Algeria - Technical Assistance - Rural Development Project

DocuMent of The World Bank FOR OMCIAL USE ONLY Report No. 5825 THE WORLD BANK PROJECT PERFORMANCE AUDIT REPORT ALGERIA TECHNICAL ASSISTANCE - RURAL DEVELOPMENT PROJECT (LOAN 1159-AL) August 22, 1985 Operations Evaluation Department This docmt ha a resies disribUew and say be wed by recipients only la de perfrmame of their oElicial dtes. Its clMsy net aberwise be diclsd wishOt Wordl Bank auedrStl. COUNTRY EXCHANGE RATES Name of Currency (Abbreviation): Dinar (DA) Currency Exchange Rate: Appraisal Year Average US$1.00 = DA 3.85 Weighted Average for Completion Studies US$1.00 - DA 4.40 ABBREVIATIONS BNA - National Bank of Algeria (Banque Nationale d'Algfrie) BNEDER - National Bureau for Rural Development Studies (Bureau National des Etudes de Dfveloppement Rural) DSE - Dry Sheep Equivalent IDOVI - Institute for Sheep Development (Institut de D6veloppement des Ovins) MARA - Ministry of Agriculture and Agrarian Reform (Ministere de l'Agriculture et de la R&forme Agraire) PCR - Project Completion Report (Rapport d'achevement du projet) T&V - Training and Visit Extension FISCAL YEAR OF BORROWER January 1 - December 31 FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT ALGERIA TECHNICAL ASSISTANCE - RURAL DEVELOPMENT PROJECT (LOAN 1159-AL) TABLE OF CONTENTS Page No. Preface ..................................... Basic Data Sheet ........................................... ii Highlights .........111........................ PROJECT PERFORMANCE AUDIT MEMORANDUM I. SUMMARY ........................ ............ 1 II. MAIN ISSUES .......................................... 2 A. General ........................................ 2 B. Development Priorities .......2............... 2 C. Lack of Borrower Commitment .................... 6 PROJECT COMPLETION REPORT I. Background: Origin and Objectives .................... 11 II. Project Formulation ........................... 12 III. Project Implementation .................. ...... 13 IV. Quality of the Studies and Consultant Performance .... 18 V. Government Performance in Project Organization and Management .................. . . ....... ...... 23 VI. Bank Performance ......... ............. ......... 24 VII. Project Impact and Follow-up Prospects -............ 25 ANNEX MAP - IBRD 11465 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. PROJECT PERFORMANCE AUDIT REPORT ALGERIA TECHNICAL ASSISTANCE PROJECT - RURAL DEVELOPMENT (LOAN 1159-AL) PREFACE This is a performance audit of the Technical Assistance - Rural Development Project in Algeria, for which Loan 1159-AL, in the amount of US$8.0 million, was approved in June 1975. The final disbursement was made on August 8, 1984 after an extension of the Closing Date, and the undisbursed part of the Loan, US$1.25 million, was cancelled on May 16, 1984. The audit consists of a memorandum prepared by the Operations Eval- uation Department and a Project Completion Report (PCR) dated April 25, 1984. The PCR was prepared by the Europe, Middle East and North Africa Regional Office. The audit memorandum is based on a review of the Presi- dent's Report (No. P-1659-AL) dated June 13, 1975, the Loan Agreement of September 4, 1975, and the PCR. Correspondence with the Borrower and inter- nal Bank memoranda contained in relevant Bank files have been reviewed and staff associated with the project have been interviewed. An OED mission visited Algeria in February 1985. The mission held discussions with officials of the Ministry of Finance and the Agricultural Bank but was not received by officials of the Ministry of Agriculture. A copy of the draft PPAR was sent to Algeria on April 30, 1985 for comments but none were received. The audit finds that the PCR covers adequately the project's salient features, its accomplishments and shortcomings, and the PPAM gene- rally agrees with the conclusions. The issues discussed have been selected because of their importance for this as well as other Bank-assisted projects providing technical assistance. The valuable assistance provided by the Ministry of Finance and the Agricultural Bank is gratefully acknowledged. - 11 - PROJECT PERFORMUAC AUDIT BASIC DATA SlEET ALGERIA TECINICAL ASSISTANCE - RURAL DEVELOPHEST PRUJECT (LOAl 1159-AL) KEY PROJECT DATA Appraisal Actual or Actual as Z of Bacimate Estimated Actual Agrisal Estimate Total Project Cost (USS million) 11.5 9.2 80 Loan amount (US$ million) 8.0 6.75 80 Cancelled 1.25 Board Approval Date 06/26/15 06/26/15 Loan Agreement Date 09/04/75 09/04/75 - Effectiveness Date 01106/76 01/06/76 - Date Physical Components Completed 06/30/79 06/30/83 - Proportion cuen completed (2) 30 100 - Closing Date 12/31/19 06/30/83 - Economic Race of Return (2) not calculated - CUMULATIVE DISBURSEHENTS FY75 FY76 FY77 FY78 FY79 FY80 y81 FY82 Appraisal estimate (US$ million) 2.5 5.0 8.0 - Actual (USS million) 0.0 0.0 0.6 2.2 3.6 4.5 5.5 6.- Actual as 2 of Estimate 0 0 8 28 48 56 69 80 Date af Final Disbrsement: August 8, 1984 MISSION DATA Date no. of Handays Specializations Performance Types of Mission (Mo.Yr.) Persons in Field Represented /a Rating /b rrend /c Problem id Appraisal 11/74 7 140 a.e.eg. - - - Supervision 1 02/75 2 20 a - - - Supervision II 08/75 1 5 a - - - Supervision III 10/75 1 5 a - - M Supervision IV 03/76 2 16 a - - M Supervision V 06/76 2 16 a 2 1 N Supervision VI 12/76 2 8 a,eg 2 1 K Supervision VII 04/77 1 A a 3 2 P.M Supervision VIII 02/78 2 10 a.q 3 1 M,P,F Supervision IX 08/78 1 15 r 3 1 M,P,F Supervision X 11/78 1 5 r 2 1 P,M Supervision XI 02/79 1 5 r 2 1 P,M Supervision XII 05/79 1 5 r 2 3 P.M Supervision XIII 09/79 1 5 r 2 1 P.m Supervision XIV 01/80 2 40 r,a 2 2 P,K Supervision XV 06/80 1 12 r 2 1 P,M Supervision XVI 12/80 2 r,a 2 1 P.M Supervision XVII 05/81 4 68 r,a,a.e 2 1 P.M Superrision XVill 09/82 4 40 r.a.e.1 2 2 P.M Supervision XIX 05/83 2 10 e(2) 2 2 H Total 427 mandays or 85 manweeks/e OTHER PROJECT DATA Borrower The Democratic and Popular Republic of Algeria Executing Agency a) Ministry of Agriculture and Agrarian Reform b) National Bank of Algeria Fiscal Year of Borrower January 1 - December 31 Name of Currency (abbreviation) Dinar (DA) Currency Exchange Rates: 1975 USS1.00 - DA 3.85 1984 USSL.00 - DA 5.06 Follow-on Project None /a a - Agronomist; e - Economist; eg - Engineer; a - Sociologist; r - Rural Development Specialist; 1 - Livestock Specialist. /b I - Problem free; 2 - Moderate Problems; and 3 - Major Problems. Tc 1 - Improving; 2 - Stationary; and 3 - Deteriorating. Id H - Managerial; T - Technical; P - Political; F - Financial; and 0 - Other. 7e 5 mandaso - 1 mammeek. PROJECT PERFORMANCE AUDIT REPORT ALGERIA TECHNICAL ASSISTANCE PROJECT - RURAL DEVELOPMENT (LOAN 1159-AL) RIGHLIGHTS The project was to respond to major priorities addressed by Govern- ment's rural development efforts. To this extent the project included pilot schemes for the development of two disadvantaged areas whose populations are among the poorest of rural Algeria. At national level, the project was expected to address two of the constraints facing accelerated rural develop- ment - agricultural extension and credit. In view of Algeria's limited trained manpower, the project was to provide technical assistance to plan, prepare, test and ultimately begin to implement four selected sub-projects over a three-year period. The project experienced major delays due to protracted selection procedures of consultants. The technical assistance component dealing with agricultural credit was the only successful part of the project. The other three sub-components have been found disappointing by the Government and no follow-up has so far resulted. No economic rate of return calculation had been tried at appraisal. Although major constraints in developing the project areas were successfully analyzed, up to now the overall impact of the project on agricultural development in Algeria can be termed at best as marginal. Other points of interest are: - Algerian development priorities of the agricultural sector were not properly recognized by the identification/appraisal missions (PPAM, paras. 10-15); - appraisal of benefits of eventual investments to be studied under technical assistance projects would be warranted (PPAM, paras. 19-20); - commitment of only one out of several ministries/agencies involved in the project proved to be totally insufficient to assure successful implementation and follow-up (PPAM, paras. 25-29); - contacting 83 consulting firms and evaluating their proposals was unwarranted and led to serious delays in project execution (PCR, paras. 3.02-3.04); and - the Algerian Agricultural Bank benefitted froiA the consultants, and extended their contract (PCR, paras. 4.11, 5.05). PROJECT PERFORMANCE AUDIT MEMORANDUM ALGERIA TECHNICAL ASSISTANCE - RURAL DEVELOPMENT PROJECT (LOAN 1159-AL) I. SUMMARY 1/ 1. The project was the first cooperative effort by the Government of Algeria and the Bank to work in the Agricultural Sector and was considered by the two parties as the preliminary phase for an anticipated wider Bank involvement in this sector. Its main objective was to prepare, test and implement different approaches to integrated rural development. The methods and solutions developed under the project were to be designed for widespread replication elsewhere in the country. At appraisal, the project was intended to provide technical assistance to help design pilot development schemes for two disadvantaged and neglected areas whose populations were the poorest of rural Algeria--the rangeland (Steppe) and the mountain zones--and to provide for studies to address two major constraints to rural development--agricul- tural extension and credit. 