Thailand - Petchburi Irrigation Project

RESTRICTED CIRCULATING COPY Report No. TO-319b TO BE RETURNED TO REPORTS DESK This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION PETCHBURI IRRIGATION PROJECT THAILAND December 12, 1962 Department of Technical Operations CURRENCY EQUIVALENTS 20 bahts ($) = 1 dollar (US$) $ 20 million = US$ 1 million THAILAND PETCHBURI IRRIGATION PROJECT TABIE OF CONTENTS Page No. SUMARY ............ ........... .. . i I. INTRODUCTION............ . . . . . . . . . . . . 1 II. AGRICULTURAL BACKGROUND. . ............ . . . . . 1 III. PRESENT IRRIGATION IN THE FETCHBURI PLAIN . . . . . . . . . . 2 IV. THE PROJECT AREA.......... ....... . . . . . 2 V. WATER REQUIREMENTS AND SUPPLY........ . . . . . .. .. VI. THE PROJECT. . ............ . . . . . . . . . . . . 7 A. General . . . . . . . . . . . . . . . . . . . . . . . . . 7 B. Proposed Works . . . . . . . . . . . . . . . . . . . . . 7 C. Cost Estimates . . . . . . . . . . . . . . . . . . . . . 9 D. Finance . . . . . . . . . . . . . . . . . . . . . . . . . 10 VII. ORGANIZATION AND MANAGEMENT ....... . . . . . . . . 10 VIII. BENEFITS AND JUSTIFICATION. ........... . . . . . . h A. Benefit at Farm Prices . . . . . . . . . . . . . . . . . 14 B. Benefit at World Market Prices . . . . . . . . . . . . . 15 IX. CONCLUSIONS AND RECOMMENDATIONS....... . . . . . . . . . 16 ANNEXES 1. Production of Principal Crops in Thailand (1950-1959) 2. Crop Yields, Gross and Net Return of Present Production 3. Rice Taxes and Export Price of Rice h. Cropping Pattern and Water Requirements 5. Requirements and Sources of Water for Future Cropping Pattern of 53,000 Hectares Based on Available Records 6. Construction Schedule 7. Cost Estimates 8. Organization for Operation and Maintenance 9, Crop Yields, Gross and Net Return of Future Production TWO MAPS THAILAND PETCHBURI IRRIGATION PROJECT SUMMARY i. The Government of Thailand has submitted a request for a Bank loan to assist in financing a project to irrigate 53,000 hectares in the Petchburi Province, The estimated cost of the project is the equivalent of US$11.0 million, of which approximately US$3.h million in foreign exchange would be met by the proposed loan. ii. The project area is at present all under cultivation, mainly to rice. Some 33,600 hectares are commanded by irrigation canals but the delivery system has not been completed and irrigation,is by flooding. The climate is tropical and rainfall is erratic. The water supply is inadequate for the irrigated area, and the dry-farming area also suffers from recurrent droughts. Periodical floods constitute a further hazard. iii. The project would eliminate these hazards by the construction of a dam with effective storage capacity of 595 million cubic meters and by rehabilitation and expansion of the existing water distribution system. A distribution system delivering water to the farms and an adequate drain- age system would also be provided. An irrigation experiment farm would be established and the extension service would be greatly expanded. Technical assistance would be sought for the operation of these services. iv. The soils are well suited for the proposed cropping pattern; rice would continue to be the main crop. The water supply and its regulation would be adequate for irrigation of the entire area in the rice-growing season and for irrigation of 10,000 to 20,000 hectares in the dry season. v. The project works would be executed by the Royal Irrigation Department (RID), with a consulting firm undertaking final design and supervision of construction of the dam and its appurtenant works. RID would have full responsibility for design and construction of the drainage and distribution system, including the ditches. The construction period for the dam and distribution system would be four years; completion of the drainage system would take a further two years. RMD would employ a suitably qualified engineer to assist in training RID engineers in water management and irrigation practices. vi. The project would serve about 13,000 farm families and benefits would be substantial. The gross farm benefit/investment ratio would be about 48 per cent and the net farm benefit/investment ratio would be about 16 per cent (para 70). vii. The project is sound and economically justified and would be suitable for a Bank loan of US$3.h million. The borrower would be the Kingdom of Thailand and an appropriate term would be 20 years, including a grace period of four years. THAILAND PETCHBURI TRRIGATION PROJECT I. INTRODUCTION 1. The Government of Thailand has submitted a request for a Bank loan to help finance the foreign exchange cost of a project to irrigate 53,000 hectares in the Petchburi Province. The project involves the cons- truction of a dam in the Kang Krachan District (see Map I), which would impound 610 million cubic meters of water and the completion of a distribu- tion and drainage system. 2. The estimated cost of the project is the equivalent of US$11.0 million, of which approximately US$3.4 million would be financed by a Bank loan. Missions examined the project in 1961 and again in July 1962, and this appraisal is based on their findings. II. AGRICULTURAL BACKGROUND 3. Approximately 85 per cent of the working population of Thailand is employed in agriculture, fisheries and forestry which directly produce 36 per cent of the gross national product. Over 90 per cent of the total exports originates from agriculture; rice and rubber account for approxi- mately one third each of the total exports. 4. Out of the total cultivated area (excluding tree crops) of seven million hectares, six million hectares are in rice and only one million hectares are planted to other crops, such as maize, cassava, castor beans and kenaf. Of the irrigated area of 1.5 million hectares, 1.35 million hectares are under the control of the Royal Irrigation Department (RID). Farmers depend on rainfall for growing rice on the remaining .5 million hectares. 5. Most farms are of family size and average about four hectares. Private ownership of the land predominates, but there also are some tenant farming and sharecropping. There is considerable underemployment in agri- cultural areas, because the cultivation of rice tends to create a high demand for labor only during two periods of the year - planting and harvesting. 6. It is the policy of the Government to take measures which will bring about a substantial increase in rice production to meet the growing demand as the population increases, and to ensure a surplus for export. Since there is little undeveloped land suitable for rice growing, the addi- tional production must be attained by increasing production in existing rice- producing areas through such means as more efficient irrigation. 7. Data on production of the principal crops and exports of rice are given in Annex 1. -2- III. PRESENT IRRIGATION IN THE PETCHBURI PLAIN 8. The Petchburi Plain has been cultivated for many years relying mainly on rainfall. However, because irregular rainfall distribution makes farming hazardous, parts of tne plain have long been irrigated from a system of main canals and by pumping from the river. 