Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8580 PROJECT COMPLETION REPORT NEPAL SECOND RURAL DEVELOPMENT PROJECT MAHAKALI HILLS (CREDIT 939-NEP) APRIL 30, 1990 Agriculture Operations Division Country Department I Asia Regional Office Thbis 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 BDank authoiztDk PRINCIPAL ABBREVIATIONS AND ACRONYMS USED AA - Agricultural Assistant(s) ADBN - Agricultural Development Bank of Nepal AIC - Agricultural Inputs Corporation APROSC - Agricultural Projects Service Centre of Nepal CCC - Central Coordinating Committee CDO - Chief District Officer DADO - District Agricultural Development Officer DAP - District Administration Plan DCVI - Department of Cottage and Village Industries DDC - Dairy Development Corporation DIHM - Department of Irrigation Hydrology and Meterology. MFAI DOA - Department of Agriculture DTO - District Technical Office DTSU - District Technical Support Unit HMG - His Majesty's Government IRDP - Integrated Rural Development Project Jr. AHW - Junior Assistant Health Worker(s) JT - Junior Technician(s) JTA - Junior Technical Assistant(s) LDD - Local Development Department MEU - Monitoring and Evaluation Unit MFAI - Ministry of Food, Agriculture and Irrigation MOE - Ministry of Education MOH - Ministry of Health MPLD - Ministry of Panchayat and Local Development PC - Project Coordinator PDO - Panchayat Development Officer RD I - Rural Development I Project RD II - Rural Development II Project SOE - Statement of Expediture VAA - Village Agricultural Assistant(s) ZCC - Zonal Coordinating Committee MEASURES 1 Rupani equals one-twentieth of a hectare Nepalese Fiscal Year July 15 - July 14 Name of Currency: Nepalese Rupee (NR) FOR OMCIAL USE ONLY THE WORLD BANK Washington, DC 20433 U.S.A. Oface CA DstwcIEw4M Op.atms Evahauian April 30, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJE.CT: Project Completion Report on NEPAL Second Rural Development Project Mahakali Hills (Credit 939-NEP) Attached. for information, is a copy of a report entitled "Project Completion Report on Nepal - Second Rural Development Project Mahakali Hills" prepared by the Asia Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. Attachment 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. FOR OMCIAL USE ONLY PROJECT COMPLETION REPORT NEPAL SECOND RURAL DEVELOPMENT PROJECT MAHAKALI HIL'S (CREDIT 939-NEP) Table of Contents Page No. PREFACE ..................................................................i BASIC DATA SHEET ..........................................................ii EVALUATION SUMMARY ........................................................ iv I. INTRODUCTION ........................................................... 1 II. PROJECT IDENTIFICATION, PREPARATION AND APPRAISAL. 2 A. Project Origin.. 2 B. Project Preparation and Appraisal .. 2 C. Project Description .. 2 III. IMPLEMENTATION . .................................................... 3 A. Negotiations and Effectiveness . . 3 B. Overall Implementation Experience . . 3 C. Implementation of Individual Components . . 4 - Agricultural Development . .. ... .. 4 - Establishment of Service Centers and Strengthening of Agricultural Extension Service ...... . . 4 - Livestock Development ....... ..... ... 9 - Irrigation Development ............. 10 - Soil Conservation/Erosion Control .... ...... . 12 - Health Services .. 12 - Education ...... 12 - Village Water Supplies . ......................... .. . 13 - Building Construction ..... 13 - Development of Trails and Bridges . . 13 - Postal Services ....... ................................. 14 - Cottage Industry .... .................................... 15 - Technical Assistance .... ................................... 15 D. Project Costs .... ...... ... .............................. 17 E. Financing and Disbursement ................................... 17 F. Procurement . .. ...... ..................... 18 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. IV. INSTITUTIONAL PERFORMANCE ................. ..... ................ . 18 - Implementing Agencies and Coordination ...................... l8 - Monitoring and Evaluation ................. ........ . ....... . 18 _ Reporting and Accounting ......................... . ..... .21 _ Compliance with Covenants ............................ . .. . *.21 V. PROJECT IDGACT ..................................... 22 A. Intended Impact ........... ... ..................... 22 B. Actual Impact ............................................ 22 - Production Impact ........ .............................. 22 - Horticulture Production ...... . ...................... .22 - Social Impact . .................. .................. 25 VI. ECONOMIC RE-EVALUATION .. .................................. .... 26 VII. IDA PERFORMANCE .... ... ................................. 27 VII. CONCLUSIONS AND LESSONS LEARNED ................................... 27 VIII. CONCLUSIONS AND LESSONS LEARNED ................................. 27 - Lessons Learned ................................................. 29 LOCATION MAP TABLES 1. Implementation Schedule of Physical Components. 2. S-wary of Physical Achievements. 3. Physical Achievements of the Agricultural Inputs Corporation (AIC). 4. Horticulture: Saplings Distributed by Year. 5. Comparison Between Appraisal Cost Estimates and Actual Costs. 6. Project Expenditures. 7. Proceeds of Credit. 8. Performance of Agricultural and Livestock Training Programme. 9. Livestock Treatment and Distribution of Improved Stock by Year. 10. Livestock Treatment and Distribution of Improved Stock by Year. 11. Statu3 of Compliance with Legal Covenants. 12. Cropping Pattern, Cropped Area. 13. Crop Yields. 14. Crop Production. 15. Crop Inputs Per Hectare. 16. Farm-Gate Price of Inputs and Outputs. 17. Food Balance in the Project Areas. ANNEX 1 - Economic Re-Evaluation. MAP: IBRD 14190 PROJECT COMPLETION REPORT NEPAL SECOND RURAL DEVELOPMENT PROJECT MAHAKALI RILLS (CREDIT 939-NEP) PREFACE This Project Completion Report (PCR) reviews implementation of the Second Rural Development Project (Mahakali Hills Integrated Rural Devel- opment Project) in Nepal for which Credit 939-NEP in the amount of US$11 million was approved on June 25, 1979. The Credit was closed on July 15, 1988, nearly three and a half years behind schedule, and the undisbursed balance of about US$4.63 million was cancelled. The PCR was prepared by the FAO/World Bank Cooperative Program on the basis of a review of the Staff Appraisal Report. the Credit Agreement, supervision reports, project files, progress reports prepared by project management and discussions with officials of His Majesty's Governament. This PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower on February 8, 1990, for comments by March 20, 1990, but none were received. - ii - PROJECT COMPLETION REPORT NEPAL SECOND RURAL DEVELOPMENT PROJECT MAIAXALI HILLS (CREDIT 939-NEP) BASIC DATA SHEET KEY PROJECT DATA Appraisal Actual 2 of Estimates Actual Appraisal Estimates Project Cost (USS million) 13.45 9.32 69 Credit Amount (US$ million) 11.00 6.37 58 Date Physcial Components completed Dec. 1984 July 1988 Econoxic Rate of Return - "hole Project 21S n.a (b) - Agric. Development Component (a) 50S 462 CUMULATIVE DISBURSEMENT IDA Fiscal Year FY80 FY81 FY82 FY83 FY84 FY85 FY86 FY87 FY88 FY89 Appraisal Estimate (US$ million) 0.02 0.56 2.24 4.54 7.24 9.69 11.00 Actual (US$ million) - 0.04 0.11 0.57 1.52 2.8' 4.22 4.54 5.32 6.37 Actual as Z of Est. - 7 5 13 21 29 38 41 48 58 Date of Final Disbursement January 27, 1989 PROJECT DATES Orizinal Actual Negotiations 05113/79 Board Approval 06/25/79 Credit Signing 09/0979 Credit Effectiveness 11/07/79 01115/80 Credit Closing 02/28/85 07115188 STAFF INPUT (Staff weeks) Pre Task FY77 FY77 FY78 FY79 FY80 FY81 FY82 PY83 FY84 FY85 FY86 FY87 FY88 FY89 TOTAL Preappraisal 3.2 42.2 6.5 51.8 Appraisal 57.1 57.1 Negotiations 3.7 3.7 Loan Proc. .5 1.2 .5 4.0 6.3 Sector Work .6 .6 Supervision 3.1 3.1 7.1 9.7 3.8 33.5 7.7 4.3 1.9 .4 74.5 PCR .7 .2 2.8 3.7 Proj. Admi. .1 .3 .0 .1 .1 .4 .4 1.5 Total 3.6 1.2 42.7 71.4 3.4 3.1 7.2 10.5 3.8 33.5 8.7 5.0 1.9 3.2 199.2 (a) Representing 102 of project costs. (b) But considered to be lower than SAR estimate. - iii - OTHER DATA Name of Currency t Nepalese Rupee (NMs) Exchange Rates I Appraisal Year Average (FY78/79) s 12.00 Intervening Years Average (FY80181 - 87/88 s 17.29 Completion Year Average (FY87/88 s 22.10 MISSION DATA Date No. of Man Days Specifi- Perf. Type of Mo/Yr. Persons iA Field cation 1/ Status 2/ Trend 31 Problems 4/ Preparation 7?/78 (prepared by APROSC with FAO/CP assistance under RDI) Appraisal 11/12/78 5 - _ _ _ Supervision I 02/80 3 48 E, A, S 1/ 2 2/ - H 41 Supervision II 11/12/80 1 4 E ......... not given ....... . Supervision III 03/81 1 (no field visit) A 2 2 3/ F, M Supervision IV 04/82 1 5 E 2 3 F. M Supervision V 07/82 1 22 E 2 3 F, M Supervision VT 02/83 1 15 not given 2 1 F Supervision VII 03/84 1 14 E 3 2 F, M Supervision VIII 02/85 ........ no report ...... 3 n.a Supervision IX 04/86 1 8 E 3 n.a Supervision X 10/86 1 10 E 3 n.a Supervision XI 9/87 3 24 E, A, C 2 n.a Supervision XII 2/88 2 16 A, C 1 n.a PCR xIII 3-4/89 3 - E, A, C n.a n.a Follow-Up Projects Rural Development III (Cr. 1727-NEP' 1/ A - Agriculturist; E - Economist; C - Civil Engineer; S - Sociologist. _/ 1 - problem free/minor problems; 2 - moderate problems; 3 - major problems. 3/ 1 - improving; 2 - stationary; 3 = deteriorating. 4/ F - finanzial; M = managerial. 5/ New format No. 590 introduced does not include these data. - iv - PROJECT COMPLETION REPORT NEPAL SECOND RURAL DEVELOPMENT PROJECT MAHAXALI HILLS (CREDIT 939-NEP) EVALUATION SUMMARY Introduction 1. This is the second IDA-assisted rural devplopment project in Nepal, commencing only three and one half years after the start of the Rasuwa-Nuwakot Rural Development Project (RD I). In line with the Government's policy of balanced regional development, the project was located in one of the most remote parts of Nepal (the far Western Region) which had not seen any significant development activity. Obiectives 2. Unrealistically high expectations of the project, as contained in the preparation report, were scaled down substantially by the appraisal mission. The project, to be implemented over a five-year period, was to assist development of the threA hill districts of the Mahakali Development Region. The project's main focus was to raise agricultural production through improvement of crop and livestock support services, and small and medium-scale irrigation schemes. In addition, the area's economic and social infrastructure was to be developed through the construction of facilities for education, health care, transportation, water supply, community and government administration services. Implementation Experience 3. Project implementation proved to be much more difficult than expectel because of the administrative, finarcia' and managerial problems related to the remote location of the project area. Project start up was much slower than normal, implementation of physical targets remained far below appraisal estimates with the exception of agricultural investments. The main problems encountered were the excessive delays in the release of budget funds, staffing constraints due to high turn over and shortage of qualified individuals, and insufficient quality control. During most of the implementation period, delays in construction activities jeopardized the success of the project's objectives, but in the last two years, following an extension of the Credit closing date, substantial progress was made. Results 4. On balance, the project achieved its main objective of increasing agricultural production as well as that of improving the level of social - v - welfare of the rural population, although these remain well below appraisal estimates. Substantial production increases are reported in a range of crops as well as in livestock. Social welfare improved significantly as a result of improved communications, water supply, health and education facilities in the rural hill areas. Sustainability 5. The outlook for sustainability of project activities is good as many programs have already been supported under HHG's regular budget during the last three years. The only major problem appears to be with building maintenance, especially in the outlying areas. Findings 6. The main lessons that can be derived from the project's experience are: (a) because they require more time for implementation, rural development projects in remote (hill) areas should be designed either for a longer than standard implementation period, or for two phases with the first phase focusing on infrastructure development and training and the second phase on production-oriented services; (b) the temptation should be resisted to include too many components dispersed over a wide range of sectors, and project resources should be concentrated in relatively few specific priority areas; (c) service centers, bringing togecher in a single location the providers of all important farmer support services, can be very successful provided that they are strategically sited and provide adequate living and working conditions; (d) the per hectare cost of irrigation schemes carried out under the responsibility of the Department of Irrigation, Hydrology and Meteorology has been excessive and far above that of minor hill terrace irrigation schemes, which suggests the need for more rigorous scrutiny at the identification stage followed by adequate feasibility studies paying due attention to cost-effective and appropriate technology; and (e) establishment of water user groups should precede the engineering phase of irrigation schemes, and start up of construction work should be made contingent on the adoption of a system under which beneficiaries assume responsibility for full operation and maintenance expenditures. 