Peru - Puno Rural Development Project

-~~ ~ ~~~ vI ' ( - )y -~ -.C : [kxantntof TheWorldBank FOR OFCIAL USE ONLY Repat No. 8802 PROJECT COMPLETION REPORT PERU ?UNO RURAL DEVELOPMENT PROJECT (LOAN 1812-#E) - - JUNE -9, 1990 Agriculture Operations Wtv1aLou Country Department IeVnl fic Latin-American and the CaribbeanReinlOfc This document has a restricte dsvrhnln and may he sed by P r'leiiets OOlY the erfotmanc of their officialdutle& Its to"tn~ may not othewise be discosed without %WO.SlsRnk auibiririaftloo  2'~~ $ - - - .- Currency,Unitt I1000 sole's I- Inti as of 01101186 At Appraisal US$1 220 'At Coiuletion: US$1 Il. 16.84 - MIGLs An mSUR M4etric 'System TUEVAT )OS AND ACROITh ARE Agr, Reform Enteprises (Empre-sas de Reforma Akraria)' AP : Peruvian Agricultural Bank (Banco Agrario del Peru) CORPUNO h Puno Development Corporation - ~~(Corporacion de Desarrollo de Puno) -DGASI i GeneralI Direct.ratei-or Water, Soil and&lrrigation (Direccion General de Aguas, Suelos e -Irrigaciones) ERR t Economic Rate of-Return FAOICP : Food and Agriculture Organization/Cooperative Program GOP : GoverrmettR of Per - O&-. ' Operation and Maintenance (Operacion y ManteniPento) *CORDEPUNO s Puno Regional Development Organization (Organismo Regional de Desarrollo de Puno) PCR Project Completion Report PU- : Project Unit j'T a.is  - -j ~~- -2u -F01 OMFCIA6L USE ONLY THE WORtLD BANK Washftton. O.C 20433 USA. - ~ ~ ~~ ~ ~~ ~ ~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ -.-!.i Ok n1 Diuctargw Opartia Af imatianAM June 29. 1990 MEMORMANRO! TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Peru Piano Rural Development Project (Loan 1812-PE) Attached, for information, is a copy of a report entitled 'project -- . ~Completion Report on Peru- Puano RLural Development Pr_qjIct (Loan 18i2-PE) * prepared by the Latin America and the Caribbean Regional Office. No audit of this project has been made by the operations Evaluation Department at this time. Attacment :~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ) Thibdocument hasaesit Copisutibutiona amaybeused byt!epientsonlyin epeformanc of the oisial 4uties. Its coent may rt othewie be dite without Wod DEanionk art -hls time. ~~~~~~~~~~~~~~~~~~~ , ;~~~~~~  FOR OMCIUL USE ONLY PROJECT ChHP&ETIOI REPORT PUg PMO AL CSOT W (LOAN 1812-PB) Table of Contents Page No. Preface ..............i Basic Data Sheet ... ........... ... .......... Evaluatlon Summary ...*................** . 0..*...... v I. INTRODUCTION ........................... ............. 1 Project Area .............. ............... II. PROJECT FORMULATION . **....... . ....... 2 A. Identification and Preparation ................... 2 . Appraisal and Negotiations ............... . .o ....... 2 C. Project Objectives ......* ..................... 2 D. Project Description .. ..... ... o ................. ...... 2 E. Project Costs and Financing .. o........ 3 I_I. PROJECT IHPLDENTATION ... ..o........................ 3 A. Project Effectiveness and Start-up . .................. 3 B. Project Implementatioj .. ............ ............ 4 - C. Changes during Implementation .................... 7 D. Disbursements .... ........ .. 8 E. Procurement . ..................8........ P. Compliancewith Loan Covenants .............. ....8..... IV. PROJECT IMPACT ..................... . 8 A. Physical Development ............. ......... .. . 8 B. Agricultural Impact . ......... .. . . ......... . ...... 8 C. Economic Impact ..... *.................... o............ 12 D. Social and Environmental Impact ......... 12 V. INSTITUTIONAL PERORMANCE ................ ........ ...... 13 A. Institutional Impact ................................. 13 B. Project Coordination .................... 13 C. Consultants . ........ .... . ............... 