Document of The World Bank HL O FOR OFFICIAL USE ONLY Report No. 4099-IN STAFF APPRAISAL REPORT INDIA HARYANA IRRIGATION II PROJECT January 5, 1983 South Asia Projects Department Irrigation II Division 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 US$1.00 = Rupees (Rs) 9.00 1/ WEIGHTS AND MEASIJRES (METRIC SYSTEM) 2/ 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) = 2.47 acres (ac) 1 million cubic meters (Mm3) = 810 acre-feet (ac-ft) 1 milion acre-feet (MAF) = 1,235 Mm 1 thousand million cubic feet (TMC) = 28.32 M cubic meters 1 cubic foot per second (cfs or cusec) = 0.028 cSbic meters per second (cumec) 1 cfs = 102.9 m /hr 1 ton = 1,000 kilograms (kg) FISCAL YEAR GOI and GOH - April 1 - March 31 NABARD, Cooperatives - July 1 - June 30 Commercial Banks - January 1 - December 31 1/ The US Dollar/Rupee exchange rate is subject to change. Conversions in this report have been made at US$1.00 to Rs 9.0, which represents the projected exchange rate over the disbursement period. 2/ The Metric System has been used in most cases. However, India is still in the process of transition to the metric system; non-metric units are still widely used, and were also used in this report in cases in which a conversion to the metric system may confuse the reader. FOR OFFICIAL USE ONLY ABBREVIATIONS AND ACRONYMS ARDC - Agriculture Refinance and Development Corporation ATW - Augmentation Tubewell B&R - Bridges and Roads Branch of PWD CAD - Command Area Development CADA - Command Area Development Authority CCA - Cultivable Command Area ERR - Economic Rate of Return FSL - Full Supply Level GOH - Government of Haryana GOI - Government of India HAU - Haryana Agricultural University HSMITC - Haryana State Minor Irrigation (Tubewells) Corporation ICB - International Competitive Bidding ID - Irrigation Department IDA - International Development Association LCB - Local Competitive Bidding M&E - Monitoring and Evaluation MAF - Million acre-feet NABARD - National Bank for Agriculture and Rural Development O&M - Operation. and Maintenance PH - Public Health Branch of PWD P&T - Post and Telegraphs Department PWD - Public Works Department R&D - Research and Development RDTU - Research and Development and Training Unit SCF - Standard Conversion Factor SDP - State Domestic Product SE - Superintending Engineer SEB - State Electricity Board SIA - Sprinkler Irrigation Association SMC - Shareholders Maintenance Committee SPU - Special Project Unit SYL - Sutlej-Yamuna Link Canal UNDP - United Nations Development Program WUA - Water Users Association WYC - Western Yamuna Canal GLOSSARY baira - pearl millet gram - chick pea chak - watercourse command area kharif - wet season; early May-early October rabi - dry season; mid-October-late April 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. I INDIA HARYANA IRRIGATION II PROJECT STAFF APPRAISAL REPORT TABLE OF CONTENTS Page No. I. INTRODUCTION AND BACKGROUND ............................ 1 Introduction .....................1................. Agriculture and Irrigation in India ............... 1 The State of Haryana ...... .............. 3 Agriculture and Irrigation in Haryana ............. 3 Agricuilture .................................... 3 Surface Irrigation .................... 4 Groundwater ................................ 5 The First Haryana Irrigation Project .............. 6 Constraints to Irrigation Performance in Haryana .. 10 IL. PROJECT AREA .......................................... 11 Physical Features ....... . .......................... 11 Climate and Soils .. 11 Farmers and Land Holdings .......................... 12 Crops and Yields ................................... 12 Agricultural Supporting Services ......... ......... 12 III. THE PROJECT ........................................... 13 Project Objectives and Major Features ............. 13 Canal Modernization ..... .......................... 14 Watercourse Modernization .. 19 Augmentation Tubewells .............. .. ............ 23 Sprinkler Irrigation ............... .. ............. 25 Village Water Supply .............................. 26 Village Access Roads .............. .. .............. 27 Training ....................... ................... 28 Research and Development and Technical Services ... 28 Project Implementation ............................ 31 This report is based on the findings of an Appraisal Mission which visited India in May, 1982 and comprised Messrs. R. Reidinger, Y.K. Choi, G. Corey, H. Plusquellec and Ms. N. Pinto (IBRD), and Messrs. W. Barber, T. Wickham, and S.G.V. Ramanan (Consultants). Messrs. J. Cunningham and D.D. Taneja (IBRD) assisted the Mission in the field. Word processing was done by Mrs. 4. Aniba. Page No. IV. COST ESTIMlATES, FINANCING AND DISBURSEMENTS ... ....... 32 Project Cost Estimates ..... ....................... 32 Financing ................... 33 Procurement ...... ............... .................. 33 Disbursements ..................................... 34 Accounts and Audits ............... .. .............. 35 V. ORGANIZATION AND MANAGEMENT ........................... 36 General ........................................... 36 Coordination ..................... ................. 36 Project Management .................. ............ 36 Operation and Maintenance .& ............. ......... 40 Quality Control ................................. 42 Monitoring and Evaluation ............ .. ........... 42 VI. AGRICULTURAL PRODUCTION AND BENEFITS .................. 43 Agricultural Impact ............... .. .............. 43 Market Prospects .... 47 Financial Prices and Crop Budgets ......... ........ 47 Water Charges and Cost Recovery . . 47 Repayment for Watercourse Modernization ........... 50 VII. ECONOMIC ANALYSIS AND JUSTIFICATION .................. 51 General ........................................... 51 Benefits and Beneficiaries ........... .. ........... 51 Economic Analysis Assumptions .......... .. ......... 52 Economic Rate of Return for the Project ........... 52 Sensitivity Analysis and Risks . . 54 Environmental Impact .............. .. .............. 55 VIII. AGREEMENTS REACHED AND RECOMM!ENDATIONS .... .......... 55 -iii- Tables 1. Seasonal Surface Irrigation Supply 2. Estimate of Annual Groundwater Recharge and Use 3. Achievement under Haryana Irrigation I Project 4. Climatic Data 5. Crop Yields, Present and Proiected Cropping Patterns 6. Proposed Canal Modernization Program 7. List of Proposed Canal Radio Stations 8. Project Cost Estimates (Tables 8a-81) 9. Estimated Financing Plan 10. Procurement Schedules (Tables lOa-lOd) 11. Estimated Implementation Schedule 12. Estimated Schedule of Disbursement 13. Allocation of the Credit 14. Present Irrigated Area and Estimated Water Use 15. Changes in Irrigated Area 16. Crop Area Changes 17. Incremental Production and Value 18. Economic and Financial Prices 19. Financial Crop Budgets 20. Crop Input Requirements 21. Revenue and Expenditure for Bhakra and WYC Systems 22. Estimated Financial Farm Budgets 23. Estimated Farm Budgets & Project Rent at Full Development 24. Estimated Project Rent and Cost Recovery 25. Incremental Costs and Benefits (Tables 25a-25e) ANNEXES: 1. Proposed Research and Development Studies and Experiments 2. List of Documents in the Project File -iv- CHARTS: Relevant Departments of tlhe Government of Haryana (24085) Haryana Irrigation Department Organization Chart (24086) HIaryana State Minor Irrigation (Tubewells) Corporation (24087) Details Showing Single and Double Tile Lining (24096) Lining of Existing Channel versus Construction of Parallel Channel (24098) Typical Cross-Section of Lined Watercourse (24082) Improved Turnout (Nukka) for Watercourse Modernization (24083) Canal Regulation Pilot Proiect (24084) Project Implementation Schedule (24097) MAPS: Canal Command Areas (1655:2) Agro-climatic Zones and Groundwater Quality (16553) Proiect Area and Irrigation Components (16554) Typical Watercourse Commanld (16555) INDIA HARYANA IRRIGATION II PROJECT I. INTRODUCTION AND BACKGROUND Introduction 1.01 The major constraint to increased crop production in the State of Haryana is limited irrigation supplies. Located in the northwest of India, Haryana is mostly arid or semi-arid and depends heavily on irrigation. Avail- able surface water resources have been fully developed or committed. Groundwater development has been carried out aggressively by both the private and public sector and is now nearing full exploitation. Further expansion of agricultural production therefore will require improved efficiency and per- formance of existing irrigation systems. The proposed Haryana Irrigation II project would focus on this requirement. 1.02 The Government of India (GOI) has requested IDA assistance to finance the second four-year time-slice of the on-going first Haryana Irrigation Project (Cr. 843-IN, referred to here as Haryana I) which is expected to be completed by February 28, 1983. The proposed Haryana Irriga- tion II Project (Haryana II) would finance primarily canal modernization, watercourse modernization, augmentation tubewells, development of sprinkler irrigation, and training and research all aimed at increasing the efficiency and performance of the State's canal irrigation systems. The project would also include investment in village water supply and a small village access roads component. Haryana I has been well managed and the Government of Haryana (GOH) has demonstrated strong implementation capabilities. Haryana II would build on the experience and achievements of Haryana I, aiming in particular at intensification of the irrigation modernization process. The overall objective would be to improve the quality of canal irrigation service for nearly 2.3 M ha of irrigated command area covering most of the State. The project was prepared by GOH and the Project Preparation Cell in the Central Water Commission of GOI. Agriculture and Irrigation in India 1.03 India has a population of about 684 M which is growing at an annual rate of about 2.1%. Since 1960, per capita income grew at an annual rate of 1.2% and reached US$240 in 1980. Although the average per capita income has increased and access to public services has improved, there has in general been little change in the incomes of the vast masses of urban and rural poor, who comprise about 50% of the total population. Accordingly, GOI's develop- ment plans give priority to alleviating poverty, increasing production and incomes, and creating productive employment, especially in rural areas. - 2 - 1.04 Agriculture is the dominant sector of the Indian economy and con- tributes about 40% of GNP. It engages about 70% of the labor force and provides the base for about 45% of India's exports. GOI has devoted con- siderable resources to agricultural development, especially irrigation. 1.05 Irrigation development has been given a very high priority since the beginning of the planning era in 1950. Some 57 M ha were developed by 1980/81, of which about 58% receive water from surface sources and 42% from groundwater, and in recent years, irrigated area has been expanding by about 2-3 M ha annually. It is estimated that the increased production resulting from investment in irrigation has accounted for at least three-quarters of agricultural growth since 1960. Presently, irrigated agriculture accounts for about 60% of all agricultural output in India. However, production levels in much of the irrigated area, especially the area irrigated from surface sources, is considerably lower than the potential for a number of reasons. 1.06 At independence, Indian irrigation systems commanded some 23 M ha. Many of these systems were planned to provide famine protection, had limited or no storage and did not have sufficient water control structures and capability. Water supply from such systems was largely unreliable. In addition, irrigation projects of the early 1960s typically involved a storage or diversion dam and main conveyance system only, leaving to the farmers construction of the distribution system from project outlets to individual fields. As some of these outlets served areas in excess of 100 or 200 ha, conveyance of water to the farmgate required construction of minor channel networks that were often several kiLlometers long. In most projects, farmers were unable to finance or organize construction of the minor channels without outside assistance, which was rareLy available, and this resulted in con- siderable delays in the utilization of water from the irrigation potential created. 1.07 In the early 1970s, the concept of the Command Area Development Authority (CADA) evolved. The main objectives of CADA were to coordinate the activities of the State Irrigation and Agriculture Departments and to assist farmers in obtaining institutional credit for the construction of the minor systems and for land development. The results of this approach have been below expectations. Coordinaltion was not entirely effective, and the attempt to finance on-farm development through institutional credit (generally refinanced through the Agricultural Refinance and Development Corporation, or ARDC 1/) was generally unsuccessful, because farmers had no confidence in the reliability of water supply and were therefore reluctant to undertake loan obligations, and because no facility or framework for effec- tive group action had been developed in the irrigation sector. This experience indicates that: (a) more emphasis is required on improving the 1/ ARDC ceased to exist as of July 12, 1982. The refinance functions and obligations of ARDC were assumed by the National Bank for Agriculture and Rural Development (NABARD), a COI undertaking which was formally con- stituted on the above date. - 3 - efficiency and reliability of the conveyance system from the water source to the irrigation outlets; (b) Government should assume greater responsibility for conveying water to an outlet closer to the farmgate in order to facilitate construction of watercourses conveying water to each individual field; and (c) Government should promote the development of effective farmer involvement by providing the necessary mechanism, framework and support for efficient group action and cooperation among irrigators. There are clear indications that when the farmers are fully confident of their water supply, increased cooperation is encouraged, and they will undertake investments in modern inputs and make full use of the water supplied. These concepts have been used in the design of the proposed proiect. The State of Haryana 1.08 Haryana has a population of about 12.8 M. In 1977/78, the State's Domestic Product reached Rs 18,800 M, and per capita income at nearly Rs 1,500 in 1977/78 is one of the highest in India and has been growing at a rate of about 12% annually in recent years. The State has made significant development progress since it split from the Punjab in 1966, and continues to progress rapidly in expanding its economic base and providing access to public services. Today, for example, all villages have electricity, most villages have all-weather access roads, and most farmers have access to at least some irrigation. About 78% of the population is employed in the rural sector, and average farm family size is six. Agriculture is the dominant sector in the Haryana economy, and Haryana is regarded as an agriculturally advanced State. Because the state is generally arid and semi-arid, irriga- tion is essential for high agricultural production, and the State has invested considerable resources in irrigation as the basis to promote agricultural growth. Today, among the States of India, Haryana ranks second after the Punjab in terms of area irrigated as a proportion of total cropped area. Agriculture and Irrigation in Haryana 1.09 Agriculture. Haryana covers an area of about 4.4 M ha, of which 3.9 M ha is arable. Of this about 3.6 M ha or 92% (the total of two seasons) is sown with crops and the balance remains fallow mainly due to lack of water. About 75% of the arable area totalling some 2.9 M ha of cultivable command area (CCA) is served by irrigation canals although only about 55% (the total of two seasons) of the CCA is actually irrigated in a year because of insufficient water supplies available for the canal systems. Haryana farmers are generally progressive, as indicated by the high levels of fer- tilizer use in the State and the high percentage of area of major crops sown in high-yielding varieties. Yields of most major crops, therefore, are high, and average foodgrain yields in Haryana are some 30-40% higher than the all-India average. The main foodgrains are bajra or pearl millet (about 35% of the area), wheat (25%) gram or chick pea (19%), and paddy (7%). Cotton is the major non-food cash crop, accounting for 13% of the sown area. The present cropping intensity in Haryana is estimated overall at 140-145%. As a result of the increase in agricultural production, the State which had deficit in foodgrains before 1966 was now surplus in foodgrains. In 1980/81, Ilaryana contributed about 1.7 M tons (out of total production of 6.1 M tons) of wheat and rice to the GOI foodgrain procurement pool. 1.10 In spite of rapid progress made in agriculture since its partition from Puniab in 1966, the State is constrained by limited availability of agricultural lands which can be served by gravity canals, and especially by lack of surface water and groundwater resources for further agricultural and irrigation development. Therefore, the main potential source of agricultural growth depends upon the better use of available irrigation water, increase in cropping intensity, and application of modern farm technology to raise yields per unit of area and production per unit of water. Improvement in the efficiency and performance of canal irrigation is an essential requirement for continued agricultural growth in the State, and is the primary objective of the proposed project. 1.11 Surface Irrigation. Canal irrigation in Haryana comprises mainly the vast Bhakra and Western Yamuna Canal (WYC) systems covering much of the State, plus the relatively new pump-lift canal systems in the western and southwest regions which are served from the WYC system and the mainly non-perennial Agra/Gurgaon canal systems in the south (Map 16552). Bhakra and WYC, the two major gravity systems in this State, provide irrigation to some 63% of the cropped area or about 1.0 M ha and 0.7 3M ha respectively. Averaged together, the two systems supply about 5700 m per irrigated hectare each year (Table 1). The Bhakra Main Canal, completed in the late 1950s, is supplied 3from the large Bhakra Dam, which was completed in 1963 with some 7,200 Mm of storage on the Sutlel River in the Indus River Basin. The Narwana Branch Canal from the Bhakra Main Canal links the Bhakra and WYC systems. NWYC, constructed on its present alignment in the 1820s and first built by the moghul emperor Feroz Shah Tuglag in about 1355 and later renovated by Akbar and Shahjehan in the 1500s and 1600s, diverts water at Tajewala from the upper Yamuna River which is a tributary of the Ganga River. A second diversion from the Yamuna River at Okhla below Delhi supplies the Agra/Gurgaon Canal system which serves a smaller area in the southeastern corner of the State with mainly non-perennial water supplies. 1.12 The Bhakra-Nangal faci:Lities on the Sutlej River, which supply Bhakra canals in Haryana, are a major source of irrigation and power in northwest India, serving Punjab, Haryana, and Rajasthan (Map 16552). Below the Bhakra Dam is the sma1l Nangal Dam and reservoir used for balancing diurnal variations in water releases from Bhakra; the hydel channel which supplies Bhakra canals in Haryana offtakes at Nangal. Under the Sutlej, Beas and Ravi Masterplan (non-Bank), 1the Beas-Sutlej Link canal has been con- structed to supply water to Bhakra from the Beas River which is controlled by the Pong Dam. The Ravi River would be controlled by the proposed Thein Dam and linked to the Beas via the Madhopur-Beas Link canal (non-project). The Masterplan is a joint undertaking of GOI and the States concerned, and the facilities are managed under the auspices of GOI by the Bhakra-Beas Manage- ment Board (BBMB) located in Chandigarh. 1.13 The State's only remaining unutilized surface water source is its share of the Ravi River water allocated to the State based on the division of Indus River waters between India and Pakistan under the Indus Waters Treaty - 5 - of 1960. The Sutlej-Yamuna Link (SYL) Canal, now under construction and due for completion in 1984, will augment canal water supplies in Haryana by nearly 50%. It will benefit primarily the WYC command, particularly the new pump-lift areas, which are served from the tail reaches of the WYC system and are acutely short of water, and to a lesser extent the Bhakra and Gurgaon systems. T e pump-lift command areas, comprising the Sewani, Jui, Loharu, and Jawahar Lal Nehru (JLN) schemes, total over 450,000 ha. Canal construc- tion is complete for about 210,000 ha in the Sewani, Jui and Loharu commands. However, in these areas construction of watercourses and on-farm development work have proceeded relatively slowly due primarily to limited water availability, extremely rugged terrain, and sandy soils. 1.14 The CCA served by the various canal systems in Haryana and the net area irrigated by each averaged over last five years total some 2.9 M ha and 1.6 M ha, respectively, as follows: Canal CCA Irrigated Area System ha ha Bhakra 1,166,000 871,000 WYC 1,085,000 652,000 Jui Lift 30,000 12,000 Sewani Lift /a 72,000 14,000 Loharu Lift 7@ 125,000 11,000 JLN Lift 227,000 18,000 Agra 61,000 32,000 Gurgaon 131,000 15,000 Total 2,897,000 1,625,000 /a Earlier called BNC scheme. /b Earlier called Indira Gandhi scheme. 