Afghanistan - Khanabad Irrigation Project

a-. QaL4g FLE COPY RESTRICTED Report No. PA-75a This report was prepared for use within the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. The report may not be published nor may it be quoted as representing their views. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION KHANABAD IRRIGATION PROJECT AFGHANISTAN May 10, 1971 Agriculture Projects Department  CURRENCY EQUIVALENTS US$1.00 2 Afghanis (Af) 80 Af 1 = US$0.0125 Af 1 million n US$12,500 (Average free rate for October 1969 to November 1970) WEIGHIS AND MEASURES (METRIC SYSTEM) 1 hectare (ha) = 2.47 acres 1 kilometer (km) 2 - 0.62 miles 1 square kilometer (km ) - 0.386 square miles 1 meter (m) 3 = 39.37 inches 1 cubic meter (m ) = 35.31 cubic feet 1 millimeter (mm) 0.039 inches 1 kilogram (kg) = 2.2 pounds 1 metric ton (m ton) = 2204 pounds ABREVIATIONS RGA - Royal Government of Afghanistan UNDP - United Nations Development Program FAO - Food and Agriculture Organization of the United Nations ADB - Asian Development Bank MAI - Ministry of Agriculture and Irrigation HAVA - Helmand-Arghandab Valley Authority USBR - United States Bureau of Reclamation SOGREAH - Societe Grenobloise d'Etudes et d'Applications Hydrauliques DRC - Development and Resources Corporation  AFGHANISTAN KHANABAD IRRIGATION PROJECT TABLE OF CONTENTS Page No. SUMMARY AND CONCLUSIONS ............................... i - ii I. INTRODUCTION ....................,.,.,.,,,.,.,,.,..... 1 II. BACKGROUND .. . , . .... 2 III. THE PROJECT AREA. 3 General ........, 3 Climate .. .. . .. .. . .. .. . ................,, 4 Topography . . 4 Soils ........,.,... .......,., 4 Water Quality and Floods. 4 Existing Irrigation and Drainage . . 5 Population, Land Tenure and Farm Size . . 5 Agricultural Production . . 6 Marketing and Transportation . . 6 Supporting Services . . 7 IV. THE PROJECT. 7 Description ............ . . . 7 Project Works ................. 8 Water Supply and Demand . . 9 Consulting Services .. 9 Construction Schedule ........................ 10 Cost Estimates .............,,., . 10 Financing ....................... 12 Procurement and Contracts ........................ 12 Disbursements... 13 Accounts and Audit ............................,.. 13 This report is based on the findings of an appraisal mission which visited Afghanistan in October/November 1970, comprising Messrs. K. Myint, K. Pranich, H. J. Tennent (IDA) and Messrs M. Raczynski (Agriculture Con- sultant) and T. N. Jewitt (Soils Consultant).  -2- Page No. V. ORGANIZATION AND MANAGEMENT .......................... 14 Operation and Maintenance .16 Recovery of Capital and 0 & M Costs .16 VI. PRODUCTION, MARKETS, PRICES AND FARM INCOME ............ 17 Production ... 17 Markets . .......... ... 17 Prices .............................................. 18 Farm Income ... 18 VII. BENEFITS AND JUSTIFICATION ............................. 19 Benefits ........................................... 19 Environment .......................................... 20 VIII. RECOMMENDATIONS .. . 20 ANNEXES 1. Climatic Data at Kunduz 2. Agriculture 3. Project Works 4. Water Supply and Demand 5. Consultants' Services and Terms of Reference 6. Cost Estimate 7. Estimated Schedule of Disbursement 8. Operation and Maintenance 9. Cropped Area, Yields, Production and Values 10. Rate of Return to the Economy FIGURES 1. Construction Schedule 2. Outline Organization Chart of Ministry of Agriculture and Irrigation 3. Project Organization Chart MAPS 1. Location 2. Project Area 3. Schematic Plan of the Works  AFGHANISTAN KHANABAD IRRIGATION PROJECT SUMMARY AND CONCLUSIONS i. The existing irrigation system in the Khanabad valley of the Province of Kunduz in northeastern Afghanistan, like the other traditional systems found in fertile valleys throughout Afghanistan, consists of loose- stone structures to divert water from the river into ungated canals with brushwood drops and checks controlling the flow through the canals to pri- mitive farm turnouts. During periods of high river flows, far too much water enters the canals breaching their banks and causing floods in the valley. Several times a year, diversion structures are washed away and inade- quate flows enter the canals, causing water shortages. Even single cropping is risky while double cropping is possible only in limited areas in the most favorable locations. The Royal Gov~trnment of Afghanistan therefore requested IDA assistance in the modernization of the system to provide better control and utilization of water, the limiting resource in the valley. ii. The project, covering a net area of 30,000 ha, consists of the first phase of a program for modernization of an existing irrigation system. Project works would include the construction of a diversion weir in the river; construction of main and link canals with control structures; river training works; provision of cross drainage; construction of control struc- tures in one existing canal as a demonstration of modern water control and management; provision of bridges and culverts to improve village roads; and establishment of an operation and maintenance organization with necessary facilities and equipment. It would also include provision of consulting services for civil works, agriculture