Morocco - Large-Scale Irrigation Improvement Project

Docement of The World Bank FOR OFFICLIL USE ONLY Report No. 14445 PROJECT COMPLETION REPORT MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) MAY 4, 1995 Agriculture Operations Division Maghreb and Iran Department Middle East and North Africa Regional Office This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  PROJECT COMPLETION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) CURRENCY EQUIVALENTS Currency Unit = Dirham (DH) US $ 1.00 = DH 10.00 DH 1.00 US $ 0.10 WEIGHTS AND MEASURES The metric system is used throughout this report GOVERNMENT OF KINGDOM OF MOROCCO FISCAL YEAR January I - December 31 GLOSSARY OF ABBREVIATIONS ASAL Agricultural Sector Adjustment Loan CMV ORMVA Local Development Centers (Centre de mise en valeur) CNCA National Bank for Agricultural Credit (Caisse nationale de credit agricole) DEAR MARA's Central Department for Agricultural Training and Research (Direction de 1'enseignement agricole et de la recherche) DER MARA's Central Department for Rural Construction (Direction de l'equipement rural) DPA MARA's Provincial Directorate for Agriculture (Direction provinciale de l'agriculture) DPAE MARA's Central Department for Planning and Economic Affairs (Direction la planification et des affaires economiques) DPV MARA's Central Department of Crop Production (Direction de la production vegetale) FERTIMA National Fertilizer Marketing Company INRA National Institute for Agricultural Research (Institut national de la recherche agronomique) MARA* Ministry of Agriculture and Agrarian Reform (Ministere de l'agriculture et de la reforme agraire) MIPs Management Improvement Plans ORMVAs Regional Agricultural Development Offices (Offices regionaux de mise en valeur agricole) SAGI Secretariat for the Improvement of Large-Scale Irrigation (Secretariat a l'Amelioration de la Grande Irrigation) * The current name of MARA is MAMVA (Ministere de l'agriculture et de la mise en valeur agricole)  FOR OFFCIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluation May 4, 1995 MIMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report on Morocco Large-Scale Irrigation Improvement Project (Loan 2656-MOR) Attached is the abovementioned Project Completion Report. Parts I and III were prepared by the Middle East and North Africa Regional Office. No Part 11 from the Borrower has been received. This sub-sector project was to finance specific civil works for maintenance and upgrading (43 percent of base costs), and vehicles and equipment for improving O&M (27 percent) on Morocco's 9 large irrigation projects. The project had major sectoral reform objectives reflected in 45 legal covenants. These included devolution of authority and specific functions to regional agricultural development offices (ORMVAs), and from ORMVAs to irrigators and private service providers. The project also proposed recurrent cost financing (13 percent) and anticipated that irrigators would make on-farm investments (9 percent). More efficient irrigation would waste less water, delivering more to plants, thus increasing production. Future maintenance savings were to be a major benefit. Civil works expenditures were 2.4 times projections; vehicles and equipment expenditures, 1.5 times, but the PCR says nothing about the relationship between agreed and actual works or about the rationale for changes. Whether on-farm investments were made is unknown, so total project expenditures are not known. The PCR reports disbursement problems due to the Borrower's unfamiliarity with Bank procedures, despite its years of successful irrigation borrowing. Little of the slated sector reform occurred. Most ORMVAs did not make management improvement plans. Some divestiture of ORMVA services was achieved, mainly to sugar factories. Cost recovery and contracting out maintenance increased but was far short of targets. Four covenants of the utmost importance-those related to water users' associations, program contracts, management information systems, and water-charge revision-were not honored. Only 29 percent of the participation tax was collected. The coordinating committee never met. The mid-term review was cancelled. Audit reports were received extremely late. Due to weak monitoring and accounting, it is not possible to identify the effects of specific project actions. Nevertheless, the PCR reports general increases in production and farm income due to higher-than-expected price increases, concluding that the project rate of return might be close to the estimated 26 percent level. The PCR's assertion of possible high returns is not supported by evidence. The project's general failure to achieve institutional reform goals should not be excused because it has provided an opportunity for officials to develop a positive attitude towards decentralization and project ownership which have established good management foundations for the success of the second phase. While many of this project's goals may well be realized by its successor, the project outcome is rated as unsatisfactory, sustainability as uncertain, and institution building as modest. An audit is planned. 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 OFFICIAL USE ONLY PROJECT COMPLETION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) Table of Contents Page No. PREFACE ..................................... i EVALUATION SUMMARY .......................... PART I. PROJECT REVIEW FROM THE BANK'S PERSPECTIVE I 1. Project Identity. 1 2. Project Background .1 3. Project Objectives and Description. 2 4. Project Desin .4 5. Project Implementation. 5 6. Project Results. 7 7. Project Sustainability .11 8. Bank Performance .11 9. Conclusions and Lessons Learned .12 10. Borrower Performance .......................... 13 11. Project Documentation and Data ..................... 14 PART II. PROJECT REVIEW FROM THE BORROWER'S PERSPECTIVE . . 15 PART III. STATISTICAL INFORMATION ....................... 16 1. Related Bank Loans ............................ 17 2. Project Timetable .............................. 19 3. Loan Disbursements ............................ 20 4. Project Costs ................................. 21 5. Project Financing .............................. 22 6. Status of Legal Covenants ......................... 23 7. Missions ................................... 27 8. Staff Inputs .................................. 28 9. Project Results ................................ 29 10. Project Implementation .......................... 31 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.  I~~ ~~ ~~ ~~ ~~ ~~ ~~ ~~ ~~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I~~~~~~~~~~~~~~~ I I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I I~~~~~~~~~~~~~~~~ I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~  i PROJECT COMPLETION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) PREFACE This is the Project Completion Report (PCR) for the Large-Scale Irrigation Improvement Project, for which Loan 2656-MOR in the amount of US$46.0 million was approved on February 25, 1986. The Loan became effective on January 6, 1987 and closed on June 30, 1993. Actual disbursements totalled US$46.0 million or 100% of the originally approved Loan amount. This PCR (Parts I and HI) was prepared by the Agriculture Operations Division of the Middle East and North Africa Regional Office on the basis of a country visit in March 1994, a draft completion report and progress reports prepared by the Borrower, the Staff Appraisal Report, the Loan Agreement and a study of the files.   iii PROJECT CONMPLETION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) EVALUATION SUMMARY Objectives and Description The Project's overall objectives were to provide for greater efficiency of existing resource utilization and for improved management and financial performance of 400,000 ha of large- scale irrigation (LSI) schemes managed by the nine ORMVAs. The Project also sought to further divestiture those ORMVA agricultural services which would be better provided by the private sector. Specifically, the Project sough to: (a) improve irrigated water resource efficiency through selected rehabilitation works which would increase on-farm water availability by some 25% in 150,000 ha of irrigation networks to be improved under the Project; (b) improve operations and maintenance (O&M) conditions in all LSI schemes in order to avoid repeated investments for rehabilitation; (c) stimulate crop and livestock production by increasing on-farm irrigation water -- this was expected to increase cropping intensity in sub-project areas from 113% at appraisal to a projected 135% at full development; (d) improve ORMVA organization and management efficiency; (e) transfer various activities and services to the cooperative sector; (f) increase the ORMVAs' financial autonomy, thereby reducing the need for budgetary support by the Government; and (g) help the