1.15 Groundwater. Groundwater development in Haryana has progressed rapidly in the last fifteen years, particularly in the private sector. Cur- rently about 223,000 private shallow tubewells, 34,500 open wells with pump sets, and 1,560 public direct irrigation tubewells serve about 1.4 M ha. Bank Group support has been available for private tubewell development through the Haryana Agricultural Credit Project (Cr. 249-IN) which was fully disbursed in the early 1970s and also through the nationwide Agricultural Refinance and Development Corporation (ARDC) Projects (Cr. 540-IN, Cr. 715-IN, Cr. 947-IN and Cr. 1209-IN Ln. 2995-IN). Present utilization of fresh (high to marginal quality) groundwater is estimated statewide at about 64% of average recharge, but in certain fresh groundwater areas, resources are more highly committed (Table 2). However, there still remains con- siderable scope for public sector development in some areas of fresh and marginal groundwater quality, and in brackish water areas provided the lower quality brackish groundwater can be diluted with canal water supplies. Groundwater will be developed under the project to augment canal water sup- plies in several areas where uncommitted groundwater supplies are available. - 6 - 1.16 Groundwater quantity and quality varies considerably through the State (Map 16553). In the eastern regions of the State, fresh groundwater supplies are generally available at: depths of about 3-6 m. Private exploita- tion there has been heavy, and in some locations water table levels have adjusted to modified abstraction patterns. In the western interior basin of the State, groundwater is generally deeper, perhaps 15 to 20 m on average, and is generally brackish or saline except where freshwater lenses have developed in the vicinity of larger elements of the surface distribution system. Due to the increase in canal irrigation in the western areas par- ticularly during the last 20 years, with high seepage losses from unlined canals and deep percolation from farmers' fields, the groundwater balance has been disturbed with increased recharge, and saline groundwater levels have been rising at an average rate in some areas of about 0.5 m per year. Brack- ish groundwater areas in eastern and western regions account for about 60% of the total CCA of the Bhakra and WYC systems. Investments under the proposed project will address this matter primarily through efforts to increase the efficiency of water delivery and use under canal irrigation, and through research and investigation to provide a basis for recommending and designing remedial measures considering both the impact of modernization efforts and additional water supplies expected from the SYL canal. The First Haryana Irrigation Projecat 1.17 Background and Summary of Progress. The first Haryana Irrigation Project (Cr. 843-IN) has assisted the State to modernize about 30% of its canal irrigation network, develop supplemental groundwater to augment canal surface water supplies, and promote the development of irrigation in pump-lift areas. It has also helped accelerate construction of associated rural infrastructure comprising village water supply, rural roads and agricultural markets. The project was appraised by IDA in December, 1977. Based on estimated project costs of US$222 M, the project was financed by an IDA credit of US$111 M. The project became effective December 14, 1978 with an expected completion date of August 31, 1982 and closing date of August 31, 1983. 1.18 Progress on most project components has been satisfactory (Table 3). It is expected that all physical appraisal targets will be achieved by February 28, 1983 except for watercourse lining, markets, and land levelling which were financed as credit items. These components suffered start-up delays while working out a methodology for sanctioning of credit for each sub-project by ARDC. In the case of watercourse lining and markets, no construction was done during the first 4-6 months of the project, putting these components behind schedule from the start. Subsequent shortages of cement and coal further delayed implementation. The land levelling component for the pump-lift areas never seriously started because most farmers preferred to use their own resources for land levelling rather than institu- tional credit. 1.19 In order to complete all expenditures under the project by February 28, 1983, some funds may need to be reallocated under the credit from watercourse lining, land levelling and tubewell electrification to canal modernization work to cover cost overruns under canal modernization due to - 7 - higher than expected costs for cement and lining tile. In addition, excess funds from the agricultural markets component may need to be reallocated to village water supply schemes. All such changes would require IDA approval. The markets component would be completed under alternative arrangements by GOH using readily available market committee funds; markets are not included in the proposed second-phase Haryana II project. Land levelling has also been excluded from Haryana II because of lack of farmer interest during Haryana I. The shortfall in watercourse lining has been taken into account in designing Haryana II. 1.20 Implementation Organization. Under Haryana I, implementation of canal lining works was the responsibility of the GOH Irrigation Department (ID). The public sector Haryana State Minor Irrigation (Tubewells) Corpora- tion (HSMITC), in practice an arm of ID, had responsibility for watercourse lining and augmentation tubewells. Other components and the agency respon- sible were: land levelling -- Command Area Development (CAD) wing of the Agriculture Department; village water supply -- Public Health (PH) Branch of the Public Works Department (PWD); village access roads -- Buildings and Roads (B&R) Branch of PWD; and agricultural markets -- State Marketing Board and individual market committees. 1.21 Cost Estimates. Estimated project costs totalled Rs 1,909.1 M (US$222.0 M) at appraisal. Unit costs for canal and watercourse lining have been much higher than anticipated at appraisal. During the project period, labor costs rose faster than anticipated, and the cost of lining tiles increased by 100%. As a result, actual costs and disbursements under the canal lining component at project completion will be some 32% over appraisal. However, because of the short-fall in physical achievement under watercourse lining and land levelling and cost savings for tubewell electrification, disbursements for those components will total about 35% less than anticipated. These reductions will roughly match the excess costs for canal lining. Similarly, costs for water supply schemes exceeded appraisal estimates by about 15% due to design modifications and improvements. 1.22 Design Standards and Quality Control. Design standards on all components have complied with the Project Agreement. During the coal shortage some precast concrete slab canal lining was used in place of clay tiles (coal is used to make the burnt clay tiles used in canal lining). In addition, since removal of the cement supply constraint, lining with two layers of cement plaster has been adopted. Several tests have been made to replace the impervious plaster layer with a polythene membrane. This tech- nology is undergoing further tests before adoption on a large scale. 1.23 Quality control has remained excellent throughout the project. Although canal lining is done in existing channels during normal operational canal closures of about 16 days duration, strict quality control has been maintained, and the resulting lining is excellent. To improve the quality of canal lining tiles, ID is installing 5 automatic kilns to make tiles. Both ID and HSMITC established Monitoring and Evaluation Cells under the Haryana I project. These units, although requiring considerable time to develop, have played a key role in gathering and analyzing data regarding quality control. - 8 - 1.24 Implementation Capacity. Appraisal estimates of implementation capacity were accurate for canal lining, augmentation tubewells, water supply schemes and village roads. However, estimates proved somewhat optimistic for watercourse lining, given the unexpectedly long start up period, materials shortages, and cash flow and liquidity constraints faced by HSMITC during the course of implementation. Similarly, the markets and land levell- ing components were not completed on schedule for reasons unrelated to implementation capacity which could not be anticipated at appraisal (para 1.18). Implementation constraints encountered in Haryana I have now been largely resolved and have been considered in the design of Haryana II. 1.25 Issues Considered in Appraisal of Haryana II. Several issues in the appraisal of Haryana II arose from experience with Haryana I, related in particular to the project SCOpE!, transition from Haryana I to Haryana II, and cost recovery for watercourse modernization and O&M of village water supply schemes. Modification in project scope from Haryana I to II are primarily the exclusion of markets and land leveling components from Haryana II (para 1.19). Transition to Haryana II is complicated by the fact that Haryana I was not designed as a time-slice project, although in practice it has been implemented (and viewed by GOH) as a time-slice operation. Transi- tion arrangements are based on completing all expenditures under Haryana I by February 28, 1983, with reallocat:ion as needed among credit categories including unallocated; in general, savings and underspending for watercour- ses, land leveling and tubewells would be reallocated to canal modernization, while underspending on agricultural markets would be reallocated to water supply schemes (paras 1.19 and 1.21). These reallocations will not sig- nificantly affect the productive performance of the project. 1.26 Under Haryana I, cost recovery for watercourse modernization was complicated by the financing arrangements which were directly linked to loan recovery. Watercourse costs were financed through loans to all farmers served by each watercourse. In practice, the loans were actually made to HSMITC which constructed the watercourses on behalf of the farmers served; 80% of the construction cost for each watercourse was financed through institutional credit (refinanced by ARDC) lending to HSMITC, with the remain- ing 20% provided by GOH as a State loan or equity contribution to HSMITC. Farmers were held individually responsible for repayment of the total cost of each watercourse in proportion to their land holding size, with repayments based on amortization over nine years at 10.5% interest excluding one year of grace for the construction period (the same terms as those applied to HSMITC by participating banks); watercourse maintenance work was the responsibility of HSMITC, paid for by the farmers through an annual maintenance charge (2% of the watercourse capital cost) added to the loan amortization payment. Although it was the de facto borrower, HSMITC essentially acted as a credit intermediary. Billing to farmers for loan repayment was done by HSMITC, but - 9 - collection of farmer payments was done by GOH (which also guaranteed repay- ment of the lending banks' loans) through the Revenue Department which handled nonpayment as arrears in land revenue. 1/ 1.27 Under this approach and at GOH initiative, 100% cost recovery for watercourse modernization was the aim. Prior to and early in Haryana I, repayment rates by farmers for watercourse modernization loans were high, exceeding 90%. However, following a severe drought and failure of the 1979 monsoon it became apparent that many farmers, particularly small holders, would not be able to meet their repayment obligations. In addition, GOH considered that watercourse modernization results in a substantial increase in irrigated area and water charge collections, and also that under revised national policies for similar CAD works in other States farmers were not required to repay the full cost. Furthermore, the procedures used appear to have encouraged controversy, in that farmers had to pay for the works in proportion to their land holding size rather than their benefit (unlike water charges which are levied according to area irrigated), and that once a deci- sion was made to improve a watercourse the process was essentially involun- tary for the farmers involved who had little or no role in planning or implementing the works and no option to refuse or modify such investments and loans "on their behalf". GOH therefore decided to modify repayment require- ments, eliminating repayment for farms of 1 ha or less and reducing repayment by 50% for farms larger than 1 ha. These arrangements were intended to be consistent with revised norms for GOI-sponsored CAD programs. Considering all farm sizes together, repayment would average about 45% under this for- mula, with GOH providing the remaining 55% directly to HSMITC. Because of the sensitivity and controversy of this issue, GOH has not effectively enforced any repayment during the last two years, and only in February 1982, made these modifications official; as a result repayment rates during the last two years were negligible. However, GOH has started implementing the new system in the 1982 kharif season and has also strengthened its efforts to recover arrears in repayments. In general, farmers in the project area appear willing to repay following the above terms. 1.28 Under Haryana II, cost recovery for watercourse modernization works would be effected through the Revenue Department of GOH as a direct charge to benefitting farmers, and financing would be through GOH rather than loans to farmers. GOH would recover about 45% (50% from farm holdings of more than 1 ha, and nothing from smallholders of 1 ha or less) of watercourse modern- ization costs from direct beneficiaries over a nine year period at 10.5% interest, plus an annual watercourse maintenance charge (3% of capital costs 1/ The approach of lending to farmers to finance construction of such "com- munity" irrigation works was consistent with standard practice throughout India for CAD programs including watercourse construction at the time Haryana I was appraised. However, the practice has since been modified because of the generally disappointing results obtained. The present practice is to complete watercourse construction down to the 5 to 8 ha block as part of the government system, with the cost financed through the State budget rather than through loans to farmers. -- 10 - in Haryana II), as above. GOH would provide the remaining 55% and ensure that HSMITC receives financing adequate to undertake watercourse modern- ization works according to the project implementation schedule over the four-year project period. 1.29 For village water supply schemes under Haryana I, the present practice, instituted in January 1982, is that individual village panchayats (councils) pay operation and maintenance (O&M) costs up to half their annual revenues. At present this totals about 45% of full O&M costs. GOH will ensure full O&M cost recovery from village panchayats for village water supply schemes under Haryana II. 1.30 Benefits of Haryana I. Both ID and HSMITC now have Monitoring and Evaluation Units. These units have just recently been fully staffed, and only preliminary studies have been completed on the benefits from the various project components. Several of these studies have dealt with effects of canal and watercourse lining. In general, they tend to confirm the benefits of canal lining estimated at appraisal in terms of seepage loss reductions, although results so far indicate that the initial direct benefit in irrigated area increase from watercourse lining may have been slightly overestimated. The studies have also tentatively begun to measure improvements in canal system operational efficiency which were not quantified in the Haryana I appraisal due to lack of data, and have identified changes in agricultural practices reportedly due to increased quantity and reliability of water supplies, such as increased fertilizer use, crop pattern changes and higher yields. The main difficulties so far in documenting project benefits are in measuring the operational benefits from canal and watercourse modernization and lining which may well equal or exceed direct benefits from reduced canal seepage; also, the disaggregation of benefits as to source is difficult because the canal system is undergoing modernization concurrently with normal operations. Estimation of benefits expected from Haryana II take into account the experience of studies under Haryana I. Constraints to Irrigation Performance in Haryana 1.31 The performance of canal irrigation in Haryana generally ranks among the highest in India. Nevertheless, a great potential for enhanced performance remains untapped which can be developed by raising the physical capabilities of the canal systems, and by improving equipment and modifying operational procedures to increase the efficiency of canal system management. Major constraints to improved performance (neglecting Bhakra-Nangal operating procedures) which the project will deal with through investment or R&D activities include the following: (a) canal networks which by design are very extensive and chronic- ally water-short and which in addition incur high seepage losses because channels are unlined; (b) canal regulation technology which is based completely on upstream control and manual operation, resulting in slow response of the system to changing water supply and demand; - 11 - (c) canal communications equipment which is slow and frequently out of order; (d) canal operating procedures using target capacity factors which are not closely related to actual or estimated crop water use, and canal rotational schedules which interact to produce unreliability and uncertainty in water deliveries to farmers; (e) canal administration practices and legislation which do not provide mechanisms and an institutional framework to promote development of effective farmer involvement and participation; and (f) canal operating staff who are competent but generally not trained and oriented in agriculture and crop water requirements. II. PROJECT AREA Physical Features 2.01 The project area stretches north from Delhi about 150 km to the Ghaggar River bordering on Punjab, and west from the Yamuna River about 150 km to the Rajasthan border. It covers the entire command of the Bhakra and WYC systems totalling nearly 2.3 M ha, along with part of the Jui and Sewani pump-lift commands totalling some 69,000 ha on the southwestern side of the area (Map 16554). The project area is nearly 70% level plain, with undulat- ing terrain in the southwestern region where the pump-lift schemes are located. Natural drainage from the interior basin in the middle and western portions of the area is very limited. Climate and Soils 2.02 Climate in the project area is sub-tropical and generally arid in the west and semi-arid in the east (Map 16553). Three distinct seasons exist: the kharif or wet season from late June to early October, the rabi or dry season from mid-October to early April, and the hot weather season from mid-April to mid-June. The mean monthly temperature ranges from about 13 degrees C in January to 34 degrees C in June, and mid-day temperatures some- times exceed 45 degrees C in the hot season. The average rainfall of the area varies from about 300-400 mm in the west to 960 mm in the east. About 75% of the rain falls in the wet season, with the wettest month August and the driest April (Table 4). Predominant soils of the project area are sands in pump-lift areas, sands and sandy loams in the northern and western Bhakra and WYC areas, and loams in the eastern WYC areas. Nearly 85% of irrigation works proposed under the project will be located in sandy and sandy loam areas where seepage loss rates from canals and watercourses are high. - 12 - Farmers and Land Holdings 2.03 The farmers of the project area are generally progressive and energetic. Of the 913,000 farmholdings in Haryana, about 81% are owned and self-operated, 12% are rented and 7% are partly owned and rented. Average farm size is about 3.8 ha statewide, 4.6 ha in the Bhakra command and 3.6 ha in the WYC command. In terms of number of holdings, farms below 1 ha in size account for about 31% of the total in the Bhakra command and 42% in the WYC command; however, less than 4% of the area is in holdings of 1 ha or less in both Bhakra and WYC areas. The permissible land ceiling per household under current law is 7.25 ha for land with assured irrigation where the possibility of double cropping exists, and 10.9 ha on land producing only a single crop. Crops and Yields 2.04 The irrigated crops grown in the areas are mainly bajra (pearl millet), cotton and paddy in the k;harif (wet) season and wheat, gram (chick pea) and mustard during the rabi (dry) season (Table 5). Bajra, gram and to some extent mustard are drought resistant crops and are often grown by farmers in the project area as a hedge against uncertain canal water supplies, in addition to cotton and wheat, for example, which are more profitable but also more drought sensitive. The most common cropping sequences are bajra-wheat, bajra-gram and cotton-fallow; fallow-wheat is also practiced. Considering both rabi and kharif seasons together, the Bhakra area has higher irrigation intensity (88%) than the WYC area (64%), while the WYC has higher rainfed. intensity (73%) than the Bhakra area (50%) because of more favorable rainfall patterns ;prevailing in the eastern region where the WYC system is concentrated (Map 15553). 