2. Project implementation experienced lengthy delays: eight years were necessary for project completion instead of the four years estimated at appraisal. Delays occurred during almost all phases of the selection and contracting process in the recruitment of the consultants. The project was revised to include, in addition to the original components, construction of houses for the consultants in the rangeland sub-project area and preparation of a rural development project in Batna and an agricultural development proj- ect in Sidi Bel Abbes. 3. The actual cost of the project was USS9.2 million, implying an overall underrun of about 20%. Increased costs caused by the combined effect of the delays experienced in implementation and the inclusion of new com- ponents were more than offset by the effects of revaluation of the US dollar vis a vis the Algerian dinar and the costs of the consultant services which were actually much lower than appraisal estimates. 4. Technical assistance provided by consultants was of uneven quality depending on the sub-projects, partly because of the unsatisfactory perfor- mance of some of the consultants and partly because of lack of guidance and support by the Ministry of Agriculture and Agrarian Reform (MARA) which was in charge of project coordination and of execution of all but the credit sub-project. 5. rcoject execution continuously suffered from lack of commitment, lack of coordination, and poor supervision by the Ministry of Agriculture and 1/ Adapted from the PCR. - 2 - Agrarian Reform. The latter showed serious inefficiencies during the first five years of implementation before it effectively transferred project re- sponsibility from its central departments to two semi-autonomous agricultural agencies, National Bureau of Rural Development Studies (BNEDER) and the Institute for Sheep Development (IDOVI). Management of the credit sub-proj- ect by the National Bank of Algeria (BNA) was satisfactory. 6. Bank performance was mixed. The scope of the technical assistance to be provided by the project was insufficiently defined at the time of appraisal, which led to subsequent problems in implementation. However, the Bank made an effort to help the Government resolve the project implementation difficulties and displayed great flexibility in managing the project. 7. In spite of the delays and the shortcomings of some of the studies prepared, the project met its objective of analyzing the major constraints and designing and, in some cases, testing different approaches to agricul- tural development in Algeria. The results can represent a fair basis for execution of projects in this sector. However, limited emphasis was given to socio-economic and land tenure aspects; irrigation development was either neglected (in the rangeland component), or inadequately designed (in the mountain component); no significant experimental work or start of implementa- tion was undertaken as was provided for under the project. At this stage it is not clear whether the Government has decided to execute projects based on the studies carried out under this project. II. MAIN ISSUES A. General S. The project was expected by the Bank to lay the foundation for future cooperation between the Bank and the Algerian Government to develop the agricultural sector. The impact of the Bank-financed studies has so far been very limited. Only the Algerian Agricultural Bank (formerly BNA) states that it has benefitted from the consultants financed under the project. The studies of the mountain and steppe regions have been shelved by the authori- ties and nothing productive has come out of the extension review. 9. What has gone wrong? In the mission's view the wish to start lend- ing to the agricultural sector overruled economic and technical considera- tions. The short time spent on project preparation and appraisal did not enhance the likelihood of successful execution of the contemplated studies. B. Development Priorities 10. The Bank's economic sector work in Algeria produced three reports2/ during the years 1971-75, all of them analyzing the prospects and 2/ Report No. EMA-39, dated October 29, 1971; Report No. 155-AL, dated May 29, 1973; and Report No. 900-AL, dated October 20, 1975. -3- priorities of the country's agriculture. The development priorities as seen by the Algerian authorities were analyzed and found acceptable. 11. The 1971 economic report lists the basic objectives of the 1970-73 Four-Year Plan to reorient production towards satisfying the growing domestic demand and redu-ing imports as well as to expand employment possibilities in agriculture. The means by which these targets were to be achieved included agrarian reform, reduced fallow, increased input use, expansion of irriga- on, mechanization and improved infrastructure. 12. The 1973 economic report confirmed the Four-Year Plan's objectives and investment priorities. The emphasis on irrigation development - scarcity of rainfall being a major constraint to production - can be seen from the Plan's monetary allocations. Out of a total 1970-73 allocation of DA 4,140 million (at 1969 prices) for public investments in the agricultural sector, DA 2,000 million or almost 50% were to be in support of irrigation devel- opment. Modern inputs for the socialized sector were expected by the plan- ners to reach DA 1,300 million annually. Fertilizer consumption of the socialized sector went up from 67,000 tons in 1969/70 to 157,000 tons in 1971/72. Another priority of the Plan was to safeguard the adequate mechani- zation of the socialist sector. The favored status of the socialist sector in regard to investment priorities appears reasonable since it accounted for 90% of citrus, 80% of grape, 40% of cereal, 50% of vegetable and legume out- put and practically all sugar, cotton and sunflower was produced by the "self-managed" sector. 13. The mission responsible for the 1975 economic report visited Algeria shortly before the appraisal mission in April/May and September 1974. Again expansion of irrigation was found to constitute the major investment category under the 1974-77 development plan with a total alloca- tion of DA 4,600 million. Agricultural credit for modern input use and machinery replacements in the socialist sector was identified as another pri- ority of the then new Four-year Plan. Allocations of credit envisaged for the Plan period amounted to DA 3,200 million for the self-managed sector and DA 1,600 million for the Agrarian Revolution Sector. Under the Agrarian Revolution redistribution of private land and livestock to the paor and land- less rural population had commenced in November 1971. By 1974 it was expected that redistribution of about 10-15% of private land and livestock would allow the settling of about 100,000 additional beneficiaries. Focus of the development effort was on the establishment of production cooperatives and agricultural services cooperatives. The Plan also provided for the expansion of extension activities with a corps of 26,000 engineers and tech- nicians and 80,000 skilled extension agents to be built up by 1980. 14. Although the share of agricalture (13% of investments during the 1974-77 Plan period) would remain unchanged from the previous Four-Year Plan, Government, according to the Bank's analyses, expected to progressively bring about 5 million hectares of cultivated land and 20 million hectares of steppe paatures under the provisions of the -Agrarian Revolution. The key objec- tives of the Agrarian Revolution are to redistribute agricultural lands and livestock to the rural poor and/or the landless to diminish rural migration. Where feasible this would also lead to higher production through grouping farmers in production cooperatives or assisting them through service coopera- tives. Higher output, in areas with development potential, is expected to be brought about by expanding irrigation, improved seeds/fertilizer packages and upgrading of livestock. 15. In contrast to these priorities presented in the economic reports, the President's Report submitted to the Board recommending approval of this project, does not discuss all the Algerian priorities in regard to the devel- opment of the agricultural sector. No mention is made of the Algerian prior- ity number one: irrigation, nor is there any effort to deal with solutions to improve performance of the socialized sector. Despite the Government's and especially MARA's emphasis on supporting and improving the socialized (also called the "modern state") sector the President's Report highlights only its shortcomings: ..poor financial planning and management, inadequate technical advice, lack of workers' incentives, welfare obligations, inappro- priate size or location of production units, and lack of credit discipline. Moreover, agricultaral pricing policies, inefficient marketing organizations, and the system of highly centralized farm management and control have not been conducive to higher production." 