection, dykes, water allocation structures, small retention ponds and other related works.
19. This component aimed to improve irrigation service performance and sustainability of irrigation systems through PIM institutions in participating provinces and local governments (Kabupaten). Activities included enhancement of local institutions such as government irrigation and agriculture agencies, establishment and enhancement of ICs, WUAs and WUAFs, capacity building workshops, and completion of local PIM regulatory frameworks. It also included light and moderate rehabilitation and repair of irrigation system infrastructure5, support to irrigated
4 These core indicators were similar to intermediate results indicator (IRI) 2.1 and 2.2 except that IRI 2.1 refers to WUAFs duly constituted rather than water user associations (it is assumed for the purposes of this ICR that WUAs and WUAFs are included in the targets, although this is not clearly specified)(see Annex 9). Borrower ICR has not included analysis on the additional core indicators but the number of WUAs and WUAFs established and strengthened has been monitored 5 Light and moderate rehabilitation and repair is described in the PAD as: - (a) schemes requiring light physical improvements to bring system efficiency from 75 to 80 %, with an average investment cost Rp.500,000 per hq on 280,000 ha; (b) Schemes requiring
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agriculture, and implementation of climate change adaptation measures, including support to farmers in relation to adoption of new technology and development of agribusiness management skills. This component also included encouraging establishment of public-private partnerships for farming and marketing through the implementation of community subprojects and provision of technical assistance in relation to implementation of this component.
20. This component was the first stage of a program to upgrade and modernize the largest irrigation system in Indonesia, the Jatiluhur irrigation system. Under this component, specific investments included establishment and strengthening of PIM institutions at various levels, development of effective inter-agency management arrangements and development of a funding mechanism for management of the system. Specific investments included rehabilitation and improvement of irrigation and drainage infrastructure, including removal of bottlenecks and rehabilitation of secondary irrigation systems. It also included preparation for overall rehabilitation and modernization of the system, including technical assistance to implement this component and preparation of management, institutional, and technical design documents and tender documents for future modernization of canals and future rehabilitation of additional secondary irrigation systems.
Component 4: Project Management and Implementation Support (appraised project cost US$16.68 million) (actual project cost US15.82 million)
21. Activities under this component facilitated project implementation through provision of advisory support to entities involved in project implementation and project management, including administrative and financial management, disbursement, and procurement, and monitoring and evaluation, at central, participating province and participating local government levels.
Total Project Costs
22. The total estimated project cost in the PAD was US$202.56 million. The total actual cost was US$160.93 million,
with US$41.64 million being financed by Borrower funds and US$119.29 million from IBRD credit. Given the devaluation of the IDR over the course of the project against the US dollar (1US$= IDR 9,250 at appraisal and 1US$ = IDR14,083 at project close) and even from MTR when the exchange rate was 1USD = IDR 12,085 to project close at 1US$ = IDR14,083), most of the underspent amount and loan cancellation was due to devaluation and most of the activities planned at appraisal, other than some of the component 3 physical investments, were completed.
B. SIGNIFICANT CHANGES DURING IMPLEMENTATION (IF APPLICABLE)
Revised PDOs and Outcome Targets
23. The PDO was not changed during project implementation.
moderate physical improvements to bring the system efficiency from 65 % to 80%, with an average investment cost Rp.1,000,000 per ha on 80,000 ha.
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Revised PDO Indicators
24. Two core indicators were added to the Results Framework at project restructuring as part of the core sector
indicators initiative: (i) area provided with new/ improved irrigation or drainage services and (ii) number of
operational water user associations created and or strengthened. Targets and dates for achieving targets were
adjusted to take into account the extension in the loan closing date and the additional project activities6.
Revised Components
25. The components were not revised during project implementation.
Other Changes
26. Other significant changes were7:
a. Adding shopping method to the list of available procurement methods to accommodate for the procurement
of small goods and works with contract value below US$100,000 and below US$200,000 respectively;
b. Expansion of eligibility for light and moderate rehabilitation of irrigation infrastructure to all project districts under Component 2. This required a realignment of the on-grant allocation with results target allocations to different provinces and districts. Funds for construction and rehabilitation of irrigation schemes under the project were allocated in consultation with end users (WUA/WUAFs). The initial budget allocated for rehabilitation was relatively low (USD$ 60–100 per ha) and so moderately rated districts (43) could only do light rehabilitation, and advanced districts (58) medium rehabilitation. At restructuring this amount was increased to US$ 100–200 per ha, equivalent to price of approx. 500 kg of paddy (unhusked rice). Moderate kabupaten could be upgraded to advanced status, once they met the criteria for advanced kabupaten, entitling them to additional activities such as medium rehabilitation and enhanced agriculture support;
c. Extension of the Loan closing date from November 30, 2016 to May 31, 2018 to enable implementation of delayed activities, completion of the agreed new activities and achievement of the adjusted results targets;
d. Reallocation of loan proceeds among different categories to fully utilize the savings under the loan due to foreign exchange changes and competitive procurement and to compensate for initial implementation delays; and
e. Adjustment of indicators in the Results Framework (RF) to:
i. add two core indicators: Areas provided with new/ improved irrigation or drainage services and
operational water user associations created and/ or strengthened, as part of the core sector indicators initiative;
6 The revised indicators, targets and/ or revised dates for achieving the targets are set out in Annex 1 7 First (and only) Loan Agreement Amendment dated July 8, 2014
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ii. delete the indicator “establishment of effective institutional mechanism for Jatiluhur system management” to take into account the annulment of Law no.7/2004 and the resulting change in regulatory framework of the country8; and
iii. update the targets and dates of all indicators to reflect the results of the additional activities and the proposed new closing date.
Rationale for Changes and Their Implication on the Original Theory of Change
27. Reasons for the changes at project restructuring were to adjust the project scope to take account of the devaluation over the first years of the project of the IDR, changes in the law relating to the water resources and irrigation sector, and the delayed implementation progress at the time and (to add core indicators as part of the core sector indicators initiative. The reallocation of costs then gave an opportunity for increased rehabilitation works.
28. Significant depreciation of the Indonesian rupiah to US$ contributed to the slower disbursement rate and meant
that there was an opportunity for more activities to be carried out in local currency for the same loan amount of US$. When allocating budget in 2012, the exchange rate was 1US$ = IDR 9,250, at MTR it was 1US$ = IDR 12,085, creating loan savings of approximately IDR425,250,000 (which could be redeployed).
29. There were significant delays in implementation in the first two years of the project, due to:
a. Delay in use of the on-granting mechanism, the new mechanism of fund flow from national level to local level (Provincial and local level) in WISMP-2 program. It took over a year for PIUs at the local level to be fully familiar with the process and procedure of the on-granting mechanism and to start applying it.
b. Delay in bidding process for construction works under Component 3 (Jatiluhur Irrigation Scheme (US$46.76 million or 31.2 per cent of Total Loan)) which was the biggest element under the project at the national level.
c. Late mobilization of consultants at the national level and consequent delays in the activities supported by those consultants.
30. These changes did not affect the scope or PDO of the project; they did not trigger any new safeguard policy and did not change the existing safeguards arrangements or category.
II. OUTCOME
A. RELEVANCE OF PDOs
31. The PDO ‘to assist the Borrower to improve its capacity for basin water resource and irrigation management and
increase irrigated agriculture productivity in the project area’ remains highly relevant to Indonesia’s development
8 After 2015, following the annulment of Law no. 7/2004 on Water Resources by the Indonesian Constitutional Court, the Law no. 11/1974 on Water was reactivated. Law no.7/2004 was held to be inconsistent with the founding principles of 1945 National Constitution as it did not ensure that role of private sector in management of water resources was regulated.
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priorities and the national policy context. The project activities and objective of increasing agricultural productivity through (a) increasing institutional capacity for basin water resource management and improved river infrastructure sustainability, (b) strengthening participatory irrigation institutions and (c) and improving system performance are considered an essential contribution to Indonesia’s Nawacita, medium term development target 2014-2019.9 Of all the agricultural land in Indonesia, 15.2 percent is irrigated and 95 percent of the national rice production originates from these irrigated lands. About 77 percent of Indonesian farmers depend on rice cultivation, and Indonesia has one of the highest per capita rice consumptions in the world. The country is still dependent on imports to secure domestic rice supply. The GoI follows a policy of rice self-sufficiency and recognizes that this will require greater focus on the irrigation sector. The 2007-2008 global food crisis, when rice prices doubled and global trade was highly constrained, heightened the commitment to increase domestic rice production as critical to the country’s overall food security. In 2011, the GoI called for rice production to increase by 15 percent (10 million tons10) and committed to enhance the reliability and effectiveness of existing irrigation systems.
32. The PDO also remains aligned with the World Bank’s Country Partnership Framework (CPF) for Indonesia, FY2016-FY2020 Report No. 99172. Irrigation and dams are included in the CPF’s Engagement Area 1 (Infrastructure Platforms at the National Level) which focuses on enhanced engagement in water and sanitation, and irrigation and dams11.
33.
34. Modernization of national irrigation management and infrastructure is central to the GoI’s irrigation policy in response to the need for a new service orientation and expanding the use of PIM12. The PIM approach that was central to the WISMP Program and to WISMP-2 for irrigation at the district and provincial levels, and piloted in WISMP-2 in the Jatiluhur command area, is now being adopted by GoI in national level projects. The GoI has formulated the modernization policy as an “effort to materialize participatory irrigation management with the objective to provide effective and efficient irrigation services, in the context of supporting food and water security, through improvement of reliable water, infrastructure, institution and management, as well as human resources” and has sought support from the World Bank to implement this policy. The GoI has requested World Bank support under SIMURP. The project development objective is “to improve irrigation services and strengthen accountability of irrigation schemes management in selected areas”.
Assessment of Relevance of PDOs and Rating
35. Given the alignment of the PDOs to the current CPF, and alignment to government policy and the RPJM, the
9 Under Nawacita, GoI set an objective of water resource development to manifest water infrastructure resilience towards food security, water security and energy security, with targets to develop the sector through development of large dams to increase storage capacity and water security, new irrigation infrastructure and rehabilitation of existing irrigation infrastructure 10 Government of Indonesia’s Mid-Term Development Plan (RPJM 2015-2019) 11 The CPF states “it is currently expected that the WBG engagement at the national level will be concentrated in water and sanitation, irrigation and dams, housing and integrated tourism development.” It continues “Under the RPJMN 2015-2019 the GOI has set ambitious goals for the modernization of irrigation infrastructure including rehabilitating 3 million hectares of irrigation channels and constructing 1 million new hectares of irrigation channels…. 49 new dams in the next five years in addition to the 16 dams which are currently under construction. Within these ambitious targets, WBG’s engagement would focus on using IBRD resources to rehabilitate existing schemes, with complementary R&D and extension services, and enhancing user participation to improve the quality of irrigation services, better maintain the infrastructure and support a more diversified pattern of production to boost farmer incomes and nutritional outcomes.” 12 PAD for Strategic Irrigation Modernization and Urgent Rehabilitation Project (SIMURP)(P157585) for national irrigation schemes, which was approved by the World Bank board in June 2018 and is the follow up project to the WISMP Program
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relevance of the PDO is rated as High”.
B. ACHIEVEMENT OF PDOs (EFFICACY)
Assessment of Achievement of Each Objective/Outcome
36. The PDO consists of three parts: (a) to improve the capacity for basin water resource management and (b) improve the capacity for irrigation management and (c) increase irrigated agriculture productivity in the project area.
37. PDO # 1: Improve capacity for basin water resource management. The first part of the PDO was to be achieved by
achieving full functionality of river basin organizations (RBOs). The project covered eighteen (18) RBOs in total, with ten (10) at the national level, and eight (8) in the provincial level (see map at Annex 13. RBOs are responsible for basin planning, development, and management, and river infrastructure development and O&M.
38. The PDO indicator is number of national and provincial basin agencies fully functional and the target was twelve.
This is measured based on a scoring system. There are three (3) IRIs and targets: 1.1 twelve basin water allocation plans operational; 1.2a twelve infrastructure O&M plan formulated and implemented; 1.2b 100 percent river infrastructure established under the project functional. Targets for IRI 1.1 and IRI1.2a were met and exceeded with fourteen and fifteen respectively, IRI 1.2b was substantially achieved with 93% of river infrastructure established. Due to a lack of adequate definition of “fully functional” in the PAD, the borrower and World Bank team subsequently agreed to measure 13 “fully functionality” with nine (9) additional indicators to assess progress of each IRI14, making twelve (12) indicators. The RBOs are considered fully functional if all twelve (12) indicators achieved 75 percent or above. These twelve (12) scores, measured as a percentage, were then averaged into a total score.
39. The evidence gathered indicates that the institutional strengthening of RBOs exceeded the targets of twelve (12)
RBOs to become fully functional as, by the end of the project, eighteen (18) RBOs were considered to be fully functional, based on the 75 percent cut off score. According to the implementing unit survey assessment, five (5) basins achieved a score >90 percent; eleven (11) basins a score 80-90 percent; and two (2) basins a score 75-80 percent. Out of the eighteen (18) RBOs in the project, all had MIS, sixteen (16) had water councils and seventeen (17) are considered to have adequate budget. Indicators were substantially met. The shortfall was due mainly to delays in technical assistance mobilization and cancellation of Law no. 7/2004 (see footnote 8) which delayed establishment of the basin council and preparation of basin management plans due to uncertainty of status of basin councils.
40. A significant portion of activities to achieve this PDO goal involved capacity building and training. Delays in mobilizing training teams meant that not all trainings were completed. Training workshops were provided to all relevant staff, but the frequency of the trainings was not as planned, with only about 53 per cent of training packages planned during project preparation being given. Instead, capacity building was carried out through the
13 Aide Memoire of April-May 2017 and Borrower ICR 14 The additional indicators are: (i) establishment of the basin council; (ii) adequacy of human resources; (iii) coordination and cooperation between national and provincial governments in the basin through an MOU; (iv) preparation of the agreed annual work plan amongst national and provincial governments in the project basins; (v) completion of a strategic plan of the basin (Pola) and a basin management plan (Rencana); (vi) Adequacy of the operational budget (vii) Hydrology management (vii) Management information system (MIS) establishment; (viii) water quality and (ix) flood management.
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technical assistance consultant team (TA BWRM team), twinning arrangements and on the job training, all under the project, and feedback through surveys indicates that this hands-on capacity building was very effective. Therefore, even though only 53 percent of the formal training was completed, the more informal in situ training contributed towards the objectives of capacity building.
41. The infrastructure sub-component, river infrastructure management (RIM), entailed small to medium works along
the river to protect surrounding areas or public buildings from annual flood. By the end of the project 16 basins had implemented the works, the other two basins did not complete the works by project close but are continuing to implement using government funds. Based on this progress, about 93 per cent of target works were completed by end of project and 100% should be completed by the end of 2018.
42. PDO # 2: Improve capacity for irrigation management. The second part of the PDO was to be achieved through
institutional strengthening of ICs, WUAFs and WUAs and infrastructure rehabilitation, in fourteen (14) provinces and one hundred and one (101) districts, including a special focus on Jatiluhur area as the country’s largest irrigation command area. The PDO Indicator in the PAD is number of ICs fully functional. There are also the PDO indicators of operational water user associations created and/ or strengthened and area provided with new irrigation or drainage services that were added at restructuring. There were IRIs of (i) No. of WUAFs duly constituted, (ii) command area with improved irrigation infrastructure and services (component 2).