14 D. Agricultural Extension ................. ............ 14 E. Irrigation Operation, Maintenance and Water Charges . . . ... . .......14 VI. BANK PERFORMANCE ..................... 14 VII. LESSONS .EA1.NED .... ....... .. 1S i 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 WorW Bank authorization.  Table of-Contents (Cont'd) Pane No. TABLES IN TEXT Table 4.1 - Appraisal Targets and Actuals ........ .... 9 -Table 4.2 - Cropping Patterns and Areas ............... . 10 Table 4.3 - Results Obtained in Areas Under Extension .............................. 11 Table 5.1 - Distribution of Project Unit Staff at Completion of the Project .................... .13 ANNEX I - -= Table 1t Summary Cost Table ................... . ......... 17 Table 2: Withdrawal of the Proceeds of the Loan ......... 18 Table 3: Agricultural Extension Activities ............. 19 Table 4: Research Component Targets .... ................ 20 mAp - IBRD 14684  PROJECT COtPLETION REPORT PERU PUNO RURAL DEVELOPMENT PROJECT (LOAN 1812-PE) PREFACE 1. This is the Project Completion Report (PCR) for the Puno Rural Development Project in Peru, for which Loan No. 1812-PE in the amount of US$15.0 million was approved on March 18, 1980. The loan was closed on June 30, 1987. It was fully disbursed and the last disbursement was on June 11, 1987. 2. The PCR was prepared by the Agriculture Operations Division of the Latin America and the Caribbean Regional Office and is based, inter alia, on the Draft Completion Report prepared by the Borrower, progress reports of the Project Unit (PU), the Staff Appraisal Report, the Loan, Guarantee, and Project Agreements, supervision reports, correspondence between the Bank and the Borrower, and internal Bank memoranda. No completion mission travel was undertaken to the project area because of security concerns.i 3. This PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower on March 1, 1990, for comments by April 19, 1990, but none were received.  * .'2 - ' I . _ ~~~~~~hil -82- BASIC DATASHE !EY P OEC DATA Aepual.l Actual or Actuial en of Le*bloat* &_tIminted Actual Asmaisal tstimate Total Project Cost (LUS milI Ion) 27.8 21.4 70 Loan Amount (US11 million) 16.0 14.6 go Date of Board Approval 09/16/80 Date of Eff octi v*enou 08/01/60 07/09/01 Date Physical Soeoponents Comp leted 12/81/84. 96/80/0? Proportton Thep Completod (W9) 1in 90 90 Clo I **no Date 0./80/80 Economic Rote of Return (3) 27X n.e. Number of Direct B.neflciaries (familI I)9 17,08 1916 0 UJELA LME E TIWAT AMD ACTUAL OSISUIl faL_1 FY8 8 FYMS FY 05 fY86 FY87 - -------~~~~~~~~~~~-(US$ =IlII ons) Appraisal Estimate 1.78 5.56 90.5 13224 15.50 Actual 0.99 8.61 5.90 0.52 11.87 14.40 Actual I s percent of-Estimate (M 18.60 87.0f 45.00 57.00 70.60 06.500 Principal Repaid to IOR as of 00/30/80: US22.08 mlII on Dote of Final Disbursemnt June 11, 1987 * I~  CR"T COfEnA REMST . .asnoNeof weeks Spe.lizaion _ypeofm Dat. Persone to field ire RtAd tttoo Ti4 Problm (me.4yr.) ("-hr)~~~~~~~.bf Identif ioa1n 2/71 - .-8 bf Pr.paraten -/rs, | Ihij 2. , Post- ia.r&s9T 111 ,_ _ _ Suourvileon I3 b V SerioTn S d *.Z 2 WT -2 _ Superv sion . S8 .36 a,lW -S n. n . a 2 2 T.-- Superv aion: - d1L 2 2 ,T. , Supoervison 10SM 1 2 . IF__ _I bu NfV20boU 17, 248b .8 ^ , Suoorvision 8aw,}B Suevsion 4 D8 .C 2 2 _ SuevlSion 16 -- llt :061, actFJ $UOr) on 12 8/06 27 33 i- c .., ,zt-. _ OTHER PROJECT DATA Nat of Curroncy t bbr.viatbon): lOOO Solos (Si.) u Intl (I).) as of 8101J)t88 Curroncy Exc%ange Rate: Aooraisal Year Average''L:s 8:22 nterven n? YearAvrse A a Last Year Averae L US,1.w -=- If. 16.84 ;l F~~~ol lown ..,,,c.. None a a agriculturalist; b = economist; c a irrigation engineer; d2 engineer; o a (civil otineer); f socloeconomist a = oducation speclalist; h = health speclailat; i a Iivvottock specialiat; and j a nutrition speclalsit. 