Romania - Irrigation Projects

Document of The World Bank FOR oMCIAL USE ONLY MICROFICHE COPY Report No. 10224-RO Type: (PPR) ROport NO 10224 DUANE, P. / X31753 / T9 049/ OEDD1 PROJECT PERFORMANCE AUDIT REPORT ROMANIA MOSTISTEA AND CALMATUI IRRIGATION AND DRAINAGE PROJECT (LOAN 1670-RO), COVURLUI IRRIGATION PROJECT (LOAN 1795-RO), BUCSANI-BUZAU-SIRET-PRUT (BBSP) IRRIGATION PROJECT (LOAN 1938-RO), AND CARA"AL-TITU IRRIGATION PROJECT (LOAN 1971-RO) DECEMBER 30, 1991 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. List of Acronyms BAFI - Bank for Agriculture and Food Industry CAP - Agricultural Production Cooperative DIFCA - Department of Land Reclamation and Agricultural Construction EMENA - Europe, Middle East, North Africa GDP - Gross Domestic Product IAS - State Agricultural Enterprise IC.R - International Competitive Bidding IMF - International Monetary Fund ISPIF - Institute for Land Reclamation Studies and Design MAFI - Ministry for Agriculture and Food Industry OED - Operations Evaluation Department PCR - Project Completion Report PPAR - Project Performance Audit Report SAR - Staff Appraisal Report SMA - Station for Agricultural Machinery Fiscal Year of Borrower: Jaruary 1 to December 31 Currency Name (abbrev.): lei (lei) FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. fiae of Director-General )perations Evaluation December 30, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Performance Audit Report on Romania Mostistea and Calmatui Irrigation and Drainage Project (Loan 1670-RO), Covurlui Irrigation Project (Loan 1795-RO), Buceani-Buzau-Siret-Prut (BBSP) Irrigation Project (Loan 1938-RO), and Caracal-Titu Irrigation Project (Loan 1971-RO) Attached, for information, is a copy of a report entitled '"Project Performance Audit Report on Romania: Mostistea and Calmatui Irrigation and Drainage Project (Loan 1670-RO), Covurlui Irrigation Project (Loan 1795-RO), Buceani-Buzau-Siret-Prut (BBSP) Irrigation Project (Loan 1938-RO), and Caracal-Titu Irrigation Project (Loan 1971-RO)" prepared by the Operations Rvaluation Department. Attachment 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. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT ROMANIA MOSTISTEA AND CALMATUI IRRIGATION AND DRAINAGE PROJECT (LOAN 1670-RO), COVURLUI IRRIGATION PROJECT (LOAN 1795-RO), BUCSANI-BUZAU-SIRET-PRUT (BBSP) IRRIGATION PROJECT (LOAN 1938-RO), and CARACAL-TITU IRRIGATION PROJECT (LOAN 1971-RO) Table of Contents Page No. Preface . . . . . . ...................... . . Basic Data Sheets ........ . . . . . . . . . . . . . . . . . . iii Evaluation Summary.................. . .... .. . xi I. Background .......................... . . 1 A. The Economy .................. . . . . 1 B. The Agricultural Sector . . . . . . . ...... . . . . 1 C. The Irrigation Subsector. . ......... . . . . . . . . 2 D. The Projects .. . . . . . 3 E. Project Implementation........... ....... . . 4 F. New Developments Since Loan Closing . . . . . . 4 II. Project Status at Audit . . . . . . . . . . . . . . . . . . . . . 5 A. Completion of Civil Works . . . . . . . . . . . . . . . . . . 5 B. Project Costs . . . . . . . . . . . . . . . . . . . . . . . . 6 III. Performance of the Irrigation and Drainage Systems . . . . . . . . 7 A. Design................... ....... . . 7 B. Current Status . . . . . 8 C. Irrigation Performance Indicators .. . . 8 D. Operation and Maintenance . . . . ........... 9 E. Cost Recovery . . . . . . . . . . . . . . . . . . . . . . . 9 F. Impact on the Environment . . . . . . . . . . . . . . . . . . 10 IV. Agricultural Performance . . . . . . . ............... 10 A. Cropping Pattern and Cropping Intensities . . . . . . . . . . 10 B. Yields and Production . . . . . . . . . . . . . . . . . . . . 11 C. Effects of the On-going Economic Reforms . . . . . . . . . . . 12 V. Economic Performance . . . . . . . . . . . . . . . . . . . . . . . 13 A. Main Assumptions . . . . . . . . . . . . . . . . . . . . . . . 13 B. Economic Rates of Return . . . . . . . . . . . . . . . . . . 14 C. Financial Returns . . . . . . . . . . . . . . . . . . . . . . 15 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 IFC authorization. Table of Contents (continued) Page No. VI. Main Issues . . . . . . . . . .. . . . . . . . . . . . 15 A. The Economic Viability of Irrigation . . . . . . . . . . 15 B. The Bank Support to Irrigation in Romania . . . . . . 16 C. Accelerated Disbursement of Bank Funds . . . . . . . . . . . . 18 D. Future Prospects . ....... . . . . . . . . . . . 18 Annexes 1 Planned and Actual Physical Infrastructure . . . . . ...... . 21 2 Table 1 - Total Annual Costs for O&M in the 9 Sub-Sectors . . . . . 22 Table 2 -Water Charge Rates . . . . . . . . . . . . . . . . . . 23 Table 3 - Annual O&M Costs and Annual Water Charges in the 9 Sub-Projects . . . . . . . . . . . . . . . . 1 . . . . 24 3 Table 1 - Exchange Rates, Deflators, Inflators . . . . . . . . . . . 25 Table 2 - Financial and Economic Prices for the Main Products . . . 26 Table 3 - Mostister- Economic Cash Flow . * . . . . . . . .. 27 Table 4 - Calmatui -Economic Cash Flow . . . . . . . . . . . .. 28 Table 5 - Covurlui- Economic Cash Flow . . . . . . . .. . . .. 29 Table 6 - Bucaani -Economic Cash Flow . . . . . . . . . . . . . . . 30 Table 7 - Buzau - Economic Cash Flow . . . . . . . . . . . . . . . . 31 Table 8 - Siret - Economic Cash Flow . . . . . . . . . . . . . . . . 32 Table 9 - Prut - Economic Cash Flow . . . . . . . . . . .0. . . . . 33 Table 10- Caracal - Economic Cash Flow . . . . . . . . . . . . . . . 34 Table 11- Titu - Economic Cash Flow . . . . . . . . . . . . . . . . 35 IBRD 13933, 13934, 14577, 15176, 15177, 15178, 15407, 15408 PROJECT PERFORMANCE AUDIT REPORT ROMANIA MOSTISTEA AND CALMATUI IRRIGATION AND DRAINAGE PROJECT (LOAN 1670-RO), COVURLUI IRRIGATION PROJECT (LOAN 1795-RO), BUCSANI-BUZAU-SIRET-PRUT (BBSP) IRRIGATION PROJECT (LOAN 1938-RO), and CARACAL-TITU IRRIGATION PROJECT (LOAN 1971-RO) PREFACE This is the Project Performance Audit Report (PPAR) of four irriga- tion projects in Romania, for which Loans 1670-RO, 1795-RO, 1938-RO and 1971-RO for a total amount of US$315.0 million were approved respectively in March 1979, January 1980, December 1980 and April 1981. The loans were closed on schedule in June 1986, December 1987, June 1988 and June 1986 respectively. The loans were fully disbursed, except the BBSP for which an amount of US$1.0 million was canceled. The projects were designed to provide irrigation and drainage for about 600,000 hectares in 14 provinces in the southern and eastern parts of the country. The PPAR is based on the four Staff Appraisal Reports and President Reports, the Loan documents, project files, discussions with Bank staff and the Project Completion Report (PCR) issued by the former Europe, Middle East and North Africa Region in April 1990. Following the resumption of relations between the country and the Bank, an OED mission visited Romania in June-July 1991, three to five years after loan closing. The mission discussed the effectiveness of the Bank's assistance with officials of the Ministry of Agriculture and Food, the Agricultural Bank, and the Department of Land Reclamation at the national and provincial levels. The mission also interviewed a number of farmers, and managers of commercial companies, mechanization centers and research stations. Their kind cooperation and valuable assistance in the preparation of this report is gratefully acknowledged. The PPAR elaborates on the main reasons for mediocre performance of the projects: the sharp decline in world agricultural prices, the underestimation by the Bank of the political and economic constraints inherent in the regime prevailing at the time of project appraisal and implementation and the pressure for lending to irrigation on the part of both the Government and the Bank. The draft PPAR was sent to the Borrower for comments but none were received. PROJECT PERFORMANCE AUDIT REPORT ROMANIA MOSTISTEA AND CALMATUI IRRIGATION AND DRAINAGE PROJECT (LOAN 1670-RO) BASIC DATA SHEET KEY PROJECT DATA APPRAISAL ACTUAL AS 2 OF ESTIMATE ACTUAL OR APPRAISAL ESTIMATED ACTUAL ESTIMATES Total Project Cost (US$ million) 409.2 397.5 97.0 Total Project Cost (lei million) 7,364.5 6,539.0 89.0 Loan Amount (US$ million) 70.0 70.0 100.0 Date Board Approval 03/20/79 Loan Agreement Date 04/16/79 Date Effectiveness 07/31/79 07/16/79 100.0l Date Physical Components Completed 12/31/85 12/31/88 153.0.1 Closing Date 06/30/86 06/30/86 100.0l Economic Rate of Return (2) 15 8.3 Institutional Performance good fair Technical Performance good fair STAFF INPUTV' FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 TOTAL Identification/Prep. 5.5 17.4 -- -- -- -- -- -- -- -- -- 22.9 Ap.vraisal -- 20.0 46.6 -- -- -- -- -- -- -- -- 66.6 Negotiations -- -- 0.9 -- -- -- -- -- -- -- -- .9 Supervision -- 10.7 4.5 3.1 2.7 4.9 1.9 2.0 1.2 31.0 TOTAL 5.5 37.4 47.5 10.7 4.5 3.1 2.7 4.9 1.9 2.0 1.2 121.4 CUMULATIVE DISBURSEMENTS FY80 FY81 FY82 FY83 FY84 FY85 FY86 Appraisal Estimate (US$ million) 17.9 47.3 61.0 68.0 70.0 70.0 70.0 Actual (US$ million) 1.3 20.2 59.9 63.6 70.0 --- --- Actual as X of Appraisal Estimate (2) 7 42 98 94 100 100 --- Date of Final Disbursement -- -- -- -- -- Feb. 28, 1984 --- Principal Repaid as of 12/31/89 (US$ million) -- -- -- -- --- 70.0 --- l1 Calculated in terms of months from date of Board approval. ki Input as staff weeks. Source: World Bank Planning and Budgeting Department. - iv - MISSION DATA MISSION STAFF DAYS PERFORMANCE RATING1 DATES PERSONS IN FIELD SPECIALIZATIONS' STATUS TREND Identification 04/77 2 4811 a,b ---- ---- Preparation 08/77 2 6 a.b ---- ---- Appraisal 06/78 4 84 a,b,c,d ---- ---- Supervision 1 05/80 2 30,i a.,b 1 1 Supervision II 04/81 2 3421 a,b 2 2 Supervision III 05/82 2 26;i a,b 2 3 Supervision IV 11/82 2 28*/ b,b 2 2 Supervision V 05/83 2 26' b,b 2 1 Supervision VI 10/83 2 12 a,b 2 2 Supervision VII 04/84 2 18,1 a,c 1 1 Supervision VIII 10/84 2 28;1 b,c 2 1 Supervision IX 12/85 3 12;, a,b,b 2 2 Supervision X 10/86 2 22 a,b 1 2 OTHER PROJECT DATA Borrower Bank for Agriculture and Food Industry (BAFI) Guarantor The Socialist Republic of Romania Executing Agency Ministry of Agriculture and Food Industry (MAIA) Fiscal Year of Borrower January 1 to December 31 Currency Name (abbrev.) lei (lei) Currency Exchange Rate (US$ 1 lei) Appraisal Year Average US$1.00 - lei 18.0 Intervening Years Average US$1.00 - lei 16.2 Compietion Year Average US$1.00 = lei 14.4 1990 US$1.00 = lei 22.4 Follow-on Proiect Name Covurlui Irrigation Project Loan Number 1795-RO Loan Amount (US$ million) 90.0 Date of Loan Agreement April 08, 1980 it Specialists: a - economist, b - engineer, c - agriculturist, d - drainage specialist. Status: 1 - problem free of minor problems, 2 - moderate problems, 3 - major problem Trend: 1 improving, 2 w stationary, 3 - deteriorating. 5 Includes staff days in field spent concurrently on supervision/preparation of other ongoing projects. PROJECT PERFORMANCE AUDIT REPORT ROMANIA COVURLUI IRRIGATION PROJECT (LOAN 1795-RO) BASIC DATA SHEET KEY PROJECT DATA ACTUAL AS % OF APPRAISAL ACTUAL OP APPRAISAL ESTIMATE ESTIMATED ACTUAL ESTIMATES Total Project Cost (US$ million) 354.6 317.7 89.0 Total Project Cost (lei million) 6,384.1 5,263.0 82.0 Loan Amount (US$ million) 90.0 90.0 100.0 Date Board Approval 01/22/80 Loan Agreement Date 04/08/80 Date Effectiveness 07/08/80 07/08/80 100.0, Date Physical Components Completed 12/31/87 12/31/91 150.0, Closing Date 12/31/87 12/31/87 100.0; Economic Rate of Return (2) 14 5.5 Institutional Performance good fair Technical Performance good fair STAFF INPUTl FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 TOTAL Identification/Prep. 0.8 20.3 4.0 -- -- -- -- -- -- -- -- 25.1 Appraisal -- 7.0 16.0 -- -- -- -- -- -- -- -- 23.0 Negotiations -- -- -- 4.0 -- -- -- -- -- -- -- 4.0 Supervision -- -- -- 1.6 8.4 2.8 2.5 4.1 1.0 2.8 3.3 26.5 TOTAL 0.8 27.3 20.0 5.6 8.4 2.8 2.5 4.1 1.0 2.8 3.3 78.6 CUMULATIVE DISBURSEMENTS FY81 FY82 VY83 FY84 FY85 FY86 Appraisal Estimate (US$ million) 12.0 30.0 57.0 70.0 80.0 90.0 Actual (US$ million) 4.1 43.8 67.1 84.5 90.0 90.0 Actual as % of Appraisal Estimate (%) 34 146 118 121 113 100 Date of Final Disbursement -- -- -- -- --- Dec. 20, 1984 Principal Repaid as of 12/31/89 (US$ million) -- -- -- -- --- 90.0 t Calculated in terms of months from date of Board approval. kl Input as staff weeks. Source: World Bank Planning and Budgeting Department. - vi - MISSIOn DATA MISSION STAFF DAYS PERFORMANCE RATING1lI DATES PERSONS IN FIELD SPECIALIZATION1' STATUS TREND Identification 05/77 2 42 a,b ---- ---- Preparation 08/78 2 6 a.b ---- ---- Appraisal 06/79 3 63 a,b,c,d ---- ---- Supervision I 07/80 1 06*1 b 1 2 Supervision II 05/81 2 12;/ a,b 3 2 Supervision III 06/82 2 26;/ b,c 2 2 Supervision IV 12/82 2 28.