Announcement of IDA to Provide Two Hundred Ten Million Dollars Credit for Irrigation in India’s Maharashtra State on April 21, 1980

FOR IMMEOIATE RELEASE .World Bank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. • Telephone: (202) 393-6360 JDA NEWS RELEASE NO. 80/44 April 21, 1980 IDA TO PROVIDE $210 MILLION CREDIT FOR IRRIGATION IN INDIA'S MAHARASHTRA STATE The International Development Association (IDA), the World Bank's affiliate for concessionary lending, has approved a $210 mill ion credit for a project to support the introduction of improved irrigation technologies in India's Maharashtra State. The project will help to transform low-production, drought-prone, rainfed areas into highly productive irrigated lands, capable of year-round cropping. The project, the total cost of which is $451 million, is the fourth agrjcultural development project that IDA is directly supporting in Maharashtra. Over a five-year period, a substantial portion of five • major surface irrigation schemes will be constructed and two existing schemes rehabilitated. The project includes financing for construction elements for 11 dams, about 900 kilometers (km) of main and branch canals, distribution systems and drains, and about 620 km of new and improved link roads in the command areas of the Krishna, Kukadi, Upper Wardha, Upper Penganga, and Warna irrigation schemes. Existing canals and drains in the commands of the Girna and Mula schemes will be modernized. The Government of Maharashtra's pilot water management program will be ex- panded, and assistance will be provided for a specialists' training program in land development and water management. The Maharashtra State has an area of 308,000 square kilometers and a population of 60 mill ion and is one of the largest states in India. About 70% of the population depends on agriculture for its livelihood and one third of the rural population is landless. Because of 1 imited rain- fall, crop yields are low and the state is deficient in foodgrains. The state government has invested substantial amounts in developing the irri- gation potential of the state, .but outdated planning, design and construc- tion standards, and operational procedures have kept the full benefits from being realized. The present project will introduce more modern standards. • NOTE: Money figures are expressed in U.S. dollar equivalents . . .. /  • - 2 - The five new schemes under the project should, at full develop- ment, help bring about increased annual production of 945,000 tons of foodgrains, 57,000 tons of cotton, and 2,337,000 tons of sugarcane. The project is also expected to create employment for 55,000 farm family mem- bers, 113,000 landless laborers, and 65,000 workers in non-farm activities, such as marketing, transport, and processing. Net farm incomes of those families which will be benefited directly are estimated to increase from an average of Rs 870/ha (Rupees/hectare) at present to about Rs 4,500/ha, of which Rs 3,200 would be accounted for by the project. The percentage of farm families below the poverty line is expected to decline significantly, from 60% in the project area to 13%. The $210 million IDA credit to India is for a 50-year term. It is interest free, but carries a 3/4 of 1% charge per annum to cover IDA's administrative expenses. The credit wil 1 in turn be re-lent to the Government of Maharashtra. - 0 - • • FORM NO. 1121 (5-76) T E CHN I CA L D A T A • PROJECT: Second Maharashtra Irrigation COUNTRY: India TOTAL COST: $451 million iDA FINANCING: $2 10 mi 1 l i on , stand a rd I DA terms OTHER FINANCING: Government of Maharashtra (GOM): $241 million IMPLEMENTING ORGANIZATION: GOM Irrigation Department Mantralaya Bombay, I nd i a . PROJECT DESCRIPTION: The project will, over a five-year period, help to finance the construction of five major surface irrigation schemes and the rehabilitation of two existing schemes. It will include construction elements • for 11 dams, about 900 kilometers (km) of main and branch canals, distribution systems and drains, and about 620 km of new and improved 1 ink roads in the command areas of the Krishna, Kukadi, Upper Wardha, Upper Penganga, and Warna irrigation schemes. Existing canals and drains in the commands of the Girna and Mula schemes will be modernized. The Government of Maharashtra's pilot water management program will be expanded and assistance provided for a specialists' training program in land development and water management. PROCUREMENT: Contracts for civil works on dams and main canals, totaling about $113 million, will be let following inter- national competitive bidding. Tenders will be designed to allow alternative tendering on individual schedules. For bid evaluation; a 7.5% preference over the c. i.f. price will be granted to Indian contractors. Other civil works, estimated to cost $55 mil- lion, are individually small, scattered over a large area, and will be carried out intermittently, as determined by weather conditions and ag~icultural activities. About $32 million worth of these works will be carried out by local contractors, after local competitive bidding on the basis of procedures and guide1 ines developed by the Govern- ment of India's Central Water Commission and approved by IDA. The balance of these civil works ($23 million) involve technical constraints which will make these imprac- tical for tendering. • ECONOMIC RATE OF RETURN: 16% ESTIMATED COMPLETION DATE: 1985 - 0 -