China - Coastal Lands Development Project

 Coastal lands development project Report No: ; Type: Report/Evaluation Memorandum ; Country: China; Region: East Asia And Pacific; Sector: Agriculture Adjustment; Major Sector: Agriculture; ProjectID: P003525 November 30, 1995 China: Coastal Lands Development Project (Loan 2924/Credit 1887-CHA) The Implementation Completion Report (ICR) on the China Coastal Lands Development project (Loan 2924/Credit 1887- CHA in the amount of US $100 million equivalent, approved in FY88) was prepared by the East Asia and Pacific Regional Office. Separate comments from the two implementing provinces, Zhejiang and Jiangsu, constitute Appendix B. The project aimed to develop coastal lands for culture fisheries—mainly shrimp, eel, and edible seaweed—small animal agriculture, and agroprocessing. Doing so would allow coastal dwellers to find employment outside the over- exploited offshore fishery industry. In addition, the project sought to establish Development Corporations (DCs), to handle project implementation and onlending activities. DCs were promoted by the Bank to help provincial governments separate their administrative and regulatory functions from their developmental and commercial activities. The project was one of the first Bank-supported agricultural development projects in China to place responsibility for project design, implementation, and debt servicing with provincial governments. Implementation proceeded smoothly in the early years, with high returns to aquaculture enterprises. However, shrimp and eel culture, which accounted for two-thirds of project costs, suffered significant setbacks later. By 1993, shrimp production had been halted almost completely by an outbreak of a viral disease, precipitated by excessively intense production, deteriorating water quality, inappropriate management, and other factors. The outlook for solving the shrimp disease problem is uncertain. Eel culture has been curtailed by the scarcity and escalating cost of wild eel fry on which the industry is based. Edible seaweed production has grown quickly. The performance of small animal agriculture and agro-processing has been mixed, with some components not implemented as agreed at project approval. The main institutional innovation—the DCs—was abandoned early on. The ICR states that project outcome cannot be rated because of uncertainties over the future path of shrimp disease and the availability of wild eel fry. The ICR Summary of Assessments, however, rates project outcome as deficient. The Operations Evaluation Department (OED) believes that the ICR provides enough evidence to rate the project outcome as unsatisfactory. The main reasons for this are the current devastation of the shrimp industry in the project area; marginal or negative returns to shrimp and eel production at project completion; the need to rehabilitate the shrimp industry completely, even if the current disease problem is solved quickly; the apparently irreversible scarcity of wild eel fry; and the failure to develop the DCs. The ICR does not rate overall outcome, nor does it provide a summary assessment of institutional development, which OED rates as negligible because of the failure of the DCs, a concept the Borrower never accepted fully. OED rates sustainability as uncertain: the ICR does not offer an overall rating. The ICR rating of Bank performance as satisfactory is accepted, despite less than adequate risk assessment during preparation. The ICR is rated as deficient because it fails to rate project outcome, and overall institutional development and sustainability. An audit is planned.