Nepal - Rasuwa - Nuwakot Rural Development Project - Phase II (Third Rural Development Project)

Document of The World Bank FOR OFCIAL USE ONLY Report No. 13629 PROJECT COMPLETION REPORT NEPAL RASUWA-NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE II (THIRD RURAL DEVELOPMENT PROJECT) (CREDIT 1727-NEP) OCTOBER 25, 1994 Agriculture Operations Division Country Department I South Asia Regional Office This document has a restricted distribution and may be used bv recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EOUIVALENTS Currency Unit = Nepalese Rupees (NRs) At Staff Appraisal Report Year (June 1986) US$1 = NRs18.0 At Completion Year (November 1993) US$1 = NRs5O.O FISCAL YEAR July 16 - July 15 WEIGHTS AND MEASURES Metric System ABBREVIATIONS APROSC Agricultural Projects Services Centre DCA Development Credit Agreement HMGN His Majesty' s Government of Nepal IDA International Development Association IFAD International Fund for Agricultural Development IHDP Integrated Hill Development Project IRDPs Integrated Rural Development Projects M&E Monitoring and evaluation MLD Ministry of Local Development MPLD Ministry of Panchayat and Local Development OPS Office of Project Services of the United Nations Development Programme PCO Project Coordination Office PCR Project Completion Report RASNUDEV I Rasuwa-Nuwakot Rural Development Project - Phase I RASNUDEV II Rasuwa-Nuwakot Rural Development Project - Phase II SAR Staff Appraisal Report SDR Special Drawing Rights SFDP Small Farmers Development Program TA Technical assistance T&V Training and visit system of agricultural extension UNVs United Nations Volunteers  FX)R OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation October 25, 1994 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Nepal Rasuwa-Nuwakot Rural Development Project - Phase II (Third Rural Development Project) (Credit 1727-NEP) Attached is the Project Completion Report on Nepal - Rasuwa-Nuwakot Rural Develop- ment Project - Phase II (Third Rural Development Project) (Credit 1727-NEP). Parts I and III were prepared by the FAO/World Bank Cooperative Program and the South Asia Regional Office. Part II was prepared by the Borrower. The project, as initially designed was ambitious and complex. It was the second phase of a development effort in Rasuwa and Nuwakot Districts in the Himalayas, on the China border. It aimed to expand and improve the quality and coverage of the agricultural support services, and to strengthen regional, district, panchayat and village level capabilities for preparation and implementa- tion of rural development programs and the maintenance of rural infrastructure. Little was achieved. Only 28 percent of the credit was utilized. The only elements that performed well were the livestock extension program and the infrastructure component (which was largely completed although the structures were not well maintained). The project was hampered by slow filling of posts, late arrival of technical assistance, and high turnover of staff. These shortcomings led to limited relationships between the project and local communities and a tendency to repeat the unsatisfactory top-down approach of the first project. After a change of government, local government structures were changed with the abolition of the panchayat. This undercut the project further and it effectively stalled from that point. Institutional impact was negligible, sustainability is unlikely and the project outcome has been rated as unsatisfactory. The Borrower, in Part II, notes that relationships between the project and other agencies were weak and that the design of the project did not adequately reflect the priorities of the main line agencies. The completion report provides an adequate account of project implementation. No audit is planned. 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 COMPLETION REPORT NEPAL RASUWA- NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE II (THIRD RURAL DEVELOPMENT PROJECT) (Cr. 1727-NEP) TABLE OF CONTNTS Page No. PREFACE ............................................... i EVALUATION SUMMARY ............. ....................... ii PART I - PROJECT REVIEW FROM IDA' S PERSPECTIVE .... ...... 1 Project Identity ............................................. 1 Background ............................................... 1 Project Objectives and Description ............................... 2 Project Design and Organization ............................... 3 Project Implementation ........................................ 5 Project Results .............................................. 7 Project Sustainability .......................................... 8 Bank Performance . .......................................... 8 Borrower Performance ........................................ 10 Project Relationship .......................................... 10 Consulting Services .......................................... ' Project Documentation and Data ............................... 10 PART II - PROJECT REVIEW FROM BORROWER' S PERSPECTIVE . 12 Evaluation of the Performance .......... ....................... 12 Bank ' s Performance . ....................................... 12 Borrower ' s Performance . ..................................... 12 Lessons Learnt ............................................. 13 PART III - STATISTICAL INFORMATION ....................... 14 Related Credits ............................................ 14 Project Timetable . .......................................... 15 Credit Disbursements . ....................................... 15 Project Implementation . ..................................... 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 World Bank authorization.  Project Costs and Financing ................... 16 Project Costs ................... 16 Project Financing ................... 17 Project Results ................... 17 Direct Benefits ................... 17 Economic Impact ................... 17 Financial Impact ................... 17 Studies ................... 17 Status of Covenants ................... 18 Use of Bank Resources ................... 19 Staff Inputs ................... 19 Missions ................... 20 Costs .............................................. 20  - i - PROJECT COMPLETION REPORT NEPAL RASUWA-NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE 11 (THIRD RURAL DEVELOPMENT PROJECT) (Credit No. 1727-NEP) PREFACE This is the Project Completion Report (PCR) for the Rasuwa-Nuwakot Rural Development Phase II Project (Third Rural Development Project) in Nepal for which Credit 1727-NEP in the amount of SDR16.6 million was approved on July 15, 1986. The total cost of the project amounted to US$23.5 million for which the Bank was to provide US$19.1 million (converted at the SDR exchange rate of that time), UNDP US$1.1 million and the Government of Nepal US$3.3 million in local currency including taxes and duties estimated at approximately US$0.2 million. The Credit was signed on December 4, 1986, became effective after two extensions of the effective date on November 30, 1987 and foreclosed more than five months before the closing date, on July 15, 1993. A total of SDR4.0 million was disbursed and the unutilized balance of SDR12.6 million cancelled; the final disbursement was made on December 6, 1993. The Preface, Evaluation Summary and Parts I and III of the PCR were prepared by an FAO/World Bank Cooperative Program mission which visited Nepal in October/November 1993, and revised by the Agriculture Operations Division of the Country Department 1, South Asia Region. It is based inter alia on field findings (mainly interviews) and on the Project Formulation Report prepared by the Agricultural Projects Services Centre (APROSC), the Staff Appraisal Report (SAR), the Development Credit Agreement (DCA), Supervision Reports, correspondence between IDA and the Borrower, internal IDA memoranda and documentation prepared by UNDP. The Borrower submitted Part II in May 1994.   - ii - PROJECT COMPLETION REPORT NEPAL RASLTWA-NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE II (THIRD RURAL DEVELOPMENT PROJECT) (Credit No. 1727-NEP) EVALUATION SUMMARY Objectives (i) The project was the second phase of the IDA-financed First Rural Development Project (Cr. 617-NEP) covering the Rasuwa and Nuwakot districts in the Central Development Region of Nepal with objectives to: (i) intensify agricultural and forestry development and further the impetus of its predecessor, the Phase I project, in increasing agricultural production, employment and rural incomes in the project area; (ii) ensure that investments made during the earlier phase would continue to yield the expected benefits; (iii) expand and improve the quality and coverage of support services and improve support provided by institutions responsible for rural infrastructure; and (iv) strengthen regional, district, panchayat and village level capabilities for preparation and implementation of rural development programs and for maintenance of rural infrastructure (see Part III, Section 4). Implementation Experience (ii) There have been significant shortfalls between planned and actual project implementation; the only exception being the rural infrastructure component. The total Credit disbursements amounted to US$5.4 million or 28.3% of the original Credit amount of US$19.1 million. (iii) Project implementation was poor mainly due to design flaws, which resulted in the continuation of the same top-down approach adopted under the Phase I project that was to be avoided during Phase II. Other factors that contributed to the project's poor performance were the high turnover of staff, high proportion of vacant posts for extensive periods and inadequately qualified staff filling some key positions (para 5.7); and the Bank' s agreement with the UNDP 's decision to entrust the responsibility for the key element of the project, viz., the TA component, to UNDP/OPS which resulted in the Bank' s inability to keep control over the progress of the project (paras 4.3 and 5.9).  - iii - (iv) There was a time lag of over 12 months between Credit signature and effectiveness. The project start-up was delayed because UNDP and His Majesty 's Government of Nepal (HMGN) could not agree on the TA component and due to procrastination by UNDP/OPS in the recruitment of the TA consultants and by Government in clearing them. The delays in the recruitment of the TA consultants persisted even after the project became effective in late 1987. For instance the Development Management Advisor arrived in the country one year after project effectiveness and three United Nations Volunteers (UNVs) were still not on board by mid-1989. When in 1990 the Government changed and the new Government decreed the abolition of the panchayat system, the project lost its institutional foundation (paras 5.2, 5.9 and 5.10). Eventually, after the Bank had repeatedly insisted on restructuring the project, and the Borrower had remained unresponsive, thereby inducing UNDP/OPS to withdraw when their agreement expired, the Bank and the Borrower agreed to close the project five months ahead of schedule (para 5.12). In the meantime, project monitoring and evaluation had not been conducted throughout, making supervision and assessment of the project ' s progress difficult (para 5.13). (v) The agricultural development component, including irrigation, which accounted for 50% of the total project base costs, had, apart from the top-down approach limitation, several other shortcomings: ineffective extension support; the training and adaptive research that were to be provided, were minimal; the agricultural input supply and the credit components were never implemented because of a general surfeit of development funds for the former and because of disagreements about the scope of on-lending activities for the latter (para 5.3). The sole agricultural activity that more or less functioned properly was the livestock immunization program (para 5.4). Also, the forestry development and soil conservation activities financed by the project differed from the SAR concept and, although one-third of the credit allocation earmarked for these activities was disbursed, no data are available about what actually was achieved and what the accrued benefits were (para 5.5). (vi) Development of rural infrastructure was a relatively successful activity of the project in terms of the high commitment of government and the physical targets achieved, although the works constructed were in many cases incomplete and technically unsound. They have also been poorly maintained (para 5.6). Results (vii) The only relatively favorable results that have been brought about by the project have been the rather effective functioning of the livestock extension services and the curative veterinary services which were provided by the project with medicine and vaccine, and the physically visible, but poorly built and not well maintained, rural infrastructure which was set up mostly without beneficiary/user group participation. No financial or economic impact of the project could be estimated due to the overall poor performance of the project (only about 28.3% of the Credit was disbursed) and lack of data.  - iv - Sustainability (viii) The sustainability of the presently well functioning curative veterinary services depends mainly on the Borrower s continuous budget support and allocation of scarce foreign exchange to these services. Provided the Borrower does so, the project would have contributed to a sustainable element of development, but only partly since it merely supported an already on-going and successful veterinary program - thus the project facilitated rather than established this activity (para 7.2). The sustainability of the rural infrastructure element is less likely, due to the way it was planned and constructed (para 7.1). Findings and Lessons Learned (ix) The project was designed and implemented during an extended period of political uncertainty in Nepal, the consequences of which (policy changes and abolition of certain political institutions) have clearly left their mark. Several shortcomings occurred during both the design and the implementation stages. Not having had much experience, at that time, with Nepal ' s socio-economical/political evolution, the Bank ' s project design approach may be considered as naive or lacking sociological experience. That this deficiency adversely affected project performance is quite certain. In this light, the great haste with which the project was formulated is surprising, except for the wish for continuity with the first phase project. (x) During implementation a new phenomenon emerged, i.e. politically biased support for particular components. After an initial period of dialogue, the Bank should have suspended the project when it discerned the problem rather than attempt, in vain, to persuade an unwilling Borrower to accept its recommendation of restructuring the project. Other important lessons that can be learned from this exercise are: (a) When a project is being prepared in a country which has been dominated by a system of controlled planning, the Bank should realize that local initiatives will not be reinstituted immediately merely due to a change in government policy; the subsequent readjustment comes only gradually and over time. If, under such circumstances, the Bank insists on initiating such a project it should ensure that, in addition to Government line agencies, a strong project execution unit be built into the project (para 4.1). (b) One of the principal lessons of this project is that "Lessons learned" should be learned. Before a new project is designed, lessons learned from previous experiences in the country concerned should be reviewed and perhaps put on a checklist which should be consulted to avoid lapses of memory during the design of subsequent projects (para. 4.5). The same should be done with lessons learned from similar projects in other countries, since some lessons learned may be project rather than country specific. For this reason the Bank  - v - may consider it useful to categorize its wealth of information on lessons learned by type of project as well as by country or type of country'. (c) When a project is predominantly designed as an agricultural