India - Upper Krishna Irrigation Project (Phase II)

Document of The World Bank FOR OFFICIAL USE ONLY Report No: 18091 IMPLEMENTATION COMPLETION REPORT INDIA UPPER KRISHNA IRRIGATION PROJECT (PHASE II) CREDIT 2010-IN/ LOAN 3050-IN JUNE 29, 1998 Rural Development Sector Unit South Asia Region 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.  CURRENCY EQUIVALENTS Currency Unit = Rupees (Rs.) At appraisal (1985) US$1 = Rs. 12.0 Completion Year (1997) US$1 = Rs. 35.3 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft.) 1 kilometer (km) = 0.62 miles (mi.) 1 hectare (ha.) = 2.47 acres (ac.) 1 million cubic meter (Mm3) = 804 acre-feet (ac.-ft.) 1 cubic foot per second (cfs. or cusec) = 0.0283 cubic meters per second (m3/s) I kilogram (kg.) = 2.2 lbs. (lb.) I metric ton (t) = 2,205 pounds (lb.) I thousand million cubic feet (TMC) = 28.317 million cubic meters (Mm3) FISCAL YEAR OF BORROWER April 1 - March 31 Vice President Mieko Mishimizu Director Edwin Lim Sector Managers Michael Baxter/Ridwan Ali Task Manager Anis A. Dani  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT ]NDIA UPPER KRISHNA (PHASE II) IRRIGATION PROJECT (CR. 2010-[N/LN. 3050-IN) Table of Contents PREFACE .....................................................I EVALUATION SUMMARY ......................................................II PART I: PROJECT IMPLEMENTATION ASSESSMENT ......................................................1 A. PROJECT OBJECTIVES ......................................1.................................. B. ACHIEVEMENT OF PROJECT OBJECTIVES ..............................................3 C. MAJOR FACTORS AFFECTING THE PROJECT ..............................................5 D. PROJECT SUSTAINABILITY ................................................6 E. BANK PERFORMANCE ................................................7 F. BORROWER PERFORMANCE ............................7 G. ASSESSMENT OF OUTCOME ........................8 H. FUTURE OPERATION ........................8 I. KEY LESSONS LEARNED ..............................9 PART II: STATISTICAL TABLES .........1.................. , 1 Table 1. Summary of Assessments .......................................................... 11 Table 2: Related Bank Loans/Creclits .......................................................... 13 Table 3: Project Timetable .......................................................... 15 Table 4: Loan/Credit Disbursemernts: Cumulative Estimated and Actual .. 15 Table 5: Key Indicators for, Project Implementation ....................................................... 16 Table 6: Key Indicators for Project Operation ........................................ 17 Table 7: Studies Included in Project ............................................... 18 Table 8A: Project Costs .......................................................... 19 Table 8B: Project Financing .......................................................... 20 Table 9: Economic Costs and Benefits .......................................................... 21 Table 10: Status of Legal Covenants .......................................................... 22 Table 11: Compliance with Operational Manual Statements . .......................................... 27 Table 12: Bank Resources: Staff Inputs .......................................................... 27 Table 13: Bank Resources: Missions .......................................................... 28 APPENDICES 1. Mission's Aide M6moire .......................................................... 30 2. Borrower's Evaluation Report .......................................................... 52 3. Irrigation Component ................ 64 4. Agriculture and Agricultural Services ............................... 75 5 Resettlement and Rehabilitation ................................ 101 6. Financial and Economic Analysis ............................... 118 7. Borrower's Comments on Draft Final ICR ............................... 126 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.  ABBREVIAT:IONS AND ACRONYMS AD Agriculture Department APM adjustable proportional module BTDA Bagalkot Town Development Authority CAD command area development CADA Command Area Development Authority CAF canal affected families DCA Developraent Credit Agreement DSRP Dam Safety Review Panel FD field drains FIC field irrigation channels GO Government Order GOI Government of India GOK Government of Karnataka HCG house construction grant IBC Indi Branch Canal IBRD International Bank for Reconstruction and Development ICB international competitive bidding IDA International Development Association ID Irrigation Department IGS income generating scheme IRR internal rate of return LPG land purchase grant MBC Mudbal Branch Canal NABARD National Blank for Agriculture and Rural Development NCB national competitive bidding NLBC Narayanpur Left Branch Canal O&M operation and maintenance OFD on-farm development PA Project Agreement PAP project affected person PAF project affected families PDF project displaced families POM plan of maintenance R&R resettlement and rehabilitation RWS rotational water supply SAR Staff Appraisal Report SBC Shahpur Branch Canal UKP Upper Krishna Project WALMI Water and Land Management Institute WUA water users' association ZP Zilla Paris]had  IMPLEMENTATION COMPLETION REPORT INDIA UPPER KRISHNA (PHASE II) IRRIGATION PROJECT (CR. 2010-IN/LN. 3050-IN) PREFACE This is the Implementation Completion Report (ICR) for the Upper Krishna (Phase II) Irrigation Project (UKP II) in India, for which Credit 2010-IN in the amount of SDR 119 million (US$160 million equivalent) and Loan 3050-IN in the amount of US$165 million were approved on May 4, 1989 and made effective on August 17, 1989. Following two suspensions, the project was closed on June 30, 1997. A total of US$158.2 million from the loan was canceled during the disbursement period and upon closing. Final disbursement took place on July 15, 1997. This ICR was prepared by a Bank mission' which visited India from September 6 to 27, 1997 and reviewed by Michael Baxter, Manager, South Asia Rural Development Unit (SASRD), Keith Oblitas, Principal Operations Officer, SASRD, Ridley Nelson, Principal Agricultural Economist, SASRD, and Richard Cambridge, Principal Operations Officer, SARVP. It is based on a review of the Staff Appraisal Report of the project, legal documents, supervision reports and project files, as well as field investigations and discussions with Bank staff and officials of the Irrigation, Agriculture, Public Works, and Revenue, Urban and Forest Departments of the Government of Karnataka (GOK). The implementing agencies had prepared their own progress reports from which the mission was able to draw considerable information regarding physical and financial progress of the works. The mission visited the project and held discussions with project-level officers of the implementing agencies and participating farmers, collecting information on project performance. The Borrower's Evaluation Report is included as Appendix 2. The ICR was submitted to the Borrower on January 16, 1998. Borrower's comrments were received on May 12, 1998 and taken into account. Some areas of disagreement remain, particularly, in resettlement policies and implementation strategies. For the sake of completeness, the Borrower's comments have been attached in full as Appendix 7. Messrs. A. Dani (Anthropologist, Mission Leader), M. M. Shah (Irrigation Engineer), M. Hasan (R&R Expert), W. 1. Jones (Agricultural Economist, Consultant) and S. Sarkar (Agronomist, Consultant).  IMPLEMENTATION COMPLETION REPORT INDIA UPPER KRISHNA (P[ASE II) IRRIGATION PROJECT (CR. 2010-IN/LN. 3050-IN) Evaluation Summary Introduction 1. The Upper Krishna (Phase II) Irrigation Project (UKP II) is part of a long-term program to irrigate one million hectaires in Karnataka's arid northern districts which started in 1965. From 1978 to 1986, under Credit 788-IN, Narayanpur Dam was completed, Almatti Dam partially constructed, and irrigation provided to 60,000 ha. UKP II was intended to extend irrigation dowvnstream from Narayanpur to another 150,000 ha and continue construction of Almatti Dam for additional storage of irrigation water, in accordance with projected irrigation needs, while completing the resettlement of families displaced by Narayanpur and Almatti reservoirs and the irrigation network. Project Objectives 2. The main objectives of the project were to (a) increase agricultural production and farmers' incomes and employment for 100,000 families by bringing irrigation to 150,000 ha of farmland; (b) provide for the resettlement and rehabilitation (R&R) of displaced and otherwise adversely affected persons (PAPs) to ensure restoration and enhancement of their standard of living; (c) strengthen Kamataka's technical and managerial skills in irrigation project management, design, construction and O&M; and (d) contribute towards an effective anti-malaria campaign. This entailed construction of major civil works, as well as irrigation development downstream to maximize project benefits (ICR, para. 3), synchronically under-taking a major R&R program to mitigate adverse impacts on displaced families (ICR, para 4). 3. Loan Covenants. The most critical covenants included: (a) adequate budgetary provision and timely release of funds; (b) construct Almatti Dam after demand forecast confirms that irrigation facilities to use this water will be ready in next three years; (c) carry out detailed R&R plan in accordance with principles and guidelines agreed with the Association; (d) monitor groundwater and provide necessary drainage; (e) establish and train water-user groups, and ensure farmer participation in construction decisions and FIC operation; (f) recover full O&M costs from users by fourth irrigation year; (g) distribute water by rotational water supply; (h) maintain dam safety review panel; (i) make alternative arrangements for financing on-farm development if institutional credit is not available. Covenants (a) and (h) were complied with. Covenants (b), (c) , (d) and (e) ii  were partially complied with. Covenants (f), (g), and (i) have not been complied with leading to reduced project benefits, and undermining projiect sustainability. 4. Evaluation of Project Objectives. The project's main objective was clear and appropriate. The SAR did not anticipate that the Borrower would delay raising Almatti Dam to its full height, thereby increasing and advancing resettlement requirements. The R&R component was well conceived but was prepared with minimal Government involvement and commitment which led to the abandonment of the design during the early stage of the project. In hindsight, GOK's will and capacity to rehabilitate PDFs was over-estimated (see ICR, paras. 11-13), and GOK's zeal to raise Almatti Dam under- estimated. A number of facets of SAR project design were lost during Negotiations due to lack of continuity in Bank staffing. Implementation Experience and Results 5. The Borrower showed more enthusiasm for major civil works than for other aspects of the project. Only when R&R shortcomings became salient did the Borrower and the Bank concentrate on them. Minor civil works (FICs, FDs, and land shaping), irrigation O&M, agriculture, and malaria control were largely ignored by the project. In contrast, the Borrower pushed ahead with construction of major civil works not originally scheduled until after the completion of the project. 6. GOK followed a linear approach to R&R, first acquiring houses and agricultural land, then establishing the RC' s, then trying to relocate PDFs and, when all this is done, to offer PDFs their entitlements for economic rehabilitation. This fragmented approach slowed down the pace of resettlement and has left most of the income restoration work incomplete. The lack of project support, other than cash grants, for income restoration has contributed to weak performance of this sub-component. Outstripped by the pace of dam construction, contingency plans had to be implemented to undertake physical relocation on emergency bases. Although implemented smoothly, adoption of such emergency measures indicates the failure of planned resettlement measures. 7. Project Impact. Agricultural production in properly-irrigated areas surpassed appraisal expectations. However, incremental production and net value added were below expectations due to (a) lags in bringing new irrigation on-stream, and (b) absence of land shaping and drainage. The project displaced or otherwise adversely affected about 200,000 persons. The majority of these PAPs will not benefit from irrigation downstream. Although physical relocation of displaced persons to new Resettlement Centres (RC's) is progressing well, due to the loss of productive land and the absence of alternate employment promotion schemes, the project has been unable to restore their livelihoods. 8. Project Sustainability. At present, both operation and maintenance are deficient and inadequately funded. Due to faulty canal operation, excessive water is being provided; farmers do not yet understand the cost of waterlogging and salinization and, consequently, have no incentive to save water. This situation is unsustainable. Similarly, iii  without economic links between RC's and the command area, or provision of alternate means of livelihood around the RC's, resettlement benefits are not likely to be sustained. 9. Actual Project Cost and Financing Original project costs, inclusive of physical and price contingencies, were estimaled at US$ 542.2 million, of which 60% was to IBRD/IDA finance, 38% by GOK/GO], and 2% by farmers and the nationalized banking system. Actual project expenditure up to June 30, 1997 was Rs 20,581 million and is expected to reach Rs 24,171 million by 2000 (US $643.6 million and $755.9 million at the weighted average exchange rate over the project period), when designated Phase II investments are complete (see Table 8A). The credit (US$ 160 million equivalent) was fully disbursed. US$ 6.8 million of the loan was disbursed and $158.2 million canceled. Bank Group financing was thus 220/o of the total; GOK/GOI financing, 78%; and farmer/nationalized bank financing negligible. 10. Economic Rate of Return. Given losses from truncated land shaping and drainage, Phase II benefits provide a financial return of 0% and an economic return of 5%, compared to the 11% returns projected at appraisal, to the resources invested during the Phase II period on works specified in the SAR, plus the remaining investments needed in 1997-2000 to complete them. 11. Key Factors Relating to Achievement of Project Objectives. GOK's urgency to impound as much Krishna water as possible led to acceleration of work on Almatti Dam and major canals, to the detriment of minor irrigation works, drainage, agricultural support and R&R. The Credit was suspended twice because R&R lagged behind dam construction leading to premature submergence of villages. R&R implementation improved somewhat as a result of the suspensions but R&R objectives could only be partially achieved. Implementation also suffered due to the absence of active NGOs who could have helped the project in R&R. 12. Bank Performance. Bank supervision first concentrated on major irrigation works, then, when it became salient, on R&R. Deficient R&R implementation led to intensive supervision of R&R and two suspensions. Nevertheless, the conditions for lifting suspension, particularly the second time, were unrelated to results on the ground and were unable to ensure that R&R. objectives are met. Supervision of agriculture, drainage, and operation of the irrigaticin system were met. Due to the concentration of efforts on R&R and the construction program, supervision of several other major covenants such as the timing of Almatti Dam construction and attention to on-farm development, was deficient. Bank appraisal was, in retrospect, naive in discounting the Borrower's determination to impound rnaximum of Krishna waters. 13. Borrower Performance. The Borrower made an immense financial effort to complete the physical works of the project but other components lagged significantly behind. Several parts of the project, including those covenanted, were not implemented. The most serious results of non-compliance and non-implementation is the loss of employment and consequently incomes for many PDFs, although physical relocation of iv  PDFs accelerated significantly in the last 18 months of the project, unfortunately too late to change overall outcomes. A second deficiency is the serious waterlogging and salinization stemming from absence of drainage, lax operation of the canals, and lack of incentive for farmers to save water. 14. Project Outcome. Despite deficiencies noted above, the project has brought major agricultural benefits to an area that is agriculturally sub-marginal. Returns to individual farmers who have received water are several times their pre-irrigation incomes. Oilseed production has grown spectacularly, while grain, fiber and even pulse production have also grown significantly. Labor demand has expaLnded, giving full employment to families in the command, drawing labor into the command, and causing significant increases in real wages. But these benefits are much less than they might have been due principally to faulty canal operation, substantial absence of land-shaping and drainage, poor construction quality and maintenance, delays, and premature resettlement as a result of premature raising of Almatti Dam. Summary of Findings, Future Operations, and Key Lessons Learned 15. The project is rated unsatisfactory; its sustainability, uncertain at best. It is rated only partially successful in achievement of environmental, poverty-reduction, and institutional-development objectives. The Bank's identification and preparation assistance are rated satisfactory but its appraisal and supervision are rated deficient. The Borrower's preparation is rated satisfactory but its implementation, covenant compliance and operation are rated deficient. 16. Future Operations. The Borrower has provided an operational plan for completion of Phase II investments and operation of the project. Branch canals and distributaries for the remaining 13,275 ha, and remaining work on Almatti Dam should be completed within one year, FICs for the remaining 41,212 ha within three years. Physical resettlement is expected to be complete by December 1998. Economic rehabilitation is planned to be completed by March 1999, with the caveat that the project still lacks additional institutional capability to make these rehabilitation schemes viable. Ensuring satisfactory completion of economic rehabilitation should be a top priority for GOK. There are no plans to complete land leveling or the projlect's drainage component, or for initiating rotational water supply, for which the system was designed. 17. Key Lessons Learned. The salient lessons from UKP II are: (a) Economic rehabilitation plans -- opportunities, skills needed, capital investments, input supply, market opportunities -- should be taken into account when establishing Resettlement Centers. Lack of linkage between physical resettlement and economic rehabilitation has reduced the likelihood of restoring livelihoods of PDFs. (b) The time frame required for economic rehabilitation is much greater than that for physical resettlement. While physical resettlement can be completed parallel to v  infrastructure construction, the rehabilitation process will need support and careful monitoring until this is completed. (c) Resettlement cannot be implemented with a blueprint approach. Project design has to allow a flexible, process approach aimed at achieving resettlement objectives rather than delivering predetermined inputs. (d) The costs of not leveling irrigated land as planned and of not building the drains where needed will be very high compared to the modest costs avoided. (e) Leaving the canals open and allowing over-irrigation when there is surplus water during the initial construction period encourages high-water consuming crops and risks waterlogging and salinization. In this instance, a combination of (i) failure to construct drains, (ii) failure to operate the canals as designed, and (iii) farmers' lack of incentive to conserve water have combined with the presence of soluble salts in the bedrock to produce crop-killing salinization in only five years after initiation of irrigation. (f) The absence, then, of sector work and formulation of a coherent irrigation sector strategy left the project conceptualization vulnerable despite intensive preparation and appraisal. vi  IMPLEMENTATION COMPLETION REPORT INDIA UPPER KRISHNA (PHASE II) IRRIGATION PROJECT (Cr. 2011D-IN / Ln. 3050-IN) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. STATEMENlF OF PROJECT OBJECTIVES Introduction 1. The Upper Krishna (Phase II) Irrigation Project (UKP II) is part of a long-term program to irrigate one million hectares in Karnataka's arid northern districts which started in 1965. From 1978 to 1986, when the program was supported by IDA Credit 788-IN, Narayanpur Dam was completed, Almatti Dam was partially constructed, and irrigation was brought to 60,000 ha of a projected total of 100,000. Filling of Narayanpur Reservoir, which has the capacity to irrigate 185,000 ha, displaced about 3,000 families by 1986/7. Many of them did not regain their prior standard of living. Between 1989 and 1997, the program was supported by Loan 3050 and Credit 2010, which were slated to finance US$325 million (60%) of the project that is the subject of this report. Statement of Project Objectives 2. The main objectives of the project were to (a) increase agricultural production and farmers' incomes and employment for 100,000 families by bringing irrigation to 150,000 ha of drought-prone, arid farmland; (b) provide for the resettlement and rehabilitation (R&R) of displaced and otherwise adversely affected families (PDFs) to ensure restoration and enhancement of their standard of living; (c) strengthen Karnataka's technical and managerial skills in irrigation project management, design, construction and O&M; and (d) contribute towards an effective anti-malaria campaign. 3. Of irrigation infrastructure, the project aimed to continue or complete construction of the Shahpur, Mudbal and Indi branch canals and their distributaries serving 148,000 ha; construct field irrigation channels (FICs) and drains on 150,000 ha, improve main drains on 30% of the project area where needed, construct, reconstruct or improve 672 km of village roads, and, provided that progress in completing irrigation infrastructure justified it, to continue construction of Almatti Dam up to elevation 509.016 msl. To make the irrigation system work better and assure the achievement of agricultural goals, the project included Borrower2 undertakings to change the design and operation of the system to the warabandi mode, to institute a system of commissioning newly-irrigated areas and to fully recover the cost of adequate O&M directly from irrigators by the fourth year after commissioning, and to expand its program of catchment 2 Although the primary Borrower is the Government of India (GOI), in this ICR, the word "Borrower" refers to the Government of Karnataka (GOK), the de facto borrower.  improvement in the Krishna catchment. The project also included training for farmers, canal operators and farm extension workers, as well as agricultural research. 4. The R&R component provided entitlements for physical resettlement and economic rehabilitation to 39,195 PDFs: 21,595 of them families that would be affected by raising Almatti dam and its reservoir to elevation 509m, which was expected to occur towards the end of the project. Among the provisions were grants to ensure land-for-land (LPG - land purchase grants) and income-generating schemes (IGS), houselots and prescribed infrastructure in replacement villages, transport to new residence site, food, fodder and fuel during a transition period, and technical assistance to carry out and monitor this process. The value of the LPG and IGS was initially fixed at negotiations but was subsequently revised upwards in 1993 on the recommendation of Bank supervision. R&R entitlements were again revised in May 1995 and a House Construction Grant (HCG) added to facilitate resettlemrent of PDFs, but other entitlements remained the same or were reduced along a graded scale (see Appendix 5, paras. 8 & 17). 5. The capacity-building component included construction and operation of the Dharwad Water and Land Management Institute (WALMI), aerial mapping, and studies of future Krishna development, O&M and staff training to improve it, contract administration, monitoring water- use efficiency and agro-economic impact. 6. The anti-malaria component provided for control of malaria which had been re-introduced around Narayanpur and Almatti reservoirs and in the command area downstream, by and during the construction of the earlier IDA project. 7. Loan Covenants. Covenants were included to promote achievement of project objectives. The most critical covenants required the Borrower to (a) ensure adequate budgetary provision and timely release of funds; (b) construct Almatti Dam after demand forecast establishes irrigation development will enable use of water within three years; (c) implement anti-malaria program; (d) monitor groundwater and provide necessary drainage; (e) establish and train water- user groups, ensure farmer participation in construction decisions and FIC operation; (f) recover full functionality O&M costs from users by fourth irrigation year; (g) distribute water by rotational water supply; (h) maintain dam safety review panel; (i) separate O&M from construction; (j) maintain adequate extension and agricultural research service; (k) protect catchment from erosion; (1) make alternative arrangements for financing on-farm development in the event institutional credit is not available; (m) carry out the detailed resettlement and rehabilitation plan to ensure that displaced persons will improve or at least regain their prior standard of living within a reasonable time; and (n) ensure annual, independent monitoring & evaluation of R&R. 8. Evaluation of Project Objectives. The project's main objective was clear and appropriate. The SAR expectations were unrealistic in expecting that the Borrower would delay or abstain from raising Almatti Dam to its full height unless absolutely necessary, thereby reducing or postponing resettlement requirements. The SAR also erred in calculating the area to be flooded by Almatti Dam at elevation 509 m by failing to take account of the height of water above the spillway during the monsoon floods. The R&R component was well conceived but with minimum Government involvement and commitment which probably contributed to the abandonment of the design in the early stages of the project. The R&R component proved to be overly optimistic about the Borrowers will and capacity to rehabilitate PDFs, about the efficacy of ex-gratia grants to restore PDF incomes, and the PDFs ability to use the grants for income- 2  generating schemes and procurement of replacement land without additional institutional support from the project. A number of facets of SSAR project design were lost during Negotiations due to lack of continuity in Bank staffing. For instance, rehabilitation entitlements were converted into cash grants for land purchase and incoma generation, despite this being one of the weaknesses identified in the SAR for KIP (Cr.788-IN). Furthermnore, the value of these grants was fixed in absolute rupee terrns, making it extremely difficult to negotiate upward revisions subsequently, despite substantial devaluation of the Indian rupee and inflation of land prices. The anti-malaria component proved to be unrealistic. Project activities created conditions for rapid increase in malaria. The project was relatively successful at diagnosing and treating malaria but not at reversing the increased incidence of posil:ive cases. That required cross-support from other parts of the project, such as through filling of borrow pits, which were beyond the jurisdiction of the anti-malaria units. B. ACHIEVEMENT OF PROJECT OBJECTIVES 9. Implementation Experience andl Results. The Borrower showed more enthusiasm for major civil works than for other aspects of the project3. Early Bank supervision confirmed this bias. Throughout, implementation of minor irrigation works (FICs, FDs, and land shaping), R&R and agricultural aspects lagged. Only when R&R shortcomings became salient did the Borrower and the Bank concentrate on them. Minor civil works, irrigation O&M, agriculture, malaria control, catchment improvement and many of the covenants were not adequately addressed by the project. While the Borrower neglected these aspects of the project, it pushed ahead with construction of major civil works not originally scheduled until after the completion of the project. In view of the skewed pattern of results, the ICR focuses more on R&R and on-farm development, the two major components which remain problematic. These shortcomings have had a major impact on project outcomes despite the over-achievement in construction of civil works. Achievements under the irrigation component are described more fully in Appendix-3. 10. UKP II was one of the last projects to go to the Board before the 1991 India Irrigation Sector Review. This review resulted in turning away from enclave construction projects in favor of an approach based on comprehensive policies and institutional reforms, which could have avoided many of the weaknesses now visible in the project. The absence of sector work and formulation of a coherent irrigation sector strategy left the project design vulnerable despite prolonged preparation and appraisal. 11. Project Impact. Agricultural production in properly-irrigated areas surpassed appraisal expectations. However, incremental production and net value added were below expectations due to (a) lags in bringing new irrigation on-stream, and (b) the truncated nature of most of the irrigation established due to absence of land shaping and drainage4. Construction of Phase II and 3 The Borrower suggests that civil works construction and resettlement suffered because of suspensions imposed by the World Bank. "The construction of Dam and allied works is also slightly behind; R&R works suffered because of suspensions imposed by the World Bank." In actual act, the suspensions were imposed primarily on disbursements for civil works to enable R&R activities to catch up with the pace of dam construction (see Appendix 5, page 4). 