Nepal - Agricultural Manpower Development Project

Do-comet of The World Bank FOR OMFCL USE ONLY ep CNO. P-3900-yEP REPORT A1SD RECOMMEATION OF THE PRESIDENT OF THE ITrERNATIONAL DEVOPMENT ASSOCTATION TO THE EXECUTIVE DIRECTORS ON A PROPOSED CREDIT OF SDR 8.5 MILLION TO THE KINGDOM OF NEPAL FOR AN AGRICULTURAL MAIPOWER DEVELOPMENT PROJECT November 20, 1984 Thk iscumiu a uedkctd bMIt elsd _CW be mW by reipkea may In he peuf.ruuc o .mkd.Id doom iut emmhb my mut ibrwis be -dl wt WorM Bak audzati.  CURRENCY RTALETS uS$ 1.00 = N. Rupees 17.30 AR 1 - US$0.0578 URS 100,000 = US$5,780 URs 1,000,000 = US$57,800 FISCAL YEAR July 16 - July 15 ABBREVIATIONS AA - Agricultural Assistant APROSC - Agricultural Projects Service Center CDRD - Communications Development and Extension Education Division, Department of Rural Development DQA - Department of Agriculture DOL - Department of Livestock and Animal Health FAo - Food and Agriculture Organization GTE - German Agency for Technical Cooperation BWMr - His Majesty-s Government IAAS - Institute of Agriculture and Animal Sciences tAg - Intermediate Agriculture Certificate IDA - International Development Association JT - Junior Technician JTIA - Junior Technician Assistant mOA - Ministry of Agriculture MUCIA. - Mid-Western Universities Consortium for International Activities ODA - British Overseas Development Administration PIU - Project Implementation Unit SATA - Swiss Association for Technical Assistance USN - United Mission to Nepal USAID - United States Agency for International Development VBIFAO/CP - World Bank FAO Cooperative Program  FOR OMCIL USE ONLY NEAL AGRICULTURAL NJMIPOWER DEVELOPMENr PROJECr Credit and Proiect Summary Borrower: Kingdom of Nepal Amount: Special Drawing Rights (SDRs) 8.5 million (US$8.4 million equivalent) Terms: Standard Proiect Description: The proposed project would assist Ris Hajesty-s Government in upgrading the quality of middle level agricultural manpover by: (a) implementing reforms in the training system, structure and curriculum to make it more relevant to the duties and responsibilities of agricul- tural extension vorkers and technicians; (b) establishing a teacher training program; and (c) improving training management. The project vould also assist in strengthening higher level agricultural training at the Institute of Agriculture and Animal Sciences by establishing a degree program (BS) in animal science and upgrading the existing academic, research and extension programs of the Institute. Risks: Due to poor facilities for communication and travel between project sites, particularly during rainy veather when travelling is slow and difficult, there is a risk that supervision of project activities by the Project Implementation Unit, which is based in one of the project sites, would be infrequent and irregular. This could cause delays in project implementation or jeopardize the achievement of project objectives. To minimize this risk, the project would provide a radio communication link between the Tribhuvan University (Kathmandu), PIU (IAAS) and the other project sites. In addition, a full-time assistant project engineer would be posted in each project site to provide day-to-day management of the physical aspects of the project. This document has a resticted distribution and mny be used by recpiets only in the performance of thi Ofica dutis.ts contents may notothowie be dicsed wahout World Bank authoriaton  Estimated Cost: fa Item Local Fo:eian Total US$ miiion- Niddle Level Training Training Program 2.6 2.2 4.8 Teacher Training and Training Nanagement 0.1 0.4 0.5 Agricultural Manuals 0.2 - 0.2 Hither Level Traininz Animal Science Degree Program 0.8 1.2 2.0 Upgrading Facilities and Programs 1.1 1.5 2.6 Proiect Implementation Support 0.6 - 0.6 Total Base Costs 5.4 5.3 10.7 Contingencies Physical Contingency 0.5 0.6 1.1 Price Contingency 1.2 1.3 2.5 Total Proiect Costs 7.1 7.2 14.3 /a Includes taxes of US$1.08 million equivalent. Financinx Plan: Local Foreign Total IDA 4.3 4.1 8.4 USAID 1.0 3.1 4.1 Government 1.8 - 1.8 Total 7.1 7.2 14.3 Estimated Disbursement: IDA FY FY86 FY87 FY88 FY89 FY90 FY91 Annual 0.35 1.13 1.95 2.14 1.71 1.14 Cumulative 0.35 1.48 3.43 5.57 7.28 8.42 Economic Rate of Return: Not applicable Appraisal Report: MEPAL: Agricultural Mnmpower Development Project Report No. 4878-JEP, dated November 14, 1984. Mav: [IBRD 17793  INTERNATIONAL DEVELOPMENT ASSOCIATION REPORT AND RECOMMENDATION OF THE PRESIDENT TO THE EmECUTIv DIRECTORS ON A PROPOSED CREDIT TO THE KINGDOM OF NEPAL FOR AN AGRICULTURAL MANPOWER DEVELOPMENT PROJECT 1. I submit the following report and recommendation on a proposed development credit to the Kingdom of Nepal (KMG) in an amount of Special Drawing Rights (SDRs) 8.5 million (US$8.4 million equivalent) on standard IDA terms to help finance an Agricultural Nanpower Development Project. Cofinancing arrangements have been made with United States Agency for International Development (USAID) for US$4.1 million equivalent on a parallel basis. USAID will provide this money to MNG as a grant. PART I - THE ECONOMY 11 2. The most recent economic report, Nepal: Recent Developments and Selected Issues in Trade Promotion (Report No. 4663-NEP), was distributed to the Executive Directors on October 19, 1983. The principal features and recent performance of the economy are described below. Country data are shown in Annex I. 3. Nepal is one of the least-developed countries in the world. Per capita income is estimated at US$170 (1983) and health and education standards are below the average for South Asia: life expectancy at birth is only about 46 years; infant mortality, about 145 per thousand; and adult literacy, only 19 percent. The population, estimated to be 15.8 million (1983), grew at a rate of about 2.6 percent per year between 1970 and 1982. a About 94 percent of the population live in rural areas. 4. Population density with respect to arable land (356 per sq km) has reached very high levels, and cultivation has been extended on to marginal lands and forests. Forests have been denuded further to meet the growing demand for fuelwood, on which Nepal depends for over 90 percent of its energy consumption, mostly for household cooking and beating. Because of deforesta- tion and excessive grazing on the hills and mountains, with high rainfall, there is accelerated soil erosion leading to silting of rivers, downstream flooding and loss of agricultural productivity all along. 5. Agriculture, largely rainfed, still accounts for nearly 60 percent of Nepal's GDP and 80 percent of merchandise exports, and provides the main 1/ Substantially unchanged from Third Highway Project (Report No. P-3867-NEP), of August 9, 1984.  -2- source of livelihood to over 90 percent of the population. Crop production accounts for about 60 percent of agricultural output, livestock for 30 percent, and forestry for 10 percent. Paddy is the principal food crop (planted on about half of the total cropped area), followed by maize, wheat, millet and barley. Cash crops (oilseeds, jute, sugarcane and tobacco) are grown on about 10 percent of the cropped area. About 15 percent of total rural income arises from non-agricultural activities, of which the cottage industry sub-sector is one of the more important generating employment for over one million people on a part-time basis. 6. Apart from agricultural land, Nepal's only other important exploitable resources are hydropower and tourist attractions. The exploita- tion of the vast hydropower resources beyond that required to satisfy the country's owv power demand, however, will depend crucially on Nepal's ability to enter complex financial, exploitation and export agreements with neighbor- ing countries. The tourism sector, based primarily on Nepal's mountain environment and its rich cultural heritage, has been dynamic, though it accounts for only about 1 percent of GDP. Tourism now provides about 20 percent of the country's foreign exchange earnings. About 60 percent of earnings from tourism are retained in Nepal. 