Nepal - Narayani Zone Irrigation Development (Stage Two) Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No.- 2067a-NEP FI'LE CO04Y NEPAL STAFF PROJECT REPORT APPRAISAL OF THE NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE II PROJECT September 18, 1978 South Asia Projects Department Agriculture Division C 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.  CURRENCY EQUIVALENTS US$1.00 = NRs 12.00 WEIGHTS AND MEASURES (METRIC SYSTEM) 1 meter (m) = 3.28 feet 1 kilometer (km) = 0.62 miles 1 hectare (ha) = 2.47 acres 3 1.50 bighas 1 million cubic meters (Mm 3 810 acre-feet 1 cubic meter per second (i /s) = 35.31 cubic foot per second 1 metric ton - 2,205 pounds FISCAL YEAR July 16 - July 15  PRINCIPAL ABBREVIATIONS AND ACRONYMS USED FOR OFFICIAL USE ONLY ADBN - Agriculture Development Bank of Nepal AETD - Agriculture Extension and Training Division AIC - Agriculture Inputs Corporation AO - Agricultural Officer ATO - Agricultural Training Officer BLGP - Bhairawa-Lumbini Groundwater Project BRVPD - Bihar River Valley Projects Department CE - Certainty Equivalent - DA - Department of Agriculture DADO - District Agricultural Development Officer DBC - Don Branch Canal DDG - Deputy Director General DIHM - Department of Irrigation, Hydrology and Meteorology EPAD - Evaluation and Project Analysis Division ED - Engineering Division ERR - Economic Rate.of Return EV - Expected Value FGD - Farm Group Development GM - General Manager GOI - Government of India HMGN - His Majesty's Government of Nepal HYV - High Yielding Variety ICB - International Competitive Bidding JT - Junior Technician JTA - Junior Technician Assistant LCB - Local Competitive Bidding MFAI - Ministry of Food, Agriculture and Irrigation NEC - Nepal Eastern Canal NFC - Nepal Food Corporation NZIDB - Narayani Zone Irrigation Development Board O&M - Operation and Maintenance OER - Official Exchange Rate PLA - Panchayat Level Assistant REC - Rice Export Co. SAO - Senior Agricultural Officer SATO - Senior Agricultural Training Officer SCF - Standard Conversion Factor SMIDB - Sunsari-Morang Irrigation Development Board SMS - Subject Matter Specialist Stage I - Birganj Irrigation Project (Narayani Zone) T&V - Training and Visit WUG - Water Users' Group GLOSSARY Main Secondary Canal - supplies water to four or more branch secondary canals Secondary Canal - serves about 200-600 ha Tertiary Canal - serves about 40-50 ha Field Channel - serves about 10 ha Paddy - unhulled rice Panchayat - village-level administrative unit Nala - natural drain This document has a restricted distribution and may be used by recipients only ini the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.   NEPAL NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE II PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. I. BACKGROUND ......................................... 1 The Development Scene ......................... 1 The Agricultural Sector ....................... 2 The Irrigation Sub-Sector ..................... 4 Project Formulation ........................... 6 II. THE PROJECT AREA ................................... 7 Location ...................................... 7 The Nepal Eastern Canal ....................... 7 Birgani Irrigation Project (Stage I) .......... 8 Natural Resources ............................. 9 Cultivation Practices ......................... 10 Agricultural Supporting Services .... .......... 11 Socio-Economic Conditions ..................... 12 III. THE PROJECT ........................................ 14 Project Concept ............................... 14 Main Project Features ......................... 14 Detailed Features ............................. 15 Water Demand and Supply ....................... 19 Engineering Designs and Construction Methods .. 20 Implementation Schedule ....................... 20 IV. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .......... 21 Cost Estimates ................................ 21 Annual Expenditures ........................... 23 Financing Plan ................................ 23 Procurement and Contracts ..................... 23 Disbursement .................................. 24 Accounts and Audit ............................ 24 V. ORGANIZATION AND MANAGEMENT ........................ 26 Project Boards ................................ 26 Field Management .............................. 26 Organization of Community Tubewells .... ....... 27 Farmers' Organization ..... ....................28 This report is based on the findings of a Bank mission which visited Nepal in September 1977, comprised of Mr. C.M. Bolt and Ms. M.C. Nguyen (Bank); and Messrs. M. Barber and R. Baskett (consultants). Mr. D. Benor and Mr. Ityel (consultants) visited Nepal in March 1977 to prepare/appraise the agricultural extension component in collaboration with Messrs. Karmacharia and Mishra (consultants) of the Agricultural Projects Services Center, Kathmandu.  - ii - Table of Contents Page No. Operation and Maintenance ..... ................ 28 Agricultural Extension, Training and Research . 29 Staffing and Training ...... ................... 31 Monitoring and Evaluation ..... ................ 32 VI. AGRICULTURAL PRODUCTION, MARKET PROSPECTS AND PRICES 33 Cropping Pattern and Yields ................ 33 Agricultural Production ........................ 34 Input Requirements ............................. 35 Market Prospects ............................... 35 Prices ......................................... 36 VII. FINANCIAL ANALYSIS .................................. 38 General ........................................ 38 Farm Budgets ................................... 38 Distribution Effect ............................ 39 Cost Recovery .................................. 40 VIII. BENEFITS AND JUSTIFICATION .......................... 44 General .44 Production Benefits .44 Employment Benefits .44 Intangible Benefits .45 Environmental Effect .45 Economic Evaluation .45 Sensitivity and Risk Analysis .45 IX. RECOMMENDATIONS ..................................... 47 LIST OF TABLES 3.1 List of Civil Works 3.2 List of Equipment and Vehicles 3.3 Consultant Requirements 3.4 Water Demand and Supply 4.1 Summary of Estimated Project Cost 4.2 Estimated Annual Cost of Operation and Maintenance 4.3 Estimated Cost of Agricultural Extension and Training 4.4 Estimated Annual Expenditure 4.5 Credit Allocation and Disbursement Schedule 6.1 Cropping Pattern, Yields and Production 6.2 Crop Input Requirements 7.1 Farm Budget Analysis 7.2 Estimates of Project Rent 8.1 Economic Incremental Benefits 8.2 Economic Cost and Benefit Streams  - 3iii - Table of Contents LIST OF FIGURES 3.1 Construction Schedule 3.2 Implementation Schedule - Agricultural Extension and Training 5.1 Agricultural Extension Organization Chart 5.2 Project Organization, Stage II 5.3 Training Organization 6.1 Crop Calendar LIST OF ANNEXES 1. Draft Provisional In-Service Training Program 2. Monitoring and Evaluation 3. Basis for Economic Analysis 4. Related Documents and Data Available in the Project File LIST OF MAPS IBRD 13527 - Project Location IBRD 13537 - Nepal Eastern Canal Command Area IBRD 13648 - Agricultural Extension Services Districts   NEPAL NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE II PROJECT STAFF APPRAISAL REPORT I. BACKGROUND The Development Scene 1.01 Nepal is confronted by a formidable set of development constraints. The problems of a rapidly growing population (2.1% annual growth rate) and limited exploitable resources are compounded by the difficulty of being land- locked. The country is divided physically into three broad ecological zones: the Mountains, the Hills, and the Terai, a northern extension of the Indo- Gangetic Plain. These three iones cover respectively 15, 68 and 17% of the total land area of 141,000 km . The steep topography of most of the country has severely limited the availability of land for productive farming. Per capita production in the Hills has declined due to the extension of cultiva- tion into marginal land. This has increased the rate of migration to the Terai. Pressure