Philippines - First Rural Infrastructure Project

Document of The World Bank FOR OFFICIAL USE ONLY FILE COPY Report No. 1884a-PH PHILIPPINES STAFF APPRAISAL OF THE RURAL INFRASTRUCTURE PROJECT: I March 23, 1978 Projects Department East Asia and Pacific Regional Office 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 Currency unit - Philippines Peso (P) P 1 = US$0.135 US$1 = P 7.40 WEIGHTS AND MEASURES 1 ha = 2.47 acres 1 km = 0.62 miles 1 sq km = 0.386 sq mile I m = 3.28 ft 1 sq m = 10.76 sq ft 1 cu m = 35.31 cu ft 1 M cu m = 810.7 ac ft 1 mm = 0.039 in 1 kg = 2.2 lb 1 cavan = 50 kg 20 cavans = 1 m ton ABBREVIATIONS ADB - Asian Development Bank AID - Agency for International Development BAE - Bureau of Agricultural Extension BBR - Bureau of Barangay Roads BHS - Barangay Health Station BPI - Bureau of Plant Industry BPW - Bureau of Public Works CCC - Cabinet Coordinating Committee on Rural Development CP - Cooperative Program CPO - Central Project Organization DAR - Department of Agrarian Reforms DLGCD - Department of Local Government and Community Development DOH - Department of Health DPH - Department of Public Highways DPWTC - Department of Public Works, Transportation and Communications FAO - Food and Agriculture Organization FSDC - Farm Systems Development Corporation ISA - Irrigation Service Association MLWL - Mean Low Water Level NEDA - National Economic and Development Authority NFAC - National Food and Agriculture Council NGA - National Grain Authority NIA - National Irrigation Administration O&M - Operation and Maintenance PDAP - Provincial Develpment Assistance Program PDD - Project Development Department PMS - Project Management Staff PPA - Philippines Port Authority PPDS - Project Planning and Development Service PRIP: I - Philippines Rural Infrastructure Project: I RB - Rural Banks RHU - Rural Health Unit UPRP - Upper Pampanga River Project WHO - World Health Organization GLOSSARY Barangay - Village GOVERNMENT OF THE PHILIPPINES FISCAL YEAR January 1-December 31 FOR OFFICIAL USE ONLY PHILIPPINES STAFF APPRAISAL OF THE RURAL INFRASTRUCTURE PROJECT: I TABLE OF CONTENTS Page No. 1. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 The Rural and Agricultural Sector . . . . . . . . . . . . . . 1 Rural Infrastructure . . . . . . . . . . . . . . . . . . . . . 3 Component Subsectors . . . . . . . . . . . . . . . . . . . . . 4 Rural Health Services . . . . . . . . . . . . . . . . . . . . 5 Project Formulation . . . . . . . . . . . . . . . . . . . . . 6 2. THE PROJECT AREA . . . . . . . . . . . . . . . . . . . . . 7 General . . . . . . . . . . . . . . . . . . . . . . . 7 Climate . . . . . . . . . . . . . . . . % . . . . . . . . . 9 Topography and Soils . . . . . . . . . . . . . . . . . . . . . 9 Population, Farm Size and Land Tenure . . . . . . . . . . . . 11 Existing Irrigation Facilities . . . . . . . . . . . . . . . . 13 Existing Road Facilities . . . . . . . . . . . . . . . . . . . 14 Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Barangay Health Stations . . . . . . . . . . . . . . . . . . . 16 Rural Water Supply p p l * * * . . o . . . . . . . . . . 16 3. THE PROJECT * * * * * * * * * * * * * * . . . . . . . . . . . o17 Project Description * * * * * . * * . * * * 1 . . . . . . . . 17 Communal Irrigation Systems . . . . . . . . . . . . . . . . . 18 Barangay Roads . . . a d s * * * . . . . . . . . . . . 21 Ports * * * * * * * * * * * * * * * . . . . . . . . . . . . 25 Barangay Health Stations . . . . . . a t i o n 2 . . . . . . . 26 Rural Water Supply * * * * * * * * * * * * * * * . . . . . . . 26 Preparation of Future Infrastructure Components . . . . . . . 27 Cost Estimates . * * * * * * * * * * * * * * . 2 . . . . . . . 27 Financing . n c i n g . * * * * * * * * * * * * * . . . . . . 32 Procurement r * * * * * * * * * * * * * * * * . . . . . . . 32 Disbursements . . . u r * * * * . * * * * * * * * * * . . . . 33 Accounts and Audit . . . . d i * * * * * . . * * * * * . . . . 33 Environmental Effects * * * * * * * . * * * * * . * * . . . . 33 4. ORGANIZATION AND MANAGEMENT N A * * * * * * * * * . . . . . . . 34 Central Project Organization * * * * * * * * * * * . . . . . . 34 Project implementation Organizations * * * *z* . . . . 35 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. -2- Page No. 5. AGRICULTURAL PRODUCTION, MARKET PROSPECTS AND PRICES, FARM INCOMES AND PROJECT CHARGES (Communal Irrigation Systems). . . 41 Agricultural Production . . . . . . . . . . . . . . . . . . . 41 Market Prospects and Prices . . . . . . . . . . . . . . . . . 42 Farm Incomes . . . . . . . . . . . . . . . . . . . . . . . . . 45 Cost and Rent Recovery - Irrigation Component . . . . . . . . 45 6. BENEFITS, JUSTIFICATION AND RISKS . . . . . . . . . . . . . . . 48 Irrigation Systems . . . . . . . . . . . . . . . . . . . . . . 48 Barangay Roads . . . . . . . . . . . . . . . . . . . . . . . . 52 Ports . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Barangay Health Stations . . . . . . . . . . . . . . . . . . . 56 Rural Water Supply . . . . . . . . . . . . . . . . . . . . . . 58 Weighted Economic Rate of Return . . . . . . . . . . . . . . . 58 7. AGREEMENTS REACHED AND RECOMMENDATION. . . . . . . . . . . . . . 58 ANNEXES 1. Project Features, Various Components Cost, Expenditures, Disbursements and Allocation of Loan Proceeds 2. Rice Production Costs, Farm Budgets, Labor Requirement, Net Value of Production and Cost and Benefit Streams for Various Components 3. Schedule of Critical Events 4. Related Documents and Data Available in the Project Files LIST OF TABLES IN MAIN TEXT Table No. Page No. 2.1 General Statistics of Project Provinces . . . . . . . . . 8 2.2 Summary of Climatological Data . . . . . . . . . . . . . 10 2.3 Provincial Soil Grouping . . . . . . . . . . . . . . . . 11 2.4 Provincial Farm Size Distribution . . . . . . . . . . . . 12 2.5 Tenure Status of Rice Farmers . . . . . . . . . . . . . . 13 2.6 Summary of Irrigation Systems . . . . . . . . . . . . . . 13 2.7 Summary of Existing Roads . . . . . . . . . . . . . . . . 14 2.8 Summary of Ports Traffic . . . . . . . . . . . . . . . . 16 3.1 Project Water Requirements Summary . . . . . . . . . . . 22 3.2 Design Standards for Barangay Roads . . . . . . . . . . . 23 3.3 Cost Estimate (2 pages) . . . . . . . . . . . . . . . . . 29 3.4 Cost Estimate for Each Province . . . . . . . . . . . . . 31 5.1 Cropping Patterns and Production . . . . . . . . . . . . 43 -3- Table No. Page No. 5.2 Price Structure for Rice and Fertilizer Prices . 44 5.3 Summary of Farm Budgets . . . . . . . . . . . . . . . . . 46 5.4 Cost and Rent Recovery of Irrigation Component . . . . . 47 6.1 Breakeven Economic Cost of Construction - Irrigation . . 50 6.2 Economic Costs and Benefits - Irrigation . . . . . . . . 50 6.3 Sensitivity Analysis - Irrigation . . . . . . . . . . . . 51 6.4 Sensitivity on Breakeven Economic Cost of Construction - Irrigation . . . . . . . . . . . . . . . 51 6.5 Economic Costs and Benefits - Roads . . . . . . . . . . . 54 6.6 Sensitivity Analysis - Roads . . . . . . . . . . . . . . 55 6.7 Economic Costs and Benefits - Ports . . . . . . . . . . . 57 LIST OF FIGURES Figure 3.1 - Implementation Schedule Figure 4.1 - Project Organization Chart Figure 4.2 - Proposed Organization for Design, Construction, Operation and Maintenance of Barangay Roads Figure 5.1 - Proposed Cropping Calendar LIST OF MAPS IBRD 13274 Project Location PHILIPPINES RURAL INFRASTRUCTURE PROJECT I 1. BACKGROUND General 1.01 The Government of the Philippines has requested Bank Group assis- tance in financing a multi-sectoral Rural Infrastructure Project in six provinces, which were selected on the basis of their present low level of per capita rural income and inadequate infrastructure facilities. Project components include communal irrigation systems, barangay (village) roads, small ports, barangay health stations, and rural water supply. In each case the Government has presently an ongoing program of the activities to be financed under the project. While similar activities have been financed as components of several previous Bank loans, this project would represent a first Bank Group effort aimed at assisting the implementing agencies in carrying out a relatively large program. Bank Group assistance would be focused mainly on strengthening the technical and administrative capability of the implementing agencies, providing additional funds to enable an expan- sion of the programs, and introducing improved methods for selecting, eval- uating and monitoring the development impact of these programs. 1.02 The National Economic and Development Authority (NEDA) was respon- sible for coordinating the preparation of the project, with assistance from the FAO/World Bank Cooperative Program and the IDA (Association). The present report is based on the findings of an appraisal mission composed of Messrs. E.G. Giglioli, M. Saddington, L. Shanan and D.J. Steel (Association) and A.K. Long, D.K. Jones, and W.H. Cooke (Consultants), which visited the Philippines in April, 1977 and of a follow-up mission comprising Messrs. A.N. Khan, L. Shanan and V. Talvadkar (Association) and W.H. Cooke, and R.Y. Scheiner (Consultants) which visited the Philippines in October, 1977. The Rural and Agricultural Sector 1.03 Some 31 million people or 70% of the Philippine population live in rural areas where social services are poor, economic activities limited, agricultural productivity low and underemployment high. The rural population is growing at 2.7% per year, reflecting a natural increase of about 3.2% and an annual rate of migration to the cities of 0.5%. The Government estimates that by 1985, rural-urban migration is expected to reach 1.1% per year, placing considerable strain on urban infrastructure and services. 1.04 Agriculture is the predominant sector in the Philippine economy, accounting for about 30% of gross domestic product and over one-half of total employment. Small farms provide the main income for 65% of the rural population. Other sources of income include forestry, fishing, mining, small-scale manufacturing and service industries. Farming is chiefly oriented towards food grain production (60% rice and 40% corn) for domestic consumption, while coconuts and sugar are the main export crops. Although still by far the largest export sector, the contribution of agriculture -2- (including forestry) to export earnings has fallen from more than 70% in the early 1970s to less than 60% in 1977, largely due to the rapid growth of nontraditional manufactured exports. 1.05 Agriculture's performance was exceptionally strong in 1976 as pro- duction increased by 7%, compared to the trend growth rate of 4.5%. Rice and corn were both at record levels. The agricultural terms of trade improved by 18% during the period 1970-74, declined slightly in 1975 and recovered to the 1974 level in 1976. Domestic rice, corn and sugar prices are largely administered, while coconut prices tend to fluctuate with the world market. Government price intervention for rice was able to cushion the impact on consumers of the 1972-73 crop damage and the peak world prices of 1973-74, while at the same time allowing the farm-gate price for paddy to rise with the trend in international prices. As a result of price adjustments made in the last two years, domestic prices for major crops are now in line with world prices. 1.06 Because of these favorable developments in production and prices, the growth of rural family incomes has exceeded that of urban incomes in the last four years. The ratio of the average rural income to the average urban income rose from 0.48 in 1971 to 0.57 in 1975, and the share of family incomes received by the poorest 40% of families increased from 12% to 15% during the same period. However, about half of all rural families are below the level required to ensure adequate nutrition and provide essentials for accepted minimum standards of living. 1.07 In addition to raising the incomes of rice and corn farmers, another major objective of the Government's agricultural development stra- tegy is to achieve self-sufficiency in these two food crops. After sub- stantial deficits in the early 1970s, the Philippines was able to satisfy consumption needs solely from domestic production for the first time during crop year 1976-77. Although an analysis of the reasons for this good perform- ance is currently being carried out by Bank Group staff as part of the sector work program for the Philippines, major factors appear to be recovery in yields due to favorable weather and irrigation development, and an increase in the area planted. With the continued growth of population and incomes the demand for rice is expected to increase by about 3% annually. A continued emphasis on irrigation and improved technology will be needed to increase production at the same pace. Rice yields, particularly in irrigated areas, are still below what could reasonably be achieved. To realize the full benefits of recent large investments in irrigation greater efforts will be needed to improve supporting services, particularly extension. 1.08 Another major Government objective is agrarian reform. During the five years in which the land transfer program has been in operation, however, it has progressed more slowly than the ambitious pace originally set for it. The program initially proceeded rapidly when it concentrated on larger land holdings, but progress has been slower in recent years because of the greater difficulties inherent in dealing with a large number of medium-sized often middle-class landowners. These problems and a shortage of trained manpower have led to delays in identifying tenanted - 3 - parcels, determining land values and providing documents required to transfer titles. In April 1977, the Government adopted new procedures to speed field operations. The main innovations are that instead of dealing with individual parcels the reform will be carried out simultaneously for an entire barangay, and that the manner of determining the value of land has changed, from mutual agreement between landlord and tenant, to village-wide determinations accord- ing to land category by Barangay Committees on Land Production. Although the reform has encountered a number of difficulties in the course of imple- mentation, it remains an important part of the Government's rural development strategy, and worth the substantial effort that will be needed to complete it. Rural Infrastructure 1.09 Except for some of the more developed lowland areas in Central Luzon, rural infrastructure is inadequate. Although there is an extensive network of barangay or feeder roads (some 50,000 km), only 20% are in good condition while at. least 50% are in extremely bad condition and not passable during the wet season. Local ports, which are important because of the extensive use of inter-island shipping, are also inadequate. Performance of existing communal irrigation systems falls far short of their potential, some 55% of the rural population has no safe and reliable drinking water supply, and few villages have ready access to medical and family planning services. 1.10 Although national Government agencies dominate rural development efforts, national planning frequently fails to reflect provincial and local needs. In 1972, Government policy shifted towards increasing local partici- pation in development planning and implementation, and Provincial Development Councils, made up of local representatives of National and Provincial Government agencies, were formed in each province. The capability of these Councils, however, is still weak. Regional Development Councils and a Cabinet Coordinating Committee for Rural Development (CCC) has been set up under NEDA to coordinate rural development efforts. 1.11 Development to date has been concentrated in areas suited for large-scale projects, particularly in lowland areas where arable land, irrigation water, and markets are readily available. The Government is now giving priority to economically isolated and depressed rural areas. Programs include small-scale communal irrigation systems, barangay roads, cooperative development, and supervised credit for small farmers, coordinated with improved social services. Component Subsectors 1.12 Communal Irrigation Systems. About 0.9 million ha are irrigated in the Philippines. Half of the irrigated area is served by National Irrigation Systems, mostly larger than 1,000 ha, under the jurisdiction of the National Irrigation Administration (NIA). The remaining areas vary from a few to a few hundred hectares in size, are owned by 176,400 farmers grouped into about 2,000 Irrigation Associations, and are served by 1,350 Communal Irrigation Systems. Communal systems are mostly "run-of-the-river" projects where pumps or temporary weirs supply water from rivers which usually have small catchments and limited dry season flows. Structures are simple, sometimes primitive, and frequently damaged by floods. Communal irrigation projects are developed as self-help schemes in which farmers donate labor for construction and maintenance. Maintenance is seldom carried out because of shortage of funds, organization, and machinery. Although detailed statistics are not available, average yields for these systems probably do not exceed 2 ton/ha, compared with 2.6 ton/ha on the national systems. Under the NIA's ten-year irrigation development program, communal projects represent about 14% of the target area. The Farms Systems Develop- ment Corporation (FSDC), a Government-owned corporation, has been in charge of implementing communal pump irrigation systems and organizing farmers into Irrigation Service Associations (ISA). Development of communal irrigation projects has been slow due to lack of funds, relatively small size of proj- ects, and inability of farmers to form ISA. 1.13 Barangay Roads. Road transportation accounts for nearly 40% of freight movement and over 80% of passenger traffic in the Philippines. The road network, generally located in coastal plains and vallys to avoid mountain ranges, is composed of some 100,000 km of highways and roads of which about 30% are unsurfaced or have only a natural earth surfacing. Less than half the villages in rural areas have direct access to roads and movement of farm produce is initially by headloads, animal-drawn sleds and wheeled carts. During the period 1971-75, the Department of Public Highways (DPH) constructed or improved about 4,000 km of feeder roads at a total cost of about P 53 million. 1.14 Transport investment continues to occupy a prominent position in the Government's development program. During 1976-79, P 10 billion, or about 30% of the total public expenditures, will be invested in transport infra- structure including the construction and maintenance of rural feeder roads. The Bank-assisted Third Highway and planned Fourth Highway Projects include some 500 km of minor rural roads throughout the country. In addition, the Asian Development Bank (ADB) is expected to finance improvement of 800 km of farm to market roads in Mindanao, while 1,300 km of provincial and feeder roads leading from the Pan-Philippine Highway will be improved under the Philippine-Japanese Highway Loan Supplementary Stage program. In May 1974, Presidential Decree No. 701 (PD 01) established the Bureau of Barangay Roads (BBR) in DPH to accelerate the systematic construction and maintenance of roads serving rural areas, and the 1977-81 Highway Development Program includes the development of about 22,500 km of feeder roads. 1.15 Ports. Water transportation is essential for the island communi- ties of the Philippines. The naturally sheltered harbors and the efficient movement of vessels has led to the proliferation of ports which have been classified into 80 national ports and some 400 municipal ports. In many cases operations in these ports have been inefficient because of poor planning and poor management. The form of operation or degree of efficiency, particularly of the municipal ports, depends to a large extent on the ability of the municipality to see that port facilites are organized, port charges collected and a suitable amount of maintenance done. An analysis of - 5 - commodity movements reveals that a substantial part of the trade generally uses a combination of land and water transportation. For this reason, efficient transportation in remote islands requires the integration of barangay roads, district roads and nearby ports into a mutually supporting system. 1.16 Improved overland mobility in recent years now makes it possible to abandon redundant port facilities and to concentrate port activities in a few selected locations, thereby realizing economies of scale. Upgrading and rehabilitating these selected ports would reduce the turnaround times and handling costs of ships and cargoes, and encourage the introduction of larger and more efficient vessels in the inter-island trade. The expansion of on-shore facilities (transit sheds for general cargo, paving and fencing open cargo areas, cargo handling and holding facilities and other fixed installa- tions) and services at public ports is also needed to increase the utiliza- tion of existing port facilities. Rural Health Services 1.17 The Government's health care delivery system run by the Department of Health (DOH) is responsible for family planning services and nutrition as well as basic health services. There are some 1,500 Rural Health Units (RHU) belonging to DOH. Inadequate staff training and lack of equipment and drugs are common reasons for the inability to provide sound services to patients. Moreover, even this relatively large number of facilities can provide health care and family planning services to only about a third of the rural population. 1.18 Under the first Bank-assisted Population Project (Loan 1035-PH), this system is being restructured through retraining of all rural health services staff and employment of about 2,400 new midwives to provide compre- hensive health and family planning services to rural areas. At present each midwife must cover a population of over 5,000 scattered among three or four villages. In order to improve the efficiency and effectiveness of the program, the Government is developing a proposal for an experimental approach in a few Provinces with the following main objectives: (a) to capture community participation in improving its quality of life through improved health and related services; (b) to provide manpower at the barangay level to meet the community's health needs; and (c) to integrate the national nutrition, family planning and health service programs at the barangay level. 1.19 The major responsibility for carrying out the program would fall upon a Barangay Health Worker directly supervised by the rural health midwife trained under the First Population Project. His functions would include the health-related and family planning activities. The program would also capitalize on community resources and involvement at the village level. For - 6 - the most part the services provided would be aimed at infants, children, pregnant women and lactating mothers in an effort to reduce maternal and child mortality and morbidity and increase the use of family planning services. The focal point for these services would be the Barangay Health Station (BHS), a small, simple health outpost to house records, supplies and morning clinic sessions. 1.20 Village Water Supply. Less than half of the 31 million people living in rural areas have safe domestic water, generally supplied from either springs or wells. Poor design, low standards of construction and lack of maintenance have reduced the efficiency of these systems and many have been abandoned. Construction is subsidized by the national Government, but the recipient community donates labor for construction and takes care of operation and maintenance. Rural wells are normally designed to serve 250-300 persons. They are fitted with hand pumps, have no distribution systems and cost about P 1CIO-300 per capita (compared with F 750 for urban systems). In the last four years, about 2,000 wells and springs, serving almost a million people, have been constructed, but accomplishments have fallen short of expectations because of lack of equipment, budget and staff. 