Philippines - Rural Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report NO- 5978 PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES MINDORO RURAL DEVELOPMENT PROJECT (LOAN 1102-PH) December 18, 1985 Operations Evaluation Department Ti document hs a resiMed dIstrIbutim mnd my be used by reeipleats auly in the performance of tir GeiA dnje. It cntents Uy n oterwise be diseesed witheot World Bank stborlation. ABBREVIATIONS BBRIS - Baco-Bucayao River Irrigation System BFD - Bureau of Forest Development BPI - Bureau of Plant Industry CCC-IRDP - Cabinet Coordinating Committee on Integrated Rural Development ERR - Economic Rate of Return FAO/IBRD - Food and Agriculture Organization/World Bank Cooperative Program FIGs - Farmer's Irrigator Groups GOP - Government of The Philippines IA - Irrigators Associations IRD - Integrated Rural Development MA - Ministry of Agriculture MIRDO - Hindoro Integrated Rural Development Office MIRDP - Mindoro Integrated Rural Development Project MMAP - Mindoro Minorities Assistance Project MOH - Ministry of Health MNR - Ministry of Natural Resources MPWH - Ministry of Public Works and Highways MUV - Manufacturing Unit Value NACIAD - National Council on Integrated Area Development NIA - National Irrigation Administration OED - Operations Evaluation Department PAC - Project Advisory Committee PANAMIN - Presidential Assistant on National Minorities PBLS - Pula-Bansud Irrigation System PCR - Project Completion Report PPA - Philippine Ports Authority PPAM - Project Performance Audit Memorandum PPAR - Project Performance Audit Report RORO - Roll-On-Roll-Off SAR - Staff Appraisal Report SCT - Schistosomiasis Control Team FOR OFFICIAL USE ONLY THE WORLD BANK Washington. D.C. 20433 US.A. Odice of Dwector-Ceneral Oppraters Evaluatan December 18, 1985 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report - Philippines Mindoro Rural Development Project (Loan 1102-PH) Attached, for information, is a copy of a report entitled "Project Performance Audit Report - Philippines Mindoro Rural Development Proje-:t (Loan 1102-PH) prepared by the Operations Evaluation Department. Attachment Shiv S. Kapur by Yukinari Watanabe 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 authori2ation. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT PRILIPPINES MINDORO RURAL DEVELOPMENT PROJECT (LOAN 1102-PH) TABLE OF CONTENTS Page No. Preface .......................................................... i Basic Data Sheet ................................................... ii EvaluationSumr.........................ii PROJECT PERFORMANCE AUDIT MEMORANDUM I. PROJECT SUMMARY ......... o......e*............. ..... 1 II. MAIN ISSUES .................................... 5 A. Project Design ..........0 ... .... .. ................. 5 B. Factors Contributing to Delays in Project Implementation ............................. 6 C. Development and Operation of Irrigation Systems ...... 7 Attachment I - Comments from the Ministry of Public Works and Highways ........................................ 11 Attachment 2 - Comments from the Ministry of Agriculture and Food .. 15 Attachment 3 - Comments from the National Irrigation Administration. 19 Attachment 4 - Comments from the National Economic and Development Authority ........................................... 23 Attachment 5 - Comments from the Mindoro Integrated Rural Development Office ............................ 25 Attachment 6 - Comments from the National Council on Integrated Area Development ............................ ........ 31 PROJECT COMPLETION REPORI OVERVIEW I. Introduction ......... 000......... ............. .......... 35 II. Project Background and Objectives ......................... 35 III. Project Results .......*...............*......... .......... 36 IV. A Brief Critique, Lessons, and Discussion of Main Administrative Issues .............................. 38 ANNEX PROJECT COMPLETION REPORT I. Introduction ................................. 47 II. The MIRDP:1975-1983........................................ 51 III. Management Coordination and Supervision ................... 83 IV. Economic Reevaluation ..................................... 87 MAP Th docnt Ias a resiced dftion and ma be sod by rciximtsoy in he efomnCe o thei official duties. Its contents may not otherwise be disclosed without World Bank authorization. PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES MINDORO RURAL DEVELOPMENT PROJECT (LOAN 1102-PH) PREFACE This is a Project Performance Audit Report (PPAR) on the Philippines Mindoro Rural Development Project for which Loan 1102-PH in the amount of US$25 million was approved in April 1975. The loan was closed fully disbursed in December 1983, although the final disbursement was not made until April 1984. The audit report consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED), a Project Completion Report (PCR) prepared by the National Council on Integrated Area Development (NACIAD), and an Overview of this PCR prepared by the Bank's East Asia and Pacific Regional Office. As the PCR was very long only the main section has been included in the PPAR, the detailed annexes being retained in OED files. The audit memorandum is based on a review of the Appraisal Report (633a-PH) dated March 14, 1975, the President's Report (P-1596-PH) dated March 27, 1975, and the Loan Agreement of April 16, 1975. Correspondence with the Borrower and internal Bank memoranda on project issues, as contained in relevant Bank files, have been studied, while Bank staff associated with the project have been interviewed. An OED mission visited the Philippines in June 1985. Discussions were held in Manila with officials from MIRDO, NACIAD, the Ministry of Public Works and Highways, the National Irrigation Administration (NIA), the Ministries of Agriculture and Health, and the National Economic and Development Authority (NEDA). Visits were also made to both Oriental and Occidental Mindoro to inspect project works, hold discussions with local officials, and interview farmers. The PPAM agrees with the principal conclusions in the PCR and the PCR Overview. In addition to summarizing the objectives and results of the project, the PPAM discusses issues concerning the design of the project, factors contributing to implementation delays, and experience with development and operation of irrigation systems. A copy of the draft audit report was sent to the Borrower in September 1985. Comments received from the Ministry of Public Works and Highways, the Ministry of Agriculture and Food, the National Irrigation Administration, the National Economic and Development Authority, the Mindoro Integrated Rural Development Office, and the National Council on Integrated Area Development are included in Attachments 1-6. The audit gratefully acknowledges the assistance provided by many Government officials and farmers. PROJECr PERFORMANCE AUDIT REPORT PHILIPPINES - INDDORO RURAL DEUElOPHENW PROJECT (LOW 1102-PU) BASIC DATA SHEET KEY PROJECT DATA Actual or Actual as X Appraisal Current of Appraisal Estimate Estiate Estinate Total Project Costs (USS million) 50.0 63.9 128 Loan Amount (USS million) 25.0 25.0 100 Date Board Approval 04/75 06/0/75 - Date BEffectiveness 07/75 07/28/75 - Date Physica' Components Completed 12/31/80 12/31/83 - Proportiou The-, Completed (2) 100 95 - Closing Da 0b/30/81 12/31/83 - Economic hate of Ueturn (Z) Ila 15/a - lnstitctoral aerformance - Fair - Agronomic Performance - moderate - Number of Direct Beneficiaries (Year 1983) - 120.000/b - CIAULAT1VE DISBURSEMENTS FY76 FY77 FY78 FY79 FY80 FY81 FT82 MY83 FY84 Appraisal Ratimate (US$ million) 0.2 4.2 11.4 18.4 22.8 25.0 - - - Actual (USS million) 0.2 2.1 5.7 11.3 15.7 18.6 23.0 24.8 25.0 Actual as 2 of Estimate 100 50 50 61 68 74 - - - hate of Final Disbursemot April 24. 1934 Principal Repaid to 4/30/85 (USS min.) 2.43 MISSION DATA Date No. of Manweeks Specializations Performance ypes of ission (no./yr.) Personas in Field Represented /c R Id Trend/e Problemalf Identification 07/73 4 13 Z A,B - - - Preparation 10/73 8 27 L& A,B - - - Appraisal 06/74 8 30 Z I.a. - - - Subtotal 20 70 Supervision I 05/75 3 3.5 n.a. I n.A. U.e. Supervision 2 05/76 4 3.6 n.a. 1 2 F Supervision 3 01/77 4 3.6 D.a. I I n.a. Supervision 4 11/77 2 2.0 n.a. 1 1 U.e. Supervision 5 07/78 2 3.6 n.a. 2 I 0 Supervision 6 0b/79 2 4.1 E 2 1 0 Supervision 7 09/80 1 2.5 E 2 1 0 Supervision 8 05/81 1 3.1 z 2 1 T Supervision 9 U5/82 2 3.1 E.B 2 2 N.T Supervision 10 10/83 3 3.5 E.B 2 1 N.T Subtotal lh Z4 32.6 rotal 66 102.6 OTHER PROJECT DATA Borrower: Covernment of the Philippines Executing Agency: Mindoro Integrated Rural Development Office Fiscal Year of Borrower: January I to December 31 Name of Currency (Abbreviation) Peso (P-) Currency Exchange Rate: Appraisal Year Average (1975) US1.00 - P- 6.90 Intervening Years Average US$1.00 - P- 7.81 Completion Year Average (198A) USS1.0D - P- 14.00 Follow-on Projects: Hedium-Scale :,r!ga- Rural Roads ls- Communal Ir- Name tion Project provement Project rigation Project Loan Number 109-PH 1860-PH 2173-PH Loan Amount (USS million) 71.0 62.0 71.1 Date of Board Approval 03/13/00 06/13/80 06/08/82 /a See caveats in the PCR Overview (pare. 16-17). /b Estimated beneficiaries. A - Agronomist; 8 - economist; E - engineer. 7d 1 - problem-free or minor problems; 2 - moderate problems. Te I - improving; 2 - stationary. Tf F - financial; M - managerial; T - technical; 0 - other. Zi Combined Bank/FAD CP mission. / Subtotal excludes Back-to-Office reports on Road Partial Component Supervision mission. - iii - PROJECT PERFORMANCE AUDIT REPORT PHILIPPINES MINDORO RURAL DEVELOPMENT PROJECT (LOAN 1102-PH) EVALUATION SUMMARY A. Introduction Mindoro Rural Development Project was an integrated rural develop- ment project aimed primarily at development of communications and agriculture on the island of Mindoro to the south of Luzon. The project was the first integrated rural development project supported by the Bank in the Philippines. The project included components for development of roads, improvement of the principal port, development of irrigation, seed testing and rodent control, watershed protection, control of schistosomiasis, and assistance to a minority tribal group (the Mangyans). The project was expected to cost US$ 50.0 million and be supported with a World Bank loan of US$ 25.0 million. B. Objectives The principal objectives of the project were to improve communica- tions and increase foodgrain production. Communications within Mindoro were to be improved through developing the road network, while communications between Mindoro and Luzon were to be improved through upgrading the port in Oriental Mindoro. Foodgrain production (paddy) was to be increased through development of irrigation, improved seed testing, and rodent control. The small component for watershed protection was designed to improve the quality of the watersheds serving the irrigated areas. Subsidiary objectives includ- ed improving the standard of health, through controlling schistosomiasis, and assisting a minority tribal group. C. Implementation Experience The project was implemented along the lines planned, although com- pletion was delayed by three years, while there was a cost overrun of 28% (47% in Philippine Pesos). The World Bank loan was fully disbursed. Delays were caused by unsatisfactory experience with construction contracts, prob- lems acquiring essential rights of way, and Government's failure to provide timely budgetary support for some components. Implementation, and Bank supervision, were made more difficult by the complex multi-component project design. Most of the smaller project components were not given adequate sup- port by the Government agencies responsible for their implementation. D. Results Overall the project was a qualified success, although there were serious shortcomings. Worthwhile results were achieved with the roads and, - iv - to a lesser extent, with the irrigation components, which together accounted for 93% of project cost. Despite long delays and a considerable cost overrun, the road improvement component was implemented successfully. It has improved communications considerably, especially in Oriental Mindoro. The reestimated economic rate of return for the road component at project completion was 18%, the same as at appraisal. Improvements made to the port at Calapan in Oriental Mindoro also have proved to be very beneficial. Significant progress was also made with development of irrigation, although achievements fell short of the appraisal targets. At project completion the economic rate of return from the irrigation component was reestimated at 13% compared with 24% expected at appraisal. Achievements were quite limited with the minor components for watershed protection, seed testing and rodent control, schistosomiasis control and assistance to the Mangyans. E. Sustainability Sustainability of benefits from the irrigation component has been adversely affected by inadequate cost recovery and a consequent shortage of funds for maintenance. Maintenance of some provincial roads has also been inadequate due to lack of funds. The component for assistance to the Mang- yans came to a complete halt in 1984 when the implementing agency was dis- banded. Although a successor organization has been formed, this has not yet become operational. F. Findings and Lessons The complex multi-component design made project implementation dif- ficult. This was especially true for several of the smaller project compo- nents, such as schistosomiasis control and assistance to the Mangyan minority group, for these were not given full support by the implementing agencies and the project director (coordinator) did not have the authority to insist that this support be given (PPAM paras. 12-13 and PCR Overview paras 24-27). The project has not been followed by a Bank-supported second- phase. However, the Bank has supported separate follow-on projects for improvement of roads and irrigation. The audit believes that this will prove to be more effective than the "integrated" approach adopted for Mindoro Rural Development Project (PPAM para. 15). Project implementation has been hampered by Government's failure to provide essential budgetary support for extended periods for several project components (PPAM para. 12 and PCR Overview para. 23). Experience with construction contracts financed under the project was unsatisfactory. Procedures for prequalifying contractors were inadequate, contractor performance was poor, and the contract terms provided insufficient allowance for price escalation (PPAM para. 16 and PCR Overview para. 20). -v- In most years the National Irrigation Administration (NIA) has collected only about 50Z of the irrigation service fees (water charges) due from farmers. As a result NIA has had insufficient income to pay for satis- factory maintenance (PPAM para. 20). It is clear, therefore, that infra- structure components need to pay as much attention to maintenance as to new construction. - 1 - PROJECT PERFORMANCE AUDIT MEMORANDUM PHILIPPINES MINDORO RURAL DEVELOPMENT PROJECT (LOAN 1102-PH) PROJECT SUMMARY Project Description 1. Mindoro Integrated Rural Development Project (MIRDP) was the first integrated area development project to be supported by the Bank in the Phil- ippines. The project was designed to develop agriculture and infrastructure on the island of Mindoro to the south of Luzon. Mindoro, with a population of around 500,000 people, is divided into two distinct provinces (Occidental and Oriental Mindoro) by a high mountain range, and it is possible to travel by road between the two provinces only in the dry season. MIRDP included components for construction and improvement of 430 km of roads, upgrading the port at Calapan in Oriental Mindoro, improvement and extension of irrigation systems, watershed protection, provision of seed testing facilities and improved rodent control, a pilot program to help control schistosomiasis, and Provision of medical and other services to people from a tribal minority (Mangyans) living in the mountainous areas. The principal benefits from the Project were expected to be improved communications and increased rice pro- duction. Project components were to be implemented by six different Govern- ment agencies, but overall coordination was to be achieved through appoint- ment of a project director who reported to a Cabinet Coordination Committee on Integrated Rural Development (CCC-IRDP). These arrangements were changed subsequently with the National Council on Integrated Area Development (NACIAD) assuming the functions fulfilled previously by CCC-IRDP. Project Cost 2. At appraisal the project was expected to cost US$50.0 million and be implemented over a five-year period. The Bank provided a loan of US$25.0 million, the remaining 50% of project cost being financed by Government. In practice it took eight years to complete the project and actual project cost was 28% higher in terms of US dollars than expected at appraisal (47% in Pesos). Several factors contributed to the cost overrun: the long delay in implementation exposed the project to higher than expected inflation in unit prices, while administrative overheads had to be financed over a longer period. Some physical quantities had been underestimated at appraisal, for detailed designs had not been completed at that time. Several unanticipated items were also financed under the project, including a long flood protection dyke and a dam which was destroyed following a typhoon. Project implementa- tion was delayed for several reasons: most contractors performed very poorly and the majority of contracts for road construction and irrigation were term- inated and completed by force account. In a number of instances there were long delays before Government provided essential budgetary support for the Project, while right of way problems held up work, especially for the port at Calapan and on some irrigation systems. -2- Project Impact 3. Although little data is available concerning the impact of the project, it appears to have been a qualified success, despite some serious shortcomings. The impact of the improvements to the roads and the port seems to have been especially beneficial, while there were also significant bene- fits from irrigation. However, most of the remaining small project compo- nents were rather unsuccessful; some of them were not sufficiently important for the implementing agencies to give them serious attention, while some of these agencies were also very weak.1/ Roads 4. The road improvement program was the largest component of the proj- ect, accounting for 58% of total expenditure. This included upgrading to tarmac the national road along the coast in Oriental Mindoro, improving the gravel provincial roads in both provinces, and completing feasibility studies for improving the national road along the coast in Occidental Mindoro, and a possible road link between the two provinces. Despite long delays and poor performance by contractors, the roads were eventually completed largely as planned. Although the volume of traffic on the new national road in Oriental Mindoro is still somewhat lower than forecast at appraisal, this road is already having a very beneficial impact on development. The network of gravel provincial roads developed under the project also has significantly improved communications in Mindoro. However, some of these roads have not been well maintained, apparently because the provincial government lacked adequate funds for maintenance. The feasibility studies were also completed and the new national road in Occidental Mindoro is at present being con- structed under a Bank-supported roads project. Port Improvement 5. The small component for improvement of the port at Calapan in Oriental Mindoro was completed after a long delay. In conjunction with the new national road, this has greatly improved communications between Mindoro and Luzon, especially with the recent introduction of Roll-On-Roll-Off (RORO) vessels. A warehouse was constructed at Calapan port under the project to act as storage between road and sea transport. However, the use of RORO vessels has now made this warehouse redundant. Irrigation 6. Irrigation was the second most important component of the project, accounting for 35% of total expenditure. Expenditure on roads and irrigation together was equivalent to 93% of project cost. At appraisal provision was made to upgrade and extend to 12,000 ha two national irrigation systems in Mindoro (Baco-Bucayao and Pula) and several small communal irrigation systems 1/ These comments were not intended to refer to the seed testing labora- tories run by the Ministry of Agriculture and Food. See the comments in Attachment II. - 3 - covering a total irrigated area of 3,000 ha. These systems were developed along the lines planned, although long delays and considerable cost overruns were involved. The PCR suggests (Table 3) that by project completion 13,600 ha of irrigated land, equivalent to 91% of the appraisal target, had been developed. However, information provided to the audit mission by the staff responsible for operating these irrigation systems suggests that the area of land presently being irrigated amounts to only 70% of that shown in the PCR. However, these statistics probably overstate the shortfall in the area developed because they are based on the areas for which irrigation service fees were charged, and these appear to have been under-reported. In the opinion of the audit it would probably be more realistic to assume a shortfall of 20% in the PCR data for the area developed, although this is clearly only a -guesstimate". There is also considerable uncertainty about the impact of these improved irrigation systems on production and incomes. All of the farmers interviewed by the audit mission stated that the project had enabled them to obtain substantially improved yields of paddy. However, the PCR states that "No definite trend in production can yet be established- and "it is very unlikely that incomes of rice farmers have significantly improved- (PCR para. 16). Watershed Protection 7. The project included a small component designed to improve protec- tion of the watershed. This aimed to demarcate forest boundaries and create legally protected watersheds. Denuded areas were to be identified, while grazing and timber extraction licences would be cancelled where appropriate. Forest nurseries were to be established and reforestation trials carried out. Actual achievements under this component were disappointing primarily because budgetary support was not provided for extended periods, while no protected watershed was legally established, even though the necessary sur- veys were completed. Some progress was made in replanting denuded areas and cancelling timber extraction and grazing permits. Agricultural Services 8. The project provided for establishment of two seed testing labora- tories and support for a program aimed at controlling rats on 90,000 ha of paddy land. The seed testing laboratories were constructed as planned and these have the capacity to test all of the paddy seed required in both prov- inces of Mindoro. However, so far throughput at these laboratories has been well below expectations (PCR Table 7).2/ Expenditure on the rodent control program amounted to only about 20% of the amount estimated at appraisal (PCR Table 10). This program was substantially curtailed because adequate credit for rodenticides was available through another credit program and it was not necessary for the project to provide this. 2/ In his comments in Attachment 2 the Minister for Agriculture and Food has stated that he is confident that the throughput of the seed laboratories will increase in future. -4- Schistosomiasis Control 9. The project aimed to eliminate schistosomiasis from infected areas in Oriental Mindoro through a combination of health education, environmental sanitation, diagnosis and treatment, and snail control. This component suf- fered from inadequate budgetary support and weak staffing. Expenditure was less than half of that estimated at appraisal and reimbursement by the Bank was minimal. The project did not succeed in eliminating schistosomiasis, although some reduction in the incidence of the disease was reported. Like- wine, it was not possible to eliminate the snail vectors as expected. Snails were eliminated from several swamps, but some other new swamps became infect- ed. It proved to be much more expensive than expected to drain swamps and only a few drains were constructed. Mangyan Assistance 10. The project war e.zpected to provide medical facilities to Mangyan people through establishing a mobile medical team in each province. Legal assistance (primarily to resolve land disputes) and improved agricultural services were also to be provided through four pilot service centers. Very little was achieved with this component and it had almost no impact on the majority of Mangyan people. Although three service centers were established, the