- a,b 2 2 Supervision V 05/83 2 261 b,b 2 1 Supervision VI 10/83 2 24-. a,b 1 2 Supervision VII 04/84 2 160/ a,b 2 2 Supervision VIII 10/84 2 24-1 a,b 2 1 Supervision IX 12/85 3 12;1 a,b,b 3 -- Supervision X 11/86 2 18 a,b 1 2 OTHER PROJECT DATA Borrower Bank for Agriculture and Food Industry (BAFI) Guarantor The Socialist Republic of Romania Executing Agency Ministry of Agriculture and Food Industry (MAIA) Fiscal Year of Borrower January 1 to December 31 Currency Name (abbrev.) lei (lei) Currency Exchange Rate (US$ 1= lei) Appraisal Year Average US$1.00 - lei 18.0 Intervening Years Average US$1.00 = lei 16.2 Completion Year Average US$1.00 = lei 14.4 1990 US$1.00 - lei 22.4 Follow-on Project Name BBSP Irrigation Project Loan Number 1938-RO Loan Amount (US$ million) 75.0 Date of Loan Agreement January 09, 1981 sI Specialists: a - economist, b - engineer, c = agriculturist, d = drainage specialist. Status: I - problem free of minor problems, 2 - moderate problems, 3 - major problems; Trend: 1 improving, 2 = stationary, 3 - deteriorating. - vii - PROJECT PERFORMANCE AUDIT REPORT ROMANLIA BUCSANI-BUAU-SIR '-PRUT (BBSP) IRRIGATION PROJECT A 1938-RO) BASIC DATA SHEET KEY PROJECT DATA ACTUAL AS % OF APPRAISAL ACTUAL OR APPRAISAL ESTIMATE ESTIMATED ACTUAL ESTIMATES Total Project Cost (US$ million) 375.3 351.5 96.0 Total Project Cost (lei million) 5,627.7 6,221.0 116.0 Loan Amount (US$ million) 75.0 74.0 98.7 Date Board Approval 12/23/80 Loan Agreement Date 01/09/81 Date Effectiveness 04/30/81 10/14/81 106.8!' Date Physical Components Completed 12/31/87 12/31/88 114.3aV Closing Date 06/30/88 06/30/88 100.0al Economic Rate of Return (%) 22 6.2 Institutional Performance good fair Technical Performance good fair STAFF INPUTV FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 TOTAL Identification/Prep. 0.6 13.0 -- -- -- -- -- -- -- -- 13.6 Appraisal --- --- 44.7 -- -- -- 44.7 Negotiations --- --- 4.9 -- -- -- -- -- -- -- 4.9 Supervision -- 3.8 4.7 4.2 6.3 1.4 2.9 2.9 .1 26.3 TOTAL 0.6 13.0 53.4 4.7 4.2 6.3 1.4 2.9 2.9 .1 89.5 CUMULATIVT DISBURSEMENTS FY82 FY83 FY84 FY85 FY86 FY87 AppraisaA Estimate (US$ million) 18.0 38.0 53.0 63.0 69.0 75.0 Actual (US$ million) 7.1 41.4 56.5 65.8 73.6 74.0 Actual as 2 of Appraisal Estimate (2) 39 109 107 104 107 98 Date of Final Disbursement -- -- -- -- --- June 30, 1987 Principal Repaid as of 12/31/89 (US$ million) -- -- -- -- --- 74.0 A Calculated in terms of months from date of Board approval. ki Input as staff weeks. Source. World Bank Planning and Budgeting Department. viii - MISSION DATA MISSION STAFF DAYS PERFORMANCE RATINGI DATES PERSONS IN FIELD SPECIALIZATIONS' STATUS TREND Identification 02/79 4 84 a,b,c,d ---- ---- Preparation 10/79 2 6 a.b ---- ---- Appraisal 04/80 4 88 a,b,c,d ---- ---- Supervision I 05/81 2 2411 b,c 1 2 Supervision II 05/82 2 26*/ a,b 2 3 Supervision III 11/82 2 28;/ b,b 2 2 Supervision IV 05/83 2 36;i b,b 2 1 Supervision V 10/83 2 24- a,b 1 2 Supervision VI 04/84 2 17 a,b 1 2 Supervision VII 10/84 2 Se b,c 1 2 Supervision VIII 10/85 3 24*. a,b,c 1 2 Suprrvision IX 01/86 2 24*/ b,c 1 2 Supervision X 11/86 2 127 b,c 1 2 OTHER PROJECT DATA Borrover Bank for Agriculture and Food Industry (BAFI) Guarantor The Socialist Republic of Romania Executing Agency Ministry of Agriculture and Food Industry (MAIA) Fiscal Year of Borrower January 1 to December 31 Currency Name (abbrev.) lei (lei) Currency Exchange Rate (US$ 1= lei) Appraisal Year Average US$1.00 - lei 15.0 Intervening Years Average US$1.00 = lei 14.7 Completion Year Average US$1.00 - lei 14.4 1990 US$1.00 = lei 22.4 Follow-on Project Name Caracal Titu Irrigation Project Loan Number 1971-RO Loan Amount (US$ million) 80.0 Date of Loan Agreement June 24, 1981 1l Specialists: a - economist, b - engineer, c - agriculturist, d - drainage specialist. Status: I - problem free of minor problems, 2 - moderate problems, 3 - major problems; Trend: 1 i mproving, 2 = stationary, 3 - deteriorating. Al Includes staff days in field spent concurrently on supervision/preparation of other ongoing projects. - ix - PROJECT PERFORMANCE AUDIT REPORT RONANIA CARACAL TITU IRRIGATION PROJECT (LOAN 1971-RO) BASIC DATA SHEET KEY PROJECT DATA ACTUAL AS % OF APPRAISAL ACTUAL OR APPRAISAL E',TIMATE ESTIMATED ACTUAL ESTIMATES Total Project Cost (US$ million) 379.3 315.1 83.0 Total Project Cost (lei million) 5,689.9 5,408.0 95.0 Loan Amount (US$ million) 80.0 80.0 100.0 Date Board Approval 04/21/81 Loan Agreement Date 06/24/81 Date Effectiveness 07/31/81 03/26/82 104.81/ Date Physical Components Completed 12/31/85 12/31/88 164.3,1 Closing Date 06/30/86 06/30/86 100.0-. Economic Rate of Return (%) 20.0 3.0 Institutional Performance good fair Technical Performance good fair STAFF INPUTh' FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 TOTAL Identification/Prep. 2.3 16.9 -- -- -- -- -- --- 19.2 Appraisal -- 33.1 -- -- -- -- -- --- 33.1 Negotiations -- -- 2.6 -- -- -- -- --- 2.6 Supervision -- 0.6 5.0 7.3 3.7 1.7 1.7 1.0 21.0 TOTAL 2.3 50.6 7.6 7.3 3.7 1.7 1.7 1.0 75.9 CUMULATIVE DISBURSEMENTS FY82 FY83 FY84 FY85 FY86 FY87 Appraisal Estimate (US$ million) 2.0 24.0 45.0 66.0 76.0 80.0 Actual (US$ million) -- 12.6 54.4 72.2 80.0 80.0 Actual as Z of Appraisal Estimate (2) -- 52 123 109 105 100 Date of Final Disbursement -- -- -- --- Mar. 30, 1986 Principal Repaid as of 12/31/89 (US$ million) -- -- - -- -- 80.0 it Calculated in terms of months from date of Board approval. ki Input as staff weeks. Source: World Bank Planning and Budgeting Department. MISSION DATA MISSION STAFF DAYS PERFORMANCE R&TING1l DATES PERSONS IN FIELD SPECIALIZATIONS' STATUS TREND Identification 02/80 4 841 a,b,c,d ---- ---- Preparation 06/80 2 6 a.b ---- ---- Appraisal 10/80 4 88 a,b,c,d ---- ---- Supervision 1 05/82 2 26,/ a,b 2 3 Supervision 11 11/82 2 28; b,b 2 2 Supervision III 10/83 2 34,; a,b 1 2 Supervision IV 04/84 2 52, a,b 1 2 Supervision V 10/84 2 24 b,c 1 1 Supervision VI 12/85 2 29 a,b,b 2 2 Supervision VII 11/86 2 22,/ a,b 2 1 OTHER PROJECT DATA Borrower Bank for Agriculture and Food Industry (BAFI) Guarantor The Socialist Republic of Romania Executing Agency Ministry of Agriculture and Food Industry (MAIA) Fiscal Year of Borrower January 1 to December 31 Currency Name (abbrev.) lei (lei) Currency Exchange Rate (US$ 1= lei) Appraisal Year Average US$1.00 - lei 15.0 Intervening Years Average US$1.00 = lei 14.7 Completion Year Average US$1.00 = lei 14.4 1990 US$1.00 = lei 22.4 l Specialists: a - economist, b - engineer, c - agriculturist, d = drainage specialist. Status: I :.problem free of minor problems, 2 - moderate problems, 3 = major problems; Trend: 1 improving, 2 = stationary, 3 - deteriorating. it Includes staff days in field spent concurrently on supervision/preparation of other ongoing projects. - xi - PROJECT PERFORMANCE AUDIT REPORT ROMANIA MOSTISTEA AND CALMATUI IRRIGATION AND DRAINAGE PROJECT (LOAN 1670-RO), COVURLUI IRRIGATION PROJECT (LOAN 1795-RO), BUCSANI-BUZAU-SIRET-PRUT (BBSP) IRRIGATION PROJECT (LOAN 1938-RO), and CARACAL-TITU IRRIGATION PROJECT (LOAN 1971-RO) EVALUATION SUMMARY Introduction cessed production. The four projects included nine subprojects, spread over fourteen provinces. 1. Bank support to irrigation in Romania has Main components included the construction of consisted of eight loans totalling US$545.0 irrigation and drainage infrastructure, valley million, made between 1975 and 1981 to develop training, soil erosion control and the procurement about 1.1 million hectares, or approximately one of maintenance equipment and agricultural third of the total irrigated area of the country. The machinery. four projects under review were the fifth, sixth, seventh and eighth in the series. Implementation Experience 2. At the time of project identification and 4. In each case, construction started soon preparation, investments absorbed about 30% of after loan effectiveness but slowed down the Romanian national income, which was growing substantially after 1981 when Romania, faced with at an impressive annual rate of about 8%. economic problems, responded with a sharp cut- Although industry was the leading sector of the back in investments, imports and growth. As a economy, agriculture still accounted for about result, execution of all four projects was consider- 15% of the national income and 31% of the labor ably delayed by budgetary constraints, and force. However the growth of Romanian agri- shortages of equipment, materials and fuel. culture was constrained by low and erratic rainfall and shortages of equipment and materials. 5. In contrast the Bank funds were disbursed Following the collectivization measure introduced ahead of schedule as they were used, as planned, after the second world war, agricultural production for the purchase of equipment and machinery. At was dominated by Agricultural Production the time of Loan closing, in 1986-87, only 28% of Cooperatives and State Enterprises with individual irrigation works and 24% of the drainage system farmers owning only 9% of the total agricultural were completed. In 1987, Romania broke rela- area. tions with the Bank and paid back in advance all outstanding loans. In the absence of information Project Objectives regarding the advancement of works after the loan closing, the Bank's PCR, issued in 1990, stated 3. The main objectives were to increase agri- that based on experience with previous projects, cultural production and raise labor productivity the irrigation and drainage infrastructure of these over a project area of about 600,000 hectares. four projects had probably been completed. This, in turn was expected to increase both internal food consumption and foreign exchange 6. In 1990, a revolution took place in earnings through exports of primary and agropro- Romania. The new government resumed relations - xii - with the Bank and introduced sweeping changes in below the appraisal estimates of 15%, 16%, 22% the economy, including the privatization of most and 19.5% respectively. Long construction period state entities. In the agricultural sector, the and delayed benefits, lower production than antici- government abolished the collectivist system and pated and high operation costs are partly respon- initiated a land privatization program to be sible for such mediocre performance. The main completed by the end of 1991. reason, however, is a sharp decline in the project commodity prices. With the same prices as those Project Results projected at appraisal, ERRs would be close to or above 10% 7. At the time of audit, in July 1991, the planned irrigation infrastructure was 82% complete Sustainability but the drainage system, valley training and erosion control works were only partly imple- 11. The on-going land redistribution is mented. Project costs were slightly lower than expected to have, in the long run, a positive effect expected, mostly due to incompleteness of works. on project results because of the much higher The irrigable area amounted to about 490,000 ha, motivation of farmers than in the previous against 600,000 projected at appraisal and con- collective system. In the short run, however, the struction was still underway on about 40,000 ha. land redistribution will cause difficulties because, in many cases, it does not take into consideration 8. In the nine subprojects, the design of the the layout of the irrigation network. Other short irrigation and drainage systems has proved term difficulties will emerge from the govern- adequate and the quality of civil works is generally ment's rapid disengagement from a number of good. In contrast, electromechanical equipment is agricultural services combined with the farmers' of poor quality, with frequent breakdowns of reluctance to pay for such services, and the pumps and the operation of the irrigation infra- farmers' shortage of working capital. As a result, structure is hampered by shortages of power. In stagnation or slight decline in production may be addition the portable irrigation equipment is only expected during the two or three coming years. 