China - Tarim basin second project

Report No. PIC4976 Project Name China-Tarim Basin II Project (+) Region East Asia and Pacific Sector Agriculture/Natural Resources Management Project ID CNPE46563 Implementing Agencies Xinjiang Uygur Autonomous Region; Prefectures of Bayinguolen, Aksu, Kashi, Kizilsu and Hetian Initial/Updated PID Date January 31, 1997 Tentative Appraisal Date January 1998 Tentative Board Date June 1998 Background 1. Water resources management and its sustainable development and use are critical to China's continued economic and social development. Improvements in water use efficiencies and in water allocation are key to improved management. Specific water allocation for environmental purposes in addition to improved regulation and control of water use for conventional purposes is becoming more and more important in China, especially in water scare regions. 2. In aggregate terms, China has immense water resources with a total annual precipitation of about 6,200 billion m3 and a total annual surface runoff of 2,700 billion m3. However, on a per capita basis the annual runoff represents about 2,300 m3, which is only a quarter of the world's average. The geographic distribution of water is uneven and there are severe periodic water shortages in the north and west of China. Although the per capita annual runoff in the Tarim Basin is twice the national average or about 5,600 m3, because of the severe desert climate, the great majority of this water is lost to non-beneficial evapotranspiration (i.e. not used by crops, for other human uses, or in ecologically important areas). 3. Since the creation of the People's Republic of China, the central and provincial governments have accorded high priority to irrigation. As a result areas under irrigation have more than doubled from 20 to 50 million hectares. The productivity of irrigated land averages twice that of rainfed land, and is especially important for high value crops like fruits and vegetables which need assured supplies of water. Nationally, irrigation accounts for about 70 percent of the total grain output and about 80 percent of fruits and vegetables. In some areas, flood control, drainage and salinity mitigation are also essential for raising agricultural productivity. 4. The gross irrigable area in the country is about 50 million hectares of which, on average 41.5 million hectares are actually irrigated. However, many irrigation systems were built using  relatively low design standards and operation and maintenance (O&M) have been lacking due to lack of resources, and their performance is gradually degrading. Drainage works are essential to allow cultivation of low-lying areas subject to waterlogging and salinization. So far, drainage works have helped control waterlogging on 19 million hectares and have reclaimed 4.8 million hectares of saline land. 5. The Tarim River Basin (200,000 km2) located in Xinjiang Uygur Autonomous Region in northwest China is one of the most water short areas in the country. Except for the high mountain regions that surround it, the basin is a relatively flat desert region with annual precipitation averaging less than 50 mm. Water resources are principally the result of high mountain snowfall, and seasonal snow and glacier melting which feed the Tarim River through its tributaries. The total runoff averages about 28 billion m3 per year, all of which is evapotranspirated either in irrigated agricultural areas, in natural vegetation areas along rivers and in and around human habitation areas, and from water surfaces and high groundwater table areas. The lower reaches of the Tarim River have historically supported a "green corridor" of trees that has slowly been receding as upstream consumptive use has increased and water reaching downstream areas has decreased. 6. Approximately 5 million people live in the Tarim Basin, the majority of which are dependent upon irrigated agriculture for their livelihood and sustenance. There are about 1.4 million irrigated hectares in the basin. The population centers are located along the rivers in the areas where irrigated agriculture has been developed. These areas are referred to as "oases". The areas between the oases are unpopulated. 7. Existing water resources management strategies vary within the Tarim River Basin depending the location, needs and perspectives of the water managers. At the subbasin level, the general approach to water management tends to be to maximize the water use and retention within and around the areas of human habitation in the subbasins and to minimize the downstream flows. The basin-wide objectives of maintaining or increasing the subbasin contributions to the Tarim River mainstem, and to revitalize the "green corridor" at its lower end are basically espoused by the regional water resources and environmental authorities and by the inhabitants of the lower reaches of the Tarim River, who are suffering from water shortages and water quality deterioration. Although there are downstream delivery requirements from each subbasin to the Tarim River mainstem, the fact that annual flows are variable make it difficult to enforce downstream requirements which are based on averages. 8. Existing irrigation and drainage systems have benefited the region greatly and provide for the agricultural production which is the economic base in the area. Most of the systems were built from the 1940s onward, in many cases with inadequate and inefficient designs. In general the irrigation systems and practices are inefficient and characterized by over diversion and over irrigation -2 -  during high flow seasons, excessive surface water storage, leaky delivery systems and inadequate drainage. The overall effect is considerable wastage of water and large tracks of waterlogged and salinated lands. The Tarim Basin Project has resulted in major improvements in these aspects in the Yierqiang and Weigan subbasins. 