development project, its managerial responsibility should preferably be with the Ministry of Agriculture. If the project also includes a component that cannot be executed or coordinated by this Ministry, as may be the case here (rural infrastructure), the execution of this component should be entrusted to another appropriate agency (para 4.2). (d) When the TA component is crucial for effective project implementation, the Bank should insist on financing the component to ensure that it can supervise the component directly (4.3). (e) Finally, when a third party plays an important role under the project, the Bank should include a cross conditionality clause in the DCA to apply when, for whatever reason, the third party withdraws from the project, and a cancellation clause to cover the event that alternative funding and executing arrangements for the component funded by the third party have not been made within a reasonable time (para 12.2). (xi) An important lesson for the Borrower is that a project should not be handicapped by frequent changes of senior staff and positions left unfilled for long periods of time. 1. The Bank already offers the "Evaluation Text Based (ETB) Data Base" available on line in All-in-1, the 'Precis' series for selected projects and the recently launched "Lessons & Practices".  PROJECT COMPLETION REPORT NEPAL RASUWA-NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE 11 (THIRD RURAL DEVELOPMENT PROJECT) (Cr. 1727-NEP) PART I - PROJECT REVIEW FROM IDA' S PERSPECTIVE 1. Project Identity Project Name Rasuwa-Nuwakot Rural Development Project - Phase II (Third Rural Development Project) Credit No. Cr. 1727-NEP RVP Unit South Asia Country Nepal Sector : Agriculture Sub-sector Rural Development 2. Background 2.1 In line with the Government ' s stated policy in the Fifth Five-Year Plan (1975- 80) to promote regional balance and improve the living standard of all rural people, the First Rural Development Project (Cr. 617-NEP) or Phase I of the Rasuwa-Nuwakot Rural Development Project (RASNUDEV I) was launched in 1976-77. This project was the first of its kind in Nepal and was also among the early rural development projects financed by the Bank under its new poverty orientation strategy defined in 1973. As such, RASNUDEV I represented a pioneering concept for the Bank as well as for Nepal (Part III, Section 1). 2.2 During the Sixth and Seventh Five-Year Plan periods (1975-1985), Government had been increasingly allocating resources to the agricultural sector with emphasis on rural development through Integrated Rural Development Projects (IRDPs) and the Small Farmer Development Program (SFDP). The objectives of SFDF were to cater to the needs, including credit, of small and marginal farmers. 2.3 Meanwhile in 1980 a new Ministry of Panchayat and Local Development (MPLD) was created with responsibility for inter-ministerial coordination of rural  - 2 - development projects and local infrastructuie development as two of its primary objectives. Finally in July 1985 the Decentralization Act and Rules came into effect giving District Panchayats considerable administrative, supervisory and financial control over the various line departments at the district level in matters of project formulation and implementation. This Act, it was believed, demonstrated strong and sustained commitment from Government to the development of the rural sector. 2.4 Within this overall scenario and to consolidate the gains made under RASNUDEV I, His Majesty 's Government of Nepal (HMGN) in 1983 requested Bank assistance for follow-up Rasuwa-Nuwakot Rural Development Project - Phase II (RASNUDEV II). Thus, RASNUDEV IIV was conceived even before its predecessor project was completed in 1983. 3. Project Objectives and Description 3.1 RASNUDEV II's objectives were to: (a) intensify agricultural and forestry development and further the impetus (created by RASNUDEV I) in increasing agricultural production, employment and rural incomes in the project area; the districts of Rasuwa and Nuwakot; (b) ensure that investments made under RASNUDEV I continued to yield the expected benefits; (c) expand and improve the quality and coverage of agricultural support services and improve support provided by institutions responsible for rural infrastructure; and (d) strengthen regional, district, panchayat and village level capabilities for preparation and implementation of rural development programs and for the maintenance of rural infrastructure. 3.2 These objectives were to be achieved through the following components: (a) Agricultural Development: Strengthening of agricultural extension, research, credit and other key support services; construction of new irrigation schemes and rehabilitation/maintenance of existing ones; establishment of private fruit orchards; improvement of preventative and curative animal health services and the genetic potential of large and small ruminants; (b) Forestry and Soil Conservation: Afforestation, protection, enrichment, and management of existing forests through community participation; establishment of preventative and curative measures for the protection of upper catchments, minor watersheds, and agricultural lands, infrastructure and settlements on the lower catchments; (c) Rural Infrastructure Development: Construction of new drinking water schemes, suspension bridges and motorable tracks; rehabilitation and maintenance of old and existing structures; strengthening of district level capabilities for operation and maintenance of physical infrastructure; 1. RASNUDEV II was later referred to as Third Rural Development Project as a Second Rural Development Project for Mahakali Hills (Cr. 939-NEP) was approved in 1979.  (d) Institutional Development and Implementation Assistance: Establishment and maintenance of a Project Coordinator ' s Office; strengthening of the planning, monitoring and implementation capabilities and accounting/financial support services of the district offices; strengthening of the regional offices of the Agriculture, Livestock and Irrigation Departments; and (e) Technical Assistance and Overseas Training: Provision of eight man-years of senior and 38 man-years of mid-level specialists/consultants, short term overseas training of key management and technical staff and funds for project/sector related studies. 3.3 Total project costs, phased over a period of eight years, were estimated at US$23.5 million (NRs.423.5 million) and an IDA Credit of SDR16.6 million (US$19.1 million equivalent) was to fund 81% of costs while HMGN and UNDP were to contribute 14% and 5%, respectively. The agricultural development component, including irrigation, was estimated to account for 50% of the total base costs and the forestry, soil conservation and watershed management component and the rural infrastructure development component 14% each. 3.4 The Staff Appraisal Report (SAR) specified that the project would pursue its objectives through (i) concentrating on activities that were directly production oriented; (ii) promoting changes in existing land use and farming systems; (iii) strengthening physical infrastructure and institutions that would directly support investment in agriculture; and (iv) concentrating on small farmers as primary beneficiaries of the project, through their participation, individually and in groups, in the production and distribution of inputs (seeds, planting materials, root stocks, etc.), and in the construction and maintenance of rural infrastructure" (para 4.01, page 15 of SAR). 