2.05 Average yields in Haryana for major foodgrain crops are among the highest in India; for example, 3.4 t/ha compared to the national average of 1.8 t/ha for paddy, and 2.1 t/ha compared to the national average of 1.4 t/ha for wheat. Haryana farmers make heavy use of high yielding varieties (about 93% for wheat, 92% for paddy and 70% for bajra) and fertilizer (currently averaging 64 kg/ha, nutrient basis). Nevertheless, yields are far below their potential for these crops under irrigated conditions. A major objec- tive of modernization works under the proposed project is to improve the quality of irrigation service, particularly the reliability and timing of water deliveries, thereby enabling Haryana farmers to better utilize the potential of modern agricultural technology. Agricultural Supporting Services 2.06 Agricultural supporting services in the project area are well-developed and considered adequate to support developments under the proposed project. The Haryana Agricultural University (HAU) located in Hissar provides agricultural education and research for the entire State. HAU is also the main center for the all-India coordinated research project on water management and soil salinity, with the major objective being develop- ment of technology for efficient use of irrigation water. The Training and Visit system of agricultural extension was introduced into Haryana in early 1979 assisted by IDA under the Composite Agricultural Extension Project - 13 - (Cr. 862-IN) to intensify extension services. A close linkage exists between the extension service and research provided by HANJ. Production and distribu- tion of high quality seeds and the supply of fertilizer and agro-chemicals are well developed in the project area, as are marketing, processing, storage and transport facilities. 2.07 The agricultural credit system in Haryana is highly organized and effectively managed. Loan recovery rates in recent years have been satisfac- tory, with about 75% recovery for short- and medium-term production credit and 90% for long-term loans. Farmers, in general, have adequate access to institutional credit facilities for their agricultural operations. Credit is provided through commercial banks, land development banks and cooperative banks with offices spread throughout the area. Refinancing of agricultural credit in the project area has been provided by ARDC and will continue to be provided by NABARD, which has replaced ARDC. Concurrently with the proposed proiect, credit institutions and banks in the project area will organize a credit consortium to further strengthen credit services in the project area. III. THE PROJECT Project Objectives and Major Features 3.01 The proposed project focuses on modernization of the Bhakra and Western Yamuna Canal (W4YC) systems, respectively serving nearly 1.2 M ha and 1.1 M ha of command area. It aims to improve conveyance, distribution and operational efficiencies of the systems, augment water supplies available to the canal network, and improve the equity and reliability of water distribu- tion within the systems. Project components are: (a) Modernization of Canals -- lining of about 250 million ft of canal sarface (equivalent to about 2,900 km of branch, distributary and minor canals) in the Bhakra and WYC gravity canal systems, improvement and modernization of canal struc- tures and regulation equipment, and installation of a two- way radio network to improve canal communications; (b) Modernization of Watercourses -- lining and improvement of structures for watercourses totalling about 23.0 million running ft (20 million running ft in gravity areas and 3.0 million running ft in pump-lift areas); (c) Augmentation Tubewells -- installation and electrification of 325 augmentation tubewells, each of about 1.75 cfs capacity; (d) Sprinkler Irrigation -- installation of 100 sprinkler sets as an expanded pilot project primarily in the sandy pump-lift areas; - 14 - (e) Village Water Supply Systems -- construction of about 120 water supply systems to serve some 360 "scarcity" villages located in the project command areas; (f) Village Access Roads -- construction of about 196 km of all-weather access roads connecting 111 villages to major roads; (g) Training -- development of a long-range manpower training program in the Irrigation Department for in-service and new recruit training; and (h) Research and Development and Technical Services -- support of pilot projects, experiLments and studies related to modern- ization activities and aimed at raising efficiency and performance standards of canal irrigation in Haryana. Canal Modernization 3.02 The project would finance canal lining, improvement of water regulation facilities, and installation of a two-way radio network for improved communications. 3.03 Canal Lining. Some 2,859 km of canal length on about 285 different channels in the Bhakra and WYC systems would be lined. The unlined wetted perimeter to be lined would total approximately 250 M ft2, equivalent to 212 M ft2 on a lined basis (Table 6). The Bhakra and WYC systems comprise in total about 8,900 km of channel length. Prior to Haryana I, about 700 km had been lined. Haryana I completed (or will complete by February 28, 1983) approximately 2,700 km of additional lining. Upon completion of Haryana II, a total of some 6,200 km of channels or about 70% of the Bhakra and WYC systems will be lined, as follows: --------------Length of Canal Lining--------------- Lined Lining Lining Name of Before Completed Proposed Lining Canal Haryana I Haryana I Haryana II Total System km km km km Bhakra 344 1,378 1,545 3,267 WYC 340 /a 1,294 1,314 2,948 Total 684 2,672 2,859 6,215 /a An additional 1,517 km of canals were lined in lift areas fed by the WYC system. 3.04 The practice in Haryana has been to line existing canals, rather than construct new parallel (lined) channels as in the Punjab. To undertake lining works, canal rotational schedules are organized to provide 16 day closure periods during the November to June construction period, resulting in approximately 100 working days for canal lining works per year. However, the actual number of full closures obtained depends very much on the amount of water supplied to the system, and closure periods are particularly limited in - 15 - the Bhakra system which averages about 278 annual running days compared to WYC with 200 running days. The need for lining in the Bhakra System is particularly urgent because of high seepage losses in sandy areas, brackish and rising groundwater, and the likelihood of increasing difficulties in obtaining sufficient closure periods in the future due to additional water supplies expected from the Sutlej-Yamuna Link canal. 3.05 The Bhakra system therefore would receive special priority in implementation of the lining work. In places where obtaining sufficient closure periods is difficult lining works would be done by constructing parallel channels, particularly for larger canals (Chart 24098). Comparative cost studies indicate that the costs for lining existing canals and con- structing parallel lined channels are approximately equal in the case of larger canals. Parallel lined canals have been constructed satisfactorily under Haryana I where closures could not be obtained. For WYC, Haryana I procedures are satisfactory, and lining would be done on existing channels. 3.06 Design of lining works would follow the detailed criteria adopted by GOH and used effectively during Haryana I. Design criteria would depend on the capacity of the channel and on the construction methods appropriate to the site. Two basic designs will generally be used (Chart 24096): (a) for canals with capacities up to 2,000 cfs -- a single- tile lining comprising a single layer of 5 cm-thick burnt clay tiles bedded in 1:3 cement mortar, over a layer of 1:3 cement plaster, over a 1:5 cement plaster layer on a compacted sub-grade. The 1:3 cement plaster layer is the seepage barrier, with the tiles providing mechanical protection. Where neces- sary, mechanical protection may be provided by pre-cast concrete slabs; in addition, polyethelene film may be substi- tuted for the 1:3 cement plaster layer. The thickness of the 1:3 cement plaster seepage barrier will vary from 10 mm for smaller channels to 16 mm for channels up to 2,000 cfs; and (b) for canals with capacities above 2,000 cfs -- a double-tile lining with four layers, comprising 5 cm burnt clay tiles bedded in 1:3 cement mortar, over 1:3 cement plaster, over a second layer of 5 cm clay tiles, over 1:5 cement plaster on a compacted sub-grade. Canal beds would have single-tile linings except under high water table conditions where double tile lining would be used. 3.07 Burnt clay tiles are generally the preferred lining material. Approximately 5 improved automatic tile kilns each costing an estimated Rs 750,000 (US$83,300) with modern tile molding equipment would be set up under the project to manufacture high quality clay tiles to uniform stand- ards. 3.08 Water Control and Regulation. Improved water control and regula- tion capabilities are essential for more efficient management of the Bhakra and WYC Systems. Many existing control structures were designed to outdated standards which do not enable the degree of water regulation required in the - 16 - systems today for efficient and timely distribution and delivery of irriga- tion supplies; in addition, some structures are in poor operating condition and have reached the end of their useful life. Project modernization works would include replacement of canal regulators on all canals over 100 cfs in size and on an estimated 50% of smaller canals, installation of water measur- ing devices in the head reaches of larger channels, remodelling of 5,550 watercourse outlets, provision for added escapes as needed, and remodelling of falls, as well as the construction of ancillary facilities including cow ghats, bridges, and buildings. 3.09 Design of water regulation and control facilities would provide for future upgrading of canal system performance capabilities through the intro- duction of technologies for improved canal control. Design standards needed to accommodate future upgrading requirements may include: radial gates with gearing mechanism and designed for eventual mechanization with electric motors, particularly in larger canals; canals with their cross-regulation structures constructed with sufficient freeboard to accommodate in the future level-top canal banks for approximately 40% of the canal reach just upstream of each structure; and cross-regulators spaced to avoid excessively long unregulated reaches of canal. For efficient water regulation and control, direct outlets on larger canals would be eliminated where feasible. Agreement has been reached that GOH will develop by December 31, 1983 new or improved design standards for modernization of canals and water regulation facilities to adequately reflect operational requirements. 3.10 Canal Communications System. Canal communications would be upgraded through the installation of a two-way radio network. The present canal communications system uses telegraph and magneto (local communication) telephones to connect some 100 stations at major regulation and control points.. Essentially without modification this system has been in operation for the last 100 years and cannot cope with modern-day requirements for accurate and rapid canal regulation. Field reports indicate that the system is undependable and out ot order 25 - 35% of the time, often when it is most needed (as when canal breaches occur). Fast and dependable communications are required in order to improve canal system operations and management efficiency. 3.11 The project would provide for two-way radio sets for voice com- munication between approximately 22 of the most important stations in the Bhakra and WYC systems as a first step in upgrading canal communications (Map 16554). The stations to be upgraded'are located at regulation points for water supplies for main canals of the Bhakra and WVYC systems (including pump-lift areas served by the WYC system), important cross-drainage points, and locations involving inter-State water regulation (Table 7). GOH has applied to the GOI Post and Telegraphs Department (P&T) for allotment of a frequency, and P&T has agreed to provide base station two-way radio sets on a rent and guarantee basis at the rate annually of Rs 36,400 (US$4,044) for each set. Radio units will be housed at existing communications facilities, and operated by existing signalling staff. The project would also provide for about 50 additional hand-held units and the services of a local consult- ant to assist with planning of the canal communications network to maximize - 17 - system management and operational efficiency. P&T has indicated that fre- quencies between 68-88 MHz or 146-174 MHz may be available for the network. GOH has initiated a feasibility study on which basis the final allocation of frequency band(s) would be made. Assurances were provided by GOI and GOH that the feasibility study would be completed by April 30, 1983, and that depending on the results of the study the system would be set up by June 30, 1984. 3.12 Benefits of Canal Lining and Modernization. A primary benefit of the canal lining program is to save water through a reduction in seepage losses. Any water saved through lining is of high value, as the canal systems were originally designed to be "water short". Water availability at the headworks is sufficient to irrigate only about 35 to 40% of the area com- manded each season, and consequently any added or saved water in the system can be immediately used by farmers with little or no additional investment. 3.13 Savings in seepage losses depend on soil type; sandier soils which predominate in the Bhakra command generally have somewhat higher seepage losses than the more loamy soils in the eastern part of the WYC command. Measurements of seepage losses for unlined and lined channels have been made experimentally under Haryana I on some 32 scattered channels in sandy loam and loam soils, representing typical conditions in the project area. Average results of these experiments are as follows: --Seepage Losses-- Seepage Reduction cfs/M sq.ft. due to Lining Soil Type Unlined Lined cfs/M sq.ft. Sandy Loam 8.1 1.4 6.7 Loam 6.6 1.3 5.3 Average /a 8.0 1.4 6.6 /a Weighted average based on amount (area) of lining proposed in each soil type. 3.14 Based on the above measurements, average seepage losses2used in evaluating canal lining benefits under the pr2ject are 8 cfs/M ft of wetted perimeter for unlined channels and 2 cfs/M ft for lined channels, resulting in2an average direct seepage loss reduction due to canal lining of 6 cfs/M ft . These assumptions are conservative. Using inflow/outflow methods 1/ actual measured seepage losses from unlined channSls in the seepage loss experiments above rangei from 7.4 - 10.4 cfs/M ft in sandy loam soils, and from 5.5 - 8.8 cfs/M ft in loam soils; measured losses from lined channels ranged from about 0.8 - 2.1 cfs/M ft . Some 83% of the length of canals to be lined under the project would be in sandy loam soils. I/ In general inflow/outflow measurements more accurately represent actual canal operating conditions than do ponding measurements. All but two of the measurements on unlined channels and half the measurements on lined channels were done using inflow/outflow techniques. - 18 - 3.15 Seepage loss savings due to lining result both from the direct reduction in seepage due to the lining itself, and from the reduced wetted perimeter made possible by having a lined canal cross-section. Based on experience with Haryana I, the reduction in canal cross-section averages about 15%. Using the direct seepage loss estimates above, and a 15% reduc- tion in canal wetted perimeter, primary seepage loss savings under the project would total nearly 1,600 cfs, estimated as follows: Without Lining With Lining Name of Existing Seepage Lined Seepage Savings in Canal Area Losses Area Losses Seepage Losses System M sq.ft. cfs M sq.ft. cfs cfs Bhakra 172 1,372 144 289 1,083 WYC 78 625 68 136 489 Total 250 1,997 212 425 1,572 3.16 Combining expected Haryana II seepage loss savings with those estimated from Haryana I estimated at about 1,300 cfs, total direct water savings as a result of canal lining under the two projects would amount to over 2,900 cfs. Assuming annual running days of 278 for Bhakra Canals and 200 for WYC, the volume of water sgaved annually through the canal lining program wouli total some 1,600 Mm (1.4 million3acre feet or MAF), comprising about 720 Mm (0.6 MAF) in Haryana I and 960 Mm (0.8 MAF) in Haryana II. This neglects seepage losses saved when water remains standing in the unlined canal profile below the sill leveL of watercourse offtake structures during off-rotations of canals. 3.17 Operational benefits should also be substantial, but are much more difficult to quantify. A preliminary study of operational benefits for nine distributaries lined under Haryana I for the period 1978 to 1981 indicates the following: (a) reduction in maintenance costs by nearly 90%; (b) reduction in canal breaches by nearly 85%; (c) reduction in water travel time for filling canals after rotational closures by about 40%; and (d) increased command (elevation of water surface) at the canal head and tail averaging 10 cm on each distributary (a small increase in water elevation can have significant efficiency benefits). Overall, considering channels in the study for which data is available, the area irrigated per cfs-day 1/ increased by about 10% per year between 1979 1/ Area irrigated per cfs-day (a quantity of water) can be considered a rough measure of overall operational efficiency. - 19 - and 1981. Canal lining and consequent reduced seepage from canals is also expected to help slow the rise in saline groundwater levels in the interior basin of western Haryana. Although difficult to measure in terms of iden- tified cause and effect, this is perhaps the most important long-run benefit from the project. Monitoring and evaluation of these and other benefits from lining was started on a limited scale in Haryana I and will be expanded in Haryana II. 3.18 Costs. Costs for canal modernization including structures, staff support (including construction of housing units for watercourse construction field staff), engineering, and physical and price contingencies average about Rs 5.51 (US$ 0.58) per ft . 2Base costs for canal lining alone are estimated at Rs 4.36 (US$ 0.46) per ft . Base costs for the radio communications network total an estimated Rs 3.2 M (US$361,000) over the four year project period. Watercourse Modernization 3.19 The proposed project would finance modernization, mainly lining, of about 1,700 watercourses with an estimated total length to be lined of some 20.0 M running feet (Rft) in the Bhakra and WYC gravity areas, and an addi- tional 200 watercourses with an estimated total length to be lined of some 3.0 M Rft in the Jui and Sewani pump-lift systems which are still under construction and development. The project would also include, as necessary, completion of watercourses started in Haryana I. Each watercourse serves on average about 50-60 farmers linking individual farm plots to the main canal network operated by the Government. Haryana has a total of about 12,500 watercourses including approximately 9,400 in the Bhakra and WYC systems. Some 924 watercourses are envisaged for the Jui and Sewani systems. 3.20 Typically, a watercourse serves an area (chak) of perhaps 200 to 300 ha, has a capacity of between 1 and 2 cfs, and is perhaps 15,000 ft in total length (Map 16555). Because of its length and chak size, a watercourse in Haryana is roughly equivalent to a minor canal in many other Indian irrigation projects, particularly in the southern States. Watercourse capacity and chak size is determined according to a duty of about 1 cfs for 168 ha. 1/ Considering normal canal operating procedures and channel rota- tions, watercourses provide each farmer with enough water on average to irrigate about 30 - 40% of his irrigable land each season. 3.21 The Haryana Canal and Drainage Act of 1974 (the Act), as amended in 1976 and based on the Northern India Canal and Drainage Act of 1873, governs operation of the irrigation system and allocation of water among farmers. Under the Act, operation and maintenance of a watercourse is the respon- sibility of farmers holding land in the chak served by it. Each earthen 1/ This applies to gravity areas; in pump lift areas, a duty of 1 cfs for 133 ha is used to determine chak size, but watercourse capacity is based on a duty of about 1 cfs for 100 ha because of larger supplies provided in the kharif season. - 20 - watercourse was originally constructed by the farmers, or shareholders, in the chak, and the farmers in effect own the watercourse in common. The alignment of each watercourse is determined by the Irrigation Department under the Act. Once legally registered, the common watercourse channels within a chak are designated as "sanctioned", and supply of water to all individual farm plots can be and is enforced under provisions of the Act. 3.22 Gravity Areas. In Bhakra and WYC command areas, approximately 3,400 watercourses have been lined tnder Haryana I and a preceding scheme financed by ARDC. With completion of Haryana II, a total of nearly 5,100 watercourses accounting for about 54% of the total watercourses in both systems will have been lined, detailed approximately as follows: Canal Total No. of -- Number of Watercourses Lined------ System Watercourses ARDC Haryana I Haryjna II Total Bhakra 5,292 1,315 1,125 1,211 3,651 WYC 4,075 381 569 489 1,439 Total 9,366 1,696 1,694 1,700 5,090 3.23 Under Haryana II, watercourse designs for lining which have been proven effective and economical in Haryana I would be employed. Designs and procedures for watercourse lining and modernization are well specified in a watercourse design manual developed by HSMITC under Haryana I. Two alterna- tive watercourse lining designs would be used depending on local costs and site conditions (Chart 24082): (a) vertical sides constructed of brick masonery using 1:4 cement mortar, with channel bed of 4 cm thick 1:3:6 cement- sand-aggregate mix over a subgrade of 2 cm thick slate pieces (kattals) in the, bed; and (b) vertical brick masonery sides as above, but with channel bed of 7.6 cm thick brick masonery in 1:4 cement mortar over compacted subgrade. 