Completion Report
Project Number: 28162 Loan Number: 1545 October 2006
Sri Lanka: Upper Watershed Management Project
CURRENCY EQUIVALENTS
Currency Unit – Sri Lanka rupees (SLRe/SLRs)
At Appraisal At Project Completion 31 July 1997 31 December 2005 SLRe1.00 = $0.0171 $0.009868 $1.00 = SLRs58.4 SLRs101.34
ABBREVIATIONS AFM – assistant field manager CBO – community-based organization DAS – Department of Agrarian Services DOA – Department of Agriculture DS – divisional secretary DWLC – Department of Wild Life Conservation EA – executing agency EIRR – economic internal rate of return FAC – field action committee FD – Forest Department FM – field manager ha – hectare IA – implementing agency IPM – integrated pest management km – kilometer LUPPD – Land Use Policy Planning Division MASL – Mahaweli Authority of Sri Lanka MFE – Ministry of Forestry and Environment MoAD – Ministry of Agricultural Development MoE – Ministry of Environment MTR – midterm review NCC – National Coordination Committee NGO – nongovernment organization NPV – net present value NRMS – Natural Resource Management Services NWMP – National Watershed Management Policy PCC – provincial coordination committee PCR – project completion report PCRM – project completion report mission PMO – project management office PRA – participatory rural appraisal RFA – reimbursable foreign aid RRP – report and recommendation of the President SD – Survey Department SLRM – Sri Lanka Resident Mission SM – social mobilizer UWMP – Upper Watershed Management Project WMU – watershed management unit
GLOSSARY
grama niladhari Local government officer.
NOTES
(i) The fiscal year (FY) of the Government ends on 31 December.
(ii) In this report, "$" refers to US dollar
Vice President L. Jin, Operations 1 Director General K. Senga, South Asia Department (SARD) Director A. Pio, Sri Lanka Resident Mission, SARD
Team leader M. Amerasinghe, Project Implementation Officer, Sri Lanka Resident Mission, SARD Team members U. Hemapala, Financial Management and Disbursement Officer, Sri Lanka Resident Mission, SARD N. Salgado, Senior Project Assistant, Sri Lanka Resident Mission, SARD
CONTENTS
Page
BASIC DATA i MAP v I. PROJECT DESCRIPTION 1 II. EVALUATION OF DESIGN AND IMPLEMENTATION 2 A. Relevance of Design and Formulation 2 B. Project Outputs 4 C. Project Costs 6 D. Disbursements 6 E. Project Schedule 7 F. Implementation Arrangements 7 G. Conditions and Covenants 7 H. Consultant Recruitment and Procurement 8 I. Performance of Consultants, Contractors, and Suppliers 8 J. Performance of the Borrower and the Executing Agency 8 K. Performance of the Asian Development Bank 9 III. EVALUATION OF PERFORMANCE 9 A. Relevance 9 B. Effectiveness in Achieving Outcome 10 C. Efficiency in Achieving Outcome and Outputs 12 D. Preliminary Assessment of Sustainability 12 E. Impact 13 IV. OVERALL ASSESSMENT AND RECOMMENDATIONS 13 A. Overall Assessment 13 B. Lessons 14 C. Recommendations 15 APPENDIXES 1. Overall Assessment 16 2. Project Framework 17 3. Organizational Structure 28 4. Consultant Inputs 30 5. Training Program 31 6. Socioeconomic Assessment 33 7. Financial and Economic Analyses 43 8. Actual Project Costs 55 9. Project Implementation Schedule 57 10. Loan Covenant Compliance 59 11. Summary of Output Targets and Achievements 75 12. Photographs of Project Area 76
BASIC DATA
A. Loan Identification
1. Country Sri Lanka 2. Loan Number 1545-SRI(SF) 3. Project Title Upper Watershed Management Project 4. Borrower Democratic Socialist Republic of Sri Lanka 5. Executing Agency Ministry of Environment 6. Amount of Loan SDR12,237,000 7. Project Completion Report Number PCR: SRI 1545
B. Loan Data 1. Appraisal – Date Started 11 June 1997 – Date Completed 25 June 1997
2. Loan Negotiations – Date Started 18 August 1997 – Date Completed 19 August 1997
3. Date of Board Approval 24 September 1997
4. Date of Loan Agreement 19 January 1998
5. Date of Loan Effectiveness – In Loan Agreement 05 May 1998 – Actual 05 May 1998 – Number of Extensions One
6. Closing Date – In Loan Agreement 30 June 2005 – Actual 31 December 2005 – Number of Extensions One
7. Terms of Loan – Interest Rate 1% per annum – Maturity (number of years) 40 – Grace Period (number of years) 10
8. Terms of Relending (if any) – Interest Rate – Maturity (number of years) – Grace Period (number of years) – Second-Step Borrower
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9. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval
01 July 1998 03 April 2006 81 months
Effective Date Original Closing Date Time Interval
05 May 1998 30 June 2005 73 months
b. Amount Category Original Amount Last Revised Net Amount Amount Undisbursed or Allocation Cancelled Allocation Available* Disbursed Balance Subloan (SDR) (SDR) (SDR) ($) ($) ($) 1 Civil Works 370,000 0 370,000 504,663 839,096 (334,433)
2 Survey, Design, 516,000 0 516,000 756,775 315,648 441,127 and Mapping 3 Extension and 221,000 0 221,000 281,228 351,346 (70,118) Demonstration 4 Institutional 737,000 0 737,000 1,040,822 682,222 358,600 Strengthening 5a Equipment and 221,000 0 221,000 307,192 213,740 93,452 Furniture 5b Vehicles 590,000 0 590,000 852,651 285,742 566,909 6 Consulting 885,000 0 885,000 1,221,450 1,026,379 195,071 Services 7 Training 1,695,000 675,000 1,020,000 1,482,248 369,916 1,112,332
8a Reforestation 2,875,000 676,000 2,199,000 3,061,478 2,647,781 413,697 8b Soil Conservation 2,800,000 0 2,800,000 3,910,610 4,376,345 (465,735) 8c Resettlement (607,000) 607,000 903,341 3,595 899,746 9 Service Charges 369,000 369,000 531,875 364,615 167,260 10 Unallocated 958,000 607,000 351,000 521,812 0 521,812
Total 12,237,000 1,351,000 10,886,000 15,376,145 11,476,425 3,899,720 * The dollar value of the net loan amount consists of disbursed portion at historical rate and the undisbursed portion at current rate.
10. Local Costs (Financed) - Amount ($) 8,142,436 - Percent of Local Costs 66.5 - Percent of Total Cost 49.0
C. Project Data 1. Project Cost ($ million)
Cost Appraisal Estimate Actual
Foreign Exchange Cost 4.9 3.3 Local Currency Cost 18.8 14.2 Total 23.7 17.5
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2. Financing Plan ($ million)
Cost Appraisal Estimate Actual Implementation Costs Borrower Financed 6.0 4.9 ADB Financed 16.6 11.5 Beneficiaries 1.1 1.1 Total 23.7 17.5 ADB = Asian Development Bank.
3. Cost Breakdown by Project Component ($‘000) Component Appraisal Estimate Actual Foreign Local Total Cost Foreign Local Total Exchange Currency Exchange Currency Costa A. Participatory Rehabilitation and Protection of Forests 800 5,100 5,900 563 3,942 4,505 B. Conservation-Oriented Farming Systems 1,200 7,400 8,600 1,167 5,824 6,991 C. Project Management and Institutional Strengthening 1,600 2,700 4,300 1,239 3,308 4,545 Physical contingencies 400 1,600 2,000 Price contingencies 400 2,000 2,400 Total project cost before service charge 4,400 18,800 23,200 2,932 13,072 16,041 Service charge during construction 500 0 500 365 0 365 Total 4,900 18,800 23,700 3,333 13,072 16,406 a Excludes estimated $1.1 million beneficiary contribution.
4. Project Schedule Item Appraisal Estimate Actual Date of Contract with Consultants Q4 1999 Q3 1998 Civil Works Contracta Equipment and Supplies Dates First Procurement Q4 1998 Q2 1998 Last Procurement Q4 2002 Q4 2005 a Civil works consisted of many small contracts to be performed though community participation.
5. Project Performance Report Ratings Ratings
Development Implementation Implementation Period Objectives Progress From 29 November 1998 to 31 December 1998 S S From 01 January 1999 to 31 December 1999 S S From 01 January 2000 to 31 December 2000 S S
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Ratings
Development Implementation Implementation Period Objectives Progress
From 30 January 2001 to 31 March 2001 S U From 01 April 2001 to 31 December 2001 S S From 01 January 2002 to 31 December 2002 S S From 01 January 2003 to 31 December 2003 S S From 01 January 2004 to 31 December 2004 S S From 01 January 2005 to 31 December 2005 S S S = satisfactory, U = unsatisfactory.
D. Data on Asian Development Bank Missions No. of No of Specialization Name of Mission Date Persons Person- of Members Days Fact Finding 16–30 Apr 1997 6 64 a,p,q,r,s,c Appraisal 11–25 Jun 1997 5 75 a,m,n,c,i Inception 12–17 Feb 1998 2 12 a,b Review 18–27 Nov 1998 1 10 a Review 08–20 July 1999 2 26 a,b Special Loan Administration 17–19 Jun 2000 1 3 a Special Loan Administration 21–23 Jan 2001 3 3 f,b,j Midterm Review 17–28 Sep 2001 3 36 a,c,b Contact 06–07 May 2002 1 2 d Review 05–19 Dec 2002 2 15 d,e Special Loan Administration 13–17 Oct 2003 2 2 f,g Special Loan Administration 12–16 Jan 2004 1 5 g Special Loan Administration 10–13 May 2004 2 2 f,j Special Loan Administration 7–13 Sep 2004 2 12 i,j Review 19–29 Oct 2004 3 22 j,g,k Review 29 Aug–07 Sep 2 20 j,l 2005 Project Completion Review 17 Jul–11 Aug 3 55 b,c,j,l,t,u 2006 a – project economist, b – assistant project analyst, c – watershed management specialist (consultant), d – rural development specialist, e – forestry specialist (consultant), f – senior project economist, g – social sector/resettlement specialist, h – senior social development specialist, i – senior environment specialist, j – project officer, k – project analyst, l – disbursement officer, m – lead agronomist, n – economist, , p – senior forestry specialist, q – environment specialist, r – social development specialist, s – programs officer, t – sociologist (consultant), u – economist (consultant).
o 80 00'E 81o 30'E
t i a r t S
k l a P SRI LANKA SRI LANKA P a l k B a y UPPER WATERSHED MANAGEMENT PROJECT N O R T H E R N 9o 00'N 9 o 00'N (as completed)
Gulf of Mannar
N O R T H C E N T R A L
N N O R T H W E S T E R N
E A S T EUnichchaiR N Reservoir
C E N T R A L B a y o f B e n g a l 0 5 10
Kilometers o o 7 00'N COLOMBO 7 00'N Uma Oya U V A
Walapane WESTERN SABARAGAMUWA
S O U T H E R N I N D I A N O C E A N Uva Paranagama o 80 00'E 81o 30'E Nuwara Eliya
Welimada Ella
Bandarawela Haputale
Imbulpe Kalu Ganga Ratnapura Haldummulla
Project Area Kirindi Oya Balangoda National Capital PMO Sub-offices River Divisional Boundary Provincial Boundary Boundaries are not necessarily authoritative.
Walawe Ganga 0 6 - 2 9 0 9 b
R M
I. PROJECT DESCRIPTION
1. The Upper Watershed Management Project (the Project) was formulated, appraised,1 and approved by the Asian Development Bank (ADB) in 1997. The loan became effective in May 1998, for 7 years. The cost at appraisal was $23.70 million, jointly funded by the Government of Sri Lanka (the Government), ADB, and beneficiaries. The Project was designed to address forest and land degradation problems in the upper watersheds of four river basins (Kalu Ganga, Kirindi Oya, Uma Oya, and Walawe Ganga), which have resulted in declining farm productivity and incomes in the watersheds and adversely affected downstream agriculture, irrigation, and hydropower resources through flooding and siltation. 2. The Project aimed to reduce land and forest degradation, and reduce poverty, in critical areas of the upper watersheds in Central, Sabaragamuwa, and Uva provinces by (i) increasing forest cover through integrated and participatory approaches; (ii) raising crop productivity in cultivated areas through the promotion of conservation-oriented farming systems; and (iii) strengthening the capacity and coordination of implementing agencies (IAs) and facilitating a long-term policy to enable the Government to achieve sustainable watershed management. The primary classification was “environmental” and secondarily “poverty reduction.” The planned impact was to (i) protect the environment in the critical watersheds of the south central region of the country and (ii) reduce poverty by raising the incomes of beneficiaries above the poverty level through increased agricultural productivity and employment generation. 3. At appraisal, the population of the project area was estimated at 270,000. The Project intended to directly benefit 43,000 households in forested areas and 18,000 marginal vegetable- farming households with holdings averaging less than 0.25 hectares (ha). The quantifiable direct benefits envisaged were sustainable increases in food production, forest products, and household incomes, as well as benefits to hydropower generation through reduced siltation in downstream reservoirs. Significant unquantified benefits were expected from (i) reduced soil erosion; (ii) improved water retention in the hills, extending the growing season and improving drinking water supplies; (iii) improved conservation and biodiversity in forests and wildlife sanctuaries; and (iv) institutional development for conservation and protection of natural resources. The economic internal rate of return (EIRR) was estimated at 22%. 4. The Project had three components: (i) Participatory rehabilitation and protection of forests. This aimed to relieve pressure on natural forests and protected areas, while bringing increased incomes to the poor, through three subcomponents: (a) buffer zone planting by nongovernment organizations (NGOs), community-based organizations (CBOs), and farmers on 4,000 ha; (b) small timber farms for farmers on 3,000 ha of Government land; and (c) home gardens, comprising 15,000 multipurpose gardens over a total of 1,500 ha of private land. (ii) Promotion of conservation-oriented farming systems. This supported the promotion of appropriate soil conservation measures and increased productivity of cultivated land of the Uma Oya upper watershed through the participation of beneficiary farmers and extension programs to promote community-based conservation-oriented farming systems, with training in improved farming systems and innovative technical packages.
1 ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project. Manila.
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(iii) Capacity building and institutional strengthening. This established a management system for the IAs to integrate forestry, agricultural, and other activities. The subcomponents comprised (a) project management through a project management office (PMO) and two field sub-offices, procurement, planning, and administration; (b) consulting services to strengthen the capacity of the IAs; and (c) training, workshops, and seminars for IA field staff, CBO members, and key farmers, as well as publicity to raise awareness of watershed management issues. 5. The Ministry of Environment2 (MoE) was the Executing Agency (EA), working closely with the Ministry of Agricultural Development3 (MoAD). The PMO, established by the MoE, was responsible for overall management of the Project. The IAs were (a) the Forest Department (FD) of the MoE, covering participatory rehabilitation and protection of forests and boundary marking, and (b) the provincial departments of agriculture4 for implementing and promoting conservation- oriented farming systems. Cooperating agencies included the Department of Wild Life Conservation (DWLC), Survey Department (SD), Land Commissioner's Department, and Mahaweli Authority of Sri Lanka (MASL). National coordination was to be facilitated by a National Coordination Committee (NCC), headed by the secretary of MoE. Provincial coordination was to be through Provincial Coordination Committees5 (PCCs) headed by chief secretaries. At the subdistrict level, field action committees (FACs) were to be established, each under the respective divisional secretary.
II. EVALUATION OF DESIGN AND IMPLEMENTATION
A. Relevance of Design and Formulation
6. The Project was designed to address two main watershed issues: (i) reducing degradation of erosion-prone agricultural land by promoting conservation-oriented farming systems and (ii) reducing adverse environmental impacts on protected forests through rehabilitation, protection, and measures to relieve encroachment pressures. The approach focused on (i) using participatory methods to involve marginal farmers, combining direct income benefits with inculcating a sense of local ownership to assure sustainability; (ii) strengthening coordination among concerned agencies to develop and sustain an integrated approach to watershed management; and (iii) facilitating the Government’s adoption of a watershed policy that would favor widespread replication of the processes developed by the Project. 7. At appraisal and at completion, the Project was highly relevant to the Government’s policies on natural resource management and poverty reduction. 8. The Project was designed under ADB project preparatory technical assistance6 carried out for the then Ministry of Agriculture, Lands & Forestry. The design process included stakeholder consultations and drew on previous experiences (e.g., the Community Forestry Project,7 Forest Sector Master Plan of 1995, and Sri Lanka-German Upper Mahaweli Watershed Management Project) and reflected Government policy. The Project was appraised by ADB in
2 What was the Ministry of Forestry & Environment at appraisal stage became the Ministry of Environment & Natural Resources (MENR) and, more recently, the Ministry of Environment (MoE). 3 What was the Ministry of Agriculture, Lands & Forest at preparation was the Ministry of Agriculture & Lands at appraisal and has since become the Ministry of Agricultural Development. 4 Agriculture is a devolved agency with autonomy at the provincial level under provincial councils. 5 Regional coordination committees at appraisal were later renamed provincial coordination committees. 6 ADB. 1997. Technical Assistance to Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Study. Manila TA 2619-SRI, approved on 25 July 1996, for $600,000. 7 ADB. 1982. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Community Forestry Project. Manila.