1.21 The Government aims, during the next 25 years, to rehabilitate or construct new water supply systems for about 60% of the rural population who are inadequately served at present. A recent sector study by the World Health Organization (WHO) and the Bank Group pointed out the constraints preventing the Government from initiating this program. These constraints include inadequate national and provincial administrative capability, absence of defined provincial policies and priorities, and lack of awareness of the technical limitations of agencies involved in providing rural water supplies. The Barangay Water Project, initiated recently by the Department of Local Government and Community Development (DLGCD), in close cooperation with USAID and WHO, is trying to overcome these constraints in the context of a program concentrating on the larger villages of 28 selected provinces. Many small, isolated rural communities lie outside the scope of this project and must still rely on their respective local governments for support. Since most of them do not have adequate resources to pursue desired programs, the national Government must take a lead in providing the necessary inputs for these small villages. Project Formulation 1.22 In formulating the project, each agency reviewed its ten-year development program (1977-86) and identified schemes to meet the immediate need of the population. Irrigation schemes were evaluated on the basis of land and water resources, wishes of the farmers to participate and preli- minary cost of development; barangay roads were selected according to potential production area, need, preliminary field surveys of alignment and cost; ports, according to alternative means of transportation and cost of improvement; rural health stations, according to the location of rural health units and their distance to the villages to be served; and water supply, according to the need of small villages. Based on this preliminary evaluation, detailed feasibility studies were carried out for irrigation - 7 - systems which covered 25% of the project area and were representative of terrain, soils and type of diversion. Cost estimates of the road component were based on three road segments representing the terrain, and 11 segments for potential production area. Plans and detailed cost estimates were prepared for each port, barangay health station and the equipment for rural water supply. 1.23 This would be the third Bank Group-assisted rural development project in the Philippines. The others are the Rural Development Project (Mindoro) (Loan 1102-PH), and the Rural Development (Land Settlement) Project (Loan 1421-PH). The Mindoro project is similar to the proposed project with components for communal irrigation, provincial roads and upgrading of a port. Progress was slow in the early stages due to inadequate budgeting by the various agencies. Adequate budgets have been provided during the current fiscal year, so all works are expected to be implemented rapidly. The loan for the land settlement project became effective on October 27, 1977, so the project is in its early stages of mobilization. 1.24 The communal irrigation and barangay road components would together contribute to increasing agricultural production and farm income. The three ports proposed for rehabilitation would serve as important points of entry for the provinces concerned and would complement the barangay road develop- ment. The health stations, and village wells would contribute to raising the standard and quality of life for the small villages. While the project concentrates on infrastructure, other components necessary for rural develop- ment, such as credit, improved extension services and rural electrification, are at present, or would be in the future, handled under separate projects. The great need to assist the rural sector is supported both by the Government and the Bank Group, and during the implementation of the proposed project the Government would prepare for Bank Group financing a proposal for implementing a similar project in an additional ten low-income provinces. 2. THE PROJECT AREAS General 2.01 The following six provinces, which are located in four out of the Philippines twelve regions, would be covered by the project works: Abra (Region 1) and Kalinga-Apayao (Region 2) in Northern Luzon; Aklan, Antique and Capiz on Panay island in the Western Visayas (Region 6); and Bohol (Region 7) in the Central Visayas (Map 13274). Due to their mountainous terrain, Abra and Kalinga-Apayao are sparsely populated, but the other four provinces, particularly Bohol, are densely settled. Rice is the major crop of all the provinces, corn is also important in Bohol, Abra and Antique, sugarcane in Capiz, coconuts in Bohol and Aklan, while coffee is a newly developing crop in Kalinga-Apayao. Except for Kalinga-Apayao, the provinces are among the poorest in the Philippines with average family incomes below the national average. Mining enterprises in Kalinga-Apayao increase the average income. In all provinces, existing infrastructure is insufficient to serve the population, and most of it requires rehabilitation. General statistical data for each province are shown in Table 2.1. Table 2.1: GENERAL STATISTICS OF PROJECT PROVINCES Province Kalinga- Philippines Abra Apayao Aklan Capiz Antique Bohol Total area (sq km) Ia 300,000 3,976 7,048 1,818 2,633 2,522 4,117 Total population (1975) lb 42,517,330 163,414 154,515 277,312 432,225 317,730 740,236 Population density/c per sq km 142 41 22 153 164 126 180 per cultivated sq km 501 710 297 514 424 588 521 Total area cultivated ('000 ha) /d 8,494 23(6%) 52(7%) 54(30%) 102(39%) 54(21%) 142(34%) Average income (Pl/capita) /e 628 293 769 309 486 267 347 Rate of urbanization (%) 32 18 7 11 15 14 14 Literacy rate (%) 83 79 70 79 77 78 81 o0 Ia Philippine Yearbook, 1975. /b Population Dimension of Planning, 1975 (Medium Estimates). /c Computed. /d 1971 Census of Agriculture. /e Computed from data of Family Income and Expenditures Survey, 1971. -9- Climate 2.02 The climate in the project areas is tropical and monsoonal. Warm temperatures throughout the year allow a twelve-month growing season with irrigation. The average annual rainfall in the provinces varies between about 1,500 mm in Bohol to 2,000-2,500 mm in the other provinces and the rainfall distribution patterns differ markedly. In Abra, Antique and southern Kalinga- Apayao the six winter and spring months (November-April) are dry, while the summer and fall months are wet. In northern Kalinga-Apayao, Aklan, Capiz and north-eastern Bohol the dry season is shorter and lasts only one to three months; in south-western Bohol, rainfall is spread throughout the year with the heaviest rainfall in October-November. The rainfall, together with river flows in the wet season, is generally adequate for a single rice crop. Dry season cropping, however, entails a greater risk and irrigation is essential to ensure a crop. Typhoons which damage crop production are more prevalent in Abra and Kalinga-Apayao than in the other four provinces. Although these northern provinces average some two typhoons per year, typhoon damage is usually localized, and not necessarily spread throughout the whole province. Climatological data in a summarized form are given in Table 2.2. Topography and Soils 2.03 Abra and Kalinga-Apayao are adjacent landlocked provinces with mountainous, rugged topography, and only some 5% of their area is arable. Agriculture is concentrated in major river valleys, the Abra river in Abra, and the Abulog and Chico rivers in Kalinga-Apayao. Aklan and Antique are mountainous with around 15% of their area arable. Aklan, in the northwest corner of Panay island, has a broad lowland area bounded in the south and west by continuous mountain ranges, while Antique is a narrow strip of land occupying the island's west coast, and consists of small lowland pockets interspersed with rockspurs descending from the western highlands towards the coast. Capiz, situated in the island's northeast quarter, has 29% of its area arable, with agriculture concentrated mainly in the wide northern plains of the Panay river's extensive delta. Bohol is generally mountainous and slopes abruptly into the sea, with rough terrain broken by deep gullies and gorges of limestone formations. Eighteen percent of the island is arable. These areas are found in the narrow coastal plain and in alluvial lowlands, open valleys and rolling landscapes of the island. Four rivers, the Inabanga and Ipil to the north and the Lobor and Abatan to the south, drain the island. 2.04 The soils in each province may be grouped into three general categories: plain and valley soils; intermediate upland soils; and soils of the hills, mountains and miscellaneous land types (swamps, beach sands, riverwash and stonyland). Table 2.3 summarized from soil survey reports of the Bureau of Soils shows the percentage of each province's area falling into these categories. Clays and clay loams of various types predominate in the mountains, hills and lowlands of Abra and Kalinga-Apayao. Kalinga-Apayao also has large areas of sandy loams, where the lowland soils are suitable for rice cultivation, while corn, coffee, upland rice and vegetables are grown on the mountain slopes and upland soils. In Antique, lowland soils are mainly Table 2.2: SUMMARY OF CLIMATOLOGICAL DATA Period of Province Location Item observation Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Abra Vigan, Average rainfall (mm) 1949-74 3 3 6 17 121 400 532 727 375 139 36 18 2,377 Ilocos Sur Relative humidity (%) 1949-74 76 77 76 77 77 84 87 88 87 83 80 78 Mean temperature (OC) 1949-74 25.5 25.9 27.1 28.3 28.9 27.9 27.1 26.7 26.8 27.3 26.8 26.2 Evaporation (mm) 1949-74 159 162 205 212 208 165 161 147 146 160 150 144 2,019 Kalinga- Tuguegarao, Average rainfall (ma) 1947-73 29 22 37 62 141 161 235 207 217 238 284 131 1,764 Apayao Cagayan Relative humidity (%) 1949-74 80 76 72 68 70 75 77 79 81 82 84 84 Mean temperature (OC) 1947-72 23.8 24.6 26.6 27.6 29.3 29.1 28.5 28.1 27.7 27.3 25.4 24.1 Evaporation (mm) 1957-68 148 155 207 233 232 191 180 168 167 163 134 137 2,115 0 Aklan and Iloilo City, Average rainfall (mm) 1949-73 57 32 31 43. 156 254 383 354 281 250 202 109 2,152 1 Antique Iloilo Relative humidity (2) 1949-75 82 81 77 74 77 82 84 84 84 84 85 85 Mean temperature (oC) 1949-73 25.7 26.0 26.8 28.1 28.6 27.9 27.4 27.2 27.3 27.2 26.9 26.2 Evaporation (mm) 1957-65 147 154 207 212 206 166 152 152 141 144 134 139 1,954 Capiz Roxas City, Average rainfall (mm) 1949-75 121 52 59 55 158 235 260 239 245 336 236 183 2,179 Capiz Relative humidity (2) 1949-75 79 78 77 74 75 79 80 80 81 81 80 80 Mean temperature (OC) 1949-75 26.6 26.8 27.5 28.8 29.3 28.7 28.4 28.4 28.3 28.0 27.8 27.1 Evaporation (mm) 1949-75 141 138 176 186 182 151 153 147 139 146 139 138 1,836 Bohol Tagbilaran City, Average rainfall (mm) 1960-75 101 94 95 71 90 150 130 119 127 181 218 110 1,486 Bohol Relative humidity (2) 1960-75 83 82 80 79 79 82 82 79 80 84 84 84 Mean temperature (OC) 1960-75 25.9 26.0 26.6 27.6 28.4 28.0 27.9 28.0 28.3 27.7 27.3 26.8 Evaporation (mm) 1960-75 111 103 125 142 137 114 107 122 114 115 104 101 1,395 - 11 - sandy loams while clays and clay loams, formed mostly from stratified rocks, predominate in the mountains and hills. Capiz and Aklan soils include recent alluvial flood plain and upland clay-loams developed from consolidated materials. In Bohol, many soil types are encountered. The lowland clay loam soils are usually underlain by gravel, while clay soils predominate in the uplands. Table 2.3: PROVINCIAL SOIL GROUPING Province Abra Kalinga-Apayao Aklan & Capiz Antique Bohol ----------------------- () ------------------ Soils of plains and valleys 4 19 18 19 2 Soils of intermediate uplands 10 37 52 41 94 Soils of hills, mountains and miscellaneous 86 44 30 40 4 Population, Farm Size and Land Tenure 2.05 About 2.1 million people live in the six provinces, with 36% of them residing in Bohol, the most populous province. Kalinga-Apayao and Abra, the two least populated areas, contain only 15% of the population. Almost 87% of the people live in rural areas, while only 13% live in urban areas. Annual population growth rates vary from 5.2% in Kalinga-Apayao to 1.5% in Bohol. Migration into Kalinga-Apayao, and out of Bohol, cause these extreme variations from the country's average growth rate of 3% per year. 2.06 Since 1972, Government has pursued a program of agrarian reform aimed at the transfer of land ownership to rice and corn tenant farmers. Presidential Decree No. 27 (PD 27), the basic legislation of the new agrarian reform program, provides for transferring ownership to sharecropper and leaseholder tenants of up to 3 ha irrigated or 5 ha rainfed rice or corn land. According to PD 27, a landlord may retain up to 7 ha if he tills the soil himself. Since there are some 2 million rice and corn farmers on about 4 million ha, of which less than 1 million ha are irrigated, there is little prospect of achieving the 3 ha irrigated and 5 ha rainfed objectives. Furthermore, some 85% of the landlords have holdings of less than 7 ha and there are no firm plans at present for transfer of these lands. In 1975 the Department of Agrarian Reform (DAR) issued transfer certificates to tenants on all land holdings over 24 ha, and Government is now proceeding with the transfer of land in holdings between 7 and 24 ha. In October 1976, Government modified PD 27 to include holdings of less than 7 ha, belonging to landowners - 12 - with more than 7 ha of other agricultural land, or belonging to landowners with residential, commercial or urban land from which they derive adequate incomes. At present the number of landlords and tenants affected by the new legislation is not known. About 7,600 land transfer certificates were issued by DAR for about 8,500 ha in six provinces by June 30, 1976. 2.07 According to the 1971 Census of Agriculture, there are 166,000 farms in the six provinces occupying about 426,000 ha. Table 2.4 shows the farm size distribution and average farm size for each province. Rice and corn farms represent about 67% of all the farms and 57% of the farm area of these six provinces. The average size of rice farms, representing 60% of the farmers and 51% of the area, ranges from 1.5 ha in Abra to 2.5 ha in Kalinga-Apayao and Capiz. Table 2.4: PROVINCIAL FARM SIZE DISTRIBUTION Abra Kalinga-Apayao Antique Aklan Capiz Bohol Farm size No. Area No. Area No. Area No. Area No. Area No. Area (ha) ----------------------------- (%) ------------------------ Under 1.0 42 13 15 2 33 9 16 3 7 1 24 6 1.0-3.0 45 44 52 29 50 40 53 32 62 30 54 41 3.0-5.0 9 20 24 28 12 21 20 26 20 21 17 27 5.0-10.0 2 8 7 14 4 12 7 16 6 10 4 10 Over 10.0 2 15 2 27 1 18 4 23 5 38 1 16 Total 100 100 100 100 100 100 100 100 100 100 100 100 Total no. of farms 13,400 17,000 26,600 19,100 29,000 61,100 Total area of farms (ha) 22,600 52,400 53,700 53,500 101,600 142,100 Average farm size (ha) 1.7 3.1 2.0 2.8 3.5 2.3 Average rice farm size (ha) 1.5 2.5 1.7 2.2 2.5 2.1 2.08 Table 2.5 below shows farm tenure by province according to the 1971 Census of Agriculture. - 13 - Table 2.5: TENURE STATUS OF RICE FARMERS Tenure of Operator Owner Part Owner Tenant Total No. Area No. Area No. Area No. Area ---------------------- ) ----------------------- Abra 58 57 30 32 12 11 100 100 Kalinga-Apayao 77 81 7 7 16 12 100 100 Aklan 46 45 31 34 23 21 100 100 Antique 60 60 17 20 23 20 100 100 Capiz 27 38 14 15 59 47 100 100 Bohol 50 57 31 28 19 15 100 100 Existing Irrigation Facilities 2.09 About 51,600 ha in the six provinces are served by national, communal and private irrigation systems, details of which are summarized in Table 2.6. National irrigation systems are generally systems with areas larger than 1,000 ha which are built, operated and maintained by the National Irrigation Administration (NIA). Communal irrigation systems are generally about 100- 300 ha which are organized on cooperative lines into Irrigation Systems Asso- ciations (ISAs). The systems are built by NIA who is paid by the beneficiaries through the Farm Systems Development Corporation (FSDC). After the completion of construction, communal systems are operated by ISAs. Private irrigation systems are smaller usually less than 100 ha, generally irrigated by pumps and are built and operated by private individuals. Table 2.6: SUMMARY OF IRRIGATION SYSTEMS Number of Systems Wet Season Irrigated Area (ha) Province National Communal Private Total National Communal Private Total Abra 1 70 8 79 300 6,300 100 6,700 Kalinga-Apayao 1 90 178 269 4,100 12,100 1,400 17,600 Aklan 2 25 25 52 3,400 1,300 200 4,900 Antique 1 38 70 109 4,400 5,100 700 10,200 Capiz 1 17 72 90 500 1,000 1,200 2,700 Bohol - 202 199 401 - 8,100 1,400 9,500 Total 6 442 552 1,000 12,700 33,900 5,000 51,600 - 14 - Existing Road Facilities 2.10 There are about 8,700 km of roads in the six provinces classified as national, provincial, municipal and barangay roads (Table 2.7). About 20% of these roads are national roads, which are built and maintained by the Department of Public Highways (DPH). A survey conducted by DPH in 1976 indicated that about two thirds of these roads are in fair to bad condition, generally due to neglect of maintenance. The provincial roads, accounting for about 27% of total road network are built by the provincial governments (under DLGCD) which are also responsible for their maintenance with the aid of a Government subsidy covering about two thirds of the total maintenance costs. About 80% of the provincial roads are considered in fairly bad condition and require considerable rehabilitation. Since 1968, USAID has provided financial and technical assistance under the Provincial Development Assistance Program (PDAP) to develop planning and implementing capabilities in certain selected provinces. Under the Fourth Highway Project, provision would be made for technical assistance to DLGCD to improve planning, detailed engineering and construction supervision at the provincial level under PDAP. The municipal roads, which are built and maintained by the concerned munici- palities account for about 6% of the total road network. The municipalities receive from Government financial assistance amounting to one third of the maintenance cost. About 40% of the municipal roads are in good condition. The remaining 47% of the road network is classified as barangay roads, 20% of which is considered in good condition. Due to poor surfacing and inadequate cross drainage structures, many segments of these roads are impassable during the wet season. Table 2.7: SUMMARY OF EXISTING ROADS Length of Various Classification (km) Province National Provincial Municipal Barangay Total Abra 140 420 100 940 1,600 Kalinga-Apayao 350 170 50 270 840 Aklan 140 270 60 370 840 Antique 190 230 70 620 1,110 Capiz 160 460 40 390 1,050 Bohol 570 870 210 1,580 3,230 Total 1,550 2,420 530 4,170 8,670 2.11 The Bureau of Barangay Roads (BBR) was established under Presidential Decree No. 702 (PD No. 702) in May 1975 to accelerate the sys- tematic construction and maintenance of roads servicing rural areas. Before the promulgation of PD 702, no central funds were available for the mainte- nance of barangay roads, which were the responsibility of Barangay councils. Maintenance was carried out by manual labor recruited by the Barangay - 15 - Captains, and in most instances maintenance standards were poor. Since the establishment of BBR, the benefits from increased budgetary allocations (although still inadequate), and some organized maintenance work, are becom- ing apparent. As a large proportion of existing barangay roads is often impassable in the wet season due to poor surfacing and flooding, and as agriculture is the mainstay of these provinces, improvement of these roads is essential for rural development. Ports 2.12 There are 31 ports in four of the six project provinces that have access to the sea. Aklan is served by four municipal ports; Antique and Capiz are each served by one national and one municipal port; and there are about 21 ports scattered around the island of Bohol, but only four of these ports have a significant volume of traffic, the rest having minimal trade activities and being largely abandoned. The national port of Tagbilaran is foremost among the island's ports. Many of the existing minor ports in the project provinces operate inefficiently because of initial poor planning, lack of maintenance and inefficient management. Most facilities require basic rehabilitation and improvements. Five ports were identified by the Government for improvement under the Project. Two municipal ports in Bohol have been excluded from the Project because of their close distance to Tagbilaran, the major port of the island. The remaining three ports are among the five major ports of Panay Island and are located within or close to the capital cities of Aklan, Antique and Capiz Provinces. Culasi Port in Capiz Province built in 1935 is in poor condition and needs frequent dredging. In recent years, there has been a substantial increase in fishing activities requiring a new fish terminal to absorb the traffic. San Jose de Buena Vista Port built in 1968 is located in the capital town of Antique Province and is the only port handling shipping in the western coast of Panay Island. During the southwest monsoons strong wave action curtails the port's activities for about five months. The construction of a breakwater would provide a suffi- ciently sheltered basin area and convert the port into an all-weather port. The improvement of Dumaguit would provide the province of Aklan an alternate port with ample space for future expansion. 2.13 These ports serve small vessels with a length ranging from 30 to 70 m. Reliable traffic data are not available, data summarized in Table 2.8 are based on spot checks made in 1975/76. The estimated traffic expected to pass through these ports by 1985 is based on the present and projected data of agricultural production and general merchandise. The Bank Group's sector policy for the Philippines advocates concentration of port activities in a few selected locations and improving the major road network. According to this policy, the increased traffic should be handled by Iloilo port. This would require the cargo to be moved on coastal mountainous roads for 100-200 km distance. Although the roads are classified as national roads they are in poor condition due to neglected maintenance. These ports are of major importance to the economy of each province and serve its rural population whose interregional connection and lifeline for transportation as well as marketing is based on them. The Government considers these ports essential to the regional and provincial rural development. The works included under the project are in the nature of restoration and provide for such basic needs as storage area, water and electricity at a minimum investment. - 16 - Table 2.8: SUMMARY OF PORTS TRAFFIC 1975/76 1985 Port Province General cargo General cargo (tons) (tons) San Jose de Buena Vista Antique 15,000 26,000 Dumaguit Aklan Negligible 10,000 Culasi Capiz 100,000 125,000 Barangay Health Stations 2.14 Rural Health Units (RHU) are being improved and iuilt throughout the Philippines under a Bank-assisted Population Project (Loan 1035-PH) to serve municipalities with populations of 5,000 to 50,000. Barangay Health Stations (BHS) serve villages with populations of less than 5,000, and are manned by a midwife and supported by the nearby RHU. At present there are 97,99, 123 and 116 RHUs in Region 1, 2, 6 and 7 respectively. Under the proposed project, 60 barangay health stations would be built, which would complement the rural health units built or improved under the population project. Rural Water Supply 2.15 An ongoing barangay water program is administered under the Pro- vincial Development Assistance Program (PDAP). This Program, developed jointly by the Department of Local Government and Community Development (DLGCD) and US Agency for International Development (AID), includes 28 provinces. The program at present is limited to serve villages of 300 to 5,000 inhabitants, but will eventually cover villages and towns of up to 30,000 people. In order to complement this program, and to provide water supply to rural areas not covered by this program, the water supply component would provide facilities to serve mostly villages of less than 300 inhabi- tants and a few with up to 400 inhabitants. - 17 - 3. THE PROJECT Project Description 3.01 The project proposed for Bank Group financing would include: (a) Communal Irrigation Development construction of about 53 new irrigation systems serving some 8,500 ha and rehabilitation of two existing systems serving 900 ha; (b) Barangay Roads (i) construction of about 820 km of new and upgrading of about 240 km of existing barangay roads; construction of about 290 km of new access roads to serve the proposed communal irrigation systems, and of about 40 km of access roads to serve the proposed barangay health stations in Abra and Kalinga-Apayao provinces; and (ii) engagement of a highway engineer and consulting firms to assist with detailed engineering, design, supervision of construction and maintenance of the project roads. (c) Ports rehabilitation and improvement of two national ports and one municipal port. (d) Barangay Health Stations (i) construction of 60 health stations; and (ii) procurement of medical equipment, furniture, supplies and minor instruments for the proposed health stations. (e) Rural Water Supply (i) procurement of drilling equipment and materials for the construction of about 300 wells; and (ii) provision for training and strengthening of the existing staff of the Bureau of Public Works (BPW) at the center and in the six project provinces. The project would also make provision for the preparation of a future rural infrastructure project in ten provinces to be selected by the Government. - 18 - Communal Irrigation Systems 3.02 Project Works. The project would provide for the construction of some 53 new irrigation systems ranging in size from 50 to 1,100 ha and serving about 8,500 ha, and the rehabilitation of two systems serving about 900 ha. All systems would be served by gravity irrigation mostly based on run-of-the-river supply, except for two systems in Bohol with proposed impounding reservoirs. Thirty-eight systems would have diversion weirs and the remaining 15, located on larger streams, would be served with only an intake structure without a diversion weir. A breakdown of systems proposed for inclusion in the project is presented in Annex 1 and summarized below: Number of Irrigable area Cropping Province systems First crop Second crop intensity -------- (ha) --------- (%) Abra 8 1,100 900 182 Kalinga-Apayao 18 2,300 1,800 178 Aklan 5 1,200 800 167 Antique 11 2,700 1,500 156 Capiz 6 1,200 400 133 Bohol 7 900 600 167 Total 55 9,400 6,000 164 3.03 The diversion weir would normally be an ogee shape spillway with crest 1.0 m to 2.0 m high above the stream bed, gated sluiceway and gated intake works. It would be designed to pass a discharge approximately twice the discharge capacity of the stream channel (25-year frequency). The gated intake structure would be a constant head orifice turnout for structures with a capacity equal to or less than 1.0 cu m/sec. A measuring device would be provided for intake structures with capacities greater than 1.0 cu m/sec. The conveyance system would consist of an unlined earth canal with a provision for lining in portions with erosive soils. For effective control of water deliveries, check structures and gated turnouts would be provided. For smaller systems of areas less than 100 ha the main canal would also serve as a distribution channel. For larger systems, if required, secondary unlined canals would be provided. The proposed level of on-farm distribution is similar to that being implemented in other Bank Group-assisted projects. The main farm ditch serving a rotational area of about 30-50 ha would be built under the project. Gravel surfaced O&M roads 3.5 m wide with 15 cm thick surfacing would be built along all main canals. Access roads to and within the systems would be built under the barangay road component of the project. Systems with drainage problems would be provided with outlet and main or secondary drains; farm drainage in most systems would be from field to field. - 19 - 3.04 Status of Engineering. Preliminary project planning studies, designs and estimates were carried out by the Project Development Department (PDD) of NIA. Since only limited data are available for the proposed systems, ten representative systems accounting for about 2,400 ha or 25% of the total area were studied in detail. The studies included surveys of the proposed diversion sites and strip topographic maps of 1:4,000 scale with 25 cm contour intervals of the proposed main and secondary canals. Construction quantities were estimated from the preliminary profiles of main and secondary canals. Structures along these canals were sized according to the field surveys and preliminary investigation. Cost of on-farm facilities (main farm ditch) and drainage were based on unit quantity estimates per hectare of each majc-r item obtained from sample areas applicable to a particular system for which designs were prepared. The planning and design of the ten selected systems has been carried out to a sufficient degree to permit the detail design of these systems with limited additional work. Sufficient investigation have been made to ensure that suitable materials are available for construction of canal embankments and maintenance roadways. 