Government to continue improving the cost recovery rate of the irrigation sub-sector. Implementation Experience and Results The Loan became effective on January 6, 1987. During the first years of Project implementation, delays were caused by: a) the need to finish technical studies; b) the conclusion of work, equipment, and study contracts; and c) the resolution of technical problems experienced in infrastructure work. Overall coordination of Project activities between the nine ORMVAs and the Ministries was to be carried out by the National Project Coordination Committee (Comite National de Coordination du Projet - CNCP), created in 1985 and presided over by the Minister of MARA. The Committee never met, contrary to the Loan Agreement, and was eventually replaced by a coordinating entity from MARA, the Secretariat for the Improvement of Large-Scale Irrigation (Secretariat a l'Amelioration de la Grande Irrigation - SAGI). This lighter entity finally provided a better and closer coordination of the project than the higher level but unfocused CNCP. It was anticipated that an extensive study would be carried out in order to implement a Management Information System (MIS) in each of the ORMVAs. By Project closing, only three ORMVAs (Doukkala, Gharb and Tadla) were beginning to implement the MIS recommendations. Two ORMVAs (Doukkala and Tadla) signed Management Improvement Plans (MIPs) with the Ministry of Agriculture.  iv Due to delays incurred by the MIS study and to weaknesses in the existing monitoring systems, Project management, as well as the ORMVA directors, lacked viable indicators which would permit the monitoring of Project implementation. The actual monitoring data are not readily comLparable from one ORMVA to another. Thus, the resulting delays in the implementation of the MIS and the Monitoring and Evaluation (M&E) system could have negative repercussions for the second phase of the Project (LSII-2) due to the lack of background data for the latter. The transfer of ORMVA services to the private sector has been generally slower than anticipated. The mid-term review scheduled for mid-1989 did not take place. It was replaced, by mutual agreement, with a normal supervision mission. The ORMVAs were not audited in a coherent and satisfactory manner. For the first three years of Project implementation, each ORMVA had its own audit carried out. Since 1988, organization and monitoring of audits have been centralized under MARA, but delays in auditing still persist. The MIS facilitated the standardization of audits and the establishment of more adequate accounting systems. At Loan closing, 18 of the 45 covenants contained in the Loan Agreement were honored on or before the established deadlines, 15 covenants were complied with after the deadlines had been extended, and 12 covenants were not fulfilled at all. Among the unfulfilled covenants, four clauses (Water Users Associations, Program Contract, Management Information System and Revision of Water Charges) are most important for the whole subsector and should have been enforced strictly. The 12 covenants have been incorporated into the Loan Agreement for the second phase of the Project (LSII-2). Sustainability Changes at the institutional level. After initial resistance from the ORMVAs, significant positive attitude changes took place over the course of Project implementation, both at the central level (inter-ministerial dialogue and decentralization) and at the ORMVA level (cost awareness, significance of the private sector, ORMVA reorganization to stimulate interdisciplinary cooperation). These positive changes in attitude and management methods are examples of the sustainability of Project improvements. Organizational reforms within MARA and the ORMVAs have been completed and are now operational. Regarding water management, irrigation systems are better managed now than they were at the beginning of the Project, and farmers contribute more to O&M costs. However, it is necessary to improve the rate of water fee recovery and to analyze whether the actual maintenance costs of the irrigation systems are sufficient (Para. 6.4). As for agricultural production, yields are increasing and will reach established targets, due to improved distribution of water, better input utilization, and improved cropping methods. However, outputs fell in 1993 due to drought and water shortage in certain perimeters. In Tadla, Souss-Massa, and Ouarzazate, there are also soil salinization problems. At the economic level, water consumption has improved at the farm level (+21% instead of an estimated 27%). However, a USAID-financed project in Tadla assumed that farmers still waste about 50% of available water. Financially, operations subsidies have been reduced, but ORMVA cash flows are weaker than anticipated. An effort to streamline ORMVA financial management is being extended to the second phase of the Project.  v In terms of environmental impact, Project actions have not damaged the environment. Infectious diseases such as bilharzia, which were identified during appraisal, have not increased. However, malaria seems to be on the rise. The second phase of the Project includes an enm-onmental monitoring component. Findings and Lessons Learned The Project consisted of two principal objectives: management improvement and rehabilitation of large-scale irrigation systems in conformity with Government's policy of decentralization and divestiture. Despite considerable initial delays, the Project achieved its physical objectives, thereby demonstrating the Borrower's ability to carry out the technical aspects of the Project. Institutional goals were only partially met: a) Government's administrative and financial control over the ORMVAs have not decreased as much as anticipated; b) ORMVA divestiture vis A vis the private sector has been partially carried out; c) management systems have barely been implemented during the Project; this component will be carried out during the second phase of the Project. The Project has provided an opportunity for officials at all levels to develop a positive attitude toward decentralization and project ownership. However, the Project's financial results have not achieved the results estimated at appraisal. It can thus be considered as having established good management foundations for the success of the second phase, but this success also depends on the ability of the ORMVAs to sustain their efforts at financial management during the Project's second phase.   1 PROJECT COMPLETION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) PART I: PROJECT REVIEW FROM THE BANK'S PERSPECTIVE 1. Project Identity Project Name: Large-Scale Irrigation Improvement Project Loan No.: 2656-MOR RVP Unit: Middle East and North Africa Region Country: Morocco Sector: Agriculture Sub-sector: Irrigation 2. Project Background 2.01 The Project was identified in March, 1984 by a Bank mission. It aimed at increasing cost recovery and productivity of large-scale irrigation schemes in Morocco and at institution-building and rehabilitating infrastructure. In the 1970s inadequate cost recovery was a major issue; by the mid-1980s amendments to cost recovery legislation and sizeable increases in irrigation water and pumping charges had contributed to improving the situation. The Large-Scale Irrigation (LSI) Project proposed to reduce some of the impediments to organizational efficiency and cost recovery by improving operations and maintenance (O&M), increasing ORMVA revenues for better funding of O&M, improving collection of water charges, and reorganizing extension services. The Project followed several successful irrigation projects in Morocco, among them the Sebou I Project (Loan 643-MOR), the Doukkala I and II Projects (Loans 1201-MOR and 1416-MOR, respectively), and the Souss Groundwater Project (Loan 1123-MOR). 2.02 Policy and sector context. To accelerate the modernization of Moroccan Agriculture, the Government has provided considerable support for the development of irrigation. The share of irrigation in public investments has been high, although it has declined since 1980, reflecting a shift in Government policy towards a more balanced sectoral approach to agriculture in favor of the rainfed and small and medium-scale irrigation (SMSI) sub-sectors. More than 65% of agricultural investment expenditures during the seventies were for LSI. Under the 1981-85 Plan, this rate was reduced to 53 %. As a result of the stringent budgetary situation in the mid-1980s, yearly construction rates of new irrigation schemes slowed to about half of what had been recorded during the previous decade: 8,000 ha/year from 1980-1985, compared to 16,500 ha/year in the 1970s. 2.03 The Government introduced substantial changes in its irrigation development policy under the 1981-85 Plan. After a policy mostly oriented towards continued expansion of irrigation in new areas and Government support and intervention in the irrigation sub-sector, Government's objectives gradually shifted towards: (a) ensuring optimal use of water through maintenance;  2 (b) allocating a larger share of investments for the development of small- and medium-scale irrigation schemes than in the past based on their lower development cost per hectare and their more rapid build-up of benefits; (c) favoring investments in those LSI areas which are serviced by existing dams; (d) Increasing farmers' contribution to water management and to recovery of O&M and investment costs; and (e) establishing more effective extension services to improve cropping patterns, agricultural farming practices and water saving technologies. A review of the agricultural development program launched since 1981 confirms that Government has begun shifting its efforts toward these new objectives, a trend continued under its Sector Adjustment Program (1985-1990). 