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June 1997, the Project Administrative Memorandum8 was agreed in February 1998, and the loan became effective in May 1998. 9. The project framework (Appendix 2) included three outcomes: 2.1 protection of watersheds, 2.2 poverty reduction, and 2.3 institutional capacity strengthening. However, having more than one outcome can lead to confusion during implementation. Moreover, underlying contradictions exist between watershed management (requiring holistic approaches involving all land users) and poverty reduction (requiring focus on specific community members). The resulting Project comprised disparate, geographically scattered interventions that tended to lack a holistic approach to watershed management and excluded some land uses (tea estates, roads and footpaths) that contribute significantly to erosion. The planned multi-agency coordination was ambitious and highly relevant but ultimately depended for sustainability on the Government establishing an effective overall implementation agency. 10. Some minor changes were incorporated into the project design as a result of experiences gained during implementation, the midterm review (MTR) in 2001, or subsequent missions. These changes, most of which could not have been envisaged at appraisal, were:
(i) The project area was expanded to include two additional divisional secretary (DS) divisions (Ella and Ratnapura) in the Kalu Ganga and Kirindi Oya watersheds, where critical areas needed attention, thus extending coverage to 11 DS divisions from nine at appraisal. Likewise, soil conservation-oriented farming activities were extended to include all four upper watersheds, not just the Uma Oya, to cover marginal farmers in these areas. (ii) The report and recommendation to the President (RRP) envisaged NGO and CBO support for community mobilization, but the Project relied on directly recruited social mobilizers (SMs). These were local people trained as grassroots workers, who facilitated existing CBOs or formed new CBOs as local implementers and acted as the interface with IA staff. This was an appropriate approach, enhancing local capacities and avoiding conflicts that may have arisen if outside NGO staff had intermediated between communities and IAs. (ii) Fire protection activities (cut lines and the planting of fire resistant vegetation) were introduced at the MTR to protect forests, as was conversion planting to replace exotic with indigenous species to meet local needs and improve biodiversity. (iii) The soil conservation-oriented farming systems component was reorganized into on-farm activities (conservation and farming systems improvement) and off-farm soil conservation activities (mainly vegetative and physical erosion-control measures). This conformed better to the division of responsibilities of the IAs. (iii) On-farm irrigation improvement was introduced at the MTR as a pilot activity to offer opportunities for participatory learning from improved systems and their impacts on reducing runoff and silt loads. As dairy cattle formed an important part of the farming system, support was introduced to improve husbandry and production. Such activities were relevant and qualified under the “other innovative technical packages” included in the RRP. (iv) Pilot micro-watershed subprojects were approved following the Loan Review Mission in 2002 to demonstrate the benefits of a holistic watershed management approach to meet the needs of poor communities. Provincial watershed
8 ADB. 1998. Upper Watershed Management Project (Loan 1545-SRI(SF):PAM). Manila.
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management units (WMUs) were proposed to sustain the integrated approach. Such an approach, not specifically included at design, strengthened the Project. (vi) Landslide risks that precluded regularizing ownership for 200–300 households were identified at the MTR. These risks were not anticipated at appraisal. ADB sanctioned a new subcomponent for studies and the resettlement of two villages. These resettlement activities ceased in 2005 (para. 39). (vii) A loan extension of 6 months to December 2005 was agreed following the Loan Review Mission of October 2004, subject to an acceptable work plan focusing on activities that enhanced sustainability. B. Project Outputs 11. Achievements against outputs are reviewed in the project framework (Appendix 2) and are summarized in Appendix 11. Photographs are provided in Appendix 12. 1. Participatory Rehabilitation and Protection of Forests 12. Buffer zone plantations were created by CBOs to reduce pressure on protected forests. The RRP envisaged 4,000 ha, but the establishment of only 2,328 ha was achieved for lack of available land close enough to villages. Community members were reluctant to travel far to establish and maintain plantings, so activities at remote sites would have been unsustainable. The FD agreed to assume responsibility for some of the remote sites. Similarly, there was inadequate forestland for timber farms close to villages. The MTR reduced the target of 3,000 ha to 1,000 ha, with an unquantified number of small private farms of less than 5 ha. A total of 508 ha of plantations were established by groups of individuals. Full 25-year lease agreements, with benefit rights split 80/20% between beneficiaries and FD, have yet to be issued to all beneficiaries. A total of 18,789 home gardens were established by 2004, with an average size of 0.8 ha, exceeding the target of 15,000. 13. Demarcation, surveying, and permanent boundary marking of FD and DWLC reserve forests were achieved beyond the extents anticipated. The original target of 60 kilometers (km) was increased at the MTR to 600 km, and marking was achieved for 729 km. However, subsequent planting of trees, to permanently mark the boundaries, was achieved on only 257 km for lack of suitable maintenance. The MTR included 500 km of fire protection lines, but the Project completed 1,002 km. SD successfully mapped 408 km of stream bank reservation areas, against a target of 140 km, but had no mandate to access private lands. The target for roadside planting of trees was reduced at the MTR from 500 km to 50 km due to practical problems of interference with power lines and responsibility for maintenance; 85 km were planted. Tree planting was completed on 76 ha of public places (mainly schools), and trees are being maintained by communities. Conversion planting was achieved on 350 ha, with Pinus and Eucalyptus replaced by indigenous species to improve diversity. 2. Promotion of Conservation-Oriented Farming Systems 14. Farmers and CBOs responded well to this component (Appendix 6), and the MTR agreed to raise the target from 4,000 to 10,000 ha, incorporating both vegetative and mechanical erosion control measures. A total of 12,196 ha was achieved. Introduction of training in integrated pest management (IPM) and other conservation farming methods was slow to develop, and not until 2005 were potato and vegetable farmers adopting the techniques. Composting and reduced inorganic fertilizer use improved crop productivity, quality, and profitability. Farmers report being able to extend cropping seasons thanks to improved soil moisture. Latterly, post-harvest technology training was given and market linkages facilitated for the IPM farmers. A total of 188 improved irrigation and water distribution systems were
5 constructed by farmer groups, effectively reducing water wastage and improving water distribution, and far exceeding the target agreed at the MTR. A package of support for cattle production was achieved through CBOs, with supervision by Department of Animal Health & Production staff. Some 3,000 cattle sheds were constructed, 563 improved calves were distributed, milk-testing equipment was provided, and two farmer-managed collection centers were established. The productivity, quality, and sale price of milk were improved. Bee units numbering 6,427 were distributed along with training support to boost non-farm incomes but were not widely successful. The Project estimates that over 100,000 farmers directly or indirectly benefited from conservation farming activities. 15. Lack of land title is a major issue, affecting the security of many farmers. The Project identified 11,000 encroached plots, among which 7,588 were regularized with title allocated. The remaining plots could not be regularized, being within reserve forest or on land too steep for legal cultivation. The Land Use Policy Planning Division (LUPPD) prepared draft maps of landholdings in grama niladhari (local government officer) divisions of the Uma Oya catchment, which await formalization by the land commissioner. 16. Off-farm conservation measures included 346 km (87% of target) of structures built by CBOs, with guidance from Department of Agrarian Services and DS divisional technical staff, to slow runoff and reduce scouring. The MTR sanctioned improving 250 km of agro-roads and footpaths, which contribute significantly to soil erosion: 118 km were constructed by CBOs with supervision by DS division staff, reducing road and footpath erosion damage. The MTR approved support for re-vegetating 200 ha of degraded smallholder tea areas to reduce erosion. 3. Capacity-Building and Institutional Strengthening 17. The PMO was fully established by 1999, serving as the focal point for implementation, budgeting, procurement and reporting, and preparing quality progress reports. Key staff were recruited from Government agencies, with some initial delays. Two sub-offices were established under deputy project directors. SMs, field managers (FMs), and assistant field managers (AFMs) were engaged to strengthen the field activities of the IAs. The evolved structure (Appendix 3) reflects the practical implementation process, deviating slightly from the structure at appraisal. Assisted by consultants, the PMO developed an implementation plan and established coordination committees nationally (the NCC), provincially (PCCs), and in DS divisions (FACs). These became active forums that developed the capacity of provincial IA staff. Good interchange occurred between FACs and PCCs. Through the committees, the PMO facilitated a process of bottom-up negotiation to develop annual action plans. 18. Pressure to meet field targets diverted attention from training, which was slow to commence. Training comprised a major task for the PMO, for which it was neither designed nor equipped. SM training was successfully contracted out. Farmer training was arranged by the PMO and IAs, who trained SMs, FMs, AFMs, and lead farmers as trainers who subsequently provided effective training to other farmers. In-country technical training for IA staff was arranged by the PMO based on specific demands. From 1999, overseas training was organized for 105 project-related people. This training was not initially approved (the RRP specified in- country training) but was later sanctioned by ADB. 19. A total of 384 training events was organized (Appendix 5) involving 17,445 people. Training reached a peak in 2002, with 87 events involving 5,000 participants. The PMO also organized 87 workshops and seminars involving 500 people. Project data do not distinguish training given to farmers, IA staff, or project staff. Moreover, many individuals attended more than one training event. Table A5.2 shows that 547 leader farmers were trained from the principal farming areas (Central and Uva), of which 32% were women. The Project estimates
6 that ultimately more than 80,000 farmers, including leader farmers in Sabaragamuwa, received adequate training, with in-village training provided by project staff and leader farmers. 20. Consultants drafted the National Watershed Management Policy (NWMP). This was completed in early 2002, submitted to Government in 2003, and approved by Cabinet in 2004. It now awaits preparation of a bill for Parliament. The PMO organized the (i) successful media and publicity program to promote awareness of watershed management, involving schools, TV, radio, print media, and pamphlets (Appendix 6); (ii) production of maps of project interventions and landholdings via Natural Resource Management Services (NRMS) and LUPPD; (iii) implementation by resource-poor communities of five of the eight proposed pilot subprojects to demonstrate holistic watershed management; (iv) preparation of resettlement plans for 3 of 10 sites before this activity was terminated (para. 39); and (v) assistance to provincial councils for developing plans for WMUs (which could not be effected before project completion). C. Project Costs
21. At appraisal the total project cost was estimated at $23.7 million, comprising a $16.6 million ADB loan, $6.0 million in borrower financing, and $1.1 million in beneficiary contributions. At the request of the Government, $2.0 million of project loan savings were cancelled and reallocated to Loan 1649-SRI(SF)9 Actual total expenditure at completion was $17.5 million, including an estimated $1.1 million beneficiary contributions. 22. Actual annual and total expenditures of loan funds (Appendix 8) show overall utilization at 69.1% of the appraisal estimate and 74.6% of the revised budget. All foreign exchange budgets were under-spent. Minor overruns on civil works and extension and demonstration categories were covered by other categories. Loan expenditure was significantly below appraisal estimates for training (16%); vehicles (36%); and survey, design, and mapping (45%), and below the revised budget for resettlement (0.4%). Analyzing costs by component is difficult because the ADB accounting system records expenditure only by category. Estimated component-wise total costs show under-spending on component A: forestry (76%) and component B: conservation farming (81%), compared with revised budgets, but the intended project outputs were largely achieved. 23. The under-spending is partly explained by the 73% change in the exchange rate10, greater than anticipated community contributions, and over-budgeting at appraisal. The discontinuation of resettlement activities (para. 39) accounts for the minimal spending under this head. The low spending on training resulted from all in-field training being charged under field budgets (components A and B), because this was a provincial responsibility undertaken by devolved IAs. Only training for project staff, specific technical training for IA staff, and overseas training were deducted from the PMO training budget. The EIRR of 39.7% estimated at completion was significantly higher than the 22% predicted at appraisal. Higher disbursements to more directly productive components such as conservation farming, instead of with long- gestation forestry activities, allowed the early realization of benefits. D. Disbursements
24. Disbursement procedures were effective. MoE reported expenditure monthly, according to the treasury categories: reimbursable foreign aid (RFA) and counterpart funds as required by the Government. The RFA portion was claimed for reimbursement from ADB as statements of
9 October 2004, for flood relief work (ADB. 1998. Report and Recommendation of the President to the Board of Directors on a Proposed Loan and a Technical Assistance Grant to the Democratic Socialist Republic of Sri Lanka for the Road Network Improvement Project. Manila [approved on 8 December].) 10 SLRs58.40 to $1.00 at appraisal to SLRs101.00 at completion.
7 expenditure. Though ADB provided an imprest account not exceeding the equivalent of SDR 370,000 for reimbursing expenditures of less than $50,000, it was used only once, in 2002, and the imprest account turnover ratio was zero throughout the project period. Instead, the Project used Government RFA funds for pre-financing ADB’s portion of expenditure. This fund-flow arrangement was considered optimal11 given the decentralized nature of the Project, which required advancing funds to four IAs (three provincial councils and the FD at MoE). 25. Project accounts were maintained according to the Government system and subjected to audit by the Auditor General’s Department. ADB and Government financial records were maintained on the category classification as in Schedule 3 of the Loan Agreement. Initially, accounts prepared by the Project did not conform to ADB procedures, but this was rectified later. E. Project Schedule
26. The original schedule (Table A9.1) made no provision for preparation, planning, or training, though it was a complex project with many IAs (some devolved to provinces and others not) and a large training element. Initial pressure to meet physical and financial targets delayed training, full adoption of participatory approaches, and monitoring activities. Table A9.2 shows the actual schedule, including activities introduced at the MTR and the timing of ADB missions. F. Implementation Arrangements
27. The PMO adopted the principles of the RRP design and evolved a practical organizational structure (Appendix 3) that was successful in delivering project outputs and outcomes. The only significant changes to the PMO structure were to (i) take direct responsibility for employing SMs, who effectively operated in communities; (ii) facilitate farmer training in the absence of suitable agencies; and (iii) recruit FMs and AFMs to strengthen the implementation of off-farm conservation work, the latter reporting to the IAs. 28. The coordination committees at the national, provincial, and divisional levels, as designed, were effective in coordinating multi-stakeholder activities and in strengthening IA capacities, but interaction between the PCCs and the NCC was weak in later years. Grama niladharis were co-opted to committees, but more grassroots involvement could have been achieved by formal involvement. G. Conditions and Covenants
29. The Government complied with most of the covenants and schedules (Appendix 10) but complied late in many cases due to a slow start-up. No covenants were modified, suspended, or waived. Schedule 6, para. 19 stipulated that a regulation to prohibit cultivation of steep slopes be gazetted and adopted within the first year. The new soil conservation act drafted in 2004 is still under review by the legal draftsmen. Meanwhile, unrelated to the Project, the minister of environment approved new regulations under the National Environmental Act (1980), restricting the conversion of perennial crops to annual crops on steep slopes (>70%), which will be gazetted soon. Schedule 6, para. 20 required the preparation and implementation of a draft framework to regularize land tenure and regulate the use of critical watersheds. The land commissioner advised that necessary legislation was already available, so the framework was developed on the basis of existing regulations. The delays have not materially affected project outcomes. The Government complied with the financial covenants.
11 ADB. 2004. Loan Disbursement Mission Back-to-Office Report of 29 November 2004. Manila.
8
H. Consultant Recruitment and Procurement
30. A consultant team was engaged12 under the loan according to ADB’s Guidelines on the Use of Consultants. Recruitment was efficiently handled by the PMO and ADB. Two contract variations were negotiated13 to provide additional skills required by the Project. A total of 171 person-months of services were provided, 37 of which were international (36 at appraisal) and 134 domestic (114 at appraisal). The consultant team was fielded in November 1998, with intermittent inputs extending to project completion (Appendix 4). The PMO recruited some consultants directly (18 person-months), but this was later rectified by ADB14. 31. Procurement of equipment and vehicles adhered to ADB international shopping procedures. The RRP envisaged recruiting NGOs to assist in carrying out community mobilization, but the Project relied on direct recruitment of local individuals, who were trained as SMs by contracted agencies15. The PMO undertook farmer training with IA staff, being unable to identify a suitable agency. The PMO was unsuccessful in recruiting private surveyors to undertake land surveys that the SD could not complete. NRMS of MASL was contracted to establish and monitor hydrological stations and prepare maps. I. Performance of Consultants, Contractors, and Suppliers
32. The consultants’ performance was satisfactory, although there were some delays in report submission. The consultants assisted in establishing the PMO, developing work plans, and building capacity in the IAs. A wide range of technical skills were deployed, as shown in Appendix 4. 33. Contractors were not used. The Project obtained treasury agreement to make payments direct to CBOs (up to SLRs1.0 million) to enable them to undertake minor field construction work. They contributed at least 20% of the costs as labor. National institutes provided high- quality training for the SMs and other field staff and specific technical training for IA staff. The vehicle suppliers performed well, and the PMO was very satisfied with the quality. 34. Hydrological monitoring by NRMS was carried out reasonably competently. Records were maintained for the MASL Welimada station at the main outlet of the upper Uma Oya. Two new stations were established at Perawela covering 50 ha and 1.0 ha catchments. Data were obtained for the former, but the low flows in the smaller catchment were impractical to measure, and it was abandoned. The lack of results did not affect physical outputs. Maps of project interventions were suitably prepared by NRMS. J. Performance of the Borrower and the Executing Agency
35. Performance was satisfactory. The MoE provided support to the PMO as and when needed and maintained continuity of PMO management. After a slow start, the MoE gained experience and understanding of the participatory, interdisciplinary approaches being developed by the Project. They appreciated that the forestry element was over-ambitious and accepted reallocation of resources to other components. The ministry supported the NWMP, steering it through Cabinet approval, and is endeavoring to have it internalized in practice. MoE has applied project lessons and processes to new environmental management programs. However, MoE could have been more proactive in supporting and monitoring the Project. Overall, the
12 Consultants were contracted from Norwegian Consortium for Development & Environment in a joint venture with Lanka Environment & Development Services. 13 Dated June 2002 and October 2005. 14 Loan Review Mission, ADB. 2004. Aide Memoire. Manila (19–29 October) 15 Institute for Participation in Development, and Rural Development Training & Research Institute, Colombo.
9
Project had minimal impact on capacity development in MoE, which devolved management to the PMO and implementation to line agencies. K. Performance of the Asian Development Bank
36. From 1998 to 2004, the Project was supervised from ADB Manila. From July 2004 onwards, supervision was delegated to the Sri Lanka Resident Mission (SLRM). A total of 14 missions were made during implementation (Appendix 9), but only six were project-specific. The EA and PMO were satisfied with the support given, particularly in the initial years, and also with the flexibility of ADB. The National Planning Department felt that approvals were delayed when administered from Manila and favored SLRM supervision. Disbursement of funds was efficiently managed, and there were no disagreements with the EA. ADB’s performance was satisfactory. 37. Changes in project officers (five over the project period) and gaps between review missions (2000 and 2003) affected continuity and efficiency of supervision. An example was the protracted deliberation over the proposed resettlement of residents of landslide-affected areas. 38. At the MTR in 2001, the Project identified a need to resettle 200–300 farm families whose lands could not be regularized because they were subject to landslide risks. After internal deliberation by ADB, and the initiation of several studies by the Project, a minor change in scope was approved in June 2004 (3 years after identification). This committed funds to plan and implement 2 of 10 resettlement plans through the PMO and to finance planning of the others areas subject to Government's assurance that it would implement them. A new category was added to the cost tables without amending the Loan Agreement. In July 2004, the Project was delegated to SLRM, mainly to provide the closer supervision needed for implementing the resettlement plans. In September 2004, the Government requested a 1 year extension to the Project but made no commitment to fund implementation of the remaining eight plans. 39. In October 2004, SLRM reviewed the practicalities of implementing the plans. MoE agreed that it lacked an institutional mechanism for implementation and that insufficient time remained under the Project. It was agreed to cease funding under the Project. The SLRM report was submitted to ADB Manila for interdepartmental comments. ADB’s Office of General Counsel queried whether ADB could cancel the resettlement activities, being of the view that all 10 plans should be implemented. By March 2005, ADB’s Management approval was sought to exclude resettlement activities by the Project on the grounds that the need did not arise from project activities and that initiating implementation at that late stage, without an identified implementing agency (none was prepared to take responsibility), would potentially create future problems. The PMO was asked to cease resettlement activities. Meanwhile, much field work had been done, and the expectations of the families concerned falsely raised. No action should have been authorized by ADB until government mechanisms and responsibility for implementation had been confirmed. 40. During the current Project Completion Report Mission, the Involuntary Resettlement Division of MoAD confirmed that their role is only to monitor the Resettlement Policy (2001) and that, usually, DS secretariats are responsible for resettling communities from hazardous areas.
