Algeria - West Mitidja Irrigation Project

Document of The World Bank FOR OFFICLAL USE ONLY Report No. 17215 IMPLEMENTATION COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WEST MITIDJA IRRIGATION PROJECT (Loan 3076-AL) December 2, 1997 Rural Development, Water and Enviromnent Department Middle East and North Africa Region 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 = Algerian Dinar (DA) Official Exchange Rate (DA per US$) Year Annual Average 1988 5.91 1989 7.61 1990 8-96 1991 18.47 1992 21.84 1993 23,24 1994 36.00 1995 54.60 1996 56.00 WEIGHTS AND MEASURES Metric System FISCAL YEAR OF BORROWER January 1 - December 31 ABBREVIATIONS AND ACRONYMS AG1I) National Agency for Irrigation and Drainage Ifrastructrure (Agence Nationale de Reahisation et de Gestion des Infrastructures Hydrauliques pour l'Irrigation et le Drainage) ANRH National Agency for Water Resources (Agence Nationale des Ressources Hydrauliques) BAD Algerian Development Algerian (Banque Algerienne de Developpement) BADR Agriculture and Agricultural Development Bank (Banque pour lAgriculture et le DeveloppementAgricole) DAS Socialist State Farm (Domaine Agricole Socialiste) EAC Collective Agricultural Farm (Exploitation Agricole Collective) EAI Individual Farms (Exploitation Agricole Individuelle) ENHYD National Enterprise for Hydraulic Studies (Entreprise Nationale des Etudes Hydrauliques) EPIC Public Agency with Industrial and Commercial Activity (Entreprise Publique a Caractere Industriel ou Commercial) Vice President: Kemal Dersi. Acting Direcor, MNSRE: Salah Darghouth Country Director: Chrisian Delvoie Task Team Leader: Van Tuu Nguyen  FOR OFFICIAL USE ONLY INPV National Institute for Plant Protection (Institut National de la Protection des Vgetaux) LSI Large Scale Irrigation (Grand Perimetre Irrigue) OPI Regional Irrigation Agency (Office de Perimetre Irrigue) OPIC Regional Irrigation histitute of Cheliff (Office des Perimetres lrrigues de la Yallee du Chelyff) OPIM Regional Irrigation Institute of Mitidja (Office des Perimntres Irngues de la Mitidja) PASA Agricultural Sector Adjustment Loan (Projet d'Ajustement Structurel Agricole) PNE Water Resources National Plan (Plan National de l'Eau) SAR Staff Appraisal Report (Rapport d 'Evaluation) SMI SmalUMediun Scale Irrigation (also SSI, for Small Scale) (Petite etMoyenne Hydraulique) IThis 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.   Table of Contents Pa2e Preface .................................. Evaluation Summary ................................ ii PART I: Project Implementation Assessment .................................1 A. Statement/Evaluation of Objectives . B. Achievements of Project Objectives .2 C. Major Factors affecting the Project .5 D. Project Sustainability .6 E. Bank Performance .7 F. Borrower Performance .8 G. Assessment of Outcome .11 H. Future Operation .11 I. Key Lessons Learned .11 PART II: Statistical Annexes Table 1 Summary of Assessments ............................. 13 Table 2 Related Bank Loans/Credits .............................. 15 Table 3 Project Timetable ...............................; 16 Table 4A Annual Loan Disbursement ............ ................. 17 Table 4B Cumulative Loans Disbursement ............ .................. 17 Table 5 Key Performance Indicators for Project Implementation ........................................... 18 Table 6 Key Indicators for Project Operation (not applicable) .............................................. 20 Table 7 Studies Included in Project .............................................. 20 Table 8A Project Costs ............................................... 21 Table 8B Project Financing ............................................... 22 Table 9 Economic Costs and Benefits ............................................... 22 Table 10 Status of Legal Covenants (not applicabe) ............................................... 23 Table 11 Compliance with Operation Manual Statements .............................................. 25 Table 12 Bank Resources: Staff Inputs .............................................. 25 Table 13 Bank Resources: Mission .............................................. 26 APPENDICES: A. Missing Information .27   IMPLEMENTATION COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WEST MITIDJA IRRIGATION PROJECT (Loan 3076-AL) Preface This is the Implementation Completion Report (ICR) for the West Mitidja Irrigation Project in Algeria, for which Loan 3076-AL in the amount of US$ 110.0 million was approved in April 1990 and made effective in June 1990. The loan was closed on June 30, 1997 instead of June 30, 1996, the original closing date after being twice extended by six months. In March 1995, US$ 40 million had been cancelled; in April 1996, a second cancellation of US$ 26.725 million took place. The final amount of the loan was US$ 43.275 million out of which a total of US$42.042 million was disbursed. At closing, a balance of US$1.233 million has been cancelled. The present ICR draft was prepared by an FAO/CP mission", on the basis of information collected in Washington and discussions with the WB Task Manager. Owing to civil unrest in Algeria, no field visit was organized for the preparation of the ICR. The last supervision mission was carried out in September 1993. Because of security conditions, no visit to Algeria was possible to supervise the project after this mission. The ICR is based on: (a) a review of the Staff Appraisal Report (SAR) and legal documents, the six WB Supervision Reports, and the project files of ECA/MNA Information Service Centre; and (b) discussions with the Bank Task Manager. Additional information to complete the ICR requested from AGID, has not been received. Mr. J. Chabloz (Irrigation Engineer) I i ~~~~~~~~~~~~~~~~~~~~i  .  IMPLEMENTATION COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WEST MITIDJA IRRIGATION PROJECT (Loan 3076-AL) Evaluation Summary Introduction Bank Group lending for agriculture in Algeria started in 1974, but in 15 years, only six projects had been approved prior to the Mitidja Irrigation Project, and four between were approved 1990 and 1994. Performance under the first three projects was unsatisfactory, reflecting the country's serious institutional constraints. The Rural Development Project (Loan 1159-AL) was completed on June 30, 1983 after considerable delays, mainly due to a lack of commitment and coordination. The Lower Cheliff Irrigation Project (Loan 1802-AL) was 80% completed when the Bank closed the loan, two years after the initial closing date, on July 1, 1985. The Meat Industry Project (Loan 1739-AL) was cancelled at the Goverrnent's request, with no reason given two years after the loan became effective, on April 30, 1984. More recent projects approved in 1987/88 suffered in their final stages from the civil disturbances, which by the end of 1993 obliged foreign companies and technical assistants to leave the country. The Cheliff Irrigation Project (Loan 2809-AL) was closed on December 31, 1994, with only 60% of works implemented and the Irrigation Engineering Project (Loan 2978- AL) had completed only 40% of the project's activities before closing on June 30, 1994. Project Components and Objectives With a view to promoting intensive agricultural production through irrigation, the proposed project was designed to expand and complete the existing West Mitidja Irrigation Scheme. It comprised: (a) water resource development involving construction of the Boukourdane pipeline and the Djer diversion; (b) irrigation, drainage and road development involving the construction of a pressurized irrigation distribution network on 14,000 ha (including 3 pumping stations) and a surface drainage and road systems; (c) supply and installation of sprinkler or drip systems on 22,000 ha; (d) agricultural development on 15,800 ha, including: (i) establishment of citrus plantations and other orchards and greenhouses for vegetables, (ii) provision of supplementaly equipment for agricultural operations, (iii) construction of buildings, and (iv) establishment of windbreaks; and (e) institutional development involving the strengthening of (i) the Project Unit of the National Agency for Irrigation and Drainage (AGID) responsible for supervising construction works, the Regional Authority for Mitidja (OPMI) in charge of O&M, (ii) the National Agency for Water Resources (ANRH) responsible for