43. ICs - The strengthening of participatory institutions included strengthening ICs as the institutions responsible for
planning of irrigation systems and evaluation of funding proposals. Composed of an equal number of representatives from both Government and the farmer WUAFs, ICs are a key node for enabling participation, transparency, and accountability, as the fora for stakeholders to meet and discuss irrigation programs and issues. Their full functionality was the primary indicator chosen in the PAD for assessing the PDO goal. Full functionality was based on the extent to which an IC: (i) had its members in place, (ii) had a functioning secretariat with necessary staff and facilities, (iii) had obtained timely provision of funding for IC operations and (iv) had fulfilled its key functions, such as proposal and formulation of plans for maintaining and improving irrigation systems, endorsing cropping plans prepared by related agencies, with consideration to water availability and crop suitability, and formulation of O&M and rehabilitation plans for local irrigation schemes. The project exceeded its target of having full functionality of forty-five (45) ICs, with sixty- three (63) ICs as fully functional.
44. WUAs and WUAFs - The project also sought to achieve improved irrigation management at district level by
establishing and strengthening WUAs and their WUAFs. Each year, PMU and PIUs in each province and district would determine which irrigation schemes to include under the project the following year. The agricultural team was responsible for establishing the new WUAs and WUAFs, or strengthening existing ones. The local government planning agency (Bappeda) and local level public works agency (Dinas PU) started their programs once the WUAs and WUAFs had been established. The Bappeda provided community organizers to assist the WUAFs on organization, administration and book-keeping. Dinas PU provided training on the PIM, and participatory design and construction, while the local government agricultural agency (Dinas Pertanian) provided training programs related to agriculture practices. Once a WUAF was considered strong enough, its status was upgraded to “legalized WUAF” (which meant that it was duly constituted for the purposes of the indicators (see discussion in Annex 9)). This status allowed the WUAFs to enter into contracts with third parties for any activity related to their business i.e. contracts for rehabilitation with Dinas PU or contracts with the private sector to supply bulk fertilizer, seeds or seedlings etc. About 63 percent of the works contracted under the project at local level were implemented by WUAFs and their members, 28 percent by contractors, and nine (9) percent under force account arrangement in
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which the Dinas PU provides materials while the works were carried out by the WUAFs. The target core indicator of operational water user associations created and/ or strengthened that was added at restructuring (in line with the core sector indicators initiative) was 2030. As explained in Annex 9, this is the same number that was initially used for IRI21.1 for WUAFs duly established. It is likely in the context of Indonesia where the WUAFs are the stronger entity that the core indicator was intended to relate to WUAFs. If this is the case, then as 2,066 operational WUAFs were created and or strengthened the core indicator was met and exceeded. IRI2.1 target was increased to 2,995 at restructuring. At the end of the project there were under the project there was a total of 3,112 WUAs and WUAFs duly established, and so if WUAs and WUAFs were combined in the analysis of IRI2.1 the revised IRI2.1 value of 2,955 WUA and WUAF duly established has also been achieved and exceeded15.
45. Training- The strengthening activities also focused on training on PIM, and introduction of new management tools for irrigation development planning (RP21) and asset management (PAI) to help in the prioritization of investments and participatory decision-making processes in the ICs. The project provided training of trainers and classroom training as well as field-based school at the WUAs and WUAFs. The subject of the training varied from organization (administration and financial), agribusiness, system rice intensification (SRI), climate adaptation, integrated pest control and management, and agriculture intensification. There were more than 5,000 agriculture training packages conducted in the project. The project also provided Agribusiness Packages (Dana Investasi Agribisnis or DIA) to the WUAFs through competition and 508 exchange visits amongst WUAFs.
46. Regarding infrastructure rehabilitation, the target area to be rehabilitated under component 2 started at 360,000 and was revised to 54,936 in the RF but this is assumed to be an error as this is the same as the revised figure for component 3. ISRs since restructuring refer to 381,000. By the end of the project, 395,450 ha were rehabilitated, so meeting and exceeding the initial target, the revised target in the RF and revised target referred to in ISRs. Works mainly comprised schemes below 3000 ha, where the improvement of irrigation infrastructure consisted of light and medium rehabilitation. Districts that were considered advanced for institutional functioning (WUAs in place and trainings received) were eligible for medium rehabilitation (of which there were 58), while districts that only had a WUAFs in place were eligible for light rehabilitation (of which there were 48). As the number advanced districts increased following the restructuring, more districts were entitled to carry out medium rehabilitation. With the savings under the project, more funds were allocated to this activity. Construction was carried out under three models: works done by WUAF themselves; works done by a contractor with simple works sub-contracted to the WUAF itself; and works done by the WUAFs but with the government providing materials. The percentage of packages under the three models were 63 per cent, 28 per cent and nine percent respectively. The project also provided stimulus funding of IDR 50 million (equivalent USD 4,000) to WUAFs for minor works. By the end of the project, 460 WUAFs covering 56,320 ha had received the stimulus. Most of the rehabilitation works were done with full participation of WUAFs.
47. Regarding improvement under component 3 of the Jatiluhur schemes (above 3000 ha), works consisted mainly of rehabilitation to unlock the bottlenecks at the canal sections that hampered water flow, for which rehabilitation was urgently required. A state-owned company operates the Jatiluhur irrigation scheme through delegation by central government. The rehabilitation work was mainly contracted out (works done by contractor) because of the greater technical complexity of the work. The initial target for Jatiluhur was 30,000 ha and this was increased to 59,649 ha at restructuring. While 54,936 ha was rehabilited, well exceeding the original target, the revised target was substantially achieved (at 92% of target area).
15 See annex 9 with explanation of revision of the indicator
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48. PDO # 3: Increase irrigated agricultural productivity in project area. The third part of the PDO was measured on the increase in irrigated areas with over 15 percent increase in agricultural production. The achievement of the target is assessed by aggregating the rehabilitation areas of Component 2 and 3 i.e. the province and districts, and the national Jatiluhur and for a goal of increase in agricultural productivity of 15% in 100% of this area. This PDO goal was to be achieved using the same mechanisms as the second PDO goal of irrigation management strengthening. This is because improvement of agricultural productivity is mainly due to improved irrigation management, and the improved planning, water allocation, and cropping patterns that result out of it. Thus, to achieve this goal, the project sought to improve irrigation management strengthening (PDO goal 2) as well as support agricultural enterprises by providing the WUAFs with trainings, new technology, and agro-business grants.
49. The IRIs for this indicator were (i) establishment of effective institutional mechanism for Jatiluhur system
management, with a target of effective O&M mechanism in place; and (ii) 59,649 ha command area with improved irrigation infrastructure and services. Both of these IRIs were substantially achieved. For the core indicator, based on the recent assessment implemented by the implementation and monitoring TA (IME-TA), the improved (rehabilitated) area amounts to a command area with at least 15 percent increase in paddy production (rice being the main crop produced), was assessed as 65 percent of the total area. Whilst the absolute target was achieved at 65 percent, the IME-TA reported that the increase of total production in much of the project area was estimated to be 30-31 percent, with some areas, especially off-Java, seeing a much higher production increase. The areas in local and provincial systems saw at least 15 percent production increase (varying over one year between 36.7 and 75.9 percent). The percentage of production increase in the rehabilitated systems varied from 14.6 percent to 34.8 percent. The average increase in production (tons) between before and after rehabilitation in the sample areas is set out in the table below:
Average percentage production increase in rehabilitated areas between before and after rehabilitation
Year Component 2 command area Component 3 command area
2015 31.2% 27.3%
2016 32.7% 22.7%
2017 30.7% 8.3%16
50. The key factor affecting productivity was excessive rainfall and pest attacks in Jatiluhur in 2016 which reduced 2017
yields in that command area so that the average production increase fell to 8.3 percent from 22.7 percent in 2016. Also, because well-performing areas already had higher production, it was difficult to increase production by 15 percent or more with the modest rehabilitation available under the project. In these areas, more significant rehabilitation would be necessary to make water available for the more downstream located sub-systems that have not yet been made part of the program.
Justification of Overall Efficacy Rating
51. Given the substantial achievement of all of the three (3) PDO aspects, the overall efficacy rating is “Substantial”.
16 The figure of 2017 is relatively low due to the outbreak of crop disease in the sample area
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C. EFFICIENCY
52. Following the methodologies adopted in the PAD, efficiency analysis was conducted to reassess the project’s ex
post economic viability, covering the total project costs. The economic benefits associated with the project are derived from the benefits expected from increased agricultural productivity, loss avoided from improved water management, benefits from agribusiness projects financed by matching grant facility and benefits from twelve (12) industrial and drinking water supplies, brought about by investments in upgrading basin water resource management and rehabilitation of multi-purpose river infrastructure, which can be all be attributed to the project. The economic internal rate of return (EIRR) for the whole project at appraisal was calculated at 19 percent17, indicating that the project was economically viable. The result at ICR (EIRR of 16.2 percent) was slightly lower than at appraisal. Non-agricultural benefits such as savings from appropriate and timely river and irrigation infrastructure maintenance and efficiency gains from institutional development and capacity-building were not adequately accounted for in this analysis, making the EIRR estimation conservative.
53. However, the estimated project costs per beneficiary and per ha at the ICR stage are significantly lower than that
at the appraisal stage. The appraisal stage estimated cost per beneficiary was US$47/per person, while at ICR stage this figure is US$32 per beneficiary. Similarly, the appraisal stage estimated cost is US$493/ha. The corresponding value at ICR stage is US$357/ha. The calculated project costs per ha and per beneficiary are lower at ICR stage due mainly to increases in the number of beneficiaries and irrigation areas serviced at completion stage18.
54. The number of people that benefited from improved irrigation from the project at ICR is estimated as 5.1 million in 201719 which exceeded estimates in the PAD. According to the PAD, 500,000 farm households would directly benefit from more reliable and efficient irrigation water supply and increased agricultural productivity through improved irrigation water management, in addition, 600,000 farm household beneficiaries of WIMSP-1 would continue to benefit from WIMSP-2 activities. With four people on average per household in Indonesia20, the number of beneficiaries was estimated as 4,400,000 at appraisal.
55. The project increased farmers’ income by 13% (percent) to 41.4% (percent), providing adequate incentives to
farmers to participate in the project and take responsibility for O&M of the irrigation systems through the WUAs and WUAFs and easing the budgetary burden on local and national government (see annex 4 for more details of financial and economic analysis).
56. The effect of the project on key agricultural productivity and production indicators was monitored and evaluated
using quasi-experimental evaluation method. The results confirmed that components 2 and 3 interventions did result in an increase in the functional irrigation area, cropping intensity, crop yield, and ultimately crop production in the irrigation schemes21 under the project. The production increase was due to a combination of physical interventions (rehabilitation of infrastructure), and non-physical interventions such as training, establishing and empowering the WUAF in managing their WUA members on better water allocation etc.
17 There was inconsistency in the PAD as elsewhere in the PAD it was reported as 17% - see Annex 4 18 To overcome the effect of Rupia depreciation, the analysis was done in constant USD prices. It has applied appropriate CPI to make adjustments and facilitate comparison 19 World Bank. Matrix Summarizing Progress Toward CPF Objectives, WIMSP II (2017) 20 Statistics Indonesia. Average Household Size by Province, 2000-2015 (Indonesia) 21 See IME final report
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57. The outcomes of RIM activities under the project included improving irrigation canals, protecting from landslides and expanding the catchment reservoirs for irrigation. The benefits of RIM activity analysis in the project area were calculated through the analysis of the damage loss avoidance. The cost of damage is the cost necessary to rebuild or repair the damage caused by a disaster, which has been given an economic value. The total benefit from damage loss avoidance (which include avoided losses caused to household and building, agriculture as well as suspension of business activities and household income) by implementing RIM activities was estimated to be: (i) IDR 7,845.6 million/ year for the avoided loss of household, building, household effects, etc.; (ii)IDR 10,806.6 million/year for loss avoided of agriculture; and (iii) IDR 743.6 million/ year for loss avoided due to suspension of business activities and income of households.
58. Administrative/Operational Efficiency: The project faced challenges such as delays in implementation at the start of the project due to lack of understanding of how the on-granting mechanism worked and the delays in hiring key consultants, early exit of MoH, high turnover in consultants and the cancellation of the Law no. 7/2004 but still achieved the PDO and outcomes substantially. A total of 79 percent of the project funds in US dollar terms were utilized (not including cash and contributions in kind from beneficiaries). The reduced usage was mainly due to devaluation of the IDR, which continued to devalue after the MTR when additional activities were added, and savings on estimates through competitive procurement.
Assessment of Efficiency and Rating
59. The project completed most of the tasks and achieved most of the targets within the extended time frame. Component 4 accounted for 9.83 per cent of the actual project costs, which is more than that anticipated at appraisal (6 percent), which is more in line with typical cost of project management and implementation support. The actual component 4 project cost was US$15.82 million, slightly lower than the appraised cost of US$16.64 million but because the actual overall project costs were lower than at appraisal, the percentage share of the total actual project costs increased.
60. Efficiency has been rated “Substantial”, based on significant cost economy in irrigation service delivery (i.e., lower cost per hectare and per beneficiary), robust economic viability and moderately satisfactory project administrative efficiency.
D. JUSTIFICATION OF OVERALL OUTCOME RATING
61. Based on the above-mentioned assessment and ratings – relevance of PDO rates as High, efficacy of the PDO achievement rated as Substantial, and efficiency of the project rated as Substantial, the overall outcome rating of the project is rated as “Moderately Satisfactory”.
E. OTHER OUTCOMES AND IMPACTS (IF ANY)
62. See Annex 11.
III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME
A. KEY FACTORS DURING PREPARATION
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63. Increase of local government interest - As WISMP-1 had demonstrated the benefits of PIM, more local governments were willing to participate, from only 50 districts in WISMP1 to 101 districts in WISMP2.
64. Complex project design and mitigation measures. The project involved a large range of project activities within each component, including establishment and strengthening of institutions at national, provincial and local levels, introducing the PIM approach, improving and measuring management capacity of institutions, and increasing agricultural productivity. The project also involved many stakeholders. The project design sought to mitigate these challenges through continuity with WISMP-1 areas and continuing coordination by the National Steering Committee on Water Resources (NSCWR), established under WISMP-1 under the chairmanship of BAPPENAS (Ministry of National Development Planning), to be the WISMP-2 steering committee.
65. Readiness for implementation: The project undertook several measures to ensure readiness for implementation.
Implementation arrangements followed lessons from WISMP-1, detailing the division of responsibilities between the project implementing Units (PIUs), from national, provincial, district to WUA level. Other potential constraints for implementation, such as the scarcity of suitably qualified human resource, potential delays in procurement, and late budget (DIPA) release were identified and a mitigation plan was developed to manage these risks. Whilst some of the mitigation measures proved adequate, the challenge of introducing the on-granting system, which was relatively new, was probably underestimated. Although capacity building on this was provided before the project came into effect, relevant institutions took some time to adjust to the procedures. In the first two years of project implementation few activities were implemented using this funding channel. Another example was on the procedure and legal umbrella for DIA which further affected the progress of implementation of DIA. Lack of initial clarify led to the use of some of DIA funds being identified as ineligible (e.g. for tertiary canal rehabilitation).
66. Adequacy of Risk Assessment: The identification of risks to the project and its rating as Moderate was adequate.
Risks related to fraud & corruption, procurement and financial management capacity, social safeguards management and fund flow were identified during appraisal. Given that the project was delayed in the first two years due to delays in procurement and lack of understanding of the on-granting mechanism, some of the mitigation measures were not fully successful.
B. KEY FACTORS DURING IMPLEMENTATION
67. Annulment of the Law no. 7/2004 on Water Resources by the Indonesian Constitutional Court with Decision No.
85/PUU-XII/2013 dated February 18, 2015. This law was the basis for regulations for water resources and irrigation, including regulation (PP) no. 20/2006 and ministry decrees related to PIM, ICs and WUAs. Key consequences of the annulment for the project were lack of clarity on (i) division of authority between central, provincial and district governments regarding irrigation management, (ii) charging user fees, threatening the sustainability and scale up of PIM and (iii) relationships between the institutions that manage irrigation services. The GoI sought to clarify division of authority on irrigation management with decree no 23 of 2016 on Local Government, although the ICR team found disagreement amongst stakeholders on the applicability and effect of the decree, while for the other two issues, GoI released new ministry regulations, but there is debate on the status and scope of these regulations.
68. Government commitment and leadership of National PMU: GOI commitment was strong and NPMU showed
strong leadership, such as GoI’s swift release of new ministry regulations to replace Law no. 7/2004 and by NPMU taking the lead to organize events to educate institutions on the on-granting mechanisms to ease implementation.
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69. MoH exit from the project: MoH exited the project in 2017 to focus on competing priorities. The exit was felt by the WUAFs and farmers as they had less clarity on how schemes would be funded and less support on improved agricultural methods, getting crops to market and diversity of crops.
70. Technical Training and Peer to Peer learning: The project provided opportunities for technical training and peer to
peer learning that helped farmers’ groups to learn and innovate regarding their agricultural practices. The exchange was not only limited to farmers but included PIUs at district level. Through regular meetings and seminars, project staff could explain and discuss concepts, and the results achieved, during implementation with stakeholders.
71. Restructuring: At MTR, the project was rated Moderately Satisfactory for development objectives and Moderately
Unsatisfactory for implementation progress, with implementation of only 20 percent of the physical targets in the PAD. Component-2 continued to make significant progress in terms of improved local irrigation schemes, strengthening of management institutions and capacity building as well as mainstreaming the PIM approach in government regulations and programs, while other components required further effort to improve performance. Substantial savings in loan proceeds resulted from depreciation of IDR. The project was restructured to increase loan disbursement of national components, fund additional activities, and extend the loan closing date, among other complementing adjustments. Two core indicators were added under the core sector indicators initiative.
IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME
A. QUALITY OF MONITORING AND EVALUATION (M&E)
M&E Design
72. M&E of the project was based on an RF of the project that consisted of a series of outcomes and IRIs, and drawing
from lessons learned for WISMP 1, included a simplified RF and reduced number of indicators. The three outcome indicators were intended to measure achievement of the project but, some of the indicators proved unclear and needed further refinement and clarification during implementation. Indicator 3 was expressed as an “increase in irrigated areas with over 15 percent increase in agricultural production” but did not specify the number of ha or percentage of overall area required to have achieved this increase, and so the indicator was interpreted during implementation to require 15 percent increased agriculture production in all (100 percent) of the improved irrigated area. In practice, it proved unrealistic to require achievement in 100 percent of the area. It would have been helpful to specify a realistic threshold. It is also not clear why 15 percent increase was taken as an absolute benchmark, rather than having an average achievement target or a band for target improvement that all irrigated areas needed to achieve. In addition, assuming the whole 100 percent irrigated area would provide the same impact, without having deep analysis on various contributing factors in different project areas, proved difficult to achieve.
73. The outputs from each component are measured through the intermediate indicators. However, component 1 has broad indicators and several other sub-indicators that required multiple measurement and weighting. The project added nine (9) indicators to measure “full functionality” of River Basin Organizations, which is associated with Component 1 and is the first part of the PDO. The main reason for this is that the Government Implementation Unit found it unrealistic to achieve the initially agreed intermediate indicators. Thus, the indicators were expanded to capture various activities and milestones to reflect the incremental nature of institutional strengthening.
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74. At appraisal, project input, process, output and outcome indicators were designed to be tracked and reported
through a web-based project management information system (PMIS) managed by the NPMU. Outcome and impact monitoring were planned to be carried out by the impact monitoring and evaluation unit (IMEU) under the National Steering Committee Secretariat.
M&E Implementation
75. In the latter part of the project, monitoring was well implemented. The M&E system was set up at the start of the project but took some time to become well established. At MTR it was noted that M&E “is one of the weakest areas of project management. Little progress has been made in the improvement of M&E since last mission. Although the project management information system (PMIS) is reporting on financial transactions and information, it is not yet able to track the project physical progress and identify implementation issues”. After MTR M&E system improved significantly once recommendations from the MTR to have NPMU and PMTA coordinate M&E of NPIUs and cross check indicator data through sampling were implemented. NPIUs undertook internal monitoring quarterly for physical and financial progress and for output and outcomes every six months. Meanwhile, NPMU and TA consultants produced quarterly progress reports. IMEU conducted independent monitoring on a sample basis.
76. Prior to the PMIS system being developed, M&E was conducted by collecting data from each NPIU via reports. With
PMIS, M&E for physical, financial progress, output and outcome was implemented by district and provincial management units submitting implementation progress data into the PMIS system. PMIS has proved useful in managing dispersed sub projects and has been retained beyond project closing by MPWH.
M&E Utilization
77. The data collected by the M&E system helped the project to: (i) identify and remedy quality problems and incorporate better controls as the project progressed; and (ii) ensure transparency and openness of the project. Significantly, the Bank and the implementing agency agreed to only consider data that was entered into the PMIS as relevant for monitoring and evaluation purposes.
Justification of Overall Rating of Quality of M&E
78. Once the M&E system was fully established it proved very useful and has been used effectively by the client for decision making. However, in the first years of the project it was found to be weak as there were moderate shortcomings to the implementation of the M&E system. The PMIS has proven to be an essential tool to be used by project implementer to monitor the progress and as a tool for decision making. In summary, the overall rating of quality of M&E is considered to be “Substantial”.
B. ENVIRONMENTAL, SOCIAL, AND FIDUCIARY COMPLIANCE
Environmental and Social
79. Overall, the project did not create any significant environmental and social issues during implementation. Most infrastructure investment was rehabilitation of existing schemes or works involving small scale civil works, although
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there was coverage in large areas, particularly in Component 3 that was located in Jatiluhur. The project triggered five safeguard policies, as discussed in Annex 12. During project preparation, the borrower prepared an Environmental and Social Safeguards Framework (ESSF) to guide PIUs in screening the environmental and social aspects of subprojects. The screening procedure in the ESSF was included in the Project Management Manual 3 (PMM 3). The screening sought to identify and minimize potential negative impacts regarding environmental and social aspects and whether specific safeguard instruments for environmental (EA (AMDAL or UKL-UPL), integrated pest management plan (IPMP)) and social (LARAP, IPP) were required prior to project implementation and commencement of civil works. Overall, implementation of the project complied with the agreed safeguard instruments. A few PIUs did not submit safeguard screening forms to NPMU for small scale subprojects under Components 1 and 2 (but these were small scale and did not have an overall impact). This omission was mainly due to safeguard focal points being assigned by the NPMU/NPIU part-time, which demonstrates the need for continuous capacity building on safeguards for implementing units at all levels and budget to ensure the safeguard focal point is available throughout. The lack of central coordination on environmental and social issues also impacted the project and so the addition of a unit in the DGWR itself is highly recommended.
Fiduciary Compliance
80. The project’s overall financial management system can be rated as ‘Moderately Satisfactory’ during implementation and at closing. In term of the procurement aspects of the project, there were delays at the early stage of project implementation, particularly on the selection of the main consulting firms such as Project Management Technical Assistance (PMTA), other technical assistance for basin water resources management, basin water resource management planning, improving participatory irrigation management, institutional development in participatory irrigation management and agricultural support for irrigation management. There were some improvements made by NPMU and the PIUs starting from the second year of project implementation in which several contracts, for consulting services, goods and civil works were awarded and implemented. In general, the procurement process was carried out in accordance with the agreed procedures as stated in the Loan Agreement.
81. There was, however, an investigation by the Integrity Vice Presidency (INT) to follow-up on complaints related to
several WB-financed civil works contracts that substantiated collusion among several bidders as well as unauthorized subcontracting of several contracts to some losing bidders. Mitigation action was taken by the Bank for the remaining packages under the project by requesting NPMU/PIUs to group several packages with similar nature of works to attract a different category of firms and qualified contractors in an effort to break the collusive practices of smaller firms.
82. All financial management covenants met. The project’s annual financial statements were consistently receiving
clean audit opinions (unqualified). The project also complied with the timeliness of the Interim Financial Report (IFR) submission. In the first two years of the project, the project experienced slow disbursements due to delays in familiarizing on-granting activities, delay in procurement processes, and late mobilization of consultants. The project also experienced frequent delay of budget effectiveness that delayed the project implementation and payments. Close coordination among CPMU, PIUs, and the planning bureau of the ministry, as well as having a financial management consultant within CPMU that fully understand the budgeting processes, are pre-requisite for a timely availability of the budget for this type of project. The Bank team worked with the project to address the weaknesses in internal control including through improvement of payment verification mechanism.
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C. BANK PERFORMANCE
Quality at Entry
83. The World Bank team incorporated several lessons from WISMP-1 and other Bank supported analytical work and investments in Indonesia and elsewhere, as highlighted in IEG studies, together with lessons learnt from the Asian Development Bank (ADB) and Japanese International Cooperation Agency (JICA) supported participatory irrigation management operations in Indonesia. The team aligned project objectives with the issues highlighted in strategic documents, namely the CPS 2009-2012 and the GOI’s Medium Term Development Plan 2009-2014 and with key GoI priorities regarding decentralization of water resource management and irrigation. PIM and suitable technologies and management systems were integrated into the concept and design. World Bank put in place a team of specialists to address relevant project aspects, including technical, social and environmental safeguards, and M&E.
84. Measures to mitigate the project’s “moderate” risk rating were incorporated into the project design to strengthen procurement and social safeguards management. The rating included risks to vulnerability to fraud and corruption, inadequate capacity at local and provincial levels for procurement and financial management, lack of due diligence in implementing safeguards and environmental policies in sub-projects and the new on-granting mechanism. There was some forward planning to implement the new on-granting mechanism by bringing authorities on board during preparation and by incorporating into the design preparation of operational procedures for implementation of the new mechanism and capacity building for responsible agencies. Unfortunately, these measures proved insufficient to prevent delays as implementing agencies remained confused about the on-granting mechanism. The project also relied on contracts at the national level with multiple consulting firms, the procurement of which was delayed. The initial allocation of funds to rehabilitate irrigation schemes proved insufficient and was increased. The slow implementation in early years indicates some lack of readiness and mixed quality at entry of Bank performance.
Quality of Supervision
85. The World Bank team provided timely and effective advice to counterparts, who ensured satisfactory implementation of the project by quickly addressing issues as they arose. Advice from the World Bank teams focused on the entirety of irrigation systems to ensure functionality and higher efficiency of water savings and increased productivity. Further, advice focused on overcoming delays, inconsistencies, and expediting administrative steps to keep up with the implementation schedule. These focused on improving and speeding up implementation of the on-granting mechanism. The World Bank undertook an MTR in at the end of 2014, followed up by a restructuring in mid-2015, which identified the adjustments needed for the project to achieve its outcome.
86. The World Bank provided ongoing implementation support on fiduciary and safeguard issues during project implementation. In particular, it provided advice to counterparts on satisfactory implementation of the RPF and compliance with World Bank policies on procurement and financial management. project ratings in the Implementation Status and Results Reports were candid. Progress toward achievement of the PDO was consistently rated ‘Moderately Satisfactory’ or ‘Satisfactory’ throughout implementation and implementation progress moved from moderately unsatisfactory at MTR to ‘Moderately Satisfactory’. The aide memoires described the issues encountered in sufficient detail, and recommendations to address issues were agreed with the implementing agencies. Urgent issues were promptly brought to management attention.
87. The World Bank further conducted regular supervision missions with frequent field visits to construction sites, resettlement sites, and other project areas to ensure that effective mechanisms for quality control and compliance
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with World Bank requirements were in place. The World Bank’s multidisciplinary teams (with skills in financial management, procurement, institutional development, economics, project evaluation, and just-in-time technical expertise) reviewed all relevant documents before, during, and after supervision missions.
Justification of Overall Rating of Bank Performance
88. Based on the slow start to implementation of the project and mixed quality of World Bank performance at entry, even though World Bank performance in supervision was effective, the overall rating of World Bank performance is ‘Moderately Satisfactory’.
D. RISK TO DEVELOPMENT OUTCOME
89. Sustainability of WUAs and WUAFs - Financial sustainability of WUAs and WUAFs depends on several factors, from
acceptance and engagement of farmers, engagement of WUA in operating and maintaining the irrigation system and in supporting farmers in water allocation and distribution, and the overall increases in yield, productivity, and financial contributions from government and from its members. Overall feedback was positive from WUAs/ WUAFs on the willingness of farmers to participate in design and implementation of irrigation projects (63% of works were carried out by WUAF members) and to support and carry out O&M of projects that they have been involved in implementing. However, since the annulment of Law no.7/2004 the basis for charging end users is unclear, therefore the WUAFs are relying on GoI subsidies and voluntary contributions (in-kind and financial) from farmers. In practice, farmers are providing maintenance support for schemes and financing this with own resources. WUAFs are also receiving financial support from local government to implement O&M on behalf of local government irrigation service. Whilst these “partnership” arrangements with local government are currently informal, they are to be formalized through service agreements that are being developed under SIMURP22.
90. Status of Basin Councils - WISMP2 included extensive support to strengthening basin management organizations including basin councils. When Law no.7/2004 was cancelled in 2015 the legal status of these entities became uncertain. To reduce the uncertainty, a special decree was issued to temporarily legalize the basin councils. Government should clarify their status by including them in the new water law currently under preparation.
91. Sustainability of the PIM approach - Local governments need to budget for secondary and tertiary irrigation
schemes under the special decree. Some local governments have been uncertain about the applicability of the special decree and this could risk further rollout and scale up of such schemes. In 2017, out of the 12 provinces and 91 kabupaten targeted, the principles and responsibilities of PIM and associated work plans and budgets had been included in the 5-year plans (RPJMD) of eight out of twelve provinces and 70 of the 91 kabupaten. The remaining provinces and kabupaten propose to include them, pending elections at the end of this year. As a result, on average for the local governments the budgets for which have been set, local budgets for PIM have increased from RPJM 2009-2013 to RPJM 2014-2018 by 156,7 percent and 144,30 percent respectively23.
92. Division of responsibilities – with the cancellation of Law no. 7/2004, GOI should clarify any remaining uncertainty
on division of responsibilities for provincial and local schemes in terms of implementation and funding and should find ways to enable WUAs to charge users for irrigation schemes so that the schemes are sustainable.
22 See para 34 23 MoHA-Bangda 2018
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V. LESSONS AND RECOMMENDATIONS
93. Participatory Irrigation Management (PIM): PIM enables farmers to participate in sector development and has
been well received by project stakeholders. It has increased the sense of ownership by WUAFs and members in the irrigation facilities and improved O&M practices, especially where farmers have been involved in the planning, management and development of the scheme and this should be encouraged further. In some cases, the WUAFs initiated repairs at their own farmers’ cost, which by law is the responsibility of government, to avoid waiting for districts to carry out repairs. PIM has given farmers a voice regarding regulatory development, through their representation in the ICs, and has resulted in improved allocation of water to farmers. The GoI is extending PIM to national level schemes and this is a principle of the SIMURP Project. Community facilitators have proved key to implementation of PIM, to facilitate work plan development among farmers’ groups and as a bridge with government. PIM has benefited from the involvement of MoH regarding establishment and capacity building of WUAs and WUAFs. In situ training seems to be as, if not more, effective than formal workshops. It took time to establish PIM for provincial and local schemes and this should be kept in mind as PIM is expanded to national schemes. It justifies the long-term engagement of the World Bank in the WISMP Program and in the sector.
94. Clarity of legal framework – the WISMP Program started once the legal framework for PIM was in place under Law
no.7/ 2004 but there were still some uncertainties early in WISMP-2 on the institutional arrangements between different agencies. When the law was annulled this created further uncertainty, which has partly been managed by temporary decrees. Delays in implementation and reduced performance can partly be attributed to lack of certainty of the law. It is important for the sustainability of the PIM approach and for the water resource sector and irrigation schemes for legislation to be enacted to replace Law No. 7/ 2004 as soon as possible.
95. Implementation Coordination - The project necessitated participation of at different levels and so continuity from
WISMP-1 to WISMP-2 was important. There were often competing incentives, with other funding sources being available, priorities changing (such as for the MoH which had extensive commitments elsewhere). The project applied a performance-based program, requiring each institution to work together for the same goal to improve agricultural productivity. Strong coordination is required for this convergence intervention in terms colocation and sequential interventions. In this case, program performance incentivized coordination. The district government agencies confirmed that this system helped them to plan and implement the program accurately and has been replicated for non WISMP-2 projects in about 70 percent of districts.
96. On-granting mechanism - Despite challenges in quality control and varied levels of district fiscal capacity, the
decentralized decision-making process, including providing a bigger role for districts to conduct their own procurement, has increased sustainability of the program. Through the on-granting mechanism, districts were more independent in implementing their annual work program, which improved their capacity in project implementation, i.e to procure and train the community facilitators. As they see the benefits, in some areas they are replicating the approach outside the project area and plan to continue the contracts in project areas even after the project closes.
.
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ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS
A. RESULTS INDICATORS A.1 PDO Indicators
Objective/Outcome: To improve capacity for basin water resource management
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
No. of national and provincial basin agencies fully functional
Number 0.00 12.00 12.00 18.00
25-Feb-2011 25-Feb-2011 04-Apr-2018 04-Apr-2018
Comments (achievements against targets): The target was exceeded at 150% achievement. The IRI1.2a target of 12 river infrastructure O&M plans formulated and implemented was exceeded, with 15 achieved. The IRI 1.1 target of twelve basin water allocation plans operational was exceeded, with 14 achieved. Objective/Outcome: To improve capacity for irrigation management
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
No. of Irrigation Commissions fully functional
Number 0.00 45.00 45.00 63.00
25-Feb-2011 25-Feb-2011 04-Apr-2018 04-Apr-2018
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Comments (achievements against targets): This target was exceeded at 140% achievement. Full functionality was evaluated on the extent to which an IC: (i) had its members in place, (ii) had a functioning secretariat with necessary staff and facilities, (iii) had obtained timely provision of funding for IC operations and (iv) had fulfilled its key functions, such as proposal and formulation of plan, for maintaining and improving irrigation systems, endorsing cropping plans prepared by related agencies, with consideration to water availability and crop suitability, and formulation of O&M and rehabilitation plan of local irrigation schemes.
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
Operational water user associations created and/or strengthened (number)
Number 1175.00 2030.00 2030.00 2070.00
25-Feb-2011 28-Dec-2015 31-May-2017 04-Apr-2018
Comments (achievements against targets): This core indicator was added at restructuring as part of the core sector indicator initiative. There is inconsistency in the indicators as core indicator refers to "operational water user associations created and/ or strengthened" and IRI 2.1 which refers to number of WUAFs duly constituted. The baseline for each is the same. If number of WUAs and WUAFs constituted and fully functional are combined then the total at the end of the project is 3,112 (see annex 9) and the target is exceeded at 104% achievement. Once WUA and WUAFs are legalised they can enter into contracts with third parties for any activity related to their business i.e. contract for rehabilitation with Dinas PU or contracts with the private sector for supply of bulk fertilizer, seeds or seedlings etc. About 63 percent% of the works contracted for local schemes under the project were implemented by WUAFs. Where farmers are involved in construction of the works they reported a sense of ownership of the scheme and a willingness to maintain the assets. Objective/Outcome: To increase irrigated agriculture productivity in the project area.
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
Increase in irrigated areas Hectare(Ha) 0.00 390000.00 390000.00 253915.00
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with over 15% increase in agricultural production
25-Feb-2011 25-Feb-2011 04-Apr-2018 04-Apr-2018
Comments (achievements against targets): This was based on 15% increase for 100% of the command area. Whilst 15% was achieved only in 65% of the command area, the achievements were limited by flooding and infestation in Jatiluhur command area in 2016 and are this is expected to recover going forward. In much of the component 2 command area production increased by between 30 and 70%.
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
Area provided with new/improved irrigation or drainage services
Hectare(Ha) 0.00 360000.00 360000.00 450412.00
25-Feb-2011 28-Dec-2015 28-Dec-2015 06-Dec-2017
Area provided with new irrigation or drainage services
Hectare(Ha) 0.00 360000.00 360000.00 395450.00
25-Feb-2011 28-Dec-2015 28-Dec-2015 08-Dec-2017
Comments (achievements against targets): The core indicator as set out in the RF refers to "Area provided with irrigation and drainage services". This core indicator was added at restructuring. The target was exceeded at 125% achievement.
A.2 Intermediate Results Indicators
Component: Basin water resource management improvement
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
1.1. No. of basin water Number 0.00 12.00 14.00
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Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
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2.1. No. of WUAFs duly constituted
Number 1175.00 2030.00 2995.00 3112.00
25-Feb-2011 25-Feb-2011 28-Dec-2015 04-Apr-2018
Comments (achievements against targets): Target was achieved at 104% assuming indicator included WUAs and WUAFs. There is some confusion in the indicators as core indicator refers to "operational water user associations created and/ or strengthened" and IRI 2.1 which refers to number of WUAFs duly constituted. The baseline for each is the same and the numbers reported in the last ISR are the same. If only WUAFs are considered, then 1,999 are duly constituted at the end of the project.
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
2.2. Command area with improved irrigation infrastructure and services (Component 2)
Hectare(Ha) 0.00 360000.00 59649.00 395450.00
25-Feb-2011 25-Feb-2011 31-May-2017 04-Apr-2018
Comments (achievements against targets): Revised target in RF is same as the revised target for IRI 3.2 so it is suggested that this was an error. ISRs after restructuring refer to a target of 381,000, which was exceeded with 104% achievement.
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
3.1. Establishment of effective institutional mechanism for Jatiluhur system management
Text No effective mechanisms established.
Mechanisms functional with staffing and funding for O&M in place
Effective O&M mechanism in place.
Role-sharing agreement under trial operation (Partially functional)
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25-Feb-2011 25-Feb-2011 31-May-2018 31-Oct-2016
Comments (achievements against targets): Borrower ICR indicates that this target was removed by aide memoire in November 2015 but there is no indication of this in the RF.
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
3.2. Command area with improved irrigation infrastructure and services (Component 3)
Hectare(Ha) 0.00 30000.00 59649.00 54936.00
25-Feb-2011 25-Feb-2011 31-May-2017 04-Apr-2018
Comments (achievements against targets): Target substantially achieved at 92% achievement.
Component: Project Management and Implementation Support
Indicator Name Unit of Measure Baseline Original Target Formally Revised
Target
Actual Achieved at Completion
4 Establishment of web-based Project management information system in project management and implementation units
Text Not functional Functional Functional Functional
25-Feb-2011 25-Feb-2011 31-May-2018 15-May-2017
Comments (achievements against targets): Target achieved 100%.
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B. KEY OUTPUTS BY COMPONENT
Objective/Outcome 1 Improve capacity for basin water resource management
Outcome Indicators 1. number of national and provincial basin agencies fully functional
Intermediate Results Indicators
1. no. of basin water allocation plans operational 2. no. of river infrastructure O&M Plans formulated and implemented 3. percentage of river infrastructure established under the Project functional
Key Outputs by Component (linked to the achievement of the Objective/Outcome 1)
1. 14 RBOs with water allocation plans operational 2. 15 RBOs with river infrastructure O&M plans formulated and implemented. 3. 93% of river infrastructure functionally established
Objective/Outcome 2 Improve irrigation management
Outcome Indicators 1.number of Irrigation Commissions fully functional
Intermediate Results Indicators 1. number of WUAFs duly constituted 2.Command area with improved irrigation infrastructure and services
Key Outputs by Component (linked to the achievement of the Objective/Outcome 2)
1. 47 Irrigation Commissions became fully functional 2. 2,070 WUAFs duly constituted 3. 395,450 ha improved irrigation infrastructure and services provided
Objective/Outcome 3 Improve agricultural productivity in project areas
Outcome Indicators 1. Increase in irrigated areas (hectares) with over fifteen percent (15%) increase in agricultural production
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Intermediate Results Indicators 1. Command area with improved irrigation infrastructure and services 2. Establishment of effective institutional mechanism for system management
Key Outputs by Component (linked to the achievement of the Objective/Outcome 3)
1. 57.6 % of the irrigated area achieved over fifteen percent (15%) increase in agricultural production 2. 54,962 ha improved irrigation infrastructure and services provided 3. Establishment of web-based project management information system in project management and implementation units
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ANNEX 2. BANK LENDING AND IMPLEMENTATION SUPPORT/SUPERVISION
A. TASK TEAM MEMBERS
Name Role
Preparation
Xiaokai Li Task Team Leader/Senior
Paulus van Hofwegen Senior Water Resources Specialist
Ilham Abla Senior Operations Officer
Kikkeri Ramu Water Management Institution Specialist Consultant
Guy Alaerts Lead River Basin Management Specialist
Irama Aboesoemono Basin Water Resources Management Consultant
Ninin Dewi Social Development Specialist Consultant
Sameena Dost Senior Counsel
Robert O’Leary Senior Finance Officer
Andry Utama Thamrin Finance Analyst
Dayu Amurwanti Governance Specialist
Mariam Rikhana Agriculture Consultant
Sandra Walston Program Assistant
Dewi Sutista Team Assistant
Supervision/ICR
Jun Matsumoto Task Team Leader(s)
Budi Permana Procurement Specialist(s)
I Gusti Ngurah Wijaya Kusuma Financial Management Specialist
Then Nina Herawati Team Member
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Unggul Suprayitno Team Member
Ninin Kania Dewi Social Safeguards Specialist
Xiaokai Li Team Member
Paulus Van Hofwegen Team Member
Dikshya Thapa Team Member
Marcus J. Wishart Team Member
Kian Siong Environmental Safeguards Specialist
Victoria Delmon ICR Principal Author
Regassa Namara Senior Water Economist
Deviariandy Setiawan Consultant
B. STAFF TIME AND COST
Stage of Project Cycle Staff Time and Cost
No. of staff weeks US$ (including travel and consultant costs)
Preparation
FY10 12.788 46,679.37
FY11 34.475 153,298.94
FY12 0 0.00
FY14 2.650 21,850.42
FY16 0 1,559.04
Total 49.91 223,387.77
Supervision/ICR
FY12 22.208 131,312.76
FY13 31.250 141,616.49
FY14 23.496 127,148.23
FY15 34.066 251,666.98
FY16 21.160 170,813.29
FY17 11.650 95,781.52
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FY18 13.022 287,694.99
FY19 5.765 42,296.20
Total 162.62 1,248,330.46
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ANNEX 3. PROJECT COST BY COMPONENT
Components Amount at Approval
(US$M) Actual at Project
Closing (US$M) Percentage of Approval
(US$M)
Improvement of basin water resources management
38.72 24.98 64.1
Improvement of participatory irrigation management
84.71 82.66 97.6
Jatiluhur Irrigation Management Improvement
62.49 37.47 60
Project Management and Implementation Support
16.64 15.82 95.1
Total 202.56 160.93 79.45
Financing Plan (US$M)
IBRD Government Beneficiaries Total
ICR 119.29 41.64 0 160.93
PAD 150.00 52.56 0 202.56
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ANNEX 4. EFFICIENCY ANALYSIS
1.Introduction
Project efficiency is a measure of how economically project resources are converted into results. In the context of this ICR, project efficiency has been measured using a suite of methods and indicators. In addition to the usual indicators of project worth (i.e., internal rate of return (IRR), net present value (NPV), Benefit Cost Ratio) other indicators or norms such as unit costs per hectare or per beneficiary and agricultural productivity indicators are employed. To the extent possible these efficiency indicators are presented for the appraisal and ICR stages of the project.
2. Methodology, key assumptions and data sources
Various primary and secondary data sources have been used in the efficiency analysis including the project’s own M&E records and sample surveys by independent consultants. Specifically, the Independent Monitoring Evaluation at the National Steering Committee on Water Resources (IME-NSCWR) has been employed to independently assess how the project interventions such as rehabilitation affect irrigated area, cropping intensity, cropping pattern and productivity. Additional surveys were done by IOPIM, IDPM and NPIU PSDA consultants.
2.1 IME Evaluation: Conceptual Framework and Evaluation Design
The conceptual framework of the IME’s evaluation is depicted in figure A4.1 below. The evaluation design has to solve two empirical and conceptual issues. First, there is a need to isolate the project’s true effects from other non-project related influencing factors (e.g., pests and diseases). Second, the evaluation design needs to take into account interventions that have scheme wide effects (e.g., strengthening institutions, improvements in rice value chains, capacity building, farmer field school, demonstration plots, agribusiness development, and community grant for agribusiness investment. etc.) and those that have localized effects (e.g., rehabilitation). The impact of rehabilitation depends on the location of the scheme where the intervention is implemented.
Figure A4.1 Conceptual Framework of the Evaluation
Source: IME, National Steering Committee on Water Resources
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To deal with these measurement problems, IME designed the evaluation scheme depicted in Figure A4.2 below. Initially, IME included in the evaluation design irrigation schemes outside WISMP-2 to use them as control or counterfactual. However, later on this approach was abandoned due to the concern that irrigation schemes included in the project and those not included may have different socio-economic and biophysical contexts. Instead, the design depicted in figure A4.2 was adopted. To gauge the total effects of the soft and hardware project interventions, before and after analysis based on comparison of baseline and end of project situation of sample schemes has been performed. To isolate the effects of rehabilitation interventions, double difference analysis employing data collected on before/after and with/without project scenarios was performed.
To measure the effect of rehabilitation, control samples are selected from part of the same irrigation scheme that is getting rehabilitation and possibly situated in a comparable location (i.e., upper, middle, and lower) within the scheme. This notion is conceptually shown in the Figure A4.2 below. The agricultural productivity indicators monitored include: paddy yield, cropping intensity, irrigated area, and production. IME conducted multiple surveys in 166 Irrigation Areas, which represents 11.2 percent of the 1,477 Irrigation Areas intervened by the project. The irrigation areas are categorized into three groups based on management responsibility. These are central, provincial and district irrigation areas.
Figure A4.2 Evaluation Design
Source: IME, National Steering Committee on Water Resources
2.2 Ex-post Economic and Financial Analysis
Cost benefit analysis was performed by adopting the methodology and key assumptions used at the
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appraisal stage to the extent possible to facilitate comparisons.