70% complete. The overall operation and main- tenance cost of the irrigation systems is high due Findings and Lessons to the need to lift water to terraces and plateaus resulting in high energy requirements in most 12. Project experience has confirmed OED subprojects. findings that irrigation projects, which were economically justifiable in the late 1970s through 9. Agricultural performance has been lower the production of cereals and oilseeds, are much than anticipated due to a relatively small less viable in the 1990s after the sharp decline in proportion of high value crops in the cropping agricultural prices unless the cropping system is pattern, shortages of some agricultural inputs, intensified, yields are optimized and operation under-utilization of irrigation water, frequent costs are considerably reduced. In this regard, the water-logging and shortages of labor as a large rigidity of the previous governmental system i fraction of the male population is now working in Romania has been partly responsible for the poor factories. As a result, yields have been about 20% adaptation of the projects to the new economic lower than expected at appraisal. situation. 10. The economic rates of return of the four 13. Although the engineering aspects of the projects were re-estimated by the audit at 8.3% for projects were correctly appraised, the Bank under- Mostistea-Calmatui, 5.5% for Covurlui, 6.2% for estimated a number of constraints inherent in the BBSP and 3.0% for Caracal-Titu, significantly political and economic system prevailing in - xiii - Romania at the time of project appraisal and farming system and low motivation of farmers implementation. It has become apparent that the were also considerably underestimated by the considerable investments in irrigation supported by Bank. Project experience has shown that the Bank were actually motivated by political unexpected upstream and downstream factors may considerations rather than economic reasons. The endanger project success in centrally planned pace of irrigation development quickly exceeded economies. the financial resources of the country and the absorptive capacity of the Project Authorities. 14. While Romania's departure from the Bank Despite the apparent success of Romanian in 1987 curtailed Bank responsibilities at that industry, its pumps, motors and electro-mechanical point, the projects' financing arrangements were equipment proved obsolete and of poor quality already inhibiting certain Bank activities. Those with adverse effects on project performance and arrangements, whereby the Bank funds were fully productivity. The availability and economic cost disbursed and the Loans were closed ahead of of energy was not adequately estimated. The physical project completion, deprived the Bank of disinformation practices imposed by the previous its full supervision and technical assistance role. regime resulted in unreliable data on yields and Project experience showed the need to link dis- production. Other constraints to agricultural bursements in large infrastructure projects to the development, including a quasi-permanent shortage physical progress of civil works, even when Bank of equipment, materials and fuel, the distorted funds are expected to be used only for the farfgate prices, the inefficiency of the collective procurement of equipment and machinery. PROJECT PERFORMANCE AUDIT REPORT ROMANIA MOSTISTEA AND CALMATUI IRRIGATION AND DRAINAGE PROJECT (LOAN 1670-RO), COVURLUI IRRIGATION PROJECT (LOAN 1795-RO), BUCSANI-BUZAU.-SIRET-PRUT (BBSP) IRRIGATION PROJECT (LOAN 1938-RO), AND CARACAL-TITU IRRIGATION PROJECT (LOAN 1971-RO) I. BACKGROUND A. The EconMy 1.01 Romania covers an area of about 237,000 km2, and has a population of about 23.3 million, growing at an average rate of 0.5%. At the end of the 1970s, when the four projects under review were identified and prepared, GNP per capita was estimated at US$1,900. In 1990, however, the Bank re-estimated the Romanian GNP per capita at US$1,600, a significant decline over the last decade. 1.02 At the end of 1972, when Romania became a member of the World Bank, national income was growing at an impressive annual rate of about 9% according to official statistics. Over the past two decades, Romania pursued a development strategy designed to industrialize a primarily agrarian economy. Investments absorbed 35% of the national income. This strategy was carried out through a system of comprehensive central planning, guided by the Commu- nist Party and government authorities. At the end of the 1970s, industry became the leading sector of the economy, accounting for about 50% of GDP and 34% of the labor force. Conversely, agriculture's share of national income declined from 28% in 1950 to 15% in 1979 and the proportion of the total labor force employed in agriculture decreased from 74% to 31%. 1.03 During the 1976-1980 Five-Year-Plan, when the projects were identified and prepared, the expansion of the Romanian economy slowed down significantly, due to the emergence of internal and external constraints, particularly insufficient productivity and efficiency of investments, in- ability of the economy to bring new capacity into operation as planned, a deterioration in the terms of trade aad a world energy crisis. In November 1979, the Twelfth Congress of the Communist Party called for lower growth and investment rates and better allocation of resources between consumption and investment. These policy changes had important effects on the implementation of the four projects under review. B. The Apricultural Sector 1.04 Romanian agriculture benefits from relatively good soils and climatic conditions. The Plains Zone, located in the western, southern and eastern part of the country, is especially well endowed with fertile soils and water resources; it contains about 53% of total arable lands, and irrigation is concentrated in this major grain belt. At the end of the 1970s, agricul- ture continued to be a key sector in the Romanian economy, providing almost all of the nation's food and significant foreign exchange earnings. - 2 - 1.05 At the time of project appraisal and following the collectivi- zation measures introduced after the second world war, agricultural production was dominated by Agricultural Production Cooperatives (CAPs) and State Agri- cultural Enterprises (IASs). In 1979, 87% of cereals was produced by the socialist sector. The total area under CAPs was 9.1 million hectares, or 61% of all agriculture land, LASs farmed 2.0 million hectares equivalent to 14% of agricultural land. The average size of CAPs was 2,080 ha, with 530 members; that of IASs was 5,100 ha, with a labor force of 550. Other state agriculture units, including research stations, covered 2.5 million ha, or 16% of agricul- tural land. Individual farmers only owned about 9% of the total agricultural area and most of their farms were in the more mountainous regions. Government-owned agricultural mechanization stations (SMAs) played a major role in providing machinery services. At the national level, the main state institution was the Ministry of Agriculture and Food Industry (MAFI), responsible for the preparation and implementation of the Five-Year-Plan for agriculture. Marketing was organized nationally under MAFI, with directorates responsible for marketing and processing specific commodities. The State sector also had a total monopoly on foraign trade and agro-processing. 1.06 Although considerable progress had been made to develop agricul- ture in Romania, the sector remained relatively undeveloped in 1979. Crop and livestock yields were still appreciably lower than those obtained in similar conditions in other countries and labor productivity was notably low. Serious shortages of machinery and farm inputs were experienced. In addition, govern- ment policy had given greater emphasis to development of IASs rather than CAPs. For the 1981-85 Plan, during which the projects were to be implemented, the main thrust of agricultural development strategy was to increase crop and livestock yields through the use of more efficient techniques, increased use of agricultural inputs, and large investments in irrigation. New economic measures also involved changes in financial flows between the enterprises and the state budget. Enterprises were to retain a greater part of their profits for distribution between funds for investments, working capital and profit- sharing. The new measures were a conservative attempt to strike a balance between extended enterprise autonomy and a firm belief in centralized planning and control. C. The Irrigation Subsector 1.07 From 1960 to 1979, total irrigated area in Romania was expanded from about 0.2 million to 2.2 million ha. Another 700,000 ha were expected to be brought under irrigation by the end of 1980. Government plans were to irrigate 3.7 million ha (out of a potential of about 5.5 million) by 1985. Investments in irrigation and drainage absorbed respectively 40% and 20% of total investments in agriculture in the 1971-75 and 1976-80 Five-Year-Plans. Irrigation has great importance for Romanian agriculture because the summer moisture deficit is the aost serious limiting factor to production over large areas of the most fertile soils, where annual rainfall (400-600 mm) is often erratic and badly distributed. 1.08 Irrigation works have been concentrated in about 100 large schemes, using water from the Danube and its tributaries. Lhe main irrigation - 3 - system is sprinkler. Most of the water is lifted from the rivers to rela- tively high elevations through a series of pumping stations and a system of open canals, pressure pumps and buried pipes. The Land Reclamation Department (DIFCA) of the Ministry of Agriculture is responsible for the design and construction of all irrigation and drainage schemes in Romania. 1.09 Bank assistance to the irrigation subsector started in 1975. Four loans, totalling US$ 230.5 million, supported the construction of the Giurgiu- Razmiresti, Rasova-Vederosa, Ialomita-Calmatui and Viisaora Irrigation Projects. These loans were approved between 1976 and 1978 and closed in the early eighties. OED Reports, issued in 1981 and 1984 concluded that the projects had been successfully implemented. Agricultural performance was considered satisfactory. Project ERR was revised upwards to 19% (13% at appraisal) in the case of the Giurgiu-Razmiresti project and slightly lower (14% versus 16%) for the other projects due to a decline in world agricultural prices during project execution. The four loans under review, approved in the 1979-81 period, were the fifth, sixth, seventh and eighth for the irrigation subsector. They increased the Bank's contribution to the subsector to US$545.0 million, representing 35% of the Bank's allocation for agriculture in Romania. The area developed by the eight Bank-supported projects covered 1.1 million ha, or about a third of the total irrigated area of the country. D. The Proiects 1.10 The four projects were prepared by DIFCA between 1978 and 1980 and appraised by the Bank in 1979, 1980 and 1981. The projects included nine sub- projects, totalling about 600,000 ha, spread over fourteen Judets (provinces). 1.11 The Mostistea-Calmatui Irrigation and Drainage Project consists of two irrigation and drainage schemes: Mostistea with a total command area of 158,540 ha, located about 20 km east of Bucharest; and Calmatui, with a drainage system covering 66,930 ha of which approximately 24,000 ha would be irrigated in the Buzau and Braila Judets at about 150 km northeast of Bucharest (see maps). 