16. The narrow view taken by the appraisal, focusing exclusively on how the Bank could get involved in integrated rural development, is difficult to understand in the light of previous Bank analyses all pointing to insuffi- cient rainfall as the major constraint to increased production, and to the disappointing performance of the modern state sector which, according to the President's Report "accounts for about 45 percent total agricultural produc- tion."3/ 17. The Bank's restricted view is further demonstrated by the fact that the Bank's July/August 1974 identification mission received a Government list of 25 project possibilities, of which 14 were agro-hydraulic projects. Three project proposals dealt with forestry, one concerned a food reserve program and another the country's meteorological service. However, the mission con- centrated on projects that would be either rural development projects per se or be in support of eventual rural development projects like extension and credit. 18. Confronted with insufficient planning and lack of rural development experience, the following appraisal mission (November 1974) recommended stud- ies of two of "the country's most disadvantaged regions" - one in the coun- try's mountain area, Arris, w.th altitudes ranging from 1,100 m to 1,900 m and the other in the steppe area with annual rainfall between 100-400 mm. These natural factors alone provide sufficient explanation why these sel--:ted regions are "most disadvantaged" and why the economic as opposed to the social development potential would be limited. A limitation that received ambiguous treatment in the President's Report: para. 33 states the area "has 3/ Report No. P-1659-AL dated June 13, 1975; p. 7, para. 16. -5- a potential for the development" and para. 37 quotes a "limited agricultural potential". 19. Despite the obvious limitations of the selected areas there was never an attempt made to estimate the likely economic returns of an eventual rural development project in the mountain and/or steppe areas. The Opera- tional Manual, Statement No. 4.00 (para. 33) of March 1974, stipulates that "Board presentation of Technical Assistance and Engineering loans will be in a President's Report (normally without an appraisal report)." Due to the selected areas' limited development potential, an economic evaluation, as contained in appraisal reports, would have been beneficial. 20. A full fledged appraisal report would have also been warranted on other grounds. The Algerian Government was disappointed by the outcome of the 1974 identification mission, as demonstrated in a letter, dated September 24, 1974 in which the Secretary General, Finance expressed his "profound deception" by the Bank's decision to support a Technical Assistance project rather than the expected substantial financial participation in the country's agricultural development. An appraisal report would have better clarified the pros and cons of concentrating development efforts on regions of margin- al, if any, potential and contributed to a better understanding of the need for technical assistance. In this context it should be noted that the Opera- tional Manual Statement No. 4.00, encourages the use of other than Bank funds for technical assistance. In paras. 28 and 33 it is stipulated that reasons for Bank financiag of technical assistance have to be given and an explana- tion has to be provided why alternative methods of financing were unavailable or rejected. The President's Report of the project does not comply with this stipulation. 21. The time constraints of the appraisal and the feasibility of the selected studies were at the time recognized by Bank staff and brought to the attention of management but to no avail. An October 1W74 memo states: "It is hard to believe that the projects can be prepared and carried out effectively within the proposed periods of time" and "It is also hard to believe that the Alger- ian need and care for most of the proposed additional technical assistance from foreign experts and that they can draw significant benefit from it." A November 1974 memo points to the fact that "time is too short for different phases of the program." A December 1974 memo warns that the appraisal had "barely enough time for field visits." Rut, like an avalanche, the idea of a technical assistance project geared to rural development gained momentum and could not be stopped or changed in its direction! 22. In regard to the project's direction several issues other than the likely problems caused due to different Government priorities could and should have been raised at the appraisal stage. First, it was known that the steppe's grazing potential had deteriorated due to substantial overstocking/ -6- overgrazing of the area. It was equally evident that destocking would be the first step in trying to regenerate the grassland. However, it should have been equally clear that neither the Bank nor anybody else had ever succeeded with a destocking program. Since regeneration of rangeland will take several years, destocking would.require some form of compensation to livestock owners which most developing countries cannot afford. 23. The project's pilot area for instance has an estimated 6,300 house- holds dependent on agro-pastoral activities. Livestock population numbers 488,000 sheep, 40,000 goats and 20,000 other livestock. About 66% of these households own flocks of about 41 animals on average. Since the carrying capacity of the 635,000 ha rangeland is only 0.11 DSE4//ha and the present stocking rate reaches 0.76 DSE/ha, flocks need to be reduced to one-seventh of their present rate. Translated into livestock numbers the smallholder flock would be reduced to six animals/household. How could a family survive with such a small flock? 24. Second, it was known that Algeria planned to invest heavily in expanding and improving its agricultural extension services (see para. 13 above). It was also evident that the "modern state" sector was also in bad need of technical/managerial advice. But instead of assisting these Plan objectives, which were expected by the Algerians to be accomplished by 1980, the Bank embarked on a study to find solutions on extension methodology at a time when full fledged extension projects were financed by the Bank in other countries, and when the Regional Office responsible for Algeria had experi- enced the successful work of the Training and Visit (T&V) System in Turkey. The remarks that "traditional farmers...have difficulty in identifying and articulating their production problems-5/ adds insult to injury since it showed a lack of recognition on the Bank's side on the role of extension and what could be accomplished through existing extension systems.61 Psycho- logical aspects could have been studied and resolved during the implementa- tion of a discrete extension project. C. Lack of Borrower Commitment 25. The PCR correctly states that -the Bank was not able to assess MARA's central department's commitment to the project" (para. 6.01). The lack of commitment was a recurring theme in most of the supervision reports during project implementation. Questions can be raised whether this problem 4/ DSE = Dry Sheep Equivalent. 5/ President's Report, op. cit., p. 16, para. 41. 6/ In its comments OPS points out that despite the early success at Seyhan, the Bank still knew too little about T&V (Training and Visit system) to take the plunge of recommending it full scale to Algeria. In the audit's view the Bank had by then financed discrete extension projects in other countries and questions the need for pilot projects or studies. - 7 - could have been identified at an early stage and if a different project con- cept might have found MARA's acceptance. 26. At the time of project identification/appraisal it was known to the Bank that MARA's main concern was the "modern state" sector. As mentioned in para. 12 above, the sector accounted for 45% of the agricultural output, farmed land of highest potential - and was in difficulty. Rural development on the other hand was the responsibility of the Ministry of the Interior, iich, at the time of identification/appraisal, was headed by a dynamic minister who shared the Bank's enthusiasm about rural development, i.e., assisting the rural poor in disadvantaged regions of the country, providing social infrastructure, etc. The proposed studies fitted into his ministry's development strategy and therefore received his full support. 27. The tragic accident that caused the death of the minister in Deceur- ber 1974 reduced the likelihood of project support by Government. The rnnse- quences of the changed political situation did not go unnoticed in the "ank, since a March 1975 memo states: "The untimely death of the Minister (Interior) may have resulted in a loss of political support from the Ministry of Interior." Although there was still ample time for a post-appraisal mis- sion between the demise of the minister and the negotiations in early June 1975 the opportunity to explore MARA's attitude vis a vis the proposed proj- ect was missed. 28. Following Board approval it became more and more obvious that there was not too much enthusiasm on the part of MARA to fully support the project as conceived. Several candidates for the advisor to the project coordinator were turned down on grounds of unsatisfactory qualification. MARA also requested to invite 83 consultants to submit proposals, a rather time consum- ing exercise, followed by protacted evaluation of the proposals. During all these months the Bank never tried to find out if a change in the scope of the studies would not better fit MARA's priorities. 