India - Haryana Irrigation Project

Document of The World Bank FOR OFFICIAL USE ONLY PeOrtNo. 5660 PROJECT PERFORMANCE AUDIT REPORT INDIA - HARYANA IRRIGATION PROJECT (CREDIT 843-IN) May 17, 1985 Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. ABBREVIATIONS AND ACRONYMS ARDC - Agricultural Refinance and Development Corporation ATW - Augmentation Tubewell B&R - Bridges and Roads Branch of PWD CAD - Command Area Development CADA - Command Area Development Authority CCA. - Cultivable Command Area ERR - Economic Rate of Return FAO/CP - Food and Agriculture Organization (Bank-FAO) Cooperative Program GOH - Government of Haryana GOI - Government of India HSAMB - Haryana State Agricultural Marketing Board HSMITC - Haryana State Minor Irrigation (Tubewells) Corporation ICB - International Competitive Bidding ID - Irrigation Department (within GOR's I&PD) IDA - International Development Association I&PD - Irrigation and Power Department LCB - Local Competitive Bidding M&E - Monitoring and Evaluation OED - Operations Evaluation Department O&M - Operation and Maintenance PPAM - Project Performance Audit Memorandum PPAR - Project Performance Audit Report PH - Public Health Branch of PWD PWD - Public Works Department PCR - Project Completion Report WYC - Western Yamuna Canal GLOSSARY kharif - Wet season; June - October rabi - Dry season; November - April chak - Watercourse CCA sub-chak - Watercourse CCA below the 5-ha turnout WATER AND MEASURE EQUIVALENTS 1 meter = 3.28 feet 1 kilometer = 0.62 miles 1 hectare = 2.47 acres 1 ton = 2,205 pounds M = million PROJECT PERFORNANCE ADIT REPORT INDIA - HARYANA IRRIGAION PROJECT (CREDIT 863-IN) TABLE OF CONTENTS Page No. Preface .............................. Basic Data Sheet ............................................... 11 Highlights ************......*............. 111 PROJECT PERFORMANCE AUDIT MEMDRANDUM I. SUMMARY ........................... 1 Background - ............................................... 1 Identification and Appraisal ............................. 1 Results ...... .............................. 2 II. ISSUES ................................................ 3 O-Farm Development: Problems with Credit and Cost Recovery. 3 Water Supplies - Cost Recovery ....... ...................... 5 Water Charge Methodology .........o... ....................... 6 Rural Development Components ......... . ...................... 7 Attachment 1: Borrower's Comments ................................. 9 PROJECT COMPLETION REPORT I. Introduction ................................................ 17 II. The Project at Appraisal ............................ 19 III. Project Implementation ..................... 21 IV. Institutional Performance ....... ............................ 28 V. Agricultural Impact ..... ...... ............................. 30 VI. Economic Reevaluation ....................................... 32 VII. Bank Performance ........ .......................... 33 VIII. Issues and Lessons Learned ........ 34 Tables Annex 1 I4ap Ts document hnas reaiad &disbuto and ay be used by ripieits aly in fth performme of dr oica dutis. Its contents may not otberwi be didosed without World Eank authorization. PROJECT PERF0EHANCE AUDIT REPORT INDIA - HARYANA IRRIGATION PROJECT (CREDIT 843-IN) PREFACE This is a performance audit of the Haryana Irrigation Project in India, for which Credit 843-IN was approved in August 1978. The credit was fully disbursed and closed in Angust 1983. The audit report consists of a Project Performance Audit Memorandum (PPAM) prepared by the Operations Evaluation Department (OED) and a Project Completion Report (PCR) dated May 30, 1984, prepared by the South Asia Regional Office. The audit memorandum is based on a review of the PCR (also of a draft PCR dated July 1983 prepared by the Government of Haryana (GOH)), the President's Report (No. 2349) dated July 1978, the Appraisal Report (No. 2038a-IN) dated July 19, 1978, the Credit and Project Agreements dated August 16, 1978, correspondence with the Borrower, and internal Bank memo- randa on project issues, as contained in relevant Bank files. Bank staff associated with the project have also been interviewed. An OED mission visited the project in September 1984. Civil works constructed under the project were examined and observations made of the agricultural practices employed by the farmers. Wide ranging discussions were held w-Ith Government officials at Federal, State, and project levels, and a number of small farmers were interviewed. The audit finds that the PCR provides an accurate description of the project, its implementation and outcome. The audit memorandum, there- fore, summarizes salient design and performance features, and discusses a number of selected issues. The draft report was sent to the Borrower on January 31, 1985. Comments received from the Borrower have been included in Attachment 1. The valuable assistance provided by the Government of India and the Government of Haryana State is gratefully acknowledged. DIA - nav^ TIA rM Y.R (CDT 843-Kn Atual or åttuel se Appr.sal atimen of Appea~a HE~ate regi~DtSt Total Project costs (USS cm~an) 2 22222 100 Cr A~Luc (uS t - toD) 111 111 100 Date Roard Approval 08/08/78 Date Effetivemems 11/14/78 12/14/78 Date Physi~l Coom rnamletedI 02/28/83 Cloeing nlate 08/31/83 EcUonM~c Rata of Ratur <Z) 32 25 ingtienti~na Eorfor~ne setafactory Agranomie Perfor-e Satte arny Kuaber of Direet SenefLteiia - 555.000 far~ fa.mUl CUNB1ATIV DISEURSEIETS 1179 VM8 1M1 YM2 18 Appra~sal Et"~te cUSS miin~) 8.0 36.0 69.5 100.5 111 Actual (SS meL~in> 8.5 34.2 65.8 91.8 Ill Actual as - of Egimte 106 95 95 91 100 Date of 1~mai Diabr~r-: 04/30/83 MISSION DATA SpeCiLUa- Berfor- Date No. of NE~days tions Type of Kision (o./yr) Perona in Field RCpesnUd / ra g ýL rm Proble te TdenlfLeatIoan 1977 Preparation 1977 Appraial 12/77 Subtotal Supervision I 12/78 2 8 E 1 2 - Supervision II 05/79 A 8 .S,ADC 1 2 0 Superviion II 10/79 2 8 E' s Supervisioan V 5-6/81 2 5 E(2) 1 2 0 Supervision VI 11/81 4 4 E(3).FA 1 2 0 Superisiom VII 05/82 2 3 a(2) 1 2 0.P SumperviLo VIII 11 82 3 5 E(2),FA 1 2 TOrAL OTME PRa3MrTA Borromer Govermant of Kndin E-12•ing Agecy covernm~t of Baryna Fiscal Year of Borrover April I - Mareb 31 Dame of currecy (Abbreviaion) Rupe=u (ae) Currency r-chenge Rate: Appraisal Year Average USS1.00 - e 8.60 Luterv«ing Yeara Average US$1.00 - Da 9.00 Completion Year Average US$1.00 - te 9.50 Follw-on Projeet: Name Haryna IrrigatIon II Project credt No. 1319-IN Credit Amaunt (USS million) 150 Date Board Approval 02/23/83 /a Except for ccompne finauced as credit item (varercour~e lining, mrkets. and land Levelng). E - Enginer; PA - fianciam ; NS - Harketing Spe~Lzc; A=DC - DIrector of AgrIcultaral Rafie and Developmeut Corporation (AMDC). /c 1 - problem-ifree or minor problem; 2 - moderate problem; and 3 - mjor problem. 7d_1 - iqroving; 2 - statiomary; and 3 - deteriorating. 7F P - filancal; N - ~magerial; T - eebaleal; P - political; and 0 - other. PROJECT PERFORMANCE AUDIT REPORT INDIA - HARYANA IRRIGATION PROJECT (CREDIT 843-IN) HIGHLIGHTS Haryana, one of the smaller States of India, has generated a very satisfactory economic growth record in recent years Its population is mainly rural, with 62Z directly engaged in agriculture. Arid to semi-arid conditions make progressive agriculture heavily dependent on irrigation, for which an extensive network of canals exists, but within the context of very limited water resources. This project was designed to improve, and slightly modify, existing irrigation facilities by taking measures to prevent water seepage losses in the canal system and to effect better water distribution at the farm level. The financing package also covered improvement to the State's rural roads, the provision of improved marketing facilities and the provision of clean water supplies to rural areas. The component parts of the project were all implemented within expected time frames and costs, with the exception of that part heavily con- tingent on the farmers forming groups to take institutional credit. Apart from this one exception, this was an extremely satisfactory project, generat- ing a good economic rate of return, with well distributed benefits. There were two principal reasons for success: - the technology to be used during implementation had already been proven in the area and was thoroughly understood by the implement- ing agencies (PCR paras. 5.02-5.05); and - the amount of work assigned to an agency under the project had been carefully related to the appraised existing capacity of the agency, i.e., the project did not require any major institutional changes to carry out the activities called for (PPAM para. 36). Other areas of interest include: - the probability of failure, or at least a disruption of plans, when small farmers are expected %forced) to form groups to finance on- farm works through institutional credit obligations (see also PPAR, India Orissa Irrigation Project (Credit 740-IN), under prepara- tion) (PPAM paras. (19-20); -iv - - the need to place cost-recovery issues into pragmatic perspectives (PPAM paras. 25-28); - the underlying advantages to development when land fragmentation problems have been solved (PPAK para. 3). PROJECT PERFORNANCE AUDIT MENDRANDUN INDIA - HARYANA IRRIGATION PROJECT (CREDIT 843-IN) I. SUMMARY 1. Haryana, one of the smaller States of India, has a population of about 2 million and covers about 4.4 million hectares, of which 3.9 million are arable. The State was formed from a sub-division of the Punjab as recently as 1966. Nevertheless, it has a well integrated civil service that effectively co-ordinates the activities of competent technical and adminis- trative departments. 2. The state has consistently achieved good economic growth. In 1981/82 the average per capita income in Haryana was Rs 2,580 compared with the all India average of Rs 1,760. Over the previous ten years average per capita incomes had grown at 1.9% per annum in Haryana compared with 1.0% for India as a whole. About 62% of the people live in the rural areas and depend on agriculture for their livelihood. 3. The average land holding is small (3.77 hectares), but, as all holdings have been consolidated, the State does not suffer the disadvantages and constraints to on-farm development caused by land fragmentation, which is common in much of India. 4. Irrigation is essential in this generally arid to semi-arid State. About 75% of the arable land is serviced by irrigation canals, but only 55% (total of two seasons) of this cultivable command area (CCA) is actually irrigated, because water supplies are limited. 5. This project's major objective was to minimize water seepage losses from the canal/watercourse delivery system, thus maximizing the utilization of the limited water supplies available. The project was approved in August 1978 with a credit amount of US$111 million, representing about 50% of antic- ipated total project cost. Physical components were completed by February 1983, and the Credit was closed fully disbursed in August 1983. Identification and Appraisal 6. The project was prepared during 1977 by the Government of Haryana (GOH) with assistance from the Bank-FAO Cooperative Program (FAO/CP). Essen- tially, preparation involved "projectizing' an expansion of existing on-going investment activities over the next four- to five-year period. The project was appraised in December 1977. -2- 7. With the objective of minimizing water seepage losses, the princi- pal project components included lining about 2,900 km of various types of canals and about 10,000 km of channels in 2,230 village watercourses. How- ever, 325 deep tubewells were to provide additional water to the canal systems. 8. In addition to improved irrigation, the project also included financing to support construction of 1,322 km of roads, the provision of safe piped drinking water to 175 villages and creation of 22 new grain markets, with improvements to four existing ones. 9. Execution of these components was to be carried out by the regular agencies of GOR: the Irrigation Department (ID) was responsible for moderni- zation of the canal systems and had the lead responsibility for the total project; the Haryana State Minor Irrigation (Tubewells) Corporation (HSMITC) was responsible for watercourse lining and augmentation tubewells; the Haryana State Agricultural Marketing Board (HSAMB) handled construction of markets; and two branches of the Pablic Works Department (PWD) - Bridges and Roads (B&R) and Public Health (PH) - had responsibility for roads and vil- lage water supplies. 