3.24 In very sandy areas the inside face of the brick masonery lining would have cement mortar plaster to minimize leakage; it is estimated that plastering would be required for about 20% of the total length of lined watercourses. Where the height of watercourse walls exceeds the normal five to six courses of brick, the wall thickness below the sixth course would be doubled for added strength. Polyethelene sheet in the watercourse bed would be used where necessary, particu'Larly in sandy areas, to reduce drainage of water from the cement-mortar and as an additional seepage barrier (or where justified in place of plaster in sandy areas). On a small portion (about 1%) of the watercourse lining program, innovative designs and materials would be tried out and the results monitored and integrated into the ongoing program. 3.25 The lining for an individual watercourse would average approximately 75% of its total length, the same as under Haryana I. In general water losses are highest in watercourse head reaches, because the head reach runs for more hours during a season compared to the tail reach - 21 - (due to operation of the warabandi rotation). However, farmer pressure has been strong to line 100% of the watercourse length on equity grounds, because under the Act all shareholders share equally in the lining cost on the basis of landholding size, rather than on the basis of the amount of additional water actually received. Under the Act, the watercourse remains the property of the chak shareholders, and therefore lining of 100% of the length of a watercourse would be accepted under the project if shareholders are prepared to bear the extra cost through an appropriate repayment schedule. Lining would also be done on already lined or partially completed watercourses to bring them up to the standards of the proposed project. General criteria for determining the length of a watercourse to be lined would include the follow- ing considerations: (a) lining of any particular main or branch watercourse would be stopped at the point where the remaining time in the warabandi rotation schedule falls below 8 to 10 hours in the weekly rotation period; and (b) no shareholder in a watercourse command would have to convey water for a distance in excess of 1,000 ft (300 m) from the end of the lined watercourse to his farm gate. 3.26 Watercourse modernization would include construction of improved gated turnouts, division boxes, culverts, cross-drainage structures, falls, etc. The present practice with earthen watercourses is for the farmer to take water by making a cut in the bank of the watercourse to obtain water during his warabandi turn. Watercourse modernization would provide improved permanent farm outlets (nukkas) with gates on the lined and unlined portions of each watercourse (Chart 24083). Permanent crossings over watercourses would be constructed to enable access to each holding by bullock cart or tractor. Watercourse modernization would also include provision for main- tenance during construction and a run-in period of about six months (before it is considered complete) for each modernized watercourse during which time performance would be monitored to insure design specifications are met and any repairs or modifications needed would be made; this would be done in conjunction with efforts to improve quality control standards (para 5.25). In addition, the project would provide for buildings, staff housing, and staff support necessary for speedy implementation of watercourse modern- ization (para 3.18). 3.27 Lining can reduce seepage losses from watercourses substantially, particularly in sandy areas. Measurement from scattered watercourses in the Bhakra and WYC systems indicate losses often in the range of 20 - 30 cfs/M ft2 without lining, which are reduced to about 3 - 6 cfs/M ft2 with lining. 1/ In addition, lined watercourses provide reliable water supplies 1/ The above are steady-state loss rates; during the first 24 hours of a newly-opened channel segment, loss rates may exceed 50-100 cfs/ Mft2. Such high rates would occur continuously on various channel segments as the warabandi rotation progressed, and would be repeated each week. - 22 - particularly to watercourse tail areas because breaks (accidental or other- wise) in the watercourse are reduced, and increase equity because all shareholders regardless of their location on the watercourse receive essen- tially their full share of available water supplies. In practice measured seepage losses are not directly proportioned to total water savings because watercourses do not flow continuously throughout their length but rather operate on a rotation basis. In addition, increased reliability and equity are difficult to evaluate. Nevertheless, the impact of watercourse modern- ization can be seen in increases in irrigated area with lining compared to without lining. Based on data from a total of 375 watercourses monitored under Haryana I, the average increase in the irrigated area of a watercourse due to its modernization is estimated at about 20% and 11% in Bhakra and WYC areas, respectively. 3.28 Pump-lift Areas. The Jui and Sewani projects envisage a total of about 924 watercourses. Some 16 were constructed under previous ARDC schemes and 105 under Haryana I. Haryana II would add an additional 200, bringing the total to 321 upon completion of the proposed project. Lined watercour- ses are particularly important in the pump-lift areas for several reasons. Pump-lift water has both high cost and high value, and it has a high oppor- tunity cost. Soils are very light with low retention capacity, leading to exceptionally high seepage losses measured in the range of about 30 to 60 cfs/M ft2 from unlined watercourses. 1/ In addition, the terrain in pump-lift areas is undulating with sand dunes and valleys, and watercourses frequently must traverse depressions and sand dunes where lining is required to stabi- lize the channel. 3.29 Without watercourse lining, water supplies under these conditions are very unreliable for all farmers except those closest to the outlet from the canal. Development of irrigation in the pump-lift areas as a result has progressed very slowly. Watercourse modernization work in much of the pump-lift area is essentially the construction of new watercourses and is necessary to obtain significant irrigation benefits from costs already incurred by GOH for pump-lift facilities. In addition, pump-lift area farmers are typically small-holders and poor, and the area is chronically drought and famine prone. Project watercourse investments in the pump-lift commands would produce significant social benefits which are not considered here. 3.30 Watercourse design and structures in pump-lift areas would be the same as in gravity areas, except that design option (b) with brick masonery bed would be used exclusively. In addition, because of exceptionally high seepage rates and difficult terrain, 100% of the watercourse length would be lined. 1/ With a typical unlined watercourse of about 15,000 ft and the normal rabi season flow of about 1 cfs, water would travel only about 6,000 ft with such high seepage rates, leaving about two-thirds of the watercourse dry. - 23 - 3.31 Costs. The average cost of watercourse modernization over the project period including lining, small structures, engineering and physical and price contingencies is estimated at Rs 37.90 (US$ 3.99) per Rft tn gravity and Rs 42.10 (US$ 4.43) per Rft in pump-lift areas. Field testing of various types of lining and structures would continue throughout the project period in both gravity and pump-lift areas, and specifications would be modified and improvements introduced if iustified. Augmentaticn Tubewells 3.32 The proposed project would finance installation of 325 augmentation tubewells (including tubewell construction, link channels, and electrifica- tion). Haryana I was to finance installation of 325 augmentation tubewells (ATWs) in five areas identified by GOH where groundwater quality and availability can support She development of some 650 additional wells capable of producing about 450 Mm (0.4 MAF) of water annually. 1/ The proposed project would be the second phase of that development (Map 16554). The ATW program aims at optimizing management and utilization of groundwater and surface water resources coniunctively for maximum benefit. In Haryana II, the total ATW capacity would be about 570 cfs, augmenting Sanal water sup- plies in the Bhakra and WYC systems by an estimated 226 Mm annually. ATWs under Haryana I and 3II would have a total capacity of over 1100 cts and pump an estimated 447 Mm (0.4 1MAF) annually, as follows: 2/ =-------Haryana I-------- --------Haryana II------- Name of Dis- Dis- Total Canal No. of charge Quantity No. of charge Quantity Quantity System ATWs cfs M cu.m/yr ATWs cfs M cu.m/yr M cu.m/yr Bhakra 250 438 178 288 504 205 383 WYC 75 131 43 37 65 21 64 Total 325 569 221 325 569 226 447 Note: The discharge estimates are based conservatively on 1.75 cfs per tubewell; quantity estimates assume annual pumping of 4,000 hours in Bhakra and 3,200 hours in WYC areas. In practice discharge rates achieved are about 2.0 cfs per tubewell. 3.33 ATWs and Link Channels. ATWs would be constructed in groups to reduce the cost of electric service and link canals, and to make the combined discharge large enough to be operationally significant when used conjunc- tively with surface water supplies in the canal system. The wells would be 1/ Some 38 of the ATWs planned for Haryana I will not be installed before project completion due to unavailability of sites. 2/ Combined with some 1,250 ATWs installed by GOR prior to Haryana I, the estimated total capacity of the wells (upon completi n of Haryana II) would be about 3,300 cfs adding an estimated 950 Mm (0.8 MAF) annually to available canal water supplies. - 24 - about 135 m deep with discharges of between 1.5 to 2.0 cfs. They would be spaced at about 500-1,000 m intervals generally in a single row along a lined link collection channel discharging into a main canal of the gravity irriga- tion network. Minimum spacing between ATWs would be about 450 m. Minimum spacing between ATWs and private tubewells would be about 150 m, and local farmers who had to lower their pump sets due to a drop in the water table resulting from ATW operation would be compensated. Project ATWs would be located in the same Branch canal areas as in Haryana I, but in different blocks; i.e., in the Ratia, Rori and Sirsa Branch areas of the Bhakra system, and in the Hansi Branch area of the WYC system. 3.34 Design parameters such as screen length, choice of screen materials and pump equipment used in Haryana I have proven generally satisfactory and would be employed in Haryana II; they would be modified as necessary during project implementation to imiprove technical performance and cost-effectiveness of project ATWs. Capacitors and other necessary protec- tive equipment would be installed att each ATW to avoid damage due to power outages or variations in voltage, which are at times severe. 3.35 Some 225 project ATWs would be located along nine link channels to be constructed concurrently with ATWs under the project; the remainder of project ATWs would be located along existing main canals. The length of link channels required would total about 103 km, plus about 9 km for a main feeder channel. Link channels would be lined and equipped with suitable outfall regulators, cross-drainage works, bridges/crossings, and facilities for lifting water at feeder and link channel tails as needed. Each link channel would serve on average about 25 ATWs. Construction of one of the link chan- nels as a level top canal would be considered. 3.36 ATW Electrification. Project ATWs would be served by dedicated 11 kV feeder lines providing uninterrupted power supplies. An estimated 21 feeder lines, each serving some 15 ATWs and totalling about 320 km in length, would be required. In addition, two new 33/11 kV sub-stations would be constructed and 19 sub-stations would be augmented to serve project ATWs; these additional facilities would be only partly chargeable to the project as a large part of their capacity will be used by other consumers. Capacitors will be provided on 11 kV lines at each sub-station to improve the power factor and voltage at the feeder end. Power requirements for the project at full development would total some 9 MW, and are negligible in terms of the projected peak load in the State cf over 1400 MW by 1985. Design standards for ATW electrification have been satisfactory in Haryana I and would be continued under the proposed project. 3.37 Costs. The cost of each ATW alone is estimated at about Rs 180,000 (US$20,000), including engineering and physical contingencies; the estimated cost per ATW including link channels, engineering and physical contingencies totals about Rs 347,000 (US$38,600). The cost of electrification is about Rs 76,000 (US$8,500) per well including physical contingencies. - 25 - Sprinkler Irrigation 3.38 The proposed project would finance installation of about 100 sprinkler sets. The sets would be installed primarily in the sandy and undulating areas in the western part of the State (Bhiwani, Sirsa and Hissar Districts). Between 1978 and 1981, the Irrigation Department installed and has operated experimentally some 130 sprinkler sets in these areas with generally satisfactory results, and the proposed additional sets would be treated as an "expanded" pilot operation. About two-thirds of the new sets would be in the Jui and Sewani pump-lift commands which are served by Western Yamuna canals with the remainder in the Bhakra command. In these areas, surface irrigation is very difficult and expensive due to heavy land levell- ing requirements, and application efficiency is low due to the very light, sandy soils with rapid infiltration and low moisture retention. Sprinkler irrigation would reduce the need for levelling, and enable high application efficiencies with the light soils. 3.39 Each sprinkler set would serve a chak area of about 40 ha consist- ing of perhaps 10 to 20 separate farms. The standard sprinkler chak is expected to have an irrigation intensity of about 50% in kharif and 70% in rabi. Cropping patterns, initially at least, would comprise primarily drought resistant crops like baira and gram, although cotton in kharif and some wheat in rabi is expected to be grown. A standard sprinkler set would consist of an aluminium pipe main line and movable lateral lines, sprinklers, couplers, valves, electric or diesel pump, and other accessories and ancil- lary equipment and facilities. Capacity of the sets would be sightly higher in pump-lift command areas compared to the Bhakra areas because of the higher design water duties provided in lift areas. 3.40 The sprinkler irrigation component will be considered in part as an expanded pilot effort to test different types of sprinkler equipment, deter- mine how best to operate the sprinkler units in conjunction with the canal network, and develop -procedures for establishing and maintaining effective farmer involvement. Although the standard unit above would be the norm, other types of sprinkler equipment would be tried and adopted if advan- tageous, such as small, movable single sprinkler units with flexible hose. Several management options for sprinkler irrigation will also be tried. For example, present sprinkler crop patterns emphasize low water using crops like gram, mustard and baira; several combinations of crop patterns and intensity would be tested to determine the optimum crop mix for selected operating and site conditions. 3.41 Alternative canal operational patterns to supply water to sprinklers on a more frequent schedule would also be tested. With sprinklers, water application efficiencies are higher compared to surface methods, particularly in sandy soils, and it is technically possible to apply much smaller amounts of water during each application without large percola- tion losses, for crops requiring more frequent irrigation. More frequent but smaller irrigations would help to reduce water stress and in general raise yields (depending on the crop), without a significant increase in actual crop water use. However, present canal system operating procedures result in long intervals often amounting to 16 or 24 days or more between irrigations. To - 26 - gain full benefit from sprinkler investments, alternative canal operating schedules and procedures, in-canal or off-canal storage, modified canal designs (such as automatic downstream controlled cross regulation and level top canals), etc., would have to be developed and tested to match canal operations with the requirements of sprinkler irrigation. 3.42 For efficient sprinkler operations, cooperation among the farmers is essential; they would have to bei more highly organized for group action than is the case under the standard warabandi rotation as is normally prac- ticed in surface irrigation areas. For example, farmers would have to move sprinkler lines according to an agreed plan, and take care to protect aluminium sprinkler pipe, couplings, valves and other equipment from damage. Under the sprinkler component, a Sprinkler Irrigation Association (SIA) would be formed at each sprinkler chak to enhance coordination and cooperation among farmers. Each SIA would be comprised of farmers owning land on the chak and would be established prior to installation of the sprinkler equip- ment. SIAs would assist in planning, supervising and operating project sprinkler sets. Agreements have been reached that GOH would by September 30, 1983 prepare plans to be carried out after review and comment by IDA to organize and establish a SIA at each sprinkler site. These plans would include the powers functions, responsibilities, and organizational structure for SIAs. 3.43 The cost of the sprinkler system for each 40 ha chak totals about Rs 179,000 (US$ 19,000) for the Bhakra areas and Rs 195,000 (US$21,700) in pump-lift areas. The slight difference in cost is due to the somewhat higher capacity required in the pump-lift areas. Village Water Supply 3.44 The project would finance construction of about 120 water supply schemes to serve some 360 "scarcity" villages with an estimated population of over 600,000. Scarcity villages are those where an assured supply of potable water is not available within a distance of 1.6 km or a depth of 15 m; available water has excess salinity, iron, fluorides or other toxic elements; and/or available water supplies are liable to the risk of cholera or guinea worm infection. The schemes have been selected by GOH on the basis of greatest need and are distributed through ten districts. Of the 120 schemes, some 62 would be supplied by tubewells, and about 58 schemes located in brackish groundwater areas would be supplied from irrigation canals. Many villages depend during at least part of the year on canals for their domestic water supplies. Project schemes will provide sanitary water supplies to the village population and free essential village water supplies from interrupt- ion due to canal operational requirements and the canal modernization program under the project. 3.45 Water supply schemes are designed to meet estimated requirements over a planning period of 15 years (except the distribution system and con- nections which are designed using a 30-year period), based on daily require- ments of 45 liter per head. This is the current design rate used for village water supply schemes throughout the State. To ensure equitable distribution of scarce resources, private house connections are not allowed at present. - 27 - Depending on location, canal closures may be for periods of up to 27 days after a 7 day running period; canal-fed schemes would therefore need storage/sedimentation basins with sufficient capacity to meet expected periods of canal closure, and a feeder channel sufficiently large to fill the storage in 8 days. Raw canal water would be treated by slow sand filtration and chlorination; tubewell based schemes would be treated only by chlorina- tion. Treated water would be pumped into overhead service reservoirs with capacities of 25% of daily demand supplying gravity-fed distribution mains designed to supply village populations through standpipes each serving 200 to 300 consumers. PH will install water meters on all tubewells and, for canal-based schemes, on all delivery mains. Pumps would be electrically powered from the State's rural power grid; standby diesel pumps and gener- ators would be provided to ensure against power outages. 