4. Project Design and Organization 4.1 Having specified the appropriate strategy (para 3.4), the SAR failed to establish an appropriate design to carry it out. This was mainly due to the misconception that HMGN ' s new policy following the Decentralization Act (passed in 1982 and made effective in 1985) would be immediately followed through without problems. The Bank did not fully realize the overwhelming implications of this change of policy and the difficulties of translating it into action. It should have been foreseen that local initiatives which had been largely stifled during the three decades of panchayat rule would not be immediately re- instituted and that political interest at district and panchayat levels would continue to prevail in spite of the new policies. To attempt therefore to follow the from-the-bottom-up strategy that the Bank had in mind (through the panchayats formula) implies that there may have been some naivete or perhaps inadequate understanding of the situation, but certainly the main shortcoming was the haste with which the project was formulated. The reason for this may have been the wish to ensure continuity with the previous project, though this was not considered to have been a great success. RASNUDEV I was completed in 1983 when RASNUDEV II was already prepared. However, pre-appraisal of the second phase project was undertaken about one year later and the appraisal two years later (though barely any  - 4 - changes in concept were made), while the Board approved it three years later. In retrospect, the initial haste was therefore not justified. 4.2 Although the Bank ' s misconception of the Nepalese situation at that time had an adverse effect on the implementation of nearly all the components of the project, the fact that the Project Coordination Office (PCO) was placed under the Ministry of Panchayat and Local Development (MPLD) weakened the Bank ' s intention of giving the project a strong agricultural slant. As became increasingly evident, the focus of the Government was mainly on rural social infrastructure rather than on agriculture or any of the other components. Even after the change of Government and of the subsequent name change of the ministry from MPLD to MLD (the word Panchayat was dropped), the Ministry 's interest in this component prevailed. Although MPLD may have been the logical entity to coordinate multi-sectoral projects such as RASNUDEV II, serious consideration should have been given to other options in view of the importance of the agricultural development component. Had the project been under the Ministry of Agriculture, more attention would indeed have been given to agriculture development and, in that event, the implementation of a component such as the rural infrastructure component, which could not be executed or coordinated by the Ministry, could have been assigned to another agency such as MPLD. 4.3 The project also included an important technical assistance component (attached to the PCO) around which the project was centered, that was managed by a third party, UNDP/OPS. Originally, the technical assistance component was to be financed by the Bank and would thus have been supervised directly by the Bank. However, at a late stage HMGN insisted on using UNDP funds to finance this component. Although UNDP/OPS agreed to the Bank being treated as an interested party in their separate technical assistance agreement with HMGN, this arrangement made Bank supervision much more difficult. In a situation under which the success of the TA component was crucial for pursuing effective implementation of the overall project, the Bank should have insisted on financing the component thus keeping it under its direct supervision. 4.4 Drawing on sufficient experience elsewhere in Nepal and particularly under RASNUDEV I with the problem of ineffective Monitoring and Evaluation (M&E), the SAR clearly spelled out that the Local Development Officer in each district, which were to be provided with an enumerator team, would be responsible for project M&E. Subsequently, however, it was decided for unclear reasons that the line agencies themselves would be responsible for monitoring with the help of the UNVs under the TA. With hindsight it might have been better to have followed the original plan, since the revised system was not clearly defined and prescribed, and in the end obtained thoroughly inadequate data. 4.5 At the same time, although the SAR specifically stated that the lessons learned from Phase I had been taken into account, in actual fact three of the main lessons of experience were ignored. Firstly, RASNUDEV II continued to have too many components making its implementation complex, and overloading the local institutional capacity. Two components included in the previous project were omitted in Phase II, but several other sub- components were added. Secondly, although it was recognised that the previous project was too large an investment for the absorptive capacity of the project area, the total investment under Phase II was more than twice as large as that under Phase I. Finally, RASNUDEV II provided for continued financing of incremental operating costs despite experience from  Phase I that showed this should not be considered since it was likely to further dependence on external financing (to ensure continuity of services) as well as requests for "second phase" projects with still higher service and maintenance components - IDA financed some 350 incremental line agency staff under Phase II. 5. Project Implementation 5.1 There were significant shortfalls between planned and actual project implementation; the only exception being physical achievements under the rural infrastructure component. Consequently, total disbursements amounted to US$5.4 million or just 28.3% of the original Credit amount. Mainly due to the design flaws, project implementation was poor and characterized by the same top-down approach for delivery of infrastructure and technical services that had been adopted under Phase I and which was to have been avoided during Phase II implementation (para 4.1). Feelings of project ownership by beneficiaries, that were to be created through the intended bottom-up approach, were therefore far from realized. Local panchayat leaders "brought" development to their constituents, to gain political favour, and to induce them to form user groups. As a consequence, few beneficiary groups were formed and most of those that were, were poorly organized and not operational. Their involvement in design, construction, maintenance and repair of the project facilities (let alone their contribution to cost recovery- - which was the original intention) was negligible. 5.2 The "coup de grace" for the project came with the abolition of the panchayat system following the change of Government in 1990. As a result, the institutional foundation of the project disappeared and the project came to a virtual standstill. Proposals for project restructuring were immediately tabled by the Bank. Only after at least a year, and after UNDP had withdrawn from the project--their agreement expired in September 1991, did HMGN agree to restructure the project. Nevertheless, HMGN still took no action and the Bank finally, after having exhausted all its efforts to communicate, failed. In the meantime HMGN continued building rural infrastructure, despite the Bank 's repeated warnings that these expenditures may not be reimbursed. 5.3 The agricultural development, which was supposed to be the most important aspect of the project, did not materialize. Extension was to introduce a T&V type system but this apparently did not function well. Agricultural assistants barely received any training. The training associated with mini-kit distribution, was also not effective. Research farms, which were supposed to carry out necessary adaptive research and distribute seed, concerned themselves mainly with the latter. The agricultural input supply and credit components were never implemented because of a general surfeit of development finance for the former and because of disagreements about the scope of on-lending activities for the latter: IFAD apparently had initiated an agricultural credit project, similar to the one proposed under RASNUDEV II, but on a national scale and covering the project area of RASNUDEV II. 5.4 The sole agricultural activity that can be considered as having had some success, was livestock. Livestock extension efforts were more systematically organized, which resulted in a positive relationship with user groups, which in turn resulted, among others,  - 6 - in an effective livestock immunization program. However its coordination effort with the agricultural crop extension group (to promote fodder crop cultivation) was unsuccessful. 