III. EVALUATION OF PERFORMANCE
A. Relevance
41. At appraisal and completion, the Project was highly relevant. It was consistent with the Government’s policies on natural resource management as enshrined in the revised National Environmental Action Plan (1994), which stresses the importance of conservation and management of sensitive watershed areas. It conformed to the amended Soil Conservation Act
10
(1996), which recognizes the need for interagency cooperation and discourages farming in high hill areas. It also conformed to the Forestry Sector Master Plan16 (1995), which promotes integrated watershed management, empowerment of rural communities to protect and manage forests, developing agro-forestry home gardens, strengthening CBOs, and promoting forestry as a soil-conservation measure. Similarly, the Project is consistent with ADB’s Medium-Term Strategic Framework (1995–1998) and sectoral assistance policies by focusing on (i) improving the management of soil, water, and forest resources for sustainable development and (ii) improving access for the poor to productive assets. ADB’s policy on forestry also stresses the need for participatory approaches to sustain longer-term benefits. 42. The MTR introduced several changes (para. 10) in recognition of reality on the ground, which increased the Project’s relevance. B. Effectiveness in Achieving Outcome
43. The Project was effective. It had a slow start, largely due to the complex task of coordinating many IAs at different levels in three provinces. Momentum built up from 2001 onwards, following the MTR, with greater community involvement. It was largely effective in putting in place conservation measures and approaches that should lead to greater protection of the critical watersheds. Incomes of beneficiary marginal farmers were raised. The Project contributed to strengthening the capacities of a wide range of government agencies and individual staff, farmers and CBOs. It developed a highly competent cadre of SMs from local people (male and female) who provided an effective interface between beneficiaries and IAs and acted as trainers. The Project developed the NWMP. Most of the revised output targets were achieved or exceeded (Appendix 2) by end of the 6-month extension to December 2005. 44. The RRP classed the Project as primarily environmental and secondarily poverty reduction. Three outcomes were envisaged (para. 9), which presented a challenge. The Project had a complex and ambitious task in integrating holistic watershed management approaches with a focus on poverty reduction, covering a wide geographical area in three provinces, through multiple government agencies (some devolved, some not), community groups, and farmers. 45. Determining effectiveness was complicated by the lack of a comprehensive system to monitor and evaluate project benefits. A computer-based system was designed but not applied or adopted by the IAs, and no midterm socioeconomic assessment was made; the PMO relied on less formal means of monitoring and recruited consultants for final evaluations. Outcomes are discussed in Appendix 6. Ultimately, the Project achieved a range of outputs that, combined, successfully contribute to protecting identified critical watersheds and sustainably raising the incomes of marginal farmers and the landless. These were broadly divisible into forestry- and farming-related outputs. Importantly, they were accompanied by successful awareness-raising campaigns that generated a widespread public understanding of the importance of conservation and watershed management, especially among beneficiaries and children17. 46. Forestry-Related Outputs. CBOs’ tree planting in buffer zones and farmers’ creation of small timber farms and development of multipurpose home gardens contributed to outcomes. These outputs effectively encouraged beneficiaries’ sense of ownership, favoring sustainability and greater fire protection and enabling the sharing of products. Trees planted in public places are being maintained by communities. Tree survival rates are high, and community ownership is
16 The master plan was the outcome of the Forest Sector Development Project funded by Finland, United Kingdom, Food and Agriculture Organization, and World Bank, 1991–1996. 17 Material was published under the UWMP name, without details of the IAs involved. After project closure, people did not know how to seek information, and even the UWMP website was closed. See Appendix 6.
11 strong18. As the trees mature, pressure on the forests should be reduced. However, scarcity of land near villages kept buffer zone and timber farm planting below envisaged targets. In some areas where the FD established timber farms and buffer zones through direct labor, there will be no community ownership. Demarcation of forest boundaries will help to deter future encroachment on critical areas. Although forest plantings failed to meet targets, multipurpose home gardens exceeded targets (15,000 ha compared with 1,900 ha). Most are relatively small plots scattered over the critical watersheds, involving some 33,000 families. Farmer networking should extend the impacts to a wider area, thus contributing to the project impact. 47. Farming-Related Outputs. These include reductions in erosion and runoff through on- farm vegetative and physical control measures, and efficient water distribution, implemented by farmer organizations, CBOs, and individual beneficiaries. High adoption rates were recorded, reaching 100%19. Farmers report improved soil moisture regimes and longer growing seasons. Adoption of other conservation farming practices (composting, IPM, etc.) were slow to develop because the PMO concentrated on achieving physical and financial targets in the initial years. Engaging farmers in new activities is a slow process, but by the end of the Project they were being appreciated and adopted, but not on a wide scale. Some 100,000 farm families participated, mainly in the Uma Oya watershed. Regularizing landholdings will provide greater security to owners, encouraging investment in conservation measures. Ensuring that farmers understand the concepts behind conservation measures should ensure that they are maintained. 48. Parallel construction of off-farm conservation measures has reduced scouring of drainage lines and footpaths, reducing runoff and erosion. Hydrological measurements in 1999– 2005 indicate a downward trend in the silt load of the upper Uma Oya, but the results are difficult to attribute to project activities without details of antecedent rainfall and other erosion- inducing factors (e.g., road construction) in the sub-watershed and in the absence of a control. Nevertheless, farmers themselves are convinced of improved water availability, seasonality, and quality. Two of the community-based pilot subprojects were not fully relevant, but the others successfully engaged marginal farmers in developing holistic watershed approaches. The outputs overall have contributed significantly to the outcomes and should contribute to the goals. 49. Poverty Reduction Outputs. The Project effectively targeted the intended poor marginal farmers (Appendix 6). Most of the forestry- and farming-related outputs contributed to poverty reduction. This resulted from short-term employment through the Project but also from a 33% improvement in farm productivity and reduced costs from fertilizer and pesticide inputs. Some belated attempts were made to improve post-harvest methods and market linkages to add value to harvests. Planting trees for fruit and timber will bring longer-term income gains. Villagers reported that they now feel able to approach Government staff for assistance. Overall, beneficiary incomes increased due to Project activities (Appendix 6). 50. Institutional Strengthening Outputs. The institutional capacity of the staff of the numerous agencies involved has been strengthened through active coordination committees, especially in terms of integrating IA approaches to watershed management. The involvement of SMs at the interface created a closer involvement by Government staff with communities and CBOs. Line agency and district and divisional technical staff have assimilated a new, integrated method of working and gained new skills, enhancing a previously weak extension service. Frequent transfers of staff may dilute the effort in project areas but should result in a wider spread of positive attitudes. However, translating attitudes into institutional behavior will require an effective institutional structure and budget to enable IA staff to continue the processes.
18 Hitinayake, G. 2006. Impacts of Project Activities on Rehabilitation of Natural Resource Base: Evaluation Report. UWMP, MoE, Battaramulla. 19 Wickramasinghe, A. 2006. Socio-economic Impacts of the Upper Watershed Management Project: Evaluation Report. UWMP, MoE, Battaramulla. Also, see Appendix 6 of this Project Completion Mission Report
12
Without an effective driving force, approaches promoted by projects will remain add-ons within the Government system. Attempts to form provincial WMUs were ultimately unsuccessful. The NWMP, drafted by the Project and approved by Cabinet, provides an appropriate approach but still awaits implementation by Government. Moreover, the devolution policy means the NWMP will need to have a strong multi-institutional powerbase if it is to have executive influence over provincial councils. As many ministries are involved, no individual ministry can take the lead. An option could be a higher-level committee reporting to the President, which would be able to coordinate actions by the ministries and provincial councils concerned. Overall, the project output has contributed to, but not fully achieved, the outcome. 51. Outcome to Impact. The actual outcome of the Project was a series of processes that should lead to wider soil conservation, environmental protection, and watershed management, thereby contributing to meeting the impact of protecting the environment and reducing poverty in the critical watersheds of the south-central region of Sri Lanka. The lack of an overall Government institutional mechanism will limit this contribution.
C. Efficiency in Achieving Outcome and Outputs
52. The Project was highly efficient. The high EIRR of 39.7% (Appendix 7), greatly exceeding the EIRR of 22% at appraisal, is based on analyses of anticipated financial returns from forestry and agricultural outputs. Parity rates of SLRs/$ = 104.0 (58.4 at appraisal) were adopted, applying a standard conversion factor of 0.9 to derive economic prices. The higher EIRR is explained by the proportionate increase in conservation-oriented farming, which provides higher net present values than forestry activities. 53. The project processes of community participation, facilitated by SMs, increased efficiency. Community involvement in planning, implementing, managing, and maintaining field activities created greater transparency and ownership. This led to greater efficiency in procuring materials, construction, and ensuring plantation quality. Beneficiary contributions exceeded the 20% planned, as Government norms were lower than envisaged, the balance being met by voluntary labor. EA efficiency was impaired by changes in ministerial responsibility: At preparation, the Ministry of Agriculture, Lands, and Forestry was the EA. By appraisal, forestry had moved to the Ministry of Forestry and Environment and, later, to the Ministry of Environment and Natural Resources, then to MoE, which became the ultimate EA. In reality, most project activities were in agriculture, which is a devolved topic, and efficiency was enhanced provincially by active cooperation among IAs at all levels, strengthened by continuity of management in the PMO.
D. Preliminary Assessment of Sustainability
54. The sustainability of project interventions is less likely and will depend largely on the efforts of the beneficiaries. Many individual farmers and farmers’ organizations have gained understanding of the purpose and benefits, in terms of productivity, of conservation farming, which should motivate them to sustain the new systems. They now have confidence to approach IAs for assistance, encouraging demand-led support. Very few instances of replication of processes have been observed, but some beneficiary farmers are now investing their own money in soil conservation. The Department of Animal Health & Production reports that Project- sponsored livestock activities are still active. Off-farm conservation activities are unlikely to be fully maintained for lack of Government budgets and low ownership by communities. 55. The home gardens are likely to be sustained because the trees are privately owned, but the buffer zone CBOs will need FD support to ensure their rights to non-timber forest products. Similarly, FD must respect the leases of timber farmers and advise on maintenance regimes if
13 they are to sustain their plots. Community participation in forestry activities was weak in some areas, and sustainability is less assured (Appendix 6). Without facilitation by SMs and the stimulus of short-term employment by the Project, the sustainability of CBOs is doubtful. Most were registered with the PMO but few with the DS secretariats, so they lack institutional strength. The subsidy-dependency syndrome is widespread. Allowing local ownership of CBO funds and strengthening revolving funds through credit arrangements could have enhanced the sustainability of CBOs (Appendix 6). 56. The new integrated working practices and attitudes gained by staff of the IAs will spread but will be translated into behavior only if the NWMP is internalized within the Government. MoE needs to promote effective implementation of the NWMP. E. Impact
57. The Project addressed the environmental and social issues noted at appraisal. Overall, environmental impacts have been positive. Increased tree cover, reduced fire damage to forests, and lessened pressure on forest resources will take time to emerge. Marking forest and stream reservations should deter encroachment. Using indigenous tree species enhanced biodiversity, and some conversion planting of Eucalyptus and Pinus species was achieved. The FD included some exotic trees (Acacia auriculaformis, Tectona, Khaya sp) in buffer zones and timber farms because they are faster growing than local trees. 58. Reduced soil losses through on-farm and off-farm erosion-control measures, and reductions in pesticide and inorganic fertilizer use, are beneficial outcomes. Beneficiaries reported improved incomes due to better moisture regimes and greater cultivable area. Better moisture retention improved the overall hydrological balance but sometimes brought complaints from downstream communities who claimed consequent reductions in water availability. Hydrological measurements at Welimada suggest a downward trend in the silt load of the upper Uma Oya catchment, but the data for the Perawela micro-watershed cover only 4 years, which is insufficient for determining project impacts on runoff and sediment. 59. Women were the majority members of CBOs and 50% of the SMs were female. Water availability was improved in some poor villages. Incomes were raised in the short term by employment and in the longer term by greater farm productivity. Tree productivity will take longer to realize. Farmers and the wider public are now aware of the importance of conservation farming through successful publicity campaigns. Regularizing land tenure provided security and incentive to invest in land, but families identified for resettlement had expectations falsely raised. 60. Wider unquantifiable benefits of the Project should contribute to (i) reduced siltation in the Rantambe Reservoir and others (although this will be affected by erosion induced by other activities, such as construction) and (ii) reduced flooding in the lower parts of the watershed.
IV. OVERALL ASSESSMENT AND RECOMMENDATIONS
A. Overall Assessment
61. The overall performance rating for the Project was successful (Appendix 1). It was relevant to the development policies of the Government and ADB. It was implemented largely as conceived, with only minor changes to improve the outcomes (e.g., community mobilization by PMO-recruited SMs; expanded target area; the introduction of community-based micro- watershed special projects; and the inclusion of minor livestock, irrigation, and income- generating activities). The Project was well managed through the PMO, which was aided by high continuity of project direction. Most of the intended physical objectives were met. Forest- related targets could not be fully realized for lack of land and were reduced, with compensating
14 increases in conservation-oriented farming. The cadre of SMs facilitated participation by beneficiaries, enhancing local ownership of project activities and creating transparency within communities. Most CBOs became dormant after project completion, but a few remain active. 62. Success was achieved in fostering an interdisciplinary approach at provincial, district, and divisional levels, by establishing PCCs and FACs. These provided effective forums for coordinating the activities of the wide range of agencies involved in watershed management and avoided duplication of effort. The attitude of IA staff, and of many community members, towards integrated watershed management has changed, but in the absence of a permanent coordinating institution, this has yet to be translated fully into behavior in terms of integrated programs. The future sustainability of the approach and processes awaits Government implementation of the NWMP successfully developed by the Project. 63. There was a positive impact on the environment through reduced soil erosion, both on- farm and off. Reductions in pesticide and fertilizer usage were successfully initiated through IPM methods but reached only 62 farms by project completion. Improved tree cover, including non- forest planting, and reduced fire damage in forest areas reduced pressure on the upper catchments. Widespread awareness of watershed management among communities, achieved through successful project publicity campaigns, will have lasting environmental benefits. 64. High quality of progress reporting was maintained. Performance monitoring and evaluation systems were established by the consultants, but baseline and regular monitoring were not carried out as planned. Evaluation reports and the Government Project Completion Report were comprehensive. 65. Financial disbursements were lower than envisaged in the RRP due to exchange rate changes, initial over-budgeting, and higher-than-expected community contributions. The EIRR at completion was 39.7% (Appendix 7), well above the EIRR of 22.0% at appraisal. B. Lessons
66. The following important lessons were learned: (i) Project frameworks need to be dynamic, adopt standard procedures20, and be constantly reviewed if they are to serve monitoring and evaluation needs. The RRP framework (Appendix 2) was weak and neither used nor updated by the Project. More than one outcome leads to confusion during implementation. (ii) The Project should have involved all land users, as required by a holistic approach to watershed management. Tea estates were excluded despite their contribution to soil erosion. the Ministry of Plantation Industries participated in the NCC, but the Project should have included degraded tea estates. (iii) Translating policy into practice takes longer than the duration of a project. The NWMP21 has yet to be internalized within government. Proposals to establish provincial WMUs to continue the project approach, although welcomed at local level, failed to materialize for lack of an overall institutional support agency. (iv) A high degree of local community participation and contribution was achieved, facilitated by the SMs. Directly engaging SMs via the PMO as the interface between communities and IAs was successful but led to some disagreements with the FD. CBOs were successful while project inputs were available but most are now dormant. Sustainability could have been increased by focusing on
20 ADB. 2006. Guidelines for Preparing a Design and Monitoring Framework. Manila. 21 Ministry of Environment. 2004. National Watershed Management Policy. Battaramulla.
15
existing CBOs and registering new ones with the DS divisions, and by giving them full responsibility for use of their funds. The subsidy-dependent syndrome that remains engrained among beneficiaries will need to be reversed to self reliance if participatory approaches are to become truly self-sustaining. (v) Given the major task of establishing coordination among many IAs, devolved and not, an initial 12-month planning and preparation period should have been included. Pressure to commence field activities and meet targets adversely affected start-up operations and training. (vi) Systems to monitor and evaluate project benefits should be built into the IAs’ systems. The PMO system was weak and has not been continued. (vii) Management through a PMO engendered departmental independence and facilitated coordination of multiple IAs, but the stimulus ceased on closure.
C. Recommendations
1. Project Related
67. Future Monitoring. FD should continue to monitor and support the forestry activities. MASL should continue sediment monitoring at Welimada. 68. Covenants. MoAD needs to expedite approval of the new Soil Conservation Act. 69. Further Action or Follow-Up. The MoE should take the initiative to (i) implement the NWMP under a suitable senior committee, (ii) ensure that FD contracts conforming to RRP recommendations are issued to all concerned beneficiary timber farmers by December 2006, and (iii) reactivate elements of the successful publicity campaign. The provincial councils should reactivate the PCCs to coordinate watershed activities, and the provincial departments of agriculture should replicate the Project’s IPM approaches widely. 70. Additional Assistance. None is required. 71. Timing of the Project Performance Evaluation Report. The Project Performance Evaluation Report should be delayed to 2010 to allow better assessment of tree survival rates.