2.04 Specifically, irrigation sub-sector objectives of the Government's Sector Adjustment Program are described in the Government Statement on Irrigation Policy, which was prepared at the time of ASAL. They are: (a) reducing the Government's administrative and financial control over the ORMVAs in order to expedite contracting, regularize the flow of financial resources, establish revolving funds to undertake urgently needed maintenance, and introduce of a system of contractual maintenance; (b) establishing a system of medium-term contracts between the Government and each ORMVA; (c) improving the ORMVAs' financial autonomy by introducing user fees to gradually recover the full cost of ORMVA commercial services, while transferring to other organizations those commercial services for which the private sector or cooperatives are ready; and (d) improving cost recovery levels in order to reduce the total budgetary support to the ORMVAs. Measures to achieve these objectives were to be taken under the project. 2.05 Despite continuous improvements and the generally high performance levels attained, the potential of Moroccan irrigated agriculture is still far from being fully realized. Although water and land use intensities are relatively high compared to countries with a comparable rainfall pattern, there is still room for improvement within the existing schemes. Average irrigation water use represents 80% of available water resources. Cropping intensity was 113% at appraisal and has been projected to reach 135 % at full development. This offers scope for increases in productivity through low-cost investments, improvements in water availability through better water management, O&M and farming practices. Average yields have steadily increased but can be further improved, as has been demonstrated in areas where higher levels of maintenance and rehabilitation have already been ach ieved. 3. Project Obiectives and Description 3.01 The Project's overall objective was to provide for more efficient use of existing resources and to improve management and financial performance of the 400,000 ha of large-scale irrigation schemes managed by the nine ORMVAs. The Project also sought to further ORMVA divestiture from services which are better provided by the private sector. Specifically, the Project aimed at: (a) improving water resource utilization through selected rehabilitation works which would increase on-farm water availability by some 25% in the 150,000 ha of schemes to be improved under the Project; (b) improving O&M conditions in all LSI schemes in order to avoid repeated investments for their rehabilitation; (c) stimulating crop and livestock production by increasing on-farm irrigation water -- this was expected to increase cropping intensity in the sub-project areas from 113% at appraisal to 135% at full development; (d) improving ORMVA organization and management efficiency; (e) transferring various activities and services to farmers' organizations and to the private sector; (f) increasing ORMVA financial autonomy, thereby reducing the need for budgetary support  3 from the Government; and (g) helping the Government to continue cost recovery improvement in the irrigation sub-sector. 3. 0E To achieve its objectives, the Project carried out the following actions over a six-year period: (a) an Investment Component, including: - rehabilitation or renovation of the existing irrigation infrastructure, serving a total area of about 150,000 ha; - improvement of O&M systems over 400,000 ha of LSI schemes through multi- year contracts with specialized firms for major complex maintenance works and purchase of basic O&M equipment, including earthmoving equipment, spare parts and telecommunications equipment; and - purchase of vehicles and data processing equipment, and construction of housing for key O&M staff. (b) a Technical Assistance and Training Component, including; - technical assistance for management support and studies; and - training of ORMVA personnel, especially O&M staff, mechanics, accountants, and other M&E staff. (c) an Institutional and Policy Reform Component, which would: - improve O&M efficiency, ORMVA-Government relations, and the ORMVAs' financial situation; - improve recovery of water fees and transfer commercial services to the private sector and cooperatives where feasible; - increase farmer participation in O&M; and - help resolve problems caused by water rights and collective land issues in the LSI areas. (d) On-farm Investments. 3.03 Project management. Overall coordination of project implementation and institutional development was designed to be implemented at the national level by a National Project Coordination Committee (CNCP), created in November 1985 to monitor progress in project implementation and institutional and policy reforms; review work programs and progress; resolve problems involving different Government departments; review medium-term ORMVA development plans and MIPs; and recommend any additiohal measures for the improvement of the ORMVAs' managerial, operational, and financial situations. It was chaired by the Minister of Agriculture and included ORMVA  4 directors, MARA's central directors and representatives of the Ministries of Finance, Interior, Equipment, Commerce and Industry and Economic Affairs. It was scheduled to meet at least every six months. Since MARA's Rural Construction Department (DER) was to be involved in the largest part of project activities, it assumed the Secretariat of the National Project Coordination Committee. However, the CNCP never met and was replaced by an alternative entity within MARA, the Secretariat for the Improvement of Large-Scale Irrigation (SAGI). 3.04 The DER was responsible for the overall monitoring of Project implementation, including physical, institutional and policy components. It acted on behalf of MARA in dealing with other ministries, discussing and implementing Project components, and ensuring the timeliness of decisions taken. It was responsible for monitoring preparation by the ORMVAs of semi-annual progress reports and for synthesizing these reports in an overall report submitted to the Bank. In addition, MARA's Department for Planning and Economic Affairs (DPAE) prepared annual reports for submission to the Bank on the implementation of the ORMVAs' medium-term plans and MIPs. 3.05 The Project included four components of common interest to all ORMVAs. These were: (a) training; (b) planning/management systems and computer use; (c) operations and maintenance; and (d) cropping patterns. These activities were coordinated among the ORMVAs and between them and MARA because they involved sectoral options that needed to be approved by MARA. To ensure this coordination, four coordinating units were created to execute each component, respectively. The training unit was created within MARA's Department of Agricultural Training and Research (DEAR); the unit for planning/management systems and computer use within MARA's Department of Planning and Economic Affairs (DPAE); the O&M unit within MARA's Department of Rural Construction (DER); and the cropping patterns unit within MARA's Department of Crop Production (DPV). The staff of each unit included two to three persons seconded from the ORMVAs. The work of these units was submitted to the appropriate central departments within MARA. 3.06 Project cost and financing: At appraisal, total project cost, including taxes and duties of about US$19.5 million (DH 195 million), was estimated at US$92.5 million (DH 925 million), of which US$43.2 million (DH 432 million) was in foreign exchange. The Bank Loan of US$46.0 million was to finance 100% of the foreign exchange cost of the project, excluding incremental on- farm investments financed by the beneficiaries (US$2.4 million) and CNCA (US$5.7 million). The balance of funds was to be provided by the Government. The Bank Loan was thus to finance 50% of the total project cost. It was to be made to the Government and utilized by MARA, passed on as a grant to the ORMVAs (US$81.8 million) to the coordination units (US$2.6 million), and to the farmers (US$8.1 million). 