program suffered from inadequate budgetary support and high staff turn- over. Activities were almost at a standstill between 1978 and 1981 and even- tually the implementing agency, PANAMIN, was disbanded in 1984. Although another agency is expected to assume the functions performed previously by PANAMIN, this has not yet become operational. Economic Rate of Return 11. At appraisal it was estimated that the economic rate of return (ERR) from the national road program would be 14% (18% if passenger's time savings were valued), and 24% for the national irrigation systems. The PCR suggests that the ERR for both the national roads and the national irrigation systems would be about 18%. However, the reestimated ERR for irrigation has probably been overestimated, due to the overoptimistic assumptions made about paddy production, although the imprecise nature of the available data means that these reestimated ERRs are only approximations (see the PCR Overview, Annex 1). The PCR Overview suggests (para. 17) that the ERR for the national irrigation systems would be only about 13% if production estimates are reduced by the equivalent of 30%. The audit believes that this is a more realistic estimate, although for somewhat different reasons than those sug- gested in the PCR Overview. The Overview has reduced the reestimated ERR because it believes that paddy yields at full development have been overesti- mated. Although it may be correct that some downward adjustment of yields is necessary, the audit believes that a more important reason for reducing the production estimates is that the areas of land under irrigation are likely to be less than those suggested in the PCR. - 5 - II. MAIN ISSUES A. The Project Design 12. MIRDP was an integrated rural development project with seven com- ponents implemented by six different agencies.3/ Inter-agency coordination was carried out by a project director who reported to CCC-IRDP, although this function was later assumed by NACIAD. At appraisal it was expected that the project director would be able to exercise significant authority over the different agencies participating in the project. In particular, he "would be responsible for approving detailed annual budgets and work programs for proj- ect activities prepared by the participating departments and agencies" (Appraisal Report para. 5.02). In the event the project director was not able to exert much authority, for soon after the project started Government decided that the participating line agencies should assume complete control of their own project components, with the project director acting primarily in an advisory and coordinating capacity. Although this decision may have been correct in principle, in practice it seems to have contributed to a sit- uation where the participating line agencies were willing to give full sup- port to their own components only if these were large enough to warrant this. This was the case with roads and irrigation, which together accounted for 93% of project cost, but for most of the other smaller components the implementing agencies gave them little priority. Thus, several of these minor components received no budgetary support for extended periods of time and there was little that the project director could do to rectify this situation.4/ 13. The project director was responsible for arranging submission of reimbursement claims to the Bank. In this case also the line agencies seem to have been willing to make the effort to learn the reimbursement procedures and prepare the necessary documents only if the amounts involved were large. But in the case of most of the small project components the line agencies did not claim significant amounts which were eligible for reimbursements. Data in the PCR (Table 11) indicate that the proportions of total expenditure reimbursed by the Bank for the different components were as follows: 3/ Roads Ministry of Public Works and Highways Port Improvement Ministry of Public Works and Highways Irrigation National Irrigation Administration Watershed Protection Ministry of Natural Resources Seed Testing/Rodent Control Ministry of Agriculture Schistosomiasis Control Ministry of Health Mangyan Assistance Presidential Assistance on National Minorities 4/ In Attachment 4 the National Economic and Development Authority has noted that another multi-sectoral project was implemented successfully, primarily due to careful planning and formulation of the project. - 6 - Irrigation, Roads & Port Improvement 35%-43% Watershed Protection, Agriculture, and Mangyan Assistance 12%-16% Schistosomiasis Control 2% However, as there was a significant cost overrun for roads and irrigation it was possible to disburse the loan fully primarily for these components. 14. In addition to making project implementation more difficult, the multi-component project design also meant that it was not easy for the Bank to supervise the project effectively. One of the agricultural divisions in the East Asia and Pacific Projects Department was responsible for supcrvision of the project. Thus, supervision of the agricultural and irrigation com- ponents was straightforward. The agricultural division was able te arrange for one of the region's transportation divisions to take responsibiliry for supervision of the roads, the largest component of the project. Thig worked effectively, even though supervision was shared by two divisions. Howi!ver, for most of other specialized components, such as schistosomiasis control, Mangyan assistance, and watershed protection, the Bank was not able to pro- vide effective supervision. 15. MIRDP has not been followed by a donor-supported second phase proj- ect, although Government has retained the project office and the post of project director, because it believes that this helps to coordinate develop- ment programs in Mindoro. However, the Bank has provided support for sepa- rate roads and irrigation projects which are continuing the development pro- grams for roads and irrigation in Mindoro and elsewhere.5/ The audit feels that this arrangement is preferable to the multi-component design used for MIRDP. With separate projects in these two areas, project implementation and Bank supervision should both be made considerably easier. B. Factors Contributing to Delays in Project Implementation 16. Completion of this project was delayed by three years. Several factors which contributed to this delay deserve special mention: (a) Construction Contracts: Experience with construction contracts under MIRDP has been very unsatisfactory. For example, construc- tion of the national road in Oriental Mindoro was divided into three contracts. All three of these contracts were terminated because of unsatisfactory performance and most of the work was eventually completed by force account. Likewise, out of nine irri- gation contracts only one was completed satisfactorily (PCR para. 12). Although contractors were prequalified, this seems to have been ineffective, for several of the contractors had insufficient financial standing or inadequate experience. Most of the contracts 5/ The Medium-Scale Irrigation Project (Loan 1809-PH), the Rural Roads Improvement Project (Loan 1860-PH), and the Communal Irrigation Project (Loan 2173-PH). - 7 - also made little or no provision for price escalation. This creat- ed an untenable situation, for unit prices had been rising consid- erably due to high inflation and long delays in implementation, the latter being caused partly by very slow decision making on the part of Government and persistent shortages of materials. For this reason, several contractors requested themselves that contracts be terminated. (b) Lack of Budgetary Support: For several components long delays in implementation occurred due to the failure of line agencies to pro- vide essential budgetary support. For example, work on the improvements to the port at Calapan was started eight months late as no funds were budgeted initially for this work (PCR para. 8). Similarly, for the watershed pro!-ection component budgeted funds were frequently released only in the second half of the financial year (PCR para. 23). Activities under the Mangyan assistance com- ponent came to a complete standstill between 1978 and 1980 due to lack of funds. (c) Right of Way Problems: Problems in acquiring right of way hindered progress for several components. For example, it took two and a half years to resolve a right of way problem relating to part of the land need for the extension of the port at Calapan (PCR para. 8). Another right of way problem necessitated the complete rede- sign of the proposed irrigation system at Mamburao in Occidental Mindoro. The original plan for this scheme was based on a pumped system supplying 1,000 ha. This was changed to a gravity system designed to irrigate only 300 ha, because right of way problems interfered with construction. These changes also contributed to greatly increased development costs per hectare.6/ C. Development and Operation of Irrigation Systems 17. At appraisal it was expected that the irrigation component of MIRDP would include rehabilitation of 10,000 ha of irrigated land and extension by a further 2,000 ha on two national irrigation systems (Baco-Bucayao and Pula). In addition the project provided for rehabilitation of 3,000 ha of irrigated land on several small communal irrigation systems. The national irrigation systems are relatively large systems which are operated by NIA, while the communal systems are operated by the farmers themselves. The pro- posed works were carried out largely as planned, although one communal irri- gation system was reclassified as a national system, while another (Mamburao) was drastically curtailed due to right of way problems. Data in the PCR 6/ In Attachment 4 the National Economic and Development Authority has pointed out that some of the problems mentioned in this paragraph could have been avoided if the project had been prepared more carefully and there had been a detailed implementation plan. - 8 - (Table 3) show the following areas of irrigated land developed compared with the targets set at appraisal: Service Area Service Actual Expected Area Area at Actually Irrigated Appraisal Developed in 1983 ha National Systems 12,000 12,709 10,050 Communal Systems 3,000 900 622 Total 15,000 13,609 10,672 18. The PCR indicates that the total service area actually developed was 13,609 ha, equivalent to 91% of the appraisal target. At the time of project completion in 1983, the area actually irrigated amounted to 10,672 ha, or 78% of the service area. However, information provided to the audit mission by the staff responsible for operating these irrigation systems sug- gests that the areas of land actually being irrigated may be substantially less than indicated in the PCR. In the case of the national irrigation sys- tems data provided to the audit mission indicated that the total area actu- ally irrigated last year was only about 7,000 ha compared with the PCR figure of 10,050 ha irrigated in 1983. The audit mission was not able to verify the accuracy of any of these figures. However, the audit believes that the irri- gated areas shown in the PCR are probably overstated, although probably not to the full extent suggested during the audit mission. 19. Several factors have apparently contributed to the lower than expected irrigated area. The irrigation schemes are still at an early stage of development and it will take time to develop the new irrigated farming systems. This is especially true where it is necessary to change over from permanent crops, such as coconuts, to irrigated paddy. Some farmers are apparently not enthusiastic about giving up coconut production because they may be able to avoid having their land redistributed under the land reform program if they keep it for coconut production. In some areas the extent of irrigation has also been reduced due to poor functioning of the irrigation systems. The audit mission visited two areas where canals or distributaries had not functioned for several seasons, although it was not possible to find out the reason for this. In both cases it was suggested that it was due to a combination of poor construction and inadequate maintenance. However, for one of the canals it was also suggested that the available water supply was insufficient to reach that part of the system. The irrigated areas which are reported from the different irrigation systems are based on the areas for which irrigation service fees are charged. It is possible that these areas have been under-reported, or that irrigation service fees have not been levied in some cases because the farmers concerned had informal irrigation systems before the start of the project and were unwilling to contribute to the new system. - g - 20. There have also been problems with inadequate maintenance and poor cost recovery from irrigation systems in Mindoro. In fact, these are nation- wide problems. NIA levies irrigation service fees (ISF) at rates which are expressed in equivalent quantities of rice. Thus, the fee structure is effectively indexed, although NIA cannot change the level of fees without Government approval. However, the amount collected by NIA from irrigation service fees has not been adequate to permit fully satisfactory maintenance of irrigation systems, let alone provide for any repayment of capital costs. A substantial upward revision of irrigation service fees would be required if there were to be significant recovery of capital costs. However, the present fee structure would be adequate to cover operation and maintenance costs pro- viding a high proportion of the fees are collected. Unfortunately, this has not been the case. Data in the PCR (Table 5) show that in most years on the national irrigation systems NIA has collected less than 50% of the service fees due. With this level of collection the income generated is not suffi- cient to pay for adequate maintenance, and, as discussed earlier, there is already some evidence of poor maintenance on the irrigation systems in Mindoro. s & 6' Á" k - 11 - Attachment I Page 1 REPUBLIC OF THE UI WFPUV= UNRY OF PUBLIC WORKS AND HIGHWAYS OFF EOF THE MUSTER - MKANKLA 22 October 1985 Mr. Yukinori Watanabe Director, Operation Evaluation DepareLnt The World Bank 1818 H Street, N.W WashIngton D.C 202433 U.S.A Dear Director Watanabe, Re: Couments on Project Performance Audit Reort, Mindoro Rural Development Project (oman 1102-PH). In response to your letter of 11 Septeaber 1985 concerning the first draft of the Project Performnce Audit Report on the Philippines Mindoro Rural Developnst Project supported by Loan 1102-FH of April 8, 1975, hereunder are our ccomens: 1. We agree generally with the findings and observations em- bodied in the audit report particularly on the main issues as shown in the Project Summary of the Project Performance Audit M-andranL 2. The evaluation of the factors cntributing to the delays in projiect in lez-tato provides valuable lessons for the Ministry. RemedLal measures have already been ins- The audit agrees that t1tuted by tbe govermt to make project the roads and port mre systematic and with mininum delay. development component of the project had 3. Altbough the project ws delayed by three years and costs a favorable impact. have almost doubled, the desired developmmit impact bas despite long delays been attained by the project. and serious problems with poor perform- We are aLso tranaitting herewith, for your consideration, the ance by M s of the y M . Reioal Director in ardich bcn ins- contractors. moresystnati an wit minnsn'ela . Althughtheproectwas elaed y treeyeasancot - 12 - Attachment I Page 2 REPUBLIC OF THE PHILIPPINES MINISTRY OF PUBUC WORXS AND HIGHWAYS -- 2 REGION IV-B SOUTHERN TAGALOG REGION OFFICE OF THE REGIONAL DIRECTOR EDSA. OUEZON CITY MPWH October 7, 1985 The Honorable Ninister - Ministry of Public Works & Highways K a n i 1 a Sir : Per review of the Kindoro Rural Development Froject (Loan 1102-F) Project Performance Audit Report, PCR Overview, and PCR Report the following were noted: 1. Despite project shortcomings, the roads and ports projects proved to be worthwhile and successful even if cost overruns and an overall project delay of about three (3) years was experienced. 2. The overall project was assessed to be viable with a PC2 Economic Rate of Return (ERR) of 17.7% and an adjusted PCR Overview ERR of 17.5%. - These comments support 3. PCR evaluation of the road component revealed an MR2 the views expressed in of 17.70 and that road user savings had been correctly the PPAM. calculated. 4. On the overall, the roads and ports mrojects under- taken by the MPWdE has had the major positive tmpact of i=roving access and comounications in Eindoro. 5. For the infrastructure sector, the following general shortcominzs were identified attributable to the lack of an arzropriate overall coordinating and monitcring agency/body during pro.ect implementation and trepara- tion: a) Delays in izzlementation which led to inflation and escalation in costs and additional adminis- trative overhead; b) uantities were underestimated at appraisal which led to longer detailed design; c) Unanticizated ite=s such as weather conditions (typhoons); d) Unsatisfactory and poor perfor=ance of contractors, often il1-ecuip'ed aid financially unstable, w*i=n had led to ter=ination of contracts and irtlecen- tation by force account; e) .eak budgetary perfor=ance whereby insufficie=t and delayed budget releases were encountered even at the Ztart-um =hase of operations; ,- -13- Attachment I Page 3 f) Preconstruction work took longer than expected and changes i4 projects and work specifications were encountered during the construction stage; g) Weak Government handling of contractual arrange- ments which were often slow reacting and unsympa- thetic to unforseen considerations (oil crisis in late 70's, typhoon, etc.); h) Inexperience of agencies other than MPWH in under- taking foreign-assisted projects; and i) General economic condition whereby the oil crisis in late 70's led to escalation of costs and shortage of materials. 6. From the experience and findings encountered, the follo- wing issues were further noted for remedial consideration by the line agencies involved in operating and maintain- ing the MIRDO facilities and in other ensuing undertakings: a) The need for providing sufficient maintenance funds for infrastructure projects and other services to ensure its long term sustainability and realization of expected benefits to Mindoro; b) The Study Proponent had noted that some of the Pro- vincial roads have not been well maintained due to lack of funds; c) Need for the establishment of pre-implementation de- signs and technical data in order to divert expensive sub-projects and problems with construction by contract; d) Theestablishment of suitable and effective organiza- tional and administrative arrangements for projects implementation and financial operations; and e) The identification of second uhase or follow-un projects particularly roads and irrigation which have been found to be more effective than an "integrated approach". 7. A review of the findings, particularly the Socir-Economic reassessment noted that established and sound evaluation procedures had been utilized and that provision for delays had been included. Cash flows had been adjusted corres- pondingly. 8. With regards to economic benefits, it could also be pointed that corresponding delayed or lagged responses to economic stimuli may still be latent among the project beneficiaries -at -the current period cf assess- ment and that its full impact may be generated or shown from 1985 onwards in view of the projects' delayed im- plementation (1975-1983) and zhe current econo-ic - 14- a Attachment I Page4 - situation the-country is facing. Hence, it could be said that 1984 and 1985 may still be premature to assess the full merits of the MIRDO project. Never- theless, it was noted that despite this fact the over- all project, especially infrastructure, has been assessed to be viable. 9. An in-depth study and detailed Engineering should be first established prior to project appraisal to reduce project implementation time which ultimately lead to substantial savings including the commitment changes. 10. For each project, revolving fund should be established for reimbursement within a short time, payments of the reimbursable portions of work accomplished could be readily applied for. 11. 'ith regards to the integrated approach, we still believe that it is a worthwhile development policy to pursue in order that the full socio-economic potentials in Kindoro or in any area can be realized. However, closer coordi- nation, proper identification of project components and budgetary funding preferably under a central organization/ body, say NACIAD, may seem to be a more practical approach rather than being decentralized/distributed by sectors. For the issue of operation and maintenance funds, these should be appropriately followed-up by the concerned line agencies. Very truly yours, Segionairector - 15 - Attachment II Page 1 PAN46 CNAG13CUE ANDFmOW W npanuatmrhaine- b October 21, 1985 Mr. Tukinori Vatanabe Director Operations Evaluation Department The World Bank 1818 H Street, N.V. Washington, D.C., U.S.A. Dear Director Watanabe, In accordance with your request the following are our major comments on the first draft of the Project The rating was not Performance Audit Report on the Philippine Hindoro Rural based on perform- Development Project (Loan 1102-PR): ance in 1983. The rating has 1. The Basic Data Sheet, Preface III, showed that Agro- been changed to noulc Performance in the Project Areas was rated "moderate". This "Poor". If this refers to crop year 1953, we would reflects the lower like to point out the fact that the provinces of than expected areas Mindoro suffered much from the drought that hit the development for irri- country during that year. Thus, much as we did try, gation and the low no amount of packaged technology resulted In Increased utilization of production during the period. improved seeds. improed seds.In view of this, we would like to request for a qualification of this performance rating to reflect The remarks in the the effects of factors beyond this Ministry- control; PPAn were directed primarily at other minor components, 2. Page 3, section 3 states: "However, the remaining such as small project components appear to have been unucces- schistosomiasis ful, perhaps because they were not sufficiently control and assistance important for the Implementing agencies to give them to dinorities. The serious attention." audit agrees that the Ministry of Agriculture We strongly refuse to accept this allegation. and Food did make a In our efforts to develop the rice industry In serious effort to Mindoro, Agricultural Services has consistently develop the seed test- received our deep Interest and has always been given ing laboratories major significance. However, some factor beyond our and the physical control negatively affected the attainment of set work was completed objectives, particularly In the operation of the verywe l. However, Seed Testing Laboratories; utilinAtion has remained very low. Cae: -Wr.Wlr Ma Telephomes 99841; 9894 Tele (722)-277M MOA-PH 16 - Attachment II Page 2 3. Page 5, section on Agricultural Services, 3rd line states: "However, so far throughput at these lab- oratories has been below expectation (PCR Table 7)." Before.the Seed Testing Laboratories became operational in 1981, certified seeds produced by the Seed Growers were tested at the BPI Central Seed Testing Laboratory in Manila. When the laboratories were set up in Mindoro, it was expected that at least These commnts 30% of the seed requirements of farmers would be explain the reasons produced by the Seed Growers and would pass as certi- for the low through- fied seeds. Unfortunately, a large percentage of the put at the seed seeds produced by the Seed Growers did not pass the laboratories, as requirements for certified seeds, apparently because noted in the PPA. because of the complexities and the high cost of seed production technology involved which many Seed Growers fai'ed to religiously follow due to inadequate capital. This resulted in a reduction in area devoted by Seed Growers to seed production. The audit understands A second reason for the reduced area devoted to that growers do not seed production is the much less net profit derived find seed production from it as compared to that of commercial rice very profitable, in production.. During the past two years, the market part because the Government controlled price for seed is not Furthermore, the demand for certified seeds much higher than fol;owed a downward trend. Until 1982, the country's the price of Seed Growers enjoyed the demand from our Asian neigh- ordinary paddy. bors. There was huge exportation and the two provinces of Mindoro had their share. When seed exportation s topped, there was a corresponding decline in local demand. Incidentally, the area covered by the Masagana 99 credit program was comparatively smaller in 1984 than in 1983. Conversely, the area for without credit or self-financed farmers was higher in 1984 than in 1983. only a small number of farmers could afford to self-finance their production and continued to use certified seeds. Many who had past- due loans with the banks could not afford to purchase certified seeds and other necessary inputs. Thus, the decrease in M-99 supervised-credit areas produced a corresponding reduction in vhe marketing of certified seeds. - 17 - Attachment II Page 3 The reduction in area and volume of production of certified seeds due to the aforementioned factors has adversely affected the performance of the Seed Testing Laboratories in Mindoro. The activities in the laboratories are greatly dependent on the volume of business of the Seed Growers. Operation is in turn expressed in terms of the number of seed samples collected at random from the produce of the Seed Growers by the Seed Inspectors and submitted to the laboratories for analyses. In essence, the smaller the area planted, the lower is the produce and con- sequently the smaller the number of samples submitted to the laboratories for analyses and certification. In a footnote to Lately the local demand for certified seeds has para. 8 the PPAX Increased as a result of the Implementation and has noted that acceptability of the Intensified Rice Production Pro- the Minister for gram (IRPP), a supplementary program to "Masagana 99". Agriculture and We expect the program to expand, through increased Food expects that bectarage, In the ensuing years and thereby create throughput of the greater demand for certified seeds, thus increase the seed laboratories throughput of the Seed Testing Laboratories. will increase in future. We are confident that the above will receive your utmost consideration In the finalization of the Project Audit Report. Very truly yours, SAZAO UESCUDERO III Minister s72? Atacbmnat III - 19- Page 1 . " moI mh RicE 1FrD MAN PAMASAM NG PATI .G OCT 23 (NATIONAL IRRIGATION ADMINISTRATION) a7: TZe .ses as gase .u~w # n iI rel. N"o. -e-r to 78 CaMs Adiren: NIAPaL 22 October 1985 Mr. YUKIhRI WATANABE Director, Operations Evaluation Department International Bank for Reconstruction & Development 1818 H. Street, N.W. Washington, D.C. 20433 U. S. A. Subject: Draft Project Performance Audit Report (PPAR), Mindoro Rural Development Project (Loan No. 1102-PH). Dear Director Watanabe, This refers to your letter of September 11, 1985 request- ing our views on the above-captioned report prepared by the TBRD Post-Evaluation Mission in June 1985. We have reviewed the report and we generally agree with * the findings and conclusions of the ission. However, we have prepared some minor comments, hereto attached, which we feel should be clarified in the final report. Thank you for giving us the opportunity to review the report prior to its finalization. Ve truly yours, CES t. Administr; tor - 20 - Attachment III Page 1 COMMENTS.ON THE DRAFT PPAR MINDORO RURAL DEVELOPMENT PROJECT-IRRIGATION COMPONENT (LOAN NO. 1102-PH) 1.0 On pages 11 and 12, paragraph 16 (c), Rights-of-Way Problems, of the PPAM, kindly change the fourth and fifth sentences as follows: This clange has "The original plan for this scheme was based on a pumped been made. system supplying 1,000 hectares. This was changed to a gra- vity system designed to irrigate only 300 hectares, because right-of-way problems interfered with construction." 