drainage investigations and groundwater quality monitoring, and (iii) the National Institute for Plant Protection (INPV) to prepare a fertilizer and pest management plan. The primary objective of the project was to complete an existing irrigation scheme and thereby expand the area under irrigation. The project aimed to support farmers with on-farm irrigation  equipment and services. It would also strengthen local and national irrigation institutions, assisting them in project surveys, design and implementation. The project aimed at implementing policy and institutional changes with respect to O&M and cost recovery. It would also seek sustainable solutions to environmental issues. In retrospect, considering the country's limited institutional, financial and technical capacity, the size of the total investment and the project's objectives - although very relevant - were probably too ambitious. Moreover, the intended impact on agricultural production was not obtained since the irrigation systems were not completed when the loan closed. At the local level, the objectives of safeguarding/improving farmers income and improving social welfare were hampered by the disorganization caused when the DAS (Domaine Agricole Socialiste) were transformed into EAC (Exploitation Agricole Collective) and EAI (Exploitation Agricole Individuelle). Implementation Experience and Results Two main factors explain the failure of the project to achieve its overall objectives: (a) the foreign contractors left the country due to security conditions when none of the planned irrigation infrastructure was completed, and (b) the strengthening of the concerned governmental institutions (mainly AGID and OPIM) was not effective because of the difficulties of having foreign technical assistance. The Governnent and the Bank agreed that if the project re-started, it should be preceded by a thorough review of all economic, social, financial and institutional aspects, followed by the necessary support actions to pave the way for sound irrigated agriculture. The total project cost with on-farm investments, originally assessed to be US$ 426 million, has changed significantly and is evaluated at US$ 167 million at project completion, because of implernentation problems. About US$42 million (38%) of the loan amount (US$110 million) was disbursed at project closing (Table 8). The construction of two important works for water resource development, the Boukourdane pipeline and the Djer diversion weir, expected to be completed in 1993, has not yet started. Only US$22 rmillion was disbursed for civil works for irrigation facilities on several work sites (55% of the amount disbursed), so none of the concemed irrigation area sectors could be irrigated, because of uncompleted works. Progress in the other components (on-farm development, institutional strengthening, studies, technical assistance and training) was insignificant. Two major exogenous factors affected project implementation: (a) since mid-1993, the security conditions prevailing in Algeria seriously hampered the work of the consulting firms, suppliers and contractors involved in the project, and (b) the gradual currency devaluation from 1$ = DA 5.9 in 1988, to 1$ = DA 56 early 1996. To these factors must be added Algeria's cumbersome and time- iii  consuming administrative and banking procedures, which constituted a serious impediment to project execution (Chapter C). Until the last supervision mission in September 1993, engineering works were properly monitored by the Bank: between July 1990 and September 1993, the Bank sent an irrigation engineer to Algeria for 6 supervision missions totalling 35 staffweeks. (Chapter E). In May 1992, the Bank sent a Programming/Implementation Mission (P1M) to Algeria to review the main issues affecting the whole Bank's portfolio and to identify the problems hindering projects' execution. Despite Government and Bank agreements for an action plan to improve the portfolio status, in particular the Mitidja Irrigation Project, no action was undertaken after this mission (Chapter E). Several institutional changes disrupted project implementation. The executing agency (AGID) lacked the necessary experience to manage/monitor this kind of project. Technical Assistance allocated at appraisal to help resolve specific problems during project implementation and for on-the- job training were not put in place, mainly because of difficulties in disbursing foreign currency for small operations, such as the recruitment of individual consultants (Chapter F). The overall project outcome is highly unsatisfactory. The project has not generated any significant increase in agricultural production. The institutions concemed have not been strengthened. Policy reforms have not been undertaken, especially those regarding OPIM's financial autonomy and the investment and O&M costs recovery. The organization and the management of O&M on existing schemes have been weak. It is true that under insistent pressure from the Bank which officially threatened suspension of disbursements in November 1993, water charges had been increased from 0.35 to 0.80 DA/m3, but this was insufficient to cover actual O&M costs. Despite initial difficulties and delays, AGID ultimately developed a significant capacity in handling procurement matters and in supervising studies and works; this would constitute one of the few project benefits. Summary of Findings, Future Operations, and Key Lessons Learned The project encountered a large number of difficulties and issues which hindered project implementation. In addition to the precarious security conditions which progressively worsened during the last three years of the project, the main constraints were the weakness of central and regional institutions, not only at the level of the technical Ministries in charge of the project but also at the level of the Ministry of Finance. The agricultural sector lacks sound policies in terms of institutions, organization, water tariffs, and land tenure system. This led to the conclusion that the project could not be executed under the present circumstances and that no extension of the project period could be justified. However, the project had to be extended twice to allow procurement of equipment. When the overall political/security situation in Algeria improves, future operations must concentrate on strengthening the institutions involved and on implementing sector policy reforms (Chapter H). Key lessons learned from the project can be summarized as follows (Chapter I): iv  (a) the change of OPI's statute into an EPIC (Etablissement Public a caractere Industriel et Commercial) should have been more actively monitored by the Bank; (b) Government's ownership of policies supported by the project should have been confined by upfront actions. In particular, water tariff adjustment should have been a condition of loan effectiveness and should not rest on oral commitments made during appraisal; (c) key indicators for project implementation should have been followed up by the Government and the Bank; closer attention should have been paid to the monitoring system to be put in place for the project; (d) structural constraints negatively affected the project in several ways: shortage of foreign currency, shortage of construction materials, deficiency in the banking system delaying creditors' payments, cumbersome administrative procedures; (e) contracts for study, works or supplies should include clauses clearly defining conditions and exchange rates; most of the contractors' claims arose from equivocal specifications or interpretation; the Bank needs to closely monitor contracts arrangements; (f) all progress reports should include a financial balance sheet, in the form of a bookkeeping system in local currency and in US Dollars to allow an easy comparison of resources and expenditures for each category of loan proceeds, as well as to show the available balance for the remaining activities; (g) the funding by the Bank of only one third of the infrastructure required to collect and to convey the water at the field level was insufficient. Also the project experienced budgetary restrictions coupled with the difficulty to find additional sources of funds. v  IMPLEMENTATION COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WEST MITIDJA IRRIGATION PROJECT (Loan 3076-AL) PART I: Project Implementation