3.46 Estimated project costs are based on five separately-costed model schemes developed on the basis of differing site conditions in various dis- tricts of the State. The per capita unit cost varies from about Rs 221 to Rs 348 (US$25 to US$39) according to the type of system (tubewell or canal based), local conditions, and population densities. The weighted average of unit costs is about Rs 250 (US$28) per capita. Village Access Roads 3.47 All-weather access to villages is essential, particularly in a monsoon climate, given the expanding production surplus to which the project will contribute and increasing farmer demand for modern agricultural inputs like fertilizer. Under Haryana I, some 1,300 km of access road construction and improvement was completed, linking about 950 villages to the State's all-weather road network. The proposed project calls for construction of an additional 196 km of similar all-weather access roads which would serve 111 villages. 3.48 All project roads would be designed and built to Indian Road Con- gress standards and GOH Public Works Department (PWD) specifications for village roads, which were used in Haryana I and are satisfactory. Pavement width would be about 3.7 m on a base formation 7.3 m wide over the shoulders with a right of way 12.2 m wide; embankment height would normally be about 0.9 m with drainage as required. The narrow right of way is sufficient because farmers prefer to provide soil for embankments from their land, rather than give up land for borrow pits. Pavement would have a total mini- mum thickness of 17.5 cm and would be constructed of stone or brick soling and waterbound macadam surfacing sealed with premix bituminous carpet. Provision would be made for hard shoulders where soft shoulders are not suitable because of soil conditions or road elevation. 3.49 In addition to road construction, the project would finance a pilot study to analyze the problem of damage to hard surface roads by animal-drawn (bullock) carts with iron-rimmed wheels, and to assess the difficulties likely to be faced in modernizing bullock carts in rural areas to reduce road damage. Various cart designs would be tested by introducing about 100 mod- ernized carts for actual use in a few selected areas. A study of traffic patterns in rural Haryana will also be undertaken in several selected areas - 28 - to assess traffic pattern changes and economic benefits resulting from the provision of all-weather roads between villages. 3.50 The unit costs for project village access roads average about Rs 159,000 (US$17,700)/km. The proposed study would cost an estimated Rs 1.0 M (US$111,000). Training 3.51 Under the project, special training programs would be developed for in-service (refresher) training, and for orientation training of new recruits of the Irrigation Department (ID). Both training programs would aim to provide ID engineers with increased knowledge and understanding of modern irrigated agriculture and its requirements, and with exposure to improved technology in irrigation and modern management science and practices. Most ID engineers are well trained and competent civil engineers. However, most learned their irrigation engineering on-the-job, and in addition much of the major civil engineering construction for irrigation in Haryana will be com- pleted over the next few years. Meeting the needs of the future will require that ID engineers have a stronger orientation and specialized training focussed on advanced design and teclnology and management to improve irriga- tion system performance. The training program under the project would help provide this orientation and training, and begin to develop a professional cadre of irrigation engineers and managers who would specialize in irrigation operation and management, especially among the new recruits who generally have little or no exposure to modern irrigation, hydraulics, agriculture, or management science in their formal civil engineering training. Training under the project would also include training for Public Health Department engineers on improved water supply system engineering. 3.52 Agreements have been reached that by September 30, 1983, GOH would prepare and furnish to IDA for its review and comment work plans and schedules for a manpower development program for in-service and new recruit training for ID staff. The program would aim at ID in-service training for up to 250 engineers annually and II) orientation training for about 30 engineers annually. Cost estimates for training include funds for fellow- ships for trainees and study tours for ID professional staff. Research and Development and Technical Services 3.53 The overall objective of the Research and Development (R&D) com- ponent under the Haryana II project would be to develop and test options for improving canal system performance capabilities and water delivery and use efficiency. The R&D component of the project would finance pilot projects, experiments and studies in support of this aim (Annex 1). It would also finance the establishment of a modest R&D and training center for ID. 3.54 R&D Concepts and Coordination. R&D efforts would include elements of both hardware (e.g., improved canal regulation technology) and software (e.g., alternative management practices and farmer organization). An R&D and Training Unit (RDTU) has recently been established in the Irrigation Depart- ment reporting to the Engineer-in-Chief and responsible for coordinating, - 29 - planning, designing, arranging and supervising project R&D work; in addition, a technical-level R&D Steering Committee under the chairmanship of the Engineer-in-Chief has been formed to guide, monitor and support the efforts of RDTU (paras 5.04, 5.05 and 5.06). Along with actual R&D activities, the project seeks to help institutionalize a system for facilitating and promot- ing a continuous process of innovation, adaptation, and change which is essential for effective, long-run modernization. Modernization of the ID central design office, primarily through purchase of improved equipment and essential vehicles, would be financed under the R&D component and would aim in part to help ensure speedy incorporation of R&D findings into planning and design work for canal modernization. Most of the key multidisciplinary staff required has already been transferred to RDTU, and the R&D Steering Committee has been constituted with appropriate membership. In addition to various studies and experiments which RDTU would sponsor or carry out, major R&D activities would include pilot projects, a groundwater salinity and drainage study and assistance with organization of farmer associations at sprinkler set sites and pilot areas and R&D support of the sprinkler irrigation com- ponent. All pilot project and R&D activities would be subject to a detailed mid-term review of objectives, plans and achievements. Assurances were provided that activities to be carried out through RDTU would include studies on improved canal operations and regulation, operating performance reporting systems, and quality control practices, procedures and organization. Agree- ments have been reached that by September 30, 1983 GOH would prepare and furnish to IDA for its review and comment work plans and schedules for R&D activities. 3.55 Canal Regulation Pilot Project. Accurate and responsive canal regulation is essential for high operational efficiency in canal system management. The technology and design employed in Haryana canal systems is essentially that developed by the British in the last century. Speed of response in canal system operation and the precision of control over both water flows and water surface levels is very limited, even with the best of management. In addition these technology and design constraints severely restrict the possibilities for improving management efficiency and developing and applying new, more efficient canal system operational procedures better matched to modern agricultural requirements. 3.56 Designs and technologies for improved canal regulation based on automatic, hydromechanical radial gates and plate distribution modules have been adopted and employed successfully in a number of developing countries over the past 20 years to provide improved upstream control and downstream control in canal regulation (Chart 24084). Under the R&D component, these technologies and designs would be tested and adapted tor Haryana conditions in a pilot project which would seek to improve speed of response, precision of water control and efficiency of management for selected pilot channels. These improvements are expected to help raise canal system management efficiency in meeting both existing and future operational objectives. Detailed work plans for upgrading channels under the pilot project would be included in the R&D work plans under the project (para 3.54). 3.57 Water Charges and Farmer 0rganization Pilot Project. In conjunc- tion with canal regulation pilot activities, the R&D component would support -- 30 - a pilot project on water charges and farmer organization. The present system of water charges, by crop according to the area irrigated, tends to penalize efficient water use by farmers, and reinforces pressures to keep water char- ges very low because the water charge levied on any individual farmer has no direct relationship to the amount of water actually delivered to him during the season. To help remove this constraint, GOH has experimented with a volumetric water charge system (termed "warimetric" system) based on the fact that under the standard warabandi rotation each farmer receives water for a specified period of time at a design flow rate during each turn for water. Under the warimetric system, as amended in current proposals, each farmer would pay for water according to the amount of time when he actually receives water, or more simply, according to the number of irrigations he receives. Because each irrigation is for a fixed time and flow, this amounts to payment according to volume of water. Available results indicate good farmer accept- ance of the warimetric system, and GOH has plans to expand it to some six channels serving 105 outlets, estimated to cover about 20,000 ha. 3.58 Areas for the pilot project have been tentatively identified (Map 16554). Proper and equitable functioning of the warimetric system requires increased precision in canal water regulation to insure full supply level (FSL) in parent channels, because farmers will be charged assuming the chan- nels are at FSL when they are operating. The six distributaries and minors serving the pilot areas would therefore be modernized under the canal regula- tion pilot project and/or operated with strengthened management to insure adequate control and monitoring of FSL. 3.59 Increased farmer involvement would also facilitate introduction of the warimetric system, as well as general improvement in operation at the chak level. In pilot areas, farmers on each watercourse would be organized into Water User Associations (WUAs) based on the existing warabandi groups or shareholder committees to participate more directly in local irrigation management matters; WUAs would, for example, monitor and report canal flows at their watercourse outlet which is essential for equitable operation of the warimetric system, maintain direct reporting links to ID staff on behalf of their members, and register water deliveries to their members to be used in determining and/or crosschecking the warimetric water charges. Such WUAs could also play a part in watercourse modernization and maintenance, for example, by establishing a committee to monitor watercourse modernization quality control and watercourse maintenance and repair requirements on behalf of members. Eventually, the WUAs could assist in further upgrading of irrigation service, for example, through purchase and operation of sprinkler equipment on behalf of their members. 3.60 Each WUA would be governed through specific Articles of Association based on model Articles of Association or by-laws to be developed under the project; these Articles would specify rights and responsibilities of members and of the WUA. Each WUA would be registered and supervised by the Irriga- tion Department and incorporated, if necessary, under appropriate existing legislation, in lieu of the specific model enabling legislation for WUAs which would be studied. Detailed and time-bound work plans for the water - 31 - charges and farmer organization pilot projects and provisions for estab- lishment of pilot project WUAs would be included in the R&D work plans under the project (para 3.54). 3.61 Groundwater Salinity and Drainage Study. High groundwater levels are already a serious problem in some areas, and if present trends continue over the next 20 years, rising brackish groundwater and soil salinization will become a matter of more general concern in the interior basin of Haryana. The R&D component would include study of drainage and groundwater salinity which would analyze management and investment needs for dealing with the problem, including the feasibility and cost implication of various alter- natives. The detailed hydrochemical study of groundwater quality recently agreed for UNDP assistance (US$900,000) would be integrated into the overall work plan for the R&D groundwater salinity and drainage study. Results of this study are expected to provide the basis for investments to be included in future irrigation modernization projects in the State. 3.62 Other Studies and Experiments. The R&D component would also sup- port studies and experiments aimed at improving canal system performance and operational and management efficiency. Topics for study and experiment would deal with technology, management and farmer organization as related to canal irrigation, and would also include project preparation (in conjunction with the groundwater salinity and drainage study) for possible future irriga- tion/flood control and drainage projects in the State. Topics for study and experiment under the R&D component would be outlined in the R&D work plans (para 3.54). 3.63 Technical Services. Many of the R&D pilot pro,ject, study and experimental activities proposed under the project are highly innovative and of an experimental nature for which specialist expertise available in India and elsewhere is extremely limited. Specialist technical services of individual short-term consultants estimated to total about 70 man-months during the project period would be provided through GOI under an ongoing UNDP water management grant (titled "Advisory Services for Modernization of Land and Water Schemes") administered by the Bank at an estimated cost totalling about US$11,700 per man-month. Assurances have been provided by GOI that consultant experts would be made available through the UNDP grant as needed for carrying out the R&D activities under the proiect. Project Implementation 3.64 The project would be implemented over a four-year period beginning April 1, 1983 as a time-slice of the ongoing GOH program for modernization of the Bhakra and WYC irrigation systems (Chart 24097). Non-irrigation components (water supply and roads) would be implemented in the project area as part of ongoing GOH development plans in the sectors concerned. -32- IV. PROJECT COSTS, FINANCING AND DISBURSEMENTS Project Cost Estimates 4.01 Estimated project costs, net of duties and taxes, would total Rs 2,702.7 million (US$300.3 million!). Detailed cost estimates, are given in x of Foreign % of Total Local Foreign Total Local Foreign Total Exchange Base Costs A. Canal Modernization 754.6 129.7 884.3 83.8 14.4 98.2 14.7 44.0 B. Watercourse Modernization Gravity Area 502.0 55.2 557.2 55.8 6.1 61.9 9.9 27.7 Lift Area 83.7 9.3 92.9 9.3 1.0 10.3 10.0 4.6 Sub-total Watercourse Modernization 585.7 64.5 650.2 65.1 7.2 72.3 9.9 32.3 C. Augmentation Tubewells Tubevells 96.8 21.9 118.7 10.8 2.5 13.3 18.4 5.9 Electrification 17.1 6.5 23.6 1.9 0.7 2.6 27.4 1.2 Sub-total Augmentation Tubewells 114.0 28.4 142.3 12.7 3.2 15.9 19.9 7.1 D. Sprinkler Irrigation 17.5 5.7 23.2 1.9 0.6 2.5 24.6 1.2 E. Village Water Supply 170.8 36.8 207.5 19.0 4.1 23.1 17.7 10.3 F. Village Access Roads 38.9 9.1 48.0 4.3 1.0 5.3 19.0 2.4 G. R&D and Training 45.4 8.9 54.4 5.0 1.0 6.0 16.4 2.7 Total Baseline Costs 1,726.9 283.0 2,009.9 191.8 31.5 223.3 14.1 100.0 Physical Contingencies 119.8 19.6 139.4 13.3 2.2 15.5 14.0 6.9 Price Contingencies 475.7 77.8 553.4 52.9 8.6 61.5 14.1 27.5 TOTAL PROJECT COSTS 2,322.4 380.3 2,702.7 258.0 42.3 300.3 14.1 134.5 4.02 Cost estimates are based on April 1982 prices. Physical contingen- cies, which were estimated separately for each component range from 5 to 10% and total 6.4% of total estimated project costs. Price contingencies account 4.0,o (,OSL esLimaces are based on April 1982 prices. Physical contingen- cies, which were estimated separately for each component range from 5 to 10% and total 6.4% of total estimated project costs. Price contingencies account -.33- tor about 27% of total project costs and are based on the following expected inflation rates: 1982/83 1983/84 1984/85 1985/86 Local Expenditures (%) 8.5 8.0 7.5 6.0 Foreign Expenditures (%) 8.0 8.0 7.5 6.0 Financing 4.03 The proposed IDA credit of US$150.0 M would finance about 50% of total proiect costs, including 100% of foreign exchange costs ot US$42.3 M and about 42% of local costs. The IDA credit would be made to GOI on stand- ard terms. To avoid interruption of work ongoing trom Haryana I, the credit would include provision of US$3.2 M for retroactive financing of qualified project expenditures incurred on or atter February 1, 1983. 4.04 The credit would be channelled through GOH to finance GOH develop- ment budget expenditures on the proiect (Table 9). IDA would reimburse against eligible State budget expenditures for all components. GOI and GOH would insure a smooth and adequate flow of financing for project implementa- tion. 4.05 Agreement has been reached that GOI would make the proceeds of the IDA credit available to GOH for the project in accordance with established procedures for GOI development assistance to State governments. Agreement was also reached that GOI and GOII would insure adequate state budget resour- ces and financing to implement the project over the four-year project period. Procurement 4.06 Civil Works. Construction in the project totals about US$234.2 M including physical and price contingencies but excluding engineering and administration costs. The entire construction program consists of either improvements to existing conveyance systems or development of individually inexpensive augmentation tubewells, village water supply schemes, or village access roads. All works are small, and scattered throughout the State, and for canal and watercourse works because of canal operational constraints, subiect to short construction intervals. The lining and modernization ot over 370 different canals and about 1,900 different watercourses would util- ize approximately US$188.4 M ot the works. The construction ot about 325 tubewells, R&D pilot facilities, about 120 water supply schemes and about 197 km of village link roads serving 111 villages would utilize the remainder ot the works. The lining and modernization work must be done intermittently in small portions to minimize interruptions in the tlow of water to the users and procurement would be a continuous, ongoing process during the project period (Table 10). Canal closures would generally not exceed about two weeks. Even though packaging of works would be utilized whenever prac- ticable, only about US$10.0 M worth ot construction could be grouped in -34- packages of a magnitude that would interest foreign bidders. TWorks that would interest toreign tirms would be procured under international competi- tive bidding (ICB) procedures with domestic bidders given a 7.5% preference. The balance ot the works would be grouped as appropriate to attract maximum competition; however, because of the above mentioned constraints, the bid packages would generally be of less than US$5.0 million each. These works would be procured under local competitive bidding (LCB) procedures satisfac- tory to the Bank and in which toreign bidders would have an opportunity to participate. Because of the small and scattered nature of the works, and implementation timing only during canal closures, work order type bidding procedures would be used on small contracts costing less that US$25,000 each, and some works would be undertaken departmentally in aggregate totalling less than 15% of total civil works. 4.07 Goods. Equipment and materials totalling about US$19.5 M, includ- ing contingencies, would be grouped in appropriate bidding packages and procured by ICB in accordance with Bank Guidelines (Table 10). Qualified domestic manufactures would receive a preference in bid evaluation of 15% and bid documents would specify their eligibility and the manner of application ot the preference. Because ot existing servicing and spare parts facilities, considerable advantages would be derived from procuring locally manufactured light equipment and vehicles. Light equipment and vehicles are readily available domestically at competitive prices. These goods would be procured under LCB procedures tound satisfactory to the Bank, of contract size less than US$100,000 and not to exceed US$5.0 M in total. 