7. Following centuries of self-imposed isolation, efforts to develop the economy of Nepal began in the mid-1950s against extremely heavy odds. The country had virtually no physical infrastructure, an ancient administrative system, and very limited educational and health services. The resource base is relatively narrow and its development hindered by the difficult topography and landlocked position. Against this background, Nepal's primary develop- ment objective for 20 years, between 1955 and 1975, vas to build basic infrastructure and lay the groundwork for future economic growth. The country has made good progress in pursuit of that objective. It now has a basic road network linking many economic centers. Kathmandu and a few other towns have basic utilities and public transport. Schools have been built for almost half of the primary school age children and there are a number of secondary schools and a national university. A rudimentary hospital system, including rural health posts, has been built. Some progress has also been made in establishing the institutional framework for agricultural and industrial development, including extension and research activities, finan- cial institutions and industrial enterprises. Yet in all these areas, the country has a long way to go to achieve a level of development comparable to other developing countries; for example, public and private institutions in Nepal must continue to expand and upgrade essential physical facilities, acquire the necessary expertise in handling economic and financial affairs, build up adequate technical and managerial cadres, and establish merit-based systems of personnel management. 8. The Fifth Plan (FY76-FY80) marked a shift in development objectives, with increased emphasis being placed on acceleration of economic growth, employment creation, and raising the living standards of the population. These objectives have been reiterated in the Sixth Plan (FY81-FY85). Moreover, the stated strategy of the Sixth Plan appropriately (a) accords  -3- high priority to developing agriculture, small-scale industries and Nepei's abundant water resources; (b) stresses soil conservation and populaticn control; and (c) emphasizes full utilization of existing infrastructure and alleviation of absorptive capacity constraints, including human resource development. The development strategy also calls for increased involvement of the private sector in agriculture, manufacturing, trade, tourism, con- struction and transport operations. Investment expenditures, supported by growing foreign assistance, have increased rapidly over the last two Plans, from US$146 million (9 percent of GDP) in FY75 to about US$500 million (20 percent of GDP) in 1982183, and there have been substantial shifts in the composition of spending away from transport to agriculture, power and social services. GDP growth, however, has barely kept up with that of population. 9. Part of the explanation for this stagnation lies in factors beyond Nepal's control such as the difficult topography and the poor resource base. But factors within Nepal's control bave also contributed. Severe project implementation problems have been encountered by Government and donors alike in most sectors of the economy, thereby lowering the rate of growth of capital formation. In addition, the expected returns on investments which took place often did not materialize largely because necessary complementary investments or current spending were lacking, and because of managerial deficiencies. A good example is the agriculture sector. In the past, insuf- ficient attention was paid to bringing water down to the farm level and this was compounded by inadequate support services such as extension and research, by the lack of timely supplies of improved seed, fertilizer and other inputs such as credit, by the lack of farm-to-market roads, and by low producer margins. Future development of irrigation and agriculture would therefore need to emphasize complementary investments, improvements in agricultural input supplies and adequate producer margins. 10. The shortage of funds for current spending needs to be addressed by further efforts at domestic resource mobilization. In recent years, Nepal's efforts to mobilize resources have focused on tightening income tax assess- ment and collection; on discretionary-measures largely in the area of indirect taxes; and on rEducing subsidies to public enterprises. While there has been, as a result, a steady increase in revenues, the tax structure remains inelastic. Some scope exists for increasing Nepal s tax elasticity by shifting items on the indirect tax schedules from a specific to an ad valorem basis. There also seems to be scope for increasing yields from the land tax, urban property taxes and income taxes. 11. Over the past two years, several positive steps have been taken to strengthen public sector management. These steps have included increases in the traditionally low civil service salaries, establishment of public service training facilities, simplification of budgetary procedures accompanied by stricter enforcement of expenditure accounting, and granting of more autonomy to public enterprises in matters concerning personnel and pricing policies. The implementation of these administrative reforms would have to be pursued by high-level monitoring of important administrative issues such as appoint- ment of competent staff, job security and decision-making authority. Also,  -4- public enterprise reform needs to be pursued by measures aimed at reducing costs and increasing efficiency. In this regard, the Government has taken initial steps, subjecting public enterprises to increased competition from the private sector through liberalization of licensing in industry, trausport and small-scale hydropower generation. At the same time, the Government has involved the private sector in the ownership and control of some public enterprises through the sale of shares to private investors. 12. Because of slow economic growth, Nepal's balance of payments has been characterized by widening trade deficits, partly offset by surpluses from invisibles. The current account deficit (averaging US$100 million annually during FY80-mY82) has traditionally been more than matched by inflows of official grants and concessional loans (averaging US$128 million annually during FY8O-FY82), leading to surpluses in the overall balance of payments in most years. Nevertheless, foreign exchange reserves had declined from being equivalent to about one year of imports in the early 1970s to six months in 1982, and four months in mid-1984. 13. To sustain and further develop its economy, Nepal must mobilize additional free foreign exchange through export promotion and efficient import substitution. Improving agricultural production, rural incomes and food distribution within the country is a major way of doing so, if only to avoid the need to import and distribute large quantities of foodgrains in the future. Agricultural development also remains the key to a gradual expansion of Nepal's traditional merchandise exports. In addition, development of energy resources is a major means to strengthening the balance of payments by reducing the need to import fuel and opening up an export potential. Recently, Nepal has legislated a wide range of fiscal and administrative incentives for industrial investors and exporters, particularly in the private sector. The implementation of these incentives in a cost-effective manner, and the alleviation of the severe transport and transit constraints facing the country's trade sector, must constitute essential elements of a trade promotion strategy for Nepal. 14. Nepal is faced with highly challenging prospects and tasks in addressing its multiple long-term development problems. While it attempts to mobilize domestic resources to finance about 40-50 percent of development expenditures, external assistance, at concessional terms, will continue to be a vital factor in financing investment and effeccing economic growth. In the last three years, aid commitments to Nepal have averaged about US$250 million per year, almost entirely in the form of grants and concessional credits with grant elements in excess of 70 percent. Aid disbursements grew from about US$110 million in FY80 to an estimated US$150 million in FY84. Nearly 70 percent of total aid disbursements have come from members of the Nepal Aid Group, formed in 1976 and now comprising eight DAC countries and four multi- lateral agencies. 