India - Second Gujarat Medium Irrigation Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 14768 PROJECT COMPLETION REPORT INDIA GUJARAT MEDIUM IRRIGATION II PROJECT (CREDIT 1496-IN JUNE 29, 1995 Agriculture and Water Operations Division Country Department II South Asia Regional Office 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 COMPLETION REPORTr INDIA GUJARAT MEDIUMI IRRIGATION lI PROJI0r. i! (CREDIT 1496-IN) CURRENCY EQUIVALENTS Name of Currency: Rupee (Rs.) Rate of Exchange: Appraisal (February 1984): US$1 Rs.i n sIO Intervening Years (1985-1993 average): US$1 = Rs. 1 8 3f5 Completion Year (1994): US$! - Rs 31.' FISCAL YEAR GOI and GOG: April I - March 31 WEIGHTS AND MEASURES Metric System ABBREVIATIONS ADC Area Development Commissioner CADA Command Area Development Authority CCA Cultivable Command Area CDO Central Design Organization CWC Central Water Commission ERR Economic Rate of Return FPI Foundation for Public Interest GAU Gujarat Agricultural University GOG Government of Gujarat GOI Government of India IDA lnternational Development Association M & E Monitoring and Evaluation MIP Medium Irrigation Project MSDC Minor System Design Cell NWRD Narmada Water Resources Department O & M Operation and Maintenance PAFs Project-Affected Families PCR Project Completion Report PPM Project Planning & Monitoring QCU Quality Control Unit R & R Resettlement and Rehabilitation RWS Rotational Water Supply SMS Subject-Matter Specialist SSP Sardar Sarovar Projects WALMI Water and Land Management Institute WUA Water Users Association  FOR OFFCIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation June 29, 1995 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on India Gujarat Medium Irrigation 11 Project (Credit 1496-IN) Attached is the Project Completion Report (PCR) on the India--Gujarat Medium Irrigation 11 project (Credit 1496-IN, approved in FY84). Parts I and III were prepared by the FAO/Bank Cooperative Program for the South Asia Regional Office and Part II by the Borrower. The Gujarat Medium Irrigation II project (MIP II) aimed to complete 27 of 29 irrigation sub-projects not completed under MIP 1, its predecessor (Credit 808, approved FY78). MIP II's appraisal estimated that 45 percent of the investments had already been made. Under the project, Gujarat undertook to operate the sub-projects by "rotational water supply" (RWS) to improve the equity and reliability of service. Rehabilitation provisions were added to bring the treatment of people who lost or would lose property up to prescribed IDA standards. Progress in rehabilitating people who lost property was modest until IDA began making credit extensions contingent on better treatment; then it was substantial. Prior to the closing date, all the landed families had received land or cash compensation; 12% of the non-landed families had received economic rehabilitation assistance and an actioni plan had been presented for the rehabilitation of the rest within three years. However, supervision ended with project closure. Between 1985 and 1987, the borrower concentrated its funds and energy on drought relief, and neglected the project. Designs were changed to divert water from farming to supply drinking water. Even in noni-drought years, implementation was slow and difficult. In 1989, after five years of debate, RWS began to be introduced. In 1991, with substantial IDA funds remaining undisbursed, unfinished irrigation works from a cancelled project (Credit 1011, approved FY80) were added to MIP 11. Nevertheless, 15.6 percent of the MIP II credit was cancelled. When the project closed in FY94, four sub-projects were complete, 24 were expected to be completed within three years, and one had been dropped. Real unit costs were 51 percent above appraisal estimates, and 16 percent of project costs went to sub-projects transferred from Credit 1011. Estimated project benefits are based on the three completed sub-projects using RWS and on one up-graded sub-project. Drinking water is priced conservatively at its value in irrigation. If use of RWS continues to spread, uncounted benefits will be large. Project outcome is rated as "satisfactory." The return to MIP II investments is estimated at 21 percent. However, the re-estimated economic return to MIP I and MIP 11 combined is 9 percent. 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.  2 Persuading the Irrigation Department (ID) to use RWS was a major institutional achievement. Therefore, despite poor implementation, institutional development is rated as "substantial." Due to minimal achievements in empowering irrigators or recovering costs, there are doubts about future operation and maintenance. The commitment of the ID to continued use of RWS is also open to question. Therefore, sustainability is rated as "uncertain." The PCR provides an adequate assessment of this complex project. The means, and expected positive effects, of introducing RWS, coupled with the project's unfinished rehabilitation business justify an audit. Attachment  FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT INDIA GUJARAT MEDIUM IRRIGATION II PROJECT (Credit 1496-IN) TABLE OF CONTENTS PREFACE ................................................... i EVALUATION SUMMARY .................................................... iii PART 1. PROJECT REVIEW FROM BANK'S PERSPECTIVE .................. ................... I lI. Project Identity . 2. Background .1 3. Project Objectives and Description .1 4. Project Design and Organization. 3 5. Project Implementation. 5 6. Project Results . 1 7. Project Sustainability .13 8. Bank Performance. 14 9. Borrower Performance .17 10. Project Relationships . 17 11. Consulting Services .18 12. Project Documentation and Data .18 PART II. PROJECT REVIEW FROM BORROWER'S PERSPECTIVE .......... ................. 19 This docunent has a restricted distribution and may be used by recipients only in the performance of their ofricial duties. Its contents may not otherwise be disclosed wiLhout World Bank authorization.  PART 111. STATISTICAL INFORMATION ............................... 33 1. Related Bank Loans and/or Credits .33 2. Project Timetable .34 3. Loan/Credit Disbursements .35 4. Project Implementation ..35 A. Key Indicators of Physical Progress Activity-wise .35 B . CCA of Individual Sub-Projects and their Development Cost .38 5. Project Cost and Financing ..39 A. Project Cost .39 B. Project Financing .40 6. Project Results . . .40 A. Direct Benefits ..40 B. Economic Impact .41 C. Financial Impact ........................-.----.41 D. Studies ........................ ----....------...--.--.--.-.-.41 7. Status of Covenants .42 8. Use of Bank Resources ..45 A. Staff Inputs .45 B. Missions ................................................... 45 C. Costs ... TABLES i. Economic Analysis-Overall (With Sunk Costs) ............................................ 47 2. Economic Analysis-Overall (Without Sunk Costs) ............................................ 48 3. Economic Analysis-Und Sub-Project (With Sunk Costs) ..................................... 49 4. Economic Analysis-Und Sub-Project (Without Sunk Costs) .................................. 50 5. Economic Analysis-Sukhi Sub-Project (With Sunk Costs) .................................... 51 6. Economic Analysis-Sukhi Sub-Project (Without Sunk Costs) .*--.---.---.-.--52 7. Economic Analysis-Watrak Sub-Project (With Sunk Costs) .53 8. Economic Analysis-Watrak Sub-Project (Without Sunk Costs) .54 9. Economic Analysis-Shetrunji Sub-Project .55 ANNEX 1. ECONOMIC REASSESSMENT .57 ANNEX 2. ROTATIONAL WATER SUPPLY .84 ANNEX 3. RESETTLEMENT AND REHABILITATION (R&R) .88 MAP IBRD 18107  i PROJECT COMPLETION REPORT INDIA GUJARAT MEDIUM IRRIGATION II PROJECT (Credit 1496-IN) PREFACE This is the Project Completion Report (PCR) for the Gujarat Mediurr Irrigation II Project (MIP II) in India for which Credit 1496-IN in the amount of SDR164.3 million (US$172.0 million equivalent) was approved on June 12, 1984. SDR15.0 million and SDR4.9 million were cancelled on December 5, 1991 and May 1, 1993, respectively. The Credit was closed on March 31, 1994, four years and three months behind schedule. The final disbursement was made on June 29, 1994 and SDR5.7 million was cancelled. Parts I and III of the PCR were prepared by an FAO/World Bank Cooperative Program mission which visited India in June 1994. Part II was prepared by the Borrower. PCR preparation which commenced in June 1994 was based on a review of the Staff Appraisal Report (SAR) and legal documents, supervision reports, project files and correspondence, field visits and discussions with appropriate officers of the Narmada Water Resources Department (NWRD) and farmers, and interview with Bank staff associated with the project.  I I  iii PROJECT COMPLETION REPORT INDIA GUJARAT MEDIUM IRRIGATION II PROJECT (Credit 1496-IN) EVALUATION SUMMARY Objectives 1. The five-year Gujarat Medium Irrigation II Project (MIP II) (Credit 1496-IN) followed the Gujarat Medium Irrigation Project (Credit 808-IN). At appraisal, the three main components were: (i) completion of 23 ongoing medium irrigation projects (MIPs); (ii) completion of ongoing modernization works in six sub-projects; and (iii) introduction of rotational water supply (RWS), training, studies, monitoring and evaluation, and institutional strengthening. The objectives of the project were to: (a) improve the standards of design and construction; and (b) introduce an efficient, reliable and equitable water management system in each of the 28 sub- projectsI in order to enhance crop production and farm incomes. The project has also sought to improve the economnic rehabilitation of families displaced by the construction of dams prior to the start of the project. Project Implementation 2. The Credit was approved on June 12, 1984, and became effective on September 21, 1984, with the original closing date of December 31, 1989. After five extensions, it was closed on March 31, 1994, four years and three months behind schedule. 3. Project implementation got off to a slow start primarily because of inadequate budgetary allocation, which in turn was caused by extensive and successive droughts for three years from 1985 to 1987, preceded by unprecedented and destructive floods in 1983 (leading to redesign of spillways at all dams), and diversion of Department staff to drought scarcity programs. Project implementation continued to experience further delays and considerable difficulties. One of the sub-projects (Zankhari) was dropped and the implementation schedules were revised by NWRD at regular intervals, starting from March 1987 and stretching to September 1988, March 1990, September 1991, and finally to April 1993. The revision in February 1991 involved restructuring of the project which expanded its scope to include items that were included as components under Gujarat Irrigation II Project (Credit 1011-IN), which closed on April 30, 1989. The additions included: (i) continued support to the Water and Land Management Institute (WALMI); (ii) completion of the Karjan Irrigation Scheme with a command area of 56,200 ha; (iii) completion of the Saurashtra Coastal Salinity Ingress Control Scheme; (iv) completion of the Machhu II Scheme covering 9,900 ha; and (v) Machhu I Dam strengthening. This revision was intended to utilize credit savings arising from the MIP II project. 4. All the 28 sub-projects continued from Credit 808-IN, and new additions in September 1991 from Credit 1011-IN persistently lagged behind targets. Problems in land acquisition for dams (particularly for Sipu) and canals (Panam, Watrak and Kalubhar), forest land clearance (Mazam, Bhadar and Hadaf), problems with contractors (Kelia and Jhuj), reluctance of 1 One sub-project (Zankhari) was deleted from the project.  iv NWRD in accepting the RWS criteria in initial years, delays in sanctions by the Government of Gujarat (GOG) for tenders (Sipu and Machhu 1), price escalation following the Gulf crisis, and late inclusion of some sub-projects like Karjan and Machhu II, were major factors in the slow implementation of the project. 