2.0 On page 11, Table 3 of the PCR, we have noted some errors in the computation of the development cost per hectare. As corrected, columns 5, 6 and 7 of Table 3 should be presented as follows: Development Cost Development Cost . (Mil. F) Per Hectare (P ) Irrigation System Appraisal At Completion National Irrigation Systems: Baco-Bucayao 72.6 8,886 Pula 11.0 3,480 Bansud 9.6 6,967 This has been Sub-Total 3.7 93.2 7,333 (Ave.) corrected. Communal Irriqation Systems: Mayabig 1.9 7,037 Calamundingan 0.8 2,446 Mamburao 10.7 35,313 Sub-Total 2.5 13.4 14,889 (Ave.) TOTAL 6.2 106.6 7,833 This has been 3.0 On page 13, under sub-topic, Operation and Maintenance, of the corrected. PCR, we offer the following clarifications: a) The Provincial Irrigation Office has no jurisdiction in the operation and maintenance of the three (3) national systems. The three (3) systems are under the direct super- vision and-management of the Regional Irrigation Office. * . -21 - Attachment III Page 2 Page 2 ............... This has been -b) The task of the Irrigators Association to maintain farm corrected. level facilities and proper distribution of water from the turnout applies only to those sections/portions of canals and/or canals that have been turned over to them. It is still the 0 & M personnel of the system who are responsible for the maintenance of farm level facilities and water distribution in other areas. å- >6--- - 23 - Attachment IV REPUBLIC OF THE PHILIPPINES Page 1 NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY NEDA sa Pasig, Amber Avenue Pag, Metro Maia Cable Addes: NEDAPHIL P.O. Box 419, Greenhilb TeL. 673-l31 to 50 11 November 1985 Mr. Yukinori Watanabe Director, Operations Evaluation Department International Bank for Reconstruction & Development 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Dear Mr. Watanabe: RE: Project Performance Audit Report on the Philippines Mindofo Rural Development Project (Loan 1102-PH) Thank you for furnishing our office a copy of the draft audit report on the abovecaptioned project. We are generally in agreement with the findings and issues raised in the Report, however, we would like to comment on the following points. Implementation Problems The audit agrees 1. The implementation problems mentioned in the different project that some of these components, i.e.9 underestimation of physical quantities and the problems could have inclusion of unanticipated items (para. 2, p.2); right of way been reduced with problems which held up port works and necessitated the redesign better planning, of the irrigation system (para. 16, p. 11); the stoppage of the and this has been credit for rodenticides because it was available through another noted in a foot- credit program, thus no longer necessary (para. 8, p. 5), point note to para. 16 to inadequate prior preparation. The delays in project start can of the PPAH. likewise also be attributed to the lack of detailed implementation planning or a start-up plan. It is noted in the PCfr that the masterplans for the agricultural services and! schistosomiasis con- trol components took longer than expected while the boundary survey for watershed protection took four years to complete necessitatig delayed start of construction activities. Project Impact (p. 3) 2. The failure of the small project components, i.e., watershed protection, agricultural services, Mangyan assistance and - 24 - Attachment IV Page 2 schistosamiasis control, to meet projected benefits may be attri- buted to lack of mpotivation and/or understanding an the part of the beneficiaries on the uses of the facilities.' Low laboratory throughputs (parm. 8, p. 5), the reported low levels of use by farmers of certified seeds, the reluctance of residents to submit themselves to medical diagnosis, and the reluctance to cbangeover fron permanent crops, such as coconuts, to irrigated paddy (pazm. 18, p. 13), shows the need to consider the existing cultu- ral milieu during project preparation in order to ensure project success. These also call for closer institutional support. The changeover fran permanent crops to paddy should have considered the initial capital outlay for the farmers. Project Design (p. 8) This has been 3. The Report notes that the multi-conponent design of the project noted in a foot- made implementation as well as supervision difficult (paras. 12- note to para. 12 14, p. 8). We would like to nte, however, that this may not of the PPAM. always be the case. One project experience involving agricultu- ral developnent which was implemented at the same time as the subject project was rather successful with the multi-sectoral approach. There was efficient coordination and implementation was well organized. This may be attributed to the fact that the implementing mechanism for the project was identified and struc- tured during project formulation. Operation of Irrigation %tems (p. 12) These comments 4. Regarding maintenance funds for irrigation, the billing problem reinforce the has yet to be solved by NIA. Areas serviced by NTA's systems viewpoint have to be demarcated fron the areas supposedly serviced by expressed in private systems through the use of parcellary maps. Also, NIA the PPAM. has no real authority to force farmers to pay for use of irriga- tion facilities. These concerns are also true for other NIA pro- jects and NIA is well aware of the requirements on its part. We appreciate this opportunity to conment on the draft PPAR and we hope that our comments will be useful for the final evaluation. Best regards. V truly yours1 G. - 25 - Attachment V Republic of the Philippines Page 1 Office of the Prime Minister CABLE *MIRDO National Council on Integrated Area Development P. O. BOX NO. AC 36 MINI0R0 INTEGRATED RURAL IEVELOPMEN OFFICE MANILA. PHIOPPINES LOLA TAYA 81dg.. 1165 Cuason Ave.. 0. C. Tels. 96-10*0, 91L10-36.96-10-76 5 November 1985 Code No. g Mr. Yukinori Watanabe Director Operations Evaluations Department International Bank for Reconstruction and Development 1818 H Street, N.W. Washington, D.C. 20433 U.S.A. Dear Mr. Watanabe: These As a rejoinder to your letter dated 11 September 1985, comments we are forwarding herewith our comments/observations on the first summarize draft of the Project Performance Audil ieport regardin6 the Hindoro the points Integrated iural Development Project (Loan 1102-9H). The hereto raised in attached consolidated comments/observations were done in consultation Attach- with the principal agencies concerned. As per our agreement, the ments I-IV. same agencies shall be individually sendint their views and comments on their respective components. We hope that our comments/observations shall serve your objective of reaching balanced conclusions concerning this groject experience. Thank you and regards. Very truly yours, C;utLJSA.S i-roject Dire tor End.: a/s CAS/jaj - 26 - Attachment V Page 2 PROJECT PERFORMANCE AUDIT REPORT COMMENTS/OBSERVATION I. (page iii) BASIC DATA SHEET I. If CY 1983 is being alluded to KEY PRODUCTION DATA by the performance rating, it is hereby pointed out that the Agronomic Performance: provinces of Mindoro suffered much from the drought that hit Actual or current estimate the country during the year. Poor On the account of this, no amount of technology can result in increased production. In consideration thereof, it is requested that the said perfor- mance rating be deleted. II. EVALUATION SUMMARY E. (page vi) SUSTAINAILITY . . .The components for assis- On June 30, 1984, the President tance to the Mangyans came to of the Philippines signed Execu- a complete halt in 1984 when tive Order No. 969 formally the implementing agency was creating the Office of Muslim disbanded. Although a succe- Affairs and Cultural Minorities ssor organization has been (OMACC), which officially dis- formed, this has not yet banded and effected the merger become operational. of two agencies, to wit: Presidential Assistance on Natio- nal Minorities (PANAMIN) and the Ministry of Muslim Affairs (OMA). All functions previously exercised by the above agencies are now assumed by OMACC. III. PROJECT PERFORMANCE AUDIT MEMORANDUM PROJECT SUMMARY Project Impact (page 3) 3. Although little data is available Corresponding delayed or logged concerning the pact of the proj., responses to economic stimuli may it appears to have been a quali- still be latent among project fied success, despite some beneficiaries at the curzent period serious shortcomings. The impact of assessment and that Its full of the improvements to the roads impact maybe generated from 1985 and the port seems to have been onwards in view of the project's especially beneficial, while delayed implementation (1975- there were also significant 1983) and the current economic benefits from irrigation. How- situation the country is facing. ever, the remaining small proj Hence it could be noted that 1984 -27- Attachment V Page 3 components appear to have and 1985 may still be pre- been rather unsuccessful, mature to assess the full perhaps because they were merits of M projects. not sufficiently important Notwithstanding this, however, for the implementing agencies it was noted that the project to give them serious attention. as a whole, especially infras- tructure, has been assessed to be viable. 8. Agricultural Services (page 5) .However so far throughput The reduction in area and volume aWthese laboratories has been of production of certified seeds well below expectations. could be attributed to the follow- ing factorsa - Failure of the Seed Growers to meet the requirements for Certified Seeds due to comple- xities and high cost of seed production technology. - Inferior net profit that could be derived from seed production vis-a-vis commercial rice pro- duction. - Decrease in the areas served by the M-99 program. It need not be overemphasized that the activities of the labo- ratories are, in a large extent, contigeut on the volume of busi- ness of the Seed Growers, i.e. the lesser the area planted, the lower is the produce and conse- quently, the lesser the number of samples submitted to the laborato- ries for analyses and certification. Lately, the local demand for certified seeds had considerably mounted as a result of the imple- mentation and acceptability of the Intensified Rice Production Program (IRPP), a supplementary program to Masagana 99. The program is expected to expand through increased hectarage in the ensuring years and thereby create greater demand for certi- fied seeds, thus increase the throughput of the Seed Testing Laboratories. -28 - Attachment V Page 4 9. Schistosomiasis Control (page 6) .The project did not succeed If the report meant eradication in eliminating Schistosomiasis, by elimination, the aim of the although some reduction in the project is to control Schisto- incidence of the disease was 3oMia3is and not to eliminate. reported. 10. Mangyan Assistance (page 6) . . Very little was achieved As of October 1935 and commencing with this component and it from date of takeover, the total had almost no impact on the amount of P235,777.60 has been majority of Mangyan people. released for the two Mindoro provinces in the implementation of various ocio-economic deve- lopment projects for the benefit of the cultural coaunities. Aside from the provision of live- lihood programs, OMACC is also extending all the necessary assistance in the provision of medical, legal and other services the minorities are greatly in need of. B. FACTORS CONTRIBUTING TO DELAYS IN PROJECT IMPLEMEN- TATION C. Right of Way Problems 9 (pages 11-12) . . .The original plan for The original plan for this scheme this scheme was based on a was based on a pumped system gravity system supplying supplying 1,000 ha. This was 1,000 ha. This was changed changed to a gravit system to a pumpe system designed designed to irrigate only 300 ha. to irrigate only 300 ha. because right of way problems because right of way problems interfered with construction. interfered with constructions. IV. OVERVIEW OF THE PROJECT COMPLETION REPORT Project Results (Based on PCR) 14. Schistosomiasis Control (page 3) . ..Of the 10 areas covered by It should be rephrased as follows: drainage works, eradication is Of the 10 areas covered by drainage stated to have achieved in 6, works, eradication is stated to but at the same time, 8 new have achieved in 6, but at the colonies developed elsewihere. same time, 8 new colonies were discovered. - 29 - Attachment V Page 5 V. THE MIRDP AS AN IAD PROJECT F. Findings and Lessons (Page vi) The complex multi-component design True, MIRDP experienced imple- made project implementation diffi- mentation difficulty owing to cult. This was especially true for the complex nature of its multi- several of the smaller project com- component design. The said ponents, such as shistosomiasis difficult experiences, however, control and assistance to the are organizational in nature Mangyan minority group, for these and should not be taken as points were not given full support by the against the effectiveness of the implementing agencies and the IAD approach. The said organiza- project director (coordinator) tional shortcomings are only to did not have the authority to be expected considering that a) insist that this support be MIRDP is the first IAD and as such given (PPAM paras. 12-13 and PCR is on a piloting stage and b) the TOverview paras. 24-27). expected organizational set-up at appraisal where the project director exercising significant authority over line agencies did not materia- lize, thereby rendering coo-t-IlIatory activities doubly difficult. The project has not been followed Despite the above problems, how- by a Bank-supported second-phase. ever, MIRDP were able to accomplish However, the Bank has supported its objectives and to quote from separate follow-on projects for PPAR, overall the project was a improvement of roads and irriga- qualified success. tion. The audit believes that this will. prove to be more effective It is our feeling therefore that than the "integrated" approach the minor shortcomings considered adopted for Mindoro Rural Deve- the "integrated" approach is proven lopment Project (PPA para. 15). effective in Mndoro and that follow- up projects under similar approach would even be more effective if lessons learned from MIRiDP's expe- rience will be evaluated and uti- ized to facilitate further improve- ment in the implementation of succeed- ing IAD's5. c - 1 REPUBLIC OF THE PHIUPPINES NACIAD - 31 - tice of te frie jfilliste a& - A NATIONAL COUNCIL ON INTEGRATED AREA DEVELOPMENT FBI BLDG.. OD TIMOG AVENUE OUEZONCITY TEL NO. 9785-21 to 25 14 November 1985 Attachment VI Page 1 Mr. Yukinori Watanabe Director Operations Evaluation Department The World Bank Washington, D.C. USA Dear Mr. Watanabe: I thank you for your letter transmitting a copy of the first draft of the performance audit report on the Mindoro Integrated Rural Development Project. We appreciate the bank's efforts to get a balanced outlook on the successes and failures of the project considering its significance as one of the first foreign assisted projects to be designed along the concept of integrated area development. From our end, the Mindoro Project is certainly the first in a series of projects, each one unique in design, that have given impetus to the creation of NACIAD in 1978. we have therefore always looked at the project as the first experiment of a development concept that to this day has been considered as a logical but controversial answer to the challenge of rural development. Part of the controversy of course stems from a lack of a common understanding and perhaps abuse of the term "integratedo to which we must admit that even our own organization may have been guilty of in the past. Being tle first so-called IAD project, MIRDP may have absorbed much of this misunderstanding. We would wish therefore to clarify a few points which were raised in the draft report so that the lessons from the project may be placed in proper perspective. a) On "integrated" financing vis a vis r:ector financing The audit agrees We should make a distinction between an integrated development that Government project and integrated funding - the latter not necessarily a should implement requirement for the former. Sector funding may be consistent all necessary devel- with IAD as long as the projects being implemented are part of opment programs in the framework and priorities defined in an TAD plan for a give.t an integrated or area. We presume that the decision of the bank to undertake coordinated fashion, separate follow-on projects for Mindoro instead of the although implementa- integrated approach was more in consideration of ease in super- tion should probably vision of the Bank rather than its disregard of the IAD concept. be the responsi- bility of indi- b) On agency priorities vis a vis "integrated" priorities vidual line depart- ments. For the Bank Both the audit report and the PCR overview stress the it is more efficient inadequacies of sinte line agencies resulting from the low to undertake separate projects for the main components of the duelopment package, for the Ban uannot supervise numerous different components effectively. - 32 - Attachment VI Page 2 priority status accorded to the project compared to the agencies' The audit agrees sector program. Further, it was mentioned that line agencies that the capability are only willing to give full support if their respective compo- and capacity of the nents are large enough to warrant this. This may be an over- agency may be one simplification'of the conditions prevailing during the early of the most years of the project. We feel that the capability and capacity Important determi- of the agency is the more relevant issue ather than tle basis nants of the of its priorities-thus the usually more stable performauce of outcome from proj- HM and NIA compared to the other agencies such as BFD, PAN , ect components. MR, and BPI. There are enough cases in our current roster of Pat-a. 3 of the projects that would suggest that sometimes it is the smaller PPAM has been project that receives priority over the larger. amended to reflect this. c) on the difficulty and effectiveness of implementation it is mentioned that impleentation was made more difficult because of the complex design of the project and that the follow-on sector projects would be more effective than the integrated package. By the mission's own account, the Project Director only coordinated the implementation by the agencies of their respective components. Implementation in this cae would therefore be only as difficult as each agency perceives it to be. coordination on the other hand is admittedly difficult under any circumstance and thisis essentially the reason why*a project office was created. As to the question of effectiveness there may be a need to elaborate further on what exactly the follow-on projects are effective at compared to IRDP. d) Deficiencies of the project completion report The audit agrees We are fully in agreement with the mission's obse'rvations on that monitoring the inadequacies of the PCR in the light of the numerou questions and evaluation that need to be answered if ever we a to learn from the experience was not effective of the project. This underscores the importance of ensuring that and sote essential an appropriate monitoring and evaluation system should be designed information w into the project so we may truly gauge its effectiveness. The not available absence or lack of essential informatin on the project has iampered for the audit. the task of those involved in the preparation of the report. In closing we wish to point out that the most important lesson that we have learned from fIRDP is that the logic of IA as a strategy fo rural development should be tempered by the capacity and flexibility of adminis- trative systems both of the government and the funding institution to operationalize it. TheP Is a test of that capacity and flexibility which we in NACIAD have constantly tried to improve on. Very truly yours, J.A : A. LIMCAOCO Depu Executive Director - 33 - PHILIPPINES MINDORO RURAL DEVELOPMENT PROJECT (LOAN 1102-PH) Project Completion Report Overview June 13, 1985 Projects Department East Asia and Pacific Regional Office -3 9,- - 35 - Philippines- Mindoro Rural Development Project (Loan 1102-PH) Overview of the Project Completion Report Introduction 1. This overview is based on the Project Completion Report (PCR) for the Mindoro-Rural Development Project, which was prepared on behalf of Government by the National Council on Integrated Area Development, and by the principal implementing agency, the Mindoro Rural Development Office (MIRDO). Annexes to the PCR, covering the individual components, were prepared in consultation with the principal agencies concerned. The PCR was received in the Bank in December 1984. 2. This overview is set out in the following sections: project objectives (based on the SAR); results (based on the PCR, except as otherwise stated); and a brief critique. This overview is not intended to be a comprehensive analysis of the project, but rather a critical assessment of the data, analysis and conclusions of the PCR. Project Background and Objectives (Based on SAR) 3. The project was identified by the Bank and prepared by the FAO/IBRD Cooperative Program in 1973, and was appraised in 1974. The loan agreement, signed on April 16, 1975, became effective on July 28, 1975. The project, estimated to cost US $50 million, of which the loan provided US $25 million, was to address the rural development needs of the islind of Mindoro. The loan was closed two years later than expected, in December 1983. 