India - National Water Management Project

 National water management project Report No: ; Type: Report/Evaluation Memorandum ; Country: India; Region: South Asia; Sector: Irrigation & Drainage; Major Sector: Agriculture; ProjectID: P009846 The India National Water Management project, supported by Credit 1770-IN for US$114.0 million equivalent, was approved in FY87. After an extension of one year, the fully-disbursed credit was closed in March 1995. Total disbursement was US$130.0 million equivalent because of the SDR changes in value. The Implementation Completion Report (ICR) was prepared by the FAO/World Bank Cooperative Program and finalized by the South Asia Regional Office. The borrower made extensive comments on the ICR and these have been incorporated. The objectives of the project were to increase agricultural productivity and farm incomes by making public sector irrigation more reliable and equitable. To achieve these objectives and facilitate replication nationwide, the project planned to help the central Ministry of Water Resources and three participating states in the south to develop institutional capacity to change irrigation from demand to supply-based operations, implement and monitor improved operation and maintenance (O&M), and provide low-cost scheme investments to upgrade infrastructure in 16 irrigation schemes covering 460,100 ha. It was expected that these pilot projects would be replicated in other states and funding for additional schemes over 123,00 ha was provided. Almost two-thirds of the project cost was for engineering scheme improvements and 12 percent was for incremental O&M, engineering and administration. The balance of project costs was allocated to institutional strengthening, training, and special studies of water management. This ambitious project, which was poorly designed and implemented, failed to meet most of its objectives. Although its objectives were sound, beneficiaries were not consulted about the change to a hydraulically complex supply-based irrigation system predicated on the conversion of wetland to dryland irrigation. Irrigation departments were not conversant with the new principles of system design and operation and only three of the initial 16 projects were fully designed at appraisal. Supporting agricultural extension was largely ignored. Comprehensive training programs designed to address these issues were largely unsuccessful because of high turnover of staff, fragmented training efforts and inappropriate institutional restructuring. Delays in counterpart funding allied with requirements for Bank approval of individual scheme design slowed implementation. Concerned at low disbursement rates, and ignoring growing implementation problems, the Bank agreed to government’s expansion of the project to include an additional six states and 80 subprojects which increased the project area to 2.18 million ha. Overall costs to complete the enlarged project far exceeded approved funding and the borrower states that the Bank led them to believe these costs would be covered by a follow-on project. Only 32 of the 96 schemes initiated were completed. Actual area benefited was only 10 percent of the appraisal targets. Infrastructure improvements were frequently random and did not improve overall system performance. Anticipated improvements in cropping patterns, cost recovery and O&M targets were generally not achieved despite project cost overruns of 148 percent in nominal rupee terms and 11 percent in US$ terms. As a consequence of this lamentable performance, the economic rate of return fell from 38 percent at appraisal (based on three projects) to 11 percent (based on nine projects) at project completion. The Operations Evaluation Department (OED) agrees with the ICR on the project’s ratings. The project outcome is rated as unsatisfactory because improved water management and crop production was achieved for only a small portion of the target area. Sustainability is unlikely because top-down water supply management is contrary to traditional irrigation practice, beneficiaries do not participate in scheme redesign, and funding of O&M is far below requirements. OED agrees with the ICR’s rating of institutional development as modest; there are few irrigation departments that demonstrate improved capability to produce workable operational plans which accurately reflect projects’ cropping calendars, agronomic constraints, beneficiary participation, and concepts of sound water management and O&M. Bank performance is rated by the ICR as unsatisfactory primarily because of ineffective supervision but OED believes that appraisal was also inadequate and premature. In particular, project designers failed to take account of lessons from the failure of a similar project (Andhra Pradesh Composite Irrigation Project, Loan 1251-IN).  There is one lesson. Introduction of new irrigation water management concepts is a complex institutional and sociological venture which is better tested through a few small pilot projects that emphasize participation of all stakeholders. The ICR is satisfactory, very comprehensive and a plan for future operation is included. An audit is planned.