1 = problem-freeor minor problems; 2 2 moderate problems; 3 u major problem.; 4 a major problems, objectives will not be met. i I _ improving; 2 = stAt;ioary; and 3 a deteriolatiag. F 2 financial; 4 = managerial; t z technical. * .  PERU asN0 RtURL DIVELOPUENT PROJECT fLOAM 1S12-PE) PRWEC:T COWLEVtIN REPRty STAFF DEIT FY75 FY76 P77 FTf FY79 FYM6 FYM1 FM82 FTP3 FY84 FY8S FMBS FPY8 FIBS TOTAL Preappralsl 9.9 0.8 28.6 36 17.6 77.9 Appraisal 81.6 86.5 87.0 Negotiation . S.9 5.0 _ - iperrstaon 8.9 24.4 16.8 22.7 8.9 6.1 19.1 9.4 0.4 112.2 Gm6er 0.9 S.2 0.2 1.9 6.a 0.4 G.ZV 9.1 Total '0. 4.6 23.6 35 50 49.6 24.4 18.6 24.8 10.2 6.S 194. 9.4, 0.4 271.2 (1  PROJECT COIPLETION REPOT.t P . PVWO RURAL DEVELOPHENT PROJECT (LOAN 1812-PE), Evaluation numaryX Objectives 1. The Puno Rural Development Project was designed as a first step in the Government of Peru's (GOP) strategy of poverty alleviation in the An- dean Highlands (Sierra), one of the most densely populated and most impove- rished regions of the country. 2. The objective of this project was to increase the income of approximately 17,000 low-income rural families and to improve their quality of life. This objective was to be attained by the provision of irrigation, agricultural credit, afforestation, crop and livestock estension and applied research, rural roads, health posts, potable water systems and vocational training. Studies for a much larger second phase were also included. 3. The project, a pilot for much lweger efforts planned in the future, was slated to cost US$27.3 million, 'f which the loan provided US$15 million (55 percent). The two most cosuiy components were expected to be credit 4US$8 miUlion or 37 percent of allocated costs) and irrigation (US$3-9 million or 18 percent of allocated costs). As a result of disa- greements over interest rate policy, the Borrower r-'dertook to finance all of the credit component. Zmilementation 4. While loan effectiveness took place more than 16 months after approval by the Bank, in retrospect, the strict effectiveness conditions may have been essential to the successful start-up of the project. There- fore, at effectiveness, the Project Unit was set up and operatlng with a bank account, fully staffed and its consultants recruited; the subsidiary agreement with the Agricultural Bank was signed; and the various coordi- nating committees and organlziations established. 5. During implementation, the project suffered from the general governmental retrenchment in Perw so that local funds were often delayed or short. It suffered from droughts and floods. The coordinating bodies did not coordinate much, so that the project sometimes experienced competition from NGOs giving away what it was selling. And, with so many components, coordination within the project was difficult. Project Unit leaders changed and staff morale was sometimes low.- Nevertheless, with a strong and dedicated leader for five years, the project made great progress. 6. The project's two largest components did not work as planned. There was little demand for credit, even at heavily subsidized rates. The credit the Agricultural Bank extended was only 17 percent of expectations. And irrigation results were far from expectations, although the projected  - vi - amount of money was spent. There had been no engineering or agronomic feasibility studies for the irrigation sub-projects agreed to at appraisal. The new sib-project, Buena Vista, proved to be uneconomic and was droppe'. Activities were re-oriented to rehabilitating irrigation infrastructure. Nevertheless, farmers showed little interest in irrigation, certainly in paying water charges for it. (The studies covenant on wate, charges was not fulfilled.)