9. The government in 1942 began to improve the irrigation system by constructing a diversion dam (completed in 1950) at Tha Sik (see Map II), 25 km southwest of Petchburi, and a distribution system of three main canals and sixteen laterals serving about 22,000 hectares on the right bank of the Petchburi River. In 1949, work was started on extending the system to the left bank. The main canals and laterals on the right bank are nearly completed, but on the left bank, only part of one main canal (serving 11,600 hectares) has been built. A total area of 33,600 hectares is at present under flood irrigation. lork has not yet been undertaken on the planned drainage system, Only minor maintenance has been performed since the construction of the existing system and a considerable backlog of mainte- nance exists. 10, 7ater requirements for the land already under command exceed by far the available river flow, except during part of the rainy season when all parts of the project area are subject to periodic flooding. RID has long realized that the construction of a storage reservoir would be neces- sary. This is now proposed as the key feature of the project. IV. THE PROJECT AREA 11. Location. The 53,000-hectare Petchburi Irrigation Project is located on both banks of the Petchburi River and surrounding the town of Petchburi, 164 km by highway southwest of Bangkok (see maps). To the west are the foothills of the Tennessarim Range; the northern limit is the watershed of Maeklong River; the eastern boundary is the Gulf of Thailand; and toward the south, the project area forms a narrow strip which terminates some 20 km north of the town of Hua Hin. 12. A d&msite has been selected at Kang Krachan on the Betchburi River approximately 45 km upstream from the Tha Sik Diversion Dam. 13. Climate. The climate is tropical with monthly mean temperatures rang- ing from 2 .oC in January to 29.40C in April. Dry, northeast trade winds prevail during January to April giving little rainfall and hot and often drought conditions. From August to November during the southwest monsoon, the total rainfall is heavy, but irregular, resulting in wet, humid condi- tions and often floods. Conditions of rainfall are less extreme during the remaining months. The average monthly rainfall at Petchburi ranges from 15 mm (0.6 in.) in January to 268 mm (11 in.) in October with an annual average of 1,272 mm (50 in.). Rainfall in the southernmost part of the area is about 400 mm less than that at Petchburi. - 3 - 14. Topography. Although an alluvial plain, the topography is not as flat as that of the Central Plain and there are differences in elevation of up to about ten meters. This will present little difficulty in designing the irrigation system, except that small isolated areas will be excluded from command. A strip, about three kilometers wide, along the coast has also been excluded from the project because of salinity problems. Since farmers in the past have relied largely on natural rainfall, most of the paddies are well leveled and bunded. 15. Soils. Exploratory surveys by the Department of Agriculture, together with field observations and crop yield records, show that the soils are, in general, well suited for irrigation. Approximately one half of the soils of the project area (classified as Kampangsaen loams) are medium textured, drain well and are neutral in reaction. They are suitable for growing rice as well as upland crops and have better productive capacity than most soils in Thai- land. In the northern sector, Bangkok heavy clays predominate. They are the same soils found in the greater part of the Central Plain and are ideally suited for rice production, but are somewhat difficult to handle for other crops. They give significant responses to nitrogen and phosphate fertilizers. The soils of some three per cent of the area, comprising about 1,500 ha of the southern extension, are sandy loans of granitic origin and their fertility level and water retention capacity are low. 16. Land Use. Approximately 87 per cent of the farmland in the project area is used for the production of rice. In areas where there are irrigation facilities, the universal practice is to transplant the rice seedlings. In areas where farmers have to rely on rainfall or natural flooding, seed is broadcast as the seeding has to be done rapidly with the arrival of the first rains. Land preparation for broadcast rice is less thorough and is usually undertaken more rapidly than preparation for transplanted rice. On average, transplanting gives from 10 to 20 per cent higher yield and the grain is of better quality. It can be expected that farmers will shift from broad- casting to transplanting as controlled irrigation becomes available through- out the whole of the project area, 17. In the absence of distribution ditches, irrigation water is allowed to ran from one field to the next one. Thus, the farmer located farthest from the lateral is the last to prepare his land. The preparation of seedbeds and the planting season are spread over a period of three months, but this stag- gering of transplanting has the advantage of making it possible for neighbors to exchange labor as needed. On the other hand, late planting results in low yields, particularly when there is insufficient water available toward the end of the growing season to irrigate the land farthest from the lateral. 18. Crops other than rice - so-called upland crops - occupy about 13 per cent of the farming area. Due to their relatively low moisture require- ments, they are grown primarily on lands which are not irrigated at present. The principal annual crops are groundnuts, castor beans, maize, cotton, mung- beans and vegetables. Perennial crops are sugar cane and various tree crops. 19. The use of fertilizer in the area is negligible and few farmers use improved seed. Experimental work is not being undertaken and the extension work in the project area is handled by a single agricultural officer. 20. Land Tenure. The average size of the farm unit is about four hectares with very few farms larger than ten hectares. Usually, a farm is divided into two to five separately located plots. The majority of the 13,000 farm families in the project area are able to handle all the work on their farms with some exchange of labor with their neighbors. Probably more than 70 per cent of the farmers own the land they cultivate. Around the town of Petch- buri, however, many farms are owned by merchants who lease the land to the operator either on a crop-sharing basis or for a fixed rental. 21. Marketing. Marketing is exclusively in private hands and is highly competitive, The farmer may sell rice, surplus to his own requirements, to an itinerant buyer or deliver directly to the local rice mill; perhaps more frequently he sells to the local merchant from whom he has obtained goods on credit during the course of the preceding year. Upland crops, particularly fruits and vegetables, find a market in Petchburi. Bananas, fruit and coconuts are sold to truckers who take the products to Bangkok. Sugar cane is grown to supply the local sugar factory. 