4. Proiect Design 4.1 Close collaboration was established at the time of Project design (1984) between the Government of Morocco (GOM), the FAO-CP, and the World Bank. The Project was designed within the context of the Agricultural Sector Structural Adjustment Program (1984) and the Government's Policy Report on development issues (which devotes an annex to the irrigation sector). Project objectives and implementation means were clearly defined, shared, and deemed appropriate by the parties involved.  5 4.2 The technical design of the rehabilitation works was carried out by MARA's Central Department of Rural Construction (DER). Cost and duration of certain works were underestimated at the time of appraisal. The institutional support component, especially the Management Information Syst;:ms (MIS), was designed by Govermnent staff with some technical assistance. Project implementation demonstrated the relevance of the component's technical concepts to the issues at hand. However, a distinction between technical steps (implementation of the accounting systems) and institutional steps (organization, legislation, program contracts) would have been extremely useful. 4.3 However, Project design did not foresee such problems as: a) the difficulty of changing the attitudes of the ministries, the ORMVAs, the State-run processing industries (sugar refineries), and the farmers in favor of Government divestiture and decentralization and ORMVA divestiture and management streamlining; and b) the weakness of the current M&E systems, both in the ORMVAs and at DER. Initial resistance to changes eventually hampered implementation of the Project's institutional component, especially the MIS studies (para. 5.3). The weakness of the M&E systems did not permit the identification of management indicators, nor did it provide for a means to measure farmers' income. Finally, it did not isolate Project actions from other ORMVA activities, which would have permitted the calculation of a rate of return.- 5. Proiect Implementation 5.1 The Loan became effective on January 6, 1987, nine months after it was signed. The delay was caused by the need to clarify the clauses concerning ORMVA organization and agreements with the National Agricultural Credit Bank (CNCA). At the beginning of Project implementation, delays were experienced in: a) completion of various technical studies; b) contracts for works, equipment, and studies; and c) resolution of certain technical problems during the construction of infrastructure. By mid-1990, three and one-half years after approval, the Project had only drawn 30% of the Loan, instead of an expected 42%. 5.2 General Project coordination between the nine ORMVAs and the Ministries should have been supervised by the National Project Coordination Committee (CNCP), created in 1985. Although the committee was not dissolved, it never met, contrary to the Loan Agreement. The non- utilization of this interministerial coordinating mechanism has caused several Project delays, especially: a) establishment of legislation governing the signing of Management Improvement Plans (MIPs) with the ORMVAs, resolution of the collective lands issue, clarification of the statutes of the ORMVAs and their personnel; and b) MIS implementation. CNCP was replaced by a coordinating entity within MARA, the Secretariat for the Improvement of Large-Scale Irrigation -- SAGI (Secretariat a l'Amelioration de la Grande Irrigation). In spite of insufficient authority to promote timely policy implementation, SAGI has been successful in ensuring an excellent close coordination of project activities that the higher level and unfocused CNCP could not provide. However, since Government's divestiture policy stresses the importance of attitude changes, it is possible that the delays incurred have allowed attitude changes, thus providing a basis for reforms carried out at the end of the Project. 5.3 A comprehensive study had been planned in order to implement a MIS in each ORMVA. This should have permitted the establishment of a general accounting system, a training program, and performance indicators for M&E and for the MIPs signed between Government and the ORMVAs. This study should have been finished by the end of the second year (1988) for three  6 ORMVAs and by the end of the third year for the remaining six ORMVAs. By Project closing, only three ORMVAs (Doukkala, Gharb and Tadla) had signed MIPs and two (Doukkala and Tadla) had begun implementation of MIS recommendations. Delays were caused by a lack of coordination in deif;.ing MIS priorities and needs, slowness in publishing adequate regulations, hiring and training personnel, procurement and delivery of computer equipment. 5.4 Due to the delays incurred for the MIS and the shortcomings of existing M&E systems, the Project office and ORMVA directors lacked the indicators needed to measure the effectiveness of Project actions. It is also extremely difficult to compare data between one ORMVA and another. The delays in the implementation of MIS and M&E instruments which rely on MIS data could have negative repercussions for the second phase of the Project (LSII-2). 5.5 Transfer to the farmers' organizations and the private sector of services formerly provided by the ORMVAsl/ has, for the most part, been slower than anticipated. For both technical and administrative reasons, the ORMVAs, which are responsible for providing water to industrial crops (about 68,000 ha of beets, sugar cane, and cotton), had greater difficulty in disengaging themselves from agricultural services in cases where the processors were state-run enterprises (Loukkos, Tadla) rather than private firms (Doukkala). 5.6 The Mid-Term Review scheduled for mid-1989 never took place. Instead, it was replaced, by mutual agreement, by a routine supervision mission. This review might have revealed the principal causes of delays and might also have brought together the Project's principal donors in order to resolve problems. It had been anticipated that the farm investment component would be financed by an estimated US$8.1 million from CNCA. CNCA's cumbersome procedures did not facilitate the implementation of this component which, however, does not seem to have been monitored during Project implementation and does not appear in any supervision reports. Some investment was made by farmers, but it is impossible to determine the amount. 5.7 The ORMVAs were not audited in a standard, coherent manner before the Project. For the first three years of Project implementation, each ORMVA had its own audit carried out. Problems arose, including delays, methodological inconsistency, lack of audit credibility, and insufficient data. Since 1988, audit operations have been centralized under MARA. However, delays persist. Audit coverage has been extended to include ORMVA performance. After seven years, auditor recommendations are still not followed. MIS implementation will facilitate auditing through the establishment of adequate accounting systems. 5.8 By Loan closing, 18 of the 45 covenants contained in the Loan Agreement were honored by the deadlines specified, 15 were complied with after the deadlines had been extended, and 12 covenants remained unfulfilled. Among the covenants not complied with, four are of the utmost importance for the irrigation sub-sector: water users associations, program contract, management information system and revision of water charges. These four covenants should have been enforced in a stricter manner. The 12 unfulfilled covenants have been incorporated into the Loan Agreement for the second phase of the Project (LSII-2, Loan 3587-MOR). I Includes sale of agricultural inputs, equipment, e,nd veterinary products; soil cultivation; insemination services; and provision of advisors for cooperative management.  7 5.9 Disbursement problems were frequent during the first years of the Project due to the Borrower's unfamiliarity with Bank procedures. The first withdrawal application was sent to the Bank 18 months after Loan effectiveness. There were also delays in counterpart funds, which caused delays in Project implementation at several construction sites. 5.10 Rehabilitation costs were higher than anticipated due to low estimates at appraisal, contracting delays, technical implementation problems, and failures on the part of contracting firms. Average rehabilitation cost varies considerably from one ORMVA to another and is estimated at 3,400 DH/ha (compared to 2,750 DH/ha estimated at appraisal). By Loan closing, the entire amount of the Loan had been disbursed. 