15. At the end of FY84, Nepal's official foreign debt outstanding amounted to about US$350 million. As virtually all loans have been concessional, debt-service payments, including payments to the IDF, have  -5- remained small in relation to exports of goods and services. In FY84, debt- service payments amounted to about US$18 million, equivalent to 6 percent of exports of goods and services. Over the medium term, these payments are projected to remain at less than 10 percent of Nepal's exports of goods and services. PART II - BANK GROUP OPERATIONS 16. Bank Group operations in Nepal began in 1969 with an IDA credit of US$1.7 million equivalent for a telecommunications project. Since then. 36 additional credits have been approved, bringing total IDA assistance to Nepal to US$547.7 million equivalent, net of cancellations. In view of Nepal's many development needs, this assistance has been for projects in a wide variety of sectors. Six of these sectors account for about 90 percent of IDA credits by original amount: irrigation/agriculture (US$173.0 million for 14 projects); water supply and severage (US$46.8 million for 3 projects); power and energy (US$168.0 million for 4 projects); telecommunications (US$21.7 million for 3 projects); highways (US$67.0 million for 3 projects); and rural development (US$19.0 million for 2 projects). The proposed credit would be the second approved in FY85. No Bank loans have been made to Nepal. IFC has made three investments in Nepal, the first in FY75 (US$3.1 million) for the expansion of the Soaltee Hotel in Kathmandu, the second in FY82 (DM14.5 million) to Nepal Orind Magnesite Company for the mining and produc- tion of dead burnt magnesite, and the third approved in FY84, but not yet signed, to Nepal Metal Company (DM7.8 million), a zinc/lead mining and con- centrates project. Annex II contains a summary statement of IDA credits and IFC operations as of September 30, 1984. 17. Bank Group lending to Nepal so far has been modest compared to the country's need for external assistance. The international community has shown considerable interest in Nepal's economic development and, to date, the shortage of funds has not been a major bottleneck. The main constraint on the utilization of increased aid has been Nepal's limited absorptive capacity, affecting the pace of project preparation and implementation. The Bank Group has provided assistance to the Government in project preElaration through two Technical Assistance Credits (Credits 659-NEP and 1379-HEP) and by acting as Executing Agency for a number of technical assistance projects financed by UNDP. Furthermore, the Resident Representative in Kathmandu has had a significant impact in improving project implementation performance. As a result, the rate of disbursements is improving: during FY82, FY83 and FY84, US$28.5, US$37.4 and US$26.0 million equivalent, respectively, was disbursed compared to an annual average disbursement of about US$17 million during the previous five fiscal years. Project completion reports have been prepared for six projects: First Telecommunications (Cr. 166-NEP), First Highways (Cr. 223-NEP), Tourism (Cr. 291-NEP), Birgauj Irrigation (Cr. 373-NEP), Settlement Project (Cr. 505-NEP), and Bhairawa-Lumbini (Cr. 654-NEP).  -6- 18. The Bank Group's current lending strategy places emphasis on assist- ing the Government in its efforts to contain the high level of population growth, address major constraints in the country's development of human resources and promote agricultural development. Selected infrastructure investments, mostly in transport, telecommunications and power, will also be undertaken to alleviate serious development constraints. In population, a project is being prepared by the Government and there is donor interest to co-finance various components. For the cevelopment of human resources, projects under preparation include engineering education, vocational and secondary education projects. For agriculture, the basic objective is to assist Nepal maintain overall foodgrain self-sufficiency and, where possible, promote exports of agricultural products and encourage afforestation efforts. Projects under preparation would extend the assistance provided so far by building irrigation infrastructure mainly in the Terai to increase paddy production and help reduce the food deficits in the Hills. Both would be accomplished through irrigation and rural development projects which would emphasize increased food production and through specific Hill food projects. PART III - AGRICULTURAL EDUCATION AND TRAINING 19. Pre-service agricultural education in Nepal which is conducted at middle and higher (university) levels is administered and managed by the lnstitute of Agriculture and Animal Sciences (IAAS) of the Tribhuvan University. The Department of Agriculture (DOA) and the Department of Livestock and Animal Health (DOL) of the Ministry of Agriculture (NOA) carry out in-service training for their respective staff at all levels. 20. Middle Level. Pre-service middle level education consists of a two-year program leading to the award of the Intermediate Agriculture Certificate (MAg). Secondary school leavers (grade 10) who have passed the national examination which entitles them to the Secondary School Leaving Certificate (SLC), are admitted into tire program. The training program has dual objectives: (a) to prepare students for admission to higher (university) studies in agriculture; and (b) to train Junior Technician Assistants (JTAs) and Junior Technicians (JTs) which constitute the middle level agricultural manpower in Nepal. However, only the first year (referred to as the JTA course) consisting of general agriculture (crops) or general animal science subjects is required to qualify for the post of agriculture or livestock JTA respectively. JTAs who satisfactorily complete the second year qualify as JTs or as candidates for admission to higher studies in agriculture. 21. The JTA course in agriculture is conducted at two satellite campuses of IAAS (Paklihawa and Lamjung), training a total of about 300 to 350 JTAs per year. The JTA course in animal sciences with an enrollment of 100 stu- dents per year utilizes the facilities of an animal research center of DOL located near Kathmandu. The JT course is conducted at Rampur, the main campus of IAAS, with an enrollment of about 200 to 240 students and at  -7-. Paklihawa with about 100 to 150 students per year. There is no separate JT training program in animal sciences. 22. NiAher Level. Higher level training, leading to the BS degree in agriculture is offered at the main campus of IAAS at Rampur. The training which consists of a three-year program in general agriculture is focussed u principally on plant crops with a limited number of subjects in animal husbandry. It has an output capacity of up to 100 graduates-per year. Policies and Problems in Agricultural Education 23. Middle Level. The present pre-service middle level agricultural education program does not satisfactorily meet its objectives. It has failed to train agricultural technicians in either the quantity or quality necessary and has not adequately prepared students for higher studies in agriculture. The JTA course which consists of agriculture subjects tends to emphasize theory more than the practice of agriculture. The JT course consisting of basic science and humanities subjects does not thoroughly prepare students for university education since the subjects offered which normally take two years to complete are condensed to one year. Each year, about 80Z of some 400 to 450 JTA course leavers are admitted to the JT course. The few who are not admitted accept employment as JTAs but persistently seek admission to the JT course and if accepted, quit their employment. Of about 300 to 350 JT leavers each year only 100 to 150 are admitted to the BS degree program. Employers, however, usually do not employ those who are not admitted because JTs are entitled to higher pay but are not considered to possess better agricultural and extension skills than the JTAs. Much training effort is therefore wasted each year while shortages of agricultural technicians continue. Starting from 1985, MDA estimates that about 550 additional JTAs (450 agriculture and 100 livestock) would be needed each year for the next ten years to implement its on-going and planned agricultural development activities. 