5. Despite these difficulties. the physical achievements have, by and large, progressed well. Dams and spillways were complete in all sub-projects except Sipu where they were 96 percent complete. Similarly, canals have been completed in 23 sub-projects, 93-99 percent complete in four sub-projects and 59 percent complete in Kelia. However, the distribution network has been complete in only seven sub-projects, 94-99 percent complete in 13 sub-projects, 80-89 percent complete in four sub-projects and below 40 percent complete in the rest. Field channels have only been completed in seven sub-projects, 90-99 percent complete in nine sub- projects, 80-90 percent complete in eight sub-projects and below 80 percent complete in the other four sub-projects. Rotational water supply (RWS) has been fully implemented in Uben, Dantiwada and Aji II and would be implemented in another nine sub-projects by 1995. By the closing date, it was expected that the project would require an extra one to three years for completion of remaining works. 6. The economic rehabilitation component for project affected persons (PAPs) began very late in the project. This has limited the full achievement of the rehabilitation objectives. However, since 1990, the implementation record of the rehabilitation component, as agreed with the Bank, has been fairly satisfactory. GOG has implemented all the actions specified in the SAR in terms of institutional strengthening, rehabilitation planning on agreed lines, land for land to the extent possible, alternative packages for rehabilitation -- fisheries development, project employment, vocational training -- as well as evaluation studies of five sub-projects. Project Results 7. Only five sub-projects (four MIPs and one modernization scheme) have been completed fully and the remaining 23 are at various stages of completion. Dams and canals were virtually complete but the distribution network and field channels lag behind targets. They are expected to be completed in the next three years. The total cultivable command area of the 28 sub- projects was estimated at 354,100 ha at appraisal but revised to 340,500 ha (excluding sub-projects transferred from Credit l01 1-IN) when actual land surveys were completed. It is reported that areas receiving water are able to achieve better cropping patterns and highier crop yields. Expansion of irrigated agriculture throughout the command area would generate increased agricultural production and farm incomes for participating families. However, major cost increases are evident in almost all sub-projects. The re-estimated economic rate of return of the project as a whole, with and without sunk costs, which is detailed in Part 111/6B was about 9 percent and 21 percent, as compared to the appraisal estimates of 30 percent and 43 percent respectively. To simplify and to make it comparable with appraisal, both the costs and benefits of newly transferred sub-projects from Credit 101 I-IN were excluded from economic evaluation. 8. The lower Economic Rate of Return (ERR) at PCR was due to: (a) high cost increases in both nominal and real terms; and (b) prolonged delays in accrual of benefits, which were not offset by modest increases in yields of certain crops. Project Sustainability 9. Project sustainability basically hinges on the continuity of production benefits, which are largely determined by a combination of better cropping patterns and intensity, higher crop yields and a shift to a more remunerative crops. These in turn are influenced by the availability of  v irrigation water. An assured supply of irrigation water would depend on: (a) having trained staff in place together with adequate equipment to maintain the system; (b) ensuring that operation and maintenance (O&M) costs are fully met; and (c) obtaining not only local acceptance but active local support for the project to realize water use efficiency, minimize the risk of neglect, deterioration and vandalism. The likelihood of meeting these requirements is a major challenge facing the GOG. 10. Salinity and waterlogging problems have arisen in at least two sub-projects -- Watrak and Panam -- and remedial measures have been taken. It is essential to monitor the environmental impact of each sub-project and devise remedial measures as required. Bank Performance 11. In February 1991 when the project was restructured it was already two years beyond initial Closing Date. Rather than loading this project with new components, it would have been preferable to cancel the funds. However, this was not done because it was part of a broader readjustment under the Gulf initiative. Lessons Learned 12. The main lessons learned from the implementation experience of the project are as follows: (i) The inclusion of sub-projects in the later stages of the project period, which is one of the main reasons for delay in the completion of MIP I is a lesson already learnt but has not been applied to the follow-on MIP II project where some five sub-projects were added when the project was already two years beyond the original Closilg Date. While utilization of credit savings is a major objective of this addition, owing to the difficulties in counterpart funding it would have been prLudent to have had them funded from other sources, instead of transferring theim to MIP II, thereby delaying completion of other sub-projects and accrual of benefits therefrom. (ii) Allocation of 0 & M funds by sub-project since 1992 is an innovation and a significant improvement over the absence of allocatioi, in the past. It should be encouraged in all future projects. (iii) As a priority activity, provision of drinking water was introduced into the project in its later stages on a much larger scale than envisaged at appraisal. This has led to some sub-projects not providing irrigation water in one or two years, e.g. Und and Shetrunji. The loss of command area and expenditure on originally planned and constructed distribution systems are difficult to quantify now but could have been avoided by realistic forward planning. Overall water use planning as part of the sub-sector study would be a useful input in future projects of a similar nature. (iv) Solutions to some project problems depended on the willingness of GOG to address difficult sub-sector and state-wide issues which could not be resolved at project level, e.g. water rates, 0 & M funding, and staffing. The Bank should ensure that agreed policies and conditionalities are realistic and implementable. If during implementation they prove  vi otherwise, these should then be amended or deleted from the Legal Agreements. (v) The need for upgrading technical performance is clearly demonstrated by the project, particularly in the area of ensuring adequate maintenance, better water management, good quality of construction, and securing full economic rehabilitation of communities displaced by the construction of dams. The Bank needs to pay more attention to design and implementation of training components and set up firm M&E criteria in project design. (vi) Some of the reforms implicit in "command area development", initiated by GOI several years before the project was approved in 1984, covered more extensive lining of canals, improved construction standards, regulated outlets serving irrigable areas on larger than 8 ha on average, compulsory land development below that outlet, rotational water supplies and increased water charges. While it is hard to know at this time whether the reform measures were successful or not in the context of MIP II, the Bank's positive support to investment in irrigation proved valuable to Gujarat's (or India's) drive to increase foodgrain output. Irrigation costs were also large enough for this sector to provide an ideal channel for resource transfer. (vii) A five-year implementation period was for too optimistic, given the unprecedented flood in 1983 and severe droughts during 1985-1987. During future preparation of irrigation projects in drought prone states like Gujarat, it is desirable to include an allowance of time for shortage of funds resulting from droughts and floods. Competition with other projects which may get higher priority for availability of scarce resources need also be adequately assessed (e.g. SSP and domestic, municipal and industrial water). (viii) The appraisal had overestimated the capability of the NWRD to complete the required implementation of distribution networks in accordance with RWS principles within five-year project period. The complete shift from the "Shehpali" system (followed by the Gujarat State for many decades) to RWS system required several follow-up steps including the overcoming of inertia and reluctance associated with a full changeover, modification of state-wide legal framework, mobilization of farmers' willingness to accept and participate in the new system, training of planning and design staff as well as farmers, and establishment of farmers' organizations for active participation. Given this reality of managing the widely dispersed sub-projects, a more realistic implementation period should have been prepared at appraisal and the Bank should have looked into the possibility of improving the existing system rather than dictating a complete change. (ix) There is a need to address all R & R and environmental issues comprehensively at preparation and appraisal of the project and to arrive at agreed actions to address these issues in a manner consistent with the Bank's operational directives.  PROJECT COMPLETION REPORT INDIA GUJARAT MEDIUM IRRIGATION II PROJECT (Credit 1496-IN) PART I. PROJECT REVIEW FROM BANK'S PERSPECTIVE 1. Project Identity Project Name : Gujarat Medium Irrigation II Project Credit No. 1496-IN RVP Unit South Asia Country India Sector : Agriculture Sub-sector Irrigation 2. Background 2.1 The Gujarat Medium Irrigation II Project (Credit 1496-IN) was a follow-up to the Gujarat Medium Irrigation Project (Credit 808-IN) which enabled Bank involvement in the development of medium irrigation projects that individually are too small to justify Bank participation. The follow-up (Phase II) project was to support the completion of 29 sub-projects (23 medium irrigation projects and 6 modernization schemes) initiated under the (Phase I) Gujarat Medium Irrigation Project, and the introduction of an efficient, reliable and equitable water management system in each medium irrigation project (MIP). 2.2 The Bank Group has provided significant support for Gujarat's irrigation development with four credits. The first credit in 1961 of US$4.5 million financed the construction of Shetrunji's canal system. This was followed in 1970 with another credit of US$35 million for Kadana Irrigation Project. The subsequent projects -- Gujarat Irrigation Project for US$85 million and Gujarat Irrigation II Project for US$175 million -- together financed about 80 percent of Gujarat's annual irrigation investments outside the Narmada Development. The Narmada Sardar Sarovar Water Delivery and Drainage Project (US$150 million) and the Narmada Sagar Dam and Power Project (US$300 million) (SSP) were approved in March 1985, less than one year after approval of this project and implemented concurrently. 3. Project Objectives and Description 3.1 The project was to complete the construction of the 29 sub-projects initiated under the Gujarat Medium Irrigation Project (Credit 808-IN) to adequate standards and adopt in sub-projects a rotational water supply system based on predetermined scheduling and equitable water allocation. The project also sought to improve the economic rehabilitation of families displaced by the  2 construction of dams prior to the start of the project. As appraised, the main project components included: I . Construction Activities 1. Medium irrigation projects. Each of the 23 MIPs was to include the following works: (a) a storage dam, usually earthfill with a gated reinforced concrete spillway and canal headworks; (b) a fully lined canal network that delivers water through outlets serving 8 ha sub-chaks; and (c) a drainage network connected to natural drains. These works were at various stages of construction on all sub-projects except Zankhari, where only site investigation and construction of access roads had started. 