India - Bihar Public Tubewell Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 14409 IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (CREDIT 1737-IN) APRIL 28, 1995 Agricultural and Water Operations Division Country Department II South Asia 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. CURRENCY EOUIVALENTS Name of currency = Rupee (Rs) Rate of exchange: Appraisal (Oct. 1985): USS1.00 = Rsl3.00 Intervening years (1986-93): USS41.00 = Rsl9.05 Completion /ear (1994): US$1.00 = Rs31.37 WEIGHTS AND MEASURES 1 meter (m) = 3.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) = 2.47 acres (ac) 1 million cubic meters (Mm') = 810 acre-feet (ac-ft) 1 billion cubic meters (Bm3) = b).81 million acre-feet (MAF) I cubic foot per second (cfs or cusec) = 0.028 cubic meters per second (m3/s) 1 kilogram (kg) = 2.2 pounds (lb) 1 metric ton (mt) = 2,205 pounds (lb) FISCAL YEAR OF BORROWER April 1 - March 31 ABBREVIATIONS AND ACRONYMS APM Adjustable Proportional Module BSEB Bihar State Electricity Board BWDC Bihar Water Development Corporation CCA Cultivable Command Area CWC Central Water Commission DOA Department of Agriculture EE Executive Engineer ERR Economic Rate of Return GOB Government of Bihar GOI Government of India HYV High Yielding Varieties ICB International Competitive Bidding ICR Implementation Completion Report ID Irrigation Department IDA International Development Association IPDU Investigation Planning and Design Unit IST Improved Standard Tubewell LCB Local Competitive Bidding M & E Monitoring & Evaluation MID Minor Irrigation Department O & M Operation & Maintenance PC Project Coordinator PCU Project Coordinating Unit PTW Public Tubewell System QCU Quality Control Unit SCF Standard Conversion Factor SE Superintending Engineer TMEU Training, Monitoring & Evaluation Unit TW Tubewell Wing (of the MID) T & V Training and Visits kV kilovolt = 1,000 volts Kharif Wet season (June to October) Rabi Dry season (November to February) Zaid Hot weather season (March to May) levee River and flood control embankment FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (Credit 1737-IN) TABLE OF CONTENTS P R E F A C E ..................................................................................................... i EVALUATION SUMMARY ...............................................................................ii PART I. PROJECT IMPLEMENTATION ASSESSMENT ........................................... 1 A. Statement/Evaluation of Objectives ....................................................... 1 B. Achievement of Project Objectives.........................................................3 C. Major Factors Affecting the Project ....................................................... 6 D . Project Sustainability ....................................................................... 8 E . B ank Perforance ........................................................................... 9 F. Borrower Performance ................................................................... 12 G. Assessment of Outtome................................................................... 14 H . Future O peration .......................................................................... 14 I. L essons L earned ........................................................................... 14 PART II. STATISTICAL TABLES ..................................................................... 16 1. Summary of Assessments ............................................................... 16 2. Related Bank Loans/Credits ............................................................. 18 3 . Project T im etables ......................................................................... 19 4. Loan/Credit Disbursements............................................................... 19 5. Key Indicators for Project Implementation ............................................. 20 6. Key Indicators for Project Operation ................................................... 20 7. Studies Included in Project ............................................................... 20 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 wvithout World Bank authorization.I 8. Project Costs and Financing ............................................................. 21 A . Project C osts ............................................................. 2 1 B . Project Financing ......................................................... 21 9. Economic Costs and Benefits ........................................................... 22 10. Status of Legal Covenants ............................................................... 23 11. Concurrence with Operational Manual Statements..................................... 25 12. Bank Resources: Staff Inputs ........................................................... 25 13. B ank Resources: M issions ............................................................... 26 Appendix 1. FAO/CP Mission Aide Memoire ......................................................... 27 Appendix 2. Staff Positions as on October 10, 1994 ................................................. 35 Appendix 3. Economic Re-evaluation ................................................................... 36 TABLES 1. Net Irrigable Area Created and Utilized - New Tubewells ........................... 40 2. Net Irrigable Area Created and Utilized - Modernized Tubewells ................... 41 3. Net Irrigable Area Created and Utilized - Rehabilitated Tubewells ................. 42 4. Cropping Pattern - New and Modernized Tubewells ................................. 43 5. Cropping Pattern - Rehabilitated Tubewells ........................................... 44 6. Crop Yield - New and Modernized Tubewells ......................................... 45 7. Crop Yield - Rehabilitated Tubewells ................................................... 46 8. With Project Yields at SAR Compared to ICR for the Project as a Whole ......... 47 9. Estimated Financial Farm Budgets (1 ha farm)......................................... 48 10. Exchange Rates and Wholesale Price Indices (WPI) ................................. 49 11. Economic Analysis of the Project as a Whole ......................................... 50 12. Economic Analysis of New Tubewells ................................................. 51 13. Economic Analysis of Modernized Tubewells ......................................... 52 14. Economic Analysis of Rehabilitated Tubewells ....................................... 53 15. Derivation of Economic Prices........................................................... 54 16. Summary of Prices for Financial and Economic Analysis in 1994 Prices ......... 55 Appendix 4. Progress of Physical Targets............................................................. 56 Appendix 5. Project Cost in Nominal and Real Terms ............................................... 57 Appendix 6. Borrower's Comments and Evaluation Report......................................... 58 MAP IBRD 19278R i IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (Credit 1737-IN) Preface This is the Implementation Completion Report (ICR) for the Bihar Public Tubewell Project in India, for which Credit 1737-IN in the amount of SDR 59.5 million (US$68 million equivalent) was approved on October 16, 1986 and made effective on April 13, 1987. SDR 40.0 million (US$54.7 million equivalent) was cancelled on December 5,1991 during the funds redeployment exercise. The Credit was closed on May 31, 1994, the original closing date. Final disbursement took place on November 21, 1994. The ICR was prepared by an FAO/CP mission which visited India in September/October 1994. It was finalized by the Task Manager, Mr. N. K. Bandyopadhyay, Agriculture Unit, Resident Staff in India, Country Department 2, South Asia Regional Office, and reviewed by Mr. Shawki Barghouti, Chief, Agriculture and Water Operations Division, and Mr. William Nickel, Acting Project Advisor. The Borrower provided comments that are included as an appendix to the ICR. Preparation of this ICR was begun during the Bank's final supervision mission in May 1994. It is based on a review of the Staff Appraisal Report and legal documents, supervision reports, and project files, as well as field investigations and discussions with the Bank staff and state government officials associated with the project. The Borrower contributed to the preparation of the ICR by commenting on the mission's aide-m6moire, preparing its own evaluation, and commenting on the draft ICR. s ii IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (Credit 1737-IN) Evaluation Summary Introduction 1. The Bank has been associated with the irrigation sub-sector and Bihar since 1962 when it approved the first credit of US$15 million for the Sone Irrigation Project, followed by the Bihar Agricultural Credit Project for US$32 million in 1973, four all-India Agricultural Refinance Development Corporation (now National Bank for Agricultural and Rural Development) projects between 1975-1982, the Bihar Agricultural Extension and Research Project in 1977, Subernarekha Irrigation Project in 1982, and the latest being the Bihar Plateau Development Project in 1992. Project Objectives 2. The State of Bihar was the third of the Indian States to adopt improved technology for the deep tubewells and distribution system introduced under Uttar Pradesh Tubewells Project (Credit 1004-IN, 1980 and Credit 1332-IN, 1983). The seven-year Bihar Public Tubewell Project was aimed at increasing agricultural production by improving and expanding the use of Bihar's considerable groundwater potential. This was to be achieved by: (a) introducing improved tubewell technology that would eliminate the planning and design problems inherent in Bihar's existing public tubewells (PTWs); (b) undertaking a phased program to rehabilitate and modernize most of Bihar's existing PTWs; and (c) strengthening the institution responsible for PTW activities to ensure that project works can be effectively and efficiently implemented as well as operated and maintained. Project components included: (i) New tubewell systems. Construction of about 500 improved tubewell systems of about 150 m3/hr each and net command area of 100 ha. (ii) Modernization and rehabilitation of existing tubewell systems. Repair or rehabilitation of about 4,700 existing tubewells including construction of new distribution systems on about 1,000 of the existing tubewell systems and rehabilitation of existing distribution systems on a further 1,300 of the existing tubewells. (iii) Dedicated power lines. Connection to separate 11 kV feeder lines of about 4,700 existing tubewells and 500 new tubewells. (iv) Management improvements. Provision of equipment, transportation, and buildings to be used by the project construction, operation and maintenance staff; preparation of design and operation and maintenance (0 & M) manuals; technical services; studies related to project management, cost recovery and an agro-economic baseline survey for selected project tubewells; training of project staff; and monitoring and evaluation activities. iii 3. Project changes after appraisal. The project was revised in March 1990 by increasing the tubewells for modernization by 500 which were located in the flood zone, instead of rehabilitating them as proposed at appraisal (increasing the number of PTWs to be modernized from 1,000 to 1,500 and reducing the number to be rehabilitated from about 3,700 to 3,200), and providing an underground pipe distribution system instead of repairing the existing bricklined channels, which were prone to frequent breaches. On the recommendation of the Government of Bihar (GOB), the provision for dedicated power lines was deleted by the Bank in 1992. The Credit disbursement percentage was increased commencing in September 1990 in respect of tubewell and energization works from 75 percent to 90 percent as part of the Gulf Initiative to alleviate Government of India's (GOI) foreign exchange constraints. In addition, a sum of SDR 40 million (US$54.7 million equivalent) was cancelled due to substantial savings resulting from the depreciation of the rupee against the US dollar. 4. Loan covenants. Special loan covenants or agreements that were expected to promote achievement of project objectives were: (i) the provision of dedicated 11 kV feeder lines to each PTW within a cluster to give power supply from a conductor which would be exclusively used for PTWs; and (ii) the supply of a minimum of 16 hours of power per day per PTW at peak demand periods. As stated earlier, dedicated power lines were dropped from the project and the power was continuously in short supply ranging from 3-8 hrs/day, exacerbated by its unreliability and irregularity. 5. Evaluation of project objectives. The project was based on the sound foundation that it would complement groundwater development in the private sector and be selective in the target group of beneficiaries to be reached; tubewell siting criteria were designed to achieve this goal. The project took advantage of technical principles developed under the Uttar Pradesh Public Tubewell II Project. Consequently, the project objectives were clear and important for the proper development of the state's groundwater potential. But the project lacked realism particularly relating to the installation of new tubewells as it was too optimistic to expect quick implementation results, given the institutional reorganization required and the past two decades of dismal performance of PTWs. It was also not realistic to spread water over 100 ha with a 150 m3/hr tubewell. The project was also complex because the proposed number (about 5,200) of tubewells were to be sited in scattered locations over some 37 of the state's districts and implemented within seven years, and such implementation to be effective required good coordination with the Bihar State Electricity Board (BSEB) and the Department of Agriculture (DOA). This scale and spread of project activities also naturally called for high quality management and skillful planning of logistics and implementation, which the project management has found it difficult to master. The importance of water management was not very explicitly emphasized at appraisal, although it constituted a key element in equitable water allocation and water use efficiency. Implementation Experience and Results 6. The project experienced considerable difficulties during implementation. The most common of these was the delay in construction and energization. Disorganized management, staff shortages at senior levels and frequent turnover, uncoordinated planning of works between BSEB and the Tubewell Wing of the Minor Irrigation Department (MID), poor extension support in the field, and shortages of PVC pipes, were other problems which hindered implementation. Achievement of tubewell completion and energization was 18 percent (new tubewells), 29 percent (modernized tubewells) and 73 percent (rehabilitated tubewells). Area actually irrigated was dismally lower at 13 percent (new tubewells), 15 percent (modernized tubewells) and 11 percent (rehabilitated tubewells) of the additional potential created. The principal reason for the low utilization is the shortage of power supply, ranging from 3 to 8 hours per day. As a result, production levels have been substantially less than anticipated at project appraisal. The current iv estimate of overall economic rate of return (ERR) for the project is 2.3 percent, down nearly 31 percent from an appraisal estimate of 33 percent. Part of this decline is due to the lower increase in cropping intensity but most is caused by the lower command area per tubewell utilized than that estimated at appraisal - 74 percent lower for new tubewells, 78 percent lower for modernized tubewells and 91 percent lower for rehabilitated tubewells. The slippage of 31 percentage points (from 33 percent to 2 percent) is accounted by -20 percent (new tubewells), 4 percent (modernized tubewells) and 3 percent (rehabilitated tubewells). For the most part, both appraisal and completion estimates of ERR are more speculative than usual, because they incorporate returns also to investments projected in later years. 7. The project has only partially achieved its physical and sector policy objectives. Its achievement of institutional development objectives was negligible. Macroeconomic policies and financial objectives were not applicable to this project. There was no coverage of gender issues. 8. Project sustainability. The ERR of the project is too low to be consistent with sustainable economic performance. The major challenge for the sustainability of the tubewell system established under the project is the provision of a reliable power supply and adequate O & M. As the power supply cannot be assured by the Electricity Board in the immediate future, the only option would be to install diesel generating sets. In fact, the Bank extended necessary assistance including consultancy services for determining the economic viability of diesel generating sets and agreed to reimburse their cost under the National Water Management Project, provided a small percentage of capital costs and 0 & M expenditure were borne by the beneficiaries. Unfortunately this was not experimented in a single scheme. As the MID would not have financial resources to operate and maintain these schemes and their diesel sets, the best course of action would be to transfer them to farmers' organizations, whether Panchayats or otherwise, and to intensify training and technical assistance programs (provided through the Water and Land Management Institute). The establishment and functioning of the two Regional and 18 Divisional Workshops for the provision of spare parts and repair of tubewells on behalf of farmers' organizations is a prerequisite to sustainability. 9. Actual cost, financing and implementation timetable. At appraisal, it was estimated that construction and energization would be completed by September 1993 with a project closing date of May 31, 1994. Current estimates indicate that final construction is not likely to be completed until March 1998 although the Credit was closed on May 31, 1994. The final cost of the project is now estimated at Rs.3,495 million (US$140 million), compared to the appraisal estimate of Rs.1,296.2 million (US$99.7 million), representing a 170 percent cost overrun in nominal rupee terms or 55 percent cost overrun in real rupee terms. The Credit was able to finance only about US$26.6 million or 19 percent of the estimated total project cost compared to 70 percent at appraisal, severely increasing the burden on the state budget. 10. Key factors relating to achievement of project objectives. The most important deficiencies which hampered project implementation can be classified into: (i) Factors not generally subject to Government control. These included law and order problems, limiting Bank financing to operative wells only, and the inadequacy of the management and water charges studies. These have in part adversely affected the achievement of project objectives. (ii) Factors generally subject to Government control. These included delays in the appointment of key staff, lack of adequate counterpart funds in later years, delayed start in the construction of dedicated power lines and uncoordinated construction work between BSEB and the Tubewell Wing of V the MID, a long strike by engineers and staff during 1991/92, and delay in delegation of adequate financial power to field officers. These had substantially affected the implementation pace of tubewell installations. (iii) Factors generally subject to implementing agency control. There was insufficient advance planning and updating of implementation, procurement and 0 & M schedules, lack of coordination between the State Electricity Board and Department of Agriculture, and delays in institution-building measures such as M & E and training. Procurement progress was slow mainly because of the cumbersome and time-consuming procedures followed for evaluation of bids and finalization of awards. There were also delays in construction of cluster buildings and workshops, administrative building and access roads to PTWs. As the first World Bank project implemented by the MID, the department staff took time to familiarize themselves with the local competitive bidding (LCB) and international competitive bidding (ICB) procedures, and this has caused some delays. The frequent change in Project Coordinator (eight Project Coordinators over the project period of seven years), has meant that proper direction and continuity to the programme of work could not be given. The combined effect of these factors was reflected in substantial under-achievement of project objectives. 11. Performance of Bank and borrower. Both parties have not performed satisfactorily throughout the project cycle. The Borrower continued its managerial and financial weaknesses during implementation, although some improvement surfaced towards the closing years. The Bank's unsatisfactory performance included misjudgement on power availability, the poor mid- term review, and the waiver of the covenant on dedicated power lines which did not offer any remedy to the crucial issue of power supply to tubewells. 12. Project outcome assessment. The project outcome is rated as unsatisfactory. Summary of Findings, Future Operations and Key Lessons Learned 13. Findings. Incremental agricultural production is significantly less than estimated at appraisal. The ERR is also lower. A matter of particular concern is the continuing shortage and unreliability of power, which has contributed to the dismal average command areas of PTWs utilized under the project. Public investment in tubewell development should therefore be reviewed. Adequate provision of funds is essential for extension, demonstration and training in tubewell command areas. Since the success of a public tubewell project depends on the performance of all interacting government agencies, there should be an effective mechanism for coordination. 14. Plans for future project operations. Following discussion with MID on future operation/action plan concerning completion of all ongoing works and also to maximize net project benefits, MID has agreed to: (a) complete all ongoing works by March 1998 and make available adequate funds for this purpose and refrain from constructing any new structures before completing all ongoing schemes in view of GOB's budgetary constraints; (b) continue transferring O & M responsibility for tubewells to Panchayats/farmers' organizations and also carry out a thorough review of the tubewells previously handed over and undertake remedial measures for improved performance; (c) provide adequate 0 & M funding until all tubewells are turned over to Panchayats/farmers' organizations; (d) allocate sufficient funding for training in installation and operation of improved electrical regulation system already procured for the efficient operation of the tubewells but not in use at present for want of adequate training; (e) implement a pilot scheme vi to install diesel generating sets in about 10 selected tubewells to test the effectiveness of operation and farmers' willingness to bear full 0 & M cost and a portion of the capital cost; and (f) monitor tubewell performance through collection of data on operational hours per tubewell, irrigated potential created, actual area irrigated, cropping patterns, intensities and yields in the kharif, rabi and hot seasons on a continuous basis. 