6. Project Results 6.1 General LSI sector activities. Project officials agreed unanimously that the Project: a) underlined the need for Government to increase its support of the LSI sub-sector; and b) stressed the improvement of ORMVA management through decentralization and transfer of responsibility, active participation of farmers, and involvement of the private sector. The development of new attitudes favoring institutional changes has been recognized and appreciated by all levels. This is an achievement both for the Project and for LSI development as a whole. The level of success is not easy to quantify. Due to insufficient and heterogeneous monitoring data at both ORMVA and central levels, the statistical data contained in this report can only be considered as possible trends. A simple but effective monitoring system for financial and economic indicators should be implemented during the Project's second phase. 6.2 Government divestiture of ORMVA operational costs. Government subsidies for operational costs, in current public accounting terms,2/ have dropped from 191 million DH in 1986 to 114 million DH in 1993 (-28%), based on 1985 DH values. Excluding Ouarzazate and Tafilalet, which do not collect water revenues, operating subsidies to the ORMVAs have dropped from 144 million DH in 1986 to 62 million DH in 1993 (-45%). Although calculations do not appear in the Staff Appraisal Report, the decline appears to be less than anticipated (Para. 6.3). 6.3 Transfer of mana2ement responsibilities to the ORMVAs a) ORMVA organization. Each ORMVA now has an organizational chart which includes the services planned during Project appraisal. Following ORMVA divestiture, services to farmers and extension services were better focused. However, the number of ORMVA personnel remained constant during this period; b) Management tools. Following the delays in the MIS studies (Para. 5.3), only three ORMVAs (Douklcala, Gharb and Tadla) had implemented the recommended management systems (inventory, analytical and general accounting, management and performance indicators) before Project closing. The remaining ORMVAs will carry 2/ Subsidies for maintenance costs (supplies, occasional labor, contracts) and energy for pumping stations are currently budgeted to equipment instead of operations.  8 out the MIS study during the Project's second phase. At the time of Project closing, none of the ORMVAs were able to furnish MIS-based information for Bank review. c) Personnel training. Personnel employed in those services which were divested by the ORMVAs (Para. 6.5) have been reemployed by the ORMVAs in other capacities. An important technical training program was launched (mechanics, production techniques, accounting, and computers). Management has thus far considered training to be more of an awareness-building process than a hands-on experience. In spite of the delays in implementation of the MIS, which was originally designed to coordinate training, an estimated 1,000 staff members were trained (83 % of the estimated number). Due to outdated personnel regulations, the ORMVAs have had difficulty in hiring and keeping competent staff, especially in the areas of accounting and computers. This has resulted in a decrease in the number of qualified staff. d) Management Improvement Plans between Government and the ORMVAs. These contracts are designed to accelerate Government's policy of decentralization and divestiture, Of the nine ORMVAs, two (Doukkala and Tadla) signed MIPs with the Government five months before Project closing. Due to poor management systems and lack of monitoring indicators, it is difficult for the supervising Ministries (Agriculture and Finance) to monitor Project progress. No reform of personnel management, which is regulated by a provisional statute dating from 1975, has been undertaken. Nevertheless, the two MIPs will serve as the basis for the establishment of similar arrangements between the remaining ORMVAs and the Government during the Project's second phase. e) Autonomous financial management. At the beginning of the Project, all investments for civil works, equipment, and studies above 500,000 DH, 300,000 DH, and 200,000 DH, respectively, required prior approval by the Ministries of Agriculture and Finance. These ceilings have been raised to 2.5 million DH, 750,000 DH and 500,000 DH respectively, as was advocated during appraisal. Nonetheless, ORMVA autonomy from the Ministry of Finance is only nominal, as the Agent of the Bureau of Accounting (a Ministry of Finance official) is the only person entitled to make and receive payments. This is the case even in the ORMVAs which have signed MIPs with the Government (Article 3.2 of the MlPs). f) ORMVA financial statements. Financial statements provided by the ORMVAs are only budgetary statements (comptabilite budgetaire), incomplete and frequently incoherent. Cash flows (revenues from water fees minus total operating costs) vary greatly from year to year.3/ Thus, it is not possible, at project completion, to collect key financial information, such as total revenues and costs, central budgetary contributions, subsidies for O&M, total capital expenditures with sources of financing. Financial efficiency was not achieved. Budget savings were not realized. Cash flow recovery for the ORMVAs should be based on: Government assumption of public 3/ For example, average cash flow for the seven ORMVAs collecting water fees is DH 143 million for 1986-7 and DH 95 million for 1992-1993, based on 1985 DH values.  9 service costs currently borne by the ORMVAs; higher water fees and improved rate of recovery; and increased autonomy in ORMVA personnel management. 6.4 . Maintenance of irrigation systems. Rehabilitation works have been completed in a correct and timely manner in spite of on-site delays and cost overruns. ORMVA O&M services have been restructured. A large training program for mechanics was completed, and O&M services are more reliable now than at the beginning of the Project. Average O&M costs are not precisely known, due to the absence of an analytical accounting system at the ORMVA level, but they have increased. Based on 1985 DH values, costs rose 35% during the Project. Estimated costs for 1993 are 380 DH/ha, as opposed to the 245 DH/ha estimated at appraisal. This shows that an adequate level of maintenance can only be performed if maintenance costs increase. Thus, several issues were addressed during preparation of the Project's second phase: a) adequacy of the current O&M system (in terms of costs and tasks); b) inability of current water fees to cover adequate O&M costs; and c) insufficiency of the current rate of recovery of water fees (Para. 6.6). 6.5 ORMVA transfer of services to the private sector. At the beginning of the Project, the ORMVAs provided all necessary services to the farmers (Para. 5.5). By Project closing, divestiture of these services had been partially achieved. As for O&M of irrigation systems, ORMVAs are awarding some maintenance contracts to private firms. In 1993, these contracts covered about 60-70% of maintenance costs, as opposed to 30% in 1986. ORMVA divestiture from harvest organization and input supply has prompted processing factories to offer and finance farmer assistance services. 6.6 Farmer assumption of O&M costs. One of the Project's objectives was to increase the recovery rate of water fees from 43 % to 90%. While recovery rates grew to an average of 74%, they did not reach estimated targets. Cost recovery in two ORMVAs (Tadla [97,000 ha] and Moulouya [45,000 ha]) dropped from 82% and 62%, respectively, in 1992 to 66% and 56%, respectively, in 1993. For Ouarzazate and Tafilalet, plans were made during appraisal to revise existing legislation in order to collect water fees. This never happened. 6.7 Farmer contribution to rehabilitation investments. It was originally anticipated that farmers would pay a so-called participation tax, in order to contribute to part (40%) of the investments. The rate of recovery of this tax is low (29% of taxes billed), and no target was established during appraisal. A concerted effort to improve the rate of recovery must be made during the second phase of the Project. 6.8 Diversification of production a) Agricultural production. It was estimated that beet and sugar cane production would decrease and that cotton, cereals, vegetables and fruit output would increase. Sugar production remained constant, cotton declined, and the remaining crops did not reach the estimated targets. The reasons for this are that cropping pattern liberalization took longer than anticipated, and there were various other economic and agricultural constraints. The cropping intensity coefficient was projected at appraisal to reach 135% at full development, but only 93% was realized at Project completion. This was due mainly to lack of water and high salinization levels.  10 b) Animal production. Based upon available data, milk and meat production increased (100% and 13%, respectively), but did not reach estimated targets (140% and 129%, respectively). These increases are due to a 50% growth in forage areas (the appraisal target was estimated at 140%). 