24. As a result of discussions between His Majesty's Government (ENG) and IDA on the problems of agricultural education in Nepal, HMG has revised its agricultural education policy. KMG has decided that starting from the school year 1985-86, the present pre-service middle level agricultural train- ing program will be restructured, and the JTA curriculum will be revised to make it a practical and terminal course and tailored to meet the skill requirements of men and vomen agricultural extension workers and technicians. The existing one-year JT course will be abolished and the JT level will be made a promotional grade for JTAs after at least three years of satisfactory service and completion of specific in-service courses conducted by the exten- sion and training sections of DOA and DOL to prepare them for their new tasks and responsibilities. 25. The decision of HMG to revise the JTA curriculum to make it non- academic and terminal would discourage students who have no interest in becoming agricultural technicians or field extension workers from enrolling in the course. To further increase the chances of admitting JTA trainees who  -8- have the aptitude and interest to serve as agricultural technicians in rural areas, HMG vould establish a Student Admission Committee at IAAS and finalize student selection procedures by May 31, 1985 (Section 3.07 of the draft Development Credit Agreement (DCA)). HMG intends to implement the student selection procedures by September 1, 1985. 26. The quality of instruction at the training centers is poor. The teachers lack teaching skills because they have had no training in pedagogy. The students have access to few reading and reference materials, which are generally inappropriate. Most of the references are written in English and therefore have limited value to the students whose medium of instruction is Nepali; the contents are also of little relevance to Nepal conditious. The students get very little practical training since the school farms have not been developed and no farm equipment has been provided. No supervision and evaluation of the training program are conducted by IAAS staff for lack of institutional arrangements to carry out the task. 27. Accommodation and training facilities also are inadequate. At Paklihawa, the training center occupies an old army compound with deteriorat- ing barrack structures. These barracks are being utilized as classrooms, laboratories and offices and as student and staff hostels which have commnal toilets and showers and inadequate water supply. This set up has not been conducive to good performance by students or staff and is extremely incon- venient particularly to staff members who have families. At Lamjung the existing buildings are inadequate to meet the accommodation and teaching requirements of students and staff and are badly in need of rehabilitation and extension. No water or lighting facilities exist. At the animal research center in Kathmandu where training of livestock JTAs is temporarily conducted, classes are held in makeshift arrangements and sometimes in corridors. Because of poor accommodations and working conditions, the teachers' and students' morale is low, and consequently they have little interest and enthusiasm for their activities. 28. Higher Level. The decision to convert the existing JTA course into a terminal program and the abolition of the JT course automatically eliminates the Intermediate Agriculture Certificate (lAg) which currently meets the entrance requirements for degree training in agriculture. Starting from school year 1985-86, HMG intends to admit secondary school leavers who have passed the School Leaving Certificate (SLC) qualifying examination, directly into the degree training program and to lengthen the program to five years. This reform would improve the basic academic training of the students and result in better student performance. 29. At present the BS course in general agriculture, which has been assisted under a USAID project, needs further selected assistance in order to meet the requirements of MNA for higher level agriculturalists. No degree program in animal science exists in Nepal. All higher level manpower employed in the livestock sector are trained abroad through fellowship train- ing grants from foreign donors, largely from USAID. After September 1984, however, HMG anticipates serious problems in meeting additional manpower  -9- r ns of the sector since few comitmets for fellowship grants bave been obtained from external sources_ Recognizing the significant contribu- tionI of the livestock sector (212) to tota a ltral output, during the Sixth Plan period, HIG has started to pursue programs aimed at: (a) expanding fodder production; (b) improving animal health and inatrition; (c) introducing genetic i provements on existing stocks; and (d) adjusting total livestock numbers to needs. The success of these endeavors depends upon the availability of adequately trained livestock technicians and specialists_ DOL estimates that at least 50 higher level livestock specialists would be required by the department alone every year beginning in 1985. 30. Aside from the physical facilities that would be needed to establish a degree training program in animal science vith an intake of about 75 stu- dents per year, IAAS is badly in need of additional physical facilities to provide for the minim space requirements of the staff and anticipated total student enrollment of about 750. The present provision of 430 hostel spaces for students would be sufficient to meet only about 57Z of student accomoda- tion needs. Of the present 89 teaching and administrative staff members of the institute (not including about 100 peons, farm laborers, campus security guards and animal caretakers) only 55 are provided with living quarters. Many students and staff members are facing serious problems in finding suitable places to stay and in commuting to and from the campus. The school farm needs to be developed to improve the practical training activities of the students and research activities of the staff. Only about one fourth of the 300 hectare school farm can be used for production and research. The remainder is accessible to outsiders and stray aninals and needs to be protected. In addition, irrigation and drainage systems would ensure that the farm functions effectively. Furthermore, teaching staff lacks qualified instructors in agricultural engineering, agro-forestry, in-land fish produc- tion and soil conservation, and the research and extension programs need expansion and adequate support. In addition, the Institute needs to have an auditorium to permit the student body and faculty to carry out more extra curricular and co3mon activities and utilize their leisure time more profitably. The students and staff have no opportunity to engage in recrea- tional activities outside of the campus due to its remoteness. 31. The coordination of the activities of ITAS with the agricultural development program of MG needs to be improved. At present, the academic, research and extension programs of IAAS are not closely linked with the agricultural development plans of IEc. The development of human resources as a means for more effective implementation of agricultural development activities is given little importance by agricultural development planners. There is a need for the agricultural agencies and planners of EN and TAAS authorities to promote closer contact among themselves and to develop aware- ness of each other-s role and activities in order that effective coordimation could be achieved. 