15. It is recommended that an impact evaluation mission from the Bank visit the state around 1997 to evaluate the performance of project wells. 16. Lessons for future projects in the sub-sector. The main lessons learnt are: (i) Given the past two decades of poor PTW performance and the institutional reorganization required to achieve improvements, the proposed installation of a large number (500) of new tubewells without the prior benefit of a pilot scale operation, as in Uttar Pradesh, was very ambitious. Small farmers' interest, which was sought to be promoted by proper siting of new wells, can be, for the present time, secured by selecting wells for modernization or rehabilitation in command areas dominated by the target group. (ii) The provision of dedicated power lines with power availability of 16 hours/day at peak demand against a background of poor power generation and poor supply was not realistic. In future, project power supply should be assessed at the state level to ensure that it is adequate for the project. (iii) The project experience demonstrates the critical significance of state finance in Bihar for satisfactory implementation and the need to ensure an adequate flow of funds from the Credit. Limiting Bank financing to operative wells only, though well-intended (by restricting the start-up of numerous works and the completion of few) hampered the reimbursement of counterpart funds and the corresponding legal covenant required adjustment to local circumstances. A revolving fund at the state level is also required in addition to the special account established with GOI. (iv) Groundwater development based on PTWs would increasingly face problems of poor performance, both in terms of productivity and equity, unless proper action is taken for power supply and effective transfer to beneficiaries. The existing system would, without significant changes in the management and financing, deteriorate as a result of pressure on already strained budgetary resources. (v) The re-estimated dismally low ERR of the project suggests that even with improved technology, investment in public tubewells may not necessarily be economically viable. Further investment in public tubewells should therefore be reviewed, in order to encourage private investment in shallow tubewells while resolving most of the problems now faced with public tubewells through their transfer to Panchayats after ensuring certain follow-up steps including adequate power supply and repair facilities. (vi) There is a need to address issues related to Panchayats, farmers' organizations and 0 & M of PTWs comprehensively at preparation and appraisal of the project to ensure smooth implementation. vii (vii) Monitoring and evaluation of tubewell irrigation and agricultural performance data deserves high priority as a critical tool for rectifying deficiencies and sustained use of the irrigation potential created. 1 IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (Credit 1737-IN) PART I: PROJECT IMPLEMENTATION ASSESSMENT A. STATEMENT/EVALUATION OF OBJECTIVES Statement of Project Objectives 1. The State of Bihar was the third of the Indian States to adopt improved technology for the deep tubewells and distribution system introduced under Uttar Pradesh Tubewells Projects (Credit 1004-IN, 1980 and Credit 1332-IN, 1983). As in these tubewell projects, the Bihar Public Tubewell Project was aimed at increasing agricultural production by improving and expanding the use of Bihar's considerable groundwater potential. This was to be achieved by: (a) introducing improved tubewell technology that would eliminate the planning and design problems inherent in Bihar's existing public tubewells (PTWs); (b) undertaking a phased program to rehabilitate and modernize most of Bihar's existing PTWs; (c) strengthening the institution responsible for PTW activities to ensure that project works can be effectively and efficiently implemented as well as operated and maintained; and (d) increasing agricultural production, employment and incomes especially for Bihar's small farmers. Project components included: (i) New Tubewell Systems. Construction of about 500 improved tubewell systems of about 150 m3/hr each and net command area of 100 ha. (ii) Modernization and Rehabilitation of Existing Tubewell Systems. Repair or rehabilitation of about 4,700 existing tubewells including construction of new distribution systems on about 1,000 of the existing tubewell systems and rehabilitation of existing distribution systems on a further 1,300 of the existing tubewells. (iii) Dedicated Power Lines. Connection to separate 11 kV feeder lines of about 4,700 existing tubewells and 500 new tubewells. (iv) Management Improvements. Provision of equipment, transportation, and buildings to be used by the project construction, operation and maintenance staff; preparation of design and 0 & M manuals; technical services; studies related to project management, cost recovery and an agro-economic baseline survey for selected project tubewells; training of project staff; and monitoring and evaluation activities. 2. Project Cost. The project was planned to be implemented over seven years from about September 1986 to September 1993, and the total project cost including physical and price contingencies was estimated at US$99.7 million (Rs.1,296.2 million). The IDA Credit of SDR 59.5 million (US$68.0 million equivalent) was to finance about 70 percent of the total project 2 cost excluding taxes and duties. The remaining portion of the cost was to be met by the Government of Bihar (GOB) and the Government of India (GOI). 3. Project Changes after Appraisal. The project was revised in March 1990 by increasing the tubewells for modernization by 500 which were located in the flood zone, instead of rehabilitating them as proposed at appraisal (increasing the number of PTWs to be modernized from 1,000 to 1,500 and reducing the number to be rehabilitated from about 3,700 to 3,200), and providing an underground pipe distribution system instead of repairing the existing bricklined channels, which were prone to frequent breaches. The energization of dedicated power lines did not make any headway due to a general power shortage in the state and resentment among other power users which has resulted in theft of conductors in many lines (see para 22). On the recommendation of GOB, the provision for dedicated power lines was deleted by the Bank in 1992. The Credit disbursement percentage was increased commencing in September 1990 in respect of tubewell and energization works from 75 percent to 90 percent as part of the Gulf Initiative to alleviate GOI's foreign exchange constraints. In addition, a sum of SDR 40 million (US$54.7 million equivalent) was cancelled due to substantial savings resulting from depreciation of the rupee against the US dollar. 4. Special loan covenants or agreements that were expected to promote achievement of project objectives were: (i) the provision of dedicated 11 kV feeder lines to each PTW within a cluster to give power supply from a conductor which would be exclusively used for PTWs; and (ii) the supply of a minimum of 16 hours of power per day per PTW at peak demand periods. As stated in para 3, dedicated power lines were dropped from the project and the power was continuously in short supply ranging from 3-8 hrs/day, exacerbated by its unreliability and irregularity. Evaluation of Project Objectives 5. Clarity. The area commanded by a new tubewell had been designed at 100 ha and locations chosen in such a manner as to include a high proportion of small and fragmented holdings cultivated by small farmers who would not find it profitable to invest their own resources in constructing new tubewells. The project design was thus based on a sound foundation that it would complement groundwater development in the private sector and be selective in the target group of beneficiaries to be reached; tubewell siting criteria were suitably designed to achieve this goal. Consequently, the project objectives were clear and important for the proper development of the state's groundwater potential. 6. Realism. The project, however, lacked realism at least on two counts. Given the institutional reorganization required and the past two decades of inadequate performance of PTWs, the proposed investment in a large number of new tubewells (500) was over ambitious. The spread of water over 100 ha with a 150 m3/hr tubewell was also unrealistic. 7. Complexity. The project was also complex because the proposed number (5,200) of tubewells were to be sited in scattered locations over some 37 of the state's districts and implemented within seven years, and such implementation to be effective required good coordination with the Bihar State Electricity Board (BSEB) and the Department of Agriculture (DOA). This scale and spread of project activities also naturally called for high quality management and skillful planning of logistics and implementation, which the project management has found it difficult to comply with. It was rather ambitious to expect that deficiencies such as management difficulties, inadequate power supply and the shortage of 0 & M funds could be overcome within a period of seven years when these have haunted the development of the PTW sector over the past several years. 3 8. Responsiveness to Borrower's Circumstances. The project's strategy to provide a reliable, timely and equitable irrigation service was a commendable and necessary ingredient, but, without finance for complementary investments in water management and extension, remained insufficient to respond to Borrower's financial difficulties and development priorities in not only providing an efficient irrigation service but also realizing fully the irrigation potential by the small farmers. The importance of water management was not very explicitly emphasized at appraisal, although it constituted a key element in equitable water allocation and water use efficiency. B. ACHIEVEMENT OF PROJECT OBJECTIVES 9. Overall Achievement. The project has only partially achieved its physical and sector policy objectives. Its achievement of institutional development objectives was negligible. Macroeconomic policies and financial objectives were not applicable to this project. There was no coverage of gender issues. 10. Physical Objectives. There is a significant shortfall in the achievement of physical objectives as shown below: Targets and Achievements Component Appraisal Fully Completed rrig at i on & Energized otential (ha) Original_Revised evrge askfevyased193 New tubewell 500 500 89 50 000 Modernized tubewell 10 1.500 431 150000 783 ehabilitated tubewell 3712 3212 2 354 2573000 dicate power hnes* (5.212) (5.212) ( 24) - fotal 5.212 5.212 2,874 474002005 * Denotes numbers, each with an average length of 2.06 km. 11. As shown above, the shortfall is both in terms of tubewell system completed, potential realized and area actually irrigated under the project. Achievement of tubewell completion and energization was 18 percent (new tubewells), 29 percent (modernized tubewells) and 73 percent (rehabilitated tubewells). Area actually irrigated was lower at 26 percent' (new tubewells), 22 percent2 (modernized tubewells) and 11 percent (rehabilitated tubewells) of the additional potential created. The principal reason for the low utilization is the shortage of power supply, ranging from 3 to 8 hours per day. As a result, production levels have been substantially less than anticipated at project appraisal. 12. Objectives of Sector Policies. The objectives of sector policies relevant to the project were concerned with funding for the 0 & M of project works and cost recovery policies. Actual releases of budgetary allocations for 0 & M persistently lagged behind requirements. 13. Water rates had not been revised since 1983. Instead, GOB decided to hand over the operation and management of tubewells to the Panchayats, initially on a five-year lease. Some 490 1 This figure has been brought in line with Tables 1, 2 and 3 of Appendix 3 and GOB's comments. 2 This figure has been brought in line with Tables 1, 2 and 3 of Appendix 3 and GOB's comments. 4 tubewells, most of them (94 percent) modernized or rehabilitated ones, had so far been transferred to the Panchayats. Only two of the Panchayats are financially autonomous in operating them. The key reasons for their success are reported to be availability of a reliable power supply and effective leadership. GOB's decision to transfer the tubewells to the Panchayats is well-intended and based on the successful experience of such operation in West Bengal. What has not gone right in Bihar is forward planning and preparation of the Panchayats and users for this exercise, and the continuous shortage of power supply and its undependability. As a result, in many cases, the Panchayats have not been able to pay the electricity charges and they still look to the Minor Irrigation Department (MID) for repairs and maintenance, largely due to non-availability of repair services for these sophisticated tubewells in local markets. 14. Institutional Development Objectives. The main means of achieving the institutional development objectives, as provided in the Staff Appraisal Report (SAR), were the provision of infrastructure and equipment, training of project staff, preparation of design and 0 & M manuals, studies related to project management, and monitoring and evaluation activities. These were all provided to varying degrees of success. Management and water charges studies were completed but they were inadequate and had the least impact on project management and cost recovery. Cluster buildings and transportation were also almost completed or nearing completion, albeit with delays. There was a rapid turnover of senior staff including the Project Coordinator. Some staff vacancies were not filled in full (superintending engineers, geophysicists) or not filled at all (hydrogeologists) (see Appendix 2). The transfer of staff to MID, including the tubewell operators from the Bihar Water Development Corporation (BWDC), had only increased the staff numbers but not their quality. Staff training was more or less provided as planned. The monitoring unit, with one executive engineer and two assistant engineers, was understaffed. It concentrated on physical and financial progress of works. An indicator tracking system was not used as a basis for monitoring project performance. The cumulative effect of weak staffing, inadequate studies and ineffective monitoring has led to under-utilization of physical facilities provided under the project (buildings, vehicles and equipment). 15. Equity Objectives. Although equity was the major justification for the investment in new tubewells, the equity impact of the project defies proper assessment. In the absence of M & E data on beneficiary participation, it is not possible to make a precise assessment. However, it is known that the systems of water management and distribution have not functioned well. The more influential farmers tended to get water during times of power constraint while others received less or nothing at all and tubewell operators were reported to be not 'fair' in the distribution of water. The automatic operation system which was supposed to eliminate the partiality of tubewell operators had not worked as designed. Siting of new wells might not have also favored the target group as field visits of the ICR mission indicated that there were many shallow tubewells (over 20) within the command of a new PTW, which are normally owned by well-to-do farmers. 16. Economic Rates of Return (ERR). The current economic rates of return re-estimated at completion are 2.3 percent for the project as a whole and -20 percent (new tubewells), 4.4 percent (modernized tubewells) and 2.9 percent (rehabilitated tubewells), compared to 33 percent (overall project), 32 percent (new tubewells), 42 percent (modernized tubewells) and 29 percent (rehabilitated tubewells) estimated at appraisal. The recalculated ERRs are based on actual expenditures incurred up to the closing date and costs to complete thereafter until 1998, and an actual and updated projection of benefits. Underlying assumptions about costs and benefits, and other information supporting the analysis, are shown in Table 9 of Part II and Appendix 3. The re- estimated ERRs differ significantly from the appraisal estimates. There are various factors which have contributed to the negative ERR for new tubewells, and significantly lower ERRs for modernized and rehabilitated tubewells, as compared to appraisal estimates. The more important ones include: 5 (i) a 74 percent to 78 percent lower command area per new and modernized tubewells and 91 percent lower command area per rehabilitated tubewell, than that expected at appraisal; (ii) at appraisal, the cropping intensity was expected to increase by 66-77 percent; revised estimates put the increase between 2-17 percent. The lowest 'with project' cropping intensity (2 percent) is for areas commanded by rehabilitated tubewells. This is because of the poor maintenance of field channels, resulting in higher conveyance losses, compared to areas commanded by new or modernized tubewells with the buried pipe system supported under the project; (iii) area irrigated by private tubewells 'without project' at completion is about 20 percent compared to none assumed at appraisal; and (iv) increased costs of tubewells compared to appraisal (see para 24); (v) economic costs in rupee terms have increased much more than the increase in the price of the main agricultural output (paddy), while the economic price of labor is six times that estimated at appraisal, the farmgate price of paddy and wheat has gone up between two to three times that estimated at appraisal. 17. Sensitivity Analysis. The potential economic benefits are not being fully achieved particularly in terms of areas irrigated per tubewell, due to erratic and unreliable power supply. The fact that many PTWs are being used to irrigate areas ranging from 9 ha to 26 ha each achieving an average of 12 ha, is considered exceedingly low. The three factors which are expected to influence the ERR are: (i) variations in command areas; (ii) changes in 0 & M funding; and (iii) the inability of the MID to operate and manage PTWs as designed. The sensitivity analysis indicates that: a reduction in command area of 20 percent would lower ERR to -0.6 percent; a reduction of 50 percent in 0 & M funding (by assuming that future benefits would be reduced by 50 percent), would lower the ERR to about -7.4 percent; and that poor operation and management would lower ERR to -0.6 percent, assuming that the ineffective operation of MID would depress project benefits by 20 percent. 18. Farm Incomes. At appraisal, four farm models were prepared to estimate incremental cash income generated by the different models. The results showed incremental incomes of Rs.3,165 (heavy soils farm model), Rs.2,765 (mixed cropping farm model), Rs.2,535 (lights soils farm model) and Rs.4,027 (mixed cropping with vegetable farm model) or Rs.420 to Rs.670 per capita, assuming a family size of six members. A similar analysis (but based on irrigation by type of tubewell) for the ICR based on cropping patterns and per ha crop budgets shown in Appendix 4 revealed incremental incomes of Rs.3,870 (new tubewells), Rs.3,878 (modernized tubewells) and Rs.2,830 (rehabilitated tubewells) or Rs.470 to Rs.645 per capita in 1986 prices. Although the models prepared at completion are strictly not comparable to those projected at appraisal, well irrigation is profitable for relatively larger farmers but public tubewells (when well- managed and with an adequate power supply), can provide a valuable additional income to smaller farmers who cannot afford to invest in wells. 19. Subsidies. The total annual 0 & M cost for PTWs is estimated by the MID at an average Rs.54,490 per tubewell on the designed utilization basis, including establishment cost of Rs.24,000, energy (electricity) charges of Rs.25,620 and maintenance cost of Rs.4,870, while the direct revenue from water rates would amount to Rs. 17,045 per year, assuming 100 percent of 6 collection. The balance (Rs.37,445) will have to be supported from GOB's budget. However, the collection rate has not exceeded 14 percent since 1988/89 and in 1993/94 it was less than 2 percent. Overall subsidies on PTW operation are therefore about Rs.37,445 per year per tubewell assuming 100 percent recovery of water charges or about Rs.54,150 per year per tubewell, assuming only 2 percent recovery rate. It would seem that some bigger farmers have also benefited, although it was not intended under the project. C. MAJOR FACTORS AFFECTING THE PROJECT 20. Implementation Record. The project has continuously suffered from problems since its inception in April 1987, having been rated '3' since early 1989 and '4' during July 1991-May 1992, when its rating improved to '3' and later to '2' in August 1993 before falling to '3' again in May 1994. Overall, energization works out to 55 percent of the total planned at appraisal. The drilling of new tubewells was dropped on the advice of the Bank which gave priority to completion of wells already drilled. The position regarding modernized and rehabilitated tubewells is somewhat better. The single most important factor affecting the project is GOB's inability to provide reliable and quality power for about 16 hours at peak demand to project tubewells. The situation further worsened due to the fact that against the planned strategy of extensive irrigation to spread water over as large an area as possible, with the assumption that with water rather than land as a limiting factor the common cultural practice in Bihar is to under-irrigate rabi crops (SAR, para 4.34), most of the cultivators under the command areas were demanding optimum irrigation facility from the system to maximize their benefits and, as such, there was too little water to serve too big an area for productive commercial agriculture which could give adequate returns to pay back the 0 & M charges for sustainable operation. Even beneficiary participation for proper management for equity and sustainability can be effective only when the irrigation service is reliable and adequate for productive commercial agriculture. The other important deficiencies which hampered project implementation can be classified into: (i) Factors not generally subject to Government control. These included law and order problems, limiting Bank financing to operative wells only (this was to limit the start-up of numerous works and the completion of a few), and the inadequacy of the management and water charges studies. These have in part adversely affected the achievement of project objectives. (ii) Factors generally subject to Government control. These included delays in the appointment of key staff, lack of adequate counterpart funds in later years, delayed start in the construction of dedicated power lines and uncoordinated construction work between BSEB and the Tubewell Wing of the MID (for example, only four new and 33 modernized tubewells were completed in all respects until 1991), a long strike by engineers and staff during 1991/92, and delay in delegation of adequate financial power to field officers. These had substantially affected the implementation pace of tubewell installations. (iii) Factors generally subject to-implementing agency control. The project has encountered continuous implementation problems. There was insufficient advance planning and updating of implementation, procurement and 0 & M schedules, lack of coordination between the State Electricity Board and Department of Agriculture, and delays in institution-building measures such as M & E and training. The procurement progress was slow mainly because 7 of the cumbersome and time-consuming procedures followed for evaluation of bids and finalization of awards. There were also delays in construction of cluster buildings and workshops, administrative building and access roads to PTWs. As the first Bank project implemented by the MID, the department staff took time to familiarize themselves with the local competitve bidding (LCB) and international competitive bidding (ICB) procedures, and this has caused some delays. The post of Project Coordinator was filled by a senior engineer and initially there were five Project Coordinators in three years and eight Project Coordinators over the project period of seven years. The frequent change in Project Coordinator has meant that proper direction and continuity to the program of work could not be given. The combined effect of these factors was reflected in substantial under-achievement of project objectives. 