29. A major lesson learned from this project experience is that brief contacts at highest Bank-Government level are no substitute for sound project preparation-appraisal, which should discuss and evaluate the commitment of all Government ministries and agencies likely to be involved in project implementation. Banking everything on the support of one minister is playing va banque. 30. The audit mission was unable to discuss with Algerian authorities the question why the Government proceeded with the loan in 1975 in the light of the limited interest shown by the Ministry of Agriculture. e e k I ALGERIA TECHNICAL ASSISTANCE PROJECT - RURAL DEVEIDPMENT (Loan 1159-AL) PROJECT CCMPLETION REPORT April 25, 1984 -/b_ 芦4丁2卸cづら－冷 PROJECT COMPLETION REPORT ALGERIA TECHNICAL ASSISTANCE PROJECT - RURAL DEVELOPMENT (Loan 1159-AL) 1. BACKGROUND: ORIGIN AND OBJECTIVES 1-01 The project was the first cooperative effort by the Government of Algeria and the Bank to work in the Agricultural Sector. It was considered by the two parties as the preliminary phase for an anticipated wider Bank involvement in this sector. It originated during a visit of the President of the World Bank to Algeria in February 1974, when he and the President of Algeria agreed to explore possible cooperation in rural development. The Ministry of the Interior of the Government of Algeria (and subsequently MARA, the Ministry of Agriculture and Agrarian Refora) and the Rural Development Division of the Central Projects Staff l/ of the Bank were assigned responsibility for the necessary follow-up. The project was mounted in a relatively short period since identification, preparation and appraisal took place in three missions during the following nine months. 1.02 The project was to respond to major priorities which were set by the Government in its efforts in developing the rural areas in the country. The start of the project coincided with the completion of the first phase and the start of the second phase of the Agrarian Revolution instituted in the early 1970's. This & arian Revolution constituted the Government's most ambitious and comprehensiv,; effort to develop Algeria's rural areas with the objectives of redistributing land and livestock outside the state-owned sector to poor farmers and landless peasants, establishing production and service cooperatives, increasing agricultural production, improving social services, increasing family incames and social equity and diminishing rural migration. The project was designed to contribute towards setting up a sound basis for addressing these objectives- Its main objectives were to strengthen the planning and implementation capabilities of local and regional administrative bodies, and to develop needed rural institutions and services. More particularly, it was aimed at working with local-level authorities to prepare, test and implement different approches to integrated rural development. The methods and solutions developed under the project were to be designed for widespread replication elsewere in the country. I/ The Emena Agriculture II Division was made responsible for the project within the Bank in June 1982. - 12 - II. PROJECT FORMULATION Identification and Preparation 2.01 The Loan processing reflected the mutual desire of the Government and the Bank to start cooperation in the rural development sector in a rapid way. The project was identified, prepared and appraised by three Bank missions which visited Algeria in April, July and November 1974. Actually, project preparation and appraisal took place at the same time during the November mission since the two preceding missions were almost entirely devoted to identifying the project components (sub-projects) which were selected from the 25 proposed by the Government. Negotiations were held in June 1975 and the Loan was presented to the Board three weeks later during the same month. No identification, preparation or appraisal report was prepared, either by the Bank or by the Government. The only working documents for the Government, consultants and the Bank staff during project implementation were the President's Report prepared in June 1975 and the Loan Agreement signed in September 1975. By their nature, these two documents could not provide clear and precise answers for many of the project execution aspects. More preparation work and the preparation of a full project file would probably have helped prevent the project from facing part of the problems and delays which were later experienced. This also would have allowed for better mutual assessment and understanding of the working conditions, the rules, procedures, and practices for procurement of goods and services prevailing in Algeria and in the Bank, especially since this was the first attempt made by the two parties to cooperate in the agricultural sector. Project Components and Issues at Appraise 2.02 The project provided for technical assistance to help (a) design pilot development schemes for two disadvantaged and neglected areas whose populations were the poorest of Rural Algeria--the rangeland (Steppe) and the mountain zones; and (b) address two major constraints to rural development-- agricultural extension and credit. Specifically, the project included employment of foreign consultants and local specialists, and procurement of associated equipment required to plan, prepare, and test the following four selected sub-projects, over a three-year period: (a) Rangeland sub-project: studies, experiments and start of implementation for integrated agro-pastoral development of F30,000 ha in the rangeland zone of Ksar Chellala; (b) Mountain sub-project: studies for integrated rural development to benefit the population of a mountain zone of about one million hectares covering the Daira 1/ of Arris in the Aures mountains; (c) Extension sub-project: studies for an agricultural extension system by setting and testing an experimental program in the Wilaya 2/ of Sidi Bel Abbes and by developing specialized facilities for the training and the technical support of extension agents; and 1/ Daira = territorial District of a Province 2/ Wilaya = Province - 13 - (d) Credit sub-project: studies and assistance to the Algerian National Bank (BNA: Banque Nationale d'Algirie) to review and improve its policies, procedures and management of agricultural credit. 2.03 The project was to be executed by four teams of experts including 52 Algerian specialists and 24 foreign consultants on a three year full-time basis and consultant services for about 146 man-months of short-term consultants. One consultant was to be hired to assist in coordinating the project activities. The project also included the provision of about 70 vehicles needed for the Algerian specialists. 2.04 The three issues which were identified at appraisal proved not to be the most important issues encountered during project implementation. The first concerned the selection and employment procedure of the foreign advisor to the project coordinator and.his relationship to the Bank. It was recommended that the foreign advisor be recruited by the Bank with Goverment's approval and then seconded to the Project Unit. The foreign advisor would thus be an employee of the Government and be paid by the Bank from the proceeds of the loan. The second issue concerned the level of disbursement percentages of the various Loan categories. The third issue was the appropriateness of the terms of the Loan. Important problems such as project coordination, organization and management, and foreign consultant recruitment procedures which turned out to be key future problems were not sufficiently dealt with. They were not raised by either the Bank or the Borrower. III. PROJECT IMPLEMENTATION Project Execution and Delays 3.01 The project experienced lengthy implementation delays. Instead of four years, the project was completed in about eight years although time strictly spent for implementation of each sub-project, once the studies had been contracted, was similar to what was foreseen at appraisal: three years for the extension, the mountain and the rangeland sub-projects and two years for the credit sub-project. While most delays occurred during the selection and contracting process of the consultants, some of them were also attributable to the revision of the project to include additional activities not foreseen at appraisal. The Consultant Selection and Contracting Process 3.02 The selection and contracting process of the foreign consultants, which was scheduled to last one year, actually lasted from 21 months to as long as 54 months depending on the project component. Time spent for completing the main phases of the selection and contracting process for each of the four components and for the coordination advisor can be broken down as follows: - 14 - Actual Selection and Contracting Schedule Time Period (months) Responsibility After the Preceding Activity according Activity Rural Dev. Rangeland Extension Credit Coord. to the Loan Component Component Component Component Advisor Agreement Date of start of Selection Process - (June 1975) 1. Preparation & Disc. of TOR /a & list of Consult. 8 11 8 8 ) Bank, Govt. 2. Submission of ) Bids 2 2 2 2 ) Bidders )18 3. Evaluation of ) Firms' Proposals 10 15 11 2 ) Government 4. Contract Negoc. 