Announcement of Philippines Receives Forty-Two Million US Dollars Loan to Assist Irrigation and Agriculture on July 24, 1975

.world Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 BANK NEWS RELEASE NO. 75/76 JULY 24, 1975 PHILIPPINES RECEIVES $42 MILLION LOAN TO ASSIST IRRIGATION & AGRICULTURE The World Bank has approved a loan of $42 million to the Philippines to help finance the completion of the first stage of a multipurpose project in the Cagayan Valley of Northern Luzon. Stage I of the Magat River Multipurpose Project consists of the rehabilitation and upgrading of two national and several small conununal ir- rigation systems now serving a total of 52,000 hectares and the expansion of these systems to serve an additional 23,000 hectares. This will permit a cropping intensity of 140% on the total 75,000 hectare area. Part of Stage I of the project includes rehabilitation of about 40,000 hectares of existing 1 irrigation systems being implemented with parallel financial assist- ance from the Asian Development Bank. The part to be assisted by the World Bank includes the: rehabilitation of facilities serving 12,000 hectares and construction of new facilities on 23,000 hectares; upgrading and construction of about 830 kilometers of project roads; construction of an air strip, acce$S • roads and a bridge across the Magat River near the existing diversion dam; procurement of vehicles and equipment; detailed engineering studies and full economic evaluation of the proposed Stage II consisting of the Magat dam and reservoir; a water management study; and technical assistance to Nation- al Irrigation Administration (NIA) in systems operation and construction management. The project will contribute to the Philippine Government's object- ives of attaining self-sufficiency in food grains and improving the product- ivity of small farmers. It will provide better water control and will extend the area under run-of-the-river irrigation from 40,000 hectares to 75,000 hectares in the wet season, and from 19,000 hectares to 29,000 hectares in the dry season. Yields will increase due to improved irrigation, drainage and agricultural supporting services. At full development, annual paddy produc- tion in the project area will increase from the present level of 189,000 tons to 422,000 tons. The increase will provide.enough rice to feed about 1,500,000 people per year. Per capita incomes on average size farms will increase from about $105 at present to about $220 in 1985. The project will benefit directly about 144,000 poor people. Banque de l'Indochine, Paris, has agreed to participate in the Bank's loan . • The loan is for a term of with interest at 8-1/2% per annum. Note: 25 years including 7 years of grace, Money figures are expressed in US dollar equivalents. PROJECT: T ECHNI CAL DAT A Magat River Multipurpose • COUNTRY: Philippines TOTAL COST: $84 million BANK FINANCING: $42 million, for 25 years, including 7 years of grace, with interest at 8-1/2% per annum. OTHER FINANCING: Government of the Philippines IMPLEMENTING ORGANIZATION: National Irrigation Administration (NIA), Manila, Philippines. PROJECT DESCRIPTION: The project will upgrade to standards adopted in the Tarlac Irrigation Systems Improvement Project 89.0 hectares of the Magat River Irrigation System (MARIS), 10,000 hectares of the Siffu River Irrigation System (SIFRIS) and 1,300 hectares of small connnunal irrigation systems in the MARIS service area, and will extend the MAR.IS and SIFRIS to include an additional 22,810 hec- tares of currently rainfed rice land. The main components of the project are: modifi- cation of the existing MARIS diversion dam; rehabilitation of two existing NIA irrigation and drainage systems and several local communal systems serving a total area of ebout 12,190 hectares; extens1on of the NIA systems to serve an additional area of about 22,810 • hectares; upgrading or construction of about 830 kilometers of project.roads; construction of an air strip, access roads and a bridge across the Magat river near the MARIS diversion dam; and procurement of vehicles and equipment. PROCUREMENT: The following procedures have been agzeed upon: (a) equip- ment and vehicles for force account construction, operation and maintenance and for Stage II studies and water management training, costing about $4.5 million, will be procured after international competitive bidding in accordance with Bank Group Guidelines. A preference limited to 15% of the c.i.f. price of the imported goods, or the customs duty, whichever is lower, will be extended to local manufacturers in the evaluation o~ bids. (b) Civil works for modification of the Magat River Irrigation System diversion dam and intake structure ($6.1 million) will be let as one contract following international competitive bidding. (c) Civil works on the project service area total $37.8 million. About 60% will be carried out by contracts awarded on the basis of competitive bidding in accordance with local procedures. Foreign contractors will be eligible to participate in the bidding. NIA will carry out the balance of the works--not exceeding 40%--by force account. CONSULTANTS: NIA will employ consultants to provide guidance in construc- tion management, systems operation and maintenance and to carry out engineering studies and a full economic evaluation of the Magat River dam and, if justified in light of the evaluation, final designs, cost estimates and tender docu- ments for construction of the dam and appurtenant structures (656 man-months). ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 18% June 30, 1982 - 0 - •