extension and preparation of a subse- quent phase. The project would take about three and a half years to com- plete. iii. A new department would be established in the Ministry of Agri- culture and Irrigation to execute, operate and maintain the project. The Department would comprise five divisions and would be headed by a President assisted by consultants. After project works are completed, the Department would continue to operate and maintain the irrigation system and promote agriculture development. iv. The civil works would be carried out by prequalified contractors on the basis of international competitive bidding. v. The total project cost would be about US$6.0 million equivalent, of which US$3.0 million would be in foreign exchange. The Association would provide US$4.7 million equivalent, (78% of project cost) of which about 36% would be for local currency financing. vi. At full development, the project would increase annual produc- tion of the main crops; rice (paddy), 13,000 m tons; wheat 11,400 m tons;  - ii - and seed cotton, 3,300 m tons. Gross value of production would be in- creased by US$4.3 million equivalent and there would be a net foreign ex- change savings of US$2.6 million equivalent per year. Full recovery of operation and maintenance expenditures and capital investment would be ob- tained from beneficiaries. The income of farmers with an average size holding of 6 ha would be increased from US$792 to US$1134 for an owner- cultivator and from US$264 to US$396 for a tenant-cultivator. This provides adequate incentives. The project's overall rate of return to the economy is estimated at 18%. vii. With the assurances obtained during negotiations, the project is suitable for an IDA Credit of US$4.7 million on standard terms. The borrower would be the Royal Government of Afghanistan.  AFGHANISTAN KHANABAD IRRIGATION PROJECT I. INTRODUCTION 1.01 The Royal Government of Afghanistan (RGA) has requested an IDA Credit of US$4.7 million equivalent to assist in financing an irrigation project in the Khanabad river valley in the Province of Kunduz (Map 1). The project would modernize an existing irrigation system to provide better water control, prevent flooding the valley during peak flow seasons and relieve water shortages during the dry seasons. It would include a feasibility study for improvement of internal water control and drainage, which could be the subject of a subsequent phase. 1.02 The Khanabad Irrigation Project was identified in 1966 by SOGREAH (France), a consulting firm retained by the RGA under a technical assistance grant from the IBRD for a study of the land and water resources of the Kun- duz-Khanabad river basins. A feasibility report, financed by UNDP with FAO as executing agency, was completed by Development and Resources Corporation (DRC, USA) in July 1970. The report proposed the development of 14,000 ha of land in the valley currently under irrigation from the Khanabad and 4,500 ha of currently non-irrigated lands on the Esan Top terrace. 1.03 An FAO/IBRD Cooperative Program mission led by Mr. D.E. Campbell visited Kabul in August 1970 to review and modify the DRC proposal with RGA. The revised version established the basis for the Credit request; it included the development of a larger area in the Khanabad valley and the establishment of a 250 ha pilot development farm to determine the technical feasibility and economic viability of irrigating the very low density loess (wind deposited) soils of the Esan Top terrace. These soils, about 30 m deep, subside nearly 2 m when irrigated by gravity for only a few days. The RGA, therefore, agreed during appraisal to exclude the pilot farm from the proposed project and instead to request UNDP assistance, since the pro- posed studies are of a preinvestment nature. 1.04 The Asian Development Bank (ADB) has recently financed two irrigation projects, Gawargan and Chardarrah (Map 1), the latter adjoining the present project area but drawing water from the Kunduz river. Aspects of common interest were discussed with ADB staff, both in Afghanistan and in Manila, and a regular exchange of views arranged. 1.05 The project was appraised by Messrs. K. Myint, K. Pranich, H.J. Tennent (IDA) and Messrs. M. Raczynski and T.N. Jewitt (Consultants), who visited Afghanistan in October/November 1970. This report is based on reports prepared by SOGREAH, the feasibility study conducted by DRC and the report of the FAO/IBRD Cooperative Program, and on the findings of the IDA appraisal mission. The mission gave particular attention to the institu- tional arrangements necessary for effective organization and management of the project.  -2- 1.06 This would be the second agricultural project in Afghanistan re- ceiving Bank Group support - the first being an IDA Credit of US$5 million for an Agricultural Development Bank project signed in June 1970 (202-AF), and declared effective on December 13, 1970. II. BACKGROUND 2.01 Afghanistan, a landlocked country in Central Asia bounded by USSR, China (mainland), Pakistan and Iran (Map 1), covers an area of about 650,000 km2, most of which (80%) is occupied by mountains and desert. No population census has been taken but the population in 1970 is estimated at 17 million, including about 2.5 million nomads, with a growth rate of about 2.5% per annum. Statistical information -- especially on national accounts -- is poor and the data in this chapter represent estimates. 2.02 About 14 million ha of the total land area of Afghanistan are es- timated to be arable, but only 3.8 million ha are actually cultivated, of which about 66% (2.5 million ha) is irrigated. Foodgrains (wheat, barley, rice and maize) occupy 90% of the crop area, with wheat accounting for about 60% of the total grain production. Cotton is the main cash crop for both export and domestic markets and sugar beets are important in import substi- tution. Livestock contributes about 9% to Gross Domestic Product (GDP) as compared to 42% for crop production. 2.03 During the first two Five-Year Plans (1956-57 to 1960-61 and 1962-63 to 1966-67) transport, communications, industry and mining were given first place in the allocation of limited capital resources. In the agri- cultural sector, emphasis was placed on two major, slow-maturing schemes - the Helmand/Arghandab and the Nangahar projects - and research, extension and provision for farm inputs received low priority. Between 1965 and 1969, GDP increased by about 2% per annum to US$760 million at constant prices, but agricultural production, which accounts for some 51% of GDP and supports about 80% of the population, grew by only about 1.1% and thus failed to keep pace with population growth. There is, therefore, a growing food shortage. Aid-financed wheat imports have reached a level of 100-150,000 tons per year while tea, sugar and other foodstuffs account for 20% of com- mercial imports. 2.04 Export earnings 1/ from agricultural products averaged about US$70 million, 85% of total exports, in the five years to 1968-69. Fruit, fresh and processed, has become the major export earner while livestock products such as Karakul lamb pelts and wool account for 25% of earnings. Production of cotton - an export and import substitution crop - fell from 110,000 m tons in 1964 to 60,000 tons in 1966-67 because of farm price policies which created an unfavorable trend of relative prices and led to cotton land being switched to foodgrains and other crops. To avert further decline in cotton 1/ From recorded exports.  - 3 - production, Government raised the guaranteed price to farmers and also raised, for cotton exporters, the fixed surrender rate of Af 45 to the dollar (which it had maintained until 1967) to the present rate of Af 80. These measures have resulted in increasing cotton production up to 90,000 tons in 1970 - a level still lower than that attained in 1964. Production of beet sugar, another import substitute, and other crops is stagnant or, at best, barely keeping pace with population growth. 2.05 During the current Third Five-Year Plan (1967-68 to 1971-72) and in agricultural projections for the Fourth Plan (1972-73 to 1976-77) em- phasis has been placed on achieving self-sufficiency in foodgrains and on expansion of export crops and livestock. A key to this strategy is modern- ization of the traditional irrigation systems found in fertile valleys throughout Afghanistan. Typically, these systems rely on hand-made, loose cobble (stone) structures to divert water from mountain rivers into ungated canals with brushwood drops and checks controlling the flow through the canals to primitive farm turnouts. When the flow in the rivers - which are fed by melting snow rather than rain - increases, uncontrolled diversions lead to flooding; when the flood subsides, the simple structures are inade- quate to divert water from the rivers into the canals. Even single cropping (usually rice) is risky; double cropping (wheat after rice) is possible only in the most favored locations, although many farmers plant a second crop an the off-chance that the season will be favorable. 2.06 Essentially, modernization of these traditional systems involves construction of permanent diversion weirs which will not be destroyed during peak flows and suitable control structures in the canals. The Agri- cultural Development Bank, with assistance from IDA Credit 202-AF, provides credit to farmers for construction of control works on minor streams. How- ever, harnessing the irrigation potential of rivers such as the Kunduz and Khanabad is beyond the resources of private entrepreneurs. The recent ADB loan (para 1.04) will enable RGA to construct two permanent diversions on the Kunduz river. The present project would provide for a permanent diversion on the Khanabad and other improvements which would support Afgha- nistan's effort to increase production of foodgrains - rice and wheat - with smaller increases in cotton production. III. THE PROJECT AREA General 3.01 The project, located in the Khanabad valley of the Province of Kunduz in northeastern Afghanistan, covers a net area of about 30,000 ha, 26,000 ha on the left bank and 4,000 ha on the right bank (Map 2). It extends from Khanabad town in the east almost to the confluence of Khanabad and Kunduz rivers in the west (Map 2) and includes two major towns, Khanabad (population 12,000) and Kunduz (the provincial capital, population 18,000).  -.4- Climate 3.02 The climate is continental with a mean maximum temperature in July, the hottest month of 39