Document of The World Bank Public Disclosure Authorized
Report No. 17013 MK
STAFF APPRAISAL REPORT Public Disclosure Authorized
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA
IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT Public Disclosure Authorized
October 1, 1997
Agriculture and Regional Development Operations Central and Southern Europe Departments Europe and Central Asia Region Public Disclosure Authorized CURRENCY EOUIVALENTS As of July 21, 1997
Currency Unit = Denar (Mdenar) US$1 = 55.53
AVERAGE EXCHANGE RATES
1994 1995 1996 1997 (February) 1997 (July) 43.3 38.1 40.1 44.0 55.5
WEIGHTS AND MEASURES Metric System
ABBREVIATIONS AND ACRONYMS
AK(s) - Agro-Kombinat(s) DWE - Department of Water Economy, Ministry of Agriculture, Forestry, and Water Economy ERR - Economic Rate of Return EU - European Union FAO - Food and Agriculture Organization FRY - Federal Republic of Yugoslavia GDP - Gross Domestic Product GNP - Gross National Product GSP - Gross Sectoral Product IBRD - International Bank for Reconstruction and Development IDA - International Development Association MAFWE - Ministry of Agriculture, Forestry, and Water Economy MOF - Ministry of Finance NEAP - National Environmental Action Plan O&M - Operation and Maintenance PA - Privatization Agency PFSP - Private Farmer Support Project PHRD - Policy and Human Resource Development PMT - Project Management Team PWME - Public Water Management Enterprise SA - Special Account SAL/C - Structural Adjustment Loan/Credit SAR - Staff Appraisal Report TA - Technical Assistance WMO(s) - Water Management Organization(s) WUA(s) - Water User Association(s) WTO - World Trade Organization
BORROWER'S FISCAL YEAR January 1 - December 31
Vice President: JohannesLinn, ECA Director: Ajay Chhibber,ECCO6 SectorLeader: Joseph Goldberg,ECSRE Task Team Leader: Toru Konishi THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA
IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT
Contents
1. AGRICULTURE SECTOR AND BANK STRATEGY ...... I A. INTRODUCTION...... I B. AGRiCULTURESECTOR OVERVIEW ...... I C. AGRICULTUREPOLICY REFORM ...... 2 D. WORLD BANK STRATEGYAND RATIONAL FOR INVOLVEMENT...... 4 E. BANK LENDING EXPERIENCE...... 5 2. THE IRRIGATION SECTOR...... 6 A. WATER RESOURCES...... 6 B. IRRIGATIONAND DRAINAGE DEVELOPMENT ...... 6 C. THEINSTITUTIONAL AND LEGAL FRAMEWORK ...... 7 D. WATERRESOURCE PLANNING AND MANAGEMENT ...... 8 E. FARMERSORGANIZATIONS AND ON-FARM WATER MANAGEMENT...... 9 F. FINANCIALISSUES ...... 9 G. SECTORSTRATEGY AND THE PROPOSEDNEW WATER LAW...... 10 H. ENVIRONMENTALSECTOR ISSUES ...... 11 3. THE PROJECT ...... 11 A. BACKGROUND...... 11 B. PROJECTOBJECTIVES AND DESCRIPTION ...... 12 C. PROJECTAREA ...... 13 D. MAINCOMPONENTS AND DETAILED FEATURES ...... 15 E. IMPLEMENTATIONSCHEDULE ...... 20 F. PROJECTCOST ...... 20 G. FINANCINGPLAN ...... 21 H'. PROCUREMENT...... 22 1. DISBURSEMENT...... 22 J. HISTORYOF PROJECTPREPARATION ...... 24 K. PARTICIPATION...... 24 L. ENVIRONMENT...... 25 M. INTERNATIONALWATERWAYS ...... 26 N. DAM SAFETY...... 26 0. COSTRECOVERY ...... 27 4. PROJECT IMPLEMENTATION...... 28 A. ORGANIZATIONAND MANAGEMENT...... 28 B. PROJECTPHASING ...... 29 C. SUPERVISION,MONITORING, AND REPORTING ...... 30 D. ACCOUNTSAND AUDITS ...... 30 5. PROJECT BENEFITS AND RISKS...... 31 A. BENEFITS...... 31 B. RISKS...... 32 6. AGREEMENTS REACHED AND RECOMMENDATION ...... 35 ANNEXES
A - Detailed Informationon Irrigation Schemes B - Project Implementation Plan C - Overviewof Institutionaland Legal Framework D - Economic and Financial Analysis E - Disbursement Profile F - Supervision Mission Plan
Table 3.1 Project Cost Summary Table 3.2 FinancingPlan Table 3.3 DisbursementCategories Table 3.4 ProposedCost RecoveryRate
MAP(S)
IBRDNo. 28828 Locationof Irrigation Schemes IBRD No. 28829 Tikves IrrigationScheme IBRDNo. 28830 BregalnicaIrrigation Scheme IBRDNo. 28831 PologIrrigation Scheme FORMER YUGOSLAV REPUBLIC OF MACEDONIA
IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT
Loan / Credit and Project Summary
Borrower: The former Yugoslav Republic of Macedonia
Guarantor: Not applicable
Implementing Agency: The Ministry of Agriculture, Forestry, and Water Economy
Beneficiary: Private farmers, Water Management Organizations, and Agro-Kombinats
Poverty: Not applicable
Amount: Loan of DM 13.5 million (US$7.5 million equivalent) Credit of SDR 3.7 million (US$5.0 million equivalent) Terms: Loan: 20 years, including 5 years of grace, at the standard interest rate for LIBOR-based Deutche mark loans Credit: IDA standard terms with 35 years' maturity including 10 years of grace. Commitment Fee/Service Loan: 0.75% on undisbursed loan balances, beginning 60 days after Charge: signing, less any waiver. Credit: 0.00% - 0.50% (set annually by the Executive Directors of IDA) on undisbursed loan balances, beginning 60 days after signing, less any waiver. Onlending Terms: Not applicable
Financing Plan: See Table 3.2
Net Present Value: US$37.8 million at discount rate of 12 percent
Economic Rate of Return: 29 percent
Staff Appraisal Report: Report No. 17013 MK
Map: IBRD 28828 - 28831
Project ID Number: MK-PE -38399
Vice President: JohannesLinn, ECA Director: Ajay Chhibber,ECCO6 SectorLeader: Joseph Goldberg,ECSRE ResponsibleStaff: This reportis based on an appraisalmission which visitedthe former YugoslavRepublic of Macedonia in May 1997. The report was prepared by Toru Konishi (Economist,Task Manager), Jagdish Srivastava (Irrigation Engineer), Neal Mountstephens (Irrigation Specialist, Consultant),Naushaud Khan (Procurement Officer), Tateo Morita (Project Analyst, Consultant),Benoist Veillerette(Agriculture Economist, FAO/CP) and Ms. Kitty Bentvelsen(Sociologist). Roy Southworth(Principal Economist), and Jean-PierreVillaret (Irrigation Engineer) are peer reviewers. Eloisa Lu assisted with report assembly and editing.
FORMER YUGOSLAV REPUBLIC OF MACEDONIA
IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT
STAFF APPRAISAL REPORT
1. AGRICULTURE SECTOR AND BANK STRATEGY
A. INTRODUCTION
1.1 Since its independence in 1991, the former Yugoslav Republic of Macedonia has been faced with major difficulties in its transition to nationhood and market economy. Severe hardship has arisen from large external financial obligations (37 percent of GDP in 1994), hyperinflation (1,935 percent in 1992), and loss of trade and trade routes due to the outburst of hostilities in the region. As a result, the economy deteriorated; and real GDP fell nearly 40 percent between 1990 and 1995. The increase in the unemployment rate and the decline in the real wage (about 50 percent between 1990 and 1995) resulted in severe erosion of real consumption and living standards.
1.2 Despite these difficulties, the agriculture sector has been relatively more buoyant than the rest of the economy. The output of the agriculture sector is showing signs of recovery, with increase in output of about 8 percent in 1994 and 3 percent in 1995. The sector accounts for about 15 percent of employment and contributes about 18 percent to GDP. About half of the population live in the rural areas and their livelihood is closely linked to agriculture.
1.3 The Government initiated a major economic stabilization program in 1994, including several measures for the agriculture sector such as price liberalization and privatization of the socially owned agro-kombinats (AKs). These measures would accelerate the growth of the sector and to maximize the production at competitive prices for export of agriculture products in re-emerging opportunities in neighboring countries. The restoration of the deteriorated physical infrastructure, particularly irrigation systems, has also been given a high priority, and the Government requested World Bank assistance to finance a project for the rehabilitation of deteriorated irrigation schemes. The proposed irrigation project would rehabilitate the three largest irrigation systems with highest priority, and support actions to increase irrigation management efficiency and sustainability such as (a) pilot initiatives for participatory irrigation management; and (b) restructuring of the concerned water management organizations (WMOs). The proposed project would be the fourth Bank-financed investment project in the country and the second in the agriculture sector, following the Private Farmers Support Project (PFSP).
B. AGRICULTURE SECTOR OVERVIEW
1.4 A landlocked country of about 2.60 million hectares with population of about 2.0 million, the former Yugoslav Republic of Macedonia has an arable area of 0.66 million hectares, which is utilized to an extent of about 35 percent for growing cereals (wheat, barley, maize, and rice), 9 percent for vegetables, 8 percent for vineyards, 7 percent for orchards, and 5 percent for fodder crops; the rest being mainly used as pasture land. These pastures and the neighboring grazing grounds, which cover 0.64 - 2 -
million hectares of the non-arable area, support the important livestock subsector. While there was a small decline in poultry production due partly to termination of subsidies in poultry feed, the livestock industry has been generally stable in spite of the shocks to the agriculture sector, and the potential for further growth is good. The demand for livestock products, especially lamb meat, is strong outside the country and has the potential for increased export. Also Macedonian wine, competitively priced with reasonable quality, is reported to have already begun to penetrate the EU market. In addition, off-season vegetables which can be produced under the favorable climate, would become important export items if the market and logistics in neighboring countries are re-established.
1.5 The former Yugoslav Republic of Macedonia can be categorized into three zones according to climate: (a) modified Mediterranean suited for vines, horticulture, and early vegetables; (b) modified continental best suited for cereals and industrial crops; and (c) mountainous suited for livestock. Annual precipitation ranges from 500 mm to 1,000 mm. However, high-crop yields and maximization of production is possible only with irrigation. The average growing period (May to September) rainfall of about 190 mm is much lower than the average evapotranspiration requirement (about 640 mm) of crops. The soils are fertile; about two-thirds of the arable lands being vertisols and terra rossas. Salinity is not an issue.
1.6 The agricultural sector of the former Yugoslav Republic of Macedonia has already a substantial private sector presence. The private farming sector, consisting of 177,000 small farms, accounts for about 70 percent of the arable land and two thirds of the value of agricultural output. Many of these farmers are part-timers with small holdings: the average plot of an individual farmer is 2.6 hectares in several parcels, and about half of the farming families have less than 1 hectare. They produce diversified crops for subsistence and sale, and forage crops for supporting a mix of livestock. Many of the livestock farmers have access to the communal summer grazing pastures in adjacent hills and mountains. The private farmers have reasonable mechanization (one tractor per 9.7 hectare) but the farming equipment is generally obsolete and may need replacement.
1.7 Agro-Kombinats (AKs) still play an important role in the agricultural sector. There are about 210 AKs throughout the country owning about 200,000 hectares of arable land (or 30 percent of the total arable land). They are often major employers in rural areas, monopolistic distributors for the farm input (fertilizers) and monopolistic purchasers of private farmner output. In the absence of alternative independent market channels, private farmers have generally been forced to supply their produce to AKs, often in return for inputs. Median farn size of AKs is about 250 hectares, about 100 times the average size of private farms. The average farm size of the 12 largest AKs is more than 2,500 hectares with about 1,000 employees, having several business units covering primary production to retail, vertically connected. Nevertheless, the incentives and organizational problems associated with social ownership have led to the poor performance.
C. AGRICULTUREPOLICY REFORM
1.8 The Government is conscious of the need for policy reform in the agriculture sector to achieve the objectives of sector growth and competitiveness of its products, and is committed to: (a) reducing interventions in output and input prices; and (b) reorienting the functions of the Government away from intervention and towards policy support for the private sector. In this context, the Government has -3 - embarked on actions on the following fronts: (a) price liberalization; (b) agricultural trade policy reform; (c) privatization of agro-kombinats; (d) land reform; and (e) water resource management strengthening.
1.9 Price Liberalization: US$50 million was spent on agriculture subsidies in 1995, of which US$24 million was for price subsidy, US$7 million for seed, and US$19 million for interest and lending rate on credit. However, as a key step for ushering in a market economy, the Government started phasing out the direct budget support for market interventions such as: subsidized loans, rebates on the purchase of inputs, price support and export subsidies. The guaranteed price for wheat in 1996 was kept at the same level as in 1995. The price support for sugarbeet and sunflower is to be abolished in 1997. The price of bread is currently fixed, but the Government would shortly introduce a price cap and then liberalize it when the Anti-Monopoly Law is ratified by the Parliament by the end of 1997. The Government has already terminated credit rebates and would also terminate seed rebates in 1997. The market intervention role of Agricultural Strategic Reserve Stocks would be gradually phased out, confining its activities to strategic stocks only. Agriculture subsidies have already declined from 23 percent of agricultural Gross Sector Product (GSP) in 1993 to 6 percent in 1995.
1.10 Agricultural Trade Policy Reform: To participate in the World Trade Organization (WTO), and ultimately join the EU, the Government has started trade policy reform by lowering custom tariffs, limiting custom exemptions, rationalizing import tax, dismantling quotas, and creating export incentives and trade institutions. The Government has converted imports previously subject to the special levies (e.g., wheat, flour, sugar, milk, etc.) to a schedule of tariff plus surcharge subject to a ceiling. The level of the tariffs is generally low. The Government is preparing a program for further liberalization of tariffs and/or surcharges on these items for implementation in stages under the SAL/C.
1.11 Privatization of Agro-Kombinats: The Government has already started the process of privatizing AKs. The legal basis, institutional capacity, and technical expertise are already in place. The Agriculture Privatization Law, which was ratified by the Parliament in April 1996, sets out the privatization procedures. The Government issued a guideline to implement the law, and the Privatization Agency (PA) will oversee the process. The PA has already issued the necessary guidelines for preparing restructuring plans, and the Law requires AKs to prepare their own privatization plan within 6 months for small and medium enterprises and within 12 months for the large ones. A beginning has already been made under the Special Restructuring Program, wherein three large AKs have been divided into 27 business units now slated for privatization. The Government is preparing clear policy announcements for rating the enterprises to avoid over-valuation. By fall 1997, privatization of at least 170 AKs is anticipated to be completed.
1.12 Land Reform: The land reform is essentially linked to the privatization of the state lands which were earlier taken over during the nationalization process, and which are farmed by the AKs. While AKs would be granted five years duration of land lease free of charge under the Agriculture Privatization Law, the Government decided to privatize about 15 percent of AKs' lands as early as possible, on auction basis or on claims supported by proofs of previous ownership. The Denationalization Law, which would be the forerunner for the development of land markets, is expected to be adopted by the Parliament by December 31, 1997. The proposed Law on Land Use would also be adopted by the Parliament in fall 1997, and will permit short-term leasing (not to exceed 5 years) of state lands to privatized AKs, until full privatization of these lands. The State Cadastral Office would be strengthened - 4 - to provide the farmers with land ownership titles. Private farmers would then be assured of being able to use their land as collateral for obtaining credit.
1.13 Water Resource Management: The Government has also started the restructuring of water resources management. As a first step, the Government is preparing a new Water Law replacing the current Water Law. This amendment would provide the legal base to allow the irrigation beneficiaries to participate in operation and maintenance (O&M) of their systems; introduction of water charges including volumetric pricing to economize water use, and restructuring of the water management organizations (WMOs) currently responsible for O&M but unable to provide an efficient service. A Water Fund would be established under the amendment, to finance activities with public interest such as river protection (refer para. 2.17).
D. WORLDBANK STRATEGY AND RATIONAL FOR INVOLVEMENT
1.14 The Government's current strategies are founded on the following key pillars including: (a) macro economic stabilization; (b) encouraging private sector development through privatization and improving the business environment; (c) banking sector reform; (d) building private capabilities to increase agricultural production; (e) modernization of physical infrastructure; (f) development of an effective social safety net; and (g) improvement of environmental management.
1.15 The Government strategy has been supported by the Bank Group through a policy dialogue and a lending program. The Bank Group's Country Assistance Strategy (Report No. 1473.9-MK, dated April 19, 1995) which was presented to the Board on May 16, 1995, stipulates the following strategies for investment lending: (a) assuring adequate infrastructure for economic growth; (b) promoting post- privatization restructuring and a supply response; (c) facilitating and supporting the structural reform and transformation to a market economy; (d) contributing to financing balance-of-payments requirements; (e) support for critical adjustment and development efforts; and (f) helping to mobilize resources from both official and private sources. The proposed project was identified in the CAS and fully supports the Bank Group's overall strategy for the country, which recognizes that agriculture has significant growth potential and that rehabilitation of deteriorated irrigation systems is a key to revitalizing the sector.
1.16 The Bank Group's strategy for the agriculture sector reflects the country specific experiences gained since the former Yugoslav Republic of Macedonia joined the Bank Group. As the Country Assistance Strategy points out, the Bank Group's overall strategy for agriculture is to focus on promotion of transition to a market-based economy. Specific elements of strategies would include: (a) the reduction of subsidies; (b) privatization of agro-kombinats; (c) shifting more responsibilities for support services to the private sector; and (d) rehabilitation of deteriorated physical infrastructure. The Government confirmred its agreement to proceed with the implementation of these strategies, particularly with respect to liberalizing trade regimes, reforming agricultural price policy and privatizing AKs under proposed SAL/C. Furthermore, the ongoing Private Farmer Support Project (PFSP) is assisting in strengthening the provision of technology and information to private farmers. Finally, DM 4 million (about US$2.7 million) has been designated for credits to either individual private farmers or their groups under the Private Sector Development Project. E. BANK LENDING EXPERIENCE
1.17 The Government has requested the Bank's involvement in the Project, as it considers the Bank to be well suited to provide assistance in developing a policy framework for irrigation management leading to long-term sustainability and supporting viable investment. The Bank has a wide-range of experience in the development of irrigated agricultural systems, both throughout the world and within the region, with comparable small holder farm settings (e.g., Turkey, Slovenia, and Albania) and has been playing a leading role in advocating public sector reform and promoting user participation in irrigation management. Key government counterparts participated in EDI's international seminar on participatory irrigation management and learned of the Bank's extensive experience in the sector.
1.18 Lessons learned from the Bank Group's earlier funding of projects in the Socialist Federal Republic of Yugoslavia include (a) demonstrated willingness and ability of Macedonian private farmers to adopt new technology and farming systems, provided these are beneficial and economically viable; but (b) the lack of attention to issues related to a sound policy framework for agricultural investment; and (c) inadequate project implementation capacity limiting the benefits obtained from the projects. The Bank's first investment project in the agriculture sector for the former Yugoslav Republic of Macedonia, Private Farmer Support Project, started in September 1996, and is progressing satisfactorily.
1.19 Bank experience with irrigation projects indicates that the following are most critical for the success of the project: (a) user participation in all the phases of the project from planning of rehabilitation to operation and maintenance after completion of works; (b) full recovery of the operation and maintenance costs of irrigation systems from the beneficiaries, preferably through transfer of managerial responsibilities to autonomous beneficiary groups; and (c) clear definition of the long-term mandate of the public sector, possibly confined to larger infrastructures such as primary networks, dams and main canals.
1.20 The lessons learned from past experience have been duly incorporated into the design of the proposed Project. The Government has, in the preparatory phase, organized the beneficiary groups to provide them with information on project formulation and its projected benefits and obtain agreement to their contributions. The Government is also seriously committed to establishing Water Users Associations (WUAs) and would provide training for technical and administrative capacity to operate and maintain the system to achieve high water-use efficiency. The Project would also support the restructuring water management through consolidation of water management organizations (WMOs) into the public water enterprises (paras. 2.7, 2.20). All of these initiatives would be implemented as pilot programs during the first phase of the Project to accumulate the experience and increase implementation capacity before full-scale application across the Project Area during the second phase of the Project. - 6 -
2. THE IRRIGATION SECTOR
A. WATER RESOURCES
2.1 Country's River Basins. The former Yugoslav Republic of Macedonia is divided into three main catchments:(a) the Vardar catchment covering 80 percent of the country's geographicalarea and accountingfor about 5,000 million m3 (72 percent) of the average annual runoff; (b) the Cmi Drim catchment, covering 13 percent of the country's geographicalarea and accountingfor 1,700 million m3 (23 percent) of the average annual runoff; and (c) the Strumica catchment covering 7 percent of the country's geographicalarea and accounting for 350 million m (5 percent) of the average annual runoff. Up to the border with Greece, the Vardar catchmentlies mostly (91 percent) within the former Yugoslav Republic of Macedonia with small portions in the Federal Republic of Yugoslavia (FRY) and Greece (5 and 4 percent respectively); the Vardar thereafter flows through Greece to the Aegean Sea as the River Axios. The catchment of the River Cmi Drim in the southwest corner of the country includes the Lakes Ohrid (use shared with Albania) and Prespa (use shared with Greece and Albania), and is substantially (76 percent) within the country with minor portions (17 and 7 percent respectively) in Albania and Greece, the Cmi Drim thereafter flows through Albania as the River Drini to the Adriatic. The River Strumica, which occupies the southwest corner of the country and includes the Dojran lake (use shared with Greece), originates wholly within the country, but after the border flows through Greece to the Aegean Sea.
2.2 The runoff in the three basins varies considerably from year to year; in the dry years being about 4,800 million m3 , compared to an overall average of about 6,600 million m3 on average. The seasonal fluctuation between the dry summer and other seasons is also considerable. The development of water resources for hydropower generation and irrigation, therefore, requires the construction of storage dams. The former Yugoslav Republic of Macedonia has so far developed 18 major dams and about 100 smaller dams, providing a total live storage of about 1,400 million m3 , which provide sufficient water throughout the year. The quality of the water is generally good. The use of ground water is limited to municipal and industrial use.
B. IRRIGATION AND DRAINAGE DEVELOPMENT
2.3 Need for Irrigation in the former Yugoslav Republic of Macedonia. In the former Yugoslav Republic of Macedonia, irrigation is considered essential on three counts: (a) to minimize climatic risks affecting agriculture production; (b) to ensure quality of products essential to commercial agriculture; and (c) to provide adequate incomes and living standards in the rural areas. There is generally a moisture deficit during the cropping period of about 480 mm. Most of the crops respond well to irrigation: winter cereals long-term average yields could be increased by 90 percent from 2.5 to 4.8 tlhectare under irrigation; the yield of all perennial, industrial and forage crops could increase by 150 to 300 percent. Irrigation is essential for many vegetables. In addition, for many high value fruits and vegetables, such as tomatoes, peppers, and table grapes suitable for export, irrigation is a pre-requisite to stabilize production and ensure minimum export quality. There is no major need for drainage due to the hilly topography and light-textured soils but irrigation systems incorporate surface drainage in a few cases. 2.4 Construction of Irrigation Schemes. The Socialist Federal Republic of Yugoslavia gave priority to the development of irrigation in the territory of the former Yugoslav Republic of Macedonia. The construction of irrigation schemes commenced in 1945; 19,000 hectares developed in the period 1945/58; 78,000 hectares in 1958/75; and 67,000 hectares in 1975/93. By 1994, some 94 schemes were completed, covering 164,000 hectares. Most of these schemes are gravity-pressurized sprinkler systems. Actual irrigated area, however, never achieved this level, partly because of suspended construction, and equipment and water shortages, peaking at around 76,000 hectares by 1990. Major irrigated crops are vegetables (18 percent), cereals (35 percent), orchards (8 percent), vineyards (14 percent), potatoes (5 percent), rice (3 percent), and fodder (8 percent). Others are potatoes, rice, industrial crops and pasture. Irrigated areas have substantially declined from early 1990 due to deterioration of the irrigation systems and loss of agricultural markets due to the outbreak of hostilities in the early 1990s. Total irrigated area was about 46,000 hectares in 1996, at 60 percent of the 1990 level.
2.5 Physical Condition of Irrigation Systems. While a few irrigation schemes constructed in the 1980s (e.g., Strumica) are in good condition and operating effectively, older systems completed in the 1970s or earlier (e.g., Tikves, Bregalnica), have deteriorated considerably due primarily to deferred maintenance (specially during early 1990s), and poor quality of initial design and construction. The concrete lining of the main canals are damaged resulting in higher seepage losses and lowering of conveyance capacity. Many control structures have also become non-functional. The fundamental cause of deterioration is institutional and due to a vicious circle where water management organizations (WMOs) (para. 2.7) are unable to maintain the systems due to shortage of funds, defers maintenance, and cannot provide reliable irrigation water to the farmers, who then do not pay the water charges needed to maintain the system.
C. THE INSTITUTIONAL AND LEGAL FRAMEWORK
2.6 Organization of the Water Sector. As water is defined as a national asset under the 1991 the former Yugoslav Republic of Macedonia constitution, the Government assumes responsibility for regulating its use and preserving its quality. The Department of Water Economy (DWE) of Ministry of Agriculture, Forestry, and Water Economy (MAFWE) regulates the use of water for agriculture, mainly for irrigation; the Ministry of Urban Planning, Construction, and Environment Protection supervises the use for municipal and industrial needs; and the Ministry of Health monitors drinking water quality. The Republic Hydrometeorological Institute monitors the quality and records the flows, including issue of flood warnings.
2.7 Water Management Organizations (WMOs). Under the Water Law of 1981, WMOs are the principal institutions responsible for management of irrigation systems in the former Yugoslav Republic of Macedonia, established at the time of construction on a scheme and district basis. There are 29 WMOs constituted and registered under the 1981 Water Law, which collectively form the Water Management Association (WMA) and additional 10 WMOs joined later. Major irrigation systems are typically managed by a main WMO and three to four distribution WMOs. Main WMOs own and manage the primary water resource facilities, such as dams and main canals, and are often also responsible for river control, erosion protection, drainage, and other water related activities. Smaller distribution WMOs are generally responsible for only distribution of water from the secondary and tertiary canals and pipes. All the WMOs are self-financed quasi-government organizations depending only on water charges. They are often overstaffed and inefficiently managed by employee-elected -8 - managers, having no incentives for improving management. The draft new Water Law now envisages that the WMOs would be merged into a single public enterprise, the Public Water Management Enterprise (PWME).
2.8 Water Development Institute (WDI) and Melioprojek. Under the Socialist Federal Republic of Yugoslavia, the WDI was assigned the task of assisting the MAFWE in carrying out research and design studies for water resource development. Melioprojek was responsible for carrying out the planning and design of irrigation schemes. After the break-up of the Socialist Federal Republic of Yugoslavia, both the institutions are currently operated as private consulting firms; however, WDI is becoming a key institution for the development of the irrigation sub-sector, and no other national engineering firm has comparable capacity.
2.9 Legal Framework. While preparation of major revision is underway, the 1981 Water Law .still governs the water sector. Under this law the MAFWE is charged with overall responsibility for water resources, including planning and issuance of abstraction licenses. The law also provides the legal basis for operation of the irrigation systems by WMOs. It specifies the responsibilities and tasks of the WMOs, and sets out the irrigation code and regulations, including the basis of water charges, the rules and penalties covering abuse of the systems and non-payment of fees. The WMOs have full responsibility for their own management, for technical operation of the irrigation systems and collection of water charges, however, they have to use the normal processes of the courts to pursue unpaid fees, and this has proved ineffective.
2.10 The 1981 Water Law provided for user representation in irrigation management through the "SIZ" organizations which had two key functions: (i) to obtain public funds from the central government through general taxation; and (ii) to act as the forum through which users interests were represented in important decisions, particularly the annual setting of water charges. However, these SIZ organizations ceased operations in 1994, and the irrigation sector was left without the support of the funds obtained from general taxation and without user representation. The latter contributed to the deterioration of relations between the users and WMOs, and in consequence increased delinquent behavior and defaults in payment of water charges.
D. WATERRESOURCES PLANNING AND MANAGEMENT
2.11 Current Water Resource Management. The country's overall water resource management is currently governed by the water master plan prepared in 1975, and is administered by the MAFWE. The master plan envisages utilization of about 30, 20, and 7 percent of the total water available in Vardar (including return flows) for irrigation, domestic, and industry, respectively, the flow in Vardar being sufficient for the three water users even in dry years (Annex C for details regarding other rivers). However, no update has been made to this master plan, and the National Environmental Action Plan (NEAP) (para. 2.23) identifies updating as a high priority activity. The former Yugoslav Republic of Macedonia's water resources comprise international rivers or lakes, which are also covered by international agreement made between the Socialist Federal Republic of Yugoslavia and Greece or Albania. No international agreements are made yet with the Federal Republic of Yugoslavia. - 9-
E. FARMERS ORGANIZATIONS AND ON-FARM WATER MANAGEMENT
2.12 Farmer Organizations. There are currently no farmer organizations formally organized in the irrigation sector. WMOs are directly dealing with individual water users for water requirement, informningwater delivery schedule, and collecting water tariff. However, associations of water users (SIZs) were established under the former Yugoslav Republic of Macedonia with responsibilities for making the main decisions concerning irrigation with WMOs, and participation in broader water resource management and development. However, SIZs were found ineffective in late 1980s, and were abolished in 1991, leaving the end users little representation in the WMOs and in water affairs generally.
2.13 On-Farm Water Management. Both private farmers and the agro-kombinatsare responsible for management of irrigation within their property boundaries. In areas occupied by private farmers, distribution WMOs (refer to para 2.7) control the secondary and tertiary canals and pipelines, the farmers only being responsible for taking water to their farms and for distribution thereon. Agro-Kombinats are generally responsible for the secondary and tertiary canals in their areas.
2.14 Most of the schemes in the former Yugoslav Republic of Macedonia provide sprinkler irrigation, the buried pipelines having adequate head, either through gravity or with booster pumping. Both agro- kombinats and private farmers have pressurized irrigation equipment but have been unable to replace deteriorated equipment over the last decade, so that both groups could face a shortage of equipment when the schemes reach full utilization. The agro-kombinats are better equipped, but the lack of the irrigation equipment does not seem to be a critical issue for private farmers, who often share equipment among themselves, purchase segment pipes piece by piece, and apply surface irrigation techniques, such as furrows, when necessary.
F. FINANCIAL ISSUES
2.15 Water Tariff. The 1981 Water Law laid down procedures for fixing of the water tariffs which were accepted by the WMA and followed by all WMOs. The formula for calculation of water charges was based on the estimated budget costs of water delivery, and included components to cover depreciation (2 percent of asset value) and contribution to the WMO's capital reserves. Currently, the water charge is based on the crop and the area, and is not based on the actual volume of water used, so that there is insufficient incentive for efficient field irrigation, with over-irrigation at the top of the system and under-irrigation at the bottom.
2.16 Cost Recovery. There is a long history of successful collection of irrigation water charges in the former Yugoslav Republic of Macedonia; farmers and agro-kombinats have until recently fully paid operation and maintenance costs and contributed significantly to capital cost recovery through amortization. However, the collection rate has drastically decreased since 1990 due to the loss of agricultural market and decrease in the utilization of the irrigation systems. Following the current procedures, WMOs increased the per hectare irrigation charges so as to maintain their income to cover the operational cost, which in turn further reduced utilization and encouraged payment default. It has been very difficult for elected managers to reduce the staff size of WMOs under the high unemployment rate. Many WMOs are struggling just to pay staff salaries and are deferring the maintenance of the irrigation schemes. The current irrigation water charges are very high ($300-500 per hectare) twice those in comparable schemes in the neighboring countries, and exceed an acceptable maximum level relative - 10- to the income generatedby irrigated agriculture. The current cost recovery rate is low (30-35 percent) and most WMOsare in severe financial hardship.
2.17 The Water Tariff System under the New Water Law. The proposed new Water Law would establish a new Water Fund to be funded by general taxation to cover the expenses for water sector activities with public interest such as river protection. Therefore, farmers (water users) would be exempted from paying for the cost of such activities. In addition, with the introduction of beneficiary participation in irrigation management, the irrigation water tariff is expected to substantially decrease. The details on the irrigation water tariff would be later prepared by the Public Water Management Enterprise (PWME) after the ratification of the new Water Law (para. 2.20) and the following key issues would be addressed: (a) scheme-specific water charges to eliminate cross subsidies; (b) the level of the user contributionto capital cost recovery;and (c) introductionof volumetriccharges.
G. SECTORSTRATEGY AND THE PROPOSEDNEW WATER LAW
2.18 Sector Issues and Strategies. The major sectoral issue is the downward spiral starting from high operational and maintenance cost, low-cost recovery, deferred maintenance and physical deterioration, which seriously jeopardizes the sustainability of the irrigation sub-sector. The sector strategy is to increase the efficiency and sustainability of the irrigation systems by the introduction of more cost effective and efficient (in terms of water usage) management, in particular, (a) restructuring institutional arrangements to increase efficiency and sustainability of the irrigation schemes (i.e., consolidating WMOs to a public institution and promoting user participation in irrigation management); and (b) physically improving deteriorated irrigation systems to restore their original capacity. Five irrigation systems, including Bregalnica, Tikves, and Polog have been identified as priority for rehabilitation in the 1995/98 Public Investment Program.
2.19 New Water Law. As a first step, the Government has currently prepared a new Water Law replacing the current legislation in order to establish an enabling environment for financially sound, cost- effective, and user-oriented institutional arrangement possibly through a user-participatory approach. There are three key provisions of this new law regarding the irrigation sector: (a) restructuring of WMOs;(b) introductionof WUAs; and (c) the provisionof additional financial resourcesthrough a new Water Fund.
2.20 Restructuring of WMOs into Public Enterprises. All the WMOs would be merged into a public single enterprise under the prevailing Public Enterprise Law upon adoption of new Water Law. A single umbrella national-level entity, the Public Water Management Enterprise (PWME), would be created to incorporate the responsibilities and assets of all WMOs, which would form subdivisions of the PWME. The PWME would then retain the current role of the WMOs, but would also have much wider responsibilities for sustainable, environmentally sound management of the country's water resources. Government supervision would be substantially strengthened, as it will appoint the director and members of the managing board. Under the Government's current plan, separate operational units would be established under the PWME serving each individual scheme with separate accounts and possibly with different water tariff. 2.21 Introductionof WUAs. The new Water Law specificallyallows for the formation of Water Users Associations(WUAs), to encouragewater users (farmers)to participate in irrigationmanagement by operationand maintenanceof facilitiesallocated to them by the PWME.
2.22 The Water Fund. The new Water Law establishes two general sources of income for the PWME: user chargesfor the provisionof services such as water for irrigation, drinking or industrialuse, and funds from the new Water Fund for activities with public interest such as river protection. The Water Fund would receive its income from a general water compensationtax levied on income,utilities and industriesusing water, various fines and compensations,and from the annual state budget.
H. ENVIRONMENTALSECTOR ISSUES
2.23 General EnvironmentalIssues. Most current environmentalproblems are attributableto the past policies and practices under the SocialistFederal Republicof Yugoslaviain which natural resources and the environment were undervalued. Prior to 1995, a number of agencies were involved in the environment in a fragmentedway in the absence of framework law. Many environmentalregulations were outdated and were weakly enforced. In December 1996, the Government of the former Yugoslav Republic of Macedoniapassed the EnvironmentalLaw as the overall framework. The law designatedthe Ministry of Urban Planning, Construction and the Environment (MUPCE) as the principal ministry responsible for overall environmental issues, and the MAFWE responsible for the water sector in particular. In- addition, in collaboration with the Bank, the Government has prepared the National Environment Action Plan (NEAP), which identifies the preparation of an updated national water resources plan as a priority activity.
2.24 Irrigation Sector Issues. Very few environmentalissues arise from the proposed irrigation rehabilitation, which primarily has positive effects. Irrigation water quality is generally adequate, and there are no widespread or significant drainage or salinity problems. The proposed rehabilitation,by reducing water losses, will have only a positiveeffect; the use of agriculturalchemicals, currentlyvery low, is not expected to rise to the levels causing concern to the environment. Monitoringand control of such environmentalconcerns will in future be the responsibilityof the PWME.
3. THE PROJECT
A. BACKGROUND
3.1 With the recent decline in the manufacturingsector of the economy following independence,an increasingproportion of the populationdepends on agriculturefor a part or all of its income. Given the generally small and fragmented nature of land holdings in the country, the use of intensive modem methods of productionare essential if farmers are to produce surplus for sale. However, intensivecrop production would be only possible with irrigation, as during the growing season transpiration substantiallyexceeds precipitation.