3.05 The topographic maps of 1:4,000 scale used in the sample area studies of the selected systems were prepared by the conventional ground survey methods. The topographic maps of the service area on a scale of 1:4,000 would be prepared similarly and would be used for detail planning and design of all works. Construction of the irrigation systems would begin in early 1979 (see Figure 3.1) and all systems are expected to be completed by mid-1982. 3.06 Preparation and Evaluation Procedures. In order to ensure that each system proposed for implementation under the project is technically feasible and economically viable, the following procedure would be implemented in the preparation and evaluation of the project systems: (a) preparation of scheme proposals by the regional offices including topographic surveys and mapping, suitability of soils, water availability and quality, preliminary layouts and estimates of potential cropping intensity, present and potential yields, cost estimates and economic analysis; (b) evaluation of scheme proposals by a multi-disciplinary team consis- ting of senior staff from the PDD of NIA based on the following criteria: (i) at least 70% of farms would be less than 1.0 ha for systems of 100 ha or less and 1.5 ha for larger systems; (ii) cropping intensity would be 130% or more; (iii) economic rate of return would be 10% or more; (iv) to insure an adequate institutional support for smaller systems, the distance between two smaller systems would not exceed 20 km; - 20 - (v) all farmers in the proposed system have been organized into Irrigation Service Association (ISA) and properly registered with the Securities and Exchange Commission of the Philippines; and (vi) the Farm Systems Development Corporation (FSDC) has entered into a loan agreement with the ISA to repay NIA the cost of constructing the system; and (c) the evaluation team would produce an Evaluation Report which would become the basis of detailed design to be carried out by the regional offices. 3.07 An assurance was obtained that NIA would submit to the Associa- tion for review prior to implementation an evaluation report for the systems costing more than P 3.0 million and summary data forms for the remaining systems. Agreement was reached on the content and format of evaluation reports and summary data forms. The preparation procedure outlined above would be modified slightly for the two proposed impounding schemes in Bohol, which would require considerable foundation and hydrologic investigations. These schemes would be investigated and prepared by the specialized staff of PDD. An assurance was obtained that the NIA would, under arrangements satisfactory to the Association, cause the dams built under the Project for the proposed impounding reservoirs, to be periodically inspected in accordance with sound engineering practices in order to determine whether there are any deficiencies in the condition of such structures, or in the quality and adequacy of maintenance or methods of operations of the same, which may endanger their safety. To this end, the NIA shall propose to the Association appropriate arrangements for the Association's review no later than one year before the expected completion of such structures. 3.08 Water Supply and Demand. The most important aspect of design for communal systems is the selection and evaluation of the water source, usually in the absence of any flow records for the stream in question. The most critical hydrologic information is the dependability of the water supply, that is, the minimum flow of a specified duration which would occur with specified probability. The normal practice in the Philippines is to use the monthly flows with 80% probability of occurrence (four out of five years) as design flow, which determines the area that can be irrigated from a given source. In a few cases (mostly the larger rivers) direct observations would be analyzed to estimate the design low flow. In other cases, records from adjacent or nearby catchments would be correlated and extrapolated to produce a simulated record for the stream in question. Calculations based on this procedure would be supplemented wherever possible by field observations, information from local inhabitants and consideration of the existing water rights on each stream. 3.09 A preliminary investigation for each system was carried out accord- ing to the procedure outlined above. For water demand, it was assumed that transplanted rice using 120-day nonphoto-sensitive varieties in both wet and - 21 - dry season would be the dominant crop. Water requirements in the six pro- vinces (Table 3.1) were based on the cropping calendar shown in Figure 5.1. Annual diversion requirements are estimated to vary between provinces from a depth of 1.9 m to 3.8 m of which 1.3 m to 2.6 m would be required in the dry season. The size of the irrigated area for each system was determined from preliminary simulated estimates of monthly stream flows and water requirements. The cropping calendar was chosen to maximize the use of rainfall. No use of return flow was assumed. About 6,000 ha could be irrigated during the dry season. Adequate water supply is available to meet the supplementary irrigation demand of each system during the wet season. The currently irrigated areas and the irrigable areas selected for development under the project are summarized below and given in detail for each system in Annex 1: Province Kalinga- Abra Apayao Aklan Antique Capiz Bohol Total Currently Cultivated Area First crop (ha) Rainfed 1,100 2,300 1,200 1,900 1,100 900 8,500 Irrigated - - - 800 100 - 900 Second crop (ha) - - 350 50 - 400 Cropping intensity (%) 100 100 100 113 104 100 104 Future Irrigable Area First crop (ha) 1,100 2,300 1,200 2,700 1,200 900 9,400 Second crop (ha) 900 1,800 800 1,500 400 600 6,000 Cropping intensity (%) 182 178 167 156 133 167 164 Although the future irrigable areas for each system would be determined taking into account the water rights of existing users, assurances were obtained from the Government that the necessary water rights for each system would be granted to the concerned ISA and no other rights which could adversely affect the project water supply would be granted except by mutual agreement with the Association. Barangay Roads 3.10 Project Works. This component of the project would consist of 155 stretches of roads for a total length of about 1,400 km in the six provinces of the project. The road stretches would range in length from 3-17 km as shown in Annex 1. However, since the process of selection and evaluation is still continuing, the final list of roads may vary slightly from those listed at present. The improvement of existing roads and the construction of new roads would provide a single lane, all weather gravel-surface for medium-sized trucks and four-wheel drive utility vehicles. The design speeds, geometric standards and surface requirements would meet minimum all-weather traffic requirements as dictated by the low traffic volumes on barangay roads. Table 3.1: PROJECT WATER REQUIREMENTS SUMMARY (mm) Aklan, Antique and Abra Province Kalinga-Apayao Province Capiz Provinces Bohol Province First Second Annual First Second Annual First Second Annual First Second Annual crop crop crop crop crop crop crop crop Paddy Land Preparation Saturation 70 80 150 70 80 150 70 80 150 60 70 130 Evaporation 170 180 350 180 195 375 180 195 375 115 115 230 Percolation 60 60 120 60 60 120 60 60 120 60 60 120 Subtotal 300 320 620 310 335 645 310 335 645 235 245 480 Flooding for cultivation 70 70 140 70 70 140 70 70 140 70 70 140 Crop Water Requirements Evapotranspiration 501 603 1,104 376 511 887 347 551 898 340 356 696 Deep percolation 180 180 360 180 180 360 180 180 360 180 180 360 Subtotal 681 783 1,464 556 691 1,247 527 731 1 520 536 1,056 Total field water requirement 1,051 1,173 2,224 936 1,9 2,032 907 1,136 2,043 825 851 1,676 Less effective rainfall 576 7 583 461 451 912 659 200 859 585 271 856 Net farm irrigation requirement 475 1,166 1,641 475 645 1,120 248 936 1,184 240 580 820 Farm irrigation efficiency (%) 60 70 60 70 60 70 60 70 Farm requirement (turnouts) 792 1,665 2,457 792 921 1,713 413 1,337 1,750 400 829 1,229 Conveyance efficiency (%) 80 80 80 80 80 80 80 80 System operation efficiency (%) 80 80 80 80 80 80 80 80 Diversion requirement (headworks) 1,237 2,602 3,839 1,238 1,439 2,677 645 2,089 2,734 625 1,295 1,920 Overall irrigation efficiency 38 44 38 44 38 44 38 44 Water duty for diversion and conveyance facilities @ 200% cropping intensity (1/sec/ha) 2.70 2.40 1.80 1.70 - 23 - 3.11 Existing roads on reasonably satisfactory alignments would be improved by restoring the formation to the specified width, compaction of the subgrade to a suitable California Bearing Ratio (CBR) level and provi- sion of a gravel running surface. Due to the intense storms and frequent typhoons in the Philippines, particular attention would be given to drainage and cross drainage structures. Reinforced concrete bridges would be pro- vided on major rivers or stream crossings. The base course level of road embankments passing through rice areas would be about 50 cm above the ground surface and above the expected normal flood water level. Existing roads with unsatisfactory sub-soil conditions, steep gradients and sharp curvatures would be replaced with new suitable alignments. Surveys and detail design would be carried out according to the accepted DPH practice for minor roads and the guidelines shown in Table 3.2. The top of the gravel finished surface would be a minimum of 60 cm above normal ground level in rice cultivated areas and be of screened or crushed material with a minimum thickness of 20 cm. Single lane 4.0 m-wide bridges and culverts would be permanent concrete structures. Piles used for the foundation of these structures would have a minimum bearing capacity of 50 tons. The drainage structures would have a free board of 1.0 m above the maximum estimated water level (flood of 10-year frequency). Drainage ditches along both side of the road would be designed to carry flows of 5-year frequency. Table 3.2: DESIGN STANDARDS FOR BARANGAY ROADS Terrain Flat Rolling Mountainous Design speed (km/hr) 60 40 30 Pavement width (m) 4 4 4 Shoulder width (m) 1 0.5 0.5 Minimum radius (m) 120 80 50 Maximum gradient (%) 6 8 10 Stopping sight distance (m) 80 50 30 Minimum right-of-way width (m) (a) Farm to market road 15 15 15 (b) Through roads 25 25 25 Single axle design load for travelled way 5 tons Bridge loading = AASHO H-15-44 (Single lane 4.0 m wide) - 24 - 3.12 Status of Engineering. Preliminary project planning studies, designs and estimates were carried out by the Project Planning and Development Service (PPDS) of DPH with assistance from field offices and the BBR central office. The preliminary alignment of each stretch of road identified in Annex 1 was first chosen from all available data including topographic maps, and then checked in the field. A longitudinal profile for each stretch of the proposed alignment was prepared by survey in the field. Detailed cross sections at 50-100 m intervals and profiles were prepared for one project road in each of three areas representative of the type of terrain to obtain earth- work quantities for the estimates. In-depth investigations were made of the foundation conditions at each bridge site by hand auger borings and similar random soil samples were taken along the road alignment. Materials resource surveys were made in each province to ascertain the availability of suitable construction materal for computing unit costs. Bridge super structure designs are based on standard type of reinforced concrete deck girder bridges exten- sively used in the Philippines. Construction of the barangay roads would begin in early 1979 (Figure 3.1). All project roads are expected to be completed by end-1982. 3.13 Preparation and Evaluation Procedure. In order to ensure that each road stretch proposed for implementation under the project is technically feasible and economically viable, a special team from the PPDS of DPH would be responsible for final evaluation of the project roads based on the following criteria: (a) the proposed road would provide access to roads of equal or better standard and would not be less than 3 km in length, with an area of influence not overlapping those of existing or planned roads; (b) proposals would conform with provincial road development priorities; (c) each stretch of road would serve a minimum of two villages and/or a population of about 100/km of proposed road stretch; (d) the economic rate of return would be 10% or more. The PPDS would produce an evaluation report which would become the basis of detailed design. An assurance was obtained that DPH would submit evaluation reports for review by the Association prior to implementation for the road stretches costing more than P 4.0 million and summary of data forms for the remaining road stretches costing less than P 4.0 million. Agreement was reached on the content and format of evaluation reports and summary data forms. - 25 - Ports 3.14 Project Works. Three ports located in three project provinces would be rehabilitated and improved under the project. Two ports, San Jose de Buena Vista in Antique province and Culasi in Capiz are national ports operated and maintained by the Philippines Port Authority (PPA). The third municipal port in Aklan province is operated and maintained by its municipality. 3.15 San Jose de Buena Vista port is the main port of Antique province serving its capital town. The port facilities consist of a 76 m long reinforced concrete wharf connected to a 200 m long rock causeway. It has a controlling water depth of 4.0 m below Mean Low Water Level (MLWL) alongside the wharf to accommodate ferries, motor launches and fishing boats. The larger (60 m or more) interisland ships cannot use the port. A rock breakwater extends 87 m southeast toward a coral formation, but it is too short to protect the port during the southwest monsoon. The port has an unsurfaced storage area of about 2,500 sq m. Electricity, although unreliable, is supplied from the town. To protect the port from the southwest monsoon winds and provide an all-weather sheltered basin area, the rock breakwater would be realigned and extended by about 200 m to the offshore reef. A timber section of the existing wharf would be replaced with reinforced concrete. An area of about 4,000 sq m behind the wharf would be reclaimed, and surfaced and 500 sq m would be covered by a shed. An independent water supply would be provided. Electricity would be extended to the wharf apron and the storage areas would be fenced. 3.16 Culasi port, situated 8 km northeast of Roxas city, is the main port of Capiz province. The port facilities consist of a 56 m long and 12 m wide reinforced concrete wharf connected at right angles to a 155 m long reinforced concrete pier. The controlling depth along the wharf is 5.0 m below MLWL and along the pier it varies between 3.0 m and 5.0 m. Storage area is limited to an open partly surfaced area of 3,800 sq m and a cargo shed of about 280 sq m. The port has no water supply and is presently without electricity. The poor alignment of the southern breakwater hampers the movement of vessels and leads to rapid accumulation of littoral materials from the bay within the berthing area requiring frequent dredging. The breakwater would be realigned to minimize silting and widen the port entrance. To accommodate the increasing fishing boat traffic, a new fishing boat pier (100 m long) would be constructed. An area of about 3,000 sq m would be reclaimed and the open storage areas would be asphalted and fenced. Provisions would be made for the supply of water and electricity. 3.17 Dumaguit municipal port is located about 2 km from the mouth of the New Washington river and 21 km from Kalibo town, the capital of Aklan province. It is located 8 km downstream of the inland and more frequently used port of New Washington. The river channel leading to New Washington is shallow, subject to heavy silting, and requiring frequent dredging. The port also has limited berthing space and insufficient cargo storage area. The water depth at Dumaguit ranges from 4 m to 12 m compared to 3.5 m at New Washington. The improvement of Dumaguit port would permit the handling of larger vessels and increased traffic. At present Dumaguit port handles - 26 - little traffic, and except for an uncompleted, reinforced concrete pier structure, has no facilities. Based on an inter-island vessel length of about 60 m, a 75 m decking installation would be constructed which would utilize the existing uncompleted pier. Behind the quay an area of about 2,400 sq m area would be reclaimed and 300 sq m passenger/cargo shed would be built. The port would also be provided with water supply facilities. 3.18 Status of Engineering. Project planning and cost estimates of each port were prepared by the Harbors and Ports Division of the Bureau of Public Works (BPW) of the Department of Public Works, Transportation and Communications (DPWTC) with the assistance of Philippines Port Authority (PPA). The works included in the project for each port are based on actual needs determined by field inspection and discussion with the field operating staff of each port. The improvement of the ports would begin in early 1979 (Figure 3.1). All project works are expected to be completed by mid-1981. Barangay Health Stations 3.19 Project Works. Sixty Barangay Health Stations listed in Annex 1 would be built in the six project provinces. These stations would be located in barrios (villages) approximately 5 to 10 km from a Rural Health Unit (para. 2.14). Each health station would be built on a publicly owned 300 sq m plot of land with a floor area of about 50 sq m. The facilities would include a waiting porch, receiving area, minor treatment room, prenatal examination room, infant's examination room, toilet facilities, kitchenette, storage room and utility room. A water supply system of shallow well, pump and small storage tank would be constructed for each station. Some of the proposed barangay health stations in the provinces of Abra and Kalinga-Apayao have no road access, and this would be provided under the barangay road component. 3.20 Status of Engineering. The cost estimates of the barangay health stations were based on a typical design for such buildings in the Philippines. The cost estimate took into account the remoteness of some of the proposed stations. Construction would begin in early 1979 (see Figure 3.1), and would be completed by mid-1981. Rural Water Supply 3.21 Project Works. The proposed wells would be drilled with drilling depths varying from 6 m to about 100 m depending on the aquifer character- istics, and the wells equipped with standard hand pumps. Easy access to the wells would be ensured, a concrete basin facility for washing clothes pro- vided for at each site, and the site fenced. A planning component of the project would stress improving drilling methods and reducing costs. 