India - Mahanadi Barrages Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 3111-IN INDIA STAFF APPRAISAL REPORT MIAHANADI BARRAGES PROJECT October 31, 1980 South Asia Projects Department Agriculture Division C 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 US$1.00 = Rupees (Rs) 8.40 1/ WEIGHTS AND MEASURES (METRIC SYSTEM) 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) 3 - 2.47 acres (ac) I million cubic meters (Mm ) = 810 acre-feet (ac-ft) 1 thousand million cubic feet (TMC)= 28.32 M3 1 cubic foot per second (cusec) = 0.028 m3/s I cubic meter per second (cumec) = 3,600 m /hour 1 ton - 1,000 kilograms (kg) 2,205 pounds 1/ Until September 24, 1975, the Rupee was officially valued at a fixed Pound Sterling rate. Since then it has been fixed against a "basket" of currencies. As these currencies are floating, the US Dollar/Rupee exchange rate is subject to change. Conversions in this report have been made at US$1.00 to Rs 8.40, which represents the projected exchange rate over the disbursement period.  FOR OFFICIAL USE ONLY ABBREVIATIONS ACE - Additional Chief Engineer AE - Assistant Engineer AEO - Agricultural Extension Officer AG - Accountant General CAD - Command Area Development Department CB - Commercial Banks CCA - Cultivable Command Area CRRI - Central Rice Research Institute CWC - Central Water Commission EE - Executive Engineer ERR - Economic Rate of Return FSL - Full Supply Level GNP - Gross National Product GOI - Government of India GOO - Government of Orissa HYV - High Yielding Varieties ICAR - Indian Council of Agricultural Research ICB - International Competitive Bidding IDA - International Development Association IPD - Irrigation and Power Department of GOO ISI - Indian Standards Institution JE - Junior Engineer LCB - Local Competitive Bidding NDP - Net Domestic Product QCD - Quality Control Division RWS - Rotational Water Supply SE - Superintending Engineer VLW - Village Level Worker GLOSSARY Chaka - consolidated plot Kharif - wet season: June to September Rabi - dry season: October to February Warabandi - a rotational water supply system FISCAL YEAR GOI, GOO - April 1-March 31 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.  I I 4  INDIA MAHANADI BARRAGES PROJECT Table of Contents Page No. I. BACKGROUND .......................................... 1 Agriculture in India ..................................... 1 The State of Orissa ...................................... 1 II. THE PROJECT AREA ......................................... 3 Location ................................................. 3 Climate .................................................. 3 Topography, Soils and Drainage ........................... 3 Agricultural Holdings .................................... 4 Agricultural Production .................................. 4 Land Consolidation and On-farm Development .... ........... 5 Supporting Services ...................................... 6 III. THE MAHANADI DELTA IRRIGATION SYSTEM ..................... 6 Background ............................................... 6 Hydrology ................................................ 7 The Existing Weirs ....................................... 8 IV. THE PROJECT .............................................. 10 Objectives ............................................... 10 Detailed Features ........................................ 10 Engineering Design ....................................... 12 Implementation Schedule .................................. 12 V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS .... ............ 12 Cost Estimates ........................................... 12 Financing ................................................ 13 Procurement .............................................. 13 Disbursements ............................................ 14 Accounts and Audits ...................................... 14 VI. ORGANIZATION AND MANAGEMENT .............................. 15 General .................................................. 15 Arrangements for Weir Failure ............................ 16 Monitoring, Evaluation and Reporting ..................... 16 Cost Recovery ............................................ 16 This report is based on the findings of an appraisal mission which visited India in July 1980 and comprised of Messrs. C. Helman and M. Herman (Bank) and F. Ritchey (Consultant). Messrs. A. Meimaris (Bank) and K. K. Aw-Yong (FAO/CP) also contributed to this report.  - ii - Table of Contents (continued) Page No. VII. BENEFITS AND JUSTIFICATION .............................. 18 Present Irrigation Benefits ............................. 18 Economic Analysis ....................................... 18 Environmental Effects ................................... 20 VIII. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS .... ........ 20 ANNEXES ANNEX 1 - Supporting Tables T-1 - Salient Features T-2 - Climatic Data T-3 - Cost Estimates and Phasing T-4 - List of Buildings T-5 - List of Equipment T-6 - Estimated Disbursement Schedule T-7 - Proposed Credit Allocation T-8 - Account of Expenditure Form for Financial Reports T-9 - Annual Requirement of Staff T-1O - Estimated Cost Recovery T-11 - Estimated Farm Budget and Project Rent T-12 - Present and Projected Cropping Pattern T-13 - Agricultural Production T-14 - Summary of Prices and Conversion Factors T-15 - Present Value of Expected Net Incremental Benefits for Different Timing of Construction T-16 - Costs and Benefits Streams for ERR T-17 - Sensitivity Analysis ANNEX 2 - Design Criteria, Construction Methods and Quality Control ANNEX 3 - Water Management ANNEX 4 - Arrangements for Weir Failure ANNEX 5 - Economic Analysis ANNEX 6 - Related Documents and Data Available in the Project File LIST OF CHARTS 1 - Layout Plan of Mahanadi Barrage 2 - Layout Plan of Birupa Barrage 3 - Cross Section of Spillway of Mahanadi Barrage 4 - Cross Section of Spillway of Birupa Barrage 5 - Pert Chart 6 - Implementation Schedule 7 - Organization Chart LIST OF MAPS IBRD 15010 - Location Map IBRD 15011 - General Layout  INDIA MAHANADI BARRAGES PROJECT I. BACKGROUND Agriculture in India 1.01 India covers some 3.27 million km of which 49% is cultivable and about 15% irrigated. India's population of about 660 M is growing at an annual rate of 1.9%. National income has grown at about 3.3% per annum since 1960 and the per capita income reached about US$180 in 1979/80. Although the average per capita income has slightly increased in recent years, there has been little change in the living standards of the masses of some 330 M urban and rural poor with income below the poverty line of US$80 per capita. 1.02 Agriculture is the dominant sector of the Indian economy and consti- tutes about 45% of the Gross National Product (GNP). It engages about 70% of the labor force and provides the base for about 60% of India's exports. During the last decade, the Government of India (GOI) has devoted considerable attention to agriculture in its development plans. To support agricultural growth, GOI has modernized and expanded its agricultural credit institutions and accelerated the development of irrigation. Its agricultural and rural development strategy gives a special emphasis to: (i) expansion of irrigated area; and (ii) concurrent implementation of supporting programs to optimize the use of land and water resources. The State of Orissa 1.03 Salient Features. The State of Orissa, covering some 15.5 M ha, is located in the Eastern Region. Its population of about 26 M is predominantly (92%) rural; the average population per village--about 410--is the smallest in the country and only si! towns have a population greater than 50,000. Population density (141/km in 1971) is about 80% of the all-India average. About 39% of the population belong to scheduled tribes and castes 1/, a proportion of disadvantaged people which is the largest among the States of India. "Small" and "marginal" farmers (owning less than 2 ha) operate over 75% of the holdings but control less than 40% of the cultivable land while farmers with 5 ha or more account for only 7% of the holdings but control 35%. The individual holding is highly fragmented. The average per capita income, about Rs 785 is among the lowest in India. The incomes of about 90% of the rural population are estimated to be below the poverty line compared with 40% for India as a whole. 1.04 Health and education standards are low. Literacy rate is only 26% compared with the all-India rate of 29% and there are only 40 hospital beds per 100,000 of population compared with 71 for India. Orissa has vast forest and mineral resources. It ranks third in India in forest resources, with 40% 1/ The term "scheduled castes and tribes" refers to lower castes and tribal people of India scheduled in articles 341, 342 and 366 of the Indian Constitution. Broadly, the groups embraced in the classification are harijans and other low castes, and most tribes.  -2- of its land area under forests and is rich in iron, chromite, manganese, coal, limestone and other minerals. 1.05 The economy of the State centers on agriculture, which provides employment for 79% of Orissa's working population and accounts for 69% of State Net Domestic Product (NDP). The contribution of industry has been low, 12% of NDP and 7% of employment although the potential for further growth is high in view of the State's mineral and forest wealth. The NDP is highly vulnerable to vagaries of weather because the erratic distribution of rainfall often results in severe flooding and droughts. Economic growth in Orissa has been lagging behind the rest of India. Between 1960/61 and 1977/78, the NDP grew at an annual rate of 2.3% compared with 3% for India as a whole. 