7. All of these lessons have been or are being incorporated into - vi - IDA's operations in Nepal. Rural Development III Project (Cr. 1727-NEP) has a longer-than-nonmal implementation period and includes far fewer components than the earlier rural development projects. Agricultural service centers have become a standard feature of all investment projects in the agricultural sector. Under the sector-program approach to irrigation development, supported by IDA and other donors, HMGN has streamlined the selection and design criteria for small and medium schemes for which the demand must come from the potential beneficiaries. All of these schemes are to be wholly managed by water user groups who will also bear a proportion of the capital cost. PROJECT COHPLETION REPORT NEPAL SECOND RURAL DEVELOPMENT PROJECT MAHAKALI HILLS (CREDIT 939-NEP) PROJECT COMPLETION REPORT I. INTRODUCTION 1.1 With 93% of the labour force engaged in agriculture, the economy of Nepal is almost completely agrarian. Some 10 million people out of a national population of 17.6 million live in the hills and mountains of the deeply dissected Himalayan Range. Due to a restrictive resource base and limited development activities in the sixties and early seventies, the agricultural production in the hills had not kept pace with the rapid population growth, leading to migration to food surplus areas, overgrazing and deforestation, triggering a vicit-is circle of worsening environmental conditions. 1.2 The Fifth Five-Year Plan (1975-80) marked the beginning of an era of increased resource allocations to the agricultural sector and emphasis on Integrated Rural Development Projects (IRDP). Consequently, during the last two plan periods, 27% and 30% respectively, of total plan allocations were made to the agricultural sector and out of eleven agriculture and watershed oriented projects, seven IRDPs were implemented. IDA assistance to the IRDP sub-sector began with support of the Rasuwa-Nuwakot Rural Development Project (RD I), through Credit 617-NEP which became effective in July 1976. This project contained provision for preparation of a second rural development project, which was assigned to the Agricultural Projects Service Centre of Nepal (APROSC), with assistance from the FAO/WB Cooperative Programri,e. On this basis, the second IDA-assisted Rural Development Project (RD II) Mahakali Hills, Credit J39-NEP, became effective in January 1980. 1.3 An FAO/CP mission visited the project in Se,tember 1987 for supervison and preparation of the project completion report (PCR). However, when, upon the mission's recommendation, the project was extended for annther vear, comnletion of the PCR was correspondingly suspended until after project closure in December 1988. Completion was resumed by a short FAO/CP mission in March 1989, after the introduction of the new PCR guidelines. However, as the bulk of the report had already been drafted it was decided to retain the old PCR format. The PCR is also based on a review of the Staff Appraisal Report (SAR No. 2401-NEP); the Development Credit Agreement; World Bank supervision mission reports; project files and progress reports prepared by the project. - 2 - II. PROJECT IDENTIFICATION. PREPARATION AND APPRAISAL Proiect Origin 2.1 In 1978/79 HMGN through a series of administrative and organizational changes had enhanced the role of local government (under the panchayat system) in formulation of village and district development projects, and in planning technical, financial and managerial requirements for development activities. At the time it was recognized that IRDPs. if designed in line with RD I (which initially was performing very well), would be suitable vehicles for implementing HMGN's local development policy. Thus, the second IDA-assisted project to a large extent became a replica of RD I. 2.2 The Mahakali Hills in the Far-Western Development Region were selected as a potential project area by an FAO/CP mission in March 1977 on the rationale that this was the only hill area in Nepal which had road access and where no major development project was under consideration. Furthermore, the location was fully in line with HMGN policy of balanced regional development as the region until then had received very little attention. Project Preparation and Appraisal 2.3 ile project was prepared by APROSC with the assistance of the FAO/CP who also provided the TOR for the feasibility studies. Preparation began in early 1978 and was concluded in November 1978 with the report, "A Feasibility Study of Integrated Rural Development Project for Mahakali Hills". This formed the basis for HMGN's request for IDA assistance and for the subsequent IDA mission which visited Nepal in November/December 1978, to appraise the project. The mission endorsed the project proposals, which were largely based on experience gained during RD I. in principle. but made sub- stantial reductions in scale of some operations. Cuts were made in particular in agricultural, irrigation ard livestock development, and to cottage industries, trails and bridges, and health services. The missioni also excluded several schemes that were to be developed by other agencies or projects, such as water supplies and education programmes (UNICEF), and forestry development (IDA). Furthermore, lack of technical data led to the exclusion of the roads component and some micro-hydroelectric schemes. 2.4 Although, in retrospect, these reductions were correct. too many project components were retained under the project to make it manageable with the given constraints. By the time of appraisal. HMGN had started to introduce major changes in the structure of rural development management. with focus on additional coordinating machinery and expansion of district and village level planning authority. However, these chaniges came too late to be fully taken into account at appraisal. Project Description 2.5 The five-year project was to help developing the three hill districts of Dandeldhura, Baitadi and Darchula in which 53.300 families resided. The principal aim of the project was to raise agricultural production to levels whereby fariner families could subsist. The project comprised: - 3 - a) Improvements to agricultural production tnrough provision of agricultural extension, farmer and staff training, wider use of seed of improved varieties, and adoption of better husbandry practices. Availability of inputs would be increased through establishment of cooperatives, provision of small warehouses and credit. Services to farmers would be centred at a number of administrative service centres located throughout the project area. b) Livestock develooment through improved animal health services and upgrading of the genetic quality of farm animals. c) Development and improvement of hill and river terrace irrigation. d) Establishment of anti-erosion measures to protect roads and other infra- structure either developed or improved under the project. e) Improved health care through construction of district hospitals and health posts and provision of staff, equipment, drugs and medicines. f) Upgrading of facilities at lower and upper secondary schools, construction of student hostel accommodation and provision of teaching aids and staff. g) Development of oanchavat facilities through construction of community and recreation centres, and village water supplies, improvement of shallow wells, and provision of training. h) Improvement of communications through upgrading of existing trails and construction of footbridges. i) Development and improvement of gostal services and cottage industries. j) Construction of buildings and housing and provision of staff. equipment and vehicles necessary for project implementation. III. IMPLEMENTATICN A. Negotiations and Effectiveness 3.1 Negotiations took place with slight delays in May 1979. The project was approved by IDA in June 1979 and the Development Credit Agreement was signed in August 1979. The credit would become effective when HMGN had provided the required funds to AIC, ADBN and DDC for implementing project components, established the Zonal Coordinating Committee (ZCC). appointed the Project Coordinator and made arrangements for the elDployinent of technical experts. The above conditions were met in a timely manner except for some delays in signing the UNDP's technical assistance programme and the credit became effective in January 1980. - 4 - B. Overall Imglementation Experience 3.2 Despite the prompt start-up, the implementation of the project ran into several difficulties and was seriously delayed resulting in rather low achievements in most project activities except livestock development, horti- culture development, small irrigation schemes, erosion control and the provision of credits. After three extensions, implementation of the project was completed in July 1988, 3.5 years later than anticipated at appraisal. Excessive delays in the release of funds and in the recruitment of staff together with a serious shortage of trained staff and a high turn-over of staff were major problems encountered in the implementation of all project components. The construction programme severely suffered from inadequate design and supervision, and shortage of experienced contractors and construction materials. Delays in the construction of buildings, the most crucial infrastructure in support of the start-up of most project development activities, adversely affected their overall performance. "Major" irrigation was the least successful component, with only 37% of the SAR target achieved, at a cost corresponding to 16% of total project costs (SAR estimate = 12%). Inadequate farmer training and extension services due to shortage of funds slowed down farmer acceptance which con- siderably delayed and reduced project benefits. Villager acceptance of health and education services was satisfactory but additional support is required. The cottage industry programme achieved little of its targets and objectives mainly due to improper and rigid training. Although the social infrastructure development/improvement such as water supplies, trails and bridges, was found beneficial to villagers, poor design, improper siting and lack of participation from villagers resulted in low utilization and in rejecting responsibilities for maintenance. Construction performance greatly improved during the last project year, when numerous ongoing works were completed and yet a substantial number of new bridges were implemented (paras 3.47 and 3.48). 3.3 A comparison of SAR and actual implementation schedule and, achievements is given in Tables 1 and 2. C. Imnlementation of Individual Comgonents Agricultural Development 3.4 The main areas addressed by the project to increase crop production were: a) establishment of agricultural service centres and strengthening of agricultural extension service; b) crop seed improvment; c) provision of facilities for input distribution; d) development of cooperatives; e) horticulture development; and f) provision of credit. Establishment of Service Centres and Strengthening of Agricultural Extension Service 3.5 Agricultural service centres. Because of tho long delay in the construction programme in 1982, HMGN decided to reduce the service centres from 22 to 19 units. - 5 - 3.6 The construction of buildings did not start until the third project year and it suffered serious delay throughout the implementation period (para 3.44). At project completion the office buildings and two quarters in the districts and 17 service centres together with quarters were completed. A further two service centres were completed shortly after closure. However, some are still operated from rented premises. 3.7 A few service centres were not strategically located as they were too near district headquarters or were not in the centre of farming activities or the farming community. Most centres lacked basic amenities such as drinking water, electricity and appropriate accommodation for staff. Although the number of quarters provided was short of the SAR target (Table 2) many of those completed were not occupied since local staff preferred to live in their own homes which were within travelling distance of the centres. 3.8 Government departments such as agriculture, livestock, cooperatives, postal service and local government were supposed to be located in each service centre. The Department of Local Development whose main function was to coordinate the activities of all the implementing agencies was not represented in all services centres, as a result of which each agency planned and operated independently of the others. 3.9 Although service centres have performed useful functions it has not been with maximum effectiveness. The SAR proposals appear to have been ambitious, trying to accomplish too much in too short a period without giving adequate attention to local constraints (para 3.44) and to sustaining project activities during the post-project period. A two-phase programme (about 7-10 years) in developing, strengthening and expanding infrastructure, manpower and project activities would have had a more enduring impact on agricultural development. 