4. The island of Mindoro is separated from Luzon by a sea-crossing about 45 km wide. It is divided into two provinces which are split from each other by a high mountain range, running north-south. The population, mainly rural, was estimated at 500,000. The identified investment needs included: (i) the construction or improvement of 430 km of roads; (ii) the upgrading and rehabilitation of small port facilities; (iii) the provision of 5,000 hectares of additional or improved irrigation, (iv) watershed protection; (v) improved agricultural support, specifically (a) improved seed testing and production, and (b) pest (rat) control measures; (vi) a pilot program to address the problem of controlling schistosomiasis; and (vii) the provision of medical services, and technical and legal advice, to aid an ethnic tribal minority living in the mountainous areas. 5. The anticipated benefits included a net incremental production of 105,000 tons of paddy to be shared by about 30,000 farmers, 13,000 seasonal jobs, and an improved road system to handle a bigger volume of traffic. The- unquantifiable benefits included improved health and a better environment and living conditions for the population. 6. The SAR recognised the potential complexity of the numerous project activities split between two geographically separate areas, and addressed this by suggesting the creation of what became the Mindoro Rural Development Office - 36 - (M1RDO). Under the Cabinet Coordinating Committee 1/, a Project Director, and small staff, were to direct and coordinate project progress among the several main government agencies which would be responsible for implementation of the individual components. At the provincial level, designated agency officers were to meet in committee under the chairmanship of the provincial governor, to resolve liaison problems. Project Results (Based on PCR) 7. As noted in the PCR, physical completion up to 95% of the appraisal estimate took three years longer than expected, and gross expenditures exceeded estimates by 28%. Judgements on impact are particularly difficult because in most cases data on improvements are of an indirect nature, and hence, are not satisfactorily analysed in the PCR. However, a calculation based on the limited data available and a sensitivity analysis indicates that the project had a positive economic impact overall (see para. 17) even though, as the fllowing paragraphs show, there were problems in individual componen s. 8. Roads. 92Z of the construction targets were met with expenditures 61% above SAR estimates. The principal problems were associated with delayed awards of construction contracts, compounded by poor contractor performance which eventually entailed rebidding to finish construction. Traffic volume and the pace of transportation is stated to have improved. However, although a specific example is given, this is not authenticated as typical. 9. Port Facilities. Targets were completed with only minor amendments in initial design; expenditures exceeded SAR estimates by 54%. Delays in construction of civil-works, aggravated, in part, by unforseen land access (right of way) problems, accounted for a large portion of the cost over-run. Although port usage levels have not reached SAR projections, nevertheless, they increased by 25r% between 1973 and 1982. 10. Irrigation. Expenditure was 70% above SAR estimates 21, in completing about 91% of target works. Contractor performance was poor, but adversely affected by a total of 76 typhoons which crossed the island during the construction period. The PCR gives some improved yield figures but authentication is not firm (see further para. 17). The PCR suggests that increased net farm incomes are unlikely due to rising input costs. 11. Certified Seed Production. The cost of the sub-component exceeded estimates by 71L. Seed testing laboratories were eventually established in both provinces, but they did not become operational until after 1981, when the required equipment was installed. Interim attempts to increase quantities of improvtd seed resulted in an over-supply of "registered" seed, but only 17% of 1/ This Committee became the National Council on Integrated Area Development in 1978 (see Para 1). 2/ Comments in other reports indicate that one of the communal igation subprojects had the exceptionally high cost of P 33,346/Ha. - 37 - the production targets of certified seeds. 12. Pest (rat) Control. There is some ambiguity concerning the area covered, but is generally stated to accord with appraised targets. Within areas, inputs were restricted by budget/funding problems, and expenditures were 63% below those anticipated. Field estimates indicate that rat damage had become minimal (under 0.1% losses) by 1982; however the implied increase in net yields given in PCR cannot be authenticated (see para 10 above). 13. Watershed Protection. While expenditures were 11% above estimates, and while most of the activities envisaged were initiated and worked upon, the "on-ground" impact appears to have been minimal 3/. Budgeting and funding release constraints, which affected all components, were particularly severe on this component. Although not specifically stated in the PCR, there is a clear implication that the continuous delays in budget releases caused a combination of work duplication, untimely work, and substantially higher costs relative to actual output. 14. Schistosomiasis Control. Less than 50% of the anticipated amount was expended on this component. Preparation of an overall, detailed, component plan 4/ involved controversial design decisions and took much longer than expected to gain approval (including from the Bank). Subsequently, the regular annual late releases of budgeted funds constrained timel- intervention in each sub-component, with the effect of making it now difficult to distinguish whether sub-component failure (or ambiguous results) originates in basic design faults or from the lack of timely action in implementing part of that design. The health education system lacked the envisaged audio-visual mobile unit; there is no information on the practical results of installing the targetted number of water-seal-toilets; diagnostic work was substantially below that planned and selectively targetted. Drainage, for snail control, was curtailed because of perceived excessive cost. Cumulative statistics concerning snail control provide an ambiguous picture. Of 10 areas covered by drainage works, eradication is stated to have been achieved in 6, but, at the same time, 8 new snail colonies developed elsewhere. The disease is stated to have been wiped out in 9 of 25 colonies, but the infection rate increased in 15. 15. Assistance to Minority Tribal Group. Expenditure of US $0.5 million was about 84% of that envisaged. While some service centers were established, and the level of medical and legal assistance was increased, these improvements were substantially below those anticipated at the time of appraisal. The principal reasons are given as funding and personnel problems. All activities came to a standstill in 1978, when the implementing agency (PANAMIN) lost most of its field staff. Activities were resumed only during 1981. 3/ The textual context in the PCR is ambiguous. The record here is, in part, drawn from other reports. 4/ Detailed planning was left to the implementation stage by appraisal. - 38 - 16. Comments on Economic Analysis. A crosscheck of the economic rate of return (ERR) calculations in the PCR brought to light several problems, prima- rily of paucity of supporting data, and minor inconsistencies. 17. The costs and incremental benefit figures given in the PCR were, therefore, adjusted as seemed appropriate and the ERRs of some components recalculated.5/ The results are: PCR Overview National Roads 17.7 17.2 National Irrigation System 18.1 16.8 Total Irrigation Component 17.7 16.4 Irrigation, Provincial Roads and Agriculture (National Irrigation System) 18.9 15.6 The overview calculations suggest ERRs of 0.5% to 3.3% below the PCR figures for individual components. An attempt was also made to calculate the ERR for the entire project. The actual financial costs of the project in Table 12 of the PCR were converted to 1983 constant terms by using the consumer price index for local costs and the Manufacturing Unit Value (MUV) index of the World Bank for foreign costs (assumed to be 40% of total costs based on Table 11 of the PCR). The adjusted benefit figures used were those shown in Annex 1 of this overview. The ERR based on these data is 15%. A sensitivity analysis was also undertaken. Since the yield assumptions in Table 6 of the PCR appear to be optimistic (3.7 tons/ha for irrigated wet season rice and 4.0 tons/ha for irrigated dry season rice in national irrigation systems at full development in 1988 compared to actual yields of 2.6 tons/ha and 2.8 tons/ha respectively in 1983), the sensitivity analysis assumed full development yields of only 3.0 tons/ha for irrigated rice in the wet season and 3.2 tons/ha in the dry season for national irrigation systems (the communal irrigation systems were ignored because of their very low share in project costs and benefits). The ERR in this case is 12.7% which is still above the estimated opportunity cost of capital of 12% in the Philippines. This ERR, of course, assumes that road benefits, particularly savings in vehicle operating costs, have been correcLly calculated. Compared to appraisal estimates of vehicular traffic and reported actuals in the PCR, the estimates of savings in vehicle operating costs appear reasonable. The overall project can, therefore, be considered economically viable, even if the yield increases assumed in the PCR do not materialise. A Brief Critique, Lessons,and Discussion of Main Administrative Issues 18. Critique The PCR is a lengthy document containing a substantial quantity of valuable, factual data of a non-controversial nature. However, some of the conclusions are debatable because they rely heavily on opinion and estimates of improvements which cannot be satisfactorily authenticated. In 5/ The revised figures are shown in Annex 1 (revised Tables 18, 28, 30 and 31). - 39 - brief, the document is strong in descriptive narrative but rather weak in analytical discussion. It is the Region's conclusion that the overall effect of the project has been positive (see para 17 above), despite disappointments with physical progress and cost overruns, but that the benefits of both the quantifiable and unquantifiable types have been lower than expected at appraisal. 19. Lessons and Issues. The PCR indicates that lessons have been learnt, without being specific. The implication is of lesson learning in the technical area, in particular the need for greater attention to technical feasibility work. Lack of adequate pre-implementation design, or technical data, led to both overly expensive sub-projects,6/ and was a contributing factor to the problems with contractual construction (see below). 20. Government's handling of contractual arrangements appears to have been arbitrary and somewhat unrealistic. There are references in project files to: strong attempts to force downward price revisions, after the bidding process; little and/or slow reaction to reasonable contractor requests for price adjustments to meet inflation-caused cost increases; inadequate "change- order" procedures, or unsympathetic consideration of7 nforseeable events, e.g. typhoon damage, changes in basic supply pattern etc- 21. The problems with the schistosomiasis control component were noted both nationally and internationally in the search for improved approaches and methodology. In this lesson learning sense the component served its original purpose.8/ 22. At the macro-level, this review wishes to draw attention to two administrative issues (alluded to throughout the PCR), which, in combination, resulted in constraints greater than all those created by technical, political and climatic difficulties. First, throughout the preject period Government's budget approval and release mechanisms were inadequate for project purposes. The approval process was often both contentious and ambiguous, and almost always delayed beyond the point when action plans should already have been initiated. This position was aggravated by delayed releases of funds against budgets even after approval; examples of fund releases two months into a fiscal period are common and longer delays also occured - in one case, allegedly, of eight months. The second issue concerns the suitability of the organiza- tional/administrative arrangements for project implementation. In retrospect, the question also arises whether the combination of such a diverse set of components under one project rendered effective implementation unlikely, if not impossible, particularly in the difficult circumstances facing the country. 6/ E.g. one of the communal irrigation sub-projects - see para 10 and footnote 4. 7/ There were, of course, several other causes for poor contractor performance. 8/ More recent Schistosomiasis control efforts employ a totally different conceptual approach to that prevalent in the early 1970s. - 40 - 23. This is not the place to develop the full range of arguments /alter- natives, but it is clear that the functions for the main implementation unit (The Mindoro Integrated Rural Development Office - MIRDO) were ambiguously defined at the design stage, and as a result its powers were much more limited than expected 9/ during implementation. By implication MIRDO's functions were both to coordinate and to direct the course of the project; while, simulta- neously, implementation responsibility for each component rested with the main agency of Government concerned (e.g. road construction by the Ministry of Highways). As the budget process is initiated and controlled by the functional Ministry, which deals exclusively with the Budget Office, it is completely outside the control of a unit such as MIRDO to influence events. Expenditures relating to the project were very minor items relative to a Ministry's total budget and thus inevitably received low priority during the Ministry's budget formulation, and, subsequently, were prone to reduction if the Ministry had to choose priorities in the event of a fund shortage. 24. In brief MIRDO had no leverage with the main implementing agencies in budget planning or authorisation. And, as MIRDO also had no direct dealings with the Ministry of Budget, it also lacked any influence in assisting the main agencies to obtain budget resources and consequently lacked influence with regard to its coordinating role. 25. Given the inevitable low profile of project components within an individual Ministry, and given the budgetary problems which many of the Ministries themselves faced, it is highly probable that personnel within each main agency paid inadequate attention to the project's needs, and assigned lower priority to it in comparison with their own needs. 9/ The SAR 3eems to have assumed that MIRDO would automatically have a power base by being placed directly under a Cabinet level committee. - 41 Annex 1 Page 1 of 3 PCR TABLE 18 (Revised) NET BENEFIT FLOW (P'00O) 1977 (43,444.3) 1978 (45,653.2) 1979 (47,926.3) 1980 (18,095.2) 1981 (31,125.4) 1982 (47,293.7) 1983 (50,415.7) 1984 64,726.0 1985 67,585.2 1986 70,572.4 1987 73,411.8 1988 69,138.5 1989 79,443.9 1990 82,646.5 1991 85,980.4 1992 93,647.1 1993 94,780.6 1994 111,131.2 1995 121,082.4 1996 131,939.1 1997 143,169.3 1998 148,142.0 1999 168,629.0 2000 -183,036.9 2001 174,482.0 2002 190,569.6 2003 202,849.6 ERR - 17.2% -42 - Annex 1 Page 2 of 3 PCR TABLE 28 (Revised) (P'000) Incremental Benefit Net Benefit Flow 1975 0 (3,629) 1976 0 (15,144) 1977 5,515 (34,091) 1978 2,678 (25,267) 1979 (11,637) (41,051) 1980 (5,256) (64,984) 1981 12,443 (16,121) 1982 21,552 394 1983 31,790 33,086 1984 40,158 39,375 1985 48,526 47,620 1986 56,894 55.773 1987 65,262 64,009 1988-2004 73,630 72.267 ERR = 16.8% PCR TABLE 30 (Revised) (P000) Incremental Benefit Net Benefit Flow 1975 0 (3,857) 1976 0 (15,781) 1977 5,670 (35,446) 1978 2,916 (26,826) 1979 (11,340) (44,953) 1980 (5,305) (72,356) 1981 13,424 (19,225) 1982 23,158 (2, 34) 1963 33,100 33,823 1984 41,786 40,963 1985 50,472 49,517 1986 59,158 57,974 1987 67,844 66,514 1988-2024 76,530 75,071 ERR = 16.4% - 43 - Annex 1 Page 3 of 3 TABLE 31 (Revised) (PI000) Incremental Benefits Net Benefit Flow 1975 0 (3,629) 1976 0 (16,412) 1977 5,515 (38,176) 1978 2,678 (29,284) 1979 (11,637) (46,031) 1980 (5,256) (66,907) 1981 12,443 (18,904) 1982 21,552 (2,835) 1983 31,790 26,441 1984 40,158 39,180 1985 48,526 47,425 1986 56,894 55,578 1987 65,262 63,814 1988 73,630 72,072 1989 to 2024 73,630 72,072 ERR = 15.6% 一夕夕一 才命＇州叮＇斤〞皮 - 45 - MINDORO INTEGRATED RURAL DEVELOPMENT PROJECT PROJECT COMPLETION REPORT July 1984 National Council on Integrated Area Development Mindoro Integrated Rural Development Office 二 沐 柄 、 偽＼ n’俟 取’ 亂 很 - 47 - MINDORO INTEGRATED RURAL DEVELOPMENT PROJECT PROJECT COMPLETION REPORT 1. INTRODUCTION The integrated approach to rural development was conceived in 1973 and through the initiative of he MiniSLry of Agriculture was formalized as a development strategy of the Philippine Government :hrougn Letter of inscruc- tions No. 99 (July 1973) which created the Cabiner.Coorainacing Committee on Integrated Rural Development ProJects (CCC-IRDP)..t _r':rts of the Minister of Agriculture, the Chairman of CCC-IRDP, in spearheadinz che identification and negotiations for the financing of the first inEegra:ed rural development project, resulted in the creation of the World Bank Identification and Preparation Mission in 1973 and the subsequent formulation of the Mindoro Integrated Rural Development Project (MIRDP). The island of Mindoro was selected as the pilot IRD area in view of its low level of development although rich in natural resources and having vast potenEials for agriculture. At the time of project preparation, Lhe Der capita income of Mindoro was way below the national average. Rice produccion averaged thirty cavans per hectare only and was largely dependent on rainfed and small communal irrigation. With its favorable climace. Mindoro had --he potentials to become an alternative granary co Central Luzon to supply . Ood to food-deficit areas. The formulation of the MIRDP was undertaken under the FA0/IBRD Cooperative Program. The project as conceived proposed for irrigation devel- opment, roads construction and improvement, port rehabilitation, watershed protection, agriculture development, schistasomiasis control and Mangyan assistance. The Appraisal Mission which visited the country in June 1974 concluded that as designed. the project was technically sound and economically viable and thus was suitable for IBRD funding. Following the report of an Appraisal Mission, a foreign loan for the implementation of the MIRDP was signed between the Philippine Government and the World Bank on April 16, 1975. Loan Agreement No. 1102-PH provided US$25 million to the estimated project cost of US450 million. The Philippine Government was to put up a counterpart contribution of US$25 million. Presidential Decree No. 805 issued on October 2, 1975 formally launched the Mindoro Integrated Rural Development Project under the coordina- tive umbrella of the ff C-IRDP, now the National Council on Integrated Area Development (VACIAD).- It designated the Minister of Natural Resources as I/ The CCC-IRDP was designated as the policy making and governing body for the planning and implementation of all integrated rural development projects in the country. 2/ Created in May 1978 in lieu of CCC-IRDP. The NACIAD is presently under the Office of the Prime Minister and has the Prime Minister as Chairman. - 48 - the project's Cabinet Coordinator and Chairman of 7n Executive Committee which was to serve as the project's poiicy-making body.- Through the said decree, the Mindoro Integrated Rural Development Office (MIRDO) was also created. Headed by a Project Director, MIRDO was tasked largely with planning, overaLl coordination and monitoring functions. The MIRDP's goal is the promotion of the synchronized development of the agriculture, natural resources, infrastructure and social services sectors of the Mindorn orovinces, ultimately to improve the ILVing conditions of the people ir Mindtro. Specifically, it seeks to realize the foLlowing objec- tives: (a) to help curb economic and social imbalances within The region; (b) to assist national programs for food grain self-sufficiency; (c) to increase farmer's incomes and opportunities for off-farm and non-farm employ- ment. A complementary objective is to build up government systems for planning and implementing integrated projects in rural areas. The MIRDP was envisioned to fill in some gaps in the development of the island by placing emphasis on primary needs relating to agricultural support services, water control and transportation. Closely examined, the MIRDP revolves on agricultural production development. It is based on the premise that agricultural production is enhanced not only by improved agricul- tural practices and efficient water control. It likewise calls for support transportation infrastructure that would facilitate and encourage input and output mobility. For a province which has always been a rice exporter, the roads and port projects could provide the incentive to produce more for better markets outside the island. To be implemented within five years, from 1975 to 1980, the MIRDP is expected to benefit directly some 30,000 paddy farmers representing about 40% of the island's population through its irrigation and agricultural production components. It would benefit an even larger number of people through the transportation, schistosomiasis control and Mangyan assistance projects. With MIRDP, full development of the island by 1985 was predicted. Total paddy pro- duction of the island, considered to be a major indicator of project impact would then be about 340,000 tons, a 35% growth from the 1974 level. Six government agencies were involved in MIRDP, namely, the National Irrigation Administration (NIA), the Bureau of Plant Industry (BPI) of the MinistrX of Agriculture (MA), the Ministry of Public Works and Highways (MPWH),- the Ministry of Health (MOH), the Ministry of Natural Resources (MNR) and the Presidential Assistant on National Minorities (PANAMIN). Each 3/ The Minister of Agriculture assumed the Cabinet Coordinator position following a Council decision in 1982. 4/ A merger of the Ministry of Public Works and the Ministry of Public Highways by virtue of 0 710 (July 1981). - 49 - of these agencies provided the structure, manpower and funds for the implemen- tation of their respective components. Coordination of the sectoral activi- ties was mainly through the Project Advisory Com ttee (PAC), a national inter-agency Committee established under PD 805.