3.22 Selection, Design and Construction Criteria. In order to reduce costs and minimize maintenance, while at the same time meeting public health standards, the following criteria would be followed: (a) records and logs of existing wells near each site would be evaluated prior to construction in order to indicate possible aquifer conditions; - 27 - (b) wells would be located at least 300 m apart; (c) wells would be situated at least 30 m from any source of con- tamination; (d) pump-bases at least 50 cm above the highest flood level; and (e) aquifers properly screened. Existing design standards would be revised and submitted for the Association's review by December 31, 1978, taking into account the following: (a) drilling depths would be related to aquifer depths; (b) driven wells are less costly than drilled wells where shallow aquifers are encountered; and (c) PVC casl-ngs should be used as well as steel casings, and consideration should be given to PVC and stainless steel screens in place of standard slotted screens. The villagers would provide, free of charge, the land for the well and the access road, as well as provide the labor to construct the road and fencing. The villagers would subsequently maintain the facilities in a satisfactory condition. Preparation of Future Infrastructure Components 3.23 The project would provide for the preparation of a future rural infrastructure project for ten provinces to be selected by the Government. Provinces and project components would be selected by the National Economic Development Authority (NEDA) on the basis of regional development plans, provincial needs and the implementing capacity of the various line agencies. NEDA and DPWTC would be responsible for overall supervision and coordination of project preparation. The project would provide for surveys, mapping and investigations of the various components and wherever necessary for contrac- tual services for investigations and consultants. Assurances were obtained from the Government that engagement of consultant services to assist in project preparation would be under terms and conditions acceptable to the Association. The preparation would begin in mid-1978 and is expected to be completed by mid-1980. Cost Estimates 3.24 Total project costs are estimated at US$59 million, of which US$28 million or 48% is foreign exchange. Project costs are based on quan- tity estimates for feasibility designs and unit prices prevailing in Bank- assisted projects in mid-1976 adjusted to conditions in the six project provinces. Unit prices for equipment, materials and supplies are based on recent quotations received by the agencies responsible for the various project components. The Government exempts its various departments and - 28 - agencies from paying taxes or duties for equipment, material and services procured under foreign-assisted projects, so all the costs exclude such taxes. Line agencies costs for design and construction supervision as well as the central project office operation costs are included under engineering. All costs are indexed to a common level, June 1978 and this is the base cost level for the project. A physical contingency factor based on the degree of investigations completed to date was applied. For such components, as communal irrigation systems and barangay roads, where actual cost estimates were prepared for about 10-25% of the total systems and road segments of the Project, a factor of 20% was used. For other components a factor of 10% was used. Costs due to expected price increases over the implementation period amount to about 19% of total base cost plus physical contingencies, assuming the following annual inflation rates. Annual Inflation Rate % 1978 1979 1980-83 Civil works and services 8 7.5 7 Equipment and vehicles 7 6.5 6 3.25 Details of cost estimates are presented in Tables 3.3 and 3.4, and are summarized below: Foreign Local Foreign Total Local Foreign Total exchange ---- (P million) ---- --- (US$ million) --- (%) Communal irrigation systems 32.5 32.2 64.7 4.4 4.3 8.7 49 Barangay roads 91.5 88.9 180.4 12.4 12.0 24.4 49 Improvement of ports 7.4 5.9 13.3 1.0 0.8 1.8 44 Barangay health stations 3.3 1.6 4.9 0.5 0.2 0.7 29 Rural water supply 5.5 14.8 20.3 0.7 2.0 2.7 74 Preparation of future rural infrastructure project 5.9 2.2 8.1 0.8 0.3 1.1 17 Engineering, administra- tion and supervision 20.7 7.4 28.1 2.8 1.0 3.8 26 Base cost estimate 166.8 153.0 319.8 22.6 20.6 43.2 48 Physical contingencies 26.0 21.2 47.2 3.5 2.9 6.4 45 Expected price increases 36.6 33.0 69.6 4.9 4.5 9.4 48 Total project cost 229.4 207.2 436.6 31.0 28.0 59.0 48 - 29- Table 3.3: OST ESTIMATE Foreign Local Foreign Total Local Foreign Total exchange ---- - (P'000) ------ --- (US$'000) -- - (%) A. Communal Irrigation Systems 1. Civil Works Dam & intake works 9,910 9,920 19,830 1,340 1,340 2,680 50 Main canal & secondary distri- bution system 10,340 10,310 20,650 1,400 1,390 2,790 50 Main & secondary drainage system 590 670 1,260 80 90 170 50 Service roads 2,520 2,510 5,030 340 340 680 50 On-farm facilities & drains 8,660 5,700 14,360 1,170 770 1,940 40 Topographic surveys & mapping 300 290 590 40 40 80 50 Physical contingencies (20%) 7,100 5,400 12,500 960 730 1,690 43 Engineering, supervision & administration (10%) 7,180 - 7,180 970 - 970 - Subtotal 460 810 6 4.700 11,000 43 2. 0&M equipment 150 2,850 3,000 20 380 400 95 Subtotal Item A 46.750 37,650 84,400 6,320 5,080 11.400 45 B. Barangay Roads 1. Civil Works Earthwork-embankment & ditches 54,390 34,630 89,020 7,350 4,680 12,030 40 Gravel surfacing 16,870 16,870 33,740 2,280 2,280 4,560 50 Drainage culverts 5,400 5,400 10,800 730 730 1,460 50 Concrete bridges 11,250 11,330 22,580 1,520 1,530 3,050 50 Surveys & investigations 2,070 2,150 4,220 280 290 570 50 Physical contingencies (20%) 17,320 14,130 31,450 2,340 1,910 4,250 44 Engineering, supervis-ion & administration (10%) 11,100 6,510 17,610 1,500 880 2,380 40 Subtotal 00 91 2 12300 28,0 44 2. O&M Equipment 1,180 17,320 18,500 160 2,340 2,500 95 3. Technical Assistance 300 1,180 1,480 40 160 200 80 Subtotal Item B 119,880 109,520 229,400 16,200 14,800 31,000 48 C. Improvement of Ports Breakwaters & embankments 2,740 1,780 4,520 370 240 610 40 Reclaimed storage area & surfacing 960 890 1,850 130 120 250 50 Dredging 960 670 1,630 130 90 220 40 Wharf extension & repairs 1,260 1,180 2,440 170 160 330 50 Navigational aids 70 70 140 10 10 20 50 New fender systems 370 520 890 50 70 120 60 Electrification, drainage & fence 370 440 890 50 60 110 50 Water supply system 300 220 670 40 30 70 40 Bollard, cleats & bitts 70 80 150 10 10 20 50 Transit sheds 300 150 220 40 20 60 30 Physical contingencies (10%) 740 670 1,410 100 90 190 47 Engineering, supervision & admin- istration (10%) 1,480 - 1,480 200 - 200 - Subtotal Item C 9,620 6,670 16,290 1,300 900 2.200 41 - 30 - Foreign Local Foreign Total Local Foreign Total exchange ---- (P '000) ---- ----- (US$ '000) ----- (z) D. Barangay Health Stations 1. Civil Works Buildings & other facilities 2,000 810 2,810 270 110 380 30 Water supply system 300 150 450 40 20 60 30 Lighting, drainage & fence 440 370 810 60 50 110 45 Physical contingencies (10%) 300 140 440 40 20 60 30 Engineering, supervision & administration (10%) 440 - 440 60 - 60 - Subtotal 3.480 1,470 4,950 470 200 670 30 2. Supplies, Materials & Personnel Furniture & misc. supplies 220 150 370 30 20 50 40 Medical equipment 220 80 300 30 10 40 25 Minor instruments 150 - 150 20 - 20 - Personnel & operating cost (2 years) 590 150 740 80 20 100 20 Physical contingencies (10%) 80 70 150 10 10 20 50 Subtotal 1,260 450 1,710 170 60 230 26 Subtotal Item D 4,740 1,920 6,660 640 260 900 29 E. Rural Water Supply Drilling & transport equipment - 5,180 5,180 - 700 700 100 Materials, pipes, casing, etc. 1,630 9,620 11,250 220 1,300 1,520 85 Project personnel & labor, etc. 3,850 - 3,850 520 - 520 - Training 220 - 220 30 - 30 - Physical contingencies (10%) 220 1,480 1,700 30 200 230 90 Subtotal Item E 5,920 16,280 22,200 800 2.200 3.000 73 F. Preparation for Future Rural Infrastructure 1. Communal irrigation systems Personnel & contractual services 1,700 300 2,000 230 40 270 15 Surveys & investigations 810 370 1,180 110 50 160 30 Vehicles & misc. equipment 70 380 450 10 50 60 80 Subtotal 2.580 1,050 3,630 350 140 490 28 2. Barangay roads Personnel & contractual services 1,410 300 1,710 190 40 230 15 Surveys & investigations 300 140 440 40 20 60 30 Subtotal 1,710 440 2,150 230 60 290 19 3. Ports, water supply & health Personnel & contractual services 960 510 1,470 130 70 200 35 Surveys & investigations 80 70 150 10 10 20 50 Subtotal 19040 580 1,620 140 80 220 36 4. Misc. components Personnel & other services 590 150 740 80 20 100 20 Subtotal Item F 5,920 2,220 8,140 800 300 1,100 28 Total Items A-F 192,840 174,210 367,050 26,060 23,540 49,600 48 Expected price increase 36,560 32,990 69,550 4,940 4,460 9,400 48 Total cost 229,400 207,200 436,600 31,000 28,000 59,000 48 - 31 - Table 3.4: COST ESTIMATE FOR EACH PROVINCE /a (US$'000) Provinces Project Kalinga- Total Abra Apayao Aklan Antique Capiz Bohol Local Foreign cost A. Communal Irrigation System 1. Civil works 1,070 2,550 1,500 2,350 1,080 2,450 6,300 4,700 11,000 2. O&M equipment 60 80 60 80 60 60 20 380 400 Subtotal 1,130 2630 1,560 2, 14 2 6,320 5,080 11,400 B. Barangay Roads 1. Civil works 7,040 6,750 4,240 3,510 2,600 4,160 16,000 12,300 28,300 2. O&M equipment 320 620 320 320 320 600 160 2,340 2,500 3. Technical assistance 30 40 30 30 30 40 40 160 200 Subtotal 7,390 7,410 43, 4,800 16,200 1 C. Improvement of Ports - - 800 500 900 - 1,300 900 2,200 D. Barangay Health Stations 1. Civil works 70 180 100 100 110 110 470 200 670 2. Supplies, materials & personnel 30 60 40 40 30 30 170 60 230 Subtotal 100 240 140 140 140 140 640 260 900 E. Rural Water Supply 1. Equipment & materials 400 400 400 400 400 410 210 2,200 2,410 2. Project personnel & labor 90 100 90 90 90 100 560 - 560 3. Training 10 - - 10 - 10 30 - 30 Subtotal 500 500 490 500 490 520 800 2,200 3,000 F. Preparation for Future Rural Infrastructure 1. Personnel & contractual services 630 170 800 2. Surveys & investigations 160 80 240 3. Vehicles & miscellaneous equipment 10 50 60 Subtotal 800 300 1,100 Total A-F 9,120 10,780 7,580 7,430 5,620 7,970 2,6 23,540 49,600 /a Cost includes physical contingencies (10-20%) and engineering, administration and supervision (10%). - 32 - Financing 3.26 The proposed IDA credit of US$28 million would finance the full foreign exchange cost of the project. It would cover 48% of the total project costs. The Government would provide the remaining P 229.4 million (US$31 million) to the various line agencies from annual budget appropriations. Each implementing agency would maintain a separate account for the project and would submit budget requests to the Project Director (para. 4.02) for approval. The Project Director would forward approved requests to the Commissioner of the Budget, who would disburse all project funds directly to the implementing agencies in accordance with normal Government procedures, which are satisfactory to ensure the continuous and timely flow of project funds. Procurement 3.27 Equipment, vehicles, spare parts and supplies for communal irrigation systems, O&M of barangay roads, force account construction of rural water supply and materials and supplies for barangay health stations costing about US$5.2 million, would be procured after international competi- tive bidding in accordance with Bank Group Guidelines. A preference limited to 15% of the c.i.f. price of imported goods, or the customs duty, whichever is lower would be extended to local manufacturers in the evaluation of bids. Local procurement practices are appropriate for off-the-shelf items costing less than US$10,000 each because the advantages of international competitive bidding would be clearly outweighed by the administrative costs involved. The total cost of such items for all components of the project would not exceed US$300,000. Association staff have reviewed the local procedures and they are acceptable. There is adequate competition and foreign firms can participate. A list of equipment requirements is given in Annex 1. NIA would handle the procurement of vehicles and equipment required for communal irrigation systems, future Project studies and the Central Project Office. O&M equipment required for the barangay roads would be procured by DPH. BPW would procure the drilling equipment and materials required for the construction of rural water supply wells. Supplies and materials required for barangay health stations would be procured by the special project office of DOH. 3.28 Civil works on the project service area (US$38 million) would be scattered over about 500 separate locations in six different provinces. They would include about 9,400 ha of communal irrigation systems (55 loca- tions), 1,400 km of barangay roads (155 stretches), 3 ports, 60 rural health stations and 300 wells for rural water supply. These works have to be executed by six different agencies and would therefore not be suitable for international competitive bidding. Most of the larger communal irrigation systems, barangay roads, ports, and health centers would be done by contract. The remaining works such as small communal irrigation systems (less than 100 ha), barangay roads (less than 5 km) and water supply wells, which would amount to about 30% of total project works, would be carried out by force account. An assurance was obtained that the implementing line agencies would ensure that the aggregate amount of civil works done by force account - 33 - would not exceed 40% of the total cost of the work. Competitive bidding in accordance with local procedures is appropriate for the works to be carried out by contract. Association staff has reviewed the local procedures and they are acceptable. There is potentially adequate competition and foreign firms can participate. Disbursements 3.29 Disbursements would be made at the rate of 100% of the foreign exchange cost of directly imported equipment, and 100% of the ex-factory price of locally manufactured equipment and 65% for imported equipment procured locally. Disbursement for civil works would be 40% of certified monthly progress payments or expenditure. Disbursements for force account work would be made against certificates of expenditure, the documentation for which would not be submitted to the Association for review, but would be retained by the borrower and made available for inspection by the Association's supervision missions. For civil works contractor's mobilization and equipment, disbursement would be at 100% of foreign exchange cost. For costs of consultants and technical assistance, disbursement would be at the rate of 100% of total cost. 3.30 Disbursements of the IDA credit would be against import documenta- tion, contracts and certified records of payments or expenditure. It is expected that disbursements would be completed by December 31, 1983, approximately one year after the end of construction. In consultation with the Association, savings under the project would be used to finance similar additional works in the project area. An estimated schedule of expenditure, a semiannual disbursement schedule and a proposed allocation of credit proceeds are given in Annex 1. Accounts and Audit 3.31 The NIA, DPH, DOH and BPW are Government agencies and their accounts are audited annually by the Government's Commission on Audit. Assurances were obtained that these agencies would maintain separate accounts for the project and that after audit by the Commission on Audit, the project accounts, together with the auditor's comments and opinion on the certification of expenditure for force account work, would be sent to the Association within six months of the close of each financial year. Environmental Effects 3.32 In all six provinces of the project, malaria is effectively con- trolled by a Government program of house spraying with residual insecticides. Schistosomiasis is only found in a very small area in the northeastern corner of Bohol Island well removed from the proposed irrigation systems. The principal health problems in the six provinces are protein deficiencies in small children, tuberculosis and enteric diseases. The proposed project would have little impact on these. The project would have a beneficial effect in the remote areas of the provinces through the provision of roads, health stations and potable water supply. - 34 - 4. ORGANIZATION AND MANAGEMENT Central Project Organization 4.01 Implementation of the project would require coordination between a number of national line departments and agencies. These are the National Irrigation Administration (NIA), the Farm Systems Development Corporation (FSDC), the Departments of Public Highways (DPH), Public Works, Transportation and Communications (DPWTC), Public Health (DOH), Local Government and Community Development (DLGCD) and the Philippines Ports Authority (PPA). Responsibility for establishing overall policies related to the activities of these organizations under the project would rest with the Cabinet Coordinating Committee for Rural Development (CCC), within the National Economic and Development Authority (NEDA). The Secretary of DPWTC has been designated as the Cabinet Coordinator. Coordination of day-to-day activities of the project in Manila would rest with the Central Project Office (CPO) under the direction of a Project Director. The CPO has been established following the pattern adopted for the Mindoro Rural Development Project (Loan 1102-PH). The Government has appointed a qualified and experienced person as Project Director, after consultation with the Association. Assurances were obtained that new appointment of a Project Director during the project implementation period would be subject to consultation with the Association. 4.02 The Project Director would be responsible for reviewing detailed annual budgets and approving work programs for project activities prepared by the participating departments and agencies. To perform this function, he would be assisted by a Steering Committee chaired by one of the Assistant Secretaries of DPWTC designated by the Cabinet Coordinator (Secretary of DPWTC) and composed of senior officers from each of the departments and agencies involved in the project and a representative of Budget Commission. The committee members would be empowered to speak for their respective organizations as far as the project is concerned. The Government has estab- lished the Steering Committee. Each department and agency would prepare an annual budget and work program for its part of the project and submit them to the Steering Committee for approval at least three months in advance of each fiscal year. The Project Director would forward a copy of the approved annual budgets and work programs to the Association for information as an aid to project supervision. Budgetary provisions have been made for the project for 1978. 4.03 The CPO would have a small administrative, accounting and monitor- ing staff divided into three divisions. In addition to a division dealing with personnel and routine administrative matters, there would be a budget division and monitoring division. The budget division would handle budget requests, disbursements and consolidated accounts for the project. The monitoring division would be responsible for monitoring the progress and quality of project works, and compilation of progress reports. The monitoring division would compile a completion report based on the periodic progress reports, actual expenditure for each component and preliminary evaluation of sample benefits monitored during the project execution by each - 35 - implementing agency. As part of the reporting requirements of the project there would be continuous monitoring of the agricultural development associated with selected roads and communal irrigation systems in each of the project provinces. An assurance was obtained that the Government would submit the completion report for Association review within six months of the Closing Date of the Credit. The Project Director would maintain the contacts with individual components of the project through Project Managers or Project Officers appointed by the implementing line agencies. Project Implementation Organizations 4.04 Communal Irrigation Systems. NIA would be responsible for selection, evaluation and construction of the systems and preparation of the irrigation component of future rural infrastructure project in close coordination with FSDC. The Assistant Administrator for Engineering and Operations is responsible to the Administrator for the regional NIA offices covering the Philippines. At headquarters, there are a number of support departments headed by Directors, which are represented at the regional level by divisions with similar functions. The regional offices are headed by regional directors who are responsible for all NIA activities in the provinces constituting their regions through provincial engineers. NIA has appointed a Project Manager based in Manila (Figure 4.1) to be directly responsible for execution of the irrigation component under the overall supervision of the Assistant Administrator for Engineering and Operations. The Project Manager, with a small support staff, would have day-to-day responsibility for coordinating the work at headquarters of the three NIA departments with significant roles in project implementation. Execution at the field level would be under the immediate control of the Regional Directors of NIA's Regions 1, 2, 6 and 7 and the provincial engineers of the six provinces. The evaluation for final selection of the systems to be included in the present project and preparation for future rural infrastructure project would be carried out by the Project Development Department (PDD) of NIA. The engineering and operations division of each region would prepare detailed designs and administer the construction contracts. The provincial engineers would supervise the construction and assist in initial identifi- cation of proposed systems and coordinate with FSDC the organization of farmers into irrigation systems associations. The existing staff of NIA is capable of handling the work program, although some strengthening of provincial offices by transfer of personnel to the existing departments would be needed. 4.05 FSDC was created (PD 681) in April 1975 to develop farmers' organiza- tions for small pump or gravity irrigation projects owned and operated by small farmers, which are known as communal irrigation projects. FSDC, under an existing memorandum of agreement with NIA, organizes the farmers into Irrigation Service Associations (ISAs). Construction work by NIA would be undertaken only after an association has been organized by FSDC, formally registered with the Securities and Exchange Commission, and has agreed to repay NIA the cost of construction (para. 3.06). Separate associations would be organized for systems larger than 100 ha and smaller systems would have one association for two or three systems. About 45 such associations would be organized under the project. The regional offices of FSDC would handle the recruitment and training of the institutional officers assigned to each - 36 - ISA. The institutional officer assigned to each association would be respon- sible for supervising the operation and maintenance of the system, training of the association members and assisting the association to make contact with the various agencies providing agricultural supporting services to farmers. The provincial offices of FSDC would monitor the operation, maintenance and agricultural production of the systems for a minimum period of five years after completion of construction. About 15 institutional officers with a minimum of two years college education preferably in agriculture would be recruited and trained before September 30, 1978, another 20 by June 30, 1979 and the remaining 10 by June 30, 1980. Assurances were obtained that FSDC would recruit and train 45 additional institutional officers according to an agreed schedule indicated above and complete this before June 30, 1980. 4.06 The ISAs operate as cooperatives with elected officers as President, Vice President, Secretary-Treasurer, Auditor and five man Board of Directors. The association serves as a pivotal center of information, skills development, training and provision of various agricultural inputs and services needed by its members. Each ISA under a set of articles of incorporation and by-laws has a legal status which enables it to enter into agreements and assess as well as collect from its members the levies imposed for any capital investment and charges for annual operation and maintenance. The principal agencies providing the agricultural supporting services in each province are the Bureau of Agricultural Extension (BAE), Bureau of Plant Industries (BPI), Agricultural Credit Administration (ACA), Department of Local Government and Community Development (DLGCD), National Grains Authority (NGA), Philippines National Bank (PNB) and the Rural Banks (RBs). FSDC would coordinate the assistance and cooperation of all these agencies in the project systems through their provincial, regional and institutional officers. An assurance was obtained that the Government would include the communal irrigation component of the project within the scope of the plan of action for provision of agricultural supporting services to Bank Group-assisted irrigation projects being prepared under the National Irrigation Systems Improvement Project II (Loan 1526 PH). 4.07 Barangay Roads. The Bureau of Barangay Roads (BBR) established in 1975 within DPH would implement this component of the project. BBR is headed by a Director who reports to the DPH Assistant Secretary for Operations. At headquarters, BBR has four support divisions and three sections under each division with a total staff of about 200 technical and administrative personnel (Figure 4.2). DPH has appointed the Assistant Director of BBR as the Project Manager based in Manila to be directly responsible for execution of the project's road component under the overall supervision of the Director of BBR. A project office would be established at headquarters under the Project Manager to coordinate the work of the various divisions of BBR and of the consultants to be appointed under the project (para. 4.11). Final approval of roads selected for implementation under the project would rest with the Project Planning and Development Service (PPDS) of DPH (para. 3.13). DPH would strengthen PPDS staff at headquarters to handle the additional work of evaluating road stretches included in the project. - 37 - 4.08 DPH's field activities are administered through regional offices headed by Regional Directors. A Barangay Roads Division at each of the regional offices represents BBR at the regional level and is in charge of all regional activities related to barangay roads. Each Barangay Roads Division consists of three sections with about nine engineers; these sections would be strengthened by the addition of five engineers and six technicians under the project. The divisions would administer contracts and supervise all project- related construction activities under the immediate control of Regional Directors. 