1.12 The Covurlui Irrigation Proiect includes an irrigation system of 141,700 ha by pumping water from the Danube in the Judet of Galati, in the eastern part of the country. 1.13 The BBSP Proiect consists of four irrigation and drainage schemes: Bucsani, 36,800 ha, by pumping water from the Olt River in the southern part of the country; Buzau, 59,700 ha, located in the Buzau and Prahova Judets, and drawing water from the Buzau River; Siret, 15,700 ha and Prut, 30,000 ha, both in the Galati Judet and adjacent to the Covurlui Project. 1.14 The Caracal-Titu Irrigation Proiect consists of two schemes: Caracal, 88,000 ha, on the west bank of the Olt River, and Titu, 42,700 ha, located in the Arges river basin at about 50 km northwest of Bucharest. 1.15 The main components (detailed in Chapter III and the audit files) of the four projects included the construction of irrigation and drainage infrastructure, valley training, erosion control works, and the procurement of maintenance equipment and agricultural machinery. The total cost of the four projects was estimated at US$1,518.0 million, an average of US$380.0 million per project. Project works were expected to be completed in 5 to 7 years. Major crops were to be: maize (51%), wheat (17%), alfalfa (5%), sunflower (7%), fruits and vegetables (5%), sugarbeet (6%) and soybeans (6%). DIFCA was to be responsible for project execution. Because of the low foreign exchange component of the projects, the Bank loans, totalling US$315.0 million, only represented about 20% of the total project costs. Bank funds were to be disbursed for the purchase of equipment, materials and spare parts to be procured through international competitive bidding. E. Proiect Implementation 1.16 Construction started soon after loan effectiveness, but slowed down substantially after 1981 due to a combination of factors: budgetary con- straints; shortages of equipment, fuel and materials; technical problems and insufficient absorptive capacity of the DIFCA. Faced with economic problems, Romania responded with a sharp cutback in imports, investments and growth. As a result, construction proceeded extremely slowly and some work sites were temporarily abandoned. In contrast, the Bank funds were quickly disbursed as they were used, as planned, for the purchase of equipment and machinery. For all the four projects, the loans were fully disbursed ahead of schedule. By the time of the closing date in 1986, only 28% of the irrigation works and 24Z of the drainage systems were completed. 1.17 In 1987, the Romanian government broke relations with the Bank. Between May 1988 and November 1989 the government paid back in advance all outstanding loans, including those related to the present projects. As a result, no information was available (until relations were resumed at the end of 1990) as to the advancement of works and the economic impact of the proj- ects. The Project Completion Report, prepared by the Bank in April 1990 wi+hout field visit, was not able to assess the results of the projects. It stated, however, that based on experience with previous irrigation projects in Romania, the projects' irrigation and drainage systems were probably satis- factorily completed. Nevertheless, no project ERR was reestimated by the PCR as actual data on total investment costs, yields and production were not available at that time. F. New Developments Since Loan Closing 1.18 In the mid 1980s, the level of agricultural output declined slightly in Romania, reflecting structural rigidities in a number of key areas: no change in the cropping pattern and land use, low level of input utilization and yields, and no progress in land privatization. The decline in production was accompanied by a gradual reduction (and a complete ban in 1990) of agricultural exports and an increase in imports. 1.19 In 1990, a revolution took place in Romania, followed by sweeping changes in the economic system. For the agricultural sector, the program of reforms includes: the divestiture from and privatization of most state entities; the liberalization of rural markets to promote a largely self- financed agricultural sector; and the liberalization of the country's agricul- tural prices and foreign trade. The new government abolished the production cooperative system and initiated a huge land privatization program, to be carried out in 1991 and completed if possible in October of the same year, before the beginning of the new cropping season. The program consists in redistributing about 15 million ha to approximately six million former land- owners and cooperative members. The maximum size of individual farms has been set at 10 ha. State farms are also being dismantled into smaller commercial units of 100 to 300 ha, to be later privatized or rented out to entrepre- neurial farmers. The government services, such as marketing of inputs and outputs, agricultural machinery and water distribution are sharply curtailed, or privatized. 1.20 After 40 years of socialist agriculture, this process of decollec- tivization, abolition of the central planning system and adoption of free markets has, and will continue to have during the coming years, a considerable effect on the agricultural and economic performance of the four projects under review. At the time of the audit mission, in July 1991, land redistribution to former landowners and cooperative members was under way in the four project areas under the supervision of regional committees; farmers were being working individually on their plots; state fArms and mechanization centers were being transformed into private commercial enterprises; and the government disengage- ment from marketing and processing activities was becoming effective both at the national and local levels. The Project Authority was split into autonomous agencies, many of them being privatized. II. PROJECT STATUS AT AUDIT A. Completion of Civil Works 2.01 After the loan closing, project construction has continued to be slow due to the economic problems of the country and shortages of equipment and materials. Since the end of 1990, implementation of the land redistribu- tion program in the four projects and drastic institutional changes in the country have contributed to reducing even further the progress of construc- tion. At the time of the audit mission, in July 1991, none of the four projects was fully completed. Overall, the planned irrigation infrastructure was 82% complete and operational, covering about 490,000 ha against 600,000 projected at appraisal. In contrast a significant portion of the drainage works (about 30% of the surface and 80% of the sub-surface systems) was not yet started or left incomplete. Incompleteness of other types of investments (land reclamation and valley training) were also noted. The degree of work completion varies, however, from one subproject to another as shown by the following table and detailed in Annex 1. - 6 - Completion of Civil Works (%) Subproject Irrigation Drainage Land Recl. Valley training system surf. sub-surf. erosion Mostistea 95 45 0 26 -- Calmatui 114 111 34 3 -- Covurlui 67 86 0 132 82 Buscani 93 69 0 90 47 Buzau 72 58 8 0 52 Siret 87 53 0 88 0 Prut 32 114 76 81 -- Caracal 86 54 1 96 51 Titu 102 70 11 -- -- 2.02 In most projects, irrigation works covering about 40,000 ha were still under way in 1991, yet at a very slow pace due to the government finan- cial constraints and policy changes. In the Covurlui Project, an area of about 57,000 ha located at a relatively high elevation has not been equipped as irrigation depends on the construction of Suhurlui Dam which is no longer considered a priority by the government. Construction of the surface drainage system came to a complete standstill partly due to the reluctance of indi- vidual farmers to accept land losses resulting from the construction o4 the drainage canals. The sub-surface drainage proved more costly than antici- pated; it has not been completed or even started in some subprojects and has been substituted in many instances by the less costly open drainage. Other project investments (valley training, land reclamation and erosion control works) are no longer considered a priority today by the Project Authority. In summary, with the exception of the irrigation systems, which are expected to be 85-90% complete by 1994, other types of investments will probably be left unfinished or not implemented at all under these projects. B. Project Costs 2.03 Project costs including the on-going irrigation works mentioned above but excluding the unfinished drainage and other components are expected to reach on average about 95% of appraisal estimates with some variation (78 to 140%) from one subproject to another as shown in the following table: - 7 - Estimated Project Costs M.LEI M.US$ Appraisal Actual Appraisal Actual Mostistea-Calmatui 7,365 6,539 409.2 397.5 (Mostistea) (5,981) (5,096) (332.3) (312.0) (Calmatui) (1,384) (1,443) (76.9) (85.5) Covurlui 6,384 5,263 355.0 317.7 BBSP 5,315 6,221 354.5 361.5 (Buesani) (1,025) (1,110) (68.5) (63.2) (Buzau) (2,686) (2,844) (179.0) (175.7) (Siret) (683) (582) (45.6) (35.7) (Prut) (921) (1,685) (61.4) (86.9) Caracul-Titu 5,689 5,408 379.3 315.1 (Caracal) (3,522) (3,494) (234.8) (202.1) (Titu) (2,167) (1,914) (144.5) (113.0) Total Four Projects 24,753 23,431 1,498.0 1,392.0 2.04 The lower costs than anticipated at appraisal are mostly due to incompleteness of project works. Had projects been fully executed, the cost overrun would have been at least 10 or 20% due mostly to considerable delays in project construction. Of note, however, is the low inflation rate of the Lei during project execution (except in 1991) and the relatively low invest- ment cost per equipped hectare (about US$3,100 equivalent) when compared to similar projects in other countries. III. PERFORMANCE OF THE IRRIGATION AND DRAINAGE SYSTEMS A. Desig 3.01 In the nine subprojects, the design of the irrigation and drainage infrastructure was about the same: irrigation water is derived from the Danube River or its tributaries through main pumping stations or diversion dams. A conveyance system, consisting of main and secondary canals and repumping stations, lifts water at gradually higher elevations to terraces and plateaus. Pressure pumping stations along the main and secondary canals feed a buried pipe distribution network equipped with hydrants for sprinkler irrigation of sectors varying from 1,000 to 3,000 ha. One hydrant serves an area of about 5.76 ha through the rotation of mobile equipment over 6 positions of 0.96 ha (24mx400m) each. The mobile equipment consists of 6 meter long aluminum pipes (diameter 100mm) equipped with 18 m. span -8- sprinklers. Each sprinkler has a discharge of 0.8 1/, and an operating pressure of 3.0 kg/cm2 allowing for water applications of 6.6 mm/h. CAPs and IASs are responsible for the purchase, operation and maintenance of their mobile equipment. 3.02 The drainage system was to be constructed on about 60% of the total command area, varying in each subproject according to its topographic conditions, type of soil and water table level. It consists of open drainage (main and secondary open canals) and/or sub-surface drainage (ceramic tiles and collector drains). Saline and sandy land reclamation, erosion control and valley training were planned in each project according to needs. Annex 1 includes a brief description and main features of the major irrigation and drainage infrastructure of the nine subprojects. B. Current Status 3.03 As mentioned above, at the end of 1990 or about 10 years after construction started, none of the nine subprojects has been fully completed. Nevertheless, the design of the irrigation and drainage infrastructure has generally proved adequate and the quality of construction has been good with some notable exceptions. 