1 3 2 2 ) Govt, Bidders 5. Contract Approv. until contract signature 5 10 4 5 7 Government, Bank 6. Preparation Work for Consultants' Installation in Algeria 6 13 1 2 3 Government 7. Start of Study (April 78) (Dec.79) (Oct.77) (March 77) (Oct.77) TOTAL 34 54 28 21 28 Ia TOR = Terms of References - 15 - 3.03 Long delays were experienced in almost all phases of the selection and contracting process for each project component: (a) Preparation and discussion of Terms of Reference (TOR): this phase started right after loan approval in June 1975. Eight to eleven months were necessary for the Government and the Bank to discuss and agree on the final TORs and on the list of consulting firms to be invited to bid. This long delay resulted from a combination of several problems: First, there was no prior agreement on the detailed TORs before Board Presentation. Information regarding consultants included in the Loan Agreement (LA) and the President's Report (PR), was meager and was oriented mcitly toward estimating project costs, since only a list of specialists with the duration of their employment was attached to the LA. Second, before negotiations, it was not yet clear which Government agencies would be in charge of coordinating the project and executing its various components (see para. 5.02). Several months were necessary to acquaint the agencies which were later assigned these tasks, with the project objectives, preparation of TORs and the selection process. Third, the LA did not incorporate the procedures to be followed for consultant selection. Three months were necessary to reach an agreement on procedures which eventually proved to be lengthy and cumbersome. Fourth, lengthy discussions took place between the Government and the Bank on the number and the list of consulting firms to which the requests for proposals (RFPs) should be sent. While BNA 11, in charge of the credit component, agreed with the Bank on a short list of 6 consulting firms which was acceptable to the Bank 2/, MARA, which was responsible for the other components, insisted that RFPs should be sent to every consulting firm that had expressed interest in bidding. As a result, as many as 83 firms were contacted (30 for the mountain sub-project, 24 for the extension sub-project and 27 for the rangeland sub-project). Fifth, review by MARA of any draft of RFP proposed by the Bank took an excessively long time; this was particularly the case for the rangeland RFP, when after an agreement was reached on the draft RFP during a supervision mission, two months were then necessary for the MARA officials to confirm and pronounce their final agreement and to formally authorize the Bank to send out the RFPs to the consultants. Sixth, as long as 18 months were necessary for MARA to agree on a suitable candidate for the position of advisor to the project coordinator. As many as fifteen candidates were, at the Government's request, proposed by the Bank for Government's consideration. All candidates were either turned down by MARA because they were not found satisfactory or because they were reluctant to work directly on the Project under the conditions offered. Finally, MARA proposed its own candidate who was accepted by the Bank. (b) Evaluation of firms' proposals and contract negotiations: This phase also went very slowly except for the credit component. It took longest (15 months) for the rangeland component mainly because seven 1/ BNA = Banque Nationale d'Alg6rie 2/ The Bank's guidelines recommend a short list of firms with a lower limit of three and an upper limit of six. - 16 - months after the consulting firm submissions were received, MARA decided to reject all five proposals and to directly contact other firms for possible collaboration. MARA entered then in sole-source negotiations with the South Australian Government, and negotiations were completed ten months later. Evaluation of the proposals for the extension studies also took several months (11 months); no precise reason was given to the Bank for this delay except that no general consensus was reached within MARA on the suitability of the firm which was found most advantageous by the bid technical evaluation team. Evaluation of proposals and contract negotiations for the mountain component took ten months as a result of divergent positions between the Government and the selected bidder regarding the percentage of funds eligible for repatriation. This percentage was finally decreased from 86% to 73% of the contract amount. (c) Contract approval: another four to ten months were required by the local committees to provide final approval of the various contracts. The delay for the signature of the rangeland contract was exacerbated by the time (10 months) it took for the South Australia Government to sign the contract. (d) Preparatory logistical support for installation of consultants: non-availability of houses delayed the start of work by the consultants. This was particularly the case for the rangeland- consultants and local counterpart specialists for whom new houses had to be constructed under the project. Eleven months were thus spent for bidding, contracting and installing new prefabricated houses in the subproject area. It is worth noting that no logistical support- related issues had been raised either by the Bank or by the Government before the contracts reached an advanced stage of negotiations with the consultants. Such issues should have been substantially analyzed during project preparation and appraisal. Project Revision 3.04 The Government requested and the Bank agreed, twice that the project would be revised to include, in addition to the components proposed at appraisal and mentioned above (para. 2.02), construction of houses for consultants in the rangeland subproject area, preparation of an agricultural development project in Sidi Bel Abbes and of a rural development project in the Batna area. The Sidi Bel Abbes project was expected to become a tool for implementing on a larger scale the extension approach developed under the present project and was appraised by the Bank in March 1980. However, subsequent processing was not continued after its appraisal because a number of activities required to be completed before Board Presentation were not undertaken. In addition, a change in the scope of the mountain development study was agreed upon by the Government and the Bank; the change reflected an extension of the project area from the Daira of Arris to the whole Wilaya of Batna. This extension was required to ensure an economically justified project. Several missions were fielded by the Bank during 1979 and 1980 to help the Government prepare this project. It is worth noting that the preparation of the Batna and Sidi Bel Abbes projects was launched in parallel with the ongoing studies of extension and mountain rural development which were at that time in their preliminary phase of implementation. Finally, as - 17 - mentioned in para. 3.03(d), the construction of houses for the rangeland consultants proved necessary for the start of the field study work in the sub-project area. Study Execution 3.05 Once contracted, three of the four project studies were implemented, as foreseen in the Loan Agreement, in two years for the credit component and three years for the extension and the rangeland components. The contract for the Arris mountain component was cancelled by MARA after one year of work at the completion of the first phase of the study because MARA found that the quality of the consultants' reports was not satisfactory (para. 4.06). These studies were resumed one year later after the sub-project area was expanded to the whole Batna Wilaya and after the responsibility for carrying out the study of the sub-project was shifted to BNEDER (Bureau National des Etudes de Developpement Rural) which subcontracted with a foreign consulting firm to complete the studies. These recontracted studies were completed in two years. Preparation of the Sidi Bel Abbes project went on schedule and was also completed in two years. Procurement 3.06 The absence of agreement on the use of procedures satisfactory to the Bank for the recruitment of consultants and the absence of background papers where more such details would have been included, resulted in substantial delays. While MARA officials were not familiar with procurement procedures and practices required by the Bank, the Bank staff did not have an adequate opportunity to ensure that Algerian procedures would be compatible with the Bank guidelines. The only mention made in the loan agreement on selection of consultants is that their qualifications, experience and terms and conditions of employment be satisfactory to the Bank. This was the practice at that time. It appears that the matter was not adequately discussed during appraisal and negotiations. Consequently, a special agreement had then to be reached four months after negotiations on the specific recruitment procedures to be followed under the project. Unlike BNA, which was responsible for the credit subproject, MARA did not agree with the demand to limit the short list of consultants to a maximum of six (para. 3.03(a)). Costs and Disbursements 3.07 The total cost of the project at completion was US$9.2 million, compared with US$11.5 million estimated at appraisal, implying an overall underrun of 20% despite the fact that project implementation was more than four years behind the initial schedule. This is because (a) the average weighted exchange rate of the