1.06 Agricultural Production. The net sown area is about 6.0 M ha (39% of the State area) of which 1.1 M ha (18%) is irrigated. Paddy is the pre- dominant crop, covering 70% of the cropped area but yields are low, ranging from 1.0 tons/ha for rainfed kharif to 2.1 tons/ha for irrigated rabi paddy, respectively. High yielding paddy varieties account for most of the rabi crop but only for about 10% of the kharif crop. Other crops such as cereals other than paddy (7% of the cropped area), pulses (14%) and oilseeds (6%) are grown mostly in upland areas. The yields of most crops have virtually stagnated during the 1970s. 1.07 Irrigation Development. Although the average rainfall is high (1,500 mm) there are considerable variations in both the total amount and its distribution and even in the rainy (kharif) season supplementary irri- gation is necessary for high and stable yields. In the dry (rabi) season (November to April) intensive cropping is not feasible without irrigation. Orissa has vast water resources which are sufficient for irrigating about 4 M ha in the kharif and 2.4 M ha in the rabi season. Irtigation development started in the second half of the nineteenth century in the delta areas where about 150,000 ha were brought under kharif irrigation. During the first half of this century, the canal irrigated area remained virtually unchanged. However, since 1950 the Government of Orissa (GOO) has completed two major irrigation projects (Salandi and Hirakud) as well as a number of medium ones and substantially extended the Mahanadi delta system. Simultaneously with irrigation development in new areas, GOO is now facing the need to renovate the old Mahanadi delta system (which is over 100 years old) to ensure the continuity of irrigation. 1.08 Bank Group Support. The Bank has assisted with the implementation of several agricultural development projects in Orissa: The Salandi Irriga- tion Project (Credit 14-IN, 1961, US$8.0 M) was one of the first irrigation projects supported by the Bank Group in India. A review of Orissa's agricul- tural potential and development constraints was conducted in 1975 jointly by IDA, GOI and GOO. 1/ The Orissa Agricultural Development Project (Credit 682-IN, 1977, US$20.0 M) which assists improvement of extension and research services, and the Orissa Irrigation Project (Credit 740-IN, 1977, US$58.0 M) which supports development of medium irrigation projects, land consolidation 1/ "India: Eastern Region Foodgrains Production Review (Orissa)", IBRD, Report No. 972-IN, February 1976.  -3- and construction of watercourses are currently under implementation. The progress of both projects is satisfactory. With respect to Credit 682-IN, there are indications that the quality of extension in the State has improved. Farmers appear to be well aware of the visit day of the Village Level Worker (VLW) and the adoption rate of simple cultural practices has increased. With respect to Credit 740-IN there has been a continuous improvement in the implementation of the medium irrigation component and the progress with land consolidation has been good (para 2.12). The implementation of the water- courses component (3.5% of project cost) has encountered difficulties which are likely to be alleviated soon (para 2.13). II. THE PROJECT AREA Location 2.01 The area benefitting from this project is the old Mahanadi Delta area of 167,000 ha of cultivable command area (CCA) in the District of Cuttack (Map 15010). The town of Cuttack which is the largest in Orissa (population 350,000) is in the northwestern apex of the project area near the sites of the proposed barrages. Transport facilities in the project area are good and its main parts are connected by all-weather roads. Paradip, Orissa's main port is located in the southeastern part of the project area. Climate (Annex 1, T-2) 2.02 Climate in the project area is tropical. The average rainfall is about 1,560 mm, falling mostly during the southwest monsoon from June to September (76%), and during the northeast monsoon from October to December (13%). Temperatures and humidity are high throughout the year. The mean maximum monthly temperatures range from 31 C to 430 C and the mean minimum from 120 C to 240 C. The mean maximum monthly humidity ranges from 71% to 83% and the mean minimum from 41% to 81%. Topography, Soils and Drainage 2.03 The project area is generally flat, sloping slightly (less than 0.02%) towards the sea. It is intersected by branches of the Mahanadi river and by numerous drains and creeks in the lower parts. The soils range from coarse sand to clay, depending on the type of alluvium. They are moderately fertile, having sufficient potash but lacking in nitrogen and phosphoric acid, and are slightly acid to neutral. 2.04 Drainage is poor in many parts of the project area. Many of the main drains which were constructed over 100 years ago have silted and require rehabilitation. Moreover, drainage obstructions have been created by new road and railway constructions. Although most of the river branches have embankments to prevent flooding of adjacent areas in the rainy season, breaches often occur especially during high floods and further aggravate the drainage situation. Since 1978, GOO has undertaken a rehabilitation program of the primary drainage network. The program provides for renovation of 303  -4- km of main drains serving about 27,000 ha, at an estimated cost of Rs 28 M. Further improvements in the drainage system down to the secondary and tertiary drainage ditches are being planned. However, due to the absence of a compre- hensive drainage plan, drainage works have been done on a piecemeal basis and have not been as effective as they could be. Preparation of such a plan is proposed under the project (para 4.05). Agricultural Holdings 2.05 Agricultural holdings in the project area are small and fragmented. There are (1976/77) about 190,000 holdings cultivating about 167,000 ha, an average of about 0.9 ha per holding. About 61% of the landholders operate 32% of the land in farms of 1.0 ha or less, 34% operate 49% of the land in farms of 1.0-3.0 ha and 5% operate 19% of the land in farms larger than 3.0 ha. The average individual holding consists of about 12 separate plots which makes its operation and management difficult and would benefit from consolidation (para 2.11). The average number of persons per farm household is about five and the total population in the project area is estimated at about 1.0 M. Agricultural Production 2.06 Paddy which is the predominant crop is grown on about 85% of the gross cropped area (89% in the kharif, 76% in the rabi). Pre-monsoon jute (20,000 ha, 7%) is generally grown before kharif paddy. Pulses and ground- nuts, each crop occupying 10,000-12,000 ha (4% of the gross cropped area) are grown during the rabi season. 2.07 Yields are low and have remained stagnant during the last decade. Kharif paddy averages 1.4 tons/ha for local varieties and 1.8 tons/ha for high yielding varieties (HYV), while the yield of rabi paddy is 1.6 tons/ha for local varieties and 2.5 tons/ha for HYV. The average yields per ha of jute, groundnuts and pulses are 1.7 tons, 1.8 tons and 0.5 tons, respectively. HYV account for 94% of the rabi paddy area but only for 20% of the kharif paddy area. The amount of fertilizer used is considerably below that recommended by research and extension staff. 2.08 The heavy monsoon rains reduce the profitability of inputs used during the kharif because of: (i) poor drainage; (ii) fertilizer (especially nitrogenous) is often washed away immediately after application; and (iii) pest control is difficult because insecticides are washed away by the frequent rains. Therefore, HYV, which require intensive inputs, have been adopted in the kharif at a much lower rate than in the rabi season. 2.09 The amount of water available for irrigation during the rabi season is limited and, with paddy being the main crop, is sufficient for irrigating about 50% of the CCA. The net value of production in the rabi season could be considerably increased if paddy is replaced by crops like groundnuts which provide a higher return per unit of water. A greater diversification of crops would be desirable also from a crop rotation viewpoint. 2.10 There has been an increase in groundnut area (from 100 ha in 1960/61 to 10,000 ha in 1978/79), probably in response to its higher profitability. However, the area which can be planted to this and other high value rabi crops  - 5 - However, the area.which can be planted to this and other high value rabi crops which are more sensitive than paddy to the timing of irrigation is limited because the existing field-to-field irrigation system cannot provide a reliable water supply. The on-going program of land consolidation and transition from the field-to-field system to irrigation from watercourses (see below) should improve the situation. Land Consolidation and On-Farm Development 2.11 Under Orissa Irrigation Project (Credit 740-IN) provisions were made for consolidation of 144,000 ha in the Mahanadi delta area and for construction of watercourses and drains in 48,000 ha. The cost of watercourses and drains was to be financed through institutional credit to individual farmers. The progress with land consolidation has been satisfactory, although slower than anticipated at appraisal, but no progress has been made with construction of watercourses. 2.12 By the end of June 1980 about 55,000 ha were consolidated compared with an appraisal target of 95,000 ha. GOO anticipates completion of land con- solidation over the entire Mahanadi delta area by 1983/84. Farmers are well aware of the advantages of land consolidation and this is reflected by an increase of about 50% in the sale value of land following consolidation. However, the main benefits from consolidation can be realized only if irriga- tion from watercourses is introduced. 2.13 The progress with construction of watercourses has been slow mainly due to financing difficulties. Farmers' demand for credit has been poor. The large number of small plots, the need to obtain the agreement of each farmer and to investigate his credit worthiness make institutional credit procedures slow, cumbersome and expensive in relation to the small amount of a typical loan (less than Rs 500). Aware of these problems, GOO has recently decided to finance the construction of watercourses to blocks of 5 to 8 ha from its budgetary sources and to recover part of the cost from the farmers. It has not yet acted however because it anticipates recovery difficulties and would like to determine the magnitude of farmers' participation and recovery procedures before commencing the works. 2.14 Following the construction of watercourses GOO plans to introduce a rotational water supply (RWS) like the warabandi, mainly in the rabi season, to improve the equity and the reliability of water supply. The introduction of RWS is expected to encounter objections especially from farmers whose fields are located at the head reaches of the distribution system who have been using more than their equitable share of water. These difficulties can be minimized if the sequence of consolidation, construction of watercourses and introduction of RWS is well coordinated so that the farmer receives his consolidated field which is adjacent to a government managed watercourse outlet and is immediately informed of the RWS arrangements. RWS systems have been operating successfully in northern India and should succeed also in Orissa. However intensive experimentation with the operation of the system on a sizable scale would be required in order to adapt it to local conditions and to demonstrate its advantages to the farmers. Such demonstration which is expected to increase the farmers' interest in improving the water distribution system and their willingness to participate in its finance is proposed under the project (para 4.06).  -6- Supporting Services 2.15 Extension. The Training and Visit system has been introduced as a part of the reorganization of the extension services under the Orissa Agricul- tural Development Project (Cr. 682-IN) and the extension services were brought under a single line of command. Extension staff allocation is based on the following ratios: one Village Level Worker (VLW) per 400-800 farm families; one Agricultural Extension Officer (AEO) per 8 VLW; one Additional District Agricultural Officer per 6-8 AEO. Subject Matter Specialists provide regular support and training to the VLW. 2.16 Agricultural Research. The Orissa University of Agriculture and Technology has the principal responsibility for agricultural research in the State. The Central Rice Research Institute (CRRI) of the Indian Council of Agricultural Research (ICAR), at Cuttack, carries out specialized research on rice. CRRI, which was established in 1946, develops rice HYV for improved yields under different agro-ecological conditions throughout India, and with resistance/tolerance to major pests and diseases. 2.17 Agricultural Inputs. Availability of agricultural inputs is adequate. The State Seed Corporation is responsible for production, process- ing and marketing of quality seed. Sale is mainly through block level sale centers of the Department of Agriculture. Fertilizer and insecticides are sold through over 700 private and cooperative outlets. 2.18 Marketing. Marketing arrangements are satisfactory. Four regional cooperative marketing societies are engaged in marketing agricultural produce in the project area, especially rice, pulses and oilseeds. The Jute Coopera- tive Marketing Society and representatives of private mills purchase jute. Cold storage for potatoes is available in two plants in Cuttack. 2.19 Credit. Seasonal credit is provided by the Primary Cooperative Credit Societies and by commercial banks (CB). The following CB have branches in the project area: State Bank of India, United Bank of India, Allahabad Bank and Canara Bank. Credit services are satisfactory. III. THE MAHANADI DELTA IRRIGATION SYSTEM Background 3.01 Development of the canal system in the Mahanadi Delta started in the 1860s. The main purpose was to utilize the Mahanadi water for irrigation and navigation and to establish some measure of flood control. Development works included the construction of weirs on the Mahanadi, Birupa and the Kathjori rivers, three main canals and their distribution system (Map 15010). The main canals are: (i) the High Level Canal on the left bank of the Birupa river, which extends to the Brahmani river; (ii) the Kendrapara canal on the right bank of the Birupa river; and (iii) the Taladanda canal on the right bank of the Mahanadi river. These canals were a part of the largely navigable Orissa Canals system but their importance for navigation has declined in recent years. In the period 1975 to 1979, the tonnage transported through  -7- the three canals averaged 111,000 tons per annum, compared with an average of 239,000 tons per annum in the period 1960 to 1965. 3.02 Initially, irrigation was limited to the kharif season and covered about 80,000 ha in the old delta. Following the completion of the Hirakud dam on the Mahanadi river (1957) irrigation in the Mahanadi delta expanded considerably: (i) the CCA in the old delta was more than doubled (to 167,000 ha) and rabi irrigation was introduced; and (ii) kharif and rabi irrigation was extended into the new delta area with about 136,000 ha of CCA in the Puri district. Hydrology 2 3.03 The Mahanadi river catchment area covers about 132,000 km . The river's flow is regulated by the Hirakud dam (located about 300 km upstream of Mahanadi weir) which is used for irrigation, flood control and power gene-3 ration. The capacity of the Hirakud reservoir is 8,100 Mm of which 5,800 Mm is live storage. Water supply to the Mahanadi delta areas (old and new) comes from the releases of water for irrigation and power generation and from the inflow fr2m the Mahanadi catchment downstream of the Hirakud dam (about 50,000 km ). 3.04 Water availability at the head of the Mahaiadi delta (for the whole delta's 300,000 ha of CCA) is Sstimated at 50,000 Im during the kharif season (July to October) and 6,630 Mm (of which 5,500 Mm come from Hirakud) during the rabi and hot seasons (November to June). Experience with irrigation in the delta area indicates that with the existing water supply system and irri- gation practices, this amount of water would be sufficient for supporting the following cropping pattern: Area '000 ha % Pre-kharif: Jute 20 12 Kharif: Local paddy 117 70 HYV paddy 50 30 Rabi: Dalua paddy 70 42 Gram & pulses 10 6 Groundnuts 12 7 Total Crop Area 279 Crop Intensity 167 3.05 The consolidation of holdings and introduction of irrigation from watercourses (paras 2.11 to 2.14), are expected to increase irrigation effi- ciency and result in diversification of the cropping pattern and an increase in the proportion of the area irrigated. Preliminary findings of field studies conducted in small experimental areas in the new delta indicate that as a result of a change from field-to-field system to irrigation from water- courses the area irrigated increased by 21% in the kharif and 35% in the rabi season.  -8- 3.06 Groundwater. There are abundant groundwater resources in the delta area which could be utilized in the future to supplement canal irrigation. The Existing Weirs 3.07 The two existing weirs, across the Mahanadi and its branch the Birupg river, were completed in 1863 and 1868 respectively. They divert some 190 m /sec into the three canal systems serving 167,000 ha of CCA in the old delta (Map 15010). Both weirs were founded on sand and their foundations consist of two rows of wells, constructed of clay bricks and filled with rubble masonry. Their body is built of 1.5 m rubble masonry, finished with 0.90 m thick stone masonry and is topped with steel crest shutters. The original crest (top of shutters) elevation for Mahanadi weir was at +20.65 m and for Birupa at +20.55 m. 3.08 Since their construction both weirs have been frequently damaged by heavy floods and extensive scour areas up to 6 m deep have been observed downstream of the apron. Although so far successfully repaired each time, both weirs have been gradually weakened. In order to increase the area com- manded to 167,000 ha (para. 3.02), the crest was raised in the period 1958 to 1962 by 55 cm at Mahanadi weir and 45 cm at Birupa weir by replacing the old shutters with new ones. The extra strain of the higher pond level on the 100 year old structures has further weakened the weirs. As a measure of protection, concrete blocks (2.5 m x 1.5 m x 1 m) are being cast in situ on the sloped downstream aprons where settlement occurs and submerged groynes are constructed to control lateral flow. Since 1975 heavy stones weighing 3 to 4 tons have been placed to protect downstream scours. However, despite these measures the condition of the weirs has continued to deteriorate. 3.09 The Risk of Failure. The Mahanadi weirs belong to a generation of weirs which were constructed in India over 100 years ago (e.g., Krishna, Godavari) have reached the end of their technical and economic life and have been gradually replaced. Several such weirs have failed in recent years, causing total suspension of irrigation for one to three years, the most recent occurrence being the failure of the Godavari weir in Andhra Pradesh. This weir which was built in 1852, failed in 1975, during the construction of the new barrage to replace it (financed under Credit 532-IN). The main causes for failures of weirs of this type are: (a) Deep scour downstream of the apron due to heavy retro- gression and formation of an hydraulic jump beyond the floor. (b) Excessive exit gradient and consequent piping. (c) Excessive uplift pressure on the floor. (d) Insufficient depth of cut-off upstream and downstream of the weir for protection against scouring and piping. (e) Uneven concentration of flood intensity due to the forma- tion of shoals upstream of the weir.  - 9 - (f) High velocity cross flow on the downstream apron due to formation of shoals downstream of the weirs. 3.10 The Mahanadi and Birupa weirs have most of the above potential failure indicators and, consequently, are liable to breach in the near future. The situation in the Birupa weir is especially alarming anu is considered to be as serious as that of the Godavari weir before its failure. A number of its central bays have subsided and this is a warning signal indicating the possibility of a total collapse. The situation in the Mahanadi weir is also serious. 3.11 Effect of Weir Condition on Farmers' Behavior. As indicated (para. 2.11), GOO has launched a program for land consolidation and transition to irrigation from watercourses. Under normal conditions this would increase the reliability of water supply and encourage farmers to intensify production. However, as farmers in the area are aware of the poor condition of the exist- ing weirs and the imminent risk of their failure, they delay investment in irrigated crops and would not exploit the full potential of an improved irrigation system until the new barrages are constructed. 3.12 Operational Defects. The existing weirs have a number of structural and operational defects, especially the following: (a) Seepage and leakage of water. Water losses resulting from excessive seepage underneath the structures and leakage through ths crest and sluice shutters are estimated at 30 to 40 m /sec. If these losses could be avoided, an additional area of 16,700 ha could be irrigated during the rabi season. (b) Control of shutters. The weirs have automatic falling shutters which do not operate satisfactorily. Some of them may fall as a result of waves produced by strong winds, which cause a decline in the pond level and dis- rupt the water supply, while others do not fall even at high river discharges thus causing non-uniform flow dis- charge over the weir and increasing downstream apron damage. The manual lifting of the shutters is very slow and on the average it takes 6-10 days to raise them after a flood and 12-18 days to restore the pond to full supply level. Such long interruptions in irrigation reduce the yields. (c) Siltation. The weirs have no arrangements for prevention of siltation. The canals have to be closed periodically for removal of silt and this interrupts irrigation and reduces yields.  - 10 - IV. THE PROJECT Objectives 4.01 The main objective of the project would be to construct new barrages in place of the existing weirs in order to: (i) ensure continuity of the irri- gation system in the old delta; and (ii) create the necessary conditions for improvements in the water distribution system and for increased production. Detailed Features 4.02 Mahanadi Barrage. The new barrage would be located 60 m downstream of the old weir on a parallel axis and use the structure remaining after dis- mantling the part above elevation +17.20 m as an upstream protective apron. The barrige would be 1,935.5 m long and is designed for a maximum flood of 15,300 m /sec (about 100 years return frequency). It would have 76 bays for the spillway, separated by 69 single concrete piers and six double piers separating the seven structural units of 12 to 13 bays. The piers support a reinforced concrete two-way road bridge 7.32 m wide, as well as the gate operating platform and walk way. On each end of the barrage there would also be 10 bays for the undersluices, separated by concrete piers and one bay for the fish ladder. Steel leaf gates for the spillway and for the undersluices will maintain the pond level at the present +21.20 m elevation. 1/ The down- stream erosion protection will be secured by a mat of heavy concrete blocks. The barrage would be founded on sand and steel sheet-piles would be provided at the upstream and downstream limits of the sill slab extending down to an elevation of 4.50 m for protection against underseepage. The barrage layout and a typical section of the spillway are shown in Charts 1 and 3. Detailed technical description is in Annex 2. The general layout of the two barrages is in Map 15011. 4.03 Birupa Barrage. To secure better foundations, and for topographical considerations, the new barrage would be located 300 m downstream of the existing weir. Its length would b5 180 m compared to 635 m of the old weir. It has been designed for a 2,070 m /sec maximum flood (about 100 years return frequency). It would have 13 bays for the spillway and two bays for the under- sluices, on the left side of the river. The bays would be separated by 13 concrete piers and one double pier. The barrage layout and a typical section of the spillway are shown in Charts 2 and 4. Detailed technical description is in Annex 2. 4.04 Head Regulators. The existing three head regulators would be replaced by new structures adapted to the new diversion conditions and permit- ting a more efficient operation. The new structures would be sized for an increased maximum discharge to serve future new areas once additional water supplies are available for the northeastern delta area by the construction 1/ The height of the barrage at pond level would be about 7 m above stream bed. This applies also to Birupa Barrage.  - 11 - of a new storage dam downstre m of Hirakud. 1/ The design discharge of each head regulator would be 142 m /sec. The waterway would comprise three bays, 10.00 m each, with two piers 1.50 m thick. The crest level would be at +18.40 m and the stilling pool level would be at +17.25 m. (a) Taladanda-Machhagaon Canal Head Regulator. Upstream of the right abutment of the Mahanadi barrage. The full supply level (FSL) would be at +20.23 me (b) Kendrapara-Pattamundai Canal Head Regulator. This regu- lator would be shifted for hydraulic reasons, from the right bank of Birupa river to the left bank of the Mahanadi and reattached to the existing system by 1.200 m of new head canal. The FSL would be at +20.23 m. (c) High Level Canal Head Regulator. This regulator would be relocated upstream of the left abutment of the Birupa barrage and reattached to the High Level Canal by a short new head canal. The FSL would be at +20.52 m. The excess capacity of the regulator is intended to be used in the future by extending the High Level Canal in the Brahmani Delta once additional water supplies are available. Al- though its designed discharge is almost 8-times greater than the present 18.62 m /sec discharge, the incremental cost of the additional capacity would be small and it would be cheaper and more advantageous to build it at the ultimate size now rather than to increase its capacity in the future. 4.05 Drainage Master Plan. In order to prepare comprehensive solutions to the drainage situation (para 2.04) the project would finance a Drainage Master Plan (DMP) for the whole Mahanadi delta area (about 300,000 ha) cover- ing the main and intermediate level drainage systems. Preparation of the plan would involve detailed investigations pilot operations and selected works leading to: (i) determination of the extent of the area requiring improvement of drainage, by type of improvement and by priority; (ii) development of design criteria and solutions for drainage of low lying areas; (iii) identifi- cation of flood protection improvements required to prevent breaches of river embankments; and (iv) preparation of a detailed and comprehensive master plan including estimates of costs and benefits. It is anticipated that preparation of the plan would require the use of specialized consultants. Its implementa- tion would be undertaken by the Irrigation and Power Department (IPD) of GOO or be contracted to an agency/institute having appropriate expertise and experience. 4.06 Water Management. The economic analysis of the project indicates that its economic viability would be considerably increased (para. 7.07) if 1/ It has not yet been determined when the new dam would be constructed.  - 12 - the introduction of irrigation directly from watercourses (para 2.13) is expe- dited. To speed up the process, the project would finance a program of water management pilot operations which would include construction of watercourses and field drains and introduction of RWS over an area of a typical distribu- tary (about 1,000 ha) and, if necessary, improvement of the conveyance system leading to this area. Guidelines are in Annex 3. 4.07 Emergency Arrangements and Buildings. The project would finance the purchase of equipment for preparatory works, supervision and for emergency arrangements (para 5.07), the stockpiling of building materials and the cost of repairs in the case of weir failure. To facilitate implementation, the project would finance the construction of offices, stores, workshops, labora- tory, residential buildings and other structures required for management and supervision of the project. Engineering Design 4.08 The barrages sites were recommended by a special committee set up by GOO which considered alternative locations. Foundation exploration, hydraulic model studies and detailed designs for civil engineering works have been completed and would serve as a satisfactory basis for tendering. Design work was carried out by the Central Water Commission (CWC) of GOI and finalized on the basis of model studies conducted at its laboratories in Poona. The design standards are satisfactory. Responsibility for the preparation of working drawings rests with CWC and for construction specifications, negotiations of contract and supervision of construction with the IPD. Implementation Schedule 4.09 Implementation of all civil and mechanical engineering works would take five and four years for the Mahanadi and Birupa barrages, respectively. This schedule is based on the assumption that a considerable part of the ancillary activities, such as land acquisition, construction of site build- ings and approach roads would be completed in the first year. The tendering procedures and award of contracts for the main civil works would also be completed in the first year. 4.10 During the dry season, November to June, construction operations would be carried out in three shifts. The manufacture and installation of all gates and hoists would be carried out during the last three project years. Detailed implementation schedule is in Charts 5 and 6. V. COST ESTIMATES AND FINANCIAL ARRANGEMENTS Cost Estimates 5.01 The total project cost is estimated at US$110.3 M net of taxes and duties (which are negligible). This amount includes a foreign exchange component of about US$27.1 M or about 25% of the project cost.  - 13 - 5.02 Costs of civil works are based on April 1980 unit rates for similar works. Physical contingencies average about 25% for civil works and 10% for mechanical engineering works. Estimated price contingencies, which account for about 31% of project costs, are based on expected inflation rates of 10% in 1980, 7% in 1981 to 1983 and 5% thereafter. Cost estimates are detailed in Annex 1, T-3 and summarized below: % of Base Local Foreign Total Local Foreign Total Cost ---------Rs M-------- --------US$M--------- Civil Works 320.2 80.0 400.2 38.1 9.5 47.6 67.2 Mechanical Engineering 40.3 60.0 100.3 4.8 7.1 11.9 17.0 Engineering, Supervision and Administration 75.4 4.0 79.4 9.0 0.5 9.5 13.2 Drainage Master Plan 10.0 2.0 12.0 1.2 0.2 1.4 2.0 Water Management Program 2.4 0.6 3.0 0.3 0.1 0.4 .0.6 Base Cost 448.3 146.6 594.9 53.4 17.4 70.8 100.0 Physical Contingencies (18.5%) 83.0 27.1 110.1 9.9 3.2 13.1 Price Contingencies (31.4%) 167.0 54.5 221.5 19.9 6.5 26.4 Total Project Cost 698.3 228.2 926.5 83.2 27.1 110.3 Financing 5.03 The proposed IDA credit of US$83.0 M would finance about 75% of total project cost including the foreign exchange component (US$27.1 M) and about 67% of the local cost. All the expenditures would be met by GOO from its development budget, which includes a GOI contribution. 5.04 The credit would be made to GOI on standard IDA terms. GOI would make the proceeds of the credit available to GOO on GOI's standard terms and arrangements for development assistance to the States. An agreement has been reached with GOO that it would provide sufficient funds and materials to execute the project in accordance with the five-year project implementation program. To ensure timely undertaking of preparatory activities, mainly construction of approach roads, site buildings and procurement of mild steel for reinforcement, retroactive financing would be provided for procurement of materials and for civil works carried out after appraisal but before the signing of the loan documents. The amount of such financing would not exceed US$1.0 M. Procurement 5.05 Civil and Mechanical Engineering Works financed under the project would cost about US$60 M excluding physical and price contingencies, engineer- ing and administration costs. Of these, about US$58 M would be let through International Competitive Bidding (ICB) and the remainder would be let through Local Competitive Bidding (LCB) in piecework contracts or be carried out by GOO's departmental forces. Works awarded through ICB would include the following:  - 14 - (a) Construction of the two barrages and three head regulators (one contract)--about US$46 M. Invitations to bid are to be issued by November 15, 1980 and the contract would be awarded by June 1, 1981. (b) Manufacture and installation of the gates--about US$12 M. Invitations to bid would be issued by May 1, 1981 and the contract would be awarded by December. 31, 1981. Indian contractors bidding for the civil works contract would be entitled to a 7.5% preference. For gate manufacture and installation, the usual preference limited to 15% of cif price of imported goods, or the prevailing customs duty if lower, would be extended to local bidders during bid evaluations. Tender documents would specify the requirement for preference eligibility and the manner of its application. Piecework contracts and works carried out depart- mentally would include mainly riverbed preparation, access roads, site build- ings and staff housing (Annex 1, T-4). 5.06 The CWC has recently developed model ICB and LCB contracts and pro- cedures for works procurement which have been approved by IDA. The GOO has adopted these models in most respects and will use them for the procurement of works under the project. 5.07 Equipment. The estimated base cost of equipment and vehicles for preparatory works, supervision and for emergency repairs in case of weir failure is US$1.7 M. The equipment would be procured locally through LCB procedures, since there is an adequate local supply at competitive prices and foreign firms are not likely to be interested, and in order to enable utilization of existing servicing and spare part supply facilities. A list of equipment is in Annex 1, T-5. Disbursements 5.08 Disbursement would be made for: (i) 85% of expenditures for civil and mechanical engineering works; (ii) 100% of the ex-factory price or 70% of expenditures for locally procured equipment; and (iii) 100% of the cost of the Drainage Master Plan and the water management program. Disbursements for works carried out departmentally and for payments of less than Rs 300,000 under civil and mechanical engineering works contracts and Rs 150,000 for equipment and vehicles would be made against certificates of expenditure submitted by GOO. Documentation for these works would be retained by GOO and made available for inspection by IDA during review missions. Full documenta- tion would be required for all other disbursements. The estimated schedule of disbursements and the proposed allocation of the credit are in Annex 1, T-6 and T-7. It is expected that disbursements would be completed by March 31, 1987. Accounts and Audits 5.09 The project would be subject to normal Government control and audit- ing procedures which are satisfactory. A resident Audit Officer, represent- ing the State Accountant General (AG) would audit the project accounts.  - 15 - Although continuous and annual audits are carried out in a timely manner, the Statutory Audit Report presented to the Legislature takes a long time to be finalized. It would be essential therefore to have interim certified statements of account. Such statements certified by the AG or his designee supported by an itemized account and a summary of expenditures would be submitted to IDA as soon as possible after the end of each fiscal year. To facilitate comparisons between planned (appraisal estimates) and actual expenditures, project records maintained under the standard accounting prac- tices would also be classified according to the categories used in this report (Annex 1, T-8). Agreements have been reached with GOO that it would: (i) maintain separate accounts on project expenditures; (ii) ensure that these accounts would be audited annually by the AG and the resulting reports would be submitted to IDA as soon as possible but not later than nine months after the end of each fiscal year; and (iii) make complete accounts and financial statements available for inspection during IDA review missions. VI. ORGANIZATION AND MANAGEMENT General 6.01 Overall responsibility for project implementation would be with the IPD, under the Chief Engineer, Irrigation. IPD has established a special unit headed by an Additional Chief Engineer (ACE) for project execution. This unit would also prepare detailed construction drawings, specifications and tender documents and will have a separate cell for accounts and audits. 6.02 The ACE would be assisted by an Assistant Additional Chief Engineer and two Executive Engineers (EE) for design and quality control. A Superin- tending Engineer (SE) located near the barrages' sites, would be responsible for contract management and supervision. He would be assisted by four EE: three for civil works (two for Mahanadi and one for Birupa) and one for mechan- ical works to supervise erection of gates and hoists. Each EE would have four Assistant Engineers (AE) as well as Junior Engineers (JE) and other supporting staff as required for the support and supervision of a three shift contract work. Qualified staff for these tasks are available within the IPD. Details of staff requirements and project organization are in Annex 1, T-9 and in Chart 7. 6.03 Responsibility for adequate construction standards would be with the IPD, which would assign qualified staff for supervision, with particular emphasis on quality control based on the standards prescribed by the Indian Standards Institute (ISI). To ensure the safety and proper functioning of the barrages, any changes or additions to the original design would require approval by the CWC. CWC would conduct periodic inspections to ensure that work has been carried out in accordance with their design and specifications. 6.04 The main responsibility for the water management program (para. 4.06 and Annex 3) would be with the Command Area Development Department (CAD) of GOO. IPD would be responsible for improving the main conveyance and drainage systems serving the pilot water management area and for timely  - 16 - water supply. Responsible for preparation of the drainage master plan (DMP) would be with the IPD (para 4.05). Arrangements for Weir Failure (Annex 4). 6.05 Because the existing weirs are very vulnerable, there is a likeli- hood that they would fail during the construction of the new barrages. Such a failure would cut off agricultural and urban water supply, and may delay the construction of the new barrages and increase their costs. In order to minimize potential damages the IPD has prepared a contingency plan for weir failure based on lessons from past weir failures (e.g., Krishna, Godavari). The plan specifies the hierarchy of responsibilities, the method of repairs and the equipment and materials required. An agreement has been reached with GOO that materials essential for emergency repairs (Annex 4) would be stock- piled near the weir sites. Monitoring, Evaluation and Reporting 6.06 Monitoring and Evaluation. IPD would monitor project implementation through regular progress reports submitted by the ACE. Responsibility for monitoring and evaluation of water management program would rest with the State Evaluation Organization of GOO which would conduct special studies for that purpose, paying a special attention to the reliability and equity of the water supply. 6.07 Reporting. GOO would submit to IDA semi-annual and annual progress reports within three months after the end of each reporting period. The reports should (i) compare actual implementation with the plan in physical and financial terms; 1/ (ii) review the progress with implementation of the water management and DMP programs; (iii) describe serious deviations and explain the reasons; and (iv) provide a revised implementation program for the following period. An agreement has been reached with GOO that it would submit to IDA a project completion report not later than six months after its Closing Date. Cost Recovery (Annex 1, T-10 and T-ll) 6.08 Capital Costs. The capital costs of the new barrages would amount to Rs 4,220 per ha of CCA. To recover these, assuming an economic life of 50 years and 12% interest, would require collection of about Rs 508 per ha. The incremental O&M cost of the new barrages is estimated at Rs 20 per ha per year. The total incremental capital recovery and O&M costs per annum would therefore amount to Rs 528 per ha. 6.09 Water Charges. Water rates in Orissa are fixed per unit area and vary according to the crop and the season. GOO plans to shortly (rabi 80/81) raise the water rates considerably - by 100% for kharif paddy and about 50% for other crops as published in the Orissa Gazette dated June 12, 1979. The increased charges would range from Rs 10 to Rs 230 per ha and for the present 1/ Preliminary financial estimates; certified financial data would be reported in accordance with the conditions set in para 5.09.  - 17 - cropping pattern in the project area the average water charge per ha of CCA would amount to about Rs 112. 6.10 Other Charges and Taxes. Land revenue levels vary according to soil type, location and the suitability for double cropping, and average about Rs 20 per ha. In addition a cess equal to 50% of th, land revenue is charged. An important source of revenue is sales tax on agricultural goods, which amounts to 4% on most agricultural produce (excluding vegetables and sugarcane) and 7.5% on fertilizer and insecticide. 6.11 Level of Cost Recovery. The direct and indirect annual incremental revenue from irrigated farming amount to the following: Rs/ha Water Charges 112 Incremental land revenue and cess 12 Incremental sales tax 132 Total 256 This is about 48% of the estimated annual capital and O&M costs of the new barrages and 25% of the project's rent. 1/ 6.12 The Potential for Increased Recovery. Irrigation charges in Orissa are amongst the lowest in India. To a large extent their low level reflects the unsatisfactory irrigation service, especially the unreliable water supply during the rabi season, the constraints on diversification of crops inherent in the field-to-field water distribution system and the poor drainage. The standard of irrigation service can be expected to improve when the construc- tion of watercourses picks up as a result of GOO's decision to finance their construction to the 5 ha outlet from government budget. 6.13 With the forthcoming increase in irrigation charges (para 6.09) and the partial recovery of watercourse construction costs (para 2.13), farmers in the project area would face a steep increase in the cost of irrigation services. It would be difficult to impose on them an additional levy for financing the new barrages, especially since these would not result in bene- fits incremental to those accruing to farmers in other irrigation projects. In the short-run, the best way to increase the rate of cost recovery would be by accelerating the rate of transition to irrigation from watercourses in order to improve the reliability of water supply. It is estimated that the resulting intensified use of input and increased production would increase the revenue from sales taxes by some Rs 70 per ha of CCA. Eventually, the increased reliability and equity of the water supply and the resulting in- creased return per unit of water would permit a gradual increase in the water rates bringing them to more realistic levels. 1/ See discussion of project rent in Annex 5.  - 18 - VII. BENEFITS AND JUSTIFICATION Present Irrigation Benefits 7.01 A unique feature of the project is that its primary objective is to ensure the continuity of irrigation in an area which is already irrigated rather than to develop new areas. Its main economic benefits would come from preventing the return of the project area to rainfed conditions which would exist temporarily in the case of a failure, or permanently if the weirs are not ultimately replaced. The annual reduction in output resulting from a return to rainfed conditions is estimated at about 250,000 tons of paddy, 10,000 tons of jute and 20,000 tons of groundnuts. The decrease in the net value of production if irrigation is discontinued is estimated at Rs 250 M (US$30 M) per annum in financial 1980 prices or Rs 300 M (US$36 M) in economic prices. 7.02 Return to rainfed conditions even on a temporary basis would have a severe negative effect on farm incomes and employment. Farm family employ- ment in the project area would decrease by about 15.0 M man-days per annum which are equivalent to about 62,000 full-time jobs. The demand for hired labor would also decrease by about 3,000 full-time jobs. The farm income of an average farm would decrease from about Rs 2,280 to Rs 790 (-65%). This would increase poverty in the area and trigger a negative multiplier effect in other sections of the local economy, depressing wages and profits. Economic Analysis (Annex 1, T-12 to T-17 and Annex 5) 7.03 Timing. As indicated (para 3.10) both weirs are liable to breach in the near future. It is estimated that the probability that either of the weirs would fail in any given year is presently (1980) within the range of 10% to 20% (once in 5 to 10 years) and rising by about 2% per annum. If future events could be predicted accurately, construction of the new barrages could be scheduled so that it is completed the year before the weirs are expected to fail for the first time. This is, however, impossible and construction of the new barrages is likely to be either "too early" or "too late." Construct- ing the barrages "too early" adds to their cost the expected value of the net benefits foregone by postponing an alternative investment. Constructing them "too late", i.e., after a failure, would add to their cost the cost of repair- ing the breach and the resulting loss in net value of production. 7.04 The optimal timing for constructing the new barrages has been analyzed through a present value model. The present value of the net economic benefits was estimated as a function of the time of construction in order to compare the benefits from construction now with those of delayed construction. The discount rate used was 12%, the estimated opportunity cost of capital in India. The results are summarized below (detailed assumptions are in Annex 5):  - 19 - Construction Present Value of Beginning End Expected Net Benefits (Rs M) 1980/81 1985/86 489 1985/86 1990/91 394 1990/91 1995/96 308 7.05 The above results. show that the present value of the net economic benefits would be highest if the barrages are constructed now and would decline if construction is postponed. Inclusion in the model of additional effects of weir failure such as grain shortages, social unrest and other undesirable socio-economic effects which cannot be adequately quantified would further increase the advantage of an early construction. It is clear, there- fore, that an immediate construction would be advantageous. 7.06 Economic Rate of Return (ERR). Basic assumptions for economic analysis are detailed in Annex 5. The economic cost stream includes civil works, administration and engineering and O&M. The main economic benefits would come from preventing loss of production due to weir failure. Their expected value was calculated as the product of the economic value of produc- tion losses due to weir failure and the probability that any of the weirs would fail (assumed to be 15% and rising at 2% per annum). Other important benefits would come from the elimination of the present leakage through the weir gates (para 3.12) which would enable either to irrigate new areas in the rabi season or to increase the crop intensity in existing areas. The economic prices were derived from IBRD projected 1985 world market prices expressed in 1980 currency values with appropriate adjustments for freight, handling and processing. Domestic cost components were adjusted by a standard conversion factor (SCF) of 0.80. Discounting costs and benefits over a 50 year period the ERR is estimated at 21%. 7.07 The above ERR estimate is based on the present water distribution system, farming practices and yields. If the transition from the field-to- field system to irrigation from watercourses (para 2.14) is implemented, the estimated annual net benefits from irrigation would more than double (from Rs 300 M to Rs 605 M) and the ERR would increase from 21% to 41%. 1/ Such transition would, therefore, considerably improve the economic viability of the project. 7.08 Sensitivity Analysis. The sensitivity of the ERR to changes in the main assumptions was tested with the following results: 1/ In this calculation the economic cost stream included the cost of con- structing watercourses and field drains and their maintenance and the cost of improving the main drainage system.  - 20 - Appraisal Switchiyg Admissible Estimate Value- Change % Gross Value of Production (Rs/ha) 5,950 4,050 -32 Construction Costs (Rs M) 331 821 148 Annual Increase in Probability of Weir Failure (%) 2 0.2 -90 /a The value of a variable tested, ceteris paribus, beyond which the ERR would be below the opportunity cost of capital at 12%. If the present probability of weir failure is assumed to be 10% (rather than 15%) the ERR would decrease to 19%. A similar decrease in the ERR would take place if the benefits from prevention of water leakage are omitted or if construction would take seven years (rather than five). 7.09 Project Risk. The results of the sensitivity analysis indicate that only large (and unlikely) deviations from the basic assumptions would make this project economically unviable. As indicated (para 3.10), the risk of weir failure is imminent. However, such an occurrence would not result in loss of life or risk population centers and all possible precautions would be taken under the project to minimize damages (para 6.05). Environmental Effects 7.10 The new barrages would be located near the existing weirs and the pond level would remain unchanged. Therefore, the project would not affect conditions in the adjacent town of Cuttack or have any other adverse environ- mental affects. VIII. AGREEMENTS TO BE REACHED AND RECOMMENDATIONS 8.01 An agreement has been reached with GOI that it would make the proceeds of the credit available to GOO on GOI's standard arrangements for development assistance to the States (para. 5.04). 8.02 Agreements have been reached with GOO that it would: (a) provide sufficient funds and materials to execute the project in accordance with the implementation schedule for the five- year program supported under the credit (para. 5.04); (b) (i) maintain separate accounts on project expenditures; (ii) ensure that these accounts would be audited annually by the State Accountant General and the resulting reports would be submitted to IDA as soon as possible but not later than nine  - 21 - months after the end of each fiscal year; and (iii) make complete accounts and financial statements available for inspection during IDA review missions (para 5.09); (c) stockpile materials essential for emergency repairs near the weir sites (para 6.05); and (d) submit to IDA a project completion report not later than six months after its Closing Date (para 6.07). 8.03 With the above agreements, the proposed project would be suitable for a credit of US$83.0 M on standard IDA terms. The borrower would be the Government of India.  ANNEX 1 T - - 22 - INDIA MABANADI BARRAGES PROJECT Salient Features Existing Proposed 1, MAHANADI BARRAGE Designed Flood - 15,300 m3/sec H.F.L. 23.15 m 23.05 m Pond level 21.20 m 21.20 m Crest level of underaluice 17.84 a 16.00 m Crest level of spillway 19.66 m 18.50 a Stilling pool level, undersluice - 12.50 m Stilling pool level, spillway 14.30 m Undersluices 38 bays x 1.52 m 10 bays x 18.00 m Spillways 599 bays with 76 bays x 18.00 m automatic falling shutters 3m x 1.52 m Width between abutments 1,935.50 m 1,935.50 m 2. BIRUPA BARRAGE Designed Flood - 2,070.00 a3/sec H.F.L. 22.16 m 20.95 m Pond level 21.00 m 21.20 m Crest level of undersluices 17.75 m 14.50 a Crest level of spillway 19.17 m 16.50 m Stilling pool level of undersluices - 10.50 mn Stilling pool level of spillway 12.00 m Undersluices 8 bays x 6.32 m x 2 bays x 10.00 m 3.25 m 20 bays x 1.52 m x 2 on either side 3.25 m Spillway 155 with automatic 13 bays x 10.00 m falling shutters 3.00 m x 1.83 m Width between abutments 635.00 m 180.00 m 3 3. HEAD REGULATORS - DESIGN DISCHARGE (m /sec) Taladanda Machhagaon 84.90 142.00 Kendrapara Pattamundai 90.19 142.00 H.L.C. Range I 18.62 142.00 4. OLD DELTA IRRIGATION SYSTEM a. Length of Irrigation Canals, km MAIN SECONDARIES Taladanda System 134 500 Kendrapara System 182 1,288 H.L.C. Range I System 53 75 b. Net Irrigated Area (CCA), ha 167,000  -23- ANNEX 1 T - 2 INDIA MAHANADI BARRAGES PROJECT Climatological Data Mean Monthly Mean Monthly Mean Monthly Mean Monthly Maximum Minimum Relative Humidity Months Rainfall Temperature Temperature Highest Lowest _ --~~~(mm)- - -- ___ cJ - -- c-------__ -----7-____ January 10.4 35.9 11.8 80 48 February 28.5 37.7 13.9 76 43 March 19.5 39.9 18.2 73 41 April 27.0 42.8 21.6 71 50 May 71.8 43.4 22.5 71 58 June 214.6 42.1 23.4 76 69 July 355.1 35.3 23.3 83 81 August 364.5 34.3 23.5 83 81 September 252.1 34.8 23.6 83 80 October 167.6 34.5 20.1 79 72 November 41.4 32.6 14.6 74 59 December 4.7 31.0 12.0 77 52 Annual 1,557.2 Source: Meteorological Station, Cuttack. Period: 1951 - 1972.  - 24 - ANNEX I T - 3 INDIA MAHANADI BARRAGES PROJECT Cost Estimates and Phauins 8tl/80 to Planned Expenditures by State Fiscal Year 8/1/80 to Total 7. of 3/31/81 1981/82 1982/83 1983/84 1984/85 1985/86 Total U593 Base Cost -Ra--i -- -- --------------------------- R, M------------------------------------ I. CIVIL WORKS 1. Mahanadi Barrages Foundation excavation - 3.03 3.49 4.07 1.05 - 11.64 Formation of sheet pile cot off 1.95 6.83 8.69 10.24 3.33 - 31.04 Concrete in sub-structure - 7.44 31.90 48.91 18.07 - 106.32 Concrete in super structure - - 9.85 15.27 9.37 49.27 Concrete blocks 0.55 4.78 4.33 1.45 - 11.11 Pre-streas girder bridge - - - . 4.83 14.50 19.33 Mild steel reinforcement worka 1.62 5.41 22.55 36.09 19.85 4.70 90.22 Loose atone apron nd protective works - 0.29 4.68 4.10 4.10 1.46 14.63 Sub-Total 3.57 23.55 85.94 123.01 67.46 30.03 333.56 39.7 56.0 2. Birupa Barrage Foundation excavation - - 0.18 0.29 0.09 - 0.56 Laterite excavation - . 0.37 0.63 0.19 1 1.19 Concrete in cub-structure - _ 3.37 8.64 2.63 - 14.64 Concrete in super atructsre - - - 2.41 4,57 1.65 8.63 Concrete blocks - - 0.20 0.46 0.14 - 0.80 Pre-stress girder bridge - - - - 0.44 1.32 1.76 Mild steel reinforcement works - _ 2.82 6.35 4.09 0.86 14.12 Loose atone apron and protective works - - 0.28 0.42 0.66 0.83 2.19 Sub-Total 7.22 19.20 12.81 4.66 43.89 5.2 7.3 3. Head Regulatore and Link Cansla - - - - - 17.74 17.74 2.1 3.0 4. Roads1' 1.50 1.50 0.85 0.50 0,5 0.15 5.00 0.6 0.9 SUB-TOTAL (Civil Work.) 5.07 25.05 94.01 142.71 80.77 52.58 400.19 47.6 67.2 cI. MECHATICAL ENGINEERING 1. Mahanadi Barrage Supply of embeded parts - - 1.63 3.60 1.31 - 6.54 Erection of emsbaded parts - - - 0.09 0.40 0.61 1.10 Manufacture and supply of gate and - - 6.09 9.94 16.04 - 32.07 stop log Erection of gate and stop log - - - 0.26 1.77 3.17 5.20 Supply and erection of hoist - - 2.64 2.91 9.79 11.12 26.46 Renote control equipment - - - - 12.00 12.00 Supply and erection of gantry crane - 5.500 .50 Sub-Total 10.36 16.80 29.31 32.40 88.87 10.6 15.0 2. Birupa Barrage Supply of embeded parts - - - - 0.50 0.28 0.78 Erection of enbeded parts - - _ _ - 0.13 0.13 Manufacture and supply of gate and - - - - 1.37 2.78 4.15 stop log Erection of gat and atop log - - - - - 0.67 0.67 Supply and erection of hoist - - - - - 3.34 3.34 Supply and erection of gantry crane 2.42 2.42 Sub-Total - - 1.87 9.62 11.49 1.4 2.0 SUB-TOTAL (Mechanical engineering) - - 10.36 16.80 31.18 42.02 100.36 12.0 17.0 III. ENGINEERING, ADMINISTRATION AND2P SUPERVISION (13%) 0.82 4.07 16.76 25.59 17.58 14.55 79.37 9.4 13.2 IV. MASTER DRAINAGE PLA t - 2.00 2.50 2.50 2.50 2.50 12.00 1.4 2.0 V. WATER MAMACDIENTA/ - 2.00 0.25 0.25 0.25 0.25 3.00 0.4 0.6 BASE COST 5.89 33.12 123.88 187.85 132.28 111.90 594.92 70.8 100.0 PHYSICAL CONTINGENCIESY 1.27 6.26 24.54 37.36 23.31 17.35 110.09 13.1 PRICE CONTINGENCIES/ 0.36 5.45 32.39 67.63 58.32 57.33 221.48 26.4 TOTAL PROJECT COST 7.52 44.83 180.81 292.84 213.91 186.58 926.49 110.3 Kmx Rs '000 lt Permanent Roads: Nirgundi reilway to Mahanadi left bank 9.0 2t230 2 Including land aquisition, design end nodal studies. Cuttack railway to Mahanadi right bank 1.0 250 3a 300,000 ha at Rs 40/ha. Downstream Mahanadi apron 2.0 490 4/ 1,000 ha at Ro 3,000/ha. Sob-total 12.0 2,990 a' 25% of civil works, 10% of nechaninal engineering worhs. 6/Based on local inflation rates of 10% in 1980 (calendar Temporary Roads, Service roads 3.0 450 year), 7% in 1981 to 1983 end 5% thereafter. Wooden bridges (Mahanadi and Birupe) 285 Roads under Mehanadi railway bridge 1.2 440 Miscellaneous 835 Sub-total 4.2 2,010 Total 5,000  -25- ANNEX 1 T - 4 INDIA m I BARRAGES PROJECT List of Buildings./ Units Unit ~2/ I/ Units Unit Cost- Total Cost- (Rs) (Rs'000) A. Residential (Permanent) Additional Chief Engineer 1 163,800 163.8 SE and EE (C) 2 120,120 240.2 Ag (D) 16 70,655 1,130.5 JE end Equivalent (E) 32 47,515 1,520.5 Offiee Assistants etc. (F) 60 36,170 2,170.2 Rest House 1 202,800 202.8 Sub-Total 5,428.0 B. Residential (Temporary) Quarters for AE 5 blocks 205,470 1,027.4 Quarters for JE and Equivalent 10 blocks 200,430 2,004.3 Quarters for Other Staff 20 blocks 196,550 3,931.0 Sub-Total 6,962.7 C. Non-Residential (Temporary) Office for ACE 1 289,770 289.8 Office for EE 5 145,080 725.4 Office for AE 16 35,100 561.6 Storage Godowns 6 145,080 870.5 Site Stores 10 54,600 546.0 Field Workshop 3 90,480 271.4 Remodelling of Jobra Workshop 1 780.0 Welfare Center 1 54,600 54.6 Dispensary 1 90,480 90.5 Canteen 2 29,250 58.5 Recreation Club 1 29,250 29.3 Concrete Testing Laboratory 1 74,100 ,74.1 Post Office 1 46,800 46.8 Electric Sub-station 1 23,400 23.4 Sub-Total 4,421.9 D. Development and Roads Land Development for Buildings 50.0 Colony road 4 km 31,000 124.0 Fencing 35,000 m 4.60 161.0 Sub-Total 335.0 Total Cost of Buildings 17,147.6 1/ The cost is incorporated in the Cost Estimates (Table 3) under the category engineering, supervision and administration. 2/ Including electric wiring, water supply and sanitary fitting.  -26- ANNEX 1 T -5 INDIA MAHANADI BARRAGES PROJECT List of Equipment-/ Type Quantity Rs '000 A. Monitoring Equipment Piezo meter 40 Transmitters for reinforcement meters 12 Transmitters for tilt meters 2 Receivers 2 Miscellaneous small items for installation of the equipment Sub-Total 700 B. Office Equipment Drafting machine 4 Automatic Printing Machine 2 Xerox Copier 1 Desk Calculator 6 Sub-Total 800 C. Inspection Vehicles Jeep (Diesel/Petrol) 4 wheel drive 12 780 Pick-up Van (Diesel) 3 240 Passenger Car 2 100 Ambulance 1 80 Jeep Trailer 5 70 School Bus 1 130 Sub-Total 1,400 D. Transport Vehicles Trucks 15 2,250 Trailor (20 Ton) 1 700 Tractor with trailor 5 500 Tipper 5 1,000 Sub-Total 4,450 E. Construction Equipment Concrete mixer (1/2 cubic yd.) or 14/10 4 200 Concrete mixer (10/7) Electric 4 100 Diesel Road roller 10/8 Tons 2 330 Dozer 160 H.P. 1 2,000 Submersible pumps 14 (H.P.) 10 150 Well point pumps 2 300 Heavy duty pump (40 H.P.) 4 160 Vibrators 10 50 Mobile pneumatic whell Crane (10 Ton) 1 1,000 Diesel Generator set 25 (K.V.) 2 150 Welding and cutting set 4 100 Sub-Total 4,540 F. Emergency Equipment (repair of breach)-/ 2,000 TOTAL 13,890 1/ Equipment to be purchased under the project; the cost of this equipment is incorporated in the Cost Estimates (Table 3) mainly under the engineering administration and supervision category. 2/ Indicative estimate; actual purchase requirements would depend on the type of equipment available with the contractors constructing the barrages.  - 27- ANNEX 1 T-6 INDIA MAHANADI BARRAGES PROJECT Estimated Disbursement Schedule IDA Fiscal Year and Semester During Semester Cumulative -----------------(US$M)- 1982 1st 0.2 0.2 2nd 2.0 2.2 1983 lst 3.0 5.2 2nd 5.8 11,0 1984 1st 8.0 19.0 2nd 11.0 30.0 1985 1st 13.0 43.0 2nd 12.0 55.0 1986 1st 10.0 65.0 2nd 9.0 74.0 1987 1st 6.0 80.0 2nd 3.0 83.0  ANNEX 1 T- 7 - 28 - INDIA MAHANADI BARRAGES PROJECT Proposed Credit Allocation Category US$M Civil and Mechanical Engineering Works 69.0 85% Equipment and Vehicles 2.0 100% of ex-factory price; or 70% Drainage and Water Management 2.0 100% of expenditures Unallocated 10.0 TOTAL 83.0  INDIA MAHANADI BARRAGES PROJECT Account of Expenditures in the Year 19 SAR* Estimates (Annex 1, T-3) Cumulative Cost Overrun Project Accounts Cumulative Cost Overcost Cost Item Budget Actual Cumulative Total Expenditure Cumulative Including Inflation Over Base Including (as in Annex 1. T-3) Provision Expenditure Expenditure Cost during the year Base Cost Allowance Cost Inflation Allowance Remarks 1 2 3 4 5 6 7 8 9 10 Ui NOTES: 1. Cols. 2,3 and 6 relate to year of report. 2. Cols. 4,7 and 8 relate to cumulative expenditures upto end of year of report. 3. In Col. 2, in the event of estimates not being available according to each item of Col. 1, they may be shown suitably aggregated. 4. Account to be prepared by project coordinator on the basis of information to be obtained from all implementing entities. 5. Variations between Col. 2 and Col. 3 and between Col. 4 and Col. 8 to be adequately explained. .................. Signature of Project Authority * Staff Appraisal Report  - 30_ ANNEX I T - 9 I NDIA MAH8A17AI BARRAGES PROJECT Annual Requirement of Staff GOO Fiscal Year 81/82 82/83 83/84 84/85 85/86 1. ManaFement and Administration Additional Chief Engineer 1 1 1 1 1 Superintending Engineer (Civil) 1 1 1 1 1 Assistant to Chief Engineer (Irrigation) Civil 1 1 1 1 1 Executive Engineer (Designs) 0 1 1 1 1 Executive Engineer (Quality Control and Laboratory) 0 1 1 1 1 Personnel Officer (Labor Welfare) 0 1 1 1 1 Assistant Engineers (Civil) 2 8 8 8 6 II. Executive Executive Engineers (Civil) 2 3 3 3 3 Executive Engineer (Mech) I 1 i 1 1 Assistant Engineers (Civil and Mech) 8 16 16 16 16 Shift Assistant Engineers (Civil and Mech) 0 32 32 32 32 Personal Assistants to Executive Engineers (Civil and Xech) 2 4 4 4 4 Junior Engineers 34 124 140 140 140 III. Office Establishment A. Chief Engineer's Office Office Superintendent 1 1 1 1 1 Senior Assistants 3 6 6 6 6 Assistants 23 45 45 45 45 Typists 6 9 9 9 9 Stenographers Grade I & II 3 6 6 6 6 Dr.ughts-an 1 3 3 3 3 Tracers 3 6 6 6 6 Ferm Printer 1 1 1 1 Cameraman 0 1 1 1 1 Daf tary 1 1 1 1 1 Peons, Night Watchoen 10 20 20 20 20 Contingent Orderlies 10 20 20 20 20 B. Executive Engineer's Establishment Accoontants 2 4 4 4 4 Clerks 21 36 36 36 36 Stenographer Gr. III 2 4 4 4 4 Estimators . 2 8 8 8 8 Draughtsman 2 4 4 4 4 Tracers 2 4 4 4 4 Peos. Night Watchman 15 24 24 24 24 Contingent, Orderlies 31 252 252 252 252 C. Accounts & Audit Establishment Financial Adviser 0 I 1 1 I Senior Assistants 0 4 4 4 4 Assistants Grade I & II 0 16 16 16 16 Stenographer Grade I 0 1 1 1 1 Typists 0 3 3 3 3 peons 0 6 6 6 6 Contingent Orderlies 0 1 1 1 1 IV. Workcharged Staff Storekeepers 1 4 8 8 8 Laboratory Assistants 0 8 8 8 8 Gange Readers 3 3 3 3 3 Laboratory Attendants 0 8 8 8 8 Surveyors 2 4 4 4 4 Drillers 0 2 2 2 2 Foreman 0 2 2 2 2 Drivers 20 47 42 42 42 Electricians 2 2 2 2 2 Wireman . 2 2 2 2 2 Carpenters 2 2 2 2 2 pile Drivers 2 2 2 2 2 plumbers 2 2 2 2 2 Security Guards 10 20 30 30 30 Work-Sarkars 12 24 30 30 30 Khalasis 20 50 80 80 80 Gardener 2 4 4 4 4 PFup Drivers 2 6 10 10 10 Masons 3 5 5 5 3 painters 2 3 3 3 3 Helpers for Heavy vehicle and equipment 7 12 22 22 22 Welders 1 1 1 1 1 Blowman 1 1 1 1 1 Blacksmith 1 1 1 1 1 Motor Mechanics 1 2 3 3 3 Fitters 2 4 6 6 6 Sveepers 2 4 6 6 6 V. Other Supporting Staff Receptionists and operators 5 2 5 5 5 Librarians 0 1 2 2 2 Canteen Managers 0 1 2 2 2 Canteen Boys 0 6 12 12 12 Masager (Guest House) 0 1 1 1 1 Cooks 0 2 4 4 4 Butler 0 1 1 1 1 Attendants 0 6 10 10 10  - 31 - ANNEX 1 T - 10 INDIA MAHANADI BARRAGES PROJECT Estimated Cost Recovery Capital Cost/ha of Net CCA 1/ (Rs/ha) W_ _2 Construction of Barrages 4,220 4,220 Watercourses and Drains - 500 Total 4,220 4,720 Annual Financial Requirement/ha of Net CCA (Rs/ha,year) Construction of Barrages 2/ 508 508 Watercourses and Drains 3/ - 89 9&M 20 50 Total Annual Financial Requirement 528 647 Cost Recovery (Rs/ha/year) Direct Water Charges 112 112 Land Revenue (Incremental) 12 24 Watercourses and Drains - 41 Sub-Total (Rs/ha of Net CCA) 124 177 Indirect Sales Tax 132 200 Total Cost Recovery 256 377 Project Rent 1,050 1,549 Cost Recovery as a % of Project Rent 24 24 Cost Recovery as a % of Project Cost 48 58 WI = With Project - Present Irrigation Standard. W2 = With Project - Improved Irrigation Standard. 1/ Constant June 1980 prices. 2/ Annuity for recovery over 50 years at 12% interest rate. 3/ Annuity for recovery over 10 years at 12% interest rate.  ANNEX 1 - 32 - T - 11 INDIA MAHANADI BARRAGES PROJECT Estimated Farm Budget and Project Rent (For 1 ha Farm) FARM BUDGET W 1 2 - Rs ----------- 1. Gross Value of Production 1,823 4,958 6,199 2. Cost of Cash Inputs 691 1,732 1,899 3. Cost of Hired Labor 186 433 494 4. Tax and Water Charge 73 256 360 5. Net Farm Income (1)-(2)-(3)-(4) 873 2,537 3,446 6. On Farm Consumption 1/ 873 2,030 2,757 7. Net Farm Cash Income 0 507 689 PROJECT RENT 1. Expected Gross Value of Production 1,823 4,958 6,199 2. Certainty Equivalent of (1) 2/ 1,276 4,214 5,269 3. Cash Production Cost 877 2,165 2,393 4. Family Labor 379 896 1,120 5. Net Returns (2)-(3)-(4) 20 1,153 1,756 6. Management Fees 3/ 2 115 175 7. Implicit Land Rent 18 1,038 1,580 8. Project Rent - 1,020 1,562 9. Project Rent per ha - 1,020 1,562 1/ On-farm consumption was assumed to be equal to net farm income in without project situation and 80% of net farm income in situation with project. 2/ Some studies of farmers' behavior shows that a simple approach can be adopted to take into account the farmerst risk aversion by estimating a certainty equivalent value (CE) of the expected value (EV). The formula used is: EC = EV - n x s where s = the standard deviation and n = a factor that expresses the farmers' risk aversion. The studies indicate that the farmers' choice of cropping patterns and production techniques can be predicted for values of "n" in the interval 1 to 2 and that "n" decreases when the farm size increases. For this analysis, it is assumed that "n" = 1.5 for a 1 ha farm in Mahanadi Delta. The variation in gross return was assumed to be 20% of the average values in situation "without project" and 10% in situa- tion "with project". 3/ The reward for management and entrepreneurship is primarily a premium for the special skills that farm management requires. Consequently, it has been assumed that the "management fee" is equal to 10% of the net returns. W - Future Without Project; W1 = Future With Project - Present Irrigation Standards; 2= Future With Project - Improved Irrigation Standards.  ANNEX 1 T - 12 - 33 - INDIA MAHANADI BARRAGES PROJECT Present and Projected Cropping Pattern P W W W, -1 -2 Kharif Paddy: Local Varieties 72 72 72 18 HYV 28 28 28 82 Jute (pre-kharif) 12 12 12 15 Kharif Cropping Intensity 112 112 112 115 Rabi Paddy (HYV) 42 - 49 45 Wheat - - - 5 Pulses 6 4 6 6 Groundnuts 7 - 10 7 Potatoes - - - 2 Rabi Cropping Intensity 55 4 651/ 65 Total Cropping Intensity 167 116 177 180 Total Net Sown Area (ha) 167,000 167,000 167,000 202,000 Total Gross Cropped Area (ha) 278,900 174,000 295,600 364,000 1/ Water saved by prevention of leakage used to increase cropping intensity. P = Present; W = Future Without Project; W1 = Future With Project - Existing Irrigation Standards; W2 = Future With Project - Improved Irrigation Standards.  ANNEX 1 T -13 - 34- INDIA MAHANADI BARRAGES PROJECT Agricultural Production P_ Wi W2 Kharif (-----------------('000 tons)-- Paddy: Local 192.4 146.6 192.4 81.5 HYV 85.7 60.0 85.7 425.8 Jute 30.1 21.1 30.1 63.7 Rabi Paddy 175.4 - 187.5 224.6 Wheat - - - 23.9 Pulses 5.0 1.4 5.4 10.4 Groundnuts 21.4 - 22.5 30.4 Potatoes - - 65.1 P = Present; W = Future Without Project; W1 = Future With Project - Existing Irrigation Standards; W2 = Future With Project - Improved Irrigation Standards.  - 35 - ANNEX 1 T - 14 INDIA MAHANADI BARRAGES PROJECT Summary of Prices and Conversion Factors Financial Prices Economic Prices A. Prices 1980 1985 ---------------(Rs/ton)-----------