32. The proposed project seeks to address these problems and to support the decisions of 1W in respect of the reforms in the agricultural education  -10- system. The project will also assist in curriculum development, provision of equipment, supply of training materials, rehabilitation of physical facilities, improvement of the quality of instruction and establishment of an educational supervision system. It would also upgrade and expand the research and extension programs of the Institute and thus contribute to the agricultural development efforts of Government. IDA Assistance to Azricultural Education and Training 33. A key objective of the Bank's strategy for assistance to Nepal is to assist the Government in designing and implementing a long-term program to develop the country's institutional capability and human resource base aimed at, amongst other things, raising agricultural productivity and efficiency. The proposed project is designed to contribute to meeting this objective. To date the training of higher level (graduate) personnel has been supported by USAID. However, on account of a modification in USAID's strategy for support to Nepal coupled with increasing constraints on its available resources, USAID has had to reduce its support for these activities. The Bank-s intervention at this stage vould complement USAID-s support for the sector. The project would aim to meet two main objectives (i) effect sig- nificant changes in the system, structure, quality and cost effectiveness of training of middle level agriculturel technicians, areas that have not received any significant support from other donors; and (ii) to strengthen higher level agricultural training at the Institute of Agriculture and Animal Sciences. 34. The proposed project is the first IDA intervention in pre-service agricultural education. Under the on-going Agricultural Extension and Research project (Cr.ll0O-NEP), the physical facilities of two regional in-service training centers - Nepalganj and Bhairawa are being improved. One other IDA supported training program which has some bearing on agriculture is for foresters under the Community Forestry Development Training project (Credit 1008-NEP). This project is financing a nev training center in Pokhara to train about 40 foresters (diploma) and soil and water conservation officers per year as well as 100 technicians; a further 100 technicians per year will be trained through upgrading a similar training center at Hetauda. The output from the activities to be supported by the proposed project will have an important bearing on the realization of the objectives of a number of other IDA supported projects in the agricultural sector. Of immediate note is the Agricultural Extension project scheduled to be negotiated soon; the activities of the extension project would create a demand for the JTA exten- sion staff to be trained by this project.  -11- PART IV - THE PROJECT 35. The proposed project was prepared in November 1981 by a WBIFAO Cooperative Programme Mission. Amendments to the proposed project were made by an IDAIFAO pre-appraisal mission in April 1983. The project vas appraised in September 1983. A timetable of key events relating to the project and special conditions are given in Annex III. A staff appraisal report (Report No. 4878-NEP, dated November 14, 1984) is being distributed separately to the Executive Directors. Negotiations were held in Washington, D.C. from October 31 to November 6, 1984. The Nepalese delegation was headed by Nr. Heet Singh Shrestba, Additional Secretary, Miuistry of Finance. Project Obiectives. Strategy and Scope 36. The proposed project is designed to assist H11 in: (a) improving the quality and relevance of middle level agricultural (crop and livestock) pre-service training; and (b) strengthening higher level agricultural pre- service training at IAAS by establishing a BS degree training program in animal sciences, upgrading the existing academic, research and extension programs and correcting the deficiencies in space requirements and instruc- tional facilities of the Institute. 37. Improvement of the quality and relevance of middle level traininR vould be achieved by: (a) introduction of reforms in the structure and system of training; (b) improvement in the management and supervision of training; (c) curriculum development (including development of student manuals and provision of reference materials, teaching equipment and develop- ment of the training farms); (d) teacher training; (e) establishment of a stueent selection and admission system; and (f) rehabilitation of physical facilities of the training centers at Paklihava and Lamjung. 38. Strenftheninz of dezree level trainina at IAA would be achieved by: (a) establishing a bachelor's degree program in animal science (including curriculum development); (b) staff training; (c) developing the TAA farm into an effective practical training and research facility; and (d) upgrading and expanding existing teaching, extension and research programs and physical fac.lities at Rampur. Detailed Features 39. JTA Trainins Prozram. To implement HMG's recent decision to modify the system and structure of training (paras 24-25), the JTA curriculum has to be revised. Draft revisions have been prepared by the existing TAA Subjects Committee composed of TAA staff and senior field staff of HOA. This draft vould be submitted for review and approval to the IAAS Faculty Board consist- ing of senior administrators of TAAS, Tribhuvan University and MOA. Curriculum revisions are focussed on the development of knowledge and practi- cal skills which are of direct relevance to the duties and responsibilities of agricultural extension workers and technicians. The JTA curriculum has  -12- been reviewed and commented on by IDA. During negotiations 1MG provided assurances that the Faculty Board would complete its review and approval of the JTA curriculum which would be satisfactory to the Association, by August 31, 1985, to enable IAAS to implement the curriculum starting the school year 1985 (Section 3.11 of the draft DCA). 40. In support of the revised curriculum and to upgrade the living condi- tions of the students and staff of the JTA tratiing centers (Paklihawa and Lamjung), the project would provide teaching equipment and develop the train- ing farms into effective practical training facilities. Adequate space requirements for teaching and housing of students and staff would be provided largely by repairing and renovating existing buildings. Water and elec- tricity would also be supplied. A few new structures, mostly animal sheds and some student and staff housing, would be constructed. The project would provide 200 student places (30 females) for agriculture JTA trainees at the Lamjung Training Center and 400 places (40 females) at the Paklihava Training Center, of which 300 would be for agriculture and 100 for livestock training. 41. Teacher Tr!inina and TrainiDR Nanazement. A teacher training program for agricultural teacaers would be established under the Communications Development and Extension Education Division of the Department of Rural Development (CDRD) at TAAS. All teachers at the JIA Training Centers would be required to undertake training in pedagogy including courses such as lesson planning, methods and techniques of teaching agriculture, course and student achievement evaluation and educational psychology. Thereafter, teacher training courses would continue to be offered to JIA teachers who would need refresher training and to agriculture teachers of MA-s in-service training program. USAID would provide 36 staff-months of expert services for an agricultural educator to assist IAAS in developing and carrying out the teacher training program and to prepare a five-year plan for the training of JTA teachers and ?NAs agriculture teachers. Thirty-six staff-mouths of fellowship training would also be provided by USAID for a staff member of the CDRD who would eventually take charge of the trairing program. The fellow- ship training would consist of advanced studies in agricultural education at a suitable institution preferably vithin the region. Essential train ig equipment would be procured under the project to support the program. By May 31, 1985, IAAS would have chosen the first complemeat of staff to be sent 'or advanced studies and that application for admission to a suitable univer- sity would have been made. To ensure that the remainder of the staff to be sent on fellowship training would be identified well in advance and their applications to universities are processed in good time, it vas agreed that HMG would furnish the respective applications by December 31, 1985. (Schedule 4(c) of the draft DCA). USAID would appoint the agricultural education expert by July 31, 1985. 42. To improve the management and supervision of JTA training, a suitable senior staff member of IAAS vould be appointed by EMS as Assistant Dean for Training before May 31, 1985 (Schedule 4(a) of the draft DCA). This post would be integrated in the administrative structure of IAAS. The terms of reference for the post have already been agreed with IDA. In performing his  -13- management and supervision functions, the Assistant Dean would be assisted by the CDRD staff member who would be in charge of teacher training after he completes his training (para 41). 