on land has, therefore, been rising at an alarming rate, and Nepal's grain exports, mainly produced in the Terai, have declined from an annual 500,000 tons in the early 1960's to 200,000 tons during the last few years. In 1977/78, Nepal's grain exports are expected to reach only 70,000 tons. 1.02 Population of Nepal is now estimated at about 13M, of which 96% are in rural areas. About 60% of the population live in the Hills, which contain only 10% of the agricultural land and where the density (930 persons/ per arable km ) is higher than in neighboring Bangladesh. In contrast, the Terai is only one-third as densely populated as the Hills, the average farm (1.7 ha) is about four times the size of that in the Hills (0.4 ha). Nation- wide, poverty remains acute and per capita income is estimated at US$120 (in 1977 prices). Nutritional levels are low in the Hills and Mountains, but are much higher in the Terai. In 1975, local production of major crops was suffi- cient to maintain minimum subsistence standards 1/ for only about six months in the Mountains and eight months in the Hills. In the Terai, production was sufficient for about eighteen months. Health and education facilities are generally inadequate. At present, only about 19% of the population are literate. 1.03 The major objectives of the agricultural development efforts of His Majesty's Government of Nepal (HMGN) are to raise agricultural production, to increase employment opportunities for the rural poor and to accelerate the country's export earnings. Although long-term development plans aim at reduc- ing income inequality between the Mountains, Hills and Terai, in the near term 1/ Estimated at 2,000 calories per person per day for the Hills and Terai, and 2,200 for the Mountains because of higher altitude.  -2 there is a more urgent need to increase agricultural production, particularly of foodgrains, to feed the growing population. Because of their isolation, the Hills and Mountain areas present particular difficulties in the achieve- ment of these short-term aims. The scope for agricultural development is much more favorable in the Terai, where there is considerable irrigation potential, communications are relatively well developed, and farm holding sizes are sufficient to enable a marketable surplus to be grown. Meeting the pervasive needs in the Hills calls for a different, more comprehensive approach. The extreme poverty there requires lower cost solutions to agricultural develop- ment and the provision of basic, vital social services. The vehicle for this approach is becoming the integrated rural development program. IDA is under- taking one project in two districts, and another covering additional districts is under preparation. Other donors in the Nepal Aid group are undertaking similar programs in other Hill districts. The Agriculture Sector 1.04 Agricultural Development. Nepal's economy is largely dependent on the agricultural sector. Farm production and related activities account for about 65% of GDP, 89% of the labor force and 80% of all exports, mostly food- grains. Nepal has a gross area of 14.1 M ha of which only about 2.3 M ha is cultivable. Paddy accounts for 51% of the total cropped area; maize 19%; wheat and other cereals 16%; and other crops including oilseeds, pulses, jute, potatoes, sugarcane, tobacco and horticultural crops 14%. Performance over the last twelve years has been disappointing. Growth in agricultural production, hardly above the rate of population increase, comes primarily from area expansion, which is limited, rather than improvements in land productivity. The most noticeable increases are areas under wheat (10% p.a.) and potatoes (5.4% p.a.), mostly in the Terai. Yields of all crops have either stagnated or declined over the last twelve years. This is due to (i) increasing cultivation in areas of marginal productivity; (ii) soil denudation; (iii) the lack of suitably adapted technology, particularly for Hill agriculture; and (iv) institutional constraints such as lack of trained manpower. In view of the limited scope for further area expansion, future growth in agricultural pro- duction will depend virtually on yield improvement. This is attainable, particularly in the Terai, provided there are effective extension services, reliable irrigation supplies and adequate drainage at the farm level. 1.05 Agricultural Institutions: HMGN has three Ministries dealing with agriculture: Ministry of Food, Agriculture and Irrigation (MFAI); Ministry of Land Reform; and Ministry of Water and Power. Irrigation projects are the responsibility of the MFAI which includes the Department of Irrigation, Hydrology and Meteorology (DIHM), the Department of Agriculture (DA), and the Department of Food and Agriculture Marketing Services. The Ministry also has overall responsibility for a number of public sector corporations which include the Agriculture Inputs Corporation (AIC), Agriculture Development Bank of Nepal (ADBN), Nepal Food Corporation (NFC), and the Groundwater Development Board. In general, like many other government agencies, agricultural insti- tutions suffer from lack of trained staff and poor distribution of services throughout the country.  -3- 1.06 Agricultural Extension Service: The DA's Division of Agricultural Extension and Training operates a countrywide agricultural extension service through offices located at regional, district and panchayat (village) levels. The extension staffs' main functions are to provide farmers with advice on improved farming practices, to introduce high-yielding improved varieties (HYV), and to guide farmers in the selection of suitable cropping patterns. Their effectiveness is seriously hampered by inadequate agriculture training, and the lack of communication, transportation, and housing facilities at the village level. In addition, there is little coordination between research and extension activities and, as a result, the extension service has little to offer. A pilot agricultural extension scheme employing the Training and Visit system (T&V) in Bara and Parsa districts in Nepal has demonstrated that extension effectiveness can be improved through strengthening the organization and the linkages with research (para 2.15). Based on similar concepts, HMGN intends to reorganize extension services throughout the country. 1.07 Agricultural Research and Training: The DA carries out research mainly in food crop production in a large research complex near Kathmandu and twelve smaller stations dispersed throughout Nepal. Some agriculture research stations are also national crop development headquarters 1/. The United States Agency for International Development (USAID) has supported research in cereal improvement based on high yielding wheat from India and rice from the Philippines. The United Nations Development Program, in conjunction with the International Maize and Wheat Improvement Center, is also assisting with a high protein maize program. With technical assistance from USAID, the Institute of Agriculture and Animal Science of Tribhuvan University is respon- sible for formal agricultural training of extension workers. The Institute also provides vocational training for agricultural teachers and in-service training for leading farmers. Recently, research stations have also been involved in training activities for extension workers and farmers. This service is generally inadequate, however, due to the lack of experienced instructors and training facilities. 1.08 Agricultural Inputs Supply: The AIC is mainly responsible for the marketing of fertilizers, seed, pesticides, and agricultural equipment. The AIC distributes these inputs to cooperative societies, village committees or other public organizations and private traders, fixes retail prices for all inputs, and is responsible for input storage. Sales have, however, been sporadic due to poor distribution of services, and Government has recognized the need for more timely supply of basic inputs and services at the village level. The Sajha (cooperative) movement established in 1975 has been entrusted with the task of undertaking country wide sales of agricultural and general merchandise as well as marketing and credit services for its members. On average, each Sajha serves about 2-3 panchayats and is assisted by a paid manager, trained and seconded by ADBN. 1/ The national development programs for paddy, maize, jute and wheat have their headquarters at Parwanipur (in the proposed project area), Rampur, and Tarahara Agriculture Stations, and Bhairawa Agriculture Farm (in Bhairawa-Lumbini Groundwater Project), respectively.  -4 - 1.09 Agricultural Credit: The ADBN is the main source of institutional credit. ADBN provides short, medium and long-term loans to individual farmers, cooperatives and dealers engaged in agricultural production. Farmers owning 6 ha of land or more can go directly to ADBN for seasonal loans, while those owning less can obtain such loans through Sajha cooperatives. Current annual interest rates vary between 2% and 14% depending on the category of borrower and purpose. In FY76, overdues amounted to about 20% of loans outstanding. However, ADBN's overall performance in its many responsibilities has been satisfactory. Until recently the two commercial banks in Nepal (The Nepal Bank and the Rastriya Varijya Bank) had not been lending for agriculture. Although they were directed in 1974 to invest at least 7% of their total deposit liabilities in. agriculture, their current involvement is still limited. Lending from private sources is widespread, providing about 80% of the total agricultural credit, often at much higher interest rates. 1.10 Marketing and Transportation: Domestic marketing services in Nepal are not well developed, particularly in the Hills, due to the lack of roads, telecommunication systems, and warehouses. Since the late 1960's, several public sector organizations have been established for marketing major farm products. These include Nepal Food Corporation (NFC), Rice Export Companies (REC), National Trading Ltd., and Jute Development and Trade Corporation (JDTC). Officially, export of farm produce is exclusively the responsibility of these organizations which also fix export and domestic prices. In practice, however, since the Indian border is open, extensive free trading occurs, for which no reliable data is available. The Irrigation Sub-Sector 1.11 Water Resources Utilization: Nepal has abundant water resources, including major rivers with annual average discharges totaling 150 billion m and capable of irrigating 6 to 8 M ha. However there are only about 1.3 M ha of land suitable for irrigation in the country. Exploitable groundwater resources, which are largely concentrated in the Terai, could provide tube- well irrigation for about 0.4 to 0.6 M ha. The total irrigation potential is therefore less than 2 M ha. Utilization of water resources for irriga- tion is limited by several factors: (i) there are few reliable sources of perennial surface water for year-round irrigation except for the eight major rivers; 1/ (ii) these large rivers are costly to develop particularly for relatively small command areas which are typical in the Terai; (iii) heavy sedimentation in riverbeds creates considerable problems in construction, operation and maintenance of irrigation systems; and (iv) power supplies to energize tubewells are severely restricted in extent and amount. At present, only about 300,000 ha (about 23% of the potential surface irrigable area)are provided with some form of irrigation, of which about 150,000 ha are under public schemes. 1/ The Mahakali (Sarda), Karnali, Babai, Rapti, Narayani (Gandak), Baghmati, Kosi and Kankai Rivers.  - 5 - 1.12 Irrigation Development: Before the launching of Nepal's first Development Plan in 1957, few substantial irrigation works had been undertaken by HMGN. The main reasons were limited financial resources and shortage of trained manpower. Nevertheless, with schemes such as the 11,000 ha Chandra Project (1922), farmers' stream diversions, bucket-lift, and other traditional methods, irrigation had been provided to an area of 154,000 ha, mainly in the Hills. During the First and Second Development Plans (1957-62 and 1962-65 respectively), HMGN's irrigation programs were concentrated on building medium sized systems (15-60,000 ha) in the Eastern and Mid-Western Terai. In the Third Plan, however, a program was launched for construction of minor irriga- tion projects, mostly in the Terai, to encourage greater farmer participation and to expand irrigated areas rapidly. Due to poor investigations and con- struction, many of these projects fell short of expectations, which resulted in discouraging response from farmers. HMGN then switched back in the Fourth Plan to a policy of constructing medium-sized irrigation projects, mainly in the Terai. In keeping with the priority given to quick yielding investments, the emphasis has shifted in the Fifth Plan towards the completion of on-going schemes and new investment in projects with short gestation periods and high returns, including groundwater development for irrigation by tubewells. 1.13 Bank Group's Participation in Irrigation Development: The Bank Group is presently involved in three on-going projects and a fourth which has recently been approved by IDA. The Bank also acts as executing agency for UNDP in the preparation of three further irrigation projects in the Terai. The Birganj Irrigation Project (Narayani Zone) (Cr. 373-NEP, US$6.0 M, 1973), under construction since 1974, was originally designed to improve and upgrade about 62 km of the Nepal Eastern Canal (NEC) and 28,700 ha of its irriga- tion command area, as well as to install a pilot, 2,700-ha public tubewell scheme. In November 1977, IDA agreed to reduce the scope of the project, to include only works covering 27 km of the NEC, 16,000 ha of the NEC command area and the public tubewell scheme, so as to accommodate a 50% cost overrun during 1974-77. After a slow start due to procurement and staffing difficul- ties, project implementation has steadily improved. All civil works and equipment contracts have been awarded, and construction is well advanced. The executing agency, the Narayani Zone Irrigation Development Board, is now operating effectively. The present number of staff is adequate to design and supervise the works. Irrigation operations were started in the tubewell area in 1976 and in 5,500 ha of the surface irrigated area in 1978. The project is expected to be completed by mid-1979 (para 2.04). 1.14 The Bhairawa-Lumbini Groundwater Project (Cr. 654-NEP, US$9.0 M, 1976), the first full-scale tubewell project in Nepal, provides for construc- tion of 63 deep wells, detailed development of the 7,500 ha command area, and agricultural supporting services. The project had a slow start due to delays in procurement of equipment, but is now almost on schedule. Drilling of tube- wells is proceeding with existing rigs until new rigs are delivered later this year. Construction of the irrigation and drainage networks has started in the areas commanded by seven of the 20 wells already completed. Power supplies are adequate for operating these wells. A component under the first Rural  Development Project (Credit 617-NEP, US$8.0 M, 1976) is providing assistance for improvement of small scale hill irrigation schemes and development of a high lift pump scheme on Batar plateau in Nuwakot District; progress is satis- factory. The Sunsari Morang Irrigation and Drainage Development Project, which has recently been approved by IDA, is designed to upgrade and improve the Chatra Canal System, covering about 66,000 ha, as well as to develop the irrigation and drainage networks to farm level in about 6,400 ha within the Chatra Canal System command. The UNDP-financed Major Irrigation (Far West Region) Project, for which the World Bank is executing agency, seeks to pre- pare three irrigation projects in the Mahakali Zone (12,000 ha), Bheri Zone (Babai) (13,500 ha) and Seti Zone (Jamuar Nala) (13,500 ha). Reconnaissance reports have been produced, and feasibility studies on