9. Irrigated agricultural productivity is limited in the region by: (a) under performance of existing irrigation infrastructure; (b) water shortages particularly in the spring; (c) high groundwater tables and soil salinity; and (d) lack of effective drainage. Irrigation infrastructure rehabilitation and expansion, development of conjunctive use of ground and surface water, drainage and salinity control, and improved water resources management can considerably improve water system performance and improve agricultural production, while still making sufficient water available for environmental purposes including the partial restoration and preservation of the "green corridor". 10. Water resources, in the form of surface and ground water, are administered by the state. Their utilization is overseen by the Ministry of Water Resources (MWR) and administered by institutions at lower governmental levels. Progressive decentralization and lack of resources, however, have weakened the ability of the center to control or influence the development and management of water resources and to implement central water policies and statutes. Increasingly water resource decision making is being transferred to the provincial (regional) level. A major problem facing water resource institutions at all administrative levels is the lack of revenue to effectively maintain system delivery performance through adequate operations and maintenance programs. Project Objectives 11. The Government's primary objectives for the water resources sector are to encourage efficient use and comprehensive and integrated management of water resources at the river basin level; promote financial self-sufficiency and cost recovery; reduce water pollution; improve flood warning and protection; and undertake priority water resource development projects. Key steps to be taken for the achievement of these objectives are policy and institutional reforms to improve water resource management. 12. The project's objectives are to: (a) increase incomes of poor minority farmers through irrigated agriculture development and improvement; (b) establish mechanisms for sustainable use, development and management of water resources in the Tarim Basin; and (c) partially restore and preserve the "green corridor" in the lower reaches of the Tarim River 13. The project would be designed to increase agricultural production and rural incomes in the Bayinguolen, Aksu, Kashi, Kizilsu and Hetian Prefectures of the Tarim River basin by effecting productivity increases in existing low-yield farmland, efficient development of underutilized wastelands, and high -3 -  groundwater table and salinity mitigation measures. Project design would seek to ensure that increases in agricultural consumptive use would be offset by decreases in non-beneficial evapotranspiration mostly in high groundwater table and salinization areas. The project would also provided additional measures to restore the natural ecology of the lower Tarim River through the provision of water to partially restore and preserve the "green corridor", as well as flood mitigation and drought proofing measures. The project would incorporate measures to strengthen water resources management within the basin on a comprehensive basis through the Tarim Basin Authority (TBA). Management of irrigation and drainage systems for hydraulic areas would gradually be transferred to farmers organized in Water Users' Associations (WUAs). Main storage, diversion, conveyance and drainage facilities would be managed by Water Supply Corporations (WSCs). The TBA, WSCs and WUAs would be self-financing by means of water charges to farmers. Agricultural support services would be strengthened to further promote agricultural productivity. Project Description 14. The project will operate in five prefectures and 16 counties in southern Xinjiang Uygur Autonomous Region in the Tarim River Basin. 15. The proposed project tentatively would contain the following components: (a) Water conservation including the construction, enlargement, rehabilitation and/or improvement of: (a) 8 regulating reservoirs with capacities ranging from 2 to 200 million m3; (b) 1400 km of trunk and secondary canals and 3300 km of tertiary and quartinary canals; (c) 800 km of trunk and secondary drains and 2300 km of tertiary and quartinary drains; (d) 8 well fields with a total of 700 wells; and (e) a 37.5 m3/s pumping plant; (b) Land reclamation (i.e. expansion of irrigated area) of 110,000 ha in areas within existing oases but presently not being irrigated; (c) Low-yield land improvement of 120,000 ha in areas of high water table and salinization, low fertility, and/or inadequate land leveling; (d) Water conservation, river training and flood control works on the Tarim River mainstem including: (a) a 98 million m3 storage reservoir; (b) 300 km of dikes; (b) 3 main diversion structures and intake gates and 65 control gates for secondary and tertiary structures; (e) Power facilities including (a) 3 hydropower plants with capacities of 2, 6 and 30 Mw; (b) a thermal power generating station of 6 Mw; and (c) 260 km of transmissions lines; (f) Institutional development to bring about a strengthened Tarim Basin Authority and Self-Financing Irrigation and Drainage - 4 -  Districts (SIDDs); (g) Research and development programs for adaptive and applied research designed to improve irrigation, drainage, agricultural and environmental conditions and efficiencies; (h) Strengthening of agricultural support services for on-farm development, both in terms of production support (seed availability, machinery services, avoidance of hail damage, input supplies, technology transfer to farmers, etc.) and the subsequent marketing and processing of produce. 16. Project Costs and financing. The total project cost is estimated to be $300 million, with the water conservation and power component accounting for about 60%-, the land reclamation component for about 169-, the low-yield land improvement component for about 8%-, the river training and flood control, and institutional development component for about 5%-, and the research and development and agricultural support component for about 10%-. The project would be financed by a proposed IBRD loan of $60 million and IDA credit of $90 million, and local counterpart funding equivalent to $150 million (50-). 