10. It was anticipated that the reduced water losses in the canal sys- tem and the watercourses, together with improved water distribution by the latter, would result in an increased areaaf irrigation sufficient to provide an incremental annual output of 310,000 tons of foodgrains and 26,000 tons of pulses. The project was expected to generate 62 million man-days of con- struction employment over a four-year period, and to increase the agricul- tural labor demand by about 21 million man-days per annum. Results 11. The project was executed in a thoroughly professional manner. Within the anticipated time period, the physical targets for the major com- ponent, canal lining, were slightly exceeded. Similarly, targets were exceeded in road construction and in the provision of village water supplies, about 88% of the augmentation tubewells were installed, and 73% of the market facilities were created. However, only 60% of the targets for watercourse modernization were achieved (see paras. 18-23). Engineering standards and the quality of contracted works were fully satisfactory. 12. The PCR indicates that the project has resulted in an additional 267,000 hectares of irrigation (about 91% of appraisal expectations) and, using crop yield data somewhat lower than that used by appraisal, infers an incremental output of foodgrains and pulses at about 90% of appraisal esti- mates. 13. Costs. While total project costs were contained within the gross expenditures approved for the project, the component make-up of final alloca- tions varied from appraisal expectation. 14. Expenditures on canal lining increased by 41% due to a 6% increase in the amount of work and 33% higher unit costs. Within a very similar pattern, village water supply expenditures increased 64%. However, the expenditures on roads fell by 2%, despite a 10% increase in physical achievement, mainly because real unit costs were 11% below estimates. 15. Expenditures on watercourses, tubewells and markets were all below expectation (as was physical output) at 67%, 72% and 67% respectively. All these expenditures were to be financed through the institutional credit sys- tem, while those above (para. 14) were financed through GOR's regular bud- get. The changes, therefore, altered the State budget/institutional credit financing ratio from an expected 47:53 to 65:35, with consequential stress on budget management (see para. 22). 16. Economic Rate of Return. The PCR (para. 6.01) calculates an ERR of 25% compared with appraisal expectation of 32%. Both calculations included the costs but ignored the benefits attributable to the roads, village water supplies and markets, which together accounted for about 27% of total project costs. The main reasons for the somewhat lower-than-expected ERR is the higher-than-expected unit costs in canal lining, combined with fewer-than- anticipated watercourse improvements being completed. In calculating the ERR, conservative assumptions have been used for all components, with two exceptions.l/ In the audit's judgement, the ERR estimate is more likely to understate than to overstate the actual eventual outcome. 17. Beneficiaries and Unquantified Benefits. Because of the project, over 500,000 families (about 3 million people) have gained material advantage by being able to irrigate a larger proportion of their land, and their opera- tional opportunity has been enhanced by improved roads and market ser- vices.2/ The landless have been assisted through the provision of safe drinking water to over 300,000 people, and by the generation of a new labor demand in excess of 20 million man-days per annum. II. ISSUES On-Farm Development: Problems with Credit and Cost Recovery 18. As indicated in the PCR (paras. 8.01-8.03), the p..acipal con- straint to improving irrigation at the farm level, particularly among small 1/ These are: (a) benefits from augmentation tubewells assume farm level use of all the water supplied, i.e. ignores losses after entry into the canal system, and (b) benefits assumed in the -lift command areas" ignore probable interruptions in water supplies arising from electricity shortages. 2/ Using the additional water made available to them, the farmers empha- sized increasing the area irrigated rather than increasing application rates and yield per unit of land area. -4- farmers, remains how to initially finance, and subsequently recover, the cost of on-farm development that provides a common benefit to a group of farmers. 19. For this project, and for other irrigation development in India at the time this project was appraised, it was expected that the problem of financing such de?'elopment could be overcome by granting institutional credit to common-interest groups (e.g., the users from a common watercourse), with subsequent credit repayments reflecting 100% cost-recovery. Although the approach had had a measure of success at a minor activity level in the pre- project period, it failed when attempted on a large scale under the project. 20. The principal constraint to the approach was that the benefits from watercourse improvement were far from being equally distributed among indivi- duals within the group of beneficiaries, or even among those with land hold- ings of similar size. Some users even became net losers of water resources due to the altered distribution system.3/ Uncertainty regarding the degree of benefit to individuals made it extremely difficult to achieve group con- sensus on the sharing of development charges, and, in the absence of consen- sus, the forced application of a credit liability created a situation where the "credit" recipients simply refused to make repayments. Further, the widespread "refusals-to-pay-, combined with the inherent inequities, inevi- tably made the issue politically exploitable.4/ 21. The absence of credit repayments (cost recovery) led to cash flow problems for RSMITC, which failed to meet repayment commitments to commercial banks and ARDC. The net effect was to reduce HSMITC's access to finance and hence its ability to develop more than 60Z of the target area (para. 11).5/ 22. In addition to disappointment concerning cost-recovery, GCH had to reappraise the effect of continuing on-farm development with support from regular budget sources. Debate about the best method of retaining the use of commercial fund sources and yet attaining an acceptable level of cost recovery lasted over two years. Eventually, a formula was adopted by which 3/ In Attachment I the Borrower has emphasized that through lining water- courses the project has created a more equitable water distribution sys- tem which has provided significant benefits, especially to farmers in the lower reaches of the system. The audit agrees. Bowever, the audit has also drawn attention to the fact that some farmers, especially those in the uppe- reaches of the system, have gained little, if any advantage from the new system. A few of the farmers who originally were in a very privileged situation at the head of the watercourses may even have been net losers from these changes. 4/ The Borrower disagrees with these comments (see Attachment 1, para. 6) and has suggested that other factors, notably unfavorable weather condi- tions, have adversely affected repayments. 5/ The Borrower (Attachment 1, para. 7) has observed that targets for improvement of watercourses were also scaled down due to shortages of materials and delays in ARDC sanctioning credit. -5- GOH agreed to subsidize HSMITC's activities to the extent necessary to (a) allow RSMITC to meet its past obligations (para. 20) and (b) to meet the future development costs in full for the share of farmers with less than I hectare each, and 50% of the share for larger farmers. 23. Although the evidence is not yet conclusive, indications are that the farming community accepts the new formula, and cost recovery collections based on the formula appear to be reasonable. However, while the issue may now seem to have a reasonably workable solution, this is only true in the context of the subsidy decisions and in places like Haryana where land frag- mentation is not a problem. In other situations, using institutional credit, and attaining a 50% cost recovery from farmers with over 1 hectare, may still prove difficult.6/ For this reason, most states now finance such develop- ment from budgetary sources. Water Supplies - Cost Recovery 24. The Bank's agreement to support GOH was an endeavor to supply safe drinking water to villagers who previously had little, if any, assured water within reasonable proximity, and was conditional on GOR's imposing some form of water charges on the beneficiaries. The Bank's requirement was in con- flict with tradition which, in effect, said that the State has a duty to sup- ply and thL people have a right to receive drinking water. Section 3.13 of the Project Agreement mandated that the Panchayat (Village Council) contrib- ute to annual operation and maintenance costs and deposit the first year's dues in advance. 25. The audit can find little merit in the Bank's insistence on the introduction of water charges in this case. In the first place, the majority of the beneficiaries are in the poorest class of the society - those who are landless or who have those land holdings already subject to substantial direct and indirect taxation (or their produce prices are controlled to bene- fit the urban households). Sound justification for the Bank's attempt to recover from beneficiaries was missing in this case. 26. The principal argument for maintaining the Bank's stance was changed so that it rested on the assumption that the people would maintain assets better if they were obliged to pay for them. While this may be a valid theory in some instances, it is not valid in this case because: (a) The majority of users were too poor to pay directly, and the indi- rect payment by the Panchayat would be of little significance. (b) The majority of the Panchayat's financial resources are in the form of grants from the State, i.e. in many cases the amount of funds raised within a village is limited, and diversion of grant funds to pay water charges simply reduces other expenditures on other basic needs. 6/ For example, see PPAR on the Orissa Irrigation Project (Credit 740-IN). (c) The physical assets constructed at the village represent a tiny proportion of the total assets constructed by the project in creat- ing the water supply, i.e., an insignificant portion of the total assets is subject to maintenance by the villagers. The village assets consist of only a few square yards of concrete apron sur- rounding a standpipe and a faucet. Even if the item most subject to damage, the faucet, is missing or broken, it does not make much difference. Within the system, water is only supplied to partici- lar villages according to a time schedule, and at those times the standpipe is in constant use by waiting villagers. 27. Although the audit feels that in this instance dogma was allowed to outweigh common sense, very little harm has been done. A considerable amount of professional staff time was used debating and recording the issue, but, otherwise, the outcome at the village level is largely unaffected; GOH deducts the Panchayat's pre-payment from its support grant at the time the grant is made. It is not clear whether the grant elements have been raised initially to allow for the deduction. 28. In summary, over-reaction by Bank staff to Bank Management's con- cerns with assuring asset maintenance led only to some unnecessary debate with GOR, the imposition of some bookkeeping manipulation, and little else. Water Charge Methodology 29. Section 3.08 of the Project Agreement obliged Haryana to undertake ... "a statewide review of alternative methods of collecting water and water-related charges in modernized irrigation projects, with special emphasis on volumetric water pricing". 30. Although charging for irrigation water according to the measured volume supplied/used by a farmer may, in theory, appear to have advantages over most other systems, the audit finds little evidence to indicate that it would result in a better use of water resources or in higher monetary collec- tions than the relatively simple system now employed in Haryana. 