the first two projects are due for completion by the end of 1978. Project Formulation 1.15 The proposed project was formulated to develop the remaining 12,700 ha deleted from the original Birganj Irrigation Project (Narayani Zone) in November 1977 (para 1.13). However, as a result of experience gained from implementing and operating the first part of the revised project (hereinafter called Stage I), the proposed project would also upgrade irrigation and drain- age infrastructure in areas of Stage I. It would also introduce a pilot pri- vate community tubewell scheme aimed at relieving the strain on public funds for irrigation development. In addition, the pilot scheme for intensifying agricultural extension services started in two Districts under Stage I would be expanded to cover six Districts and funded under the project. The project consultants for Stage I (Nippon Koei) assisted HMGN with preparation of the engineering component of the project. During appraisal of the project in September 1977, the causes of the previous cost overrun and the available implementation capacity were reviewed in particular to determine an optimal design for the project, with the requisite organization of agricultural extension and training components, better cost estimates and a realistic construction period.  - 7 - II. THE PROJECT AREA Location 2.01 The proposed project would extend along the Nepal Eastern Canal (NEC) from Pipra to the Bagmati river (Map IBRD 13537) and would include a part of its command area, covering about 12,700 ha, between Birganj to the west and the Arwa river to the east, and bound by the NEC to the north and the Nepal- Indian border to the south. In addition, a private community tubewell scheme, to be developed under the proposed project, would cover about 800 ha between Birganj and Simra (Map IBRD 13527). The scheme of intensified agricultural extension and training started under Stage I in Parsa and Bara Districts would be extended to cover Rupandehi, Rautahat, Sunsari and Morang Districts and would receive financial assistance under the project (Map IBRD 13648). The Nepal Eastern Canal 2.02 Nepalese-Indian Agreements. The NEC and parts of its secondary canals were built under an agreement between HMGN and the Government of India (GOI) concerning the use of waters from the Gandak river. 1/ The agreement stipulated that, on behalf of the GOI, the State of Bihar's River Valley Project Department (BRVPD) would construct a canal, the Don Branch, from a barrage on the Gandak river at Tribeni, that would convey water across northern Bihar to the Nepal-Indian border near Pipra (Map IBRD 13527); and also that BRVPD would construct an extension of the Don Branch, the Nepal Eastern Canal, eastward from Pipra to the Bagmati River (Map 13537), and short lengths of each distributary canal in the NEC's 37,400 ha net command area. A supplemental agreement bet een HMGN and GOI in October 1971 also specified that GOI would supply 24.1 m /sec (850 cusecs) of water to the NEC at the Nepal border at all times, except during periods when the Don Branch Canal was closed for necessary repairs and maintenance. BRVPD handed over the NEC system to HMGN in June 1976. The NEC was partially opened for trials in 1976, and was run at 90% full capacity on an emergency basis when the monsoon of 1977 was late and sporadic. 2.03 Defects in the NEC System. The NEC was originally designed during the 1950s for supplementary irrigation, and the canals were to be operated only during the wet season to supplement rainfall for the paddy crop. In 1972, the concept was altered to that of a perennial system. This change in concept required extra regulating structures to be built in the system to control a greater range of flows throughout the year. However, these structures were not installed by the BRVPD. In addition, the distribution system was incom- plete, since its construction was terminated at 0.6 m /sec (20 cusecs) capacity and without minor canals or structures to regulate water deliveries 1/ Agreement between His Majesty's Government of Nepal and the Government of India on the Gandak Irrigation and Power Project, December 4, 1959.  -8- to farms. This would give rise to extensive wastage and poor water distribu- tion to the command area, as happened during emergency use of the canal in 1977. The irregularity of irrigation deliveries became further44eompounded by untimely closures of the NEC system due to the breaching of embankments. This was sometimes caused by excessive water levels within the canal during the monsoon due to the lack of adequate escape capacity, though usually by failure of the banks to withstand external flooding from a number of streams crossing the NEC. Surface drainage is inadequate; this has reduced both paddy and wheat yields in some areas, because of prolonged inundation during tillering periods of paddy and the delayed sowing of wheat. The lack of cross drainage under roads in the command area seriously affects transportation of produce during the wet season, and could be counter productive as irrigation becomes more widespread. Under Stage I, these defects are being rectified over an area of 16,000 ha. Birganj Irrigation Project (Stage I) 2.04 Surface Irrigation Area. Under Stage I, 30 additional structures were installed to enable year-round control of discharges and stormwater inflow in the first 27 km of the NEC, including gated inlets to the main secondary canals of the distribution system (Table 3.1). A gravelled service road has been constructed along the 27-km upper reach of the NEC, and is open for public use. To provide an effective distribution system in the 16,000 ha commanded by the upper reach in Stage I, 450 km of canals, 310 km of drains, 4,800 structures and 130 km of service roads are under construction in six, operationally separate units, designated Blocks I through VI (Map IBRD 13537). To supply controlled flows to farm groups of about 7.5 ha each, 1,800 outlets are being built on the tertiary canals in Stage I. Controlled water supplies were first delivered to farm groups on a regular basis in 1,700 ha of Block I in June 1977, and paddy yields were reported to have more than doubled. In June 1978, regular supplies were distributed in Blocks I, III and VI, total- ling about 5,500 ha, and are expected to reach all six Blocks (16,000 ha) by July 1979. Temporary water supplies were made available to paddy farmers along the whole length of the NEC during drought periods in 1977/78, at the expense of construction progress (para 2.02). 2.05 Tubewell Irrigation Area. Nine existing tubewells were restored and 18 new deep wells (130 m) are being installed in the groundwater area of Stage I (Map IBRD 13537). Each well is equipped with an electrically driven turbine pump, delivering into a reservoir during off-peak power periods. About 40 km of lined channels distribute supplies by scheduled routines, arranged and supervised by the project's agricultural staff, to the 2,700 ha commanded by the 27 reservoirs. The nine restored wells began to deliver water in 1976 and, with strengthened intensive agricultural extension serv- ices (para 2.15), have helped to produce encouraging farming results. The average cropping intensity has already reached 180%. The remaining 18 wells are expected to be in operation by late summer, 1978. Operation and mainte- nance (O&M), competently carried out by project staff, is satisfactory and the first nine wells have achieved an operating factor of over 90%.  