2. Modernization. Modernization works that were underway in six schemes included the lining of existing main and branch canals of the existing, unlined distribution system originally designed to serve 40 ha chaks. The systems were being extended with fully lined minors to supply regulated outlets serving 8 ha sub-chaks. Improved control structures were included to allow better regulation. The modernization works also included a major modification to the Dantiwada storage facilities involving the construction of an auxiliary spillway; 3. Field channels and field drains. Unlined field channels linking the 8-ha outlet in non-paddy areas with each individual holding, or where the holding is smaller than I ha, to groups of holdings averaging about I ha which would be constructed as a part of the project. Field drains would also be provided where necessary; 4. Main drainage. Out of the 29 sub-projects, six required improved drainage. Provisions had been made for drainage improvements over the 30,000 ha at an average cost of Rs.2,000/ha; 5. Roads. All-weather access roads were to be provided along all main and secondary canals down to the 40-ha chak outlet. Motorcycle access would be provided to the 8-ha sub-chak outlet; 6. Communications. Provision was included for a radio telephone network for each sub-project; 7. Equipment and vehicles. Equipment was to be financed covering heavy construction plant, small-scale compaction machines, operation and maintenance (O&M) equipment, general maintenance equipment, communications equipment and equipment for training.  3 II. Training. Studies. Institutional Strengthening and Introduction of Rotational Water Supply (RWS) I. Training. Funds were to be provided for training in mechanical plant maintenance, rotational water supply, and vocational training for displaced persons. In addition, provisions had been made for improving the facilities of the demonstration farm at Thasta in order to make it suitable for training farmers in RWS. Water management study tours would also be funded; 2. Studies. Provisions had been made for studies on Zankhari sub-project, monitoring and evaluation, and dam fisheries potential; 3. Institutional strengthening. Provisions had been made for the creation of a new minor system design cell; strengthening the quality control unit of the Irrigation Department (ID) at Ghandinagar, creation of a Water Management Unit under the Chief Engineer, Command Area Development Authority (CADA); strengthening the Project Planning and Monitoring Cell of the ID, and assistance with planning and monitoring of construction activities; 4. Technical services. Provisions had been made for using the services of universities and other specialized institutions and groups for the introduction of computerized systems, data analysis and other specialized tasks; 5. Introduction of R WS. Provision of Rs.350/ha was made for the introduction of a rotational water supply in the project area; and 6. Rehabilitation of the displaced persons under the project, including vocational training and infrastructure works. 3.2 The total project cost, including physical and price contingencies, was estimated at US$344.1 million (Rs.3,716 million). The IDA credit of US$172 million was to finance the foreign exchange component (US$45 million) and about 42 percent of local costs or nearly 50 percent of total project costs. The remaining portion of the cost was to be met by the Government of Gujarat (GOG) from its development budget which included a GOI contribution. 4. Project Design and Organization 4.1 Project Design. The Gujarat Medium Irrigation II Project design followed that of the Gujarat Medium Irrigation Project which was conceived as a 'line-of-credit' project for the construction of MIPs. The line-of-credit approach was adopted under MIP I as the only practical way that IDA could support a project with a large number of scattered sub-projects. The MIP II project did not require a line-of-credit approach as all the sub-projects were identified and appraised under the MIP I project. The project design reflected the lessons learnt by GOI and the Bank under the MIP I project and also from the Gujarat Irrigation II Project (Credit 101 1-IN) which was being implemented at that time particularly with regard to RWS. The four critical lessons identified during the first project were related to the management of implementation, long-term planning, operational planning, and resettlement. 4.2 The main justification of Bank support to irrigation development in India was to assist with the establishment of reliable, equitable and efficient irrigation systems which would satisfy the  4 requirements of modern agriculture. The project had sought to achieve this by construction activities to adequate standards and introduction of improved water management practices to ensure that each farmer would obtain a timely and reliable water supply. To fully realize the potential created by the previous project, it became essential to finance the Phase II and complete construction of the sub-projects initiated under the Phase I of the Gujarat Medium Irrigation Project, and introduce RWS in Phase II. 4.3 The Phase II project also recognized that the main criterion for determining the success of each sub-project and the project as a whole would be the implementation of a system satisfying the water management objective. Similarly, the main criteria for assessing the success of the construction activities were thought to be design to standards that would facilitate system management and minimize operational costs and high quality of works to ensure their durability and minimize maintenance costs. The Staff Appraisal Report (SAR) specified the criteria, standards and procedures required to be followed by GOG regarding project planning, construction and operation. It also required the establishment of a Dam Safety Panel of independent experts: (a) to review the plans and designs of the dams and related structures under the project and their adequacy; (b) to periodically review dams and related structures during design and construction to see whether any new grounds for making changes have become apparent; and (c) cause dams and related structures constructed under the project to be periodically inspected in accordance with sound engineering practices. The SAR also provided for the rehabilitation and resettlement of displaced persons in accordance with its guidelines. There was also a requirement to create a Water Management Unit to carry out water management of completed sub-projects under RWS principles. The overall project framework was thus responsive and appeared well-defined for achieving the ultimate project objective vis-a-vis ensuring a reliable and equitable supply of water to individual farmers under agreed RWS operations for enhanced production. However, with hindsight, the capacity of the implementing agencies (both in human and financial resources) was over-estimated at appraisal, resulting in delays. 4.4 Construction methods were broadly set out in the SAR. Although canal and dam foundation excavation and canal and road embankment construction were to be carried out mostly by manual labor, other works like compaction of dams, canal and road embankments, paving of roads, some excavation (especially for drains) and stone-breaking operations were planned to be done using mechanical equipment. 4.5 Project Preparation. The project was prepared by GOG with the participation of GOI's Central Water Commission (CWC). Descriptions and specifications for the main components listed in the SAR were generally adequate as most project activities were a continuation of works started under MIP I. Special attention was given to water management based on rotational water supply, and resettlement. However, the appraisal report has over- estimated the capability of the implementing agencies to complete the required implementation of distribution networks in accordance with RWS principles within the time-frame of five years and the Borrower's seriousness in implementing dam safety and rehabilitation. 4.6 Project Timing and Implementation. Timing of the project was opportune as the phase I project closed on June 30, 1984. Implementation arrangements have generally followed a pattern established under the phase I project though the lessons learned were still not fully understood.  5 5. Project Implementation 5.1 General. The Credit was approved on June 12, 1984, and became effective on September 21, 1984, with the original closing date of December 31, 1989. After five extensions, it was closed on March 31, 1994, four years and three months behind schedule. 5.2 Project implementation got off to a slow start primarily because of inadequate budgetary allocation, which, in turn, was caused by extensive and successive drought for three years from 1985 to 1987, preceded by unprecedented and destructive floods in 1983 (leading to redesign of spillways at all dams), and diversion of Department staff to drought scarcity programs and to the newly-established SSP Projects. Project implementation continued to experience further delays and considerable difficulties and competition for counterpart funds became acute with SSP. One of the sub-projects (Zankhari) was dropped and the implementation schedules had to be revised by Narmada Water Resources Department (NWRD) at regular intervals, starting from March 1987 and stretching to September 1988, March 1990, September 1991 and finally to April 1993 because of lack of counterpart funds resulting in slow implementation. The revision in February 1991, which was done two years after the original closing date, involved restructuring of the project which expanded its scope to include items that were included as components under Gujarat Irrigation II Project (Credit 1011-IN) which closed on April 30, 1989. The additions included: (i) continued support to Water and Land Management Institute (WALMI); (ii) completion of the Karjan Irrigation Scheme with a command area of 56,200 ha; (iii) completion of the Saurashtra Coastal Salinity Ingress Control Scheme; (iv) completion of the Machhu II Scheme covering 9,900 ha; and (v) Machhu I dam strengthening. The revision was intended to utilize credit savings arising from the MIP II project and was part of the "Gulf Initiative" whose objective was to enhance the Borrower's access to hard currencies. In retrospect, the restructuring did not fully achieve the expected physical and financial results. 5.3 All the sub-projects -- 28 continued from Credit 808-IN and new additions in September 1991 from Credit 1011-IN -- persistently lagged behind targets. Problems in land acquisition for dams (particularly for Sipu) and canals (Panam, Watrak and Kalubhar), forest land clearance (Mazam, Bhadar and Hadaf), problems with contractors (Kelia and Jhuj), reluctance of NWRD in accepting the RWS criteria at initial stages, delays in sanctions by GOG for tenders (Sipu and Machhu I), and late inclusion of some sub-projects like Karjan and Machhu II were major factors in the slow implementation of the project together with chronic shortage of counterpart funds. Despite these difficulties some project components have been completed or nearly completed during the extended project period. As shown in Part IIV14A, dams and spillways are complete in all sub-projects except Sipu where it is 96 percent complete. Similarly, canals have been completed in 23 sub-projects, 93-99 percent complete in four sub-projects and 59 percent complete in Kelia. However, the distribution network has been completed in only seven sub- projects, 94-99 percent complete in 13 sub-projects, 80-89 percent complete in four sub-projects and below 40 percent complete in the rest. Field channels have been completed in only seven sub- projects, 90-99 percent complete in nine sub-projects, 80-90 percent complete in eight sub-projects and below 80 percent complete in the other four sub-projects. RWS has been fully completed in only three sub-projects -- Uben, Dantiwada and Aji II --, and would be completed in another nine sub-projects by 1995. By the closing date, it was expected that the project would require an extra one to three years for completion of remaining works. 