- The implementation of the Project was not completely devoid of hindrances. Among the common problems were delayed start-up as funds were not immediately made available, and plan finalization/pre-construction works took longer than expected; insufficient and delayed budget reieases: :hanges in project and specifications during the construction stage; Lnfavoroie weather conditions; poor performance of contractors; and the delaved or non- procurement of the required equipment. The oil crisis in the late 70s increased costs considerably and created shortages in construction materials so that operations generally slowed down and several contracts had to be terminated. On the management aspect, difficulties were also encountered in streamlining certain operations owing mainly to the project structure which did not provide MIRDO administrative control over implementing agencies/ ministries. During the initial years of MIRDP, the inexperience of some agencies in handling foreign assisted and/or multi-sectoral projects also set back certain activities. Due to the delays, the MIRDP was granted an extension of one year in 1980. In 1981, another extension was sought by the Government of the Philippines. Although the request was for a closing date of June 30, 1983, the World bank decided to extend further project completion to December 1983. MIRDP however maintained the June 1981 deadline for the non-infrastructure projects and reallocated the unused portions of the loan as of June 1981 to the roads and irrigation projects. While MIRDP was ongoing, Prime Minister Cesar E.A. Virata, Chairman of NACIAD, approved on December 1981 the recommendation of the MIRDP Executive Committee to continue the operations of MIRDO in the conduct of planning activities supportive of its ongoing projects. The approval in effect, authorized MIRDO to develop a Phase II concept which would allow the coordina- tion of the implementation of locally funded vis-a-vis foreign assisted projects and encourage private sector participation. MIRDP Phase II therefore was developed to address itself to agro-industrial development. Recognizing the imbalance created by the project between the two provinces, Phase II empha.izes the development of Occidental Mindoro. On July 23, 1983, the MIRDP I was inaugurated at the Calapan Port of Oriental Mindoro. It marked the formal turnover of the MIRDP components to the respective agencies or organizations for operation and maintenance. On December 1983, loan funding assistance to the project was terminated. By this date, MIRDP had substantially completed its physical targets and availed of the loan. 5/ PD 805 likewise formalized the creation of the MIRDP Executive Committee, MIRDP's policy setting body, and an Agricultural Development Coordinating Council in each province. These committees however were not as active as the PAC. - 50 - LOCA11ON OF MIRDP COMPONENTS ia sta emu LocTom map DONGA SCALE: l : 800,000 LEGEND. NIA-IRRIGATION s PANAMN-MANGTAN SERVICE CENTER % BD-WATERSMED RESERVTION a 8 ~PHCALAPAN PORT 'mt . NSCC-SCHISTOSMWASS ENDEMIC AREAS MIPWM ROAD COMPONENT sa1 NTL. HIWAY (BY CONTRAC) -ATL. HIGIWAY (BY FORCE ACCMfMT) - DETAILED ENGINEERING PROVL.RDADS ( BY FRCEACCOUNT) PROTLIIDADS (BY CONTRACT) 95P/MA - SEED TESTING LABORATORIES - 51 - The MIRDP experience offers important lessons in shaping better multi-sectoral programs in the future. This is in fact one of the objectives of this Project Completion Report as this highlights events, situations and decisions which have either facilitated or constrained project impLementa- tion. The Report is essentially on strategies adopted, achievements, invest- ments and institutions involved and looks into the arrangements for operations and maintenance of project activities. Whenever information on proJect effects are available, these are presented although some validation and further investigations may be requireo in the next five years. There is however an attempt to reassess the economic viability of selected projects given actual conditions during project implementation and a new set of assumptions on the future situation. II. THE MIRDP: 1975-183 A. Project Components 1. Roads Improvement and Construction Outputs. Upgraded to DBST standard was the Baco-Calapan-Roxas national road which has a total length of 146.9 kms. Provincial roads con- structed covered 246.35 kms with iu3.j kms located in Oriental Mindoro and 143.05 km in Occident?l Mindoro. The road con-:ruction program generally followed the projects identified during appr;.isal. During the design though, some provincial road sections were expanded/shortened and roadworks included in some bridge projects. Two provincial road projects in Occidental Mindoro (Malatikwang- Gutad and the San Vicente Jct. - Pag-asa) were deleted thus the final output of provincial roads was short of 33.65 kms from the original target. The detailed engineering of the San Jose-Mamburao Road was completed in April 1978. It is now under implementation as part of the IBRD-funded Rural Roads Improvement Project. Cost. The total cost of the project was placed at P 300.2 M ($37.0 M). This is higher than the appraisal estimate by 61.0%. The increase is attributed mainly to the four-year delay in implementation and the rebidding of projects in 1980 under a situation of rising costs. The actual contract cost of the national roads more than doubled (126.8%) the original estimate (Table 1) so that the average investment cost per kilometer was raised to P 1.271 M as against the 1977 estimate of . 0.56 M per kilometer. The increases in the contract cost of the four provincial road packages were lower, but still ranged from 27% to 102%. The reallocation of the loan in June 1981 increased the foreign funding share of the component from $13.7 X to $14.3 M. Despite this, the desired sharing ratio of 49% GOP: 51% LP was not achieved. At project completion the effective ratio was 61% COP and 39% loan proceeds. Table 1: COMPARISON OF ORIGINAL AND ACTUAL COSTS AND SCHEDULES, BY ROADS SECTION/PACKAGE Contract costs Construction schedule Original Actual (months) Road Section/Package ------- Pm ------ Original Actual Contract termination National Roads Contract 1 (26.927 km) and May 1978 - Nov. 1978; Force Account (24.373 km) 31.775 77.943 19.5 74.5 Jan. 1980 - June 1981 Contract II (57.8 km) 30.334 64.156 19.5 78.5 Jan. 1980 - June 1981 Contract III (37.8 km) 20.827 44.785 19.5 78.5 May 1978 - Nov. 1978; Jan. 1980 - Aug. 1981 Subtotal 82.396 186.884 Provincial Roads Contract I (45.3 km) 6.357 12.853 18 37 - Contract II (58.0 km) 7.163 13.418 18 77 July 1980 - July 1983 Contract III (41.63 km) 6.353 8.071 18 44 - Contract IV (54.12 km) 9.498 12.294 30 59 Jan. 1980 - June 1981 Force Account (47.30 km) 9.000 7.390 30 50 Subtotal 38.371 54.026 Total 120.767 240.910 - 53 - Implementation Problems. The delayed start of construction activities due to the Late awarding of contracts was compounded by the slow progress of contractors' performance. On its initial year, the slippages in contract works were already within the 35% to 0% range. Contractors were not only found to be ill- equipped but likewise financially unstaDle to carry out its field operations in full scale. Two national roads contracts were consequently terminated. With the drastic escalation of prices in 1979 and shortages in construction materials, five of the seven contracts were terminated. In three cases, the contractors themselves requested the termination as MPWH was not authorized to grant contract price increases above the price escalation clause in the contracts. Remaining works therefore went through a process of rebidding. It took more than one year before construction work by new contractors could be started. Maintenance. The national roads have been turned over by the MPWH- Project Management Office to the MPWH District Engineers Office for mainte- nance. Provincial roads have likewise been placed under the provincial government since their completion. Funds for the mpntenance budgets of the MPWH-Regional Office and the provincial government.- Equipment used by MPWH in the construction of force account projects in Occidental Mindoro have been turned over to the provincial government. This was intended to support its road maintenance activities. Project Effects. The most immediate effect of the improved national roads systems in Oriental Mindoro was the reduction in travel time between two points along the national highway. The Calapan to Roxas stretch can now be negotiated in two hours as compared to four hours before the project. The traffic volume along the national roads has also been noted to have improved so that in 1983, traffic in the three contract sections was above that during appraisal by 100 vehicles per day. Vehicle re stration in Oriental Mindoro reached more than 2,500 units in 1982 and 1983. The increase in vehicle ownership could have been encouraged by the roads projects which at that time were at the advanced stage of construction. The estimated average traffic volume for the provincial roads is 100 vehicles per day. No data is available on the pre-project situation. 6/ The standard allocation for maintenance is P 18,521.50/km per year for national roads and P 8,194.60/km per year for provincial roads. 7/ For 1980 and 1981, vehicles registered were 2,202 and 2,288 respectively. - 54 - 2. Calapan Port Outputs. ALL improvement works carried out in the Calapan port were in accordance with the proposed design except for some changes in the specifications of some structures and the relocation of the transit shed. At completion, the Calapan port had a reinforced concrete wharf of .2 x 104.5 meters; a rock bulkhead of about 133 meters; a total jerthing Length af 134 meters; a maximum draft of 27 ft: mooring and tieing faci.ities; a bacK-up area of about one hectare for open storage, roadway and parking; and a 12 x 48 meters transit shed with a storage capacity of 10,00 m.t. Cost. The original contract cost was P 2.52 million. A change order, two extra work orders and a negative change order increased contract cost to P 3.58 million which then exceeded by 10% the government estimate at the time of bidding. The total cost of completion amounted to P 3.84 million: 93% for civil works and 7% for supervision and design. This is 54% more than the appraisal estimate. The GOP contribution was P 2.50 million (65%) while P 1.3 million (35%) came from the loan proceeds. An equal sharing of the cost was envisioned during appraisal. Implementation Problems. The completion of the project was almost three years late. Its start-up alone was delayed by eight months due to lack of funds. During implementation, the contractor was granted ten extensions equivalent to a total of 816 calendar days due to bad weather, changes in specifications and shortages in construction materials.- The replacement and/or reconstruction of the structures covered under the change and extra work orders not only required more funds but set back the over.i work program of the project. When Change Order 1, for example, wa .ed, the concrete grout to be replaced was already 63.96%. The contractor had already completed the hauling and Laying of the specified rocks when it was discovered that additional filling materials would be required (Extra Work Order 1). Work would have been further delayed if the contractor completely ceased operations while MPWH approval on the changes was pending. The full completion of reclamation by the second quarter of 1'980 was impeded by a right-of-way problem on 490 sq. m. of titled and occupied land. In fact, this was still unresolved when the decision to delete the item and to terminate the contract was made in March 1981. It took two and a half years since November 1980 before a court order to compensate the owner and to demolish the existing make-shift was obtained. Operations and Maintenance. The Calapan port has been under operation by the Philippine Ports Authority (PPA) since 1977 when a PPA Office was established in Calapan. It falls within the port district of Batangas City. The PPA oversees the operations of the port including the collection of port charges, regulation of berthing of vessels, the coordination if - 55 - berthing and the establishment of cargo handling rates. Since its establish- ment, PPA Calapan has assumed the responsibility for the repair and mainte- nance of the port facilities. tunds for which are taken from the budget of the PPA-Batangas port district. Project Effects. The increased activity in the Calapan Port is evidenced by the annual growtn of more than 30% in its revenues for the years 1980-1982. During 1982. cash revenues reached P 0.46 M, derived mainly from cargo handling, berthing and wharfage fees (Table 2). With such a perfor- mance, it is anticipated :hat -he port could generate revenues more than sufficient to cover maintenance expenses. For the same period, cargo movements (inward and outward) were noted to have increased by an average of 29% annually. In 1982, total cargo through put was already 250% higher than the 1973 level (Table 2). The present levels of cargo, shipcalls and passenger traffic however are still below the projections during appraisal. The roll-on-roll-off (RORO) type of vessel was introduced in 1980 with the improvement of the port's berthing facilities. By 1983, there were two ROROs in operation. While allowing for higher cargo movement per trip, they reduced and the demand for arrastre services and storage facilities as cargo trucks can immediately roll on and off the vessel. Consequently, the transit shed and the open storage area are under utilized. The latter is often used as parking space for passenger buses and freight trucks. The favorable conditions in the Calapan pier reflects to a large extent easier transport of goods afforded by better roads. The Calapan port is now linked with most of the towns along the coast of Oriental Mindoro. This could have induced the export of major agricultural product such as rice, citrus, copra, banana and corn through the port. 3. Irrigation Outputs. The six irrigation projects identified during appraisal were carried out. The Tiguisan communal system (now called the Bansud RIS), however was upgraded/expanded so that it is now classifi as a national irrigation system with a service area of 1,378 hectares.- The Mamburao communal system was redesigned from a pumping to a gravity scheme which reduced its service area from 1,000 hectares to 303 hectares. The total area generated by the six systems is 13,609 hectares: 12,709 hectares under the national system and 900 hectares under the communal systems (Table 3). This is 9.3% lower than the original/appraisal coverage of 8/ The reclassification was done to ensure better operation and maintenance of the system through the National Irrigation Administration (NIA). Moreover, the cost of development increased considerably so that it would not be very difficult for the farmers' association to amortize the construction cost. Table 2: SUMMARY OF CALAPAN PORT ACTIVITIES: 1973, 1978-1982 BY SELECTED INDICATORS 1973 1978 1979 1980 1981 1982 Revenue (P) n.a. n.a. 235,689 306,396 473,312 640,226 Cargo throughput (mt) 72,106 155,473 76,084 160,675 194,072 253,399 Inward 46,169 77,453 39,674 63,644 82,020 118,576 outward 25,937 78,020 36,410 97,031 112,062 132,823 Passengers (no.) 793,143 765,278 424,764 625,117 554,290 602,519 Embarked 424,998 n.a. n.a. 300,377 261,435 n.a. U1 Disembarked 368,144 n.ea. n.e. 324,740 292,855 n.a. Shipcalls (no. of vessels) 2,502 3,167 1,826 2,750 2,657 2,481 Note: The drop in the figures for 1979 was caused by difficulties in berthing and cargo loading and unloading due to the construction of the port. Some portions of the port could not be used. It is thus excluded in the analyses. Table 3: COMPARISON OF APPRAISAL AND ACTUAL SERVICE AREA AND DEVELOPMENT COST, BY IRRIGATION SYSTEM Actual Development Service Area (ha) area irrigated cost (P m) Development Per At (ha) as of At cost per hectare Irrigation system appraisal completion Dec. 1983 Appraisal completion (9) National Irrigation Systems Baco-Bucayao 9,700 8,170 72.6 8,886 Pula 2,300 3,161 11.0 3,480 Bansud /a - 1,378 9.6 6,967 Subtotal 12,000 12,709 10,050 3.7 93.2 7,333 (Ave) Communal Irrigation Systems Tiguisan /a Mayabig ) 2,000 270 1.9 7,037 Calanundingan ) 327 0.8 2,446 Mamburao 1,000 303 10.7 35,313 Subtotal 3,000 900 622 2.5 13.4 14,889 (Ave) Total 15,000 13,609 6.2 106.6 7,833 /a The Tiguisan and Bansud systems refer to the same system. The Tiguisan was identified during Appraisal as a communal system but was reclassified during development as a natinal system. - 58 - 15,000 hectares: 12.000 hectares under the national system and 3,000 hectares under the communal systems. The exclusion of some areas was due to right-of-way problems (e.g., Mamburao), high cost of development, (e.g., Baco-Bucayao) and poor drainage conditions and structure of the soil. In 1983 or at project completion, the area actually irrigated ranged from 10,263 hectares during the wet season to 11,080 hectares during the dry season. The remaining rainfed areas within the service areas are programmed for irrigation within the next five years. As to the river gauging stations, NIA reported the establishment of 54 stream gauging stations, 14 hydro-meteorological stations and 25 rainfall stations. These accomplishments are more than double the appraisal targets. The establishment of such stations and studies have provided a sound basis for the planning of the other irrigation projects. Cost. Total cost of the project is P 171.189 M ($22.258 M). The contribution of the COP compose 57% of the total cost with the remaining 43% charged to the loan. Actual costs exceeded the appraisal estimate by 70%. The share of the COP in the total cost likewise increased by 10%. The distribution of the actual cost is as follows: 62.33% develop- ment cost, 3.72% fcr hydro-meceoroLogical studies, 11.28% for equipment, and 22.67% for engineering supervision and administration. The average develop- ment cost per hectare for national systems is P 7,336.00 while that for communal systems is P 14,956.00 (Table 3). These are 49% and 83% higher than the assumed development cost per hectare for national and communal systems, respectively, during appraisal. Implementation Problems. From 1975 to 1982, a total of 76 typhoons affected the island thus areas of operation were often rendered unworkable or inaccessible. Heavy damages were also caused on both completed and ongoing facilities. The Baco-Bucayao RIS Dam, for example was destroyed by a typhoon in 1977. The repair took more than three years and entailed a total cost of P 10.0 M. As with the roads projects, the performance of the six contractors was generally poor. Of the nine contracts, only one was completed satisfac- torily although it was also delayed. The three original contracts for the Baco-Bucayao River Irrigation System were terminated during the first two years of execution with the failure of the contractor to improve its perfor- mance. Other contracts were terminated due to financial difficulties of the contractor and some payment problems. In three cases, the contractors reported completion of contract works but post-contract inventories conducted by NIA revealed some deficiencies e.g. thickness of road surfacing and side slopes. The correction of such defects were undertaken by NIA as contractors immediately demobilized its equipment even before acceptance of contract works by NIA. Even in the termination of contracts, NIA, except for one contract, assumed the completion of all balances of work instead of rebidding these. - 59 - Construction activities were also slowed down by the shortages in construction supplies following the 1979 energy crisis. Unlike the road contracts, they resulted mainly to extension rather than termination. Right-of-way problems were encountered in some areas although these were ultimately resolved. It was a right-of-way problem which triggered the decision in August 1981 to abandon the pumping scheme for Mamburao in favor of a gravity system for a smaller area. There were also cases reported in the Baco-Bucayao area wherein farmers resisted the construction fo ditches in their farms. Some landowners in Pula were likewise reluctant to convert coconut and citrus land to ricefarms. In 1981, NIA was operating under reduced manpower and Limited funds. At this stage, it had taken over most of the contract works. Most of the major facilities however were already in place so the systems were partially operational. Nevertheless, the delay in minor works prolonged full completion of projects. Operations and Maintenance. The NIA Regional Office oversees the operation and maintenance of the three national systems. The O&M requirements for 1984 is provided for under the NIA Region IV Office budget. A BBRIS Irrigation Superintendent is now based in Calapan while that for the Pula- Bansud Irrigation System (PBIS) is situated at Pinamalayan, Oriental Mindoro. However, while the NIA looks after the major facilities of the system, Irrigators Associations (IA) maintain the farm level structures and see to the proper distribution of water from the turnout in areas where they are sufficiently well established to assume these functions. The IAs for the three systems have been organized and registered with the Securities and Exchange Commission but there are still 35 Farmers Irrigators Groups (FIGs) of the IA which are to be organized and 65 to be made functional. At present, a total of 336 FIGs have been formed in the three national systems (Table 4). Membership in the FIGs has however only covered 6,081 farmers out of 8,822 farmers expected to benefit from irrigation (national systems). Irrigation fees are now being collected by NIA to cover the cost of the operations and maintenance of the systems. The collection of fees by NIA was started in Baco-Bucayao and Pula in 1977 and in Bansud in 1982. During 1983, collection efficiency was 49% for Baco-Bucayao, and 70% for Pula-Bansud (Table 5). Based on projected O&M costs for 1984 to 1988 (1983 prices), collections in Baco-Bucayao have to be raised in 1984 to 65% to meet the break-even Level while that for Pula and Bansud has to be maintained at 59% at least. This means that NIA has to strengthen its collection strategies if full operation is to be achieved. The Mayabig and Calamundingan systems were operational before the end of 1981 with only minor works and repairs remaining. These were then turned over to their respective IAs last August 1982. The formal turnover of the Mamburao system only took place last July 1983. Table 4: STATUS OF FARMERS ORGANIZATION BY IRRIGATION SYSTEM Status of Organized FIG No. of FIGs Mbderately Non- Membership Irrigation system rotation areas organized Functional functional functional (no.) National Irrigation Systems Baco-Bucayao 234 216 54 127 35 3,650 Pula 91 87 61 16 10 1,982 Bansud 46 33 6 7 20 449 Subtotal 371 336 121 150 65 6081 Communal Irrigation Systems Calamundingan 8 8 5 2 1 201 o Mayabig 12 12 5 4 3 236 Hamburao 7 7 7 0 0 152 Subtotal 27 27 17 6 4 589 Total 398 363 138 156 69 6,670 - 61 - Table 5: ACTUAL AND PROJECTED COLLECTION OF IRRIGATION SERVICE FEE IN NATIONAL SYSTEMS: 1977-88 Actual Collection Amount collection target % efficiency Irrigation system Year collectible Amount % Amount % for break-even Baco-Bucayao 1977 816,291 603,648 74 1978 1,124,112 414,848 37 1979 1,170,562 358,213 31 1980 816,219 204,290 24 1981 2,062,967 345,636 17 1982 2,341,927 847,032 36 1983 2,341,927 1,139,215 49 1984 2,694,510 - - 2,155,608 80 65.7 1985 2,792,790 - - 2,290,087 82 66.5 1986 3,217,005 - - 2,766,624 81 59.3 1987 3,435,255 - - 3,024,024 88 58.4 1988 3,786,795 - - 3,408,115 90 55.7 Pula-Bansud 1977 527,663 472,424 90 1978 753,579 409,744 54 1979 418,332 215,811 52 1980 609,308 177,035 29 1981 531,604 197,946 37 1982 446,022 201,709 45 1983 592,535 412,993 70 1984 1,474,200 - - 1,179,360 80 59.9 1985 1,760,850 - - 1,443,897 82 55.4 1986 1,981.273 - - 1,703,895 86 50.6 1987 1,981,273 - - 1,743,520 88 53.2 1988 2,103,826 - - 1,893,443 90 52.7 - 62 - Since their turnover, the IAs have assumed their maintenance responsibility with NIA support and assistance. It is reported however that there are 27 FIGs in the three IAs (mainly in Calamundingan and Mamburao) which have remained non-functional (Table 4). Project Effects. No definite trend in production can yet be establ'shed within the irrigated portions of the service area although there are already indications that average yields in communal systems are improving. Disruptions in water delivery during construction. among 2:ner factors, may have caused the erratic trend. The 1976-1983 production data for national systems show chat the 1983 average yields per hectare of 2.6 tons (wet season) and 2.8 :3ns (dry season) only grew by 0.1 ton from the 1974 levels (Table 6). :n the communal systems, av;erage yields in 1983 were placed at 2.8 tons/hectare (wet season) and 3.1 tons/hectare (dry seasons). These are significant increases over average yields of 2.3 tons/hectare (wet season) and 2.0 tons/hectare (dry season) in 1974. On the basis of the above, it is very unlikely that incomes of rice farmers have significantly improved. With the adoption of new rice technology packages and the increasing cost of farm inputs, production costs per hectare have been going up. In both national and communal systems these have been noted to have increased by 50%-77% from the 1976 level. Instead o2 1985 as set in the appraisal, NIA projects that full agricultural development would occur in 1988 when the total service area of 13,609 hectares would be fully irrigated. The 1983 situation is then considered as a take-off point for a five-year developrent program which it has formulated with related line agencies. It is expected that the cropping intensity of 200% and the yields set during appraisal would still bc achieved. Production in 1988 in national systems is projected to reach 3.7 and 4.0 tons per hectare for wet and dry season respectively. In communal systems, 3.3 (wet season), 3.5 (dry season) tons per hectare are targetted. 