3.04 The quality of the civil works (dams and canals) is generally satisfactory. In contrast, electromechanical equipment of the main and secondary pumping/repumping stations and pressure pumping stations is of poor quality with frequent breakdown of pumps and motors. Electric pumps have been installed in open air, without protection of any kind. Operation conditions are inadequate, with strong voltage variations in the power network contri- buting to the deterioration of electromechanical equipment. In addition maintenance has been poor and shortages of spare parts have been experienced. The design and quality of the sprinkler distribution system (isolating valves, hydrants and other accessories) are satisfactory. However, the portable equip- ment is only 70% complete because a number of CAPs have not yet purchased their pipes and sprinklers. In addition shortages of aluminum have been experienced by pipe manufacturers. Surface drainage is incomplete but ade- quately designed; the underground tile drainage system is severely lacking in some areas which are adversely affected by water-logging or salinity or both. C. Irrigation Performance Indicators 3.05 The water allocation and delivery is based on the arranged demand system whereby water distribution is scheduled every week according to the cropping pattern, climatic conditions and related water requirements. All variations in water demand are easily compensated by the accumulation capacity of the conveyance and secondary canal systems, all equipped with downstream constant level automatic control. This water allocation and delivery system has proved adequate. 3.06 The conveyance and distribution efficiencies are estimated by the audit at 75% and 97% respectively, resulting in a conveyance and distribution efficiency of 73%. Fie]' efficiency is estimated at 74% and the overall water -9- efficiency at 54% on average for the nine subprojects. Although significantly lower than expected--and largely over-estimated (78%)--at appraisal this water efficiency remains satisfactory and could be significantly higher if breakdown of pumps and shortages of power were less frequent. 3.07 So far, water distribution has proved flexible, timely and equitable partly due to adequate project design and sound operational system, but also to the small number of water users including only large cooperatives and state farms. The situation may change drastically with the on-going land redistribution and the subsequent increase in water users (Chapter IV). On the other hand, water distribution has been quite unreliable due to the above mentioned shortages of power and breakdown of pumps. D. Operation and Maintenance 3.08 Operation and maintenance (O&M) is the responsibility of the pro- vincial irrigation districts of the Land Reclamation Department. The district includes on average three sectors covering 5,000 to 15,000 ha each. The per- manent staffing of the districts involved in the nine subprojects varies from 200 to 500 and decreased overtime due to budget constraints and the ongoing institutional reforms. Shortage of vehicles and O&M equipment are notable. Operation activities are relatively simple due to the well designed arranged demand water distribution system. Maintenance has been relatively light so far as project works are still in the initial period of their useful life. 3.09 O&M costs have been estimated on the basis of data provided by the districts of the nine subprojects. During the last three years, O&M costs in constant 1990 prices varied form US$38.3 equivalent per hectare in the Calmatui subproject to US$154.8 in the Caracal subproject. Costs per pumped volume varied from US$ equivalent 18.7/1,000m3 in the Buzau subproject to 138.0/1,000L_3 in Titu. (Table 1 in Annex 2). These wide variations gre due to different energy utilization from one project to another. On average energy consumption is 0.3 Kwh/m3 representing 30% of O&M costs. With the on- going price adjustment of electric power to reflect its market value, the cost of energy is expected to represent up to 40 or 50% of the total O&M costs in the near future. O&M cost may also vary significantly from one sector to the other within the same subproject according to the nature of the terrain (plain, terrace or plateau). In retrospect, the projects have been designed with little consideration for the economic cost of energy and irrigation is hardly justifiable in some of the highest parts of the project areas (Chapter V). E. Cost Recovery 3.10 Until 1989, O&M costs were recovered through water charges of three types levied on all CAPs and IASs using irrigation water: (i) a fixed annual charge per ha on the basis of crop grown; (ii) a fixed charge per ha based on the type of farm (CAP or IAS); and (iii) a variable charge levied on the volume of water used. Tables 2 and 3 in Annex 2 show the rates applied in 1988 and 1989 and the actual O&M cost/recovery ratio which varied from about 10% in Titu to 48% in Calmatui. It is worth noting, however, that substantial - 10 - recovery was made by the Government from the purchase of commodities at low farmgate prices and export at higher world prices. 3.11 Water charges were abolished by the new government in 1990 but resumed in 1991 concurrently with an increase in farmgate prices. With the ongoing government disengagement water charges are expected to cover 80% of O&M costs in 1990 and 100% afterwards through water contracts between the project authority and water users. However, in 1991, only a small proportion of water users accepted signing contracts (Chapter IV) while 0&M funding was sharply curtailed by the government resulting in decreasing maintenance efforts. F. Impact on the Environment 3.12 As originally designed, the projects were to have a beneficial impact on the environment by reducing water-logging, soil salinity, flooding and soil erosion. Unfortunately, the drainage, land reclamation, erosion control and valley training programs have been curtailed by about half, thus reducing substantially the project impact on the environment. Incompleteness of the drainage system in most subprojects may lead to increasing soil salinity problems in some areas. In addition river pollution has been a frequent problem in Romania during the past years and two subprojects, Bucsani and Caracal were adversely affected by industrial effluents during two consecutive cropping seasons. IV. AGRICULTURAL PERFORMANCE 4.01 A striking feature of the four project areas is their excellent agricultural potential: flat plains and slightly undulating terraces, deep and fertile chernozem soils, and favorable climatic conditions for a variety of annual and perennial crops. The main constraint to improved cropping pattern and yields was low and erratic rainfall, which was to be overcome by the con- struction of the irrigation systems. Under the projects, the cropping intensities would increase from about 100% to about 118% and the cropping pattern would be changed, with a reduction of winter cereals, which require only supplemental irrigation, and a substantial increase in more profitable summer and high value crops. Yields would increase by 50 to 100% and at full development, the gross value of production would more than double as already experienced in previous irrigation projects. In fact, project outcome has been different from expectations as a number of factors have resulted in a lower production than anticipated at appraisal. A. Cropping Pattern and Cropping Intensities 4.02 Contrary to expectations, the cropping pattern was dictated for many years by the Government and remained about the same as before the con- struction of irrigation facilities; such cropping pattern was not optimal from an economic point of view, with a relatively high proportion of low value crops. In all subprojects except one (Buzau), the proportion of vegetables, - 11 - fruits, sugar beet and maize has remained far below (about 50%) appraisal estimates while winter cereals have still been cultivated on about 30% of the land (18-20% anticipated at appraisal). It was only after the Revolution, and the subsequent liberali7ation, that an increasing proportion of summer crops, mostly maize and vegetables were grown by individual farmers. Cropping intensities also remained slightly below 100% and significantly lower than planned. B. Yields and Production 4.03 Shortages of some agricultural inputs, mostly herbicides and insecticides as well as spare parts have been a constant problem for the cooperatives (state farms generally received adequate allocations). More important, only about 50% on average of the irrigable area has been actually irrigated during the past years. Such water under-utilization has been due to frequent breakdown of pumps, shortages of power, lack of mobile equipment for sprinkler irrigation and water pollution in Olt River, a tributary of the Danube. The incompleteness of the drainage system and the land reclamation program have also resulted in frequent water-logging with adverse effects on yieldb in some subprojects. In addition, labor shortages have been experi- enced as a large fraction of the male labor force in the cooperatives preferred to work in factories, leaving the agricultural work to women who faced difficulties handling the irrigation mobile equipment. In 1991, water under-utilization was even more pronounced due to exceptionally heavy rains in summer, farmers' reluctance to pay for new and higher irrigation water tariffs, and the problems related to the on-going land redistribution program. 4.04 While state farms have performed relatively well during the past years because of a strong government support, the overall performance of the cooperatives seems to have declined over time. Farmgate prices have been determined by the government at such a low level that profits were almost impossible. Under the then prevailing economic system, allowing for all losses to be compensated from government budget--but providing little incentive to increase production--the motivation among cooperative members to perform was low. This also partly explains their lack of interest in purchasing irrigation mobile equipment and using irrigation water. 4.05 As a result of the above shortcoming, yields of the main crops, except sunflower, have been significantly lower than claimed in the late 1980s and about 20% below appraisal projections as shown in the following table: ESTIMATED YIELDS (T/ha) At Appraisal Actual Wheat 4.9-5.0 3.5-4.6 Maize 7.8-8.0 5.0-6.0 Soybean 2.5-2.7 2.3-2.5 Sunflower 2.7-2.9 2.9-3.1 Sugarbeet 48.0-55.0 35.0-45.0 - 12 - C. Effects of the On-going Economic Reforms 4.06 In the long run, there is no doubt that land privatization will have a positive effect on farmers' attitude and motivation. Nevertheless, a number of difficulties, described below, have already been experienced or may be expected in the near future. 4.07 The way the land distribution is being carried out will affect the future performance of the projects. In some subprojects, the individual plots have been adequately designed and allocated along the irrigation buried pipes in such a way that each farmer got access to an hydrant. In other sub- projects, this orderly land distribution proved impossible as the farmers, without consideration for the layout of the irrigation system, were eager to recover the same pieces of land they (or their fathers) owned prior to exprn- priation. This will make irrigation impossible unless land consolidation is later carried out or the water distribution system is modified. The govern- ment encourages farmers to form small groups to make a better use of irriga- tion and farm equipment. However, after so many years of government control, farmers are now reluctant to accept any form of imposed discipline. 4.08 The sprinkler irrigation equipment designed for large collective farms and a 20 hour/day rotation schedule will no longer be suitable for irri- gating small and individual farms. The quantity and perhaps the type of irrigation equipment will have to be changed and the design of the tertiary system may have to be modified in some subprojects. 