31. Charges are imposed according to (a) the area of land under irri- gated crops and (b) the type of crops. Crops which require the largest quantities of water are charged at the highest rates. For example, the charge for one hectare of irrigated sugar-cane cultivation is about US$4, while that for maize is US$2. Thus, the system allows for the proportionate costs of different crops to follow patterns similar to those that would occur under water measurement systems. Since the charge rates per hectare are as easily adjusted as rates for volumetric units, the latter has no advantage over the former.7/ 7/ The Region disagrees and feels that it would be beneficial to move towards a system of volumetric water charges. -7- 32. Similarly, the theory that volume-measured water charges would sub- stantially influence a farmer into using available water to maximum advantage has little relevance to the Haryana situation because it presupposes that water is available on demand, i.e., it addresses use of variable amounts of water over a fixed irrigated area. In Haryana, the rationing of available water means that few areas can have water available at all times; some areas can have water available about 66% of the time, others only 33%. The farmers are reacting to this allocation system by using minimum amounts of water per hectare in an effort to cover a maximum area - subject only to risk aver- sion8/. This results in lower than optimal per hectare yields but a very satisfactory realization of output per unit of water available.9/ While improved yields are still possible within current water constraints, these would be due to steady improvements in agricultural husbandry and are largely unrelated to how individuals preseAtly use their water allocation. 33. It is equally true that conversion to a volume-based water charge system would not be detrimental to production and would perhaps provide incentives to use water less liberally in those few areas where water can be drawn almost on demand. It is also true that volume-based water charges would eliminate some minor irregularities in the present system associated with (a) some beneficiaries understating the area irrigated and (b) some being charged full irrigation rates although the system has allowed only a single water application. Rural Development Components 34. About 28% of total project cost was allocated for components unre- lated to irrigation. The provision of roads, markets and water supplies raises two questions: first, why were these components chosen, and why on the scale targeted; second, how did the inclusion of multi-components affect project management? 35. In this case, the subsidiary components were not included because each was necessary for the success of the others, i.e., this was not designed as an integrated rural development project. The components were included because they were on-going or already planned activities by GOH at the time the irrigation investments were being prepared and some of them were comple- mentary to development of irrigation. The Bank's agreement to include them within the same financing package reflected (a) a response by the Bank to rural development needs in the area and (b) a desire to save the manpower costs which would have oeen incurred in the preparation of parallel projects. 36. The size of each of these components was geared primarily to the appraisal's estimation of each agency's implementation capacity. This is 8/ Avoiding a particular crop reaching a critical water-stress stage at periods when water may not be ia the system. 9/ Given current available crop technology. -8- different from most Bank-supported projects in that project activities are usually designed to meet a desired goal, and in order to accomplish that, the implementation agency may have to be strengthened. Many multi-purpose proj- ects experience organizational/co-ordination problems. This one did not, however, due to the careful assessment made of the capacity of individual agencies prior to task allocation, and the fact that each of these project components could be carried out independently of each other (i.e., a delay in one component would not adversely affect another). This also explains why, in large measure, each component was implemented so successfully. Page 1 BORROWER'S COMMENTS ------- D.O.NO.P. 4/1,/92-PB-III O. SUHM BOSE - w tr UNDER SECRETARY - rw TEL: 3015936 w ** arwa mitc uas the 4th Apri;1 1985. Dear Mr Grimshaw, Mr. Yukinori Watanabe, Director, Oerations Evaluation Department vide his letter of January 31, 1985 to Mr. V.K.Shunglu, Joint Secretary .had sought commients on the draft Project Performance Audit Report of the closed Haryana Irrigation Project (Cr.843-IN) for consideration in formulting final" conclusions before distributing the report to the Bank' s -Executive Directors. . 2. Our comments on the PPare enclosed. We shall be .grateful if these comments are transmitted to Mr. Yukinori- - .----e- the Overations Evaluation of the Bank. (17 adly accnowledge receipt of this . ---lettf Yours sincerely, - pl (suMIT SOSE) . rtrw- avr, Mr.-- . haw, . . Cjit.-,culture Division, U T a nic, ECD.As. DIV, 2f, Jor Bagh, 4 APR V ____ Attachment 7 10- Page 2 Cmments 1. Government of India and Goverment of Haryana are generally in agrament with the PPAR prepared by the DEll on the Haryans Irrigatin Pro- Ject (Credit 843-1n), The report has described the project performance in its proper parapectie and has ackknowledged that the components of the project were all implemented within the expected time frames and costs except the modernization of water courses, en which aspect ou comments are given below. 2. Our comments on the specific issues raised in the PPM and the PCR are as followes Para 14 & Pera 17 of PPM 3. For village water supply component, it Is stated that the expenditure increased by 64% on the project cost as indicated In Staff Appraisal Report. This increase in expenditure was due to the addition of part expenditure of additional water supply achemes considered eligible for disbursements during the project period. In this manner the physical achievements were increased by lagC. Accordingly, the corrections may be made in Tabla-I of pCR under the column of physical achievements (percentage) a. 2 instead of 10. In pars 3.11 of pCR on page-11, the figures of 350 villages may be corrected as 351 villages and figures of 178 villages may be corrected as 179 villages. Similarly, in pars 3.18 sf PCR an page-il the figures of 100.0 under column appraisal may be corrected as 100.6 for village water supply and the figures of 102 under physical achievements (percen tage) may be corrected as 200%. Para 20 of PPM 4. It has been statec thatIthe principal constraint to the approach was that the benefits fron watercourse improvement were far from being equally distributed among indivisuals within the group of beneficiaries, or even among those with land holdings of similar size. Some users even See the first became not losers of water resources due to the altered distribution sye- footnote to tem". We do not share this view. Water is supplied to a group of farmers paragraph 20 at the outlet head at a certain specifieakater allowance i.e. 2.4 ca per of the ppAM. thousand acres culturable commanded area (CCA), In the absence of lined watercourses, the utilisation by the farmers is not equitable because of the seepage losses enroute from outlet head to the fields. The farmers in the head reach receive are net supply vis-A-vis the farmers at the tail and. ThAs inequity is by and large removed as a result of lining of watercourses. All the users stand to benefit Irrespective of the location of their fields in proportion to the losses which take place in the absence of lining. Because of the geographical location of fields, benefit to all in terms of saving of seepage losses can never be equal. After the lining, the distribution becomes equitable in the sense that all the farmers get uater corraspondingM to the sanctioned water allounce, seepage losses being negligible for all practical purposes. Thus, a serious anomaly in the matter of sharing of water, which Is inevitable in an unlined watercourse, is remedied. 5. The response to the programme of lining of watercourses has been collective and there is no evidence of apposition from any section of the beneficiaries irreapective of the location of their fialos or size of their holdings. The inference that some users even became net losers of water resources oue to the altered distribution system, is not correct. The restoration of the right to the user and the application of water to the aor ad *he ingptat* rightful farmer could not be deemed as a la to aMy Other individual or a group o farmers. 6. It Is not a fact that uncertainty regarding the cegree of benefit to the individuqls made it extremely difficult to achieva group consensus on the sharing of development charges, and9 in the abeunce of consensue, *042/- Attachment I -11- Page 3 the forced application of a credit liability created a situation where the scredit' recipients simply rerused to make repayments. There is a clew distinction between the- State' a role and the famar' a role in the distribution bf wnter, the former's role ending at outlet head, Water.. courast is, therefore, a camon asset of all. the farmers and the water is shared amongst the beneficiaries acCording to the wall established 'Wra Bandi' system. All the beneficiaries share the supply amongst themselves In proportion to the land holdings. There can be no fairee basis. There was complete consensus In the matbir of principle to be adopted for the sharing of development charges, It Is not true that the recipients refused to make repayments becasse of the forced application of a credit liability. There is a defined procedure for undertaking the lining of watercourame under the provisions of the Haryana Canal and Drainage Act - 1974, The beneficiaries are fully Involved in the process See the second of rcrmulation of schemes of watercourse lining, The reasons for non- footnote to recovery fro farmers were altogether different. Some of these have been para. 20 of recognised in para 802 of Project Completion Report (PCR), It is the PPAM. stated in this para that' Collotdng a severe drought and failure of the 1979 monsoon, it became apparant that many farmers paularly small holders, could not st their repayment obligations. 9gAMM, as mentioned In this para, Government -of Haryans considered that watercourse modernisation reselts in a substantial increase in irrigated area and water charge coll- ections, and also that under revised national policies for sUilar CAD marks in other states, farmers were not required to repay the full cost. Therefore, the inference drasn In paro-20 of the PPAR conflicts with the findings In pars 8.02 of Page-1l of pCR. The concluding statement in para 2a on page-6 of PPME that the widespread "refusals. ay, combined with the inherent inequities, inevitably made the issue pelXc-4LUy exploitable, is not factual. It has to be appreciated that the bene- ficieim have their own perceptions on the issue of recovery and this was carefully considered at the level of the State Goverment and adjust- ments in the policy were made keeping in view the legitimate aspirations af th1#9ople. Parp 21 of the PPAM 7, The observation that the absence of credit repayment led to cash flow problems for HSRITC, which failed to meet the repayment commitments to banks and ARC aith the not effect that HSMITC access to finance was reduced with its consequence inability to develop more than " of the target area is nt conaldtant with actual performance. Reference to Table-1 will indicate that the physical achievement See the footnotein respect of watercourse modernisation was 59 In gravity area dad to para. 21 of B% In Pamp Lift areas and that financial achievement was 6* in the PPAM. gravity area and 13?% in pump lift areas, he credit repayment problem of MSMITC was taken care of by GON providing financial support to the Corpcration to meet its obligations throughout the project period. It has been recognised on Page-6 ef PCR In para 3.Q4 that at the I beginning of the project period there were delays in start-up and pace of the iaplementation was slow due to ths following reasons- a) required sanctions from RDC (now NAHARD) and b) shortage of cement due to reduced factory production an account of drought and resulting power cuts. In view of these constraints, it was agreed to scale down the target of this component to 6,100 km (20 Rft)* Upon completion, 5,460 km (17.9 R ft) of watercourses have been lined (9c% of the modified target). The achievements should be view against these modified targets. assacumue -12- Page 4 Water Supplies - Cost Recovery Paras 2 A B Lit PPm Findings in paras.24 ti 28 regarding cast recovery of water This comment supply are in conformity with our vieus, Ue suppwt the finding that Thipts me there is little norit In the Bank's insistence on Imposition of' soe supports the sort of water charges on the beneficiaries.