4.08 Contract Review. All bidding packages tor works estimated to cost US$0.5 million equivalent, and all ICB packages for goods, would be subject to IDA's prior review of procurement procedures resulting in a coverage of about 70% of the total estimated value of works and 85% of goods procurement. The balance of contracts would be subject to random post review by the Bank. 4.09 Standard Bid Documents. The Central Water Commission of GOI has recently developed model ICB and LCB bidding documents and procedulres for both works and goods procurement. The models have been approved by the Bank, and GOH will use them in their procurement. Disbursements 4.10 Disbursement of the IDA credit would be made for: (a) 100% of the foreign expenditures on directly imported goods, materials, vehicles and equipment; (b) 100% of the ex-factory price on locally manufactuired goods, materials and equipment, or 70% of cost where the ex-factory price is unavaiLable; (c) 70% on civil works expenditures; and -35- (d) 100% of expenditures on training and on R&D pilot projects, studies and experiments. 4.11 Disbursements against (a), (b), (c) and (d) will be fully docu- mented except tor work undertaken departmentally and tor individual payments of less than Rs 300,000 under civil works contracts and Rs 150,000 for equip- ment, instruments, vehicles, goods and materials which would be made against certificates of expenditure itemized by project component. Disbursements for watercourse modernization and ATWs under item (c) would also require a cer- tificate of completion certified by HSMITC and/or ID for each watercourse or ATW. Certiticates of Completion would verity satisfactory completion of all works according to agreed planning, design and quality standards, and in addition tor ATWs completion of electrification and operational discharge capacity of at least 70% of design. Documentation of expenditures would be retained by GOH and made available for inspection by IDA review missions. The estimated implementation schedule, estimated semiannual disbursement schedule, and proposed allocation of the credit proceeds are presented in Tables 11, 12 and 13, respectively. The estimated disbursement schedule is based on continued implementation (without start-up period) at rates achieved in recent years under Haryana I. It is expected that disbursements would be completed by August 31, 1987, about eight months after project completion. Assurances were provided by GOI and GOH that the project would be implemented substantially in accordance with the estimated implementation schedule, and that reimbursement claim applications for ATWs and watercourses would be accompanied by Certificates of Completion issued by HSMITC. Accounts and Audits 4.12 The project would be subject to normal Government control and auditing procedures which are satisfactory. A resident Audit Officer, repre- senting the State Accountant General, would audit the project accounts. Separate accounts would be maintained for project expenditures. Although continuous and annual audits are carried out in a timely manner, their finalization is a lengthy process in the Statutory Audit Report presented to the Legislature. It would be essential therefore to have interim certified statements of account. Such statements, certified by the AG or his designee, and supported by an itemized account and a summary of the expenditures, would be submitted to IDA as soon as possible after the end of each fiscal year. Agreements have been reached with GOH that they would: (a) maintain separate accounts for project expenditures; (b) ensure that these accounts are audited annually by the AG and the resulting interim statements of account are sub- mitted to IDA as soon as possible but not later than nine months after the end of each fiscal year; and -36- (c) make complete accounts and financial statements available for inspection during IDA review missions. In addition, assurances were provided by GOI and GOH that audited accounts for HSMITC for 1976/77 through 1980,181 would be supplied to IDA by September 30, 1983. V. ORGANIZATION AND MANAGEMENT General 5.01 Implementation arrangements for the project would follow the same pattern as in the ongoing Haryana I Project. Implementation would be the responsibility of the following specific GOH agencies: Irrigation Department for canal modernization, sprinkler irrigation, training and R&D; Haryana State Minor Irrigation (Tubewells) Corporation for watercourse modernization and for augmentation tubewells; State Electricity Board for electrification of tubewells; the Public Health Branch of the Public Works Department (PWD) tor village water supply schemes; and the Bridges and Roads Branch of PWD for village link roads (Chart 24085). Coordination 5.02 To insure adequate coordination in the first Haryana Irrigation Project, GOH established a Project Planning and Monitoring Committee report- ing to the Secretary, Irrigation. Under the proposed project, that Committee would report to the GOH Irrigation Secretary and Finance Commissioner and act through its member/secretary, the Engineer-in-Chief, Irrigation. The Commit- tee comprises the heads of various agencies involved in or related to project implementation. It provides policy level guidance and coordination, monitors progress in physical and financial terms, and ensures adequate liaison and communication between the various implementing agencies, GOH and IDA. The Committee also helps tacilitate provision ot statf, equipment and other requirements necessary for satisfactory performance of the project. The Irrigation Department is the lead agency tor the project, and day-to-day coordination and monitoring work is supervised by the Chief Engineer, Projects, in the Irrigation Departmlent, who tunctions as the Project Manager. These arrangements for coordination have operated satisfactorily under Haryana I. Project Management 5.03 Irrigation Department. Canal modernization would be planned, designed, scheduled and implemented by the GUH Irrigation Department (ID) which would also be responsible for implementing the sprinkler, training and R&D components ot the proposed project (Chart 24U86). Staffing and equipment tor the canal modernization component in Haryana I have been adequate and would be continued under the proposed project. For etficient implementation -37- of canal and watercourse modernization, close coordination between canal operations, canal lining and watercourse modernization is essential. This has been done under Haryana I through informal working committees comprising the Superintending Engineers (SEs) for the relevant ID circles tor canal operations and lining and the HSMITC watercourse lining circle in each canal circle where lining works are underway. These SE committees provide coor- dination and insure that modernization works meet design standards, are subject to adequate quality control procedures, and maximize improvements in operational and management efficiencies from project investments. This practice would be continued under Haryana II. 5.04 Under Haryana I, a multidisciplinary Monitoring and Evaluation Unit was established in ID which would continue under Haryana II; ID now monitors lining work and the impact and benefits of lining for every channel lined under the proiect. Under Haryana I that Unit had responsibility for R&D work also. Haryana II would expand R&D activities substantially, and add a train- ing component. To handle the increased R&D and training workload, a special R&D and Training Unit (RDTU) has been established (para 3.54). 5.U5 RDTU reports to the Engineer-in-Chier or the Irrigation Department, and is headed by the Chief Engineer, Design assisted by sufficient senior statt to oversee worK and activities in several broad areas, including design and technology, management and manpower, farmer organization, and training. Senior RDTU statt would be multidisciplinary and would include agricul- turalists, agricultural engineers, and agricultural economists. RDTU would plan, deslgn, arrange and monitor R&D pilot projects, experiments and studies under the project, and would plan and arrange training programs for ID and related statt. In general RDTU would implement R&D studies and training activities through other organizations, institutions and consultants on a contract basis, although it would undertake such activities on its own or through ID staff if necessary. It would have specific responsibility to oversee and coordinate the technical content of pilot project work by Special Project Units (paras 5.07 and 5.22) and other ID staff working on pilot projects, studies and experiments. 5.06 In addition to RDTU, a technical level R&D Steering Committee has been formed (para 3.54). The Chairman of the Steering Committee would be the Engineer-in-Chief, Irrigation. The Committee would comprise senior GOH officers from ID, the Agriculture Department, engineering and agriculture universities, and other organizations and agencies as needed and related to the R&D and training work program. The purpose of the Steering Committee would be at the technical level to help advise, guide, monitor and support the efforts of RDTU. RDTU would function as the secretariat for the Steering Committee, which would report on a regular basis through the Engineer-in-Chief to the Irrigation Secretary. Agreements have been reached that GOH would maintain and appropriately staff RDTU and the Steering Committee within ID, and assurances were provided by GOH that RDTU would be headed by an officer not below the rank of Chief Engineer, and that it would have divisions (each headed by a Director of SE rank or equivalent with necessary supporting -38- staff) for advance planning, engineering, water regulation and control, agro-economics, and monitoring, evaluation and training. 5.07 At the field level to implement sprinkler irrigation, pilot project and R&D activities, a Special Project Unit (SPU) would be formed under the Superintending Engineer (SE), Canals for each canal Circle where such activities are located. SPU would report to the local SE, but would be functionally responsible to RDTU for the technical content of its work. SPF tunding levels would be determined by RDTU on the basis of work plans for each SPU; arrangements for funding SPU activities would follow patterns already established tor financing other ID project components. The local SE would insure adequate coordination with other Divisions in the Circle and implementatlon by SPU ot actual field work and activities according to plan. SPUs would also undertake farmer organization work under the sprinkler and pilot project components, and would provide guidance, support and monitoring as necessary for farmer organizations developed under the project. Each SPU would comprise a multidisciplinary field team headed by an officer of the rank of Executive Engineer, and SPIJ staff would include agriculturalists and agricultural engineers. SPUs would seek to promote the positive involvement and responsibility of engineers and other ID staff for efficient management of water, up to the point of water delivery to farmers and efficient applica- tion in the field. Agreements have been reached that SPUs would be formed in ID as above by June 30, 1983 tor undertaking tield R&D activities under the project, and for supporting and monitoring Sprinkler Irrigation Associations. 5.08 Haryana State Minor Irrillation (Tubewells) Corporation. As in Haryana I, the Haryana State Minor Irrigation (Tubewells) Corporation (HSMITC) would be responsible for modernization of watercourses and for construction of ATWs under the proposed project (Chart 24087). HSMITC is a public sector corporation established in 1970 to install and manage deep tubewells and undertake other minor irrigation works which would improve irrigation efticiencies throughout Haryana, and to tap institutional finance sources. In general, financial management of HSMITC has improved considerably during the implementation of Haryana I. The implementation performance of HSMITC in Haryana I has been satisfactory, although shortages of key materials and funding limitations have prevented achievement of appraisal targets. Implementation rates for watercourse modernization and augmentation tubewell construction proposed under the Haryana II project are based on actual achievements under Haryana I. The multidisciplinary Monitoring and Evaluation Cell established under Haryana I by HSMITC has also operated satisfactorily, and its work would be strengthened in Haryana II to more rigorously quantify the progress, benetits, costs, and general impact of watercourse modernization using outside contracted research agencies as well as HS-ITC statt and resources. 5.09 GOH would provide for adequate financial support to HSMITC to enable construction of watercourses and construction and electrification of ATWs, according to the project implementation schedule. GOH would also -39- collect from beneficiaries partial repayment of capital costs for construc- tion of watercourses and a watercourse maintenance fee which would be trans- ferred to HSMITC. Assurances have been provided by GOH that HSMITC would maintain separate records to reflect revenues received and expenditures incurred on operation and maintenance of watercourses modernized under the project. 5.10 Haryana State Electricity Board. The Haryana State Electricity Board (SEB) is an autonomous government agency which has general respon- sibility for electricity and power matters throughout the State. Under the project, SEB would provide lines and power connections for the 325 project ATWs. SEB makes some 20,000 tubewell power connections a year, and connec- tions under the project would be only a small part of the total SEB program. SEB implementation capacity is adequate as demonstrated in Haryana I. Assurances have been provided by GOH that SEB will provide uninterrupted power supplies to project ATWs through dedicated power lines, and that no other connections will be allowed on those power lines. 5.11 Public Health Branch of PWD. The Public Health (PH) Branch of the Public Works Department (PWD) would be responsible for design and construc- tion of village water supply schemes under the project. PH is responsible for construction, operation and maintenance of all rural water supply schemes in Haryana and would undertake the survey, design, administration and super- vision of village water supply works included under the project. The Public Health Engineering Department is headed by an Engineer-in-Chief based in Chandigarh who would oversee implementation of the project. He is assisted by a Chief Engineer, twelve Superintending Engineers, and other technical and non-technical staff. To implement the project, PH plans to increase its implementation capacity by increasing field staff strength the equivalent of about two new Circles. To insure a continuous and up-to-date picture of expenditures on water supply undertakings in the State, GOH would establish an Accounts Unit in the PH head office. Overall direction of all sanitary projects in Haryana is vested in the State Sanitary Board which formulates general and technical sanitary policy for the State, and has consultative, executive and directive functions. The implementation performance of PH under Haryana I hias been satisfactory. 5.12 Under the project, PH would also establish at headquarters a suitable Appraisal and Monitoring Cell headed by a Chief Engineer with key staff including one Superintending Engineer, four Executive Engineers, four assistant Engineers and supporting staff. The Cell would appraise the detailed design of each water supply scheme with particular reference to cost effectiveness, submit reports on each scheme, and develop and coordinate a system for monitoring the operation and maintenance of completed schemes in order to help provide data to verify or improve current design criteria tor future schemes. Assurances have been provided by GOH that a centralized Accounts Unit would be established at the PH head office. In addition, agreements have been reached that GOH would establish by June 30, 1983 a suitably staffed Appraisal and Monitoring Cell in PH. -40- 5.13 Buildings and Roads Branch of PWD. The Buildings and Roads (B&R) Branch of PWD would be responsible for implementation of the village access roads under the project. B&R is responsible for construction and main- tenance of roads throughout Haryana. The B&R Branch is headed by a Chief Engineer who is assisted by three additional Chief Engineers responsible respectively for national highways, state highways, and all other roads and buildings. Seven regular B&R field circles and their divisions would be responsible for execution of the prolect road works and would undertake the necessary survey, design, administration, departmental works (paving), and supervision. B&R has been engaged for a number of years in a major road construction program of which this project is a small part, and the organiza- tion is well staffed and equipped to execute the project without strengthen- ing. B&R would also undertake the village roads pilot and traffic patterns studies under the project. O2eration and Maintenance 5.14 Operation and maintenance (O&M) would be the responsibility of the implementation agencies above, except for watercourses which are the respon- sibility of the beneficiaries. Agreements have been reached that GOH would make adequate arrangements for operation and preventive maintenance of all buildings, vehicles and equipment provided under the project. 5.15 Canals. Canal O&M in most areas covered under the project is primarily the responsibility of the Chief Engineer, Canals, who supervises seven canal circles covering the Bhakra Canal and WYC Systems (Map 16552 and Chart 24086). Lift area projects are still under construction, and tt\eir O&M is the responsibility of the Chief Engineer, JLN. Present O&M expendi- tures and procedures for the canal network are adequate. Project canal modernization and lining works are expected to reduce the difficulty and expense of O&M, raise receipts from water charges, and improve the overall operational capability of the system in meeting specified performance stand- ards. 5.16 Specifically, canal modernization works under the project will open the possibility to modify standard canal operating procedures for improved timing of water deliveries to farmers, in addition to generally increased and more reliable water supplies. For example, canal lining and modern- ization greatly reduces the time required for filling canals after an off-rotation. Under the project, RDT-U in conjunction with the ID canals wing would study and develop alternative operating procedures to fully utilize the improved capabilities of the modernized system, and test new operating proce- dures in selected areas. Assurances have been provided by GOH that improved canal system operations and regulation would be studied under the R&D com- ponent of the project. 5.17 A key requirement for efficient irrigation system operation and management is to closely monitor performance and regularly report performance -41- results. Present reporting procedures are relatively limited in scope and not focussed on increasing efficiency. Under the project, ID through RDTU would design, test and implement an improved management information and a performance reporting system which would be continuous and include details on water delivery targets and achivements, irrigated area and yields, finan- cial expenditures and receipts, and manpower requirements and turnover. Reports would be issued annually shortly after the rabi season and made available to IDA. Assurances were provided by GOH that improved canal canal operations performance reporting systems would be developed under the R&D component of the project. 5.18 Canal operations staff are generally competent and dedicated. However, a major difficulty faced in achieving high management efficiency in canal operations is frequent transfer of staff. A study of ID manpower resources, utilization and staffing requirements for improved canal opera- tions, including measures to promote continuity in posting of canal opera- tions staff, would be included in the R&D studies under the project. 5.19 Watercourses. Under the Haryana Canal and Drainage Act watercourse O&M is the responsibility of the farmer beneficiaries or shareholders of the watercourse. Watercourse operation is based on a time rotation of water supply, or warabandi, with each shareholder in turn taking the entire water- course flow for a specified time based on land holding size according to the warabandi schedule which is legally sanctioned. Each farm holding is served by an individual turnout or field channel. ID becomes involved only in cases of dispute. Watercourse maintenance is the collective responsibility of the shareholders, although ID is empowered to undertake maintenance at the farmers' expense should they fail to act voluntarily. 