5.4 The economic rehabilitation component, which began one year after the project's expected Closing Date, has received increasing attention since 1990 due to conditionalities for extending the credit further. This has limited the full achievement of the economic rehabilitation objectives. However, since 1990, the implementation record of the rehabilitation component, as agreed with the Bank, has been fairly satisfactory. GOG has implemented all the actions specified  6 in the SAR in terms of institutional strengthening, R&R planning on agreed lines, land for land to the extent possible, alternative packages for rehabilitation -- fisheries development, project employment, vocational training -- as well as evaluation studies of five sub-projects. The status of the main elements of MIPs and modernization schemes are presented in Part III/4A and summarized below. 5.5 Dams in 10 of the 22 sub-projects were completed prior to the start-up date, 11 were completed under MIP II and only one dam (Sipu sub-project), which was 96 percent complete by March 31, 1994, is expected to be completed by March 1995. The actual completion dates of the 21 completed dams are given in Part 111/4A. 5.6 Canals: The main and secondary canal systems in three sub-projects were completed under MIP-I (Credit 808-IN), and 16 under MIP II. The canal systems of the three remaining sub- projects are expected to be completed (Kelia, Deo and Watrak) between December 1994 and June 1995. 5.7 Distribution System: The distribution system and minor network in most of the sub- projects (16 out of 22) was incomplete on March 31, 1994 when the credit closed. The level of completion was 100 percent in 6 sub-projects, 80-99 percent in 14 sub-projects and less thall 50 percent in 2 sub-projects. The six sub-projects in which the distribution network was completed are: Machhanala, Bhadar, Ver II, Kalubhar, Uben. and Demi II. 5.8 Field Channels: The progress on field channel construction was generallv slow and in only four of the 22 MIPs was construction completed by March 1994. In the remainilng 18 MIPs. the level of completion was: less than 50 percent in 2 MIPs; 50-80 percent in 2 MIPs: and 81-99 percent in 14 MIPs. The delay was due to a combination of factors, including farmers' reluctance to provide land, free of cost, but mostly GOG's change in financing arrangemlents. Initially, it had been agreed with the Bank that GOG would bear the cost of field channels, blut in JLIIY 1990, GOG required that farmers should pay for the cost of constructing field clhannels. As a resullt, the construction of field channels halted. It was under the Bank's pressure that GOG subsequently (August 1991) revised its policy and started paying for the cost. Limited field level coordination between ID and CADA staff was also a serious handicap. 5.9 Modernization: The modernization of six sub-projects included u!'2er MIP II consisted mainly of upgradingAining the conveyance and distribution systems and the construction of field channels. Only one sub-project (Dantiwada) also required completion of the additional spillway. The conveyance system was modernized at four of the six sub-projects (Dantiwada, Fatehwadi, Kharicut and Bhadar) and at the other two (Shetrunji and Machhu 1) the completion level was 93 percent and 99 percent respectively. The distribution system was completed in only one of the six sub-projects, namely Kharicut. In the remaining five sub-projects the level of completion was 80-99 percent at three (Dantiwada, Fatehwadi and Shetrunji), 10 percent at Bhadar and 0 percent at Machhu I. The field channel modernization was completed at three of the six sub- projects and in the remaining three the level of completion ranged from 84 percent to 95 percent. It is to be noted that the modernization works were seriously hampered by the fact that the introduction of the RWS principle involved the reconstruction of all control structures from the distributory level down to the field channel. The redesigning and reconstruction created a lot of confusion in the minds of irrigation engineers. 5.10 Equipment and Vehicles. Small equipment manufactured locally have been procured albeit with major delays in most cases. However, the procurement of large O&M equipment like hydraulic excavators, diamond drilling machines and tippers requiring ICB were not procured at all due to lack of approval by the GOG's Finance Department.  7 5.11 Training and Studies: The project provided for training of about 26 mechanical technicians, and training in RWS for 200 professional level, 400 field level, and 8,800 progressive farmers, study tours for six senior officers in India and abroad, and vocational training for displaced persons. The training of professional staff through study tours overseas has not been carried out. This was mainly due to restrictions by the Central and State authorities who have to approve each individual application. Training in local institutes has progressed well with staff trained in RWS atWALMI numbering 2723 (professional staff) and 971 (non-professional staff). Similarly, about 915 professional and technician grade staff were trained in O&M of construction and hydraulic equipment during 1984-1994 at existing training centers in Gujarat and at project sites. In addition, about 9,850 farmers have received training during the project period. About six studies have been completed, covering irrigation intention surveys, dam fishing potential. R&R study for Sukhi sub-project and evaluation of the status of R&R in all 22 sub-projects. Due to delay in full completion of MIPs, two studies on evaluation of MIP schemes and RWS could not be initiated. More details are given in Part III/6D. 5.12 Central Design Organization (CDO): The CDO was strengthened with the creation of a Minor System Design Cell (MSDC) headed by a superintending engineer and supported by one executive engineer and three deputy executive engineers. The MSDC has succeeded in introducing some uniformity in the design standards of minor systems, training of staff and monitoringa of designs prepared by the field design units. The quality of minor system design has improved as a result of the strengthening of the CDO. 5.13 Quality Control Unit (OCU): The QCU has been strengthened by increasing the number of executive engineers by three. Most of the staff in QCU are generalist civil engiineers who need to be trained in quality control and construction methods. 5.14 WALMI: The construction of WALMI buildings at Anand was completed with some funding from MIP II and it moved to its new campus on May 1. 1990. The WALMI has built up adequate training facilities for both professional staff from the NWRD and the agriculture department as well as the farmers. It has also acquired appropriate computer hiardware and software for training, especially in RWS. 5.15 WALMI is in the process of establishing three regional trainin. centers at Ghandinagar, Rajkot and Surat for "lower level functionaries" of the NWRD. 1 ,e need for "regional WALMIs" is questionable as these may, in the long run, dilute the standards of training and its quality, especially due to the limited manpower and fir,ancial resources available to maintain them (they are being established with financial assistance from USAID). If the aim of establishilg these regional centers is to train lower level functionaries at, or close to, their place of work, then this aim could also be achieved by operating well-equipped mobile training units from the WALMI at Anand. At present, WALMI is being staffed by a small core of permanent staff (about five or six professors and subject matter specialists), but the majority of the total professional staff of 28 is on secondment from the NWRD for fixed periods of one to three years. Therefore, the majority of trainers can only be described as ad hoc specialists who are themselves trained by the WALMI before they become trainers. WALMI should employ more specialists on a permanent basis and enhance the quality of training. However, it is to be noted that WALMI has conducted some interesting and valuable seminars on farmer participation in water management shortly before project Closing Date. 5.16 Rotational Water Supply (RWS): The training of professional staff from the irrigation and agriculture departments at the WALMI and elsewhere in India, together with the training of farmers, has not been as effective as was originally envisaged. A number of factors contributed to  8 the delays in the introduction of RWS and the lack of effective training at WALMI: (i) RWS was a new supply-oriented system of delivering water to farmers which was totally different from the traditional demand-based "shehpali" system which the farmers practiced in Gujarat; (ii) considerable time taken by GOG in evolving design guidelines for RWS and their fool-proof implementation in the field; (iii) due to delays in the construction of distribution networks and field channels, the total area covered by RWS varies from 0 percent in Sukhi and Shetrunji sub-projects to 100 percent in Dantiwada and Und sub-projects; (iv) the legal issue of supplying water and charging it has not yet been sorted out; and (v) the farmers have not yet been adequately trained in RWS and they are not yet used to the idea that they will receive water automatically following the fixed turn schedule. 5.17 Generally, the farmers seemed to welcome the RWS and a number of them reported increased crop production as a result of RWS. However, in some sub-projects (e.g. Und), the tail- end farmers complained that they were unable to receive the allocated water either due to breaches in the canals or the farmers in the upper reaches diverting most of the water on to their fields. Most of the farmers' problems, either pertaining to RWS or on-farm water management, could only be solved through in-situ training and the establishment of Water Users Association (WUA). At present, only one such association has been established in the Uben sub-project, although it is yet be registered. Annex 2 provides details on the implementation of RWS and possible improvements. 5.18 Economic Rehabilitation of Project Affected Persons (PAPs): Of the 28 sub- projects, 22 have rehabilitation components. A total of 140,352 PAPs belonging to 23,392 Project Affected Families (PAFs) would have to be involuntarily resettled and rehabilitated. Of these, 15,461 families lost at least one fourth of their agricultural lands, and were entitled as per GOG policy to be compensated with land equal to the amount acquired from them with a minimum grant of five acres (two ha) or cash compensation in lieu of land. By the project Closing Date, approximately 5,799 landed PAFs were compensated with land, and 9,662 had received cash compensation in lieu of land. However, the 7,931 landless PAFs were not entitled to any economic rehabilitation as per GOG norms. 5.19 The objective of the rehabilitation component was to ensure that after a reasonable transition period, the displaced persons regain at least their previous standard of living. Project strategies included: (i) land for land within limits imposed by the Indian Forest Act of 1980 and cash compensation in lieu of land; (ii) fisheries development (1,000-1,500 PAFs); ciii) right to cultivate land in the draw down areas of the reservoirs (1,500 ha and 1,000- 1,500 PAFs); and (iv) project employment, vocational training and small business ci cdit. 5.20 The SAR and legal documents required that GOG: (i) prepare an integrated overall plan for rehabilitation; (ii) prepare detailed economic rehabilitation plans for nine priority sub- projects; (iii) maintain a rehabilitation committee within each sub-project; and (iv) rehabilitate displaced persons in accordance with the guidelines set up in Schedule A of the SAR. 5.21 In 1989-90, the problem of the landless PAFs who had not received economic rehabilitation assistance, and who had not recovered their previous living standards even after a decade of resettlement, was highlighted by Bank missions. Particular attention was paid to women of PAFs who faced specific problems. A participatory assessment of the status of rehabilitation was carried out by an NGO in 1991. As a result, it was agreed to prepare accelerated economic rehabilitation plans, targeting below poverty line PAFs, including marginal and landless families, women, scheduled tribes, and castes. In accordance with the Credit Agreement, nine sub-projects were taken on first priority, as these had the maximum number of target groups (4,893 PAFs).  