2. General
72. Recommendations for future projects include the following: (i) ADB needs to encourage EAs to actively use project frameworks throughout a project as aids to planning, monitoring, and evaluation. (ii) EAs should adopt a more proactive approach, appointing an officer to liaise with the PMO and ADB and to undertake reviews on behalf of the EA. (iii) ADB should record disbursements by “project Component” as well as by “category” to clarify the efficiency of actual implementation activities. (iv) ADB should devolve supervision of complex participatory projects to the resident mission at an early stage to afford closer and consistent local support. (v) ADB should incorporate initial preparation time in project design and allow adequate time for any required changes in legislation. (vi) The terms of reference for consultant team leaders should include provision for a brief terminal report that synthesizes the team’s activities and experiences.
16 Appendix 1
OVERALL ASSESSMENT
SRI: (SF) 1545 Upper Watershed Management Project
Weight Rating Rating Criterion Definition (%) Description Value 1. Relevance 20 Relevance is the consistency of a Highly relevant 3 project’s impact and outcome with Relevant 2 the government’s development Partly relevant 1 strategy, the Asian Development Irrelevant 0 Bank’s lending strategy for the country, and the Asian Development Bank’s strategic objectives at the time of approval and evaluation, as well as the adequacy of the design. 2. Effectiveness 30 Effectiveness describes the Highly effective 3 extent to which the outcome, as Effective 2 specified in the design and Less effective 1 monitoring framework, either as Ineffective 0 agreed at approval or as subsequently modified, has been achieved. 3. Efficiency 30 Efficiency describes, ex post, how Highly efficient 3 economically resources have Efficient 2 been converted to results, Less efficient 1 measured by the economic Inefficient 0 internal rate of return, or cost effectiveness, of the investment or other indicators and considering the resilience to risk of the net benefit flows over time. 4. Sustainability 20 Sustainability considers the Highly sustainable 3 likelihood that human, Likely 2 institutional, financial, and other Less likely 1 resources are sufficient to Unlikely 0 maintain the outcome over its economic life. Overall 100 (Score of 1.6 – 2.7 = Successful) Successful 2.3 Assessment Source: Project Completion Review Mission
PROJECT FRAMEWORK
Design Summary Performance Targets/Indicators Achievements Assumptions and Risks A. Impact 1. Protect the Critical watersheds in the south- Positive attitudes should encourage • A multidisciplinary, environment. central region of the country (Uma expansion of project interventions to the wider participatory method of Oya, Walawe Ganga, Kirindi Oya, south-central region. The national policy on integrated watershed and Kalu Ganga) protected from watershed management, yet to be management is fully accepted soil erosion and deforestation by implemented by the Government, should by all agencies concerned. 2005. facilitate this wider coverage. • The Government is committed 2. Reduce poverty. The incomes of project Incomes of project beneficiaries increased to the medium- and long-term beneficiaries are raised above the through project activities in farm and forest- water management policy. poverty level through increased related interventions should continue. Some agricultural productivity and replication by non-project farmers has been employment generation by 2010. reported. B. Outcome 1. Protect critical • Uma Oya, Walawe Ganga, Positive action has been taken to tackle • There is close coordination watersheds. Kirindi Oya, and Kalu Ganga degradation in critical watersheds of the among the implementing watersheds are protected from project area. The line agency staff involved at agencies. soil erosion and deforestation the divisional secretary (DS) division, district • Community-based by 2005. and province level understand the benefits of organizations (CBOs) and integrated action, and many community nongovernment organizations members now appreciate the need for (NGOs) participate in Project environmental protection. The impact on implementation.
rehabilitating the natural resource base has
22 • Good working relations are
been favorable. Preliminary measurements established between the indicate progress in reducing sediment loads
23 project director and the
and increasing base flows in the Uma Oya. implementing agencies (IAs). 2. Improve the incomes Positive impacts on incomes of beneficiaries
• Incomes of vegetable and 24 • Institutional capability of the of project beneficiaries. potato farmers improved by have been reported. Farmers state that
executing and implementing $315 per farm by 2005. yields have increased by 33% due to greater
Append 22 Hitinayake, G. 2006. Impacts of Project Activities on Rehabilitation of Natural Resource Base: Evaluation Report. Battaramulla: Ministry of Environment. 23 Ministry of Environment. 2006. Overall Progress Report for 2005. See para. 2.19. This relates to only the main outlet (Welimada): data for the Perewela ix
micro-watershed station not available. 2 17
18 Appe Design Summary Performance Targets/Indicators Achievements Assumptions and Risks ndix 2 • Incomes of landless and other availability of moisture resulting from adoption agencies is adequate to of conservation farming practices, which are implement the Project on
beneficiaries improved through creation of reflected in higher incomes. Concurrent schedule. employment by 2005. expansion of cultivated area is estimated at • Communities along forest 8%. Limited numbers of farmers (62) fringe participate in project benefited by adopting integrated pest implementation. management (IPM). The $315 annual income increase for vegetable farmers was unrealistic, given that average per capita gross domestic product was only $850 at appraisal. The actual increase over the period is probably around 48% (Appendix 6). The short-term employment opportunities provided valuable cash incomes to poor communities. 3. Strengthen • Capacity-building of The institutional capacity of the staff of • There is close coordination institutional capacity and institutions and agencies numerous agencies involved has been among the consultants and facilitate the concerned strengthened through active coordination the Project Management establishment of a • Medium- to long-term committees, especially in terms of integrated Office (PMO). medium- to long-term watershed management policy approaches to watershed management. watershed management drafted by the Government in Involvement of social mobilizers (SMs) as the policy. 1999 and implemented in interface created a closer involvement with 2000. communities and CBOs. Frequent transfers of IA staff may dilute the effort in the Project areas but should result in a wider spread of attitudes. Translating positive attitudes into institutional behavior will require an effective institutional structure. This could be achieved by the National Watershed Management Policy (NWMP), which was drafted by the Project and approved by Cabinet in 2004 but awaits full implementation by Government. C. Outputs 1. Component A. Participatory Rehabilitation and Protection of Forests a. Establish buffer 4000 ha of buffer zones A total of 2,328 ha (58%) have been • CBOs and NGOs cooperate
24 Wickramasinghe, A. 2006. Socio-economic Impacts of the Upper Watershed Management Project: Evaluation Report. Battaramulla: Ministry of Environment.
Design Summary Performance Targets/Indicators Achievements Assumptions and Risks zones in the established by Forest Department established. The low achievement rate closely with PMO in project Government (FD) in the two watersheds by reflected the lack of available land close implementation. forestland of Walawe 2005. enough to villages. Community members • There is an adequate Ganga and Kalu were reluctant to travel the long distances to incentive system to enable Ganga watersheds. establish and maintain plantings. Some of the project beneficiaries to activity was taken on by the FD by direct participate in the Project. labor. b. Establish 60 km of boundaries marked by The original target was revised at the midterm boundaries of upper Department of Wildlife review (MTR) to 600 km. Boundary watersheds and Peak Conservation for the Peak demarcation, surveying, and marking was Wilderness Wilderness Sanctuary, and about achieved for 729 km (122%) within FD and Sanctuary. 300 km of boundaries marked for Department of Wild Life Conservation (DWLC) other forest lands by 2000. reserve forests by 2003. Subsequent planting of trees to permanently mark the boundaries was under-achieved, with only 257 km (43%) planted. The MTR included 500 km of fire protection lines; the achievement was 1,002 km (200%). c. Establish small About 12,000 timber farms, each At the MTR, the target of 3,000 ha (12,000 x timber farms on of about 0.25 ha, established by 0.25) was reduced for lack of available land Government land. farmers on a long-term, 25-year close enough to villages to 1,000 ha, plus an
lease by 2005. unquantified number of private farms and 200
ha of smallholder tea estate conservation
(included under component B). An area of 508
ha was established (50% of MTR target) by
2004. Full 25-year lease agreements, with benefit rights at 80/20%, have yet to be issued
by FD to all beneficiaries.
d. Establish About 15,000 multipurpose home A total of 18,789 (125%) home gardens were
multipurpose home gardens, each about 0.1 ha, supported by 2004, with average size of 0.8
gardens on farmers’ established by farmers by 2005. ha, representing 15,000 ha, or much more lands. than the 1,900 ha of 0.1 ha plots envisaged.
Other outputs to improve the environment were not shown in the Project Framework in the report and Append recommendation of the President (RRP), but were included, or formalized, at the MTR (2001). These additional outputs have been included by the Project Completion Report (PCR) Mission. ix
• Mark stream bank 140 km of stream reservation 408 km (291%) were surveyed and marked by 2 reservations. mapping Survey Department (SD), which had no 19
20 Appe Design Summary Performance Targets/Indicators Achievements Assumptions and Risks ndix 2 mandate to access private lands. Some trees were planted to delineate boundaries.
• Establish trees on 500 km of roadside planting Practical problems in the field (utility services roadsides. and maintenance) restricted planting. The 500 km envisaged in the RRP was reduced to 50 km at MTR; 85 km (170%) was achieved. • Establish tree 100 ha tree planting in public 76 ha (76%) planted mainly at schools, cover in public places temples, etc. and maintained by communities. places. • Enrich the diversity 600 ha conversion planting to 350 ha (58%) of Pinus and Eucalyptus of forests. replace exotic species with replaced by indigenous species. indigenous ones • Establish fire 500 km established A total length of 1,002 km (200%) was cut and protection lines. maintained. 2. Component B. Promotion of Conservation-Oriented Farming Systems. a. Construct erosion- 4,000 ha of vegetative erosion- There was good response from farmers. The • Extension services are control measures on control measures and 500 ha of MTR raised the target to 10,000 ha, effective in promoting vegetable and potato mechanical erosion-control incorporating vegetative and mechanical conservation-oriented farming farms in Uma Oya measures constructed by farmers measures. By 2005, 12,196 ha (122%) was systems. watershed. by 2005. achieved. Farmers report higher yields and • An adequate incentive system b. Promote adoption About 18,000 marginal farmers in extended cropping seasons from improved is available to enable of improved farming vegetable and potato growing soil moisture. Introduction of IPM and other beneficiaries to adopt soil and systems, including areas adopt improved farming conservation farming methods was slow to water conservation. IPM, among systems by 2005. develop. By 2005, IPM techniques had been vegetable and potato adopted by 62 potato farmers. Composting farmers. and reduced inorganic fertilizer use improved crop productivity, quality, and profitability. Some post-harvest technology training was given belatedly and market links facilitated. Over 100,000 farmers directly or indirectly benefited.25 Other outputs to improve farming systems and farmer incomes, and to reduce off-farm erosion, were not shown in the RRP Project Framework but were included, or formalized, at the MTR (2001). These additional outputs have been included by the PCR Mission.
Design Summary Performance Targets/Indicators Achievements Assumptions and Risks • Construct off-farm 400 km of gully protection and 346 km (87%) of structures constructed by erosion-control check dams constructed by CBOs, with guidance from Department of measures. CBOs. Agrarian Services and DS divisional technical staff, slowing runoff and reducing scouring. 250 km of agro-roads and 118 km (47%) constructed by CBOs with footpaths improved. supervision by DS division staff. This has effectively reduced roadside erosion. • Improve Sheds for 1,750 cattle A package of support for cattle production productivity of dairy Distribution of 470 improved was achieved through CBOs, with supervision cattle and farmer animals of Department of Animal Health & Production incomes. Support to milk quality and staff. 2,989 cattle sheds built, 563 cattle collection distributed, milk tester equipment and 2 farmer-managed collection centers Apiculture encouraged introduced, improving productivity, quality, and sale price of milk. 6,427 bee units were distributed, with training, to boost non-farm incomes. Pesticides damaged some colonies, but farmers in two DS divisions formed bee-keeping societies to promote their products.
• Improve efficiency 20 improved irrigation and/or 188 (940%) water tanks and systems were
and productivity of water supply schemes constructed by farmer groups from 2003 to
irrigation. implemented by CBOs. 2005, effectively reducing water wastage and
improving water distribution on-farm.
• Regularize land Land of relevant settlers mapped 11,000 encroached plots were identified and
title for title-less and regularized by title. 7,588 regularized, with cooperation of grama
farmers to provide niladharis, and title allocated by SD. The
security of tenure. remaining plots could not be regularized as
they were within reserve forests or on land too
steep for legal cultivation. Land Use Policy
Planning Division (LUPPD) prepared draft
1:10,000 and 1:15,000 scale geographic information services (GIS) maps of holdings in Append grama niladharis divisions of Uma Oya catchment (Badulla) for the Land 26 Commissioner. These remain to be plotted ix accurately by SD and formally approved. 2 21
22 Appe Design Summary Performance Targets/Indicators Achievements Assumptions and Risks ndix 2 • Monitor 3 recording stations established Natural Resources Management Services
hydrological in upper Uma Oya catchment. (NRMS) collected data from the Mahaweli characteristics and Authority of Sri Lanka’s Welimada station. generate data. Two stations were established at Perawela covering a micro-watershed (50 ha) and a mini-watershed (1 ha). The first two stations were monitored, but flows at the third were insufficient. • Establish a Provincial WMU established and Guidelines for the institutional framework of Provincial operational in Uva Province. WMUs were prepared in 2005,27 adhering to Watershed the NWMP. These were approved by Uva Management Unit Provincial Council and were under (WMU) to test the consideration by Central Province. By project NWMP. closure, no WMUs had been established. 3. Component C. Project Management and Institutional Strengthening. a. Establish and equip • Procurement of 18 utility Most of the equipment was procured in 1999. • Timely establishment of PMO PMO to implement vehicles, 46 motor cycles, and Vehicle purchases (96 motorcycles and 17 by the Government. project activities day other equipment completed by cars or pick-ups) were phased and completed to day. 1999. in 2002. • Hiring of needed contract staff The PMO and sub-offices were established and additional project staff and senior staff appointed in 1998 (Welimada completed by 1999. deputy project director posting was delayed to 2000). 60 SMs were recruited and trained, in the absence of suitable NGOs, and were fully operational by 2001. Out of the total of 35 contracted technical staff, 20 resigned in 2004 to join an attractive Government graduate scheme. 3 assistant field managers were engaged and assigned to strengthen DAD staff in the field in expectation that they would be absorbed at DS divisions, but this was not feasible. The SMs gained valuable skills. b. Engage a team of • A team of international Consultants recruited through Norwegian • The selected consultants were international and consultants (36 person- Consortium for Development & Environment competent and dedicated to domestic consultants months) and domestic in a joint venture with Lanka Environment & the Project. to assist in project consultants (114 person- Development Services. Key consultants implementation and months) fielded in 1998. commenced work in late 1998, others from strengthen the 1999 onwards. Inputs were intermittent
Design Summary Performance Targets/Indicators Achievements Assumptions and Risks capacity of IAs. (Appendix 4) to the end of the Project. Additional consultancy inputs were agreed by Asian Development Bank (ADB) in 2002 and 2005. The total inputs made were 37 international person-months and 134 domestic. c. Train project staff, • Train 560 project staff and The training programs (see Appendix 5) were • Trained staff are retained to NGOs, CBOs, and 18,000 farmers by 2000. slow to start, mainly because the PMO was work for the Project. key farmers. • 40 workshops and seminars diverted to meeting physical targets in the undertaken by 2005. field. SM training was contracted to an agency and completed in 2001. Training of farmers and IA staff was arranged mainly by the PMO and IAs. Training reached a peak in 2002 (87 events with 5,000 participants). Overall, 384 training events were organized involving 17,445 people. From the data available it is not possible to disaggregate farmer from staff training to compare with the targets (18,000 and 560, respectively).28 Training of SMs and leader farmers as trainers resulted in effective replication of skills training in the field. Ultimately, over 80,000 farmers received adequate training.
In addition, 87 (217%) workshops and
seminars were arranged (500 people).
105 Project-related people (senior officers, field officers, and farmers) were sent on
overseas training. Although the RRP specified
in-country training, this was approved by ADB.
Other outputs to strengthen institutional capacity were not shown in the RRP Project Framework but were
included, or formalized, at the MTR (2001). These additional outputs have been included by the PCR Mission. Draft prepared by end 1999. The draft was completed in early 2002, with • Draft the National
Watershed assistance from consultants. It was submitted Append Management Policy. to Government in 2003 29 and approved by Cabinet in 2004. An inter-ministerial
committee was formed. The policy now awaits ix preparation of a bill for Parliament, but MoE 2 needs to exert pressure. 23
24 Appe Design Summary Performance Targets/Indicators Achievements Assumptions and Risks ndix 2 • Raise awareness Production of pamphlets and A successful program was run, including
among wider public of other media material that (i) magazines, newsletters, and pamphlets; the concepts of the effectively impacts on audience (ii) radio programs; Project and watershed (iii) TV programs (e.g., documentaries); management. (iv) press releases; (v) exhibitions; and (vi) media workshops and forums. Strong impact was recorded.30 An interactive website was created in 2004 but was closed at the end of the Project. • Test and demonstrate 8 special pilot subprojects to be 5 pilot subprojects successfully implemented integrated, holistic developed by communities in the by resource-poor resident communities. Initial approaches to micro-watershed. evaluations show that the approaches should watershed be sustainable.31 management • Develop plans for Preparation of resettlement plans The PMO prepared plans for 3 sites, with resettling people from for 10 sites. consultant support. The resettlement program landslide hazard and studies were terminated in early 2005. areas.
D. Activities Inputs 1. Participatory $ 5.9 million Total Costs: $4.5 million • PMO is able to coordinate the Rehabilitation and activities of IAs effectively. Protection of Forests • There is effective coordination • Prepare 1:10,000 1: 5,000 scale maps were prepared by between FD and the maps. LUPPD for the Kalu Ganga and Walawe Department of Wild Life Ganga critical areas, using GIS. These have Conservation. been passed to FD. • Establish nurseries for Community forest nurseries commenced in tree seedlings. 2000, with support from FD. Fruit trees were procured from licensed private nurseries. • Identify critical areas Critical areas identified in 1999, completed in in the upper 2000, covering 9 DS divisions, later expanded
Design Summary Performance Targets/Indicators Achievements Assumptions and Risks watersheds. to 11. • Select social Initial 46 selected and recruited in 2000. mobilizers. • Organize and group Active group formation through SMs from project beneficiaries. 2001 onwards. By 2005, 247 CBOs (including farming CBOs) were formed and registered with PMO. • Provide extension Training commenced in 1999, reaching a training to the groups. peak in 2002 (Appendix 5). • Finalize long-term Leases between timber farm beneficiaries and leases with farmer FD have been drafted, but not all beneficiaries groups. had received them by mid-2006. • Distribute seedlings to Commenced in 1999. farmers. • Boundary marking in By 2001, the initial target had been reached. Peak Wilderness Additional marking was completed in 2004 in Sanctuary and forest other forest areas in Bambarabotuwa and areas. Rawana-ela. Establish buffer zones, Activity commenced in 1999 and ceased in
timber farms, and home 2004.
gardens.