- It Is a fact that most of audit findings. beneficiaries belong to the poorest sections of secety - those ato are landles or who have small holdings, already subject to substantial. direct and Indirect taxation. DEMs finding that sound justification for the n*'a attempt to recever SIR charges from beneficiaries me missing in this case could be useual in preparing future projects of a similar nature, Water Charge Methodology teas 29 tAk 33 of PPAM The finding relating to water charge methodology of collecting mater and water-related charges in modernized irrigation projects, with This coument special ephasis an volumstric water pricing, are of particular Inteest also supports becae these are in conformity with ouw stand en the subject. The the viewpoint issue of crop based water charges levoy has great merits as indicated expressed in in the Report. This system allows for the proportionate costs of te A different crops to follow patterns similar to those that would ccur under water management systems. Since the charge rates per hectare are as easily adjusted as rates f or volumetric units, the latter has no advantage ever the formers Para 34 to 36 of PPAR Rgwal oveloment CmnansA The Report has raised the question as to why the provision of roads, markets and water supply ws included in the project, Apart from what Lacme has been stated in the reportlef the benefits from this village water supply component ha are listed belobg- a) Improvement in general health ef the pacple,after getting The audit agrees safe drinking water and hygienic that these components provided significant b) Reducing of water borne diseases like Cholera, Diarrhoea, benefits. Dysentry and Guines worm infestation in the vilAage by providing safe drinking water, c) Saving of time, especially of the woman-folk, which was earlier matel in brizing water from a distance and the corresponding utilisation of time thus saved in day-to-day agricultural activities., d) Improvement in living standard and sacio-sconomic status of the people. Para 3.4 a? PCR states that the Irrigation Department has installed 5 automatic kilne to make tiles in order to improve the quality asnal lining. This is factually Incorrect. No such kiln has been installed. There was a suggestion in the Appraisal Report of Haryana Irrigation Phase-II Project that such kiins be installed. GG0 examined the matter in great detail and came to the conclusion that it is not necessary to install such kilns 'nd our views were conveyed to the Bank. It may be pointed out that bricks/tiles have no role to play to reduce the seepage. They are provided as a hard surface lining to Potect the under-lying sandwich layer of plaster which is the impervious barrier. There is no Justification for the use mechanised bricks at considerable additional expenditure. Attachment I -13- Page 5 Para 3.16 of PCR The f ollowing pinor correction* as detailed below may be ffctds- ~ mrvset ao. e Improvements Total Cost As par As par As par As par As par As pm Phase period report factuel Report factuel Report factuel I 1982-87 31 31 9 9 595.1 595.1 I 1988-92 40 40 il il 529.6 5291.6 III 1993-97 40 40 il 10 571.7 571.7 IV 1996-2002 31 31 10 il 514.6 514.6 142 142 41 41 3211.0 3211.0 -15- INDIA HARYANA IRRIGATION PROJECT (CREDIT NO. 843-IN) PROJECT COMPLETION REPORT May 30, 1984 Irrigation II South Asia Projects Department -17 - INDIA HARYANA IRRIGATION PROJECT PROJECT COMPLETION REPORT I. INTRODUCTION Background 1.01 Haryana covers an area of about 4.4 M ha, of which 3.9 X ha is arable. Of this, about 3.6 H ha or 92% (the total of two seasons) is sown with crops, and the balance remains fallow mainly due to lack of water. About 75% of the arable area totaling some 2.9 N ha of cultivable command area (CCA) is served by irrigation canals although only about 55% (the total of two seasons) of the CCA is actually irrigated from surface water in a year because of insufficient water supplies available for the canal systems. Haryana farmers are generally progressive, as indicated by the high levels of fertilizer use in the state and the high percentage of area of major crops sown in high-yielding varieties. Yields of most major crops, therefore, are high and average foodgrain yields in Haryana are some 30-40% higher than the all-India average. The present cropping intensity in Haryana is estimated overall at 140-145%. As a result of the increase in agricultural production, the state, which had a deficit in foodgrains before 1966, now has a surplus in foodgrains. In 1980/81, Haryana contributed about -.7 N tons (out of total production of 6.1 N tons) of wheat and rice to the GOI foodgrain procurement pool. 1.02 In spite of rapid progress made in agriculture, the state is con- strained by limited availability of agricultural lands that can be served by gravity canals, and especially by lack of surface water and groundwater resources for further agricultural and irrigation development. Therefore, the main potential source of agricultural growth depends upon the better use of available irrigation water, increase in cropping intensity, and applica- tion of modern farm technology to raise yields per unit of area and produc- tion per unit of water. Improvement in the efficiency and performance of canal irrigation is an essential requirement for continued agricultural growth in the state, and was the primary objective of the project. 1.03 Surface irrigation in Haryana comprises mainly Bhakra and Western Yamuna Canal (WYC) systems covering much of the state. The CCA served by the various canal systems in Haryana and the net area irrigated by each averaged over the last five years a total of some 2.9 M ha and 1.6 M ha, respectively. - 18 - Canal Percentage Percentage of State Systen CCA of CCA Irrigated Area Irrigated Area (ha) (ha) Bbakra 1,166,000 40 871,000 53 WYC 1,085,000 37 652,000 40 Jui Lift 30,000 1 12,000 1 Sewani Lift 72,000 2 14,000 1 Loharu Lift 125,000 4 11,000 1 JLN Lift 227,000 8 18,000 1 Agra 61,000 2 32,000 2 Gurgaon 131,000 6 15,000 1 Total 2,897,000 100 1,625,000 100 1.04 Groundwater development in Haryana has progressed rapidly in the last fifteen years, particularly in the private sector. Currently about 223,000 private shallow tubewells, 34,500 open wells with pump sets, and 1,560 public direct irrigation tubewells serve about 1.4 H ha. Bank Group support has been available for private tubewell development through the Haryana Agricul- tural Credit Project (Cr. 249-IN), which was fully disbursed in the early 1970s, and also through the nationwide Agricultural Refinance and Development Corporation (ARDC) Projects (Cr. 540-IN, Cr. 715-IN, Cr. 947-IN, and Cr. 1209-IN, Ln. 2995-IN). Present utilization of fresh (high to marginal quality) groundwater is estimated statewide at about 64% of average recharge, but in certain fresh groundwater areas, resources are more highly committed (Table 2). However, there still remains considerable scope for public sector development in some areas of fresh and marginal groundwater quality, and in brackish water areas provided the lower quality brackish groundwater can be diluted with canal water supplies. Groundwater will be developed under the second stage of Haryana Irrigation Project (Haryana II) to augment canal water supplies in several areas where uncommitted groundwater supplies are available. 1.05 In 1982, GOI requested IDA assistance to finance the second four-year time slice of the project (Haryana II). Earyana II is to further expand the work initiated in Haryana I. Haryana II was appraised in May 1982 and approved in January 1983 (Cr. 1319-IN; US$150 K) as a follow-on project to Haryana I. Identification. Preparation, and Appraisal 1.06 The project was identified in conjunction with the Sutlej Yamuna Link Canal project which did not materialize due to interstate problems. Project preparation of the project was carried out in 1977 jointly by the GOH and FAO/World Bank Cooperative Program and assisted by the project preparation group in the Central Water Commission (CWC), GOI. The project was appraised by the Bank in December 1977. Negotiations were held in Washington in June 1978. It was presented to the board on August 10, 1978 and approved without any questions. - 19 - II. THE PROJECT AT APPRAISAL The Project Area 2.01 The project area covers the two major irrigation systems in Haryana (Bhakra and WYC) totaling nearly 2.3 H ha. There are about 555,000 farm families with an average farm size of about 4 ha. About 31% of farms in the Bhakra command and 42% in the WYC are less than 1 ha in size and cover about 4% of the area. Tenancy arrangements are infrequent since over 90% of the land is cultivated by the owners. Cropping intensity at appraisal was estimated at 118% in Bhakra with 76% of the cropped area irrigated, and 136% in WYC with about 66% of the cropped area irrigated. Project Objectives 2.02 The objectives of the project were: (a) To reduce seepage losses in canals, simplify their maintenance, and assist in control of water table in saline groundwater areas; (b) To improve operation by modernizing the canal structures; Cc) To decrease water losses in watercourses and to minimize inequities in its distribution; Cd) To supplement surface water supplies with groundwater, improve its reliability, and facilitate drainage; (e) To provide additional rural markets; Cf) To provide all weather access roads to villages to facilitate the transport of agricultural produce to the markets; and (g) to provide safe drinking water in the rural areas. Project Description 2.03 The project included the following components: (a) Modernization of canals: lining of about 23.2 N=2 of canal wetted surface (equivalent to about 2,900 km of branch canals, dis- tributaries, and minor canals) and improvement to canal structures; (b) Modernization of watercourses: lining of about 9,500 ka (31 M ft) length of watercourse channel on about 2,100 watercourses serving some 250,000 ha; %c) Augmentation tubewells (ATWs): construction of about 325 deep tubewells (about 1.75 cusecs each) together with necessary link channels to connect the wells to the surface water canal systems; (d) Jui Lift Irrigation Command Area: construction and lining of about 550 km (1.8 M ft) length of watercourse channel on 132 watercourses serving some 20,000 ha; land leveling of about 12,000 ha; - 20 - (e) Construction of 22 new and improvement of 4 produce markets; (f) Construction of 1,322 km of village link roads and provision of hard shoulders for about 70 kin of existing roads; (g) Construction of 52 water supply schemes to serve about 175 villages; and (h) Technical assistance to support project monitoring, evaluation, and construction of applied research and development works. Cost Estimate 2.04 Total project cost was estimated at US$222 H with a foreign exchange component of US$29.7 M or 13% of the total as follows: Foreign Items Local Exchange Total (US$ M) Modernization of canals 43.0 7.1 50.1 Modernization of watercourses 42.4 5.5 47.9 Augmentation tubewells 9.7 2.8 12.5 Jui Lift Command 3.3 0.5 3.8 Markets 16.7 3.5 20.2 Village roads 14.1 3.0 17.1 Village water supply 6.7 1.5 8.2 TA and R&D 6.4 - 0.4 Engineering & supervision 17.3 - 17.3 Base project cost 153.6 23.9 177.5 Physical contingencies 11.6 1.6 13.2 Price contingencies 27.1 4.2 31.3 Total project cost 192.3 29.7 222.0 Financing 2.05 The IDA credit of US$111 M amounted to 50% of the total project cost and was to finance 100% of the foreign exchange cost and 42% of the local cost. GOR/GOI was to contribute the balance (US$111 M) through annual budgetary appropriations. The credit was expected to be disbursed by March 31, 1983, about eight months after project completion. Procurement 2.06 No major equipment items were to be procured as existing machinery was adequate with normal expansion and replacement. Field vehicles and most equipment for ATWs and village water suppl- schemes were dependent on exist- ing servicing facilities. Construction of smaller works involving labor intensive construction methods was to be through local competitive bidding (LCB). Force account work was to be limited to a maxim-m of 10% of all civil works. - 21 - Implementation Organization 2.07 The implementation of the project was to take four years (July 1978 June 1982). Implementation of canal lining works was the responsibility of the Irrigation Department (ID). The public sector Haryana State Minor Irrigation (Tubewells) Corporation (BMITC) had responsibility for water- course lining and augmentation tubewells. Other components and the agencies responsible were: land leveling by Command Area Development Authority (CADA); village water supply by the Public Health (PH) branch of the Public Works Department (PWD); village access roads by Bridges and Roads (B&R) branch of PND; and agricultural markets by the State Agricultural Marketing Board and individual market committees. Benefits 2.08 It was anticipated that at full development (1985), the incremental production resulting from the project would be about 310,000 tons of foodgrains