21. Implementation Delays. There had been significant shortfalls in the physical achievement of targets planned at appraisal as indicated in Appendix 4. At appraisal, it was estimated that construction and energization of tubewells would be completed by September 1993 with a project closing date of May 31, 1994. Current estimates indicate that final construction is not likely to be completed until March 1998, although the Credit was closed on May 31, 1994. 22. Several factors had contributed to the delays in project implementation. These included scattered unplanned work without coordinated planning in the initial years to complete all works in a tubewell system, energization falling behind schedule due to incomplete pumphouse and related works, theft of aluminium conductors in some districts (Aurangabad, Nalanda, Gaya) which delayed the commissioning of PTWs in these districts, delays in award of contracts, inadequate counterpart funding in later years, exacerbated by slow credit disbursements despite heavy expenditure mainly because of slow materials procurement and non-completion of PTW civil works, a condition for qualifying tubewell civil works for Bank disbursement, limited delegation of powers to project engineers in regard to contract awards (which was later remedied), poor utilization of tubewells due to unreliable and erratic power supply and vandalism, and poor agricultural extension. 23. Actual Project Cost. Table 8A of Part II gives a comparative statement of appraisal estimates and final costs. The project, as envisaged at appraisal, was only partially completed by the Credit closing date. When allowance is made for costs to complete, the total final cost would amount to Rs.3,495 million (US$140 million), representing a 170 percent cost overrun in nominal rupee terms or 55 percent in real rupee terms. Expressed in US dollars reflecting the depreciation of the rupee against the US dollar, the total overrun would be only 40 percent. As shown in Appendix 5, the overrun was caused mainly by price escalation (115 percent) and partly by quantity changes (55 percent) arising from design and other variations including an increase in 11 kV lines for each PTW from an average of 1.35 km at appraisal to 2.06 km during implementation. Some quantity changes also originated from the modernization of 500 existing PTWs in the flood zone instead of rehabilitating them as foreseen at appraisal. The cost of engineering and administration increased by 677 percent followed by modernized tubewells (245 percent), rehabilitated tubewells (239 percent), new tubewells (45 percent), management improvement (29 percent) and dedicated power supply (10 percent), over the respective appraisal estimates. 24. Excluding costs of dedicated power supply, the overall cost per tubewell at completion would be Rs.745,000 (new tubewell), Rs.700,000 (modernized tubewell) and Rs. 152,000 (rehabilitated tubewell) compared to Rs.513,000, Rs.305,000 and Rs.39,000 respectively, at appraisal. Translated in terms of hectare, these would amount to Rs.7,450/ha (new tubewells), 8 Rs.7,000/ha (modernized tubewells) and Rs. 1,900/ha (rehabilitated tubewells) compared to Rs.5,130/ha, Rs.3,050/ha and Rs.488/ha. 25. Project Financing. Because of considerable implementation delays combined with the limitation of Bank financing to operative wells only, credit disbursements have lagged seriously behind actual expenditures. The credit was able to finance only about US$26.6 million or merely 19 percent of the total project cost compared to the 70 percent envisaged at appraisal, severely increasing the burden on the state budget. This has raised into question GOB's ability to complete the project as originally planned. D. PROJECT SUSTAINABILITY 26. General. The ERR of the project is too low to be consistent with sustainable economic performance. The major challenge for the sustainability of the tubewell system established under the project is the provision of a reliable power supply and well-functioning O & M services. As the power supply cannot be assured by the BSEB in the immediate future, the only option would be to install diesel generating sets. In fact, the Bank extended necessary assistance including consultancy services for determining the economic viability of diesel generating sets and agreed to reimburse their cost under the National Water Management Project provided a small percentage of capital costs and 0 & M expenditure were borne by the beneficiaries. Unfortunately this was not experimented in a single scheme. As the MID would not have the financial resources to operate and maintain these schemes and their diesel sets, the best course of action would be to transfer them to farmers' organizations whether Panchayats or otherwise, and to intensify training and technical assistance programs (provided through the Water and Land Management Institute). The establishment and functioning of the two Regional and 18 Divisional Workshops for the provision of spare parts and repair of tubewells on behalf of farmers' organizations is a prerequisite to sustainability. The project may have an impact on the quality of groundwater due to the increase in fertilizer and pesticide use. 27. Cost Recovery. At appraisal, water rates in the states were expected to be increased to cover the full 0 & M expenses plus a reasonable portion of capital cost. No revision has taken place since 1983 although the electric tariff has been raised twice, the last one to Rs.120/Brake horse-power (BHP). Collection of water rates has persistently lagged behind and the average collection to billing has declined from 14 percent in 1988/89 to 2 percent in 1993/94. There is thus a clear need not only to secure collection of arrears but also to increase the present rates to ensure efficiency of water use and assure confidence for the GOB to enhance 0 & M allocation until such tubewell schemes are turned over to farmers' organizations. The present system of handing over tubewells to Panchayats is not based on prior planning, discussion and willingness of potential users. This appears to have been done in a routine manner without either preparing the benefiting farmers, or providing them with the required training and ensuring a clear definition of responsibilities of the different parties involved - MID, Panchayats and farmers. As a result, Panchayats, which have taken over, have presumably assumed it to be another "welfare" measure for funding by GOB. One option to dispel this misconception would be to demonstrate the success of this arrangement through organizing selective water users' associations who are willing and able to operate it successfully. Based on such experience, the scheme could be expanded. 28. At appraisal, it was expected that the power to PTWs and private shallow tubewells was to be supplied at a uniform rate of Rs.0.35 per kwh as metered supply. There had since been a change in charging for energy for PTWs from a metered rate to a monthly flat rate based on BHP installed - in 1991 Rs.90 per BHP/month and from 1993 Rs.120/BHP/month. These rates would correspond to the metered rates if these PTWs were to operate for 16 hrs/day as designed. Since, 9 however, the actual working hours of PTWs range from 3 to 8 hours per day, the effective tariff for these wells is about four times the tariff paid to private shallow tubewell owners (at Rs.0.35/kwh). MID is thus billed with high power charges for the unmetered supply which is equivalent to about Rs.2.00 per kwh on the basis of actual working hours of PTWs. There is a need to bring parity to the power tariff for PTWs and private tubewells for the unmetered supply. There is also a concomitant need to fix energy meters on tubewells. 29. Operation and Maintenance. An important project goal was to create high performance tubewell systems based on equality in water distribution that would allow farmers to increase their crop production. This has not been realized so far as there is presently no clear plan for 0 & M. The principal constraint is the decline in the quality and quantity of power availability. Other factors have also hampered performance, as indicated below: (i) unreliable water delivery particularly to tail-end farmers; (ii) delays in repairing pump units during the irrigation season; (iii) excessive conveyance system losses in rehabilitated tubewells, not using pipe systems; (iv) deteriorating maintenance due to low 0 & M budget; and (v) poor operational links between the MID, State Electricity Board and the Department of Agriculture especially at tubewell level. 30. The combined effect of these constraints has seriously affected cropping patterns, intensities and crop yields; and the area irrigated declined from 62 percent of the design command in 1974/75 to about 12 percent for project wells at present. Cost of rented water is high at around Rs.500/ha for three irrigations. Farmers still pay these high rates because of assured quantity and timely supply. The major prerequisites for a well-functioning 0 & M system concern adequate staffing, proper decentralized repair facilities, training, monitoring of tubewell performance and O & M funding, all of which need to be improved for better performance and sustainability. E. BANK PERFORMANCE Identification and Preparation. 31. The conceptual framework for the project was based on previous experience under the UP Tubewells Projects I and II, and the inclusion of modernization and rehabilitation components at the instance of the Bank was well in line with GOB's development priorities and with the Bank's strategy for the country. Preparation assistance to the government was carried out by three Bank missions composed mainly of groundwater specialists, irrigation engineers and electrical engineers. Although one of these missions included an agriculturist and a management consultant, neither of the three missions had a water management specialist nor a sociologist. Appraisal 32. Overall, the project appraisal identified project goals and established concise project objectives consistent with sectoral strategy. It included sensitivity analysis for one of the key variables - power supply. A thorough project appraisal was carried out with the participation of 11 professional specialists, again dominated by engineers (irrigation, groundwater and electrical), as 10 reflected in the design of the project to provide a reliable, timely and equitable irrigation service. However, there were inadequacies which made the appraisal deficient. 33. Design. Project design apparently relied heavily on the attractiveness of technical innovations on the assumption that the availability of an efficient and reliable irrigation system itself would provide adequate incentives for farmers to maximize net production benefits. The required linkages with extension services were not designed at appraisal. The lack of funding for agricultural extension was another lacuna under the project in supporting irrigated farming in tubewell command areas. M & E also was not properly designed at appraisal to play its role of providing project management with the performance indicators necessary for both forward planning and rectification of deficiencies in major factors such as power supply, water management and agricultural performance. 34. Technical. Sophisticated technology (particularly automatic operation) of new and modernized tubewells was directly transferred from the experience of Uttar Pradesh which had a demonstrated experience from the previous project (UP Tubewells Project, Credit 1004-IN, 1980), before its successful experience under the second project. It was too optimistic to expect Bihar to adopt a large number (500) of new wells without learning from a pilot operation in a state with a different socio-economic context, and paucity of effective and well-trained operators. 35. Economic. Appraisal estimates were optimistic. For example, the spread of private tubewells 'without the project' was ignored in estimating agricultural production in both financial and economic analysis. The SAR did not also quantify the risk to the project outcome of slippage on the financial and institutional capacity, when these were recognized to be important sources of project difficulty. The SAR did also not designate important variables as indicators for monitoring during supervision as a basis for indicating by how much the assessment of an operation's impact had improved or worsened. 36. The appraisal mission was advised during the decision meeting on November 27, 1985, that there was considerable public pressure against the creation of dedicated power lines, and that in the case of the UP Tubewells Project II (Credit 1332-IN), the Government of Uttar Pradesh had suggested to GOI that the dedicated power line strategy should be scrapped. It was also explained that the opposition had come from pump-set owners not connected to dedicated power lines and who received less reliable power than public tubewells on dedicated lines. The appraisal mission responded that "a reliable availability of power for efficient public tubewell operation is crucial and that in the absence of dedicated power lines the risks to the project would be unacceptable." At the request of the meeting, a sensitivity analysis was carried out at appraisal on the assumption of power availability for only 4-6 hr/day instead of up to 16 hr/day, as stipulated in the SAR. The ERR was still found to be acceptable at 16 percent. What was missed in this analysis was the neglect of farmers' response in the face of not only unreliability but also the erratic nature of the reduced power supply on which they could plan their future investment in irrigated crops. 37. This should have been followed up with investment in an alternative source of energy to mitigate the risks. The methodology followed at appraisal for risk analysis proved inadequate. 38. Institutional. The Bank was again over-optimistic in assuming that the proposed institutional reforms would help construction, operation and maintenance of tubewells effectively and efficiently, when the new Tubewell Wing was to inherit the same staff from the BWDC. 11 39. Sociological. A baseline survey should have been undertaken prior to appraisal to prepare for farmers' participation in a meaningful manner. The results of the survey proved futile as follow-up surveys were never carried out. 40. Commitment. There was commitment by GOB in the early years of the project as evidenced by the full allocation of counterpart funds for the first two years of the project. The commitment of beneficiaries was simply assumed on the grounds that a reliable, timely and equitable irrigation service would induce farmers to make investments in inputs and plant high yielding varieties of crops. This might have been a reasonable assumption if the state had an effective extension and credit service in place. Both extension and institutional credit had shortcomings at the time of appraisal. 41. Appraisal of Implementing Agency. This was sufficiently done and managerial and financial weaknesses were brought out with mitigating investments in institutional improvements. 42. Incentives for Sustainability. Adequate power supply constituted the key ingredient for the sustained operation of the tubewells and the project did attempt to provide a minimum of 16 hr/day through provision of dedicated power lines. 43. Skill Mix of Appraisal Team. The appraisal team consisted of 11 members representing specialized skills but not balanced with over-representation in some (irrigation engineering) and no representation in others (water management and a sociology). The inclusion of a water management specialist and a sociologist would have provided more insight into field channel improvement in rehabilitated wells and farmer participation in the operation and management of wells. Supervision 44. The performance of the supervision missions was also deficient. Twelve supervision missions were fielded over seven years from February 1987 to May 1994, at an average of one every seven months. There was no staff continuity between appraisal and the start of implementation. The staff employed on supervision were skilled in most of the relevant technical and economic areas but less skilled with respect to expertise in institutional analysis, water management, beneficiary participation and disbursement. The extent of continuity of staffing during implementation is reflected in the fact that about 67 percent of the project supervision missions had the same staff for eight missions. Most missions comprised at least two staff members. The water management specialists and sociologists were not at all available in any of the supervision missions and the management specialist took part in only one of the missions. Considering the incidence of low utilization of irrigation potential and management problems in the project, this represents a gross under-representation of critically useful and relevant expertise which was ignored even in the composition of the mission which undertook the mid-term review. 45. Successive supervision missions have expressed concern at continued poor performance and the Bank conveyed its concern to the Department of Economic Affairs, GOI by its letter dated September 9, 1991. The subsequent supervision missions reported no improvement but further shortfalls on account of funding constraints and a strike by engineering staff. The Bank followed it up with a letter threatening to suspend Borrower's rights to withdrawals from the Credit unless certain conditions were satisfactorily completed by April 30, 1992. Based on actions taken by GOB and a generally satisfactory status of compliance with the conditions, the threat of suspension of disbursement under the credit was lifted. Bank's reluctance to take a firm stand with the Borrower is reflected in the prolonged survival of the problem project. 12 46. Although Bank supervision missions repeatedly expressed concern over the slow utilization of irrigation potential, they did little to direct the project towards rectifying this deficiency. In fact, on the contrary, the Bank agreed to the deletion of dedicated feeder lines. The performance of the mid-term review mission in 1990 was poor. Although it was difficult for the mission to make an overall judgement on the adequacy of project design, it should have drawn attention to the requirement for some restructuring if project performance continued to be poor. It should have also fixed a date for possible restructuring. Even two years later, when the Bank realized the difficulty of continuing the construction of dedicated power lines, it failed to modify the corresponding covenant and the one on power supply for 16 hours. It also failed to restructure the project as warranted by its poor performance. 47. The Bank anticipated the important function of M & E in this type of project and made adequate provisions. However, despite repeated interventions by the supervision missions, the results of monitoring and evaluation activities did not meet requirements. 48. The Bank was flexible in agreeing to increasing the disbursement percentage for civil works but its conditions for release of funds for completed/operative wells only, though well- intended, did not help GOB take full advantage of the increased percentage. As a result, there was a wide gap between expenditure incurred and disbursement claimed, throwing a severe burden on limited state funds. F. BORROWER PERFORMANCE Identification and Preparation 49. The project was prepared by MID and BSEB in close coordination with the Central Water Commission (CWC) and Ministry of Water Resources (MOWR) in GOI. GOB engineers visited Uttar Pradesh in 1984 and concluded that any new PTWs in Bihar should incorporate improved technology similar to that introduced under the Uttar Pradesh Tubewells I and II Projects. As recommended by the Bank identification mission in February 1985, GOB broadened the project scope to include rehabilitation and/or modernization of existing PTWs. GOB also made a decision to replace the BWDC with a new Tubewell Wing within MID, with responsibility for construction, operation and maintenance of all PTWs. A project preparation report was compiled for MID by a consulting firm. The project preparation, however, was deficient. Project coverage could have been more concentrated rather than scattered as prepared. This has contributed to implementation difficulties. Another aspect which has been transplanted without deeper study is the sophisticated system of operation for a project to be implemented for the first time in Bihar. Also, the experience of dedicated feeder lines in UP was not fully absorbed. 