2. Promotion of $ 8.6 million Total Costs: $ 7.0 million Conservation-Oriented
Farming Systems
• Prepare 1:10,000 1:10,000 and 1:15,000 scale maps of • Project beneficiaries are well maps. landholdings in Uva Province were prepared motivated to take erosion
by LUPPD and submitted to Land control measures on their Commissioner’s Office and SD in 2005. farms.
NRMC has also prepared GIS maps to show
locations of project interventions.
• Identify critical areas Critical areas identified in 1999, completed in in the upper 2000, covering 9 DS divisions, with 2 more Append watersheds. added later in Ella and Ratnapura. Initial 46 selected and recruited in 2000.
• Select social ix
mobilizers. 2 25
26 Appe Design Summary Performance Targets/Indicators Achievements Assumptions and Risks ndix 2 • Organize and group Active group formation through SMs from
project beneficiaries in 2001 onwards. By 2005, a total of 247 CBOs vegetable and potato were formed and registered across all project growing areas. areas, in addition to existing farmer organizations. • Provide extension. Extension services expanded from 2000 onwards. • Establish nurseries for Commenced from 2000. vegetative erosion- control measures. • Distribute seedlings. Distribution started in 2000. • Construct erosion- On-farm measures were commenced in 2000 control measures. and off-farm measures from 2001 onwards. Other activities that were not shown in the RRP Project Framework have been included by the PCR Mission. • Commission NRMS commissioned (1999) to establish and hydrological monitor 3 stations in upper Uma Oya monitoring catchment.
3. Project Management $ 4.3 million Total Costs: $4.6 million and Institutional Strengthening • Establish PMO and PMO fully established by March 1999 and all • The needed project staff are hire staff. staff at post by 2000. recruited in a timely manner. • Procure vehicles, Equipment procured during 1998–2002. • Trained staff are retained by motorcycles, and the agencies concerned to equipment. work for the Project. • Engage consultants. Consultants recruited in 1998, and additional consultants engaged with ADB approval. • Train project staff, Training program shown in Appendix 5. Many NGOs, CBOs, and left in 2004 to join a Government graduate key farmers. program. • Hold workshops and 500 workshops and seminars were held seminars on project (Appendix 5).
Design Summary Performance Targets/Indicators Achievements Assumptions and Risks implementation issues. • Undertake benchmark Benchmark surveys were delayed. socioeconomic Conservation farming surveys were surveys, midterm completed in 2001, but forestry surveys not survey, and final until 2003. Midterm socioeconomic survey survey at project was not undertaken. Evaluations of impacts completion. on socioeconomic and natural resource base completed by consultants in early 2006.32 Base Cost: $18.8 million Base Cost (*): $ 16.0 Contingencies and Service Charges: million Total: $ 4.9 million Service Charge: $ 0.4 million $23.7million Total: $ 16.4 million (*) Actual base cost expenditure includes some use of contingency but excludes an estimated $1.10 million beneficiary contribution. Note: 1. Despite evident design shortcomings in the original project framework (ADB. 1997. Report and Recommendation of the President to the Board of Directors on Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project, Manila. SRI 28162, approved in August 1997), the PCR has used the original framework for comparability but with suitable amendments: (i) “Achievements” replacing “Project Monitoring Mechanism,” (ii) headings have been changed to
conform to current terminology (goal = impact; purpose = outcome), (iii) date indicators have been adjusted (e.g., from “2004” to
“2005”) to reflect the delayed start (May 1998) and actual completion (December 2005), and (iv) several outputs listed in the RRP
but not shown in the original framework, or included later, have been added.
2. The RRP project framework was weak and neither used nor updated during implementation. Project frameworks need to be dynamic, adopt standard procedures, and be subject to constant review to serve planning, monitoring, and evaluation purposes. A
single impact (or goal) is preferable, such as ”Sound watershed management protection widely applied in the mid-south of the hill country by 2020,” excluding poverty reduction and relating to outcomes beyond the immediate project scope and period. Similarly,
one outcome is normal. The framework includes three outcomes: (i) protection of watersheds in critical areas, (ii) improving incomes of project beneficiaries, and (iii) institutional capacity strengthening (as defined, outcome (iii) is more correctly an output).
More than one outcome leads to confusion during implementation. The actual outcome was “Critical areas conserved and
protected through application of sound watershed management practices that sustainably enhance the environment, improve Append livelihoods of local marginal farmers, and indirectly benefit downstream users.” Sources: ADB. 1997. Report and Recommendation of the President to the Board of Directors on Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project, Manila. SRI 28162, approved in August 1997; and Project ix
Completion Review Mission 2
27
28
ORGANIZATIONAL STRUCTURE Appe
ndix 3 Figure A3.1: Structure at Appraisal (RRP)
Ministry of Forestry & Environment Secretary
Ministry of Agriculture & Lands National Coordination Committee Mahaweli Authority of Sri Department of Wildlife (NCC) Lanka Conservation
Consultants Department of Agriculture Project Management Office (PMO) Department of Forest (Director General) Project Director (Conservator of Forest)
N CBO/NGO Selection R Committee M Provincial Director Deputy Project Director Deputy Project Director C Agriculture (Welimada) (Balangoda) Additional Conservator Central, Uva and Sabaragamuva (Operations) provinces
Regional Coordination Committee (RCC) Provincial Deputy Directors DFO DFO DFO Nuwara Eliya Badulla Ratnapura Extension Officers/ Agricultural Instructors RFO RFO RFO
Field Action Committee Field Staff Field Staff Field Staff Field Staff
Beneficiaries
DFO = divisional forest officer, NRMC = Natural Resource Management Centre, RFO = range forest officer, CBO = community-based organization, NGO = non-governmentl organization. Note: Mahaweli Authoriy is responsible for hydrological monitoring. The Department of Wildlife Conservation is responsible for boundary marking in sanctuary areas. It is under the Ministry of Public Administration, Home Affairs and Plantation Industries.
Source: ADB. 1997. Report and Recommendation of the President to the Board of Directors on Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project, Manila. SRI 28162, approved in August 1997
Table A3.2: Actual Structure in 2005
ADB Manila (South Asia Agriculture and Environment Division) Ministry of Environment (MoE) ADB Resident Mission, Sri Lanka Executing Agency (EA)
Members of NCC Project Management Office ******************** National Coordination Committee Secretaries: MoAD, MPI. Project Director ******************** Implementing Agencies: Heads of: FD Secretary, MoE and DoA. Cooperating Agencies: Heads of DWLC, Survey Department (MoAD), Land Consultants Commissioner's Department, MASL. Heads of: ERD, NPD, DAS, DAP&H, LUPPD. Field Sub-office Welimada: Provincial Coordination Committees (3) Deputy Project ********************* Field Sub-office Director Chief Secretary Balangoda: (Central & Uva) Provincial and District Staff Deputy Project of PDoA, DAPH, FD, DAS, LC, Director Uva Province Central Province Sabaragamuwa SD (Sabaragamuwa) Province
Divisional Staff
of PDoA, DAPH, DAS, DS technical Field Field Field Field Field Action Committees (FACs)
staff, Manager Manager Manager Manager (1 in each of 11 divisions) FD; SMs, FMs; Farmers' Leaders (FM) Welimada ******************************* Ella Ratnapura
N'Eliya ******** ******* ******* Divisional Secretary
********* (Uma Oya) Kirindi Ganga Kalu/Walawe Assistant Field Managers Kirindi Oya Ganga (AFMs)
Co-opted
Social Mobilizers Grama
Niladharis Field Implementation
Append ix
Farmers' Organizations, CBOs and Community 3 Source: Updated & amended from chart in UWMP Progress AFMs (Assistant Field Managers) report to Members Report, 1999 . divisional staff but paid by PMO
29
30
CONSULTANT INPUTS Appe
ndix 4 Approved Annual Inputs (person-months) Total Position Name Input 1998 1999 2000 2001 2002 2003 2004 2005 Used (pm)
A. Contracted through Consultancy Agreement with NODE and LEDS a 1 International Consultants Project Implementation Planning/Team Leader Sven Larsen 24 18133322 23 Acting Team Leader I Jorgensen 1 1 1 Hydrology and Erosion Control Kjreil Essor 6 51 6 Land Use Planning Edvarsdson 3 3 3 Policy Analysis N Shanmugaratnam 3 3 3 Village Planning SL Ranamukhaarachahi 1 1 1 Sub-total (A1) 3811933342237 2 Domestic Consultants Nat Res and Agric Econ/ Dep Team Leader AL Herath 48 19810221 33 Training HA Weerasinghe 6 411 6 Baseline, Benefit Monitoring (Conservation) DP Munaweera 6 51 6 Baseline, Benefit Monitoring (Rehabilitation) K Padmalal 6 2 2 Rural Sociology MGM Razaak 10 71.5 8.5 Agric Extension and Participatory Planning J Weerasinghe 14 564 15 Conservation Farming HB Kotagama 6 24 6 Hydrological Monitoring and Soil Erosion ERN Gunawardena 6 51 6 Land Use Planning P Silva 6 6 6 Policy Analysis Wannsinghe 6 6 6 Baseline Survey (Rehabilitation) G Hittinayake 5 5 5 Socio-economic Evaluation (Rehabilitation) G Hittinayake 1 1 1 Benefit Monitoring MHJ Fernando 3 3 3 Village Planning S Somasiri 3 3 3 Project Completion Report S Somasiri 6 4.5 4.5 Watershed Policy S Medawewa 12 39 12 Integrated Pest Mangmt R Ranadeere 6 33 6 Gender and Equity A Wickramasinghe 3 3 3 Socio-economic Evaluation (Conservation) A Wickramasinghe 3 2 2 Sub-total Domestic (A2) 156 14922.5151820 17.5134 Total Inputs 194 26825.5182124 39.5171 B. Contracted Independently by PMO b Economic Analysis of Services HB Kotagama 1 1 1 Home Garden and Poverty Alleviation A Wickramasinghe 1 1 1 Participatory Forestry & Timber Farming A Wickramasinghe 1 1 1 Resettlement S Santhiyapille 1 1 1 Resettlement HNB Herath 6 6 6 Risk Assessment Nat Building Res Org 6 6 6 Risk Assessment University Group 5 5 5 Sub-total Inputs 1800000180018 Grand Total Inputs 212 2 68 25.5 18 21 42 3 9.5 189 a Contract Agreement with Norwegian Consortium for Development and Environment and Lanka Environment and Development Services, October 1998; amended by Contract Variations of June 2002 and October 2005. b Charged under other Project Management Office budgets, with Asian Development Bank approval. Sources: UWMP Annual Progress Reports and PMO records
TRAINING PROGRAM
Table A5.1: Project Training, Workshop and Coordination Program Ref Training Event Participants Number of Training Events and Participants by Project Year 1999 2000 2001 2002 2003 2004 2005 Total Number Persons Events Persons Events Persons Events Persons Events Persons Events Persons Events Persons Events Persons Events Persons per Event A Training Programs: in-country District Level 1. Establishment & Maintenance Farmers, Officers of FD, DAS, DSs 3 193 12 355 17 626 23 672 5 175 0 0 0 0 60 2,021 34 of Buffer Zones 2. Establishment & Maintenance Farmers, Officers of FD, DAS, DSs 3 240 4 361 2 98 0 0 0 0 0 0 0 0 9 699 78 of Timber Farm Plantations 3. Soil Conservation Farmers, FD, DAS, DSs Officers; CBOs 3 142 5 211 5 224 9 294 42 1,571 0 0 44 1,112 108 3,554 33 4. Homestead Development Farmers, Offcers of FD, PDOA, DSs, DAS 0 0 3 474 17 1,494 17 2,997 1 206 0 0 3 430 41 5,601 137 5. Nurseries Farmers, Offcers of FD, PDOA, DSs, DAS 1 155 3 73 1 28 2 139 0 0 4 62 4 85 15 542 36 6. Livestock Development Farmers, Officers of DAP&H 0 0 2 24 0 0 3 37 5 42 1 38 10 275 21 416 20 7. Export Agriculture Crops Farmers, Officers of DAS & DEA 0 0 3 511 2 197 0 0 0 0 0 0 1 30 6 738 123 8. Gully Conservation 1 Farmers, Officers of DAS, DSs; CBOs 0 0 0 0 1 29 1 25 0 0 0 0 0 0 2 54 27 9. Gully Conservation 2 Farmers, SMs, AFMs & Tech Officers 0 0 0 0 0 0 0 0 1 63 0 0 0 0 1 63 63 10. Bee Keeping Farmers, Officers of DAS, DSs; CBOs 0 0 0 0 1 24 31 790 19 451 1 40 12 375 64 1,680 26 11. Mushroom Culture Farmers, Officers of DAS & DEA 0 0 0 0 0 0 0 0 0 0 0 0 10 257 10 257 26 12. Post-harvest Technology Farmers, Offcers of FD, DSs, DAS; CBOs 0 0 0 0 0 0 0 0 0 0 0 0 9 75 9 75 8 13. Value Addition for Production Farmers, Offcers of FD, DSs, DAS; CBOs 0 0 0 0 0 0 0 0 0 0 0 0 3 80 3 80 27 14. GIS Applications Staff Officers, AFMs, SMs 0 0 0 0 0 0 0 0 3 48 0 0 0 0 3 48 16 15. Awareness on FD and Gully Officers of Education Dept, DWLC, FD, 0 0 0 0 0 0 0 0 3 106 0 0 0 0 3 106 35 Conservation PDOA; FMs & AFMs Grama Niladari Division Level 16. Social Mobilization Social Mobilizers (GND level) 0 0 0 0 5 165 1 12 2 44 0 0 4 70 12 291 24 17. Integrated Pest Management AFMs, SM, Farmers 0 0 0 0 0 0 0 0 3 185 0 0 6 155 9 340 38 18. Other Topics Farmers; FD, DAS, DSs Officers; CBOs 0 0 0 0 3 72 0 0 6 467 2 46 7 295 18 880 49
Subtotal (A) 10 730 32 2,009 54 2,957 87 4,966 90 3,358 8 186 113 3,239 394 17,445 44 B. Training Programs: Overseas 1. Erosion Control (Conference) Relevant Senior-level Officers (USA) 0 0 0 0 1 4 0 0 0 0 0 0 0 0 1 4 4
2. Soil conservation, watershed Relevant Senior-level Officers, Field Officers 2 3 2 18 3 21 1 11 2 29 1 19 0 0 11 101 9
management (Study Tours and and Farmers (India, Nepal, Thailand)
Formal Training).
Subtotal (B) 2 3 2 18 4 25 1 11 2 29 1 19 0 0 12 105 9
C. Workshops/seminars: District Level
1. Various Specific Topics Officers of FD, DAS, DSs; CBOs 0 0 3 59 17 7 350 0 0 1 150 87 500 6 Subtotal (C) 0 0 3 0 59 0 17 0 7 350 0 0 1 150 87 500 6
D. Meetings
1. National Steering Committee Officers of IAs (Secretaries MENR, MALD, 0 0 0 0 3 60 4 78 4 65 3 59 1 19 15 281 19
MPI; Heads of FD, DWLC, ERD, DOA, NPD,
DAS, APH, LUPPD, LC, MASL)
2. Provincial Steering Committee Senior Officers of IAs in Uva, Sabaragamuwa 0 0 6 104 21 446 25 607 27 662 28 679 22 430 129 2,928 23
& Central Provinces
Subtotal (D) 0 0 6 104 24 506 29 685 31 727 31 738 23 449 144 3,209 22
MENR : Ministry of Environment & Natural Resources (now MoE); MALD: Ministry of Land & Livestock Development; MPI: Ministry of Plantation Industry; ERD: External Relations Dept; FD: Forest Conservation Dept; DWLC: Dept of Wild Life Append Conservation; NPD: National Planning Dept; PDOA: Provincial Dept of Agriculture; DAS: Dept of Agrarian Services; DAP&H: Dept of Animal Production & Health; LUPPD: Land Use Policy Planning Division; LC: Land Commisioner's Dept; MASL: Mahweli Authority of Sri Lanka; DS: Divisional Secretary' Office; DEA: Dept of Export Agriculture; FM: Field Manager; AFM: Assistant Field Manager. Sources: Upper Watershed Management Project, 2006. Overall Progress Report Year 2005. PMO, Ministry of Environment, Battaramulla ix 5 31
32 Appendix 5
n
f io n o o at i s t c t
i a . f c i v g s A n r er i pa , e p e v m ns e h I g c ke i n y - r i e il Co si m op Di M r o a o Be Da IP C S n m o a c r e E ck i o- i c Mo W o . : es S s . ce r MP u 06 ce o W n U S 20 i v o
r ) P
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ar
e
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r
(U
a l s T El r e m r
a
)
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(
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ad gam
e an
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Figure A5.2: Farmer Training in Uva and Central Provinc v
U
)
P
U
(
ada
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200 180 160 140 120 100
ers rm a F f o er b m u N
Appendix 6 33
SOCIOECONOMIC ASSESSMENT
A. Socioeconomic Objectives
1. The Upper Watershed Management Project (the Project) had the socioeconomic objective of improving the incomes of project beneficiaries. This objective was expected to contribute to the Government goal of reducing poverty. The rationale of the Project also took into account that critical watersheds were being degraded by poorer segments of the local population that exploited forest resources. The overall project concept therefore had components that were designed to achieve both main project objectives concurrently: (i) the rehabilitation and protection of watersheds and (ii) increasing incomes to reduce poverty. B. Methodology
2. A detailed socioeconomic assessment1 of the project was conducted at the end of the Project by a consultant assigned by the project management unit. The Social Survey Report incorporated the findings of a detailed sample survey of around 250 respondents who benefited from the Project. The findings of the survey are used in this assessment, as the data are very recent. To compare the validity of the data in the report, the Project Completion Report Mission (PCRM) also engaged the services of six field investigators to conduct a rapid survey of beneficiaries of the major project components. This PCRM Survey was conducted over 4 days in July–August 2006. The mission also conducted many interviews in the field with beneficiaries and other stakeholders engaged on the Project. C. Targeting and Identification of Beneficiaries
1. Awareness of Project Objectives
3. The Project conducted a major media campaign to increase the awareness of the population of the target areas of both the importance of watershed management and the various project activities. Feedback from the field surveys showed universal awareness of project activities in the watershed areas and even beyond. More than 30 documentaries were shown on national television, while other publicity strategies included radio programs, press releases, publications, workshops, and exhibitions. 4. An evaluation of the effectiveness of the media campaign was undertaken by the Project. The results (Table A6.1) show that the media discussions and exhibitions were most effective means of reaching the target population. Table A6.1: Effectiveness of Project Publicity Strategies
Publicity method % of population who found method effective Media discussion 85 Exhibitions 85 Publications 48 Workshops 65 Participatory/interactive 70 Source: Upper Watershed Management Project Social Survey Report 2006.