17. Project Management Structure. Project management would be based on the successful implementation structure developed under earlier Bank projects including the original Tarim Basin Project. Leading Groups at the Regional and Prefecture levels would establish the general policies and procedures and review work programs. The Regional PMO and PMOs in each participating Prefecture would be responsible for overseeing project design, execution and supervision. Within the PMOs the Finance Bureau would be responsible for overall project management and financial management; the Water Resources Bureau would be responsible for project design, implementation, procurement, Tarim River Basin water management, and SIDD development; and the Planning Commission would be responsible for reviewing of the project work plans, project monitoring and supervision, and coordination (mobilization) and allocation of counterpart funding. 18. Institutional Arrangements and SIDD Development. The project will introduce a three-tiered approach to institutional reforms based on the hydraulic unit at the river basin, subbasin and tertiary system level. The first level will include institutional strengthening of TBA to a fully functioning river basin management authority with responsibilities for the planning, development and management of the Tarim Basin's land and water resources. Within the context of this river basin authority, at the subbasin level, the project will introduce the concept of the Self-Financing Irrigation and Drainage Districts (SIDDs) comprising a Water Supply Corporation (WSC) set up on a commercial basis to be financially and managerially autonomous. The WSC would operate and maintain the main storage, water conveyance and drainage systems in the subbasin to provide bulk water supply and drainage services, and flood protection. Commercial water services would be provided to farmer owned and managed Water User Associations (WUAs), urban supply - 5 -  authorities and in some instances, directly to industries. Where hydropower generation facilities are an integral part of the water supply system, WSCs would operate these facilities and sell power in bulk. The third level of institutions would be WUAs set up to manage water service delivery at the lower end of the distribution network. WUAs would purchase water in bulk from and dispose of drainage water to the WSC. WUAs would have the power to charge farmers for water deliveries, maintaining their own bank accounts. These institutional reforms will ensure management of water resources with a comprehensive river basin approach and will considerably enhance stakeholder participation. The arrangements should also bring about sustained water supply system performance and water service delivery, and ensure the financial viability of the institutions through charging users for services at a level that reflects the full cost of service. 19. The Tarim Basin Authority (under the Regional Government) would be responsible for design, implementation and operation of the river training and flood control component, and for setting up and implementing mechanisms for overall water resources management in the Tarim River Basin. Early in project implementation, Water Supply Corporations (WSCs) would be established in each of the 5 subproject areas. The WSCs would be responsible for implementing the water conservation, land reclamation, land improvement and agricultural support and research components of the project. WSCs would be responsible for the operation and maintenance (O&M) of hydraulic infrastructure and for the delivery of water to Water Users Associations (WUAs) and for the repayment of the Bank loan/credit. WUAs would be established in hydraulic units served by branch canals and would be responsible for supporting project implementation within their service areas, for operating and maintaining irrigation and drainage systems, for collecting water charges and for paying the WSCs for bulk water deliveries. The water charges would cover the administrative costs of the WUAs, WSCs and TBA; O&M costs; and the required repayment obligations for the Bank loan/credit. Rationale for Bank Involvement 20. Water resources development in China, despite its considerable achievements, displays some problems that Bank involvement has helped to correct. In general, the lack of comprehensive water resource planning, development and management using the river basin as the management unit has been a problem, particularly the lack of proper authority for river basin level institutions. Also, there are problems of sustainability of water supply and drainage systems through the lack of funds for adequate operations and maintenance and of effective farmer ownership and participation in the management of water supply systems at the lower level. The Bank is well positioned to assist the Regional Government of Xinjiang to effectively address these problems while building on the considerable achievements of the Tarim Basin Project. 21. Country Assistance Strategy. The project would be in line - 6 -  with the Bank's Country Assistance Strategy (CAS) for China which calls for the Bank to assist central and local governments through prospective operations that: (a) promote continued development of sustainable techniques to upgrade marginal land; (b) incorporate major water storage, transfer, irrigation, drainage and flood control schemes into projects; and (c) target absolute poor through a series of investment projects. The objectives of the project are also closely linked with the Bank's Water Policy, 1993, as regard to the comprehensive and integrated development and management of water resources at the river basin level and the direct involvement of stakeholders in management of hydraulic infrastructure including irrigation and drainage systems. In this regard the project will help to promote better policy and institutional development and changes in the water sector. The project would also support the establishment of self-financing irrigation and drainage districts based on farmer participation and of comprehensive river basin management for the Tarim River Basin, specifically incorporating ecological considerations. 22. Poverty Alleviation. The project would contribute considerably to poverty alleviation. The target population would be poor minority (Uygur, Kyrgyz, Tajik and Mongol) farmers and water users in the Tarim Basin. The project meets both criteria for inclusion in the Program for Targeted Interventions: (a) it would support specific mechanisms for targeting the poor; and (b) the project beneficiary group would have a significantly larger proportion of poor than the country's population as a whole. 23. Lessons Learned. The Bank has assisted in financing 13 water projects in China over the last 15 years. These projects serve more than 4 million hectares. Generally, these projects have been implemented efficiently; time and cost overruns have not been excessive despite periods of sharp price escalation; and rates of return have equaled or exceeded appraisal estimates. A notable feature of these projects has been the increasing level of local community involvement in planning, design and implementation. The best performing projects have been where agricultural and water resources bureaus at all administrative levels have had a leading role in project design, planning and implementation. 24. Other key lessons from previous water resources projects are that: (a) detailed organizational and staff arrangements should be formulated and agreed before implementation; (b) counterpart funding should be agreed before implementation; (c) project design should support the "user pays" principle, and user (farmer) participation should be explicitly build into project planning, implementation and operation; (d) drainage and flood protection investments should include cost recovery from beneficiaries; (e) irrigation and water conservancy projects should include provision for unified irrigation system management based on the hydraulic unit; and (f) projects should include institutional development support for the strengthening of regional and local water resources bureaus. 25. Because of the importance of introduction of comprehensive, - 7 -  integrated water management and the scale of institutional changes proposed under this project, the clear lesson learned is that the Water Resources Bureau must take a lead role in the design and implementation of this project. The project lays the foundation for region-wide comprehensive water resources development in the future, based on the river basin management unit. The implementation driving force and ownership not only for this project but for future development of water in the region must rest primarily with the Water Resources Bureau. The Xinjiang Regional Government has recently established the PMO with the Water Resources Bureau having responsibility for project design, implementation, procurement, Tarim River Basin water management, and SIDD development. This is very possitive and will help to ensure a successful project and improved water resources mangement in the region. 26. With regard to raising of counterpart funding, experience from recent projects shows that there are difficulties in raising the needed counterpart funds on time, especially at the county and township level. Care should be taken during preparation to ensure that the project financing plan is accurate and realistic. Clearly, the issue of flow of counterpart funding and indeed the timing of all resource mobilization requirements must be carefully considered as part of project management. The Planning Commission and Finance Bureau have key roles to play in this regard. Project Evaluation 27. Environmental and Social Aspects. The partial restoration of the ecology of the lower Tarim River and the introduction of institutional mechanisms to guarantee the sustainability of this restoration are major goals of the project and will build on the monitoring, assessment, and institutional reform carried out in the original Tarim Basin Project. During high flow months additional water will be delivered to the lower reaches of the river and there be utilized to partially restore and preserve the "green corridor". The project will be designed to ensure that the water savings measures in the subbasins and along the mainstem, as well as the river training and flood control works along the mainstem, will in fact generate and deliver the required water. The institutional measures will need to ensure the sustainability of the water deliveries into the future. The environment in other parts of the project would be improved through salinity and high groundwater table control and mitigation works. Saline water disposal would be through the development of disposal areas in the desert. Careful review and monitoring of these disposal areas would be part of the project to ensure that highly saline groundwater does not adversely affect adjacent irrigation areas. Salt water disposal areas would also include the establishment of salt resistance plants in the disposal areas to help reduce wind erosion and the effects of wind blown salt. 29. Project proposals include assessments of the expected environmental impact of the proposed irrigation and drainage development, particularly with reference to hydrological balances - 8 -  and water quality and the effects of project development on presently observed desertification. These assessments will be carried out as a part of feasibility studies for each of the subprojects. Several other key environmental aspects need to be considered both in relation to the project period and over the longer term, namely: (a) the effects of proposed ground and surface water management on the wetlands fringing the south-west portion of Bosten Lake in Bayinguolen subproject area; (b) changes in