5.20 Lined watercourses constructed under the project are expected to generally require less maintenance, compared to unlined watercourses. However, maintenance which is required is generally beyond the direct capabilities of the shareholders involved. For watercourses lined under the project, HSMITC would undertake to maintain the channel on a contract basis. Under Haryana II, the shareholders on each watercourse would at the time a watercourse is modernized form a Shareholders Maintenance Committee (SMC) which would periodically inspect the watercourse, report to ID/HSMITC on its condition, and monitor and check maintenance works done; SMCs would be monitored by and registered with the local SE, Canals, who would provide guidance and oversight for SMC development. Agreements have been reached that GOH would develop and furnish to-IDA by December 31, 1983 plans specify- ing procedures and timetables for forming SMCs on project watercourses including a model draft maintenance agreement between ID/HSMITC and the SMCs, and under those plans carry out arrangements between SMCs and ID/HSMITC for effective maintenance monitoring and reporting procedures and mechanisms to insure prompt and timely watercourse maintenance work as required. -42- 5.21 Augmentation Tubewells. ATWs under the project would be operated and maintained by HSMITC on behalf of ID. Performance of HSMITC with O&M of existing ATWs under Haryana I has been adequate. 5.22 Sprinkler Irrigation and R&D Pilot Projects. The canals wing of ID presently operates some 130 sprinkler sets in the project area, and would be responsible for O&M of sprinkler equipment provided under the project. The Special Project Units (SPUs) established to implement sprinkler irrigation and pilot activities under the project would also be responsible for O&M work in sprinkler and pilot components. The local SE, Canals, would oversee and direct O&M work by each SPU, in coordination with RDTU. SPUs would also be responsible to monitor and support the operation of farmer organizations (SIAs and TWUAs). 5.23 Village Water Supply Schemes and Village Access Roads. O&M of village water supply schemes under the project would be the responsibility of the PH Branch of PWD. PH is presently responsible for O&M of a large number of such schemes serving some 1,500 villages throughout the State. Performance of O&M by PH under Haryana I has been adequate. 5.24 Maintenance of village access roads constructed under the project would be the responsibility of the B&R Branch of PWD. B&R currently main- tains a 19,000 km network of roads throughout the State, and performance under Haryana I has been adequate. Quality Control 5.25 Quality of works constructed under Haryana I has generally been good. Measures to further strengthen and improve quality control of irriga- tion works, and to insure public confidence in the completed facilities, would be developed under Haryana -[I, primarily with regard to canal and watercourse modernization. Possible measures would include provisions for objective evaluation of completed works, random laboratory testing of materials (e.g., mortar and bricks), "run-in" periods to insure design opera- tional specifications are met, involvement of beneficiaries and publication of the final results of quality control tests for each canal or watercourse upon completion of testing and run-in procedures. Assurances were provided by GOH that quality control practices, procedures and organization would be studied under the R&D component of the project. Monitoring and Evaluation 5.26 Interdisciplinary monitoring and evaluation (M&E) units were estab- lished in ID and HSMITC under Haryana I. M&E units would continue to carry out monitoring and evaluation studies under Haryana II (paras 5.04 and 5.08). These studies would focus in particular on identification and quantification of project benefits and incorporate greater interdisciplinary input. In addition, M&E units would arrange, monitor, supervise and review monitoring -43- and evaluation studies to be contracted to outside agencies such as the Haryana Agriculture University in Hissar. VI. AGRICULTURAL PRODUCTION AND BENEFITS Agricultural Impact 6.01 Project investments in irrigation works will save water presently lost to seepage and augment canal supplies with groundwater,3together adding at full development an estimated total of more than 1,700 Mm to Bhakra and WYS water supplies compared to present average annual supplies of about 9,200 Mm at the canal headworks. These increased water suppliep are expected to result in some 245,000 ha of added area irrigated which is the main benefit used in economic analysis of the project. In addition, modernization works are expected to enable substantial improvements in canal system operational and management efficiency and to result in more reliable and timely water supplies to farmers. The project should therefore also provide benefits from more profitable cropping patterns and increased yields, although these benefits are excluded from the pro,ject analysis. 6.02 Expansion of Irrigated Area. Expansion of irrigated area is the main benefit assumed from project investments. Any water saved or added in the existing canal commands will have a ready and productive use, because at present each farmer generally receives only enough water to irrigate each season only a part of his irrigable land (Table 14). Increases in agricul- tural production assumed under the project would result trom the increase in irrigated area, with benefits generally spread throughout the canal system CCAs. In the modernization work, present GOH policy is to maintain the same "design duty" of water (1 cfs per 168 ha) for sizing watercourse outlets on any channel which is modernized, and to keep water saved from lining that channel in the "pool" thereby increasing water supplies available to the system as a whole; ATW water adds similarly to water supplies available to the system. Only at the watercourse level would water saved by lining be used directly in the chak where it is saved. 1/ Increases in irrigated area as a result of the project would be as follows (Table 15): 1/ In practice, a substantial portion of the water saved from watercourse lining may be transferred back to the system "pool" when over-sized watercourse outlets are modernized (reduced) to meet design standards. -44- Bhakra WYC Total Kharif Rabi Kharif Rabi Kharif Rabi Both -------------------- 000 ha------------------------ Canal Modernization 53 61 16 18 69 79 148 Watercourse Modern- ization 14 21 3 3 17 24 41 Pump-lift Watercourses - - 3 5 3 5 8 Augmentation Tubewells 15 23 4 6 19 29 48 Total 82 105 26 32 108 137 245 6.03 Crop Patterns and Area. Modernization works are expected to help improve the reliability of canal water deliveries to farmers, as well as increase the quantity of water supplied. In addition, the impact of keeping saved water in the "pool" for the entire system (rather than increasing outlet sizes) will under current operating procedures result in increased average running days for the irrigation networks. The additional water would thus be provided by changing the schedule (increasing the frequency) of irrigation deliveries, rather than simply increasing the quantity supplied with each irrigation. 6.04 Increased frequency of irrigation deliveries is expected to enable production of more drought-sensitive crop varieties; for example, more cul- tivation of high yielding wheat varieties which tend to be more sensitive to water stress compared to traditional varieties. In addition, greater reliability and dependability of canal water supplies may result in less cultivation of crops like gram which is often grown as a hedge against risk, because it is very drought resistant if irrigation supplies do not come as expected; gram might be replaced by wheat, which is more sensitive to water stress but which is also much more profitable compared to gram if water supplies are adequate. 6.05 Preliminary survey data currently available indicate some changes in crop patterns have occurred in areas where modernization works are com- plete. These data are, however, very tentative, and benefits assumed under the proposed project are estimated on the basis of relatively small changes in crop patterns (needed for technical and agronomic reasons in the cropping schedule) over the increased irrigated areas in the canal commands. For the project area as a whole, estimated crop area changes at full development are as follows (Table 16): -45- Season and Without With Change due Crop Project Project to Proiect ------------------ 000 ha-------------- Kharif Paddy 177 211 34 Bajra 143 143 0 Cotton 336 372 36 Other 74 109 35 Total Irrigated 730 835 105 Rainfed 895 895 0 Fallow 631 526 -105 Rabi Wheat 594 729 135 Gram 127 116 -11 Mustard 102 118 16 Other 169 169 0 Total Irrigated 992 1,132 140 Rainfed 480 434 -46 Fallow 776 682 -94 6.06 Crop Yields. Benefits under the project are estimated on the basis of existing average yields for irrigated crops as reported in the project area. For maior crops, these yields are 3.9 t/ha for HYV paddy, 0.9 t/ha for baira, and 1.2 t/ha for cotton, 2.3 t/ha for HYV wheat, 0.9 t/ha for gram and 0.7 t/ha for mustard. These estimates are conservative, because some yield improvement due to more frequent and timely irrigations, using the same amount of water applied, can be expected as a result of modernization. Experimental crop research clearly indicates a significant yield response to better-timed and more frequent irrigations for some crops. In addition, currently available field survey data from Haryana I, although very prelimi- nary, does indicate some improvement in yields in areas where modernization works have been completed. 6.07 Under field conditions the typical practice of irrigation by Haryana farmers is to spread their available canal water supplies as thinly as possible, with the objective of maximizing production per unit of water which is generally the limiting factor in their operations. This is done partly through conscious action by the farmer when he decides each season how much land to sow for irrigation, and partly through the rationing system inherent under the present operating procedures for the canal system. Opera- tion of the canal system typically provides the farmer with water a certain number of times during each season, say 5 to 7 times in the rabi season. The farmer cannot predict very accurately or control the quantity or timing of water deliveries. Canal modernization works, combined with the GOH decision -46- to keep saved water in the canal system "pool," should increase the frequency of irrigation deliveries and to some extent result in better timed irrigation supplies thereby reducing yield loss through water stress. For example, an approximate increase of 10% in water available in the system should increase the average system running days and number of irrigations supplied to wheat from, say, 3.0 to 3.3 which in effect would give about 30% of the farmers four irrigations while the remainder continue to receive three irrigations. Each irrigation in that range of water application is in practice worth about 0.5 t/ha of wheat which would mean a 20-25% increase in yield for the one-third of the tarmers who received four irrigations, or an average yield increase of about 6 to 8% for all wheat growers. This effect could be expected to some extent almost automatically due to increased water delivery frequency, with the same amount of water applied, and would be in combination with expanded area irrigated as a result of larger total water supplies. Part of this increase in yield would result from heavier use of fertilizer by farmers in response to more reliable and better timed water deliveries. 6.08 Production and Value. Farmers in the project area are well experienced with irrigation and have available irrigable land, and present irrigation system operations can readily accommodate the additional water generated by project investments. Benefits from modernization are expected to accrue without a significant lag time, and the project would therefore reach full development within two years after project completion at the end of 1986. Based on the area, crop and yield assumptions above, the project is expected to generate incremental production totalling some 491,000 tons valued at about Rs 977 M annually at full development, as follows (Table 17): Paddy Wheat Gram Mustard Other Cotton Total '000 tons 126 311 -30 6 31 47 491 Rs M 272 609 -34 15 13 102 977 6.09 Field Efficiency and Deep Percolation. Not counted in project benefits is the likely increase in field or water application efficiencies due to more timely and reliable water deliveries. Full realization of such improvements may take some time as farmers adapt to improved water delivery patterns. Currently the time-quantity distribution of water deliveries during the season is very uncertain from the farmers' viewpoint. Because a farmer never knows for sure when he will get his next irrigation, it is likely that he will tend to overirrigate, in an effort to store more water in anticipation of a long interval before his next irrigation. However, in any particular irrigation if water application exceeds actual crop water use since the previous irrigation, wal'er will probably be lost to deep percola- tion, eventually adding to groundwater which in 60% of the area is brackish. More reliability and certainty in water deliveries is expected to encourage more efficient field application of water, resulting in less water lost to deep percolation, which should enable available water to irrigate more area and should also reduce additions to groundwater. -47- Market Prospects 6.10 Haryana produces a significant agricultural surplus in foodgrain and cotton. India, however, is expected to remain marginally deficient in food grains, and to continue importing a significant amount of long staple cotton. Market prospects for major crops produced in the proiect area are therefore favorable. The State has a well developed system for marketing, storage, distribution, and processing of agricultural produce, and no serious constraints in marketing are foreseen. In addition, a major purpose of the canal modernization effort is to provide a much more reliable and flexible irrigation supply, which will enable farmers to more readily adiust to chang- ing market opportunities. Financial Prices and Crop Budgets 6.11 Prices used in crop budget analysis are derived from field data, the Statistical Abstract of Haryana, 1980/81 and "Profitability of Crops in Haryana", Haryana Agriculture University, November, 1981. Projected finan- cial prices are expressed in constant 1982 values (Table 18). Financial crop budgets for a typical irrigated hectare in Bhakra and WYC have been estimated based on present cultivation practices and input use (Tables 19 and 20), and average returns per unit area irrigated and per unit of water are estimated as follows: Canal Financial Net Benefits Value of Water /a System Rs/ha Rs/m3 Bhakra 1,627 0.88 WYC 1,536 0.76 /a For rabi season only. Watercharges and Cost Recovery 6.12 Canal and Watercourse Modernization. In Haryana, an estimated 90% of the farmers have access to canal irrigation. Furthermore, the benetits of irrigation are spread throughout the State's economy and are a major force behind the State's rapid economic growth and development. Partly due to that development, Haryana has a good record of effective resource mobilization in general and State revenues per capita have been about twice the national average in recent years. These revenues allow the State budget to support a high level of development expenditures, and in the irrigation sector, GOH has been able to apply adequate financial resources, from whatever the source, for O&M to insure efficient operation of the State's canal systems. For GOH the issue of cost recovery through water charges, versus for example higher marketing fees, is primarily a matter of administrative convenience and political feasibility rather than st:ructuring specific charges for water that pay the full cost of irrigation service. In addition, because of irriga- tion's role in the general development of the State, allocation of some portion of the State's general tax revenues to irrigation would be justified. Analyses presented here considers onily water charges, differential land taxes on irrigated land, and the portion of agricultural market fees which goes to the State treasury. 6.13 Canal modernization under thie proposed project will be limited to the Bhakra and WYC systems. In recent years, water charge receipts for the Bhakra System have more than covered O&M expenditures, while for W4YC receipts have not covered O&M costs (Table 21). Water charge receipts tend to rise and fall from year to year, but considering Bhakra and WYC together, over the last five years, receipts have totalled some 95% of O&M4 expenditures. The shortfall in the W4YC receipts is due largely to the small amount of water available to the system relative to the CCA and the resulting low irrigation intensity, and the age of the system and consequent high maintenance require- ments. The new Sutlej-Yamuna Link Canal scheduled for completion in 1984 will provide more water and thus higher receipts with little impact on O&M costs, and canal modernization should both increase water charge receipts and reduce canal O&M costs. In addition to canal water charges, farmers would under Haryana II make payments annually amounting to about 45% of watercourse modernization capital costs (amortized at 10.5% over nine years) plus a watercourse maintenance charge of 3% of capital costs annually (para 1.27). These farmer payments would be collected by the State Revenue Department and transferred to HSMITC by GOi, which would in addition provide the remaining 55% (paras 1.27, 1.28 and 6.21). Agreements have been reached with GOH that canal water charges would cover canal O&M costs plus a reasonable share of canal modernization costs, and that for watercourse modernization additional charges collected annually from farmer beneficiaries would amount to at least 45% of amortized watercourse modernization capital costs including water- course maintenance charges of about 3% of watercourse capital costs. 6.14 Water Charge Rates. Water charges for canal irrigation are fixed under the Haryana Canal and Drainage Act of 1974, and are levied on a per hectare basis according to crop. For some crops, they differ by canal sys- tem, with the rates for Bhakra irrigation, for example, being somewhat higher for certain crops than the rates for WYC where water supplies are relatively less. Bhakra watercharge rates per hectare for major crops are Rs 100 for sugarcane, Rs 75 for rice, Rs 68 for oil seeds, Rs 63 for wheat, cotton and gram, and Rs 50 for baira. Rates for-the WYC irrigation are the same except for sugarcane (Rs 85) gram (Rs 48) and wheat (Rs 45). W4ater rates were raised in 1976 by amendment to the law. Annual revenues from water charges on a CCA basis averaged for the years 1975/76-79/80 were about Rs 46/ha for Bhakra and Rs 34/ha for WYC. In addition to watercharges, farmers also pay a differential land revenue tax on irrigated land. Including that tax brings the effective revenue per hectare of CCA at present to Rs 56 for Bhakra and Rs 43 for WYC. -49- 6.15 Volumetric Water Charges. Starting with the Indian Irrigation Commission Report of 1901-03 and continuing to the present, introduction of volumetric water charges has been repeatedly recommended as a way of promot- ing more efficient water use. Because ot the particular irrigation design and operational practices used in Haryana, it is one of the few States of India where a system of volumetric charges could be introduced without major changes. The water charges study completed under Haryana I recommends that a time-based system of (volumetric) charges be introduced in phases, 1/ and also noted that this will require that channels when flowing are kept strictly at FSL to insure that each farmer gets the design volume of water. On its own initiative, GOH modified its irrigation legislation to permit time-based water charges in 1976, and began experimenting with a method of volumetric water charges (termed warimetric charges). The R&D component of the proposed project would include two pilot projects, one directly to promote expansion of the warimetric system, and the other to introduce new technology and management aimed at better control of FSL in running channels (paras 3.54-3.60). These two pilot efforts would be undertaken as a package in part to test and promote volumetric water charges. 6.16 Farmers' Ability to Pay and Estimated Cost and Rent Recovery. Estimates of farm income per incremental irrigated hectare as a result of project irrigation investments indicate that farmers will have good financial ability to pay for both canal modernization and ATWs, and for watercourse modernization (Table 22). Based on estimated incremental income and costs, estimated annual project rent at full development would be Rs 1,415/ha for watercourse modernization (Table 23). Considering water charges, differen- tial land revenue, and agricultural marketing fees of 3% (about two-thirds of which go to the State treasury) collected at present by GOH, together with GOH plans to collect on watercourse modernization works an annual O&M charge of 3% and 45% of the investment cost (amortized at 10.5% interest over 10 years including one year of grace), recovery of estimated cost and rent would be as follows (Table 24): Rent Cost . Recovery % Recovery % Canal Modernization & ATWs 15 88 Watercourse Modernization 20 53 6.17 Village Water Supply. Present GOH policy is to recover O&M costs of village water supply schemes from each village served, up to 50% of the village's annual income (see para 1.29). Agreements have been reached that 1/ "Techno-Economic Study of the Recovery of Water Related Charges in the World Bank Assisted Haryana Irrigation Project", National Council of Applied Economic Research, May 1982, p.3. -50- under the project GOH would recover full O&M costs from village panchayats for all village water supply schemes. Repayment for Watercourse Modernization 6.18 Under Haryana I, watercouLrse modernization for each chak was financed through ARDC on-lending to HSMITC, and farmers were responsible for repayment of the loan for their watercourse in proportion to their land holding size relative to the total size of their chak. Loan repayment (plus a 2% of capital cost annual maintenance charge) was treated as a direct obligation of the farmers and collected by GOH as a direct charge in addition to the standard canal water charge (para 1.26). 