5. The mission was able to interview some of the children who attended schools where publicity programs were held. Although there was general awareness of watershed protection, the senior students who had attended the events had left the school. The programs would have
34 Appendix 6 been more effective if the events had been arranged for all age groups. Some of the implementation agencies involved in the Project are of the view that they were excluded from the media programs despite their involvement in the Project. 6. The PCRM Survey shows that information of project activities reached farmers mainly through the social mobilizers engaged by the project. 2. Effectiveness of Targeting
7. The focus of the Project at the design stage was on marginal farmers, because the Project was also intended to support the Government’s poverty reduction objectives. The beneficiaries of the Project appear to be the small farmers that were the targeted group. 8. The Upper Watershed Management Project Social Survey (UWMP Social Survey) collected data on the size of holdings of farmers who received project assistance on conservation-oriented farming (Table A6.2). The mean cultivated area for the main cultivation season was 0.16 hectares (ha), which places the beneficiaries in the lower income category of farmers. This result is substantiated by the findings of the PCRM Survey, which identified a similar pattern. Therefore, the Project effectively targeted the intended beneficiary groups. Table A6.2: Mean Cultivated Area of Beneficiaries
Divisional secretary region Plot size (ha) Welimada 0.18 Uva/Paranagama 0.15 Walapane 0.15 Nuwara Eliya 0.14 Source: Upper Watershed Management Project Social Survey Report 2006.
9. The mission was also able to observe that project assistance was extended to more prosperous farmers, especially where agricultural extension officers provided new technology. This may have long term benefits in that poorer farmers may be motivated to adopt these practices after observing them and does not have any negative impact on overall project objectives. However, better-off farmers had the ability to initiate conservation-oriented investments with their own funds and may not have deserved project assistance for conservation. 10. The PCRM Survey team met several farmers who had not received financial assistance from the Project despite having attended some of the society meetings in their areas. Investigations revealed that these aspirants did not meet project criteria, such as being located in the more critical higher slopes of a watershed area. 11. A weakness in the targeting was that some isolated but deserving farmers in the project areas may have been excluded from project benefits, because the formation of community based organizations (CBOs) placed emphasis on particular localities such as villages. Similarly, some officials in the implementation agencies who were interviewed by the mission felt that some of the project activities could have been more sustainable if larger farmers had also been included in the forestry components, because of their greater resources for risk-taking, investment, and maintenance. However this option was not considered in light of the secondary goal of poverty reduction.
Appendix 6 35
3. Ownership and Commitment
12. The farmers interviewed by the mission had very positive responses to the changes to their farming practices introduced by the Project. Apart from improved productivity and incomes, farmers report that the project investments in conservation farming have increased the value of their landholdings. D. Socioeconomic Impact
1. Productivity and Output
13. Project component A, promoting conservation-oriented farming systems, has contributed to improving both productivity and cultivated extent. The expansion in cultivated extent was reported at around 9% in the UWMP Social Survey. This finding is supported by an equivalent figure of 8% in the PCRM Survey. The increase in output was not investigated in the UWMP Social Survey, but the PCRM Survey revealed an increase of 33% in farm output in the main cultivation season when compared with the pre-project situation. 14. The main reason stated by farmers for the increase in output was the wider use of terraces on their land for cultivation. This created a wider effective area for cultivation and better retained water and nutrients. The PCRM Survey also revealed that, with the adoption of terracing, some of the farmers downstream did not receive their usual quota of water during the cultivation season, as farmers upstream received a greater share of water. This difference was also seen in the case of non-agricultural uses of water where the Project made investments. This has resulted in minor local disagreements. 2. Farmer Incomes
15. The survey conducted for the UWMP Social Report showed a tenfold increase in farm income at the end of the project period when compared with the baseline situation. This appears to be overstated and could not be substantiated by the findings of the PCRM Survey, which shows an improvement of income but with a statistically invalid response because only 14 farmers out of 32 responded to the question. Farmers are usually reluctant to present correct data on incomes to survey investigators. National income data suggests a maximum increase in the per capita gross domestic product of 48% during the project period for the population as a whole. The actual increase in income of the farmers is probably similar. 16. Most households stated that incomes were uncertain due to the wide fluctuations in the price of produce. When specifically asked, beneficiaries of the conservation farming component were firm in their conviction that the Project had indeed resulted in an increase in their farm incomes. The reasons they provided were increased effective farming area and lower cost of production due to lower input requirements following the adoption of conservation-oriented farming systems. Beneficiary farmers reported a 10% increase in average selling prices during the project period, but this was not a significant reason for the reported increase in incomes. 17. The project framework output gives an increase in incomes for vegetable farmers as $315, but it is not clear if this is annual or over the project period. If annual, this would be an increase of about 26% based on average farm incomes, which is unrealistic and unsustainable. If over the project period, the increase would not reflect the shorter period of interventions experience by farmers who joined the Project in later years. It would also be difficult for farmers to dissociate increases in farm income from non-farm incomes (remittance income is important but varies from year to year).
36 Appendix 6
3. Impact on Farming Techniques
18. The project activities in the conservation-oriented farming systems component were supported by an agricultural extension program that included advisory visits to the farm as well as training for farmers. The agencies responsible were the provincial ministries of agriculture, through extension officers, and the Department of Agrarian Services. The mission was able to observe the adoption of several techniques by farmers that were not prevalent prior to the project period. Such techniques belong to two categories that are described below. 4. Conservation-Oriented Farming Techniques
19. The first category of techniques adopted was conservation-oriented farming, which has the objective of protecting watersheds. 20. The project baseline study (2002) shows that only around 27% of farmers had adopted soil conservation practices before the Project. The PCRM Survey (Figure A6) revealed that 38% of farmers had not adopted such practices before the Project. This improved to almost 100% by 2005 among farmers in areas targeted by the Project. The most prevalent techniques used by farmers are terracing, grass contour strips,2 and protected drains. Reverse-slope terracing was widely adopted by the farmers. Surveys indicate that practices such as the sloping agricultural land technique have not been widely adopted. 21. Most farmers agree that conservation farming has significant advantages over their earlier practices. The directly discernible advantage is the lower volume of fertilizer and other inputs required under conservation farming, though some farmers stated that increased input prices somewhat negated the advantage. Farmers had not adopted conservation practices prior to the Project mainly for lack of funds. Almost all farmers met by the PCRM Survey team stated that conservation-oriented farming had increased yields and selling prices, as well as their incomes, with a corresponding drop in the cost of production due to lower requirements for fertilizer and other agrochemicals.
Figure A6: Farmers in Project Area Adopting Conservation Farming Practices (Before and After Project)
Nuw ara Eliya
Walapane
Uva/Paranagama
Welimada
0 20 40 60 80 100 120 % Farmers Adopting Conservation Practices
Baseline End Project
Source: Upper Watershed Management Project Social Survey. 22. The funds provided under the Project were the main incentive for farmers’ adoption of conservation-oriented farming techniques, complemented by the orientation and training
Appendix 6 37 received. Once adopted, the PCRM Survey results show, the collective view among farmers was that these practices should continue even without project assistance, driven by the lower cost of production and higher productivity. 5. Nontraditional Farming Techniques
23. Many farmers adopted modern techniques, such as drip irrigation systems and polypropylene tunnels, as a direct result of the Project. The mission observed that most of these farmers were more affluent than the majority of project beneficiaries. It is common in Sri Lanka for agriculture extension officers to introduce new technology through more affluent farmers for easier adoption and more likely sustainability. There is some justification to this. The mission was also able to visit poorer farmers who had adopted this technology on a smaller scale after observing other farmers. 24. The introduction of modern techniques and some new varieties of crops are indirect benefits of the Project. The crops introduced include a new variety of citrus that is now thriving in the project area. The agricultural extension system usually uses the opportunity presented by an aid agency-funded project to introduce new ideas to farmers. The additional resources and the financial incentives that a project provides motivate extension officers to reach out and encourage farmers to adopt new techniques and crops. This was evident in this Project, demonstrated on many of the farms visited by the mission, though comparatively richer farmers appear to have received the most benefit. 6. Supplementary Income Generation
25. The Project included a subcomponent to provide additional income to farmers by assisting in milk production and bee-keeping. Farmers were trained in these fields and a total of 583 head of improved cattle were provided by the Project to selected farmers. Beneficiary farmers were obliged to donate female calves to other farmers, and this calf exchange continued in some areas after the Project. This subcomponent was also viewed as a part of integrated farming, as vegetative contour strips both protect the soil and provide fodder, and cattle produce manure for farmlands. In Ratnapura District, farmers were also trained in value addition to milk, such as yoghurt production. 26. In some areas visited by the mission, the bee hives provided by the Project were not in use. The reasons given by the farmers were the lack of flowers and the use of pesticides in the area that proved harmful to the bees. In other areas of the Uma Oya watershed, the Project reports active bee-keeping. 7. Rehabilitation and Protection of Forest Areas
27. Of the several components to develop forestry in the watershed areas, two components involved the active participation of beneficiaries. The buffer zones that were developed under the Project saw communities planting trees on state-owned land in watershed areas. A total of 2,328 ha were planted in this manner. A total of 541 ha of timber farms were also established, with selected families planting commercially viable timber species on land leased to them by the Government. 28. As in all forestry investments, the benefits to individual farmers are long term. Farmers interviewed by the mission were emphatic in their assertion that the wages that were paid to them to develop the buffer zone had a significant impact on their lives, especially since the selected areas offer few non-agricultural employment opportunities. The beneficiaries also saw advantages in the buffer zones’ reducing the risk of forest fires on the slopes, which had been very common prior to the Project. The buffer zones often lie on the slopes between the village
38 Appendix 6 and the cultivated areas, and the farmers were appreciative of the improvement to the physical environment as they walk to their fields. They also gain from access to non-timber forest products, including grass. 29. The timber farms are of greater commercial interest to the farmers, because they are entitled to an 80% share of the timber harvest over the 25-year lease. The PCRM Survey revealed that, for the shorter term, farmers had established other crops such as pepper in the timber farms, which gave them a greater impetus to maintain the planting. Due to an error, the agreements between beneficiaries of the timber farms and the Forest Department (FD) initially provided a 75% share of the harvest to the farmer, rather than the intended 80%. The agreements have been retrieved by the FD for the correction, a move that has made some beneficiaries suspicious that they may not receive their share of the harvest. This needs early rectification to ensure proper maintenance of the plots. 30. The FD reported difficulties in working with social mobilizers (SMs) in some areas where the SM had undertaken some activities without adequate consultation (para. 39). This may affect sustainability. However, links between the FD and communities were stronger in areas where the main project emphasis was on forestry, such as the Walawe watershed. Indeed, as observed by the Balangoda divisional forest officer, for many FD officers the Project provided the first experience of working closely with communities. 8. Land Regularization
31. The component of the Project on the regularization of land sought to provide proper ownership to encroached land, a problem that is common in the project areas. Sri Lanka is very densely populated, creating severe shortages of cultivable land, which has been the root cause of much social unrest in the past. The problem is compounded in the project area by large tracts of prime agricultural land being reserved for plantation companies. Regularization was limited to land that met environmental and other criteria. The UWMP Social Survey shows that most of the encroached plots in areas that received project assistance had been regularized by the end of the Project, with only 11 of the grama niladhari divisions,3 out of a total of 46 surveyed, showing non-regularized plots. This should ensure commitment in conservation work by the farmers. 32. The mission was informed that some of the farm roads constructed with project funds served areas where no regularization was possible, thereby sending the wrong message to encroachers in these protected areas. The provincial administration is also of the view that some farmers without legitimate claim to land would have sought participation in the Project to legitimize their ownership, a process that they thought would be easier by working through the SMs, although the latter lacked the local authority. 9. Special Integrated Resource Management Subprojects
33. The Project implemented five special subprojects in the project areas. Their objectives were to generate a holistic approach to watershed management and provide the communities with benefits regarding drinking water, higher agriculture-based income generation, and an improved living environment. The mission visited two of these subprojects to assess the relevance and the effectiveness of the strategy and to measure the impact on the targeted communities. Project management adopted a participatory approach in designing the subprojects, extensively using social mobilization techniques. 34. At Welikandegama, in the Uma Oya catchment area, large Eucalyptus plantations had been established by the FD. With the felling of these trees on the high slopes, the communities living in the valley realized that Eucalyptus trees appeared to be responsible for water depletion observed in the past. The Project provided funds to farmers to undertake participatory forestry.
Appendix 6 39
Indigenous varieties were planted and maintained by the community, in view of their belief that the rate of water extraction of Eucalyptus was too high for a natural balance. Local farmers informed the mission that there was quickly an improvement in the availability of water. More significant was the sense of ownership of the forest reserve by the community, who were seen to be totally committed to protecting the site from both fire and illegal felling. 35. The mission also visited the Perawela conservation subproject. Around 30 families living in the area had received assistance from the Project to improve the availability of drinking water through a program of forest rehabilitation and conservation measures. The Project also assisted in the construction of a water tank for the villagers, with sand filtration to improve quality. The mission observed a strong sense of commitment and unity among the small community in their shared goal of ensuring an adequate water supply. Although the CBO was no longer fully functional, the villagers remained committed to the Project’s approaches. 10. Integrated Pest Management
36. Traditionally, vegetable farmers in the project area feel more secure using agrochemicals, although their use often tends to be excessive. A program on integrated pest management (IPM), including composting techniques, was introduced on a limited scale in 2005, with the participation of 62 farmers. Apart from the health benefits for consumers, IPM has the potential of reducing the cost of production by reducing the use of chemicals. A farmer interviewed by the mission in Keppitipola stated that adopting IPM under the Project had enabled him to reduce the cost of production for his potato crop by SLRs6,000 per season on a 0.25 ha plot, which he considered significant. Farmers adopting IPM use only relatively benign chemicals such as sulfur for controlling pests. The farmers who adopted IPM were scattered over the project area and were therefore difficult to supervise. The Project should have adopted this concept over a larger target group at an earlier date. 11. Impact on Women
37. The Project did not have any gender-specific goals at the design stage but was expected to involve women beneficiaries in the various components. In practice, the PCRM Survey results (Table A6.3) reveal that only 34% of the work created by the Project was done by women. This has to be viewed in light of the type of work created by the Project, as most tasks in conservation farming and common amenities involve hard physical labor, which would not have been appropriate for women. In some tasks, such as developing home gardens, as much as 70% of the work was done by women. Over half the SMs were women, and this created a new income for them as well as providing capacity development in social and technical skills and skills for managing small projects. 38. Both the UWMP Survey and the PCRM Survey results show that farm family management of finances provided by the Project was mostly in the hands of males. This is traditional in the target areas. Women have been active participants in the activities of the CBOs, although not in leadership roles. It is noteworthy that women formed the majority of the members of the CBOs facilitated under the Project.
40 Appendix 6
Table A6.3: Participation of Women in Project Activities
Task Shared Male Female Management of Project Funds 19% 52% 29% Office Holders in CBOs* 95% 5% Committee Members of CBOs* 55% 45% General Membership of CBOs* 45% 55% Overall Provision of Labor 66% 34% CBO = community-based organization. Sources: Project Completion Report Mission Survey, and Upper Watershed Management Project Social Survey
E. Effectiveness of Participatory Approach
1. Participatory Approach
39. The Project was designed to depend on a participatory approach in its implementation. It appointed SMs to establish and motivate the CBOs, which numbered around 280. The mission met several of these SMs. They had been trained by the Project in participatory rural appraisal (PRA) techniques and lived in the areas that they served. They were mostly unemployed youths with a secondary education. Engaged by the project management office, they were effective as an independent interface between communities and implementing agencies (IAs), although minor conflicts arose with some FD officials, who resented outsiders being involved in forest activities. The Project was able to provide them with employment for its duration, though it is unfortunate that most of them are without employment since the Project ended. 40. Farmer organizations are common in the rural sector in Sri Lanka, together with a culture of mutual help, whereby households contribute labor to assist in small household tasks. The SMs were effective in building up the CBOs. It is of interest that a cooperative approach was adopted even in establishing the timber farms, where trees are planted on lots individually assigned to farmers. The PCRM Survey showed examples of community participation in establishing the timber farms, where the owner kept the funds entitled to him but provided meals to the neighbors who volunteered their help. The introduction of off-farm construction projects such as gully protection appear to have encouraged groups to work together. Although the constitution of the CBOs provided for elections, a few people held most offices, which brought mixed results in practice. The participatory approach was successful in meeting project goals. 41. The Project successfully developed a participatory approach to minor construction work (footpath improvement, terrace construction, etc.). The costs, including materials and labor, were estimated by the IAs according to Government norms. Designs were prepared by the IAs, and 80% of the total estimated amount was released to the CBO, which took responsibility for purchasing materials and for construction. The 20% balance of costs was calculated as the labor share of the CBO. In reality, the material costs often exceeded the norms, with the result that the community contribution was more than 20%. By avoiding the use of contractors, this approach effectively enhanced local ownership and improved the quality of construction. 2. Sustainability Issues
42. Most CBOs set up under the Project were not functioning when visited by the mission in July–August 2006. This was also revealed in the PCRM Survey, where the farmers stated that the societies had not met since the Project ended. The mission was able to identify a few exemptions. At Perawela, where an integrated subproject was initiated, the society still meets, if
Appendix 6 41 informally, due to the compact nature of the settlement. In another site at Kinchigune, in the Balangoda area, the environmental officer attached to the divisional secretariat motivates the societies to function, although with reduced intensity. In this instance, the CBO is registered with the divisional secretariat. It is regrettable that this approach has not been replicated widely. In most other areas, it appears that the CBO was registered with the Project, not with the divisional secretariat, and had no follow-up activity after the Project and the discontinuation of the SMs. 43. Another issue relating to the sustainability of the CBOs is their funding. During the Project, most of the funding was from project payments for the construction of off-farm structures. The members of the CBOs collected small amounts as contributions. The CBOs were not allowed to draw down the capital in the CBO account, but they could withdraw interest earned with the concurrence of the Department of Agrarian Services, since off-site activities were undertaken through this institution, which also tended to work through existing farmer organizations where possible. The funds available are inadequate for most maintenance activities. With the almost total cessation of society activities after the Project, there is no possibility of mobilizating members’ funds. Some CBOs onlend funds to members at an interest rate of 2% per month, mostly for emergencies. Repayment performance is good. 44. The ownership of funds reveals a shortcoming in the design of CBOs. Had the societies had full control over their funds, they would have been more actively used for savings and credit, encouraging continuance of the CBO. Incorporation of a credit program, as used on the Matale Rural Advancement Project funded by the International Fund for Agricultural Development, would have helped communities develop their own funds. Similarly, providing physical inputs free of charge, with no contribution from the beneficiary, lessened the sense of ownership. F. Extension and Training
45. The Project conducted many training programs at all levels, for officials of the IAs, SMs, and the farmers themselves. Almost every farmer who participated in the Project was trained at least once. As many as 72% of the farmers interviewed under the PCRM Survey stated that the quality of the training was good, while the others rated it as average. If not for the resources provided by the Project, it is doubtful whether this type of training could have been provided to farmers in the project area. 46. As with other aspects of the Project, the IAs lack the capacity and financing to continue with the training programs directed to the conservation-oriented farmers and those who participated in the forestry programs. An agricultural extension officer currently covers around 3,000 farmer families, which creates difficulties in implementing a continuous program of training and extension. 47. Sustainability of the skills learned could have been better if the CBOs and farmers’ organizations had been encouraged to support their leader farmers or other competent community members in return for access to their knowledge, technical advice, and links to Government services. Payment for services could have been in cash or in kind. This would have created a cadre of paraprofessionals to sustain the processes developed by the Project. However, it is unlikely to succeed with the dependency attitudes currently prevalent in Sri Lanka, in which the government is expected to provide all such services. G. Overall Impact and Sustainability
48. Supported by an effective media campaign, the Project succeeded in meeting its objectives by providing assistance to the smaller farmers in the project area. Most farmers state that their incomes improved as a result of participating in the project activities, which the mission verified independently in the field. Project activities also facilitated the introduction of new
42 Appendix 6 farming techniques and crops in the project area. Land regularization under the Project has provided a sense of ownership and commitment to the beneficiaries. Almost all beneficiaries also participated in off-farm activities, which provided common benefits to the community. Although there were no activities directed specifically to women, their participation in community-based organizations was high. 49. The major issues that have arisen after project closure center around sustainability. Although all farmers who received project funds state that their conservation practices will continue into the future, the adoption of such practices by other farmers will be limited due to the cost. Community forestry is unlikely to continue without financial support, for which funding agency support is usually a pre-condition. 50. A serious sustainability problem also arises from the institutional arrangements established under the Project. Almost all CBOs have ceased to exist or else meet only infrequently. They will be sustainable only in small, compact communities and where there is a commitment to a common goal. The Project made no provision to group the CBOs by district or nationally as a federation. With some modest financial support from the central or provincial government, such an arrangement may have been sustainable, as seen in the example of tea development societies.
