Turkey - Drainage and On-Farm development project

 Drainage and on-farm development project Report No: ; Type: Report/Evaluation Memorandum ; Country: Turkey; Region: Europe And Central Asia; Sector: Irrigation & Drainage; Major Sector: Agriculture; ProjectID: P008961 Turkey: Drainage and On-farm Development Project (Loan 2663- TU) The Turkey Drainage and On-farm Development project, supported by Loan 2663-TU for US$255.0 million, was approved in FY86. US$80.0 million was canceled in 1994 when the project was reduced in size, and another US$56.9 million was used for expenditures under the Igdir-Aksu-Eregli-Ercis (IAEE) Irrigation Project (Loan 2433- TU). The loan closed on June 30, 1995, three years late. US$1.3 million remains undisbursed pending settlement of the special account. The Implementation Completion Report (ICR) was prepared by the FAO/World Bank Cooperative Programme on behalf of the Europe and Central Asia Regional Office. Appendix B is the borrower's contribution to the ICR, and Appendix D contains the borrower's comments on the draft ICR. The main objectives of the project were to rehabilitate and complete drainage and on-farm development works serving 668,000 hectares in the south and west of the country and to strengthen the institutions which support the subsector. The project was the first of two phases of investment in the core irrigation and drainage program agreed under an earlier agricultural sector adjustment loan (Loan 2585-TU). Components were surface and subsurface drain construction; reclamation of saline land; construction of feeder roads, offices, workshops, and warehouses to support operation and maintenance (O&M) of the drainage system; upgrading the facilities of reclamation research stations; studies to prepare a second five year time slice of drainage works; and staff training and technical assistance. About half of investment costs were to be recovered from beneficiaries. The project design was overambitious and of unsatisfactory quality at entry and was redesigned in its third year. As a result much less investment was required than assumed at appraisal. Despite the project being reduced to a quarter of its original size, implementation still took three years longer than the unrealistic appraisal schedule. Implementation problems included slow procurement; poor performance by inexperienced contractors; uncooperative farmers, since they had not been involved in the planning and implementation process; and shortages of counterpart funds. The surplus funds arising from the redesign of the project were used to finance irrigation works under the IAEE project. That project had become under-funded as a result of the Bank's decision to increase disbursement rates as a response to Turkey's need for foreign exchange following the Gulf War. The revised project eventually met or exceeded most physical targets, with the exception of subsurface drainage works which met less than half the revised targets. Institutional strengthening components were completed largely as planned: staff training was carried out and research stations were upgraded. Cost recovery reported in the ICR was unsatisfactory, with under half of O&M charges being collected. Recovery of capital costs is not yet due. The reestimated economic rate of return of the project is satisfactory at 21.6 percent and is similar to the appraisal estimate. However, it is based on an analysis of a small sample of subprojects and the method of estimating drainage benefits is inadequately documented. During the later stages of implementation, the government and the Bank agreed to use surplus loan funds to promote and implement a program to turn over responsibility for O&M of irrigation schemes at the secondary canal level to Water Users Organizations (WUO). Progress exceeded expectations, and responsibility for O&M for about half of the public irrigation area has been turned over to WUOs, and about 75,000 farmers benefited from the project_80 percent of the appraisal plan. This is an impressive start to giving farmers more responsibility for O&M of irrigation infrastructure. However, the ICR does not discuss the O&M performance of WUOs, nor cost recovery by WUOs_on which O&M depends. In agreement with the ICR, the Operations Evaluation Department (OED) rates outcome of the revised project as satisfactory and institutional development as substantial. OED rates sustainability as likely (as did the ICR), given subsequent information from the Regional office which reduces uncertainties in the ICR over cost recovery and maintenance aspects. OED agrees with the ICR's ratings of Bank performance as unsatisfactory during preparation and appraisal, but satisfactory during supervision since good use was made of surplus funds in completing IAEE project works and in promoting farmer involvement in irrigation O&M. On balance, therefore, OED rates Bank performance as satisfactory (in agreement with the ICR), after a poor start. The main lessons learned are the need for engineering plans and consultant recruitment to be well advanced before such projects are approved and the critical importance of beneficiary participation in the design and implementation of schemes which directly affect their land. The ICR is unsatisfactory, among other failings, in ignoring the project's unsatisfactory quality at entry; in reaching positive but unsupported conclusions on the environmental impact of drainage effluent disposal; and in not discussing the performance of substantial consulting services (US$13.8 million). An audit is planned jointly with the Igdir-Aksu-EregliErcis (IAEE) Irrigation Project (Loan 2433-TU).