2.06 Water Charges. After a grace period of a year, water charge of NRs 100 (US$8.33) per ha per crop (i.e. about NRs 180 (US$15) per ha per year at the current cropping intensity) was applied in the commands of the nine restored tubewells in 1977. This initial rate covers about 60% of tubewell O&M costs. On behalf of the Revenue Department, staff of the project's Agriculture Division succeeded in collecting full dues from 95% of the bene- ficiaries. NZIDB has already started to collect the same initial water rate in the surface irrigation area of Stage I during the 1978 irrigation season; this rate covers O&M costs and about 10% of capital cost recovery with interest at 10% over 50 years. Natural Resources 2.07 Climate. The project area has two distinct seasons, the wet season (May to October) and the dry season (November to April). Annual rainfall is about 1,350 mm, with over 90% falling in the wet season but with erratic dis- tribution. About three years in ten it is either less than 1,000 mm or more than 1,700 mm, with crop damage to rainfed crops in either case. Temperatures range from a low of 8 C in January to a high of 40 C in April and May. Annual evaporation is about 1,550 mm, while humidity is 65% to 70% from March to May and ranges between 75% and 85% for the remainder of the year. 2.08 Topography and Drainage. The NEC command and groundwater areas lie on an alluvial plain, sloping from north to south with moderately steep gra- dients of 1:750 to 1:1,000 and increasingly undulating towards the eastern part of the command. The area is intersected and drained by 17 streams and rivers which originate from the northern hills and drain to the Gangetic Plain. Most of these natural drainages are poor, particularly in the southern part of the command, and would require upgrading in conjunction with irrigation develop- ment. Floods causing inundation of 1-3 days duration can be expected in the vicinity of these streams during the monsoon in most years. Protective embank- ments (bunds) would be required in the vicinity of the Bagmati river to prevent frequent, lengthy inundation of crops and to prevent damage to canals. 2.09 Soils. Soils in both surface and groundwater areas are alluvial, with medium to moderately fine texture consisting of silty to clay loams, and some coarser sandy soils. The pH value of the layer ranges from 6.0 to 8.4 and electrical conductivity values are well under 1,000 mmhos; thus the soils are non-saline. Favorable internal soil drainage exists in the project area. In the nearby Hardinath Pilot Farm, where intensive irrigation has taken place for about 7 years on a limited scale, none of the representative soil groups showed sign of waterlogging with proper irrigation management and adequate surface drainage. By U.S. Bureau of Reclamation standards, about 90% of the lands, both the surface and groundwater areas, are classified Class II or III for irrigation suitability. With proper drainage, the area is suitable for irrigated farming of paddy and upland crops such as maize, wheat, groundnuts, sugarcane, mustard and cotton. 2.10 Surfage Water. The Gandak River, which has a catchment area of about 35,000 km entirely in Nepal, has a mean a nual flow of about 1,50 m / sec, and monthly discharges varying from 4,570 m /5ec in August to 300 m /sec in March. The undertaking of GOI to convey 24.1 m /sec to the Nepal Eastern  - 10 - Canal on request can therefore easily be met by diversions from Gandak Barrage. Minor barrages on the Tilawe and Sirsia Rivers near Birganj also provide sup- plemental water supplies from June to November to the NEC system (Map IBRD 13537). 2.11 Groundwater. United Nations Development Program (UNDP) consultants studied the geo-hydrology of an area covering 20,000 ha located north of the NEC in 1970 and 1971 (Map IBRD 13537). The area is underlain by alluvial deposits to a depth of about 300 m saturated with groundwater to within 3 to 5 m of the land surface. Three types of aquifers were identified, each with different lithologic and hydrologic characteristics. Layer 1 is a thin aquifer (about 10 to 30 meters thick), consisting of fine, medium to coarse sands, and the watertable lies about 3 m below ground surface. Layer 2 consists of coarse sands and gravels and ranges in thickness from 20 to 75 meters, and has been tested to show that it contains water at higher pressure than the overlying layer 1 or the lower layer 3, so that it has artesian storage. Layer 3, the most extensive of the three, consists of fine to coarse sands with gravel and thin discontinuous beds of clay. The top of layer 3 is about 60 to 100 m below ground surface and its thickness ranges from 130 to 280 m. The layer also has a relatively high productivity of 180 to 300 m /hr. Recharge to all three aquifers occurs directly by infiltration of rainfall within the area and by lateral inflow from the north. Water quality is good to slightly alkaline, and is suitable for irrigation use under the local soil conditions. Cultivation Practices 2.12 Land Use. The area is under relatively intensive cultivation based on staple food crops. The following cropping patterns are practiced: (a) early paddy-late paddy-fallow; (b) medium paddy-wheat; (c) late paddy-wheat; and (d) early paddy-sugarcane. Present cropping intensity is about 160% of which paddy accounts for 90% of the area during the wet season. Wheat is the predominant crop in the dry season, accounting for 40% of the total area; some other minor crops such as pulses (10%), oilseeds (6%), and vegetables (4%) are cultivated on a limited scale for home consumption. Sugarcane is an important cash crop (10%), mostly grown in areas where some local irrigation is available. 2.13 Crops and Crop Yields. The early paddy and late paddy, planted about May and September and harvested about August and December, respectively, are usually high yielding varieties (such as IR5, IR8, IR20, Parwanipur 1 and Masuli) that mature in 90 days. Their yields, about 2.2 tons/ha, are below their potential because of inadequate use of inputs such as fertilizer and plant protection applications. Medium paddy, planted between June and July and harvested in October/November, is usually a local fine variety with a longer maturity period of 120 to 150 days. Its yield is relatively low, about 1.3 tons/ha. Wheat varieties such as RR21, S227 and S331 were introduced in the area some five years ago, and farmers usually rely on soil moisture for germination. Since farmers place greater emphasis in getting at least one crop of paddy, wheat is sometimes planted late (around mid-December) and yield is  - 11 - reduced because of the high temperature and hot winds in April and May. Aver- age wheat yield is about 1.3 tons/ha. Sugarcane varieties grown in the area such as B050 can produce yields of 68 tons/per ha per year with proper appli- cation of water, fertilizer and plant protection. However, the average present yield is only about 22 tons/ha due to insufficient water supply during the hot and dry months of May, June and July and inadequate inputs use. Oilseeds crops grown are mustard, rapeseed and groundnut. Their prices are attractive, but due to limited processing facilities and uncertain water supplies, farmers are not willing to invest in sufficient inputs for these crops. As a result, yields are particularly low, about 0.3 ton/ha. Pulses and vegetables are mostly grown for home consumption and their low yields (about 0.6 and 5.7 tons/ha, respectively) offer much scope for improvement. 