and about 26,000 tons of pulses. Farm employment was to increase by about 17 M man-days a year in Bhakra Canal Command and 4 H man-days a year in WYC command. The project was to generate about 62 H man-days of construc- tion employment over a four-year period. The economic rate return for the project as a whole was estimated at 32%. III. PROJECT IMPLEMENTATION General 3.01 The project made a good start by GOR mobilizing resources and staff for the project implementation. Implementation organization was created promptly with full supporting staff. Progress on most project components was satisfactory (Table 1). All physical appraisal targets were met by February 28, 1983, except for watercourse lining, markets, and land leveling, which were financed as credit items. These components suffered start-up delays while ARDC was working out a methodology for sanctioning of credit for each subproject. In the case of watercourse lining and markets, no construc- tion was done during the first 4-6 months of the project, putting these components behind schedule from the start. Subsequent shortages of cement and coal further delayed implementation. Physical Works 3.02 Modernization of Canals. The project provided for modernization of about 33% or 2,900 km of Haryana's canal irrigation network, which extends for about 8,910 km (excluding lift irrigation areas). In the early stages, the lack of burnt clay tiles used for lining necessitated a change from single-layer tile to precast cement concrete (or single brick, which were easily available from private kilns). At appraisal, it was agreed to line mainly existing canals rather than construct new lined canals parallel to the original earth channels. However, some new channels like Fatehabad and Rori branches had to be constructed as new parallel channels due to operational problems. It was suggested at appraisal that channels of up to 2,000 cusec capacity be lined with single-layer tile and that, for over 2,000 cusecs, a -22- double-layer tile be used on canal sides and a single-layer tile in the bed. For a newly constructed Fatehabad parallel canal, double-layer tile lining was done in bed and side, though its capacity is 1,800 cusecs. The lining was done in existing channels during normal canal operational closures of about 16 days, during which strict quality control was maintained, and the overall resulting lining is excellent. At the close of the project 24.59 Ni2 (265 M ft2) or 106% of Lining was completed as follow: Completion 1979 1980 1981 1982 February 1983 (H ftzT Appraisal target 50.81 114.36 184.00 250.00 Project achievement 38.63 98.43 173.64 240.00 265.00 The actual costs at constant 1982/83 prices, which include contingencies, of canal lining per 100 ft2 was about Rs 388 as against appraisal estimate of Rs 292 (table 6). This higher cost of about 33% is attributed to increase in labor cost and sharp increases in the cost of cement, coal, and tiles. 3.03 Modernization of Watercourses. At appraisal, GOR had an ongoing program of lining watercourses. About 1,200 watercourses were partly lined for about 55% of the channel length. The unfinished portion of ongoing schemes was to be completed under the project and an additional 2,100 water- courses were to be lined. The total length of the watercourses to be lined was estimated at 9,500 km. Work was to be subcontracted by HSMITC. Benefit- ting farmers were to be lent the funds through the Agricultural Refinance Development Corporation (ARDC) to pay for the works. 3.04 At the Zginning of the project, there were delays in start-up and pace of implementaL.n was slow due to the following reasons: (a) required sanctions from the ARDC 1, and (b) shortages of cement due to reduced factory production on account of drought and resulting power cuts. Consequently, it was agreed to scale down the target for this component to 6,100 km (20 M ft). Upon completion 5,460 km (17.9 M ft) of watercourses had been lined (90% of the modified target). The actual physical achievements as against the appraisal targets are as follows: IJ The alignment of a watercourse is defined by law and once registered, the common channels within a chak are designated "sanctioned" watercour- ses. -23- February 1983 1979 1980 1981 1982 Completion (H ft) Appraisal target 6.15 13.58 22.29 31.00 Revised target 0.82 8.25 19.42 31.00 Amended revised target - - - 18.70 20.00 a/ Actual achievement 0.39 5.49 11.11 16.43 17.87 La Projects targets were revised to 18.7 N ft for 1982 and to complete 20.0 M ft at completion. The actual cost at constant 1982/83 prices of watercourse lining per linear foot was Rs 24.28 as against Rs 22.85 projected at appraisal (table 6). The main reasons for the higher cost (about 6%) are increases in labor cost and increases in the cost of cement and bricks. 3.05 Angmentation Tubewells (ATW). The project provided for construction of 325 ATVs in a period of four years. The ATVs were constructed in groups to reduce the cost of electric power supply under schemes formulated to obtain ARDC refinance. The schemes needed ARDC approval and the acquisition of land for construction of link channels cnased initial delays in start-up. Thirty-eight ATWs in Narwani Branch Canal areas could not be implemented due to farmers opposition. The canal irrigation facilities in the area were insufficient and the farmers of the area opposed the scheme as this would have meant transporting their limited water to other areas . In several cases, farmers opposed construction of link channels in their areas, as this would have divided their holdings in two. The ATWs' average capacity was 1.75 cusecs. The depth of wells varied from 107 m to 165 m, and they were spaced at about 457 m. The initial delay in the energization of ATVs and private loads from power lines meant for ATVs were eventually overcome, and all ATWs developed were energized by the time the project was closed. The following table summarizes the actual implementation versus the appraisal estimates: 1979 1980 1981 1982 February 1983 Appraisal target 80 160 240 325 Actual achievement 2 56 117 198 287 The average cost at constant 1982/83 prices of each tubewell was Rs 0.36 M against the appraisal estimates of Rs 0.42 M (table 6). The cost of elec- trification was about Rs 0.065 per well against appraisal estimate of Rs 0.15 M per well. 3.06 Jui Lift Irrigation Command. The project was to assist development of agriculture in pump-lift command areas through the construction and lining 1.8 M ft (550 km) of watercourses and land leveling on 12,000 ha. Land leveling took a long time to start and progress remained slow because most farmers preferred to use their own resources for land leveling rather than institutional credit. It was undertaken by government agencies like Baryana - 24 - Land Reclamation and Development Corporation (ELRDC) and Haryana Agro-Industries Corporation (HAIC). Most of the land leveled was in the slope group of 0.5% to 1%. 1/ Because of these difficulties, targets were scaled down to 1,675 ha, and, against this, only 1,606 ha were eventually leveled. A three-year drought eroded farmers already limited reserves, and they were unsure of water availability in newly constructed channels. Several demonstration plots were set up jointly by CADA and the soil conser- vation wing to show farmers the benefits that accrue from land leveling. However, farmer response to land leveling was not encouraging. Owing to their poor response, this component was not included in the Haryana II Project. 3.07 Upon completion, the project had constructed and lined 1.55 M ft of watercourses against the appraisal target of 1.8 M ft serving about 20,000 ha in the command. Implementation was carried out by HSMITC. The table below compares the actual physical achievement with the appraisal targets. 1979 1980 1981 1982 Completion (M ft) Appraisal 0.68 1.23 1.80 Revised appraisal target - 0.24 0.65 1.30 1.65 Actual achievement - 0.14 0.64 1.38 1.55 3.08 Agricultural Markets. The project provided for setting up 22 new markets and improving four existing ones (the later was reduced to three when an additional new one was built elsewhere). Work was carried out by the construction wing of the Haryana State Agricultural Marketing Board (HSAMB). Due to lack of staff, progress was slow, and no construction was done during the first six months of the project. Con-equently, construction of 11 markets was entrusted to the Bridges and Roads branch of the Public Works Department (PWD), and the pace of implementation improved considerably. However, delays continued in some areas due to difficulties in acquiring land, requests for revised proposals for the location of the market yards, and shortages of cement (25% of requirement) and bitumen (50%). To reduce consumption of cement, specification for cement concrete floors was changed from 15 cm to 10 cm by increasing the thickness of the subbase of stone metal from 10 cm to 20 cm. By the project closing date, 16 markets were made operational at a cost of Rs 156.4 M against the appraisal estimate of Rs 234.3 M. However, the balance of the work is continuing, and all 26 should be operational by June 1984. The work is being carried out by HSAMB partly with its own resources and partly with credit from the National Bank for Agriculture and Rural Development (NABARD), the successor agency to ARDC. 3.09 Village Link Roads. To facilitate the transport of produce to market, the project included construction of 1,322 km of village link roads, and provision of hard shoulders on 70 km of existing roads. The B&R branch of PHD through its regular operational circle executed tie work according to India Road Congress standards. There were no start-up problems; progress 1 A survey conducted revealed that only slope groups between 0.5% to 1% and 1% to 3% required leveling to attain an irrigation intensity of 62%. - 25- was ahead of target all along, and physical targets were achieved long before completion date. The project constructed 1,450 km of roads and 70 km of hard shoulders on existing roads, exceeding the SAR proposal by 10%. The follow- ing table shows the actual achievement against the appraisal target. 1979 1980 1981 1982 Completion (km) Appraisal target 270 583 919 1,322 Actual achievement 256 805 1,166 1,394 1,450 3.10 Village Water Supply. The project included water supply schemes to serve about 175 villages. Irrigation canals were the source of water in 41 schemes, and tubewells in the remaining 11. The canal-based schemes originally had 12-day storage capacity, which proved inadequate and had to be increased to 27 days because interruption in canal supply can last that long. Due to prolonged power failures, it was necessary to provide standby diesel generators on all schemes. For execution, one additional circle with four divisions was established in the Public Health branch (PH) of PWD; they executed 35 schemes. The remainder were executed under the existing circles. 3.11 The provision of safe drinking water to the villages had a tremendous positive impact on the rural population. The program has been expanded to cover 350 villages, the 178 actually completed, and 172 more which are at various stages of completion or yet to be started. The remaining work on these water supply schemes will be completed by the Public Health branch of PWD under the state budget. 3.12 Due to shortages of cement, the construction of raw storage water tanks and overhead service reservoirs lagged, delaying the commissioning of the water supply schemes. Nevertheless, the original target (175) was exceeded, as summarized in the following table: 1983 1979 1980 1981 1982 Completion -------(No. of villages)- --- Appraisal target - 60 110 175 Actual achievement 20 67 112 149 178 The total cost at constant 1982/83 prices of this component was Rs 185.12 M against Rs 126.32 M estimated at appraisal (table 6). The higher cost (about 44%) resulted mainly from the need to provide standby diesel sets and to increase water shortage capacity for schemes supplied by canals. Design and quality Standards 3.13 Design and quality standards were adequate. During the coal shortage, some precast concrete-slab canal lining was used in place of clay tiles (coal was used to make the burnt clay tiles used in canal lining). In addition, since removal of the cement supply constraint, lining with two layers of cement plaster has been adopted. Several tests were made to - 26 - replace the impervious plaster layer with a polythene membrane. This tech- nology is undergoing further tests before adoption on a large scale. 