3.10 Agricultural extension service. The project proposal aims to increase the number of extension personnel and quarters, staff training and extension activities. 3.11 The staffing strength achieved under the project was as below: District Assistant Junior Junior Village Agricultural District Technician Technical Agricultural Development Agricultural (JT) Assistant Assistant Officer Development (JTA) (VAA) (DADO) Officer (ADADO) SAR 2 1 13 26 282 Actual (3) (4) 30 38 235 Note: Figures in brackets indicate temporary staff. - 6 - Clerk Storekeeger Statistical Messenger Assistant SAR 5 23 0 21 Actual 8 20 3 11 The posts of DADO were only filled in 1985/86, six years after project commencement and they were temporary. Although there were six permanent posts of ADADO in the three districts from project commencement until 1985/86, these were reduced to two in 1986/87 and in 1987/88 permanent posts were replaced by four temporary ADADOs. Extension staff was below strength for covering 134 village panchayats, i.e. the SAR provision to have one JTA for every two panchayats and three VAAs for each panchayat proved to be insufficient. 3.12 The proposed staff training programme was well below SAR expectation (Table 2). No training programme was undertaken by the District Technical Support Unit since it had no technical staff. Detailed proposals for training were not submitted to IDA within twelve months of credit effectiveness nor during the project period. A Training and Communications officer was appointed to be responsible for training from about early 1981 to May 1983 but for unknown reasons, the post was not filled thereafter. 3.13 Although the agricultural extension service had been expanded and strengthened it still had considerable weaknesses. In the maize survey conducted by the MEU in 1985/86, approximately 50% of all the farmers interviewed had not met their JTs/JTAs and VAAs and only 10% of farmers were satisfied with the visits of VAAs. The situation has not changed since then. Adverse factors include low staff morale due to low pay, inadequate housing and mobility, late or non-payment of travel and subsistence allowances, lack of training and temporary status of appointments. 3.14 Crog seed improvement. Improved seeds were distributed to farmers in the form of a mini-kit, enough for each farmer to plant one rupani of land. Approximately 82% of the SAR target for wheat seeds (222 tons) was met, 58% for paddy (70 tons) and 14% for maize. Potato seeds were not included in the mini-kit. Distribution of mini-kits stopped after 1984/85 because it was considered that sufficient seeds had been distributed to farmers in the previous years. 3.15 The introduction of improved varieties was most successful with wheat, covering about 30% of cropped area presenLly, followed by paddy (35%), maize (35%) and upland potatoes (3%). Paddy seeds distributed were limited to only one or two varieties although more appropriate varieties were required to cover the varying conditions (elevation, topography and water availability) of the project area. Maize seed distribution was not a success as the improved varieties were not suitable because of consumer taste and long maturation period which could not fit into the cropping system especially in the northern and higher altitude part of the project area. -7- 3.16 Service centres were not provided with hand w- 'owers for farmers to clean their seeds as it was not considered to be a practical position. Farmers continued with the traditional method of cleaning and storing their seeds. 3.17 The project has made an impact in that use of improved varieties by farmers is increasing. However, there is a need for adaptive trials to determine varieties that are high-yielding and disease resistant and suitable for varying altitude and water regime. 3.18 Agricultural input distriuution. At district headquarters all targeted buildings except one staff quarters have been constructed by July 1988 and the staffing position corresponds approximately to SAR provisions. Of the 16 warehouses completed in service centres only seven could be used because of lack of capital by the cooperatives as well as* lack of transportation facilities to the centres. A fault with the design of the cooperative stores is the lack of separate storage for fertilizers and for seed. 3.19 AIC was responsible for the storage and sale of agricultural inputs. Sale of wheat seeds far exceeded SAR estimates (Table 2). Comparison between SAR and PCR in the sales of fertilizers is not possible because the volume of inputs sold is expressed in hectares and tons respectively. Data are not available concerning the type of crops (and acreages) on which fertilizers are used by farmers, rate of appliction, etc. However, a survey by the MEU indicated that the supply of seeds, fertilizers and plant protection chemicals was often unavailable or untimely and prices high and beyond the financial capability of many farmers. 3.20 Cooperative develooment. In all 20 cooperative societies were established against 22 as planned at appraisal. Only 17 cooperatives had been functioning and performance has been much less than anticipated due to lack of working capital and problems of loan collection (in the absence of organized marketing systems), resulting in limited credit facilities being given by the Agricultural Bank of Nepal (ABN). The rather poor performance of the cooperatives has resulted in a number of farmer groups being formed with group responsibility for credit and input supplies. At the district headquarters, three district cooperative offices, 20 cooperative sub- centres, including warehouses (like the cooperative stores) and 18 staff quarters were completed. So far, 16 managers and 823 farmers have been trained for the cooperatives compared to the appraisal targets of 22 and 500 respectively. 3.21 Horticultural development. This project component was a success and exceeded appraisal expectations. The building at the horticultural farm at Satbanj station <1> (Baitadi district) was constructed and the area of farm expanded to 29 ha. From this station, planting material of temperate fruit such as apples, walnut, peaches, etc., were distributed while from other sub-stations at lower altitude, sub-tropical and tropical fruits (different types of citrus, mango, etc.) were distributed. Overall distribution of fruit seedlings far exceeded appraisal targets (nearly about 88,330 as compared with appraisal targets of 22.850 - Tables 2 and 4). Apples, walnuts and citrus were the most popular constituting about 86% of total distribution. The supply of fruit seedlings was made possible because of the establishment of 12 nurseries (1 government and 11 private). The <1> The station supplies saplings for two zones of nine districts. seedlings distributed were adequate to cover approximately 150 ha of orchard compared with the appraisal estimate of 40 ha. 3.22 Although there was evidence of a growing demand for backyard vegetables, actual production figures on area grown were not available. The main vegetable seeds in demand were: radish, cucumber, cabbage, cauliflower, onion, okro and spinach. To meet the demand for seed, seed gardens were established at the AIC district centres. Approximately one ton of vegetable seeds have been sold by the Agricultural Input Corporation and these would he adequate to plant 50 ha of vegetables compared with the SAR estimates of 100 ha. 3.23 A modest training programme was undertaken during which some 33 JT/JA, 27 VAA, 43 leader farmers and 29 nursery owners were trained in horticultural practices. The considerable expansion of private nurseries for the production of plants was encouraging. However, there is a need for close supervision of these nurseries to ensure that plants supplied to farmers are true to type, healthy and disease free, and for an extension component to improve farming practices. With the expected increase in production. particularly apples, attention would need to be given to storage and marketing facilities. 3.24 Provision of credits. Apart from the poor credit record of the cooperatives, the agricultural credit programme on the whole exceeded appraisal targets due to demand from individuals and farmer groups. Much of the credit also went to the development of cottage industries, mini- turbines, biogas and fruit processing in addition to crops, horticulture and livestock. 3.25 The Agricultural Development Bank of Nepal (ADBN) has been responsible for the provision of production loans and medium-term loans for crops and cottage industry development. ADBN had completed the construction of the three district offices and recruited adequate numbers of staff on time. Despite serious delays in the completion of irrigation works and low achievements in the cottage industry training programme, loan disbursements greatly exceeded the planned targets as shown below: Loan Disbursements Fiscal Year ........ .. Total 8/282/83 83184 84/85 I518 86/7 CR3t L~~L _7AL PCR SAR . . . . . . . . . . . . (NRsO000) . . . . . . . . . . . Agriculture Loans 86 517 877 2,285 3.243 1,008 8.016 3.405 Cottage Industry 62 91 519 536 658 122 1.988 800 Loans Total JAB jka 1.3Y6 2.82 LIU 1.130 1Q.00 4.Z05 3.26 Total loan disbursements during FY81/82-FY86/87 were NRslO million, or more than double the appraisal estimates. Of the total loan disbursements, NRs8 million (80%) were production loaiis including crops (20%), livestock (40%) and horticulture (20%). and the remaining NRs2 million (20%) were mediuin-termn loans for the development of cottage industries. However. due to poor loan recovery froii cooperative societ.ies. loans disbursed to meinbers of cooperative societies were reportedly low at -9- about 20% of the total disbursements of agriculture loans. Due to lack of adequate monitoring. data on loan recovery are at present not available. However, it was reported that loan recovery from individual farmiers was satisfactory at about 80%, while loan recovery from cooperative societies was very low, between 20% and 30%. Loan recovery from cottage industry's borrowers was also reportedly unsatisfactory. Livestock Develoomer- 3.27 Because of the importance of livestock in the economy of the project area, special emphasis was given to provision of facilities, staff and equipment, and to staff and farmer training in livestock development. Provision was also made for purchase and distribution of improved breeds of livestock for crossing with local breeds. 3.28 Veterinary hosgitals and disoensaries. As proposed at appraisal. the hospital at Patan in Baitadi district was improved by construction of a laboratory and renovation of existing staff quarters. The laboratory was provided with very basic equipment. Although not included in appraisal estimates the check-point at Darchula was upgraded to a district hospital and a new district hospital was constructed in Dandeldhura. Each district hospital was staffed by 1 veterinary doctor, 1 JT, 1 JTA, 1 clerk and 1 stockman and this was below the SAR requirement of two teams of staff with each team consisting of 1 JT, 2 JTAs and 1 stockman. It is not known why the three dipping tanks (one in Baitadi district and two in Darchula district) proposed for the control of ectoparasites of sheep and goats which were prevalent throughout the project area were not constructed. At appraisal 21 veterinary dispensaries were proposed and these would be located at service centres. At project completion 22 dispensaries were established and of these only 18 were provided with buildings and staff. The remaining four dispensaries continue to operate from rented premises. 3.29 Each dispensary has a staff strength of 1 JTA, 2 stockmen and 2 messengers as against appraisal estimates of 2 JTAs and 2 stockmen in 1984 but in the following year the staff strength was reduced by 2 stockmen and a messenger. This had a depressing effect on field programmes and to make up for the reduction farmers and farmer leaders were trained to undertake field activities within their communities. 3.30 Uograding of buffalo and other livestock. At appraisal there was provision for the purchase of.buffalo bulls (Murrah breed) for upgrading the quality of local animals. The buffaloes were not kept in the service centres or the hospital in Patan because of difficulty of farmers in transporting their animals. Instead they were distributed to selected farmers who. under the guidance of stockmen, looked after the animals and offered services to other farmers at a fee determined by the family community in the traditional manner. Fifty-five cross-bred Murrah bulls had been distributed up to July 1987 under the project and 13 bulls from government funds the following year. About 695 female calves and 263 male calves have been 'produced to date. The impact of this programme was not as widespread as was expected because of the traditional system of destroying bull calves as soon as they are born. 3.31 Although not included in the original SAR proposal. 