43. Agricultural Manuals. To reinforce the introduction of reforms in the system, structure and curriculum of middle level training and to help update the knowledge of practicing JTAs and JTs ou latest practices in agriculture, agricultural manuals in about 15 subject matter areas and writ- ten in Nepali would be developed. The manuals would be designed to serve as student textbooks as well as reference guides for ITAs and JTs. The Subjects Committee under the guidance of the Dean of IAAS (who is also Project Director) and the Assistant Dean for Training would select the sub- ject mutter areas in which the manuals would be written and manage the preparation and production of the manuals. Selected local agricultural scientists and subject matter specialists would be commissioned under the project to prepare the drafts using locally available information and materials and recently tested research findings. After the drafts have been revieved by the Subjects Committee for content, the manuscripts would be edited by an expert in the Nepali language to eurure simplicity of writing and conformity with the comprehension level of JTI students. About 90 staff- months of local expert services would be provided for the preparation and editing of the manuscripts. Art work needed for the manuals, and printing and binding would be financed by USAID and carried out by the existing Tribhuvan University Publication Unit. Since most of the staff who will be involved in the preparation of the manuals have full-time jobs (scientists, professors and subject matter specialists of the Extension Service), work on these manuals would be additional to their current work load. It is estimated that the writing, review and rewriting of the manuscripts, the preparation of illustrations, testing and printing of the manuals will take at least two years. Distribution of the manuals, therefore, is expected during the third year of the project. The manuals would be distributed to a total of about 3,600 JIA students and about 3,500 practicing JTAs and JTs during the project period. During negotiations, HMG agreed to select and appoint the consultants who would prepare the draft of the agricultural manuals, by May 31, 1985 (Section 3.02(a) of the draft DCA). 44. Establishinz a Dearee Proaram (BS) in Animal Science. To meet anticipated future shortages for higher level livestock specialists (para 29) a degree program leading to the Bachelor of Science in Animal Science would be established at IAAS. About 48 staff months of expert assistance (24 in veterinary science and 24 in animal husbandry) would be provided by USAID to assist in curriculum development and in starting the training program. About 108 staff months of overseas fellowships preferably in the Region for specialized training in animal husbandry, veterinary science, animal genetics and forage production would also be provided by USAID for teaching staff. Considering the existing facilities at TAA5 and its staff strength, only a few additional teaching facilities consisting of one combined nutrition and environmental physiology laboratory, three classrooms and a few animal sheds would be required; only one additional teaching position (veterinary science) needs to be created. However, due to the lack of sufficient housing  -14- facilities for students and teachers at IAAS, additional housing for 180 students (80 females) and for 11 animal science teaching staff members would be provided under the project. Since the need to start the animal science degree program is urgent, the required experts would be needed to assist in establishing the program as soon as the project becomes effective. USAID would appoint the needed experts no later than July 31, 1985. 'Section 3.02(b) of the draft DCA). To ensure that the additional teaching staff would be available vhen animAl science training starts, KMG provided assurances during negotiations that the needed additional teaching post at TAAS would be created no later than July 31, 1985 (Schedule 4(b) of the draft DCA). 45. Upgrading and Expanding Existing Programs and Facilities at IAAS. To assist the Dean and staff of the Institute in implementing the planned reforms in the system, structure and academic programs of IAAS (paras 23-29), about 70 staff-months of short-term consultantships on specialized activities such as farm management, operation, care and maintenance of scientific equipment, food processing, home science and technology, and including inter- mittent consultantship in educational administration and management would be provided by USAID. USAID would also reinforce the existing staff of the general agriculture degree program by providing about 96 staff-months of fellowships for overseas training in agricultural engineering (24), agro- forestry (24), fish production (24) and soil conservation (24). In addition, to promote avareness among HMG's agricultural development planners, of the importance of human resource development in development efforts and the role of IAAS in agricultural development and to increase their competency in planning for agriculture development (para 31), about 96 staff-months of overseas fellowship training in Human Resources Planning (48) and in Economics of Agricultural Development (48) would be provided by USAID. The officers to be trained would be selected by 1M. About 41.7 staff years of local fellowships would also be provided by USAID for in-service training of IAAS and HMG staff in various subject matter areas as needed (para 41). During negotiations, EMG provided assurances that: (a) by May 31, 1985, the first group of TAAS staff members and HMG officers to be sent for overseas fellowship training would have been chosen and that applications for admis- sion to suitable universities, preferably in the Region would have been made, and by December 31, 1985 all the others would have been selected (Schedule 4(c) of the draft DCA). USAID would appoint the agricultural education administration expert by July 31, 1985. 46. To improve practical training of students and the research and exten- siou activities of both students and staff at IAAS (para 30), USAID would finance the development of the entire farm of the Institute, consisting of about 300 ha. This would involve setting up of a drainage system, repair of irrigation channels, fencing and land leveling and grading. Field and laborator-y equipment and materials would be provided under the project. The project would also assist in upgrading the living conditions of both students and staff of the Institute by rehabilitating existing water and lighting facilities. In addition, the project would provide an additional 23 staff houses and an auditorium. Field sports facilities would be provided by USAID  -15- to promote recreational activities in the campus community. In order to improve coimmaications between Tribhuvan University (Kathmandu), LIAA campus (Rampur) and its satellite campuses (Paklihawa and Lamjung), a radio comr- munication link would be established under the project between all these campuses. A guest house would also be constructed in order that visitations by staff of the satellite campuses to the main campus would be facilitated and that IAAS would be able to invite more resource persons from outside and increase the exposure of both students and staff members to new ideas and developments. 47. To encourage female students to enroll at IAAS and to extend educa- tional opportunities to students from remote and underprivileged Hill areas, a total of about 40 three-year scholarships (120 student-years) would be provided by USAID. The candidates would be selected and recomnended by the Admission Committee; the Scholarship Committee, chaired by the Dean of IAAS, would reviev the recommendations and award the scholarships. 