3.14 Quality of the works remained good throughout the project. Although canal lining was done in existing channels during normal operational canal closures of about 16 days duration, strict quality control was maintained, and the resulting lining is excellent. To improve the quality of canal lining tiles, ID has installed five automatic kilns to make tiles. Both ID and ESMITC established Monitoring and Evaluation cells under the Haryana I Project. These units, although requiring considerable time to develop, played a key role in gathering and analyzing data regarding quality control. Special Studies Undertaken 3.15 Statewide Sector of Drinking Water Supply. A study conducted under the project gave the status of water supply and sanitation in the state and outlined goals to be achieved by the end of the International Drinking Water and Supply Decade (1981-1990). The service goals to be achieved are: to provide 100% of urban population with drinking water; 100% rural population with basic minimum need of safe water supply of 45 liters per capita per day; 80Z of urban population with either sewage system or sanitary toilets; and 25Z of rural population with sanitary toilets. Water supplies in urban areas should be metered and the tariff systen should be modified to make the systen economically self-supporting. The main obstacle remains the magnitude of investment needed and the state is trying to get central assistance and increase the budget provision in the next Five-Year Plan. The study also suggested that GOR consider setting up an autonomous board for construction and operation of water supply schemes in urban areas. The modification for tariff is also under consideration. 3.16 Updated Master Plan for Market Development prescribes the building of 142 new rural markets and improvement of 41 existing ones over a 20-year period. Markets are to b, divided into five categories. Phasing would be as follows: Agricultural Market Development Plan No. of Phases Period New Markets Improvement Total Cost (Rs M) I 1982-1987 31 9 595.1 II 1988-1992 40 11 529.6 III 1993-1997 40 11 571.7 IV 1998-2002 31 10 514.6 Total 142 41 3,211.0 3.17 A statewide review of alternative methods of collecting water and water-related charges in modernized irrigation projects, with special emphasis on volumetric pricing, was carried out by the National Council of Applied Economic Research (NCAER). Among their suggestions were that water charges should be worked out on the quantity of water supplied per crop - 27 - period on the basis of working expenses; time-based water charge system should be introduced in phases; channels when flowing should run full supply; minimum days of flows for each outlet should be ensured; and water rates for unit quantity should be reviewed periodically. A volumetric charge system 1/ was tried on one distributary in Haryana and has now been extended to six channels serving 105 outlets and covering 20,000 ha. Project Cost 3.18 Project cost as estimated at aupraisal is compared below with actual expenditures: Actual Actual Physical A. Schemes financed through as of Achievements as COR budget Appraisal Feb 1983 Z of Appraisal (Rs M) Modernization of canals 586.0 874.0 106 Village water supply 100.0 164.8 102 Village link roads 208.6 204.0 110 Subtotal 859.2 1,242.8 B. Schemes financed through institutional credit Modernization of watercourses 583.6 389.9 58 Augmentation tubewells 147.7 106.2 88 Markets 234.3 156.4 73 Jui lift command 44.8 43.6 86 Subtotal 1,010.4 696.1 C. Technical assistance and applied R&D 3.5 1.8 Total 1,909.1 1,940.7 A detailed breakdown of the actual project expenditures by years against the appraisal estimate is presented in table 2. The main reasons for the cost differences between actual expenditure and appraisal estimates are explained in paras 3.02, 3.04, 3.05, 3.06, 3.08, and 3.12. The comparison of costs actually experienced during project implementation and appraisal estimates is summarized in table 6. / It is known as "warimetric" system where the farmers pay for water according to the amount of time they actually receive water, or more simply, the number of irrigations they receive. - 28 - 3.19 Credit funds were reallocated, with IDA approval, in response to circumstances that arose during the disbursement period. The market comr ponent will be completed by GOR using readily available market-committee funds. Disbursement 3.20 Inspite of initial delay in start-up on some of the components, the actual disbursement at the end of the first fiscal year of project implemen- tation was more than the appraisal estimates. The disbursement at the end of the second and third fiscal years were about 95Z of the appraisal estimates and credit was fully disbursed by April 1983, compared with the credit clos- ing date was August 1983. Table 3 summarizes disbursements by accumulated actuals semester-wise from fiscal year 1979 to 1983. Compliance with Covenants (Annex 1) 3.21 Except for initial delays in appointing a financial advisor in HSMITC, a staffing the Monitoring unit in the ID, a technical cell in CADA, and establishing a Technical Review Unit in the Public Health branch of PWD, GOR has complied with the important covenants (Annex 1). IV. INSTITUTIONAL PERFORMANCE 4.01 As the project had many components and had to be executed by various GOH agencies (para 2.07), a state-level coordination committee of various agency heads who reported to the financial commissioner and secretary of the Irrigation Department (ID) of GOR was set up. The ID was the lead agency for the project, which was supervised and managed by a chief engineer. These arrangements worked out satisfactorily. 4.02 The ID was also responsible for canal lining, and it created for this a chief engineer post that supervised six circles. A Monitoring, Evaluation and Applied Development unit (MEAD), headed by a superintending engineer was also set up. This unit took a long time getting started due to lack of staff, but it eventually collected and evaluated useful data. 4.03 The HSMITC was responsible for watercourse lining and augmentation of tubewells. The number of circles varied from five to nine. It got into serious financial difficulty primarily due to the postponement of recovery for watercourse lining from farmers, and it defaulted on loan repayments to banks. It lacked sufficient living quarters for staff, and as most originally came from the ID, there was reluctance to continue with HSMITC for this reason, forcing HSMITC to recruit outside ID. HSMITC created a Manage- ment Information unit and a MEAD unit like the one established in the ID, which also took a long time in start-up due to lack of staff in disciplines other than engineering. Achievement on watercourse lining was low because of a long start-up period, material shortages, and cash flow and liquidity constraints. The Bank's supervision mission pointed out in May 1982 that HSMITC was working far below its implementation capacity. Consequently, two construction circles were eliminated in 1982. - 29 - 4.04 The Haryana State Agricultural Marketing Board (HSEAB) handled the development and improvement of agricultural markets. Although it maintained a technically competent construction wing, the staff could not cope with the construction of 26 markets. Hence, 11 markets were transferred to B&R branch of the PWD, which was fully staffed to take up such works. 4.05 The B&R branch of PWD was responsible for the design and construction of roads and it was adequately staff to undertake the project. 4.06 The Public Health branch of PWD was responsible for village water supplies. It required strengthening and had to create an additional circle with full supporting staff for field work. jJ One Technical Review Committee was established for developing the most cost-effective designs for water supply schemes. 4.07 The Command Area Development Authority (CADA), headed by an administrator, was set up by GOB to be responsible for on-farm development of the Jui Lift Irrigation Command Area. CADA was responsible for development of other pump lift areas as well. Land leveling achievement was low, but not because of faulty implementation (see para 3.06). A technical cell was created but took a long time to provide staff. Z/ Consequently, two construc- tion circles in CADA were eliminated, and its technical cell did not function effectively; thus agriculture and irrigation objectives could not fully be evaluated. Accounting and Auditing 4.08 The project organization's accounting system was considered adequate by IDA supervision missions. Auditing of the project office's accounts and financial statements was carried out by a resident audit officer, repre- senting the state accountant general. The accounts were audited annually. The audit reports submitted to IDA for each financial statement were generally delayed. In the case of HSMITC, however, the audited accounts were checked by independent auditors; the appointment of independent auditors was a lengthy procedure. The audits confirmed proper management of the funds allocated to the project. Monitoring and Evaluation 4.09 Monitoring, Evaluation and Applied Development units were set up in ID and HSMITC. These units have just recently been fully staffed, and only preliminary studies have been completed on the benefits from the various project components (paras 4.02 and 4.03). If The ID, B&R, and Public Health branches of PWD did not face difficulty in recruiting qualified staff. Although no training measures were visual- ized at appraisal, the ID did offer a two-week training course in modern irrigated agriculture. 2/ The posts of agronomist and agricultural economist remained vacant until the completion of the project. V. AGRICULTURAL IMPACT General 5.01 The project was designed to save water presently lost to seepage and augment canal supplies with groundwater, together adding at full development an estimated total of o e than 1,700 im3 to the present average annual supply of about 9,000 M of Bhakra and WYC water at the canalhead. In the event, water saved was over 90% of projections. In fact, these increased water supplies resulted in about 267,00C ha of added area irrigated (cf. 293,000 ha projected) which is the main benefit used in the economic analysis of the project. Modernization works have helped to substantially improve canal systems operation and management efficiency and has resulted in more reliable and timely water supplies to farmers. Expansion of Irrigated Area 5.02 Expansion of irrigated area was the main benefit from project invest- ments. Any water saved or added in the existing canal commands had a ready and productive use, because at present each farmer generally receives enough water to irrigate each season only a part of his irrigable land. Increases in agricultural production assumed under the project resulted from the increase in irrigated area, with benefits generally spread throughout the canal system CCAs. In the canal modernization work, present GOE policy is to maintain the same "design duty" of water (1 cfs per 168 ha) for sizing water- course outlets on any channel that is modernized, and to use water saved from lining that channel to increase water supplies available in the system as a whole. These additional supplies can then be rotated to various dis- tributaries more frequent!y, thus reducing the time period between irrigation supplied to individual farmers. Only at the watercourse level is water saved by lining used directly in the chak where it is saved. IJ Increase in irrigated area as a result of the project is given in table 4 and summarized as follows: J In practice, a substantial portion of the water saved from watercourse may be transferred back to the system "pool" when over-sized watercourse outlets are modernized (reduced) to meet design standards. -31 Bhakra West Yamuna Total Kharif Rabi Kharif Rabi Kharif Rabi Both (' 000 ha) A Appraisal Modernization of canals 53 61 16 18 69 79 148 Augmentation tubewells 3 39 1 5 4 44 48 Modernization of watercourses 16 38 9 20 25 58 83 Jui Lift Command (watercourses)- 6 8 6 8 14 Total 72 138 32 51 104 189 293 Actual Achievement .Lernization of canals 56 65 17 19 73 84 157 Augmentation tubewells 3 33 1 5 4 38 42 Modernization of watercourses 10 25 6 13 16 38 54 Jai Lift Command (watercourse) _- - 6 8 6 8 14 Total 69 123 30 45 99 168 267 The shortfalls in the implementation of modernization of watercourses and in the construction of tubewells apparently reduced the area irrigated by some 35,000 ha (29,000 ha in watercourses and 6,000 ha in 38 units of A1hs), but modernization of canals in excess of the target by 6%, added some 9,000 ha irrigated area to appraisal projections. Cropping Patterns and Areas 5.03 Survey data on the cropping situation are, at this stage, insuffi- cient largely because the project has been completed only recently. However, a basis for future evaluation of the project results has been created. The M&E unit, which was established under the project, has carried out a brief crop survey. Preliminary survey data currently available indicates that changes in crop patterns have occurred in areas where modernization works are complete. These data are, however, very tentative, and benefits assumed under the project are estimated on the basis of relatively small changes in crop patterns over the increased irrigated areas in the canal commands. For the project area as a whole, estimated crop area changes at full development are given in table 5. Crop Yields 5.04 Benefits under the project have been estimated by assuming that average yields for irrigated crcps as reported in the project area apply to the newly irrigated area as to the area that would have been irrigated without the project. For major crops, these yields are 3.5 t/ha for HYV paddy, 0.9 t/ha for bajra, and 1.2 t/ha for cotton, 2.4 t/ha for HYV wheat, 0.9 t/ha for gram and 0.7 t/ha fcr mustard (Table 5). These estimated figures are conservative, because some yield improvement due to more frequent and timely irrigations, using the same amount of water applied, can be expected as a result of modernization. Experimental crop research clearly - 32 - indicates a significant yield response to better-timed and more frequent irrigations for some crops. 