22. Credit. Merchants extend credit to farmers at interest rates, which, according to a survey made in the Chao Phya area, vary from 22 to h per cent per annum. A few cooperative credit associations, operating under the supervision of the Ministry of Cooperatives, charge 10 per cent for loans limited to X 5,000. The majority of farmers have debts which are usually incurred as a result of drought and crop failures. Practically all the credit is used for buying food, clothing and household necessities and there is little demand for production or investment credit. Although the enact- ment of a bill to create a Bank for Agriculture and Cooperatives, now under study by the government, is most desirable and would be an advantage to the project, its passage is not essential to the developments proposed. 23. Transportation. The railroad from Bangkok to Singapore, the highway from Bangkok to the south and some 60 Iam of feeder roads traverse the project area, Numerous RID service roads along the canal banks are generally not suitable nor open for public traffic and the river and canals are only navigable in part. When developed, the project area would require a more adequate system of farm-to-market roads. 24. Gross Value of Present Production. Estimates of present production in the project area are given in Annex 2. They are based on a three-year average (1958-1960) of samplings and crop surveys made by RID (irrigated area) and on statistics of the Rice Department (non-irrigated area). The average yield during the period 1958-1960 from paddies actually harvested (33,900 hectares) was almost 2.4 tons per hectare. A further average area of 14,300 hectares was sown to rice, but produced no crop because of drought and flood hazards. Data on yields of other crops and prices received by farmers for their products were obtained from the same sources. Yield and price data were verified by the missions during the course of interviewing more than 100 farmers. 25. The farmer receives an average of X 700 per ton of paddy rice. Prices paid vary from 0 500 to 1 900 per ton according to the quality of the paddy and the time of year in which it is sold. The government levies a "Rice Premium" and export tax on all rice exported (Annex 3). - 5- 26. Upland crops, which are not subject to the Rice Premium or export tax, give the farmer a net return per hectare somewhat higher than he would receive from growing rice, as shown in Annex 2. The present production of the area is summarized below. Gross Value A r e a Production of Production C r o p s Hectares T o n s (1,000 bahts) Rice (paddy) 33,900 81,000 56,700 Sugar Cane 1,100 21,000 2,100 Fruit trees 450 5,600 Other crops 3,250 5,900 Not harvested (rice) 14,300 - Total 53,000 70,300 Average gross return per hectare: Y1,326 27. Net Value of Present Production. Farmers pay no direct charge for irrigation water and only the value of seed and cash expenses have been included in the production costs. The estimate of these expenses is based on a survey in the Chao Phya area made by Kasetsart University and on inter- views with farmers. The estimated net value of present production, as set out in Annex 2, is $ 52.7 million. V. WATER REQUIREMENTS AND SUPPLY 28. No drastic changes in cropping pattern are proposed. Rice would continue to be the principal crop. The acreage of perennial crops would be increased and dry-season crops, to be grown after the rice harvest, would be introduced gradually. The area under irrigation would increase from 33,600 hectares to 53,000 hectares in the wet season, and from about 5,000 hectares to 11,000 hectares in the dry season. After completion of the project, the water requirement for crop production 1/ would average 842 million cubic meters annually (see Annex 4 for details of cropping pattern and water requirements). In addition to the water needed for irrigation, varying amounts up to four cubic meters per second would be diverted to the two townships of Petchburi and Hua Hin for domestic consumption; the annual total of this requirement is estimated to be 23 million m3, 1/ Irrigation requirements were determined from information secured at the Sam Chook experimental area. These results check closely with the theo- retical computation of consumptive use as determined by the Blaney-Criddle method. Considering the effective rainfall (65-90 per cent of actual) and canal, lateral and ditch losses (seasonal project efficiency 48 per cent), the following peak diversion requirements have been developed: Existing Project Liters/sec/ha a) Right bank 1.106 b) left bank 0.775 New extended project 0.775 - 6 - 29. The supply to meet these requirements would be derived from three sources: (a) the effective rainfall on the area under cultivation; (b) the sideflow of streams which enter the Petchburi River between the Kang Krachan damsite and the diversion barrage at Tha Sik; and (a) releases from the reservoir. Based on seven years of consecutive records (1954-1961) of streamflow and rainfall by RID, these requirements for the 53,000 hectares would be supplied from the three sources during the course of an average year as follows: Million M3 Rainfall on 53,000 ha 333 Sideflow 160 Reservoir inflow & storage 372 Total 865 These average figures were obtained from a month-by-month analysis of the operation of the project, using the seven years of records. Provision was made for possible wastage due to inexperienced operation, for conveyance losses in the river between the reservoir and the diversion barrage and in the canals, and for evaporation from the reservoir surface. Annex 5 shows diagrammatically how the sources of supply could have met requirements for the fully developed project for each month during the period. 30. Rainfall in the catchment and project area is subject to wide fluctuations. For instance, according to intermittent records, the yearly runoff at the Kang Krachan damsite varied from an extreme low of 473 million m3 in 1954 to an estimated high of 1,304 million m3 in 1935. Out of 555 mil- lion m3, of average rainfall on the project area, only part, or 333 million m3, have been assumed to be effective, since the rainfall benefits only those areas which are under cultivation. Furthermore, during heavy showers, excess water has to be drained off the fields. 31. The sideflow, which is uncontrolled, would be utilized to the maximum and the releases from the reservoir would be timed to complement the requirements. The maximum drawdown of the reservoir would have occurred in 1955 when, in addition to the inflow, some 390 million m3 of storage would have been required. 32. The reservoi; would have a gross storage capacity of 610 million m of which 595 million ra would be effective storage, when operated at the normal retention level of elevation, 97 m. The catchment area above the damsite is uninhabited and heavily wooded, and the rate of silting in the reservoir is expected to be slow. Flash floods occur frequently and the proposed rese rvoir would be important for flood control as well as for sup- plementing rainfall in the project area. A "rule-curve" for the operation of the reservoir must be developed to utilize the storage to the optimum extent. - 7 - 33. The water supply is adequate for the proposed cropping pattern. The capacity of the reservoir is sufficient to provide flood storage, water supply for domestic consumption and to regulate the streamflow in accordance with monthly requirements. After additional water records are accumulated and experience in the operation of the reservoir has been obtained, it may be possible to increase the regulated flow during the dry season and to expand the area of upland crops. Indications are that perhaps 10,000 ha more, or a total of some 20,000 ha, of dry-season crops could be grown. VI. THE PROJECT A. General 34. The project would provide regulated irrigation, drainage and flood control to 53,000 hectares; it would be completed over a six-year period. 35. The project works would include a rolled earth-filled dam across the Petchburi River at Kang Krachan, 70 km upstream from the town of Petch- buri, The existing diversion barrage would be retained and the two diversion gates and canals would be enlarged. The project works would also include additional supply canals, drainage canals and a distribution system for delivery to farms. An access road of 27 km from the diversion barrage to the dam site was completed by RID in 1961 and farm-to-market roads of a total length of approximately 100 km within the irrigated area would be constructed. The project would provide some additional equipment for operation and main- tenance. A suitably qualified engineer would be employed to assist and train Thai engineers in operation and management of the farm distribution system. An experiment farm would be established within the project area and the extension service would be greatly expanded, both with the assistance of foreign technicians. B. Proposed Works 36. The existing works and works to be constructed are as follows: Works to be Constructed Existing Crest Elevation Height Length Works (m above sea level) --- meters---- Dam Main dam 104 56 733 First saddle embankment 104 42 296 Second saddle embankment 102 20 257 Spillway crest 97 - 40 Other Works - - - - - - - - in kilometers - - - - - - - - - Main canals 99 Laterals 125 - Enlargement of canals - 69 New laterals - 132 Distribution ditches - 1,700 Drainage canals - 179 Farm-to-market roads - 100 -8- The earth movement involved in these works is about 3.3 million' m3 of excavation for the canals, ditches and drains and 3.4 million m3 of fill for the dam and the saddle embankments. On the right bank, part of one main canal and a lateral would have to be lined since they would also carry drinking water. 37. The design of the dam and appurtenant works has been made by RID under the supervision of a qualified engineering firm. This firm would also supervise the construction of the dam. The dam has an impervious central core with semi-pervious upstream and downstream zones. A seepage interceptor zone would be located in the downstream area. The extreme downstream zone would be of random fill with a 1:2.25 slope and the up- stream face would have a slope of 1:2 with a 2.5-meter layer of selected rock for erosion protection. A concrete conduit in the rock at the base of the dam would be used initially for diversion during construction and later would permit controlled releases from the reservoir. The final design of the outlet has not yet been completed and a final design report would be submitted to the Bank for review. 38. The design provides for an unlined spillway channel cut through rock on the right bank with the crest at elevation 97. The capacity of the spillway is designed on 'the basis of the reservoir accommodating surcharge storage of 250 nillion m3 of the design flood of 3,500 m3/second in addi- tion to a 300 m3/sec. base flow. This design capacity is considerably greater than that necessary to accommodate the maximum recorded flood of 2,150 m3/sec. which occurred in October 1955. Accurate hydrological records are available for only a limited number of years. However, as further assurance of the safety of the main dam during a flood of unpredictable magnitude, which might exceed the surcharge storage and spillway capacity, the second saddle fill would be overtopped without damage to any other part of the project since its crest is two meters lower than the main dam and the fill in the first saddle. In the event of the overtopping of the second saddle, the water would return to the river channel immediately below the dam. 39. The main canals and laterals have been designed by RID to meet the flow-capacity requirements throughout the various parts of the system (footnote para. 28) and satisfy the proper relationship between bottom width, water depth, side slopes, freeboard, bank dimension and future opera- tion and maintenance. Adequate structures have been provided. The distri- bution ditches are trapezoidal in cross section, formed partly by excavating below the natural grade and partly by building up the embankment on each side. The distribution ditches would be spaced 300 m. apart with individ- ual turnouts conveying water to the farm plots. Except for a pilot area in the Central Plain, these would be the first distribution ditches in Thailand. Additional low earthen dikes around the paddy fields which are already in existence over much of the area would be constructed by the farmers themselves. A few natural drains developed during flood seasons have been serving the project area to date. These drains would be improved and incorporated into a complete drainage system. The design of the drain- age system would meet the flow-capacity requirement and is satisfactory. Adequate structures have been included in the design and adequate provision has been made for water to enter the drainage channel. 4O. The construction period would be six years, from 1963 through 1969 (see Annex 6). The construction of the distribution system would be completed during the first four years, thus providing regulated water flow to the lands. The drains would be completed during the last three years of the construction period. 1. Transportation. The project area is not well served by roads (para 23). Approximately 100 Ica of feeder roads would be constructed during a four-year period beginning October 1963. The roads would be all-weather roads, with a laterite surface; they would be five meters wide with one-meter shoulders on each side. Almost all the roads would be constructed along main canals and laterals and they would also serve as service roads for RID. The Highway Division of RID would be responsible for construction of the feeder roads. It is not yet decided which government agency would maintain the roads but assurances would be given that the feeder roads would be adequately main- tained and that funds would be provided for this purpose. C. Cost Estimates 42. The cost estimates for the dan (and damsite works) were prepared originally by RID but have been reviewed by consulting engineers. They are based on final design (except for outlet works) and unit prices, which are realistic for this type of construction in Thailand. The estimates for construction have a built-in margin for possible price rises and addition- ally an overall 15 per cent has been added for contingencies. The estimates should be adequate. 43. The estimates for distribution and drainage system have been pre- pared by RID on the basis of a center-line profile layout. This method is satisfactory, taking into consideration the smooth topography of the land. The estimates are based on unit prices of similar structures completed during the last two years. The cost estimates for construction include built-in contingencies of from 5 to 10 per cent and a further overall 15 per cent contingency allowance has been added. These estimates are realistic. Details of the cost estimates given in Annex 7 are summarized (rounded) as follows: Local Foreign Total Financing Financing Cost Estimated cost including interest (baht million) during construction on foreign borrowings 153.6 66.9 220.5 In US$ million equivalent (7.6) (3.4) (11.0) - 10 - D. Finance h. Foreign Financing. The proposed Bank loan would cover the foreign exchange cost of imported equipment, spare parts and materials and foreign engineering services. It would not include the cost of imported fuel or interest during construction, because finance for these items is not sought by the borrower. The amount of the proposed loan is US$3.4 million ($ 66.9 million). 45. Local Financing. The remainder of the cost, totaling about 0 153 mil- lion, would be locally financed and the funds for this purpose would be pro- vided by annual budget allocations. 46. The expenditure schedule, including disbursement of the Bank loan, would be approximately as follows: (in million bahts) 1st 2nd 3rd 4th 5th 6th Year Year Year Year Year Year Total Local Financing 25.1 41.3 45.9 34.3 3.5 3.5 153.6 Foreign Financing 48.2 5.6 7.7 5.4 - - 66.9 VII. ORGANIZATION AND MANAGEMENT 47. The Petchburi Irrigation District is one of the 48 State Districts administered by RID, which is a Department of the Ministry of Agriculture. 48. Construction. The project works would be constructed on force account by RID, which has had previous experience in construction of dams of similar type and in design and construction of distribution systems. An engineering consulting firm has supervised the final design and would supervise the con- struction of the dam and its appurtenant structures and would certify to the appropriateness of the withdrawals from the loan account relating to the dan. Additionally, arrangements would be made for the Bank to have direct contact with the consultants. 49. RID would have full responsibility for design and construction of roads and the drainage and distribution system, including the ditches, and should be capable of carrying out these duties effectively. The capacity of RID to carry out its many commitments on several projects in the coming years has been examined and found to be adequate. Assurances have been given that adequate staff and equipment (in addition to that to be purchased under the loan) would be allocated to the Petchburi project. 50. Operation and Maintenance. The Petchburi Irrigation District's staff for operation and maintenance is presently headed by a project engineer who has four officers in charge of operation, maintenance, office management and - 11 - agriculturE.. statistics. A maintenance crew of 10 to 15 men is employed to carry out mnor repairs and maintenance. Major repairs are the responsibility of the Machinery Section of the RID Operation and Maintenance Division. 51. The present level of maintenance is below acceptable standards. In addition, RID has had limited experience in operation and maintenance of farm distribut,cn systems. The present organization is being changed as shown in Annex 8 -1. The Chief Engineer in charge of operation and maintenance, working under the Director General of the Royal Irrigation Department, would have three experienced senior engineers working under him. One would be in charge of construction and operation of dikes and ditches; another, in charge of canal operation and regulation; and the third, in charge of maintenance. These three engineers, who have been selected for these positions, are well qualified for their particular fields of responsibility. The engineer in charge of dikes and ditches is responsible for the training of the zone tech- nicians (para 52). Fifty have been trained to date. An engineer with appropriate experience in other countries would be employed by RID to work with the engineer in charge of dikes and ditches to assist in developing proper water delivery methods and irrigation practices at the farm level. This foreign engineer's responsibilities would extend beyond the Petchburi project but he would be assisted by one, or more, suitably experienced engineers. The engineer and his senior assistant would be acceptable to the Bank and the senior assistant would devote his full attention to the Petchburi project. 52. An area superintendent (responsible to the Chief Engineer of Opera- tion and Maintenance of RID) would be in charge of operation and maintenance of the Petchburi Project. Four canal superintendents (graduate engineers) and two assistant canal superintendents would be responsible for sections of the irrigation system. They would be in charge of zone technicians who have some training in irrigation engineering, each responsible for about 1,600 ha. These zone technicians would each supervise from 10 to 20 farm "co-operators", or inspectors. These inspectors would each have the responsibility of water delivery and management among 20 to 40 farmers receiving water from one ditch. Farmers would be required to maintain the dikes and ditches on their land in good working order. If they fail to do so, RID has power to carry out this work and charge the cost to the farmer. 53. Past allocations for the cost of operation and maintenance have been inadequate. Based on estimates by RID for the Chao Phya area,in order to achieve satisfactory standards, allocations for operation and maintenance would have to be increased from the present level of about % 24 per hectare (or a total of $ 800,000) to about $ 88 per hectare. The estimated future cost of operation and maintenance would accordingly be around $ .7 million for the project area of 53,000 hectares. In accordance with Thai practice, this amount does not include depreciation on maintenance equipment which is 1/ A second proposed loan for irrigation in Thailand (Dikes and Ditches Project) would provide for a thorough study of requirements for operation and maintenance of all RID irrigation projects in the country. It is possible that the organization outlined in Annex 8 would be changed as the result of this study. - 12 - estimatEd at appr imately 12 per hectare per year, or about % 600,000 for the project area - . Arrangements have not yet been concluded for provision of the recessary funds but assurances would be obtained from the Government that funds would be allocated for adequate maintenance of the project. 54. Jurisdiction of RID. RID has long had legislative authority for the construction and operation and maintenance of main irrigation works including laterals and drains. Until recently, however, RID has not been empowered to construct, or operate and maintain distribution ditches. This has been changed under a Law given Royal Assent on March 27, 1962 which, under certain circumstances, gives RID full power to construct, operate and maintain dis- tribution ditches and dikes. Alternatively, RID may direct the farmers to do this work themselves. The present plan is for RID to construct the farm ditches without direct charge to the farmers. 55. The Law becomes applicable to specific areas by Royal Decree, and its regulations have yet to be issued by the Minister of Agriculture for the project area. The promulgation of a Royal Decree for the project area would be a condition of the loan and any legislative action affecting the existing jurisdiction of RID would be subject to Bank agreement. 56. Technical Assistance. The provision of distribution ditches would make it necessary for the farmers to learn new techniques of water management and the improved water supply would permit the development of new high-return crops. In addition, the mitigation of the risk of crop failure from flood, or drought, would make it economically more feasible for farmers to use fertilizer and other improved cultural practices. It is, therefore, most necessary that the present technical services be substantially improved. 57. The foreign engineer (para 51) would be employed for a period of at least five years to assist the RID staff to develop proper water delivery methods and improved techniques of water management at the farm level. He would assist in the training of zone technicians, and would also train initially 10 graduates of the RID irrigation school in the various phases of water delivery and management. 58. Technical services in agriculture would be reorganized and intensified. An experimental farm would be established within the project area and would be provided with irrigation facilities during 1963. The Research Branch of the Ministry of Agriculture would be responsible for the organization and management of the farm and the appropriate departments (e.g. Rice, Agricul- ture, Livestock, etc.) would provide adequate technical staff for the investigation and demonstrational activities. The emphasis in the farm program would be on investigation and demonstration of both farm and water management techniques, particularly for dry-season crop cultivation and rotation. 1/ In calculating the net benefits of the project, the increase in the cost of operation and maintenance has been taken as 0 4.5 million ($ 4.7 million plus $ 0.6 million, less present cost of $ 0.8 million). - 13 - 59. A separate Central Extension Service under the control of the Ministry of Agriculture would be responsible for extension work within the project area. It is proposed that the service in the area be expanded by the end of the construction period to about 20 extension and farm manage- ment officers supplemented by the assistant technicians now engaged on this work under the Rice Department of the Ministry. It is also planned that demonstration operations on some 30 private farms throughout the project area would be developed to serve as demonstration centers of farm and water management techniques. The Ministry of Agriculture is making arrangements for agricultural experts with appropriate qualifications and experience in other countries to assist and advise in the development and direction of the research and extension service programs and the training of nationals in extension methods. Negotiations are being conducted with Australia for the supply of these experts under the Colombo Plan and, if these are not produc- tive, arrangements would be made to obtain suitable qualified persons from other sources. Arrangements have been completed with FAO for their regional officers on crop rotation and on farm management to devote a substantial portion of their time to the project area. 60. Water Charges. At present, the Government collects a nominal land tax, but no water charge is levied in Thailand, although according to the State Irrigation Act, the Minister of Agriculture is authorized to levy a charge for irrigation water not to exceed three bahts annually per hectare. 61. The introduction of a water charge has been discussed by the Bank with the Thai Government from time to time since 1950. The view of the Government has been that it would be unreasonable to charge for water unless farmers were provided with a complete irrigation system and could count on an adequate supply of water during the growing season. Another reason why the Government is reluctant to charge a water rate is that rice farmers are indirectly taxed heavily through the application of the export tax and Rice Premium. As shown in Annex 3, these levies (on rice, surplus to the farmers! requirements, which is marketed) reduce the cash return to farmers from one hectare of rice by about 0 1,060 as against an estimated cost of operation and maintenance of $ 100. 62. While the project would provide a complete irrigation system, the introduction of a water charge for this project could not validly be con- sidered in isolation of the overall questions of taxation and water use in Thailand. - 14 - VIII. BENEFITS AND JUSTIFICATION 63. With a regulated flow from the reservoir and water control pro- vided thrcugh a farm distribution system with individual farm gates, the farmers would be able to apply water to fields when needed and in quantities to meet the requirements for different crops. This would permit timely planting and harvesting and facilitate the shift from broadcasting to trans- planting of rice. Disputes among neighboring farmers over the use of water should be eliminated. The water supply for domestic use in Petchburi and Hua Hin would be improved. 64. The harvested area of rice is expected to increase from 33,900 to 42,000 hectares, largely because adequate water control would permit the entire area sown to rice to be harvested (Annex 9). Yields per hectare are estimated to increase from 2,400 kg to about 3,000 kg as a result of improved water control, a shift from broadcasting to transplanting and improved cul- tural practices, including some use of fertilizer. 65. A local sugar factory with a capacity of approximately 200,000 tons cane per year has recently been handling only about 21,000 tons. The area of sugar cane is expected to increase nearly fivefold to approximately 5,000 ha. As the result of adequate water supply and some use of fertilizer, yields are expected to increase from the present very low level of 19.4 tons of cane to about 40.0 tons per hectare. 66. The area under bananas, fruit trees, coconuts and vegetables, now less than 3,000 hectares, is expected to increase to approximately 6,000 ha. These crops give a high return per hectare and the Bangkok market could readily absorb the expected production of 2,000 ha of bananas, 3,000 ha of fruit trees, and 1,000 ha of vegetables and other crops during the course of the next ten years. 