Colombia - Second Irrigation Rehabilitation Project

 Second Irrigation Rehabilitation Report No: ; Type: Report/Evaluation Memorandum ; Country: Colombia; Region: Latin America And Caribbean; Sector: Irrigation & Drainage; Major Sector: Agriculture; ProjectID: P006793 The Colombia Irrigation Rehabilitation II Project, supported by Loan 2667-CO for US$144 million, was approved in FY86. The loan was closed in FY96 after two one-year extensions and US$16.9 million was canceled. The Implementation Completion Report (ICR) was prepared by the Latin America Regional Office assisted by the FAO/World Bank Cooperative Program. The borrower’s contribution to the ICR is attached as an appendix. The project’s objectives were to (a) increase crop production on 108,000 ha in six districts through intensified land use resulting from rehabilitation and improved technical and extension services; (b) improve the income of 3,900 small farmers on 7,800 ha through small-scale irrigation; (c) partially restore irrigation in volcano-damaged areas; and (d) improve the sustainability of public-sector irrigation through full recovery of operation and maintenance (O&M) costs and establishing water user associations (WUAs). Main components were: civil works and replacement of maintenance equipment in the six districts; construction of small-scale irrigation schemes; rehabilitation of existing and the construction of new large-scale irrigation; erosion control; credit for farmers; and technical assistance and training for farmers and WUAs. The project was presented as a follow-up to Rehabilitation I (Loan 1996-CO) but was significantly more complex, as well as being over three times as large in area and cost. Pressure to lend led to an overly optimistic assessment of the preceding operation, and inclusion of new irrigation development that compromised the focus on rehabilitation and extended the project into areas beyond the experience of the implementing agency, Instituto Nacional de Adecuacion de Terras (INAT). The rush to appraisal overlooked the lack of detailed design of rehabilitation works and paid little attention to agricultural extension and institutional strengthening. A new 8,000 ha irrigation project was added at negotiations despite a lack of feasibility studies and the erosion control component was added after appraisal. To achieve Board approval, the Bank and Borrower glossed-over fundamental differences on sectoral strategy and policy which subsequently plagued implementation. The project partially achieved its objectives. Loan effectiveness was delayed nine months and detailed design studies took two years. Periodic shortages of counterpart funds, procurement and contractual problems delayed implementation and rehabilitation works were only completed in two of the six districts. Although the small-scale irrigation component achieved almost double its targets, a majority of the projects did not work. The new irrigation component was dropped because of doubts about economic feasibility. Failure to utilize the experience of two WUAs that had operated in the project area for nearly a decade hindered implementation while inadequate understanding of farmers’ incentives slowed cost recovery. The project was weakened by government’s failure to maintain a competent technical and managerial team to manage INAT, active resistance within INAT to the involvement of WUAs in project implementation, and a focus on new projects. However, major constitutional reform and structural adjustment in the early 1990s led to a better enabling environment and a pioneering irrigation law that catalyzed cost recovery (reaching 100 percent in two districts) and accelerated transfer of irrigation facilities to WUAs. These changes laid a good foundation for the long-term development of the sector and eventual attainment of the project’s objectives. However, based on its current status, the ICR reduced the Economic Rate of Return (ERR) from 28 to 8 percent. The Operations Evaluation Department (OED) agrees with the ratings in the ICR. Project outcome is rated as unsatisfactory, sustainability as uncertain and institutional development as modest. Both the ICR and OED rate the Bank’s performance as unsatisfactory in preparation, appraisal and supervision, even though supervision significantly improved after 1994. The main lessons drawn from this project are that improved Bank supervision cannot make up for time lost and problematic implementation resulting from failure to fully explore issues and agree sector strategy and policies during appraisal; that it is better to utilize in-country experience of successful WUAs than to rely only on public-sector experience; and that a good social assessment is needed to fully understand problems of cost recovery that go beyond the capacity of the irrigation agency. The quality of the ICR is satisfactory. The borrower has developed an action plan to complete unfinished works and for future operations. While there are no plans for future Bank lending, support for strengthening WUAs through an Institutional Development grant and an EDI seminar is planned. An audit is planned.