US dollar during project implementation was 14% higher than at appraisal (4.4 DA instead of 3.85 DA); and (b) costs for consultant services were actually 15% lower than appraisal estimates although studies, not foreseen at appraisal, were added during project implementation (see para. 3.04). However, if allowance is made for exchange rate variations, the actual project cost would have had an underrun of only 5%. - 18 - 3.08 A total of US$6.4 million (or 80%) was disbursed out of the US$8.0 million Bank loan. The amount disbursed at the December 31, 1979 original closing date specified in the loan agreement was US$2.7 million. The Loan closing date was postponed, first, by two years to December 31, 1981 and then by eighteen months to June 30, 1983 to allow for completion of the project activities. The final disbursement is being processed by the Bank. It relates to expenditures for consultants incurred before June 30, 1983. It is expected that the final total disbursements will amount to US$6.7 million and that 1.3 million will be cancelled. A comparison of projected and actual disbursements by category is shown below. Actual disbursement schedule is shown in Annex. Category Loan Agreement Actual Projections ------------ US$ million-------------- (I) Consulting Services -Rangeland Subproject 1.360 2.065 -Mountain Subproject 1.350 1.346 -Extension Subproject 2.165 1.370 -Credit Subproject 0.390 0.418 -Project Coordination 0.163 0.479 -Sidi Bel Abbes Subproject - 0.860 (II) -Vehicles and Equipment 0.650 0 Ia (III) -Prefabricated Rouses - 0.128 (IV) -Unallocated 1.922 TOTAL 8.000 6.437 (Z) (100) (80) /a The purchase of vehicles was fully paid for by the Government because, contrary to the LA provisions, the vehicles were procured through negociated contracts with a local firm. IV. QUALITY OF THE STUDIES AND CONSULTANT PERFORMANCE Ksar Chellala Rangeland Sub-project 4.01 According to the Loan Agreement, the consultants' work was to include: (a) during a first phase of 12 months, analysis, updating and supplementing of existing baseline studies on about 850,000 ha in the Ksar Chellala zone, initiation of field experimentation on three cooperatives and a pilot farm, preparation of an integrated development program for three experimental communes in an area totaling 50,000 ha of rainfed land and - 19 - 2,000 ha of irrigated land and preparation of management schemes to make best use of the area's agro-pastoral natural resources; and (b) during a second phase of 24 months, continuation of field experimentation and start of implementation of the integrated development program in the three experimental communes referred to in (a). 4.02 While the studies have not met all the objectives assigned in the contract, the results must be considered useful for developing planning in the rangeland zones. Five major shortcomings can be mentioned: (a) Limited emphasis was given to socio-economic and land tenure aspects. Most of the efforts of the preparation team were concentrated on collecting, analyzing and investigating technical alternatives for agro-pastoral development in the project area. The socio-economic survey which was carried out was too general and did not focus on sociological matters related to the grazing systems prevailing in the project region or on the rangeland organization and management adopted by the individual herders and the tribes on their lands; (b) No significant work to actually carry out trials to test the rangeland improvement techniques, which were proposed within the studies (destocking, weed control, seeding and water retention treatments), was undertaken. In view of the complexity of the problems encountered, such experiments would constitute an essential step before any improvement program can be implemented on a large-scale basis; (c) No detailed implementation plan for full development on a pilot basis, of 50,000 ha of grazing land, as stipulated in the contract with the consultants, was proposed; (d) Studies on irrigation development were insufficient and inadequate to meet the contract specifications. Studies of development of surface irrigation and water harvesting were neglected and those carried out for irrigation development of 2,000 ha were of such quality that their implementation did not start. Also, no feasibility studies of an additional 3-5,000 ha were carried out as required in the contracts; and (e) No implementation of any integrated development program was started in any comm-m-e. 4.03 On the one hand, the consultants are partly responsible for these shortcomings because (a) useful and relevant studies on water, land and vegetation resources in the same area previously carried out by other consultants were available before the start of the project; (b) the 36 month study period was long enough and the number and the qualifications of the consultants allowed by the contract were adequate to easily achieve the objectives of the studies; (c) most consultants did not speak or write French or Arabic; and (d) some of the consultants employed proved to lack practical experience especially in the irrigation and socio-economic fields. On the other hand, the consultants' work was seriously hampered by (a) the very limited number of counterpart local staff (sociologists, economists, - 20 - engineers, and topographic surveyors) compared to the contract's provisions; (b) the absence of guidance and support from the project central executing agency in MARA. Also, the studies specified in a) were not initially made available by MARA to the consultants. Better guidance was provided when responsibility for the sub-project shifted from the Livestock Central Directorate to the National Institute for Sheep Development (IDOVI 1/) at the start of the second phase of the studies; (c) the work undertaken by the local sociologist 2/ was too general and was inadequate to constitute a basis for helping organize the herder population and farmers in the context of a rangeland improvement project; and (d) the lack of collaboration from other departments than MARA, in particular, the Ministry of Hydraulics. Arris Mountain and Batna Sub-Projects 4.04 The consultants' work was to include (a) during a first phase of 12 months, initial baseline surveys and studies, detailed planning and design of selected components, preparation of a general Master Plan for rural development of the mountain daira of Arris; and (b) during a second phase of 24 months, progressive implementation of the mentioned components and the Master Plan. 4.05 The objective and the scope of the studies changed during the project implementation. The main reason was that the phase I studies showed that Arris area has a very low potential for development and that an investme-t program limited to this area could not be economically viable. it was then decided to prepare, during the planned phase II, an integrated master development plan for the whole Province of Batna of which Arris is an administrative district. Not satisfied with the performance of the initial consulting firm, the Government decided to cancel the contract with this firm. The Government then decided to have the National Bureau for Rural Development Studies (BNEDER 3/) responsible for preparing the new defined studies. These studies were sub-contracteA to another consulting firm. 4.06 The various reports prepared by the first consultants were generally of poor quality because of the weakness of the consultant team on one hand and the ineffective supervision by Government agencies on the other hand. On 1/ Institut de Developpement des Ovins 2/ During Negotiations, it was agreed that in view of the importance of the human aspects, the Government would take appropriate measures to carry out the work required relating to these aspects with the full time help of an Algerian sociologist. 3/ Bureau National des Etudes de Developpement Rural - 21 - the consultants' side, the team work was mainly weakened because of unevei technical expertise of the team members aggravated by the health problems ot the team leader and the urban expert. On the MARA side, the team encountered additional difficulties, mainly: lack of technical supervision -from MRA headquarters and weak counterpart field team, and lack of intermanisterial coordination which made access to other governmental agencies nearly impossible for the consultants. 