Assessment A. Statement/Evaluation of Objectives 1. Project Description. The proposed project was designed to expand and complete the existing West Mitidja Irrigation Scheme. It comprised: (a) water resource development involving construction of the Boukourdane pipeline and the Djer diversion; (b) irrigation, drainage and road development involving the construction of a pressurized irrigation system on 14,000 ha (including 3 pumping stations) and a surface drainage and road systems; (c) the supply and installation of sprinkler or drip systems on 22,000 ha; (d) agricultural development of 15,800 ha, including: (i) establishment of citrus plantations and other orchards and greenhouses for vegetables; (ii) provision of additional equipment for agricultural operations; (iii) construction of buildings; and (iv) establishment of windbreaks; and (e) institutional development including strengthening: (i) the Project Unit of the recently created National Agency for Irrigation and Drainage (AGID) responsible for supervising construction works; (ii) the Regional Authority for Mitidja (OPIM) in charge of O&M; (iii) the National Agency for Water Resources (ANRH) responsible for drainage investigations and groundwater quality monitoring; (iv) and the National Institute for Plant Protection (INPV) to prepare a fertilizer and pest management plan; the latter two entities would ensure appropriate environmental standards (para. 19 & 20). 2. Project Objectives. The primary objective of the project was to complete an existing irrigation scheme and expand the area under irrigation. The project supported the newly created groups of private farmers (EACs and EAls) with on-farm irrigation development and services. It also aimed at strengthening local and national irrigation institutions, assisting them in project surveys, design and implementation. The project aimed to implement policy and institutional changes with respect to O&M and cost recovery pioneered in the Cheliff Irrigation Project. It also sought sustainable solutions to environmental issues as noted above. 3. In retrospect, considering the country's limited institutional, financial and technical capacity, the size of the total investments and the project's objectives - although very relevant -were probably too ambitious. Agricultural production has not increased and the project could not be completed mainly because of security conditions in the country. 4. At the local level, the objectives were to increase farmers' income and improve social welfare in the newly created private farmers groups (EACs and EAIs) by providing them with equipment and services. 1  B. Achievements of Project Objectives 5. The overall project objectives were not achieved since none of the planned irrigation infrastructure were completed and the strengthening of the concemed govermnental institutions (mainly AGID and OPIM) has not been effective. Agricultural production has not increased. Organizational/financial arrangements for the O&M of existing schemes have not improved. It must be pointed out, however, that in November 1993, the water charges were increased from 0.35 to 0.80 DA/m3, but were still insufficient to frilly cover actual O&M costs. The specific achievements of some of the project components are detailed below." Water Resource Development (Funded under national proceeds except for the studies). (a) The construction of a pipeline between the existing Boukourdane reservoir and the Mitidja Sector C, including associated facilities for water pumping to supply about 14 hm3 per year for irrigation has not yet started, despite the Government commitment to complete it by end 1993 (See Table 10, Covenant Sch.5 B). In May 1993, the Bank asked AGID to cancel the construction of the irrigation systems on Sector C (2,700 ha), which depends on the Nador-Boukourdane system for its water supply. In November 1993, the Ministry of Equipment informed the Bank that the implementation of the infrastructure was included in the 1994 National Plan, but the transfer of water from the Nador river in the Boukourdane reservoir required additional studies. Bidding documents for the Boukourdane-Mitidja pipe conveyor, Koudiet Acerdoune and Douera-Mazafran infrastructures were completed. (b) The construction of a diversion weir, pumping station and tunnel, to convey 20 hm3/year from the Djer river to the Bou Roumi reservoir has never started despite the Government's commitment to complete it by June 1995 (See Table 10, Covenant Sch5 B). Irigation Expansion 6. Construction of irrigation facilities on 14,000 ha (the gravity system, 7,000 ha was not financed by the Bank). In total, about 55% of the works are now completed, but because the Chinese contractor left the country in November 1993 due to security conditions, the remaining works are expected to be completed by local contractors, with whom negotiations have started but contracts have not been signed. As a result, if 74% of the 336 km of pipes have now been supplied, only 57% are put in place; out of 3 pumping stations, the infrastructure of only one pumping station, and of one tank is completed. The pumping equipment is kept by the local supplier, waiting for its installation after completion of the plant. Due to delays related to the Boukourdane-Mitidja transfer, in May 1993, the Bank required the Ministry^ of Agriculture to suspend the works on the Sector C (2,700 ha), irrigated by water supplied by the Boukourdane-Mitidja system. "The last AGID Progress Report (No 13) dated January 1996, gave information exclusively on the components included in the project. 2  7. Construction of drainage and road systems on 15.800 ha on irrigated areas (not financed under the Loan): no information available. 8. Construction of housing. offices. workshops and warehouses: no information available On-farm development 9. The sprinkler and drip irrigation equipment for 15,600 ha of the second Tranche and 5,700 ha of the first, expected to be provided by OPIM, was contracted to a local supplier ANABIB and partially delivered. Since the irrigation systems are not operational, this equipment provided has not been used by the concerned farmers. 10. Provision of credit to farmers for on-farm development: no information available. Institutional Strengthening 11. The first sub-component dealt with the development and application of suitable policies and procedures for: (a) the technical, administrative and financial management of irrigation and associated facilities; and (b) the surveys and the establishment of design criteria for sub-surface drainage facilities. The surveys have been completed but have not been applied. 12. The second sub-component included 3 studies and one training program: (a) a study to develop and implement a plan for strengthening the organizational structure of OP1M, including the establishment of separate units for: (i) the operation and maintenance of irrigation facilities; (ii) the storage, sale to farmers and after-sale services of irrigation equipment; (iii) the provision of extension services to farmers on the selection of irrigation equipment and on-farm water management; and (iv) the monitoring of cropping patterns and efficiency of water use on the farms; (b) a study, including a baseline environmental pollution survey, to develop and implement a plan, including an action program, to protect the groundwater resources of the project area against environmental pollution; and, (c) a study to develop and implement a fertilizer and pest management plan. The three studies have been carried out but results have not been applied. 13. The third sub-component, conceming the provision of materials, vehicles and office equipment was more successful as shown in Table 5. Five workshops for infrastructure maintenance and computer equipment were delivered to OPIM as scheduled in the SAR; only four 4-wheel drive vehicles were delivered to AGID, the central agency responsible for the design and implementation of irrigation/drainage infrastructures. OPIM, could not purchase any vehicle, because no foreign currency was allocated to this entity. The contract for the OPIM radio equipment was signed in 1991, but for 3  unknown administrative reasons, the supplier did not deliver the equipment. The 150 motorbikes were not purchased. Studies and Technical assistance 14. Out of the 450 man-months of technical assistance programmed at appraisal, 150 men- months were used for the supervision of works by engineers from POLSERVICE, a Polish consulting firm, from 1991 to end 1993, when this assistance was interrupted for security conditions. The technical assistance allocated at appraisal to help resolving specific technical problems encountered during project implementation and to give on-the-job training, was not provided. This is due to difficulties for the Government to pay in foreign currency for small operations contracts. The AGID staff benefited from some limited training, but this was generally funded by bilateral assistance, Canada in particular, or national programs. 