2.14 Input Requirements. At present, farmers use simple wooden ploughs and animal power for land preparation. Some small 7-10 HP cultivators are, however, used in sugarcane areas. Most of the crops are raised under uncer- tain rainfall conditions, and the use of chemical fertilizers and pesticides is limited by farmers' attitudes to the risks involved. Harvesting and thresh- ing activities are mostly carried out by manual labor and bullocks. Agricultural Supporting Services 2.15 Extension, Training and Research. Under Stage I, the Department of Agriculture (DA) started a pilot scheme in which agricultural extension serv- ices were strengthened in Parsa and Bara Districts. The number of field staff was increased, enabling each extension worker to cover 400-500 farm households; programs for instruction of farmers were intensified along the lines of the Training and Visit (T&V) System; and staff capability was improved through methodical training as well as better technical backstopping. Staffing and administration of the intensified extension and training activities, with provision of additional vehicles, were delegated by DA to Narayani Zone Irri- gation Development Board, whose General Manager was given overall responsibil- ity for implementation of the extension program in both Districts. The pilot scheme has proved to be successful, not least because of extremely good coordination achieved between project management and the Senior Agricultural Officer in technical charge of activities. Synchronization of the irrigation- oriented extension program with the completion of development works was particularly effective; the success of this phasing is reflected in compara- tively high early benefits obtained by farmers after controlled water deliveries were made in 1977 to limited areas of Stage I. An evaluation study of the T&V System in Parsa and Bara Districts, carried out by the Ministry of Food, Agriculture and Irrigation (MFAI), indicates that about 93% of the farmers interviewed felt that the program has helped to increase production. Despite this success, the program needs further improvement, particularly in the training of village-level staff who have preliminary, little or no education, and receive inadequate training. Research is satisfactorily conducted by the Parwanipur Research Station, located about 10 km north of Birganj. This is the main rice station in Nepal which has produced a stiff-strawed, nitrogen- responsive variety adaptable to the project area (Parwanipur 1). The Station also conducts various trials on planting methods, fertilizer application, irrigation timing and amount for various crops. In addition, it produces foundation seed for use throughout Nepal. The Station also provides some  - 12 - training for extension workers and leading farmers. This service is generally inadequate, mainly due to lack of experienced instructors and poor facilities. 2.16 Credit and Input Supply. ADBN has established one branch office and four sub-branches in the project area. In addition, there are about 78 Sahja Cooperative Societies (para 1.08), each serving about 800-1,000 farm households. Most of the credits are in the form of short-term loans for production purposes. Recovery rate during the last few years has been about 75%. This is expected to improve as the Asian Development Bank has recently assisted the ADBN in staff management training. There are 2 commercial banks in the area but their involvement in agricultural lending has been limited. Lending from private sources is widespread though there are no reliable data to indicate its extent. Input distribution is handled through a branch of the Agriculture Input Corporation located in Birganj. Most of the fertilizers and pesticides are imported from India, while seeds are produced locally by contracts with farmers in the area. Supply of inputs is ample but their distribution has been poor due to lack of storage facilities throughout the area. This problem has been alleviated by the construction of 7 storage facilities with capacities of 50, 100 and 300 tons under Stage I. 2.17 Marketing and Processing. The area is well served by a number of rice mills with an estimated annual milling capacity of approximately 24,000 tons. In addition, there are also some small rice hullers operated in the villages. A sugar mill, located in Birganj, is presently operated below capacity. Marketing channels are relatively well-developed; millers in Birganj and neighboring Indian towns have a widespread network of traders in the villages. A branch of the Rice Export Company was also established in the area to handle rice export, primarily to India. However, extensive trading also takes place through informal channels across the border though there is no reliable information on its extent. Socio-Economic Conditions 2.18 Population. There are about 216,000 inhabitants in the NEC coumand area of which about 69,300 live in the Stage II area. The total number of households in Stage II area is about 12,600, with an average family size of 5.5. Farm households account for about 85% of the total, of which less than 10% are landless. The largest and most urbanized area is Birganj which has a population about 60,000. 2.19 Farm Size and Land Tenure. The average farm size of the NEC command area is 1.1 ha, with a distribution as follows: Farm Size Farm Holdings Cultivated Area Z Accumulated % % Accumulated % Less than 0.15 8 8 1 1 0.15 - 0.5 31 39 10 11 0.50 - 1.0 25 64 17 28 1.0 - 3.0 30 94 48 76 Over 3.0 6 100 24 100  - 1 3 - About 64% of the holdings below 1.0 ha account for only 28% of the cultivated area. In addition, farms are fragmented with an average size of plots of about 0.2 ha. About 41% of the holdings are fully owned and operated, 32% are partly owned and partly rented and 27% are wholly rented by project farmers. Tenancy fees are officially fixed according to the grade of the land. In the project area, the fees are generally equivalent to about 650 kg of paddy per ha or about one-third of the crop. Costs of providing inputs are generally shared between landlords and tenants on about the same basis. 2.20 Communications. The project area is centered on Birganj, an impor- tant administrative marketing and processing centre. The Kathmandu-Birganj- Raxaul highway bisects the project area and connects with the National East- West Highway, which is about 25 km to the north, and with Raxaul, an Indian town at the border to the south. A narrow-gauge railway line also connects Birganj to Raxaul and the Indian railway system. A small airport at Simra, located about 12 km north of Birganj, also serves the area (Map IBRD 13527). 2.21 Public Services. Electricity in the project area is provided by two transmission lines (66 kv and 11 kv) originating from Kathmandu. Potable water supplies are available in the main towns, but most villages rely on open ponds which become contaminated and often empty towards the end of the dry season.. HMGN is implementing a program for providing small-bore wells and hand pumps for village water supplies, which is particularly successful in the project area where groundwater is frequently found to be under artesian pressure. Health clinics and schools are limited to towns and a few of the larger villages.  - 14 - III. THE PROJECT Project Concept 3.01 The proposed project would upgrade the existing Nepal Eastern Canal (NEC) and extend the development of its command area, started under the on- going Birganj Irrigation Project (Stage I) (para 2.04). The objectives would be to: (a) improve the reliability and amount of water deliveries to farms and establish farmers' confidence in the irrigation system; and (b) accelerate agricultural development and increase farm incomes as well as rural employment. To achieve the above objectives, the project is designed to: (i) improve the operational control of the NEC as well as its security against damage by floods; (ii) expand the area of the irrigation distribution system capable of delivering regulated water supplies to groups of farms of 7.5 to 10 ha; (iii) improve drainage of farms and roads; and (iv) strengthen agricultural extension services and improve the linkage with research and training. 