6.9 Farm income. After seven years of the Project, outputs have not yet reached the goals agreed upon during appraisal (i.e. 10 years ago). Monitoring data either do not exist or are too heterogeneous to determine the level of farm income. Based on available data, net income (without milk and meat) can be estimated at 7,200 DH/ha, based on 1985 DH values, whereas the amount of 6,100 DH/ha had been estimated at appraisal. The objective appears to have been exceeded, due to higher-than-expected price increases and better-controlled production costs. However, real increases in production were lower than expected. 6.10 Farmers' organizations. Farmers' associations were created and are generally active in the following areas: milk collection, insemination services, processing factory supplies. Water Users' Associations were also created to manage water and maintain canals. Other professional associations were created in order to defend producer interests.: These associations are responsible for part of those services which were formerly provided by the ORMVAs. These services are offered by private operators and provide for a dialogue between processors, retailers, Government, and the ORMVAs. The farmer organization movement is still fledgling (involving about 5% of farmers), but should expand during the Project's second phase. 6.11 Extension and research. Following ORMVA reorganization, decentralization, and divestiture (Para. 6.5), extension agents have become extremely specialized. For the most part, all nine ORMVAs, except Tadla, have increased cultivated outputs, but it is still difficult to determine whether this is due to extension services, to a greater availability of water, or to ORMVA divestiture. In the area of applied research, a Central Coordinating Unit (financed by the Borrower) has been created, enabling ORMVAs to coordinate and focus their research and to establish staff agreements with research institutions. 6.12 Collective land. By Project closing, about 4,000 ha of collective land had been allocated to farmers in Gharb. This trend has continued, and in 1994 an estimated 5,600 ha of land will be distributed. 6.13 Project rate of return. It has not been possible to calculate the financial and economic rate of return of the project In fact, Project-financed operations represent only part of ORMVA activities. As the ORMVAs have no analytical accounting system, it is not possible to identify the effects of specific project actions. Due to the lack of M&E (Para. 5.4), net income from rehabilitated areas has not been distinguished from that of areas not included in the Project. Income is therefore unknown in the majority of the ORMVAs. Furthermore, some ORMVAs have received, in addition to Project funds, assistance from bilateral aid from the Bank's Extension Services Project. Since investments are higher than anticipated (+7%) and farm income is also higher than expected (+ 18%), it is possible that the Project rate of return is close to the estimated level of 26%. 6.14 Environmental Impact. From the supervision reports there is no evidence of environmental degradation caused by rehabilitation work. Measures to combat silting were implemented in Ouarzazate, and have been considered to be effective. Analytical studies of sugar refinery pollution were carried out, and indicate no serious problems. No mention was made of an  11 increase of bilharzia during the Project, but a resistant form of malaria does appear to be on the rise. The Project's second phase, along with a USAID-financed project in Tadla, contain measures to monitor environmental impact.  12 7. Project Sustainability a) At the institutional level, positive attitude changes took place over the course of the Project, both at the central level (decentralization, inter-ministerial dialogue, dialogue with the ORMVAs) and at the ORMVA level (cost awareness, importance of the private sector, reorganization of the ORMVAs to stimulate interdisciplinary teamwork). Although they were arrived at only gradually, these positive changes in attitude and management methods indicate the sustainability of Project improvements. Only superficial organizational reforms within MARA and the ORMVAs have been carried out. b) At the network management level, LSI systems are better maintained than they were at the beginning of the Project, and farmers contribute more to their own O&M costs. However, it is necessary to improve the rate of recovery of water fees and to analyze whether current fees are sufficient (Para. 6.4) to ensure adequate maintenance. c) At the agricultural production level, yields are Increasing and will reach established targets, due to an increase in the volume of water distributed, better input use, and improved cropping methods. However, outputs fell sharply in certain systems after a drought and water shortage in 1993. In Tadla, Souss-Massa, and Ouarzazate soil salinization problems occurred in some areas. d) At the economic level, water consumption was reduced at farm level by 21 % (instead of an estimated 27%). However, a USAID-financed project in Tadla estimated that farmers still waste about 50% of irrigation water. Financially, operations subsidies have been reduced, but ORMVA cash flows are weaker than anticipated. Efforts at management streamlining are being carried into the second phase of the Project; e) At the environmental impact level, Project actions do not seem to have damaged the environment. Infectious diseases such as bilharzia, which was detected during appraisal, do not seem to have increased, but malaria is on the rise. The Project's second phase includes an environmental monitoring component. 8. Bank Performance 8.1 Supervision missions were generally carried out by FAO-CP which, unfortunately, lacks authority vis a vis the Moroccan projects official to properly carry out project implementation. Mission frequency varied greatly and does not seem to have been dictated by Project implementation problems. There was one mission per year for the first four years of the Project; three missions in 1990; no mission in 1992, and one mission in 1993. During the first few years, the FAO-CP missions stressed irrigation, and did not include organizational and institutional specialists. The infrequency of supervision missions at the beginning of the Project and the stress placed on technical matters added to the delays experienced during MIS implementation. 8.2 The only pressure which the Bank seems to have applied was when it threatened temporary interruption of disbursements at the end of the Project, due to the extreme delays in the receipt of audit reports. Likewise, problems were caused by the failure of the Government to sign  13 MIPs with Doukkala and Tadla, which the Bank then made a condition for presentation to the Board of the Project's second phase (LSII-2). Supervision missions have frequently found that monitoring data were unreliable, unusable, or nonexistent. The Mid-Term Review, scheduled during appraisal to tak -place in mid-1989, would have permitted contact with Project authorities in order to analyze the reasons for delays and to build a consensus among the various ORMVAs and Ministries. The farm investments component was not monitored at all by the supervision missions. 9. Conclusions and Lessons Learned 9.1 The Project consisted of two principal objectives: management improvement and rehabilitation of LSI schemes in conformity with Government's policy of decentralization and divestiture. Despite considerable initial delays, the Project's physical goals were attained, thus demonstrating the Borrower's ability to carry out the Project's technical aspects. Institutional objectives were somewhat less successful: a) Government administrative and financial control of the ORMVAs decreased less than anticipated; b) ORMVA divestiture vis a vis the private sector was accomplished; and c) management systems were barely implemented by the Project, but this will be done during the Project's second phase. The Project was instrumental in promoting favorable changes in attitude at all levels and in promoting greater responsibility and decentralization. However, financial results for the ORMVAs were much lower than had been expected. The Project can also be considered as having implemented good management foundations for the success of the second phase. Nevertheless, future success will rely upon sustained efforts at strong financial management during the second phase of the Project. 9.2 The principal lessons learned during Project implementation are: a) Projects aiming at Government (and ORMVA) divestiture require continuous efforts spread out over several years. The agenda for such projects should take into account the amount of time necessary to change attitudes at different levels so that Project actions have the opportunity to take root, particularly in the areas of regulation and management. Training should be carried out both for technical matters and in the areas of communication, problem perception, leadership, and evaluation (Paras. 