30 Jersey cross-bred bulls, 39 goats, 13,369 chickens were purchased from project funds and distributed to farmers. Most of the Jersey progenies have died due to poor management and other reasons. The distribution and sale (subsidized price) of chickens to farmers was a failure since most farmers resold their - 10 - aquisitions to other farmers at a profit and mortality rate (by wild animals including jackals) was very high. 3.32 Animal health care and feeding. the most successful programme on livestock develupment was the disease prevention and control programme. Achievement in the treatment of animals far exceeded SAR estimates (Table 2). For improved animal nutrition, mineral blocks (230 packets of 2 kg each) fodder saplings (10,078) and grass seeds were distributed to farmers. 3.33 Extension service. The nomber of staff has increased but the increase is less than the SAR target:- Incremental Staff (No.) Senior Assistant Junior Junior Clerk Stockmen Veterinary Livestock Technician Technical Officer Officer Assistant SAR 1 3 5 44 2 41 PCR 1 3 3 23 3 23 The posts of Junior Technicians were filled in 1982/83 but were reduced to three from 1985/86. Likewise the number of JTAs reached the maximum of 30 in 1983/84, but was reduced to 23 the following year. No reason was given for the reduction and it can only be assumed that this was due to high turn-over (resignation) of JTs and JTAs resulting from job-related problems. Experience indicates that there should be a minimuin of two JTAs and 1 stockman in each service centre. EVen allowing for staff reduction the number of quarters provided (21) was short of appraisal estimates of 56. Staff training was inadequate (Table 2) since no detailed training proposals were submitted to IDA as stipulated and no training programme was drawn up by the Technical Support Committee (para 3.12). Extension activities were carried out and these included technical guidance by stockmen to farmers given project animals, farmers' training and study tours, livestock exhibition and distribution of mineral blocks, mini-kits, grass seeds and fodder saplings. 3.34 Marketing of livestock oroducts. Although stipulated at appraisal. the Dairy Development Corporation did not carry out a study to determine improvements to marketing and production of ghee. The study was not considered by HMGN to be necessary since a preliminary survey by the Department of Agriculture in 1979/80 had indicated that milk production was negligible, scattered and costly to market and ghee production was not sufficient to meet local consumption. Irrigation Development 3.35 Two agencies were implementing this component: (i) the Department of Irrigation, Hydrology and Meteorology (DIHM); and (ii) the Local Develop ment Department (LDO) actina through the Chief District Officer (CDO) and District Technical Office (OTO). Broadly the DIHM handled the 'large" schemes above 50 ha, usually located in the valley bottoms. while the LDD/CDO implemented all small hill terrace schemes below the arbitrary 50 ha size. - 11 - 3.36 DIHM schemes. The project was to develop a total of ten "large" schemes adding up to 675 ha of net command area. Implementation was weak from the outset, as inadequate technical staff (or lack of staff), high staff turnover and the remoteness of schemes made surveying, design and construction difficult. Implementation was further hampered not only by poor contractor services and cost escalations, but also by poor quality designs and underestimation of costs. In one case a final cost estimate exceeded the SAR estimate by over 250%. Of the portfolio of 10 schemes identified at appraisal only one (Seltauna) was actually implemented together with three other schemes (Shera, Banku and Oungkeli). Although repeatedly advised by IDA missions to take up new schemes only if their economic, financial and social justification had been clearly established, the project embarked on these schemes without subjecting them to such scrutiny. As seen from the table below these schemes have a total net command area of 250 ha which is 37% of SAR target. Unit costs have escalated from an estimated NRs1I,700/ha at appraisal to an actual NRs59,000/ha, i.e. by about 400%. .cheme Command Area Start of 1/ Area Irrigated Total NCA Cotu Construction in 1987 onstructioa (ha) ... & Duration (ha) Costs (years) (NRsOO0) Shera 60 55 81/82 (6) 45 4,000 Banku 60 55 81/82 (7) 45 2,600 Seltauna >120 120 82/83 (6) 35 7,600 Oungkeli _. 20 83/84 (3) 6 600 Total >265 250 131 14.800 1/ Although the schemes are reported completed, substantial rehabilitation works remain to be implemented until targeted areas can be irrigated. 3.37 By the end of 1987 about 70 ha of the then completed area was actually not beinq irrigated due to disputes over water allocation. defective structures and canals. and landslides. Water users associations have yet to be formed and a water charging system to be implemented (para. 4.18). The PCO expects a substantial performance improvement from the recently established district irrigation offices which will handle operation and maintenance of, among others, the four project irrigation schemes. 3.38 LOQ/QTO irrigation schemes. During preparation some eight schemes were identified and accepted at appraisal for implementation by LD0/DT0. Provision was also made for financing further schemes that were to be identified and included in the annual development programmes during project implementation. All in all about 430 hi of hill terrace schemes were estimated to be improved under the project together with 260 ha of new hill terrace area to be put under irrigation. By July 1988 about 31 schemiles with a net command area of 673 ha had actually been completed. No distinction was actually made between new construction and improvements as generally any one scheme turned out to be a combination of both. Emphasis in the programille was to provide more permanent key structures in existing systems such as intakes, difficult cross drainage works and major distribution points. Canal .lining works, mostly in stone masonry were also included where feasible. Farmers' response and participation have generally been favourable but they - 12 - have been slow in accepting and organizing maintenance responsibilities. Average costs invested into these schemes amiounted to abouit NRs6.000/ha which is little more than 10% of the costs absorbed-by the "major" schemes. Soil ConservatiorECrJsion Control 3.39 This component was primarily meant to be institution-building and spreading awareness on erosion control through training and extension. In addition, provisions were made for stabilization measures on 38 gullies and for 160 ha of protective plantation. As foreseen at appraisal, a Divisional Erosion Control Office was established at Patan, supplemented by field offices at Darchula and Dandeldhura district headquarters. Sufficient staff were also employea. However, besides physical works implementation (the project exceeded SAR provisions), little was achieved in terms of training and extension, except in the last project year when conservation training and education were intensified. Resources for physical works were spent entirely on protective measures for the Dandeldhura-Patan road without clearly establi.hing its priority need as against protection requirements at irrigation schemes or other infrastructure. Health ServiceS 3.40 Health services were expected to be improved through upgrading and construction of three hospitals, three district health offices including staff quarters, 25 health posts, and increasing medical equipment, supply of drugs and numbers of staff. 3.41 Except for the distribution of medical equipment and drug supply. overall achievements were satisfactory. Two district health offices and 21 health posts together with staff qua-ters were completed. As a result of inadequate budget provision, the distribution of medical equipment and drug supply was very little. Moreover, many health posts never received any medical equipment and drug supply during the project period. However, significantly more staff were recruited. A total of 215 staff, compared with 87 staff estimated at appraisal, are now working in the project areas. Due to changes in HMGN's policy, the Evangelical Hospital at Pokhara District had been given another nine years lease and no hospital was const.ructed under the project fund. However, two hospitals including staff quarters and attendants accommodation in Baitadi and Darchula districts were constructed under HMGN's regular programme. Education 3.42 This programme aimed at providing more hostels and classrooms as well as teaching materials to secondary and primary schools in the project areas. It was planned to construct five hostels, upgrade 121 schools and provide teaching material for 417 schools. The start up of the programme was delayed by one and a half years. Except for staff, overall physical achievements were very low. The implementation was hampered mainly by the inadequate budget provision and delays in the budget release. Due to shortage of experienced staff for planning in the Ministry of Education. development proposals were not regularly and properly prepared, budgets were therefore untimely and inadequately provided and particularly in FY85/86 no budget was allocated. Progress was further aggravated by the late budget release due to excessive delays in preparing statement of expenditures of previous years. To date a total of 90 schools were upgraded and four hostels were completed. The quality of construction was, however, poor. Provision - 13 - for furniture (desks, chairs) has never been adequately made while provision for teaching aids was insignificant. Village Water Sugolies 3.43 During implementation of RD II a simultaneous UNICEF programme provided significant assistance in the development of new village water supplies in the three project districts. The project therefore concentrated efforts in this component on the improvement of some 225 existing wells and springs through construction of shelter structures, provision of outlets and protection from waste-water drainage. The DTO was the implementing office. As in all other civil works this component suffered from insufficient technical staff aggravated by remoteness and the scattered nature of work sites for survey as well as implementation. Panchayat participation has been unsatisfactory in many places. Thus the accomplishment was only 128 improved wells and springs, which is 57% of SAR target. The project also supported the construction of a water supply scheme for Patan village and the project headquarters. During FY 87/88 12 new water supply schemes were financed by the project and all were completed by project closure. There are no details available on the state of maintenance of completed scheme3. Building Construction 3.44 Construction of a large number of buildings, including district offices for the various line departments, staff quarters, health posts, hospitals, agricultural service centres, schools, hostels, project head quarters at Patan, etc., were undertaken (Table 1). Designs have been adequate in most cases but numerous office buildings and quarters have been designed with flat roofs of RCC without any slope for rainfall run-off, which is both inappropriate and wasteful in remote areas where cement and steel has to be handcarried over long distances. While quality of construction is variable, it has been sub-standard in the majority of cases. Construction involving cement masonry and RCC work has been the worst particularly because of the inexperience of contractors (who often under- bid), shortage of skilled masons and inadequate engineering supervision at the widely scattered construction sites with difficult communication facilities. Slow release of funds, delays in paying contractors and staff not being acquainted with MOF regulations were other adverse factors. Construction work started moving at a reasonable pace from 1983/84 onwards. Development of Trails and BridUes 3.45 The project through the DTO was to upgrade, widen and improve five existing major trails and eight minor trails up to a total length of 250 and 350 km respectively. In the three districts an estimated total of 128 timber bridges were envisaged. Three sites for suspension and some 16 sites for suspended bridges had been identified on existing main trails during preparation. Out of the total trail improvement target of 590 km only 339 km, or 57%, were achieved, which was mainly due to the fact that preference was given to new trails as against improvement of existing ones. However, the shortfall is still significant and relates also to mis appropriation of funds at village level through contractors and technicians, - 14 - shortage of skilled labour and overseers, and too many small contractors under the "piece work system" <1). 3.46 The OTO was to implement the abovementioned 128 timber bridges. 16 suspended and 3 suspension bridges. The latter would have spans of about 90 m and would be designed and constr-ucted with the assistance of the Suspension Bridge Division of HMGN Roads Cc.ujartment. Up to mid-1987 the project had completed 33 wooden bridges and 6 suspension/suspended bridges, with three still under construction. The absence of suitable (durable) timber is giveh as the major reason for the substantial under-achievement. However, lack of adequate technical staff to survey, design and supervise construction was the factor most responsible. In several instances materials had been brought to site or were stored elsewhere for excessive lengths of time so that essential materials had either decayed or been pilfered before construction could start. In other cases inexperienced staff built bridges with too little consideration for flood hydrology with the result that they were washed away. The suspended and suspension bridges are generally of acceptable standards but due to their greater structural complexity do require maintenance by relatively skilled personnel. 