3.02 The proposed project would include the improvement of NEC's remain- ing length (52 km) beyond that restored (27 km) under Stage I; protection of NEC against flood damage (para 2.03); further development of the NEC com- mand's irrigation distribution system, drainage network and canal service roads in 12,700 ha, and improvement of those constructed in 16,000 ha in Stage I (para 2.04), thus completing irrigation infrastructure throughout 28,700 ha; pilot schemes for privately-owned community tubewells, waterlog- ging control, and low-cost all-weather roads; an expansion of the intensified agricultural extension and training scheme started in two Districts under Stage I (para 2.15); and the provision of technical services including con- sultants. With minor additions to the engineering staff already employed under Stage I, the present implementation capacity would enable the project to be completed in a four-year period between 1978/79 and 1981/82. Main Project Features 3.03 The main components of the project would be: (a) construction of additional structures for improved water supply control, cross-drainage, protection against floods along about 52 km of the NEC between Birganj and the Bagmati river, and improvement of the NEC service road (about 79 km) between Pipra and Bagmati river (para 3.04); (b) construction of the irrigation distribution and drainage systems down to farm level and canal service roads in about 12,700 ha of the NEC command between Birganj and the Arwa river (paras 3.05, 3.06 and 3.07); (c) upgrading of surface drainage systems, irrigation facil- ities and canal service roads in about 16,000 ha of the NEC command between Pipra and Birganj (paras 3.05 and 3.07);  - 15 - (d) installation of about 25 wells and pumps, irrigation channels, access roads and support to ADBN for providing loans for an 800-ha pilot, privately-owned community tubewell scheme (para 3.08); (e) construction and operation of field trials for water- logging control, low cost roads, and a pilot micro- hydroelectric station (para 3.09 and 3.10); (f) provision of intensified agricultural extension services, including adequate staff, for six Districts in the Terai (Rupandehi, Parsa, Bara, Rautahat, Sunsari and Morang) (para 3.11); (g) provision of training for engineering, agricultural and administrative staff (para 5.16); (h) provision of engineering operation and maintenance equip- ment with vehicles for agricultural extension services, spare parts and training equipment (para 3.12); (i) construction of buildings for project agricultural and engineering operations and training, staff housing and agricultural storage (para 3.13); (j) provision of technical services, including project consult- ants, air photography and mapping for further development of the NEC command area (paras 3.14, 3.15). Detailed Features 3.04 Improvement of NEC (Table 3.1). The works would include: (a) con- struction of 13 additional regulating structures to control flows in both wet and dry seasons throughout 52 km of the NEC (from middle to tail reaches); (b) strengthening of 10 km of embankments on the NEC left bank and provision of ten additional drainage inlets and culverts to prevent breaches and ensuing canal closures; and (c) construction of protective works, including three escapes and conveyance channels, as well as an 8 km long flood embankment near the Bagmati river (Map IBRD 13537), to prevent recurrence of damage caused by monsoon flooding. In conjunction with the improvements, the left bank would be provided with an emergency access road where necessary. The 3.5 m-wide gravel-surfaced service road provided on the right bank of the canal under Stage I would be continued for 52 km to the tail, its surfacing would be strengthened along the 27-km head reach, and it would become a public road, with six new connecting bridges to villages in the area. Bullock carts would be restricted to an earth road to be formed on the lower part of the right embankment along the whole 79 km length of the canal. 3.05 Development of Irrigation System (Table 3.1). Southward flowing rivers, streams and natural drains (nalas) divide the Stage II irrigation command of the NEC into six, operationally separate distribution units, Blocks VII through XII, each planned to include a secondary and tertiary distribution canal system (Map IBRD 13537). Existing head reaches of  - 16 - secondary canals, totalling about 40 km, each with a capacity exceeding 0.6 m /sec, would be improved under the project, mainly by the addition of control structures. The distribution system would be extended down to out- lets serving groups of farms covering 7.5 to 10 ha throughout the six blocks enclosing a total of 12,700 ha. Works would include about 360 km of main secondary, branch secondary and tertiary canals, with about 6,500 control structures, and about 360 km of service roads and farm tracks. 1/ In addition, structural improvements would be made throughout the Stage I distribution area (16,000 ha), as a result of the experience gained in the first year of opera- tion. These would include improved water level control at NEC escapes, in- creased erosion control measures at regulating structures, improved tertiary canal turnout gates to eliminate leakage, strengthened canal service roads to reduce maintenance costs, and the repair of some damaged structures of the Tilawe supplementary system. 3.06 Farm Group Development (Table 3.1). Under present conditions, water is discharged from secondary canals through unregulated outlets usually commanding over 400 ha each, and its distribution to farms is extremely haphazard. Under the project, water distribution would be considerably improved by the provision of regulating outlets, each serving groups of farms covering 7.5 to 10 ha. Within the farm groups, field channels from the tertiary outlets, as well as drains, would be installed by the cooperative action of local labor under the supervision of project staff, as is being carried out satisfactorily under Stage I. 3.07 Drainage Improvement. To create conditions more suitable for ob- taining higher paddy yields by controlling monsoon flooding, and for planting wheat and other upland crops after paddy, drainage systems including about 250 km of drains and over 2,000 structures would be constructed to link farm group development areas of about 10 ha to natural drains (nalas) throughout 12,700 ha. Appropriate structures would be provided for drains at road and canal crossing points. Based on recent observations, the capacity of field drainage which would be constructed under the project would be based on a run-off criterion of 3 1/sec/ha, and drains built under Stage I (which were based on about one-third of this capacity) would be modified as necessary. Control structures would be installed on drains in Stage II to regulate flow and control scour. Additional drainage controls and culverts would be built as necessary in the Stage I command area of 16,000 ha. 3.08 Community Tubewells Scheme (Map IBRD 13537). Towards reducing the investment burden on HMGN for groundwater development, the project would install up to 5 deep, privately owned community tubewells to irrigate about 120 ha (about 40 to 80 farms) each, and 20 or more similar shallow tubewells to irrigate about 10 ha (4 to 8 farms) each, in the vicinity of the Stage I groundwater pilot development area where surface irrigation development is not feasible. The scheme would explore and develop the farmers' capability to finance and operate irrigation tubewells themselves, with some assistance from ADBN and the project staff. If successful, the scheme could be replicated in 1/ In the proposed project, a tertiary serves about 40-50 ha, a branch secondary about 200-600 ha and a main secondary supplies four or more branch secondaries.  - 17 - many locations in the Terai. Deep tubewells would be steel cased, 25 cm in diameter, about 150 m deep and equipped with electrically powered 40-kw submersible turbine pumps of approximately 80 1/sec capacity. A pumphouse with switchboard, discharge metering device and operator's quarters would be built at each jell site, and each pump would discharge during off-peak hours into a 2,000 m capacity regulating storage reservoir. Power would be supplied through about 10 km of 11 kv distribution lines to be constructed under the proposed project from the Raxaul-Birganj-Kathmandu 33 kv transmission line which has ample capacity for off-peak operation of the pumps. Leading from each reservoir, the main water distribution channels (7.5 km) would be lined channels of the type developed in Stage I, and field channels would be con- structed by farmers' cooperative action under project staff supervision. The shallow tubewells would be steel cased, 10 cm diameter, about 30 m deep and equipped with electrically powered 2.5 kW centrifugal pumps of about 10 1/sec capacity. They would be located outside the zone of influence of the deep wells. A pumphouse delivery pipe and distribution chamber would be provided at each well, as well as all irrigation and drainage structures. The field channels would be constructed by cooperative action of farm labor under the supervision of project staff. The organization of construction, financing and O&M of the private community tubewells scheme are described in paras 5.06 and 5.10. 