3.2 Substantialinvestments were made in the irrigationsub-sector during the 40 years of the socialist regime. However, these systems have deteriorated partly because of poor construction quality. Moreover,since 1990,the deteriorationaccelerated as the country's agricultural products started losing - 12- their market due to the outburst of hostilities in neighboring countries, and caused vicious cycles of low- cost recovery, delayed maintenance, system deterioration and failure to deliver water. In these three schemes to be rehabilitated under the Project, Tikves, Bregalnica and Polog, the current situation is becoming critical and unless substantial rehabilitation works are undertaken, the schemes would almost cease to function in the near future, putting the livelihoods of about 25,000 farmers at stake.
B. PROJECTOBJECTIVES AND DESCRIPTION
3.3 Project Rationale. Irrigation is essential in the former Yugoslav Republic of Macedonia to re- establish the country's potential in agriculture. Accordingly, the rehabilitation of the deteriorated existing irrigation infrastructure has the first priority under the project in order to maximize the economic benefit given the current budgetary constraint. In addition to infrastructure investment, the project would also aim to introduce several initiatives. These initiatives include more cost-effective and efficient irrigation management, by restructuring of water management organizations (WMOs) and promotion of participatory irrigation management through water user associations (WUAs) in order to establish sustainable irrigation subsector in the country.
3.4 Project Objectives. The ultimate objectives of the proposed Project are (a) to enable the private farmers to fully regain the potential of the irrigated agriculture sector through the rehabilitation of the three deteriorated irrigation schemes with high priorities; and (b) to enhance the sustainability and efficiency of the irrigation schemes by introducing participatory management. Specific elements of strategies to be taken under the Project are (a) restructuring of irrigation and operation and management practices through establishment of more efficient and cost-effective methods, based on the introduction of user participation and reform of the present Water Management Organizations (WMOs); (b) optimization of the area irrigated in each scheme through rehabilitation and repair of physical infrastructure; and (c) introduction of more technologically advanced crop production and irrigation methods.
3.5 Project Design Considerations. The major concern of the Project design is to improve the sustainability of the irrigation sub-sector. In order to break the vicious cycles (para 3.2), the project would rehabilitate the infrastructure and support initiatives to increase efficiency of irrigation management (i.e., restructuring water management organizations (WMOs) and introducing a participatory irrigation management on pilot basis). Selection of the project area has been based on (a) economic viability; (b) soundness of overall system design; (c) availability of sufficient water; (d) extent of deterioration of the physical conditions; and (e) large percentage of the private land. The Project would also assist the Government in obtaining advanced technologies to resolve certain technical issues (e.g., growing of algae) through cooperation with the international specialists and the national research institutes.
3.6 Project Description: The Project would consist of the following five components: (a) rehabilitation of the irrigation infrastructure in three regions including Tikves, Bregalnica and Polog covering approximately 47,000 hectare of service area in total (base cost USD20.72 million); (b) an institutional development program (base cost USD1.60 million) including subcomponents of (i) a series of pilot programs to develop water user associations (WUAs), improve on-farm irrigation practices, and explore the possibilities for user participation in minor repairs; (ii) a study on Bregalnica water resource management; and (iii) support to restructuring water management organizations (WMOs) through legal - 13 - advice and technical support; (c) a technical studies program for specific problems including dam safety, algae and repair of the systems (base cost USD0.82 million); and (d) project administration and monitoring (base cost USD3.01 million); and (e) implementation support for WMOs (base cost USD0.50 million).
C. PROJECT AREA
3.7 The Project would finance the rehabilitation of three irrigation schemes in the central and western regions of the country. After evaluating the different schemes needing rehabilitation under the criteria described in para. 3.5, Tikves, Bregalnica and Polog schemes were selected for the proposed Project. All the systems lie in the River Vardar Basin. These are very well connected by roads and railroad to the rest of the country, as well as with potential export partners. In general, designs of these schemes has been confirmed to be adequate for the natural conditions and current needs of irrigation. The schemes are briefly described below and detailed information are provided in Annex A.
3.8 Tikves Scheme: The Tikves irrigation scheme is located in the central southeast part of the country near the town of Kavadarci, covering approximately 13,000 hectares of command area shared between 8,700 private farmers and eight agro-kombinats. Tikves scheme was constructed in the 1970s. The water supply is drawn from the Tikves dam on the River Crna, a major tributary of the Vardar. About 80 percent of the total areas are based on gravity, while the rest is served by three pumping stations. The climate in Tikves area is classified as semi-arid, transitional between Mediterranean and Continental with average annual rainfall about 450 mm. Irrigation is essential and a pre-requisite to competitive economic agriculture. The major crop is vines (nearly 50 percent in 1990), the remainder being a mixture of cereals, vegetable, fodder and industrial crops. The irrigated area has declined considerably during the last seven years from 87 percent to 57 percent of the service area due to the deteriorated irrigation service and the loss of markets. The cost-recovery rate has decreased from 90 percent in the 1980s to about 30 percent in 1995, and the three WMOs managing the scheme face considerable financial hardship'. The Project would help farmers resume irrigation and increase farming income, as the market, particularly for wine, has been recovering considerably.
3.9 Bregalnica Scheme is located in the central northeast part of the country between the towns of Kocani and Stip. Its water is supplied by Kalimanci Dam on the Bregalnica River, a tributary of the Vardar. The Bregalnica Scheme covers 25,500 hectares of command area shared among 11,000 private farmers and seventeen agro-kombinats. About 30 percent of the area is served by a pumping station. The Bregalnica climate is semi-arid Continental with an average annual rainfall around 500 mm, and irrigation is essential. In the past, the major crop was rice, grown in the area served by canals, mostly in Kocani, the other crops being cereals, vegetable, fodder and industrial crops. However, the irrigated area has declined considerably from 59 percent of the service area in 1990 to 26 percent in 1996, due to the deteriorated irrigation service and the loss of markets. In particular, the rice area has declined following termination of the price support. The proposed rehabilitation would covere the upper part of the scheme covering approximately 18,000 hectares, exclusively served by gravity, and mostly owned by 10,800 private farmers. However, the focus would be the high-priority left bank area of 3,200 hectares.
1996 figureswas better due to the recoveryof the wine export. -14-
3.10 Polog Scheme, operated exclusively by gravity, is located in the north-western part of the country near the towns of Gostivar and Tetovo. Its service area of about 9,410 hectares is shared between 5,150 private farmners2and two relatively small agro-kombinats with an average size of about 250 hectare. The climate in Polog area is classified as continental Mediterranean with average annual rain fall about 600 mm. The crops grown are mainly wheat, alfalfa, clover, maize, with small area under vegetables. The irrigated area has declined between 1988 and 1996 from 60 percent to 47 percent due to the deterioration of irrigation systems and loss of markets. The cost recovery rate has decreased in the same period from 57 percent to 36 percent. The water requirement of the scheme is met from the Vardar river which receives water from the Mavrovo reservoir in Cmi Drim basin, through a trans-basin tunnel for generation of power at Vrutok and Raven hydropower stations. An agreement exists between the government owned Electric Power Company of Macedonia and MAFWE that the power releases shall meet the irrigation requirements, and assurances have been obtained that suspension events under the loan/credit would be triggered if any bleach, cancellations and/or modification would be made to this agreement without prior agreement of the Bank.
3.11 Profile of Private Farmers in Project Area: The majority of the private farming households are part-timers with substantial income from off-farm employment (Bregalnica and Tikves: 50 to 60 percent, Polog 80-90 percent). More than 50 percent of the farmers have less than 1 hectare of irrigated land, which is often fragmented, mainly due to the successive inheritance process. Since 1990, under diminishing off-farm employment opportunities since 1990, an increasing number of these farmers are forced to live on these plots, especially in Bregalnica and Tikves. In the jurisdiction of the Negotino Municipality in Bregalnica, the share of full-time farmers increased from 30 to 60 percent. The unemployment issue is less serious among farmers of the Polog Scheme as most off-farm employment of the ethnic Albanian households (nearly 70 percent of the beneficiary households of Polog) is migrant labour abroad.
3.12 Private farmers rank the deteriorating irrigation service and marketing limitations as their main constraints. The lack of off-farm employment opportunities, purchase of inputs, and high water charges are additional problems. In Bregalnica and Tikves, farmers express dissatisfaction with the service provided by the WMOs; their complaints are about the poor level of maintenance, the high level of water charges, the lack of transparency in accounting, their lack of representation and consultation in major decision-making and about the irrigation schedules. The rice farmers in Bregalnica give weight to the lost rice market, and also draw attention to the damaged canalet distribution. Farmers at Polog Scheme complain on the location of hydrants, and inconvenient hours of irrigation water supply due to the uneven power generation pattern of the upstream power plant.
3.13 Farmers in the project area consider the current water charge very high vis-a-vis the service they receive. The farmers would participate in irrigation management and accept some responsibilities; however, initial education on the concept of participatory irrigation would be a critical factor, as they consider water distribution and scheme maintenance still as tasks of the WMOs.
2 ProjectArea. The whole Polog schemecovers 13,900hectare of land sharedamong 13,000private farmersand three agro-kombinats.The figures given for area and ownershiprefer only to the portion of the servicearea where irrigationsystem is to be rehabilitated. - 15 -
3.14 Women in Agriculture: Women play an essential role in agricultural production in the project area: on average about half of agricultural work is performed by them. In households where men are engaged in off-farm employment, the share of work carried out by women is often larger. While no rigid labor division according to gender is visible, women tend to be more involved in manual work while the mechanized tasks are generally assigned to men. Irrigation is traditionally considered a task for men, but women participate whenever necessary. According to the WMOs in the project area, only a few women are currently registered as water users, possibly due to the practice for transfer of land ownership where daughters usually voluntarily renounce their land rights in favor of their brothers. Women consider the poor irrigation water supply, next to the marketing limitations, as the main constraint to increased agricultural production. Attending public meetings is a man's business, but women express their interest in participating in decisive WUA meetings if the men of their household were unable to attend.
3.15 The Project would pay explicit attention to women, since (i) women perform a considerable part of the work in irrigated agriculture; (ii) most of the men are engaged in off-farm employment; and (iii) women who work in agriculture need to be informed and consulted about the Project. Under the Pilot WUA program included in the Institutional Development Component, special attention to women would be integrated in activities related to WlUAs and farmer participation with the following objectives: (a) to increase agricultural production through increased efficiency by utilizing women's potentials; and (b) to ensure the participation of women in activities of the Project particularly those within WlUAs. The main activities in this context would be raising of gender awareness in the staff of PMT, participating WMOs, and WUA leaders; and to support the participation of women in relevant farmer training programs and WUA activities.
3.16 Ethnic Aspects in the Project Area: While farmers of the Tikves and Bregalnica area are all ethnic Macedonians, about two thirds of the farmers in Polog Area are of Albanian origin, followed by Macedonians (22 percent) and others, such as Turkish origin (12 percent). Ethnic Albanian and Macedonian inhabitants are segregated in separate villages with few exceptions. Ethnic Albanian households are extended and/or joint families, and often have difficulty in finding off-farm employment. Consequently, nearly all ethnic Albanian families have at least one family member (often the sons and husbands) working abroad, and the remaining family members (wives and grand fathers) are engaged in subsistence farming. On the other hand, ethnic Macedonian farming families are generally comprised of nuclear families with off-farm income from employment within the country. Many of them have left the villages and moved to the town for better employment, keeping their land as subsistence.
D. MAINCOMPONENTS AND DETAILED FEATURES
3.17 Component 1: System Rehabilitation (Base Cost US$20.72 million). This component would consist of the essential and most urgent repairs and the replacement of the damaged portions of the irrigation systems. Measurement structures would be installed at intakes of major secondary canals and at the borders between the main WMOs and distribution WMOs in primary canals in order to monitor the water use at each secondary network and assess each WMO's operational efficiency. Detailed rehabilitation proposals are set out below.
3.18 In Tikves, the Project would support the following sub-components: (a) repair of system intake tunnel; (b) rehabilitation of main canals; (c) repair of structures and siphons; and (d) replacement of -16- damaged pipes, hydrants and valves of the buried pipe distribution system. The average per hectare rehabilitation cost would be USD730. The details of sub-components in Tikves can be summarized below:
(a) Repair of System Intake: The cracks halfway up the gate shaft at the right abutment of Tikves dam would be grouted, and a steel lining in a 30 meter section of the tunnel (needs to be confirmed when reservoir is lowered) will be installed, as an interim measure to prevent the collapse of the tunnel until an alternative tunnel could be constructed.
(b) Rehabilitation of Main Canals: The concrete lining of the main canals (joint canal 7.1 km, left bank canal 33.7 km, right bank canal 43.8 km and one branch canal 10.9 km) would be replaced in about 12 percent of the length where it is badly damaged. The cracks and open joints in the otherwise satisfactory lining would be sealed in about 82 percent of the length, of which 51 percent would have partial replacement of lining as well.
(c) Repairs to Structures: The repairs to damages would be carried out at most of the structures, including works to stop the leakage at aqueducts. The repairs to siphons shall be carried out after completion of the study for repairs (para. 3.22 b). Four new measurement structures will be constructed.
(d) Renovation of the Buried Pipe Distribution System: As the pipe network is generally in good condition, only the broken offtake valves, hydrants, etc., and pipes would be replaced.
3.19 In Bregalnica, the Project would support (a) repairs to Kalimanci Dam; (b) rehabilitation of damaged sections of the left bank main canal and upper part of the right bank main canal; (c) repairs to structures; and (d) rehabilitation of distribution network in the area served by the left bank canal. The average base cost per hectare rehabilitation for the Left Bank Area would be about US$600. The details of each sub-component in Bregalnica are summarized below:
(a) Repair to Kalimanci Dam: The dam crest will be raised by 1.2m (the dumped rockfill dam having gradually settled after completion) to restore to initial height, and grouting will be carried out from the foundation gallery in reaches showing high seepage pressures (para 3.47).
(b) Rehabilitation of Left Bank and Upper Right Bank Main Canals: Repairs to the concrete lining of the highest priority main canals would include sealing of cracks in about 86 percent of the length, of which 36 percent would have partial replacement.
(c) Repairs to Structures: The structures on these canals are generally in satisfactory condition. Only minor repairs to damages would be carried out. At four locations, new measurement structures would be constructed.
(d) Rehabilitation of Left Bank Service Area Distribution Network: The service area is served by pipeline secondaries and canalets tertiaries. The broken pipes and not-functioning hydrants, valves, etc., on the piped supply would be replaced. On the canalets, the damages to saddles, canalets, and all the structures on the network would be repaired. - 17-
3.20 In Polog, the project would support (a) rehabilitation of the Bonichko Pole main canal; (b) improvement of the network of distribution pipes in the service area of the Gostivar canal; (c) rehabilitation of the lower half length of the Tetovo main canal; and (d) improvement of the earthen distribution channels in the same Tetovo area. The average per hectare rehabilitation cost would be US$680. The rehabilitation plan for Polog is briefly summarized below:
(a) Rehabilitation of the Bonichko Pole main canal: is required in about 42 percent of the total canal length of 11 kilometers, where it is aligned along the hill side and loses water by seepage. The canal would be resectioned and lined with concrete, and proper turnouts would be reconstructed.
(b) Improvement of the Gostivar pipe network: will include: (i) replacing broken pipes, damaged hydrants and valves, (ii) splitting the network for independent supply from the main canal for the few villages located at lower elevation, which have not been receiving the irrigation supplies, and (iii) installing meters at all the turnouts on the main canal in order to measure irrigation supplies to each pipeline. The detailed rehabilitation plan may have to be modified with further dialogue with the farmers during the project implementation.
(c) Rehabilitation of the main canal in Tetovo: shall be carried out in the lower part from km 12.10 to km 26.00; the upper part, rehabilitated in 1986, would require only minor work. The rehabilitation would include resectioning the canal for higher capacity and flattening of side slopes; concrete lining with drainage; introduction of long-crested check structures; repairs to a pump station including replacement of pumps.
(d) Rehabilitation of the distribution system in Tetovo area: would be carried out for areas to be served by the lower portion of main canal to be rehabilitated. The work would include restoring deteriorated section of the secondaries including lining of the essential reactions and constructing distribution structures for supply to tertiaries. Meters will be installed at all the turnouts for measuring the supplies to the secondaries.
3.21 Component 2: Institutional Development Component: (Base Cost: US$1.89 million). This component would support the Government's initiatives to increase efficiency and establish sustainability of the irrigation sub-sector through (a) a pilot water users association (WUA) program; (b) pilot improved water management; (c) pilot self-help rehabilitation; (d) a mathematical modeling of water resources in Bregalnica and Polog Scheme; and (e) technical assistance for the ongoing reorganization of the water management organizations (WMOs). Details of these sub-components are summarized below (refer to Annex B, Project Implementation Plan for further details).
(a) Pilot Water User Associations (WUAs): Under the Project, seven WUAs would be established during the first two years of the project implementation as a pilot program to promote participatory irrigation management. This pilot program would be disseminated across the project area after the mid-term review if it is considered to be successful. Under this subcomponent, 31 man-months (m/m) of technical assistance from a WUA specialist ( 16 for the pilot phase and 15 for the dissemination stage) and two (2) man-months (m/m) of a gender specialist would be financed to provide: (i) technical assistance and on-site training to the WUAs and implementation staff in the WMOs, and (ii) training and guidance to secure the full participation of women in WUA affairs. Under the subcomponent (i), on-the-job training will be supplemented by in-country training, overseas training and study tours to enhance the skills in the field of - 18 - training, communication and participation processes, technical skills including irrigation system management,irrigation scheduling, field irrigationmethods and computerapplications. Gender awareness raisingwill be part of the skill enhancementrelated to farmersparticipation processes. Equipment would be providedunder the project to supportthe improvementof irrigationmanagement at the tertiary and field level. Training of WUA leaders would be in management, leadership and communication skills, bookkeeping,and financial managementof associations,irrigation scheduling, repair and maintenanceof irrigationsystems. Training of WUA members(in particularthose membersof the farminghousehold who are actuallyengaged in field work and irrigation)would be providedin field irrigationtechniques, irrigation schedulesand appropriateagricultural topics. As the task of creating,organizing and supportingWUAs is not a current responsibilitiesof WMOs,the project would also finance the incrementaloperating costs of participatingWMOs under Component 5 (para 3.24). The detailed scope of the technicalassistance would be developedat the mid-termreview (para. 4.7).
(b) Pilot Improved WaterManagement: This subcomponentwould assist the pilot WUAs in developing efficient,water-saving improvements to both tertiary canals and methods for field irrigation. In sprinkler areas, the emphasiswould be on irrigation scheduling,management of rotations and encouragementof night-time irrigation. In the surface irrigation areas, the emphasis would be on field irrigation techniques, particularly furrow irrigation for maize and vegetables, and border-strip for alfalfa. The project inputs will be 24 m/m and 6 m/m of technical assistance, respectively, from national and expatriateexperts, in-countrytraining of WIA members, and equipment.
(c) Pilot Self-helpRehabilitation: This sub-componentwould be implementedexclusively in the service area of one WUA at the Bregalnica Right Bank having an open canal system of secondaries and tertiaries. The project would support the WMO staff and WUA members in implementation of rehabilitationin an area of up to 1,000 hectares using self-help principles. The project would finance materials, equipment, and training. WMO staff would provide technical assistance and the farrners, throughtheir WUA,would contributetheir labor.
(d) MathematicalModels of Water Resources on Bregalnica and Polog Schemes: The project would appoint a national specialist organizationassociated with an internationalspecialist institute,to develop: (i) a hydrologicalsimulation model to provide optimal real-time water resource management for the complex hydrological system of Bregalnica, and (ii) a mathematical river model for Polog to assist determination of water availability for different power release returns. National and international specialists,training, specialist software and associatedcosts would be covered.
(e) Support for the ongoing reorganizationof the water management organizations(WMOs): This componentwould finance the critical technicalassistance to support the restructuringof WMOs, which would be started with the ratification of the new Water Law. The componentwould finance: (i) 3 m/m technicalassistance to the MAFWEand PWME in drafting regulationsand codes formninga part of new Water Law, (ii) 8 m/intechnical assistance for improvingthe audit/cost accountingof four participating WMOs including appropriate computerizedaccounting systems and periodical monitoring of the key performanceindicators; and (iii) equipment,computers, software and training for the four WMOs.
3.22 Component3: Technical Studies: (Base Cost: US$ 0.51 million): This component would support studies for the solution of the various problems at the two schemes concerning(a) growing of -19- algae in main canals; (b) inspection of siphons to establish rehabilitation requirements; (c) estimation of floods at the two storage dams to further evaluate safety; and (d) alternative alignment for Tikves intake tunnel. These studies would be carried out mainly local research institutions in close collaborations with international experts. Details of these sub-components are summarized below:
(a) Algae Problem: A specialized group would examine the causes of algae formation on the canals, suggest measures to eliminate its formation, and conduct trials to finally select an effective treatment.
(b) Inspection of Siphons: A specialized firm will be asked to advise the methodology for inspection of siphons which can not be directly examined, to inspect the siphons of all sizes, and to report on the status of deterioration to establish rehabilitation requirements.
(c) Estimation of Floods: A specialized group will be assigned the task of re-estimating the maximum probable floods at the Tikves and Kalimanci Dams using the latest data and modern procedures, and to evaluate the sufficiency of spillway capacities.
(d) Tikves Tunnel Re-alignment: Geological studies will be carried out for exploring an alternative alignment for the inlet portion of the Tikves intake tunnel, since the current alignment is showing rock movements which could endanger the safety of the tunnel. Should a feasible alignment be possible, designs and cost estimates will be prepared.
3.23 Component 4: Project Administration and Monitoring (Base Cost US$3.01 million): This component would support essential tasks to carry out the project implementation and would have the following two sub-components:
(a) Support to the Project Management Team (PMT): While the MAFWE would have overall responsibility for the implementation and monitoring of the Project, the majority of administrative tasks would be delegated to a PMT to be established within the MAFWE, to manage the various stages of project implementation. In particular, this component would finance essential national staff and a supporting team of expatriate experts comprising: (i) Chief Technical Advisor (18 staff/months), (ii) Construction Supervision and management Advisor (4 staff/months), (iii) Procurement Advisor (4 staff/months), (iv) Financial Control and Accounting Advisor (4 staff/months). This sub-component would also finance essential office equipment and vehicles for PMT and experts.
(b) Design and Construction Supervision: The Project would finance a team of local consultants to carry out design, tender document preparation, and construction supervision for civil works to be financed under the Project.
3.24 Component 5: Implementation Support (Base Cost US$0.50 million): This component would finance incremental operating cost of the irrigation systems and incremental staff of four participating WMOs (para 4.5). These WMOs would take Project implementation responsibilities for carrying out pilot WUA programs, preparing annual irrigation reports and other responsibilities. A total sum of US$100,000 would be provided for each year of Project implementation for the participating -20 -
WMOs. The annual allocation of funds among the four participating WMOs would be determined each year by PMT, depending on the responsibilities assigned and number of additional staff needed.
E. IMPLEMENTATIONSCHEDULE
3.25 The Project would be implemented over six years. Investments would be more or less evenly distributed throughout the project life reflecting the narrow window of opportunity for construction only during early autumn and late spring. The Project would have two phases with a comprehensive mid-term review between the first and the second phase. During the first phase, the rehabilitation would be focused on the repair of main structures such as primary canals and dams, which would have immediate and major benefit for the entire iffigation schemes. During the second phase, secondary networks with high priorities would be rehabilitated. This approach would ensure adequate budget allocation to the main structures and allow sufficient time during project implementation to reconfirn the priority sections in secondary networks in need of rehabilitation. All of the pilot programs and technical studies would be completed during the first phase, and the outcome of these programs and studies would be reviewed and strategies for application across the Project Area would be developed during the mid-term review.
F. PROJECTCOST
3.26 Table 3.1 summarizes the project costs and details are presented in Annex B. The proposed project is estimated to cost approximately US$32.5 million based on late-1996 prices, including physical and price contingencies. The foreign exchange component is estimated at about US$11.3 million or about 35 percent of the total project cost. The exchange rate as of July 1997 (I USD = 55.5 Denar) was used for the calculation of the project cost. Import duties, taxes, and other levies are not included in the project costs, based on the assumption that any procurement from overseas for the Project would be exempt from taxes. The physical contingencies of 15 percent for most of civil works, 20 percent for some works for Polog, and 5 percent for consultation services for the studies and goods, would cover the possible increase of quantities of work for rehabilitation. The price contingencies have been taken based on the anticipated inflation within the country and for overseas costs, according to the Bank guidelines. The detailed cost tables are attached as Attachment III of Annex B.
Table 3.1: Components Project Cost Summary (US$ Million)
Local Foreign Total % Foreign % of Total Component Cost Cost Cost Cost Base Cost A. System Rehabilitation 14.12 6.59 20.72 32 78 B. Institutional Development 0.27 1.62 1.89 86 7 C. Technical Studies 0.28 0.23 0.51 46 2 D. Administrationand Monitoring 2.05 0.95 3.01 32 11 E. ImplementationSupport For 0.50 0 0.50 0 2 WMO Total Base Cost 17.22 9.40 26.62 35 100 PhysicalContingencies 2.42 1.19 3.61 33 14 Price Contingencies 1.57 0.66 2.23 30 8 TOTAL PROJECT COST 21.21 11.25 32.46 35 122 - 21 -
G. FINANCING PLAN
3.27 The financing plan for the proposed Project is presented in Table 3.2. A Bank loanlcredit of US$12.5 million (US$ 5.0 million equivalent from IDA Credit and US$ 7.5 million equivalent from IBRD Loan) to the former Yugoslav Republic of Macedonia would finance about 39 percent of the total costs. This would cover about 52 percent of foreign cost and 31 percent of local cost. The Borrower would contribute about US$8.0 million equivalent, or about 25 percent of the total project cost. The Government of Netherlands would provide the equivalent of about US $12.0 million on a grant basis to finance the System Rehabilitation Component, the Institutional Development Component, the Technical Studies Component, a part of the Project Administration and Monitoring Component, and the Incremental Operating Cost Component.
Table 3.2: Financing Plan (US$ Million)
Item Local Foreign Total
IBRD/IDA 6.62 5.88 12.50 Government of Netherlands 6.61 5.37 11.98 Government 7.98 0.00 7.98 Total 21.21 11.25 32.46
3.28 Counterpart Funds. The Government has assured that approximately $450,000 will be allocated to the Project from FY 1997 budget to cover advance payment to contractors and other expenses, and that timely availability of counterpart funds to ensure the smooth implementation of the project will be ensured for each Project year.
3.29 Retroactive Financing: Considering limited opportunities for rehabilitating irrigation canals during only non-irrigation season (i.e. between October and early April), procurement of all of the first year civil works contracts might have to be completed and contractors should be mobilized by early winter in order to avoid the loss of whole year. In this context, a total of US$ 1,000,000, or 8 percent of the total amount of loan and credit would be proposed for retroactive financing should the Loan Signing be delayed to cover the progress payment toward the two first year civil works contracts for Tikves and Bregalnica. The total estimated amount of these three contracts, specified in Attachment IV of Annex B as CWC 101, and 201, are US$ 1.24 million and would be procured through national competitive bidding. The period of retroactivity would be from July 1, 1997. - 22 -
H. PROCUREMENT
3.30 The implementation of the project would require the procurement of civil works, goods, and consultants. The procurement of goods and works under the project would be conducted in accordance with the Bank Guidelines for procurement under IBRD Loans and IDA Credit dated January 1995 and revised in January and August 1996. The procurement of consultants would follow the Bank's Guideline, "Selection of Consultants by World Bank Borrowers," dated January 1997. A General Procurement Notice was issued in the Development Business in July 16 1997. The procurement arrangements are summarized in Section IV of Annex B.
3.31 The responsibility for procurement would rest with the Project Management Team (PMT). The progress on procurement would be reported in a suitable format to the Bank in the quarterly reports. The Design and Contract Supervision Consultant would assist the PMT in the preparation of the procurement documents and processing of the offers received for civil works. The PMT would have a full-time position for procurement activities. PMT would also have an international specialist in procurement, who would train the PMT full-time procurement staff to properly carry out the procurement in accordance with the procedures set up by him. In addition, the PMT procurement staff would be trained in a Bank-organized seminar; and a project start-up workshop would be held in October 1997.
1. DISBURSEMENT
3.32 The proposed Bank loan/IDA credit of US$12.5 million equivalent would be disbursed over a period of six years, and the expected closing date would be September 30, 2004. While there is no experience yet to form a disbursement profile for the former Yugoslav Republic of Macedonia, six years would be sufficient to implement the project, given the nature and size of the project and the past experience in the Socialist Federal Republic of Yugoslavia. The detailed disbursement profile is attached as Annex E.
3.33 The proceeds of the loan and the credit would be disbursed as shown in Table 3.3 a and b. It should be noted that no disbursement is proposed against (a) consultants' services; and (b) incremental operational cost, as these would be eligible under the co-financing by the Government of Netherlands. To the extent practicable, the proceeds of the IDA credit would be disbursed before the proceeds of the Bank loan.
3.34 Disbursements against the categories described in Table 3.3 (a) and (b) would be made upon receipt by the Bank of fully documented applications except for: (i) contracts for works valued at less than US$1,000,000; and (ii) contracts for goods, including vehicles, costing less than US$200,000. Disbursement for these items would be made against statements of expenditures (SOEs). Supporting documentation for SOEs would be retained by the Borrower and made available to the Bank during supervision.
3.35 Special Account: To facilitate project implementation, the Borrower would establish two separate Special Accounts (SA): one for the IDA credit and the other for the IBRD loan at the Central Bank on terms and conditions satisfactory to the Bank. The Bank would make an authorized allocation of US$ 500,000 for the special account for the IDA credit. Initially, the allocation would be limited to US$ 250,000 until disbursement has reached SDR 0.75 million, then the full authorized allocation could - 23 - be claimed. The Bank would also make an authorized allocation of DM I million for the IBRD loan. The IDA credit would be drawn completely before the IBRD loan starts being withdrawn. Applications for the replenishment of these SAs would be submitted monthly or when 20 percent of the initial deposit has been utilized, whichever occurs earlier. The replenishment applications would be supported by the necessary documentation, bank statement of the special account, a reconciliation bank statement of the special account against Bank records.
Table 3.3a: Disbursement Categories for IDA Credit
DisbursementCategory Allocation DisbursementBasis (SDRmillion) 1. Goods 0.15 100 percentof foreign (equipmentand materials) expenditure,100 percentof local expenditure(ex-factory cost) and 85 percentof local expenditures for other items procuredlocally
2. Vehicles 0.11 100 percentof foreign expenditure,100 percent of local expenditure(ex-factory cost) and 85 percentof local expenditures for other items procuredlocally
3. Works 3.07 75 percentof expenditure
4. Unallocated 0.37
TOTAL 3.70
Table 3.3b: Disbursement Categories for IBRD Loan
DisbursementCategory Allocation DisbursementBasis (DM million) 1. Goods 0.36 100percent of foreignexpenditure, (equipmentand materials) 100percent of local expenditure (ex-factorycost) and 85 percent of localexpenditures for other items procuredlocally
2. Works 11.79 75 percentof expenditure
3. Unallocated 1,35
lTOTAL 13.50 - 24 -
J. HISTORY OF PROJECT PREPARATION
3.36 The proposed Project has been based on the preliminary economic and technical screening from 10 irrigation schemes identified in a series of FAO studies3. Tikves and Bregalnica Schemes were first selected jointly with the Government and the FAO's preparation mission in October 1995. Subsequently, FAO dispatched two missions in May and December 1996, and assisted the Government in preparing a draft project proposal including economic analysis and socio-economic beneficiary survey. In addition, in October 1996, FAO granted a technical cooperation program (TCP) to assist the Government in preparing detailed design and tender documents for the civil works to be implemented during the first year. Polog Scheme was identified in February 1997 as next priority, when the additional funding from the Government of Netherlands became available. Japan PHRD Grant is currently financing additional preparation for the first year implementation. The preparation of the tender documents for the civil works for the first six months of implementation has been completed.
3.37 The draft Water Law had its first reading in the Parliament in May 1997. This law would provide a framework under which the participatory irrigation management would be introduced through water user associations. The Government has already established beneficiary groups and tentatively identified four water user groups which would be developed into the formal WUA under the Project upon the ratification of the law. The law would also provide legal ground for the WMOs to be consolidated to the public enterprise as a first step to streamline the water management. No major obstacles for the ratification of the law are expected and the adaption of the law is anticipated by October 1997. The law has completed its second reading before parliament, and adoption of the law by the parliament is a condition for loan and credit effectiveness. The bylaw of PWME and any regulations adopted under the Water Law would be sent to the Bank for review and comments prior to adoption.
K. PARTICIPATION
3.38 Under the Project, beneficiaries (water users) would directly participate in the Project, mainly through the WUAs, as the beneficiary participation is considered as the single most important element in achievement of a sound and sustainable irrigation sector. Unfortunately, the participatory experience gained under the former Yugoslav Republic, which was not necessarily based on the voluntary and self- selection, proved inefficient and ineffective and there remains a residual prejudice and skepticism to this principle. It is for this reason that the Project is planning its participatory initiatives on a pilot basis. This approach would allow annual evaluation of performance to feed back in next year's program. In particular, participation would be achieved on three fronts through (a) beneficiary (farmer) groups to be established within the Project Area as a prelude to WUAs; (b) WUAs; and (c) self-help rehabilitation program in Bregalnica.
3.39 Beneficiary Groups: As a first step toward the full participation through WUAs, beneficiary groups of farmers have been organized in Tikves and Bregalnica. Additional groups would be organized shortly at the Polog scheme. These groups were the first contact point with farmers for the Project discussions during the appraisal. These groups would eventually have two roles (a) to provide
3Irrigation Developmentand WaterResources Review, FAO/CP, 1994 - 25 - information and suggestionsto project staff and WMOs; and (b) to disseminate information about the Project and its plan to the wider public. The groups would be consulted on the followingtwo topics: (a) proposals on rehabilitationprograms; and (b) water user associationproposals.
3.40 WUAs: WUAs would be the main vehicles for participationby farmers/irrigatorsin the Project. The WUAs would have the followingtwo main functions: (a) to take over responsibilityfor operation and maintenanceof selected irrigationfacilities from WMOs; and (b) to work with the WMOsduring the rehabilitation process, and afterwards toward better management of main facilities. Under a pilot program, seven WUAs would be establishedand take over operationalresponsibilities for tertiary canals or pipelines as a first step, and would participate in further responsibilitiessuch as taking over the operational responsibilitiesfor secondarycanals, and participating in the main system managementby WMOs. One WUA area has been identified in order to ensurethe quick start of the pilot WUA program, and the legal documentsrequires the establishmentof four WUAsin Bregalnicaand Tikves within a year and three WUAs in Pologwithin two years from the loan and credit effectiveness.
3.41 Self-Help RehabilitationPilot Program: Under this program, farmers in Bregalnica Scheme would be directly involved in the rehabilitation by contributing labor to undertake simple repairs and replacement of elements of the distributionsystem while the project would finance necessary materials and training. The planning,design, and implementationprocess would be closely monitoredand guided by BregalnicaKocani WMO (para. 3.21(c), AttachmentlB of Annex B).
L. ENVIRONMENT
3.42 The Project has been screened and classified as category B in accordance with, the Bank's Operational Directives. The environmental impact from the Project is expected to be minimal, as it would rehabilitate the existing irrigation schemes which are currently in use. No alterations to the catchment areas or to the dams are envisaged under the Project.
3.43 A possible impact could be due to the increase in the use of fertilizer and chemicals from restoration of the higher level of crop production from the current low level; however, pollution is not expected to be significant, as more scientific and economic farming practices with lower inputs are anticipated in the future. No major pollution due to the irrigated agriculture have been reported in the past. Technical training to municipality-level agriculture extension officers and research grant would be provided under the on-going Private Farmer Support Project as well as technical advice on relevant topics such as efficient application of fertilizers and integrated pest management. Nonetheless, assurances have been obtained that the water quality will be monitored prior to the start of the Project and during the project implementation at: (a) system intake at the reservoir; (b) selected points in the primary drains; and (c) at a location in the river down stream of the scheme. The proposed terms of reference for environmental monitoring is attached as Attachment VI to Annex B. Submission to the Bank of an environmental evaluation describing general environmental conditions including the current quality of water is a condition for effectiveness.
3.44 The Project would have a positive environmental impact, as it would increase the efficiency of use of irrigation water, resulting in the substantial reduction of water loss and run-off of fertilizer and pesticides. In particular, in Bregalnica, a pilot program is planned (para. 3.21 d) to demonstrate - 26 - irrigation methods to improve water use efficiency and encourage crop diversification from rice, which is the most water demanding crop.
3.45 While the overall quality of the irrigation water in the proposed schemes is good in terms of total dissolved matter, acidity, and dissolved oxygen levels, algae problem is encountered in several canals in Tikves and Bregalnica schemes during summer time. A technical study would be undertaken under the Project to resolve the problem.
M. INTERNATIONAL WATERWAYS
3.46 The three irrigation schemes for Tikves, Bregalnica, and Polog lie in the Vardar River basin. The Vardar river is an international waterway within the meaning of the Bank's Operational Policy 7.50, having tributaries flowing in from the Federal Republic of Yugoslavia (FRY) and Greece, and flowing from the former Yugoslav Republic of Macedonia into Greece. An international agreement on the Vardar River Basin dated June 18, 1959 (which the Government of the former Yugoslav Republic of Macedonia and Government of Greece confirmed on September 13, 1995) requires notification of Greece about projects concerning water use on this international waterway. Accordingly, the Ministry of External Affairs of the Government of the former Yugoslav Republic of Macedonia informed its Greek counterpart,by letters dated December 12, 1996, for Tikves and Bregalnica and May 19, 1997 for Polog of the former Yugoslav Republic of Macedonia's intention to rehabilitate these irrigation systems. Greece has not yet given any response to the letters. There are no existing agreements on the waterway with an upper riparian of a tributary which flows into the Vardar River, the Federal Republic of Yugoslavia (FRY). The Project falls within the exception to notification under the Bank's Operational Policies with respect to notification of the FRY for the following reasons: (i) the Project would only finance the rehabilitation of on-going schemes; (ii) Tikves and Bregalnica Schemes are located on tributaries of the Vardar river which flow into the river, downstream from the tributary flowing into the river from FRY, and Polog Scheme is located on the Vardar River upstream from the tributary flowing from FRY; thus the rehabilitation activities would have no adverse effect on the quantity or quality of water flows to FRY and would not be adversely affected by FRY's possible water use.
N. DAM SAFETY
3.47 The irrigation systems to be rehabilitated under the Project are dependent for their supplies on three dams, Tikves, Kalimanci, and Mavrovo. All the three dams have also hydropower generation functions. Electropanstavo, a state power company, is responsible for the O&M and safety monitoring of Tikves and Mavrovo dams. The O&M of the Kalimanci dam is the responsibility of the WMO Bregalnica since the releases from the reservoir are made in accordance with the irrigation demands; power being secondary; and the University of Skopje carries out safety monitoring. An international dam specialist evaluated the safety monitoring procedures and the O&M of the Tikves and Kalimanci dams and appurtenant structures, during the project preparation, and found these to be satisfactory. The specialist agreed with the project proposals for carrying out a few repair works at both Tikves and Kalimanci Dams (paras 3.18 and 3.19). These works are neither substantial nor of high hazard category to warrant the appointment of an independent panel of experts. Based on the specialist's recommendation, two sub-components (a) evaluation of the maximum probable floods at these two dams - 27 - to check the sufficiency of the spillway capacity (para 3.22 c), and (b) a study to explore an alternative alignment for the inlet portion of the irrigation intake tunnel (para 3.22 d) are included under the technical studies.
3.48 The appraisal mission examined the latest safety monitoring report for the Mavrovo dam in Polog Scheme, prepared by Globochitsa (civil wing of Electropanstavo), and noticed the high phreatic line in the downstream shell under the full reservoir condition. At the request of the Electropanstavo in 1994, the Faculty of Civil Engineering of the University of Skopje, carried out an evaluation of the safety of the downstream shell under the high phreatic line when the factors of safety were found to be relatively low. Electropanstavo intends to carry out investigations for a detailed study of the situation. The safety of the Mavrovo dam is also to be evaluated under the "Power Systems Improvement Project" proposed by the Government to the Bank for funding. Mavrovo reservoir is the largest in the country and its Vrutok power plant, which operates under a high head, has a vital role in meeting the peak loads. The safety of the Mavrovo dam and the need for any remedial measures to lower the phreatic line is, therefore, being considered in detail under the proposed power project. In any event, assurances have been obtained that the Government will ensure that all the dams and reservoirs supplying water to the project are maintained and inspected periodically in accordance with sound engineering practices acceptable to the Bank.
0. COSTRECOVERY
3.49 Current Cost Recovery in the Project Area: Most of WMOs in the proposed Project Areas have difficult financial problems due to the vicious cycle of deferred maintenance and low cost recovery (para. 3.2). On an average, the cost recovery rate has been decreased from 88 percent in 1990 to 35 percent in 1995. Interviews with farmers revealed that many water users are not paying their dues because of the following reasons: (a) unaffordably high charges; (b) unreliable water delivery in terms of timing and quantity; and (c) lack of farming income due to the marketing problem. However, there is a substantial regional difference in the current cost recovery level. In Tikves, thanks to the recovery of wine-industries, the cost recovery rate in 1996 increased to more than 50 percent. In Bregalnica, cost recovery rate dropped to the minimum in the last five years, of less than 30 percent, reflecting the collapse of the market for rice and delay in farmers' crop diversification. In Polog, the cost recovery rate has decreased to about 50 percent during the 1980s, then further decreased to 30 percent in Gostivar and 45 percent in Tetovo in 1996.
3.50 Target O&M Cost Recovery under the Project: Under the Project, full cost recovery for operation and maintenance is envisaged. The primary mechanism for achieving this goal would be: (a) rehabilitation of the irrigation infrastructure to ensure the water delivery; and (b) introduction of efficient irrigation management through participation of WUAs and restructuring of WMOs. However, the following five-year target for full O&M recovery is anticipated considering (a) time required to complete rehabilitation and redevelop markets; and (b) regional differences. Assurances have been obtained that the figures shown in Table 3.4 form an agreed target for the cost recovery rate. - 28 -
Table 3.4 Target CostRecovery Rate for O&M Cost
TargetRate (%) Year Tikves Bregalnicaand Polog 1998 50 35 1999 70 50 000 80 70 2001 90 80 002 and onwards 90 90
3.51 Capital Cost Recovery: While the current laws provide the basis for the capital cost recovery through amortization (depreciation) of capital assets (typically 2 percent of the investment cost per year), no capital cost recovery is envisaged during the first two years of the Project, as it would be simply unrealistic to expect capital cost recovery under the current low irrigation ratio and low recovery rate for the operational and maintenance cost. Later, it has been tentatively agreed that two percent of the rehabilitation cost would be annually charged to water users, but this issue would be examined further at the mid-term review (para. 4.6) and the strategy revised, if necessary.
4. PROJECT IMPLEMENTATION
4.1 The key elements of the Project Implementation Plan would be setting up competent management organizations for execution, supervision, monitoring, and control of operations, as detailed below. The implementation activities for the various components have been identified in detail. The Annex B (Project Implementation Plan) sets out details for project implementation.
A. ORGANIZATION AND MANAGEMENT
4.2 Overall Project Implementation: The Department of Water Economy (DWE) of the MAFWE would be responsible for the implementation of the project. The DWE has formed a Project Management Team (PMT) headed by a Project Director to implement the various components of the project. In this task, PMT would be assisted by the participating WMOs (para. 4.5) which are managing the different sections of the three schemes, as well as by the WlAs to be formed under the project. The PMT would select consulting firm(s) to carry out the engineering and management of contracts for civil works, assist in procurement, guide and control several technical studies, and implement institutional development programs.
4.3 Project Management Team (PMT): The PMT is essential for the efficient implementation of the project and coordinate project implementation activities. The PMT would be responsible for
(a) civil works implementation, including overseeing the planning and designs and providing decisions to the design and management consultant, direct responsibility for procurement and contracting, and supervision of works with the assistance of consultant, WMOs, and WUAs; - 29 -
(b) pursuing the studies for technical problems and improvement of water use by use of consultants; (c) formulation of programs and pursuing the implementation of the institutional development pertaining to WUAs and WMOs; and (d) financial management of the project, including the preparation and submission of withdrawal applications, liaison with the Bank including reporting to the Bank.
4.4 Staff of PMT: In order to assure strong and competent project management, the Government will ensure that the PMT will be organized, adequately staffed, and will continue to employ professional staff and Project Manager acceptable to the Bank. A total of 30 man/months of international consultants would be recruited to assist the PMT staff in areas of rehabilitation planning, procurement, financial management, and monitoring for the first three years of implementation. The director of PMT has been appointed with key staff satisfactory to the Bank.
4.5 Participating WMOs: Four main WMOs would be selected to participate in the Project. Their tasks would include: (a) providing assistance to the PMT in the planning, design and supervision of the rehabilitation; (b) monitoring the irrigation water quality (para 3.43), preparing an annual irrigation report (para 4.10); (c) assuming the principal responsibilities for implementation of the pilot programs; and (d) providing financial and accounting information to the PMT. Tikvesko Pole and Bregalnica Kocani WMOs have been selected to represent Tikves and Bregalnica schemes respectively, and Gostivar and Tetovo WMOs from Polog Scheme. The Project would finance US$500,000 of incremental operational cost to these four participating WMOs in total over the entire implementation period. Bregalnica Kocani WMO would also be responsible for implementation of the pilot self-help rehabilitation program and pilot improved on-farm irrigation management (para 3.21). The functions and responsibility of each of these WMOs for the project implementation would be stipulated formally in an implementation agreement between each participating WMO and MAFWE and in a format acceptable to the Bank, prior to loan and credit effectiveness. Their responsibilities for the project implementation would be taken over by the PWME once these WMOs are consolidated.
B. PROJECTPHASING
4.6 The implementation of the project components is planned in a five-year time-frame with two phases (Phase I: year 1 and 2, Phase II: year 3 to 5, para 4 of Annex B), considering that the rehabilitation work on the canals would be mainly conducted when the weather permits construction operations and the canals are not running, which limits the working period to about two months in October and November, and another two months in March, April and May. A comprehensive mid-term review is planned between these two phases to fully assess the progress of the project, particularly the outcome of several pilot programs. If these pilot programs are considered successful, a strategy to disseminate these pilot programs across the Project Area would be formulated, and the detailed plan on the technical assistance for the second phase would be formulated. As the country's water sector and agriculture sector are still in transition, this mid-term review would provide a valuable opportunity to reassess the sector issues and update the project benefits and risks. A mid-term review will be carried out by the Bank and the Government jointly no later than December 31, 1999 and the results of the review will determine the course of implementation of the remaining work under the project. -30-
C. SUPERVISION, MONITORING, ANDREPORTING
4.7 Supervision: Given the pilot and experimental nature of several critical components, the project would require intense follow up by the Bank supervision missions during the first two years of implementation. The Bank would undertake regular supervision and policy dialogue, field visits, and spot checks of rehabilitation works and development of WUAs. The supervision plan, attached as ANNEX F, provides details on the planned supervision issues for the Project. The Project launching mission would take place in October 1997 to assess the PMT strength, review the first year annual plan, and assist PMT in preparing Terms of Reference for several technical studies to be implemented during the first year. In addition, the launching mission would conduct a workshop to strengthen and review the procedures for procurement and disbursement. Subsequently, three Bank missions per calendar year would be conducted in 1998 and 1999, including a mid-term review.
4.8 Monitoring of Project Implementation: PMT would establish the types of information to be available to management for monitoring, and the procedures for its transmission from the information collection point to the PMT. A management information system would be established and implemented within the PMT to cover the progress and problems in execution of civil works (to reach PMT from management/design consultant as well as from WMOs), of Technical Studies (to reach PMT directly from the respective consultant for the studies), and of institutional development (to reach PMT from WMOs). PMT would submit to Department of Water Economy the information collected in a suitable form to permit an evaluation of the status of project implementation.
4.9 Key Performance Indicators: The project is expected to generate the following outcomes: (a) physical improvement of infrastructure through rehabilitation, (b) improved income of farning families, (c) improved management of irrigation systems, and (d) improved sustainability of the irrigation systems. Assusrances have been obtained that separate key indicators and other qualitative issues for each of these project outcomes will be used to monitor the actual impacts of the Project, as shown in Table D of Annex B.
4.10 Annual Reports: The PMT will prepare and submit to the Bank annual reports no later than November 15 of each year. The report would contain the following three sections: (a) Annual Progress Report; (b) Annual Work Plan for the Project; and (c) Annual Irrigation Reports for the Project Area. The details of the contents of each section are described in Annex B.
4.11 Quarterly Reports: In order to assure timely reporting to the Bank, assurances have been obtained that the PMT would submit quarterly progress reports on the progress and execution of the project in a fortnat agreeable to the Bank (refer para 21 of Annex B for an outline). Quarterly Reports would include the assessment of the selected indicators covering project inputs and outputs and would be split into sections suitably to provide the updated information on project implementation:
D. ACCOUNTSAND AUDITS
4.12 MAFWE will maintain accounting procedures acceptable to the Bank, and that independent auditors, acceptable to the Bank, would undertake an annual audit of the Project Account, which will be compiled by the PMT. Detailed accounts will be kept for each project component and its sub- components. The accounts will also reflect the status of payment against each contract; utilization of the - 31 -
Special Account (SA) and replenishments made by the Bank; and sources of funding used. Copies of the audit reports will be submitted to the Bank within six months of the close of the country's fiscal year. The audit report will cover both the compiled account of expenditure incurred during the FY as well as the SOEs used for withdrawals from the SA.
4.13 In addition, assurances have been obtained that the participating WMOs will submit an annual audit report within six months from the end of each fiscal year to ensure sound financial management during project implementation.
5. PROJECT BENEFITS AND RISKS
A. BENEFITS
5.1 The primary project benefits would be (a) increased agricultural production and the corresponding increase in incomes of farming families through the restoration and/or improvement of irrigation services; and (b) increase in the efficiency and sustainability of irrigation schemes through introduction of institutional reform including development of water user associations (WUAs) and restructuring of water management organizations (WMOs). In addition, the project would encourage farmers to economize the use of water through the enforcement of an appropriate, irrigation water tariff. The detailed Project impact is described in the Annex D, Economic and Financial Analysis.
5.2 Project Economic Analysis: An economic analysis was conducted separately for each scheme in detail. Costs for economic analysis include the full economic cost of rehabilitation works, the cost of design and supervision, and the estimated incremental operation and maintenance charges. The financial price of the agricultural products are converted into the economic prices based on farm gate parity prices. Considering the current marketing difficulties and time required for private farmers to update the irrigation equipment, conservative assumptions on the expected rate of the increase in the irrigation areas (10 years from the start of the project) and eventual irrigation percentage (reinstatement of 1990 level), are used. Under these assumptions, the estimated economic rate of return (ERR) would be 39 percent for Tikves, 21 percent for Bregalnica, and 36 percent for Polog. The ERR of the Project is 29 percent. Net Present Value of investment in Tikves, Bregalnica, and Polog estimated at 12 percent is US$23.5; 3.6; and 14.8 million, respectively. The total NPV for the project is US$ 37.8 million including the cost of the technical assistance.
5.3 Economic Benefit: The Project's economic benefits accrue through the following three channels: (a) return of the currently unirrigated and poorly irrigated land to full irrigation through the rehabilitation of deteriorated systems (Channel 1); (b) prevention of future decline (or collapse) of irrigation areas through improvement in the physical infrastructure (Channel 2); and (c) conversion to higher crops due to the availability and reliability of irrigation water (Channel 3). Channel 1 would be the most important factor4: it would account for about 40 percent, 50 percent and 30 percent of the expected economic benefit respectively in Tikves, Bregalnica and Polog. Channel 2 would be
The Projectwould improveirrigation in about6,000 hectaresof land, and fully restore irrigationin about 20,000 hectares. - 32 - particularly important in Tikves accounting for about 30 percent of the total economic benefit, as the system is expected to further deteriorate fairly quickly without the project. Channel 3 would also account for the large part of the economic benefit, particularly in Bregalnica and Polog: respectively about 30 percent, 43 percent and 69 percent of the expected economic benefit would accrued the crop conversion in Tikves, Bregalnica and Polog. However, assumptions used for the crop conversion are considered to be quite reasonable. In Tikves, with irrigation, certain areas would be converted to grapes, which has already captured market. In Bregalnica, crop conversion from rice to other crops such as fodder and vegetables are already on-going as price support for rice has been discontinued. In Polog, rapid conversion from rain-fed wheat to irrigated alfalfa and maize for livestock purposes is expected with the rehabilitation of irrigation scheme.
5.4 Sensitivity Analysis: A sensitivity analysis was conducted based on the two main types of risks identified below: (a) marketing (no conversion to higher crops in Bregalnica, half of the conversion in Polog and Tikves); (b) delay in the implementation due to difficulties in organizing WUAs and/or restructuring WMOs. The analysis revealed that the Bregalnica would be sensitive to these two risks: ERR would drop from 21 to 13 percent under either marketing difficulties or two years delay in implementation, still making the investment marginally economic, while Tikves and Polog scheme are less sensitive to these two risks (refer Table I of Annex D for details).
5.5 Impact on Farming Families: The project is expected to benefit about 20,000 small private farming families typically with 0.5 hectare to 2 hectares of irrigated land. Major impact of the project on the families would be increase in the farming income, which would be realized through (a) increase in farming opportunity (requirement) for resumed irrigation, and (b) increase in labor productivity. The additional labor requirement is not expected to be a major constraint, though most of the farming families are part-timers with a non-farming job for at least one family member. The average return per labor day would increase from Denar 968 to 1,138, an 18 percent increase. Upon the completion of rehabilitation, the annual income increase of the farming families would be (a) about Denar 10,000, for small farmers with an average of 0.7 hectare of irrigated land; (b) about Denar 32,000, for medium size farming families with 1.8 hectare of holdings; and (c) about Denar 27,000 for large farming families with 4.0 hectare of lands. The impact on mid-scale farms would be the most significant, as these farms would benefit from intensification. Smaller farms are often part-time farmers and are often facing constraint of labor availability. Larger farms often have smaller portion of high value crops such as vegetables. On average, the family incomes would increase by about 50 percent.
5.6 With the increase in the farming income, the affordability of the water tariff would increase. The ratio of water fee to the gross farming income would be reduced from 16 to 12 percent in Tikves and from 11-13 to 9-10 percent in Bregalnica. Interviews with farmers confirmed that these figures are closer to an acceptable level established at about 8 percent under SIZ. It is hoped that the figure would fall into the acceptable range with an introduction of more efficient water management.
B. RISKS
5.7 Risks to the Achievement of Project Objectives: The project would pursue several initiatives for institutional reform aiming to increase sustainability of rehabilitated irrigation canals in the midst of the low regional economy and the country's transitional policies. In this context, the following issues are - 33 - identified as risks to the project objectives: (a) market constraints; (b) low cost recovery; (c) delay in the reform of the WMOs; and (d) delay in the establishment of WUAs.
(a) Market Constraints: Market constraints are currently the dominant limiting factor in agricultural production. The success of the project would depend on the farmers' positive response to the rehabilitated irrigation, and farmers would not regain full irrigation unless they resume confidence in the marketing. While Macedonian agricultural products are generally competitive and used to have a steady market share in former Yugoslav countries and some western European countries, most of its market was lost in 1991 due to the outburst of hostilities among neighboring countries and the subsequent embargo imposed by the United Nations. Nonetheless, the project appears to be highly economic under a conservative assumption that the market would be fully restored in 10 years (para 5.2). It should also be noted that farmers are now required to market their product on their own in the light of the collapse of agro-kombinats. Under the ongoing Private Farmer Support Project, a component to improve agricultural market information will be implemented to develop a market news service and facilitate the flow of information to farmers.
(b) Low Cost Recovery: Low cost recovery from the water users would directly jeopardize the sustainability of rehabilitated canals. While the project envisages the full recovery of operational costs within three years, it would be essential to provide reliable water services to water user associations as a first step in order to break the vicious cycle of low cost recovery, deferred maintenance, and system deterioration. In the meantime, several initiatives, such as: introduction of participatory irrigation management and reform of WMOs, would be undertaken under the project to increase the efficiency of management and reduce the effective cost. During the project implementation, several key indicators such as (a) irrigation cost; and (b) cost recovery rate would be closely monitored to detect the early warnings.
(c) Delay in the WMO reform: Success of the project would also depend on the provision of an affordably priced reliable supply of irrigation water. As the process of restructuring the water sector has just started, and the planning is still to be completed, there is a risk that the process of reform may stall or deviate from its best course, and pose a serious threat to the project. Close monitoring of WMO performance and continuous policy dialogue during an annual review would be a key to mitigate the risk.
(d) Farmers' willingness to participate in the Project and Delay in WUA establishment: While the farmers' attitude toward the project, assessed during the project preparation, was favorable, a certain degree of skepticism is observed among farmers towards cooperative ventures which is symbolic of the experience gained during the socialist regime. This may handicap the performance of the WUAs, despite the counter-measures, such as training in group formulation, leadership and communication skills which would be provided under the project. It should also be noted that many farmers are part-time, with full-time off-farm employment for at least one of the family members. This would cause a limited interest in participation in activities to be implemented under the project, such as training, and attending/organizing WUA meetings. This is one of the reasons why the WUA program is commencing in a pilot manner in order to assess the farmers' capacity and willingness to participate in irrigation management. - 34 -
5.8 Risks to the achievementof project output: Availabilityof the counterpart funds is identifiedto be the most serious risk to project implementation. The project would require about US$ 8.0 million of counterpartfunds over five years. To mitigatethe risks, at an annual review, the next year's plan would be prepared, and the amount of the counterpartfunds for the next year would be calculatedand submitted to the Government. - 35 -
6. AGREEMENTS REACHED AND RECOMMENDATION
6.1 Assurances have been obtained that the Government would:
(a) implement measures to improve cost recovery rates for O&M in accordance with the following schedule: (i) for Tikves, 50 percent by December 31, 1998, 70 percent by December 31, 1999, 80 percent by December 31, 2000, and greater than 90 percent by December 31, 2001 and onwards; (ii) for Polog and Bregalnica, 35 percent by December 31, 1998, 50 percent by December 31, 1999, 70 percent by December 31, 2000, 80 percent by December 31, 2001, and greater than 90 percent by December 31, 2002 and onwards.(para. 3.50).
(b) ensure that all dams and reservoirs supplying water to the project are maintained and inspected periodically in accordance with sound engineering practices acceptable to the Bank (para. 3.48).
(c) ensure that quality of river water will be monitored periodically at agreed locations, and will maintain priority of water for meeting the irrigation demands (para. 3.43).
(d) would be adequately staffed and would continue to employ professional staff and Project Director that would be acceptable to the Bank (para. 4.4).
(e) would be audited annually by an auditor acceptable to the Bank and an audit report would be sent to the Bank within the six months from the end of each fiscal year (paras 4.12).
(f) ensure that the audit reports of the participating WMOs would be sent to the Bank within the six months from the end of each fiscal year (para. 4.13).
(g) ensure that the PMT would prepare and forward a quarterly progress report on behalf of the Government (para. 4.1 1).
(h) would ensure that the agreement between the MAFWE and Electrostovanstrovo over the release of the water from Mavrovo Dam will be duly complied with (para. 3.10)
(i) a draft of any bylaws to the new Water Law to the Bank for review and comments prior to its adoption (para. 3.37)
(j) establish two WUAs within each of Tikves and Bregalnica Scheme within a year from project effectiveness, and three WUAs within Polog Scheme within two years from project effectiveness (para. 3.40)
6.2 The following conditions of Board presentation have been fulfilled: - 36-
(a) Preparation of tender documents for the civil works to be implemented during the first six months (para. 3.36).
(b) Establishment of PMT with adequate staff acceptable to the Bank (para. 4.4)
(c) Identification of area for at least one WUA (para. 3.40)
(d) Completion of the second reading of new Water Law by the Parliament (para. 3.37)
6.3 The following are conditions for the Loan/Credit effectiveness:
(a) Satisfactory completion of an environmental evaluation describing general environmental conditions including the current quality of water (para. 3.43).
(b) Execution of an implementation agreement between the WMOs and the MAFWE (para. 4.5).
(c) Adoption of the new Water Law by the Parliament (para. 3.37)
6.4 With above agreement and conditions, the proposed Project would be suitable for a Credit of SDR 3.7 million (US$ 5.0 million equivalent) at standard terms of 35 years maturity including 10 years of grace, and a Loan of DM $13.5 million (US$ 7.5 million equivalent) at 20 years, including 5 years of grace, at the standard interest rate for LIBOR based Deutche Mark single currency loans. AnnexA Page I of 8
FORMERYUGOSLAV REPUBLIC OF MACEDONIAIRRIGATION REHABILITATION AND RESTRUCTURINGPROJECT
DETAILEDINFORMATION ON TIKVES,BREGALNICA, AND POLOG IRRIGATION SCHEMES
I. Introduction
1. Three of the larger schemes with high priory for rehabilitation, Tikves, Bregalnica, and Polog, have been selected for the Project. This annex gives general information on these three irrigation schemes.
II. General Description of Tikves Scheme
2. Climate and Agriculture. The Tikves climate is semi-arid, transitional between Mediterranean and Continental with average annual rainfall between 450 and 500 mm, and generally there is a moisture deficit of around 485 mm over the period April to September; irrigation is essential for some crops, beneficial for all and a pre-requisite to competitive economic agriculture. The major crop is vines, and in 1990 nearly 50 percent of the service area was planted to vines and orchards, the remainder being a mixture of cereals, vegetable, fodder and industrial crops. Since 1990 the irrigated area has declined considerably from 87 percent to 57 percent of the service area. 3. Land Ownership. Tikves scheme is fairly equally divided between private farmers and agro- kombinats, with 44 and 56 percent of the service area respectively, this is reflected similarly in each WMO service area. There are eight agro-kombinats in Tikves, with the largest, Tikves AK, being a very successful wine producer with a major share of the domestic market as well as being the leading wine exporter in the country. The number of private farmers participating in Tikves scheme is estimated at 8,700 individual households (11,641 recorded water users) with an average irrigated area of 0.7 ha. Most private farmers are orientated to grape production, this crop not only occupying the larger part of their land, but also being by far the most profitable.
4. The Scheme and Water Resources. Tikves scheme was constructed around 1970s with a service area of 13,000 ha divided between left and right bank commands. The water supply is drawn from the Tikves dam on the River Cma, a major tributary of the Vardar. The dam is the highest in the country (113.5 m), the reservoir has an active storage of 240 million m3 of which 90 million m3 is reserved for irrigation on a first priority basis, the remainder being used for power generation, and even in the drought period of the 1990s there was sufficient water to meet the full irrigation demand.
5. Irrigation System and Condition. The main elements of the Tikves irrigation system are: the dam, outlet tunnel (2 km), joint canal (9.7 km) leading to the division into the left main canal (38.3 km and 3,035 ha) and right main canal (59.9 km, including branches, 9,950 ha). On the main canals there are 5 tunnels, 20 siphons, 15 aqueducts and 2 control structures. The distribution system is pressurised pipes, generally at 400 m spacing with hydrants at 100 m intervals providing between 2.5 and 10.0 atmospheres for sprinkler irrigation. Over the majority (81 percent) of the area gravity supplies the pressure, but for 2,440 ha (19 percent) there are three pumping stations to supplement the pressure.
6. The Tikves dam is generally in a good condition, but there is damage to the approach section to the outlet tunnel. The concrete lining of the main canals is in a very poor condition; the main canal structures are generally better, having utilised higher grade concrete, but there is concern for the steel AnnexA Page 2 of 8 lining of the siphons; the distribution networks are generally in a good condition with only isolated deficiencies. The main attention therefore centres on the poor condition of the main canal lining which is attributed to (a) the generally poor quality initial construction, and (b) inadequate maintenance over the last decade. The overall condition of the main canals is summarised as follows:
Table A: Physical Condition of Tikves Main Canals
Descriptionof Condition %
In need of only routinemaintenance 6 Extensivecracks and minordamage, joints poor 31 MinorDamages with elementsso damagedas to requirereplacement 51 All elementssufficiently damaged or missingto warrantcomplete 12 replacement
7. Consequences of Continued Deterioration. The condition of the canal lining has two physical results: (a) there are significant water losses through seepage, and (b) because of the increased roughness the carrying capacity is reduced. The net effect on irrigation is that an adequate and reliable supply can no longer be provided, particularly for the lower part of the system. Without intervention this deterioration is expected to continue so that within 5 years the situation will be 70 percent unirrigated, 15 percent inadequately irrigated, whilst the upper 15 percent of the system will remain unaffected with good irrigation.
111.General Description of Bregalnica Scheme
8. Agriculture. The Bregalnica climate is semi-arid Continental with an average annual rainfall around 500 mm, and generally there is a moisture deficit of around 475 mm over the period April to September; irrigation is essential for some crops, beneficial for all and a pre-requisite to competitive economic agriculture. In the past the major crop was rice, grown in the area served by canals, mostly in Kocani, the remainder being a mixture of cereals, vegetable, fodder and industrial crops. However, since 1990 the irrigated area has declined considerably from 59 percent to 26 percent of the service area in 1996, in particular the rice area has declined following removal of the price support. Rice has a very high water requirement so the reduction in this crop will permit a substantial increase in other crops in the future.
9. Land Ownership. Bregalnica scheme is fairly equally divided between private farmers and agro-kombinats, with 52 and 48 percent of the service area respectively, however, there are large difference in these proportions in different parts of the scheme. In the left and upper right bank areas, managed by Kocani and Osojnica WMOs, there is preponderance of private farmers with 80 and 92 percent of the area respectively. In the lower right bank the position is reversed, with only 39 and 29 percent of the area occupied by private farmers in Stip and Ovce Pole respectively. There are seventeen agro-kombinats in Bregalnica, most are small in size, many with less that 100 ha, but there are five large AKs with over 1,000 ha which are in the lower right bank area. The number of private farmers participating in Bregalnica scheme is estimated at 11,000 individual households (14,815 recorded water users) with an average irrigated area of 1.2 ha. Rice production was the occupation of the majority of private farmers, mostly concentrated in Kocani and Osojnica, but this is less significant with the recent reduction in the area planted to rice. Annex A Page 3 of 8 10. The Scheme and Water Resources. Bregalnica scheme was constructed around 1970s with a service area of 25,510 ha divided between left and right bank commands. The water supply is drawn from the Kalimanci dam on the Bregalnica River, a tributary of the Vardar. At 95 m height Kalimanci is one of the major dams in the former Yugoslav Republic of Macedonia, the reservoir has a storage of 127 million m3 wholly allocated to irrigation, although power is generated by the irrigation releases. Releases from the dam are supplemented by side streams; however, there were severe water shortages in 1993 and 1994.
11. Irrigation System and Condition. The main elements of the Bregalnica irrigation system are: the dam with a release through the powerhouse into the river bed, the Istibanija diversion structure 11 km downstream of the dam, left main canal (35.680 km and 3,174 ha) and right main canal (98.585 km and 22,336 ha). On the main canals there are 26 tunnels, 18 siphons and 31 aqueducts. In addition to the main Istbanija structure there are 19 permanent diversion structures (16 on side streams and 3 on the lower R. Bregalnica) and several temporary diversions. There is a mixed distribution system. Over the majority of the area, 16,379 ha, there is a pressure pipe distribution system to service overhead irrigation, of this area 10,436 ha are pressurised by gravity, the remainder requiring booster pumps. In this area there are generally pressurised pipes at 400 m spacing with hydrants at 100 m intervals providing between 2.5 and 10.0 atmospheres for sprinkler irrigation. There are 8,551 ha (about 35 percent of the service area) served by open gravity canals, of which about 5,000 ha are precast concrete canalets", the remainder earth canals. A small area is served by portable pumps and pipelines.
12. Kalimanci dam is generally in a good condition, but needs repairs to the embankment and the gallery. The concrete lining of the main canals is in a poor condition, but better than Tikves due to the higher initial build quality. The main canal structures are generally sound, having utilised higher grade concrete, but there is concern for the steel lining of the siphons. The pipe distribution networks are generally in a good condition, with only isolated deficiencies, but the canalets are badly damaged. The main attention therefore centres on the poor condition of the main canal lining and the canalet. The overall condition of the main canals is summarised in the Table B below:
Table B: Physical Condition of Bregalnica Main Canals
In need of only routine maintenance 14 Extensivecracks and minor damage,joints poor 50 Minor damageswith elementsso damagedas to requirereplacement 36 All elementssufficiently damaged or missingto wanrantcomplete replacement 0
13. Consequences of Continued Deterioration. The condition of the canal lining has two physical results: (a) there are significant water losses through seepage, and (b) because of the increased roughness the carrying capacity is reduced. The net effect on irrigation is that an adequate and reliable supply can no longer be provided, particularly for the lower part of the system. Without intervention this deterioration is expected to continue so that, on Tikves, within 5 years the situation will be 70 percent unirrigated, 15 percent inadequately irrigated, whilst the upper 15 percent of the system will be unaffected with good irrigation. Deterioration will be slower in Bregalnica, but within 10 years the situation will be 80 percent unirrigated, 10 percent inadequately irrigated, whilst the upper 10 percent of the system will be unaffected with good irrigation. AnnexA Page 4 of 8 IV. General Description of Polog Scheme
14. Agriculture. The Polog climate is continental Mediterranean with an average annual rainfall of around 800 mm, and generally there is a moisture deficit of around 300 mm over the period of May to September; irrigation is essential for all crops (except wheat) and a pre-requisite for competitive economic agriculture. The main crops in the area are maize with intercrop of beans, fodder crops, wheat, orchards, and vegetables. With the deterioration of the irrigation systems, the wheat area has increased but it will decline when good supplies are restored. Vegetable area has decreased with the loss of market. The irrigated area decreased from 53 percent in 1990 to 47 percent in 1996. Irrigation will pick up fast after rehabilitation as farmers, each having livestock, are keen to increase the fodder yields (5 times) with irrigation. The cropping pattern is oriented to meeting livestock requirements, the livestock products of the area having been relatively less affected by the market shocks. There is also good potential of the area supplying animal feed to other areas in the country and for export.
15. Land Ownership. Unlike Tikves and Bregalnica, most of the area under the scheme belongs to private farmers. Only 3 agro-kombinats own 725 ha in Tetovo service area (8 percent of total). In Gostivar, all land is private. The number of private farm households is about 5,800 in Tetovo and 4,500 in Gostivar (respectively 7,783 and 6,002 water users). However, the rehabilitation would concern only parts of the service areas and the number of beneficiaries of project intervention has been estimated at about 4,500 households, including 2,400 in Tetovo and 2,100 in Gostivar. The average area with irrigation facility per household is about 1.6 ha. This is bigger than in the other two schemes but the size of the households in the Albanian areas are also bigger than elsewhere.
16. The Scheme and Water Resources. The Polog scheme was initially constructed in 1961 -1964 for 9,350 ha, to which 4,000 ha were added during rehabilitation in 1984. The Polog scheme service area of 13,350 ha receives water by diversions from the Vardar river through four intakes, two of which do not have diversion structures. The scheme is located in an area where Vardar descends from the hills and the river discharge is insignificant in the irrigation period from May 15 to September 15. Therefore, the irrigation supplies are completely dependent on the releases from the Mavrovo Reservoir (277 million m3 live capacity), which was constructed in 1957 for irrigation and power generation.
17. The Electric Power Company of Macedonia (ECM) maintains the Mavrovo dam and controls the releases for power generation. Power generation at Mavrovo is vital for the country's grid particularly during peak load, as the reservoir is the largest in the country for hydro-power generation. During the irrigation season, the power plants are operated between 6 am to 10 pm with plant load variation for peak load (7 to 8 am, 2 to 3 pm, and 9 to 10 pm), which could be two to four times the average load. For the last ten years, the irrigation requirements have been low as only a fraction of the irrigation system has been utilised due to the system deterioration. Releases from Mavrovo have therefore been limited to this reduced demand during the irrigation season, and the variation of Vardar supplies due to short duration peak loads has caused problems at the Polog intakes. With full rehabilitation of the scheme, the total quantity of water to be released during the irrigation season and the pattern of its release (low in May and June, high in July and August, and again low in September) will need to be satisfied by the power releases. During appraisal, the ECM assured that it would be possible to meet the irrigation requirements in full, as ECM will honour its agreement with the MAFWE set out in the water license for the supply of water up to 13 m3/sec during the irrigation season, which is the requirement of Polog and other irrigation schemes depending on Mavrovo water during the peak irrigation demands of July and August. Since the reservoir is at maximum level at the beginning of May, the pattern of use of water for irrigation and the daily release can be agreed in advance between ECM and MAFWE. The inflow in the Mavrovo reservoir at 75 percentassurance is 205 million m3, out of which it will be possible to supply the full irrigation requirement of about 70 million m3 with releases according to the pattern of the irrigation demand. Releases for short duration peaking shall be in addition to the irrigation demand. AnnexA Page 5 of 8
18. Irrigation System and Condition. The Polog scheme comprises (a) Banichko Pole canal 4.6 km long for a service area of 400 ha on the right bank of Vardar with intake on the river slightly upstream of the junction of the Raven power station tailrace with the Vardar; (b) Gostivar canal 14.9 km long for 4,300 ha on the left bank of Vardar, with intake at a diversion structure on the Vardar, about 1.5 km downstream of the junction of Raven tailrace; (c) Lom canal about 7 kms long with intake on the Vardar about 10 km downstream of the Gostivar intake for providing irrigation water to about 1,100 ha (within the command of Gostivar); and (d) Tetovo canal about 26 km long, with intake at a diversion structure on the Vardar about 9 km downstream of the Lom canal intake for irrigating 9,200 ha on the left bank of Vardar. Tetovo canal provides water to two pump stations; one on the right bank of Vardar (5 pumps for 990 ha) and the other on the left bank (6 pumps for 1,100 ha). The Lom canal and Tetovo canal have limited advantage from the dry season flows from the small tributaries of the Vardar. The irrigation on the entire area of Polog scheme is carried out by furrows. Secondary pipelines for delivery of water to the earthen unlined tertiaries exist in Gostivar area. In Banichko and Tetovo area, the secondaries are open earthen canals which are partly lined, while tertiaries are invariably earthen unlined ditches. The deterioration of the system can be briefly summarised as:
(a)The Banichko Pole main canal running along the contour on the hill sides has conveyance losses. It shall be resectioned and lined in about 80 percent of its length. The secondary canals are in good shape and farmers are conveying water to their field satisfactorily. No work is therefore proposed on these canals.
(b)The Gostivar main canal was rehabilitated in 1986 and is in good shape, though maintenance could have been better. The rehabilitation is proposed on the pipe network only, and meters will be installed on all the pipe lines just after the turnouts to measure the water supplied. The estimates for the network improvement include necessary changes for supply to the distribution pipes for the area in the lower villages of about 1,100 ha, where network exists and where water is also received from the Lom canal. The Lom canal was activated (the 1920 canal rehabilitated) by the farmers as water could not reach their area from the pipe network due to various factors. The rehabilitation of this portion of the network would be subject to further discussion with the farmers of the area and an alternative rehabilitation technique to provide sufficient water for irrigation could be adopted within the cost provided.
(c) The Tetovo main canal and its distribution system was rehabilitated in 1986 from the head to km 12.10 This system is in good shape but maintenance could have been better. Rest of the main canal from km 12.10 to km 26.00 has broken lining and less capacity. The canal resectioning including flattening of the canal side slopes and concrete lining with drainage, as adopted in the upper part, will be carried out. The distribution system of this area will be rehabilitated in full as it has deteriorated badly from being out of use. The two pumps in the left bank pump station have to be replaced and repair of minor damages to the pump station and the two concrete lined secondary canals have to be carried out.
19. Consequence of Continued Deterioration. Without rehabilitation, the Banichko canal losses will increase resulting in progressive reduction of the irrigated area. In addition, the stability of the canal bank on the hill side slope would deteriorate resulting in frequent breaches and dislocation of irrigation. Irrigation would reduce further from the current 40 percentto 30 percent. In the Gostivar area, unless pipe network is rehabilitated, the breakdown of supply to the farmers will become more and more frequent resulting in complete frustration of the farmers. The lower 14 km section of the Tetovo main canal has not been able to carry the required supplies, the farmers not having received water for about seven years. The earthen distribution system (some of which are concrete lined) are out of use, covered with earth and vegetation. If rehabilitation is not carried out, the few farmers getting water now (irrigation 24 percentin lower area) will also cease to get water. AnnexA Page 6 of 8
V. CurrentIrrigation Management
20. WMOs: There are three, four and two WMOs in Tikves, Bregalnica and Polog Schemes, respectively. Irrigation scheme in Tikves is managed by three WMOs, Tikvesko Pole, Makaria and Negotionko Pole. Tikvesko Pole, located in the upstream of the scheme and being in charge of a dam and main canals, distributes irrigation water to other two WMOs, Makaria and Negotinsko as well as 4,342 farmers and 1 large and 4 small AKs in 1996. Makaria and Negotinsko Pole WMOs, serving 2,318 and 2,450 farmers respectively and I large AK in Makarija, I large and 3 small Aks in Negotinsko Pole in 1996, manage only distribution system. Bregalnica scheme is managed by four WMOs, Bregalnicako Pole, Osojnica, Stip and Ovceko Pole. Bregalnicako Pole WMO maintain Kalimanci Dam and primary canals, whereas the other three WMOs are responsible for the secondary and distribution irrigation networks. Polog Scheme is managed by Gostivar and Tetovo WMOs. Table C shows the overview on the operation of Tikvesko Pole, Bregalnica Kocani, Tetovo and Gostivar WMOs. The accounts in Bregalnica and Tetovo show a current deficit due to a decrease of the due water fees (principal source of income) as a result of a decrease in irrigated areas over the past years. This is compensated by a decrease in actual maintenance work and provision for maintenance. However, at the same time, the incomes as shown in the accounts are not actually entirely received as part of the due water fee is not paid (see following Table). Therefore, in 1996, Bregalnica and Tetovo WMOs increased their account receivable by about 50 percent and 64 percent respectively (data was not available in Tikves). A major part of these WMOs' assets are fixed assets (i.e. canals and reservoirs) and account receivable. As cash and near cash asset would cover only one third of its short-term debt obligation, these WMOs may have serious liquidity crisis if it has further difficulties in collection.
21. Table D shows the overview on the recent cost recovery rate of six WMOs. It clearly shows the downward trend of cost recovery rate starting in early 1990s. While the cost recovery rate in Tikves is expected to increase in 1996 with the redevelopment of wine export, that in Bregalnica would further decrease to a lower level in 1996, as farmers cultivating rice, main irrigated crop of the Bregalnica region until a progressive conversion to other products, continues to experience marketing difficulties. In Tetovo WMO, the cost recovery rate appears higher, benefiting from the rehabilitation, in 1986, of a part of the scheme where both irrigated areas and payment rate by farmers reach satisfactory levels. AnnexA Page 7 of 8
Table C: Overview of Operation of the Four Participating WMOs
Tikvesko Pole | Bregalnica T Gostivar T Polog - Tetovo 1995 1996 1996 1996 No. of Employees (Dec.31, 1996) Operations 94 170 48 156 Technical Staff 22 38 10 25 Accounting/Financial 9 21 7 6 Other Administrative 10 14 4 9 Total 135 243 69 196 Plus Seasonal 20 16 40 45 No. of water users Private Farmers 4,342 7,884 7,300 11,300 Operating Agro-Kombinats 5 6 0 3 Command Area (ha) 6,169 8,447 6,350 7,000 rrigated Area (ha) 3,779 3,903 1,489 5,000 h Irrigated 61 46 23 71 Staffing Ratios Operations Staffper 1, 000 ha Constructed 15 20 8 22 Operations Staffper 1, 000 ha Irrigated 25 44 32 31 Total Staff per 1,000 ha Constructed 22 29 11 28 Total Staff per 1,000 ha Irrigated 36 62 46 39 Financial Statistics Total Asset (US$ mil) 13.2 42.6 3.3 11.6 of which: fixed asset (%) 75.3 93.5 93.1 86.6 accounts receivable (%) 21.3 5.4 4.7 10.9 evenues (US$ mil) Avg. of 2 Years I Year I Year I Yea Total Annual Revenue 2.05 2.05 0.36 1.83 Cost Recovery (%/6) 85 51 71 68 Annual Increase in Account Receivable (%/6) 53 49 8 64 Annual Operating Costs, excluding Interest and Barter (US$ mil) 1.16 2.45 0.52 1.95 of which: Depreciation (%) 25.4 54 16 17 Operating Costs, excluding Interest and Barter per Constructed ha (US$ '000) 188.4 290.17 82.58 Not Applicable perating Costs, excluding Interest and Barter r Irrigated ha (US$ '000) 307.55 628.00 352.19 Not Applicable perating Costs, excluding Interest, Barter and Depreciation per Constructed ha (US$ '000) 140.49 132.39 69.37 Not Applicable perating Costs, excluding Interest, Barter and Depreciation per Irrigated ha (US$ '000) 229.34 286.52 295.83 Not Applicable nual Net Profit(loss) US$ mil. 0.49 (0.44) (0.15) (0.22) 1 Year Change in Cash US$ mil. 0.24 0.15 0.02 0.00 Notes: 1) Tikvesko Pole's financial numbers are average for a 2 year period. No closing was made for 1995 2) Only approximately 33 percent of Tetovo's revenues ($ 6 million ) are from irrigation activities. Exchange Rate: $1.00 = 44 Denar
Table D: The Cost Recovery Rate of WMOs within the Project Area (percent of O&M Cost)
Negotino 88% 85% 83% 85% 77% 70% 40% Kavadarci 88% 77% 63% 65% 40% 39% 31,/ Osojnica 87% 48% 48% 52% 10% 23% 21/ Bregalnica 88% 70% 65% 67% 31% 37% 46/ Tetovo 62% 61% 54% 58% 59% 55% 520/ Gostivar n.a. n.a. 51% 37% 35% 41% 410/ Average for the Six WMOs 83% 68% 73% 73% 50% 53% 46% AnnexA Page 8 of 8
VI. Project Beneficiaries
22. Project Beneficiaries: Table E summarizes the beneficiaries of the Project. This section describes the general characteristics of private farmers in the project area.
Table E: Project Beneficiaries
Scheme | Private Agro-Kombinats Farmers Tikves 8,700 8 Bregalnica1) 11,000 17 Polog 4,500 3 Note: 1) Whole Scheme
23. Private Farmers: Main characteristics of the private farmers are (a) their small holding sizes (average 1.5 to 2 ha, including non-irrigable land) and (b) their dependence on off-farm employment. The majority (50 to 60 percent in Tikves and Bregalnica and up to 90 percent in Polog) of private farmer house- holds in the project area have at least one member engaged in off-farm employment and are often referred to as part-time farmers earning farming income as a supplement. The term "part-timers" can be misleadng, however, as many households, especially in the Polog area, still have one or more other household members working full-time on the farm. The household size varies between two and about ten members, the smaller households usually being nuclear families, the larger ones are extended families (three generations) or joint families (two or more brothers) or a combination of these two.
24. Agro-Kombinats (AKs) which currently have land under the proposed schemes (in Tikves: 7,323 ha; Bregalnica: 12,128 ha; Polog: 725 ha) will also benefit from the project. However, the Government intends to privatize part of these state lands and lease the remaining state lands to privatized AKs. In order to become profitable enterprises, many AKs will need to retrench staff, this process has already started. Considering these reforms in the near future, a realistic number of beneficiaries for the present AK lands is difficult to assess.
25. Poverty status: In none of the three schemes is there real poverty in the sense of families not being able to meet the most basic needs. In fact, it appears that the majorty of beneficiaries are relatively well-off, considering the current assets of most families including proper housing, TV, washing machine and often a tractor (even if outdated). However, under the current unemployment condition, and the lack of agricultural markets, together with termination of the subsidies for farm inputs, cash incomes of many farning families have been severely reduced. Many of the farm holdings presently operate at subsistence level, with the deteriorated irrigation service is partly responsible. In particular the families without off- farm income had to adjust their spending pattern and claim to be unable to replace any farm equipment or household assets in case they break down. It is expected, however, that the marketing conditions would improve in the near future; the lifting of the trade embargos against neighboring countries and the recent agreement with the former Yugoslav Republic countries on agricultural export together with the gradual improvement of the local private marketing channels are likely to improve the market situation. However, farmers may have some difficulties in accepting the new marketing mechanisms with reduced subsidies and less protection. This may mean that small farmers may need to substantially improve their productivity; otherwise, these farmers would have to remain dependant on off-farm income. AnnexB Page I FORMER YUGOSLAV REPUBLIC OF MACEDONIA IRRIGATION REHABILITATION AND RESTRUCTURINGPROJECT
PROJECT IMPLEMENTATIONPLAN
CONTENTS
I. PROJECT
H. IMPLEMENTATIONSUMMARY
III. PROJECT COST
IV. PROCUREMENT ARRANGEMENT
V. DISBURSEMENT
VI. MONITORING AND REPORTING
ATTACHMENTS:
ATTACHMENT I: DESCRIPTION OF INSTITUTIONALDEVELOPMENT I-A: PILOT WATER USER ASSOCIATIONSSUB-COMPONENT I-B: SELF-HELP REHABILITATION OF THE OPEN CANAL SYSTEM IN BREGALNICA I-C: RESTRUCTURING THE WMOS I-D: MODELING STUDYFOR WATER RESOURCE I-E: PILOT WATER IMPROVED WATER MANAGEMENT
ATTACHMENT II: TERMS OF REFERENCE FOR THE TECHNICAL STUDIES 1I-A: ALGAE PROBLEM Il-B: INSPECTION OF SIPHONS II-C: ESTIMATION OF FLOODS II-D: TIKVES TUNNEL RE-ALIGNMENT
ATTACHMENT III: DETAILED COST TABLES
ATTACHMENT IV: DETAILED PROCUREMENT PLAN
ATTACHMENT V: SUMMARYOF INSTITUTIONALDEVELOPMENT, TECHNICAL STUDIES, AND PMT SUPPORT (BASE COST)
ATTACHMENT VI: TERMS OF REFERENCE ON ENVIRONMENTALMONITORING Annex B Page 2
I. Project
1. Project Objectives: The primary objectives of the Project are: (a) to enable the private farmers to regain the agricultural potential of their lands by rehabilitating three high priority irrigation systems; and (b) to initiate structural reform in the irrigation sub-sector to complement the ongoing agricultural sector reform. The structural reform would include restructuring the operation and maintenance (O&M) practices of the three irrigation schemes through more efficient and cost-effective methods based on user participation and reform of the present Water Management Organization (WMO). Farmers would be encouraged through pilot trials to adopt more advanced technology for irrigated crops and to diversify into the crops requiring less water still having good marketing opportunities.
2. Project Components: The project would have the following main components: (i) the rehabilitation of the irrigation systems of the Tikves, Bregalnica and Polog Schemes; (ii) an Institutional Development program; (iii) a Technical Studies Program; (iv) Project Administration and Monitoring; and (v) Impelementation Support for WMOs. II. Implementation Summary
3. The project would be implemented over a period of five years (October 1997 to 2002). The rehabilitation work on the canals would be possible only when the weather permits construction operations and the canals are empty. This limits the working period to about two months in April and May, and another two months in October and November. A two-phase approach is proposed. A very important mid-term review would assess the project progress, particularly on the three pilot initiatives (development of WUAs, improved irrigation techniques and self-help rehabilitation) for full-scale dissemination across the entire Project Area during the second phase.
4. Phase I and II respectively contain the following components:
(a) Phase I:
Rehabilitation of Main Canals and Structures in three Irrigation Systems. All of Institutional Development under Component 2 All of Technical Studies under Component 3
(b) Phase II:
Rehabilitation of Network Structures in Irrigation Systems Dissemination of Pilot Programs across the Project Area
During the first phase, the rehabilitation would be focused on the repair of main structures such as main canals and dams which would have immediate and major impact on the whole irrigation scheme. During the second phase, then highly deteriorated secondary networks would be rehabilitated. This approach would ensure the budget allocation to the main structures and allow sufficient time during the implementation to identify the need for rehabilitation across the whole irrigation scheme including the secondary networks. All of the pilot programs and technical studies would be completed during the first phase. The outcome of these programs and studies would be reviewed and strategies for dissemination across the Project Area would be developed during the mid-term review. AnnexB Page 3 5. Overall Project Implementation: The Department of Water Economy (DWE) of MAFWE would have overall project implementation responsibility. The DWE would form a Project Management Team (PMT) headed by a Project Manager to implement the various components of the project. In this task, the PMT would be assisted by the participating WMOs (refer para. 8) which are managing the different sections of the three schemes, as well as by the WUAs to be formed under the project. The PMT would select consulting firm(s) which would assist it in (i) carrying out and preparing the engineering and management of contracts for civil works; (ii) technical assistance support for the PMT; (iii) implementing institutional development programs and (iv) , several technical studies. Table A below illustrates the responsibilities of each institution during project implementation. Table A. Implementation Responsibilities
1. Liaison with the Bank including submission of withdrawal applications and progress reports x 2. Execution of Civil Works component _ (i) Preparation of detailed designs, and tender documentation for works x x x or goods (ii) Coordination with WMO x x x (iii) Obtaining World Bank "no objection" of documents, where required x (iv) Issue of Tenders, receipt of bids, and evaluation of bids for contract x x award (v) Review of evaluation by Consultant including obtaining World Bank "no objection," when required x (vi) Award of contract x (vii)Supervision of execution, quality control, verification of contractors bills for payment (the PMT will issue detailed instruction. WMO will place staff at disposal of consultant. WUA to assist in access and x x quality control) (viii)Payment to contractors, keeping accounts by categories of work, and by contractors, and complete contract management x 3. Execution of Technical Studies of component (i) Finalizing invitation letter and TOR for procuring consultancy, preparing short list x (ii) World Bank "no objection" of documents x (iii)Monitoring progress on the execution of consultancy and providing x x| assistance (iv) Verification of consultant invoices and payments, including disbursements from World Bank x 4. Execution of Institutional District component x
6. Project Management Team (PMT): The formation of the PMT is essential to efficiently implement the project and coordinate project implementation activities. The PMT would be responsible for:
(a) civil works implementation, including planning and designs, procurement and contracting, and supervision of works;
(b) supervision of the pilot studies and the technical studies; AnnexB Page 4 (c) formulation of programs and implementation of the institutional development pertaining to WUAs and WMOs; and financial management of the project, including withdrawal of funds from, and reporting to, the Bank.
7. Staff of the PMT: The PMT staff would include a Project Director, assistant director, an Accountant and a Procurement Officer with the necessary support staff and office equipment. A total of 30 man/months of expatriate consultants would be recruited to assist and train the PMT staff in areas of rehabilitation planning, procurement, financial management, and monitoring for the first three years of implementation. The responsibilities of the PMT staff are discussed below.
(a) The Project Director, working under the overall guidance of the Director of the Department of Water Economy (DWE) of MAFWE would be responsible for all project implementation and coordination of all project implementation activities. He/she would ensure that the project is implemented in accordance with the schedules, plans and procedures agreed with the World Bank.
(b) Assistant Project Director, under the supervision of the Project Director, would be responsible for management and supervision of the pilot programmes and technical studies, and would act for the Project Manager in his/her absence.
(c) The Procurement Officer, under the supervision of the Project Manager, would be responsible for (i) preparing detailed procurement plans based on the overall project procurement plan; (ii) implementing these plans; (iii) preparing bidding documents; (iv) setting up evaluation committees; (v) organizing public bid openings; (vi) coordinating evaluation of bids and awarding of contracts; and (vii) coordinating supervision of contract performance. The Procurement Officer will also prepare periodic progress reports on procurement.
(d) The Accountant, under the supervision of the Project Manager, would be responsible for (i) keeping all project accounts accurate and up- to-date; (ii) helping the Project Manager manage the special account; (iii) preparing withdrawal applications; (iv) payments to suppliers, contractors and consultants; and (v) preparing periodic accounting reports.
The PMT staff would be provided with the necessary training in project management, procurement and disbursements.
8. Participating WMOs: Four WMOs would participate in the Project. Their tasks would include: (a) providing assistance to the PMT in the planning and design of the rehabilitation; (b) monitoring the irrigation water quality, preparing an annual irrigation report; and (c) assuming the principal responsibilities for implementation of the pilot programmes. The Project would finance a total of US$500,000 of incremental operational cost to the participating WMOs over the entire implementation period. Tikvesko Pole and Bregalnica Kocani WMOs have so far been selected to represent Tikves and Bregalnica schemes respectively. Bregalnica Kocani WMO would also be responsible for implementation of the pilot self-help rehabilitation program and pilot improved on-farm irrigation management. Two WMOs, Tetovo and Gostivar would represent Polog Scheme. The responsibilities of the WMO would be defined and agreed by a separate Project Implementation Agreement between the Government and each participating WMO. Annex B Page 5 III. Project Cost
9. The proposed project is estimated to cost approximately US$32.5 million based on late-1996 prices, including physical and price contingencies. Detailed cost tables are provided as Attachment III to this Annex.
IV. Procurement Arrangements
10. Procurement: The implementation of the project would require the procurement of civil works, goods, and consultants. The procurement of goods and works under the project would be conducted in accordance with the Bank's guidelines "Procurement under IBRD Loans and IDA Credits," January 1996. The procurement of consultants would follow the Bank's guidelines, "Selection of Consultants by World Bank Borrowers," January 1997. A General Procurement Notice has been published in the Development Business in July 1997. All of the two civil works contracts to be financed under the retroactive financing (CWC 101, 201) would be procured by NCB in compliance with the Bank procedures. If the Government of Netherlands cofinances the Project through the Trust Fund administered by the Bank, Bank procurement rules would apply to the items to be financed by the Government of Netherlands.
11. The responsibility for procurement would rest with the PMT. The progress on procurement would be reported in a suitable format to the Bank in the quarterly reports. The Design and Contract Supervision Consultant would assist the PMT in the preparation of the procurement documents and processing of the offers received. The PMT would have a full-time position for procurement activities. The PMT would also have an expatriate specialist in procurement. The expatriate would provide on-the- job training to the PMT full-time procurement staff. In addition, the PMT procurement staff would be trained both in Bank-organized seminar and, a project start-up workshop would be held in October 1997. 12. The procurement arrangements are summarized in Table B, and briefly described below, and a detailed project procurement plan is shown in Attachment IV. AnnexB Page 6 Table B: Procurement Procedures (US$ Million) ICB NCB Other NBF Total
A. Works 4.06 12.34 0.0V 8.20/' 24.69 (3.05) (8.44) (0.06) (0.00) (11.55) (0.00) (0.00) (0.00) (6.34) (6.34) B. Goods Fieldand Office Equipment 0.(8'° 0.18 (0.00) (0.00) (0.18 (0.18) Equipment,Materials and Machinery 1l.6' 0.28 1.44 (0.80) (0.00) (0.80) (0.00) (0.28) (0.28) Total Goods 1.62 (0.80) (0.46) C. Vehicles 0.16/6 0.08'6 0.24 (0.16) (0.00) (0.16) (0.00) (0.08) (0.08) D. Consultants'Services Designand ConstructionSupervision. 0.82'7 0.82 (0.00) (0.00) (0.00) (0.00) TechnicalAssistance 2.93/8 2.93 (0.00) (0.00) (2.93) (2.93) Training 0.21'9 0.21 (0.00) (0.00) (0.21) (0.21) Total Consultants' Services 3.96 (0.00) (3.13) E. PMT National Staff 0.85'°) 0.85 (0.00) (0.00) (0.85) (0.85) F. IncrementalO&M Cost 1.12/1" 1.12 (0.00) (0.00) Total 4.06 12.34 1.40 14.67 32.46 (3.05) (8.44) (1.02) (0.00) (12.50) (0.00) (0.00) (0.00) (11.98) (11.98) Notes: The first and second figures in parentheses in the total column represent disbursement by the Bank and the Government of Netherlands respectively. NBF: Non-Bank Financed 1/ to be carried out by national shopping. 2/ exclusively financed by the Government of Netherlands: of which: $8.17 million, $ 0.03 million to be carried out through national competitive bidding, and national shopping respectively 3/ international shopping (I contract) entirely financed by the Government of Netherlands 4/ of which $1.04 million to be procured under International Shopping Procedures (2 contracts for construction materials (cement), ($0.25 million), 2 for hydrant and valves ($0.36 million), 2 for measurement equipment ($ 0.43 million),)), and of which $ 0.12 million to be procured under national shopping procedures (2 contracts for gravel and sand, I contract for minor construction equipment) 5/ specialized equipment to be used for T/A, exclusively financed by the Government of Netherlands: 4 contracts for other small specialized equipment ($ 0.24 million) to be procured by Internationl Shopping, 3 for small equipment estimated at $40,000 in total would be procured through National Shopping. 6/ to be procured under International Shopping. 7/ Direct Contract Based on Single Source Procurement for the first phase exclusively financed by the government. 8,9/ Entirely financed by the Government of Netherlands: Consultant services for advisors, national and international experts to be procured under the QCBS procedures in accordance with World Bank Guidelines 10/ Entirely financed by the Government of Netherlands: Selection of individual national experts based on the qualifications. 11/ Entirely financed by the Government of Netherlands: of which: US$ 0.50 million paid to the four participating WMOs for incremental staff cost (paid against invoices), US$ 0.56 million paid to cover the implementation support for WMO for project management (utilities, translation, office rent) against invoices, US$ 0.06 million for Project Audit to be selected under the Least Cost Procedures in accordance with the World Bank Guidelines. Annex B Page 7
(a) Civil Works: The contracts estimated to cost above US$ 1,000,000 each would be awarded under ICB; those below US$1,000,000 each under NCB. Most of the civil works under the Project would be carried out by contracts procured under NCB, due to the geographically and timely scatted nature of the required works: the execution of civil works, other than repair of siphons, would be permissible only under favorable weather conditions (i.e. no frost) during the non- irrigation season between September and late March/early April. In general, major rehabilitation in main canals would be started in early September to assure its completion by the next irrigation season and the minor repairs and rehabilitation of network irrigation would be started in October to feed back the result of the previous irrigation season. By nature, rehabilitation works of irrigation canals are simple and labor intensive, and require contractors to conduct full survey of existing irrigation systems before participating in bidding; therefore, local contractors would have a clear advantage. Furthermore, there are a large numbers of private contractors (4 large ones employing 2,000 to 5,000 staffs and 28 medium ones with 100 to 900 employees), providing competitive environment which makes foreign bidders difficult to compete with. The total amount of NCB contracts for the Bank-financing would be US$ 12.34 million. For the repairs to the siphons and major rehabilitation works would be procured through three contracts under ICB. Small works estimated to cost US$30,000 would be awarded on the basis of quotations from at least three domestic contractors. The total amount of such contracts would not exceed US$ 60,000.
(b) Goods and Vehicles: The Project would require the procurement of goods comprising vehicles, office equipment, measurement equipment, and irrigation hardware such as hydrants, valves, pipes. The procedures to be used for procurement would be (i) ICB for a single contract above US$250,000; (ii) International Shopping (IS) for a single contract below US$250,000, subject to the condition that the total of such contracts would not exceed US$1,040,000 for goods and $160,000 for vehicles, and (iii) National Shopping (NS) for a single contract below US$ 50,000 subject to the condition that the total of such contract would not exceed US$ 120,000. For IS, at least three quotations from different suppliers in at least two countries would be obtained.
(c) Consultants ' Services: The consultancy contracts would include the services of (i) a consortium of international and national firms to provide the international technical assistance for the PMT and for the pilot studies and trials, as well as the technical studies, and (ii) national consultants to prepare the designs and tender documents for civil works, and to supervise construction. The contracts for the international consortium ((i) above), to be financed by the Government of Netherlands, would be concluded on the basis of Quality and Cost-Based Selection (QCBS), and individual experts needed for the project would be selected through comparison of qualifications. National consultants for design and supervision ((ii) above), to be financed by the Government, would be selected through qualifications. (d) Other Expenditure Items: Incremental O&M Cost, to be financed by the Government of Netherlands, would be paid to participating WMOs to cover incremental staff and administration cost incurred by the Project. Each participating WMO will provide a list of staff designated to the Project. Translation and transportation services would be procured locally through shopping procedures. Any other expenditures such as utilities, telephone, and office space will be paid against invoices.
13. Bank Review. The Borrower would use Bank's Standard bidding documents for ICB procurement. The NCB document would be based on the Bank's Standard Bidding Documents (small works), and would be submitted to the Bank in draft prior to its use. For consultant assignment for which QCBS would be used, Bank's standard forms of contract would be used. The documents for the AnnexB Page 8 ICB contracts would be subject to prior Bank review. First two NCB contracts using retroactive financing, the first small work and the first IS contract would be subject to prior Bank review. All other contracts procurement documents and procedures would be subject to Bank ex-post review on random basis. All QCBS consultant contracts would be subject to Bank's prior review.
V. DISBURSEMENT
14. The proposed Bank loan and credit in agrregated amount of US$12.5 million equivalent would be disbursed over a period of six years, and the expected closing date would be September 30, 2004. While there is no experience yet to form a disbursement profile for the former Yugoslav Republic of Macedonia, it is estimated that six years would be sufficient to implement the project, given the nature and size of the project and the past experience in the the Socialist Republic of Yugoslavia.
15. The proceeds of the loan and credit would be disbursed as shown in Table 3-3 of the SAR. The target disbursement profile for the Bank is shown in the Table C below. This target profile would be annually updated depending on the actual progress of the project.
Table C: Target Disbursement Profile (US$ '000)
,,,..r ...... 2 yr... W 4. . t ......
Project Special Account 500 250 - - (-)500 (-)250 0 Goods 300 300 100 0 0 700 Civil Works 500 2500 3100 2500 1500 1700 11800 Total 1300 3050 3200 2500 1000 1450 12500
16. Disbursements would be made upon receipt by the Bank of fully documented applications except for: (i) contracts for works valued at less than US$1,000,000; (ii) contracts with consulting firms valued at less than US$100,000; and (iii) contracts with individual consultants valued at less than US$50,000; contracts for goods costing less than US$200,000. Disbursement for these items would be made against statements of expenditures (SOEs). Supporting documentation for SOEs would be retained by the PMT and made available to the Bank during supervision.
17. Special Account: To facilitate project implementation, the Borrower would establish two separate Special Accounts (SA): one for the IDA credit and the other for the IBRD loan at the central bank on terms and conditions satisfactory to the Bank. The Bank would make an authorized allocation of US$500,000 for the special account for the IDA credit. Initially, the allocation would be limited to US$250,000 until disbursement has reached SDR 0.75 million, then the full authorized allocation could be claimed. The Bank would also make an authorized allocation of DM I million for the IBRD loan. The KDAc edit would be drawn completely before the IBRD loan starts being withdrawn. Applications for the replenishment of these SAs would be submitted monthly or when 20 percent of the initial deposit has been utilized, whichever occurs earlier. The replenishment applications would be supported by the necessary documentation, bank statement of the special account, a reconciliation bank statement of the special account against Bank records. Annex B Page 9 VI. Monitoring and Reporting
18. Monitoring of Project Implementation: The PMT would establish the types of information to be available to management for monitoring, and the procedures for its transmission from the information collection point to the PMT. A management information system would be established and implemented within the PMT to cover the progress and problems in execution of civil works (to reach the PMT from management/design consultant as well as from WMOs), of Technical Studies (to reach the PMT directly from the respective consultant for the studies), and of institutional development (to reach the PMT from WMOs). The PMT would submit to Water Economy Department the information collected in a suitable form to permit an evaluation of the status of project implementation.
19. Key Impact Indicators: Table D sets out proposed impact indicators. The project is expected to generate the following outcomes: (a) physical improvement of infrastructure through rehabilitation; (b) improved income of farming families; (c) improved management of irrigation systems; and (d) improved sustainability of the irrigation systems, and separate key indicators and other qualitative issues are proposed for each of these project outcomes to monitor the actual impact of the Project.
20. Annual Reports: The PMT will prepare and submit to the Bank annual reports no later than March 15 of each year. The report would contain the following three sections: (a) Annual Progress Report; (b) Annual Work Plan for the Project; and (c) Annual Irrigation Reports for the Project Area.
(a) Annual Progress Report would be prepared by the PMT and contain the progress of each component, (particularly system rehabilitation and institutional development components), and key indicators; (b) The Annual Work Plan would be prepared by the PMT and contain the impact of the project using key performance indicators set out in the previous para, a plan for the implementation, updated disbursement profile, and target key performance indicators during the coming year. Budgets, which would be based on the appraisal estimates, would be amended where necessary to reflect changes in costs and scope of institutional development component.
(c) Annual Irrigation Report: As a part of the Annual Report, each participating WMO would prepare an annual irrigation report providing information on the volume (where measurement can be made) of water supplied to each section of the three schemes, and the crops irrigated together with information on rainfall occurring in the cropping season and compare performance in the areas rehabilitated with areas not rehabilitated. The report also contains a business plan for the next irrigation season such as projected irrigated area and cost, and target cost recovery. This report would be a basis for the update of economic analysis. The report also contain the results of monitoring water quality to show any impact of irrigation on environment at specified locations during the irrigation season. Annex B Page 10
TABLE D. PROPOSEDIMPACT INDICATORS
. utm...... :y ..... u...... ~ s~ t.bPo us..... (a) Physical Rehabilitation of Infrastructure Canals Rehabilitated kilometers rehabilitated hectares of command areas benefited from rehabilitation (b) Improved income of farming families Areas irrigated A crop survey would be conducted annually to assess the direct overall impact of the Project (areas, crops, and yields). Farming income A sample household survey (about 100 families within the Project Area) would be annually conducted to monitor the (c) Improved Management of Irrigation project's household level impact, which would include the Systems impact on women farmers. Operating Cost WMOs' account would be annually audited to confirm the improvement in efficiency using several financial ratios and overall operating cost per hectare. Implementation Status of Restructuring of WMOs The status of restructuring of WMOs would be duly monitored during the implementation. The focus should be on several key indicators (e.g. number of staff, ratio of administrative staff to artisans) and qualitative analysis (e.g. (d) Improved sustainability of the status of government supervision, capacity of new rehabilitated canals management, etc.) Cost Recovery Rate and Collection Rate These indicators are reviewed annually. The target cost recovery rate for each implementation year would be incorporated into the covenant framework. The full cost recovery (O&M) is envisaged after three years of implementation (currently 30 percent). Rehabilitated Canals Transferred to WUAs *Status of transferred canals would be monitored through the supervision mission to assess the Government's commitment. *Farmers' willingness and capacities. Annex B Page I1
21. Quarterly Reports: In order to assure timely reporting to the Bank, the PMT would submit quarterly progress reports on the progress and execution of the project in a format agreeable to the Bank. Quarterly Reports would include the assessment of the following indicators and would be split into sections to provide the updated information on project implementation: (a) Financial
Amount Disbursed by financier Updated Budget
(b) System Rehabilitation
List of Civil Works Contracts describing amount, progress, expected completion date List of Other Contracts
(c) Institutional Development
A. WUA Pilot Program (data disaggregated by gender wherever applicable) List of Major Activities (training, workshops, WUA meetings) Number of Members Payment of Member Dues
B. WMO Restructuring Support List of Major WMO Activities (water delivery) List of Major Restructuring Activities (status of consolidation) Cost Recovery
(d) Technical Studies and Project Administration:
Progress on studies and training
(e) Procurement
For equipment/material, consultants' services, and training, status and timing of all pending procurement actions; status of aggregated limits on specified methods of procurement.
22. Accounts and Audits: The MAFWE will maintain accounting procedures acceptable to the Bank, and independent auditors, acceptable to the Bank/IDA, would undertake an annual audit of the Project Account, which would be compiled by the PMT. Detailed accounts will be kept for each project component and its sub-components. The accounts will also reflect the status of payment against each contract; utilization of the Special Account (SA) and replenishments made by the Bank; and sources of funding used. Copies of the audit reports will be submitted to the Bank within six months of the close of the country's fiscal year. The audit report will cover both the compiled account of expenditure incurred during the FY as well as the SOEs used for withdrawals from the SA.
23. In addition, the participating WMOs will submit an annual audit report within six months from the end of each fiscal year to ensure the financial strength during the project implementation. AnnexB Page 12 Attachment I - A
PILOTWATER USERSASSOCIATIONS SUB-COMPONENT
Background
1. Tertiary irrigation distribution is currently managed by distribution level WMOs. In a move towards sustainability the Government intends to introduce participatory management, through Water Users Associations, which would eventually take over responsibility for tertiary irrigation management. This process will be pioneered in the country by the project's Pilot Water Users Component. Whilst the field interviews conducted during project preparation have confirmed the farmers' interest and willingness to take over the tertiary systems, they have also revealed prejudices and skepticism of the association approach towards participatory management, which indicates that the pilot WUAs would need support in the form of training and supervision during the pilot phase.
Objectives
2. There are four main objectives of this project component. Firstly, to develop the most appropriate format for WUAs in the country, to test the levels of competence in irrigation and association management amongst farmers, and to test the advantages of handing over various responsibilities to farmers, particularly the financial benefits and the effect on cost recovery. Secondly, to serve as a vehicle for improving the dialogue between WMOs and farmers, to develop the most effective working arrangements between the WMOs and WUAs and to increase their involvement in overall system management. Thirdly, to provide a basis for improving tertiary and field-level irrigation management through improved water control and measurement, trials, training and demonstrations. Fourthly, when tested, possibly modified and found successful, the pilot WUAs would act as examples and demonstrations in support of an expansion of WUAs and improved water management across the project area.
3. There would be seven pilot WUAs established by the project. These would be two in areas managed by Tikvesko Pole WMO and another two in areas managed by Bregalnica-Kocani WMO in Bregalnica scheme, each comprising clearly identifiable hydraulic units such as tertiary pipelines or canals. Of these, three WUAs, the two in Tikves and one in Bregalnica, would be in gravity pipe distribution areas for sprinkler irrigation, each would cover about 200 ha. The fourth would be located in the Bregalnica right bank area where the distribution system comprises open "canalets" and surface irrigation is practiced, and the crops include rice. This WUA would have an additional role under the project as it would be a key instrument in the pilot self-help rehabilitation of this area. In addition, three WUAs would be established at Polog Scheme, one in Tetovo and two in Gostivar, these would be identified during project implementation. If the pilot program is successful, the project would support the expansion of WUAs across the Project Area.
4. Under this WUA sub-component, there would be special attention to female farmers so that they would be fully integrated into WUA activities with objectives of: (a) increasing agricultural production through increased efficiency by improving women's potentials; and (b) ensuring the participation of women in activities under the project. The main activities in this context would be gender awareness raising among the PMT staff, participating WMOs staff, and WUA leaders. AnnexB Page 13 Functions of WUAs
5. In the first year of operation limited functions and responsibilities would be assigned to the WUAs; WUA responsibilities could include establishing with the WMO the annual irrigation plan and the detailed weekly scheduling and distribution of irrigation water, control of, and cooperation with WMO for repair and maintenance of the distribution (tertiary) networks, collection of water fees from farmers and payment to the WMO, negotiation and signature of agreements for supply of water with the WMO, liaison on behalf of members with the WMO (for example on irrigation schedules). From the second year, the functions of these WUAs would be progressively expanded following an annual review of performance such as operation and maintenance of secondary canals.
Implementation Arrangements
6. Four participating WMOs would be responsible for implementation of the Pilot WUA programme. These are Tikvesko pole, Bregalnica - Kokani, and Gostivar and Tetovo WMOs in Polog scheme.
7. The pilot WUA locations would be jointly selected by MAFWE staff with the WMOs in consultation with the respective Consultative Beneficiary Groups according to the following criteria: willingness of farmers, hydraulically separate units, representative conditions (condition of the network, soils and slope and cropping patterns), adequate access and canal slope for measurement and control of water. The four WUAs for Tikves and Bregalnica have been provisionally located by the WMOs.
S. It is proposed that the Pilot phase would occupy at least project years I and 2, including two full irrigation seasons. The Pilot WUAs would be closely monitored during these first two years and thoroughly evaluated after the second season. This evaluation would be conducted jointly by project staff, WMOs and representatives of MAFWE. On the basis of the evaluation, a decision would be made as to whether the pilot trials should be extended, or modified with redefinition of WUA roles and procedures. When the trials have been found successful, a decision would be made on extension of the programme. For the remainder of the project period the project would assist and support the Ministry in establishing WUAs across the project area.
Project Inputs
9. The project would (a) support the four participating WMOs with technical assistance, training and study tours, equipment and incremental costs; and (b) fund training for the farmers and WUA representatives.
10. In the Pilot phase the project would provide 16 mm of technical assistance of a WUA/Water Management Specialist to provide assistance and in-situ training to the WUA implementation staff in the WMO. This on-the-job training would be supplemented by in-country training and overseas training and study tours to enhance their skills in the fields of training, communication and participatory processes, gender awareness training, technical skills including irrigation system management, irrigation scheduling, field irrigation methods and computer applications. Language training would also be provided so that staff can take advantage of the considerable body of WUA and irrigation management knowledge available internationally. Details of the proposed training are given in Table A.3. A further 15 man/months (mm) would also be provided to assist the expansion of WUAs, and 2 mm from a gender specialist to ensure appropriate female participation.
I. Equipment would be provided under the project to support (i) the improvement of irrigation management at the tertiary and field level; and ii) training materials. This would include the items listed Annex B Page 14 in Table A.2. As the task of creating, organizing and supporting WUAs is not a task currently within the remit of the WMOs, the project would also fund the incremental salary and operating costs of the WUA units within the four WMOs.
12. Training of WUA representatives would be provided by the WMO staff and appropriate institutions in the country in management, leadership and communication skills, bookkeeping and financial management of associations, irrigation scheduling, repair and maintenance of irrigation systems. Training of farmers would be provided by the WMO staff and appropriate institutions in the country in field irrigation techniques, irrigation scheduling and appropriate agricultural topics. Special attention would be paid to include women farmers in courses relevant to their tasks and interests. Training would initially be provided for the small numbers involved in the four pilot WUAs, but additional resources are allocated for the second phase programme to expand WUAs. For details of the training programme refer to Table A.3.
13. In addition, about $110,000 of funds would be reserved as contingencies for the second phase of the program. The detailed budget for this contingencies would be developed during the mid-term review. AnnexB Page 15
Table A. I WUA Component Cost Estimate
raining, pilot phase sum 95,95,680 Refer TableA. 3 raining,second phase sum 104,320 104,320 Refer TableA. 3. Equipment sum 50,000 50,000 Refer TableA. 2 echnical assistance,mm 33mm 20,000 660,000 Includedin TA budget ontingencies 110,000 ncrementalstaff costs 0 0 Coveredby IncrementalO&M cost Fotal 1,020,000
Table A. 2 Equipment for Pilot WUA Component
z1m~er yIt tn~e Cass......
Irrigation/watermanagement Pipewater meter 0 0 Providedas part of rehabilitation Miniaturecurrent meters 3 1,000 3000 Measurecanal flows EC meter 3 200 600 Measurewater/soil salinity Pressuregauge 3 250 750 Measurepipe pressure Sprinklersets 4 2,500 10,000Sufficient for 2.5 ha each for demo Flexiblepipe 4 1,000 4,000 200 meach for demonstrations Siphonpipes 200 5 1000 Computer,printer, software 4 5,000 20,000 Irrigationscheduling/design Level instrument(set) 2 1,800 3,600 Trainingequipment Video player and TV 3 1000 3000 OHP and screen (sets) 3 500 1500 Minor equipment & materials (set) 3 850 2,5501 [_otalCost 50,000L Annexs Page 16
Table A.3 Cost Estimate for WUA Training
A. PILOTPHASE WMO staff Irrigationmanagement 4 1 Irrigationscheduling 4 1 - Irrigationdesign 4 1 - Field irrigation 4 1 - Computermethods 4 1 - Trainingfor trainers 1 8 5 2 3,010 3,010 Communicationskills 1 8 2 2 1,300 1,300 Irrigationmanagement 1 4 15/30 3 30,000 30,000 Studytours 2 5 10 3 10,000 25,000 WUAreps Management 2 12 1 5 380 760 Leadership 2 12 1 5 380 760 Communicationskills 2 12 1 5 380 760 Book keeping 1 8 2 5 530 530 Irrigationscheduling 2 8 2 4 430 860 Irrigationmaintenance 2 8 2 4 430 860 Ag ext. staff Field irrigation 1 4 1 - - Irrigationscheduling 1 4 1 - - Farmers Field irrigation 4 20 1 4 530 2,120 Irrigation scheduling 4 .20 1 4 530 2,120 Irrigationequip O&M 4 20 1 4 530 2,120 Agriculturetopics 6 20 1 5 580 3,480 Unallocated 22,000 Sub-total,Pilot Phase 95,680 B. SECONDPHASE WUAreps Management 9 25 2 5 1,380 12,420 Leadership 9 25 2 5 1,380 12,420 Communicationskills 9 25 1 5 705 6,345 Bookkeeping 6 25 2 5 1,380 8,280 Irrigationscheduling 6 25 2 4 1,280 7,680 Irrigationmaintenance 6 25 2 4 1,280 7,680 Farmers Field irrigation 9 25 1 5 705 6,345 Irrigation scheduling 9 25 1 5 705 6,345 Irrigationequip O&M 9 25 1 5 705 6,345 Agriculturetopics 12 25 1 5 705 8,460 Unallocated 22,000 Sub-total,Second Phase 104,320 TOTALCOST 160,000 Providercodes as follows: 0 Local arrangementfor individuallanguage tuition I Technicalassistance team, training providedon-the-job at not additionalcost 2 Macedoniansource in Skopje(to be identified) 3 Intemationalinstitution/study tour 4 WUAunit of WMO,minor costs of materialsand transportonly required 5 Macedoniansource, incl. Extensionservices, in the field Basisof cost estimate Cost, $ A. trainingin Skopje travelto Skopje 20 (return) per diem in Skopje 40 (nights) Resourceperson 250 (includinguse of venue) B. training in fieldby WMO staff travel to office 15 (daily) per diem in field office 10 (day only) Ctraining in fieldby outsidespecialist Resourceperson 50 (incl. Ag Ext. services) Dall coursesin field Misc.materials 30 (per course) Annex B Page 17
Attachment I - B
SELF-HELP REHABILITATION OF THE OPEN CANAL SYSTEM IN BREGALNICA (BREGALNICA KOCANI POLE)
Rationale
1. The general project rehabilitation strategy is to concentrate on repair of the seriously deteriorated main canals, the secondary systems generally being in a fairly sound condition. In Bregalnica, however, the second key to successful rehabilitation, and restoration of an efficient irrigation service, lies in improving the open canal systems in Kocani area. In the past, this area has been mainly devoted to rice, with about 5000 ha in 1990, out of the scheme total of 7000 ha. As rice cultivation has become less attractive, the area cultivated annually is expected to stabilize at less than 3000 ha for the whole scheme, less than 2000 ha in Kocani. This reduction in rice area would release water for expansion of other crops, bringing up the overall utilization (irrigation intensity) of the scheme nearer to the design expectation. As rice is a crop with a high water requirement, the capacity of the canals and offtakes in this area is higher than necessary for the new cropping pattern. It is, therefore, considered essential to rehabilitate the open canals in Kocani, to improve the measurement and control of water and to improve irrigation management in these systems and at the field level, in order to prevent the waste of water in Kocani which would be valuable in lower parts of the system.
2. The irrigation distribution system in Kocani is a mixture of concrete lined canals, mostly in the upper part, precast concrete units, referred to as "canalets," and earth canals. The latter are concentrated in the lower rice growing areas, and are often also supplied by river diversions. Only the concrete canals and canalets would be rehabilitated.
3. As the objective of the rehabilitation in Kocani is to reduce irrigation water losses, both distribution losses and on-farm losses, this can only be successful with the full co-operation of the farmers. A fully participatory approach to planning, design and execution is, therefore, essential and a self-help approach to this component is proposed. The proposal is that the farmers would contribute their labour and the project would provide the materials. The type of repairs required, particularly to the canalets, where patching and replacing broken sections are the main tasks are suitable for this approach. The savings derived from this approach would allow a greater proportion of the Bregalnica right bank canal to be rehabilitated, and would also minimize the disparity in investment cost between system components. As this is an innovative approach hitherto untried in the country, the task would be addressed as a pilot trial area in project years 1 through 3. The rehabilitation would be integrated with agricultural advice and training to assist farmers diversify away from rice. Women farmers would be also included in these advice and training activities.
Implementation Procedures
4. Bregalnica-Kocani WMO would implement the rehabilitation in Kocani. This WMO owns a precast concrete factory, originally responsible for construction of the precast canalets, from which skilled staff can be drawn for the purpose. They would be supported by technical assistance, training and equipment. Implementation would be achieved through a WUA, so that the programme would be very closely integrated with the pilot WUA programme (refer Attachment IA), and prior formation of a WUA would be a precondition for starting rehabilitation. As noted, implementation would be through the WUA, but there would be no conflict with the general responsibilities of the WUA for irrigation management as rehabilitation would be done outside the irrigation season. AnnexB Page 18 5. The main steps in the process are set out below:
* Introductory meetings to explain the project approach to WUA/self-help rehabilitation; * Formation of the WUA with election of representatives; * Further meetings to set out the self-help rehabilitation programme; * Participatory interactive field planning of the rehabilitation requirements, including addressing issues such as poor canalet alignment, access requirements, offtake locations, involving joint inspections by WMO staff, WUA officials and farmer/irrigators. This would take place in the irrigation season. * Joint preparation of construction season rehabilitation programme; * Estimation of resource requirements, labour and materials; * Ratification of the plan and estimate by farmers at a WUA meeting (attended by WMO staff); * Organization of labour groups by canal and distributary and appointment of foreman from amongst the farmer/irrigators; * Training of selected foremen in appropriate technologies (depending on the canal construction and condition) by WMO staff; * Delivery of materials into WUAs cared by the WMO; * Rehabilitation by the farmer/irrigators supervised by WUA officials and their trained foreman with technical advice and assistance, for example on levels, from WMO staff; - Inspection/approval of rehabilitation by WMO staff.
Project Inputs
6. The project would fund the provision of rehabilitation materials, the incremental costs of WMO staff, the training of WMO staff and WUA members, and provision of equipment and tools.
* Materials would comprise cement, sand and aggregate for concrete repairs, bitumen and other sealant for joints, replacement canalet units and mounting blocks, culvert pipes etc. (to be financed under System Rehabilitation Component) * Equipment and tools provided would include shaped steel shutters for canalet repair, disc- cutters and small hand tools such as wire brushes not likely to be available amongst the farmer/irrigators. Such tools would only be on loan. * Incremental salaries and operating costs of WMO staff (to be financed under Incremental O&M Cost Component).
7. The cost of this project element is estimated to be $75,000 to finance 3mm of expatriate specialist in participatory development procedures, training, equipment and operating costs. This component would be implemented by WMO staff. AnnexB Page 19 AttachmentI - C
RESTRUCTURINGTHE WMOS
Current Situation
1. Water Management Organizations (WMOs) are the principal institutions responsible for management of irrigation systems in the country. The WMOs are semi-government organizations; they are self-financing, dependent only on water charges, but responsible to government through MAFWE. There are 25 main WMOs constituted under the 1981 Water Law, which collectively formnthe Water Management Association (WMA). There are two types of WMO: a principal WMO owning and responsible for the main irrigation water supply, such as a dam and main canals, and distribution WMOs responsible only for distribution to the farmers (and agrikombinats). WMOs are generally multi- purpose, with responsibilities for irrigation, river control, flood protection, erosion control and other environmental considerations. Many have subsidiary commercial activities. In the project area there are seven WMOs reflecting the range of activities:
Table C.1 WMOs in the Project Area
WMO Type C~~~~~~~~~munei~...... TIKVESSCHEME TikveskoPole Principal Owning Tikves dam and the two main Distribution canals Makarija Distribution Whollyowned by LozarAgrokombinat NegotinokoPole Distribution Also co-ownerof part of the main canal BREGALNICA SCHEME BregalnicaKocani Principal Owning Kalimanci dam, the river Distribution diversionand two main canals Osojnica Distribution Stip Distribution OvcePole Distribution POLOGSCHEME Gostivar Principal/Dist. Owningthe main canaland distribution Tetovo Principal/Dist. Owningthe main canaland distribution
2. The WMOs' weakness lies in the structural and legal constraint. Under the current arrangement, WMOs are owned collectively by their employees and managed by elected managers; therefore, there is no incentive to lay off redundant or incompetent staff, resulting in overstaffing and poor management. Furthernore, WMOs are under control of three ministries (Ministry of Health for water quality, Ministry of Urbanism, Construction and Ecology for domestic/industrial water supply, and MAWFE for irrigation). This collective control turned out to be ineffective.
3. The current deteriorated condition of the irrigation systems is largely the result of the WMOs inability to (a) physically maintain the condition of the irrigation systems; and (b) to provide a reliable and affordable service. This situation is not due entirely to the breakup of the former Yugoslav Republic, the extent of the physical deterioration shows that the origins lie well back during the former period. The two main weaknesses inherent in the current system are both structural. Firstly the "ownership" structure, whereby the WMO is effectively owned and managed by its staff, leads to overstaffing, restrictive and inefficient practices and prevents modernization. Secondly, with the AnnexB Page 20 WMOs most accountable to its own staff, only indirectly accountable to government, and very little to its end-users, the farmers, it is has ho incentive as a monopoly provider to respond to the needs of those who ultimately pay for the service. The former regime had made an attempt to introduce participation through the "SIZ" organization, but this arrangement was terminated in 1994. Thus, against a background of a deteriorated agriculture sector resulting from the breakup of the the former Yugoslav Republic, the WMOs have entered a vicious circle in which revenue is insufficient to provide adequate maintenance, and the consequently deteriorating system fails to meet the requirements of the users, leading to an increasing reluctance to pay water charges and the alienation of users and suppliers. The situation continues to deteriorate: water charges have risen to a level considered unreasonable to most farmers, in fact so that irrigation is clearly uneconomic for certain crops, leading to decreasing collection rates and cost recovery. Most WMOs are in considerable financial hardship, many have outstanding debts and others have difficulty even in paying salaries, it is clear they are not able to finance rehabilitation or improve their service.
4. Despite the weaknesses of the WMOs, and the deterioration in their service, the WMOs have two main strengths which will be valuable assets if maintained in the future. Firstly, they are financially independent, and are used to dependence on their own revenue, and they are experienced and accustomed to setting, negotiating and collecting water charges. Secondly, they have experienced and qualified staff capable of system management.
Cost Recovery
5. The calculation of water charges follows the provisions of the 1987 Water Law. Water charges are calculated annually by the WMOs to include amortization, repairs to capital works, insurance, contribution to capital reserves, expected maintenance costs, salaries and related expenses: These are expressed per ha and divided into two components, a fixed component (generally 70 percent of the total charge) which is theoretically charged whether or not irrigation is used, and a variable part reflecting the water requirements of different crops. With the declining irrigation areas, and the WMOs increasing debt service liabilities, the official water charges have risen steeply in recent years (they have doubled in three years in Bregalnica). In the current economic climate farmers are unable to pay the full charges, and in a negotiation process it is customary that the charges are reduced by 30 to 40 percent, eliminating charges to non-irrigators and contributions to amortization and capital reserves and repairs. However, collection of these reduced charges is under pressure causing severe financial difficulties amongst the WMOs many of whom are now unable to recover even the full operating costs.
6. In Tikves and Bregalnica schemes the following is the record of cost recovery in recent years. On this evidence it is clear that in the initial years of the project, before restructuring and streamlining of the WMOs can be achieved, it is apparent that they will still have to operate with a budget deficit (Table C.2).
Government Strategy for Reform of the Water Sector
7. Conscious of the deteriorating condition of the irrigation facilities, the financial crisis in the WMOs and the importance of agriculture to the economy to recovery from the breakup of the the former Yugoslav Republic, and responsive to the demands of farmers, the government is undertaking institutional reform of the water sector. At the same time the government is aware that the breakup of the the former Yugoslav Republic has left the former Yugoslav Republic of Macedonia without adequate legislation to provide for economic and environmentally sound management of water resources. The objective of the restructuring is to obtain sustainable and financially viable, cost- effective institutions managing water which are transparent and responsive to consumer requirements AnnexB Page21 and sensible of their role in environmental protection. The centerpiece of this reform is the new Water Law which is expected to become effective in late 1997.
Table C.2 Cost Recovery Rate
1990 88 70 1991 83 65 1992 85 67 1993 77 31 1994 70 37 1995 40 46
Key Provisions of the Proposed New Water Law
8. The key provisionsof this new lawregarding WMOs and the irrigationsector are:
(a) Conversionof WMOs into PublicEnterprises (PEs). All WMOswould be convertedinto public enterprises,in fact under the Public EnterpriseLaw, which became effective in mid 1996, WMOs have to convertto PEs by February1997. GoM intentionis that a single umbrellanational-level PE should be created,this would be the Public Water ManagementEnterprise (PWME) which would hold the assets of all WMOs. The PWME would retain the current role of the WMOs,but would also have much wider responsibilitiesfor sustainable, environmentallysound managementof country's water resources. The PWMEwould report to and be responsibleto the MAFWE,and in accordancewith PE Law the governmentwould appoint the director and managingboard of the PWME. Water charges would be fixed by the PWME to a methodologyto be drawn-upby the PWME,and would be subject to the approvalof the MAFWE. The current plan of the MAFWEis that whilstthere would be only one PWME,there shouldbe separateoperational units with separate accountscreated from the WMOsserving each individualscheme. At this stage no further detailsof the futurerestructuring of the sectorcan be availableas the new WaterLaw provides for these to be establishedby the new PWME.
(b) Introductionof WUAs: The new WaterLaw specificallyallows for the formationof Water Users Associations(WUAs), and for these to participate in irrigation managementby operation and maintenanceof facilitiesallocated to them by the PWME. Only the use, and responsibilityfor these facilitiescan be handed-over,the ownershipwould remainvested in the PWME.
(c) The Water Fund: The new Water Law establishestwo general sourcesof incomefor the PWME: charges on the provisionof services such as water for irrigation,drinking or industrialuse, and funds from a newlyestablished "Water Fund." The Water Fund would receive its incomefrom a general "water compensation"tax levied on income, utilities and industriesusing water, various fines and compensations,and fromthe annual state budget. Annex B Page 22 Important Considerations in the Institutional Restructuring
9. The following are the main elements of the restructured institutions which are considered essential to the health and sustainability of the sector, and development of which should be closely monitored.
* The role of government (MAFWE) should be regulatory, not as a direct service provider; * Water users would be substantially involved in operations at the local level, not only through participation in WUAs, but also through participation in the management, or at least through substantial consultation at the local level; * Transparency in WMO accounts, particularly in water charge calculation, at the local level, with publication of audited annual accounts; * Local determination of water charges bases on actual scheme costs, with full cost recovery of O&M charges by system (and possibly sub-system).
10. The following are key performance indicators which, with project assistance, refer below, would be determined annually for Tikves Polog and Bregalnica:
* Area irrigated, ha and percent of total command; * Total volume of water delivered broken down by left/right bank and by WMO responsibility; * Average actual cost of irrigation per ha broken down by cost components: salaries, maintenance and repairs, power, other operating costs, debt servicing and overheads; * Income/revenue by sources: government subsidies, water fees, earnings from other sources; * Water charges billed; * Water charges collected: * Collection rate (water charges collected/water charges billed); and * Cost recovery (water charges collected/operating expenses). * Records such as minutes of meetings demonstrating user participation and representation in management of the WMO.
Project Contribution to Restructuring the Water Sector
11. The project would assist the Government in implementation of the reforms with technical assistance provided in the following fields:
(a) Technical assistance with audit/cost accounting of WMOs on Tikves, Bregalnica, and Polog in particular (i) to set up appropriate computerized accounting systems; and (ii) an annual determination of the key performance indicators set out above, 8 mm in total from Accountant, 4 mm in project year 1, 1 mm each in years 2 through 5. (b) Technical assistance to PWME in drafting regulations and codes forming a part of the new Water Law, 3 mm in one input in project year I from a Legal Specialist in Water Affairs (c) Equipment: computers, software and training for each WMO. AnnexB Page23
12. The cost of this component is estimated at $300,000 as shown in Table C.3 below.
Table C.3 Cost Estimate: Restructuring the Water Sector
Technical assistance 8 mm 20,000 160,000 Cost accounting Technical assistance 3 mm 20,000 60,000 Water Codes Equipment 4 sets 12,500 50,000 Computer, software Language training LS 30,000 30,000 TOTAL $300,000 AnnexB Page24 Attachment I - D
MODELLING STUDIES FOR WATER RESOURCES
There are two elements in this project component which will be implemented together by one team: * Bregalnica water resource optimization; and * Polog scheme, Vardar River modeling.
Rationale
BREGALNICA WATER RESOURCE OPTIMIZATION
Bregalnica irrigation system with a service area of 26,000 hectare is the largest in the country, and has an extremely complicated water supply system. The main source is Kalimanci Dam on the Bregalnica River, but his is supplemented by an additional sources: * 5 side streams which cross the irrigation area and enter the main river. I have dams, some, some are diverted into the canals, others are diverted into separate sub-systems, and others run directly into the lower main river; * the lower part of the main river where there are 3 permanent and 8 temporary diversions utilizing the residual flow of the side streams and the return flow from the upper irrigation area. Additional complications are provided by the use of the irrigation releases for power generation, although irrigation has priority, and cultivation of rice on low-lying areas, most of which have access to dual sources of river diversions and the main canal system.
Over the last decade the scheme has experienced several years or extreme water shortage, which has curtailed the irrigated area. The irrigation area could be maximized by optimal use of the complex water resources based on modeling techniques and statistical evaluation and predictions of incoming resources.
POLOG SCHEME VARDAR RIVER MODELLING
Two main irrigation service areas in the Polog scheme depend on diversions from the River Vardar shortly downstream from the Mavrovo Hydro-electric Power Plant. This power plant is used to meet the peak demand, and consequently releases vary during the day, with generally no releases at night. This pattern of releases generates variable flows at the two downstream irrigation intakes, Gostivar and Tetovo, respectively 1 and 13 km downstream. Whilst the hydro-electric power company is committed to meet the irrigation demands, the pattern of releases is often inappropriate to the irrigation needs
Mathematical modeling of the river would be a valuable tool to demonstrate the consequences of various pattems of releases on flows at these intakes, and could be used by the WMOs to assist in concluding arrangements for appropriate releases with the Hydro-electric power company.
Objectives
The objectives of the two elements are:
* Bregalnica study: to set-up a computer-based tool which will be used by WMO staff to facilitate decision making on annual irrigation planning, and the subsequent optimal management of water resources. AnnexB Page25
* River Vardar model study: to set-up a computer based tool to facilitate Gostivar and Tetovo WMOs (a) negotiate with the hydro-electric company for appropriate releases, and (b) predict consequent discharge variations at their intakes so as to inform farmers of water availability and so improve irrigation efficiency.
Implementation Arrangements
Both elements of this project component would be implemented through the TA consultancy contract and will involve a national organization with water resource and research experience supported by foreign specialist assistance providing and setting-up specialist software, and training in its use.
BREGALNICA WATER RESOURCE OPTIMISATION The Bregalnica programme would contain four basic elements: (a) data collection, research and evaluation of historic records of water resources and irrigated areas, (b) computer modeling and simulations to identify optimal rules for use of the resources, with particular emphasis on optimal use of the reservoir, (c) setting-up on the WMO and WDI computers a water resources management programme to guide and assist future management of the scheme, and (d) training staff in use of the programme as a real-time tool for planning the season's irrigation and subsequent use of the resources.
POLOG SCHEME VARDAR RIVER MODELLING
The Polog programme would contain five elements: (a) survey of the river cross-section from the HEPP outlet to Tetovo intake as a basis for the model, (b) records of different release patterns and corresponding water level variations to prove the model predictions, (c) setting-up the model on WMO and WDI computers using specialist software, (d) proving the model by comparison of model predictions with actual records obtained under (b) above, and (d) training staff in use of the model.
Project Inputs
Project inputs for both elements would comprise: a) 12mm of a national specialist responsible for management of the programme, with particular responsibility for data collection; b) 4mm of an intemational specialist(s) in computer applications in hydraulic and water resource modeling to assist during the programme, specifically for: * specification of the field data to obtained, * setting-up the Bregalnica model and development of optimal rules for resource management, * setting-up and proving the River Vardar model, * training staff in use of the two programmes, and identification of additional training needs within the budget of the project component. c) Specialist software; d) data collection and programme operating costs; Training costs, including necessary international training. Annex1 Page 26
Attachment I - E
PILOT TRIALS FOR IMPROVING IRRIGATION TECHNIQUES
Rationale
The economic decline over the recent years has placed a severe strain upon the irrigation systems, and the effectiveness of the service has declined following (a) deterioration in the physical infrastructure, (b) lost motivation amongst WMO staff, (c) deteriorated discipline. Additionally this has been a period of acute water shortage, and the new emphasis on private farmers and the introduction of WUAs will further increase the strain on the systems. Water management in many systems is now a major constraint on the system's performance, and this is indicated by the common top-first priority of water allocation, leaving the system tail-ends without a reliable water supply.
Improved water management is necessary if the systems are to respond to the main challenge of the future which is to provide an economically priced, reliable and equitable irrigation supply to all users. This challenge will first face the three schemes included for rehabilitation in this project where support will be required for the WMOs, WUAs and farmers.
Objectives
The threefold objectives of this project component will be:
* to assist WMOs to provide and sustain a reliable and equitable supply of irrigation water to all users * to assist WUAs in water management in tertiary and secondary systems; and * to assist farmers to improve their field irrigation.
This will be achieved through a combination of research, trials, demonstrations and training at two WMOs: Bregalnica, with two programmes covering the canalet and pressure distribution areas, and on Gostivar scheme (pipe distribution).
Implementation Arrangements
This project component would be implemented by WMO staff supported by national and international staff provided through the TA consultancy contract. The programme would contain three basic elements: (a) research and evaluation of current practices, (b) identification of appropriate simple, cost- effective and known practices which can be introduced at the three levels, and (c) training based on demonstrations of improved practices.
The research would monitor irrigation in three sample areas (two in Bregalnica and one in Gostivar) over one irrigation season. It would identify weaknesses in current irrigation practice and propose appropriate simple and cost-effective improvements which would be demonstrated in trial areas during the next irrigation season. Additionally farmers, WUA members and WMO staff would receive training. Annex B Page27 Project Inputs
Project inputs would comprise: a) 24mm of a national specialist to manage the programme, and with particular responsibility for the initial research and the subsequent field demonstrations; b) 6mm of an international irrigation management specialist to assist. during the programme, specifically for: * design of the field research programme, * analysis of results and proposal of improved technologies, * design of the demonstrations and trials, * monitoring of results and report on conclusions, * design of the training programme; c) Temporary staff for record keeping; d) Equipment and operating expenses; e) Training for farmers, WUA members and WMO staff; f) Implementation staff from the WMOs would be financed from the Incremental Cost component of the project. AnnexB Page 28 Attachment II- A
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT STUDY OF ALGAE PROBLEM
TERMS OF REFERENCE
Introduction
1. The operation of the systems of Tikves and Bregalnica irrigation schemes , which irrigate 13,000 hectares and 25,510 hectares in central part of the country, is seriously affected by the growth of algae in the concrete lined canals. Tikves is one hour drive from Skopje, in the region of Kavadarci, Negotino and Gradsko. Bregalnica is two hours drive from Skopje, in the region of Kocani, Stip and Sveti Nikole. The Tikves system draws its water from Tikves dam on the Cma river, and Bregalnica system from the Kalimanci dam on the Bregalnica river. Both the systems provide irrigation from the middle of May to end of October each year. The algae (the tenn includes all the organic growth in the canals) starts building up soon after the start of the irrigation season and progressively builds up to such an extent by July, that irrigation can not continue. The algae gets transported by flow, passes through the distribution pipes and clogs the hydrants. The canal has to be shut down for algae clearance, which takes about 2 to 3 days(cleaning being carried out manually). The cleaning operation has to be generally carried out 2 to 3 times during one irrigation season. A study is, therefore, proposed to be carried out to solve the problem, the Terms of Reference being defined hereinafter.
Scope of Study
2. The study shall include: (i) biological identification of the different types of algae forming in the canals and their characteristics, and the probable causes of formation and growth, (ii) identification of the possible measures to eliminate the algae problem and selecting those suitable for the conditions at the two schemes without affecting the quality of water for irrigation and environment,(iii) applying the selected measures during one irrigation season in different canals of the two systems and monitoring the impact of the application in each case, (iv) deciding which remedial measure would be most effective and economically viable, and (v) making all the arrangements for repeating the application of the remedial measure in the next irrigation season by the WMO.
Study Tasks
3. The study shall be conducted under the following Tasks which would run simultaneously or in sequence as required.
Task 1: - The Task would comprise collection of algae samples from the canals for botanical classification. Such samples may have to be taken during spring, summer and late summer, should the observations indicate the formation of different types as the irrigation season progresses. The Task shall also include establishing base line data, such as recording of canal lengths and location in these lengths where algae forms, labour days required for cleaning and time for cleaning to be used later for impact monitoring.
Task 2: The Task shall include investigating the reasons for the algae formation, which may need sampling of water flowing into the reservoir, and at different locations of the canal system for analysis of the presence of materials conducive to algae formation, as well as recording water temperatures, etc. AnnexB Page29 Task 3: The Task shall require identifying on the basis of experience gained in other countries, all possible measures for eradication of algae under similar circumstances, examining the relevance of their application to Tikves and Bregalnica conditions, and recommending what measure or measures could be tried. The possible measures would include mechanical, chemical or bacterial applications. The recommendation will include detailed materials, equipment, and both technical and non-technical manpower requirements, as well as the methodology which will be used for impact evaluation. The recommended measures shall not affect the quality of irrigation water or the health of the irrigators.
Task 4: The Task will require submission of a report to the PMT on the findings of Task I and 2, and the recommendations under Task 3, and obtaining the PMT concurrence for further implementation of the study. An important requirement would be to indicate in detail how impact monitoring will be carried out.
Task 5: This will be the most important Task and will require carrying out the approved measures (including procurement of materials and equipment and arranging necessary personnel and their transport) over one irrigation season and monitoring the impact. A report on the work carried out, the monitoring conducted, and the conclusions derived from impact monitoring, shall be required within two months after the close of the irrigation season. In case more than one remedial measures were carried out, the report will bring out the comparative advantage and recommend the suitable measure for future use.
Task 6: The Task will include training of the staff assigned by the WMOs in the two schemes in the methods of application during the implementation of remedial measures, preparing the work program for carrying out algae elimination in the next irrigation season including assistance to WMOs in procuring necessary equipment and materials.
Facilities to be Provided by the PMT
4. The PMT would arrange through the WMOs of the two irrigation systems, one counterpart for each system who will be available in the field when requested by the consultants, and will carry out the functions assigned to them; and access to the entire irrigation network. The PMT will provide decision on the report submitted by the consultant under Task 4, within 14 days.
Time Schedule
5. The study will cover two irrigation seasons. The consultant, however, will attempt to complete the analysis of the algae, the selection of the remedial measures as early as possible so as to permit the commencement of trials in the later part of the first season. Thus results could be available for application in the second season. AnnexB Page 30 Attachment 1 - B
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT STUDY FOR EVALUATION OF DETERIORATION OF CANAL SIPHONS
TERMS OF REFERENCE
Introduction
1. The irrigation system for Tikves ( 13,000 ha in the region of Kavadarci, Negotino and Gradsko) and Bregalnica ( 25,510 ha in the region of Kocani, Stip and Sveti Nikole), the two largest systems in the country, have a large number of siphons on the main canals, to cross land depressions. These systems were constructed in the 1970s. Since then, it has not been possible to examine the condition of these siphons as a few are of too small diameter to permit visual inspection, while the drainage of water from all the siphons poses problems due to non provision of any hatch or manhole in the deepest portion. The siphons are made of reinforced concrete with a thin steel lining, or exposed steel pipe supported on saddles, or buried steel pipes. Details of the siphons on the two systems are given in the Table 5 and 2. The study for these siphons, under these Terms of Reference, has the objective of establishing the extent of deterioration, if any, in sufficient detail to permit design of remedial measures.
General Scope of Work
2. The extent of deterioration of each siphon will be established both for hydraulic performance and structural safety. The hydraulic performance will be assessed by the actual rugosity coefficient for flow through the siphons, and the loss of water, if any, occurring through the siphon barrel. The structural safety will be assessed by establishing the quality of concrete, deterioration of the steel lining of concrete barrel or the thickness of the steel pipe.
Study Tasks
3. The study shall be carried out under the following tasks.:
Task A - would include establishing the hydraulic conductivity of the siphon by measuring at least three different discharges and the corresponding loss of head between the inlet and outlet ends. The discharge will be measured by an integrating type ultrasonic meter with proven accuracy or by other means providing accuracy within plus or minus 5 percent. The friction coefficient will be calculated for each case making judgment on the entry and exit losses from the visible flow conditions.
Task B - would include establishing the extent of loss of water through the siphon barrel. An approximate assessment will be initially made from the measurement of the discharges at the two ends of the siphon carried out simultaneously under Task A. Should this assessment indicate the occurrence of loss, arrangement shall be made to bulk head the two siphon ends suitably, and the loss of water over an 8-hour period shall be determined. Both the Tasks A and B shall be completed before proceeding to Task C.
Task C - would require (where manhole or hatch does not exist in the deepest portion) making a 200 mm to 300 mm hole in the barrel (where siphon has concrete barrel) or 75 mm to 100 mm hole in the steel pipe. These holes shall be formed in such a manner as to be converted to a permanent arrangement for emptying the barrels whenever required, and the conversion will be carried out after the completion of inspection. The siphon will be drained through this hole including pumping out any remaining water in the siphon barrel. Arrangement for inspection of the inner surface of the siphon barrels will then be AnnexB Page31 made. In case of larger sizes permitting visual inspection, suitable ladder/ walkway in the sloping portions will be provided as well as lighting and breathing equipment if the conditions so warrant. The large size barrels being reinforced concrete with 5 mm steel lining, the inspection will establish: a) areas where lining has completely disappeared including an opinion on the exposed concrete, b) area where lining has deteriorated into brittle flaky condition permitting easy scraping, and c) at every 100 m (i) the depth of sediment deposit, and its gradation, (ii) condition of steel lining in a one foot long ring where the surface rust and loose material will be removed and the thickness of the remaining lining will be determined. The quality of the siphon concrete shall be established at every 500 m. Any holes made in the lining or concrete shall be made good by filling the hole properly. Non-destructive in-situ tests will be preferred. Special attention will be given to locate the source of leakage when Task B indicates leakage through the barrel. In case of small diameter barrels not permitting visual inspection, a continuous record of the inner surface of the barrel shall be obtained by using a video camera.
Task D: - would require submission of a detailed report for each siphon with longitudinal plots of the inspection results.
Timing for the Study
4. Task A and B shall be carried out during the first irrigation season after the signing of the consultancy contract, while Task C will be completed within the following non-irrigation season, and the report on the study submitted one month prior to the commencement of the next irrigation season.
Responsibilities of the Consultant
5. The consultant shall be responsible for: (a) arranging all equipment, ladders, walkways, and materials needed for the study, (b) deploying the necessary personnel, including necessary safety measures to avoid injury, (c) obtaining the PMT approval for the methodology for each Task, and informing the PMT of any changes thereafter prior to applying the changed methodology, (d) arranging necessary transport for personnel and goods, and training of the counterpart staff deputed by WMO in all the techniques used during the study. The proposals for the methodology and changes shall be in writing and approval/comments by the PMT shall be conveyed in writing as well.
Responsibility of the PMT
6. The PMT shall provide approval or comments on the methodology proposed for each Task within 14 days of submission by the consultant. The PMT will assure through WMOs concerned full cooperation of the WMOs staff in conducting the study. Each WMO will identify one person who will assist in the study. WMOs will provide space for safe keeping of the consultants equipment or materials.
Submission of Reports
7. On completion of each Task, the consultant shall submit a report on the Task. The consultant will submit a consolidated report on all the Tasks at the end of the study. Annex B Page 32 Table I
Tikves Irrigation System Data for Siphons
Material Elevation Lowest of From / To Length Diameter Manhole Discharge at Entry Elevation 3 Canal / Siphon Siphon (km + m) (m) (mm) Exists (m /s) ( (m)m)
Joint Canal Siphon Voozarci A 5 + 175.33 - 5 + 572.25 396.92 2,300 Yes 12.08 237.03 210.20
Left Canal Siphon Makarija B 11 + 668.26 - 13 + 837.26 2,169.00 1,640 Yes 3.84 235.42 153.68 Siphon Kamen Dol A 15 + 972.26 - 16 + 214.26 242.00 1,600 Yes 3.536 232.40 199.20 Siphon Kalugerka A 17 +403.26 - 17 + 818.26 415.00 1,600 Yes 3.514 231.35 201.10 Siphon Sirkovo A 19 + 710.26 - 19 + 836.26 126.00 1,400 Yes 3.062 230.26 220.10 Siphon Krusevicki A 24 + 086.26 - 24 + 123.00 37.00 1,300 No 2.89 228.17 224.40 Siphon Vinicni AC 44 + 917.26 - 45 + 611.26 694.00 600 Yes 0.287 221.80 176.50 Siphon Aliskovo AC 47 + 196.26 - 47 + 426.26 227.00 360 0.068 220.10 191.63
Right Canal Ljuben - Marena Siphon Orizarski A 12 + 093.34 - 12 + 176.78 83.44 2,300 Yes 7.64 235.04 218.20 Siphon Ljubaski A 13 + 367.44 - 13 + 471.85 104.41 2,200 Yes 7.04 . 234.42 210.30 Siphon Marena A 23 + 667.35 - 24 + 476.74 808.39 2,000 Yes .4.72 230.54 215.80 Siphon Cesma - 25 + 491.59 - 26 + 667.47 175.88 2,000 Yes 4.57 229.50 216.30
Right Canal Marena -Tremnik Siphon Pod Pat - 27 + 670.54 - 27 + 879.48 9.00 1,700 Yes 3.20 230.12 210.24 Siphon Timjanicki - 33 + 145.55 - 33 + 335.80 190.25 1,300 Yes 1.565 228.05 204.35 Siphon Disanski - 49 + 109.96 - 49 + 370.78 260.82 1,000 No 1.000 222.80 203.09
RightCanal - Canal 37 Siphon Sopotski - 4 + 245.29 - 4 + 412.79 167.50 700 - - Siphon Lepovo - 8 + 008.79 - 8 + 377.29 368.50 700 Siphon Boskov - 9 + 154.79 - 9 + 431.29 276.50 700 -
NOTE: A. Reinforced concrete with 5 mm internal lining B. Exposed steel pipe 6 to 8 mm thick supported on saddles C. Underground steel pipe 6 to 8 mm thick Annex B Page 33 Table 2
Bregalnica Irrigation System Data for Siphons
Material Elevation Lowest of From / To Length Diameter Manhole Discharge at Entry Elevation 3 Canal / Siphon Siphon (km + m) (m) (mm) Exists (m /s) (m) (m)
Main Canal - Left Istibanja - Zrnovci Siphon Istibanja B 0 + 560.00 - 0 + 987.00 427.00 2,100 Yes 6.40 371.01 370.91 Siphon Osojnica B 4 + 908.00 - 5 + 068.60 161.00 2,100 Yes 6.32 468.87 366.97 Siphon Gradecka Reka B 7 + 114.00 - 7 + 143.00 29.00 2,100 Yes 6.32 367.73 366.03
Main Canal _ Left Zrnovci - Burilcevo Siphon Zmovci B 13 + 215.00 - 13 + 286.00 71.00 1,900 Yes 11.91 363.45 363.45 Siphon "H" B 20 + 703.00 - 20 + 760.00 57.00 1,500 Yes 2.52 360.65 356.55 Siphon Teranci B 22 + 460.00 - 22 + 523.50 63.50 1,500 Yes 10.26 359.41 359.31 Siphon Kucicino B 26 + 445.00 - 26 + 602.00 157.00 1,800 Yes 2.52 357.46 352.26
Main Canal - Left Burilcevo - Kozjak Siphon Burilcevo B 28 + 712.00 - 28 + 838.00 126.00 1,300 Yes 1.61 356.21 352.06 Siphon Argulica B 31 + 917.00 - 32 + 240.00 323.00 1,300 Yes 1.67 354.97 351.12 Siphon Crvulska Reka B 33 + 620.00 - 33 + 660.00 40.00 1,200 Yes 1.67 354.35 351.65 Siphon Kozjaka Reka B 36 + 332.00 - 36 + 680.00 348.00 1,000 Yes 10.26 353.68 349.88
Main Canal - Right Istibanja - Kocani Siphon Orizarska Reka A 7 + 821.09 - 8 + 198.61 378.00 2,400 Yes 13.30 365.29 353.04 -Siphon Garazi A 10 + 829.00 - 11 + 218.00 65.00 2,400 Yes 13.30 363.15 357.02
Main Canal Kocani.- Zletovica Siphon Kocani A 11 + 989.00 - 12 + 259.00 279.00 2,400 Yes 1.61 361.91 343.66 Siphon Beli A 12 + 471.00 - 12 + 555.00 84.00 2,400 Yes 1.61 360.90 346.52
Main Canal - Right Zietovica - Istibanja Siphon Zletovica A 33 + 216.00 - 34 + 937.75 1,722.00 2,100 Yes 11.91 347.42 335.42
Main Canal - Right Mustafino - Sv. Nikole Siphon Mustafino B 57 + 177.50 - 57 + 617.10 440.00 1,700 Yes 10.26 333.59 328.34 Siphon Nemanica B 61 + 468.00 - 61 + 908.00 440.00 1,700 Yes 8.62 329.43 322.93 Siphon Sv. Nikole B 74 + 053.50 - 76 + 116.00 2,063.00 1,800 Yes 10.26 322.27 310.77
NOTE: A. Reinforced concrete with 5 mm internal lining B. Buried steel pipe 7 to 8 mm thick. AnnexB Page 34 Attachment II - C
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT STUDY FOR MAXIMUM PROBABLE FLOODS FOR DAMS
TERMS OF REFERENCE
Introduction
1. The project provides for the rehabilitation of the irrigation schemes which are dependent for their supplies on three dams, the Tikves on the river Crna, the Kalimanci on the Bregalnica river, and the Mavrovo on the Mavroski river. Mavrovo reservoir has compared to its own catchment of 92 km2 a large capacity to store water diverted from the neighboring streams through a system of feeder canals and tunnels. It has no spillway, water being withdrawn through power stations and in emergency through the bottom outlet of 35 m3/sec capacity. This dam, therefore, is excluded from the study. Construction of the other two dams was completed in 1968, and 1969 respectively. Since then the condition of their catchments (5,361 km2 for Tikves, 4,300 km2 for Bregalnica) has changed which could result in higher runoff from rainfall. Also storms of higher rainfall intensity have been traversing the country. It is therefore, the intention of the Ministry of Agriculture, Forests and Water Economy (MAFWE), which is responsible for overseeing the safety of all the dams in the country, to carry out a study under the following Terms of Reference, to evaluate again the maximum probable flood (PMF) which could occur at these two dams and to compare with the values used at the initial design stage.
General Scope of Study
2. The study shall require collecting the hydrological and meteorological data from all the sources; obtaining information from relevant agencies on catchment characteristics which affect the rainfall - runoff relationship and the lag times from different sections of the catchment; reviewing the method used in the initial estimation; recommending the methodology considered appropriate considering the developments in the estimation of floods for the design of major structures; and applying the method or methods accepted by the Project Management Team (PMT) of MAFWE, to estimate the PMF in each case. Should the re-estimated PMF exceed the previous value used in the designs, the consultant shall route the flood and determine the maximum reservoir level attained and the maximum flow on the spillway.
Study Tasks
3. The study shall be carried out under the under-mentioned Tasks.
Task A: will require review of the previous estimation of the PMF for the two dams; collection of all the hydrological and climatic data; and the catchment characteristics including information on ground cover through satellite imagery maps if required. The Hydrometeorological Institute, Skopje is responsible for the recording of the rainfall, stream flow, and climatic data at the stations. The catchment characteristics can be obtained from the MAFWE. This Task shall be completed in about three months time from the commencement of consultancy, when a report will be submitted (within 15 days thereafter) on the data collected, the limitations of the data, and how it would affect the study. Any assistance needed from the PMT to improve the situation will be sought during the implementation of the Task.
Task B: shall include recommending the method or methods which the consultant considers appropriate for each dam, considering the size and shape of catchment and the importance of snow melt floods compared to the floods due to rainfall, or a combination thereof. Any computer software to be used in AnnexB Page35 the analysis will be explained in detail regarding the steps and stages of computation, the language used, and the checks on computation exercised. This Task shall be completed within four months of the commencement of the study. The PMT shall approve or seek clarification for the proposed methods within 15 days of the submission of the report.
Task C: shall include application of the methodology or methodologies accepted by the PMT to the two cases for estimation of the PMF for the dams. The values obtained will be compared with the values adopted for initial designs, and flood routing carried out should the revised PMF be higher. The report on this Task will be submitted within three months of the PMT acceptance of the methods proposed.
Responsibility of the Consultant
4. The consultant shall be responsible for contacting the relevant agencies for collection of data and the initial design reports. The consultant will obtain satellite imagery maps at his cost and arrange for all computer hardware and software. All the floppy discs used for the data or computations and the maps procured shall be passed on to the PMT at the completion of the study as well as a copy of the software used.
Responsibility of the PMT
5. The PMT shall help the consultant in getting access to the data available with the different agencies. The PMT will provide timely decision to the consultant as envisaged under the Study Task B. Annexa Page 36 Attachment II - D
FORMER YUGOSLAV REPUBLIC OF MACEDONIA IRRIGATION REHABILITATIONAND RESTRUCTURINGPROJECT STUDY FOR ALTERNATIVE ALIGNMENT OF TIKVES TUNNEL
TERMSOF REFERENCE
Introduction
1. The Tikves irrigation scheme having a service area of 13,000 ha, draws its water from the Tikves reservoir on the river Cma, through a two km long tunnel with a capacity of 10.8 m3 /sec. The inlet of the tunnel is located on the right abutment about 230 m upstream of the Tikves dam (height 113.5 m and length 338 m) axis, at elevation 240 m (full reservoir water surface elevation of 265 m and top of dam at 268.5 m). The discharge through the tunnel is controlled by two pairs of vertical gates installed at the bottom of a vertical gate shaft located at about 106 m from the tunnel inlet. The energy dissipating basin (20 m long, 5.5 m wide, and 6.5 m) high is just downstream of the gate shaft. The entire stilling basin, lower part of the gate shaft, and the tunnel downstream thereof is in sound quartzite schists. The upper portion of the gate shaft and most of the tunnel from the inlet to the gate shaft is located in blocky quartzite schists, broken quartzite schists, quartzite schists with mylonite filled in between the blocks, and overburden.
2. Since the beginning of the exploitation of the Tikves reservoir, movements were noticed on the right abutment of dam, when survey points were installed on the right abutment hill extending to levels higher than the top of the dam, both upstream and downstream of the dam. These survey points were later extended to the area above and below the gate shaft, following the observation of movement in this area as well. The vertical and horizontal movements are being continuously monitored and have since more or less stabilized. The maximum horizontal movement of any survey point in the gate shaft area has been 178 mm towards the reservoir and maximum vertical settlement of 84.4 mm. The tunnel, when inspected in 1993 (when the reservoir reached the lowest level and could be lowered further below the tunnel invert), showed horizontal and vertical movements at the transverse joints of the lining, and cracks in the vicinity of the joints. Cracks were also noticed in the lower portion of the gate shaft concrete lining. The stability of the rock mass traversed by the inlet portion of the tunnel is, therefore, being looked upon with suspicion, necessitating a study if an alternative alignment could be located with assured stability. The proposed study shall fulfill this need, the Terms of Reference being as follows.
General Scope of Study
3. The study shall include (a) a review of the rock movements recorded at the survey points, the geology and the structure of the rock formation in the gate shaft and inlet tunnel area and vicinity, the nature of movement and cracks in the tunnel and gate shaft, and concluding if the movements are indicative of general adjustment of rock formation resulting from saturation, variation of reservoir levels, and reservoir loads on the valley floor and sides which has more or less stabilized by now; or these indicate any tendency for movements along weaker planes which could be triggered to larger movement in case of an earthquake shock or rapid drowdown, (b) a study of the rock formations upstream of the area under observation based on exposed features or possible extrapolation of the known sequence in the tunnel area, if there was a likelihood of finding more stable formation which could permit an alignment of the inlet tunnel with or without shifting the gate shaft, and planning geophysical tests to confirm the conclusions (the geophysical tests shall extend to the present alignment of the inlet tunnel to compare the two formations), (c) carry out the geophysical tests and follow these with actual drilling along the alignment should the geophysical tests confirm the presence of better formations, and (d) prepare the AnnexB Page 37 designs and cost estimates for the alternative tunnel, if drilling confirms the geological feasibility for the tunnel.
Study Tasks
4. The study shall be carried out under the following Task.
Task A - shall include review of the movements of all the survey points used in the monitoring of the right abutment, study of the bore hole logs and logs of drifts, interpret the sequence of rock formations, and explore possible mechanism of cracking in the inlet tunnel and lower part of the gate shaft. The consultant will express an opinion on the nature of movements as mentioned in para 2. The consultant will submit a report on this Task separately.
Task B - shall require the consultant to establish, on the basis of surface geology and possible extrapolation of the information available, if better rock formation could be located for another alignment of the inlet tunnel. This preliminary assessment, provided it is encouraging, shall be followed by planning geophysical tests along different profiles to gather more information on the nature of rock formations at the elevation where the re-aligned tunnel will be located. The plan for the geophysical tests shall also include the area of the existing tunnel for comparison of the formations along the new alignment and the existing one.
Task C - will include carrying out the geophysical investigations. Should the geophysical tests indicate better rock formations along the new alignment, the consultant will propose drilling (number of holes, location, depth, size of holes, tests to be conducted) to be carried out to confirm the suitability of the rock formations. The consultant will submit a report on the work done, the conclusions drawn, and seek approval from the PMT for taking up the drilling. Should geophysical studies indicate the requirement of a long inlet tunnel and / or repositioning of the gate shaft, the consultant shall provide an approximate assessment of the investment cost for the realigned tunnel, gate shaft, basin, and connecting.tunnel.
Task D - shall include, after approval by the PMT of the drilling program submitted under Task C, actual drilling, permeability tests, logging, and interpreting the sequence of rock formations. All the cores obtained from drilling shall be properly marked and stored in wooden core boxes. A report on the Task will be submitted, which would confirm if the alternative alignment for tunnel etc., compared to the existing one, was superior or otherwise. In the event of the former conclusion, permission will be sought from the PMT for proceeding to the feasibility report.
Task E - will require the feasibility level designs and assessment of investment costs considering construction methods which would require the minimum number of days when the reservoir will need to be maintained below the tunnel invert level. A realistic construction schedule will be given. The outcome of the Task will be the feasibility report.
Responsibilities of the consultant
5. The consultant shall be responsible for all the personnel, equipment and materials needed for the geophysical investigations and drilling operations including transport.
Responsibilities of the PMT
6. The PMT shall assist the consultant in getting access to site, shall collect for the consultant all the data for the movement of survey points and arrange discussion with the personnel responsible for the monitoring thereof. The PMT shall provide decision on each of the consultant's recommendations within two weeks. AnnexB Page 38
Consultancy Period
7. Task A and B shall be finished in two months from the beginning of consultancy and report submitted thereafter within 10 days. Task C shall be completed in three months after the PMT decision to commence the Task and report to be submitted within the next 15 days. Task D shall be completed in five months time after permission to proceed and report submitted within the next one month. Task E will be completed in four months after the PMT decision to prepare feasibility report is conveyed. ATTACHMENTm
PROJECT COST ANDFINANCING TABLES
A. Summary Tables:
Project Cost Summary by Component Project Components by Year Project Expenditure Accounts by Components Project Components by Financiers Expenditure Accounts by Financiers
B. Detailed Cost Tables:
Rehabilitation at Tikves Scheme Rehabilitation at Bregalnica Scheme Rehabilitation at Polog Scheme Institutional Development Technical Studies Project Administration Incremental Operational Cost
AnnexB Page 39 Annex B Page 40 Theformer Yugoslav Republic of Macedonia IrrigationRestructuring and Rehabilitation Project ComponentsProject Cost Summary
% %Total (Dinar Million) (US$Million) Foreign Base Local Foreign Total Local Foreign Total Exchange Costs A. SystemRehabilitation 1. TikvesSchemes 326.96 164.18 491.14 5.89 2.96 8.84 33 33 2. BregalnicaScheme 208.50 95.21 303.71 3.75 1.71 5.47 31 21 3. Rehabilitationof the PologScheme 249.68 107.11 356.79 4.50 1.93 6.43 30 24 SubtotalSystem Rehabilitation 785.15 366.50 1,151.65 14.14 6.60 20.74 32 78 B. Institutional Development 1.WUA pilot program 7.71 49.32 57.03 0.14 0.89 1.03 86 4 2. PilotTrials for ImprovedIrrigation techniques 4.79 11.32 16.11 0.09 0.20 0.29 70 1 3. Pilot Trials for Self-Help - 4.19 4.19 - 0.08 0.08 100 - 4. BregalnicaWater Resource Study 2.04 8.67 10.71 0.04 0.16 0.19 81 1 5. Supportfor WMOrestructuring 0.28 16.50 16.78 0.01 0.30 0.30 98 1 SubtotalInstitutional Development 14.82 90.00 104.82 0.27 1.62 1.89 86 7 C. TechnicalStudies Algae 2.57 3.02 5.59 0.05 0.05 0.10 54 - SiphonsDeterioration 4.58 3.80 8.38 0.08 0.07 0.15 45 1 TikvesIntake Tunnel 5.03 6.15 11.18 0.09 0.11 0.20 55 1 Design Floods 3.35 - 3.35 0.06 - 0.06 - - SubtotalTechnical Studies 15.53 12.97 28.50 0.28 0.23 0.51 46 2 D.Administeration and Monitoring PMUSupport 70.64 46.80 117.45 1.27 0.84 2.12 40 8 Designand Supervision 43.43 6.01 49.44 0.78 0.11 0.89 12 3 SubtotalAdministeration and Monitoring 114.08 52.82 166.89 2.05 0.95 3.01 32 11 E. ImplementationSupport for WMOs 27.77 - 27.77 0.50 - 0.50 - 2 Total BASELINECOSTS 957.34 522.29 1,479.63 17.24 9.41 26.65 35 100 PhysicalContingencies 132.03 64.88 196.91 2.38 1.17 3.55 33 13 PriceContingencies 88.92 37.32 126.24 1.60 0.67 2.27 30 9 Total PROJECTCOSTS 1,178.29 624.49 1,802.78 21.22 11.25 32.46 35 122 The forner Yugoslav Republic of Macedonia IrrigationRestructuring and Rehabilitation Project Project Components by Year - Base Costs (US$ Million)
Base Cost 1998 1999 2000 2001 2002 Total
A. System Rehabilitation 1. Tikves Schemes 1.61 2.55 1.56 2.26 0.87 8.84 2. Bregalnica Scheme 0.72 1.45 1.46 1.19 0.65 5.47 3. Rehabilitationof the Polog Scheme - 1.84 1.44 1.76 1.39 6.43 Subtotal System Rehabilitation 2.33 5.84 4.45 5.21 2.91 20.74 B. Institutional Development 1. WUA pilot program 0.29 0.22 0.23 0.19 0.10 1.03 2. Pilot Trials for ImprovedIrrigation techniques 0.18 0.11 - - - 0.29 3. Pilot Trials for Sel-Help 0.04 0.03 - - - 0.08
4. BregalnicaWater Resource Study 0.11 0.08 - - - 0.19 5. Supportfor WMO restructuring 0.10 0.08 0.07 0.05 0.01 0.30 Subtotal Institutional Development 0.73 0.53 0.29 0.23 0.11 1.89 C. Technical Studies Algae 0.05 0.05 - - - 0.10 Siphons Deterioration 0.05 0.10 - - . 0.15 Tikves Intake Tunnel - 0.20 - - - 0.20 Design Floods - 0.06 - - - 0.06 Subtotal Technical Studies 0.10 0.41 - - - 0.51 D. Administeration and Monitoring PMU Support 0.72 0.49 0.40 0.30 0.20 2.12 Design and Supervision 0.30 0.22 0.16 0.11 0.11 0.89 Subtotal Administeration and Monitoring 1.01 0.71 0.56 0.42 0.31 3.01 E. ImplementationSupport for WMOs 0.10 0.10 0.10 0.10 0.10 0.50 Total BASELINE COSTS 4.27 7.58 5.40 5.96 3.43 26.65 Physical Contingencies 0.42 0.99 0.73 0.87 0.54 3.55 Price Contingencies 0.09 0.41 0.48 0.74 0.55 2.27 Total PROJECT COSTS 4.79 8.98 6.60 7.57 4.52 32.46
Taxes Foreign Exchange 2.14 3.34 2.16 2.34 1.27 11.25
Annex B Page 41 Annex B Page 42
The former YugpsoavRepublic of Macedoia irgation Resructuring and Rehabiliation Project Expenditure Accounts by Components - TotalsIncluding Contingencies (USS Million)
institutional Development pilot System Rehabilitation Trals for Pilot 8regalnice Technical Studies Administeraton and RehabilitAtion WUA Improved Trials Water Support for Tikves Monitoring Implementation Tikvxs Bregalnie of the Polog pilot rrigatlon for Resoure WilO Siphons Intake Design PMU Design and Support for Schemes Scheme Scheme program techniques Self-lelp Study restructudng Algae Detdoraffon Tunnel Floods Support Supervision WMOs Total
I. -wes_tm Costs A. Civi WVoda 10.26 6.22 8.20 ------24.69 S. Goods 1. Equipment andMactnery 0.63 0.17 0.06 0.07 0.01 0.04 0.06 0.00 0.03 - - - 1.07 2. Mgilea 0.37 - - - 0.37 3.FieldandOfliceequiEmnrx ------0.12 0.06 0.18 SubOtl Goods 0.63 0.53 * 0.06 0.07 0.01 0.04 0.06 0.00 0.03 - - 012 0.06 - 1.82 C. Vehil - - - - 0.03 - - - - 0-13 0.08 - 0.24 D. Can n 1. Design ond Constuction Supervision ------0.62 - 0.82 2. TchnicAistanee - - 0.98 0.20 0.07 0.15 0.28 0.10 0.14 0.22 0.07 0.69 - - 2.90 3. Trainig - - 0.11 0.02 0.01 0.02 - - - 0.09 - 0.24 Subota Consultnmeles 103 0.22 0.07 0.17 0.28 010 014 022 007 0.76 0.82 - 3.96 E. PMU NaibondStaff - - - - - . 0.85 - - 0.85 TotallnvestentCoadt 10.89 6.76 8.20 1.15 0.32 0.08 0.21 0.34 0.11 0.17 0.22 0.07 18S 0.96 * 31.35 N. Recurut Cost A. Opeaton and Staf6 PMU Opation - - - * ------0.51 0.11 0.82 knplmprtidon Support for lJMOs - - - - - * - - - 0.50 0.50 ToRecu_tCot - - - - * ------051 011 050 1.12 TIaIPROJECTCOSTS 10.89 6.76 8.20 1.15 032 00 0.21 034011 017022007239 106 050 3246
Txn - - . - - ForeIn Exdhne 3.61 2.10 2.44 0.99 0.22 0.06 0.17 0.33 0.06 0.06 0.12 0.92 0.12 - 11.25 The fofmer Yugoslav Republicof Macedonia IrrigationRestructuring and RehabilitationProject Components by Financiers (US$ Million)
The Govemment Local The Govemment of Netherland IBRDIDA Total For. (Excl. Duties & Amount % Amount % Amount % Amount % Exch. Taxes) Taxes A. System Rehabilitation 1. Tikves Schemes 3.20 29.4 - - 7.69 70.6 10.89 33.5 3.61 7.28 2. BregalnicaScheme 2.10 31.1 - - 4.66 68.9 6.76 20.8 2.10 4.66 3. Rehabilitationof the Polog Scheme 1.86 22.7 6.34 77.3 . - - 8.20 25.3 2.44 5.76 Subtotal System Rehabilitation 7.16 27.7 6.34 24.5 12.35 47.8 25.85 79.6 8.14 17.70 B. Institutional Development 1. WUA pilot program 0.00 - 1.15 100.0 - - 1.15 3.5 0.99 0.16 2. Pilot Trials for Improved Irrigationtechniques 0.00 - 0.32 100.0 - - 0.32 1.0 0.22 0.09 3. Pilot Trials for Self-Help - - 0.08 100.0 - - 0.08 0.3 0.08 - 4. BregalnicaWater ResourceStudy 0.00 - 0.21 100.0 - - 0.21 0.7 0.17 0.04 5. Supportfor WMO restructuring 0.00 - 0.34 100.0 - - 0.34 1.0 0.33 0.01 Subtotal Institutional Development 0.00 - 2.10 100.0 - - 2.10 6.5 1.80 0.30 C. Technical Studies Algae - - 0.11 100.0 - - 0.11 0.3 0.06 0.05 Siphons Deterioration - - 0.17 100.0 - - 0.17 0.5 0.08 0.09 Tikves Intake Tunnel 0.00 - 0.22 100.0 - - 0.22 0.7 0.12 0.10 Design Floods - - 0.07 100.0 - - 0.07 0.2 - 0.07 Subtotal Technical Studies 0.00 - 0.56 100.0 - - 0.56 1.7 0.26 0.31 D. Administeration and Monitoring PMU Support - - 2.31 96.8 0.08 3.2 2.39 7.4 0.92 1.46 Design and Supervision 0.82 77.0 0.17 15.8 0.08 7.2 1.06 3.3 0.12 0.95 Subtotal Administeration and Monitoring 0.82 23.7 2.48 71.8 0.15 4.5 3.45 10.6 1.04 2.41 E. ImplementationSupport for WMOs - - 0.50 100.0 - - 0.50 1.5 - 0.50 Total Disbursement 7.98 24.6 11.98 36.9 12.50 38.5 32.46 100.0 11.25 21.22
AnnexB Page 43 Annex B Page 44
Theformer Yugoslav Republic of Macedonia IrrigationRestructuring and RehabilitationProject ExpenditureAccounts by Financiers (US$Million)
The Government Local The Government of Netherland IBRDIIDA Total For. (Excl. Duties& Amount % Amount % Amount % Amount % Exch. Taxes) Taxes I. InvestmentCosts A. CivilWorks 6.80 27.5 6.34 25.7 11.55 46.8 24.69 76.0 7.35 17.34 - B. Goods 1. Equipmentand Machinery 0.14 13.4 0.28 26.0 0.65 60.5 1.07 3.3 0.89 0.18 - 2. Materials 0.22 60.1 - - 0.15 39.9 0.37 1.1 0.15 0.22 - 3. Field and Office Equipment 0.00 - 0.18 100.0 - - 0.18 0.5 0.14 0.04 - SubtotalGoods 0.36 22.6 0.46 28.2 0.80 49.2 1.62 5.0 1.18 0.44 - C. Vehicles 0.00 - 0.08 34.8 0.15 65.2 0.24 0.7 0.23 0.01 - D. Consultancies 1. Design and Construction Supervision 0.82 100.0 - - - - 0.82 2.5 - 0.82 - 2. TechnicalAssistance 0.00 - 2.90 100.0 - - 2.90 8.9 2.38 0.52 - 3. Training 0.00 - 0.24 100.0 - - 0.24 0.7 0.11 0.12 - SubtotalConsultancies 0.82 20.7 3.14 79.3 - - 3.96 12.2 2.49 1.46 - E. PMU National Staff - - 0.85 100.0 - - 0.85 2.6 - 0.85 - Total InvestmentCosts 7.98 25.5 10.86 34.7 12.50 39.9 31.35 96.6 11.25 20.10 - II. RecurrentCosts A. Operationand Staff PMU Operation - - 0.62 100.0 - - 0.62 1.9 - 0.62 - Implementation Supportfor WMOs - - 0.50 100.0 - - 0.50 1.5 - 0.50 - Total Recurrent Costs - - 1.12 100.0 - - 1.12 3.4 - 1.12 - TotalDisbursement 7.98 24.6 11.98 36.9 12.50 38.5 32.46 100.0 11.25 21.22 - LI
The former Yugoslav Republic of Macedonia IrrigationRestructuring and RehabilitationProject Table 1.1. Rehabilitation of Tikves Scheme Detailed Costs (US$)
Quantities Totals Including Contingencies ('000) Untt 1998 1999 2000 2001 2002 Total Unit Cost 1998 1999 2000 2001 2002 I. Investment Costs A. RehabilitationdoJointCanal(CWC01I) ls ' - - 1 697,000 7871io0 S. RehabIltation of the Main Canal Left Bank System Section Kamen Dol - Nogsevci (t) (CWC102) Is 1 1 795,000 938.58 tnstaltion of Equipment and Measurement Structures (Year t) (CWUNS103) Is 1 - - - - 1 29,000 34.24 Left Bank System Section Kamen Dol - Nogaevci(II) (CWi104) Is - 1 - 1 1,331,000 - 1,615.71 Right Bank System Section Lubas-Marena(It) (CWC 105) 1s 1 - - - 1 700,000 - 849.74 tnatalnationofMeasurementStructuresand Equipment(CVMNS107) Is - 1 - - - 1 21,000 - 25.49 - Left Bank System Section Kamen Dot - Nogaevci(ttI) (CWC18) 1s - - 1 - - 1 750,000 - - 936.93 Right Bank System Section Lubas-Marena(III) (CWC109) Is - - 1 - - 1 700,000 - - 874.47 Installationofmeasurnmentstrucuturesandrequipment(CWNS110) Is - - 1 - 1 17.000 - 21.24 Left Bank System Section KamenDot -Nogaevci Main Repair (IV) (CW 111) is - - - 1 - 1 933,000 - - - 1,199.46 Left Bank System Section Kamen Doi - Nogaevci Follow Repair (IV) (CWt 112) Is - - - 1 - 1 567.000 - - - 728.94 Reconst,uction of the Right Bank Main Section (CWC 114) ls - - - - 1 1 683,000 - - - - 903.23 Subtotal Rehabilitation of the Main Canal 972.82 2,490.94 1,832.64 1,928.40 903.23 C. Repairs to Turinel Tisovec Intake(CWC1I06) Is - 1 - - - 1 120,000 - 145.67 - - D. Repairs on the Siphons (CWI 113) Is - - - 0.8 0.2 1 928,0D0 - - - 954.43 245.45 E. Hydrants, valves, and pipes Is 0.5 - 0.5 - 1 158,0D0 93.21 - 98.37 - F. Measurement Equipment 1 - 1 - - - 1 360,000 - 434.63 - - G. Design and Supervision Cost Staff Months 60 60 40 30 30 220 1,500 106.32 109.51 75.19 58.09 59.83 Total 1,959.45 3,180.74 2,006.21 2,940.92 1,208.51
Annex B Page 45 Annex13 Page 46
The formerYugoslav Republic of Macedonia IrrigationRestructuring and RehabilitationProject Table1.2. Rehabiitationof BregalnicaScheme DetailedCosts (USS)
Quantities Totals Including Contingencies('000) Unit 1998 1999 2000 2001 2002 Total Unit Cost 1998 1999 2000 2001 2002 Total I. InvestmentCosts A. Repairof Kailmanci Dan (CvVC 204) 1 1 - - 1 242,000 - 293.77 - 293.77 B. Left Bank Canaland Networks Zrmovci-Budicevo(I) (CvWC201) Is 1 - - 1 399,000 450.58 - - - - 450.58 lstbanJa-Zmovci(CWC203) 1s - I - - 1 586,000 - 711.35 - - - 711.35 Installation of Equipment and Mesurement Structures (CWNS202) 1s 1 - - - 1 92.000 108.62 - - - - 108.62 Subtotal Left Bank Canal and Networks 559.20 711.35 - - - 1,270.55 C. Right Bank MainCanal Rehabilitation of Distribution Network (CWC206) Is - I - - 1 222,000 - 269.49 - - 269.49 Kocani-Mustatino (I) (CWC205) Is - 1 - - - 1 240,000 - 291.34 - - 291.34 RehabilitationofDlstributionNetwork(CWC209) ls - - 1 - 1 114.000 - - 142.41 142.41 Kocani-Mustatino (II) (CWC 208) ls - - 1 - - 1 590,000 - - 737.05 - - 737.05 KocanMusfatino (IN)(CVW210) Is - - I - 1 487,000 - - 600.38 - 6W.38 Main CanalSection (Major Repair) (cwc21l) Is - - - 1 - 1 719,000 - - 924.35 924.35 Rehabiitasonof Secondary Canals (CWC212) Is - - - 1 1 646.000 - - - 854.30 854.30 Subtotal Right Bank MainCanal - 560.83 879.47 1,524.72 854.30 3,819.31 D. Repairs on the Siphons (CWC 207) 1s - - 1 - - 1 673,000 - - 840.74 - - 840.74 E. Hydrants,valves, and pipes Is 0.5 * 0.5 - - 1 138,000 81.41 - 85.92 - 167.34 F. Materialsfor Self-Help Pilot 1. Cement ls 0.5 0.5 - - - 1 209,000 123.35 126.75 - - 250.10 2. Coarse Sand and Gravel Is 0.5 0.5 - - - 1 73,500 43.38 44.58 - - - 87,96 3. Construction Equipment 1s 0.5 0.5 - - - 1 24.500 14.46 14.86 - - - 29.32 Subtotal Materialsfor Self-Help Pilot 181.19 186.19 - - - 367.38 G. Designand SupenrisionCost StaffMonths 20 35 25 15 15 110 1,500 35.44 63.88 47.00 29.04 29.92 205.27 Total 857.24 1,816.01 1,853.13 1,553.77 884.22 6,964.35
'1 Theformer Yugoslav Republic of Macedonia IrrigallonResbudurng and RehabilitationProject Table 1.3. Rehabilitatonof the Polog Scheme Detailed Cosbt (USS)
Quantities Totals Including Contingencies (000) Unit 1998 1999 2000 2001 2002 Total Unit Cost 1998 1999 2000 2001 2002 1.Investment Costs A. Rehabilitationof Gostivar Schemes Rehabilitationof Canalsand IrrigationNetwork in BanjickoPole (CWC301) Dollar - 1 - - - 1 300.000 - 364.17 - Rehabilitationof Canalsand IrrigabonNetwork in BanjickoPole (11) (CWC304) Dollar - 1 - - 1 471,000 - - 588.39 Reconstructionof irrigationnetworks at GostivarskoPole (CWC302) 1 - I - - 1 470,000 - 570.54 - Installationof Equipmentand MeasurementStructures (CWNS303) Dollar - 1 - - 1 22,000 - 26.71 - Reconstructionof Networkfor SeparateIrrigabon (CWC305) Dollar - - - 1 - 1 700,000 - - - 939.05 SmallRehabilitation Works (CWC306) Dollar - - 1 1 106,000 - - 142.20 Subtotal Rehabilitation of Gostivar Schemes - 961.42 588.39 1,081.25 S. TetovoScheme Reconstructionof Main CanalRediovce-Tetovo (CWC401) Dollar - I - * - 1 347,000 421.23 Reconstructionof MainCanal Tetovo-Bistrica (CWC410) Dollar 1 1 700,000 - - - - 965.96 Reconstructionof IrrigationNetwork (CWC402) Dollar - I - - - 1 680,000 - 825.46 - Installationof Equipmentand MeasurementStructures (CWNS403) Dollar - 1 - * - 1 8,000 9.71 Reconstructionof Main CanalTetovo- Bistrica (11) (CWC 404) Dollar - 1 - 1 700,000 - 874.47 - Reconstructionof IrrigationNetwork (CWC411) Dollar - - - - 1 1 680,000 - -- 938.36 Reconstructionof PS Ratajeand IrrigationNetwork (CWC405) Dollar - - 1 - - 1 250,000 - - 312.31 - Installationof Equipmentand Structures(CWNS406) Dollar . 1I 8,000 - - 9.99 Reconstructionof Main CanalTetovo-Bistrica (CWC 407) Dollar - - - 1 - 1 735,000 - - - 944.92 Reconstructionof IrrigationNetwork (11) (CWC408) Dollar - - - - 1 200,000 - - - 257.12 Installationof Equipmentand MeasurementStructures (CWNS409) Dollar - - - 1 8,000 - - - 10.28 - Subtotal TetovoScheme - 1,256.39 1,196.78 1,212.32 1,904.32 C. Designand SupervisionCost Staff Months 20 35 25 15 15 110 1,500 35.44 63.88 47.00 29.04 29.92 Total 35.44 2,281.69 1.832.17 2,322.61 1.934.24
Annex B Page 47 Annex B Page 48 The former Yugoslav Republic of Macedonia Irrigation Restructurng and Rehabilitation Project Table 2. Institutional Development Detailed Costs (USS)
Quantities Totals Including Contingencies (000) Unit 1998 1999 2000 2001 2002 Total Unit Cost 1998 1999 2000 2001 2002 Total
I. Investment Costs A. WUA Pilot Program 1. Pilot Phase Expatriate Specialists Staff Months 8 8 - - - 16 20.000 172.23 176.37 - - - 348.61 Gender Specialist Is 1 1 - - - 2 20,000 21.53 22.05 - 43.58 Training 1s 0.7 0,3 - - - 1 100,000 75.43 33.20 - - - 108.63 equipment 1s 0.8 0.2 - - 1 50,000 47.18 12.09 - - - 59.27 Subtotal Pilot Phase 316.37 243.71 - - - 560.08 2. Expansion Phase Expatriate Consultants Staff Months - - 7 5 3 15 20,000 - - 158.49 116.27 71.54 346.30 Training Is - - 0.4 0.4 0.2 1 100,000 - - 45.53 46.82 24.06 116.41 Unprogrammed 1s - 0.4 0.4 0.2 1 110,000 - - 49.95 51.34 26.35 127.64 Subtotal Expansion Phase - - 253.97 214.43 121.95 590.35 Subtotal WUA Pilot Program 316.37 243.71 253.97 214.43 121.95 1,150.42 B. Pilot Trials for Improving Irrigation Techniques National Experts Staff Months 12 12 - - - 24 1,800 23.30 24.00 - - 47.29 Expatriate Experts Staff Months 3 3 - - - 6 20,000 64.59 66.14 - - - 130.73 Part Time Clerks forRecord Keeping Set 0.5 0.5 - - - 1 20,000 10.79 11.11 - - - 21.90 Training Set 0.5 0.5 - - - 1 15,000 8.08 8.30 - - - 16.38 WaterMeasurementEquipment Set 0.8 0.2 - - - 1 60,000 56.61 14.51 - - - 71.12 Vehicle Set 1 - - - - 1 30,000 30.76 - - - - 30.76 Subtotal Pilot Trials for Improving Irrigation Techniques 194.13 124.05 - - - 318.18 C. Pilot Trials for Self-Help Rehabilitation Expatriate Experts Staff Months 1.5 1.5 - - - 3 20,000 32.29 33.07 - - - 65.36 Training Set 0.5 0.5 - - 1 5,D00 2.69 2.76 - - - 5.45 equipment Set 1 - - - - 1 10,000 11.79 - 11.79 Subtotal Pilot Trials for Self-Help Rehabilitation 46.77 35.83 - - - 82.60 D. Bregalnica Water Resource Study Expatriate Experts Staff Months 2 2 - - - 4 20,000 43.06 44.09 - - 87.15 National Experts Staff Months 6 6 - - - 12 1.800 11.65 12.00 - - - 23.65 Training Set 0.7 0.3 - - - 1 15,000 11.31 4.98 - - - 16.29 Transportation Set 0.7 0.3 - - - 1 20,000 15.08 6.62 - - 21.70 Computer Systems Set 0.7 0.3 - - - 1 35,000 28.89 12.69 - - 41.58 Specialist Hydrological Field Studies Set 0.7 0.3 - - - 1 20,000 15.07 6.61 - - 21.68 Subtotal Bregalnica Water Resource Study 125.06 87.00 - - - 212.05 E. Support for WMO Restructuring Expateriate Experts Staff Months 3 3 3 2 - 11 20,000 64.59 66.14 67.93 4651 245,16 Equipment Set 0.7 0.3 - - - 1 50,000 41.27 18.12 - - - 59.40 Training Staff Months 0.2 0.2 0.2 0.2 0.2 1 30,000 6.46 6.61 6.79 6.98 7.15 33.99 Subtotal Support for WMO Restructuring 112.32 90.88 74.72 53.48 7.15 338.55 Total 794.65 581.46 328.69 267.91 129.11 2,101.81 The former Yugoslav Republic of Macedonia Irrigation Restructurng and Rehabilitation Project Table 3. Technical Studies Detailed Costs (US$)
Quanttes Totals Including Contingencies ('000) Unit 1998 1999 2000 2001 2002 Total Unit Cost 1998 1999 2000 2001 2002 Total
1. Investment Costs A. Alga. IntemationalSpecialist Is 1.25 1.25 - - - 2.5 20,000 26.91 27.56 - - 54.47 National Experts Is 0.5 0.5 - - - 1 46,000 24.81 25.55 - - - 50.36 Equipment is 1 - - - - 1 4,000 4.72 - - - 4.72 Subtotal Algae 56.43 53.11 - - - 109.54 B. Siphon Deroron IntemationalExpert ls 0.333 0.667 - - 1 42,000 15.06 30.88 - - - 45.94 National Institute Is 0.333 0.667 - - - 1 82,000 29.45 60.76 - - - 90.21 Equipment Is 0.333 0.667 - - - 1 26,000 10.21 20.94 - - 31.14 Subtotal Siphons Dteoation 54.71 112.58 - - 167.29 C. rikves Intake Tunnel Is - 1 - 1 200.000 - 221.24 - - 221.24 D. Desn Floods Is - I - - - 1 60,000 - 66.66 - - - 66.66 Total 111.15 453.58 - - - 564.73
Annex B Page 49 Annex B Page 50
The formerYugoslav Repubioc of Macedonia InigationRestructuring and RehabilitationProject Taoie4. Administeratlonand Monitoring DetailedCosts (USS)
Quantties Totals Including Contingencies ('000) Unit 1998 199 2000 2001 2002 Total Unit Cost 1998 1999 2000 2001 2002 Total 1.Invetment Costs A. Project ManagementTeam Support 1. ntemationaiTeam person-month 10 8 7 5 - 30 20.000 215.29 176.37 158.49 116.27 - 666.42 2. Loc iTeam person-month 125 125 100 75 75 500 1,500 202.23 208.30 171.64 132.59 136.57 851.33 3. NationalSpecialists man/month 3 3 3 3 - 12 1.800 5.82 6.00 6.18 6.36 - 24.37 4. Logistic Support OfficeEquipment Is 9436 24.18 - - 11854 Vehices No 5 - - - - 5 25,000 128.15 - - - 128.15 Subtotal Logistic Support 222.51 24.18 - - 246.69 5. Training Is 32.33 33.22 22.79 - - 88.34 Subtotal Project ManagementTeam Support 678.19 448.08 359.10 255.22 136.57 1,877.16 B. Support for Design Institute Vehides Set 3 3 25.000 76.91 - - - - 76.91 OfficeEquipment Set 1 - - - - 1 50.000 58.97 - - - - 58.97 Subtotal Support for DesignInstitute 135.88 - - - 135.88 Total investment Costs 814.07 448.08 359.10 255.22 136.57 2,013.04 II. RecurrentCosts A. ProjectManagement ULt Is 67.80 69.83 71.93 74.08 76.31 359.94 B. Interpretationand Translation Is 0.2 0.2 0.2 0.2 0.2 1 75,000 16.95 17.46 17.98 18.52 19.08 89.98 C. Prqect AudIt 1 1 1 1 1 5 10,000 11.30 11.64 11.99 12.35 12.72 59.99 D. OperationalCost for DesignAnd Supervision Set 20.54 21.16 21.80 22.45 23.12 109.07 Total Recurrent Costs 116.59 120.09 123.69 127.40 131.22 618.99 Tots 930.66 568.17 482.79 362.62 267.79 2,632.02 The former Yugoslav Republic of Macedonia Irrigation Restructuring and Rehabilitation Project Table 5. Incremental Operational cost Detailed Costs (US$)
Quantities Unit Totals including Contingencies ('000) Unit 1998 1999 2000 2001 2002 Total Cost 1998 1999 2000 2001 2002 Total
II. Recurrent Costs A. Implementation Support for WMOs dollar 100.00 100.00 100.00 100.00 100.00 500.00 Total 100.00 100.00 100.00 100.00 100.00 500.00
Annex B Page 51 Anex B Page 52 Attachment IV: Detailed Procurement Plan Procurement Plan: The former Yugoslav Republic of Macedonia,Irrigation Rehabilitation and Restructuring Project dd/mm/yy 12 3 4 S 6 EstimateSchedule Description Type Numberof Estimated Procurement Document Invitation to Contract to Identification number Subpackages Cost Method Preparation Bid Award (in mil US$) Civil Works Rehabilitation of the Irrigation SchemeTikves CWC 101 -Reconstructionof the Joint Canal CW I 0.79 NCB 30/7/1997 15/9/1991 15/10/1997 - Reconstructionof the Left Bank maincanal sectionKamen Dol - Nogaevci km 9+703 - km CW I 0.94 'B 31/10/1997 15/12/1997 15/2/1998 CWC 102 11+660,Right Bank main canalLjubas-Marena km 9+703 - km 13+320and Marena-Tremnikkm 24+446- km 27+621(repairs of concretelining and structures) CWNS103 -Installation of equipmentand measurementstructures CW 1 0.03 NS 30/9/1997 7/11/1997 15/12/199 Total for the first year 3 1.76 - Reconstructionof the Left Bank maincanal sectionKamen Dol - Nogaevci(repairs of concrete CW 1 1.62 ICB 31/3/1998 15/4/1998 15/6/1998 CWI 104 lining and structures)
- Reconstructionof theRightBank main canal sectionLubas-Marena; Marena-Tremnik (repairs of CW I 0.85 1SCB 30/7/1998 1/9/1998 1/10/1998 CWC 105 concretelining and structures) CWC 106 -Repairsto intake Tunnel Tisovec CW 0.15I B 30/4/1998 7/7/1998 15/9/1998 CWNS 107 installationof equipmentand measurementstructures CW I 0.03 NS 30/4/1998 7/7/1991 15/9/1998 Total for the secondyear 4 2.64 CWC 108 - Reconstructionof the Left Bank main canal sectionKamen Dol - Nogaevci CW I 0.94 t'CB 31/3/1999 30/4/1999 15/6/1999 . - Reconstructionof the Right Bank main canal sectionLubas-Marena; Marena-Tremnik (repairs of CW 0.87 NCB 30/7/1998 1/9/1999 15/10/1999 CWC 109 concretelining and structures) CWNS 110 installation of equipmentand measurementstructures CW 1 0.02 I;S 30/6/1999 1/8/1999 15/9/1999 Total for the third year 3 1.83 CWI IllI Reconstruction of the Left Bank main canal sectionKamen Dol - Nogaevci(Main Repair) OW 1 1.20 ICB 30/2/2000 7/4/2000 15/6/2000 CWN 112 -Reconstruction ofthe Left Bank main canal section(Minor Repair) CW 1 0.73 NCB 15/7/2000 15/9/2000 1/11/2000 CWI 113 -Reconstruction of the siphonsfor all main canal CW I 1.20 ICB 31/12/1999 7/3/2000 15/5/2000 Total for the fourth year 3 3.13 - Reconstructionof the Right Bank main canalsection Lubas-Marena; Marena-Tremnik (repairs of CW 1 0.90 NCB 30/4/2001 7/7/2001 15/9/2001 CWC 114 concretelining)
Total for the fifth year 1 0.90 Total for Irrigation schemeTikves CW 14 10.26
R!habilitation of the Irrigation SchemeBregalnica - Reconstruction of the Left Bank main canal sectionZmovci-Burilcevo, repairingof the concrete CW I 0.45 1,CB 30/7/1997 15/9/1997 15/10/199 CWC 201 lining, constructionand repair of escapes CWC 202 installation of equipmentand measurementstructures CW I 0.11 NCB 30/9/1997 15/10/1997 15/12/1997 Total for the first year 2 0.56 CWC 203 - Reconstructionof the Left Bank main canal sectionIstibanja-Zmovci, repairing of the concrete CW 1 0.71 CB 31/3/1998 15/4/1998 15/6/1998 CWC203 lining, constructionand repair of escapes CWC 204 - Kalimanci Dam - Raising and grouting CW I 0 29 ICB 30/7/1998 1/9/1998 15/10/1998 CReconstruction ofthe Right Bank main canal section Kocani-Mustafino repairing of the concrete CW I 0.29 bCB 30/7/1998 1/9/1998 I5/10/1998 CWC 205 lining, repair and construction of escapes CWC206 Rehabilitation of Distribution Network CW 1 0.27 NCB 30/7/19981 1/9/19981 15/10/1998 Total for the second year 4 1,57 CWC 207 -Reconstructionof the siphonsfor all main canal CW 1 0.84 'B 15/1/1999 15/2/1999 15/4/1999 CWC 208 - Reconstruction ofthe Right Bank main canal section Kocani-Mustafino repairing ofthe concrete CW I 0.74 NSB 30/4/1999 15/6/1999 15/8/1999 lining, repair and construction of escapes CWC 209 Rehabilitation of Distribution Network ICW1 0.14 iNZB 30/7/1999 1/9/1999 15/10/1999 Total for the third year 3 1.72 CWC210 - Reconstruction ofthe Right Bank maincanal section Kocani-Mustafinorepairing ofthe concret1 CW 0.60 NB 30/7/2000 1/9/2000 15/10/2000 lining, repair and construction of escapes CWC211 - Reconstruction of the Right Bank main canal section (major repair) I CW 1 0.92 NZB 31/3/2000 15/4/2000 15/6/200C Total for the forthyear 1.52 CWC 212 -Rehabilitation ofthe secondary distribution network from the Right Bank main canal CW 1 0.85 NCB 30/7/200i 7/9/2001 15/10/2001 Total for the fifth year I 3 0.85 otalfor Irrigation scheme Bregalnica CW 12 6.22
Whabilitationof the IrrigationScheme Polog __ .______._ _ Gostivarsko Pole CWC 301 Reconstruction of main canal and part ofthe irrigation network in Banjicko Pole CW 1 0.36 NCB 30/3/1998 15/4/1998 15/6/19F8 CWC 302 Reconstruction of the irrigation network in Gostivarsko pole (from main canal to earth canal CW 1 0.57 NCB 30/7/1998 1/9/1998 15/10/1998 CWNS 303 installation of equipment and measurement structures t cw 0.03 NS 30/7ii998 1i9/i998 I5/10il998 Total for the second year | 3 0.96 OWC 304 Reconstruction of the irrigation network in Gostivarsko pole (from main canal to earth canal) CW 1 0.59 NCB 30/7/1998 6/9/1998 15/10/1998 Total for the third year 1 0.59 (WC 305 Reconstruction of the network for separate irrigation CW I 0.94 NC8 31/3/2000 15/4/2000 15/6/2000 CWC 306 Small Rehabilitation Works CW 1 0.14 NCB 30/7/2000 1/8/2000 15/10/2000 Total for the fourth year 2 1.08 otal for Gostivarsko Pole CW 6 2.63 Xtovo scheme CWC 401 Reconstruction of main canal Radiovee - Tetovo, intake and covered section CW 1 0.42 NCR 31/3/1998 30/4/1998 15/6/199§ CWC 402 Reconstruction of the irrigation network CW 1 0.83 NCR 30/7/1998 1/9/1998 15/10/1998 CWNS 403 installation of equipment and measurement structures CW I 0.01 NS 30/7/1998 1191199 15/10/1998 Total for the second year __ _ 3 1.26 CWC 404 Reconstruction of the main canal Tetovo - Bistrica CW 1 0.87 NCB 31/3/1999 15/4/1999 15/6/1999 CWC 405 Reconstruction of the PS Rataje and irrigation network in that area CW 1 0.31 NCB 30/7/1999 7/9/1999 15/10/1999 CWNS 406 installation of equipment and measurement structures CW I 0.01 NS 30/7/1999 7/9/1999 15/10/1999 Total for the third year 3 1.20 CWC 407 Reconstruction of the main canal Tetovo - Bistrica (repairing of the concrete lining and structures) CW I 0.94 ?CB 31/3/2000 15/4/2000 15/6/2000 CWC 408 Reconstruction of the irrigation network CW 1 0.26 NZB 30/7/2000 1/9/2000 15/10/2000 CWNS 409 installation of equipment and measurement structures I 0.01 NS 30/7/2000 1/9/2000 15/10/2000 Total for the fourth year 3 1.21 7_320 1 20 560 CWC 410 . Reconstruction of the main canal Tetovo - Bistrica (repairing of the-concrete lining and structures) CW I - 0.97 NCB 3I/3/200i 15/4/200 15/6/2001 CWC 411 Reconstruction of the irrigation network CW I 0.94 NCB 30/7/2001 31/8/2001 15/10/200l Total for the fifth year 2 1.90 Total for Tetovo CW It 5.57 Fbtal for Polog 17 8.20
ital CivilWorks - _43 24.69 _ _
PanexB Page 53 Anex B Page 54 Goodsand Vehicles IS 501 Vehicle G 2 0.24 IS 15/12/1997 15/1/199 15/3/1998 IS 502 Hydrant,valves, pipesTikves and Bregalnica G 2 0.36 IS 15/12/1997 15/1/199 15/3/1998 IS 503 Measurementequipment( Tikves, Bregalnica, Polog) G 2 0.43 IS 15/12/1997 15/1/199 15/3/1998 IS 504 Cementfor self help pilot G 2 0.25 IS 15/3/1998 15/5/1998 15/7/1998 NS505 CoarseSand and Gravel for self help pilot G 2 0.09 N 15/8/1998 15/9/199 15/10/1998 NS506 ConstructionEquipment for self helppilot G 2 0.03 NS 15/8/1998 15/9/1998 15/10/1998 IS 507 Field and Office equipment G 1 0.18 is 15/2/1998 15/3/1998 15/4/1998 IS 508 WUA Pilot Program,Equipment G 1 0.06 IS 15/2/1998 15/3/1998 15/4/1998 IS 509 Pilot Trial for Improving Irrigation Tequnique,Equipment G 1 0.07 IS 15/2/1998 15/3/1998 15/4/1998 NS 510 Pilot Trials for Self-Help Rehabilitation,Equipment G i 0.01 N'S 15/3/1998 15/4/1998 15/6/1998 NS 511 BregalnicaWater ResourceStudy, Equipment G I 0.04 NS 15/3/1998 15/5/1998 15/6/1998 IS 512 Supportfor WMO Restructureing,Equipment G 1 0.06 IS 15/4/1998 15/5/1998 15/6/1998 NS 513 Algae Study, Equipment G I 0.00 NS 15/4/1998 15/5/1998 15/7/1998 IS 514 SiphonsDeterioration Study, Equipment 0 1 0.03 NS 15/4/1998 15/5/1998 15/6/1998 Total Goodsand Vehicles G 20 1.85 (bnsultants'Services TechnicalAssistance QCBS/CS/101a/1 Algae Problem CS I 0.10 QZBS 15/12/1997 15/1/1998 15/3/1998 QCBS/CS/101b SiphionsDeterioration CS 1 0.14 Q5BS 15/12/1997 15/1/1998 15/3/1998 QCBS/CS/101c Design Floods CS 1 0.07 QCBS 15/12/1997 15/1/1998 15/3/1998 QCBS/CS/I01d Tikves IntakeTunnel CS I 0.22 QZBS 15/12/1997 15/1/1998 15/3/1991 QCBS/CS/101e WMO RestructuringSupport CS 1 0.28 QZBS 15/12/1997 15/1/1998 15/3/1998 QCBS/CS/101f WUA Pilot Program/Pilotimproved Irrigation/Pilot self help CS 1 1.38 QZBS 15/12/1997 15/1/1998 15/3/1998 QCBS/CS/101g BregalnicaWater Study CS 1 0.17 QZBS 15/12/1997 15/1/1998 15/3/1998 QCBS/CS/101h PMU Support CS 1 0.78 QCBS 15/12/1997 15/1/1998 15/3/1998 SubtotalTechnical Assistance 3.14 i_ign and Supervision(Non-Bank Financing) SS/CS/102 Designand Supervision(l) CS I 0.42 SS 15/10/1997 N.A. 15/11/1 997 QCBS/CS/103 Designand Supervision(11) CS I 0.40 IBD 15/12/1999 15/1/2000 15/3/2000 SubtotalDesign and Supervision 0.82
rotalConsultants' Services 10 - 3.96 EMT National Staff DT/PMT/00I-... PMT Staff (Individual Contractsfor nationalstaff) 0.85 Drect 15/7/1997 15/8/1997 15/9/1997 TotahPMT NationalStaff 0 0.85 ImplementationSupport for PMU and WMOs QCBS/IOM/I01 Project Audit 0.06 QZBS 10/10/1998 10/12/1998 1/2/199 Other Procurement(Not Bank Financing) 1.06 cther N.A. N.A. N.A Total ImplementationSupport for PMU andWMOs 1.Ii
tal for MacedonianIrrigation Rehabilitationand RestructuringProject 32.461
bite: IS: InternationalShopping, NS: National Shopping;QCBS: Quality and CostBased Selection; SS: SoleSource _/: QCBS/CS/ bepcuredinonepackagel1_a_hwould Attachment V: Summary for Institutional Development, Technical Studies, and PMT Support (Base Cost)
Project Time Frame, Consultant service ComponentS Descriptaon of Technical Assistance and Nanonal Expat Travel 8 Goods other Total Cost Sub-Component Studies and InsoftueconalStrengthening Unit Cost TA Training & Equip (USot
Component 2 Institutional Development
Support for Water I PILOT PHASE Users Associations (a) Expatriate specialist (five visits) to: 199811999 - review the status of progress made on the formation of WUAs and their readinessfor the tasks; 16mm@ $20,000 - plan a strategy for creation, strengthening including training = $320,000 needs and preparation of training materials; - plan a time-bound programfor implementationby local specialists and reviewing its progress;and - conduct training of implementationstaff(refer list) - advising PMU in the implementationof WUA program. (b) Expatriate Gender issues Specialist (two visits) to advise on 2 mm @$20,000 integrationof women into WUAs and to train implementationteam in = $40,000 gender awareness (2 visits) (c) Trainingof: - WMO implementationstaff - farmers - Overseas training/visitsto successful WUAs LS $100,000 (d) Equipment LS $50,000 (e) Staff provided by WMO In incrementalO&M cost component 11EXPANSION PHASE (a) Expatriate specialist (four visits) to: 1999/2002 - Review progress,advise alterations in approach - Prepare plan for expansion of WUAs in Tikve and Bregalnica 15mm @ $20,000 - Prepare training programme, identify resource persons = $300,000 - Periodically review progress,update training, and advise (b) Trainingof: - vVMOimplementation staff - Overseas training/study tours - farmers - staff within the country LS $80,000 (c) 72mm staff provided by WMO In incrementalO&M cost component (d) Contingency LS $110,000 Sub-Total 660,000 200,000 50,000 110.000 1,020,000
Annex B Page 55 Annex B Page 56 Pilot Trials for (a) Staff: improving irrigation National programmemanager (24mm) supportedby short-term 1998/1999 techniques expatriate water ,managementspecialist inputs (6mm) - examine the physical conditionof the secondaryand tertiaries 24mm @$1800 for delivering waterto fields; = $43,000 - review the irrigationmethodology now practised by farmers, and discuss with them improved techniques for saving water (pressure and canal Irrigationareas) - recommend rehabilitationof the canals and the irrigation 6mm @ $20,000 methodologyto be adopted,the laRterhaving farmers' = $120,000 concunrence(canalet areas only) - install and monitor differentwater metering devices (pipes) - prepare a training programfor farmers and staff; - identify monRoringrequirements, data to be collected; frequency of collectionfrom both control& pilot area, and staff requirements; - review the progressat the second visit, make changes if needed, etc.; and - submit a report on impactof trials during the third visi. (b) Temporary staff for record keeping LS $20,000 (c) Training - training of farmers and staff; LS $15,O00 - Equipment(water measurementand monitoring instruments) LS $60,000 (d) Transportation(vehicle hire or mileage) LS $30,000 (e) Staff provided by WMO In incrementalO&M cost component Sub-Total 63,000 120,000 15,000 60,000 30.000 288,000 1998/1999 Pilot trials for (a) Expatriate specialist in participatoryto assist in drawing up 3mm@ $ 20,000 self-help rehabilitation proceduresand to train WUA staff = $ 60,000 (b) Input from expatriateWater Management specialist from Pilot Sharedwith Pilot trials above Trials, for design manualsand training (c) Training - WMO staff, WUA foremen and WUA members LS $5,000 (d) Equipment LS $10,000 (c) Staff provided by WMO In incrementalO&M cost component (e) Materials In rehabilitation component Sub-Total 60,000 5,000 10,000 ... 75,000
Modelling Studies: 1998/1999 (a) of water resources 12mm@ 1,800 of Bregalnicairrigation = $ 22,000 scheme to develop a (a) National team 12mm 4mm@$20,000 simulation model for (b) Intemational specialist 4mm = $80,000 optimal real-time (c) Training, Intemational LS $15,000 managementof (d) Transportationand other operatingcosts LS $20,000 water resources (e) specialist software LS $35,000 (b) RVardar belowpower (f) specialist hydrologicalfield studies LS $20,000 outlet Sub-Total 22,000 80,000 15,000 35,000 40,000 192,000
Supportfor Re- (a) Expatriatespecialists to organizationof WMOs - reviewthe workingof WMOs,structure, finances including water 1998/2002 charges estimationand collection,efficiency, etc., and assist 8mm over period preparationof annualperformance indices =$160,000 (b) Water law Specialistto assist new PvvMEdrafting Water Codes 1998 3mm @$20,000 =$60,000 (c) Equipmentfor WMOs LS $50,000 (d) Languagetraining for WMO staff LS $30,000 ,Sub-Total 220,000 30,000 50,000 300,000 Subtotal Institutional Development 1,875,000 Component 3. Technical Studies
Algae Problem Consultancycontract to a local institution(1) for: - review of the problemat site, recommendingmeasures to be adoptedfor testing, - apply the recommendedmeasure after obtainingapproval of PMU, 1998 - observingimpact of the treatmentover one irrigation season, - advisedifferent treatment if resuftsunsatisfactory and try In the nextinigation season, - collect all necessarydata for comparativeevaluation, - submita report onthe findingsand recommendmeasures ,and - procureall materialsneeded 1) Local institutionwould need about 2.5mm of intemational specialist assistance Sub-Total 46,000 50,000 4.000 100,000
Studiesof Siphon ConsuHtancycontract to a specialistfirm toall maincanal siphonson Deterioration the three schemes,and reporton deterioration,specifically: 1998 - physicalexamination intemal surface, specificallythe steel lining - video intemal examinationof small diametersiphons - measurementof dynamichead loss across siphon,and calculation of rugosityycoefficient - static measurementof waterleakage - whereleakage is significantinvestigate cause and extemal inspection report on condiion of each siphon in sufficientdetail for tendering Sub-Total 82,000 42,000 26,000 150,000
Estimationof Design A consuitancycontract to be awarded to: Floods - reviewthe availabilityand reliabilityof hydologicaldata for Tikves and Kalamancidams; 1998 - reviewthe methodology/softwarein use by the decision makersfor estimationof design and maximumprobable floods, and recommend(if required)better technique; - carry out the assessmentof two floods for the two dams; - comoarewith the previousdesign floods adopted,and - work out the sufriciencyor otherwiseof the spillwaycapacity Sub-Total 60,000 60,000
Annex B Page 57 AnnexB Page 58 Study of Altemative A local consuiting firm to: Alignmentfor - carry out geological and geophysicalinvestigations for selecting 1998/1999 Tikves Intaketunnel an altemative alignmentto replace the inlet portion of the tunnel releasing waterfor Tikves irrigation scheme, and - preparea feasibilty report giving implementationmethodology and cost estimates Sub-Total 100,000 100,000 200,000
Component 4. ProJect Administration and Management
Supportfor Project Project ManagementUnit (PMU)to be createdfor administering 199812002 ManagementUnit the project, the activities to include: - overall control and supervisionof the project implementation, - rehabilitationplanning and overseeingthe output and providing decisions soughtby the consultancyfirms, - overseeingWMOs' system managementfor O&M, measurementand schedulingof deliveries and monitoring,including data collectionfor water use efficiency (Expatriateexpert for 12 months to assist) - financial control, cost accounting of projectinvestments, and coordinationwih donors - review of procurementdocuments, and evaluation reports by by consultants and awardcontracts (a) National staff 500 mm @ 1,500 = $750,000 (b) Expatriate assistance,Chief TechnicalAdvisor (8 mm), 30 mm @ 20,000 ConstructionSupervision (4mm),Procurement (4mm), = $600,000 Financial Control (4mm)and unallocated(4mm). (c) Translation and interpretationservices LS $75,000 (d) Pool of national specialists 12mm @$1800 = $22,000 (e) OperationalCost of PMU (incl vehicles etc) LS $400,000 (f) Equipmentand vehicles - computers, design, office & survey equipment LS $100,000 - 5 4WD vehicles LS $125,000 (g) Trainingof PMU and Ministry staff LS $80,000 (h) Supportfor Design Instiute -3 vehicles @$25,000 LS $75,000 - office and survey equipment LS $50,000 Sub-Total 847.000 600,000 80,000 350,000 400,000 2,277,000 Subtotal Project Administeratlon (EXCEPTDesign and Supervision) I_I_2,277,000 TOTAL 1,220,000 1,832,000 345,000 685,000 580,000 4,662,000 AnnexB Page 59 Attachment VI
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT ENVIRONMENTAL MONITORING
TERMSOF REFERENCE
Introduction
1. The project provides for the rehabilitation of the three irrigation systems - the Tikves for 13,000 ha in central southeast part of the country, the Bregalnica for 25,510 ha in central northeast part, and Polog for 9,200 ha in northwestern part of the country. The three systems commenced irrigation in the seventies. There has been no visible or recorded adverse impact on environment as a result of continued irrigation by these schemes. The Hydrometeorological Institute, Skopje, monitors the quality of water at a number of stations, but these are not necessarily linked to the locations where irrigation supplies are withdrawn or where the outflow comes back to the river. Tikves, Bregalnica, and Polog systems draw their supplies from the Tikves reservoir on the Crna river, Kalimanci reservoir on the Bregalnica river, and Mavrovo reservoir on the Mavroski river. Mavrovo reservoir depends almost entirely on diverted water from many streams through a system of feeder canals and tunnels. Polog also utilizes the summer flows of Vardar which are small. The proposed environmental monitoring is to fill this gap in information. The Tikves and Bregalnica suffer from formation of algae which creates problems in the operation of these systems. The monitoring data would also be useful in the solution of the algae problem.
Scope of Monitoring
2. The monitoring shall be limited to the quality of water. Samples will be collected at the following locations:
(a) from the rivers CGnaand Bregalnica at locations which are approachable and just upstream of the two reservoirs.
(b) from the Vardar river, upstream of the Banichko Pole canal intake, downstream of the junction of the Raven hydropower station, downstream of the Gostivar irrigation area, and downstream of the Tetovo irrigation area.
(c) from the main canals of each area (Tikves, Bregalnica, Banichko, Gostivar, and Tetovo) at a convenient station near the intake of each canal.
(d) from the Crna river midway and downstream of the Tikves irrigated area, and
(e) from Bregalnica river midway and downstream of the Bregalnica irrigated area.
Frequency and Duration of Sampling and Testing
3. The sampling shall commence in April and end in November each year. Sample will be taken at three month intervals. All the samples will be tested for quality pertinent to environment. The participating WMO shall propose the constituents to be tested. The sampling and testing would continue under the project for five years. Annex B Page 60
Reporting
4. The participating WMO will submit a report on the sampling and testing for each year by January of the following year, giving an opinion for each scheme if it caused any adverse impact.
Responsibilityof the participatingWMO
5. The WMO shall be responsible for all sampling equipment and personnel and the cost of quality test and presentation of the reports. The participating WMO shall be responsible for transport and access to suitable points on the river sections, etc. for sampling.
Responsibilityof the PMT
6. The PMT shall arrange for participating WMO's access to the main canals. AnnexC Page I
OVERVIEW OF INSTITUTIONAL AND LEGAL FRAMEWORK
A. Institutions Responsible for Water Resources
1. Ministry of Agriculture, Forestry and Water Economy (MAFWE). The MAFWE has general and overall responsibility for water resources regulation and management in the former Yugoslav Republic of Macedonia, in particular for water resources planning (refer to Section III below) and granting abstraction licences. In addition the Ministry, through its Department for Water Economy (DWE) has direct responsibility for the use of water for irrigation, for river regulation, erosion, flood control and drainage. The MAFWE is also responsible for management and control of groundwater resources use and development.
2. Water Management Organisations (WMOs). WMOs were established on a scheme and district basis with local responsibility for management of irrigation schemes. There are 26 WMOs constituted and registered under the 1981 Water Law, and a further 10 with a different background. WMOs are differentiated into two classes: (a) the main WMOs which own the main facilities, the dam, diversion and main canals, and often have additional regional responsibility for river control, erosion protection, drainage and flood control and (b) minor WMOs whose responsibility is limited to distribution of water from the secondary distribution system.
3. Water Management Association (WMA). In 1978 the 26 main WMOs collectively formed the WMA to provide technical backup to its members and representation of the industry to government when required.
4. Ministry of Urban Planning, Construction and Environment (MUPCE). The MUPCE is responsible for municipal and industrial water supplies, waste water treatment and also for the environment. Public municipal enterprises for water treatment and distribution are also responsible to MUPCE.
5. Ministry of Health (MoH). The MoH is responsible for the control of drinking water quality, for setting standards and for monitoring the quality of the distributed water.
6. Ministry of Economy (MoE). The MoE is responsible for electric power, including hydroelectric generation, but subject to overall planning by the MAFWE.
7. Hydro-Meteorological Institute (HMI) is a Public Government Enterprise, and as such reports to, and is directly financed by central government. HMI is charged with responsibility for monitoring water resources and the climate, and collects and maintains records of river (and lakes) discharge and level, sediment, water quality and pollution. HMI is also responsible for flood forecasting and warning.
8. Geohydro Projek is established in a similar position to HMI, but with technical responsibility for groundwater.
9. The Water Development Institute (WDI). WDI was created in 1952 by the Government as an institute for planning and study of water resource issues. In 1986 it was changed to the Institute for Science and Investigation of Water Resources, Erosion and Pedology, and became self-financing. Although it now uses the title WDI, the institute is unchanged and remains a Scientific Institute related to, and a member of the Senate of the University St. Kiril and Metodij of Skopje. WDI effectively AnnexC Page 2 operates as a private sector consulting firm in the field of irrigation and water resource development, and is now the leading organisation in this field in the country.
10. Melioprojek was established in 1952 by the Government with specific responsibility for investigation, planning and design of major irrigation schemes in the country. On completion of six major irrigation developments Melioprojek, whilst remaining a government owned organisation, transferred to the WMA and became its technical back-up unit.
B. The Legal Framework
11. At the moment the 1981 Water Law still governs the water sector. Under this law the MAFWE is charged with overall responsibility for water resources in the former Yugoslav Republic of Macedonia as stated above. Under the Law MAFWE has principal and overall responsibility for water resource planning, for issuing agreements for water use, such as for irrigation , power, drinking water etc, and for issuance of abstraction licences which set out the conditions of use, limitations etc.
12. The 1981 Water Law provides the legal basis for operation of the irrigation system by the WMOs, it specifies their responsibilities and tasks, and it sets out the irrigation code and regulations, the including basis of water charges, the rules and penalties covering abuse of the systems and non-payment of fees, and the basis of the relationships, and contracts between, the WMOs and water users, Agrokombinats and private farmers. The WMOs themselves were established under the former socialist system as self-managed, self-financed public entities. They have full responsibility for their own management, for technical operation of the irrigation systems and collection of water charges.
13. The 1981 Water Law provided for user representation in irrigation management through "SIZ" organisations which functioned at different levels, from district to national. The SIZ organisation had two key functions: (i) it obtained public funds from central government through general taxation, which were used to fund studies and action for public benefit, including small irrigation schemes, (ii) it was the forum through which users interests were represented in important decisions, particularly the annual setting of water charges. SIZ and the WMOs would agree water charges, and these would be presented to Parliament for approval.
14. The 1994 Constitution for the former Yugoslav Republic of Macedonia cancelled the SIZ organisation. This has had two consequences: (i) the sector is left without the support of the funds obtained from general taxation, (ii) there is no longer any effective user representation neither at the national level, nor locally with individual WMOs. This is particularly important with regard to setting water charges.
15. A new Water Law is under preparation, the draft has been approved by Government and will be presented to Parliament during 1997, and is expected to become law by the end of that year. The proposed new law will completely replace, update and upgrade the 1981 law, and will replace the gaps lost with repeal of the SIZ provisions. The main provisions are:
* All WMOs will covert into a Public Water Management Enterprise (PWME), there will be a single PWME, integrating all WMOs, but it is intended the irrigation schemes will be managed by separate economic units of the PWME. Under the existing Public Enterprise Law this conversion should be completed by February 1997, but is delayed. AnnexC Page3 * There is provision for creation of Water Users Associations (WUAs)under the proposed new law, and to these the PWME may pass responsibilities for operation and management of minor componentsof the irrigation systems.
* A new Water Fund will be establishedfrom general taxation which will supplementwater charges, and be used for general expenses in the general national interest, includingmaintenance of the main facilities,such as the dams, water resource planningand environmentaltasks.
* The Hydro-MeteorologicalInstitute has been specificallyincluded under the proposed law, and their hitherto independenttask of monitoringintegrated into the sector plan.
* The PWME will be assigned responsibilityfor drawing-up new regulations and standards for the sector, and this will be amongst their first tasks. These regulationswill include the irrigation code and procedures for calculating and agreeing water charges. The PMWE will also be charged with preparationof the national water resourcesmasterplan.
* The MAFWE will be the regulatorof the sector, with particular responsibilityfor appointmentof the PWME Director and Board and approval of accounts and key tasks such as the water masterplan, irrigationcode and other regulations.
III Water Resource Management
16. Overall responsibilityfor planning and managementof water resources(including groundwater) lies with MAFWE.A water masterplanwas prepared in 1975 by internationalconsultants, this provided a developmentplan which integrated new dams for river regulationwith irrigation, power, industrial and domesticrequirements, and this work was the basis of the 1977 Vardar/AxiosRiver Basin Plan, also by international consultants. The 1975 masterplan projected demands up to 2025, showing the followingwater balances in million cubic metres.
Catchment Annual demand Resources Surplus Dom/indust Irrigation Bio min Retum flow River flow Current demand, average year Vardar 439 643 843 479 4771 3325 Cmi Drim 25 41 202 28 1681 1441 Strumica 47 124 28 62 177 40 Current demand, dry year Vardar 439 643 843 479 3340 1894 Cmi Drim 25 41 202 28 1345 1105 Strumica 47 124 28 62 106 -31 2025 demand, average year Vardar 1146 1835 843 1284 4771 2231 Cmi Drim 55 165 202 77 1681 1336 Strumica 58 135 28 73 177 29 2025 demand, dry year Vardar 1146 1835 843 1284 3340 750 Cmi Drim 55 165 202 77 1345 1000 Strumica 58 135 28 73 106 -42
17. The major catchments will have surplus water into 2025, but local shortageswhich could occur in dry years will be met by constructionof additionalstorage reservoirs or transfers. Clearly much of the underlyingassumptions now require review, and WDI has been instructedby MAFWEto update the plan. AnnexC Page4 18. The major part of the former Yugoslav Republic of Macedonia's water resources comprise internationalrivers or lakes. These were covered by internationaltreaties and agreementsmade by the Socialist Federal Republic of Yugoslaviaand its neighbours,and which have been recognised by the former YugoslavRepublic of Macedonia. Annex D Page I of 11
THE FORMERYUGOSLAV REPUBLIC OF MACEDONIAIRRIGATION REHABILITATION AND RESTRUCTURINGPROJECT
ECONOMIC ANDFARM MODEL ANALYSIS
Introduction
1. Quantifiable economic benefits of the Project for the economic analysis are derived primarily from increases in agricultural production due to: (a) increase in yields with secure irrigation water for currently non-irrigated or poorly irrigated area; (b) prevention of the future decline of irrigation areas through improvement in the physical infrastructure; and (c) conversion to higher value crops due to the increase in availability and reliability of irrigation water.
2. Yield. Separate crop models have been prepared for Tikves, Bregalnica and Polog, considering the substantial difference in soils and climates (Table A). For each main crop the following three cases are analyzed: (a) without irrigation; (b) with inadequate irrigation; and (c) with adequate irrigation in order to enable more detailed comparison between with- and without- project scenarios. Although irrigation is supplementary for many crops, these models show that improved water delivery would substantially increase the yields and consequently the financial returns of all crops. The benefits are particularly important on high value crops such as fruits and vegetables and, to a lesser extent, fodder crops.
3. Prevention of Further Deterioration is considered to be a major project benefit in Tikves where the schemes have deteriorated since early 1990s, and to a lesser extent in Bregalnica. With the project, deterioration would be stopped and the irrigated areas are assumed to recover their historical levels before deterioration (Tikves, Bregalnica) or levels of part of the scheme already rehabilitated (Polog). The detailed scenarios for the three schemes are summarized below: (a) In Tikves, the deterioration since early 1990s led to an increase of unirrigated area from 1,627 in 1990 to 5,636 hectares in 1996 (or an increase from 13 percent to 43 percent of total service area). Without the Project, the Government and WMOs anticipate that the entire system could operate at only 25 percent of the designed capacity in the next 10 years due to the damages in the main and secondary canals, and that the irrigated areas would drop from the current 57 percent to 29 percent. In addition, about 50 percent of irrigated area would suffer from poor irrigation. With project, irrigated areas would recover their 1989 levels (Table B).
(b) In Bregalnica, irrigated areas have substantially reduced since 1990 (from 59 percent in 1990 to 29 percent in 1996) due to several factors such as deteriorated irrigation infrastructure, loss of agricultural market, and shortage of water. While it is difficult to exclusively identify the effect of the deteriorated irrigation schemes on the decrease of the irrigated area, a conservative estimate suggests a further decrease of 25 percent of the current situation over the next 10 years, as summarized in Table C. The impacts of project partial rehabilitation has been assumed as follows:
* Irrigation area in the left bank, where the scheme is to be entirely rehabilitated, would recover its 1989 level; AnnexD Page 2 of 11 * In the upper right bank, the rehabilitation would concentrate on the main canals and selected secondary network, only 30 percent of benefits from full rehabilitation has been assumed;
* The lower right bank would benefit from the rehabilitation of the main canal upstream which would decrease leakage in the upper part and increase availability of water in the lower part.
(c) In Polog, no further deterioration is considered under the without-project scenario, as the scheme have already deteriorated to the lowest possible condition. With project, the irrigated area is assumed the level of the Radiovce - Tetovo section of the scheme which has been rehabilitated recently (see Table D). 4. Cropping Pattern (Tables E, F and G for the three schemes). Cropping patterns in the project scenario have been developed in consultation with local agronomists based on existing and historical cropping patterns and agronomic patterns under reasonable assumptions concerning the marketing and availability of irrigation water. The historical statistics on cropping patterns clearly demonstrate that both farrners and Agro-Kombinats adjust their crops to the water availability situation. In Tikves, it is anticipated that irrigated grapes (wine and table grapes) and vegetables would resume the 1990 level, as market in neighboring reestablishes. Alfalfa is also expected to increase as livestock will have a greater importance. In Bregalnica, considering the limited demand for rice and competition with imported cheaper rice, the area under rice would remain at a minimum level of about 3,000 ha. At the same time, vegetables and fodder crops would replace wheat and barley on substantial areas. In Polog, the historical comparative advantage for livestock production and the recent increases of milk and beef production with good marketing opportunities would be boosted by increased fodder production as a result of improved irrigation.
5. Prices. The prices used in the economic and financial analysis are summarized in Table H. Financial prices have been converted to economic prices in the financial crop models to obtain economic crop models. These economic prices are import parity prices for the major tradable outputs and inputs such as rice, maize, wheat, fertilizers.I For products which are not directly traded (grape, fruits, and fodder crops), the financial price has been used. In Polog scheme, the value of fodder crops has been converted into the value of final animal products such as milk and meat. The major distortion appears with rice which financial price (MDen 20 per kg) could be compared to its import parity price (MDen 11 per kg ), reflecting the current protection of the rice. In the former Yugoslav Republic of Macedonia, inflation rate is contained at the international level in 1996 and the first half of 1997, (1.3 percent in the country and 2.0 percent in G-5 countries on average), no major increase of prices of non-tradable goods relative to those of tradable goods are anticipated in the short and medium termns.
6. In order to calculate economic costs of rehabilitation, a conversion factor of 0.95 has been used for construction work, corresponding to a weighted average between I (the standard conversion factor for material and skilled labor) and 0.8 (conversion factor for unskilled labor) considering the current high level of unemployment. EconomicAnalysis
7. Methodologies. Future cropping patterns have been projected and multiplied by these economic crop models to calculate the future net benefits streams. Considering the current marketing
' (An exchangerate of Denar44 = US$ I has been used, beforethe devaluationof July 1997 as all financialprices had been collectedbefore this period). AnnexD Page 3 of 11 difficulties and time required for private farmers to update the irrigation equipment, conservative assumptions on the expected speed of the increase in the irrigation areas (10 years from the start of the project) are used. These streams are completed with the economic investment costs and incremental O&M costs and economic rates of returns over the next 20 years and net present values are calculated, using an opportunity cost of capital of 12 percent.
8. Economic Return. Under these assumptions, the estimated economic rate of return (ERR) would be the following: 39 percent for Tikves, 21 percent for Bregalnica, and 36 percent for Polog (calculations in Table I). Net Present Value (NPV) of investment in Tikves, Bregalnica, and Polog estimated at 12 percent is US$ 23.5, 3.6 and 14.8 million respectively. High economic return in Tikves is due mainly to the large portion of high value crops (i.e., grapes), which has already captured a strong market. The ERR of the entire project, including all costs of institutional development, technical studies and administration is estimated at 29 percent and the NPV at US$ 37.8 million.
9. As stated in para. 1, economic benefits of the Project are accrued through the following three channels: (a) return of the currently unirrigated or poor irrigated land to full irrigation through the rehabilitation of deteriorated systems (Channel 1); (b) prevention of future decline (or collapse) of irrigation areas through improvement in the physical infrastructure (Channel 2); and (c) conversion to higher value crops due to the increase in availability and reliability of irrigation water (Channel 3). Channel I would be the most important factors: it would account for about 40 percent, 50 percent and 30 percent of the expected economic benefit respectively in Tikves, Bregalnica and Polog. Chatnel 2 vould be particularly important in Tikves accounting for about 30 percent of the total economic benefit, as the system is expected to further deteriorate fairly quickly without the project. Channel 3 would also account for the large part of the economic benefit, particularly in Bregalnica and Polog: respectively about 30 percent, 43 percent and 69 percent of the expected economic benefit would accrued the crop conversion in Tikves, Bregalnica and Polog. However, these assumptions are quite reasonable. In Tikves, with irrigation, certain areas would be converted to grapes, which has already captured market. In Bregalnica, crop conversion from rice to other crops such as fodder and vegetables are already on- going as price support for rice has been discontinued. In Polog, conversion from rain-fed wheat to irrigated alfalfa and maize for livestock purposes is expected with the rehabilitation of irrigation scheme.
10. Sensitivity Analysis. Given considerable uncertainties attached to the assumptions used in the economic analysis, sensitivity analysis was undertaken to test for the risks in marketing and implementation delays. (a) In the analysis, it is assumed that the farmers would switch to higher value crops as a result of improved access to irrigation water, improved agricultural practices, and re-established market. There is a risk, however, that this may not occur due mainly to the marketing problem. To test uncertainty, the economic return reducing the benefit accrued from crop conversion, Channel 3, by 50 percent (100 percent for Bregalnica), was estimated.
(b) Delay in establishing WUAs and restructuring WMOs would also be a major risk. To test such uncertainty, the economic return was estimated using (i) a two-year delay in achieving the expected benefits; and (ii) a reduction by 20 percent of the expected benefits due to restrictions imposed on top farmers not willing to pay the water fees.
11. The analysis revealed that the Bregalnica would be sensitive to these two risks: ERR would drop to 13 percent under both cases of marketing difficulties and two years' implementation delay, making the investment marginally economic. On the other hand, rehabilitation of Tikves and Polog schemes AnnexD Page 4 of 11 would maintain strong economic viability even under these two risks. Table I summarizes the estimated ERRs under this economic analysis.
Financial Analysis
12. Illustrative Farm Models. The farm models were developed through interviews with farmers within the project areas to illustrate typical beneficiaries. Farm models are defined on the basis of their size: small farmers with less than 1 hectare; medium with I to 3 hectares; and large with more than 3 hectares of land.
13. Constraints in Input. To take full advantage of improved irrigation, farmers would have to increase the use of annual inputs such as chemicals, fertilizers, improved seeds requiring additional financial resources. This incremental requirement would range from a minimum of MDen 7,000 per hectares (wheat in Bregalnica) to a maximum of MDen 68,000 per hectares (table grape in Tikves). However, interviews with farmers revealed that this requirement would not be a major constraint, as they could utilize savings cumulated in early 1980s. Smaller farmers would also rely on overseas remittances from relatives (very important in Polog). However, resources for larger investments such as large animals (e.g., milk cows) or the replacement of their farm equipment are deemed to be constraints due to the lack of access to credit. Upgrading irrigation equipment is also perceived important but not critical.
14. Impact on Farming Families. Table K summarizes the project impact on the farming families by the size of the farming land. It is demonstrated that the rehabilitation of irrigation schemes would bring important financial impacts to the private farms: on average about MDen 23,000 of incremental benefit per hectares, or about 50 percent increase of the current farming income. The return per labor/day would also increase by an average of 18 percent from MDen 968 to 1,138. In addition, these farm models suggest that the labor requirements would not be a constraint in the area, -and interviews with farmers endorsed this point. The table also demonstrated that the project benefits would generally increase and the per hectares net benefit would decrease with the size of the farmn. This could be attributable to the higher level of intensity of small farms to compensate the small size of the holdings which otherwise would not be sufficient to sustain the family.
15. Impact on Agro-Kombinats (AKs). The Project would also benefit seven AKs in Tikves. While it is difficult to estimate project benefits on each of these AKs, an illustrative model is developed to demonstrate the project impacts on AKs, based on the data of Agro-Kombinat ZPT Dubrovo. This AK owns about 520 hectares of land and mainly cultivates wine grape for either wine or table grape and produce milks; however, due to the deterioration of the irrigation schemes, the area for grape production has decreased from 242 hectares in 1990 to 100 hectares in 1996. Upon completion of rehabilitation, the AK could take advantage of improved irrigation by the following plans: (i) replanting an additional 50 hectares of grape over a period of about 10 years, as about 120 hectares of grape vines are dead; (ii) growing high value vegetables on about 50 hectares; increase the area for fodder crops to 80 hectares in order to provide feed to milking cows; and (iv) replanting 25 hectares of cherries. The analysis, summarized in Table K, suggests that the AK would generate additional farming revenue of US$ 340,000 or $660 per hectare per year. 16. Impact on Affordability of Water Fees. In the farm model, the required water fee relative to the gross value of the fanning products has been calculated as a proxy for the capacity and affordability to pay. These figures currently range from 11 percent -13 percent in Bregalnica to 16 percent in Tikves. With the project, calculations show that these percentages would decrease to 9-10 percent in Bregalnica and Polog and 12 percent in Tikves. However, these percentages are still higher @:~~~~~4 ::% 0 :,~ -:
oo~ ~ :S ~ ~ ~~::t :" ~' "" t :o : l-: :D .> A : . = 1 t aN -To o A t^F, -- ON 0X tn k^ c C4 C- m a,Zn m 2 >n :° | ° W :8 ° ° 8 8 o~ ( o N enoT on o Omo o4'I o o l
i ° 0 : . .,. 1.:o. O.u o o o ...... - . .
r i~~~~~~~~eon. m . n t- . t- :,0%. en ,, ,. M.1 t.. -0,.- ed =n . od O w0 M^w¢>^- ME @ : ::: . w 1:: :: C.: :In. : ::.. + : .t E .
X D 9; a o^ °^ t6 o.JAt>_ t O\'tL.- en' 00
ti-
Y Wo~~~~I .. . E.3: . .. <...... =.°°r 5~~~~~~~C C> C> Qt C 0 C) C> e ( i Annex D Page 6 of 11
Table B: With and Without Project Scenario in Tikves
...... ___._._. __...._ A i~tZh:Sufficien weaithInsufficien riain Ae nt erriate 0 0 j0tlAI tct|~~~~~~Ar I- enlen tg 0|Aatg d|
rrtS itu tin -29% (3,770-ha) (42% (5,460 ha
Situation -inP:Y:10andthereafter 15%:(1 885 ha) 15%(1,885ha) 71%(9,230 ha) .... .5i 1%i:E(%2:ESEEiEiiE; e-EE :;f:EEE:: ;-i:;5::;:;:;003;::: OmSitinQ:P Y1 0 ad thereafter_r% 87% (11,310 ha) 0ne 1 3%(1,690ha). ,witht proje t - _ _ __:_-._ _ _
Table C: With and Without Project Scenarios in Bregalnica IAreawithSufficient J:Area With 1Insufficient Irrigation ~ rea not rriae ...... 0 .Egj:0f0000fl00:00000l00000000|400000000-...... :000|00t* t nt00 tl0000000haAt6d.ii ...... Eii CurrentSituatiea 3 (34,28 ha) 13% (3,278ha) 74%(18980 ha)
Situation::in PYI0 and thereafter f: 10% (2,506 ha) 10% (2,506 ha) 80% (20,148ha) w ih outp roect______iuatio inmPYIO and thereafte r 59%:(14,927 ha) 0% 41% (10,5831ha)
Table D: With and Without Project Scenario in Polog*
...... -:-:0:;iSS::-:0:Areawith Sufficien Atea with Insufficient rrigtir
__ ...... ____.....__. J rrig atio n.*m.. o r i a e CMCurrent:Situ tion 19%o(1,576 ha) 199% (1,576 ha) 62% (5 159 ha)
Situaizition-in F-Y:10and th ereafter :-19% (1,576 0ha) 49%(1,576ha)3 62%0(5,159 ha) p0 wt o utpro ject ______FY10Situationand i tliereafter 7 (1 h 0 27%: 2 ,: 0 ha)
* Only area concerned with the project Annex Page 7of II
Table E: CroppingPatterns in Tikves
1990 r Present PYlOWit rjc :% Hectare J IHectare % Heictare
_ hi_e_____e______35 4,550, 25' 3,250 35 4,550 TableGrape $8 1,405650 8 1,4 5 602 :260:650650 Tomato. ~~~5 650 2 260 .5 650: Watermelon ~~~~~~2 260 I 130 2 260 Wheat ~~ ~ ~~~~~192,470 1170:I 9 1,170, Maize 226 390 5650 -altfa 7 910 .7 910. :14 1,820: -Orchards (Peache0s), 4 520; 4 .520 4 520 Sub-Total ~~~ ~~~8711,310 58: 7,540 87 11,310
N 4r - rr g ted C rops ______~WineGrape 2 260 6 780. 2 260 Table Grape. 1 130 2 260: :I 130 Wheat: 4: 520 21 2,730 4520 Alfalfa0 0-0 Orchards (Peaches) I 1I 1: 130 1 130 Fallow 5650 12 1,560 5650. Sub-T0tal 13 1,690 ~~~~~~~~~~~~425,60: 13: 1,690
.TotalScheme :100 13,00010130000 3,0
Table F: CroppingPatterns in Bregalnica
:1990 Present f PYIOWith Project % Hectare % Hectare. % Hectare-
Irrigated Crtops______Rice 28 7,122 15 3,833 15 3,833 Paprika 3 734 1: 987 494 Tomato ~~~~~~~~3734 128 4 964 Wheat ~~~ ~~~~~13:3,207 3779 164,120 Maize, 3 658 1: 377 6, 1,4655 Alfalfa 5 :1,231 3 716 :10 2,462 Vineyard 5 1,241 1 276: 4 1,129 Snib-Total 59 14,927 2,6 65559 14,927
Non-Irrigated Crlops ______-Wht 24 :6,11a 43 10,952: 24: 6,113 Maize 1259 1354 1 326 Alfalfa 2 482 3 703 2 4821 Vineyard I 248. 3 718 1 318 Fallow 143,482.. 25 6,253 13 ,34 Sub-Total: 41 10,583 74 18,980 41 :10,583
Total Scheme 100 25,510 100 25,510 100 25,510 AnnexD Page8 ofII
Table G: CroppingPatterns in Polog
1Averag19..196 Aeag ...-19.YI ih rjc ~.Radoe - etv a Poect Area::. % Hectare: j % Hectare:.J.
Maine bean 42 1 ,524 3,442, ]:Alfalfa/ meadow158635 1,0 PapiaItomato 434 555~. :PotatojI cabbage 4j2 125 4 26.
Orchards 5 1 7.7 ::Sub~-Total. 73 38 3,151 ~ 73 6,102
Wheat ~~~~~~~~~~ 1i271 62: 5,159i 27~ ~2,208i 27 ~ 62 515 27. 2,208 TotalScheme 1903 100 8,11100 . ,3.10 Footnoepat ofa] hishe schme, wich isnot iclude in th §rject,ha berhailitated in 14986'resultingi animporat increase in iririgated:ara.scrent crppn ptenhas bJeenused as:an achievable tare after ehabilitation intheproject area.
Table H: Price Used in EconomicAnalysis Unit: Denar/kg Items Financial Price f Economic Price~~~ CovrinFactor ~:Output Weat]10 7. ~ iI~74%~
Maze 96. 71%~ Alfalfa ~~~~~~~~~6~6 100% Paprika 9 ~~~~~~~~~~9 100%/ Toato 4. 4. 1 00%/ Peach 8 ~8 ~ 100% .Wine Grape 8 100%] Talrape 112 12A00 Potato 99 1I00%/ ~Apple i 4 4 1~- 100% Milk" 15-400%~ cattle: (lIve weight) 07010 Inputs Construction Cost ~~~95% Fertilizer 15/15/15 110192%: Urea 1 0. 2 Chemicals :100% F arm Meqhanization 500 per tractor/hrf 7504pertractor/hr 150%~
Fannr's: labor 300per day: ______Annex D Page 9 of 11
Table I: Summary Sensitivity Analysis
Base Case - Marketing Risk - Institutional Risk Bregalnica 21% 13% 13% Tikves 39% 31% 27% Polog 35% 28% 23% Total Project (*) 29.% 22% 20%
Table J: Main Results of the Farm Models by Type of Farm
...... }~~~~~~~~SaEt einSz siag, PoF r X ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... i...... '. '...... '''... (..
Ae,:.:g. .. a...... , e r . o; .. . 3 .4 . E Wa~e~--- ...... WItotroct,9767 683133 With1~~~~~~~o~~~ect 5~~~~~97~~~~ 12,289~~~...... 4,2 ...... £...... WaterVa1u~~~~~~~~~~~~F~~~~~~~~~~~~~e o.....~~~~~%of~~~~~~~~~~r*~~~~~~ss IrrigatedCrop~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... 2EsE~~~~~~~~~~~~~~~~~~~Witbont~~~~~~~~~~~o~~~~efa 1~~~~~~~~2%...... la, .. .. . 13% 14% 13%~~~~~~~~~~...... WithP~~~~~~~~~~~~o~~~~ect 8% 11% .t11%~~~~~~~~~~~~~~...... '.'''.':.'''...... R~~~~~~~~twnperLabor Day~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... s '.'....:''..''DU :' '..'"..':Total ''j' (MDe~~~~~~~~~~~i) 'S.'''."'."":'. .. '"1,453 '".... ''" '' ' :'"1,021 " ...... 1,361~~~...... Percentaget~~~~~~~~~~~~fIncreas~~~~~~~~ 18% 29% 7% 18%~~~~...... IncreasedLabor Requfrement~~ ~~~~~~~~~~~...... ~~1nayperyear 4 .... 22~~...... - Inperceinage 17% 42% 11%~~~~~~~~~~~~~~....24.... Annex D Page 10 of II
Table K: Project Impact on a typical AK
1990(1) Present(1) PY10with project(2) :______% ha % ha % ha Wine Grape 47% 19% 29% 242 100 150 Paprika 5% 25 Tomato 5% 25 Maize 8% 8% 40 40 Alfalfa 13% 5% 8% 69 24 40 IndustrialCrops 11% 59 Orchards 5% 25 RainfedWheat 65% 19% 336 100 IrrigatedWheat 29% 4% 22% 150 20 115 Sub-total 100% 100% 100% I 520 520 520 Without With project Incremental Impacton the Incomeof Agrokombinat: Project(3) _ (PY10)(4) (PY 10) Net Incomeof the AK (US$) (255,246) 87,948 343,194 Net Incomeper hectare (US$) (491) 169 660 Net Incomeper employee (USS) (1,501) 733 2,234 Water Feeas % of grossvalue of the AK 21% 13% -8% (1) Source:Negotinsko Pole WMO. (2) On the basisdiscussions with the Directorof the AK Dubrovo (3) Assumingyields corresponding to insufficientirrigation (4) Assumingyields corresponding to sufficientirrigation TableL: EconomicCost/Benefit Streams (US$ Million) Annex D Page I11of I11
2. - 29 -1.6 29 -Li .. T ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... , ,,.,.g, , , ......
4 -0 -1.7 , 07%r -6 -24iiSg ....~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~.3... . i...R. R,.' =. '. '. ' ',..2..-.. ".i . '''i'''''i..,,,,,,,,3 2 -'.'.. 11 1.3 2.2 . .3.5~~~~~~~~~~~~~...... 12 5.3 2~~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~.....3.15.8
=~~~~~~~~~~~~~~~~~~~~~~~~~~~. .''.''',' 13$3 ...... ".'m. 21' '.,... ~~~~~...... 'i' " "W... R'.. . . ,"'"'''5.3 ...... -- ' ' ''''.....-...... 15.8~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... 14$2 2.2 5.3 .. . 15,8~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~.... 1$82 2.2 52 15.8~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... 16 $3 22 53~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~....1..8 17 1.3 ...... 22~~~~~~~~~~~~~~~~~~ 5.... 1$ 53 22~~~~~~~~~~U .5. ....
191.3 2.2 52 . . .. I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... 8 1 $21 531.
4PO% 2.....14. 4 Annex E Page I
THE FORMERYUGOSLAV REPUBLICOF MACEDONIAIRRIGATION REHABILITATION AND RESTRUCTURINGPROJECT
DISBURSEMENTPROFILE
Disbursement Profile
IBRD Fiscal Years Cumulative Cumulative By Quarter and Quarters (US$Million) (US million) I (°) (%) IDA IBRD 1998 2 0 I 3 0.16 0.16 1.3 I 4 0.09 0.25 2.0 11 1999 1 0.13 0.38 3.0 3 2 0.37 0.75 6.0 I 3 0.38 1.13 9.0 6 4 0.42 1.55 12.4 I 2000 1 0.45 2.00 16.0 10 2 0.50 2.50 20.0 I 3 0.83 3.13 25.0 18 4 0.62 3.75 30.0 I 2001 1 0.63 4.38 35.0 26 2 0.62 5.00 40.0 I 3 0.62 0.62 45.0 38 4 0.63 1.25 50.0 I 2002 1 0.94 2.19 57.5 50 2 0.94 3.13 65.0 3 0.93 4.06 72.5 4 0.94 5.00 80.0 11 2003 1 0.50 5.50 84.0 74 2 0.50 6.00 88.0 I 3 0.38 6.38 91.0 82 4 0.37 6.75 94.0 11 2004 1 0.25 7.00 96.0 90 2 0.15 7.15 97.2 I 3 0.13 7.38 99.0 98 4 0.12 7.50 100.0 100 2005 1 2 3 m mac:umg\sar\sannaiUmneXe AnnexF Page I
The former YUGOSLAV REPUBLIC OF OF MACEDONIA
IRRIGATION REHABILITATION AND RESTRUCTURING PROJECT
Proposed Project Supervision Plan
Approximate Date Activity Expected Skill Requirement Staff of Input J Week October 1997 Supervision Mission Task Manager (Economist) 15 Project Launch Irrigation Engineer Workshop Irrigation Specialist Sociologist Procurement Specialist January 1998 Supervision Mission Task Manager (Economist) 8 Irrigation Specialist Irrigation engineer May 1998 Supervision Mission Task Manager (Economist) 10 Irrigation Engineer Irrigation Specialist Irrigation Agronomist l September 1998 Supervision Mission Task Manager (Economist) 15 Irrigation Agronomist Irrigation Engineer Irrigation Specialist Sociologist January 1999 Supervision Mission Task Manager (Economist) 8 i ~~~~~~~~~~~~IrrigationEngineer Irrigation Specialist 8 May 1999 Supervision Mission Task Manager (Economist) 8 Irrigation Engineer Irrigation Specialist l August 1999 Supervision Mission Task Manager (Economist) 8 Irrigation Engineer Irrigation Specialistl December 1999 Supervision Mission Task Manager (Economist) 20l (Mid-Term Review) Irrigation Agronomist Irrigation Engineer Irrigation Specialist Sociologist Annex F Page 2
ApproximateDate Activity ExpectedSkill Requirement Staff of Input Week May 2000 Supervision Mission Task Manager (Economist) 8 Irrigation Engineer l ______Irrigation Specialist November 2000 Supervision Mission Task Manager (Economist) 8 Irrigation Engineer l ______Irrigation Specialist June 2000 Supervision Mission Task Manager (Economist) 10 Irrigation Engineer Irrigation Specialist Agronomist November 2001 Supervision Mission Task Manager (Economist) 8 Irrigation Engineer Irrigation Specialist June 2001 Supervision Mission Task Manager (Economist) 10 Irrigation Engineer Irrigation Specialist Agronomist November 2002 Supervision Mission Task Manager (Economist) 8 Irrigation Engineer Irrigation Specialist June 2002 Supervision Mission Task Manager (Economist) 10 Irrigation Engineer Irrigation Specialist Agronomist
m:\mac\irrig\sar\sarfinal\appndxf MAP SECTION
1BRD28828'
FORMER YUGOSLAV REPUBLICOF FEDERAL REPUBIC ,OF YUGOSLAVIA /_ (SERBIA -/`MON4TENFGR6O), - yJO' . >, 40~DmtooM C D N I
I , N ~~~~~~~~~~~~~~~~~~~~~~~GARIAIRRIGATION SC E S
'P Sin oepgpod ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CLJLTIVATEDAREAS: C-,' N~~~~~~'oo Po -k&> 42-
u ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~CURRENTLYIRRIGATED
r>stiJo2ULGARIA\\ Ott I I ~~~~~~~~~SUITABLRFOEIRRIGATION
D . i E-. ~~~~~~~~~~~~~~~~~~~~~Dooc~'ANOTSUTBEFRIIGIO a.~ ~~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~. MAJOR ROADS SECONDARYROADS ,2,~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2 KAW Tt-o e' ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~RIVERS Kuk~~~~~~~~~~~~~~r' Tetoop ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~SELECTED CITIES 9 '~~~~~~~~~~~~~ ( ~~~~~~~~~~~~~~~~ANDTOWNS'>
NATIONALCAPITAL
C -'-.. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~INIERNATIONAL r R~~~~~~~OLINDARIES
a oir Kopiio 0 10 20 30 40 SDKILOMETERS
4 P oop. 0 ( I' ("3/P / P N 0 l10~~~~~~~~~~~~~~~~~~Kadrc 2D0 0 MILRS
D~~0J~~oojj( ~IT POO.p osprodu...d by he Mop Co-gp do,tolTh. World Book
D. P " OB \. o lh,s -op rio-ss-ply. o- theporsofThe Wo-ld Bo-kOro-p,. oy
K ~~~~~CZECHREP.> N -, >-~~~~'-s~UKRAINE
A N A L B BIA SPPU§ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~HUNGARYN * tdibroohoN NA?'"Pu Br~~~~~~~too / /Yio...itsdCOTI6 ROMANIA K 44- Proo~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~c00 EZGV NAPFED REP.
Eloosor P Pdemo 0 \ AIBo6rrdrio~~~~~~~~~~~~~~~~~~~~~~/ j ~~~~~ NNN/)?MN BULGARIA~~SERIULGRI
-~~~~~ -\ / ~~~~~~~~~~~~~~~~TALY<7 ALBReA--
Ill,~~~~~~GEC ~ TURKEY
23 /0N/( T OCTORER 1997
IBRD28829
FORMERYUGOSLAV REPUBLIC OF MACEDONIA TIKVESIRRIGATION SCHEME SYSTEMNETWORK AND WMO AREAS
WMO TIKVESKOPOLE WMO NEGOTINSKOPOLE
WMO MAKARIJA
CANALS
WMO ' - ;" . n'i .X Xjo . CANALSii .1 (PLANNED)^ 1 * ./jJ i>.ri. ii. .rsi[.A
,MA , ,KARI5JA rr~: ' I " ' - : ~ RVERS
55- ~~~~~~~~~~~~~~~~~~~~BUILTULPAREAS
s;i,, / \, ,-Uj ; r ,2j5'2 52 >; i t> p ' i -' 'j;';')A. E E[i &; R<0---,,-is J Ei [L] (j INTERNATIONAL BOUONDARIES (INSET)
9 :: i @ g f; 4 z X ; - ! t P~~ 0 1 2 3 4 5 |; V . IMO\,.
NEGO Thi,sop psprd-by th. Mep D-gs Usi ahTh. W-nd BonA * iegoino TTh bond-is, colos d i-is ond -yoh -- h oo h soopdo st iply, on ihopo ohtTh. Wo-d Bar Grp, -y eoe5r -hsuhb-udo-in CZECHREP.~ KAN r -7 AUSTRIA \MOLDOVA ~AHUNGARY ' 1 T r.j52SI 0 4 cRi55OATIr' -< _ / ROMANIA K - Kovodarci BOSNI A,N,D -~~HEEZEGOVINA ~~\~~~~ FED.REPF~' \ < .~~~~~~~~~~~': •Z9 \ 0 - ' ': \ ~~~~~~~~~VatasoAk j.tr, ~~~~~~~~~~~~~~~~~~~~~~~~~~~~SERBIA//9r MAOVNATI BULGARIA ITALY= ALBANIA"' .-b.'7CI'0, H- _,1 ; v.CiGREECEC AE,oor TURKEY * ivs_S/1I 500. >\~_ OCTOBER1 997 IBRD28830 CZECHREP.UKIN FORMERYUGOSLAV REPUBLIC OF - Ny'-' pyREP j MACEDONIAy ' AUSTRIAF ) \MOLDOVA BREGALNICAIRRIGATION SCHEME HUNGARY/ SYSTEM NETWORK AND WMO AREAS ' C ROMANIA CANALS \ - -R EPSNIA WMOOSOJNICA VINICA [ IRRIGATIONWITH OPEN CANALS RIVERS '>YUGG5LAVIA I Block IRRIGATIONWITH PUMPING MAINROADS W K WMO BREGALNICAKOCANI 'L t-J a (~SERBIA/MGNT)/BULGARIA K e I\K71 ~~ ~ -'---'--- RAILROADS ~~~~~~~~~~~~~~ ~~ ~ > /> B Se WMO VODOSTOPANSTVOSTIPEl IRRIGATIONWITH PIPENETWORK 0 ArEoofo ) -- WMO OVCEPOLE SV. NIKOLE BUILT-UPB' ) tz i. GREECE@> Ae5,,aeaaA g.,GE TURKEY I0 a10 20J'\ KILOMETERS Ke tAppro- tcSo al _ Ezei4Be1 QR ; ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~P'LE Ifmsiia- -1-1~~~~~~~~~~~~~~~~~~~~~.- TI- pcop -ncod bycloM, D-gc Uo,c Th. Wold Bo. cdg,o-p c.t ipOly, of oyp..fo, o oM) -kdo-pc,Coo -y OCTOBER1997 IBRD 28831 CZECH REP UKRAINE FORMERYUGOSLAV REPUBLIC OF J>- > -v sLNtREPj MACEDONIA AUSTRIA \MOLDOVA POLOGIRRIGATION SCHEME y HUNGARY / WMO AREAS :0 - ROMANIA SYSTEMNETWORK AND COROATIA- HHEREGOVA FED REP <1 > WMO IZVORI - GOSTIVAR WITH OPEN. CANALS RRIGATION CS I I goOJO5LAVASoc ~~~~~~~~~~~~~~~~RIVERS BULGARIA ' - J L t P RRIGATION WITH PUMPING M- EBAO/MONI)/ WMO POLOG TETOVO - - RRIGATIONWITH MIXED OPEN CANAL AND PIPE MAIN ROADS _ [o A Y_) BUILS-UP AREAS /1 INTERNATIONALBOUNDARIES (INSETI ITALY AL*TIIA I GREECE TURKEY KIEQMETERS URE KAmericine Golemca. - Te-o Dzepciste Negqotno b, Rok ogo-,ne Pirokc Vra - Vrujtok -Y Tere ,, E *~~~~~~~~~~~~~~~~Gae 9 "' U 't~~~~~~~~~~~~~~~,Ync nOWon VoWar C /~~~~~~~~~~~~~~~~~~w forOoslh. Con §- ScTtooCw ~~WKQ&ZYQR{ M36k Aono onopn&nd LyTh Op Ie ,1001lY Lof4 on /y / 9 OCTORER 1997 IMAGING ReportNo.: 17013 MIK Type: SAR