5.5 The forestry and soil conservation components were never properly organized. The former eventually followed the same philosophy as the one prescribed under the Government ' s hill community forestry program, which was in principle accepted by the Bank. Although some works were obviously carried out, since about one-third of the Credit allocation for this purpose was disbursed, few actual figures as to what was actually achieved could be found (Part III, Section 4). Reports offer only unqualified statements that works had been carried out. 5.6 The rural infrastructure component, which inter sted HMGN most, fell behind schedule from the start, although eventually more facilities (but of poor quality) were established than was anticipated by the SAR. In the irrigation and drinking water sub- components some beneficiary/user groups were formed, but most of them had not been consulted from the beginning and therefore did not develop feelings of ownership, and did not follow through with operation and maintenance in contrast to those user groups that had been involved from the start. It is not clear whether user groups were formed and consulted for the construction of the other rural infrastructural sub-components, such as trails, and several roads and suspension bridges. However, the works established were in many cases only partly completed and in some cases were technically unsound. They have also been poorly maintained. 5.7 Other factors that contributed to poor performance were the high staff turnover, high proportion of vacant posts for extensive periods and inadequately qualified staff filling some key positions in the line agencies, the district technical offices and the PCO. Three out of a total of five positions in the PCO, relating to planning, administration and training, remained unfilled for almost one year. There were six coordinators assigned to the PCO during the period of approximately five years after the Credit was declared effective (1988- 1993). 5.8 The project 's local funds release system was also an impediment to project implementation throughout its life. It was not until 1993 that this problem was resolved - too late to be of any help. The excessive control by the Financial Comptroller General 's Office (in the Ministry of Finance) of the Special Account operations created extended delays which hindered project implementation. 5.9 The Bank had little leverage with which to improve the project implementation process as the responsibility for executing the key element of the project, viz., the TA component, remained with UNDP/OPS. The latter was given this responsibility by UNDP which financed the TA component. Had UNDP/OPS exerted more authority, things might have turned out somewhat differently, giving an impetus to the project. There was a time lag of over 12 months between Credit signature and effectiveness. The project start-up was delayed because of the inability of UNDP and HMGN to come to terms over the TA agreement, UNDP 's delay in appointing an executing agency for the TA component and procrastination by UNDP/OPS in the recruitment of TA consultants and by HMGN in clearing them. Another reason for the delay in Credit effectiveness was the Government 's inertia in reorganizing the PCO.  5.10 The delays in the recruitment of TA consultants persisted even after the project became effective in November 1987. The Development Management Advisor arrived in the country one year after project effectiveness. Recruitment of the UNVs, required to backstop the staff of the technical line agencies, was even more cumbersome. By mid-1989, three of the five UNV positions were still not filled; the three yet to be recruited UNVs were to deal with the key agricultural development component. 5.11 Finally, after the project had been at a standstill for some time when the panchayats had been abolished in 1990 (para 5.2), in 1991 UNDP started to act less passively. Due to a continued lack of Government ' s response to the Bank ' s proposals to restructure the project and HMGN ' s general apathy towards the project, UNDP unilaterally called a moratorium on training for district level planning, rural organization, user groups, communications campaign planning, and extension methodology. Since the UNVs were still under contract, the technical support for rural infrastructure continued. When the TA agreement expired in September 1991, UNDP/OPS pulled out alltogether. The preparation of the restructuring plan, which was to be funded with UNDP grant funds, now had to be paid for out of the IDA Credit. Although UNDP had withdrawn against the wishes of the Bank, with hindsight, UNDP took the right step. 5.12 Regardless, the Bank continued pressing HMGN to respond to the restructuring proposal. While a response from Government was pending, project expenditures went on and rural infrastructural facilities continued to be constructed against the Bank's advice. T'he project was finally closed on July 15, 1993. In retrospect, the Bank should have suspended the Credit when HMGN continued to delay its response to the restructuring proposals. 5.13 Monitoring and evaluation (M&E), a paramount part of the project plan and totally neglected in the previous phase, was again unsatisfactory (see para. 4.4). Bank missions were repeatedly insistent about the need for M&E. A UNV developed a monitoring system but this was reportedly so technical that it was not considered useful under Nepal conditions. Due to the lack of effective M&E, Bank supervision missions, throughout the project period, were unable to record key performance indicators. 6. Project Results 6.1 Overall, only a few of the objectives of the project have been achieved. No data on production or yields or on any of the components, except for rural infrastructure, had been collected by the project due to the lack of M&E. Although from the national statistics it would seem that intensification of agriculture development may have increased (yield increased for most of the crops grown in the project districts - as well as in the other districts), it is unlikely that this was due to RASNUDEV II. The livestock sub-component on the other hand has been the most successful project activity, particularly the support to the curative veterinary services. It should be noted, however, that the project ' s support was to strengthen an already on-going successful veterinary program. 6.2 The only physical evidence to show for the project are the rural infrastructural facilities that have been constructed in the project area. Although some of these facilities  - 8 - undoubtedly have had a positive impact on the communities in the area, the main concerns remain: many of these are either of poor quality or/and on improper sites or/and in less needy places and there is uncertainty about their operation and maintenance due to lack of local interest (para 7.1). 6.3 Under the circumstances no economic nor financial rate of return could be estimated. 7. Project Sustainability 7.1 As in Phase I the sustainability aspect mainly concerns the infrastructural component since the other components were barely implemented. As in Phase I, repairs and maintenance would be required soon, but most likely not provided, since, as explained before, the facilities were not established through, but for the beneficiaries: the necessary sense of beneficiary ' s ownership was therefore not established, making effective maintenance difficult and thus their sustainability questionable. 7.2 On the other hand, the only other sub-component which was relatively well implemented has been the livestock support services, particularly the preventive and curative veterinary services. These are likely to continue to function with an acceptable level of benefits, provided the regular flow of imported vaccines and medicines is ensured, which will depend on HMGN ' s willingness to allocate adequate budget resources and foreign exchange for this purpose. 