3.09 Waterlogging and Soil Stabilization Trials (Table 3.1). To test -the draw-down effects on high watertables for the control of waterlogging (para 8.10), five deep tubewells and 20 shallow tubewells (in addition to the tubewells discussed in para 3.08) would be installed in the low-lying areas of NEC command. Power for the tubewell pumps would be supplied from the 33 kv transmission line at Birganj during off-peak periods. Tubewell water would be discharged into the NEC system. To test the feasibility of using hydrated lime to stabilize and strengthen compacted soils in canal service roads and tertiary canals, investigations would be carried out on a limited scale in the project area. In the event that the investigations show lime stabilization to be practical, economical and within the capability of local contractors, full-scale trials would be initiated in the field, and would be monitored for cost effectiveness. 3.10 Micro-Hydroelectric Development. Nepal has considerable scope for micro-hydroelectric development. A major advantage of micro-hydroelectric stations would be their speedy construction, while major hydro-power projects take many years to develop. The micro-stations would be particularly useful for rural electrification and groundwater development, and possibly for small scale fertilizer production. However, there is only very limited experience with micro-power development in Nepal. A pilot micro-hydroelectric station would, therefore, be built at the Tilawe barrange. The station would be built by NZIDB with the help of consultants and/or other interested agencies. The cost and benefits of the station would be closely monitored. 3.11 Agricultural Extension, Research and Training. In view of the promising results obtained in the pilot scheme of agricultural extension on the lines of the Training and Visit (T&V) System introduced in Parsa and Bara Districts under Stage I (para 2.15), HMGN intends to extend the T&V System throughout Nepal under a national extension and training project. Since it  - 18 - may take some time to implement such a project effectively, as an interim measure, the pilot scheme is to be expanded from two Districts to six, which would cover all three on-going, IDA-assisted irrigation projects in the Terai (Map IBRD 13469). In addition to Parsa and Bara, intensification of extension services and training would be taken up in Rupandehi, Rautahat, Sunsari and Morang Districts, and would be financially assisted under the project. Additional field and advisory staff, operating under carefully regulated schedules, would enable the T&V System of agricultural extension to reach about 290,000 farm families. To support the expansion of the pilot scheme, the proposed project would provide for consultant services (paras 3.15 and 5.13), training, linkages with research (para 5.14) and a proportion (55%) of staff costs for a four-year period, vehicles, staff quarters, stores, a training center and associated equipment. 3.12 Equipment and Vehicles. The project would provide equipment, vehicles and spare parts needed to supplement those procured under Stage I for survey and supervision of construction (including materials testing); for operation and effective maintenance of the works (including canal telecommunications facilities); for agricultural extension and training, and for technical serv- ices as well as workshop equipment for maintenance and repair. Bicycles for extension personnel would be sold to the staff on an installment basis. Most of the equipment and vehicles, together with spare parts and assemblies, would have to be imported, and a list of the estimated requirements is presented in Table 3.2. 3.13 Buildings and Facilities. For the project engineering operations, eight low-cost irrigation sub-centers (including offices, stores and housing), laboratory, and a workshop would be built. For agricultural extension services in the six Districts, the project would provide 30 sub-training centers and about 120 quarters of inexpensive construction for some of the extension and research staff. Six storage facilities of 50 to 100 tons capacity for agricultural inputs would be built in the irrigated area. To ensure effective operational control of the NEC, telephone facilities are being provided along the first 62 km of the canal under Stage I; they would be extended by 17 km to the tail of NEC under Stage II. Telecommunications facilities would also be installed under the project for control of the distribution canal staff and made operational by May 31, 1980. 3.14 Air Photography and Mapping. Mapping of most of the NEC command has already been carried out. In the tail reach, however, an area of about 10,000 ha remains to be coveted by air photography and 1:5,000 scale maps prepared prior to commencement of its development under a future project. Provision would be made for this survey work under the proposed project. 3.15 Consultants (Table 3.3). In 1973, HMGN employed Nippon Koei (Japan) as consultants for the Birganj Irrigation Project (Narayani Zone)(Stage I); their performance has been satisfactory. About 75 man-months of engineering consultants would be provided under the proposed project, compared to more than 300 man-months in the period 1974/78, since the project staff has gained much experience from implementing Stage I. The consultants would provide in-service training, advice and guidance to project engineering staff in  - 19 - project planning and scheduling; design of works; preparation of bidding documents and bid evaluation; modern construction techniques; construction quality control; and monitoring of progress and costs. Consultants would also be engaged to assist in designing and implementing the intensified agricultural extension and training programs in the six Districts to be covered (para 3.11), and to provide essential instruction in training and communication techniques to staff who would become trainers themselves. About 15 man-months of consultant services would be provided for these purposes. The total cost for consulting services is estimated at $850,000, or about $9,500 per man- month, including all overheads, travel, per diem etc. The appointment of a firm of experienced engineering consultants satisfactory to IDA, on terms and conditions satisfactory to IDA, would be a condition of credit effective- ness. An assurance has been obtained from HMGN that agricultural consultants experienced in extension and training and satisfactory to IDA, would be recruited to the project by NZIDB by April 30, 1979, on terms and conditions satisfactory to IDA. Water Demand and Supply 3316 Nepal's agreement with India (para 2.02) assures that up to 24.1 m /sec (850 cusecs) of water would be delivered from the Don Branch Canal (DBC) to the Nepal Eastern Canal (NEC) when requested by the project staff, except when the DBC is closed for repairs or annual maintenance. Regular meetings are being held among NZIDB staff and staff of the Bihar Irrigation Department to determine most appropriate dates for maintenance closure of the DBC without endangering the operation of NEC for required irrigation water deliveries. Telephone communications between staff at the Gandak River barrage, along the DBC and at the head of NEC are being actively improved, and are expected to be completed by March 31, 1979. 3.17 The maximum discharge capacity at the head of the NEC represents about 8% of the lowest probable flow of the Gandak River (para 2.10), and river flows would therefore be much more than sufficient to meet this require- ment at all times. The estimated crop irrigation requirements and canal water demand are presented in Table 3.3 and summarized below: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec -----------