3.47 For the last project extension the authorities made a serious effort to implement a further 26 bridges, including steel truss as well as suspendei and suspension bridges. Of these, however, only nine were estimated to be completed while surveys and designs were to be carried out for all, and materials procured for as many as possible, within the available budget allocation. 3.48 Surprisingly, this rather ambitious programme not oniy got fully implemented but was exceeded. Instead of the estimated nine a total of 17 new bridges were implemented, with only some finishing works, such as link roads and gabion protections, spilling over the project closing date <2>. In addition, two bridges which had been left incomplete for years were completed. This remarkable achievement was the combined result of lessons learned form earlier years, timely flow of funds, expedient procurement, skilled staff and a strong leadership exercised by the PCO. Postal Services 3.49 The project aimed to improve postal services through provision of furniture and fittings for existing post offices, and construction of 19 additional post offices and 50 small relay stations for mail runners. 3.50 The programme commenced in FY81/82 and achieved very little of the planned physical targets. During the project period it was found unnecessary to construct the relay stations because mail runners meet only for exchanige of mail. Thus, only 16 additional post offices were constructed. of which two remained uncompleted. Moreover, many of the completed post offices remained idle due to problems in siting them away from villages where most people would normally visit them more frequently. The provision of equipment and furniture was satisfactory. At present about 176 staff are working in the project area, compared with 38 estimated at appraisal. <1> A given work is divided into pieces (contracts). not exceeding NRs5O,000 each. <2> All works are reported to have been completed during current FY 1988/89. - 15 - Cottage Industry 3.51 The main objectives of the programme were to develop a wool-based cottage industry and subsequently to help increase the level of income of the hill people. Funds were also provided for cottage industry surveys to identify existing skills, production and marketing channels of various cottage industries and to determine the;r prospects for future development. 3.52 Although the required staff was in place, the programme achieved very little of its planned physical targets and objectives. Due to lack of interest and enthusiasm in the Department of Cottage and Village Industries, it failed to construct an emporium, staff quarters and carry out the cottage industry surveys. Moreover, despite the relatively large number of trainees (704), the quality of training was, however, low due to the rigid training period (three months) and inadequate training equipment and material. Very few graduate trainees set up their own businesses or found employment which was reported to be lower than 20%. Moreover, except for training in woollen works the choice of training for other cottage industries did not correspond to the needs of people and market demand. The metal and wooden works and leather goods were either given little attention or entirely neglected. Failure in identifying and developing a proper training programme was due to lack of information which was supposed to be supplemented by the cottage industry surveys which were not carried out under the project. Despite the low quality and improper training, the actual loan disbursement greatly exceeded the ippraisal targets (para 3.25). Technical Assistance 3.53 The SAR provided for 12 man-years of internationally recruited TA staff and consultants, funded by UNDP. Actual composition of the team and duration of assignments are detailed below together with sub-contracts made for special tasks. Although in general the team provided a valuable input to project implementation some of its potential impact has been impeded (following paras). - 16 - Technical Assistance Team Team Member Date DeRemarks Specialization Joining SeDarating Civil Engineer 4/1981 4/1984 Assistant to PC 4/1981 8/1982 Socio-Economist - /1981 9/1983 M & E Advisor 10/1983 11/1985 Sub-Contracts (1) 2i1981 10;1981 Local sub-contract to design Head- quarters building and water supply (2) n.a. n.a. Evaluation of a proposal for Phase II of Rasuwa-Nuwakot (3) 11/1982 9/1983 Preparation of a proposal for Phase II of Rasuwa-Nuwakot 3.54 The Assistant to the PC and the Socio-Economist primarily served the Rasuwa-Nuwakot (RD I) project although they did administer initial efforts toward the RD II project. The PC's office was not established at the headquarters (in Patan) until the second year, and even after becoming operational, most of the officers of that office were not fielded until much later. 3.55 The Civil Engineer's work focused on assisting the OTO in technical planning, design and implementation of minor irrigation works, buildings, water supplies, trails and bridges. His services have been appreciated as useful. However, his overall contribution would have been enhaniced if he had been provided with adequate counterpart staff as well as technical volunteers. 3.56 The M & E Advisor established a project monitoring and evaluation unit in the PCO and helped institute a regularized and systematic trimestrial reporting system for monitoring of project progress. He also trained staff in relevant procedures and fields related to rural develop ment, introduced computerization of data storage and processing. and prepared a manual on IROP monitoring and evaluation. He also conducted several surveys and impact studies. 3.57 The TA team helpeu to organize a six-weeks training course on rural development for 15 participants in the Philippines. Further it organized study tours for project officers in India, Sri Lanka, Philippines. Thailand. China and Malaysia, totalling about 35 man-months. One planning officer and an officer from the LDD were sent to the United Kingdom for training. During the project it became apparent that the prospect of overseas training or - 17 - study tours were an attraction tc work in the project which later became an expectation. However, once the training was completed the staff member often sought transfer to another project. During most of the effective project implementation period there was no training officer in the PCO who could have organized in-country trair'ng. Therefore much needed training of artesan skills (mason, carpenter, plumber, construction worker) as recommended by IDA missions, was not undertaken, except through sou,c technical workshops organized by the M&E Advisor in 1985. The TA team also participated actively in local beneficiary training in the principal areas of cottage industry, agriculture and livestock. O. Project Costs 3.58 Total project cost, over a period of five years, was estimated at NRs16O.4 million (US$13.5 million). Tables 5 and 6 present the actual project expenditures and a comparison between the appraisal and actual project cost. Despite excessive delay in implementation, the actual project cost including UNDP's technical assistance was NRs161 million which is equal to the appraisal estimates. Although the cost of construction significantly increased as a result of excessive construction .delay. and a shortage of construction material, the overall reduced physical targets and the exclusion from ti;e project of the recurrent costs of many project activities (e.g. OQA, AIC, ADBN, education, public health, postal service) were the main reasons for the low project expenditures. These recurrent costs had been financed under HMGN's regular budgets *since 1986/87. 3.59 In terms of US$, due mainly to the above reasons and the considerably high depreciation of local currency of a4out 30% over the project period, total project costs were 9.32 million, or 69% of the appraisal estimates. E. Financing and Disbursement 3.60 The estimated and actual IDA and UNOP financings are summarized below, while the proceeds of IDA credit are presented in Table 7. financing -- SA 8R .......... ...... .... . Actual . ... HMGN J~8 a UNE Total HMGN ILA UtA1 . . . . . . . . . .(US$ million) . . . . . . . . . I/ Technical Assistance & - 0.03 1.09 1.12 - 0.00 0.76 0.76 Training Other Development Costs 0.68 8.25 - 8.93 2.19 6.37 - 8.56 Contingencies LO.L6 .... ..3.40 - _ - _ Total 1.3 JL.Q2 11 1145 0iS2 1 6 7 Q.M1 9 232 1/ Insignificant. - 18 - 3.61 Total financing from IDA was US$6.37 million, or 40% lower than the estimated credit, while total grant from UNOP was US$0.76 million, or 30% lower than the appraisal estimate. However, contribution from HMGN was US$2.19 million or nearly double the appraisal estimate of US$1.36 million. 3.62 IDA's disbursements were extremely slow throughout the project period. Major causes were excessive delays in construction of civil works, recruitment of staff and excessive delay in the preparation of statement of expenditures (SOE) for disbursements. The former resulted in low utilization of the allocated budgets while the latter was caused by severe shortage of trained staff in both the line agencies and the Auditor General's Office (AGO). Insignificant disbursements had been made during the first three years (IDA FY80-82). However, disbursements improved rapidly particularly when more physical progress had been achieved and later when the PCO played a vital role in alerting the line agencies in the timely preparation of SOE and in helping them to consolidate SOE for disbursement. F. Procurement 3.63 Procurement was the responsiblity of the implementing agencies. Imported items (e.g. vehicles, equipment, etc.) were procured under the international competitive bidding (ICB) and local material, locally manufactured items and contractors were purchased and employed under HMGN's procedures including direct purchase (value up to NRs1,OOO), local prudent shopping (value 'above NRsl,OOO up to NRs5O,OOO) and local competetive bidding (value above NRs5O,OOO up to NRs2.5 million). No major difficulties were encountered under direct purchase and loc3l prudent shopping. However, delays occured under ICB due to difficulty in preparing specifications and the considerable amount of time taken in obtaining approval from both IDA and HMGN. The employment of contractors under the local competitive bidding also faced serious delays due to the lengthy procedures of the local bidding, shortage of experienced contractors and the remoteness of the project area. IV. INSTITUTIONAL PERFORMANCE Imolementing Agencies and Coordination 4.1 While overall responsibility for coordination of project planning and implementation was vested in the Ministry of Panchayat and Local Develop ment (MPLD, formerly MOHP) and was exercised by the Central Coordinating Committee (CCC), individual project components were implemented under the responsibility of the line ministries and agencies involved. 4.2 Under the local administrative structure prevailing at appraisal the panchayats, assisted by the Chief District Officer (CDO) were autonomous in planning and coordinating the district development programme, through which most project works were implemented, but implementation and funding was still the responsibility of the line agencies. In 1982 this system was reformed in a Decentralization Act which was followed by Decentralization Rules in 1984. These strengthened decentralized planning and implementation - 19 - with a larger percentage of development funding passed through the COO directly to the village panchayats and not through line ministries. 4.3 The implementation of the decentralization exercise took some time to become fully established. For instance, it required the setting up of treasuries in all the districts and the training of staff to man these effectively, especially in how to release funds and which programmes were to be funded from the districts and which were to be centrally controlled. Co- ordination was also made difficult by lack of precise instructions from the centre concerning the role of the various coordinating agencies, e.g. coordination ccmmittees headed by the district administration, supervision committees headed by chairmen of Panchayats and the *IDRP central coordination committee which met twice a year but whose various sub- committees met every two months. Absorption and application of the new system therefore required time and this had considerable delaying effects on project implementation. 4.4 The siting of the Project Coordination Office (PCO) in the project area was an important innovation compared to the arrangement made under RD I where the Project Coordinator resided in Kathmandu. Thus, the PC could directly and actively assist in district planning, including the preparation of annual programmes by the project officers of the line agencies. However, the PCs remoteness from the Ministries also appears to have stimulated their inclination to revise or outrightly ignore these programmes. Prior to mid 1987 due to the remoteness of project areas the PC spent most of his time in Kathmandu, thus his role in coordination and in providing assistance in district planning had never functioned satisfactorily. 