8. Bank Performance 8.1 With some exceptions, the Bank performance has been generally commendable throughout the project. The Bank' s conviction, that HMGN ' s unresponsiveness during implementation was due to the political uncertainty at the time and would be only temporary, which led it to continue to insist in vain with the Government to follow the recommendation of restructuring the project, proved untenable. The Bank should have suspended the Credit when the Borrower continued to procrastinate (Section 9 "Borrower Performance"). 8.2 Other shortcomings that could have been avoided by the Bank were: (a) somewhat perfunctory consideration given at the design stage to take account of some important lessons learned from the previous project (well spelled out in the PCR concerned), although it was claimed in the SAR that full cognisance of all lessons of previous experience had been taken (para 4.5); (b) the misconception that the policy and institutional changes including reinstitution of local initiatives will in actual fact materialize shortly following the passage of the then new Decentralization Act even though the panchayat system had been ingrained in the Nepali culture for over 30 years (para 4.1); and (c) allowing execution of the crucial TA component and in the process losing leverage to improve the project implementation process even if managing the component by itself would have meant a departure from the standard Bank policy (para 4.3).  - 9 - 8.3 In principle all other action taken by the Bank was sound although, not necessarily effective, due to HMGN ' s persistent apathy. The supervision missions always correctly pointed out the weaknesses in project implementation and advised insistently, although in vain, that action be taken. 8.4 The principal lessons learned for the Bank are: (a) When a project is being prepared in a country, which has been dominated by a system that has been destroying local initiatives for decades, the Bank should realize that these local initiatives will not be reinstituted immediately merely due to a change in government policy; the subsequent readjustment comes only gradually and over time. Under such circumstances, if the Bank insists on initiating such a project it should ensure that, in addition to Government line agencies, a strong project execution unit be built into the project (para 4.1). (b) One of the principal lessons of this project is that "Lessons learned" should be learned. Before any new project is designed, lessons learned from previous experiences in the country concerned should be reviewed and perhaps put on a checklist, which should then be consulted regularly to avoid lapses of memory during the design of the next project. The same should be done with lessons learned from similar projects in other countries, since some lessons learned may be project rather than country specific. For this reason the Bank may consider it useful to categorize its wealth of information on lessons learned by type of project as well as by country or type of country'. (c) When a project is predominantly designed as an agricultural development project, its managerial responsibility should preferably be with the Ministry of Agriculture. If the project also includes a component that cannot be executed or coordinated by this Ministry, as may be the case here (rural infrastructure), the execution of this component should be entrusted to another appropriate agency. (d) When the TA component is crucial for effective project implementation, the Bank should insist on financing the component to ensure that it can supervise the component directly. (e) When a third party plays an important role under the project, the Bank should include a suspension clause in the DCA to apply when, for whatever reason, the third party withdraws from the project, and a cancellation clause to cover the event that alternative funding and executing arrangements for the component funded by the third party have not been made within a reasonable time (para 12.2). 1. The Bank already offers the 'Evaluation Text Based (ETB) Data Base" available on line in All-in-1, the "Precis' series for selected projects and the recently launched "Lessons & Practises".  - 10 - 9. Borrower Performance 9.1 The Borrower ' s performance right from the stage of the project ' s conception, through the project closure, cannot be rated as satisfactory. The Borrower provided little guidance to the Bank during the conception stage, while during implementation, for which it was principally responsible, it confronted the Bank ' s recommendations, including that for the project ' s restructuring, with apathy and focused mainly on the rural infrastructure component, presumably because this part of the project was politically most appealing. 9.2 On the other hand, it should be realized what the overall environment in the country at that time was and the Borrower had many other important concerns to attend to rather than to ensure that this entire project was properly operating. Its principal concern was to pacify the potential political unrest in the country and the rural infrastructure component appeared to be one of the means to meet that objective. The fact that in 1991 the new Government appeared to be solely interested in this component is, therefore, not surprising. Thus, the reasons for the Borrower ' s relatively poor performance are, albeit not praiseworthy, fully understandable. In this context it is difficult to draw any lessons from this particular experience for the Borrower, except that a project should not be handicapped by frequent changes of senior staff and positions left unfilled for long periods of time (para 5.7). 10. Project Relationship 10.1 The Bank-Borrower relationship in respect of the project was correct, but lacked mutual understanding. Although the Bank had been clear on its ideas and intentions, the Borrower did not share these views which resulted in the situation noted above (para 9.2). 10.2 The Bank-UNDP relationship regarding the project was not transparent, although it appears that close informal contacts were maintained with the TA consultants and during supervision missions with UNDP. 11. Consulting Services 11.1 The consultants were to be recruited under UNDP/OPS procedure and the Bank had little control over their activities; UNDP was responsible for their performance and delivery. Nevertheless most of the UNVs, once recruited and in post (para 5.10), performed generally well under the circumstances, except that the UNV charged with designing an M&E plan for the project prepared too sophisticated a system which was not useful for the project. 12. Project Documentation and Data 12.1 As a consequence of the inability to introduce an effective M&E system, no data were available to the Bank supervision missions and the PCR mission on physical indicators or project results, other than general information through the UNVs reports, (Part III of this  - 11 - report could therefore not be fully completed). Another weakness in the SAR was that the project as spelled out did not emerge in a unified manner, but rather was a multitude of unrelated components. All of these resulted in a confused situation, with perhaps, only a few realizing what the project was supposed to do and few knew at what stage of implementation it really was. 12.2 In retrospect a flaw in the project documentation was that it did not spell out that failure of the Government to ensure adequate funding for the co-financed TA component would be was a cause for suspension of disbursements. A lesson learned here is that in future the DCA should include appropriate stipulations to cover such an eventuality (para. 8.4 - (v)).  - 12 - PROJECT COMPLETION REPORT NEPAL RASUWA-NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE II (THIRD RURAL DEVELOPMENT PROJECT) (CR. 1727-NEP) PART II - PROJECT REVIEW FROM BORROWER I S PERSPECTIVE 13. Evaluation of the Performance 13.1 In the absence of base-line study as well as with weak database, particularly the out-put oriented database system, the performance of agriculture, forestry and institutional capability building remained obscure. The contributions of irrigation schemes undertaken by the project remained at low key because of shortfalls in support services as against the targets. Many drinking water schemes were constructed, but little had been done towards the maintenance and repair aspects. Similarly many trail construction programs were undertaken but they remained either incomplete or poorly maintained. Even where there are signs of satisfactory level of performance, e.g., in curative veterinary and livestock extension services, the overall level of credit disbursement of (28%) puts the project itself below the satisfactory level of performance. 