50. Given the first experience of a Bank-funded project for the MID, the PTW's poor track record, and the proposed institutional reorganization, GOB was too optimistic to keep the project size large with some 500 new tubewells. Implementation 51. The performance of GOB and the implementing agencies was deficient in the actual implementation of the project. GOB, as well as the Bank, under-estimated the risk of implementation delays due to coordination problems not only between MID and BSEB but also between MID and the agricultural extension services. Only four new and 33 modernized tubewells could be completed in all respects until 1991. Coordination has since improved but is still below expectations. Other major problems which thwarted progress include: 13 (i) Planning and Quality Control. The cluster concept of planning and execution of work was not followed, resulting in dispersed works constraining speedy completion and energization of completed wells. Quality control also proved difficult due to a large number of tubewells on widely scattered sites, exacerbated by concurrent implementation of modernization and rehabilitation works. The expertise of the Groundwater Directorate was not utilized in siting, drilling and tubewell design, and this, combined with the absence of independent quality control unit, affected the quality of completed wells; (ii) Power Constraint. Tubewell energization was seriously delayed even after the proposal to erect dedicated power lines was dropped in 1992. There was a time lag of two years between drilling and completion of civil works and commissioning of tubewells. Part of the delay can be attributed to the lack of coordination between MID and BSEB. The power supply to PTW has been erratic, ranging from three to eight hrs/day with the occasional theft of conductors, transformers and excessive fluctuations. Some power is available at night when demand is low but farmers are reluctant to work during the night hours. The non-availability of sufficient and timely power has made tubewell irrigation unreliable; (iii) Underutilization of Facilities. The location of cluster buildings has not been done properly since some such as the one at Bhakra in Muzaffarpur district, was not occupied. Several junior engineers were not provided with vehicles and the condition of vehicles used by other officers was also not satisfactory; (iv) Workshops. The workshop facilities at regional and divisional level were not augmented and reliance was placed on the market for repairs with the result that the breakdowns remained unduly long; (v) Coordination. There was no coordination between MID and the Department of Agriculture over extension services in the tubewell command. The farmers are not aware of water use efficiency as they are operating 2-4 outlets at a time on a loop of the distribution network; and (vi) Inadequate Delegation. Financial powers of project officers were inadequate although this was later remedied by enhanced delegated authority. No regular payments could be made to agencies as the authority to draw cheques was vested in project officers 4-6 months late on a yearly basis. 52. The project has provided training to 227 engineers (executive engineer - 2, assistant engineer - 72 and junior engineer - 153), 82 electricians, 42 pump fitters, 202 operators and 636 beneficiaries. The Water and Land Management Institute has training capabilities for different aspects of water management and other subjects. It is not adequately utilized by the project as only 22 persons in one batch have so far been trained from June 1991 to September 1991. 53. All the studies proposed under the project were completed. However, there was little impact of the studies on project design or implementation. 54. The monitoring unit with one executive engineer and two assistant engineers is understaffed. Its performance failed to provide project management with the performance indicators necessary for both forward planning and rectification of deficiencies in initial years. An 14 attempt was made by the Bank to promote computer processing of data, but little progress was made. This has not only affected project performance but also hindered forward planning in public tubewell development in Bihar. 55. Compliance with covenants was partial. Some covenants were no longer applicable and required revisions particularly those relating to water charges, 0 & M and dedicated power lines, which at best can only be considered partially complied with. GOB was not in compliance with the essential covenant on power supply. The question of water charges has been a long- standing and pervasive problem in India. Attempts to resolve the problem at the level of individual projects have met with negligible success. G. ASSESSMENT OF OUTCOME 56. The project's outcome is unsatisfactory as the project has failed to achieve most of its objectives and has not yielded, nor is it expected to generate, substantial development impact without additional investment, particularly in diesel generating sets. H. FUTURE OPERATION 57. Following discussion with MID on future operation/action plan concerning completion of all ongoing works and also to maximize net project benefits, MID has agreed to: (a) complete all ongoing works by March 1998 and make available adequate funds for this purpose and refrain from constructing any new structures before completing all ongoing schemes in view of GOB's budgetary constraints; (b) continue transferring 0 & M responsibility for tubewells to Panchayats/farmers' organizations and also carry out a thorough review of the tubewells previously handed over and undertake remedial measures for improved performance; (c) provide adequate 0 & M funding until all tubewells are turned over to Panchayats/farmers' organizations; (d) allocate sufficient funding for training in installation and operation of improved electrical regulation system already procured for the efficient operation of the tubewells but not in use at present for want of adequate training; (e) implement a pilot scheme to install diesel generating sets in about 10 selected tubewells to test the effectiveness of operation and farmers' willingness to bear full 0 & M cost and a portion of the capital cost; and (f) monitor tubewell performance through collection of data on operational hours per tubewell, yield of the well, pumping power required per well, irrigated potential created, actual area irrigated, cropping patterns, intensities and yields in the kharif, rabi and hot seasons on a continuous basis. 58. It is recommended that an impact evaluation mission from the Bank visit the state around 1997 to evaluate the performance of project wells. I. LESSONS LEARNED 59. The main lessons learned during project implementation are as follows: (i) Given the past two decades of poor PTW performance and the institutional reorganization required to achieve improvements, the proposed installation of a large number (500) of new tubewells without the prior benefit of a pilot scale operation, as in Uttar Pradesh, was very ambitious. Small farmers' interest, which was sought to be promoted by proper siting of new wells, can 15 be, for the present time, secured by selecting wells for modernization or rehabilitation in command areas dominated by the target group. (ii) The provision of dedicated power lines with power availability of 16 hours/day at peak demand against a background of poor power generation and poor supply was not realistic. In future, project power supply should be assessed at the state level to ensure that it is adequate for the project. (iii) The project experience demonstrates the critical significance of state finance in Bihar for satisfactory implementation and the need to ensure an adequate flow of funds from the Credit. Limiting Bank financing to operative wells only, though well-intended (by restricting the start-up of numerous works and the completion of few) hampered the reimbursement of counterpart funds and the corresponding legal covenant required adjustment to local circumstances. A revolving fund at the state level is also required in addition to the special account established with GOI. (iv) Groundwater development based on PTWs would increasingly face problems of poor performance, both in terms of productivity and equity, unless proper action is taken for power supply and effective transfer to beneficiaries. The existing system would, without significant changes in the management and financing, deteriorate as a result of pressure on already strained budgetary resources. (v) The re-estimated dismally low ERR of the project suggests that even with improved technology, investment in public tubewells may not necessarily be economically viable. Further investment in public tubewells should therefore be reviewed, in order to encourage private investment in shallow tubewells while resolving most of the problems now faced with public tubewells through their transfer to Panchayats after ensuring certain follow-up steps including adequate power supply and repair facilities. (vi) There is a need to address issues related to Panchayats, farmers' organizations and 0 & M of PTWs comprehensively at preparation and appraisal of the project to ensure smooth implementation. (vii) Monitoring and evaluation of tubewell irrigation and agricultural performance data deserves high priority as a critical tool for rectifying deficiencies and sustained use of the irrigation potential created. 16 PART II: STATISTICAL TABLES Table 1: Summary of Assessments A. Achievement of objectivei Substantial Partia1 Negligible Not Applicable V)V) VI) V) Macro polizies Li l F [D Sector policies Ei EI ED El Financial objectives EJ ED L7 M Institutional development El Ei] Ei7 Eli Physical objectives EJ FI Li Ei Poverty reduction 7i Ei F9 Li Gender issues LJ Li Li L7 Other social objectives Li Li Li L7 Environmental objectives Li 7/ Li Li Public sector management [] Ei Fi M Private sector development L Li Li 2/I Other (specify) Li Li Li Li B. Project sustainability Likely Unlikel Uncertain W/) W/) V) Li F9 L Highly C. Bank performance satisfactory Satisfactory Deficient V/) V) V) Identification Li Li7L Preparation assistance l Li Li Appraisal Li L Li Supervision L D Li 17 Highly D. Borrower performance satisfactory Satisfactory Deficient V/) V) V/) Preparation ;Li F I Implementation F-1 Ei 7 Covenant compliance ED Ei F7 Operation (if applicable) Li ED [Z Highly Highly E. Assessment of outcome satisfactory Satisfactory Unsatisfactory unsatisfactory i Li 18 Table 2: Related Bank Loans/Credits Loan/credit title Purpose Year of approval Status Preceding operations 1. Bihar Agricultural Credit Mobilize institutional credit to 1974 Closed. PCR issued. Project (Cr.440-IN) US$32 M finance construction of new tubewell facilities. 2. Bihar Agricultural Extension & Reorganize & stengthen the agri- 1977 Closed. PCR issued Research Project (Cr.761-IN) cultural extension service & related Dec. 1985. US$8 M adaptive research throughout the state. 3. National Seeds II Project Continue to ensure that availability 1978 Closed. PCR issued for (Cr.816-IN) US$25 M of HYV seed nationwide would not Seeds I & II, June 1987. be a constraint to agricultural development, by further developing the institutional structure of the seed industry and adding to the existing seed processing capacity. Five states, Bihar, UP, Orissa, Rajasthan & Karnataka were involved in this project. 4. Subernarekha Irrigation Project Increase agricultural production 1982 Closed. PCR issued (Cr.1289-IN) US$127 M through irrigation of an area of April 1990. about 255,000 ha in the States of Bihar, Orissa & West Bengal, to provide municipal & industrial water supplies and to provide flood moderation on the river in West Bengal and Orissa. 5. UP Second Public Tubewell Construct improved public tubewell 1983 Closed. PCR issued Project (Cr.1332-IN) USS101 M systems, modernize existing standard Dec. 1992. tubewells and connect to exclusive 11 kV feeder lines of existing standard tubewell systems. 6. National Agricultural Research Strengthen location-specific research 1985 Ongoing Project II (Cr.1631-IN) at the level of the agro-climatic US$72.1 M zones of India including Bihar providing needed field-oriented research support to the ongoing projects. 6. National Agricultural Research Help strengthen agricultural research Closed. PCR issued Project (Cr.855-IN) USS27 M at state agricultural universities. June 1990. Following operations 1. West Bengal Minor Irrigation Upgrade and construct public 1986 Closed. PCR under Project (Cr.1619-IN) US$99 M tubewell irrigation systems, open dug preparation. wells and river-lift installations. 2. National Agricultural Extension Introduce T & V system in Himachal 1987 Ongoing Project III (Cr.1754-IN) Pradesh, Bihar and Uttar Pradesh; US$85M further strengthen the reorganized agricultural extension and linkages between extension and research in Assam. 9. National Water Management Increase agricultural output pro- 1987 Ongoing Project (Cr.1770-IN) US$114 M viding farmers with a more reliable & predictable irrigated supply. 10. Bihar Plateau Development Help GOB efforts to increase rural 1992 Ongoing Project (Cr.2439-IN) incomes & reduce the incidence of poverty in the plateau area of Bihar. 19 Table 3: Project Timetable Date actual/ Steps in project cycle Date planned latest estimate Identification (Executive Project Summary) -_February 1985 Preparation -_May 1985' Appraisal September 1985 September/October 1985 Negotiations March 1986 16-23 June 1986 Letter of development policy (if applicable) NA. NA. Board presentation May 1986 October 16, 1986 Signing January 13, 1987 Effectiveness January 1987 April 13, 1987 First tranche release (if applicable) NA. NA. Mid-term review (if applicable) February 19902/ 5-9 March 1990 Second (and third) tranche release (if applicable) NA. NA. Project completion September 1993 November 30, 1993 Loan closing May 31, 1994 May 31, 1994 N.A. = Not applicable. 1/ Time taken to prepare 6 months, prepared by GOB with assistance from IDA. 2/ According to Schedule 2, Para 7, of the Project Agreement, GOB is required to furnish to the Association by December 31, 1989, for its review and comments, draft terms of reference for undertaking a mid-term review of the project. This review was tentatively scheduled for the week of February 5, 1990. Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual (US$ thousands) FY86 FY87 FY88 FY89 FY90 FY91 FY92Y FY93 FY94 FY95 Appraisal - 1,900 8,100 17,600 29,800 44,100 56,300 65,100 68,000 68,000 Revised estimate'l/ - 1,900 8,100 17,600 29,800 44,100 10,600 19,400 22,300 22,300 Actual - - 5,597 9,402 10,808 14,220 17,515 18,544 18,884 26,640 Actual as % of revised - - 69 53 36 32 165 96 85 119V estimate Date of final disbursement November 21, 1994 1/ Cancellation as of December 5, 1991 - USS45.7 million (SDR 40 million). 2/ Exceeds 100% becausc of USS depreciation against SDR. In terms of SDR, actual disbursement was 19.5 million against the revised estimate of 19.5 million, giving 100%. 20 Table 5: Key Indicators for Project Implementation I. Key implementation indicators in Estimated Actual SAR/ President's Report Appraisal ApprisalRevised 1. New tubewells (No.) 500 500 89 2. Modernized tubewells (No.) 1,000 1,500 431 3. Rehabilitated tubewells (No.) 3,712 3,212 2,354 II. Modified indicators (if applicable) 1. 2. NA. 3. III. Other indicators (if applicable) 1. Dedicated power lines (No.) 5,212 5,212 624 2. Average length of conductors (km) 7,036 7,036 4,697 3. Existing power lines (No.) -_- 1,656 1/ Average length of conductors at 2.06 km for dedicated power lines (624) plus existing power lines (1,656) totalling 2,280 tubewells. Table 6: Key Indicators for Project Operation (Not identified at appraisal) Table 7: Studies Included in Project Purpose as defined Study at appraisal/redefined Status Impact of study 1. Agro-economic base- Study of existing facilities Survey completed Negligible line survey and new lands to be served by project tubewells. 2. Cost Recovery study Introduce an improved Study completed Water rates not raised water charges system. 3. Management study Assist in developing an Study completed Negligible efficient management structure for the newly created Tubewell Wing. Table 8A: Project Costs Project Components Appraisal Estimate Actual Expenditure up to Costs to Complete3/ from Final Cost Credit Closure (May 31, 94) May 31, 94 to March 31, 98 (Rs million) (USS million) (Rs million) (US$ mitlion)2/ (Rs million) (US$ million) (Rs million) (US$ million) 1. New tubewelt systems 256.7 19.7 62.4 3.2 310.0 9.9 372.4 13.1 2. Modernized distribution 304.6 23.4 361.0 14.6 690.0 22.0 1,051.0 36.6 systems on existing tubewetts 3. Rehabilitation of existing 144.4 11.1 256.4 13.6 232.0 7.4 488.4 21.0 tubewelts 4. Dedicated power supply 355.7 27.4 291.0 17.9 102.0 3.2 393.0 21.1 (existing & new tubewells) 5. Management improvement 95.7 7.4 35.5 1.6 88.0 2.8 123.5 4.4 6. Engineering & administration 139.1 10.7 653.4 30.1 413.0 13.2 1,066.4 43.3 Total Project cost 1,296.2 99.7 1,659.7 81.0 1,835.0 58.5 3,494.7 139.5 1/ Physical and price contingencies identified with specific components. 2/ Dollar figures based on annual expenditures using the following exchange rates: 1987 = Rsl2.962; 1988 = Rs13.917; 1989 = Rsl6.226; 1990 = Rsl7.504; 1991 = Rs22.742; 1992 = Rs25.918; 1993 = Rs30.493; 1994 and after = Rs3l.371. 3/ Costs based on annual estimates made by MID. 22 Table 8B: Project Financing Source Appraisal Estimate Actual/latest Estimate (US$ million) (US$ million) IDA 68.0 26.6 Cofinancing Institutions Nil Nil Other external sources Nil Nil Domestic contribution 31.7 112.9 TOTAL 99.7 139.5 Table 9: Economic Costs and Benefits Appraisal Estimate ICR Estimate Incremental foodgrain production 247,000 tons/year 34,000 tons/year at full development Incremental wheat production at 146,000 tons/year 14,000 tons/year full development Net Present Value (Rs million) 1,546 -810 Economic Rate of Return_(%) - Whole Project 33 2.3 - New Tubewells 32 -20 - Modernized Tubewells 42 4.4 - Rehabilitated Tubewells 29 2.9 Assumptions: Project life (years) 25 25 Standard conversion factor 0.8 0.9 Unskilled labour valued at: 50% of financial wage rate 90% of financial wage rate Financial wages (Rs/day) of 10.5 35 unskilled labour ._1_ _1 23 Table 10: Status of Legal Covenants India Bihar Public Tubewell Project Agreement/ Covenant Type Present Original Revised Description of Covenant Comments Section Status' Fulfillment Fulfillment Date Date 3.01(a) Accounts C // // Maintain separate accounts and and furnish to IDA certified copies of accounts & financial statements within 9 months from end of financial year. 3.01(b) Accounts/Audit Soon // // Have accounts audited annually Audit Report - overall & furnish to IDA on finalization Account & Audit a report of the audit. Report SOE's for period April 2 - March 31, 1993: yet to be received. 3.04(a) Regulatory/ CD 12/31/87 // Prepare draft TOR for a water See para 3.04(b). Institutional charge system survey. action 3.04(b) Regulatory/ CP 12/31/88 // Furnish a proposal for the GOB has decided to Institutional establishment of a water charge transfer all TV in- action system together with a timetable stallations to Pan- for its implementation. chayats for O&M. This resolves O&M cost recovery through water charges. GOB yet to hand over all tubewells to I_ Panchayats. 3.04(c) - do - CP 07/31/89 // Adopt & implement an irrigation See remarks in 3.04(b) water charge system. above. 3.05 - do - CP // // Maintain irrigation water charges See remarks in 3.04(b) at levels adequate to cover O&M above. and a reasonable portion of investment costs. SCH.2(la) Implementation C // // Locate, plan & design works I I under part A-C of the project. SCH.2(1b) - do - C // // Operate & maintain irrigation works under part A. SCH.2(1c) - do - CD 03/01/87 // Prepare draft design & O&M manuals for tubewell system. SCH.2(1d) Management C // // Sanction staff positions in Tube- aspects of the well Wing in accordance with project staffing schedules satisfactory to IDA. SCH.2(le) - do - CP // // Provide adequate staffing facilities services for agricultural extension to operational extension services, throughout the project area. SCH.2(2a) - do - C // // Maintain a Project Coordinating Unit within Tubewell Wing. SCH.2(2b) - do - C // // Maintain a Project Coordinating Unit within Tubewell Wing. 24 Agreement/ Covenant Type Present Original Revised Description of Covenant Comments Section Status' Fulfillment Fulfillment Date Date SCH.2(3a) Monitoring/ CD 03/31/87 // Furnish to IDA for review, draft Reviews work plans and schedules for M&E activities. SCH.2(3b) Monitoring/ C 07/01/87 // Revise above plans for M&E. Reviews SCH.2(4a) Management C // // Carry out a Management Study aspects of the of TW. project SCH.2(4b) - do - CP 12/31/87 // Furnish to IDA for its review, the results of above Management Study and carry out its recommendations. SCH.2(5a) Implementation NC // // Install & maintain in project area Dedicated power lines dedicated & independent 11 kV were withdrawn by the electric feeder lines to energize Bank in 1992. part A tubewells. SCH.2(Sb) - do - NC // // Provide electric power at Power supply erratic. minimum of 16 hrs per day at Diesel generating sets peak demand periods to tubewell to be provided. irrigation system under part A. SCH.6b Management CD 07/31/87 // Carry out baseline agro-socio- Study has been aspects of the economic survey. completed. project SCH.6c Monitoring NC // // Carry out M&E activities recommended under above agro- socioeconomic survey. SCH.7a Management C 12/31/89 // Furnish to IDA for its review, aspects of the draft TORs for mid-term review. project SCH.7b - do - C 06/30/90 // Carry out such mid-term review. SCH.7c - do - C // // Carry out adjustments to project required following mid-term review. SCH.8 Monitoring Soon 03/31/87 // Furnish to IDA semi-annual Reports due April- review & reports covering periods April 1 Sept.93 & Oct.-March reporting to Sept.30 & Oct.1 to March 31. 94. 1 C = Covenant complied with; CD - complied with after delay; CP = complied with partially; NC = not complied with. 25 Table 11: Concurrence with Operational Manual Statements Statement number and title Describe and comment on lack of compliance 1. OMS 2.25 Cost recovery policy The OMS emphasizes the importance of recovering the full cost of operation and maintenance of irrigation schemes with a reasonable proportion of investment cost, subject to repayment capacity of the beneficiaries. Water rates should have been raised for this purpose but this was delayed. Meanwhile, the Government decided to transfer all tubewells to Panchayats for operation & maintenance, resolving cost recovery through water rates. However, GOB has yet to hand over all tubewells to Panchayats. Table 12: Bank Resources: Staff Inputs Planned Revised Actual Stage of poeta e Weeks US$ Weeks US$ Weeks US$ project cycle Through appraisal NA. NA. NA. NA. 81.9 NA. Appraisal-Board NA. NA. NA. NA. 44.3 NA. Board-effectiveness NA. NA. NA. NA. 6.7 NA. Supervision NA. NA. NA. NA. 65.7 NA. Completion NA. NA. NA. NA. 15.0 NA. TOTAL 213.6 26 Table 13: Bank Resources: Missions Performance rating Number Specialized Implemen- Develop- Stage of Month/ of Days in staff skills tation ment Types of project cycle year persons field represented/ status objectives problems2 Through appraisal: Preparation I Feb.1985 3 14 IE,GE,EE Preparation 2 May 1985 7 19 EC,IE(2),GE, EE,AG,MS Preparation 3 July 1985 1 8 EE Appraisal through Sept.1985 11 27 EC(2),IE(3), - - - Board approval ES.AR,GE, EE.AG,PF Board approval - - - - - - - through effectiveness Supervision: 1 Feb. 87 4 10 IE,GE(2),EE 2 1 M 2 April 88 5 4 IE.GE(2),EE 2 1 M 3 April 89 5 5 IE(2),SPO, 3 2 M PE,EE 4 Dec. 89 3 5 IE.PE,EE 3 2 M 5 March 90 6 6 IE,PE(2), 3 3 M GE(2),EE 6 Oct. 90 4 5 IE,EC,EE,DS 3 3 F,M 7 Jan. 91 6 9 EC,IE,PE, 3 3 M AG,EE, DS 8 July 91 4 5 IE.PE,EE, 4 3 M AG 9 Oct/Nov.91 2 4 EC,IE 4 3 M 10 May 92 2 3 EC,IE 3 3 M 11 Aug. 93 1 4 IE 2 2 M 12 May 94 2 5 IE(2) 3 3 M Completion Oct. 94 4 8 EC,IE(2),AG - - - 11 AG = Agriculturist: AR = Agricultural Research Specialist; DS = Distribution System Specialist; EC = Economist; EE Electrical Engineer, GE - Groundwater Engineer; IE = Irrigation Engineer; MS = Management Specialist; PE = Procurement Engineer, PF Programmes Specialist (Finance); SPO = Senior Project Officer. 2/ F = Financial; M = Management. 27 IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (CREDIT NO. 1737-IN) Appendix 1. FAO/CP Mission Aide Memoire A. Introduction 1. An FAO/World Bank Cooperative Program team comprising Messrs K. Selvavinayagam (Financial Analyst, Mission Leader) A.S. Malhotra (Irrigation Engineer) and B.C. Biswas (Agronomist), with the participation of Mr. N.K. Bandyopadhyay (Irrigation Engineer) from the World Bank Resident Mission, New Delhi visited Bihar from 3 to 10 October, 1994 to review implementation performance of the Bihar Public Tubewell Project and prepare its Implementation Completion Report (ICR). Mr. J-.P. Baudelaire, the Task manager, joined the mission on 9 October. After initial meetings with Mr. A.R. Sinha, the Project Coordinator and other Senior Officials of the Minor Irrigation Department (MID), Bihar State Electricity Board (BSEB) and the Department of Agriculture (DOA), the mission made field visits to some tubewells - newly established, modernized and rehabilitated - located in selected districts (Patna, Nawadah, Saran, Gopalganj, Motihari, Muzaffarpur and Begusarai) and held discussions with the concerned project staff and farmers as well as Panchayats which received from MID tubewells for operation and management. 2. The mission wishes to thank all concerned staff for the assistance and hospitality extended to the mission during its stay in the State. B. Statement of Project Objectives Project Objectives 3. The State of Bihar was the third of the Indian States to adopt the improved technology for the deep tubewells and distribution system introduced under U.P. Tubewells Projects (Cr. 1004- IN and Cr. 1332-IN). As in these tubewell Projects, the objective of the Bihar Public Tubewell Project was to increase agricultural production by improving and expanding the use of Bihar's considerable groundwater potential. This was to be achieved by (a) introducing improved tubewell technology that would eliminate the planning and design problems inherent in Bihar's existing public tubewells (PTWS); (b) undertaking a phased program to rehabilitate and modernize most of Bihar's existing PTWs; (c) strengthening the institution responsible for PTW activities to ensure that project works can be effectively and efficiently implemented as well as operated and maintained; and (d) increasing agricultural production, employment and incomes especially for Bihar's small farmers. Project Components 4. Project components included: (i) construction of about 500 new tubewells systems to improved design standards to deliver about 150 M3/hr to serve individual command areas of about 100 hectares each; (ii) modernization of about 1000 tubewells; (iii) rehabilitation of 3712 tubewells; (iv) construction of dedicated power lines to about 5200 tubewells; (v) improvements in tubewell 28 management; and (vi) provision of buildings, vehicles, equipment, staff training, M and E, and special studies. 5. The project was planned to be implemented over seven years and the total project cost including physical and price contingencies was estimated at US$ 99.7 million (Rs. 1296.2 million). The IDA Credit of US$ 68.0 million was to finance about 70% of the total project cost excluding taxes and duties. The remaining portion of the cost was to be met by GOB/GOI. 6. The project was revised in March 1990 by increasing the tubewells for modernization by 500 and reducing the tubewells for rehabilitation by a similar number. The erection of dedicated power lines did not make any headway due to general power shortage in the state and resentment among other power users which has resulted in theft of conductors in many lines. On the recommendation of GOB, the provision of dedicated power lines was deleted by the Bank. In September 1990 the Credit disbursement percentage was increased in respect of tubewell and energization works from 75% to 90% as part of the Gulf Initiative to alleviate GOI's foreign exchange constraints. In addition, a sum of US$ 45.7 million (SDR 40 million) was cancelled due to substantial depreciation of the Rupee against the US dollar. C. Evaluation of Project Objectives 7. The project was based on the sound foundation that it would complement groundwater development in the private sector and be selective in the target group of beneficiaries to be reached; tubewell siting criteria were designed to achieve this goal. The project took advantage of technical principles developed under the Uttar Pradesh Public Tubewell II Project. Consequently, the project objectives were clear and important for the proper development of the state's groundwater potentials. But the project lacked realism particularly relating to the installation of new tubewells as it was too optimistic to expect quick implementation results, given the institutional reorganization and past two decades of poor performance of PTWs. The project was also complex because the proposed number (5212) of tubewells were to be sited in scattered locations over some 34 of the state's districts and implemented within seven years and such implementation to be effective required good coordination with BSEB and DOA. This scale and spread of project activities also naturally called for high quality management and skillful planning of logistics and implementation. Project management has been deficient on all three scores. The importance of water management was not very explicitly emphasized at appraisal, although it constituted a key element in equitable water allocation and water use efficiency. D. Achievement of Project Objectives 8. The project has partially achieved its physical objectives. Its achievement of institutional development objectives was negligible. Macroeconomic policies and financial objectives were not applicable to this project. There is a significant shortfall in the achievement of physical objectives as shown below: 29 Target and Achievements Component Planned at Fully completed Additional Irrig. Potential (ha) appraisal and energized Target Actual Utilization (Revised) Creation Original Revised New Tubewell 500 500 89 50000 8,900 1144 Modernized T/W 1000 1500 431 150000 43,100 6578 Rehabilitated T/W 3712 3212 2354 257000 188,320 19783 Dedicated Power* (5212) (5212) (624) - - - Lines TOTAL: 5212 5212 2874 457000 240320 27505 * Denotes numbers, each with an average length of 2.06 Km. 9. As shown above, the shortfall is both in terms of tubewell system completed, potential realized and area actually irrigated under the project. Achievement of tubewell completion and energization was 18% (New tubewells), 29% (Modernized tubewell) and 73% (rehabilitated tubewell). Area actually irrigated was much lower at 13% (new tubewell) 15% (Modernized tubewell) and 11% (rehabilitated tubewells) of additional potential created. The principal reason for the low utilization is the shortage of power supply, ranging from 5 to 8 hrs. per day. Poor management of tubewells has also affected performance. As a result, productive levels have been substantially less than anticipated at project appraisal. The economic viability of tubewell irrigation is, therefore, likely to be much lower than envisaged at appraisal. Under the present power and managerial constraints, the prospect for a good economic rate of return looks bleak. An estimate will be made and presented in the ICR. Improved Tubewell Operation System 10. All new and modernized tubewells under the project were required to be equipped with well regulated and controlled water distribution system to be operated with automatic switchgear. Water was to be released in the distribution system in response to the irrigation demand. A capacitor and a single phase preventer was also to be fixed to protect the motor from voltage fluctuations and burning. Field visits indicate that the above improved system of water regulation and automatic operation of pumping unit have not been implemented under the project. The pump's panel controller was found installed in only one tubewell but was lying in disuse due to some electronic fault. It was explained by the field officers that the staff is not yet trained for the installation and operation of such sophisticated equipment and prefers to use the old system comprising of switch, starter Voltmeter & Amperemeter. 11. Under the improved design standards, the tubewell was provided with a buried pipe distribution system in the form of two loops, each serving about 50 ha and outlet valves on pipe systems commanding 4-5 ha. The farmer is to operate only one outlet on a loop so that he gets about 75M3/hr and could irrigate his fields with minimum water application time and seepage losses in his field channel. Field observations, however, indicate that 2 to 4 outlets are opened at a 30 time in each loop and water is diverted in different field channels entailing heavy field losses and increased water application time. Since the charges for water utilization are based on acreage basis, the farmers are not tuned to proper water management and water use efficiency. MID had difficulty in enforcing the operation of the water distribution system as proposed under the project, due to power shortage and inadequate farmer organization. 12. Since the electrical equipment for the improved regulation system has already been procured for most of the tubewells, it would be desirable to train the field staff and instal the said equipment on new and modernized tubewells at the earliest. Despite the difficulties and the lack of progress in automatic operation of pumping units, the improved technology consisting of buried pipe system works has been adopted. 13. The Project financed a number of activities to improve management. Although the bulk of them were carried out, weakness in management persisted, exacerbated by high turnover of staff at senior levels; for example there were eight Project Coordinators in seven years. In particular, there was little improvement in the monitoring and evaluation studies. Agro-economic base line survey was not followed up to provide a reliable impact of crop production and small farmer participation. Some cluster buildings such as the one at Bakhara in Muzaffarpur were not occupied; several Junior Engineers were not provided with vehicles to ensure their mobility. 14. MID was required to set up two regional centers and 10 Divisional workshops to support maintenance during construction and for O&M of all public tubewells in the state. This infrastructure would have been helpful for the timely repair of tubewells and to reduce the breakdowns. Nothing has been done in this direction and the repairs are generally being arranged from the market which takes unduly long time. As a result, the inadequacy of the tubewell maintenance together with shortage of power and poor management have made tubewell irrigation totally unreliable. 15. Water rates were not revised as foreseen at appraisal and the issue was intended to be resolved through handing over of completed tubewells to the panchayats or their committees who could fix up reasonable water rates for the O&M. However, sustainability of operation still remains a question as Panchayats look to GOB for funding and to MID for repairs. Their ability to collect water rates, except in a few cases, is in doubt. 16. Although equity was the major justification for the investment in new tubewells, the equity impact of the project seems to be modest. More reliable data are required to establish the extent of benefits to small farmers under the project. E. Main Factors Affecting the Project 17. Factors not generally subject to Government control: These included law and order problems, Bank's restrictive condition on release of funds only against completed/operative wells, and the inadequacy of the management study. These factors have prevented the project from achieving its full objectives. 18. Factors generally subject to Government control: These included delay in appointment of key staff, lack of adequate counterpart funds, inadequate levels of water charges (which have not been revised since 1983), poor billing and collection of billed water charges. These had substantially affected the implementation pace of tubewells installations. 19. Factors generally subject to Implementing Agency control: The project has encountered continuous implementation problems. There was insufficient advance planning and updating of implementation, procurement and O&M schedules, lack of coordination between State Electricity Board and Department of Agriculture, and delays in institution-building measures such as M&E 31 and training. Procurement progress was slow mainly because of the cumbersome and time- consuming procedures followed for evaluation of bids and finalization of awards. Staff turnover was frequent. Common complaints from farmers were lack of power for reliable irrigation, unscheduled deliveries, absent operator, and incorrect system design not commanding some fields. The combined effect of these factors was reflected in substantial under achievement of project objectives. Actual Project Cost 20. At credit closure, the total expenditure under the project amounted to Rs. 1660 million (US$ 90 million), representing a cost overrun of 28% in nominal terms. Because of the depreciation of the rupee against the US dollar, there was a cost underrun of 10% in dollar terms. The increase in cost is attributed partly to price escalation and partly to quantity changes arising from design and other variations including increase in I IKv lines for each PTW from the average 1.35 Km at appraisal to 2.35 Km during implementation. Some quantity changes also originated from modernization of 500 existing PTWs in the flood zone instead of rehabilitating them as foreseen at appraisal. It should be noted that a further cost of about Rs. 1835 million are estimated by MID to complete the project fully by 1997/98. F. Project Sustainability General 21. The major challenge for the sustainability of the tubewell system established under the project is the provision of reliable power supply and adequate O&M. As power supply cannot be assured by the Electricity Board in the immediate future, the only option would be to instal diesel generating sets. As the MID would not have financial resources to operate and maintain these schemes and their diesel sets, the best course of action would be to transfer them to farmers' organizations whether Panchayats or otherwise and to intensify training and technical assistance programs (provided through the Water and Land Management Institute). The establishment and functioning of the 2 Regional and 18 Divisional workshops for the provision of spare parts and repair of tubewell on behalf of farmers' organizations is a prerequisite to sustainability. Cost Recovery 22. At appraisal, water rates in the states were expected to be increased to cover the full O&M expenses plus a reasonable portion of capital cost. No revision has taken place since 1983 although electric tariff has been raised twice, the last one to Rs. 120/BHP. Collection of water rates has persistently lagged behind and the average collection to billing has declined from 14% in 1988/89 to 2% in 1993/94. There is thus a clear need not only to secure collection of arrears but also to increase the present rates to ensure efficiency of water use and allow for the GOB to enhance O&M allocation until such tubewell schemes are turned over to farmers' organizations. The present system of handing over tubewells to Panchayats is not based on prior planning, discussion and willingness of potential users. This appears to have been done in a routine manner without either preparing the benefiting farmers, or providing them with required training and ensuring, a clear definition of responsibilities of the different parties involved-MID, Panchayats and farmers. As a result, Panchayats, which have taken over, have presumably assumed it to be another "welfare" measure for funding by GOB. One option to dispel this misconception would be to demonstrate the success of this arrangement through organizing selective water users associations who are willing and able to operate it successfully. Based on such experience,the scheme could be expanded. 32 23. At appraisal, it was expected that the power to PTWs and private shallow tubewells was to be supplied at a uniform rate of Rs. 0.35 per KWH as metered supply. There had since been a steep rise in the tariff for PTWs, first in 1991 to Rs. 90 per BHP per month and then in 1993 to Rs. 120 per BHP per month, despite the progressive reduction in working hours of the PTW schemes. The tariff of shallow tubewels is now 25% of that of PTWs although both are connected to the same power feeders. MID is thus billed with high power charges for the unmetered supply which is equivalent to about Rs. 2.00 per KWH on the basis of actual working hours of PTWs. There is a need to bring parity in the power tariff for PTWs and private tubewells for the unmetered supply. There is also a concomitant need to fix energy meters on tubewells. Operation and Maintenance 24. An important project goal was to create high performance tubewell systems based on equality in water distribution that would allow farmers to increase their crop production. This has not been realized so far as there is presently no clear plan for O&M. The principal constraint is the decline in the quality and quantity of power availability. Other factors have also hampered performance as indicated below: a. unreliable water delivery particularly to tailend farmers; b. delays in repairing pump units during the irrigation season; c. excessive conveyance system losses in rehabilitated tubewells, not using pipe systems; d. deteriorating maintenances, due to a low O&M budget, and e. poor operational links between the MID, State Electricity Board and Department of Agriculture especially at tubewell. 25. The combined effect of these constraints has seriously affected cropping patterns and crop yields; and area irrigated declined from 62% of the design command in 1974/75 to about 7% now. Cost of rented water is high at around Rs. 500/hectare for three irrigations. Farmers still pay these high rates because of assured quantity and timely supply. The major prerequisites for a well functioning O&M system concern adequate staffing, proper and decentralized repair facilities, training, monitoring of tubewell performance and O&M funding, all of which needs to be improved for better performance. G. Future Operation/Action Plan 26. A detailed discussion was held with MID for future operation/action plan with regard to the completion of all ongoing works and also to optimize benefits from the investments made in a sustainable manner. To achieve the above objectives, MID has agreed to: a. complete all ongoing works by March 1998 and make available adequate funds for this purpose and refrain from constructing any new structures before completing all ongoing schemes in view of GOB's budgetary constraints; b. turn over the O&M responsibilities of TWs to Panchayats/farmers' organizations and also carry out a thorough review of the tubewells handed over to Panchayats and undertake remedial measures for improved performance; c. provide adequate O&M funding until the TWs are turned over to Panchayats/farmers' organizations; d. allocate adequate funding for training in installation and operation of improved electrical regulation system already procured for the efficient operation of the TWs but not in use at present for want of adequate training; 33 e. implement a pilot scheme to install diesel generating sets in about ten (10) selected tubewells to test effectiveness of operation and farmers' willingness to bear full O&M cost and a part of the capital cost; and f. monitor TW performance through collection of data on operational hours per TW, irrigated potential created, actual area irrigated, cropping patterns, cropping intensities and crop yields in the Kharif, Rabi and hot seasons on a continuous basis. H. Lessons Learned 27. The main lessons learned during project implementation are as follows: 1. Given MID's and BSEB's past and present difficulties, there is no justification for further investment in new public tubewells. Small farmers' interest can be, for the present time secured by selecting wells for modernization or rehabilitation in command areas dominated by the target group. 2. Power supply is a problem not confined to the project. This is a state-wide problem and durable solutions should be tackled at the state level. Until power supply becomes available, i.e. at least 16 hours per day in rural areas, the only alternative at project level is to instal stand-by diesel generating sets. 3. The provision of dedicated power lines with power availability of 16 hours/day at peak demand against a background of poor power generation and poor supply was not realistic. In future, project power supply should be assessed at the state level to ensure that it is adequate for the project. 4. The system of water rates based on irrigated acreage is against the concept of water use efficiency. This does not encourage farmers to economize use of water, which is supplied at high cost by the MID. Some means of volumetric measurement should be built into the project. 5. The project remains incomplete and part of the reason was the shortage of counter-part funds. The project experience demonstrates the critical significance of state finance in Bihar for satisfactory implementation and the need to ensure adequate flow of funds from the credit. Legal covenants that unduly hamper the reimbursement of counterpart funds should be avoided or adjusted to local circumstances. Revolving fund at state level is required in addition to the special account established with GOI. 6. The need for improved tubewell technology particularly buried distribution system is clearly demonstrated by the project. 7. There is a need to address issues related to Panchayats, farmers' organization and O&M of PTWs comprehensively at preparation and appraisal of the project rather than mid-way through implementation. 8. Groundwater developments based on PTWs would increasingly face problems of poor performance, both in terms of productivity and equity, unless proper action is taken for power supply and effective transfer to beneficiaries. The existing systems would, without significant changes in the management and financing, deteriorate as a result of pressure on already strained budgetary resources. 34 I. Follow-up 28. The mission will return to Rome and prepare the relevant parts of the ICR for transmittal to the World Bank by Mid-December 1994. The MID is requested to prepare its own evaluation as per Bank guidelines and send it to the World Bank Office in New Delhi by the same date. 35 Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 2. Staff Position as on October 10, 1994 Engineering Staff Sanctioned In Position 1. Project Coordinator 1 1 2. Chief Engineers 2 1 3. Superintending Engineers: (a) Project Coordinator Office 4 3 (b) Chief Engineer (North) 3 1 (c) Chief Engineer (South) 3 1 4. Executive Engineers (a) Project Coordinator Office 4 4 (b) Chief Engineer (North) 16 15 (c) Chief Engineer (South) 15 15 5. Assistant Engineers 127 116 6. Geophysicists 2 1 7. Hydrogeologists 2 Nil 8. Junior Engineers: (a) Chief Engineer (North) and Chief Engineer (South) 289 269 9. Helpers 34 34 10. Foremen 1 1 11. Mechanics/Fitters 178 160 12. Drivers Vehicle 168 143 13. Tubewell Operators 4,600 4,299 14. Drillers 8 7 15. Assistant Drillers 16 16 16. Welders 6 6 17. Electricians/Armature Binders 138 132 18. Compressor/Pump Operators 12 11 19. Amin 153 128 36 IMPLEMENTATION COMPLETION REPORT INDIA BIHAR PUBLIC TUBEWELL PROJECT (Cr.1737-IN) Appendix 3 Economic Re-evaluation General 1. The project was expected to result in higher production of mainly paddy and wheat, and moderate increases in the output of oilseeds, maize and potato. These were to be generated through the construction of 500 new tubewells, modernization of 1,500 tubewells and rehabilitation of 3,212 existing tubewells, making a total of 5,212 wells. Considering GOB's financial constraints, the MID has projected future operation, giving priority to completion of ongoing schemes. This is reinforced by the growing number of private tubewells promoted by the State Government. Accordingly, the future plan foresees a total of 4,212 tubewells, comprising 250 new, 750 modernized and 3,212 rehabilitated wells (see Table 1-3). 2. Overall crop development. No data on annual crop production in the project area has been systematically recorded, and little effort has been made to record the impact of project tubewells on crop production. Therefore, data used for compiling the crop development which has taken place over the past seven years in the impact area are largely based on field investigations and mission estimates. 3. Net cultivable areas. At appraisal, an average of 100 ha command area for tubewells (new or modernized) and 80 ha per rehabilitated well were assumed. The irrigation potential created and actually utilized between 1987 and 1994 was given in Table 1-3 which shows actual utilization from 26 ha (new tubewells), 22 ha (modernized tubewells) to 9 ha (rehabilitated tubewells), indicating low availability of power supply. In view of the overall power constraint in the state, it is unlikely that material changes would occur in power availability in the medium and long term. An average of 26 ha for new, 22 ha for modernized and 9 ha for rehabilitated tubewells has therefore been assumed for financial and economic analysis. This is further confirmed by the data given by the MID on power availability by district which varies from a low of 3 hrs/day (Madhusari and Sitamarhi), rising to 4 hrs/day (Jahanabad), 4-5 hrs/day (Samastipur), 6 hrs/day (Arrah) and finally to 8 hrs/day (Patna). 4. Cropping pattern. As expected at appraisal, irrigation from tubewells has resulted in increases in wheat acreage; oilseeds and potatoes have also increased (see Table 4-5). 37 5. Cropping intensity. A comparison of actual and SAR estimated cropping intensity is summarized below: SAR ICR Zone I Zone II Zone III NTW MTW RTW (100 ha) (80 ha) Without project 108 111 107 109 109 109 With project 174 181 184 126 123 111 Incremental 66 70 77 17 14 2 For the project, the SAR estimated cropping intensities were to go up from 'without project' estimates of 107%-111% to 174%-184% 'with project'. SAR and ICR estimates are strictly not comparable because lack of data has precluded estimating zone-wise cropping intensity and as a result, calculations were instead based on different types of tubewell models supported under the project. Based on these data, cropping intensity for the project has actually gone up to 111%-126% from 109% 'without the project'. The significantly lower cropping intensity 'with project' on areas commanded by the rehabilitated tubewells is explained by poor maintenance of field channels, resulting in higher conveyance losses, compared to areas commanded by new of modernized tubewells with the buried pipe system, supported under the project. 6. Crop yields. As anticipated at appraisal, yield levels of all crops have gone up modestly from 3-18% (see Table 8). Although the use of fertilizer has increased, its application is mainly confined to HYV. Furthermore, the rates of application are limited to farmers' affordability and have generally remained below recommended rates. Based on investigations in the field, it appears that farmers are not getting adequate extension support required; this is reported as being due to problems of staff and inadequate mobility. Table 8 gives a comparative statement of SAR and ICR crop yields. 7. Production. The estimated annual incremental production at full development is only about 14% of the appraisal estimate of 247,000 tons. Wheat production contributes 14,000 tons annually. Compared with appraisal estimates, incremental production is lower for all crops due to the reduced command area actually irrigated and slightly lower cropping intensity under the project. Farm Incomes 8. At appraisal, four farm models were prepared to estimate farm incomes derived by participating farmers. These models were divided according to soil types. A similar analysis has been carried out (see Table 9) at completion, based on cropping pattern assumptions shown in Table 4-5 and per ha crop yields shown in Tables 6 & 7, but analysis was based on type of tubewells. Farm incomes are therefore strictly not comparable. 38 9. Incremental. In all cases, farm incomes are higher in nominal terms than those estimated at appraisal. In real terms, incomes would be Rs3,870, Rs3,878 and Rs2,830. These represent Rs645 and Rs470 per capita, based on a six-person family. Economic Re-evaluation 10. General. At the time of appraisal, economic rates of return (ERR) were estimated for the project as a whole (33%) and for its components - new tubewells (32%), modernized tubewells (42%) and rehabilitated tubewells (29%). 11. In re-estimating the project's economic impact, the basic assumptions made at appraisal have been retained. The principal difference is that total incremental benefits arising from the project have been phased on the basis of actual energization up to 1994 and projected energization thereafter (see Tables 1-3). Also, an average command area of 26 ha per new, 22 ha per modernized and 9 ha for rehabilitated has been used. The analysis has been carried out in 1994 constant price terms. Historical tubewell investment costs have been restated in 1994 prices by applying the wholesale price indices (see Table 10). These costs have been restated in border terms by using the standard conversion factor (SCF) of 0.9 (see Tables 11-14). In estimating costs, duty and local taxes have been excluded. Financial prices and economic values of crops and inputs are presented in Tables 15 and 16. Future prices are based on World Bank Primary Commodity Forecasts dated August 1994. In line with estimates in recent World Bank appraisal reports, farm labour has been valued at 90% of the financial wage rate. 12. Benefits. The calculation of agricultural benefits is based on the physical build-up and performance of tubewells, and on the resulting agricultural production. Based on the experience with project wells, it can be estimated that the average build-up time from commissioning of a tubewell to full development is about four years with crop yields at 60% in year 1, 80% in year 2, 90% in year 3 and 100% in year 4. 13. Costs. The replacement costs for a 150 m3/hr tubewell are included on the basis of SAR assumptions. 14. The 0 & M costs for tubewells are calculated using a weighted average pumping of 1,500 hrs per year and a power input of 11.6 kw/hr. Based on this, energy consumed annually amounts to 17,400 kw. With a long-run marginal rate of power at Rsl.47/kwh, energy costs amounts to Rs25,620 per year. Other costs are establishment (Rs24,000) and maintenance (Rs4,870). 15. Based on the above assumptions, the cropping pattern and per ha crop budget assumptions shown in Tables 4-7 and a 25-year period of analysis, the current estimate of ERR for the project as a whole is around 2.3%, for new tubewells -20%, modernized tubewells 4.4% and rehabilitated tubewells 2.9%. There are various factors which have contributed to the negative ERR for new tubewells and the significantly lower ERRs for modernized and rehabilitated tubewells, as compared to appraisal estimates. The more important ones include: 39 (i) a 74-78% lower command area per new and modernized tubewells and a 91% lower command area per rehabilitated tubewell, than that expected at appraisal; (ii) at appraisal, the overall cropping intensity was expected to increase by 66% to 77%; revised estimates put the increase between 2%-17%. The lowest 'with project' cropping intensity (2%) is for areas commanded by rehabilitated tubewells. This is because of the poor maintenance of field channels, resulting in higher conveyance losses, compared to new or modernized tubewells with the buried pipe system supported under the project; (iii) the use of private tubewells in the 'without project' situation was assumed for about 20% of the area, compared to none assumed at appraisal; and (iv) economic costs in rupee terms have increased much more than the increase in the price of the main agricultural output (paddy), while the economic price of labour is six times that estimated at appraisal, the farmgate price of paddy and wheat has gone up nearly two to three times respectively. 16. The lack of adequate data precluded the estimation of insurance value of the tubewell against unexpected droughts during kharif. Discussions with farmers confirmed the correlation between rainfall data and hours pumped even if the latter was substantially reduced. There was evidence of less pumping during kharif 1993/94 because of even distribution of rain. Continuous monitoring, a matter that has lagged under the project, is required before a valuation of such benefits could be attempted. 17. Sensitivity analysis. The potential economic benefits are not being fully achieved particularly in terms of areas irrigated per tubewell, due to erratic and unreliable power supply. The fact that many PTWs are being used to irrigate areas ranging from 9-26 ha, each achieving an average of 12 ha, is considered exceedingly low. The three factors which are expected to influence the ERR are: (i) variations in command areas; (ii) changes in 0 & M funding; and (iii) the inability of the MID to operate and manage PTWs as designed. The sensitivity analysis indicates that: a reduction in command area of 20% would lower ERR to -0.6%; a reduction of 50% in 0 & M funding (by assuming that future benefits would be reduced by 50%), would lower the ERR to about -7.4%; and that poor operation and management would lower ERR to -0.6%, assuming that the ineffective operation of MID would depress project benefits by 20%. Implementation Completion Report INDIA: Bihar Public Tubewett Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 1. get Irrigable Area Created and Utilizedl/ - New Tbewetts Component FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FT97 FY96 FY99 New tubewetts energized (No.) - - - - 4 10 44 82 100 150 200 250 250 Potential created2l(ha) - - - 400 1,000 4,400 8,200 10,000 15,000 20,000 25,000 Area ut ili ze (ha) - - - - - 104 260 1,144 2,132 2,600 3,900 5,200 6,500 Incremental (ha) - - - - - 104 156 884 988 468 1,300 1,300 1,300 1/ It is assumed that utilization takes place in the year following installation. 2/ Average command area of 100 ha per new tubewelt, created one year after energization. 3/ At 26 ha per tubewett, based on average area utilized in 1994 from wells energized in 1993 which were 1,144 ha for 44 welts. Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 2. Met Irrigable Area Created and Utilized' - Modernized Tkeuets component FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY96 FY99 Modernized tubeweils - - 2 33 45 305 600 650 700 750 750 750 energized (No.) Potential created 2(ha) - - - - 200 3,300 4,500 30,500 60,000 65,000 75,000 75,000 75,000 Area utilized (ha) - - - - 44 726 990 6,710 13,200 14,300 16,500 16,500 16,500 Incremental (ha) - - - - 44 682 264 5,720 6,490 1,100 2,200 - - It is assumed that utilization takes place in the year following installation. 2/ Average command area of 100 he per modernized tubewelt, created one year after energization. 3/ At 22 ha per tubeweLl, based on average area utilized in 1994 from wells energized in 1993 which were 6,578 ha for 305 wells. Implementation Completion Report INDIA: Bihar Public Tubewelt Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 3. Met Irrigable Area Created ard Utilized/ - Rehabilitated Tubewetts Component FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 Rehabilitated tubewetls - 52 351 440 548 2,221 2,585 2,700 2,900 3,212 3,212 3,212 energized (No.) Potential created2(ha) - - - 4,160 28,080 35,200 43,840 177,680 206,800 216,000 232,000 256,960 256,960 Area utilized3 (ha) - - - 468 3,159 3,960 4,932 19,989 23,265 24,300 26,100 28,908 28,908 Incremental (ha) - 468 2,691 801 972 15,057 3,276 1,035 1,800 2,808 2,808 1/ It is assuned that utilization takes place in the year following installation. 2/ Average conmnand area of 80 ha per rehabilitated tubewett, created one year after energization. 3/ At about 9 ha per tubeweLL, based on average area utilized in 1994 from wells energized in 1993 which were 19,783 ha for 2,221 wells. 43 Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 4. Cropping Pattern - New and Modernized Tubewellsi/ Without Project With Project Crop Rainfed Irrigated Rainfed Irrigated Kharif - Paddy 55 5 - 65 - Maize 10 - - 15 - Pulses (arhar)2/ 1 - 2 1 - Jute 2 - 2 1 - Vegetables 3 - - 2 - Fodder - 3 Rabi - Wheat 9 10 - 45 - Pulses (gram) 6 - 4 2 - Mustard 2 1 4 3 - Potato - 1 - 3 - Maize - 1 - 7 - Fodder - 1 - 2 Hot Season - Moong - 1 - 2 - Vegetables (onion) - - - 5 Perennial - Sugarcane - - - 4 TOTAL 89 20 12 160 Cropping Intensity3' (109) (172) Cropping intensity for analysis has been computed on area actually utilized; 26 ha for new tubewells (see Table 1) and 22 ha for modernized tubewells (see Table 2). Although the project developed 100 ha command area for new and modernized tubewells, there has been no change in cropping pattern in the remaining 74 ha and 78 ha respectively. 2 arhar = pigeonpea. 2/ Land occupancy percentage: sugarcane counted in each of the three seasons. 44 Implementation Completion Report INDIA. Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 5. Cropping Pattern - Rehabilitated Tubewells Without Project With Project Crop Raifed I rrigated Raifed ItIrrigated Kharif - Paddy 58 2 - 45 - Maize 10 - 4 10 - Pulses (arhar)2/ 1 1 - - Jute 1 1 1 - Vegetables 3 -4 - Fodder -1 1 1 Rabi - Wheat 9 10 - 40 - Pulses (gram) 6 - 4 1 - Mustard 1 1 - 3 - Potato - 1 - 2 - Maize - 1 - 3 -Fodder - 1 - 2 Hot Season - Moong 1 - 2 - Vegetables (onion) - 1 - 2 Perennial - Sugarcane - 1 - 3 TOTAL 89 20 11 119 Cropping Intensity3l (109) (130) Cropping intensity for analysis has been computed on area actually utilized - 9 ha (see Table 3). Although the project developed 800 ha command area, there has been no change in cropping pattern in the remaining 71 ha. 2 arhar = pigeonpea. / Land occupancy percentage: sugarcane counted in each of the three seasons. 45 Implementation Completion Report INDIA- Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 6. Crop Yield - New & Modernized Tubewells Without Project With Project Crop Rainfed Irrigated Rainfed Irrigated ....... (ton/ha) ....... ....... (ton/ha) ........ Kharif - Paddy 1.2 2.6 - 2.6 - Maize 13 - - 1.8 - Pulses (arhar)' 1.2 - 1.2 1.4 - Jute 1.5 - 1.5 1.8 - Vegetables 12.0 - - 16.0 - Fodder - -- 15.0 Rabi - Wheat 1.3 23 - 2.3 - Pulses (gram) 0.6 - 0.6 1.0 - Mustard 0.6 1.2 0.6 1.2 - Potato 15.0 - 15.0 - Maize -_1.8 - 1.8 - Fodder 15.0 - 15.0 Hot Season - Moong 1.0 - 1.0 - Vegetables (onion) - - 15.0 Perennial ___________________________ - Sugarcane -_50.0 - 50.0 harar = pigeonpea. 46 Implementation Completion Report INDIA. Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3: Economic Re-evaluation Table 7. Crop Yield - Rehabilitated Tubewells Without Project With Project Crop Rained rIrrigated Rainted Irrigated ....... (tor/ha) ....... ....... (ton,ha) ........ Kharif - Paddy 1.2 2.6 - . 2.6 - Maize 13 - 13 1.8 - Pulses (arhar)' 1.2 - 1.2 1.4 - Jute 1.5 - 1.5 1.8 - Vegetables 12.0 - 14.0 - Fodder - 15.0 12.0 15.0 Rabi - Wheat 1.3 2.3 - 2.3 - Pulses (gram) 0.6 - 0.6 1.0 - Mustard 0.6 1.2 - 1.2 - Potato - 15.0 - 15.0 - Maize -1.8 - 1.8 - Fodder 15.0 - 15.0 Hot Season - Moong -_1.0 -1.0 - Vegetables (onion) -15.0 - 15.0 Perennial - Sugarcane -_50.0 - 50.0 arhar = pigeonpea. 47 Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3 - Economic Re-evaluation Table 8. With Project Yields at SAR Compared to ICR for the Project as a Whole Total Project Crops SAR ICR (ton/ha) (ton/ha) Kharif - Paddy 2.2 2.6 - Maize 1.7 1.8 - Pulses (arhar)' 1.3 1.4 - Jute 1.7 1.8 - Vegetables 14.0 14.0 - Fodder 14.5 15.0 Rabi - Wheat 2.0 2.3 - Pulses (gram) 1.0 1.0 - Mustard 1.2 1.2 - Potato 14.5 15.0 - Maize - 1.8 - Fodder 14.5 15.0 Hot Season - Moong 0.97 1.0 - Vegetables 14.5 14.5 Perennial - Sugarcane 48.0 50.0 arhar = pigeonpea. 48 Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3 - Economic Re-evaluation Table 9. Estimated Financial Farm Budgets (1 ha farm) Without Project With Project (Rs) (Rs) New & Modernized Tubewells (farm size - 1 ha) - Gross value 6,505 17,854 - Hired labour 1,888 3,982 - Other inputs 460 2,052 Total Inputs 2,348 6,034 Net Value 4,157 11,820 Incremental Income (Rs/ha) 7,663 Increase due to Project (%) 184 Rehabilitated Tubewells (farm size - 1 ha) - Gross value 6,737 13,518 - Hired labour 1,892 2,127 - Other inputs 460 1,410 Total Inputs 2,352 3,537 Net Value 4,385 9,981 Incremental Income (Rs/ha) 5,596 Increase due to Project (%) 128 49 Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3 - Economic Re-evaluation Table 10. Exchange Rates and Wholesale Price Indices (WPI) Year Exchange Rate1/ WPI/ Rs = USS1 1979 60.0 1980 72.0 1981 80.9 1982 82.8 1983 89.4 1984 95.6 1985 12.369 100.0 1986 12.611 105.6 1987 12.962 112.9 1988 13,917 122.7 1989 16.226 131.1 1990 17.504 142.9 1991 22.742 162.2 1992 25.918 181.4 1993 30.493 194.7 1994 31.371 208.9 IMF Statistics. 50 INDIA Bihar Public Tubewell Project Table I I-Economic Analysis of the Project as aWhole (Rs. Million) Fiscal Year Total Costs Incremental Incremental Net Prod. Net Benefits Benefits 1987 119.2 0.0 -119.2 1988 204.4 0.0 -204.4 1989 390.2 0.0 -390.2 1990 289.3 0.7 -288.6 1991 256.5 5.9 -250.6 1992 168.4 14.0 -154.4 1993 247.8 23.0 -224.8 1994 148.7 68.2 -80.5 1995 237.8 138.3 -99.5 1996 238.3 192.5 -45.8 1997 238.3 234.9 -3.4 1998 247.7 257.9 10.2 1999 47.6 . 265.9 218.3 2000 80.0 269.9 189.9 2001 93.2 272.3 179.1 2002 106.6 272.3 165.7 2003 66.1 272.3 206.2 2004 68.3 272.3 204.0 2005 73.9 272.3 198.4 2006 87.4 272.3 184.9 2007 73.3 272.3 199.0 2008 83.4 272.3 188.9 2009 56.8 272.3 215.5 2010 59.2 272.3 213.1 2011 58.2 272.3 214.1 ERR= 2.3% NPV= -810.1 Rs. Million 51 INDIA Sihar Public Tubewell Prclect Table 12-Economic Analysis of New Tubewells (Rs. Million) Fiscal Year Investment Suilding. Vehicle & Ecuitment.2/ Energizadai X/ O&M 4/Total CCsts Incerental lncreMenal Ccsts 1/ Training. M&E. Tecrinical Services EnCineering Net Prod. Net Benefits & Admin. 21 Benefits 1987 0.0 0.2 6.7 0.3 7.2 0.0 -7.2 1988 11.9 3.5 2.5 1.2 19.1 0.0 -19.1 1989 224 4.0 10.0 3.3 39.7 0.0 -39.7 1990 16.2 3.6 4.7 4.1 28.6 0.0 -28.6 1991 10.9 5.2 1.0 4.4 0.2 21.7 0.0 -21.7 1992 6.0 3.1 0.0 4.2 0.5 13.8 0.2 -13.6 1993 5.2 2.6 0.3 4.4 2.3 14.8 0.9 -13.9 1994 5.7 0.9 0.0 4.0 4.2 14.8 3.5 -11.3 1995 29.9 1.6 1.7 0.8 5.7 39.7 8.7 -31.0 1996 31.3 1.5 6.8 4.9 7.7 52.2 14.1 -38.1 1997 31.3 1.2 6.8 5.9 10.3 55.5 18.2 -37.3 1998 31.3 1.1 6.8 6.5 12.9 58.6 20.4 -38.2 1999 12.9 12.9 21.1 8.2 2000 12.9 12.9 21.1 8.2 2001 0.4 12.9 13.3 21.1 7.8 2002 1.0 12.9 13.9 21.1 7.2 2003 4.4 12.9 17.3 21.1 3.8 2004 8.2 12.9 21.1 21.1 0.0 2005 10.0 12.9 22.9 21.1 -1.8 2006 15.0 12.9 27.9 21.1 -6.8 2007 20.0 12.9 32.9 21.1 -11.8 2008 25.0 12.9 37.9 21.1 -16.8 2009 t 2.9 12.9 21.1 8.2 2010 12.9 12.9 21.1 8.2 2011 12.9 12.9 21.1 8.2 EAR= -20.0% NPV= -137.2 As. Million 1/ Eccnomic costs derrved by using SCF ct 0.9 and inflaung z 1994 rice arms using wnclesale pice index incicated in Table . P.ciecz costs since 1995 based cn MID esutates but adjusted mo a lower overall total of 250 wells instead of 5CO crc:csed at spraisal. Becacement costs assumed at As. 1 ooCQtweJJ from year 2001. 21 Accaticned on Me tasis o tucewell numcers (250; 750; 3,212). 3' AcoricrTed on the casis ct tubewells nurmcers upo 1994 and inCentified sacarately thereafter. ,/ !ased on esmolishmentat As. 24,000 c maintenance (cMI wor,<s+ mecranical): Ss 8.525 and energy cnarges of As. 24.!O, adjusted by SCF (electircity costed at long run marginal cost assumed at Rs. 1.47/kwh). 52 INDIA Sihar Puolic TuCewell Prcject TabIe 13-Economic Analysis ofModernized Tubewells (Rs. Million) Fiscal Year irvestment Euilding. V-znc!e & Ecuicment. Energizatci C&M 2/Total Ccsts lnwarmenml lnc-emenal Csts 1/ / Training, M&E. 7ecnnical Sericas Enrieenng Net Prcc. Nei Senefits & ACmin. neneñts 1987 0.0 0.5 19.9 0.9 21.3 -21.3 1988 12.3 10.6 7.6 3.6 34.1 -34.1 1989 32.1 12.0 30.0 9.8 83.9 -83.9 1990 42.0 6.2 14.2 9.8 0.0 72.2 -72.2 1991 66.8 15.5 3.1 9.8 0.6 95.8 0.1 -95.7 1992 51.6 9.4 0.0 9.8 0.8 71.6 1.7 -59.9 1993 128.5 7.7 1.0 9.8 5.2 152.2 4.4 -147.8 1994 41.8 2.6 0.0 9.8 10.3 64.5 18.7 -45.8 1995 71.6 2.5 6.8 9.8 11.2 101.9 50.9 -51.0 1996 56.9 4.6 6.3 9.8 12.0 90.1 78.6 -11.5 1997 56.0 3.7 6.8 9.8 12.9 89.2 96.4 7.2 1998 56.0 3.3 0.0 9.8 12.9 82.0 105.9 23.9 1999 12.9 12.9 105.9 93.0 2000 2.5 12.9 15.4 105.9 90.5 2001 6.4 12.9 19.3 105.9 86.6 2002 8.4 12.9 21.3 105.9 84.6 2003 13.4 12.9 26.3 105.9 79.6 2004 10.3 12.9 23.2 105.9 82.7 2005 13.0 12.9 25.9 105.9 80.0 2006 25.7 12.9 38.6 105.9 67.3 2007 8.4 12.9 21.3 105.9 84.6 2008 14.3 12.9 27.2 105.9 78.7 2009 11.4 12.9 24.3 105.9 81.6 2010 11.2 12.9 24.1 105.9 81.8 2011 11.2 12.9 24.1 105.9 81.8 4.4% NPVl= -202.14 As. million 1/ Simiar nos as in Taole 12 for new tuoewell eccncmic cnst5. 2/ assumeo at 20% cf C&V costs (As. 51.5CC) as incremenml. 2/ Assumed ar 20% ct investrnent coszs for rsoacemert. 53 INOIA 8iiiar Public Tubewell Project Table 14-Economic Analysis of Rehabilitated TLbewells (Rs.-Million) Fiscal Year Investment Building. Vehicle & Equioment, Energizatim C&M 2/Total Costs incramental Inceemental Costs 1/21 Training, M&E. Technical Services Engineering Net Proc. Net Senetits & Admin. 3enefits 1987 0.7 2.1 84.1 3.8 90.7 -90.7 1988 59.0 44.9 32.0 15.3 151.2 -151.2 1989 73.9 50.6 126.5 15.3 0.3 268.6 -266.6 1990 85.2 26.2 60.0 15.3 1.8 188.5 0.7 -187.8 1991 42.6 65.6 13.2 15.3 2.3 139.0 5.8 -133.2 1992 25.3 39.6 0.0 15.3 2.8 83.0 12.1 -70.9 1993 17.2 32.4 4.4 15.3 11.5 80.8 17.7 -63.1 1994 29.9 10.9 0.0 15.3 13.3 69.4 46 -23.4 1995 55.5 10.7 0.8 15.3 13.9 96.2 78.7 -17.5 1996 45.5 19.6 0.6 15.3 15.0 96.0 99.8 3.8 1997 45.4 15.8 0.5 15.3 16.6 93.6 120.3 26.7 1998 60.7 14.0 0.5 15.3 16.6 107.1 131.6 24.5 1999 5.2 16.6 21.8 138.9 117.1 2000 35.1 16.6 51.7 142.9 91.2 2001 44.0 16.6 60.6 145.3 84.7 2002 54.8 16.6 71.4 145.3 73.9 2003 5.9 16.6 22.5 145.3 122.8 2004 7.4 16.6 24.0 145.3 121.3 2005 8.5 16.6 25.1 145.3 120.2 2006 4.3 16.6 20.9 145.3 124.4 2007 2.5 16.6 19.1 145.3 126.2 2008 1.7 16.6 18.3 145.3 127.0 2009 3.0 16.6 19.6 145.3 125.7 2010 5.6 16.6 22.2 145.3 123.1 2011 4.6 16.6 21.2 145.3 124.1 ERR= 2.9% NPV= -470.8 Rs. million If Similar noles as in Table 12 for new tubewell economic costs. 2/ Assumed at 10% Oc C&M costs as inaemental. 2/ Assumed at 10% of investment ccsts fr reclacament. Implementation Completion Report INDIA: Bihar Public Tubewelt Project (Cr.1737-IN) Appendix 3 - Economic Re-evaluation Table 15. Derivation of Economic Prices Fertilizer Unit Paddy Wheat Jute Sugar N P K Projected World market price USS/ton 312 177 326 254 145 135 110 1995/2000 in 1994 constant USS_ Quality adjustment % 75 95 100 98 100 100 100 World market equivalent USS/ton 234 168 326 249 145 135 110 International shipping, insurance USS/ton 40 50 50 50 50 50 50 c.i.f./f.o.b. Calcutta USS/ton 274 218 276 299 195 185 160 c.i.f./f.o.b. Calcutta2/ Rs/ton 8,596 6,839 8,658 9,380 6,117 5,804 5,019 Domestic handling & transport Rs/ton 770 770 (500) 770 830 830 830 Processing or nutrient ratio % 66 953/ 70 10 46 48 60 Processing costs Rs/ton (110)- 175 (52) - - - Wholesale price, raw product Rs/ton 6,071 7,228 5,885 963 15,102 13,821 9,748 Transport to/from farmgate Rs/ton (503) (654) 160 - 160 160 160 Farmgate Price Rs/ton 5,568 6,574 6,045 963 15,262 13,981 9,908 1/ IBRD Comodity Price Forecast of August 1994, adjusted by MUV index to obtain price in 1994 constant terms. 2/ Converted at the current exchange rate of USS1.00 = Rs3l.37. 3/ 5% loss in cleaning. 55 Implementation Completion Report INDIA: Bihar Public Tubewell Project (Cr.1737-IN) Appendix 3 - Economic Re-evaluation Table 16. Summary of Prices for Financial and Economic Analysis in 1994 Prices Financial Economic Seeds Crops (Rs/ton) (Rs/ton) Financial (Rs/ton) Economic (Rs/ton) Paddy 3,100 5,568 4,000 7,185 Wheat 3,500 6,574 4,000 7,510 Maize 2,650 4,977 4,000 7,510 Pulses - Gram 6,400 5,760 9,000 8,100 - Moong 7,000 6,300 9,000 8,100 Oilseeds - Rape/mustard 8,100 7,290 9,000 8,100 Jute 4,500 6,045 6,000 5,400 Sugarcane 600 963 650 1,040 Potato (Rabi) 1,250 1,125 4,000 3,600 Onion (Rabi/hot season) 1,500 1,350 4,000 3,600 Lady's finger, etc.(Kharif) 1,250 1,125 Inputs Nitrogen 7,220 15,262 DAP (P) 13,000 13,981 K 6,300 9,908 Labour (person-day) 35 32 Bullock (pair-day) 135 122 Tractor hire (per hour) 150 135 ImpLementation ConpLetion Report INDIA: Bihar Public Tudewett Project (Cr.1737-IN) Appenix 4. rogress of Physical Targets No. of 197-0 1984B 19B9-90 199"M1 1991-92 1992-93 199341 Units Target Actual Target Actual Target Actual Target Actual Target Actual Target Achal Target Actal New Tubewells Well point 500 - - 60 140 130 238 200 240 300 246 400 247 500 256 Pipe distribution system 500 - - 60 16 130 19 200 24 300 39 400 72 500 105 Energization 500 - - 60 - 130 - 200 4 300 10 400 44 500 89 Modenre Tu3bewels Replacement and/or repairl element in the wet 1.500 - - 60 35 200 57 400 59 600 224 800 333 1.500 773 Pipe distribution system 1.500 - - 60 54 200 106 400 106 600 165 800 253 1.500 431 Energization 1.500 - - 60 - 200 2 400 33 600 45 800 305 1,500 1.244 RehabHtated Tubewels Replacement end/or repair12 element in the well 3.212 470 - 1.460 1,341 2,450 1,580 3.130 1.597 3.212 1.684 - 1,944 - 2.455 Pipe distribution system 1,313 200 A-x A-x A-x 1.100 A-x A-4 - A-9 - A-15 B-102 500 B-624 800 B-647 8-984 1,313 B-1084 B-1084 8-104 Energization2/ 3,212 470 - 1.460 52 2.400 351 3.130 3.212 548 2,221 - 3.197 / Average figures of repair or construction of pumphouse and repair and replacement of pump units, are in the row of replacement and/or repair element in well. 2/Actual numbers of energization of rehablitated tubewells done by SSEB In the years 1992-93 and 1993-94 are 752 and 1.342 respectively. Total number of redrlied tubewells is 178. A - No. of pipe distribution systems completed; 8 - No. of channel distribution systems repaired. Up to May 31.1994. Source: MID. Pat. Implementation Completion Report INDIA: Bihar Public Tubewelt Project (Cr.1737- IN) Appendix 5. Project Cost in Naminal and Real Terms ____________________________Final Cost Appraisal Estimate I Total Overrun Price Overrnm Quantity Overrun Actual plus estimted In 1986 Prices expenditure . . . . . . . . . . . . .. (Rs million) . . . . . . . . . . . . . . . . . . . . . . . (... . . . ..i.o. 1. New tubewet systems 256.7 372.4 200.4 45 67 (22) 2. Modernized distribution system 304.6 1,051.0 559.5 245 161 84 on existing tubewelts 3. Rehabilitation of existing 144.4 488.4 304.3 238 120 110 tubeweits 4. Dedicated power supply 355.7 393.0 323.1 10 19 (9) (existing + new tubewetts) 5. Management improvement 95.7 123.5 64.9 29 61 (32) 6. Engineering and administration 139.1 1,066.4 552.8 667 370 297 Total Project Cost 1 ,296.2 3,494.7 2,005.0 170 115 55 In 1986 prices. 2/ Actual expenditure up to May 31, 1994 plus costs to complete until 1997/98, i.e. March 1998. 58 Appendix 6 INDIA GOVERNMENT OF BIHAR DEPARTMENT OF MINOR IRRIGATION. PARAWISE COMMENTS ON THE IMPLEMENTATION COMPLETION REPORT (I.C.R.) AND THE EVALUATION REPORT BIHAR PUBLIC TUBEWELL PROJECTS (CREDIT No. 1737- IN) s 59 PARAIWISE COMMENTS ON IMPLEMENTATION COMPLETION REPORT OF BIHAR PUBLIC TUBEWELL PROJECT (CREDIT NO. 1737-IN) 1. No comments. 2. No comments. 3. No comments except to the extent that S.D.R. 40 M was slashed down saying substantial savings resulting from devaluation of the rupee against the U.S. $, this was unilateral decision of the bank and which was not justified. More over due to inflation in the domestic market, the project was affected. 4. No comments. 5. No comments. 6. The objective of the project was realistic based on improved design standards for new system (S.AR Para 4.07), but the objective could not be achieved due to irregular flow of fund at the time of execution (AnnexureA appended.). So far as completed tubewells are concerned, the objective could not be achieved due to inadequate and irregular supply of electricity. 7. It is true that 5200 tubewells were located within 37 districts of state, the effective co-ordination with B.S.E.B. and D.O.A. was made. As a result, co-ordination committee had been set up at Executive Engineer/ Suprintending Engineer/Chief Engineer and State levels. These committees held regular meetings as will be evident from the annexure-B enclosed. Further weekly task force meeting takes place at district level under chairmanship of D.M./D.D.C, which review the performence of B.S.E.B/D.O.A. and M.I.D. at district level. Satisfactory result could not be achieved due to time taken in procurement 60 PARAK . COMMENTS of materials, lengthy process of bid decision, irregular and insufficient flow of fund. 8. Adequate electricity supply is sine qua non for desired water management. It is true that M.I.D. faced financial difficulties but inspite of such stumbling blocks the endeavour to ensure eqauitable water allocation and water use efficiency was not deterred. M.I.D. carried out training programme for machanics, tubewell operators, pump fitters and beneficiaries. M.I.D. also felt that to achieve its objective. people participation is a must and hence a policy decision to transfer tubewells to Panchayats and beneficieries committees was taken and 490 tubewells were transferred to local bodies. 9. Relevant comments have been made in the appropriate paras. 10. The table under this para shows target and achievements of Project. On perusal from the physical objective of table, it is evident that significant short fall in achivement has appeared in different schemes of the Project. In this table, Bank has considered only the tubewells completed in all respect. But component wise achievement of the Project is more (as appended in Annex ure C) . At this juncture, it would be pertinent to mention some of the factors which affected the progress at desired pace. The target was not fully acieved due to paucity of fund in later years of the project when iti gained momentum. In the begining year of the project, emphasis was laid down on rehabilitation of pump units and repair of water distribution systems of rehabilitaion tubewell with the objective that it will give quick relief to the small and marginal farmers. Procurements of basic inputs for the projects work were also taken up at the right earnest, but procurement through bank guidelines took considerable time in finalization of the bids. Further since it*was a new system neither project officials nor contractors of the State were accustomed to it. The low ceiling of 2.9 m.US$ for unit/price rate contract and Banks constant pressure to switchover to L.C.B. system of bidding virtually brought the pace of Project activities to a grinding halt. The field officials were asked to stop the work where it was on old basis for the residual works. Naturally they took time to become (2) 61 PAR"VISE COMMENTS used to L.C.B. bidding. Intitially bidding did not take place because of non submissionm of bids for large number of tubewells. This was due to Bank's suggestion for inviting one L.C.B. bid for entire cluster. This method failed because either no bid was received or the bid received was non responsive. The bids received in the first year were rejected on one ground or other (Please refer letter no. 510 dated 16.2.91). Meanwhile strike by Engineers and Staff caused further impediment for the progress. Thus for almost two years inspite of all effort's the project suffered badly for reasons beyond the control of the Project Authority. 11. This is relevant to point out that the assessement of performance is based on 89 nos. of new tubewells, 431 nos. of modernized tubewells and 2354 nos. of rehabilitated- tubewells in the year 1993-94. But actually the above numbers of tubewells were completed up to May'94 and majority of them are not declared operative in 1993-94. Only 4 nos. of New Tubewells, 253 nos. of Modernized Tubewells and 1563 nos. of Rehabilitated Tubewells were operative in 1993-94. The tubewells have irrigated 27505 Hect. of land. 1144 Hect. was irrigated by new tubewells against 4400 Hect. of additional irrigation potential created. Similarly 6578 Hect. and 19783 Hect. were irrigated by modernized and rehabilitated tubewells against 25300 Hect. and 132400 Hect. of additional irrigation potential created respectively. This shows that in the year 1993-94 area actually irrigated was 26% for New Tubewells, 26% for Modernised Tubewells and 15% for Rehablitated Tubewells against the additional irrigation potential created. (Detailed statement of yearwise physical progress potential generated and actual areas irrigated by New Modernized and Rehabilitated Tubewells is enclosed vide Annexure D.E & F) 12. No comments. 13. Water rates revision is under progress. A sum of rupees two thousand five hundred per T/W has been given to panchayat as revolving fund to run the T/W only. The tubewells in working condition were handed over to Panchayats (3) 62 PARAWISE COMME%JS with the advice that M.I.D will prL--ide technical know how Lor maintenance of the different component of tubewells. 14. No comments. 15. The perception of the mission that the- was no equitable distributica of water needs to be reconsidered. In order to ensure equitaete distribution of water, two loops were foried at each new and modernized tubewells for distribution and 20 outlers were provided to irrigate 5 Hect. of land per outlet. While providiz outlets, only technical aspem were considered so as to irrigate the lani properly and no consideraticn was allowed for any kind of influence from any farmer. Due to irreglr and erratic power supply, adequate amount of water could not e provided and hence it is likely that the cutlets near the tubewells mi--t have received water, where as oulet I farther ends might not ha-e received the same. This technical analvzis makes it clear that no favo:r was done for influential farmers. The mission's observation that the autcmatic operation system did ni work as designed and hence partiality Lf tubewell operators could ni be eliminated, needs reconsideration. Eue to high voltage fluctuatio. automatic operation system did not fuction properly and therefon! old system of operation continued. T:is might have allowed sore tubewell operators to operate the tub-wells under the influence zf influencial farmers. But once again tLs is to be kept in mind, whiE. designing outlets the influential farLers were not favoured aad therefore it is not correct to say that equtable distribution of water was not ensured. 16. Regarding the factors pointed out in the:eport, follwing aspects net to be reconsidered: (a) One of the major reasons for Toor increase in the cropping intensity is inadequate and errarc power supply. If the pow= supply situation is improved by using stand by system like D.G. Set, then the chances of getting te desired increase in croppi:- intensity are high. (4) _6PARA WISE COMMENTS (b) This is true that Private tubewells have irrigated 20% of the command area which was supposed to be irrigated by the public tubewell at the time of appraisal, once again it would be important to reiterate that due to poor power supply position public tubewells could not irrigate the area as expected in the S.A.R. If some alternative arrangement is made to ensure power supply, then it would certainly be possible to irrigate the area as envisaged in the S.A.R. Farmers would like to depend an irrigation by Public Tubewells because this is more cost- effective., In such a situation, private tubewells will automatically become redundant and the irrigated area by private tubewells will become negligible. This, in turn, will improve the E.R.R. of the Public Tubewells. (c) The costs of labour at the time of project appraisal, mid-term review and at present are Rs. 15.85, Rs. 20.50 and Rs. 30.50 respectively and thus it has increased about two times and not six times as stated in the I.C.R. 17. It is true that potential economic benefits have not been fully achieved due to erratic and unreliable power supply. On an average irrigation per tubewell is from 15 to 20 Hect. each achieving an average of 20.5 hect. The comments on the three factors influencing ERR are as follows: (i) Variation in comm and areas depend not only upon the yield of tubewells but also upon the desire of farmers. Similarly the Crop intensity also diffiis in command areas of different tubewells upon the capability and desire of the farmers. (ii) Since the tubewells are being transferred gradually to Village Panchayats/tubewell beneficiaries committees the operation and maintenance of these tubewells will be taken up by them. Thus, due to their involvement in the future ERR will go up. (iii) There has been no slackness on the part of MID to operate and manage the tubewells. The original design in which particular outlet has to be operated in each loop of a tubewell, did not (5) 64 PARAW1.ce COMMENTS materialize because of lower working hours of tubewells having insufficient power supply. It resulted in pressure on different outlets of tubewells because the farmer were not sure of getting their fields irrigated on there turn. If power improves, the tubewells can be operated and managed as per design envisaged at the time of appraisal. 18. The farm income as indicated have been taken to be on lower side as the irrigation per rehabilitated tubwell has been taken to be 9 Hect. instead of 16 Hect. Similarly the farm income depends also upon the choice of the farmers, selection of particular crop and crop intensity in the command areas of tubewells. In respect of tubewells with good power supply the farm income are quite satisfactory. 19. Since the tubewells are transferred to the village panchayats / beneficiary Committees, the operation and maintenance of these tubewells is to be done by them. Therefore, the question of providing subsidy for this work will not arise in future. 20. In the initial period of the project, rehabilitation of non-working tubewells due to mechanical, electrical or other breakdowns and renovation of their water distribution system was seriously taken up to provide maximum and quick benefits to farmers of the tubewells in a short period with minimum expenditure. At the later stage of the project, modernization and construction of new tubewells, training to personnel, establishment of work shop and construction of administrative building and tubewell cluster building was taken up. The slow progress in the initial stage of implementation of the programmes is attributed to the following points.: (i) Intricate & lengthy procedure of LCB/ICB as laid down by the World Bank for any work like repair, rehabilitation, renovation, modernization and construction of new tubewells. (ii) The LCB/ICB system was initially not well under stood by either the officers or available contractors who became non responsive at different stage of processing. (6) 65 PAP 'VISE COMMENTS (iii) The financial powers of officers were inadequate. (iv) Contractors available in the state were used to F-2 contract,as all the works of the state are done through F-2 contract. Hence the lengthy and time consuming procedure of LCB/ICB could hardly attract responsive contractors. (v) In the year 1991-92 a long strike by the State Engineers and Staff has also affected the anticipated progress. (vi) As per agreement with World Bank, Works had to be done on unit price contract/price work for $ 2.9.m, works for an amount $0.7 M, on the basis of departmental procedure and an amount of $3.1 M to be spent for drilling and development works of tubewells. The Bankwas requested through the Ministry of Finance that the limit of small works of $2.9 M should be increased to $ 10.M, the limit of departmental works from $0.7M to $2.IM and the limit of field works from $3.1m to $4.77 M but this facility was also not provided by the Bank. It resulted in cancellation of all ongoing works followed by assessment of incomplete works, survey preparation/sanction of estimates, devising tender documents, floating of tenders and finalising the award of contracts. (vii) The Bank was requested to correspond with the Deptt. of Economic Affairs, Ministry of Finance, Govt. of India and accept the reimbursement claim in three phases of construction such as (a) Drilling and development of new tubewells and replacement tubewells. (b) Rehabilitation/construction of pump house and pump unit and, (c) Remaining works of all the types of tubewells but the same has not been accepted by the Bank. The Bank was also requested to accept the reimbursement claims for procurement of materials equipment done by Bihar State Electricity Board for D.P.L. to (7) 66 PARAW'__ COMMENTS ribewells but the same was not conceded. (viii) In 1991-92 the project credit was slashed from59.5 M. SDR to 19.5 M SDR on account of portfolio rationalisation exercise under taken by Govt. of India. Though the exchange rate of US$ changed from Rs.12.962 in 1987 to 22.742 i.e. an increase of -5.45% the reduction in credit was to the tune of 205.13% It resulted in severe increase on the State Budget. It resulted in improper funding of the project by the State Govt. This is the reason why the project which actually picked up in 90-91 could not achieve the desined physical progress in the later years specially after 92-93 and onwards where the funding was Rs. 11.00 Crores 93-94 and Rs. 12.00 Crores in 94-95. The Govt. of India though assured of providing necessary additionalfunding but request made by the State Govt. on this account was not considered. 21. Delay in the implementation is because of non-availability of credit support by the Bank/Govt. of India. This resulted in poor payment response to the suppliers/contractors by MID. This affected the pace of progess because the contractors/suppliers ran short of working capital. 22. No coments. 23. Actual project cost wouldhave been less and the project overrun would have ben within reasonable limits but because of unfavourable response as pointed out in para-22 of the report by the Bank and para- 20 above. 24. The construction of New Tubewells, Medernized Tubewells and Rehabilitated Tubewells at the cost estimated at the time of mid term review could not be achieved.The project could have been completed at the cost much lower than that estimated at present viz. Rs.7.45 lakhsfornew tubewells, Rs.7.00 lakhs for modernized tubewells and Rs. 152 lakhs for rehabilitated tubewells, had the impediments indicated in para 20 above not been there. (8) 67 PARA WISE COMMENTS 25. Comments has already been recorded in para-20 above. 26. No comments. 2?. Cost recovery-steps are being taken to speed up the recovery of arrear water charges. However, with the transfer of tubewells to village panchayats the problem will be reduced gradually. Banks' suggestion at the end of the paragraph will be taken up for implementation. 2S. The issue of installation of meters on tubewells andrationalization of power tariff for both private and public tubewells will be taken up with Bihar State Electricity Board. 29. Though the observations recorded in this para are by and large true. The water delivery to tail end farmers is not made because of low hours of power supply to the tubewells..Now, since about 350 submersible pump sets have been procured, the delay in repairing of pumps will be minimised. The conveyance system loss is mainly due to frequent power cuts and open channels. Since tubewells are gradually being transferred to panchayats/beneficiaries committee dependence upon State's 0 & M budget will be reduced in future. Though there had been effective coordination between MID and BSEB, the later could not take up the issue at tubewell level probably because of their poor financial status. 30. The area irrigated as indicated in this para is not correct as will be evident from the comments stated in para- 11 above. If power supply improves the position will be more than satisfactory. It has already been stated that performance of tubewell is reasonably good, if power is adequately supplied to it. However, when the 0 & M of tubewells will be transferred to village panchayats the tubewell wing's role will be limited to providing only technical back up and thus the position is likely to imporve further. Additionally when the farmers will be satisfied with the performance of tubewells owned by them, they may use the desired cropping pattern with more intensive crops to have profitable crop yields as envisaged at the time of appraisal. 31 No comments. (9) 68 PARAW' COMMENTS 32. No comments. 33. No comments. 34. No comments. 35. No comments. 36. No comments. 37. No comments. 38. Nocomments. 39. No comments. 40. Nocomments. 41. No comments. 42. No comments. 43. No comments. 44. No comments. 45. No comments. 46. No comments. 47. No comments. 48. No comments. 49. No comments. 50. No comments. 