Nepal - Third Narayani Irrigation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 15606 IMPLEMENTATION COMPLETION REPORT NEPAL NARAYANI III IRRIGATION PROJECT (CREDIT 1715-NEP) MAY 1,1996 Agriculture and Water Operations Division South Asia Country Department II 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 = Nepalese Rupee US$1.0() 0 NRs. 20.5 (at appraisal June 1986) US$1.00 = NRs. 49.4 (1994/95 rate used in ICR) WEIGHTS AND MEASURES I meter (m) = 3.28 feet I kilometer (km) = 0.62 miles I hectare (ha) = 2.47 acres 1.50 bighas I million cubic meters (Mm3) 810 acre-feet or 35.3 million cubic feet I cubic meter per second (m3/s) = 35.31 cubic foot per second (cfs) I cubic foot per second (cfs) = 0.028 cubic meters per second (m3/sec) I metric ton (t) = 2.205 pounds FISCAL YEAR OF BORROWER Julv 16 - Jtlv 15 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank DBC Don Branch Canal DOI Department of Irrigation ERR Economic Rate of Return IMGN His Majesty's Government of Nepal ICR Implenmentation Completion Report IDA International Development Association LCF Labor Conversion Factor MWJV Manufacturers Unit Value NEC Nepal Eastern Canal NPV Net Present Value NZIDB Narayani Zone Irrigation Development Board NZIDP Narayani Zone Irrigation Development Project O&M Operation and Maintenance PCR Project Completioni Report PPAR Project Performance Audit Report POP Project Operation Plan RWS Rotational Water Supply SAR Staff Appraisal Report SDC Swiss Development Cooperation SCF Standard Conversion Factor TII tertiary irrigation unit WUC Water Users' Committee WUCCs Water Users' Coordinating Committees WUGs Water Users' Groups kiharij Wet Season (June to October) rabi Drv Season (November to February)  FOR OFFICIAL USE ONLY NEPAL IMPLEMENTATION COMPLETION REPORT NARAYANI III IRRIGATION PROJECT (CREDIT 1715-NEP) CONTENTS PREFACE .......... EVALUATION SUMMARY .................................................. ii PART I PROJECT IMPLEMENTATION ASSESSMENT .......................................1 A. Statement and Evaluation of Objectives ................................................1 B. Achievement of Objectives ...............................................4 C. Major Factors Affecting the Project ..............................................6 D. Project Sustainability ...............................................7 E. IDA Performance ...............................................8 F. Borrower Performance ...............................................9 G. Assessment of Outcome ........9......................................9 H. Future Operation ...............................................9 I. Key Lessons Learned .............................................. 11 PART II STATISTICAL TABLES ................................................. 12 1 Summary of Assessments .............................................. 14 2 Related Bank Loans/Credits .......... ......... .. ......................... 14 3 Project Timetable .............................................. 14 4 Loan/Credit Disbursements - Cumulative Estimated and Actual .......................... 15 5 Key Performance Indicators .............................................. 17 6 Key Indicators for Project Operations .................. ............................ 17 7 Studies Included in the Project .............................................. 18 8A Project Costs ............................................... 18 8B Project Financing ............................................... 19 9 Economic Costs and Benefits .............................................. 19 10 Status of Legal Covenants ............................................... 20 11 Compliance with Operational Manual Statements .............................................. 21 12 Bank Resources: Staff Inputs .............................................. 21 13 Bank Resources: Missions ............................................... 21 This document has a restricted distribution and may be used by recipients only in the perfornmance of their official duties. Its contents may not otherwise be disclosed wivhout World Bank authorization.  APPENDICES A Aide-Memoire of Supervision/Implementation Completion Reporting Mission ... 23 B Financial and Economic Re-Evaluation ............................................................ 32 Table 1: Crop Pattern and Yields of Stage I & Stage II at Appraisal & ICR ....... 37 Table 2: Estimated Farm Budgets and Project Rent at Full Development ........... 38 Table 3: Estimated Project Rent and Cost Recovery (Rs/ha) .............................. 39 Table 4: Prices used for the Financial and Economic Analyses ........................... 40 Table 5: Derivation of Economic Prices for Internationally Tradable Commodities ............................................................ 41 Table 6: Exchange Rate, Price Indices and Derived Inflators ............................. 42 Table 7: Economic Rate of Return Calculation for Stage I and Stage II ............. 43 Table 8: Flood Damage from Bagmati and Lal Bakeya Rivers ........................... 44 Table 9: Flood Damage in Block 15 of NZIDP .................................................. 45 Table 10:Annual Flood Protection Benefit .......................................................... 46 Table 11 :Economic Rate of Return Calculation (Flood & River Protection) ... 47 Project Data Sheet - Histogram of Don Branch Canal Supply to NEC ................ 48 C Borrower's Evaluation of the Project ......................................................... 49 D CoFinancier - Swiss Development Cooperation's Evaluation Report .................. 58 Map: IBRD 19950 Narayani III Irrigation Project Location .64  i NEPAL IMPLEMENTATION COMPLETION REPORT NARAYANI HI IRRIGATION PROJECT (Credit 1715-NEP) PREFACE This is the Implementation Completion Report (ICR) for the Narayani III Irrigation Project in Nepal, for which Credit 1715-NEP, in the arnount of SDR 21.6 million (US$24.5 million equivalent), was approved on June 19, 1986 and made effective on March 20, 1987. The project was cofinanced by a Swiss Franc (SwF) 15.0 million (US$7.5 million equivalent) grant (Swiss Grant N.umber 01680) from the Government of the Swiss Confederation, administered by the Swiss Development Cooperation (SDC). The Credit was closed on June 30, 1995, one year later than the originally planned closing date of June 30, 1994. On May 31, 1994, SDR 7.3 rnillion of the IDA Credit and SwF5.0 million were canceled due to restructuring of the project. An unused amount of SwFO.5 million was canceled in June 1995. Final disbursement of the IDA Credit took place on February 1, 1996, at which time the undisbursed balance of SDR 1.802 million was canceled. Approximately US$17.1 million of the IDA Credit and approximately SwF9.5 million (US$6.3 million approximately) of the Swiss grant were disbursed. A draft ICR was prepared by a Food and Agriculture Organization/World Bank Cooperative Program (FAO/CP) rnission which visited Nepal in February/March 1995. SDC representatives also participated in the field visit of FAO/CP ICR mission. Preparation of the final ICR was initiated during IDA's final supervision-cum-ICR rmission in March/April 1995. The draft ICR was based on materials in the project files and discussions with project staff and beneficiary farmers. The ICR was finalized by the Task Manager, Ohn Myint, Agriculture and Water Operations Division, South Asta Country Department II, and reviewed by Mr. Shawki Barghouti, Chief, Agriculture and Water Cperations Division, and Ms. Kazuko Uchimura, Project Advisor. The Borrower and the cofinancier provided comments that are included as Appendices C and r to the ICR. The Bt rrower also contributed to the preparation of the ICR by providing a detailed Project Completik.n Report and a draft Project Operation Plan, which are available in the Asia Information Center.  f  ii INPLEMENTATION COMPLETION REPORT NEPAL NARAYANI m IRRIGATION PROJECT (Credit 1715-NEP) EVALUATION SUMMARY Introduction 1. The project was designed as a third time-slice of IDA support for modification and rehabilitation of the N4arayani Zone Irrigation System. The system was designed to enable Nepal to use 24.1 m3/sec of Gandak river water for irrigating a total area of 37,400 ha, in accordance with its 1959 agreement with India (see Figure 1). The system receives water supply from the Don Branch Canal (DBC) from Gandak Barrage in India. IDA's involvement was in a phased manner. 2. The first stage of IDA's support for the Narayani Zone Irrigation System was under the Birganj Irrigation Project (Credit 373-NEP, US$6.0 million equivalent, 1973). Its objective included completing and upgrading the irrigation and drainage system on 28,700 ha of the 37,400 ha commanded by the Nepal Eastern Canal (NEC). Because of implementation delays and thus considerable cost overruns, the project area was later reduced to 16,300 ha, designated as Stage I. The reduced project was completed in 1981 and was followed by the Narayani Zone Irrigation Development Stage II Project (Credit 856-NEP, US$14.0 million equivalent, 1978), which was designed to develop the 12,400 ha deferred from the Stage I project and to provide intensified agricultural support services. Although progress in the achievement of physical targets was satisfactory, operation and maintenance (O&M) and the full involvement of farmers in water distribution at the farm level needed to be improved. The Stage II Credit closed on December 31, 1986. The Stage m Project under review was to complete the modification and rehabilitation of the remaining command area of 8,700 ha of the system and to cure the deficiencies of the Stage I and II areas. Project Objectives 3. The objectives of the project were to: (i) increase dry season agricultural production by introducing an equitable, predictable, and reliable irrigation system in the project area; and (ii) to reduce the risks to monsoon crop production by making protective irrigation available when requested. Flood protection and drainage improvemrents would reduce the risks to crops and the physical  iii infrastructure. Management objectives were to develop fu11 fanner participation and cooperation in the O&M of the tertiary water distribution system. 4. The project included: (a) improvements to NEC, including lining of selected canal reaches, construction of control and access structures, and repairs to the Tilawe weir; (b) irrigation and drainage down to the farm level in Stage IIn area (8,700 ha) and providing about 40 shallow tubewells, (c) improvement and repairs of irrigation and drainage systems in Stages I and II areas (28,700 ha) down to the farm level; (d) flood protection and river training works on the Lal Bakeya and Bagmati rivers (Stage III area) and flood protection on .eight rivers crossing the Stages I and II areas; (e) technical support including consultancies for: (i) design and supervision of construction; (ii) project monitoring and evaluation; (iii) studies; and (f) support of project establishment and O&M costs. 5. Project Reformulation. The objectives were clear but the unpredictability of the water supply from the DBC in India made it unrealistic to expect predictable and reliable irrigation on the full project area of 37,400 ha. The DBC supply was erratic and always lower than the treaty amount. Taking account of actual flows received from India, the project was reformulated after a mid-term review in 1993 so that: (a) the area to be filly developed would be reduced to 24,500 ha comprising mainly of Stage I and some Stage II areas; (b) rehabilitation works already started for main and secondary canals for the rest of the Stages I and II areas would be completed; (c) Stage HI irrigation development of 8,700 ha would be excluded but increased iiver training and flood protection works on the Lal Bakeya and Bagmati rivers would be completed; (d) river training and flood protection works on rivers crossing the NEC, the extent of which has already been increased to safeguard the NEC from further flood damage, would be completed; and (e) all further construction of tertiary canals would be by farmers in accordance with HMGN's new Irrigation Policy, 1992. Implementation Experience and Results 6. Construction of the reformulated project has been substantially completed (over 80 percent) except for tertiary canals (about 33 percent), which are to be constructed by farmers. Development of furll fanner participation and cooperation in the distribution of water have been partially achieved. These were delayed by there being almost no water to distribute from 1986 to June 1991 at the time of the Stage II project due to the failure of the DBC in India in late August 1986. Water supply from India's DBC was restored in mid-June 1991, although full supply with the agreed amount of 24.1 m3/sec was not received. The supply hardly reached 60 percent of the agreed full supply amount (see data sheet on page 48). Many farmers need convincing that the redesigned project works will supply the irrigation water they require and that the structures provided at secondary and tertiary levels are appropriate for their needs. 7. The Bank and the Borrower relied on the 1959 treaty with India on the amount of water supply. However, this was never realised in the supply history of the DBC. The failure to take account of the fact that the supply from the DBC was substantially less than the treaty amount was a serious deficiency in project preparation and design. The commitment of the Government and the implementing agency to the project was not in doubt, but there is no evidence that beneficiaries were  iv given an opportunity to influence the design of the project, which included the fornation of water users groups. The area irrigated was not monitored carefully which made evaluation of project results difficult. IDA's relations with the co-financier were satisfactory. 8. It is expected that at full development in the year 2000/01, the targets for incremental production of vegetables, sugarcane and pulses will be exceeded despite reduced areas, and that there will be incremental production of maize which was not included in the cropping pattem at appraisal. The incremental production of paddy is expected to be less than estimated for the whole project at appraisal, but about the same as was estimated for the Stage I and II areas. Incremental production of wheat and oilseeds is much less than estimated at appraisal due to smaller incremental areas for both crops and lower incremental crop yields for wheat. The risks of flood damage to crops in the Stage m area, human life and physical infrastructure (for a district town - Gaur) have been reduced by river flood protection and drainage works. 9. The project management made considerable efforts to implement the project with due diligence and efficiency but, for most of the implementation stage, the project suffered severe shortage of funds and was not provided with adequate budget for efficient implementation. Although the procedure for collectng water service charges has been reviewed, the levels of charges, which would not be enough to cover the cost of O&M of the system, have not been reviewed. No water service charges have yet been collected because of the unreliable supply. Because of the shortfalls in budget, slow procurement for the main ICB contract, and above-mentioned deficiencies, the project was rated as a "problem project" for the last three years of implementation. 10. The re-estimated economic rate of return (ERR) is 16 percent for the restructured project as a whole, including flood and river protection benefits. For the irrigation-only scenario of the improved Stages I and II under the restructured project, the re-estimated ERR is 19 percent. No re- estimation of ERR was made for the original scope of project as it was not implemented. Both re- estimated ERRs are less than estimated at appraisal. Summary of Findings and Future Operations 11. The implementation of the project was delayed by: (a) floods in 1986, 1987, and 1993 that caused heavy damage to both the NEC and the DBC in India, which supplies Gandak water to the NEC'; and (b) IDA's insistence that the Borrower change the system of water distribution. The trade and transit disagreement between India and Nepal from about March 1989 to mid-1990 resulted in a severe shortage of diesel fuel which compounded the delay, as did inadequate budget provisions by HMGN and uncertainty in reassessing the reformulation of the project. 12. Slow procurement for the main ICB contract caused by serious underestimation of the contract cost by consultants, acting for the implementing agency, also delayed the project by almost one year. The total cost of the project is estimated to be about US$25.5 million (NRs. 953.4 million). ' Repair of NEC was completed by early 1989, but repair of the DBC was very slow. No water was received from the DBC betwee August 1986 and June 1991, i.e., five consecutive project years.  v This is about 72 percent of the SAR estimate in US Dollar but, due to devaluation of the Nepalese Rupees in relation to US Dollar in the rate of exchange, it is about 132 percent of the SAR estimate in Nepalese Rupees. Approximately SDR 12.50 million (US$17.1 million equivalent) of the IDA Credit and approximately SwF9.5 million (US$6.3 million approximately) of the SDC grant have been disbursed. Final adjustment from the IDA Credit was made in February 1996. SDR 9.1 million and SwF5.5 million were cancelled from the Credit and grant respectively. The main construction works outstanding are tertiary canals and field channels to be built by farmers. 13. The success of the project depends on: (i) availability of water from the DBC; (ii) adequate budget for O&M; (iii) completion of construction of tertiary canals; (iv) applying generally simple rules for operation of the irrigation system; and (v) water users understanding the importance of maintaining essential features of the system. Three important elements need strengthening: (a) the development and application of operating rules which cope with the erratic water supply from DBC; (b) maintenance of the main and secondary canals and structures; and (c) training water users in the O&M of the system. 14. Based on the assumptions described in Appendix B, the Net Present Value (NPV) of the irrigation componet of the restructured project when cash flows are discounted at 10 percent is positive. However, the assumptions are based on sustainable benefits following completion of construction of tertiary canals. The outcome cannot be rated as "satisfactory" since the project was reformulated without inclusion of the Stage HII area and at the same time the completion of the tertiary canal system was also partial at the Credit closing. Thus only some of the original objectives were met and the works included in the reformulated project were partly completed. The ERR can be affected if the benefits are not sustainable. Due to the uncertainty of these tertiary canals being completed by farmers and the unreliability of assured supply of water from DBC, the project sustainability is rated "uncertain". Key Lessons Learned 15. The key lessons learned are: (a) A water right based on an international treaty may be insufficient guarantee of reliable physical delivery. A critical evaluation of the situation should be done prior to the project investment. (b) Before embarking on a new stage of a project such as Narayani, the availability of water should be reassessed. Unreliable water.supply for any reason destroys farmer confidence in the ability of the irrigation authorities and can lead to a lack of cooperation. (c) Participation of beneficiaries in the design, construction and implementation, and O&M is very important in a large public irrigation system where available water resources have to be shared among many beneficiaries in an organized and  vi timely manner. Training farmers to understand the design of the water system and its performance is necessary for large public irrigation systems where water have to be shared according to agreed time and quantity. (d) The design of a large public irrigation systems must be flexible, simple and socially acceptable to small farmers and their communities. Social acceptability should be tested before committing heavy investment. Water User Groups can function effectively only when reliable irrigation supply can be assured. (e) Service charges to cover full O&M costs of public utilities after improvement must be imposed and this should be considered a country-wide issue in any investment project. (f) Regular evaluation of project impact on beneficiaries is more likely to be successful where the work is carried out by independent consultants rather than by project staff (g) Public and government awareness of proper utilization of natural resources must be developed through various means of investment lending.   IMPLEMENTATION COMPLETION REPORT NEPAL NARAYANI III PROJECT (Credit 1715-NEP) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. STATEMENT AND EVALUATION OF OBJECTIVES Statement of Objectives 1. The objectives of the project were to increase dry-season agricultural production by introducing an equitable, predictable, and reliable irrigation system in the project area, and to reduce the risks to monsoon crop production by making protective irrigation available when requested. Flood protection and drainage improvements would reduce the risks to crops and the physical infrastructure. Management objectives were to develop full farmer participation and cooperation in the water distribution and management of the system. 2. Background. The appraised project was the third phase of IDA funding for development of a scheme in central Terai for modification and rehabilitation of Narayani Zone Irrigation System, which was designed to enable Nepal to use 24.1 m3/sec of Gandak river water, in accordance with its 1959 Indo-Nepal Agreement. Narayani Irrigation System receives water supply from Don Branch Canal (DBC) of the Gandak Barrage in India. Before the Bank's involvement, the original system consisted of regulation structures built only on secondary canals and the distribution network was terminated at turnouts serving an area of more than 100 ha. HMGN requested IDA assistance to overcome the shortcomings of the original project. 3. IDA's involvement in the project has been divided into stages. The objective of the Stage I project (Birganj Irrigation Project - Credit 373-NEP, US$6.0 million in 1973) was to complete and upgrade the irrigation and drainage on 28,700 ha, out of the total 37,400 ha, and to provide groundwater irrigation to 2,700 ha outside the command area of Narayani Irrigation System. The surface irrigation area development was reduced to 16,300 ha because of implementation delays and cost overruns. There was also less success in groundwater development. The project was completed in 1981. According to the Project Performance Audit Report (PPAR No. 4267 of December 30, 1982), the failure of the groundwater development was mainly due to inadequate attention to O&M, weak well design, and the then unreliable power supply. The report's re-estimated economic rate of return (ERR) of the project was 21.0 percent. 4. The Stage I project was followed by a Stage II project (Narayani Zone Irrigation Development Stage II - Credit 856-NEP, US$14.0 million in 1978) which was designed to complete the 12,700 ha deferred from Stage I, and to develop five community-managed tubewells and fifty  2 shallow tubewells on another 800 ha. The Credit was closed on December 31, 1986 after three extensions. The Project Completion Report (PCR) of June 1990 stated that the irrigation and drainage system was substantially completed by 1985, but initial operations in early 1986 experienced management difficulty in the minor distribution system. No further trial could be made in Stage I and II areas as the parent supply canal, the DBC, was breached by a major flood in late 1986. Since then and up to June 1991, the system's water supply was interrupted for five years. Funding for community tubewells was eliminated in 1982 due to non-cooperation of farmers. Twenty-five shallow tubewells were drilled, but the wells were never developed as a result of farmers' refusal to take over the tubewells because the Agricultural Development BaDk's (Nepal) financing was apparently unattractive to the farmers. The ERR of the Stage II project as recalculated for the PCR was 16 percent, which assumed that the Don Canal water supply would be restored by mid-1990. The actual water supply was restored in mid-1991. 5. With the intention to consolidate the projects' achievements and to incorporate lessons learned from the earlier stages, the Stage III project was approved in mid-1986. The project was to be implemented over a seven-year period, incorporating the following main components: (a) Improvements to Nepal Eastern Canal (NEC) and repairs to the Tilawe weir. Works on NEC would include lining of selected canal reaches, canal slope protection, strengthening of canal embankments and construction of control and access structures. The Tilawe weir, severely damaged during the 1985 monsoon, would be extensively repaired. (b) Stage III area (8,700 ha). Irrigation and drainage works down to the farm level (approximately 4 ha sub-chak) would be built on the remaining area of 8,700 ha of the system, together with about 40 shallow tubewells. (c) Stages I and II areas (28,700 ha). Improvement and repairs would be made to irrigation and drainage systems down to the farm level constructed under earlier projects (Credits 373- and 856-NEP). (d) Floodprotection and river trainingworks. Embankments on the Lal Bakeya and Bagmati rivers (Stage III area) and flood protection on eight rivers crossing the Stages I and II areas would be provided. (e) Improvements to village and service roads. (f) Vehicles and equipment for O&M of the completed system. (g) Construction and equipping of a regional workshop.  3 (h) Technical support, including consultancies for: (i) design and supervision of construction; (ii) project monitoring and evaluation; and (iii) studies. (i) Support of project establishment and O&M costs. Evaluation of Objectives 6. Realism. The project was neither complex nor unusually demanding for the Borrower and the implementing agency. The objectives were clear but the unpredictability of the water supply from India's DBC, which was known at appraisal, made it unrealistic to expect predictable and reliable irrigation on the full project area of 37,400 ha. Taking account of actual flows which never exceeded 60-70 percent1 of the agreed amount according to the past records before and after the 1986 breach, the project was reformulated in 1993 as follows: (a) the area to be fully developed down to tertiary irrigation unit (TIU) level would be reduced to 24,500 ha (Blocks 1 to 10)2; (b) the rehabilitation works already started for the main and secondary canals in Blocks 11 and 12 (Stage II) would be completed; (c) Stage I1I irrigation development would not be included, but increased river training and flood protection works on the Lal Bakeya and Bagmati rivers would be completed; (d) river training and flood protection works on rivers crossing the NEC, the extent of which had already been increased to safeguard the NEC from further flood damage, would be completed; (d) all further construction of tertiary canals would be by farmers in accordance with HMGN's new 1992 Irrigation Policy; and (e) shallow tubewells were earlier excluded from the project on the grounds that they could be installed without the assistance of HMGN. 7. Innovation. The originally designed specific discharge of 0.66 I/sec/ha was low for the paddy-based irrigation system. With the original specific discharge there were competing demands at the time of peak requirements. This specific discharge has been doubled in the design ' The flow records of the Don Branch Canal showed erratic and uncertain supply even when it was normally in service. Prior to the 1986 breach, nominal deliveries amounted to 56 percent ot the scheduled volume and the number of closures averaged 191 days per year as against 45 days of scheduled closures. The flow in individual weeks sometimes fluctuated 50-100 percent. The pattern and character of supply did not change even after the Don Branch Canal resumed supply in mid-1991. 2 Assumed to be achieved before 1999.  4 of rotational supply in the tertiary system of Stage I and Stage II to closely satisfy peak demands. The standard practice of introducing gated 8 ha sub-chaks in Stages I and II has been changed to ungated 4 ha sub-chaks in the project, after experiencing the difficult management in operation of Stages I and II. The minor canal networks are to be transfered to farmers after the project. The project was innovative in that it was built around eventual beneficiary farmers' ownership and management of the tertiary distribution system after the project. B. ACHIEVEMENT OF OBJECTIVES 8. Construction of the reformulated project has been substantially completed i.e. over 80 percent (Table 5) in the main and secondary canal system as well as in flood protection works, except for tertiary canals to be constructed by farmers. Only 33 percent of the tertiary canal modification was completed at the Credit closure. The Credit had been extended for one year solely for the purpose of ICB's retention money, which must be reimbursed only after the one-year warranty on the completed infrastructure. 9. Although increased dry season agricultural production was the main objective of the project, with wet season production being safeguarded, the appraisal also forecast almost as great an increase in wet season production of rice. The increases in production in tons/year at full development3 estimated by the ICR mission, as compared with appraisal estimates, are shown below. Paddy Wheat Oilseeds Pulses Vegetabl Sugarcane Maize e Appraisal Stages I, II 30,910 34,267 5,825 2,352 4,045 X 16,815 0 &ll Appraisal Stages I & 22,088 24,384 4,573 1,760 1,435 13,683 0 Stage II ICR Stages I & I 22,735 10,567 2,296 2,411 2,870 24,395 3,087 ICR as %.of Appraisal Stages I & II 103 43 50 137 200 .178 ICR as % of Appraisal Stages I, III fI 74 3 1 39 103 71 145. _~- = ! - =7 , It is expected that at full development the targets for incremental production of vegetables, sugarcane and pulses will be exceeded despite reduced areas, and that there will be incremental production of maize which was not included in the cropping pattem at appraisal. The incremental production of paddy is expected to be less than was estimated for the whole project at appraisal, but about the same as was estimated for Stages I and II areas. Incremental production of wheat and 3Assumed to be achieved in 2000/2001.  5 oilseeds is much less than was estimated at appraisal due to smaller incremental areas for both crops and lower incremental crop yields for wheat. 10. The risks of flood damage to crops and physical infrastructure have been reduced by flood protection and drainage works along the major rivers passing the irrigation system. There are some intangible benefits obtained by having Bagmati River flood protection works which protect the cultivable land in the Stage m area, as well as a district town named Gaur. In addition, the flood damages of Tilawe Barrage, which is supplementing the irrigation water supply to the system, have been repaired by the project. 11. Development of farmer participation and cooperation in the distribution of water has been only partially achieved. No tertiary system has yet been fully completed and turned over to water user groups. This was delayed by the lack of water for distribution from 1986 to June 19914 , and the switch over from the existing gated system of water distribution to a new system involving non-gated structured irrigation distribution network and rotational water supply (see para. 25). 12. In Blocks I to 5 (14,644 ha), 472 out of 548 WUGs have been formed and 162 have been maintaining tertiary canals, but none have yet collected water charges from members. Three Water Users' Coordinating Committees (WUCCs) have been formed. It is proposed that one WUCC with its Water Users' Committee (WUC) and 6 WUGs should very soon take over a secondary canal in Block 1-Branch Canal 7 serving an area of 156 ha. Many farmers need convincing, through training on the newly introduced rotational water supply, that the redesigned project works will supply the irrigation water they require and that the structures provided at secondary and tertiary levels are appropriate for their needs. The future success of the project requires: (a) the provision of a well- planned, realistic and sustained program for the further development of water users' associations (WUGs, WUCs and WUCCs) and the taking over of responsibilities by them; (b) the completion of tertiary canals; (c) the building of confidence between the project O&M staff and water users' associations; (d) a high level of O&M of the project's main infrastructure by the Department of Irrigation (DOI); and (e) accountability of DOI for poor O&M and service delivery to the users. 13. Economic Rate of Return. No re-estimation of the ERR was done for the original scope of the project since it was never implemented. The ERR has been re-estimated for the re-scoped project at 16 percent and 19 percent, respectively, with and without flood control benefits, as compared with 22 percent estimated at appraisal, based on the projected costs and benefits of the project. The re-estimated ERR, which includes benefits from a separate flood and river protection works of the project, estimated over a 25 year period, is 13 percent. Assumptions used in the calculation of cost and benefit streams are described in Appendix B. However, the assumptions used are based on sustainable benefits following completion of construction of tertiary canals even for the re- scoped project. 4 Due to failure of the Don Branch Canal in India in late August 1986. Water supply from India was restored in mid-June 1991.  6 14. The average net income of a farm family from crops is estimated to increase due to the project by about 35 percent from about NRs. 21,100/year to about NRs. 28,600/year in 1994/95 prices (see Appendix B, Table 2). C. MAJOR FACTORS AFFECTING THE PROJECT 15. Factors Not Generally Subject to Government Control. The major factor affecting the project is the unreliability of water supply from the DBC in India, which brought into question the scope of the project resulting in its eventual reformulation (para 6), causing uncertainty and delay. The implementation of the project was delayed by: (a) floods in 1986 and 1987 that caused heavy damage to both the NEC and the DBC which supplies Gandak water to the NEC5, and (b) IDA's insistence that the Borrower change the minor system of water distribution. 16. The ERR has been only slightly affected by changes in economic prices of commodities as shown below in 1994/95 NRs./ton. SARI' ICR Paddy 10,547 10,716 Sugarcane 762 1,705 Wheat 12,100 11,913 Oilseeds 16,846 17,670 Urea 18,104 13,100 "' Source: SAR, Annex 1, Table 12 converted to US$ at the 1986 exchange rate, inflated by the MNIV index and converted to NRs. at the 1994/95 exchange rate. 17. The trade and transit disagreement between India and Nepal from about March 1989 to mid- 1990 resulted in a severe shortage of diesel fuel which contributed to a delay in implementation of the project. 18. Factors Generally Subject to Government Control. Implementation of the project was delayed by inadequate budget provisions by HMGN and uncertainty in reassessing the re- formulation of the project. 19. Factors Generally Subject to Implementation Agency Control. Implementation of the project was delayed by slow procurement for the main ICB contract caused by serious under- estimation of the contract cost by the consultants acting for Narayani Zone Irrigation Development 5 Repair of NEC was completed by early 1989 but repair of the DBC was very slow and no water was received from the DBC between August 1986 and June 1991.  7 Project (NZIDP). In order to reduce the cost of the project the ICB contract was re-tendered with reduced quantities of road metalling and drainage. 20. Costs of flood control and river training increased by about US$3.8 million and costs of the Stage III irrigation works decreased by about US$5.8 million. The total cost of the project is estimated to be about US$25.5 million (NRs. 953.4 million)6 This is about 72 percent of the SAR estimate in US Dollar but, due to the devaluation of the Nepalese Rupee in relation to the US Dollar, is about 132 percent of the appraisal estimate in Nepalese Rupees. Approximately US$17.1 million of the IDA credit and approximately SwF9.5 million (US$6.3 million approximately) have been disbursed. After project restructuring in May 1994, SDR 7.3 million and SwF5.5 million were cancelled from the Credit and grant respectively. Final adjustment on the credit was made on February 1, 1996 and the unused SDR 1.802 million was also cancelled. The main construction works outstanding are tertiary canals and field channels to be built by farmers. Additional drainage works not detailed at appraisal are required at a cost of NRs. 5.0 million (US$100,000), as estimated by NZIDP, and are still to be completed. D. PROJECT SUSTAINABILITY 21. Water Availability. In view of the major siltation problems at India's Gandak headworks and the head reaches of DBC, as well as the vulnerability of DBC to floods at its cross drainage, sustained water supplies at the agreed levels are unlikely to be provided. This was recognised during project reformulation when the area to receive reliable irrigation was reduced from 37,400 ha to 24,500 ha. There is, nevertheless, a risk that reliable water would not be provided even for this reduced area. Furthermore, the system's conveyance design was based on the preventive irrigation principle so that even when a fully supply discharge of 24.1 m3/sec is provided by DBC, the resulting specific discharge for the Stage I and Stage II areas (28,700 ha) will be less than 0.75 I/sec/ha, which is considered low for paddy peak demands in Nepal. It is also necessary to agree with the Bihar authorities on a schedule of closures for maintenance of DBC at times suitable to agricultural demands. The Ghora Sahan Branch Canal, which takes off from DBC in India immediately upstream of the head of NEC, has a major breach which, when repaired, will divert more water into the Ghora Sahan Branch Canal thereby decreasing the flow of water to NEC. Thus water availability for the system is very uncertain even for the re-scoped area. 22. Budget for O&M. The Project Operation Plan (POP) prepared by NZIDP assumes an annual maintenance budget of NRs. 20.35 million in 1994/95 (NRs. 831/ha for 24,500 ha) diminishing steadily to NRs. 11.5 million in 1999/2000, when it is assumed that all canals serving areas less than 1000 ha would have been handed over to water users' committees who would pay for O&M. However, the agreed budget for O&M construction in 1994/95 is only NRs. 14.01 million, which includes preparation of irrigation boundary maps (NRs. 1.2 million) and organisation of WUGs (NRs. 1.5 million), leaving only NRs. 11.31 million for maintenance. This corresponds to NRs. 462/ha for 24,500 ha and also has to cover the reach of NEC serving Blocks 11 and 12 and the secondary canals 6 The US$ amounts in the ICB contract have been converted to NRs at current exchange rates.  8 in these blocks, which are likely to receive some irrigation, flood protection and road works. It is quite clear that the amounts allocated for O&M is insufficient. 23. The success of the project is also dependent upon: (a) completion of construction of tertiary canals by farmers; (b) applying generally simple rules for operation of the irrigation system; and (c) water users' understanding the importance of maintaining essential features of the system. The Government's continued support to the above principles, coupled with motivation of O&M staff, are important for the successful implementation of the project after the Credit closure. Three important elements need strengthening: (i) the development and application of operating rules which would mitigate the erratic water supply from DBC; (ii) maintenance of the main and secondary canals and structures in accordance with the project design which would ensure full supply level in the delivery canal; and (iii) training water users in the operation and maintenance of the system. Based on these issues and concerns, the sustainabiity of the project is rated as "uncertain". E. IDA PERFORMANCE 24. Before and during appraisal, IDA failed to take account of the fact that the supply from the DBC was substantially less than the treaty amount agreed with India. This was a serious deficiency in project design and should have been a major deciding factor for investment. The commitment of -HMGN and NZIDB to the project was not in doubt, but there was no evidence that beneficiaries were given an opportunity to influence the design of the project which included the formation of WUGs. There should have been more incentives for beneficiary participation to sustain the project. The financial package was generally appropriate but not adequate due to underestimation of civil work costs by consultants employed by the implementing agency. The appraisal mission based quantities and costs on estimates supplied by the Borrower's consultants, which were later found to be inaccurate. The consultants' estimates should have been more thoroughly checked by the appraisal mission. The appraisal report has some minor inconsistencies in Annex 10 that shows detailed design drawings and modifications to consultants' drawings of hydraulic structures for tertiary canals in a pilot area. The implementation plan and performance indicators were adequate. 25. Based on past experiences in Stages I and II, IDA convinced the Borrower and its consultants to change its minor network water distribution from the existing gated system of 8 to 10 ha sub-chak where many WVUGs had already been formed, to a new system involving structured irrigation networks and rotational water supply with 4 ha sub-chak. This required different chak sizes and, therefore, different WUGs, remodelling of secondary canals and structures, additional structures and rearrangement of the tertiary canal layout. The concept was not thoroughly discussed with farmers resulting in delays, additional expenses, confusion and loss of confidence in NZIDP. There is a risk that the expected benefits from this change would not be realised until NZIDP staff and water users understand and accept the concepts involved under the rotational supply system. 26. IDA provided frequent and generally good and helpful supervision and adopted a flexible approach to the implementation of the project. However, the area irrigated was not monitored by the project using their irrigation boundary maps. That made evaluation of project results difficult. IDA's relations with the co-financier were satisfactory.  9 F. BORROWER PERFORMANCE 27. Only at the later period of the project after DBC was repaired, the Borrower made considerable efforts to implement the project with due diligence and efficiency. For most of the implementation stage, the project suffered severe shortage of funds and was not provided with adequate budget for efficient implementation. Audit reports were often late. The Borrower was tardy in appointing agricultural staff to the project. The Borrower's consultant seriously underestimated the cost of the main ICB civil works contract, resulting in a delay of about one year due to the need to re- tender. There are large variations between the quantities of works estimated and actual quantities (see Table 5). A detailed Project Completion Report7 and a draft POP were prepared. The POP was ilevised after the ICR mission, taking into account comments made by IDA's and FAO's ICR missions. The procedure for collecting water service charges has been reviewed and found acceptable. However, the current level of charges, which is inadequate to cover the cost of operation and maintenance of the system, has not been reviewed. DOI is now responsible for collection of water charges through the WUC. No water service charges have yet been collected. G. ASSESSMENT OF OUTCOME 28. Based on the assumptions described in Appendix B, the NPV of the irrigation component of the project when flows are discounted at 10 percent is positive. However, the assumptions are based on sustainable benefits following completion of tertiary canals (paras. 21 to 23). Because of the erratic supply system, there is hardly any evidence in the project to organize farmers to enlist their cooperation in the construction of tertiary canal systems. The project was reformulated without inclusion of the Stage III area and therefore the ERR of the original project could not be assessed. Thus only some of the original objectives were met within the reformulated project, and the works included were only partially completed. The uncertainty of tertiary canals being completed on time and the reliability of the supply of water from DBC in the future make the assessment of outcome to be rated "unsatisfactory". H. FUTURE OPERATION 29. NZIDP has prepared a POP8 which describes the present and proposed future organisation and management of the project with detailed job descriptions. The POP assumes that minor canals with command areas of less than 1,000 ha would be operated and managed by water users' associations, and that these works would be handed over byNZIDP to the associations by 1999/2000. The POP states that a field outlet would generally receive water one day per week when the secondary canal is running - generally one in two weeks during kharif and one in three weeks during rabi. The POP describes the proposed formation of WUGs. The POP needs to be supplemented further with details: (a) describing working procedures for assessment and collection of irrigation service charges; (b) on estimated Dated January 1995 containing 35 pages of text and many tables. No summary has been prepared. 8 Dated January 1995 and revised again in March 1995.  10 demand and timing of water from DBC and schedule canal closures; and (c) describing the monitoring of water levels and flows in the irrigation system. 30. Future performance of the project can be evaluated by monitoring: (a) area irrigated in each season by the project using the established irrigation boundary maps; (b) area and amount assessed for water service charges, (c) amount of water service charges paid; and (d) agricultural production. 31. For the lower three blocks (Blocks 13 to 15) that have been eliminated from the Narayani Irrigation System, the Government should promote the development of private shallow tubewells. The experience with private shallow tubewells in the neighboring Simra area is quite positive and can be replicated in the project. 32. Monitoring and Evaluation. Systems and computerized data bases have been established at the NZIDP offices for agricultural monitoring, covering both socio-economic and routine crop production surveys. Socio-economic surveys are required at intervals of three or more years and are best assigned to experienced consultants. Despite the absence of a responsible officer specifically appointed for the task, project staff have successfully undertaken regular crop cutting surveys but have difficulty in presenting the results in a coherent report. Assistance from an experienced consultant from time-to-time would overcome this difficulty. Constraints on the sustainability of the monitoring are budget commitment and computer literacy of project staff 33. Water management monitoring at present consists only of measuring the flow entering the NEC from DBC. This monitoring is now well established and there is no reason to think that it will not continue. More extensive water-management monitoring of flows in NEC and secondary canals is reconmmended both as a record of water delivered to water users and to assess whether improved operations could be evolved. Records should be kept of the supply to the main, secondary and other important canals, indicating whether full supply water level has been maintained and, where practicable, the flow entering the canal. Measurement of the flow in the NEC passing from the reformulated project area at Block 10 into Blocks 11 and 12, as well as the water supplied to the project area from the Tilawe weir and other cross-drains, would provide valuable information for the future development of the project. 34. The results of all monitoring should be reported to the General Manager for analysis and action. The General Manager should draw the attention of DOI, Department of Agriculture, and other agencies to areas where action is needed and act as a catalyst to ensure necessary action is taken.  11 I. KEY LESSONS LEARNED 35. The main lessons learned are: (a) a water right based on an international treaty may be an insufficient guarantee of reliable physical delivery. A critical evaluation of the situation should be done prior to project investment; (b) before embarking on a new stage of a project such as Narayani, the availability of water should be reassessed. Unreliable water supply for any reason destroys farmer confidence in the ability of the irrigation authorities and can lead to a lack of cooperation; (c) participation of beneficiaries in the design, construction and implementation, and O&M is very important in a large public irrigation system where available water resources have to be shared among many beneficiaries in an organized and timely manner. Training farmers to understand the design of the water system and its performance is necessary for large public irrigation systems where water has to be shared according to agreed time and quantity; (d) the design of a large public irrigation system must be flexible, simple and socially acceptable to small farmers and their communities. Social acceptability should be tested before committing heavy investment. Water User Groups can function effectively only when reliable irrigation supply can be assured; (e) service charges to cover full O&M costs of public utilities after improvement must be ir-iosed and should be considered a country-wide issue in any investment projea; (f) regular evaluation of project impact on beneficiaries is more likely to be successful where the work is carried out by independent consultants rather than by project staff, and (g) public and government awareness of proper utilization of natural resources must be developed through various means of investment lending.  12 PART II. STATISTICAL TABLES Table 1: Summary of Assessments A. Achievement of obiectives Substantial Partial Negligible Not Applicable Macro policies L L L L Sector policies 7 7E1 Financial objectives FE7 Institutional development El Physical objectives El F Poverty reduction El Gender issues K] K K E: Other social objectives | ] El K Environmental objectives ] El K] Public sector management ] ] K [ Private sector development ] El K] Other (natural resources manage) K]E K] K B. Project sustainability Likely Unlikely Uncertain The sustainability of the project is uncertain because of the unreliability of the main supply from Don Branch Canal, and the uncertainity of sufficient O&M support by the Government, and farmers' cooperation in completion of tertiary canals and in water managemnent.  13 Highli C. Bank performance satisfactory Satisfacton Deficient Identification L F2 E Preparation assistance [ ] E Appraisal E7 ] [ Supervision [I E The project identification, preparation, and appraisal are rated deficient due to inadequate evaluation on reliability of water supply for the project. The project was processed at the time of interruption of the water supply. Hfighly D. Borrower performance satisfactory Satisfactorv Deficient Preparation [1 ]i L[3 Implementation 7 1 F31 Covenant compliance lD I E 13 Operation (if applicable) E z E Main deficiency in the preparation was failure to assess the reliability of the main water supply. Water charges issue was addressed under the project because of the long disruption of water supply. Project implementation improved only after the restoration of water supply from DBC. Highty H E. Assessment of outcome satisfacton Satisfacton Unsatisfactorv unsatisfacton The original project scope was revised. Moreover, uncertainty of tertiary canals being completed timely by farmers and reliable supply of water from the parent supply canal, DBC of India, in future make the assessment of outcome to be rated "Unsatisfactory".  14 Table 2: Related Bank Loans/Credits Loan/credit title Purpose Yr. of Approv. Status Precediing operations 1. Birganj Irrigation Project Complete & upgrade 1973 Complete PPAR (Naravani Zone) irrigation & drainage for 1982 Cr. 373-NEP 28,700 ha 2. Narayani Zone Irrigation Develop 12,700 ha deferred 1978 Complete PCR, Development Stage II from Stage I May 91 Cr.856-NEP Following operations 1. Possible Irrigation Subsector Project To finance private farmer Under preparation managed irrigation schemes. for FY98 lending Table 3: Project Timetable Steps in project process Date planned Date actual! latest estimate Preparation June 1984 Appraisal November 1985 November-December 1985 Negotiations 17 March 1986 16-22 April 1986 Board presentation 20 May 1986 19 June 1986 Signing 14 November 1986 Effectiveness 20 March 1987 Mid-term review (if applicable) Reformulation Report June 1992 Project completion June 1994 Loan closing 30 June 1994 30 June 1995 Closing date was extended by one year to permit disbursement of retention money due to ICB contractor, 12 months after substantial completion of the contract. Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (US$ thousands) FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 Appraisal estimate 800 3,100 6,500 11,500 18,000 21,700 24,000 24,500 24,500 Actual 0 464 1,340 2,787 5,299 8,274 10,830 15,310 17,193" Actual as % of 0 15 21 24 29 38 45 62 70"/ estimate Date of final disbursement'' I/ Final cancellation of unused amount was made on February 1, 1996.  15 Table 5: Key Indicators for Project Implementation Description unit Estimated in SAR Actual Actual as %of SAR -1 NEC IMPROVEMENT 0 Ia) Canal lining km 3.6 b) Canal Slope Prot. & Shaping km_2_ _ _ c) Bank Strengtlhening km 7.0 9.8 13 d) Service Road krn 18.5 ll e) Additional Structures: (1) Check No. 167 (2) Cross drain No. 33 ll (3) Car bridge No. 7 I 1_4_ (4) Foot bridge No. 3 0 0_|| (5) Observ. bridge No. O I o| (6) Observ. wellst (7) Downstreamn protection No. 300 2 1 A-2 REHABILITATION OFl TILAWE BARRAGEl (a) Rehabilitation Works (I) Civil works _ No. 1 1 100 (2) Metal works No. II100l (b) D/S Protection Works No. 0 1 B. IRRIGATION AND DRAINAGE WORKS IN STAGE III AREA (a) MSC, BSC & SSC Construction . _l (I) Earthwork km 150.5 5 3 (2) Structures 0 X No. 513 0 0 (b) TC and OFD.l (I) Earthwork km 93 0 0 (2) Structures No. 1,125 0 0 (3) OFD ha 8,700 0 0 [c) Drainage System __. (I) Major ad minor drainage canal km 168.4 0 0 (2) Structures No. 467 0 0 [d) Canal Service Road km 61.4 0 0 (e) Drainage Service Road km 63.4 0 0 (f) Shallow Tubewells wells 40 0 0 C-1 UPGRADING OF STAGE I AREA (a) MSC, BSC & SSC Upgrading . (1) Earthwork km 28 226 807 (2) Canal lining km 0 0.75 (3) Structures -New No. 190 370 195 - Remodel No. 0 854 (b) TC and OFD (1) Now TC construction km (385.8) 181.6 47 (2) Structures: -New No. (4209) 696 17 - Remodel No. (1547) 188 12 c) Canal Service Road km 72 0 0  16 | Description Unit Estimated in SAR Actual Actual as %ofSAR |C-2 UPGRADING OF STAGE II |AREA (a) MSC, BSC & SSC Upgrading (1) Earthwork km 15.6 143 917 (2) Structures: _________ - New No. 26 203 781 - Remodel No. (491) 497 101 (b) TC and OFD (I) New TC construction krn (292.2) 30.1 _ _ (2) Structures: - New No. (3058) 4 0.1 | - Remnodel No. 770 101 t(c) Drange Syster (1) Major & niinor drainage canal km 80.8 0 0 (2) Structures No. 104 0 0 d) Canal Service Road km 72 0 0 p-1 Flood Protection Works a) Lal Bakeya River - Right Bank km 4 0 0 - Left Bank km 8 8.8 110 (b) Bagmati River (1) Flood dyke km 7 4.3 61 (2) Guide Bund kmn (0.3) 0.3 100 (3) Spur No. 6 D.2 River Training (a) Tilawe km 3 1.3 43 (b) Bangari km 2 0 0 (c) Pasaha km 2.5 0.3 12 (d) Ganjol km 0 5.5 c E. Upgrade Roads (a) Upgrade village link roads km 91 0 0 (b) Gravel MSC2 BSC roads km 152 18.55 12 Source: PCR, July 1994. Note: Figures in the brackets stand for quantities as per final design  17 Table 6: Key Indicators for Project Operation I. Key operating indicators in SAR Estimated in SAR ICR Estimate at Full Development 1. Area irrigated 37,400 ha 24,500 ha1' 2. Increased food grain production 68,490 t/yr (65,178) {65,825} ) 36,389 t/yr 3. Increased oilseed 6,760 t/yr (5,825) {6,757}) 2,296 t Increased sugarcane 16,815 t/yr 24,365 t 5. Directly benefitting farm families 31,500 23,900 (at 1:2 ha/farm) 6. Generated farm employment 9,300 man-years/year 4' 6,300 person-years/yr (at 250 days/yr) 7. Value added to local economy NRs206 million/vear NRs252 million/yr [II. Additional indicators for future Revised targets operation (if applicable) 1 Area assessed for water service 24,500 ha charges 2. Amount of water service charges Full cost of O&M assessed 3. Amount of water service charges 100% collected I' Estimated benefits are based on 24,500 ha, some irrigation water may be supplied to an additional 4,200 ha. 2' According to SAR, para 8.01. Annex 1, Table 2 figures in (brackets). Annex 1, Table 11 in {brackets}. 