67. The cropping pattern as shown in Annex 9 is conservative because it assumes that most farmers, already experienced in rice production, will continue to grow rice rather than much higher return crops. It could, how- ever, be expected that they would gradually turn to more remunerative crops as their experience widens and as the market develops. A. Benefit at Farm Prices 68. The estimated gross and net value of production approximately 10 years after completion of the project is given in Annex 9. Prices to farmers prevailing in 1961 have been used for the calculations. The estimated cost of farm production covers only the value of seed and cash expenses and not the value of family labor. 69. The estimates show that the annual gross farm value of production would increase by about 98 million, as against the cost of the project (as amended for the calculation of project benefits, Annex 7) of $ 203 mil- lion. This level of production is not expected to be reached until about 1978. Completion of the dam in 1966 would largely eliminate the losses from - 1 - drought and floods, thereby increasing the harvested area by about 14,000 hectares and also giving some increase in yields. Further increases in production through improved cultural practices and the establishment of new crops would be more gradual. Fruit trees would come into full bearing seven or eight years after planting. 70. The gross farm benefit/investment ratio would be about 48 per cent, which is favorable. Deducting the increased annual on-farm costs of produc- tion, $ 22 million (Annex 9), the expected net value of the increase in annual production before deduction of project operation and maintenance costs would be approximately $ 76 million. After deducting the increase in annual operation and maintenance costs of .5 million, the annual net farm bene- fits would be of the order of 0 71 million. The level of full benefits would not be reached until 10 years after completion of construction but first bene- fits would be obtained during the last two years of construction. Allowing for the ful development period and discounting investments over the life of the project, the net farm benefit/investment ratio would be about 16 per cent. B. Benefit at World Market Prices 71. The prices received by farmers for the major product, rice, are greatly influenced by Government tax and pricing policies so that a separate calculation has been made of the benefit to the economy. 72. It has been shown in Annex 3 that in relation to world market prices for rice the farmer would receive about 0 500 (rounded from 0 518) more per ton for paddy rice if it were not for the export tax and Rice Premium. Paddy rice production from the project is expected to increase by approximately 45,000 tons, so that the gross benefit to the economy from rice would be approximately $ 22.5 million higher at world market prices than the gross benefit to farmers. There should be no change in costs of production, so that the net benefit (estimated at about 0 22 million from Annexes 2 and 9) should increase by the same amount to $ 44 million. There would be no change in the estimate of net benefit from all other crops so that a comparison of net bene- fits at farm prices and net benefits at world prices wou2d be as follows: (baht million - rounded figures) At Farm Prices At World Prices Rice 22 44 All other crops 54 54 Total 76 98 Less increase in cost of project 0 &M 5 5 Net benefit 71 93 - 16 - 73. A-Dart from the fact that the net benefit to the economy would be substantially higher than the net farm benefit as calculated in para 70, the benefits to the economy would also include substantial increase in export earnings from rice. At expected future prices, the additional pro- duction from the project available for export, after providing for estimated increased domestic consumption, should realize about $ 45 million, or US$2.25 million equivalent. The project is clearly economically justified. IK. CONCLUSIONS AND RECOPHENDATIONS 7h. The project would provide an assured water supply and an effective distribution and drainage system for 53,000 hectares on the Petchburi Plain. Under the arrangements proposed, RID should be capable of constructing and operating the project competently. 75. The Government is prepared to give appropriate assurances that: a) funds and other resources required for the proper carrying-out of the project and the operation and maintenance of the works and facilities would be made available promptly as needed (paras 45 and 53); b) consultants would be retained for final design of the dam and appurtenant works and for supervision of construction (para 48); c) any legislative action affecting the existing jurisdiction of the RID would be subject to Bank agreement (para 55); d) a suitably qualified operations engineer, satisfactory to the Bank, would be appointed (para 57); e) an experiment farm would be established in the project area and qualified and experienced technicians would be appointed to assist and advise in the development and direction of research and extension programs and the training of nationals in extension methods (paras 58 and 59). 76. The project is sound and economically justified and is suitable for a Bank loan of US$3. million. The borrower would be the Kingdom of Thailand and an appropriate term would be 20 years, including a grace period of four years. ANNEX 1 PETCHBURI LREIATION PROJECT Production of Principal Crops in Thailand (1950-1959) Export of Upland Milled Rice Food Fiber and Rice Year Paddy Crops Oilseeds Crops Rubber Tobacco Products . . . . . . . . . . . t h ou s an d t on s . . . . . . . . ... ....... 1950 6,684 940 192 29 115 21 1,419 1951 6,782 1,401 238 50 111 42 1,475 1952 7,325 1,587 242 39 100 42 1,548 1953 6,602 1,94 268 43 98 50 1,359 1954 8,239 2,575 346 34 120 53 1,002 1955 5,709 2,844 365 36 133 56 1,248 1956 7,334 4,019 400 52 137 58 1,226 1957 8,297 4,394 434 465 136 66 1,570 1958 5,568 4,618 397 419 146 69 1,133 1959 7,185 5,531 398 474 174 67 1,098 1960 7,035 171 74 1,208 1961 7,780 175 76 1,500 ANNEX 2 PETCHBURI IRRIGATION PROJECT CROP YIELDS, GROSS AND NET VALUE OF PRESENT PRODCTION PER HECTARE Gross Produc- Net Farm Farm Farm tion Value Cf Yield Price Value Costs Production (kg/ha) p.kg. - -------- in baht '000 -------- Paddy 2,00 0.70 1,680 325 1,355 Sugar cane 19,000 0.10 1,900 500 1,L00 Fruit trees 12,500 3,100 9,400 Upland crops 1,825 325 1,500 PR 0 JECT AREA Gross Produc- Net Farm Crop Produc- Farm tion Value of Area tion Value Costs Production (hectares) (tons) -------- in baht 000------- Paddy 33,900 81,OCO 56,700 11,000 45,700 Sugar cane 1,100 21,000 2,100 550 1,550 Fruit trees 450 5,600 1,1400 4,200 Upland crops 3,250 5,900 1,050 1,850 Total Harvested: 38,700 70,300 11,000 56,300 Paddy planted but 14,300 - 2,8r0 - not harvested Total, before O&M 53,000l 70,300 16,800 53,500 Cost of 0&M - 800 - Total 70,300 17,600 52,700 Figures are rounded. 