5.05 Under field conditions, the typical practice of irrigation by Haryana farmers is to spread their available canal water supplies as thinly as pos- sible, with the objective of maximizing production per unit of water, which is generally the limiting factor in the operations. This is done partly through conscious action by the farmer when he decides each season how much land to sow for irrigation and partly through the rationing system inherent under the present operating procedures for the canal system. Operation of the canal system typically provides the farmer with water at a certain number of times during each season, say five to seven times in the rabi season. The farmer cannot predict very accurately or control the quantity or timing of water deliveries. Canal modernization works, combined with the GOK decision to keep saved water in the canal system as a whole, should increase the frequency of irrigation deliveries, and to some extent, result in better timed irrigation supplies, thereby reducing yield loss through water stress. For example, an approximate increase of 10% in water available in the system should increase the average system running days and nuber of irrigations supplied to wheat from, say, 3.0 to 3.3, which in effect would give about 302 of the farmers four irrigations while the remainder continue to receive three irrigations. Each irrigation in that range of water application is worth about 0.5 t/ha of wheat, which would mean a 20-25% increase in yield for the one-third of the farmers who received four irrigations, or an average yield increase of about 6% to 8% for all wheat growers. This effect could be expected, to some extent, almost automatically due to increased wat2? delivery frequency, with the same amount of water applied, and would be in combination with expanded area irrigated as a result of larger total water supplies. Part of this increase in yield would result from heavier use of fertilizer by farmers in response to more reliable and better-timed water deliveries. VI. ECONOMIC REEVALUATION Economic Rate of Return 6.01 The project-s economic rate of return (ERR) has been reestimated, taking into account the actual costs incurred, and a revised estimate of agricultural benefits arising from modernization of canals and watercourses and construction of ATWs. The focus of the analysis has been on direct production effects from modernized irrigation facilities. Important economic and social benefits of village water supply, rural roads, and modern market- ing facilities under the project have not been quantified. As compared with the appraisal estimates the ERR are summarized as follows: -33- Economic Rate of Return At Appraisal At PCR (Z) (Z) Modernization of canals 49 32 Modernization of watercourses 35 26 Augmentation tubewells 43 65 Jui Command 27 22 Overall project 32 25 As in the appraisal report, the reestimated overall project ERR includes the costs of rural water supply, roads, agricultural markets, and technical assistance, research, and development. The consolidated cost and benefit streams for the analysis are given in table 7. j/ The lower overall rate of return is mainly a result of higher expenditures per unit of work (33%) on the canal modernization component which accounts for 46% of total project costs. The changes in the ERR for irrigation components result mainly from chages in unit expenditure as given in table 6. VII. BANK PERFORMANCE Preparation and Appraisal 7.01 The Bank-s assistance in project preparation and formulation proved useful and the appraisal overall was well received. Appraisal estimates of implementation capacity were accurate for canal lining, augmentation tubewells, water s!pply schemes, and village roads. However, estimates proved somewhat optimistic for watercourse lining. Also, markets and land leveling components were not completed on schedule for reasons unrelated to implementation capacity, which could not be anticipated at appraisal. Implementation constraints encountered in Haryana I were resolved and were considered in the design of Haryana II. The overall design of the project as a composite for development of irrigated agriculture, improvements in village roads, marketing infrastructure, and provisions of safe water supply in rural areas has proved highly advantageous. Supervision 7.02 Bank supervision missions visited the project eight times, averaging once every six months. They helped early on with finalizing the design manual for modernization of watercourses and changes in specification for canal lining. Mission reviews of the first ten watercourses in Jui Lift Irrigation Command area and of the first five village water supply schemes were promptly done. The Bank also helped in sorting out the issues relating to financing of the project components requiring institutional credit. It i/ Details on the assumption for the economic reevaluation of the project are provided in the Haryana Irrigation II Project SAR of January 5, 1983. -34- took up with GOB the issues relating to the relief proposed by GOR to the farmers in recovering the cost of lining of watercourses. 7.03 During the later years of the project, the supervision missions were concerned primarily with reporting on project progress. The major issues raised repeatedly with the GOH pertained to: (i) strengthening the units of Monitoring and Evaluation within the ID and HSMITC; (ii) strengthening the technical cell in CAPA; and (iii) the slow progress on land leveling in Jui Lift Irrigation Command area. The project implementation authorities and the GOR reported that they found the missions cooperative and their suggestions helpful. VIII. ISSUES AD LESSONS LEARNED Watercourse Modernizations 8.01 As indicated in para 3.03, the program to modernize watercourses proved much slower in its implementation than anticipated. The main dif- ficulty was poor cost recovery from the farmers for the lining works done by HSMITC for farmers. Watercourse lining was undertaken with the assumption that the cost would be recovered from farmers. Watercourse costs were financed through loans to all farmers served by each watercourse. In prac- tice. loan funds were disbursed directly to HSKITC, which constructed the watercourses on behalf of the farmers served. GOH provided 20% of the cost as a state loan or equity contribution to HSMITC and the rest was financed through institutional credit to HSMITC refinanced by ARDC. The farmers were held individually responsible for repayment of the total cost of each water- course in proportion to their land-holding size, with repayments based on amortization over nine years at 10.5% interest, excluding one year of grace for the construction period. Watercourse maintenance work was the respon- sibility of ESMITC, paid for by the farmers th=ough an annual maintenance charge (2% of the watercourse capital cost) which was added to the loan amortization payment. Although, technically, farmers were the borrowers, RSMITC essentially acted as a credit intermediary. Billing to farmers for loan payment was done by HSMITC, but collection of farmer payments was done by GOH (which also guaranteed repayment of the lending bank's loan) through the Revenue Department, which handled nonpayment as arrears in land revenue.L1 lf The approach of lending to farmers to finance construction of such "com- munity" irrigation works was consistent with standard practice throughout India for CAD programs, including watercourse construction at the time Haryana I was appraised. However, the practice has since been modified because of the generally disappointing results obtained. The present practice is to complete watercourse construction down to the 5 to 8 ha block as part of the government system, with the cost financed through the state budget rather than through loans to farmers. - 35 - 8.02 Under this approach and at GOR initiative, 100% cost recovery for watercourse modernization was the aim. Prior to and early in Haryana I, repayment rates by farmers for watercourse modernization loans were high, exceeding 90%. However, following a severe drought and failure of the 1979 monsoon, it became apparent that many farmers, particularly small holders, would not be able to meet their repayment obligations. In addition, GOR considered that watercourse modernization results in a substantial increase in irrigated area and water charge collections, and also that under revised national policies for similar CAD works in other states, farmers were not required to repay the full cost. Furthermore, the procedures used appear to have encouraged controversy, in that farmers had to pay for the works in proportion to their land-holding size rather than the benefits actually received as a result of watercourse investments (unlike water charges that are levied according to area irrigated). More specifically, the farmers near the head of watercourse receive relatively less marginal benefit (incremental benefit) from the watercourse investments compared with the farmers in the tail areas. It is understandable that the farmers receiving less benefit per unit area are unwilling to pay the same fixed amount per ha for improvement of watercourses. Once a decision was made to improve a watercourse, the process was essentially involuntary for the farmers involved, who had little or no role in planning or implementing the works, and no option to refuse or modify such investments and loans "on their behalf." GOR therefore decided tj modify repayment requirements, eliminating repayment for farms of I ha or less and reducing repayment by 50% for farms larger than I ha. These arran- gements were intended to be consistent with revised norms for GOI-sponsored CAID programs. Consiaering all farm sizes together, repayment would average about 45% under this formula, with GOB providing the remaining 55% directly to HSMITC. Because of the sensitivity and controversy of this issue, GOE has not effectively enforced any repayment during the years 1980 and 1981, and made these modifications official only in February 1982; as a result, repay- ment rates during these two years were negligible. However, GOH has started implementing the new system in the 1982 kharif season and has also strengthened its efforts to recover arrears in repaymen-s. In general, farmers in the project area appear willing to repay following the above terms. 