Report. No. 14160 PROJECTCOMPLFTIONREPORT INDIA NARMADA RIVER DEVELOPMENT WATER RIVER DELIVERY AND DRAINAGE PROJECT (Gedit1553-IN) Annexesto Part I, andPart I11 March 29,1995 Agricultural OperationsDivision Country Department2 SouthAsia Regional Office AI,lwd Page 1of 9 PROJECT COMPLETION REPORT INDIA NARMADA RIVER DEVELOPMENT WATER DELJYERY AND DRAINAGE PROJECT (Credit 1553-IN) HYJlROLOGY AND WATER MANAGEMENT Main Points of the Independent Review Report 1. After setting out briefly the objectives of the multi-purpose SSP project, the Independent Review Report describes its principal watcr management features. It is indicates that "SSP will divert, on average, 9.5 million acre feet (MAF) of the Narmada River water out of the total of 28 MAF that has been allocated." (p. 241). The report states that the 40,000cubic feet per second (cusec) main canal (p. 252) might be too large as it could empty the SSP reservoir live storage in less than two months. TheIndependentReview Report also argues that the final height of the dam was fixed at 455 ft without an environmental analysis of the impact on the submergence area (p. 244). In a discussion on water availability,the Independent Review Report hints that the figure of 28 MAF detennined by the Narmada Water Dispute Tribunal (NWDT)could be over estimated because of a controversy on the quantum of water available and the assumption that the upstream NSP dam would not be built simultaneously. The report also questions the accuracy of hydrological data when it states that "no internal or external consistency checks have been made and none are presently under way" (p. 248) and says that no appropriate understanding of the hydrology of SSP with or without NSP exists. As a result, the Independent Review Report suggests that the existing simulation studies should be updated and there is compelling evidence that the SSP will not operate asplanned. In itsconclusions, the reportstates that there is a need for a comprehensive reevaluation of the dam,powerhouse and canal system. Bank Response Introduction 2. The Independent Review Report rightly points out that some of the assumptions made by the NWDT particularly xegarding the stages of construction of NSP and other reservoirs upstream of SSP are no longer valid due to delays in implementation But the report is not correct when (a) it questions the accuracy of hydrological data, (b) says that no analysis of storage was done in the event that NSP would not be constructed, and (c) concludes that there is a need for a comprehensive re-evaluation of the dam, powerbouse and canal system. In the Bank's response entitled 'Review of C a n t Status and Next Steps*prepared for the Board's meeting of October 23,1992, The Bank acknowledgedthat hydrologicalmodelling and data would have to beupdated periodically to reflect changing conditions in the Narmada Basin. However, in the Bank's opinion, water availabilityin the first 10-20years of the project will be more than adequateto fuE1l SSP system's requirements under the current design even without further storage upstream, but there was a risk in the long-term that some water shortage will occur in unusually dry years. The Bank concluded that the project will have ample water for many years and that the SSP will work as designed. 3. Nevertheless, it is now felt that before embarking on the second time slice - including the extension of the main canal and distribution networks beyond Mahi - it would be necessary to clarify water allocation policies and update some of the initial assumptions on the basis of more recent technical and economic data. During this process, it would benecessary to consider various &lnIuxd Page 2 of 9 development scenarios upstream of the Sardar Sarovar Dam - with delays for NSP and water allocation policies between irrigation, M&I, downstream releases and power generationparticularly during the early stages of development. While considering such development scenarios, it is importantto realizethat the height and live storage of the SSPdam, the size of the SSPmain canal up to Mahi, and the quantum of surfacewater (as per the NWDT award) are fixed. The variables of the development optionswould then be: the releases downstream for environmentalcontrol, a more precise estimate of groundwater availability at various locations of the command area, the amountof power generation and the sizeof the command a ~ An . economicre-evaluation of SSP is requiredto give an adequate weightage to possible additional benefits derived from M&I water supply,peak power generationand revised cropping pattern. The result of this exercisewould be to rank development options and optimizethe economic, environmental and social benefits of the project. Sizing of Dam and Main Canal 4. The IndependentReview Report recognizes that the height of the dam is a compromise decreed by the NWDT after having considered various options involvinghigher and lower dam heights and weighed the costs and benefits of these options. The costs of a higher dam are the displacementof additional people and thelossof agriculturalland in MP due to submergence. The benefits are the higher power generation which will benefit Madhya Pradesh and the larger irrigated areas during the dry season which will benefit Gujarat. This compromise was arrived at after many years of discussions and can not be revised without contravening the Tribunal's decision. The dam, theriverbed power house and allappurtenantstructureshave now been designed and"= being constructedfor a frnalheight of 455 ft. 5. With regard to the sizing of the main canal, the final figure of 40,000 cusecs (1,120 cu- mecs) was established after several studies which considered higher and lower discharges. The final sizing was arrived at by considering peak surface water requirements at full development which will occur during two fortnights, one in November and another in February. At one stage, the Bank suggested a larger discharge of 45,000 cusecs for improved operational flexibility. However, this option was rejected sincethe main canal will be able to supplymore than the actual demand during the many years preceding full development. The Bank SAR (SDV Annex 6, p. 11) statesthat safety factorsof 5% to 15%were used in the design of the irrigation system to take into account the possible inaccuracies in crop water requirement calculations and also the possible changesof croppingpattern in the future. Thefactthat the main canalcould depletethe mewoir in two months is not specific to SSP. Similarsituationsoccur with any main canaldesigned, as is the usual practice, to satisfy peak water requirements. Fortunately, peak water requirements only last about two weeks and, the rest of the time, water flows will be closely adjusted to water demand through a relatively sophisticated remote control and monitoring system down to the 8.5 m3Is level. At the lowervillage level water will be distributedstrictlyin accordanceto the area served. Therefore, the risk that the main canal will empty the reservoir in less time than it should is remotel. Accuracy of Hydrological Data 6. The Independent Review Report is incorrect in saying that no internal and external consistencychecks were carried out on the hydrological data In fact, several hydrologicalseries have been proposed for estimatingthe overall Nannada River water resource. AU seriesare based on the Garudeshwargauging stationlocated about 14km downstream of the Sardar SarovarDam and rainfall stations located throughout the river basin. Flow measurements started at Garudeshwarin 1948and rainfall data has beenrecorded since 1891. The flow estimatesprepared 1 The Borrower is of the opinion that thm is w risk for the main anal to empty the dun in lcss time than rcbadulad. A n u a l Page 3 of 9. by the NWDT and agreed by the riparian states were based on 79 years of observed and generated flows from 1891to 1970. Subsequentanalysis of flows were made by a consultantfirm (ORG) on behalf of NPG and the Bank appraisal team. The consultant used a series of observed flows from 1948to 1978forthe dam operation simulation studieswhile the Bank'shydrologist based his analysison an intermediateseriesof 54 years based of observedand generated flowsfrom 1925to 1978. The Bank's rainfall-moff regression analysis was based on 21 years of observed flows from 1958to 1978. Recently, these estimates were updated by the Central Water Commission overa seriesof generatedand observedflowsfrom 1891to 1990. 7. The results of the above analysis regarding Gujarat's 75% dependable share of 9 MAF (32.14%), as determined by the NWDT on the basis of 28 MAF total utilizable flow, is summarized asfollows: Statistical Analysis of Gujarat's Share of Narmada Waters 75% Dependable . 50% Dependable Mm3 Mm3 NWDTUtilizable flow (1) 11,100(9.0 MAF) - NWDT 1891-1970Series(2) 10,789 (8.7 MAF) 13,961(11.3MAF) ORG 1948-1978Series(3) 9,276 (7.5 MAF) 12914(10.5 MAF) Bank 1925-1978Series(4) 11,326 (9.2 MAF) 14,460(11.7 MAF) CWC 1891-1990Series(5) 10,545 (8.6MAF') 13,083(10.6 MAF) (1)River flows+Return flows(10%) Carryoverin uls Storage- Evaporation losses + (2)Generated flowsup to 1948and observed flowsthereafter (3) Observed flows only (4) Observed and generated flows (5)Generatedflowsup to 1948and observed flowsthereafter 8. As can be seen, the ORG seriesgives a yield about 18%and 11%lowerthan the Bank's estimates for the 75% and 50%dependable flows, respectively. In fact, the Bank's hydrologist had judged the30-year ORGseries to be too shortand not representativeasit contained too many dry years. Therefore, he preferred to use a longer series of 54 years based on generated and observed flows. The ORG series also shows some shortcomings when compared to the more recent CWC series which contains 43 years of actual data . One can therefore conclude that the ORG series was not sufficiently representative. If the ORG series is excluded from the comparison, the other seriesarequiteconsistentand allwithin acceptablemarginsof errorof 5.096 for the 75%dependableflows when compared to theNWDT figurewhich was used for sizingthe project. This margin of erroris much smallerthan the 10% to 15%margin of error made on the water requirementestimates. It canthereforebe concluded without doubt that the 11,100Mm3 (9 MAF) fued by theNWDT can be used forplanningpurposes. 9. With regard to the accuracyof flow measurements, several methods have been used since the creation of the Garudeshwar gauging station in 1948. At present, the station consists of: (i) threecross sectionslocated at 75 mintervalswithin a straightand well defined sectionof a rocky riverbed, (ii) a multi-span bridge about 800 m long located about 700 m downstream of the previous cross sections, and (iii) a cross section about 150 m downstream of the bridge. The flows were initially measured by the float method and in 1961floats were replaced by current meter measwments. At present, the flow measunementsare made asfollows: (a)when the river is low, the velocity is measured by current meter in the first cross sections from an outboard motor boat, (b) when the velocity increases, the measurements are made by current meter from the downstream side of the bridge, and (c)when the velocitiesexceed 3.5 mls, the measurementsare made by float between the bridge and the downstream cross section. In 1970, the bridge was washed away by an exceptionalfloodand had to be reconstructed. On that occasion, the accuracy A n w d Page 4 of 9 . of the gauging station was thoroughly rechecked and recalibrated by comparing discharges measured by float and current meter at various cross sections. The rating curves and flow coefficientswere set and no discrepancieswere observed in theflow measurements. Reservoir Operation Studies2 10. A probabilityanalysisof water availabilityfor various componentsof SSP was canied out by ORG taking into consideration various stages of development. This analysiswas done on the basis of 10-daily flows for the period June to November and of monthly flows for December to May, covering the 30-year series of observed flows then available. The Bank's hydrologist believed that the adopted series introduced a conservativebias into the operation studies since it yields a lower average flow than suggested by the Bank's estimated long-term series. Some correctivefactorswere therefore introducedin thecalculations. This belief may be less valid today in the light of CWC's long-term series. 11. Sincereservoir operationsand reservoiryields are closely related to upstream abstractions and regulative capacity, fivedistinctstagesof developmentwere defined in theORG studies: three of which are based on the NWDTs projected time-frame for developmentwhile the two others assumed a slower pace of developmentparticularly for the first years of operation of SSP (Stage 1) and when Gujarat and Rajasthan are at full development but MP remains at an early stage of development in terms of abstractionsand regulative capacity (Stage 3). 12. The simulation studies showed that the availability of the 75% dependable share water under the given 30-year runoff series falls short of the allocations as projected by the NWDT. Gujarat, for instance could use only about 10,440 Mm3 of its share water at full basin development,whereas the NWDTs allocation is 11,100 Mm3 at 75% dependability. This result would tend to demonstratethat other development options need to be studied and the simulation studiesrefined. As expected, power generation at the RBPH dimhishes dramaticallytowards full development and unavoidable spills also decrease over the stages. Groundwater extraction increasesroughly in proportion to projected irrigationuse. 13. A scenario in which NSP is delayed for the early stages of development resulted in a substantialshortfallof power generation (-25%), a doubling of spills and a shift of power genera- tion from dry season to rainy season. Gujarat's share of water would drop by about 20% and inigated area would decline by about the sameamount. Though this case appearsmore theoretical now that the construction of the NSP dam has been awarded and the Bargi hydro-power project now releases from 160to 220 cumecs during the dry season, there is still a risk that NSP will be substantiallydelayed and that the releasesfrom Bargi will be reduced over time due to irrigation development. 14. TheORG simulation studies have somelimitationsdue to: (a) the rather optimisticdevelop ment scenarios,(b) therather shorthydrological seriesin view of the large variabilityof theNarrna- da discharges, (c) thechangesin the cropping pattern that are occurring due to the liberalization of the economy, (d) the inadequacy of crop water requirements held constant on the basis of 50% dependablerainfall in the command, and (e) the fact that releases of water downstream to control the ecology in the estuary was not considered. It is believed that the simulationof upstream deve- lopment should be refined as MP's plans for water use and its development schedule are now becoming better known. In particular, the power generation aspects in MP and reuse of return flows upstream should be furtherstudied, together with a more detailed modeling of all reservoirs in the upstream modeL Ideally, the studies should be integrated into a basin-wide reservoir mana- gement model which would allow fine-tuning of reservoir operation policies and rule curves for real-time operation. The objectiveof the operation would be to satisfy all party states' individual 2 Detailedd t r of thcv studies a n be follad in the SDV Volume 1. Amex 3 'Sufoce Watcr Rcooraces' A t l w d Page 5 of 9 demands, and simultaneouslyto optimize the benefits from Narmada water basin-wide over any given year. Special emphasisshould be given to the operation during the critical build-up and drought periods. 15. For the above reasons, SSNNLofficialshave requested ORG to carry out new simulation studiesbased on more recent hydrological data and revised water requirementfor hydro-power, inigation,M&I and upstmm and downstreamenvironmentalmitigation measures. Theserevised studiesshould be based on the decisionsof the NWDTconcerningwater allocationsand the height of the dam and also on the fact that the main canal up to Mahi has alreadybeen constructed. The variables of the revid studies would be the amount of power generation, the releases of water downstream and the sizeof the command area - Water Availability 16. In its present configuration, SSP is not a water-rich project. In broad terms, the yearly water resourcdwaterqseestimatesfor Gujaratat full developmentcan be crudely summarizedas follows: a. WaterAvailability (Mm3) "UtilizableFlow"at Sardar SarovarDam 11,100 13,8003 Groundwaterat various locations 2,960 3,700 En-Route rivers - 320 400 Total 14,380 17,900 b . Water Requirementsat Headworks IrrigatedAgriculture Municipal& IndustrialUses Total 17. The inigationwater requirementshave been estimatedin the SAR on the basis of average rainfalls, a CCA of 1.87 M ha, an irrigation intensity of 106% (SDV Annex 10,Table 9) and a water useefficiency of 48% for surfacewater and 60% for public tubewellirrigation (see Water Delivery and Drainage SAR p.61, para.9.20). In addition, the SAR kept crop water requirements to a minimum by assuming that farmers will use only 90%of the estimated average water requirements (SDV, Annex 10, para. 10). On the basis of these assumptions, the average water requirements are expected to be met. However, a rapid estimate of the 75% dependable water requirementscarried out by the PCR showsthat at full developmentthere is likely to be an overall 3 CWC1891-1990 Saia Vergin Fbws - 13.083 Urn3 Return flow + clny o v a evaporation losrr (+5.3%) - 4 u- Flow 13.776 M m 3 say 13,800 M m 3 4 Not calculated in SAR wr in my suboequent repom such as "Planningfor Prosperity'. Tbe rapid a h a t e of the 75%&pWk wata requirementhas been obtrirvd by inumsiag tbc average water requirement by 109b. Average water requirementshave becn derived from SDV Anaex 10. Tabk 11 FA0 rrcommends to w tbe effective rainfall for pluming imgation requkemenb, i.e.. tbc 8096 &padable rainfall rotber thm tbc 509b depcndabk ninfall .rhas been done in tbc SAR. 'Ibe difference between ktwo figures can be rigaiflcu~tin drought-prone area ruch at Gujuat ADnGd Page 6 of 9 water shortage of about 23% when compared to the75% water availability7. Though there is some difficulty in estimating precisely water requirements 20 years from now, this difference appears quite high The shortageof water is recognized in the Bank documentswhich state: "The amount of water available is not large in relation to the area to be served" (SDV, Annex 1,para.. 4.26) and "Even at full irrigation development,some crops would still be grown under rainfed conditions" (SDV, Annex 10,para. 13). 18. The actual shortage of water at full development may be more severe than indicated. The above table does not take into account spills at Sardar Sarovar Dam during the rainy season, downstream releases during the dry season for environmental reasons and power generation, if any, at full development. A more realistic assumption of water requirementsat fulldevelopment should take intoconsideration these factorsand thepossibilitythat SSP in its presentconfiguration may use more water thanestimated in the SAR There is consequently a risk that Gujarat will requiremore than its shareof 9.0 MAF before the NWDTaward might be revised in 20248. Revised Operation Studies 19. Though the review of the project hydrology and water resources was not part of the benchmarks, the Bank in consultationwith the Borrower engaged a consulting fm to assist the Borrower in preparing a statusnote on the validity of the issuesraised by the IndependentReview and their likely impact on project perfonnance9. The findingsof the consultants' report, "Sardar Sarovar Project Hydrology and Water Resowces" of May 1993, are summarizedbelow. 20. Simplified operationalstudiesfor the SSPwere carried out by consultantsto determinethe supplyldemand match during the 1948-1990period of observed flow records. In doing so, the consultant made reasonable assumptionswith respect to upstream uses in MP and groundwater availabilityin the command area. In particular, they assumed, based on availabledocumentation, that by 2024 MP's level of demand willbe more likely between 12,000and 18,000 Mm3 (10 and 15 MAF) than the 22,800 Mm3 (18.5 MAF) indicated by the NWDT. Thus,a level of 16,000 Mm3 (13MAF) was assumed by the consultants. The results of the simplified operational studies are summarizedbelow. 21. From 1995to 2005, between the early years of development and completion of the SSP command area as pnseatly planned, theSardarSarovardam alonewillbe sufficientto provide the necessary regulation and storage to supply the irrigation and D,M&I demands of the project. However, from about 2000, as the SSP and upstream demands build up, the risk of shortages in the drier years increasesprogressively. A ten-year &lay in the construction of the Narmada Sagar Dam, which assumescompletionby 2002, will have littleimpact on irrigation and DM&I but will reduce power generation. Provision of a lower level irrigation bypass tunnel, as recommendedby the Bank, to increaselive storage, will allow increased flexibility during dry years. Beyond year 2005, the Nannada Sagarreservoir becomes a necessity if the command area developsas planned. 22. Fromtoto, completionoftheSSPcommandareaandthedateofrevision between of the Tribunal award, the increase in demand comesprimarily from upstream development in MP and Maharashtm At this level of development, the DM&I demandscan be met every year, except 7 Borrower does mt accept thc wnclucion that tkcmay k a wata hortrge of .bout 23% for thc 75% dependable year. 8 Tbe Bomwa f a b that this rtrtement is incomdr k NCA will monitor the we of water by thc riparianstab .rper tbe NWDT award. 9 Tbc wnsultawy wu lbdout of ODA Trust Fundf ut .ride to assist thc Borrower in meeting tbe knchmPrkr fued by tbe Board by Match 31. 1993. A l u L l Page 7 of 9 in the severest droughts such as that of 189911900. The kharif crops demand can be met with a 100% dependability except in the severest drought year, and the rabi crops, with a 90% dependability. The lowerlevel irrigation bypass tunnel would ensure that at least these demands are met in full. 23. m,thekharif cropsdemand will be met with a 80% dependability and the rabi crops with a 85% dependability. However, in the long-tern, if MP and Maharashtramake use of their full allocations, the frequency impact on the kharif crop will remain about the same but the proportion of years inwhich the rabi demand can bemet in full fallsto between 50-6096. 24. Theaboveresultsneed to bemoderated by thefollowingobservations: Consultantsmade several assumptionsin their simplified operationalstudies which arefavorableto the project. In particular, they used the NPG figures from "Planning for Prosperityw(PFP) of November 1989 and not the SAR figuresfor irrigated areasand irrigationefficiencies which affectto a largeextent water requirements. The differencebetween thetwo are as follows. PEE SBB CCA 2.12 M. ha (1) 1.86 M. ha (2) Kharif Crops 23.8 96 (3) 28.0 96 (4) Rabi Crops 29.1 % 34.0 96 SummerCrops 1.8 % 7.0 96 2 Seasonals 28.0 96 34.0 96 Perenids 1.7 96 3.0 96 IrrigationIntensity(Total) 84.4 96 106.0 96 IrrigationEfficiency (SurfaceWater) 60.0 96 (5) 48.0 96 (6) Irrigation EfEciency (Groundwater) 67.0 % 60.0 % Inigation Effciency (Overall) 61.8 96 51.0 96 (1) PFP p. 254 (2) SDV, Annex 10,Table 11 (3)These and thefollowingfiguresbased on PFPp. 24-25 and p. 258-259. (4) These and the following figuresbased on SDV, Annex 10,Table9. (5) These and the followingfigum based on Consultants report p. 23. (6) These and the followingfigures based on SAR,p.61, pm9.20. 25. As can be noted, the SAR assumptions are premised on a smaller CCA than the PFP by about 1296and on a higher irrigationintensityby about 26%. In terns of total irrigated area, the SAR level is 11%larger than the PFP. With regard to overallirrigation efficiencies,the PFP is 10.8% points higher than the SAR. Thesedifferenceslead to a higher water requirement for the SAR when compared to that of PFP by at least 10% for the irrigated area and 20 96 for the efficiencieswhich translatesintoa differenceof about 3,150M m 3 (2.6 MAF). Both PFP and the SARwhen estimatingthe cropwater requirementsbase their calculationson averagerainfall rather than on effectiverainfall mommended by FAO. In addition, the SAR applied a 0.9 coefficientto itscalculationsto accommodate the likelihood that farmerswillunder-irrigatetheircrops. Thus the actualirrigationwater requirementsare likely to be higher than the SARestimateslo. 26. Finally, the consultantsin their operational studieshas not considered the most likely need to release water downstream of the Sardar SarovarDam to controlthe adverseimpacts of salinity inuusion during the dry season and the pollution that will result from the industrializationand the 10 'IbeBorrowerfeek that thiE wbok rbould be .mended as it disagreer witb the assumption tbu water requirements have been under-eatimad AxuEd Page 8 of 9 return flows from irrigation. The same consultantsare studying these aspects in gkater detail as part of a command area Environmental Impact Assessment which is planned to be completed by December 1994. Risk Analysis 27. The water requirementsusedby the consultantsare likely to be underevaluated by about 30%. When taking into accountthe necessarycorrections,the project as currently designed will face growing and significant shortages of water as the demand upstream builds and Gujarat is likely to require more than its share at full development. To avoid that such a situationdevelops, several options could be considered by Gujarat: (i) hope for an increased allocation when the Tribunalis reopened; (ii)cut back on theirrigation of rabi cropsand give more importanceto kharif irrigated crops; (iii) reduce the size of the command areall; or (iv) gradually pursue greater efficiency through sprinklerand drip irrigation techniques. The last option willrequire additional investmentsin infrastructureand on farm development. Sincecutting back on irrigationislikely to be resisted by fanners, thebest option initially,which isimmediatelyfeasible,would be to develop the command area graduallyby giving priority in the early years to: (a) the areas yielding the best returns, (b) the developmentof sprinkler and drip irrigation, and (c) D,M&I in the areas lesssuited for irrigation. Given the low rate of return from the least economic parts of the command and the high economic value of D,M&I water, this optionislikely to improveeconomic returns. Recogni- zing the limits of their quick analysis, the consultantsrecommended that these defects should be addressedin the updating of theoperationalmodel that NPG isdoing with the assistance of ORG. 28. Even assuming that the water availability and size of the command 'area have been matched, to reduce the risk of SSP not operating as planned, strict water-use policies must be established, closely monitored and enforced by NCA particularly during the build-up period 12. It seems that the detailed rules for conjunctive use have not yet been worked out or groundwater integrated in the design of the initial 52irrigationblocks. In addition, it appearsthat no agEment exists between Gujarat and MP on water-use and allocations among power, irrigation and M&I during the.intermediatedevelopment stages. A logical decision would be that: (i) M&I gets first priority, (ii) surfacewater releasesfor irrigationare strictly proportionalto the area developed, (iii) irrigation releases are made first through the CHPH and second through the CHPH and theIBPT when thedemand is higher than thecapacity of the CHPH, and (iv) the balance of water available should be used for,,powergeneration throughtheRBPH. A policy decision is also required on the sharing of spills and downstream releases in the rainy and dry seasonsfor environmental misons. 29. In addition, as there willbe excesswater in the early stages of SSP development, SSNNL authorities must determine the water use policies that will apply to the various parts of the command area particularly with regard to the developmentof groundwaterfor conjunctiveuse. If such policiesare not established well in advanceand distributionsystemsdesigned and constructed accordingly, the command areaup to Mahi -which will be the first to receive water and which has the largest groundwaterresources -will take more than its share and thus deprive the more remote command areas of Saurashtraand Kutchl3. An agreement would also need to be reached on the level and construction of the IBPT, which should enhance the water availability but at the risk of Gujarat taking more than its shareof water. 11 Tbe Borrower empbrri that tbe pluming of tbe w m d arm hu been b u d on socioeconomic wmidcsrtiom. taking hb account tbc fact th.1tbe Qought prone UC.M should be provided with deqrutc water. It concluder that tbeqwtion of nxlucing the wmmmd uu dar not uiK. 12 Tbe Borrower obsemer th.1as NCA has been wndtutcd b monitor water docations b riparianstates, there is no question of SSP not operating as plumed. 13 Tbe Borrower believer that ~ c situationsm y not arir with the planned control volume wacept and b farmers' participation. AMcLl Page 9 of 9 Conclusion 30. The above points tend to demonstrate that while the basic hydrological data are correct, simulation studiesneed to be further r e f d to establish more accurately the magnitudeof regulated flows obtainable from the Sardar Sarovar reservoir, the groundwater availability in various locationsand the en route rivers. Most of the existingstudies tend to show that SSPin its present configurationmay not be able to satisfy the 75%dependabilitycriterion beyond 2025and there is a real risk that Gujarat will require more than its share at full developmentl4. Consequently, the project may not functionas planned unless the actionsare implemented to: (i) defme the real time water allocations policies among the various users within the framework of the NWDT, i.e., between irrigation, M&I, power, upstream and downstream requirements, (ii) define the groundwater developmentand conjunctiveuse policiesin thevarious regions of the command, (iii) refine the ground water models to determine the quantity of groundwater usable and amount of mining possible for each project location, (iv) refine the river flow and dam operation simulation model based on realistic development scenariosand updated water flow;groundwater availability and water requirements, (v) review the water-use policies and the design of the distribution net- works on the basis of findings from the simulation model, (vi) proceed with the required adjustments in the initial project design, wherever still possible, and (vii) revise the economic analysison the basis of the proposed adjustments. 31. Finally, the PCR concludesthat, with the revisions from the above additionalstudies SSP will be a soundproposition, not only from a socialpoint of view, but also from environmentaland economicpoints of view. 14 The Borrowerthinks that it ispremature to conclude that SSPmay not function as plmed d, tbmfore, the rt~mmendationsfor improvemeat ur uaclllod for. -LuuwL Page 1of 22 PROJECT COMPLETION REPORT INDIA NARMADA IUVER DEVELOPMENT WATER DELIVERY AND DRAINAGE PROJECT (Credit 1553-IN) ENVIRONMENTAL IMPACTS AND MANAGEMENT Project Background and Environmental Context 1. As part of the preparation and appraisal of theWater Delivery and DrainageProject, several studies were carried out by the Government of Gujarat (GOG) to examine the environmental impacts of the project in the command area. These related primarily to standard irrigation and drainage studies and their impact on water quality, groundwater, waterlogging and salinity. At the time the project was being prepared and appraised, the environmental regulatory regime in India and the Bank's operational guidance mechanisms with respect to environment were still being formulated,or were in the early stages of implementation The Guidelinesprevailing at the time of project Negotiations(November 1984) and Board Pmentation (March 1985)were those contained in Operational Manual Statement(OMS) 2.36 issuedin May 1984entitled "EnvironmentalAspects of Bank Work". 2. OMS 2.36 recognized that the Bank's environmental policy was still evolving. Nevertheless, the basic environmental concerns and principles for processing projects were well covered. In particular, OMS 2.36 required that projects with unavoidable adverse effects on the environment should contain a compensatory component adequate to mitigate these effects. It indicated that, at the identification stage, these projects should be identified and the investigations needed to prevent or mitigate the adverse effects should be determined. During prepaxtion, the Borrower was to c h q out the necessary enquiries and the Bank staff was to outline in the Project Brief the measures needed to avoid or mitigate serious environmental risks or enhance environmental benefits, and point out any problems that merited further studies at this stage. At appraisal, the Staff was to assess the environmental findings, evaluate the future magnitude and timing of adverse effects, and assess whether the preventive, mitigatory, or remedial measures recommended were adequate. The SAR was to describe the environmental measures being provided. At Negotiations, the environmentalaspectswere to be discussed with the Borrower and the legal Agreements could contain covenants or other provisions concerned with these aspects. Finally, OMS 2.36 indicated that supenrisionmissions were to routinely review the environmental aspects with the Borrower and must ensure that the measures agreed upon were adequately and responsibly administered. 3. Thereafter, the Bank issued in October 1989 Operational Directive 4.00 which Annex A was on "Environmental Assessment". Annex A outlines the Bank's policy and procedures for the environmental assessment (EA) lending operations, and related types of environmental analysis. The purpose of EA is to ensure that the development options under consideration are environmentally sound and sustainable, and that any environmental consequences are recognized early in the project cycle and taken into account in the project design. The Annex states that the detail and sophisticationof the analysisshould be commensuratewith the expected impactsand that therecould be either project-specific EAs or regional and sectoralEAs. It recommends institutional JliMELL Page 2 of 22 strengthening,staff training, involvement of affected groups and NGOs, and, for major projects with seriousmulti-dimensionalenvironmentalconcerns, the recruitment of an Environmental Advisory Panel of independent, internationally recognized, environment specialiststo review and advise on, inter-alia, the TOR and findings of the EA. Each project is to be screened in four categories, from A to D based upon the nature, magnitude, and sensistivity of environmental issues. Category A, under which the SSP project falls, requires the preapration of a detailed EA prior to appraisal and the incorporation of an environmental annex summarizing the EA in the SAR. The Annex specifiesthat the detailed EA shouldcompriseinter alia a mitigation plan and a monitoring plan to be carried out during project implementation. Further, Category A projects requires a formal clearance from the Regional Environment Division before Negociations can proceed. 4. In July 1991, the Bank published an Environmental Assessment Sourcebook in three volumes to provide guidance throughoutthe EA process described in OD 4.00. This Sourcebook is quite comprehensive and provides checklists, outlines and samples for a number of typical environmentalstudiesand EAs. 5. Finally, on October 1991the Bank issued OperationalDirective 4.01 to replace OMS 2.36 that confirms the policies and guidelinesprovided in Annex A of OD 4.00 and the Sourcebook. Thus the Bank policies and procedures became more stringent between Board Presentation and Project Completion. In a way, the SAR was ahead of its time as it specified that the Borrower (NPG)was to prepare, during project implementation, a detailedenvironmentalassessmentand necessary actions for protective measures for thecommand areaas well as an afforestationplan for thecommand area, includingspecialzoneuse. TheLegal Documentsrequired that Gujaratshould take all such meausresas shall be necessary to minimizethe riskof malaria, filaria, schistosomasis, and other water-relayed dideases that may result from the implementation of the project1 but omitted to mension theneed to prepare a detailedEA within a fixedtimeframe. Borrower's P ~ IClea- 6. In India, meanwhile, a similarevolutionaryprocesswas underway with respectto environ- mental management Several nationalcommitteeshad analyzedaspectsof India's deterioratingezo- logy, particularly adverse impacts on forestcover and made recommendationsfor mitigation mea- sures. These culminated,among other things, in the establishment of a Department of Environ- ment and Forests (DOEF) in the Central Government and the issuing of the Forest Conservation Act in 1980. Under this Act, clearance from the DOEF became mandatory for all development projects. The Ministry of Irrigation also published in 1980 Guidelines for the Preparation of Detailed Project Reports of Irrigation and MultipurposeProjects which contained guidelinesfor environmental analysis. However, it was not until 1985that the growing public environmental awarenessand concern resultedin forceN action at theCenter; in January 1985,a new Ministry of Environment and Forests (MOEF) was established, and the Prime Minister assumed the portfolio. Among its responsibilities,the new ministry was charged with environmentalclearance of selected developmentprojects. In 1986, the Governmentof India passed the Environmental (Protection) Act, 1986, empowering the Central Government to take necessary measures for protecting the quality of theenvironment and requiring environmentalclearancefor all developmentprojects. 7. Prior to project approval by the Bank's Board in 1985,a number of environmentalstudies were prepared by the Borrower to access the environmental impacts and obtain the internal required forest clearance for theDam and PowerProject. However, theforest clearancewas not 1 Gujarat h j e c t Agrcemcnf Section 2.16 of May 10. 1985. AIlIwa Page 3of 22 given and more studies were to be prepared. Nevertheless, the two Nannada projects were approved by the Bank's Board in March 1985and became effectiveon January 6,1986 without a formal forest clearancefrom theMOEF. Finally, a conditionalenvironmentalclearance was given in of June 24, 1987 subject to the completion of several environmental studies relating to: (i) rehabilitation master plan, (ii) phased area catchment treatment scheme, (iii) compensatory afforestation plan, (iv) command area development, (v) survey of flora and fauna, (vi) carrying capacity of surrounding areas, (vi) seismicity, and (vii) health aspects. The letter noted that existing surveys were incomplete and full details would have to be submitted by 1989as per an agreed schedule. It also indicated that the Niumada Conml Authority (NCA) "willensure that environmentalsafeguard measuresare planned and implementedpari pasu with progress of work on projects." Finally, theletter made it clearthat the release of forest landsfor theproject would be subjectto the Forest Conservation Act of 1980and to prior approvalby the MOEF. 8. Subsequently,on September8, 1987the MOEF gave the requisite forest clearancewhich applied mostly to the submergence of forest land by the Sardar Sarovar dam under the Dam and Power project. Finally, in October 1988, the Government of India Planning Commission also gave its formal endorsement to the project, again subject to several conditions relating to environmentaswell as R&R 9. TheBank's appraisalreport and legal agreementsalso dealtwith environmental aspects of the Water..Defiveryand Drainage project in the following ways: the SAR and Supplementary Volumes contained a summary discussion of the project's environmental impact focussing particularly on: (a)longtermeffectsof potentialgroundwaterrise;(b) longterm self-accumulation in the root-zone; (c) proliferationof aquatic weeds in canalsand project area; (d) proliferation of water-borne diseases; (e) effect of fertilizer, pesticides and insecticides on surface and groundwater; (f) afforestationprogram in the command area; and (g) other effects on wildlife. (SAR p. 18and SupplementaryVolume I,Annex 1,pages 55to 56). TheSAR also gives a list of studies to be carried out by the NPG as part of the environmental work plan to be prepared by December 1985. Theseinclude, inter alia,the preparation of a detailed environmentalassessment and necessary actionsfor protectivemeasures forthe commandarea (SARp.18 and Table 1p.82). 10. The Legal Documentscontainedthefollowingenvironmentalcovenants: a P.V Rojezt Description, Schedule 2, Part B called for the implementation of a suitable training program for staff in environmentalsciencesand mitigationmeasm; & b. Section2.02 (d)called 1985,and Section 2.16 required Gujarat to take all measures to minimize risk of malaria, filaria, schistosomiasisand otherwater-related diseases. However, there was no specificcovenantson the preparation of an EnvironmentalImpact Assessment and implementationof mitigatingmeasures forthe command area despitethe factthat the need for such studieshad been coveredin the SAR. Project Implementation 11. The project was regularly supervised at six-monthly intervals by Bank missions from inception to Credit closure. From 1985 to 1987, the Bank put pressure on GO1 to give environmentalclearanceso that construction works could start. The clearance came on June24, 1987. The fxst Bank review of the environment componentwas made in October 1988and, as the project was not performing well on several fronts, the Bank and the Borrower signed a Memorandum of Understanding in December 1988 which stated that: (i) a comprehensive environmental frameworkand its subsequentinstitutionalizationin the concerned statesshould be prepared, (ii) studies on fisheries, forest,wildlife and health should be initiated or completed,(iii) JixUEzL Page 4 of 22 appoint an EnvironmentalDirector at the newly created SSNNL, (iv) an Environment Cell should be created in the DOEF to monitor the activities of SSP, and (v) an expatriate environmental consultant should be recruited to assist the Environmental Cell in preparing the environmental framework stipulated in the legal documents. However,the meeting also agreed that in view of the creationof the Environmental Cellit would not be necessary to engage an environmentalspecialist in NCA. It should be noted that none of these studieswere directly related to the command area 12. The Bank commissioned in 1987an overview of the environmentalaspects of the project. Release of this report was delayed to 1989. It made a number of recommendations, in particular that theBank shouldintensifyits supervisionand enter into supplementalagreementsto strengthen the environmentalaspects of the project. The report stressed the need to defrne better the usable groundwaterresources, determinetherechargequantitiesand develop techniques to control water table levels successfully in order to mitigate the impact of surface water irrigation and reduce the effectsof water-logging. The policies for conjunctiveusewould also need to be sharpened. 13. On March 31,1989 the CreditClosingDatewas extended by three months and then by one year to July 1, 1990subjectto conditionsrelating to the release of land for R&R in Maharashtra, R&R policies to be in line with the NWDT award and otherconditionsrelating to rotational water supply. An EnvironmentalReviewcanied outin April 1989indicated that thespecified time-based environmental framework was yet to start and its absence was hampering the monitoring of environmentalstudies. It recommended in an action letter to DEA and MOWR that a consultantbe recruited as per agreed TOR forpreparing the environmentalwork plan. It alsorecommended that the plan should be completed before institutionalizingtheenvironmentalcomponentswithin NCA, DOEF and the three states. The mission recognized that some progress had been made on the studieson fsheries, compensatory affostation and archeology,but none on health. 14. Anotherenvironmentalreview mission took place in December 1989. It observed that the environmentalwork plan that was originaUy duein December 1985wasstillnot started and that the staffing of NCA and SSNNLenvironmentalcells was still inadequate. It urged the Borrower to approach USAID to assistin thepreparation of the work plan and made severalsuggestionson the studies relating to: (i) compensatory afforestation which should include habitat and linkageswith natural m e s , (ii)catchmentareatreatment, (iii)wildlife in the submergencearea, (iv) upstream and downstream fisheries, and (v) archeological aspects. Again, no reference was made to command area The action letter to MOWR of December 13,1989 which stipulatedthe conditions for a second one-year extension of the Credit beyond July 1,1990 emphasized the R&R aspects that should be met, such as the release of land in Maharashtra for R&R, but made no reference to the pending preparation of theenvironmentalwork plan. 15. The May 1990 environmental supervision report indicated that the preparation of the environmental work plan had made no progress. However, the Annex on Status of Compliance with Covenantsindicatedthat the covenantrelating to the work plan was in full compliance. The report also indicated that the position of Member Environment in NCA was still not filled. The supervision mission determinedthat the conditionsrelating to R&R had been met and particularly that 2,700 ha of forest at Taloda had been released for theresettlementof ousteesin Maharashtra; as a result, theproject wasextended for an other year to July 1991. 16. In June 1991 the environmental supervision mission paid particular attention to the progress made on compensatory afforestation, catchment area treatment, wildlife, fisheries, archeology, health, training and NCA. It indicated that environmentaltraining was yet to start in spite of the recommendationsof a mission on R&R and environmentaltraining. It also observed that the Environment Member of NCA had been posted recently, but that this organizationhad no clear program and was not effective in coordinating and integrating environmental studies. The June 8,1991 action letteremphasized the need to prepare and implementan environmental training program. At that time, the Narmada Basin Development project was under discussion with the three implementingstates. Its objectivewas to carry outenvironmentalprotection measures around AhmdL Page 5 of 22 the SardarSarovarand Nannada Sagar dams and to improve the livingconditionsof the tribal and rural people living in those areas. 17. In July 1991,the projectwas extended for a third and last year on the basis of theprogress made in the civil works component and also in the implementationof the R&R component of the Dam and Powerproject The January 1992supervisionmission, which included for the first time a malaria specialist, observed that there was no specific anti-malariaprogram for the project and that the incidence of malaria had increased in the villages surrounding the dam constructionsite. He also stressed that the Public Health Servicewas not geared to meet the special needs of the project and that a Heath Cell should be established in SSNNL. 18. During the period that preceded the closureof the project and as a result of the commis- sioning of an Independent Review of the SSP project, the Bank recruited an Environmental Specialist to assist SSNNL in preparing an environmental impact assessment (EIA) for the command area in view of a possible Phase I1 of the Water Delivery and Drainage project. The consultant then published a EnvironmentalInformationVolume which listed and summarized the large number of existing or ongoing studies and proposed a work program for the preparation of the command areaEIA. Thiseffort and the presence of the Independent Review Team helped in focussingthe Borrower's attentionon theenvironmentalaspectsof the project. 19. The last supervision mission conducted in August 1992,immediatelyafter theclosure of the project on July 2, 1992determined that neither the environmentalwork plan nor the malaria controlaction plan requested by the previousmission had still not been formulated. Independent Review Report 20. The IndependentReview Team began itsfield work in September 1991and published and circulatedits finalreport in June 1992. It contains seven chapters dealingwith environment. The report includesan analysisof the legal background and statusof compliance. It observesthat by the end of 1988, all required apements had been reached between the GOI, .the States, the implementing agenciesand the Bank to ensurethat an adequate assessment of the environmental impactof the SardarSarovarProjectswould bemade by 1989. However,it notes that by the time of the review, most of the Bank's 1985legal requirements and most of the conditionsattached to the DOEFenvironmental clearance had not been met and concludes that, by any standards, this ought to be unacceptable. The report alsocriticksthe "paripasu" approach which subverts any acceptable notion of ecological planning and defeats the purpose of preparing environmental assessments to anticipate and prevent impacts and incorporate remedial measures into project design. 21. After giving some background information on the project design,the report analyzes in more detail the major environmentalaspects of the project including soil irrigability,water-logging, salinity, drainage and conjunctive use. It notes that several good studieshave been prepared by consultants working on the fust reach of the main canal up to the Mahi River, but pre-feasibility studiesbeyond the Mahi indicate that serioussoil and water-logging problems will be encountered in the coastal Bhal areas, in the north Gujarat areas as well as along the Saurashtra and Kutch branches. In those areas,canal irrigationislikely to result in serioussoil degradation particularly in the agro-climaticregions where deep black cotton and salinesoils prevail. It noted that water- logging,salinityand drainageproblems had not yet been addt.essedthrough adequate drainageand groundwaterstudies as evidenced by the Bank's own supervision mission reports. It also states that though conjunctive use is proposed to be one of the most important mitigative measures to counteract water-logging in the command area, the detailed information needed relating to water quality, mixing regimes and private sector pumping was not yet available. It concludesthat some good work has been done on specific topics in the fust part of the command area, but it does not meet the requirements of a good environmental assessment and in the end, this project is likely to perpetratethe deficienciesnoted in past projects. - Page 6 of 22 22. On health aspects, the report states that by the time of the project appraisal the dangers of water-borne diseases in irrigation projects were well known and documented particularly those related to malaria and schistosomiasis. The report quotes a status report on malaria and other health-related aspects prepared by the Bank's consultant in January 1992 which states that the project has been planned, designed and executed without incorporation of health safeguardsand that thelevels of malaria in villagesnear the dam sitewere nearly doublethose of theother villages served by the health center in that rn The report concludesthat the Bank and the state govem- ments had failed to addressadequatelythe issue of public health. Management Response 23. In July 1992theBank mounted a large mission to: (i) review the status of implementation of the project and compliancewith theBank's Legal Agreementsin thelight of the findings of the Independent Review, and (ii) prepare a final field report for the Water Delivery and Drainage Project which had closed on July 1,1992. The mission reported that the Borrower had completed 22 studiesprior to &. MOEFenvironmentalclearancein 1987.11 had been completed since then and 15 were underway or proposed. The mission concluded that there had been no severe environmental consequences to date because of study delays. Nevertheless, the mission recommended that a detailEnvironmental ManagementPlan be produced as soon as possible. This plan should include a synopsis of all the studies completed to date, underway or planned, and details of future work needed in the estuary and on health issues. It noted that the SSNNL was embarking on an EIA for the command area according to latest Bank guidelines in view of a possible Phase 11Canalproject. Themission reviewed and commented extensively on the TOR of theEIA. 24. On health aspects, the mission noted that the Government of Gujarat had accepted the findings of the January 1992mission concerningthe expansion in and around the dam construction site, therisk of cerebralmalaria and the inadequacyof theprimary healthcare services. The recom- mendations of the mission included the setting up of a Health Planning and Monitoring Cell in SSNNL, preparation of an environmental health management plan, and establishmentof an anti- malaria Unit at the dam site(Kevadia)to be followed by othersin the command arealater. 25. Following the July mission, the Bank sent an action letter on August 10, 1992 which requested the Borrower to submit a schedulefor producing an Environmental Management Plan within the next six months and a plan to addressthe health issues. The lettercontained a detailed draft action program on the R&R aspectsof the project.. The Borrower's Response 26. Following theBank's mission and letter, the Borrower in their letter of September 1,1992 assured the Bank that GO1 would address with urgency the positive concerns raised by the IndependentReview and Bank missions and that management and organizational weaknesses in the R&R program would be removed. The attachmentto the letter indicated that a comprehensive environmental action plan including such activities as catchment area treatment, compensatory afforestation, command area development, health plan, fisheries, flora and fauna, and archaeological studies, on which action has already been initiated, has been prepared and is presently under review by NCA. Also attached to the letter was a bar chart showing a list of . environmental studies completed, ongoing and proposed. The preparation of an EIA for the command area was not mentioned AnmaL Page 7 of 22 Board Benchmarks 27. A formal report entitled "Review of Current Status and Next Steps" was then prepared and submitted to the.Board on October 20, 1992. The report gave a detailed descriptionof the R&R and environmentalissues identifed by the Independent Review and Bank missions and indicated the most recent steps taken by the Borrower to remedy the situation. The guiding principle of the Management's response was to seekwith the Borrower constructivesolutionsto the issues raised in view of its belief that, even after full allowance is ma& for the costs of the R&R and relevant environmental mitigating measures, the SSP projects remain economically sound and developmentally important. The Management's position also recognized that the benefits of the SSP projects must not be achieved at the cost of reductions in the standard of living of affected persons. Theenvironmentalcosts and risks- particularly those related to health, loss of fisheries and possibility of waterlogging and salinity in the command area - had to be handled through an appropriatecombinationof studiesand the creationof capacity within the project to take timely ameliorativeaction. 28. In the section on Next Steps,the Management presented to the Board three options: a. a formal or informal su'spension of disbursements pending completion of (and where necessary, enhancement to) stepsi&ntit3ed in the Borrower's response; b. reappraisal of theR&R and environmental aspectsof the SSPprojects asa basis for follow-up projects to support: (i) R&R of those displaced by the reservoir; (ii) sustainable command area development; and (iii) implementation of an agreed basin-wideEnvironmental Management Plan; and c. continuation of the support for the project on the basis of responses received from the Borrower, and subjectto the confinnation of continued improvementsover the next sixmonths, to be monitored againstactionsalready agreed and benchmarks for assessingprogressin implementation. 29. The Management stated its preference for the third option which built upon the results achieved and maximized the prospects forsuccessful implementation of thestepsnoted in the Bor- rower's response, which arescheduledtobe completed in the next few months. The Management nevertheless recognized the riskof these stepsnot being taken in a timely or effectivemanner and proposed that, in that event, remedial action be taken through suspension of disbursements. Should financial or skill gaps emergewhich prevent timely action,the Bank would be prepared to consider supplementarysupport. 30. The Board met on October 23, 1992 to discuss the Review of Current Status and Next Steps prepared by the Bank staff. The Executive Directors agreed with the analysis of the IndependentReview which had identified a number of deficienciesin the Bank's appraisaland the Borrower's implementation of the projects. Many Directorshad concernsabout obstacleswhich still had to be overcome. They emphasized the need for full consultation with the affected people, the importanceof satisfactoryR&R programs in all t k statesand theimportanceof atimely and comprehensiveanalysis of environmentalaspects. The Board a g d to the Management's third option to continuesupportto the projects because they wished to work with the new Government of India which had recently made considerable efforts to address the projects' problems and because it was the best availableoption. 31. The Board determined a number of benchmarks that the Borrowerwould have to meet by March 31,1993. ThoughtheWaterDeliveryandDrainageproject was closedsinceJuly 1992,the Board fixed three benchmarksrelating to this project JiiMQ& Page 8 of 22 a. Completion of a prioritized environmental overview report for the Sardar Sarovar Projects; b. Satisfactoryprogress in completing an Environmental Impact Assessment for the Gujaratcommand area;and c. Adequate implementationof Gujarat's malaria control program at the SSPproject sitein linewith the specificrecommendationsof the July 1992Bank mission. 32. The Board requested that a specialreview mission should visit India during April 1993to assess progress in the implementation of the agreed action plan. Continuation of the Bank's supportafter April 1993would depend on meeting the agreed benchmarksfor assessingprogress. During the Board meeting, the UK Executive Director proposed that the OverseasDevelopment Agency (ODA)could assist the Borrowerin meeting the benchmarks. Subsequently,aTrust Fund of E 1.0million was depositedwith theBank for that purpose. Borrower's Actions and Present Status 33. Beginning November 1992, a Bank mission headed by the Director, India Department visited the heads of all agenciesconcerned in India todiscussthe benchmarks and agree on a work program for meeting these by end-March 1993. Thismission was followed by action lettersdated November 9, 1992to MOWR, NCA, and the threestatesconcerned which containeda detailed list of time-bound actionsthat each implementingagency was to carry out 34. TheBank thereafterprepad detailed TOR and recruited in December 1992two consulting f m s to assistthe implementingagenciesin meeting the benchmark.^: . . a. E m ptaResourceswasrequestedtoassistNCAinpreparing: (i) the Environmental Overview Prioritized Action Plan of the Sardar Sarovar Projects, and (ii) theTOR for the Formulation of a Narmada River basin Environ- mental ManagementPlan. b. Consultantswere requested to assist NCA and SSNNL in preparing: (i) Sardar SarovarProjectsCommand Area Environmental ImpactAssessment,(ii) Environ- mental Changes Downstream of Sardar Sarovar Dam, (iii) Sediment and Back Water Aspects of SardarSarovarProject,and (iv)Notes on SardarSarovarProject Hydrology. 35. The two consultantf m s worked in India fromJanuaryto March 1993in associationwith the Borrower's implementing agencies. In spite of the magnitude of the task, the two f m s were able to submit their reports by end-February and mid- March 1993. However, the Borrower realizing that it would be difficultto meet all the benchmarksand particularly those relatingto R&R by March 31, 1993, requested the Bank by letter of March 29, 1993 to cancel the remaining portion of the Loanfor the Dam and Power project, thus putting an end to the Bank's assistanceto the SardarSarovarprojects. 36. TheBorrower's compliance with theenvironmentalbenchmarks was submittedto the Bank in NCA's letter of August 5,1993 to which was attached the following reports: a. Evolution of Institutional Arrangements for R&R, Environmental Safeguardsand the World BankInvolvement; b. Environmental Overview and Prioritized Action Plan prepared by NCA with the assistanceof ERL, c. EnvironmentalChangesDownstream of SardarSarovarprepared by consultants; AnmxL Page 9 of 22 d. SardarSarovarProject Command Area EnvironmentalImpact Assessment,Interim Report in three volumes prepared by NCA, GOG with the assistance of consultants. 37. Beginning in August 1993, NCA, SSNNL, the Bank and the consultants discussed the additionalstudies quired to completethe EIA. These concern the establishmentof an integrated groundwatermodel of the command area to: (i) identify the extent, severityand location of water logging, (ii)secondarysalinization, (iii)estimate the qualityand quantity of groundwateravailable for irrigation,and (iv) investigatethe feasibility of controllingthe water table through conjunctive use. In addition, two separate studies would be carried out concerning: (a) an estimate of the quality andquantity of agriculturaldrainage water, and (b) the EM forthe down-streamriver and estuary reach taking intoconsiderationrevised estimatesof river flows and otherparameters. As a result, NCA requested and the Bank agreed to extend the consultants' contract forthe completion of the command area EIA from March 1994to December 1994. 38. Thefmdings of the EnvironmentalOverview by ERLand Interim EIA by the consultants ate summarized in the chapteron MajorImpacts and mitigating measuresbelow. Bank Performance 39. At appraisal the Bank's procedures for environmental clearance were not as rigorous as they arenow. Additionally, the project was approved without a formalenvironmentclearancefrom the Borrower. The SAR mentioned the need for preparing an Environmental Impact Assessment for the command area and for measures to minimize risk of malaria, filaria, schistosomiasisand other water-related diseases. A covenant relating to the health aspects was included in the Water Delivery and Drainage Credit Agreement, but the covenant relating to the preparation of an environmentalwork plan was included onlyin the Dam and Power Project Agreements. Thelack of clarity in these Legal Documentswith regard to meaning and contentof the environmentalwork plan actuallyweaLened the efficacyof this importantcovenant 40. Throughout project implementation, Bank supervision missions paid attention to the impacts of the project on the upsueam, downstream and command areas. With regard to the command area, the engineers supervising the project, in agreement with the Borrower, were confidentthat environmentalconcernshad been taken into acc~untadequately through existingsoil surveys,groundwaterand drainagestudies. Though these studiesconstitutedthe basis for anEIA, the actual EIA and Environmental Management Plan on mitigating measures were not clearly formulatedor included in the project design. It isonly when the IndependentReview was at work and later presented their report, that the Bank realized that a thorough EIA would be required if a second Phase Canal project was to be considered. The Bank then recruited a consultantto review the existing studiesand propose a work plan forthe EIA. 41. Similarly,Bank supervisionmissions did not pay enough attentionto the health aspectsof the project and relied too heavily on the Boxrower's assessment. It is onlyto-wards the end of the project when theIndependentReview team was at work thatthe Bankrecruited a malaria specialist to assessthe situation. Borrower Performance 42. Becausethe project envimnmentalstudieswere not complete, the MOEFagreed to provide a conditional environmental clearance on June 24, 1987 according to which the preparation of environmentalstudies and implementationof mitigating measures would be carried out pari pasu with project implementation. A project of thls magnitude doesnot require that all possibleimpacts be assessed in detail, particularly for those areas which are to be implemented over 20 years. However,with modem simulation and remote sensing technologiesit is possible and necessary to study at least the most critical impacts so that the project design can accommodatethe most likely &4xlw& Page 10of 22 impacts. The Borrower's performance on this point has been weak even though some groundwater simulation models and drainagestudieswere prepared for the Phase I of the project. The Borrower had difficultiesthroughout project implementation in integratingthe various studies intoone comprehensiveEIA It claimed on several occasions that theimpactswould be monitored closelyduringimplementationand remedial action would be taken as and when necessary. As the Inkpendent Review suggested, this procedureis not compatible with sound planning and can only lead to expensivecrisismanagement. For example, one should not wait for the groundwatertable to xise to unacceptablelevels before constructing drains or digging wellsfor conjunctive use aswas done in the case of the adjoining Mahi command. It would be preferable and less expensive to d e t e h as part of a comprehensiveEIA where the criticalareas were and from the start design theirrigation systemsforconjunctiveuse. Lessons Learned 43. The major issues that plagued the implementation of the EnvironmentalAssessment were the absence of specific detailed covenants on environment and the lack of necessary GO1 clearancesof the projectprior to Board approval. Thoughthe environmental guidelinesin India, as well as in the Bank, were becoming more stringent, the Borrower and the Bank failed to give appropriateattention to tbe impactof irrigationover a grosscommand area of about 3.5 million ha and to incorporate corresponding mitigating measures in the project &sign. The Borrower's attitude can be explained by the lack of experience in preparing environmental assessments and management plans for such a large project. However, theBank should have paid moE attention to the command area by: (i) using environmentalspecialistsfamiliar with large scale irrigation and drainageprojects during supervision,and (ii)taking remedialactionssuch as.theamendmentof the Legal Agreementsto addressdeficientcovenantson environment. 44. Thestrictadherenceto themore recent OD4.01 on Environmental Assessment willensure that situationsthat occurred under the SSPwill not be repeated. But, supervision by a qualified environmental speaahst is a prerequisite for the successful implementationof the environmental components of large scale irrigation and drainage projects. The Bank belatedly recognizd this necessity by using the services of consultants who are now assisting the Borrower in completing the command area EIA by December 1994. Once the EIA is completed, the Borrower will then have to operationalizeand integratemitigating measuresin the project design. 45. During the preparation of this PCR,different views have emerged on whether it would have been appropriateto carryout a detailedEnvironmentalAssessment at the time of appraisal or whether the "pari pasu" approach indicated in the MOEF clearance was not a more realistic approach. The supportersof thefirst option arguedthat with modem technologiessuch as remote sensingand mathematicalmodelling it was possible to gain a relatively accurateidea of the impact on environment and therefore to include in the project's detailed designs remedial measures to prevent any environmentaldamage. The proponentsof the second option doubted the accuracy of such forecasting and indicated that the impacts would develop slowly, would be better detected through a good monitoring system and could be mitigated before any damage occurred to the environment. The lattersaid that the impacts of groundwaterrising and salinity would not be felt for many years. It is the view of the PCR that, to the extent possible, all impacts should be assessed ahead of time even if they may talte many years to develop and in cases where exact magnitudes of impactare uncertain, furtherstudiescan adjustthe estimateslater. In particular, the PCR believes it would have been safe to includeat the design stage a certain volume of water for pollution control downstream of thedam. It is alwayseasierto return part of the water allocations setasideratherthan takeawaysomeamountswhich may have alreadyfound someotheruse. Page 11of 22 MAJOR IMPACTS AND MITIGATING MEASURES Introduction 46. The following section summarizes the findings of the Environmental Overview prepared byERL and the Interim EIA by the consultants. 47. The project will provide irrigation water and domestic and industrial water supplies for millions of people in a drought-prone m a of Gujarat and generate a large quantity of renewable power and energy. In addition to these environmental benefits, the impoundment of the Narmada River and the diversion of water will also have other environmental impacts. The following key areas need to be addressed to assess these impacts and plan the project's environmental management: a. -effectofagriculturalintensificationon project area; b. Water-impactondomestic,municipalandindustrialwatersupply; c. Public-impactonhealthduetomalariaandwater-bornediseases; d. n--ground impact on surface and water quality within the command area; e. Use impacton heath and waterquality; - . . f. Waterlogeine possiblechangesinthegroundwaterregimeandthe -- saltbalance; g. Natural-impactsonriverandcaphuefisheries; h. Forest --Impacton forestedand protected areas; i, --- impact on natural feservesand endangered specie.; and j- -- impacton importantcultural and ~ligioussites and buildings. Agriculture 48. The project will raise the cropping intensityfrom 105%to 128%and the irrigationintensity from 20% to 85% as per the PFP and 106% as per the SAR. Agricultural intensification is expected to have an overall positive impact by .greatlyreducing the effects of drought on the command area ecology. The enhanced agricultural production will generate employment opportunities for almost 600,000 persons thus reducing the encroachment on sensitive and critical areas. Larger quantities of fodder derived from crop residues will reduce over-grazing. The plantations of trees along canals, roads and farms will improve to a large extent the permanent vegetative cover and reduce wind erosion, while the construction of a drainage system will reduce to some extent sheet and gully erosion during heavy monsoon downpours. There will be also some negative impacts on water quality, soils and other aspects which will need to be mitigated as described in the followingparagraphs. Water Supply 49. The water conveyed by project works will supplement and safeguard the supply of drinking water to 135 urban centers and 8,215 villages, including all the 100 urban centers and lblmaL Page 12of 22 5,825 villages in Kutch and Saurashtra The total annual demand is estimated (on the basis of 2021 population projections)at 1.3 billion cubic meters (bcm). M a l l in Kutch and Saurashtrain particular is extremely unreliable. Thereiseffectively ..50. no rainfall outside the June-Septembermonsoon period and there are no perennial rivers. Water supplies are drawn from tanks and open wells. Only over limited mas in Kutch is supply from tubewells feasible. In many cases the water is of poor quality and the variability of the rainfall results in drought conditions every third or fourth year when many of the supplies fail. In the recent three-yeardroughtof 198485to 1986187water had to be imported by tanker,suppliesin the cities of Jamnagar and Rajkot were available only on alternate days; and, in the case of Rajkot, over a period of 60 days; water was brought by rail from Gandhinagar. Over Gujarat as a whole, more than 15,000villages suffered shortages. 51. Under the project, water willbe delivered to offtake along the canal network, and supply from these points will be the responsibility of the Gujarat Water Supply and Sewerage Board (GWSSB). From the offtake, the water will be pumped through piped main supply networks to town and villageservice reservoirssupplying the local distributionsystems. The plan is to cover all urban centers and villages by 2015. The canal system is also designed to provide water of about 0.25 bcm annuallyto anumber of industrialusers. Ofthis, 70%is allocated to fiveGujarat Industrial Development Corporation (GIDC) estates to be developed in the western parts of the State. A feasibilitystudy is now underway as a prelude to initiatingthe design of the water supply system. Thisstudywillalso coverimprovementsin the sewerage system. 52. The supply of water will be of considerable benefit to the populations of Kutch and Saurashtra and the general quality of life, including health, will be enhanced. Recent figures quoted from the 1991 All India Census show a marked decline in population growth rates compared with the previous decade, indicating substantial out-migration from the region. The improved quality of life, together with theemploymentopportunitiesoffered by the GIDC estates, may help to stem this. Women, in particular, arelikely to benefit from the provision of convenient and reliablesuppliesof water for domestic use. Public Health General 53. Improved access to domestic water supplieshas the potential to yl%ldsubstantial public health benefits. However, there arealsohealth riskssincewithoutproper controlthe transport and storageof water can lead to inawes in the incidence of water-related diseases. Plans are needed to controldiseasevectors and to provide health facilities for migrant constructionworkers and the resettled population. 54. Health services in India are defined by the National Health Policy (NHP) and national diseaseprograms such asthe National MalariaEradicationProgram (NMEP).TheNHPentitlesall Indians to accessto medical facilities,the numberand distributionof which aredetermined by local population density. The NMEP was developed as a nationwide strategy to combat the spread of malaria. The three state governmentswill integrate development of new facilitiesfor the project with proposals alreadymade under the NHP and NMEP. 55. In addition to the general obligations of the states under national policy, a specific requirementfor the projectcontainedin the'Ministryof Environmentand Forests' Environmental Clearance Order (1987)was that health facilitiesshould be provided for workers and residents of the affected areas. The Credit Agreement also stipulated that each state should take measuresto minimize the risk of malaria, fdaria, schistosomiasisand other diseases. AillwaL Page 13of 22 56. There are four main sources of potential health impact associated with the water delivery system. m,pools of standing water formed during construction and operation of the canals may provide breeding areasfor diseasevectors. u, the spread of irrigationmay exposemore people to water-borne diseases. Third.construction workers may bring with them diseases or parasites to which the permanent population has low immunity. Fourth,new cisterns and tanks built to receive the new water supplies will provide breeding sites unless properly designed. Diseasesassociatedwithwatera ~subdividedintoseveralgroupsassummarizedbelow: e a. -: Water supplies contaminated by feces from a human carrier of the infectiveorganism (typhoid,cholera, dysentery, giardia, diarrhoea); b. -: Infections caused by worms, flukes and trematodes. Feces from infectedhumanscontaining worm eggsentersecondaryhost through contaminated water. Larvae then invadehuman hosts. (schistosomiasis, guinea worm infection); c. m: Insectvectorsbreed in or around water and m m i t diseaseby biting infected human hosts, then feeding on unaffected humans. (malaria, sleeping sickness, onchocerciasis, viral diseases); and d. Fecal-oral transmission associated with poor hygiene, lack of washing. Incidence decreased by improved water availability (diarrhoea, ulcers, scabies, trachoma, fungalinfections). 57. The project is expected to yield ~ i g ~ c apublic health benefits since increased water n t availability will help to reduce the incidence of 'water-washed' and 'waterborne' diseaseswhich are associatedwith poor hygieneand restricted water supply. Managementof the potential health impacts of the project willfocus therefore on the exclusion andlor control of the diseasevectors which spread 'water-based' and 'water-related' diseases. Mitigating measures to control 'water- related' have been included in the design and implementation of the irrigation and drainage systems, in addition to the prophylactic measures taken by the Health Department. Borrow pits along the canal system and natural ponds where stagnant water is likely to accumulate will be drained as part of the drainageprogram. Openquarries and large excavation works will be either refilled with spoil earth, drained or converted into village tanks or fish ponds. A handbook on sanitary engineering is being prepared with the assistance of consultants and the Health Department, and willbe given to irrigationstaff and contractorsto reduce the impact of malaria and water-bonze diseases. Studies 58. A large number of studieshas been carriedout on the health profile of villages in the three affected states. Thekey studies summarizd below: a. Narmada Program - Schistmomiasis - Back-to-mce Report, 1986 describesthe schistosomiasis assessment carried out the National Institute of Communicable Diseases (NICD) and the World Health Organization (WHO).Thisconfirmed the incidence of schistowmiasis in Gimvi Village, Ratnagiri District, Maharashtra. This is the only location in India where the disease had been recorded; the report found that the Ratnagiri pocket is stable and that concerns expressed over the spread of schistosomiasis dueto the project are unfounded. b. Proceedings and Recommendations of the Meeting on Schistosomiasis Research and Surveillance 1985. In 1985, the NICD surveyed several Narmada villages in AilmxA Page 14of 22 Gujarat and Madhya Pradesh. Several thousand urine samples were tested for parasiteeggs with negativeresults. c. Disease Profile of CommandArea by the Commissariat of Health, Medical Services and Medical Edrrcation (SCHMS),1986. Thisstudy contained an analysis of the disease profile in the Command Area and formed the basis of the Gujarat work plan forenvironmentalhealth. d. Sardar Sarovar Narmada Project Studies on Ecology and Environment by MS University of Baroh, 1983. To understand the health profile of the Narmada River, MSU visited 42 sites from Hanf to the river mouth. Data were collected from public health centers and public health units to establish the rates of occurrence and distribution of disease over the previous five years. These data were used to produce an assessment of the likely health impacts upstream and downstream of the dam site. e. Studies on Water Related Diseases in the Command Area including the Area Downstreamof the Dam, this is an ongoing assessment of the health impact in the Command Area commissionedby SCHMS in December 1992. This assessment will includethecataloguing of existingfacilitiesin Gujarat, thecollectionof t i m e series data on diseases, the identification of problem areas and a summaryof recommendations for additional facilitiesrequhd. A report is expected by mid- 1993. Findings 59. The MS University of Baroda (MSU) study of 1983and other studiesconcluded that the most commondiseases in the Nannada Basin were malaria, scabies, dysenteryand diarrhoea. Of these diseases, only the threat of increased incidence of malaria was said to be of concern to the project authorities. Occurrenceof the other diseases is,in general, related to poor hygiene, poor sanitation and the lack of drinkingwater. Thestudyconcludedthat the incidenceof these hygiene- related diseaseswould be reduced by better water availability. 60. Severalother studieshave alsoidentified malaria and Japaneseencephalitisas the greatest potential health threats in the project affected areas, but have indicated that timely mitigation measureswould greatly reduce anyrisk. The SCHMSreport, for example,pointed out that some of the command area was already under irrigation and that the addition of new areas would not have a marked impact on malariaincidence. Thereport did recommend however that the incidence of malaria should be subject to surveillance and recommended that practical measures to be implementedwhere necessary to protect agricultural communities. A consensuswas reached that schistosomiasiswill not constitutea serioushealth issue. Thisview was put forward in the MCD report and confmed by the subsequentWorld BanWWHOmissions. 61. According to the MSU reportof 1983,fk isconfmed to thecoastal areasof Saurashtra and South Gujarat. Filaria has also been reported near the reservoir site, but the studyconcluded that the disease was unlikely to spread to the memoir area. 62. Ratesof malaria mmmision in Gujarat arehigh, frequently recording the greatestnumber of cases in India The principal vectors responsible for transmission are . . 'in urban areas and in rural areas. Annual parasite incidence rates can vary widely from year to year. Malaria is found in both urban and rural areas. High trans-mission rates are generally found in more densely populated (more heavily urbanized) areas, but some less' densely populated regions also have high transmission rates. There is a marked seasonality in transmission, incidence appearing to peak in MayIJune and remaining relatively high until end-October. The causeof the variation is unclear sincethe rise in incidencestartsbefore the rains begin in June. Comparison of rural and urban populationsin Kheda, the district with the greatest JiimxaL Page 15of 22 area under inigation, appears to indicate that the same influences determine transmission in both populations and that irrigation may thus have less influence on transmission in this region than previously believed. There is need for a more detailed study into the main causative factors. 63. The principal parasite species has in the past been Plasmodiumbut a general trend towards a greatly increased percentage of the more clinically acute form of malaria, has been evident recently, although therehas also been a change in the method of d- obvious differencebetween rural and urban areascan be seen 64. Malariamntrol isprovided through an establishedand activeNational MalariaEradication Program under the State Health Authoritia. Implementation is through the Primary Health Center network Success rates are monitored regularly and there is a national program of research continuouslyinvestigating and testing alternativestrategies. At present, control measurestaketwo forms: In the villages, spraying is done in every house twice a year with DDT, Malathion or benzene hexachloride. It is estimated that some 80%to 85%of village houses are covered in this way. In urban areas ( m o than 10,000inhabitants)control is by spraying potential b m x h g areas ~ once a week with a larvicidaloil. Potable water tanks are alsotreated. 65. A study of water-related diseases for the command area is currently being undertaken for the Nigam by the medicalcolleges in Baroda, Ahmedabad and Jamnagar. Objectives are to study the current situationwith regard to such diseases and to estimate the extent to which they are likely to present problems as the result of imgation development. The study will also make recommendations as to appropriate mitigatory measures, management plans and institutional arrangementsfor implementingthem. 66. To minimize creation of new water bodies, borrow material for canal construction will as far as possible be obtained from existing village tanks. In the majority of tanks,whether used for borrow or not, shallow waterconditionscan in futurebe prevented through connection to the canal system. Stocking with fish will be encouraged. Where borrow pits are opened ,they will be graded to allow drainage. Provisionof surfacedrainageis in fact an integral part of the project and will generallytend to reduce standingwater followingrain Water Quality 67. The water resourcesof the command area may be categorized as perennial rivers, seasonal rivers, village tanks,groundwater and the estuarine regions into which the rivers discharge. Perennial rivers traversing the command area itself are the Mahi and the Sabarmati, the flows of which are partially regulated by the Kedanaand Dharoi dams,respectively. In the case of the Mahi, at timesof low flow the whole of the dischargeis diverted at Wanakbori, some 15km upstream of the command area,to supply the Mahi Right Bank Command 68. The principal seasonal rivers,'in which flow after the winter season is negligible, are the Dhadar, Rupen, Saraswati and Banas. Within the Command area there are many village tanks and ponds that play an important role in the provision of water for domestic use and livestock. Groundwater is used for domestic and industrial water supply, and for irrigation. The command area is underlain by two aquifers, an upper phreatic aquifer and a lower confined aquifer. While the quality in the southern part of the command area is generally reasonable in both aquifers, salinity levels increase towards the northwest and towards the coast. 69. Information on water quality in the region is currently obtained through the monitoring programs carried out by the Gujarat Pollution Control Board (GPCB) and by the Gujarat Water Resources Development Corporation (GWRDC).The GPCB program is oriented mainly towards - Page 16of 22 pollution from industrial and urban effluents. Water quality is monitored regularly at stations on the Dhadhar, Mahi and Sabarmati rivers, as well as at a number of reservoirs and tanks. It is apparent that the Dhadharis polluted over much of its length, as are the lower reaches of the Mahi downstream of the Baro& area The Sabarmati is polluted downstream of Ahmedabad, although thecurrent enlargement of the sewage treatment worlcs there may offer some improvement in the futm. Industrial and urban effluentsare also discharged into the Narmada estuary. Groundwater ismonitored by GPCBonly when specificproblemsoccurorareanticipated. 70. The monitoring done by GWRDC is principally in respect of tubewell supplies for-potable use. Under theprogram, chemicalanalysesof samplestaken from some 220tubewells supplying water for domesticand municipal use throughout the command area are carried out at least once a year. The salinity of the water in both aquifersis generally in excess of 1,000 mg/l TDS; in the case of the confined aquifer salinity rises in some areasto more than 3,000 mg/lTDS; and in that of thephreatic aquifersalinity in excessof 30,000mg/l TDS have been measured. The saltsin the salinegroundwaterare dominated by sodiumchloride. 71. Water quality, particularlyin respectof rechargeand drainage abstractions, has also formed a component of a number of the mathematical model studies carried out to investigate the susceptibility of the command area to waterlogging followingimport of Narmada water. 72. The command area surface drainage system will serve the dual purposes of removing runoff from agricultural land, resulting either from precipitation, excessirrigation applicationsor operationalwastageh m thecanalsystem, and of lowering thewatertablein the phmitic aquifer to prevent waterlogging and salinity. 73. Since the command area is already extensively cultivated in the kharif season, the future qualityof drainagewater from agriculturalland is unlikely todiffer greatly from the present during that season. Salinity levels of runoff from surplus irrigation water, even where this is derived wholly or partly from groundwater, are unlikely to give rise to salinity levels much in excess of 1,500mg/l TDS. Salinity of subsurface drainage water could in such cases however be two or three times thisfigure. In thekharif season these concentrationswould be diluted by runoff from rainfall and will leach toa largeextent thesalts duetowinter and hot weather irrigation It has been suggested that release of N m a & water into rivers during the low flow period could be used to improvequality. 74. Discharges from surface drains which outfall to the lower reaches of the Sabarmatiand those rivers east of it are unlitely to affect significantly the naturally poor quality of the water. Some surface drainagewater may enter the Rann of Kutch which is also naturally salt-affected. However, the existing levels of salinity in the soil and in the water duringthe seasonal inundation are substantiallyhigher than those which would result from disposal of drainage water from the command a x a 75. The quality of the groundwater used for irrigation will generally not be as good as that of the water from the Narmada River (200 mg/l to 400mg/l TDS), and in some areas will require mixing to bring it to an acceptable level. To control use of poorer quality waters, it is planned to mix slightlysaline groundwaterwith canalwater and the project should providefor largerwater applications and adequate surface or sub-surface drainage to leach excess salts. As a result, aquiferswhere the water is of better qualityshould not beadverselyaffected. 76. The current water quality monitoring program needs to be extended. This will provide early warning of any changes in water quality as the project develops and provides data for calibratingmathematical models. The program would also providefor detection of pollution from agriculturalchemical residues. - Page 17 of 22 77. Further consideration needs to be given to the prediction of agricultural drainage water quantity and quality, and where appropriate,to means of disposal. The impact of recharge from irrigation on groundwater quality also needs further investigation. These studies could be integrated into those to be doneon drainagesalinityand waterlogging. 78. Having ascertained the likely quantity and quality of the drainage water which will be discharged to the Rann of Kutch, it will be necessary to investigatethe proposed disposal areas to confirm that there are unlikely to be any adverse effects and if necessary to devise mitigatory measures. Information on drainage water quality is required for a number of other ongoing studies,particularly thoserelated to flora and fauna and fisheries. Disposal of increafed quantities of domestic and industrial effluent resulting from provision of improved water supplies is to be studied in the forthcoming GWSSB water supply feasibility study. Agricultural Chemical Use General 79. Current monitoring programs ate either of insufficient scope or of too short duration to determine whether the increasing use of agricultural chemicals over recent years is reflected in water quality. Cotton, a crop requiring a fairly high input of pesticides, is grown in the command area, but therewill be only a modest inc- in the areaunderthis crop. Cereal and oilseed crops that will expand in area are not heavy users of pesticides or herbicides. Thus, the project is not likely to lead to a large increase in the use of chemical controls. Fertilizer use will increase but cultivation practices are such that Indian farmers rn thrifty and efficientin the use of fertilizers. Furthermore, good progress has been made by the extension services in recent years to train fanners to keep pesticides to a minimum especially on cotton and to minimize risk of accidents while handling. 80. A study will shortlybe doneby the Indian Agriculd Research Institute (IARI), Delhi, to determinep m n t and likely futurelevelsof agriculturalchemical use by farmersin thecommand area and to estimateexisting and f u w quality of runoff and infiltration to ground-water. The study willalso examineimpactsmitigatingmeasures, including the scopefor reductions in the use of chemicalfertilizersand pesticidesthrough useof bio-fertilkrs and integrated pest management programs. Soils, Drainage, Waterlogging and Salinity 81. Thesuitabilityof thesoilsin the command areafor higated agricultureis demonstratedby the fact that most of the land is already fanned and p m l s of land overmuch the area have been irrigated by groundwater for someyears. The more difficult soilsare theheavy claysin thecoastal areawhich have been for many years devoted toa singlelong-duration cotton crop. These willnot be irrigated but will be provided with surfacedrainageworks. 82. There are areas of salinesoilwithin the command area These areas are the result of tidal incursion or evaporation from depressions. Some salinity is also present in the more arid areas where there is insufficientrainfallto leach saltsresultingfrom natural weathering. Most cropscan however be grown without problems up to a salinity of 1,000mg/l TDS, and the majority of the crops proposed for the project -- rice, wheat, cotton, sorghum and maize -- can be grown satisfactorily up to salinity of 2,000mg/l TDS. In the course of the Command area Soil Survey, thousands of profdes have been obtained through pits and augers. Salinity measured in the soil profile are less than 1,000mgflTDS over 70% of the area, and only on 15%do they exceed the Ar.uwL Page 18of 22 2,000 mgA TDS level. A significantproportion of these saline areas are in fact to be excluded from the command area. Waterlogeing 83. The aquifer system underlying most of the command area,except for Regions 8.9 and a large part of Region 1,consistsof a layered complexof alluvial sandsand clays. Over much of the areathe alluvium ismore than 100m thick Broadly, the system may be considered ascomprising an upper phreatic aquifer overlying a lower confined aquifer, the clay separatingthe two aquifers becoming progressively less permeable towards the northwest. Yields of shallow wells in the phreatic alluvial aquifer are reported to range up to 15Ysecond and from tubewells tapping the confined aquifer, 30 Ysecond or more. Gross extraction for water supply and irrigation in the command area in 1991 is estimated by Gujarat Water Resource Development Corporation (GWRDC) to have totalled 2.1 bcm. Inigation planning for the project is based on an annual averagegroundwater availabilityof 3.3 bcm. 84. Areas of thecommand area where thewatertableriseswithin 5 m of the ground surfaceare rare and are found mainly in lower lying tractsadjacent to the sea and to the Rann of Kutch. In addition, some small areas of surface waterlogging are also found inland where heavy clay soils occur. These clay soils have restricted drainability and water ponds on the surface until it evaporates. 85. In the areaswith usable groundwaterthechancesof waterlogging areremote. In fact, in the absence of the project, the watertables would continue to decline and thereby create serious problems for domestic water supplyand irrigation aspresentlyoccurring in the northern part of the command area 86. A detailed soil survey isbeing canied out under the control of the National Bureau of Soil Survey and Land Use Planning. A Rapid Reconnaissance Survey (one pit/4000 ha; one auger hold1000 ha, mapping at one inch to eight miles) has been camed out over the whole area A Reconnaissance Survey (one pit/1000 ha, one auger hole4250 ha, mapping at one inch to four miles) has also been completed over much of area. An integrated review of the soilsstudiesis to be canied out. 87. The Gujarat Water Resources DevelopmentCorporation (GWRDC), under contract to the Nigam has established a total of 220 piezometers over the command area with roughly one piemmeter every 150squarekm.Theseate monitoredfourtimesa year. Water qualityanalysesare canried out for samplescollected each May. Results for Regions 1to 4 are available since 1984, and for the rest of the area since 1991. GWRDC have also installed a number of hydrometeorologicalstationsin the command areaand are proposing to installpiemmeternests to investigateverticalleakage through lesspermeablelayers. 88. GWRDC periodically prepares estimates of the available groundwater resource abstractions. Their 1991report estimates that total usable recoverable recharge ( that part of the recharge which can be abstracted from aquifers where the water is of a quality suitable for irrigation)will be about4 bcm. annually. 89. To examine further the impact of the project on the groundwaterregime of the area, four mathematical model studieshave been canied out. Although there are someinconsistencies with regard to input parameters, the models are considered to provide reasonable indications of areas potentiallyvulnerableto waterlogging and of the futurepumped drainage fequirement.The models show that at the expected levels of pumping, the riskof waterloggingis low. - Page 19of 22 90. Nigam plans to employ a groundwaterexpert to review the various groundwater studies carried out to date, and to advise on further studies necessary for development of operational strategies for pumped drainage and conjunctive use over the whole command area. A drainage expert will also be employed to review detailsof surface and subsurface drainage proposals. 91. The import of Narmada water to the command area will result in an increase in ground- water recharge. The volume of this additional recharge will depend on a number of factors includingcropping pattern, the quantityof water applied, the efficiency of the irrigation system,the effectiveness of surface drainage and the deep percolation characteristics of the irrigated soils. GWRDCestimatesthat 85%of the additionalrecharge, amountingto 2 bcm, will be available for extraction If theincreasein recharge is not matched by an increasein the quantity of water extracted, groundwater levels might rise, risking waterlogging and salinization of the soil. Modelling studies have identifled those areas most likely to be at risk and have indicated drainage pumping requirements. 92. Provided appropriate inigation managementmethods are used,and water levels carefully monitored so that potential problems are identified at an early stage and remedial measures taken promptly, there is no reason for waterloggingand salinity to present major problems. 93. Provision of surface drainage in areas of heavy soils will reduce the occurrence of pounding of rainfall,which oftencausesthefarmersto replant their crops. 94. Experience in the adjacent 212,000 hectare Mahi Right Bank Command is encouraging. With introductionof perennial irrigation in 1980,in the absenceof drainage, severewaterlogging developed. A drainage master plan covering 44,000 hectares was drawn up, and as the result of improved drainage and water control (thequantity of surface water supplied has been halved) the situation appears to have been remedied to a large extent. Depths of watertable over most of the command are reported to be between 1.5 m and 3 m, and in 1990a cropping intensity of 155% was achieved. 95. There is a needfor furthercompilationof hydmgeological data from the large numbersof private and public sector tubewells throughout the commanda~eato amplify details in respect of aquifer geometry, hydraulic properties and groundwater quality. The whole question of recharge, past and present, should be reviewed, particularly with regard to soilsof different infiltrationintake and apportionment of rechargetofresh,brackish and salinegroundwater zones. 96. An integrated model of the en& command areaalluvial aquifer, based on the most up-m date hydrologicalinformation, ascompiled above, needstobedevelopedincorporating the Mahi Right Bank Command, Fatehwadi Command and other existing irrigation commands within the overall extent of the project. The model should be used to investigate groundwater response to a range of probable recharge rates and variationsin irrigation efficiency. The models would have a modular structureso that particular regionscan be exmined in detail while fittinginto the overall physical and development framework. Such a model could then be used, both for drainage planning and design, and for planning temporary groundwater mining to deal with any periodic surfacewater shortagesin abnormallydry years. Natural Fisheries and Aquaculture 97. The aquatic environment may be categorized as perennial rivers, seasonal rivers, village tanks and the estuarine regions. Apart from the Nannada River at the command area's eastern AxlmxL Page 20 of 22 edge, only the Sabarmati and Mahi Rivers are perennial. With rainfall effectively occurring only during the monsoon season, river flows show marked seasonality, with even in the perennial rivers about 90%of the annual flow occurring between June and September. During the mon- soon, the remaining rivers carry flash floods, but during the rest of the year are generally dry. Storage dams have been constructed on the Sabarmati at Dharoi and on the Mahi at Kedana. Within the command area some4,000 hectares of village tanksand ponds have been established. The majority are less than 3 hectares in extent with depths of between 1 m and 3 m. The tidal range in the Gulfs of Cambay and Kutch is some 9 m, and there are extensiveareas of inundated land. Gujaratas a whole has about 360,000 hectares suitablefor coastal marine aquaculture. 98. There are at least 77 species of fish from 19 families in the larger rivers, of which 20 speciesare regularlycaught by commercialfishermen. However, littleinformation is available on their behavioralchamaxistics and interdependence.They willalready have been subjected to some environmentalchangesas the result of dam construction and theeffects of these changesneed to be determined. Inland fisheriesinclude catches and stocks from the brackish water estuarine areas where hilsacongregateat thestart of each monsoon season for their upstream spawningmigration, and which the freshwaterprawn has to enter to reproduce. Records of inland catchesare kept by the Department of Fisheries by district. The total catch from the 12districtsin 1991192amounted to 32,000 tons of which more than one-half is from Baruch. Virtually all of the Baruch catch is from the Narmada The fisheriesshowevery appearanceof being in a good state and over the last few years have been expanding. 99. Annual production in 1990/91 in the relevant districts of Gujarat totalled 660 tons. Productivity rates are low because of continuing water supply problems. There are 10 carp hatcheriesnow operationalwhich in 1992produced 560 million spawn. In addition,a number of pond owners have been stocking their ponds withjuvenile freshwaterprawn. 100. Proposals for development of fisheries in the command area have been put forward by GOPA Consultants. These included a village pond development program, construction of a pra- hatchery and a demonstration farm with a carp hatchery. 101. A study on fisheries was initiated by the Nigam in January 1993. The study covers both inland and marine fisheries and aims to assess the present situation, the likely impacts of the project, mitigating measures if required, management plan and possible plans for further development.The 12-monthstudyis being carried out by MS University of Baroda in association with the Central Inland Capture Fisheries Research Institute, Baroda, and Commissioner of Fisheries, Gujarat. 102. Surfacedrainage water from the commandarea willbe dischargedback intothe rivers from where it will flow down to the estuaries. This may enhance flows and benefit capture fisheries With a permanent water supply, extension services and hatcheries, productivity should rise significantly and annual yields of 4 tonha are attainable. Hatchery technologies for the Indian carp speciesare now well establishedand it isprobably desirableto encourage private investmentin the hatcheryfnursery businessin addition to existing government facilities. AlwLL Page 21of.22 103. The ongoing study appears adequate. It will however be necessary to ensure that the appropriate information on water qualityis supplied to the agency carrying out the study in a timely manner. Forest 104. Some canal alignments pass through forested areas in the command area. SSNNL estimatesthat the total area directly affected by canal alignments is unlikely to exceed 100ha and points out that the planned afforestationprogram far exceedsthis figure. Due to the limited ams of forest to be affected, no baseline studies have been produced. However, it is indicated that sufficient information is available on species and afforestation with the Forestry Department to carry out such a study and determinethe exact impact and remedial measures needed. SSNNLin conjunction with the Forestry Department should prepare a study of forest areas directly and indirectlyaffectedby the adventof irrigation. Thisstudyshouldbe based on a land-cover land-use map showing forest areas,canal alignmentsand command areas. Flora and Fauna 105. There are two designated wildlife reserves located within the command area: the Nal Sarovar Bird Sanctuary and the Velavadar Black Buck Sanctuary. The adjacent Little Rann of Kutch has been designated a Wild Ass Sanctuary, and the Great Ram the Kutch Desert Wildlife Sanctuary. The Nal Sarovar Sanctuary is a depression some 60km southwest of Ahmedabad, which duringthe monsoon fills to fom a freshwater lake covering an area of about 120sq km. In the dry season the lake shrinksto a number of small ponds. More than 120species of migratory birds are reported to visit the lake in the winter months. The Velvadar Sanctuary, about 30 km northwest of Bhavnagar, covers 18sq lan and is home for some4,000 black buck. 'IheWild Ass Sanctuaryin the Lide Rann of Kutch covers4,054sq km. In addition to wild ass, the sanctuary is reported to hold blue bull, black buck, chinkara and wolves. 'Ihe adjacentKutch Desert Wildlife Sanctuaryin the Great Rann also holds wild ass, but is particularly noted as having the b&g site (PachamIsland) of perhaps one-half of the world's population of theh t e r Flamingo. 106. The now rareGreat Indian Bustard is reported to inhabitthe plains of Kutch and Saurashtra outside the command area. It is reported that the compensatory afforestation in the Kutch has created a suitable habitat for this bird. During the winter months there is a wide diversity of bird life in the command area, e s p d y in irrigated fields (especially paddy rice)and other small water bodies. This typeof habitatwill be expanded by theproject. 107. Previous investigations relating to floristic and wildlife aspects of the Sardar Sarovar Project have largely concentrated on the reservoir submergence area. Four studies relating specificallyto the command area are now underway: a general study of the command area as a whole (which also includes floristic aspects of the sanctuaries), and detailed studies on the Nal Sarovar, Velvadar and Wild Ass Sanctuaries.Thegeneral study has been split on a regional basis between SardarPatel, Gujarat and SaurashtraUniversities, while the sanctuariesare being studied by expert groups coordinated by the Forestry Department. The studies are required to determine the baseline situation, possible impacts, mitigating measures if required, and plans for monitoring and management - Page 22 of 22 108. With theland in thecommand area alreadyextensively cultivated, the extension of irrigated agricultureis unlikely to require much land clearance. Thenon-monsoon regimen will be less arid, both directly on account of the increase in rabi and summer irrigation, and also as the result of drainage and retum flows. This is likely to be particularly attractive to birdlife, as will be the increasein tree density. 109. Canal and drain alignmentsmay restrict animal movements. Thisis relevant to the Wild Ass Sanctuary, wherethe Kutch Branch Canal crossesthe passage between the two Ranns, and to the Velavadar Sanctuary which will be traversed by canal systems served by the Vallabhipur Branch. Consideration might have to be given to provision of crossing points or to changing the alignment of canals and drains where feasible. Pollution of agricultural runoff and drainage by fertilizers and pesticides is unlikely to increase, but this is the subject of a separate study. Also requiring careful consideration in connection with Nal Sarovar is the proposal to link it to the irrigationsystem to allow it to be used as a storagepond. The ability to provide permanent water throughout theyear overa limited areacould however be beneficial to the reserve. 110. A detailedstudy needs to be madeof the existing runoff and drainagesystemsover theNal Sarovar catchment Monitoring of the quality of the water in and draining to the lake should be started as soon as possible to determine the baseline situationand also to detect possible impacts from adjacent ongoing irrigated and rainfed agriculture. The design of the proposed surface drainagenetwork in the region should also be talren to a level at which its impact on the pattern of drainageinto and out of Nal Sarovarcan be determinedand if necessary modified. Information on water quality from other studieswill need to be provided to the agencies and groups carrying out thevarious flora and faunastudies. Archaeology 111. Gujaratcontainsa variety of archaeologicalrelics and sites. The Archaeological Surveyof India, Baroda, lists over 80 centrally protected monuments within or adjacent to the Command area. More than 40 are situated in the town of Ahmedabad, and of the remainder, only 20 are reported to be located in the command. Of particular note is the Harappan site at Lotha180 km southwestof Ahmedabad which includesthe uniquefeatureof a brick-lined wharf. Dated between 2,200 and 1,700 BC, this was probably one of ancient India's important ports having trading links with Mesopotamia and Egypt Alsonoteworthy isthe eleventhcenturysun templeat Modhera adjacentto the north sideof themain canal 60km west of Gandhinagar. 112. The Nigam has requested the ArchaeologicalSurvey of India for information on protected sites in the command area, and these have been listed. Canal alignments are laid out to avoid interference with any of the monuments listed. A number of monuments listed have been excavated or are below ground (e-g., step wells) and it will be necessary to lay out the adjacent irrigation system so as to avoid damagingseepageor submergence. In addition, in monuments at risk,watertables should be monitored. This is particularly important in the case of Loktal. The command areadevelopmentstudiesand thework to be doneon drainage and groundwaterare both relevantin these respects. PROJECT COMPLETION REPORT INDIA NARMADA RIVER DEVELOPMENT WATER DELIVERY AND DRAINAGE PROJECT (Credit 1553-IN) RESETTLEMENT & REHABILITATION OF CANAL-AFFECTED FAMILIES Introduction 1. The objective of the Water Delivery & Drainage Pmject was to help the Governmentof Gujarat with the co~tructionof a firstphase of the SardatSarovarirrigation and drainagesystem (command area). In the firstphase, approximately263km of the460km main canal networkwill be completed. An estimated 71,757 people will be affected due to the acquisition of 21,031 ha from them.1 2. Thissectionaddressesthe Rehabilitation & Resettlement (R&R) of canal-affectedfamilies (CAF) in the state of Gujarat. The evolution of R&R policy and programs is examined through interactions between the Government of Gujarat (GOG), the Sardar Sarovar Narmada Nigam Limited (SSNNL)and the Bauk. Both theR&R policy background and implementationsections are organized from the perspectives of the Bank and the GOG, respectively. Following implementation issues, items still pending on the policy for CAFs are discussed. Finally, the lessonslearned from the SardarSarovarPtojectwith ~egardtoR&R arereviewed. 3. A separate section on R&R issues associated with the Sardar Sarovar Dam and Power Project are attached to the Dam and Power Project Loantcredit Completion Report and are not covered under this annex. Background 4. The total estimated number of people affected by the SSPcanal system is about 170,0002 and the area to be acquired will be about 73,910 ha (about 4% of the 1.87 million ha of the command area). However, this figure is likely to further increase when the land required for drains, roads, quarries and other such needs is taken into consideration3. Of the 30 Bank- financed free standing irrigationidrainage projects involving new construction (with overall total land take of 107,956 ha), the SSPhas the largest land acquisition -- more than twice that of the project having the second largest landtake (APInigation II, 41,338 ha) and one of only four having more than 10,000 ha requirements. Whereas land acquisition (LA) typically in canal projectsamountsto about 2-396 of the total inigated area, for the SSPit is about 596, probably due 1 Borrower'satimotc given in it6 comments on th draft PCR. 2 GOG estimate, quotedin C o n d ~ t ' s"Backto OfticeReport" Scptcmk 23.1992, p. 24. 3 PCR'r estimate to the wide right of ways (ROWS)of the main and main branch canals, 250 m and an average 160 m, as opposed to the typical widthsof 50-100 m and 10-50m, respectively.4 5. TheGovernmentof Gujarat (GOG)has the responsibilityof providing R&R for all project- affected families (PAFs) as well asCAFs resettling within the stateof Gujarat. The Government of India has legislation outlining the procedure by which to acquire land and resettle displaced people through the Land Acquisition Act of 1894amended in 1984('the Act') and the Nannada Water DisputesTribunal (NWDT) of 1979,respectively. Although the GOG must adhere to the Act, it has the discretion to decide the degree of R&R compensation it will provide to its PAFs, including those affected by the project. 6. Land for the SSPcanal construction has been and is being acquired through the Act. It is the primary legislationgoverningthe acquisition of private lands for public use. Under Section4 the Government is required to publish a preliminary notice to declare its intention to acquire a specif~carea of land. Land acquisition is done by the Revenue Department (RD), attached to the SSNNL, or "Nigam". In principle, the Act provides for valuation of land based upon current market value and acquisition through mutual agreement between the Land Acquisition Officer (LAO) and the land-holder and determination of land value on the basis of its productivity. However;.thisis practically never done by the LAOS.Normally the value of land is based on the RD's recordsof past transactionsto determineappropriatecompensation 7. The Act has been widely criticizedfor a number of reasons. In practice, past transactions rarely represent actual replacement cost, as land is often undervalued for purposes of tax (stamp duty) evasion. As a result,the land-holderoften pursueslegalcourt action rather than agree to the low compensation usually proposed by the LAO. Furthermore, the Act addressesthe acquisition process for an individual rather than for collective land-ownership. Actually, many people in a village may sharea piece of land, therebycomplicatingthe exerciseof acquisition intendedby the Act. Lastly, the Act doesnot discriminateacrossdifferent socioeconomicclasses. Consequently, marginal fanners perceive the Act ai inequitable, as they are more severely affected by land acquisitionthan are wealthierland-owners. 8. The process and extent of land acquisitionfor CAFs differs from the PAFs, or "oustees", in the reservoir in the following ways: a. Land for the canal system has been acquired in phases as the uncertainty of canal alignment is gradually resolved. Therefore, compensation is provided to the oustees in accordance with the Act only. Differentialcompensation has resulted amongthe CAFs through inevitableinflation, but no rehabilitation packagebeyond the Act had been developed for CAFs. In contrast,reservoir land was acquired at . . once providing all PAFs with an R&R package having both land compensationand resettlementlrehabilitationcomponents. b. TheNigam estimatestheentirecanalnetwork to require approximately 71,757 ha. In contrast, only 7463 ha of the total 37,590 ha of land required for the SSP reservoir will be in the state of Gujarat. A breakdown of land required for each level of the canal system reveals that only 9,051 ha is needed for the main canal 4 Natural Ruor~cerDivision. AgriculturedN.trrrd Ruomccs D c m n t . . view of Bank [Fv 1985-1992.MJKC~ 1993.p. 4. 'IbcSSP isooe of only 10 4projects. out of 8 total 141.resultingor expected to result in 'significant rt~tllemeotof people.' p. 14. (with major dislocationof people), while more than fivetimes that amount (48,991 ha)isrequired for the minor and sub-minor canals, which have proportionatelyless dislocation sinceCAFsmay lose only a portion of their fields. But operation of the farm unit can become difficult if not impossiblewhen the holding is split in two parcels with dmcult or no accessto one another. 9. The NWDT issued a decision in 1979 that stipulated an R&R policy among Gujarat, Madhya Pradesh and Maharashtra. Under the NWDT award, Gujarat must provide the PAFs of Madhya Pradesh and Maharashtra appropriate R&R if they choose to resettle in Gujarat. The NWDT however doesnot addressGujarat's R&R responsibilitiestowardsits own ousteesand in particulartowardstheCAFs. 10. The NWDT provides awardsto those who are considered oustees. An 'oustee' is defined as follows: An Oustee shall mean any person who, since at least one year prior to the date of publication of the notification under Section 4 of the Act, has been ordinarilyresiding or cultivatingland or carrying on any trade, occupation or calling in working for gain in the arealikely to be submergedpermanentlyortemporarily.5 11. Canal-affected familiesare not included under the NWDTaward, asthe tenn 'oustee' refers only to those families threatened by submergence. Although the Water Delivery & Drainage project makes no reference to oustees or to R&R policy, an alternative definition of oustee is included in the 1985Credit and Loan AgnxmentsfortheDam and Power project: Oustee means any person, whether landed or landless,who...would be displaced from his usual habitat due to the carrying out of the project...P 12. As the tenn "submerged"is~eplacedwith "displaced",theBankmodification of the oustee definitionappearsto encompassCAFs. However, as the Legal documents of the Water Delivery and Drainage Project did not include such a defmition the Government of Gujarat, heeding the NWDT rewarded theCAFsmonetarycompensationunder theexistingAct only. Consequently, no special provisions were developed forCAFs under Gujarat's own R&R policy. 13. Guidelineswere outlined by the Bank in 1980concerning involuntary resettlement. This statementrecognized theresettlement needs of CAFs: Resettlement of people is sometimes necessary in order to execu&...the construction of canals, highways,transmission linesand the like (OMS 2.33, para. 3). .. Additionally, - beyond * resettlementonly- was introduced: ...themajor objective is to ensure that settlers are afforded opportunities to become established and economically self-sustaining in the shortest possible period, at living standardsthat at leastmatch those before resettlement(OMS 2.33, para. 18). .. . 5 -. hues Reptnt by tbe of tbc Executive Diratm (R),S S m Vdodan, Gujarat.Datai February 1992,p.6. 6 Development Credit A m e a t 1552-INdatd May 10.1995.Article 1. Section l.OZ(g). The policy also explicitly recognized that a large percentage of displaced people would require an agriculturallybased resettlementpackage. 14. In 1982the Bank developed an OMS that also addressedthe direct needs of tribal people. The statement also emphasized the responsibility of the Borrower to implement R&R measures with respect to tribal people, who in the case of the project are mostly Bhil and Nayaks, axe about 1096of theCAFpopulation (and much largerpercentagesof the PAFpopulations): The Bank will assist projects only when satisfied that the Borrower can implement measures that will effectively safeguard the integrity and well-being of the tribal people. (OMS 2.34, para 5). Thispolicy statementalso addressed the need to have tribal people participate in the decisions affecting them (OMS 2.34, para. 11). The activitiesprescribed for tribal-specific R&R includesan anthropological pre-feasibility study (OMS 2.34, para 10). Furthermore, the capability of the designated agency to implement a tribal componentshould be assessed at project appraisal (OMS 2.34, para. 12). Additionally, the implementation process should be extended beyond the time- frameof the project itself and should be closely monitored (OMS 2.34, para. 13). 15. As with R&R in general, tribal issueswere not addressedin project preparationfor the SSP canals project, although policies were in place for bo.th in the early 1980s to address the rehabilitation needs of both tribal and non-tribalCAPS. R&R Policy at the Time of Credit Negotiations 16. Negotiations fortheproposed Water Delivery &Drainageproject were held in Washington in November 1984. The Agreed Minutes of the Negotiations between the Bank and the Governments of India, Gujarat, Madhya Pradesh, and Maharashtra did not mention the resettlement and rehabilitation of canal-affected families. The May 1985 Development Credit Agreement establishedbetween the GO1and the Inpational Developznent Association alsofailsto mention an R&R component for CAF. 17. Similarly the SAR for the Water Delivery & Drainage Project of February 1985 -- while recognizing the need to stipulate policy guidelines for the R&R of reservoir-affected families (Supplementary Data Volume, Part I, p. 63) -makes no mention of R&R forCAFs, includingthe displacement of familiesor thecostof their R&R 18. Although neitherxsettlement nor xehabilitation issueswas explicitly addmsedat the time of appraisal, the Borrower's central assumption appeared to be that cash compensation, provided under theprovision of the Act, would be sufficientfor CAFs. Canal wnstmction was perceived as different from the dam as the canal does not require disruptive resettlement of entire villages. It was also believed that most of the affected families would continue to live in the command area. Thus, unlilcethef d e s displaced by theSSPxservoir, the CAFswould benefit directly from the irrigation and drinking water facilities. As a result, the total impact of resettlement would be less severe in the canal area Theseconclusionswere made however without the benefit of a thorough socioeconomicanalysisof the commandarea or the amountof land lost by each individualCAF. 19. The Borrower's and Bank's rationale behind overlooking CAFs at the time of appraisal was the belief that these would be adequatelycompensated under the Land Acquisition Act, 1894. Later, during project implementation, the Borrower made the followingdistinctionsbetween PAFs and CAFstojustify its position: a PAFs generally undergowholesale resettlement. CAFs, may not have to relocate at all; b. PAFsgenerally lose their entire way of living as their socioeconomicenvironment is essentially changed dramatically. The socioeconomic environment of CAFs remainslargelyunaltered; c. If PAFsdo not relocatein thecommandarea,they will not receive benefitsfrom the SSP. Since most of the CAFs remain in the command area, they will receive the benefits of irrigation and improved water supply; d. Sincethe reservoir is being constructed in primarily a tribal and relatively remote area, restricted communication often impedes the PAFs' understanding of R&R issues. In contrast, CAFs generally live close to urban areas, when communi- cationandunderstanding of R&R rights are better; and . e. PAFs typically have a fairly homogeneous agricultural economy and thus are susceptibleto changes in their environment which may si-cantly affect their livelihood. In contrast, CAFs have greater diversity of skills and are therefore better able to acclimate themselves to a new environment. Implementation of R&R Policy for CAFs - Bank's Perspective 20. In 1989,opposition to the SSPwasescalatingin India and elsewhereeven though support continued, for the project, particularly in Gujarat. The main concernscentered around ensuring long-term success of R&R through an adequate rehabilitationpolicy for PAFs. In September, R&R policy concerns raised by the Bank's Board and various NGOs led the Bank president to commissionan Independent Review of the Sardar SarovarProject. 21. In 1990the Bank issued an OperationalDirectiveon InvoluntaryResettlement(OD4.30) which addressedcomprehensiveR&R policy forboth PAFsand CAFs. Thispolicy broadened the resettlement focus beyond hydropower and inigation projects to includeall typesof investment operations and re-emphasized and recast the involuntary resettlement policy of 1980. Salient objectives of the policy included minimizing involuntary resettlement (OD 4.30, para. 3) and providing PAFs with a means to improve or restore their former standard of living, earning capacityand production level (Od4.30, para. 3b). Additionally, the directiveaddressedthe need to value land at replacement cost (OD4.30, para. 14-16)and to involveboth officialsand PAFs in resettlement activities (OD4.30, para 3c-d). 22. A Bank pre-appraisal mission for a second canalproject in mid-1992examined the R&R issue forCAFswith respectto conformitywith OD4.30. Sincethefirstcanalproject was about to close, the Bank highlighted the need for Nigam to comply with the Bank's latest directive on involuntary resettlement for the proposed second canal project. The Bank also emphasized the need to conducta carem socioeconomicanalysisof thecommandarea,to determine the extent of disruption that would be caused by land acquisition, and to formulatea policy designed for R&R of CAFsspecifically. 23. In late 1991,the Bank contractedwith an anthropologistconsultant to investigate the impact of land acquisition in the command area The consultant compared his findings to those of consultants from the India Institute of Management (IIM), which had been commissioned by SSNNL. The IIM report was not released by the GOG as its recommendations for providing a conceptualframework beyond the Act for compensation of land (treating it as a productiveasset) was found unacceptable,even though it was in line with Bank guidelineson replacement of lost productiveassets. GOGcriticizedIIM's overstatementof thenumbers of CAFsinvolved (about 223,000 CAFS compared to the consultant's estimate of about 140,000 and the Nigam's later official calculationsof about 170,000).7 24. The consultantmade other recommendationsconcerning the need for: (a) a comprehensive socioeconomicsurvey to determinepolicy; (b) the necessity to confront the 'culture of litigation' that has grown up around theAct, perhaps by establishmentof valuationnorms and the setting up of a valuation committeeincludingprofessionalexpertsat valuation;8 (c) a better categorizationof CAFs, especiallywith respect to those who (as along the right bank of the main canal)will receive no direct irrigation benefits; and (d) a better assessmentof the numbers involved, with respect to land acquired, families effected, severity of effect, etc., possibly through an upgrading of Act- related technologythrough computerization 25. On a preparation mission for the SSP Canal I1 Project in January 1992, another Bank consultant did a review of CAF issues. He constructed a detailed account of CAF status after analyzingthe land,acquisitionprocess duringthe fmt project. 26. The consultant emphasized the differencebetween resemoir displacement and the canal displacement, as the latter has minimal (a) need for physical relocation, @)scopefor reducing displacement,(c) host integration problems, and (d) needfor replacement of shelters,infrastructure or social services. He failed to mention the serious impact canal construction can have on the integrity of farm holdings. In many cases, even if the resulting total area of the holding appears sufficient to maintain a satisfactory living standard, it may become difficult if not impossible to exploitdue to the division of the holding intouneconomicalnon-contiguousunits. 27. However while recognizingthat canaldisplacementmight be different from that caused by submergence: (a) it stillmust be very carefullyprepared because of dislocations;(b)timely action may be much more important; (c) there may be p t e r scope for diverse and imaginativeaction plans; and (d) it may be possibleto conferentitlementsmore selectively. 28. The consultant recommended generation of more detailed and reliable data on CAFs through a sound sample survey to give baseline information about socioeconomicconditions of CAFs throughout the command area and an inventory of private and public assets for assessing their replacement cost. From these should flow a set of developmentalpackages for CAFs which would be situation-specific. 7 Or b e Independent Review's estimation of 140.000. See below. 8 Recent estimatesindicate as many as 10,000 court crscr outstanding on LAA dicputes for SSP Canrlr. March 1993. 29. In June 1992, the Independent Review published a critique of the SSP. Although this focussed on R&R policy for those in the reservoir area, Chapter 9 of the Review's report is devoted entirely to the R&R policy for CAFs. The Independent Review criticized the Bank for failingto implement its own policy for CAFs asestablished within the 1980and 1990Involuntary Resettlementguidelines Fhrmore, theReview criticized the Bank for failing at inceptionof the project to obtain a covenant with the GOGtocover theR&R forCAFs. The Review proposed that it was the responsibility of the Bank to enforcecompliance with R&R policy for the CAFs. As evidencethat tbeCAFswere overlooked,the Review stated that the Bank neglected to investigate the scale and nature of displacement and never established benchmarks for GOG at the time of appraisal. The Review also stated that application of the Act has resulted in inadequate compensationamongCAFs. The Reviewfield study showed land compensationranging from Rs. 2,800 per ha to Rs. 4,500 per ha for land of similar size and quality. Additionally, the study revealed that trees and wells were often not included in the compensation, although there was provision for it in the Act. The Review suggested a retroactive policy for all farmers rendered marginal or landless to receive special oustee packages -- basically land-for-land,under the same policy provisionsgiven submergenceoustees-- inaddition to the monetarycompensationprovided them sofar under the Act. 30. TheReview suggestedthat by comparinglandacquhedand total people affected,one could conclude that CAFs desewe similar treatment as PAFs. It stated that about 73,910 ha of land is needed for the canal system, whereas only 37,590 ha needs to be acquired for the dam submergence. Additionally, the Review highlighted the fact that the number of CAFs isactually greaterthan PAFs (140,000 affectedby the canal (estimatedby the Review) as opposed to 100,000 people affected by the dam.) Finally, the Review stressed the need for an impact socioeconomic survey,aspaucity of information constrained assessingCAFissuesand formulating solutions. 31. In July 1992, the Bank fielded a special mission to assess the Independent Review's report An anthropologistconsultant on the mission presented a report supporting the Review's findingsabout lack of credibleinformationconcerningCAFs, but pointing out the inconsistency in the Review's two recommendations for, on the one hand, treating CAFs as PAFs and, on the other, recommending that the Bank follow its own policy of conducting a socioeconomicsurvey recommendingpolicy. ,/ 32. In September 1992, the Bank recognized in the document entitled "Review of Current Status and Next Steps", that CAFs should not be placed in the same category as PAFs. It added that relocation in the canal area would not be as disruptive as in the reservoir submergence area. The Bank quoted the Nigam's numbers that only 24,000 out of the estimated 170,000would lose more than 25% of their land, whereas the great majority would benefit substantially from irrigation. TheBank alsoemphaskd that the disparity between thesocioeconomiccompositionof the canal and submergence oustees necessitates different R&R actions. Unlike the case of reservoir oustees who, at least within Gujarat, are almost entirely tribal,9 canal oustees are estimated to be only 10%eibal andconcentratedonly in districtsalongthe first reachesof the canal system. Additionally, the Bank maintained that families in the canal area are more skilled and integrated into the market economy. As a result, CAFs generally have a larger range of options than do PAFs. 9 The m e istrue for Mdmrrshtrr, wbaus in MP tbr luge majority me m-hibrt .Irdwt field by total submersion.Tribrt in MP rre bowever Uw first to k affected MCI tboe most fisted by total submergence. 33. The Bank suggested that the Nigam conducta socioeconomic survey to determinethe facts and the needs of the various categories of CAFs. GOG agreed to carry out these studies, to be completed as part of the March 31, 1993benchmarks, to use them as the basis for providing those CAFs made marginal or landless by canal land acquisition with a suitable compensation and rehabilitation package, going beyond the Act, for restoring them.totheir previous condition or better, in accordancewith Bank directives. Benchmarks Developed 34. In October 1992,the Bank's Board established 19R&R benchmarks for GOG and other state governmentsinvolved in the SSP (principally MP and Maharashtra). One Benchmark (#3) addressed theCAFissuespecifically. Theaction to be taken by March 31,1993 is as follows: a Conducta socioeconomicreview of CAFsand formulatea policy package for Bank review; - b. Identify CAFs who have been made landless, marginal and have lost more than 25% of their land; and c. Announcean interim policy for smalland marginal farmerswhose land has already been acquired. 35. On March 15, 1993,Bank consultants finalized an assessment of the progress of GOG with respect to theR&R benchmarks set by the Bank in October 1992.. They determined that the socioe-conomicstudy would not be completeby March 31, 1993as required. The PCR mission was informed verbally that thesocioeconomicstudieshad been completedbut the resultswere still not communicated by July 1994. However, an interim policy was established by GOG in September 1992to augmentcompensationto smalland marginal farmers as well as to those losing more than 75% of their land holdings. Provisionsfor thispolicy areoutlined in a GOGresolution as summarized below. Implementation of R&R Policy for CAFs 36. Acquisitionof land for the canal projectbegan early in preparationfor actual construction, which began in 1987. Work was begun near the dam siteat Kevadia, the southernpart of the canal system (upstream, towards the dam),where most of the tribal CAF reside. While awareness of CAF issues was low among these people at fust, the issue of CAFs surfaced in 1987, at a time when non-tribal land was acquired as well. GOG's awareness of the R&R issue for CAFs was eventually heightened by NGO lobbying on behalf of the CAFs as well as the large numbers of courtcases disputingcompensation awards. 37. In May 1988 GOG adopted a policy, for SSP reservoir oustees, which provided a minimum of 2 ha of land to each family irrespective of their land-holding status prior to acquisition. Furthermore, the policy stated that if irrigation benefits cannot be provided, each displaced family would be allotted a minimum of 4 ha of land. At that time however no CAFs were considered oustees. In May 1990a SSPR&R Bank review mission was informed that GOG would not be amenable to any land-for-land arrangementsfor CAFs. Moreover, GOG maintained that any socioeconomicsurveyof CAFs would raise compensation expectations for CAFs and was basically unwarranted due to the marginal effect land acquisition would have on CAFs. GOG decided however to give priority to someCAFs for employment opportunitieswithin the SSNNL. Despite GOG's position, the review mission recommended that GOG carry out a survey to gauge the impact of land acquisition on CAFs. This survey was later done by the India Institute of Management(IIM). 38. In July 1991, the Nigam commissionedthe IIMto develop a frameworkfor examining the adequacy of R&R policy for CAFs. After studyinga sample of 164villages in areassurrounding the main canal, IIM produced a number of criticisms in regard to CAFpolicy. It pointed out that while the Town Planning Department was involved in determiningthe "going market rate" of land acquiredthrough the Land PurchasingCommitteemechanismsetup for identifying and purchasing land on the open market for PAFs, the sameeffortto establish nonnative land prices for CAFland was not being done. IIM highlighted thetwo-fold problem of land valuation, that landholdersare induced into undervaluing their assets by 30-5096 due to a severestamp duty on land transactions and the Land Acquisition Officers (LAOS) rarely value land as a productive asset. Instead, valuation is a haphazard and arbitrary process,inevitablyleading to undervaluation,rather than the shadow market price which is the basic intention of the Act. 39. IIMrecommended a comprehensiveconceptual frameworkforestablishingvaluationnorms that would provide: (a)compensationfor land asan asset; (b) compensation for retirement of other factorsof production eg., family labor, bullock labor, production machinery and implements); (c) compensation for the loss of capital gain (for future increase in income foregone); and (d) readjustment cost to those CAFs who become landless as a result of land acquisition. The IIM study suggested an action program of data collection for making this package operational, which included updating prices for immovable properties on the land at replacement costs rather than depreciation IIMemphasizedthe location value of land along the canal alignment(access to public services, economic activities, urban centers) as a factor in valuation requiring professional expertise, aswell as land's location in one of thirteen agro-climatic sub-zones identified within the State. The repon also underscored the delay in setting up a productive fann unit, and the need for including a readjustment allowance. 40. DM'S main recommendations were for a compensation package (or packages) to be developed, along lines suggestedin the report, for removing or reducing the subjectivityof field persons (LAOS) in valuation. Tbe report's recommendations were not made public and were dismissed out-of-hand without benefit of discussion, based not on the merits of the discussion concerningcompensation packages -the main recommendations --buton the argument that the JIM had miscalculated the numbersof CAFS. 41. In December 1991the Nigam stated that there was no reason to comply with the Bank request to provide specialtreatmentfor canal oustees, asthe CAFs had been willing to giveup their land all along. The Nigam reiterated that only a small percentage of landholderswould lose more than 75% of their land; therefore, the majority of CAFs would not have to be physically moved, nor would their socioeconomicenvironment be altered. Additionally, the Nigam argued that the CAFs are freeto approach the courtsto enhancetheir compensationif they are dissatisfiedwith the payments received. To demonstrate that a special CAF policy was unwarranted, the Nigam outlined the following benefits which accrue to CAFs: (a) CAFS will benefit from a great appreciationof land prices after irrigation begins; (b) while land on the eastern edge of the Main Canal might not benefit directlyfromirrigation, farmers would benefit neverthelessfrom ground- water recharge; and (c) ampleemploymentopportunitiesforeven the landless, marginal,and small fanners affected by land acquisitionwould be generated within the command area and in project- affected agro-industries. These arguments did not take into consideration the reduction of living standards due to the loss of land or the division of farm holdings into two or more parcels. 42. In August 1992 GOG responded to a number of the Independent Review's criticisms. Once again, GOG emphasized that CAFs will be the major beneficiariesof the command area development. GOG also stated that the number of CAFs calculated by the Independent Review was taken from an overestimate of IIM (even though the Independent Review had done its own independentestimatefor CAFS). 43. While GOG was sharply critical of the Independent Review and of its findings, GOG ultimately made prompt concessionswith regard to GOGpolicy, proposing a special compensation package for CAFs who are small and marginal fanners losing 50% of their land or losing more than 75% of their holdings to land acquisition. This interim policy of September 15, 1992 provided additionalfinancial assistanceto those defined as marginal and losing more than 50% of their land. The defmition of marginal included those within the commandarea having less than 1 ha before acquisitionand left with 0.5 ha afterwards;and those outside the command area,having less than 2 ha before and less than 1 ha after land acquisition. GOG estimated that only 750 farmers would lose all their land (of the total 170,000 CAFs). According to Nigam estimates, another 2,000 CAFs rn expected to lose between 75% and all of their holdings. So presumably some 2,750 CAFswould be eligiblefor the interim policy. 44. Theinterimpolicy givesmarginalfannersthechoicebetweenaland-for-land optionof 1ha of government land outside the command area, or 0.5 ha of government land within the command area,provided this does not exceed what waslost to land acquisition. If theland is not available, a monetary award may be given instead. Thisaward is determined on the basisof the price of land fued by the Land Purchasing Committeesbuying land for PAF resettlement. The interim policy regards the amount of money already received for land compensation as ex-gratia, and is retrospectively applied to all CAFseligible in the Project. Regardless of prior compensation, the eligible CAFs have the choiceto accept the amount of land offered aspart of the interim policy, or the proxy amount of cash. GOG stipulated however that those accepting the interim policy must withdraw any on-goingcourt casesimmediately. 45. Sincethe policy did not providefor a clear and unequivocableland-for-land option,which would have included theestablishmentof Land PurchasingCommitteesbuying on the open market (as with PAF resettlement sites),the interim policy fell shortof recommendations made by the July 1992Bank mission. However, in establishinga proxy for market value equivalentto prices paid by PAFLand Purchasing Commi#ees, it wasa step in the direction of improvingthe valuation process, and if enough fanners opted for it, would have possibly reduced the approximately 10,000 outstandingcourtcasesrecorded as of May 1993. 46. The Interim ~olic~'didgo some distancein mating the Bank's benchmarks for GOG with respect to CAFs. 47. Items (a) and (b) of para 34 however were not met by the March 31, 1993deadline. Item (a) was however at least partially met by the Inception Report prepared by the Gandhi Labor Institutefor the "Social Impact Analysis of Land Acquisition for SSPCanal Network." This report proposes a frameworkfordevelopment of a comprehensivepolicy towards CAFs and establishes the groundwork for the socioeconomicsurvey set as a benchmark by the Bank in October 1992. This report suggests a complex rehabilitation package catering to the needs of different socio- cultural groups within the command area. Ethnicitiesrange from mbal to caste people, with each group having different expectations, attitudes and behavior that should be taken into account in designing rehabilitation packages. The report proposes a land-for-land policy for tribals concentrated along the early mches of the canal, and a more diverse set of options including training,entrepreneurialsupport, or even cash compensationforotherCAFsthroughout the rest of the command area. Item (b) of para 34 above was by March 31 at least partially met through a contract between Nigam and theBureau of Economics and Statistics to conduct a survey of all those who lose morethan 75%of their land due to land acquisition. Additionally,the Nigam had endeavored to obtain more qualitative data on the CAFs through the Gandhi Labor Institute socioeconomicstudy. Although the finalresultsof the above studieshave not been published, a preliminary finding has been that a larger proportion of CAFs than thought previously has land elsewhere, a factorpreviously not considered in determiningpercentageslost to land acquisition. Thissuggestsasomewhatgreaterexistingcushionthanpreviouslythought J CAF Issues Pending 48. GOG has informed the Bank that the socioeconomicsurvey of CAFs has been completed but the res* were stillnot communicated to theBank by July 1994. GOG has agreed to framea full and comprehensivepolicy (as opposed to the Interim Policy) forCAFs and to implement it in the entirecommand area. ThePCR recommendsthat the new policy should apply not only tothe persons affected by the construction of the canals but also to all persons affected by works and other aspectsof command area development The policy should also apply to persons affectedby drains, roads and quarries. It should also apply to persons whose houses and fields may be affected indirectlythrough seepageof canalsor waterlogging due to inadequatedrainageworks. 49. Based on the experiencegained under this and other projects, the final policy should consider the acquisition of land by consent award based on market price together with the allocationof an ex-gratiaamount for thepurchase of replacement land by theCAR. Theex-gratia amountisquiredbecause the land value isbound to increasewith theadvent of irrigation; it can be deposited in a managed account so that it becomes available to the CAF only when he has identified the replacementland. Thisprocedureis recommended because it avoids litigation and provides the CAFs with the financial resourcesq u h d for purchasing replacementland. It also relieves the Governmentfromthe burden of finding and allocatingreplacementland on behalf of the CAFs. 50. One aspectthat would need attention while the new policy is developed,isthe possibility of reducing the impact of land acquisition through the implementation of a land consolidation operation. Under this process, all beneficiaries contributea smallpetcentage of their land towards the area required for the acquisition of rights-of-way. There is no need for payment of compensationor provision of replacement land. In addition,the processallowsfarm boundaries to be realigned so that each holding has access to a canal for irrigation, a drain for disposal of excess water, and a farm road for transport of inputsand outputs. Land consolidationprovides the optimum layout at the minimum cost of infrastructure. Themain draw back to the procedureisthe time usually required for updating the land records and redistributing the land. Farmers also initially tend to resist the operation, but with a proper set of incentives, they can be convinced of thebenefits. Land consolidationhas been implemented on a largescalein Punjab and Haryana in the past, and in Orissa more recently. It has been used systematically for the development of modem irrigationschemesin North and West Africaand Thailand. 51. The Bank has commissioned consultants to include in an Environmental Impact Assessment for the project an assessmentof health risksrelated to resettlementand rehabilitation, and the on-going socioeconomic survey being conducted by the Gandhi Labor Institute will be incorporated into the full EIA for the project. To date, there is little indication that the Interim Policy established by GOG in September 1992has been actually implemented or what its results have been. Additionally, a small Village Development Fund has been proposed to compensate communitieslosing publicinfrastructuredue to canal land acquisition. Lessons Learned 52. Severalkey lessonscan be learned from the R&R issuesfaced in this project: 53. The fllSt lesson is that projects involving R&R require considerable preparatory effort, including affected persons' involvement,a sound policy base, adequate budgeting and fmancing, good R&R component Besign, pmise and detailed legal documentconditionalityand consistently good supervision to increase the chances of success. Particularattension should be given to the application of the prevailing Bank guidelinesduringpreparation, appraisal and negotiations of large multi-purposeprojects (and others). If the guidelines change during project implementationand supervision,the Bank shoud approach the Bomwer to see in what way the new guidelinescan be applied. 54. The lesson is that canal-affected personsneed to be adequately compensated and provided with the additionalresourcesfor purchasing land to replace what they have lost. Special attention shouldbe given to the impacts of canals, drainsor roads on the viability of farm holdings. Finally, alternativesolutionssuch asland consolidationand field boundary realignmentshould be considered,at leastin a pilot fom, to minimizeland acquisition and facilitateaccessof holdings to irrigation, drainageand roads. 55. The lesson is that there some differences between canal-affected and reservoir affectedpersons. Whereas,in the first instance personsare usually partially affected and villages often not at all,in thesecondinstance,persons and villages rn fully affected and must be relocated often in a completely diffe~entenvironmentand habitat. Though the basic objectivesand principles should remain thesamein each case,the substanceof such polices may differ. PROJECT COMPLETION REPORT INDIA NARMADA RIVER DEVELOPMENT WATER DELIVERY AND DRAINAGE PROJECT DAM AND POWER PROJECT - (Credit 1553-IN & Credit 1552IN/Loan 2497-IN) REVISED COST-BENEFITS ANALYSIS Introduction 1. Nearly 5 million people will benefit directly from the irrigation provided by the developmentof the SardarSarovarProject Most of thesefamiliesapoor and spendtheir livesin a harsh and hostileenvironment. Rainfall in most of the area is barely enough for a single wet- season crop. Although in total the rainfall might be sufficientin some areas, much of it runs off the land during short and intense storms. During the long dry-season, crops cannot be grown without irrigation, and water for drinking isquickly depleted,especiallywhere the groundwateris unusable. Every year some 1.5 million head of cattle are herded into the northern part of the project area in searchof fodderand water. But the long dry-season and the risk of failuresof the monsoon rains makes this a tenuous existenceforthe pastoralists. 2. Drought is an annual event, and people and livestock often have to depend on water trucked in by the state. There are a wide array of diseases endemic in the rural population and traceable to malnutrition and d e drinkingwater. A reliable and safesupply of domesticwater will benefit some 30million people who frequently experiencesevere water shortagesin the dry season. Gujarat is one of the fastest growing industrial states in India and there is a rapidly growing demand for industrial water. These rising demands for imgation, livestock, rural, municipal, and industrial water are outstripping the groundwater resource and the existing reservoirs. The present situation not only precludes further growth but is simply not sustainable because of the over-exploitation of the groundwater resource in the water-short areas. These conditionsexist in the p-ce of the Narmada Basin's vast unexploited resources and, therefore, the Union and StateGovernmentsa~ committedto the Basin's development. 3. It appearsfrom the project design that Gujarat's and most important objectivewas to give priority to the social benefits of the project over any other consideration. The strategy consistedin spreadingwater overthe largest areapossible in orderto reach the maximum number of people even at the cost of reducing the economic rate of return. This strategy was consistent with the trend of thought that has existed in India since colonial times and which, to someextent, continues even today. In those days irrigation schemes were mostly built for famine relief and protective irrigationratherthan for productive imgation. 4. The second objective for Gujarat, appears to be its desire to implement a large multi- purpose project includinga largecommand area of 1.8 million hectaresnet, a very ambitiouswater supply scheme for domestic, municipal and industrial uses for 30 million people and a power generation station of 1,450 Mega Watts. To satisfy the full water requirements of such a large project, a second large reservoir, known as the Narmada Sagar Dam, is to be constructed simultaneously upstream in MP. The large project concept prevailed during the NWDT proceedings and finally was accepted afterthe distributionof water, costs and benefits satisfiedall riparian states. 5. The updated economic analysis shows that the economic benefits resulting from power generationare somewhat higherthan those derived for irrigation. The analysisalso showsthat the economic benefits derived from municipal and industrial water supply are likely to be more substantialthan initially anticipated. As the main canal and command area are still in their initial stages of construction,there is still time to readjust the irrigationand water supplycomponentsso that this project could become economicallymore profitable. This would be possible by cutting out someof the higher cost locationswithin thecommand areal. This would have littleor no effecton the ERR. On the other hand, the hydropoweraspects of the projects have reached a point at which adjustments are no longer possible. The dam height, the design of the riverbed powerhouse and the specificationsof the turbine generatorsareinterlinked and have reached a stageof construction and manufacturing which prevents any changeswithout major cost implications. Furthermore, as the characteristicsof the Sardar Sarovar Dam and its power component are part of the NWDT award, any changes in their conceptwill require the agreementof all four party states. Revised Economic Analysis 6. The revised analysis, which wascompleted in April 1993as part of the benchmarks setby the Board, finds an Economic Rate of Return (ERR)of 12.2%. Thisis marginallylower than the 13% found in the original SARanalysis,but faUswithintherangeof acceptableERRSfor a project of thistypeexhibiting a very largescaleof benefits relative to any feasiblealternativesand having substantial multiplier effects. The rate is moderately sensitiveto the timing of upstream storage development in the foreseeablefuture. The ERR would be about 1percentage point lower in the absence of Narmada Sagarbut this would assumeappropriateadjustmentof thesizeof the irrigated command area. It should be noted thathad the SSP been conceived as a power project alone, the ERR would have been 14.2%. The command area aloneexhibits a somewhatmarginal ERR. However, it has alwaysbeen apparent that the ERR of the irrigation component could have been substantially higher if certainhigher cost zonesin thecommand areawere reduced or omitted and if the availablewater had been concentrated more heavily on a smaller area2. The ERR excluding such costs is estimatedat 17.4%. 7. A spreadsheetsimulationmodel was built to carryout the revised analysis. In terms of its functions, the model is similar to the one used in the SAR economic analysis. However, the module to derive random distribution of the project ERR was not included. The water balance calculation and the calculation of irrigation intensity are also simplified. Using the SAR input/output data,the ERR &rived by thismodel is almostidentical to that projected in the SAR, verifying that thesesimplificationshave not altered the basic structureof the model. An economic analysis can only be part of the overall decision-making process. A.t the end of the paper a qualitativediscussion isincluded to test whetherthemults of thisanalysisseem sensiblegiventhe changessince the original analysis. It is probablethat the efficiency of water transmission to the field will be lower than that projected in the originalanalysis. However, someof thelosses would be picked up in groundwater and over time one could expect improvements in efficiency with advanced technologies and appropriate incentives. However, it would be wise to be circumspect 1 'IbeBorrower draws the attentionth.ta high ERR ism t thonly criteriaforjustifying Aproject. In tk cue of SSP. . o c i ~ ~ ~ ~ w m i c conci&.tionc were taken into account. 2 ?beBorrowerstraces that tk questionof reducing th command .ruin tk higher costflowerbenefit moer dou w t wise s k the objective of tk project is to makc dequate w a r availabk to drought prone areas. about the development of the final 30%of the command area3. Until performance data are availableon theearlier portions. Any reduction of efficiencyis likely to have some impacton the ERRbut probably itwould not belargesincethelostwater toseepagewillenlarge therechargeon which groundwater extraction can draw and, as suggested above, reductions in size of the command area shouldcomefrom the lowerreturnareas. 8. The analysis is based on adjustmentsto the SAR economicanalysis to accountforchanged quantities, prices and phasing since the 1984analysis. The base year of the analysis has been brought to 1992. Year 1 of the analysis is 1984 when the investments actually started on the SardarSarovarDam. The costs incurred before 1992were inflated to 1992cost levels. Costsare in Rs. million and have been adjusted from financial to economic prices using a standard con- version factor of 0.8. Theanalysis includesthe construction of theSardarSarovarand a &ate of the Nannada Sagar Dams which are both required to provide regulated water for irrigation and power generationup to the quantitiesprojected. Theenvironmentalcomponentof the analysishas paid particular attention to the environmentalcosts or benefits which might have been under- estimated or omittedin the original analysis,such asestuarychanges,fsheries costs and benefits, fuelwood and wildlife. Information reviewed or used at the time of appraisal, or as part of this review, iscontainedin a wide rangeof documentsboth formal and informal. Project Costs 9. ConstructionCosts. economicinvestmentcosthasbeen estimatedinthisanalysis The total at Rs. 136.5 billion at the 1992price level (see Table 17). The costs incurred before 1992were inflated to 1992prices with constructionGNP deflators. No physical contingencieswere applied for the costs already accrued. For future costs,physical contingency rates were re-estimated and applied for differentcost components(see Table 17). 10. Dam.Thedamconstructionperiodis17years. Inrealtermsthecurrentlyestimated costof thedam, saddle dam andtunnel islower than theoriginalprojection by about496. Thecost of the dam itself, on the basis of the bid price, was lower than the original projection (by about 6%) but some contingencies have been retained. The 17%share of thecosts for the Nannada Sagar Darn allocated to the SSP project were taken from estimates by the Nannada Valley Development Authority. 11. The SAR assumptiollsinflated to 1992are used in deriving the opportunity cost of the reservoir-submerged area and the area used by the canal system in the CCA. An assumption for R&R costs of Rs. 150,000per family for 25,000 families has been used. This excludes land purchase costs which are treated as a transfer cost and also excludes those elements of infrastructurein the resettlement village that go beyond what is a replacement cost. Sinceboth items are relativelysmallcomparedto the total costs, furtherelaborationon these cost estimatesis not considered worthwhile. 12. Power:ThisitemincludestheupdatedpowercostsfortheRiverbedandCanalHead Power Houses, the weir, dikes, etc. and transmission. Transmissioncosts, including annualized capitalcost and O&M,were estimated and added. The arm-capitalcost was estimatedto be aboutRs. 400million per year. The otherassumptionsof the SAR analysis remain unchanged. . . 13. : Thisitem includesupdated costestimateson the main canal, branch % % $ % t e r n and command areadevelopmenton the basis of recentconancts. These suggesthighercosts than originallyestimated Thesereal cost increases havebeen projected into the future the analysis. However, it is believed that as a result of changes in the way the contractsat.e packaged and improvementsin efficiencywith increasing experience,futw unit costs nay be able to be reduced. 14. -: Table27 sets out each of the main environmental impacts with a cost column, a benefit column and a net column in 1989prices. In transferring these to the overalleconomic analysisthese have been adjusted to 1992values. Thistable only includesitems eithernot covered,or inadequatelycovered,in the original analysissuch as wildlife losses, public health costsand benefits, cost of moving monuments. The originalanalysisdid include a valuation of forest loss and agriculturalland loss. It omitted any possible fuheries losses in the estuary but also omitted fuheries gains in the reservoir and command area Both of these have now been added. Catchmenttreatment costs are not included; catchment treatment is needed with or without the dam and carries itsown benefitsin termsof i n h agriculturalproduction. Thesehave been estimated in other catchment treatment projects in India to have adequate rates of return. The evidencefrom surveysindicatestbat thereare no rareor endangered specieslikely to suffer,but, to be conservative,an amenityvalue for lost plants and wildlifeand a separateminor forestproducts value has been included over and above the opportunitycost value estimated for the lost forest land. Summingall these itemsgives a value to the lost forest areasof Rs.4,818 per ha per annum in 1989prices which is probably an overestimate given the &graded natureof the forest area For example, in the Gujarat ecosystem study area, the biomass of the forest areas is 16% of what it would have been if those areas had been grade 1forest. Furthermore, since most of the higher measured biomassareaslie outside the submergencezone, the percentage would almost certainly be lowerfor the submergencezone itself. Benefits 15. PowerBenefits: The economic price of power was estimated asRs.1.39kWh (see Table 14). Thisis higher in real terms than the original analysis. Thewillingness-to-pay approach used in the SAR was followed in this analysis. Estimates on the willingness-@pay and averageprices for the various segments of the power market were updated by using the findings of the latest available study (SAR of Second Maharashtra Power Project). This methodology takes the economic value of the average tariff in each consumer category and adds half the additional economiccost of the alternative of private supply to accountfor the "consumersurplus". 16. f PowerBenefits: Power benefits are based on the same quantities of power assumed in the original analysis. The original SAR equations were used to calculate the power generation. Power benefits were assumed to startin 1997, Estimatesof water released for riverbed power generation were obtained by deducting diversions from the total sourceof water, i.e., the mean river flow minustheupstream diversion and the diversion of SSP. Due to expected &lays in upstream water development, the SAR estimate on upstream diversion was adjusted downward substantially,with the diversion in 2026 reduced from 24,300 to 16,000million m3. To factorin the impact of the delays in the construction of the Narmada SagarDam, water released for power generation was reduced by 25%during the first fiveyears of the operations. 17. Theincrementalpower benefits are shown inTable 15.Thisis higher in real terms than the originalanalysis. The SardarSarovarProject,while less ableto meet purely peak and firm power during the later years as the discharge of water becomes increasingly dictated by the irrigation demands, can in the early years meet substantial quantitiesof peak power demand. However, to be conservative, a peak power adjustment coefficient has not been used. The quantitiesof water available for power (and irrigation) are likely to be greater in the earlier years than originally projected since the rate of useof water upstream now seems likely to be lower than was assumed in the original water modelling, although it is the pattern of flow as well as the quantity that is . . 18. :Therevisedcalculationsassumethesameincrementalyieldestimates used in%%$%%%Ysis. The original yield assumptions were reviewed and considered reasonable: for example, in 20 years time, wheat yielding 3.5 tonsha and paddy yielding 4.0 tonslha. Yields in the less suitable soil w,represented by three of the thirteen zones identified, where there would be risk of waterlogging and salinity should the drainage investments and conjunctive use for some reason fail to achieve the designed result, were adjusted downwards by 25% in the original analysis to allow for the more difficult conditions. This assumption was maintained in the revised analysis. The original analysis assumed few high value crops (fruit and vegetables together account for only about 4%of the area at full development). This assumption was maintained in the vised analysis because of the spreading of water over a large area. However, it would not be justified with a smaller command area particularly with the industrialization of Gujarat and its likely orientation toward export markets in the future. Furthermore, the original analysis allowed for little increased cropping intensity to use the large surplus quantities of water that would be available for irrigation in the early years before the irrigated command area is fully developed. This assumption was also maintained because it may be preferablenot to create water rights in the upstream areasof thecommand areawhich would be difficult to withdraw at a laterstageof development. It was assumed that excesswater will be used mostly for power generation which in any case gives a better return than irrigation. No assumption of improved efficiencyof water useover time was ma&, althoughin reality it is likely that drip and sprinkle irrigationwill graduallyincreaseprovided water is appropriately priced. 19. a. . . Due to the delays in project implementation, irrigation benefits are assumed to start in 1995, three years later than the SAR estimate. An 11-year command area (CCA) development period is assumed compared to 10years estimated by the Sardar Sarovar Nigam Ltd.(SSNNL) and 12 years estimated in the SAR. Groundwater development was also postponed by three years. The build-up pattern for each annual irrigation block remains unchanged. The way this is handled within the model, ie., adding one phased build-up into another effectively, results in an irrigation development over about 15 years. To derive the overall benefit pattern, analyses we= canied out separately for the with and without project cases, and are further divided to reflect the irrigated and rainfed conditions. Full project completion isassumed by 2008/2009as against 200312004foreseen by theBorrower. 20. Delays in the whole irrigation component would not reduce the overall economic rate of return; in fact, it would raise it by allowing more water for a longer period to be used for high value power generation. The irrigationoutcomethat would affect the economicrate of return more would be if investments in irrigation command area development at the lower end of the system were to lag significantly behind the expenditure on the main canal, branch canals and distributaries at the upper end and the middle of the system, since under those circumstances the benefits would be delayed in relation to the main investments. The prices used for the irrigation benefits are updated to 1992prices with grains priced at a neutral import/export parity price and cotton atexport parity. Non-traded commodityprices such as vegetablesand legumes a~ at estimated 1992prices. . . 21. :Ithad beenappreciatedatthetimeofthe earlier a i n a lr a b l y underestimated. Following further study and discussions with consultants there remains a methodological difficulty which has significantimplications(on the positive side) for the economicsof the project. Thedifficultyisthat on the scale proposed for M&I water there simply are no practical and reliable water supply alternatives to the project which would be valid for a least-cost alternative calculation. A smaller 4 'Ibe Borrowerdoer wt acceptthe rsrumptionthat development upstreammay be slower thm originally projected. open canal conveyancefor M&I water alone from the Narmada River would appear, in theory, to be the lowest cost alternative. However, in practice it is considered unworkable since the water would get diverted en route by farmers. It is also extremely costly. Piping water is even more ,costly. Dedhization would appear to be the only practical alternative, but this is also very costly. The lack of viable alternativessuggestsa high value for M&I water. 22. The valuation of domestic water in the original analysis appears low in relation to l h l y willingness-@pay criteria and the socialadjustmentalternativesin its absence which presumably would require at least a portion of the people to move out of the area. (The original valuation in 1992prices at the point of intakeinto the local system was only Rs. 0.96 per m3 at the start of the project period (i.e., less than three-hundredths of a US cent per m3 rising over 30 years with increasingwater scmity to Rs.3.68 per m3(about one-tenth of a US cent per m3. Thisappears to be a substantial underestimategiven the severe impacts of m n t droughts on these areas which required trucking of water to villages and seriouslossesof livestock). 23. For the purposes of this analysis, the original SAR methodologywas adopted but the cost was escalated by assuming one-third of the water would come from desalinization. The present value of theM&I water is thus raised by about 60%in realtermsover the SAR estimate. TheM&I water benefits stream is given in Table 15. Further work on this valuation is needed. Thisis a casewhere there areno alternativeson thesamescale. 24. m o o d Benefits: Benefits from fuelwoodproduction from canal-sideand on-farm trees were omitted in the original analysis. It is estimated that there will be about 36,000 ha of canal- side plantationsand a substantialincremental number of on-farm trees per hectare growing at a fasterrate than in the "withoutproject" drylands situation dueto the irrigation. Fuelwood is valued at Rs. 500 per ton and poles at Rs. 30 per piece. Average net revenue from the canal-side plantations with 50% of production going for poles and 50% for fuelwood is estimated at Rs. 4,132 p a ha. Average -mental net benefitsfrom fuelwood/poleproduction from on-faxm trees isestimated at Rs. 150per hectare per year for the 1.8 million ha command area Benefits would reach their maximum levelin theyear 2010. Castshave been deducted to derivenet benefits. 25. FisheriesFisheriesbenefitsandcostswereomittedintheoriginalanalysis.Costs of possible fisheries losses in the estuary are included in the Environment Costs column (Table 21). Potentially, fisheries net benefits are significant due to the large volume of water and the water control availablefrom the project and due to thehigh and rising value of fish, with pond- grown prawns as a high value export product. The projected benefits would come from the followingsources: (a) the fesewoir itself, (b)canals, (c) thedevelopmentof fish and prawn ponds within thecommand area, (d) possibly the development of shrimpproduction using drainagewater to regulatethe salinityin brackish water ponds near thesea, and (e) cage fisheriesin both reservoir and canals. Assumptions are from the analyses done for the fisheries component of the earlier proposed Narmada Basin DevelopmentProject: reservoir yield to stabilize at 50kg pqr hectare after an initial trophic burst and subsequent trophic depression phase; 2000 ha of fish ponds and 1000ha of prawn ponds by Year 21 with net benefits rising thereafter at 4% annually; associated fish production at 30% of thenet benefit level of prawns; a small canal cage and capturefishery; and, developmentcosts (plansare already quite far advanced) of Rs.150million over 8years with continued operatingcasts thereafter. Economic Rate of Return 26. The Economic Rate of Return (ERR)is estimated at 12.4% (Table 22) which, as noted earlier, fallswithin theacceptablerange for a largemulti-purposeregionalproject of this type. In a recent study on India (HazeU and Haggblade 1990)the multipliereffect was estimated at Rs. 0.66 value added in non-farm activitiesin rural areas and rural towns for every Rs. 1.00value added in agriculture and Rs. 0.86 value added in the national non-farm economy. Furthermore, the multiplierwas found to be higher in irrigationthan rainfedagricultureand to rise over time with increasing development (e.g., the multiplier was Rs. 1.06 in hjab). With respect to a decision about whether to continue the projects (dam and irrigation) beyond this point in time, assuming costs alreadyexpendedare sunk costs,the ERR of the project is about 17.4%. As a power project alone, the ERR of SSP is 14.2%. Tables 30, 31, and 32 give results of sensitivity analyses. As indicated by the tables, because of the multi-purpose nature, the project is relatively stable to changed assumptions. 27. The ERR of SSP without the Nannada Sagar Dam would depend on what other related changesoccur above SardarSarovarDam and in the command areadevelopmentin responseto an indefinite &lay constructing Nannada Sagar. There are many different scenarios, most of which would require further water modellingto defme. No modellingof a "Sardar SarovarDam only" scenariowas run since it was part of an integrated package of developments. However, assuming delays in .Narmada Sagar, approximations can be made. Assuming that, without Narmada Sagar,the irrigation benefits at Sardar Sarovarwould be reduced by a flat rate of 30% and power by a flat rate of 25% for thefull %year analysisperiod (theseare somewhat greater reductions than the modellingactuallyindicated), assuming that the projected water use upstream would develop as originally modelled in accordance with the NWDT water allocations to the participating states, and assuming that the command area investments would be adjusted in the followingway: by lowering main canal expenditureby 0%(i.e., assuming the wholecanalwould be completed), branch canals by 15%. and all investments below that by 25%, the ERR for the Sardar Sarovar Projects would fall by a little over 1%. Note that reductions in the size of the command area have a positive impact on the ERR since they release water for the higher value power benefits. Discussion 28. Economicanalysisneedsto be tempered with sensiblejudgment. Do these results appear sensible given the changes since the original analysis? Yes, they appear to be. Costs have aQt escalated dramaticallyin real terns, asmany criticshave suggested. The originalanalysis allowed forquitesubstantialphysical contingenciesdespitetbe advanced stateof design of the dam. Those itemssuch as resettlement (R&R) and environmentalcosts, which are now valued at considerably higher levels, are not large relative to the substantial scale of the overall project cost and benefit streams; R&R, for example, represents even now less than 5% of the total project cost and environmentalcosts ire less. Increased land values for R&R, one of the main escalation items usually quoted as being damagingto the economics, donot in factaffect the economicsat allsince thesearesimply transfercostswithintheeconomy. Catchmenttreatmentcosts, often said to be an environmentalcost to the dam, are not a valid economiccost because such catchment treatment carries its own benefit stream in terms of increased agricultural production from moisture conservation and reduced on-site erosion and adequateeconomic rates of return are anticipated from such projects elsewherein India 29. With respect to sensitivity to environmental parameters, if higher than projected environmental costs in and around the submergence zone or in the estuary were to have a significant effect on lowering the ERR,they would have to be orders of magnitudehigher than they appear to be. This would only appear to be conceivable if there was a very rare plant or animal speciesthreatenedwith extinctionand accorded avery high value. 5 Ib;BomwanotesthattbeNWDThadurimltr+l ductionof17.8% intbeSSPbeacfitrwithouttbe ngulatod reksresfmm tbe N d SaguRuer~oir.TbcBorrowerfurtberi~diututhat is no possibility for reducing thc size of the wmmaod area. 30. Table 22 givesresults of sensitivity tests to implementation delays. Any future delays in the development of the irrigation command area will not affect the ERR much unless they are delays in the final stage of developing the distributary and on-farm elements to the investmentson themain and branch canals. This is a schedulingissuewhich project management is aware of and which management information systems are designed to deal with. The multi- purpose characteristicsof the project give considerable economic stability because any delays in development of the irrigation system, which in a pure irrigation project would have a serious impact on the economics, would in this project leave more water for the higher value power component. 31. With respectto alternatives.a number of alternativedam sizes, dam numbers and locations were considered by the NannadaTribunal, which sat for ten years. The smalldam alternativeoften suggestedis not an altemativein thesensethat smalldams could replace the Sarclar SarovarDam. Thetypical technicaland economiccharacteristicsof small damsarewell known (sconomic ratesof return have oftenin fact been marginal; forexampletheKarnatakaTanksProject gavean ERR of at most 4%). They cannot in this part of India provide the scale of benefits sought because the number of efficient dam sitesdo not exist, nor could smalldams provide water from theNannada Basin to Gujarat on any scale. Furthermore, their biggest drawback is that it is in pnxisely those years which both people and governmentsare currently most concerned about -- thedry years -- when the value of production and domesticwater isat a premium, that the small damsfailbecause they do not filland cannotcarry water acrossyears. They are a useful complementbut they cannot deal with the scale of India's needs. Groundwater is also not an alternative; it is a complement which has in factbeen designedintotheproject to establish a conjunctiveuse strategp. 6 Conjunctive use u o be d e f d u tbeoptimumur of sllrfre wltcr, goundw.tn .Dd&all under coditionr what tbe only significmt practical public interventionia tbe way that water ia diamibuted in time and space in the aurfocc system. --... WARMADA RIVER DEVELOPHEWI-CUJARAI ..._.-.--....--...---.---_..-~. Update o f Economic A n a l y s i s D e r i v a t i o n o f Econnnic P r i c e s o f l r n d a b l e Crops n r d F e r t i l i z e r s ....... ... Paddy Wheat Cot t o n Cot t o n G r o m d n ~ ~tl rl oi g e n Phos. Potash ( m c d i u n ) ( s h o r t ) _ _ _ _ . . . . . . . - . . . . . . . . . . . . . . . - - . . . . . - . . . . . . - - - . - - . - . . - - . - - . - . - ~ . - . . ~ - - . ~ - ~ ~ . ~ - ~ ~ ~ ~ ~ . - ~ ~ . . ~ ~ ~ ~ ~ ~ ~ - ~ u o r l t h s r k e t p r i c e 1995 a/ O l r a l i t y a d j u s t m e r ~ t vor Irtnarket e q u i v a l e n t I n t e r n a t i n n a l , s h i p p i n g C I f f f O B p r i c e , B m b a y C I f / f O B p r i c e , B d a y b / D n n e s t i c h a m i l i n g / t r a n s p t . P r o c e s s i n g r a t i o c / v a l u e o f by.product d/ P r o c e s s i n g r a t i o b y - p r o d u c t ~ r e c e s s i n qc o s t v h o l r s a l e p r i c e raw p r o d u c t l r a n s p r t f r o m farmgate farrrqare p r i c e say I / lBRD comnodi t.y m r i c e f o r e c a s t s , Novcrrber 1992, In c o n s t n n t l W 2 USS. V h r a t : Canadien No. 1, W e s t e r n Red S p r i n g , FOB l h u d e r Bay Rice: I h a i , m i l l e d , 5 % broken, FOB Bangkok C o t t o n : ( o u t l o o k "A,' I n d e x ) , niddl i n g (1-3/12"), CIF Europe Groundnut$: any o r i g i n , s h e t l e d , C l F Europe N i t r o g e n : Urea, bagged, 100 W.U. Europe Phosfl~ate: l r i p l e S u p r Phosphate, b u l k , FOB US Cul f Potash: M u r i s t e o f Potesh, b u l k , TO8 Vancouver b / At RS p e r U S I C / N u t r i e n t c o n t e n t l o r f e r t i l i r e r s d/ C o t t o n seeds l o r cotton, d o m e s t i c w h o l e s a l e p r i c e e s t i m a t e , in economic terms I R O I A -.... HARMADA RIVER DEVELOPI4EMI-GUJARAT .--.-.......--..--..*-.--....-.-. Update of Econanic Annlysis .--.---.-.--.-...-...-.---- Sunnary o f P r i c c s for Economic and f l n a n c i a t Analysis (in constant I992 ruppees) . . . . . . . . - . - - . - - ~ . - - - - - . - . ~ . - - ~ . - . - - - ~ . . - - - . . - - - . - - - . . ~ - ~ . . ~ ~ . ~ ~ ~ . ~ . ~ ~ ~ ~ . ~ . Seeds ----.----.---- Econanlcl i n a n c l a l EconmIcFlnanclnl . . . . . . . . . . . . . . . . . . . . .(Rs/ton)(Rs/ton). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Rs/kg) (Rslkg) Crops ..... Paddy 4,320 4,164 6.68 4.52 Wheat 4,550 4,620 5.68 4.73 Sorghun ( l o c a l ) 3,550 3,548 4.52 4.52 Sorghun (hybrid) 3,335 3,333 14.62 18.28 Pearl M i l l e t 4,469 4,466 14.62 18.28 Pigeon Pea 9,722 9,715 7.96 7.96 Cram 9,917 9,910 6.89 6.88 Mung Beans 9,006 9,000 12.28 9.03 Clustsr Beans 7,850 9,715 6.36 7.96 C r oundnut 3,270 11,186 14.84 16.13 Must a r d 8,382 9,111 14.84 16.13 Castor Beans 7,930 6,908 13.11 11.40 Cotton (short staple) 5770 12,141 2.46 6.73 c o t i o n (medim Staple) 10,860 14,474 146.22 182.77 Iobacco ('Bldil) 8,146 10,183 0.034 0.04 Sugarcane 404 505 0.24 0.30 Bananas 1,290 1,613 0.28 0.34 C h l [ l l e s 28,800 36,000 189.22 236.53 Ott ions 1,290 1,613 94.61 118.27 Potatoes 1,634 2,043 3.61 4.52 fodder sorghun 215 269 4.52 4.52 fodder Lucerne 378 473 27.52 34.40 W i t rogen 13,770 7,642 Phosphate 12,100 7,642 Potash 9,130 6,209 Carpost 34 43 Labar (person-day) 16.8 25.0 Bullocks (pairday) 52 65 . '3.In.C *. U41I0 a <I a M.l .- - V) 3 0 -, -, S . . . : :U. '= : : : := . : I 19 8 . I I I-. 8 9 * 8 0 a a 0 : 8 8 I e I 8 .- VI C 2 . U c - Y) 0 -8 . . . U .- - u m d Y In In 0 -. a s -. 8 0 n 8 9 B In, 1 Y mm t: .-, P:"" In. -I~~~~O-N-NNNN~~~~~N-QOONN~~QN~~ In* n, ~:K~~~~E~~~K~~~~~~sszs 5; ~.NNomN,Qm~,Qe=~meNm~~~mme_O~~*_O: as ., ., ., ., ., ., ., In 0, ~,NN~.uO.OQQ_OO.==~~=~=_OO._N~=~_O_N_O~Q~.: v, EV I0 In- : ~00000_O0000000m000000000000000. ~~~~o~o~o~~oooooomom~moo~ I l ~0000om0000000000000mY)OOOOOomO, , ~000000000000m0000000000000000. 8 : 1 -- NN ~~~~~~cc~~~~uIuuI .- N 3 c.) 8- - .GL UULLLL~~~W~~~~~~W.U~--mmcmmc~~~~uuEm~J--~-- --ytxr---- L 9 C.- .- -. ;;;.;.; 2uO>-Du L L m.-.-C "" m ' N 000 ~~SS.E.E'E'ECC==~$??~CCUUL~. L am- UUtm-l L l.o, L.-d--- N m ---- 299 . 0 L L . * * U L L -- - ot-22 UUU--.- aaumm-- L L--- LL-L La-C-- . mm -N e. .,m 00 gx.-- L-Up w NN L N- L CC2""La.- uolEL.- - 2 - CZ)?.FL2' L ~3350000 ,'-22.kL.-O .E;;-Dr:uP;S m In -- amooouuaAu. B L mm 2. C NNNNN .'.' - C.--- &=.Err. LD u u 0 2233: --N 0 Brr: 0 LL LmmI IXX.C m",. jL:-G -m- -. O 5: L. .. k 3 - 8 A n I 8 a. m I > U Table 3 INDIA -.--. WARHAOA RIVER OEVELOPHENI-CUJARAf ................................. Update o f Economic A n a l y s i s ........................... C r o p Input and Output Data: f u t u r e w i t h P r o j e c t ( p e r h e c t a r e , l r r i g a t e d c r o p s o n l y ) ............................................................................................. C r o p Season Y i e l d B y - Seeds M P K Corrpost Chemical Labor B u l l o c k s Wlsc. produc t .................... ( t o n s ) (Rs) (kg) (..... kg ..-..) ( t o n s ) (Rs) (mandays(pairday (Rs) ....................................... ................................................. I r r i g a t e d Crops P a M y HYV Khar If 2.OO wheat ~ I Y V Rnbi 3.50 Sorghun HYV Khar if 2.60 S o r g h ~ r nHYV Rabi 3.10 P e a r l H i l l e r HYV Khar If 2.70 P e a r l M i l l e t HYV Hot -seas 3.10 P i g e o n pca 2.seansn 1.60 Gr am Rabi 1.60 G r o w d n ut Khar l f 2.00 Gr o u n l n u t Hot Seas 2.30 M u s t a r d Rab'i 1.50 C a s t o r bean 2 - s e a s n 2.00 C o t t o n m c d . s l a p l e 2.seosn 2.20 l obacco 2 - s e a s n 2.40 I Sugarcane P e r e n n i a QO.00 Bananas P e r e n n i a 30.00 C h i t l i e s 2- seasn 1.30 V e g e t a b l e t o n i o n s ) Rabi 20.00 V e g e t a b l e ( p o t a t o ) Rabt 30.00 I m M e r sorghun Khar If 40.00 L u c e r n e 2 - s e a s n 40.00 R a i n f e d Crops ............. Paddy r a i n f e d a/ K h s r l f 1.125 400 62.5 25 0 0 3.75 0 Faddy r a i n f e d b l K h a r i f 1.6875 612.5 62.5 50 0 0 6.25 0 wheat r a i n f e d R a b l 0.6875 112.5 87.5 12.5 0 0 0 0 Sorghun r a i n f e d e/ K h e r l f 0.9375 187.5 31.25 12.5 0 0 2.5 0 S o r q h ~ nr a i n f e d b/ K h n r i f 0.5 100 31.25 12.5 0 0 1.25 . O Sorghun rfd.HYV R a b i 1.875 275 12.5 37.5 25 0 2.5 62.5 P e a r l m i l l e t r f d . a / K h n r i f 0.8125 162.5 6.25 18.75 0 0 2.5 0 P e a r l m i l l e t r f d . b / K h a r i f 0.875 175 6.25 25 0 0 2.5 0 F i g e o n pea r a i n f e d 2.seasn 0.75 237.5 16.75 12.5 0 0 3.75 150 Gram r a i n f e d Rabi 0.8125 43.75 75 6.25 1215 0 0 0 n u r q r a i n f e d R a b i 0.4375 25 22.5 22.5 0 0 2.5 0 c l u s t e r bean r f d . K h a r i f 0.5625 125 25 0 0 0 1.25 ,O C r o u d n u t r t d . Kher if 1.0625 0 125 18.75 43.75 12.5 10 62.5 H u r t a r d r s i n f e d Rabi 0.625 0 3.75 12.5 6.25 0 0 0 c a s t o r bean r f d . 2 - s e a s n 1 .I75 0 12.5 25 12.5 0 2.5 62.5 c o t t o n r a i n f e d r / 2 - s e a s n 0.5 0 ,17.5 12.5 0 0 2.5 0 I O ~ C C O r a i n f e d ? - s e a m 1 0 18750 125 0 0 5 0 f u r t i e r sorghun r f d . Khar.if 18.75 0 37.5 37.5 18.75 0 2.5 0 ................................................................................................... u n t r R v n r d t r r t v a l o r n d r h e m i c ~ Ic o s t a r e in lO8L p r i c e s . . . , : , 0 ,2:, , :=; ,.-. la- "' -N-OoDDc=uuc~o OONOONQOOOO ;F$$~~F?t,$~~~~f . ---z='=--=LLa " -- s .noZ3~~~onoUXUUIuU-c , . , .---.----.- CCC m~DONNQmNDQum+-mm~O 5s-n %%-LL.c-- GZ~ZZOLZZ LLLmmm C \ XY mmmmmmmmammmmmaaa~ CC QIUCC. -- Lp .. 5 .- """"C YY & OP-UOO-- a en L 5 - :-z .- E L a*--.- Lp 5'E.E =--LET -- &-- qnz .\w XY. --c gz-z-:-sx~ L & x.5.95 N z.jjz.;.;.II: WCCOLZZCC 2 L~PL~:~ 2, -- 5T.C XY u L3 - .':e$ m xn Qm.- c2.55 NNN .' II) ccc- C : .U 2 -22 s-q wm- :-; N- ma- .Y 2 L . - ; : -' 9 3 6 I Tabie 5 - . i -g: uaLLI.or vr3.WL. C. - XCIUU. 8 a .- YY CCULCUCC m9mamm4mu9mmmm~wwm~L LD I..- .-- YY L LO .- .- MY. L .- L N nmzEcroc man (r .- .- .- Table YY L Ln .L.- NNN yu m 6 v, . 4 m .yo mr m v, .- L . . . t w. U (0. 2: c. B .--. ------- YX ZLeZZx mtcmmmoa~m~~m L ZgSEgEESC88 -9 N~V-NNN-~~N r- - LnLLI4CPmL m h YY .-.- -C m on- N . VJa 51.-5,5L n-n-mm- NN ys Y :.%82YE'Y'kk2A~F~:z~= . . -- .~Qf-'n-QP'LO~UOXuu-- l me UUV--SLL LZrCC:C--O LLL 1019 c 99-.--u-w WUQCC. mn 1- YY czacc~Leu=ac~a mmmm0mmm4800m0mUUUm L 9- OOOOOOOOOOOONOOOOO c - \ ~n C -.--- OOOUU.-L3-L3rgO~3 555.EZc~L~pz;g.~ uu~uwc L ma- 48 PO \\ YY L CC U LD -- *--- \\u - Y mam= MY. L 9- Y L g-.- m-C L2e m N man E mmLzLJFLZ --.-. CCJ 6T.E -.- YX -9 a- L zEjUB LB e c2.55 L.&9 NNN . rn m VJ ccc- \2 u m VJ o yc m ',.- 5 ,- Y- L . . . I I Table 7 INDIA ..... NARMADA RIVER OEVELOPHENl-GUJARAI ................................. U p l a t e of Economic Annlysis ........................... f i n a n c i a l Crop Budgets: f u t u r e w i t h P r o j e c t (per hectare) ................................................................................................................ lnputs cross .....................................-................................. Net Net Season Return Sceds N P K Corrpast Chemical Bullock Hisc. I o t a 1 l a b o r Income R e t u r n ................................................................................................................ I r r i g a t e d Crops ............... Pa&y HVV K h a r i f 17,306 Wheal HVV Rabi 16,670 Sorghun HVV K h a r i f 8,926 Sorghimn HVV Rahi 10,642 P r a r l M i l l e t HVV Khnrif 12.588 Pearl M i l l e t HVV Hot -seas 14,445 Pigeon pea 2-sennsn 15,844 Gram Rabi 15,941 C r o d m l t K h n r i f 22,812 G r o u d n u1 Hot scss 26,238 Mustard Rabi 13,667 Castor bean 2.sensn 13,816 Cotton med.staple 2-seasn 36,738 IolL3cco 2 - s e a m 24,439 Sugarcane Perennia 45,850 t Bananas P t r t n n i e 48,375 C h i l l i e s 2.seasn 46,800 vegrtable (onions) Rabi 32,250 vegetable ( p t a t o ) Rabi 61,275 f d j e r sorghun Khar if 10,750 Lucerne 2-sensn 18,920 Rsinfed t r o p s ............. : Pa&iyrainfed~/ Khar if Paddy r a i n f e d b/ Khar if Wheat r e i n f e d Rabi Sorghun r a i n f e d a/ ~ h airf Sorghun r a i n f e d b/ Khsr i f Sorghun rfd.HVV Rabi p e a r l m i l l e t r f d . s / Khsr i f P c a r l m i t t e t r f d . b / Khar i f Pigeon pea r a i n f e d 2-seasn Grnm r a i n f c d Rnbi n m g r a i n f e d Rabi c \ u s t c r b a n r f d . Khar i f Growdrwt r f d . Khar if wustard r a i n f e d Rabi castor bean r f d . 2-seasn c o t t o n r a i n f c d c / 2-seasn ~ ~ h a c cr aoi n f e d 2-seasn f c d l e r sorghtrn r f d . Khar if ......................... ......... 999 C om- C OhONO 93999 u-- Page Table 1 9 of 3 . ,.. -- .=, . ..Q. , . : . .- . .: .=, . ,a, '0: -0. .a. :=: I a $0. ..a ..s I , I 0 ,.#.a- m.PC, , IL;, Ib. ,## ,., '"1 I a.0,a. .a,. 0 0 .,a 8 ,a. 0 I s ,-.,,oo~~u~o~-u , 8 a,, a a no. ,,I 1-1 10. =.a. c .- m*a, wo msa- 0. . - - - .C' ,O# . ~a~O-OoOOOC00 . ::: . . I a .c m lclNh.Oh*Nom.om ,a n 4-. 101 .-.Ocmm*~O*NN 0 ,-, .oo .cl~~m~u~O--u - L n . . . - b4.S -, a : . . -- 00000000000 lh*ohQo-mJ.o :OOOOOOO~OO~ : I I 8 ; I 8 ' I :~~0~000000 s so-00000b00 I 0 ~OOOO~OOO~~ ~ONO~Ooo~~~ 1 0 m ubW~QO-CNa 0000000099 N.O*rc*NO.O.Om OO~~U~O~~W -- --C CC C C - IN- m m * n U e m - N 0.: =': Q 0.; =; 0.: Q; 0: < 2: N' 0: 0: 0: m' 9: =: 0: n1 52: m' 0 ' 0 Page Table 2 9 of 3 .................................................................................................................. Cont inued Region 11 Region 12 Region 13 Total CCA Crop ..-.-........-...*. ..-.-.-...--.--.--- ---.-.-.----..-.--- ---------------.--- IR RF 101 IR RF 10T IR Rf 101 Id RF 101 -...--..-......-..-.-.----..- Rice 0 .0 Wheat 2 .O Sor ghun 0.0 Pearlmillet 0.0 Polscs 6 Oi lsecds 0.0 C r ourdnot 0.0 1obcco 0.0 Cot ton 3.0 fodder Crops 0.0 Other Crops 1.O A l l Crops 6.0 102.0 108.0 10.0 96.0 106.0 6.0 95.0 101.0 0 92.0 105.0 .................................................................................................................. ONOON99999 Page Table 1 10 of 3 .., ..- ... : . : :?: , : I0. em.=. 0. *Cn -9. a,. . .-OM..OU~~-Y-OQQ-? 1 so. a,. a,. I .& a,,maa. 5 . . -. : ~a~0000000VI00 : ICI I ,o, : . c : : : .*Qhrho-e-VI ~0000000000 , :?==?=????? . I I I 9999999999 Ou~m*-OmQu ?????????? .. ...... -IV VI Q . Page fable 2 10 of 3 u-0;3: .- OWLc L U L 0n VI U L 0 n ur Page Table 3 10 of 3 - ztu10* c 5::: . = 4. P: x;X1L a.O).cCo :O:n LY.-.Lu P:. n =- on.-# L.U. I. LLJ~C*~~~ C. XI -,,.-* < -1 P:. C 0 1LYIrUIm.P:. 8 I v c 5: COD-0 ma- V), V)1 - - - .- - - I ' a =..: aII,U m,. 0 c m U. 5 OLIO). UCI C- ;O;N. I O)-I a1 L 0 U U - a:=: . ca u c. . . ' . .o. . . -- , . : . . I I .a, .a,, I=. I0,. ..- 'CS Ira m.a. ,-,~,d&~dddd~&d~dodoodddd&h;-0. 1 #a#, .ma I .at .O)I '-*b.00Q0n0m000000rrl0OOOOONN .C, 101 0. * *,a 9 #a. s, 000 0,. OR, 1 'CI ,I, UU I I m #,I 1 .a, 0.0 a .P:, a I '-'u~00~0h00eNOO-ONO00000~~ 810, )I, 8.0 0 0 I ca *a'-Q-mNmmnOmOO-OOneONN-- . . -. . - 08 c meQ:0 u m. , . : : . - I 8 -C.mNmNNm.O-OmOOh-~~-O-UP))r) - '~:=~n~~m~m0m00N000~ONNNN I*, I0.h.- .~.-Q~~~m.Om0m00:k0~~dNkn'n ' .O ~-~-m-.Ohm~rrlOmOONrrlOO-Oh;N-- , I ~~~~0o~~0~~0o00~000000000 I0 ~~~~NN&~~&~oo~o-~OQOOOONN I P:. u 1, ~O.NN ~eohrn~O-h~~-n-n-N.OO.O-rt-hh IC. u I, IC. 1 naoh0-0hhN-Nn-N-O.OC.O--~-- I ICI I. 0 . u (. ' . . . . ........... ~ooooooooooOoooqo~oqooq -- , - ' , , : :?????????O???O????Y"99 . ....................... , - .--- I : '??~??O???O????????""99 I 0 '00000000000000000000m~ ~oo~~oo~ooooo~~~~~~~""qq '99933339~93????3?O???? '9993?99393?O????0000?0 , '99399999993993???????? I I CV- ~~~~=~~~o~oo~~o~oooooo~yy I Odr;C.n;dch;di.d&&&&&&d&&:: I I I v .0000000000000000000000 I 8--- 8 I I . oorrlo-oooooooo-~~~~~~~~ .~00000000000000000~000 I I I 0 1 NN ~~ooo~~o~ooo,oooooooo~~~~ I I - o~ooo~ooo~~~~o~~o~o~~ NN zmuu mnr- .---- C .- - xa zm C .- - - - a x - On c -n c a m - - - - 9DO C - - -9 O n u e n .C - - - 'a e - - 'a n N N - - 0 'a c- 9 0 n -. %: - - 9: 0. -, -, qj 2: n. q: m. -: 0 ? ?: ?: -. -. 9: 3: C. e *I -' 9: C C hl N eu 2: 9 - -I -z -I 0. -* 0.: 0 ho 0: rrl N .O' m h' , ; : 0 4 : I I 9 1 0 8 8 Page Table 1 of I1 3 Page Table 2 I1 of 3 .c>umccaooo=uuu-wmu>>-3. .D~OO~~~-LLL~~~OOJ~~UU .---- - L C .- %a .cw c - s C u a UUO W~ o~ Page Table 3 11 of 3 INDIA ---.- HARHADA RIVER DEVELOPHEMI-GUJARAI .---...-----.------.-.-.---.---.. Update of Economic Analysis -.--.-----------.---.-...-- Estimated Average EUater Balance (Ru(Hil l i o n d) _ . _ _ . . . . . . _ _ . _ _ _ _ _ . . . - _ . . - . - . . - - . . - - . . . - - - - - - - - . - - - . - - . - - . - - ~ . ~ ~ ~ - - ~ ~ ~ - - - ~ - . ~ ~ ~ Region 1 Region 2 Region 3 Region 4 Region 5 .-..-...-....-.---- -.----------------.----.------------------------.-------- - - - - - . - - a * - - - . . - - * - IR R I 101 IR R F 101 IR RF 101 IR RF 701 IR RF 101 _ _ _ _ _ _ _ _ . _ _ . . _ _ _ . . - ~ . . ~ . - . . - . . . . - - - - - - - . - - - - - - - - - - - - - - . - - . - - - - . . - - . - - . - - ~ ~ - ~ ~ ~ ~ ~ Present ....... Cross r e t u r n 10,954 3,491 4,267 11,720 3,820 6,891 11,534 3,266 4,043 11,946 2,913 3,275 11,204 3,546 6,599 l n p t t cost 5,217 2,129 2,471 5,840 2,174 3,631 5,616 1,8n 2,228 6,242 1,806 1,984 4,941 2,215 3 , 4 6 6 Wet r e t u r n 5,757 1,362 1,796 5,880 1,646 3,260 5,918 1,393 1,814 5.704 1,107 1,291 6,263 1,331 3,136 Labor 1,852 1.706 1,770 2,199 1,590 1,930 2,047 1,605 1,661 2,261 1,774 1,794 1,858 1,072 1,506 Crop i n t e n s i t y 9 94 103 35 n 108 9 92 101 4 96 100 32 85 117 future VOP ......-..- Cross r e t u r n 13,155 4,189 5,568 14,064 4,584 9,706 13,041 3,919 5,525 14,335 3,496 3,930 13,445 4,255 8,598 I n p ~ tcost 6,521 2,662 3,282 7,300 2,718 5,272 7,020 2,341 3,113 7,803 2,258 2,479 6,176 2,768 4,617 ~ e rte t u r n 6,624 1,528 2,287 6,764 1,866 4,514 6,821 1,578 2,412 6,532 1,238 1,450 7,269 1,487 3,981 L ahor 2,222 1,202 1,381 2,658 1,251 2,069 2,364 1,On 1,299 2,714 1,016 1,084 2,308 1,200 1,061 Crop i n t e n s i t y , 14 89 103 51 57 108 15 88 103 4 96 100 38 82 120 rut11re UP ......-.- Gross r e t o r n I n p t cost Wet r e t u r n Labor Crop i n t e n s i t y .-..-.....-......- - cum-.-.- --- - OQOO mm~e~ ummNQ - - J$2" mom* mnNDm r >:::? 2s 2: an-"?& L. U. * V-xdu :ii-,9g: KG- LCOIPL. Ln-LL >-C 4.. Y .- -- C. 5: yl. . I I Page Table 2 12 of 3 lable 12 Cont 1n1ted . . _ . . . . . . . . . - _ . . . . _ . . . . - . . . . . - . - . - . . - . - . - . ~ . . - - . - - - - - . - . - - - - - . . - _ - _ - - _ . ~ ~ - ~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ ~ - - ~ ~ ~ . Region 1 1 Region 12 Region 13 lots1 CCA .----..-.-.-.-...--...-.-------------- ----------------.-- IR Rf 101 IR R f TOT IR RF TOT IR RF TOT ...~....~....---....-~.--.--.-------.-.----.-.-.--.-..--------.----.---.--~-----.-----.----~---.-----*------- Present ....... Crozs return 11,325 2,706 3,439 9.617 3,336 4,163 11,002 3,019 3,581 11,193 2,984.' 4,200 Input cost 4.417 1,741 2,041 3,412 1,907 2,249 5.975 1,892 2,156 5,231 1,968 2,494 Net return 6,900 961, 1,398 6,205 1,367 1,913 5,908 1,126 1,424 5,962 1,016 1,706 1ebor 1,521 839 947 1,211 981 1,063 2,150 908 992 1,918 1,064 1,231 Crop intensity 6 102 108 10 96 106 6 95 101 13 93 105- l u t u r e VOP .......... Gross return 13,590 3,247 4,638 11,541 4,001 4.995 14,259 3,622 4,297 13,441 3,559 5.379 Input cost 5,522 2,177 2,751 4,265 2,484 2,811 7,468 2,365 2,695 6,554 2,454 3.274 uet return 8,069 1,070 1,888 7,276 1,517 2,184 6,790 1,257 1,602 6,888 1,105 2,105 1abor 1,271 1,145 1,283 1,027 1,269 1,321 1,095 1,163 1,171 2,305 1,153 1,414 Crop intensity 10 101 1 1 1 10 96 106 6 95 In1 16 91 107 future UP ...... .. . GI oss return Input cost Wet r e t u r n 1abor Crop Intensity ........*...--. --... WARHADA IVER DEVELOPMENT -CUJARAI k -....-..---.---.-......---.------ ' , Update of Economic Analysis -.--.----.--.-..-.--------- Ist imat'ed Averag F IVnter Balance (Ru(Hi I l [on m3) .............-.--...-.---.-.-*-------.-.........-----.~.~.~~.- --..--.-----.._-..--.-.-.-.--.----------------..-.----------.----- Region 1 Region 2 Reglon 3 Region 4 Region 5 -.-.--..-..----.... .--.----.-.-.-.-.-- ---------..-..-.--- --.-------.-------- ...... -... - - . . .I-R. . - -R - . . .101. - - -I-R - - -RF- - - -101- - - - - - -R.F- . -101. . - -IR- . ~RF~ ~101~ ~ ~ ~ ~R~ ~ ~ ~ ~ ~ - ~ ~ - ~ ~ ~ ~ . . ~ F IR . - . . IR F 101 Present ...-... Cross return 13,212 4,823 5,722 14,803 4,656 8,580 14,655 4,386 5,354 15,921 4,214 4,682 12,744 4,081 7,547 lnplt cost 5,906 2,655 3,027 6,700 2,704 4,319 6,519 2,374 2,771 7,286 2,289 2,489 5,487 2,T36 4,081 uet return 7,306 2,168 2,695 8,103 1,953 4,262 8,136 2,013 2,584 8,635 1,925 2,193 7.257 1,345 3,466 Labor 2,764 2,547 2,643 3,282 2,373 2,881 3,056 2,395 2,479 3,375 2,648 2,678 2.773 1,600 2,248 Crop intensity 9 94 103 35 73 108 9 92 101 4 96 100 32 85 117 luture WP ..-......- Cross return 15,854 5,787 7,370 17,763 5,580 12,244 17,587 5,264 7,270 19,106 5,056 5,618 15,292 4,898 9,827 Input cost 7,382 3,318 3,987 8,375 3,379 6,197 8,149 2,967 3,833 9,108 2,861 3,111 6,859 3,420 5.411 Met return 8,471 2,469 3,383 9,389 2,208 6,047 9,437 2,296 3,437 9,998 2,195 2,507 8,434 1,478 4,417 Labor 3,316 1,794 2,061 3,967 1,867 3,087 3,528 1,602 1,939 4,050 1,516 1,618 3,444 1,791 2,778 Crop intensity 14 89 103 51' 57 108 15 88 103 4 96 100 38 82 , 120 .......- . Cross return, 25,647 5,402 33,841 25,963 4,507 35,455 25,100 5,021 30,572 15,997 5,408 lnprt cost 8,961 3,231 12,011 9,218 3,203 12.T32 8,366 3,211 10,560 5.670 2,894 Wet return 16,687 2,171 21,830 16,745 1,303 22,724 16,734 1,810 20,013 10,327 2,514 Labor 4,175 1,616 5,613 4,184 1,875 5,111, 3,676 1,953 4,770 3,785 1,213 Crop intensity __________.__._.__.~~~~...~...~~~.~..~..~~~~-~-~.~-----...-..-.-.----.-...--.- 129 14 143 135 9 144 117 24 141 46 61 '"I" 09 0- In w . 1-1 I..I I ..I ,I* st* -0.I*. . Page Table 2 13 of 3 '---*.%S-00uh0 CCONQ mmN- coon= 00UOPl, mnuo- --. ' , : Page Table 3 13 of 3 INDIA .*-.- WARMADA RIVER DEVELOPMENI-GUJARAt ...--..-.-..--.-.-.*----...-..--* Update o f Economic Analysis ---.--.-.----------.-..---. Estimate of Econanic Value o f energy from Hydropouer Ccnpnent ......-...-._.......-..-.-.----.-.---.------.-.-.-.---..---.---...---.-.- 1. E c o m i c t e r i f f based on u i l l n i e s s t o pay (Rs/kl.lh) s 2.136 2. Adjustment for System Losses snd A u x f l i o r y Conscription System losses 18.00% of energy sent out AuxiI l o r y conscript i o n 0.50% of energy genrated Adjustment factor: 0.816 Average financial value at busbar (Rs/kUh): 3. Economic Vslue RS 1.741 x standsrdconversion factor (.a) = Rs 1.39 0.00 5 . Mldnlght power cost (Rs/kuh) 0.384 ........--..-..-........-------....-.-.-..-.---.-.------.---.*--...-.-----------.----.-*- r/ Aversge value of benef Its for the uestern region program analysis, second Wahsrashtrs Pouer Project, adjusted f o r i n f l s t ion. - 4 c L 0. E ess agag 'W z # a a= I L pa r SAT! 2-f- sn igg ~IJ s~~s .hD-g S q pqz L - a- '"9ZS ?8518 4~,g*58 I 9 I(:- 4 s f g , 31 3 $E 9 r.0 (Page Table 1 I5 of .- 3) - -- . XI. $~:g~e ' 1.i . 1; a:bw 6: 1i Y r: . : i a. qlr2~ v-2 -it- "165. l 1'I 8,0- O -t a mwr rn sr, w- a l~ili @ Y XIS#- s~BP; f .. ma Y rn ET 0- u- Z [:!$& rb~~g ;e 1s 13 rn- uv -=9 I: rI +'i i.' C -I PI I I I a I# 1 I I 11,. . = -. e .. . J I * as;kg; I I hi 1i -31 *"j L I I INDIA ---.- NARHADA RIVER OEVELOPHENI-GUJARAI ..--..----.-----.__.*-.----*--.-- Update of Econunic Analysis .--..-..--.------.-.-..---- F inancial Investment Cost by Components by Year ,______._._.._...._.-.-..-...---.-..--.---------.-------------..-.-..-..-------.-. (Rs H i l l Ion) 1984 -.---.-.. A. M a i n dam 783 B . Rockfit dykes 6 l i n k charnels C . Riverbed pouerhouse 16 D. Hain canal 828 E . ~arudeshuaru e i r I , Canalhead pouerhouse 8 G. Irsnsmisslon system n. Branches 110 I. Distribution L drainage systm 90 Drefnage 8 g r o u d uater deve. J. En route storage K. c m n d area develapnnt I. ~ y d r a n t e o r o l o g i c a lnetuork n. Training and 1 A - dam 6 canal 4 ~ . ~ a n d ~ q u i r t i o n L r e h s b i \ i t a t i o137 t o t a l baseline cysts ._._..._..._.______--.--....---...---.-...--.-.-.-.-.------.--.----.---------*---..-.----.-------.-------.-.---.- 1974 622 992 1000 1304 1461 1945 3569 5204 7485 15413 18897 21337 note: at current p r i c e s before 1992, constant l W 2 prices afterwards. . . : I 8 . -, -..- 13, ,In# .C.V .m :~ohUDODhInmNUhmu - *% UN U*-Q C -- .or) NO* -moo-O $as-2 $ -. z: m. In. In *I t Page Table 2 16 of 3 IHOlA Table 17 - - - - - IARHADA RIVER DEVELOPHEWI-CUJARAI .......-...-.-.--------.-.-.-.-.. Update of Economic Analysis -...--.-.---.--.--..--*-.-- Econanic Investment Cost b y Carpnents by Veer ..-....-..---.-----------.-.-----.--.-....----.------- (Rs M i l l i o n ) 1984 1985 1986 1987 1988 1989 l w o 1w1 1w2 1w3 1994 1WS 1W6 1997 1998 - - - - . . - . - . - - - . - . - . . . - . - . - - - - - - - - . * . ~ ~ ~ . ~ - ~ ~ ~ . ~ - ~ . ~ ~ ~ ~ ~ ~ ~ ~ ~ A . Hain dam 1,650 305 244 226 345 250 504 707 1,057 1,248 1,462 1,111 841 516 4 0 4 8 . Rockfil dykes L l i n k channels 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 t. Riverbed powerhouse 33 50 108 52 415 128 97 148 239 630 3,833 2,865 8 3 8 ' 459 438 0 . Hain canal 1,744 469 244 205 469 748 1,075 1,360 1,904 1,W3 4,242 4,830 4,766 3.311 2,262 E . Garudeshwar weir 0 0 0 0 0 0 0 0 0 468 399 294 0 0 0 I . Canalhead pouerhouse 16 52 59 30 117 321 29 157 130 280 302 320 258 139 5 C . lransmisslon system 0 0 0 0 0 0 0 60 101 126 121 96 0 0 0 H . Branches 232 66 80 96 216 189 358 559 660 1,008 1,890 3,188 6,501 7,983 7,371 I. Oistrihutlon L drainage system 189 33 28 39 35 64 134 245 219 740 870 3,318 4,484 4,738 4,562 Drainage 6 ground uater deve. 0 0 0 0 0 0 0 0 0 364 364 364 546 546 546 J. En route storage 0 0 0 0 0 0 0 0 0 0 0 0 0 43 72 K .t m n d area developnnt 0 0 0 0 0 0 0 0 0 15 290 528 766 850 1,170 L. Hydrometeorological network 0 0 0 0 0 0 0 0 0 111 115 92 89 0 0 n. l r a i n l n g end 1A- dam L canal 8 20 24 20 14 11 11 10 10 10 6 3 3 3 3 N. Lard acquistion 6 r e h a b i l i t a t i o n 0 . Rejasthan branch L d i s t r i b u t i o n P 4 lots1 Project Costs 3,871 --.- .--- .787 W4 .-1. -668- - - 1,610 --.-1,711 ..-- ---..---4,320- 2.207 3,248 6,W2 13,894 - - - -.-- - - - - 17,009 19,090 18,5BB 16,920 - - - - -.-. -.-- -.-- _._____...__..___......~..-~...*.~.-~-..~~..~~-~-.-------.-.-...-.---.------------..---------- i -. g:z ~~~oor-ouo~u~-amon N. 0 0' -~oooooooo~oonon 0 C Y. LnN In QN*WN u-a mu h-m - NE N- N h o 2 - N 0.. -. hm N. In. .. 2;: . I. . . a 4 I * 0 a Page Table 2 17 of 2 INDIA ---.. Table 18 WARMAOA RIVER OEVELOPMENl-CUJARAI ..-.-....-.*-.-.-*----------...-- Update o f Ecwunic Analysis Sardar Sarovar Dam and Power Conpnent t imated Recurrent Operat ion and maintenance Costs .--....-.-----.--...*.-...----.----.---.--.-....--. (Rs M i l l i o n ) lnvesrrrrnt Schedule ( u i r h p r i c e Contign.) 2,578 1,010 2,097 1,929 1,843' 1,534 1,339 1,624 2,088 3,592 7,560 5,933 3,170 2,182 2,012 1,092 604 Accurulotive Investment 2,578 3.588 5,684 7,613 9,457' 10,990 12,329 13,953 16,041 19,633 27,193 33,126 36,296 38,178 40,490 41,582 42,186 Cperation E Maintenance Rarc/factor a/ a/ eased on s rate of the curulative investment a t i n i t i a l operation in 1993 and increasing t o 0.51 d e v e l o p n t i n 1997. h/ Including a m u s l t t a l costs and odM costs. ONON. "NO" -- . n 0.u-m ?so? . n n ; : ON 0 om*: -m me. hi* n : - --sop ?'?='. - - ' : 02" hi'; : Page Table 1 19 of 2 financial ......--. fstabl ishmcnt Costs 544.6 553.2 554.5 554.5 554.6 Camxnicat ionsltontrol costs 22.4 22.4 22.4 22.4 22.4 Well Maintenance Costs 8.6 10.9 12.9 14.2 15.2 lotal M M Costs 575.6 586.5 589.8 591.1 592.2 Energy Costs total Annual Costs Econanic ........ Establishment Costs 435.7 442.6 443.6 443.6 443.7 tannnicat ions/Control costs 17.9 7.9 17.9 17.9 17.9 well Hainttn~nceCosts 6.9 8.7 10.h 11.4 12.2 Iota1 OW Casts 460.5 469.2 471.8 472.9 473.8 Energy Costs t-' lots1 Annual costs ul h) -.-.- NARMAOA RIVER DEVELOPMENT-GUJARAT Update of Economic Analysis ........................... Other Benefits and Costs ---------.------.------- (Rs. Mil lion) Other Benefits and Costs (M Rs) ---------.--------.--*------.------ Lard Acquisition Dnm and reservior Agriculture Forestry-cost Forestr harvestlng Resettlement Cost Total reservoir Comnand control ere0 Totsl lend Nermda Sagar dam cost sllocstion Environmental Benefit costs Net Fueluood (net) Fishery benefit '(net) -------------.-.--------------------------.---.----.-------------- Othcr Rcncfits nnd Costs (H RR) .-.-.----------------------------- I n d Acrlr~lkltlon Dnm nnd r e s ~ r v i o r Agriculture rorcstry-cost rorcstr harvesting R r s e t t l e w n t Cost Totnl rrscrvol r Comnnnd control nrea TotnI lnnd Unrmndn Sngnr dnm cost nllocntlon r n v l r o ~ n r n t n l Rrncf l t costs IIct rucluocd (net) r i s h e r y b n e f l t (nct) 22: B -. L-L 55: 3- C' OLO 008YC A- .w, -01. c >:.r2 r.C n * I 1 t I , 7 I .. J. e 5 . -:.I c . . I . I,, r i . I i i .I ; I I : i i i ; : I:' , ..I I LII ,.I Ill ! la1.1@ 11 Ill 114 1 I I. 111 Ill I I*, Ill Ill Ill It0 r I I 1 Ill 111 I,. 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Группа Всемирного банка · Project Completion Report
India - Narmada River Development, Gujarat Water Delivery and Drainage Project (Vol. 2 of 2) : Annexes to part I, and part III
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