14. Bank' s Performance 14.1 Bank's concern to the project and its consistent follow up, indeed, was commendable. However, disbursement process did not match the level of expectation. On the other hand, the TA component, which was planned to support the Bank in planning, monitoring and evaluation of project and also to co-ordinate and support the program implementation remained as if separate from the Bank ' s control and supervision. As a consequence it was found difficult to bring the programs in tune with decentralization principles and in support of socio-economic development at the grass root level as well as evolving a system of monitoring which is performance-oriented. 15. Borrower' s Performance 15.1 The project had many programs and these programs are not based on clear priorities of the line agencies. Many of the project activities were ignored or were not taken seriously. On the other hand, many of the rural infrastructure programs suffered from the changed policy thrusts, restructuring of ministries and above all by the staff turn over and prolonged vacancy in the sectoral key positions at the district level. Inadequate level of  - 13 - communication, co-operation and co-ordination between and among the actors in the project as well as lack of orientation of new staff have further exacerbated the project performance. 16. Lessons Learnt 16.1 The programs should be based on clear priorities of the people, e.g., trial, irrigation, drinking water, micro hydro power to protect environment and self-reliant IG programs. 16.2 The TA component is crucial for effective project implementation but under the direct supervision of the Bank. 16.3 The project design should be based within the framework of out-put oriented monitoring and environmental prescriptions.  - 14 - PROJECT COMPLETION REPORT NEPAL RASUWA-NUWAKOT RURAL DEVELOPMENT PROJECT - PHASE II (THIRD RURAL DEVELOPMENT PROJECT) (CR. 1727-NEP) PART III - STATISTICAL INFORMATION 1. Related Credits' LIA/Credit Title Purpose Year of Status Com ents Approval Rauwa-Nuwakot Project designed to increase 1976 Project was completed with Project was predecessor Rural Develop- agricultural production including two-year delay in 1983 and to Cr. 1727-NEP. Lessons ment Project I livestock, halt depletion of natural the Credit was fully dis- learned from this (Cr. 617-NEP) resources and improve physical bursed. Implementation experience were claimed and social infrastructure in the emphasis was on develop- to have been taken into districts of Rasuwa and Nuwakot. ment of infrastructure account in Cr.1727-NEP. rather than human resources. Mahakali Hills Project designed to increase 1979 USS11 million project Project was predecessor Second Rural Dev. agricultural production and level closed 6/15/1988; about of Cr. 1727-NEP and Project of social welfare in one of the 60% of loan was disbursed. lessons learned were (Cr. 939-NEP) most remote parts of Nepal Performance lcss than claimed to have been (Western Region). estimated at appraisal due taken into account. to administrative, financial and managerial problems, and the constraint of access to remote locations. Agricultural Man- Project designed to assist HIMG 1984 Ihe project with loan of Project started on power Develop- in: improving middle-level USS8.4 million has 6/5/85. It was expected ment Project agricultural pre-service training progressed reasonably well to have had some impact (Cr. 1534-NEP) and higher level animal science after an initial 3-year on Cr. 1727-NEP but did pre-service training; upgrading hiatus. Closing date has not. academic, research & extension been postponed for second programs & training facilities. time to 6/30/94 (originally Mid-1992, the project was to 6/30/91). emphasize more on institutional development. 1. The proposal followed 'he rural development project undertaken in the same area through Cr. 617-NEP which was completed in June 1983; the results of this project were rather modest (Section 1 - Related Credits).  - 15 - 2. Project Timetable Item Date Planned Date Revised Date Actual Identification (Executive - 4/5/19831 Project Summary) Preparation 7/15/1983 7/15/1983 Pre-appraisal - 6/13/1984 Appraisal 11-12/1984 1-2/1985 1-2/1985 Credit Negotiations 3/3/1986 - 3/5-11/1986 Board Approval - - 7/15/1986 Credit Signature - 12/4/1986 Credit Effectiveness - - 11/30/1987 Credit Closing 12/31/1993 7/15/1993 7/15/1993 Project Completion 6/30/1993 11/15/1993 11/15/1993 1. The proposal followed the rural development project undertaken in the same area through Cr. 617-NEP which was completed in June 1983; the results of this project were rather modest (Section 1 - Related Credits). 3. Credit Disbursements Cumulative Estimated and Actual Disbursements (US$ million) Fiscal Year Appraisal Estimate Actual Actual as % of Estimate 1987 1.0 - 0 1988 2.8 0.3 11 1989 4.8 1.6 33 1990 7.3 2.6 36 1991 10.3 3.5 34 1992 14.0 4.3 31 1993 17.4 4.5 26 19941 19.1 5.4 282 1. Date of final disbursement December 6, 1993. 2. On the basis of the DCA estimate in SDRs only 24% of the Credit was disbursed. 4. Project Implementation Appraisal Estimate Actual1 Agricultural Development 2 - Irrigatio: Rehabilitation and lmprovemcnt 18 schemes - 300 ha ( Construction 28 schemes - 900 ha ( Construction Gravity Irrigation 700 ha (1,132 ha 3 Rehabilitation and Upgrading: ( - Labdu - Dhikure 100 ha ( - Gadhkar 40 ha ( - Extension: Agricultural Service Centrcs 8 NA - Agricultural Training Upgrading Regional Training Centrc Trishuli Bazaar NA Upgrading Satellite Training Centres Kakani & Dhunche Completed  - 16 - IAvtstoc & Animal licalth Services Livestock Centres 4 2 Dipping Tanks 6 3 Formt-y Dcvelopment - Establishmcnt: Panchayat Forests 3,000 ha 1,136 ha Leasehold Forests 250 ha NA. Private Homestead Plantings 500 ha NA Public Plantings 1,000 ha 40 ha - Rehabilitation: Panchayat Protected Forcst 3,000 ha NA - Enrichment Planting: Public Forests 1,200 ha NA - Dcmarcation Forest Area 375 km 234 ha - Maintenance: Enrichment Plantings 750 ha NA Soil Conservation - Protection: Catchment Area 500 ha 150 ha - Rehabilitation: Erosion Prone Areas 500 ha NA. RPial Infrastructure - Drinking Water. Rehabilitation and Completion 56 schemes ( 77 schemes New Construction 45 schemes ( - Bridg New Construction 18 (132 Rehabilitation 20 ( - Motorized Tracks: Rehabilitation (Construction) 20 km (1 km) (63 km Tracks: Rehabilitation (Construction) 12 km (13 km) ( Studies Cost Recovery NA Monitoring & Eval. 1. Indicators were not monitored throughout the period of implementation and not shown in supervision reports either. The indicators shown here were obtained from MLD, reports preparcd by the UN Volunteers who were part of the TA team in the project and progress reports. 2. Items such as construction equipment, provision of staff, tools, vehicles, motorcycles etc., were also to be provided but the numbers were not specified in the SAR 3. 900 ha in Rasuwa and 232 ha in Nuwakot. 5. Proiect Costs and Financing A. Project Costs' (in US$ million) Component Appraisal Estimate Actual Expenditure 1. Civil Works 10.0 1.7 2. Vehicles/Equipment/Furniture/Construction Materials 1.7 0.4 3. Salaries/Allowances/Project Operating Costs 3.0 1.4 4. Fertilizer/Agro-chemicals and Equipment/Breeding Stock 1.9 5. ADBN Credit 0.9 6. Studies/Technical Assistance 1.1 0.1 7. Forestry Plantations/Soil Conservation/Store 2.4 0.6 8. Extension Activities/Training 1.4 0.2 UNDP Technical Assistance 1.1 0.8 Government Contribution - 1.22/ Total Project Costs 23.5 6.5 1. Credit disbursements by cost category according to the DCA were monitored by the Bank as well as Government (both coincided). However, Government monitored its own contribution according to three main categories: Civil Works, Vehicles and Equipment, and Operating Cost. The expenditures of Government have therefore been separately shown as a cost component. 