1/ Of which 33,600 hectares are presently under irrigation. ANIEX 3 ETCIURI IRRIGATION PMOJECT Rice Taxes and Export Price of Rice A "Rice Premium" and export tax are levied on all exported rice. These taxes are levied for the dual purpose of providing revenue and of keeping the price for domestic consumption at a level which is now about h% of the export price. Although applied only to rice exported, these levies set the level of prices paid to farmers. In 1960, the "Rice Premium" amounted to X 621 and the export tax to A 119, or a total of X 740, per ton of milled rice. 'ith a milling yield of 70% this is equivalent to $ 518 per ton of paddy. Assuming the average yield of 2.4 tons of paddy per hectare of which the farmer retains about 350 kg, the quantity of paddy to be sold is about 2,00 kg per hectare. Thus, the equivalent of an indirect tax paid by the farmer is 2.050 x 518 or approximately 1,060 per hectare. Based on an average price of X 700 per ton of paddy and a milling yield of 70%, the components, which made up the export price of one ton of milled rice FOB Bangkok in 1960, are as follows: Bahts Percentage Farmer's share 1,000 47 Rice Premium 621 29 T:xport tax 119 740 6 35 Intermediaries, milling, transportation 396 18 'xport price per ton of white rice FOB 71 Bangkok 2,136- 100 The "Rice Premium" is adjusted periodically in accordance with changes in the world market price. The combined taxes collected on a total of about 1.2 million tons of milled rice exported fron Thailand, yielded in 1960 a revenue of / 888 million which represents approximately lr/ of the total government revenue. 1/ or, $107 per ton, which appears reasonable as a long-term price AWm7x 4 PETCHBURI IRRIGATION PROJECT Cropping Pattern and Water Requirements PROPOSED CROPPING PATTERN ESTIMATED WATER REQUIREMENTS TO PRODUCE A CROP Cr o p s Dry Season Wet Sbason C r o p s Cubic Meters per Hectare ..... in 1p000 hectares.$.. Sugar Cane 5 5 Sugar Cane 20,00 Bananas 2 2 Bananas 20,400 Fruit trees 3 3 Fruit trees 18,000 Rice - 42 Rice 15,000 Vegetables and others 1 1 Vegetables 1,500 per month Fallow 42 - Total 3 3 WATER REQUIREMENTS BY CROPS AND MONTHS (in million cubic meters) C r o p s Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total Sugar Cane 8.5 8.5 8.5 8.5 8.5 8.5 8.5 8,.5 8.5 8.5 8.5 8.5 102.0 Bananas 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 3.4 40.8 Fruit trees 4.5 4.5 4.5 4.5 4.5 4.5 46 4,5 h.5 146 4.5 4.5 54.0 Vegalles 1.5 1.5 1.5 1.5 1.5 1.5 1 5 1,5 - - 1.5 1.5 15.0 R i C e -- - - - 210 10o0 1680 16F.o 126.0 42.0 630.0 Total 17.9 17.9 17.9 17.9 17.9 17.9 38.9 122.9 184.4 184.4 143.9 59.9 841.8 ANNEX 5 THAILAND PETCHBURI IRRIGATION PROJECT REQUIREMENTS AND SOURCES OF WATER FOR FUTURE CROPPING PATTERN OF 53,000 HECTARES BASED ON AVAILABLE RECORDS RESERVOIR RELEASES SIDE FLOW EFFECTIVE RAINFALL 200 200 150 --150 --- .Li.iM M (..A M P F MF U0 00 100 ISO z 0 15 *5150 0 00 ISA J J N D M A M J J A S O N D J FM A M J J A 0 1958 1959 1960 APRIL 1962 IBRD-980R ANNEX 6 PETCHBURI IRRIGATION PROJECT Construction Schedule 1963 '1964 ' 1965 ' 1966 ' 1967 1 1968 ~t IIf I i t I I t t 2) Canals t.------.------.---------- I I t I I 1 I t 2) CaamDts h ....3.---------..-----.....4..... fI I t t tI 3) Farm Ditches L .-------.i.---------i---------- i---------4 1 itI I I I Ift 4) Drains I .-----------------I--------j ifI I It 1 1 i I I ttI if ANNEX 7 Page 1 PETCHBURI IRRIGATION PROJECT Cost Estimates (in million bahts) Local Foreign Financing Financing Total I. Dam and Reservpir Equipment -- 33.2 33.2 Construction 1/ 65.0 1.5 66.5 Contingencies 11.5 -- 11.5 Engineering & Overhead 10.8 5.3 16.1 II. Canal System Equipment and spares -- R.3 A-3 Canal Structures 18.8 -- 18.8 Canal Excavation 1.5 -- 1.6 Drainage 8,n -- .0 Contingencies 4.5 --. Engineering & Overhead 3.1 -- 3.1 III. Farm Distribution System Equipment ani spares -- 6.0 6.0 Excavation 2.1 -- 2.1 Contingencies 0.3 -- 0.3 Engineering & Overhead 0.2 -- 0.2 IV. Feeder Roads Equipment and spares -- 10.5 10.5 Construction 13.7 -- 13.7 Contingencies 2.6 -- 2.6 Engineering & Overhead 1.7 -- 1.7 V. Maintenance Equipment -- 2.1 2.1 Total Cost excluding interest 143." 66.9 210.7 VI. Interest during Construction 9.8 --9 T5-172 on Foreign Currency) TOTAL COSTS I53 -0 6. 1/ Excluding 1 4 million for the completed access road ANNE 7 Page 2 Adjustment of Cost Estimates for Economic Justification (Million Bahts) Total Costs excluding interest- 210.7 Access Road 4.0 214.7 Less Remaining Depreciated Value of Construction Equipment: Dam 4.6 Canals and Drainage 1.5 Farm Ditches 3.4 Feeder Roads 1.5 11.0 Total Project Investment for Economic Justification 203.7 1/ Interest during construction is not included, because investments and benefits are discounted back to the beginning of the construction period (see para 70). ANNEK 8 PETCHBURI IRRIGATION PROJECT Organization for Operation and Maintenance A. ROYAL IRRIGATION DEPARTMENT HEADQUARTERS RID Director General Deputy Operation & Maintenance Highway Division Chief Engineer Dikes & Ditches Construction Canal Operation Maintenance Operation Regulation Foreign' Technicians B. PETCHBURI IRRIGATION PROJECT Area Superintendent Canal Canal Canal Canal Superintendent Superintendent Superintendent Superintendent Right Bank Right Bank Right Bank Left Bank No. 1 No. 2 No. 3 Assistant Assistant Canal Canal Superintendent Superintendent Zone Zone Ze Zone Technicians Technicians Technicians Technici Technicians Farm Cooperators Farm Cooperators Farm Cooperators Farm Cooperators Farm Cooperators or Inspectors or Inspectors or Inspectors or Inspectors or Inspectors ANNEX 9 PETCHBURI IRRIGATION PROJECT CROP YIELDS, GROSS AND NET VALUE OF FUTURE PRODUCTION PER HECTARE Gross Produc- Net Farm Farm Farm tion Value of Yield Price Value Costs Production (kg/ha) $ p.kg. -------- in baht '000 -------- Paddy 3,000 0.70 2,100 560 1,540 Sugar cane O,ooo 0.10 .,000 800 3,200 Bananas 6,000 0.80 L,800 560 4,2h0 Fruit trees 12,500 3,100 9,oo Vegetables & others 12,500 560 11,940 PR 0 JECT AREA Har- Gross Produc- Net Farm vested Produc- Farm tion Value of Area tion Value Cost Production (Ha. (tons)- -------- in baht '00- - Paddy h2,000 126,0CO 88,200 23,520 64,680 Sugar cane 5,000 200,000 20,000 1.,000 16,000 Bananas 2,000 12,000 9,600 1,120 8,480 Fruit trees 3,000 37,500 9,300 28,200 Vegetables & others 1,000 12,500 560 11,940 Total 53,000 167,800 38,500 129,300 Increase over present (before C&M costs) 97,500 21,700 75,800 Increase in costs of operation & maintenance - k,500 - Total 97,500 26,200 71,300 Rounded figures. THAILAND CHAO PHYA AND PETCHBURI IRRIGATION PROJECTS MAP I UTTARADIT SONHEE DAM *(umdr study/ YANHEE DAM TAK PHITSANU OK Kampangpetch Nakornsawan - 0 eHYA CHA0 PHYA Lopburi Sphantr Srabur. \ ,AYUTHYA -pj Area Kanchanabur . covered by map '.g u BANGKOK ..Chachoengsao ILAND S BANGKO Songkhrom Petchbur Gu/f of Tha/and Gulf of Thailand PETCHBUR/ Se DAM KANGKRACHAN DAM NOVEMBER 1961 IBRD-909 MAP I Ban - LOCrm PETCHBURI - 1 - - Hard Chao - - -Samran Iih Z3 øP4 - Hin or THAILAND PETCHBURI IRRIGATION PROJECT Cornpeted rrigationcanals Irrigation canals underconstructon .-- ''' "\_or propos ed Drainage canalsunder construction or proposed .--*Otherexstng canals \P rent rrgated a rea \ Peroposed i rrigated area for souther,n porttor of irringatrer rea+~s. Railwaoy NOVEMBER 1961 I BRD-926