8.03 Under Haryana II, cost recovery for watercourse modernization works would be effected through the Revenue Department of GOR as a direct charge to benefitting farmers; and financing would be through GOB rather than loans to farmers. GOB would recover about 45% (50% from farm holdings of more than I ha, and nothing from small holders of 1 ha or less) of watercourse modern- ization costs from direct beneficiaries over a nine year period at 10.5% interest, plus an annual watercourse maintenance charge (3% of capital costs in Haryana II), as above. GOH would provide the remaining 55% and ensure that HSMITC receives financing adequate to undertake watercourse modern- ization works according to the project implementation schedule over the four-year project period. Performance of HSMITC 8.04 As indicated in para 8.02, enforcement by GOH of the repayment of the cost of watercourse lining was not effective. Furthermore, continued droughts during the years of 1980 and 1981 worsened the pace of recovery from -36- farmers. The amount of farmers' overdues to ISMITC to end of 1981 was Rs 77 M and rose to Rs 106 N by July 1982. This seriously affected the resource position of RSMITC and it defaulted in meeting its commitment of loan repay- ment to the lending banks. This also had an adverse effect on the progress of lining watercourses. The supervision mission reported in November 1982 that due to shortage of finances only 25% of implementation capacity was being utilized. In March 1983, GOH made funds available to RSHITC to meet its loan payment commitments to the commercial banks. Land Leveling 8.05 Haryana I provided for land leveling of about 12,000 ha in the Jui Lift Irrigation Command area. The supervision mission repeatedly pointed out the shortfall in implementation. The targets at appraisal were rather higher (to achieve the designed irrigation intensity of about 62% worked out to be 5,400 ha). The main reason for slow progress was that the farmers were not interested in getting loans for land leveling. The reasons were: (i) cunber- some procedures for advancing loans, and more importantly; (ii) uncertain water supply to Jui Canal. The physical targets for this component were scaled down to 1,675 ha, and actual achievement against this target was 1,600 ha. As a result of the experience gained during Baryana I, this component was excluded from Heryana II. Power Supply 8.06 Haryana is short of electric power and it will continue to be short fcr the forseeable future. The Central Electricity Authority estimated that the deficit in 1982-1983 reached into 230 MW. Because of the power shortage, the power supply to Jui Canal and other lift irrigation schemes will be affected adversely. This will result in uncertain water supply to farmers. The utility of ATVs will also be reduced due to shortages of power supply. GOR should undertake all measures to supply power to Jui Command area, as well as the operation of ATIs constructed under this project. - 37 - Table 1 INDIA HARYAN& IRRIGATION PROJECT Achievements Under Haryana Irrigation Project Appraisal Targets Projected Achievement of Target Project Physical Progress Progress by 2/28/83 Component Units Financial 3131/81 2128/83 Physical Financial (Rs M) (Rs H) (Rs H) (Z) (Z) Canal modernization 250 M ft2 586.0 702.0 874.0 106 149 Watercourse modern- ization Gravity areas 31.2 H rft 583.6 318.5 389.9 58 67 Pump-lift (Jai) 1.8 M rft 33.2 34.7 43.5 86 131 Augmentation tubewells Tubewells 325 unit 107.8 82.0 89.7 88 83 Electrification 326 unit 39.9 15.8 16.4 88 41 Land leveling 12,000 ha 11.6 0.1 0.2 14 2 Village water supply 175 villages 100.6 90.6 164.8 102 164 Village link roads 1,322 km 208.6 153.8 204.0 110 98 Agricultural markets 26 unit 234.3 93.2 156.4 73 67 Technical assistance - 3.5 2.5 1.8 - 50 Total 1,909.1 1,174.7 1,940.7 - 101 INDIA HARYANA IRRIGATION PROJECT Sumnary of Proiect Expenditures (Cumulative) (Re M) Appraisal Estiaat e Aclual Expenditures Proiect Component 1979 1980 1I1 1982 1M2 980 198-1 1982 1983 fg A. Schemes financed through GOH Budxet 1. Modernization of canals 106.0 240.00 407.00 586.00 113.50 332.40 535.15 745.20 874.00 2. Rural water supply 23.0 50.60 75.60 100.60 12.50 42.50 70.34 94.26 164.80 3. Rural roads 31.0 .50 135.50 2Q6 35.00 .34 135.20 163.00 204.00 Subtotal (A) 150.0 366.10 618.10 895.20 161.00 465.24 740.69 1002.46 1242.80 B. Schemes financed through institutional credit 4. hodernization of watercourses 103.80 237.70 405.10 583.60 12.50 97.72 221.10 343.76 389.88 5. Augmentation tubewells Tubewells 24.70 50.00 77.50 107.80 4.53 26.00 60.58 85.00 89.73 Electrification 9.00 18.50 28.90 39.90 - 3.00 10.96 16.79 16.42 6. Agricultural markets 49,60 102.30 160.30 234.30 12.00 32.15 54.47 102.85 156.40 7. Jui Lift Irrigation Command Construction of watercourses 12.70 22.50 33.20 33.20 - 2.92 12.12 37.57 43.48 Lnnd leveling 2.60 5.40 8.40 11.60 - 022 0.14 0.17 Subtotal (B) 202.40 436.40 703.40 1010.40 29.03 161.86 359.45 586.11 696.08 8. Technical assistance and applied research and development 0_83 1,73 2 3.50 - _-_ 1.5 TOTAL 353.23 804.23 1324.09 1909.10 190.03 627.10 1100.76 1590.32 1940.63 /==WW= EMndin Ferumaa 2MWMMW 198U3S .Nunn" Nftwa MIMUN" UMMON /I Ending February 28, 1983. -39- Table 3 INDIA BAREANA IRRIGATION PROJECT Actual and Estimated Schedule of Disbursements Disbursement as IDA Fiscal Year Apraisal Eetimate Actual % of Appraisal and Semester Semester Cumulative Cumulative (cumulative) (Us$ '000) 1979 First 1,000 1,000 Second 7,000 8,000 8,466 105.8 1980 First 10,000 18,000 18,837 104.6 Second 18,000 36,000 34,247 95.1 1981 First 14,500 50,500 47,615 94.3 Second 19,000 69,500 65,754 94.6 1982 First 14,000 83,500 74,833 89.6 Second 17,000 100,500 91,766 91.3 1983 First 10,500 111,000 99,313 89.5 Second 111,000 100.0 INDIA ARYANA IRRICATION PROJECT Chanzee in IrriRated Area Canal Hodernization Watercourme Hodernigation Aunmentation Tubevelle Total Bhekra, Wdt Yamuna Bhåka Wept Xauna Bhkra Went Yamuna åhåka knt oaauna hk A kh L uu h n kh n 19Jal & k kh ak kh a. D9ia Potential Nit CCA 764 933 1,697 360 146 506 38 10 48 1,166 1,085 2,251 '000 ha) Actual Area Irriaatad <'000 ha) (a. Before Haryana 260 306 224 327 1,117 122 148 35 51 356 - - - · - 384 454 259 378 1,473 (b) P.oject target 313 367 240 345 1,265 138 186 44 71 439 3 39 1 5 48 454 592 291 421 1,752 (c) Actual achievement I 313 367 240 345 1,265 132 173 41 64 410 3 33 1 5 42 448 573 282 414 1,717 Increage in /J. Irrigatad Area ('000 ha) (d) Project target 53 61 16 18 148 16 38 9 20 83 3 39 1 5 48 72 138 26 43 279 (6) (8) (14) (6) (8) (14) (e) Actual achievement 53 61 16 18 148 10 25 6 13 54 3 33 1 5 42 66 119 23 36 244 (c)-(a) (6) (8) (14) (6) (8) (14) I[rritatbon Intensity (M (M) Before Haryana 1 34 41 24 35 34 41 24 35 - - - - 33 39 24 35 Q) After Haryana 1 41 48 26 37 37 48 28 44 8 87 10 50 38 50 26 38 Difference 7 7 2 2 3 7 4 9 8 87 10 50 5 11 2 3 (g)-(f) L, Present situation. k Figur@@ in parentheses indicate the lift comand areas. kh - kharif ra - rabi 41 --Table 5 INDIA Haryana Irrigation Project Crop Yields and CroppinR Patterns Yjeldz Croppins Pattern / aryana I a/_PCR b/ Irritated Area Haryana I PCR Bhakars WC Ehakara WYC Kharif Paddy, RYV 3.5 3.5 2.8- 3.5 5.9 6.8 Paddy, Loc 2.8 2.8 3.3 3.7 1.1 2.0 Bajra, Hyb 1.4 0.9 4.1 5.9 5.1 7.7 Bajra, I.c 0.8 - - 1.1 - - Pulses 1.0 0.7 0.4 0.5 0.5 0.6 Maize 1.2 1.0 1.2 1.3 0.4 0.2 Cotton (Amer.) 1.2 1.2 8.5 0.5 14.2 4.4 Cotton (Loc) 0.8 0.8 7.4 1.1 7.7 2.6 Fodder (Sorghun) 32.5 32.0 5.3 6.4 2.1 1.7 Sub-total 33.0 24.0 38.0 26.0 Rabi Wheat (rYV) 2.5 2.4 14.1 14.3 24.4 24.3 Wheat (Loc) 2.0 1.8 6.5 1.5 2.8 1.5 Gram 1.0 0.9 9.7 5.9 7.6 3.5 Mustard 1.0 0.7 2.0 1.5 7.4 1.5 Barley 2.0 1.2 3.0 2.5 2.4 1.2 Sugarcane 45.0 40.0 2.0 5.8 3.4 4.0 Fodder (Berseem) 32.5 46.0 1.7 3.5 2.0 2.0 Sub-total 39.0 35.0 50.0 38.0 Irrigation 72.0 59.0 88.0 64.0 Intensity S/ RaiWed Area Kharif Bajra, HYTV 1.0 0.6 1.2 4.4 4.4 7.0 Bajra, Loc 0.6 0.4 14.2 21.3 20.2 28.1 Pulses 0.6 0.5 0.6 1.5 0.4 1.0 Maize 0.9 0.8 0.7 1.5 2.0 1.8 Fodder (Sorghum) 20.5 26.0 5.9 Y".0 6.0 9.3 Sub-total 22.6 39.7 33.0 47.0 Rabi Wheat, HV 1.5 - - 0.5 - - Wheat, Loc 1.0 1.1 0.5 3.0 1.8 2.0 Gram 0.6 0.6 7.6 13.3 10.3 15.3 Mastard 0.4 0.4 2.9 2.5 2.9 6.0 Barley 1.2 0.9 1.2 1.6 2.0 2.7 Sub-total 12.2 20.9 17.0 26.0 Rainfed Intensity 34.8 60.6 50.0 73.0 Total Cropping Intensity 106.8 119.6 138.0 137.0 al At the time of Haryana I appraisal. h/ Present situation. c/ The area irrigated by private tubewell is not included. INDIA HARYANA IRRICATION PROJECT Comoarimon of Proleot Costs and Physical Achievement. in Constant 1982/83 Prices La Comparison of Appraisal Repggt Prolect Comolation Renort Unl COlt L. Implied Iaplied Unit Actual (A:.1) * 10 Proefict component -Totaluts Physical Taritet cast Hatlate Toa Cot Physical Achievement Pgit goat P (Ras (5)TX (RsM) PR2) )1(0M A. Schemes Financed throush G0B Budget 1. Moderniatiosi of Canals 730.15 31 250 (H ft2) 2.92 1,029.32 46 265 (M ft2) 3.88 +33 2. Rural Water Supply 126.32 5 175 (Village) 0.72 185.12 8 178 (Village) 1.04 +44 3. Rural Road@ 246.37 11 1,322+70 L. (ka) 0.18 248.08 11 1,450+70 LLa (ka) 0.16 -11 Subtotal (A) 1,102.84 1,462.52 B, Schemes Financed throuih Institutional Credit 4. Modernization of Water Courses 708.21 30 31 (M ft) 22.85 433.89 .20 17.87 (H ft) 24.28 +6 5. Augmentation Tubevells 183.67 8 325 (Units) 0.57 121.10 5 287 (Units) 0.42 -26 6. Agricultural Harkets 288.06 12 22+4 LL (Units) 11.08 172.90 8 16+0 LA (Units) 10.81 P2 7. JuL Lift Irrigation 59.60 3 1.80 (H ft) 33.11 4,7_ 2 1.55 (N ft) 29.50 -11 Subtotal (B) 1,239.54 e s.o, 773.61 0.9 a.s a. 8. Technical Assistance 4 - .39 Total 2,346.77 100 2,237.94 100 LA The Indian Wholesale Price Index has been used to convert project current expenditures into constant 1982/83 prices as follovei 1976/79 0.62 1979/80 0.75 1980/81 0.92 1981/82 0.99 1982/83 1.00 [A - Appratestl report estimate of implied unit cost; P = Project completion report implied actual unit cost. 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A. Conditions Not Fully Comylied With Proiect Agreement Section 3.03 HSMITC shall implement Management plan has been by March 31, 1979 a management plan approved and is being satisfactory to IDA and (b) appoint by implemented; a financial December 31, 1978 a financial advisor. advisor was appointed as Section 3.09 GOR shall by January 31, per June 1980. 1979 establish (a) adequately staffed Action taken: W further W monitoring unit in the Irrigation strengthening required in Department and (ii) tecbnical cell in M&E unit in fill- CADA and (b) a technical review unit ir. vacancy of an Agronomist. the Public Health branch of PIWD. (ii) Joint Director, Agr. posted in technical cell in CADA. Further strength- ening in progress. (iii) Technical review unit established in Public Health Branch of FWD. B. Conditions Upon Which Action Peudinst Project Agreement Section 3.08 GOR shall complete and Study has been finalized by make available to IDA not later than the National Council of March 31, 1980 a state wide review of Applied Economic Research alternative methods of collecting water (NCAER). and water-related charges in modernized irrigation projects. C. Conditions Met Project Agreement Section 3.07 GOR shall prepare by Final report has been December 31, 1981, a statewide sector prepared and submitted to survey of drinking water supply. IDA for review. -45- ANNEX 1 Page 2 Section 3.10 GOK shall by December 31, IDA has approved design 1978 prepare and adopt manual for manual. carrying out Part B of project. Section 3.11 GOR shall cause HSAMB to RSAMB has updated the update by December 31, 1981, the Master Master Plan for markets. Plan for market development. Revision of Master Plan in progress to incorporate IDA consultant-s recommendation. Section 3.13 GOH shall carry out the GOH has formulated the water supply schemes after (c) the procedures for recovering Panchayat concerned has undertaken to the portion of the O&M cost contribute a portion of the annual O&M from the Panchayats. costs (b) said Panchayat has deposited such O&M costs for the first year of operation of the scheme. Section 2.05 (c) GOR shall prepare Project completion report project completion report promptly was prepared and submitted after completion of the project. to IDA on July 7, 1983 for review. Development Credit Agreement Schedule 1 Clause 4 No withdrawal of proceeds of the credit Designs for (b), (c), and shall be made in respect of payments (d) have been approved by made for: IDA through letters dated 8/16/78, 11/9/78, and (a) expenditures prior to the date 1/22/79, respectively. of this agreement. (b) expenditures for each of the first five village water supply schemes under Part G of the project until IDA has approved the design. (c) expenditures for each of the first five produce markets under Part E of the project until IDA has approved the design. (d) Expenditures for each of the first ten watercourses under Part D of the project until IDA has approved the design. .,―졈· ERD 13482 INDIA Js- IRRIGATION AND CAD PROJECT KxUrnh=thn J Carml Syster% Wlage ~ Supply Scheme4 jp and Axe~tation Tubewell Sch~~ m VO- Viator 5~ly schmmem (ca»[ sourem) ~ Imer- supmy scimmrek t~.~ Augmum~ V~ Sebu~ Am= ~ r b~ Gm Ruil-o C~ md Ta^ Dimice Bour~ -3C 3p, UJ .:.!!5 -C 0 MÄ. .1> b-ET- -COMM-ANDI 4. NER IFJDtRA GAKWH i COMMAN D-'_ JLN i R R l i N c 0 - mmA ID AGRA GUR 0 2r, Note: Th-s map s based on IIBRO 13482. March 1978 Insot bas been ew~ed e 0 F~ Jh4 0 per awroepp~ctgw nu w~fl~ ~fwe*w~fir- cb~ Pro~ ATW Sch~ ~~84 0~ m~= .W ~om ~Gr ~8.4 ~~ qdv~ Fä m al LOWER ed~ 9^ .VACh L RATM ~h CA~ 300 » 345 a k^ 9~/9~ w~N C~ *Vmw ffaw 79011~ ca~ 150 w 190 s vm 8~ CANAU NÅ~ ~ CA~ 75 MM NUKM OF M~r~TODU TUK«L&S FEBRUARY1985