Appendix 7 43
FINANCIAL AND ECONOMIC ANALYSES
A. Introduction
1. The Upper Watershed Management Project (the Project) is expected to provide agricultural and conservation benefits in the upper catchment areas of four river systems in Sri Lanka. 2. The Project comprises two major components: (i) participatory rehabilitation and protection of forests and (ii) conservation-oriented agricultural development.
B. Participatory Rehabilitation and Protection of Forests
3. Development work under this major component comprises the following: (i) buffer zone plantings, (ii) timber farms, and (iii) home garden plots. 1. Buffer Zone Plantings
4. The Project set out to develop 4,000 hectares (ha). Details of the actual achievements are set out in Table A7.1. Project implementation commenced in 1998 and was completed in 2005. Details of actual implementation were obtained from the overall progress report of the project management office in February 2006 as follows: (i) buffer zone planting, 2,328 ha; (ii) stream reservation planting, 408 kilometers (km); (iii) roadside planting, 95 km; and (iv) planting in schools and public areas, 76 ha.
5. Elements of the cost of planting include seeds, fertilizer, and labor for planting and maintenance in the second and third years. The unit costs of the elements above were those used in the project preparation report but enhanced using appropriate indices to 2006 levels. Complete details are presented in Table A7.1.
44 Appendix 7
2 4 4 6 3 6 8 7 3 7 9 4 3 5 4 8 2 3 7 l 7 4 3 14 47 29 03 89 9 69 08 16 404 71 02 871 05 ,52 ,39 ,34 ,80 , , ,47 , , ,48 , , , , , , 3 6 1 1 1 6 0 1 3 1 9 14 19 35 30 1 92 7 2 Tota 2 1 0 0 0 0 0 0 0 0 0 0 0 0 69 31 31 33 33 69 187 320 187 007 2 0 0 0 0 0 0 0 0 0 37 39 67 100 139 175 137 241 175 929 374 374 006 2 0 25 44 15 75 5 125 280 237 349 437 114 118 379 461 249 437 084 805 192 258 090 0 0 1, 1, 4, 2, 2 000 ' s R s 1 8 0 6 9 8 0 44 3 06 8 48 87 74 65 21 3 3 6 74 4 111 083 992 198 210 956 1 4 4 3 6 1 2 5 8 ice 0 , , , , , 0 1 3, 1 4 9 3 2 Pr 006 5 5 1 1 1 3 7 3 5 1 8 2 2 50 2 5 08 2 12 12 2 9 4 69 7 58 78 0 74 6 8 8 6 9 3 ost 2 1 2 1 2 8 1 2 7 0 ,4 C 0 2,2 3 1,0 2,7 6,1 5,8 2,7 2 20,3 13,4 1 0 3 0 0 4 6 4 41 94 5 47 9 6 21 21 5 6 48 98 39 62 8 7 0 72 26 79 13 2 2 2 2 1 3 6 0 ,9 ,5 ,9 ,6 ,8 ,6 ,0 ,5 0 7,3 3 7 6 2 1,4 6 9 0 1 2 1 1 1 6 4 t 0 2 9 1 0 0 9 1 0 n 4 2 5 65 5 0 87 24 75 82 35 46 89 52 95 87 41 1 4 2 1 1 4 7 0 ,3 ,4 ,8 ,0 ,8 ,3 0 8,5 4,7 1 1 1 2 8 5 2 1 2 4 4 onme 0 0 0 7 0 4 6 1 0 0 0 0 0 1 9 7 3 17 74 9 3 1 23 7 00 57 17 3 9 2 1 9 3 1 3 5 200 ,1 ,8 ,3 ,9 8 6 6 4 1 4 6 6 98/ 19 agement Project of Envir t y n e e r 380 480 240 787 320 728 424 240 920 120 480 513 400 160 603 768 Rs ic ur 6, 8, 6, 3, 3, 1, 4, 15, 12, 14, 12, 11, 39, 47, 22, 39, C nit Pr 8 U 873 240 120 240 120 700 960 560 531 160 873 080 ,864 ,712 ,040 ,884 Rs 199 6, 3, 5, 1, 1, 8, 6, 3, 8, 4, 2, 13 19 19 23 l 6 6 6 5 5 5 5 8 8 8 8 8 8 7 7 7 76 9 9 9 0 0 08 08 4 4 32 4 4 32 32 ota ,32 , , , T 2 2 2 2 Report. Ministr 1 09 8 7 1 30 0 tion 0 2 e ect Achievements and Costs 0 6 21 0 0 8 6 3 11 1 42 200 . a 0 7 6 83 2 0 0 0 8 8 5 / H 3 57 11 11 7 1 42 1 30 30 0 0 2 ect Compl ents em 0 4 7 4 2 7 2 7 8 6 6 0 0 4 7 17 1 6 3 5 3 42 42 2 49 Actual Proj 200 hiev c A 0 6 9 7 7 8 8 7 7 0 0 94 2 1 2 17 14 56 67 5 5 7 7 4 5 2 003 tual 2 c A Table A7.1: Upper Watershed Man 6 5 5 0 6 8 9 7 7 4 4 4 4 15 1 2 1 2 1 1 1 1 67 67 02 55 17 2 2 49 49 , 20 ect, 2006. Proj 1 j 5 9 9 1 15 15 20 20 16 16 2 2 0 178 556 556 0 2 1, 0 0 5 5 8 8 15 15 15 15 7 7 /20 1,1 1,1 ement Pro 998 1 upees r ...... it a a m m m m m m m m n = nag k k k k k k k k h ha h ha ha ha ha ha U s ) ) tal o al (A al (B al (C ) g T ot ot t t ot t tin n Year Year Year Year d d d d Sub Sub Sub Pla s con con con con ird Year ird Year ird Year ird Year g tershed Ma a h h h h ilometer, R
n i
a
t k
e Se e Se e Se e T e Se e T e T e T Are s an nt Costs l c W a i nc nc nc nc nc nc nc nc l me n P g g g g t o Are ena ena ena ena ena ena ena ena ting i s c tin tin tin tin i e l Pub ing l at , km= per int int int int int int int int an v ta a a a a a a a a r e o ant e Inv Plan Plan Plan Plan M M M M M M M M Pub s s s s Pl l l l l
n ne Pl b - t e i ur - ur - ur - ur - ur - ur - ur - ur - ur - ur - ur - ur - ria ria ria ria Res g e e e e sid r Zo tin am abo abo abo abo abo abo abo abo abo abo abo abo Su ad e r hectar t Plan Mat L L L L L L Mat Buffe Mat L L L S Mat L L L
Ro
A. D. C. B.
ha= Source: Up Appendix 7 45
Table A7.2: Buffer Zone Planting Investment Costs Item Million SLRs Buffer Zone Planting 171.9 Stream Reservation Planting 30.5 Roadside Planting 1.9 Public Areas and Schools 6.2 Total 210.5 Source: UWMP 2006, Project Completion Report. Ministry of Environment
6. The principal benefit to the participants from this component is the fruit, with supplementary benefits realized from sales of miscellaneous timber obtained through thinning. The prices for the fruit were obtained from the wholesale market, with suitable adjustments made to obtain the price at the farm gate. 2. Timber Farms
7. Project preparation envisioned developing 3,000 hectares of timber farms over the 7 year period of 1998–2005. However, the actual extent developed was 508 hectares. Details of the annual achievements are shown in Table A7.4. The unit costs of material and labor were those used in the project preparation report, adjusted to 2006 using appropriate indices. 8. It is expected that the output from the timber farms will be available for sale in the years 7, 15, 21, and 25 years in the following given in Table A7.3. The stumpage values were those available in the project preparation document, indexed appropriately to 2006 levels. Table A7.3: Output of Timber Farms
Year Timber 7 15 21 25 Diameter m3/ha 10–19 cm 0.2 7.0 7.0 18.0 20–29 cm 0 2.9 7.2 35.0 30–39 cm 0 0 1.2 21.0 >39 cm 0 0 0 5.0 m3/ha=cubic meter per hectare Source: UWMP, 2006. Project Completion Report. Ministry of Environment.
3. Home Gardens
9. Project preparation expected that 15,000 home gardens of 0.1 ha each would be developed and enhanced. The actual achievement far exceeded this amount, the annual realization being as follows: 4,159 in 1998–2000, 5,291 in 2001, 6,689 in 2002, 2,500 in 2003, and 500 in 2004. 10. The gardens will produce timber and fruit. Details are provided in Table A7.5. The details of production per garden are those used in the project preparation report, with the price per unit indexed by appropriate factors to translate them to 2006 levels.
46 Appendix 7
0 3 4 4 9 3 3 9 2 4 3 1 5 9 227 157 0 642 157 050 tal , , , , , , o 2 1 1 3 4, 7 2 T 2 1 1 35, 176, 176, 0 0 0 0 0 007 2 0 0 0 848 848 2006 356 496 234 496 590 000 ' 1, 7, 7, 1, 2005 s R 1000 3000 9000 1000 2000 1 9 6 1 ces 1 374 2 624 78 ,029 , , ,029 ,041 2 6 2004 30 30 10 006 Pri 3 4 5 2 62 t 2 8 998 6 310 s , ,106 ,106 o 1 1,543 7 1,872 7 3,557 2003 3 3 C 7 5 5 6 9 100 6 829 874 , , 4 4,128 4,992 7,630 1 2002 26,331 26,331 1 7 0 2 6 9 499 1 656 ,265 , ,398 ,063 3 3 1 2 2001 41,049 41,049 6 2 0 5 0 9 5 1 6 0 8 3 0 3 51 2000 , , 2,56 9,32 3 6,98 2 34,14 34,14 t 1998/ n t 5 7 e 617 8 124 rren , Rs c onme u 8,320 3 5,200 41,600 14,444 1 C Pri t i 5 n 0 62 U 356 0 , Rs 4,160 8,333 2,600 8 1998 20,800 of Envir y l 8 a 0 t 508 508 789 196 508 196 5 789 o T 18, 12, 12, 18, 0 0 0 ,196 2 2007 1 ect Achievements and Costs 0 0 0 163 Report. Ministr 2006 12,196 tion . 0 0 5 0 0 e a 4 163 519 H 2005 12,196 ents 3 5 7 0 0 3 9 0 m 4 5 6 5 e 16 1 12 1 1 ,07 ev 2 i 2004 11,67 h c ect Compl A 8 0 0 9 5 0 45 9 2 0 12 6 4 0 al 1 u t 9,5 2,5 2,5 2,5 2003 c A 0 12 2 689 029 120 823 168 689 1 6, 7, 1, 6, 2002 Table A7.4: Actual Proj 2 ect, 2006. Proj 12 1 j 291 206 168 842 291 5, 5, 5, 2, 2001 8 6 168 159 364 159 1 364 , /2000 4, 2, 4 2, ement Pro 1998 t i a a nag n ots h ha ha h ha ha U pl gardens )
) t B (A) l ( (C ar al e ota Y otal ear chmen ri Y ubtot ond d s Subt r tershed Ma S Subt i st h a g o en En n rd C W on s t l a ti rmi a a i a s v r g ter m n enance Sec enance T r per i t t a me G on F e n n o dens i m estmen t Fa
onse ant
v a r e r H e v i o In s t b - Pl - Mai - Mai l erv
f a ment s a rm C i h n r a me Gar c o e o F i Tim t
mul Hectar
a n u C H
Labour
C Labour Labour Labour M Enr O
A B C ha= Source: Up
Appendix 7 47
4. Financial and Economic Prices
11. The outputs of the Project are agricultural (vegetables) and timber. The prices of the former are wholesale prices in Colombo’s Pettah market with appropriate adjustments to estimate farm gate prices. Timber prices were those used in the feasibility study but with appropriate adjustments to reflect 2006 price levels. 12. In the case of input prices, the seed prices were obtained from importing companies, as were the prices of fertilizer and agrochemicals. The price of labor was assumed at SLRs250 per person per day during the October–March Maha season, which is the current prevailing level. 13. Financial and economic prices, in both Sri Lanka rupees and US dollars, are shown in Table A7.5. The current parity rate of SLRs/$ = Rs104.00 was used. Economic prices are derived by applying the standard conversion factor of 0.9 to the respective financial prices. 14. Details of financial and economic prices are shown in Table A7.5.
C. Conservation-Oriented Farming Systems
1. Vegetable and Potato Cultivation
15. The Project was expected to benefit small vegetable and potato farmers in the upper Uma Oya catchment area1. Farm sizes are approximately 0.25 ha, and these farms would cover an extent of 4,500 ha identified as priority project lands. 16. Table A7.6 shows a sample crop model for a 1.0 ha potato farm, both with and without the Project. It is seen that the net returns are 34.0% of gross income without the Project and 54.4% of gross income with the Project. 17. Yields of the main crops, namely potatoes, beans, cabbages, and leeks, are expected to increase slightly with the Project because of increased soil fertility resulting from erosion control and the provision of extension services. With the Project, the cost of production is expected to decline due to lower application of inorganic fertilizers. Without the Project, yields are expected to continue to decline despite the increased application of fertilizer. 18. It was not possible to compile crop models for the vegetables, beans, cabbages and leeks for lack of information. It was therefore necessary to assume identical net return percentages as those used for the potato crop model. 19. The latest retail prices were obtained from the Pettah wholesale market with suitable adjustments for the transport element from farm gate to market. Using the net return percentages derived in Table A7.7, the gross and net returns for the potato and vegetable crops are presented in Table A7.9, under the following scenarios: (i) without the Project, rainfed and irrigated cultivation, and (ii) with the Project, rainfed and irrigated cultivation.