4.09 Each region in turn has district offices which are administered by highway district engineers. The Barangay Roads Section of each district carries out the construction, improvement and maintenance of barangay roads, and is composed of two units with two engineers and one surveyor. The six project provinces have eight districts, with one district in each province except Bohol and Kalinga-Apayao provinces, each of which has two districts. A new Barangay Roads section headed by a Project Engineer would be established in each of the eight districts. These sections, which would report directly to the regional director, would assume responsibility for the project's field activities. Each section, with the coordination of the regional barangay roads divisions, would prepare detail designs, supervise the construction, and monitor the traffic count and road usage, as well as increased production due to these roads, which would be useful in future projects of similar scope. These sections would consist of a planning and design unit, adminis- trative unit and construction unit. The units would require about 10 engineers and 30 technicians (Figure 4.2). Thus the total field staff required at the regional level would be about 40 and at the district level reporting directly to the regional director about 300 composed of engineers and technicians. Most of the senior technical positions (about 40) would be filled by transfer from headquarters. DPH intends to use the project roads for training the new graduate engineers entering its service, so most of the junior engineering positions requiring less experience would be filled by these engineers. Positions of technicians (about 200) requiring a minimum of two years of college education or technical high school graduates would be filled either by transfer of existing staff from headquarters and regions or new recruitment. Assurances were obtained from the Government that DPH would appoint experienced engineers of district engineer level to the posts of Project Engineers and assign the additional personnel required for project evaluation and implemen- tation at headquarters, regional and district offices according to an agreed schedule by December 31, 1979. 4.10 Certain aspects of the barangay road construction which would comprise of low-standard, low-traffic gravel roads of short lengths in geographically dispersed locations, are well suited for labor-based cons- truction and maintenance methods. However, the efficient application of such methods require careful planning and management. The local contractors executing such works are known to use a mix of labor and equipment. Consi- dering the scope of the Government's future plans for rural roads, it is important that institutional capacity is developed within DPH to carry out a - 38 - major part of such program with labor-based methods. In view of this, DPH would prepare a plan to strengthen its capability to undertake construction -sing labor-intensive methods, staff training, contracting procedures and assistance to the contractors for efficient use of labor. The plan would identify and consider implementing about 50 km of project roads as a pilot project according to the recommendations. The pilot roads would be imple- mented during the last two years of the project implementation period. DPH would be assisted by a qualified engineer in the preparation of this plan, for which a provision of four man-months has been made under the technical assistance part of the road component. An assurance was obtained that DPH would prepare a plan of action for labor-based construction methods by June 30, 1979 with the assistance of a qualified engineer employed on terms and conditions acceptable to the Association. After review of the plan by the Association, DPH would proceed with the implementation by December 31, 1979. 4.11 An engineer experienced in rural roads planning, design, construc- tion and maintenance would be employed for a period of two years to assist the Director of BBR at headquarters and the regional and district offices in project implementation. To augment the design staff of BBR at headquarters and in the regions, consultants would be employed by DPH to assist in the project preparation of detailed design and contract documents. It is esti- mated that such services would not exceed 200 man-months. Due to the simple nature of design work and existence of local consulting firms in the Philippines, it is expected that local consultants would be engaged at an estimated overall cost of $2,500 per man-month. An assurance was obtained that DPH would employ the rural roads engineer and consultants on terms and conditions acceptable to the Association. 4.12 BBR, through the regional and district offices, has the responsibil- ity of maintaining barangay roads. Since its establishment in 1975, BBR has overcome most of the initial difficulties of organization, staffing and financing. BBR is presently executing a small roads program under a Bank Group-assisted land settlement project (Loan 1421-PH), as well as a number of other locally financed rural roads rehabilitation projects. At the comple- tion of construction, the maintenance responsibility for these roads would revert to each district engineer's office. The additional length of about 140-250 km of rural roads to each district maintenance program would not adversely affect their overall maintenance capability. 4.13 Unlike national roads, which are subject to high traffic densities and consist of asphalt and concrete pavements requiring more advanced mechani- cal and technical maintenance techniques, the maintenance of low standard gravel roads is more labor intensive. Each of the existing barangay roads section at the district level has a maintenance unit headed by an engineer. Under the project each maintenance unit would be strengthened by the addition of an engineer and two technicians. The annual maintenance fund provided for - 39 - barangay roads at present amounts to about P 2,500 per km, which is inade- quate for the task. Assurances were be obtained from the GovArnment that within five years of completion of construction of project roads the annual maintenance funds for all barangay roads within the six project provinces would be raised gradually to the equivalent of P 6,000 per km. It was informally agreed that this figure would be in terms of constant mid-1978 prices. This would allow for annual maintenance at the rate of R 4,000 per km (Annex 1) and periodic maintenance of P 10,000 per km at five-year intervals. 4.14 A set of barangay road maintenance equipment would be provided under the project for each district for hauling of gravel and periodic regrading of road surfaces. This would consist of a motor grader with scarifier, an industrial tractor with a backhoe/loader attachment, a farm tractor, a rubber-tyred self-propelled roller, a self-propelled grid roller, a dump truck, a water tank truck and a flatbed truck. This equipment would be used not only for the project roads, but also would maintain the other barangay roads in the district. This equipment would be under the direct control of the Barangay Road Sections of the district offices. Light repairs of the equipment would be done at the existing area shops at the district level or the somewhat larger base shops at the regional level. Major repairs would be carried out at DPH mechanical workshops, which were established in Northern Luzon under the Bank assisted Third Highway Project (Loan 1353-PH). DPH expects to establish such workshops on Panay island in subsequent highway projects. Assurances were obtained from the Government that DPH would ensure that the equipment supplied under the Project would remain under the operational control of district engineers and would be for the exclusive use of barangay road maintenance in these districts. 4.15 Ports, Barangay Health Stations and Rural Water Supply. The Bureau of Public Works (BPW) of DPWTC would be responsible for the design and construc- tion of ports, the construction supervision of barangay health stations and the drilling of wells and would establish a small office headed by a Project Coordinator to organize the activities of the three divisions of BPW connected with the project. The Ports and Harbors Division would be responsible for ports. The Buildings Division for the barangay health stations and the Water Resources Division for rural water supplies. The coordinating office would also be responsible for budgets, procurement, contract administration and monitoring of work progress for the ports and rural water supply. As the ports design work and contract documents preparation would be carried out by the Ports and Harbor Division of BPW, its staff would be strengthened by internal transfers and new appointments. The Building Division of BPW is currently engaged in the construction supervision of rural health units being built under the Bank-assisted Population Project (Loan 1035-PH). It would continue to provide similar construction supervision for the proposed barangay health stations under the project without any increase in staff. The Wells and Springs Unit in BPW's Water Resources Division would be responsible for the water supply component. The Unit would be strengthened by the appointment of a hydrogeologist with well-drilling experience as a Project Manager, a - 40 - training officer and an administrative assistant. Execution at the field level would be under the immediate control of BPW's Regional Directors in Regions 1, 2, 6 and 7 and District Engineers of the six provinces. 4.16 Ports. The Ports and Harbor Division of BPW is represented at the regional level by a section and by a unit at the provincial level. The sections in Regions 6 and units in the provinces of Antique, Aklan and Capiz would be responsible for construction. BPW would strengthen these offices and would establish a field office at each of the three ports with a staff of about 3 engineers and 4 construction inspectors for the duration of the construction period. BPW expects to complete the staffing arrangements before December 31, 1978. 4.17 The Philippines Port Authority (PPA) was created in 1975 to ensure the efficient operations, management and development of major Philippines ports. PPA is also empowered to administer, operate, control and supervise ports including private piers and marine facilities. Since its establishment, PPA has taken over 47 ports including the two project ports of San Jose de Buena Vista and Culasi. PPA would be involved in the planning, review of plans before tendering and scheduling of construction program. PPA would continue to operate the two national ports presently under its control. The third municipal port was taken over by PPA in January 1978. Assurances were obtained that: (a) the Government would guarantee adequate funds annually to PPA for maintaining these ports; and (b) the Government would cause PPA to prepare a plan of action by June 30, 1979 outlining the procedures and fees to be levied for the use of the port facilities, which would adequately cover the costs of operating and maintaining each port as well as recovering part of the cost of the improvements, after review of the plan by the Associa- tion, the Government would proceed with the implementation by December 31, 1979. 4.18 Barangay Health Stations. The Project Management Staff (PMS) of DOH established for the Bank-assisted population project (Loan 1035-PH) would be responsible for contract administration, construction, procurement of supplies and materials, training and hiring of rural health midwives and the operation of the 60 barangay stations to be built under the project. PMS works at the field level through service groups established in the 12 regional health offices. The regional offices in Regions 1, 2, 6 and 7 would be responsible for the construction of the barangay health stations. The district offices of BPW in the six provinces would supervise the construction of the stations. Under an existing memorandum of agreement, the Department of Local Government and Community Development (DLGCD) is currently providing coordination and monitoring services and the maintenance of Rural Health Units - 41 - built under the Population Project (Loan 1035-PH). Similar arrangements would be continued for the proposed project. The present staff of PMS, BPW and DLGCD currently engaged on the population project is adequate to cover the activities of the proposed project. 4.19 Rural Water Supply. At the regional level, the water resources section of BPW would be strengthened. New drilling teams consisting of a senior well driller, three well drillers and three technical aids would be assigned to work under the district engineer of BPW in each province. After construction, these wells would be handed over to the Barangay councils who would be responsible for their maintenance. The district office of BPW would monitor the maintenance, sanitary upkeep and use of the wells by the beneficiaries. Assurances were obtained that BPW would strengthen the staff in the field offices in the project area as well as at headquarters and complete the recruitment and training of its personnel for the water supply component by June 30, 1979. 5. AGRICULTURAL PRODUCTION, MARKET PROSPECTS AND PRICES, FARM INCOME, AND PROJECT CHARGES (Communal Irrigation Systems) Agricultural Production 5.01 Present Cropping Pattern. In most of the project systems the wet-season rainfed rice crop starts in May/June and harvesting takes place in December/January. Cultivation is by animal drawn implements as almost no hand tractors are available. Practically all rice is transplanted from field nurseries onto previously puddled land. Farmers use little fertilizer (about 50 kg/ha) and HYV seeds, and practically no insecticides or herbicides. Crops are usually hand-weeded twice during a season and are manually har- vested and threshed. Grain is sun-dried on mats, roads, drying floors or other suitable surfaces, and stored in the house for home consumption, seed, or sale. Average wet-season rainfed paddy yield is around 1.5 ton/ha. 5.02 Future Cropping Patterns. In the absence of the project, there would be no significant change in cropping patterns. However, with the project, farmers would grow only irrigated rice in the proposed communal systems. Cropping intensity for the individual systems would depend on the available water supplies. However, no system with a potential future cropping intensity of less than 130% would be accepted in the project and the average cropping intensity of the systems is expected to be 160% in the future. Yields would vary depending on the degree of water control, the availability of extension services, credit and input supplies. As project works would be less intensive on small areas (100 ha or less) than on larger ones, and as the smaller areas are more likely to be remote, water control and the level of agricultural supporting services would be poorer on these areas than on the larger ones. 5.03 Yields and Production. In the absence of the project, the rate of increase in rice yields is estimated at about 0.5% per annum mainly due to some marginal improvements in application of inputs. With the project, - 42- improved water control and more adequate supplies of credit and inputs would raise rice yields. For systems smaller than 100 ha, the projected full development yield is assumed to be 2.5 ton/ha, a modest increase of 1.0 ton/ha over the present. For systems greater than 100 ha, the projected yield is 3.0 ton/ ha, an increase of 1.5 ton/ha over the existing level. As a result of the project, rice production would increase from about 14,600 tons of paddy at present to an estimated 44,200 tons at full development (Table 5.1). Market Prospects and Prices 5.04 Rice. A major objective of the Government in the agricultural sector is self-sufficiency in basic foods, especially rice and corn. A deficit in rice, the main staple crop, has been a persistent problem for the Philippines. Between 1963 and 1967 the Philippines imported an average of 300,000 tons of rice annually. After a short period free of imports, the Government started importing again in 1971 at an annual rate of over 300,000 tons, with a peak of 456,000 tons in 1972 as a result of disastrous floods. Three consecutive good crops in 1974 to 1976 have allowed imports to be reduced to 55,000 tons in 1976. In 1977, the Government exported 35,000 tons and built a supply of about 3 months. With the continued growth of popula- tion and incomes, the demand for rice is expected to rise by about 3% annually. Abra is a deficit province, while the other five provinces are surplus provinces. Incremental rice production from Abra would be sold for consump- tion in Bangued, while production from Kalinga-Apayao, Aklan, Antique, Capiz and Bohol would be sold in Manila and the Central Visayas. 5.05 Prices. Since 1957 the Government has set an annual farm-gate support price for paddy to encourage production and allow some purchases of paddy by Government to build stabilization stocks. Responsibility for operating the system through purchases in the market rested with a statutory body, the National Grains Authority (NGA). Through 1972, the farm-gate support price for paddy and the domestic consumer price for rice kept pace with changes in the world market price for rice. Between 1972 and 1975, to keep domestic prices down in the face of record high world market prices for rice, the Government subsidized consumers by maintaining a low official ceiling price for rice and a correspondingly low farm-gate price for paddy by sales of imported rice on the domestic market below cost. Since 1975, the official support price and the world market prices have been practically the same. 5.06 The Bank Group projects the world market price of Thai 25-35% broken rice to rise (in constant mid-1978 prices) from US$230/ton f.o.b. Bangkok in 1978 to US$290/ton in 1985. These projections have been used to estimate the present and future farm-gate prices of paddy for the economic analysis and farm budgets. Although such an exercise was done for each project province, an average price structure was used for the economic and financial analysis (Table 5.2). The highest economic farm-gate price calculated was in Abra (5% above the average) and the lowest in Kalinga-Apayao (6% below the average). In the farm budgets, the actual price paid to farmers was used in evaluating present income, and for the future it was assumed that the financial farm-gate price for paddy would equal the financial Table 5.1: CROPPING PATTERN AND PRODUCTION Yields (ton/ha) Cropped Area (ha) Production (tons) Future Without Future With Project Future Future /a Present Project (<100 ha) (>100 ha) Present (<100 ha) (>100 ha) Total Present (<100 ha) (>100 ha) Total Rainfed rice 1.5 1.6 - - 8,500 - - - 12,750 - - - Irrigated rice 2.0 2.1 2.5 3.0 900 1,200 8,200 9,400 1,800 4,800 39,400 44,200 Cropping intensity 100 160 160 160 - - - - fa At full development (1987). - 44- Table 5.2: PRICE STRUCTURE FOR RICE AND SUMMARY OF FERTILIZER PRICES 1978 1985 P/ton US$/ton P/ton US$/ton -------------- /a --------------- Rice Export price of Thai 25-35% f.o.b. Bangkok 1,890 230 2,385 290 Ocean freight and insurance to Manila 140 17 140 17 Import price c.i.f. Manila 2,030 247 2,525 307 Port handling charges 60 7 60 7 Average cost of transport, mill to Manila -60 -7 -60 -7 Rice price, ex-mill 2,030 247 2,525 307 Paddy equivalent price (63%) 1,280 156 1,590 193 Value of byproducts less milling cost lb 0 0 0 0 Less cost of transport, farm to mill -40 -5 -40 -5 Farm-gate paddy price 1,240 151 1,550 188 (Financial farm-gate price) /c (1,060) (143) (1,390) (188) Price (pesos/nutrient ton) Present Future Economic Financial Economic Financial Fertilizer Nutrient Nitrogen 3,900 3,900 4,900 4,500 Phosphoric acid 3,100 4,600 4,100 3,800 Potassium 1,600 3,400 1,500 1,600 /a P/ton and US$/ton values at constant mid-1978 prices. Peso shadow priced at exchange rate of US$1.00 = P 8.22. /b This item is zero since cost of milling equals value of byproducts. /c Present financial price is actual. 1985 financial price calculated using official exchange rate of US$1.00 = P 7.40. - 45 - cost to the Government of importing equivalent amounts of rice. Table 5.2 also shows all the present and future fertilizer prices used for the farm budgets and the economic analysis. Farm Incomes 5.07 Two sizes of farms, 1.0 ha and 3.0 ha, were used for preparing farm budgets. The 1.0 ha farm would represent an average farm in Abra, Antique, Aklan and Bohol. Similarly, a 3.0 ha farm would represent an average farm in Kalinga-Apayao and Capiz. The farm budgets for different types of farm owner- ship are presented in Annex 2 and summarized in Table 5.3. Owner operators on systems greater than 100 ha (88% of the project area) with 1.0 ha farms would have a family income of US$770 at full development, equivalent to a per capita income of US$140, while those with 3.0 ha farms would have a family income of US$2,035 and a per capita income of US$370. Leaseholder family income would be on an average US$200 per ha lower. Similarly, farm families on systems of less than 100 ha would have on an average incomes lower by US$75 per ha. All of the project's farm families are presently below the Association's estimated per capita absolute poverty level of US$193 (1978 constant prices). At full project development in 1987, the projected per capita incomes would range from a low of US$95 for a 1.0 ha leaseholder farm to a maximum of $370 for a 3.0 ha owner-operated farm. Per capita income would be some 13-50% of the 1987 projected per capita GNP of US$745. The comparison indicates that the project would help to narrow the income gap between the project area and other parts of the country, and between rural and urban areas. Cost and Rent Recovery - Irrigation Component 5.08 The NIA would construct the irrigation works and charge the cost to the Irrigation Service Association (ISA) of each system. NIA's present (December 31, 1977) terms of repayment for communal systems treat 10% of the capital cost as a grant, 70% as an interest free loan and 20% as a loan with an annual interest of 6%. The loan is repayable in 25 years, including a 4-1/2 year grace period. The average estimated cost of construction for systems smaller than 100 ha is US$1,427/ha and for systems greater than 100 ha is US$1,197/ha. 5.09 In systems less than 100 ha, the rent recovery index is 48% for a 1.0 ha farm and 44% for a 3.0 ha farm. This index is 43% and 39% respec- tively in systems greater than 100 ha (Table 5.4). The rent recovery index does not appreciably change with size of farm but is lower in the bigger system since cost per ha is lower and the incremental benefits are bigger. The rent recovery index for the total project is 41%. This rent recovery index is higher than in other Bank Group-assisted irrigation projects in the Philippines though the overall cost recovery index of 25% is comparable to the other Bank Group irrigation projects. The higher rent recovery index is due to the modest increases in yields expected due to the project. In view of the low income levels of the project beneficiaries, the proposed level of repayment is acceptable. Contributions which farmers would make to Government revenues in the form of land tax have been taken into account in these calculations. No "betterment" taxes or other government levies are envisaged for the project area. Table 5.3: SUMMARY OF FARM BUDGETS Farm Family Income /a Per Capita Income ------------ -------- ---------- US$ ---------- ---------- US$ ---------- Farm Type Present Future Present lb Future /b Present lb Future /b (<100 ha (> 100 ha (<100 ha (> 100 ha (<100 ha (> 100 ha system) system) system) system) system) system) 1.0 ha - Owner 2,245 5,115 5,680 305 690 770 55 125 140 Amortizing Owner 1,835 4,705 5,270 250 635 710 45 115 130 Leaseholder 1,890 3,825 4,170 255 515 565 45 95 105 3.0 ha - Owner 4,305 13,170 15,060 580 1,780 2,035 105 325 370 o' Amortizing Owner 3,075 11,940 13,830 415 1,615 1,870 75 295 340 Leaseholder 3,240 9,300 10,530 440 1,255 1,425 80 230 260 /a Includes income from off-farm sources. /b Rounded to the nearest US$5.00. -47- Table 5.4: COST AND RENT RECOVERY OF IRRIGATION COMPONENT /a 1.0 ha farm 3.0 ha farm Total <100 ha >100 ha <100 ha >100 ha Irrigation system system system system component -- P -- (P million) At Full Project Development Incremental gross value of production /b 3,335 4,445 10,010 13,350 Less: Incremental cash production costs 500 990 1,600 3,130 Equals: Incremental cash income 2,835 3,455 8,410 10,220 .Less: Incremental - imputed return on oWn capital and credit charges jC 825 1,070 2,475 3,220 - imputed value of family labor /d 455 510 1,265 1,350 - imputed value of farm management /a 410 520 1,575 2,080 - allowance for risk and uncertainty j 500 665 1,000 1,335 Equals: Project rent 645 690 2,095 2,235 Project rent as a % of incremental cash income 23 20 25 22 Incremental recovery charges /i 365 320 1,095 960 During the Project's Life Project rent £h 3,885 3,805 12,615 12,325 38.0 Incremental recovery charges /h 1,850 1,620 5,550 4,860 15.5 Rent recovery index (%) 48 43 44 39 41 Project costs (capital /h 61.4 Cost recovery index (%) Z5 /a All calculations in mid-1978 prices and represent incremental conditions, that is, with project minus without project conditions. /b From Annex 2. /c Imputed return on land plus incremental cash investment. /d Family labor valued at P 7.0/man-day. /e 10% of incremental gross value of production for 1.0 ha farm; 15% for 3.0 ha farm; plus P 75 per hectare for O&M of system. /f 15% of incremental gross value of production for 1.0 ha farm; 10% for 3.0 ha farm. /g Charge stated is that for first year of full development (1987) in mid-1978 prices. Since the repayment, in pesos, is not revalued for inflation, it has been brought to mid-1978 level assuming a long-term inflation rate of 7.0% per annum in the period 1978-82 and 5% per annum in 1983 onwards. /h Present values expressed in mid-1978 values discounted at 10% per annum over 40 years for the project costs and 25 years for the recovery charges. - 48 - 5.10 The proposed level of project charges is consistent with the objective of preventing a widening gap between rural and urban incomes. To ensure an equitable contribution by beneficiaries toward recovery of project cost, an assurance was obtained that the beneficiaries of the communal irrigation systems would continue to contribute to the capital cost of the facilities at the existing levels, which are described above (para. 5.08). It was also agreed that NIA would consult annually with the Association on the adequacy of such levels. 