48. Project Implementation Sui,ort. Except for the Project Director and the Project Coordinator who are regular staff members of IAAS, the costs of the staff of the Project Implementation Unit (PIU), who would provide the technical support needed for project implementation and who would be employed only for the duration of the project, would be financed under the project. The project would also provide all equipment, materials and miscellaneous expenditures required to carry out the function of the PIU and for expendi- tures that might be incurred in new project development and preparation. 49. Technical Assistance. USAID would finance the expatriate experts and the local and overseas fellowships (paras 41, 44) required for the project and would be responsible for the execution of this project component. However, agreement has been reached between USAID and IDA that consultations will be made to ensure that all the experts to be recruited would be accept- able to the Association. Proiect Management and Implementation 50. Overall project implementation would be carried out by a Project Implementation Unit (PIU) to be established at IAAS. The Dean of the Institute would act as PIU Director. The Assistant Dean for Training who is responsible for the management and supervision of the middle level agricul- tural training program of IAAS (para 42) and the Assistant Dean for Academic Affairs who is in charge of higher level education at IAAS, would advise the PIU Director in the implementation of educational aspects of the project. A Project Coordinator who would be directly responsible to the PIU Director would take charge of day to day monitoring and management of project activities and a semi-annual assessment (in January and July of each year) of the progress of implementation on the basis of project objectives and the implementation schedule. The Project Coordinator would be selected from the existing staff of IAAS. During negotiations HMG provided assurances that the project assessment report would be submitted to IDA for review by February 28 and August 31 of each year during the life of the project starting 1986  -16- (Section 3.10 of the draft DCh). The Project Director and the Project Coordinator of the PIU have already been appointed by HMG. The other staff members of the PIU would consist of a project engineer, three assistant engineers (one for each project site), an accountant/bookkeeper, a procure- ment officer, an accounts assistant and supporting staff. The project engineer has been designated by 1MG. The establishment of the PIU and the appointment of a project engineer, an accountant/bookkeeper and procurement officer would be a condition of credit effectiveness (Section 3.05 and 6.01(a) of the draft DCA). The project implementation schedule would be reviewed and revised annually and the financial requirements of the project would be adjusted as necessary by the PIU to ensure that project implementa- tion is not delayed, and the operation of the project institutions does not suffer because of lack of funds. HMG would furnish the Association by May 1 each year, starting 1986, with a revised project implementation schedule and an estimate of the required project funds for the following year and make the necessary funds available so as to ensure prompt project implementation during the life of the project (Section 3.06 of the draft DCA). 51. A Project Implementation Board to be established by HHG and chaired by the Vice Chancellor of Tribhuvan University with members composed of senior level representatives of the Ministries of Finance, Agriculture, Education and the National Planning Commission would be established to assist the PIU in solving implementation problems that may involve policy issues. One of the main functions of the Board would be to expedite matters requiring clearance or approval by HMG and requiring inputs from existing Government entities such as the Subjects Committee, the Faculty Board of IAAS and the Tribhuvan University Publication Unit. The establishment of the Project I-mplementation Board with terms of reference acceptable to IDA, would be a condition of credit effectiveness (Section 3.04 and 6.01(a) of the draft DCA). 52. Designs of staff houses, hostels and academic facilities constructed at TAAS under a USAID project which are available at TAAS would be utilized as much as possible. Designs for new buildings as well as for conversions and renovations of existing buildings and supervision of construction would be carried out by a local architectural consulting firm which has been appointed by BMG. The firm was selected on the basis of demonstrated skill in building conversions and renovations and project delivery. The firm has a qualified quantity surveyor to prepare bills of quantities, cost plans and establish cost control mechanisms. USAID vould finance the architectural fees to be incurred during the period from negotiations to credit effective- ness to enable the consultant architects to prepare working drawings prior to credit effectiveness. HMG has recently prepared model bidding documents which were approved by the Bank for procurement of goods and civil works. These models would be used in preparing the bidding documents and no problems are foreseen in completing the project bidding documents before credit effectiveness. 53. To ensure the effective use of buildings, furniture and equipment during the life of the project, funds for operation and maintenance and  -17- repair of physical facilities and equipment have been included in the project. EB provided assurances during negotiations that sufficient funds would be provided, thereafter, for this purpose (Section 3.01 of the draft DCA). Proiect Cost 54. Total project costs are estimated at about US$14.3 million equivalent including US$1.1 million in taxes. The foreign exchange component is estimated at US$7.2 million including contingencies or 50% of project costs. Physical contingencies are estimated at 10% of the base costs. Estimated costs are based on price levels prevailing in September 1983 adjusted to 1984 prices. Price contingencies for foreign exchange costs have been estimated at 8.5% per annum for FY86, 9.0% for FY87 and FY88, 8.2Z for FY89, 6.7% for FY90 and 6.0% for FY91. Local costs have been estimated on the basis of the following projected domestic inflation rates; 7X in FY86-88, 6.5% in FY89-90 and 6X in FY91. Proposed Financing 55. The proposed IDA credit of US$8.4 million equivalent would cover 64Z of the project costs, net of taxes. USAID would finance US$4.1 million equivalent or 31Z of total net project costs. The Government would finance the remaining US$0.7 million equivalent (5X) excluding taxes. The provision of evidence that all effectiveness conditions of the USAID grant agreement with HMG have been fulfilled would be a condition of credit effectiveness (Section 6.01(b) of the draft DCA). Procurement 56. Past experience in Nepal has shown that contracts for civil works (below US$800,000 per contract) and furniture (below US$250,000 per contract) and for building repair or conversion work do not attract foreign bidders. Therefore, contracts for civil works (US$6.27 million) which are mostly for building conversion and repair would be awarded on the basis of local com- petitive bidding folloving procedures which are satisfactory to the Association and do not exclude foreign bidders. The furniture and equipment (US$1.28 million) to be procured under the project consists of small items needed for teaching purposes and a few vehicles, office equipment aind furniture, most of which would be needed as soon as the project starts. This equipment cannot be grouped into packages suitable for ICB. Therefore, procurement would be through local competitive bidding proceduces fatisfac- tory to the Association. 57. Off-the-shelf items of furniture, equipment and educational materials (excluding books, journals and animal stock) not exceeding US$30,000 equiv- alent for each contract and aggregating to a maximum of US$110,000 would be procured on the basis of a minimum of three competitive price quotations. Books and journals (US$0.08 million) would be purchased directly from pub- lishers or authorized distributors at the lowest possible prices on the basis  -18- of at least three price quotations if applicable. Animal Stock (US$0.03 million) for instructional purposes would be purchased directly from live- stock breeders. Professional services and local consultants (US$0.87 million) would be provided in accordance with Bank group guidelines. 