4.5 Although not specifically formulated in the SAR, the project of necessity had a considerable institution strengthening function and there- fore included provisions for incremental staff, offices, staff quarters and equipment, within each of its components (Tables 8 and 9. At appraisal an assurance had also been obtained from HMGN that staff would be appointed as scheduled. However, from the outset the project had to struggle with formidable staff problems: late sanctioning of posts, delayed recruitment, lack of qualified applicants, high staff turnover, lack of incentive and low staff morale. There are reports of numerous cases where staff took positions and then deserted their offices and duties. Most significant was the extreme shortage of technical staff as visualized in the table below, which reflects the situation in mid-1985. Comparison Between Aporaisal Targets and Actual Positions of Key Staff (mid-1985) a8: Sanctioned Filled Targets Nn. % of SAR No. % of SAR 1. Technical staff: (a) Overseers/Sub-overseers/ 93 63 68 22 24 Engineers (b) Other Technicians 573 572 100 497 87 2. Administrative Staff 226 239 106 222 98 Total E 874 741 - 20 - 4.6 Not only did the severe shortage in technical staff cause excessive programme delays but it was also at the root of the general absence of quality control. 4.7 In a situation where even the PC office and the TA component suffered from understaffing and frequent staff transfers (including PC and TA teamleader) the project 4mpact obviously remained weak. Only during the 1987/88 project extension oeriod did the staffing situation improve somewhat. However, the institutional capacities created, such as the M & E unit, and staff trained in rural development activities still require to be incorporated into MPLD's and the line agencies overall framework and to be sustained under regular HMGN programmes. Monitgrina and Evaluation 4.8 The project provided for strengthening of a socio-economic unit established under RD I in the office of the Chief, Project Coordinator through the appointment of additional staff and the provision of technical assistance for training of local counterpart staff for evaluation and monitoring activities. The unit (MEU) was also to conduct a baseline survey, and other surveys, and feasibility and other studies on project implementation and agricultural practices and to prepare a project completion report. 4.9 The MEU obtained the services of an expatriate socio-economist consultant for three years who provided the required training of local counterparts and helped in the design of ad-hoc studies for monitoring project implementation (para 3.56). However, shortages in trained and other staff as well as frequent staff turnover, made it difficult to obtain accurate field data for analysis. 4.10 The MEU managed to organize the following five survey/reporting activities: a) a baseline survey, carried out by the Central Panchayat Training Institute, (report published in 1984); b) a report on project construction activities by the technical advisor in 1984; c) a farm survey, carried out by the unit in 1985; d) a project report on project construction activities in 1984; and e) crop surveys for paddy. Nheat and maize carried out by the unit. However, due to several errors in data collection and inexperienced staff in the project area, the studies carried out by the MEU have yet to be published. 4.11 The unit has, since 1985, been able to have a full complement of staff and has therefore been able to improve on coordination of the activities of the various implementation agencies by helping in their budget preparation activities and in improvement of presentation of budgets to thp Ministry of Finance for release of funds in addition to its surveys and monitoring activities. 4.12 Although the baseline survey and the 1988 crop survey were fairly comprehensive they lacked an in-depth analysis of financial returns on farm enterprises and off-farm employment earnings and, as such, do not provide a good basis for evaluation of the project's effects on farm incomes. - 21 - Reporting and Accounting 4.13 Progress reports were prepared based on information furnished by the implementing agencies. Due to shortage of and inexperienced staff in both the implementing agencies and MEU, information and progress reports were collected and prepared irregularly and often with delays. However, the situation has recently improved when most of the staff have been in place and more experience has been gained. During FY79/80-FY86/87 only a few semi- annual reports and all annual reports were prepared. Due to budget and staff constraints in PCO after project completion, the progress report for FY 1987/88 is expected to be published only in May 1989. 4.14 The line agencies have been responsible for preparing Uroject expenditure accounts which have been subsequently audited by AGO. Although separate accounts were established on time, SOEs and audit reports were prepared with excessive delays. Major causes of delays were shortage of staff and the lengthy and cumbersome procedures of clearing and publishing of official audit results which are generally released after presentation to the Cabinet during April-June of each year. Delays in preparing SOEs had not only slowed down IDA's disbursements but also the budget release which seriously jeopardized progress of field activities. 4.15 The certificates of SOEs and audit reports during FY79/80-FY83/84 were completed only in July 1986, but the separate audit opinions have not yet been prepared and would be difficult to do so. The SOE and audit report for FY84/85 were also completed in July 1986 anc for FY85/86 and FY86/87 in August 1987 and 1988. Though the FY87/88 audit report is completed it has yet to be published -vhich is expected in August 1989. Compliance with Covenants 4.16 Many :; the major covenants, particularly those conditions required prior to credit effectiveness, were in a timely manner complied with. However, HMGN failed to prepare the training programme, carry out cottage industry surveys and collect water charges. Moreover, HMGN had not recruited project staff and prepared audit reports on time. 4.17 Although no training programme was implemented, a number of overseas study tours and diploma level training was organized for field staff under the UNDP's technical assistance programme. Due to lack of interest and enthusiasm in the Department of Cottage and Village Industries, the cottage industry surveys were not undertaken (para. 3.37). 4.18 The project failed to introduce a water charging system in the four irrigation schemes implemented under the DIHM component of "major irrigation." The two reasons given are late completion of the schemes and lack of cadastral and statistical data on which to base water charging. - 22 - V. PROJECT IMPACT A. Intended Impact 5.1 Project benefits were expected to come from: a) increases in foodgrains, other crops, fruits, milk and meat production, and animal products; b) generation of employment and reduction of under-employment; c) environmental improvement as a result of erosion control programme and the horticulture development which was expected to reduce deforestation and foster proper use of land resources; d) social and welfare benefits including the improvement of communication facilities (trails, bridges, postal services); health care (water supply, health services) and education in the rural areas; e) the improvement of nutritional status of rural hill people. 5.2 As a result of using improved seed varieties and cultural practices, increased use of fertilizers and agro-chemicals and timely provision of production loans, the annual incremental production at full development was estimated at 25,000 tons for foodgrains, 1,650 tons for potato, 440 tons for pulses and oilseed, and 1,000 tons for vegetables and fruit. The improvement of livestock services, extension and farmer training, as well as provision of improved seeds, would increase meat and milk production and availability of animal products. B. Actual Impact Production Impact 5.3 Crop production - net crogged area. The mission estimated that there has been no significant change in net cultivated area in the three project districts over the project period. At appraisal this area was given as 54,900 ha, as against 45,380 ha stated by the HMGN Department of Survey, Topography Division, Kathmandu. The latter was considered by the mission to be more reliable and hence adopted to assess project impact. Likewise the total cropped area estimated by the mission is based on the annual reports of the Department of Agricultural Marketing Services. Appraisal and PCR estimates of net cultivated area, total cropped area and cropping intensity are summarized below: - 23 - ..5A . ... ...... E Without With gL- 'Prgsent With oject ProQject Project Proigct (1990) (1990) (1979/80) (1987/88) (1992/93) ('000 ha) . . . . . ('000 ha) . . . . . Upland paddy 12.2 11.5 7.0 9.1 6.7 Lowland paddy 7.7 8.4 4.0 5.0 6.2 Maize 18.8 18.8 9.8 12.8 13.7 Wheat 18.2 18.2 10.6 16.7 20.2 Others 24.0 24.0 9.4 13.6 12.2 Total net cropped area 80.9 80.9 40.8 57.2 59.0 Net cu.tivated area 54.9 54.9 45.4 45.4 45.4 Cropping intensity 147% 147% 90% 126% 130% 5.4 Data on the total area irrigated under the project were not available, nor a breakdown into fully irrigated, partially irrigated and rainfed areas as proposed at appraisal. At full development the cropping intensity is estimated to be 130%, which is lower than the SAR estimate of 147% because the availability of irrigation water is less than anticipated at appraisal. 5.5 Cropping pattern, Yields and production. The trend that can be derived from the available statistics indicates increasing areas and production of grain crops, particularly wheat and maize (Table 13 and para 5.3). Comparison of SAR and PCR estimates is given below:- Percentage (%) of total cropped area la . . . . SR... .... ..... B Without With Ea- Present Projiect Project Project Pro'iect (1990) (1990) (1979/80) (1987/88) (1992/93) Upland paddy 15 14 17 16 11 Lowland paddy 10 9 10 9 11 Maize 23 23 24 22 23 Wheat 18 18 26 29 34 Other crops .1/ 34 3. 23 24 21 Total 100 100 100 100 100 1/ Includes millet, barley, potato, oilseeds, pulses. - 24 - At full development wheat, paddy and maize would continue to be the major crops. However, contrary to expectation, wheat would become the most important crop instead of paddy because of the limitation of water supply for greater expansion of paddy. 5.6 SAR estimates of crop yields for the future without project situation appear to be on the low side (Table 14). This is due to farmers using slightly more fertilizers than expected although the amount used is well below recommended rates. Fertilizers are costly and supply is untimely owing to difficult terrain and poor road infrastructure. The mission assumes modest yield increases under the project and considers improvement in soil conservation measures and making and storage of compost to be a better and cheaper way of enhancing soil fertility, under prevailing conditions. 5.7 At full development, the project is estimated to increase foodgrain production by about 14,400 tons compared with SAR estimates of 25,200 (Table 15). 5.8 Croo/farm bud_et. Owing to lack of data, crop and farm budgets are simplified. Physical input requirements per hectare (Table 16) and a 0.9 ha farm model to represent the average farm size holding are prepared. At full development the net farm income (including hired labour costs) would increase by 45%. Gross Income Net-Income, ............ (NRs) . Without Project 5,740 2,485 With Project 6,780 3,610 The SAR estimated the net farm income increase to be from 50-130% depending on the farm sizes 0.5 ha and 1.5 ha and the ecological zones consisting of Zones I and II covering paddy-wheat rotation and Zone IV, high altitude zone where potato production predominates. Horticulture Production 5.9 According to the SAR there would be an increase of about 600 tons of fruit from 40 ha of additional fruit trees and 500 tons of vegetables. from 100 ha of vegetables. A meaningful analysis of project impact is not possible because of unavailability of data and these include the acreages of different types of fruits (more than 7) and vegetables (more than 7 types) planted, mortality rate in the case of fruit , crop yields and production. oroduction costs, etc. Twelve fruit nurseries were established and approx. *,8,300 plants have been distributed. Assuming a 15% mortality rate in the field, approximately 150 ha of fruit trees have been planted. Except for walnut and almond, other fruits have started production very recently. On the basis of the sale of seeds by the Agricultural Input Corporation. it can only be assumed that a minimum of 50 ha of vegetables have beer. cultivated during the project. Most of the vegetables are consumed by the growers and their families. 