6. BENEFITS, JUSTIFICATION AND RISKS Irrigation Systems 6.01 The proposed communal irrigation systems would increase yields on 9,400 ha currently dependent on rainfed cultivation by providing irrigation. Approximately 7,000 farm families and 1,500 landless laborer's families, a total of 8,500 would benefit directly from increased producton and employment. The project would create a demand for an additional 390,000 man-days of farm labor per year, equivalent to some 1,600 full-time jobs, and provide rice farmers with increased access to markets through roads to be built under the project. This component would meet the Government's objectives of increased food production and more balanced interregional and intra-regional distribution of development at a capital cost of about US$1,600 per benefited farm family. At full agricultural development this component would result in an incremental yearly paddy production of about 29,000 tons and an import saving of US$5.6 mil- lion at the forecast world market prices. 6.02 Foreign Exchange. The numeraire used for this analysis is the uncommitted foreign exchange in the hands of the Government. The local costs and benefits in pesos were multiplied by the standard conversion factor (SCF) convert them to this numeraire. 6.03 Benefits. The economic benefits, based on assumptions given in Chapter 5 for smaller (<100 ha) and larger (> 100 ha) systems, are shown in Annex 4. For this analysis the whole area is assumed as rainfed at present, and irrigated in the future with a cropping intensity of 160%. 6.04 Farm Labor. Monthly labor demand for the project area was computed for various sizes of systems and aggregated (Annex 4). For the economic analysis, the shadow wage rate of P 2.7/man-day was used (based on experience in other comparable Bank Group irrigation projects in the Philippines); by comparison the peak season market wage rate is P 7.0/man day. 6.05 Investment Costs. The total shadow-priced capital cost, expressed in mid-1978 prices, is US$10.4 million. The average shadow-priced capital cost per hectare is US$1,350 for systems smaller than 100 ha and US$1,130 for systems greater than 100 ha in size. The annual O&M cost per hectare of wet-season irrigated land was assumed about US$10/ha which is equal to the present average cost on NIA national systems. All capital costs include physical contingencies, but exclude costs due to price increases. - 49 - 6.06 Development Period. According to the project implementation schedule, all works would be completed in time for the 1982 dry-season crop. Systems smaller than 100 ha would have a three-year construction period as compared to four years for systems larger than 100 ha. It was assumed that each system would reach full development five years after completion of construction. 6.07 Breakeven Cost of Construction. Breakeven cost of construction is defined as the construction cost to achieve a certain rate of return for the assumptions stated earlier. The breakeven per hectare economic cost of construction is summarized in Table 6.1 for smaller and larger systems. Comparison of the estimated cost per hectare for each system of the project with the breakeven cost shows that all systems in Abra, Kalinga-Apayao, Aklan, Antique, and Capiz have an economic rate of return greater than 12%. In Bohol, out of the seven systems, five have rates of return greater than 12%. The remaining two (a total of 450 ha) have a 9% economic rate of return. Since these two systems have been proposed with impounding reser- voirs, their future cropping intensity is expected to be higher than the 160% used for the above analysis. If their cropping intensity at full development reaches 190%, their economic rates of return would be 11%. 6.08 Economic Rate of Return. Using the foregoing assumptions and the cost and benefit streams shown in Table 6.2, the overall rate of return for the irrigation component is 21%. 6.09 Sensitivity Analysis. Sensitivity of the breakeven economic cost of construction and the overall economic rate of return was tested (Tables 6.3 and 6.4) to cost overruns, reduction and delay in benefits, increase in the world market price of rice, decrease in projected rice yields and a decrease and increase in cropping intensity. Under the severest effect,a drop in cropping intensity to 130% (the threshold cropping intensity for system inclusion), all systems in Abra, Kalinga-Apayao, Aklan, Antique and Capiz have rates of return greater than 12%. In Bohol, three systems would have rates of return greater than 12%, one a 10% rate of return (100 ha), one a 8% rate of return (50 ha), and two a 7% rate of return (450 ha). 6.10 Risks. No problems in implementation of construction are antici- pated as NIA has ample experience with projects of similar scope. However, a five year implementation period has been adopted to allow for the wide geographic spread, smaller size of the systems and the fact that the staff and resources of four regions and six provinces of NIA and FSDC would need to be mobilized and deployed. The element of risk for the irrigation component concerns: (a) the capacity of Irrigation Service Associations to take over the responsibility of maintaining these systems to ensure the efficient use of irrigation water. This risk has been minimized by ensuring that FSDC would supervise the maintenance of the systems and monitor the performance of the associations for five years after completion of construction; (b) the provision of the entire package of agricultural supporting services to smaller systems dispersed in all corners of the six provinces. This risk has been taken into account by the expectation of lower rice yields of 2.5-3.0 tons/ha compared to 4.0 tons/ha in other Bank-assisted irrigation projects in the Philippines. - 50 - Table 6.1: BREAKEVEN ECONOMIC COST OF CONSTRUCTION-IRRIGATION /a (US$/ha) Economic rate of return (%) < 100 ha system /b 1 100 ha system /c 8 3,275 4,045 10 2,525 3,160 12 1,935 2,530 /a Assuming 5 years needed after completion of construction to reach full development. lb Assuming a 3-year construction period, 25% of cost in Year 1, 45% in Year 2, and 30% in Year 3. /c Assuming a 4-year construction period, 20% of cost in Years 1 and 2, 30% in Years 3 and 4. Table 6.2: ECONOMIC COSTS AND BENEFITS - IRRIGATION COMPONENT (US$ million) Year Incremental costs Incremental benefits Capital O&M 1 1.04 - 2 2.55 - 3 3.12 - - 4 2.46 0.01 0.04 5 1.23 0.05 0.50 6 0 0.094 1.34 7 1 2.18 8 I I 3.03 9 | I 3.86 10-40 4 4 4.26 Economic Rate of Return = 21% - 51- Table 6.3: SENSITIVITY ANALYSIS FOR IRRIGATION COMPONENT Rates of return (a) Base line 21 (b) Two-year delay in reaching full project benefits 20 (c) 20% increase in construction cost 19 (d) Combination of (b) and (c) 18 (e) 20% increase in world market price of rice 24 (f) 10% decrease in projected rice yields 18 (g) 20% decrease in project benefits 18 (h) Cropping intensity drops to 130% 17 (i) Cropping intensity increases to 190% 25 Table 6.4: SENSITIVITY ON BREAKEVEN ECONOMIC COST OF CONSTRUCTION-IRRIGATION (US$/ha) <100 ha systems 100 ha systems Threshold ERR Threshold ERR 8% 10% 12% 8% 10% 12% (a) Base line 3,275 2,525 1,935 4,045 3,160 2,530 (b) Two-year delay in reaching full project benefits 3,015 2,330 1,850 3,740 2,880 2,270 (c) 20% increase in world market price of rice 4,100 3,215 2,590 5,245 4,100 3,285 (d) 10% decrease in projected rice yields 2,460 1,925 1,555 3,135 2,445 1,830 (e) Cropping intensity drops to 130% 2,275 1,755 1,345 2,920 2,280 1,825 (f) Cropping intensity increases to 190% 4,355 3,355 2,575 5,260 4,110 3,290 - 52 - Barangay Roads 6.11 The estimated 155 road segments which would total 1,386 km are tentatively expected to improve access for some 78,000 families or 430,000 people at an average cost of US$365 per family. For the purposes of economic evaluation, a typical barangay road in each of the project provinces was analyzed. A similar evaluation will be done for each of the barangay roads included in this component before implementation starts. The low-standard access roads would link relatively isolated villages to the mainstream of economic life of the provinces. Presently, these villages are accessible only by dirt tracks, almost all of which are accessible only by foot or animal-drawn sleds and sometimes only in the dry season. The dirt tracks are primarily used to transport paddy and corn to the provincial road and sub- sequently to the market. The farmers, their children, and hired labor transport the paddy to the market. A number of farmers, due to the unavail- ability of time, money, or labor, sell paddy to local middlemen in the barangays for half the price available in the market. The low level of land use and settlement are mainly due to lack of access to the market. 6.12 The importance of agricultural benefits due to barangay roads has been highlighted in a study of 46 barangays in the Philippines. /1 It was found that only two years after completion of the barangay roads, volume of rice sold increased 24%, corn 104%, annual gross farm income and agricultural land values increased 50%. Today, the effect of these roads on agricultural production is expected to be considerably larger due to increasing population pressures and better availability of support services. Interviews with farmers show that they place a very high priority on roads for their develop- ment. Farmers mention better access to market and substitution of jeepneys and trishaws for animal and man-drawn sleds as the most important benefit of these roads. Freeing children from transporting paddy and thus keeping them in school was another. 6.13 The transport industry in the provinces is versatile and competi- tive. It is reasonable to assume that it would repond quickly to new oppor- tunities and service villagers with a newly built road. Programs to raise agricultural incomes are typically dependent on the availability of easy access for extension services, inputs, and the marketing of output. In view of the commitment of the Government to agricultural intensification and to increasing of incomes of the rural poor, the lack of accessibility is a serious constraint. 6.14 Reduction in Transport Costs. Without the project, agricultural inputs and outputs would be transported on an animal or man-drawn sled. An animal-drawn sled can carry an average of 100 kg per trip at a speed of 2.0 km/hr. Since transportation of output takes place mainly during or immediately after harvesting (when the peak wage rate is P 7/man-day), an average shadow wage rate of P 5/man-day and P 5/animal-day has been used for man and animal respectively. A lower shadow wage rate of P 2.7/man-day was used for the irrigation component analysis since labor utilization in growing rice is /1 Patrocinio Santos-Villanueva, "The Value of Rural Roads," University of the Philippines, College of Agriculture, January 1958. - 53 - spread throughout the season. Therefore, the cost of transporting is P 6.25 per km-ton assuming an 8-hour working day. With the project, agricultural inputs and outputs would be transported by light vehicles, such as jeepneys and trishaws, at a cost of P 1.0 per km-ton based on field observations. 6.15 Agricultural Production. In each of the provinces, a typical barangay road was chosen for testing of economic viability. Survey teams of the PPDS of the DPH, with the assistance of officials of BAE, BPI and local barangay councils conducted a survey of the area of influence of each of these test roads. They compiled data on major crop areas, production, prices, transport costs, and potential areas for future production. The present yields in the area of influence are 1.3 ton/ha for rice, 0.4 ton/ha for corn, 0.8 ton/ha for coconut, and 0.6 ton/ha for coffee. With the roads, it has been assumed that 5 years after completion of the road, with availability of some agricultural extension service, fertilizers and chemicals, yields would increase modestly to 1.5 ton/ha for paddy, 0.6 ton/ha for corn, and 1.0 ton/ha for coconut. These estimated yields are below present nationwide yields and are comparable to yields obtained in nearby areas accessible by roads. Without the roads, it has been assumed that yields and area under cultivation would remain unchanged. It has also been assumed that five years after completion of a road all identified new potential areas for future production, averaging about 20 ha per km of road, would be under cultivation. This would mean an increase of between 50% and 60% in the area under culti- vation in the test roads for Abra, Kalinga-Apayao, Aklan and Capiz, a 95% increase for the test road in Antique, and a 20% increase for the test road in Bohol. Assumptions regarding yields, prices and production costs for the various crops and the areas, output and value of production, with and without the project, for the various test roads are shown in Annex 2. 6.16 Investment Costs. Average construction cost for the various test roads is about US$18,100/km, ranging from US14,200/km in Bohol to US$20,600/km in Abra. These costs are shadow-priced for foreign exchange content and include 1,500 man-days/km of unskilled labor assuming that about half of the construction would be done by labor-intensive techniques and the remaining with equipment (details in Annex 4). Since the construction and maintenance of these roads is done during the dry season, when demand for agricultural labor is slack, a shadow wage rate of P 2.7/man-day has been used. All capital costs include physical contingencies, but exclude costs due to price increases. A three-year construction period with investment of 20% during the first year and 40% for second and third year is assumed. Annual maintenance costs have been calculated to be US$540/km. Periodic maintenance performed every five years, has been calculated to cost US$1,350/ km. This cost includes US$1,297/km for materials and US$53/km for equipment operation. The salvage value of these roads after 20 years is assumed to be 50% of the original cost of construction. 6.17 The cost and benefit streams and the rates of return for the six test roads, using the producer surplus approach, are shown in Table 6.5. The rates of return for the various test roads range from 10% in Abra to 24% in Bohol. The relatively lower rates of return for the test roads in Abra - 54- Table 6.5: ECONOMIC COSTS AND BENEFITS - BARANGAY ROADS (US$'000/kmY Incremental costs Incremental benefits Incremental costs Incremental benefits Maintenance Maintenance Year Capital Annual Periodic Producer surplus Capital Annual Periodic Producer surplus --------- Abra Provincevi ---------- Kalinga-Apayao Province ----- -- 1 4.12 4.10 2 8.24 8.20 3 8.24 8.20 4 0.54 0.96 0.54 0.05 5 0.54 1.63 0.54 0.04 6 0.54 2.35 0.54 0.52 7 0.54 3.10 0.54. 1.53 S 0.54 1.35 3.88 0.54 1.35 2.78 9 0.54 3.88 0.54 2.78 10 0.54 3.88 0.54 4.01 11 0.54 3.88 0.54 5.24 12 0.54 3.88 0.54 5.98 13 0.54 1.35 3.88 0.54 1.35 5.98 14-17 0.54 3.88 0.54 5.98 18 0.54 1.35 3.88 0.54 1.35 5.98 19 0.54 3.88 0.54 5.98 20 (10.30) 0.54 3.88 (10.25) 0.54 5.98 Economic rate of return: 10% 11% Aklan Province ---------- - - ---- Antique Province 1 3.50 3.50 2 7.00 7.00 3 7.00 7.00 4 0.54 1.37 0.54 1.06 5. 0.54 2.38 0.54 2.12 6 0.54 3.44 0.54 3.25 7 0.54 4.55 0.54 4.44 8 0.54 1.35 5.70 0.54 1.35 5.70 9-12 0.54 5.70 0.54 5.70 13 0.54 1.35 5.70 0.54 1.35 5.70 14-17 0.54 5.70 0.54 5.70 18 0.54 1.35 5.70 0.54 1.35 5.70 19 0.54 5.70 0.54 5.70 20 (8.75) 0.54 5.70 (8.75) 0.54 5.70 Economic rate of return: 17% 16% -- Capiz Province -- -- -------- Bohol Province 1 3.24 2.84 2 6.48 5.68 3 6.48 5.68 4 0.54 1.38 0.54 1.76 5 0.54 2.42 0.54 3.03 6 0.54 3.52 0.54 4.35 7 0.54 4.65 0.54 5.70 8 0.54 1.35 5.83 0.54 1.35 7.10 9-12 0.54 5.83 0.54 7.10 13 0.54 1.35 5.83 0.54 1.35 7.10 14-17 0.54 5.83 0.54 7.10 18 0.54 1.35 5.83 0.54 1.35 7.10 19 0.54 5.83 0.54 7.10 20 (8.10) 0.54 5.83 (7.10) 0.54 7.10 Economic rate of return: 18% 24% - 55 - and Kalinga-Apayao is likely to be typical for most of the roads there. This is due to the small area of influence per km and the higher costs of construction per km due to the mountainous terrain. 6.18 Sensitivity Analysis. Sensitivity of the economic rate of return to a 20% cost overrun, cultivation of only 70% of the identified new area for cultivation, and a ten-year build-up for new areas of cultivation instead of five years is shown in Table 6.6. Under the severest condition, cultivation of only 70% of the identified new area, all test roads would have rates of return greater than 10% except the ones in Abra and Kalinga-Apayao. If the investment in village roads were not undertaken in Abra and Kalinga-Apayao, there is little that can be done to help these farmers who are some of the poorest in the country. Table 6.6: SENSITIVITY ANALYSIS - ROAD COMPONENT Kalinga- Abra Apayao Aklan Antique Capiz Bohol Base line 10 11 17 16 18 24 20% increase in construction costs 8 9 14 14 16 21 Cultivation of only 70% of the new identified potential area 7 7 13 12 14 21 A 10 year build up for new areas under cultivation 8 8 13 12 14 21 6.19 Benefits. The analysis provides only a partial picture of the benefits of the roads component, which would also provide the people better access to health and educational facilities. In the case of serious illness, the absence of an all-weather road may result in a loss of life. These roads would also enable children to spend more time in school instead of transporting paddy; provide villagers better access to off-farm employment during the off-season months in nearby towns; and enable farmers to grow labor-intensive, higher value crops. 6.20 Risks. Although BBR is relatively new, implementation of construction is expected to be carried out reasonably well since an average of only 200 km of roads per district have to be constructed over a period of four years. Previous experience indicates that there has been some difficulty in the maintenance of these roads. However, this risk has been minimized by providing adequate funds for maintenance and obtaining assurances that the roads would be maintained satisfactorily. The risk of possible overestimation of future areas under cultivation has been examined in the sensitivity analysis. - 56 - Ports 6.21 The Government, in the feasibility report for the project, had proposed five ports for rehabilitation under this component - San Jose de Buena Vista port in the province of Antique, Culasi port in Capiz, Dumaguit port in Aklan, and Tubigon and Talibon ports in Bohol. San Jose and Culasi are the two main ports of their respective provinces. Dumaguit, if rehabili- tated, has the potential to become the major port in Aklan. However, Tubigon and Talibon are relatively minor ports in Bohol and are both connected by badly maintained roads to the major port of Tagbilaran, only 60 km and 115 km away respectively. Tubigon and Talibon ports were subsequently eliminated from this component because of their proximity to the major port of Tagbilaran. 6.22 Though relatively small in size compared to national ports, these ports are of major importance to the poor rural population whose inter-regional connection and life line for transportation as well as marketing is based on them. The ports' deteriorated condition results in goods being transported an average of 150 km to other ports by inefficient roads. Most of these ports handle the present traffic with difficulty and will not be F.ble to handle increases in traffic unless facilities are rehabilitated. Further dilapida- tion of ports included in this project would mean hardship and extra expense for people travelling between the islands. Due to very scanty traffic data, the estimates of future volume of traffic handled by the five project ports and the estimates of potential volume of goods foregone due to the bad condition of these ports were based on field observations and production and export data of the provinces (for rice, corn, copra, fish and general merchan- dise). Therefore, these estimates are only approximate. 6.23 Rehabilitation of the ports would start in 1979 and be completed by 1981. The increase in traffic would materialize by the end of 1980. With the rehabilitation of the ports, volume is expected to increase from the present 15,000 tons to 26,000 tons in 1986 for San Jose de Buena Vista, from 100,000 tons to 125,000 tons in Culasi, and from a negligible volume to about 10,000 tons in Dumaguit. After 1986, volume of traffic is assumed to remain constant. These growth rates include a basic growth in the production of the provinces and a diversion of goods transported by road. The economic evalua- tion of the ports has been done by estimating the incremental volume of traffic which would use the rehabilitated port instead of using the road to the next nearest port. It has been assumed that the costs incurred at the two ports is the same and therefore the saving is only the cost of transport by road. The cost and benefit streams for the various ports is shown in Table 6.7. The economic rate of return ranges from 15% for San Jose port to 30% for Culasi port. Barangay Health Stations 6.24 This component consists of 60 barangay health stations which would provide physical facilities and medical supplies to deliver first level health care, family planning services, and nutrition advice to families in the rural areas. The majority of these families cannot pay for such services Table 6.7: ECONOMIC COSTS AND BENEFITS - PORTS (US$ million) San Jose de Buena Vista Culasi Dumaiuit Incremental Incremental benefit Incremental Incremental benefit Incremental Incremental benefit cost Projected Incremental Transp. cost Projected Incremental Transp. cost Projected Incremental Transp. Year Capital O&M volume volume savings Jb Capital O&M volume volume savings Lb Capital O&M volume volume savings fb (ton) (ton) a (ton) (ton) Ia (ton) (ton) ja 1 0.145 0.005 15,000 0.255 0.005 100,000 0.220 0.005 - 2 0.230 0.007 16,500 1,500 0.018 0.425 0.013 101,000 1,000 0.024 0.365 0.011 - 3 0.095 0.007 18,150 3,150 0.038 0.170 0.013 103,000 3,000 0.073 0.165 0.011 5,000 5,000 0.121 4 0.007 19,500 4,500 0.055 0.013 105,000 5,000 0.120 0.011 6,000 6,000 0.145 5 0.007 21,000 6,000 0.073 0.013 110,000 10,000 0.240 0.011 7,000 7,000 0.175 6 0.007 22,500 7,550 0.092 0.013 115,000 15,000 0.360 0.011 8,000 8,000 0.194 1 7 0.007 24,240 9,240 0.112 0.013 120,000 20,000 0.485 0.011 9,000 9,000 0.218 8-15 0.007 26,000 11,000 0.134 0.013 125,000 25,000 0.606 0.011 10,000 10,000 0.292 Economic Rate of Return: 15% 30% 21% /a Without rehabilitation, no increase in traffic is expected. /b Calculated assuming that this volume of cargo would have to be shipped to and from other islands through Iloilo port, incurring additional transport by road of 100 km for San Jose, 180 km for Culasi, and 200 km for Dumaguit at a cost of P 1.0 per km-ton. - 58 - and presently have to travel considerable distances to the nearest town to obtain them. The stations would include medical supplies, a waiting porch, infants' examination room, storage room, toilet facilities, and a water supply system and would be manned by a midwife trained by DOH in providing health, family planning services, and nutrition advice. 