Announcement of Fifty-Eight Million Dollars Credit for an Irrigation Project in India on September 8, 1977

•World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: ('>02) 393-6360 IDA NEWS RELEASE NO. 78/10 SEPTEMBER 8, 1977 $58 MILLION CREDIT FOR AN IRRIGATION PROJECT IN_INDIA The International Development Association (IDA), an affiliate of the World Bank, today announced the approval of a credit of $58 mill ion for an irrigation project in India's Orissa State. The $116 million project will help to utilize the numerous small rivers in Orissa for providing irrigation to about 66,000 hectares throughout the State. It will also improve water use efficiency in three existing major irrigation schemes in the State. Agriculture is dominant in Orissa's econcmy, contributing about 60% of total domestic product. About 80% of the State's population of 26 mill ion depends directly or indirectly on agriculture, and about 75% of the work • force is engaged in it. The previous· concentration of Orissa's irrigation development in the delta areas of the large rivers has resulted in regionally unbalanced growth. In order to correct this imbalance, the State is con- structing several medium irrigation projects in areas where large irrigation or groundwater development is not feasible. The project being assist~d by the IDA credit includes about 15 medium-scale irrigation works, development of the command areas of three existing major irrigation systems (land con- solidation and on-farm development). At fu11 development, the project wi.ii help increase foodgrain produc- tion by 110,000 tons a year and generate about 43,000 ~, 'itional full time jobs in farm and non-farm sectors. The increased foodgrain production is valued at $20 million annually. Net farm incomes will increase substantially. The IDA credit to the Government of India is for 50 years, including 10 years of grace. It is interest free, except for service charge of 3/4 of 1% to meet IDA's administrative costs. -0- • NOTE: Money figures are expressed in US dollar equivalents. FOAM NO. 1121 (5-76) T E C HN I CAL DA TJt' PROJECT: COUNTRY: TOTAL COST: Orissa Irrigation India $116 • FI NANC l·NG: $58 million, standard IDA terms OTHER FINANCING: Govern·ment of Oriss:-:1, the Agricultural Refinance and Development Corporation of India, participating banks and farmers. IMPLEMENTING ORGANIZATION: Agricultural Production Commi~sioner Government of Orissa Bhubaneswar, Orissa India PROJECT DESCRIPTION: The Project consists of: (a) over the next five years, con- struction of about 15 medium-scale irrigation projects (MIPs) (MIPs are irrigation projects that encompass cultivable command areas covering between 2,000 and 12, 000 ha. (b) command area development (CAD), over a four-year period, in three existing major ~ irrigation projects located in Orissa (Mahanadi Delta, Hirakud, Salandi), consisting o~ (i) land consolidation covering about 200,000 ha; (ii) on-farm works, including construction of field channels, drains, and structures covering a area of about 57,000 ha. PROCUREMENT: Civil works for medium-scale irrigation projects ($67.6 mill ion) will be labor-intensive, relatively small, and restricted to seasonal construction. These will be carried out by local contractors. The remaining works will be executed under small unit price contracts and by force account. ECONOMIC RATE OF RETURN: 20% ESTIMATED COMPLETION DATE: 1984. - 0 - •