2' 38,685 t/yr including pulses. -' SAR, para 8.02 says 10,700 man-years/year. Table 7: Studies Included in Project Purpose as defined Study at appraisal Status Impact of study 1. Baseline agro-economic To provide benchmark Data collected but no analysis Nil survey against which development can be measured 2. O&M Study To establish physical Report on water management 3/93 O&M plan will and budgetary O&M plan 10/94 provide basis of requirements future O&M 3. Cost recovery study for all To improve cost Study financed by ADB completed. No action. major projects recovery. Remote sensing study 3/93 for No direct impact. 4. Planning & design of Narayani suitable irrigation projects in Terai  18 Table 8A: Proiect Costs Appraisal estimate Actual/latest estimate (USSM) (USSM) Item Local Foreign Total Local Foreign Total costs costs costs costs 1. NECumprovementandrepairs 1.2 1.0 2.2 0.9 3.2 4.1 to the Tilawe Barrage 2. Irrigation and drainage (Stage 1.5 3.0 4.5 0.2 0.2 0.4 Ill Area) 3. Irrigationanddrainage(StageI 1.2 2.2 3.4 0.8 4.6 5.4 and II Areas) 4. Floodcontrolandrivertraining 0.5 1.1 1.6 1.4 4.6 6.0 5. Upgrading ofroadnetwork 0.5 1.1 1.6 0.1 0.4 0.5 6. Equipmentandradio- 0.1 1.3 1.4 0.1 0.6 0.7 communication system 7. Regional workshop 0.1 0.9 1.0 0.2 0 0.2 8. Technical support 1.6 2.5 4.1 1.1 3.4 4.5 9. Establishmernt and O&M 3.6 1.8 5.4 3.4 3.4 10. Land acquisition and crop 0.6 - 0.6 0.3 0.3 compalstion Total Baline Costs 10.9 14.9 25.8 8.5 17.0 25.5 Physical Contingencies 1.1 1.8 2.9 Price Contingencies 3.0 3.8 6.8 Total Project Coats 15.0 20.5 35.5 8.5 17.0 255 Table 8B: Project Financing Appraisai tsdrmate Actual/latest estimate (US$Nf) (US$M) Local Foreign Total Local Foreign Total costs costs costs costs Source IDA 9.9 14.6 24.5 3.5 13.6 17.1 Cofmiancing institution 1.6 5.92' 7.5 2.9 3.4 6.3 Domestic contribution 3.5 0 3.5 2.1 0 2.1 TOTAL 15.0 20.5 35.5 8.5 17.0 25.51' " Foreign component of Technical Support, Establishment and O&M from SAR, para 4.01, +37.6% for contingencies.  19 Table 9: Economic Costs and Benefits Appraisal Estimate ICR Estimate Net Present Value at 10% Stages I & H (MNRs) 450 599 Net Present Value at I0% Whole Project (MNRs) 610 Economic RateofRetumnStages I&I (%) 22 19 Economic Rate of Retum Whole Project (%) 21 18 Underlying Assumptions: - Project Life 25 years 25 years - Standard Conversion Factor 0.90 0.90 - Unskdlled Labour Value at 0.90 0.7 x 0.9 - Financial Wage Rate (NRs/day) 867 40 Table 10: Status of Legal Covenants NEPAL Narayani M Irrigation Project Origsal Revised fulfillment Covennt type Present fulfillment date Descnption of A ,-n-t Section status date covenant Comments DCA 3.01 (a) Project implementation CP Due diligence Budget sometimes aeznents and efficiency. insuificient. 3.03 Procurument C Procurement to Complied be as Schedule 3. 3.04 Eviromentl C Take meuures Complied. to minimize malrna4 etc. 4.01 Accounts/audits CD 9 months 12 months Fumish audit repats. Sometimes late. after FY after FY Deadline postponed 1993. 4.02 (a) Studies/technical CD 31 Dec86 22Mar88 Study O&M needs. Complied lte. Revised aince 1993. (b) Studies/technical CD 30 June 87 Furnish study Cornplied late. Revised assistance to IDA and implement 1993. 4.03 Financial C 31MarS7etxeq Fumish Complied atimates for next fiscal yew. 4.04 (a) Coat recovezy/ C 31 Dec86 15May87 Set water chage Cornplied. priciug at NRs 200/ha (b) Coet ecovey/ C 16 July 87 15 May 87 Assign Revenue Dept Complied but 1989 Law pricing with collection. easigned collection to DOI.  20 Original Revised fulfillment Covenant type Present fulfillment date Description of Agement Section status date covenant Comments (c) Cost recovery/ CP 31 Aug 88 and Review charges. Procedure reviewed but pricisg eveTy 2 yrs not level of charges. NC FY 93 Charges to cover full Rates fixed are less than cost of O&M. O&M cost. No charges yet collected. 405 Studies/technical CD 1 April 89 Study of cost recovery Study by ADB-assisted assistance for all major irrigation. TA. Schedule 3 Studies/technical C Employ consultants. Complied. assistance Schedule 4 (a) Insttutional CD I July 87 May 88 Issue permits for radio Complied late. system (b) Project implementation C GM satisfactory to IDA. Complied. arrangements (c) Project implementation CD 31 Dec 87 and Revise GMs limit of General order issued arrangements every 2 yrs contractual commitment. 1993. (d) Project implementaton CD I Jan 87 et seq Fumish training Complied, sometimes arrangements programme. late. C I April 87 et seq Implement training Some training dore. programme. (e) Monitoring/ 'D 30 June 87 and Conduct agro-economic Survey completed but reviews every 2 yrs survey. results not processed. Schedule 4 (f) Project implementation CD 30 June 87 Appoint AADO & SMS Complied but late. arrangements to each district. l (g) Institutional NC 30 June 87 Maintain farm research Cancelled because programme. similar exists at Parwanipur (h) Project implementation CP 31Dec86 Establish WtUGs. But suspended in 1988. arrangements (i) Institutional CD 30 Sep 87 April 89 Constitute WUGs as Late. statutory bodies. (j) Facilities maintenance C I July 91 Jan 89 Fumish proposal for Complied. organization for O&M. (k) Monitoring/ C' Fumish semi-annual Complied. reviews reports. (I) Project implementation C 31 Jan 87 Implement water Complied. arrangements management plan. Table 11: Compliance with Operational Manual Statements Statement number and title Describe and comment on lack of compliance :OP 4.07 Water Resources Management No comprehensive framework for water resources developmerat. Pricing policy does not achieve cost recovery. BP 13.55 POP was not able to provide to ICR mission aide-memoire due to some revision  21 Table 12: Bank Resources: Staff Inputs Planned Revised Actual Stage of project cycle Weeks US$ Weeks US$ Weeks US$ Preparation to n.k. n.k. 105.9 n.a. appraisal Appraisal n.k. n.k. 10.9 n.a. egotiations through n.k. n.k. ) oard approval ) )95.3 n.a. ) Supervision n.k. n.k. Completion n.k. n.k. 5.0 n.a. TOTAL I . I I I I I / According to World Bank records on 4 January 1995. n.k. = not known; n.a. = not available. Table 13: Bank Resources: Missions Performance rating Number Specialized 1/ lmplemen- Develop- Stage of Month/ of Days in staff skills tation ment Types of project cycle year persons field represented status objectives problenm2/ Through appraisal _ _ Appraisal through Board approval Supervision 1. Sep 86 1 23 3/ I nr nr nr 2. Nov S6 P T nr P 3. Feb S7 4/ 4. May 87 2 3 A, W 2 2 M 5. Oct 87 2 3 A, 2 2 M 6. May 88 1 4 E 2 2 F, M 7. Nov 88 1 4 E 2 2 F 8. April 89 2 4 A, I 2 2 F 9. Nov-Dec 89 3 7 1, C, A 2 3 F July 90 I E 3 3 F 10. Nov 90 1 8 1 3 3 F, P, T  22 11. Mar91 2 13 1 3 3 F, P, T 12. Sep 91 2 7 1 3 3 F,P,T 13. April 92 1 5 I 3 3 F, P, T 14. June 92 1 I nr nr nr 15. Nov 92 1 I 3 3 F, C, P, T 16. April 93 4 5 1, A, P 3 3 F, C, P, T 17. Oct 93 4 1, A, P, F 3 3 F, P 18. Mar94 5 I,A,P,F 3 3 F,P 19. April 95 4/ 2 2 I Conipletion Feb 95 2 12 I,E 1/ I = Irrigadion Engineer, P = Procurement; A = Agriculturalist; E = Economist; C = Construction; F = Farmers Organization; P = Associate Programme Officer; W = Water Management Expert. 2/ P = Procuremet; F = Available Funds; M = Project Management; C = Compliance with Legal Covenants; T = Traininig. 3/ Includes other projects. 41 No report on file for this mission. r = not reported.  23 Nepal Narayani III Irrigation Project (Credit-1715-NEP) Implementation Completion Report Mission April 1995 Aide Memoire Introduction 1. An IDA mission comprising Messrs: 0. Myint (SA2AW) and C.P. Rauniyar (SA2NE), supervised the Narayani III Irrigation Project (NIP) on April 25-26 as a follow-up mission to the FAO/WB CP Implementation Completion Reporting (ICR) mission, who visited Nepal from February 19 to March 3, 1995. 2. This aide memoire is based on the detailed findings of the FAO/WB-CP mission which was available to the mission in the form of draft aide memoire of March 2, 1995, and further discussions with Government, IDA staff, staff of the Narayani Zone Irrigation Development Project (NZIDP) . The Project Completion Report dated July 1994 prepared by the Project Consultant, Nippon Koei, and NZIDP, the Project Operation Plan (POP) dated December 1994 and the ICR dated January 1995 prepared by NZIDP have been major sources of information used in this follow-up. The mission endorsed the findings and recommendations of the FAO/WB-CP ICR mission of February-March 1995. The aide memoire of the FAO/WB CP mission is attached herewith for easy reference. 3. The draft aide memoire of the present mission was distributed to the Ministry of Finance (MOF), Ministry of Water Resources (MOWR), Department of Irrigation (DOI), and the concerned project manager, and discussed at a wrap-up meeting at Department of Irrigation (DOI) on April 28, 1995. Amendments agreed at the meeting have been duly incorporated. The findings of the mission is subject to the approval of the Bank management. The mission wishes to thank the Director-General of the Department of Irrigation (DOI), and the General Manager (GM) of NZIDP for their cooperation, assistance and hospitality. The Project 4. The appraised project was the third phase of command area development (CAD) NZIP system designed to enable Nepal to use 24.1 cubic metres per second (cumecs) of Gandak river water, in accordance with its agreement with India. It was to be implemented over a seven year period, incorporating the following main components, the details of which are mentioned in the aide-memoire of FAO/WB CP mission : a) Improvements to Nepal Eastern Canal (NEC) and repairs to the Tilawe weir. b) Stage III area CAD (8,700 ha). c) Stage I and II areas (28,700 ha). d) Flood protection and river training works. e) Improvements to village and service roads. f) Vehicles and equipment for operation and maintenance (O&M) of the completed system. g) Construction and equipping of a regional workshop. h) Technical support including consultancies for (i) design and supervision of construction, (ii) project monitoring and evaluation and (iii) studies.  