Document of The World Bank FOR OFFICIAL USE ONLY Report No.: 17977 IMPLEMENTATION COMPLETION REPORT PAKISTAN SECOND SCARP TRANSITION PROJECT (Cr. 2257-PAK) June 3, 1998 Rural Development Sector Management Unit South Asia Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized
Transcript
Document of
The World Bank
FOR OFFICIAL USE ONLY
Report No.: 17977
IMPLEMENTATION COMPLETION REPORT
PAKISTAN
SECOND SCARP TRANSITION PROJECT(Cr. 2257-PAK)
June 3, 1998
Rural Development Sector Management UnitSouth Asia Region
This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.
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CURRENCY EQUIVALENTS
Currency Unit SAR((May 1991) USS 1.0= Rs. 22.5Completion (December 1997) US$ 1.0 = Rs. 44
GOP AND GOProvinces' FISCAL YEAR (FY)
July I - June 30
MEASURES AND EQUIVALENTS
lin perial Units Metric UJnitsI inch (in) 25.4 millimeters (mm)
i .___________________________ _____________ 1,233.5 e ib; rt .ers (m J)
Pakistani Units Imperial Units Metric UnitsI, m-naund 82.3 lbs (0.0367 Igton) 37.32 kg26.8 maunds 2,205 lbs 1.0 t27.2 maunds 1.0 Ig ton (2,240 Ibs) 1,016 kg
ACRONYMS AND ABBREVIATIONS
ADIBP Agricultural Development Bank of Pakistan FVIA Project Implementation AssistanceCC A Cultural Command Area F'D Project Director(- Ws Cfommunity 1'ubewelils F-'ID Provincial Irrigation DepartmentDGWM Director General of Water Management PMC Project NManagement CellE f' R Economic Rate of Return FTW Private TubewellFGW Fresh G roundwater RAP Revised Action ProeramFMC() Functional Mobile Credit Ot'ficer SAR Staff'Appraisal Reportl:()s 'Farmers Organization SCARP Salinity Control & Reclamation lProject((OP Giovernment of Pakistan SCF Standard Conversion Factor(iOP1uniah (Government of Punjab Province SGW Saline Groundwsater(I-Sindh (Government of'Sindh Province S'MO SCARP Monitoring
i('() Mobile Credit )fticer I'W 'ube elilNRP North Robri 1'roiect 1TWs 1 ubcv clis
'& NI Operation and Mnintenance \\APDA Water &lox\cer A)woe ipmcn: ltmi!\!!- ii ( )n Farm Water Malnageinent fIA \k atcr l ser Association
Vice Ilresident: Mrlieko Nishimizu Countrv D)ircctor: Sadiq AhmedSector Managers Rid\wan Ali & Michaci BaxterStaff'NMember: l'sman Qaamar
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FOR OFFICIAL USE ONLYIMPLEMENTATION COMPLETION REPORT
PAKISTAN
SECOND SCARP TRANSITION PROJECT(Cr. 2257-PAK)
Table of ContentsPage No.
PrefaceEvaluation Summary ........................................................... v
PART I - PROJECT IMPLEMENTATION ASSESSMENT
A. Assessment/Evaluation of Objectives ........................................................... IB. Achievement of Objectives ........................................................... 3C. Major Factors Affecting the Project ........................................................... 6D. Project Sustainability ................... 8E. Performance of Bank .................... 9F. Borrower Performance ................... 10G. Assessment of Outcome ................... I IH. Future Operation ................... 11.. Key Lessons Learned.. .................... I
PART II- STATISTICAL TABLES
Table I Summary of Assessments .13Table 2 Related Bank Loans/Credits .14Table 3 Project Timetable .16Table 4 Loan/Credit Disbursements: Cumulative, Estimated and Actual .17Table 5 Key Indicators for Project Implementation .18Table 6 Key Indicators for Project Operation .24Table 7 Studies Included in Project .25Table 8A Project Costs ......................................................... 26Table 8B Project Financing ......................................................... 26Table 9 Economic Costs and Benefits ......................................................... 27Table 10 Status of Legal Covenants ......................................................... 28Table I1 Compliance with Operational Manual Statements ......................................................... 29Table 12 Bank Resources: Staff Inputs ......................................................... 29Table 13 Bank Resources: Missions ......................................................... 30
This document has a restricted distribution and may be used by recipients only in theperformance of their official duties. Its contents may not otherwise be disclosed withoutWorld Bank authorization.
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IMPLEMENTATION COMPLETION REPORT
PAKISTAN
SECOND SCARP TRANSITI[ON PROJECT(Cr. 2257-PAK)
Preface
This is the Implementation Completion Report (ICR) for the Second SCARP Transition Projectin Pakistan, for which Credit 2257-PAK in the amount of SDR 14.8 million (US$20 million) equivalentwas approved on July 31, 1991 and made effective on April 30, 1992. The Credit was closed onDecember 31, 1997, the original closing date. Final disbursement took place on May 18, 1998, at whichtime a balance of SDR 1.316 million was canceled. An amount of SDR 4.5 million equivalent wascanceled earlier on July 23, 1997.
The ICR was prepared by Mr. Usman Qamar, the task team leader and reviewed by MasoodAhmad, Michael Saddington (SASRD), and Najeeb Murtaza (SASRD/SASEN). The Borrower providedcomments that are included in Appendix B
Preparation of this ICR was begun during the final supervision and implementation completionmission in November 1997. It is based on material in the project file. The borrower contributed to thepreparation of the ICR bv (a) participating in the ICR mlission; (b) contributing to the :tatisticalinformation in the ICR; (c) commenting on the draft ICR; and (d) preparing its own evaluation report anda post-completion operational plan.
IMPLEMENTATION COMPLETION REPORT
PAKISTAN
SECOND SCARP TRANSITION PROJECT(Cr. 2257-PAK)
Evaluation Summary
1. Background. Pakistan's Irrigation system was originally built without provision for subsurfacedrainage. With the expansion of the irrigation system the groundwater table rose gradually, and by the1 950s waterlogging and salinity became wide spread in the Indus basin. To control these"twin menaces",the government embarked upon a series of salinity control and reclamation projects (SCARPs), underwhich about 12,000 tubewells were installed to lower the groundwater table. Besides providingsubsurface drainage relief, in fresh groundwater (FGW) areas, the SCARP tubewells (STWs) became animportant source of supplementary irrigation. While the SCARPs were generally successful in alleviatingwaterlogging, their performance declined over time due to poor management and inadequate operationand maintenance (O&M). Because of low cost recovery, the O&M cost became unsustainable for theGovernment. The STWs pre-empted over fifty percent of the O&M budgets, resulting in under funding ofthe O&M of the surface irrigation system.
2. While the performance of SCARPs declined, their demonstrative effect resulted in aboom of private tubewells (PTWs). Encouraged by the growth of PTWs and their ccntribution tosubsurface drainage, in early 1980s, the govemmeniL 4tupted a policy of discontinuing further publicsector investments in SCARPs and of dis-investingl the STWs in FGW areas. The dis-investment ofSTWs was termed as "SCARP Transition". A small project [The SCARP Transition Pilot Project (Cr.1603-PAK)] was initiated in 1986 covering 213 STWs of SCARP-1, in Punjab, with IDA assistance. Thepilot project was generally successful in meeting its objectives. It demonstrated that (i) it was technically,socially, and politically feasible to close down the highly subsidized STWs, if appropriate incentives wereprovided to install PTWs with preference given to small farmers; and (ii) the water table can bemaintained at appropriate levels by PTWs, even though farmers pump groundwater primarily to meetirrigation requirements.
3. Encouraged by the success of the pilot project, completed in June 1992, the governmentdecided to implement its policy of dis-investing SCARP tubewells in fresh groundwater (FGW) areas ona larger scale. Some 1.346 STWs in Punjab and 382 STWs in Sindh were targeted for dis-investmentunder the project. A feasibility study was prepared by the Ministry of Water and Power, which formedthe basis for Bank appraisal.
Project Objectives
4. The main project objectives were to: (i) increase agricultural production; (ii) maintain anappropriate groundwater table through PTWs; (iii) test the viability of SCARP Transition in Sindh; and(iv) prepare a follow up program for larger scale dis-investment of STWs. These objectives were to bemet bv (i) replacement of STWs by PTWs; (ii) improvement of about 500 watercourses in Punjab; (iii)provision of one-time financial incentives, and credit to farmers for PTWs; (iv) provision of consultants'services to assist project implementation. hydro-geological and impact evaluation studies, and preparationof future SCARP transition projects; and (v) training of farmers and project staff. During the mid-termreview (MTR) of the project, in line with the Bank's new water sector strategy for Pakistan, the above
Dis-investment of STWs- included (i) transfer to farmers: and (ii) replacement with PTWs.
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objectives were broadened to include equity of groundwater distribution by emphasizing farmerparticipation and introducing the concept of community tubewells (CTWs) -- tubewells jointly owned bymore than 30 percent of farmers in the command area of STWs.
5. The project objectives were clear, realistic and within the capacity of the implementingagencies. The objectives were also directly in line with the Government's sector policies and the Bank'ssector assistance strategy for Pakistan, which, inter alia, supported transferring the responsibility forgroundwater management in fresh groundwater areas to the private sector, and to free scarce resourcesfor improved O&M of the irrigation/drainage system.
Implementation Experience and Results
6. Achievement of Objectives. The project has been a success. Its physical targets have beenachieved or exceeded for all the main components, and its objectives have been achieved.
7. The project has resulted in a substantial increase in agricultural production, although lessthan assumed at appraisal. The ICR estimates are based on more conservative assumptions.
8. Barring variations caused by unusually high rains in 1996 and 1997, the groundwatertable in the Punjab project area is generally stable and close to the pre-transition level (average depth ofabout 13.5 feet). In the Sindh project area, the rising trend in the groundwater table that had developedduring 1986 - 1995, due to deterioration and closure of STWs, has been reversed by the growth of projectsupported tubewells.
9. Dis-invcstment of STWs has reduced the .ecurrent annual fiscal bur6eli VI uk&M cost ofSCARPs by about Rs i0 million in Punjab and Rs 50 million in Sindh in nominal terms. It has alsoreleased about 60 MW of electric power in Punjab and 10 MW in Sindh for other uses in the economy.
10. A larger follow-up project which covers most of the remaining SCARPs in Punjab [ThePunjab Private Sector Groundwater Development (PPSGD) Project (Cr. 2901-PAK)] has been approvedand is under implementation. GOSindh also has prepared plans for larger scale transition.
11. Institutional Development & Other Achievements. Besides meeting its stated agricultural,groundwater management, and fiscal objectives, the project has also made significant contribution tosector policies, social/equity aspects of SCARP transition and institutional development. This includes:introduction of the concept of CTWs; discontinuation of subsidy for individually owned PTWs in canalcommanded areas in Punjab; establishment of over 2,500 potentially viable farmer organizations (FOs);and promotion of the culture of participatory irrigation management among the implementing agencies.
12. Project Sustainability. The benefits of the project investments in tubewells and watercourseimprovements are likely to be sustained. There are over 400,000 PTWs in Pakistan, installed, operatedand maintained by farmers. Farmers in Punjab are well farniliar with this technology and repair andmaintenance facilities are locally available. In Sindh also farmers are becoming familiar with tLbewelltechnology and tubewell drilling facilities and maintenance workshops have developed. The experienceunder On-Farm Water Management projects hias been that although Water User Associations (WUAs)tend to become inactive after the watercourse has been improved. farmers continue to mainitainwatercourses through traditional informal arrangements. This problem is being addressed by establishingFOs at the canal level.
13. Monitoring studies including remote sensing carried out under the project have notreported any adverse trends in soil and groundwater quality. Possible long term impact of groundwaterusage on soils (increased salinity/sodicity) and uncontrolled pumpage from the FGW areas are being
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mitigated by implementing a program of soil and groundwater monitoring and training of FOs, as part ofthe project's post-completion operation plan. A framework for groundwater regulation is beingdeveloped under the PPSGD Project.
14. The FOs established under the project are still in their infancy with most of them abouttwo years old. To nurture and develop them in to viable and sustainable entities, the post-completionoperations plan provides for their continued after-care and training.
15. Project Cost, Disbursements, and Implementation Timetable. The Project was completed onthe original Credit closing date of December 31, 1997 at a cost of US$26 million (or 54 percent of theappraisal estimate in US$ terms). The main reasons for the lower cost in US$ terms are (i) depreciationof the Pakistani Rupee; and (ii) the change of the project emphasis from supporting PTWs to CTWsfollowing the MTR. Low farmer demand for institutional credit for tubewells resulted in under-utilization of the portion of the Credit allocated to the Agricultural Development Bank of Pakistan(ADBP). SDR4.5 million were canceled on July 23, 1997, and a further amount of SDR 1.316 millionwas canceled on May 18, 1998, after the last disbursement was made.
16. Key Factors Affecting Achievement of Objectives. The project has achieved its objectiveslargely as a result of the improvements made in design and implementation arrangements made during theMTR. Up to mid-1994 the project performance was adversely affected by various design andimplementation issues, including adverse publicity of the project by STWs operators, who feared thatthey might lose their jobs as a result of the transition; resistance by influential farmers to the closure ofSTWs; delay in recruitment of project implementation assistance consultants and consequent delay inCredit effectiveness; delay in the appointment of impact evaluation consultants, and consequently incarrying out baseline -surveys. The MTR addressed these issues by implementing the EBank's new watersector strategy for Pakistan. It promoted ownership of all stakeholders by incorporating measures forestablishing FOs through a structured social mobilization program, and by introducing the concept ofCTWs. This was perhaps the key factor which turned the project performance around. Other factorswhich contributed to the project success included: enhanced Government commitment to the projectobjectives, following the MTR; good management by implementing agencies; and effective supervisionby IDA.
17. Bank and Borrower Performance. The Bank's performance during project preparation andappraisal was deficient. In hindsight, the original project design had several weaknesses: the projectdesign did not provide for social organization and farmer outreach; the criteria set out for award oftubewell incentives were complex and difficult to implement; the need for institutional credit fortubewells was over-estimated; the issue of SCARP tubewell operators and other staff who were expectedto become redundant as a result of the closure of STWs was not explicitly addressed; and number ofPTWs assumed to be installed without the project were under-estimated. The Bank's performance duringsupervision was, however, innovative and effective. The MTR was conducted in a fully participatorymanner involving all stakeholders, and effectively addressed project design and implementation issues.The MTR proved to be a turning point for the project and its performance improved dramatically.Subsequent supervisions were regular and helped to address implementation issues effectively.
18. Performance of GOP during project preparation was deficient. GOPunjab's andGOSindh's involvement during project preparation was limited to reviewing reports prepared byconsultants. No staff were specificallv charged with the responsibility of quality control. Performance ofGOPulljab and GOSindli during project implemenitation was satisfactory. Thev provided u.Nwaveringsupport to the project objectives bv. izter alia. ensuring timely release of funds; promptly making policydecisions: and maintaining continuity of project directors. The implementing agencies generally compliedwith the project covenants. GOPunjab has, however. not yet fully met the project covenant that requiresrecovery of 30 percent of the cost of watercourse materials from the beneficiaries. Similarly. GOSindh
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has not yet effectively addressed the issue of iequitable distribution of canal water in the project area.This issue is being addressed as part of the institutional reforms recently initiated under the NationalDrainage Program (Cr. 2999-PAK) which include establishment of FOs at the distributary canal level.
19. Project Outcome. The overall outco*e of the project is satisfactory. The economic rate ofreturn (ERR) at completion is 29 percent as compared to 24 percenit estimated at appraisal. The ERR atcompletion is higher than the appraisal estimate because of lower completion cost even though the ICRestimate is based on more conservative estimates of agricultural benefits than assumed at appraisal.
Summary of Findings, Future Operations and Lessons Learned
20. Important findings. Replacement of STWs with CT Ws results in higher economic gains andimproved equity as compared to replacement of STWs with PTWs. This is due to the higher utilizationfactors of CTWs as compared to PTWs. The CTWs benefit small farmers and curb anarchical andinefficient growth of PTWs. They also allow better management of groundwater and are likely tofacilitate groundwater regulation in the long term because of fewer control points and communityinvolvement.
21. Case studies carried out under the project indicate that FOs in the following categorieshave better prospects of achieving equity in water sharing arid sustainability: (a) FOs established throughproper community mobilization by trained social organizers; (b) FOs in which all member farmersconitribute their share of the CTW cost up-front (instead of only the more affluent members bearing thefull cost initially); (c) FOs that consist of members from the same family or caste; and (d) FOs located inareas where the canal supplies are low and there is an active dermand for groundwate .
22. Future Operations. Both Punjab and Sindh have prepared post-completion operation planswhich include programs for monitoring of groundwater and soil, and training of FOs. If implementedeffectively, these plans should provide effective safeguards against possible adverse long term impact ofuse of groundwater on soils and over-exploitation of the aquifer, and promote nurturing of the fledglingFOs established under the project.
22. Key Lessons Learned.
i) GOProvinces should take the lead in the preparac:ion of provincial projects, and shoulddesignate staff to ensure quality control and involve all stakeholders.
ii) A structured social mobilization program and a multi-disciplinary approach to projectimplementation is essential for the success of irrigated agriculture projects.
iii) Farmer training should be an integral part of project design and initiated early in the project.
vi) Consideration should be given to developing micro-credit to help small farmers pay Lip-frontcontributions for CTWs, watercourse improvements. This would reduce their reliance oni themore effluent members of FOs and help them attain a more equitable status withliin theseorganizations.
v) Arrangements for internal and external monitoring and impact evaluation activities should beoperationalized right from the start of the project. and quality of data collection and collation(including establishment of a computerized data base) should be closely supervised.
vi) Continuity of competent and motivated key project staff improves project implementation (Whilethis factor is generally well known, this project provides a good example).
IMPLEMENTATION COMPLETION REPORT
PAKISTAN
SECOND SCARP TRANSITION PROJECT(Cr. 2257-PAK)
PART I - PROJECT IMPLEMENTATION ASSESSMENT
A. ASSESSMENT/EVALUATION OF OBJECTIVES
I. Background. Pakistan's Irrigation system was originally built without provision forsubsurface drainage. With the expansion of the irrigation system the groundwater table rosegradually, and by the 1950s waterlogging and salinity became wide spread in the Indus basin. Tocontrol these "twin menaces", the government embarked upon a series of salinity control andreclamation projects (SCARPs). Over 12,000 deep tubewells were installed to lower the watertable. Besides providing subsurface drainage relief, in fresh groundwater (FGW) areas theSCARP tubewells (STWs) became an important source of supplementary irrigation. While theSCARPs were generally successful in alleviating waterlogging, their performance declined overtime due to poor management and inadequate O&M. Because of low cost recovery, the cost oftheir operation became unsustainable for the Government. The O&M cost of STWs accounted forover 50 percent of the annual irrigation O&1,t budget, while they provided oniv 10 percent of thetotal irriga:ion supplies. Consequently, the irrigation/drainage system deteriorated over time.