4. Agricultural Support Services Outputs. The project established a seed testing laboratory in Naujan, Oriental Mindoro and another in San Jose, Occidental Mindoro. These were made operational during the second quarter of 1981 when the required laboratory equipment were received and installed. The structure for a Rodent Control Center was likewise constructed within the Murtha Demonstration Farm in San Jose in 1978 but this was not utilized as intended as it is claimed that the equipment procured were not suitable for field laboratory work. For the production of certified seeds, an association of seed growers was organized in each province. The BPI likewise maintains experi- mental stations within the seed testing Laboratory complex to produce both registered and certified seeds. The BPI and seed growers market the seeds directly to farmers. - 63 - Table 6: PADDY YIELDS FOR HECTARE DURING PROJECT IMPLEMENTATION AND AT FULL DEVELOPMENT (in tons per hectare) National irrigation system Communal irrigation system Irrigated Rainfed Irrigated Rainfed Wet Dry Wet Dry Wet Dry Wet Dry 1976 2.5 2.7 1.8 1.3 2.3 2.0 1.8 1.4 1977 2.2 2.3 1.8 1.3 2.1 2.3 1.8 1.4 1978 2.0 1.0 1.9 1.0 2.0 1.1 1.9 1.5 1979 1.8 2.1 1.9 1.3 1.6 2.1 1.9 1.5 1980 2.1 1.5 2.0 1.4 1.2 1.7 2.0 1.6 1981 2.6 2.0 2.0 1.6 2.9 2.3 2.0 1.6 1982 2.3 2.5 2.0 1.5 2.8 3.0 2.0 1.6 1983 2.6 2.8 2.0 1.7 2.8 3.1 2.0 1.6 1988 3.7 4.0 - - 3.3 3.5 - - Source: Farm Management Survey. - 64 - During the initial year of the seed production program (1978), production of regi tered and certified seeds in the whole island farm exceeded its requirements - (Table 7). For the next three years, registered seeds produced in the two provinces continued to be above the required levels. While this assured more than sufficient seeds to produce certified seeds, the production of the latter in each province remained below 5,000 cavans. As per the masterplan, the demand for certified seeds in 1979 would already be 8,064 cavans in Occidental Mindoro and 21,384 cavans in Oriental Mindoro. With the shortfalls in certified seed production, it was noted that for each year, only a small percentage of the registered and certified seed produced passed both field and laboratory standards of registration and Certification. It is theorized that the low results of laboratory analysis was due to the absence of laboratory equipment in the seed testing Labora- tories prior to 1981. Growers were thus forced to dispose their produce as commercial palay instead of going through the inconvenience and added costs of having seeds certified in Manila. For the rodent control program, Barangay Rat and Pest Patrols (BRAPPs) were organized (as per LOI 405), trained and provided assistance to carry out the proposed measures of control. Both the regulO,surviellance/ treatment and massive (physical) rodent control operations -' covered a physical area of 53,000 hectares. However, due to overlaps in the massive rat control operations and treatment in the more critical areas, the area effec- tively covered is placed at 89,000 hectares (Table 7). The targer set at appraisal is 90,000 hectares. The program dispensed with the rodenticides loan and the establish- ment of baiting stations which were identified in the masterplan as these were found difficult to administer. Moreover, the former was found to be suffici- ently provided for under the loan component of Masagana 99. Cost. The actual costs incurred by the two sub-components were P 4.011 M ($0.530 M) and P 5.348 M ($0.713 M) for seed production and rodent control, respectively. Seed production had a cost overrun of 7:% from the appraisal estimate while expenses for rodent control was much less than expected. On the overall, only 37% of the appraisal cost was expended. The lower cost of the agriculture program is mainly the result of reduced budget appropriations, the delay in the operationalization of the facilities which limited laboratory-related activities, the shift from the more expensive chemicals to physical means of control operations, and the deletion of the extended credit scheme which was allotted $0.625 M in the original plan. Inputs from the loan was thus reduced to 14% of the total cost 9/ Production of certified seeds in Oriental Mindoro was below its target but was offset by an oversupply of certified seeds in Occidental Mindoro. 10/ The massive control measures involved digging of burrows, blanketing and use of flame throwers. - 65 - Table 7: SUMMARY OF ANNUAL TARGETS AND ACHIEVEMENTS IN SEED PRODUCTION AND RODENT CONTROL, 1978-81 1978 1979 1980 1981 Or. Occ. Or. Occ. Or. 0cc. Or. Occ. Activity/indicator Mdo. Mdo. Mdo. Mdo. Mdo. Mdo. Mdo. Mdo. Seed Production Expected Produciton Registered (cav) 60 37 297 112 383 144 n.a. n.a. Certified (cav) 4,320 2,664 21,384 8,064 27,576 10,368 n.a. n.a. Actual Production Registered (cav) 2,888 2,297 1,379 1,942 899 939 3,381 n.a. Certified (cav) 3,888 9,799 1,325 781 12,655 7,449 9,673 9,118 Result of Laboratory Analysis /a Registered (cav) 626 803 449 10 87 n.a. 1,018 n.a. Certified (cav) 1,091 4,533 452 5 2,136 3,361 4,787 3,222 Rodent Control Expected coverage (ha) (cumulative) 8,575 8,810 42,750 26,850 55,187 34,813 n.a. n.a. Actual Coverage (ha) Regular surveillance and treament (cumulative) 8,737 5,154 20,770 11,506 24,795 18,078 28,422 24,550 Massive operations 471 3,578 6,373 2,809 1,039 n.a. 369 21,849 Rat Damage Appraisal (Z damage) 1.0 0.72 0.19 1.69 0.32 0.42 0.34 0.04 /a Laboratory analyses during 1978-80 were done in Manila as the project laboratories have not been set up. - 66 - (1.7% in seed production and 2.3% in rodent control) as against 45% in the appraisal report. Implementation Problems. Although it was programmed to officially start on January 1976, it was anly in mid-1978 that the final revised master- plans of the two projects were transmitted to IBRD for approval. The major issues of discussion durine the evolvement of the plan which consequently delayed its finalization were an: (a) the mechanics for the transfer of the seed distribution responsibi..ty ,rom 3PI and affiliated stations to purely commercial channels; and (b) ie cost recovery scheme for th rodenticides and the general operations o: :ne roden control program, i.e.. roles of rodent research laboratories, hired rat Dacrols and control technicians in the overall control strategy. .4hen zhese were finally established and accepted, these were later deleted from the program. The initial release to the component was received only in 1977 and it did not provide capital outlay funds so that the construction of the Laboratories was reprogrammed for 1978. Similar funding problems were encountered in 1978. In fact, only 10% of the 1978 proposed budget for rodent control was approved. Civil works for the laboratory buildings in San Jose. Occidental Mindoro and Barcenaga, Oriental Mindoro were consequently completed only in February 1979 and March 1979, respectively, over a year behind the masterplan timetable. The hiring of rodent control technicians (casuals) was largely on an on-and-off basis depending on releases. The procurement of laboratory equipment and supplies were likewise delayed as the funds for their purchase were only released in July 1979. The supplier who was awarded the contract in 1977 was already unwilling to provide the equipment at contract prices so that the project has to resort to rebidding the contract. The equipment was finally received during the second quarter of 1981. While the BPI was promoting the production of high-quality seeds from 1978-1981 it did not have sufficient facilities and equipment to undertake laboratory analysis and had to rely on BPI facilities in Manila. Operations and Maintenance. The seed testing Laboratories now form part of the BPI network of seed production and testing stations but it relies on the MA Provincial Office for extension services since the reorganization of MA in 1980. Foreign funding has been terminated since 1981 but the MA has maintained separate budget appropriation for these activities in the annual budget of the Bureau of Plant Industry although the allocation are lower. Project Effects. NIA and MIRDO surveys show low levels of use by farmers of certified seeds be it in terms of the number of farmers using them or of the ratio of its cost to the total cost of production. There is no available information however on the present demand for such quality seeds thus there is no basis for assessing the effectiveness of the BPI program. The marked increase in the output of laboratory analysis in 1981 for Oriental Mindoro over previous years (Table 7) is encouraging as it could indicate increasing demand. However, this still has to be supported by an improved trend in the succeeding years. - 67 - The effectiveness of rodent control in increasing production has been demonstrated. The rat damage appraisal conducted by the BPI semi- annually showed a decreasing trend in damages so that in 1982, only minimal damage (estimated percent loss of 0.08%) was experienced in the two provinces (Table 7). As with seed production and certification, this has to be continued to sustain its impact. 5. Watershed Protection Outputs. Through the surveys conducted by the BFD on water boundaries, areas under timber Licenses and pasture leases, and .orest occupants, the project was able to: (a) demarcate the boundary of the four watersheds which had a total are of 94,808 hectares (b) identify the denuded (32% of total area) and erodible areas within the watersheds; (c) cancel all timber licenses operating on about 18,025 hectares and some pasture leases on 2,262 hectares; (d) implement BFD's Land Occupancy Management Program (later changed into the Integrated Social Forestry Program) by granting forest occupancy permits for certain areas of the watersheds; (e) define 22 patrol sectors and deploy a forest guard to each sector for the regular surveillance of the sector against forest destruction and illegal encroachment. The reforestation program which was started in 1977 covered 4,588 hectares representing about 15% of the total denuded areas. Seedlings used were produced mainly in the nursery, greenhouses and potting sheds which were established in each watershed. Thirty kilometers of access roads were constructed to facilitate both surveillance and reforestation activities. A summary of project accomplishments is in Table 8. A major shortcoming of the project was the failure to have the four watersheds declared as forest reservations areas during the life of the project. It is reported that the surveys conducted were unable to generate all the data required to prepare the technical description and map of the areas which were to support the declaration proposals. The preparation of the required documents were also affected by reassignment of BFD personnel. This matter has yet to be pursued by the BFD to assure full protection to the watersheds. Included in the original plan was the establishment of trial plantations of 50 hectares for species selection in each watershed. These trials would provide information on the growth rates and establish costs for future watershed development. These however were discountinued as some species selected and planted were observed not to grow well on high eleva- tions. Moreover, it was realized that cost data could be gathered from existing reforestation projects in other parts of the Philippines. - 68 - Table 8: SUMMARY OF WATERSHED PROTECTION ACTIVITIES BY WATERSHED AREA WatersLeds Activity/indicator Pula Mag-asawang Tubig Baco Mamburao Total Total area 12,575 12,533 55,400 14,300 94,808 Area reforested (ha) 1,257.42 1,163.45 1,213.17 954.34 4,588.38 Percent of denuded area (Z) 35.0 22.7 10.8 9.4 15.2 Patrol sectors (no) 3 4 11 4 22 Forest guards (no) 3 4 11 4 22 Access Trails (km) 11.70 6.50 7.10 6.40 30.0 Nursey sites (ha) 2.0 2.1 2.2 1.7 8.0 Area under cancelled timber licenses (ha) - 2,275 15,750 - 18,025 Area under cancelled pasture leases /a (ha) - - n.a. n.a. 2,262 Censused forest occupants (families) 210 242 312 278 1,042 /a The area under cancelled pasture leases are out of 7,417 hectares covered by pasture leases in Baco-Bucayao (1,886 ha) and Mamburao (5,531 ha). - 69 - Towards the close of 1981, most of the facilities established in the three watersheds in Oriental Mindoro were destroyed by a typhoon. Seriously damaged nurseries, greenhouses, potting sheds. Laborer's quarters and some established plantations. Cost. As of the end of 1981, the cotal cost of watershed protection and rehabilitation was placed at P 9.972 M ($1.328 M) which is higher than the appraisal estimated by P 1.002 M ($0.028 M) or by 11%. While COP costs almost doubled, the loan portion of the cost decreased from the appraisal figure of P 4.485 M ($.65 M) to P 1.176 M ($153 1). Due to the slow utilization of the Loan proceeds, what was planned to be an almost equal sharing of costs during appraisal ultimately became 88% COP and 12% Loan proceeds. Implementation Problems. Activity Levels particularly the surveys and reforestation activities in the four watersheds depended on the annual fund releases. Almost throughout the project life, budgets were released Lace so that BFD has to constantly defer activities and contend with expired Cash Disbursement Ceilings (CDC). The situation was particularly bad from 1976 to 1979 when budget releases occurred on the middle or the latter part of the year. The boundary survey which was to be the basis for subsequent activities in the watersheds took four years to complete as it was constantly hampered by lack of funds, bad weather and personnel reassignments. The survey teams were also constrained by the lack of survey equipment such as altimeters, steel tapes and binoculars which were deleted from the equipment list proposed for BFD. Operations and Maintenance. Due to the damages brought by the typhoon in 1981, most of the BFD facilities in Oriental Mindoro were non- functional at the start of 1982. BFD Region IV lacked the funds to repair/ rehabilitate them. No budget was made available for maintenance of the four watersheds that year. In fact, no reforestation/nursery activities nor rehabilitation were undertaken in 1982 and 1983 due to lack of funds. BFD personnel were kept to the minimum, mainly the forest guards for surveillance and nursery caretakers. In 1984, a budget of P 1,534,000 was obtained. Although it would be insufficient to recover the losses in 1981, its inclusion in the PFD Region IV regular budget signifies regular funding in the coming years. The BFD expects to cover the whoLe denuded area with forest cover within the next 25 years. The program however is based on the assumption that no further denudation happens and that funds would be available to support the set level of activity. Project Effects. It has been reported that surveillance activities have somehow controlled forest destruction but it will require a longer time before its full effect, as well as that of reforestation, can be established. The suspension of most activities in the four watersheds for two years (1982 and 1983) will undoubtedly set back the results the project expects to achieve in the long term especially in reforestation which already was slow-paced during the project's life. - 70 - 6. Mangyan Assistance Outputs. The activities of PANAMIN until 1980 were concentrated in two service centers:- Kulasisi in Occidental Mindoro and Lantuyang in Oriental Mindoro. In 1980, a third area, the Dangkalan service center in Bulalacao, Oriental Mindoro was opened. Even after the termination of loan funding, in 1982, PANAMIN and MIRDO decided to pursue the development of the Anduyanan settlement in Paluan, Occidental Mindoro using local funds so as to conform with the appraisal target. However, Mangyan communities actually developed by PANAMIN deviated from those identified during appraisal except for Kulasisi. In each of the settlements, PANAMIN was able to establish a medical clinic with a full-time nurse, a water supply system; a plant nursery, communal farms for paddy, corn, vegetabLes and/or fruit trees, defined kaingin areas, and improved housing units. Except in Kulasisi, a school is now present in the service centers with a regular teacher from the Ministry of Education, Culture and Sports (MECs). Coat hoLding pens were also provided in the Dangkalan, KuLasisi and Lantuyang service centers. Attempts to organize marketing cooperatives were not very successful. The orablem of access to the settlements was eased with the improvement of the access roads although the Lantuyang and Kulasisi service centers are still inaccessible for the most part of the rainy season. The MPWH has yet to provide a bailey bridge over the Carayrayan River on the western side of the Lantuyang service center. The Kulasisi and Lantuyang service centers were not legally declared as Mangyan reservations as envisioned in the plan. The settlement areas however were freed of land conflicts. The Lantuyang settlement was confined to the portion of the proposed Mangyan reservation which were not titled to the Lowlanders; while in the Kulasisi, the project was able to secure back about 287 hectares for a pasture lease. The other two service areas had no land problems. For each province, medical missions were organized to visit the various Mangyan settlements in their respective provinces. A legal officer was likewise appointed for each province to handle both land-related and civil cases against the Mangyans. Cost. The cost of Mindoro Minorities Assistance Project (MMAP) at the end of 1981 reached P 4,101 M ($0.544 M). GOP costs increased by about 34% of the appraisal estimate as it absorbed some expenditures which could not be charged to the loan proceeds. The amount still excludes that spent by 11/ The service center concept was suggested in a study conducted by the Development Academy of the Philippines (DAP) in 1975. As service centers, these were to be the base of the PANAMIN field team and basic facilities which were to serve the core settlement and neighboring settlement/satelite areas. - 71 - PANAMIN on the fourth service center which is estimated at about P 50,000. The increased GOP costs however is offset by the low Loan drawdown (42% of the loan allotment) such that the total cost is still Lower than the appraisal cost by P 38,822 ($0.056 M). The original sharing ratio of 62% GOP and 38% loan proceeds uLti- ma-ely became 84% COP and 16Z loan proceeds. Implementation Problems. The execution of the MMAP was marked with periods of low activity due to funding and personnel problems. The most serious happened in the second semester of 1978 when PANAMIN lost most of its field staff. Until the end of 1980, PANAMIN activities were on a standstill. During .he period, medical services were discontinued except when medical missions could be provided by nearby hospitals and Rural Health Units. Agri- cultura'l. assistance was mainly through seed distribution. PANAMIN was in need of doctors, nurses, midwives and agriculturists but vacant positions could not be filled up due to low salary rates and poor working conditions. Proposals for better rates were not approved. It was only in 1981 when PANAMIN was reorganized that such a problem was resolved. Operations and Maintenance. The PANAMIN 's committed t, maintain what has been established and started under the project. Before 7he ciose of 1981, it therefore proposed for a Phase II for the maintenance if the service centers, the expansion of its services to better serve its satellites and the opening of two new service centers. Unfortunately this was not given funding support. But despite its financial difficulties, the PANAMIN has maintained its presence in the service centers and continues to make available to the Mangyans medical and Legal services although less regularly than when the MMAP had its budget as a foreign-assisted project. Project Effects. The MMAP has undoubtedly provided the Mangyans more opportunities for increasing their productivity and advancing their level of awareness. Due to better conditions in the settlements, the Mangyans were convinced to settle permanently. In-migration from neighboring areas was even encouraged as evidenced by significant increases in the number of families now living in the Lantuyang and Dangkalan service centers. Health conditions, literacy and incomes are claimed to have improved but data are not availabLe to indicate the extent of the change. 7. Schistosomiasis Control Outputs. The schistosomiasis control program for Victoria, Socorro, Pola and Naujan all in Oriental Mindoro adopted a four-pronged approach: health education, sanitation, diagnosis and treatment, and snail control. The first component consisted of an information campaign conducted with the assistance and cooperation of barangay and school officials. This included seminar/workshops, lectures and the production and distribution of information materials on various aspects of the disease. In the masterplan, an audio- visual mobile unit was to form part of the health education project but this was not realized. S - 72 - Under the sanitation project, about 4,083 water seal toilet bowls were reported to have been distributed, as of March 1983 to families in the four endemic towns. The target in the masterplan was 4,000 units. Its distribution among the four towns was based on the 1975 sanitation survey which indicated households which Lacked such facility. The toilet bowls and water pumps were given free to households. Deleted from the project was the construction of 38 footbridges identified in the masterplan. The diagnosis campaign is centered in the Schistosomiasis Control Laboratory established in Victoria. Total target of 81,000 persons was set by the SCRS for diagnosis. Total persons actually examined during the 1977-1983 period was only 48,627 persons. most of which were school-children. This included those covered in the prevalence surveys, non-regular activities of the Schistosomiasis Control Team (SCT), conducted in 1979 to 1981. The number of treEted cases (5,253 persons) surpassed the number of positive cases (4,709) as it included repeated treatments. Under snail control, there were ten areas proposed for drainage (agro-engineering) but only four areas were actually drained. Lack of funds, the excessive cost of drainage structures and the goods results from agro- engineering to chemotherapy. It was also decided that some of the drainage projects be integrated into the Mag-asawang Tubig project under the Philippine Medium Scale Irrigation Project (PMSIP). Cost. At the end of 1981, the actual cost of the component was placed at P 8.51. M (S1.13 M). This is less than half the appraisal cost estimate P 8.45 M ($2.46 M). While the GOP spent P 8.36 M ($1.114 M) or 98% of the original estimate, only 2.0% of the loan allocation ($1.2 M) was used up as the major infrastructure components of the plan were cancelled. Conse- quently, the total contribution of the Loan to the total cost of the component went down to 2.0% from the agreed level of 50% during appraisal. Implementation Problems. As in the agricultural component, the approval of the master plan for the schistosomiasis control took longer than expec--ed. The projects were therefore started only on the fourth quarter of 1977 instead of at the start of the year as programmed. Questions were raised by WB on some aspects of the plan as the desirability of using lined canals, on the practicability of draining Category II areas and on the scheduling of construciin. The decision on the proposed Phase II was particularly delayed.-- Other constraints experienced pertained to delays in the purchase of equipment, late release of funds and the non-availability of the required drugs which limited certain activities such as diagnosis and treatment. 