15. Studies. AGID contracted the Consulting firm BRL (France) for the finalization of the existing designs of the Mitidja irrigation systems, taking into account the new land tenure system resulting from the transformation of state farms (DAS) into collective and individual farms (EAC). The study was completed in 1993. 16. Section 5.04 (c) of the Loan Agreement specified that a cost recovery study was to be completed before the end of 1991. TORs were agreed by the Bank, but the tender was never launched by the Ministry of Agriculture, given the reluctance of Algerian Authorities to raise water tariffs. This study would have determined the actual cost of the water, taking into account investment and O&M costs, as a base for an adjustment of the particularly low water tariffs. In November 1993, after the Bank officially threatened suspension of the loan, the Government decided to increase the cost of water from 0.35 to 0.80 DA/m, still much too insufficient to cover O&M charges. Early 1994, without Bankes agreement, GOA contracted ISPG (Institut Superieur de Gestion et Planification), a local firm, for a rapid water cost study; a first draft was submitted to AGID for review in March 1995, but AGID claimed that the ISGP lacked the necessary experience in water management. 17. The Management Information System Study of the OP1M, not initially included at appraisal, was contracted in February 1993 to SFC/SEDES/CEGOS (France). Only the diagnostic phase was completed before the study was discontinued in July 1994 due to security reasons. 18. Technical Assistance Technical assistance to OPIM was to be provided to set up an OPIM unit for the sale and distribution of sprinkler equipment, after-sales services and staff training. 19. Technical assistance to ANRH was to be provided to enhance ANRH capacity to undertake drainage investigations and monitor water quality; the last AGID Progress Report indicated that ANRH intended to implement these tasks on its own budget. 20. Technical assistance to INPV was to be provided for the preparation and implementation of a fertilizer and pest management plan. The last AGID Progress Report indicated that the INPV requested the cancellation of the amount earmarked for this activity. 4  Training and auditing 21. Training. A local and international training program was defined in the SAR (Annex 6). The last AGID Progress Report indicated that due to lack of foreign currency the training program could not be carried out. 22. Audit. The audit reports were received, but the audit of OPIM financial statements were not carried out in the absence of auditable financial statements. C. Major Factors affecting the Project 23. Two main exogenous factors negatively affected project implementation: (a) since mid 1993, security conditions hampered the work of foreign consulting firms, suppliers and contractors involved in project implementation; and (b) the gradual currency devaluation from 1$ = DA 5.9 in 1988, to 1$ = DA 56, early 1996. 24. The following factors, linked to Algeria's cumbersome administrative procedures, were also identified: (a) constraints imposed by the Ministry of Economy in controlling operations; (b) time- consuming procedures in procurement processing; (c) lengthy procedures of the BAD (Banque Alg6rienne de D6veloppement), combined with deficiencies in the national banking system, delaying creditors' payments, and inadequate foreign exchange regulations affecting both local and foreign contractors; (d) the general shortage of foreign currency, preventing suppliers from importing foreign equipment (vehicles, technical equipment, spare parts, basic materials); (e) shortages on basic construction material, such as iron bars, aggregates from quarries due to the strict regulations on the use and transport of explosives, and sometimes on cement supply; (f) shortage of prefabricated canals, pipe accessories, PVC drains; and accessories; and (g) frequent changes in the governmental entities involved in the project. The implementing agencies. 25. AGID is the central implementing agency for all the civil works and studies. Despite a declining purchasing power of AGID staffs salaries and increasing difficulties in work conditions, the project was monitored by a sufficient number of competent technicians, who were reasonably well- motivated. Main factors affecting project implementation were: (i) limited receptiveness and/or difficulties in organizing the training program and mobilizing technical assistance; (ii) low performance of some contractors, initially due to inadequate site organization aggravated by the above mentioned shortages of material and equipment, and then by the departure of CSCEC, the main Chinese contractor for the civil works. 26. The regional OPIM, based in Meftah, 20 kmn south-east of Algiers, is the entity entrusted with managing, operating, and maintaining irrigation infrastructure. The strengthening of OPIM, an important project component, was based on the transformation of this previously subsidized state agency (before 1988) into a public entity EPIC (Etablissement Public a caractere Industriel ou Commercial), with commercial vocation. OPIM's new autonomous statutes prevented it from 5  benefiting from any subsidy to compensate for the low level of water charges which are entirely deternined by the Government without taking into account the actual costs of water distribution. In the meantime, OPIM could not purchase vehicles nor equipment because, as an autonomous entity, it could not have access to the official sources of foreign currency. 27. The total project cost with on-farm investments, was reduced significantly, due to the cancellation of several major components. Only US$42 million (38%) of the loan amount of US$110 million were disbursed at project closing. 28. Disbursements were processed by BAD. Exchange rates applied by the Bank for the project's transactions were different to those used by the BAD under Algeria's multiple-exchange regime. In addition, due to cumbersome and lengthy procedures, contractors received foreign currency with great delays preventing them from operating efficiently and, in some instances, from completing the works. 29. At appraisal, it was assumed that the project would be implemented over a 6-year period (September 1989 to June 1995), commensurate with the nature of the works. The key implementation indicators (Table 5) show that a limited part of the OPIM equipment was provided; only 4 vehicles were delivered to AGID. Until 1993, civil works generally progressed in line with the working program established in the SAR Then, delays occurred, mainly due to the security situation and the fact that foreigners could no longer stay in Algeria, resulting in the suspension of works and technical assistance. 30. In order to ensure adequate distribution of irrigation water in the Mfitidja Plain, the Government agreed in the Loan Agreement to build: - the 13 km pipeline from the Boukourdane reservoir to the Western Mitidja Plain (Sector C: 2,700 ha); - the Djer Diversion, to convey supplementary water from the Djer river into the existing Moustakbel reservoir; before the closing of the loan. 31. Government has not requested the Bank to finance either the Djer diversion or Boukourdane pipeline since over 70% of the Boukourdane water would be for potable water supply and other irrigation schemes, which were still in an early stage of preparation in 1989. However, the above works have never started. D. Project Sustainability 32. In the present situation, the sustainability of the Mitidja project is not reached, since works, actions and measures defined at appraisal could not be completed. Sustainability of the project will depend mainly on OPIM's capacity to determine, collect and keep the water charges, so as to fully cover the O&M costs of irrigation infrastructure, and the amortization of the initial investment. This implies that the agency would be given a degree of financial autonomy, which it presently does not 6  have. In addition, farmers should be in a position to pay for such water charges. This supposes that farmers'net income derived from the use of irrigation water would be sufficient to pay water fees at the right economic price of water. Limited infonmation available to the mission prevent any firm conclusion. There is no guarantee that the farmers will accept to pay increased charges as long as altemative sources of water are available, such as groundwater and direct pumping from the rivers, although more costly, the supply of this water is more reliable than OPIMs irrigation systems. 