6.25 The services provided would be aimed at infants, children, pregnant women, and lactating mothers in an effort to reduce maternal and child mortality and morbidity and increase the use of family planning services. A smaller number of children in the individual household would mean that more resources would be available for consumption and private savings. Living standards of the rural population would improve, resulting in more food and better nutrition for each family member, better material health and child care, improved opportunities for education etc. The main beneficiaries of the component would be the poorer families of the rural population, esti- mated at 47,000, at a cost of about US$19 per family. Rural Water Supply 6.26 The project would provide about 300 village wells and thereby improve considerably the availability and quality of water for about 100,000 villagers. The benefits from a safe and reliable water supply would arise primarily from a reduction in water-borne diseases and the elimination of a considerable amount of unproductive time and effort devoted to hauling water over long distances. These benefits have not been quantified but are judged to justify the small per capita investment of about US$15. The villagers would contribute about 20% of the capital cost in the form of voluntary labor, local materials and land. The villagers will, specifically, donate land for access roads and location of wells, build access roads, fencing and provide unskilled labor for construction and maintenance of the wells. Weighted Economic Rate of Return 6.27 The weighted average rate of return for the irrigation component, the base cost of which is US$11.4 million, is 21%. The rate of return for the road component, based on the results of the six test roads, is 15% for an investment of US$ 31.0 million. The average rate of return for the ports is 25% for a cost of US$ 2.2 million. The weighted economic rate of return for these three components, which account for 90% of the total project costs, is 17%. Benefits from the health and water supply components have not been quantified. 7. AGREEMENTS REACHED AND RECOMMENDATION 7.01 During negotiations agreement with the Government was reached on the following principal points: (a) NIA would submit full evaluation reports for review by the Association prior to implementation for systems costing more that P 3.0 million and summary data forms for the remaining systems costing less than P2 3.0 million (para. 3.07); - 59 - (b) DPH would submit full evaluation reports for review by the Association prior to implementation for the road stretches costing more than P 4.0 million and summary data forms for the remaining road stretches costing less than P 4.0 million (para. 3.13); (c) the aggregate amount of civil works to be done by force account by the implementing agencies would not exceed 40% of the total cost of the works (para. 3.28); (d) a new appointment to the post of Project Director during the project implementation period would be subject to consultation with the Association (para. 4.01); (e) FDSC would complete the recruitment and training of about 45 insti- tutional officers according to an agreed schedule by June 30, 1980 (para 4.05); (f) the Government would include the irrigation component of the project within the scope of the plan of action for provision of agricultural supporting services to Bank Group-assisted irrigation projects being prepared under the National Irrigation Systems Improvement Project II (para. 4.06); (g) DPH would: (i) appoint qualified and experienced engineers to the posts of Project Engineer at the district level before September 30, 1978 and assign or employ qualified technical personnel at the headquarters, regional and district level according to an agreed schedule before December 31, 1979 (para. 4.09); (ii) prepare a plan of action for labor-based construction methods by June 30, 1979 with the assistance of a qualified engineer employed on terms and conditions acceptable to the Association. After review of the plan by the Association, DPH would proceed with its implementation by December 31, 1979 (para. 4.10); and (iii) employ a rural roads engineer for a period of two years to assist the director of BBR in the implementation of the project, on terms and conditions acceptable to the Association before December 31, 1978 (para. 4.11); (h) within five years of completion of construction of project roads the annual maintenance fund for all barangay roads within the six project provinces would be raised gradually to the equivalent of P 6,000 per km (para. 4.13); - 60 - (i) ensure that the equipment supplied under the project would remain under the operational control of district engineers and would be for the exclusive use of barangay road maintenance in these districts (para. 4.14); (j) it would cause PPA to prepare a plan of action by June 30, 1979 outlining the procedures and fees to be levied for use of port facilities which would adequately cover the annual O&M costs of the ports, as well as recovering part of the cost of these improvements, and, after reviewing such plan of action with the Association, would proceed with its implementation by December 31, 1979 (para. 4.17); (k) BPW would strengthen the staff in the field offices of the project area as well as at headquarters and complete the recruitment and training of its personnel for the water supply component before June 30, 1979 (para. 4.19); and (1) the Government would ensure that the beneficiaries of the communal irrigation systems would continue to contribute to the capital cost of the facilities to be provided under the project at existing levels of repayment, and that NIA would consult annually with the Association on the adequacy of such levels (para. 5.10). 7.02 The proposed project would be suitable for an IDA credit of US$28.0 million on the usual terms. The borrower would be the Republic of the Philippines. ANNEX 1 Table 1 Page 1 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Communal Irrigation Systems Province & Future irrigable area (ha) region No. Irrigation system First crop Second crop Abra 1 Kadig /a 50 20 2 Dapilis 50 50 3 Baoyan 200 150 4 Tubo 100 100 5 Bucloc-Sallapandan 150 150 6 San Gregorio 80 80 7 Bio Langangilang 270 150 8 Quidaoen 200 200 Subtotal 1,100 900 Kalinga- 9 Consuelo /a 200 60 Apayao 10 Tumalunog 160 50 11 Wagod-Amacian 200 180 2 12 Pinukpuk /a 50 20 13 Calaccad 130 80 14 Dananao 70 70 15 Mangali 60 20 16 Nambucayan 70 70 17 Dugpa 100 90 18 Malalao 150 70 19 Hanhan 60 60 20 Bagombong 200 200 21 Suyang-Balawag 450 450 22 Calafug 70 70 23 Maling Cabugao 60 60 24 Marimay 150 150 25 Mananig 60 50 26 Salvacion-Maclit 60 50 Subtotal 2,300 1,800 Aklan 27 Lilo-an-Malandayon /a 460 230 28 Buruanga 220 100 6 29 Malay 100 100 30 Belete 370 350 31 Guadalupe 50 20 Subtotal 1,200 800 ANNEX 1 Table 1 Page 2 Province & Future irrigable area (ha) region No. Irrigation system First crop Second crop Antique 32 Bugasong /a 1,140/b 600/b 33 Hamtic 450 160 6 34 Igbobon 180 170 35 San Juan 90 30 36 Bitadtan 180 80 37 Pandanan 60 40 38 Fragante /a 100 40 39 Cairaun-Undero 100 100 40 Dao 100 40 41 Bugo 200 140 42 Pitac 100 100 Subtotal 2,700 1,500 Capiz 43 Ilas /a 700 240 44 Nagba 200/c 50/c 6 45 Salcedo 60 20 46 Dapdapan 50 20 47 Cala-agos 120 40 48 Mababang-sapa 70 30 Subtotal 1,200 400 Bohol 49 Biabas 300 300 50 Tugas 150 150 7 51 Ilihan /a 100 30 52 Modua-San Isidro /a 100 30 53 Gabayan /a 100 40 54 Ilaya 50 20 55 San Isidro-Banlasan 100 30 Subtotal 900 600 Total 9,400 6,000 /a Systems used for detailed feasibility studies. /b Presently irrigated - 800 ha during first crop and 350 ha second crop. /c Presently irrigated - 100 ha during first crop and 50 ha second crop. PNILIPPINES ROКAL 1NPAAS?BUCTURE PBOJE(:Т: 1 Bacen¢вУ Воаде АDд ргоvlдсе Ве¢1оа l 1411naa-ADaYao ocovlnce Уе¢1од 2 ____ Ak1an oruvln=iг Кедlио 6___ ____ __ ___ Bcfdge Brldge Вг[дВе fbвd Иоад 1ю¢[h (ke1 leog[h Вовд leng[h fbad Коад 1еп¢tl� k< .) leng[h до. Dелсгlр[1ов Ps1в[1og Nev То[а1 (в) Мо• Daac[1р[1од Рs1вС1дВ Ner Тои1 (в) Чо• Deccrlp[1оп Bnlecing Nev Тоса1 (в) l Tu6a-Sslвngввng - l4 14 60 34 Glасвд-Dаlмсвп - 16 16 - 74 И. Коад Ma611o-JOgar Ь 10 1Ь 50 2 Sвlвдвоn8-Воllлеу - l6 l6 20 35 Daloacao-Тапидед - 12 12 ЬО 75 Jogar-В1о[Ь - 12 12 - 3 МвмЬо-Воllпеу - 1J 13 W 36 Bulanao-Aa1ao - 10 l0 ЬО 76 San Baвon-GOndonК L 17 15 - 4 Воllпеу-Висlос - 12 12 - 37 N. Вовд, Вап[ву-Tagulan 2 8 l0 - 77 Cowdong-BUlabad - 15 15 - 5 5вlарвдап-Виеlлс - l3 13 20 ЗВ Теgиlвп-Plaukpuk - 10 l0 6U 7В Мвдаlц-Penlplaaon - 12 11 - 6 Висlос-Dвgиlоыл - 8 в ЗО Э9 И. Воад /1-Nalolao 5 1( 1Ь .- 79 Ралlрlввsп-A1gu[aya - 12 12 - 7 Dвg,.lлил-И. ¢овд 16 - 10 l0 ц1 40 Са[вЬоsвп-Ur - l1 11 - 80 И. ¢osd /1-Т1Ь1ао - 13 l3 - 8 N. Воад /б, В1[uen-Bunag - l0 10 40 4! Ива-Tavang - tl В - BI Т1Ь1ео-Агапав 10 В 1В 50 9 И. Вмд ВЬ, Иа<вплвслВсвер-ввпвил 10 - 10 до 4х мл М8ап-�lвьопВ - в е - вх и. ¢л.а �1, н.лагл-тае.а з 1д v 1хо 10 Bвд811o-Natвregong 8 - 8 40 G3 Редаwд-Ви[С1сид 5 9 l4 60 ВЗ И. Road /l, Regвdo-Agdugar 2 12 l4 ЗО 11 Мв[вгвgоn-BuncB l1 - 11 - 44 Atok-Раео Ь 10 !Ь 10 8д д. Road i1, Веlеге-Саlакаn 7 tl l5 ЬО 12 Buneg-Т[neg - l5 l5 20 45 ВагиЬис-Tuыluoog - 12 l2 40 85 И. Вовд /l, Иа1ау-Pava - 10 10 - , 1Э Саgамувn-Ballego l3 - 1Э - бб И. цовд Виgму-Tulgao - 12 12 50 ВЬ Pava-ИаЬее 2 16 1В д0 14 Kallago-Lвgayвn 7 - 7 40 47 Тиlgвд-ВадВад - l4 l4 - 87 1аЬасао-0rtega - 5 5 - 15 N. Вовд /1-Lanelden - 16 16 20 48 Рвlлаg�иувЬ 3 5 8 - 1ь И. Вовд п-ВвипволоаВ 1о - 1о Ь Su6[ocal зz 1ьо з92 зsо 1Т У111аv1с1лвв-Мвро1 l0 - l0 20 SиЬ[о[а1 У1 l56 l7) 3ВО 18 Aoepol-Lu6e !Э - 1Э 60 Ассеи [о 6 Y1th1w 1сгlва[1оп 5Уе[ввв 19 l.uDa-Тlевро 10 - 10 40 Ассевв [о f. Ч1[h1п Irdea[1oo Sv tевв 88 L11o-ап-Nаlапдвуоп - 5 5 - 20 San Juвn�uingulnвбong 3 Ь 9 - 49 Содsыlо - 7 7 10 В9 BurwnBв - 6 6 l0 2l Воllпау-01во - 10 10 - 50 7У�ваlидоg - 5 5 - 90 Спвдвlире - Ь 6 l0 21 Висlос-Ваоуап - 7 ) - 5l Yagod-AYC1oo - 7 1 10 91 Ве1е[е - 5 5 - 52 Plnukpuk - 4 4 � 5и6[о[в1 95 150 245 }40 53 Саlвссад - l0 l0 20 ВиЬ[о[а1 = ?2 22 20 54 Dвымо - 5 5 - Ассевв [о Ь Ч1[61n 1гг1¢atlon 5ув[вы 55 Мвдgвll - 4 ♦ - 2Э Рлд1g - б L - 56 дв�Ьисвуаn - 4 4 - 24 Dapllta - Ь 6 10 57 Оиgрв - 7 7 l0 25 ВвоУлп - Ь 6 10 58 Иаlвlао - Ь 8 l0 26 тиЬо - 8 8 10 59 Yanhвo - f 4 - 27 5ап Gregorlo - 7 7 l0 ЬО ВвgовЬодg - 5 5 - zв в1о ьвввпвц.пВ - 1о 1о w Ы sиуод`-иlвrоВ - ь ь - 29 Quldaoen - З З - 62 Са1а1иВ - 6 4 - 6Э Ma11pg Cebugao - З З - 5иЬ[о[а1 = 44 44 5(1 Ьб Marlry - 5 5 - 65 Мамn1В - 4 4 - М:севв со dealcb 5te[lопв ЬЬ Sslvacioa-Nвc11C - 8 В 10 70 5е11арвдлn - 3 З - 31 Nallbcong - 7 7 10 Suбca[a1 _ ,�Ь 96 ВО 32 Р.а11 - 3 3 - А Plnukpuk - З З - Ассеев со Уав1[р S[а[lопв Ь) sвlЬвlвп - 3 3 !о 5иЬ[осаl _ 16 16 10 6В Саlвпавад - З З - 69 Соnыг - З 3 - . 70 Твnидвд - З 3 l0 7l Твдglвувп - 3 3 10 72 Р1ога - З З - 77 Wua - З З - 3uбtotal _ 20 20 3S Provlnctel виыо[в1 95 210 Э05 600 2l 272 293 � 32 19z 21а 370 ь s 2 л � sг а � Aotlaue�rovlnce. Вевlоп Ь _ СlQ1s arovlnce. Bealow б ВоЬо1 nrovlnce Reelon 7 _ Вгlдуе Вг1дВа Вг1дВе Rовд lbad lедв[h (_Ь) 1eaBCh tbad 1eoB[h Вовд воед lеnвсЬ (4вI leng[h No. Оевпlр[1оп Вкlвtlаg Nвv 2о[а1 (в) Ио. Deecrlpcloa Вкlвtlаg Nвv Уосв1 (в) Уо. Оввстlр[1on Ед1в[tng Вви То[в1 (в) 92 Рв[поаgоп-Сиуврlво 4 ) l1 - l16 3lnввuaQaa-DaYhoBвn 4 В l2 - U1 Sва M1gue1-Obay - l4 I4 _ 9Э llacadlona-3вn tеиВlо - 16 16 - l15 Ргав. Rокав-Sao S1lvaвcra 5 В 1Э - 132 М. Вовд СвсlВЫад-Caefngon - 9 9 94 И. tовд, Св1в1в-Арво 2 9 1l ЬО 116 Рвnву-L1мд 2 З 5 60 l11 Савlаgоп-2т1п1дад - 11 11 ЭО 95 Р. Воад, Си1вв1-Наасего 2 15 L7 60 11i Dвдува-Си1вв1 5 5 10 10 1Эб Aateque и-СвпtовlвЬо ll Э 14 96 Вга-вп-Вад-2агдевв111ов - 16 l6 - l18 И. lовд /1. CulncrSlBup l1 - 11 10 1Э5 Свд[одйо-31kа[ипа - 10 10 20 97 И. ltoad, Lugca-Sвпtlвyo 4 6 10 l50 1l9 Тарвк-llоквв - В В - l36 У. Wвд 3tuв-Llbertad - 7 7 � 9В У. Воад, Виgаводg-Рагцаlиgап 2 9 1l 60 120 Jиlадв-Оврод - 12 12 60 !З) И. Road Сасвsдиа-1lауоgв - З Э ЗО 99 У. Rовд, ■lcadoo-Alesre - 6 6 20 l2l 2ur1a1ud-Dapyao - 4 4 ЗО 1ЭВ У. Вовд 14-2иЬивп 7 7 14 20 100 В. Road. Ивв1и-F1оте■ - 7 7 ЗО 122 Dua`ви-вд-СваСго 17 - l7 - 1Э9 5. Виllодее�апдеlв д в - 8 8 20 101 М. Rовд, lвvв-l4уbип;а - 9 9 20 12Э Sвп Vlesato-Нвjnвув - В 8 ЬО !40 3ev111a-В11аг - б б - 102 5вn Rвв1В1о-Sвn Nвгсlо 5 6 1! = 124 Оиввгао-8а1е1до - З З - 141 У. Воад /б, Свvвувп-DаВовvвп - !4 14 20 142 5во Jове-iвЬива - !6 16 10 Subtocal l9 106 I25 400 SиЬСо[в1 44 ,5S 10Э 2Э0 14Э Овbаува-IавsдвЬао - 6 6 2о ц 4 Свrаувд-Воа[одВ Вид 2 В 10 ЗD Ассевв со б V1ch1n 1гг1ввсlоп Sувсер Ассова [о L Y1tb1n Irrleetloa Sвв[ар !65 Саlврв-Вваlввад 2 l1 1Э 40 10Э Bugвsong - 5 5 l0 125 I1вв - 9 9 l0 146 Sво М1;ие1-Савlпgод - 14 14 - 104 Baвtlc - 9 9 10 126 УвВЬа - 8 В 10 ц7 Савlаsоа-Ввсиа 11 1! b0 IO5 Igbвbon - 4 4 - l27 Saleedo - В 8 10 l4B L11в-Свдарв8вп 5 11 l6 10 106 San Jивп - 4 4 - 12В Depdвpon - 5 5 - 119 Dцohoy-Capling 5 12 17 107 В1[асоп - s s 10 129 c.L-аВ.. - 4 4 - 1so с.1.дsВ•ро-Ввагlу - !0 10 - 108 Рвпдвлеа - 3 З - 1Э0 МвhаЬааВ-8арв - 4 6 - 109 FгвВвпсе - 4 4 - Subtocвl Э2 191 22Э Э50 1!0 Свlгвид-Unдвго - 5 5 l0 SubcoCal _ )8 38 ЗО 1!1 Deo - З З - Ассеп Со L Y1ch1n LrrlвaClon 5rв[ав и z Bugo - 6 ь 10 151 В1ьа. - е е 1о f13 Р1[вс ' 4 4 - 152 Ти`ов - 7 ) l0 l53 111мn - Ь Ь SиЬгосеl - 52 sz so 1sa с.еау•п - �Ь б •- � l55 I1вуа - Ь б - 3ubtotel = ЗЭ 7Э 20 Pruvtnclal виЬ[огвl 19 l58 177 450 4� �7 141 260 Э2 2I4 256 Э70 5�,апагу Вигвпgау гоадв 247 821 1,065 2,250 Ассевв гоадв Iгтlgвсlоп вувtеiв - 2В5 285 250 NealCh висlопв - ЭЬ ЗЬ 60 Тоса1 24Э 1.14Э 117ВЬ 2у540 .v Н � в w к � ' иI^ ANNEX 1 Table 3 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Barangay Health Stations Province & Health station Province & Health station region No. and municipality region No. and municipality Abra I Abauid, Danglas kntique 32 Idiacaan, Pandan Abas, Sallapadan 33 Guinbangaas, Laua-an 3 Dalit, Pilar 6 34 Guyapiao, Patnongon 4 Bengilo, Malibcong 35 Capuyuan, Barbusa 5 Bangbang-kag, Bucay 36 Union, Libertad 6 Velasco, Tayum 37 Tagudtud Sur, Bugasong 7 Turod, San Isidro 38 San Juan, Sibalom 39 Batudtur Sur, Gulasi Kalinga- 8 Buaya, Balbalan 40 Inabasam, San Jose Apayao 9 Agbannawag, Tabuk 1 41 Tinogboc, Caluy 10 Macutay, Rizal 2 11 Namaltogan, Calanasan Capiz 42 Caidguid, Mambusao 12 Balatoc, Pasil 6 43 Tinigban, Panitan 13 Cabaritan, Tabuk 11 44 Sublangon, Ponteverdra 14 Buluan, Conner 45 Pawa, Panay 15 Apatan, Pinukpuk 46 Maindang, Quartero 16 Musimot, Kabugao 47 Duran, Dumalag 17 Tinglayan, Tulgao 48 San Nicolas, Tapaz 18 Tanudan, Talotoc 49 Casanayan, Pilar 19 Pudtol, Capannikian 50 Gibato, Dumarao 20 Atok, Flora 51 Badiangon Pres. Roxas 21 Manangol, Lubuagan 22 Bacsay, Luna Bohol 52 Faraon, Jagna 23 Malegkeg, Santa Marcela 53 Dusita, Sierra Bullones 7 54 Catagdaan, Pilar Aklan 24 Naisud, Ibajay 55 Biabas, Ubay 25 Panayakan, Tangalan 56 Mayuga, Guindulman 6 26 Julite, Libacao 57 Oac, Dimiao 27 Torralba, Banga 58 Tambongon, Candijay 28 Arcangel, Balete 59 San Roque, Mabini 29 Alaminos, Madalag 60 La Hacienda, Alicia 30 Argao, Malay 31 Malon, Altaya ANNEX 1 Table 4 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Principal Project Features Provinces Kalinga- Project Abra Apayao Aklan Antique Capiz Bohol total Communal Irrigation Systems No. of irrigation systems 8 18 5 11 6 7 55 Net irrigable area (ha) 1,100 2,300 1,200 2,700 1,200 900 9,400 Type of diversions Impounding small reservoir - - - - - 2 2 Diversion dam 4 10 5 8 6 5 38 Direct intake 4 8 - 3 - - 15 Barangay Roads No. of stretches 33 40 18 22 17 25 155 New barangay roads (km) 150 156 160 106 59 191 822 Existing roads to be improved (km) 95 21 32 19 44 32 243 Access to & within irrigation systems (km) 44 96 22 52 38 33 285 Access to rural health stations (km) 16 20 - - - - 36 Concrete bridges (m) 600 490 370 450 260 370 2,540 Improvement of Ports No. of ports - - 1 1 1 - 3 Rural Water Supply No. of wells 30 10 30 50 50 130 300 Rural Health Stations No. of stations 7 16 8 10 10 9 60 ANNEX 1 Table 5 Page 1 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Cost of Communal Irrigation Systems /a Type of Cost Total Province Irrigation system diversion Area per ha cost (ha) ----- ('000) ---- Abra Kadig Intake 50 7.00 350 Dapilis Diversion 50 8.00 400 Baoyan Diversion 200 8.30 1,660 Tubo Intake 100 7.00 700 Bucloc-Salla Pandan Intake 150 7.00 1,050 San Gregorio Diversion 80 8.00 640 Bio Lagangilang Diversion 270 8.00 2,160 Quidaon Intake 200 7.00 1,400 Subtotal 1,100 7.60 8,360 Kalinga- Consuelo Diversion 200 8.20 1,630 Apayao Tumalunog Intake 160 8.00 1,280 Wagod-Anacion Intake 200 8.00 1,600 Pinukpuk Intake 50 8.00 400 Calaccad Diversion 130 9.50 1,240 Dananao Intake 70 8.00 560 Mangali Intake 60 8.00 480 Nambucayan Diversion 70 9.50 660 Dugpa Intake 100 8.00 800 Malalac Diversion 150 9.50 1,420 Hanhan Diversion 60 9.50 570 Bagombong Intake 200 8.00 1,600 Su Yang-Balowag Intake 450 8.00 3,600 Calafug Intake 70 8.00 560 Maling-Cabugao Intake 60 8.00 480 Marimay Diversion 150 9.50 1,430 Mananig Diversion 60 9.50 570 Salvacion-Maclit Diversion 60 9.50 570 Subtotal 2,300 8.46 19,460 Aklan Lilo-an-Malandayan Diversion 460 9.50 4,370 Buruangu Diversion 220 9.70 2,130 Malay Diversion 100 9.70 970 Belete Diversion 370 9.70 3,580 Guadalupe Diversion 50 9.70 490 Subtotal 1,200 9.61 11,540 ANNEX 1 Table 5 Page 2 Type of Cost Total Province Irrigation system diversion Area per ha cost (ha) ----- (P'000) ---- Antique Bugasong Diversion 1,140 6.00 6,840 Hamtic Diversion 450 6.00 2,700 Igbaban Diversion 180 5.90/b 1,060 San Jaun Diversion 90 10.00 900 Bitadtan Intake 180 6.00 1,080 Pandanan Diversion 60 10.00 600 Fragante Diversion 100 10.00 1,000 Cairaun-Udero Intake 100 6.00/b 600 Dao Diversion 100 10.00 1,000 Bugo Intake 200 6.00 1,200 Pitac Diversion 100 10.00 1,000 Subtotal 2,700 6.66 17,980 Capiz Ilas Diversion 700 6.80 4,760 Nasba Diversion 200 7.00 1,400 Salcedo Diversion 60 8.00 480 Dapdapan Diversion 50 8.00 400 Cala-agas Diversion 120 7.00 840 Mahabong-Sapa Diversion 70 8.00 560 Subtotal 1,200 7.03 8,440 Bohol Biabas Impounding 300 29.20/c 8,760 Tugos Impounding 150 26.00 3,900 Ilihan Diversion 100 10.00 1,000 Modua-San Isidro Diversion 100 10.00 1,000 Gabayan Diversion 100 17.50 1,750 Ilaya Diversion 50 18.00 900 San Isidro-Banlasan Diversion 100 13.20 1,320 Subtotal 900 20.69 18,620 Total 9,400 8.98 84,400 /a Cost including physical contingencies, engineering, supervision and adminis- tration and O&M equipment. lb Minimum cost per hectare. /c Maximum cost per hectare. PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Communal Irrigation Systems - Cost Estimate (US$'000) Province Project Kalinga- Total Abra Apayao Aklan Antique Capiz Bohol cost Local Foreign 1. Irrigation & Drainage Facilities Diversion dam & intake works 130 450 450 450 290 910 2,680 1,340 1,340 Main canal & secondary distri- bution system 290 800 350 530 200 620 2,790 1,400 1,390 Main & secondary drainage system - - - 120 50 - 170 80 90 Service & access roads 150 190 90 90 30 130 680 340 340 On-farm ditches & drains 240 470 240 570 240 180 1,940 1,170 770 Topographic surveys & mapping 10 20 10 20 10 10 80 40 40 Subtotal 820 1,930 l4 1,780 820 1,850 8,340 4,370 3,970 Physical contingencies (20%) 160 400 230 370 160 370 1,690 960 730 Engineering, supervision & administration (10%) 90 220 130 200 100 230 970 970 - Subtotal 25 2, 1_,_080 25 1,0 2. O&M Equipment 60 80 60 80 60 60 400 20 380 Total 1,130 223 1,560 2,430 1,140 2,50 11,400 6,320 5,080 ANNEX I Table 7 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Cost of Barangay Roads /a Province Total Unit & region Description Unit length cost Total cost (M) P'900 US$'000 Abra New barangay roads km 150 181,000 27,150 3,670 Barangay roads improvement km 95 126,000 11,970 1,620 1 Access to irrigation systems km 44 126,000 5,540 750 Access to health centers km 16 126,000 2,020 270 Concrete bridges m 600 9,000 5,400 730 Subtotal 52,080 7,040 Kalinga- New barangay roads km 156 181,000 28,240 3,810 Apayao Barangay roads improvement km 21 126,000 2,650 360 Access to irrigation systems km 96 126,000 12,100 1,640 2 Access to health stations km 20 126,000 2,520 340 Concrete bridges m 490 9,000 4,410 600 Subtotal 49,920 6,750 Aklan New barangay roads km 160 140,000 22,400 3,030 Barangay roads improvement km 32 105,000 3,360 450 6 Access to irrigation systems km 22 105,000 2,310 310 Concrete bridges m 370 9,000 3,330 450 Subtotal 31,400 4,240 Antique New barangay roads km 106 140,000 14,840 2,000 Barangay roads improvement km 19 100,000 1,900 260 6 Access to irrigation systems km 52 100,000 5,200 700 Concrete bridges m 450 9,000 4,050 550 Subtotal 25,990 3,510 Capiz New barangay roads km 59 140,000 8,260 1,120 Barangay roads improvement km 44 105,000 4,620 620 6 Access to irrigation systems km 38 105,000 3,990 540 Concrete bridges a 260 9,000 2,340 320 Subtotal 19,210 2.600 Bohol New barangay roads km 191 115,000 21,960 2,970 Barangay roads improvement km 32 91,000 2,900 390 1 Access to irrigation systems km 33 91,000 3,000 400 Concrete bridges m 370 8,000 2,960 400 Subtotal 30,820 4,160 Project New barangay roads km 822 149,450 122,850 16,600 Barangay roads improvement km 243 112,760 27,400 3 700 Access to irrigation systems km 285 112,770 32,140 4,340 Access to health centers km 36 126,000 4,540 610 Concrete bridges m 2,540 8,850 22,490 3,050 Total 209,420 28,300 /a Cost including physical contingencies and engineering, supervision and administration, except for bridges where items have been allocated to the roads. When these costs (US$1.09 million) are allocated to bridges the total cost for bridges for the project is US$4.14 million or P 12,060/m. PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Barangay Roads - Cost Estimate (US$'000) Province Project Kalinga- Total Abra Apayao Aklan Antique Cnpiz Bohol cost Local Foreign 1. Civil Works Earthwork-embankment & ditches, etc. 2,970 2,950 1,850 1,320 970 1,970 12,030 7,350 4,680 Gravel surfacing 1,150 1,120 650 560 460 620 4,560 2,280 2,280 Pipe culverts & drainage crossings 370 350 210 180 150 200 1,460 730 730 Concrete bridges 730 600 450 550 320 400 3,050 1,520 1,530 Surveys & investigations 150 130 80 70 60 80 570 280 290 Physical contingencies (20%) 1,080 1,030 650 530 400 560 4,250 2,340 1,910 Engineering, supervision & administration (10%) 590 570 350 300 240 330 2,380 1,500 880 Subtotal 7,040 6,750 4,240 3,510 2,600 4,160 28,300 16,000 12,300 2. 0&M Equipment 2,500 160 2,340 3. Technical Assistance 200 40 160 Total 31,000 16,200 14,800 00' ANNEX I Table 9 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Rural Ports Improvement - Cost Estimate (US$'000) Project Province Total Aklan Antique Capiz cost Local Foreign Breakwater & embankment work 80 200 330 610 370 240 Reclaimed storage area & surfacing 70 80 100 250 130 120 Dredging - - 220 220 130 90 Wharf extension & repairs 300 10 20 330 170 160 Navigation aids - 10 10 20 10 10 New fender system 70 20 30 120 50 70 Electrification, drainage & fencing 50 40 20 110 50 60 Water supply system 40 20 10 70 40 30 Bollard, cleats & bitts 20 - - 20 10 10 Transit sheds 30 30 - 60 40 20 Subtotal 660 410 740 1,810 1,000 810 Physical contingencies (10%) 70 40 80 190 100 90 Engineering, supervision & administration (10%) 70 50 80 200 200 - Total 800 500 900 2,200 1,300 900 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Barangay Health Stations - Cost Estimate (US$'000) Province Project Kalinga- Total Abra Apayao Aklan Antique Capiz Bohol cost Local Foreign 1. Civil Works Building & other facilities 40 100 60 60 60 60 380 270 110 Water supply system 5 15 10 10 10 10 60 40 20 Lighting, drainage & fencing 15 35 15 15 15 15 110 60 50 Physical contingencies (10%) 6 15 10 10 10 9 60 40 20 Engineering, supervision & administration (10%) 6 15 10 10 10 9 60 60 - Subtotal 72 180 105 105 105 103 670 470 200 2. Supplies, Materials & Personnel Furniture & misc. supplies 5 14 8 8 8 7 50 30 20 Medical equipment 5 12 6 6 6 5 40 30 10 Minor instruments 3 6 3 3 3 2 20 20 - Personnel & operating cost for 2 years 10 26 16 16 16 16 100. 80 20 Physical contingencies (10%) 2 6 3 3 3 3 20 10 10 Subtotal 25 64 36 36 36 33 230 170 60 Total 97 244 141 141 141 136 900 640 260 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Rural Water Supply - Cost Estimate (USS'000) Province Project Kalinga- Total Abra Apayao Aklan Antique Capiz Bohol cost Local Foreign Drilling & transportation equipment 116 116 116 116 116 120 700 - 700 Materials (pipes, casing, pumps & misc.) 254 254 254 254 254 250 1,520 220 1,300 Project personnel 5 5 5 5 5 5 30 30 - Salaries and labor 80 80 80 80 80 90 490 490 Technical assistance & training 5 5 5 5 5 5 30 30 - Subtotal 460 460 460 460 460 470 2,770 770 2,000 Physical contingencies (10%) 35 45 35 35 35 45 230 30 200 Total 495 505 495 495 495 515 3,000 800 2,200 a,z M- >4 ANNEX I Table 12 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Preparation for Future Rural Infrastructure - Cost Estimate Unit Total Quantity Unit rate cost Local Foreign (US$) ----- (US$'000) ----- 1. Irrigation Systems (25,000 ha) Project personnel 200 M/months 1,000 200 180 20 Contractual services L. Sum 70 50 20 Surveys, mapping & investigations 32,000 ha 5 160 110 50 Vehicles & misc. equipment Jeeps & station wagons 3 No. 13,000 40 - 40 Hydrometric equipment 10 unit 2,000 20 10 10 Subtotal 490 350 140 2. Barangay roads (3,000 km) Project personnel 120 M/months 1,000 120 110 10 Contractual services L. Sum 110 80 30 Surveys, mapping & investigations L. Sum 60 40 20 Subtotal 290 230 60 3. Ports, Water Supply & Health Project personnel 120 M/months 1,000 120 110 10 Contractual services L. Sum 80 20 60 Surveys, mapping & investigations L. Sum 20 10 10 Subtotal 220 140 80 4. Miscellaneous Components Project personnel 50 M/months 1,000 50 40 10 Miscellaneous services L. Sum 50 40 10 Subtotal 100 80 20 Total 1,100 800 300 ANNEX 1 Table 13 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I BARANGAY ROAD COMPONENT Estimated Road Maintenance (4.0 width) Cost/km Item Pesos US$ 1. Annual Maintenance A. Labor Roadside maintenance (drainage, vegetation control, erosion control, repair of minor structures and traffic safety about 2 times a year) 1,200 162 Surface repair (patching and repair of shoulders about 3 times a year) 1,900 257 Grade surface (traveled way, shoulders and ditches about 3 times a year) 100 14 Subtotal 3,200 433 B. Equipment Machine surface/blading about 3 times a year 800 107 Routine maintenance cost 4,000 440 2. Periodic Maintenance (every fifth year) A. Materials 320 cu m gravel or crushed stone @ P 30.00/cu m 9,600 1,297 B. Equipment (rental and fuel) Surface repair (spreading and compacting gravel) 400 53 Periodic maintenance cost 10,000 1,350 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Summary of Equipment, Vehicles and Materials Quantity Total Cost Prepara- Rural Rural tion Irrigation B. roads Health water Preparation Unit Irrig. B. roads Health water Future Total Item 0 & M 0 & M stations supply future project Total cost 0 6 M 0 & M stations supply Project cost (NIA+FSDC) (DPH) (DOH) (BPW) (Proj.