9 5.22 The economic rehabilitation plans prepared by GOG, in association with NGOs, were implemented in 1992. They included, for the first time, NGO participation in organizing and facilitating beneficiary participation and implementing economic development programs for women, in association with GOG, and subsidized credit for productive asset creation for PAFs below the poverty line, through the District's Rural Development Agencies. 5.23 By the Credit Closing Date, 1,000 PAFs below the poverty line had been assisted under the accelerated economic rehabilitation plans. GOG continues to provide support for the economic rehabilitation of the remaining PAFs below the poverty line in the nine sub-projects under regular government poverty alleviation programs. 5.24 While economic rehabilitation efforts for PAFs below the poverty line were undertaken since 1990, and these are being sustained in the nine sub-projects, the economic rehabilitation of PAFs below the poverty line in the remaining 13 sub-projects continues to be inadequate. Overall, the economic rehabilitation component began late, and this has hampered achievement of its objectives in total. Annex 3 provides further details on the implementation of the Resettlement and Rehabilitation (R&R) Component. 5.25 Dam Safety: The Bank supervision missions monitored closely the implementation of the recommendations of the Dam Safety Review Panel (DSRP), in particular those relating to the structural safety and integrity of the dams. In pursuance of the Bank's recommendations, GOG established a Drilling and Grouting Unit to implement the recommendations of the DSRP regarding: (i) the leakages of the spillway sections of the dams through drilling and grouting operations; and (ii) the maintenance of internal drainage systems through systematic inspections of the foundation galleries and unclogging of drains so that the uplift pressures in the dams could be kept within the design limits. This Unit proved to be very useful in checking leakages and seepage and thus contributed in an efficient manner to the overall safety of the dams. 5.26 Initially, GOG was slow in implementing the recommendations of the DSRP. In 1992, GOG established, at the request of the Bank, a Dam Safety Review Committee to accelerate the process. Whereas, 76 out of 166 recommendations had been implemented in November 1992, 126 recommendations had been implemented in May 1994, and the balance 40 were in various stages of implementation. At the time of the PCR mission, all recommendations were expected to be implemented by December 1994. 5.27 Quality Control: Quality control (QC) is the primary responsibility of one of the several construction divisions of each sub-project. In addition, a special QC unit in NWRD under a Chief Engineer (CE) is in charge of overall QC of irrigation schemes in Gujarat. The CE is assisted by nine executive engineers who make surprise visits to construction sites for random checks on the quality of materials and the methods that are being used in construction. 5.28 Field visits to some five sub-projects indicated variances in QC from site to site. If the quality of construction and materials used were adequate at sub-projects Dantiwada and Watrak, then at Und the overall quality of construction was well below expectations. It appears that the downstream slope of the earth dam has not yet been fully turfed according to the design and, as a result, there are visible signs of erosion all along the slope. Since some of the distributary and minor canal embankments have not been well consolidated, there is some evidence of canals sinking along with the embankment. Also, the joints holding the pre-cast slabs used in canal lining have cracked in several places allowing water to seep through the embankment. The farmers also indicated that because of frequent breaches in the upper canal reaches, water was not getting to the tailenders in time or not at all.  10 5.29 As in other Indian states, QC and construction management are not treated as specialities in Gujarat. The same generalist civil engineer who surveys, designs and builds a project also monitors the quality of construction. Engineers in charge of QC have not received any formal training in QC methods and procedures and in construction management. Although India has pioneered the techniques of construction using appropriate technology (AT) over the last fifty years, the engineers are not usually taught or trained in AT. Attempts are now being made to 'develop national guidelines on QC and also to train engineers in QC and AT. 5.30 Opration and Maintenance: One or two sub-divisions under an executive engineer are responsible for O&M on a day-to-day basis. Invariably, the entire canal system along with the headworks receive annual maintenance in September/October each year prior to the commencement of the irrigation (Rabi) season. Extra staff are employed for cleaning of the canal debris and maintenance of control structures. The annual O&M expenditure seemed to vary from sub-project to sub-project but the NWRD is planning to spend at least Rs.270 per hectare on annual O&M. At present, there appears to be no uniformity in O&M procedures at different sub-projects. At one of the sub-projects visited (Und), the mission observed that the galvanized iron housings of the gate control mechanisms, the cat walks and the railings are rusting badly because they have not been painted for the last five years or so. Since 1992, the superintending engineer in charge of a group of sub-projects is allocated O&M funds sub-project-wise instead of a blanket allocation of the past. 5.31 TestinglCommissionin of Structures: Some of the canals and canal structures were not tested for their performance prior to their commissioning because of the defect liability period of one year which the Indian contractors are given at present. This has happened because in some sub-projects the headworks and canal systems were built by two separate contractors and the headworks were not completed, say, even after one year of canal completion. As a result, the defect liability period of the contractor who built the canal elapsed without adequate testing of the canal performance. The contract provisions regarding contractor's liability should be suitably amended to overcome this problem. 5.32 Agricultural Extension: The supporting services provided by the Department of Agriculture (DOA) through agricultural extension and by Gujarat Agricultural University (GAU) in the training of Subject Matter Specialists (SMSs) are somewhat weak in respect of on-farm water management and need to be strengthened if the irrigation potential created in all sub-projects is to be realized. 5.33 There was good interaction between DOA and NWRD at higher levels. However, it needs to be improved at the lower level functionaries. The SMS for water management is available only in sub-project areas, since GOG is not planning to fill their vacancies. All SMSs (Agronomy) in the project area should be trained in water management. 5.34 Monthly zonal workshops are conducted by Master Trainers from GAU to the SMSs of DOA. The messages passed on to them are not sub-project-specific and are not adequately water management-oriented. Participation of ID project staff in the zonal workshops and integration of irrigation activities and agricultural field activities should be encouraged. 5.35 Land Levelling in Command Area: About 14 percent of the total cultivable command area (CCA) amounting to 25,100 ha still requires land levelling. These were expected to be completed within the next three years. 5.36 Water Users' Association (WUA): Organization of WUAs began rather late and one WUA has been established in the Uben sub-project, though it is yet to be registered. Chak-level  11 farmers' groups have been established in Dantiwada and Karjan sub-projects. Farmers are reluctant to come forward and take the responsibility for operation for a number of reasons. They have to be adequately motivated with the possible involvement of NGOs. The GOG's Draft Gujarat Policy Resolution on Irrigation System Turnover, which seeks to turn over irrigation schemes to farmers' organizations with NGO's involvement is a welcome step forward. The GOG should take urgent steps for the implementation of its policy through legislation, if necessary. 5.37 Monitoring Role of the Central Water Commission (CWC): In addition to the monthly monitoring by the Project Planning and Monitoring Cell (PPMC) at Gandhinagar, the MIP II was monitored annually by the CWC. This was usually done by one or two engineers of Deputy Director to CE rank from the Project Monitoring Divisions of the CWC who visited the sub- projects from 1986/87. In only three years since then (1988/89, 1989/90 and 1993/94) were they able to visit all 28 sub-projects. 5.38 Project Costs: The final cost of the project is estimated at Rs.9,780 million (US$473 million) which translates to Rs.28,723/ha, compared to the appraisal estimate of Rs.3,716 million (US$344 million) which translates to Rs.1 1,060/ha. This represents a cost overrun of 160 percernt in nominal Rupee terms and 51 percent in real terms. Expressed in US$ which reflects the devaluation of the rupee against the dollar, the total overrun was only 37 percent. The final cost includes costs incurred up to March 31, 1994 (Rs.7,607 million) plus costs to complete (Rs.2,173 million). The cost overrun was partly due to quantity increases including expansion of project scope and revision of spillway capacities, and partly due to unit cost increases including price escalation following the Gulf crisis. The major portion of the cost increase was attributable to construction of MIPs whose cost increased by about 140 percent over the appraisal estimate, but accounted for nearly 65 percent of total project cost compared to 70 percent at appraisal. The cost increase registered by the modernization schemes was 40 percent over the appraisal estimate, but accounted for 14 percent of total project cost compared to 27 percent at appraisal. Appraisal estimates of local price and physical contingencies proved to be underestimates. Total project costs at appraisal and completion are given in Part III/5A. 6. Project Results 6.1 General: The project was, by and large, successful in achieving increased agricultural production and improved farm incomes in the three sub-projects, out of the 28 which were completed in all respects, and whose RWS is being implemented. Based on these results, it is estimated that ultimately, when all sub-projects are completed, the project objectives would be achieved. Attainment of physical targets, though considerably delayed particularly in respect of distribution networks including field channels, has largely been achieved (dams and canals) or would be achieved in the next three years (distribution networks and field channels). The aggregate area to be irrigated by the 28 sub-projects has been revised downwards from 354,100 ha at appraisal to 340,500 ha, when land surveys were completed. When the cultivable command area (CCA) of newly added sub-projects (Karjan - 56,200 ha and Machhu II - 9,900 ha) is added, the total CCA under the project would become 406,690 ha. The physical achievements of sub-projects under MIPs are set out in Part III/4A. At full development, the project would generate higher incremental agricultural production than projected at appraisal in respect of cotton production 64,800 tons (SAR 37,200 tons/year) and oilseeds 202,000 tons (SAR 101,300 tons/year), but a slightly lower foodgrain production 517,600 tons (SAR 573,000 tons/year). 6.2 The project has generated several positive benefits, namely: (a) Although late in the implementation period, RWS concept has started making impact in some sub-projects like Uben, Dantiwada and Karjan.  