51. As will be evident from the discussion made in para-20, the priority was attached to rehabilitation of tubewells and thus construction of new tubewells and modernization of existing tubewells 69 PAF ISE COMMENTS were taken up at a latter stage. The tubewell project was divided into 187 tubewell clusters. It was programmed that work will be taken up in 40 clusters, in stage I, 49 clusters in stage H, and other 40 clusters in stage-I and rest 67 clusters in stage-IV, latter on it was assessed that in 32 clusters both tubewells wing and B.S.E.B. have already went ahead with their works and therfore , it was decided that works of these 32 clusters will be completed on priority basis and then the project activities should be kept limited so that entire 80 clusters can be completed. It resulted in idle capacity with the project. The project works in phase-I and IV could be taken up at a much later stage which contributed to a large noumber of tubewells remaining partly incomplete at the end of the project. As far as selection of sites is concerned, it was made by district level committees consisting of District Magistrate./ DDC, Dist. Agriculture Officer, Executive Engineers of tubewells wing and BSEB. The performance of drilled new tubewells is by and large satisfactory as will be evident from their irrigation figures. Power Constraints: No comments. Under utilisation of facilities : Effort is being made to shift the offices located near cluster building into newly constructed ones and a good number of cluster building have been occupied. The-rest will also be occupied shortly. Since Junior Engineers are given vehicle allowances for maintaining their own motor cycles and since they draw these allowances against having their motor cycles, there is no provision for providing them vehicles. The condition of vehicles used by other officers are satisfactory. Workshop: A good number of workshop buildings has been constructed. Effort will be made to make them functional in near future. Further, when these tubewells will be transferred to village Panchayats, the utility of these work shops will be limited to providing them required service only. Co-ordination: The farmers are opening 2-4 outlets not because of the reasan stated in theparagraphbutbecause of unreliability of power supply to the tubewell. On the tubewells where power supply is satisfactory only 70 PARAV- COMMENTS one outlet in each loop is utilised by them. Inadequate delegation: Agreeable. 52. Nocomments. 53. No comments. 54. No comments. 55. No comments. 56. The assessment of the project outcome by the Bank can not be accepted in totality. The factors like poor power supply, farmers involvement, procedure for bidding, irregular flow of .fLJn5&, sharp slashing in the credit etc. have to be taken into account before assessing the projects outcome. In case of any project one takes into consideration plausible factors to assess the viability of the project but on implementation new / unexpected factors crop up and the expected outcome of the project is affected. In this light it is essential that the assessment of the project outcome be considered in a wholistic manner before arriving at any conclusion. M.I.D. is sure that the project was based on very sound fasting and is bound to deliver irrigational benefits to the small and marginal farmers of the state. The factors which have been identified to affect the project outcome need consideration for the future projects in this field. Even the Bank has observed that by providing diesel generator sets, substantial development impacts can be generated. Under these circumstances, M.I.D. is sure that if in future any such project takes into account the factors mentioned above, in all likelihood, project is bound to suceed. 57. No Comments. 58. No Comments. 59. As stated in the Evaluation report. (12) ANNIIltlVi-A Statementshowing Budget provision and allotment recived for bilar I'u liclewlle, IPrICV N1ojct Credit No. 1737-IN, Rs. in Lites. Financial year Provision in Allotment received Remarks Budget by from G.O.B. G.O.B. 86-87 2070.00 698.500 87-88 2885.20 1303.00 During the latter period of the execution of the project work 88-89 2670.93 2550.00 i.e. from 92-93 to 94-95, when the execution gained 89-90 2600.00 2000.00 mementum the fund flow decreased. 90-91 3299.00 2000.00 91-92 3290.00 1900.00 92-93 2800.00 2040.00 93-94 3913.00 1099.67 94-95 400.00 1200.00 72 ANNEXURE - B Statement showing co-ordination meeting between tubewell wing officials and Bihar State Electricity Board officials. Date Details of meeting 09-04-91 High level co-ordination meeting between Member Administration, Member, Finance of BSEB and Secretary, Minor Irrigation and Project Co-ordinator, Tubewell Wing. 02-08-91 As above. 05-08-91 & 06-08-91 High level Co-ordination meeting Hon'ble Minister & State Minister, M.I.D. and Officer's of B.S.E.B. and Tubewell Wings. 03-01-92 Member Administration and Member, Finance and Officials of Tubewell Wing & B.S.E.B 19-02-92 Project Co-ordinater, Chief Engineer of South Tubewell wing & Joint Secy. BSEB and M.D. Fathuah Phulwarisharf Rural Electrification Co-Operative Society. 12-03-92 Secretary, M.I.D. & Officers of TubeweltWing & BSEB. 27-03-92 High level Coordination meeting between Officers of T/W and BSEB at Darbhanga. 26-03-92 As above at Muzaffarpur. 14-04-92 As above Kishanganj. 21-05-92 As above in the chamber of Project Co-ordinater at Patna. 21-05-92 High level co-ordination meeting between officers of T/W BSEB in the chamber of Hon'ble Minister M.I.D. 27-05-92 Meeting between Senior Officials of T/W and BSEB in the Meeting hall of BSEB. 7 ANNEXUI -B(Contd.) 09 TO 10-02-93 Meeting between officers of T/W and BSEB in presence of Hon'ble Minister, MID At Purnea. 04 To 05-02-93 As above at Darbhanga. 02-03-93 High level Coordination meeting between officer of T/W & BSEB in the Meeting Hall of BSEB. 11.06.93 High level coordination meeting between Hon'ble Minister of MID & Energy Deptt. with Officers of BSEB and T/W wing in tho meeting Hall of BSEB. 21-06-93 Chief Engneer level special meeting bezween officer's of T/ W wing & BSEB at Patna. 22-06-93 As above at Darbhanga.. 20-06-93 As above at Saharsa. 22-06-93 As above at Bhagalpur. 22-06-93 As above at Muzaffarpur. 05-07-93 High level meeting between officers of T/W wing and BSEB in presence of Hon'ble Health Minister at Patna Collectariate. 07-09-93 Meeting on Flood and Drought in the Chairmanship of Hon'ble Chief Minister. 02-09-93 Hon'ble Minister level meeting between Officers of T/W wing and BSEB for removing Electrical Fault of T/W at Biharsharif. 21-01-94 Meeting between Engineer-in-Chief. BSEB & Project Coordinator T/W in the chamber of Co-ordinator. In addition to that, in every month co-ordination meeting at Chief Engineer's and Superintending Engineer's level of T/W wing and BSEB officials are held. INDIA ANNEXURE- C BIHAR PUBLIC TUBEWELL PROJECT (CREDIT NO.1737 -IN) Physical Achievement and Programme of Various Components. As on 31, May 1994) Components of work and Targets Total Target Cummulative Progress to the end of As per Revised Programme As per S.A.R. 3/90 3/91 3/92 3/93 6/93 3/94 UP to 5/94 Remarks 500 New Tube wells 1. Drilling and Development of Wells 500 238 240 246 247 249 255 256 2. Construction of Pump House 500 21 26 38+6p 94+54p 11 2+36p 149+30p 154+25p 3. Construction of Elevated Tank 500 20 23 38+8p 85+64p 97+52p 139+41p 144+37p 4. Pipe distrubution system 500 19 24 39+13p 72+7 1p 75+68p 96+68p 105+59p 5 EnergisationofD.P.L./E.P.L 500 Nil 4 10 44 44 82 89 Contd... ANNEXURE - C (Contd.) LNDIA BIHAR PUBLICTUBEWELL PROJECT (CREDIT NO. 1737 - IN) Physical Achievement and Programme of Various Components. (As on 31, May 1994) Components of work and Targets Total Target Cummulative Progress to the end of As per Revised Program me As per S.A.R. 3/90 3/91 3/92, 3/93 6/93 3/94 UP to 5/94 Remarks 1500 Modernization LA 1. Repair or Construction of Pump house 1000 113 156 288+40p 355+213p 505+63p 707+138p 773+108p 2. Repair and replacement of pump unit 1000 Nil 2 165+2p 311+103p 441 612+56p 723+35p 3 Construction of elevated tank 1000 88 90 138+30p 282+224p 385+121p 593+199p 620+184p 4. Pipedistributionsystem 1000 106 106 166+60p 253+242p 307+188p 370+139P 431+99P 5. EnergizationofD.P.L./E.P.L 1000 2 33 45 305 369 600 1244 Inculding No.s of Tubewell alreary energized before project ANNEXURE - C (Contd.) INDIA BIHAR PUBLICTUBEWELL PROJECT (CREDIT NO.1737 - IN) Physical Achievement and Programme ofVarious Components. As on 31, May 1994) Components of work and Targets Total Target Cummulative Progress to the end of As per Revised Programme As per S.A.R. 3/90 3/91 3/92 3/93 6/93 3/94 UP to 5/94 Remarks 3212 REHABILITATION 1. Replacementofwells 271 129 145 178 178 178 178 178 2. Repairof replacementof pump unit 1155 1948 1948 2074+29P 2228+44p 2666 2791+30P 2847+20P 3 Repair of Replacement of Pump house 1213 121 1245 1293+17p 1655+178p 1851 2118+304p 2354+80p 4. Repair of Water distribution system 1313 847 984 1084 1084 1084 1084 1084 5. Energization by DP L/EPL 3712 299 351 548 2221 2311 2585 3197 6. Replacement of Open Channals by distribution Nil 4 9+1 OP 14+5P 15+8P 15+8P system with PVC pipe line ANNEXURE-D Net irrigable areas created and utitised -New Tubewells. Component Fy87 Fy88 Fy89 Fy90 Fy91 Fy92 Fy93 Fy94 Fy95 Fy96 Fy97 Fy98 Fy99 New Tubewells completedNos. - - - - 4 10 44 89 89 200 250 250 250 Potential - - - - - 400 10(0 4400 8900 20000 25000 25000 25000 created (Ha.) Area Utilised (Ha.) - - - - - 351 . 566 1144 2759 8000 12000 20000 25000 Incrementel - - - - - 351 215 578 1615 524 4000 8000 5000 (Ha.) NB It is assumed that power will be available @ 8 hours per day from 1996 onwards. if power supply imporves further the actual area utilised will further go up. ANNEXURE-E Net irrigable areas created and utilised -Modernised ,Tubewell Component Fy87 Fy88 Fy89 Fy90 Fy91 Fy92 Fy93 Fy94 Fy95 Fy96 Fy97 Fy98 Fy99 Modernized T/W completed No. - - - 2 33 45 253 431 600 800 1000 1300 1500 Potential - - - - 200 3300 4500 25300 43100 60000 80000 100000 130000 created (Ha.) 00 AreaUtilised (Ha.) - - - 88 1448 1935 6578 30000 32000 48000 80000 130000 Incrementel - - - - 88 1360 487 4643 23422 2000 16000 22000 50000 (Ha.) NB It is assumed that power will be available @ 8 hours per day from 1996 onwards. if power supply imporves further the actual area utilised will further go up. ANNEXURE-F Net irrigable areas created and utilised -Rehabilitated Tubewells Component Fy87 Fy88 Fy89 Fy90 Fy91 Fy92 Fy93 Fy94 Fy95 Fy96 Fy97 Fy98 Fy99 Rehabiliated Tubewell completed No. - - 52 299 351 548 1655 2354 2354 2854 3212 3212 3212 Potential - - - 4160 23920 28080 43840 132400 188320 188320 256960 256960 256960 created (Ha.) AreaUtilised (Ha.) - - - 3314 15969 21600 24137 27505 35765 85620 125268 167024 208780 Incrementel - - - 3314 12655 5631 2537 3368 8260 58115 39648 41756 41756 (Ha.) NB: It is assumed that power will be available @ 8 hours per day from 1996 onwards. if power supply imporves further the actual area utilised will further go up. 80 EVALUATION REPORT ON BIHAR PUBLIC TUBEWELL (CREDIT No. 1737-IN) A. PROJECT OBJECTIVE (c) The objective of Bihar Public Tubewell Project was to increase the agricultural production by improving and expanding the use of ground water potential of the State. This was to be achieved by (i) introducing improved technology which restricts and eliminates misuse of water, (ii) undertaking a phased programme to rehabilitate and modernize the existing PTW. ( iii) strenghthening the institution to ensure that the project works be efficiently implemented, operated and maintained and (iv) increasing the agricultural production, employment and income especially for small farmers. This was to be done by (i) construction of 500 new improved tubewell systems each of about 150 MI/h discharge and net command area of about 100 hect. (ii) modernization of about 1000 (1500 revised) tubewells, (iii) rehabilitation of about 3712 (3212 revised) tubewells. (iv) Construction of dedicated power lines to about 5212 tubewells and (v) provision of equipment, transportation vehicles and buildings to be used during the project construction, operation and maintenance, preparation of design and 0 & M manuals, monitoring technical services, studies related to project managament, cost recovery and agro-economic base line survey for selected project tubewells and training of project staff to monitor and evaluate the different activities. Against the target of 500 new tubewells, 256 nos. were drilled and developed. Out of this 256, 89 were fully completed and energized. Besides that, the civil works on 105 nos. were completed. Similarly, against the targets of modernization of 1500 tubewells and rehabilitation of 3212 tubewells, 431 and 2354 tubewells were fully modernized and rehabilitated respectively. Under training programme, 2 Executive Engineers. 72 A. Es. 153 J.Es, 82 Electricians and 42 Nos Pump fitters, 202 Tubewell Operators where the tubewell has already been handed over to Panchayats, were trained. Besides this 636 beneficiaries were also trained. 81 EVALUATION REPORT Under the studies programme, Project Management study and an Agro- Economic baseline survey of selected project tubewells have been completed. A team consisting of 2 S. Es, 3 E.Es., 2 A. Es. and 5 beneficiaries were sent to West Bengal under Management and Technical studies programme. They have submitted their report which is a useful document for handing over the Public Tubewells to beneficiaries' committee, in a manner similar to that of West Bengal. A Design, Construction, Operation and Maintanance manual has been prepared as per S.A.R. and circulated among the field officers for standardization of acivities related to these topics. The above shortfalls in completion of the project components were due to the slow progress in the initial stage of the project which is attributed to the following main reasons 1. Intricate and lengthy procedure of LCB/ICB as laid by the World Bank for procurement and work like repair, rehabilitation, modernization and construction of new Tubewells. Initially the LCB/ICB system was not understood properly by either officers or available contractors in the state. The result was that most of the tenders offered by the contractors became unresponsive at different stages of processing. 2. The power for approval of tenders was vested in the Departmental Level Tender and Purchase Committee, consisting of Secretary, Minor Irrigation Department, Bihar, Secretary, Finance Depertment, Bihar, Engineer-in-chief, Vigilance, Cabinet Vigilance, Bihar, Project Co- ordinator, Tubewell Wing, Govt. of Bihar. The Chief Engineer could hardly approve Civil works tenders for Rs. 0.3 m. It was a usual happening that most of these tenders were not responsive. The world Bank had also laid the criterion that only one tender should be awarded for all tubewells in a cluster consisting of 25-30 tubewells, but no contractor was available for such a big project costing about Rs. One Crore or so as the tubewells are scattered here and there in country side only. 3. Frequent transfer and posting of the Project Officers retarded the (2) 82 EVAl UA TION REPORT progress of the Project work. As per Govt. of Bihar norm, officers are transferred after three years of service from one office to another office. This was also applicable to the officers posted in the project. 4. In initial stages (from 86-87 to 89-90) of the project, the Govt. of Bihar used to sanction the project on yearly basis. And the annual sanction of establishment continued till the end of the project period. As a result. during the first few month of every financial year. The Executive Engineers were not allowed to function as drawing and disbursing officers due to non-sanction of the posts during the poriod which used to be main working period. 5. Cheque drawing authority was made available to the tubewell wing on yearly basis. 6. The construction of Dedicated Power Line (D.P.L.) was not found suitable because it used to run in the country side mostly through areas devoid of habitaion and was more prone to theft..On review however the World Bank agreed to waive the Dedicated Power Line concept. (b) PROJECT DESIGN All New and Modernized Tubewells were constructed as per design of an Improved Standard Tubewell System. But only 170 New and Modcrrnised Tubewells were equipped with well regulated and controlled water distribution system to be operated with automatic switchgear. But the result of its use was not encouraging. The pump controllers were designed to operate at 415V +10%,- 15% voltage i.e. between 352 V and 456 V . But the voltage of power suplied to tubewell was too erratic and fluctuating to enable smooth functioning of these controllers. The voltage received was even as low as 300 V, some times. The old system of auto-starter with main switch was operative in that case. (C) IMPLEMENTATION AND OPERATION EXPERIENCE Though for the Bihar Public Tubewell Project, advance planning for (3) 83 EVALUATION REPORT energization was done, but the BSEB could not cope with the above planning. Later on in place of D.P.L., the switch over to EPL, with independent transformer was even allowed but that could accelerate the energization to some extent only. Although advance payment was made to BSEB but the desired improvement could not be had from them. The project took some time to cope with the Bank's guideline on LCB/ICB tenders and agreements. The project was planned for receiving 16 hours power supply, but due to quite inadequate and untimely power availability from the BSEB, on an average 4 to 6 hours power supply could be received at tubewells, and this thwarted the realization of the objective of the project. As stated above, from 1987-91 the project could not gearup to World Bank procedure and LCB/ICB tenders, so the fund available from GOB could not be fully utilized. When the project came in the position to complete the Scheme in the stipulated period i.e. 31 May 1994, funding from GOB become poor. From Sept.'93 to May 1994 no fund could be received from GOB to execute the works. Here it will not be out of place to mention that in any project execution, of the maximum work is achieved in the last phase of the Project and thereby its targets but in Bihar Public Tubewell Project it could not be done due to financial scarcity. I Concerted moves were made from the project authority for taking Agriculture Extension Services of DOA to the maximum. But the extension services received were not adequate at Public Tubewell level. B. PROJECT EVALUATION The Mission's observation on I.C.R. is based on the assesement of performance of 89 nos. of New Tubewells, 431 nos. of Modernized Tubewells and 2354 nos. of Rehabilitated Tubewells in the year 1993-94. But actually the above numbers of Tubewells were completed upto May'94 and majority of them were not declared operative in 1993-94. Only 4 nos. of New Tubewells, 253 Nos. of Modernised Tubewells and 1653 nos. of Rehabilitated Tubewells were operative in 1933-94. These Tubewells have irrigated 27505 Hect. of the land, 1144 Hact, was irrigated by New Tubewells against 4400 Hect. of additional irrigation potential created. Similarly 6578 Hect. and 19783 Hect. were irrigated by Modernized and Rehabilitated Tubewells against 25300 Hect. and 132400 (4) 84 EVALUATION REPORT Hect. of additional irrigation potential created respectively. This shows that in the year 1993-94, area actually irrigated was 26% for New Tubewells, 26% for Modernized Tubewells and 15% for Rehabilitated Tubewells of additional irrigation potential created. Yearwise detailed performance of Bihar Public Tubewells is given in the table. From the table it may be seen that over-all potential utilization of completed Tubewells of the Project was 79-66% in 89-90, 66.21% in 90-91, 68.00% in 91-92, 45.00% in 92-93 and 16.96% in 93-94. The principal reasons for gradual decrease in potential utilization is shortage of power supply. Study of performance of the Tubewell is quite early as compared to the time span of about 6 to 8 years required for the complete build up of Tubewell system and reasonable assessment of the full impact of the Project. Tubewells declared operational, requires a period of 4-6 months for becoming fully stabilized and for being capable of irrigating in full swing. Upto the year 1992-93, only 1952 Tubewells have been completed which were declared operative in 1993-94. Some Tubewells completed in the year 1992-93 were in testing period. LESSONS LEARNED DURING THE PROJECT IMPLEMENTATION The Main factors affecting the implementation of the Project have been discussed in the previous paras. However, the same are summarised below 1. Officers posted in the work of Project execution work should not be replaced till the project is completed. 2. Executing work of new tubewell should not be taken up till tubewells already completed or partially completed are made fully operational. 3. Shortage of power supply has been the main factors affecting the implementation of the Project. The Tubewell Project was designed for 16 hrs. power supply per day as envisaged in the S.A.R. But the average power supply is 3 to 6 hrs/day. This is a Statewise problem, hence it should be tackled at State level. Till the improvement in (5) 85 EVALUATION REPORT power supply position, there should be stand by arrangement by providing D.G. Set to supplement the shortage of power. Energy bill should be on the basis of units consumed because the duration of supply is much below the Minimum Guarantee clause, hence in place of fixed charge (Minimum guarantee) the Energy meter should be installed on each Tubewell and energy bill should be as per consumption. 4. As per Govt. order, all the Tubewells are being handed over to the Panchyat in phases. Till now 488 Nos. of Public Tubewells have been handed over to Panchayats. It has been found that the Panchayats are not coming forward to take-over Public Tubewells. It is nacessary to motivate the farmer's society/panchayat to take over Public Tubewells. The maintenance and running by the Panchayats is by and large poor. 5. At present water rate is charged on the basis of area irrigated. The water rate has to be revised and it is under process. The water rate should be worked out on volumetric basis. This will encourage the economic use of water for irrigation and thereby over more area due to saving from optimum use of water. C. BANK PERFORMANCE AND LESSONS LEARNED: So far as the relations with World Bank with Government of Bihar is concerned, it was cordial. Their suggestions were mostly for improvement is implementation and Govt. of Bihar carried out their suggestions in its right earnest. 1 . The only grievance is regarding the curtailment of the credit amount without consulting Govt. of Bihar. 2. The Word Bank insisted that on the basis ot completed Tubewell only, reimbursement would be made for civil works but that included the energization part. As energization part was dependent on the performance of Bihar State Electricity Board, the reimbursement figure was negligible in the early years. Actually the disbursement should be allowed on completed jobs to accelerate the progress as was done in case of Govt. of West Bengal but, unfortunately the Bank refused in case of Bihar (6 ) PERFORMANCE OF BIHAR PUBLIC TUBEWELL TABLE: Progress Number ol Tubewells declared Completed Year of Add. Irri. Potential Utilization Percentage upto. actual created as per in flect. Of utilization. New Modernised Rahabilitated. Total operation. Bank in Hect. 1. 2. 3. 4. 5. 6. 7. 8. 9. 1988-89 - - 52 52 1989-90 4160 3314 79.66 1989-90 - 2 299 301 1990-91 24120 15969 66.21 1990-91 4 33 351 388 1991-92 31780 21600 68.00 1991-92 10 45 548 603 1992-93 53740 24137 45.00 1992-93 44 253 1655 1952 1993-94 162100 27505 16.96 0 1993-95 89 431 2354 2874 1994-95 240320 - - (31 ,May'94) In the Year 1993-94 area actually irrigated was 26% (New Tubewells). 2617, (Modernised Tubewell) & 15% (Rehabilitated Tubewells) of additional potential created. IBRD 19278R IN D l A BIHAR PUBLIC TUBEWELL PROJECT 7 PROJECT AREA AlA 26- 26°- PATNA) ?1:- Jl; 24-- -2220 22- PROJECT AREA LMITS RIVERS ® STATE CAPITAL The boondorie, color-, 0 2U 40 60 80 100 120 KILOMTEPS DISTRICTBOLNDARIES denominations and any other STATE BOUNDARIES imply, an tte part of The.World Bank Group, 2 20 40 62 2M.LES *" INTERNATIONALBOUNDARY any judgment an the legal status of any territory ar. any endorsement ar acceptance af such boundories. 2 b. o,,..21°. ,5 66 87- 88 APRIL 1995 IMAGING Report No: 14409 Type: ICR