5.10 Livestock production. Even this comnponent's impact is difficult to assess due to lack of data. The Agricultural Marketing Services started collectimig data on milk and meat production for the three distric.ts only a year ago. Estimates of production of the SAR, the District Livestock Office in Patan, the Agricultural Marketing Service and the Bench mark survey of - 25 - the Department Qf Survey vary considerably (Table 11). The District Livestock Office in Patan. Baitadi, in a sample survey indicated that the mortality rate of livestock has been reduced by about 5% and milk producction increased by 15%. These are higher than the appraisal estimates of 3% and 10% respectively. Due to the poor performance in upgrading of buffalo and other livestock (paras 3.30 and 3.31) the impact of this sub- component has been well below expectations. Social Imoact 5.11 Trails and footbridges. These communication facilities are not only of vital importance in facilitating social and economic activity in the three project districts but also by themselves constitute an important factor in locally planned and implemental development activities. Of total achievements, as reported above, some have exceeded and some remained behind expectations, however, the social impact of the component is significant. There is, however, a danger that outside intervention will reduce self- reliance among benefitting communities. The trail rehabilitation was largely a deferred maintenance programme and the experience that funds have been provided and technical assistance given may discourage self-sustained maintenance. 5.12 Water sugolies. The above applies similarly to water supply facilities improved under the project. However, as each facility has a relatively small group of beneficiaries, maintenance should be less problematic. 5.13 Health services, education. cottage industry and postal services. The improvement of health services was reportedly useful in terms of providing more facilities to in-patients and drugs to out-patients as well as in stimulating hill people's awareness on health care. The educational programme provided more classrooms and accommodation to students in the remote areas. However, benefits generated from the cottage industry development and the improved postal services were reportedly insignificant due to problems in conducting improper training programmes and errors in siting post offices. 5.14 Institutional imoact. The project satisfactorily achieved its objectives in establishing infrastructural and institutional bases for retention of project activities and expansion of similar rural development programmes in the future. The level of staff skills had been enhanced up through local and overseas training and foreign technical assistance. 5.15 Emolovment generation. Employment was generated mainly from the agricultural sector as a result of using improved seeds and cultural practices, the construction and improvement of infrastructures and project management. Due to lack of information, the expected incremental employment from the agricultural sector cannot be quantified. However, about 1.1 million man-days are estimated to have been generated by the construction and improvement of infrastructure during the project implementation period. Moreover, at least 200 permanent jobs were created under the strengthening of project management. 5.16 Environmental impact. The expected environmental impact has been limited. Although the erosion control programme has been ecologically very beneficial, it has been confined to the Dandeldhura-Patan road only. As there has been no saving of arable land as a result of soil erosion control measures no relevant benefits, as anticipated in the SAR, have materialized. Due to low achievements and delays in the completion of irrigation schemes - 26 - their impact on reducing surface run-off is expected to be small. The plantation of trees is expected to reduce deforestation, foster proper use of land resource and increase fruit production. A positive impact is also expected from the conservation training and education in schools. 5.17 Nutritional impact. Nutritional impact attributable to project incremental foodgrain production has been significant. The total foodgrain deficit in the project area has considerably reduced, while tute per capita consumption has increased (see Table 18 for food balance). Despite the rapid increase in population of about 20% in the project area during 1975-86 the foodgrain deficit decreased from about 40% during 1975-80 to 30% in 1985/86. The total foodgrain deficit was about 17,200 tons during 1975-80 and 16,600 tons in 1985/86. The per capita foodgrain consumption increased from 83 kg during 1975-80 to 93 kg in 1985/86. Among the three districts, Darchula district has currently become self-sufficient in foodgrain production. However, due to significant decrease in foodgrain production in Baitadi oistrict, resulting from the continuing bad weather conditions, the foodgrain deficit increased about 10% during the same period. VI. ECONOMIC RE-EVALUATION 6.1 At appraisal the economic rates of return (ERR) had been calculated for the components of agricultural development, irrigation, livestock and the whole project which included in addition to the above components the benefits and costs of the horticulture development. The ERRs, calculated over a period of 20 years, had been estimated at 50% for agricultural development, 12% for irrigation, 15% for livestock and 21% for the whole project. 6.2 Due to lack of agronomic data resulting from the poor performance of the MEU and the absence of impact study, no attempt has been made to re- estimate the economic rates of return (ERRs) for the irrigation, livestock and horticulture development components ar,d the whole project. However, based on a modest crop survey which was carried out by MEU in 1988, district crop production statistics and assumptions made by the mission, the ERR for the agricultural development component including impacts from minor and major irrigation schemes has been calculated. Details of assumptions on costs and benefits are presented in Annex 1. The ERR has been carried in 1989 constant prices and is estimated at 46%. The high ERR is attributable to the modest cost of the extension services and input (inproved seeds), and the relatively high incremental yields (15%) resulting from the adoption of improved cultural practices and improved crop varieties. However, due to excessive delay in construction and cost overrun the ERR for the irrigation development component alone would be negative. Similarly, the ERR for the whole project is expected to be lower than the appraisal estimnate of 21%, as a result of the poor performance of the irrigation development and lower achievements in the development of the vegetable cultivation (para 5.9) and the upgrading of the quality of livestock (paras 3.30 and 3.31). - 27 - VII. IDA PERFORMANCE Project Design and Appraisal 7.1 With the benefit of retrospect, knowing that some of the short comings of RD I were repeated in RD II, it could be argued that this could have been avoided. However, at the time of appraisal, although having been operational for over two years, the RD I project was still in a phase of expanding activities and overall enthusiasm. Moreover, HMGN at the time considered RD I to be a model case for future IRDPs. At appraisal it was accepted, therefore, that the new prcject would have a large number of components as well, although this later turned out to be a major shortcoming of both projects. Nevertheless, the forestry component was removed rromn the project at appraisal, as it was to be addressed in a national forestry project then submitted for IDA support. The complexity of the project. involving 18 implementing agencies, was exacerbated by the remoteness and poor accessibility of the three project districts. 7.2 The confidence of the Bank in the ability of line agencies to recruit and post the required number of staff appears to have been excessive. Shortage of staff and/or lack of qualified staff turned out to be the most difficult of all constraints to deal with, and was never fully resolved. Sugervision 7.3 The Bank fielded a total of 12 supervis)on missions over the eight- year period of implementation, which was somewhat below requirements, particularly when considering that nine of them were one-man missions. More emphasis should have been placed on engineering and agronomic inputs into missions. Direction and guidance were in partizular demand in "major' irrigation development, which accounted for over 12% of project expenditure but turned out to achieve very little development impact. 7.4 The Bank has been generous in granting three extensions to the project, motivated by a very late start of the project activities and the many implementation constraints already amply discussed. VIII. CONCLUSIONS AND tESSONS LEARNED 8.1 Since the Fifth Five-Year Plan (FY75-FY80), HMGN has placed high priority on agricultural sector development with emphasis on Integrated Rural Development Projects (IRDP). The first IDA assistance to IRDP began with support for the Rasuwa-Nuwakot Rural Development Project (RD I). which became effective in July 1976, and contained provision for preparation of a second rural development project. This was selected in line with HMGN policy of balanced regional development in the far Western Region, which until then had received very little attention. It was a bold step into developing three hill districts of the Mahakali zone. which, apart from a jeepable road access to Dandeldhura district centre, had not seen any noticable development activities before. The development reouirements and expectations were correspondingly high, which was reflected in quite - 28 - substantial targets proposed at preparation stage but which were trimmed down at appraisal to what was then thought to be a manageable project. However, implementation faced more difficulties than could reasonably be anticipated as the project had to cope, not only with administrative, financial and managerial problems related mainly to remoteness and access, but also suffered a major earthquake. 8.2 Oespite a prompt start-up, implementation of the project soon ran into difficulties. In an environment where it was often impossible even to rent rudimentary office buildings before being able to construct a minimum of such buildings for project implementation, considerable time was needed to build up adequate implementation capacity. This resulted in slow disbursement over the initial three years, necessitating an equally long extension of project closing oate, up to July 1988. Achievements, in terms of physical targets, of most project components were, however, substantially below the appraisal estimates except in some activities such as livestock development, horticulture development, small irrigation schemes, erosion control, distribution of inputs, and the provision of credits. Main problems encountered in the implementation of all project components were the excessive delays in the release of funds, in the recruitment of staff together with a serious shortage of trained staff, especially engineers and technicians, and lack of quality control. The remoteness of project areas and high turnover of staff added to the difficulties in project implementation. Most of the completed physical targets had been undertaken largely during the last three years of the implementation period when most of the key staff were in place and experience gained. The construction programme was most seriously delayed and badly jeopardized progress in almost ail project development activities. Project coordination and management were weak during initial implementation years but improved curing the last two years when significant: progress was made. However, the provision of adequate incentives to increase staff morale and thereby reduce staff turnover has yet to be worked out to ensure successful project implementation in remote areas. 8.3 Overall, the project achieved the main objective of increasing production as well as improving the welfare, social and environmnental conditions of rural hill people. Production increases at Full development (19.400 tons of foodgrains per year) appear to be encouraging though these increases are 20% lower than the appraisal estimates. The significant production increases comprised wheat, barley and potatoes. Production of oilseeds showed a negative trend which, however, should be compensated for by the substantial increases in ghee and fruit production. Impact on livestock development was reportedly significant particularly the increases in number of stock, the production of milk and ghee, and the reduction of livestock mortality rates. The impact of the horticulture programme will take longer to be felt, however, production of early planted fruits has already started with reported strong demand still existing for seedlings. 