33. Both parties agreed that prior to any possible re-start of the project a thorough review of all economic, social, financial and institutional aspects will be carried out so as to develop sound and viable irrigated agriculture. E. Bank Performance 34. The project was identified in February 1985 during a World Bank reconnaissance mission, as a project which may be suitable for Bank financing, together with the Cheliff project, which was subsequently financed by the Bank (Loan 2809- AL), two years and a half before Mitidja. The project was then prepared in November 1987 by the Government with the assistance of the FAO/WB Cooperative Program. The SAR Yellow Cover, dated May 1989, was presented to the Board in May 1989 and the loan signed in April 1990. It became effective in June 1990. 35. The project was adequately prepared, with a favorable balance of expertise from the Government, consulting firms and the FAO/WB Cooperative Program. At appraisal, it was considered that the risk of slow project implementation would be minimized by the design of large procurement packages and the provision of a strict monitoring system to ensure an adequate build-up of benefits; in retrospect, the above assessments appear to have been over-optimistic. Tariff increases should have been a condition of loan's effectiveness. 36. The Bank endorsed the Government decision to exclude the financing of the Boukourdane pipeline and the Djer diversion from the Loan and was satisfied with the Government commitment to execute these infrastructures on prescribed time. Despite precise covenants no work was started. This risk could have been identified during appraisal. In May 1993, the Bank requested the Government to cancel the construction of Sector C (2,700 ha), which is fully dependent on the Boukourdane system. 37. In September 1990, the Bank transferred to the Algerian Central Bank US$10 million for the project special account; this amount has been efficiently used. 38. Between July 1990 and September 1993, the Bank sent an irrigation engineer for 6 supervision missions (total: 35 man-weeks). In retrospect, this engineering-orientated monitoring was justified; however, the assistance of other specialists (finance, procurement) could have been fruitful. 39. In May 1992, the Bank sent a Programming/Implementation Mission (PIM) to Algeria, aiming at conducting a review of the main issues influencing the whole Bank portfolio and identifying the problems affecting project execution. Main bottlenecks were procurement, disbursement, 7  institutional capacity, mobilization of technical assistance, and the water tariff structure for all irrigation projects. An action plan was prepared outlining the measures to be taken to ensure continued Bank support. These measures included the resolution that the local enterprises should have access to foreign exchange in amounts at least equal to the values estimated in the contracts. The action plan also contained a request that the Government provide the OPIs with sufficient counterpart funds to carry out the strengthening program financed by the Bank. Despite the Government agreement on this action plan, there was no effective implementation of the proposed actions. 40. The Bank systematically and rightly recommended the financial autonomy for the OPIs through suitable water charges covering at least O&M costs. The Government agreed in a covenant in the Loan Agreement(Section 5.04/a), that 100% of the actual O&M costs and a reasonable part of the investments costs should be recovered through water fees. However, OPIM, as the other OPIs, could not determine and apply these water charges which are set up by the central Ministries based on political considerations. During the initial phase of the project, when income from water charges was insufficient, the OPIs needed governmental subsidies to assume its functions and services, in particular O&M of the irrigation infrastructure. These were not provided since the Government maintained that the autonomy of OPIM excluded it from financial assistance. To ensure the sustainability of the Mitidja project, the Bank should have negotiated appropriate arrangements to ensure OPIMs viability. 41. At Government's request, the project was extended till December 31, 1996 to allow purchase of irrigation and pumping equipment and spare parts. A second extension of the loan to June 30, 1997 was granted to allow payment to the supplier. 42. Non cancellation of the loan was justified by the need to: (a) allow procurement of necessary equipment; and (b) maintain dialogue with the Borrower during a particularly difficult period. At preparation, risks were not assessed adequately, and Implementing Agencies should have been properly trained at the very beginning of the project. Procedures should have been adjusted to local conditions. Basic technical and financial studies should have been accelerated and applied. F. Borrower Performance 43. During the 1980s, the irrigation sub-sector went through severe disruptions because of the following major institutional changes: In 1985, creation of OPIs (Offices des perimetres irrigues) entrusted with the O&M of irrigation infrastructure in the four main irrigated areas; In July 1987, transformation of the socialist state farms (DAS) into individual farmns (EAI) and autonomous collectives agricultural farms (EAC) where farmers can opt to act as individual private farmers. The resulting fragmentation of large state farrns should lead to an increase of farmers' incomes. This would have justified a re-orientation of the project components by the Bank or by the 8  Government. This was unfortunately never done, given the worsening security conditions; In August 1987, creation of AGID entrusted with full responsibility for design and implementation of the irrigation infrastructure, while the overall planning and coordination activities were retained by the DGPI (Direction generale des perimetres irrigues) in the Ministry of Hydraulics and Forests, which in 1990 became the Ministry of Equipment and Housing; In 1988, OPIs were given EPIC statute depriving them of any governmental subsidies while not allowing them to determine and apply more adequate water tariffs; In 1992, the responsibility for the whole irrigation sub-sector was transferred from the Ministry of Equipment to the Ministry of Agriculture; Since early 1994, the security conditions led most of the foreign companies, consulting firms and technical assistants to leave the country; most of Bank's activities, in particular supervision, were discontinued. 44. AGIID Assessment. This new implementing authority, created in 1987, made reasonable efforts to ensure efficient project implementation, but most of its efforts were thwarted by cumbersome administrative and financial procedures outside its jurisdiction. AGID made strenuous attempts to strengthen its structures, the most noticeable results being the well staffed Studies and Works Department, which were directly involved with project implementation. AGID's efforts to recruit competent staff were constantly hindered by the private sector which is more attractive because of higher remuneration and fringe incentives. 45. No training was provided to AGID staff who were not familiar with the Bank procurement and disbursement procedures, the complex budgeting and processing systems of the multiple entities involved, and the administrative circuits and procedures. Despite loan agreement, many Government officials maintain that Algerian laws supersede all other signed agreements. Nevertheless, tender procedures were properly followed, and contracts correctly drafted. 46. Performance of consulting firms and contractors. The foreign consulting firmns and contractors, particularly the Chinese CSCEC civil works contractor, developed specific skills for the organization of their work and supplies, given the multiple difficulties affecting the project; in general, their performances were satisfactory in the demanding Algerian conditions, especially the enormous delays and difficulties for payment. The association of foreign and national firms could be considered successful, as it constituted an excellent occasion for training of the latter. Most of the problems with the intemational contractors were the consequences of extemal factors, such as the security conditions which prevented field visits in Algeria since mid 1993. The civil works contract was terminated for security reasons and many contracts were amended several times due to the modification of quantities, 9  design adjustments, contractual delays because of unforeseen circumstances (devaluation of the local currency, changes in the fiscal regulations). 47. Project monitoring. According to the SAR (para 6.14), the Ministry of Hydraulics and the Ministry of Agriculture were expected to jointly monitor and evaluate project implementation and benefits. They were also required to draft semi-annual progress reports as well as a project completion report within six months of loan closing date on the execution of the project, its costs and the benefits derived, the performance and fulfilment by all authorities involved. 48. From July 1989 to December 1995, AGID prepared 13 semi-annual progress reports; these reports dealt only with the progress of works and financial aspects of the components financed by the Loan (namely 26% of the project's total cost), which provides only a partial picture of the whole project. No project completion report has been prepared since the Government considers the project not yet completed. 49. The project had persistent problems of non compliance with audit requirements. There were no audit reports since there were no auditable financial statements. To improve audit compliance, an action plan was agreed upon which included the installation of a Management if ormation System for OPIM but these efforts were interrupted, with the withdrawal of the French consulting firm CEGOS from Algeria, in December 1993. 50. The lack of an AGID book-keeping system in US dollars for the project, did not allow an easy comparison of resources and expenditures for each category of loan proceeds. During the last supervision mission in December 1993, a Bank economist suggested to AGID a suitable cost table presentation allowing monitoring of expenditures, which has been used since then in all AGID progress reports. 51. Technical assistance. Technical assistance for work supervision of construction works was contracted in early 1991 to POLSERVICE, a Polish consulting firm. Performance was satisfactory. The contract was terminated in September 1993 due to security reasons. 52. Compliance with covenants. Table 10 shows a detailed status of Loan Agreement's legal covenants. As regards the financial covenants, after lengthy delays and several warnings from the Bank, the Government regularly sent audit reports of the project's accounts and records. However, these audit reports were prepared by the state Inspection Generale des Finances and not by an external auditor. 53. The construction of the Djer Diversion and the Boukourdane pipeline has not started. Most of the important loan covenants related to water tariffs and cost recovery, were not complied with, despite numerous reminders from the Bank. In October 1993, the Bank announced that it would suspend disbursements if: (i) the water charges were not doubled by the end of 1993; (ii) this tariff was not in effect in the Mitidja perimeter by the end of April 1994; and (iii) a rapid study on the actual cost of water has not started before the end of April 1994. As a 10  result, the new water charge (0.80 DA/m3) was published in the Algerian Official Journal dated 13 November 1993 and was effective in December 1993. G. Assessment of Outcome 54. The overall outcome of the project is highly unsatisfactory. Works defined in the SAR have not been completed. Farmers' income, social;velfare, agricultural production have not been improved. Institutional changes have not been implemented to: (a) ensure reliable water distribution through adequate infrastructure management and O&M; and (b) cover all irrigation costs through appropriate water tariffs. Nevertheless, despite all difficulties encountered, the project presents some positive results, constituting a favorable asset if the works could be resumed. Since works are not completed, and in the absence of a field visit, any economic analysis of the actual situation, particularly the determination of rates of return, would be virtually meaningless. 55. Only 55% of the irrigation infrastructure was completed (Para 6). As a consequence, no water can be distributed to the project area, and the agricultural production is still on rainfed conditions. AGID is reportedly continuing the construction of the irrigation systems and the pumping stations by local contractors, after the withdrawal of the Chinese construction company, since the electro-mechanical equipment has been already purchased and a limited part installed. H. Future Operation 56. No plan for the Mitidja future operation has been prepared since a new project in Algeria,-- the Irrigation Management Project --, could not be appraised early 1994 to implement all necessary policy and structural reforms for the irrigation sub-sector. Due to the unexpected aggravation of the situation in Algeria, the preparation of this new project was interrupted. Priority should be given to the completion of the on-going works, security conditions permitting. 57. Another important prerequisite should be to resume the Management Information System study so as to provide OPIM with an adequate modem accounting system. 58. In December 1994, the Bank proposed to the Government an Agricultural Structural Adjustment Loan (ASAL) aiming at assisting the Government with the necessary reorganization of the agricultural sector, with a particular view to founding future irrigation development in Algeria on a sound basis. Studies financed by EEC and Japanese Bilateral Funds have been carried out, and the ASAL has been postponed. L Key Lessons Leamed 59. Key lessons learned from the project can be summarized as follows: (a) the Bank should more carefully monitor project organizational changes. Low tariffs and/or frequent droughts, as well as farmers' financial difficulties, led to 11  insufficient income for OPIM to provide a reliable water distribution. The interruption of public subsidies should have been progressive and commensurate with the expected revenue derived from authorized water tariffs, with a view to allowing OPIM to ensure minimal O&M tasks; (b) timely provision of technical assistance and training should be provided from the project's start by specific arrangements (as, for exarnple, Gvt./FAO Agreements put in place with project's proceeds). The same agreements could also cover training needs for the staff in charge of project's implementation and O&M. Ideally, technical assistance for the supervision of works should be contracted at the sarne time that works are tendered; (c) contracts for study, works or supply should include clauses which would clearly define conditions for exchange rates; most of the contractors' claims arose from equivocal specifications or interpretation on foreign exchange. The Bank should monitor contractor's arrangements better; (d) all progress reports should include a financial balance sheet, in the form of a bookkeeping system in local currency and in U.S. dollars to allow an easy comparison of resources and expenditures for each category of loan proceeds, and to show the available balance for the remaining activities; (e) AGID's project monitoring focused only on technical aspects of infrastructure implementation under the responsibility of the Ministry of Equipment. All other aspects, such as OPIMs restructuring, improving the performance of EAC and EAI, and strengthening extension services in the project area, under the responsibility of the Ministry of Agriculture, were not dealt with; more attention should be given to key indicators for project operation following its implementation; at appraisal, the Bank should give greater care to the monitoring system to be put in place for the project; (f) the Bank needs to ensure that an enabling environment for project implementation is created and maintained. Structural constraints negatively affected the project in particular: shortage of foreign currency, shortage of construction materials, deficiency in the banking sector delaying creditors payments, cumbersome administrative procedures; (g) the financing of one third only of the infrastructure needed to mobilize and convey the water to the irrigated areas, is not sufficient. Loan covenants do not solve budgetary restrictions, and lack of ownership from the borrower. 12  PART H - STATISTICAL TABLES Table 1: Summary of Assessments Not A. Achievement of objectives Substantial Partial Negligible Applicable V/) V) V)(/ Macro policies [I [I W Sector policies I ] E g Financial objectives W F 27 Fl Institutional development 7 7 z F7 Physical objectives LI ] F7 F Poverty reduction F F E F Gender issues F 7 F 5 Other social objectives W F F F Environmental objectives F 0 3 7 Public sector management F F F F Private sector development E 7 7 / Other (specify) B. Proiect sustainability Likely Unlikely Uncertain (') (1) (1) 13  Highly C. Bank performance satisfactorv Satisfactony Deficient (1) () (1) Identification z F7 Preparation assistance E F I Appraisal EI [7E Supervision F 1 F HighlY D. Borrower performance satisfactory Satisfacton Deficient (1) (1) (1) Preparation (n.a.) z F7 Implementation (acceptable) 7 F E Covenant compliance E Operation (if applicable) (n.a.) E Highly Highly E. Assessment of outcome satisfactory Satisfactory Unsatisfactorv unsatisfactorY Acceptable 14  Table 2: Related Bank Loans/Credits Loan Title Purpose Year of Status Approval l 1159-AL: Technical before Completed in 1983 Assistance and Rural 1980 Development Project 1802-AL: Bas-Cheliff Rehabilitation works on main conveyors before Completed in 1985 Irrigation Project 1980 2809-AL: Cheliff Irrigation New irrigation infrastructures 1987 Works completed at 60% Project on 8 000 ha in the Upper Cheliff Valley Disbursement: 53% Closed and rehabilitation of 3 000 ha in the end 1994 (see ICR Report Lower Cheliff to improve the income and No. 14013) social welfare of families living in project area 2978-AL: Engineering Create portfolio of feasibility studies for 1989 Studies completed 40% irrigation projects for a 10-year national Disbursement: 39% investment program Closed:June 1994 3009-AL: Agricultural Credit Strengthen the BADR (Banque 1988 Closed: Sept. 1992 (See Agriculture et Developpement Rural) PCR Report No 13196, through financing of various agricultural dated June 1994) equipment, technical assistance and training 3017-AL: Locust Control Support Algeria's Locust Control 1988 Closed: Dec 1991 Program l 3076-AL: Mitidja Irrigation Inprove agricultural productivity by 1989 Closing date: June 1996. Project developing 14 000 ha new irrigation in the Western part of the Mitidja Plain 3216-AL: Research and Initiate reform of national research 1990 Closing date: Dec. 31 1996. Extension system and test new extension approaches Restructuring being for cooperative farms (EAC) considered 3405-AL:Sahara Development Rehabilitation of southern oases and on- 1991 No disbursement in the last farm development, supported by 2 years; immediate closure institution strengthening, technical suggested Restructuring assistance and training being considered 3487-AL: Forestry and Develop a long-term action program to 1992 On-going restructuring; WB Watershed National better protect/manage Algeria's natural suggested the cancellation resources. Institution strengthening of a US$12.2 million undisbursed amount 3690-AL: Locust control Support Algeria's Locust Control 1994 The feared locust invasion Program did not materialize; immediate closure suggested and cancellation of the US$24 million undisbursed amount July 94 15  Table 3: Project Timetable Steps in Project Cycle Date planned | Date actual/ latest Estimate Identification (Executive Project Summary) August 87 August 87 Preparation November 87 November 87 Appraisal May 88 May 88 Negotiations April 89 April 89 Board presentation May 89 May 89 Signing April 90 April 90 Effectiveness June 90 June 90 Project completion December 96 December 96 Closing December 96 December 96 16  Table 4A: Annual Loan Disbursement (US$ thousands) FY91 FY92 FY93 FY94 FY95 FY9 TOTAL SAR % Actual/SAR Special account 9,962 9,962 9,962 Ct 1: Civil works, buildings 973 1,601 3,511 6,085 2,405 800 3,205 1,050 3,705 4,755 421 2,646 3,067 943 4,151 5,094 373 373 22,579 80,000 28 2: Equipment, vehicles, 513 3,037 25 269 3,844 etc. 146 146 3X990 19,000 21 aL 3: Studies, trainig 5,511 5,511 5,511 5,000 110 Sub-total 9,962 513 14,713 13,074 269 3,511 42,042 42,042 Undisblused 1,233 lled 66,725 TOTAL 110,000 110,000 38 Table 4B: Cumulative Loan Disbursements (US$ million) FY90 FY91 FY92 FY93 FY94 FY95 FY96 Appraisal estimate 3.30 15.40 33.00 50.60 71.50 92.40 1 10.0C Actual 9.96 10.47 23.87 38.26 38.53 42.04 etualas%ofappraisal 65% 32% 47Ye 54% 42% 380%I _te e: WB Disbrsanenit Ifonnation PFPMR4 17  Table 5: Key Performance Indicators for Project Implementation (December 1995)" Appraisal Actual % Item Targets Achieved Comments (End 1995) Implementation Period L STRENGTHENING OF AGID/OPIM 1. Equipment . . Maintenance equipment (SAR: 5) 1990 100 5 plants delivered l Vehicles (SAR: 34) 1990 12 4 vehicles delivered . Motorcycles (SAR: 150) 1990 0 . Radio equipment 1990 0 Contract signed; delivery not yet started . Computing equipment 1990 100 6 PC delivered 2. Studies . Irrigation layout up-dating 1990 100 . Drainage/pollution control (ANRH) 1991 0 Financed by ANRH . Phyto-sanitary control (INPV) 1991 0 No local budget . Management Information System 1990/93 10 Contract approved 3. Training Project period 0 Budget issue IL WATER RESOURCES DEVELOPMENT A. Djer Diversion L Studies 1989/90 100 | Bidding documents 1991 100 | Construction | B. Boukourdane Diversion . Studies 1989/90 100 Completed . Bidding documents 1990/91 100 Construction 1991/93 0 iAccording to AGID Progress Report No. 13 (31.01.96). k Project Completion Date: 30.06.95. 18  Quantities Item Progress in % Comments Design Completed Target End 1995 m - IRRIGATION INFRASTRUCTURE a - Civil Works 55 global l - Pipe supply (in m.) (in m.) . precast concrete 38 720 34 517 89 concrete+steel sheet 6 330 6 288 99 . asbestos cement 291 252 207 365 71 - Pipe layin2z . precast concrete 38 720 23 638 61 concrete+steel sheet 6 330 6 264 99 . asbestos cement 291 252 160 592 55 - uming stations(PSV/Storage-t-ank (S-TI El Affiroun 100 Lalla Aicha Detailed PS 0 design (DD) ST 100 completed . Hadjout 0 DD completed - Gate structure 30 b - Pumping equipment for 3 Units . Supply 100 . Installation 30 IV - ON-FARM DEVELOPMENT . Sprinkler equipment 15 600 ha 0 Contract signed 19  Table 6: Key Indicators for Project Operation not applicable Table 7: Studies Included in Project Study Status Impact of Study 1. Study to develop and implement a plan Done Not implemented for strengthening the organizational structure of OPIM, including the establishment and maintenance with adequate resources of separate units: (i) for the operation and maintenance of irrigation facilities; (ii) the storage, sale to farmers and after sale services of irrigation equipment; (iii) the provision of extension services to fanners on the selection of irrigation equipment and on-farm water management; and (iv) the monitoring of cropping pattems and efficiency of water use on the farms. . Study, including a base line Done Not implemented enviromnental pollution survey, to develop and implement a plan, including an action program, to protect the groundwater resources of the Project Area against environmental pollution. l 3. Study to develop and implement a Done Not implemented fertilizer and pest management plan. 20  Table 8A: Project Costs ('000 DA) Item ~ ~~~~Appraisal Estimate Actual/Latest Estimate:aJ Item_l Local Foreign Total Local Foreign Total_ Water Resources Development 1. Diversion of Boukourdane 83 658 88 311 171 969 2. Diversion of Djer (Chifa dam) 106 033 112 537 218 569 Sub-total A 189 691 200 847 390 538 B. Hydroagricultural Infrastructure 1. Halloula Lake 9 231 9 664 18 896 2. Sector D 121 589 144 267 265 856 3. Sector E 68 725 78 815 147 541 4. Sector FG 81 541 93 763 175 304 5. Sector A 74 667 93 976 168 643 6. Sector B 98 738 120 683 219 421 7. Sector C 83 953 106 674 190 627 Sub-total B 538 445 647 843 1 186 288 C. Farm Investments 1. Agricultural production 255 774 137 552 393 326 Sub-total C 255 774 137 552 393 326 D. Administrative Strengthening 1. Ministry of Agriculture 18 085 22 952 41 037 l2. OPIM 92 897 35 196 128 092 13. ANRH 1 610 1 910 3 521 Sub-total D 112 592 60 058 172 650 E. Environment Protection 1 637 4 401 6 038 Total base cost 1 098 139 1 050 702 2 148 840 Physical contingencies 119 229 125 436 244 665 Inflation 196 911 177 945 374 856 ITOTAL PROJECT COST 1 414 278 1 354 083 2 768 361 Information requested to AGID on July 11, 1996 and not yet received. 21  Table 8B: Project Financing (US$ million) SAR Estimate Effective Disbursements Source of Financing Local Foreign Local Foreign World Bank 110.0 42.04 Local credit 40.5 l Beneficiaries 26.5 ? Government 248.9 ? Other external ? financing TOTAL 315.9 110.0 42.04 Missing information requested to AGID on July 11, 1996 and not yet received Table 9: Economic Costs and Benefits Economic evaluation of costs and benefits could not be undertaken since mission could not take place in the country for the preparation of this ICR. 22  Table 10: Status of Legal Covenants Mitidja Irrigation Project Loan Covenant Present Ong. Fulfil. Rev. FulfiL Description of Covenant Comments Agreement Type Status Date Date (Section) l 4.01 (a) F OK Separate records and accounts maintained for the project l 4.01 (b)(c) F OK Accounts to be audited Audit reports regularly received as of FY91 but annually unreliable since they are parpared by the state . _________ _______ ________ _____________________ Inspection G& nerale des Finances 5.0] T PC 12/90 12/92 Prepare and implement Postponed; monitored measures to phase out pumping of ground water for irrigation 5.02 T OK 12/92 Monitoring of ground water done; recommendations of the June 1991 mission on quality pollution situation implemented 5.03 T OK Regular inspections of Bou- Monitored by SPN missions until September 1993 Kourdane and Bou-Roumi- dams 5.04 (a) F ACT To apply binomial tariff Notice of suspension of disbursement sent on 11/1/93 structure 5.04 (b) F ACT Carry out a study of capital Notice of suspension of disbursement sent on 11/1/93 and O&M cost recovery levels 5.04 (c) F ACT 12/91 12/93 Propose a program to Notice of suspension of disbursement sent on 11/l/93 implement the application of binomial water tariffs Sch. 5 B T NC Completion of Bou- Construction of Sector C stopped Kourdane pipeline (31.12.93) and Djer dam (30.6.95) Sch. 5 C, 2a M OK Recruitment of consultants Consultant has been recruited for supervision of works Sch. 5 C, 4 M OK 31/12/91 Prepare a draft of a O&M Model manual approved manual Sch. 5 C, 4 M OK 31/5/95 Final draft of this manual Sch. 5 E, 2a M NC 31/12/91 31/12/93 Carry out a study to organize Notice of suspension of disbursement sent on 1/11/93 OPIM Sch. 5E, 2a M ACT 3 1/12/92 31/21/93 Implement such study Notice of suspension of disbursement sent on 1/11/93 Sch. 5 E, 2b M OK 31/12/92 Carry out studies for See 5.02 above groundwater protection l 23  Loan Covenant Present Orig. Fulfil. Rev. Fulfil. Description of Covenant Comments Agreement Type Status Date Date (Section) Sch. 5 E, 2b M OK 31/12/93 Implement such study Sch. 5 E, 2c M OK 30/6/92 Carry out a study for pesticide and fertilizer management Sch. 5 E, 3c M NC 30/6/94 lImplement such study I Key: Covenant Type Status E - Economic ACT - Needs use of formal remedies to bring into compliance F - Financial NYD - Not yet due M - Managerial OK - Covenant complied with T - Technical RVS - Revision required PC - Partially complied with NC - Not complied with 24  Table 11: Compliance with Operational Manual Statements Statement Number and Title Describe and Comment on Lack of Compliance BP 6.50: Disbursement profiles Slow disbursement because of cumbersome payment procedure Use of Consultants by WB Borrowers (1981) Reluctantly complied with General Conditions Applicable to Loans and Guarantee Final evaluation report not prepared by the borrower Agreements (1985): Section 9.07 OD 8.40: Technical Assistance No proper system to mobilize the technical assistance OD 10.60: Accounting, Financial Reporting, and Generally not complied with Auditing OD 10.70: Project Monitoring and Evaluation Limited monitoring and complete lack of evaluation OD 11.00: PROCUREMENT Many specifications not complied with (11.02: Procurement arrangements for Investment Operations) OD 13.05: Project Supervision Only by an Irrigation Engineer OD 13. 10: Borrower Compliance with Audit Covenants Not complied with until FY91 Table 12: Bank Resources: Staff Inputs Planned Revised Actual Stage of Project Cycle Weeks '000 US$ Weeks '000 US$ Weeks '000 US$ Through appraisal 135.5 205.0 135.5 205.5 135.5 205.0 Appraisal-Board 19.5 52.7 19.5 52.7 19.5 52.7 Board-effectiveness Supervision 41.6 130.5 41.6 130.5 35.0 110.9 Completion 7.5 28.4 7.5 28.4 7.5 28.4 TOTAL 204.1 416.6 204.1 417.1 197.5 397.0 25  Table 13: Bank Resources: Missions Specialized Performance Rating Stage of Project Cycle Month/Year Number of Days in Staff Skills Types of Persons Field represented" Problems Implementation Development Status b/ Objectives hrough appraisal Dec.87 -May 88 Appraisal - Board May 88 - May 89 Board - May 89 - June 90 ffectiveness Supervision June 90 - Jan. 94 SPN 1 3 July 90 1 8 E 1 1 SPN2 23 Oct. 90 1 10 E 1 1 SPN3 5 Nov. 91 1 7 E 3 2 M, P SPN4 10 June 92 1 13 E 3 3 M, P, F SPN5 Nov. 92 (NO 1 2 E F.590) SPN6 13 Dec. 93 2 6 E, Ec 4 4 all types ompletion June 96 1 0 E - 9 E = Engineer; Ec = Economist. v'1 to 4: good to unsatisfactory. g M = Managerial; P = Procurement F = Financial. 26  DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WEST MITIDJA IRRIGATION PROJECT APPENDICES A. Missing Information B. Borrower contribution to ICR No comments were received despite reminders C. Cofinancier contribution to the ICR n/a D. Miscellaneous appendices n/a   IMPLEMENTATION COMPLETION REPORT DEMOCRATIC AND POPULAR REPUBLIC OF ALGERIA WEST MITIDJA IRRIGATION PROJECT (Loan 3076-AL) Appendix A: Missing Information As security conditions in Algeria prevented any field visit and related discussions with Algerian Officials, and on the other hand as AGID never answered the FAO/CP fax dated July 11, 1996, soliciting additional information on actual project expenses and financing arrangements, the mission was dissuaded to request any other data. As a consequence, the following questions and issues remained unsolved at the issuing date of the present report: (a) The actual implementation progress, including financing arrangements, and expected completion date: (i) the Boukourdane-Mitidja pipeline and the diversion infrastructure from the Djer River to the Bou Roumi Reservoir (paras. 5, 30 and 31); (ii) the construction of drainage and road systems on 15,800 ha, and of a housing, offices, workshops and warehouses (paras. 7 and 8); (iii) the provision of credit to farmers for on-farm development, and related technical assistance for the setting up on OPIM unit for equipment sale (paras. 10 and 18); (iv) the first and second sub-components of the institutional strengthening component (paras. 11 and 12); (v) completion of civil works for the irrigation infrastructure by COSIDER, the national contractor, responsible to take over the job after the contract resignation of the Chinese enterprise (para. 41); (b) the status of technical assistance: (i) volume of technical assistance actually used for supervision work, provided by POLSERVICE and by AGID (para. 14); (ii) changes in land tenure in the project area since 1983 (para. 15); 27  (iii) was the rapid water cost study contracted to ISPG in 1994 for the Cheliff scheme, also relevant for OPIM ? (para. 16), (iv) was the Management Information System Study contracted to SFC/SEDES/CEGOS in 1993 for the Mitidja scheme, also relevant for OPIM? (paras. 17 and 49); (c) the major factors affecting the project listed in paras. 23 and 24: (d) the actual project expenses (para. 27 and table 8B); (e) status, and possible impact of the various studies (para. 6); (f) the ex-post economic analysis of costs and benefits. 28