4.09 In all the subprojects, the government role, personnel and budget have been sharply curtailed, which means that farmers now have to pay a higher price for services that were highly subsidized until 1990. In particular, the water distribution is now ensured by autonomous agencies, which are expected to recover their costs through water contracts with beneficiaries (Chapter IV). In 1991, only a small fraction (20-30%) of project farmers signed water contracts, due partly to heavy rains during the cropping season, but also to farmers' reluctance to pay for water which was heavily subsidized until 1990 and free in 1990. Farm mechanization centers are also being privatized and are expected to become self-sufficient through higher service fees. Farmers are likely to resist these changes and reduce water use and farm mechanization during the next cropping seasons. 4.10 Despite a series of farmgate price increases in 1991, farmers are very short of working capital. This may also adversely affect farmers' ability to develop their land unless an efficient agricultural credit system is quickly established. 4.11 The subdivision of large and collective farms into small (5 ha on average) private units will require a complete change in the existing agricul- tural extension system. Such change may be difficult to organize and will take some time before it becomes fully efficient. In addition, the former cooperative members have not been trained in farm management and may face great difficulties handling their business in a free market economy. - 13 - 4.12 As a result of the above factors a stagnation or slight decline in production may be expected for two or three years. On the other hand, the positive reaction of farmers towards land privatization has already translated itself into a new dynamism among the rural population, a decreasing absenteeism on the part of the former cooperative members and an increasing intensification of agricultural and livestock activities as illustrated by an expansion of high value crops in the 1990-91 season. V. ECONOMIC PERFORMANCE 5.01 The Audit recalculated the ERRs of the four projects (and nine subprojects) on the basis of actual and projected investment costs, cropping patterns, yields, production and operation costs. Data have been provided to the audit mission by the Department of Land Reclamation in Bucharest and its regional branches in the 14 Judets involved in project implementation. The following assumptions have been used by the Audit: A. Main Assumptions 5.02 All calculations have been made in 1990 constant prices. Existing data on average exchange rates (1980-86), provided by the IMF have been applied. For the 1986-90 period, inflation has been measured by using the G-5 M.U.V. index (World Bank-October 1990) combined with average exchange rates (Table 1 in Annex 3). 5.03 Investment Costs. Yearly investments in irrigation and drainage works, as provided by the regional offices responsible for project imple- mentation, have been computed at 1990 constant prices (taxes and custom duties are negligible). It was assumed that on-going irrigation works would be completed in two or three years. Other remaining works (drainage, valley training, land reclamation and erosion control) are not expected to be carried out or completed under these projects. When identified in the SARs, other infrastructure costs have been taken into account (power supply, relocation of communications and allocation of dam cost to irrigation). The cost stream excludes (i) land compensation, as output forgone is reflected by reduced cropped areas, (ii) farm machinery because agricultural production costs already include machinery services and (iii) investment costs related to research stations and silos which were not made available to the mission. 5.04 Operation and Maintenance Costs. At the time of audit, the price of energy was expected to be raised to Lei 4/KWh, representing approximately the real cost in mid 1991. For 1990, the economic cost was estimated at Lei 1.4/KWh, compared with the subsidized price of Lei 0.5 for the same year. 5.05 Input Prices. The audit has used 1990 domestic prices based on data provided by the Economic Bureau of the Institute for Land Reclamation (ISPIF-Feb. 1991). They are considered to reflect real prices with the excep- tion of fertilizers resulting in a slight underestimation of the production costs. - 14 - 5.06 Output Prices (see Annex 3 Table 2). World Bank price projections (December 1990) have been taken into account for cereals and industrial crops; 1990 domestic prices have been applied for other crops. 5.07 Benefits. For each subproject, the net additional value per cultivated hectare has been calculated on the basis of the actual and proj- ected cropping pattern, yields (Chapter IV) and incremental value of each crop. B. Economic Rates of Return 5.08 At appraisal, ERRs were high for projects of this nature, varying from 15 to 31% depending on the subproject. In fact, the project economic performance has been adversely affected by the long construction period and subsequent delays in benefits, lower yields than anticipated, high operation costs of the irrigation systems and a sharp decrease in commodity prices since project appraisal. The table below and Tables 3-11 in Annex 3 illustrates the mediocre economic performance of the projects compared with appraisal estimates: ESTIMATED ERR (%) Proiect/Subproiect Appraisal Actual Mostistea-Calmatui 15.0 8.3 (Mostistea) (15.0) (8.3) (Calmatui) (15.0) (8.5) Covurlui 16.0 5.5 BBSP 22.0 6.2 (Bucsani) (28.0) (7.2) (Buzau) (17.0) (5.7) (Siret) (22.0) (8.7) (Prut) (31.0) (5.5) Caracal-Titu 19.5 3.0 (Caracal) (20.3) (3.0) (Titu) (18.3) (3.0) 5.09 The best performers are the subprojects which are near completion with a relatively low investment and operation costs. It is worth noting, however, that the fall of world agricultural prices has strongly and nega- tively affected project results. At audit, actual prices of the project products are 30 to 50% lower than projected at appraisal as shown below for a sample of subprojects: - 15 - 1990 Prices (Lei/KR) Wheat Maize Sugar beet Sova Vegetables Mostistea-Calmatui Audit Estimate 3.5 2.4 0.9 6.8 2.8 Appraisal Estimate 4.9 4.1 1.6 11.6 2.6 BBSP Audit Estimate 3.5 2.4 0.9 6.8 2.8 Appraisal Estimate 6.6 5.3 1.6 12.0 6.9 5.10 A sensitivity test of three subprojects has shown that with the same prices as those estimated at appraisal, the following ERRs would have been obtained: Mostistea, 12.3%; Calmatui, 12.7%; and Buzau, 12% versus 8.3%, 8.5%, and 5.7% respectively. C. Financial Returns 5.11 At appraisal, it was expected that higher profits of cooperatives and state farms would partly benefit about 360,000 families through higher salaries, and bonuses. In fact, data provided to the audit mission in some Judets have shown that only a handful (about 5%) of CAPs and LAS have been profitable during the last three years. In addition, annual salaries have been low, US$750 to US$900 equivalent, and remained pretty stable for the past ten years. 5.12 Low incomes of cooperative members partly explain the pervasive absenteeiNm of men and their progressive substitution by women in farming activities. Under the collective farming system cooperative members were allowed to retain a small plot (0.3 ha later extended to 0.6 ha) for family consumption. It is well known in Romania that these plots have been very well cultivated by, and brought substantial profits to their beneficiaries during the Communist regime, but at the expense of the collective farms, which were essentially considered a source of salary rather than profit-sharing enterprises. VI. MAIN ISSUES A. The Economic Viability of Irrigation 6.01 The project experience is consistent with OED findings for other countries that investments in new irrigation are becoming more and more diffi- cult to justify economically, even in the EMENA Region which has been the best performer in this regard during the past two decades. In the 1970s, actual and projected agricultural prices were such that most irrigation projects yielded satisfactory returns despite frequent time and cost overruns, lower production than anticipated and mediocre performance of the irrigation and drainage systems. Moreover, many irrigation projects were economically - 16 - justifiable through the production of cereals, oilseeds and industrial crops which only required supplementary water in the dry season. Until 1987, the irrigation subsector was considered one of the most successful by the OED Annual Reviews, with a success rate of about 80%. 6.02 In the late 1980s and early 1990s the dramatic fall of agricul- tural prices has resulted in a situation where investments in irrigation are no longer economically justifiable unless measures are taken to intensify and diversify the traditional cropping patterns, optimize yields and reduce production costs drastically. This is turn has required efficient and reliable irrigation systems, able to deliver water in a timely manner with low operation cost. While a number of EMENA countries (Cyprus, Greece, Morocco, Tunisia and Turkey) have generally succeeded adapting their agricultural systems to this new economic situation, it is clear that Romania, despite good engineering performance, has failed to change the cropping patterns and modernize agricultural practices, resulting in a relatively low performance of all irrigation projects, including those supported by the Bank. 6.03 If the rigidity of the former economic system in Eastern Europe and Romania in particular was the main reason for such shortcomings, the Bank has also been partly responsible for not anticipating them and for the per- vasive technical obsolescence which has adversely affected the four projects under review, and probably the four previous projects as well. B. The Bank Support to Irrigation in Romania 6.04 The Bank strongly supported the Romanian government's effort to increase the irrigated area from 200,000 ha in 1962 to 3.2 million in 1990. Eight large irrigation projects, totaling more than one million ha were executed with Bank financial and technical assistance. Staff Appraisal Reports mention that the project design was based on least cost alternatives and improved technologies made possible by experience learned from previous projects. In 1991, however, a Bank sector report questioned the performance of the sub-sector in Romania and an FAO/CP identification report pointed out that "the present situation of irrigation gives cause for alarm as only 59Z of the total equipped area can be irrigated normally, 20% is under partial irrigation and 21% cannot be irrigated at all". Some Bank staff and Govern- ment officials are also of the opinion that about one third of the existing irrigation infrastructure in Romania is no longer economically viable and should be rehabilitated or abandoned. 6.05 In retrospect, the Bank underestimated a number of constraints inherent in the political and economic system prevailing in the country in the 1970s and 1980s. First, it is now recognized in Romania that the considerable investments in irrigation have been motivated by political considerations rather than economic reasons. Although a slowdown in investments was expected during the 1976-80 Five-Year-Plan, the annual pace of irrigation development (95,000 ha until 1989 with occasional peaks of up to 220,000 ha) exceeded both the financial resources and the absorptive capacity of implementing agencies, with adverse effects on the completion of works. Second, Romanian manufactures and hydro-mechanical specialists have been deprived for more than - 17 - 20 years of any contact with irrigation research, resulting in obsolete technologies. While project SARs stated that Romanian suppliers of hydro- mechanical equipment were highly competitive, it is now clear that such equip- ment was outmoded and of poor quality from the outset. 