4 In the Borrower's comments of May 1998, CADA explains its inability to complete OFD works due to the priority given to Almatti Datr and canal works in resource allocation from the credit/loan, while OFD works which depended on local financial institutions were under-financed. Bank assistance for OFD works is also desirable. "The inference drawn by the World Bank may have to be 3  post-Phase II major civil works will lead to future agricultural benefits, but only if Karnataka is allowed to continue, with construction, and complete the facililties started. 12. The over-arching objective of UKP's resettlement component is to "provide for the resettlement and rehabilitation of displaced persons to ensure the restoration or enhancement of their standard of living up to or above levels enjoyed by themn prior to the commencement of the implementation of the Project or Phase I, as the case may be." The R&R objective of the project has not changed although some of the interventions and rehabilitation entitlements were revised during the course of the project. Although disbursements were suspended twice for inadequate R&R, the impact of R&R remains unsatisfactory. R&R imrplementation improved after each suspension but not enough to achieve a balanced outcome. Despite intensive supervision of R&R, the project suffered from lack of continuity of Bank staff. During the critical period leading up the second suspension, no R&R staff was involved. The conditions for lifting suspension, at this late stage (the sixth year of the project), were not commensurate with actions needed to successfully meet R&R objectives (see Appendix 5, para 11). 13. The project has displaced or otherwise adversely affected about 200,000 persons (39,195 PDFs). The majority of these affected persons will not benefit from irrigation downstream. The project's plans to help them with purchase of replacement land or alternate income generation schemes has not worked well and is behind schedule. Recent legislation5 enacted to enable provision of land-for-land was not applied to the project (see Appendix 5, para 24), and the only real opportunity to provide replacement land to PDFs thereby lost. In spite of an elaborate design at appraisal, the project delegated the task of identifying and implementing IGS almost entirely to PDFs, with virtually no support for skills training, enterprise development, or market linkages. As a result, the project has been unable to restore their livelihoods. 14. One positive feature of the May 1995 GO is the introduction of an ex-gratia house construction grant (HCG) of Rs 22,000 to each PDF (including major sons) except those owning more than 10 ha of land. This has proved to be the single biggest incentive encouraging thousands of PDFs to undertake construction of replacement houses in the relocation sites. Even those PDFs who had diverted their compensation to non-productive purposes have now been able to initiate house construction. The pace of house construction has accelerated considerably in RCs and the quality of new housing is generally better than that in the submerging villages (see Annex 5, para. 26). 15. Actual Project Cost and Financing The original project costs, inclusive of physical and price contingencies, were estimated at US$ 542.2 million, of which 60% was to be financed by a Bank loan and an IDA credit, 38% by GOK and GOI, and 2% by farmers and the nationalized banking system. Actual project expenditure up to June 30, 1997 was Rs 20,581 million. It is estimated that Rs 3,589 million will be spent by 2000 to complete the designated investments. The total is Rs 24,171 million ( US$ 671.4 million at current exchange rates and $755.9 million at reviewed in the light of Government of Karnataka's policy to accord highest priority for utilising its share of Krishna Water before 2000 A.D. and thus protecting its interest." Presumably, this refers to the emphasis on major civil works. The Borrower concludes that Bank assistance for OFD works is also desirable. I The Kamataka Resettlement of Project Displaced Persons Act, 1987, granted Presidential approval on August 8, 1994. 4  the weiglhted average exchange rate over the project period) (see Table 8A). The credit of US$ 160 million equivalent was fully disbursed. Of the loan, US$ 6.8 million was disbursed and $158.2 million was canceled.6 Bank Group financing was thus 22% of the total; GOK/GOI financing, 78%; and farmer/nationalized bank financing was negligible. 16. Economic Rate of Return. Given losses from truncated land shaping and drainage, Phase II benefits provide a financial return of 0% and an economic return of 5% to the resources invested during the Phase II period on works specified in the SAR, plus the remaining investments needed in 1997-2000 to complete them. This can be compared to the 11% economic return to Phase II alone, projected at appraisal. C. MAJOR FACTORS AFFECTING THE PROJECT 17. Factors not generally subject ito government control. Proper implementation of resettlement program suffered due to the absence of active NGOs who could have helped PDFs in resettlement. NGOs could have played an advocacy role to ensure that PDFs receive their full entitlements, and could have assisted in implementation of income generating activities to facilitate economic rehabilitation. Local 'NGOs were not developed enough to play these roles effectively and external NGOs stayed away apparently because they did not find the environment conducive to collaboration. 18. Factors subject to government control. The Borrower's focus on impounding as much Krishna water as possible in order to improve Karnataka's chances for a. favorable re-allocation of the river's water in 2000 resulted in the acceleration of work on Almatti Dam and major canals, and on the relative neglect of minor irrigation works, drainage, agricultural support, and, until it became salient in disputes with the Bank, of R&R. When CADA became moribund, in 1992, GOK made no effort to revive it, or to re-assign its functions to other, more effective, agencies. When institutional credit from existing financial institutions was no longer provided for on-farm development, GOK was to make alternative credit arrangements (DCA, Schedule 1.13) but neglected to do so. 19. In other projects, independent monitoring has played a valuable role in ensuring successful R&R. Although planned and covenanted as an annual requirement, independent monitoring was not allowed to function at UKP. Twice the project appointed agencies external to the Government to monitor R&R programs. Both times their contracts were discontinued by GOK because their reports were not acceptable to the project. As a result, the Borrower lacked the ability to identify shortcomings and retool the program to ensure achievement of R&R objectives. 6 In May 1998, the Irrigation Department, GOK has reported that aggregate Phase-II expenditure up to 30.6.97 is Rs. 10,885.873 million which is expected to reach 17,262.805 million on completion of Phase II, and that the loan component utilized is US$ 16.52. These claims are not consistent with detailed, audited data obtained from the Principal Chief Accounts Officer, UKP which have been used for the financial analysis. Without backup data, the ICR is unable to incorporate these aggregate figures of project costs in the main text. Actual loan utilization, as per Bank records, is US$ 6,817,534.42. The Borrower has been notified of the cancellation of US$ 158,182,465.58, and the Amortization Schedule revised according ly. 5  20. Factors subject to implementing agency control. Despite covenants linking Almatti Dam construction to the demand forecast for irrigation water (PA, Schedule 1: 1), and to completion of R&R, the Irrigation Department (ID) did not maintain the linkage between schedules of dam construction, R&R implementation, and irrigation development in the command area. Largely because of poor R&R implementation, Bank Group lending was suspended twice. The project could have empowered the Water Users Associations (WUAs) to raise resources and perform O&M functions. The project could also have paid more attention to water management through RWSS, cost recovery of water charges, and effective drainage to prevent waterlogging and salinity. 21. GOK followed a linear approach to R&R, first acquiring houses and agricultural land, then establishing sites for the RC's, then trying to get PDFs to relocate, then assisting them with house construction and, when all this is done, to offer PDFs their entitlements for economic rehabilitation7. This fragmented approach has not worked well. It slowed down the pace of resettlement since PDFs did not have an economic incentive lto move, and it has resulted in large scale unemployment in the RC's. The employment generation expected from command area development has still not materialized and, in any event, is too far removed from Almatti to be of benefit to the PDFs residing in Almatti RC's. 22. Physical resettlement of PDFs was outstripped by the pace of dam construction,. To cope with the emergency situation created by rising waters, GOK prepared and implemented contingency plans to relocate and provide shelter and emergency food and services to all families threatened by flooding during the monsoons. Although contingency plans have been implemented smoothly in 1996 and 1997, adoption of such emergency measures to move thousands of people, forced out of the affected areas by rising waters, is an indication of the failure of proper resettlement measures. Many PDFs, particularly the poorest families, once housed in temporary metal sheds, continue to reside there for years as they lack resources to supplement compensation received to build permanent houses. The success of HCG (see para. 13) in stimulating house construction indicates that this situation was avoidable. D. PROJECT SUSTAINABILITY 23. At present, both operation and maintenance are defic ient and inadequately funded. Due to faulty canal operation, excessive water is being provided; farmers, mostly lacking land shaping and many lacking drainage, also pay negligible water charges. Most do not yet understand the cost of waterlogging and salinization and, consequently, have no incentive to save water. This situation is unsustainable. Similarly, without provision of alternate means of livelihood around the RC's, resettlement benefits are not likely to be sustained. Displacement at Almatti is relatively recent, and adverse economic impact not yet clearly visible. When the real impact of resettlement is felt, with the filling of Almatti reservoir over the next few years, the looming crisis may provoke action from farmers and other stakeholders. Consequently, project sustainability is rated uncertain. E. BANK PERFORMANCE See Appendix 5, Section E for details. 6  24. Bank supervision first concentrated on major irrigation works, then, when it became salient, on R&R. Since 1991, unsatisfactory R&R dominated the project, resulting in two suspensions which focused GOK's attenlion on improving R&R implementation. However, the conditions for lifting suspension, particularly the second time around, were insufficient to ensure achievement of R&R objectives (para 12). Supervision of several major covenants (such as the timing of Almatti Dam construction and irrigation development beyond the main canals, ) was deficient, the latter possibly contributing to neglect of agriculture, drainage, and operation of the irrigation system. Bank appraisal was unable to anticipate GOK's determination to impound maximum of Krishna waters for political reasons, despite technical, financial and social grounds to delay the investment in Almatti Dam. Also, the area flooded by Almatti Dam at spillway elevation 509M was seriously underestimated (Appendix 5, paras 10 & 14). In hindsight, lifting of suspension by the Bank, in October 1996 on the basis of assurances provided by GOK, was a mistake. Without further ado, the project proceeded to raise Almatti spillway to its final crest level of 509.016 msl, exacerbating the imbalance in R&R between physical resettlement and economic rehabilitation, described in Appendix 5. F. BORROWER PERFORMANCE 25. Especially in the wake of the reduction of Bank Group financing, the Borrower made an immense financial effort to complete the project. As noted in para. 6 above, the Borrower did not comply with most covenants. Several parts of the project -- land levelling, construction of field drains, agricultural extension, devolution of O&M to functioning Water Users Associations, cost recovery -- were not implemented and are not likely to be soon. In contrast, construction of Almatti dam and the main canals has proceeded in advance of the rest of the irrigation system well before the water can be efficiently utilized, despite a covenant linking dam construction to irrigation water demand (PA, Schedule 1: 1). The most serious result of non-compliance and non- implementation is the predicament of large numbers of PDFs who have not regained their prior standard of living and who, in many cases, have been displaced / affected prematurely to maximize water impoundment. An assurance, obtained at the lifting of the second suspension (in October 1996), that the spillway of Almatti dam would not be raised from its then level of 506 m. to its final height of 509 m., until all PDFs had received their full resettlement entitlements, was disregarded by GOK8. The second result of non-compliance is serious waterlogging and salinization stemming from absence of drainage, lax operation of the canals, and lack of incentive for farmers to save water. G. ASSESSMENT OF OUTCOME 26. Despite lags, non-implementation of certain components, defective operation of the canal system and inadequate rehabilitation programs, the project has brought major agricultural benefits to an area that is agriculturally slib-marginal. Farmers with adequate land-shaping and drainage are multiplying their net returns by nine times, even those who suffer from absence of land shaping and drainage are getting five times the returns they got without irrigation. Oilseed s In its comments on the draft ICR, the Borrower makes the following statement to explain GOK's decision. "The award made by the KWDT [Krishna Water Dispute Tribunal] allocating water to Karnataka is due to come up for review after May 2000 AD. The state therefore had to protect its future interests by utilising the allocated water. Therefore, the GOK took all measures necessary to complete the physical works of the project." 7  production has grown spectacularly, while grain, fiber and even pulse production have also grown significantly. Labor demand has expanded, giving full employment to families in the command, drawing labor into the command, and causing significant increases in real wages. But these benefits are much less than they might have been due principally to faulty canal operation, substantial absence of land-shaping and drainage, poor construction quality and maintenance, delays, and premature resettlement as a result of premature raising of Almatti Dam. As a consequence, the economic return to resources invested in Phase II is estimated at 5%; the financial return, at 0%. 27. Summary of Findings The project is rated unsatisfactory; its sustainability, uncertain at best. It is rated only partially successful in achievement of environmental, poverty-reduction, and institutional-development objectives. The Bank's identification and preparation assistance are rated satisfactory but its appraisal and supervision are rated deficient. The Borrower's preparation is rated satisfactory but its implementation, covenant compliance and operation are rated deficient. H. FUTURE OPERATION 28. The Borrower has provided an operational plan for completion of Phase II investments and operation of the project. Branch canals and distributaries for the remaining 13,275 ha, and remaining work on Almatti Dam should be completed within one year, FICs for the remaining 41,212 ha within three years. Payment for land and structures acquired, construction of resettlement centers and distribution of house plots should be completed by December 1997. In May 1998, the Borrower reported that payments for land and stuctures have been completed. Houses and house-construction grants should be completed by end 1998; land-purchase and income-generating-scheme grants are scheduled for disbursement by March 1999, with the caveat that the project still lacks additional institutional capability to make these rehabilitation schemes viable. There are no plans to complete land leveling or the project's drainage component, though drainage needs have been studied. 29. Irrigation works will by operated by the O&M Zone of the ID/KBJNL under the Chief Engineer (O&M). There are currently no plans for initiating rotational water supply, for which the system was designed. GOK is planning to give KBJNL the responsibility of recovering existing water charges but has no current plans for enhancing water rates to ensure full recovery of O&M costs. GOK plans to turn over O&M of minor irrigation works to Water Users' Cooperative Societies which will be organized on selected hydraulic units. Agricultural support, R&R and the anti-malaria unit will continue to be the responsibility of the departments that run them now. I. KEY LESSONS LEARNED 30. The Upper Krishna Project has generated a number of lessons, some of which have emerged more clearly from this project than from its predecessors. (a) Narayanpur and Almatti are mediocre dam sites, requiring long dams that create shallow reservoirs which displace large numbers of people and flood a lot of farm land for the water they store. At such sites, under the best of circumstances, returns will be modest compared to the social cost involved. 8  (b) The economic and financial cost of building Almatti Dam long before it was needed for irrigation, including the R&R cost, has been high. However, it was a cost which GOK was prepared to pay for political reasons. (c) Economic rehabilitation plans -- opportunities, skills needed, capital investments, input supply, market opportunities -- should be taken into account when establishing the RC's. Lack of linkage between physical resettlement and economic rehabilitation has reduced the likelihood of restoring livelihoods of PDFs. (d) The time frame required for economic rehabilitation is much greater than that for physical resettlement. While physical resettlement can be completed parallel to infrastructure construction, the rehabilitation process will need institutional support for land purchase or employment promotion, and careful monitoring for a number of years. (e) Resettlement cannot be implemented with a blueprint approach. Project design has to allow a flexible, process approach aiimed at achieving resettlement objectives rather than delivering predetermined inputs. Thus, rehabilitation entitlements should not be fixed as absolute currency values, without an explicit proviso for market price adjustments. (f) Independent monitoring of R.&R, designed but not carried out, could have provided realistic feedback directly to the Borrower and helped overcome many of the shortcomings identified subsequently. After the withdrawal of the first R&R monitoring consultants, the Bank should have ensured appointment of a replacement to provide regular feedback on R&R performance. (g) The costs of not leveling ilTigated land as planned and of not building the drains where needed will be very high compared to the modest costs avoided. Because land shaping and field drains are critical for good irrigation in undulating terrain like that in the project area, Government must stand by its commitment to provide finance for these activities in the event that banks refuse to do so. (h) It is extremely unwise, during the period when an irrigation command is partially constructed and there is surplus water, to leave the canals open and to over-irrigate. Besides encouraging high-water consuming crops, the practice risks waterlogging and salinization. In this instance, a combination of (a) failure to construct drains, (b) failure to operate the canals as designed, and (c) farmers' lack of incentive to conserve water have combined with the presence of soluble salts in the bedrock to produce crop-killing salinization in only five years after initiation of irrigation. (i) Poor quality canal construction and operation to over-irrigate are particularly damaging to irrigation systems in black-cotton soil (vertisol) areas. (j) Without client ownership, covenants have not been effective. Assurances of future compliance are a poor indicator of client ownership. Projects should rely on actual performance rather than just assurances. (k) The relative neglect of agriculture, drainage, O&M and cost recovery during supervision has lowered project benefits despite considerable sunk costs on civil works and R&R. 9  (I) The absence, then, of sector work and formulation of a coherent irrigation sector strategy left the project conceptualization vulnerable despite intensive preparation and appraisal. Since the 1991 India Irrigation Sector Review the Bank has moved away from enclave construction projects in favor of an approach based on comprehensive policies and institutional reforms, which could have avoided many of the weaknesses now visible in the project. 10  PART II. STATISTICAL TABLES Table 1: Summary of Assessments A. Achievement of objectives Substantial Partial Negligible Not (M1) ('1) ('I) Applicable Macro policies Li L i E Sector policies Li LI Ei Li Financial objectives Ei I EI Li Institutional development Li L Li L Physical objectives Li Li El Poverty reduction Li Li El Li Gender issues li Li Li El Other social objectives Li Li Li Fi Environmental objectives Li IT El Li Public sector management L Fi L Li Private sector development Li Li Li Li Other (specify) Li Li Li Li B. Project sustainability Likely Unlikely Uncertain (i) (i) (i) 11  Highly C. Bank performance satisfactory Satisfactory Deficient (() (i1) Identification FT] Preparation assistance [] [ F Appraisal Y ] E Supervision g 1 E Highly D. Borrower performance satisfactory Satisfactory Deficient (i) (i) (i) Preparation Implementation E D El] Covenant compliance C F E Operation (if applicable) F F Highly Highly E. Assessment of outcome satisfactory Satisfactory Unsatisfactory unsatisfactory 12  Table 2: Reilated Bank Loans/Credits Loan/credit title Purpose Year of Approval Status Preceding operations 1. Mysore Agricultural To construct about 16,000 wells to 1972 Completed Development Project (Cr. provide irrigation in tho erstwhile 278-IN) Mysore State. 2. Kamataka Agricultural To develop markets in Karnataka 1973 Completed Markets Project (Cr. 378-IN) 3. Kamataka Irrigation To complete Phase I of Stage I of the 1978 Completed Project (Cr. 788-IN) Upper Krishna Irrigaticn Project, and to carry out minor distribution ICR issued 12/22/88 development in Malaprabha and Ghataprabha projects. 4. National Agricultural To strengthen location-specific research 1978 Completed Research Project (Cr. 855- in the agro-climatic zones of India, IN) including Karnataka l 5. Composite Agricultural To improve agricultural extension 1978 Completed Extension Project (Cr. 862- facilities and services in Gujarat, IN) Haryana and Karnataka 6. Cashewnut Project (Cr. To increase incomes of smallholders 1980 Completed 1012) and corporations through improved I production and processing. ICR issued 10/3/90 7. Karnataka Sericulture To assist in the development of 1980 Completed Project (Cr. 1034-IN) mulberry production and sericulture ICR issued 3/22/93 8. Karnataka Social Forestry To assist with the production of 1984 Completed Project (Cr. 1432-IN) saplings, Forest Department Plantings, training and research. Project is also co- ICR issued 3/11/91 financed by ODA. 9. National Agricultural To strengthen the facilities and services 1985 Completed Extension Project II (Cr. of agricultural extension in Gujarat, 1569-IN) Haryana, and Jammu/Kashmir 10. National Agricultural To strengthen location specific research 1985 Completed Research Project 11 (Cr. in the agro-climatic zones of India, ICR issued 5/27/97 1631) including Karnataka. Il .National Water Increase agricultural outrut by 1987 Completed Management Project (Cr. providing farmers with more reliable 1770-IN) and predictable irrigation water. ICR issued 01/30/97 1.3  Table 2 (cont'd) Loan/credit title Purpose Year of Approval Status Following operations 1. National Sericulture Strengthen and expand the sericulture 1989 Completed Project (Ln. 3065/Cr.2022- subsector through increases in IN) production, improvements in ICR issued 09/97 productivity, product quality, human resource base, support services and increased private sector involvement. 2. Rubber Project (Cr. 2409- To expand and strengthen the rubber 1993 Ongoing IN) subsector to increase production by smallholders, provide assistance to rubber processors and generate on-/off- farm rural employment. 3. Forestry Research, To strengthen the capacity of national 1994 Ongoing Education and Extension and state institutions to: plan and Project (Cr. 2572-IN) undertake priority research programs; improve the system of forestry education in research and academic institutions; improve policy analysis and project preparation capabilities within the Ministry of Environment and Forests; and develop a supporting forestry statistical service. 4. Hydrology Project (Cr. To improve India's institutional and 1996 Ongoing 27740-IN) technical capability to measure, collate, analyze and disseminate surface and ground water resources data 5. Ecodevelopment Project To conserve biodiversity through 1997 Ongoing (Cr. 29160-IN) ecodevelopment strategy in and around seven protected areas. 14  Table 3: Project Timetable Steps in project process Date planned Date actual / latest estimate Identification (Executive February 18, 1986 Project Summary) Preparation 1987 Appraisal February 1988 Negotiations November 23, 1988 Board presentation May 4, 1989 Signing June 16, 1989 Effectiveness August 17, 1989 Mid-term review 1992 June 1992 Project completion December 1'996 (original) June 30, 1997 i________________________ June 30, 1997 (revised) Loan closing December 31, 1996 July 15, 1997 (original) Extended once up to June 30, 1997 Table 4: Loan/Credit Disbursennents: Cumulative Estimated and Actual (US$ millions) FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 Appraisal Estimate 18.0 50.0 100.0 163.0 228.0 286.0 325.0 325.0 325.0 Actual 21.1 32.1 43.3 70.8 102.1 149.3 150.8 174.3 174.3 Actual as % of Estimate 117 64 43 43 45 52 46 54 54 Date of Final Disbursement July 15, 1997 15  Table 5: Key Indicators for Project Implementation Key Indicators Unit Estimate Achievement % Achievement as of June 30I, 1997 1. Almatti Dam (a) Concrete T. 275.74 224.36 81% (b) Embedded parts for Cum. 26 3 12% radial gates No. (c) River sluice gates 6 - 0% No. 2.Shahpur Branch Canal (a) Distr. km 597 597 100% (b) FICs km 2582 2582 100% 3. Mudbal Branch Canal (a) Br. Canal km 50.8 46.16 91% (b) Dist. km 179 156 87% (c) FICs km 1539 1412 92% 4. Indi Branch Canal (a) Br. Canal (b) Dist. km 64 48.2+3(p) 78% (c) FICs km 621 450+25(p) 75% km 2318 1962+30(p) 85% 5. Ayacut Roads km 627 617 98 % + 290 (CADA) + 18 (CADA) (69% including ___________________ ______ ________ roads with CADA) 6. Buildings (Res. & Non-Residential) (a) WALMI (b) Dam No. 5 (NR)+189(R) All buildings 100% (c) Canal No. 1 (NR)+21 (R) completed No. 59(NR)+165(R) 7. OFD Works (a) Total Land Shaping ha 116,000 11,016 9.5% (land shaping in Phase II area) (ha) (114,000) (8,800) (8%) (b) Drainage % of project area 30% 14% 45% 8. Studies Rs. M 48.5 36.0 74% 9. Mapping Rs. M 41.4 =39.0 94% 16  Table 5 (cont'd) 10. Anti-malaria Rs. M 64.90 11.09 | 17% l1.R&R Rs. M 1,598.81 2,735.191 171% 11. Resettlement & Rehabilitation (a) Area submerged by Almatti Dam with 509m. spillway crest ha 12,900 25,744 200% (b) Families displaced under Phase II, No. 40,000 44,1482 110% (c) Income generating schemes No. 11,060 1,598 14% (d) Land allocated / land purchase grants No. 5,864 638 11% Table 6: Key Indicators for Project Operation L Key operating indicators in SAR Estimated Actual 1. Additional irrigated area 148,000 ha 93,513 ha 2. Cropping intensity 145% 160% (of which irrigated) (115%) (154%) 3. No. of affected families 40,000 57,214 II. Modified indicatorsforfuture operation Estimated at Achieved by closing date closing date 1. Land acquisition for Almatti reservoir up to 31,860 ha 18,060 ha 515 m. contour 2. Permanent replacement houses for nrral PDFs 48,338 12,084 of Almatti reservoir by 1999 3. Area provided with field drains 44,000 ha 20,297 ha 4. Participatory irrigation management system 5 distributaries not yet initiated (PIM) to be introduced in pilot distributaries 9. Data available as of 1994/5 ff. Earlier project years not reported. 10. The total number of families who will be displaced under Phase II is 56,181 families, i.e. 140% of the SAR estimate. 17  Table 7: Studies Included in Project Studies/Surveys Purpose as defined Status Impact of study at appraisal / redefined Feasibility study for To assist project Completed Phase III development future development of management in planning being planned on basis UKP future development of of this report UKP and to determine viable options of development Management To assist establishment Completed MIS Cell established but Information System in of Project Management still not effectively UKP Information System functional Cell in the office of EIC Telecommunication in To establish Study abandoned after Nil since studies not UKP telecommunication Inception Report stage concluded system for UKP Photo mapping of UKP To complete the balance Completed Survey maps used for command area work of Phase I study planning and design of canal system Master Drainage Plan of To prepare drainage Completed Report recently UKP plan for UKP command finalised. Action plan is area yet to be drawn Integrated Reservoir To prepare integrated Completed Being used for Operation Study operation of Almatti and integrated operation Narayanpur reservoirs plan of the two reservoirs Socio-economic survey To conduct a census and Completed Study data formed the of 8 villages in socioeconomic survey basis for determination submergence area of of affected persons of entitlements of Almatti reservoir project affected persons -Do- of 12 villages -Do Completed -Do -Do- of 21 villages -Do- Completed -Do- -Do- of 54 villages -Do- Completed -Do- Survey work of 41 -Do- Completed -Do- villages in Narayanpur submergence area Survey work of 205 -Do- Completed -Do- villages in command area Survey work of -Do- Completed -Do- Bagalkot town Monitoring and To produce independent First M&E consultancy Purpose not achieved Evaluation of annual monitoring discontinued in 1991; Resettlement & report of R&R second consultancy Rehabilitation component awarded in 1996; Inception Report and one M&E relport produced; consultancy discontinued in April '97 18  Table SA: Project Costs Appraisal Estimate Actual Estimate Item Rs US$ Rs US$ million million million million Irrigation I Almatti Da,m 642.2 44.0 1198.2 37.4 Canal & Drainage Works 4531.2 3104 103618 324.0 .......................... G ................................................... .................................. .................................. ..................................................................... Roads , 659.5 45.2 888.5 27.8 ...........I... .................................................................................I.......................................................................................... ............................. Buildings 589.2 18.4 ......................... .................................................................I..................... ..................................................................... ........................... Machinery & Equipment . 223.3 7.0 ............................. ................................ ................... .................. ............... ............... ..................4;j; Resettlementand 1472.3 31008 5312.5 166.1 Rehabilitation ............................................................... .............................................................................................. ................................................................ Other & Support ..................................................... ............................................................................... ....... . .. ......................... ..1........................... WALMI . 175.9 12.0'. 36.5', 1.1 ........... ............................... ................... ........... .......... ..................... .................................. , Mapping . 65.3 4.5 39.0 1.2 Studies 202 1.4 5.3 02 Anti-Malaria . 64.9 4 4 11.0 0.3 ........................................ ........................................................................................................................................... .................. Oter CADA(taining, 152.2 4.8 OFD) Establishment 285 0 9 ;5 5107.9 159;. ............................................... ................I......................... ................ .................. .......................... ........ .................................. ........................ . O&M 245.2 7.7 TOTAL 7919.5 542.2 24170.6 755.9 Notes: Appraisal and Actual categories are not all comparable. WALMI building are under WALMI for Appraisal but under Buldings for Actual. "Establishment" at Appraisal included establishment for O&M only; other establishment was clubbed under the appropriate activity. In Appraisal estimates, dam and canal works included associated buildings and machinery & equipment. Actual estimates for dam, canals, and resettlement include some studies. Anti-malaria expenditures are for 1994/5 ff only; earlier expenditures, which are included under the Health Department budget, could not be disaggregated. Rupee figures have been converted into US$ at the rate of 14.6 Rs:l US$, the assumed rate at Appraisal, and Rs 32: 1 US$ for Actual. This figure is the average of average yearly exchange rates, weighted by amount of expenditures in each year. It gives a cost over-run of 39%. If all actual Rupee estimates are converted to US$ at 36:1, the rate at the time of Loan Closing, then the US$ project cost is US$671.4 million and the cost-over-run is 24%. Expenditures are for period up to 30 June 1997 (Closing of Loan) except for Rs 210.6 million in 1997/8 to complete Almatti Dam, Rs 441.9 million in 1997/8, 1998/9 and 1999/2000 to complete Phase 11 canal works as definecl by the SAR, and Rs 2937 million in 1997/8 and 1998/9 to complete Phase II R&R. 19  Table 9: Financial & Economic Benefits and Costs Appraisal Estimate ICR Estimate Future without Future with Future without Future with irrigation irrigation irrigation irrigation Financial Analysis: Farm Income After Expensing All Labor < '97 Rs> With land levelled and drains installed: 2 ha farm 3945 22932 (+18987) 2546 24410 (+21864) 6 ha farn 11836 68795 (+56959) 7638 73230 (+65592) Without levelled land or drains: 2 ha farmn 3945 not anticipated 2546 14646 (+12100) s 6 ha farrn 11836 not anticipated 7638 43938 (+36300) Financial IRR: none Appraisal Estimate ICR Estimate Economic Analysis: Economic IRR: Phase II only 11% 5% Phase II & III 13% not estimated Assumptions: Project life 39 years 37 years Specific conversion factors .6- .8 .6- .9 Standard conversion factor .8 .9 Unskilled labor 19.7 Rs/day without project 32 Rs/day with project 37 Rs/day Note: 1989 Rs converted to 1997 Rs ( 1:2.47.  Table 10: Status of Legal Covenants Agreement Section Covenant Present Original Revised Description of covenant Comments type status fulfillment fulfillment date date 2.01(a) 05,10 CP Jan. 30, 1996 Mar. 31, GOK shall carry out project with diligence and Resettlement still lags behind construction 1999 efficiency in conformity with adm., financial, activities. Rehabilitation of livelihoods remains engineering, irrigation and resettlement and unsatisfactory. Construction of canals has rehabilitation practices and shall provide funds accelerated and is expected to achieve target by facilities, services, land and other resources for the Dec. 1997. project. 2.01 (b) 05, 10 CP GOK shall carry out Part A of the project in Implementation of R&R has improved but still accordance with the Implementation Program in lags behind construction of Almatti dam. Schedule I to this Agreement and Part B of the project in accordance with Schedule 2 to this Agreement. 2.02 05, C Procurement of goods, works and consultants' In compliance. services required for the project to be financed out of proceeds of the Credit shall be governed by Schedule 3 to this Agreement. 2.04 05, CD GOK shall promptly inform the Association of any GOK has provided the Bank with a compliance condition which interferes with progress of the report on R&R and made elaborate contingency project, accomplishment of the purposes of the plans to deal with the situation arising out of Credit or performance by GOK of its obligations. raising of Almatti dam prior to completion of R&R. 3.01(a) 01, C GOK shall maintain records and accounts to In compliance. monitor and record progress of the project and reflect in accordance with sound accounting practices its operations and financial condition in respect of the project. 3.01(bi) 01, C GOK shall have its records and accounts of each In compliance. FY audited by independent auditors acceptable to the Association. 3.01(bii) 01, C GOK shall furnish to the Association, not later than In compliance. 9 months after end of each FY, the Audit Report.  Agreement Section Covenant Present Original Revised Description of covenant Comments type status fulfillment fulfillment date date SCH.1 .02(i/ii) 06, CP GOK shall take steps for the elimination of GOK has taken steps to prevent mosquito mosquito breeding and the introduction and spread breeding, and monitor and treat malaria in the of malaria in the project area. project area; however, GOK's anti-malaria does not seem to be working. Malaria incidence has increased significantly in Almatti and Narayanpur areas. SCH.1 .02(iii) 06, C GOK shall establish at least three anti-malaria Four Anti-Malaria Units have been established in units in the project area with adequate staff and the project area. Lack of institutional autonomy resources. and persistent staff vacancies hamper effective implementation. SCH.1.03 06, CP GOK shall monitor groundwater levels and quality GOK has been monitoring ground water levels of surface and sub-surface water in the project w and quality. Waterlogging metering at an area and provide drainage to preverlt wateriogging aiarming rate. Drainage master plan will be and salinity levels. finalized after acceptance of drainage consultants' report. SCH.1.04(i) 12 CP GOK to establish water user groups in the 50 Water Users Associations have been command area at least one year in advance of registered. WUA formation halted service 1992. actual construction activities. SCH.1.04(ii) 12, CP GOK shall ensure farmers participation in Limited amount of farmer consultations are decisions directly affecting them such as layout of reported. 5 WUAs have been commissioned on field channels and location' of turnouts. pilot basis. SCH.1.04(iii) 05, CP GOK shall train water user groups in operation and Limited amount of training provided by WALMI maintenance of field channels and continue to and CADA. 5 WUAs entrusted with maintenance entrust such maintenance responsibility to such responsibility. groups. SCH.1.05 02, NC GOK shall take necessary action in a phased The irrigation network in the command area is manner to recover from water users full cost of still being expanded. So far, cost recovery is not O&M of irrig. facilities through water charges from emphasized. date of commissioning of each irrig. system under the proj. ensuring recovery the fourth year after such date. SCH.1.06 06, 10 NC GOK shall ensure that irrigation water is distributed Surplus water at present stage has delayed in areas irrigated under the project on RWSS introduction of RWSS. basis.  Agreement Section Covenant Present Original Revised Description of covenant Comments type status fulfillment fulfillment date date SCH.1.07 05, C GOK shall confer on GOK's ID Engineer-in-Chief In compliance. all powers necessary to strictly enforce quality standards in project construction and operation. SCH.1.08 12 C GOK shall maintain a dam review panel with In compliance. membership and Terms of Reference agreed with the Bank and shall ensure that panel meets as often as it deems necessary. SCH.1.09(a) 05, 12 C GOK shall ensure that a separate O&M Unit is In compliance. maintained within the Irrigation Department. SCH.1.09(b) 05, 12 C GOK shall ensure that within one year after Responsibility for irrigation is progressively commencement of supply of water through irrig. transferred to O&M Wing as sections of the facilities, responsibility of such facilities is irrigation canal are completed. transferred from the Construction Wing of the Irrigation Department to the O&M Unit. SCH.1.10(i) 05, 12 CP GOK shall provide adequate number of extension Training is provided both by CADA and WALMI workers and subject matter specialists in irrigation, but needs to be expanded and improved. water management, and input output monitoring. SCH.1.10(ii) 05,12 CP 6/30/91 GOK shall complete establishment of agriculture Research stations established and partly research facilities at Bheemarayangudi and two functional but under-resourced. research sub-stations in tlhe project area with adequate staff and resources. SCH.1.10(iii) 05, 12 C 6/30/90 GOK shall establish a management information MIS cell established but not yet operating system cell for the project with adequate staff and effectively. resources. SCH. 1.11 05, CP GOK shall ensure that all relevant site engineers Training organized in limited manner. and executive engineers responsible for construction supervision are trained in contract administration. SCH.1.12 06, CP GOK shall take necessary step to protect the Afforestation in progress mainly in command watersheds of the immediate catchment areas of area. reservoirs from risks of soil erosion.  Agreement Section Covenant Present Original Revised Description of covenant Comments type status fulfillment fulfillment date date SCH.1.13 04, NC GOK shall make alternative arrangements for Special Loan Account created by CADA. Some financing OFD works in the event credit is not OFD work initiated. Currently, OFD has come to available to farmers. a halt because of CADA's inability to arrange further credit. SCH.2.01 (a) 07, CP GOK shall undertake resettlement and GOK is implementing R&R in accordance with rehabilitation of oustees in accordance with outdated 1995 policy which was at that time, principles and guidelines agreed with the approved by the Bank. Agreements reached in Association. MOU of October 15, 1996 were not implemented. SCH.2.01 (b) 07, CP GOK shall take steps to carryout the resettlement The revised R&R action plan was submitted to and rehabilitation plan agreed with the Association the Bank on May 24, 1997 and was not found (R&R Plan). acceptable. SCH.2.03 04, CP GOK shall continue to allocate funds required for GOK funds are supplemented with funds raised Part B of the project to CADA as separate by the Krishna Bhagya JaIa Ninam I teL budgetary item. Allocation for R&R has increased significantly to pay for escalating cost of land acquisition. However, allocation for rehabilitation remains inadequate. SCH.2.04(i) 07, CP GOK shall ensure that the R&R process shall be The contract with ISEC has been discontinued. evaluated annually beginning from date of transfer The project no longer has an agency for of oustees, by independent, qualified non- independent evaluation of R&R. governmental, rural development institution acceptable to the Association. SCH.2.04(ii) 07, C GOK shall make available to the Association the Evaluation report provided in 1997. results of such evaluation. SCH.2.05 12, CP GOK shall extend to all villages in the command Afforestation has been done in the Narayanpur area its on-going program for village woodlot RCs. Roadside plantation in most Almatti RCs development. has also been done Development of woodlots has still to take place in new RCs. SCH.2.06 07, CP Oustees not provided with at least 1.5 ha of Orders issued but not implemented. Oustees irrigated land or unirrigated land of equivalent from most villages have been able to continue potential shall be granted long-term leases for drawdown cultivation without leases. acquired reservoir lands or portion thereof seasonally exposed during drawdown.  Agreement Section Covenant Present Original Revised Description of covenant Comments type status fulfillment fulfillment date date SCH.2.07(a) 09, CP GOK shall make available and financed income GOK has provided resources for IGS. Without generating schemes to affeoted families through its institutional support they have proved instrumentalities. inadequate, utilization remaining at 11.7% overall.l SCH.2.07(b) 09a CP Utilization of funds transfeised to such R&R Wing monitors delivery of input (opening of instrumentalities shall be monitored annually. joint accounts, and withdrawals) but not outputs (aoaual schemes established) or outcomesG (incomes restored). SCH.2.08 07, C 12/31/89 10/1/95 GOK shall establish an appropriate grievance Lok adalats function as grievance mechanisms.l mechanism to enable oustees to seHtle disputes.l SCH.2.09 07, CP 12/31/90 12V31/91 GOK shall furnish to the Association an action plan Bagalkot R&R Action Plan was approved iin 1991 acceptable to the Association for the reseHtlement and revised in i995. Latest revision submiHted in and rehabilitation of oustees involuntarily resettled 1996 with R&R Action Plan for UKP which as a due to backwater effect at Bagalkot town. whole has not been accepted by the Bank. SCH.2.10 07. C Cash payments should not be made in substitution 1995 GO makes cash available for PDFs to of land or income-generating schemes under Part acquire land or IGS. B of the project. a~  Table 11: Compliance with Operational Policies Statement Number and Title Describe and Comment on Lack of Compliance 1. OMS 2.25 Cost Recovery Policy The project did not comply with this OMS which emphasises the importance of recovering the full cost of O&M of irrigation schemes. 2. OD 4.30 Involuntary Resettlement The project has been assisting displaced persons in their move to new Resettlement Centres but has failed to provide them with adequate resources and institutional support to restore their livelihoods. 3. OP/BO 4.37 Safety of Dams The project has.constituted a Dam Safety Review Panel but has not yet implemented its recommendations to repair the damaged stilling basin, and carry out maintenance on the upstream face of the dam. Table 12: Bank Resources: Staff Inputs Stage of Planned Revised Actual Project Cycle l WeeL4 US$ Weeka US$ Weeks US$ Preparation to Appraisal 267.9 438.0 Appraisal-Board _ = == 93.5 112.4 Negotiations through Board Approval 25.3 51.8 Supervision 58.4 83.5 60.0 31.8 366.8 393.1 Completion 16.0 53.2 26.0 47.9 7.4 18.7 TOTAL 74.4 136.7 86.0 79.7 760.9 1014.0 na Planned and revised figures available only from FY96. nya Not yet available. 1/ Planned and revised figures for supervision and completion are for FY96-FY98 only. 27  Table 13: Bank Resources: Missions Performance Rating2/ Number Specialized Implemen- Develop- Stage of Month/ of Days in Staff Skills tation ment Types of Project Cycle Year Persons Field Represented / Status Objectives Problems3/ Through Appraisal 6/85 2 5 Eng,Res 7/85 2 42 Eng(2) 10/85 9 20 Eng(4),Soc(2), Ec,Plnr,Ag 12/85 1 4 Eng 1-2/86 9 25 Eng(6),Ec,Leg, Ag 5/86 2 2 Eng,Ec 9-10/86 9 30 Eng(4),Ec(2)Trg, Soc,Ag 4-5/87 11 29 Eng(4),Soc(2), Ec,Ag,Leg,Fin, Trg 9/87 1 4 Soc Appraisal through 1/88 9 25 Eng(3),Eco(2), - _ _ Board Approval Ag(2),Soc(2) 2/89 1 7 Ag 5-6/89 1 9 Soc 7/89 1 4 Soc Supervision 1 11/89 5 8 Eng(4),Soc 2 1 P,EA,M Supervision 2 5/90 6 5 Eng(4),Soc,Wa 2 1 T,M Supervision 3 9/90 1 6 So T Supervision 4 12/90 6 7 Eng(4),Ag,So(2) 2 1 P,T Supervision 5 5/91 2 2 Eng(2) Supervision 6 7/91 8 7 Eng(5),Ag,Soc(2) 3 2 P,M,EA Supervision 7 10/91 4 11 Eng,Soc(3) EA Supervision 8 12/91 7 6 Eng(3),Ag,,Eco, 3 2 EA,M,T Soc(2) Supervisionn 9 6-7/92 9 10 Eng(4),Soc(2), 3 2 EA Wa,Ag,Eco Supervision 10 10/92 3 9 Eng,Wa,Soc EA Supervision 11 2/93 7 9 Eng(3),Soc,Wa, 2 2 EA,T Eco(2) Supervision 12 6/93 8 8 Eng(5),Soc,Wa, 3 2 EA,T Eco 28  Table 13 (cont'd) Supervision 13 11/93 5 5 Soc(3),Eng(2) 3 2 EA Supervision 14 2/94 2 3 Eng(2) EA Supervision 15 4/94 7 5 Eng(3),Soc(3),Ag 2 2 EA,T Supervision 16 10/94 1 6 Eng EA Supervision 17 1-2/95 3 6 Eng(3) U S EA,T Supervision 18 8/95 2 4 Eng(2) EA Supervision 19 12/95 1 6 Eng T Supervision 20 2/96 6 8 Eng(3),Soc(2), U U EA,T Fin Supervision 21 7/96 2 5 Eng,Soc EA Supervision 22 (Tech) 12/96 2 9 Soc(2) EA Supervision 23 3/97 6 7 Eng(4),Soc(2) U U EA,T Supervision 24 6/97 1 8 Soc U U EA Completion 9/97 5 21 Soc(2),Eng, U U EA, M Ag,Econ 1/ Skills Represented: Eng-Engineer; Res-Research; Soc-SociologistVAnthropologist; Ec-Economist; Leg-Lawyer; Ag- Agriculturalist/Agronomist; Plnr-Planner; Trg-Training Specialist; Fin-Financial Analyst; Wa-Water Resources Specialist. 2/ Performance Rating: I=Problem Free or Minor Problems; 2=Moderate Problems; 3=Major Problems; S=Satisfactory; U=Unsatisfactory. 3/ Types of Problems: P=Procurement, EA=Environmental; M= Management; T=Technical. 29  Appendix I Page 1 of 22 IMPLEMENTATION COMPLETION REPORT INDIA UPPER KRISHNA (PHASE II) IRRIGATION PROJECT (Cr. 2010-IN / Ln. 3050-][N) Mission's Aide-Memoire (September 8-26,1997' A. GENERAL 1. A mission from the World Bank comprising A.A.Dani (anthropologist, team leader), W.I.Jones (consultant agricultural economist), M.M.Shah (irrigation engineer), S.P.Sarkar (consultant agronomist) and M.Hasan (resettlement specialist) visited India from September 8-26, 1997 for the preparation of the implementation completion report (ICR) for the project (UKP). After initial discussions in Bagalkot, Karnataka with the Acting Engineer-in-Chief & Project Coordinator (ECPC), Commissioner, (R&R and LAQ), and other senior staff of UKP, the mission spent two weeks assessing project achievements and outcomes. Besides extensive field visits over two weeks, the mission held discussions with thle staff of the Irrigation Department (ID), Command Area Development Authority (CADA), the R&R Wing, BTDA and Health Department (HD) staff attached to the project, as well as with the Managing Director of Krishna Bhagya Jala Nigam Ltd. (KBJNL). The mission benefited from the cooperation and generous hospitality of the Government of Karnataka (GOK) and many farmers in the Upper Krishna Project area, for which we are grateful. The mission acknowledges the effort made by UKP staff to provide the data requested by the Bank to enable completion of the ICR mission. 2. The mission's task has been to assess the value, net of costs, of the project, to the people of India, as best we can estimate it at the present time, when World Bank financing has come to its end. We have also attempted to assess the performance of the World Bank and the Borrower compared to the project's objectives and strategy laid out in the Legal Agreement and the SAR -- not to reward good performance or, as the case may be, to allocate blame, but to understand what we have done well, and what we could have done better, with a view to the future. 3. This aide-memoire, which incorporates the discussion at the wrap-up meeting with the GOK in Bangalore on September 25, records the mission's findings and the views of the World Bank, the borrower, and implementing agencies on project implementation and operation, including the operational plan (Attachment 1). Guidance on the Government's contribution to the ICR had been provided by the previous supervision mission in June 1997 and a Borrower's Completion Report was provided to the mission in draft form. That draft is still subject to revision by GOK. The aide-memoire is subject to confirmation by management. 30  Appendix I Page 2 of 22 The Project 4. The objectives of the project identified at appraisal were to: (1) increase agricultural production, incomes and direct employment opportunities for some 100,000 families in the drought-prone and relatively arid northern part of Karnataka through the expansion of irrigation for 150,000 ha, on-farm development for 116,000 ha, construction of 459 km of new roads and upgrading of 214 km of existing roads; (2) ensure that affected persons would enhance or at least regain, within a reasonable time of transition, their previous standard of livelihood; (3) strengthen Karnataka's technical and managerial skills in irrigation project management, design, construction and O&M; and (4) contribute toward an effective anti-malaria campaign. 5. UKP is the Phase II of Karnataka's long-term plan for the development of irrigation in the Upper Krishna basin and is a continuation of Phase I, implemented with IDA assistance for Karnataka Irrigation Project (Cr. 788-IN). Phase II was appraised in 1989, approved on May 4, 1989, and expected to close on December 31, 1996. The project cost, was estimated to be US$ 542.2 million (Rs. 7,917 million), towards which the Bank agreed to provide $325 million (credit SDR 119 million; loan $ 160 million). Following significant devaluation of the Indian rupee, financing arrangements were revisited and US$ 120 million from the loan canceled in two installments. On project closure, an unutilized balance of $38,18,465.58 from the loan amount was canceled. 6. Disbursement was suspended twice, from November 1992 - February 1994, and again from September 1995 - October 1996, both times due to unsatisfactory performance in resettlement and rehabilitation (R&R), and the lag in R&R compared to the pace of construction of Almatti dam. A six-month extension was granted to restructure and further extend the project to complete outstanding R&R. Restructuring was not completed and the project closed on June 30, 1997. B. MISSION'S FINDINGS Achievement of Objectives 7. During implementation of Phase 1[l, GOK's priorities proved to be somewhat different from those of the World Bank. GOK clearly attaches highest priority to increasing Karnataka's allocation of Krishna River waters when they are re-allocated in 2000. To this end, maximum effort has been made to raise Almatti damr to 509.016 msl and to fill its reservoir, even though these waters are not yet needed for irrigation. GOK's agreement with the Bank (PA: Schedule 1, para 1) requires that water be utilized for irrigation within three years of impoundment. If the present pace of irrigation development continues, this target will not be achieved. The decision to. raise the reservoir level in advance of irrigation needs has led to massive flooding of lands, homes and public facilities earlier than necessary. Consequently, the project has incurred large R&R costs several years before the command area will be ready to assimilate additional numbers of people. This situation will be exacerbated after installation of the planned 15 m radial gates if the reservoir level is raised further in 1999, as anticipated. 8. Pursuit of the Borrower's highest priority has had other consequences, possibly more serious than those mentioned above. The additional effort to raise Almatti to full height and to construct major canals to the maximum has been made at the cost of other priority works of the project. Land shaping and drains, for instance, have lagged seriously behind; work has virtually 31  Appendix I Page 3 of 22 come to a halt, with nothing done since the first years of Phase II. O&M of major works has been seriously neglected. These economies, made in puirsuit of maximum Krishna water rights in 2000, are compromising the fundamental objective for which the project is being built. * First, without land shaping and adequate drainage, increased farm output is much less than what is should have been, given the massive investment in major civil works. * Second, serious environmental degradation is taking place. Because field drains are missing, because the water delivery system is not being operated as agreed but delivers more canal water than the developed areas can use effectively, because farmers are getting canal water virtually free and have no incentive to husband it, and because poor canal O&M has led to excessive seepage, large and growing areas are becoming waterlogged; soluble salts in bed rock are coming to the surface. The results for farming are serious. The effort and cost of reclaiming these lands will be great. * Third, deficient maintenance is compromising the value of the major canal works. Canals are deteriorating at an alarming rate; broken regulators are not getting fixed; without rudimentary access, some canals cannot even be inspected. * Fourth, despite an elaborate design derived from the lessons of its predecessor, KIP (Cr. 788- IN), and explicit covenants laid out in the Legal Agreement, and despite a tremendous effort to resettle villagers threatened with submergence over the past two years, GOK has been unable to implement a balanced resettlement and rehabilitation (R&R) program for affected persons. The design had envisaged R&R as an integral part of the irrigation project where displacement would be synchronized with irrigation clevelopment and displaced persons would be a resource, contributing to and benefiting from the command area. Without the potential economic role of the command area, R&R efforts being entirely localized in the submergence zone, PDFs have been treated as a liability. 9. In short, Government of Karnataka's priority with respect to Krishna water rights is having major costs which probably have not been sufficiently recognized. Project Achievements IRRIGATION INFRASTRUCTURE 10. In physical and financial terms, the targets fixed for irrigation infrastructure have been partially achieved. Construction quality is mixed while O&M is unsatisfactory. Furthermore, the progress in land shaping and field drains (under CADA's jurisdiction), which have a direct and significant impact on agricultural production and sustainability of outcomes, has been very poor. 11. The project aimed at strengthening Karnataka's technical and managerial skills in project management and the planning, design, construction and operation and maintenance of irrigation projects. These objectives were not achieved. Contract management, water management and environmental management have not shown any significant improvement. In respect of construction quality, though major works (dam and branch canals) showed some improvement, other relatively small but important components (distribution system, FICs, roads, buildings) continued to suffer in quality, thereby affecting efficiency of the water delivery system and 32  Appendix I Page 4 of 22 sustainability of the infrastructure developed under the project. The canal system under Phase II has been designed to be operated according to Rotational Water Supply (RWS) principles. In actual practice, RWS is not being applied. 12. In respect of institutional development, a separate O&M Zone was set up during the project period. However, in the absence of project specific Plan of Operation and Maintenance (POM), lack of continuity of key staff and their training in O&M, the project has not been effective in improving O&M. The infrastructure for WALMI has been created, but training at WALMI has not had any significant irnpact. Neither has technical assistance due to lack of follow-up on consultants' recommendations. Despite assistance by MIS consultants, neither the ID nor CADA are using MIS for effective water management and management of the vast infrastructure created under the project. Only the R&R Wing has managed to utilize the MIS effectively. 13. Almatti Dam. Most of the works included in the appraised project and some not included has been completed. The remaining works are expected to be completed by June 1998. Curtain grouting and drainage holes are a high priority for dam safety, but have made insignificant progress so far. 14. Repairs to the damaged stilling basin below the spillway and impermeabilisation of upstream face of the dam are overdue. These emergency works have a direct bearing on dam safety but are still held up by a prolonged approval process. They are scheduled to be completed by June 1998. That will be possible only if this work is contracted by December 1997. 15. Two important studies: (i) hydrology (review of design flood, back water studies, reservoir operation and flood warning system) and (ii) structural design of stilling basin are seriously lagging and should be completed quickly so that timely follow up action can be taken. 16. The reconstituted DSRP has been providing useful inputs for safety of the two dams. However, follow up actions on DSRP's recommendations are much delayed. 17. Almatti Dam and R&R Linkage. In an effort to avoid unnecessary R&R, as well as premature investment in the dam, it was agreed at negotiations that no construction on Almatti Dam take place until the Borrower could demonstrate that water from Almatti Reservoir would be needed for irrigation within three years. The Borrower did not synchronize dam raising with realistic water needs. Nevertheless, the Borrower did raise the spillway of Almatti Dam, sometimes with Bank approval, sometimies despite written assurances that it would not do so, irrespective of readiness of R&R works. As a result, major R&R and dam-construction expenses, which could have been deferred, were incurred. 18. Projections made for villages likely to be affected during 1997 floods were over- estimated. The backwater studies and warning system, therefore, need to be reviewed considering spillway discharge coefficient, actual observed flood data, travel time from flood warning station to the reservoir, and actual back water levels recorded during the 1997 floods. 19. Completion of Phase II Irrigation Canals, as reported in the Borrower's ICR, is largely completed, though field irrigation channels (FICs), clubbed with major canals in integrated contracting packages, are lagging two years behind other works. Shahpur Branch Canal is complete and largely handed over to O&M Zone. Phase 11 work on Indi and Mudbal Branch 33  Appendix I Page 5 of 22 Canals are expected to be completed by June 1998 and December 1977 respectively. Irrigation potential created has, however, fallen significantly short of expectations. 20. Drainage. The Phase II project envisaged improving main and secondary drains in the entire project area and construction of field drains on about 44,400 ha (30% of the project area). By 1993-94 field drains were constructed in about 20,300 ha. No further progress is reported thereafter. Also no progress is reported on improving main and secondary drains in the project area. 21. Poor water management and lack of adequate drainage have created serious problems. Lands of about 70 villages have been affected by waterlogging. The Drainage Master Plan consultants have recently furnished their final report. The estimated cost of completing drainage is about Rs. 725 million. ID and CADA have yet to prepare an action plan to implement the recommendations. 22. Land Leveling. Due to the rolling topography of the command area, land leveling assumes great importance. The FICs are designed and constructed assuming that land leveling has been or will be done. The absence of land leveling is clearly visible in the field, some farmers being compelled to make unauthorized cuts on the laterals or FICs to draw water. This situation has seriously affected the system physically and in water use efficiency. 23. Farm land shaping and leveling was to be carried out by contractors and farmers with institutional credit. GOK was bound to making alternative arrangements for financing these works whenever institutional credit was not available to farmers. Normally, when farmers fail to qualify for institutional credit, CADA borrows with GOK guarantee and attempts to collect the money from farmers. GOK failed to give its guarantee to CADA's 4th scheme, dated April 1990 to December 1992 and the only one under Phase II, until March 1997. Land leveling for only 8,800 ha in Phase II areas was done till 1992; thereafter the activity came to a halt. CADA belatedly prepared a new credit scheme to address this problem in 1997 but is was not approved by GOK. 24. O&M. The O&M Wing was transferred from CADA to Irrigation Department and was later upgraded to a Zone. Completed works are now being handed over to the O&M Zone after joint inspection of the works with the respective construction zones. This institutional arrangement was designed to improve coordination between construction and O&M. It has, however, not improved operation and maintenance. There has been rapid turnover of CE (O&M); the post is now vacant. Though a consultant prepared an O&M Master Plan early in the project, its recommendations have not been implemented. Plans of Operation and Maintenance (POM) have not been developed for dam and canals so far. Training of personnel in O&M has not been given due attention. Procedures for periodic inspections have not been laid down and, even when they exist, are not followed. Job responsibilities are not clearly defined. Procedures for monitoring O&M activities are missing. Data do not exist to compare actual O&M (works) expenditure per ha of command area with standard norms. 25. Field visits indicate that poor O&M is leading to rapid deterioration of the irrigation system. The gates at Narayanpur Dam (spillway and canal headworks) which serves all canal systems are leaking due to damaged seals. The gate position indicators are not functioning. Inspection of the distribution system is difficult if not impossible since the service roads of distributaries are not jeepable at many locations and not even walkable at some because of 34  Appendix I Page 6 of 22 damaged roads or very thick and thorny jungle on service roads. The lining is damaged at several locations and many gates are either damaged or missing. Canal-side plantation is absent. FICs are supposed to be maintained by the farmers but are also not in good shape. Immediate corrective actions (institutional, procedural and financial) are required to make the O&M organization effective and to restore the system to an acceptable condition. 26. Water Management. Since excess water is available at this stage, water management has not received due attention. Consequently, water application is far in excess of crop requirement. Irrigation intensity has gone up to 154% against appraisal design of 112%. This situation is further aggravated by the absence of land leveling and adequate drainage, and has led to serious waterlogging problems at this early stage of the project. 27. For effective water management, water accounts need to be kept and audited to analyze how much water has been fed into each distributary/canal compared to respective design requirements, and to find ways of minimizing the wastage. Measuring devices need to be installed at the head of each canal system and the distributaries. Discharges presently measured at the head of the canal systems are not reliable since gate position indicators are absent or, if installed, are not working. The discharge coefficient (except for the NLBC head regulator) is not scientifically derived. Cross checks usinig current meter at nearby bridge site are also necessary to confirm discharge rating curves. 28. Rotational Water Supply (RWS) was introduced during the later part of Phase I and carried forward to Phase II. At present RWS is practiced in Rabi season only when the system is kept on for two weeks and off for one week. The RWS has not been functioning effectively for several reasons. Some parts of the system built in Phase I hiave gated structures at lateral off- takes, whereas the rest of the system has ungated APMs. The gated structures are not effective since many gates are either damaged or are missing. There is no POM for operation of the system having either gated or ungated oF-takes from distributaries. Efficiency of the distribution system is also low because of poor construction quality and lack of O&M. Some large distributaries were to be sub-divided to facilitate on/off operation, but they have not been subdivided. Night irrigation is normally not practiced. Tail-enders resort to night irrigation when head reach off-takes are closed, using stone slabs or otherwise. Some farmers, not getting their due share in the absence of land leveling, are compelled to make unauthorized cuts in the system. There are not enough cross regulators in the conveyance system to head up water to the required level at the distributary head; temporary cross walls are required in the conveyance system and stone barriers across the delivery system. This situation may improve when full irrigation develops. Training of project personnel and farmers in RWS has not received due attention. Immediate action is needed to have a RWS expert prepare plans for operating the canals on RWS principles. Continuous RWS training program is needed immediately for O&M staff and farmers. 29. Ayacut Roads. Against the appraisal target of 672 km of all-weather roads, increased to 942 km during implementation, work has been completed on 617 km. Land acquisition problems are the major cause of delay. The remainig road work has been transferred to CADA and is expected to be completed by November 1997. Completed roads are to be transferred to Zilla Parishads for maintenance. 30. Completion of Phase 11 Buildings for ID colonies and WALMI has been as reported in the Borrower's ICR. The WALMI buildings not already handed over to the Director will be 35  Appendix I Page 7 of 22 shortly after the defects identified during joint inspection are rectified by the contractor. The buildings at WALMI suffered from faulty layout and design, and inadequate supervision by the staff not experienced in building construction. 31. Mapping. The project provided for photogrammatic mapping of the command area not mapped under Phase I. The job of aerial survey and photo mapping was entrusted to the Survey of India and has been completed. 32. Quality Control. The Chief Engineer (Designs) heads the Quality Control Team. During project implementation, some improvement was observed in quality control procedures and quality of the final product, particularly major structures. There is, however,,wide scope for further improvement in quality assurance and quality control. Systematic quality control also needs to be introduced for smaller components (distribution system, roads and buildings) which are not up to required quality standards. 33. Technical Assistance, Training. The project envisaged technical assistance in planning, O&M, monitoring & evaluation, and contract administration. Consultancies awarded during the project period pertained to (a) feasibility studies for future development in UKP; (b) establishment of MIS; (c) telecommunication for UKP; (d) master drainage plan for UKP stage I; and (e) integrated reservoir operation studies; as well as (f) socio-economic studies for R&R. Though utilization of technical assistance funds available under the project is satisfactory, no action was taken for monitoring and evaluation of project agricultural and economic benefits. GOK also failed to take follow-up action on some of the critical studies. The inability of the ID and CADA to build on the work of MIS consultants has already been mentioned. Telecommunication studies, very important for wide spread canal network of UKP and integrated reservoir operation, were abandoned half way. No action plan has yet been drawn for drainage based on the master plan prepared by consultants. Similarly, no follow up actions have been taken on the recommendations of the O&M consultants made early in Phase II. 34. Training which was to be provided by WALMI and CADA has not made any significant progress. No major training programs have been conducted in the fields of contract management, O&M, RWS, land shaping or drainage. The absence of these skills has had a visibly negative impact on project outcomes. AGRICULTURE 35. Where irrigation has been provided, the agricultural transformation has been dramatic. From the highly risky, low-output rainfed farming of the semi-arid project area, a more stable, higher-value agriculture is rapidly emerging. Results from irrigated fields are somewhat better than expected at appraisal, even though the canal system is not being operated as planned. However, (a) the area receiving irrigation is less than anticipated, and (b) most of that area is not receiving full irrigation services because parts of the system have not been completed, and (c) this, with other factors, is leading to on-farm losses due to waterlogging and salinization. Therefore, aggregate agriculture benefits are below expectations and insufficient to provide a reasonable rate of social return on the vast resources which Karnataka has invested in Phase II. 36. Below, we review: (1) irrigation services provided; (2) on-farm results; and (3) provision of other services to farmers. 36  Appendix I Page 8 of 22 (1) - Irrigation services provided. 37. Of 148,000 ha slated to get irrigation during Phase II, 63% has done so. Of the remaining 37%, 28% is served by irrigation canals down to the distributary but lacks FICs. The remaining 9% is also not yet served by its major canals. Given the present pace of work, it is assumed that the major canals will be completed for the remaining area in 1997/8 and that the FICs for the Phase II area wil l be completed in 1999/2000, three years behind schedule. 38. Irrigation on most of the 93,514 ha served is highly imperfect. As per appraisal estimate, 78% of the Phase II area requires land leveling or land shaping for irrigation to work properly. Furthermore, while the techniical needs were less precisely known, the appraisal had estimated that 30% requires field drains (FDs). 39. Land leveling and construction of FDs has fallen far short of target. Only 8,820 ha were land shaped during Phase II, a mere 8% of what is needed for irrigation to function properly. The only land shaping was done in 1990-92. Field drainage on only 20,297 ha, 46% of requirements for proper irrigation function, was installed. 40. The agricultural consequences of the major shortfalls in land shaping and FDs are apparent. Frequently, FICs are hanging in air or below field level. Even when they happen to be at the right level in an unleveled field, canal water does not reach some of the crops (while others may be waterlogged). Farmers consequently over-irrigate, a practice which is encouraged by low water charges (rarely collected) and because ID rarely operates the canal system according to design but allows the canals to flow virtually all the time. That, plus the frequent absence of major drainage is leading to a serious waterlogging and salinity problem. 41. This situation was documented by the consultant's Master Drainage Plan. It can be seen in farming patterns: declining yields in low-lying fields, switching from crops for which the system was designed to waterlogging- and salt-tolerant rice, and finally, abandonment of farmland. 42. It is difficult to quantify these irrigation deficiencies. System impairment due to absence of land shaping and drains comes in all degrees of severity. Waterlogging and salinity stem not from absence of field drains alone but also from failures of canal system operation, of water charge collection, and of major drain construction. 43. Suppose that 22% of the command is flat enough not to need land shaping, another 8% has been leveled, and that on another 15% land leveling can be managed by farmers with a bullock pair and/or is not a critical problem. Then it is on the other 55% that farmers are getting deficient irrigation for want of land leveling. 44. Waterlogging and salinity is nolt (yet) a problem on all of the 16% of the Phase II command that was supposed to get FDs but didn't. ID, the Drainage Master Plan and the Indo- Dutch drainage team agree that problems develop only after a few years of improper irrigation, but that they then have a cumulative and serious effect. 37  Appendix I Page 9 of 22 (2) - Farming results. 45. Therefore, irrigation in Phase 11 can be divided into three areas. Thefirst -- 45% of the area at the start -- gets regular irrigation. The second -- 55% of the area -- gets defective irrigation due to lack of land shaping and achieves, on average, only 60% of the agricultural gains of the former area. Starting in the fifth year after receiving irrigation, the 16% of the command that requires FDs but didn't get them constitutes a third area that suffers a 5%/year decline in its benefits from irrigation. These conservative assumptions may seriously understate the agricultural effects of defective irrigation, but they are an attempt to recognize it. 46. Under these assumptions, the percent of the net value of farm production that will be lost on Phase II's average area by year after first receiving irrigation would be as follows: year 1 2 3 4 5 6 7 l8 24ff loss to lack of land 22% 22% 22% 22% 22% 22% 22% 22% 22% shaping loss to lack of drainage _ 0.8% 1.6% 2.4% 3.2% 16% total loss 22% 22% 22% 22% -22.8% 1 23.6% 24.4% 25.2% - 38% 47. Farmers whose irrigation is not defective are doing better than anticipated at appraisal. Average cropping intensity is 1.6 (1.54 of which is irrigated), compared to the 1.45 (1.15 irrigated) projected at appraisal. Compared to appraisal estimates, there has been a major shift towards oilseeds, which account for over half the cropping pattern. Farmers are enamored with sunflower, a low risk crop with quite high returns, and groundnut, while safflower, which responds little to irrigation, is losing its place. The increase in oilseeds is at the expense of pulses and grains. Kharif sorghum, which could do well if canal water were released earlier, is much less important than anticipated. Because grain production has not expanded as rapidly as expected, neither has fodder production. While chili production is expanding as expected, there is a little less shift to other vegetables than anticipated. And cotton area has grown very little, though hybrid irrigated cotton, with its high inputs-and high outputs, is a far cry from rainfed local cotton. Yields have increased greatly with irrigation, roughly as projected at appraisal, though the increase in grain yields has been slightly lower. There has also been, as anticipated, a major increase in labor input, as well as use of fertilizer, manure, and other inputs. 48. Farmers have taken much longer than anticipated, four years on average, to adjust their cropping pattern to their new irrigation, despite their ability to copy the transition of their neighbors in the Phase I area. However they are on the way to achieving full-development yields more quickly than the 15 years expected at appraisal. 49. Economically, since much of the expansion is in high-value crops, the incremental value per hectare is greater than anticipated at appraisal, roughly Rs 14,000. After deducting all expenses, the estimated net financial return to the average project farmer with functional irrigation will be nearly Rs 16,000/ha at full development, versus about Rs 2,000 in the absence of the project and its irrigation. A sub-marginal agricultural area, in which families could support themselves many years only by emigrating for casual work, is being turned into a rich agricultural area. 38  Appendix I Page 10 of 22 50. Expansion in cotton and chili production may be straining marketing arrangements and affecting farm-gate prices, but generally the agricultural expansion seems to be proceeding smoothly. Whether due to increased farming demand or demand from project works, wage rates are somewhat higher in the command area than in surrounding regions. There is in-migration of farm labor and tenant-operators from Andhra, especially where waterlogging dictates rice cultivation, but little settlement of affected families displaced by the project's reservoirs. 51. The project's agricultural results would exceed appraisal expectations if irrigated area had reached appraisal targets and if land shaping and field drains had been completed as planned. Unfortunately, they have not. Therefore,, there is a serious shortfall in project benefits -- one that gets worse as drainage and salinity problems build up. Moreover, results would be better yet if the irrigation system were operated in a regular manner according to the warabandi mode for which it was designed and if the system were maintained adequately. A notional idea of the impact of these shortfalls is given under "'Net Project Benefits" below. (3) - Other services to farmers 52. As conceived at appraisal, the project included a variety of non-irrigation services that were intended to stimulate farm production and to facilitate the major shift from rainfed to irrigated farming. CADA was slated to provide most of these: agricultural extension for the transition, assistance in forming water-users' associations, provision of storage to cooperatives, in land shaping and getting credit for land shaping, applied agricultural research, and training. Other departments were slated to provide services too: Forest Department was to concentrate its resources on helping farmers start fuelwood farms in the command; Dry Land Development Boards were to accelerate their activities in the Krishna catchment; Health Department was to expand its anti-malaria activities to cope up with the problem of malaria, unintentionally re- introduced into the area during Phase I construction. 53. Many of these services failed to materialize; others were less than expected. CADA services in particular seem to have declined precipitously during and after 1992. 54. CADA was initially quite active, organizing melas to prepare farmers for irrigation, assisting them in land leveling and constructing FDs, organizing WUAs, etc. 49 WUAs were formed in 1990 and 1991, one in 1992, and none thereafter. CADA's 4th land-leveling finance scheme, April 1990 to December 1992, involved 4,999 farmers and 11,016 ha, about 80% from the Phase 11 area. This area was less than projections and contributed to, rather than reducing, the land-leveling backlog. The 4th scheme was defective in other ways too: CADA managed to have only 0.75% of the loans converted into regular loans to farmers and rediscounted by NABARD, thus saddling the Special Loan Account with a large debt, less than 2% of which CADA has been able to collect from farmers; Government of Karnataka failed to issue its guarantee for these debts until August 1997. Therefore, from 1992, land shaping virtually stopped. 55. CADA's farm extension was meant to be transitional. Extension responsibilities for the Phase I area have been transferred back to the regular service of the Agriculture Department (AD). At appraisal and thereafter, A[) was implementing T&V-style extension with Bank assistance but this was curtailed. As a result, UKP farmers are getting modest extension support indeed. CADA's agricultural staff to assist new areas getting irrigation is far below targets and unequal to the demands placed on it. The same is true of CADA's farmer-training and of its agricultural research at Bheemarayangudi. Satellite facilities at Hunasigi did not materialize. 39  Appendix 1 Page 11 of 22 56. While the Forestry Department and the district-wise Dry Land Development Boards have done commendable work in the project area, there is no evidence of the expansion and/or concentration in the project area cited in project design. The anti-malaria unit is still understaffed but is working better under the KBJNL umbrella. Prior to 1997, there were major troubles (as with other government departments in the UKP area) getting the unit operational. While there is now an impressive program of detection, prevention, remediation and cure and the death rate from malaria appears to be low, according to the units records, the disease has spread at an alarming rate over the past few years. Net Economic Benefits 57. The mission's financial and economic calculations are still incomplete. While costs, both those financed by Government of Karnataka and by the Bank, are quite accurately known, the project's benefits from farming are still being reviewed. (The mission did not obtain cost and benefit estimates for power developments that depend on UKP's dams and canals; these might raise the rate of return). 58. When actual costs and estimates of future costs are compared with appraisal estimates made in 1989, the actuals appear to be significantly higher. Some of that appearance, however, represents differences in the purchasing power of the Rupee. Thus, although in rupees the actual estimate for Phase II at project closure (Rs. 24.170.9 million,) is 305% of the appraisal estimate (Rs. 7,919.5 million), in real terms the projected cost escalation for Phase II is $755.9 million (139% of appraisal estimate). R&R costs though high incurred till project closure are $85.2 million in adjusted dollars, compared to appraisal estimate of $100.8, and are projected to reach $166.1 million by the end of Phase II, an increase of 66 percent. 59. The seriousness of delays in completing the system and of its imperfections become apparent when Karnataka's costs are compared with the agricultural benefits. To give an idea, in financial terms at full development, net incremental agricultural benefits to the 148,000 ha command would be about Rs 1800 million (US$50 million) per year. The estimated three-year delay in completing main canals and FICs, in full-development terms, will cost Rs 665 million ($18 million), Rs 360 million ($10 million) and a small amount for the third year. 60. More serious still are the defects for which no remedies are currently planned. By mission estimate, at full development, not leveling and shaping land that needs it costs about Rs 400 million (US$11 million) per year. The cost of not installing drainage will not be significant in the Phase II area for a few years, but it will grow to about Rs 290 million ($8 million) per year by the 2020s. More ominously, it is a condition that gets more costly to fix with the passage of time. 61. As a result of these various agricultural shortfalls; the mission currently estimates that the financial returns to UKP Phase II investments will be close to zero, while the economic returns are estimated to be 5% , versus the 11% estimated at appraisal. 62. Phase II has included a lot of investment -- Almatti D)am and the R&R costs associated with raising it -- that, economically and technically speaking, did not need to be made in Phase II and which will generate benefits well into the future. Moreover, some investments that did have to be made in Phase II -- the initial reaches of Indi Branch Canal for instance, will yield increased 40  Appendix I Page 12 of 22 benefits in future when the rest of their Bijapur command area is developed. The rates of return to Phase III and subsequent phases are likely to benefit from these sunk costs. In 1989, the combined economic IRR for Phases II and III was estimated at 13%. The mission will not be able to estimate the social returns to Phase Ill or to the combination of Phases II & III without estimates of the cost and pace of Phase III development, which .have not been made available. RESETTLEMENT & REHABILITATION (R&R) 63. The main lessons from R&R in Karnataka are: "(a) efforts were focused almost exclusively on physical relocation of affected people and not oni their rehabilitation; (b) cash was substituted as a proxy for re-establishment of production capabilities; (c) institutional arrangements were inadequate and there were no skilled personnel to implement resettlement12; (d) resettlement plans were not properly synchronized with construction schedules and as a result conflicts arose between the two." 64. This quote from para 6.7 of the Staff Appraisal Report (SAR) is a description of Phase I (Cr. 788-IN) but describes the outcome of Phase II equally well, with the caveat that, by its seventh year, the project has demonstrated the ability to undertake relocation of PDFs efficiently, albeit too late to change the overall unsatisfactory rating of R&R. Although the lessons from Phase I R&R were identified at appraisal, they did not improve R&R outcomes. The project did not follow the elaborate implementation design prepared by GOK and appraised by the Bank. This was further complicated by the fact that the project had clearly underestimated the extent of resettlement, particularly for Almatti dam. Instead of 21,000 PDFs estimated at appraisal for Almatti reservoir, the number of PDFs is 48,338 for Almatti alone, and 56,181 for the entire project. 65. Land acquisition of the 5,152 ha needed for all Resettlement Centers (RC's) under Phase II, 18,060 ha needed for Almatti up to 5 12 m. has been acquired, and 9,649 ha of land for canals and roads has been acquired and paid for. All of the 25,658 ha needed for Narayanpur reservoir has also been acquired and paid for in Phases I and II. However, the 18,060 ha notified by ID for Almatti reservoir has proved to be an underestimate. Even with below-average monsoon rainfall in 1997 (the first year when Almatti reached 509 m), the reservoir submerged an estimated 25,700 ha. The excess area submerged includes private land and government land along the river bank, part of which has been encroached upon. Acquisition of a further contour (512-515 m) is in an advance stage and is expected to be completed by December 1997. In the interim, farmers whose crops were submerged will need compensation. Field verification is currently underway to determine the exact amount of loss to be compensated. 66. All the structures to be acquired at Narayanpur (7,843) and Bagalkot (615) have been acquired and paid for. But at Almatti, where 31,859 structures were to be acquired under Phase II, compensation has been paid for 19,055; i.e., 40% of the structures have yet to be paid for. 67. Deviation from R&R design Based on the lessons learned from Phase 1, the R&R design documented in the SAR promises 'land-for-land' (minimum 1.5 ha of irrigated land or equivalent 12 Over the past two years the project has cleveloped an efficient system for physical relocation of PDFs. However, institutional arrangements and skills to implement and support an economic rehabilitation program are still deficient. 41  Appendix I Page 13 of 22 dryland) for landowning farmers rendered landless by the project, and 0.5 ha irrigated land to the landless or, at their option, training, seed capital and institLtional support for other forms of economic rehabilitation, and housing entitlements. A GO issued prior to appraisal established the legal framework for R&R (SAR, para 6.10), while an Act already approved by the State legislature was pending approval by the President of India. T he project had expected to benefit from this legislation. The Karnataka Resettlement of Project Displaced Persons Act, 1987 (henceforth called the Resettlement Act) received Presidential approval on August 8, 1994. This Act provides a legal basis for acquiring a proportion of land from the benefited zone owned by farmers in proportion to the size of their holding for allocation to persons displaced from the affected zone of that project. The cost of this acquisition was to be met from the compensation provided to PDFs. Unfortunately, the Resettlement Act was never notified and applied to the project. This is a missed opportunity. Average dryland holdings tend to be considerably larger than irrigated holdings. Irrigation requires more intensive work often results in sale of 'surplus land' (SAR, para 6.20). The prime beneficiaries of the project are the farmers in the command area. The prime losers are the persons displaced in the submerging zone. Making the beneficiaries contribute toward rehabilitation of the losers would have been the most efficient and cost-effective way of achieving R&R objectives. Unfortunately, this was not to be. 68. Physical relocation. As in Phase I, the emphasis in P'hase II was almost exclusively on physical relocation of people rather than on their rehabilitation. 69. Most of the Resettlement Centers (RC's) at Almatti, and all of those at Narayanpur have been provided with basic infrastructure and services. InfrastruLcture for the last 18 RC's (out of 68) which will be required in 1998 is being rapidly completed. The quality of infrastructure in the RC's is largely satisfactory, except for a shortage or absence of toilets. Since the new RC's lack vegetative cover, PDFs are seeking community toilets, particularly for women. The school buildings are lack toilet and drinking water facilities. 70. The Resettlement Centers (RC' s) have been established, after local consultation, close to the submerging village but largely away from other economic opportunities 13. While this has the advantage of allowing PDFs to continue to farm the portion of land which remains above the reservoir level, and to engage in drawdown cultivation on sorne of the submerging land, there is considerable reduction in the cropping area which is likely to pose an obstacle to economic rehabilitation of PDFs. The covenant on granting long term renewable leases for drawdown cultivation (PA, Schedule 2, Section 6) has not been complied with, although in practice farmers are still engaged in drawdown cultivation. Despite a commitnent at appraisal, the project made no effort to relocate PDFs to the command area where ithere is considerable demand for agricultural labor and where the land market will be better than in the vicinity of the submerging areas. 71. The size of house plots in rural RC's is smaller than the 400 sq. m. agreed to with the Bank and provided for in the DCA (Schedule 2, Part B: 6). At the Bank's insistence of limiting the definition of PDFs to nuclear families (DCA, Article 1, Section 1.02: j), GOK accepted to provide house sites to major children but (a) introduced a sliding scale, varying the size of house 13 Some RC's, established more recently, have been located close to towns, indicating that PDFs are now more aware, and the project more responsive to the fact that economic opportunities in the agricultural sector will be limited after submergence of their lands. 42  Appendix 1 Page 14 of 22 plots from 100-400 sq.m. depending on the PDF's landholding: as a result, 78% of PDFs are entitled to 100 sq.m. plots, 16% to 200 sq.m., 5% to 300 sq.m., and 2% to 400 sq.m.; and (b) limited the number of entitled major children to two per PDF: the total number of major children entitled to 100 sq.m. plots comes to 15,665 i.e. less than half the number of primary PDFs (32,673). The additional plots for children contributed on average 49 sq.m. per primary PDF. The net result is that the project actually distributed little more than half the land for housing to rural PDFs that they had agreed to at negotiations. On the other hand, the size of urban plots has been increased from 50 sq.m. to 72 sq.m. benefiting the 1,033 eligible PDFs of Bagalkot. 72. Smaller house plots in rural RC's pose problems for PDFs who no longer have a yard to tether their livestock or to use for farm work. They are seeking for additional space for cattle sheds, rick yards and storage of farm products. GOK has agreed to make additional provisions for PDFs with smaller house plots to facilitate continuance of the rural lifestyle. 73. In 1995, GOK introduced an ex-gratia House Construction Grant (HCG) of Rs. 22,000 per PDF. The HCG, not envisaged in the original R&R design, has proved to be the single biggest incentive encouraging thousands of PDFs to initiate construction of replacement houses in the RC' s. This enabled even those P[)Fs who had diverted the compensation received several years ago, when the RC's were not ready for habitation, to construct their homes. The pace of house construction has accelerated considerably even in RC's for villages not yet submerged and the quality of new housing is generally better than that at the submerging villages. The project has provided house sites to 60% of PDFs, and placed 76% of the money in joint accounts, much of it in the past one year. Over 20% of PDFs have constructed replacement houses and another 10% is well underway. This indicates that although people may not shift physically until faced with actual submergence, they are likely to construct houses when provided with entitlements, incentives and reasonable time to do so, Bagalkot affectees had not initiated construction when the project closed but some have now initiated construction. 74. Absence of linkage between R&R and construction schedules. Initially, the R&R Wing operated under CADA. Implementation was dismal, lagging way behind Almatti dam construction, resulting in suspension of the credit/loan in November 1992.14 The R&R Wing was moved from CADA to the ID and a General Manager appointed in charge. After intensive supervision and negotiations between GOK and the Bank, socio-economic surveys of affected villages were conducted to facilitate implementation, R&R entitlements were revised upward (LPG to Rs 60,000, IGS to Rs 20,000) in 1993 and implementation procedures streamnlined. Suspension was lifted in February 1994. By 1995, R&R implementation was again found to be lagging substantially behind dam construction. Disbursements for civil works were suspended a second time in September 1995 and was not lifted until October 1996, after receiving assurances from GOK that construction of the spillwvay at Almatti dam would not resume until resettlement for Phase II is complete. Despite this assurance, the linkage between dam construction and R&R was broken again: by March 1997, GOK had raised the spillway to its maximum height of 509.16 msl, without prior intimation to the Bank, although a significant part of resettlement was still outstanding at that time. 14 At that time, 90 percent of the compensation awards were being challenged in court as they were considered inadequate. After a delay of several years, courts awarded enhancements often exceeding 150 percent. As of 1996, compensation has been enhanced considerably through consent awards, bringing them virtually to market rates. 43  Appendix I Page 15 of 22 75. Substitution of cash for rehabilitation entitlements. GOK restricted its role to making funds available for LPG and IGS making the PDF entirely responsible for procurement of land and establishment of IGS. Except for a brief initial collaboration with an NGO (MYRADA), the project made virtually no effort to develop the capacity of PDFs to develop viable IGS. As in the case of LPG, where the facilitation function was disregarded by GOK, the project's role was limited to providing the funds earmarked for IGS. Scheme identification, skill acquisition, input supply and marketing were deemed to be the PDF's responsibility. As a result, rehabilitation outcomes, particularly at Almatti, continue to be unsatisfactory. Only 12% of PDFs entitled to LPG have been able to purchase land, while only 8% of the PDFs entitled to IGS have been able to utilize IGS. This is in contrast to utilization of HCG which, thanks to active encouragement by the project, had jumped to 29% for Almatti and 61% for Narayanpur by the closing date, and is growing rapidly. 76. Furthermore, the real value of the LPG (and IGS) hias declined over the life of the project. The DCA provides these entitlements as land units (1.5 ha irrigated land for LPG, and 0.5 ha irrigated land for IGS). During project implementation these were fixed as absolute rupee values, with one revision in 1993. The current value of LPG (Rs. 60,000) which is supposed to buy 1.5 ha of irrigated land is 20% of what GOK is currently paying to acquire 1.5 ha of irrigated land, and the real value of IGS has declined by the same proportion. The decline in LPG is offset by the six-fold enhancement in compensation rates for agricultural land but those entitled to IGS will not benefited from this increase. Utilization of Ex-gratia Entitlements in UKP (Phase II) No. of Joint Accounts Percent Utilized PDFs/PAFs /CAFs Opened (%) Almatti LPG 2,593 52% 12% Narayanpur LPG 1,293 47% 25% Total LPG 3,886 50% 16% Almatti IGS 8,157 24% 8% Narayanpur IGS 5,257 52% 17% Total IGS 13,414 35% 12% Almatti HCG 48,338 74% 29% Narayanpur HCG 7,843 86% 61% Total HCG 56,181 76% 33% 77. Submergence atAlmatti. Completion of Almatti spillway to 509 m. resulted in the submergence of an estimated 25,744 ha of land in 1997, compared to 31,890 ha notified. The submerged area is an increase of 12,705 ha over 1996. This included considerable crop loss: (a) submerging lands between 512-515 msl (13,830 ha) had been notified for acquisition but not paid for by the end of the project; as a result farmers planted kharif crops; (b) in some villages submergence exceeded even the notified area; and (c) two villages which were not in the submergence zone were affected by backwater. The crop loss will need to be compensated. As a principle, it is inappropriate for GOK to insist that farmers who are yet to be paid compensation leave their land unplanted. It is recommended that until such time as GOK pays PDFs the full compensation for assets acquired, they should be provided with a subsistence allowance or food rations. 44  Appendix I Page 16 of 22 78. Under Phase III, GOK's plans to install 15 m. radial gates at Almatti dam is expected to result in the potential submergence of a total of 157 villages and most of Bagalkot town, displacing over 400,000 people in all. This will involve acquisition of 45,000 ha of land beyond the 31,890 already notified. 79. Contingency Plan. Implementation of the plan for the 1997 monsoon went well. Preparations had been made for a 1:25 year flood, covering 110 villages. The 1997 monsoon was below average in the project area, higher rainfall in the upper catchment bringing in most of the flood. Peak inflow into Almatti was 383,000 cusecs (1:9 year flood) affecting 62 villages (38 villages fully, 24 partially). PDFs and movable property were rescued from submerging villages without any loss of life. Of the estimated 8,000 PDFs who had to be evacuated, roughly half have replacement homes while the rest are livinig in temporary shelters in the RC's. Many of them are now constructing homes on site. The project provided one month food ration and medical care in addition to the basic infrastructure already in place at the RC's. The Bank recommends that resettlement be phased to avoid the need for another contingency plan in the future. C. MAJOR FACTORS AFFECTING THE PROJECT Project Sustainability 80. Project sustainability is at stake if (a) construction quality of distribution network including FICs is not improved; (b) preventive periodical maintenance and repair of the infrastructure created (dam, gates, canal, distribution system, drains, roads, buildings) are not effectively carried out; (c) water management is not strictly monitored and RWS is not enforced; (d) drainage has not been provided in already water logged or potentially water logged areas; (e) land leveling is not done for and/or by the farmers; (f) FICs are not maintained by farmers; and (g) rehabilitation of PDFs is not linked to irrigation development in the command area. Performance of the Bank 81. Appraisal (a) The Bank underestimated the submergence area which would need to be acquired with Almatti crest at 509 m. Since Almatti has no gates for release of water below 509 m., flood water invariably flows above the spillway crest. As a result, with the crest at 509 m., 25.7 sq. km. was submerged, not 12.9 sq.km. as projected at appraisal. The Bank should have calculated area to be flooded not by elevation of dam crest but by elevation of water pool flowing over the crest. (b) The Bank should have realized average value of farmland to be flooded was higher than that of average rainfed farmland. (c) The Bank should have provided continuity between appraisal and negotiations, ensuring that key points were not missed. (d) The Bank should not have accepted absolute values of the rehabilitation entitlements for affected persons, without a clear provision for inflation adjustments. (e) Appraisal mission should have anticipated political imperatives may result in Almatti being raised to full elevation prematurely. 82. Supervision The project was supervised intensively. (a) Serious shortcomings in R&R were detected early and resulted in two suspensions, unfortunately, diverting attention from other components. As a result, O&M, water mranagement, training, and OFD works suffered. (b) Supervision of R&R over-emphasized relocation of affected families from the submergence area, ignoring the primary objective, restoration of PDF/PAF livelihoods. (c) The Bank did not follow 45  Appendix I Page 17of22 up on the GO, and Karnataka Resettlement Act, 1987, approved in 1994, which provided the legal basis to provide land-for-land to PDFs losing land. (d) Supervision of dam construction was not fully consistent with the legal agreement: disbursements were suspended twice because resettlement lagged behind dam construction but the link between dam height and irrigation development was not supervised. Performance of the Borrower 83. The Borrower also underestimated the submergence to be caused by raising Almatti spillway crest to 509 m. ID requisitioned land up to 512 m. for the reservoir (est. 18,600 ha; actual 27,544 ha submerged). 84. Factors subject to government control * Concern for the impending Krishna tribunal award revision, led to focus on Almatti Dam, impounding water and major canals, diverting attention and resources from minor but critical works (FICs, field drains and land shaping), resulting in lower on-farm benefits and increased waterlogging and salinization. * CADA financial and leadership weakness, plus weak links to ID, resulted in major deficiencies of CAD, WUAs, and their preparation for irrigation, land-shaping, fiedrainage and credit. When bank financing for land leveling failed, the government delay in guaranteeing CADA's Special Loan Account for 5 years, effectively stopping land leveling. - After legislative approval of the Karnataka Resettlement Act, 1987, Presidential approval was not obtained till 1994. Even after Presidential approval, GOK did not notify and apply the Resettlement Act to the project. 85. Factors subject to implementing agency control. Project implementation was affected due to: (a) belated attention to resettlement, and poor linkage between R&R and construction schedules resulting in avoidable suffering, cost over-runs and delays in the rest of the project; (b) inadequate institutional support for rehabilitation; (c) lack of follow up action on recommenidations made by consultants engaged by GOK; (cl) lack of attention to O&M, water management, and training; (e) Forest Department's plantings on reservoir margins on land acquired by Government but which, by agreement with World Bank, were to be leased to PDFs for drawdown cultivation; (f) CADA's failure to organize effective farmers' groups. 86. Construction quality on major contracts showed gradual improvement. However, quality of distribution system works, roads, and buildings is deficient. The Borrower paid least attention to O&M, OFD works, water management, and training during the project period. The Borrower appointed consultants under technical assistance component. However, follow up actions on the recommendations made by the consultants are not yet initiated. 87. The Borrower neglected to provide CADA with the human resources to carry out its agricultural, cooperative and engineering responsibilities; neglected to provide WALMI with human and financial resources to carry out its responsibilities, neglected to have Forest Department and Dry Land Development Boards concentrate resources in project/catchment area as planned; neglected to have Fisheries Department provide training and extension to PAF fishermen (Stocking was satisfactory). 46  Appendix I Page 18 of 22 Assessment of Outcome 88. The project's outcome with respect to infrastructure works (dam, canals, roads, buildings) is rated satisfactory. Howeveir, the outcome in terms of returns from the infrastructure developed under the project is rated unsatisfactory. That is because of uncertain sustainability of the project arising out of poor conditions of O&M, water management and OFD works. 89. The project's outcome on R&Rt is rated unsatisfactory. Submerging PDFs were not provided sufficient lead time after receipt: of full entitlements to complete house construction. The project virtually ignored the primary objective of the R&R component: restoration of livelihoods to pre-project levels: (a) support for iniplementation of the income generation schemes was negligible, and (b) no effort was made to implement the land-for-land scheme in the original design for which legislation was enacted in 1987, and GOI approval obtained in 1994. Although relocation of PDFs from the submergence area is satisfactory, the RC's have been established near the submerging villages without any consideration for the availability of replacement land or alternative livelihoods. Future Operations 90. The following actions are required to complete the project and to ensure its operation in such a way that project objectives are achieved: (a) completion of balance civil works including the outstanding dam safety works; (b) cornpletion of OFD works (land leveling and field drains); (c) preparation and implementation of effective POMs for dams and canal systems including annual water budgeting for improved water management on RWS principles; (d) improved O&M with adequate need-based funds; (e) estaiblishing properly manned and equipped MIS cell for effective management of infrastructure and water; (f) preparation and implementation of time bound action plan for drainage based on master plan prepared by consultants; (g) intensive training program on RWS and O&M; (h) establishment of WUAs and turnover of tertiary system for maintenance; (i) increase in and collection of water charges to induce farmers to save water and to alleviate Government's financial burden; (i) payment of outstanding land compensation to PDFs of Almatti; (j) re-design and implementation of schemes to restore livelihoods of PDFs/PAFs. The Operational Plan is attached as Annex-I. D. LESSONS LEARNED 91. The principal lessons identified by the mission are: (1) Failing to build the drainage component of an irrigation project is a great peril, especially where soils are underlain by bedrock containing soluble salts. (2) Because land shaping and field drains are critical for good irrigation in undulating terrain like that of the project area, Government must stand by its engagement to provide finance in the event that banks refuse to do so. (3) Before funding any irrigation system (existing or new), the Plan of Operation and Maintenance should be available for review at appraisal. Establishing or strengthening of the O&M organization with clear job descriptions and training should be an integral component of institutional development. 47  Appendix 1 Page 19 of 22 (4) When any new water management practice: (like RWS) is to be introduced, training programs for operational staff as well as farmers, including field training in other states where such system has been successfully introduced, should be chalked out at prior to appraisal. (5) The technical assistance component should specify the time limit for engaging various consultants and for follow up actions on consultant's recommendations to ensure that benefits of consultancy are available during the project period itself. (6) Rehabilitation entitlements should not be fixed as absolute currency values, without an explicit proviso for market price adjustments, and should be accompanied by institutional support for land purchase or employment promotiion. (7) Supervision should focus on project implementation as well as outcomes; performance monitoring should include input and output indicators. E. FOLLOW-UP 92. The mission will return to Washington and prepare a draft ICR in accordance with World Bank guidelines, which will be transmitted to the borrower (GOI) and GOK for comment. The draft will include the text of the Borrower's Completion Report, a draft of which was ready prior to arrival of the ICR mission and a revised version provided to the mission after the wrap-up meeting. 93. At the wrap-up meeting, GOK expressed an interest in obtaining Bank assistance to complete R&R and irrigation development in the command area to fully achieve the objectives of the project. The mission apprised GOK of the recent decentralization of country management to the field, and advised GOK to continue these discussions with the Country Director in New Delhi through DEA. 48  Appendix I Page 20 of 22 INDIA Upper Krishna 11 Irrigation Project Implementation Completion Report Mission's Aide Memoire Attachment 1: Operational Plan Government of Karnataka has reiterated its firm determination to complete Phase II of the Upper Krishna Program, which the Loan and Credit supported. As regards remaining investments in Phase II, Government of Karnataka intends to proceed as follows: Branch canals and distributaries. These facilities remain to be constructed to cover a remaining cultivable command area of 13,275 ha. Works are proceeding and should be completed within one year. Works are being financed by GOK with funds raised by KBJNL, executed by private contractors, and supervised by the Irrigation Department. Main and secondary drains. It was foreseen that these would be provided as part of the Phase 1I project. Under the project, Worlld Bank financed a Drainage Master Plan which spells out a drainage investment program of Rs 73 crores. This program is being reviewed by Government of Karnataka. Implementation will be taken up after the review. Field irrigation channels. FICs remain to be constructed on 42,211 ha of the Phase II command. During the project, ID was responsible for their construction but, in 1996, that responsibility was returned to CADA, which has an on-going FIC construction program financed, in part, by GOK/KBJNL. At the present rate, the remaining field channels should be completed within three years. Field drains were supposed to be constructed on about 44,400 ha of the Phase II command. They were constructed on about 20,297 ha and so remain to be constructed on about 24,103 ha. The Drainage Master Plan, which is under review, also spells out field drain requirements. CADA is presently responsible for field drain construction. GOK is examining alternate arrangements for completion of this backlog. Land shaping/leveling was to have been completed on about 116,000 ha of Phase II land and has been completed on only 8,800 ha during 1990-92 under CADA's fourth scheme. Virtually no land shaping has been done for five years at a slow pace. Future funding plans are yet to be formulated by GOK. Land acquisition. Land has been fully acquired for the 5,152 ha needed for RC's for Bagalkot, rural Almatti and Narayanpuir, the 25,658 ha submerged by Narayanpur reservoir, and 9,649 ha for canals and roads under Phase 11. The 18,060 ha, requisitioned by ID for Almatti under Phase II (up to 512 m) has been acqluired and paid for. Another 13,800 ha, between 512- 515 m. (7,684 ha of which was submerged in 1997) is in the final stages of acquisition; payment will be completed by December 1997. Acquisition of all the 615 structures at Bagalkot and 7,843 structures at Narayanpur included in Phase II have been completed. Of the 31,589 structures to be acquired at Almatti, 49  Appendix I Page 21 of 22 although notification has been completed, 40% (12,634 structures) have yet to be paid for. Commissioner (R&R) will continue to be responsible for payment of the balance compensation at Almatti and Narayanpur. This backlog is expected to be completed by November 1997. Resettlement centers. Of the 101 resettlement centers to be established at Narayanpur and Almatti, 79 have been established and another 16 are in an advanced stage of completion. Commissioner (R&R) will continue to be responsible for construction of these centers and for shifting PDFs who chose to relocate there. Completing implementation of this backlog is expected by December 1997. House plots. Of 57,214 PDFs entitled to house plots, 34,074 (60%) have already received them while 23,140 (40%) have not. Commissioner (R&R) will continue to be responsible for distribution of these house plots. Completing implementation of this backlog is expected by December 1997. Houses. Of 40,532 houses required by PDFs, 10,680 (26%) have been constructed within RCs, 1,885 (5%) have been constructed elsewhere, 7,056 (17%) are currently under construction, and 20,911 (52%) remain to be constructed. PDFs are responsible for the construction of their own houses. Completion of housing construction is expected by December 1998. Bagalkot town relocation and rehabilitation entitlements. Allocation of the 1,033 house plots needed under Phase II is substantially completed except for provision of 372 house plots (36%). However, construction of houses has only been initiated by a few families, that too after the closing date of the project. BTDA will continue to be responsible for distribution of the balance house plots. Allocation of house plots is expected to be completed by December 1997. Of the PDFs affected by Phase II, 169 are eligible for house construction grants. None of these grants had been provided by the closing date. With initiation of construction activity subsequently, provision of these grants is expected to be completed by March 1998. BTDA will continue to be responsible for delivery of these grants. Land purchase grants. Of 3,886 rural families entitled to land purchase grants, 638 (16%) have already received their grants and used them. The grants for another 1,315 families (34%) have been placed in joint accounts but not yet used. There is, therefore, a backlog of 1,933 families (50%) yet to receive their land purchase grants and 1,315 (34%) who have received their grants but not used them. Commissioner (R&R) will continue to be responsible for payment of the balance of these grants and for assisting PDFs in finding land and spending their grants. Completing implementation of this backlog is expected by December 1998 for Almatti, and March 1999 for Narayanpur. Income generating scheme grants. Of 13,414 rural families entitled to such grants, 1,598 (12%) have already received their grants and used them. The grants for another 3,088 families (23%) have been placed in joint accounts but not yelt used. There is, therefore, a backlog of 8,728 families (77%) yet to receive their income-generating-scheme grants and 3,088 (23%) who have received their grants but not used them. Commissioner (R&R) will continue to be responsible for payment of the balance of these grants and for assisting PDFs/PAFs in finding and investing in income-generating schemes, including obtaining bank financing. Completing implementation of this backlog is expected by December 1998 for Almatti, and March 1999 for Narayanpur, but will require intensive institutional support. 5U  Appendix I Page 22 of 22 House construction grants. Of thie 56,181 rural families entitled to house construction grants, 18,754 (33%) have already received their grants and are using them. The grants for another 23,804 (42.37%) have been placed in joint accounts but not yet used. Commissioner (R&R) will continue to be responsible for payment of the balance of these grants. Responsibility for utilization of HCG funcls in their respective joint accounts rests with the PDFs. Complete implementation of this package is expected by December 1998. BTDA is responsible for provision of HCG to Bagalkot PDFs. * * * * * * * As regards operation and maintenance of Phase 11 project works, Government of Karnataka intends to proceed as follows: Major irrigation works (dams, in am & branch canals, distributaries) will continue to be maintained and operated by the O&M Zone of the ID/KBJNL under the Chief Engineer (O&M). Adequate funding will be provided from the State budget and KBJNL borrowings. The Phase II system was designed to be operated acccrding to RWS principles, but it has not been so far. There are currently no plans for initiating ]RWS. The on/off system has been introduced for Rabi crops. Minor irrigation works (FICs, FDs and land shaping) will continue to be maintained and operated by farmers, guided as appropriate by CADA. As per guidelines issued by Under Secretary, Irrigation Department (CAD) on 24 May 1997, farmers on selected hydraulic units will be organized into water users cooperalive societies (WUCS), comprising at least 51% of the land holders and representing at least 51% of the area commanded by the hydraulic unit. Once the irrigation system on their hydraulic unit has been restored to proper working order, the WUCS will take over both operation and maintenance of their units, also buying canal water at the distributary from the ID/KBJNL and paying for that water. Of the 19 pilot distributaries selected in the May 1997 guidelines, five are in the UKP command. Once this participatory irrigation management (PIM) system is frilly functioning, O&M of minor irrigation works is expected to be very much improved. Works and operations will be fully financed and carried out by irrigators themselves. Agricultural support passes to the regular extension service of the Agricultural Department once the irrigation system for an area notified for irrigation is fully functional. Prior to that time, CADA provides supplemental support services, including advice on the transition from rainfed to irrigated farming, farmer training, organization of cooperatives, and appropriate applied agricultural research. Support from Kamataka Agricultural University (Dharwad) and WALMI is enlisted, as well as the support of the Indo-Dutch Program. Resettlement & Rehabilitation continues to be the responsibility of the Commissioner, R&R. On completion of the project, the RC's will be handed over to the Zilla Parishad for O&M of basic services. Anti-malaria program. Health I)epartment personnel will continue to operate this program with finance and under the supervision of KBJNL. 51  Appendix 2 Page 1 of 12 GOVERNMENT OF KARNATAKA UPPER KRISHNA (PHASE II) IRRIGATION PROJECT CREDIT NO. 2010-IN/LOAN 3050-IN APPENDIX 2: BORROWER'S EVALUATION REPORT 1. INTRODUCTION: 1.1 The Upper Krishna Project (UKP) has been conceptualised as a long termn development programme to irrigate parts of drought prone districts of Bijapur, Raichur and Gulbarga of northern Karnataka. UKP is a multipurpose project consisting of two reservoirs and network of canals. The main storage is at Almatti dam, a few Km. downstream of confluence of Ghataprabha river vvith the Krishna river. The river Krishna rises in Western ghats near Mahabaleshwar in Maharashtra state and flows across the Southern peninsula from West to East for a length of about 1392 Km through the states of Maharashtra, Karnataka and Andhra Pradesh. A lower dam situated at Narayanpur, a few km. downstream confluence of Malaprabha river with Krishna river, will serve as a diversion dam. Power generation is proposed below both the dams. The Krishna Water Dispute Tribunal (KWDT) adjudicated on sharing of Krishna river water between the three riparian states of Maharashtra, Karnataka and Andhra Pradesh with the final allocation to 700 TMC for Karnataka. In addition to the above, Karnataka is allowed to utilise the return flow of 34 TMC. aggregating to 734 TMC. GOK has allocated 173 TMC of water to UKP. This project has been taken up in two stages to utilise the allocated water. In stage I of the project, it is planned to utilise 119 TMC of water to irrigate an area of 4,25,000 ha. In Stage II, an additional 1,97,220 Ha. of land will be irrigated by utilizing 54 TMC of water. 1.2 The Stage I is taken in 3 phases, due to its vast area to be developed and also to pose the project for the external Assistance. 1.3 Phase-I of the Project consists construction of Narayanpur dam to full height, Almatti dam to partial height and canal net work from Narayanpur reservoir to irrigate an area of 1.05 lakh Ha.This Phase-I Project is completed under the World Bank Assistance, Credit No. 788-IN from 1979 to 1986 with total credit assistance of US $117.64 million (equivalent to Rs. 119 Crores) at March 1986. Total Irrigation Potential achieved is 1.09 lakh Ha.. 1.4 PHASE II OF UPPER KRISHNA PROJECT 1.4.1 After the implementation of Phase-I under World Ban]k Assistance from 1979 to 1986, it was decided to pose Phase-II projects also to World Bank assistance for creating infrastructures for irrigating an area of 1.45 Lakh Ha. and also for post Phase-I activities. 1.4.2 Accordingly, development credit agreement and Project agreement among International Association and International Bank for Reconstruction and Development, and Government of India and Government of Karnataka are signed on June 16, 1989 for implementation of the project. The Agreement has been declared effective from August 17, 1989. 1.5 THE ACTIVITIES INCLUDED UNDER PHASE-II ARE: (i) Raising of Almatti dam from elevation 500 M to 509.016 M in spillway (excluding gates). Completion of Left and Right Bank non overflow section to final elevation and fixing of embedded parts for erection of gates. 2  Appendix 2 Page 2 of 12 (ii) Completion of Indi Branch Canal (IBC) from 0 to 64 Km with distribution system, Mudbal Branch Canal (MBC) from 0 to 50, 80 Km, full length with distribution system, and distribution system under Shahpur Branch Canal. (iii) Land Shaping and land leveling for an area of about 1.16 Lakh Ha. (iv) Establishment of Water and Land Management Institute for training. 2. PROJECT COST: At appraisal, the Phase-IT Project is estimated to cost Rs. 7916.70 Millions ($ 542.2 Million equivalent); under the project the IDA credit is for SDR 119 Million ($ 160 Million equivalent) and totaling to $ 325 million or Rs. 4775 million. Due to considerable appreciation of SDR and US dollar against rupee value the loan is reduced from $ 165 million to $45 mrillion. Hence the total Assistance available would be $ 211 million or Rs. 618.00 Crores. 3. DISBURSEMENT: 3.1 As can be seen from the year-wise disbursement schedule given in table at 3.2, the disbursement was slow during initial stage of the project due to the fact that there was no smooth start of the project by procedural problems as per the World Bank norms. In the other years also the poor achievement in the disbursement is due to suspension of aid for other components of the projects viz. Dam and canal system for the poor implementation of Resettlement and Rehabilitation during the period Nov. 1992 to Feb. 12, 1994 and again, from Sept. 2, 95 to Oct. 18, 1996. 3.2 The year-wise disbursement programme agreed during the project and disbursement programme obtained are as under. Si. Finan- Year-wise programme Achievements No. cial -------------------------- --------- year As per App- After in US $ Rs. in raisal report reduc- millions Crores. in US $ million tion of loan I . 1989-90 13 18.00 -- -- 2. 1990-93 29 12.60 14.15 25.2041 (Cumulative up to end of 90-91) 3. 1991-92 48 12.70 12.64 33.561 4. 1992-93 63 22.90 20.12 56.4122 5. 1993-94 65 58.10 40.30 115.3246 6. 1994-95 61 46.00 42.348 133.1626 7. 1995-96 39 29.40 24.312 62.1400 8. 1996-97 7 5.30 20.89 90.4600 325 205.00 174.865 516.2600 53  Appendix 2 Page 3 of 12 4. PROJECT MONITORING: 4.1 The Upper Krishna Phase-II Project has been monitored at the project level and also by the state Government, at additional Chief Secretary level, periodically. Besides this, project is also monitored quarterly by the Central Water commission, New Delhi. 4.2 The World Bank Supervision Field Mission have visited the project areas every six month for review of the project implementation. The Engineer-in-Chief Cum Project coordinator was coordinating during the visit of World Bank team generally, for the whole project, particularly for the irrigation works. During the field visits pertaining to Rehabilitation and Resettlement activities the Commissioner for Rehabilitation and Resettlement and Land Acquisition Bagalkoli General Manager, Rehabilitation and Resettlement Bagalkot, were accompanying. The Mission's findings and recommendations on issues which need urgent attention were discussed in the Wrap-up meetings after the field visit at Government level. 5. PROJECT IMPLEMENTATION: This project was implemented mainly by five departments of Government of Kamataka as noted below. (1) Irrigation All Irrigation works and CADA Department works WALMI training. (2) Revenue Resettlement and Rehabilitation of the Project Department affected people, and also acquisition of land for Canals. (3) Housing & Urban Bagalkot Town Development Authority for Department relocation of Bagalkot town in new township. (4) Health Department Anti Malaria activities. (5) Forest Department Catchment Area Treatment of Almatti and Narayanpur Reservoir. 6. IRRIGATION WORKS: The cultivable command area to be developed under Phase-Il was estimated as 1,45,000 Ha. of potentially irrigable land within the UKP Stage-I, under Indi Branch Canal (from 0 to 64 Km), Mudbal Branch Canal (0 to 50.8 Km full length) and Shahpur Branch Canal (from Distributary No. 8 to 24). An Irrigation Potential of 1,23,260 Ha. has been achieved to end of June 1997. 6.1 RAISING OF ALMATTI DAM: (a) Right flank concrete blocks have been raised to full height. (b) Left flank blocks including earthen embankments are also raised to full height. The central overflow spillway is completed up to 509.016 m and the piers are expected ito be completed by 6/98. Excavation for power house is under progress and it is expected to be completed by 6/98. River sluice gates (6 Nos) have 54  Appendix 2 Page 4 of 12 been fabricated and brought to site and the erection will be completed during June 1998. Out of 26 gates embedded parts for 3 Nos of gates are already iristalled and the balance quantity have been fabricated but not installed. Installation of the balance quantity ol embedded parts will be completed by June 1998. Financial progress of Rs. 4243.61 lakhs has been achieved as against targeted cost of Rs.5989.90 Lakhs, thus 70.85 per cent progress has been achieved. 6.2 CANALS: 6.2 a) INDI BRANCH CANAL: It is targeted to provide irrigation facilities for the area covered from 0 to 64 Km (during Phase-II) out of total length of 174 Km of Indi Branch Canal. Branch Canal with its structures, distribution net work and micro net work has been completed in the reach 0-30 Km in all respects during September 1994. In the reach between 30 to 64 Km of Branch Canal, earth work and structures have been substantially completed. Lining and gates are expected to be completed by 6/98. In respect of distributary system Earth work, ILining, balance of 20 to 30% work is remaining and it is expected to be completed by November 97. Nearly 4000 structures out of 4146 have been completed. In respect of gates civil portion-of the works have been completed and the installation of 1417 gates are yet to be done and this task will be completed by the end of November 97. In respect of micronet work (FIC) 80% earth work and lining have been completed and balance work will be completed by November 97. There are totally 67,349 structures under the micronet work, out of which 10,000 have been completed and the remaining will be completed during November 97. The total financial progress achieved up to end of June 1997 is Rs.27,540 Lakhs against the Planned cost of Rs.37450 Lakhs, thus achieving 73.54 percent progress. An irrigation potential of 27,250 Ha. has been created against contemplated target of 60, 693 Ha. under Indi Branch Canal from 0 to 64 Km taken up under Phase-II. 6.2 B) MUDBAL BRANCH CANAL The total length of Mudbal Branch Canal is 50.80 Km. From 0 to 39 Km works have been entrusted to 3 different agencies in three slices. i) SLICE-I KM 0 TO 18 & DISTRIBUTARIES 1 TO 8 (MB-01 - 01 - 01). All the works under Branch, Distributary System and micronet works are completed. 55  Appendix 2 Page 5 of 12 ii) SLICE-II -- KM 18-TO 32 AND DISTRIBUTARY 9 TO 14 (MB-0 1-02). Earthwork, Lining structures and gates have been complained on 13ranch Canal. Under distributary system, earthwork, Lining and structures are almost completed. In case of micro net work, earth work, lining (8%), is remaining and it is expected to be completed by July 97. iii) SLICE-III KM 32 TO 39 AND DISTRIBUTARY NO.15 TO 17 (MB-01-03)- Under this slice all the items of works on Branch Distributaries ancl micronet work are completed. iv) MBC 39 TO 50.80 KM AND DISTRIBUTARY 23 (MB-02-CII /1) Under this packages except Lining all the of work have been substantially completed. The lining workwill be completed during December 1997. v) Distributary numbers 19 to 22 B - The works have been almost completed. vi) DISTRIBUTARY NO. 24 AND 25: Earthwork has almost completed. Balance quantity in lining and structures will be completed by September 1997, where as in Branch distributary 1 and 3 of distributary No.26 work has completed. In respect of micronet work of the above Branch distributaries nearly 27% of earth work and lining is remaining to be completed. The total financial progress achieved is Rs.14396.15 Lakhs as against a targeted cost of Rs.9573.71 Lakhs, thus achieving 150.37% of financial progress. An Irrigation potential of 38657 Ha has been created as against ICA of 44,971 Ha. 6. 2 c) SHAHPUR BRANCH CANAL. Almost all the packages are completed. 6.3 a) AYACUT-ROADS. Out of targeted for restructured 627 Km of Ayacut Roads in the command area of Phase-II Mudbal Branch Canal, Indi Branch Canal and Shahpur Branch Canal area, 617 Km length of, Ayacut Roads have been completed, thus achieving 98.4-0 percent of the target. The remaining 10 Km length of Roads will be completed by November 1997. 6.3 b) SERVICE ROADS. The table given below depicts the physical and Financial targets and achievements in respect of Indi Branch Canal and Mudbal Branch Canal. 56  Appendix 2 Page 6 of 12 SI. Name of Physical in Km. Financial Progress / Target No. Canal Target Achievement Rs. (Million) Main Distri- Total Main Distri- Total Canal butary Canal butary 1. IBC 64 621.26 685.26 62.60 504.38 566.98 275.40 /374.5 2. MBC 50.80 165.67 216.47 45.66 163.83 209.49 72.623 /74.824 Total 114.80 786.93 901.73 108.26 668.21 776.47 348.623 /449.324 6.4 BUILDINGS:- Buildings, both residential and non-residential have been constructed for WALMI: Campus at Dharwad, Almatti, Bheemarayangudi, Chigahall i, Aurad, Rampur and Almel under different packages. 6.4.1 BUILDINGS FOR WALMI CAMPUS AT DHARWAD Residential buildings at WALMI Camlpus have been tackled under WL-02 package. They are substantially completed. The balance work will be completed by July 97. The financial progress achieved is Rs. 721.00 Lakhs against targeted amount of Rs. 766 Lakhs. Thus progress achieved is 94% of target. Non residential buildings at WALMI Campus have been taken up under WL-01 package. Earth work is completed and masonry, concrete items are under progress. Progress achieved under these items is about 25%. The balance works will be completed by July 97. The financial progress achieved is Rs.558 Lakhs as against targeted amount of Rs.682 Lakhs thus achieving progress of 82% of the target. 6.4.2 BUILDINGS AT RAMPUR AND ALMEL At Rampur Campus 44 residential, 4 number of non-residential buildings have taken up and completed and at Almel 25 numbers of residential buildings have taken up and completed. The total financial progress achieved is Rs. 552.90 Lakhs as against targeted cost of Rs. 601.40 Lakhs, thus achieving a 91.94%. 6.4.3 BUILDINGS AT BHEEMARAYADNGUDI, CHIGARAHALLI AND AURAD All the buildings taken up under World Bank Assistance at Bheemarayanagudi, Chigarahalli and Aurad are completed by incurring an expenditure of Rs. 835.44 Lakhs. 7. WATER USERS ASSOCIATION- During the year 1990 to 1992, 50 numbers of-Water Users Associations were registered covering an area of 23,162 ha. 57  Appendix 2 Page 7 of 12 8. MALARIA CONTROL: The Department of Health (DOH) has established 4 Malaria units stationed at Almatti, Bheemarayanagudi, Kembhavi and Narayanpur in the UKP command area. These units are headed by Health Officer under the overall control of Senior Healtlh Officer Class-I, stationed at Almatti. These four Anti Malaria units are fully devoted an intensive Anti-Malaria Campaign in the Project area. 9. DRAINAGE During the period from 1989-90 to 1993-94 Physical achievements to an extent of 20297.13 Ha. has been achieved incurring an expenditure of Rs. 108.32 Lakhs for construction drains and seepage drains for the area affected by water logging on NLBC in Kodaikal village lying in the command areas, and also construction of field drains for the drainage affected areas in the command of other distributaries of Narayanpur Left Bank Canal and Shahpur Branch. M/s Consulting Engineering Service, New Delhi consultants has been hired for preparation of Master drainage Plans has submitted the final report for providing drainage system in the command area of Stage-I; which is being reviewed. 10. RESETTLEMENT AND REHABILITATION. Due to construction of Almatti reservoir total of 158 villages will come under submergence. During Phase-1l i.e., when the crest level of Almatti damages raised to 509.016m, 95 villages will come under submergence. For resettlement of 95 villages (Physical relocation 68 Rehabilitation centers are proposed. Out of 95 villages 54 are fully submerging for which Rehabilitation Centers are ready and the Rehabilitation Centers for the remaining 41 villages are in advanced stage of progress. Out of 68 Rehabilitation Centers, 50 Rehabilitation Centers are completed in all respects by July 31, 1997 and the remaining 18 Rehabilitation Centers will be ready during December 1997. The expenditure incurred for providing infrastructure/ civic amenities in Rehabilitation Centers up to end of July 31 is Rs. 2480 Lakhs as a target of Rs.4000 Lakhs. The total number of house plots to be allocated to PDFs (including Primary PDFs and Adult sons/ unmarried daughters) are 48338 numbers. An amount of Rs.9624.34 Lakhs was drawn up to July 97 for 43747 number of PDFs and actual joint accounts opened are 35782. The number of PDFs utilising the entitlement as on July 31, 1997 are 14459. Out of which 8248 PDFs have completed their houses and remaining 6211 are under progress. The remaining PDFs are expected to be completed by December 1998. The number of PDFs entitled to land purchase grants as per the Category-I are 2593 numbers. An amount of Rs. 1096.53 Lakhs has been drawn for 1992 PDFs and Joint accounts are opened for 1345 numbers. The number of PDFs utilising entitlement as on July 311, 1997 are 325 numbers only. The likely completion date of utilisation target is December 1998. The total number of PDFs entitled to income generating schemes under category II, III and IV are 8157. An amount of 623.90 Lakhs has been drawn for 3766 PDFs and Joint accounts opened are for 1939 PDFs. The total number of PDFs utilising entitlements as on July 31, 97 are 694 numbers. The likely date of utilisation is December 1998. 58  Appendix 2 Page 8 of 12 REHABILITATION & RESETTLEMENT FOR NARAYANPUR RESERVOIR. Under Narayanpur Reservoir the number of PDFs entitled for land purchase group are 1293. An amount of Rs. 370.10 Lakhs has been drawn for 626 PDFs and kept in joint account for 624 numbers. The number of PDFs utilising entitlement as June :30, 1997 are 329 and likely date of utilisation of target is March 1999. Under income generating groups category II, III and IV the number of PDFs involved are 5247. An amount of Rs. 380.05 Lakhs has been drawn for :2933 PDFs and joint account is opened for 2776 PDFs. The total number of PDFs utilised entitlement as June 30, 97 are 908 PDFs likely date of utilisation target is March 1999. The total number of PDFs entitled for house plots and lhouse construction grants are 7950. An amount of Rs. 1749 Lakhs has been drawn for 7950 and joint account is opened for 7936. The number of PDFs utilising entitlement as an June 30, 1997 are 4976, likely date of utilisation target is March 1999. 10.1 Details of land required and acquired for different purpose and the cost aspects are as under: Si. Particulars Land Land Total No. r equired acquired cost in Ha. in Ha. Rs. Lakhs i . Narayanpur Reservoir Submergence 25658 25658 4374.60 2. Almatti Reservoir Submergence 76230 18883 32185.40 3. Land forCanals 31610 15186 25892.00 4. Land for Roads 4270 1409 2402.58 5. Land for Rehabili- tation Centres 6815 5152 8784.39 11. BAGALKOT TOWN DEVELOPMENT AUTHORITY. The following project component have been completed. (i) Peripheral road (7.571 Krn). (ii) Construction of primary school and 6 Nursery Schools. (iii) Electrification works. (iv) Construction of E.L.S.R. (v) Gravity main pipe line for GLSR to ESR. (vi) Water supply distribution system. (vii) Construction of 10 bedded hospital. (viii) Police Outpost. (ix) Bus shelter. The following works are under various stages of progress. (i) U.G.D. facilities (66.66%) (ii) Improvement to Bagalkot Muchakhandi Road (28.67%) 59  Appendix 2 Page 9 of 12 (iii) Secondary School (90%) (iv) Local Market (50%) (v) Photo type houses 52 Nos. (78.9%) Construction of park and Branch Post office is yet to be taken up. 12. CATCHMENT AREA TREATMENT OF ALMATTI AND NARAYANPUR RESERVOIR It is proposed to take up 6584.34 Ha. of afforestation and 80 Lakh of seedlings at an estimated cost of Rs. 1000 Lakhs during the period from 1992-93 to 1995-96, to coincide with the Stage-I, Phase II of UKP. 12.2 One Forest Division with 46 supporting staff has been created and is in operation since June 1994. The Physical progress of works of afforestation is about 2604 Ha. and 21.245 Lakhs seedlings incurring an expenditure of Rs. 371.834 Lakhs. 13. TRAINING. The Water and Land Management Institute (WALMI) at Dharwad was established for imparting instructions, training and conducting research in water management and land development for Irrigation and Agriculture. Training is imparted mainly through guest facility in borrowed premises not only in Dharwad proper, but also outside. At present WALMI Dharwad chiefly focuses on: (i) Training under World Bank aided National Water Managernent Project - Karnataka. (ii) Training under U5 AID assisted Water resources Management and training project. (iii) Training under World bank aided UKP Stage-I, Phase-Il. Normally, these training will be given to civil Engineering graduates, Agriculture Officials, Cooperative officials, Administration officials and other supporting service personnel. So far 432 Nos. of training courses were conducted for the Agricultural, Irrigation officials and farmers and 13,879 number of persons have been trained since 1989-90 up to end of June 1997. 14. EQUIPMENT AND VEHICLES. 38 Photo copiers (Photo copiers A-3 size 13 Nos. and plain copiers) size to size and 25 Nos under Packer E & V -2) have procured under World Bank assistance at a total cost of Rs. 44,55,464/- only, with free maintenance during warranty period of 2 years. These machines are procured from M/s Modi Xerox Limited, Hyderabad and installed in different offices in UKP area dluring the period Feb. 1993 to July 1993. Four school buses have been procured under World Bank assistance at a total cost of Rs. 19.98 Lakhs. 15. STUDIES The Project Agreement provides to carry out the important studies by hiring consultancy services for i) Planning, ii) Operation and maintenance, iii) Monitoring and evaluation and iv) Contract Administration. The present status of the studies so far done is as below. 60  Appendix 2 Page 10 of 12 15.1 CONSULTANCY SERVICES FOR FEASIBILITY STUDIES FOR FUTURE DEVELOPMENT IN UKP. Feasibility studies for future development of UKP have been entrusted to M/s. CES, New Delhi at a cost of Rs. 94.70 lakhs, out of which Rs. 89.00 Lakhs have been spent and the same has been reimbursed. 15.2 ESTABLISHMENT OF MANAGEMENT INFORMATION SYSTEM IN UKP. (a) The Management Information System (MIS) for UK Phase-II Irrigation Project was established in UKP with the Aid from the World Bank. The consultancy service contract for establishing MIS in UKP was entrusted to Sri Jayachamarajendra College oi Engineering (SJCE) Mysore (now JSS Consultants). The period of consultancy was 12 months commencing from I st January 1992 at a cost of Rs. 35.00 Lakhs. (b) Due to delay in the procurement of hardware and the associated system and also the delay in positioning computer personnel such as system analyst software Engineer/Programmer, extension of consultancy services became inevitable. Concurrence of the World Bank was obtained for extension of MIS consultancy contract for six months at an additional cost of Rs. 11.50 Lakhs. this contract was signed on February 24, 1994. (c) Another consultancy service contract agreement for "Transfer of Technology and Maintenance of the UKP MIS Software" between UKP and J.S.S. Consultants was signed on Sept. 26, 1994. During the consultnacy period M/s J.S.S. Consultants have developed 9 modules and the same have been assigned to the Zonal/Unit Offices for implementation. These modules developed by J.S.S. Consultants were not utilised to the full extent due to shortage of trained, dedicated Computer Personnel, non availability of data, lack of feed back and due to shortage of Computers. During the consultancy period there were frequent changes in the programmers from the Consultants side, which may be due to some of the ambitious MIS professionals Job-hopping to get higher salaries and also pirating among organisations as they attempt to hire staff away from each other. There were Organisational problems, such as avoidance behavior which is most common, associated with System problems and the failure of user's participation with system design teams. At present all the 22 Nos. (PC - AT 286 and 386) and 2 net servers (PC AT 386) are being extensively utilised for ports. Recently some computer programmers and Junior System Analyst have been recruited on contact basis and deployed in each zones. With the induction of some more pentium computers, we hope to develop the MIS in the Project. So far Rs. 159.06 Lakhs has been utilised against planned cost of Rs. 160.81 Lakhs; which includes procurement of Computers and peripherals. T[he balance cost of Rs. 1.75 Lakhs is due to be paid to the consultants which happens to be 5% original MIS contract of Rs. 35 Lakhs to be released after getting approval from the Govemment. 15.3 BASELINE SOCIO ECONOMIC BENCH MARK STUDIES In order to group the PDF's of submerging villages under Almatti and Narayanpur reservoir and in the UKP Phase-II command area as per the 5 categories of R&R policies issued vide G.O. No. RD 21 REH 94 (P) dated 15-5-1995 and to extend the benefits to them, the Socio Economic Surveys are entrusted to the different agencies. These are mentioned below. 61  Appendix 2 Page 11 of 12 Si. Name of work Name of Consul- Contract Expenditure Whether final No. tancy amount up to 6/97 report received Rs. Lakhs 1. Survey work in respect M/s Management 3.60 Expenditure This report to be of 8 villages coming Consultancy details to be furnished by GM under Almatti reservoir Services furnished by R&R and a PCAO report on the 2. -do- 12 villages ISRD Dharwad 7.89 utility of the Consultant's 3. -do- 21 villages BEC Bagalkot 9.39 report to be furnished 4. Survey work in respect M/s OM Consultant 9.60 respect of 4 I villages Bangalore coming under Narayan- pur Reservoir 5. Survey work in respect Administrative 9.68 of 205 villages coming Staff College of under command area. India, Hyderabad 6. Survey work in respect Command Area 21.07 of 54 villages coming studies & Irrigation under Almatti Management Reservoir Bangalore The Commissioner (R&R LAQ) has taken action for extencling benefits as per the survey reports, in accordance with R&R policies. 15.4 TELECOMMUNICATION WORK STUDIES IN UKP. This study has been entrusted to M/s Telecommunication Consultants India Limited at a cost of Rs. 13.70 Lakhs; out of which Rs. 3.00 Lakhs has been spent. It was proposed to setup 60 wireless stations, out of which 52 wireless stations have been setup and the remaining work will be completed by March 1999. 15.5 PHOTO MAPPING OF COMMAND AREA IN UKP: Aerial survey and Photo mapping job was entrusted to Director General, Survey of India. The contract amount was Rs. 414.00 Lakhs out of which Rs. 390.00 Lakhs has been spent and Rs. 340 Lakhs has been reimbursed. 15.6 MASTER DRAINAGE PLAN OF UKP STAGE I. This job has been entrusted to M/s. Consulting Engineering Service New Delhi at a cost of Rs. 93.05 Lakhs, out of which Rs. 20.15 Lakhs has been spent and the same has been reimbursed. The Master drainage project reports have already submitted by the Consultants and it is being reviewed by the CADA authorities. 62  Appendix 2 Page 12 of 12 15.7 INTEGRATED RESERVOIR OPERATION STUDIES This study has been entrusted to Indian Institute of Science Bangalore at a cost of Rs. 7.33 Lakhs. This study has been completed, reports received, and Rs.7.33 Lakhs been spent and the same is reimbursed. 16. FINANCIAL PROGRAMME FOR BALANCE WORKS. The balance works of UKP Phase-I1 under Irrigation components is proposed to be completed by June 1998, and the settlement and Rehabilitation works are proposed to be completed during December 1998 for Almatti Dam and March 1999 for NarayanpuLr Dam. 17. PERFORMANCE OF THE BORROWER 17.1 The progress in the following components of U.K. Stage-I Phase-II project is almost completed and there is substantial overall improvement in the construction quality (except WALMI Buildings at Dharwad). (i) Raising of Almatti Dam. (ii) Branch and Distributaries of IEC, MBC and SBC (iii) Ayacut Roads. (iv) Buildings. (v) R&R activities. The balance works will be completed by the Irrigation DepartmentlKrishna Bhagya Jala Nigam Limited within a span of one year. 17.2 There is no appreciable progress in the following components/studies. (i) Water Users Association. (ii) MIS (iii) Telecommunication Network (iv) Photo Mapping of Command Area. (v) Field Irrigation Channel. 17.3 There is a very little progress in respect of drainage and there is no progress in land levelling. 17.4 Even though extensive Anti-Malaria measures have been taken, the menace of Malaria still persists and dominates in the project area. 18. PERFORMANCE OF THE BANKERS. The performance of the World Bank in reimbursement of claims was satisfactory except during the period of Aid suspension. The Government of Karnataka express it-s appreciation for the excellent guidance/ suggestions given by the BANK MISSION during their field visits. 63  Appendix 3 Page I of 11 IMPLEMENTATION COMPLETION REPORT INDIA UPPER KRISHNA (PHASE II) IRRIGATION PROJECT (Cr. 2010-IN / Ln. 3050-IN) APPENDIX - 3: IRRIGATION COMPONENT A. INTRODUCTION Achievement of Project Objectives According to the SAR, the main objective of the irrigation component was to assist GOK in increasing agricultural production, income and direct employment opportunities for some 100,000 families and for a larger number of indirect beneficiaries through expansion of irrigation by some 150,000 ha in the state's drought-prone north region. In addition to R&R objectives and the anti-malaria campaign, which are discussed elsewhere, the project also aimed at strengthening Karnataka's technical and managerial skills in project management and the planning, design, construction and operation and maintenance of irrigation projects. In physical and financial terms, the targets fixed for irrigation infrastructure have been partially achieved. Construction quality is mixed while O&M is unsatisfactory. Though major works (dam and branch canals) showed some improvement, other relatively small but important components (distribution system, FICs, roads, buildings) continued to suffer in quality, thereby affecting efficiency of the water delivery system and sustainability of the infrastructure developed under the project. Furthermore, the progress in land shaping and field drains (under CADA's jurisdiction), which have a direct and significant impact on agricultural production and sustainability of outcomes, has been very poor. The objective of strengthening Karnataka's technical and managerial skills in project management, planning, design, construction and O&M of irrigation projects has not been achieved. Contract management governing project implementation and water management governing agricultural production as well as environmental aspects have not shown any significant improvement. The canal system under Phase II has been designed to be operated according to Rotational Water Supply (RWS) principles. In actual practice, RWS is not being applied. In respect of institutional development, a separate O&M Zone under a Chief Engineer has been set up during the project period. However, in the absence of project specific Plan of Operation and Maintenance (POM), lack of continuity of key staff and their training in O&M, the project has not been effective in improving O&M. The 64  Appendix 3 Page 2 of 11 infrastructure for WALMI has been created, but training at WALMI has not made any significant progress due to lack of resources (faculty and funds), very frequent turnover of Directors and lack of response from the field offices. Technical Assistance has also not had significant impact due to lack of follow-up on consultants' recommendations. Despite assistance by MIS consultants, neither ID nor CADA are using MIS for effective water management and management of the vast infrastructure created under the project. Only the R&R Wing has managed to utilize the MIS effectively. Project Components The major components under Irrigation were: (1) Raising of Almatti Dani; (2) Completion the distribution system of the Shahpur Branch Canal (SBC); (3) Construction of a major portion of the Mudbal Branch Canal (MBC) together with associated distributaries; (4) Construction of an initial part of the Indi Branch Canal (IBC) together with associated distributaries; (5) Construction of field channels to serve about 150,000 ha, 2,000 ha under Phase I and 148,000 ha under Phase II; (6) Improvement of main and secondary drains in the Project Area and the construction of field drains in about 30% of the Project Area to facilitate removal of excess rain and irrigation water from such areas; (7) Improvement and construction of all-weather roads in the Shahpur, Mudbal and Indi Branch comnmand areas; (8) On-farm development including land shaping, farm irrigation and farm drainage for about 116,000 ha in Phase I and Project Areas; (9) Establishment of a Water and Land Management Institute (WALMI) near Dharwad to provide training mainly to staff of Irrigation and Agriculture Departments in subjects relevant to irrigated agriculture including land shaping, crop water relationships, irrigation management and monitoring of irrigation; and establishment and strengthening of Project training centers for training of canal operators and farmers; (10) Technical Assistance and studies. B. MISSION'S FINDINGS Project Implementation Irrigation Works Almatti Dam. The work included (a) raising the spillway from an elevation of 500 m (Phase I status) to 509 m; (b) construction of piers to a final elevation of 528.76 m; 65  Appendix 3 Page 3 of II (c) provision of anchors and embedded metal parts for the future installation of radial gates; (d) raising of the left embankment to the final elevation of 528.76 m and partial completion of the right embankment; and (e) construction of a road bridge over the spillway section. As of June 30, 1997, the spillway has been raised to its crest elevation of 509.016 m; non-overflow dam portions on both the banks have been raised to final elevation of 528.76 m; the piers are partially raised; and embedded parts for 3 out of 26 gates have been erected. The work of curtain grouting and drainage holes which is a high priority for dam safety has made insignificant progress so far. The balance works which include curtain grouting and drainage holes, erection of embedded parts for remaining 23 gates, erection of 6 river sluice gates, raising the piers to final elevation, and construction of spillway bridge, are expected to be completed by June 1998. Repairs to the damaged stilling basin below the spillway and impermeabilisation of upstream face of the dam are overdue. These emergency works have a direct bearing on dam safety but are still held up by a prolonged approval process. These works are scheduled to be completed by June 1998. That will be possible only if the agencies for these specialized jobs are contracted by December 1997. Two important studies related to (a) hydrology (review of design flood, back water studies, reservoir operation and flood warning system) and (b) structural design of stilling basin (hydraulic design of the basin recently reviewed by KERS) are seriously lagging behind and should be completed on priority basis so that timely follow up action can be taken. The Dam Safety Review Panel (DSRP) was reconstituted in May 1995. It has held four meetings since then. The reconstituted DSRP has been providing useful inputs for safety of the two dams. However, follow up actions on DSRP's recommendations are much delayed. Almatti Dam and R&R Linkage. Raising of the spillway is closely linked with R&R activities. In an effort to avoid unnecessary R&R, as well as premature investment in the dam, it was agreed (PA, Schedule 1, para. 1, p. 7) that no construction on Almatti Dam take place until the Borrower could demonstrate that water from Almatti Reservoir would be needed within three years to irrigate lands that would have been notified for irrigation by then. The area that can be irrigated from Narayanpur Reservoir alone is 185,000 ha; from Narayanpur Reservoir plus Almatti Reservoir at elevation 509 M, 250,000 ha. The area notified for irrigation as of June 30, 1997 was 93,514 ha. The average annual rate at which the Borrower brought new irrigated areas to completion over the last seven years was 13,359 ha. The Borrower did not attempt to establish that Almatti Reservoir water would be needed within three years, nor would it have been possible to do so. Nevertheless, the Borrower did raise the spillway of Almatti Dam, sometimes with the approval of Bank supervision missions, at other times despite written assurances to the Bank that it would not do so. The Bank financed these works. 66  Appendix 3 Page 4 of 11 Therefore, the linkage between R&R and Almatti construction was not maintained during dam implementation. Spillway raising went ahead, except during the Credit suspension periods, irrespective of readiness on the R&R front. As a result, contingency plans for emergency evacuation, which could have been avoided had the proper linkage between the two activities been maintained, had to be undertaken. Major R&R and dam- construction expenses, which could have been avoided until much later, were incurred. Projections made for villages in the reservoir area likely to be affected during 1997 floods varied widely from actually affected villages. The backwater studies and the warning system should be reviewed considering appropriate spillway discharge coefficient to be adopted in consultation with KERS, actual observed flood data at nearest gauge sites, travel time from the nearest flood warning station to the reservoir (travel time within the reservoir would be very short), and actual back water levels recorded during the 1997 floods. Shahpur Branch Canal. This canal system which was partially completed under Phase I was to be fully completed under Phase II. The Phase II works included distributaries 8 and 9A through 24 and remainder of the distribution network below distributaries completed in Phase I. All works under Phase II for SBC, including Field Irrigation Canals (FICs) are complete. Measuring devices have been provided at the head of some of the distributaries and will be provided shortly for the remaining. All distributaries except Distributary 21 have been handed over to O&M Zone. Distributary 21 was physically completed in March 1997 and is in the process of being handed over to the O&M Zone. The irrigation potential created under SBC is 44,694 ha (revised) against 50,171 ha estimated earlier. ndi Branch Canal. The IBC under Phase II included construction of first 64 km of this branch canal with complete distribution system in that length (20 distributaries and their networks). The irrigation potential of the canal completed by June 1997 is 38,802 ha., 64% of the designed potential of 60,693 ha under Phase II. The canal works including the distribution system and FICs for the first 30 km of the IBC have been completed and handed over to the O&M Zone. The earthwork and structures between km 30 and 64 of the branch canal are nearly complete, while the lining is about 65 % complete. There are five major aqueduct structures in this reach which are also almost complete. The distribution systems with off-takes from IBC km 30-64 are also nearing completion (earthwork about 80% and lining about 70% complete). FICs are almost 85% complete. Installation of measuring devices at head of distributaries is in progress. All balance works are expected to be completed by June 1998. Mudbal Branch Canal. The project included construction of 50.8 km of branch canal and complete distribution system (30 distributaries and network thereunder). 67  Appendix 3 Page 5 of 11 The branch canal up to 18 km along with its distribution system was completed in June 1995 and has been handed over to O&M Zone. The branch canal from 18 km to 50.8 km is nearing completion. Lining in about 4 km length is remaining. A major aqueduct structure at 39 km is almost complete. About 85% length of distributaries and 92% length of FICs are completed. Irrigation potential of 38,657 ha has been created against the total CCA of 44971 ha. All remaining works are expected to be completed by December 1997. Drainage. The Phase II project envisaged improving main and secondary drains in the entire project area and construction of field drains in about 45,000 ha (30% of the project area). During the period 1989-90 to 1993-94 field drains were constructed in about 20,300 ha. No further progress is reported thereafter"5. Also no progress is reported on improving main and secondary drains in the project area. Poor water management and lack of adequate drainage has created serious problems in the command area. Lands of about 70 villages are reported to have been affected by waterlogging. The consultants engaged to prepare the Drainage Master Plan for UKP command have recently furnished their final report. The estimated cost of the drainage project is about Rs. 725 million. CADA has yet to prepare an action plan to implement the proposed drainage project. Land Levelling. The project envisaged land shaping and land levelling in the project area to be carried out by contractors and farmers with institutional credit. Land levelling for 8,820 ha in Phase II areas was done till 1992; thereafter the activity came to a halt because of institutional financing problems. As per the Project Agreement (Schedule 2, Section 13) GOK was bound to making alternative arrangements for financing land levelling works in the event that institutional credit were not available to farmers. GOK has neglected to institute any alternative financing scheme for farmers, adversely affecting their ability to undertake land levelling. Due to the rolling topography of the command area, land levelling assumes great importance. The FICs are designed and constructed assurning that land levelling has been or will be done. The absence of land levelling is clearly visible in the field, some farmers being compelled to make unauthorized cuts on the laterals or FICs to draw their share of water. This situation has seriously affected the system physically as well as in terms of water use efficiency. CADA belatedly prepared a new credit scheme to address this problem but is was turned down by GOK. O&M. The O&M Wing (headed by a Superintending Engineer), which was earlier attached to CADA, was transferred to Irrigation Department and placed under CE (Dam). A separate post of CE (O&M) was created later to head the now-upgraded O&M Zone. Completed works are now being handed over to the O&M Zone after joint I5 In May 1998, the Borrower has reported that 25,120 ha. have been provided with drainage. If so, the additional drainage must have been achieved subsequent to the Bank's ICR mission in September 1997. Construction of field drains was not evident or reported to Bank missions since 1994. 68  Appendix 3 Page 6 of 11 inspection of the works with the respective construction Zones. This institutional arrangement was designed to improve coordination between construction and O&M. It has, however, not improved operation and maintenance. There are frequent changes in the post of CE (O&M); the post is vacant at present. Continuity in such posts is essential. Though a Master Plan for O&M has been prepared by a consultant firm during the early stage of the project, the consultant's recommendations have not been implemented. Project specific Plans of Operation and Maintenance (POM) have not been developed for dam and canals so far. Training of personnel in O&M has not been given due attention. Procedures for periodic inspections have not been laid down and, even when they exist, are not followed. Job responsibilities are not clearly defined. Procedures for monitoring O&M activities are missing. No clear picture is available to compare O&M (works) expenditure per ha of command area vvith corresponding laid down norms. Field visits indicate that poor O&M is leading to rapid deterioration of the irrigation system. The gates at Naravanpur dam (spillway and canal headworks) which serves all canal systems are badly leaking due to damaged seals. The gate position indicators are not functioning. Inspection of the distribution system is difficult if not impossible since the service roads of clistributaries are not jeepable at many locations and not even walkable at some locations because of damaged roads or very thick and thorny jungle growth on service roads. The lining is damaged at several locations and gates at many locations are either damaged or missing. Canal side plantation is absent. FICs are supposed to be maintained by the farmers but are also not in good shape. Immediate corrective actions (institutional, procedural and financial) are required to make the O&M organization effective and to restore the system to an acceptable condition. Water Management. Since water is available in excess of requirement at this stage of project development, water management has not received due attention with the result that water application is far in excess of crop requirement. Irrigation intensity has gone up to 152.5% against design intensity of 108% as reported in the Drainage Master Plan recently submitted by consultants. This situation is further aggravated by the absence of land levelling and adequate drainage, and has led to serious waterlogging problems at this early stage of the project. There is an immediate necessity to maintain water accounts for effective water management. Simultaneously, water accounts need to be audited to analyze how much water has been fed into each distributary/canal compared to respective design requirements, and to find ways of minimizing the difference (wastage). Measuring devices must be installed at the head of each canal system and the distributaries. Discharge presently measured at the head of the canal systems is not reliable since gate position indicators are absent or, if installed, are not working. The discharge coefficient (except for NLBC head regulator) is not scientifically derived. Cross checks using current meters at nearby bridge sites are also necessary to confirm discharge rating curves. Rotational Water Supply (RWS) was introduced during the later part of Phase I and carried forward to Phase II. At present RWS is practiced in Rabi season only when 69  Appendix 3 Page 7 of 11 the system is kept ON for two weeks and OFF for one week. The RWS has not been functioning effectively for several reasons. Some parts of the system (NLBC and part of SBC) have gated structures at lateral off-takes whereas the system constructed in Phase II has ungated APMs. Again, these gated structures are not effective since many gates are either damaged or are missing. There is no POM for operation of the system having either gated or ungated off-takes from distributaries. Efficiency of the distribution system is also low because of poor construction quality and lack of O&M. Some distributaries (7 in SBC, 7 in IBC and 5 in MBC) commanding more than 2500 ha were to be sub-divided in branch distributaries with gated regulators at their heacd to facilitate ON/OFF operation. These distributaries have not been subdivided. Night irrigation is normally not practiced. It is reported that tail-enders resort to night irrigation when head reach off-takes are closed using stone slabs or otherwise. Some farmers, not getting their due share in the absence of land levelling, are compelled to make unauthorized cuts in the system. Cross regulators on the conveyance system are not adequate for heading up water to the required level at the distributary head; temporary cross walls are required in the conveyance system and stone barriers across the delivery system. This situation may improve when full irrigation develops. Training of project personnel and farmers in RWS has not received due attention. Immediate action is needed to prepare plans for operating the canals on RWS principles taking into consideration ground realities and corrective actions where possible. It would be worthwhile to associate an expert in RWS for preparing these operation plans. Organizing continuous training program in RWS (with RWS expert on faculty) for the O&M staff and the farmers is another immediate requirement. Ayacut Roads. The project envisaged construction of 672 km of all-weather roads (458 km new, 76 km reconstruction, and 138 km improvement) in the command areas of SBC, MBC, and IBC. During project implementation, the target was enhanced to 942 km. However, due to land acquisition problems, the project could commence work only on 635 km. The remaining 307 km of road work has been transferred to CADA. Out of 635 km of roads, 617 km of roads are completed; the balance length is expected to be completed by November 1997. Time overrun was a common problem in most of the road contracts. Completed roads are proposed to be transferred to respective Zilla Parishads for maintenance. Buildings. The buildings undertaken under the project included residential and non-residential buildings for WALMI at Dharwad, for the Dam Zone in the colony at Almatti, and for Canal Zones in their colonies in the command area (Almel, Rampur, Bhimarayanguddi, Aurad and Chigarhalli). All buildings, including the buildings for WALMI are complete. The hostel building and guest house buildings for WALMI have been handed over to Director, WALMI. The remaining buildings will be handed over shortly after the defects identified during joint inspection are rectified by the contractor. The buildings at WALMI suffered from faulty layout and design, and inadequate supervision by the staff not experienced in building construction. 70  Appendix 3 Page 8 of II Mapping. The project provided for photogrammatic mapping of the command area not mapped under Phase I. The job of aerial survey and photo mapping was entrusted to the Survey of India and has been completed. Quality Control. The Chief E]ngineer (Designs) heads the Quality Control Team. During project implementation, some improvement was observed in quality control procedures and quality of the final product, particularly major structures. There is, however, wide scope for further improvement in quality assurance and quality control. Systematic quality control also needs to be introduced for relatively smaller components of the project (distribution system, roads and buildings) which are not up to required quality standards. Technical Assistance, Training. The project envisaged technical assistance in planning, O&M, monitoring & evaluation, and contract administration. Consultancies awarded during the project period pertained to (a) feasibility studies for future development in UKP; (b) establishment of MIS; (c) telecommunication for UKP; (d) master drainage plan for UKP stage I; and (e) integrated reservoir operation studies; as well as (e) socio-economic studies for R&R. Though utilization of technical assistance funds available under the project is satisfactory, no action was taken for monitoring and evaluation of project agricultural and economic benefits. GOK also failed to take follow- up action on some of the critical studies. MIS has not been effectively established in the ID and CADA, though the R&R wing has made good progress in that direction. Telecommunication studies, very important for wide spread canal network of UKP and integrated reservoir operation, were abandoned half way. No action plan has yet been drawn for drainage based on the master plan prepared by consultants. Similarly, no follow up actions have been taken on the recommendations of the O&M consultants who finalized their report during the beginning of Phase II. Training by WALMI and CADA has not made any significant progress. No major training programs have been conducted in the fields of contract management, O&M, RWS, land shaping or drainage. The absence of these skills has had a visibly negative impact on project outcomes. Major Factors Affecting the Project Factors subject to government control. Some of the major contract works got delayed because of (a) delay in decision on procurement of canal lining equipment by the department; (b) protracted decision rnaking process in award of contracts; (c) delay in release of funds during earlier period of the project; (d) settlement of contractors' claims. Other factors which affected project iimplementation were: (a) GOK not enhancing water charges to recover a higher proportion of O&M expenditure; (b) no alternative financing scheme implemented for land levelling to be done by farmers; (c) lack of coordination between irrigation and CADA wings; (d) lack of linkage between R&R and raising of Almatti dam; (d) senior positions lying vacant for long time; (e) frequent turnover in Director, WALMI position. 71  Appendix 3 Page 9 of 11 Factors generally not subject of government control. Construction of FICs was delayed because of farmers' resistance to construction of FICs during cropping season and their insistence on entrusting FIC construction to them. Factors subject to implementing agency control. Project implementation was affected due to: (a) delays in acquisition of land for canals and roads; (b) long interruption in supply of water for construction due to gate repair at Narayanpur dam; (c) lack of follow up action on recommendations made by consultants engaged by GOK; (d) lack of attention to O&M, water management, and training. Project Sustainability Project sustainability is at stake if (a) construction quality of distribution network including FICs is not improved; (b) preventive periodical maintenance and repair of the infrastructure created (dam, gates, canal, distribution system, drains, roads, buildings) are not effectively carried out; (c) water management is not strictly monitored and RWS is not enforced; (d) drainage in already water logged or potentially water logged areas is not provided; (e) land levelling is not done by the farmers; and (f) maintenance of FICs by farmers is not enforced. Performance of the Bank Appraisal. The Bank insisted on clubbing all canal works located in one segment under a single contract (branch canal, distributaries, laterals, FICs). (SAR page 44, para 7.10). The FICs are normally constructed one year ahead of commissioning the canal system. If completed too early, it is likely to be damaged as has happened now. Furthermore, FICs involve mainly manual labour unlike higher category canals which involve machinery. Project engineers believe, therefore, that the FICs should have been detached from the suggested common contract. Supervision. During the early years of implementation, supervision concentrated on major civil works. Due to serious R&R problems during project implementation which led to suspension of credit twice, the main thrust of supervision missions during later part of project period was directed towards R&R. Other components did not receive due attention. As a result, components like O&M, water management, training, on-farm development (OFD) works, agriculture and malaria control suffered. Performance of the Borrower The Borrower made a good beginning with award of major ICB contracts for Indi and Mudbal branch canals soon after the project became effective. These contracts, however, started facing problems because of land acquisition and delayed decision on part of GOK in procuring lining machines which were to be used for the first time in the state. Midway through the contracts, further delays were caused by the dispute related to 72  Appendix 3 Page 10 of II classification of excavation strata and long term curtailment of government water supply for construction. All these factors resulted in substantial time and cost overruns. The contracts for distribution systems were also adversely affected by land acquisition problems. Construction of FICs which were clubbed with major works contracts faced basic design problemr. Flag stones used for lining being easily removable were getting displaced or stolen leaving FICs in very bad shape. The alternative of precast units was discarded due to high cost. Ultimately improved design with insitu concrete in the bed and flag stones on sides fixed to it was tried with success. Sometimes, farmers resisted construction of FICs during the cropping season and insisted that work be entrusted to them. Dam raising contract was awarded through ICB procedure. The linkage between dam raising and R&R works was not maintained. Raising had to be suspended to match with R&R progress. However, in 1996-97 GOK went ahead with raising the spillway to its crest level disregarding agreement reached with the Bank. Reconstituted DSRP has been functioning satisfactorily, but dam safety related works recommended by the DSRP are not yet taken up. Construction quality on major contracts showed gradual improvement. However, distribution system works, roads, and buildings lacked in quality. The Borrower paid least attention to O&M, OFD works, water management, and training during the project period. The Borrower appointed consultants under technical assistance component. Follow up actions on the recommendations made by the consultants are not yet initiated. Assessment of Outcome The project's outcome with respect to infrastructure works (dam, canals, roads, buildings) is rated partially satisfactory. However, the outcome in terms of returns from the infrastructure developed under the project is rated unsatisfactory. That is because of uncertain sustainability of the project arising out of poor conditions of O&M, water management and OFD works. Future Operations The following actions are required to complete the project and to ensure its operation in such a way that the project objectives are achieved: (a) completion of balance civil works including the outstanding dam safety works; (b) completion of OFD works (land levelling and field drains); (c) preparation and implementation of effective POMs for dams and canal systems including annual water budgeting for improved water management on RWS principles; (d) improved O&M with adequate need-based funds; (e) establishing properly manned and. equipped MIS cell for effective management of infrastructure and water; (f) preparation and implementation of time bound action plan for drainage based on master plan prepared by consultants; (g) intensive training program on RWS and O&M; (h) establishing WUAs and turnover of tertiary system for maintenance; 73  Appendix 3 Page 11 of 11 (i) either increase water charges substantially or devolve responsibility for O&M to irrigators' groups (or some combination of the two). Lessons Learned (1) Land acquisition is generally a major bottleneck in contract administration. (2) Procurement of lining equipment by the department and then giving it on hire to contractors was not a successful experiment. Departmental procurement and supply of special construction equipment on hire to contractors should, therefore, be avoided. (3) The FICs should, therefore, be delinked from the main canal or branch canal contracts and entrusted to a separate agency in time. (4) Before funding any irrigation system (existing or new), definite POM should be available for review at appraisal stage. Establishing or strengthening of O&M organization with specific job description and training in O&M should be an important component of Institutional Development. (5) When any new water management practice (like RWS) is to be introduced, definite plans for training programs for operation staff as well as farmers including field training in other states where such system has been successfully introduced should be chalked out at the appraisal stage. (6) Technical assistance component should specify the time limit for engaging various consultants and for follow up actions on consultant's recommendations to ensure that benefits of consultancy are available during the project period itself. 74  Appendix 4 Page 1 of 26 IMPLEMENTAI'ION COMPLETION REPORT INDIA UPPER KRISHNA IRRIGATION 11 PROJECT (Cr. 2010-IN / Ln. 3050-IN) APPENDIX- 4: AGRICULTURE AND AGRICULTURAL SERVICES The Land Base and Its Irrigation Inifrastructure Without irrigation, the drought-prone areas of semi-arid northern Karnataka yield meager harvests of sorghum, finger millet, pulses, oilseeds and local cotton. Averages conceal the fact that, many years, the monsoon fails to such an extent that harvests are lost and families subsist by sending the able-bodied to do construction work in coastal cities. The average farm size, 3 to 5 ha, is not enough to assure subsistence in all years. Under rainfed conditions, the 80% of the area that is black cotton soil (vertisols) is less likely to fail, giving a crop on the res,idual moisture after monsoon, than the 20% that is red latosols (alfasols). Farming and farm labor are the preponderant economic activity; substantial livestock numbers assure that natural regeneration of shrubs and trees is poor. Previous phases of UKP, parts of which were financed by IDA Credit 788, had brought 81,161 ha under irrigation. That irrigation has not been working all that well. Much of the land that needs to be leveled has not been. Irrigation maintenance and sometimes construction too have been poor, especially so for field channels. The system has not been operated as designed, usually being allowed to flow all the time during the irrigation season due to availability of surplus water. Consequently (and also because, de facto, farmers are getting canal water free) waterlogging and salinity are spreading and changing the cropping pattern. Nevertheless, even this imperfect system has multiplied the net return per hectare of farmland by from 9 to 16 times what rainfed agriculture yielded. The Phase II, 1989/90 to 1996/7, was slated to irrigate another 148,000 ha of these lands, with between 15,000 and 24,000 ha newly receiving irrigation each year. Projected benefits were based on the actual results from Phase I, given its imperfections. Actual establishment of irrigation as of mid-1997 had reached 93,513 ha, 63% of target. Of the remaining 54,487 ha, 13,275 ha (9%) is not yet served by its major canals. Another 41,212 ha (28%) is served by irrigation canals down to the distributary but lacks field irrigation channels (FICs). Given the present pace of work, it is assumed that the major canals will be completed for the remaining area in 1997/8 and that the FICs for the  Appendix 4 Page 2 of 26 Phase II area will be completed in 1999/2000.16 The Phase II areas newly getting irrigation by year and cumulative totals, in hectares, are as follows: 1989/90 1990/1 1991/2 1992/3 1993/4 1994/5 1995/6 1996/7 1997/8 1998/9 1999/00 0 3041 21328 6183 5256 4686 28028 24991 25000 25000 4487 3041 24396 30552 35808 40494 68522 93513 118513 143513 148000 As in Phase I, the irrigation on the 93,513 ha is highly imperfect. As per appraisal estimate, 78% of the Phase II area (116,000 ha) requires land leveling or land shaping for irrigation to work properly. Furthermore, while the technical needs were less precisely known, it was estimated that 30% (44,400 ha) requires field drains (FDs). Land shaping and construction of Fds have fallen far short of target. Only 8,820 ha. were land shaped during Phase II, a mere 8% of what is needed for irrigation to function properly. Almost all land shaping was done in the first years of the project. Since 1992, institutional financing for land shaping has ceased. Some farners continue to shape their land, using their own resources or with finance from village money-lenders. The volume of this work, however, is not significant."7 The agricultural consequences of the major shortfalls in land shaping and FDs are apparent. Frequently, FICs are hanging in air or below field level. Even when they happen to be at the right level in an unleveled field, some crops get too much water and most get too little. Farmers consequently over-irrigate, a practice which is encouraged by the fact that water charges are low and virtually uncollected, and by the fact that ID rarely operates the canal system according to design but allows the canals to flow virtually all the time. That, plus the frequent absence of drainage (construction of primary and secondary drains is also far behind project design) is leading to a serious waterlogging and salt problem. This was documented by the consultant's Master Drainage Plan. It can be seen, in the Phase I area, in farning patterns: declining yields in low-lying fields, 16 In May 1998, the Borrower has reported that actual irrigated area was 72,396 ha. in 1996 kharif was and 88,744 ha. in 1996-97 rabi. These figures are consistent with assumptions made by this report based on earlier Borrower submissions, verified in the field. The Borrower has also now reported that irrigation potential created up to March 1977 [sic] was 233,885 ha. and that 153,049 ha. has been notified during 1977 kharif, and 135,528 ha. during 1996-97 rabi. These figures are not consistent with the Borrower's earlier submission of accomplishment under Stage I Phase II, nor, with the Mission's observations three months after project closing. 7 The Borrower has reported in May 1998 that farmers have shaped 37,270 ha. at their own initiative without institutional finance. This figure is plausible only if extremely rudimentary land-shaping is counted. The borrower now claims that 24,176 ha. have been shaped using institutional credit (cf. the 8,820 ha. reported to the mission in September 1997 and verified at that time). Since the institutional credit program for land shaping has defunct since 1992, this claim is inexplicable. 76  Appendix 4 Page 3 of 26 switching from crops for which the system was designed to waterlogging- and salt- tolerant rice, and finally, abandonment of farmland. Estimates of the agricultural consequences of these irrigation imperfections are given below. Agricultural Results The mission estimated farming results first in areas where farmland is shaped or leveled (or doesn't need to be) and where drainage has been provided (or doesn't need to be). Estimates for different soil types, for wealthier and poorer farmers, and for farms near and far from roads were weighted and averaged to arrive at an average cropping pattern and average crop budgets at full development. The speed with which farmers change their cropping patterns and other practices after receiving irrigation were estimated by observing the Phase I aLnd the "pre-Bank" irrigated areas and comparing them to what is happening in the Phase II areas. On this basis, the mission constructed the agricultural results on an average hectare that was leveling and properly drained. Then the reduced results where land shaping and FDs are absent were estimated. The original results were revised to account for the effects of these defects on the areas which suffer from them. The results are summarized below. Under rainfed conditions, in kharif, the main rainy season, typically 37% of the land would be farmed, more in red-soil zones, much less in heavier black-soil zones where the extremely low infiltration capacity makes it difficult even to get on the field in kharif. Pulses (mainly chickpea) and oilseeds (groundnut and sunflower) take up one third of the area each and grains (mainly millet) most of the rest. In rabi, the winter after the rains, half of the area is cropped (more in black-soil zones). Grains (almost entirely sorghum and a little wheat, which is al the extreme warm end of its range) take up 3/4 of this area. Cotton, on 7% of the area, spans both seasons; under rainfed conditions, cotton growing is a low-input, low-output proposition. The 1989 appraisal predicted that farmers, seeing what their Phase I neighbors had done, would shift to the new irrigated cropping pattern in two years, taking much longer, however, to get proficient at irrigated farming. It was expected that they would reach 90% of their full-development yields 10 years after getting irrigation; all of them by year 15. In fact, farmers are taking longer to adjust their cropping patterns, but are mastering irrigated-farming techniques more quickly than predicted. The typical transition to the new cropping pattern takes four years, the attainment of full-development yields takes 12. Once the transition has been made, 80% of the area is cropped in kharif and 2/3 in rabi, plus 8% of the land devoted to bi-seasonal cotton. Kharif is dominated by oilseeds (over half the area) and grains with pulses much reduced. Oilseeds are even more dominant in rabi with 61% of the area. Small areas continue to be cropped in rabi without irrigation, using the residual moisture of the black soils. The main cropping changes from appraisal estimates is that the oilseed expansion is even more marked than 77  Appendix 4 Page 4 of 26 expected, as is the decline of pulses. Because grain production has not expanded as rapidly as expected, neither has fodder production. While chili production is expanding as expected, there is a little less shift to other vegetables than anticipated. Oilseeds account for 54% of land use. They are popular because they give quite high returns with relatively little risk, either because of crop failures or of the need to spend heavily on inputs and additional labor. Kharif hybrid sorghum has not caught on as expected, probably because the first canal water is being released too late for optimal farming. This has also discouraged expansion of cotton. As expected, pulses and safflower, which are less responsive to irrigation, have declined in importance (though not in absolute terms because everything grows better). There has been a modest expansion of high-value, high-risk crops like chilis, which must be sold in far-away Dharwad, onions, and other vegetables. Chilis and cotton, which also involve price risk, tend to be favored by the better-off farmers; sunflower by the more risk-adverse. Overall, cropping intensity has risen from 92% to 160% (of which 154% is irrigated). The dramatic change is not in cropping pattern but in results. The increased dependability of irrigation has made it worthwhile for farmers to invest more in seed, fertilizer, manure and pesticides, in tillage and weeding, and to provide more labor -- their own and hired -- all with much improved results. Irrigated fields of hybrid sorghum and cotton are strikingly different from their rainfed predecessors. Irrigated farmers are getting yields of two to three tons per hectare for oilseeds and grains, versus half a ton or a little more without irrigation. These yields do not differ greatly from appraisal projections. Net of all the new expenses additional labor, improved seed, fertilizers, and pesticides, half of the farmers' incremental gain comes from yield increases. Half comes from increasing the area cropped and shifting to higher-value crops. Table A- 1 shows shifts in cropping pattern. Tables A-2 to A-16 show typical inputs and outputs for the major and some minor crops. Minor crops like chilis and other vegetables are highly profitable, though risky, and are important beyond their place in the cropping pattern. Table A- 17 summarizes the yields. Expansion in cotton and chili production may be straining marketing arrangements and affecting farm-gate prices, but generally the agricultural expansion seems to be proceeding smoothly. Whether due to the large increase in farming demand for labor or demand from project works, wage rates are somewhat higher in the command area than in surrounding regions. There is in-migration of farm labor and tenant- operators from Andhra, especially where waterlogging dictates rice cultivation, but little settlement of PAFs displaced by the projects reservoirs. But most of the Phase II command is getting deficient irrigation and will continue to do so for an indeterminate period, since GOK now has no plans to remedy the defects in land leveling and drainage. It is difficult to quantify these problems. System impairment due to absence of land shaping and drains comes in all degrees of severity. 78  Appendix 4 Page 5 of 26 Waterlogging and salinity stem not from absence of field drains alone but also from failures of canal system operation, of water charge collection, and of major drain construction. Suppose that 22% of the command is flat enough not to need land shaping, another 8% has been leveled, and thLat on another 15% land leveling can and will be managed by farmers with a bullock pair and/or is not a critical problem. Then it is on the other 55% that farmers are getting deficient irrigation for want of land leveling. The area affected by waterlogging and salinity is even more difficult to estimate. It is not (yet) a problem on the 16% of the Phase II command that was supposed to get FDs but didn't (though ID engineers report drainage problems on 23% of SBC, Distributary 5!). The Master Drainage Plan reports actual waterlogging (water table less than 2M) with salinity on only 0.4% of the Phase I area but probable developing problems on 5%. The Indo-Dutch drainage team estimates the waterlogging-effected part of Phase I at perhaps 8%. Both sources agree that problems develop only after a few years of improper irrigation. Therefore, irrigation in Phase II can be divided into three areas. The first -- 45% of the area at the start -- gets regular irrigation. The second -- 55% at the start -- gets defective irrigation due to lack of land shaping and achieves only 60% of the agricultural gains made by those with full irrigation. Thirdly, starting in the fifth year after receiving irrigation, the 16% of the command that requires FDs but didn't get them constitutes a third area that suffers a 4%/year decline in its benefits from irrigation. These conservative assumptions about the agricultural effects of defective irrigation may seriously understate the gravity of the problem, but they are an attempt to recognize it. The effect of these assumptions is summarized as follows: Year after Proper Irrigation Areat Hurt by Absence of Hurt by Absence of start irrigation _ Land Leveling Drains % area % yield loss % area % yield loss % area % yield loss 1-4 45 0 55 40 0 0 5 38 0 46 40 16 5 6 38 0 46 40 16 10 7 38 0 46 40 16 15 8 38 0 46 40 16 20 23 38 0 46 40 16 95 24ff 38 0 46 40 16 100 On the assumptions set out above, the mission has calculated the project's agricultural benefits. All costs and benefits have been taken into account, at prevailing prices for financial analysis and at the social opportunity cost for economic analysis. Items for which farmers do not actually pay, such as their own family labor, work of their 79  Appendix 4 Page 6 of 26 own bullocks, and seed saved from their own harvest, are counted at their purchase equivalent. Farmers have the option of hiring out their labor and bullocks and of selling the produce they save for seed; in the project area, some exercise these options. The project's agricultural results would exceed appraisal expectations but for the failure to reach irrigated area targets and failure to complete most of the land shaping and field drains. Undoubtedly results would be better yet if the irrigation system were operated in a regular manner according to the warabandi mode and if the system were maintained adequately. Still, a sub-marginal agricultural area in which families could support themselves many years only by emigrating for casual work is being turned into a rich agricultural area. Farmers whose irrigation is not defective are cloing better than anticipated at appraisal. Versus a return, net of all inputs including family labor, per average hectare of Rs 743 before the project (which was expected to grow slowly to Rs 1273/ha at full development without the project as a result of secular trends), the farmer whose irrigation is not defective is expected to net Rs 12,205/ha. The mission estimates that farmers who need land shaping and don't have it will, on average, still net Rs 7323/ha at full development, almost six times what they would be netting without it. Farmers who need drainage but don't get it would notice little effect at first. However, their benefits and, finally, their ability to farm their land at all would disappear unless the situation were remedied by measures which would become increasingly expensive over time. These estimated benefit-reductions are averages; actually, individual farmers would experience much greater or lesser effects. Farmers, who pay little or nothing for irrigation water or land shaping, obviously benefit greatly from the introduction. It is easy to be complacent about the system's defects when the average farmer needing and lacking land shaping nets six times what he would without the project. Even if he has an average drainage problem as well, he would be doing better than without irrigation for two decades. The seriousness of delays in completing the system and of its imperfections, become apparent when Karnataka's costs are compared with the agricultural benefits.'8 18 The project also has power benefits, and costs. Turbine generators are being installed at Almatti and Narayanpur Damns and low-head hydro plants have been or are being built where there are significant drops in major canals. The mission asked for but did not receive estimated of the costs and benefits of these installations. At appraisal, the low-head plants were not planned, while estimates for the dam hydro-electric installations were not available. It is probable that the low-head installations are economically marginal and financially viable only so long as the power supply in the public grid is highly unreliable, a condition that seems likely to persist for quite a while. The dam powerhouses may be a different proposition. However, the heads are not high; power cannot be furnished year around because the dams will be operated primarily for irrigation. Therefore, even given the very high willingness to pay for reliable electric power in India, while the impact of these installations on total project benefits is unknown, it is probably positive but not significant. 80  Appendix 4 Page 7 of 26 To give an idea, in financial terms at full development, net incremental agricultural benefits to the 148,000 ha command would be about Rs 1800 million (US$50 million) per year. The estimated three-year cdelay in completing main canals and FICs, in full- development terms, will cost Rs 665 million ($18 million), Rs 360 million ($10 million) and a small amount for the third year. More serious still are the defects for which no remedies are currently planned. By mission estimate, at full development, not leveling and shaping land that needs it costs about Rs 400 million (US$11 million) per year. The cost of not installing drainage will not be significant in the Phase II area for a few years, but it will grow to about Rs 290 million ($8 million) per year by the 2020s. More ominously, it is a condition that gets more costly to fix with the passage of itime. As the economic analysis annex (Annex 4) shows, these delays in and omissions from the irrigation system have a devastating effect on the project's overall returns. Other Services to Farmers While irrigation is by far the most valuable service the project provides to farmers, it included a variety of other services and provisions intended to stimulate farm production and to facilitate the major shift from rainfed to irrigated farmning. CADA was slated to provide most of these: agricultural extension for the transition, assistance in forming water-users' associations, provision of storage to cooperatives, in land shaping and getting credit for land shaping, applied agricultural research, and training. Other departments were slated to provide services too: Forest Department was to concentrate its resources on helping farmers start fuelwood farms in the command; Dry Land Development Boards were to accelerate their activities in the Krishna catchment; Health Department was to expand its anti-malaria activities to cope with the problem of malaria, unintentionally re-introduced into the area during Phase I construction of Narayanpur Dam. Many of these services failed to materialize; others were less than expected. CADA services in particular seem to have declined precipitously during and after 1992. CADA was initially quite active, organizing melas to prepare farmers for irrigation, assisting them in land leveling, organizing WUAs, etc. Forty-nine WUAs were formed in 1990 and 1991, one in 1992, and none thereafter. These WUAs covered only 23,162 ha of the command. More serious is the fact that these WUAs are moribund. Indeed, the WUAs can have no role in operating the system because ID is not operating it but allowing the canals to flow throughout the irrigation system. WUAs appear not to have been active in repairing FICs. CADA's 4th land-leveling firnance scheme, April 1990 to December 1992, involved 4,999 farmers and 11,016 ha, about 80% from the Phase II area. This area was 81  Appendix 4 Page 8 of 26 less than projections and contributed to, rather than reducing, the land-leveling backlog. The 4th scheme was defective in other ways too: CADA managed to have only 0.75% of the loans converted into regular bank loans to farmers and rediscounted by NABARD, thus saddling the Special Loan Account with a large debt, less than 2% of which CADA has been able to collect from farmers. Government of Karnataka failed to issue its guarantee for these debts until August 1997. Therefore, from 1992, land shaping virtually stopped too. CADA's farm extension was meant to be transitional. Extension responsibilities for the Phase I area have been transferred back to the regular service of the Agriculture Department (AD). At appraisal and thereafter, AD was implementing T&V-style extension with IDA assistance, but this proved too costly and rigidly top-down and was curtailed. As a result, UKP farmers are getting modest extension support indeed, either from CADA's Agricultural Wing or from the Agriculture Department's regular extension service. CADA's agricultural staff to assist new areas getting irrigation is far below targets and unequal to the demands placed on it. Except for about 26 agricultural assistants of low technical level, the service only has two assistant agricultural officers and the Land Development Officer (Agriculture), a professor on secondment from the Dharwad Agricultural University. The current budget for extension and agricultural demonstrations is Rs I million (US$28,000), just one percent of CADA's total. What the Agricultural Wing does with this allocation is impressive, but it is very far from adequate. The same is true of CADA's farmer-training and of its agricultural research at Bheemarayangudi. Satellite facilities at Hunasigi did not materialize. What research goes on is thanks to the presence of five scientists from Dharwad Agricultural University whose presence at Bheemarayanagudi is financed by the Indo-Dutch Network Operational Research Project on Drainage and Water Management for Salinity Control in Canal Commands. This team is experimenting at Islampur, one of Phase I's worst waterlogging- and salt-affected areas, with drainage arrangements to relieve the problem. They have shown that areas that had been abandoned can be brought back into production, albeit at great expense; because the restored lands are still somewhat salty, and because the irrigation system still over-waters them, rice and bananas are grown on these lands. CADA's Land Development Training Centre at Bheemarayanagudi has trained 2- 3,000 farmers and about 40 extension workers each year since 1992. From 29 to 56 small courses are given per year. Many are repeats; there are about 8 different courses given. This is a remarkable accomplishment, given the staff involved (two of the above- mentioned CADA staff and the Dharwad Indo-Dutch staff in their spare time) and the operating budget, which has averaged Rs 40,000 (US$1,000) per year. Perforce, the training quality suffers. The same conclusions apply to the Dharwad Water and Land Management Institute (WALMI), an institution meant to provide irrigation training state-wide but partly 82  Appendix 4 Page 9 of 26 financed under this project. Bank finamce of Rs. 169.9 million (US$4.7 million) helped complete the campus which USAID fiSnance had begun. While there have been some problems with construction quality, particularly with the finishing of the buildings, WALMI's significant problem is the apparent lack of high-level support for its program. The rapid turnover of directors has been notorious. Most staff positions are unfilled. Budgetary support is manifestly inadequate. The present director soldiers on by using retirees as consultants to teach but he is handicapped by an impossibly cumbersome decision-making board. Under the circumstances, it is remarkable that WALMI maintains the training program it does, However, unless things change, there can be no question of producing quality training material or of meeting the objectives for which WALMI was launched. While the Forestry Department and the district-wise Dry Land Development Boards have done commendable work. in the project area, there is no evidence of the expansion and/or concentration in the project area cited in project design. Regarding the anti-malaria unit, there have been troubles (as with other government departments in the UKP area) getting the operation fully staffed. There is now an active program of detection, prevention, remediation and cure and the death rate from malaria appears to be low. However, according to the units records, the disease continues to spread. 83  Appendix 4~ Page 10 of 26 ___ ~~~~~~Upper Krishna II Projoct Table Al_ __ Implementation Completion Rep __ ---1TbeA ___ ___ ~~~Cropping Pattern &Attribution_of Increases in NetA Agiultural ValuI~- .- I FINANCIAL Crop Incremental Value/unit area Weight in Cropping Pattern Net Incremental Value/Model Full-developm4nt ha -- ______ (Fwith-F/without)<Rs> --<Rs> - Ksorghum _____ 2035 0.00625 12.7 ____ kbajra 4389 0.1125 __ _493.8 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ktur - 4065.5 __ __ _ 0.062~5 _ _ _ _ _ _ 254.1 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ kgrdnt- 7999.5 ____ 0. 112~5 ____ 899.9 ksunfl __ ~~53-76 0--. 15625 840.0 rsorgh -2236 - 0.125 ___ __ 279.5. rwheat - 2 8 _ _ _ _ 00 6 5 _ _ _ _ _ _ _ _ 20.6 _ _ _ __ _ _ _ _ _ _ rs-affi- ~ ~ 1056 ____ 0085____1___ L 19.8 ____j7 rsiunfl- - 7760.125 __ 909-.5- - 00 TpuIS- - 5217 ___0125 -- 65.21 cotton--60035& 0.05 - O-- 302~ - Total Iprovemnt due to yield_increase/ha 0IRs4318 4 _____ __ ___ ~ __ ___Improvement due to d cropping patftern 6597 6 'Ttlimprovement/model ha Yr afer g-e-ttingihrrigati6n - i 2 3 4 5 _ 6 7 8 9 10. 11~ 12 net value/ha without 743 787 831 875 920 964 1008 1052 1096~ 1141 11851 1229~ 12-73 eclar increment 44 44 44 44 - 44 44 44 44 44 44 441 44 cumulative secular increment 88 1331 177 221 265 309 353 398 442 4861 530 incr net valuetha due to yield cha ge 561 1123 16841 2245 2807 __3368 3929 4016 4102 4189 4275 4318 incr net value/ha due to area cha ge 1649 32981 4948~ 6597 6597 6597 6597, 6597 6597, 6597 6597 __6597 To-tal net incr-emental value/ha I 0 2211 C442 F 6632 88421-9404 9965 1-052-61 01, 1-069961 f7-8-51 --1-08-72 195  Appendix 4 Page 11 of 26 ______|INIA-UpperKrishaIrigatinIIrojet|INDIA - Upper Krishna Irrigation Project Table A.2 Implementation Completion Repoft-- Crop Budgets per Average Hectare le KharifJowar -I - - - - ! B 0 0 ' ; 0X_ a3efore Project ' -Future Without Project - i-uture With Project Unit <Q> <Fin. PricexEc. Price><Fin. Value<Econ. Val <Q> <Fin. Value<Econ. Vat <Q> <Fin. Price!Ec. Price<Fin. Value<Econ. Value> <Rs> <Rs> <Rs> <Rs> - <R> <Rs> <Rs> <Rs> Outputs --- _ _ J { ______ { _ t _ _ i Product kg 600 5.45 6.47 3270 3882 700 3815 4529 2800 3.65 6.47 _ 10220 18116 By product kg 775 0.5 0.45 388 349 900 450 405 3800 0.35 0.315 1330 1197 Gross Retum } 3658 4231- 4265 34 __ 4 9 _____ 11550 19313 Inputs _ L _ _____ . ___ | Land Preparation bullock pair days 10 0 90 1000 900 10 1000 900 141 100 90t 1400 1260 Seed kg 8 12 15 6 120 8 96 120 8 25 35 20 20 Manures MT 2, 300 270 600 540i 2, 600 540 3 300; 270 900 810i Fertilizers _____ 01 0 N kg,N20 ol__ 0 9.5 17.9310 0 Oi o I 0 100 9.5 17.93 9501 17931 P 1 kg,P205 02 18 12.37 0 0i 0 0 75 18 12.37 1350i 928 K kg,K02 0 6.5 1072100. 0 0 0 . 0 40, 6.5 10.72 260 429 Pesticides ha 0 200 180 - 0 0 0; 0 0 1 200: 180, 200 180 Irrigation ha 0 20 dna 0 0 0 . 1 20 dna 20 ao Labor: hired man day 26 32 28.8 _ 832 749 26 832 749 45. 37 33.3 1665 1499 U' Retums to Family Labor & Enterprise , 1130 1922 -- -. 1737 2625 _ 4605 12135' ________ ma_ay___ _ _ . _. _______ -_- . .............. ___ ___ . -__ t----_ Labor: family _manday 3 261 28.8| 832| 7491 26 832 749 451 371 33.3 16651 1499 Net Retum __.___| 298| 1173 905o 18761 29401 10636  Appendix 4 Page 12 of 26 L______I__ NDIA - Upper Krishna Irrigation il Project _ _ I _ L_ I Table A3 _hf _ - . - __ jplementationCompletionRepoit j --, _ . _- _ -.. _ _ .. _. _ _e_ KarBara ,CropBudgets per Average Hectae ' Before Project I__ - Future Without Proje Future With Project - Uni <Q> <Fin. Price<Ec. Pce Vau<Econ. Val <Q> <Fin. Value<Econ. Vaf Q; -<Fin. PriceEc- PiceSr. Value<Econ. Value> <Rs> <Rs> cRs> <Rs> <Rs> <Rs> <Rs> <Rs> <Rs> <Rs> outputs__ _ _ _ _ _ _ _ _ Product kg 575[ 4 4.95 2300 2846 6 2600 32181 2800 3.5 4.95 9800 13860 By product kg 850 0.3 0.27 255 230 975 293 263 4200 0.6 0.54 2520 2268 Gross Retum 2555 3076 _- 2893 3481 _.__ 12320 16128 Inputs j l_ ____ Land Preparation bullock pair days 10 1i00o 90 1000! 900; 10 1000 900 14 100 90 1400 1260 Seed kg 4: 20' 38.25 80 153 4 80! 153 4 20 38.25 80 153 Manures MT 1 300 270 300 270 1 300 270 3 300 270 900 810 Fertilizers N kg,N20 _ 0 9.5 17.93[