+NIA) Quantity ------------------------(US$000)-------------------- 1. Heavy Equipment Motor grader, 125 hp (with scanfier) 8 8 57 450 450 Tractor, industrial with backhoe/loader 8 8 30 240 240 Farm tractor - 75 hp 8 8 15 120 120 Roller, rubber-tyred (self-propelled) 8 8 20 160 160 Roller, grid (self-propelled) 8 8 20 160 160 Roller, vibrating, 5 tons 8 8 10 80 80 Truck, dump, 6-8 cu yd 8 8 30 240 240 Truck, flatbed, 6 tons 8 8 24 190 190 Truck, water 8 8 24 190 190 Truck, fuel & lubrication service 4 4 45 180 180 Truck mounted percussion rigs and accessories 6 6 75 450 450 Misc, tools & equipment L.S. L.S. L.S. 40 90 130 Subtotal 2,050 540 2,590 2. Vehicles Station wagons, 4 x 4 8 4 2 2 16 13 100 50 30 30 210 Jeep, utility vehicle, 4x4 12 8 - 1 21 10 120 80 - 10 210 Truck, pick up, 3/4 ton, 4x4 9 8 6 23 11 100 90 70 260 Motorcycles, 100 cc 45 - - 45 1.1 50 - - 50 Subtotal 370 220 100 40 730 3. Supplies and Materials Drive pipes 4"-6" size (m) 5,000 5,000 0.06 300 300 Casing 3"-5" size (m) 42,000 42,000 0.006 250 250 Screens (m) 3,000 3,000 0.13 390 390 Pumps including rods, etc. 300 300 0.70 210 210 Miscellaneous equipment L.S. L.S. 370 370 Health Stations Supplies Medical furnishings & equipment 60 60 1.5 90 90 Minor equipment 60 60 0.3 20 20 Hydrometric Equipment 10 10 2.0 20 20 Subtotal 110 1,520 20 1,6 Subtotal (items 1-3) 370 2,270 110 2160 60 4970 Spare parts (10%) of items 1 & 2 30 230 - 60 - 320 Total 400 2,50 110 2, 60 5,290 ANNEX 1 Table 15 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Expected Price Increase Estimate Calendar year 1978 1979 1980 1981 1982 Total ----------------- (US$'000) ---------------- 1. Civil Works & Services Communal irrigation systems 200 1,400 3,300 3,100 3,000 11,000 Barangay roads 600 5,300 8,200 7,700 6,700 28,500 Improvement of ports 80 420 700 700 300 2,200 Barangay health stations 20 300 350 120 - 790 Rural water supply - 200 200 200 180 780 Preparation future rural infra. - 740 300 - - 1,040 Subtotal 900 8,360 13,050 11,820 10,180 44,310 Annual inflation rate (%) 8.0 7.5 7.0 7.0 7.0 Expected price increases /a 20 660 2,050 2,810 3,310 8,850 2. Equipment & Vehicles Communal irrigation systems - 250 150 - - 400 Barangay roads 200 1,800 400 100 - 2,500 Barangay health stations - 50 50 10 - 110 Rural water supply - 800 800 500 120 2,220 Preparation future project - 60 - - - 60 Subtotal 200 2,960 1,400 610 120 5,290 Annual inflation rate (%) 7.0 6.5 6.0 6.0 6.0 Expected price increases /a - 210 190 120 30 550 Total without price increases 1,100 11,320 14,450 12,430 10,300 49,600 Expected price increases 20 870 2,240 2,930 3,340 9,400 Total with price increases 1,120 12,190 16,690 15,360 13,640 59,000 /a Calculated by compounding the estimated rate of price increases in prior years and one half the rate of increase in the year concerned. ANNEX 1 Table 16 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Estimated Schedule of Expenditures Total Item cost FY79 /a FY80 FY81 FY82 FY83 ----------------- (US$ '000) ----------------- Communal irrigation systems 11,000 900 2,400 3,200 3,000 1,500 Barangay roads 28,500 3,300 6,800 7,900 7,300 3,200 Improvement of ports 2,200 300 600 700 400 200 Barangay health stations 900 200 400 200 100 - Rural water supply 3,000 500 1,000 800 500 200 Preparation future project 1,100 400 600 100 - - O&M equipment /b 2,900 1,300 1,300 300 - - Subtotal 49,600 6,900 13,100 13,200 11,300 5 100 Expected price increases 9,400 400 1,600 2,600 3,100 1,700 Total Project cost 59,000 7,300 14,700 15,800 14,400 6,800 /a Bank-Group fiscal years. /b Includes equipment for communal irrigation systems and barangay roads. ANNEX 1 Table 17 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Estimated Schedule of Disbursements Bank-Group fiscal year Accumulated disbursements & semester (US$'000 equivalent) FY79 2nd 200 FY80 1st 2,200 2nd 5,500 FY80 1st 9,500 2nd 14,000 FY82 1st 18,000 2nd 21,000 FY83 1st 24,000 2nd 26,000 FY84 1st 28,000 ANNEX 1 Tnblz! 19 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Proposed Allocation of Proceeds of Credit Costs Proposed Total Foreign credit ------ (US$ million) ----- 1. Civil Works Communal irrigation systems 8.40 4.00 18.0* Barangay roads 20.70 10.60 Improvement of ports 1.80 0.80 Barangay health stations 0.60 0.20 Expected price increases 8.70 4.20 Subtotal 40.20 19.80 * Of which (a) US$2.0 million for mobilization and contractor's equipment and (b) US$16.0 million for other civil works. Disbursement for (a) will be 100% of foreign expenditure and (b) 40% of total expenditure. 2. Equipment, Supplies & Services Communal irrigation systems 0.4 0.4 6.4 Barangay roads 2.5 2.3 Barangay health stations 0.1 0.1 Rural water supply 2.2 2.0 Preparation future project 0.6 0.3 Expected price increases 0.6 0.2 Subtotal 6.4 5.3 Disbursement will be 100% of foreign expenditure for directly imported equipment, 100% of expenditure (ex-factory) for locally manufactured equipment and 65% of total expenditure for imported equipment procured locally. 3. Technical Assistance & Training Barangay roads 0.7 0.4 1.2 Rural water supply 0.1 - Preparation future project 0.2 0.1 Expected price increases 0.2 0.1 Subtotal 1.2 0.6 Disbursement will be 100% of total expenditure. 4. Unallocated Physical contingencies 6.4 2.3 2.4 (Administrative, engineering & project (4.8) personnel) Total 59.0 28.0 ANNEX 2 Table 1 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Rice Production Costs: Physical Inputs and Unit Prices /a Physical Inputs Unit Prices /b Unit Rainfed Unit Price Present Cultivation - mechanical % area 0 P/ha 250 (250) - animal " 100 " 100 (100) Seed - transplanted kg/ha 60 P/kg 1.2 (1.2) Fertilizer - N kg-nutrient/ha 10 " 3.9 (3.9) - P " 5 " 3.1 (4.6) - K " 5 " 1.6 (3.4) Threshing - mechanical /c % area 0 - - manual " 100 - Future without Project Cultivation - mechanical % area 0 P/ha 250 (250) - animal " 100 " 100 (100) Seed - transplanted kg/ha 60 P/kg 1.3 (1.3) Fertilizer - N kg-nutrient/ha 15 " 4.9 (4.5) - P -" 5 " 4.1 (3.8) -K " 5 1.8 (1.6) Threshing - mechanical /c % area 0 - - manual 100 Irrigated (<100 ha) ( 100 ha) Future with Project Cultivation - mechanical % area - 0 15 P/ha 250 (250) - animal i" - 100 85 " 100 (100) Seed - transplanted kg/ha - 55 55 P/kg 1.5 (1.5) Fertilizer - N kg-nutrient/ha - 40 50 " 4.9 (4.5) - P " - - 10 " 4.1 (3.8) - K " - - - 1.8 (1.6) Threshing - mechanical /C % area - 0 30 - - - - manual " - 100 70 - - - /a Agrochemical costs have been provided as a lump sum, Table 2. /b Figures in parenthesis are financial unit prices. /c Cost of mechanical threshing is estimated to be 7% of yield. PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Rice Production Costs and Labor Requirements /a /b Present Future without project Future with project Rainfed rice Rainfed rice Irrigated rice (<100 ha) (=100 ha) Cash Inputs (P/ha) Cultivation 100 (100) 100 (100) 100 (100) 130 (130) Seeds 75 (75) 80 (80) 85 (85) 85 (85) Fertilizer 65 (80) 105 (95) 195 (180) 285 (265) Chemicals 45 (40) 55 (50) 130 (120) 170 (155) Harvesting 0 (0) 0 (0) 0 (0) 100 (90) Other costs 20 (20) 25 (25) 40 (40) 45 (45) Land tax /C (10) (10) (30) (40) Interest /d (20) (20) (30) (45) Total 305 (345) 365 (380) 550 (585) 815 (855) Labor Inputs (man-days/ha) Land preparation 26 26 20 20 Planting 34 34 32 32 Crop management 11 11 26 27 Harvesting 24 24 22 26 Total 95 95 100 105 /a Economic and financial costs are based on rice and fertilizer prices derived in Annex 4. Figures in parenthesis are financial costs used in farm budgets. /b Assumptions on physical inputs and unit prices are in Table 1. /c For farms with assessed value < P 3,000 per hectare, the land tax is 1% of assessed value; otherwise it is 2%. Id Interest charged at 6% (1% per month for 6 months) of average indebtedness. PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Farm Budgets 1.0 ha Farm 3.0 ha Farm Present Future without project Future with project Present Future without project Future with project Rainfed rice Rainfed rice Irrigated rice Rainfed rice Rainfed rice Irrigated rice (<100 ha) ( 100 ha) (<100 ha) (1100 ha) Cropped area (ha) 1.0 1.0 1.0 1.0 3.0 3.0 3.0 3.0 Cropping intensity (%) 100 100 160 160 100 100 160 160 Total production (ton) 1.5 1.5 4.0 4.8 4.5 4.8 12.0 14.4 Gross value of production (P) 1,590 2,225 5,560 6,670 4,770 6,670 16,680 20,000 Cost of production, excl. labor (P) /1 345 380 880 1,370 1,035 1,140 2,640 4,110 Cost of hired labor (P) /b - - - - 230 230 330 390 Net value of production before water charges (P) 1,245 1,845 4,680 5,300 3,505 5,300 13,710 15,520 Cost recovery charges (P) Ic - - 365 320 - - 1,095 960 Net value of production (P) 1,245 1,845 4,315 4,980 3,505 5,300 12,615 14,560 (a) Amortizing Owner Annual payment for land (P) /d 410 410 410 410 1,230 1,230 1,230 1,230 Net crop income (P) 835 1,435 3,905 4,570 2,275 4,070 11,385 13,330 (b) Leaseholder Annual payment for land (P) /e 355 495 1,290 1,510 1,065 1,485 3,870 4,530 Net crop income (P) 890 1,350 3,025 3,470 2,440 3,815 8,745 10,030 /a Based on Table 2. /b Based on a maximum of 40 man-days/month and a total of 480 man-days/year of family labor. Hired labor priced at P 7.0/man-day. /c Based on loan repayment terms of 25 years including 4-1/2 years grace, 70% repaid without interest, 20% at 6% annual interest, and 10% as grant. It has also been assumed that the long-term inflation. outlook for the Philippines is 7% per year (1978-82) and 5% (1983 onwards) and the charge is calculated for 1987 (at full development) in terms of mid-1978 pesos. /d Based on amortizing owner with annual payments over 15 years at 6% of unpaid balance; based on price of land 2.5 times gross value of production. fe Based on 25% of gross value of production minus seed, harvesting and threshing costs. tM ANNEX 2 Table 4 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: 1 Prices and Production Cost Assumptions - Barangay Roads /a /b Gross value Production Net value of Yield Price /c of production cost Id production Crop (ton/ha) (US$/ton) ----------------- (US$/ha) ---------------- Paddy W 1.3 188.6 245.2 59.0 186.2 W 1.5 188.6 282.9 68.1 214.8 Corn W 0.4 164.2 65.7 59.0 6.7 W 0.6 164.2 98.5 72.3 26.2 Copra W 0.8 199.5 159.6 52.3 107.3 W 1.0 199.5 199.5 64.5 135.0 Coffee W 0.6 1,094.9 656.9 194.6 462.3 W/e 0.6 1,094.9 656.9 194.6 462.3 /a Based on data obtained from field surveys, and NISIP I report. /b W = without roads, W = with roads, five years after completion of construction. Ic 1985 economic price (mid-1978 prices) at junction of proposed Barangay road and the provincial road. The farm-gate price has been calculated by deducting the cost of transporting produce from farm to this junction, as applicable to the individual road. /d Includes labor valued at the shadow wage of P 2.7/man-day. /e For newly cultivated coffee land, it has been assumed that there would be no yield in the first two years, 0.2 ton/ha in the third, 0.5 ton/ha in the fourth and 0.6 ton/ha in the years thereafter. The production costs in the first two years total US$304.0, US$129.0 in the third and US$194.6 thereafter. ANNEX 2 Table 5 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Area, Output and Net Value of Production - Abra Test Road (per km) /a /b Year 1 2 3 4 5 6 7 8-20 Paddy Area (ha) W 22.0 22.0 22.0 22.0 22.0 22.0 22.0 22.0 W 22.0 22.0 22.0 24.4 26.8 29.2 31.6 34.0 Output (tons) W 28.6 28.6 28.6 28.6 28.6 28.6 28.6 28.6 W 28.6 28.6 28.6 32.7 37.0 41.5 46.1 51.0 Net value of W 3,751 3,751 3,751 3,751 3,751 3,751 3,751 3,751 production (US$) W 3,751 3,751 3,751 4,619 5,225 5,858 6,519 7,206 Corn Area (ha) W 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 W 10.0 10.0 10.0 11.6 13.2 14.8 16.4 18.0 Output (tons) W 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 W 4.0 4.0 4.0 5.1 6.3 7.7 9.2 10.8 Net value of W 19 19 19 19 19 19 19 19 production (US$) W 19 19 19 113 179 258 348 452 Total Area (ha) W 32.0 32.0 32.0 32.0 32.0 32.0 32.0 32.0 W 32.0 32.0 32.0 36.0 40.0 44.0 48.0 52.0 Output (tons) W 32.6 32.6 32.6 32.6 32.6 32.6 32.6 32.6 W 32.6 32.6 32.6 37.8 43.3 49.2 55.3 61.8 Net value of W 3,770 3,770 3,770 3,770 3,770 3,770 3,770 3,770 production (US$) W_ 3,770 3,770 3,770 4,732 5,404 6,116 6,867 7,658 W-W 0 0 0 962 1,634 2,346 3,097 3,888 /a W = Without road, W = with road. /b Length of test road is 31.5 km. PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Area, Outpuc and Net Value of Production - Kalinga-Apayao Test Road (per km) /a /b Year 1 2 3 4 5 6 7 8 9 10 11 12 13-20 Paddy Area (ha) W 15 15 15 15 15 15 15 15 15 15 15 15 15 W 15 15 15 16 17 18 19 20 20 20 20 20 20 Output (tons) W 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 19.5 W 19.5 19.5 19.5 21.4 23.5 25.6 27.7 30.0 30.0 30.0 30.0 30.0 30.0 Net value of W 2,717 2,717 2,717 2,717 2,717 2,717 2,717 2,717 2,717 2,717 2,717 2,717 2,717 production (US$) W 2,717 2,717 2,717 3,057 3,345 3,645 3,956 4,279 4,279 4,279 4,279 4,279 4,279 Coffee Area (ha) W 9 9 9 9 9 9 9 9 9 9 9 9 9 W 9 9 9 11 13 15 17 19 19 19 19 19 19 Output (tons) W 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 W 5.4 5.4 5.4 5.4 5.4 5.4 5.8 6.8 8.0 9.2 10.4 11.2 11.4 Net value of W 4,140 4,140 4,140 4,140 4,140 4,140 4,140 4,140 4,140 4,140 4,140 4,140 4,140 production (US$) W 4,140 4,140 4,140 3,853 3,550 3,729 4,434 5,358 5,358 6,586 7,814 8,558 8,558 Total Area (ha) W 24 24 24 24 24 24 24 24 24 24 24 24 24 1 24 24 24 27 30 33 36 39 39 39 39 39 39 Output (tons) W 24.9 24.9 24.9 24.9 24.9 24.9 24.9 24.9 24.9 24.9 24.9 24.9 24.9 W 24.9 24.9 24.9 26.8 28.9 31.4 34.5 38.0 39.2 40.4 41.2 41.4 41.4 Net value of W 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 6,857 production (US$) W_ 6,857 6,857 6,857 6,910 6,895 7,374 8,390 9,637 9,637 10,865 12,093 12,837 12,837 W-W 0 0 0 53 38 517 1,533 2,780 2,780 4,008 5,236 5,980 5,980 0' N /a W - Without road, W - with road. a' lb Length of test road is 10.2 km. ANNEX 2 Table 7 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Area, Output and Net Value of Production - Aklan Test Road (per km) /a /b Year 1 2 3 4 5 6 7 8-20 Paddy Area (ha) W 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 W 20.0 20.0 20.0 25.0 29.0 33.0 37.0 41.0 Output (tons) W 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 W 26.0 26.0 26.0 33.5 40.0 46.9 54.0 61.6 Net value of W 3,555 3,555 3,555 3,555 3,555 3,555 3,555 3,555 production (US$) W 3,555 3,555 3,555 4,763 5,690 6,663 7,682 8,746 Copra Area (ha) W 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 W 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 Output (tons) W 12.8 12.8 12.8 12.8 12.8 12.8 12.8 12.8 W 12.8 12.8 12.8 13.4 14.1 14.7 15.4 16.0 Net value of W 1,636 1,636 1,636 1,636 1,636 1,636 1,636 1,636 production (US$) W 1,636 1,636 1,636 1,793 1,880 1,968 2,055 2,144 Total Area (ha) 36.0 36.0 36.0 36.0 36.0 36.0 36.0 36.0 W 36.0 36.0 36.0 41.0 45.0 49.0 53.0 57.0 Output (tons) W 38.8 38.8 38.8 38.8 38.8 38.8 38.8 38.8 W 38.8 38.8 38.8 46.9 54.1 61.6 69.4 77.5 Net value of 5,191 5,191 5,191 5,191 5,191 5,191 5,191 5,191 production (US$) W_ 5,191 5,191 5,191 6,556 7,570 8,631 9,737 10,890 W-W 0 0 0 1,365 2,379 3,440 4,546 5,699 /a W = Without road, W = with road. lb Length of test road is 16.5 km. ANNEX 2 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Area, Output and Net Value of Production - Antique Test Road (per km) /a /b Year 1 2 3 4 5 6 7 8-20 Paddy Area (ha) W 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 W 20.0 20.0 20.0 24.2 28.4 32.6 36.8 41.0 Output (tons) W 26.0 26.0 26.0 26.0 26.0 26.0 26.0 26.0 W 26.0 26.0 26.0 32.4 39.2 46.3 53.7 61.5 Net value of W 3,653 3,653 3,653 3,653 3,653 3,653 3,653 3,653 production (US$) W 3,653 3,653 3,653 4,628 5,594 6,608 7,670 8,780 Corn Area (ha) W 14.0 14.0 14.0 14.0 14.0 14.0 14.0 14.0 W 14.0 14.0 14.0 16.2 18.4 20.6 22.8 25.0 Output (tons) W 5.6 5.6 5.6 5.6 5.6 5.6 5.6 5.6 W 5.6 5.6 5.6 7.1 8.8 10.7 12.8 15.0 Net value of W 78 78 78 78 78 78 78 78 production (US$) W 78 78 78 169 263 375 504 650 Total Area (ha) W 34.0 34.0 34.0 34.0 34.0 34.0 34.0 34.0 W 34.0 34.0 34.0 40.4 46.8 53.2 59.6 66.0 Output (tons) W 31.6 31.6 31.6 31.6 31.6 31.6 31.6 31.6 W 31.6 31.6 31.6 39.5 48.0 57.0 66.5 76.5 Net value of W 3,731 3,731 3,731 3,731 3,731 3,731 3,731 3,731 production (US$) W 3,731 3,731 3,731 4,797 5,857 6,983 8,174 9,430 W-W 0 0 0 1,066 2,126 3,252 4,443 5,699 /a W = Without road, W with road. /b Length of test road is 7.0 km. ANNEX 2 Table 9 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Area, Output and Net Value of Production - Capiz Test Road (per km) /a /b Year 1 2 3 4 5 6 7 8-20 Paddy Area (ha) W 40.0 40.0 40.0 40.0 40.0 40.0 40.0 40.0 W 40.0 40.0 40.0 45.0 49.0 53.0 57.0 61.0 Output (tons) W 52.0 52.0 52.0 52.0 52.0 52.0 52.0 52.0 W 52.0 52.0 52.0 60.3 67.6 75.3 83.2 91.5 Net value of W 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 production (US$) W 7,208 7,208 7,208 8,590 9,634 10,723 11,858 13,038 W-W 0 0 0 1,382 2,426 3,515 4,650 5,830 /a W = Without road, W = with road. /b Length of test road is 12.0 km. ANNEX 2 Table 10 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Area, Output and Net Value of Production - Bohol Test Road (per kma) /a /b Year 1 2 3 4 5 6 7 8-20 Paddy Area (ha) W 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 W 72.0 72.0 72.0 75.6 79.2 82.8 86.4 90.0 Output (tons) W 93.6 93.6 93.6 93.6 93.6 93.6 93.6 93.6 w 93.6 93.6 93.6 101.3 109.3 117.6 126.1 135.0 Net value of W 12,890 12,890 12,890 12,890 12,890 12,890 12,890 12,890 production (US$) W 12,890 12,890 12,890 14,418 15,557 16,737 17,957 19,219 Copra Area (ha) W 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 W 25.0 25.0 25.0 25.0 25.0 25.0 25.0 25.0 Output (tons) W 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 W 20.0 20.0 20.0 21.0 22.0 23.0 24.0 25.0 Net value of W 2,573 2,573 2,573 2,573 2,573 2,573 2,573 2,573 production (US$) W 2,573 2,573 2,573 2,803 2,939 3,078 3,214 3,353 Total Area (ha) W 97.0 97.0 97.0 97.0 97.0 97.0 97.0 97.0 W 97.0 97.0 97.0 100.6 104.2 107.8 111.4 115.0 Output (tons) W 113.6 113.6 113.6 113.6 113.6 113.6 113.6 113.6 W 113.6 113.6 113.6 122.3 131.3 140.6 150.1 160.0 Net value of W 15,463 15,463 15,463 15,463 15,463 15,463 15,463 15,463 production (US$) W 15,463 15,463 15,463 17,221 18,496 19,815 21,171 22,572 1-W 0 0 0 1,758 3,033 4,352 5,708 7,109 /a W = Without road, W = with road. /b Length of test road is 14.3 km. ANNEX 3 Table 1 Page 1 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Schedule of Early Events Agency Activity responsible Target date A. FINALIZE AND EVALUATE PROJECT COMPONENTS 1. Communal Irrigation Systems a. 1979/80 Implementation Program (i) Field surveys, hydrology and planning NIA (PDD) Jul 1978 (ii) Cost estimates and evaluation NIA (PDD) Sep 1978 (iii) Registration and organization of Irrigation Systems Association (ISA) FSDC Oct 1978 (iv) Submit to the Association selected list for systems < 250 ha NIA (PDD) Nov 1978 (v) Prepare evaluation report for Associa- tion's review for systems > 250 ha NTA (PDD Feb 1979 2. Barangay Roads a. 1979/80 Implementation Program (i)- Field surveys, planning, cost estimates and evaluation DPH (PPDS) Sep 1978 (ii) Submit to the Association finalized list of road stretches where cost does not exceed P 4 million DPH (PPDS) Oct 1978 (iii) Prepare evaluation report for Associa- tion's review for road stretches where cost exceeds P 4 million DPE (PPDS) Feb 1979 3. Rural Water Supply a. 1979/80 Implementation Program (i) Field investigations, planning and cost estimates DPWTC (BPW) Jul 1978 (ii) Submit to the Association list of project staff, including training manager and hydrogeologist DPWTC (BPW) Jul 1978 (iii) Agreement of beneficiaries for land, participation in construction and maintenance of wells DPWTC (BPW) Sep 1978 4. Preparation of Future Prolect a. Selection of ten provinces b. Preliminary list and extent of project } NEDA & other Jul 1978 components | agencies Sep 1978 B. SURVEYS, INVESTIGATIONS, DESIGN AND CONTRACT ADMINISTRATION 1. Communal Irrigation Systems a. 1979/80 Implementation Program (1) Complete topographic maps, detail design and tender documents NLA Jan 1979 (ii) Equipment procurement NIA - Contract award Sep 1978 - Delivery of equipment Feb 1979 (iii) Civil works contract award NIA Mar 1979 ANNEX 3 Table 1 Page 2 Agency Activity responsible Target date 2. Barangay Roads a. 1979/80 Implementation Program (i) Complete surveys, design and tender documents DPH (BBR) Jan 1979 (ii) Equipment procurement DPH (BBR) - Contract award Sep 1978 - Delivery of equipment Feb 1979 (iii) Civil works contract award DPH (BBR) Mar 1979 (iv) Employ consultants for design work DPH (BBR) Sep 1978 (v) Employ highway engineer DPH Dec 1978 3. Improvement of Ports a. Complete investigations, design and tender documents BPW & PPA Jul 1978 b. Civil works and contract award BPW Oct 1978 4. Barangay Health Stations a. Complete design and tender documents DPWTC (BPW) Jul 1978 b. Construction contract award DPWTC (BPW) Oct 1978 c. Materials and supplies procurement DOH (i) Contract award Mar 1979 (ii) Delivery of supplies Jun 1979 5. Rural Water Supply a. Equipment procurement DPWTC (BPW) (i) Contract award Sep 1978 (ii) Delivery of equipment Feb 1979 C. CONSTRUCTION 1. Contract Work (starting dates) a. Communal irrigation systems NIA Mar 1979 b. Barangay roads DPH (BBR) Mar 1979 c. Improvement of ports DPWTC (BPW) Jan 1979 d. Barangay health stations DPWTC (BPW) Jan 1979 2. Force Account Work a. Small communal irrigation system < 100 ha NIA Jan 1979 b. Minor works of barangay roads DPH (BBR) Mar 1979 c. Rural water supply DPWTC (BPW) Mar 1979 ANNEX 4 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: I Related Documents and Data Available in the Project File A. General reports and studies on the rural sector: Al World Bank, "The Philippines Priorities and Prospects for Development, Basic Economic Report," Report No. 1095a-PH, May 5, 1976. A2 World Bank, "Agricultural Sector Survey," Philippines, 4 volumes, Report No. 399-PH, May 2, 1973. B. General reports and studies relating to the Project: B1 NEDA/Line Agencies, "Philippines Rural Infrastructure Project, Feasibility Report (Summary report plus 4 appendices), Manila, February 1977. B2 NEDA/Line Agencies, "Philippines Rural Infrastructure Project, Revised Feasibility Report (Summary report plus 4 appendices), Manila, August 1977. C. Selected working tables: Cl Estimated Water Requirements (4 tables) C2 Quantities and Cost Estimates for Various Project Components (8 tables) C3 Price Structure for Rice and Fertilizer (9 tables) C4 Crop Labor Requirements, Crop Budgets, Net Value of Production and Road Construction Labor Requirements (4 tables) Figure 3.1 PHILIPPINES RURAL INFRASTRUCTURE PROJECT: l IMPLEMENTATION SCHEDULE 1978 1979 1980 1981 1982 WORK ITEM 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 F1NALIZE & EVALUATE PROJECT COMPONENTS 1 Communal irrigation Systems (a) For implementation 1979-80 77/ ,, (b) For implementation 1981-82 2. Barangay Roads (a) For implementation 1979-80 (b) For implementation 1981-82 3. Rural Water Supply (a) For implementation 1979-80 (b) For implementation 1981-82 4. Preparation PRIP: Il (al Selection of 10 Provinces & Prelim ist of Project Camp. MAPPING, SURVEYS. DESIGN & CONTRACT ADMINISTRATION 1, Surveys. Mapin- I 7// (a} Communa Irrgation Systems - 1979-80 Program 'K111 1981-82 Program (b) Barangay Roads - 1979-80 Program - 1981-82 Program (ch Improvarnent of Ports (d) Rural Health Stations (e) Rural Water Supply 1979-80 Program 1981-82 Program // ,I/77 , //'/ / 2. Contract Administration (a) Civil Works 1979- 80 Program 1981- 82 Program (b) Procurement Delivery Equipment & Supp!ies onan 1 (c Consultant Services Local Consultant for roads Techrical Adviser for BBIR CONSTRUCTION L. Contract Work (a) Communal Irrgation Systems (b) Barangay Roads le) Improvement of Ports (d) Rural Health Centers 2. Force Account Work Ca) Small Communal Irrigation Systems (b) Minor Works of barangav Roads (c) Rural Water Supply Nota: Shading indieates Wet Season Months World Bank - 18364 PNILIPPINES pUPAL 1NFpцTpUCTURE PROlЕСТ. 1 PROIECT OROAN12AT10N сАли[ r саодо.нАТ1rЮ соиИ�ТтЕЕ 1ССс1 [Аl1ИЕТ СоОЧОимТОд 5кrииУ о1 OFwTC алОS COMMUNwL 1qqW АtЮИ 5Y5tFM5 . 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