ASIAN DEVELOPMENT BANK PCR: INO 21147

-

PROJECT COMPLETION REPORT

ON THE

NUSA TENGGARA AGRICULTURE DEVELOPMENT PROJECT (Loan Nos. 952[SF]/953-INO)

IN

INDONESIA

January 1997

4 .. . .-. . Mt ift ff ft CURRENCY EQUIVALENTS Currency Unit--Rupiah (Rp)

Currency Unit At Appraisal At PCR (October 1988) (October 1996) Rpl.00 $0000583 $0. 000424 $1.00 Rpl 715 Rp2,360

The exchange rate of the rupiah is allowed to float under the management of Bank Indonesia. In this Report, an exchange rate of $1.00 = Rp2,360 has been used.

ABBREVIATIONS

ADF Asian Development Fund AR Appraisal Report BAPPEDA Provincial Development Planning Agency BAPPENAS National Development Planning Agency DCC Direct Construction Cost DGFCH: Directorate General of Food Crops and Horticulture DGPARA Directorate General of Public Administration and Regional Autonomy DGRD Directorate General of Regional Development DGRLR Directorate General of Reforestation and Land Rehabilitation DGT Directorate General of Tax DGWRD Directorate General of Water Resources Development DISPENDA Regional Revenue Office/Dinas Pendapatan Daerah EA Executing Agency EIRR Economic Internal Rate of Return ENT East Nusa Tenggara EOM Efficient Operation and Maintenance HLD High Level Diversion I DC Interest During Construction 1SF Irrigation Service Fee LD Land Development LRM Loan Review Mission MSF Main Seed Farm OCR Ordinary Capital Resources O&M Operation and Maintenance PBB Land and Building Tax IPajak Bumi dan Ban gunan PCM Project Compietion Mission PCR Project Completion Report PME Project Monitoring and Evaluation P1K Small Irrigation Scheme/Proyek Irigasi Kecil PRAS Provincial Agricultural Services PTGA Water User Training Program/Proyek Tata Guna Air PWRS Provincial Water Resources Services (replaced PRIS) R&U Rehabilitation & Upgrading SCCS Seed Control and Certification Service SDR Special Drawing Rights TDU Tertiary Demonstration Unit WNT West Nusa Tenggara WOC Water Operations Center WUA Water User Association

NOTES

(i) The fiscal year (FY) of the Government ends on 31 March (ii)In this Report, $" refers to US dollars. CONTENTS

Page

BASIC DATA

MAPS

PROJECT DESCRIPTION 1

EVALUATION OF IMPLEMENTATION 1

A. Project Components 1

B. Implementation Arrangements 6 C. Project Costs 7 D. Project Schedule 8 E. Engagement of Consultants and Procurement 8 of Goods and Services

F. Performance of Consultants, Contractors, and Suppliers 9

G. Conditions and Covenants 10 H. Disbursements 10 I. Environmental Impact 10

J. Performance of the Borrower and Executing Agencies 11 K. Performance of the Bank 12

Ill. EVALUATION OF INITIAL PERFORMANCE AND BENEFITS 12

A. Financial Impact 12 B. Economic Performance 12 C. Attainment of Benefits 14

IV. CONCLUSIONS AND RECOMMENDATIONS 14

A. Conclusions 14

B. Recommendations 16

APPENDIXES 19 II'

BASIC DATA A. Loan Identification

1. Country Indonesia

2. Loan Number 952(SF)/953-1 NO 3. Project Title Nusa Tenggara Agriculture Development Project

4. Borrower Republic of Indonesia 5. Executing Agencies Directorate General of Water Resources Development Directorate General of Public Administration and Regional Autonomy Directorate General of Food Crops and Horticulture Directorate General of Reforestation and Land Rehabilitation Directorate General of Tax Directorate General of Regional Development

ADF OCR 6 Amount of Loan SDR18,465,000 $94,000,000 Actual SDR18,188,411 $84,539,189

7. PCR Number 410

B. Loan Data

1. Appraisal - Date Started 19 Sep 1988 - Date Completed 6 Oct 1988

2 Loan Negotiations - Date Started 24 Nov 1988 - Date Completed 26 Nov 1988

3 Date of Board Approval 7 Feb 1989

4 Date of Loan Agreement 1 Mar 1989

5 Date of Loan Effectiveness - In Loan Agreement 1 Jun 1989 - Actual 26 May 1989 - Number of Extensions None

6. Closing Date - In Loan Agreement 30 Sep 1994 - Actual 30 Sep 1995 - Number of Extensions One 1ff 7. Terms of Loans ADF OCR - Service Charge 1 percent - Interest Rate Pool-based variable lending - Maturity 35 years 25 years - Grace Period 10 years 5 years - Commitment Charge 0.75 percent per annum

8. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 26 May 1989 10 May 1996 7 years Effective Date Original Closing Date Time Interval 26 May 1989 30 Sep 1994 5 years, 4 months b. Amounts Cateoory Ojipinal Allocation Last Revised Allocation Net Disbursed Amount Undisbursed Balance a b SDR $ SDR $ SDR $ SDR $ Loan 952(SF)-INO 01 8,214,000 11494019 10015,000 14,014,195 9,905,169 13,852,889 109,831 161,306 II. 02 8,125,000 11,421,078 7,645,000 10,746356 7,501,679 10,535,863 143,321 210,493 III. 03 665,000 972,400 665,000 972,400 647,222 944,337 17,778 28,063 IV. 04 140,000 184,364 140,000 164,364 111,557 142,590 28,443 41,774 V. 05 1,321,000 1,845,454 0 0 0 0 0 0 C 99 22784 -22,784 Subtotal 18,465,000 25,917,315 18,465,000 25,917,315 18,188,411 25,475,679 276,588 441,636 Loan 953-INO l.A. O1A 17,478,000 19,816,564 19,458,395 358,169 IC. O1B 566,000 360,000 239,396 120,604 ID. O1C 859,000 717,840 656,770 61,070 IF. 010 180,000 186,000 143,872 42,128 l.A. 02A 1,673,000 956,000 794,873 161,127 lB. 02B 206,000 123,370 103,147 20,223 IC. 02C 888,000 1,094,000 980,876 113,124 lID. 02D 275,000 404,300 334,349 69,951 lIE. 02E 282,000 282,000 764,404 -482,404 IF. 02F 244,000 280,000 272,242 7,758 lilA. 03A 2,562,000 4,067,515 4,064,640 2,875 I1LB. 038 168,000 434,880 406,005 28,875 IlI.C. 03C 336,000 336,000 237,734 98,266 111.0. 030 420,000 316,240 311,867 4,373 UI.E. 03E 140,000 231,000 212,767 18,233 llI.F. 03F 252,000 252,000 196,872 55,128 IV. 04A 76,000 76,000 48,000 28,000 V.a.A. 05,4 22,066,000 20,635,885 20,129,572 506,313 V.a.C. 05B 1,125,000 974,000 647,256 326,744 V.a.D. 05C 5,566,000 4,655,260 2,900,654 1754,606 V.a.F. 050 351,000 351,000 215,808 135,192 V.b.A. 05E 190,000 969,870 379,651 590,219 V.b.C. 05F 73,000 73,000 78,170 -5,170 V.b.D. 05G 27,000 27,000 26,904 96 V.b.F. 05H 95,000 95,000 10,397 64,603 V.c.A. 051 3,859,000 5,029,824 5,010,239 19,585 V.c.B. 05J 91,000 311,684 299,546 12,138 V.c.C. 05K 1,010,000 1,316,000 1,283,306 32,694 V.c.D. 05L 224,000 342,000 328,283 13,717 V.c.E. 05M 229,000 391,000 390,448 552 V.c.F. 05N 70,000 70,000 63,948 6,052 V.d.A. 050 659,000 785,200 726,354 58,847 V.d.C. OSP 2,096,000 1,946,000 0 1,946,000 V.d.D. 05Q 186,000 316,220 2,044,510 -1,728,290 V.d.E. 05R 48,000 48,000 85,372 -37,372 V.d.F. 05S 669,000 669,000 44,868 624,133 V.e.A. 05T 173,000 36,331 325,434 -289,103 V.e.E. 05U 6,483,000 6,316,000 4,599,877 1,716,124 VI. 05V 1,240,000 1,171,726 968,640 203,086 V.g. 05W 170,000 170,000 53,745 116,256 VI. 06A 14,700,000 14,700,000 14,700,000 0 VII. 07A 5,995,000 2,666,291 0 2,666,291 Subtotal 94,000,000 94,000,000 84,539,189 9,460,811 Total 119917.315 119,917,315 110.014,868 9.902,447 SDR - Special Drawing Rights. a Per Loan Agreement. Per Loan Ledger. Renrsnt yrhRrtr, p rt difcrp rr rticp 1 by r.fp,,ri if ,m,,r$

iv

9. Local Costs (Bank Financed) ADF OCR Government 10.5- Amounts ($ million) 40.6 29.7 - Percentage of Local Costs 13% 50% 37% - Percentage of Total Costs 8% 30% 22%

C. Project Data

1. Project Cost ($ million)

Actual Appraisal Estimate (a) Foreign Cost 61.3 56.6 (b) Local Cost 87.5 80.8 (c) Total Cost 148.8 137.4

2. Financing Plan ($ million)

Appraisal Estimate Actual Foreig n Local Total % Foreign Local Total %

(a) Bank Financing 57.7 119.9 56.6 51.1 107.7 78.0 -ADF 14.0 11.0 25.0 17.0 14.8 10.5 25.3 8.0 - OCR 47.3 46.7 94.0 63.0 41.8 40.6 82.4 60.0 (b) Government Financing 0 29.8 29.9 20.0 0 29.7 29.7 22.0 Total 61.3 87.5 148.8 100.0 56.6 808 137.4 100.0

3. Cost Breakdown by Project Component ($ '000)

Appraisal Estimate Actual Foreign Local Total Foreign Local Total

(a) Irrigation Development 39,754 56,448 96,202 38,219 56,022 94,241 (b) Irrigation Service Fee 438 145 583 509 324 833 (c) Agriculture Development 2,107 6,195 8,302 1,458 5,097 6,555 (d) Soil and Water Conservation 1,883 6,349 8,232 1,303 3,527 4,830 (e) Land Tax Improvement 525 7,068 7,593 977 5,155 6,133 (f) Strengthening of BAPPEDA 803 1,295 2,098 613 749 1,362 (g) Taxes and Duties 0 10,000 10,000 0 9,976 9,976 (h) Interest During Construction 15,600 0 15600 13,341 0 13,341 (i) Refinancing of TA 190 0 190 143 0 143 Total 61,300 87,500 148. 800 56,563 80,849 137,412

4. Project Schedule Appraisal Estimate Actual (a) Date of Fielding Consultants - Irrigation Development Oct 1989 Sep 1989 Aug 1992 - Irrigation Service Fee Sep 1990 - Agriculture Development Apr 1990 Jul 1991 Mar 1991 - Soil and Water Conservation Apr 1990 - Land Tax Improvement Apr 1990 Feb 1992 - Strengthening of BAPPEDA Jan 1990 Mar 1991 V

(b) Civil Works Contract - First Award - Irrigation Development Oct 1989 Sep 1990 - Agnculture Development Oct 1989 Aug 1992 - Soil and Water Conservation Apr 1990 Mar 1992 - Land Tax Improvement Apr 1990 Sep 1992 - Strengthening of BAPPEDA Apr 1990 Jun 1991

Completion of Work - Irrigation Development Jun 1994 Sep 1995 - Agriculture Development Jun 1994 Jun 1995 - Soil and Water Conservation Sep 1993 Sep 1995 - Land Tax Improvement Sep 1994 Sep 1994 - Strengthening of BAPPEDA Oct 1992 Nov 1993

(c) Start of Operations - Irrigation Development May 1989 Jun 1989 - Rehabilitation and Upgrading Jul 1991 Mar 1992 - Operation and Maintenance Oct 1989 Apr 1992 - Agriculture Development Apr 1990 May 1990 - Land Tax Improvement Oct 1989 Apr 1991 - Irrigation Service Fee Mar 1991 Apr 1993

D. Data on Bank Missions No. of No. of Per- Specialization of Name of Mission Date Persons son-days Members1

Inception Mission 25 May-31 May 1988 1 7 Sr. Project Engineer Review Mission 3 Sep-il Sep 1990 1 9 Project Engineer Special Loan Administration 27 Jan-2 Feb 1991 3 18 Technical Assistants Review Mission 23 Sep-2 Oct 1991 1 10 Project Engineer Midterm Review Mission 1 Dec-9 Dec 1992 2 18 Project Engineer CL), Technical Assistant Review Mission 30 Sep-8 Oct 1993 1 9 Staff Consultant/Design Construction Specialist Review Mission 1 Nov-10 Nov 1993 1 11 Project Engineer Review Mission 26 Sep-7 Oct 1994 2 24 Project Engineer (L), Project Officer Review Mission 29 Jun-9 Jul 1995 1 11 Project Engineer

Project Completion Mission2 7 Oct-9 Oct 1996 1 3 Project Implementation Officer (L) 23 Oct-i Nov 1996 1 10 Project Implementation Officer CL) 9 Oct-23 Oct 1996 1 15 Project Officer 30 Sep-15 Nov 1996 1 43 Staff Consultant' Agricultural Economist Total 188

L Mission Leader. 2 This report was prepared by a Bank Mission comprising W.H Menninger, Project Implementation Officer, IRM (Mission Leader), PP. Wardani (Project Officer, IRM), and Robin Erickson (Agriculture Economist/Staff Consuttant) The Mission carried out the field work from 30 September to3l October 1996. 110°00E 130°00E INDONESIA NUSA TENGGARA AGRICULTURAL DEVELOPMENT PROJECT 1 0°00N (as completed) 100001N I

Banda Aceh

Medan 0 100 200 300 400 500 0 -- Kilometers /__ SUMATRA /" PULAUNIAS - Manado 7— j1---.-'-r- 0 HALMAHERA ,------) o o 00 0 - Pekanbaru KALIMANTAN I Pontianak Samarinda SULAWESI Biak Padang 0 0 - 0Poso Jambi BANGKA -- PUI.AU SI8ERUT 0 CERAM ralangkaraya Jayapura 0 0 Bengkuiu - 0 IRIANJAYA Banjarniasin Kendari Ambon Tanjungkarang 0 BURU 0 U J a arta Ujung Pandang ( : JAVA MADURA KEPUI.AUANARU Bandung Semarang 0-- 0 Surabaya SUUBAWA Yogyakarta Mu Mataram FLORES Duli Denpasar / 0 / 0 10000,s 1 0°00S WEST NUSA / Kupang TENGGARA C) Project Area EAST NUSA

- I fl C,,.-+I.#. ._I n-.-,...-. .;.. TENGGARA I C IzaI II Ik1uancahILu flIO IJflI I IC9 IJII 9 rehabilitated under Loan 1241-INO: Flores Emergency (J Reconstruction Project) National Capital 0 City/Town Provincial Boundary - - - -. International Boundary (Boundaries not necessarily authoritative)

9)C0 r') r') aCo I 1 10°00E 130000E

116°15'E 1 16°15'E Other Irrigation Schemes IN DON ES IA 10. Pawang Kates 11.IrengDaya WEST NUSA TENGGARA 12. Datar 13. Mamben 'ProposedSesaot PROJECT LOCATION / EAST Canal Divecson 'f- . LOMBOK (as completed) - 8°30'S Mataram k L d MB OK 13

Mataram Mantang OMB0K,' WEST LOMBOK / Selong Pengga LOCATION MAP 1 16°15E

• t Parung 8°45S 8°45'S Jucano Pengga Dame Katon lu

1 Tibunartgka 4 RujurI 012345 10 Appraisal As Built — Name of Subproject Area (ha) Area (ha) Kilometers Pengga-related Irrigation Schemes 1 Pengga 4,150 4,149 Kutem 2. Parung 1,210 1,270 3. Jurang Batu 3.500 3,500 4. Tibunangka 2,270 2,285 5. Renggung 1,200 1,260 6. Mujur I & II 4,650 4,530 7. Katon 2,960 1,886 8. Rutus 1,400 1,453 Additional Scheme 9. Kulem 0 1,135

Subtotal 21,340 21,468 Other Irrigation Schemes 10. Pawang Kates 280 339 Project Area - Proposed Canal 11. IrengDaya 320 278 Other Existing Irrigation Scheme High Level Diversion 12. Datar 590 634 0 Distict/Village River 0 13. Mamben 400 346 P Road - District Boundary

0, Subtotal 1,590 1,597 to Dam/Weir (Boundaries not necessarily authoritative) to Total 22,930 23,065 1 16°15'E I r') 120°00E 124°00'E

IN DON ES IA 1-UA 5E.4 EAST NUSA TENGGARA PROJECT LOCATION

(as completed) 8°00'S -1 - 8°0OS

FLORES TIMUR

Komodo MA NGA PAl PA NTA A SOLOR

®

Atambua

TIMEATAMBUA"

Appraisal As Built Name of Subproject KUPANG Area (ha) Area (ha) © TENGAH SUM BA SELATAN Lembor 6000 4,487 TlR - 10000,S 1. 10°00S - 2. WaeBobo 150 125 Wae Cess 502 502 3. Kupang 4. Kajum Bawa 40 49 5 Maa Bawa 50 29 TIMOR 6. Mautenda IV 413 0 7. Magepanda 803 0 0 50 100 8. Pruda 220 0 — — - 9. Kolesia 127 0 Kilometers 10. Melolo 698 698 11. Mataiyang 1,173 1,216 12. Kakaha 509 509 ROTE 1992 Earthquake-affected Area 13. Kambaniru 1,680 1,240 14. Koritepe 343 359 Project Irrigation Scheme ® 15. Ponu 323 381 0 District/Town 16. Haekto 400 388 Road 17. Loli 37 37 River 18. Oeloan 202 76 19. Peto 70 75 Kabupaten Boundary N) (Boundaries not necessarily authoritative) Total 13,740 10,171 9) N) N) N) 0) 1 20°00E 1 24°00E I (A) I. PROJECT DESCRIPTION

1 The main objectives of the Project were to optimize the utilization and performance of existing irrigation schemes in West and East Nusa Tenggara provinces (WNT and ENT) to increase benefits through improved irrigation facilities, more efficient operation and maintenance (O&M), improved agriculture extension services, and direct involvement of the farmers. The focus was on development in the eastern provinces, the driest region in Indonesia. The fifth Five-year Development Plan (Repelita v/i 989/90-1993/94) emphasized consolidating and stabilizing the gains realized from past irrigation investments and expanding diversified crop production, creating rural employment opportunities, and achieving balanced regional development with an increased effort on diversifying the agricultural base.

2. The Project included (i) irrigation develppment through rehabilitation and upgrading (R&U) of existing irrigation schemes on about 36,670 hectares (ha), introduction of efficient operation and maintenance (EOM) on about 36,670 ha, handing over of about 4,290 ha of small irrigation schemes to the water user associations (WUAs), and institutional strengthening; (ii) introduction of irrigation service fee (1SF) on about 32,380 ha; (iii) agricultural development including land development on about 2,300 ha, establishing 13 tertiary demonstration units (TDUs), installation of four agroclimatic stations, improvement of seed production, and institutional strengthening; (iv) soil and water conservation on about 1 0,000 ha; (v) land tax improvement on about 210,000 ha; and (vi) strengthening of planning and coordination at provincial- and district-level development planning agencies (BAPPEDAs) 2

II. EVALUATION OF IMPLEMENTATION

A. Project Components

1. Irrigation Development

a. Rehabilitation and Upgrading of Existing Irrigation Schemes3

3. In WNT, existing small- to medium-scale irrigation schemes on 23,065 ha, or about 101 percent of the appraisal target, were rehabilitated and upgraded. The major R&U work was carried out on (i) Pengga dam, (ii) Keru and Sesaot diversion canals including extension of the Jangkok-Babak high level diversion (HLD) canal, (iii) Jurang Sate main canal (remodeling), (iv) Jurang Batu and Katon main canals, (v) Renggung HLD canal including extension, and (vi) the main and tertiary systems of nine irrigation schemes.

4. In ENT, rehabilitation and upgrading were carried out on 10,171 ha, or 74 percent of the appraisal target. In December 1992, an earthquake and tidal wave hit the north coast of Flores and caused extensive damage in the districts of Ngada, Ende, Sikka, and east Flores. The

The eligible area for EOM should have been only 32,380 ha because the small irrigation schemes, less than 500 ha, would not qualify for EOM funds. 2 The strengthening of BAPPEDA in WNT was not in the original Project design, but was added later during implementation of the works. Rehabilitation also included small irrigation schemes less than 500 ha. 2

earthquake nearly destroyed Mautenda IV, Magepanda, Pruda, and Kolesia irrigation schemes (1,563 ha), which were under construction. 1 The shortfall in meeting the target was due mainly to (i) the nonfeasible schemes of Wae Bangka, Wae Sele, Wae Lombur, Wae Kanta 1, Wae Kanta 2, and Wae Cewo; and (ii) loss of four schemes because of the earthquake. During construction of the Kambaniru barrage, several construction problems were noted. The Bank had determined that the stilling basin needed to be redesigned; otherwise, the structure was in danger of failure. The completed R&U schemes for WNT and ENT are shown in Appendix 1.

b. Efficient Operation and Maintenance (EOM)2

5. The appraisal estimated that 36,670 ha would enter the EOM program. 3 Most of the irrigation schemes were not completed until the later part of the Project and therefore only a few Project schemes entered the program. Because EOM is a nationwide policy, Bank funds were used for both irrigation schemes rehabilitated under the Project and other schemes that met the minimum criteria. Under the Project, Bank-financed program covered 48,133 ha, or 149 percent of the revised appraisal target (32,380 ha). The Government will introduce new funding procedures for EOM beginning in 1997 whereby the Central Government will give the provinces block grants amounting to Rp35,000/ha. 4 Details of the EOM program are shown in Appendix 2.

c. Water Operations Center in WNT

6. The Provincial Water Resources Services (PWRS) established a Water Operations Center (WOC) in WNT in 1991. The computer model is extremely important for water operations in southern Lombok, but requires wider acceptance by the local government. Once the model is accepted as reliable and incorporated into the decision-making process, the numerous systems will operate more efficiently. At present, the line of instruction is ineffective because it involves two different government agencies: PWRS and the local government.

d. Water User Associations

7. In WNT, 185 WUAs have been established in the Project irrigation schemes; 61 of them have received training and 65 have attained legal status. In ENT, 25 WUAs have been established; all have been formally registered, but none have attained legal status. The WUAs were reported as functional; however, it is obvious that they need strengthening particularly in management and financial matters. Direct participation of the WUAs is required for EOM. The status of the WUAs is summarized in Appendix 3.

The Government is rehabilitating the damaged irrigation schemes under the Bank financed Loan 1241(SF)- NO: F/ores Emergency Reconstruction Project, for SDR1 8,428,000, approved on 1 July 1993. 2 EOM is defined as providing the correct volume of water to meet the crop water requirements and provide adequate level of maintenance. This was incorrect because the area for EOM should not have included the small irrigation schemes under 500 ha. The target should have been 32,380 ha or the same amount that was to enter the 1SF program if every scheme had been completed as planned and eligible to enter the program. Information provided by the National Development Planning Agency (BAPPENAS) in December 1996. 3

e. Handing Over of Small Irrigation Schemes to WUAs

8. In WNT, 963 ha or 96 percent of the appraisal target of 1,000 ha was handed over to the WUAs. In ENT, 1131 ha or 34 percent of the target of 3,290 ha was handed over. The overall achievement was 49 percent of the original target. Because of the Flores earthquake and a major flood in west Timor, four schemes (concerning about 1,1 03 ha) were taken out. of the program. With this deletion, the achievement was 66 percent of the revised target of 3,187 ha. PWRS.-ENT is less familiar with the program than PWRS-WNT. Many of the WUAs in ENT are not ready to accept responsibility for O&M. Details of the program are shown in Appendix 4.

f. Institutional Strengthening

9. Comprehensive training plans were prepared by PWRS of both provinces. The plans included training in planning, O&M, and constrUction. Training used modules that had been developed by Directorate General of Water Resources (DGWRD) over several years. Training and O&M equipment, vehicles, and materials were also provided to PWRS. WUAs were trained through the water users training program. Staff increases at both provinces were substantial, with an overall 23 percent increase in engineers and 77 percent increase in non-engineering positions. This should make a substantial difference in the overall management and administration of irrigation in the future. Details on training and staffing are shown in Appendix 5.

g. Status of 1987 O&M Policies

10. In 1987, the Government issued an O&M policy statement covering six policies: (I) funding of O&M based on actual needs, (ii) cost recovery through introduction of a new land tax system, (iii) 1SF, (iv) institutional strengthening of government agencies and WUAs, (v) improved system for O&M budgeting and programming, and (vi) more rationalization of irrigation investments. The six policies are expected to be introduced nationwide over a period of 15 years. Appendix 6 shows the status of the policies with respect to the Project and nationwide.

2. Irrigation Service Fee

11. At appraisal, the plan was to introduce 1SF in a target area of 32,380 ha; however, the actual area was 24,739 ha or 76 percent of the target. With 1SF contributions of about Rpl 4,000-1 6,000 in WNT and Rpl 0,000-1 8,000 in ENT, the collection rates were below targets. In WNT, the collection rates were about 75 percent in 1994 and 76 percent in 1995. In ENT, rates declined 69 percent to 42 percent during the same period because of the very low achievements of certain subprojects. 1SF revenue plus the funds provided by the local government were insufficient to meet the O&M requirements estimated at Rp50,000/ha. O&M funds provided by the local government in ENT were only sufficient to cover salaries of maintenance staff. The details of 1SF collection rates are shown in Appendix 7. 4 3. Agricultural Development

a. Land Development

12. At appraisal, land development (LD) was to be carried out by Directorate General of Food Crops and Horticulture (DGFCH) on about 2,300 ha, During implementation, it was completed on 5,472 ha or approximately 238 percent of the target. It was anticipated that LD would be carried out using the prefinancing/credit arrangements that were being introduced under another Bank-financed project in Bengkulu and Lampung. 2 The arrangements were unsuccessful and so the Government decided it would be solely responsible for LD using government resources. In 1993, it decided that LD would be carried out by DGWRD instead of by DGFCH. Under the Project, however, both Executing Agencies carried out LD. 3 Appendix 8 shows the extent of LD.

b. Tertiary Demonstration Units

13. In accordance with the appraisal, seven TDUs were constructed in ENT and six in WNT (see Appendix 9). TDUs were to (i) demonstrate improved rice and secondary crop production, improved on-farm water management, adaptive research and trials; and (ii) provide training centers for farmers and government officials working and living in or near the tertiary systems. All 13 TDUs were constructed to standard plans within selected Project irrigation schemes. TDUs were also intended to be a source of agricultural extension information to farmers outside the TDU boundaries. Rice yields reportedly climbed from about 1 .5-3.5 tons (t) per ha to 5-8 t per ha at demonstrations in ENT, and from 4-6 t per ha to 6-8 t per ha at demonstrations in WNT. While there is always a gap between demonstrations and average farmer results, the yields indicate that production could increase with good cultivation practices and sufficient irrigation supplies. Four TDUs in ENT are nonfunctional at present primarily because they were constructed before the irrigation systems were completed and staff are no longer available.

c. Agroclimatic Stations in ENT

14. In accordance with the appraisal, four agroclimatic stations to be operated by the district agricultural services were constructed in ENT. The four stations are in a state of disrepair and most of the observation equipment is either broken or non-functional. In addition, no permanent observer has been posted at any of the stations. Nevertheless, the agriculture extension agents are attempting to collect data even though they have no training for the purpose or a clear understanding of the instruments as no operating manuals are available at the stations. The agroclimatic stations are currently serving no purpose as a result of improper timing of construction, lack of security for the facilities, and lack of permanent staff (see Appendix 9).

1 Land development is the conversion of slightly forested or nonproductive grasslands into rice fields. The farmers &so participate as laborers to the primary contractors in forming of bunds and terraces. 2 Loan 818-INO: Irrigation Command Area Development Project (ICAD), for $28.8 million, approved on 11 December 1986. The Bank financed only LD carried out by DGFCH. 5

d. Improvement of Seed Production

15. Under the Project, two existing seed farms in WNT and two Seed Control and Certification Services (SCCS) in ENT were to be rehabilitated. TDUs were to be contracted to grow certified seed. In WNT, the facilities were constructed; however, they are underutilized for lack of equipment and staff. In ENT, seed facilities in Kupang and east Sumba are also underutilized because of budget and staff constraints. At the SCCS in Kupang. two buildings were rehabilitated; however, one is used partly for office space while the other building is vacant. None of the TDUs had participated in seed production because farmers were not interested and no program had been developed by the Provincial Agricultural Services (PRAS). Details on the seed centers are shown in Appendix 10.

e. Institutional Strengthening

16. Institutional strengthening was carried out at the PRAS through training and provision of equipment and vehicles. Training was for WUAs (especially in TDU areas), and field extension and seed services staff. As reported, 122 classes were held for 2,594 trainees (see Appendix 11). In addition, six overseas programs with 16 participants were carried out in Thailand, USA, Philippines, and Australia.

4. Soil and Water Conservation

17. In WNT, agroforestry was carried out on 2,782 ha with the planting of fruit trees. Reforestation was carried out on 5,200 ha; survival rate was 80 percent. Most of the works on gully control, check dams, waterways, drainage, forest roads, and workshops were accomplished. About 58 percent of the planned agroforestry in ENT was accomplished, although survival rates estimated at about 50 percent were low. Reforestation was accomplished on only 230 ha because of limited staff and other upper watershed programs in ENT. Most of the works on nurseries, demonstration plots, and gully control were also accomplished in ENT (see Appendix 12).

5. Land Tax Improvement

18. The Project supported the improvement of the new land taxation system through improved mapping and land value reassessment. At appraisal, about 180,000 ha was to be reassessed in WNT and 30,000 ha in ENT. The activities included aerial photography and photomapping, village mapping, identification of landholdings, classification of landholdings based on market value, and registration. The actual area mapped and reclassified was 163,100 ha in WNT and 141,480 ha in ENT, or 145 percent of the appraisal target. About 17,590 ha of 22,930 ha of the irrigation subprojects in central and east Lombok, WNT, was included in the program. In ENT, 13,200 ha of the 13,740 ha of the irrigation subprojects was included. Details on the system are summarized in Table 1. 6

Table 1: Implementation of the Land Tax Component

Province Appraisal Actual Irrigation Tax Collection (ha) (ha) Subprojects Before After Included Project Project (ha) 1992 1994 (S) (5)

West Nusa Tenggara 180.000 163100 17,590 176,060 283,456 61

East Nusa Tenggara 30000 141480 13,200 82,550 102,609 42

Total 210000 304580 30790 256,610 386,065 49

6. Strengthening of Planning and Coordination at Provincial and District Levels

19. The Project had originally included the strengthening of planning and coordination (and monitoring) only in ENT. In July 1991, acting on the Government's request, the Bank agreed to include WNT. The activities comprised additional staff, and provision of office equipment, transportation facilities, and training. As a result of the Project, (I) project coordination guidelines, five-year physical and financial plans of ENT, and schematic maps and diagrams for 19 irrigation systems in ENT were produced; (ii) annual progress reports and project completion reports in the Indonesian language for both provinces were prepared; (iii) regular meetings to monitor Project implementation were held, particularly in WNT; (iv) office equipment was procured, (v) ten office buildings in ENT and one office building in WNT were constructed; and (vi) government staff in both provinces received training.

B. Implementation Arrangements

20. The six Executing Agencies (EAs) for the Project were (I) the Directorate General of Water Resources Development (DGWRD) for irrigation development, (ii) the Directorate General of Public Administration and Regional Autonomy (DGPARA) for 1SF, (iii) the Directorate General of Food Crops Horticulture for agriculture development, 1 (iv) the Directorate General of Reforestation and Land Rehabilitation (DGRLR) for soil and water conservation, (v) the Directorate General of Taxation (DGT) for land tax improvement, and (vi) the Directorate General of Regional Development (DGRD) for strengthening of planning and coordination at provincial and district levels. BAPPENAS monitored and coordinated the activities of participating agencies and financing. Coordination was one of the major weaknesses of the Project as most of the EAs acted on a sector basis and BAPPENAS did not hold sufficient meetings to resolve the various issues. At each PWRS, a Project Monitoring and Evaluation Unit (PME) was established to collect regular data on crop production,etc. and continues to provide PWRS with information regarding yields and problems relating to each scheme.

The Directorate General of Food Crops Agriculture (DGFCA) was changed to DGFCH in 1993.

7 C. Project Costs

1. Project Cost

21. At appraisal the total cost of the Project was estimated at $148.8 million, of which about $61 .3 million (41 .2 percent) represented the foreign exchange costs (including $15.6 million for interest during construction [IDC] and service charges during construction) and $87.5 million (58.8 percent) represented the local currency costs, including taxes and duties. The actual expenditures in current prices amounted to $139.7 million, or 93.9 percent of the appraisal estimate. Of this, $58.9 million (42.2 percent) represents the foreign exchange costs (including $13.3 million of IDC and service charges) and $80.8 million (57.8 percent) represents the local currency costs. The Project costs as appraised and as actually incurred are shown in Table 2. Details are shown in Appendix 13.

Table 2: Project Cost, Appraised and Actual ($ '000 in Current Prices)

Item Appraisal

Estimate Actual Underrun Percent

1. Irrigation Development 96,202 94,241 1,961 97.9

2. Irrigation Service Fee 583 833 (250) 142.0

3. Agriculture Development 8,302 6,555 1 .747 78.9

4. Soil and Water Conservation 8,232 4,830 3,402 58.7

5. Land Tax Improvement 7,593 6,133 1,460 80.8

6. Strengthening of BAPPEDA 2,098 1,362 736 64.9

7. Taxes and Duties 10,000 9,976 24 99.7

8. Interest During Construction 15,600 15,644 (44) 100.3

9. Refinancing of TA 190 143 47 75.2

Total 148.800 139,715 9,085 93.9

2. Financing

22. The Bank approved blended Loans 1 to finance $1 19.0 million equivalent or 80 percent of the total Project cost, of which $25.0 million equivalent or SDR1 8,465,000 came from the Bank's ADF and $94.0 million from the Bank's OCR (see Table 3). The balance of $29.8 million (20 percent of the Project cost) was to be provided by the Government. During implementation, disbursements from the Bank amounted to $1 10.0 million, while the Government financed $29.7 million equivalent in local costs. Overall, the Bank financed 79 percent of the actual Project costs and the Government provided 21 percent (see Appendix 13). The increase in Government financing was partly due to the higher cost of land acquisition and resettlement ($5.7 million actual versus $2.9 million anticipated at appraisal) for Pengga dam and irrigation systems.

Asian Development Fund (ADF) and Ordinary Capital Resources (OCR). 8

Table 3: Financing of the Project (S million)

Appraisal Actual

Source Foreign Local Foreign Local Exchange Cost Total % Exchange Cost Total %

Bank 61.3 57.5 119.9 80 58.9 51.1 110.0 79 ADF 14.0 11.0 25.0 17 14.9 10.5 25.5 18 OCR 47.3 46.7 94.0 63 43.9 40.6 84.5 61 Governt 0.0 29.8 29.9 20 0.0 29.7 29.7 21 Total 61.3 87.5 148.8 100 58.9 80.8 139.7 100 ADF - Asian Development Fund, OCR - Ordinary Capital Resources

D. Project Schedule

23. It was envisaged that implementation would require about five years from FYi 989/90 to FY1993/94. The loan was declared effective on 26 May 1989 with the original loan closing date of 30 September 1994. The Project required a one-year extension up to 30 September 1995 to allow for completion of the civil works for the irrigation schemes in ENT and soil and water conservation activities. Appraisal targets and approximate periods are shown in Appendix 14.

E. Engagement of Consultants and Procurement of Goods and Services

1. Consultants

24. Consultants were recruited in accordance with the Bank's Guidelines on the Use of Consultants. International consulting firms, in association with domestic consulting firms, were engaged to advise, assist, and provide transfer of knowledge to the EAs and their respective provincial agencies. At Project completion, a total of 1,577 person-months had been used compared with 1,080 person-months envisioned at appraisal thus 37 percent increase required an additional $3.44 million. Table 4 gives the summary of consulting services for each component.

Table 4: Consulting Servicesa for Project Implementation (person-months)

Component Appraisal Actual

D Total D Total

A. Irrigation Development 1. WNT 145 284 429 192 475 667 2. ENT 38 182 220 80 293 373 B. Irrigation Service Fee 12 10 22 24 54 78 C. AgriculturalDevelopment 24 264 288 24 292 316 D. Soil and Water Conservation 30 24 54 32 31 63 E. Land Tax Improvement 10 39 49 11 39 50 F. Strengthening of BAPPEDA .j ...Q Q ...... Q _Q Total 277 803 1,080 393 1,184 1,577 - international, D - domestic. 9 2. Civil Works and Equipment

25. Except for the contract for Pengga dam, the civil works contracts for the irrigation development were awarded through local competitive bidding in accordance with the Bank's Guidelines for Procurement. The civil work contracts for land development carried out by DGFCH and DGWRD were awarded on the basis of Government procedures.

26. All the equipment and vehicles were procured on the basis of international shopping in accordance with the Bank's Guidelines for Procurement. Minor office, training, and farm equipment were procured through local competitive bidding or direct purchase in accordance with Government procedures acceptable to the Bank.

F. Performance of Consultants, Contractors, and Suppliers

Consultants

27. The consultants for the irrigation development component performed satisfactorily. Domestic consultants were engaged before the start of the Project to conduct surveys and investigations, and to design the small- to medium-scale irrigation schemes. Many of the designs needed substantial revisions during implementation. The Pengga dam in WNT was designed by the Project consultants who also supervised construction. The consultants for the 1SF component performed satisfactorily. The methodology for 1SF had been successfully achieved under pilot projects financed by both the World Bank and the Bank; therefore, introduction was expected to be relatively straightforward. Implementation of 1SF should have been primarily the responsibility of the district-level agencies. However, the EA relied extensively on the consultants to implement the program. The consultants for the agricultural development component performed satisfactorily, although the timing of the services was not coordinated well with the irrigation component and therefore many of the expectations were not achieved or were accomplished too early. This is basically a problem of poor interagency coordination and the primary goal of each agency was to meet targets, both physical and financial, without much concern for sustainability. The consultants for the soil and water conservation, land tax, and institutional strengthening components performed satisfactorily.

2. Contractors and Suppliers

28. The performance of the civil works contractors was generally satisfactory, although the quality of works was poor in the placement of some canal embankments and minor structures, and foundation settlement was noted in some buildings. Civil works are superior in WNT because of the availability of building materials and quality of staff. The works in ENT were located in isolated areas and quality of work was lower.

29. However, the quality of work on the Kambaniru barrage and irrigation system is considered excellent, although expensive, and is a good example of what can be achieved with proper supervision and management in remote areas. The performance of the suppliers of equipment and materials, and vehicles was satisfactory. 10

G. Conditions and Covenants

30. The Government has complied with most of the loan covenants (see Appendix 15), but had difficulties with those re'ating to (I) submission of audited financial reports, (ii) providing adequate staff, (iii) introduction of EOM upon completion of irrigation schemes, (iv) handing over of small irrigation schemes. (v) increases of O&M funding on all irrigation schemes where EOM had been introduced, and (vi) formation and strengthening of WUAs. Three of the six EAs had prepared completion reports that assisted in the preparation of the Project Completion Report (PCR).

H. Disbursements

31. The actual disbursements of both loans were made over a period of seven years (May 1989 to May 1996) compared with five years and four months envisaged at appraisal. The longer disbursement period was caused by the delay in the completion of R&U, primarily in ENT. Disbursements from the Bank's ADF and OCR loans amounted to SDR18.2 million or $25.5 million equivalent and $84.5 million, respectively. The value of the ADF loan had increased from $25.0 million at appraisal to $25.9 million at the time of the PCR. The unused balance of about SDR276,588 or $0.4 million equivalent of the ADF loan and $9.5 million of the OCR loan were cancelled in April 1996 and May 1996, respectively. The annual disbursement of the two loans is shown in Appendix 16.

I. Environmental Impact

32. The Project had a major positive impact on securing water supplies to remote areas in extremely water deficit regions. Irrigated agriculture, the only viable means of agriculture production in those areas, was enhanced and households obtained water for domestic purposes. The Melolo scheme in east Sumba, ENT, may have a water quality problem that should be evaluated by local officials, as several farmers in the area complained of skin eruptions (similar to boils and rashes) from the irrigation water. The construction of the Pengga dam resulted in the resettlement of about 1,250 people. The Project had a positive impact on the Pengga resettlers as they were given land that was served by a new dam and irrigation facilities in Sumbawa. The Kambaniru villagers (about 200 people) were only moved to higher ground above the high water level of the impoundment and therefore were not negatively affected.

33. The soil and water conservation interventions had a positive impact on partial reduction of soil erosion in the upper watersheds; however, the program in ENT was not totally implemented because other provincial upper watershed programs were ongoing and the local government staff did not give sufficient attention to the Project. Upper watersheds have been damaged by overgrazing of cattle and slash-and-burn agriculture practices that increase erosion rates. Sedimentation was observed behind the Melo!o weir and downstream of the Kambaniru barrage. The rivers in Flores are heavily laden with silt because of the high-intensity rainfall in the mountains above the irrigation systems. The water that flows into the Pengga dam is also heavily laden with sediment. The Government should give priority to these watersheds as they are heavily degraded and Project interventions had minimal effect in improving the situation. 11

J. Performance of the Borrower and Executing Agencies

1. Interagency Coordination by BAPPENAS

34. BAPPENAS was expected to hold quarterly meetings, but it seldom did. Wrap-up meetings were held at DGWRD. Many of the problems experienced during implementation could have been resolved if BAPPENAS had taken a more active role in the Project. The 1987 O&M policies needed direction and the provincial agencies required precise instructions on implementation. As BAPPENAS was the head of steering committees at the time, it could have been more instrumental in guiding the Project.

2. Irrigation Development

35. DGWRD, through the PWRS in WNT and ENT, carried out the physical works on irrigation schemes. However, it did not adequately guide PWRS on the 1987 O&M policies and their implementation. In addition, the participatory role of the farmers was less than that required to secure a sense of ownership. The number of WUAs established was less than expected and weaknesses are apparent. The performance of the EA is, however, considered satisfactory as the irrigation facilities are nearly complete and the farmers' livelihoods have improved significantly.

3. Irrigation Service Fee

36. DGPARA, assisted by the local provincial offices (BAPPEDAs, PWRS, and DISPENDA), was unable to meet its targets. The primary reason is that it did not provide sufficient funds, equipment, or training to the provincial- and district-level staff. Most of the work was carried out by consultants with lack of enthusiasm and support from the EA. The performance of the provincial agencies was satisfactory; however, the performance of the EA is considered less than satisfactory.

4. Agriculture Development

37. DGFCH, assisted by Project Management Units established at the PRAS in both provinces, provided ineffective guidance and support. Even though the civil works on the seed farms and TDUs were accomplished and equipment/materials procured, the facilities are generally in a state of disrepair and qualified staff are not available. The EA should have taken a more active role with the PRAS during implementation, particularly in timing of the various activities. The performance of the EA is considered less than satisfactory, and the performance of the provincial and district agricultural agencies in ENT is considered unsatisfactory as most of the facilities are nonfunctional and need extensive repair work.

5. Soil and Water Conservation

38. DGRLR, assisted by the Sub-Center for Land Rehabilitation and Soil Conservation (SLRSC) in each province, had prepared a detailed program for implementation in both WNT and ENT. Results were less than expected in ENT primarily because other government watershed programs were given higher priority. Shortage of funds and staff, as well as other provincial priorities, prevented the targets in ENT from being achieved. The performance of the EA and the district agencies, is, however, considered satisfactory. 12

6. Land Tax Improvement

39. DGT, assisted by the land and building tax inspection offices at both provinces, had exceeded the targets. The performance of the EA is considered fully satisfactory.

7. Strengthening of the BAPPEDAs

40. DGRD, assisted by BAPPEDAs at each province, had prepared appropriate programs for implementation. The activities were implemented successfully. Guidance of the agriculture and soil and water conservation programs and implementation of the 1987 O&M policies could have been more effective, particularly in resolving the issue of conflicting watershed programs in ENT. The performance of the EA is, however, considered satisfactory.

K. Performance of the Bank

41. Administration of the Project was delegated to the Indonesian Resident Mission (IRM) at the outset. This provided an excellent opportunity to discuss major issues with the EAs. The Bank had requested BAPPENAS to hold regular meetings; however, these did not take place. The Bank fielded eight Loan Review Missions (LRM) totaling 120 person-days. The LRM alerted the EAs to problems and made sound recommendations. The Bank was instrumental in identifying design and construction problems at the Kambaniru barrage.

42. However, the Bank should have taken more corrective action on the agriculture, and soil and water conservation programs, and insisted on appropriate implementation of the 1987 O&M policies. Improper timing of various activities and inadequate funding were identified by LRM, however, the EAs generally failed to take appropriate actions. Follow-up on the distribution of equipment and materials to the TDUs in ENT should have been done by Bank staff. Overall, the Bank's performance is considered satisfactory.

Ill. EVALUATION OF INITIAL PERFORMANCE AND BENEFITS

A. Financial Impact

43. The financial impact is expected to range from Rp430,000 a year ($1 85) for a small farm of 0.35 ha to Rp980,000 a year ($422) for a larger farm of 0.80 ha. 1 Many of the beneficaries are currently subsistence farmers. As lower level of income, the marginal propensity to consume is higher. While having some implication for 1SF collection, the increased income should, in general, be sufficient to pay the Rp35,000-40,000 per ha needed for 1SF.

B. Economic Performance

44. Economic analysis was undertaken for sample subproject sites. The sample represents 93 percent of the irrigation construction costs for the entire Project. The construction costs for

The appraisal had estimated the individual farmers incremental financial income at $140 in western WNT, $260 in eastern WNT, and $390 in ENT.

13

the irrigation schemes ranged from a low of $464 per ha to a high of $8,980 per ha, with Project average of $1,707 per ha.

45. Only the direct benefits of the increased agricultural production were considered in the economic analysis. There are numerous nonquantified benefits as well. Institutional strengthening of EAs and WUAs is one of the main improvements. The local domestic water supply has been enhanced and secondary business activity is developing as a result of crop intensification and production increases. Direct benefits comprise the economic incremental value of crop production, averaging Rp930,000 ($410) per ha per year at full development. The phase-in of full benefits is projected to take place over a five-year period in WNT and a ten-year period in ENT.

46. The economic internal rates of returns (EIRRs) were computed directly for sample projects. The largest portion of the investment, the Pengga-related schemes in WNT, had a return slightly lower than the appraisal estimate, artly because of cost increases. The largest variance from appraisal is at Kambaniru in ENT where the EIRR is estimated at 5 percent compared with 12.7 percent at appraisal (see Table 5). The subproject experienced cost increases and delays in completion. The cost for Kambaniru was $8.980 per ha, significantly above the Project average.

Table 5: Subproject Economic Internal Rates of Returns (EIRRs) Subproject DCC Final! Direct Component Original Construction % of Contractc Cost! ha EIRRd (%) Area Irrigation Scheme DCCb (%) (S/ha) AR PCR A. WNT 69.3 130.4% 1589 14.5 12.9 Pengga (South Lombok) Related 67.9 131.0% 1,635 14.0 12.8 Other Small Schemes (Lombok) 1. Ireng Daya 0.3 108.6 982 16.7 16.2 2. Mamben 0.4 0.0 917 16.7 18.1 B. ENT 30.7 124.0 2,049 15.6 9.6 1. Lembor 7.2 115.6 1,249 16.2 16.7 2. Melolo 1.8 142.3 2,000 14.4 10.0 3. Kambaniru 14.2 131.1 8.960 12.7 5.0 4. Ponu 0.3 0.0 563 19.5 20.4 5. Mataiyang 0.7 122.7 464 16.0 16.2 C. West and East Nusa Tenggara 100.0 128.3 1,707 14.9 11 .9 See Appendix 17 for detailed methodology and assumptions. Individual schemes listed in this table were visited and EIRRs computed. Visited sites for the sample constitute 93% of the total project in terms of direct construction costs (DCC). Irrigation system DCC. Not including construction supervision, administration, and other associated costs. Irrigation consultants' final completion reports. AR - Appraisal Report, PCR - Project Completion Report.

47. The variance between AR and PCR estimates for other sample subprojects is not large. For the overall project rate of return, the appraisal estimated a 14.9 percent EIRR. The PCR shows i1 .9 percent, with WNT at 12.9 percent performing better than ENT at 9.8 percent. The returns in both provinces are significantly weighted by the high cost of Pengga dam and Kambaniru barrage. ENT carries the additional burden of the costs of the four earthquake- affected schemes on Flores without any benefits. When the supporting component costs are

14

apportioned to the irrigation schemes, the overall project EIRR drops to 10.3 percent. Details of the economic analysis are shown in Appendix 17.

C. Attainment of Benefits

48. With the completion of the Project, 33,236 ha was provided with rehabilitated irrigation works. In addition, a complementary program of institutional strengthening and training was completed.

49. Reported crop yields in the irrigation areas are at higher levels than those expected at appraisal. Future rice yields at full development are estimated at 5.2 t per ha for WNT and 4.5 t per ha for ENT. These levels are moderately higher than those projected at appraisal. Crop yields and cropping intensities with and without the Project are shown in Table 6.

Table 6: Crop Yields and Cropping Intensities8 Yield (t/ha) AR PCR Crop / Location Without With Without With Rice WNT 3.5 5 3.6 5.2 Rice ENT 2.8 4.4 3.6 4.5 Soybean WNT 0.7 1.2 0.8 1.2 Maize WNT 0.9 3.4 2.3 3.5 Maize WNT and ENT 0.8 1.5 2.3 3.5

Cropping Intensity (%) WNT and ENT 153 194 186 248

a To more closely approximate the actual condition observed in the field. the PCR economic evaluation combines both rainfed and irrigated crops, as appropriate, and other crops widely cultivated.

50. In addition to increasing crop yields, improved irrigation extended dry season cropping. The future with-project cropping intensity is projected at 248 percent compared with the future without project cropping intensity of 186 percent. Both are slightly higher than those reported at appraisal, with the gain now at 60 percent compared with the appraisal estimates of 40 percent. The combined effect of higher yields and extended cropping area is projected to increase annual production of rice by 125,000 t and that of secondary crops by 38,000 t at full development.

IV. CONCLUSIONS AND RECOMMENDATIONS

A. Conclusions

51. The Bank had adopted an appropriate strategy in supporting integrated irrigation development in two of the poorest provinces in Indonesia, both of which have extremely water- deficit areas where irrigation is essential for crop production. The Project fully supported the Government's aim to improve economic conditions in disadvantaged regions in eastern Indonesia. 15

52. The Project has an overall rating of generally satisfactory based on an assessment of completion of facilities, functionality of the systems, costs, EIRRs, and positive impact on the livelihood of farmers. The increase in crop yields and cropping intensities were higher than the appraisal targets even though the agricultural component had performed poorly. Farmers are self-motivated and generally knowledgeable about the cultivation of rice and non-rice crops without the need for intensive extension services. The Project provided a secure water supply for agriculture as well as for domestic purposes. The EIRR for the sample schemes ranged from 5.0 to 20.4 percent, with an average of 11.9 percent for the total Project compared with 14.9 percent at appraisal. The financial return for farmers is expected to increase annual disposable income (household income minus essential expenses) per family from previously subsistence levels. The Project has increased annual incomes from farming by about Rp430,000 ($185) to Rp980,000 ($422), or about 250 percent of previous income.

53. The Project was successful in improving the land taxation system that has increased the general revenues of the two provinces, strengthened the provincial development planning agencies so as to aid them in planning and managing the various activities in the provinces and districts, and improved the capability of the irrigation and agricultural services and water users associations (WUAs) through human resources development/training programs and provision of equipment and materials.

54. The Project was successful in the introduction of EOM in 48,132 ha, or 149 percent of the appraisal target. Unfortunately, most of the EOM work financed by the Bank had been determined by the irrigation staff rather than by a joint walk-through with WUAs. As a result a larger proportion of EOM funds was used for canal lining rather than for structures, embankment repairs, or drainage that could have been identified by the farmers.

55. In general, the quality of construction of the irrigation works on the main systems is good. The quality of work on the Pengga dam and on Kambaniru barrage is considered excellent and provides a good example of the quality of workmanship attainable with good management and supervision.

56. The WOO successfully demonstrated that computer modeling is essential for proper management and control of water in southern Lombok. The western part of Lombok has excess water, whereas the central and eastern parts of Lombok are water-deficit areas. PWRS should incorporate the results of the WOO into the local government's decision making to improve water management.

57. The Project concept was better understood and easier to implement in WNT. All WNT irrigation schemes were on the island of Lombok, which is accessible, and were relatively less expensive to construct because the supplies and materials were available at the sites or in nearby Java, In ENT, the remote locations of the irrigation schemes made all aspects of the project cycle difficult. Nevertheless, the farmers on Rote and Sumba are perhaps the most enthusiastic and deserving of irrigation systems. On both these small islands, water availability in the rivers is high even during the dry season, but will require substantial investment to deliver the excess water to irrigable areas.

58. The agriculture development component was generally unsuccessful as it failed to have much impact primarily because the provincial agencies did not provide adequate funding or support for the activities and many of the physical facilities, particularly in ENT, are non-functional 16

and sorely need repair. The inclusion of agriculture subcomponents in irrigation projects needs to be reviewed by the Bank and the Government as the investments made in the past are nonsustainable.

59. The introduction of 1SF is considered partially successful. The area covered represents only 76 percent of the appraisal target. The collection for the provinces from 1994 to 1995 shows a relatively high rate of about 75 percent in WNT and 69-42 percent in ENT. The 1996 collections were less as a result of lower collection rates at newly introduced subprojects. Collections are expected to increase because of the improved willingness of the farmers to participate in the program in central Lombok where water supplies are now sufficient.

60. With respect to improving seed production, there appears to be a severe shortage of staff, skills, and laboratory equipment to utilize the facilities at this time. In east Sumba, the agriculture office expressed difficulty in engaging qualified staff to operate the Main Seed Farm (MSF) facility. Currently, the facility is occupied by personnel working on honorarium (extremely limited funds), so that farming becomes their main activity. Challenges include (i) limited staff; (ii) limited farmer appreciation of the value of high-quality seed, with consequent low demand; (iii) the wide geographic spread of ENT; (iv) difficult access and limited communication affecting SCCS ability in seed certification and labeling; and (v) limited budgets and facilities for production and distribution of seed at the central and main seed farms. Farmers generally do not view seeds, or other inputs, as a constraint to production They stated that inputs could be obtained through the agricultural cooperative system or private distributors, although some planning, in terms of ordering in advance, is necessary.

B. Recommendations

1. Project-related

61. The Bank should continue to finance water resources investments in the water-deficit regions of eastern Indonesia. 1 In particular, the Bank should target the more remote areas on the islands of Rote, west Timor, and Sumba in ENT where farmers are active, own the land, and are interested in irrigated agriculture. In WNT, the Bank should review the possibility of additional water resources investments in southern Lombok. However, improper operations may limit delivery of water supplies and further expansion unless the diversions from west Lombok (wet area) to east Lombok (dry area) can be assured. Therefore, it is important that the WOC be incorporated in the decision-making process for operations. PWRS is currently having discussions with the local government to finalize allocations for the numerous schemes served from the HLD canal. As the irrigation schemes depend on sharing of water supplies from several rivers at 14 major diversion structures, it is imperative for the PWRS and the local government to use the services of the WOC. Because there are plans for expansion in southern Lombok, it will be essential to use the computer model for regulating diversion requirements. Feasibility studies financed by the Bank have demonstrated that sufficient water is available for the numerous schemes if crop diversification is introduced.

The Bank wilt finance TA 2580-INO: Integrated River Basin Development in ENT and Maluku beginning in 1997 and is presently preparing feasibility studies and final designs for two dams in WNT under the Bank- financed Loan 1 296-INO: Second Integrated Irrigation Sector Project (lISP-li), for $100.0 million, approved on 20 January 1994. 17

62. The PCM has requested PWRS to immediately repair damaged Project facilities on the irrigation schemes. Some of the major repairs required are in DI. Melolo, east Sumba, where about 172 ha at the end of the system is not served because of a 20-meter breach in the main canal. Other systems in ENT that need immediate repair include Haekto, Kakaha, Kambaniru distribution, Kanta-1, and Wae Rahu canals in Lembor. In addition, PWRS was requested to enter the completed schemes into the EOM program as soon as possible. The Bank will continue to monitor the overall program, including funding arrangements made by the Government in the future.

63. PWRS-ENT should evaluate the potential of transbasin diversions and extension of the service area at the Kambaniru scheme because the base flow during the peak dry season is high. Several areas downstream of the Kambaniru scheme could be served if water could be delivered at an economically viable cost. PWRS should prepare a study on alternative schemes for DGWRDto consider.

64. PWRS and the local government in WNT and ENT should take immediate action to establish the appropriate number of WUAs in all of the completed schemes (about 75 ha each) and to legalize them in accordance with the procedures under Loan No. 1296-INO: Second Irrigation Sector Project (lISP-Il). PWRS and the local government should also take immediate action to hand over all the small irrigation schemes to the WUAs.

65. An intensified agricultural program is needed in new irrigation areas, especially in ENT. Officials and participants repeatedly told the Project Completion Mission (PCM) that the program was too short-lived to have a sustained impact. Many of the appropriate agricultural packages, such as synchronized cropping pattern to disrupt pest infestation, can take years to establish in new irrigation areas. Moreover, the success of any agricultural component is often constrained by delays in irrigation works.

66. The concept of the TDU needs to be reviewed by the Bank and the Government as most of the facilities are nonfunctional and need repair. The training and research equipment and materials for TDUs in ENT were supplied and delivered to the PRAS, but have remained in warehouses and have not reached the TDUs. Without this equipment and materials, TDUs cannot be expected to promote improved agriculture extension services.

67. PRAS in ENT and WNT should immediately deliver the training equipment and materials to the TDUs and seed production facilities if those facilities are to function as planned. In addition, the PRAS in ENT should recondition the agroclimatic stations and repair or replace the lost or damaged observation equipment as soon as possible to make them operational. Permanent observers should be assigned to the four stations.

68. The Ministry of Forestry should review the upper watershed needs in WNT and ENT as many of them are highly degraded. A critical watershed project is appropriate to give priority rather than trying to incorporate it as a minor component in an irrigation project.

69. DGWRD and DGPARA should take immediate action to address all of the 1987 O&M policies in ENT and WNT as there seems to be a general lack of understanding by the provincial agencies of their responsibilities as well as lack of enthusiasm from the provincial staff particularly for 1SF, EOM, and small irrigation schemes programs in ENT. 18

70. The Project Performance Audit Report (PPAR) should be carried out at the end of 1999.

2. General

71. The Government and the Bank should review the relativity of agricultural support in irrigation projects. Previous experience suggests that the Bank needs to clearly identify and select more appropriate subcomponents. Although most of the agriculture-related physical facilities have been constructed, they are generally nonoperational and nonsustainable, and often have limited use even during implementation. The investments do not provide a realistic means to improve agriculture extension services or increase crop production. The Government should determine better ways to strengthen agriculture extension services.

72. The PCM suggests that agriculture programs be implemented when irrigation works are about to be completed rather than attempt a fully integrated approach. Key agricultural support facilities, such as seed centers, should be centrally located and accessible. Where water is the limiting factor, the Bank should continue assistance to diversified cropping.

73. Farmer participation needs to be fully incorporated into all phases of the project cycle. Farming is a business, whether for subsistence or profit, and participation is essential for sustainable irrigation operations. Water theft and farmer modification of canal structures are often the result of nonparticipation.

74. The Government should review the water user training program given the relatively poor performance and rate of progress exhibited in WUA development to date. The reassessment should decide whether or not the irrigation services agencies are the most appropriate agencies to be involved in on-farm activities or whether the agricultural services agencies, which deal with farmers on a regular/routine basis, should be given the overall mandate.

75. If upper watershed programs are included in irrigation projects, they need to be strengthened to assure that the interventions are appropriate and effective in controlling soil erosion. However, previous experience has shown that the soil conservation interventions could be more effectively addressed if they were carried out under a stand-alone critical watersheds project district-wide, where it will receive adequate attention. 19

APPENDIXES

Number Title Page

1 Rehabilitation and Upgrading Subprojects 20

2 Efficient Operation and Maintenance Subprojects 21

3 Water User Associations (WUAs) 22

4 Small Irrigation Schemes 23

5 Institutional Strengthening of Provincial Water Resources Services (PWRS) 24 and Water User Associations (WUAs)

6 Status of 1987 Operation and Maintenance (O&M) Policies 25

7 Irrigation Service Fee (1SF) 26

8 Land Development 28

9 Tertiary Demonstration Units (TDU) and Agroclimatic Stations 29

10 Improvement of Seed Production 30

11 Institutional Strengthening of the Provincial Agricultural Services 31

12 Soil and Water Conservation Areas 32

13 Project Cost and Financing 33

14 Implementation Schedule 36

15 Status of Compliance with Loan Covenants 38

16 Annual Disbursement Schedule by Category 40

17 Economic Analysis 41

20 Appendix 1

REHABILITATION AND UPGRADING SUBPROJECTS

Appraisal Area As-built Name of Subproject District (ha) Area (ha)

A. West Nusa Tenggara West Lombok 4,150 4,149 1. Pengga West Lombok 1,210 1,270 2. Parung Central Lombok 3 500 3,500 3. Jurang Batu Tibunangka Central Lombok 2,270 2,285 4. Renggung Central Lombok 1,200 1,260 5. Central Lombok 4,650 4,530 6. Mujur I & II Katon Central Lombok 2,960 1,886 7. 8. Rutus Central Lombok 1,400 1,453

Kulema Central Lombok 0 1,135 9. 10. Pawang Kates West Lombok 280 339

11. Ireng Daya West Lombok 320 278

Datar West Lombok 590 634 12. 13. Mamben East Lombok 400 346

Subtotal 22,930 23,065

B. East Nusa Tenggara 1. Lembor Manggarai 6,000 4,487 2.WaeBobo Manggarai 150 125 3. Wae Cess Ill Manggarai 502 502 4. Kajum Bawa Ngada 40 49 5. Maa Bawa Ngada 50 29 6. Mautenda lVb Ende 413 0 7. Magepandab Sikka 803 0 8. Prudab Skka 220 0 9. Kolesiab Sikka 127 0 10. Melolo Sumba Timur 698 698 11. Mataiyang Sumba Timur 1,173 1,216 12. Kakaha Sumba Timur 509 509 13. Kambaniru SumbaTimur 1,680 1,240 14. Koritepe Sumba Timur 243 359 15. Ponu 1.1. Utara 323 381 16. Haekto T.T. Utara 400 388 17. Loli T.T. Selatan 37 37 18. Oeloan T.T. Utara 202 76 19. Peto Kupang 70 75 Subtotal 13,740 10,171 Grand Total 36,670 33,236 aAdditiona subproject. b Damaged by earthquake in December 1992.

21 Appendix 2

EFFICIENT OPERA11ON AND MAINTENANCE SUBPROJECT (Year Entered Program and Attocatlon Of Funds)

EOM 1989190 1910191 1991192 1992/93 1993194 1994/95 199519€ Name of Subpro)ect Dlstflct As Bultt Program GOt GOt (30!) GOt) 001/ 001/ 001/ (ha) (ha) - . ADE ADB AOB ADB ADS (9) (9) (9) ($1 CS) (5) (5) WEST NUSA TENGGARA PROVINCE A. R&U Schemes Pengga West Lonlbok 4149 - - . - . 2 Parung Central Lonbok 1270 1270 26510 5.788 - 0 23155 3 Jurang Batu Central Lombok 3500 . . - - 4 Ttbunangka Central Lombok 2285 2285 44.055 0 5 Renggung Central Lombok 1260 1200 30.026 87,537 6 Mutur lAIr Central Lombok 4530 4500 29.632 44441 7 Katon Central Lombok 1886 1886 0

8 Rulus Central Lombok 1453 1453 44.578

9 Kulern Central Lombok 1135 1135 43.426 0

B. Existing Schemes (constructed by others) 10 Jurang Sate Hulu Central Lombok 4476 4476 46.674 31,116

Ii. Jurang Sate H/jr Central Lombok 6551 6551 0 20.963 57269 74,523 174 .298r 83.653 85.904 49.662 12 Botuai Central Lombok 3064 3064 - 12.155 28800 33,671 64 184 46.622 40.201 22,471

19.853 28480 15.853 7.120 13 Kalimantong West Lonlbotc 1500 1500 5.863 13.014 26,620 38.788 23.453 19.520 21.527 9691 14 Katua Sakolo, Rahatoyu West Sumbawa 2036 2036 7 976 14,844 27.187 31,904 21.265 6.934 15 Baka WestSun,bawa 1689 1689 6,356 11,766 26440 32.084 25434 17.644 13.814 8.021 16 Gebong Datar West Lombok 2774 2774 0 7.150 20,655 20 147 33.488 37.239 41 009 26,808 17 La)U. Sambana West Suntbawa 1050 1050 5768 11.547 18782 23.070 12.289 15,870 18 Parade Central Lombok 1040 1040 ______22.746 ______Subtotal (IM-4T) 45,648 37,909 271 .970 422.988 485.205 839.391 158.305

EAST NUSA TENGGARA PROVINCE A. R1.0 Schemes 1 lei'nbor Manggarai 4.487 3.893 0 19.573 85.887 154 709 2 Wee Cess II Manggarai 502 502 11 066 0 3 Magepanida Spkka 803 803 0 2,141 18.140 8.563 4 Me/ole East Sumba 698 548 0 16,542 16 752 74 166 5 Mataiyang East Sumba 1216 1216 0 16,266 28 152 65.062 6 Kakaha East Sumba 509 509 71 034 264 137 7 Kainbannu East Sumba 1240 - . ------

B. Existing Schemes (constructed by others) 8 Petawang East Sumba 551 551 0 7 670 13.224 30680 9 Wanga East Sumba 583 580 0 8 139 14.052 32558 10 Waikelo sawah East Sumba 913 913 0 12470 21.912 49880 11 Tanah Raing East Sumba 706 706 0 9,805 ______10.944 39.220 Subtotal lENT) -. 12.208 10.224 11.066 209.063 882.615 Total C.M4T&ENT) 57856 48.133 507337 1.257.517 1.923.535 Appraisal (WNT&ENT) 35,670

GOl - Govemmenl of Indonesia, ADB-AsI4n Development bank Includes Jurarig Sale Hulu Damaged in 1992 earthquake Rehabilitated under Bank-tnanced Loan 1241(SF)-INO Flores Emergency Reconstruction Project for SDR18.428,000 approved on 1 July 1993

WATER USER ASSOCIATION? (WUAs)

WNT ENT WUAs District Court WIJA Water User Associations ADIART Legal Registration Training Estimated Existtng District Court WUA No. Irrigation Scheme no. no. No Yes Need no. Farmers Legal Registration Training 1. Pengga 21 16 20 1 No. Irrigation Scheme no. no. 2. Jurang Batu 19 10 12 7 1. Kajum Bawa & Mae Bawa 2 1 35 not yet yes 3. Jurang Sate Hulti 34 0 24 10 2 Wae Cess ill & Wee Bobo 2 1 175 not yet yes 4, Jurang Sate Hilir 29 0 17 12 3. Koritepe 3 1 150 not yet yes 5 Parung 12 7 4 8 4 Lombur-Wae Cewo 3 1 200 not yet yes 6 Renggung 10 6 6 4 5 Lembor - Wae Kanta 1&2 4 2 425 not yet yes 7 Mujurl 3 2 1 2 6. Lembur 2 1 220 not yet yes 8 Mujurll 17 9 15 2 7. Lembor - Wae Sele 2 1 300 not yet yes 9.Parado 8 0 8 0 8. Mautenda IV 2 1 206 not yet yes 10 Ruius 8 4 2 6 9. Kolesia 1 1 63 not yet yes 11 Tibunangka 4 4 2 2 10 Melolo 3 1 349 not yet yes 12.Kulem 5 1 5 0 11 Oeloan 1 1 35 not yet yes 13 Katon 6 5 3 3 12 Haekto 2 I 266 not yet yes 14 Ireng Daya 1 0 0 1 13 Lot 1 1 24 not yet yes 15. PawangKates 1 0 1 0 14 Peto 1 1 30 not yet yes 16.Mamben 1 1 1 0 15 Kambaniru 6 5 750 not yet yes 17 Datar 6 0 3 3 16. Magepanda 4 I 553 not yet yes Total 185 65 124 61 17 Pruda 3 1 90 not yet yes Source WNT PWRS. PCM. 1996 18. Ponu 3 1 215 not yet yes 19. Kakaha 3 1 339 not yet yes 20. Mataiyang 4 1 586 not yet yes Total 52 25 6011 0 25 Source PWRS. ENT, 11/96

All of the WIJAs that are formally registered are considered by the Provincial Water Resources Services (PWRS) to be functional although all have various weaknesses in particular management and administration skills. PWRS and Provincial Agriculture Services (PRAS) will address the needs of the WIJAs through ongoing provincial programs. Constitution and By-laws/Anggaran Dasar/Anggaran Rumah Tengqa

V V CD 0 >( ()

23 Appendix 4

SMALL IRRIGATION SCHEMES

As-built WUAs Year Training Date of Subproject Area (ha) (no.) Legalized Receiveda Hand-over

A. West Nusa Tenggara 1. Pawang Kates 339 - PTGA 1992 2 Ireng Daya 278 - PTGA 1991 3. Mamben 346 1996 PTGA 1992 Subtotal 963

B. East Nusa Tenggara 1.WaeBobo 125 1 1993 PTGA 1995 2. Kajum Bawa 49 1 1993 PTGA 1995 3. Maa Bawa 29 1 1993 PTGA 1995 4. Mautenda lVb 0 1 1995 PTGA 5. Prudab 0 1 1995 PTGA 6 Kolesa' 0 1 1993 PTGA 7. Koritepe 359 1 - PTGA 1995 8. Ponu 381 1 1994 PTGA 1995 9. Haektoc 388 1 1994 PTGA 10. Lou 37 1 1994 PTGA 1995 11. Oeloan 76 1 1994 PTGA 1995 12. Peto 75 1 1994 PTGA 1995 Subtotal 1,519 Total 2,482 Appraisal Target 4,290 a PTGA - Water User Training Program.

Damaged by 1992 earthquake.

Damaged by flood. 24 Appendix 5

INSTITUTIONAL STRENGTHENING OF PROVINCIAL WATER RESOURCES SERVICES (PWRS) AND WATER USER ASSOCIATIONS (WUAs)

I. Training Group Type of Traininga Trainees (no.) A. WNT 1. Irrigation Services 2-14 days course! 494 On-the-job training 2. WUAs Workshop/In-field demo 2,390

B.ENT 1. Irrigation Services 98 2. WUAs 3,680 C. Total WNT/ENT 1 Government 592 2.WUAs - 6,070

II. Staff Increases Start of Project - 1989 Completion of Project % Change A. WNT 1. Engineers 133 94 2. Non-Engineers 243 Subtotal 309 337 B. ENT 1. Engineers 33 110 2. Non-Engineers 44 i.4 Subtotal 77 256 232 C. WNT/ENT 1. Engineers 166 204 23 2. Non-Engineers 2ZQ 0. Total WNT/ENT 386 593 54 a Training courses include A. Provincial Water Resources Services 1. Planning and Design 2. Construction Supervision 3 Training of inspectors 4. lrngatIon Operation and Maintenance (O&M) 5 Water Operation Center (WOC) in WNT

B. Water User Associations and Irrigation Committees 1. Water Management 2. Training of Instructors 3. O&M of Action Groups Provincial Officials (Group Al) District Level Officials (Group A2) Subdistrict Level Offcials (Group Bi) Village Officials, PPL, Juru, Women Representatives (Group B2) Water User Leaders and Key Farmers (Group C) Follow-up Activities by Bl ,B2, and C Groups (KTL) Establishment of WUAs (PP. P3A)

25 Appendix 6

STATUS OF 1987 OPERATION AND MAINTENANCE (O&M) POLICIES

Target as of Actual as of Policy No. 31 Dec 1995 31 Dec 1995 1 O&M based on Actual Needs Both Provinces Seldom achieved as provinces are provided a fixed annual budget for O&M based on the area of coverage.

32,380Effective O&M ha 48,132 ha (149%)

Small Irrigation Schemes (P1K) 3,187 ha 2,094 ha (66%)

2. Land and Building Tax (PBB) 210,000 ha 304.580 ha (145%)

3. Irrigation Service Fee (1SF) 32,380 ha 24,739 ha (76%)

4. Institutional Strengthening Both Provinces Ongoing activity. Training and the provision of equipment and materials. WUAs trained under Water User Training Program. Many needs to be established and legalized. WUAs are willing to pay 1SF if service is provided.

5. Improved System for Both Provinces Ongoing. No apparent improvement as Budgeting and Programming the provinces are provided with a fixed for O&M O&M budget and farmers are paying a fixed amount for 1SF (Rp16,000-1 8,000/ha) per year and the funds are deposfted directly into the district treasury. In 1997, the Central Government will give block grants of Rp 35,000/ha to the provinces.

6. Rationalization of Irrigation Both Provinces Rehabilitation and upgrading of existing Investments schemes, turnover of small schemes, and improvement of water management on a river basin concept. Nationwide Target as of Activity 31 Dec 1995 Actual as of 31 Dec 1995 (ha) (ha)

1. EOM 2,258,343 2.014.168 2. PBB na na 3. 1SF 879,236 370,960 4. P1K 606,902 236,631 na - not available. Source DGWRD

IRRIGATION SERVICE FEE (1SF) Table 1: Irrigation Service Fee (1SF) Collection

Name Area (ha) FY 1993/94 Collected in 1994 FY 1994/95 Collected in 1995 FY 1995/96 Collected in 1996 of Subproject Appraisal Gross! ISFa Target° Collection ¼ Targetb Collection ¼ Targetb Collectionc % Irrigated (Rp) (Rp) Collection (Rp) (Rp) Collection (Rp) (Rp) Collection

A. West Nusa Tenggara WsitgrnbJ _L543 .._229 36,784.000 16.582,74.9 2Z04 8.795.559 Gebong 1,940 1,802 28,832,000 13,879,669 48 14,417,288 6,827,009 47 Datar 603 497 7,952,000 2,703,080 34 7,957,760 1,968,550 25

8t.932.20015.694 - 10,784 7.673.195 65,993.315 73.367.429 161 154J95 65.137.569 Central Lombok 3,330 2,334 37,230,480 30.297,145 81 35,443,960 36,115,947 102 35,012,730 25,080,200 72 Batujai Jurang Sate Hulu 4,096 3,095 50,442,715 35,696,170 71 46,488,240 37,251,482 80 46,423,440 23.320,174 50 Jurang Sate Hilir 6,551 4,256 63,839,475 15,263,695 24 Renggung 1,717 1,099 16,478,550 1,473,500 9

Total in 1994 5,429 87,673,1 95 65,993,315 75 Total in 1995 7,728 118,716,200 89,950,178 76 Total in 1996 13,083 184,129,243 73,933,128 40 Total Province 21,930 18,237 13,083

B. East Nusa Tenggara 0) 40,153,S60Lembor 6.000 2,422 32,.84QZ96 22..904d9.4 .35,822O4QjZ,457,317 7,603,047 Lembor I 1385 27,685,457 19,901,413 72 27,150,480 15,544,607 57 30469,320 6,147,193 20 Wae Lombur 269 895,895 684,131 76 933,000 587,700 63 1,182,840 287,700 24 Wae Sele 365 4,007,880 125,100 3 3,772,800 450,500 12 Wae Cewo 403 4,258,944 2,318,650 54 3,730,680 1,199,910 32 4728,600 717,654 15 Wae Cess Ill 502 296 1,060,594 554,195 52 6,002,302 60,000 1 3,001,151 0

Total in 1994 2,353 33,900,890 23,458,389 69 Total in 1995 and 1996 2,718 41,824,342 17,517,317 42 43,154,711 7,603,047 18 Total Province 10,450 6,502 2,718 >

CD

Grand Total 32,380 24,739 15,801 0 >( a Planted/Harvested area. b Derived from 1SF contribution times planted/harvested area. Co Covers target and collection up to the time or Project Completion Mission which is for one harvest only. The targets and collection in FY1993/94 and 1Y1994/95 are for two harvests CD

Table 2: Operation and Maintenance of Selected Subprojects

______FY 1994/1995 FY 1995/1996. Name of Irrigated O&Ma ISFb Local O&Ma ISFb Local Subproject Area (ha) Requirement Collection Govt. Source Shortage - Requirement Collection Govt. Source Shortage (Rp) (Rp) (Rp) Rp (Rp) (Rp) (Rp) Rp

WNT

West Lombok 2,543 127,1 50,Q00 1 6,582,749 52,845,278 57,721973 45 Gebong 1,940 97,000,000 13,879,669 40,313,341 42,806,990 Datar 603 30,150,000 2,703,080 12,531937 14,914,983

Central Lombok i,426 37iL3OQ,000 65993i5 305,306,685 82 37 t300000 73,367,429 52,845278 245,087,293 66 Batujai 3,330 166,500,000 30,297,145 - 136,202,855 166,500,000 36,115,947 40,313,341 90,070,712 Jurang Sate Hut 4,096 204,800,000 35,696,170 - 169,103,830 204,800,000 37,251482 12,531,937 155,016,581

ENT Lembor 5,000 C 200,000,000 22,904,149 30,000,000 147,095,851 74 250,000,000 17,457,317 67OO000 165,542,683 66 Wae Cess III 502 30,000,000 554.195 10,000,000 19,445,805 65 40,000,000 60,000 15,000,000 24,940,000 62

NJ Average about Rp50,000fha b Collected under previous fiscal year. As built rounded up.

CD

Q. ><

0

(D CD NJ 28 Appendix 8

LAND DEVELOPMENT a

Location District Area (ha) I. Directorate General of Food Crops and Horticulture

A. West Nusa Tenggara 1. Pengga West Lombok 137

B. East Nusa Tenggara 1. Wae Lombur Manggarai 74 2. Wae Sele Manggarai 72 3. Wae Cess lit Manggarai 31 4. Mautenda IV Ende 532 5. Magepanda Sikka 280 6. Melolo Sumba Timur 400 7. Haekto Timor Timur Utara 48 8. Ponu Timor Timur Utara 54 9. Pruda Sikka 170 10. Mataiyang Sumba Timur 46 11.Kakaha SumbaTimur 137 12. Lou Timor Timur Selatan 79 13. Koritepe Sumba Barat 190 Subtotal 2,119 Total 2,256

II. Directorate General of Water Resources Development

A. West Nusa Tenggara 1.Pengga WestLombok 140

B. East Nusa Tenggara 1. Lembor Kanta 1 &2 Manggarai 294 2. Melolo Sumba Timur 186 3. Kambaniru Sumba Timur 1 240 4. Matalyang Sumba Timur 1 216 5. Koritepe Sumba Barat 140 Subtotal 3,076 Total 3,216 Grand Total 5,472 a Bank financed land development only under Directorate General of Food Crop and Horticulture 29 Appendix 9

TERTIARY DEMONSTRATION UNITS (TDU) AND AGROCLIMATIC STATIONS

Farmer Irrigation Village TDU Area WUAs Groups Farmers Agroclimatic Scheme (ha) (no.) (no.) (no.) Station A.WNT

1. Datar. W. Lombok TelagaWaru 160.50 2 3 250 -

2 Pengga. W. Lombok Jembatan Kembar 95.50 1 2 397 -

3. Mujur, C. Lombok Mujur 64 1 1 296 -

4. Parung, C. Lombok Pengadang 79.5 2 2 359 -

5. Renggung, C. Lombok Dasan Baru 42.5 1 1 287 -

6. Rutus, E. Lombok Suradadi 93.5 1 2 346 -

B. ENT

1. Lembor, Manggarai (Wae Kanta) Tangge 63 1 3 65 1

2. Mautenda IV, Ende Ranakolo 63 1 8 103 1

3. Kolesia, Sikka Magepanda 42 1 5 130 -

4. Peto, Kupang (Rote) Maubesi 70 1 2 70 1

5. Ponu, North Central Timor Ponu 49 1 6 197 -

6. Melolo, E. Sumba Mutunggeding 83 1 3 132 1

7. Koritepe, W. Sumba Wae Kerau 42 1 4 33 -

Total 947.5 15 42 2,665 4 Appendix 10

IMPROVEMENT OF SEED PRODUCTION a

Activity Facility Completed Constructed!Rehabilitated A. WNT

1. CSF Panirijauan, W. Lombok

Dormitory rehabilitation 600 m2 100 a. 170 m2 100 b. Office rehabilitation c. Seed store rehabilitation 254 m2 100

2. CSF Puyung, E. Lombok

a. Office rehabilitation 170 m2 100

b. Drying floor rehabilitation 500 m2 100

c. Fencing 400 m 100

3. MSF Pegondang, Lombok

a. Seed store rehabilitation 231 m2 100

b. Office rehabilitation 67 m2 100

c. Drying floor rehabilitation 400 m2 100

4. MSF Kumbung, Lombok

a. Seed store rehabilitation 305 m2 100

b. Drying floor rehabilitation 300 m2 100

B. ENT

SCCSITask Force X:

a. Rehabilitation of training room 150 m2 100 b. Rehabilitation of laboratory:

i. Province (Kupang) 90 m2 100

ii. Ende District 90 m2 40

iii. East Sumba District 90 m2 40 c. Fencing:

i. Province (Kupang) 425 ni 100

ii. East Sumba District 425 rn 40

2. MSF Lewa, East Sumba

a. Office rehabilitation 250 m2 100

b. Warehouse rehabilitation 300 m2 100

c. Drying floor rehabilitation 140 m2 100

d. Fencing 3,500 m 100

e. Chief house rehabilitation 70 m2 100

f. Staff house rehabilitation 50 m2 100

3. MSF Lembor, Manggarai a. Office rehabilitation 110 m2 100 b. Drying floor rehabilitation 240 m2 100 CSF- central Seed Farm MSF- Main Seed Farm a Rehabilitation of Seed Control and Certification Service (SCCS) Centers

31 Appendix 11

INSTITUTIONAL STRENGTHENING OF THE PROVINCIAL AGRICULTURAL SERVICES

Classes Trainees Trainee Training Type (no.) (no.) Type Place A. Local Training WNT Agricultural Training Methodology 1 30 officials On-Farm Water Management 7 150 officials and farmers Irrigated Crop Production 9 204 officials and farmers Seed Production 2 40 officials Balanced Fertilization 3 60 officials Managed Cropping Pattern 2 40 officials Pie-harvest and Postharvest Practices 2 40 officials Land Development 1 30 officials Computer 1 20 officials Project Management 1 10 officials Subtotal 29 624

ENT

Agricultural Training Methodology 1 30 officials

Seed Production 3 60 officials

Balanced Fertilization 7 180 officials

Managed Cropping Pattern 6 120 officials

Computer 20 officials

Land Development 30 officials

Agroclimatology 30 officials

Pre-harvest and Postharvest Practices 3 60 officials

On-farm Water Management 11 220 officials

Irrigated Crop Production 4 80 officials

Land Development 28 560 farmers

Irrigated Crop Production 3 60 farmers

Technical Training for TDU 7 140 officials

Organizational Training for TDU 7 140 officials

Water and Cropping Pattern Management 8 160 officials

Project Workshop 2 80 officials

Subtotal 93 1,970

Local Training Total 122 2,594

B. Overseas Training WNT

Irrigation Water Management 3 officials Thailand Planning of Extension and Agriculture Extension officials USA

Agroclimatology 2 officials Philippines

Paddy Land Formation 2 officials Thailand

Seed Processing Technology 2 officials Australia

Extension Communication 2 officials Australia Subtotal 11

ENT

Seed Processing Technology 2 officials Australia

Irrigation Water Management 3 officials Thailand Subtotal 5 Overseas Training Total 16

TDU - Tertiary Demonstration Unit

32 Appendix 12

SOIL AND WATER CONSERVATION AREAS

a Completed Works Agroforestry b1 Province! Appraisal Reforestationc Others District Subwatershed Target A D Total B C E F (ha) (ha) (ha) (ha) (ha) no. (km) no.

A. WNT 1. Central Lombok Sangkok-Babak 1,737 3,900 44 11 34 7

2. West Lombok Dodokan 1,045 1,300 16 9 28 8 Subtotal 7,000 2,782 5,200 7,982

B. ENT 1. South East Timor Fatoe 500 - 7 12 - - North East Timor Bonoe (Timor Island)

2. Ende Lowolake 200 - 3 (Flores Island)

3. E. Sumba Kambaneroe 800 230 6 (Sumba Island) ______Subtotal 3,000 1,500 230 1,730 Total . 10,000 4,282 5,430 9712 a A - Planting of fruit trees and firewood species. B - Guillies worth stone piling for control of water flow, C - Gully check dams constructed, D - Planting of forest tree species. E - Construction of forest road, F - Workshop for forest ranger (office/quarter). b In village areas. In forest areas.

33 Appendix 13, page 1

PROJECT COST AND FINANCING Table 1: Project Cost by Component (S 000)

Item Appraisal Actual Actual vs. ______Appraisal For.ign Local Total Foreign Local Total

A. Irrigation Development (DGWRD) 1 Civil Works 29 ji0 3.11 a Dam and Appurtenances 10.894 7,064 17.958 10.705 6,753 17458 b Rehabilitation and Upgrading 17,243 23,808 41 .051 22,147 31,509 53,655 c Building and Offices 462 699 1.161 459 677 1136 2 Equipment 1.673 337 2010 795 380 1 175 3 Consulting Services 2,562 2,854 5416 4065 5010 9075 4 Training 76 478 554 48 726 774 5 Survey and Investigation 0 132 132 0 0 0 6 Inoremental O&M Cost 0 1.260 1,260 0 1 498 1 498 7 Land Acquisition 0 2.985 2.985 0 5,687 5 687 8 Land Development 0 0 0 0 212 212 9PBME 0 0 0 0 54 54 10 Administralion 0 2,903 2.903 0 3,515 3,515 11. Contingencies 6.844 13,928 20,772 ______Total (A) 39754 56,448 96,202 38.219 56022 94.241 980

B. Irrigation Service Fee (DGPARA) 1 Equipment arid Materials 206 24 230 103 0 103 2 Consulting Services 168 70 238 406 300 706 3 Adminislration 0 19 19 24 24 4 Contingencies 64 32 96 ______Totat(B) 438 145 583 509 324 633 1429

C. Agricultural Development (DGFCH) 1 Civil Works 566 1,902 2 468 239 1 480 1,720 2 Equipment 688 157 1.045 981 78 1.059 3 Consulting Services 336 724 1,060 238 1.283 1.521 4 Training/Demonstrations 0 1.517 1.517 0 2,045 2,045 5. A&riinistration 0 244 244 0 211 211 6 Contingencies 317 1,651 1,968 ______Total (C) 2,107 6,195 8,302 1.468 5,097 6.555 790

0. Soil and Water Conservation (DGRLR) 8591 Civ,IWorks 4.049 4,908 657 2901 3,557 2 Equipment 275 52 327 334 27 361 3. Consulting Services 420 171 591 312 326 640 4. Training - 0 133 133 0 85 85 5 Administration 0 232 232 0 186 186 6 Contingencies 329 1,712 2,041 ______Total (D) 1,883 6.349 8,232 1.303 3,527 4.630 56.7

E. Land Tax Improvement (DGTax) 1 Survey arid Mapping 0 4,654 4,65.4 0 4,600 4,600 2. Equipment 282 31 313 764 0 764 3 Consulting Services 140 175 315 213 390 603 4 Training 0 38 38 0 45 45 05 Administration 0 213 213 120 120 6 Contingencies 103 1,957 2060 Total (6) 525 7068 7593 977 5155 6133 808

F. Strengthening of BAPPEDA (DGRD) 1 Civil Works (Office Buildings) 180 270 450 144 216 360 2. Equipment 244 101 345 272 10 283 3 Consulting Services 252 52 304 197 64 261 4 Training o 476 478 0 325 325 5. Administration 0 63 63 0 134 134 6 Contingencies 127 331 458 Total (F) 803 1.295 2098 613 749 1,362 649

G. Taxes and Duties 10,000 10,000 8.976 9.976 99 8

H. Interest and Service Charge During 15,600 15.600 15,644 15,544 100.3 Construction

I. RefinancingofTA 190 190 143 143 75.0

Total 61,300 87,500 144,800 58,866 80,849 139,715 93.9

DGVVRD-Directorate General of Water Resources Development, DGPARA-Direclorate General of Public Administration and Regional Autonomy DGFCH- Directorate General of Food Crops and Horticulture, DGRLR-Directorale General for Reforestation and Land Rehabilitation DGTax- Directorate General of Tax, DGRD-Directorate General of Regional Development TA.Teciln,cal Assistance

34 Appendix 13, page 2

Table 2: Project Cost by Province

West Nusa T.nggara East Nusa Ienggara ($00) ($000) tern Appraisal Actual Appraisa' Actual Foreign Local Total Foreign Local Tota Foreign Loca Tota Foreign Local Total

A rngation Development (DGWRD) 1 Civil Works Z1Z Zilti 429Q Zi2 P2 iQ.3 1L252 B,i1 , 22282 a Dam and Appurtenances 10.694 7.064 17,958 10.705 6 753 17.456 0 C' 0 0 0 0 b Rehabditatton and Upgrading 10.533 13.743 24,276 13.403 18,391 31,793 6710 10065 16775 8745 13.118 21,863 Building and OffIces 270 404 674 287 430 717 192 295 487 172 247 420 2 Equipment 956 160 1116 89 285 3 717 177 894 705 94 800 3 Consulting Services 2.030 1,924 3,954 2,917 2,909 5.82€ 532 93.3 1462 1147 2.101 3,249 4 Training 54 299 353 48 458 506 22 179 201 0 269 269 5 Survey and Investigation 0 9 9 0 0 C. 0 123 123 0 0 0 6. naement,aI OSM Cost 0 887 887 1115 1,115 0 373 373 0 384 384 7 Land Anguisition 0 2,843 2,843 5,198 5.198 0 142 142 0 490 490 8 Land Development 0 0 0 65 65 0 0 0 0 147 147 9. PBME 0 0 0 54 54 0 0 0 0 0 0 10 Administration 0 2.082 2.082 2,095 2,095 0 821 821 0 1.420 1,420 11 Contingencies 5.160 9,512 14.672 ______1684 4416 6 100 ______Total (A) 29,897 38.927 68,824 27,449 37.752 65.201 9,857 17521 27,378 10.770 18,270 29.040

B mgation Service Fee (DGPARAI 1 EquiprnentandMatenals 103 12 115 52 0 52 103 12 115 52 0 52 2 Consulting Services 126 47 173 305 201 508 42 23 65 102 98 200 3 Administration 0 12 12 15 15 0 7 7 0 9 9 4 Contingencies 40 21 61 ______24 11 35 ______Total (8) 269 92 361 356 216 573 169 53 222 153 107 260

C Agncultural Development IDGFCH) I Civil Works 138 313 451 58 244 302 428 1,589 2,017 181 1237 1.418 2. Equipment 352 79 431 389 39 428 536 78 614 592 39 631 3. Consulting Services 168 305 473 119 541 659 168 419 587 119 743 862 4. TrairvngfDemonstrations 0 657 657 885 885 0 860 860 0 1,159 1,159 5 Aoministration 0 81 81 70 70 0 163 163 0 141 141 6 Contingencies iio 517 627 ______207 1 134 1 341 ______Total (C) 768 1,952 2,720 566 1,779 2,345 1.339 4.243 5.582 892 3,318 4.210

D Soil and Water Conservation (DGRLR) 1 Civil Works 545 2,842 3,387 417 2,036 2.453 314 1,207 1.521 240 865 1.105 2. Equipment 179 20 199 218 10 228 96 32 128 117 17 133 3 Consulting Services 84 18 102 62 35 97 336 153 489 249 29.4 543 4 Irainlng 0 59 59 38 38 0 74 74 0 48 48 6 Admiriistrarjon ' 0 146 146 117 117 0 86 86 0 69 69 6 Contingencies 177 1,138 1,315 ______152 574 726 ______Total CD) 985 4.223 5.208 697 2236 2.932 898 2 126 3024 606 1.291 1 898

E Land Tax Improvement CDGT) 1 Survey and Mapping 0 4.005 4.005 3,958 3,958 0 649 6.49 0 641 641 2 Equtprntent 192 21 213 520 0 520 90 10 100 244 0 244 3 ConsultingServtces 112 136 248 170 303 474 28 39 67 43 87 130 4 Training o 23 23 27 27 0 15 15 0 18 18 5 Administration o 180 180 102 102 0 33 33 0 19 19 6. Contingencies 53 1.630 1.683 ______50 327 377 ______Total (E) 357 5,995 6.352 691 4.391 5,081 168 1 073 1.241 287 765 1.051

F Strmngtherang 01 BAPPEDA (QGRD) 1 Civil Works (Office Buildings) 0 0 0 11 17 28 180 270 450 133 199 331 2 Equipment o 0 0 57 0 57 244 101 3.45 216 10 226 3 Consulting Services 0 0 0 0 0 0 252 52 304 197 64 261 4 Training 0 0 0 209 209 0 478 478 0 117 117 5 Administration o 0 0 45 45 0 63 63 0 89 89 6 Contingencies a 0 0 ______127 331 458 ______Total (F) 0 0 0 58 270 338 803 1.295 2.098 545 479 1,024

G 'Taxes and Duties 6.585 6,585 6.739 6739 3415 3415 3.237 3,237

f-I Interest and Service Charge 10,400 10.400 10.430 10430 5.200 5.200 5,215 5,215 Dunng Constnjction

Refinancing oCTA 190 190 143 143

Total 42,676 57,774 100,450 40,256 53,383 93,638 18,624 28,726 48,350 13,396 32,682 46,077

DGWRD-Oirectorate General of Water Reoources Development, DGPARA-Directorate General of Public Administration and Regional Autonomy DGFCH- Directorate General of Food Crops and Horticulture, DGRLR-Directorate General tor Reforestation and Land Rehabilitation DGTax- Directorate General of Tax, DGRD-Direcforate General of Regional Development, TA-Technical Assistance

35 Appendix 13, page 3

Table 3: Actual Project Financing (S 000)

Government Item Total Cost B a ri Ic ADFOCR ______Total Foreign Local Total Foreign Local Total Foreign Local Total Foreign Local Taxes

A Irrigation Development (DGWRD) j,98 Q 2Z L225 t5.496 1 Civil Works ZZ2P 13853 i9 0 1.746 1.746 a Dam and Appurtenances 10705 8,498 19,204 9,645 6,033 15.678 1,061 719 1,780 8.273 5,366 13,639 o Rehabilitation and Upgrading 22.147 36.874 59,021 3,999 4,199 6,198 18 148 19.037 37,185 374 624 0 114 114 c Building sf0 Offices 459 791 1,250 209 304 513 250 380 1,175 0 117 117 2 Equipment 795 497 1,292 795 5,010 9.075 0 907 907 3 Consulting Services 4.065 5,918 9,982 4.065 726 774 0 0 0 4 Training 48 726 774 48 0 0 0 0 5 Survey and Investigation 0 0 0 0 969 530 150 680 6 incremental O&M Cost 0 1,648 1,648 969 0 5,687 0 5,687 7 LanO Acquisition 0 5,687 5,687 0 212 0 212 S LanD Development 0 212 212 54 54 0 5 5 9 PBME 0 59 59 . ______3,515 0 3,515 1 0 Aqmin,stration 0 3.515 3.515 0 18.218 8.405 26,623 Total (A) 38.219 64,427 102.646 13,853 10,536 24.389 24,366 27,268 51,634

B Irrigation Service Fe. (DGPARA) 103 0 10 10 1 Equipment and Materials 103 10 113 103 0 71 71 2 Consulting Services 406 370 776 406 300 706 24 0 24 3 AdminiStration 0 24 24 0 24 81 105 Total (B) 509 405 914 509 300 809

C Agncultural Development (DGFCH) 1. Civil Works 0 89 89 a Office buildings, TDUs, RECs 239 736 975 239 647 887 833 0 833 b. Land Development 0 833 833 0 106 106 2. Equipment 981 184 1,165 981 78 1.059 0 152 152 3. Consulting Services 238 1.435 1,673 238 1.283 1.521 0 0 4 Tratning/Demontrations 0 2,045 2.045 2,045 2,045 0 0 211 5 Administration 0 211 211 ______211 347 1,390 Total (C) 1,458 5,443 6,901 1.458 4,053 5,511 0 1,043

0 Soil and Water Conservation (DGRLR) 356 356 1. Civil Works 657 3,256 3,913 657 2.901 3,557 0 0 36 36 2. Equipment 334 63 397 334 27 361 64 64 3 Consulting Services 312 392 704 312 328 640 0 0 4 Training 0 . 85 85 85 85 0 0 186 5. Administration 0 186 186 186 0 456 642 Total (0) 1.303 3,983 5.286 1.303 3,341 4,644 0 186

E. Land Tax Improvement (DGTaX) 460 1 Survey and Mapping 0 5.060 5.060 4.600 4.600 0 460 76 2 Equ,oment 764 76 841 764 764 0 76 60 3 Consulting Services 213 451 664 213 390 603 0 60 4 Training 45 45 45 45 0 0 0 120 1205 Administration . 0 120 120 0 597 717 Total (E) 977 5,752 6,729 977 5.035 6.012 0 120

F. Strengthening of BAPPEDA (DGRD) 36 1 Civil Works (Office Buildings) 144 252 396 144 216 360 0 36 28 2 Equipment 272 39 311 272 10 283 0 28 26 3 Consulting Services 197 90 287 197 64 261 0 26 0 4 Training 0 325 325 325 325 0 0 134 5. Administration - 0 134 134 ______134 0 90 224 Total (F) 613 839 1,452 613 616 1,229 0 134

G Interest and Service Charge 15,644 0 15,644 944 944 14,700 14.700 During Construction

H Refinancing of TA 143 0 143 143 143

0 19,725 9,976 29,701 Total 58.866 80,849 139.715 14,940 10,536 25,476 43,926 40,613 84,539

21 Actual financing (percent) 18 61

20 Planned Financing (percent) 17 63

DGWRD-Directorate General of Water Resources Development, DGPARA-Directorate General of Public Administration and Regional Autonomy OGFCH Directorate General of Food Crops and Horticulture, DGRLR-Directorate General for Reforestation and Land Rehabilitation OGTax- Directorate General of Tax, DGRD-Directorate General of Regional Development, TA .Technical Assistance 36 Appendix 14, page 1

IMPLEMENTATION SCHEDULE WEST NUSA TENGGARA

Activity - Year 1f Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 1989/9011990/91 1991192 1992/93 1993/94 1994195 1995/96

1. Construction Pengga Dam & Appurtenances

2. Rehabilitation and Upgrading a. Pengga Irrigation Scheme

b. Keru and Sesaot Diversion

C. Jurang Sate Main Canal Remodelling

d. Jurang Batu Scheme

e Tibunangka and Rutus Schems

f. Parung Irrigation Scheme

g. Renggung lmgation Scheme

h. Mujur I & II

i. Katon Scheme

j. Pawang Kates. Ireng Daya, Datar and Mamben Schemes k. Tertiaries

3. Efficient Operation and Maintenance

4. Hand-over of Small Schemes to Water User Associations 5. Institutional Strengthening I Irrigation Service Fee (DGPARA)

Agricultural Development (DGFCH) 1. Land Development

2. Tertiary Demonstration Units

3. Improvement of Seed Production

4. institutional Strengthening

Soil and Water Conservation (DGRLR) 1. Inventory and Investigation

2. Implementation and Demonstration

Land Tax Improvement (DGT) 1. Survey and Mapping

2. Reclassification/Reassessment

I of Bappeda (DGRD) I I • Appraisal Actual Preparatory 37 Appendix 14, page 2

EAST NUSA TENGGARA

Appratsal Actual______Precaratory hiltli

38 Appendix 15, page 1

STATUS OF COMPLIANCE WITH LOAN COVENANTS

Reference to Loan Documents Special Covenant Status of Compliance Operations

Article IV DGWRD, DGPARA, DGFCH, DGRLR, Partially complied with. DGWRD Section 4.06 (b) DGT and DGRD to furnish audited accounts submitted accounts. not later than nine (9) months after each DGFCH, DGRLR, and DGT related fiscal year submitted the accounts in Bahasa Indonesian. Not complied with by DGPARA and DGRD.

Article IV DGWRD, DGPARA, DGFCH, DGRLR, DGT Partially complied with. Section 4.07 (b) and DGRD to furnish Quarterly Progress DGWRD and DGFCH submitted Reports. reports.

Article IV DGWRD, DGPARA, DGFCH, DGRLR, DGT DGFCH complied. Consultants Section 4.07 (C) and DGRD to furnish a Project Completion prepared completion reports for Report 3 months after completion of the DGWRD, DGFCH and DGRLR. Not Project. complied with by DGT, DGPARA, and DGRD.

Schedule 5 Establishment of a Project Guidance Unit Complied with. para. 3 within DGWRD, DGFCH and DGRLR within 3 months from loan effectivity.

Schedule 5 Coordination and monitoring of Project Partially complied with. BAPPENAS para. 4 Implementation by BAPPENAS at the did not hold regular meetings. National Level and BAPPEDA at the However, BAPPEDA held occasional provincial and district level on a quarterly coordination meetings at the basis. provincial level, usually during Loan Review Missions.

Schedule 5 Each concerned provincial agency to Complied with. para. 6 designate a Project Manager.

Schedule 5 Reassignment and/or recruitment of Partially complied with. para. 7 additional staff, as required, in each concerned provincial, district and subdistrict agency.

Schedule 5 Establishment of a Water Operation Center Complied with. However, WOC is para. 13 in West Nusa Tenggara PWRS 2 years from only semi-operational as results and effective date (May 1991). instructions are not used by field staff

Schedule 5 Introduction of 1SF in the Project Area. Complied with. para. 14

Schedule 5 Establishment of a Project Management Unit Complied with. para. 16 by the PRAS in each concerned province.

39 Appendix 15, page 2

Reference to Loan Documents Covenant Status of Compliance Special Operation

Schedule 5 Improve revenue performance of PBB Compiled with. para. 24 through introduction of revised PBB rates.

Schedule 5 Availability of credit for land development, as Not applicable. Credit scheme para. 29 required, at the start of each fiscal year. cancelled. GOI financed land development through DGWRD. Loan financed land development through DGFCH.

Schedule 5 Formulation of a comprehensive training Complied with. DGWRD, DGFCH, para. 31 program within one year of Loan effectivity DGRLR and DGRD prepared CTPs. i.e. May 1990.

Schedule 5 Introduction of efficient O&M (EOM) upon Partially complied with. para. 34 completion of irrigation schemes.

Schedule 5 Handing over of irrigation schemes with Partially complied with. para. 35 areas less than 500 ha to WUAs upon completion of irrigation-related civil works.

Schedule 5 Increase in level of O&M funding on all Partially complied with. para. 37 irrigation schemes where efficient O&M has been introduced.

Schedule 5 Simplify and rationalize procedures for Ongoing program. para. 39 funding irrigation O&M.

Schedule 5 Establishment of Action Groups by the Complied with, but not active. para. 40 PRAS by 30 June 1989.

Schedule 5 Establishment or reactivation of District Complied with. Function should be para. 42 Irrigation Committees prior to 31 March 89 reassessed by PWRS.

Schedule 5 Establishment of Special Account. Complied with. December 1990. para. 43

Schedule 5 Establishment of viable WUAs. Partially complied with. para. 44

Schedule 5 Establishment of a Project Monitoring and Complied with. para. 45 Evaluation Unit in each province.

Schedule 6 Provisional Impact evaluation study for Not complied with. para. 51(b) selected irrigation scheme prior to PCR report.

ANNUAL DISBURSEMENT SCHEDULE BY CATEGORY

Category FYl989190- FY1990191 FY1991/92 FY1992/93 FY1993194 FYI 994195 FY1995196 Total SDR $ SDR $ SOR S SOR $ SDR $ SDR $ Son $ SOR $

Asian Development Funds: Loan 952(SF)-INO

6t7,64801 CivilWorks(ParlA) 886,522 1.823.012 2,468,653 4,084,260 5,708,521 2,640,t92 3,701.898 607,409 888,890 132,588 198,405 9,905,169 13,852.889

02 Loc. Exp. Civil Works (Part A) 650.967 934.348 l,220,48t 1.653.566 2.708.264 3.786,828 t.89t,t92 2.652.008 917,430 1,338,381 113.345 170.134 7,501,879 10,535.863

03 Service Charge 13.492 18,383 55,769 79,158 124,773 176.772 175,002 251,652 278.186 418.372 647,222 944,337 04 Refinancing TA 111,557 142,590 0 0 111,557 142,590 05 Unallocated 0 0 0 0 99 Exch rate difference of Imprest Adv. 22,784 0 22.784 0 Total 952(SF).lNO 111,557 142,590 1,268,615 1.820.870 3,057,045 4,140.602 6,848,293 9.574.505 4.656,157 6,530,678 1,699,841 2,478,923 5.46,903 787,511 18,188,411 25,475,679

Ordinary CapItal Resources: Loan 953-tNO OIA Civil Wofks - Part A 714,989 2.018,515 9.68t .388 3.926.156 3,115,347 19.458,395 OtB Civ,lWorks-PartC 187,988 51,428 239.398 O1C Civil Works - Part 1) 35.005 5.11 2 259,275 357,378 656.770 010 CivilWorlrs-PartF 56,684 87,188 0 143,872 02A Equip. Vehicles & Mats. Part A 21.146 190,372 250,3t4 91,047 233,170 8,824 794 .873 02B Equip, Vehicles & Mats. Part B 11.401 52,370 29.348 10,028 103,147 02C Equip, Vehicles & Mats Part C 31.561 154 .659 142.657 384.956 261.043 980,876 020 Equip. Vehicles & Mats. Part D 39.856 129,049 145,443 20,001 334.349 02E Equip, Vehicles & Mats. Part E 2,772 129.384 133.354 498.894 764,404 02F Equip, Vehicles & Mats Part F 178.882 84,470 8.890 0 272,242 03A Consulting Services - Part A 86.863 839.386 739.402 837,912 503,499 722,963 334,615 4,064,640 036 Consulting Services- Part B 60.926 160.278 153600 31,201 406.005 03C Consulting Services - Part C 168,092 69,642 0 237,734 031) Consulting Services - Part 0 '67,151 138,298 106,420 0 311,867 03E Consulting Services - Part E t20,326 54 .592 37,849 0 212.767 03F Consulting Services - Part F 70.645 17 .093 109.134 0 196,872 0 04 Training - Part A 48,000 0 48,000 05A LC Erip - Civit Works (Part A) 758.980 2,119.440 10 .4 58,950 3.691.264 3.100.938 20,129,57 2 059 LC Exp - Civil Works (Part C) 508,211 139.045 647,256 OSC IC Fxp - Civil Works (Part C) 137,093 28.968 920,290 1,814,303 2,900.654 050 LC Exp - Civil Works (Part F) 85.026 130,782 0 21 5.808 05E IC Exp - Eqpt.. Materials (Part A) to, 130 25,788 84,175 2 59, 556 379,851 (1SF IC Exp - Eqpt. Materials (Pail C) 6.832 63.348 7,990 78.170 05G LC Exp - Eqpt Materials (Part D) 8.408 t6,29t 2,205 0 26,904 05H IC Eap - Eqpt., Materials (Part F) 10,397 0 10.397 (151 IC Fxp . Consulting Services (Part A) 87.408 1,2e3,598 919,653 953,165 723.911 673,286 369.218 5,010,239 OSJ LC Exp - Consulting Services (Part B) Il .205 78.896 186,842 16,803 299,546 05K IC Exp. - Consulting Services (Part C) 243.242 751 .029 180,4 57 108,578 1,283,306 OSL LC Esp. - Consulting Services (Part 0) 113.230 126.299 88.754 0 328,283 05M LC Exp. - Consulting Services (Part E) 273,579 101,025 15,844 0 390,448 05N LC Esp. - Consulting Services (Part F) 63.948 23,277 479 1.345 38.847 0 -o 050 LC Ixp. - Tmg & Demonstration (Pert A) 45,954 110,500 411.875 93.473 64 .552 726,354 (D OSP IC Esp - Tmg & Demonstration (Part C) 91.280 157,700 365.925 353.450 1,076.155 2.044.510 0 050 IC Exp - Tmg & Demonstration (Part 0) 27,268 29.058 29.046 85,372 OSR IC Exp - 1mg & Demonstration (Part E) 44.868 0 44.868 OSS IC Exp - 1mg & Demonstration (Part F) 16 .059 9.084 148,869 132,468 18.954 325 .434 0) OST IC Exp - Survey Invest. A Mop (Part A) 0 0 05U IC Exp. - Survey Invest. & Map (Part E) 326. 522 787 .60 1 3.311.412 174,342 4,599.877 05V IC Exp - Incremental 0 & M (Part A) 26.862 266.989 312. 77 1 362 .0 18 968.840 05W IC Exp - PBME Related Expense 3.302 50.443 53 .745 06 Inlerest During Construction 48175 225.938 686,194 1.163.234 1.927.074 3.499.667 7 149,718 14 700,000

Total 953-INO 222.446 4.234.654 3.456.949 9. 332 .678 27.351,446 20.504 798 19436220 114539,191 41 Appendix 17, page 1

ECONOMIC ANALYSIS

A. Attainment of Benefits

1 With the completion of the Project, an area of 33,236 ha in East Nusa Tenggara (ENT) and West Nusa Tenggara (WNT) has been provided with rehabilitated or new irrigation works. Both the quantity and efficiency of water supply in the irrigation areas have improved. Besides to better meeting crop water requirements, a more stable water supply translates into greater confidence on the part of the farmer, and a greater willingness to intensify cultivation practices.

2. Yield results in the irrigation areas have reportedly been higher than those expected in the appraisal report (AR). The Project agricultuial consultants and the Ministry of Agriculture consistently record average rice yields of up to 8 tons per hectare (t per ha) in the Tertiary Demonstration Units (TDU). The Project Completion Mission (PCM) allows that there may be some bias in TDU results toward more accessible areas and more progressive farmers.

3. The PCM estimated future rice yields at levels os 5.2 t per ha for WNT and 4.5 t per ha for ENT at full development. These levels are moderately higher than the 5 t and 4.4 t projected in the AR.

4. In addition to increasing crop yields, improved irrigation has extended the dry season cropping areas. This has been verified in both provinces during the PCM, which was conducted at the peak of the dry season. The PCM was repeatedly surprised to see the extent of areas cropped in the second dry season. Extensive interviews with field irrigation personnel, review of their historical cropping records, review of the provincial water balance studies, and irrigation area visits were contributing factors in evaluating cropping intensity. Future cropping intensity with the Project is projected as 248 percent compared with a without-Project cropping intensity of 186 percent. Both figures are higher than those reported in the appraisal, with the incremental gain now placed at 60 percent in PCM as opposed to the 40 percent at appraisal.

5. While the PCM incremental cropping intensity is slightly higher than that at appraisal, both the area cropped and the water balance studies indicate an even greater cropping intensity attainable. But for evaluation purposes, the PCM took a conservative approach to make allowances for social and operational factors. Both crop yields and cropping intensities should receive a close look during later reviews to assess if the higher levels are indeed possible and sustainable.

6. The PCM predicts that the combined effect of boosted yields and extended crop area will result in increased annual production of 125,000 t of rice and 38,000 t of secondary crops at full development.

B. Economic Analysis

7. Economic analysis was undertaken on a sample of subproject sites that were visited to verify conditions. In WNT, all components of the Pengga-related irrigation systems were visited as well as two of the four WNT small schemes, Mamben and Ireng Daya. This sample captured 99 percent of the construction costs in the province. 42 Appendix 17, page 2

8. Five irrigation projects in ENT including the Lembor schemes, Melolo, Mataiyang. Kambaniru, and Ponu were visited. This sample accounts for about 79 percent of the construction costs for ENT.

1. Project Costs

9. Direct construction costs (DCC) for the Project irrigation projects are shown in Table 1. The WNT and ENT components account for 69 and 31 percent of the irrigation construction costs. The construction costs for the irrigation schemes ranged from a low of $464 per ha to a high of $8,980 per ha, with an average of about $1,707 per ha. The increase from the original irrigation construction contracts to final contract costs was 28 percent, reflecting additional works and escalation (delay).

10. The Project financial costs have been converted to constant end-of-project, economic prices by (i) netting out taxes and interest payments, (ii) applying a 0.9 conversion factor to financial costs (except skilled services), and iii) bringing costs forward to a constant end-of- project price year (1995) by applying differential rates for local and foreign cost components. For the domestic cost component, the Biro Pusat Statistik (BPS) inflation index is employed, and for the foreign cost component, the IBRD MUV index is used. For currency conversions, an end-of-project exchange rate of Rp2,280=$1 is used.

11. The economic cost of the Project comprises the civil works, supervisory consulting services, land development, land acquisition, and administration costs. Much of the project performance is contingent upon future operation and maintenance (O&M). Current levels of O&M are reported to be about Rp20,000 per ha; Rp35,000-40,000 per ha is estimated by officials as the appropriate figure. Irrigation service fees (1SF) will help support these budget levels. For the economic analysis, Rp40,000 per ha was used.

12. Related to the assumption of realized O&M in the future, the projected life is 30 years for the rehabilitated and upgraded subprojects, and 40 years for the new works at Pengga and Kambaniru.

13. The Appraisal Report's economic analysis was undertaken by allocating supporting component base costs, adding 10 percent physical contingency, and multiplying this subtotal by 0.8 economic conversion factor (p. 49, Appraisal Report). To provide a comparable basis, the PCM economic analysis is also using a scenario for allocating components cost to the subprojects.

2. Benefit Stream

14. Only the direct benefit of the incremental value of agricultural production was used in the PCM economic analysis. There are numerous nonquantified benefits as well. Institutional strengthening of EAs and farmer groups is probably one of the main improvements that have occurred under the Project. Local domestic water supply has been enhanced. Secondary business support and activity are occurring as a result of intensification and production increases.

15. For the direct benefits, financial crop budgets were formulated for the irrigated areas using data and information provided by the Project consultants, the Project Monitoring and 43 Appendix 17, page 3

Evaluation (PME) offices at the Provincial Water Resources Services (PWRS), the Provincial Agriculture Services (PRAS), and the PCM field interviews with farmers. Financial crop budgets were converted to economic crop budgets. Commodity prices for tradable items are derived from international markets using the August 1996 IBRD commodity price data. A constant end- of-project 1995 price basis is used consistent with valuation of Project costs, while the commodity price year is 2005, to better match the flow of benefits during the projected life. Both paid and unpaid labor are valued in the economic crop budgets, but at levels of 80 percent the financial wage to account for unemployment and underemployment of labor in rural areas.

16. Individual commodities such as rice, maize, and groundnuts are valued at an average of import and export parity bases. Soybean is valued as an import substitute. Fertilizer urea is valued at export parity, while triple superphosphte and potassium chloride fertilizers are valued at import parity (see Table 2). For other inputs, financial market prices are assumed.

17. The economic value of crop production is derived from yields and areas cultivated in the future with and without the Project. The benefit stream attributable to the Project is the difference between the values in the future with- and without-Project scenarios, also accounting for any production loss caused by Project works (see Table 3).

18. The phase-in of full benefits is projected to take place over a five-year in WNT and a ten-year period in ENT. This was the assumption in the appraisal, and the field visits of the PCM support this. The exception is the irrigation schemes of Lembor in ENT (west Flores), where rainfall is abundant and a tradition of intensified rice culture exists. A five-year phase-in was used for this site.

19. In discussions with the WNT Water Operations Center personnel and field irrigation system operators, it was determined that the area directly benefiting from the Project irrigation improvements under the Pengga-related schemes in WNT is greater than just the rehabilitation and upgrading (R&U) subproject areas. Jurang Sate Hulu and Hilir, not included as rehabilitation and upgrading (R&U) subprojects, still benefit significantly from the increased flow and distribution efficiency from diversion canal improvements and the freeing of water for distribution by the construction of Pengga dam. The area and intensity improvements in Jurang Sate Hulu and Hilir have thus been included in the benefit analysis. The provincial irrigation service also identified a number of smaller schemes (Iwan, Racem, Taipetuk, Muncan, Gerintuk, Bilakere and Rutus P.26 C) benefiting from improvements to the diversion canals and proximity to larger beneficiary schemes. These systems account for over 3,000 ha, but have not been included because (i) the schemes have been beneficiaries of improvements funded by other sources, and (ii) the degree to which they have benefited has not been adequately assessed at this time.

3. Economic Internal Rates of Return (EIRR)

20. The EIRRs for sample projects surveyed by the PCM are computed directly and shown in Table 4. The largest portion of the investment, the Pengga-related schemes in WNT, has a return slightly lower than the appraisal estimate, partly because of cost increases.

21. The largest variance from the appraisal is shown by the Kambaniru scheme in ENT. The PCM EIRR is estimated at 5 percent while the appraisal estimated 12.7 percent. The Project experienced cost increases and delays in completion. The subproject cost of $8,980 per ha is 44 Appendix 17, page 4

significantly above the overall Project average of $1,707 per ha. The return is low when viewed in a static sense, but there may be other dimensions to the subproject. The minimum flow for the water supply is reported as 7 cubic meters per second, while the irrigation area is currently only 1,240 ha. There is a significant surplus of water available for diversion to other potential agricultural areas. This is apparently being considered by PWRS-ENT.

22. For the other sample subprojects, the variance is not large. Schemes with lower cost per hectare naturally provided the best returns.

23. For the overall Project EIRR, the appraisal estimated isl4.9 percent. The PCM EIRR for the irrigation projects is 11.9 percent, with WNT at 12.9 percent performing better than ENT at 9.8 percent. The returns in both provinces are significantly weighted by the returns of the Pengga-related schemes and Kambaniru.

24. Lastly, when supporting project component costs are apportioned to the irrigation schemes, the Project EIRR is 10.3 percent.

4. Financial Impact

25. In Table 5, the financial impact of the Project on two sample farm sizes is depicted. To capture much of the range of outcomes, a small farm with 0.35 ha lowland and a larger farm with 0.80 ha lowland were used. Incremental annual income from irrigation improvements amounts to about Rp430.000 ($185) for the small farm and Rp980,000 ($422) for the larger farm.

26. At lower levels of income, the marginal propensity to consume is higher. While having some implication for 1SF collection, the increased income should, in general, be sufficient to pay the Rp35,000-40,000 per ha for 1SF. Currently, the plan is to phase in 1SF increases over time, with the present level of about Rp16,000-1 8,000 generally targeted for collection.

45 Appendix 17, page 5

Table 1: DIRECT COSTS and PROJECT EIRRS •/0 OCC Provincial Financial lrflgated tmgated Totals DCC Area DCC DCC° EIRR (SINs) (Rp 900INa) (%) Irrigation Woflis (8) t%$) toe) A. West Nusa Tenggara Pengga-related Irrigation Systems 1 Pengga Cars 19.203.762 2 Perrgga 1mg systems 8462,764 ______Pengga Subtotal 27.666 547 571 4 149 6668 14 037 3 Keru & Sesaot DiverSions 1.421 978 2 6 4 1-ILD Ext Canal 1.487 107 27 5 Jurangsate MC Remodeling 2,214,461 4 ------424 892 6 Parung 538 422 1 00 1 ,27C Jurang Balu I 3,716 110 8 Jurang Balu II 2 394.791 ______Jurang Batu Subtotal 6110.901 11 3 3.500 1,746 3675 4,53C 1084 2261 9 Mujur III 4.909,559 91 1154 2430 10 Reoggung 1.454478 27 1,260 1085 2,284 11 Tibunangka 2478,991 46 2286 991 2085 12 Katon 1 868298 34 1886 903 1901 13 Kulem 1.024.763 19 1.135 14 Rutus 1 947740 E L45 3 L3,4P Z822 32 5020 34.41 124 98Pengga.related Irrigation1 Systems 53 123,244 1635 West Nusa Tenggara Small Schemes 1028 16 Pawang ,(ates 165,597 03 339 488 155 16 lrertg Daya 272.965 05 278 982 2.067 985 17 Qatar 296 801 05 634 468 1741 18 Mamben ______317 .393 3-46 917 i5 16.5° West Nusa Tenggara Small Sctremes Subtotal 1 052.756 1 9 1,59' 659 1 388 West Nusa Teoggara Total 54176,001 100 34,092 1 589 3,345 12 5b 125' WTB Econ AnalSubsample 53713.602 991 33119 1622 3414 all SUDprOjeCts except Pawang Kates and Qatar) B. East Nusa Tenggara I Kajum bawa & Maa Bawa 121.550 05 78 1,558 3.280 2 Wae Cess Ill S Wae Bobo 719 953 3 627 1,148 2417 3 Kontepe 609.094 25 359 1,697 3571 4 Lombur-Wae Cewo 4-47,799 5 Lembor - Wae Raflo 3A 885,995 6 Lembor - Wee Kanta 1 1.266100 7 Lembor - Wae Kanla 2 891.500 8 Lembor' 230,952 9 Lembor - Wae Sale 1 477 383 406.107 10 LembOr - Wae Nakeng Lemoor Subtotal 5.605 836 23 3 4 487 1,249 2.630 156' 11 Mautendal't 672.525 2.8 413 1.628 3428 234,688 1 127 1,848 3890 12 Kolesra 13 MetOlo 1,395,691 5.8 698 2000 4,209 93' 14 Oeloan 65725 03 76 865 1 820 15 t-laekto 160,985 07 388 415 873 16 Loll 34,757. 0 1 37 939 1.977 17 Pets 35612 01 75 475 1,000 18 Kambaniru weir 7116139 19 Kambanlru sYstems 4,019,537 Kambaniru Subtotal 11135676 463 1,240 8,980 18 904 45' 20 Magepanoa 632 802 2 6 803 788 1 659 21 Pruda° 264,217 11 220 1,201 2528 22 POnx 214480 09 381 563 1185 193' 23 Kakana 1 581,064 66 509 3106 6539 24 Malaiyarlg 23 L2J.E 454 5 15.2' East Nusa Terrggara Total 24.048.761 100 11734 2.049 4314 93' East Nusa Tenggara wto Earthouake Dmgd. Sites 22.244.529 92 10.171 2187 4604 10' ENT Econ AnalSampie 18.915.789 79 8,022 2358 4964 93 )Lernbor, MeIolo Kambanuru Ponu and Matalyang) ENT Non-sampled. Non-earthquake Sites 3.328 740 14 2 149 1,549 3,261 13.2 ENT Eartflouake Damaaed Sites 1 804 232 8 1 563 1154 2430 Kotesia, Magepanda and

C. WNT and 78,224 761 45826 1.707 3593 11

Sites Total 41141 1,765 3716 11

lrngarxn system Drool Conslrucftnn Cost. DCCI orcluorng controol rae Not ,Ctdng Consiro per'o-s,onadm,sur.rrcoaflu Other tSOoCialCd 00515 Convened ci mo-protect overage eechaflge rate 2 105 Inbiudes harold,

IrroludtngJurerg Sore l'iulu anti -itt,' 11,037 00 0(50 dIrectly Oftecied bit P iOtoct 000rks Horns 1992 earth0005e severely damaged subpto(ect Ides F,.ldo,srandassesstnenl Included in sample 8190 analysts Protected from small schema sample sites yr ireng Day. and MaTetren VQNT 8100 protected Pengge-telared systems £199 end protected Ooerall Small Scheme EIRR ENT E1RR pro(eCled from wergflied average of sampo-c.iculeled EthOs end non-e.merie projected EARs Nor-sample EAR estimation erplained beio (note 101 Non. sarnpie £199 estimated baseo or OCCIO. 000 one cast, flows of sample sins Lembel end Mdcc These fern letU ties ate seer as the clnseslrelar,OCC to the non-sample sees in terms of sac cropping pattern and costs The wetgntrng of the cash flown ,e hane y on the tel.ttOttsniP

011051 tt hour rye group Of ursettnpied sres to 111w host per no for the Lemhcl and UelOiO sees WhIT end hilT Etch both up using .ernples (93% or DCC, arc prnlect,nrs tnt rcrsa'rrrleoar,d eennuoase sIts 7% ,' Otciec, DCC, 46 Appendix 17, page 6

Table 2: Economic Prices for Fertilize? IMPORT PARITY EXPORT PARITY Unit +1- 1995 2000 2005 Unit +/- 1995 2000 2005

UREA

156 150 Urea FOB Europe S/MT 212 16 15 reight & Insurance Premium to Asia 10% + 21 171 165 FOB Price ax-factory Indonesia S/MT 233 390 376 FOB Pnce ex-factory Indonesia Rp/Kg 532 + 40 40 40 Handling/Transport to V'Jholesaler Rp/Kg 430 416 Wholesale Price Rp/Kg 572 15 15 Storage & Wholesaler Margin RpIKg + 15 15 15 Transportto Farm RpIKg + 15

460 446 Economic Farm-gate prices Rp/Kg 602

TSP Bulk TSP FOB Florida S/MT 150 136 126 Freight & Insurance Premium S/MT 40 40 40 Price ex-warehouse Indonesia CIF S/MT 190 176 166 Price ex-warehouse Indonesia CIF Rp/Kg 433 402 378 Handling/Transport to Wholesaler Rp/Kg + 40 40 40 Wholesale Price Rp/Kg 473 442 418 Storage & Wholesaler Margin Rp/Kg + 15 15 15 Transport to farm Rp/Kg + 15 15 15

Economic Farm-gate prices RpIKg 503 472 448

KCL Bulk KCL. POB Vancouver S/MT 118 113 109 Freight & Insurance Premium 45 45 45 Price ex-warehouse Indonesia CIF S/MT 163 158 154 Price ex-warehouse Indonesia CIF Rp/Kg 372 361 351 Handling/Transport to Wholesaler + 40 15 15 Wholesale Pnce 412 376 366 - Storage & Wholesaler Margin + 15 15 15 Transport from farm + 15 15 15

Economic Farm-gate Price Rp/Kg 442 406 396 All prices are in constant 1995 levels, calculated using the August 1996 update of the World Bank Commodity Prices and Forecast. Exchange rate 1995, Rupiah to the USS = 2280

47 Appendix 17, page 7

Table 3: ECONOMIC VALUE OF ANNUAL INCREMENTAL PRODUCTiON - SAMPLE SITES (1995 Constant Price, IBRD Price Year 2005) Crop Area Production Unit Value/ha Total Crop Scheme Rice Other Rice Other Rice Other Value Scheme Area (ha) (ha) (t) (t) (Rp 000) (Rp 000) (Rp M) A. West Nusa Tenggarab Penaga-Related Systems 1 Pengga future w/o 4.845 4.199 17443 4,079 454 185 2.976 3,589 ha future w/ 5,384 4.307 27.994 7.429 930 543 7.342 2 Baturiti future w/o 756 431 2,722 419 454 185 423 560 ha future w/ 960 552 4,992 952 930 543 1,192 3. Parung futurewlo 1,270 635 4.572 617 454 185 694 1.270 ha future w/ 1.570 1,375 7.065 2,372 677 543 1,809 4. Jurarig Batu future w/o 3,500 1,050 9,100 770 210 185 929 3.500 ha future Wi 3,800 4,950 17,100 8.539 677 543 5,258 5 Tibunangka future w/o 2.285 914 8.226 ' 888 454 185 1,206 2.285 ha future w/ 2,285 3,199 10,283 5,518 677 543 3,283 6. Renggung futurew/o 1,827 882 6,577 857 454 185 993 1.260 ha future w/ 2,394 1.071 10,773 1,847 677 543 2,202 7. Mujur I futurew/o 2.082 455 7.494 442 454 185 1.029 1,301 ha futurew/ 2,342 455 10,538 785 677 543 1,832 8. Mujurll futurew/o 4,521 1,453 16.274 1,066 454 185 2.321 3.229 ha future W/ 5,812 1,001 26.155 1.727 677 543 4.478 9. Katon future w/o 1,886 943 6,790 916 454 185 1,031 1,886 ha future W/ 1.886 2.829 8.487 4.880 677 543 2,812 10 Kulem futurew/o 1,142 571 4111 555 454 185 624 1,142 ha future w/ 1,142 1,485 5.139 2.561 677 543 1,579 11. Rufus future w/o 1,453 872 5,231 847 454 185 821 1.453 ha future wI 2,180 1,453 9.808 2,506 677 543 2,264 12. Jurang Sate Hulu future w/o 7,385 2,686 26.567 1.969 454 185 3.849 4.476 ha future W/ 8.281 4.028 37.263 6,949 677 543 7.791 13. Jurang Satu Hilir future wlo 9.171 2.948 33,017 2.864 454 185 4,709 6.551 ha future w/ 10,482 5,568 47.167 9.605 677 543 10,117 S.Lombok Related Totals future wlo 42,123 18,039 148,143 16.268 - -- 21,605 32,502 ha future W/ 48,516 32,273 222.763 55,672 - -- 51,957 Increments 6,393 14,234 74.620 39.363 30,353 Other Small Schemes (L pmok - Sample 1 Ireng Daya futurew/o 500 267 1.801 259 454 185 277 278 ha future wi 542 250 2.819 432 677 398 467 2. Mamberi futurew/o 554 415 1.993 501 715 417 569 346 ha future w/ 588 415 3,059 716 930 687 832 Other S.S. Smpl. Totals future w/o 1,054 682 3.794 761 - -- 846 624 ha future w/ 1,130 665 5,878 1.148 -- -- 1,299 Increments 76 - 17 2.083 387 453 B. East Nusa Tenggarab 1. Ponu future w/o 525 185 1 890 180 454 185 273 381 ha futurew/ 610 267 2743 460 677 398 519 2 Melolo future w/o 600 280 2 160 272 454 185 324 698 ha future W/ 1.318 220 5932 379 677 398 980 3. Maitaiyartg future w/o 1.060 321 3815 312 45.4 185 540 1.216 ha future Wi 1.398 122 6 293 210 677 398 995 Kambartiruc 4. future w/o' 100 995 260 729 210 23 44 1.240 ha future w/ 3.140 250 14130 431 677 398 2,225 5. Lembor future w/o 8,785 867 31 626 842 454 185 4.148 4.487 ha future W/ 11,666 112 52498 194 677 398 7.942 SampleTotal futurew/o 11,070 2,647 39,750 2.335 -- -- 5,329 8.022 ha futurewI 16,132 970 81,596 1,674 -- -- 12,661 Increments 7 063 -1 677 41 845 - 661 7,332

Pengga/Baturtti/Mamben rice yields are estimated at 5.21./ha post profect; other sites at 4 51./ha WNT future with-project secondary crops valued at 95% irrigated palawija and 5% hi-value crops (Mamben exception - see below). ENT 1uture with-project secondary crops include maize, soybean and groundnut Mamben w/o returns estimated at 70% of general w/ project returns due the reported abundance of available water prior to the project. Project has increased efficiencies in water distribution, and hi-value cropping is estimated at 10% of secondary crops in the future with-Project. Kambaniru pre-pro/ect yields are rainfed Table & SAMPLE SUBPROJECT EIRR CALCULATIONS ______(EcQNSMl COSTS iN CONSTANT EOP t995 Pp 561500) PRO VINCE I 2003 2004 2005' CoatComponent 990 1991 1892 1993 1994 1995 1996 1997 1998 1998 2000 2001 2002 A. Welt Null T.n8gana - Pengga (SouhLombo)Re!tedS0heme9 I lrngahOo System Development Costs -7509 -28 275 -47 542 -47 335 -21 616 0 -650 -650 -650 2 Incremental O&M Costs -130 -260 -390 .520 -650 -650 -650 .650 3 Incremental Agnicottunat Produclon .394 5677 11.747 17,818 23 688 29 859 29959 29 859 29 959 29.959 29959 29,959 4 V4tage Innuodatton Loss -450 •450 194 194 194 194 5 Energy 194 194 194 194 194 194 194 Net Revenue .7509 -29,275 -47542 -47,785 -22490 5,741 11.681 17.622 23 582 29.503 29.503 29,503 29,503 29.503 29503 29 503 Pp 3 4 Million/ha Fncl Direct Csnstr. Colt EIRR . 124% ______Other Sma6Sc1590e_7(!.6) A ireng Daye I P60 and Related Cosls - 159 -710 0 0 0 0 -8 -6 -6 2 Incremental 068.! Costs -I -2 -3 -4 -8 -6 -8 -6 -6 -6 -6 190 190 190 3. lncrernsenlatAgnicutturst Production 38 76 114 152 190 190 190 190 190 190 190 185 185 185 lAS 185 NntRevenoe -159 -710 37 14 III 148 185 185 185 185 185 Pp 2.1 Million/ha Fact Direct Constr Cost EIRR 155% ______B Ma,nbeo I P60 and Related Costs 0 - 615 - 363 0 0 0 -7 -7 .7 -7 2 Incremental O&M Costs -t -3 -4 -6 -7 -1 -7 -7 -7 263 263 3 Incremental Agricultural Prodtmt,on 53 105 158 210 263 263 263 263 263 263 263 256 256 256 Net Revenue -615 -363 51 102 154 205 256 256 256 256 256 256 Pp I 9 Mtttioo9ta Foci Direct Constr Cost EIRR 17.4% Total tar West Nun Tenggara Sample Net Revenue -7.668 -29.601 -47,868 47,660 -22,247 6,042 12071 18.062 24003 29943 29.943 29,943 29.943 29.943 29943 29.943 Pp 3 4 Million/ba Foci Direct Conslr Cost EIRR: 12.5% B. East P4usa T.nggsra A Lembor I R&U and Related Costs 0 - 906 3247 -6 337 -4 817 0 -90 -90 -90 2 iocremenialO&M Costs -18 -36 -54 -72 -90 -90 .90 -90 3,794 3794 3.794 3 Incremental Agricultural Producl,on 799 1,517 2.276 3,035 3.794 3.794 3.794 3794 3.704 3,704 3,704 3,704 Nd Recenun 0 -906 -3.247 -6,337 .4,817 741 1.482 2,222 2,963 3.704 3,704 3,704 Pp 2 6 Million/ha FocI Dyed Constr Cost b EIRR156% ______B 564010 I P60 sod Related Costs 0 0 - I 430 - I 500 - 827 0 -14 -14 -14 -14 2 Incremental OSM Cost, -3 -6 -8 -II -14 -14 -I4 656 656 3 Incremental Agricultural Productton . 66 131 197 282 328 393 459 525 590 Stt 576 642 642 Net Revenue 0 0 .1.430 -1,500 -927 63 126 188 251 314 379 445 Pp 4 2 U/boo/he Foci Direct Coststr Cost EIRR93% ______C tKambanrn, I tmgatron System Development Costs 0 0 .4007 -9458 . 9460 -6408 -25 -25 -25 25 2 Incremental 08M Costs -5 -tO -IS -20 -25 -25 1,745 1863 2181 3 Incremental AgnlCuhureI Produchon 218 436 654 873 1.091 1,309 1527 1,720 1,938 2,157 NetPevenoe 0 0 -4,007 -8.459 -9.460 .8,408 213 426 840 853 1,066 1,284 1,502 Pp 189 Million/ha Fndl Direct Constr Cost EIRR 4 5% 13 Ponu I 960 and Relaled Costs 0 0 0 - 255 - 316 0 -8 -8 -6 2 Incremental OSM Costs -2 -3 -5 -6 -8 -8 -8 -8 248 248 3 IncvementalAgncultural Production 25 49 74 99 123 148 172 197 222 214 239 239 Nel Revenue 0 0 0 -255 -316 23 48 68 92 116 140 165 169 Pp I 2 Million/ha Fnci Direct Constr Cost RR193% ______E Malaiyang I P60 and Peteted Costs 0 0 0 - 458 -1 026 0 __ -24 -24 2 Incremental OSM Cosls -5 -10 -IS .19 -24 -24 -24 -24 -24 455 455 3 Incremental Agricultural Production 45 91 136 192 227 273 318 364 409 365 430 430 -o Net Re,enue 0 0 0 -459 . 1026 dl 81 122 162 203 249 294 339 Pp I 0 Million/Ira Foci Direct Constr Cost 0 -906 -8685 -18,009 -16 547 -8408 E98R152% ______-______CD Total br East Nusa Tenggara Simple 5,245 6599 6953 7 171 Nd Revenue 0 .906 -9605 -16009 .19,547 . 5540 1,948 3078 4 109 5 lOg 5538 5,892 Pp 5 0 MillIon/ito Foci Direct Cotrslr Cost ImP 93% C Total to, Wesi and East Noss Tenggare SAmples Net Peven,e .7668 .30556 -56,553 -65669 38.194 502 14.010 21091 28 '2 35133 39401 35835 36 189 38543 38897 37 I tO P7 36 Mill,ontl,o Fnci D,recl Ceosli Cool ElI/P 110', ______

49 Appendix 17, page 9

Table 5: Sample Farm Income Analysis Smaller Farm a Larger Farma future future without with without with Item and Unit project project project project Farm Size (ha) Q .t.i. lowland, irrigated 0.35 0.35 0.8 0.8 dry land, rainfed 0.26 0.26 0.26 0.26 yard/tree crops 0.05 0.05 0.1 0.1

Income Net Agricultural Incomeb (Rp) lowland, irrigatedc 275,275 703,585 629,200 1,608,194 dry land, rainfed 120,900 120,900 80,600 80,600 yard/tree crops 31,000 31,000 31,000 31,000 Miscellaneous Incomed (Rp) 350,000 210,000 245,000 175,000 Total Income (Rp) 777,175 1,065,485 985,800 1,894,794

Expense Household Expensese (Rp) 1,160,000 1,160,000 1,160,000 1,160,000 Land Tax (PBB) 6,600 9,900 11,600 17,400 Total Expenses (Rp) 1,166,600 1,169,900 1,171,600 1,177,400

Net Household Income 389,425 (104,415) 185,800) 717,394

Net Household Income ($US (168 (80) 309

a Smaller farm seen as more typical of West Nusa Tenggara, while larger farm more typical of East Nusa Tenggara b Without-project farm intensity: 185% on lowland and 150% on dryland. With-project farm intensity: 249% on lowland and 150% on dryland. C Incremental income: small farm lowland Rp703,585 - Rp275,275 Rp430,000 (rounded up); larger farm lowland Rpl 608,194 - Rp629,200 = Rp 980,000 (rounded up). d Small farm without and with: 100 days labor at Rp 3,500/day. Larger farm without and with: 70 and 50 days at Rp 3,500/day. Surplus labor drop assumed with-project. Poverty level of $US 100/capita/year assumed. Average family size: 5. Exchange rate Rp/1 US$: 2320