6.19 Under this system, which was at GOH initiative, collection rates were initially high, exceeding 90% in the early years. However, in 1979/80 following a severe drought, and on the basis of reduced farmer repayment capacity, GOR revised repayment requirements, eliminating repayment for small farmers with 1 ha or less of land and reducing repayment requirements by 50% for all other farmers (para 1.27). 6.20 Following the formula above, total repayment would average about 45% for all size farms combined. The revised repayment plan is consistent with GOI-sponsored CAD programs for watercourse lining in other parts of India, and is indeed far more ambitious in terms of cost recovery than present GOI norms specified for new projects. 1/ However, due to the sensi- tive and controversial nature of this issue, the revised repayment plan was finally implemented only in the 1982 kharif season (para 1.27). 6.21 Under Haryana II GOH would recover 45% of watercourse capital and maintenance costs (para 6.13). The watercourse maintenance charge and capi- tal cost recovery will be paid by beneficiaries in addition to their water charge and collected by the GOH Revenue Department (para 1.28). The capital cost repayments would be treated as a direct charge by government for improved irrigation service and not as loan repayments by farmers. To encourage repayment, the project :includes measures to promote more effective farmer participation and involvement. In addition, the ability and willing- ness of farmers to pay for watercourse investments will depend on rapid development of benefits from those investments. The work of CADA, which 1/ Under present norms, watercourse construction and lining are to be considered part of the Government irrigation system, and recovery would therefore be as a portion of water charges; as indicated in the Seventh Finance Commission Report (1978) and the Sixth Plan, the target by 1983/84 is that water charge receipts should cover working expenses of the Government irrigation system (i.e., including watercourses) and provide a return of 1% on the total capital invested. See "Economic Situation and Prospects in Ir,dia", May, 1982, page 126. -51- particularly in pump-lift commands has a primary role in such development, has been handicapped by lack of direct ties to the Irrigation Department. To help promote better coordination, effective farmer involvement and rapid achievement of benefits from project investments, responsibility for CAD has been placed under the Irrigation Secretary. VII. ECONOMIC ANALYSIS AND JUSTIFICATION General 7.01 All project components are important parts of the continuing GOH development strategy to further the welfare of the State's predominantly rural population through investments to increase productivity and income in agriculture and direct provision of services in the rural sector. Irrigation development has been perhaps the key driving force behind general economic development in the relatively arid climate of Haryana. With the completion of the Sutlej-Yamuna Link (SYL) Canal in 1984, the last major addition to the water supplies available to Haryana will be developed. Even with the addi- tional SYL water, some 50% of the surface irrigation command, already served by canals, will remain unirrigated each season due to lack of water. Invest- ments designed to increase the efficiency of water delivery and use are therefore of primary importance in maintaining the strong pace of economic and agricultural development in the State. 7.02 GOH development strategy also aims at balanced general economic progress and includes development of production support services and social infrastructure to improve the quality of life and health for the rural agricultural population, and indirectly to raise their productivity. Project investments in village water supply and village access roads, which are particularly targeted on those areas and villages most in need, are an integral part of the project. Benefits and Beneficiaries 7.03 Irrigation investments would at full development in 1989 directly increase agricultural production in the State by about 491,000 tons of foodgrain and raise net farm income some Rs 540 M (US$60 M) annually. In addition, the project would generate substantial indirect social benefits from village access roads and water supply schemes. These indirect benefits have not been quantified due to lack of data and wide variations from scheme to scheme. The analysis here focusses on direct production benefits from irrigation investments, and calculations of economic rates of return for the project consider only those benefits. 7.04 Main project beneficiaries include Haryana farmers, Indian foodgrain consumers, and labor. The project would increase farm income, and benefit foodgrain consumers through greater production of foodgrain and sales -52- of low-priced foodgrains under GOI procurement schemes. Project construction activities would generate about 57 M man-days of construction employment over the four-year project period. In addition, as a result of increased irrigated area, farm employment would expand by about 10.4 M man-days in Bhakra and 7.0 M man-days in WYC command areas. Economic Analysis Assumptions 7.05 The benefit of project components in increased crop production are evaluated at projected world market prices which measure what India would have to pay for imports or receive for exports. Most costs, however, are for items not traded on the world market and are affected by tariffs and trade restrictions. To make costs and benefits comparable, a Standard Conversion Factor (SCF) of 0.8 in the economic analysis was assumed for use with non-traded items based on recent irrigation projects of a similar nature in India; the SCF used for traded items was 1.0. 7.06 Similarly, an average economic wage rate of 80% of the financial wage rate was used to approximate the economic cost or shadow wage rate for labor used in project construction and operation. Most labor will be used during off-peak periods of the agricultural season when labor demand and its opportunity cost are relatively low. Analyses of farm labor supply and demand in various Indian irrigation projects typically indicate a shadow wage rate for semi-skilled and unskilled agricultural labor of approximately 50% to 70%. Due to the high irrigated cropping intensity in Haryana, however, the shadow wage rate is considered to be somewhat higher than for most other States. Prices for fertilizer, pesticides and insecticides have been valued at projected world market prices. The economic prices for seeds and miscel- laneous charges have been assumed to approximate their financial prices, and the economic price of bullock power for farm operations is based on the prevailing rental price per bullock pair adjusted by the SCF. All crop budget models are based on financial prices. The projected future without the proiect assumes that existing cropping patterns persist. Benefits and costs are based on constant 1982 financial and economic prices. Economic Rate of Return for the Project 7.07 The overall economic rate of return (ERR) for the project based on estimated benefits and costs and using assumptions as above is 29%. The ERR values for the various irrigation components are summarized as follows (Table 25): -53- ERR Net Present Value /a Component / Rs.M Modernization of Canals 42.3 1,310.1 Modernization of Watercourses Gravity Areas 17.6 130.9 Pump-lift Areas 21.7 40.0 Augmentation Tubewells 46.5 227.2 Sprinkler Irrigation 62.0 113.6 Total Project 29.0 1,591.0 /a Discounted at 12%. The results above reflect large sunk costs (incurred years ago) in the exist- ing main irrigation systems, which constitute an important underexploited asset. The economic analysis of the overall project includes costs for village water supply and access roads but excludes costs of R&D and training. 7.08 Modernization of Canals. The only benefits quantified and used in the economic analysis are production increases as a result of irrigated area expansion due to reduced seepage losses from canal lining. Full benefits from canal modernization are assumed to accrue by the second year after completion of works. This is justified because in normal operations the canal system managers, and the farmers served, plan and operate to be able to accommodate substantial year-to-year variations in water supplies available in the systems. Additional benefits, such as reduced waterlogging and deep percolation, less water travel time, reduced weed growth, and improved opera- tional efficiency and ease of management have not been quantified or included in project benefits. Seepage loss reductiong from canal lining are conserva- tively estimated to average about 6 cfs/M ft of wetted perimSter, and estimated seepage losses saved total about 1572 cfs or 960 Mm annually (para 3.15-3.17). Based on experience with the Bhakra and WYC systems as presently designed and operated (i.e., at current efficiencies), the water saved would be sufficient to irrigate an additional area of 114,000 ha in Bhakra and 34,000 ha in WYC in rabi and kharif seasons combined. The incremental increase in the economic value of production with the project at full development will total about Rs 663.0 M annually, compared to canal modern- ization costs including physical contingencies of Rs 916.4 M (Table 25b). 7.09 Modernization of Watercourses. Benefits include reduction in seepage losses, improved operation, more reliable water deliveries, and more equitable distribution of water within each watercourse CCA. However, benefits are estimated mainly on the basis of increased irrigated area resulting from reduced seepage losses. Farmers in the Bhakra and WYC command areas are fully accustomed to irrigation, and watercourse improvements on each chak are clearly visible to farmers. Particularly in watercourse tail areas, the increase in stream size of water deliveries is apparent as soon as watercourse modernization works are complete. Full benefits from the works for each chak are therefore assumed to accrue by the first year following -54- completion of the watercourse. The estimated incremental value in crop production expected from watercourse modernization annually at full develop- ment totals Rs 221.0 M compared to estimated costs including physical contin- gencies of Rs 702.1 M in gravity areas and pump-lift areas combined (Table 25c). 7.10 Augmejtation Tubewells. ATWs under the project are expected to add some 450 Mm of water to the systems at full development. The existing canal systems can easily accommodate this amount of added water, and farmers can readily use it. Benefits for each group of ATWs, based only on an increase in irrigated area, are therefore assumed to accrue in the first year after completion of each ATW group. The value of incremental estimated production from ATW investments totals about Rs 216.6 M annually at full development, compared to estimated investment costs including physical con- tingencies of Rs 149.4 M (Table 25d). 7.11 Sprinkler Irrigation. Sprinkler irrigation allows more efficient field application of water and hence increased area irrigated with the same amount of water. The net benefit of sprinkler irrigation is based on the increase in irrigation intensity under sprinkler irrigation compared to present surface irrigation intensities, because the water used with sprinkler sets could as well have been used with surface application elsewhere *n the commands. Benefits under the project are estimated on the basis of actual irrigation intensities reported for existing GOH sprinkler sets, compared to surface irrigation intensities under present field practices. However, sprinkler irrigation is a new technology for farmers in the project area, and benefits are conservatively projected to build up to full development levels over a three-year period. Net incremental benefits from sprinkler irrigation are expected to reach Rs 40.6 M annually at full development, compared to investment costs including physical contingencies of Rs 26.7 M (Table 25e). Sensitivity Analysis and Risks 7.12 Agriculture production in the project area is sensitive to varia- tions in weather and quantity and timing ot rainfall even under irrigated conditions. Because no increases in yields have been assumed in estimating project benefits, the impact of weather on project viability should be mini- mal. The primary uncertainty concerns the amount of water actually saved due to canal and watercourse modernization, and in particular the farmers' reac- tions to the increased water supplies in expanding their irrigated area. In addition, based on experience with Haryana I, some risk of cost overrun does exist, particularly in the event of a scarcity of key materials. 7.13 Sensitivity to various uncertainties was analyzed using switching values. Switching values indicate reduction (increase) in benefits (costs) required to reduce net incremental discounted benefits to zero, using a specified opportunity cost of capital assumed to be 12% in India. Based on this analysis, the main uncertainties do not affect the economic viability of the project. In addition the switching value for the price of wheat, the -55- major crop in terms of value, is 55%, and a lag in benefits of four years would be required to reduce the project net present value to zero. Sen- sitivity analysis results are summarized as follows: Appraisal Switching Estimate Value Change Variables Tested /a Rs M Rs M % Incremental Benefits 3,426.5 1,835.1 -46 Investment Costs 1,424.5 3,015.9 +112 7a For total project; see Tables 25b-e for analysis of individual components. Environmental Impact 7.14 The project is not expected to have any negative environmental effects. However, it should have a favorable impact due to canal and water- course lining and more efficient operational capabilities which will help reduce seepage and deep percolation losses to groundwater. This is important to help slow the rise in brackish groundwater levels which is occurring in some areas of the interior basin of Haryana, and thus to provide time needed to develop and implement plans for dealing with the potential future problems of waterlogging and secondary soil salinization. Investment in drainage facilities over 60% of the project area at the rate of US$500/ha in years 10-20 of the project would reduce the project ERR to 19%. Particularly in the pump lift areas, project investments to intensify irrigation are also expected to help reduce wind erosion and slow the advance of the desert. In addition, Haryana would undertake all necessary measures to minimize the risk of malaria and other water-related diseases within the project area. VIII. AGREEMENTS REACHED AND RECOMMENDATIONS 8.01 Agreements have been reached with GOI that it would make the proceeds of the IDA credit available to GOH for project expenditures in accordance with established procedures for devlopment assistance to State Governments, and insure adequate State budget resources and financing to implement the project over the four-year project period (para 4.05). 8.02 Agreements have been reached with GOR that it would: (a) develop not later than December 31, 1983 new or improved design standards for modernization of canal and water regulation facilities, to adequately reflect projected operational require- ments (para 3.09); -56- (b) prepare by September 30, 1983 plans to be carried out after review and comment by IDA to organize a farmer Sprinkler Irrigation Association at each sprinkler set site (para 3.42); (c) develop and provide to IDA for its review and comment not later than September 30, 1983 a manpower development program for in-service and new recruit training for ID staff (para 3.52); (d) develop and provide to IDA for its review and comment not later than September 30, 1983 work plans and schedules for R&D activities (para 3.54); (e) maintain separate accounts for project expenditures, insure these accounts are audited annually by the State Accountant General and the resulting, interim statements of account are submitted to IDA not later than nine months after the end of each fiscal year, and make complete accounts and financial statements available for inspection during IDA review missions (para 4.12); (f) maintain and appropriately staff the Research and Development and Training Unit and thet Research and Development Steering Committee within the Irrigation Department (para 5.06); (g) form by June 30, 1983 Spe!cial Project Units in the Irrigation Department to undertake pilot projects and other field Research and Development activities under the project, and to support and monitor Sprinkler Irrigation Associations (para 5.07); (h) establish by June 30, 1983 an Appraisal and Monitoring Cell at the PH head office (para 5.12); (i) make adequate arrangements for operation and preventive main- tenance of buildings, vehicles and equipment provided under the project (para 5.14); (j) develop and furnish to IDA for its review and comment by December 31, 1983 plans with procedures and timetables for formation of effective Shareholders Maintenance Committees on project watercourses including a model draft maintenance agree- ment between ID/HSMITC and SMCs, and under those plans carry out arrangements for maintenance monitoring and reporting pro- cedures and mechanisms to insure prompt and timely watercourse maintenance (para 5.20); (k) ensure that water charge collections cover canal system operation and maintenance costs plus a reasonable share of canal modernization costs, that additional charges for watercourses collected annually from farmer beneficiaries amount to at least 45% of amortized watercourse modernization capital costs including a watercourse maintenance charge of 3% of capital -57- costs, and that charges to village panchayats for water supplies cover full operating and maintenance costs for village water supply schemes (paras 6.13 and 6.17); and (1) undertake all necessary measures to minimize the risk of malaria and other water-related diseases in the project area (para 7.14). 8.03 With the above assurances and conditions, the project would be suitable tor an IDA credit of US$150.0 M on standard terms. US$3.2 M would be available from the credit for retroactive financing of qualified expendi- tures incurred on or after February 1, 1983. The borrower would be GOI. -58- T..hle INDIrA hARYANA IRRIGATION 11 P?O.JFCT Seasonal Sarface Irrigation Ponpjy Bhakra Canal System _/ 1969170 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Mean k1LAR IF Irrig. supply at main canal head (Mn') 3,047 3,026 2,906 3,090 3,273 2,710 2.993 2,940 2,738 3,223 2.995 Area irrigated ('000 ha) 404 383 375 413 422 390 423 376 371 398 395 Area irrigated - percent of CCA 1/ 34.6 32.9 32.1 35.4 36.1 33.4 35.3 32.3 31.8 33.7 .3.8 Gross supply per ha of crop (m3) 7,582 RABI Irrig. supply at nai canal head (Mn3) 2,857 2,290 2,693 1,996 2,717 1,766 2,961 2,655 3,135 3,152 2,622 Area irrigated ('000 ha) 478 448 486 470 477 398 494 475 493 536 476 Area irrigated - percent of CCA 1/ 41.0 38.4 41.7 40.3 40.9 34.1 42.4 40.7 42.3 46.0 40.8 Gross supply per ha of crop (n3) 5,508 TOTAL FOR YEAR Irrig. supply at nain canal head (M-') 5,904 5,316 5,509 5,086 5,990 4,476 5,954 5,595 5,873 6,375 5,608 Area irrigated ('000 ha) 882 831 861 883 898 788 917 851 864 934 871 Area irrigated - percent of CCA 1/ 75.6 71.3 73.8 75.7 77.0 67.5 77.7 73.0 74.1 79.7 74.5 Gross supply per ha of crop (m3) 6,439 West Yamena Canal System 2/ 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 Mean KHARIF Irrig. supply at main canal head (MP3) 2,074 2,002 1,958 2,138 2,068 1,897 2,152 1,794 1,554 2,090 1,973 Area irrigated ('000 ha) 268 245 243 257 279 301 305 257 249 274 268 Area irrigated - percent of CCA 3/ 24.7 22.6 22.4 23.7 25.7 27.7 28.1 23.7 22.9 25.3 24.7 Gross supply per ha of crop (m3) 7,362 RABI Irrig. supply at main canal head (Mm3) 1,267 1,420 1,694 1,294 1,836 1,683 1,906 1,420 1,799 1,875 1,619 Area irrigated ('000 ha) 327 354 383 358 419 386 428 387 390 412 384 Area irrigated - percent of CCA 3, 30.1 32.6 35.3 35.0 38.6 35.6 39.4 35.7 36.0 38.0 35.6 Gross supply per ha of crop (m3) 4,217 TOTAL FOR YEAR Irrig. supply at main canal head (Mm3) 3,341 3,422 3,652 3,422 3,904 3,580 4,058 3,214 3,353 3,965 3,591 Area irrigated ('000 ha) 595 599 626 615 698 687 733 644 639 686 652 Area irrigated - percent of CCA 3/ 54.8 55.2 57.7 58.7 64.3 63.3 67.5 59.4 58.9 63.3 60.3 Gross supply per ha of crop (n3) 5,508 1/ Bhakra CCA remains constant = 1.166 M ha. 2/ Exclading supplies to lift canal. 3/ WYC CCA remains constant = 1.085 M ha. Source: Irrigation Department, GOP. -59- Table 2 INDIA HARYANA IRRIGATION II PROJECT Estimate of Annual Groundwater Recharge and Use-/ Recharge No. of Total Annual Total Proposed District Kharif Rabi Annual Draft Recharge Utilization Tubewells
Groupe de la Banque mondiale · Staff Appraisal Report
India - Second Haryana Irrigation Project
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