The assumptions used in the project cost-benefit analysis are as follows:
a) The period of analysis was assumed to be 30 years both at appraisal and ICR stages;
b) Discount rate assumption was 12%;
c) The cost of annual incremental O&M is assumed to be 1.5% of the value of investment cost for component 1 and 1% for components 2 and component 3;
d) Farm gate price is converted to economic price using price information in 2017 from the World Bank’s commodities price data (April 2018);
e) The financial prices of goods and services were converted to economic prices using a conversion factor (CF) of 0.95;
f) The shadow wage rate was calculated using a conversion factor of 0.85;
g) Under without-project situation, the yield of irrigated area declined by 2% per year across the project area, with the exception of Jatiluhur where, the yield declined by 5% per year.
The cost benefit analysis was performed both component by component and for the overall project.
Project costs
Total actual program cost is US$ 160.93 million (IDR 2,051,740.8 million)(excluding beneficiary contributions) and including contingencies over a six-year implementation period. Program costs are organized into three major components. The estimated project cost by component are summarized in table 1 below.
Table 1 Estimated project cost by component
Component At Appraisal At ICR % of actual disbursement
IDR million US$ million IDR million US$ million IDR US$
TOTAL 1,873,125 202.56 2,051,740.8 160.93 109.5% 79.45%
Input and output prices
Output and input prices are assumed constant in 2017 terms over the project lifetime. Farmgate prices of the most important agricultural commodities in the project area were estimated (table A4.2). The cost of
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pesticide is estimated based on average treatment cost per hectare for each crop. Price of seeds is based on retail prices. Farm labor and mechanized operations are priced at the ongoing wage rates is of IDR 80,000 per day for skilled labor and IDR 60,000 per day for unskilled labor. The financial prices were adjusted by using appropriate conversion factors. TableA4. 2. Conversion to economic prices
The number of people that benefited from improved irrigation from the project at ICR is estimated as 5.1 million in 201724 and so it has exceeded initial estimates. According to the PAD, 500,000 farmer households would directly benefit from more reliable and efficient irrigation water supply and increased agricultural productivity through improved irrigation water management, in addition, 600,000 farmer household beneficiaries of WIMSP I will continue to benefit from WIMSP II activities. With four people on average per household in Indonesia25, the number of beneficiaries was estimated as 4,400,000 at appraisal.
Project benefits are assessed by component as follows.
Component 1. Improvement of Basin Water Resources Management: the methodology used to complete the economic analysis of this component involves comparing without and with project scenarios, taking into account the avoided losses from flood and landslide as the economic benefits.
The benefit of River Infrastructure Maintenance (RIM) activities is calculated as avoided losses associated with including land protection, building and household income from riverbank protection and maintenance of the infrastructure activity stream. The estimated benefits from floods are avoided losses of residential areas and buildings, goods and properties, agricultural crops, retention of business and work activities. The benefit of RIM activities for flood are based on losses suffered by communities and public facilities on an annual basis. The estimated annual loss caused by flood includes loss of household and building, loss of agriculture especially on paddy field, and suspension of business activities and income of household. Data on average unit cost/loss of each activity mentioned above are collected through household surveys. Table 3 shows the estimated average annual losses due to floods in Java and off Java.
Table A4.3 Estimated average annual losses due to floods
No Damage Loss Avoided losses per year (IDR
24 World Bank. Matrix Summarizing Progress Toward CPF Objectives, WIMSP II (2017). 25 Statistics Indonesia. Average Household Size by Province, 2000-2015 (Indonesia). http://bps.go.id/
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000/year)
Java Off Java
1 Loss of household, building, household effect and stored goods and public facilities
2,865 2,516
2 Loss of agriculture (wet paddy field) 8,989 8,447
3 Suspension of business activities and household income
187,0 138,8
Source: Result of NPIU Consultant PSDA WISMP II Calculation, April 2018
The benefit of damage caused by landslide is estimated based on losses suffered by society and public facilities caused by landslide in the absence of RIM activities, especially Bank Protection activity in the form of cliff construction for riverbank protection. RIM activities are reducing the losses suffered by the community due to landslides, damage to houses and buildings and property ownership, and agricultural crops. Table 4 shows the estimated average annual losses due to landslide in Java and off Java.
Table A4.4 Estimated average annual losses due to landslide
No Damage Loss Avoided losses per year (IDR 000/year)
Java Off Java
1 Loss of house and properties 3,000 2,400
2 Loss of household income 187 192
3 Loss of village road 105 70 Source: Result of NPIU Consultant PSDA WISMP II Calculation, April 2018
The benefit of component 1 also include improving irrigation canals, expanding catchment reservoirs for irrigation, improving river system management. These RIM activities have benefits on agricultural crops in increasing productivity.
The outcomes of RIM activities include improving irrigation canals, protecting from landslides and expanding the catchment reservoirs for irrigation. Table A4.5 shows the results of RIM activity analysis in the project area through the analysis of the damage loss avoidance. The cost of damage is the cost necessary to rebuild or repair the damage caused by a disaster, which has been given an economic value. Table 5 shows the total benefit from damage loss avoidance (which include avoided losses caused to household and building, agriculture as well as suspension of business activities and household income) by implementing RIM activities.
Table A4.5 Estimated benefits of RIM activities
No Damage Loss Avoided losses (Rp
million/year)
1 Loss of Household, Building, Household effect and Stored
Goods and Public Facilities 7,845.6
2 Loss of Agriculture 10,806.6
3 Suspension of Business Activities and income of household 743.6 Source: Result of NPIU Consultant PSDA WISMP II Calculation, April 2018
Component 2: Improvement of Participatory Irrigation Management (PIM). The main benefit of
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component 2 are increases in crop area, yield, cropping intensity, and ultimately agricultural production. These parameters were estimated using data gathered by several agencies including IME as explained above. The cost benefit analysis for component 2 is based on the yield and cost assumptions presented in table A4.6 below.
Table A4.6 Yield and cost of production for with and without project scenario
GKG: Grain Dried Milled. WOP: Without Project. WP: With Project
The cropping intensity as a result of WISMP-2 investments show some variation. The cropping intensity increase for paddy and onion are 12 percent and 14 percent, respectively. Soybeans show a decrease in cropping intensity, from 58 percent without the project to 45 percent with project intervention, the cause could be a change to intercropping patterns. Maize showed a minor increase at three percent (table A4.7).
Table A4. 7 Cropping intensity in project area
Commodities
Cropping Intensity (%)
WOP WP
Paddy - GKG* 198% 211%
Maize 83% 87%
Soybean 58% 45%
Onion 41% 55%
Component 3: Jatiluhur Irrigation Management Improvement: Cost and benefit data on inputs, yields and outputs are collected. Incremental benefits are derived by comparing without and with project scenarios (table A4.8).
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Table A4.8 Cropping intensity and yield in Jatiluhur area
Commodities Productivity indicators
WOP WP
CI(%) 193% 200%
Yield (t/ha) 5.84 6.84
Cost (IDR/ha) 7,231,602 8,747,533
3. Results of Agricultural Productivity, Unit Cost, Financial, and Economic Analysis
3.1 Agricultural Productivity Analysis.
The WISMP-2 interventions are in the form of physical (structural work) and non-physical (non-structural) work. The physical work involved rehabilitation of selected damaged irrigation infrastructure, which may affect the whole or sub-section of an irrigation scheme. Whereas, the non-structural interventions such as institutional interventions affect the whole irrigation scheme. The with project (WP) and without project (WOP) comparison of sample irrigation schemes captures the effect of structural and non-structural interventions. The WP and WOP comparison of cropping intensity and yield for rice is summarized in table A4.9.
Table A4.9 Cropping Intensity & Paddy Yield by Project Area
Source: Client ICR, Calculations based on field survey results, 2017and 2018
Region
PADDY WOP WP WOP WP
Average of Sumatra 2.17 2.18 3.95 5.20
- Aceh 1.52 1.52 4.63 6.15
- Sumatra Utara 2.33 2.49 4.40 6.00
- Sumatra Barat 2.67 2.68 3.44 5.01
- Sumatra Selatan 1.76 2.00 4.05 4.20
Average of Java 2.16 2.27 5.07 5.17
- Jawa Barat 2.60 2.65 4.31 4.62
- Jawa Tengah 2.02 2.29 5.26 5.89
- D.I. Yogyakarta 2.35 2.53 6.03 6.91
- Jawa T imur 1.86 1.96 5.11 6.02
Average of Sulawesi 1.84 1.90 3.89 5.69
- Sulawesi Selatan 1.85 1.97 4.03 5.90
- Sulawesi Barat 2.00 2.00 4.38 6.00
- Sulawesi Tengah 1.82 1.95 3.70 5.47
Nusa Tenggara
- Nusa Tenggara Barat 1.61 2.08 4.34 5.60
- Nusa Tenggara T imur 1.66 2.00 1.95 3.26
Average Non Jatiluhur 1.98 2.11 4.32 5.35
JATILUHUR 2.00 2.00 5.84 6.84
Cropping Intensity
(%)Yeild (Ton/Ha)
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The IME analysis also indicated detected significant changes in planting area, cropping pattern (in specific sampled irrigation schemes) and cropping intensity, which is attributable to structural and non-structural interventions of the project26.
The results of the analysis using the double difference method to assess the effect of rehabilitation on Cropping Intensity and yield is summarized in tables A4.10 and A4.11. On average, rehabilitation significantly increased cropping intensity and paddy yield. These improvements are particularly substantial in provincial and district managed irrigation schemes.
Table A4.10 Impact of Rehabilitation on Cropping Intensity
Scheme type Type of crops
Before After Double Difference
Rehabilitated Noon Rehabilitated
Rehabilitated Noon Rehabilitated
Central, Provincial & district schemes
All crops 228.6% 222.4% 240.7% 231.6% 2.9%
Provincial & district schemes
All crops 241.9% 232.1% 249.7% 237.5% 2.4%
Central, Provincial & district schemes
Rice 197.2% 194.2% 206.9% 201.5% 2.4%
Provincial & district schemes
Rice 196.4% 194.1% 208.4% 201.7% 4.4%
Source: Adapted from IME report
Table A4.11 Impact of Rehabilitation on paddy yield
Scheme type Before (ton/ha) After (ton/ha) Double Difference (t/ha)
Rehabilitated Noon Rehabilitated
Rehabilitated Noon
Rehabilitated
Central, Provincial & district schemes
4.89 4.67 5.36 4.99 0.15
Provincial & district schemes
4.42 4.39 5.32 4.98 0.31
Source: Adapted from IME report
26See Independent Monitoring and Evaluation Report
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3.2 Results of Unit Cost Analysis
Table A4.12 presents a comparison of main efficiency measures between the estimates at appraisal and the ICR analysis. To facilitate the cost comparison, the project cost at appraisal in 2011 prices was adjusted to 2018 prices using Consumer Price Index (CPI). The calculated project costs per hectare and per beneficiary are lower at ICR stage due mainly to increases in the number of beneficiaries and irrigation areas serviced at completion stage.
Table A4.12 Overview of Efficiency Measures
Efficiency Indicators At appraisal At ICR % /b
Total Beneficiaries /a (No.) 4,400,000 5,100,000 115.9
Total Costs (US$ million) 202.56 160.97 69.2/c
(IDR million) 1,912,900.0 2,051,740.8 76.9/c
Total Area (ha) 419,649 450,412 107.3
Cost per Beneficiary (US$) 47.3 31.6 66.0/c
(IDR) 606,300 402,302 66.4/c
Cost per project Area (US$/ha) 493 357 64.6/c
(IDR/ha) 4,558,333 4,555,253 71.7/c
\a Data collected at ICR.
\b End of project (EOP) as % of appraisal estimate.
\c Inflation adjusted.
3.3 Results of Economic Analysis
Th results of component by component cost benefit analysis are summarized in table A4.13. The calculated IRRs are within the range of values estimated at appraisal stage and provided in the project appraisal document. At the ICR the benefits of agribusiness projects such as beef fattening, provision of combine harvesters, establishment of rice milling units and organic fertilizer manufacturing facilities were explicitly accounted for in Components 2. These sub-projects were financed through matching grant facility provided by the project.
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Table A4.13 Summary Results of Economic Analysis
Components IRR (%) at Appraisal IRR (%) at ICR
Component 1 16%-22.0% 11.8
Component 2 21.0%-22% 17.7
Component 3 20% -23.0% 14.1
Overall Project 17%-19.0% 16.2
3.4 Sensitivity Analysis
The Key factors assumed to have significant influencing on project performances are; (i) project cost escalation; and (ii) suboptimal increases in rice yield – by far the major crop grown in the project area. Sensitivity tests presented in table A4.14 below suggest that the project economic viability is robust and that the factor having the most significant impact on the EIRR is the yield reduction.
Table A4.14 Results of sensitivity tests of selected factors
Sensitivity factor Tested Change EIRR NPV (@ 12%) Million US$
Base case 16.2% 24.5
Project cost increase +20% 12.5% 2.8
Reduction in Rice yield -20% 12.2% 1.1
3.5 Financial Analysis
The average farm size is 0.55 ha in Java (except Jatiluhur), 1.24 ha in Jatiluhur and 0.97 ha outside of Java. With project intervention, the cropping intensity increased in the project area as shown in table A4.9.
The results of household income analysis showed a significant increase in farmers' income from increased crop production following the implementation of the WISMP II (table A4.15). In Component 2, the change in household income of farmers in Java is 27.9 percent and the increase in household income of farmers outside Java is estimated at around 66.8 percent. Jatiluhur farmers experienced an increase of 29.7 percent in household agricultural income. Overall, the average increase in farm household income for all regions was 41.5 percent. If compared with unaffected farmers (control group), the farmers' income in the project area, on average, is 18 percent higher than the control group.
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Table A4.15 Changes in household income in project areas
The project is thus financially attractive to farmers involved in all kinds of improved irrigation practices. The substantial increase in beneficiary farm income will provide farmers with adequate incentives and capabilities to participate in development investments, also because they will have the capacity to carry out O&M of on-farm irrigation systems through WUA / WUAF.
3.6 Fiscal Analysis
The central and local government allocated a total of US$41.64 million to WIMSP-2. The project introduced participatory O&M practices for target irrigation schemes. Funding for O&M of tertiary canal systems after rehabilitation is fully covered by the WUAs and WUAFs, while the O&M costs for the improved secondary and main canals are covered by the government as per current water sector policies and the O&M cost is estimated as US$ 2.4 million.