2. While the performance of SCARPs declined, their demonstrative effect resultedin a boom of private tubewells (PTWs). Over 400,000 PTWs have been installed to date.Encouraged by the growth of PTWs and their contribution to subsurface drainage, in early 1 980s,the government adopted a policy of discontinuing further public sector investments in SCARPsand of dis-investing the STWs in FGW areas. The government was, however, cautious inimplementing this policy because of three concerns: (i) the political implications of withdrawinga major subsidy to irrigation; (ii) the possible reappearance of waterlogging in SCARP areasfollowing closure of STWs2; and (iii) the impact of closure of STWs on small farmers who cannot afford to install their own tubewells. Because of these concerns, a small pilot project [theSCARP Transition Pilot Project (STPP)] was initiated in 1986 covering 213 STWs in theKhanqah Dogran Unit of SCARP-1, in Punjab, with IDA assistance. The STPP included apackage of incentives for farmers to install PTWs, including construction of an electric grid toprovide free of cost electric hook-ups; a one time cash incentive of Rs 4,000 for installation ofPTWs with diesel prime movers; canal improvements to improve surface water supplies; andremission of double water charges associated with STWs.
3. The pilot project was generally successful in meeting its objectives. Itdemonstrated that (i) it was technically, socially, and politically feasible to close down the highlysubsidized STWs, if appropriate incentives were provided to install PTWs with preference givento small farmers; and (ii) the water table can be maintained at appropriate levels by PTWs, eventhougli farmers pump groundwater primarily to meet irrigation requirements. Ex-post evaluationstudies, however, indicated that there was a high growth of PTWs outside the pilot project area as
2 It was recognized that farmers generally pump for irrigation: drainage is a by-product.
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well. This raised questions whether any government intervention was necessary and whether thegovernment should simply close the STWs and let the private sector replace them with PTWs.This "do nothing" option was, however, discarded, because of three reasons: (i) a possiblepolitical backlash due to withdrawal of subsidy to irrigation without any compensation: (ii)possible adverse impact on small farmers who can not afford to install PTWs on their own3; and(iii) possible adverse impact on agricultural production in case the natural growth of PTWs wereto be slower than the pace of closure of STWs.
4. Project Objectives. The Second SCARP Transition Project was designed broadly withsimilar objectives as the pilot project but with the important difference that it did not provide forinvestnent in the electric grid --the highest cost component of STPP4 . Based on the experiencegained from the pilot, Punjab decided to undertake dis-irivestment of STWs on a large scale.However, Sindh decided to do a pilot project first, because of different land holding patterns andland tenure system and historically lower growth of PTW's in Sindh (as compared to Punjab).The main project objectives were to:
(i) increase agricultural production through improved and timely availability ofsupplementary irrigation on a financially sustainable basis;
(ii) maintain an appropriate groundwater table through private tubewells (PTWs) replacingthe current SCARP tubewells (STWs), which are expensive to maintain and poorlymaintained;
(iii) *test the viability of SCARP Trans tion in Sindh;
(iv) prepare a follow up program for larger scale r-placement of STWs based on theexperience under the project.
5. During the MTR of the project, the above objectives were broadened to include equity ofgroundwater distribution by emphasizing farmer participation and introducing the concept ofcommunity tubewells (CTWs) -- tubewells jointly owned by at least 30 percent of farners in thecommand area of the STWs. The project objectives were to be met by implementing thefollowing project components: (i) replacement of STWs by PTWs/CTWs; (ii) improvement ofabout 500 watercourses in Punjab5, to facilitate inter-farm distribution and sharing of waterpumped by tubewells; (iii) provision of one time financial incentives, and credit to farmers fortubewells: (iv) provision of consultants' services to assist project implementation, hydro-geological and impact evaluation studies, and preparation of future SCARP transition projects:and (v) training of farmers and project staff in various fields.
6. Evaluation of Objectives. The project objectives were clear, realistic and within theimplementation capacity of the executing agencies. The objectives were also directly in line withthe government's sector policies and the Bank's sector assistance strategy for Pakistan whicilhinter culicl supported transferring the responsibility for groundwater management in fresh
3 in this context. physical and social constraints to the development of water market from tubewells. and theweaknesses of credit systems targeted at small farmers were highlighted.
4 i his change retlected tarmer pref-erence Ibr tubewells with diesel engine prime movers and the need toreduce cost.
5 In Sindh. watercourse improvements were supported outside the project through funds provided under theIDA assisted OFWM-111 Project:
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groundwater areas to the private sector, and freeing scarce resources for improved O&M of theirrigation/drainage system.
B. ACHIEVEMENT OF OBJECTIVES
7. The project's physical targets6 have been achieved or exceeded for all the maincomponents, and its objectives have been achieved.
8. Increase in Agricultural Production. This objective has been met. At appraisal. it wasenvisaged that the project would increase agricultural production through: (i) replacement ofSTWs with PTWs that would provide more timely and reliable water supply: and (ii)improvements of watercourse and precision land leveling, that would reduce water losses andincrease irrigation efficiencies. It was assumed that: the project would result in a higher growth ofPTWs: cropping intensities and crop yields will be higher as compared to the without projectsituation; and farms not installing PTWs would have a decline in cropping intensities and cropyields, as STWs became derelict.
9. The project targets for closure of STWs, and their replacement by PTWs andCTWs, watercourse improvement as well as precision land leveling (PLL) have been exceeded(Statistical Table 5). Monitoring and evaluation studies carried out under the project, and datacollected by the ICR mission, through rapid rural appraisals, however, indicate that the growth ofPTWs installed by farmers on their own without project support, remained high in the Punjabproject area during the project implementation period. During FY91/92 to 1997/98 about 12.800PTWs were installed in the project area without project support. The growth of PTWs in theproject area would have been even higher without the project, resulting in over-investment intubewells. The high growth of PTWs would have continued even with the project had the projectnot been restructured at the MTR and switched from supporting PTWs to CTWs. The CTWssuppressed the demand for PTWs. The situation in the Sindh project area is different. Only about250 PTWs were installed by farmers on their own without project support during the 6 years ofproject implementation reflecting the low historical growth due to abundance of canal water inthe head reaches of canals.
10. The overall cropping intensity in the Punjab project area increased from 141percent in 1992/93 (baseline) to 159 percent in 1996/97. Overall yields of major crops increased(wheat by 7.6 percent. rice by 8.6 percent, and sugarcane by 5.4 percent). Given the high naturalgrowth of PTWs (unsupported by the project) part of these benefits would have accrued evenwithout the project7. The ICR, therefore, attributes only the production increases resulting fromwatercourse improvment to the project. It is estimated that watercourse improvements carried outunder the project resulted in about 3 percent increase in cropping intensity as compared to thewithout project scenario. The increases in crop yields have not been attributed to the project.Based on these conservative assumptions the overall incremental crop production attributable tothe project in the Punjab project area is estimated at 23.000 tons for whieat. 80,000 for sugarcane.1 7,000 tons for basmati rice. KIharif fodder 72.000 tons and Rabi fodder 113.000 tons. Theseconservative estimates are less than those assumed at appraisal except for the fodder crops.
6f As modified during the mid-term re% iec% taking into account the chanle forin PTWs to C'l-W\ s and the highnatural growkth of PT'Ws.
7 The monitoring and evaluation studies could not identify appropriate control groups.
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11. In the Sindh project area, the overall cropping intensity increased from 132percent in 1992/93 to 147 percent in 1995/96. Overall yields of major crops (wheat, cotton.sugarcane) increased by 12 to 33 percent. Given the low natural growth of PTWs in the area, it isestimated that without the project the cropping intensities and yields of farms not installingtubewells would have been similar to those of farms relying on canal water only. Based on theICR mission's field observations and data from monitoring studies, the future cropping intensitywith project is estimated to be 5 to 10 percent higher than without project. As for Punjab, no cropyield increases have been attributed to the project. The overall incremental crop productionattributable to the project in the Sindh project area is estimated at: 5,000 tons or for wheat, 15,000tons for sugarcane, 12,000 tons for Kharif fodder, and 25,000 tons for Rabi fodder. These arelower than those assumed at appraisal, except for sugarcane and fodder crops.
12. Maintaining Appropriate Groundwater Table. Barring short term variations causedby unusually high rains in 1996 and 19978, the groundwater table in the Punjab project area isgenerally stable at the pre-transition level (average depth of about 13.5 feet). In the Sindh projectarea, the rising trend in the groundwater table that had developed during 1986 - 1995, due todeterioration and closure of STWs, has been reversed by the growth of project supportedtubewells. During 1995 to 1997 the average depth of water table in the project area increased byabout one foot per year and is currently about 10.5 feet. Only 3 percent of the project area wasreported to have water table depth of 0 to 5 feet in May 1997. (These areas are located nearcanals where there is high recharge and groundwater utilization is low.) Mathematicalgroundwater models have been prepared for both project areas. These models have the capabilityof predicting groundwater levels and quality at different levels of groundwater abstraction andare expected to facilitate groundwate, monitoring and regulation in Lne long term.
13. Fiscal Savings and Electric Power Released due to Closure of STWs. Closure ofSTWs has reduced the recurrent annual fiscal burden of O&M cost of SCARPs by about Rs 70million in Punjab and Rs 50 million in Sindh in nominal teims (1992 Rupees). The annual fiscalsavings are more than twice this amount if the rise in unit O&M costs of STWs and thereplacement costs avoided since the start of the project are taken into account. Thle closure ofSTWs has also released about 60 MW of electric power in Flunjab and 10 MW in Sindh for otheruses in the economy.
14. Future Project Preparation. The implementation experience and the lessons learnedhave generally been incorporated in a larger follow-up project which covers most of theremaining SCARPs in Punjab [The Punjab Private Sector Groundwater Development Project (Cr.2901-PAK)] implementation of which has already started. GOSindh has also prepared plans forlarge-scale transition to be implemented under the National Drainage Program (Cr. 2999-PAK).
15. Institutional Development & Other Achievernents. Besides meeting its statedagricultural, groundwater management, and fiscal objectives, the project also made significantcontribution to sector policies, social/equity aspects of SCARP transition and institutionaldevelopment. For example:
* GOPunjab discontinued subsidy for the installation of individually owned PTWs in canal
X )Due to extraordinarily high rainfall in 1996 and 1997 the xvater table rose in the Punjab project area by aboutI to 4 feet. However. similar trend of water table was observed in other SCARP areas also where STFWs arenot yet dis-invested.
5
commanded areas, and GOSindh introduced a "graduated" subsidy favoring CTWs. This notonly reduced the total cost of the incentives package but also promoted formation of FOs,comprising mainly small farmers;
* In Punjab, more than 2,200 potentially viable FOs have been established. These FOs haveestablished, over 2,200 CTWs, which have benefited about 35,000 farm families. The CTWshave adequately substituted for the STWs -- more than 80 percent of the farmers who used toreceive water from STWs are the direct beneficiaries of CTWs as members of the FOs. Themain beneficiaries of the CTWs are generally small farmers -- over 85 percent of the FOs'members have holdings less than 5 ha.
* In Sindh, about 430 potentially viable FOs have been established. These FOs have installedabout 430 CTWs, which have benefited about 5,000 farm families9. The PTWs and CTWshave adequately substituted for the STWs -- more than 75 percent of the farmers who used toreceive water from STWs are the direct beneficiaries of PTWs or CTWs. The mainbeneficiaries of the PTWs/CTWs are generally small farmers -- over 65 percent of the PTWsowners and FOs' members have holdings less than 5 ha.
* The FOs established at the level of CTWs have the potential to act as nuclei for thedevelopment of larger FOs at the canal command level.
* The project's success in securing stakeholders' participation has helped to promote the cultureof participatory irrigation management among the implementing agencies. The need forsocial organization and community participation is now generally better recognized, andmulti-disciplinary approaches to project preparation and implementation are gradually beingmainstreamed in the development process.
- As part of the project training program 1,480 FOs in Punjab and 200 FOs in Sindh have beentrained in various fields, including book keeping, tubewell maintenance, water management,etc.
16. Agricultural Development Bank's (ADBP's) Performance. The need for tubewellcredit was over estimated at appraisal. Farmers demand for tubewell credits decreased as a resultof: (i) the cash incentives provided for installation of tubewells; and (ii) the change of projectemphasis from PTWs to CTWs following the MTRIO.
17. Project Implementation Assistance Consultants and Service NGOs. Both Punjab andSindh employed consultants to provide project implementation assistance. The composition of theconsultants teams initially recruited had an engineering bias, and primarily provided support foroverall project management assistance, supervision of civil works for watercourse improvement,surveys of STWs, soil surveys, hydrogeological studies, tubewell technology, environmentalstudies, and staff training. At the MTR the composition of the consultants teams was changed.Social organizers and trainers were added to the consultants team and played a key role inmobilizing farmer support. The consultants also sub-contracted local service NGOs to helpestablish FOs. The overall performance of the consultants was satisfactory. The NGOs also
') An additional 2.600 farm families have benefited directly from PTWs. not counting farmers who buv water.I ( Farmers pooled in the resources for CTWs and did not resort to institutional credit. Moreover. ADBP did not
develop any instruments to lend to FOs.
6
played a useful role. However, this was the first experience of the implementing agencies ofworking with NGOs in the irrigated agriculture sector in Pakistan, and it took time for bothparties to adjust to a client and service provider relationship.
18. Project Impact Evaluation Assistance. Punjab employed a consortium of consultants,while Sindh employed a local university outfit to carry out impact evaluation studies. Due todelays in procurement, the evaluation teams of both entities could not be fielded until late 1994,almost three years after project commencement, thus precluding collection of accurate baselinedata. Both entities collected unmanageably large amounts of socioeconomic data, but failed toestablish appropriate computerized data bases. This made collation and analysis of data extremelydifficult. The selection of control samples was inappropriate and did not reflect the changes madein the project during the MTR. Consequently, the ICR mission has had to rely on data collectedthrough rapid rural appraisals to establish the without project scenario.
19. Capital Cost Sharing/Recovery. For watercourse improvements under the project,farmers were to provide all skilled and unskilled labor costs up-front, and 25 percent of the costof construction materials in six installments over three years. The latter was increased to 30percent subsequently, to maintain uniformity with other ongoing watercourse projects. Whilecontribution of skilled and unskilled labor was fully satisfactory, recovery of the installmentsremained low. As of December 31, 1997, actual collections were about 55 percent of the amountsdue.
20. Project Cost and Disbursements. The Project was co.npleted on the original Credit,losing date of December .31, 1997 at a cost of US$26 million (or 54 percent of the appraisalestimate in US$ terms). The main reasons for the lower cost: in US$ terms are: (i) depreciation ofthe Pakistani Rupee; and (ii) reduction in the tubewells targets during the MTR resulting from theswitch over from supporting PTWs to CTWs. The latter factor also resulted in under-utilizationof the portion of the IDA Credit allocated to the Agricultural Development Bank of Pakistan(ADBP). SDR4.5 million were canceled on July 23, 1997, and a further amount of SDR 1.316million was canceled on May 18, 1998 after the last disbursement was made.
21. Economic Rate of Return (ERR). The ERR at comrpletion is estimated to be 33 percentfor Punjab. 23 percent for Sindh, and 29 percent for the overall project. These ERRs are higherthan the appraisal estimates (24 percent for Punjab, 20 percent for Sindh and 24 percent for theoverall project) even though they are based on more conservative estimates of agriculturalbenefits than assumed at appraisal. The ERR at completion is higher because of the substantiallylower cost of completion and higher efficiency of CTWs as compared to PTWs (see Appendix C.Tables 3& 4).
C. MAJOR FACTORS AFFECTING THE PROJECT
22. Implementation Record. Until mid-1994* when the project was restructured during theMTR and its performance turned around, the overall project implementation performanceremained poor due to various factors, including inappropriate tubewell incentives policy, lack ofarrangements for social mobilization; engineering bias of the implementation assistanceconsultanits: adverse publicity of the project by STWs operators, for whom the project did notiiclude a re-deployment plan; and resistance by influential farmers to the closure of STWs.Overall progress was slow and there were apprehensions that: the adopted mode of transition(replacing STWs with individually owned PTWs) was inecluitable for small farmers; the project
7
may be supporting over-investment in PTWs that have low utilization factors; and its economicalviability may be questionable, given the high growth of PTWs without project assistance.
Factors Not Generally Subject to Government or Implementing Agency Control
23. Adverse publicity of the project by STWs operators who feared that they wouldbe rendered jobless by the transition, and resistance by influential farmers to the closure of STWscontributed to overall poor implementation performance. Another factor which affected projectperformance was the general law and order situation in Sindh sub-project area which preventedfree movement of staff and consultants to some of the remote areas during the early 1990s. Thesituation, however, improved gradually.
Factors Generally Subject to Government Control
24. Project start-up was delayed by almost one year due to delay in recruitment ofproject implementation assistance consultants, which in tum delayed Credit effectiveness byabout nine months. There was also a long delav in the appointment of impact evaluation andconsequently in carrying out baseline surveys. Another factor which caused cash flow problemswas the unnecessary routing of the counter-part GOP funds for the project through WAPDA.WAPDA charged "overheads" for "simply funneling money", invariably with delay. Long andcomplex criteria and procedures for approval and disbursements of incentives for installingtubewelis also contributed to the slow progress. Finally, farmers and FOs faced difficulties inobtaining evidence of land titles that were required for qualifying for award of project incenti% esfrom the Land Revenue Offices.
Factors Generally Subject to Implementing Agency Control
26. ADBP staff did not fully integrate their activities with the other projectcomponents. The mobile credit officers did not maintain close coordination with the ProjectManagement Cells (PMCs) and consultants. ADBP did not develop a mechanism for lending toFOs. As a consequence, overall progress lagged behind targets and some loans intended for theproject farmers were in fact sanctioned to farmers outside the project area. Finally, overall loanrecoveries achieved so far are only 45 percent of the amounts due. The PMCs were slow inretrieval of STWs machinery. In some cases, delays in freeing up the STWS bore-holes delayedinstallation of CTWs. Despite low cost recoveries, the Directorate General of WaterManagement, Punjab resisted suggestions bv IDA missions to switch from the system ofcollecting installments to up-front contribution, on the grounds that this change would adverselyaffect implementation progress. This position was driven by the inertia of project staff who foundthe existing system easier than having to convince farmers to contribute to capital cost up-front.Recently, GOPunjab has decided to collect the back-log of cost recoverv as arrears of landrevenue. The results of the new system. however, remain to be seen.
Factors which Turned Around Project Performance
27. To address project design and implementation issues the following adjustmentswere made in the project policies and implementation approach during the MTR: (i) the conceptof CTWsIl Xvas introduced and supported by a structured program of social organization
II Tubewells jointlv owned by a minimum ot 3() percent ol the farmers in STFWs command area.