vegetation cover in: (i) the lower reaches of the Tarim River; (ii) grazing lands currently served by periodic river flooding; (iii) poplar and willow woodlands; and (iv) in the desert basins proposed for saline water disposal; and (c) soil chemical characteristics in relation to crop production potential (numerous soil testing laboratories already exist in the project area which would probably preclude the need to establish additional facilities). Environmental monitoring capability should be established on a permanent basis in a unit within Tarim Basin Authority. For the longer term, and in addition to its specific monitoring of project environmental impacts, the unit would establish specific environmental criteria against which future developments (e.g. irrigation, agroindustry, industry or urban development) should be assessed and which would be linked to an appropriate regulatory and legal frameworks. 28. The main social issue in project preparation will be to ensure that benefits are directed to the targeted beneficiaries: poor mainly minority households. Of the approximately 5 million inhabitants in the basin, about 3.5 million are Uygur, .5 million are other minorities (Kyrgyz, Tajik, Mongol) and about 1 million are Han. The Bank has previously stated that it will dissociate itself from activities involving forced labor and will not utilize the Xinjiang Production and Construction Corps (XPCC) as an implementing agency without a complete separation of civilian and commercial activities from XPCC's other functions. Consequently, the project preparation team will pay particular attention to ensure that the project does not involve forced labor, does not benefit forced labor camps, and does not use the XPCC as an implementing agency. The other social issue centers on the process for allocation of reclaimed and improved land to farmers in each subarea. The process will need to include designation of the agency responsible (village committee or other authority), the criteria for selection of beneficiary and area of land allocated, and the terms under which the land was contracted to the farmer, i.e. length of contract period and the amount of the annual payment to be charged (in addition to any other costs which might normally be levied such as water charges). 29. Project Benefits. The project would result in an increase in per capita incomes for project water users who would directly benefit from increased agricultural production. Indirect benefits would flow to a larger group of people within the project area because of the overall increase in economic activity. There would also be an increase in the supply of agricultural products within the Tarim Basin which would be available for direct consumption and sale. The project would result in environmental benefits derived -9-  from improved water resources and land management including reductions in areas with high water tables and salinization problems, and partial restoration/preservation of the "green corridor" at the lower reaches of the Tarim River. Other environmental benefits would result from the dissemination of improved irrigation, drainage, agricultural and environmental management technologies to improve water use efficiencies and reduce environmentally damaging water wasting. 30. Works proposed on the river would have additional social benefits as well. Works planned for levee banks, river straightening, and flood control schemes under this component would help mitigate floods along the river and the additional water releases would reduce the impact of droughts for urban and rural dwellers in the lower reaches; 31. Power generation and transmission facilities under the project have an estimated annual production of about 400 million Kwh of mostly renewal hydropower. Investment would produce about 10 MCM/annum of water for the expanding oil industry in the region. 32. Project Sustainability. Project sustainability hinges firstly on the effectiveness of project management arrangements to produce quality, innovative designs for project components and to assure high quality of construction. Secondly, sustainability would be measured by how effective the introduction of institutional arrangements is in assuring the ongoing comprehensive and integrated management of water resources in the basin. The strengthening of the Tarim Basin Authority and the establishment of Water Supply Corporations and Water User Associations would have the purpose of ensuring sustainable planning and management of water resources within the basin. The sustainability of the water conservation measures would be addressed during preparation through adequate consideration of operation and maintenance of project facilities after construction including the self-financing of these activities through SIDD development. The sustainability of the basin-wide water resources management measures would be addressed through strengthening of the Tarim Basin Authority and its self- financing. Self-financing of TBA, WSCs and WUAs would be through water charges collected from water user beneficiaries in the project. 33. Risks. The general risks of the project relate to: (a) the identification of beneficiaries of the project to ensure that by and large benefits from the project flow to the poor, minority groups within the project area; (b) establishment and implementation of effective project management arrangements with clearly defined roles and responsibilities; (c) adequate flow of counterpart funds; and (d) political commitment, particularly at prefecture and county levels to establishment and fostering of the institutional changes at the three levels proposed including the necessary delegation of authority to the Tarim Basin Authority. Technical risk of the project are that: (a) river basin water management measures would not result in sustainable water use and development; (b) water delivery and other measures would not - 10 -  partially restore "green corridor" in the lower reaches of the Tarim River; (c) farmers would not