Document of The WorldBank

FOR OFFICIAL USE ONLY

Public Disclosure Authorized Report No: 5 10 16-PK

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED LOAN Public Disclosure Authorized IN THE AMOUNT OF US$145.6 MILLION

TO THE

ISLAMIC REPUBLIC OF PAKISTAN

FOR A

PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-11) Public Disclosure Authorized

June 4,20 10

Sustainable Development Department Agriculture and Rural Development Sector Unit South Asia Region

Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Exchange Rate Effective September 2009

Currency Unit = Pakistan Rupee (Rs) Rs. 80 = US$1

Fiscal Year: July 1 - June 30

Weight and Measures Metric System 1 meter (m) = 3.280 feet 1 hectare (ha) - 2.470 acres 1 Kilometer (km) = 0.620 miles lcubic meter (m) = 35.3 10 cubic feet 1 million acre feet (h4AF) = 1.234 billion cubic meters 1 cubic foothecond (cfs) = 0.0283 cubic meterdsec (m3/sec)

ABBREVIATIONS AND ACRONYMS

Water Sector Capacity Building and Advisory

Abiana Irrigation water charges Mogha Ungated Outlet from distributary or Mmor Canal Or Tertiary irrigation command areas Rabi Winter crop season (November-March) Dehs Kharif Summer crop season (April-October) Warabandi Rotational system for water distribution

Vice President: Isabel Guerrero Country Director: Yusupha Crookes Sector DirectorManager: John Henry SteidSimeon K. Ehui Task Team Leader: Masood Ahmad .. 11 FOR OFFICIAL USE ONLY

PAKISTAN

PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-II)

CONTENTS Page STRATEGIC CONTEXT AND RATIONALE ...... 1 A . Country and sector issues...... 1 B . Sector background and issues ...... 2 C . Rationale for Bank involvement ...... 6 D . Higher level objectives to which the project contributes ...... 6 I1. PROJECT DESCRIPTION...... 7 A . Lending instrument ...... 7 B . Project development objective and key indicators...... 7 C . Project components ...... 7 D . Lessons learned and reflected in the project design ...... 11 E. Alternatives considered and reasons for rejection ...... 11 111. IMPLEMENTATION...... 12 A . Partnership arrangements (if applicable) ...... 12 B . Institutional and implementation arrangements (details in Annex 6) ...... 12 C . Monitoring and evaluation of outcomes/results...... 13 D . Sustainability...... 14 E . Critical risks and possible controversial aspects ...... 14 F . Loadcredit conditions.. and covenants ...... 16 IV . APPRAISAL SUMMARY ...... 18 A . Economic and financial analyses ...... 18 B . Technical analysis ...... 18 C . Fiduciary ...... 19 D . Social (See Annex 10 for details)...... 20 E . Environment ...... 22 F . Safeguard policies ...... 23 G . Policy Exceptions and Readiness...... 24 ... 111 This document has a restricted distribution and may be used by recipients only in the performance of their official duties . Its contents may not be otherwise disclosed without World Bank authorization. Annex 1: Country and Sector or Program Background ...... 25 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies ...... 35 Annex 3: Results Framework and Monitoring ...... 37 Annex 4: Detailed Project Description ...... 41 Annex 5: Project Costs ...... 57 Annex 6: Implementation Arrangements ...... 60 Annex 7: Financial Management and Disbursement Arrangements ...... 63 Annex 8: Procurement Arrangements ...... 67 Annex 9: Economic and Financial Analysis ...... 75 Annex 10: Safeguard Policy Issues ...... 82 Annex 11: Project Preparation and Supervision ...... 123 Annex 12: Documents in the Project File ...... 124 Annex 13: Statement of Loans and Credits ...... 126 Annex 14: Country at a Glance ...... 128

MAPS:

IBRD 37316 IBRD 37352

iv PAKISTAN PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-IT) PROJECT APPRAISAL DOCUMENT South Asia Regional, SASDA

Date: June 4,20 10 Team Leader: Masood Ahmad Country Director: Yusupha Crookes Sectors: Irrigation and Drainage (80%); Sector Managermirector: Simeon K. Ehui Flood Protection (20%) John Henry Stein Themes: Rural Services and Infrastructure (60%); Project ID: PO96745 Water Resources Management (25%P); Lending instrument: Specific Investment Loan Managing for Development Results( 15%) Environmental screening category: Full; Category A ~~ Project Financing Data: [XI Loan [I Credit [ 1 Grant [ 1 Guarantee [ ] Other: For Loans/Credits/Others: Total Bank financing (US$m.): 145.6 Million

Source Local Foreign Total Borrower 9.4 0.0 9.4 IBRD 79.5 66.1 145.6 Total 88.9 66.1 155.0

FY FY11 FY 12 FY13 FY14 FY15 FY16

Annual 5.0 15.0 25.0 40.0 45.0 15.6 Cumulative 5.0 20.0 45.0 85.0 130.0 145.6

Expected effectiveness date: September 30,2010 Expected closing date: June 30,2016 Does the project depart from the Country Assistance Strategy (CAS) in content or other significant respects? Ref. PAD LA and I. C Does the project require any exceptions from Bank policies? Ref. PAD G Have these been approved by Bank management? Is approval for any policy exception sought from the Board? Does the project include any critical risks rated “substantial” or “high”? Ref. PAD E. Project’s overall risk rating is “Substantial”. The rating is based on mere size of the Project, on an operational river system, and possible interruption of water supplies due to construction activities or due to unforeseen circumstances. Though the V I project is planned very well, including implementation plans, construction plans and operational plans to avoid any interruption of water supplies to the irrigated areas. Also contingency plans would be in place to address any interruption in water supplies due to unforeseen circumstances.

Also procurement risk rated for procurement is rated “substantial” due to size and country environment and plans are developed to minimize these risks. Does the project meet the Regional criteria for [YIYes []No readiness for implementation?

I Component B Improvement and modernization of the irrigation and water management system (US$15 Million). This component consists of improvements in irrigation and water management systems including capacity building for better water allocation and accounting, modernization of equipment and services used in water management. It will also support preparation of future irrigation and water management improvement projects in the province.

Component C: Monitoring and Evaluation of the Project Impact and Social and Environmental Management Plans (US$3 Million). The monitoring and evaluation to provide continuous feedback about the progress and status of project implementation; performance, impacts and to supervise implementation of the overall sociaVresettlement and environmental management plans. An independent consultant will carry out the M&E activities and supervision of environmental and social development action plans.

Component D: Project Management Coordination Technical Assistance and Training (US$7.0 Million). This component will support the Government in implementing the project by coordinating all project related activities and provide technical assistance and training. Which safeguard policies are triggered, if any? Re$ PAD XX,Technical Annex 10. 0 Environmental Assessment OPBP 4.01 Involuntary Resettlement (OPh3P4.12) 0 Safety of Dams (OP/BP 4.37) 0 Projects on International Waterways (OPh3P 7.5) Significant, non-standard conditions, if any, for: Board presentation: None Loadcredit effectiveness: None Covenants applicable to project implementation: Re$ PAD III. F vi STRATEGIC CONTEXT AND RATIONALE

A. Country and sector issues

1. Country Issues and Country Assistance Strategy. After a decade of political instability, macroeconomic crisis, and limited economic and social progress in the 1990s, Pakistan emerged as one of the fastest-growing economies in Asia, with rising per capita income and improved social indicators. Following this period of growth and relative stability, Pakistan is today facing complex challenges, including severe terrorist attacks and concerted military action against militants. The country has also struggled through political upheaval and a near economic collapse. The development context has changed for the Government of Pakistan and its development partners. At present macro- economic performance has deteriorated significantly; inflation has accelerated to double digit levels and the fiscal deficit and current account deficits have widened substantially. The key challenge for Pakistan is to develop resilience to shocks to sustain economic growth and poverty reduction instead of the cycles of growth and stagnation which have prevailed in the past. For this, Pakistan will have to improve its overall macro-economic management, fiscal revenue stream, budgetary management, governance and growth in the commercial and infrastructure sectors.

2. There has been growing demand for better infrastructure in Pakistan. The infrastructure platform needs significant investment in order to support growth and service delivery goals. Infrastructure services including electricity, paved roads, municipal services, and telecommunications currently reach a relatively low proportion of the population. At the same time, improvements in basic infrastructure are critical to improving human development outcomes. Approximately 40 percent of the population lacks access to power and about 75 percent of all rural health, education and market facilities are accessible only by earth tracks. Similarly, water and sanitation services suffer from poor quality and limited availability. The water qualities in rivers, streams, and canals have also been gradually deteriorating leading to public health concerns.

3. The aim of the Pakistan Country Assistance Strategy (CAS) for FYlO-14 is sustained growth recovery and building resilience to shocks. The CAS will be implemented in a period of uncertainty with a focus both on immediate needs dictated, in part, by the ongoing conflict and the return to macroeconomic stability, but also on medium term needs that support growth, service delivery, improved institutional governance, human development and infrastructure investment through existing platforms. The Strategic Objectives are well aligned with the Pakistan Poverty Reduction Strategy Paper I1 and focus on three core areas:

Improved governance and performance of the public sector; 0 Improved human development and reduced vulnerability; and Improved infrastructure to support private sector investment and growth.

4. These Strategic Objectives respond to both the needs of Pakistan and the comparative advantage of the World Bank Group. They build upon existing platforms, particularly in health, education, social protection, and infrastructure. To achieve the third strategic objective, significant investment and continued policy reforms, particularly to address infrastructure deficits, improve competitiveness, and address cross cutting issues such as environmental management and urban planning will be needed. Among other things this requires investments in improved water management for agriculture productivity and growth. During the CAS period, agricultural growth will provide a basic foundation for robust growth. A critical prerequisite will be an efficient and well run irrigation system, particularly in the Sindh and Punjab provinces. While progress has been made, the irrigation and drainage system suffers from deteriorating infrastructure and weak governance. To

1 reduce volatility of growth, Bank support will include rehabilitation of major assets such as barrages and continued capacity development at the regional and federal level for managing water resources.

B. Sector background and issues

5. Agriculture is critical. Although the share of agriculture in the economy is decreasing, it is still the backbone of Pakistan’s economy, employing over 50 percent of the labor force (directly or indirectly) and earning 60 percent of the export revenues. The sector contributes about 25 percent of GDP. Most of the poor live in rural areas and tend to be employed mostly as agriculture wage workers. Migration of people from rural areas is a contributing factor for unplanned urban growth and urban poverty.

WaterDrrigation and drainage sector

6. Pakistan’s agriculture sector is almost wholly dependent on irrigation - irrigated land supplies more than 90 percent of agriculture production. Agriculture in most areas is not possible without irrigation because the climate of Pakistan is arid to semi-arid with low and variable rainfall. Annual rainfall over much of the area is not more than 150 mm per annum with high evaporation rates, ranging from 1,250 mm to 2,800 mm per annum. However, there are abundant surface water resources in the Indus Basin, which cover 566,000 h2(70 percent of the country). This basin is the major source of water for Pakistan.

7. Indus Basin Water System. Pakistan relies on the largest contiguous water system in the world, namely the Indus Basin Water System (IBWS) for basic food security and supply of water for all sectors of the economy. The IBWS consists of the Indus River and its tributaries, three major multi-purpose storage reservoirs, 19 barrages, 12 inter-river link canals, 43 major irrigation canal commands (covering over 14 million hectares), and over 120,000 watercourses, delivering water to farms and other productive uses. Annual river flows are about 180 billion m3 of which about 120 billion m3 of water is diverted from the river system to canals annually. The total length of the canals is about 60,000 km, with communal watercourses, farm channels and field ditches running another 1.8 million km. These canals also in fact serve as the country’s main waterways. Pakistan would have remained largely a desert without the development of this system of canals, dams and hydraulic structures. This system provides the sole source of water supply supporting life and livelihoods. In addition to providing water for irrigated agriculture, these resources also support the development of major cities, industry, and growth centers. The IBWS is the backbone of the country’s economy.

8. Generally, the hierarchical canal system runs from main canals to branch canals to distributaries/minors. Open, free-flowing outlets (moghas) regulate water flow from distributary/minors to the watercourses that supply water to chucks or dehs (tertiary irrigation command area). These watercourse commands are a complex miniature irrigation system with an average length of about 20 km. Water is distributed to the field by a weekly time rotation (warabandi) based on the size of the land holding. The canal system is also a major source of recharge for the groundwater aquifers. In fresh groundwater areas, groundwater is pumped by tubewells to supplement canal supplies. Groundwater resources are substantial, with more than 600,000 tubewells in the country contributing significantly to the water supplies in areas underlain by fresh groundwater.

9. Irrigation and Drainage Sector Issues. Despite the fundamental role it has in the economy, Irrigation and Drainage (I&D) in Pakistan faces major issues that are reflective of underlying institutional weaknesses. 1 The major institutional issue is a near exclusive control of the irrigation and drainage system by public sector entities, characterized by the usual inefficiencies of centralized bureaucracies, lack of corporate skills and poor client (farmer) focus and accountability. Institutional weaknesses

’Pakistan: Irrigation and Drainage Issues and Options, March 1994, Report No. 1 1884-PAK, Pakistan Water Country Assistance Strategy - Pakistan’s Water Economy Running Dry, 2005. 2 manifest in the form of: (i) low surface water delivery efJiciency (only about 35-40 percent from the canal head to crop root zone); (ii) water distribution inequities; (iii) wasteful on-farm water use; (iv) waterlogging and salinity; (v) poor operation and maintenance (O&W and low cost recovery; and (vi) constrained investment climate. For more details, please see Annex 1.

10. Irrigation and Drainage Sector Reform Program. After the irrigation and drainage strategy of 1994 there has been a major change in the direction in the sector. The Government adopted a completely new approach to address the irrigation system issues and started an institutional reform program to revamp I&D institutions with the aim of establishing an efficient, self-sustaining I&D system. The Government’s efforts were supported by Bank operations such as the National Drainage Program, the Punjab Groundwater Development Project, the NWFP On-Farm Water Management, and ongoing Sindh On-Farm Water Management Projects, the Sindh Water Sector Improvement Project (WSIP) and the two Development Policy Loans in Irrigation and Drainage Sector in Punjab. The other donors, such as ADB, are also support the reform programs. ADB is supporting reform program through Punjab Irrigated Agriculture Investment Program, a US$900 million program out of which a US$217 million loan has been signed for Lower Bari Doab Canal Improvement Project also covering rehabilitation of Balloki Barrage.

11. Under these reforms: (a) irrigation service is being decentralized by developing commercially oriented area water boards (AWBs) on a canal command level, while management at the distributary level is transferred to Farmers Organizations (FOs) through Irrigation Management Transfer Agreements. Autonomous provincial irrigation and drainage authorities have also been established to deliver water to AWBs and to handle off-farm drainage and regulations; (b) greater transparency in water measurements, accounting is introduced along with and enhanced monitoring capacity using technologies like internet; and (c) preparation of asset management plans and improved methodology for determining O&M requirements 12. Progress on the reform program is slow but steady. The reform program is most advanced in Sindh Province. Sindh has passed an ordinance, namely the Sindh Water Management Ordinance of 2002, providing the underlying legal basis for the new institutions as well as defining their role in the sector. Sindh has also established three AWBs in Nara Canal, Ghotki Canal and the Left Bank covering Akram Wah and Fuleli canals covering about 1.8 million hectares of land or 30% of the irrigated area in Sindh. The FOs have been established on almost all distributary canals in these AWBs. Punjab has also implemented very impressive I&D reform programs that are being scaled up under the ongoing development policy loans (DPLs). In eight canal commands covering about 6.5 million hectares, Punjab has started establishing FOs. Reform programs are slow but underway in Balochistan and North West Frontier Province (NWFP); however they lag behind considerably. 13. So far, about 355 FOs have been formed in Sindh of which about 340 FOs are in the three AWBs. Management transfer agreements have been signed with 284 FOs. Punjab has started a reform program in 8 canal commands. About 297 FOs have been established and management has been transferred. As expected, the outcomes of these reforms are mixed with some FOs performing well, some weak and some politicized. There is a need for continued capacity building of these FOs until they can begin to function effectively. Once in place and properly working, user management can then be enhanced to cover upper tiers of the system such as branch and main canals making overall AWB operation more effective. This may take more than a decade. 14. The water monitoring system is established in Punjab, however, it needs further development along with real time measurement and capacity for accounting and auditing. The asset management plans have been prepared along with estimation of O&M requirements for various teirs of the system. Barrages are Strategic Assets. 15. The barrages are used to raise the water level in the river so that water can be diverted to the main canals by gravity. They also are used to divert water to river link canals as the whole system is 3 interlinked (see schematic diagram of the IBWS in IBRD 37352). Therefore, operation of a barrage has a far reaching impact in the system often covering millions of acres locally as well as several hundreds of miles away. The barrages are classic “public goods”, and as strategic assets would remain under public management even after the transformation of the irrigation system under the proposed reform program. They are used for river control and flood management and are a source of water supply for all sectors of the economy. The barrages also provide links for the road networks working as bridges over rivers and are used for utility crossings such as gas pipelines. For example, the Jinnah barrage provides a bridge over the Indus River to link the roads between the NWFP and Punjab provinces. Deterioration of barrages cannot be afforded as even partial failure would be disastrous for all productive sectors, the environment and social stability in large areas.

16. Even though the irrigation and drainage sector of the province is generally short on O&M funds, barrages are generally provided adequate funds for O&M as they are large strategic assets. A lack of budget typically impacts the smaller channels at the tail end of the system the most. Many of the barrages built 50 to 100 years ago are in need of rehabilitation today. Most of the problems identified stem from design and construction defects, as building barrages on an alluvial river was a new experience at that time of construction, as well as simply aging and changes in hydrological conditions. Some of them require urgent remedial measures to avoid full or partial failure that could have disastrous consequences due to interruption in water supplies for millions of acres of irrigated land.

17. Program for Rehabilitation and Modernization of Barrages. Failure of a regulator structure in 1998 on the Balloki Sulemanki (B-S) Link Canal was alarming for the country. The B-S Link canal transfers water from the western rivers (Jehlum and Chenab) to the eastern most Sutlej River (whose barrages were put in place in India after the 1960 Indus Treaty). Thus failure of the regulating structure on the B-S link affected water supplies to over 2 million acres of land.

18. Priorities for Improvement of Barrages in Punjab. After the failure of BS-Link tail structure, the Government of Punjab (GoPunjab) engaged consultants in June 1998 to assess the condition of all vital hydraulic structures in the system to evaluate their safety. The consultants and the Government’s evaluation team recommended rehabilitation and modernization of six barragesheadworks in the order of priority: (i) Taunsa on Indus River; (ii) Jinnah on Indus River; (iii) Islam on Sutlej River; (iv) Balloki on Ravi River; (v) Khanki on Chenab River; (vi) Sulemanki on Sutlej River. Accordingly, the GoPunjab embarked upon a program of rehabilitation and modernization of these six barragesheadworks during the period of 2003-2005, engaging groups of consultants to carry out feasibility studies for the rehabilitation of Taunsa, Jinnah, Islam and Balloki barrages. Since then two other barrages, Sidhnai Barrage on the Ravi River and Trimmu Barrage on the Chenab River have been added to the list to be rehabilitated and modernized. The feasibility studies and detailed designs for improvement of Sulemanki, Sidhnai, and Trimmu Barrages are underway through ADB funding.

19. GoPunjab has already completed the rehabilitation and modernization of Taunsa Barrage in 2009 under a World Bank loan. Balloki and Sulemanki barrages are being rehabilitated under the ADB Program and Khanki Barrage under federal government assistance. Jinnah Barrage on the Indus River is now the highest priority, improvement of which would be undertaken under this Project. The feasibility studies for the Jinnah Barrage were carried out in 2005 followed by the detailed design and bidding documents preparation under the ongoing Taunsa Barrage Project Loan.

20. Priorities for Improvement of Barrages in Sindh. There are three other barrages located on the Indus River in Sindh Province, downstream of the Jinnah Barrage. Improvements were done to the Kotri Barrage, the last on the Indus River, in 2000. The Gudu Barrage, the first Barrage on Indus in Sindh Province, has major safety issues. Preparation of a project for designing the remedial measures is being financed from the ongoing Sindh Water Sector Improvement Project (WSIP). The request for proposal for consultancy services for that purpose is being launched under WSIP. The Sukker Barrage the second to last barrage on the Indus River is one of the oldest and serves some seven canals covering a command 4 area of about 8 million ha. It has several safety issues and some repairs were carried out recently on an emergency basis. It has been agreed with the Sindh Government to start detailed investigation, surveys and analysis and design mitigation measures to make the Sukkher Barrage safe in the long run. These studies would be financed from the ongoing WSIP a US$175 million investment to support reform program and improvements of irrigation and drainage systems in four canal commands, Ghotki, Nara, Akrwam Wah and Phuleli canals.

21. Punjab Barrages Phase I1 Project (PBIP-II). Under the Project, improvement of Jinnah Barrage * would be undertaken (Component A of the Project) which is the highest priority at this stage. Also the Project would support further work on greater transparency in water allocation, accounting, auditing and monitoring (under component B of the Project). Agreements would be reached with the Government of Punjab to continue transfer of irrigation management to FOs, progressively enhancing their role in irrigation management, providing support and building their capacity to become effective organizations. The progress in this would be monitored under the project and issues in this context would be addressed through normal sectoral policy dialogue.

22. Improving Waterhigation Management in Punjab. Punjab Province covers the major part of the IBWS (about 60 percent of command area of the system). Water allocation and management in various parts of the system is still carried out using hand calculations, including estimation of demands and the pattern of releases from the reservoirs. Moreover, there is no well established and integrated system of water accounting in various parts of the system i.e. at barrages, rivers, link canals, maidbranch canals, and distributaries etc. Instrumentation used for measuring water, sediments, and cross sections of the river and canals are outdated and could use modernizing. In many cases, hand held gauges remain in use. Punjab needs to modernize its water allocation and management system and water accounting system with modern simulation and optimization models and decision support systems. The accounting system being initiated by the Program Monitoring and Implementation Unit (PMIU) needs further updating and development. The second part of the project (Component B) will help modernize water management in Punjab’s irrigation system by providing new techniques, tools, equipment and training.

23. Climate Change Considerations. Impacts of global climate change, including changes in glacial melt and the characteristics of floods and droughts, on the IBWS needs to be carefully considered for such a Project. Climate change studies and its impact on the upper catchment of the Indus River are included in the ongoing Water Sector Capacity Building Project (WCAP). With the possibility of higher future flows due to climate change and increased retrogression, Project interventions are even more vital to ensure the safety of the barrage. Hydrological analysis has been carried out as part of the preparation of the project. Based on this analysis, the design flood for the Jinnah Barrage (Flood with a 100 year return period) still remains at 950,000 cubic feet per second (cusecs). The highest flood recorded is about 861,965 cusecs on August 2, 1976, prior to when Tarbela was fully functional. That is, the Barrage can handle about 1.1 million cusecs which is equal to a flood with a 600 year return period. Moreover, with the construction of a 96 MW plant on the right side, the Barrage will have capacity to pass an additional 100,000 cusecs. Thus, higher future flows will not necessarily mean that the barrage will fail or not perform. Rather, in practice such unlikely flows will be bypassed from the barrage resulting in flooding of the area along the banks of the barrage. Generally there is a designed breaching section in the afflux bunds of the barrages which is used in the case of such extreme events. For extreme events (such as the 1 in 600 year event) this is the most practical and optimal approach. Finally, there is a dam upstream from the Barrage (Tarbela dam) which could be used for re-regulating the flows. In addition, the natural gorge of Attock above the Barrage and below Tarbela Dam is a natural control for the regulation of extremely high flows. Thus the safety of the barrages is not likely to be jeopardized due to possible higher floods under future climate change scenarios.

2The Barrage is named after the foundedleader of Pakistan, Muhammad Ali Jinnah. 5 C. Rationale for Bank involvement

24. The Bank has a long history of partnership and collaboration with Pakistan. In particular, the Bank is seen as a trusted partner in the water sector and a coordinator for international financial institutions and other development partners. As a key partner and principal donor, it has provided support to several main interventions in the development of the IBWS, including: (i) facilitating the Indus Basin Water Treaty negotiations between Pakistan and India in the 1950s; (ii) establishment of the Indus Basin Development Fund that supported the construction of Mangla and Tarbela Dams and several inter-river link canals and barrages that enabled the implementation of the Indus Treaty (which is still observed despite several wars between the two nations); (iii) formulating the Salinity Control and Reclamation Program (SCARP-1968); (iv) formulating the Revised Action Plan for Irrigated Agriculture in 1979; (v) assisting in the Water Sector Investment Planning Study (WSIPS) in 1991 that led to the Inter Provincial Water Apportionment Accord of 1991 and the establishment of the Indus River System Authority (IRSA); (vi) preparing the Sector Environmental Assessment in 1993 to provide perspective for the development of the Ninth Five Year Plan; (vii) developing the Irrigation and Drainage Strategy of 1994 (Pakistan: Irrigation and Drainage - Issues and Options 11884-PAK) that led to a major shift in the direction of the I&D sector of Pakistan and implementation of the current institutional reform agenda; and (viii) the formulation of the Pakistan Water CAS (Pakistan’s Water Economy Running Dry, 2005 34081- PK) that highlighted the recent issues that the water sector is facing and outlined an approach to deal with them. The two largest provinces (Punjab and Sindh), which manage more than 85% of the IBWS, have embarked on far reaching irrigation reforms and have made significant progress in these regards. Altogether, the Bank has supported more than 48 operations in irrigation, drainage and water resources development and the power sector so far. With the assistance of the Bank, the Government of Punjab has already completed the rehabilitation and modernization of the Taunsa Barrage located in the Indus River below the Jinnah Barrage. 25. The Government of Punjab is seeking support from the World Bank to provide knowledge, expertise, experience and reliability in the sector, in addition to financing. More specifically, the Bank is expected to help ensure that: (i) a systematic approach is adopted in the design of rehabilitation of the barrages; (iii) thorough planning is carried out to minimize the interruptions to operation during construction along with a suitable communication strategy with major stakeholders; (iii) any environmental and social concerns are properly addressed; (iv) the project works and facilities are procured and constructed with good quality, within the budget, and on schedule; (iv) the operation and maintenance will be upgraded and strengthened as a model for safe and sustainable use of other barrages; and (v) institutional capacity is strengthened in carrying out such operations and overall management of the water resources and the river system in the province through technical assistance and various components of the project.

D. Higher level objectives to which the project contributes

26. The Project will help support the first strategic objective of the CAS and PRSP I1 of Restoring Stability and Maintaining Growth for Sustainable Development, i.e. sustained growth recovery with enhanced resilience to shocks and volatility. Pakistan being largely an arid country is critically dependent on the Indus River System for water supplies for agriculture, urban population and industry. A critical requisite is effective water and irrigation systems that can meet growing water demands. The CAS also emphasizes the need to strengthen water sector governance. As noted above, full or partial failure of a major barrage would result in major economic disruptions and potentially environmental disaster and social chaos. The project will help to avoid such shocks to the economy/society and help develop resilience for sustained growth and poverty reduction.

6 11. PROJECT DESCRIPTION

A. Lending instrument

27. The lending instrument is a Specific Investment Loan (SIL). B. Project development objective and key indicators

28. The overarching project objectives are to assist the Borrower in: (i) rehabilitating and modernizing Jinnah Barrage and carrying out affiliated works to enable reliable and uninterrupted supply of water for over 2.1 million acres of farmland benefitting about 600,000 farm families for irrigation and domestic water users; and (ii) build IPD’s capacity in improved water resources and irrigation system management.

29. The progress towards achieving the development objective will be measured through the following key performance indicators:

0 Reliable supply of water from the barrage to the water users without any reduction in flows 0 Safe passage of floods without extensive damage to the barrage infrastructure. 0 Proper functioning of energy dissipation system to stop retrogression to move upward towards the barrage. 0 Efficient operation of the gates. Improved capacity to manage waterhigation system in the province using modern tools.

C. Project components

30. The Project is designed to support the development objectives. It supports the rehabilitatiordmodernization of highest priority barrage in eth Indus System and reinforces the ongoing reform program in the waterhigation and drainage sector through support and monitoring of their implementation progress. The Project has following the following components (See Annex 4 for more details):

Component A: Rehabilitation and Modernization of Jinnah Barrage (US$111.0 Million). This component will support rehabilitation and modernization of Jinnah Barrage, the implementation of social and environmental management plans, and construction supervision and support for the project’s preparation and implementation. The Project Management Organization (PMO) of the Punjab’s Irrigation and Power Department (IPD) would be responsible for implementation of this component.

3 1. Jinnah Barrage is the first major diversion structure on the Indus River. It is situated about 126 miles (203 km) downstream of the Tarbela Dam. Jinnah Barrage is one of the most important structures in Pakistan’s irrigation system, handling all the Indus River water. It provides water to the Thal Canal that covers an area of 2.1 million acres in ariddesert zone where crop production is only feasible with irrigation. About 5 million people in 5 districts inhabit the command area and their livelihoods depend directly or indirectly on the irrigation supplies of the canal. In some of the command areas, the underground water is saline and the local population depend exclusively on the canal waters for drinking water. Commissioned in 1946, the Barrage continued to provide services without any major problems until 1990, when 11 gates malfunctioned. In 2001, significant damage was observed to key structures of the barrage such as friction blocks and the concrete floor in the right pocket of the barrage. Emergency repairs works were carried out. The barrage is currently facing the following hydraulic and structural problems: (a) retrogression on the downstream side due to inefficient energy dissipation that is undermining the structure; (b) improper approach of the river on the upstream side resulting in parallel flow to the barrage; and (c) many of the barrage gates are not operating properly. Moreover, the barrage is threatened by further damage from increased retrogression of the river and requires urgent rehabilitation and modernization. 7 32. Sub-components A1 and A2: Civil, mechanical and electrical works (US$94 million) The rehabilitation measures to make the Jinnah Barrage safe would consist of: (Al) civil works consisting of construction of (i) a subsidiary weir about 600 ft downstream of the barrage main weir and associated works to address retrogression and ineffective energy dissipation problems; (ii) repairs to the barrage floor, impact and friction blocks, and guide banks; (iii) alteration to the main barrage structure, such as extension of abutments and downstream divide walls, (iv) construction of river training works upstream (an inverted hockey spur) to improve river approach towards the barrage; (v) associated and temporary works for carrying out main rehabilitation works; and (vi) preparatory works and renovation of the necessary building and management infrastructure; and (A2) mechanical and electrical works consisting of: (i) renovation of the barrage gates and hoist system and automation of gate operation; and (ii) upgrading of the barrage monitoring system and basic operation and maintenance facilities. These modifications would provide a secure barrage structure for passing the design flood and modernize the operation system. More details on the problems of the barrage and remedial works are provided in Annex 4.

33. Sub-component A3: Implementation of Social and Environmental Management Plans (US9 Millions). As the project involves large-scale construction on the Indus River and irrigation systems and the possibility of interruption of canal supplies for a short or long duration, the project is categorized as Environmental Category “Ayy,requiring thorough environmental and social assessment, analysis, development of social impact and environmental management plans, consultations and disclosure, and their diligent implementation and monitoring. Based on the experience with the Taunsa Barrage Project, a “development assistance” approach instead of a narrowly focused “mitigation and compensation” approach has been adopted for the project to address the likely social and environmental issues.

34. Although the construction activities are being planned in a manner to ensure no unusual interruption in the water supply to the canals, there is a risk of an interruption due to emergency situations, such as breaching of a cofferdam. This may impact communities on a substantial tract of land served by the canals, particularly the Thal Canal (Mohajir Branch) which is underlain by saline groundwater and where the local population (e.g. left side of the Muhajir branch) typically rely on the canal water for drinking and domestic uses. 35. In order to plan for any possible interruption of water supplies during the construction period (details of which are provided in the technical section of this PAD and Annex 4.1) and deal with other environmental issues, a Social Development Action Plan (SDAP) and the Environmental Management Plan (EMP) have been developed based on detailed surveys, social and environmental studies, and broad consultations with local communities in the command areas and areas around the barrage. This sub- component will support the implementation of the SDAP and EMP, and if necessary, Land Acquisition and Resettlement Framework (LARF) and Resettlement Action Plan (RAP). The SDAP involves distribution of improved seed, water supply schemes, community wells and hand pumps, extension services, development initiatives at the barrage area including establishment of a public park, primary school for girls, and a basic health unit etc. The component will also support implementation of an information dissemination and communication program, particularly regarding possible canal closure extension and implementation of the SDAP program. The EMP involves monitoring and training, tree plantation, emergency response plan, water supply and wastewater disposal arrangements, and environmental audits during construction period. Details for these plans are given in Annex 10.

36. Sub-component A4: Construction Supervision, Preparation and Implementation Support (US$S.5 Million). This component will cover the cost of consulting and other services for implementation of the project, including construction supervision and project management support. It will also cover implementation of all activities under the project: procurement, contract administration, quality control, certification of payments, financial management, preparation of any additional designs, and bidding documents, etc. 8 Component B: Improvement and Modernization of the Irrigation and Water Management System (US$15 Million). This component consists of (B 1) Improvements in irrigation and water management systems, including development of management information system, monitoring and decision support system; modernization of water management equipment and facilities; and (B2) preparation of future irrigation and water distribution improvement projects. The progress in continued transfer of management to FOs, making them effective organizations and their performance and would also be monitored. This work would be carried out by the independent consultants recruited for M&E (under component C of the project).

37. Component B1: Improvements in Irrigation and Water Management (US$9 Million). The purpose of this component is to advance the improvements in irrigation and water management initiated by the Program Monitoring and Implementation Unit (PMIU) and to provide equipment and facilities to modernize further irrigation and water management planning.

38. This will include further upgrading and modernization of the PMIU systems. This includes the development and use of modern databases; GIS Systems; models; decision support systems; and management information systems for improving planning and operation of the complex irrigation system of Punjab. This will also include forecasting; planning; and operational tools for seasonal and IO-day (as needed) planning forecasts and demand management systems with client interfaces. These tools will aid in irrigation planning and link with the reservoir operation decisions of the Indus River System Authority (IRSA). A system of water measurements, accounting and transmission will be introduced at key locations in the river and link canal system and the main and branch canals. A data communication network will also be installed to gather information to be sent to central locations and the Punjab Irrigation and Power Department (IPD)’headquarters.

Project Cost Estimates and Financing (US$ iillion) Project Component Total Bank GoPunjab cost A. Rehabilitation and modernization of Jinnah Barrage Al. Civil works 57.5 51.7 5.8 A2. Mechanical and electrical works 36.5 32.9 3.6 A3. Implementation of social and environmental management plans 9.0 9.0 A4. Construction supervision, and implementation support 8.0 8.0 Subtotal (Component A) 111.0 101.6 9.4 B. Improvement and modernization of the irrigation and water management system B 1. Improvements in irrigation and water management B1.l. Management information, monitoring & decision support system 5.00 5.0 B 1.2. Modernization of water management equipment and facilities 5 .OO 5.0 B2. Preparation of future water and irrigation improvement projects 5.00 5 .O Subtotal (Component B) 15.00 15.0 C. Monitoring and evaluation of the project impact; Social and environmental management plans 3.0 3.0 D. Project management coordination and technical assistance and training D1. Project management and coordination 5.5 5.5 D2. Technical assistance, training and strategic studies 1.5 1.5 Subtotal (Component D) 7.0 7.0 Interest During Construction 18.6 18.6 UDfront Fee 0.4 0.4 Total 155.0 145.6 9.4

9 39. The database and management information system will be upgraded to collect, store and disseminate flow data and other relevant information to help system wide water management. Modern control/management rooms for operation and management of the provincial canal system will also be established. The component will provide technical assistance; training and equipment including hardware and software; latest discharge measurement equipment; echo-sounders with geo-positioning system for taking cross- sections of the rivers and canals; and modern equipment for measuring water flows, stage, velocities etc.

40. Component B2: Preparation of Future Projects (US$6 Million). This will include feasibility studies and preparation of designs for future projects for further improvement of irrigation and water management in the province identified during the project implementation period.

41. Component C: Monitoring and Evaluation of the Project Impact and Social and Environmental Management Plans (US$3 Million). The monitoring and evaluation (M&E) activities would provide continuous feedback to the Government of Punjab (Gopunjab), Government of Pakistan (GOP), Project Steering Committee (PSC), the World Bank and implementing agencies on the project’s performance and impact of its various components, so that corrective actions could be undertaken in a timely manner. The monitoring will be carried out by M&E consultants. They will also supervise implementation of the overall social and environmental management plans and provide independent monitoring of various activities, assess positive and negative impacts and propose alternatives to address any long-term or, during construction, social and environmental issues.

42. The M&E activities are likely to cover, but not be limited to: (i) the impact of the project during and after completion on the communities at various levels; (ii) impact on various productive activities, including crops, livestock, fisheries, trade and industry, domestic and municipal water uses, health and environment; (iii) environmental impact of construction activities in the project area, particularly on any ecologically important sites; (iv) possible acquisition of public and private land and assets, agreements reached and arrangements made for acquisition of assets; (v) socio-economic impacts and the impact on the level of employment, livelihood and household incomes in the project area; and (vi) evaluation of the SDAP program implementation at completion; and (vii) estimation of the project’s overall benefits and economic rate of return at completion and prepare Borrowers ICR, etc. Also the monitoring of progress in transfer of irrigation management and timeliness in addressing any issues by the Government of Punjab in making FOs effective organizations in irrigation management. M&E will be carried out by collecting actual data through structured surveys, field measurements, and community interaction including a variety of focus groups. Modern technology such as satellite imagery and GIS systems may also be used to support M&E and to help the PMO prepare mid-term and project completion reports. This consultancy will also help to reinforce overall transparency and governance in the project.

43. Component D: Project Management Coordination Technical Assistance and Training (US$7.0 Million). This component will support the Government in implementing the project by coordinating all project related activities. It will include support for: (i) the operation of the PMO including procurement and tendering of contracts, contract management, implementation of social and environmental management plan, managing operation of the site, river and irrigation systems, communication strategy, liaison with stakeholders, civil administration, Punjab and Federal Government and the World Bank etc; (ii) building the capacity of the PMO to transition to a Barrage Management Organization (BMO); (iii) technical assistance and training in such areas as hydraulics; detailed designs; contract administration and construction supervision; procurement; operations and management planning; asset management plans; financial management; legal issues; irrigation and drainage; and water resources development. This will include post graduate programs, seminars, workshops, and study tours, etc;. (iv) an independent panel of experts for design and construction quality and safety enhancement or any other issues that may have to be addressed during project implementation; and (v) strategi.c studies and pilot projects that may be identified during the project implementation, such as studies for improving water management in the region; monitoring of key hydraulic infrastructure in the province; 10 This will also involve financing of incremental staff salaries, operating expenditures, consulting services, equipment and software. D. Lessons learned and reflected in the project design

44. The project design draws on lessons learnt from rehabilitation of infrastructure projects both in and outside Pakistan, specifically the Taunsa Barrage in Pakistan. Bank-wide experience has shown that reconstruction of damaged infrastructure is imperative and that measures are needed to reduce the risk of any future disasters and to safeguard people and property at risk. Therefore, the underlying premise of the Project is to provide protection against failure of the Jinnah Barrage, which calls for rehabilitation and modernization of the existing facilities. Other lessons include: (i) project design should be based on thorough hydrological and hydraulic analyses. In-depth studies have been undertaken, while using the latest techniques, including extensive hydraulic model studies in the Nandipur Hydraulic Laboratory, and a detailed study of flood frequencies with various return periods; (ii) completion of detailed design (and bidding documents) of key works prior to negotiations; (iii) upstream detailed assessment and plans for social and environmental issues; (iv) extensive a priori consultation with various stakeholders and consideration of alternatives to minimize the adverse affects to make interventions most effective; (v) proper review of construction planning to identify and minimize negative effects during construction and operation of the irrigation and river network without major interruptions, and preparation of necessary mitigation measures if such impacts are identified; (vi) implementation of the project works through large civil contracts following the best contract management models whereby competent consultants with adequate resources provide the best construction supervision (vii) deal up front with any resettlement and land acquisition issues; (viii) contingencies planning based on risk analysis so that the people should not be affected by the construction works, thus proper plans would be in place in case of any disturbances to the supply of water, (ix) strong government leadership and properly staffed Project Management Office, indispensable to effective project preparation and implementation; (x) procurement needs to be flexible and procurement process should start early, and retroactive financing can be very helpful to ensure an early project start-up; and (xi) the speed of appraisal and implementation is critical to project success.

45. Lessons learned from the Taunsa Modernization Project. The lessons learned from the Taunsa Barrage Projects have been fully internalized in the preparation designs and operation and construction implementation plans. These include: (i) more thorough consideration of environmental and social issues and preparation of EMP and SDAP using the concept of “development and enhancement approach” instead of mitigation and compensation approach; (ii) well planned construction schedule, including the location of construction plants, traffic movement, identification of areas for borrowed material, land required’for contractors and camps and other construction purposes; (iii) design of the operation of Thal canal and the river flows during construction; (iv) thorough contingency planning for unexpected interruption of water supply to the Thal canal. This includes provisions for temporary canal supplies to Thal canal, cofferdams and seed distribution; and (v) comprehensive prior consultations and the design of an effective communications strategy during construction. A thorough monitoring program to identify issues early on. This would consist of:(i) monitoring by PMO with dedicated Directors for Engineering, and Environment and Social aspects; (ii) support from the project implementation consultants; (iii) independent M&E consultancy to monitor progress and supervise the EMP and SDAP activities; (iv) bidding documents would require contractor to have dedicated staff for monitoring EMP implementation; (iv) the Bank Project team would place a consultant on the country who would visit the project site on a regular basis (at least twice a week) in the first two years of the project when construction would be taking place and keep the Bank and the project steering committee informed of an issue arising in project implementation.

E. Alternatives considered and reasons for rejection

46. As mentioned above, damage to Jinnah Barrage and interruption of water supplies could cause a disastrous setback to the economy and the lives of the people in the area. Therefore, no-intervention is 11 not an option. The alternative of carrying out the repairs through intensive maintenance during regular closure periods was considered and found not viable. Such repairs have been made on an emergency basis during regular closure periods and would not be sustainable. In order to carry out proper repairs, the drying of construction surfaces is necessary, requiring the construction of coffer dams. Such repairs, even if carried out cannot resolve the hydraulic problems that the barrage is facing. Various hydraulic models developed show that construction of a structure downstream is necessary in order to ensure safety of the barrage. This rehabilitation requires the construction of coffer dams which in addition to the barrage itself, would allow for repairs to the floor, apron and friction blocks of the barrage and gates and other mechanical and electrical parts, etc.

47. Capital rehabilitation and modernization of the barrage is the only viable option to keep the barrage in operation for an extended period of time. In addressing the problems of Jinnah Barrage various technical options were considered in the technical designs. This was based on a thorough hydraulic analysis and also tested on the physical models at the Nandipur hydraulic lab. The following options were considered: (i) subsidiary weir 800 feet downstream of the gate. This option was rejected due to costs and hydraulics, (ii) stone apron in gabions. This option was rejected due to its inability to provide a long term solution, (iii) two step weir at 250 feet. This option proved too complex from a construction point of view due to the close proximity of the barrage. The final recommended scheme consists of a sub weir 600 feet downstream across the barrage span (covering the main weir and sluice gates) and extension of guide walls in order to improve energy dissipation downstream and to keep the scouring to a minimum. For improving the river approach to the barrage at a hydraulically suitable angle, provision of inverted hockey-stick shaped spurs will more properly guide the flow. The barrage gates will be repaired or replaced using better materials and operation will be modernized.

48. Thorough attention was given to construction planning to ensure un-interrupted operation of the river and the canal system during construction. This includes sequencing of construction so that operation could be as close to normal as possible, construction of a feeder channel (of about 1,500 cfs) possibly in the second year during which there is a possibility of interruption of water supplies to the Thal canal and setting the capacity of the feeder canal to at least cover supplies to areas underlain by the saline groundwater. Based on the risk analysis, in case of any failures in particular of the coffer dams, contingency plans have been developed based on a “development assistance approach” instead of narrowly focused “mitigation and compensation concept”. These activities are included in the SDAP and EMP described in the appropriate sections of the PAD and included in component A3 of the project.

111. IMPLEMENTATION

A. Partnership arrangements (if applicable)

49. Although the Project is financed by the Government of Punjab and the Bank, the barrage rehabilitation program is fully coordinated with other major donors such as Asian Development Bank (ADB) and Japanese International Cooperation Agency (JICA). JICA would be possibly assisting in Khanki and ADB in Suleimanki (on Sutlej River), Balloki, Sidnai (Ravi River) and Trimmu Barrages (Chenab River).

B. Institutional and implementation arrangements (details in Annex 6)

50. The Punjab Irrigation and Power Department (IPD) of the Government of Punjab shall be responsible for the execution and implementation of the Project through the Project Management Office (PMO). The PMO would engage the services of an appropriate Non-Governmental Organization (NGO) and coordinate with Public Health Engineering Department (PHED) for implementation of parts of SDAP related to seed distribution and constructionhehabilitation of water supply schemes. The existing Project Management and Implementation (PMIU) of IPD would be responsible for implementation of component 12 B1.l related to improvement in irrigation and water management in the province. PHED would be responsible for implementation of water supply schemes under component A3 of the Project.

51. Project Management Office (PMO) The PMO has extensive experience in large scale construction since the reconstruction of structures on the B-S Link, the failure of which led to the reconstruction of major structures in Punjab. PMO has also demonstrated its competence and gained further experience during the Taunsa Barrage Rehabilitation Project. The PMO would be responsible for all aspects of project implementation. The PMO would be transformed into a Barrage Management Organization (BMO) during the project implementation period. The PMO will be headed by a Project Director with four units: (i) Finance Unit; (ii) Procurement Unit; (iii) Engineering Unit; and (iv) Environment and Sociology Unit. Key specialists have been recruited and the units have largely been staffed with qualified personnel. The PMO would be supported by two sets of consultants, Project Implementation Consultants (PICs) who would help in construction supervision, contract management, and management aspects of the project. For civil works contracts, the Project Director will serve as the Employer, and the PICs supervising consultant will serve as the Engineer for construction supervision. At the site, a Resident Engineer, appointed by the PICs, with a team of specialists and inspectors will supervise the Contractor. 52. Project Steering Committee (PSC). The existing Project Steering Committee (PSC) (for Taunsa Barrage and Project preparation), chaired by the Chairman P&D with the Secretary IPD, Secretary Finance and Secretary Agriculture, Environment, Public Health Engineering, Forestry and Wildlife, Chief Executive officer of the selected NGO, Member Infrastructure, and Chief Water, P&D, representatives of the IocaVdistrict administration as its members, will be maintained to oversee this project, provide policy- level guidance and inter-agency coordination for the project. The Head of the PMO will act as the secretary of this PSC.

C. Monitoring and evaluation of outcomedresults

53. The PMO will submit quarterly reports in an appropriate format to the Punjab Government, PSC and the Bank no later than 45 days after the end of each quarter. The quarterly report would cover the progress and expected completion dates for civil works and equipment supply contracts, progress on institutional components, implementation of SDAP and EMP, training and studies, and activities of the PMO’s engineering, M&E, procurement and financial consultants. The reports would cover financial and procurement information, including: (a) comparison of actual physical and financial outputs with forecasts, and updated six-months project forecasts; (b) project financial statements, including sources and application of funds, expenditures by category statement, and special accounts reconciliation statement; and (c) a procurement management report, showing status and contract commitments.

54. The PMO will also prepare annual reports by no later than March 31 of each year of project implementation. The report will cover: (a) the progress of each component, implementation of key features of the environmental management plan, key performance indicators, operation of project facilities, and financial statements; and (b) the Annual Work Plan for implementation, annual funds required for implementation with breakdown by each co-financier, an updated disbursement profile, planned actions for mitigating negative effects during construction, and target indicators for the coming year. A mid-term review of the Project would be undertaken by October 31, 2013. An Implementation Completion Report (ICR) would be submitted to the Bank no later than six months after the closing date. 55. A group of consultants shall be recruited for M&E of the Project impact, including the implementation and monitoring of the EMP, and the RAP. The M&E studies will evaluate the success in project implementation in terms of meeting the project’s objectives, and assess its physical, hydrological, environmental, social, and economic impacts. The M&E activities will provide continuous feedback to the GoPunjab and the PSC on the project’s performance, in mitigating its impact on the various components, so that corrective actions can be undertaken in a timely manner. Changes in the PAD or the Project, if any, will be reflected in the implementation review aide memoires and or communicated 13 through exchange of letters between the Bank and the Government. Bank team would place an individual consultant in the country who would visit the project site on a regular basis (twice a week), particularly in first two years of the project, to monitor the project planning, implementation program for construction activities, communication strategy, and EMP and SDAP activities.

D. Sustainability

56. The proposed rehabilitation and modernization has not been necessitated due to lack of operation and maintenance but rather natural aging, inherent design issues, and changes in the flow regime. Jinnah Barrage was constructed in 1943 (commissioned in 1946) and it was an innovation at the time. In hindsight, and based on experience gained subsequently, two aspects would be done differently if the barrages were constructed now: (a) the floor would be placed 10 feet lower than the current level that would allow better energy dissipation downstream and the barrage would not be affected by retrogression of downstream levels; (b) radial gates would be used instead of the vertical gates (as was done for barrages constructed recently) which are more suitable, can better handle hydraulic loading and involve minimum moving parts needing maintenance. Also with the construction of Tarbela reservoir, the flow regime has changed exacerbating the retrogression downstream of the barrage. The proposed rehabilitation project will eliminate possible sources of failure and potentially give the structure another 50 years. Instruments will be installed to monitor the performance of the barrage structures and its foundations. Under the technical assistance component, technical assistance would be provided to create adequate institutional capacity for operation and maintenance of project facilities. The PMO transformed into the BMO would provide capacity to oversee maintenance, rehabilitation and modernization of all the barrages in Punjab.

57. Irrigation is highly profitable in Pakistan so there are no inherent sustainability issues. However, despite the surpluses generated to the economy the sector is short of funds for proper O&M of the system due to several factors mentioned in Section I. As discussed earlier, funding shortages typically impact the tail end of the system. This aspect is being addressed through the irrigation sector reform program by divestiture of the distributary canal system to formally organized FOs who would be responsible for management of that part of the system. Also they are being federated to participate in management and O&M of the main and branch canal system. The Barrages would remain with the Government being multi-sectoral and strategic assets. The project would support a program to: (a) improvement transparency in water allocation, accounting and monitoring; and (c) monitoring of progress in transfer and progressively enhancing their role of FOs in irrigation management in Punjab.

E. Critical risks and possible controversial aspects

Risk Mitigation Measures Risk Rating Technical including project management: The preferred independent evaluation by consultants have technical solutions may fail to been carried out to give confidence that the stop retrogression, and pass proposed solution would work. The designs floods safely. are prepared by experienced international and national consultants. The experienced consultants would also supervise the construction. Also similar solution has worked very well on Taunsa & Islam Barrages. Interruption of water supply in Various measures and plans have been S prepared to address the supply interruption issues during construction. The construction planning is done to avoid closure the irrigation svstems. The contineencv Dlans have been

14 Risk Mitigation Measures prepared such as provision of a feeder channel, construction of water supply schemes, and distribution of seeds to help early planting of Rabi crops, to minimize any risks due to interruption in water supplies fo unforeseen reasons, construction accidents, etc. A separate covenant is included that Government would ensure adequate water supply in the river and to the Thal canal during construction. Capable contractors may not be The PMO has gained substantial experience, M attracted to carry out the civil especially after Taunsa. The contracts would works contracts be packaged to attract good national and international contractors. Procurement issues: Project design has included several measures S Lack of transparency and to ensure good governance and bring more accountability in procurement accountability and transparency (Annex 8). A of contracts, and their proper system of procurement planning and implementation. tracking of various procurement actions, and monitoring of complaints, would be implemented. A website would be maintained by the PMO to show up-to-date status of procurement. Large ICB contracts would be supervised by international consultants to minimize risks. Financial management: Cost or Designs and cost estimates have been prepared M time overruns during project and based on thorough analysis. Based on Taunsa financial management issues. experience cost overruns or construction period overruns are unlikely. The PMO has good experience in financial management as observed during Taunsa Barrage Project. Social & Environmental Issues: Proper implementation of SDAP and EMP is M Government may face agreed and covenanted in the Legal difficulties in fully following Agreement. Also financing for SDAP and EMP. implementation of these plans is included in the project and approved by the Government. In Taunsa, the Government Punjab made extraordinary efforts to address the unanticipated social issues during project implementation. In that case, remedial plans were developed and implemented during the project implementation in consultation with local communities. Security Risks So far security situation is quite good in the M Security situation in the area may area and there are no signs of conflicts, threats, deteriorate to the extents that the and political instability. The civil contractors and consultants care administration is fully is in control of the not able to carry out the work security situation. The area is settled unlike tribal region in the north where extremists are active thus insurgency is less likely. The Government would be able arrange security forces as Barrage is a strategic asset and link to

15 Risk Mitigation Measures Risk Rating the NWFP. This would allow the contractors 1 and consultants to carry out the works. WAPDA is constructing a power plant at the site for which foreign contractors and consultants are working on the site. Like Taunsa Project the contractor would have their own security forces. Overall Risk Rating: Every effort has been made to learn from past S experience and plan accordingly, including prior completion of detailed design of the construction works, implementation plans, construction plans and operational plans. However, because of mere size of the Project, on an operational system, and possibility of interruption of water supplies during construction due to unforeseen circumstances, overall risk is rated as substantial, considering the reputational risks. N: Negligible Risk; M: Moderate Risk; S: Substantial Risk; H: High Risk

58. The most controversial aspect of the project would be the possibility of interruption in the supply of water during construction. Even with a three layered plan to avoid interruption in water supplies during construction and to deal with such a situation, some groups would remain skeptical of such plans. Politicians and NGOs with various agendas may see this as an opportunity to oppose the Government and the World Bank, to earn some concessions and enhance their standing, status and nuisance value. This is part of the reasoning behind rating this as a “substantial risk” operation. The rating otherwise would be “Moderate”. To address these issues adequate planning has been done to avoid any interruption to supplies during construction period. Also contingency plans (such as given in SDAP and EMP) have been designed to deal with the situation if interruptions occur for any unforeseen reasons. The possible interruptions would be in the second year when construction would be carried out on the right side of the barrage from where the Thal Canal takes water. With experience of the first year of construction and the contractor’s performance, the construction plans would be further improved during the second year by making any adjustments that may be required to ensure better construction operation. This would hopefully eliminate any possibility of interruptions in the water supply.

F. Loadcredit conditions and covenants

59. Conditions for Board Presentation: None Conditions for Effectiveness: None

60. During Project Implementation: (a) Government of Punjab would ensure that PMO and the PSC are maintained with appropriate terms of reference, staffing agreeable to the Bank, until project completion; (b) The Government of Punjab, through , through Irrigation and Power Department (IPD), would ensure that the project implementation consultants shall be recruited and maintained, under the terms of reference satisfactory to the Bank, for construction supervision, and supporting PMO in project management, by no later than December 3 1,2010; (c) The Government of Punjab, through IPD, would ensure that the M&E consultants shall be recruited and maintained, under terms of reference to the Bank for monitoring implementation progress, monitoring and evaluation of the project impact, supervision of implementation of SDAP and EMP, and if necessary LAW and RAP, by no later than December 3 1,2010;

16 The Government of Punjab, through IPD, would ensure that appropriate NGO is recruited for distribution of seeds in the Thal canal command as designed under the SDAP, by not later than February 28,201 1; The M&E consultants would also carry out the monitoring of the irrigation reform program and transfer of irrigation management to the farmers? organizations and prepare and assessment report each quarter starting from March 3 1, 201 1 that would form the basis for dialogue between-the World Bank and the Government of Punjab and engagement in the sector; Government of Punjab would ensure that independent auditors carry out the audit in accordance with scope and TORS acceptable to the Bank, also covering special examination of the controls and compliance with the agreed-upon procurement procedures; Government of Punjab, through IPD, would ensure that procurement documentation and record keeping systems, including a website showing the status of procurement of various contracts and their performance, would be established and made fully operational by PMO, and a procurement complaint handling system is in place by not later than December 3 1,2010; Government of Punjab, through IPD, would ensure that PMO and other implementing agencies would monitor the physical and financial progress of the Project, implementation of the SDAP and EMP, and the project impact studies, analyze the data on key performance indicators on a regular basis and prepare and submit quarterly and annual progress reports, and by March 3 1 each year annual work plans for the following year; The mid-term review of the Project would be undertaken by October 3 1,2013; The Government of Punjab, through IPD, would ensure that technical deigns of the construction works are based on international standards followed for such works with adequate consideration to environmental and social aspects and as defined in EMP and SDAP; Government of Punjab would ensure social and environmental plans (SDAP and EMP) and in necessary LAW and RAP are implemented properly with due diligence and efficiency, provide adequate funds for their implementation and monitor and evaluate them and keep the Bank suitably informed of the progress in implementation; Government of Punjab would ensure that: (i) construction planning and implementation would be carried out by the PMO, project consultants and the contractors for maintaining adequate river flows to meet the water requirements of the system downstream of the barrage and closure of the Thal canal off- taking from the Jinnah Barrage would not be more than the normalhistoric annual canal closure of about 2 1 days; (ii) effective communication strategy is implemented to keep all stakeholders informed about the construction plans and implementation activities, obtain their feedback and keep then onboard throughout project implementation period; and (iii) a grievance redressal mechanism is established, by December 31, 2010, in a manner and substance satisfactory to the Bank in order to receive and expeditiously handle any stakeholders? and/or Displaced Persons? complaints related to the Project. The mechanism shall include the establishment of grievances redress cell headed by the PMO?s Project Director, assisted by an irrigation engineer, the Deputy Directors of the PMO?s sociology and environmental units, the M&E Consultants, a sub-divisional officer and representatives of the local administrations and communities, and provided with sufficient recourses, competencies and powers, in terms acceptable to the Bank. (m) For Jinaah Barrage related large hydraulic infrastructure and works to be constructed under the project, the Government of Punjab shall appoint, not later than December 31, 2010, an independent panel of experts with qualifications and terms of reference satisfactory to the Bank to advise the Government of Punjab on matters relative to safety and critical aspects of design and operation, and the panel would convene panel meetings periodically, or at least twice annually, to review the design and implementation of the infrastructure.

17 IV. APPRAISAL SUMMARY A. Economic and financial analyses

6 1. The Economic Rate of Return (ERR) of the Project is estimated around 2 1.7%. The benefits of the proposed project are estimated as the ‘losses avoided’ in agricultural production in the Thal canal command area of about 2.1 million acres, due to continued and sustainable water supplies without any disruption under the “With Project’’ scenario and gains in cropping intensity due over the next 10 years. Under the “Without Project” scenario, degradation of the barrage would result in disruption and reduced water supplies over time thus reducing the cropping intensity resulting in production losses. The un- quantified benefits include continued: (i) power production from the currently being installed 96 MW power plan on the right side of the barrage which actually takes advantage of water levels raised by the Jinnah barrage; (ii) the barrage’s ability to provide flood control and overall river and water management; and (c) benefits from the road, and utility crossing etc.

62. The ERR is quite robust and not sensitive to reasonable cost overruns, reduced benefits, and a combination of both. A 20% increase in costs reduces the EIRR to 19.3 %. A 20% reduction in benefits reduces it to 18.8%. A combination of 20% increase in costs and 20% reduction in benefits reduces the EIRR to 16.7%. Project financial internal rate of return has been estimated at 17.7%. Economic analysis details are presented in Annex 9.

63. The ERR is based on quite conservative assumptions. The alternative of catastrophic failure, which is possible in “Without Project” scenario (but not considered for economic evaluation), would result in much higher losses. If barrage is partially or fully collapsed, over US$500 million would be required to reconstruct it. In addition, due to non-supply of water in the Thal canal during re-construction period of the Barrage (say five years), the estimated loss would be about US$87 million annually.

B. Technical analysis

64. Technically the works are not overly complex. The real challenge is in executing the construction works according to the planned schedule in a timely manner without extensive closure. This is especially difficult for rehabilitation works on an operational irrigation system during low flow periods. As indicated above, very thorough technical studies and analysis has been carried out over a period of the last seven years (since 2002) in identifying and designing the solutions. Physical model studies have been carried out for each intervention assumed. The final solution has been based on these thorough studies and after testing several alternatives. Also similar works have been executed under the Taunsa Barrage Project, where GoPunjab and Irrigation and Power Department have gained experience in implementing such works. The detailed designs for all works have been prepared jointly by international and national engineering firms. The works would be packaged as large works contracts attracting competent international contractors with capacity to carry out such work on timely basis. The contract management would be carried out by international consultants.

65. Construction Planning and Operation of the System during Construction. Based on the lessons learned from Taunsa barrage, special attention has been given in preparation of this project with respect to construction planning and operation of the system during construction. Unlike the Taunsa barrage (where there were more than one canal off-takes from both sides) there is only one canal off-take on the left side of barrage. A power house on the right side of the barrage is still under construction. The power house takes water from a channel on the right side which would not be affected by the coffer dams needed for rehabilitation of the barrage. The Thal canal’s regular annual closure is for three weeks and it is generally observed in the month of January (depending upon the water availability in the system the closure is sometimes changed by a few days). A three pronged approach is being undertaken to ensure uninterrupted water supplies to the Thal canal command: (i) sequence construction of coffer dams and construction activities so that there would not be any need to close the Thal canal for extended period. The construction would be done on the right side of the river first and move to the left side where Thal canal is after gaining real experience; (ii) a feeder canal would be constructed as standby in case water supply to the Thal Canal in case of emergencies; and (iii) provision of water supply schemes particularly in the saline groundwater areas and distribution of improved early growing variety seeds so that the crop is less vulnerable to any possible interruptions in water supplies around January. The detailed planning is described in Annex 4.1 and Annex 10.1 and briefly in eth section below.

66. The barrage has 56 gates (42 in the main weir and 7 each on the left and right sluice gates). In the first year, construction would be carried out on the right side of the barrage. The coffer dams would be built to cordon out the construction area between bays 26 to 56 on the right side. The height of the coffer dams would be set at level (E1.700 and 685 for upstream and downstream cofferdams respectively) to allow passage of flow through the remaining section of the barrage and to feed the Thal canal according to the requirements. During the period between December to May, all civil works on the barrage floor and construction of the downstream weir would be carried out including the extension of the dividing wall. During regular canal closure period gate number 3 would be rehabilitated. The coffer dam would be dismantled by Mid June to pass summer flows. During the first year capacity of the contractor to handle all these works on a timely basis would be tested and the second year program would be adjusted according to the first year?s experience. In the second year, construction of the coffer dam would start from the left side covering gates number 26 to 3 and assume that river will pass from the right side of the barrage. The work on gate No 1 shall be completed in January of the third year using the routine canal closure in order to allow the Thal canal to keep on operating through its head regulator during the construction activities. Early on, a feeder channel to supply about 1,500 cusecs flow of water to the Thal Canal would be excavated which shall be used on a need basis. See Annex 4.1 for detailed construction planning and operation of the river and irrigation system during construction.

67. As indicated above, extraordinary measures are taken in proper construction planning and methodology to avoid disruption of flows to the river system downstream and to the Thal Canal command area (which is a canal with perennial water supplies) and hence deal with what is identified as the ?Substantial Risk? for the project. In addition, to these plans several contingency plans have been included in the project to deal with any unforeseen circumstances and to avoid the risks in case of failure of coffer dams or other possible disruptions.

C. Fiduciary

68. Procurement Arrangements (see Annex 8 for details) The PMO has considerable experience in procurement and execution of large civil works contracts. The procurement risk in this project would be minimized by packaging of works into large contracts tendered through international competitive bidding. There shall be a few large consultancy assignments including for construction supervision, M&E, and design of future projects etc. Major goods contracts are expected to cover field equipment, besides other contracts for vehicles and office equipments etc. The Project Director PMO would be supported by a properly staffed Project Management and Procurement Unit and also by two consulting teams.

69. Due to the sheer size of the procurement involved and country environment, procurement risk is rated substantial. However, to minimize these risks, procurement documentation and record keeping systems, including a website showing the status of procurement of various contracts and their performance would be established. Also a procurement complaint handling system would be established to keep track of any complaints etc.

70. Financial Management and Disbursement (see Annex 7 for details) The Financial Management (FM) established for the Taunsa Barrage rehabilitation would be acceptable for the current project and meets the requirements of OP 10.02. There are no overdue audit reports and audit

19 observations were fully resolved through completion of the Taunsa project. The overall financial management risk for the project is assessed as ‘Moderate’.

71. The main FM innovation in the project would be the use of the IFR based method to accesdwithdraw the Bank funds. The advance and subsequent replenishment of funds would be deposited to the US dollar Designated Account. PMO will advance funds to PMIU for implementation of activities under B1 and to PEDfor implementation of water supply schemes under A3 of the project. These entities would provide expenditure statements to PMO based on which the PMO would account for the funds advanced and prepare replenishment applications. For major construction contracts the PICs would certify the interim and final payments to the works contractors. 72. Financing Plan and Retroactive Financing. The total project cost is about US$l55 million of which US$145.6 million would be financed by the IBRD and remaining US$9.4 million by the GoPunjab. To meet the urgent project start-up needs, the Bank loan could be used to retroactively finance expenditures incurred during the period between January 1, 20 10 and Loan signing (July 201 0) of up to US$5 million of the credit amount, provided that procurement procedures acceptable to the Bank are followed.

D. Social (See Annex 10 for details).

73. Several surveys and extensive consultations were carried out to screen and identify social impacts under this component. They confirm that there are no indigenous communities in the project areas and the rehabilitation work would not require any land acquisition or resettlement. However, it is expected that the influx of the construction workers will bring social impacts in local areas, such as public health impacts and possible conflicts between the work force and local population. There may also be social impacts on drinking water and irrigation in the command due to the possible prolonged canal closure. The IPD has developed a Social Development Action Plan (SDAP) to address these issues and enhance project benefits to local communities. See Annex 10.1

74. The SDAP includes a program of activities to be implemented by the contractor to address public health impacts. These include establishing a medical clinic on-site staffed with qualified medical doctors and workers, carrying out regular health checks and monitoring contagious or other diseases among the construction workers, carrying out education activities on public health and safety among the workers and local communities, implementing a set of environmental and public safety measures in the construction areas and appointing an environmentlpublic health officer as well as assigning a deputy manager for coordinating with local governments and communities.

75. The SDAP also includes a social assistance program in both the command and barrage areas. In view of the possible extended canal closure, a temporary diversion channel has been designed at the barrage head pond to ensure Rabi (winter) water supply in the Mohajir branch canal. The PMO will monitor the construction schedule and keep the farmers informed of any possible canal closure extension. Meanwhile, a program has been developed to deal with the possible impacts on crops and drinking water and to assist local development. The program consists of distribution of improved seed, water supply schemes and social assistance initiatives. These also include rehabilitation of existing water supply schemes in the Mohajir area to ensure availability of potable water, delivery of a wheat seed program of an early variety for early sowing in the command areas. The project will provide assistance to enhance benefits to local communities. The assistance includes rehabilitation and construction of mosques, development of public parks at the barrage (on IPD lands), establishing a basic health unit, rehabilitation and up-gradation of government schools (boys and girls respectively).

76. Extensive consultations have been carried out during the project preparation phase over the possible impacts and assistance measures. Project information, including anticipated impacts, has been shared with local communities and governments. The feedback was incorporated into the SDAP 20 development. Community participation will continue during the SDAP implementation. A communication strategy and plan have been developed in this regard, laying out the objectives and basic principles to be followed, as well as approach and methodology to be adopted This will facilitate timely and regular information dissemination among the local communities, and their continuous participation in the SDAP implementation.

77. The IPD will be responsible for the SDAP implementation through its PMO. The PMO has appointed a Deputy Director (Sociology) for the purpose of SDAP implementation. The PMO would entrust the Punjab Health Engineering (PHE) Department and contract appropriate NGO, to implement the drinking water supply schemes and deliver the wheat seed distribution program respectively as planned under SDAP. The PMO will establish a grievance redress mechanism under the project. The IPD staff would carry out extra vigilance during the construction period to control water theft in the Thal canal command area during construction in particular around the canal closure period when water is short so that the water shortages at the tail end of the system is not unduly attributed to construction activities at the barrage. An independent monitor will be mobilized to do third-party monitoring and validation of the project implementation activities on a periodic basis. A community representative committee will be set up to monitor community related activities. A consultant from the Bank Team would be visiting the project site on a regular basis at least in first two years of the project.

78. There is no land acquisition expected under the project. However, in case it may be required during construction operations, being a large operation, a Land Acquisition and Resettlement Framework (LARF) has been prepared that would provides the policy basis for compensation and resettlement planning. The LARF is presented in Annex 10.2. The PMO, with assistance of its consultants, would be responsible for preparation and implementation of any such mitigation action plans. Communications Strategy

79. Recent experience in the infrastructure sector in Pakistan has increasingly shown the importance of taking into account the real and perceived concerns of stakeholders. Effective communications between the project agency and its stakeholders helps build trust and collaboration which in turn contributes to better project design and speedy implementation. The success of the project would be improved by a well designed strategy involving all the stakeholders, especially the farming communities in the saline zones, as the inhabitants of these areas are totally dependent on the continuous water supply for irrigation and household purposes. Therefore, a system is put in place for continuous consultation and involvement of stakeholders to ensure a high degree of transparency among all the policy makers, IPD, the farming community and the media. Each of them should be encouraged to provide feedback on the design and implementation processes. The current project is designed on three key principles: involvement of the stakeholders in the design; inclusiveness, participation of all stakeholders to the extent possible in implementation; and consultations and disclosure on canal closure scheduling.

80. The Social and Environmental Unit of the PMO will be responsible for disseminating the detailed project related information, particularly the annual canal closure programs at the grass roots level in the affected areas. The PMO will attempt to the best of its ability to advance information to the farmers of any normal and extended canal closure schedules in order to provide opportunities to take measures against foreseeable losses emerging from interruption of canal water. Both traditional and non-traditional methods shall be employed to convey messages to the stakeholders.

Communications Methods. The following communication methods shall be used:

8 1. Involvement of policy makers. The PMO will initiate a series of direct communication measures to inform and involve the policy makers including the concerned Ministers, MNAs and MPAs. This can be achieved by making presentations and holding briefing sessions on a regular basis. This will be done simultaneously with the mass media campaign that achieves the same objective. They will be invited at a 21 part of public consultation process by showing the transparency of the Project as well as with an objective of garnering public support for the project.

82. Involvement of the local elected bodies, community leaders and NGOs. The local elected representative and Councilors in the union councils have close relationship with the farming community. Information regarding the annual canal closure program will be disseminated through them. Communication will be done through Numberdar villages and the Imam Masjid (Mosque). Majority of farmers are illiterate in the area so for those who can’t read, communication through these means will be used. The Numberdars are always closely related to the farming community on irrigation issues and other disputes. The Imam Masjid (Mosque) in every village is always in touch with all issues of farming community and dissemination of information through loud-speaker would be very effective as most farmers are illiterate. The Project NGO will also disseminate the information about annual canal closure programs to the community through Mass Media campaign.

83. Communication through the Media. The print and electronic media (Newspapers, TV, and Radio) have a vast reach among all potential project partners. They are also the bridge between policy making and the rural masses, informing and modifying the opinions of the people. The project will carry out a Media Analysis to maximize the impact of its media relations. The Analysis would include assessing the reach of different publications, TV and Radio stations among the various target audiences, perceptions among the media on the Project and developing the most efficient and effective media strategy for the project. The project team will carry out intensive media relations and will use press briefings, conferences, news releases and interviews.

84. Involvement of the Irrigation Department. The irrigation department provides services to the farming community through its representatives (Zaildar, Canal Patwaries). Canal Patwari is appointed at 2 to 3 union councils. The issues regarding irrigation water of farming community are initially solved in the presence of these representatives. So it would be very easy to disseminate information about canal closure program to the farming community through irrigation staff timely and effectively.

E. Environment 85. The project involves large-scale construction on the Indus river as well as on the head regulator of the only canal off-taking from the Jinnah Barrage with the possibility of interruption of canal supplies for longer than the routine canal closure period. The project is therefore categorized as Environmental Category “A”. The Bank safeguards policies, therefore, require thorough environmental and social assessment; analysis; development of environmental and social management plans; consultations and disclosure; and their diligent implementation and monitoring. Based on the experience with the Taunsa Barrage Project, a “development assistance” approach instead of a narrowly focused “mitigation and compensation” approach has been used for the project to address the environmental and social issues. Potential environmental and social impacts associated with project design, construction and operation were evaluated. Based on this evaluation, an EMP has been proposed for the Project, designed to mitigate, minimize, and compensate any negative effects and to enhance the ecological benefits of the Project. A summary of EIA and EMP is provided in Annex 10.

86. In the long run, the project would have positive environmental affects by maintaining a proper pool level behind the barrage allowing fisheries and aquatic life and more importantly supply of water to more than 2.1 million acres. With this water supply cropping, forestry and other vegetation is possible. The best estimate of the Indus Dolphin population is about two between the river reach between Jinnah and Chashma Barrages. The proposed rehabilitation works on Jinnah barrage are mainly confined within the river and do not involve construction of any new structure. Major adverse environmental impacts identified are only during the construction period which can be managed with the proper EMP as proposed including borrowed areas management, traffic management during mechanical works, emergency handling and managing facilities (camp, batching plan etc.). The possible risk of interruptions 22 to Thal Canal supplies is also covered under the social section and in particular measures are taken in Mohajir branch which is underlain by saline ground water.

87. Key features of the EMP consist of: mitigation and monitoring plans, monitoring of dolphins around the barrage and construction area, maintaining river flows during construction to a level that would not affect the aquatic life in the river below Jinnah Barrage, communication and documentation, waste disposal plan, traffic management, outline of emergency response and contingency plan, environmental management cost, Environmental Management and Monitoring Plan (EMMP) and contractor’s obligations. The EMP also presents comprehensive institutional arrangements for the implementation, supervision and monitoring of EMP. Training of consultant and contractor staff is also part of the EMP. Independent consultants for M&E would be responsible for supervision of EMP and SDAP. They would also contract the Punjab Wildlife Department for monitoring and management of the Indus Dolphins below Jinnah Barrage and construction area.

88. The construction of Jinnah hydropower project is also underway on the right bank of the river Indus. Overlapping of the construction period of the two projects and also of project facilities is possible. The EMP for the hydropower construction site is assessed to be acceptable. It would be ensured that the construction works of the hydropower project also follow sound environmental practices by implementing project EMP. The M&E consultants would monitor that EMP for the hydropower construction site is implemented according to the acceptable standards and PMO would work with WAPDA to address any issues that may come in future.

F. Safemard Dolicies Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OPBP 4.0 1) [X 1 [I Natural Habitats (OPBP 4.04) [I [XI Pest Management (OP 4.09) 11 [XI Physical Cultural Resources (OPBP 4.1 1) [I [XI Involuntary Resettlement (OP/BP 4.12) [XI [I Indigenous Peoples (OP/BP 4.10) [I [XI Forests (OPBP 4.36) [I [XI Safety of Dams (OPBP 4.37) [XI [I Projects in Disputed Areas (OPBP 7.60): [I [XI Projects on International Waterways (OPBP 7.50) [XI [I

89. Environmental Assessment (EA OP/BP 4.01): The project is rated category A. An ESIA and EMP have been prepared. Details are given in Environment and Social Sections above and in Annex 10.

90. Involuntary Resettlement (OP/BP 4.12): Given the rehabilitation nature, the project is not expected to have any land acquisition or resettlement issues. However, it is a large Project on an operational river and a land acquisition and resettlement policy framework (LAW) is prepared and agreed up front to guide and manage resettlement planning in case any unexpected land acquisition or resettlement need emerges during the project construction period (see Annex 10.2). A Social Development Action Plan (SDAP) has also been prepared to mitigate impacts due to possible canal closure extension and also to maximize project benefits in local development. This is based on broad public consultations in the command areas. The measures include construction and rehabilitation of water supply schemes, free distribution of wheat seeds of early maturity and community facilities. A strategy has been developed to disseminate project implementation status to the public in the command areas. The total cost of the program is estimated at about US$8.9 million.

91. Safety of Dams (OP/BP 4.37). Although barrages are not dams, they are indeed major hydraulic structures on which millions of hectares of irrigated land and population are dependent. The dam safety 23 policy is triggered and an independent panel of experts would review the project implementation and construction. The proposed designs for remedial works have already been reviewed by the panel.

92. International Waterways (OP 7.50). The project area is located on the Indus River which is an international waterway thus automatically triggering the international waterways safeguard under OP 7.50. However, the project essentially involves rehabilitation of existing barrage facilities. It does not involve works and activities that would exceed the original scheme, change its nature, or alter or expand its scope and extent to make it appear a new or different scheme. Therefore given the nature of works envisaged under the proposed project: (a) the project will not adversely affect the quality or quantity of water flows to other riparians; and (b) it will not be adversely affected by other riparians’ water use.

93. The project team has also reviewed Article VI1 of the Indus Waters Treaty of 1960 between India and Pakistan and concluded that a notification by Pakistan to India under paragraph (2) of the said Article VI1 is not required, as the project will not cause interference with the waters of any of the Rivers and will not affect the other riparians materially. Therefore, the Project falls within the exception to the notification requirements of OP 7.50, set forth in paragraph 7(a) of OP 7.50.

Consultations and Disclosure

94. The first draft of the executive summary for environment and social impact assessment (ESIP) including LAW was submitted to the Bank’s Infoshop on November 2,2008. The Executive Summary was circulated to the World Bank Board on December 16, 2009. The summary was translated into Urdu and distributed during the consultation and disclosure sessions. Consultations and discussion with the people have been continuing since the feasibility studies in 2005. They were intensified more during the detailed design stage of Environmental and Social Assessments (ENSAs). The detailed record of consultations including the list, location and contacts of participants is given in the ESIP and SDAP reports. Brief descriptions of the consultations done are also presented. These consultations include the following villages: November 2007 Kacha Arain and Chandana (1 0 participants); February 2008 Jinnah Barrage (6 local fishermen); February 2009 Chianki Shumali (20 participants), Kurar (35 participants), Nali Janaubi (1 5 participants), Noorwana (15 participants), Tilokar Janaubi (12 participants), Rajar (19 participants) and March 2009 NameWali (6 participants). The participants ranged from councillors, farmers, livestock farmers, fishermen, village headmen and other from different sections of the society. In particular for preparation of SDAP, extensive consultations were carried out in 69 villages and in each village, several participants attended. Special attention was given to consultation and discussions with female participants to elicit their views. In 70 villages, more than 700 female participants attended these discussions. The development of the EMP and SDAP has incorporated feedback from the public consultations.

95. After formulation of the reports and EMP, two disclosures were carried out, from September 16- 19 and on October 3, 2009 at the project site. The Punjab EPA held the public hearing meeting in the process of providing no objection to the project and its ESIA and SDAP reports. A large group of people and stakeholders attended the public hearing, including NGOs, women, fishermen, farmers etc. Copies of the ESINSDAP reports were made available to public at the IPD office, Executive Engineer’s Office at Mianwali Colony Daudkhel, District Library of Mianwali and Khushab and at the Punjab EPA, Punjab Public Library, Lahore. Public consultation and participation will continue throughout project implementation. G. Policy Exceptions and Readiness

96. No policy exception is needed for this project.

97. The Project is ready for implementation and to start its first year’s activities. The bidding documents for major civil works contracts have been prepared and are ready to be launched. 24 Annex 1: Country and Sector or Program Background PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-II)

A. Country and sector issues 98. Country Issues and Country Assistance Strategy. After a decade of political instability, macroeconomic crisis, and limited economic and social progress in the 1990s, Pakistan emerged as one of the fastest-growing economies in Asia, with rising per capita income and improved social indicators. Following this period of growth and relative stability, Pakistan is today facing complex challenges, including severe terrorist attacks and concerted military action against militants. The country has also struggled through political upheaval and a near economic collapse. The development context has changed for the Government of Pakistan and its development partners. At present macro- economic performance has deteriorated significantly; inflation has accelerated to double digit levels and the fiscal deficit and current account deficits have widened substantially. The key challenge for Pakistan is to develop resilience to shocks to sustain economic growth and poverty reduction instead of the cycles of growth and stagnation which have prevailed in the past. For this, Pakistan will have to improve its overall macro-economic management, fiscal revenue stream, budgetary management, governance and growth in the commercial and infrastructure sectors.

99. There has been growing demand for better infrastructure in Pakistan. The infrastructure platform needs significant investment in order to support growth and service delivery goals. Infrastructure services including electricity, paved roads, municipal services, and telecommunications currently reach a relatively low proportion of the population. At the same time, improvements in basic infrastructure are critical to improving human development outcomes. Approximately 40 percent of the population lacks access to power and about 75 percent of all rural health, education and market facilities are accessible only by earth tracks. Similarly, water and sanitation services suffer from poor quality and limited availability. The water qualities in rivers, streams, and canals have also been gradually deteriorating leading to public health concerns.

100. The aim of the Pakistan Country Assistance Strategy (CAS) for FYlO-14 is sustained growth recovery and building resilience to shocks. The CAS will be implemented in a period of uncertainty with a focus both on immediate needs dictated, in part, by the ongoing conflict and the return to macroeconomic stability, but also on medium term needs that support growth, service delivery, improved institutional governance, human development and infrastructure investment through existing platforms. The Strategic Objectives are well aligned with the Pakistan Poverty Reduction Strategy Paper I1 and focus on three core areas:

Improved governance and performance of the public sector; Improved human development and reduced vulnerability; and Improved infrastructure to support private sector investment and growth.

101. These Strategic Objectives respond to both the needs of Pakistan and the comparative advantage of the World Bank Group. They build upon existing platforms, particularly in health, education, social protection, and infrastructure. To achieve the third strategic objective, significant investment and continued policy reforms, particularly to address infrastructure deficits, improve competitiveness, and address cross cutting issues such as environmental management and urban planning will be needed. Among other things this requires investments in improved water management for agriculture productivity and growth. During the CAS period, agricultural growth will provide a basic foundation for robust growth. A critical prerequisite will be an efficient and well run irrigation system, particularly in the Sindh and Punjab provinces. While progress has been made, the irrigation and drainage system suffers from deteriorating infrastructure and weak governance. To 25 reduce volatility of growth, Bank support will include rehabilitation of major assets such as barrages and continued capacity development at the regional and federal level for managing water resources.

B. Sector Background and Issues

102. Agriculture is critical: Agriculture is critical: Although the share of agriculture in the economy is decreasing, it is still the backbone of Pakistan’s economy, employing over 50 percent of the labor force (directly or indirectly) and earning 60 percent of the export revenues. The sector contributes about 25 percent of GDP. Most of the poor live in rural areas and tend to be employed mostly as agriculture wage workers. Migration of people from rural areas is a contributing factor for unplanned urban growth and urban poverty.

Waterhigation and Drainage Sector.

103. Pakistan’s agriculture sector is almost wholly dependent on irrigation - irrigated land supplies more than 90 percent of agriculture production. Agriculture in most areas is not possible without irrigation because the climate of Pakistan is arid to semi-arid with low and variable rainfall. Annual rainfall over much of the area is not more than 150 mm per annum with high evaporation rates, ranging from 1,250 mm to 2,800 mm per annum. However, there are abundant surface water resources in the Indus Basin, which cover 566,000 km2 (70 percent of the country). This basin is the major source of water for Pakistan.

104. Indus Basin Water System. Pakistan relies on the largest contiguous water system in the world, namely the Indus Basin Water System (IBWS) for basic food security and supply of water for all sectors of the economy. The IBWS consists of the Indus River and its tributaries, three major multi-purpose storage reservoirs, 19 barrages, 12 inter-river link canals, 43 major irrigation canal commands (covering over 14 million hectares), and over 120,000 watercourses, delivering water to farms and other productive uses. Annual river flows are about 180 billion m3 of which about 120 billion m3 of water is diverted from the river system to canals annually. The total length of the canals is about 60,000 km, with communal watercourses, farm channels and field ditches running another 1.8 million km. These canals also in fact serve as the country’s main waterways. Pakistan would have remained largely a desert without the development of this system of canals, dams and hydraulic structures. This system provides the sole source of water supply supporting life and livelihoods. In addition to providing water for irrigated agriculture, these resources also support the development of major cities, industry, and growth centers. The IBWS is the backbone of the country’s economy. See Table 1.1 for salient features of the Indus Basin and schematic diagram IBRD 37352.

105. Generally, the hierarchical canal system runs from main canals to branch canals to distributariedminors. Open, free-flowing outlets (moghas) regulate water flow from distributary/minors to the watercourses that supply water to chacks or dehs (tertiary irrigation command area). These watercourse commands are a complex miniature irrigation system with an average length of about 20 km. Water is distributed to the field by a weekly time rotation (warabandi) based on the size of the land holding. The canal system is also a major source of recharge for the groundwater aquifers. In fresh groundwater areas, groundwater is pumped by tubewells to supplement canal supplies. Groundwater resources are substantial, with more than 600,000 tubewells in the country contributing significantly to the water supplies in areas underlain by fresh groundwater.

26 C. Irrigation and Drainage Sector Issues.

106. Despite the fundamental role it has in the economy, Irrigation and Drainage (I&D) in’Pakistan faces major issues that are reflective of underlying institutional weaknesses 3 The major institutional issue is a near exclusive control of the irrigation and drainage system by public sector entities, characterized by the usual inefficiencies of centralized bureaucracies, lack of corporate skills and poor client (farmer) focus and accountability.

107. Lack of storage capacity4 and control structures is also a major constraint. Water availability in the IBWS is highly seasonal with 85percent of annual river flows occurring during a 90 to 120 day period (June to September) making storage imperative for the Rubi (winter -November-March) crop season, during which the main staple crop (wheat) is grown and in early Khurif(summer April-October) during which cash crops (such as cotton, rice and sugarcane) are grown. The three major reservoirs (Tarbela, Mangla, Chashma) that were constructed before the 1970’s provide some flexibility in canal operations to meet irrigation water demand but these storages are silting up and are inadequate to meet the needs of the growing population. Since the 1970’s, Pakistan has not been able to make investments to capture and expand additional surface water supplies for irrigation. This reflects an overall underlying weakness of institutions that are not able to capture even a small part of the huge economic returns from irrigation for investments that are necessary to maintain the system for meeting future requirements.

108. Institutional weaknesses manifest in the form of: (i) low surface water delivery efficiency (only about 35-40 percent from the canal head to crop root zone); (ii) water distribution inequities; (iii) wasteful on-farm water use; (iv) water logging and salinity; (v) poor operation and maintenance (O&M) and low cost recovery; and (v) constrained investment climate. In areas underlain by saline groundwater these issues are even more acute. The situation is hrther worsened by unclear land tenure with large numbers of very influential farmers often interfering in the operation of the irrigation system.

(i) Low irrigation delivery and application efficiencies arise from several factors, including deteriorated channels; lack of routine and preventive maintenance; channel erosion & siltation; inadequate control structures, culverts and cattle drinking points; nonstandard outlets for irrigating fields; poorly leveled farms; and inappropriate scheduling of water in canals not reflecting crop water requirements. High water losses not only reduce water availability for crops but also contribute to water logging and salinity on lands underlain by the saline groundwater. With reduced water availability, irrigators at the tail-ends of the system, in particular, are exposed to greater risks of crop failures leaving little incentive for them to invest in non-water inputs. In fresh groundwater areas overall water use efficiency is very high as return flows can be pumped in a timely manner conjunctively with surface water supplies. In particular, in Punjab’s fresh groundwater areas the water used by crops is twice the surface water diverted by the canals.

(ii) Water distribution inequities result from excessive losses in the conveyance system, and unauthorized outlets and illegal pumping from canals. Poorly maintained watercourses and distributary/minor canals have the highest incidence of illegal diversions. DOs from main and branch canals further contribute to inequitable distribution due to withdrawals in excess of authorized discharges. Inherently DOs do not have regulating structures and receive water even during periods of water shortage, when normal outlets receive water by rotation. This accentuates the inequities in water

3Pakistan: Irrigation and Drainage Issues and Options, March 1994, Report No. 1 1884-PAK, Pakistan Water Country Assistance Strategy - Pakistan’s Water Economy Running Dry, 2005. ,4PakistanWater CAS - Pakistan’s Water Economy Running Dry, 2005 Report No. 34081-PK. 27 distribution by concentrating water shortages in the tail reaches of channels, sometimes forcing rotation to the distributaries/minors even when full design discharge is available at the head of the main canal and river. Except for those canal commands where Farmers’ Organization (FOs) have been formed, there are no effective forums for farmers to raise their concerns. Moreover, the excessive role of the government in irrigation management does not encourage meaningful beneficiary participation in system management.

(iii) Wasteful use of water on farms stems from several factors. Firstly, farmers tend to over-irrigate partly because of the wrong notion that higher watering means higher yields, but partly also because they are unsure whether they would get their next irrigation on time. Thus, over watering is often viewed as insurance for the future. Secondly, scheduling of water is inappropriate -- canal deliveries generally bear little relationship with crop water requirements. In the Kharif (summer crop) season, when river supplies are plentiful, the water deliveries in canals often exceed crop requirements. There being few escape structures in the canal system, once water is diverted in a canal, it is delivered to watercourses and to the farms, regardless whether the crops need it or not. This practice results in flooding problems during extreme monsoon storms when water is in surplus in the canal system. Thirdly, inefficient cropping patterns and agronomic practices such as plantation of rice by the Pancho method also promote wasteful water use. Under this method of rice plantation, water is continuously delivered to the fields and allowed to cascade from one field to another, and finally to surface drains. The resulting water use efficiency is extremely low and water logging and salinity problems are exacerbated. Fourthly, poorly leveled fields further promote overuse of irrigation waters. Finally, under-pricing of water and inefficient systems and procedures for assessment and collection of water charges, provide little incentive for improving water use efficiency.

Water logging and salinity. This is primarily an issue in areas underlain by saline groundwater. In these areas, surface water seepage from canals and fields, unlike in fresh groundwater areas, is wasted and cannot be re-used. This results in shallow groundwater levels and consequently water logging. Moreover, with high evaporation rates salts are mobilized from the lower soil profile upwards resulting in severe soil salinity. The high soil salinity in turn requires high application of irrigation water to dilute and leach the salts from the soil profile to make cropping possible. Thus, this vicious cycle of “high irrigation application - high seepage-shallow groundwater levels - water logging and salinity” can only be broken by improving drainage and irrigation management.

(v) Inadequate O&M and low cost recovery. The century-old irrigation and drainage infrastructure is in a state of disrepair and rapid deterioration due to utilization beyond design capacities, tampering of control structures, damage to canal banks caused by human and cattle crossings, and inadequate routine and preventive maintenance. Both the provisions and actual budget releases are inadequate to meet the O&M requirements. Salaries of the overstaffed irrigation department account for over 50% of the total O&M budget. While there is an accumulation of deferred maintenance all over the system, smaller irrigation channels (distributaries and minors) are the most neglected. In many cases, small channels operate without control structures (gates, regulators). Revenues collected from water fees and drainage tax account for less than 20 percent of expenditures on O&M. Tubewells (irrigation and drainage) and staff salaries consume a major part of the O&M budget leaving negligible amount for actual maintenance of the canal system and hydraulic infrastructure.

(vi) Constrained investment climate in the sector. Returns to irrigation are very high in Pakistan. Despite large needs for investments in the I&D sectors to expand the water 28 supplies, improve water management and control and to upgrade and modernize the century old system, the required investments over the last three decades have been insufficient resulting in its continued deterioration. With sector reforms underway the investment capacity will eventually increase, albeit slowly, as systems are developed to capture a part of the economic returns from irrigation for upgrading the system. Meanwhile, the Government has to continue a minimum level of investment in the sector to avoid the total collapse of the irrigation and drainage systems and prevent productive irrigated land turning into deserts or salt fields. The alternative of reclamation would be impossible and require huge investments.

D. Irrigation and Drainage Sector Reform Program

109. After the irrigation and drainage strategy of 1994 there has been a major change in the direction in the sector. The Government adopted a completely new approach to address the irrigation system issues and started an institutional reform program to revamp I&D institutions with the aim of establishing an efficient, self-sustaining I&D system. The Government’s efforts were supported by Bank operations such as the National Drainage Program, the Punjab Groundwater Development Project, the ongoing NWFP and Sindh On-Farm Water Management Projects and the Sindh Water Sector Improvement Project as well as by the projects of other donors. Under these reforms, irrigation service is being decentralized by developing commercially oriented area water boards (AWBs) on a canal command level, while management at the distributary level is transferred to Farmers Organizations (FOs). Autonomous provincial irrigation and drainage authorities have also been established to deliver water to AWBs and to handle off-farm drainage and regulations. 110. Progress on the reform program is slow but steady. The reform program is most advanced in Sindh Province. Sindh has passed an ordinance, namely the Sindh Water Management Ordinance of 2002, providing the underlying legal basis for the new institutions as well as defining their role in the sector. Sindh has also established three AWBs in Nara Canal, Ghotki Canal and the Left Bank covering Akram Wah and Fuleli canals covering about 1.8 million hectares of land or 30% of the irrigated area in Sindh. The FOs have been established on almost all distributary canals in these AWBs. Punjab has also implemented very impressive I&D reform programs that are being scaled up under the ongoing development policy loans (DPLs). In eight canal commands covering about 6.5 million hectares, Punjab has started establishing FOs. Reform programs are slow but underway in Balochistan and North West Frontier Province (NWFP); however they lag behind considerably. 11 1. So far, about 355 FOs have been formed in Sindh of which about 340 FOs are in the three AWBs. Management transfer agreements have been signed with 284 FOs. Punjab has started a reform program in 8 canal commands. About 297 FOs have been established and management has been transferred. As expected, the outcomes of these reforms are mixed with some FOs performing well, some weak and some politicized. There is a need for continued capacity building of these FOs until they can begin to function effectively. Once in place and properly working, user management can then be enhanced to cover upper tiers of the system such as branch and main canals making overall AWB operation more effective. This may take more than a decade. E. Water Country Assistance Strategy - Priorities for the Future

The Pakistan Water CAS (November 2005) established the following priorities for the future.

112. Asset Management and Development. Pakistan has a large endowment of water resources infrastructure, most owned and managed by the provinces, and most quite old. The operational condition of this stock of infrastructure is a major cause of concern. In some instances - such as for the Jinnah, Gudu and Sukkur barrages - the precarious state of these major structures puts the well-being of millions 29 of people at risk. In other instances, the effect is more insidious with the poor condition of canals and pipes and treatment plants not producing the services it should. People have unfortunately had to adapt to unreliable and sub-standard services. 113. For these reasons both the Federal and Provincial authorities should develop a culture and practice of asset rehabilitation and management. This should include emphasis on development of Asset Management Plans, which will include an inventory of existing assets, an evaluation of their condition and the requirements for one-time and regular rehabilitation, and for maintenance. Out of this assessment will emerge a set of short- and medium-term priorities for asset rehabilitation and maintenance. The Asset Management Plans must make explicit the requirements (and trade-offs) for public and user financing, and the importance for developing efficient institutional arrangements for rehabilitating and maintaining infrastructure. 114. Water Resources Management. The development and management of the water resources of Pakistan in general and the Indus Basin is a huge challenge, requiring very high levels of administrative, engineering and scientific capability. There is broad agreement that over recent decades the capacity for modern water resources management at both the Federal and Provincial levels has not evolved rapidly enough to meet the emerging challenges. Accordingly, government will need to give high priority to supporting the development of capacity at the provincial and federal levels. For surface water supplies a major emphasis will be to build on Pakistan’s platform of defined water entitlements, making the administration of these more transparent and accountable, from the inter-provincial to the user levels. For groundwater, capacity for knowledge generation and a policy for (and its implementation) groundwater management will be critical. Bank is providing support to strengthen basin wide water resources management through the Pakistan Water Sector Capacity Building and Advisory Services Project (WCAP). 115. Irrigation Service Delivery. Infrastructure is, of course, not an end in itself, but a means to the end of providing users with better, reliable and sustainable services. In many ways, State water institutions in Pakistan (at both the Federal and Provincial levels) have not made the transition from the era of development and construction to the era where management of resources and services is the primary challenge. The formal service delivery structures for both irrigation and water and sanitation services are exclusively large public enterprises, which operate with little accountability to their users, and with little transparency. The transition away from this old model to modern service delivery architecture should be a major objective. The emphasis will need to be on instruments rather than just on organizational forms. This will mean an emphasis on the development of frameworks which encourage the entry of new players (including community organizations, and the small- and large-scale private sector), the use of contracts which specify the rights and obligations of providers and users and benchmarking for all water services. Major emphasis on the nexus of entitlements, measurements and transparency will be sine quo non. This will mean emphasizing measurement and reporting throughout, and the associated investments in measurement devices, information technology and real-time reporting of what is actually delivered to whom. The Bank is supporting operations in all provinces to help improve irrigation service delivery. 116. On-Farm Productivity. Irrigation services are simply one input into a multi-faceted effort to improve overall agricultural productivity. Many of the elements of this challenge (such as credit, marketing and agricultural research and extension services) need to be addressed as part of the Government’s overall rural and agricultural program. The investment portfolio will need to go beyond delivery of water services, and involve investments in on-farm services (land levelling, watercourse lining - for which a major program is already under implementation-, introduction of new technologies) which are essential for agricultural diversification and for improving the amount of crop, income and jobs produced per drop of water. Bank is supporting this through the ongoing On-Farm Water Management projects and plans to scale up with an irrigation operation with linkages to improved agricultural practices and improve currently weak market linkages.

30 F. Barrages are Strategic Assets. 117. The barrages are used to raise the water level in the river so that water can be diverted to the main canals by gravity. They also are used to divert water to river link canals as the whole system is interlinked (see schematic diagram of the IBWS in Figure 1.1). Therefore, operation of a barrage has a far reaching impact in the system often covering millions of acres locally as well as several hundreds of miles away. The barrages are classic “public goods”, and as strategic assets would remain under public management even after the transformation of the irrigation system under the proposed reform program. They are used for river control and flood management and are a source of water supply for all sectors of the economy. The barrages also provide links for the road networks working as bridges over rivers and are used for utility crossings such as gas pipelines. For example, the Jinnah barrage provides a bridge over the Indus River to link the roads between the NWFP and Punjab provinces. Deterioration of barrages cannot be afforded as even partial failure would be disastrous for all productive sectors, the environment and social stability in large areas.

118. Even though the irrigation and drainage sector of the province is generally short on O&M funds, barrages are generally provided adequate hnds for O&M as they are large strategic assets. A lack of budget typically impacts the smaller channels at the tail end of the system the most. Many of the barrages built 50 to 100 years ago are in need of rehabilitation today. Most of the problems identified stem from design and construction defects, as building barrages on an alluvial river was a new experience at that time of construction, as well as simply aging and changes in hydrological conditions. Some of them require urgent remedial measures to avoid full or partial failure that could have disastrous consequences due to interruption in water supplies for millions of acres of irrigated land.

G. RehabilitationhVIodernization Jinnah Barrage 119. Failure of a regulator structure in 1998 on the Balloki Sulemanki (B-S) Link Canal was alarming for the country. The B-S Link canal transfers water from the western rivers (Jehlum and Chenab) to the eastern most Sutlej River (whose barrages were put in place in India after the 1960 Indus Treaty). Thus failure of the regulating structure on the B-S link affected water supplies to over 2 million acres of land. After this event, the Government of Punjab (Gopunjab) engaged consultants in June 1998 to assess the condition of all vital hydraulic structures in the system to evaluate their safety. The consultants and the Government’s evaluation team recommended rehabilitation and modernization of six barragesheadworks in the order of priority: (i) Taunsa on Indus River; (ii) Jinnah on Indus River; (iii) Islam on Sutlej River; (iv) Balloki on Ravi River; (v) Khanki on Chenab River; (vi) Sulemanki on Sutlej River. Accordingly, the GoPunjab embarked upon a program of rehabilitation and modernization of these six barragesheadworks during the period of 2003-2005, engaging groups of consultants to carry out feasibility studies for the rehabilitation of Taunsa, Jinnah, Islam and Balloki barrages. Since then two other barrages, Sidhnai Barrage on the Ravi River and Trimmu Barrage on the Chenab River have been added to the list to be rehabilitated and modernized. The feasibility studies and detailed designs for improvement of Sulemanki, Sidhnai, and Trimmu Barrages are underway through ADB funding.

120. GoPunjab has already completed the rehabilitation and modernization of Taunsa Barrage in 2009 under a World Bank loan. Balloki and Sulemanki barrages are being rehabilitated under the ADB Program and Khanki Barrage with assistance of the federal government. Jinnah Barrage on the Indus River is now the highest priority, improvement of which would be undertaken under this Project. The feasibility studies for the Jinnah Barrage were carried out in 2005 followed by the detailed design and bidding documents preparation under the ongoing Taunsa Barrage Project Loan.

12 1. There are three other barrages located on the Indus River in Sindh Province, downstream of the Jinnah Barrage. Improvements were done to the Kotri Barrage, the last on the Indus River, in 2000. The Sukker Barrage the second to last barrage on the Indus River is one of the oldest and serves some seven canals. Though it has several safety issues some repairs were carried out recently on an emergency basis. The Gudu Barrage also has some safety issues. The Sindh Water Sector Improvement Project (WSIP) has 31 provisions for an overall assessment of the Sukker Barrage including necessary feasibility studies. Moreover, the design of improvement works for Gudu Barrage was initiated under the WSIP. Thus, resources are not needed under this project for these purposes.

122. Climate Change Considerations. Impacts of global climate change, including changes in glacial melt and the characteristics of floods and droughts, on the IBWS needs to be carefully considered for such a Project. Climate change studies and its impact on the upper catchment of the Indus River are included in the ongoing Water Sector Capacity Building Project (WCAP). With the possibility of higher future flows due to climate change and increased retrogression, Project interventions are even more vital to ensure the safety of the barrage. Hydrological analysis has been carried out as part of the preparation of the project. Based on this analysis, the design flood for the Jinnah Barrage (Flood with a 100 year return period) still remains at 950,000 cubic feet per second (cusecs). The highest flood recorded is about 861,965 cusecs on August 2, 1976, prior to when Tarbela was fully functional. That is, the Barrage can handle about 1.1 million cusecs which is equal to a flood with a 600 year return period. Moreover, with the construction of a 96 MW plant on the right side, the Barrage will have capacity to pass an additional 100,000 cusecs. Thus, higher future flows will not necessarily mean that the barrage will fail or not perform. Rather, in practice such unlikely flows will be bypassed from the barrage resulting in flooding of the area along the banks of the barrage. Generally there is a designed breaching section in the afflux bunds of the barrages which is used in the case of such extreme events. For extreme events (such as the one in 600-year event) this is the most practical and optimal approach. Finally, there is a dam upstream from the Barrage (Tarbela dam) which could be used for re-regulating the flows. In addition, the natural gorge of Attock above the Barrage and below Tarbela Dam is a natural control for the regulation of extremely high flows. Thus the safety of the barrages is not likely to be jeopardized due to possible higher floods under future climate change scenarios.

32 Table 1.1: Indus Basin Water System Main Features (Rivers, Barrages, Canals, Link Canal, Reservoirs)

River

Indus

Jehlum

Chenab

.. (Direct) Lower Chenab (LC)- Jhang 1.168 3.135 Lower Chenab (LC)-Gugera 1.866 7.425 Qadirabad Qadirabad Ballokflavi 15.000 (PI LC FeederLC hang 4.100 I andGugera Trimmu (P) Rangpur 0.344 2.700 Haveli 0.179 5.170 ’ In addition to the above additional canals are under construction and would be comdetintz soon. (i) Greater Thal Canal (10,500 cfs capacity) taking water from RD 180+222 of Chasm;-Jehlim Link with command area of 1.560 Ma in Punjab; (ii) Kachhi Canal (5,300 cfs) off-taking from Taunsa Barrage with command area of 0.550 Ma in Balochistan; and (iii) the capacity of Raine Canal off-taking from Guddu Barrage is planned to be increased to 10,000 cfs.

Also discharge capacity of LBDC canal from Balloki Barrage is behg increased to 9,780 cfs.

The Indus System has four major storage reservoirs Tarbela and Chasma on Indus with current live storage capacity of 5.96 and 0.275 MAF respectively; Mangla on Jehlum which has been recently raised with live storage capacity of 7.15, MAF and Chotiari Reservoir with live storage capacity of 1.1 MAF fed from Nara canal off-taking from the Sukkher Barrage.

Location of barrage is indicated as (P) in Punjab, (S) in Sindh, (N) in NWFP. Pat and Desert Feeder canals from Gudu barrage and Kirther Branch from Northwest canal from Sukkur Barrage supply water to Balochistan. IBWS commend area in Punjab is 22.19 Ma; Sindh 13.38 Ma, NWFP 0.99 Ma and Balochistan 1.36 MA

34 Annex 2: Major Related Projects Financed by the Bank and/or other Agencies PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (€‘BE-n)

Project Latest Supervision (PSR) I .lings Bank-financed Implementation Development Progress (IP) Objective (DO) Barrage Rehabilitation and Taunsa Barrage Emergency S S Modernization Project Rehabilitation and Modernization Proiect Improving efficiency o f On-Farm Water Management S water use and capital cost Project, I, 11,111, Command recovery Water Management

Rehabilitation of irrigation Irrigation System and drainage systems and Rehabiltation Project I and I1 improvements in O&M Rationalization of public Fordwah Eastern Sadiqia expenditures on O&M and (South) Project copnunity participation in irrigation management. Punjab Ground Water Development Project System improvements, Left Bank Outfall Drain institutional changes, cost Project recovery, drainage system development, and community development

Community participation, Balochistan Community improvements in irrigation Minor Irrigation Project facilities and O&M

Institutional reforms, control National Drainage o f Water logging and Program 1/ salinity, improved water management Improving efficiency of NWFP On-Farm S S water use and deepening of Management Project the Reform Program Sindh On-Farm Management S S Project

Sindh Water Sector U MS Improvement Project Other development agencies Improving efficiency of ADB and OECF supported 35 irrigation-systems, reform OFWM, Saudi Fund, DFID program, community Co-financed Projects in participation, cost recovery Sindh. etc.

36 ANNEX 3: RESULTS FRAMEWORK AND MONITORING

PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-11) Results Framework

Project Development Objective Project Outcome Indicators Use of Project Outcome (PDO) Information (i) rehabilitating and (i) Barrage able to supply reliable and Monitor progress of project modernizing Jinnah Barrage and uninterrupted water for over 2.1 million implementation and impact in carrying out of affiliated works; acres of farmland benefitting about 600,000 achieving project objectives. and (ii) build IPD’s capacity in farm families for irrigation and domestic Water distribution to various improved water resources and water users. canal systems. Monitoring and irrigation system management. -safe passage of floods without extensive evaluation reports, historic and damages to the barrage infrastructure future and discharge data. -Efficient operation of the gates

(ii) IPD’s increased functional capacity to manage waterhigation system using in the province using modem tools. Intermediate Outcomes Output Indicators Use of Intermediate Results Monitoring Component A. Rehabilitation Component A. Component A. of Jinnah Barrages (US%111 Evidence* of timely and satisfactory Million). progress toward delivery of Component A Monitor progress of project outputs, as compared to the original plan, implementation and impact in achieving project objectives. including specific indicators as listed below: - No reduction in supply of water to the users. - Safe passage of floods. - Proper functioning of energy dissipation system to halt excessive retrogression without causing scour. - Efficient working of gates and hoisting systems. - the implementation of social and environmental management plans and least interruption to water supplies during construction. -no major failure during construction to the temporary works such as cofferdams - better construction supervision and support for the project’s preparation and implementation.

Component B. Component B. Component B. Improvement and Evidence* of timely and satisfactory Monitor progress of project modernization of the irrigation progress toward delivery of Component B implementation and impact in xhieving project objectives. and water management system outputs, as compared to the original plan, (US15Million). including specific indicators as listed below: (i) improved capacity to manager waterhrigation system - deployment of databases, modern tools and equipment

37 - management information systems to improve planning and operation of irrigation systems - deployment of measurement instruments for flows, river cross-sections and velocities. (ii) Preparation of future irrigation and water distribution improvement projects. Output indicators are the actual development of feasibility studies and preparation of design for projects. Component C. Component C. Component C. Monitoring and Evaluation of Evidence* of timely and satisfactory Monitor progress of project the Project Impact and Social progress toward delivery of Component C implementation and impact in and Environmental outputs, as compared to the original plan, achieving project objectives. Management Plans (US$3.0 including specific indicators as listed Mi 11ion below: - Baseline levels of monitoring indicators at sample and control areas. -identification of problems in project implementation in a timely manner -proper implantation of EMP and SDAP. Component D: Project Component D. Component D. Management Coordination Evidence* of timely and satisfactory Monitor Project implementation Technical Assistance and progress toward delivery of Component D and progress and take action and Training (US$7.0 Million). outputs, as compared to the original plan, make adjustments to consultancy including specific indicators as listed contracts to deliver expected below: outputs. - Project implementation in coherent manner with outputs as scheduled. -proper implementation of construction work, procurement, contact management without major accidents or mishaps and interruption to water supplies during construction. - Consultants start functioning, design project works, supervise them and start monitoring and evaluation and outputs are delivered in a timely manner of expected quality. * Via reports from independent tec nical and social audit teams that visit the fielc review available self-reporting data, inGrview stakeholders, and judge the results.

38 E

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6 0a\ cv 0 e N 1 i: t v)B t 8;1 WIN

IB 1 1 QQI (Am2; CnN (AN2; 0 d ANNEX 4: DETAILED PROJECT DESCRIPTION PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-II)

Background

123. Key Features of Jinnah Barrage. Jinnah Barrage is located on the Indus River and it is the first diversion structure on the river as it enters the plains of Punjab. Constructed in 1943, the project is situated about 126 miles (203 km) downstream of Tarbela Dam and 16 miles (26 km) downstream of the proposed Kalabagh Dam. The Indus River rises in Tibet at an altitude of 22,028 feet above sea level and traverses a length of 1800 miles. It has five major tributaries - Jhelum, Chenab, Ravi, Beas, and Sutlej. Under the Indus Basin Treaty of 1960, Pakistan has the right to use the flows of Indus, Jehlum and Chenab and India has the right to use flows of Ravi, Beas and Sutlej.

124. Jinnah is one of the most important structures in Pakistan?s irrigation system, handling all of the Indus river water. Although it has a design discharge capacity of 950,000 cubic feet per second (cfs) corresponding to a 100 year return flood, it is able to handle 1.1 million cusecs, corresponding to a 600 year return flood. There is only one off-take canal - the Thal Canal that supports agriculture on 2.1 million acres of land. The command areas lie in the Mianwali, Khushab, Bhakkar, Layyah, and Muzaffargarh districts of Punjab. These districts are situated in the Thal (desert), an arid zone where crop production without irrigation would only be able to support subsistence living. About 5 million people in 5 districts inhabit the command area and their livelihoods depend directly or indirectly on the irrigation supplies of the canal. Roughly 695,000 farm families derive their livelihoods directly from the irrigation supplies of the canal. The canal also recharges the aquifers from which water is pumped to meet water requirements during critical periods. The canal water is also used for drinking, cattle consumption, and domestic uses in the entire command area. On 120,421 acres in the Mohajar Branch canal command, the canal is the lifeline where groundwater sources are saline and a population of nearly 328,000 people in 94 villages are totally dependent on the canal water for drinking and crop production.

125. The barrage is 3781 feet long (1,153 meters). The main weir of Jinnah Barrage consists of 42 gated bays, each 60 feet wide with manually-operated gates. It has under sluices on the left and right ends of the weir, each consisting of 7 bays of 60 feet each. The under sluices are used to flush out sediment. About 381 feet and 350 feet long divide walls on the upstream and downstream sides respectively divide the weir and under sluices sections of the barrage on the left and the right side. There are two fish ladders and a 20 feet wide navigation lock. The barrage has a silt excluder in the two bays on the left under sluices. The Thal Canal Head Regulator is located on the left bank. The flow of the Indus River is guided by two downstream and upstream guide banks, upstream marginal embankments on both sides, and two flank walls (abutments) on the left and the right flanks. WAPDA is currently constructing a 96 MW Jinnah Hydropower Project on the right bank of the barrage. The project has 8 large scale pit type tubular Kaplan turbines (12 MW each), drawing water from the right bank diversion headrace canal. The barrage plan view is given in Figures 4.1 and 4.2.

126. Thal Canal Regulators. The Thal Canal regulators have 7 gates, each 24 feet wide. There are the same number of gates of similar size at the regulator at RD 2+300 of the Thal Canal, while there are 10 gates at different locations and silt ejectors at four locations. Substantial rehabilitation work on the Thal Canal regulator and regulators at RD 2+300 had already been done when Thal Canal was remodeled recently to increase its capacity to 10,000 cusecs. Some winches, hoisting equipment and other ancillary equipment, etc. may be required which would be provided under the project.

127. Problems of Jinnah Barrage. Commissioned in 1946, the barrage continued to provide services without any major problems until 1990, when 11 gates malfunctioned. In 2001, during very low flows, the barrage engineers noted significant damage to the friction blocks and the concrete floor of the barrage and emergency repair works were carried out. Also the river approach to the barrages is at an angle 41 coming from the right bank which is causing parallel flow to the barrage resulting in bad hydraulics and the formation of sediment bar in the middle of the approach. A significant number of pressure pipes do not function. The barrage is now in a dilapidated condition and is threatened by further damage from retrogression of the river and requires urgent rehabilitation and modernization. The following problems need to be addressed at Jinnah Barrage: (i) the hydraulic jump must form on the glacis, so that the un- dissipated energy does not cause abnormal scouring of the downstream river bed and damage the floor; (ii) all gates must be repaired and automated; (iii) the pressure pipes under the concrete floor must be rehabilitated to ensure the release of pressure under the floor. If these problems are not addressed, there is a grave danger that a 100 year flood could lead to colossal damage or collapse of a major section of the barrage and the supply of water to the Thal canal and the Jinnah Hydropower Project would cease.

128. Approach to Address the Problems. The approach to address the problems of the barrage have been designed carefully and tested on the physical model studies. The approach has been tested already on Taunsa Barrage and worked very well in real life on the same river. This consists of the construction of a subsidiary weir downstream of the barrage to prevent further retrogression and help better dissipate the energy. The weir would be constructed symmetrically to the barrage, keeping the crest level of the weir in front of the main barrage weir at RL 676 (barrage crest level is higher than the crest level of under sluices) and lower (RL 675) in front of the right and left sluices. In order to avoid undesirable turbulence due to different velocities of the two flows passing through the main weir and the under sluice gates, the downstream divide walls would be extended up to the subsidiary weir. Three feet wide vertical slots would be left in the weir in front of the sluice gates to flush the sediment deposition behind the weir. On the upstream side, an inverted hockey spur would be constructed at appropriate location and with a geometry that would help improve the oblique river approach to the barrage. The moving parts of the gates would be rehabilitated and/or replaced and the gates would be motorized and automated. The barrages instrumentation and monitoring systems would also be rehabilitated and improved.

129. Improving Waterhrigation Management in Punjab. Punjab Province covers the major part of the IBWS (about 60 percent of command area of the system). Water allocation and management in various parts of the system is still carried out using hand calculations, including estimation of demands and the pattern of releases from the reservoirs. Moreover, there is no well established and integrated system of water accounting in various parts of the system i.e. at barrages, rivers, link canals, maidbranch canals, and distributaries etc. Instrumentation used for measuring water, sediments, and cross sections of the river and canals are outdated and could use modernizing. In many cases, hand held gauges remain in use. Punjab needs to modernize its water allocation and management system and water accounting system with modern simulation and optimization models and decision support systems. The accounting system being initiated by the Program Monitoring and Implementation Unit (PMIU) needs further updating and development. The second part of the project (Component B) will help modernize water management in Punjab’s irrigation system by providing new techniques, tools, equipment and training.

Project Description

130. The project consists of four major components. Component A is designed to specifically address the problems of Jinnah Barrage, while component B is aimed at building capacity and modernizing the water resources and irrigation management in Punjab and prepare future investment project in the province. Component C is for proper monitoring of project implementation, supervision of the EMP and implementation and project impact. Component D is related to supporting project implementation technical assistance and training. The project components are described below: Component A: Rehabilitation and Modernization of Jinnah Barrage (US$lll.O Million).

131. This component supports rehabilitation and modernization of Jinnah Barrage; the implementation of social and environmental management plans; and construction supervision and support for the project’s preparation and implementation. The necessary works comprise four sub-components: 42 132. Sub-Component A1 and A2: Rehabilitation Works of Jinnah Barrage (US$94.0 Million. The rehabilitation measures to make the barrage safe would consist of the following civil works (sub- component AI): (a) construction of a subsidiary weir 600 ft downstream from the centreline of the crest of the existing barrage across the main barrage weir at the level of RL 676 to address retrogression and ineffective energy dissipation problems with all its components downstream; (b) in the right and left sluices construction of subsidiary weir 600 feet downstream with a crest level of RL 675 with 3 feet vertical slots (about 25% of under sluices width to flush out the sediments; (c) extension of the downstream divide walls; (d) extension of downstream guide walls; (e) graded filter behind the existing downstream guide banks; (f) construction of fish ladders and navigation lock through the subsidiary weir; (g) repairs to friction block and the concrete floor; (h) replenishment of deficient apron downstream of the existing barrage; (i) coffer dams on the downstream and upstream sides of the gates to allow carrying our construction of subsidiary weir 6) repairs and renovation of piezometers for uplift pressure monitoring system; (1) construction of small coffer dams for replenishing apron and construction ofjetty; (m) construction of inverted hockey spur upstream to improve the river approach to the barrage; and (n) rehabilitation and up-gradation of building and infrastructure at Jinnah Barrage;

133. The mechanical and electrical works are likely to include (Sub-component A2): (a) Rehabilitation of gates and hoisting machinery; (b) Replacement of roller and rocker assemblies; (c) Automation system for operation of gates; (d) construction of jetty for bulk head gates; (e) Installation of bulk head guides at piers, abutments and walls for bulk head gates; (f) Upgrading and automation of barrage monitoring and operation facilities. 134. Sub-component A3. Implementation of Social and Environmental Management Plans (US$9 Million). As the project involves large-scale construction on the Indus River and irrigation systems and the possibility of interruption of canal supplies for a short or long duration, the project is categorized as Environmental Category “A”, requiring thorough environmental and social assessment, analysis, development of social impact and environmental management plans, consultations and disclosure, and their diligent implementation and monitoring. Based on the experience with the Taunsa Barrage Project, a “development assistance” approach instead of a narrowly focused “mitigation and compensation’’ approach has been adopted for the project to address the likely social and environmental issues.

135. Although the construction activities are being planned in a manner to ensure no unusual interruption in the water supply to the canals, there is a risk of an interruption due to emergency situations, such as breaching of a cofferdam. This may impact communities on a substantial tract of land served by the canals, particularly the Thal Canal (Mohajir Branch) which is underlain by saline groundwater and where the local population (e.g. left side of the Muhajir branch) typically rely on the canal water for drinking and domestic uses.

136. In order to plan for any possible interruption of water supplies during the construction period (details of which are provided in the technical section of this PAD and Annex 4.1) and deal with other environmental issues, a Social Development Action Plan (SDAP) and the Environmental Management Plan (EMP) have been developed based on detailed surveys, social and environmental studies, and broad consultations with local communities in the command areas and areas around the barrage. This sub- 43 component will support the implementation of the SDAP and EMP. The SDAP involves distribution of improved seed, water supply schemes, community wells and hand pumps, extension services, development initiatives at the barrage area including establishment of a public park, primary school for girls, and a basic health unit etc. The component will also support implementation of an information dissemination and communication program, particularly regarding possible canal closure extension and implementation of the SDAP program. The EMP involves monitoring and training, tree plantation, emergency response plan, water supply and wastewater disposal arrangements, and environmental audits during construction period. Details for these plans are given in Annex 10.

137. Sub-component A4 Construction Supervision, Preparation and Implementation Support (US$S.O Million). This component will cover the cost of consulting and other services for implementation of the project, including construction supervision and project management support. It will also cover implementation of all activities under the project: procurement, contract administration, quality control, certification of payments, financial management, preparation of any additional designs, and bidding documents, etc.

138. Component B Improvement and modernization of the irrigation and water management system (US$15 Million). This component consists of: B1 Improvements in irrigation and water management systems, and B2 Preparation of future irrigation and water distribution improvement projects. B1 is further divided into B1.1 Management of information system, monitoring and decision support system and B 1.2 Modernization of water management equipment and facilities.

139. Component B1 Improvements in Irrigation and Water Management (US$9 Million). The purpose of this component is to advance the improvements in irrigation and water management initiated by the Program Monitoring and Implementation Unit (PMIU) and to provide equipment and facilities to modernize further irrigation and water management planning.

140. It will include further upgrading and modernization of the PMIU systems. This includes the development and use of modem databases; GIS Systems; models; decision support systems; and management information systems for improving planning and operation of the complex irrigation system of Punjab. This will also include forecasting; planning; and operational tools for seasonal and 10-day (as needed) planning forecasts; and demand management systems with client interfaces. These tools will aid in irrigation planning and link with the reservoir operation decisions of the Indus System River Authority (IRSA). A system of water measurements, accounting and transmission will be introduced at key locations in the river and link canal system and the main and branch canals. A data communication network will be installed to gather information to be sent to central locations and the IPD headquarters.

141. The database and management information system will be upgraded to collect, store and disseminate flow data and other relevant information to help system wide water management. Modem controllmanagement rooms for operation and management of the provincial canal system will also be established. The component will provide technical assistance; training and equipment including hardware and software; latest discharge measurement equipment; echo-sounders with geo-positioning system for taking cross- sections of the rivers and canals; and modem equipment for measuring flow velocities etc.

142. Component B2: Preparation of Future Projects (US$6 Million). This will include feasibility studies and preparation of designs for future projects for further improvement of irrigation and water management in the province identified during the project implementation period.

143. Component C: Monitoring and Evaluation of the Project Impact and Social and Environmental Management Plans (US$3.0 Million). The monitoring and evaluation (M&E) activities would provide continuous feedback to the Government of Punjab (GOPunjab), Government of Pakistan (GOP), Project Steering Committee (PSC), the World Bank and implementing agencies on the project’s performance and impact of its various components, so that corrective actions could be undertaken in a 44 timely manner. The monitoring will be carried out by M&E consultants. They will also supervise implementation of the overall socialhesettlement and environmental management plans and provide independent monitoring of various activities, assess positive and negative impacts and propose alternatives to address any long-term or, during construction, social and environmental issues.

144. The M&E activities are likely to cover, but are not limited to: (i) the impact of the project during and after completion on the communities at various levels; (ii) impact on various productive activities, including crops, livestock, fisheries, trade and industry, domestic and municipal water uses, health and environment; (iii) environmental impact of construction activities in the project area. particularly on any ecologically important sites; (iv) any acquisition of public and private land and assets, agreements reached and arrangements made for acquisition of assets; (v) socio-economic impacts and the impact on the level of employment, livelihood and household incomes in the project area; (vi) estimation of the project’s overall benefits and economic rate of returns etc. M&E will be carried out by collecting actual data through structured surveys, field measurements, and community interaction including a variety of focus groups. Modern technology such as satellite imagery and GIS systems may also be used to support M&E and to help the PMO prepare mid-term and project completion reports. This consultancy will also help to reinforce transparency and governance in the project.

145. Component D: Project Management Coordination Technical Assistance and Training (US$7.0 Million). This component will support the Government in implementing the project by coordinating all project related activities. It will include support for: (i) the operation of the PMO including procurement and tendering of contracts, contract management, implementation of social and environmental management plan, managing operation of the site, river and irrigation systems, communication strategy, liaison with stakeholders, civil administration, Punjab and Federal Government and the World Bank etc; (ii) building the capacity of the PMO to transition to a Barrages Management Organization (BMO); (iii) technical assistance and training in such areas as hydraulics; detailed designs; contract administration and construction supervision; procurement; operations and management planning; asset management plans; financial management; legal issues; irrigation and drainage ; and water resources development; (iv) an independent panel of experts for design and construction quality and safety enhancement or any other issues that may have to be addressed during project implementation; and (v) strategic studies and pilot projects that may be identified during the project implementation, such as studies for improving water management in the region; monitoring of key hydraulic infrastructure in the province; technical assistance; training; post-graduate degrees, seminars, workshops, and study tours, etc. This will also involve financing of incremental staff salaries, operating expenditures, consulting services, equipment and software.

45

Y

*3 0 Annex 4.1 Construction Planning and Operation of the System during Construction Pakistan: Punjab Barrages Improvement Phase-I1 Project (PBIP-11)

Operation of the River and Irrigation System during Construction

146. Meeting Demand for Water Downstream of the Barrage. Water flows downstream of the barrage cannot be interrupted during construction as these supply water for almost the whole IBWS, covering Punjab, Sindh and Balochistan. Construction is to be done in a manner so that flows to the Thal Canal (off-taking from the Jinnah Barrage) are not compromised and face minimum disruption. For this purpose, the PMO and. the Design Consultants have carried out hydrological analysis to determine the river flows requiredobserved for systems downstream from the Jinnah Barrage as well as for the Thal Canal. Data from 1998-2007 on a 10-day basis was used for carrying out this analysis. IBWS operation is carried out on a IO-day time period. The flows passing through the barrage for meeting downstream requirements are given in the table and graph below for the duration of the year during which construction activities would be carried out. Discharges downstream Jinnah Barrage

I Months I Minimum I Maximum I Average I Adopted 1

Discharge DfS of Jinnah Barrage

3 03.3 30 250.a0.3 208,033 s-.""-""--.- ---I- !...... I5Q,000 105.30cI ...... 53,530 --

1 d" *"A Jan Feb Mar Apr fday June Nov Dec Month

147. Based on this analysis a decision has been taken to design the cofferdams (called temporary works) to allow a discharge of 250,000 cusecs downstream. The crest levels of the cofferdams upstream and downstream are determined based on this discharge and would be set at RL 700 and 685 feet respectively and the strength of the cofferdams would be designed accordingly. This discharge can easily 48 pass through 45% of the available width of the barrage; hence, the sequence of construction and repairs to the gates is determined accordingly.

148. Flow to the Thal Canal during the construction period. The Thal Canal is a perennial canal i.e. it draws water for both seasons of the year, winter (Rabi) and summer (Kharif). As the winter supplies to the canal and to the river are lower than the summer, the construction would be concentrated during the winter months. Accordingly, winter flows are analysed here. The official and regular canal closure for Thal canal is three weeks, during which no water is supplied to the canal and inspection and maintenance of the key structures is carried out. This closure is generally scheduled during the winter season in the month of January. However, its timing varies from the year to year depending upon the forecast of availability in the river system and the other canals in the system. The closure period rotates amongst these various main canals of the province i.e. all canals are not closed at the same time. For example if in a given year river supplies are very low during the last ten days of December the canal is closed in that period, and if supplies are good in January (and other canals are closed) the closure may be delayed to the first 10 days of February etc. However, the canal is closed for at least three weeks in a year. The table below gives flow patterns to the Thal canal during the winter months - the original analysis is carried out on 10-daily basis and summarized by month.

Flow to the Thal Canal over 10 year period. I Months I Minimum I Maximum 1 Average I (Discharge in cusecs) January 349 I 2,416 I 1,466 Februarv 01 5.851 I 2.918 March 27 1 7,436 4,042 April 1,428 7,740 5,309 I Mav I 4.011 I 8.103 I 6.812 I June 5,388 8,274 7,265 November 3,008 7,622 5,402 I December I 4.632 I 7.506 I 6.151 I

149. Based on this analysis, and in view of the capacity of the Mohajir Branch of the Thal Canal, the command area of which is underlain with saline groundwater, it has been determined that the capacity of the standby feeder canal should be about 1,500 cusecs. The feeder canal can be used to meet critical needs in case there are any delays in completing construction by a few days beyond the normal closure period of three weeks. Construction Planning and Sequencing of Works

150. The construction is planned to be completed in four calendar years (also now called contract years) and three construction years. The construction works will focus from October to May/June while the period between June and September when the river flows are highest will be used for preparation for the following construction year. The contract has to be awarded in a manner such that the contractor is mobilized in May i.e. before the first year of construction (October to June). In the first year, construction would be carried out on the right side of the barrage covering gates 27 to 56 (barrage has 56 gates and they are numbered 1 to 56 starting from the left to the right bank). The coffer dams would be constructed in winter to secure, cordon and de-water the construction area. The construction would be completed in this section by May of the following year and the coffer dams would be dismantled by end May early June to allow summer flows to pass. The same cycle would be followed on the left side during the winter of the second year till the summer of the third year. In the winter of the third year, gate Number 1 of the barrage which is close to the Thal Canal would be rehabilitated during the normal canal closure period of three weeks. More detailed sequencing is described below and given in Table 4.1 and Table 4.2

49 15 1. First Phase. This phase covers the activities over the first year of construction and half of the contracthalendar year. The layout of the barrage and coffer dams to be constructed is shown in Figure 4.1. The first phase would start in May of the first year by which time the contractor should be mobilized and should start preparing for construction during the winter months after the summer flows have subsided. The figure shows a loop of coffer dams on the right side of the barrage (covering gates 27-56) on the downstream side of the barrage which is marked “A”. Construction of the lower limb of the coffer dam “A” would start by mid October of the first year. The construction would start in running water, with discharges not higher than 100,000 cusecs and water levels low enough (varying between RL 673 to RL 681) to start the construction of the coffer dam. The construction would then continue to the upper limb of the coffer dam “A”. The coffer dam “A” would be completed by the end of November of the first year. The top level of the cofferdams would be set at RL 685 thus allowing flow of about 250,000 cusecs with adequate safety. The construction on the subsidiary weir would start from December of the first year and it would be completed by the end of May of the first year of construction. The works related to divide walls, fish ladders, guide bank and navigation channel walls, repairs to floor, impact blocks, friction blocks, replenishment of downstream stone apron, etc. would be completed during this time between December to May of the first year of construction.

152. During January of the first year of construction (or second year for start of the contract), around the Thal Canal, the construction would start on coffer dam “B” on the upstream side of the barrage (about 500 feet above the barrage centre line and with crest at RL 700). The construction of the cofferdam “B” would be completed by the end of February. The coffer dam “C” would be constructed at the same time as “B” to close the loop between coffer dams “A” and “B”. Works on the upstream side of the barrage would then be carried out between March to May of the first year of construction (or second year of contract). This includes fish ladders, guide banks and navigation channel etc.

153. The rehabilitation of the gates would also start from March of the first year of construction (or second year of the contract), and priority would be to install guides for the bulk head gates (currently guides for the bulk head gates do not exist in the barrage), replacement of sill beams, and replacement of guides for the gates. It would be ensured that guides for the bulk head gates would be installed on all bays 29-56 by the end of May. Any remaining work to repair gates would then be carried out using the bulk head gates in the low flow period of the second year of construction (November - February) and with that a cofferdam would not be required.

154. During the normal canal closure of January of the first year of construction, rehabilitation of gate number 3 of the barrage i.e. third gate from the left side would be carried out by constructing two small coffer dams D and E. The coffer dam D would be constructed in January during canal closure period and removed after canal closure period is over. The coffer dam E would be constructed from February 15-28 and removed after May 31. The Thal Canal regulators, that may need some work, would also be rehabilitated during this time and any remaining works would be done in the second canal closure period.

155. If for some reason, the contractor is not able to complete all works on the.right side, scheduling would be done in such a manner that all works are completed first and with the divide wall and fish pass and navigation walls completed up to RL682 by end May of the first year. The remaining works on these walls can be completed in November-February of the following year when water levels are lower.

156. Coffer dams “A” and “B” would be dismantled in early June to allow passage of flood flows. The coffer dam “C” would be protected with pitching and apron, and mole head fortification would be provided at the ends of the coffer dam. This part of the coffer dam would be used in the following construction year.

157. In the first year after the contractor has mobilized, a feeder channel with a capacity of about 1,500 cfs would be excavated to feed Thal Canal in case of emergencies. This canal would be completed by

50 December of the first year and the mouth of the canal would be plugged and it would be opened only when needed. This level of water supply is adequate to meet urgent water supply demands of the area.

158. Second Phase. This covers the second year of construction and the one and half year of the contractlcalendar year. The sequence of construction of coffer dams and construction would be repeated on the left side of the barrage. The coffer dams would be constructed from gates number 3 to gate number 29.

Table 4.1 Construction planning and sequencing of activities

30 works on the right side B January (1 7)to February After May 3 1 Gates 3- 29

E February 15-28 After May 3 1 Gates 1-7 all gates with installation of bulk head gates

159. Coffer dam “D” would be constructed during the canal closure period and coffer dam “E” would be constructed from Feb 15-28. The gate number 2 would be rehabilitated during canal closure period. Any remaining works on the gates 29 to 56 would be carried out using bulk head gates. All coffer dams would be dismantled.

160. Third Phase. This phase covers activities from November to February of the third and fourth contractlcalendar year. The work on gate number 1 would be carried out during the canal closure period. Any remaining works on the Thal Canal regulators would be completed during the closure period. Any remaining works on gates number 4 to 28 or even up to 56 would be completed using bulk head gates.

51 Construction Material and Quantities

161. Principal Quantities. The quantities of works based on the final design drawings for major items are tabulated below. These quantities are not extraordinary and can easily be handled by a capable contactor. They are not very different from the quantities used in the case of Taunsa Barrage rehabilitation. DescriDtion of Item of Work Units Ouantities Civil Works Earthwork 1000 53,240 Concrete 100 ft3 65,950 Steel 100 36,490 Stone work 100 ft3 100,580 Roads Km 3 Sheet Piling Kg 1,209,460 Jute Bags No. 826,930 Rehabilitation and up-gradation of buildings and infrastructure No. 21 Rehabilitation and up-gradation of Gates and Hoist No. 56 Dismantling of Temporaw Works Earthwork 1000 18,120 Stone Masonry 100 ft’ 22,140 Jute Bags I 100 ft3 8,270 162. Construction Materials. The construction materials for use in the civil works of the project are easily available in the country. The major materials are cement, stone coarse aggregate, sand, reinforcement steel, bricks, paint, electric cables and other appliances, tubewell equipment, epoxy materials, plasticizers etc.

163. Cement. There is enough production of cement in Pakistan and most is of acceptable quality. The cement is available from factories in Daud Khel in close proximity to Jinnah Barrage. The contractor can get more than one source for convenience in supply.

164. Reinforcement Steel. Reinforcement steel Grade 40 proposed in design is locally manufactured and easily available in the country. The contractor will get the sources approved after appropriate testing.

165. Stone and Aggregates. These materials can be obtained from quarries at Margalla Hills, Sikhanwali and Musa Khel. The choice will however depend upon the quality and suitability of the rock material for the construction of the hydraulic structures.

166. Construction Chemicals. Construction chemicals will be used in manufacturing the concrete, repair works and concrete joints etc. These materials are available in the country with leading brands like Sika and Fosroc.

167. Manufacture and Placement of Concrete. Two (2) batching plants will be used. These plants will consist of an aggregate reclaiming system, finishing to deck screen, aggregate and cement batches, mixing drums, ice plant and cement handling and storage facilities. The concrete will be transported within a distance of 2 kilometers using transit mixers. It has been assumed that the concrete for all the structures will be manufactured in the same central plant and transported to the sites. The concrete will be placed at site by using concrete pumps. The vibrators/compactors will be used as per requirement.

168. Earthwork. The earthen material is available in the close proximity of the barrage within the government owned land. 52 C 01 m

WJ -1- m m

I / i I Table 4.2 Construction Activities in Schematic Form Contract/ Construc Month Construction Parallel Parallel Calendar tion year Activities Construction Construction year activities activities

Contract is awarded and contractor mobilized Contract carries out preparatory works. Also construction of feeder channel of 1,500 cusecs. Start construction of coffer dam A on the right side of the barrage lower limb, covering gates 27- 56 of the barrage. Construction of a feeder channel of 1,500 cfs, Complete construction of the coffer dam A Construction in the area cordoned by coffer dam Start construction Construct coffer A of coffer Dam B dam D and E and Construction of end January after repair gate subsidiary weir, canal closure of number 3, and downstream fish ladder, period. Thal canal guide banks, navigation regulator. channel etc. Dismantle the coffer dams D and E after canal closure period Complete coffer dam B and coffer dam C Installation of guides for bulk head gates, rehabilitation of Inspection and repairs to gates, sill beams the floor, friction blocks, replacement etc. on downstream stone apron gates 27 to 56. etc. Start dismantling of coffer dams A and B and complete At the most first

54 Construction Parallel Parallel Activities Construction Construction activities activities 10 days of June coffer dams A and B dismantled

Constriction of coffer dam A covering gates 3 to 29 Construction of subsidiary weir and other works as mentioned Start construction Construct coffer above in area after the of coffer Dam B dam D and E and gates 3 to 29. end January after repair gate canal closure of number 2. period. Dismantle the coffer dams D and E after canal closure period

Installation of Inspection of the floor, guides for bulk friction blocks, repairs head gates, etc. rehabilitation of gates, sill beam Coffer dams are replacement etc. on dismantled. gates 3 to 29. Any repairs to gats 27 to 56 using bulk head gates. Start dismantling of coffer dams A and B can complete At the most first 10 days of June coffer dams A and B dismantled.

Any leftover gate repairs to gates 4 to 56. Coffer dams D and E during dosure period and repairs to gate 1 of barrage 55 Icontract/ I Construc I Month I Construction Parallel Parallel Activities I Construction I Construction

56 ANNEX 5: PROJECT COSTS PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-II)

Project Cost by Component Including Contingencies (US$ Million) A1 Civilworks 43.1261 14.3761 57.502 A2 Mechanical Works 13.504 22.994 36.498 A3 Implementation of Social and Environmental Management Plan A3.1 Assistance for Seeds etc. in Thal Command 6.188 6.188 A3.2 Water Supply Schemes 2.137 2.137 A3.3 Social Development Initiatives 0.568 0.568 A3.4 Environmental Management Plan 0.107 0.107 Sub-total A3 9.000 9.oc A4 Construction Supervision, contract management 5.500 2.500 8.0C and project management support Sub-total A 71.130 39.870 111.00 B. Improvement and modernization of the Irrigation and Water Management systems I I B 1 B 1.1 Management Information, monitoing and decision 4.075 I 0.9251 5.0C support system B 1.2 Modernization of water management, equipment 1.2001 3.8001 5.001 and facilities B2 Preparation of fbture water and irrigation projects 2.900 2.100 Sub-Total B C Monitoring and evaluation of the project impact and Social and environmental Management Plans 2.000 1.000 3.001 D Project Management, coordination, and technical Assistance D 1 Project Management and coordination 5.330 0.170 5.50 D2 Technical Assistance and Training Sub-total D Interest During Construction UDfront Fee II Total 87.24) 67.771 155.00l

57 Project Cost by Component Base Cost (US$ million)

A Rehabilitation of Jinnah Barrage A1 5 1.936 Civil Works 38.952 12.984 32.638 Mechanical Works 12.076 20.562 Implementation of Social and Environmental Management P Ian 5.625 A3.1 Assistance for Seeds etc. in Thal Command 5.625 A3.2 Water Supply Schemes 1.925 I 1.925 A3.3 Social Development Initiatives 0.506 0.506 A3.4 Environmental Management Plan 0.094 0.094 Sub-total A3 8.151 8.151 Construction Supervision, contract management 4.86 1 2.255 7.116 and project management support Sub-total A 64.039 35.801 99.840 B. Improvement and modernization of the Irrigatic and Water Management systems B 1 B 1.1 Management Information, monitoing and decisi 3.796 0.864 4.66C support system B 1.2 Modernization of water management, equipme1 1.108 3.584 4.692 and facilities B2 Preparation of fiture water and irrigatioh projects 2.522 1.905 4.425 Sub-Total B 7.426 6.353 13.779 C Monitoring and evaluation of the project impact and Social and environmental Management Plans 2.084 0.745 2.82s D Project Management, coordination, and technic Ass is tance D1 Project Management and coordination 4.745 0.148 4.893 D2 Technical Assistance and Training 0.562 0.8741 Q.::: Sub-total D 5.307 1.022 Pysical contingencies 3.956 1.8731 5.829 Price Contingencies 4.624 2.7701 7.394 Total Cost A to D 87.436 Interest During Construction 18.600 Upfront Fee Total Cost 87.436

58 ANNEX 5: PROJECT COSTS PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (FBIP-II)

Consulting IncremedTmining Total Works Goods Services operating A Rehabilitation of Jinnab Barrage A1 Civil Work 57.502 57.502 A2 Mechanical Works 36.498 36.498 A3 Implementationof Social and Environmental Management Plan A3.1 Assistance for Seeds etc. m Thal Command 5.9 0.3 6.2 A3.2 Water Supply Schemes 2.0 2.0 A3.3 Social Development Initiatives 0.6 0.6 A3.4 EnvironmentalManagement Plan 0.2 0.2 Subtotal A3

Project Cost by Component and Year (US$ million).

Component I Year-1 I year-2 I year-3 I year-4 I Year-5 I Total

A Rehabilitation and modernization of Jinnah Barrage 20.590 25.890 29.390 25.490 9.640 111.000

B Improvement and modernization of irrigation and water the 15.000 management system 2.816 3.506 6.574 2.104

C Monitoring and Evaluation of Project Impact and Social and the 0.423 0.498 0.576 0.664 0.839 3.000 Environmental Management Plans

Project Management Coordination Technical Assistance and D 1.265 1.239 1.386 1.452 1.658 7.000 Training

Upkont fee and Interest During Construction 0.878 1.684 3.602 5.730 7.106 19.000

Total Project Costs I 23.156 I 32.126 I 38.460 I 39.911 I 21.347 I 155.000

59 ANNEX 6: IMPLEMENTATION ARRANGEMENTS PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-IQ

169. Overall Project Management. The proposed project implementation arrangements are shown in Chart I. The Government of Punjab would have overall responsibility for project management and coordination through its Planning and Development Board. The existing Project Steering Committee (PSC) would provide the forum for overall guidance, policy advice and coordination of the project activities and addressing the inter-agency issues. The Punjab Irrigation and Power Department of the Government of Punjab shall be responsible for the execution and implementation of the Project through the already established Project Management Office (PMO). The implementation arrangements are described below:

170. Project Steering Committee (PSC). The existing Project Steering Committee (PSC) chaired by the Chairman P&D with the Secretary IPD, Secretary Finance and Secretary Agriculture, Environment, Public Health Engineering, Forestry and Wildlife, Chief Executive officer of selected NGO, Member Infrastructure, and Chief Water, P&D, representatives of the IocaVdistrict administration as its members, will be maintained to oversee this project, provide policy-level guidance and inter-agency coordination for the project. The Heamirector of the PMO will act as the secretary of this PSC.

171. Project Management Office (PMO). The PMO set up to manage the Taunsa Barrage Rehabilitation Project shall continue to manage implementation of the project with some modifications. The PMO will be headed by a Project Director with four subordinate units: (i) Finance Unit; (ii) Procurement Unit; (iii) Engineering Unit; and (iv) Environment and Sociology Unit. Key specialists will be recruited as needed. Most of the units have been staffed with qualified personnel already. A Project Management & Procurement Unit will be responsible for the overall management of the project implementation. It will manage the entire procurement process, monitor and evaluate project progress and performance, liaise with the Bank and be responsible for preparing annual programs and implementation reporting An Engineering Unit will oversee the work of the consultants on design and construction supervision matters. The head of the Engineering Unit will spend about half of his time at the site to provide coordination between the PMO and the supervising consultant. A Financial Management Unit will be responsible for all project-related financial management, disbursement and financial management reporting. An Environment and Sociology w,ill supervise compliance with the Environmental Management Plan and Social Action Program and together with the engineering unit implement the communication strategy. For civil works contracts, the Project Director will serve as the Employer, and the Project Implementation Consultants (PICs) will serve as the Engineer for construction supervision. At the site, a Resident Engineer, appointed by the consultant, with a team of specialists and inspectors will supervise the Contractor; The project implementation consultants (PICs) will support the PMO in construction supervision, contract management, and project management support; The consultants for M&E consultants will provide support in supervision of implementation of EMP/RAP would also report to the PMO; PMO will be responsible for all activities under the component A, C and D of the project including implementation of EMP, SDAP etc. PMO will coordinate the implementation of the B2 component. The main implementation entity in IPD for this will depend upon the nature and scope of the future project to be prepared. and The PMO will coordinate with PMIU implementation of B1 component.

60 172. Program Monitoring and Implementation Unit (PMJIJ). The PMIU will be the primary entity for the implementation of the B1.1 component of the project. PMO would provide support to PMIU in carrying out the procurement and financial management.

173. Publich Health Engineering Department would be responsible for implementation of water supply schemes under component A3 of the Project. PMO would provide support to PHED in procurement and financial management. Project Implementation Period

174. The project will be implemented over a period of five years starting from the expected date of effectiveness of September 30,2010. The target date for completion of all project works is by December 31,2015 and the loan closing dates will be June 30,2016 Reporting, Monitoring and Evaluation of Outcome/Results

175. The PMO will submit quarterly reports in an appropriate format to the Punjab Government, PSC and the Bank no later than 45 days after the end of each quarter. The quarterly report would cover the progress and expected completion date for civil works and equipment goods contracts, progress on institutional components, training and studies, and activities of the PMO’s engineering, M&E, procurement and financial consultants. The reports would cover financial and procurement information, including: (a) comparison of actual physical and financial outputs with forecasts, and updated six-months project forecasts; (b) project financial statements, including sources and application of finds, expenditures by category statement, and special accounts reconciliation statement; and (c) a procurement management report, showing status and contract commitments.

176. The PMO will also prepare annual reports by no later than March 31, of each year of project implementation. The report will cover: (a) the progress of each component, implementation of key features of the environmental management plan, key performance indicators, operation of project facilities, and financial statements; and (b) the Annual Work Plan for implementation, annual funds required for implementation an updated disbursement profile, planned actions for mitigating negative effects during construction, and target indicators for the coming year. A mid-term review o f the Project would be undertaken by October 31, 2013. An Implementation Completion Report (ICR) would be submitted to the Bank no later than six months after the closing date.

177. A group of consultants would be recruited for M&E of the Project impact, including the implementation and monitoring of the EMP, and the RAP. The M&E studies would evaluate the success in project implementation in terms of meeting the project’s objectives, and to assess its physical, hydrological, environmental, social, and economic impacts. The M&E activities would provide continuous feedback to the Government of Punjab and the PSC on the project’s performance and its impact on the various components, so that corrective actions could be undertaken in a timely manner. Changes in the PAD or the Project, if any, would be reflected in the implementation review aide memoires and or communicated through exchange of letters between the Bank and the Government.

61 n

Em E WG -L

n m c .cc 3 ANNEX 7: FINANCIAL MANAGEMENT AND DISBURSEMENT ARRANGEMENTS PAKISTAN: PTJNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-Il)

178. The financial management (FM) arrangements for the proposed project are assessed adequate to meet the Bank’s requirements under OP 10.02. The overall financial management risk is assessed as ‘Moderate’.

179. The FM arrangements are designed on the basis of existing financial management systems for Taunsa Barrage Project. The FM arrangements were reviewed recently. The PMO has qualified and experienced FM staff and accounting systems in place works well, which enables provision of quarterly and annual financial statements in a timely manner. A significant improvement has been the formal settlement of outstanding audit observations for FY2006 and FY 2007. Acceptable audited annual financial statements for FY 2008 have been received for Taunsa Barrage project. Draft annual financial statements for FY2009 have been revised in the light of comments made by the Bank team and audit process has since reached the advanced stage of finalization.

180. To further strengthen the FM systems, the organizational setup, procedures and respective job descriptions of the FM staff have been improved among other adjustments in the FM Manual. The overall system of financial management and internal controls will nonetheless remain on the similar lines as established for the Taunsa Barrage Project with the only exception of adopting the IFR based method to access / withdraw the Bank funds. Funds will be advanced to a new US$ Designated Account to be established with the PMO office. PICs will certify the interim and final payments to the works contractors, on the basis of which payments will be made by PMO.

181. PMIU would manage the implementation of Component B 1, Improvements in Irrigation and Water Management. The water supply schemes under component A3 of the project would be implemented by PHED. The PMO would advance funds to PMIU and PEDon a 90-day cycle basis. PMIU and PHED would retain the auditable records for examination by the external auditors and an accounting assistant would be designated for this purpose in each of the agencies. PMO would contract appropriate NGO for distribution of seed.

182. Risk Analysis. Since the proposed Project would also have the FM arrangements similar to those in the existing IBRD supported operation, the residual FM risk is rated as ‘moderate’, which is consistent with the existing rating of Taunsa Barrage project.

Risk Risk Risk Mitigating Measures Condition of Residual Rating Incorporated into Project Design Negotiations, Risk Rating Board or Effectiveness Inherent Substantial Moderate Risk - Country/ Substantial - Project implementation by PMO with Moderate Provincial improved FM systems and experience Level of Bank funded project - Entity Level - Project Substantial -Existing FM staff has adequate Moderate Level experience of bank financed project Control Substantial Moderate Risk - Budgeting Modest - Project’s budgets updated regularly Moderate Substantial - Existing FM staff has adequate Moderate Risk Risk Risk Mitigating Measures Condition of Residual Rating Incorporated into Project Design Negotiations, Risk Rating Board or Effectiveness Accounting experience of bank financed project - Internal High - Continuous updating the FM Manual Substantial Control on regular basis. - Use of supervision consultants for certifying interim and final payments to contractors - Funds Substantial - Use of report-based disbursement Low Flow and a separate designated account -Financial High - Agreement on format of IUFRs Moderate Reporting - Adoption of International Public Sector Accounting Standards - Auditing Substantial - DG Works Audit of AGP would Moderate carry out the audit of the project Overall Substan tial Moderate Risk

183. Flow of Funds. Funds will be disbursed through a new US dollar denominated Designated Account to be established with the PMO for the Project. In order to further simpllfy processes, ‘report-based disbursements’ using the Interim Financial Reports (IFRs) will serve as the basis for withdrawal of funds from the Loan. Quarterly Interim Financial Reports will be used as a basis for disbursement. Advances would be made to the Designated Account based on six-months projections. The Funds from the Loan will be transferred to the State Bank of Pakistan (SBP) for credit to the Consolidated Account Non-Food of the Government of Punjab, through the Consolidated Account of the Federal Government, for onward credit to the Designated Account of the project in the nominated account held with the Lahore branch of the National Bank of Pakistan (NBP). The approved Government procedures governing the establishment of Designated Accounts shall be followed in all respects. Direct payment method would also be allowed to process large payments to the contractors/ consultants, particularly those in foreign currency to avoid exchange loss.

184. Staffing. The FM staff recruited under Taunsa Barrage project ‘wouldcontinue to work for the Project. The financial management infrastructure already in place will be adequate to provide the requisite FM arrangements for the new project, and no special FM architecture will be required for accountability assurance for the project. However, based on the experience of Taunsa Barrage certain revisions are required in the FM staffing structure, job descriptions, and financial management manual. The job descriptions of all the current FM staff would require changes to ensure that not only are the specific roles of the individual staff defined, but also that the internal control arrangements (including segregation of responsibilities) are clearly delineated. Hence, the financial management manual has been revised by incorporating these changes.

185. Accounting, Payments, and Internal Control. The Project will follow a ‘cash-basis’ simplified accounting processes consistent with existing practices in the project. All payments would be made by crossed cheques and adequately vouched with relevant invoices and claims approved by the competent authority before the assigned accounting staff could initiate a payment request.

186. Financial Reporting. The financial reporting will be based on the same financial reporting framework as for the Taunsa Barrage Project except that disbursement of Bank funds through a separate Designated Account to be established for the project will be on the basis of FMRs (now called Interim Unaudited Financial Reports -1FRs) rather than on SOEs. The IFRs prepared by PMO would include all expenditure under the

64 project including the project expenditures from other implementing entities such as PMIU of IPD, PEDand/or PRPS. The IFRS would be prepared on a quarterly basis and submitted with 45 days of end of each quarter.

187. Similarly, the PMO would continue to adopt a cash basis of financial reporting, based on the IPSAS- Cash Basis requirement, for preparing the annual financial statements of the project. For the purposes of providing additional comprehensiveness, the ‘notes’ to the annual audited financial statements to be submitted to the Bank should adequately disclose the commitments and obligations outstanding at the close of the year.

188. External Auditing. Acceptable audited annual financial statements for FY 2008 have been received for Taunsa Barrage project. Draft annual financial statements for FY2009 have been revised in the light of comments made by the Bank team and audit process has since reached the advanced stage of finalization. Like Taunsa Project, the annual financial statements of the Project would be audited by the Auditor-General of Pakistan using the new Financial Audit Manual. PMO would have the responsibility to prepare the project financial statements after compiling all expenditure expenditures under the project including statements received from other entities under the project such as PMIU, PHE, etc. PMO would provide project annual financial statements for the year ending June 30 by August 15 each fiscal year and the audit report would be submitted by December 3 1 each year.

189. Audit Follow-up. A significant improvement towards strengthened financial accountability is reflected through the formal settlement of outstanding audit observations for FY 2006 and FY 2007 in respect of Taunsa Barrage Project. Government processes for audit follow-up would continue for the proposed project, which are likely to be further strengthened during the project life.

190. Disbursement Arrangements. Allocation of loan proceeds by disbursement category and percentage of finances is given in Table 1 below.

Y 7. Unallocated 10.6 Total 155 145.6 Note: Part of the IBRD amountfiom each category @om 1-6 representing contingencies) is in the unallocated category (category 7). The taxes and duties will also be Jinancedfrom the loan.

191. Supervision Plan. With the implementation of sound financial management and monitoring system by already existing cadre of professional FM staff in PMO, Bank’s normal supervision procedures would suffice.

65 192. Retroactive Financing. To meet the urgent project start-up needs, the Bank loan could be used to retroactively finance expenditures incurred during the period between January 1, 2010 and Loan signing (July 201 0) of up to US$5 million of the credit amount, provided that procurement procedures acceptable to the Bank are followed.

66 ANNEX 8: PROCUREMENT ARRANGEMENTS PAKISTAN: Punjab Barrages Improvement Phase-I1 Project (PBIP-II)

193. Procurement under the project would be carried out in accordance with the World Bank’s Guidelines: Procurement under IBRD Loans and IDA Credits of May 2004 revised October 2006, and Guidelines for Selection and Employment of Consultants by World Bank Borrowers of May 2004 revised October 2006. The Bank’s standard bidding documents for procurement under International Competitive Bidding (ICB), and sample bidding documents for procurement under National Competitive Bidding (NCB) which are already being used on other Bank financed projects in Pakistan, will be used for procurement of Goods and Works under the Project. The Bank’s Standard Request for Proposal (RFP) document will be used in the selection of consulting firms. The Government of Punjab shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines.

194. All expected procurement of goods, works and consultants’ services have been listed in the project’s General Procurement Notice (GPN), and Specific Procurement Notices (SPNs) shall be published for all ICBs and consulting services contracts costing more than US $ 200,000. Overall procurement arrangements with tentative amounts are given in Table 1. Special Measures for Dealing with Procurement Risks

195. As indicated in the risk section, the project is rated “substantial risk” operation from procurement and contract management point of view. Though performance in carrying out procurement under the ongoing Taunsa Barrage Rehabilitation Project has been satisfactory, the rating is assessed merely due to the sheer size of the operation, number of packages involved and country environment. In order to minimize this risk several measures are introduced for procurement in general and for management of consultancy contracts in particular. These measures include:

(0 The Procurement Unit (PU) of PMO shall be responsible for carrying out the procurement under the project including the consulting services, works and goods. PU staffed by Director and a Deputy Director, with support of the consultant shall also: (a) develop a procurement website which will be managed and updated by PU; (b) develop a credible system for handling procurement related complaints; and (c) develop and maintain a system of procurement documentation, filing systems and procurement database. (ii) PMO’s procurement website would be used for providing procurement plan, procurement notices, invitation to bid, bid documents and RFPs as issued, latest information on procurement contracts, status of evaluation, complaints and actions taken, contract award and performance under the contracts and other relevant information related to procurement. The website would be accessible to all bidders and interested person equally and free of charge. The website would be supported by a filing system and a procurement database as explained below. The web-site should be operational as soon as competitive procurements for the project commence; (iii) a credible system of handling complaints would be put in place. The PMO would manage the complaint handling system with overall oversight by the PSC of the Punjab Government. This system would include maintenance of a database, a standard protocol with appropriate triggers for carrying out investigations, and taking action against involved parties. PMO would develop the system as soon as possible and it would be reviewed by the Bank. For ICBhternational selection of consultants the Bank prescribed complaint redressal mechanism will apply; (vi) The Bank will hold procurement trainings for the PMO staff for works, goods and services during first year of the project;

67 (iv) procurement documentation system, filling system and a procurement database would be developed and maintained as outlines in the section below; and (v) A procurement manual shall be prepared documenting the procurement processes and approval procedures for each agency responsible for procurement under the project, circumscribing roles and responsibilities, and service delivery standards.

196. With these above arrangements, the procurement under the project is likely to be effective and transparent resulting in smooth implementation of the project leading to achievement of the project development objectives. At this stage procurement risk rating of the project is kept “substantial”, however, procurement process and implementation of the contracts would be reviewed every six months by the PSC in collaboration with the Bank and adjustment would be made, and corrective actions would be taken if necessary. Procurement of Works

197. Most of the project works, in particular related to the rehabilitation of the Barrage would be implemented through single works contract package using international competitive bidding (ICB) procedure. The package may be divided in two lots, one for civil works, and one for mechanical and electrical works, and tendered using slice and package technique where pre-qualified contracts would be asked to bid on one or both lots and the contracts would be awarded based on least cost evaluation for the total package. There would be some smaller NCB contracts for preparatory works to develop office and other residential facilities ahead of the project start. Also the works for water supply schemes, would be implemented using NCB, minor works procedure or following community based contracting procedures. The PICs would be responsible evaluation of bids and recommendation of the award for major contracts. PICs would also be the “Engineer” or “Project Manager” under the civil work contracts.

198. The civil works contracts which are: (i) estimated to cost up to more than US$500,000 equivalent would be procured through ICB procedures. Prequalification would be mandatory for contracts estimated to cost more than US$10 million equivalent; (ii) Estimated to cost less than US$500,000 would be procured through NCB procedures; (iii) for Minor works estimated to cost up to US$50,000 equivalent per contract may be procured through shopping procedures. The PMO would validate authenticity of the quotations provided by suppliers under this procedure; and (iv) for works costing up to US$30,000 equivalent for water supply schemes may be carried out through community based contracting procedure using lump-sum output/deliverable based contracts.

Procurement of Goods

199. Goods procured under this project would include: ofice equipment, vehicles, furniture, field equipment and heavy equipment and seeds and other materials for water supply schemes. Following procedures would apply for procurement of goods:

(i) ICB procedures shall be followed for each Goods contract estimated to cost more than US$200,000 equivalent. Domestic Preference will be allowed to local manufacturers on ICB contracts; (ii) Goods estimated to cost up to US$200,000 per contract may be procured through NCB procedures acceptable to the Bank; (iii) Vehicles and small value off-the-shelf goods, and seeds etc. estimated to cost up to US$50,000 equivalent per contract may be procured following shopping procedures in accordance with the Bank’s procurement guidelines;

68 (iv) Computer software, books, journals, training material, seeds and other goods under Component B and A3 of the project with individual contract costing less than US$50,000 equivalent may be procured following direct contracting procedures, with prior approval of the Bank.

Table 1: Procurement Arrangements (US%million)

(8.0) (3.0) (11.0) 3. Consulting Services (a) Project Implementation consultants and M&E 11.5 11.5 consultants (under Part A and C) (11.5) (11.5) 8.0 8.0 (b) Consulting services under part B and D of the project (8.0) (8.0) 19.5 19.5 Sub-Total Consulting services (19.5) (19.5) 4. Incremental administrative, operational expenditure and training 1.6 1.6 (a) Training (1.6) (1.6) 7.3 7.3 (b) Incremental administrative and operating expenditures (7.3) (7.3) 8.9 8.9 Subto tal (8.1) (8.9) 18.6 1' 5. Upfront fees, interest and fees (18.6) (1' 6. Upfront Fee I (0.4) I (0.4) 93.0 10.5 51.5 155.0 Total (83.7) (10.4) (51.5) (145.6)

Improvement of Bidding Procedures under National Competitive Bidding

200. The following improvements in bidding procedures will apply to all procurement of Goods and Works under National Competitive Bidding, in order to ensure economy, efficiency, transparency and broad consistency with the provisions of Section 1 of the Guidelines: i. Invitation to bid shall be advertised in at least one national newspaper with a wide circulation, at least 30 days prior to the deadline for the submission of bids; ii. bid documents shall be made available, by mail or in person, to all who are willing to pay the required fee; iii. foreign bidders shall not be precluded from bidding and no preference of any kind shall be given to national bidders in the bidding process; iv. bidding shall not be restricted to pre-registered firms; 69 V. qualification criteria shall be stated in the bidding documents; vi. bids shall be opened in public, immediately after the deadline for submission of bids; vii. bids shall not be rejected merely on the basis of a comparison with an official estimate without the prior concurrence of the Bank; v111.... before rejecting all bids and soliciting new bids, the Bank’s prior concurrence shall be obtained; ix. bids shall be solicited and works contracts shall be awarded on the basis of unit prices; X. contracts shall not be awarded on the basis of nationally negotiated rates; xi. single bid shall also be considered for award; xii. contracts shall be awarded to the lowest evaluated and qualified bidder; x111.... post-bidding negotiations shall not be allowed with the lowest evaluated or any other bidders;. xiv. draft NCB contract would be reviewed by the Bank in accordance with the prior review procedures; xv . Government-owned enterprises shall be eligible to bid only if they can establish that they are legally and financially autonomous, operate under commercial law, and are not a dependent agency of the Recipient; xvi. A firm declared ineligible by the Bank, based on a determination by the Bank that the firm has engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for or in executing a Bank-financed contract, shall be ineligible to be awarded a Bank-financed contract during the period of time determined by the Bank. xvii. The Bank shall declare a firm ineligible, either indefinitely or for a stated period, to be awarded a contract financed by the Bank, if it at any time determines that the firm has, directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in competing for, or in executing, a contract financed by the Bank; and xviii. Each contract financed from the proceeds of a Loan shall provide that the suppliers, contractors and subcontractors shall permit the Bank, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by the Bank. The deliberate and material violation by the supplier, contractor or subcontractor of such provision may amount to obstructive practice.

Recruitment of Consultants

201. Major consulting services under the Project would be required for PICs, M&E consultants, development of management information and decision support systems, and future project preparation. Contracts with consulting firms will be procured in accordance with Quality and Cost Based Selection procedures or other methods given in Section I11 of the Consultants’ Guidelines, such as quality based (QBS), fixed budget (FBS), least cost selection (LCS),consultants qualification (CQS) or single source selection (SSS). For contracts with consulting firms estimated to cost less than $500,000 equivalent per contract, the shortlist of consultants may comprise entirely national consultants in accordance with the provisions of paragraphs 2.7 of the Consultant Guidelines.

202. Selection of Individual Consultants. World Bank provides guidelines on selection of individual consultants in Section V of the Consultant Guidelines. Services for assignments that meet the requirements set forth in the first sentence of paragraph 5.1 of the Consultant Guidelines may be procured under contracts awarded to individual consultants in accordance with the provisions of paragraphs 5.2 through 5.3 of the Consultant Guidelines. Under the circumstances described in paragraph 5.4 of the Consultant Guidelines, such contracts may be awarded to individual consultants on a sole-source basis.

203. Single-Source Selection. Specific consultants’ services through firms, satisfying Consultants Guidelines (paragraph 3.9 to 3.13), with Bank’s prior agreement may be procured following single source selection procedures.

70 204. Recruitment of an Appropriate NGO for Distribution of Seed. An appropriate NGO would be recruited through competitive process for implementation of seed distribution in Thal Canal Command area under A3 component of the Project. The seed distribution also involves formation of social groups, extension and technology transfer, for which the NGO should have the system, skills, infrastructure and experience in the project area. The NGO would be given contract for services and purchase of goods/seeds using appropriate form of contract. The purchase of seeds would be carried out by the NGO according to the World Bank Guidelines for procurement of goods.

Incremental Operating Costs

205. The incremental operating costs for covering incremental staff salaries, rent, office supplies, utilities, operating and maintenance expenditures of office equipment and vehicle, etc. would be disbursed on the basis of annual budgets to be prepared by implementing agencies and agreed with Bank.

Assessment of Agency?s Capacity to Implement Procurement

206. Annex 6 gives the details of the project implementation arrangements. PMO is the office responsible for preparing the procurement plans, procurement of consultant services and overall project implementation. The PMO has been the coordinating unit for the implementation of the Taunsa Barrage Rehabilitation Project and has gained considerable experience of working according to the Bank?s procurement rules. Continued engagement of these staff members with the project will be pivotal in ensuring adequate procurement capacity of the PMO. The procurement function will be looked after by the Procurement Unit with the Director of Procurement and Contracts Administration as the head and assisted by Deputy Directors. PHED staff has adequate procurement background for nature works they are expected to implement under the Project. PMIU would be supported by PMO in procurement issues. The Bank will hold a procurement training session of the procurement staff as soon all the relevant staff is hired.

207. An assessment of the capacity of the implementing agency to implement procurement actions for the project was carried out by the procurement specialist on the team. The assessment reviewed the organizational structure for implementing the procurement under the project and the interaction between the project?s staff responsible for procurement. The special measures for dealing with procurement risk proposed above are based on this review.

Procurement Planning

208. The Procurement Plan for the key contracts for goods, works and consultants? services expected under the Project is prepared by the PMO. Whenever possible, procurement of works, goods and services would be packaged into large packages to attract good contractors. Procurement under the project will be carried out in accordance with the procurement plan. Procurement plans will be closely monitored and updated on a quarterly basis, or as required. No procurement, regardless of the value, will be done by the implementing agency unless it has been approved under the procurement plan by the Bank. Any change in the estimated cost of any contract will promptly be conveyed to the Bank for its approval. No changes will be accepted after bidding documents have been made available to bidders. Prior Review

209. Thresholds for prior review are given below. These thresholds would be reviewed in 18 months and adjustments upwards or downwards would be made based on implementation experience.

(i) All ICB contracts for works and goods;

71 (ii) All single source selection or direct contracts; (iii) Goods contracts estimated to cost US$200,000 equivalent or more; (iv) First NCB contract for works for each implementing agency irrespective of value and thereafter all contracts estimated to cost US$200,000 equivalent or more; (v) First contract procured through shopping, for goods as well as works, and through community based contracting procedure; (vi) The first Consultants’ Services contract with consulting firms, irrespective of value, and thereafter all contracts with firms estimated to cost US$lOO,OOO equivalent or more; (vii) First consulting services contract with individual consultants, irrespective of value, and thereafter all contracts with individuals estimated to cost US$50,000 equivalent or more.

Post Review

210. All other contracts will be subject to Post-Review by the Bank. PMO will send to the Bank a list of all contracts for post-review on a quarterly basis. Post reviews as well as the implementation reviews would be done quarterly for the first 18 months or till the credit disbursements reach US$30 million and there after bi- annually. Such review of contracts below threshold will constitute a sample of about 20 percent of the contracts.

Procurement Information and documentation - Filing and database 2 11. Procurement information will be recorded and reported as follows: Complete procurement documentation for each contract, including bidding documents, advertisements, bids received, bid evaluations, letters of acceptance, contract agreements, securities, related correspondence etc., will be maintained by the implementing agencies in an orderly manner, readily available for audit. Contract award information will be promptly recorded and contract rosters as agreed will be maintained by each implementing agency. Comprehensive quarterly reports by PMO, indicating: (i) revised cost estimates, where applicable, for each contract; (ii) status of on-going procurement, including a comparison of originally planned and actual dates of the procurement actions, including preparation of bidding documents, advertising, bidding, evaluation, contract award and completion time for each contract; and (iii) updated procurement plans, including revised dates, where applicable, for the procurement actions. A Procurement Database would be developed supporting the procurement website that would register relevant information in a database format that would be suitable for analysis. The database would include above information and in addition other relevant information such as official estimates (global unit prices based on market rates), all bidders (individual, companies, joint ventures, owners information, bank guarantee information, etc.), all bids, and relevant staff offered (technical experts, work supervisors, etc.). The database would be designed and supervised by the PMO in accordance with the format agreed with the Bank.

Frequency of Procurement Supervision

212. Bank supervision would be carried out every six months, however, more frequently in the early stages of the project. In addition to the prior review, Bank supervision missions, including a procurement specialist, would carry out for post review of procurement actions. The Bank’s procurement specialist based in the Country office in Pakistan will be available to discuss procurement issues with the PMO as and when needed.

72 Details of the Procurement Arrangements

1. Civil Works and Goods

11 2 3 4 5 6 7 8 Ref.No. 1 Contract I Estimated I Number I Procurement Domestic Review by Expected Description Cost S% of Method Preference Bank Bid-Opening I (million) I contracts I (yestno) (Prior/ Date

PBIP-II- 1 package I ICB No Prior May 20 1 1 Al-1 mechanical 2 lots works for bases on rehabilitation slice and ofthebarrage I package PBIP-II- Rehabilitation I 1.O One or NCB No Prior May 201 1 A 1-3 to4 of offices and tW0 other facilities PBIP-11-1 I construction of water su3ply schemes PBIP Rehabilitation I 1.O About 10 NCB No Post December -II-A3- and 2010 1 to 10 construction of water supply schemes PBIP-II- Rehabilitation 0.5 About 10 Minor works No No December 13 11-20 and 2010 construction of water supply schemes PBIP-II- Rehabilitation I 0.5 January 20 11 13-21-35 bases construction of contracting water supply

'BIP-A3- January 2010 36-37 Two I NCB I No I No

PBIP-B- Equipment for 8.0 3 to 5 NCB No No December 1-5 water 201 1 measurement, bathymetry, and for improving water management, software and vehicles etc.

73 2. Consulting Services

1 2 3 4 5 6 7 Ref. No. Description of Estimat Number Selection Review by Expected Assignment ed Cost of Method Bank Proposals US$(mil contracts (Prior/Post) Submission lion) Date PBIP-11-A4 Project 8.0 1 QCBS Prior July 20 10 Implementation consultants. PBIP-11-C M&E 3 .O 1 QCBS Prior September Consultants. 2010 PBIP-11-B 1 Management 3.0 1 QCBS Prior March 20 11 Information and decision support. PBMP-II- Future project About 3.5 2 or 3 QCBS Prior July 20 13 B2- 1-3 preparation. PMIP-II- NGO Contract 6.2* 1 QCBS Prior December A3.3 for distribution of 2010 seeds *appropriate form of contract would be used as estimated cost of services is about US$350,000 and remaining amount is for goods.

74 ANNEX 9: ECONOMIC AND FINANCIAL ANALYSIS PAKISTAN: PUNJAB BARRAGES IMPROVEMENT PHASE-I1 PROJECT (PBIP-II)

Synopsis

213. The Jinnah Barrage is presently not safe enough to pass high discharges. Major floods could cause further damage to the barrage and potentially result in full or partial collapse. If such an extreme event were to occur, the water supply to the Thal Canal would cease, the power plant on the right side of the Barrage (with 96 MW capacity) currently under construction would not operate, control over the river would be lost, and road and other utilities traversing over the barrage would not be useable. This would devastate the local area and regional economy and result in significant impact on the national economy. The government will continue to do its best to avoid such a scenario through continued emergency repairs until a capital program like this project can address the main issues and make the barrage safe. The capital improvements envisaged under the Project are essential and cannot be avoided or replaced with minodemergency repairs as discussed in the PAD sections on alternatives considered. The need for such repairs arises to some extent from original design deficiencies and the changing hydrologichydraulic conditions of the river.

214. The problems of the barrage are described in Annex 4. These problems, if continued for another two- three years could result in reduced operation of the barrage and reduced water supplies to the Thal Canal. The rehabilitation of Jinnah Barrage is necessary and unavoidable. The major outcomes expected of the investment are: (a) reliable water supplies for over about 2.1 million acres of land, 5 million people in 5 districts, and irrigation supplies to over 600,000 farm families; (b) continued control over the river and flood management; (c)continued use of road, and other utilities traversing over the barrage; and (d) continued production of hydropower from the 96 MW plant on the right side of the barrage.

Approach and Methodology

215. The standard economic analysis approach has been used to determine the economic and financial return to the investment i.e. “Net Present Worth” and economic/financial internal rates of return are used as a measure of profitability of investment for rehabilitation and modernization of the barrage. Financial costs and benefits have been used as the basis for the subsequent estimation of economic costs and benefits. The following paragraphs describe the assumptions and the results of the economic and financial analysis.

Main Assumptions

216. For calculating economic indicators like EIRR, BC Ratio and NPV, a conservative approach has been adopted for estimating the project benefits. The following assumptions are made for determining the project appraisal:

217. Financial costs and price level. Financial costs of the Project has been estimated including physical contingencies, price contingencies to the base costs, and taxes, duties, interest during construction and upfront fee. The financial cost of the project also includes cost for improvement and modernization of the irrigation and water management system. The project base costs are estimated in September 2009 prices.

218. Economic costs. All project costs comprising civil works, mechanical and electrical works, up- gradation and modernization of gates, gates and hoisting mechanism for subsidiary weir, power supply, construction of camps and allied costs of transport, equipment and services have been taken into account in the evaluation of the project’s economic viability. Costs of social and. environmental management plans, such as supply of seed in Thal Canal, and water supply schemes have also been included.

75 219. The financial costs have been converted to economic value by taking out taxes and duties from the local component of the project costs, whereas the foreign component is considered as the true economic costs and has not been further adjusted or multiplied by any factor. However, the local component of the project costs is further multiplied with appropriate conversion factors to adjust the price distortions of the items with lower economic values like unskilled labor, skilled labor, cement and other items. In the absence of any appropriate conversion factor, a standard conversion factor of 0.9 has been applied for converting the financial costs into economic values.

220. Projected Benefits. Overall benefits from rehabilitation of the barrage would include both quantifiable and non-quantified benefits of sustainable irrigation supply and a reduction in the agriculture losses due to avoidance of partial or full failure of the barrage. The following paragraphs describe the analysis in detail.

221. Quantified Benefits. It is assumed that in the absence of any major remedial measures, the condition of barrage would further deteriorate and its capacity to supply water to the Thal Canal will reduce gradually over a period of ten years. It is further assumed that the present cropping intensity’ of 103 percent will gradually decrease to 87%. This decline has been worked out after discussions with the engineering staff of the project, who is of the view that the present (year 2008) flow of 8,000 cusecs in Thal Canal shall have to be reduced to 6,000 cusecs in 10 years, under the ‘without project’ scenario . This assumption considered that all the coming 10 years would be normal, and if there is any high flood the situation might be worse and the barrage may be damaged partially or fully. Accordingly, the cropping intensity in future, under the ‘without project’ scenario, has been worked out as 87%.

222. Under the ‘With project’ scenario the Thal Canal would get full water supply at its designed capacity and the cropping intens’itywould increase by 10% over a period of ten years. As such the cropping intensity will become 113%, within a period of ten years.

223. Area Benefitted. Total CCA of Thal Canal command is 2.1 million acres. Presently, the gates are defective and worn out and do not allow the water to flow at full capacity for a longer period.

224. Non-Quantifiable Benefits: Examples of such benefits include benefits from avoided erosion, land reclamation and securing other infrastructures. These include the indirect damages arising from averted losses of retail trades, interruption of social services, and the cost of restoring these services. The levels of the expected annual damage on the basis of the probability of partial or complete failure of the barrage and duration of uncontrolled spread of floods have not been, quantified. The 96 MW Jinnah Hydropower Project being constructed by WAPDA on the right bank of the barrage would not operate at full capacity. The value of lost energy production from this plant is very high. The benefits due to avoided loss of investment in the case of heavy floods or the benefits of power have not been accounted for in this analysis.

225. A conservative approach has been adopted and no change in either crop yields or in the inputs level has been assumed for with and without Project scenarios.

226. Catastrophic Scenario. Engineering analysis reveals that the barrage is at high risk and may partially or fully collapse in the event of extraordinary high floods. It is obvious that the Irrigation Department will take necessary remedial measures well before in time and would not let the barrage collapse in any case. However, if the barrage is partially or fully collapsed, a sum of Rs 45 billion (US$560 million and if all bays do not collapse) shall be required to reconstruct the Barrage over a period of 5-years. In addition, due to non-operation of the Thal canal during the re-construction period of the Barrage, the estimated loss would be about Rs 6,968 million

’ Source: Thal Canal Circle office at Mianwali. The data is available for the year 2003 by latest and the same has been assumed true for year 2009. It depicts cropping intensity as 49.8% for the Khurfand 53.6% for the Rubi. As such the prevailing cropping intensity has been worked out as 103.4%. 76 (US$87 million) per annum due to the non-cultivation of crops. This quantification of loss under a catastrophic scenario is just indicative and has not been accounted for in the Project economic appraisal.

227. Other Assumptions. Other assumptions are: (i) Crop budgets6 have been developed to estimate per acre net benefits considering the level of inputs and yields prevailing in the project area; (ii) The opportunity cost of capital is considered as 12%, being the rate used by the Planning and Development Department, GoPunjabl GoPakistan for projects' evaluation purposes. (iii) The farm gate prices for internationally traded goods are based on international prices', while those of non-traded goods are based on domestic financial prices. Among traded goods, export parity prices have been used for cotton and rice and import parity prices for wheat, sugarcane, and all fertilizers. Derivation of economic prices has been shown at Table 9.1, whereas the farm gate prices have been illustrated at Table 9.2. (iv) Incremental O&M has been worked out as 0.75% of the investment costs, it refers to cost of electricity and skilled labor required after rehabilitation and modernization of the operation of the gates. (v) Useful life of the Barrage has been considered 50 years including rehabilitation period as three years. (vi) All costs and benefits are taken at nominal prices and no increase is assumed, either in benefits or costs, over the period of analysis.

Economic Rate of Return

228. The Project's economic rate of return (ERR) is estimated as 21.7%. NPV has been worked out as Rs 6,180 million in economic terms at 12% discount rate. Sensitivity analysis

229. The project ERR is robust and not very sensitive to variations in the project costs or benefits. The results of economic analysis have been summarized as below: Economic Analysis ERR Description Response % a. Base Case 21.7 b. Costs increase by 20% 19.3 c. Benefits Decrease by 20% 18.8 d. Combination of both (b&c) 16.7

230. The above results show that the ERR remains above the level of 12%, even if the costs increase and benefits decrease by 20 percent simultaneously. It clearly establishes the project's economic viability. Financial Analysis

23 1. Financial analysis of the project was done by developing cash flows of costs and benefits in financial terms. The base costs have been included in the cash flow of costs working out the agriculture benefits using the farm-gate market prices prevailing within the project area, with similar approach and methodology expressed above under the economic analysis.

6 Source: Project Consultants 7 Source: World Bank forecast for agricultural commodity prices, May 2009 Issue 77 Financial Rate of Return

232. Financial rate of return (FRR) is estimated at 17.7%. NPV is estimated at Rs 6,181 million in financial prices at 12% discount rate. Sensitivity analysis carried out to test the robustness of FRR is summarized in the following Table. Financial Analysis FRR Description Response YO

Farm Budget Analysis

233. Farm Budget analysis was also carried out to evaluate the impact of the project interventions on the income of an average farm holding of 12.5 Acres (5 Ha).

234. Farm budgets were prepared by working out gross value of production (GVP); gross cost of production (GCP); net value of production (NVP); and incremental farm income under with and without project scenarios. The basic assumptions about cropping pattern are similar as explained above under economic analysis. Results of the analysis and impact on farm income

235. The project would benefit about 400,000 farm families with an average family size of 6.1 persons per family in the command areas of Thal Canal (Jinnah Barrage). In addition, it would generate approximately 2.78 million person days per annum of farm labor (i.e. about 1.41 additional man days per acre per annum). The estimated change in farm incomes (in financial prices) for an average farm (5 Ha) models is summarized below.

Key; FWOP=Future Without Project; FWP- Future With Project

78 TABLE 9.1: Derivation of Export and Import Parity Prices of Various Commodities

Parity Price Basis (I) (I) (E) (E) (I) (0 Wheat Sugarcane Cotton Rice Urea TSP Projected Price in Current Dollars $/mt (2) 262.3 538.4 ,362.8 526.5 261.8 246.9 Quality Adjustment Factor 0.85 0.97 0.97 0.97 1.oo 1.oo World Market (adjusted) Equivalent $/mt 223 .O 522.2 ,32 1.9 510.7 261.8 246.9 Transport and Insurance $/mt 45 45 65 45 45 45 cif, Karachi $/mt 268 567 1,257 466 307 292 Exchange Rate Rs/US$ 80.5 80.5 80.5 80.5 80.5 80.5 cif, Karachi (Rdmt) 21,573 45,660 101,179 37,489 24,697 23,496 Port charges, storage & Handling Rs/mt 900 900 1,530 900 900 900 CIF/FOB Value at Karachi market 22,473 46,560 99,649 36,589 25,597 24,396 Transport to Project Area (Mill) 42 8 42 8 749 428 42 8 428 Processed Value 22,90 1 46,988 98,900 36,161 26,025 24,824 Processing Ratio % 93.6 8.5 33 62 100 100 Processing Charges Rs/mt 1,637 3,250 1,646 4,114 Value of by product Rdmt 144.0 825.0 Value of oil in cotton (7%) Rdmt 5,040 Value of cake in cotton Rdmt 2,352 Wholesale Value 23,111 4,270 39,486 19,044 26,025 24,824 Local agent's commission 693 85 395 381 52 1 496 Transport to Farm 200 300 270 200 200 200 Value at farm gate 24,005 4,656 38,821 18,663 26,546 25,320 Economic Value at farm gate (Rd4Okg) 960 186 1,553 747 Fertilizer: Economic Value of 50kg bag 1,327 1,266 Fertilizer: Financial Price of 50kg bag 1,500 900 Local farm gate price (Rs/40kg) 840 72 1,600 920 Ratio of border to local farm gate price 1.14 2.59 0.97 0.81

Financial Price per Kg 21.00 1.80 40.00 23.00 27 25 Economic Price per Kg 24.00 4.66 38.82 18.66 30 18 Value of N in Case of Fertilizer Eco 57.7 55.0 Fin 65.2 39.1 Source: World Bank Issue on Commodity Prices May 2009 (1) Parity: [I] = Import [E] = Export (2) Farm gate prices of wheat, cotton and Sugarcane have be obtained from local markets and confirmed with Trading Corporation of Pakistan, who procure all these directly from the farmers.

79 Table 9.2: Prices Used in Financial and Economic Analysis (Farm-gate Prices May 2009 Price Level) Description Unit Financial Economic A outputs 1 Yields Kharif Crops Cotton 40.00 38.82 K. Pluses 27.00 24.30 Rice (Paddy) 23.00 18.66 K. Oilseed 29.00 26.10 K. Fodders 3.50 3.15 K. Vegetable 12.00 10.80 2 Rabi Crops Wheat 2 1.oo 24.00 Gram 32.00 28.80 Pulses 30.30 27.27 R. Oilseeds 24.00 21.60 R. Fodders 4.00 3.60 3 Perennial Crops Sugarcane 1.80 4.66 Orchards (Oranges-Jinnah Barrage) 2 1.oo 18.90

B. Inputs 4 Seed Cotton 50.00 45.00 K. Pluses 35.10 3 1.59 Rice (Paddy) 29.90 26.91 K. Oilseed 37.70 33.93 K. Fodders 58.00 52.20 K. Vegetable 80.00 72.00 Wheat 26.25 23.63 Gram 40.00 36.00 Pulses 37.88 34.09 R. Oilseeds 30.00 27.00 R. Fodders 120.00 108.00 Sugarcane 2.25 2.03 Orchards (Oranges-Jinnah Barrage) 38.00 34.20 5 Fertilizers Nitrogen (N) 65.22 57.7 1 Potash (K) 39.13 55.04 Phosphorus (P) 95.65 139.05 Farm Yard Manure 400.00 360.00 6 Pesticides Cotton 900 810.00 Rice 900 810.00 Maize 600 540.00 Oilseeds 600 540.00 Vegetables 700 630.00 Sugarcane 700 630.00

80 I Description Unit Financial Economic Wheat RsISpray 600 540.00 Orchards RsISpray 800 720.00 7 Bullock Labour RsPlough 230 207.40 8 Tractor Labor RslHour 310 279.00 9 Manual Labour RslDay 125 112.50 10 Purchased Groundwater RslHour 145 145.00 11 Canal Water Rates (abiana) Kharif RsIAcre 85.00 85.00 Rabi RslAcre 50.00 50.00 OrchardsISugarcane RslAcre 250.00 250.00

81 ANNEX 10: SAFEGUARD POLICY ISSUES PAKISTAN: Punjab Barrages Improvement Phase-I1 Project (PBIP-II)

236. The Project triggers three safeguard policies, including Environment Assessment (OPBP4.01), Involuntary Resettlement (OP/BP4.12), safety of dams and project on International Waterways (OP7.50) all of which will be addressed under the Project. Policies for Natural Habitats (OPBP4.04), and Physical and Cultural Resources (OPBP4.11) are not triggered though these aspects would be monitored as described in the section below.

237. Environmental Assessment OP/BP/GP 4.01.' Details are provided in Annex 10.1, The Project is rated as category A. The project would generate considerable positive environmental benefits in the long run. The environmental issues would be during the construction period that needs to be addressed. An EA for the project was carried out which incorporates Environmental Management Plan to mitigate all potential environmental and social impacts arising due to the project interventions.

238. The potential environmental issues could be attributed to the construction phase. The project designers considered three alternatives to minimize the adverse environmental impacts. Salient features of the selected option are, only required interventions with the barrage structure, proposes adequate fish ladder design to maintain the movement of fish in river waters across the barrage. PMO places significant importance to construction phase as well to the river ecology and in this context river flows across the barrage will be maintained throughout the year by limiting construction works to one part of the river. Through compartmentalization approach, construction work will be completed in parts across the river width. Coffer dams will be built across the active work area to block the river flows, and dewater the work area. Adequate borrow areas have been identified to arrange for earth required for coffer dams. Majority of such earth would come from IPD owned land, however, some material may from private lands as well. PMO will ensure appropriate leasing arrangements that there is no permanent loss to both the natural resources and the owner of the land. The Project EMP also addresses issues related with construction activities like waste generation, excessive noise levels, traffic management, material storage, handling and transportation, and health & safety related issues. The EMP also lays responsibility of developing an emergency plan with the contractor to deal with any such situation as and when these arise during the construction. The project EMP proposes appropriate mitigation plan to address all such temporary and reversible environmental impacts. Besides, it also elaborates on comprehensive compliance and cause-n-effect monitoring program with adequate allocation of funds.

239. WAPDA is also constructing a hydropower project adjacent to the proposed rehabilitation project and the construction period does overlap for quite some time for the two projects. Some of the project activities like material handling and storage, establishment of batching plant etc proposed on the right bank of the river may interfere with the on-going hydropower project. PMO has agreed that it will coordinate with WAPDA to ensure adequate implementation of hydropower project EMP with quality conditions acceptable no less than those given in the Project.

240. Construction activities may also result in an extended canal closure of Thal canal located on the left bank of the river and may affect drinking water supplies in saline zone, command of Mohajir branch. Alternate water supply arrangements to such effected population during the canal closure period have been proposed in the project EMP and SDAP and will be implemented. Details of proposed alternate drinking water supplies and seed distribution are presented in the section on Social aspects and Annex 10.1.

24 1. PMO has successfully implemented Taunsa Barrage Rehabilitation project and possesses quite satisfactory experience in the implementation of environmental management plans. PMO has created the position of Director - Environment and Social, assisted by one Deputy Director each on Environment and Social Development. These officers will spend significant time in the field to personally monitor the implementation of project EMP. Besides, supervision consultants will also have an Environmental Specialist appointed in the field 82 who will be responsible to provide day-to-day guidance to contractors’ staff on EMP implementation. Contractor will also recruit staff adequately trained in environmental aspects to fully comply with the proposed environmental mitigation measures. Adequate training program for the consultant and contractor staff as well as reporting arrangements have been presented in the project EMP and PMO will implement them to enhance the quality of EMP implementation. Implementation of EMP and SDAP would be monitored by independent M&E consultants recruited under the project (Component C of the Project).

242. Natural Habitat (OP/BP/4.04). There are no protected areas, game parks and wildlife sanctuaries in the project area or areas likely to be affected by the Project. However, the PMO and independent M&E consultants would monitor during construction period if any natural habitat may be affected by the construction activities and remedial measures would be undertaken as necessary. Also the EMP includes a program of tree plantation and SDAP includes development of a public park. Both of these investments would be used strategically to improve overall natural habitat around the project area.

243. Physical Cultural Property (OPBP 4.11). The construction would not be carried out in the undisturbed areas so this policy is not triggered. However, the bidding documents would include procedures to handle the “chance find”. The PMO, and independent M&E consultants, and PICs would monitor any “chance find” of cultural heritage items during the construction activities and assist in handling them in accordance with the procedures stipulated in Punjab and Bank Guidelines. The “chance find” procedures would be included in the tender documentation for the construction contracts.

244. Involuntary Resettlement (OP/BP 4.12). Given the rehabilitation nature, the project is not expecting to have any land acquisition or resettlement. This conclusion is arrived at after rounds of site screening, surveys and public consultation as part of the project design process. However, it is a large Project on an operational river and a land acquisition and resettlement framework (LAW) is prepared and agreed upfront to guide and manage resettlement planning in case any unexpected land acquisition or resettlement need emerges during project construction (Annex 10.2).

245. Barrage rehabilitation will require closure of the canal system and this is planned to be carried out during the normal canal closure period for maintenance. In case the canal closure period is extended due to delay in construction, a Social Development Action Plan (SDAP) has been prepared to mitigate possible impacts due to such closure extension and also to maximize project benefits in local development. This program is developed based on assessment of possible impacts and broad public consultations in the command areas. The measures include construction and rehabilitation of water supply schemes, free distribution of wheat seeds of early maturity and community facilities. A communication strategy and plan have been developed to disseminate project implementation information to the public in the command areas and continue public consultation in the SDAP implementation. The total cost of the program is estimated at about US $8.9 million.

246. Safety of Dams (OP/BP 4.37). Although barrages are not dams, they are indeed major hydraulic structures on which millions of hectares of irrigated land and population are dependent. The dam safety policy is triggered and an independent panel of experts would review the project implementation and construction. The panel has been appointed and has already reviewed proposed designs of main project structures.

247. International Watenrays(OP7.50). The project area is located on the Indus River which is an international waterway thus automatically triggering the international waterways safeguard under OP7.50. However, the project essentially involves rehabilitation of existing barrage facilities. It does not involve works and activities that would exceed the original scheme, change its nature, or alter or expand its scope and extent to make it appear a new or different scheme. Therefore given the nature of works envisaged under the proposed project: (a) the project will not adversely affect the quality or quantity of water flows to other riparians; and (b) it will not be adversely affected by other riparians’ water use.

83 248. The project team has also reviewed Article VI1 of the Indus Waters Treaty of 1960 between India and Pakistan and concluded that a notification by Pakistan to India under paragraph (2) of the said Article VI1 is not required, as the project will not cause interference with the waters of any of the Rivers and will not affect the other riparians materially. Therefore, the Project falls within the exception to the notification requirements of OP 7.50, set forth in paragraph 7(a) of OP 7.50. Disclosure and Consultations

249. The ESIP, SDAP and RPF was submitted to the Bank’s InfoShop on November 2,2009. The Executive Summary was circulated to the World Bank Board on December 16, 2009. The summary was translated into Urdu and distributed during the consultation and disclosure sessions. Consultations and discussion with the people have been continuing since the feasibility studies in 2005. They were intensified during detailed design stage for the Environment and Social Assessments. The detailed record of consultations including the list, location and contacts of participants is given in the ENSA report and also in Annex 10.1. Briefly describing the consultations done in November 2007 in Villages Kacha Arain and Chandana (10 participants); in February 2008 at Jinnah Barrage (6 local fishermen); in February 2009 in Village Chianki Shumali (20 participants), in Village Kurar (35 participants), in Village Nali Janaubi (1 5 participants), in Village Noonvana (1 5 participants), Village Tilokar Janaubi (12 participants), Village Rajar (19 participants) and in March 2009 in Village NameWali (6 participants). The participants ranged from councilors, farmers, livestock farmers, fishermen.village headmen and others from different sections of the society. In particular for preparation of SDAP, extensive consultations were carried out in 69 villages and in each village, several participants attended. Special attention was given to consultation and discussions with female participants to elicit their views. In 70 villages, more than 700 female participants attended these discussions. The formulation of EMP and SDAP is based on these discussions and consultations among other things.

250. After formulation of the reports and EMP and SDAP, two disclosures were carried out first (in the third week of September 2009) and second on October 3, 2009 at the project site. The Punjab EPA held the hearing and public meetings in the process of providing no objection to the project and its EA and SA reports. The public meetings were participated by large groups of people, and stakeholders including NGOs, women, fishermen, farmers etc. The copies of the ENSA reports have been made available to the public at the IPD office, site office, District Library of Mianwali and Khushab and at the Punjab EPA.

84 Annex 10.1 Environmental and Social Assessments and Environmental Management and Social Development Action Plans Pakistan: Punjab Barrages Phase-I1 Project (PBIP-11)

251. This Annex is based on, the Executive Summary prepared of Environment and Social Impact Assessment and Action Plans (October 2009). Indeed, much of the text is copied as such from this Summary. However, to avoid repetition some of the sections are not presented here as such and instead references are made to the sections of the PAD.

Introduction

252. The Government of Punjab is planning to undertake the Punjab Barrages Improvement Phase-I1 Project (PBIP-11), and is seeking the World Bank (WB) finances for this purpose. In compliance with the Pakistan's statutory requirements and the WB safeguard policies, an Environmental and Social Impact Assessment (ESIA) study of the proposed project has been carried out. In addition, a Social Development Action Plan (SDAP) has been developed, to address the social issues of the project to a greater depth. This document presents the summary of ESIA and SDAP; the complete versions of ESIA and SDAP are presented under separate covers. The ESIA and SDAP will be collectively referred to as the Environmental Assessment (EA) studies in the rest of this document. Project Location

253. The proposed project involves rehabilitation and modernization of the Jinnah Barrage, and improvement and modernization of the irrigation and water management system in the Punjab province.

254. The Jinnah Barrage is located at 32" 55.1846' North and 71" 31.1812' East across Indus River, approximately 5 km south of the town of Kalabagh in the Mianwali District of Punjab, Pakistan (see Map IBRD 37316). The area irrigated by the Barrage is spread over the Khushab, Bhakkar, Layyah, and Muzaffargarh districts, in addition to the Mianwali district.

255. Jinnah Barrage Rehabilitation and Modernization. Commissioned in 1946, the Jinnah Barrage is one of the most important structures in Pakistan's irrigation system, handling all the Indus river water. Although it has a design discharge capacity of 950,000 cubic feet per second (cfs) corresponding to a 100 year return flood, it is able to handle a flow of 1.1 million cfs, corresponding to a 600 year return flood. There is only one off-take canal - the Thal Canal, which supports agriculture on 2.1 million acres of land in the Mianwali, Khushab, Bhakkar, Layyah, and Muzaffargarh districts of the Punjab province. These districts are situated in the Thal (desert) arid zones where crop production without irrigation can support only subsistence living. About five million people in the five districts inhabit the command area and their livelihoods depend directly or indirectly on the irrigation supplies of the Thal Canal. Roughly 695,000 people derive their livelihoods directly from the irrigation supplies of the Canal. The Canal also recharges the aquifers from which water is pumped to meet water requirements during critical periods. The Canal water is also used for drinking purpose, cattle consumption, and domestic uses in the entire command area. Most significantly, it is the lifeline in 120,421 acres in the Mohajir Branch canal command where the underground water is saline and a population of nearly 328,000 people in 94 villages is totally dependent on the canal water for drinking purpose and crop production.

256. Some defects developed in the mechanical installations and working of the gates of the Barrage, and were repaired during 1992-93. In 1998, the Irrigation and Power Department (IPD), Government of Punjab, reviewed the condition of all the barrages in the province and identified Jinnah Barrage as a priority project for rehabilitation and modernization. Subsequently, a number of studies were carried out to determine the condition

85 of the Jinnah Barrage which identified functional and structural problems. Consequently, in December 2003, the Punjab Government commissioned the feasibility study for the rehabilitation and modernization of the Jinnah Barrage. The study confirmed the existence of some serious hydraulic and structural problems at the Barrage.

257. .In 2005, the Pakistan Water and Power Development Authority (WAPDA) finalized the agreement for construction of the Jinnah Hydropower Plant on the right flank of the Jinnah Barrage. The contractor for the construction of the Hydropower Plant under the agreement for the Power Plant will also modernize and automate 14 of the 56 gates of the Jinnah Barrage. The rehabilitation and modernization of the remaining gates of the Jinnah Barrage will be carried out based on the actual survey conducted and design prepared by the design consultants during the proposed project.

258. Improving WaterDrrigation Management. Punjab covers about 60 percent of the Indus Basin Water System (IBWS), and has a complex river and link canal system. Despite, of this, water allocation and management in various parts of the system is carried out using hand calculations, including estimation of demands and pattern of releases from the reservoirs. Also, there is no well established and integrated system of water accounting in various parts of the system i.e. at barrages, rivers, link canals, maidbranch canals, and distributaries etc. Instrumentation used for measuring water, sediments, cross-sections of the river and canals are outdated and in many cases hand held staff gauges are used. Punjab needs to modernize its water allocation and management system and water accounting system with modem simulation and optimization models and decision support system. The water accounting system being initiated by the Program Monitoring and Implementation Unit (PMIU) needs further updating and development. Project Components. For project components see Annex 4.

Project Construction

259. Most of the construction activities during the proposed project will be confined to the river corridor; however the following project activities/facilities will be located outside this corridor: The project and construction camps, labor camp, equipment and material yards, and additional depots. Construction of haul tracks in order to transport construction material.

0 Batching plants. Borrowing areas for obtaining earth, sand, coarse aggregates, and stone for rip-rap.

260. The locations for the above facilities have already been identified at the project site.

261. Meeting Water Demand Downstream of the Barrage. Water flows downstream of the Barrage cannot be interrupted during construction as flows going downstream supply water for almost whole of IBWS, covering Punjab, Sindh and Balochistan. Construction is to be done in a manner so that flows to the Thal Canal (off-taking from the Jinnah Barrage) are not compromised. For this purpose, PMO and the Design Consultants carried out hydrological analysis to determine the river flows requiredobserved for systems downstream from the Jinnah Barrage as well as for the Thal Canal. Data from 1998-2007 on 10-daily basis was used for carrying out this analysis.

262. Based on this analysis, a decision has been taken to design the coffers dams (called temporary works) to allow passing a maximum discharge of 250,000 cfs downstream considered adequate for meeting the water demand for to be system downstream and for the aquatic life . The crest levels of the cofferdams upstream and downstream is determined based on this discharge, and the strength of the coffer dams would be designed accordingly. This discharge could easily be passed through 45 percent of the available width of the Barrage; hence, sequence of construction and repairs to the gates is determined accordingly.

86 263. Flow to the Thal Canal during Construction Period. The Thal Canal is a perennial canal i.e. it has the right to draw water in both seasons of the year, winter (Rabi) and summer (Khat-#). As the winter supplies to the Canal and to the river are lower than the summer, the construction would be concentrated during the winter months. Accordingly, winter flows are analyzed here. The official and regular closure for Thal Canal is three weeks, during which no water is supplied to the Canal and inspection and maintenance of the key structures of the canal are carried out. About three-week closure is generally scheduled during winter season in the month of January; however, its timing varies from year to year depending upon the forecast of availability in the river system and some other factors.

264. Construction Planning and Sequencing of Works. The construction is planned to be completed in four calendar years (also called contract years) and three construction years. The construction would be concentrated from October-May/June and the period between the months of June to September when river flows would be high would be used for preparation for the following construction year. The contract has to be awarded in a manner that that contractor is mobilized in May i.e. before first year of construction (October to June). In the first year, construction would be carried out on the right side of the barrage covering gates 27 to 56 (the Barrage has 56 gates and they are numbered 1 to 56 starting from the left to the right bank). The coffer dams would be constructed in winter to secure, cordon and de-water the construction area. The construction would be completed in this section by May of the following year and the coffer dams would be dismantled by end May early June to allow summer flows to pass. The same cycle would be followed on the left side in the winter of second year till summer of the third year. In the winter of the third year gate Number 1 of the Barrage which is close to the Thal Canal would be rehabilitated during the normal canal closure period of three weeks. The detailed sequencing is given in Table 4.1 (Annex 4), and a schematic diagram of the construction works is given in Figure 4.1.1 (Annex 4).

265. Most of the construction activities during the proposed project will be confined to the river corridor; however the following project activities/facilities will be located outside this corridor:

0 The project and construction camps, labor camp, equipment and material yards, and additional depots. Construction of haul tracks in order to transport construction material.

0 Batching plants. Borrowing areas for obtaining earth, sand, coarse aggregates, and stone for rip-rap.

266. The locations for the above facilities have already been identified at the project site.

267. Standby Feeder Canal. A standby feeder canal is planned to be constructed as part of the proposed project, to supply water to the Mohajir Branch of the Thal Canal, the command area of which is underlain with saline groundwater, to meet critical needs in case there are any delays in completing construction beyond the normal closure period of three weeks. The capacity of this standby canal has been determined to be 1,500 cfs, based upon analysis presented earlier, and in view of the capacity of the Mohajir Branch.

268. Project Implementation Arrangements (See Annex 6 for more details). The Punjab Irrigation and Power Department (IPD) of the Government of Punjab will be responsible for the execution and implementation of the project through the Project Management Office (PMO). PMO has extensive experience in large scale construction projects including Taunsa Barrage Rehabilitation Project. PMO will be headed by a Project Director with four units: (i) Finance Unit; (ii) Procurement Unit; (iii) Engineering Unit; and (iv) Environment and Sociology Unit. PMO would be supported by two sets of consultants: Project Implementation Consultants (PICs) (Supervision Consultants), and the Monitoring and Evaluation (M&E) Consultants.

87 Objectives and Scope of EA Studies

269. The EA studies have been conducted in response to the Pakistan Environmental Protection Act of 1997, and the WB safeguard policy, OP 4.01. The primary objective of the ESIA study is to identify the potential negative impacts of the proposed project on the physical, biological and social environment; and to propose measures to avoid, reduce or compensate these negative impacts. SDAP augments ESIA, and has primarily been developed to enhance the project benefits to the local communities. The EA studies and hence the present Summary ESIA cover the environmental and social aspects associated with the entire project interventions and facilities described in Section 1.1.2 above. Also covered under these studies is the Thal Canal command area, which may be affected due to the possible extended canal closure during the project works at the Barrage.

Study Methodology

270. The EA studies were conducted using a standard methodology of reviewing the project details; identifying and reviewing the secondary literature; screening of potential environmental and social aspects and impacts of the project, collecting baseline data on social and environmental aspects, and developmental needs of the affected communities; carrying out consultations with primary as well as secondary stakeholders to apprise them of the project interventions and to obtain their views, concerns and suggestions regarding the project, its impacts and the way these impacts should be addressed; identifying and characterizing the potential impacts of the project on the environment and communities, and developing the environmental and social management plan (ESMP), which provides the mechanism to effectively implement the mitigation measures described earlier; and developing SDAP, which identifies a program of activities to address public health impacts of the project, and also includes a social assistance program in both the command and barrage areas to enhance the social benefits of the project. Analysis of Alternatives

271. As part of the feasibility study and while conducting the EA studies, various project alternatives were considered. These included the no-project alternative (do-nothing alternative), project design alternatives, and alternatives for measures to mitigate the environmental and social impacts of the project. These alternatives are briefly discussed here; more details are provided in the ESIA report of the project.

272. No-Project Alternative. The no-project alternative was rejected on the basis of its severe economic, social and environmental consequences. This scenario would involve continuing to carry out operation and maintenance of the Barrage at the present level and not addressing the causes of the ongoing deterioration of the structure. As described above as well, over the past fifty year, the apron downstream of the weir has undergone erosion, thus adversely affecting the hydraulic characteristics of the water flow over the weir. The continuing deterioration is likely to exacerbate the existing condition and erosion of the main Barrage structure, and may make the Barrage dysfunctional and even place its structural integrity at risk particularly in the high-flood event.

273. The consequences of the dysfunctional barrage would include disruption of the Thal Canal irrigation system thus severely affecting the cultivation, and loss of freshwater supply for a population up to five million in the canal command area, in addition to adversely affecting the natural flora and fauna in the area. The annual agricultural economic returns and the associated indirect economic activity in the command area have been estimated to be about 5 billion Rupees and 2.5 billion Rupees, respectively.

274. In the extreme event of the structure failure of the Barrage, significant losses of downstream life and property, disruption of road traffic across the Barrage and in the flooded areas, and large-scale land erosion and sediment deposition on the flooded land will also take place, in addition to the consequences of the dysfunctional barrage described above. Since the nature and magnitude of these potential losses are quite unacceptable, the no-project alternative has been duly rejected.

88 275. Project Design Alternatives. No alternative for the project location exists, since the project involves works on an existing structure. During the feasibility study, several alternatives were considered. The first alternatives would consist of replenishing of stone apron in both under sluices in gabions; and replenishing of stone apron downstream of the existing barrage in weir portion. The main advantage of this alternative would be the absence of any risk to the existing barrage structure, human life, machinery and equipment during construction. However, its disadvantages would include threat to the aquatic life posed by the gabions; negative impacts associated with quarrying and transporting stones for gabions, and gabion construction; and rise of water level upstream of the Barrage, consequently inundating adjacent areas, causing damage to crops and property. 276. The second alternative would consist of two step weir at 200-250 feet, a 2,807 feet long weir in front of weir portion of the barrage width, two divide walls about 75 feet long, and replenishing of stone apron in both under sluices in gabions. The main advantages of this approach would include the increased safety factor of the Barrage, and the ensured supply of water to the Thal Canal. The disadvantages of this design alternative would include increased risk to the existing barrage structure, and associated loss of human life, machinery and equipment during construction, which would be carried out very near (200 - 250 feet) to existing the structure; potential threat to fish and other aquatic life which can be trapped in the gabions; environmental issues such as induced erosion, loss of natural habitat from where the stones will be brought for the gabions; and dissolution of rock and minerals from the gabions due to continuous flow of high velocity water resulting in deterioration of downstream river water quality.

277. The third alternative considered would involve carrying out the repairs through intensive maintenance during regular closure periods was considered and found not viable. Such repairs have been made previously also on emergency basis during the regular closure period and running water, and would not be long lasting. In order to carry out proper repairs, drying of construction surface is necessary, requiring construction of coffer dams. Such repairs, even if carried out cannot resolve the hydraulic problems that barrage is facing and is inherent due to original design.

278. The fourth alternative would consist of the design features already described in the project component A is adopted. The main advantages of this alternative include less risk to the existing structure, human life, machinery and equipment during the construction activities, since these would be carried out 600 feet away from thstructure; and provision of fish ladder which will enhance the breeding habitat for fish, ultimately increasing the fish population. This design scheme would eliminate the disadvantages of the other two alternatives described above.

279. sis of the above description, it is quite evident that the fourth alternative is the best option, in view of its advantages over the other three options, with respect to the safety of the existing structure during the construction phase, the possibility of water level rise upstream of the barrage and the associated inundation of a large area, and the potential threat to the aquatic fauna. Therefore this alternative has been selected for the proposed project.

280. The various engineering designs have undergone extensive tests in a hydraulic model study conducted at the Nandipur Hydraulic Laboratory. The selected alternative was confirmed and approved by the engineers at the Laboratory.

281. Mitigation Measures Alternatives. As described above, the construction planning has been carried out to ensure that construction works which could interrupt the water flow in the Thal Canal are carried out during the normal canal closure period of three weeks. However, any unforeseen delays in these construction works

89 may cause an extended canal closure. To mitigate the consequences of this possible eventuality, the alternatives discussed below were considered during the project design phase.

282. The first alternative would involve providing assistance to the communities - affected by the possible extended canal closure - for the reduced crops yield and rehabilitation of their water supply schemes. The second alternative would involve providing a temporary diversion channel in the left guide bank to feed the Mohajir Branch of the Thal Canal. This canal would provide water to the Mohajir Branch, in the unlikely event of the extended canal closure. The third alternative is essentially a combination of the first two options - providing assistance to the affected communities for the reduced crops yield and rehabilitation of their water supply schemes, and constructing a temporary diversion channel in the left guide bank to feed the Mohajir Branch - in addition to providing wheat seeds of the recommended variety to the affected communities.

283. The third mitigation alternative has been selected for the proposed project, since it maximizes the project benefits to the affected communities. This alternative was selected after extensive consultations with the stakeholders and it was approved by the community.

Legislative, Regulatory and Policy Review

284. An overview of the national legislative and regulatory framework as well as the WE3 safeguard policies is provided here. More details are presented in the full versions of ESIA and SDAP.

285. National Legislation and Regulations. The Pakistan Environmental Protection Act of 1997 is the apex environmental protection legislation in the country. Section 12 of the Act makes it mandatory for the proponents of any development project to conduct an Initial Environmental Examination (IEE), or an Environmental Impact Assessment (EIA), if the project impacts are significantly adverse and diversified. The EA studies of the proposed project have been conducted in pursuance with this Act.

286. The National Environmental Quality Standards (NEQS) implemented in 2000 restricts the releasing liquid effluents beyond the prescribed limits into any water body and the gaseous emissions into the atmosphere. The noise levels from running of vehicles, construction machinery and equipment have also been prescribed. These standards will be binding on the contractor during the proposed project.

287. The Land Acquisition Act (LAA) of 1894 is the primary land acquisition and compensation legislation in the country. The LAA is the most commonly used law for acquisition of land and other properties for development projects. Though no land acquisition is envisaged during the proposed project, the provisions of this Act will be applicable, should any such need arises during the project execution.

288. The other relevant legal instruments which may be applicable to the proposed project and binding upon the contractor include the Forest Act (1927); the Punjab Wildlife Protection Act (1974); the Antiquities Act (1975); the Punjab Local Government Ordinances (2001); the Regulation of Mines and Oil Fields and Mineral Development Act (1948); the Factories Act (1934), the Explosives Act (1884), the Canal and Drainage Act (1873); the Employment of Child Act (199 1); and the Pakistan Penal Code (1860).

289. World Bank Operational Policies. See Annex 10.

Environmental and Social Baseline Conditions

290. The salient features of the baseline conditions of the physical, biological and social environment of the project area are presented here. For the detailed baseline description, please see the ESIA and SDAP reports.

90 Physical Environment

291: The Jinnah Barrage is the first major diversion structure on the Indus River after it enters the plains of the Punjab province. It is situated about 126 miles (203 km) downstream of Tarbela Dam and 16 miles (26 km) downstream of the site for the proposed Kalabagh Dam. The Thal Canal and its command area are located in the Sindh Sagar Doab'. Most of this doab, the most western of the doabs of Punjab, was an unproductive wasteland (known as the Thal Desert) before the construction of the Jinnah Barrage on the Indus River near Kalabagh in 1946. The Thal canal system, which draws water from the barrage, has turned parts of the desert into fertile cultivated land. The soils of the area are generally heterogenic, showing textural variations both horizontally and vertically. These soils have been derived from the alluvium of the Indus River and piedmont deposits from the surrounding hills. The soils of the downstream flood plain are generally moderately coarse to coarse textured with pockets of medium textured soils, while the soils in the upstream reaches are generally medium to moderately fine textured. The soils are generally salt free and fertile. The area is generally flat and consists of mostly proprietary lands. The dominant land uses/land forms in the area include flood plains, used for cultivation; pasture lands, used for livestock grazing; irrigated agriculture land in the canal command area; and barren wasteland.

292. Surface water is dominated by the Indus River. The flows are perennial and provide the main freshwater resource for the area. There are seasonal nullahs9 on both sides of the river which carry rainwater from the adjoining areas into the river during rainfalls. There are no major sources of industrial pollution in the upstream of the Barrage but wastewater from the upstream towns and villages, in particular Kalabagh, Mari and Pacca Shah Mardan does flow into the upstream pond of the barrage. Villages at downstream of the barrage tend to discharge wastewater into the nullahs and during the dry season the flows do not reach the river at surface level. The river water quality is generally suitable for irrigation purposes but surface water testing at barrage site indicates that the available water is not suitable for human consumption.

293. The groundwater within the immediate project area is plentiful due to the presence of the river, and it is generally suitable for domestic and other uses. However, there are areas to the east of the project area within the canal command area in which the groundwater is saline. In a number of villages the groundwater is unsuitable for potable purpose, whereas in some villages it is even not suitable for non-potable domestic use. Extensive water quality testing was carried out during the EA studies to delineate the saline water zone within the canal command area.

294. There are no major anthropogenic sources of air pollution in the immediate vicinity of the barrage and the canal command area, except the vehicular traffic on the major roads. During the EA studies, the ambient air quality was tested, indicating that the air quality was reasonably good, and the levels of the criteria pollutants (carbon monoxide, sulfur dioxide, nitrogen dioxide, and particulate matter) were found to be well within the acceptable limits.

295. Natural Flora and Fauna. The flora of the project area can be divided into two zones: that occupying the riverine areas, and that occupying the higher surrounding areas.

296. The natural floral species found in the riverine areas include Lai or Salt Cedar (Tamarix dioica), Pilchi or French Tamarisk (Tamarix gallica), Khaddar or Elephant Grass (Typha elephantina), Sarkanda or Bengal Cane (Saccharum munja), KaiKans or Wild Sugarcane (Saccharum spontaneum), Navra or Giant ReedISpanish Cane (Arundo donax), Kikar or Prickly Acacia (Acacia nilotica indica), Shisham or Indian Rosewood

8 Doab is a term used in India and Pakistan for a tract of land lying between two confluent rivers. 9 Nullah: natural water stream 91 (Dalbergia sissoo), Ber or Jujube (Zizyphusjujuba), Mesquette or Mesquite (Prosopis juliflora), Jand (Prosopis cineraria), Khabbal or Bermuda Grass (Cynodon dactylon), and Bhan or Euphrates Poplar (Populus euphratica).

297. The natural floral species found in areas outside the riverine tract include Jandi or Chhenkur (Prosopis cineraria), Karir (Capparis aphyla), Vann (Salvadora oleoides), Peeloo (Salvadora persica), Kikar (Acacia nilotica indica), Lana or Bush Seepweed (Suaeda fructicosa), Lani (Salsolafoetida), and Khabbal or Bermuda grass (Cynodon doctylon).

298. The expansion of human activities in the area in the form of larger scale agriculture, construction of linear infrastructure and enlargement of populated areas has had negative impacts on the wildlife of the area. As the natural vegetation has been cleared to enlarge and combine agricultural plots, to establiswexpand communities, and to develop infrastructure, the natural habitats have been lost and connectivity between the remaining habitats has been disrupted. As a consequence, much of the native fauna has retreated to areas which are less disturbed and less accessible to humans. Only those species, which have adapted to this modified habitat, exist in the area; and species such as wild boar, hare, jackal, porcupine and fox, are rarely seen in the project area and its surroundings.

299. The project area falls within the Indus Flyway, which is one of the routes of the migratory birds in the region. The migration route from Siberia to the various destinations in Pakistan crosses the Karakorum, Hindu Kush, and Suleiman ranges, and follows the Indus River down to the Indus delta. The southward migration begins in November, and the northward migration starts in March, though these periods may vary depending upon weather conditions in Siberia and/or Pakistan. The Indus Flyway is important for both the abundance and species diversity of the birds using the flyway. The key species using the flyway include waterfowl, cranes, teal, pintail, mallard, gadwall, white-headed duck, houbara bustard and Siberian crane.

300. The Jinnah Barrage and its surroundings do not provide any attractive habitat for the migratory birds, particularly because of the presence of a large lake adjacent to the Chashma Barrage (about 60 km downstream of Jinnah Barrage), which provides an attractive wintering habitat for these birds. However, some belus (river island) do exist near the Jinnah Barrage, some of which support a thick reed growth and hence provide habitat for wild birds.

301. The common fish species found in the river of the area include Mahsher (Tormacrolepis),KhagdThaila or Catla (Catla catla), MoriMorakhi or Mrigal Carp (Cirrhinus mrigala), Gulfam or Common Carp (Cyprinus carpio), DaheeKalbano or Orange Fin Labeo (Labeo calbasu), Raho/Rohu/Dumbra or Rohu (Labeo rohita), Singhari or Long-whiskered Catfish (Mystus Osteobagms), Bachuwa or River Catfish (Clupisoma garua), Mullee or Wallago/Freshwater Shark (Wallago attu), and Saul (C'halla hlarulius).

302. According to the officials of the Fisheries Department, most of the above fish species move upstream of the Barrage for breeding, particularly during the high-flow months of June, July and August, using the fish ladder. In addition to the ecological significance, most of these species have economic importance as well, and the annual fish catch between Jinnah and Chashma barrages amounts to about four to five thousand metric tons, with an economic value of about 100 million rupees.

303. During the EA studies, a 24-hour fish count was carried out at the exit of the fish ladder at the Jinnah Barrage, with the help of a 1-inch mesh. The catch during this fish count included 90 Morakhis, 40 Khagas, and 35 Bachuwas. This fish count also somewhat validated the movement of fish across the fish ladder (though detailed studies are needed to ascertain it more definitively).

304. Historically the Indus Blind Dolphin (Plantanista minor) species was distributed in the Indus River. In the early 60s, Indus River was regulated by construction of barrages, dams and link canals which fragmented the habitat, resulting into a decline in the dolphin population. Now its population is limited between the Chashma

92 Barrage and the Kotri Barrage, which is the last barrage on the river near Hyderabad, Sindh. Though the Worldwide Fund for Nature (WWF) reports the presence of a thin population of the Indus Dolphin between Jinnah and Chashma barrages, the local community and the Wildlife Department assert that this species does not exist in this river tract anymore. A population count conducted in 2001 indicated two dolphins between the Jinnah and Chashma stretch.

305. Protected Areas. No protected areas exist at or in the immediate vicinity of the Barrage or the canal command area.

306. Socioeconomic Conditions of the Project Area. Administratively, the Jinnah Barrage is located in the Mianwali district of the Punjab Province, whereas the command area of the Thal Canal lies in the Mianwali, Khushab, Bhakkar, Layyah, and Muzaffargarh districts. About 5 million people (based upon 1998 census) inhabit the command area and their livelihoods depend directly or indirectly on the irrigation supplies of the Thal Canal. Roughly 695,000 people (based upon 1998 census) derive their livelihoods directly from the irrigation supplies of the Canal.

307. The Mohajir Branch command area lies in the Khushab Tehsil (Sub-division of district) of the Khushab District. According to the 1998 census, the Khushab District had a total population of 905,711, of which the rural population was 81,457 (75 percent); whereas the Khushab Tehsil had a population 731,028, of which 571,150 (78 percent) were living in the rural areas. The surveys during the EA studies have revealed that about 328,000 persons, comprising of 94 villages, are living in the saline zone of Mohajir Branch command area, which was the focus of the socioeconomic baseline studies, since most of the project’s social impacts are likely to take place here.

308. The majority of families in the area live in joint family system, since the sharing of resources is beneficial in term of joint incomes, manpower (for agricultural practices) and basic amenities like water, electricity, housing and food. About 95 percent population is Muslim whereas five percent consist of Christians and other minorities. Most dominant ethnic group belongs to the Awan tribe; other ethnic groups include Chaudharies, Juts, Khels, Arain, Syed, Bhatti, Khokar and Rajputs. The ethnic minorities include Pathan and Baloch that are living in the vicinity of Khushab City. About 95 percent of population speaks Punjabi and Saraiki, but Urdu is also commonly understood.

309. In general women’s social status in the area is low as compared to men. It portrays the typical patriarchal society where men dominate in all spheres of life and only they have the decision-making power. Women’s public participation in village institutions is minimal, e.g. the women cast their vote only with the consent of male family members. Within the family, mostly men make decisions, although elderly women may be consulted over family or household affairs. Most of the women in villages are uneducated, but hardworking and perform their duties at home as well as working outside in fields with their male family members. It is reported that about 14 percent of women are engaged in sowing, seven percent in weeding / mowing, and 79 percent in harvesting and cattle rearing. The basic problem and need of women is availability of clean drinking water. They fetch water from canal, springs, water supply schemes, ponds and hand pumps, but generally the water quality is poor. Sweet water is available from hand pumps installed at the canal banks of the Mohajir Branch. Women fetch water on donkey carts, camel carts, and often by foot. They get poor quality water for washing, cleaning and for other non-potable use from hand pumps installed in their houses.

3 10. The education levels in the area are quite low; the primary level education opportunities for boys and girls are 72 percent and 67 percent, respectively. There are few secondary level schools in the surveyed villages of the Mohajir Branch. The higher education opportunities are available only at the town level. The school enrollment rate for girls is much lower than that for the boys, especially after primary level. During the consultation meetings, participants acknowledged the importance of education, and included it in priority needs

93 of the village. Although people realize the importance of education of their daughters, but they cannot manage it because of economic and cultural reasons as well as difficult access to girls? school in the area.

3 11. The situation of the health services in the area is also dismal. Out of 94 villages, only 12 villages have the Basic Health Units (BHU); people from the rest of the villages go to the private clinics in the nearby towns, and for the serious illnesses, to the District Head Quarter Hospital at Khushab, or to Lahore and Sargodha. It is found that many people suffer from the skin diseases due to water impurities. The water borne diseases such as cholera, hepatitis, typhoid, goiter, eye problems, and diarrhea are quite common. Some of women expire during delivery cases. Many women are malnourished usually being the last ones to eat their meals in the family.

3 12. The major source of income of people in the project area is agriculture and daily-wage labor. According to the baseline survey, agriculture is the most widespread source of income in the project area (65 percent), followed by the daily-wage labor (30 percent). The remaining (five percent) are engaged in miscellaneous employment, including government and private jobs. The economically better-off families mostly belong to the agriculture sector.

313. The economic opportunities are very limited in the project area, and people face difficulties to find employment other than daily-wage labor, which is usually irregular. Most people lack capacity or skills that could contribute towards their own livelihood as well as in the local economy, and also lack enterprise development capability. The earning level of the non-farm workers, such as cobblers, carpenters, blacksmiths and barbers, is usually very low, and in most of the project area, villagers pay two 100-kg bags of wheat and rice per year to these non-farm workers against their services.

314. The people usually utilize credit facilities at the local level. Almost everyone has an ongoing credit- account with the village grocery shop, the landlord or influential of the village, or with relatives or neighbors. Once the previous borrowing was taken care, the next started. These loans are usually cleared after a good crop or selling of an animal like a cow, buffalo or goats during festivals. The National Rural Support Program (NRSP) has introduced micro-credit loans at the community level and especially for the poorest groups of the community. Currently only 12 out of 94 villages and dhoh (small village) of saline zone have been targeted by NRSP.

3 15. There exist many small scale industrial units developed by the individual industrialists in the area. In addition, there is one cement factory located in Mouza Chainki and one Soda Ash manufacturing plant functioning in Mouza Warcha. Most of the skilled labor in these industrial units is hired from areas outside the saline-water zone, whereas local labor is hired for low status jobs.

3 16. Land is a symbol of prestige and honor and most of the communities do not sell their agriculture land. Land cost depends on type and quality of land. In canal command areas the land value ranges between Rs. 250,000 to 400,000 per acre. Outside the canal command area (rain-fed or barani land), the land price varies between Rs. 50,000 to 150,000 per acre.

317. Livestock is the backbone of agriculture society and third main source of income of the project area. About 80 percent households own livestock having 1-3 animals per household, with cow as the most common animal. Animal feed is available in the shape of green and dry fodder. Some villages have community-owned (shamelaat) land, which is used as grazing land for their farm animals.

3 18. About 70 percent of the population is engaged in irrigated agriculture in saline-water zone of the Mohajir Branch and its distributaries, which irrigate round about 120,041 acres of land. The majority of the farmers are involved in subsistence farming only, and many families cannot support farming activities due to limited resources and they have to rely upon other means of income, such as employment and labor. The major cropping seasons in the area are Kharif- for the crops sown in summer, and Rabi - for the crops sown in late

94 autumn. A large variety of crops are cultivated in the area, including wheat, gram, oil seeds, lentils, cotton, sugarcane, groundnut, millet (bajra), sorghum (jowar), fodder, vegetables and fruits. Sugarcane and cotton are the main cash crops of the area. Citrus fruits, mangoes and guavas are exported from the region. Although most of the land in the project area is irrigated by Mohajir Branch canal, an area of about 101,606 acre is rain- fed. Irrigation in {his area is supplemented with tube-wells, to grow crops such as millets and sorghum. Otherwise it is used as grazing land for the livestock.

3 19. Electricity is available in almost all the villages in the project area. This energy source is being utilized mainly for lighting of the houses and operation of tube-wells for drinking water supplies and irrigation. The Khushab and Jauharabad cities, and Mitha Tiwana, Hidali and Quaidabad Town Committees are connected with the natural gas network and the gas is consumed mainly for cooking purposes. Pahari kikar (Prosopis) specie is used as firewood in the villages, which is abundantly available in the area. Some people purchase firewood and dung cakes for fuel.

320. Most of the villages in the project area have metalled (asphalt) roads that are in good condition except the few villages like, Chak 59 / MB and Ghous Nagar of Union Council 59 / MB where roads are in very poor condition. Construction and maintenance of village roads is the responsibility of local government. Two provincial highways also pass through the target area and connect Punjab with the North Western Frontier Province (NWFP). The telecommunication facilities are available only in a few villages; rest of the communities rely upon mobile phones, which are very common among the communities in the area. The concerned Patwaries disseminate information such as regarding the annual canal closure to the Numberdar through mobile phones.

321. The institution that provides governance on traditional community and political issues is the Punchayat (council of elders) with representation from different clans and castes including, Numberdar, Nazim, Naib Nazim and notables of the area. The council arrives at decisions through consensus and convenes when the need arises, although it has been noted that in many cases no decision is made since no consensus can be arrived at. The group discussions during the EA studies have revealed many informally organized group activities, particularly with respect to shared agriculture labor for watercourse (Bhal) cleaning. The informal support of the religious clerics (Mullah) is also available particularly in community based works.

322. In more than 87 percent villages of the project area, no formal community based organization (CBO) is functional. The National Rural Support Program (NRSP) is working in the village areas and has established male and female CBOs for the particular tasks. Mostly, women and children are responsible for fetching water for drinking and domestic use, and spend four to five hours daily, for this purpose. Out of the 54 water supply schemes, about 60 percent schemes are functional and the remaining are non-functional. Most of the drinking water supply schemes have been abandoned due to lack of coordination and management among community groups. The groundwater quality was assessed in each surveyed village by using portable electric conductivity meter. The water quality of most of the surveyed villages is brackish, except hand pumps which are installed at banks of Mohajir Branch and its distributaries. The Hidali and Adhikot distributaries have sweet underground water pockets.

323. In addition to the above, the water samples from different sources including, springs, tube-wells, hand pumps and canal from different localities of the saline zone were collected for detailed chemical analysis. These analysis indicate that presence of biological contamination is quite common in the area, in addition to having high sulfates, high turbidity and high total dissolved solids (TDS) in some of the samples (the complete results of these analysis are provided in the SDAP report).

95 Stakeholders Consultations.

324. Detailed stakeholder consultations were carried out while conducting the EA studies. A summary of the process and outcome of these consultations is provided here. The objectives of the stakeholder consultations (before and) during the EA studies of the proposed project included apprising the people of the area about the project interventions and their potential impacts, soliciting community concerns and recommendations regarding the proposed project and addressinglincorporating them in the project design to the extent possible, sharing with the local communities the mitigation measures included in the project design to address the potential impacts, ascertaining the developmental needs of the local communities to design SDAP, and promoting among these communities a general goodwill towards the project.

325. Consultation Process. Consultations and discussions with the people of the area have been continuing since the project?s feasibility studies in 2005. This process was intensified during the EA studies, and separate rounds of consultations were held as part of the ESIA and SDAP studies. During the project execution, this process will be continued, particularly during the implementation of the development assistance initiatives proposed in SDAP, and a comprehensive communication strategy has been devised for this purpose (further discussed in the next Section).

326. The first step employed for the consultations carried out during the EA studies was the identification and categorization of the stakeholders. Two types of the stakeholders were identified: the primary stakeholders, who would be directly affected by the project; and the secondary stakeholders, who would be indirectly affected by the project (or who could indirectly affect the project).

327. Subsequent to the stakeholder identification, guidelines and questionnaires were prepared for conducting the focus group discussions/meetings, which were arranged through contacting the key persons from the community, such as Nazims (head of local Government), village heads, and patwaris (land revenue and cropped area record keeper).

328. After completing the preparatory steps described above, the consultations were carried out in the communities. During the ESIA study, stakeholder meetings and focus group discussions were held in 69 villages of the Thal Canal command area, whereas for developing SDAP, such meetings were held in all of the 94 villages of the Mohajir Branch command area. To meaningfully include the women of the area in the consultation process, separate focus group discussions were arranged both during the ESIA and SDAP studies, and the female sociologists conducted as many as 70 consultation meetings.

329. The consultations with the secondary stakeholders were carried out in parallel to the community meetings. These consultations were held with officials and representatives of public and private departmentdinstitutions, including IPD (PMO Barrages), Union Councils, Public Health and Engineering Department, Agriculture Department, Forest Department, Livestock Department, Fisheries Department, Education Department, District Government and Tehsil Government. The consultation process during the EA studies comprised a total of 214 meetings involving 1,963 participants. Table 10.1.1 below summarizes these meetings; the details are provided in Annex A (to the Executive Summary of WSIP) .

330. During the above meetings, the participants were informed about the project objectives and its salient features, and also that during the construction phase, the Thal Canal could be closed for six weeks, including three weeks of routine annual canal closure. The participants were also informed regarding the mitigation measures which were included in the project design to minimize the negative impacts of the project activities. The participants were then asked to share their views, concerns and recommendations with respect to the project impacts and their mitigation measures. Particularly during the women meetings, the development priorities of the communities were also discussed. The feedback resulted in revising the initial construction plans in a manner that the canal closure remains limited to the routine three weeks. This involved construction and

96 dismantling coffer dams D and E (see Figure 4.1.1 in Annex 4) every year and rehabilitation of barrage gate 3,2 and 1 in first, second and third year of construction respectively. Also provision of a feeder canal of 1,500 cusecs to doubly ensure water supplies to most vulnerable saline groundwater area in case plans do not work as expected. Table 10.1.1 Summary of Consultation Meetings I Round Year Description Participants 2007 4 meetings with residents of the command area 26 14 meetings women of the command area 14 3 meetings with the secondary stakeholders 4 2008 16 meetings with residents of command area and 150 Barrage 5 meetings with the secondary stakeholders 6 Second Feb 2009 70 meetings with women of the command area 800 7 1 meetings with men of the command area 63 0 7 meetings with the secondary stakeholders 9 Third Sep 2009 15 meetings with residents of the command area 23 9 8 meetings with the secondary stakeholders 9 Public Oct 2009 Public hearing meeting with residents and officials of 76 Hearing the area ct A total of 214 meetings. 1,963 Consultation Findings.

33 1. Stakeholder Concerns. The key concerns of the communities included disruption of irrigation water supply during the construction phase, and the associated crop losses; disruption of the freshwater supply in the saline zone of the Mohajir Branch command area, particularly the drinking water supply; possibility of illegal fishing by the construction labor; and the possibility of damage to the habitavwater contamination, thus negatively affecting the fish population in the area. The communities also shared their expectation regarding the employment opportunities to be made available to the local population during the project execution.

332. All of the above concerns and expectations have been adequately incorporated in the project design in the form of the mitigation measures included in the Environmental and Social Management and Development Plan (ESMDP) (discussed in the next Section), and the communities were so informed during the consultation meetings.

333. The feedback received during the consultations resulted in revising the initial construction plans in a manner that the canal closure remains limited to the routine three weeks. This would involve construction and dismantling coffer dams D and E (see Table 4.1 and Figure 4.1.1 in Annex 4) every year and rehabilitation of the Barrage gate 3, 2 and 1 in the first, second and third year of construction, respectively. The revised plans also include provision of a feeder canal of 1,500 cusecs to doubly ensure water supplies to the most vulnerable saline groundwater area in case the plans do not work as expected.

97 334. Development Priorities Shared by Communities. Separate sets of consultation meetings were held with men and women in the Mohajir Branch command area, to ascertain their development needs and priorities. During the consultation meetings for men, participants from all of the 94 villages of the Mohajir Branch command area ranked their first-, second-, third-, and fourth-priority development needs; whereas during the consultation meetings for women, participants from 60 villages provided similar information.

335. The above consultations with the men indicated that the drinking water supply was by far the highest priority need, since the participants from 49 (out of 94) villages ranked it as their first priority. It was followed by the educational facilities and health facilities, since participants from nine villages and six villages ranked these facilities as their first priority development needs, respectively.

336. The findings of the women consultations were quite similar, and participants from 40 villages ranked the drinking water supply as their first priority, participants from nine villages ranked schools, and participants from seven villages ranked health facilities, as their first priority development needs.

337. The above findings were used to devise the development assistance initiative included in SDAP.

ENVIRONMENTAL AND SOCIAL IMPACT ASSESSMENT

338. Assessment Process. During the EA studies, a very comprehensive process of the environmental and social impact assessment was employed. During this process, the environmental and social assessment reports of the earlier projects of the similar nature were studied, detailed meetings were held with the project technical personnel to fully understand various aspects of the project, and very extensive field investigations were carried out to collect data on a range of environmental and social resources and parameters. In addition to this, several rounds of consultations were held with the local communities and other stakeholders during the project design and planning stage, to understand their problems and concerns regarding the project, to address these concerns while finalizing the project design and plans, and to understand the local development needs for formulating the development assistance initiative.

339. Based on the data and information collected through the process described above, an impacts matrix was developed, which identified the potential impacts of various project components and activities on the different aspects of physical, social and biological environment. Through the same matrix, the identified potential impacts were characterized also, as mild, moderate and severe impacts.

340. The next step in this process was determining the appropriate measures to mitigate the negative impacts and to enhance the benefits of the proposed project for the local communities. An attempt was made to modify and adjust the project design and construction methodology in a manner to avoid the negative impacts. Where this was not possible, mitigation and compensatory measures were identified to minimize if not eliminate the negative impacts.

341. Potential Impacts and Mitigation. The negative impacts of the project identified through the above process are briefly discussed below

342. Environmental Impacts. Since the project involves rehabilitation of an existing structure, and after completion, no changes in the operational parameters are envisaged, hence the potential environmental impacts are limited to the construction phase only.

343. The construction-related environmental impacts may include soil erosion, changes in land form and soil quality, blockage of the natural drainage, contamination of soil and water, damage to the natural vegetation and habitat, and threat to the aquatic wildlife and avifauna.

98 344. The soil erosion and blockage of natural drainage will be controlled/avoided through employing the sound engineering practices and the appropriate control measures, such as obtaining borrow material from the designated sites and re-contouring the borrow areas, selection of appropriate sitehoutes for camps and access tracks, and provision of drainage for the rainwater run-off. These measures and the restoration of the construction sites/campsites will ensure that there is no permanent change in the land form either.

345. The soil and water contamination will be controlled through employing a sound waste management system, which will include: provision of septic tanks for the sewage from camps and offices; protocols to handle and store fuels, oils and chemicals; and segregation and safe disposal of the solid wastes.

346. Damage to the natural vegetation will be minimized by appropriate sitehoute selection for the site facilities and access tracks. In addition, compensatory tree plantation will be carried out for any tree felling which might be needed for the construction activities.

347. Any loss of or threat to the aquatic fauna will be avoided through employing the waste management system mentioned above. No contaminants will be released to soil or water; any increased water turbidity caused by the construction and dismantling of coffer dams will be temporary. Furthermore, the pond level of the Jinnah Barrage would not change during or after the construction, therefore, there would not be any impact on the fish and aquatic life in the stream and Barrage pond. The construction activity will not disturb any avifauna habitat either (such as the belus upstream and downstream of the Barrage).

348. The above assessment indicates that: i) the potential environmental impacts associated with the construction activities are temporary and reversible in nature; and ii) through employing the mitigation and control measures, these impacts will be either altogether avoided, or reduced to an acceptable level. Details of the mitigation measures are provided in the next Section.

349. Social Impacts. As a result of very careful project design and planning process, no land acquisition is needed, and all the project sites would be either within the river, or on land owned by IPD. Hence no involuntary resettlement issues will be encountered during the project. However, a Land Acquisition and Resettlement Framework (LARF) has been developed, to be used in the unlikely event of any private land acquisition due to any design changes during the project execution. See Table 10.2.1 in Annex 10.2 for entitlement matrix for LARF.

350. Other social impacts of the proposed project may include interruption in irrigation and drinking water supply in the Thal Canal command area particularly for the Mohajir Branch, issues associated with influx of labor from other parts of the country, and public health and safety risks for the communities as well as for the project personnel.

35 1. The interruption of irrigation and drinking water will be avoided by carrying out the works related to the Thal Canal during the routine annual canal closure. In addition, a feeder channel will be constructed to supply water to the Mohajir Branch in the unlikely event of the extended canal closure due to any unforeseen circumstances during the construction phase. The water theft issues are quite common in the command area resulting in shortages. The IPD staff would carry out extra monitoring during project period, in particular during the low flow period, in order to avoid people associating the water shortages and inequities with project construction.

352. To mitigate the issues associated with the influx of labor from other parts of the country, strict code of conduct will be followed by the project personnel, privacy of the local women will be respected, liaison will be maintained with the local community, and employment will be provided to the local labor. To address the public health and safety issues, the contractor will develop and implement a Health, Safety, Environment and Social (HSES) plan. In addition, the contractor will be responsible to maintain medical facilities at the site for

99 its staff, and will also carry out screening of its staff for any communicable diseases such as HIV/AIDS. With the help of the above measures, the potential social impacts of the project will be adequately mitigated.

353. Cumulative Impacts. The only major construction activity which would possibly be carried out in the vicinity of the Barrage simultaneous to the proposed project, and hence might result into cumulative impacts, would be associated with the Jinnah hydropower project. The hydropower project and the potential cumulative impacts are discussed below.

354. WAPDA is currently constructing a 96 MW hydropower project on the right bank of the Jinnah Barrage. To operate the power plant, approximately 100,000 cusec of water will be diverted during peak flows through a channel to the power house and released back to the river downstream of the powerhouse. ,The major project interventions include construction of a channel, deep excavation for siting the turbines, setting up work facilities on the right bank of the river, dewatering, disposal of excavated earth and clearing of work site etc. The official completion date of the hydropower project is in the end 2010 but the current delays in the civil works may require an extension in the project completion date. Therefore there is a possibility of a time overlap of the hydropower and barrage rehabilitation works. The proposed construction program for the barrage rehabilitation works envisages using the right bank to start the physical works, which means that the two projects could be competing for the right bank to set up work facilities including batching plant, material store, and labor camps.

355. To minimize the likelihood of any cumulative impacts associated with the above possibility, all of the proposed project’s facilities - including the contractor’s office, labor camp, batching plant, borrow areas, consultants’ office and others - would be established on the left bank, well away from the hydropower project and its site facilities. Only the work-base area for the Barrage rehabilitation works to be carried out on the right bank will be established on the right bank, however, this location will be selected in consultation with WAPDA and the hydropower project’s contractor, to avoid any conflict or the possibility of the cumulative impacts.

356. All the construction materials, including cement, steel, sand, aggregate, borrow material, riprap material and others will be transported from different locations in Punjab, and will not interfere with the hydropower project. Any issues regarding the increased vehicular traffic associated with the two projects will be addressed in the Traffic Management Plan, which will be prepared by the contractor of the proposed project, in consultation with the hydropower project’s contractor. The Plan will also address the possible vehicular traffic interruption caused by the works involving heavy machinery on the Barrage itself (such as rehabilitation of the Barrage gates).

357. The environmental and social monitoring to be carried out during the proposed project (discussed in the next Section) will also include identification and assessment of any cumulative impacts of the two projects. Similarly, this aspect will also be addressed in the scope of the M&E consultants of the proposed project.

358. A review of the hydropower project indicates that the project has in place a basic environmental management plan to mitigate potential environmental impacts during the construction and the implementation seems reasonable. Assessment of hydropower construction site during the field visits suggests that the contractor is maintaining reasonably well the work area and no major issues were noticed in terms of EMP implementation. PMO will continue to work with WAPDA to address any issues in case the hydropower construction site does not continue to meet the required standards outlined in the Barrage ESMDP (discussed in the next Section). The independent M&E consultants, also responsible for supervision of ESMDP, will monitor the hydropower construction site and help PMO in addressing any significant issues.

359. Residual Impacts and Environment/Social Enhancements. Based upon the assessment presented above, the project will not have any significant andor lasting. impact on the environment or communities, provided the mitigation measures identified during the assessment are implemented.

100 360. On the other hand and based upon the recent experience of rehabilitation of the Taunsa Barrage project, a ‘development assistance’ approach has been adopted for the proposed project, instead of a narrowly focused mitigation (or ‘do no harm’) approach. The details of the development assistance are provided in the next Section. During the project, design of the fish ladders will be reviewed to assess their effectiveness.

ENVIRONMENTAL AND SOCIAL MANAGEMENT AND DEVELOPMENT PLAN

361. The Environmental Management and Social Development Action Plan (EMP, SDAP) presented here provides the mechanism to implement the mitigation measures and development assistance identified during the environmental and social assessment.

362. Institutional Arrangements. The overall responsibility for the implementation of ESMDP rests with the Project Management Office (PMO) of IPD, the Government of the Punjab. To fulfill this responsibility, the Environment and Sociology Unit (ESU) has been established within PMO. ESU consists of the Director (Environmental and Social), the Deputy Director (Environment), the Deputy Director (Sociology), the Deputy Director (Social Assistance), and the Deputy Director (Communications). See Figure 10.1.1 for a simplified version of the PMO’s organizational structure.

363. The Construction Supervision Consultants will appoint a dedicated Environment and Social Supervisor (ESS), to ensure the ESMDP implementation during the project. ESS will supervise the contractor for the ESMDP implementation, particularly the mitigation measures. She will also be responsible for implementing the effects monitoring plan (discussed later in the Section).

364. The contractor will be required to appoint dedicated EnvironmentlSocial Officers at the site for the implementation of ESMDP in the field, particularly the mitigation measures. The contractor will also be responsible for communicating with and training of its staff in the environmentaVsocia1 aspects. The contractor will develop the Health, Safety, Environment and Social (HSES) Plan, and get it approved by the Supervision Consultants before the commencement of the physical works on site. The construction contract will have appropriate clauses to bind the contractor for the above obligations.

365. Mitigation Plans. The environmental and social mitigation plans, respectively presented in Tables 10.1.2 and 10.1.3, are the most important elements of ESMDP. The plans provide mitigation actions against each impact, which could be encountered during different project activities.

366. Social Development Assistance. The objective of the social development assistance is to enhance the project benefits to the local communities in the command and project areas. The initiative consists of three main components, discussed below.

367. Water Supply Schemes in Saline-Water Zone. The annual canal closure affects the communities in the saline-water zone of the Mohajir Branch command area, since they are dependent upon the canal water even for their drinking water needs. To address this development need, a total of 54 water supply schemes in the Mohajir Branch command area will be established, rehabilitated, or reconstructed during the proposed project. These include 28 new schemes to be established, 15 existing schemes to be rehabilitated, six existing schemes to be reconstructed, and six new water ponds to be constructed.

368. The above-mentioned water supply schemes will be rehabilitatedestablished by the Public Health Engineering Department (PHED), Government of the Punjab. A contract agreement will be signed between IPD and PHED for this purpose.

369. Agricultural Inputs. The possible extended canal closure during the construction phase may reduce the crop yields (primarily the wheat crop) in the Thal Canal command area. To mitigate this impact, certified seeds

101 of the early variety of wheat seeds will be provided, free of cost, to the small farmers in all the five districts of the Thal Canal command area. The seed distribution activity will be implemented through the selected NGO involved in community mobilization and development activities in the province. A formal agreement between IDP and NGO will be signed for this purpose. In addition to the above, extension services will be provided to the targeted farmer households. The project will monitor construction progress and provide up-to-date information to the communities regarding the possibility of canal closure extension.

370. Assistance in Infrastructure Development. In addition to the establishmenthehabilitation of water supply schemes and distribution of seeds, the following works will also be carried out in the project area, to further enhance the project benefits for the local communities (to be implemented by PMO):

0 Rehabilitatiodconstruction of mosque at the Barrage. 0 Rehabilitatiodextension of mosque at the Canal Colony. 0 Development of a public park at the Barrage (left bank-downstream). 0 Establishment of a Basic Health Unit at the Canal Colony. 0 Rehabilitation and up gradation of Government Girls Primary School at the Canal Colony. 0 Rehabilitation and up-gradation of Government Boys Primary School at the Canal Colony. 0 Provision of Natural Gas to the Irrigation Colony Provision of a telephone exchange (200 lines) Reconstruction of approach road to the Irrigation Colony The above works are not likely to cause any significant environmental or social impacts, nor any cumulative impacts, in view of their nature and small scale. MONITORINGPLAN

371. Activity Monitoring. The activity (or compliance) monitoring will be carried out at two levels. At the first level, the contractor (for the mitigation measures given in Tables 10.1.2 and 10.1.3), PHED (for the water supply works), NGO (for the seed distribution), and PMO (for the infrastructure development works) will carry out internal monitoring to ensure that all the environmental and social requirements are adequately implemented. At the second level, the ESS of the Supervision Consultants and ESU will monitor the implementation of the environmental and social mitigation measures. Appropriate checklists and forms will be developed for the above-mentioned activity monitoring.

372. Effects Monitoring. The effects monitoring will be carried out to determine the effectiveness of the mitigation measures provided in the Mitigation Plans. The Effects Monitoring Plan is provided in Table 10.1.4, and will be implemented by ESS of the Supervision Consultants.

373. Third Party Monitoring. The M&E Consultants will carry out the third party monitoring of the entire project. The scope of work of these Consultants will also include the monitoring and evaluation of the ESMDP implementation (including Mitigation Plans, Effects Monitoring Plan, Social Development Assistance and cumulative impack).

374. Capacity Building. The environmental and social trainings will help to ensure that the requirements of the ESIA, ESMDP and SDAP are clearly understood and followed by all project personnel throughout the project. The primary responsibility of providing these trainings to all project personnel will be that of the contractor and Supervision Consultants. The trainings will be provided to different professional groups separately such as managers, skilled personnel, unskilled labors, and camp staff. An indicative training program is given in Table 10.1.5.

375. Documentation and Recordkeeping. The key elements included in the documentation and recordkeeping system of the proposed project are briefly discussed below.

102 376. Data Recording and Maintenance. All forms and checklists to be used for recording information for activities such as the environmental and social monitoring will be prepared on a standard format, which will correspond to the database in to which all the gathered information will be placed. Check boxes will be used as much as possible to facilitate data entry. A tracking system will be developed for each form. A comprehensive system will be established to store the environmental and social data of the project.

377. Meetings. These will include the kick-off meeting, and daily/weekly meetings. The main focus of these meetings will be ESMDP compliance, non-compliances, and the measures to be taken to address these non- compliances.

378. Photographic record. A comprehensive photographic record will be maintained of the key locations and key events of the project.

379. Reports. The Supervision Consultants will produce daily, monthly, and annual reports, as well as a final report on the social and environmental issues of the project. These reports will document the proceedings of the meetings described above, environmental trainings, the key outstanding issues, and the recommendations regarding their redressal.

3 80. Communication Strategy. Recent experience in the infrastructure sector in Pakistan has increasingly shown the importance of taking into account the real and perceived concerns of stakeholders. Effective communications between the project agency and its stakeholders helps build trust and collaboration which in turn contributes to better project design and speedy implementation. To this end, very extensive stakeholder consultations were conducted during the project design and planning stage and while conducing the EA studies, as discussed above.

381. The need to continue these consultations and communication with the stakeholders particularly the local communities during the project construction phase cannot be understated, and the success of the project can only be guaranteed by involving all the stakeholders - especially the farming communities in the saline zones, as the inhabitants of these areas are totally dependent on the continuous water supply for irrigation and household purposes - in this consultation and communication process. During the construction phase, it is very important to consult and involve stakeholders, on an on-going basis, to ensure liaison and a high degree of transparency among all the policy makers, IPDDMO, contractor, consultants, the farming community and the media. Each of them will be encouraged to provide feedback on the design and implementation processes.

382. To meet the above needs, a Communication Strategy has been developed for the proposed project Lessons learnt from the Taunsa experience has proved invaluable in developing this Strategy. The key objectives and functions of the strategy are:

0 To provide mechanism for two-way communication and consultations between the project personnel and the stakeholders, particularly the farmers in the command area.

0 To provide necessary information to the farmers and other stakeholders on the key project activities such as canal closure, to receive their feedback in this respect, and to adjust the construction activitiedschedule accordingly, where possible/necessary.

383. ESU will be responsible to implement the Strategy, and the Deputy Director (Communications) will be appointed in the Unit for this purpose (See Figure 10.1.1).

103 384. Communications Methods. The following communication methods will be used as part of the Strategy:

Involvement of policy makers. PMO will initiate a series of direct communication measures to inform and involve the policy makers including the concerned Ministers, members of the National Assembly (MNAs) and members of the Provincial Assembly (MPAs). This can be achieved by making presentations to them and holding briefing sessions with them on a regular basis. They will be invited to participate in the consultation process to ensure transparency and to gain public support for the project. This will be done simultaneously with the mass media campaign that achieves the same objective. Involvement of the local elected bodies. The Nazims, Naib Nazims and Councilors in the union councils are closely associated with the farming community. The project information, such as schedule for the annual or possible extended canal closure, will be disseminated to the communities through these elected representatives. Communication through Numberdar of village and Imam Masjid (Muslim prayer leader). Since Numberdars and Imams are also closely associated with the villagers, the project information can also be disseminated to the communities through them. Communication through NGO. The selected NGO will also disseminate the project information, including schedule of the annual canal closure, to the communities, and obtain feedback from them, through its own communication mechanism. Communication through media: The print and electronic media (newspapers, television and radio) are very effective means of mass communication, and have a vast reach among all potential project partners. The project will carry out a media analysis, as part of the Communication Strategy, to assess the reach and effectiveness of different publications, television and radio stations among the various target audiences, and to develop the most efficient and effective media campaign for the project. Involvement of IPD: The Department provides services to the farming community through its functionaries (Zaildars and Canal Patwaries). The issues regarding irrigation water of farming community are initially resolved through these functionaries. They will also be involved in the dissemination of information to the farmers and obtaining their feedback regarding the matters relating to the canals.

385. Grievance Redressal. PMO will establish a Grievance Redressal Mechanism (GRM) for the project, and under this mechanism, a Grievance Redress Cell (GRC) will be established. It will be headed by the Director PMO; others members will include the Deputy Director (Sociology), the Deputy Director (Environment), ESS of the Supervision Consultants, Executive Engineer Irrigation at site, one Sub Divisional Officer, a representative of local administration, the supervising engineer, and a representative from the local communities. The sub-divisional officer will be the key grievance redressal officer. The project will establish a Project Information Centre at the Barrage site and a Grievance Register will be placed there for logging complaints and grievances. All written and oral grievances will be recorded in the Register.

386. All grievances will be responded to within two weeks, and the complainant will be informed about the response/resolution of grievance. If the complainant does not receive a response from GRC within two weeks of the complaint, or is not satisfied with the response or resolution, helshe would submit an appeal to the IPD.

387. Cost Estimates. The total cost of the environmental and social management of the proposed project is about 652 million Rupees, or about 9 million US dollars. This includes the cost of environmental and social monitoring, environmental and social trainings, tree plantation, waste disposal plan, emergency response plan, traffic management plan, and environmental and social audits (third-party monitoring). Also included in this estimate is the cost of the social development assistance discussed above. The cost summary is provided in Table 10.1.6.

104 388. Public Disclosure. In accordance with the national regulatory requirements and the WB disclosure policy, two disclosures of the ESIA and SDAP were carried out, first in the third week of September 2009 and second on October 3, 2009 at the project site. The Punjab Environmental Protection Agency (EPA) held the hearing and public meeting in the process of providing no objection to the project and its EA and SDAP reports. Prior to the meeting, the Urdu translation of the summaries of these reports were distributed among the stakeholders; copies of these summaries and the ESIA and SDAP reports were also placed at the IPD office, site office, District libraries of Mianwali and Khushab and at the Punjab EPA. The public meetings were participated by large group of people, and stakeholders including NGOs, women, fishermen, and farmers. The copies of ESIA and SDAP will also be sent to the Bank’s Infoshop, in accordance with its disclosure policy.

Figure 10.1.l Institutional Arrangements

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b2 Table 10.1.4: Effects Monitoring Plan Frequency of Monitoring Parameters Measurement

Barrage, batching plant NOx, SOX,CO and Quarterly site, labor camp site Particulate matter (PMlo). and borrow areas. ~ Camp site and one km Water table depth, Discharge, Quarterly away from the camp ,hy sical-chemical site. )arameters, heavy metals and oxic organic compounds.

At source of surface pH, EC, SAR and RSC Quarterly water used.

Construction sites, Dust, smoke, gases Throughout camp site, access roads, construction phase borrow areas.

Zonstruction site, camp Visible emissions. During routine site, access roads, monitoring. from the vehicles. or rows areas. 2onstruction sites, Type and number of tree At the beginning of :ampsite, access roads, species uprooted. construction >orrow area. activities. 2onstruction site, camp For background noise levels Once a week rite, access roads, (using noise meters) throughout the :ommunities within 500 construction phase. n of construction site. 2onstruction site, Jisual observations for street During routine :ampsite, access roads, )r rilVgully erosion. monitoring of entire >orrow area. project activities especially after rains. At Project site. 2uantity of material used Daily during ncluding water and fuel construction phase.

3n camp site and Any sign of soil or water Daily during whole Zonstruction site. contamination; construction phase. any un-disposed waste. :amp site, offices, laste water generation rate, To be determined :olony and construction integrity and maintenance of through water site. the septic tanks and soaking management pits. Any sign of soil or techniques. water contamination Oil storage area, Facilities to control the Daily during vehicle washing lines; accidental oil spill as per oil construction phase any other spill area. spill contingency plan. Any sign of soil or water contamination

112 Frequency of Monitoring Location Monitoring Parameters Measurement At project location; Local people recruited for all During construction settlements for which local skill are available. Grievances of and

Immediately upstream and downstream of through observing surfacing. construction phase Jinnah Barrage Effectiveness of the fish ladders.

Jinnah Barrage and Water flows. Also vigilance Throughout the various location in the on any water thefts in construction period Thal Canal particular during low flow periods All project sites, All environmental and social the particularly near parameters such as soil construction period hydropower project I sites; erosion, soillwater community schemes contamination, noise, air under SDAP contamination, vehicular traffic, local resource utilization, and other impacts on communities.

At Project Location Restoration and At the end of the (construction sites, rehabilitation as per construction phase camp sites, offices, Mitigation Plan tracks and others) Upstream and pH, conductivity, TSS, TDS, Once in pre and post downstream of the BOD and COD. monsoon season for barrage, at the same 2 years. locations where design and during construction phase monitoring was done

113 Monitoring Location Monitoring Parameters Frequency of Measurement Water sources used for Physical- chemical Once in pre and post construction purposes parameters, heavy metals monsoon season for and dug wells within 1 and toxic organic 2 years. km from wastewater compounds. mud ponds (if any). At the same location where during construction phase monitoring was done At project site and Visual observations. After site restoration. along the aligned borrow areas. Project locations prone to soil erosion. Within the project Visual Observation. At the end of the boundaries. construction phase According to the tree Survival rate of tree saplings. Oncehwice in a year plantation plan. for three years.

114 Table 10.1.5: Training Plan

Environmental and social Before aspects, particularly construction sensitivities of the project; activities Key finding of the ESIA, SDAP and ESMDP; Social and cultural values of the area; Leadership dynamics.

Environmental and social Before and aspects, particularly the during sensitivities of the project; construction Wildlife and vegetation stage related sensitivities of the project; Key finding of the ESIA, SDAP and ESMDP; Mitigation measures; Contingency plan; Community issues; Social and cultural values of the area ESMP; ESMDP; Before and Waste disposal; HSES plan during construction stage HSES plan; Road safety; Before and Road restrictions; during the Vehicle restrictions; construction Defensive driving; Waste disposal; Social and cultural values of the area. Waste disposal; Before and HSES plan; during the Vehicle restriction construction HSES plan; Before and Camp operation during the Waste disposal construction Natural resource conservation Housekeeping Waste disposal; Before the start Site restoration; of the Leveling and dewatering of restoration burrow area activity

115 Table 10.1.6: Environmental and Social Management Cost

.. __ ...... __ __ ~ .. ! Ilascription cost illion Rupees) ..... i ..... _ - - _.- _I __ .. ___ . __ ..... - ...... ___ _ - . -. _.- ... .--: Environmental Management Plan (EMP) ...w .- 1 Environmental Monitoring 1 .oo __., .... l.l .. - -. .. - ...... i 2 , Trainings 0.30

3 Tree Plantation 0.80 .-. ... -, ... _____ .. ___ -_ ...... - _-_ -...... 4 ' Emergency Plan 1 .oo ...... ______...... -

116 Annex 10.2 Land Acquisition and Resettlement Framework Pakistan: Punjab Barrage Improvement Phase I1 Project (PBIP-11)

Introduction

389. The Punjab Barrage Improvement Phase I1 Project is to rehabilitate the existing Jinnah Barrage. Several rounds of screening and field surveys have been carried out as part of the project feasibility and detailed design to identify possible land acquisition and resettlement impacts. They have concluded that, as designed, the project is not expected to have any land acquisition or resettlement impacts.

390. The project construction would require some lands. This is mainly for construction contractor operations, such as camp sites, storage areas and batching plants etc. All these areas are planned as part of the design to be on government lands near the barrage owned and managed by IPD. Nevertheless, given such a large operation, there might be the possibility of additional land needs or adjustment of contractor operation sites. This resettlement framework is developed and agreed to be followed for such eventualities.

391. The land acquisition and resettlement framework (LARF) describes the legal policy for land acquisition and resettlement, lays down the principles and objectives to be followed, eligibility of the affected people, compensation entitlements, resettlement planning and approval process, implementation arrangements including management institutional, public participation requirements, grievances procedures and monitoring arrangements.

Legal Framework and Entitlement Policy

392. The LARF is developed in line with the Land Acquisition Act (LAA) in Pakistan and the Operational Policy 4.12 on Involuntary Resettlement of the World Bank. The LAA, issued in 1894, is the overarching policy in Pakistan governing land acquisition and compensation. Any possible land acquisition under the project will follow the principles, procedures and institutional mandate under the LAA. As a World Bank financed project, OP 4.12 of the World Bank will be complied with under the project.

393. The main objective of the LARF is to ensure that all affected persons will be compensated andor assisted for their losses and provided with rehabilitation measures to assist them in their efforts to improve, or at least maintain their living standard. The principles below will be followed for any possible land acquisition and required planning work to achieve the above objective, (a) Acquisition of land and other assets, and resettlement of people will be minimized as much as possible. (b) All displaced persons (DPs) residing, working, doing business or cultivating land within the recovered area under the Project as of the cut-of-date are entitled to be provided with rehabilitation measures; (c) Lack of legal rights to the assets lost will not bar the affected people from entitlement to such rehabilitation measures. (d) Compensation payment will be delivered at replacement cost; (e) Plans for acquisition of land and other assets and provision of rehabilitation measures will be carried out in consultation with the affected people; Adequate reporting, monitoring and evaluation mechanisms will be in place as part of the fl resettlement management system. Evaluation of the land acquisition process and the final outcome will be conducted independent of the executing agency.

117 (a, Particular attention will be paid to the protection of marginalized, disadvantaged, and vulnerable groups, including women and children, and promoting and providing, wherever possible, opportunities for such groups to benefit from the investment project.

Resettlement planning, review and approval

394. When the construction contracts are awarded and construction teams mobilized, the contractors will develop an operation plan for construction. This plan will lay out the details of construction operation, on the basis of the operation design by the detailed design consultants. This construction plan will finalize all the operational details, including locations and sitings of various construction activities, identify and plan to address any unexpected land acquisition and resettlement impacts. The following steps will be followed, As part of the operation plan development, the contractors will screen and survey all selected locations and sites for land acquisition and resettlement impacts associated with the construction operations. Particular attention will be given to cases where there are adjustments or changes of locations and sites from those selected in the detailed engineering design. If the screening indicates any land acquisition or resettlement impacts, the contractors will inform the PMO, engage qualified specialists and start land planning for land acquisition and resettlement in consultations with potentially affected communities, following principles established in this framework. The compensation and resettlement plan will be submitted to the PMO as part of the construction operation plan for review and approval. It will be also forwarded to the World Bank for review and clearance. The compensation and resettlement program must be completed before taking possession of the land or houses.

395. The land acquisition and compensation plan will include the following, Description of the activity causing land acquisition; Scope of adverse impacts and affected population; Socioeconomic baseline information; Compensation and resettlement package; Relocation arrangements, if necessary; Implementation arrangements; Consultation and disclosure arrangements; Implementation schedule; Costs and budget; Monitoring arrangements; Grievance procedures; and Entitlements matrix.

Public Information and Consultation

396. Information dissemination to the project affected people and involved agencies is an important part of the planning process. This is to ensure that local authorities and representatives of the affected are included in the planning and decision-making processes, obtain information on the needs and priorities of the DPs, as well as their reactions to proposed policies and activities. The methods of project information and public consultation include stake holder’s consultation, household visits, public meetings, group and focus group discussions and the household interviews. The plan will detail public consultation

118 arrangements, including activities carried out during planning and activities to continue public consultations during implementation.

Grievance Redress Procedure

397. This mechanism and its setup are already designed into the project. These include the institutional mechanisms, registering and redress procedures as well as the timeframe of redress. Any land acquisition and resettlement program will follow this established procedure. The resettlement plan will lay out the details of this mechanism. Institution Responsibility

398. The PMO of IPD Punjab will assume the overall responsibility for resettlement planning and implementation. The contractor, under guidance and supervision of the PMO, will undertake the impact screening and site survey as part of the construction operation plan development. The PMO will engage experienced specialists to carry out the resettlement planning activities and develop the resettlement plans. The PMO, together with District Administration, will implement the resettlement plan. Monitoring

399. Monitoring is the continuous process of assessment of project implementation, in relation to agreed schedules, the use of inputs, infrastructure and services by the Project. Monitoring has two purposes:

0 To verify that project activities have been effectively completed including quantity, quality, and timeliness; and To assess whether and how well these activities are achieving the stated goal and purpose of the plan.

400. Regular monitoring of the resettlement plan implementation will be conducted by the implementing agency, PMO, as well as by an independent consultant for monitoring and evaluation (M&E Consultants) to be hired under the project.

401. The M&E Consultants will be required to submit the findings of the periodical monitoring every 6 months. These monitoring reports shall be submitted to the PMO, which in turn will submit the reports to the World Bank as an annex of its progress report. The report should contain (i) a report on the progress of resettlement action plan (RAP) implementation if any; (ii) deviations, if any, from the provisions and principles of the RAP; (ii) identification of problem issues and recommended solutions so that implementing agencies are informed about the ongoing situation and can resolve problems in a timely manner; and (iv) a report on progress of the follow-up of problems and issues identified in the previous report.

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9 . a ANNEX 11: PROJECT PREPARATION AND SUPERVISION PAKISTAN: Punjab Barrages Improvement Phase-I1 Project (PBIP-II) Planned Actual PCN review 09/06/2005 Initial PID to PIC 09/21/2005 Initial ISDS to PIC 0912 It2005 Appraisal 01/30/2009 Negotiations 02/22/2009 BoarcURW approval 06/20/2009 Planned date of effectiveness 09/30/2010 Planned date of mid-term review 1013 Of20 13 Planned closing date 02/29/20 16

Key institutions responsible for preparation of the project: Irrigation and Power Department, PMO for Punjab Barrages Rehabilitation and Modernization Project.

Name Title Unit Masood Ahmad Lead Water Resources Specialist and SASDA Task Team Leader Pravin Karki Hydraulic Engineer SASDE Chaohua Zhang Sr. Social Sector Specialist SASDI Javaid Afzal Environmental Specialist SASDI Muhammad Ehsan HydrologyIHydraulicd Structures Consultant SASDA Altaf Iqbal Economics Consultant SASDA Tahira Sayed Senior Irrigation Specialist SASDI Furqan Saleem Sr. Financial Management Specialist SARFM Uzma Sadaf Sr. Procurement Specialist SARPS Tahira Sayed Communication ti Participation Specialist SASDA Martin Serrano, Margaret Png Senior Counsels LEGES Chao-Ching Shen. Anwar Bhatti I Disbursement Oficer I CTRFC I

Peers Reviewer for QER Meeting are: Alessandro Palmieri Joseph Goldberg Srinivasan Raj Rajagopal Xiaokai Li Rita E. Cestti Javier Zuleta

Bank funds expended to date on project preparation:

Bank resources: Of an allocation of $657,000, about US$340,000 has been spent thus far starting in FY 06 to date. Most of the expenditures were in FY06 and FY07. Some of the funding was used for follow up on Taunsa Barrage Project. The consulting services for designs and preparation of bidding documents are being funded from an ongoing loan for the Taunsa Barrage Rehabilitation Project. Estimated Approval and Supervision costs: Remaining costs to approval: US$lOO,OOO Estimated annual supervision cost: US$170,000 per year. The Bank Project team would place an individual consultant in the country who would visit the project site regularly particularly in first two years of the project. The consultants would be contacted for about 60 days in the first year (when construction starts on the right of the river) and 70 days in the second year (when the construction would be on the left side of the river) and thirty for the remaining period of the project. 123 ANNEX 12: DOCUMENTS IN THE PROJECT FILE PAKISTAN: Punjab Barrages Improvement Phase-I1 Project (PBIP-II)

Reports Prior to Feasibility Study

1- Design and construction of Kalabagh (Jinnah) barrage by S.I. Mahboob - 1943 2- Rehabilitation of gates equipments at various barrages by M/S HARZA Engineering-March 1990 3- Safety Evaluation Report - 1998 4- Appraisal Report by Expert Committee and NDC-NESPAK - 2001

Reports on Feasibility Study 5- Inception Report - 2003 6- Environmental & Social Impact Assessment Report - 2005 7- Feasibility Report - 2005 8- PC-I prepared by feasibility consultants - 2005

Reports on Detailed Design 9- Inception Report - January 2008 10- Feasibility Review Report - Feb. 2008 1 1- GIS Data Development Report - March 2008 12- Geophysical Investigations Report - April 2008 13- Report on Survey of Gates, Hoists and Regulatory System - April 2008 14- Hydrological & Bathymetric Survey Report - May 2008 15- Geotechnical Investigations Report - May 2008 16- Design Criteria - July 2008 17- Draft Report on Impact of Flood 1992 - August 2008 18- GIS Analyses Report - November 2008 19- Draft Hydrological & Sedimentation Report of Terbela Flushing and Proposed Kalabagh dam - Feb. 2009 20- Alternatives Report - March 2009 2 1- Draft Report on Impact of WAPDA Hydropower Project - May 2009 22- Mechanical Design Report - July 2009 23- Draft Concept Design Report for Rehabilitation of abandoned Kalabagh Railway Bridge - August 2009 24- Environment and social Assessment Report (ESIA) - July 2009 25- Summary of ESIA report - July 2009 26- Pre-qualification documents for procurement of Civil works - July 2009 27- Pre-qualification documents for procurement of Mechanical & Electrical works - July 2009 28- Project Main Report- August 2009 29- Project PC-I - August 2009 30- Social Development Action Plan - September 2009 3 1- Design Report - September 2009 32- Draft Bidding Documents for Civil, Electrical & Mechanical Works - August 2009

Hydraulic Laboratory Reports

33- Sectional Model Study Report- 2005 124 34- Sectional Model Study Report - May 2009 35- Comprehensive Model Study Report - May ,2009

Design Reports

36-Jinnah Barrage Rehabilitation and Modernization Project, Volume I, Project Main report, June 2009.

37-Jinnah Barrage Rehabilitation and Modernization Project, Volume 11, Engineering Report, Civil, Electrical & Mechanical World, Analysis & Design, June 2009.

3 8-Jinnah Barrage Rehabilitation and Modernization Project, Volume 111, Environmental and Social Studies, Part A, Environmental and Social Impact Assessment (ESIA) Report, June 2009.

39-Jinnah Barrage Rehabilitation and Modernization Project, Volume 111, Environmental and Social Studies, Part ByEnvironmental and Social Management Plan (ESMP) Report, June 2009.

40-Jinnah Barrage Rehabilitation and Modernization Project, Volume 111, Environmental and Social Studies, Part CySocial Development Assistance Plan (SDAP) Report, June 2009.

125 ANNEX 13: STATEMENT OF LOANS AND CREDITS PAKISTAN: Punjab Barrages Improvement Phase-I1 Project (PBIP-11)

Difference between expected and actual Original Amount in US$ Millions disbursements ProjectID FY Purpose IBRD IDA SF GEF Cancel. Undisb. Orig. Frm. Rev’d P115638 2010 Social Safety Nets DPC 0.00 200.00 0.00 0.00 0.00 50.86 -158.91 0.00 P114508 2009 3rd Partnership for Polio Eradication 0.00 74.68 0.00 0.00 0.00 14.70 -26.48 0.00 P107300 2009 SINDH EDUCATION SECTOR 0.00 300.00 0.00 0.00 0.00 192.48 54.98 0.00 PROJECT (SEP) P101684 2009 Second Trade and Transport Facilitation 0.00 25.00 0.00 0.00 0.00 24.48 -1.37 0.00 P105075 2009 PPAF 111 0.00 250.00 0.00 0.00 0.00 218.65 -36.30 0.00 P102608 2009 Punjab Education Sector Project 0.00 350.00 0.00 0.00 0.00 216.73 63.13 0.00 P103160 2009 Social Safety Net Technical Assistance 0.00 60.00 0.00 0.00 0.00 53.69 -7.29 0.00 PO95982 2008 Electricity Distribution and Transmissio 173.60 83.10 0.00 0.00 0.00 221.78 53.62 0.00 PO89378 2008 Balochistan SSIP 0.00 25.00 0.00 0.00 0.00 21.63 9.58 0.00 PO84302 2008 Sindh Water Sector Improvement Project 0.00 150.20 0.00 0.00 0.00 144.04 6.13 0.00 P110099 2008 Water Sector Capacity Buidling Project 0.00 38.00 0.00 0.00 0.00 33.73 3.81 0.00 PO90501 2007 Land Records Mgmt & Information 0.00 45.65 0.00 0.00 0.00 44.01 12.62 0.00 Systems PO99110 2006 Pakistan Earthquake ERC 0.00 400.00 0.00 0.00 0.00 16.31 -1.86 0.00 PO94086 2006 Balochistan Education Support Project 0.00 22.00 0.00 0.00 0.00 12.81 6.09 0.00 PO76872 2006 PIFRA I1 0.00 84.00 0.00 0.00 0.00 25.15 22.63 0.00 PO83929 2006 Punjab Municipal Services Improvement 50.00 0.00 0.00 0.00 0.00 35.88 33.88 25.88 PO77306 2005 Tax Administmtion Reform Project 24.40 78.50 0.00 0.00 0.00 75.69 70.18 0.00 PO78997 2004 Sindh On-Farm Water Management 0.00 111.14 0.00 0.00 0.00 41.36 -8.12 0.00 Project PO82977 2004 Second Poverty Alleviation Fund Project 0.00 551.00 0.00 0.00 4.35 17.61 -3 12.23 -3.55 PO10556 2004 HIGHWAYS REHAB 215.00 150.00 0.00 0.00 0.00 58.27 -118.16 -2.84 PO71454 2003 AJK Community Infrastructure & Services 0.00 50.00 0.00 0.00 1.43 8.13 -26.50 3.50 Total: 463.00 3,048.27 0.00 0.00 5.78 1,527.99 - 22.99 360.57

PAKISTAN STATEMENT OF IFC’s Held and Disbursed Portfolio In Millions of US Dollars

Committed Disbursed IFC IFC FY Approval Company Loan Equity Quasi Partic. Loan Equity Quasi Partic. 2005 ABAMCO FUND 0.00 3.46 0.00 0.00 0.00 3.46 0.00 0.00 1995 AES La1 Pir 12.42 9.50 0.00 0.00 12.42 9.50 0.00 0.00 1996 AES Pak Gen 9.20 9.50 0.00 5.37 9.20 9.50 0.00 5.37 1995 Abamco Mgmt 0.00 0.29 0.00 0.00 0.00 0.29 0.00 0.00 1991 BRRIM 0.00 0.23 0.00 0.00 0.00 0.23 0.00 0.00 1993 Crescent Bahuman 0.00 0.3 1 0.00 0.00 0.00 0.3 1 0.00 0.00 1997 Crescent Bahuman 0.00 0.20 0.00 0.00 0.00 0.20 0.00 0.00 126 2001 Crescent Bahuman 2.72 0.00 2.50 1.50 2.72 0.00 2.40 1.50 2006 Dewan Petroleum 15.00 12.00 0.00 0.00 0.00 0.00 0.00 0.00 2004 Dewan SME 0.00 0.98 0.00 0.00 0.00 0.00 0.00 0.00 2003 Dewan Salman 25.00 0.00 5.00 0.00 25.00 0.00 4.00 0.00 1991 Engro Chemical 0.00 1.95 0.00 0.00 0.00 1.95 0.00 0.00 2006 Engro Chemical 0.00 0.64 0.00 0.00 0.00 0.64 0.00 0.00 2001 Eni Pakistan 12.00 0.00 0.00 0.00 12.00 0.00 0.00 0.00 1990 FIIB 0.00 0.27 0.00 0.00 0.00 0.27 0.00 0.00 1992 FIIB 0.00 0.40 0.00 0.00 0.00 0.40 0.00 0.00 2004 First UDL 7.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 GTFP Metropolita 2.54 0.00 0.00 0.00 2.08 0.00 0.00 0.00 1996 Gul Ahmed 8.10 4.10 0.00 5.22 8.10 4.10 0.00 5.22 2006 Habib Bank Li ... 0.00 0.00 50.00 0.00 0.00 0.00 0.00 0.00 2003 KCT 6.46 0.00 1.50 0.00 6.46 0.00 1.50 0.00 1995 Kohinoor 6.25 6.30 0.00 2.03 6.25 6.30 0.00 2.03 2002 Micro Bank 0.00 2.43 0.00 0.00 0.00 2.43 0.00 0.00 2004 NBFI Credit 6.50 0.00 0.00 0.00 6.50 0.00 0.00 0.00 Orix Finance 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2006 Orix Leasing 17.00 0.00 0.00 0.00 17.00 0.00 0.00 0.00 2005 PICT 6.00 0.00 0.00 0.00 6.00 0.00 0.00 0.00 2006 PICT 8.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1983 PPL 0.00 1.33 0.00 0.00 0.00 1.33 0.00 0.00 2002 PPL 0.00 5.63 0.00 0.00 0.00 5.63 0.00 0.00 1965 Packages 0.00 0.05 0.00 0.00 0.00 0.05 0.00 0.00 1987 Packages 0.00 0.02 0.00 0.00 0.00 0.02 0.00 0.00 1991 Packages 0.00 0.02 0.00 0.00 0.00 0.02 0.00 0.00 1994 Packages 0.00 0.01 0.00 0.00 0.00 0.01 0.00 0.00 1995 Packages 0.00 0.26 0.00 0.00 0.00 0.26 0.00 0.00 2005 Packages 25.00 5.43 0.00 0.00 0.00 1.47 0.00 0.00 2006 Paktel2005 35.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 200.1 Sarah Textiles 1.12 0.00 0.00 0.00 1.12 0.00 0.00 0.00 2004 TRG Pakistan 0.00 4.16 0.00 0.00 0.00 4.16 0.00 0.00 2007 TRG Pakistan 0.00 2.50 0.00 0.00 0.00 2.50 0.00 0.00 2006 Tameer Bank 0.00 1.01 0.00 0.00 0.00 1.01 0.00 0.00 1996 Uch Power 29.60 0.00 0.00 0.00 19.68 0.00 0.00 0.00 Total portfolio: 239.91 72.98 59.00 14.12 134.53 56.04 7.90 14.12

Approvals Pending Commitment FY Approval Company Loan Equity Quasi Partic. 2004 CSIBL 0.04 0.00 0.00 0.00 2006 IHFL I1 0.01 0.00 0.00 0.00 2004 Dewan SME 0.00 0.00 0.00 0.00 2006 JSPE Fund 0.00 0.02 0.00 0.00 2006 Habib Bank 0.00 0.05 0.00 0.00 2006 Paktel 2005 0.00 0.00 0.00 0.03 2006 Orix SME OLP 0.02 0.00 0.00 0.00 2006 Tameer Bank 0.00 0.00 0.00 0.00 2006 Dewan Petroleum 0.00 0.00 0.00 0.03 Total pending commitment: 0.07 0.07 0.00 0.06 127 ANNEX 14: COUNTRY AT A GLANCE PAKISTAN: PUNJAB BARARGES IMPROVEMENT PHASE-I1 PROJECT

Pakistan at a glance w9109

Lo we r- POVERTY and SOCIAL South middle- Developmntdlmonb Pakistan Asia Income 2008 Population, mid-year (millions) 66.1 1543 3,702 Life expectancy GNI per capita (At/as method, US%) 950 986 2,076 GNI (Atlas method, US$ billions) 257.3 1522 7,692 Average annual growth, 2002-08 T Population (%) 2.3 1.5 1.2 Laborforce (%) 4.1 2.2 1.6 GNI Gross per primary Most recent estimate (latest year available, 2002-08) capita enrollment Poverty (%of population below nationalpo vertyline) Urban po puiatio n (%of to tal populatio n) 35 30 41 Life expectancy at birth (pars) 67 65 68 Infant mortality (per I000 live births) 72 59 46 Child malnutrition (%o fchildren under5) 41 26 Access to improved water source Access to an improvedwatersource (%ofpopulation) 90 87 86 Literacy (%of population age 59 54 63 63 Gross primary enrollment (%of schoo/-agepopulation) 85 me a9 -Pakistan Male 93 111 112 Lower-rnlddlgincomegroup Female 77 m4 x)6 -

KEY ECONOMIC RATIOS and LONG-TERM TRENDS 1988 1998 2007 2008 I EconomlcratloP GDP (US$ billions) 38.5 62.2 143.2 64.5 Gross capital formationlGDP 18.0 7.7 22.5 22.0 Exports of goods and SeNiCeSlGDP 13.6 6.5 14.2 12.8 Trade Gross domestic savingsIGDP 9.9 6.7 15.4 11.0 Gross national savingslGDP 215 213 24.6 20.0 Current account baiance1GDP -3.0 -2.7 -4.6 -8.3 Interest paymentslGDP 18 14 0.8 0.6 Total debtlGDP 44.4 519 28.4 30.0 Total debt servicelexports 25.3 8.8 9.3 9.3 Present value of debtlGDP 22.9 21.9 Present value of debtlexports 17.8 lP.2 Indebtedness 1988-98 1998-08 2007 2008 2008-12 (average annualgrowth) GDP 4.2 5.0 5.7 2.0 3.5 -Pakistan GDP percapita 1.7 2.6 3.4 -0.2 1.2 Lower-rniaVbimegwp Exports of goods and services 5.2 9.3 2.3 -5.3 0.2 -

1998 Growth of capita and GDP (K) (%of GDP) Agriculture 26.0 27.3 20.5 20.4 industry 24.4 23.6 26.9 26.9 :z Manufacturing 16.8 15.8 8.0 19.7 5 Services 49.6 46.9 52.6 52.7 0 5 Household final consumption expenditure 74.6 72.1 75.5 76.6 -10 25.5 113 9.2 a.4 General gov't final consumption expenditure -GDP Imports of goods and services 217 7.5 21.3 23.8 -GCF

1988-98 1998-08 2007 2008 Growtho,expoltrandlmports(K) (average annualgrowth) Agriculture 4.5 3.1 4.1 1.1 50 I Industry 4.7 6.6 8.6 17 40 Manufacturing 4.2 8.5 8.3 4.8 30 Services 4.7 5.7 7.0 6.6 20 10 Household final consumption expenditure 4.7 4.0 4.7 -1.3 0 -1 0 General gov't final consumptio n expenditure 12 8.0 -9.6 39.0 Gross capital formation 3.7 5.2 12.9 3.9 -Exports -Imports Imports of goods and services 4.4 6.7 -3.5 3.6 r

Note 2006 data are preliminaryestimates This table was produced from the Development Economics LDB database *Thediamonds showfourkeyindicators in thecountry(in bold) comparedwth its income-groupaverage If data are missing, thediamond wli be incomplete 128 Pakistan

PRICES and GOVERNMENT FINANCE 1988 1998 2007 2008 Domestic prices (%change) 20 Consumer prices 7.8 7.8 2.0 15 Implicit GDP deflator 9.6 7.5 7.7 16.3 10 Government finance 5 (%of GDP. includes current grants) 0 Current revenue 7.3 15.8 15.0 14.6 03 04 05 06 07 Current budget balance -2.5 -3.8 -0.9 -3.5 GDP deflator -t CPI Overall surplusldeficit -8.5 -7.7 -4.4 -7.6 I - O8 I

TRADE 1988 1998 2007 2008 Exportandlmportlevelo(UImil1.) (US$ millions) Total exports (fob) 4,362 8,433 l7,278 20,427 40,000 Cotton 6x) P6 a4 87 - I Rice 363 562 1035 1585 Manufactures 3,362 4,866 m.011 m.354 Total imports (cif) 6,919 x),301 26,989 35,472 Food 1.685 2,420 3,526 Fuel and energy 977 1,750 7,346 m.496 Capital goods 4,476 11695 Export price index (2000=WO) m5 a5 a9 02 03 04 05 OB 07 Import price index (2000=WO) %IO P1 93 lExpartr mlmporls Terms of trade (2000=WO) m6 12 150 I O8 I BALANCE of PAYMENTS 1988 1998 2007 2008 Currentaccwnt brlance toGDP(%) (US$ millions) Exports of goods and services 5,227 x),Ol8 21418 24,004 I Imports of goods and services 8,337 =,e19 35,299 45,306 Resource balance -3,110 -2,801 -8,881 -21302 Net income -828 -2,330 -3,582 -3,909 Net current transfers 2,776 3,430 rn.585 'tl.476 Current account balance -1162 -1701 -6,878 -73,735

Financing items (net) 1162 1,420 '0,608 7,947 Changes in net reserves 0 281 -3,730 5,786 M emo: Reserves including gold (US$ millions) 1326 1,552 15,022 9,385 Conversion rate (DEC, /oca//US$) 7.6 43.1 60.6 62.5

EXTERNAL DEBT and RESOURCE FLOWS 1988 1998 2007 2008 ' Compositionof 2008 deM (US$ mill.) (US$ millions) Total debt outstanding and disbursed 7,065 32,261 40,737 49,337 IBRD 3,336 2,086 1946 1108 0 1,395 A 1,946 IDA 1842 3,800 9,075 9,053 Total debt service 1856 2,298 2,600 2,940 IBRD 151 379 398 386 IDA 31 73 197 226 Composition of net resource flows Official grants 424 175 1006 987 Official creditors 950 849 1339 1328 Private creditors -154 369 481 652 Foreign direct investment (net inflows) 186 506 5,590 5,438 Portfolio equity(net inflows) 6 -22 1276 -270 11 058 Wrld Bank program Commitments 570 250 12 m 336 Disbursements 456 348 A- 176 24 1 IBRD E - Bilateral Principal repayments 80 244 418 446 B - IDA D - Other multilsteral F - Private C-IMF G - Short-term Net flows 376 m5 758 -205 Interest payments m2 209 777 166 Net transfers 274 -104 581 -371

Note:This tablewas produced from the Development Economics LDB database. w9109

129

MAP SECTION

IBRD 37316

This map was produced by the 26° 66° 28° 30° 32° a R. Map Design Unit of The World Bank. Kundar 0 50 100 150 200 KILOMETERS . Akra R. Khuzdar Soind The boundaries, colors, Hingol R AFGHANISTAN denominations and any other R. Anjira R. Jogizai information shown on this map do BOLAN DAM R. 0 50 100 MILES not imply, on the part of The World R. Dadhar Kud BALOCHISTAN PROVINCE R. Mula R. Bank Group, any judgment on the Bolan Loralai legal status of any territory, or any Bela Sibi NARI HEADWORKS R. endorsement or acceptance of such boundaries. Parali Wana Tochi R. R. Gaj Nai Nari R. Loralai

R. Miran Shah Kolachi R. Kabul R. Kunar R.

Lahri R. Kaitu Beji Khantra Chakar R. Dhamra Kirtha Thal Arabian R. Zhob R. Kurram Br. 66° S.M. Nasirabad Sehan Br. Shah Bannu R. Can. NORTHWEST FRONTIER R. Sea Windar R. Dadkot Anambar BARAN DAM WARSAK R. Rice Chhatr R. Ghar. Godh PROVINCE DAM HUB Br. R. Swat Dadu Can. W Kohlu Daraban Br. Arah Jacobabad Dadu Zam Tank AMANDARA DAM Can. Hub Begari R. . Can. R. TANDA DAM Peshawar MUNDA HEADWORKS Shaza R. Baran R. Br. Gumal Sangarh R. Karachi R. HEADWORKS N.W Malakand 72° Sehwan Rohri Dar Wat R. Can. Kohat C. Khaipur Desert Sind P

R. A W. C. T Feeder Malir Ali KALABAGH Bhar Khaipur Feeder Can. D.I.Khan CHASHMA Mardan Saidu WAh Sukkur BARRAGE East BARRAGE Can. SUKKUR Kahar R. Khaipur Rohri BARRAGE Sui Ghotki Mianwali Thal Canal Nawabshah TAUNSA Taunsa Indus River Fee Kalo R. Soan River KOTRI Eastern Nara Canal der BARRAGE Mohajir TARBELA Thatta Rohri Canal Can. Attock BARRAGE GUDU BARRAGE Dera Ghazi Khan DAM Kandar Br. D.G. Khan KHANPUR

SIND PROVINCE Jampur Br. Link Jhelum

Hyderabad Chashma Br. Canal DAM Siran Piny Ari Can. Sanghar Dallas R. CHOTIARI DAM & RESERVOIR Dullewala Branch (UNDER CONST.) Rahimyar Br. PUNJAB Harp R. Can. Link Jamrao Sadiq Tanusa Br. Khan Panjnad Br. Abbottabad Br. West Muzaffargarh Piny Can. Br. Muzzaffargarh Khushab 68° Ari Panjnad Br. Rangpur PROVINCE Mirpur Khan Bhanu Rawalpindi ISLAMABAD Rah. Canal Jhelum Nasir Multan Muzaffarabad Fuleli Khas Minchin Br. . Khanpur Br TRIMMU Bunha Channel RAWAL Murree Can. PANJNAD River Khipro Shahpur BARRAGE Jhelum S.Ujabad DAM BARRAGE Northern Br. SIMLY Lined Chenab Kazia Br. Can. Abbasia Sidhnai Pina Dodan R. DAM Canal Can. Br. Mithro Can. Mailsi SIDHNAI Fuleli Lidhran Sargodha Khan Link Jhang Khadir BARRAGE Haveli hnai Kohan R. Can. 74° Dhora Br. Southern Nara Br. River Br. Trimmu Sid L.J.C. RASUL nk Bahawalpur Sidhnai- Jhang Nara BARRAGE Poonch R. L.Gugera River Desert Mailsi Li Chinio Br. Br. Jhelum MANGLA DAM . Line INDIA Bah Jhelum ox l Punch awal Baramula Rakh Can. Approx.Appr ontro Line FaisalabadBr. QADIRABAD of ControlC Pakpattan Br. BARRAGE R.Q.Link Can. Upper M.P. H P.I.Link a Mian KHANKI kra Link Sahiwal ISLAM BARRAGE Ravi Ali Br. L. Sari BARRAGE Can. Branch U Br. Gujrat Malik .Gugera 34° PAKISTAN Q.B.Link Pal Khu Br. Khadir MARALA BARRAGE Fordwah Doab BALLOKI Br. BARRAGE Can. PAKISTAN Can. WATER SECTOR INVESTMENT PLANNING STUDY Fort Abbas Chenab Gujranwala SALAL DAM Bahawalnagar Sialkot Riasi Can. River Aik Nullah Area MAIN CITIES AND TOWNS E. Nullah Link MAIN CANALS Sadiqi Shahdara of map a SULEIMANKI Jammu DISTRICT HEADQUARTERS B.S. Link I Lahore RIVERS, DAMS AND RESERVOIRS Can. LINK CANALS BARRAGE B.R.B.D. Link Ravi Udhampur DRAINS PROVINCE HEADQUARTERS la 70° B.S. Link Ii Mara BARRAGES/HEADWORKS Dipalpur Link Chenab MAIN ROADS NATIONAL CAPITAL Eastern Can. AND RESERVOIRS B.R.B.D. MAIN RAILROADS Can. PROVINCE BOUNDARIES Main Lah Bikaner FEROZEPUR ore Br. River 26° 30° 32° INTERNATIONAL BOUNDARIES BARRAGE Br. Can. U.B.D APRIL 2010 IBRD 37352

PAKISTAN SCHEMATIC DIAGRAM OF PAKISTAN INDUS BASIN WATER SYSTEM

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries.

NOVEMBER 2009