8
developed after testing alternative approaches; (ii) in Punjab, cash incentives were discontinuedfor individually owned PTWs, and in Sindh, a graduated subsidy favoring installation of CTWswas introduced; (iii) incentives approval criteria and disbursement procedures were simplifiedand made more clear; (iv) the composition of the consultants team was made mutli-disciplinaryand their offices were shifted to the project area; (v) a structured program was initiated topublicize the project's objectives and the concept of CTWs; (vi) the project targets for tubewellswere adjusted taking into account the natural growth of non-project supported tubewells, and thechange from individually owned PTWs to CTWs; and (vii) the government agreed on a programfor re-deploying STWs operators.
28. The project's performance turned aroland after the MTR. Enthusiasticparticipation of the farmers coupled with good management by the implementing agencies,contributed to the timely completion and achievement of its objectives, despite earlierimplementation delays. The implementing agencies and farmers fully owned and supported theintroduction of participatory approach to project implementation. Overall progress improved; thechange from PTWs to CTWs helped to spread the project incentives and benefits moreequitablyl2 and made monitoring of groundwater abstraction more manageable; introduction ofsocial organizers helped to establish grassroots level FOs; the government's fiscal burden oftubewell incentives was substantially reduced; and the economic viability of the project improvedsubstantially. The economic rate of return of the restructured project is estimated at 29 percent ascompared to 24 percent at appraisal (see Appendix C).
D. PROJECT SUSTAINAtBILITY
29. The benefits of project investments in tubewells and watercourse improvementsare likely to be sustained. There are over 400,000 PTWs, in Pakistan, installed, operated andmaintained by farners. The large majority of these are shallow tubewells with locally madecentrifugal pumps and diesel fuel based prime movers (Peter Engines which became popularduring the late 1980s). Although pump efficiencies are low and routine and preventivemaintenance is often inadequate, farmers in Punjab are well familiar with this technology andrepair/maintenance and drilling facilities are locally available. In Sindh also farmers arebecoming familiar with tubewell technology. Private tubewell development in the project area hasbeen accompanied by growth of tubewell drilling facilities and maintenance workshops.Similarly, although water user associations (WUAs) t:end to become inactive after thewatercourse has been improved, farmers continue to maintain watercourses through traditionalinformal arrangements. This problem is being addressed by establishing canal level FOs.
30. Monitoring studies, including remote sensiing, carried out under the project havenot reported any adverse trends in soil and groundwater quality. However, the use ofgroundwater for intensive agriculture could lead to accumulation of salts in the soil and adverselyaffect productivity in the long term, unless appropriate soil and water management practices areintroduced. Major increases in groundwater abstraction froim the FGW13 areas could also lead to
12 On average a CTWs has 16 members in Punjab and 12 in Sindh.13 Preliminarn runs of the groundwater model. developed under this project tor Sindh. indicate that: a)
groundwater pumpage from strata deeper than about 130 tfeet would result in deterioration of water qualitv:h) pumpage from the of SGW STWs that are currently non-functional. would result in deterioration of wvaterquality in certain areas in the medium term: and c) increased pumpage from PTWs/CTWs would result indeterioration of water quality in certain areas. For Pun jab the model predicts that a substantial increase in
9
deterioration of the groundwater quality due to intrusion of saline water from adjoining salinepockets of saline groundwater (SGW). Continued inequitable distribution of canal water suppliesin the Sindh project area could also exacerbate this problem' 4.
31. The FOs established under the project are still in their infancy with most of themabout two years old. While most of the FOs are reported to be functioning satisfactorily, manyare reported to have social and organizational problems. Case studies carried out by the impactevaluation consultants indicate that generally FOs are following traditional methods formaintaining records of tubewell operations and accounts, and few are following democraticprocesses in making decisions of common interest. In some FOs the executive members(presidents and secretaries) tend to dominate and monopolize the tubewell. This is particularlyevident in those FOs where the tubewell is located on the land of one of the executive members,and where all the members initially did not contribute their share of the cost of the tubewell. Evenif some of the FOs do not function the investment in CTWs would not be lost completely as theyare likely to continue operating as PTWs. Nonetheless, there is a clear need to continue theongoing after-care and training program for FOs to help ensure their sustainability. The Post-completion Operations Plan provides for the following remedial/mitigation measures (see Annex1):
* physical and environmental monitoring being carried out as part of the hydrogeologicalstudies will continue after project implementation completion. The Punjab project area is alsoa candidate for intensive monitoring that is expected to be carried out under the PunjabPrivate Sector Groundwater Development (PGD) a, the first phase in the development of agroundwater reguiatory framework for Punjab; sinilar activities will be implemented inSindh under the National Drainage Program.
* the ongoing "after-care" and training program for FOs, which includes messages on soil andwater management, will continue after implementation completion;
* as part of the Drainage Plans prepared under the project: (a) STWs and surface drainagefacilities in the saline groundwater (SGW) areas are proposed to be rehabilitated or replacedwith tile drainage facilities; (b) proper outfalls will be provided to evacuate the salineeffluent from the project area in an environmentally safe manner; and (c) inequities in canalwater supplies in the Sindh project area will be addressed by FOs to be established at thecanal level under the NDP Project.
E. BANK PERFORMANCE
32. The Bank's performance during project preparation and appraisal was deficient.In hindsight there were several weaknesses in project design. While the lessons learned from theSCARP Transition Pilot Project were incorporated in the project design, no provision was madefor social organization and farmer outreach (a common deficiency in "older generation" projects).
abstraction (over 15 percent) would lead to the water table declining over 20-25 feet in some areas but waterqualitv is not expected to deteriorate.
14 1 lead reaches oi canals draw more than their share. which results in higher recharge of groundwater and low
demand for groundwater water leading to low utilization of tubewells. Conversely. the tail reaches do notreceive their due share. which results in lower recharge in areas where there is a higher demand forgroundwater.
10
Similarly. while the criteria set out for award of project incentives were designed to promoteequity by giving preference to water user associations, farmer groups and small farmers, initialimplementation experience indicated that these criteria were complex and difficult to implement.The need for tubewell credit was over-estimated. Another weak area was that the project did notaddress the issue of SCARP tubewell operators and other staff who were expected to becomeredundant as a result of the closure of STWs. Finally, the assumptions made in the economicanalysis about the incremental agricultural production due to the project were optimistic. Theassumption of low growth of PTWs without the project did not materialize.
33. The Bank's performance during supervision was innovative and effective. TheMTR was conducted in a fully participatory manner involvin,g all stakeholders, and its timing wasarranged to coincide with the pre-appraisal mission for the Punjab Private Sector GroundwaterDevelopment Project. In line with the Bank's new strategy for the water sector developed in theearly 1990s, the MTR promoted ownership of all stakeholders; supported formation of effectiveFOs by evaluating various models for social mobilization; introduced the concept of jointlyowned CTWs; and addressed equity aspects of transition. The MTR proved to be a turning pointfor the project and its performance improved dramatically. Subsequent supervisions were regularand helped to address implementation issues effectively. The only weak area was that supervisionmissions failed to improve the quality of the impact evaluation studies.
F. BORROWER PERFORMANCE
34. Performance of GOP during project preparation was deficient. Surveys carriedout during project iruiplementation indicate that tne reasibility report for the projeci may haveunder estimated the number of existing private tubewells in the project area, suggesting thatsupervision of project preparation was deficient. GOPunjab's and GOSindh's involvement duringproject preparation was limited to reviewing reports prepared by consultants. No staff werespecifically charged with the responsibility of quality controlling during project preparation.
35. Performance of GOPunjab and GOSindh during project implementation wassatisfactory. They provided full commitment and unwavering support to the project objectives by,inter alia. ensuring timely release of funds; promptly approving the innovative changes suggestedduring the MTR; discontinuing subsidy for individually owned PTWs (in Punjab); introducing agraduated subsidy (in Sindh) and adjusting the incentives package; and maintaining continuity ofproject directors.
36. However. GOPunjab has not yet fully met the project covenant that requiresrecovery of 30 percent of the cost of watercourse materials from the beneficiaries. Only 55percent of the amounts due had been collected as of December 3 1, 1997. GOPunjab has recentlydecided to collect the back-log of cost recovery as arrears of land revenue. The results of the newsystem. however, remain to be seen. Similarly, GOSindh could not effectively address the issueof iiequitable distribution of canal water in the project area. This issue is now being addressedunder the National Drainage Program by establishing FOs at the canal level.
37. GOP's role during the implementation of the project was Imnited to allocation andrelease of federal funds through WAPDA. Because of various reasons. release of funds bvWAPDA \r.as otten delayed. Thanks to the timely release ot funds bv GOPunjab and GOSildhthe project did not suffer serious cash flow problems.
11
G. ASSESSMENT OF OUTCOME
38. The overall outcome of the project is satisfactory. The physical targets of allmajor components have been met or exceeded, and major objectives have been met. At appraisal,ERRs were estimated at 24 percent for the Punjab subproject, 20 percent for the Sindh subprojectand 24 percent for the overall project. At completion, the ERRs are estimated to be 33 percentfor Punjab, 23 percent for Sindh, and 29 percent for the overall project. Due to lower completioncost, and higher efficiency of CTWs as compared to PTWs the economic rate of return atcompletion is higher than at appraisal even though the ICR has used more conservative estimatesof agricultural benefits.
H. FUTURE OPERATION
39. The borrower, with inputs from IDA, has prepared Post Completion OperationPlans (PCOPs) for the project. FOs and individuals farmers will be responsible for the operationand maintenance of watercourses improved and the tubewells installed under the project.However, the Government will continue physical and environmental monitoring in the projectarea after implementation completion. It will also continue the FO after-care & training programfor a period of about two years to help ensure the sustainability of the FOs ( Appendix B).
I. KEY LESSONS LEARNED
40. Key lessons learned from the project which are relevant for future operations are:
i) GOProvinces should take the lead in the preparation of provincial projects, and shoulddesignate staff for ensuring quality control and involvement of all stakeholders.
ii) A structured social mobilization program and a multi-disciplinary approach to projectimplementation is essential for the success of irrigated agriculture projects.
iii) Farmer Training should be an integral part of project design and should be initiated earlyin the project. The quality of social organization to a large extent determines the qualityof FOs.
iv) Appropriate steps should be taken to remove difficulties which farmers face in obtainingevidence of land titles (This issue is being addressed under the proposed AgricultureSector Investment Project).
v) Consideration should be given to developing micro-credit to help small farmers pay up-front contributions for CTWs and watercourse improvements. This would reduce theirreliance on the more effluent members of FOs and help them attain a more equitablestatus within these organizations.
vi) Arrangements for internal and external monitoring and impact evaluation activitiesshould be operationalized right from the start of the project, and quality of data collectionand collation (including establishment of a computerized data base) should be closelysupervised.
vii) Federal budgetary allocations for provincial projects should be released directly to theprovince:
viii) Continuity of competent and motivated key project staff improves projectimplementation (While this factor is generallv well klnown, this project provides a goodexample).
12
IMPLEMENTATION COMPLETION REPORT
PAKISTAN
SECOND SCARP TRANSITION PROJECT(Cr. 2257-PAK)
Part II - Statistical Tables
13
Table 1: Summary of Assessments
A. Achievement of Objectives Substantial Partial Negligibl Not applicable
Macro Policies 0
Sector Policies 0
Financial Objectives 0
Institutional Development 0
Physical Objectives 0
Poverty Reduction 0
Gender Issues 0
Other Social Objectives 0
Environmental Objectives 0l
Public Sector Management 0
Private Sector Development 0
Other (specify)
B. Project Sustainability Likely Unlikely Uncertain
HighlyC. Bank Performance satisfactory Satisfactory Deficient
Proceedings OperationsI 1. Khairpur Tile Drainage Tile drainage and irrigation 1976 PCR No. 7806, June
and Irrigated Farming development. Pilot project of 1989Development Project 14,600 ha of tile drainage.(Cr. 648-PAK)
12. Salinity Control and Control of Salinity and 1977 PCR NO. 12889. MarReclamation Project waterlogging. Use of 1997(SCARP) VI [Cr. 877- evaporation ponds for salinePAK) effluent disposal.
3. Salinity Control and To increase agricultural 1979 PCR No. 12890, MarReclamation Project production through drainage 1994(SCARP) Mardan [Cr. of waterlogged lands and877-PAK) reclaim marginally
productive and/or abandonedland, along with increasingon-farm water managementefficiencv.
4. On-:8arm Water To increase agricultural 1981 PCR NO. 7309, Jun 1988Management (OFWM) production by improvedProject (Cr. 1163-PAK) management of water saved
through watercourserenovation and cleaning andrelated measures in the fourprovinces.
5. Irrigation systems To increase agricultural 1982 PCR No. 8794. JuneRehabilitation Project production by improved 1990(Cr. 1239-PAK) reliability and distribution of
water supplies, reduce croplosses from rain flooding,and strengthen PIDs O&Mcapability.
6. Balochistan Minor To improve Balochistan's 1982 PCR NO. 13494. SepIrrigation and minor irrigation. 1994agricultureDevelopment Project(Cr. 1243-PAK)
15
7. Fourth Drainage To alleviate surface flooding 1983 PCR No. 14558. JuneProject (Cr. 1375-PAK) and facilitate field drainage. 1996
8. Command Water To increase agricultural 1984 PCR NO. 13428. AugManagement Project production through improved 1994(Cr. 1487-PAK) water management, along
with supplying agriculturalservices and non-waterinputs in seven subprojectareas totaling 510,000 aclocated in all four provinces.
9. Left Bank Outfall To provide an ultimate outlet 1984 December 1997. ICRDrain - Stage I Project to the sea for drainage under preparation(Cr. 1532-PAK) effluent from irrigated areas
of the Lower Indus Basin.10. Second On-Farm Water To consolidate gains 1985 PCR NO. 11875. May
Management Project achieved under Cr. 1163- 1993(Cr. 1603-PAK) PAK and improve OFWM
programs in the fourprovinces to enable them torealize their potential.
11. SCARP Transition Testi ag transfer modes of 1986 PCR No. 11992. Jun 1993Pilot Project (Cr. 1693- public tubewell operation inPAK) fresh groundwater areas to
private ownership andoperation.
12. Agriculture Sector To promote competitive 1988 PCR NO. 11225, OctAdjustment Loan agriculture and enhance 1992(Ln.2986-Pak) sustainable productivity and
growth.13. Private Tubewell To test viability of an 1989 ICR No. 15440. March
Development (Cr. integrated private tubewell 19952004-PAK) development program for
increased agriculturalproduction in freshgroundwater areas.
14. Third On-Farm Water To increase agricultural 1991 ICR No. 16334. June 1997Management Project production bv effective use(Ln. 3327-PAK. Cr. of water saved through2245-PAK) renovation of watercourses
and related measures inirrigated as well as baraniareas of the four provinces.FATA and FANA.
16
Following Operations1. Fordwah Eastern To increase agricultural 1992 On-going, Closing date
Sadiqia Irrigation and productivity and income by June 1999Drainage Project (Cr. improving reliability of water241 0-PAK) supplies and surface drainage
and reduce the need forsubsurface drainage.
2. Balochistan Develop efficient sustainable 1995 On-going, Closing dateCommunity Irrigation minor irrigation. June 2001and Agriculture Project(Cr. 2780-PAK)
3. Punjab Private Sector To increase the scope and 1996 On-going, Closing dateGroundwater productivity of Punjab's December 31. 2001Development Project irrigation and drainage sub-(Cr. 2901 -PAK) sectors and increase farmers'
incomes.4. National Drainage Rehabilitation of Canals left 1997 Ongoing, Closing date
Program (Cr. 2999- over from ISRP-II. December 2004PAK)
Table 3: Project Timetable
Steps in Project Cycle Date Plianned | Date Actual
Identification / Preparation January 1990
Appraisal June 28, 1990
Board Presentation June 4, 1991
Signing July 31. 1991
Effectiveness October 31, 1991 April 30. 1992
Midterm Review December 1993 July 1994
Amendment of DCA October 21. 1996
Project Completion December 31. 1997 December 3 1. 1997
Credit Closing December 31. 1997 December 31. 1997Note: The identification/preparation activities were undertaken as palt of supervision activities for
ongoing projects at that time.
17
Table 4: Credit Disbursements: Cumulative, Estimated and Actual(US$ Million)
4. Reduction in O&M Expenditure Expenditure for Fiscal Yearof STWs (M Rs.)
92/93 93194 94/95 95/96 96/97
(a) Actual Expenditure/Allocation 71.4 51.4 42.4 34.9 23.5
(b) Reduction compared with - 19.9 9.1 7.4 11.5previous year
(c) Accumulated reduction I19.9 29.0 36.4 48
(C) Reduction in Electric Load due to 1992 1993 1994 1995 1996 1997closure of STWs
a) STWs in operation (Nos) 533 457 381 241 123 123
a/
b) Actual load (MWs) 10.7 9.1 7.6 4.8 2.5 2.5
c) reduction compared with - 1.6 1.5 2.8 2.3previous year (MWs)
d) Accum. Reduction (MWs) 1.6 3.1 5.9 8.2 8.2
22
(D) Physical Progress
Sr. Activity Projecit Achievement Up toNo. Target December 31, 1997
Extent % ofTarget
I. Closure of STWs (Nos) 382 382 100
2. PTWs Installed on Joint /Individual basis 1312 1363 104(Nos)
3. CTWs Installed on Community Basis (Nos) 477 428 90
4. Overall Installation of PTW/CTWs 1789 1791 100
5. Training of COs/FOs Ongoing Activity
6. After Care Visits of COs/FOs Ongoing Activity
7. Improvement of Watercourses (Nos) b/ 100 jj62 62
8. Hydrological Studies Monitoring of 100various components c/
b/ Improved under the OFWM-Ill Projectc/ Depth of water table; Quality of Groundwater; mathematical Modelling; Soil Investigation; Satellite Imagery,etc.
(E) Project ImpactSr. Indicator Position as of RemarksNo. Dec.31. 1997
3. Annual Utilisation Factor for (1988-89)Diesel Operated PTWs (%) Feasibility 15 to 20
16.6
23
Sr. Indicator Pre- Position RemarksNo. Project as of
1992-93 12/31/97
4. Performance of FOs (%) c/ Not applicable (NA)A) Satisfactory to Progressive 15B) Satisfactory 73C) with some problems 12
5. Equity of Access to Groundwater(CTWs/PTWs beneficiaries as a NA 75percentage of farmers who were gettingSTWs water)
6. Surface Soil salinity 1988-89 1994-95(percentage of Project Area) Feasibilityi) Non-saline 76 %16 NAii) Saline 24 % NA
I I ERR 20% a/ 23% b/aI SAR estimateb/ ICR estimatec/ As classified by PIA zonsultantsSource: PMC. Supervisory Consultants. and Impact Evaluation Consultants: (Impact intormation furnished by ProjectImpact Evaluation Consultant's U/S SDSC)
24
Table 6: Key Indicators for Project Operation
I. Key operating indicators in NoneSAR/Presidents Report
II. Retrofitted indicatorsA.. Monitoring of Groundwater * monitor water table, water quality, and soil salinity, etc.
table and Quality, * continue operation and calibration of the hydrogeologicalapplication and use of modelGroundwater Model, and * continue the impact surveys (Rabbi/Kharif) by monitoring keyimpact evaluation surveys crop yields, cropping intensities, etc.
C. Training and after-care of Training of farmers and FOs in:FOs
* book keeping* good agronomic practices to increase productivity* soil/water management practices,* Tubewell O&M* identification of local activists, to help resolve intra-FO
disputes and assistance to FOs in transferring the CTW landtitles
* provide iegal cover to FOs, by helping them to register underthe PIDA Acts.
* involvement of FOs in cleveloping framework for groundwaterregulation.
D. O&M of Improved Monitoring of FOs' performance in O&M of the watercoursesWatercourse improved under the project
25
Table 7: Studies Included in Project
Sr. Study STATUS Purpose as defined at Impact of StudyI Appraisal/Redefined
I Monitoring and Completed Monitor project impact on agricultural Because of difficulties infImpact production, small farmers, groundwater identifying appropriate controlEvaluation Study table and quality, budgetary burden of group and failure to set up an
O&M of STWs, sustainability of appropriate computerized datagroundwater use; appropriateness of base, the full benefit of theproject's incentives package, effectiveness studies could not be realized.of credit delivery to small farmers; assess Useful feed back was however,sustainability of FOs; and draw lessons for provided by case studies on FOs.future operations.
2 Environmental Completed Evaluate environmental impact of activitiesImpact conducted under the project.Assessment
3 Hydrogeologi- Completed To monitor changes in groundwater regime Very useful in generatingcal, soil studies as a request of transition, monitor soil extension messages for use inand remote quality and suggest remedial measures for farmer training and after-care.sensing. any adverse trends. The groundwater model
developed can be used tosimulate the existingGroundwater conditions andfuture behavior of the aquifer. Itcan be adapted for other areas
B. Economic Benefits ERR (percent) Appraisal Estimate ERR (percent) ICR Estimatea. Punjab sub project-- Original Project design (STWs 24 23replaced with PTWs)-- Restructured project as NA 33completed (STWs replaced withPTWs and CTWs)b. Sindhi sub-project-- Original Project design (STWs 20 21replaced with PTWs)-- Restructured project as NA 23completed (STWs replacedwith PTWs and CTWs)c. Overall Project 24 29Assumptions SAR ICRProject Life (Years) 20 20Incremental Cropping Intensity Punjab 6 Punjab 3(percent) Sindh 9 Sindh 5-10Incremental crop yields Punjab 9 to 12 Nil(percent) Sindh 7 to 10 Nil
C. Financial Impact Appraisal Estimates ICRReduction in O&M of STWs (Rs) Punjab 134 M, Sindh 34 M Punjab 70 M, Sindh 48 MExpenditure on TW incentives Punjab 224 M, Sindh 29 M Punjab 150 M, Sindh 35 M
28
Table 10: Status of Legal Covenants
Agreement Section Covenant Present Original Revised Description of covenant Commentstype status fulfillment fulfillment
.___________ __________ __________ ________ date dateADBP Sch.on 05 C ADBP to post statf in project area and OKProject Imp- facilitate provision of Agriculture Passbooks.Agreement lementation
Program2.06 12 C 12131/1993 ADBP to Jointly review with IDA. appraisal OK
mnd lending standards under the project.DCA 3.01 (a)(ii) 05 C 04/30/1992 GOProvinces to enter into agreements with OK
'WAPDA to reserve the power released bySCARP tubewells for PTWs.
3.02 05,09 CD 04/30/1992 GOProvinces to recruit consultants for OKproject implementation and impactevaluation.
3.04(a) 09 CD 12/31/1993 06/30/1994 GOProvinces and ADBP to carry out a Mid- MTR wasTerm Review (MTR). carried out in
July 1994.3.04(b) 09 CD 12/31/1992 GOProvinces to submit TOR for MTR. TOR
submitted in.________ ._________ ________ ___________ M ay 1994.
4.01(b) 01 C 03/31/1993 Maintain financial records and fumish audit OKl eports
Project 3.02 10 C 07/31/1991 GOProvinces to offer incentives for PTW PunjabAgreement development and thereafter review annually increased to
watercourses to be improved.3.04 Ii CP GOProvinces to allocate adequate funds to OK For
O&M of saline STWs. FY97/98 for,Punjab'sSindh's shortof the
.______________________________________ requirements.3.05 10 C GOProvinces to give priority to improving OK.
surface water supplies in areas where STWsare main source of ifrigation.
Sch. 112(c) 05 C 12/31/1993 G3OProvinces to prepare training program OK. Aprogram fortraining FOalso
L____________ implemented.Sch.IIA(5) 05 C GOProvinces to maintain project Ok.
coordination & policy committees.3.06 02 CP Punjab to recover 30% of cost of watercourse Some
materials according to agreed schedule. improvementbut about Rs8 million ofremain to berecovered.
Covenant Type 1- - Accounts/Audit: 2 - Financial performance: 3 - Flow and Utilization ot' project funds: 4 - Counterpart funding: 5 -Management aspects of the project: 6 - Environmental covenants: 7 - Involuntary resettlement: 8 - Indigenous people: 9 - Monitoring. review andreporting: I0 - Implementation: I I - Resource allocation: 12 - Regulatory/institutional acti,on: and 13 - Other
Status: C - Complied with: CD - Compliance after Delay: NC - Not Complied with: SOON - (Compliance Expected in Rcasonahly Short Time:('I' - Complied with Partially: NYD - Not Yet Due
29
Table 11: Compliance with Operational Manual Statements
Statement number and title I Describe and comment on lack of complianceNo deviations from applicable operational manual statements were noted. J
Table 12: Bank Resources: Staff Inputs (As of May 15, 1998)
Planned Revised Actual 1/Stage of Staff (000)
project cycle Weeks US$ Weeks US$ Weeks US$Preparation to appraisal NA NA NA NA 33.1 120.7Appraisal NA NA NA NA 83.9 197.5Negotiations to Board NA NA NA NA 9.1 24.8Supervision NA NA NA NA 106.2 167.8Completion 23.5 46.6 26.6 37.7 3.2 10.2Total NA NA NA NA 235.5 521.0
1/ As of May 22, 1998
30
Table 13: Bank Resources: Missions
Performance rating _
Stage of project Month/ Number Days in Specialized Imple- Develop- Type ofcycle year of persons field staff slcills mentation ment problem
status objectiveThrough appraisal June 1990 4 20 EC, IE,FA - -
Appraisal throughBoard approvalSupervision Sep 1992 4 13 IE,EC, DA, 2 1 M, F
OAApr 1993 1 13 IE 2 1 F
Oct 1993 2 17 IE,Agr 2 1 F. FC
Jul 1994 2 18 IE,SO S S M. FC
Nov 1994 1 10 IE S S M. FC
Jul 1995 5 12 IE,SO,EC S S FC
Feb 1996 2 14 lE,SO S S FC
Oct 1996 3 18 IE,PA.DA S S FC
May 1997 5 19 IE,PA,DA,A S S FC, M&E(GR
Completion Nov 1997 7 18 IE,CO,EC, S S FC, M&EDA, AGR.
PA., ESI/ Staff Specialization:IE: Irrigation Engineer. CO: Consultant, EC: Economist, AGR: Agronomist EC: Economist; OA: OperationsAssistant, DA: Disbursement Analyst, PA: Procurement Analyst, SO: Sociologist, ES: Environment Specialist. FA:Financial Analyst2/ Performance ratings based on Bank Implementation summary Form 5903/ Type of problems: T: Technical; M: Managerial, F: Financial, M&E: Monitoring and evaluation. FC: FinancialCovenants
1.1 An IDA mission comprising Usman Qamar, A. Z. Durrani, Akmal Siddiq, A. lqbal, RiazMahmood, and Sardar Riaz Khan visited Punjab from October 27to November 6, 1997 to carry out thefinal supervision and initiate preparation of the implementation completion report for this project. Themain objectives of the mission were to: (i) review overall progress and agree on measures for timelycompletion and fulfillment of project objectives; (ii) review outputs of impact evaluation studies, andupdate key performance indicators: and (iii) initiate preparation of the project's implementationcompletion report (ICR).
1.2 The mission discussed the project objectives, implementation experience, outcome,lessons learned, and the post-completion operation plan (Annex 1) with officials of the Irrigation,Finance, and Planning and Development Department, and the Directorate General of Water Management(DGWM). The mission spent three days in the field and discussed aspects relating to the project'soutcome and its impact with Farmer Organizations and individual farmers. The mission also providedguidance to the implementing agencies for the preparation of the borrowers evaluation report on theproject (Annex 2). Finally, the mission agreed with the Project Director (PD PMC), the Director GeneralWater Management, and the project implementation assistance (PIA) consultants on various.actionsrequired to be completed before December 31, 1997, the Credit closing date. A partial list of persons metis given in Annex 4. The mission is grateful and wishes to thank all the officials. consultants, and FOsmet for their cooperation, courtesies, and hospitality.
1.3 A draft aide-memoire. summarizing the views of the mission, the borrower, theimplementing agencies was discussed at a wrap-up held in the Planning and Development (P&D)Department on November 6, 1997. This aide-memoire incorporates the main pints made during thewrap-up meeting. It is organized as follows:
Section I : IntroductionSection 11 : The Project Objectives and Main ComponientsSection III: Mission FindingsSection IV : Next Steps and ICR TimetableSection V Supervision Aspects: Actions RequiredAnnex I : Post-Completion Operation PlanAnnex ' : (uidance for Preparation of Borros~er's Evaluation ReportAnnex 3 Performance lndicatorsAnnex 4 : List of Persons Met
32
1.4 The mission's views presented here are subject to confirmation by IDA management.
II. THE PROJECT
2.1 Project Preparation. The project was prepared by the lMinistry of Water and Power usingproject preparation funds provided under the Second Irrigation System Rehabilitation Project (Cr. 1888-PAK).
Project Objectives
2.2 The main objectives of the project were to: (i) increase agricultural production throughimproved and timely availability of supplementary irrigation on a financially sustainable basis; (ii)maintain an appropriate groundwater table through private tubewells (PTWs), replacing the currentSCARP tubewells (STWs), which are expensive to maintain ancd poorly maintained; (iii) test the viabilityof SCARP Transition in Sindh; and (iv) prepare a follow up pro,gram for larger scale replacement ofSTWs based on the experience under the project.
2.3 Project Components. The project covers 0.45 m ha in' the SCARP-I area in Punjab. The maincomponents were: (i) replacement of about 1,346 STWs by PTWhs; (ii) improvement of about 500watercourses, to facilitate inter-farm distribution and sharing of water pumped by PTWs; (iii) provisionof one time financial incentives, and credit to farmers for PTWs; (iv) provision of consultants' services toassist project implementation, hydro-geological and impact evaluation studies, and preparation of futureSCARP transition projects; and (v) training of farmers and project staff in various fields.
2.4 Project Cost and Financing. The project cost including physical and price contingencies wasestimated at US$39.7 million, including a foreign exchange component of US$18.8 million. The projectwas to be financed by an IDA Credit of SDR14.8 million (US$20 million equivalent, with approximatelyUS$16.2 million for Punjab). GOP/GOPunjab were to contribute US$10.99 million and farmers US$12.5million equivalent. The IDA Credit was signed on July 31, 199 1, became effective on April 30, 1992 andis due to close on December 31, 1997.
III. MISSION FINDINGS
3.1 Evaluation of Objectives. The project objectives were clear and realistic being similar to thoseof the SCARP Transition Pilot Project (Cr. 1639-PAK), which was successfully completed on June 30,1992. The Pilot project had demonstrated that (i) it was technically, socially, and politically feasible toclose down the highly subsidized STWs if appropriate incentives were provided to install PTWs andpreference given to small farmers; and (ii) the water table can be maintained at appropriate levels byPTWs even though farmers pump groundwater primarily to meet irrigation requirements. The SecondSCARP Transition project's objectives were directly in line with the Government's sector policies and theBank's sector assistance strategy for Pakistan which, inter alia aimed at transferring the responsibility forgroundwater management in fresh groundwater areas to the private sector and freeing scarce resourcesfor improved operation and maintenance (O&M) of the irrigation drainage system. Theirrigation/drainage system had deteriorated over time due to various reasons. including inadequateavailability of O&M funds, a disproportionately high share (about 50 percent) of which wvas being pre-empted by the STWs. whiich provided less than 10 percent of the irrigation supplies.
3.2 Several covenants were included to support the project objectives. These included:periodic review of the adequacy of the project's incentives package. carrying out of hydrogeological andenvironimental monitoring studies, including preparation of a groundwater model and a drainage plan for
33
the SGW areas; and provision of adequate funding for the O&M of STWs and surface drainage facilitiesin saline groundwater (SGW) areas.
Implementation Experience and Results
3.3 Achievement of Objectives. The project's physical targets, as modified during the mid-termreview (MTR), have been achieved or exceeded for all the main components, and its objectives have beensubstantially achieved. About 1,478 STWs in the fresh and marginal groundwater areas have been closedand replaced by PTWs and community tubewells (CTWs) of equivalent capacity; over 500 watercourseshave been improved and the associated sub-components of precision land leveling, demonstration plotshave been completed.
3.4 Results of monitoring and evaluation studies indicate that:
* Agricultural production in the project area has increased 15. Overall cropping intensity has increased,yields of major crops have increased, and there is some shift towards higher value crops (e.g.vegetables);
* barring short term variations caused by unusually high rains in 1996 and 1997, the groundwater tableis generally stable at the pre-transition level (average depth of about 14 feet);
* The closure of STWs has released about 59 MW of electric power for other uses in the economy, andhas reduced the fiscal burden of O&M cost of SCARPs by about Rs 70 million per annum in nominalterms. The actual fiscal savings are higher if the rise i uii..,. O&M costs of STW and the repllacementcosts avoided since the start of the project are taken into account.
3.5 The implementation experience and the lessons learned have generally been incorporatedin a larger follow-up project which covers all the remaining SCARPs in Punjab [The Punjab PrivateSector Groundwater Development Project (Cr. 290 1-PAK)] implementation of which has already started.
3.6 Besides meeting its stated agricultural, groundwater management, and fiscal objectives,the project has also made significant contribution to sector policies, social/equity aspects of SCARPtransition and institutional development. During the MTR the concept of Community tubewells wasintroduced. This change was made with the view to: spread the project incentives and benefits moreequitably and transparently amongst farmers; make the project approach more multi-disciplinary; reducethe total cost of the incentives; and establish grass root level farmer organizations (FOs) that could act asnuclei for developing viable and sustainable FOs at the canal level in the medium term. These additionalobjectives have also been substantially met:
* GOPunjab has discontinued subsidy for the installation of individually owned PTWs in canalcommanded areas. This has not only reduced the total cost of the incentives package but alsopromoted formation of FOs;
* More than 2,200 potentially viable FOs have been established with an average of 16 members each.These FOs have established, or are in the process of. installing over 2,200 CTWs, which havebenefited about 35,000 farm families. The CTWs have adequately substituted for the STWs -- morethan 80 percent of the farmers who used to receive water from STWs are the direct beneficiaries ofCTWs as members of the FOs. The main beneficiaries of the CTWs are generally small farmers --
15 I'recise figures are not vet available due to delay by the impact evaluation consultants in cleaning up the computerized database. Fhis is now being done and is expected to be completed by November 15. 1997.
34
over 85 percent of the FOs' members have holdings less than 5 Ha.
The project's emphasis and success in promoting stakeholdei-s' participation has helped to promote theculture of participatory irrigation management among the implementing agencies. The need for Socialorganization and community participation is now generally better recognized, and multidisciplinaryapproaches to project preparation and implementation are gradually being mainstreamed in thedevelopment process.
3.7 Project Sustainability. The benefits of the investments made in tubewells and watercourseimprovements under the project are likely to be sustained. There are over 400,000 PTWs in Pakistaninstalled, operated and maintained by farmers. The large majority of these are shallow tubewells withlocally made centrifugal pumps and diesel fuel based prime movers (Peter Engines introduced during thelate 1 980s). Although pump efficiencies are low and routine anl preventive maintenance is ofteninadequate, farmers are well familiar with this technology and repair and maintenance and drillingfacilities are locally available. Similarly, although Water User Associations tend to become inactive afterthe watercourses has been improved, farmers continue to maintain watercourses through traditionalinformal arrangements. However, efficiency gains obtained imrnediately after renovation may decreaseover time.
3.8 The use of groundwater for intensive agriculture could lead to accumulation of salts inthe soil and adversely affect productivity in the long term unless appropriate soil and water managementpractices are introduced. Uncontrolled pumpage from the FGW areas could also lead to deterioration ofthe groundwater quality dve to intrusion of saline water from saline pockets. Several remedial/mitigationmeasures were implemented as part of the project, which wi' continue to be implemenLLd Lij.uer otherongoing or upcoming projects to address this issue and promote sustainability (see Post-completionOperation Plan). These include:
* Physical and environmental monitoring being carried out as part of the hydrogeological studies willcontinue after project implementation completion. The project area is also a candidate for intensivemonitoring that is expected to be carried out under the Punjab Private Sector GroundwaterDevelopment as the first phase in the development of a groundwater regulatory framework for Punjab;
* The ongoing "after-care" and training program for FOs, which includes messages on soil and watermanagement, will continue after implementation completion;
* As part of the Drainage Plan prepared under the project: (a) STWs and surface drainage facilities inthe saline groundwater (SGW) area are proposed to be rehabilitated or replaced with tile drainagefacilities; and (b) proper outfalls will be provided to evacuate the saline effluent from the project areain an environmentally safe manner.
3.9 The FOs established under the project are still in their infancy with most of them lessthan two years old. While most of them are reported to be functioning satisfactorily, some are reported tohave social and organizational problems. Case studies carried out by the impact evaluation consultantsiidicate that only a small percentage of the FOs are maintaining records of tubewell operations andaccounts. and following democratic processes in making decisions of common interest. In some FOs theexecutive members tend to dominate and monopolize the tubewell. This is particularly evident in thoseFOs where the tubewell is located on the land of one of the executive members, and where all themembers initially did not contribute their share of the cost of the tubewell. Even if some of the FOsdisintegrate, the CTWs are likely to continue operating as PTWs. Nonetheless, there is a clear need tocontinue the ongoing after-care and training program for FOs to help ensure their sustainabilitv. The
35
Post-completion Operation Plan provides for this.
3.10 Project Cost, Financing Arrangements, and Implementation Timetable. Projectimplementation is expected to be completed on schedule by December 31, 1997, the original Creditclosing date at an estimated cost of US$21.6 million, or 54% of the appraisal estimate. The main reasonsfor the reduction in costs in US$ terms are: (i) depreciation of the Pakistani Rupee; and (ii) reduction inthe tubewells targets during the MTR, because of higher than expected growth of non-project tubewells.The low demand for tubewells loans resulted in under-utilization of the IDA Credit by the AgriculturalDevelopment Bank of Pakistan (ADBP). SDR4.5 million were canceled on July 23, 1997.
3.11 Key Factors that Affected Achievement of the Major Objectives. Project start-up wasdelayed by almost one year due to delay in recruitment of project implementation assistance consultantswhich in turn delayed Credit effectiveness by about nine months. There was a long delay in theappointment of impact evaluation consultants and consequently in carrying out baseline surveys. Longand complex criteria and procedures for approval and disbursements of tubewell incentives coupled withthe adverse publicity of the project by STWs operators and resistance by influential farmers to the closureof STWs all contributed to the overall poor implementation performance up to mid- 1994.
3.12 The project's performance turned around after the MTR when the following adjustmentswere made in project policies and implementation approach: (i) project incentives were discontinued forindividually owned PTWs; (ii) the concept of CTWs was introduced and supported by a structuredprogram of social organization; (iii) incentives approval criteria and disbursement procedures weresimplified and made more clear; (iv) the composition of the consultants team was made mutli-disciplinaryand their office was shifted from Lahore to project area; and (v) the project targets for tubewells wereadjusted taking into account the natural growth of non-project supported tubewells, and the change fromindividually owned PTWs to CTWs.
3.13 Firm commitment of the Government to the project objectives, enthusiastic participationof the farmers in the project after the mid-term review, coupled with generally good management by theimplementing agencies, good performance of the implementation assistance consultants and effectivesupervision by IDA all contributed to the timely completion of the project and achievement of itsobjectives, despite the implementation delays experienced up to the MTR. The Government fullysupported the policy changes and the innovative adjustments in the project implementation approachintroduced during the MTR, demonstrating flexibility in implementation and policy orientation to meetthe project objectives. For example, the Government endorsed, and quickly implemented the proposal todiscontinue subsidizing individually owned tubewells. The Government also supported the structuredapproaches to social organization to establish FOs, and maintained continuity of key project staff (projectdirector). The implementing agencies and farmers also fully owned and supported the introduction ofparticipatory approach to project implementation.
3.14 IDA's Performance. The performance of IDA during project preparation and appraisal wasgenerally satisfactory. However, while the lessons learned from the SCARP Transition Pilot Project wereincorporated in the project design an explicit provision was not made for social organization and farmeroutreach. Similarly, while the criteria set out for award of project incentives were designed to promoteequity by giving preference to water user associations, farmer groups and small farmers, initialimplementation experience indicates that these criteria were somewhat complex and difficult toimplement.
3.15 IDA's performance during supervision was innovative and effective. The MTR wasconducted in a fully participatory manner involving all stakeholders and benefited from the concurrent
36
presence in the field of the appraisal mission for the Punjab Private Sector Groundwater DevelopmentProject. The MTR promoted ownership of all stakeholders and proved to be a turning point for theproject. Subsequent supervisions were regular and helped to address implementation issues effectively.
3.16 Borrower's Performance. Performance of GOP during project preparation was marginallysatisfactory. Surveys carried out during project implementation indicate that the feasibility report for theproject may have under estimated the number of private tubewells that were already installed in theproject area, suggesting that supervision of project preparation was deficient. GOPunjab's involvementduring project preparation was limited to reviewing reports prepared by consultants. No staff werespecifically charged with the responsibility of controlling qualily of project preparation.
3.17 Performance of GOPunjab during project implementation was generally satisfactory. Itprovided unwavering support to the project objectives by, inter alia, ensuring timely release of funds;promptly approving the innovative changes suggested during the MTR; discontinuing subsidy forindividually owned PTWs; and adjusting the incentives package. However, GOPunjab has not yet fullymet the project covenant which requires recovery of 30 percent of the cost of watercourse materials fromthe beneficiaries. Only 51 percent of the amounts due had been collected as of September 30, 1997. TheDirectorate General of Water Management resisted suggestions by IDA missions to switch from thesystem of collecting installments to up-front contribution, on the grounds that this change wouldadversely affect implementation progress. Recently GOPunjab has decided to collect the back-log of costrecovery as arrears of land revenue. The results of the new system, however, remain to be seen. GOP'srole during the implementation of the project was limited to allocation and release of federal fundsthrough WAPDA. Because of various reasons release of funds by WAPDA was delayed during FY96/97and the FY97/98 budget has yet to be released. Thanks to the timely release of funds by GOPunjab theproject has not suffered any cash flow problems yet. However, further delays will lead to delayeddisbursement of tubewell incentives to FOs and payments to consultants.
3.18 Project Outcome. The overall outcome of the project is satisfactory. The physical targets of allmajor components have been or are likely to be completed before closing date, and the major objectiveshave been met. The economic rate of return is expected to be over 25 percent 16 (as compared to 24percent estimated at appraisal.
Summary of Findings, Future Operations and Lessons Learned
3.19 Important Findings. Surveys conducted during project implementation indicate that thenumber of non-project PTWs in the project area increased from about 9,000 in 1988 to 19,000 in 1994.This high growth could be attributed to the introduction of new and relatively inexpensive technology(Peter Engines) during this period. Questions have, however, been raised whether the tubewell growthwas indeed as high as it appears or whether the feasibility report had under estimated the number ofPTWs in 1988. The survey findings, however, suggest that growth of PTWs would have continuedwithout any project intervention, as the STWs were gradually deteriorating. However, there is evidencethat the non-project PTWs were generally installed by farmers with medium and large holdings. Theproject made the tubewell growth more equitable by introducing the concept of CTWs, which havemainly benefited small farmers. The CTWs also curbed the uncontrolled growth of PTWs and increasedthe efficiency of groundwater abstraction by virtue of their higher operating factors and lower operatingcosts as compared to PTWs. Another notable finding is that replacement of STWs with PTWs/CTWsresulted in substantial productivity gains and increased farm incomes, particularly in those areas wherethe STWs had deteriorated.
16 The ICR mission will estimate the ERR upon receipt of impact evaluation data and final cost estimates
37
3.20 Case studies carried out under the project indicate that: (i) FOs in which all memberfarmers contribute their share of the CTW cost up-front (instead of only the more affluent membersbearing the full cost initially) have better prospects of equity in water sharing and sustainability; and (ii)FO members whose lands are located far away from the CTW have higher conveyance/operational waterlosses and therefore have lesser incentive to utilize CTWs.
3.21 Post-Completion Operation Plan. FOs and individuals farmers will be responsible for theoperation and maintenance of watercourses improved and the PTWs/CTWs installed under the project.However, the Government will need to continue physical and environmental monitoring in the projectarea after implementation completion. The Government will also need to continue the after-care andtraining program for a period of about two years to help ensure the sustainability of the FOs which arestill in their infancy. The Post-completion Operation Plan prepared by the implementing agencies withinputs from the mission is attached (Annex 1).
3.22 Key Lessons Learned. The key lessons learned from this project, some of which have alreadybeen incorporated in the design of the follow-up project (Punjab Private Sector GroundwaterDevelopment Project), include:
* GOProvinces should take the lead in the preparation of provincial projects, and should designate stafffor ensuring quality control and involvement of all stakeholders.
* A structured social mobilization program and a multi-disciplinary approach to project implementationis essential for the success of irrigation projects.
* Appropriate steps should be taken to remove difficulties which farmers face in obtainingfard milkiat(evidence of land titles, required for FO membership) from the patwaris. [The proposals made underthe proposed Agriculture Sector Investment Project (ASIP) to address this issue should beconsidered].
* Arrangements for internal and external monitoring and impact evaluation activities should beoperationalized right from the start of the project, and quality of data collection and collation(including establishment of a computerized data base) should be closely supervised.
* To the extent feasible, CTWs should be located on land jointly owned by FO members, and carefulanalysis should be made whether all members will be able to receive CTWs water efficiently.
* Consideration should be given to developing rural micro-credit facilities to help farmers pay up-frontcosts of watercourse improvements and CTWs.
* Farmer training programs should be an integral part of the project design and should be initiated earlyin the implementation phase.
* Federal budgetary allocations for provincial projects should be released directly to the province;
* In future FOs should be registered under the PIDA Act instead of the WUA Act.
* Continuity of competent and motivated key project staff improves project implementation.
38
IV. NEXT STEPS AND ICR TIME TABLE
a. Issuance of IDA management letter confirming the mission findings by December 15, 1997.
b. Transmittal of draft ICR to GOP/GOPunjab/GOSindh for comment by February 15, 1998.
c. Submission by GOPunjab and GOSindh of final versions of their own evaluation of the projectalong with their comments on the draft ICR (if any) by March 15, 1998. (If the evaluation reportis more than ten pages long it should be accompanied by a summary).
d. Preparation of the gray cover ICR and internal IDA clearances by April 15, 1998.
e. Transmittal of the final version of gray cover ICR to GOP/GOPunjab/GOSindh by April 30,1998.
f. Submission of the ICR to IDA Board by May 31, 1998.
V. SUPERVISION ASPECTS
Actions Required Before Credit Closing Date
5.1 The PD PMC to ensure that the PIA consultants complete the soil salinity survey of the projectarea, and groundwater sample tests, and submit their report by December 15, 1997.
5.2 The PD PMC to ensure that the PIA consultants submit the final version of the environmentalassessment report by November 30, 1997.
5.3 The PDPMC to obtain CDWP clearance of the revised project PC- I by November 30, 1997, andif required, ECNEC approval by December 31, 1997.
5.4 The PDPMC to ensure that the impact evaluation consultants clean up the survey data base andprovide print outs of crop budgets for major crops, cropping intensities, cropping patterns, yields,production, gross and net farm incomes by November 15, 1997.
5.5 The PD PMC and the Director General Water Managenment (DGWM) to provide final/actualestimates of project cost to IDA by November 30, 1997.
5.6 The DGWM to provide IDA information on cost recovery levels achieved as of December 31,1997 by January 15, 1998.
5.7 The PDPMC to secure release of the remaining federal budgetary allocations for FY96/97 and theallocation for FY97/98 from WAPDA by November 30, 1997.
5.8 The PDPMC to secure release of the remaining provincial budgetary allocation for FY97/98 fromthe Finance Department by November 30, 1997.
5.9 The PD PMC should complete the retrieval of the remaining STWs machinery from the bore-holes by November 30, 1997.
39
5.10 The PD PMC and DGWM should expedite completion of CTWs/PTWs and disburse theremaining installments of tubewell incentives by December 15, 1997. (Beyond this date it will bedifficult to carry out field verifications as the consultants will demobilize by December 31, 1997).
5.11 The PD PMC should submit a revised draft of borrower's evaluation report and maps of theproject area (updates of those included in the SAR) by November 30, 1997 (Annex 2 providessome guidance on the format and content).
5.12 ADBP headquarters to provide IDA information on loan recoveries achieved as of December 31,1997 by January 15, 1998.
5.13 The DGWM to ensure that the PIA consultants certify all watercourse improvement works andsubmit to IDA "comprehensive" watercourse charts by December 15, 1997.
5.14 The PDPMC to ensure that the PIA and Impact Evaluation consultants prepare an inventory of allsignificant documents and data bases in their possession by December 15, 1997. (User friendlyoperating manuals/guidelines should be prepared for the groundwater model and the impactevaluation data base to facilitate transfer to successor agencies).
5.15 The PDPMC and the DGWM to arrange for auditing of their respective FY96/97 accounts andensure that audit reports are submitted to IDA before March 31, 1998.
5.16 The PDPMC and DGWM to finalize arrangements for starting timely implementation of the Post-Completion Operation Plan by November 30, 1997 so that implementation could commence onJanuary 1, 1998.
Annex 1SECOND SCARP TRANSITION (SST) PROJECT
Post Completion Operation Plan(Both Punjab and Sindh prepared PCOPs during the ICR mission. They are included in the Borrowersevaluation report)
40
Annex 2
Guidance on Borrower's Evalua1;ion of Project
a. The Government's own final evaluation of the project is an important part of the ICR. Itis attached unedited to the ICR submitted to the IDA Board. It can be selective in coverage and shouldaddress issues and lessons learned in project implementation, from the borrower's perspective. Topicscovered can be the same as in the ICR, including project preparation/design, appraisal, implementationand project outcome/results. At each stage of the project the contribution should comment on theperformance of both IDA and the implementing agencies, with observations, where possible supported byevidence or reasoned argument.
b. For Project preparation/design the report should address such questions as the appropriatenessof project objectives, the size and scope of the investments proposed, ease (or difficulty) ofimplementation, and effects on government institutions.
c. For project appraisal the report should concentrate on any significant changes made duringappraisal in the project objectives, size, and scope as compared to those proposed in the preparationreport, and whether these were appropriate.
d. Project implementation experience should be divided in to an assessment of IDA performancein supporting and supervising the project and the performance of the implementing agencies.Effectiveness of the relationship between the government and I'DA should also be documented.
e. Project Operation Experience should document the initial observations on the manner in whichproject created facilities are being operated and maintained and the prospects of sustainability.
f. Project Results include both an assessment of direct physical benefits leading to financial andeconomic and fiscal benefits (dis-benefits) arising from the projUect. Since financial and economicanalysis of the project will be carried out as part of the ICR, if government so wishes, its report couldmore usefully comment on the effects of the project from its own perspective.
g. Lessons learned should be based on the analysis in the foregoing sections.
f. Current Status. The PDPMC has already prepared a first draft of the evaluation report. Themission has provided the PDPMC with some suggestions for revising the formnat and structure of thereport. The above suggestions relate to the content and substance of the report.
1.1 An IDA mission comprising Usman Qamar, Akmal Siddiq, A. Z. Durrani, A. Iqbal, RiazMahmood, and Sardar Riaz Khan visited Sindh from November 6 to 14, 1997 to carry out the finalsupervision and initiate preparation of the implementation completion report for this project. The mainobjectives of the mission were to: (i) review overall progress and agree on measures for timelycompletion and fulfillment of project objectives; (ii) review outputs of impact evaluation studies, andupdate key performance indicators; and (iii) initiate preparation of the project's implementationcompletion report (ICR).
1.2 The mission discussed the project objectives, implementation experience, outcome,lessons learned, and the post-completion operations plan (Annex 1) with officials of the Irrigation, andPlanning and Development Departments. The mission spent two days in the field and discussed aspectsrelating to the project's outcome and its impact with Farmer Organizations (FOs) and individual farmers.The mission also provided guidance to the implementing agencies for the preparation of the borrowersevaluation report on the project (Annex 2). Finally, the mission agreed with the Project Director (PDPMC), and the project implementation assistance (PIA) consultants on various actions required to becompleted before December 31, 1997, the Credit closing date. A partial list of persons met is given inAnnex 4. The mission is grateful and wishes to thank all the officials, consultants, and FOs met for theircooperation, courtesies, and hospitality.
1.3 A draft aide-memoire, summarizing the views of the mission, the borrower, theimplementing agencies was discussed at a wrap-up held in the Planning and Development (P&D)Department on November 14, 1997. This aide-memoire incorporates the main pints made during thewrap-up meeting. It is organized as follows:
Section I : IntroductionSection II : The Project Objectives and Main ComponentsSection III : Mission FindingsSection IV : Next Steps and ICR TimetableSection V : Supervision Aspects: Actions RequiredAnnex 1 : Post-Completion Operation PlanAnnex 2 : Guidance for Preparation of Borrower's Evaluation ReportAnnex 3 : Performance IndicatorsAnnex 4 : List of Persons Met
1.4 The mission's views presented here are subject to confirmation by IDA management.
42
II. THE PROJECI'
2.1 Project Preparation. The project was prepared by the Ministry of Water and Power usingproject preparation funds provided under the Second Irrigation System Rehabilitation Project (Cr. 1888-PAK).
Project Objectives
2.2 The main objectives of the project was to test the viability of SCARP Transition in Sindh.Its specific objectives were to (i) increase agricultural production through improved and timelyavailability of supplementary irrigation on a financially sustainable basis; (ii) maintain an appropriategroundwater table through private tubewells (PTWs), replacing the current SCARP tubewells (STWs),which are expensive to maintain and poorly maintained; and (iii) prepare a follow-up program for largerscale replacement of STWs based on the experience under the project.
2.3 Project Components. The project covers 0.132 million ha in the Moro and Sakrand units of theSCARP North Rohri Project in Sindh. Its main components are: (i) replacement of 380 STWs by PTWsand community tubewells (CTWs); (ii) provision of one-time financial incentives, and credit to farmersfor tubewell installation; (iii) provision of Consultancy services to assist project implementation, andcarry out hydro-geological and impact evaluation studies; and (v) training of project staff and farmers invarious fields.
2.4 Project Cost and Financing. The project cost including physical and price contingencies wasestimated at US$8.7 million, including a foreign exchange component of US$4.7 million. The projectwas to be financed by an IDA Credit of SDR14.8 million (US$20 million equivalent, with approximatelyUS$3.76 million for Sindh). GOP/GOSindh were to contribute US$2.68 million and farmers US$2.27million equivalent. The IDA Credit was signed on July 31, 1991, became effective on April 30, 1992 andis due to close on December 31, 1997.
m. MISSION FINDINGJS
3.1 Evaluation of Objectives. The pilot project's objectives were clear and realistic being similar tothose of the SCARP Transition Pilot Project (Cr. 1639-PAK), which was successfully completed inPunjab on June 30, 1992. The pilot project in Punjab had demonstrated that (i) it was technically, socially,and politically feasible to close down the highly subsidized STVWs if appropriate incentives were providedto install PTWs and preference given to small farmers; and (ii) the water table can be maintained atappropriate levels by PTWs even though farmers pump groundvwater primarily to meet irrigationrequirements. However, because of different land holding patterms and land tenure system andhistorically lower growth of PTWs in Sindh as compared to Punjab, GOSindh decided to test the viabilityof SCARP Transition on a pilot scale initially. The pilot project's objectives were directly in line with theGovernment's sector policies and the Bank's sector assistance sl:rategy for Pakistan which, inter aliaaimed at transferring the responsibility for groundwater management in fresh groundwater areas to theprivate sector and freeing scarce resources for improved operation and maintenance (O&M) of theirrigation drainage system. The irrigation/drainage system had deteriorated over time due to variousreasons, including inadequate availability of O&M funds, a significant part of which was being pre-empted by the STWs, which provided only a small portion of the irrigation supplies in the provinces.
3.2 Several covenants were included to support the project objectives. These included:periodic review of the adequacy of the project's incentives package; carrying out of hydrogeological and
43
environmental monitoring studies, including preparation of a groundwater model and a drainage plan forthe SGW areas; and provision of adequate funding for the O&M of STWs and surface drainage facilitiesin saline groundwater (SGW) areas.
Implementation Experience and Results
3.3 Achievement of Objectives. The project's physical targets have been or are likely to beachieved and its objectives have been substantially achieved. About 380 STWs in the fresh and marginalgroundwater areas have been closed and replaced by PTWs and CTWs of equivalent capacity; and about60 watercourses have been improved17.
3.4 Results of monitoring and evaluation studies indicate that:
* Agricultural production in the project area has increased1 8. Overall cropping intensity has increased,yields of major crops have increased, and there is some shift towards higher value crops (e.g. bananaorchards);
* The rising trend in the groundwater table that had developed during 1986 -1995, due to deteriorationand closure of STWs, has been reversed by the growth of project supported PTWs and CTWs. During1995 to 1997 the average depth of water table in the project area increased by about one foot per yearand is currently about 10.5 feet. Only 3 percent of the project area was reported to have water tabledepth of 0 to 5 feet in May 1997. (These areas are located near canals where there is high recharge andgroundwater utilization is low.)
* The closure of STWs has released about 9 MW of electric power for other uses in the economy, andhas reduced the fiscal burden of O&M cost of SCARPs by about Rs 50 million per annum in nominalterms. The actual fiscal savings are higher if the rise in unit O&M costs of STWs and the replacementcosts avoided since the start of the project are taken into account.
3.5 Besides meeting its stated agricultural, groundwater management, and fiscal objectives,the project has also contributed to sector policies and institutional development. During the MTR theconcept of CTWs was introduced. This change was made with the view to: spread the project incentivesand benefits more equitably; make the project approach more multi-disciplinary; and establish grassrootslevel farmer organizations (FOs) that could act as nuclei for developing viable and sustainable FOs at thecanal level in the medium term. These additional objectives have also been substantially met:
* GOSindh has introduced a "graduated" subsidy for tubewells which aims at promoting formation ofFOs;
* About 500 potentially viable FOs have been established, with an average of 12 members each. TheseFOs have installed, or are in the process of installing, over 400 CTWs, which have benefited about5,000 farm families1 9. The PTWs and CTWs have adequately substituted for the STWs -- more than75 percent of the farmers who used to receive water from STWs are the direct beneficiaries of PTWsor CTWs. The main beneficiaries of the PTWs/CTWs are generally small farmers -- over 65 percentof the PTWs owners and FOs' members have holdings less than 5 ha.
17 Funded under the IDA assisted OFWM-III Project18 Precise figures are expected to become available as soon as the impact evaluation consultants clean up the data base
and collate the results. This work is in progress and expected to be completed by November 30, 1997.19 An additional 2,600 farm families have benefited directly from PTWs. This does not include farmers who buy water.
44
The project's emphasis on, and success in, promoting stakeholders' participation has helped topromote the culture of participatory irrigation management among the implementing agencies. Theneed for social organization and community participation is now generally better recognized, andmultidisciplinary approaches to project preparation and implementation are gradually beingmainstreamed in the development process.
3.6 Project Sustainability. The benefits of the investments made in tubewells installed under theproject are likely to be sustained. These are all shallow tubewells with locally made centrifugal pumpsand diesel fuel based prime movers (Peter engines introduced during the late 1980s). Although pumpefficiencies are low and routine and preventive maintenance is often inadequate, farmers are graduallybecoming familiar with this technology. Private tubewell development in the project area has beenaccompanied by growth of tubewell drilling facilities and maintenance workshops.
3.7 The use of groundwater for intensive agriculture could lead to accumulation of salts inthe soil and adversely affect productivity in the long term unless appropriate soil and water managementpractices are introduced. Preliminary runs of a mathematical groundwater model developed under theproject indicate that significant increase in pumpage from the FIJW areas (particularly from strata deeperthan 130 feet) could lead to deterioration of the groundwater quality in certain areas due to up-coning ofsaline water from deeper layers of the aquifer. Continued inequitable distribution of canal water suppliesin the project area could also exacerbate this problem 20. The f:dlowing remedial/mitigation measures(which were included in the project), will continue to be implemented under the upcoming NationalDrainage Program (NDP) Project to address these issue and promote sustainability (see Post-completionOperations Plan: Annex 1):
* Physical and environmental monitoring will continue after project implementation completion. Theproject area is also a candidate for intensive monitoring that is expected to be carried out under theNDP as the first phase in the development of a groundwater regulatory framework;
* The ongoing "after-care" and training program for FOs, which includes messages on soil and watermanagement, will continue after implementation completion: and
* Inequities in canal water supplies in the project area will be addressed by FOs to be established at thecanal level under the NDP Project.
3.8 The FOs established under the project are still in their infancy with most of them lessthan two years old. While most of the FOs are reported to be functioning satisfactorily, many arereported to have social and organizational problems. Case studies carried out by the impact evaluationconsultants indicate that only a small percentage of the FOs are maintaining records of tubewelloperations and accounts, and following democratic processes in making decisions of common interest. Insome FOs the executive members (presidents and secretaries) tend to dominate and monopolize thetubewell. This is particularly evident in those FOs where the tubewell is located on the land of one of theexecutive members, and where all the members initially did not contribute their share of the cost of thetubewell. Even if some of the FOs disintegrate, the CTWs are likely to continue operating as PTWs.Nonetheless, there is a clear need to continue the ongoing after-c;are and training program for FOs to helpensure their sustainability. The Post-completion Operations Plan provides for this.
20 Head reaches of canals draw more than their share, which results in higher recharge of groundwater and low demandfor groundwater water leading to low utilization of tubewells. Conversely, the tail reaches do not receive their dueshare, which results in lower recharge and higher utilization of groundwater.
45
3.9 Project Cost, Financing Arrangements, and Implementation Timetable. Projectimplementation is expected to be completed on schedule by December 31, 1997, the original Creditclosing date, at an estimated cost of US$5.2 (or 60 percent of the appraisal estimate in US$ terms). Themain reason for the lower cost is the devaluation of the Pakistani Rupee. Low demand for tubewells loansresulted in under-utilization of the IDA Credit by the Agricultural Development Bank of Pakistan(ADBP). SDR4.5 million were canceled on July 23, 1997.
3.10 Key Factors that Affected Achievement of the Major Objectives. Project start-up wasdelayed by almost one year due to delay in recruitment of project implementation assistance consultantswhich in turn delayed Credit effectiveness by about nine months. There was also a long delay in theappointment of impact evaluation consultants and consequently in carrying out baseline surveys.Inappropriate changes in the criteria for award of project incentives and lack of publicity of the project'sincentive package, coupled with the adverse publicity of the project by STWs operators and resistance byinfluential farmers to the closure of STWs all contributed to the overall slow implementation progress upto mid- 1994.
3.11 The project's performance turned around after the MTR when the following adjustmentswere made in the project implementation approach and policies: (i) an intensive publicity and farmeroutreach campaign was undertaken to promote installation of tubewells; (ii) the concept of CTWs wasintroduced and supported by a structured program of social organization and a graduated subsidy21
favoring CTWs installed by FOs; (iii) incentive award criteria were rationalized and disbursementprocedures were simplified; and (iv) the composition of the consultants' team was made mutli-disciplinary.
3.12 Firm commitment of the Government to the project objectives, enthusiastic participationof the farmers in the project after the mid-term review, coupled with generally good management by theimplementing agencies, good performance of the implementation assistance consultants and effectivesupervision by IDA all contributed to the timely completion of the project and achievement of itsobjectives, despite the implementation delays experienced up to the MTR. The Government fullysupported the policy changes and the innovative adjustments in the project implementation approachintroduced during the MTR, demonstrating flexibility in implementation and policy orientation to meetthe project objectives. For example, the Government supported the introduction of structured approachesto social organization to help establish FOs. Finally, the Government maintained continuity of keyproject staff (project director). The implementing agencies and farmers also fully owned and supportedthe introduction of a participatory approach to project implementation.
3.13 IDA's Performance. The performance of IDA during project preparation and appraisal wasgenerally satisfactory. However, while the lessons learned from the SCARP Transition Pilot Project inPunjab were incorporated in the project design an explicit provision was not made for social organizationand farmer outreach. Similarly, while the criteria set out for award of project incentives were designed topromote equity by giving preference to water user associations, farmer groups and small farmers, initialimplementation experience indicates that these criteria were somewhat complex and difficult toimplement.
3.14 IDA's performance during supervision was innovative and effective. The MTR wasconducted in a fully participatory manner involving all stakeholders and benefited from the concurrentpresence in the field of the appraisal mission for the Punjab Private Sector Groundwater DevelopmentProject. The MTR promoted ownership of all stakeholders and proved to be a turning point for theproject. Subsequent supervisions were regular and helped to address implementation issues effectively.
21 Subsidy for CTWs was increased to Rs 30,000 while maintaining the subsidy for PTWs at Rs 16,000.
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3.15 Borrower's Performance. Performance of GOP during project preparation was marginallysatisfactory. Involvement of GOSindh and GOPunjab was not pro-actively invited. Partly as aconsequence of this, GOSindh's involvement during project preparation was limited to reviewing reportsprepared by consultants. No staff were specifically charged with the responsibility of controlling qualityof project preparation.
3.16 GOP's role during the implementation of the project was limited to allocation and releaseof federal funds through WAPDA. Performance of GOSindh during project implementation wasgenerally satisfactory. It provided support to the project objectives by, inter alia, ensuring timely releaseof funds; promptly approving the innovative changes suggested during the MTR; and introducing agraduated subsidy. However, GOSindh could not effectively address the issue of inequitable distributionof canal water in the project area. ADBP's performance was lacking. The mobile credit officers did notmaintain close coordination with the PMC and PIA consultants. Partly as consequence of this, overallprogress lagged behind targets and some loans intended for the project farmers were in fact sanctioned tofarmers outside the project area. Several tubewells claimed to have been installed with the assistance ofADBP loans remain to be verified. Finally, overall loan recoveries achieved so far are only 45 percent ofthe amounts due.
3.17 Project Outcome. The overall outcome of the project is satisfactory. The physical targets of allmajor components have been or are likely to be completed before the closing date, and the majorobjectives have been met. The economic rate of return is expected to be over 25 percent 22 (as comparedto 20 percent estimated at appraisal).
Important Findings, Future Operations and Lessons Learned
3.18 Important Findings. Replacement of STWs with PTWs/CTWs has resulted in productivity gainsand increased farm incomes, particularly in those areas where the STWs had deteriorated and canal watersupplies were low (tail reaches of canals). The PTWs/CTWs uti]l[ization factors are reported to be high inthese areas. On the other hand, in the head reaches where canals supplies are abundant, tubewellutilization rates are reported to be low. In these areas, farmers/FOs rely primarily on canal water, and itseems that they have invested in the tubewells primarily to avail the incentives and as an "insurance" forthe future.
3.19 Preliminary findings of case studies carried out under the project indicate that FOs in thefollowing categories have better prospects of achieving equity in water sharing and sustainability:
* FOs in which all member farmers contributed their share of the CTW cost up-front (instead of only themore affluent members bearing the full cost initially);
* FOs that consist of members from the same family or caste and where lands of the members are solocated that they can receive water from the CTWs efficiently; and
* FOs located in areas where the canal supplies are low and there is an active demand for groundwater.
3.20 Preliminary runs of the groundwater model indicate that:
* groundwater pumpage from strata deeper than about 130 feet would result in deterioration of waterquality;
* rehabilitation and increased pumpage from the of SGW STWs that are currently non-functional, wouldresult in deterioration of water quality in certain areas in the nnedium term; and
22 The ICR mission will estimate the ERR upon receipt of impact evaluation data and final cost estimates.
47
* increased pumpage from PTWs/CTWs would result in deterioration of water quality in certain areas.
While the model is not yet fully refined and sensitivity tests on some of the assumptions/inputs have yetto be carried out, these results, nonetheless, point out the need for careful monitoring, particularly in thoseareas which are identified to be potentially at risk.
3.21 Post-Completion Operations Plan. FOs and individual farmers will be responsible for theO&M of CTWs/PTWs installed under the project. However, the Government will need to continuephysical and environmental monitoring in the project area after implementation completion. TheGovernment will also need to continue the after-care and training program for a period of about two yearsto help ensure the sustainability of the FOs which are still in their infancy. The Post-completionOperations Plan prepared by the implementing agencies with inputs from the mission is attached (Annex1).
3.22 Key Lessons Learned.
* GOProvinces should take the lead in the preparation of provincial projects, and should designate stafffor ensuring quality control and involvement of all stakeholders.
* A structured social mobilization program and a multi-disciplinary approach to project implementationis essential for the success of irrigation projects.
* Appropriate steps should be taken to remove difficulties which farmers face in obtaining evidence ofland titles, required for FO membership. [The proposals made under the proposed Agriculture SectorInvestment Project (ASIP) to address this issue should be considered].
* Arrangements for internal and external monitoring and impact evaluation activities should beoperationalized right from the start of the project, and quality of data collection and collation(including establishment of a computerized data base) should be closely supervised.
e To the extent feasible, CTWs should be located on land jointly owned by FO members, and carefulanalysis should be made whether all members will be able to receive CTWs water efficiently.
* Consideration should be given to developing rural micro-credit facilities to help small farmers pay up-front their share of the cost of CTWs.
* Farmer training programs should be an integral part of the project design and should be initiated earlyin the implementation phase.
* In future FOs should be registered under the SIDA Act to provide them with legal cover.
* Continuity of competent and motivated key project staff improves project implementation.
IV. NEXT STEPS AND ICR TIME TABLE
a. Issuance of IDA management letter confirming the mission findings by December 15, 1997.
b. Transmittal of draft ICR to GOP/GOPunjab/GOSindh for comment by February 15, 1998.
48
c. Submission by GOPunjab and GOSindh of final versions of their own evaluation of the projectalong with their comments on the draft ICR (if any) by March 15, 1998. (If the evaluation reportis more than ten pages long it should be accompanied by a summary).
d. Preparation of the gray cover ICR and internal IDA clearances by April 15, 1998.
e. Transmittal of the final version of gray cover ICR to GOP/GOPunjab/GOSindh by April 30,1998.
f. Submission of the ICR to IDA Board by May 31, 1998.
V. SUPERVISION ASPECTS
Actions Required Before Credit Closing Date
5.1 The PD PMC to ensure that the PIA consultants complete soil salinity survey of the project area,and analysis of deep groundwater samples from critical areas, and submit their report byDecember 15, 1997.
5.2 The PD PMC to ensure that the PIA consultants submit an environmental assessment report byDecember 15, 1997.
5.3 The PD PMC to ensure that the impact evaluation consultants clean up the survey data base andprovide time series data (from baseline to Rabi 1996/97), including crop budgets for major crops,cropping intensities, cropping patterns, yields, production, gross and net farm incomes byNovember 20, 1997.
5.4 The PD PMC to provide final/actual estimates of project cost to IDA by November 30, 1997.
5.5 The PD PMC should complete the retrieval of the remaining STWs machinery from the bore-holes by November 30, 1997.
5.6 The PD PMC should expedite completion of CTWs/PT1Ws and disburse the remaining tubewellincentives by December 15, 1997. (Beyond this date it will be difficult to carry out fieldverifications as the consultants will demobilize by December 31, 1997).
5.7 The PD PMC should submit a revised draft of borrower's evaluation report and maps of theproject area (updates of those included in the SAR) by November 30, 1997 (Annex 2 providessome guidance on the format and content).
5.8 ADBP headquarters to provide IDA with information on loan recoveries achieved as ofDecember 31, 1997 by January 15, 1998.
5.9 The PD PMC to ensure that the PIA and impact evaluation consultants prepare inventories of allsignificant documents and data bases in their possession by December 15, 1997. (User friendlyoperating manuals/guidelines should be prepared for the groundwater model and the impactevaluation data base to facilitate transfer to successor agencies).
5.10 The PDPMC to ensure that the PIA consultants review and refine the groundwater model; re-run
49
the model for various future scenarios; and train staff of the successor organization (DRIP,University of Sindh or other entity) in using the model, by December 31, 1997. The refinementsto be made in the model should include:* improving calibration;* carrying out sensitivity analysis for various inputs/assumptions, including values for
canal recharge, tubewell operation factors, permeability, transmissivity, specific yields,etc.
5.11 The PD PMC to prepare a PC-1 for implementation of the Post-Completion Operations Plan as asub-project under the NDP, by November 30, 1997 so that implementation could commence onJanuary 1, 1998.
5.12 The PD PMC to arrange for auditing of the FY96/97 accounts and ensure that audit reports aresubmitted to IDA before March 31, 1998.
Annex 1Second SCARP Transition North Rohri Pilot Project
Post Completion Operation Plan(Both Punjab and Sindh prepared PCOPs during the ICR mission. They are included in the Borrowersevaluation report)
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Annex 2
Guidance on Borrower's Evaluaition of Project
a. The Government's own final evaluation of the project is an important part of the ICR. Itis attached unedited to the ICR submitted to the IDA Board. It can be selective in coverage and shouldaddress issues and lessons learned in project implementation, from the borrower's perspective. Topicscovered can be the same as in the ICR, including project preparation/design, appraisal, implementationand project outcome/results. At each stage of the project the contribution should comment on theperformance of both IDA and the implementing agencies, with observations, where possible supported byevidence or reasoned argument.
b. For Project preparation/design the report should address such questions as the appropriatenessof project objectives, the size and scope of the investments proposed, ease (or difficulty) ofimplementation, and effects on government institutions.
c. For project appraisal the report should concentrate on any significant changes made duringappraisal in the project objectives, size, and scope as compared to those proposed in the preparationreport, and whether these were appropriate.
d. Project implementation experience should be dividecd in to an assessment of IDA performancein supporting and supervising the project and the performance of the implementing agencies.Effectiveness of the relationship between the government and IDA should also be documented.
e. Project Operation Experience should document the initial observations on the manner in whichproject created facilities are being operated and maintained and the prospects of sustainability.
f Project Results include both an assessment of direct physical benefits leading to financial andeconomic and fiscal benefits (dis-benefits) arising from the proJject. Since financial and economicanalysis of the project will be carried out as part of the ICR, if government so wishes, its report couldmore usefully comment on the effects of the project from its own perspective.
g. Lessons learned should be based on the analysis in the foregoing sections.
f. Current Status. The PDPMC has already prepared a first draft of the evaluation report. Themission has provided the PDPMC with some suggestions for revising the fornat and structure of thereport. The above suggestions relate to the content and substance of the report.
1.1 Salinity Control and Reclamation Programme (SCARP): Agriculture, is the main stayof Pakistan's economy. About 90 percent of agricultural output which accounts for morethan a quarter of GDP, more than half of all employment and provides subsistence to therural population, forming 75 percent of the total, depends on irrigation. The vast canalsystems covering the Indus basin operating over a period of more than 50 years, withoutadequate drainage of the irrigated areas, caused wide spread waterlogging and soilsalinity. By 1950s large areas of fertile land, mostly in Punjab was thrown out ofcultivation on this account. To control the twin menaces of waterlogging and salinity, theGovernment of Pakistan embarked on the implementation a series of Salinity Controland Reclamation Projects (SCARPs) in early 1960s. The said projects provided thenecessary sub-surface drainage relief by pumping out the groundwater through largecapacity tubewells. Discharge of SCARP Tubewells (STWs) operating in freshgroundwater (FGW) areas provided supplementary irrigation water which used inconjunction with available canal supplies enabled the farmers to increase cropped area.Effluent of STWs operating in saline groundwater (SGW) areas, is disposed of intonearby surface drains outfalling in a river. In Punjab province SCARP I was the first oneof such projects and went into operation during 1961-63, which covered a gross area of1.21 million acres. In Sindh North Rohri SCARP, the second such project in Sindhprovince, came into operation during 1978. It covered a gross area of 0.725 millionacres.
1.2 SCARP Transition Concept: The SCARPs have been meeting the drainage and salinitycontrol requirements to a very large extent but with passage of time the discharge of theSTWs has been decreasing and their performance became uneven due to frequentbreakdowns and their operation at times did not synchronize with the periods of keendemand for crops. In order to maintain the level of agricultural development alreadyattained by them, the farmers were compelled to install their own tubewells to make upthe deficiency of groundwater. At the same time cost of O&M and replacement of agingSTWs, has been on the increase, proving it to be an unsustainable financial burden onpublic exchequer. The Government therefore decided to transfer the responsibility ofdevelopment and management of groundwater in SCARP areas underlain with freshgroundwater from public to private sector. This policy recognizes and enunciates theconcept of SCARP Transition.
1.3 SCARP Transition Projects: The area covered by SCARP I, was the first one selectedfor the study of the feasibility of implementing the SCARP transition concept. Necessaryfeasibility studies for this area were completed in 1984 and it was decided to implementSCARP transition on a pilot basis over the area covered by Khanqah Dogran Scheme ofSCARP I. It was expected that the implementation experience gained in this area wouldserve the basis for determining the feasibility of and most effective approach to replicate
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SCARP transition in other SCARP areas. lmplementation of the SCARP Transition PilotProject was successfully completed by June 1992. Encouraged by the success of thesaid Project, the government decided to take up the Second SCARP TransitionProject, in Punjab and Sindh, as a follow-up to the pilot project. In Punjab it covers agross area of 1.095 million acres essentially aims at terminating under a phasedprogramme the 1346 STWs operating in FGW areas of SCARP I less its KhanqahDogran Scheme and to induce the farmers to install their own tubewells. Govt. of Sindhurged that there is difference in social set up as compared to Punjab and there is need torun a pilot project in Sindh, therefor, Second SCARP Transition North Rohri Pilot Project(SSTNRPP) in Sakrand and Moro units of SCARP North Rohri was initiated. It coveredan area of 0.326 million acres, terminating 382 STWs. Implementation of this projectstarted during July 1992 and completed by December 1997, on scheduled dates.
2. BORROWER'S ASSESSMENT
2.1 Project Objectives: The SST Project aimed at implementing the "SCARP Transition"policy of the Government, to achieve the following objectives:
(a) Increased agricultural production of the Project area, through improved andtimely availability of supplementary irrigation water pumped by private tubewell,on a financially sustainable basis.
(b) Maintain groundwater table at appropriate levels, through pumpage by privatetubewells (PTWs) replacing the current SiWs which are poorly maintained andexpensive to operate and propose ways and means to ensure long-termsustainability of groundwater extraction and balanced pumpage from the FGWand SGW areas of the Project, so that intrusion of saline groundwater into FGWareas is arrested.
(c) (i) Elimination of future highly subsidized expenditure for the maintenance andoperation of STWs and their replacement as and when necessary. (ii) Enable theGovernment to recover an appropriate portion of the investment and to utilizeelsewhere the electric load released due to the closure of STWs.
(d) Based on experience on this project, prepare follow up projects for large scalereplacement of STWs in other SCARPs, in 1Punjab.
(e) The SCARP Transition Project in Sindh aimed at testing the viability of SCARPtransition in that province and based upon the experience gained, prepare afollow up programme for large scale transition of other SCARPs in Sindh.
2.2 Design:
Punjab
(i) Terminate under a phased programme 13,46 STWs operating in FGW areas ofthe Project and to induce the farmers to either take over an STW in goodcondition or install jointly owned tubewells preferably along watercourses by suchgroups of farmers as Water Users Associations (WUAs) and as a last option
53
installation of tubewells by individual farmers, giving priority to smaller landholders. During MTR June/July 94, it was decided that the incentive in form ofsubsidy will be extended to FOs only.
(ii) Improvement of about 500 selected watercourses in FGW areas of the Projectarea under the OFWM Programme to facilitate proper inter-farm distribution andsharing of water pumped by PTWs.
Sindh
(iii) Terminate under a phased programme 382 STWs operating in FGW areas ofSakrand and Moro Units of SCARP North Rohri and to induce the farmers toeither take over an STW in good condition or install jointly owned tubewellspreferably along watercourses by such groups of farmers as Water UsersAssociations (WUAs) and as a last option installation of tubewells by individualfarmers.
Punjab and Sindh
(iv) Training of farmers and project staff in improved agricultural inputs and practicesand development and maintenance of tubewell works.
(v) Provision of one time financial incentives and ADBP credit to farmers forinstallation of PTWs and CTWs.
(vi) Provision of consultants services to assist the Project Management Cell (PMC) inproject implementation, hydrogeological studies and impact evaluation studiesand preparation of future SCARP transition projects.
(vii) Carrying out hydrogeological studies which include: (a) preparing action plans toensure long term sustainability of groundwater extraction in the project area, andproposing ways and means to ensure balanced pumpage from FGW and SGWareas of the project so that intrusion of saline groundwater in FGW areas isarrested. (b) developing a computerized mathematical groundwater model forascertaining scenarios based on anticipated field operating conditions. (c)assessing the impact of using marginal quantity groundwater on soil fertility, and(d) environmental assessment of the impact of saline groundwater effluentdisposal and the build up of harmful chemicals in the soil by the use of marginalquality water for irrigation.
(viii) Carrying out studies for evaluation of the impact of transition of tubewellownership from public to private sector in respect of changes in the croppingpattems, cropping intensities, crop yields, use of improved agricultural inputs, andavailability of groundwater especially to small farmers. Study includes evaluationof the impact of transition on net farm income and its distribution, especially thebenefits accruing to small farmers and assessment of economic and financialperformance of farmers owning a tubewell and those not owning one.
(ix) Reduction in O&M expenditure of STWs.
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(x) In order to induce the farmers to install their tubewell expeditiously, the provincialgovernments, provided (a) additional cash incentives and (b) ensured timelyconnection to new electric driven tubewells.
During the early stages of implementation of the Project, the farmers opted forinstallation of individually owned tubewells only which did not ensure equitabledistribution of groundwater to all farmers as it was the position before closure of STWs.During the Mid Term Review of the Project (July 1994) it was agreed that the farmersshould be allowed to install jointly owned i.e. Comrnunity Tubewells (CTWs) only and theoption of the farmers to install individually owned tubewells was withdrawn from the areawhere remaining STWs were to be closed. In S'indh, however, in addition of CTWs,option of allowing subsidy for private tubewells installation was continued in view of thepoor socio-economic conditions.
2.3 Implementation: The overall responsibility for the implementation of the projectmanagement rested with Project Management Cell (PMC) which were headed bySuperintending Engineer of the respective SCARP Circles of the Irrigation and PowerDepartment of GO Punjab and Sindh, who for the purpose of this project was designatedas the Project Director. For implementation of the Project and hydrogeological studies,the PMC was assisted by Consultants a Joint Venture of ACE, NESPAK and NDC inPunjab and ACE, NESPAK, ZCL and Harza in Sindh project areas. Studies forevaluation of the Project impact have been carried out by M/s Multi DimensionalConsultants (MDC) in Punjab and by M/s Sindh Development Studies Center (SDSC) inSindh. Improvement of watercourses of the Projeict area has been the responsibility ofthe On Farm Water Management Organization of the Provincial Agriculture Department.After the Mid Term Review, the said organization also undertook installation of some ofthe CTWs through the Water Users Associations (WUAs) in Punjab. Other organizationsthat remained associated with the Project implementation in connection with the followingactivities relating to PTWs and CTWs installed uncler the Project, are:
Organization Activity
1. Chairman Area Electricity Providing electric connection toBoards PTWNsl CTWs proposed by the
of WAPDA farrners to be operatedelectrically.
2. Regional Managers of Providing credit for tubewellAgricultural insl:allation.
Development Banks falling inthe
project areas of Punjab andSindh
sub-projects.
3. Deputy Commissioners of the Issuance of Agricultural Passconcerned districts in both the Books.provinces.
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Although the Development Credit Agreement for the Project was signed on July 31,1991, its start up was delayed by almost one year due to delay in recruitment of ProjectImplementation Assistance Consultants, which in turn delayed Credit effectiveness byabout nine months. The Project Impact Evaluation Consultants were appointed by theend of year 1994, which delayed carrying out of base-line surveys. To begin with, thefarmers opted to install individually owned tubewells which did not ensures access togroundwater by all beneficiaries on equitable basis, besides involving long and cQmplexcriteria and procedures for approval and disbursement of tubewell subsidy. All thesehandicaps combined with adverse publicity of the operators of the Project STWs andresistance by influential farmers to the closure of STWs, contributed to overall slow paceof implementation of the Project upto mid-1994. Progress of transition process on theProject, however improved considerably after the following decisions taken during theMid Term Review of the Project (July 1994).
(i) Criteria and procedure for approval and disbursement of subsidy for installingCTWs should be simplified and made more clear.
(ii) The composition of the PIA Consultants team was made multi-disciplinary andtheir office be shifted from Lahore to Sheikhupura in Punjab and from Hydrabadto Sukarand in Sindh; within the Project area.
(iii) The project targets for tubewells were adjusted taking into account the naturalgrowth of non-project supported tubewells and the change of allowing installationof CTWs instead of individually owned PTWs.
Punjab
(iv) Transition of the 703 STWs awaiting closure after July 1994, was carried out byallowing installation of CTWs only by WUAs or properly formed FarmerOrganizations (FOs). The establishment of effective FOs was considered crucialto the successful implementation of the said strategy as the project did not havemuch experience nor expertise for establishing the required type of FOs, fourdifferent models were tested by engaging; (a) Project Management Cell (PMC)with the help of Social Organizers (SOs). The SOs, M.A or M.Sc. in RuralSociology, were engaged by the Project Implementation Assistance (PIA)Consultants and were given intensive training for performing the proposed work,by an expatriate specialist before they were fielded. The SOs were to report toSocial Organization Supervisors (SOSs) for coordination and supervision of theactivities of SOs. (b) A local service NGO, was engaged by the PIA Consultantsfor utilizing its social organization skills. (c) Directorate of OFWM by utilizing theexperience of its Field Teams who were already working in the Project area forthe improvement of watercourses under the OFWM Programme. It was alsodecided that only those watercourses should be taken up for improvement by theOFWM staff on which the WUAs would agree to install a CTW. (d) IrrigationDepartment, worked by utilizing the experience and intimate knowledge of itslocal revenue staff, Patwaris, Zilladars, etc. about the activities of the farmers ofthe area.
(v) The project envisaged closure of 1346 STWs and insatalation of 4700
56
PTvVs/CTWs and improvement of 500 watercourses. Project exceeded targets byclosing 1478 STWs and by installing 4800 PTWsICTWs (2210 CTWsplus 2590PTWs). Watercourses improved under the project were 540. Besides achievingthese physical targets, about 1500 FOs were given training for economic use ofTWs.
(vi) A computerized groundwater mathematical model and different scenarios basedon anticipating field operating conditions were studied. The remote sensing studywas also carried out to access the condition of soil salinity and water logging.
(vii) PMC maintained close coordination with all entities responsible or associatedwith implementation of the various Project components and as a result theimplementation proceeded smoothly, particularly after the Mid Term Review ofthe Project.
Sindh
(viii) The Project envisaged installation of 1800 PTWs. After an updatedhydrogeological study and restructure of consultants team and in light of newapproach the water budget was revised. It was estimated that 719 PTWs of 1.0cusecs capacity and 1070 of 0.5 cusecs capacity, a total of 1789 tubewells willpump out the requisite groundwater surplus which otherwise would have beenpumped by STWs. In view of different socio-economic conditions in Sindh only428 CTWs out of 477 targeted and 343 private tubewells of one cusec capacitycould be installed. Total tubewells of one cusec were proposed as 719.
(ix) With the restructured team of consultants, a wide publicity program to promoteand develop participatory groups of farmers organization for installation of CTWs,was carried out through newspapers, electronic media, distribution, pasting ofpamphlets at doorsteps of farmers and drum beating in town mandis resulting inraising the implementation to 58% by 1995-96 and 96% by November 1997. Thebalance has been completed before target date matching with credit closing date.The services of an NGO though paid for, did not yield good results.
(x) The installation of PTWs/CT\Ns further reveals that 16% of tubewells have beeninstalled in the head reaches, 32% in the middle and 52% in the tail reaches ofthe channels. Inequitable distribution of water supply in channels appears to bethe reason. There is the least demand of PTWs in head reach where water is inabundance and the most in the tail reach where water is scarce. The projectbenefits on small, medium and large size farm basis are 60%, 10% and 7%respectively.
(xi) Seventeen training sessions were held in the project area on the locations ofCTWs installed, to disseminate the know how to farmers/ FOs on tubewelltechnology and equipment, water management in conjunctive use of marginalquality groundwater of tubewells, maximizing the benefits using cost effectivetechnique, and optimum utilization of TW water. Two indoor sessions were alsoheld on same pattern to impart training to the staff of Irrigation and PowerDepartment for guidance and actions to be taken according to Post CompletionPlan.
57
(xii) Verification of land holdings of farmers to approve FOs/COs took more time thananticipated as the relevant record was not upto-date.
2.4 Operation Experience: Introduction of the innovative approach to replace STWs byCTWs to be installed by properly established FOs was new to the farmers who wereapprehensive of its success. Good deal of motivation had to be done before the farmersstarted agreeing to implement the new concept and in due course of time their responsewas found to be encouraging. Experience gained in this context shows that:
(i) Farmers should not be allowed to install individually owned tubewells, inreplacement of STWs, because in the absence of dependable or properlyorganized water markets, a farmer not owning a tubewell may not get his share ofsupplementary groundwater at the time and in quantity it is needed for his cropsand at a reasonable price.
(ii) STWs should be replaced only by CTWs, to be installed by FOs which should beestablished with the help of properly qualified and duly trained Social Organizers.
(iii) To ensure sustained and efficient functioning of FOs 'after-care' and training ofFOs should continue for at least one year after these have been established.The said programme should aim at helping the FOs to resolve theirorganizational and management problems, training in book-keeping, O&M ofCTW, pricing and distribution of its water and should include messages onimproved agricultural inputs.
(iv) The CTW should be installed on land which is or is acquired as common propertyof the CTW beneficiaries and a large majority of the members of the FO shouldbe small farmers. This will curb the tendency of an influential member or ownerof the land in which the CTW is installed, to monopolize its supply.
(v) FOs installing a CTW seldom need credit for its construction if its cost issubstantially subsidized under the project.
(vi) The progress for developing the concept of CTWs when compared to installationof PTWs proved to be more popular mainly due to; (a) fresh and energeticgraduates of Rural Sociology were engaged as SOs to motivate farmers forinstallation of CTWs; (b) good mobility of the SOs was ensured by providing thembrand-new motorcycles; (c) tempo of the SOs was extended with intensivetraining and by conducting refresher courses; (d) their progress was alsovigilantly monitored by the PMC and by the PIA Consultants.
Experience gained on other activities of project implementation are:
(i) To promote the confidence of the beneficiaries over the project implementingagencies, it is very much essential that their participation should be encouragedby extending all assistance at their door step.
ii) Physical and environmental monitoring carried out as part of the hydrogeological
58
studies of the Project area, should be continued after the project implementationis completed.
iii) At present rate of pumpage from SGW areas of the Project is less than that ofFGW areas which can cause lateral intrusion of SGW into FGW. The said rate isalso less than the rate at which drainable surplus of SGW area should bepumped which is responsible for current overall rise of groundwater table of theProject area. Drainage plan prepared undler the Project aims at meeting thesurface drainage requirements of SGW areas of this Project and provides forproper outfalls of surface drain which will ensure efficient evacuation of the salineeffluent from the project area in an environmentally safe manner. This plan hasbeen made part of the National Drainage Plan which has since been taken up forimplementation.
2.5 Evaluation of Borrower's own Performance:
(a) During Project Preparation Phase
Performance of GO Pakistan during this phase has been generally satisfactory.However, in Punjab surveys carried out during project implementation revealed,that the number of private tubewells alreacly operating in the project area, mayhave been under estimated during the feasibility studies of the project,suggesting that supervision of project preparation by GO Pakistan was deficient.GO Punjab's involvement during project preparation was limited to reviewingreports prepared by consultants. No staff were specifically charged with theresponsibility of controlling quality of project preparation.
In Sindh, the technical as well as administrative approvals for project were madeavailable in advance. Appointment of PIA Consultants was made in time butdelayed a little in case of appointment of Consultants for impact evaluationstudies.
(b) During Implementation Phase:
Performance of GO Provinces during project implementation has been generallysatisfactory. It provided unwavering support to the project objectives by,inter aliaensuring timely release of funds; promptly approving the innovative changessuggested during the MTR. In Punjab, the matter of the project covenant whichrequires recovery of 30 percent of the coist of watercourse materials from thebeneficiaries, the amount actually collected remained below the required level.
The project was effectively implemented mainly because of regular review/supervision of project by the World Bank Review Mission and financial assistanceand releases, disbursements and replenishrnent.
(c) Lessons Learnt:
(i) The Borrower should take timely ac:tion to appoint consultants accordingto the project covenant.
59
(ii) To avoid cash flow problems on the project, local funds required for theproject should be made available through one source only.
(iii) Success of projects based on social participation primarily depends upon:(a) dedicated and trained team of Social Organizers/Sociologist; (b) widepublicity followed by social gatherings and feed back of the projectconcept according to local needs, and
(iv) Routine observations and updating of records by the concerneddepartments are essential for better technical studies and unhindereddelivery of incentives.
2.6 Evaluation of Bank's Performance (and Co-financiers):
(a) Effectiveness of the relationship between the Borrower and the Bank:
The success of the project is mainly due to intensive and close supervisionextended by the Bank staff in general arid by the Task Manager in particular.Valuable guidelines/ directions were available during implementation throughregular supervision missions of the Bank. MTR of the project was held well intime and the changes made in project design were definitely called for, andenabled the implementation agencies to complete the project in better interest ofbeneficiaries.
An IDA Mission carried out the review of the Project during August 1992 and helda workshop for launching the Project to facilitate effective start up of projectimplementation which helped the staff of the Government and Consultantsresponsible for implementation of the Project to understand more clearly the roleof each agency in project implementation and the actions required to be taken bythem to resolve the bottlenecks likely to arise during implementation.
Decisions taken during the Mid Term Review of the Project by IDA promotedownership of all stakeholders by stopping installation of individually ownedtubewells and this proved to be a turning point for the project.
In order to provide training to senior staff of the implementing agencies of theProject the World Bank arranged for them a tour to Mexico, to study theParticipatory Organizations that have been successfully established there for themanagement of irrigation schemes.
Supervision and review of the project was regularly carried out by the BankMissions which helped to resolve implementation problems effectively. Therelationship between the Borrower and the Bank during the evolution and theimplementation phases of the Project were effective and helpful.
There was no co-financier on the Project.
(b) Lessons Learnt: While the lessons learned from the SCARP Transition PilotProject were no doubt incorporated in the project design, an explicit provisionwas not made for social organizations and farmer outreach. Similarly, while the
60
criteria set out for award of project incentives were designed to promote equity bygiving preference to water user associations, farmer groups and small farmers,initial implementation experience indicatecl that these criteria were somewhatcomplex and cumbersome to implement.
2.7 Plan for Operation Phase of the Project
With a view to sustaining the facilities, studies and other activities undertaken during theimplementation of the project and accruing the intended benefits during the project'soperational period, a post completion plan (PCOP) is envisaged and presentedseparately for Punjab and Sindh. The detailed PCOP is available separately, of which asummary is given below:
Post Completion Operation Plan
Regarding post-completion operation plan of FOs, it is proposed that the proposedproject implementation Assistance Consultants (PIAC) will undertake an after caretraining programme comprising of following:
o Book keeping/accounting trainingo Advise on better agronomic practices to increase productivityo Advise on tubewell and soil/water management practices, and upkeep of
irrigation water delivery efficiencieso Curb monopolization of FOs by individuals, or large landholders/farmers, by the
identification of local activists, to resolve dispultes and maintain water distributionequity at the CTWs by taking measures such ais transferring the CTW land in thename the FO
o Provide a legal cover to these FOs, by studying the possibility ofincorporation/registration of these FOs under the PIDA Acts.
Physical and Environmental Monitoring
o Monitor key variables such as water table, water quality, and soil salinity, etc.o Continue operation and calibration of the Hydrogeological Modelo Continue the Impact Assessment Studies at peariodic intervals (Rabi/Kharif) by
monitoring key indicators such as crop yields, cropping intensities, etc.o Program the implementation of the Drainage Improvement Plan, and the
relocation of the remaining SCARP staff.
Facilities Created and Studies Carried out under the Project: These are as under:
(a) Facilities and Organizations Created
(i) Private Tubewells (PTWs) installed by individual farmers.(ii) Farmer Organizations (FOs) established for installation and operation of
Community Tubewells (CTWs) and subsequent management anddistribution of tubewell water.
(iii) CTWs installed and operated by WUJAs.(iv) Watercourses improved with the help of Water Users Associations
(WUAs) in Punjab sub project area in Punjab sub project area.
(b) Studies Carried Out
61
(i) Physical Monitoring of Hydrogeological Parameters including study of theeffect on soil fertility by using marginal quality groundwater.
(ii) Impact and Environmental Monitoring.(iii) Plan for Preventing Intrusion of SGW into FGW Areas.
2.8 Operational Experience To Date:
With this project's implementation, farmers have become familiar with the technology andtheir management. Facilities that were earlier available only in major towns, i.e. tubewellboring and availability of spare parts, trained mechanics, and POL have now becomingincreasingly available in the project area. The operational experience has beendiscussed in details in PCOP regarding;
- installation of private and community tubewells- maintenance of improved watercourses, land leveling and demonstration plots in
Punjab- development and training of farmer organizations
62
Borrower's Comments on the ciraft ICR
No. 280 /DGA/OFWM/DIRECTORATE GENERAL AGRICULTURE(WATER MANAGEMENT), P U N J A B
Dated Lahore, the 18/5/1998
To
Mr. Usman QamarTask Team LeaderSecond SCARP Transition Project,World Bank Resident Mission.Islamabad.
A copy of draft Implementation Completion Report of Second SCARP TransitionProject has been received through Ministry of Finance and Economic Aflfairs (Economic AffairsDivision). Islamabad This is found to be a very comprehensive document which focuses allaspects of the project. Efforts of the team preparing it are, therefore, commendable.
The finding that FOs established under the project are in their infancy stage and need for continuation ofafter-care and training programs is duly endorsed Assistance from the Bank will help to ensure their sustainability.Continuation of project activities with enhanced scope under the IDA assisted Punjab Private Sector GroundwaterDevelopment Project can support viability of the Farmer Institutions established under SSTP as well. After-care/training support program of the former scheme should, therefore, adidress the needs for later project.
As regard the recovery of cost of construction material is concerned, it is being actively pursued. It isanticipated that as the recovery plan, jointly prepared by OFWM and revenue staff, reaches to its final stages ofimplementation, satisfactory recovery level would be achieved.
The key lessons learned during project implementation, as indicated in the ICR, like: ensuring qualitycontrol with involvement of all stakeholders, effective social mobilization program along with multi-disciplinaryapproach, training of = farmers, consideration for developing credit lines to help small farmers to pay up-frontcontributions, internal and external monitoring impact evaluation right front the initiation of the project, continuityof competent and motivated key project staff, etc. would help in better designing of future projects of this kind.
There are, however, no specific comments on the above said Implementation Completion Report.
Sd/-DIRECTORATE GENERALAGRICULTURE (W M.)
63
From: Shafqat MasoodProject DirectorSecond SCARP Transition ProjectI&P Departnent, GO PunjabLahore.
To: Mr. Usman QamarProjects AdvisorWorld Bank Resident MissionIslamabad.
No: 983/T-61 Date 21-4-98
Subject: COMMENTS ON IMPLEMENTATION COMPLETION REPORT (ICR)- SECOND SCARP TRANSITION PROJECT (CREDIT 2257-PAK)
This is to inform you that ICR as received has been reviewed. It is a useful document which contains all necessaryinformation about the project. Some minor amendments were conveyed to you on telephone and we have no furtherobservations to offer.
-sd-PROJECT DIRECTOR
SECOND SCARP TRANSITION PROJECT2204281150 PDLTRS DOC/ma
64
NO: WR (W. W) 12 (P&D) 1/88GOVERNMENT OF SINDH
PLANNING AND DEVELOPMENT DEPARTMENT(WATER & POWER SECTION)
KARACHI DATED 24THAPRIL. 1998.To,
Mr. Usman Qamar,Task Team Leader,SSTP, World Bank Mission,
I am directed to refer to your letter dated 31-3 -1998 or the subject cited above, and to state that thisdepartment endorses the comments of the Project Director, SCARP North Rohri on the subject matterwhich were Communicated to you vide their letter No.PD/SNR/DB/370 dated 10-4-1998 (copy isenclosed for your ready reference). As regards, the status of implementation of the post completionOperation plan(PC-I) it is stated that the I&P Department forwarded the PC-I for physical andEnvironment
As regards, the status of implementation of the post-completion operation plan (PC- I) it is stated that, theP&D Department for approval but some discrepancy were found in the PC-I after examination in light ofWorld bank's Aide-memoire (Nov: 1997). The cost was also on higher side therefore the same wasreturned to I&P Department on 15-4-1998 for resubmission on realistic basis.
copy is forwarded to the:
1. Secretary I&P Department, Govt. of Sindh w.r to their
letter No.10/255-SO(Dev)/90-Vol-II dt. 14-4-1998.
2. The Provincial Coordinator - NDP, Deptt. Karachi.3. PS to ACS (Dev:) P&D Department.
ASSISTANT CHIEF (W&P)
65
NO:PDISNR/DB/ 370Office of the Project Director
SCARP North fRohri,Nausheroferoze, dated April 10, 1998.
To
The Chief Engineer, Irrigation Development in Sindh, Hyderabad.
Subject: SECOND SCARP TRANSITION PROJECT (CR.2257.PAK)DRAFT IMPLEMENTATION COMPLETION REPORT (ICR}
Reference: World Bank letter dated March 31,1993.
The First Draft of the iCR of the above Project received from Mr. Usman Qamar Task Team Leader,SSTP World Bank vide his letter referred to above addressed to me and others alongwith copy to you andall concerned, have been reviewed and I offer my comments as under:
i) A consolidated Borrower's evaluation report 10-11 Pages covering both Punjab and Sindh Sub-Projectsincluding the post completion operational plan to be included in the implementation completion report(ICR) prepared by Mr. Altaf lqbal, Consultant World Bank for ICR received vide his letter of April 01, 1998addressed to me with copy to Mr. Usman Qamar World Bank and all others (copy attached) have beenreviewed and is found appropriate for inclusion as appendix B in the ICR with the following corrections:
Page l: in Para 1.1 in the last line the year 1968 may be Corrected as 1978 and figure ofgrass area may be corrected as 0.725 million acres instead of '.326 millionacres.
Page 4: At She end of Para 2.2 after the world closed add the following "However inaddition of CTW's in Sindh option of allowing subsidy for private tubewellsinstallation was continued in view of the poor, socio-economic conditions.
Page 4: in line 13 of Para 2.3 after the world (WUAS) add word "in Punjab'.Page 5: Under Para 2.3 (iii) last line may be corrected as "In view of the different socio
economic conditions in Sindh only 428 CTWs out of 477 targeted and 343 privatetubewells of 1 cusec capacity could be installed. Total tubewells of one cusecwas proposed as 719.
Page 6: in line 6 Para (iv) delete the worlds "expected to be".ii) As regards the status of implementation of the post completion operation plan,
the PC I for covering out the different physical monitoring, impact evaluation and environmentalstudies have been prepared and submitted to Planning and Development Deptt: Govt: of Sindhby Irrigation & Power Deptt: in January 1998. The approval of the same is still awaited.iii) The draft ICR is a complete, up to date and informative documents and needs no further commentsexcept that 8t Page V of She ICR in She first Para under heading introduction the floured. 280 STWs maybe corrected as 382 STWs.
This is for your kind Information and further necessary action for transmitting to
World bank and other concerned quarters.(N. M. MATHRANI)
PROJECT directorSCARP NORTH ROHRI
NAUSHEROFEROZE, SINDHCopy to:Mr. Usman Qamar, Task Team Leader, SSTP, World Bank Missions Islamabadfor inform at ion.
Subject: SECOND SCARP TRANSITION ProjectDRAFT IMPLEMENTATION COMPLETION R'EPORT
Dear Sir,
Kindly refer to your letter of March 31, 1998 regarding comments of ADBP on the DraftImplementation Completion Report (ICR) and to inform you that paras No. 13-18 and 22 of thedraft ICR pertaining to ADBP do not need any modification.
The ADBP do net endorse ICR views at para Nos 26 under the head Major Factors Effecting theProjects The staff of ADBP tried their best to integrate the activities. Meetings were organizedfrom time to time to improve coordination between the project staff f of the agencies . MCO's andother staff f of ADBP attended the designated meetings of project management cells andextended all efforts for proper implementation of the Project. Some basic reasons for the weakperformance of the project nave been already elaborated in paras 13 and 22 of the ICR. The otherfactors which adversely affected ADBP's performance were that (i) The project was confined tospecific villages (ii) The list of farmers provided by the local project coordinator covered ADBPdefaulters to whom ADBP was not able to finance (iii) Highest amount of subsidy given byGovernment for tubewell installation,
Despite all these factors we are of the view that the tubewell installed under this project hadhighly beneficial effect on expansion of agriculture in these areas and sharp increase in farmproduction and income of rural people. Anyhow the above factors have provided lessons for usfor better completion of future projects.
Yours faithfully,(RIAZ MEHMOOD QURESHI)( Director T&D)16/4/98
1. At appraisal, it was assumed that the project would increase agriculturalproduction through: (i) replacement of STWs with PTWs that would provide more timely andreliable water supply; and (ii) improvements of watercourse and precision land leveling, thatwould reduce water losses and increase irrigation efficiencies. It was also assumed that: theproject would result in a higher growth of PTWs; cropping intensities and crop yields will behigher as compared to the without project situation; and farms not installing PTWs would have adecline in cropping intensities and crop yields, as STWs become derelict.
2. The table below shows that in Punjab the actual growth of PTWs not supported by theproject was much higher than projected at appraisal. In fact, there are reasons to believe that thegrowth of PTWs in the project area would have been even higher without the project resulting inover-investment. The CTWs serve an average of about 16 farners, have higher utilizationfactors, and lower unit pumping costs (see Tables 3 and 4 ). The CTWs thus curbed the growthof non-project PTWs. The situation in the Sindh project area is different. Only about 250 PTWswere installed by farmers without project support during the 6 years of project implementation.This suggests that the growth of PTWs would have been small without the project.
Incremental No. 3,900 540 12,800 250of PTWs withoutproject by year-6I/ During the MTR, for Punjab the target of PTWs was reduced to 2,600, and provision was made for 2,100 CTWs.For Sindh, the overall target for tubewells was not changed but a target of 475 CTWs was fixed.
Agricultural benefits
3. Punjab. The overall cropping intensity in the Punjab project area increased from 141percent in 1992/93 (baseline) to 159 percent in 1996/97. Overall yields of major crops increased(wheat by 7.6 percent, rice by 8.6 percent, and sugarcane by 5.4 percent). Given the high naturalgrowth of PTWs (unsupported by the project) these increases in cropping intensities, and cropyields are not attributable to the project interventions only. Since the monitoring and evaluationstudies could not identify appropriate control groups, the benefits of project interventions have
68
been estimated as follows:
* Benefits from Watercourse improvement. The main agricultural benefits of the projectarise from water savings from watercourse improvements. Studies carried out as part of pastwatercourse improvement projects and ICR mission's estimates are that watercourseimprovements result in increase of about 26 percent increase in on-farm water supplies,which in turn increase cropping intensities by 1-17 percent and crop yield increases (9percent for rice, 4-63 percent for wheat, 5 to 10 percent for cotton, and 14 to 21 percent forsugarcane, 4 percent for fruit, and 6 to 46 percent for fo'dder. About 525 watercourses out ofthe total 1,800 watercourses in the Punjab project area were improved under the project. Aconservative estimate is that these improvements resulted in about 3 percent increase incropping intensity as compared to the without project. Benefits of yield increases have notbeen taken in to account because of lack of a suitable control group.
* Benefits from Private and Community Tubewells. Monitoring and evaluation studiescarried out under the project indicate that the growth of non-project supported PTWs in thePunjab project area was much higher than estimated at aLppraisal. During FY91/92 to 1997/98about 12,800 PTWs were installed in the project area without project support. In view of thissituation, no incremental agricultural benefits due to project supported PTWs/CTWs havebeen attributed to the project.
4. Sindh. Impact evaluation studies indicate that the overall cropping intensity in the Sindhproject area increased from 130 percent in 1992/93 (baseline) to 147 percent in 1996/97. Overallyields of major crops increased (wheat by 14 percent, rice by 12.6 percent, cotton by 33 percentand sugarcane by 19 percent). As for Punjab, the monitoring and evaluation studies could notidentify appropriate control groups. The without project scenario has been synthesized from datacollected during the ICR mission for farms relying on canal[ water only and those using tubewellwater. The future cropping intensity with project is estimalted to be 5 to 10 percent higher thanwithout project. As for Punjab, no crop yield increases are attributed to the project because oflack of a suitable control group. Declines in cropping intensities and crop yields of farms notinstalling PTWs without project have also not been taken into account.
5. Based on the above analysis the appraisal and ICR estimates for cropping intensities andyields, and incremental production are summarized below:
6. At appraisal ERRs were estimated at 24 percent for the Punjab subproject, 20 percent forthe Sindh subproject and 24 percent for the overall project. The following assumptions were usedin the analysis:
a) About 13,000 farms in Punjab and 1,800 in Sindh were expected to invest in installationof project supported tubewells. Over 80,000 farms families in Punjab and 4,600 in Sindhwere expected to benefit from the project as a result of joint PTWs ownership and sale oftubewell water.
b) Decline in yields without project due to deterioration of STWs was not taken intoaccount;
c) Project life was assumed to be 20 years. Full development of benefits was assumed in thetenth year. Replacement cost of PTWs investments was included in the tenth year;
d) O&M of STWs and PTWs were taken into account in the analysis.
e) All project investment costs net of taxes and duties, and incremental crop productioncosts were taken into account.
f) Economic farm gate prices for traded goods were valued at import parity for wheat,maize, and fertilizer, and at export parity for rice, cotton, and sugar cane. Adjustmentswere made for freight, handling, processing and quality differentials. Prices of non-tradedinputs and outputs and wage rate for labor were expressed in economic terms by applyinga standard conversion factor (SCF) of 0.9.
7. The economic analysis undertaken to re-estimate the ERRs is based on thesame assumptions as in the SAR except that:
i) All cost and benefits have been expressed in June 1997 constant prices; actualexpenditures have been restated in FY97 constant prices by using the MUV indices.Local costs and unskilled labor have been adjusted to economic prices by applying a SCFof 0.9. Economic prices used in the analysis are given in Tables 1& Table-2.
70
ii) In Punjab, without the project the STWs would gradually deteriorate and close by theyear 2001-02.
iii) In Sindh, at start of the project-1992-93, 238 STWs out of 382 STWs were not in anoperational condition, therefore, closure under without project is assumed similar to aswith project.
iv) It is assumed that without the project 2 to 3 PTWs wiould have been installed in place ofeach CTW installed under the project.
v) No increase in the groundwater supplies is attributed to the project.
Economic Benefits
8. The economic benefits of the project include agricultural benefits, and benefits of STWsreplacement with PTWs and CTWs. These are summarized below for Punjab and Sindh.
9. Agricultural Benefits.
Punjab.
* Benefits from Watercourse improvement: T;hree percent increase in croppingintensity as compared to the without project (see para 3).
* Benefits from Private and community tubewells. No incremental agriculturalbenefits due to project supported PTWs/CTWs have been attributed to the project(see para 3).
Sindh
* Cropping intensities 5 to 10 percent higher than without project (see para 4).
10. Benefits of STWs Replacement with PTWs and CTWs.
Punjab and Sindh
* Replacement of STWs with PTWs yields subsitantial economic benefits because oflower pumping costs of PTWs. The benefits are even higher if STWs are replacedwith CTWs, which have higher utilization rates and lower investment costs thanPTWs for equivalent pumpage (see Table 3 and 4). Without the project, STWs wouldhave been replaced with PTWs. Therefore, incremental benefits accrued as theproject supported CTWs, following the MTR.
I1. The re-estimated ERRs are summarized below for the Project as originally designed aswell as after restructuring as completed:
