Announcement of Nineteen Million US Dollars Financing for the Aurora-Penaranda Irrigation Project, Philippines on May 2, 1974

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPl\fENT ASSOCIATION 1818 H STREET, N.W. WASHINGTON D.C.20433 TELEPHONE, EXECUTIVE 3-6360 Bank Press Release No. 74/25 Subject: $19 million financing for the IDA Press Rele:1se No. 74/19 Aurora-Penaranda irrigation project, May 2, 1974 Philippines The World Bank and its affiliate, the International Development Association (IDA), have approved financing totaling $19 million for an irrigation development and rehabilitation project in the island of Luzon, Philippines. The Bank is ex- tending a loan of $9.5 million and IDA is providing a credit in the same amotmt. The project will divert water from the Aurora river basin through a ridge into the Pampanga river basin and the Penaranda irrigation system. The water will be routed to the Pantabangan reservoir of the upper Pampanga river irrigation project, for which the Bank approved a loan of $34 million in 1969. At full "development, the diverted water will provide year-round irrigation • to approximately 25,300 hectares (62,490 acres) of rice land, growing two rice crops a year. It is estimated that rice production in the area will increase from 82,000 tons to 202,000 tons a year. The project also includes preparation of an irrigation study for Central Luzon, to identify potential irrigation projects and formulate a plan for their development. The Central Luzon region covers 1.8 million hectares (4.5 million acres) in 11 provinces; approximately 1.6 million hectares (4 million acres) are in five provinces with a population of 2.3 million. There has been good progress in agrarian reform in the region. Besides helping the Philippines attain self-sufficiency in rice and strengthening the country's balance of payments, the project is also expected to raise rural incomes. Some 10,000 families, averaging six members per family, live in the project area. Based on the area's average farm size of 2.5 hectares (6.2 acres), present net farm incomes of between $270 to $530, depending on whether the land is rainfed or irrigated, are expected to rise at full project development to $1,020 for a leasehold tenant. Should such a farmer acquire his land under the Government's land reform program, his income is expected to rise to $1,260 a year. The project will be executed over a five-year period by the Upper Pampanga River Project section of the National Irrigation Administration. This section will also be responsible for carrying out the Central Luzon irrigation study. The Bank loan is being ma.de to the Republic of the Philippines for a tenn of • 25 years, including seven years of grace, at 7-1/4% interest per annum. The IDA credit will be for a term of 50 years, including 10 years of grace; it is interest free but will carry a charge of 3/4 of 1% per annum to cover IDA's administrative expenses. Note: - 0 - Money figures are expressed in U.S. dollar equivalents.  • May 2, 1974 TECHNICAL DATA PROJECT: Aurora-Penaranda Irrigation Project COUNTRY: Philippines TOTAL COST: $40 million BANK/IDA. FINANCING: Bank loan of $9.5 million, 25 years, including 7 years of grace, with 7-1/4% interest; IDA credit of $9.5 million, 50 years, including 10 years of grace, interest free but with a service charge of 3/4 of 1% a year to cover IDA's administrative expenses. IMPLEMENTING ORGANIZATION: Upper Pampanga River Project Section. of the National Irrigation Administration, Quezon City, Philippines PROJECT DESCRIPTION: Project consists of two elements: 1) Diversion of water from Aurora river basin through a ridge into the Pampanga river basin and the Penaranda irrigation system; water will be transferred from the Aurora b a s . by means of two diversion dams on the Diayo and Canili rivers and a diver- sion channel routing the water into the Pantabangan reservoir of the Upper Pampanga River Irrigation Project; 2) A comprehensive study of the water and land resources of the Central Luzon Basin with the objective of identifying potential irrigation projects and formulating a plan for their development taking into account other beneficial water resources. PROCUREMENT: 1) Civil works for diversion of water from Aurora basin (including two dams and diversion channels) will be let as one contract subject to international competitive bidding. Works on Penaranda Service area consisting of many diverse items scattered over a large area will not be suitable for international competitive bidding. Some of thes,~ works (not more than 20% of total cost) will be carried out by the National Irrigation Adm in is tra ti.on on force account; (2) equipment and vehicles for project construction, operation maintenance and for the Central Luzon Irrigation Development Study will be procured after international ·competitive bidding. Procurement of off-shelf items costing less than $10,000 each whose aggregate will not exceed $100,000 will 'he exempt from :in:temational competitive bidding. Domestic manufactures will be allowed a preference limited to 15% of the c.i.f. price of imported goods.· CONS.utTANTS; Enginee·ring Consultants, Inc., and Engineering Development Corpo·ration, in the Philippines, were appointed by the National Irrigation Administration to assist with the feasibility studies. Consultants will supervise the implementation of the project and conduct the Central Luzon Irrigation • Development studies. ESTIMATED COMPLETION DATE: 1979