12 (b) The implementation of the distribution network under RWS principles has progressed well, though belatedly in accordance with principles as per SAR and subsequent implementation plans. (c) The much needed storage of water was successfully achieved with the completion of sub-project dams, a great boon for the drought-prone state of Gujarat in future years. (d) Groundwater development through additional bore wells in the project area and sale of water by farmers would contribute to increased production. 6.3 Crop Production: Most of the increased crop production from the project is expected to result from higher crop yields, and cropping intensity, and a shift to more remunerative crops during rabi and hot weather seasons. Yield levels of all crops except sorghum, groundnut, maize and sugarcane are estimated to exceed those predicted in the SAR with paddy, pearl millet, wheat, mustard, cotton, castor and vegetables, exceeding the SAR yields by 3-33 percent, whereas those of other crops are assumed to be same as the SAR yields. The PCR crop yield estimates for re- evaluation of the project are based on crop yield data provided by the Area Development Commissioner (ADC) and confirmed by farmer interviews in the field. Overall cropping intensity is assumed to increase from 109.6 percent to 138.4 percent at full development, about the same level of increase assumed in the SAR. 6.4 Income Effects and Employment: Farm budget analysis shows that incremental farm income expressed in 1993 prices would be about Rs.22,390 (2.5 ha farm), Rs.38,440 (4.5 ha farm) and Rs.26,200 (5 ha farm), reflecting real increases of 4 percent, 5 percent, and 6 percent respectively, compared to incremental farm incomes envisaged at appraisal. With a farm family size of six persons, per capita incremental agricultural income for the smallest farm size (2.5 ha) would be about US$120 at full development. The project is expected to directly benefit some 95,500 farm families, 1.300 families more than envisaged at appraisal. 6.5 Economic Rate of Return (ERR): As presented in Part 111/6B, economic rates of return (ERRs) have been re-estimated for the project as a whole with and without sunk costs and for a sample of four sub-projects (3 MIPs and one modernization scheme) with and without sunk costs as well, based on cropping patterns, updated costs and prices of commodities. To simplify and to make it comparable with appraisal, both the costs and benefits of newly transferred sub- projects from Credit 101 1-IN were excluded from economic re-evaluation. Opportunity cost of land in agricultural production was included in the analysis to account for land lost due to construction of dam and distribution system including land. Similarly, water diverted from the project reservoir for drinking purposes was valued at opportunity cost of agricultural production foregone as a result. This loss is not material as it would involve a total CCA of 10,200 ha, less than 3 percent of the project's CCA, on the assumption that one million m3 of water would be required for 150 ha and that about 68 million m3 would only be diverted for drinking purposes. 6.6 The PCR estimates of ERRs with sunk costs are 9 percent (project as a whole), 13 percent (Und sub-project), 10 percent (Sukhi sub-project), and 8 percent (Watrak sub-project) compared with appraisal estimates of 30 percent (project as a whole), 12 percent (Und), 13 percent (Sukhi), and 14 percent (Watrak). The PCR estimate of ERRs without sunk costs are 21 percent (project as a whole), 25 percent (Und), 33 percent (Sukhi), 21 percent (Watrak) and 21 percent (Shetrunji) as compared with appraisal estimates of 43 percent (project as a whole) and from 17 percent-48 percent for MIPs and 53 percent (Shetrunji modernization sub-project). The lower ERRs at PCR is mainly due to:  13 (a) High cost increases in both nominal and real terms, ranging from 2 percent (Und) to 133 percent (Jhuj and Bhadar). The nominal per ha cost has increased from Rs. 11,060 at appraisal to about Rs.28,723 at PCR (160 percent); (b) Delay in the accrual of benefits. At appraisal, it was assumed that the benefits would start flowing from 1984 and full development benefits would be attained by 1992; but the benefits commenced only from 1985-89 and the full benefits would hopefully be attained by 1996/1997. These are not fully offset by the higher yields of certain crops (from 3-33 percent) than were envisaged at appraisal. 6.7 Sensitivity Analysis: There could be three main factors which are likely to change the project ERR without sunk costs. These include variations in assumed benefits, variations in O&M funding and the inability of the NWRD to operate and manage the MIPs as designed. The results of the analysis show that: a reduction in benefits of 20 percent would lower project's ERR to 17 percent; a reduction of 50 percent in the O&M funding (assuming that future benefits would be reduced by 50 percent) would lower ERR to about 10 percent and NWRD's ineffectiveness (measured by ineffective RWS operation lowering benefits by 20 percent) would lower ERR to about 17 percent. 7. Project Sustainability 7.1 Project sustainability depends on the continuity of production benefits, which are largely determined by a high and stable level of crop revenues. These, in turn, are influenced critically by the availability of irrigation water. Overall, project sustainability would depend on: (a) having trained staff in place together with adequate equipment to maintain the system; (b) ensuring that O&M costs are fully met; (c) obtaining not only local acceptance but active local support for the project to realize water use efficiency, and minimize the risk of neglect, deterioration and vandalism. The likelihood of meeting these conditions is a major challenge facing the GOG. 7.2 Cost Recovery: At appraisal, water rates in the State were expected to be increased to cover the full O&M expenses plus a reasonable portion of capital cost, and reviewed every March 31 and, if required, revised to reflect the investment and operational costs as well as the repayment capacity of the farmers. No revision had taken place since 1984. Water charges, which are among the highest in India, are uniform throughout the State. They vary by crop and season, ranging from Rs. 120/ha per irrigated ha of paddy in kharif to Rs. 1,250/ha for sugarcane. The result of this non-revision of water rates in Gujarat has been a growing gap between O&M expenses and the cost of irrigation service, although the rise in output prices does not justify stagnant water rates. 7.3 Crop yields from irrigated land and prices of agricultural commodities have risen during the period 1986-1994. Simultaneously, O&M expenses also rose sharply. During this period, gross receipts' (as well as receipts per ha) from irrigation in the State rose from Rs.73 million in 1985/86 to Rs.241 million in 1993/94, an increase of 230 percent. However, revenue from water charges alone increased to a considerably smaller degree and their average share also declined from 85 percent to 47 percent during the same period, indicating that relatively small 1 Gross receipts include revenues from water rates and other receipts.  14 portion of the increase in total receipts is attributable to receipts from water charges. As a result, the recovery ratio, for example, in 1986/87 (gross receipts Rs.123 million to total O&M expenses Rs.170.5 million) was 72 percent', representing an annual subsidy of Rs.48 million from GOG, on the assumption that 1986/87 would be a fairly representative year. 7.4 It is important to recognize that the scale of water rates needed to recover O&M costs would not have a significant impact on net farm income. For example, the results of analysis indicate that the present rate would imply an annual payment equivalent to one percent of gross farm income. As prescribed by the Irrigation Commission, optimum levels of charges for use of water for irrigation as a percentage of gross farm income was estimated at around 5 percent for food crops and 12 percent for cash crops. But actual receipts average one percent of gross farm income per ha of irrigated area in Gujarat, compared to 2.9 percent in Uttar Pradesh. 7.5 There is thus a clear need to increase water rates but it would be difficult to increase them substantially in the short-term. 7.6 Raising water rates is thus a necessary step but not sufficient to establish the accountability between the Irrigation Department and its farmers, which is essential for sustained provision of quality irrigation service by the Irrigation Department. Building such accountability linkages requires the imposition of financial accountability on the Irrigation Department and involvement of farmers directly and significantly in decision- making relative to system operation and maintenance. The formulation of water users association proposed under the project is a step in the right direction, although its evolution is likely to take a longer time than was envisaged at appraisal. 7.7 The environmental impact of the 28 sub-projects has not been monitored but the available evidence indicates that salinity and waterlogging problems have arisen in two sub- projects, namely Panam and Watrak, and some remedial measures have been taken at Panam. It is essential to monitor the environmental impact of each sub-project and take immediate remedial measures. 8. Bank Performance 8.1 The Bank's performance throughout the project cycle was generally sattisfactory. While recognizing problems in the irrigation sector and state finances that made progress in completing project works on schedule necessarily slow, stipulation of covenants did not consolidate improvements (for example, the establishment .,f water charges to recover the full O&M cost and a reasonable portion of the capital cost) necessary for long-term stability. Certain misunderstandings about the advantages and possible problems of RWS, which have delayed the issue of directive by GOG until January 1988, had been clarified by the Bank Supervision staff. The supervision mission of August 29 to September 2, 1988 reported that the principles of RWS as defined in the SAR have been accepted by the GOG and later applied to specific sub-projects, although the Irrigation Act has still to be amended for legal operation of RWS. Despite this, the Bank supervision missions have noted that the practice of inviting applications from farmers had not been completely dispensed with until early 1994. Although the Bank was aware of the problems of PAFs (who had not received land for land, and the overall decline in their living standards), no specific action was taken until 1989 to work out comprehensive solutions in agreement with the Borrower. Since 1989, the Bank worked with the Borrower to identify the 1 Based on report (April 1988) of study group to arrive at the norms for realistic 0 & M cost and 0 & M funding by GOG for irrigation projects.  15 major problems and time-bound action plans to resolve them. The Bank used the credit extension as a vehicle for improved support for economic rehabilitation of PAPs. As late as April/May 93. the Bank expressed its continuing concern for the need for priority action in construction of distribution networks, implementation of RWS, allocation of adequate O&M funds, training in water management, preparation of agricultural development plans and the establishment of WUA. 8.2 The Bank Supervision missions visited NWRD with reasonable frequency, on average once every 7 months in the years 1985 to 1994. There was good staff continuity and they performed well concentrating on major problem areas in construction, water management and R&R. As a result of suggestions made by the Bank during supervision, improvements were made in progress reporting, implementation of RWS, implementation of the recommendations of the Dam Safety Review Panel, training in water management, improvements in budgetary allocations, and improved design, implementation and monitoring of R&R activities. The supervision mission in April 1986 voiced strong concerns over, inter alia, poor budget allocation. Similar concerns were expressed with varying force through March 1994. 