12/ The vast marshlands located immediately bordering Naujan Lake. The construction of snail control and agro-development infrastructure in these areas was to compose Phase II of the plan. - 73 - Table 9: COMPARISON OF SNAIL DATA BEFORE AND AFTER THE PROJECT BY MUNICIPALITY, BY SNAIL COLONY Snail density per ring sample /a Snail infection rate /b Municipality/ Area Reduc- Reduc- name of Snail Colony (ha) 1977 1982 tion (%) 1977 1982 tion (2) Naujan 721.48 0.79 0.42 46.83 4.63 1.72 62.85 Balud Creek (Adrialuna) /c 1.20 0.203 0.15 26.10 0 0 - Balud Creek (San Pedro) 77 0.20 0.31 0 100.00 0 0 - Eleda Swamp /c 80.00 1.38 0 100.00 3.40 0 100.00 Balud Int. Forest 150.00 0.68 0.57 16.18 4.80 0 100.00 Casilihan Creek /c 60.00 0.59 0 100.00 3.00 0 100.00 Bathala Creek 50.08 0.87 0.53 39.08 4.40 4.30 2.27 Balanaig Depression /c 190.00 0.57 0.37 35.09 2.50 0 100.00 Cupang Swamp 30.00 0.39 0.28 28.20 9.09 6.60 27.39 Kabalitian Forest 60.00 0.39 0.10 74.36 11.10 0 100.00 Danlit Swamp & Harshland 50.00 1.00 0.45 55.00 7.60 2.70 64.47 Montelago A 30.00 1.40 1.30 7.14 4.30 2.90 32.56 Montelago B 20.00 1.74 1.27 27.01 5.40 4.20 22.22 Pola 279.97 1.04 0.96 7.69 2.78 3.07 (10.43) Calabasanhon Creek 2.20 1.43 1.04 27.27 1.70 2.50 (47.06) Macarabao Swamp & Marshland 190.30 0.38 2.62 (589.47) 1.20 1.61 (3.42) Hacalalad Swamp & Marshland 24.14 0.67 0.39 41.79 3.80 4.30 (13.15) Tagbakin Ricefield 55.00 1.90 0.73 61.58 5.10 3.30 35.29 Malibago Tributary /d 0.21 1.12 0.66 41.07 2.70 2.00 25.92 NaLU1o Creek /d 8.12 0.75 0.35 53.33 2.20 4.70 (113.36) Socorro 551.45 1.13 0.81 28.32 5.84 4.88 16.44 Bancap I /C 30.60 0.36 0 100.00 7.80 0 100.00 Bancap If T 150.00 0.14 0.45 (221.43) 3.10 0 100.00 Pulang Tubig Stream 150.84 1.33 0.54 59.40 1.50 2.40 (6.00) Ningning Stream 2.00 1.50 1.70 (14.00) 17.20 34.20 (98.83) Singolan Ricefield 26.48 1.29 1.01 21.70 5.60 4.50 19.64 Inclanay Tributary 120.92 0.56 0.63 (12.50) 2.60 3.92 (50.77) Menglit Creek 1.60 1.46 0.81 44.52 9.00 1.40 84.44 Ningning Seepage 20.00 1.60 1.32 (17.50) 4.40 5.80 (31.82) Cabrera Swamp /c 20.00 0.61 0 100.00 4.10 0 100.00 Luarca Creek /d 6.00 1.96 1.00 48.98 15.25 6.60 56.72 Lozano Depression /d 0.25 1.30 0.83 36.15 0 4.00 - Batong Dalig A /d 0.16 1.06 6.20 (484.90) 0.81 2.20 (171.60) Batong Dating Lakeshore /d 0.20 0.92 0.71 (22.83) 6.30 2.08 66.98 Lapog Lakeshore Id 20.00 1.60 1.73 (8.12) 2.00 3.80 (90.00) Mercado Ricefield /d 3.00 1.25 0.68 45.60 2.60 2.40 7.69 Victoria 1,302.60 1.10 0.69 37.27 3.76 3.22 14.36 Aling Nene Stream 0.48 1.15 0.83 27.82 0 0 - Lorenzo Ditch 0.08 1.56 0.73 53.20 0 4.54 - Dangongo Creek 20.80 1.15 0.89 22.61 3.20 1.70 46.87 Labong Creek /c 0.32 0.90 0.33 63.33 3.20 4.30 (34.37) Labahan Snail Colony 0.12 0.60 0.38 36.66 3.40 2.00 41.18 Malabo Forest 170.00 1.24 0.28 77.42 2.59 2.80 (8.11) Malayas-Malinao Estate 280.00 0.71 0.66 7.04 12.14 4.00 67.05 Javier Swamp 90.00 1.14 0.94 17.54 10.40 5.70 45.19 San Narciso Forest 300.00 1.02 0.71 30.39 3.92 4.20 (7.14) Macatoc Swamp 350.00 2.28 0.96 58.33 1.75 2.08 (18.86) Nono Creek /c 0.80 0.66 0 100.00 4.50 0 100.00 Borbocolon Tributary 90.00 0.76 0.90 (18.42) 0 4.40 - Total 2,855.50 1.02 0.70 31.37 4.55 3.35 26.37 /a Snail density per ring - total number of live snails collected over the number of ring samples taken. /b Snail infection race - total number of infected smails over the number of live snails collected x 100. /c Controlled areas (with drainage). /d Sewly discovered colonies during the project duration. - 74 - Operations and Maintenance. The Schistosomiasis Control Team will continue on with its mass examination. treatment and information campaign at levels that their budget can allow. Its immediate priblems are its lower budgets, lack of manpower particularly laboratory technicians and the non- regular supply of Biltricide and other materials for its laboratory activities. Project Effects. The information campaign has increased people's knowledge about the existence ;f the disease, its mode of transmissi.on, .ts prevention and control. The SCT however, feels that residents of the endemic areas still are reluctant to submit themselves to the SCT for diagnosis. How the safer waste disposal and water supply projects could have aided in the control of the incidence of the disease has not been explored. The results of the snail control activities were not consistent. On the overall, average snail density in all 45 endemic areas decreased from 1.02 per ring sample before the project to 0.7 per ring sample in 1982. The reduction of snail population density in some parts of Naujan and Socorro which were covered by drainage was very significant. In fact, of the 10 areas which were covered by drainage projects, total eradication was achieved in six locations. At the same time, eight new snail colonies developed in Socorro and Pola. In terms of snail infection, reductions in the infection rate were noted in 25 snail colonies. The disease was reported to have been wiped out in 9 areas, seven of which are Located within the drained areas. There were however 15 colonies where the infection rate was observed to have increased. The project failed in the its objective to totally eradicate the disease from the Lake Naujan area. Given the existing post-project situation, it seems unlikely that this could be achieved in the near future. B. Project Cost and Disbursement The original cost estimate of KIRDP was US$50 million of which US$25 million would be funded from an IBRD Loan and the remainding US$25 million by the Government of the Philippines (GOP). Tables 10 and 11 show a comparison between the appraisal estimates and actual project costs, both in US dollars and in Philippine pesos. On the overall, cost increased by P 161.9 M ($13.88 M) representing a cost overrun of 47% of the original cost. The cause of the overrun is traced primarily to the delay in project implementation and the concomitant costs associated with it. The extension of the project life by three and a half years entailed also the extension of overhead expenses (supervision and administration) and subjected the project to price increases at rates higher than what was provided for in the original estimates. The inflation rates in the late seventies as reflected in the escalations of the prices of construction materials, equipment, fuel and oil exceeded the allowance for inflation (7-10%) included in the estimates. - 75 - Table 10: MIRDP APPRAISAL AND ACTUAL COST BY COMPONENT (in thousand US dollars) Emplementing agency/ Appraisal cost estimates Actual project cost component GOP LP Total GOP LP Total NIA Irrigation and Drainage 7,135 7,440 14,575 12,568 9,690 22,258 MPUR Roads 13,400 13,700 27,100 22,503 14,518 37,021 BFD Watershed Protection 650 650 1,300 1,175 153 1,328 MPWR Calapan Port 180 180 360 339 182 521 BPI Agriculutral Support Services - Seed Production 190 150 340 521 9 530 - Rodent Control 1,815 1,485 3,300 546 167 713 MOB Schistosomiasis Control 1,240 1,220 2,460 1,114 20 1,134 PANAMIN Mangyan Assistance 370 230 600 456 88 544 Total 25,000 25,000 50,000 39,222 24,827 64,049 Note: 1. Actual GOP costs were computed *y applying the average exchange rate for each quarter to the quarterly disbursements of each agency. 2. Actual Loan Proceeds (LP) represent actual withdrawals at the exchange rate effective at the time of reimbursement. 3. Total figures of the appraisal estimates were rounded off to the nearest thousand. - 76 - Table 11: MIRDP APPRAISAL AND ACTUAL COST, BY COMPONENT (in thousand pesos) Implementing agency/ Appraisal cost estimates Actual project cost component GOP LP Total GOP LP Total NIA Irrigation and Drainage 49,231 51,336 100,567 97,974 73,215 171,189 MPWH Roads 92,400 94,530 186,990 182,992 117,164 300,156 BFD Watershed Protection 4,485 4,485 8,970 8,976 1,176 9,972 BPW Calapan Port 1,242 1,242 2,484 2,490 1,347 3,837 BPI Agriculutral Support Services - Seed Production 1,311 1,035 2,3461 3,948 63 4,011 - Rodent Control 12,524 10,247 22,771 4,112 1,236 5,348 MOR Schistosomiasis Control 8,556 8,418 16,974 8,361 157 8,518 PANAMIN Mangyau Assistance 2,553 1,587 4,140 3,430 671 4,101 Total 172,362 172,880 345,242 312,103 195,029 507,132 Note: Loan proceeds were converted to pesos using the exchange rate effective at the time of reimbursement. - 77 - Of the seven components, the agriculture, schistosomiasis control and Mangyan assistance programs reported of expenditures lower than the original costs estimates. In fact what was expended for agriculture consti- tuted only 34% of appraisal costs. Actual costs of the schistosomiasis control and Mangyan assistance were 46% and 91% of the 1974 estimates, respectively. On the other hand, the cost overrun for the infrastructure projects ranged from 60% (roads) to 70% (irrigation). The reasons for the deviations have been cited in the sectoral reports. At the end of the project, the effective ccst sharing racio was 61% GOP and 38% WB. Necessarily, cost sharing ratios for the other components changed. Although the roads and irrigation projects absorbed the unused allocations (as of December 1981) of the other projects, stilL, :he expected cost ratios for these components were not maintained. The actual costs shown in Tables 10 and 11 represent total disburse- ments by the COP and from the loan for the eight and a half years of MIRDP. The actual annual disbursement is provided in Table 12 which also shows the original disbursement schedule. As can be noted, actual disbursements are way below the disbursement levels estimated during appraisal such that at the end of the 1980, the original termination date for the loan, actual disbursement was only 86% the original cost or 59% of the revised cost. The trends indicated in Table 12 can best be explained through Tables 13 and 14 which show the pattern of GOP disbursements and Tables 15 and 16 which indicate annual loan availments. GOP disbursements were generally slow as budgets were bit adequately provided. While the various components were provided for in the annual General Appropriations Act, these were observed to be lower than the submitted requirements. Releases were often delayed and subjected to reserve impositions, averaging about 15% annually. As there was no mechanism by which shortfalls are recovered the following year, the extension of the implementation period seemed to be the only alternative. Actual loan availments (Table 15) at the end of each year was likewise considerably less than the appraisal estimates. At the end of 1981, only $18.6 M has been availed representing 75% of the loan. As per original schedule, the total loan should have been used up at this stage. As of December 1983, the actual accumulated disbursement from loan proceeds amounted to US$24,593,992.84, which is already 98% of the total loan. The application for $233,768 M has recently been approved and released by the World Bank. As can be noted in Table 16, only the NIDA and MPWH have consis- tently availed of the loan. Availments of the other agencies were irregular. Except for PANAMIN, no loan withdrawals were reported for BFD, BPW (port), MA and MOH during the first two years. Reasons given to explain such trends are the delays in implementation, late releases of funds for the loan proceeds and the inadequate knowledge of the agencies in the preparation of documents Table 12: PROJECTED AND ACTUAL DISBURSEMENT SCHEDULE BY COMPONENT, 1976-83 (in thousand pesos) Total project cost 1976 1977 1978 1979 1980 1981 1982 1983 Disbursement Schedule per Appraisal (P6.90 = $1) 345 242 41 558 87s816 105,522 99361 10 985 Irrigation and drainage 100,567 9,060 28,725 34,997 23,763 4,022 Rogis 186,990 25,716 46,002 54,310 60,962 Calapan port 2,484 904 1,580 Watershed protection 8,970 814 2,581 3,167 2,086 322 Agricultural support services A. Seed production 2,346 414 435 531 579 387 B. Rodent control 22,771 4,050 4,174 5,051 5,520 3,976 Schistosomiasis control 16,974 359 3,077 6,210 5,644 1,684 Mangyan assistance 4,140 241 1,242 1,256 807 594 Actual Disbursement Schedule (at exchange rate existing at the time of disbursement) 507,132 15,834 61,681 61,974 79,715 78 136 699146 80,153 60 493 Irrigation and drainage 171,189 8,999 20,693 16,0791 22,023 25,015 22,216 Roads 300,156 5,160 36,772 39,833 50,392 20,168 35,712 57,480 54,639 Calapan port 3,837 70 784 711 2,024 - 248 Watershed protection 9,972 516 1,544 1,564 1,478 2,490 2,105 275 Agricultural support services A. Seed production 4,011 75 156 385 1,035 565 1,795 B. Rodent control 5,348 71 190 1,178 1,308 1,336 1,265 Schistosomiasis control 8,518 - 1,104 1,033 1,166 3,259 1,956 Mangyan assistance 4,401 943 438 479 289 720 1,050 182 Table 131 CUP ACTUAL EXPENDITUES 81 MHPLUEMNTATION ACENCY, 1976-3 (In pesas) 1.mpl dödneteng ag19e7s 16 1917 1978 1979 1980 1981 1982 1983 'tal NIA irrlation and Drainage 6,479,415.47 10,258,155.89 9,437,526.26 9,551,853.23 23.961,359.66 14,787,540.17 17,644.263.46 5,853,987.37 97,974,132.21 HNNW Road¥ 4,022,065.42 32,113,106.28 22,050,656.34 21,613,900.24 7,834,631.23 29,496,528.75 30,640,435.71 35,220,628.37 182,992,152.34 'V0 Watdrähed Prutetilon 515,871.00 1,543,864.00 1,521,260.54 1,212,876.78 2,023,841.01 1,978,035.37 - - 8,795,748.70 SPW Catspen Purt 70,618.00 784,183.00 711,264.00 924,381.00 - - - - 2,490,444.00 'PI Agriculutral kpport scrvices - Sand Production 74.529.35 156,119.83 384,979.73 972,120.65 565,117.85 1,795,068.75 - - 3,947,936.16 - adent Cutrol 71,156.67 190,469.14 430,026.88 1,061,343.53 1,035,192.28 1,264,126.03 - - 4,112,314.53 1 0 Sehistuduntatsi Control - 1,104,000.00 1,033,047.20 k,166,237.40 3,169,162.30 1,889,048.76 - - 8,361,495.66 PANAMIN Hangyan Assitanc 813,047.46 437,924.89 411,638.93 288,709.08 428,479.05 1,050,087.49 - - 3,429,886.90 Tutal 12.046,703.37 46.588,053.03 35.980,399.88 36.791.421.91 39.077,783.38 52.260.436.02 48.284.699.17 41.074.615.74 312.104,112.50 Table 14a COP ACTUAL EXPRUDITURBS BY IKPLBHENTING AG9NCY, 1976-83 (in US dollars) lImpldmdntind igncLms 1976 1977 1978 1979 1980 1981 1982 1953 Total Irrigation and Drainage 876,781.52 1,391,884.10 1,285,766.52 1,30,342.40 3.199,113.43 1,888,574.82 2,078,240.69 546.590.39 13,568,294.27 Roads 544,251.84 4.357.300.72 3,004.176.61 2,944,663.06 1,046,012.18 3,767,117.34 3,609,356.39 3.229,949.40 22,S02,843.34 br0 stersh"d Prutection 69,606.63 209,479.51 207,256.20 165,242.07 270,205.74 252,622.65 - 1,174,612.80 Calapan Purt 9,555.89 106,402.04 96,902.45 125,937.47 - - - - 33,797.5 Asriculuteal Support I Servies - Seed Production 10,085.16 21,183.15 52,449.55 132,441.51 75,449.63 229,255.27 - - 520,864.29 - Andant Control 9,628.78 25,843.85 58,586.77 144,597.21 146,220.60 161,446.49 - - 546.323.70 2 I Schistoumiasis Control 1 149,796.47 140,742.13 15,887.93 423,119.13 241,257.82 - - 1,113,803.48 PANANIN langyan Assistance 110,019.95 59,419.93 56,081.60 39,333.66 57,206.62 134,110.79 - - 436,172.73 Tutal 1,630,135.77 6,321,309.17 4,901,961.83 5,012,455.31 56217,327.55 6,674,385.18 5,687,597.08 3,7764539.79 39,221,712.68 - 81 - Table 15: PROJECTED AND ACTUAL CUMULATIVE LOAN DISBURSEMENT, 1976-83 (in US dollars) Appraisal estimate IBRD Fiscal Year of cumulative Actual and semester loan disbursement cumulative disbursement FY76 2nd Semester 200,000 232,606.15 FY77 1st Semester 1,200,000 842,776.95 2nd Semester 4,200,000 2,126,903.97 FY78 1st Semester 7,700,000 3,970,957.46 2nd Semester 11,400,000 5,661,246.55 FY79 1st Semester 15,400,000 7,925,135.26 2nd Semester 18,400,000 11,314,754.47 FY80 1st Semester 20,900,000 13,871,234.43 2nd Semester 22,800,000 15,748,884.21 FY81 1st Semester 24,100,000 17,884,325.18 2nd Semester 25,000,000 18,638,693.46 FY82 1st Semester 20,078,008.12 2nd Semester 23,021,711.03 FY83 1st Semester 23,986,1V.94 2nd Semester 24,827,760.51 Note: The disbursement for 1983 includes the $233,768 released in 1984 for the roads component. Table 16: ACTUAL LOAN AVAILMEMTS BY IMPLLMENTING AGENCY, 1976-83 (US$) Implementing agancias 1976 1977 1978 1979 1980 1981 1982 1983 Total NIA - Irrigation and Drainage 61,041.70 1,261,541.90 998,646.31 1,511,936.17 2,634,990.43 2,033,084.01 1,149,807.52 39,312.09 9,690,360.13 HPWH - Roade 153,953.71 632,755.92 2,418,750.04 3,913,489.75 1,653,568.07 799,634.60 3,179,051.52 1,766,737.48 14,517,941.09 FD - Wtershed Protection - - 5,836.28 36,081.94 62,120.29 16,283.15 32,676.05 - 152,997.71 BPW - Calapan Port - - - 149,820.31 - 32,168.02 - * 181,988.33 I Ci PI - Agricultural Support Services Saud Production - - - 8,608.26 - - - - 8,608.26 Rudent Control - - 101,963.21 33,571.59 31,963.48 - - - 167,498.28 HUN-BPW - Schistosomasis Control - - - - 11,919.90 8,639.47 - - 20,559.37 PANAMIN - Itngyan Assistance 17,610.74 - 9,146.74 - 39,567.47 - 21,482.48 - 87,807.43 Total 232,606.15 1,694,297.82 3,534,342.58 5,653,508.02 4,434,129.64 2,889,809.25 4,383,017.57 1,806,049.57 24,827,760.60 Note Loan avilmnts of the roads component for 1983 includes $233,768 released in 1984. - 83 - relevant to the application for reimbursement. Due to delays in loan avail- merits, the Philippine Government paid a total of $896,132 in commitment charges for the 1975-1983 period. III. MANAGEMENT, COORDINATION AND SUPERVISION A. Implementation Management and Coordination Section I or Presidential Decree No. 805 issued on October 2, 1975 laid down the basis guidelines in the implementation of the MIRDP: the inte- gration of national and iocaL government agencies into a working team for planning and implementation, and the decentralization of the planning and implementation of projects to the local government level. It Likewise formally created the Mindoro Integrated Rural Development Office (MIRDO) and a multi-level committee structure to coordinate project implementatiou. As suggested in the Appraisal Report, the MIRDP was placed under the coordination umbrella of the Cabinet Coordinating Committee for Integrated Rural Develop- ment Project with the Minister of Natural Resources as Cabinet Coordinator. The present management and coordination structure of MIRDP is shown in the chart. Basic features of the management scheme are the multi-level management structure designed to facilitate coordination of inter-agency activities at both the operations, management and policy levels and the involvement of the Provincial Governors at each level of the structure (MIRDP Executive Committee, Project Advisory Committee and the Provincial Project Office) as a strategy for local government participation. Except for the replacement of the Project Steering Committee by the Project Advisory Com- mittee (by virtue of PD 805, October 19751, the CCC-IRDP by NACIAD (by virtue of PD 1378, May 1978) and the MNR Minister by the MA Minister as Cabinet Coordinator (NACIAD meeting, January 1982), the structure has been maintained since the project's start in 1975. Central to the MIRDP coordination st.ucture are MIRDO and the Project Advisory Committee (PAC). While there existed the MIRDP Executive Committee, the ADCC and the PDC as provided for in PD 805, these were not con- sistently active thus much of the coordination functions were left to the ini- tiative of MIRDO and the PAC. On the MIRDO was vested the task of planning, progress reporting and evaluation, budget consolidation and review, financial monitoring and report- ing, and the conduct of studies on future projects. These were pursued actively by MIRDO through its three staff departments and provincial offices. Planning activities however focused on the identification of future projects as the planning and the programming of the specific project components were delegated to the line agencies. The monitoring and evaluation system on the other hand consisted mainly of progress reporting, specifically on physical and financial progress. Although data was being generated by the line agencies and MIRDO on related development in the project area (e.g., agro- economic) and on immediate project effects, the analysis and value of such information were not duly recognized and utilized. It was on the monitoring of loan availments where MIRDO was particularly strong as the system adopted for MIRDP allowed MIRDO to act as the communication link between the line agencies and th3 World Bank. - 84 - MIRDP ORGANIZATIONAL STRUCTURE EXECUTIE COM MtTTEE OFFICE OF THE CHAIRMANI PROJECT ADVISORY MINDORO INITEBRATED RURAL DEVELOPMENT OFFICE COMMITTEE OFFICE OF THE PROJECT DIRECTOR PUBLIC RELATION AND PROMOTIONS SECTION PLAINS 85 PROGRAMMING1 CENTRAL COORDINATING FINANCE 1% ADMINISTRATIVE DEPARTMENT DEPARTMENT DEPARTMENT PLANS AND EVALUATiON SYTMa PRoGRAM- FNMC ADMINISRMtVE DIVISION F;uMNG DiIONIVSION DIVISION PROVINCIAL DEVELOPMENT __ _PROVINCIAL PROJECT OFFICE COUNCIL OFFICE OF THE PROV'L. PROJ. MANAGER PLANS & PRO4ECT FINANCE a ADMINISTRATIVE DEVELOPMENT SECTION SECTiON GRIC.TURAIL DEV*T. ATER ROADS A SCHISTO - MANGYAN COORDINATING - AGRICULTURAL CONTROL PORTS 50MIASIS ASSISTANCE COUNCIL PROJECT PROJECT PROJECT PROJECT - 85 - The PAC served as the essential link among the implementing agencies and the provincial government With the project. It was intended to bring together the provincial governors and those who have direct responsibility for impending the various projects for a regular exchange of information and to expedite decisions on identified iroolems. The meetings of the PAC were held monthly wherein each member from zhe line agencies reported on developments, status of their respective projects. The PAC, however, has been criticized for the common practice of some members to send representatives who io not possess enougn auLnority to make a decision. Moreover, the meetings Jd not seem to generate a thorough discussion of issues and problems as agency presentation focused on physical achievements. There can be no Joubt. however, that the PAC has been vital in facilitating project actions during the inIraL years of MIRDP. Its orientation seemed to have changed as th2 project reached its maturity thus the shift to a more passive role. Throughout its life, the MIRDP was beset by a wide range of tech- nical, administrative, i.-titutional and management problems. Some of these were attributed to certain bureaucratic procedures and the inexperience of some agencies in handling foreign-assisted projects, much more a multi- sectoral/integrated one. While most were resolved through consultations and follow-ups, others persisted bringing to Light some issues and problems which seemed to be inherent in the project concept and structure. (1) MIRDO's lack of fiscal and administrative control over field opera- tions. The implementation strategy for MIRDP delegates to paLcici- pating line agencies the responsibility for project execution. With this mode of operation, project funds are released directly to the implementing agencies following the regular channels of funds flow within the ministry thus can be subjected to delay in the processing of documents, budgetary cuts and reprioritizacion. Line agencies are covered by the administrative policies (e.g. recruitment levels of authorities) of their respective central agencies and thus have to operate within their system. When field offices have limited authority, decisions and approvals become too centralized and time consuming. Direct intervention of MIRDO at times become difficult and often could only be confined to follow-up. (2) Continuity of MIRDP functions. The MIRDO was established for the project and was to be co-terminus to the project. The temporariness of its existence created some problems which became more evident at the latter stage of the project. Foremost was on the continuity of functions being undertaken by MIRDO. It is apparent that the exper- ience gained by MIRDO in terms of coordination, planning and monit- oring would be lost to the province as no provision is made as to their institutionalization into existing organizations in the province. The phase - out of MIRDP would necessarily phase - out whatever structure were established for the project. The limited life of the office likewise could not provide security of tenure to MIRDO staff as evidenced by the increasing staff turnover rate through the years. - 86 - (3) Role of the local government. The MIRDP structure suggests a direct involvement of the provincial governors in policy setting (as members of the MIRDP ExCom and the PAC), and in the management and coordination of the project at the provincial level as they likewise act as the Project Managers of the project offices and are the Chairman of the Provincial Development Councils. However, it seems that the dual role and responsibilities of the governor were not effectively carried out. While the governors were active in the policy making committees, they tended to be Less invoived in provin- cial level operations. This can be due to the fact that such roles were not fully under- stood so that local leaders do not perceive themselves as part of MIRDO management. Moreover, decision-making within line agencies tended to be cen- tralized so that coordination was deemed to be more effective at higher levels of the structure. Even reporting to MILDC central office followed the minis- tries' regular channels of communication so that monitoring activities of the provincial offices were kept to the minimum. The governor's position as Project Managers however gained MIRDP the support of lower Levels of Local government. B. World Bank Supervision The monitoring of MIRDP by World Bank was mainly through a system of reporting by the line agencies and the supervisory mission of WB. Reporting on project progress was on a quarterly basis except for the major infrastruc- ture projects for which monthly reports were submitted. WB missions were dis- patched to the country at least once a year to get first-hand information on the prcgress of projects and discuss with the concerned line agencies their observations and recommendations. Throughout the life of MIRDP (1975-1983), 22 missions came to review the project as a whole or look at specific components. The supervisory missions were effective in ensuring that sound engi- neering and construction standards were followed. The visits prompted project management and implementors to likewise review their operations and work- programs and take immediate action on acceptable recommendations of the mission. It was noted however that in certain instances, the official mission reports were delayed by as much as two months. At the time of the receipt of the report, much work was already done on facilities under question. More- over, the missions concentrated on the roads, irrigation and port projects. Visits to these projects were made at least annually, while those of the other components were less regular. Least covered by the missions were forest development and Mangyan assistance. On the overall, the WB was responsive to implementation problems reported to the Bank for action, e.g.. readjustment of loan allocation, cnanges in the schistosomiasis and rodent control schemes, termination of contracts, increasing force account limits in irrigation projects, changes in the equipment lists, extension of the loan, etc. The delays in the approval of the masterplans for schistosomiasis. Mangyan assistance and agriculture due - 87 - to reservations expressed by the WB on some suggested schemes would have been overcome if these projects were given adequate lead time to develop their respective detailed plans prior to the official start of the MIRDP. Certain stipulations in the loan agreement however which were not as flexible such as the reimbursement scheme, hiring of expatriate consultants and procurement through international competitive bidding. It is believed that such provisions/conditions contributed to the further delays and the financial difficulties during implementation. IV. ECONOMIC RE-EVALUATION The economic analysis undertaken focused on three complementary com- ponents of MIRDP: roads, irrigation and the agricultural program. For comparison purposes, the approach adopted attempted to follow closely that used during appraisal. Certain conditions at project completion, however, necessitated the modification of some assumptions. Moreover, separate economic rates of return for national and communal irrigation systems were determined. These were not computed during appraisal. It should be noted that in ('xe economic analyses: (a) All cost figures are based on actual disbursements shown in Tables 10-16. Estimates however were used in the distribution of actual costs between national and provincial roads and in the allo- cation of the cost of the agricultural services program among the national irrigation, communal irrigation and rainfed areas. (b) The economic values were computed using shadow exchange rates derived from the formula: SER = OER x (1 + FX premium) where SER = shadow exchange rate OER = official exchange rate Fxpremium = forex premium assumed at 20% (c) All values are at 1983 prices. All cost figures were thus converted using domestic (for local costs) and international (for loan proceeds) p ice indices with 1983 as base year. 1. National Roads Costs. Costs cover all three national road sectio..s including the Baco-Calapan road which was considered in the appraisal as access road to the Mayabig and Baco-Bucayao irrigation projects. Traffic. The average traffic volumes in the three contract sections ranged from 350 vpd (Contract 3) to 1007 vpd (Contract 1). Traffic is expected to build up with;n the next 15 years (1984-1999) at varying rates per - 88 - year to reach 2979 vpd for Contract 1, 1489 vpd for Contract 2 and 877 vpd for Contract 3 (Table 17). The traffic figures are generally lower than ti - fore- cast made during appraisal. Benefits. Major components are the savings on vehicle operating costs and savings in road maintenance costs. Savings ii passenger travel time was not quantified and therefore is excluded in the analysis. The residual value of equipment purchased is excluded in the analysis but even its inclusion is not expected to substantially affect the outcome. Rate of Return. Discounting project benefits and costs over a 27-year evaluation period, the economic rate of retu is estimated to be 17.7%. Reducing the evaluation period to 23 years L' lowered the rate of return to 16.53%. During appraisal, the rate of return without time savings was 14%. From Table 18, it is apparent that the cost overrun was offset by the considerably high savings in vehicle operating costs. 