24 i) Support of project establishment and O&M costs. 5. The total project cost of US$35.5 million was to be financed with the help of an IDA credit of SDR21.6 million (US$24.5 million) and a grant from the Swiss Development Co-operation of 15 million Swiss francs (US$7.5 million). The project was to increase the irrigated area from about 22,900 ha to 37,400 ha. Incremental agricultural production was estimated to be 30,900t of paddy, 34,900t of wheat, 6,700t of oilseeds, 4,000t of vegetables and sugarcane which would produce 1500t of sugar. The economic rate of return was estimated at 21%. Misuion's Findingu 6. Project Iriplementation. The implementation of the project was started in April 1989 with some delays due to : a) Floods in 1986 and 1987, which caused heavy damage to both the Nepal Eastern Canal (NEC) and the Don Branch Canal (DBC) in India, which supplies water to the NEC from Gandak Barrage. Repair of NEC was completed by early 1989 but repair of the DBC was completed only in June 1991. b) Slow procurement for the main ICB contract caused by underestimation of the contract cost by consultants acting for NZIDP. c) Inadequate budget provisions by HMGN throughout the project period. d) A severe shortage of Diesel fuel during the trade and transit disagreement between India and Nepal. In order to reduce the cost of the project the ICB contract was retendered with reduced quantities of road metalling and drainage. 7. Refonmulation. The project water supply was disrupted after 1986 flood in DBC and it was restored only in June 1991. The project was continued without water supply for about five years. After restoration of the water supply, the repaired DBC supplied reduced and erractic amount which is far less the Indo- Nepal agreed amount of 24.1 cumec (the designed capacity of the NZIP system). This caused the scope of the project to be questioned (and eventually to be reformulated), which caused uncertainty and delay. Narayani Zone Irrigation Development Board (NZIDB), with the recommendation of IDA, reformulated the project scope in April 1993 as follows: a) The CAD to be fully developed down to tertiary irrigation unit (TIU) level would be reduced to 24,500 ha (Blocks 1 to 10); b) The rehabilitation works already started for main and secondary canals in Blocks 11 and 12 would be completed. c) Stage III irrigation development would be omitted but increased river training and flood protection works on the Lal Bakeya and Bagmati rivers would be completed. d) River training and flood protection works on rivers crossing the NEC, the extent of which had already been increased to safeguard the NEC from further flood damage, would be completed. e) All further construction of tertiary canals would be by farmers in accordance with HMGN's new Irrigation Policy, 1992. f) Shallow tubewells were earlier omitted from the project on the grounds that they could be installed without the assistance of HMGN. 8. Completion. The project as reformulated has generally been satisfactorily constructed down to the turnouts to tertiary systems. The ICB contractor generally performed satisfactorily and most of the problems experienced with local contractors in Stages I and II were not repeated. The regional workshop has  25 been built and partly equipped. The main changes were in the amounts spent on flood control and river training (increased by about US$5 million) and on the Stage III irrigation works (decreased by about US$4 million) . The total cost of the project at the time of the Credit closure is estimated to be about US$26.1 million (NRs 752.7 million) . This is about 74% of the SAR estimate in US$ but, due to alterations in the rate of exchange between the Nepalese rupee and the US dollar, the expenditure for the project in real term is about NRs 952 million or 131% of the SAR estimate in Nepalese rupees. To date, approximately US$17.13 million of the IDA credit and approximately SwF9.4 million (US$6.7 million approximately) have been disbursed. SDR7.3 million and SwF5 million were cancelled from the credit and grant in June 1994. That is about 87% of the IDA revised credit and 94% of the Swiss Grant had been disbursed. The Credit is opened up to end June 1995 only for the disbursement of ICB-contract's retention money, the payment of which will be due by end May 1995. The retention money amount is about SDR 0.103 million. Accounting that amount which will be disbursed by middle of June 1995, the total disbursement from IDA Credit will be about SDR 12.564 million. About SDR 1.736 (12% of the revised credit) will remain unused and has to be canceled. Vehicles and equipment for O&M have been provided. The main construction works outstanding are tertiary canals and field channels to be built by farmers and drainage works not detailed in SAR. Benefits 9. Project benefits derive from the provision of supplementary irrigation during the kharif season and irrigation during the rabi season. 'However, due to the absence of water supply for five out of seven project years, there was no proper record on the yearly irrigated area by the system. Only the indicative crop areas are available for the estimate of benefits. 10. However, the incremental benefits of the project will clearly depend on reliability of water supply from NEC and the speed with which the reformulated project area can be effectively irrigated. This requires development of tertiary canals or other means of ensuring that the full command area is brought under irrigation. Due to the somewhat higher without-project situation and the slower build-up of benefits relative to costs it can be expected that the ERR will be below the 21% calculated for the Stage I and II areas at appraisal. Benefits could also be claimed for the flood protection and river training works as well as for the improvement of roads. Performance of the Borrower 11. The Borrower made considerable efforts to implement the project with due diligence and efficiency but for most of the implementation stage the project suffered severe shortage of funds and was not provided with adequate budget for efficient implementation. Audit reports were often late. The Borrower was very tardy in appointing agricultural staff to the project. The Borrower's consultant seriously underestimated the cost of the main ICB civil work contract, which caused delay due to the need to retender. A detailed PCR, an ICR and a revised POP were prepared. The mission endorsed the comments of the FAO/WB-CP mission on the POP, which needs further elaboration on the following points which are to be approved by DOI and the Ministry of Water Resources. The mission provisionally accepted the submitted POP contigent upon availability of the following details by end June 1995. An explanation was given to GM for the analysis.  26 (a) Detailed procedures for assessment and collection of water charges from the rescoped project areas (Block 1 to 10), which are receiving water from DBC. (b) Based on the past performance of DBC, estimate the timing of water supply from DBC and find out the extent of area that can be irrigated with different reliabilities (70% to 90%) in Kharif and in Rabi seasons. (c) Procedure for monitoring of the full supply level in the irrigation system at different canal levels during O&M. Performance of IDA 12. At and before appraisal IDA took account of strength of the Indo-Nepal treaty without considering the fact that the historical supply from the DBC was always substantially less than the treaty amount since inception of NZIP. IDA also failed to consider seriously about the continuation of the project after DBC's stoppage of water supply for five continuous years during implementation. However, after the restoration of DBC supply in June 1991, IDA provided frequent good and helpful supervisions and adopted a flexible approach to the implementation of the project. Project Sustainability 13. Water availability. The mission has the same view as FAO/WB CP mission that, in view of the major siltation problems at the Gandak Barrage and DBC as well, the vulnerability of DBC to floods in its cross drainage, sustainable water supply even in the reduced amount in long run is very uncertain. This was recognised when the project was reformulated and the area to receive reliable irrigation reduced to 24,500 ha. There is nevertheless a risk that reliable water would not be provided even for this reduced area. The mission suggests that taking account of the presently proposed cropping pattern, the General Manager should prepare revised estimates of crop water requirements and the dates and quantities of water required from the DBC. Based on this formation regular discussions with India should be held to find a way to avoid further reduction of DBC supply and of channelling funds from Government of India to be used specifically for maintenance and repair of DBC. 14. Budget for OWM. The Project Operation Plan (POP) of February 1995 assumes an annual repair and maintenance budget requirement of NRs54.5 million in 1994/5 (NRs2200/ha for 24500 ha including costs of tertiary structures and secondary canal gravelling) reducing steadily to NRs 18.7 million (NRs 760/ha) in 1999/2000 by when it is assumed that all canals serving areas less than 1000 ha would have been handed over to water users committees, who would pay for O&M of these smaller canals. However the alloted budget for O&M in 1994/5 is only NRs22.2 million, with no budget for tertiary canal structures, NEC repairs and road maintenance. With this kind of budget reduction, optimum performance of the rescoped project becomes doubtful. The mission suggests that the following year budget should reflect to the requirement mentioned in the agreed POP. However, there is a risk that the amounts allocated may be insufficient. 15. Formation of Water Users Groups and Turnover program. Up to March 1995 in blocks 1 to 5 (14,644 ha) 524 out of 552 Water Users Groups (WUG) have been  27 formed and 176 have been maintaining tertiary canals. Out of that, Blocks 1 and 3 WUCCs have been registered, and the Blocks 2 and 5 are being planned to register soon. General Manager assured to the mission that arrangement are being made to turnover (TO) Block 1 and Block 3 to the respective WUCCs in this fiscal year. The water charges collection can be realized only after the TO. The mission shares the views of FAO/CP mission on the requirements mentioned in their aide memoire for the future success of the project. However, the mission has a view that the main thrust of sustainability of the WUGs formed under the project depends upon how reliably system can supply irrigation water to the users. 16. Tertiary Irrigation Units. Unless a close supervision and organization activities are pursued it is very unlikely to complete the remaining 466 km of tertiary canals which are to be constructed by beneficiary farmers as per HMGN's irrigation policy. There is no proven success of this kind of attempt so far in the country. Consequently progress has become very slow and achieving the full benefits from the tertiary development is likely to be delayed. 17. Water Management. The project is now designed on the rotational principle that NEC would be running continuously during the irrigation seasons, supplying water to a cluster of secondary canals at a time. Secondary canals on turn serving less than about 1000 ha would run either at full capacity (on) or be closed (off). When they are running at full capacity, water would automatically be distributed into the non-gated tertiary irrigation units (TIU) proportionately to the area served. Water delivered to a TIU (which serves about 28-30 ha) would be distributed in rotation to field outlets serving about 4 ha each. The design requires that, when secondary and tertiary canals are running, they run at full supply discharge and levels. It is sensitive to the fluctuation of water levels supplied in canals. For water users to be able to see that the full supply is being delivered, the mission recommends that, if the system is to operate satisfactorily as designed, FSL should be marked on each dividing structure. However under the erractic water supply pattern of DBC, the water level in secondary canals on turn would be difficult to maintain at constant full supply level unless a careful and perpetual attention are given to the operation. The mission fully agrees with the FAO/CP mission's findings that the suc:ess of the rotational water supply depends upon Ci) the reliability of the water supply, (ii) applying generally simple operating rules, (iii) maintenance of canal system infrastructure and (iv) water users understanding the importance of maintaining essential features of the system. Three important elements need further strengthening: (a) the development and application of operating rules which cope with the erratic water supply from DBC; (b) maintenance of the main and secondary canals and structures; and (c) training water users in the operation and maintenance of the system. The mission has found success of similar rotational water supply system in other projects (Sunsari Morang, Mahakali). 18. Monitoring and Evaluation. The missions recommends the project management that the systems and computerised data bases established at the NZIDP for agricultural monitoring, covering both socio-economic and routine crop production surveys be maintained and keep functional. Water measuring and monitoring is now well established and there is no reason to think that it will not continue. More extensive water management monitoring of flows in NEC and secondary canals is recommended both as a record of water delivered to water users and to assess' whether improved operations could be evolved. Records should be kept of the supply to main secondary and other important canals, with a record of whether FSL  28 has been maintained and, where practicable, the flow entering the canal. Measurement of the flow passing from the reformulated project area at Blocks 1 to 10 as well as the water supplied to the project area from the Tilawe weir and other cross-drains would provide valuable information for the future development of the project. The analysis on the measured data should be regularly done and the results be properly compiled and reported to GM. Issues at OEM Stage 19. Next Steps. It is very important to pay proper attention to (a) the continued development of water users' associations which can undertake the construction of tertiary canals and field channels and the operation and maintenance of the parts of the system which have been taken over by them; (b) the establishment of the DOI organisation for the O&M of part of the system that has not been handed over to water users' associations; and (c) the provision of adequate annual budget for full O&M of the part of the system for which DOI is responsible. No decision has yet been made on the future organization for O&M of the system although the staff requirements are mentioned in the POP. The mission urges that HMGN ensure to achieve the above points. 20. Staff for OUM of Narayani Project. Now that the construction of major works by DOI is substantially complete, DOI has appointed a task force to consider the future staffing and how best to keep the staff necessary for O&M and withdraw the surplus staff. It is likely that the Narayani Zone Irrigation Development Board (NZIDB), which employs many of the present staff, will after two or three years, be replaced with a board containing representatives of the WUCCs. As many as 260 staff out of the currently employed 372 staff will be required for the continued O&M of the project. A decision will be made in this fiscal year. 21. Irrigation Service Charges. The level of charges for surface water in the Narayani project area has been set at NRs200/ha/year. No charges have been demanded or paid since the supply was disrupted in 1986. The POP needs to provide clear description of the procedure for assessment and collection (see para 11). The mission endorses the FAO/CP recommendations that (i) for each season a record is kept of the areas irrigated of all users or groups to whom water is supplied using the irrigation boundary maps now established in the system, (ii) an assessment is issued before the end of the main irrigation season to each user or group, (iii) the charge is collected preferably through WUGs and (iv) sanctions for non-payment are instigated and enforced. The POP should be revised to take account of this. The level of charges proposed, NRs200/ha/year, is insufficient to cover the estimated cost of O&M of the system and should be revised so that it covers at least the whole cost of O&M. Lessons Learned 22. A water right based on an international treaty may be insufficient guarantee of reliable physical delivery. 23. Participation of beneficiary farmers in any development works from the beginning is very important, especially in large public irrigation system, where the available water resources has to be shared among many beneficiaries.  29 24. Unreliable water supply for any reason destroys farmer confidence in the ability of the irrigation authorities and can lead to a lack of cooperation. 25. The design adopted for a large public irrigation system must be simple and socially acceptable for small farmer community. Social acceptability should be tested before comrmitting heavy investment. 26. Regular evaluation of project impact on beneficiaries is more likely to be successful where the work is carried out through a contract with an outside agency rather than remaining the responsibility of project staff who have other conflicting duties. Suimy of Reconmmndations 27. The following reconmendations of the ICR/Supervision mission have been agreed by HMGN, DOI, and the project management: (a) that the project management will submit IDA by June 1995 : (i) detailed procedures for assessment and collection of water charges from the rescoped project areas (Block 1 to 10), which are receiving water from DBC, (ii) based on the past performance of DBC, estimate the timing of water supply from DBC and find out the extent of area that can be irrigated with different reliabilities (70% to 90%) in Kharif and in Rabi seasons, and (iii) procedure for monitoring of the full supply level in the irrigation system at different canal levels during O&M (para 11); (b) that based on the water requirement data and supply of DBC information regular discussions with India be held to find a way to avoid further reduction of DBC supply and of channelling funds from Government of India to be used specifically for maintenance and repair of DBC (para 13); (c) that the following year budget should reflect to the requirement mentioned in the agreed POP (para 14); (d) that, if the system is to operate satisfactorily as designed, FSL should be marked on each dividing structure (para 16); (e) that the systems and computerised data bases established at the NZIDP for agricultural monitoring, covering both socio-economic and routine crop production surveys be maintained and keep functional (para 18); (f) that (i) for each season a record is kept of the areas irrigated of all users or groups to whom water is supplied using the irrigation boundary maps now established in the system, (ii) an assessment is *issued before the end of the main irrigation season to each user or group, (iii) the charge is collected preferably through WUGs and (iv) sanctions for non-payment are instigated and enforced (para2l).  30 NMAY.I III IRRIGATION PRWECr (Cr. 1715-NEP) SUPERVISION/ICR MISSION - APRIL 1995 CONPLIaCE WITH PREVIOUS MISSION S RECCSIDATIONS Mimsion's Recommendation | Compliance with recommendation | Com t th empining.items unde IC: condrat (gate The aontrct period was. xtende 1994 to Mg fenin,e ean r?isinp, etc. 6Y tne erl o the The h ema1ning 1 u works and 993 con ajtp peri3d end eer y 19: iT not tlood damage repairs. co e , agree to exten e contractual period as rea3 lrel Priori tize and complete the repair wobks for 1993 The.flood repair works were.comgleted and an flood damages by.revising the Annual Veve oppent additional budget was sanctionea. bryogram ano acuiring the require additionae gudget Detore June lY ovid the, required logi stis in training of WUGs of Budget reqyirement.in FY 1994/95 for WUG formation was ock and ck I(e.g. white boar f ip ch art and provi ed. he requirements or the fo Iow1ag years are our ilcyc es or O0s and Supervisors) by hot later requested in the project operation p an rur) in rst wee of March I994, and agreed to request ananual udget repu rement Tor continuing WU s a14 .UCs torma ion after the credit closing In June solid atn th alrtdy formef WUGs and WUfs of Block The project tried,to cons?lidgte the forine WUG byut y steyaping owp ne p aceo moramtiQn T new not su cessf y u7plem n e ue t erfac ic supp y of gro ta by deg oying the AP in rther water Mrom tne source- on granch anal. rai ing O armer, leaders and in re abili ation ano constrVcti of llJs betore the onset of monsoon ror rmation of WUGs n the remaining blocks incuding t IC?1, balance the availabe s between these P fenarearevised iplrementatGon lrogram and training The proRram 1 submitted and reviewed and remarked by plah for conso idatinT the SW a ready forme an in ay 1 en d comD ete with a detailed syllabus. program for indoor and on-the-jo4 training, program for study tours ased on the experience gained to date in farmer organi ation. nd time rSuireo fo the ohased Droqram. to sumit for I review ADri 1. 1994 UpkeeR the orinci ole of electing WUG member by Tass Followed the suggestions. meeti aas of concerned U athou he nLh er ob com,itte may vary accordIng to the armer prceived neers1tw1ethmHne pregenCeVQT,resou ce ersons tor ex ension suppo ty in it tion Dasis Retain the Orgnizait Supervisors and the AOs who TYo groups of AOs led by one supervisor are retained are exerience wi te ohP-oinR organization tit now. actiySt'les of e projec throu? out.its. le up till COStmtDi$cn