8.3 The Bank was also flexible in agreeing to reallocating resources, increasing disbursement percentage for civil works and expanding project scope by adding certain items from Gujarat Irrigation II Project. 8.4 The main lessons learnt during project implementation are: (a) The inclusion of sub-projects in the later stages of the project period. which is one of the main reasons for delay in the completion of MIP I is a lesson already learnt but has not been applied to the follow-on MIP II project where some five sub-projects were added when the project was already two years beyond the original Closing Date. While utilization of credit savings is a major objective of this addition, owing to the difficulties in counterpart funding it would have been prudent to have had them funded from other sources, instead of transferr-ing them to MIP II, thereby delaying completion of other sub-projects and accrual of benefits therefrom. (b) Allocation of O&M funds by sub-project since 1992 is an innovation and a significant improvement over the absence of allocation in the past. It should be encouraged in all future projects. (c) As a priority activity, provision of drinking water was introduced into the project in its later stages on a much larger scale than envisaged at appraisal. This has led to some sub-projects not providing irrigation water in one or two years, e.g. Und and Shetrunji. The loss of command area and expenditure on originally planned and constructed distribution systems are difficult to quantify now but could have been avoided by realistic forward planning. Overall water use planning as part of the sub-sector study would be a useful input in future projects of a similar nature. (d) Solutions to some project problems depended on the willingness of GOG to address difficult sub-sector and state-wide issues which could not be resolved at project level, e.g. water rates, O&M funding, and staffing. The Bank should ensure that the agreed policies and conditionalities are realistic and implementable. If during  16 implementation they prove otherwise, these should then be amended or deleted from the Legal Agreements. (e) The need for upgrading technical performance is clearly demonstrated by the project, particularly in the area of ensuring adequate maintenance, better water management, good quality of construction, and securing full economic rehabilitation of communities displaced by the construction of dams. The Bank needs to pay more attention to design and implementation of training components and to set up firm M&E criteria in project design. (f) Some of the reforms implicit in "command area development", initiated by GOI several years before the project was approved in 1984, covered more extensive lining of canals, improved construction standards, regulated outlets serving irrigable areas on larger than 8 ha on average, compulsory land development below that outlet, rotational water supplies and increased water charges. While it is hard to know at this time whether the reform measures were successful or not in the context of MIP II, the Bank's positive support to investment in irrigation proved valuable to Gujarat's (or India's) drive to increase foodgrain output. Irrigation costs were also large enough for this sector to provide an ideal channel for resource transfer. (g) A five-year implementation period was far too optimistic, given the unprecedented flood in 1983 and severe drought during 1985-1987. During future preparation of irrigation projects in drought prone states like Gujarat, it is desirable to include an allowance of time for shortage of funds resulting from droughts and floods. Competition with other projects which may get higher priority for availability of scarce resources need also to be adequately assessed (e.g. SSP and domestic, municipal and industrial water). (h) The appraisal had overestimated the capability of the NWRD to complete the required implementation of distribution networks in accordance with RWS principles within the five-year project period. The complete shift from the "Shehpali" system (followed by the Gujarat State for many decades) to RWS system required several follow-up steps including the overcoming of inertia and reluctance associated with a full changeover, modification of state-wide legal framework, mobilization of farmers' willingness to accept and participate in the new system, training of planning and design staff as well as farmers, and establishment of farmers' organizations for active participation. Given this reality of managing the widely dispersed sub-projects, a more realistic implementation period should have been prepared at appraisal and the Bank should have looked into the possibility of improving the existing system rather than dictating a complete change. (i) There is a need to address all R&R and environmental issues comprehensively at preparation and appraisal of the project and to arrive at agreed actions to address these issues in a manner consistent with the Bank's operational directives.  17 9. Borrower Performance 9.1 The project was prepared adequately by GOG with the participation of GOI's Central Water Commission. However, during implementation, project performance suffered largely due to inadequate and late budgetary allocation. 9.2 The dams and canals were virtually completed, but the implementation of distribution networks lagged in terms of their readiness to distribute water in accordance with agreed RWS procedures and criteria despite cost overruns and five extensions spanning four years and three months. The initial delays were caused by severe floods in 1983 and successive droughts from 1985 to 1987. The floods brought about costly remedial works in redesign of the spillways and the prolonged drought caused hardships and diverted key staff to implement the drought scarcity programs. The delay was also caused partly by the reluctance of NWRD in accepting the RWS criteria in initial years. There were also increasing concern over the implementation of R&R. 9.3 The rapid expansion of irrigation projects under IDA Credits -- Credit 1553-IN, Credit 1552-IN, and Credit 1496-IN -- about the same time would be difficult to absorb administratively even for the best managed institutions and it has predictably placed NWRD under serious strain. The contribution of the MIP II Project in improving the capability of the NWRD is hard to isolate since NWRD has gained from concurrent implementation of two projects as well as from interaction with Bank staff and expatriate consultants provided under these projects. Nevertheless, the performance of the NWRD is creditable, given the problems caused by natural and man-made causes. It is noteworthy that three of the sub-projects have received national awards -- Uben and Aii II, best performance award, and Dantiwada, certificate of merit in the agriculture sector. 9.4 Compliance with covenants was, by and large, satisfactory. Four were partially complied with and the fifth was not complied with. The first two of the partially complied covenants relate to the establishment of WIUA in at least three sub-projects, and establishment of a system of bulk sale of irrigation water within the selected three sub-projects. Only Uben has formed its WUA which has yet to be registered. However, the bulk sale of irrigation water has yet to take off. The third covenant is concerned with minimizing the risk of malaria and other water- borne diseases in the command areas. The fourth covenant relates to the economic rehabilitation of project-displaced persons, which is not yet fully implemented. The fifth covenant, which has not been complied with, relates to the establishment of water charges to recovet the full O&M cost and a reasonable portion of the capital cost, and the review of such charges every March 31, if required. This issue encompasses the irrigation sub-sector as a whole and would need to be resolved at the highest government level. 10. Project Relationships 10.1 Through long association with NWRD extending over three decades beginning with Shetrunji Irrigation Project -- Credit 13-IN in 1961 -- the Bank has developed a cordial working relationship, allowing its supervision staff to become familiar with the country, the state, its issues and concerns. While most project-specific problems were eventually resolved, the crucial issues such as water charges were not resolved. 10.2 The Bank and Borrower relationships with other relevant parties have been generally satisfactory.  18 11. Consulting Services 11 .1 In general, satisfaction was expressed by NWRD over the performance of the consultants engaged during the project under review. The construction was carried out by private contractors and their performance was variable. 12. Project Documentation and Data 12.1 The Staff Appraisal Report, the Project Agreement, and the Development Credit Agreement were detailed enough to provide a basic framework for the Bank and NWRD during project implementation. 12.2 During supervision missions, there was not much difficulty in getting data on the status of project implementation. The supervision reports and the relevant project documents available at the Bank contained some information for the preparation of the project completion report. In addition, NWRD and the ADC were able to meet the remaining data requirements required by the PCR mission.  19 PART II GUJ.'R T MEDILH Irl.IG.:TION-II PrtOJ.3CT (Cr. no.149b-INT) Part-lI of P.C.R. Project Review from Dorrower's Perspective comm. nt on Part-I Ere_aLnDle: 1. An FAQO/!ORLD BL'W Co-operr.tive Progr-mme Team with the participation of three staff members from tl13 '3rlrl Bank Resident Mission, New Delhi, visited GujFret from.3-14 July, 199L. to review imvlerlentation performance of the Gujarat Medium Irrig-.tion-II Projeet (mIP-'I) &nd orepared : Part-I of the Project Completion Report (PCR) of the Project. The Mission hsd discussion witf'the officials and the Secretary, Narmade & Wrater iResources.Departmant on 4th July .'94+ prior to their visit to selectesi sub-projects viz. Dantiwadea, Watrak, TJnd, Sukhi Sipu and Shetrunji. Thereafter, the Mission had a wrap-up p.eting on 13th July '94 'ith the Ieptt. officials e in which the Flssion pressnted an Aide 1e3moire of PCR. The Borrower (GoG)'s views/comments on the Part-I, are given as under:- 2. (Ref. ) 3-I-C .The content-here in is incomplete. Provi7-ion in SAR for FielI Channels and-Field Drains was mede for Fbout 2,00,000ha. of 23 sub-projects. In case of Panam, Dantiwe&a, lhadar, Shatrunji .nd Machhu-I, the FCs E: FDs wcre to be constructed by GoG under its own plan-progr.mmne. Provision for FC/FDs was made at Rs.1000/ha. and Az.600/ha. respectively. 3- (Ref- Para- 13-I-E)- The content is mis-leading. The construction of such access roads was to be done by GoG under its own plan-progremme. 4. (Rif. Para-3 -II-C) The strengthening of PPM Cell was to'be done only for the aspect of monitoring of Rehabilitation. 5. (TDIf. Parr 3-2) Though the amount of ID.: credit in US .!172 M is correct, however, the credit Agreement was made for SDR 164.3 Et.  20 Propjact Design nnd Org-anistion: 6. (Ref. P.-ra 4.3) The DIFter N{anFSemint Unit was meant tz) c.rry out mcnitoring of tthe waLer management of completed sub-projects whereas the actua1 water mvnagement is to be done by field stEff on tha projects. 7. (Ref Para 5.2) i) Budget z'rovisioin of ".;-788 F` w: s m;ode during 198Lh.-5 ,s p-r E-reed sch:-.-ule. ii) The projact imT)l ementFtion wJrs not hampered by the counterp;rt provision for SSP. iii) The sub-Drojoct of Madhhu-I(Dem str.--ngthening) wzas mlso includ1edi alongi-rth other four sub-projects. It would not be prop-r to say that addition of new 5 sub-projects was made only for- utilisation of savings in credit. The main aim. wAs to compl-te the belince works of these projects after the closure of earlier credit-1011-Ir. ETch subproject has been giv;en individual allocation. Therefore, the original sub-projects did not suffer budgatory deficiency due to this inclusion, Ps otherwise the allocation for original sub-projects would remoin same. i8. ( Re f Para: 5.3 'onl Anex- 2 ) Para 5.17 Part-III The credit was approved on June 29, 1 931s and the Agreements were signed, bcina effective from Sept.21, 1984. Ubiile it is true thet implement,.tion wes hampered by varicus problems, it would be worthwhilo to note tie long and cubersome exercise done by the Govt. of Gujarat towards the finalisation of RI-IS principle undcur the guLdrnnco of the NWorld Bank Review lissions and Experts/Consultants sent by the Resirdent Mission fror; time to tine. In 1984, at the time of Agreement, the canals end distribution sy,stem und:er b.'IT-I was ready in 48,o60 ha. as per traditional method. The_ same was yet to be constructed in 2,64.750 ho. (in original sub-projects).  21 T11e ?grea ' n t provided to introduce RTMS -in the tott1l area of 3,Wf,101 ha. Tho DrincipiM of 14\'. wAs defined undere pe?rn 6.03, sche.dule-B of Sf,r, riport No.5082-IDT of May 18, 1934 and Sch:idul.-1+ of Project, Agreement. Though the principle was dt'fined in this socument, it did not give any c^'ncrete guideline or methodology t o transform the same on field. To that e-xtent ambi fuit.r regrrding- actual imple- inentation of RI'!S prev-il_d, - Subsequently, the Eenk produced c Supplm_.:ntatv Data Volumei (SU ) in Feb. 1985. Ly this tim,e a Pilot Aria wes developed on ths R1IS prirfciple in Panam sub-project Area under the guiJance of '.'FjB. Consultant. Upto Dec. '85, th._ W.D. rviview Mlissions as woll -:s the consult nnts were unable to clear doubts raised by the GoG Officers. As a result, GoG continu,:d constructirig systems on corvontional pattern. This facb was brought to the notice of the Resident f ission by thc tHen Secrotary (Irri.). The Extract of his lettar Noo.tWfl/3067/96/Kb :t. 6th Jan. '88 is reprod-uced h_rein-under:- ".Sinco then a number of tW.brld Bank Supervisory Mlissions ha-ve been visiting the sub-projects covered under this Agr-:cmint and the advice offer .d by them has bren faithfully accepted from time to time. For example, on Ponam Project, the T'srl PI B,nk -Consultant Mr. Shanan spent about 60 days in 20 differnt visited apread over e period of four years from June '80'to June '81+ to pvolve tlmmodels on_ aft. r the other, the latest one bcing the *&-nsoli patt.?rn having a structural layout of canals. Such a layout has b-zen adopte:d in at least 10 projects (i) Deo, (ii) Sipu, (iii) SukhbhF r,r (iv) Venu-II (v) Aji-II, (vi) Aji-IlI (vii) IJn.1, (viii) Ubon (ix)Domi-II and (x) Kalubhar, though all of them are not thc szme as stipulated in the Project Agrc.mi,ent for credit 1496-IIT, fof sevcral reasons. .I. Thus till Oct. 1W'07, a mcjor confusion regc rr.ing iurplementsition of n.JS nrcvailod, even with th Banlk Supervisory Mlissions Flso. As - first step in this direction, GoG issuad a guidelines for introduction of RIW'S on July 18, 1987 which were rcviawod by the B,-n3x, consequently the final revised guidelinc s were issued in'Jan. 189 and tlhosa for structures in July '89. This reveals that till July '89 1P-f. as well as GoG werre at a strge of finalisation of RWS nrinciplcs.  22 Subsequently, b.-s;s. on an TJnderst. nrlinG r: ,.ched with the Feb. '89 I4ission, Gos estab!ishNe: a Water Mnagement Tasl Group (WITG) headcd by 1Director, WA.LMI, to gear-up the progress on R1.JS and to cnnstnntly mbnitor the same. Th- '.-MTG evolved a system of preparing Pilot Area in first priority 9 sub-projects and intrd&uced RI-S in these Pilot Are?s first, then it was extzinded to the rcmaining sub- projects. Stage by stage this long pending task wos achi-'ving substantial progress after March '89. This should be considered as a resl take-off stage in the introduction otD RWS. Thereforc, the achievoment (65%) in intrvduction of RI!S hes b_.en done during 3/89 to 3/9L- period only. Here it may further be added th^t by 'March '89 the distribution system was completed in substcntiaSl aren -_. an. .msoificptions had to be made to suit t. the RIHS requirements evolved by Marfh&'.89. Tha capability of GoG to complete rec!uLred imple- mentation of distribution of network in accordFnce with the :TV"S principle within the time frame of five years had been advcrsely affected because of non-specific definition of 7'\.S nrhncipl, s in the project agreement and also dlue to various time consuming experiments carried out by- the torld h-,nk, which caused delyed.... imnlmentstion of RWS principles. It is worthy to note that the considerable time was reauired to finalise the network planning and to construct micro-structure. Eowev7r, from March '89 to March '94 , GoG could achieve a remarrable progress on R14S in original sub-projects to the tune of 1,91,418 ha. Cut of 2,94,604 ha. (657). T--ot only that efforts also have b-n made to introduce RWS in newly includ-d sub- projects and progress achieved is 20,770 ha. out of 66,190 ha. The overall achievi6nent is 59%. This achievement inspite of sev*,ral bottl2nccks, and uncertainiti2s, Ps s'eted above, is commendable by any standards. Out of total CCA of 2,90,044 ha. of 24 sub-projects, the systeni in 1,90,671 ha. (i.e. 65,,) is rcoily for N fl4S. Four sub-prljccts viz. Vc-r-II, F;r1.A,t Fatewadi and I'haricut are not sidtable for R1J!S, which is also acceptoed by the Bank.  23 Though in Sinu sub-pra'ject, Ps ps,r original agreamont, RWS was ts b-. in'Lri uc '-1' in 3000 bh.. only, 1u,- to further cxtmnti :n of tbz crelit bavyon1 '89, ?.lJT hb-s b-en introducad in 12,14b3 b.- till 3/ol,, The r.,mnining balance worl of rvr. is r.1,Lnly in P?n,n,- , .m --r(), Shotrunji(M) and Uzchhu-I (01) only. The P,nor sub-rr bj,ct hps a problom of in,- il&qu't- int'ke of -liisch -rge in main canal which is being r2p< irad at nr3sent. The log in romii14ng three mo-7,- rniF-ation subproj ;cts is mcinly duo to worl,s .rc t^, be cnrri,d out during crn,l closure condition, as constcnt irrigition is '.;iing d:-ne on thesc -Bub-rprojects. Tho -2tsons for d_lny in 'R-S impleriient tion h:v been d^iscuss.cd. How-.vur, the aidditional r<-sons are discussed zs un,-7r:- (a) I-gal issuez of supplying water ?nd ntater chrrgos thcr2on. i) GoG has Dr'2pnre-i a Draft Irrigation 1l1 which is umnecr stu-v for conniAer,,tion of Legislative I ssambly Committee. ii) t!att.r ch:'rgns issue is also not a problem c n fi n . t s TIrorlA 3ank .i .10d prs j ect only. Tho somae is being tpckled at the Stnte lavle & by Pticing Cor'itt;)e of Planning Commission et :kational J uv;l. (b)F:rm: rs' Tr::ining i n MIS. P.s Der original -gree3.ment, it was pplanned to train 8800 farmers of Danti!nda,. Panam, Watrak -nd Mazan sub-projects only. lgainst this, GoG h.s tr-ineld 10,833 farmers from all sub-pr: j 2 cts. This is a continuous process and GoG is paying sufficient attontion to this -spcct. The observation on Un,! sub-pr:-ject is just a lcPlised pr'.)blenm and h;3ncs- rnay not be ganerdlised.  24 9. (Ref. Par2 5.6, 57, 5.8, 5.9) .;ctivitiL:s of cpnals, Dist. system C. FCs. rre completed 100% in 7 subprojects end more than 9C-: in 16 sub-Drojects. T'n percantsga progrcss achieved by 3/94 for. the legging sub-prnjocts 'longwith axpect:nd corTpletion dlates sre as under:- Sr. Sub-Pro4 ct Canals mDst. Field no. system I channels 1. Pnam_- 100 94 93 Expected Complletion(EC) - 3/96 3/95 2. Jhuj 100 29 18 EC , ~ 3/96 3/96 3. Kelia 59 40 100 EC 6/95 6/95 4+. Sukhi 100 89 84 EC - 6/96 6/96 5. Deo 98 97 63 :.; c 3/95 3/95 3/96 6. 14Fe:chhundri 100 99 55 E:C - -3/95 12/95 7. 1ketrek 98 87 82 12/94 .3/95 3/96 8. Guhei 100 96 77 IilC - 12/94 3/96 9. Venru-II 100 98 91 EC : - 12/94 3/95 10. Aji-II 100 94 83 . EC - 3/95 3/95 11. Au-hI 100 99 86 EC - 3/95 3/95 12. Sapu 100 81 145 EC - 6/9 5 3/97 13. Fatewadi (M) 100 94 88 EC - 6/95 3/95 14.. Ehedr(fl) _ 100 10 SI E , M:C - 3/97 12/95 15. Shetrunji(M) 93 30 95 EC 3/95 3/95 3/95 16. Mechhu-I(M) 99 0 100 EC 12/9 5 3/97 - --___--__------------------------...--- ---------- -----------------  25 Thee above rv;y-inricrtor shows thct only r;o.k%rnisation sub-projDcts h&cX reletively less schiavemennt-. This w-s maintely -due to grcat opposition of farairs o . theso sub-nrojdcts t!o accept th, new principle of f'i0 anr works Would bo c.rricd out only during canel closure pvriods. The Disty. System/Field Channnel cornooncnts of aLpu Proj.:'ct w-s to be cornplottd iln 3000 h.r. out of 16000 hs. as per originel rgreamcnt, whila- thr;, achievcteint is much more. Tt is- also not propc-r to say that there islno c-- -or1in 'tion b:tween C.D.A eni ID wings. Those two wings are0 integral parts of "? haeled by ^ne Secratary. Thore exists' coM-0l:ta_ c-or.lination between two wings within the ]-3ptt. for ',11 inter-rolpted activities. 10. (Ref. Para: 5.11) The abro,,d training wps not arranged uidar the B.13. credit 11+96-IN because it wps already available und.er similar credit of USAID which was unrder implementation through WAULl-I. 19 Professional. Staff heve been sent abroz-d for tr.-ining un#,er TOT (Training. of Trainers) Pro,r:-nmne of TJ&.ID till thie closur;z of thnt credit in Snt. 'S2. - -lj. (fdf. .a-. 5.12, : 5.13, 5.29) Tha strengthening of .xisting Professionel staffing was done by croe2ting the following additional ccll/units:- i) M4inor system TD3sign Col, in CDO h_aded by one S.3 cnt sup,rorte.. by two :3Es and 8 DZs. ii) W.!ater Man.ngement Unit, in Sachivilayn headed by ona SV(0Ms) and two 2:!:s(DS) with four D13s. Iii) Throe Quality Control Units headed by -f,s stationed oach @ Suret, Ganr1hinagar and Rajkot. iv) Two Field Nonitoring Units fir M&R nspects haded by EMs stetioned er'ch -9 Rajlcot ansl Vadodarn. * ,;.  26 Though the staff in QCU arv from generalist Civil Zngina_ering crdro, thuy .rc Triinad ir. Stnff TrAning C.;legn locF t d a t G.?n-1hinag-r. The syllabus of the training cov;irs IC ispects clso. Cnly experioncod E.nd trained persons who heve sufficient experience of Quality - -C:)ntrol -ind ara well convGrannt with Govt. standrrd sp.3cificr-tions of ':Cs. , Govts. rules/ Circul -rs-and QC-check-lists zire postaid in Q.C. Us. The porf.rnif.nlc of (CUs is quitoi above the mark and satisfaction.- 12. (Ref. Parv- 5.28) The r.C orgsnisation at State Level headed- by Chicf Thngineer is functioni.ng ve ry effectively. At construction site, it is the resporlsibility of a independent 'C sub-Dn. which is under the Direct C(ontrol of sub-project Sup.rintending Engineer. So far v;rious W. B. Ilissions have visited almost all sub-projects more than 3 to 5 times and h.-ve exborcssed their satisfection. The sugge3stions g;enerally %f 11 O3. R nsturc which were well tak3n immc-diately when brought to tha notice of GoG. The deficiencies noticod by the Vission on Minor 14/L of Und sub-Dr-ject wzere of M & R type like some disturbed pointings in bl.ock-lining andl slope of banks, some filling Pni ovarfl2rking in conal. Th-,sa will be rectified befor3 the roxt irrigation su -.son. Tnere is no prorvisi^n of pitbhing or turfing in D/S slopq of Un; dam. Tlhe work of surfa.co dr.in-ge is, in progress. Hovtevor, suggestion of thc PCd Mission will be taken caru of. 13. (Ref. Para 5.31 ) Tho defect liability pllrio I of one year after. project complotion is adcqusto. Duo to several factors, the oxtention of this peri.o for a longer timo is un-workable.  27 14. ( Plef. P?ra. 5.36) 'A -Iigh Level Iorlcing Grcup h3a-tad by Cnief Secrotvry has b. en constitut.d which looks aftcr the issue of Fartmirs' i. rticipc.tion in Irrig^tion Minrgement. 15. (El!f. Pora:537) In caldition to Field Vllnitoring by C'.JC in-li-II Area, thc St-te PPM Cell is clso inm.lved in close monitoring of th3 project. Two.Pr:-ject Monitoring Units h3cdcd by :E and st^tioned et Gandhinz.g r, rogulerly visited all sub proj cts, to nonitor physic,'l progress. P1M C1 3.l is a Stato Lavel Cell responsibl. for monthly & quartarly mor:it2ring of .ll compon.Jnts, inclu:ding financial, of all the sub-rrojocts. It kecps day to day liasion idth Fieil Offic:rs, 1. 3B. Officers ind with GOI. The PPM4 Cell has been v3ry ffrective in-completion of this Project and earlier proj.ects.1.11 -locumin.nt:Ctions of Project informntion as prrnscribedl by ".orld Bink hIve be'en excellantly _lone by I7PI Call right from the comu0nccment till the completion of the Project. 16. (11ef- P - ra- 5.3E) The ostimatod cost hils b:'ei increrscd due ts (1) 1-'gh2r price escn1