2. Irrigation Cost. The cost figures in previous tables were used. Costs common to both types of systems, e.g. administrative costs were prorated according to area coverage. The operations and maintenance (O&M) costs considered in the economic analysis is the difference between the with and without project conditions. For communal systems, these were derived from the computed rate per hectare in thi national systems. Benefits. The direct economic benefits attributed to the project is the difference between the net values of production with and without the project. This was determined based on actual agricultural production during project implementation and the expected yields thereafter (Table 6); estimated farm production costs (Tables 19 to 22); and the estimated farmgate prices for rice (Table 23) and fertilizer. Compared with appraisal projects, the new estimates show lower requirements for labor inputs (Tables 19 and 20) at full development but higher outlays for seeds, fertilizers and pesticides (Tables 21 and 22). A higher farmgate price is also used: P 2,234 per ton as against P 1,015 per ton computed during appraisal (Table 23). Due to higher prices, gross value of per hectare production (with project) in both national and communal systems are higher than the estimate prepared in 1974. While the net return to project area in national systems are higher, the reverse is true for communal systems as its total area cover- age was reduced during implementation from 3,000 hectares to 900 hectares (Tables 24 to 27). 13/ Or a 16-year period after completion as used in the appraisal. - 89 - Table 17: PROJECTED TRAFFIC VOLUME BY ROAD/CONTRACT SECTION: 1984-2003 (Vehicles per day) Year Contract 1 Contract 2 Contract 3 1984 1,056 584 363 1985 1,108 609 377 1986 1,162 634 391 1987 1,213 658 405 1988 1,267 684 418 1989 1,324 710 433 1990 1,383 737 447 1991 1,444 765 462 1992 1,583 832 502 1993 1,736 906 544 1994 1,903 986 590 1995 2,087 1,073 640 1996 2,289 1,168 695 1997 2,499 1,267 751 1998 2,728 1,373 811 1999 2,979 1,489 877 2000 3,254 1,615 948 2001 3,553 1,752 - 2002 3,903 1,911 2003 4,288 2,084 Note: Contract 1 includes the portion undertaken by force account. - 90 - Table 18: COST-BENEFIT FLOW AND ECONOMIC INTERNAL RATE OF RETURN: NATIONAL ROADS (P'000) Benefits Net Present Present Investment Savings in vehicle Savings in road benefit worth worth Year cost operating costs maintenance costs flow at 15% at 20% 1977 43,44.3 - - (43,562.2) (37,792.2) (36,189.1) 1978 45,653.2 - - (45,746.0) (34,513.8) (31,683.3) 1979 47,926.3 - - (20.989.4) (31,535.5) (27,749.3) 1980 18,095.2 - - (9,911.3) (10,350.4) (8,721.9) 1981 31,125.4 - - (48,512.7) (15,469.3) (12,512.4) 1982 47,293.7 - - (28,981.1) (20,430.9) (15,843.3) 1983 50,415.7 - - (19,937.2) (18,956.3) (14.066.0) 1984 - 64,245.0 481.0 64,726.0 21,165.4 15,081.2 1985 - 67,104.2 481.0 67,585.2 19,194.2 13,111.5 1986 - 70,091.4 481.0 70,572.4 17,431.4 11,432.7 1987 - 72,930.8 481.0 73,411.8 15,783.5 9,910.6 1988 - 75,886.3 -6,747.8 69,138.5 12,928.9 7,743.5 1989 - 78,962.9 481.0 79,443.9 12,949.4 7,388.3 1990 - 82,165.5 481.0 82,646.5 11,653.2 6,446.4 1991 - 85,499.4 481.0 85,980.4 10,575.6 5,588.7 1992 - 93,166.1 481.0 93,647.1 10,020.2 5,056.9 1993 - 101,528.4 -6,747.8 94,780.6 8,814.6 4,265.1 1994 - 110,650.2 481.0 11,131.2 9,001.6 4,233.0 1995 - 120,601.4 481.0 121,082.4 8,475.8 3,753.6 1996 - 131,458.1 481.0 131,939.1 8,048.3 3,430.4 1997 - 142,688.3 481.0 143,169.3 7,588.0 3,149.7 1998 - 154,889.8 -6,747.8 148,142.0 6,814.5 2,666.6 1999 - 168,148.0 481.0 168,629.0 6,745.2 2,529.4 2000 - 182,555.9 481.0 183,036.9 6,406.3 2,379.5 2001 - 174,124.5 357.5 174,482.0 5,234.5 1,744.8 2002 - 190,239.9 357.5 190,569.6 4,955.5 1,715.4 2003 - 207,864.5 -5,014.9 202,849.6 4,665.5 1,419.9 Net present worth 39,403.2 (33,728.1) EIRR - 17.7% Note: Benefits for the Bongabong-Roxas Section were computed up to the year 2000 only. Table 19: RICE PRODUCTION INPUTS PER HECTARE IN NATIONAL IRRIGATION SYSTEMS, PRESENT AND FUTURE CONDITIONS WITH AND WITHOUT PROJECT, BY SEASON Present Future without project Future with Wet Dry Wet Dry project Farm inputs Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Wet Dry Material Seeds (kg) 130 130 130 130 130 130 130 130 130 130 Fertilizer (kg) Urea 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.5 1.5 Amosul 0.5 - 1.0 - 0.5 - 1.0 - 0.8 1.5 Ammophos (complete) 1.5 - 1.5 - 1.5 - 1.5 - 2.3 2.3 Pesticides - - - - - - - - - - 1 Labor Inputs (man-days) Land preparation 20 16 20 16 20 16 20 16 20 20 Transplanting 25 23 25 23 25 23 25 23 25 25 Crop management 14 26 14 26 14 26 14 26 20 20 Harvesting and threshing 17 12 20 12 17 12 20 14 20 22 Drying 3 1 4 1 3 1 4 2 4 5 Note: The amount of pesticides is given in cash in Table 21. Table 20: RICE PRODUCTION INPUTS PER HECTARE IN COMMUNAL IRRIGATION SYSTEMS, PRESENT AND FUTURE CONDITIONS WITH AND WITHOUT PROJECT, BY SEASON Present Future without project Future with Wet Dry Wet Dry project Farm inputs Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Wet Dry Material Seeds (kg) 130 130 130 130 130 130 130 130 100 100 Fertilizer (kg) Urea 1 1 1 1 1 1 1 1 1 1 Ammosul 0.5 - 0.5 - 0.5 - 1 - 1 1 Ammophos (complete) 10 - 1 - 1 - 1 - 2 2 Pesticides - - - - - - - - - - Labor Inputs (man-days) Land preparation 20 16 20 16 20 16 20 16 20 20 Transplanting 17 22 25 23 22 22 22 22 22 22 Crop management 16 12 14 20 15 18 15 18 18 18 Harvesting and threshing 15 16 16 12 16 16 16 16 16 16 Drying 3 2 3 2 3 2 3 32 4 4 Note: The amount of pesticides is given in cash in Table 22. Table 21: VALUES OF FARM INPUTS PER HECTARE IN NATIONAL IRRIGATION SYSTEMS9 PRESENT AND FUTURE CONDITION WITH AND WITHOUT PROJECT, BY SEASON (Pesos) Present Future without project Future with Wet Dry wet Dry project Farm inputs Irrig. Rainted Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Wet Dry Material Seeds 275 275 275 275 75 275 275 275 220 220 Fertilizer Urea 208 208 208 208 208 208 208 208 312 312 Ammosul 66 - 131 - 66 - 131 - 105 197 Ammophos (complete) 278 - 278 - 278 - 278 - 426 426 Pesticides 120 90 100 102 180 110 200 120 270 300 Labor Inputs Land preparation 210 168 210 168 210 168 210 168 210 210 Transplanting 263 242 263 242 263 242 263 242 263 263 Crop management 147 273 147 272 147 273 147 273 210 210 Harvesting and threshing 179 126 210 126 179 126 210 147 210 231 Drying 32 11 42 11 32 11 42 21 42 53 Total 1,778 1,393 19864 1,405 11838 19413 19964 1j4 2,268 29422 Note: Labor inputs were valued using a shadow wage rate of P 10.50/man-day. Table 22: VALUES OF FARM INPUTS PER HECTARE IN COMMUNAL IRRIGATION SYSTEMS, PRESENT AND FUTURE CONDITION WITH AND WITHOUT PROJECT, BY SEASON (Pesos) Present Future without project Future with Wet Dry Wet Dry project Farm inputs Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Irrig. Rainfed Wet Dry Material Seeds 275 275 275 275 275 275 275 275 220 220 Fertilizer Urea 209 209 209 209 209 209 209 209 209 209 Ammosul 66 - 66 - 66 - 131 - 131 131 Ammophos (complete) 186 - 186 - 186 - 186 - 372 372 Pesticides 92 57 144 102 100 65 158 112 270 300 1 %0 Labor Inputs I Land preparation 210 168 210 168 210 168 210 168 210 210 Transplanting 179 231 263 242 231 231 231 231 231 231 Crop management 168 126 147 210 158 189 158 189 189 189 Harvesting and threshing 158 168 168 126 168 168 168 168 168 168 Drying 32 21 32 21 32 21 31 21 42 42 Total 1,575 1,255 1,700 1,353 1,635 1,326 1,757 1s373 2,042 2s072 Note: Labor inputs were valued using a shadow wage rate of P 10.50/man-day. - 95 - Table 23: RICE PRICE STRUCTURE, PER PROVINCE, 1983 (Per ton) Particulars Oriental Mindoro Occidental Mindoro Export price, Thai rice 5% broken FOB Bangkok US$279 US$279 Less: Quality discount applicable to Philippine rice (25%) 74 76 Equals: Export price milled rice, FOB Manila 223 223 Less: Port eharges, wharfage and transport cost to project area 10 12 Equals: thill price, project area 213 221 Equivalent price for paddy at 64% milling recovery 136 135 Less: Transport cost from farm to ill 3 4 Equals: Economic faragate price of paddy US$133 US$131 Peso equivalent at P 16.80/US$1 P 2,334 P 2,201 Note: The export price of Thai rice is based on the IBRD forecast for 1983 expressed in 1981 constant prices. Table 24: GROSS AND NET VALUE OF PRODUCTION IN NATIONAL IRRIGATION SYSTEMS, PRESENT CONDITION (1983) WITH AND WITHOUT PROJECT (At 1983 prices) Farmgate Gross value Production Net value Net return to Area Yield Production price of production cost of production project area (ha) (tons/ha) ('000 tons) (P/ton) (P/ha) (P/ha) (P/ha) (P million) With Project Wet Season Irrigated 10,400 2.6 27.04 2,234 5,808 1,778 4,030 41.91 Rainfed 2,300 2.0 4.60 2,234 4,468 1,393 3,075 7.07 Dry Season Irrigated 9,700 2.8 27.16 2,234 6,255 1,864 4,391 42.59 Rainfed 3,000 1.7 5.70 2,234 3,798 1,405 2,093 6.28 Total 25,400 - 63.90 - - - - 97o85 Without Project Wet Season Irrigated 7,328 2.2 16.12 2,234 4,915 1,778 3,137 22.99 Rainfed 5,380 1.8 9.68 2,234 4,021 1,393 2,628 14.14 Dry Season Irrigated 6,503 2.3 14.96 2,234 5,138 1,864 3,274 21.29 Rainfed 5,100 1.3 6.63 2,234 2,904 1,405 1,499 7.64 Total 24,311 47.39 - - - - 66.06 Increment j089 16.51 - - - 31.79 Table 25: GROSS AND NET VALUE OF PRODUCTION IN NATIONAL IRRIGATION SYSTEMSs FUTURE CONDITION (1988) WITH AND WITHOUT PROJECT (At 1983 prices) Faragate Gross value Production Net value Net return to Area Yield Production price of production cost of production project area (ha) (tons/ha) ('000 tons) (P/ton) (P/ha) (P/ha) (P/ha) (P million) With Project Wet Season Irrigated 12,709 3.7 47.02 2,234 8,266 2,268 5,997 76.22 Rainfed - - - - - - - - Dry Season Irrigated 12,709 4.0 50.84 2,234 8,936 2,422 6,514 82.79 Rainfed - - - - - - - - Total 25,418 - 97.86 - - - - 159.01 % Without Project Wet Season Irrigated 7,328 2.6 19.05 2,234 5,808 1,838 3,970 29.09 Rainfed 5,380 2.0 10.76 2,234 4,468 1,413 3,055 16.44 Dky Season Irrigated 6,503 2.8 18.21 2,234 6,255 1,964 4,291 27.90 Rainfed 5,100 1.7 8.67 2,234 3,798 1,454 2,344 11.95 Total 24,311 - 56.69 - - - - Increment 1,107 41.17 -- - - Table 26: GROSS AND NET VALUE OP PRODUCTION IN COMMUNAL IRRIGATION SYSTEMS, PRESENT CONDITION (1983) WITH AND WITHOUT PROJECT (At 1983 prices) Paragate Grose value Production Net value Net return to Area Yield Production price of production cost of production project area (ha) (tons/ha) ('000 tons) (P/ton) (P/ha) (P/ha) (P/ha) (P million) With Project Wet Season Irrigated 680 2.8 1.90 2,223 6,224 1,575 4,649 3.16 Rainfed 220 1.6 0.35 2,223 3,557 1,255 2,302 0.51 Dry Season Irrigated 563 3.2 1.80 2,223 7,114 1,700 5,414 3.05 Rainfed 390 1.6 0.62 2,223 3,557 1,353 2,204 0.86 Total 1,853 - 4.67 - - - - 7.58 Without Project Wet Season Irrigated 524 2.7 1.41 2,223 6,002 1,575 4,427 2.32 Rainfed 376 1.6 0.60 2,223 3,557 1,255 2,302 0.87 bry Season Irrigated 471 3.1 1.46 2,223 6,981 1,700 5,191 2.44 Rainfed 420 1.3 0.55 2,223 2,890 1,353 1,537 0.64 Total 1,791 4.02 -- - - 6.27 Increment 62 0.65 1.31 Notes Farmgate price used is the weighted average price for Oriental and Occidental Mindoro. Table 271 GROSS AND NET VALUE OF PRODUCTION IN COMMUNAL IRRIGATION SYSTEMS, FUTURE CONDITION (1988) WITH AND WITHOUT PROJECT (At 1983 prices) Paragate Gross value Production Net value Net return to Area Yield Production price of production cost of production project area (ha) (tons/ha) ('000 tons) (P/ton) (P/ha) (P/ha) (P/ha) (F million) With Project Wet Season Irrigated 900 3.3 2.97 2,223 7,336 2,042 5,294 4.76 Rainfed - - - - - - - - Dry Season Irrigated 900 3.5 3.15 2,223 7,780 2,072 5,708 5.14 Rainfed - - - - - - - 9.90 Total 1800 - 6.12 - 9.90 Without Project Wet Season Irrigated 524 2.8 1.47 2,223 6,224 1,635 4,589 2.40 Rainfed 376 2.0 0.75 2,223 4,446 1,326 3,120 1.17 Diy Season Irrigated 471 3.1 1.46 2,223 6,891 1,757 5,134 2.42 Rainfed 420 1.7 0.71 2,223 3,779 1,373 2,406 1.01 Total 1,791 - 4.39 - - - - 7.00 Increment 9 - 1.73 - 2.90 Note: Faragate price used is the weighted average price for Oriental and Occidental Mindoro. - 100 - Based on the revised estimates, the incremental paddy production in 1988 would be about 42,800 tons of palay. This is much lower than the appraisal estimate of 62,400 tons. Rate of Return. The computed rate of return for the national systems is 18.15Z (Table 28) while that for improved communal systems is 9.29Z (Table 29). On the overall, the rate of return for the irrigation component is 17.66Z. Discounting in all three cases were for a fifty-year period. The rates of return for each type of system was not established in the Appraisal Report. 3. Irrigation, Provincial Roads and Agricultural Program Costs. The cost of the provincial roads was prorated on the basis of the areas under national irrigation systems (12,709 hectares), communal irrigation systems (900 hectares) and the unimproved communal and rainfed areas (76,391 hectares). Unlike in the original economic evaluation, the Baco-Calapan national highway was excluded as there were difficulties in segregating its cost from the cost of Contract I (national roads). Road main- tenance cost savings were not taken into account as it is assumed that the O&M costs would equal O&M cost savings on the improved roads. The cost of the agricultural program includes both seed certifica- tion and rat control. Since the rodent control program was only able to cover a physical area of 53,000 hectares, this was made the basis for prorating costs. It is assumed that much of the area left out of the program were rain- fed areas or those outside the MIRDP irrigation service areas. The O&M costs for each type of system however were allocated based on an area of 90,000 hectares. Benefits. The same estimates are those used in the economic analysis on national and communal systems were used (Tables 28 and 29). Rate of Return. Discounting net project benefits over a 50-year evaluation period for the national systems and a 30-year period for the communal irrigation systems, the rates of return are 18.9% and 7.79%, respec- tively (Tables 31 and 32). During appraisal, the rates obtained were 24% for the national systems and 25% for the improved communal systems. The reduction in the present estimates were due mainly to delays, cost overruns and lower net returns especially for the communal systems. The cost increase, despite the reduction of the service area of communal systems from 3,000 hectares to 900 hectares account for the drop of its rate of return to 7.79%. - 101 - - Table 28: COST-BENEFIT FLOW AND ECONOMIC INTERNAL RATE OF RETURN: NATIONAL IRRIGATION SYSTEMS (P'00O) Residual Net Present Present Investment value of Incremental Incremental benefit worth worth Year cost equipment O&M cost benefit flow at 18% at 20% 1975 3,629 - - - (3,629) (3,074) (3,023) 1976 15,144 - - - (15,144) (10,873) (10,510) 1977 39,606 - - 5,515 (34,091) (20,761) (19,739) 1978 27,939 - - 2,678 (25,267) (13,035) (12,176) 1979 29,414 - - (11,637) (41,051) (17,939) (16,502) 1980 59,728 - - (5,256) (64,984) (24,044) (21,770) 1981 28,564 - - 12,443 (16,121) (5,062) (4,498) 1982 21,158 - - 21,552 394 105 92 1983 5,018 6,314 - 31,790 33,086 7,444 6,419 1984 - - 783 42,508 41,725 7,969 6,759 1985 - - 906 53,226 52,320 8,476 7,063 1986 - - 1,121 63,944 62,823 8,607 7,036 1987 - - 1,256 74,662 73,409 8,515 6,827 1988-2024 - - 1,363 85,380 84,017 54,107 39,152 Net present worth 435 (14,870) EIRR = 18.05Z - 102 - Table 29: COST-ENEFIT FLOW AND ECONOMIC IWEERNAL RATE OF RETURN: COMMUNAL IRRIGATION SYSTEMS ('000) Residual Net Present Present Investment value of Incremental Incremental benefit worth worth Year cost equipment O&M cost benefit flow at 18% at 20Z 1975 229 - - - (229) (208) (212) 1976 636 - - - (636) (525) (545) 1977 1,510 - - 155 (1,355) (1,018) (1,076) 1978 1,083 - - 238 (1,565) (1,069) (1,150) 1979 4,200 - - 297 (3,903) (2,424) (2,658) 1980 7,323 - - (49) (7,372) (4,158) (4,644) 1981 4,084 - - 981 (3,103) (1,592) (1,809) 1982 4,204 - - 1,606 (2,598) (1,213) (1,403) 1983 836 263 - 1,310 737 312 369 1984 - - 40 1,628 1,588 613 735 1985 - - 49 1,946 1,897 664 814 1986 - - 63 2,264 2,201 702 874 1987 - - 77 2,582 2,505 726 922 1988-2024 - - 96 2,900 2,804 7,885 12,141 Net present worth (1,305) 2,358 EIRR - 9.29% - 103 - Table 30: COST-BENEFIT FLOW AND ECONOMIC INTERNAL RATE OF RETURNI IRRIGATION COMPONENT (F'000) Residual Net Present Present Investment value of Incremental Incremental benefit worth worth Year cost equipment O&M cost benefit flow at 15% at 182 1975 3,857 - - - (3,858) (3,356) (3,268) 1976 15,781 - - - (15,780) (11,930) (.1,330) 1977 41,116 - - 5,670 (35,446) (23,323) (21,587) 1978 29,742 - - 2,716 (26,826) (15,344) (3,842) 1979 33,613 - - (11,340) (44,954) (22,342) (19,645) 1980 67,051 - - (5,305) (72,356) (31,258) (26,722) 1981 32,649 - - 14,424 (18,224) (6,852) (5,722) 1982 25,362 - - 23,158 (2,204) (721) (586) 1983 5,854 6,577 - 33,100 33,823 9,606 7,610 1984 - - 823 44,136 43,313 10,698 8,273 1985 - - 955 55,172 54,217 11,657 8,783 1986 - - 1,184 66,208 65,024 12,159 8,908 1987 - - 1,330 77,244 75,914 12,374 8,806 1988-2024 - - 1,459 88,280 86,821 93,593 55,913 Net present worth 34,961 (4,459) EIRR - 17.66% Table 31: COST-BENEFIT FLOW AND INTERNAL RATE OF RETURN: IRRIGATION, PROVINCIAL ROADS AND AGRICULTURAL SERVICES IN THE NATIONAL IRRIGATION SYSTEMS (P'000) Prov. Agricultural Irrigation roads services Total cost Invest- Incre- Invest- Invest- Invest- Incre- ;et Present Present ment mental ment ment O&M ment O&M mental benefit worth worth Year cost O&M cost cost cost cost cost benefits flow at 15% at 20% 1975 3,629 - - - - 3,629 - - (3,629) (3,157) (3,023) 1976 15,144 - 1,192 76 - 16,412 - - (16,412) (12,408) (11,390) 1977 39,606 - 3,920 165 - 43,691 - 5,515 (38,176) (25,120) (22,104) 1978 27,939 - 3,354 669 - 31,962 - 2,678 (29,284) (16,750) (14,115) 1979 29,414 - 4,089 891 - 34,394 - 11,637 (22,757) (11,310) (9,148) 1980 59,728 - 1,291 632 - 61,651 - 5,256 (56,395) (25,659) (18,892) 1981 28,564 - 1,880 903 - 31,347 - 12,443 (18,904) (7,108) (5,274) 1982 21,158 - 3,003 - 226 24,161 226 21,552 (2,835) (927) (660) 1983 5,018 - 126 - 205 5,144 205 31,790 26,441 7,509 5,130 1984 - 783 - - 195 - 978 42,508 41,530 10,258 6,728 1985 - 906 - - 195 - 1,101 53,226 52,125 11,207 7,037 1986 - 1,121 - - 195 - 1,316 63,944 62,628 11,711 7,014 1987 - 1,253 - - 195 - 1,448 74,662 73,214 11,934 6,809 1988 - 1,363 - - 195 - 1,558 85,380 83,822 11,819 6,538 1989-2024 - 1,363 - - 195 - 1,558 85,380 83,822 81,386 33,107 Net present worth 43,385 (12,243) EIRR = 18.9% Table 32: COST-BENEFIT FLOW AND INTERNAL RATE OF RETURN: IRRIGATION, PROVINCIAL ROADS AND AGRICULTURAL SERVICES IN THE COMMUNAL IRRIGATION SYSTEMS (P'000) Prov. Agricultural Irrigation roads services Total cost Invest- Incre- Invest- Invest- Invest- Incre- Net Present Present ment mental ment ment O&M ment O&M mental benefit worth worth Year cost O&M cost cost cost cost cost benefits flow at 6% at 10% 1975 229 - - - - 229 - - (229) (216) (208) 1976 636 - 85 5 - 726 - - (726) (646) (600) 1977 1,510 - 298 12 - 1,820 - 155 (1,665) (1,399) (1,250) 1978 1,083 - 238 26 - 1,347 - 238 (1,109) (878) (757) 1979 4,200 - 290 55 - 4,545 - 297 (4,248) (3,173) (2,638) 1980 7,323 - 91 39 - 7,453 - (49) (7,502) (5,289) (4,231) 1981 4,084 - 133 64 16 4,281 16 981 (3,284) (2,184) (1,685) 1982 4,204 - 21 - 16 4,225 16 1,606 (2,635) (1,652) (1,230) 1983 836 - 81 - 10 917 10 1,310 383 227 162 1984 - 40 - - 10 - 50 1,628 1,578 880 609 1985 - 49 - - 10 - 59 1,946 1,887 994 660 1986 - 63 - - 10 - 73 2,264 2,191 1,089 698 1987 - 77 - - 10 - 87 2,582 2,495 1,170 724 1988 - 96 - - 10 - 106 2,900 2,794 1,235 735 1989-2024 - 96 - - 10 - 106 2,900 2,794 12,590 5,758 Net present worth 2,648 (3,253) EIRR - 7.79% T PHiLPPINES JULY 1914 TARLAC IRRIGATION SYSTEMS IMPROVEMENT PROJECT Ul San Miguel-O'Donnell River Irrigation System (SMORIS) w ouTarlac River Irrigation System (TRIS) 3mmmm Existing Main Canals ~a amm "nNew Mein Canal neral Canals To Ouimba NE Pp Ofundwlet Improvement Aresa% Extension Areas ý149; Hacenda Luisita 6r SUGGr Can. Affl * Sugar Mill Diversion Dams i.--- Railways To Gumba N E -. Flood Protection Dikt E National Highways Other Roads fr . 1 River or Creeks sBundary btween TR15 and SMO0111 *~ ~ - -Municipal Boundoc;e% 1 aut ofil c141 l ti.u114;ltiu v ERSION DAM 3111* To Zotogosa N E SAN MJIGIUEL µGUE ,SAN .OIS YERSION DAM 1 ....1 GROUNDWATIER10 2 14 IRRIGATION *IO -R - sou .HM TUZON EXTEN AREA TaAcPHIUPPINE 3 CNCEPCi 州 方州‘ e 0 WCALAMUNDINGANC.I.S lp Jlå Ban' Sablayaný--- d Jia n su M ý11GUISAN C.U 0 n 0 Bongabong rn rn Z .z PHILIPPINES, RURAL DEVELOPMENT PROJECT Sa Miguel (C lintoan) 0' WATER CONTROL AND 0 ;Q Roxas lv r'. CROP DISTRIBUTION -12*30' ansolay 12*30'- NATIONAL IRRIGATION SYSTEMS COMMUNAL IRRIGATION SYSTEMS Rizal P WATERSHEDS DIVERSION DAMS RIVERS San Jose kZ,l Saý Pedro CROPS: y PADDY RICE COCONUT DIVERSIFIED CROPS MOUNTAINOUS ZONE NATIONAL HIGHWAYS PROVINCIALBOUNDARY 0 10 20 30 40 KILOMETERS 121100' 12190 0. IBRD-1.159R MARCH 1980 120 20' 12040 121°00' 1212a $outh Ž 0 China Philippine Puerto Golera 580 A So Abra de 1Io 5. Teodoro MINDORO4 Poluan colapVIA S Bacc Sta Rosa Bao PINDAN Mangangan.o S. 13· 20 Mayobig U-- -01 Ncujan Dulangan %i Auroro5Agsi Mulawin e. Momburco --j Ban, Victoria '~'1 C ar ue % o Agrciltual School 0sPgle col,e Santa Cruz uteborc k Socorro pili C h /n a 5f~aayna Barahan Fortuno -13130' &&：「인 1111113.11138 )ULY 1974 PHILIPPINES TARLAC IRRIGATION SYSTEMS IMPROVEMENT PROJECr Comiling River Irrigation System (CRIS) To augullon Existing Main Canal iiiiiiiiliP Diversion Dom Now Main Canal Rivers or Cmeb Lateral Canals _49 _ Nabonal Highways Proposed Groundwater - Other Roads EXTENSION Irrigation Pilot Area - -- - -- - Municipal Boundarm AREA Improvement Areas Provincial Boundarm Extension Area 13 C N 13' 섬