4.3 and 6.3c); b) When Government divestiture involves granting more responsibility to the ORMVAs in the form of Management Improvement Plans, these plans should ensure that there is a contractual obligation on the part of both parties and that the ORMVAs have the means necessary to fulfill their obligations (Para. 6.3d); c) MIS implementation consists of technical and regulatory aspects. It may be advisable to separate the technical aspects (accounting) and to implement them at the beginning of the project. Technical components are less sensitive than regulatory measures and provide necessary financial data, regardless of the actions taken at other levels (Para. 4.2); d) Delays in Project implementation can occur when the technical or institutional studies underestimate difficulties and issues at hand. For example, unforeseen site difficulties  14 can appear, or, as was the case with MIS implementation, there can be resistance due to prevalent habits and attitudes (Paras. 4.2 and 4.3); e) The two main components of the Project deal with strengthening ORMVA management and improving infrastructure, and account for the bulk of Project costs. They were paralleled by the Bank's Extension Services Project, which aims at increasing agricultural production. This pattern of strengthening institutions while simultaneously increasing agricultural output will be continued during the second phase of the Project; f) The Loan Agreement contains 45 covenants. During the design and negotiation of the Loan, it may have been preferable to prioritize these covenants and to include only the most important ones in the Loan Agreement. Including an obligation to honor unfulfilled covenants from the first phase of a project in the Loan Agreement of the second phase may not be the best way for the Borrower and the Bank to ensure their respective credibilities (Para. 5.8); g) The fear of not finding private businesses to assume divested ORMVA services has been proven to be unfounded. ORMVA divestiture has prompted the private sector to invest in services to be provided to the farmers (Para. 6.5); h) Government divestiture will take longer to carry out in cases where farmers sell their products to State enterprises rather than to private companies (Para. 5.5); i) Even when an important Project component consists of improving management systems (i.e. MIS implementation), it is necessary to install or reinforce an M&E system at the beginning of the Project, even if this means subsequent modification of MIS study conclusions (Para. 5.4); j) Although the Mid-Term Review did not take place during the Project, it would probably have permitted identification of major Project problems and stimulated inter- agency coordination in order to resolve major issues (Para. 5.6); and k) In terms of LSI operations, the Project stressed improved rates of recovery of water fees. Efforts should also be made to raise current water fees to a level which would permit adequate maintenance (Para. 6.4). 10. Borrower Performance 10.1 The objectives of Government's (and the ORMVAs') financial divestiture component, although accepted during the course of appraisal and negotiations, required important changes in attitude and practices at all levels. Although these changes have been generally accepted, there was initial resistance, which increased the delay in implementation of the Project's institutional component.  15 PROJECT COMPLETION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATO IMROVEMENT PROlECT LAN 2656-MOR) PART C : PROb ECT REVIEWFbROM THE BORROWER'S PERSPECeIVE [Comments by the Borrower have been requested but have never been received]  16 PROJECT COMPLEION REPORT KINGDOM OF MOROCCO LARGE-SCALE IRRIGATION IMPROVEMENT PROJECT (LOAN 2656-MOR) PART m: STATISTICAL INFORMATION  17 Table 1 KINGDOM OF MOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) RELATED BANK LOANS PROJECT, YEAR OF ; PURPOSAMOUNT ; STATS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ APPROVAL L - Sebou I Irrigation Project 1969 Construction of Idriss I Dam; irrigation USS46.0 million Closed (Loan 643-MOR) of 4300 ha of Gharb Plain; improvement of 6/30/80 rainfed farming; construction of. roads/processing faciLities. Souss Groundwater Project 1975 Installation of tubewells, buried cement USS18.5 milLion Closed (Loan 1123-MOR) pipe distribution systems; rehabilitation 6/30/82 of gravity distribution system; construction of open drains and power lines; village infrastructure improvement; Land consolidation, distribution, preparation. l DoukkaLa I Irrigation 1976 Enlargement of Doukkala main canal and US$30.0 million Closed Project (Loan 1201-MOR) extension of irrigation systems; 6/30/81 biLharzia control project in El Jadida; feasibility study for Dechrael-Oued irrigation; feasibility study for fruits/vegetables in Massa region. l Doukkala II Irrigation 1977 Enlargement of DoukkaLa main canal and USS41.0 million CLosed Project (Loan 1416-MOR) extension of Irrigation systems; 6/30/86 construction and reinforcement of infrastructure, provision of equipment for extension, O&M, artificial insemination, teLecommunications. SmaLL and Medium Scale 1983 To support the development of the small USS42.0 million Closed Irrigation Project and medium scale irrigation sub-sector 12/31/92 (Loan 2253-MOR) through creation and rehabilitation of five schemes and the preparation of a second-stage oroject. I ASAL 1 1985 To support first impLementation phase of USS100.0 million Closed (Loan 2590-MOR) Government's five year sector adjustment 12/31/87 Drogram. I ASAL II 1987 To support second implementation phase of USs225.0 million Closed (Loan 2885-MOR) Government's medium-term agricultural 4/1/92 sector adjustment program, fostering efficient agricuttural growth and contributing to the reduction of budgetary/capital account deficits to manageable levels while minimizing social costs of adjustment. l Small and Medium-Scale 1988 To finance a part of the Government's uss23.0 million Irrigation II Project pubLic investment program in small and (Loan 2954-MOR) medium scale irrigation during the 1988- 1992 plan through renovation of about 120 traditional irrigation schemes and the equipnent of seven spate irrigation repair brigades to operate in poverty areas in seLected southern provinces.  18 Large Scale Irrigation 1992 Second phase of Goverrmient program to US$215.0 million Inprovement II Project Ilqprove efficIency, cost effectiveness (Loan 3587-NOR) and sustainability of LSI schemes through Infrastructure rehabllitation, institutfonal strengthening, water use efficIency inprovement and policy ref orms. Irrigated Areas 1993 To raise agricultural production and USS25.0 million Agricultural Services farmers' incomes in irrigated/rainfed Project (Loan 3688-MOR) areas, with a specIal focus on extension to women; to inprove organization and efficiency of ORMVAs' agricuLtural services; to promote invoLvement of farmers' groups in development, and to invoLve university staff in fieLd extension/research.  19 Table 2 KINGDOM OF MOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) PROJECT TIMETABLE .. . PASE PLANNED - ACTUAL:. Identification 3/84 Preparation Beginning 6/84 Preparation End 11/84 3/85 Appraisal Mission 2/85 4/85 Loan Negotiations 12/2-12/11/85 Board ApprovaL 2/25/86 Loan Signature 4/11/86 Loan Effectiveness 5/86 1/6/87 Loan Closing 6/30/93 6/30/93 Project Completion 6/30/93 12/31/93  Table 3 KINGDOM OF MOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) LOAN DISBURSEMENTS A. Cumulative and Actual Disbursements (US$ Million) IYBRD Fisca Year. Appraisal.: Actua FY 87 Dec. 1986 June 1987 1.9 FY 88 Dec. 1987 2.0 2.5 June 1988 2.1 FY 89 Dec. 1988 3.3 June 1989 4.4 5.4 FY 90 Dec. 1989 5.0 2.7 June 1990 5.0 4.8 FY 91 Dec. 1990 6.0 5.7 June 1991 4.7 4.6 FY 92 Dec. 1991 3.5 4.4 June 1992 3.0 5.5 FY~ 93 Dec. 1992 3.0 1.3 June 1993 2.1 2.1 TOTAL 46.0 46.0 B. Planned and Actual Disbursements by Category (US$ Million) l: 0 0Categoryi-; i0; ; PLAHNEa-. | :0ACTUAL ; ..s i : . s ...i.L ..o .. 2 1. Civil. Uorks 23. 31.3 1atgb31..3.:ATA: | 2. Equipment~~~~~~~~~~~.. .n Yehcle ....5 11.4 | .Training, Technical- Assistance, Maintenance Contracts, and Studies 4.5 3.3 | .Unal.located 4.0 0 TOTAL 46.0 46.0  21 Table 4 KINGDOM OF MOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) PROJECT COSTS (US$ MILLION) ::-'CATEGORY '.:-. -APPRA ISAL' :--ACTUAL VARIATIORI Civil Works 28.9 68.6 39.7 Equipment and Vehicles 17.6 26.4 8.8 Technical Assistance, Studies and Training 3.9 3.8 (1.0) Operating Costs 9.6 5.9 (3.7) Contingencies 24.5 - (24.5) lTOTAL 84.5 104.7 20.2 Civil works cost more than expected due to bidding delays and execution problems, and have used up 75% of unallocated costs. It has not been possible to determine on-farm investments (estimated at USS8.1 million, with contingencies, at appraisal). This component is not incLuded in the above figures.  