8.4 The social impact is reported to be significant though it is difficult to measure. It includes more and better communications facilities and water supplies, and the improvement of health and educational levels in the rural hill areas. However, the health services require more medical equipment and drug supply, and more teaching material is needed in education. Some errors in siting of postal offices will need to be rectified. The project's environmental impact is expected to be minimal. Although the erosion control programme has been ecologically beneficial, it has been confined to the protection of the Dandeldhura-Patan road only. - 29 - 8.5 Finally, the project achieved its objectives in establishing infra- structural and institutional bases for sustaining project activities. Substantial programmes in agricultural training ano demonistrations. input supply and credit, fruit seedling distribution, livestock health services. and other activities were already HMGN financed during FY 86/87. FY87188 and FY 88/89. Building maintenance however remains a problem, especially in service centres outside district headquarters. Lessons Learned 8.6 The following are the main lessons that could be drawn from the experience of RD II. a) Rural development projects in remote h1ll areas require ir,ore time to reach full implementation strength and should therefore be designed for a longer duration, or in two phases. of which the first should focus on infrastructure development and training, while the second should be directly production oriented. b) As already appropriately contemplated in RD III, prcject resources and activities should be focussed on a smaller and more specific number of priority components and not "dispersed" over a wide range of sectors. c) Service centres are very useful in acceleratiiig agricultural development provided that they are strategically located and do provide adequate living and working conditions for their staff. d) Ore corner stone&of RDPs is the caoability of implemienlting phiysical infrastructure. especially buildings and commiiunication links on which othier project activities depend. This capability greatly depends on the timely establishment of adequate staff strength, especially overseers. which needs highest attenltion already at project preparation stage. Linked to this is the provisiorn of acequate staff accommodation which has been given low priority when actually implementirg this project. e) The absence of adequate quality control has been at the root of the poor delivery in civil works construction under the project and requires profound remedy through: - improved professional capabilities and strengtilieninig of supervisory authority of staff; - empowering of staff to oversee arid reject sub-stanidard materials, faulty works arid poor contractor perforimiance; - improvement of quality control procedures. accouLntability and monitoring; - standardization of materials. methiods. design arid construction. f) As demonstrated during the last project extension, it is possible to achieve substantial targets in infrastrumcture developimmemit in remote areas, once cominunication links are fUnctlonimig. the flow of funds is secured, a reasonable staff strength is maintained without - 30 - excessive turnover and if a strong leadership is exercised from the PC's office. g) The per hectare costs of "major" irrigation schemes have turned out to be excessive and far above those for minor hill terrace irrigation schemes, which confirms the experience of RD I and indicates the need for a more rigid scrutiny of scheme proposals followed by feasibility-level studies. Cost-effective and appropriate technology needs to be applied rigorously. h) Irrigation water users groups and committees should be established prior to scheme development and implementation should be made contingent upon the adoption by beneficiaries of a water charging system that ensures adequate coverage of 0 & M expenditures that would relieve HMGN from future involvement. i) Sustainability of project facilities and services, including 0 & M should be actively pursued as a major project objective of each component, especially those that are production oriented. j) Monitoring and evaluation is a fundamental requirement to generate continuity and progress in development activities. Although it needs a pivot point in the project office, actual field monitoring is the responsibility of line agencies, who therefore should provide the necessary facilities and expertise. ?*PJ SHUM) MM. IlVkIUIIXI IMUHr - IVWUALI MUIIJS l(tl.*-NIP) lpl<mataticrn Sduxiule of i<ai t2mp3mmts 1979/w8 1980/81 1981/8Z 19RV83 1983/84 19/B4r8 vis5/ab 1918687 19'7/8a 'rotal ltbm/Acvity unit. smR wcr sW MT S TAcr MR s ALI sm Ae r R s Cr A- IR FACI Mg-R ACr smR Ar sA1-1AL 1rriaio Sdins &xusxt.ui(m by~: A. trriqatLin Ibpartmut Ha 0 - NA - - - 675 I/ - - * 20 - 160 - 21 67o 250 B. Ilfl)/D - luxil teerracu sdwr. b 0 - 14 40 N4 69 NA 111 690 1/ 119 93 - 15 - 35 - 192 69D 673 & no terraa sdws iV (Tt.) HFllth Servwiams lWspita1:;2/ No. 1 - 1 - 7- - - - - - - - 733- - 2 - 3/t HSp,italSt1f dMrtAr- lb - 2 - - - 1 - - - - - - - - - 3 - - Puticirt. attJAlnt acxl M. ND . - 2 - - - 1 _ 2 - - - - 3 2 Dtstrict. hointh otfi,r Nl - 1 - 1 - 1 - - 1 1 - - - - - - 3 2 HlaltJ pmti MD - 5 - 6 - 6 4 6 1 2 4 - 2 - 4 - 6 25 21 tblthw pi stafl qamrtlrv. "D. - - 5 - 6 - 6 3 6 1 2 5 - 2 - 4 - 6 2 21 Fd2LdmazlM A. CA.t.nt.imn - IBgridiog ltwr :X'Kry rnftsol: No. 15 - 2D - Z) 12 :1 : 16 1( - - - - - - 1t0 8i - Uplndirig :xzxKry sdcmsi lb. - - 5 - 5 3 5 .t - - - - - - - 15 7 -Sr4xwbry ndxml horlAhs Nb. - - 1 - 2 - 2 - 1 - 1 - - - - - 2 5 4 B. Ttmdiszq aid .uqI ies - Prilury udxmlts Nn. 75 - I(1 62 1(1) 36 3fi 71) - - - - - - - 312 168 - lmrer uzvu ND. - - 15 - 20 10 Zi 29 ) - - - - - CA) .39 - SLury rmols NO. - - - - 5 - 5 7 5 - - - - - - - - - 15 7 _ _ _ . _~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~( 1979/80 1980/81 1981/82 1982/83 19R3/84 1984/R5 1985/86 1986/SZ 1987/88 TotI-1 Ita3t/Act viLty Unit SAR ACr SARl ACLT SAf tCT' SR ACr SAv Acr wi Acr S ACT SAi ACT SAI AC SAR ALT Paxtuyat DLk*wIiqmft CxmnsU-ixfUcn: - Di-Irict rYtI'smtas )i. 3 - - - - - 1 - 2 - - - - - - - 3 3 - Pa ntrtIumt tXm %) 6 - 6 - 7 - - 2 5 - 4 - 2 - 19 13 - TnAwlrsh ' rT"st Imjani ND. - 6 - - 7 - - - - - - 19 Trails and lBic.g.m ilf 6 :vrry tndalsi irprowuvrt IQ i (1 - - 97 - 62 '(X) 1/ 3I - 1' - - - - - 590 :347 Ct't - !1-nict't.i, of wrxie brtfl' NE). O) - 3 - 2 Ii 12t 1/ 7 8 - 7 12, 1 33 S/Szr;wn;lzrl bidcprr; Nn. U - - 2 191, 2 1 - 1 A) - / 19 26 w INmiu. tsmin ridl Wirk:; Stablia/Ifq" :ull quiley!; 1 1 3 .3 7 4 5 3 3 - 2 - - lb 19 StAblitvu larx ' (pil lir- 4 4 5 .5 7 6 6 2 - 3 - 2 - 1 2 ZI Muna--orV prraat - 1 NA 1 hA 1 W - - - - - - Nrf 3 Plantat ion IlI 13 3) 2S 79 51 60 :16 :16 - - - - 65 1 l( 160 1/ i.ilt %R .. 2, Pnm!ithus of b1m. *rily. I 3hs prvid*xd tJwrxmt INN prugri L. 4/ lhme werrn init.eatni tNxfort 1987 mul alxmt 8 wenr cxxpletcd ut 1918/89. NnWt: l1x mplim.mtat io sdwdul.' for uator mnWly t-.Ei3i hin mral tJx MTpOrtivd. I~ 11 4 ICD CD - 33 - Table 2 Page 1 NEPAL SECOND RURAL DEVELOPMENT PROJECT - MAHAKALI HILLS (CR.939 NEP) Summary of Physical Achievements 5AR Tgtal % Of Unit Target Achievements SAR July 88 I/ A. Agriculture Agricultural Develonment District Centres No. 3 3 100 Sub-Centres No. 22 19 77 Staff Quarters No. 90 23 23 Staff No. 376 373 99 Training - JT/JTA No. 303 70 23 AA No. 2,799 1,056 38 Demonstrations & Farmers Days No. 4,665 1,609 35 Credit & Input SupplV AC - Offices No. 3 3 100 - Warehouses No. 3 3 100 - Quarters No. 4 3 75 - No. of staff No. 13 17 130 Credit Institutions (Coop) - ADBN No. 3 3 100 - District Coop. Offices No. 3 3 100 - Warehouses No. 22 17 77 - Quarters No. 27 16 59 - Coop. Society Sub-centres No. 21 17 81 - No. of Coops. No. 21 17 81 - Managers No. 22 16 73 - Messengers No. 22 3 14 Trainina - Staff No. 22 16 73 - Farmers No. 500 823 165 Seed Mini-kits Programme - Paddy Ton 70 36 51 - Wheat Ton 223 183 82 - Maize Ton 81 - - Credit Reguirements (i) Insecticide - liquid Litre - 319 - - powder Ton - 8 - (ii) Fertilizers 2/ - Nitrogen MT - 290 - - Phosphorus MT - 197 - - Potash MT - 20 - -34 - TabLe 2 Page='2 Unit lar,et Achievements S Julv 88 1/ (iii) Irrigated Area - Paddy Ha 450 n.a. - - Maize Ha 350 n.a. - - Wheat Ha 350 n.a. - (iv) Seed Reguirements - Paddy Ton 26 25 96 - Maize Ton 5 2 40 - Millet, Ton 2 - - - Wheat Ton 40 142 355 - Vegetables Ton - 1 - Horticulture Prooramme 2/ Satbanj Station Expansion No. 5 1 20 Fruits Seedlings 22,850 79,325 347 Livestock Develonment Hospital (improvement) No. 1 1 100 Dispensaries (sub-centres) No. 21 22 105 Quarters No. 56 18 32 Staff No. 96 53 55 Vaccination (cattle/buffalo) Head 126,500 176,343 140 Animal Treatment Head - 148,877 - Parasite Control Head 126,500 222,817 176 Training (JT/JTA) No. 199 12 6 Farmers' Days Days 71 58 82 Farmers' Training No. - 312 - Irrigation Development ID - Construction Ha (net 675 250 l/ 37 District Schemes - Con- irrigable) struction & Improvement Ha 690 673 98 ID - Staff No. 10 8 80 B. Social Services & Infrastructure Water Supplv Office No. 1 1 100 Quarters No. - 3 - Improvement Works No. 225 128 57 New Schemes No. - 12 - Health Services Buildings - Hospital No. 2 4/ - Staff quarters No. 3 - - Attendant accommodation No. 3 4/ - - - OHO No. 3 2 67 - Health posts No. 25 21 84 - Health post quarters No. 25 21 84 ,Eauipment No. 21 16 76 - 35 - Table 2 Page 3 SAR Total % ot Unt Target Achievements $AR July 88 1,/ - Hospital No. 16 38 240 - OHO No. 8 56 700 - Health Post No. 63 121 190 Educati n Buildings - Improvement of schools No. 121 90 74 - Secondary school hostels No. 5 4 80 - Equipment No. 417 214 51 Panchavat Develooment Buildings No. 22 17 77 Staff No. 12 5 42 Radios No. 22 3 14 Postal Services Buildings No. 69 16 23 Staff No. 38 176 460 Cottaae Industry Buildings = Emporium No. 1 1 100 - District centres No. 3 3 100 - Sub-centres No. 2 2 100 - Quarters No. 24 2 8 Staff No. 10 10 100 Overseas Training No. 4 2 50 Credits NRs million 0.8 2.0 250 Cottage Industry Survey TA No. 1 - - n Local counterpart No. 1 - Trainees - Woollen works No. - 18Q Wooden works No. - 20 Cotton weaving No. - 188 Dressmaking No. - 65 Others (bamboo) No. - 243 Total 704 Trails and Bridges Trail Improvements Km 590 347 59 Suspended/Suspension Bridges No. 19 *26 137 Wooden Bridges No. 126 33 26 Soil Conservation/Erosion Control Buildings - offices No. 3 3 100 - quarters No. 10 3 30 - 36 - TabLe 2 Page 4 SAR Total %. of Unit Target Achievements SAR July 88 I/ Vehicles No. 2 3 150 Staff No. 13 10 70 Erosion control works - Stabilization of gulleys No. 38 45 118 - Nursery No. - 3 - - Plantation Ha 160 225 141 C. Proiect Administration DTO & Project Coord. Office Buildings Offices - DCO No. 1 i/ 1 100 - OTO No. 3 3 100 Quarters - DCO No. 37 3 &/ 8 -DTO No. 3 1 i/ 33 Transoort - 4-wheel vehicles No. 3 3 100 - Motorcycles No. 6 5 83 - Horses No. 10 4 40 Staff - OTO No. 25 22 88 - DTSU No. 22 23 105 Monitorina & Evaluation Staff - Full-time No. 5 16 320 - Part-time No. 11 0 - Technical Assistance Foreign personnel Man-yr 9 10 111 Consultant services Man-yr 3 NA - Vehicles No. 2 2 100 Fellowships (overseas) Man-yr 12 2 17 Study tours Man-months - 35 - 1/ A. Mainly because of the onset of the monsoon some of the works programmed to be implemented during the project extension 1987/88 could not be completed by July 1988. However, as the spill-over into FY 88/89 was not very significant and was completed soon after the monsoon, such deferred completions were treated as achieved by July 1988. B. Staff strength and training activities have seen further expansion in 1987/88 but as these were achieved under HMGN financed prograinines they have not been included in the total achievements quoted. Z/ Estimated in terms of hectares in SAR. ./ About 50 ha would still need to be fully developed, either new or rehabilitated due to defective structures. 4/ HMG constructed two hospitals. 5/ Located at Patan and including training centre. 6/ One quest-house and one staff-quarters. 2/ Two districts: Darchula and Baitadi, are occupying the same building as staff-quarters. NEPAI SECONO RURAL DEVELOPMENT PROJECT NAHAKALI HILLS (CREDIT 939-NEP) Physical Achievements of the Aaricultural Inputs Corporation (AIC) Total as at Total as Progr _ SAR Target Dandeldhura Baitadi Ourchula July 1987 1J S of SAR A. Civil Works District offices (No.) 3 1 1 3 100 Warehouses (200 ton) (No.) 3 1 1 1 3 100 Staff quarters (District) (No.) 3 1 1 1 3 100 Watchman's quarters (No.) 3 1 1 1 3 100 B. Inout distribution/sales _/ Fertilizer sales (mt) - - 600.1 2.14 677.6 Insecticides - powder (ut) - - 3.70 0.89 8.41 liquid (mt) Improved seed: Paddy - 2.3 14.0 7.6 23.9 Wheat - 8.4 90.1 43.8 142.2 Maize - 0.7 0.1 1.2 2.0 Vegetable - 0.4 0.2 0.2 0.8 Source: AIC. 1/ Since FY 1987/88 the programme is supported by HMGN. 2/ Expressed in SAR in terms of cost/ha of various inputs for various crops at recomended rates. Since these vary between rainied and irrigated crops, comparison between targets and achie.ements becomes extremely difficult. HEPAL SECOND RURAL DEVELOPMENT PROJECT NAHAKALI HILLS (CREDIT 939-NEPI Horticulture: Saplings Distributed by Year Type of Frult 1980/81 198118 1982783 198314 1984185 1985786 11 Tal Apple 3,554 4,292 7,965 8.710 10.163 5.285 39,964 Pear 366 508 618 563 309 502 2.866 Peach 595 457 534 609 640 696 3.531 Apricot 140 78 388 425 658 494 2.183 Plum 157 228 94 187 149 101 916 c Walnut 2,924 2.919 4.302 3.306 2.394 1,946 17,791 Almond 420 17 - - - 198 635 Others 1.389 1.321 2,364 2.346 2.434 1,580 11,434 Total 9,545 9,820 16,265 16.146 16.747 10,802 79.325 Source: N & E Unit. ROP II. 1/ Since FT 1986/87 the progrime Is supported by NGN. v HEPAL SECOND RURAL DEVELOPMENT PROJECT NAHAKALI HILLS (CREDIT 939-NEPI Comparison Between Anpraisal Cost Estimates and Actual Costs Aporaisal Cost Estimates Actual Cost Actual as X of SAR "Rs eil1n USS oilln NRs ohilin USS iion mil lio Acr1cultur Agricultural Development 14.65 1.23 14.93 0.86 102 70 Credit and Input Supply 12.IS 1.02 15.33 0.89 126 87 Horticulture Development 1.00 0.08 0.95 0.06 95 69 Livestock Development 6.61 0.55 8.42 0.49 127 85 Irrigation Development 18.70 1.57 25.33 1.47 135 94 Sub-Total S3.11 A.45 64.963712QI Social Service and Infrastructure '
Группа Всемирного банка · Project Completion Report
Nepal - Second Rural Development (Mahakli Hills) Project
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