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ANNEX 5. BORROWER, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS
The Borrower was provided with a draft ICR and invited to provide comments. No comments were provided
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ANNEX 6. SUPPORTING DOCUMENTS
Supporting documents:
PAD for WISMP-1 https://hubs.worldbank.org/docs/imagebank/pages/docprofile.aspx?sq=%7B%22k%22%3A%22P059931%22%2C%22rf%22%3A%5B%7B%22n%22%3A%22IBDOCTY%22%2C%22v%22%3A%22Project%20Documents%3AProject%20Appraisal%20Document%22%7D%5D%2C%22pg%22%3A1%2C%22sb%22%3A%22Rank%22%2C%22so%22%3A%221%22%2C%22pr%22%3A%2210%22%2C%22dt%22%3A%5B%5D%2C%22sf%22%3A%22All%20Documents%22%7D&nodeid=2365389&pos=7_1 PAD for WISMP-2 http://wbescsprd3.worldbank.org:9280/ACS/servlet/ACS?command=read&version=2.3&docbaseid=0224b0&basepath=%2Fwbpfiles26%2Fwbecmoksp%2Fdata%2Fwbecmoksp%2Fwbdocs_storage_25%2F000224b0&filepath=80%2F01%2Fd7%2Fc1.pdf&objectid=090224b0828d7337&cacheid=dggEAgA%3D%3DwdcBgA%3D%3D&format=pdftext&pagenum=0&signature=bBfuG%2FCaO35FQKAliVXvWDqs8XidOFSinkKFQGDetYt5OuTEh9p0mxghbQllnzXhrct%2F6BrT5FOBHEiz43zSCe2HGS5n6gs0AmnKx3bUnW7YZFkfS3CeTEs06gtxykqpSoVTuBWkgcvZPgCEBazYiUpMrMebh4utt%2FLM0EvuncQ%3D&servername=Awbescsprd3_wbecmoksp&mode=1×tamp=1542107039&length=1174757&mime_type=application%2Fpdf¶llel_streaming=true&encryption_mode=require&expire_delta=360 Aide Memoires May 7, 2015 http://wbescsprd3.worldbank.org:9280/ACS/servlet/ACS?command=read&version=2.3&docbaseid=0224b0&basepath=%2Fwbpfiles28%2Fwbecmoksp%2Fdata%2Fwbecmoksp%2Fwbdocs_storage_27%2F000224b0&filepath=80%2F00%2F12%2Fe4.pdf&objectid=090224b082ef2cd1&cacheid=dvgEAgA%3D%3D5BIAgA%3D%3D&format=pdftext&pagenum=0&signature=GXVaVRpSPF36Nh%2B5Z2wFf02NGKv3oHFvTdo4LedrLZN9MQQ9%2FMBhcxf3JicIyxsucyK4UMQc780QyafqIxkb2e0Tu3tHp1Sidyk%2FhKedP9tFxeCRNZGPVnB2yKhrMsML1HT1FwGcjKvGDZsbxLx2oNyRZqTRq8ppbtM2q0QeFUU%3D&servername=Awbescsprd3_wbecmoksp&mode=1×tamp=1542107506&length=1679354&mime_type=application%2Fpdf¶llel_streaming=true&encryption_mode=require&expire_delta=360 Nov 10, 2015 http://wbescsprd3.worldbank.org:9280/ACS/servlet/ACS?command=read&version=2.3&docbaseid=0224b0&basepath=%2Fwbpfiles29%2Fwbecmoksp%2Fdata%2Fwbecmoksp%2Fwbdocs_storage_28%2F000224b0&filepath=80%2F00%2Fc2%2Fc8.pdf&objectid=090224b083f30321&cacheid=d0gEAgA%3D%3DyMIAgA%3D%3D&format=pdftext&pagenum=0&signature=bJjau1nT9XzHMgpEEHAkY0ZaWbcniaIzXt10MPjnRbkbzCBhAE9ptYz9IHn8e5kASpYidXthVqEKBv%2FCRkECBr51WeEY%2FGgIpnL2bp2bel7nqLUvGndy9bozRYYiLWutqrSsTW0rsLBFzwtHTfIUM9w8t9rqFv6P6lyfZWAtGas%3D&servername=Awbescsprd3_wbecmoksp&mode=1×tamp=1542107579&length=534070&mime_type=application%2Fpdf¶llel_streaming=true&encryption_mode=require&expire_delta=360 June 2, 2016 http://wbescsprd3.worldbank.org:9280/ACS/servlet/ACS?command=read&version=2.3&docbaseid=0224b0&basepath=%2Fwbpfiles20%2Fwbecmoksp%2Fdata%2Fwbecmoksp%2Fwbdocs_storage_19%2F000224b0&filepath=80%2F02%2F4d%2F39.pdf&objectid=090224b0843e111c&cacheid=dMwEAgA%3
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=application%2Fpdf¶llel_streaming=true&encryption_mode=require&expire_delta=360 Restructuring paper (WISMP-2) http://wbdocs.worldbank.org/wbdocs/drl/objectId/090224b083ff1899 Borrower’s completion report http://wbdocs.worldbank.org/wbdocs/drl/objectId/090224b0865d09e2 ICR for WISMP-1 http://wbescsprd3.worldbank.org:9280/ACS/servlet/ACS?command=read&version=2.3&docbaseid=0224b0&basepath=%2Fwbpfiles27%2Fwbecmoksp%2Fdata%2Fwbecmoksp%2Fwbdocs_storage_26%2F000224b0&filepath=80%2F06%2Fea%2F86.pdf&objectid=090224b082c257ba&cacheid=dlgEAgA%3D%3DhuoGgA%3D%3D&format=pdftext&pagenum=0&signature=p7HrkmUHGmEHN5noN1cKaGNZLtimLkWKaDqGCN6Ho7vcPK0Q%2BqYyL4KwDp4xAZr7ZBZwFWw2ikLTItzgyAin8qrC9Tt83E2SViBlDRjYTpxPlkDinjF8%2FHf6%2BhlO1%2FbPbofbdN74%2FerJlZmp%2Bc8d40geq9H%2FpZ4TIgtQ7nJOxCc%3D&servername=Awbescsprd3_wbecmoksp&mode=1×tamp=1542102860&length=110272&mime_type=application%2Fpdf¶llel_streaming=true&encryption_mode=require&expire_delta=360 IEG review of ICR for WISMP-1 http://wbescsprd3.worldbank.org:9280/ACS/servlet/ACS?command=read&version=2.3&docbaseid=0224b0&basepath=%2Fwbpfiles27%2Fwbecmoksp%2Fdata%2Fwbecmoksp%2Fwbdocs_storage_26%2F000224b0&filepath=80%2F06%2Fea%2F86.pdf&objectid=090224b082c257ba&cacheid=dlgEAgA%3D%3DhuoGgA%3D%3D&format=pdftext&pagenum=0&signature=pr555WUnKmynB%2BH5wdQ3aoU%2FPJEIbTjxmg74iGWQ%2BPsho4YF2CbgYXCNw3BmCSnVH7OcAksTOl1ssL9jzDtFVxjwZEEYyeqVPQ2HjJtyONkHWuZalZchX0X4UnX7Ml3EouT0mpO%2BzXa%2Fwn6lbFVtcBtrcGLP9MG%2FffQWcZOwdOQ%3D&servername=Awbescsprd3_wbecmoksp&mode=1×tamp=1542689992&length=110272&mime_type=application%2Fpdf¶llel_streaming=true&encryption_mode=require&expire_delta=360 Indonesia CPF FY16-20 CPF Indonesia FY 16-20 Independent Monitoring and Evaluation Report http://wbdocs.worldbank.org/wbdocs/viewer/docViewer/indexEx.jsp?objectId=090224b0865efc45&respositoryId=WBDocs&standalone=false http://wbdocs.worldbank.org/wbdocs/viewer/docViewer/indexEx.jsp?objectId=090224b0865efc45&respositoryId=WBDocs&standalone=false
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ANNEX 7. SUMMARY OF WISMP PROGRAM
1. The Water Resources and Irrigation Sector Management Program (WISMP) was designed as a three-
phase project to be backed by an Adaptable Program Loan (APL) originally also planned in three phases. WISMP was to serve as a vehicle to support GoI in the introduction and implementation of the decentralization and democratization of the water resources and irrigation sectors in selected provinces and districts. The Program’s objectives were: (a) sustainable and equitable management of surface water resources and their utilization infrastructure; (b) increased irrigation farm household incomes and improved regional food security as a result of raising the overall productivity of irrigated agriculture and reducing the vulnerability to natural and economic shocks through: (i) sustainable participatory irrigation management for more reliable and equitable water provision and, (ii) better agricultural and marketing support services for members of irrigation water users associations; and (c) more cost-effective and fiscally sustainable management of sector agencies. Although the project had already approved by the board in 2002, the first phase of the loan only became effective in 2004 after the promulgation of the Law no.7/2004 on Water Resources to ensure a firm legal basis for the Program.
2. The focus of the activities under the APL was for both the water resources and irrigation components
to establish and strengthen the new institutions following the promulgation of Law no. 7/2004 and its implementing regulations that were issued gradually (some regulations mentioned in the law were never issued). The capacity development activities were integrated into a series of activities of river basin planning and management, management and river and irrigation infrastructure rehabilitation.
WISMP-1
3. Phase 1 of the WISMP APL (WISMP-1) (P059931) supported the Government’s strategy to (i)
strengthen the sector governance and management institutions to meet the changing paradigm of water resources and irrigation management; (ii) improve fiscal sustainability of the sector; (iii) upgrade water resources and irrigation infrastructure; and (iv) close the current gap in crop productivity by improving the agricultural water productivity. WISMP-1 was intended to cover half of the country and to be the first phase of a 10 year program.
4. Four triggers were provided in the PAD of WISMP I for initiating WISMP II. These included: (a) four (4)
fully functional provincial river basin management units (PSDA); (b) fifty (50) WUAFs legally established and functional with respect to governance, maintenance and rehabilitation of schemes, financial sustainability, and using extension services and credit; (c) operational guidelines agreed on river basin management including environmental and social safeguards; and (d) fifty percent of external funding disbursed. WISMP-1 closed in December 2010.
5. The triggers to move to the next phase (WISMP-2) were found to have been met satisfactorily. The
project funds were fully disbursed. There had, however, been long delays in WISMP 1 implementation caused by late issuance of the enabling law and regulations. project effectiveness was delayed by more than two years while awaiting approval of Water Law no.7/2004. The project's original closing date was 12/31/2009. It was extended once by one year to ensure WISMP-1 completion. In the Independent Evaluation Group (IEG) review of the ICR for WISMP-1, the relevance of WISMP 1
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objectives and design were rated respectively as high and modest. Efficacy was rated as modest. Whilst the ICR for WISMP-1 had found that agricultural efficiency had increased as a result of the project, IEG found that “given the lack of data available to back up these findings and the substantial uncertainties about the attribution of any incremental benefits to the project efficiency is rated modest”. Significant shortcomings were identified by IEG in the project's achievement of its objectives and its efficiency and so WISMP-1's outcome rating was considered moderately unsatisfactory. The ICR had rated the outcome as moderately satisfactory. IEG concluded that the difference in rating was that efficacy and efficiency were both rated modest in the light of the sparse evidence presented on the project's achievements.
6. IEG stated that the ICR for WISMP-1 had noted five areas which deserved close attention in order to
ensure future sustainability of the project's achievements. They were (a) role sharing between national and provincial river basin management agencies; (b) role sharing and financing arrangements between national, provincial and district irrigation management agencies; (c) changed emphasis in support to farmers from project to service orientation; (d) asset management planning for transparent multi -year financial planning; and (e) human resource management, targeted training and staff rotation. IEG states that “More timely annual budget transfers" could be added to this list. All these risks indicate weaknesses in the sustainability of the project's achievements. Also relevant to the issue of sustainability is the European Union's comments on a draft of the ICR which noted the need to have more information on "the capacities of the institution and bodies supported by the project to manage water resources as envisioned by the project beyond the implementation phase " (ICR, Annex 8). The next project in the WISMP program (WISMP-2) started shortly after WISMP-1I and NTB-WRMP closed. This should provide a basis for addressing some of the shortcomings in WISMP I and thus help to ensure sustainability of its achievements. In view of this the risk to development outcomes is rated as moderate.”
7. WIMSP-2 8. As a result of the WISMP-1 implementation review, it was decided in consultation with the GoI that
APL2 and APL3 would be combined into one final phase – WISMP-2 - taking into account the de lays incurred in WISMP-1. The WISMP APL program would end with closure of WISMP-2. WISMP-2 was designed to continue the reforms of the water resources and irrigation sector and to focus on completing the key institutional development interventions of the WISMP APL Program. It also sought to address the shortcomings of WISMP-1 through clarification role sharing between the different levels of river basin management agencies and greater responsibility for management and financing at provincial and local levels, more effective capacity building at local level and better asset management planning.
9. WISMP-2 was designed to cover a total 18 river basins, 14 provinces and 101 districts. Most of the 7.2
million hectares of irrigated areas in Indonesia are located in these local provinces and districts. The Project only covers 18 river basins out of 134 basins in Indonesia, with approximately 360,000 of irrigation schemes below 3,000 ha in size, and 30,000 above 3,000 ha in size. The basins, provinces and districts largely overlapped with the WISMP-1 and the EU-funded and World Bank administered sister program NTB Water Resources Management Project to ensure that reforms that had stated under WISMP-1 could be continued in WISMP-2.
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10. The WISMP-2 sites were selected based on an evaluation of their performance under the previous
projects through an extensive consultation process with participating national, provincial and district agencies. WISMP-2 also introduced the PIM concept to a pilot national scheme, the Jatiluhur system, which is the largest irrigation system in Indonesia.
11. The WISMP-2 project sought to address the issues identified by IEG through components to improve
basin water resource management and participatory irrigation management, clarifying the roles of the agencies at each level and strengthening management at each level and empowering and strengthening WUAs and WUAFs at the local level. It also sought to test the PIM approach at the national level with a pilot in Jatiluhur.
12. The results of WISMP-2 are summarized in this ICR. 13. Overall impact of the Program and WISMP-1 and WISMP-2 14. Taking the Program’s objectives in turn: 15. Sustainable and equitable management of surface water resources and their utilization
infrastructure. More effective use of surface water for irrigation has been obtained through the expansion of irrigated area and increased production. National Water Council National Steering Committee for Water Resources was established under WISM-1 and has continued through the program, providing leadership and coordination. 9 provincial water resource councils, 16 multi-stakeholder river basin councils that allocate water resources and provide policy guidance, 17 river basin organisations and 63 irrigation commissions are fully functional.
16. Number of WUAs and WUAFs functioning. Since the establishment of WISMP Program a total of
4,186 WUAs and WUAFs have been established and 3,112 have been legally formalized. This has brought with it the benefits of improved input from farmers into the design and implementation of schemes, given a basis for the WUAFs to enter into contracts to carry out the works and has given them greater ownership in the schemes. It has also created fora for sharing information and capacity building and improving allocation of water between farmers and resulted in greater buy-in from farmers in the O&M of the schemes. River improvement management (RIM) has been established. Whilst the focus of the Program has been on building institutions, the two projects have made some improvements to infrastructure. The annulment of Law no. 7/2004 has put sustainability and the status of water resource management at risk as there is a lack of certainty on the status of the various entities and the right to charge user fees.
17. Increased irrigation farm household incomes and improved regional food security as a result of
overall productivity of irrigated agriculture and reducing vulnerability to natural and economic shocks through: (i) sustainable participatory irrigation management for more reliable and equitable water provision and, (ii) better agricultural and marketing support services for members of irrigation water user associations. Farm household income analysis under WISMP-1 showed significant increases in farmers income from improved crop production with the implementation of the project. According to the WISMP-1 ICR "the government's official statistics showed that in project areas the
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productivity rose by 15-20% on average through increasing cropping intensity and yields, which was made possible by improved irrigation system performance and agricultural support services " (paragraph 3.2.14). IEG noted that there were, however, no data provided to show that these increases were attributable to the project. As discussed in Annex 4, under WISMP-2 farmers’ incomes increased under the project from between 13 and 41.4% giving incentives to farmers to participate, with the lower results in the Jatiluhur scheme where activities were delayed.
18. Whilst all of the targets under WISMP-2 were not achieved for the Jatiluhur scheme, it demonstrated the benefits of inclusion of farmers in irrigation schemes in terms of productivity, allocation of water and buy-in from farmers in supporting O&M. GoI is keeping the PIM approach central to its policy in expanding and improving irrigation schemes and management and the PIM approach has been included in the new SIMURP project.