2. Obtained from Project audited reports up to 15 July 1992. Government expenditures beyond that date were not available and may only be obtained through the 1992/93 audit report; they are expected to be minimal.  - 17 - B. Project Financing (in US$ million) Source DCA Final IDA1 19.1 1 4.5 UNDP 1.2 2 0.8 Government 3.3 1.2 Total 23.6 6.5 1. The IDA Credit was actually committed in SDR (SDR16.6 million); only SDR4.0 million was actually disbursed. 2. The appraisal estimated US$1.1 million, but UNDP's agreement with GON stipulated US$1,178,900. 6. Project Results A. Direct Benefits (Not Available) B. Economic Impact (Not Available) C. Financial Impact (Not Available) D. Studies Studics Dcrmcd at Appraisal Status 1 1. Farmers' response to agricultural support services Not carried out 2. Changing cropping patterns, yields, farm income in irrigated and non-irrigated areas Not carried out 3. Field level implementation constraints Not carried out 4. Nature of employment generation by project works Not carried out 5. Constraints to addition of new technology Not carried out 6. Review of GOWAN 's cost recovery and input pricing and distribution policies Not carried out 1. Some other studies, which were not defined at appraisal, were carried out, i.e. on: (i) women's role in agriculture, and (ii) mid-term evaluation. So far as the mission could find out, little or no impact was obtained from these.  - 18 - 7. Status of Covenants DCA Section Covcnant Dcadlinc for Compliancc Status 3.06 Borrower to cause ADBN to maintain - No credit funds required by ADBN as adequate availability of credit in project financing of its activities in the project areas. area was covered under an IFAD project and did not need additional funds. ADBN committed to provide full service to project farmers. 4.01(a) Borrower, ADBN and AIC to maintain Neither AIC nor ADBN had drawn on separate records & accounts for project. the Credit; AIC agreed to maintain scparate records; since ADBN was not a sub-borrower, it did not need to comply with this covenant. 4.01(b) Borrower to have project accounts (inc. - All audit reports due have been received. Special Account) audited annually; and will submit audit reports within 12 months of end of FY. 4.01(c) ADBN & AIC project accounts audited - Since no expenditures were incurred by annually, audit reports submitted within 12 AIC, no audit certificates have been months of FY end. presented. ADBN audit not required as it did not agree to use Credit proceeds. 4.01(d) Borrower, ADBN & AIC to maintain - See comment under 4.01(c) above. separate records and accounts for SOEs; these accounts to be audited annually, separate auditor's opinion on SOEs in annual audits. 4.02 Borrower to make adequate budgetary provisions for project; release budget funds no later than first fortnight of trimester. Sched.4 Reorganize, empower staff and fund Project - PCO has been abolished and Project i(a) Coordinator's Office (PCO). Coordinator's function is carried out by Nuwakot Local Development Officer. Sched.4 Ensure effective participation of PCO, - Local and district level planning and 1(b) Project Area District Planning and inter-agency coordination mechanism Supervision committees. need to be reviewed in light of changed political situation. Sched.4 Furnish IDA with results of cost recovery 09/31/87 In view of various efforts to deal with 1(c) and input pricing study. these matters in the context of SAL I and SAL 11, the carrying out of the mentioned studies and the submission of an action plan is deleted from this covenant. "1 Furnish action plan based on this study and 12/31/87 IDA's comments thereon. Proposed for deletion Sched.4 Establish User groups prior to undertaking - Only partly complied with. 1(d) construction of irrigation schemes and other public infrastructure works. Sched.4 Establish and maintain within Agriculture Original date: 12/31/87 This function was taken over by the 1(e) Dept. adequately staffed Unit for farm Revised date: 07/16/88 Dept. of Irrigation which was irrigation and water management for represented in the project area through project irrigation schemes. both a project office and district offices.  - 19 - DCA Section Covenant Deadlinc for Compliance Status Sched.4 Prepare for IDA review: Draft Forcst 07/31/87 New Community Forestry Development 1(f) Management Plans for District Panchayats Policy will apply to the project districts in Project Area. thus overriding this covenant. Provisions of Hill Community Forestry Project (Cr.2028-NEP) are to apply to the project area. Sched.4 Make available annually to each district 12/31/86 Under new Community Forestry Dev. 1(g) panchayat in the project area the required Policy, potential community forests have unencumbered land for forestry plantation. been delineated and these would be transferred to community management as soon as user groups have been established and management plans drawn up. Sched.4 Furnish to IDA a Watershed Management 09/30/87 In compliance 1(h) Plan for the project area and thereafter implement such plan. Sched.4 Provide IDA with TOR for mid-term Original date: 01/31/89 Mid-term review delayed because of slow 1(i) review and carry out such review. Revised: 09/30/89 project start. Restructuring exercise was to be done instead. Provide IDA with results of mid-term Original datc: 12/31/89 Restructuring exercise never took place. review. Revised: 08/31/89 2(a) Nominees for overseas training & training - Since termination of UNDP TA Project, institutions to be acceptable to IDA: aftcr no more overseas training carried out. training, trainees to serve at least 5 years in rural development projects in Nepal. 2(b) Civil works contractors under project must Unspecified Rcgistration of contractors by user be registered by HMG Ministry of Works groups occurred only with irrigation and Transport or by User Groups. projects. 2(c)(i) Project staff shall be appointed, deployed 07/15/90 Positions required for project and maintained in accordance with project implementation were to be reviewed in objectives; incremental project staff context of project restructuring. No required for post-investment activities to be action taken. made part of regular staff budget from FY90/91; local government officcrs should be qualified and experienced and at least of Class 11 level (gazetted). 8. Use of Bank Resources A. Staff Inputs (staff weeks) Stage of Project Cycle Planncd Revised Actual Coments Through Appraisal NA. NA. 68.6 Appraisal through Board Approval N.A. N.A. 5.4 Board Approval through Effectiveness N.A. NA. 0.7 Supervision Sub-Total NA NA 83g8 - Supervision FY87 4.7 - Supervision FY88 33.7 - Supervision FY89 10.7 - Supervision FY90 13.0 - Supervision FY91 12A - Supervision FY92 45 - Supervision FY93 4.7 - Supervision FY94 0.1 Project Completion FY94 10.0 1 GRAND TOTAL 1685 1. CP staff only.  - 20 - B. Missions Slap of Project Month/Year No. of Days in Spccialization Rcprcscnted 1 Pcrformance Type of Cycle Persons Field Rating Status 2 Prbl3 Ibrough FY84 2 NA. EC,FA -r Appraisal FY85 5 N.A. EC, FA, AG, EN, SO Appraisal FY86 I NA. EC through Board Approval Board Approval FY87 3 NA. EC N.A. NA. through FY88 7 NA. EC & others 4 NA. M Effectiveness Supervision 1 05/88 5 N.A. EC & others 4 2 M, F Supervision 2 01/89 2 9 AG, EN 2 M, F Supervision 3 07/89 2 N.A. AG, EN 2 M Supervision 4 10/89 4 3 AG, EN, EC, FA 3 M, F, LP Supervision 5 07/90 4 NA. AG, EC, EN, FA 3 P, M, F Supervision 6 07/91 3 N.A. AG, EC, rA 4 P, M, F Supervision 7 06/92 1 7 EC 4 P, M, F Supervision 8 12/92 1 3 EC, EN, FA 4 P, M, F Supervision 9 06/93 1 3 EC 4 P, M, F 1. Specialization: AG = Agriculturist; EC = Economist; EN = Engineer; rA = Financial Analyst; SO = Sociologist. 2. Performance Rating Status: 1 = Problem-free or minor problems; 2 = Moderate problems; 3 = Major problems. 3. Type of Problems: F = Financial; M = Managerial; P = Political; LF = Lack of funds. 4. Not specified. C. Costs (Not Available)