58. Procurement arrangements are summarized below: Procurement Procedures (US$ Million) Procurement Method Total Category ICB LCB Other NA Cost 1. Civil works - 6.27 - - 6.27 - (5.02) - - (5.02) 2. Furniture, vehicles, equipment, books and educational materials a/ - 1.28 0.22 - 1.50 (1.28) (0.16) - (1.44) 3. Agricultural manuals production - - - 0.64 I 0.64 bl and program support - - - - - 4. Local expert services including - - 0.87 - 0.87 engineering and architectural - - (0.87) - (0.87) services 5. Expatriate expert services - - - 2.96 i 2.96 / and fellowships - - - - - 6. Farm and sports field - - - 0.51 i/ 0.51 bJ development 7. Project implementation - - - 0.37 0.37 technical support - - - (0.37) (0.37) 8. Staff salaries, allowances and - - - 1.14 1.14 other operating costs - - - (0.72) (0.72) TOTAL c/ - 7.55 1.09 5.62 14.26 - (6.30) (1.03) (1.09) (8.42) Note: Figures in parenthesis are the amounts to be financed by the Credit. a/ Including animal stock. h Financed by USAID. 4j Totals may not add due to rounding.  -19- Disbursements 59. The Credit would be disbursed over a period of about six years which is about two and a half years shorter than average disbursement profile of all IDA assisted education projects Bank-wide from 1974 to 1983. This reduc- tion is justified since all project sites exist, and architectural designs and bidding documents would be completed prior to credit effectiveness. The proceeds of the proposed credit would be disbursed against: (a) 80Z of local expenditures for civil works; (b) 100l of foreign expenditures and 100% of local expenditures (ex-factory), 70Z of local expenditure (off-the-shelf) for equipment, educational materials, furniture, vehicles and books other than agricultural manuals; (c) 100% of local expenditures for consultants and professional services; (d) 10OX of local expenditure for project implementa- tion technical support; and (e) incremental expenditures for staff salaries, and operating costs (including consumable goods) on a declining basis by years (FY85/86, 10OZ; FY86187, 90%; FY87188, 80%; FY88/89, 60%; FY89190, 40%; and FY90191, 20Z). With the exception of items (d) and (e), all withdrawal applications for contracts equal to, or in excess of US$10,000 will be sup- ported by full documentation. Withdrawals against items (d), (e) and for contracts below US$10,000 in value would be made against Statement of Expenditures (SOE) certified by the Project Director. To extent practicable, withdrawal applications would be aggregated in amounts equivalent to US$50,000 or more (but not less than US$20,000), prior to submission to IDA for reimbursement. Project Accounts and Audits 60. PIU would prepare and maintain project accounts in accordance with sound accounting practices. Separate project accounts would be prepared and maintained for payments on the basis of Statement of Expenditures. HNG has agreed that (a) accounts and financial statements for each fiscal year would be prepared and audited by independent auditors acceptable to the Association, with separate accounts for payments on the basis of Statement of Expenditures; (b) certified copies of the audited accounts and financial statements, for each fiscal year, together with the auditor's report would be furnished to the Association as soon as available, but not more than nine months after the end of each fiscal year (Section 4.01(c) of the draft DCA). Project Benefits 61. Agricultural development in Nepal has been given the highest priority by HMG from the start of the Fourth Five-Year Development Plan period (1970). Since then, in spite of considerable investments in agricultural inputs, increases in production leave much to be desired. A number of factors con- tributed to this slow growth in production. HMG realizes, however, that one important factor is inadequacy of present agricultural extension and research services largely due to lack of sufficient and adequately trained manpower. The main benefit from the proposed project is that it would help ensure adequate quality and supply of agricultural manpower in Nepal within the next decade which would contribute directly to raising agricultural productivity. The projec would serve as a medium through which the inadequacies of agricultural education in the country would be corrected. At the middle level, the project would support institutional reforms in the system, struc- ture and content of training to make it terminal, practical and focussed on the skill requirements of field extension workers and agricultural technicians. At the higher level, the project would fill the gap in the  -20- agricultural training system by establishing a training program at IAAS for livestock specialists and would break the Government's complete reliance on foreign universities and external assistance for such training. The project would also upgrade and expand on-going training, research and extension nrogrpris of the Institute by providing the required facilities and support. Pro.___ Risks 62. The project sites are located relatively far from each other with poor means of communication between them. One project site (Laujung) located in the hill area, can be reached only by trekking from the nearest dirt road about 10 km. away. During rainy weather, trekking is slow and difficult and there is a risk that supervision of project activities by the PIU, which is based in one of the project sites (Rampur) would be irregular or infrequent. This could cause delays in project implementation or jeopardize the achieve- ment of the project objectives. To minimize this risk, the project would provide a radio communications link between the Tribhuvan University (at Kathmandu), the PIU (IAAS) and the other project sites. In addition, in each of the outlying sites (Lanjung and Paklihawa) a full-time assistant project engineer vould be posted to provide day-to-day management of the physical aspects of the project in their respective locations (para 50). PART V - LEGAL INSTRUMENTS AND AUTHORITY 63. The draft Development Credit Agreement between the Kingdom of Nepal and the Association, and the Recommendation of the Committee provided for in Article V, Section l(d) of the Articles of Agreement are being distributed to the Executive Directors separately. 64. Special conditions of the project are listed in Section III of Annex III. 65. I am satisfied that the proposed Credit would comply with the Articles of Agreement of the Association. PART VI - RECOMMENDATION 66. I recommend that the Executive Directors approve the proposed Credit. A. W. Clausen President Attachments November 20, 1984 Washington, D.C.  -21- AW= I AU,L v Page 1 of 5 UPAL - SOIA IVOCA(U AT sUE? *NL - OST RIPUPICE 4UH['(IrOIISMIGNtD AvEtASR (HOST xrt, tSflATF) E b t, s7D~~~~R: t aw^ u ?^lrlc msDs imcroc I l9E7 MIT Ei sAB S PACIFIC ASA & TACIFIC Tr*AL 140.4 14 8 I&.6 A(RtCUL?I1UAL 35:3 36.3 4t.2 CGM Po C&FtU i) 60C0 80.0 170.0 278,6 509l.2 (RILOO3MIS O tL 9quPAJzlV) 3 30.0 10.0 272.0 567.3 PopULAT.m1U4fS (n0SIM) 9 zi 350.0 t 1428.0 U3A1 PIPu iuLfel (I Or tOTAL) 1 i.9 6.4 21. 34.7 P0l0M5uLTtCW O 000 (HILL) 26.1 STATI'M ;=LtON (HILL) 71.1 P.jPULATIaN U 1.9 POwULATIW DI7t t Po! slq' 104. T.~ LAN 6 a s6 os.? 166.6 261.9 PER 50 106. 266628 30.4 365.1 t45.5 MM35.1 PopULATLIU AZ TlUCtum (Z) o-16 YR 3t I 42.0 42.2 35.8 9. o15- YRS S7.4 35.0 56.7 l.38 37.6 65 go AS 3,5 3.1 3.0 4.3 3.3 PKur.TWN atcAU" RATE (2) ToFAl- 6:5 1.9 2.4 1.9 2.3 URMN 4.5 4.2 5.0 ~~~~~~~~~4.1 4.3 c'IQtC a137t RO (PE 's AM 46.3 42.9 27.7 30,1 koc VaAI R;Cs (PRC TUOUS) 25'. 23.0 18.6 10.1 9.5 oas RSMjX flN IRATE 2:7 3.1 2.9 3.8 2.0 PAJILT PLA1NIt (Thous) 29.7 223.2 ASCRCS wc(mo OF .. 7.0 52.7 ?0HFOOD AIS,rgcPr OF WOOOF FOOD PER CAiPITA10. 3011.120 (1'9671-100) 106.0 10l.0 $3.4 112.6 123.0 PLI CAPITA SU?f UR9. 9. 7. 1. CALORIES CZ Of RCqijIREMWINS 950a %O 8. 9. 1. PROTEINS (tl&' PR DAT) 5t 0 51.0 .5.0 56.8 57.0 OF WICH L AND PULst 10:0 9.0 8.0 It 14.9 14.1 '312i (AM 5 .A) D5iH RATE 12,6 27.8 22.0 9.8 7.2 LIft EPCT AX 'IRo. (YEARS) 3 41.5 65.7 00 60.4 'IW ta "CRT: gArE (P TYouES 194.5 172.5 1S.Z 3.8 b I -'lR$5 tO 5AfS J1ATE WoP) 2.0 9.0 /a 32.9 37.0 TOTAL 47-j 53.0 81.0 7- 70.9 54.B R0lL^ , , 5.07* , d ZL1 26.6 AcczsS TO EXCRTA DIsPOSSAL TrOAL 1.0 l.0 At 18.1 41.3 14.0 &.0 7* 72.8 47.6 RUtAL -.6 33.3 PO SIATR PEX N F 73470.0 2b.0 3480 6.2 7749.4 Pop put WS .O 705P07.