22 Table 5 KINGDOM OF MOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) PROJECT FINANCING (US$ MILLION) SOURCE- APPRA:SA|ACTUA VARIATION; 1) World Bank' Civil Works 23.0 31.3 8.3 Equip. & VehicLes 14.5 11.4 (3.1) TA, Studies & Training 3.3 ) ) Operating Costs 1.2 )3.3 )(1.2) Contingencies 4.0 (4.0) Sub-TotaL Bank 46.0 46.0 0 2) Government 38.5 58.7 20.2 TOTAL 84.5 104.7 20.2 The Bank loan has been compLeteLy disbursed. Government has spent more than expected due to higher costs of civiL works.  23 Table 6 KINGDOM OF MOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) STATUS OF LEGAL COVENANTS section -f r|- e Status O ariginal ::Rvised :Description of Covenants -[ - t - l ~~~Da t ..::Date:. . . . - 2.02(b) F OK Government to open and maintain Special Account in US$ in the Banque du Maroc (LA amendment required). 4.01(b) F SOON 3/88 Government to provide a Reports submitted for alL copy of the audit report FYs except FY 1993. for the Project at the end of each financial period. 4.02(b) F SOON 3/88 ORMVAs to provide a copy of same as above their financial statements and of the audit report at the end of each financial period. 5.03(a) F OK 9/30/86 12/31/90 Government to establish new water charges to recover all O&M costs and a reasonable part of implementation costs. Government to provide Bank updated rates. 5.03(c) F SOON 12/31/89 Government to establish new Construction of pumping water charges for Moulouya station still underway. system after financed punoing system operational. 5.03(d) F OK 12/31/86 12/31/90 Government to establish water charges to recover all O&M costs and partial inv. costs in Upper Tessaout Perimeter 5.04 F/T OK 12/31/87 Government to carry out Draft agreement between feasibility study of water ORMVAs and users charge recovery systems for prepared. non-agricultural users. Annex 5 M RVS 7/87 7/90 CNCP to convene at Least CNCP never met; A 1(a) once every semester. aLternative arrangement I__________ __________ ______________imolemented. A 4(a) M OK 6/30/87 Biannual progress reports by DER to be submitted by 6/30 and 12/31 of each year. A 4(b) M OK 6/30/89 6/30/90 Comprehensive mid-term review report by DER in collaboration with the five Committees.  24 S ctio. ofiType.- Statu Origin l Revised Description of Covenantst! 1-X- etmi ..........D.t e .a t ... _ _-_ _ _ _ _ __Dt_ 1 M OK 9/30/86 Annual program of supplies, works, training and other services due 9/30 of each year. B 1 H4 OK 9/30/86 Phasing of expenditures and financing programs of next FY project activities due . ______________ __________ __________ 9/30 of each year. C 1(a) M OK 12/31/86 Government to establish O&M Done service in Ouarzazate and __________ Tafilalet. l C 1(b) M OK 12/31/86 Irrigation Technical Unit (BTI) of each ORMVA charged with pLanning, monitoring and evaluation of O&M of _________ irrigation systems. C 2(a) M OK 12/31/86 12/31/92 Program of action for estabLishment of Water Users' Associations in rehabilitated irrigation areas of Ouarzazate, Tafitalet and Haouz. C 2(a) M OK 12/31/86 12/31/92 Program of action for Done 5/2/93 establishment of Water Users' Associations in one Tadla irrigated area. C 2(a) M SOON 12/31/87 Establishment of Water Transformation of Users' Associations in traditional IUA into new Cuarzazate, Tafilalet and WUA in progress. Haouz rehabilitated areas. C 2(a) M OK 12/31/87 12/31/92 Establishment of Water Done Users' Associations in one __________ _____ Tadla irrigated area. C 2(c) M RVS 12/31/88 Extension of Water Users' DifficuLties in Associations to remaining implementation. Action ORMVAs. to be taken under LSII-2. D 1 M OK 12/31/86 5/2/93 Signature of program Done contract (PC) for 1987-1990 between Government (KIARA) and Doukkala. D 2 M OK/RVS 12/31/88 Signature of PC between Contract signed with Government (MARA) and Tadla. Remaining ORMVAs Gharb, Loukkos and Tadla. to be covered by LSII-2. o 2 M RVS 12/31/89 Signature of PC between To be covered by LSII-2. Government and remaining ORMVAs. D 2(b) M RVS 12/31/87 Government to submit annual To be covered by LSII-2. progress reports on PC implementation by 12/31 of each year. I  95 ....-|i criptio. of e. .et ---_ -__ -_-_ - Date- - Date-- E 1 M OK 6/30/87 6/30/92 Government to submit Done proposals for new standard management principles and procedures for all nine ORMVAs. E 2(a) H OK 12/31/87 5/2/93 Government to authorize application of new standard management principles and procedures. E 2(b) H RVS 6/30/88 Government to impLement new To be completed urder management system in LSII-2. Doukkala, Gharb, Tadla and Loukkos. _ F 4(a) M OK 6/30/87 Government to establish new Done extension service in each ORMVA. F 4(b) H OK 6/30/88 Government to provide Done adequate number of extension staff in each ORMVA. G 1 H OK 8/31/86 12/31/89 Government to submit Done program of divestiture for various coammercial services. G 1 M OK 9/30/89 3/31/90 Divestiture of production Done and processing of sugar crops in Doukkala, Gharb, Loukkos, Moulouya and ______________ _ ________ ___________ Tadla. G 1(b) M OK 9/30/89 3/31/90 Disengagement of input Done services, animal breeding, poultry production and non- prophylactic veterinary services in Doukkala, Gharb, Haouz, Loukkos, Moulouya, Souss-Massa and TadLa. G 1(c) M OK 9/30/89 3/31/90 Disengagement of farm Done machinery services in Doukkala, Haouz, Moulouya, Souss-Massa and Tadla. G 1(c) H OK 9/30/91 3/31/90 Disengagement of farm Done machinery services in _______________ ___________ Gharb, Loukkos. H 1 T RVS 6/30/87 Government to submit three- To be covered by IASS year research program for Project. each ORMVA. H 2 M/T RVS 12/31/87 Signature of protocol To be covered by IASS between appropriate project. research organizations and I ____ L_ C_________ ORMVAs. I 1 T OK 9/1/87 12/31/92 CompLetion of ORMVA studies Done for determination of new crocoing program.  26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ______________ _______ ~~~Date : Date . . . .. .. .. M/T OK 9/30/87 12/31/91 EstabLishment of Cropping patterns appropriate cropping substantially patterns in each ORMVA. liberalized. J T OK 12/31/87 12/31/89 Study to identify and evaLuate environmental impact of disposal of effluents from sugar processing plants in Doukkala, Gharb, Loukkos, Moulouya, Tadla. J1 T OK 12/31/87 12/31/89 Study to identify and evaluate environmentaL impact of sources and spread of bilharzia in Project perimeters. K 1(b) M OK 9/30/86 12/31/87 Government to furnish comprehensive report with conclusions of survey on collective-owned Lands in Gharb and recommendations for implementation strategy. K 1(c) M RVS 9/30/86 12/31/87 Government to set up Work supervised by DVRA monitoring committee to in MARA. Suspended follow up on measures to pending approval of new establish ownership rights. exoropriation law. L M OK 12/31/86 Government to establish Done cost recovery units in Haouz and Souss-Massa. L M RVS 9/30/86 Revision of water charges. Annual update of water tariff implemented. Revision of tariff structure to be done by LSII-2. l MM OK 12/31/86 12/31/87 Government to establish Done .__________ planning departments. The remaining covenants are all contained in Annex 5. Key: Covenant Type: Status: E - Economic OK - Covenant complied with F - Financial RVS - Revision Required M - Managerial SOON - Compliance imminent T - Technical  27 Table 7 KLNGDOM OF MIOROCCO Large Scale Irrigation Improvement Project (Loan 2656-MOR) MISSIONS | :- ''Stage. of Days in.. | 'ci liatio .'a :tings1 ature rfrLe ......inm' Proj t- cle . Ye j Sraff-.:: Fiel .......] epresented -'' __ ' Identification 3/84 _ Precaration Final Preparation Appraisal 4-5/85 7 Z7 Economist(3) FinanciaL Analyst ______________ _Consultants(3) I Post-Appraisal Start-Up 9/86 3 17 Economist Irrigation Engineer 6 Training Specialist Supervision 9/87 1 8 Irrigation Engineer 1 Management Supervision 2/88 5 14 Economist 1 Management Irrigaticn Engineer (2) Trainirg Specialist Financial Analyst Suoervision 6/89 1 11 Irrigation Engineer 2 Management Supervision 2/90 2 33 Irrigation Engineer I management Ccnsultant Supervision 6/90 7 23 Mission Chief 1 Management Agronomist Economist Irrigation Engineer (2) O&M Specialist Admin. Assistant Infcrmnation 7/90 2 5 Irrigaticn Engineer (2) _ Supervision 9/91 2 11 Irrigation Engineer 1 Management Economist Sucervision 4/93 1 13 Irrigation Engineer 2 ComoLetion 4/94 1 21 Consultant FAO mission in concert with World Bank staff. Detailed information not availabLe.  28 Table 8 KINGDOM OF MOROCCO Large Scale Irrigation Inprovement Project (Loan 2656-MOR) STAFF INPUTS (IN STAFF WEEKS) I!--; ;-0 ;. P-. i .1 0 a.t A -- ... .. .. ... -1 -. 1 .01.... l;--;0- ... ---W. . ai- Negotia In Al PoetI L;r .a .......A -_____ I PIn I -: