Announcement of IDA Approves Fifty-Four Million US Dollars Credit to India for Tank Irrigation Project in Karnataka State on March 23, 1981

. ' , . . FOR IMMEDIATE RELEASE eWorldBank 1818 H Street, N.W., Washington, D.C. 20433, U.S.A.• Telephone: (202) 477-1234 IDA NEWS RELEASE NO. 81/59 March 23, 1981 IDA APPROVES SOR 43.5 MILLION CREDIT TO INDIA FOR TANK IRRIGATION PROJECT IN KARNATAKA STATE The International Development Association (IOA), the World Bank's affiliate for concessionary lending, has approved a credit of SOR 43.5 mill ion ($54 mill ion) t0 ,,l;idia for an irrigation project in the State of Karnataka situated in the south- western part of the Deccan Plateau. Over half of the 19. 1 mill ion hectare area of the state, inhabited by nearly half of its 35.5 million people, is drought-prone. The project aims to provide an economic and reliable supply of irrigation water to farmers through the development of tank irrigation in those areas of the state where development of large-scale irrigation is not feasible. It wi 11 finance, over a four-year period, the construction of 120 to 160 new tank irrigation schemes throughout the state, esti.mated to irrigate about 25,000 hectares. Each tank will generally consist of an earthfill reservoir, a fully lined canal network, a system of field channels, and a drainage network ·connected to natural drains . • Assistance will also be provided to the Government of the State of Karnataka to create an improved hydrological data base for planning, design, and construction of future minor irrigation projects. A study aimed at improving utilization of irrigation water wi 11 also be conducted. It will include recommendations on establish- ing viable and effective participation of users in the operation and maintenance of irrigation facilities as well as a revised system of water charges. The study will be carried out by the Indian Institute of Management with assistance from the Irrigation Department. The project is expected to benefit directly about 7,500 to 8,500 farm families, 60% of whom 1 ive in moderately to severely drought-prone areas. By full development of the project in 1990, annual production of cereals and pulses is expected to in- crease by 63,000 tons, valued at Rupees (Rs) 69 mil 1 ion, and the increase of cash crops is estimated 1 ikely to amount to Rs 105 mi 11 ion. The equivalent of 12,000 to 13,000 full-time jobs wil 1 be created. Annual per capita incomes of farmers in the dry and transitional areas, 70% of wbom live under poverty conditions, now range be- tween Rs 400 and Rs l ,300, but are expected to increase to between Rs l ,300 and Rs 5,}00 as a result of the project improvements. The IDA credit is for 50 years, with 10 years of grace. It is ~nterest free but will carry a 3/4 of· 1% service charge a year .to cover IDA's ad~inistrative costs. • NOTE: IDA credits are denominated in SDRs (Special Drawing Rights), \vhich are valued on the basis of a 11 basket 11 of currencies. The U.S. dollar equivale~t of the SDR amount of the IDA credit reflects the exchange rates existing at the time of negotiation of the credit. FOAM NO. 1121 (5-76) T ECH N I CA L DAT A PROJECT: COUNTRY: TOTAL COST: Karnataka Tank Irrigation India $77 . 4 mi 11 i on • IDA FINANCING: SOR 43.5 mill ion ($54 million), standard IDA terms OTHER FINANCING: Government of Karnataka (GOK), $23.4 million IMPLEMENTING ORGANIZATION: Special Secretary Department of Irrigation Government of Karnataka Vidhana Soudha, Bangalore 560001, India PROJECT DESCRIPTION: It will finance construction, over a four-year period, of 120 to 160 tank irrigation schemes throughout the State of Karnataka estimated to irrigate about 25,000 hectares. The project will assist the Government of Karnataka in creating an improved hydrological data base for planning, de- sign, and construction of future minor irrigation projects. A study aimed at improving. utilization of irrigation water will also be conducted. PROCU.REMENT: Civi 1 works construction under the project wi 11 be individually small and scattered over the whole state and will be seasonal and carried out through labor-intensive methods. Consequently, it will neither be feas- ible nor economic to group them into large contracts. The present practice of the GOK is to award most of the construction work for dams, spillways, and main canals after local com- petitive bidding (LCB),and this practice will he followed. For contracts costing more than $200,000 review by IDA of tender documents and award recommendation will be required. The stream and rain gauging equipment and the computing equipment, consisting of small off- the-shelf items costing less than $100,000 for each order, will be procured through LCB . ECONOMIC RATE OF RETURN: ESTIMATED COMPLETION DATE: 20% 1986 - 0 - •