6.06 Third, the economic cost of energy and its effects on project economic viability were not adequately appreciated at appraisal; as a result, the design of a number of irrigation subprojects with high energy requirements became obsolete when Romania was deprived of the low cost fuel and power imported from USSR. Fourth, it is worth noting that most of the US$315.0 million in Bank loans was expected to be used for import of machinery and equipment but only about 10% was actually used for this purpose because Romanian firms won most ICBs. Although the Bank was not satisfied about procurement procedures in Romania, no action was ever considered in this regard. Hence the projects missed the opportunity to import and utilize more efficient techniques and continued relying on locally made but obsolete equipment. 6.07 Other exogenous constraints common to centrally-planned economies have also been underestimated by the Bank: the quasi-permanent shortages of materials, spare parts, fuel, power and agricultural inputs; and the low motivation of cooperative members and state farm employees due to the absence of rewards and penalties inherent in the economic system. 6.08 While Romania was for many years the only Eastern European Bank member, it is surprising that the results of the Bank-supported irrigation projects have not been more carefully reviewed during and after project execu- tion. One of the findings of this audit is that for many years agricultural yields have been grossly exaggerated by official statistics. The recent recognition that agricultural production stagnated or slightly declined in Romania during the last decade, when irrigation was considerably developed throughout the country, is a clear indication that official data were not reliable at the time the projects were approved and implemented. Moreover, since the Revolution, Government officials openly recognize that agricultural development in irrigation has been much slower than anticipated but that they were forced during the Ceaucescu regime to inflate yields and production in the irrigation subsector for political reasons. Nevertheless, the design of the four projects under review was based on the "success" of the four previous Bank-supported projects (which by that time had not yet been audited) and the assumption that crop yields actually obtained were significantly above appraisal estimates. The Bank should have been more alert. Better super- vision would have helped. Out of 37 supervision missions for the four projects, only nine included an agriculturalist. The Covurlui and Mostistea Projects were visited only one or twice by Bank agricultural staff during project execution. The projects were typical of many Bank-supported irriga- tion projects were engineering aspects are correctly covered but agricultural development is not given sufficient attention. 6.09 In retrospect, it can be concluded that the pressure for lending in the Bank combined with the over-ambitious government program resulted in an over-extended irrigation infrastructure with doubtful economic viability. - 18 - C. Accelerated Disbursement of Bank Funds 6.10 An obvious reason (though not an excuse) for the poor knowledge of Bank staff regarding the projects' agricultural performance was the secrecy and disinformation pursued by the previous regime. In addition, the fact that government broke its relations with the Bank very soon after the closing date of the four loans and no field visit by Bank staff could take place after 1986 also contributed to lack of Bank understanding. However, an additional reason, the project financing arrangements, further limited the Bank's super- vision and technical assistance role. Because of the low foreign exchange component of the project investments, the Bank funds only covered about 20% of the total project costs and were expected to be used exclusively for the procurement of construction equipment and farm machinery. In fact, while the physical construction of the project infrastructure suffered considerable delays, equipment and machinery were quickly purchased and all Bank funds were disbursed during the first two or three implementation years. Therefore, all four Bank loans were closed ahead of completion and, in one case, about four years before the then estimated completion date. As a result, the Bank lost contact with the projects, which at the time of loan closing were less than 30% complete. It is worth noting that a similar problem affected the Rasova- Vederoasa project in 1981, but in that case the Bank continued supervising the project after the closing date and the PCR was prepared only after physical completion of project works. 6.11 As already mentioned by the PCR of the Rasova-Vederoasa and Ialomita-Calmatui projects in 1984, and the PCR of the four projects under review in 1990, project experience showed the need for the Bank to link its disbursements to the construction of civil works, even when Bank funds are used exclusively for the procurement of equipment and machinery. The fact that the Bank loans were closed long before the irrigation infrastructure was completed partly explains the poor knowledge of the Bank regarding the performance of its irrigation projects despite long and considerable support to the subsector. D. Future Prospects 6.12 Since Romania resumed relations with the Bank in 1990, a consider- able amount of sector work has been carried out. Because of its importance to the country economy, the ir.%gation subsector is under scrutiny by both the Bank and the Government. A comprehensive study of the subsector is under preparation by consultants to review the needs for maintenance, rehabilitation and modernization of existing schemes and determine a plan of action for the years to come. One of the major problems of the subsector is that uneconomic diesel pumps are still in use on about 50% of the irrigated area. Other constraints include: inadequate energy supply; worn out and obsolete electric pumps; shortages of maintenance equipment; incompleteness of canal lining and drainage. Another problem has been the predominantly engineering approach to irrigation in Romania, with little attention to agronomy and economics. 6.13 In the coming years, the Bank support to the irrigation subsector will be essential for the success of the new liberalization and privatization - 19 - policy. One of the priorities is to introduce higher value crops with lower water requirements and more modern techniques of irrigation than those used hitherto in existing schemes. In this respect, the subdivision of large cooperatives into smaller and individual plots may be a positive factor as farmers will be more inclined to intensify agriculture than they were under the previous collective system. The Bank may have an important role in supporting agricultural credit and extension for the new smallholders. 6.14 While the subsector study will guide future Bank support for irrigation in Romania, there is little doubt that completion of the irrigation and drainage infrastructure in the four projects under review would generate a satisfactory return, at least in the schemes where the main headworks and canals have already been constructed. However, as long as the current power shortages and water under-utilization persist the completion of civil works is certainly not a priority. Helping individual farmers to develop their land and assisting public and private enterprises to efficiently provide agricul- tural services to farmers is of more crucial importance during this transition period. x ~IE AND ACTOAL PESICAL INFRASTUCT~RE m Ta PR~JECTS Sub-Projecte S.A.K. Actual S.A.A. Actual 8.A.1. Actual S... Actual S.A.R cual Facilties Eatimae aition Ratt* eti~at C Ietion Uatio Estisate Coffletion etto etema Com1stion Ratto Euttnate omlatiom Katig mar 79> (Dec 90) (2) (Okr 79) ( 9) (9) (Dc79) (bic 90) (M (Oov N0) (Dac 90) (m (oo, 40) ( 0) mE 1. 1G10ATIO UfS <ha) 1s 340 130 .30 3 3 980 27 240 114 141 700 94 66, ,7 36 800 34 17 93 9 760 43 263 72 1.1 ew 4yst4 (ha) 1383 40 150 130 93 23 980 27 240 114 141 700 90 172 64 36 800 29 141 79 59 760 36 08 60 1.2 Iwzrov~ t t(he) . - - - - - - 4 493 3 - 5 016 14 - 7 185 12 2. DuM ~ I(m) M 36 43 L ,U381 79 434 98 124_0 9904 L§ 47 10 27841 59 38807 27 744 47 2.1 Surac Drai~g (ba> 82 683 38 821 47 66 930 74 541 111 11 350 9 804 846 40 110 27 811& 69 46 200 26 694 5t 2.2 Sub-ourfac Draag <ba) 4 238 - - 14 433 4 893 34 1 100 - - 7 040 30 - 12 607 1 050 8 3. LAD & ~ TIOR(ha) 13344 3 486 26 9 200 302 3 45 000 59 311 132 10 405 9 383 90 12 607 - - 3.1 Soll Krosion Control (ha) 13 346 3 486 21 - - - 44 300 59 11t 134 10 405 9 383 90 - . - 3.2 ai eoUle Lecamattom <ha) • - 9 200 302 3 700 • - - - • 12 607 - 3.3 Samdy Area Uclmatom (ha> - - - - - - - - - 4. ~ALLETDIP ~ 4 = 267 219 _82 et 38 a7 240 2 5. r10D ~ET 0M DanS (ha) -- sim1 PM1 C1~OA TinnTO Sub-Project racilltiae a..1 Actual SÅ.1. actual S.A. Actual S.Å.1. actual S.A.a. Actual Eatlimat, Canistion Raatio zetiat. Cplöcton utio sttmatt Cmltation Kt te le CpletIon Katio Eatiete Cplötioa atlo <Ut, 80) (Dc 90) (2) (ov 80) ( 90) () (Mar 81) (Dec 90) (M> (Har 81) (Dec 90) (M> (79-81) (Da 90) (2) 1. IR10ATIOUNS 0 13 687 13,717 . 29 930 533 32 8 000 76083 8101 597074 49178 8 al- 1.1 ~w Syne (ha) 15 487 8 981 17 29 930 6 358 21 84 500 73 291 87 37 384 37 800 101 388 281 439 194 78 1.2 Ipravent ha) - 4 736 30 - 3 173 - 3 500 2 792 80 3 293 5 194 98 8 793 32 591 4 2. 0RAINAG ES (hal 22 442 8300 37 30 374 31 t88 103 46 500 20 805 43 37647 24 430 a5 423 696 269 079 64 2.1 Surface Dra*ag (ha) 13 687 8 3004 53 23 284 26 3214 134 38 500 20 690° 54 34 347 24 097 70 359 091 257 279 72 2.2 Sub-surface Dralage(h) 6 773 - - 7 090 5 39 73 8 000 115 1 3 300 333 11 64 605 11800 18 3. ADL zC~ TION såfa} 3773 3322 8 ,U ,83 8 1730 5351 9 . - _ _- - 101 147 82340 81 3.1 SoLl gronion Cntral (ha) - 3 322 - 890 - 1 730 1 633 96 • - - 70 669 77 133 109 3.2 Salie Soil e .claaation (Na) 3 775 • - 196 843 550 - - - - - 26 478 1 185 4 3.3 Samdy Area Reclamation (Ma) - - - - - 4 000 4 000 100 - - - 4 000 4 000 100 4. AAE IPN NENT (he) 13 , . . - __ . 8 _1 - - _s 643 431 -7 3. 9~0D DM r0 oANs (.).. 4 . . . B Imudig Iprowaeet of 9 736 ha. - Imna~n ~* aapme.t of 8 601 ha. • xn~ing zeprovcemmt e 6 Gso. 4 Ir ement omly. * lc&is lagroaet of 3 443 ha. TOTAL ANNUAL COSTS FOR O&M IN THE 9 SUB-PROJECTS (Average 1988-1990) SUB-PROJECTS Covurlui Mostistea Calmatui Suret, Prut Buzau Buesani Caracal Titu 1. TOTAL ANNUAL O&M COST 1.1 Constant 1990, (1,000 Lei) 94,695 19,380 131,463 15,574 41,855 103,483 34,723 1.2 Constant 1990, (1,000 US$) 4,227 865 5,869 695 1,868 4,620 1,550 2. Project Area 2.1 Equipped Area (ha) 116,668 27,240 111,357 20,320 27,669 58,117 35,013 2.2 Irrigated Area (ha) 54,300 22,580 99,438 12,398 17,600 29,852 10,570 2.3 Irrigated/Equipped Area (2) 47 83 89 61 64 51 30 3. Total Pumped Volume (M3) 111.71 31.82 234.94 37.17 78.71 120.67 11.16 4. Total Electric Power Consumption (HWh) 27,714 8,526 119,484 5,005 20,121 43,967 2,862 5. Average Pumped Water Demand at Bead 2,057 1,409 2,363 2,998 4,472 3,930 1,056 Works per Irrigated Area (aj/ha) 6. Averaie Electric Power Consumption per 0.25 0.27 0.51 0.13 0.26 0.36 0.26 Pumped Water (KWhfm) 7. ANNUAL O&M COST PER IRRIGATED AREA 7.1 Constant 1990. (Leilha) 1,744 858 1,322 1,256 2,377 3,467 3,285 7.2 Constant 1990. (US$/ha) 77.85 38.31 59.02 56.06 106.08 154.76 146.64 8. ANNUAL 0&M COST PER PUMPED VOLUME 8.1 Constant 1990 (Leill 000 M3) 848 609 560 419 532 858 3.111 8.2 Constant 1990 (US$/1 000 a3) 37.84 27.18 24.98 18.70 23.73 33.29 138.89 ea, - 23 - Annex 2 Table 2 WATER CHARGE RATES Current Lei 1990 Constant Lei 1990 constant US$ 1988 1989 1988 1989 1. Fixed Rate Per ha of crop alfalfa 183 239.7 234.2 10.70 10.45 fruit 122 159.8 156.1 7.13 6.97 vegetables 195 255,4 249,6 11.40 11.14 others 138 180.8 176.6 8.07 7.88 Per ha of farm 102 133.6 130.6 5.96 5.83 cooperative state farm 294 385.1 376.3 17.19 16.80 2. Variable Rate Per 1,000m3 of 18 23.6 23.0 1.05 1.03 pumped water ANNUAL O&M COSTS AND ANNUAL WATER CHARGES IN THE 9 SUB-PROJECTS SUB-PROJECTS Covurlui Mostistea Calmatui Se.j .Prut Buzan Buesani Caracal Titu 1. Annual O&H Cost (Lei/ha)1 2,162 895 1,254 1,365 2,474 3,932 3,563 2. Annual Water Charges (Lei/ha)1 429 428 429 472 478 467 386 3. Annual Water Charges/Annual 0&H 19.8 47.8 34.2 34.6 19.3 11.9 10.8 Cost Ratio () NOTE: No water charge was collected in 1990 Average 1988-1989; 1990 Constant Lei EXCHANGE RATES, DEFIATORS, INFLATORS YEAR 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 Average Exchange Ratesil 18 15 15 17.2 21.3 17.1 16.2 14.6 14.3 14.9 22.4 (Lei/US$, period average) Price Deflator Indexki 100 102.2 119.5 125.7 127.1 126.7 126.6 128.5 135.5 138.5 177.5 (consuer prices) Price Inflator Index 177.5 174 148 141 140 140 140 138 131 128 100 ! Source IMF Source IMF (80-86) - Mission estimate (86-90) - 26 - Annex 3 Table 2 FINANCIAL AND ECONOMIC PRICES FOR THE MAIN PRODUCTS (Lei/Kg) Financial Economic Wheat 2.3 3.5 Maize 3.0 2.4 Barley 2.2 2.6 Soya 6.5 6.8 Sunflower 4.3 5.0 Sugarbeet 0.65 0.9 Fruits-vineyards 6.0 6.0 Vegetables 2.8 2.8 Alfalfa (hay) 1.0 1.0 0 and M costs: 2,300 LAi/ha Net additional benefits: 7,379 Let/ha M 0 S TI STE A Economic Cash Flow (1990 constant prices - Million Lei) YEAR 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 d 2005 2006 2015 2016 2004 1 1 2014 2024 Investsent costs Irrig. and 282 277 364 282 321 328 306 291 585 620 289 98 20 30 42 drain works Other 62 78 133 103 105 90 investmentsil Replacement costs 120 130 500 500 0 and M costa 20 41 55 59 64 99 133 155 155 207 241 276 345 345 345 345 345 345 345 Sub Total 344 355 497 385 426 438 347 346 654 684 388 231 175 185 249 241 396 475 345 345 845 345 845 345 Benef its Net additional 32 106 170 214 236 284 387 473 505 588 726 837 1003 1107 1107 1107 1107 1107 1107 Incremental net Benefits -344 -355 -497 -385 -426 -406 -241 -176 -440 -448 -104 156 298 320 339 485 441 528 762 762 262 762 262 762 E.R.R.: 8.32 (45 years) Irrigated area 8.8 18 24 30 28 43 58 67.5 67.5 90 105 120 150 (100 ba) - -J I-a0 *i A 'Power supply, relocation of eomuanicationsI 0 and M Costs: 2,000 Lei/ha Net additional benefits: drainage: 2,334 Lei/ha drainage + irrigation: 4,059 Lei/ha CALMATUI Economic Cash Flow (1990 constant prices - Million Lei) 98 2008 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 A 2007 6 2017 12006 2016 - Investment costs Irrig. & drainage worke 2 44 121 269 281 302 200 155 135 69 53 1 Replacement coste 73 73 73 and H Costs 6 16 24 32 44 50 46 46 50 5 54 54 54 4 54 54 54 kub-Total 12 441 121 1269 287 1318 224 1187 1179 119 99 146 50 54 54 54 54 1127 154 11271 54 1271 - Benefits fet additional drainage 9 16 28 33 38 50 66 89 89 89 89 89 89 89 89 89 89 89 89 iet additional irrigation 5 16 40 56 76 94 101 101 101 104 108 108 108 108 108 108 108 108 Flood Control 5 9 16 21128 28 28 28 28 28 28 28 28 28 28 28 Sub-Total 9 211 49 82 1 110 1147 1188 1218 1218 218 12211 225 1 225 j 225 1 225 1 225 1225 1225 225 et incremental benefits -21-44T-121 -260 1-266 1-2691 -1421 -771 -32 169 1119 1172 1168 1671 171 11711 171 1 98 1171 198 171 98 .R.R.: 8.52 (41 years) rained area (000 ha) 4 1 7 12 14 1 16 21 28 38 - -1 - Irrigated area (000 ha) 1 3 8 12 16 122 125 123 23 25 27 mx 0 and H Costs: 3,100 Lei/ha Net Additional Benefits: 8,588 Lei/ha C 0 VUR LUI Economic Cash Flow (1990 constant prices - Million Lei) 99 2009 2019 Year 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 1 2008 A 2018 d 2007 2017 2023 - Investment Costs Irrig. drainage works 142 288 346 515 867 846 745 614 741 616 272 113 Replacement Costs IV 300 300 300 0 and M Costa 8 11 35 67 110 159 175 175 175 205 232 263 291 291 291 291 291 291 291 291 ] Sub-Total 1421 2881 3461 515- 8751 857 780 681 851 1.775 4471 17S 175 2051 232 ,2631 2911 2911 5911 2911 59,1 2911 591 1291 -Benefits I Met additional 11 26 64 1421 245 373 463 485 1 485 526 605 687 768 807 807 807 807 807 807 807 Incremental net benefite -142 -288 -346 -5151-8641 -831 -716[ -5391-606 -402 16 13101 3101 321 3731424 4771516 216 516 216 516 216 516 E.R.R.: 5.52 (45 years) area (000 ha) 2.6 3.5 11.5 21.5 35.5 51.3 56.4 56.4 56.4 66 75 85 94 0 and M costs: 3,200 Lei/ha Net Additional Benefits: 7,99 Lei/ha B U C S AN I Economic Cash Flow (1990 constant prices - Hillion Lei) 2000 2011 Year 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 A 2010 a - - - - - ........ 2009 2019 - Investment costs Irrigation & drain works 142 156 365 286 166 120 24 21 15 1 14 7 30 30 26 Replacement Costa 60 61 121 0 and M costs 32 42 51 61 86 61 96 105 115 115 115 115 115 115 115 115 115 115 o Sub-Total 142 156 365 286 1661 1201 56 1 63 66 62 100 68 126 135 141 115 115 115 115 175 1 115 236 115 - Benefits Net additional 40 92 116 1401 184 216 228 252 276 288 288 288 288 288 288 2 28288 288 Incremental net benefits -142 -156 -365 -286 -166 -120 -16 29 50 78 84 148 102 117 135 173 173 173 173 113 113 173 52 173 I.R.R.: 7.252 (40 years) Irrigated area (000 ha) 10 13 16 19 271 19 30 33 36 on 0 and M Costa: 1,600 Lei/ha Net Additional Benefits: 10,047 Lei/ha BU ZAU Economic Cash Flow (1990 constant prices - Million Lei) 2000 2006 2016 Year 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 A 2005 A 2015 A 2004 2014 2024 - Investment costs Irrigation & dran.vorks 127 162 255 252 1234 483 390 165 40 56 Storage dam 200 200 425 1 Replacement costs 128 128 128 0 and M costs 5 16 19 24 27 30 40 56 75 75 75 75 75 75 75 75 75 75 Sub-Total327 362 680 252 1239 499 409 189 67 186 40 56 1203 175 1751 75 75 75 203 75 203 75 - Benefits Net additional -252 15 65 110 135 160 1180 220 300 410 471 471 471 1471 1471 471 4711471 471 Incremental net benefits -327 -3621-680 -2521-1224 -434 -299 -54 83 94 180 244 207 396 396 396 396 396 268 396 268 396 I.R.R.: 5.752 (41 years) Irrigated area (000 ha) 3 10 12 15 17 19 25 35 47 0 and M costs: 2,000 Leilha Net Additional Benefits: - drainage: 2,334 Leilha - drainage + irrig.: 8,588 Lei/ha SIRET Economic Cash Flow (1990 constant prices - Million Lei) 96 2006 2016 Year 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 A 2005 A 2015 1 2004 2014 2024 - Investient costs Irrigation and drain.works 33 40 62 55 157 28 113 84 70 31 Replacement costs 41 41 41 0 and IN costa 17 17 18 24 27 27 27 27 27 27 27 Sub-Total 3 40 62 55 157 28 113 84 70 48 17 118 24 27 68 27 68 27 68S27 -u-Tta Lr3 1 40 1 62 T8 1 27 - Benefits et additional 2 2 9 16 16 17 17 17 34 73 79 111 118 118 118 118 118 118 118 Incremental net benefits -33 -38 -60 -46 -141 -12 -96 -67 -53 -14 56 61 87 91 50 91 50 91 50 91 .R.R.: 8.75% (40 years) rained area (000 ha) 1 1 4 7 7 7.2 7.2 rained + irrigated area (000 ha) -8.3 8.3 9.0 12.21 13.71 1 0 and H Costs: 2,000 Lei/ha Net Additional Benefits: 8,588 Lei/ha PR U T Economic Cash Flow (1990 constant prices - Hillion Lei) 96 2006 2015 2016 Year 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 1 2005 A & 2004 2014 2024 - Investment costs rrigation I dran.vorks 23 121 78 96 138 122 166 227 247 204 169 75 50 70 120 120 Replacement costs 78 78 78 0 and M costa 4 5 6 6 8 8 9 11 17 27 39 44 49 49 49 49 49 Sub-Total 23 11211 781 96 [1381 12611711233 253 212 177 84 61 87 14711591122 49 127 49 127 49 Benefits Net additional 9 19 23 25 29 35 38 44 60 94 142 177 210 210 210 210 210 Flood control 2 3 5 7 10 10 10 10 10 10 110 110 in 10 10 10 10 10 Sub-Total . 2 12 24 30 35 39 45 48 54 70 104 152 187 220 220 220 220 220 ncremental net benefits -23 -121 -78 -96 1-1361-114 -47 -2031-218-173-132 -36 -7 -17 -431 -7 65 1171 93 1 7 1 93 171 I.R.R.: 5.75% (45 years) rrigated area (000 ha) 2.1 2.3 2.9 2.9 4 4.1 4.8 5.5 8.5 13.5 19.5 22 24.5 0 and H Costs: 4,100 Lei/ha Net Additional Benefits: 7,177 Leilha CARACAL Economic Cash Flow (1990 constant prices - Million Lei) 2001 2010 2016 Year 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 A 2008 2009 A 2015 6 2007 2014 2018 - Investment Costs Irrig. i drainage 65 222 351 567 665 524 546 385 135 26 50 100 100 works Storage Dam 52 109 110 151 87 Replacement Costs 30 60 60 150 150 205 1 and M Costs 33 70 135 119 143 143 184 225 287 348 348 348 348 348 348 348 348 348 348 348 Sub-Total 52 1174 1332 1502 1654 1665 557 1616 1520 1254 1169 1193 1284 1325 1287 3481 348 1378 1408 408 348 498 1498 1348 1553 348 - Benefits Net additional 28 89 180 237 245 251 287 359 448 556 611 611 611 611 611 611 611 611 611 6114 Flood Control 5 13 1717 1 17 17 1 17 17 17 1 17 17 17 17 17 17 17 17 17 17 7 Sub-Total 5 13 145 106 197 25412621268304 376 4651573 6281 6 628 6 _28 628_ 628 628 1628 1628 628 Incremental net benefitk -52-174-332I-502j-6491-6521-5121-510-323 193 175 201 51 1178 1225 280 2501 220 220 280 130 130 2801 75 280 E.R.R.: 3 2 (45 years) Irrigated area (000 ha) 8 17 33 29 35 35 45 55 70 85 7-1 e; 0 and M Costs: 3,600 Lei/ha Net Additional Benefits: 7,031 Lei/ha TIT U Economic Cash Flow (1990 constant prices - Hillion Lei) 2000 2010 2020 Year 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 1 2009 A 2019 1 2008 2018 2028 - Investment costs Irrigation & drain.vorks 66 164 346 423 307 200 110 48 20 20 31 Storage dam 50 100 1091 Replacement costs 160 241 160 3 and H costs 6 14 32 36 42 52 58 89 115 148 148 148 148 148 148 148 148 148 148 Iub-Total 116 264 455 429 321 232 146 90 72 78 120 115 148 148 148 148 13081 148 138911481 308 148 - Benefits et additional 6 19 46 67 76 92 107 143 199 255 288 288 288 288 288 288 288 288 288 Incremental net benefits -116 -264 -455 -423 -302 -186 -79 -14 20 29 23 84 107 140 140 140 -20 140 -101 140 -20 140 I.R.R.: 3 2 (45 years) Irrigated area (000 ha) 1.6 4 9 10 11.8 14.5 16 25 32 41 MAP SECTION 신 [BIRD 13934 ROMANIA NOVEMINER 1978 Mosfi$tea & Ciblirrlätui Irrigation & Drainoge Project CALMATLI1 Project area bourolory Water delivery conals B AU 1100DP: AlIN 1 1 Distribution cannis UZ Ground pipe network (FuTUPý 10 Renumping and Presme pumping sfotions Ouz u 41 IANCA, Droin channels 3S - SeCondory droinogeconels --------- Tile tuba t. M-4 10 Fihp-ft i Nonsoline landwitthsurfacedrorrageandirrigationfrom Du-be Soline lands with surfacc and subsurfoce droinoge and reciaýatioýýorksforJeochingandirrýgationfromtheDGnube Nonsuline land with surface drortoge and without imgotion s P' 1. ------ p G.1bin.p Soline lands without irrigation ond reclarnation works. B.M. Areas not part of project B..d..v.,de ýi sting irrigation schemes V.Fn. JI E Towns ond villages Roads 1i,-v Pi Raflways Rivers c-' Lokes Judet boundory (District boundary) z RP02 VIZIRU TERRASE Bdi, , .. , .1 ', I C, 11,1 1 , , za-m. -01 -41 4 9x,1 i. 28 q, spp, " GARY st..4 5p- H-t R 0 M A N l A ýBerrep, d.J.. 1? 20 0 KILOMETERS Z IBRD 14577 -I---- - -SEPTEMßER 99 VAS LUI D ISTRICT SOCIALIST REPUBLIC OF ROMANIA COVURLUI IRRIGATION PROJECT )s M-a pumping station Repumping stations s i ate.\ i, Pnessure pumping storions So iNou Existi,g punping staton ~T4ini Ssh.> niSioO 7<......Man conals Gt'~~ at - Syphons c p ~Ex-sing cnl ( co iTypical pipe networks WI Siretchesofrvrrq rrgran g aC.rlomaonesh, I DOgusoni Rivers C eDon and reservo'r 9ebonooneasaTde dra,n -- . , , . . Surface dro.nage G A L T . ..... C I Furrow rrigatd reas D Sprinkler nated T,ReCs 1 us1-utureregt,on prolectd TECKc c Cor Forests Ma6 si 0 r . BronesøBridges - Inland ports -- - Ds[rict boundaies (J,dei boundaries) \nd'i O ----Iniernational bounda,,es SPPTR 5P 5 1S Is (05 Ai i\iunsiS , ion, -I 7 urn i n. - Estetter,. nuser "~Tse HobanoOM -iO $ I (n,sl.Pesren K/O ETR-0 5 10 1 VRANCEA - šPES DISTRICT n 5nc Tv "; UNGARY - - U S 5 R Rt r sa..laP RcOM-AN. BR AIL A GArAt . DISTRIC TuosAA TULCEA DISTRICT -f "/; , 1 BULGARIA 一可 ROMANA BUCSANI -BUZAU-SIRET-PRUT IRRIGATION PROJECT BUCSANI P-ect A- B-d,,y P--. p-..q pp 3 E--v P-p,.g P,p.ý Typ,col 1-9-,, N,-k Typ.,,I D,-og, Ne-k sniffiýg B-ý E-lZ D.- D.- U,d., C-1-1,- D.- -d Uýdý, D.-qý C' R-,ý -d Sm.- V l L C E A T.ýh,- E-- c-l'.I T.- $PP A,ýh.l, R.", R.1-y, D,k. P9 B C.-- (Mý,- b.- BI-k S..) B-d.- c \\ý S% 0 L T KI-METER5 L A-g, ýp 11 D- PIAIII HYDROPO ER DE ELOPMENT ON TWHE OLTVRIVER D- u- SR -.5.R ýw , PP2o p Rý -ý'' V- R 0 M A N l A A'IAII osic. 于 方仰 Ch- ROMANIA U IRRIGATION PROJECT 'Wl CARACAL-IIT T ITU Kl pPell 41 x Y, W21 T,~ 'V- Ä ARGES BASIN IRRIGATLON AREAS - ------ LÄ L 7: f- SPRINKLER IRRIGATION FURROVI IRRIGATION EXISTING IRRIGATION R- DRAINAGE D- FORESTS IRRIGATION CANALS ------ OPEN DRAINAGC CANALS DUAL-PU ~ Elä PUMPINGRPOSE CANALS STATiONS SIONOFILAR STATIONS CANTON HEADQUARTERS ILI1,1c IOAD, RAILWAYS 0,- u & s. Rw ru VILLAGES IJFOV.4 7 ]VE 5 n JUDET BOUNDARY SYSTEM R 0 M A N l A