19. Productivity: The GoI adopted a policy of Participatory Irrigation Management (PIM) in which the
participation of water users in all aspects of development and management of irrigation systems and the establishment of ICs as multi-stakeholder coordination and decision-making platforms became mandatory at each district and province. The introduction of this reform agenda started being rolled out over the country starting in 2004 only for district and provincial systems supported by the WISMP APL and supported by Government finance in other districts and provinces. Since its introduction, the harvested rice area has grown from 11.9 Million hectares in 200427 to 14.1 million hectares in 2015. In that same period the production of dry husked rice increased from 54.1 Million tons/ha to 75.4 Million tons/ha and average yields increased from 4.53 tons/ha to 5.34 MT/ha or 18 percent over 12 years.28 . These results were achieved due to increased participation and commitment of local governments and the WUAs and WUAFs in the management of irrigation services.
20. Participatory Irrigation Management - The APL has been successful in supporting the introduction of
sustainable participatory (irrigation) management including more fiscal sustainability as can be seen by the established strengthened and functional national and provincial basin agencies, participatory irrigation management institutions (ICs, WUAs and WUAFs and Irrigation Services), the issuance of local government regulations on participatory irrigation management, and its inclusion in the RPJMD to enable budget allocation for PIM. Recent surveys in sample areas indicate an increase in budget allocation for PIM of almost 90% where PIM was included in the RPJMD.
21. Total Beneficiaries of the WISMP APL - The number of people that benefited from improved irrigation
from the project at ICR is estimated as 5.1 million in 201729 and so it has exceeded estimates in the PAD. According to the PAD, 500,000 farmer households would directly benefit from more reliable and efficient irrigation water supply and increased agricultural productivity through improved irrigation water management, in addition, 600,000 farmer household beneficiaries of WIMSP-1 would continue to benefit from WIMSP-2 activities. With four people on average per household in Indonesia30, the number of beneficiaries was estimated as 4,400,000 at appraisal.
27 2004 is the start of the implementation of the irrigation sector reform and introduction of the participatory irrigation management policy with the promulgation of the Water Law, No.7/2004. 28 Badan Pusat Statistik (BPS) 2018 29 World Bank. Matrix Summarizing Progress Toward CPF Objectives, WIMSP II (2017). 30 Statistics Indonesia. Average Household Size by Province, 2000-2015 (Indonesia). http://bps.go.id/
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22. More Cost Effective and fiscally sustainable management of sector agencies - After the efforts in
WISMP-1 to establish and strengthen the local institutions and legal frameworks, a process of internalization and confirmation of PIM was initiated from the onset of WISMP-2 through the inclusion of the principles and responsibilities of PIM in the five0year plans (RPJMD) and associated working plans and budgets. Of the 12 provinces and 91 kabupaten targeted, in 2017 PIM/PPSIP was already included in the RPJMD of 8 provinces and 70 kabupaten awaiting local elections for the remaining. The impact of this internalization process was that the local budget allocations for water resources and irrigation increased from RPJM 2009-2013 to RPJM2014-2018 on average with 90 percent for surveyed provinces and 97 percent for surveyed kabupaten. Looking at the three main agencies (Water Resources, Agriculture and Bappeda) the increase in budget for PIM/PPSIP was 156.7 percent and 144.30 percent respectively for provincial and kabupaten agencies. (MoHA-Bangda 2018).
23. Set-backs of cancellation of Law no.7/2004 – one of the main achievements of WISMP-1 was the
promulgation of the legal framework for water resources which brought greater clarity to the institutional framework and formalized the roles of the local, provincial and national ICs, WUAs and WUAFs, amongst other things. The cancellation of Law no. 7/2004 was a setback as it caused some uncertainty and disrupted the implementation of WISMP-2. A number of decrees have been issued to clarify these uncertainties, but it is hoped that the new law to replace Law no. 7/2004 will be enacted soon to keep up the momentum of PIM and the institutional arrangements established under the WISMP APL.
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ANNEX 8. SUMMARY OF BORROWER ICR
Introduction
The ICR is prepared by the NPMU, consolidating and integrating the reports from all NPIUs in MPWH, MOHA and Agriculture as well as from IMEU of NSCWR in Bappenas. The report consists of 4 (four) parts: 1) introduction, 2) Project Implementation and Progress, 3) Fiduciary and Project Management and 4) Lessons Learned and Recommendation. The full reports is available in the file.
1.Description of the Project
The purpose of WISMP II Program is to increase the capacity for Water Resources of river basin & irrigation and to improve agriculture productivity in irrigated area. The scope of WISMP II to be carried in five (5) years, 2011-2015 are as follows: (i) Improvement of coordination and management capacity of institution of river basin organization, as well as performance of river infrastructures; (ii) Improvement of capacity of irrigation institution at district and province level in implementing participatory irrigation management (PIM or PPSIP); (iii) Implementation of pilot PPSIP in Jatiluhur Irrigation Scheme (national strategic scheme); and (iv) Project management to support implementation. 2.Project Implementation and Progress
Implementation of the WISMP II experienced delay up to MTR, the progress was only about 26% compared 32.4% the average progress of 31 loan financed projects in the MPWH. The slow progress was largely due to the slow progress of Component 1 (20.1%) and Component 3 (17.7%). The Component 2 progressed well except its agriculture sub-component where DIA (community grant for agribusiness) only achieved the progress of 5%, affected the component 2 progress (only 30.3%).
Identified factors affecting the WISMP II progress are as the following:
Not comprehensively prepared. Based on interview with project management entities at local level (PPIU/KPIU), they need to convince policy maker in local government regarding the implementation of the on-granting, new mechanism of fund flow from central to local government. Therefore, the first two year of project implementation there was no significant activities implemented. However, the progress picked up quickly after the MTR. By the loan closing date most of project target were achieved or exceeded.
Delay in the consultant recruitment. Delay of consultant (TA) recruitment occur in the most projects. In the WISMP II, most of implementation support TA teams were mobilized only one year after loan effectiveness. The TA team consisted of BWRM to support component 1, IOPIM to support physical implementation, IDPIM to support institutional development, and ASIM to support agriculture sub-component.
Withdrawal of Team Leader of BWRM and internal coordination. Extreme slow progress of component 1 up to MTR was mostly caused by the withdrawal of the International Team Leader of BWRM-TA and the position remained vacant till MTR. After the position has been filled, followed with reorganization of the NPIU the progress showed significant progress.
Risk-avoiding in DIA implementation. Slow progress of the DIA was due to risk-avoiding behaviour of the DPKAD (Local Government Budget Office). Planning and implementation of this DIA was assumed to be under responsibility of Agriculture Office in province and district, however based on
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the MOHA instruction the latter was transferred to BPKAD while the planning remained in Agriculture Office. This transfer did not go well because the BPKAD had never been involved before thus in doubt of taking the fiduciary risk in case there are discrepancies in the implementation of community grant, such as miss-use of grant fund for ineligible activities, incomplete expenditure evidence, etc.
3.Key Factors for Implementation
a. The cancellation of Law No. 7/2004 on Water Resources.
The cancellation of Law No. 7 of 2004 on Water Resources (UU SDA) through Decision of the Mahkamah Kontitusi on February 18, 2015 greatly affects the implementation of WISMP II activities because the law is the legal basis of WISMP2 activities.
The impact of this to Component 1 is the uncertainty of 18 TKPSDA (Basin Councils) and 12 Dewan Sumber Daya Air Wilayah Sungai Propinsi (Provincial Water Resources Council). To avoid the vacant the minister of MPWH issued Ministerial Regulation No. 17 / PRT / M / 2017 on 15 September 2017, to restore the legal basis of all basin organizations. By the way, the two years uncertainty has caused negative impact to the project implementation i. e. strengthening of RBO and establishment of Water Use Right.
The impact to component 2 was on legal basis for PPSIP. All irrigation related regulations used in the implementation of WISMP II needed to be cancelled as well. Notwithstanding Law No. 11/1974 on Irrigation and its enforcement regulations which temporarily substituted the cancelled regulations are inadequate. In principle there are three basic things that lose their legal certainty with the cancellation of the Water Resources Law: (i) the division of authority for the development and management of irrigation between the central, provincial and district / city governments, (ii) the implementation of participatory approaches in the development and management of irrigation systems, and (iii) structure, function and relationship between irrigation management institutions. These three basic frameworks for the implementation of PPSIP activities of WISMP II were become uncertain due to cancellation of the law.
Fortunately, the law on Local Government no.23/2014 also mentions about the division of authority for the development and management of irrigation between the central, provincial and district / city governments. Therefore, the provision of the division of authority as stipulated in the Law on Water Resources remains in force. This clause has been used as the highest legal basis to continue with component 2 of the project. Simultaneously, on 2015 the minister of MPWH also several regulations related with participative irrigation management No.30/2015, and Irrigation Commission no.17/2015. With these, the impact to component 2 of the project was minimized.
b. Amendments to the Loan Agreements
The Loan Agreement was amended to include the National Shopping method and Small Work method by the letter of World Bank (Letter No. CD-151/WISMP II/VII/2014) dated on July 8, 2014. This was to allow the rehabilitation done by the WUAF. More than 60% of rehabilitation packages were done by the WUAF.
The second amendment of the Loan Agreement was December 31, 2015, after the MTR. The amendment consists of reallocation of the proceed of the loan from central-managed that support component 3, RBO—executed component 1, to on-granting portion to support component 2, and province government-executed component 1. The amendment also allows extension of the loan closing date from December 31, 2016 to May 31, 2018. It gave possibilities to increase some physical targets by using loan saving that
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come from appreciation of the USD to IDR.
c. Adjustment of targets
As a result of competitive bidding and Rp depreciation against US dollar, it was anticipated that there would be substantial savings of the loan proceeds. The GoI project team requested the Bank to consider increasing the loan disbursement of national government components, funding eligible additional activities under Components 1 and 3, and possible loan closing date extension by a year, in addition to the changes mentioned above.
4. Progress against PDO
Component 1 - River Basin Water Resources Management
The Project Development Objective (PDO-1) related with this component is “Number of national and provincial basin agencies fully functional in accordance with criteria set up in the Project Management Manual (PMM)”. From the target of 12 RBOs the project achieved 17 RBOs that fulfilled the criteria. The criteria consist of 12 sub-criteria, and the passing level of total score of the 12 criteria was 75 out of 100 in accordance with agreement between the project and the IME in NSCWR of Bappenas. To achieve this development objective the Component 1 consists of 11 (eleven) activities as mentioned in Log Frame which has been discussed between implementers and the World Bank. Aside of referring to the Log frames, below are three intermediate indicators spelled in the Loan Agreement, monitored during project implementation.
1) The number of watersheds that operates water allocation operations with the target of 12 watersheds. It was achieved in 15 Balais (RBO)
2) The number of river basin operational plans can be implemented with the target of 12 watersheds. It was achieved in 14 Balais (RBOs)
3) Percentage of RIM (financial and physical) activities with the target implemented 100%. It was achieved 93%.
Component 2 and 3 – Participatory and Jatiluhur Irrigation Management Improvement
The Project Development Objective (PDO-2 and PDO-3) to be achieved together by Component 2 and Component 3 together. The PDO-2 namely “Number of Irrigation Commission fully functional in accordance with the criteria set out in the Project Management Manual”. From 45 commission targeted the project achieved 65 commission fully functional by the end of the project. The PDO-3 namely “Increase in irrigated areas (hectare) with over fifteen percent (15%) increase in agriculture production (ton)”. Based on project monitoring, from 390,000 ha targeted only 63% of these areas that increase production above 15%. This is the only PDO that can not be made under the project even though the total production increase of the project is still above 15%. The reasons of why not all targeted areas achieve production increase 15% were due to pest attack and already high yield in project schemes located in Java island. Component 2 consists of four sub-components: (i) Improvement of participatory irrigation management institutions-2a; (ii) Participative rehabilitation of irrigation and drainage Systems-2b; (iii) Support irrigated agriculture and adaptation to climate change-2c; and (iv) Technical Assistances-2d. the Sub-component (iv) consists of three main TA teams: IDPIM to support Sub-component (i), IOPIM to support Sub-
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component (ii) and ASIM to support Sub-component (iii). Intermediate Indicator targets of Component 2 are: (i) Number of Water User Association Federations (WUAF) duly constituted, and (ii) Command area with improved irrigation infrastructure and services (hectares). The project has constituted 2100+ WUAFs of newly established and revitalized, and improved irrigation infrastructure and services 400,000+ ha. Component 3 consists of three sub-components: (a) Improvement of Jatiluhur irrigation system management institutions; (b) Rehabilitation and improvement of irrigation and drainage infrastructure in the Jatiluhur irrigation system, including; (c) Preparation for overall rehabilitation and modernization of the Jatiluhur irrigation system, including provision of technical assistance for point (b). Intermediate indicator targets of Component 3 are: (i) Establishment of effective institutional mechanism for system management; and (ii) Command area with improved irrigation infrastructure and services (30,000 hectares). The project has supported establishment of coordination mechanism amongst PJT2, provincial and kabupaten in the management of the irrigation system in Jatiluhur. The project has also achieved improvement of irrigation infrastructure and service (40,000+ hectare).
Component 4 – Project Management.
Indicator 11 is “Establishment of web-based project management information system in project management and implementation units”. The PMIS system consists of four sub-systems as followings.
o AWPS Annual Work Plan System
o FMS Financial Management System
o PCMS Procurement Contract Management System
o OOTS Output and Outcome Tracking System
3 sub-systems out of four were developed in 2015 and functional but OOTS was developed in October 2015. The manual of PMIS was prepared for developed three sub-systems. And through Workshops, NPMU trained PIUs to use the PMIS and asked them to input data into the system. The situation of PMIS utilization can be summarized as follows.
a) AWPS Around 98% of PIUs inputted AWP data for FY 2017
b) FMS Over 80% of PIUs inputted Financial data in 2016
c) PCMS Around 9% of PIUs inputted procurement data in 2016
d) OOTS Below 1% of PIUs inputted data in 2016
Now, the indicator 11 ranks at ‘functional’ but not ‘fully functional’ considering followings. 4 sub-systems have been developed and the OOTS has been socialized with NPIUs.
The PMIS utilization rates for AWPS and FMS has been improved a lot while those of PCMS and OOTS
are still low.
5. Quality at Entry
There were still some issues at the project entry which further affect the progress performance of the
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project implementation. Such issues relating to the project preparedness – particularly after signing the Loan Agreement - among other can be summarized as the following:
• The on-granting system had not been socialized well to the related and affected stakeholders, particularly at regional level, e.g. Most BAKD and local parliament were less informed regarding the on-granting system. This imply the project management entity at local level P[K]PMU and P[K]PIU has to take hard efforts and take time to convince them in the on-granting system. Even, the on-granting system – which actually it is not the essence of the WISMP II – has largely affect the project performance.
• Unestablished workable operational mechanism, procedure and legal umbrella for DIA (Agribusiness Investment Fund) which further affect the progress implementation of DIA. Requirement for GP3A to accountably implement DIA just identified in around mid-term period, and eligibility of DIA activities just being questioned after the mid-terms period after some activities using DIA fund has been identified as ineligible (e.g. for tertiary canal rehabilitation).
• The absence of baseline data for use in monitoring and evaluation at the early stage make the evaluation of PDO-3 in particular becoming difficult.
• Delay of recruiting key consultants contribute in the progress performance, as happened in the provision of BWRM and ASIM technical assistance.
6. Lessons Learned
• On Granting Mechanism WISMP II applied the on-granting mechanism of disbursing funds. On granting is a transfer of money or goods/services from Central Government to Local Government, done through an agreement. Grants can be channeled in tranches based on performance achievements. The grant could have been distributed through one of the following mechanisms: (i) transfer from RKUN to RKUD; (ii) Cash (direct transfer); (iii) Special Account; (iv) Letter of Credit (L/C); and (v) Pre-financing or on-granting. In WISMP II the On granting was carried out using pre-financing because it was the most secure mechanism since the disbursement has to be based on verified expenditure and activities report which leaves little space for misuse of the grant for ineligible activities. However, this mechanism also proved difficult to implement because local governments found it difficult to raise funds for pre-financing, particularly when the fiscal capacity of the LGs is low. Thus the lesson is that when signing the agreement the local governments should have considered their pre-financing capacity. Furthermore, for smoother implementation it is important to ensure that cash flow is continuous. This requires strategic planning for the cash flow by disbursing the grant in stages. In some regions – such as District in West Nusa Tenggara the disbursement was smooth, whereas in other places disbursement only happened once at he end of the year which implementation made it harder. It is also important to keep in mind the different channels of funds flow to the local government that pre-exists in the country and make sure that pre-existing channels are used to the extent possible instead of creating new or parallel channels which is not encouraging good governance in Indonesia. For example, in addition to the WISMP II on-granting system, the government also has a DAK grant system established (which are earmarked fiscal transfers from central to local government) in the irrigation sub sector. While
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the DAK does not have such stringent requirements (i.e. agreements, verification of disbursement document, pre-financing funds), the WISMP II on-granting system is more cumbersome. Therefore, effort should be made to streamline the process or to make sure that the project’s system is less cumbersome.
• Implementation Coordination
Coordination between various local agencies was crucial in WISMP II for successful project implementation. For effective coordination, a universal performance-based program should be applied to all agencies involved. The consistent implementation of a performance-based program will force better coordination. In WISMP II, coordination was successful where meetings were held 2-3 times a year, or even 4 times a year. Irrigation management also show poorer condition where vertical coordination between Provincial and District level is lacking. It is also possible that the current coordination practices applied in WISMP II will spill back rather than spill over, particularly if they feel no benefit of the coordination activities. Recommendation are to focusing on strengthening KOMIR for use as in coordination and evaluation forum. At the KOMIR coordination meeting, a sequential and horizontal coordination, and even vertical coordination meetings (in case of provincial KOMIR) can be initiated and institutionalized. The Good practice as in DI Jatiluhur – in which role sharing MOU is developed to comprehensively manage the DI Jatiluhur – can be replicated and enhanced for managing the DI Province. Theoretically such MoU is easier to be built between Provincial and District Governments.
• Improvement of Human Resource Capacity
Capacity building activities are crucial elements for sustainability or participatory irrigation management. Capacity building can have different impacts and depend on the quality of facilitation, the amount of follow up activities that were done post trainings, and the quality of the trainers. The essence of the WISMP II is capacity building. Capacity building under in the project was addressed to facilitators who would support the local government (SKPD) in water user groups and water user federation facilitation in the implementation of participatory irrigation. Capacity building activities were also addressed to WUAs particularly for their legalization, participatory design, participatory rehabilitation of irrigation infrastructure, participatory O&M, and related matter in agriculture practices as required. All of the capacity building program were planned and managed by the local government. To support the program sustainability, it is recommended to continuously implement training programs in PPSIP concept and approach, by using central government funds, local government funds or fiscal DAK transfers as possible. The Training and Education agencies under the Ministry of Public Works and Ministry of Home Affairs need to be involved and these agencies could act as training provider or training center for PPSIP training program. PPSIP training materials need to be produced including handbook for use by local government staff as well as water user groups.
• Participation
The process of participatory construction, where WUA are involved in construction, is beneficial not only to the WUAs but also to local government and all parties involved. However, there are variations in the form of participation i.e. community directly procures the material and carries out the infrastructure works themselves, or community works with a contractor, or local government carries out the procurement and community only carries out the works, and the most beneficial system turned out to be where the community carries out all works and procurement with the help of a contractor because more community capacity is built and there is also professional knowledge involved.
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The benefit of participatory construction to WUA is their increased sense of ownership and improved technical capability in irrigation construction. The benefit to the local government is sustainability of services more likely and also the reduced costs since the WUAs are contributing labor. The work quality of WUA might be lower compared to the contractor work, but it can be improved gradually by providing training in technical aspects.
7. Recommendations For Future Projects
Program Concept
The ‘project-concept’ should be holistic and include all both a) all 5 pillars of irrigation system development (Water, Infrastructure, Managament, Institutions and People) but b) also include a component focusing on income-generation of the farmers by means of a program on agriculture modernisation and climate adaptation.
Design of Implementation Modalites
Proger design of the proejct implementation modalities is an absolute pre-requirement to achieve the project concept. This implies amongst others the following aspects:
Proper Selection of Implementing Agencies
The responsible agencies in the Government responsible for the chosen project concept should also be included in the proejct as Implementing Agencies.
Proposed selection of Project Funding Mechanism
In case the OGA funding-mechanism are still applied these shoud be made much more specific that the onese applied for WISMPs with clear targets, and with the same conditions as in the loan.
ESSF
Support of or coordination with environmental institution or other related institution is necessary to make sure the project has reached the goal. One of the goals of ESSF is as tools to monitor the implementation of environmental and social safeguard. Support from the environmental institution that has the basic task and function as a monitoring institution of the environmental management and monitoring implementation, is required.
OWP and Inter-coordinated AWP/RKRKL
The process of OWP and AWP drafting has to be finetuned and applied via the PMIS system without the need expensive and ineffective AWP workshops.
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ANNEX 9. CONSTITUTION OF WUAs AND WUAFs
There are two indicators relating to WUAs and WUAFs. In the PAD, the only indicator was IRI2.1 which referred to number of WUAFs duly constituted. The Restructuring Paper also included a core indicator of “operational water user associations created and/ or strengthened”. The same baseline number was used for this core indicator of 1,175 as was used for IRI2.1. The end target, however was different. The Borrower ICR only makes reference to IRI2.1. WUAFs and WUAs are considered “duly constituted” when they are officially legalized by notary act. The original IRI2.1 target for WISMP-2 was 2030 duly constituted. This original target was achieved and exceeded during the project with the due constitution of legalization of 2,066 WUAFs by the end of the project. This is the same target that was used for the core indicator that was introduced at restructuring of number of water user associations created and/ or strengthened (although this refers to water user associations and not WUAFs but this core indicator is a sector core indicator introduces as part of the core indicator initiative). If the core indicator was referring to WUAFs, then this core indicator was achieved and exceeded. This core indicator is not referred to in the Borrower ICR and so it is not possible to cross refer to that.
In the Restructuring Paper, IRI2.1 target was revised to 2,995 and so this target was not achieved, unless it was intended post restructuring to refer to WUAs and WUAFs. The total number of WUAs and WUAFs legalized by the end of the project was 3011, which exceeds IRI2.1 revised target.
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ANNEX 10. SUB-INDICATORS TO MEASURE INDICATORS FOR COMPONENT 1
The Indicators used for Component 1 as listed in the WISMP II PAD are as follows:
i. Number of National and Provincial RBO fully in function. ii. Number of basin Water Allocation Plans Operational.
iii. No of River Infrastructure Operation and Maintenance Plans formulated and Implemented iv. Percentage of River Infrastructure established under the project and functional (RIM)
A further set of sub indicators to measure the indicators are as follows:
v. Existence of a coordination team: TKPSDA vi. Human Resource Management Capacity
vii. Water Quality Management viii. River Infrastructure Management (RIM)
ix. Budget Availability x. Water Allocation Management
xi. Hydrology xii. MIS Information System
xiii. Asset Management xiv. Pola & Rencana Plans in place
The pass grade deemed to be of acceptable standard was agreed as 75 percent as per the agreement between the Government and the World Bank31.
31 Government ICR and Aide Memoire April-May 2017
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ANNEX 11. OTHER OUTCOMES AND IMPACTS
Gender
1. The Project did not include a gender tag, indicating that the Project did not conduct specific analysis to identify gaps between men and women relate to project activities, nor did it include specific actions to address gender gaps, nor specific indicators in the Results Framework to measure gender relevant progress.
2. There is some data, however, on gender representation in government agencies involved in irrigation management. While it shows that female representation is limited in the ICs (7.1 per cent), with 55 per cent of these being in lower membership roles, the aide memoire from November 2017, noted that participation of women farmers has benefited the institutional strengthening and functioning of WUAs and that there is some data to indicate that KOMIR headed by women are well managed: “it seems that the involvement of women in the programs has a significant contribution to the success of program”. In some locations where the head of the secretariat was female, such as in Nusa Tengara Barat, the KOMIR carried out regular meetings and the WUAFs were performing well, particularly financially.
3. There was also some female participation in irrigation management training sessions in communities32 and
participation by women increased during the project in trainings provided by district agency of the Ministry of Home Affairs, increasing from 11 percent in 2013 to 15 percent in 2017. Female participation in WUA/WUAF and agricultural related training conducted by the Agricultural Agencies was only 6.8 percent. Of the field community organizers and facilitators recruited by the project33, approximately 16 percent are female on average across all districts34.
Institutional Strengthening
4. Components 1 and 2 and part of Component 3 of the project included significant activities to support institutional strengthening. Under Component 1, the strengthening was focused on national and provincial staff, water councils at province and basin level, and RBOs. Under component 2 and 3 the strengthening was dedicated to PIM institutions (provincial and district irrigation offices), ICs and WUAs and WUAFs. As noted above, many new WUAs and WUAFs were established and the existing ones were strengthened. Training to farmers focused on irrigation management and agricultural technologies. More systematically, institutional development was undertaken through the development of operational management plan preparation, network/ system development and implementation and preparation of basin management strategic plans and master plans. WUAs and WUAFs also benefited from direct support and training from the community facilitators hired under the project. The project also provided operational support to ICs and national programs.
32 The implementation of irrigation scheme level, participatory investigations to compile socio-economic, technical and institutional profiles of schemes was a mandated activity in each of the targeted WISMP II irrigation schemes designed to provide inputs for the design of WUA & WUAF empowerment and capacity building strategies. 33 Field facilitators assist the regional agricultural agencies in WUA/WUAF empowerment tasks and help facilitate participation by WUAs/WUAFs and local farmers in the physical development, upgrading and rehabilitation of irrigation infrastructure as well as in irrigation management, working with irrigation agencies 34 The GoI ICR indicates that 7 provinces (88%) and 77 kabupatens (96%) recruited facilitators, out of which the proportion of female personnel is roughly consistent across years, averaging 15.8%, and ranging from 14.3 % (2014) to 16.9% (2015).
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5. As noted in section II.A (Relevance of PDO), introduction of PIM approaches was one of the main objectives of this project. Local Irrigation Management Regulations (PERDA) were adopted by collaboration of local agencies and policy makers that facilitated PIM and the establishment and empowerment of the associated institutions i.e. ICs and WUAFs. One innovation during project implementation was internalizing PIM into local government development plans. This is possible when a newly elected governor prepares their Five-Year Development Plan (RPJMD) and Annual Program (RKP). Out of 14 provinces and 101 Districts, eight provinces and 70 districts included PIM in their development plans. This reflects commitment of the local government to adopt and implement the PIM and ensure continuation of the program post project implementation.
Mobilizing Private Sector Financing
6. Component 2 was designed, in part, to encourage the establishment of public private partnerships for farming and marketing through implementation of community sub-projects in participating provinces and participating Kabupaten. This was supposed to be achieved through: strengthening farmer capacity to become organized and accountable at all levels; and facilitating productive public private partnerships with multiple service providers (technology, markets and knowledge). However, with the change in orientation and later withdrawal of MoA this activity did not come to full development.
7. The project provided various training of trainers and classroom training as well as field-based school at the WUAs
and WUAFs. The subject of the training varied from organization (administration and financial), agribusiness, system rice intensification (SRI), climate adaptation, integrated pest control and management, and agriculture intensification. The Project also provided 508 exchange visits amongst WUAFs, and there were more than 5,000 agriculture training packages conducted in the project. The Project also provided Agribusiness Packages (Dana Investasi Agribisnis or DIA) to the WUAFs through competition.
8. The content of each package is determined by each WUAF under guidance of the extension workers. 365 packages
were delivered to WUAFs under the project. Packages vary from organic fertilizer development, rice milling, farm road development, and provision of combine harvesters. The project provided less support to farmers on agricultural methods and marketing of products than had been expected, partly due to the exit towards the end of the project of the MoA from the project so that it could focus on other priorities.
Poverty Reduction and Shared Prosperity
9. Through improved agricultural productivity and water security, the project contributed to economic growth, poverty reduction and food security. Food security is still a concern of GOI, and the irrigation systems included under the program are the backbone of Indonesia's staple food supply. Most of the country's poor are still in rural areas, and so the project benefits the poor more than others. As reported by farmers during the ICR mission to WUAs and WUAFs, the focus on WUA and WUAF participation has given farmers greater opportunity in the design and management of the irrigation schemes, with farmers further away from the irrigation schemes reporting that there is now greater equity in allocation of water, which in turn should increase productivity within the irrigation
Other Unintended Outcomes and Impacts
10. None.
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ANNEX 12. SAFEGUARD POLICIES TRIGGERED
This annex discusses the rationale for triggering the safeguard policies and implementation of the policies throughout the project: - OP 4.01 Environmental Assessment: the umbrella policy was triggered because the civil works carried
out under the three project components had the potential to result in temporary and localized environmental impacts, such as temporary decrease in water quality (i.e. increase suspended solid), traffic disturbance, temporary disturbance in water distribution. The civil works under Component 1 and 2 included rehabilitation of existing irrigation schemes or networks, mostly very small in scale with patchy civil works (i.e. irrigation canal lining) and river bank stabilization. Component 3 covered larger areas within the Jatiluhur Irrigation System. The nature of work was the same as for Components 1 and 2, with addition of dredging work to clean up the siltation in selected sections, an AMDAL was prepared for the component 3.
- OP 4.09 Pest Management: The rationale of triggering this policy was in anticipation of the proposed activities under sub-components 1 and 2, which included support to agricultural extension services, climate change adaptation measures including replication of environmental-friendly technological innovations and other interventions for improving agricultural productivity and raising farmers income. The proposed activities did not end up being implemented therefore no IPM was prepared.
- OP 4.10 Indigenous Peoples: the areas covered under WISMP-2 were similar to WISMP-1, with some additional districts. IPs were not found in WIMSP-1 areas. Under WISMP-2, the policy was triggered as precaution. There were no IPs identified during the implementation.
- OP 4.12 Involuntary Resettlement: small scale land acquisition was required under Components 1 and 2. As most of activities are in community level, similar to the implementation of WISMP-1, the required lands were acquired through voluntary land contribution. The community contributed their small pieces of land to get a higher benefit from the activities. Larger scale land acquisition was initially anticipated for Component 3, but such land acquisition was avoided through review of the design of some packages. Some packages involving land acquisition had to be cancelled due to slow implementation of land acquisition.
- OP 4.37 Safety of Dams: the policy was triggered by the Jatiluhur Dam as a storage and regulating
facility for Jatiluhur Irrigation System. Considering that the Jatiluhur Dam is part of an ongoing Bank-
supported Dam Operational Improvement and Safety Project (DOISP), and both physical remedial
measures and capacity-building interventions such as preparation of emergency action plan are
included under DOISP, timely implementation of DOISP activities for the Jatiluhur Dam have been able
to meet the Bank policy requirements
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