4.07 Studies for rural development of the Batna province are comprehensive and thoughtful for most aspects and represent a good basis for implementing of a rural development project in this province. This was made possible, despite the lack of local counterparts because of (a) the close supervision and support of BNEDER to the consultants' work; (b) the constant effort made by the consultants to enhance the quality of their work taking into account the comments formulated by the Bank and BNEDER; and (c) the interest and the support showed by the local authorities at the final stage of the studies; one of the results of this was a better involvement of other ministries concerned in the preparation of the studies. The most noticeable deficiency of the studies is the quality of proposals for developing irrigation. The technologies and methods proposed for irrigation development are very sophisticated (it has been assumed, for example, that about 95% of the sub-project area which is suitable for irrigation (20,000 ha) would be irrigated through drip or sprinkler method). Most of the irrigation components have been designed without considering the institutional conditions under which they can be effectively implemented (water rights, farmers' organization for O&M, land tenure, etc.) and without considering their possible economic viability (i.e. investments for proposed tubewell irrigation development are very high and exceed US$55,000 per hectare). Agricultural Extension Sub-Project 4.08 The consultants work was to include planning, preparation and testing, during a 3-years period, of an agricultural extension system by testing an experimental program in selected trial zones in the Sidi Bel Abbes province, and by developing specialized kacilities for the training and technical support of extension agents. Four phases were foreseen to include (a) preliminary studies in the selected trial zones, and preparation of a short term-basis extension orientation program for extension trainees; (b) implementation of the orientation program and in-service training for extension agents and deveiopment of recommended practices for dissemination among farmers; (c) preparation of the final design of the formal extension training program and of the preliminary design of a full system of extension support services; and (d) during the last 11 months, implementation of a full-scale extension training program and establishment of the extension support services required. 4.09 These objectives were partially achieved since studies focused only on setting and testing an experimental extension program. The prepared reports, although too long and sometimes wordy, contain proposals that can constitute a fairly good basis for establishing a national agricultural extension system for the public and cooperative sector; the private farm sector was somewhat neglected. However, although a national Institute for Extension was constructed and adequately equipped in the Sidi Bel Abbes area for the purpose of the project, starting any training program was impossible - 22 - since no trainees were provided by MARA. In addition, since the beginning of its implementation, the sub-project lacked a good counterpart team from a qualitative and quantitative viewpoint. The consultants' team consequently worked almost alone. Preparation of the Sidi Bel Abbes Agricultural Development Project 4.10 The preparation of a project for agricultural development in five communes in the Sidi Bel Abbes province that the Bank was expected to finance was done under studies prepared by consultants whose work was judged to be incomplete. Further assistance from the FAO Cooperative Program was necessary to complete this preparation and allow for an appraisal by the Bank. 1/ Contrary to the other project components controlled by MARA, a good counterpart team was established to help project preparation. Agricultural Credit Sub-project 4.11 Based on what was reported by BNA officials, the consultants succeeded in analyzing BNA lending procedures, proposing a set of measures of improving agricultural credit in Algeria and testing, jointly with the extension sub-project team, a pilot credit program in the Sidi Bel Abbes area, with the objective of improving financing of the socialist and private farms. Assistance for Project Coordination 4.12 An individual consultant was hired to advise the project coordinator in various aspects of project implementation. His three year contract was extended for three additional years until project completion. His responsibility was also extended to assisting in the coordination of all Bank-financed projects in the agricultural sector. His candidacy was proposed to the Bank by the Government. He was selected on the basis of his background as an agronomist with some training in economics and statistics and his fairly long experience outside his native country in international development institutions and more particularly in Algeria. In spite of these qualities, the advisor was not able to achieve all the tasks included in his employmenL contract, although he was helpful for those Bank staff who were not familiar with the country to have a better understanding of it. More particularly, he did not succeed in helping establish direct liaison with the various departments and ministries involved with the project, helping resolve administrative and logistical problems occurred to consultants, preparing quarterly progress reports to facilitate work of the Bank supervision missious, and setting up a monitoring and evaluation system adapted to agricultural and rural developments projects as was specified in his terms of reference. During the last two years of the project, his contribution was less operational because he was more distant from field activities under the project. This was particularly the case for the steppe sub-project since its supervision went to IDOVI (para. 5.04). 1/ An appraisal took place in 1980, but no project has started yet. In addition, detailed design necessary for project implementation was undertaken during 1981-82 by BNEDER with foreign consultants with UNDP financing. - 23 - 4.13 The primary reason for the advisor's difficulties in achieving his objectives can perhaps be linked to his total dependency on the various project coordinators and to the MARA's view of him as a Bank staff member. while, at the Bank, he was considered part of MARA (he was selected and recruited by MARA and paid from the loan proceeds) for MARA, he was considered a Bank staff member seconded to MARA to advise on Bank-related matters in agriculture and rural development and was not consequently provided full support in porforming his work. V. GOVERNMENT PERFORMANCE IN PROJECT ORGANIZATION AND MANAGEMENT Pro!ect Coordination 5.01 The project greatly required but never received inter-agency coordination. Project design was such that (a) MARA was responsible for the steppe, mountain and extension sub-projects, and Ministry of Finance through the National Bank of Algeria (BNA) was responsible for the credit sub-project; (b) within MARA three different departments were separately in charge of executing the above-mentioned sub-projects; (c) contribution of other ministries was necessary for the implementation of the studies. Those which were required most were Ministries of Hydraulics, Forestry 1/, Interior, Planning and Finance; and (d) since the sub-project teams carried out their work and were established in the field, collaboration from the provincial and local authorities and from provincial departments of various ministries was also needed. 5.02 The coordination issue was raised during the project appraisal and initial agreement was reached with the Government to establish within the Ministry of the Interior (which was originally designated to be the prime agency for execution of the projert) an interministerial technical commission and a Project Coordinating Unit D)uring loan processing, the issues got somewhat confused and no oention of these entities was made in the Loan documents. The Loan Agreement (L.A.) as well as the President's Report stated only that the Government would appoint a Project Coordinator assisted by an internationally recruited adviser and that it would give him 'all responsibilities and assistance to carry out his task" (L.A. section 3.02). There was no further mention in the L.A. of the coordinator's qualifications and experience, or his basic powers and responsibilities. 5.03 Coordination with the Ministry of the Interior was a key factor before any socio-economic work could be undertaken, especially in the rangeland and mountain areas. Coordination with the technical ministries (Hydraulics, Forestry, Urban, Education) was necessary for carrying out the preliminary studies as well as for evaluating the adequacy of the development proposals formulated in the final studies. Coordination among MARA central departments on one hand and between MARA central and regional services on the other hand was often inadequate. Very few coordination meetings took place partly because the project coordinator officially designated by the 1/ Before Forestry related activities came under the control of MARA; in 1980. - 24 - Government was not at a ranking level high enough to allow him to use his administrative power to initiate meetings involving various departments within and outside MARA. The expatriate advisor for project coordination was also unable to be effective (para. 4.12). Project Organization and Management 5.04 MARA's performance in executing the project was uneven. MARA had serious difficulties during the first five-years of implementation until the project responsibility was effectively transfered by the Government, in mid-1981, to BNEDER for preparing the Batna development studies and to IDOVI for continuing supervision of the rangeland subproject. These two semi-autonomous agencies proved efficient in providing guidance to the field study teams and in providing constructive supervision of their work although they did not succeed in field-ing sufficient qualified local counterpart staff. MARA's central departments were particularly slow in processing with selection and recruitment of the consultants, in providing the local sub-project managers and staff, in initiating participation of other governmental agencies, in helping the consultants and staff to overcome administrative and logistical problems. They often were systematically critical of the consultants' work and did not behave in a constructive way when problems arose with consultants. The consultants were not considered an expensive investment requiring close supervision, constructive guidance, strong support when needed and correct working conditions to obtain from them the highest return. 