Announcement of Fifty Million US Dollars for Chico River Irrigation in the Philippines on March 25, 1976

.World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 76/27 March 25, 1976 $50 MILLION FOR CHICO RIVER IRRIGATION IN THE PHILIPPINES The World Bank has approved a loan of $50 mil lion for the Philippines, to help finance the Chico River Irrigation project in the potentially rich rice-gro..ving Cagayan Valley of Northern Luzon. The project is designed to implerrent Stage I of a larger nine-year irrigation program and supports the Government's major objective of increasing rice production and of improving the incomes of small farmers. It will also help to achieve national self-sufficiency in food grains and strengthen the balance of payrrents. The project features an important element for improvement of provincial roads in the area adjacent to the Magat Multipurpose Project, financed by the Bank in 1975. Rehabilitation of existing irrigation systems and construction of new facilities \Nill help to increase productivity through expansion of the irrigated area and an intensifi- cation of cropping. The road program wi 11 improve access links to existing highways. The main components of the project are the Irrigation Development including: construction of a diversion dam and intake works on the Chico river and a catch dam and intake works on Talaca cre,~k; rehabi 1 itation of the existing National Irrigation • Administration (NIA) irrigation system and construction of drainage facilities; con- struction of new irrigation and drainage facilities for approximately 3,200 hectares (haJ of small communal irrigation systems and for a further 3,200 ha.of small pump irrigation systems;construction of ne\f.t irrigation and drritnage facilities for 11,900 ha.of presently rain-fed land; and the procurement of vehicles and equipment. The Provincial Road Program includes, improvement of 35 kilometer (km) of the Roxas-Gamu road; improvement of 11 km.of the Cabatuan-Cauayan road; and improvement of 18 km.of the San Mateo-Alicia road. The project also provides for preparation by NI A of a feasibility study of Stage I I irrigation, and technical assistance for an erosion control study of the Magat and Pampanga river catchments, and a system to monitor production inputs and other irrigation project benefits. The i rri gat ion component wi 11 be imp 1emented by NI A, and the road compor1ent by Department of Public Highways. The project provides for better water control and agricultural supporting services. Dry season irrigation will be increased from 5,000 ha. to 17,000 ha. at full development, and wi 11 provide the equivalent of about 4,700 full time jobs. Paddy production in the project area will increase from the present level of 50,000 tons to 147,000 tons per year and provide enough rice to feed 600,000 persons per year. It is calculated that net foreign exchange savings wil 1 be about $20 mill ion per year at world market prices. The improved irrigation wi11 directly benefit about 8,000 farm families and 2,000 landless families, in effect - some 55,000 people. The World Bank loan of $50 million is being made to the Republic of the • Philippines for a term of 25 years, including a six-year grace period, with interest at the rate of 8.5 percent per annum. Note: Money figures are expressed in U.S. dollar equivalents. Form No. 1121 (9-75) PROJECT: T E CHNI CAL DATA Chico River Irrigation - (Stage I) • COUNTRY: The Republic of the Philippines TOTAL COST: $84 mi 11 ion BANK FINAi.~CING: $50 mi 11 ion, for a term of 25 years, including a six- year grace period, with interest at 8.5 percent per annum annum OTHER FINANCING: The Government of the Philippines IMPLEMENTING ORGANIZATION: The Nati ona 1 I rri gat ion Administration (NI A), Quezon City, Philippines wi 11 implement all components of the project except the provincial road program. The Department of Public Highways (DPH), Maniia, Philippines which prepared the feasibility report, has responsibility for implementation of the roads element o_f the project. PROJECT DESCRIPTION: The Chico River Irrigation project - Stage I has two main elements: i rri gat ion deve 1opment and a p rovi nci a 1 road • program. Existing systems will be upgraded, and irrigation service to the (presently) rain-fed rice lands will be expanded to serve a total of 19,700 ha. The road program wi 11 improve about 65 km.of provincial roads in the area, which is adjacent to the Bank- financed Magat Multipurpose project (1975). PROCUREMENT: (a) Equipment and vehicles for force account construction, operation and maintenance, the erosion control study and the input and output monitoring programs costing about $3.3 million wi 11 be procured after international competitive bidding in accordance with World Bank Guidelines. A preference 1 imited to 15 percent of the c.i .f. price of imported goods, or the level of customs duty, whichever is the lower, will be extended to local manufacturers in the evaluation of bids. (b) Civil works contracts for the Chico diversion dam and main diversion canal will also be on the basis of international competitive bidding. (c) Other civi 1 works will be on the basis of competitive bicic..iing in accordance with local procedures. (d) The three roads wil 1 be advertised in one package (under international competitive bidding procedures) with the option to bid -0n one or all three roads. CONSULTANTS: NIA will employ consultants to assist with the erosion control study (65 man-months), to assist in fcrrnulating and im- plementing the input monitoring program (20 rnan-months) and to advise on a survey program to monitor project benefits and assist in the implementation of the program ( l O man-months) . ECONOMIC RATE OF RETURN: Irrigation: 15% Pro v i n c i a 1 roads : ESTIMATED COMPLETION DATE: 1982 17% • -0-