economically benefit from increased agricultural production; (d) increases in agricultural CU would not be more than offset by decreases in non-beneficial evapotranspiration; and (e) river training and water savings measures would not work. All of these risks will be addressed during project preparation with the goal of minimizing them. Contact Point: Public Information Center The World Bank 1818 H Street N.W. Washington, D.C. 20433 Telephone No.: (202) 458-5454 Fax No.: (202) 522-1500 Note: This is information on an evolving project. Certain components may not necessarily be included in the final project. Processed by the Public Information Center week ending April 18, 1997. - 11 -  ANNEX ENVIRONMENTAL ISSUES Major Environmental Issues The proposed project would significantly benefit the Tarim River Basin environment, because waterlogging and salinization areas would be reduced and the "green corridor" would be partially restored and preserved. Environmental issues that will need to be evaluated during project preparation include: (a) effects of project on water quantity and quality downstream of project development areas; (b) the effects of proposed ground and surface water management on the wetlands fringing the south-west portion of Bosten Lake in Bayinguolen Sub-Project Area; (b) changes in vegetation cover in: (i) the lower reaches of the Tarim River; (ii) grazing lands currently served by periodic river flooding; (iii) poplar and willow woodlands (e.g. in Kashi Prefecture); and (iv) in the desert basins proposed as drainage sites; and (c) soil chemical characteristics in relation to crop production potential. Proposed Actions The partial restoration of the ecology of the lower Tarim River and the introduction of institutional mechanisms to guarantee the sustainability of this restoration are major goals of the project and will build on the monitoring, assessment, and institutional reform carried out in the original Tarim Basin Project. During high flow months additional water will be delivered to the lower reaches of the river and there be utilized to partially restore and preserve the "green corridor". The project will be designed to ensure that the water savings measures in the subbasins and along the mainstem, as well as the river training and flood control works along the mainstem, will in fact generate and deliver the required water. The institutional measures will need to ensure the sustainability of the water deliveries into the future. The environment in other parts of the project would be improved through salinity and high groundwater table control and mitigation works. Saline water disposal would be through the development of disposal areas in the desert. Careful review and monitoring of these disposal areas would be part of the project to ensure that highly saline groundwater does not adversely affect adjacent irrigation areas. Salt water disposal areas would also include the establishment of salt resistance plants in the disposal areas to help reduce wind erosion and the effects of wind blown salt. Project proposals include assessments of the expected environmental impact of the proposed irrigation and drainage development, particularly with reference to hydrological balances and water quality and the effects of project development on presently observed desertification. These assessments will be carried out as a part of feasibility studies for each of the subprojects. Several other key environmental aspects need to be considered both in relation to the project period and over the longer term, namely: (a) the effects of proposed ground and surface water management on the wetlands fringing the south-west portion of Bosten Lake in - 12 -  Bayinguolen subproject area; (b) changes in vegetation cover in: (i) the lower reaches of the Tarim River; (ii) grazing lands currently served by periodic river flooding; (iii) poplar and willow woodlands; and (iv) in the desert basins proposed for saline water disposal; and (c) soil chemical characteristics in relation to crop production potential (numerous soil testing laboratories already exist in the project area which would probably preclude the need to establish additional facilities). Environmental monitoring capability should be established on a permanent basis in a unit within Tarim Basin Authority. For the longer term, and in addition to its specific monitoring of project environmental impacts, the unit would establish specific environmental criteria against which future developments (e.g. irrigation, agroindustry, industry or urban development) should be assessed and which would be linked to an appropriate regulatory and legal frameworks. Justification/Rational for Environmental Category The project has been assigned a Category B. The without project condition is characterized by poor water resources management, haphazard irrigation and drainage development, increasing areas of waterlogging and salinization, and the drying up of the "green corridor" along the lower reaches of the Tarim River. The proposed project would significantly benefit the Tarim River Basin environment, because waterlogging and salinization areas would be reduced and the "green corridor" would be partially restored and preserved. The project would support the strengthening of the Tarim Basin Authority for improved basin-wide water management and would support a more rational approach to water management in each of the subproject areas when compared to historical practices. Project works (reservoirs, diversion dams, canals, drains, power plants, pumping plants and well fields) would be either constructed, enlarged or rehabilitated within existing oases that are already majorly affected by human activities. Reporting Schedule Preliminary environmental assessments for each of the subproject areas will be presented to and reviewed by the preparation mission in May/June 1997. The mission will provide recommendations for improvements to the assessments which will be revised and submitted to the Bank by the end of August 1997. - 13 -