5.05 Management of the credit subproject by BNA was satisfactory. BNA succeeded in establishing full collaboration between the consultants and the local staff and in providing necessary help to the subproject team during its work. Cooperation with the consultants was so good that BNA extended its contract with them by one year, under BNA's direct financing. However, for unknown reasons, BNA has always refused to provide the Bank with the reports prepared under the projects despite repeated requests from all supervision missions that visited Algeria from the time these reports were completed in mid-1979. VI. BANK PERFORMANCE 6.01 Bank performance was also mixed. The major failing of the Bank consisted in its weak review of the preparation of the project which was expedited as a result of the mutual desire of the Government and the Bank to quickly start cooperation in the agricultural sector. Important features such as consultant recruitment procedures, project detailed description, project coordination, organization and management, and implementation scheduling were insufficiently analyzed during preparation. The Bank was not able to assess MARA's central departments' commitment to the project and ability to supervise the project since Ministry of the Interior was originally designated as having responsibility for project execution. The Bank was informed by the Government that this responsibility had shifted to MARA, only during Loan Negotiations. In addition, no project file with the required background documentation was prepared. The Loan Agreement was therefore the only project working document available to the Algerian officials. It could not represent a good basis for a full understanding of the project objectives, approach, content, organization and management, and impact. The second failing was the shift in - 25 - Bank position regarding the establishment of a multi-ministerial coordinating commission and a project coordination unit. The Bank should probably not have agreed to dropping its request for the creation of these units. Although such entities were considered essential for project success during appraisal, no mention of them was made in the Loan Agreement (para. 5.02). Finally, the Bank should probably have tried to persuade the Government to agree on corrective actions to speed up and improve implementation, despite the fact that the project was often considered a problem project. The Loan Agreement was amended twice to include new project components and the loan was extended . twice without introducing any such corrective actions. A complete mid-term review evaluation of the project would have been useful. 6.02 However, the Bank supervised the project very closely and displayed great flexibility in administering it. As many as nineteen technical supervision missions involving about 58 man-weeks were fielded in addition to many other missions by programs, during which a special focus was made on the problems faced by the project. The staff involved were of senior level encompassing a full range of expertise including agronomists, economists, rural development specialists, engineers, sociologists, etc. Supervision missions were often devoted to providing guidance and orientation for follow-up study work, to clarifying the project objectives and approach and to drawing attention of MARA officials to any constraint opposing project implementation. Comprehensive aide-memoires summarizing the mission's findings and recommendations were prepared, especially when studies started. VII. PROJECT IMPACT AND FOLLOW-UP PROSPECTS 7.01 In spite of the lengthy delays and frustrating problems encountered during its implementation, the project allowed for analyzing the major constraints and designing and, in some cases, testing different approaches to integrated rural development in the rangeland and the mountain zones. It also contributed to setting proposals for addressing the main constraints faced by agricultural extension in Algeria. Although no significant implementation of the proposed approaches was started under the project as foreseen at appraisal, the completed studies c. represent a good basis for any operational project that the Government of Algeria would wish to execute in the areas concerned by the studies. 7.02 While a firm decision has not been made by the Government to execute projects based on the studies carried out under the present technical assistance project, the situation is as follows: (a) as regards the rangeland component, MARA reportedly decided that a new Regional Agricultural Development Office would soon be established under the authority of the recently created National Agency for Range Development (Haut Commissariat au Pastoralisme) in the Ksar Chellala rangeland sub-project area. This Office will continue the few experiments initiated and start implementing an agro-pastoral development project The Algerian counterpart who participated in the studies will remain in Ksar Chellala and be the nucleus of the new Office; - 26 - (b) as regards the mountain component, the Governo- of Batna reportedly decided that implementation of some of the preparatory pilot projects prepared would start in L984. The last Bank supervision mission (June 1983) was informed that MARA was also considering the creation of a new Regional Agricultural Development Office headquartered in Batna to implement these pilot projects and prepare a first phase five-year project. BNEDER was reportedly going to provide, on a contractual basis, technical assistance for the preparation of the remaining detailed studies and for the supervision of the project works; (c) as regards the credit cowponent, BNA and since recently BNDR (Banque Nationale pour le Developpement Rural), have reportedly made the most useful use of the project studies. Cooperation between these banks and the consultants has reportedly continued since the original contract was terminated under the Bank loan. As a result of the project work, progress has reportedly been made in three directions: (i) the diagnosis of agricultural credit operations has permitted the establishment of an appropriate methodology to improve and expand them to small-scale private farmers; (ii) well-adapted financing procedures will be extended to all agricultural credit operations; and (iii) a data processing system will be generalized to all Algerian agricultural credit Bank operations; and (d) as regards the extension component, no follow-up was made because the counterpart team was almost non-existant. The extension training facilities which were developed and equipped by MARA in Sidi Bel Abbes during the project have been transformed into an Agriculture Education School and the National Extension Institute (INVA), which tas established by 'he Government at the start of the project, no Longer exists. However, the methodologies identified under the project apparently helped design the approaches adopted by a UNDP financed project for establishing a new extension system oriented towards the private farmers. 7.03 The impact of the project on enhancing local capabilities was particularly positive for BNA and BNEDER staff in charge of the credit and mountain components. Some technicians who participated in the range subproject received additional education and training in range management in Australia. This will indeed be of practical use if the trained staff are involved in the implementation of any new project. On the other hand, no staff was trained in a significant manner under the extension subproject, although this was the only project component under which training was assumed to represent the major part. - 27 - Annex ALGERIA TECHNICAL ASSISTANCE PROJECT - RURAL DEVELOPMENT (Loan 1159-AL) PROJECT COMPLETION REPORT Actual Schedule of Disbursements 1/ IBRD Fiscal Year Actual and Semester US$million FY76 September 4, 1975 (Loan Approval Date) December 31, 1975 0.0 June 30, 1976 0.0 FY77 December 31, 1976 0.0 June 30, 1977 0.0 FY78 December 31, 1977 0.0 June 30, 1978 0.8 FY79 December 31, 1978 1.1 June 30, 1979 1.6 FY80 December 31, 1979 (Initial Closing Date) 2.5 June 30, 1980 3.8 FY81 December 31, 1980 4.1 June 30, 1981 4.5 FY82 December 31, 1981 4.5 June 20, 1982 5.2 FY83 December 31, 1982 5.7 June 30, 1983 6.2 FY84 December 31, 1983 6.4 1/ No schedule of Disbursements was projected at appraisal. 2528E IBRD 19046 (PPA) ALG ERS heh - Ulr coUrEORII Air DAIRASCINfAROS en El Asnom O0e RhiK f- z OUi be ~DieliaD i 0 IOoab R A . ATn s,f,a A L G E R l A TECHNICAL ASSISTANCE PROJECT (RURAL DEVELOPMENT) .., e PROJECT LOCATION , , INTEGRATnD STEMP aEVEoPMENT mSUrOJC MILES INTEGRATED ~IKNTAIMoitom w§EOPET U-snonECT 0 3 0 CETR7A LOsTG C 0N°E" GR"I"," IVP'''Im'" "lm'p'"o''''. KLMPES SÅCOR AICULTURAL CREDiT STUD¥ GHOUPN WILAVA ØORIES = - DAIRA SOUNDARIIS fwf ww idt ......COMMUNE ,OUNDA,",,L ffmd@ 6~t wg m STANDARD GAUGE! NAILWAYg &mi r4 ~ ~al P-ham-d NARROW GAUGE NAILWAVS ~~sift bm~ Wr~øsa U-a-m AIN NATIGANAL KOADSc a r øn ,mf MAIN PURT3 "v~gg fA~ cm INTE RNATIONAL AIRPORn3 xW~ ri& M a 4 SICONDAN't AmnPORTs ~ ~|snT acry&~~ ø ams =INTERNATIONAL EGUNDARIEJ1BM JUNE 1985