48 Appendix 7
Table A7.5: Financial and Economic Prices
Item Financial Prices Economic Prices Unit Rupees Dollars Rupees Dollars
Outputs Agricultural Potato kg 72.00 0.69 64.80 0.62 Pole Beans kg 55.00 0.53 49.50 0.48 Cabbage kg 45.00 0.43 40.50 0.39 Leeks kg 55.00 0.53 49.50 0.48 Mango kg 25.00 0.24 22.50 0.22 General Timber Timber Thinnings m3 1,733.33 16.67 3,835.87 36.88 Transmission Poles m3 9,013.33 86.67 19,946.51 191.79 Timber 40 cm m3 11,266.67 108.33 24,933.13 239.74 Timber 20 - 40 cm m3 6,066.67 58.33 13,425.53 129.09 Timber 14 - 20 cm m3 2,166.67 20.83 4,794.83 46.10 Timber Mixture m3 3,466.67 33.33 7,671.73 73.77 Inputs Seed Potato kg 140.00 1.35 126.00 1.21 Pole Beans kg 500.00 4.81 450.00 4.33 Cabbage g 35.00 0.34 31.50 0.30 Leeks g 12.50 0.12 11.25 0.11 Fertilizer, Chemicals, and Equipment Potato/Vegetable Fertilizer Mixture kg 25.00 0.24 22.50 0.22 Urea kg 36.00 0.35 54.72 0.53 TSP Fertilizer kg 29.00 0.28 53.65 0.52 NPK kg 34.50 0.33 31.05 0.30 Rock Phosphate kg 16.80 0.16 15.12 0.15 Pesticide (leeks) litre 2,700.00 25.96 2,430.00 23.37 Fungicide litre 1,700.00 16.35 1,530.00 14.71 Pesticide (potato, cabbage) litre 2,000.00 19.23 1,800.00 17.31 Lime Agricultural kg 7.00 0.07 6.30 0.06 Farmyard Manure lorryload 5,000.00 48.08 4,500.00 43.27 Liquid Manure litre 1,000.00 9.62 900.00 8.65 Nursery fertilizer kg 34.50 0.33 31.05 0.30 Sprayer Hire day 300.00 2.88 270.00 2.60 Pumping Costs 0.00 0.00 Labour, Agricultural Peak day 250.00 2.40 225.00 2.16 Labour, Off Season day 200.00 1.92 180.00 1.73
Exchange Rate US$ 1 = SLRs 104 Standard Conversion Factor (SCF) 0.90 Log Prices are for 2005 cm=centimeter, m3=cubic meter, g=gram, kg=kilogram Source: Colombo Wholesale Market
Appendix 7 49
Table A7.6: Conservation-Oriented Farming Systems: Potatoes under Rainfed Cultivation
Description Without Project With Project Unit (erosion cotinues) (erosion controlled) Quantity Unit Price Cost Quantity Unit Price Cost
Cultivation Costs Labour (implicit wage) day 390 250 97,500 476 250 119,000 Seeds kg 2,100 140 294,000 2138 140 299,320 Fertilzer kg 3,000 25 75,000 1950 25 48,750 Lime kg 1,000 7 7,000 1000 7 7,000 Manure qty 8 5,000 40,000 5 5000 25,000 Pesticide litre 22 2,000 44,000 22 2000 44,000 Sprayer Hire days 6 300 1,800 6 300 1,800 Total Cost of Cultivation 559,300 544,870
Potato Production 11,763 72 12,963 72
Total Gross Return 846,936 933,336 Total Gross Return including family labour 944,436 1,052,336
Net Return 287,636 507,466 % Net Return 34.0% 54.4% Total Labour Requirement (person - days) 390 476
Family Labour Requirement (person - days) 390 476
Net Return per family day (Rupees) 738 1,066 qty=quantity,kg=kilogram Source: Dealers in Agrochemicals
50 Appendix 7
Table A7.7: Computation of Return on Crops per Hectare
Production Price Price Return - Financial Return - Economic Description (Financial)(Economic) Gross Net Gross Net kg Rs/kg Rupees Rupees
A Without Project - Rainfed Potato 11,763 72 64.8 846,936 287,636 762,242 258,872 Pole Beans 11,443 55 49.5 629,365 213,745 566,429 192,370 Cabbage 18,237 45 40.5 820,665 278,714 738,599 250,842 Leeks 18,302 55 49.5 1,006,610 341,864 905,949 307,678
B Without Project-Irrigated Potato 13,400 72 64.8 964,800 524,573 868,320 472,116 Pole Beans 12,000 55 49.5 660,000 358,850 594,000 322,965 Cabbage 23,237 45 40.5 1,045,665 568,541 941,099 511,687 Leeks 22,777 55 49.5 1,252,735 681,127 1,127,462 613,014
C With Project - Rainfed Potato 12,963 72 64.8 933,336 316,979 840,002 285,281 Pole Beans 12,243 55 49.5 673,365 228,688 606,029 205,819 Cabbage 19,533 45 40.5 878,985 298,520 791,087 268,668 Leeks 19,198 55 49.5 1,055,890 358,601 950,301 322,741
D With Project - Irrigated Potato 14,600 72 64.8 1,051,200 571,550 946,080 514,395 Pole Beans 12,800 55 49.5 704,000 382,773 633,600 344,496 Cabbage 25,533 45 40.5 1,148,985 624,717 1,034,087 562,245 Leeks 23,673 55 49.5 1,302,015 707,921 1,171,814 637,129 kg=kilogram, Rs/kg= rupees per kilogram Source: ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project, Manila.
20. In Table A7.9, a farm model is given for a typical 0.25 ha farm under rainfed and irrigated conditions, the extents devoted to each crop are as shown in Table A7.8: Table A7.8: Farm Model for 0.25 ha Farm
Item Rainfed Irrigated (ha) Potato 0.125 0.125 Pole Beans 0.063 0.006 Cabbage 0.035 0.003 Leeks 0.028 0.116 Total 0.251 0.250 ha = hectare. Source: ADB. 1997. RRP on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project
21. The incremental production for a 0.25 ha farm under conditions with and without the Project for each of 25 years is shown in the Table A7.9. Table A7.10 shows the incremental net farm income for a typical 0.25 ha farm both in financial and economic prices. 22. The project costs are represented by the payment made to farmers for soil conservation, namely SLRs14,444 per hectare at current prices.
Table A7.9: Conservation-Oriented Farming Systems: Farm Model
Cropping Pattern, Typical 0.25 ha. Farm Rainfed Irrigated Farm Details (ha) Maha Yala Potatoes 0.125 0.125 Pole Beans 0.063 0.006 Cabbage 0.035 0.003 Leeks 0.028 0.116 Net Land Area (ha) 0.251 0.250 Cropping Intensity % 100 100 Area (unchanged over time) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 to25 Potatoes Rainfed ha 0.125 Pole Beans rainfed ha 0.063 Cabbage Rainfed ha 0.035 Leeks Rainfed ha 0.028 Potatoes Irrigated ha 0.125 Pole Beans Irrigated ha 0.006 Cabbage Irrigated ha 0.003 Leeks Irrigated ha 0.116 Yield decreases (without project) to year 4 Potatoes Rainfed kg/ha 12,363 12,213 12,063 11,913 11,763 11,763 11,763 11,763 11,763 11,763 11,763 Pole Beans Rainfed kg/ha 11,843 11,743 11,643 11,543 11,443 11,443 11,443 11,443 11,443 11,443 11,443 Cabbage Rainfed kg/ha 18,885 18,723 18,561 18,399 18,237 18,237 18,237 18,237 18,237 18,237 18,237 Leeks Rainfed kg/ha 18,750 18,638 18,526 18,414 18,302 18,302 18,302 18,302 18,302 18,302 18,302 Potatoes Irrigated kg/ha 14,000 13,850 13,700 13,550 13,400 13,400 13,400 13,400 13,400 13,400 13,400 Pole Beans Irrigated kg/ha 12,400 12,300 12,200 12,100 12,000 12,000 12,000 12,000 12,000 12,000 12,000 Cabbage Irrigated kg/ha 23,885 23,723 23,561 23,399 23,237 23,237 23,237 23,237 23,237 23,237 23,237 Leeks Irrigated kg/ha 23,225 23,113 23,001 22,889 22,777 22,777 22,777 22,777 22,777 22,777 22,777 Yield increases (with project) to year 4 assuming full soil conservation Potatoes Rainfed kg/ha 12,363 12,513 12,663 12,813 12,963 12,963 12,963 12,963 12,963 12,963 12,963 Pole Beans Rainfed kg/ha 11,843 11,943 12,043 12,143 12,243 12,243 12,243 12,243 12,243 12,243 12,243 Cabbage Rainfed kg/ha 18,885 19,047 19,209 19,371 19,533 19,533 19,533 19,533 19,533 19,533 19,533 Leeks Rainfed kg/ha 18,750 18,862 18,974 19,086 19,198 19,198 19,198 19,198 19,198 19,198 19,198 Potatoes Irrigated kg/ha 14,000 14,150 14,300 14,450 14,600 14,600 14,600 14,600 14,600 14,600 14,600
Pole Beans Irrigated kg/ha 12,400 12,500 12,600 12,700 12,800 12,800 12,800 12,800 12,800 12,800 12,800
Cabbage Irrigated kg/ha 23,885 24,297 24,709 25,121 25,533 25,533 25,533 25,533 25,533 25,533 25,533
Leeks Irrigated kg/ha 23,225 23,337 23,449 23,561 23,673 23,673 23,673 23,673 23,673 23,673 23,673
Incremental Production 0.25 Ha Farm
Potatoes Rainfed kg 0 38 75 113 150 150 150 150 150 150 150
Pole Beans Rainfed kg 0 13 25 38 50 50 50 50 50 50 50
Cabbage Rainfed kg 0 11 23 34 45 45 45 45 45 45 45 Leeks Rainfed kg 0 6131925252525252525
Potatoes Irrigated kg 0 38 75 113 150 150 150 150 150 150 150
Pole Beans Irrigated kg01245555555
Cabbage Irrigated kg02357777777
Leeks Irrigated kg 0 26 52 78 104 104 104 104 104 104 104
ha= hectare, kg=kilogram, kg/ha=kilogram per hectare
Source: ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project, Manila.
Append ix 7 51
52
Appe Table A7.10: Conservation-oriented Farming Systems: Incremental Net Farm Income – Financial Prices
ndix 7 Net Income SLRs Item Area (ha) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 to 25
Total Extent (ha) 4,500 (A) Without Project, 4 Years Continuing Erosion Potatoes Rainfed 0.125 37,788 37,330 36,871 36,413 35,955 35,955 35,955 35,955 35,955 35,955 35,955 Pole Beans Rainfed 0.063 13,937 13,819 13,701 13,584 13,466 13,466 13,466 13,466 13,466 13,466 13,466 Cabbage Rainfed 0.035 10,102 10,015 9,928 9,842 9,755 9,755 9,755 9,755 9,755 9,755 9,755 Leeks Rainfed 0.028 9,807 9,748 9,689 9,631 9,572 9,572 9,572 9,572 9,572 9,572 9,572 Potatoes Irrigated 0.125 68,508 67,774 67,040 66,306 65,572 65,572 65,572 65,572 65,572 65,572 65,572 Pole Beans Irrigated 0.006 2,225 2,207 2,189 2,171 2,153 2,153 2,153 2,153 2,153 2,153 2,153 Cabbage Irrigated 0.003 1,753 1,741 1,729 1,718 1,706 1,706 1,706 1,706 1,706 1,706 1,706 Leeks Irrigated 0.116 80,565 80,176 79,788 79,399 79,011 79,011 79,011 79,011 79,011 79,011 79,011 Subtotal SLRs 224,684 222,810 220,936 219,062 217,189 217,189 217,189 217,189 217,189 217,189 217,189 $ 2,160 2,142 2,124 2,106 2,088 2,088 2,088 2,088 2,088 2,088 2,088 (B) With Project, 4 Year Transition to New Yields Potatoes Rainfed 0.125 37,788 38,247 38,705 39,164 39,622 39,622 39,622 39,622 39,622 39,622 39,622 Pole Beans Rainfed 0.063 13,937 14,054 14,172 14,290 14,407 14,407 14,407 14,407 14,407 14,407 14,407 Cabbage Rainfed 0.035 10,102 10,188 10,275 10,362 10,448 10,448 10,448 10,448 10,448 10,448 10,448 Leeks Rainfed 0.028 9,807 9,865 9,924 9,982 10,041 10,041 10,041 10,041 10,041 10,041 10,041 Potatoes Irrigated 0.125 68,508 69,242 69,976 70,710 71,444 71,444 71,444 71,444 71,444 71,444 71,444 Pole Beans Irrigated 0.006 2,225 2,243 2,261 2,279 2,297 2,297 2,297 2,297 2,297 2,297 2,297 Cabbage Irrigated 0.003 1,753 1,783 1,814 1,844 1,874 1,874 1,874 1,874 1,874 1,874 1,874 Leeks Irrigated 0.116 80,565 80,953 81,342 81,730 82,119 82,119 82,119 82,119 82,119 82,119 82,119 Subtotal SLRs 224,684 226,576 228,468 230,360 232,252 232,252 232,252 232,252 232,252 232,252 232,252 $ 2,160 2,179 2,197 2,215 2,233 2,233 2,233 2,233 2,233 2,233 2,233
Incremental Net Farm Income (0.25ha farm) SLRs 0 3,766 7,532 11,298 15,063 15,063 15,063 15,063 15,063 15,063 15,063 $ 0 36 72 109 145 145 145 145 145 145 145
Farmer's Soil Conservation Investment 3,611 3,611 3,611 3,611 3,611 3,611 3,611 3,611 3,611 3,611 3,611 Farmer's Net Benefit (0.25 ha.Farm) Financial Prices SLRs (3,611) 155 3,921 7,687 11,453 11,453 11,453 11,453 11,453 11,453 11,453 $ (35) 1 38 74 110 110 110 110 110 110 110 Economic Prices SLRs (3,249) 140 3,529 6,918 10,308 10,308 10,308 10,308 10,308 10,308 10,308 $ (31) 1 34 67 99 99 99 99 99 99 99
( ) = negative, ha=hectare Sources: ADB. 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project, Manila and PCR Mission Computations
Appendix 7 53
D. Economic Analysis
1. Derivation of Benefits
23. Economic benefits are derived from two sources, namely agriculture and the forestry components. 24. Forestry benefits derive from the rehabilitation and protection of forests through (i) buffer zone plantings, (ii) timber farms, and (iii) the development of home gardens. 25. The agricultural benefits arise from conservation-oriented farming systems. 26. The benefit streams from buffer zone plantings, timber farms, and home gardens were first derived in financial terms and then converted to economic values. 27. The benefits from the potato-growing and erosion-control activities were derived from the farm model (Table A7.9) and aggregated to the total planting achievement of 12,196 ha, and then converted to economic values. 2. Economic Internal Rate of Return
28. Details of the economic analysis in respect of the forestry and the conservation-oriented farming sub-components were aggregated and the net benefits are shown in respect of each year in Table A7.11. The base case economic internal rate of return (EIRR) was estimated at 39.7%, which is a highly acceptable level and compares favorably with the EIRR of 22% at appraisal. 29. The higher EIRR is explained by the change in project emphasis from forestry to conservation-oriented farming. Forestry requires a long period before yielding benefits, so the discounted net present value (NPV) is relatively low. In contrast, farming activities yield high returns in the first year, and the benefit stream continues over the whole period, giving these activities a high discounted NPV. As the conservation-oriented farming component exceeded the appraisal target by 300% and the forestry components achieved only 46% of targets, the overall combined EIRR could be expected to increase. 3. Environmental Benefits
30. The Project also had environmental benefits. Increased tree cover and reduced soil erosion will improve the hydrological balance of the upper watersheds and contribute to reduced siltation of downstream reservoirs. 31. There was inadequate information to quantify the environmental benefits. 32. The high level of the EIRR achieved from the forestry and agricultural components would be further increased with the aggregation of environmental net benefits, if their computation were possible. 33. The EIRR is highly acceptable for the Project, even without taking into consideration the environmental benefits.
54 Appendix 7
8 9 6 0 0 .0 .8 .0 .0 .0 .0 .8 .8 . PCR 5 30 0 0 0 0 0 0 02 02 02 2,19 8,78 20 5 5 5 1 1 and la Mani 4 8 6 9 0 9 8 .0 oject, 40 5 0.0 2.8 0.0 r 0.0 2.8 0.0 0.0 2.8 0 , 0 0 0 2,1 8,7 2 2029 5 5 5 t P 1 1 n geme 4 2 7 3 0 2 3 7 2 0 0 08 . Mana 196 4 789 5 08 0 0. , , , 25. 66. 66. 25. 2 2 8 20 395. 487. 395. 1 1 tershed a 6 4 9 8 per W 3 9 8 0 .2 .8 .6 .6 .0 .9 .0 .8 . .2 40 5 07 8 9 8 0.0 6 0 8 0 9 0 8 , 1 0 8 0 1 0 8 1 2 2 2 1 4 1 2 12,1 18,7 the Up
r ) 0 4 0 Lanka fo 8 0 .4 6 .0 .4 . 196 789 4 508 7 0.8 0.8 0 0.0 7 0.0 0 , , ( Sri 37.0 37.8 2 8 2, 200 214.6 258.2 214.6 1 1 ic of publ is 0 1 6 0 9 9 8 8 6 0 8 8 4 04 1 0 .7 . .6 .6) . .7 .6 . .5 .5 .0 . st Re s i 4 5 5 2 1 7 6 1 0 0 2 3. , ( 90 1 005 21 97 y 2,19 8,78 2 2 109 1 1 ocial ic S t a 6 3 9 mocr 3 7 .1 . 36 677 163 789 150 508 0.1) 9.9) 0 0.1 8 , ( ( (8.3) 27.0 10.0 2,0 2 (27.0) (45.3) 2004 11, 18, he De
to t Loan 7 7 4) 3) 1) 4 9 6 3 7 45 5 .9) .6) . . . 598 3 345 1 3 03 3 1 3 8. ,569 ,500 , , ( ( 3 1 2 2 9 8,639 2 (33. (18. (57. 20 1 Proposed a n o 1 3 9 9 0 0 9 1 1 2 8 20 2 0 3 .0 .6 . ors 5 1 28 3 5.0) 7.6) 3.7) 3.7 4.1) 0.4) 5 7 4 ( ( 002 2 2 5 9 5 6,6 1,8 7,0 2, ( ( ( 2 rect 16,1 Table A7.11: Economic Anal of Di d r pees ) ) ) ) ) 2 Boa 0 1 1 . 291 576 180 3.9 2.1 4 ,450 ,842 ,206 , ,769 (3.9 (2.1 36.9 44.0 86.9 36.9 4 the 9 2 5 5 1 ( ( ( 200 nkan Ru i La r ent to Rs= S Presid 9 4 4 9 8 3 3 8 L % 1) 3) 7 5 7 000 . . .7) .7) .9) . .1 .3 7 6% 4% 2% 16 16 3 9 0 0 9 3 9 0. 9. . . . ,15 ( ( 3 5 3 4 6 4 5 the 4,15 4 2,36 2,36 1,19 1,19 ( ( f 39. 102 2 1 4 ( 998/2 turn, S 1 e on o r of dati e en ion m ll al rat m n o r c te n Rs mi L s nd Re - S n n n n IRR=i o o o o e i i i i l l l l v ent) n n n n n Garden mil mil mil mil lati
o o o o ) ) ) i i i i l l l l e Report a a a a armers) Item h h h Rs Rs Rs Rs g ing L L L L hectare, mil mil mil mil ( ( ( ons
ion ion ion m e e e tin Cumu r Hom ll ll ll n 997. v v v i i n its (F ati - t Rs Rs Rs Rs - S - S - S - S ti ti ti io ha= a 1 l Fa ll s . s a a a s Compo m m
s n n s s e, ow ow ow ow l l l l enef v on Rs mi R R mi ) ) ) i rm ent of mul mul mul t L L L rde rde a mer' ati a one P a a F S S Rs (ha Cu (ha
Cu (ha Cu r - S - - - Net B lopm nues - SL nues - SL nues - SL nues - SL s s s s on Compu neg t i t t er Z t e e e e e ent ent ent ent ent ent s s s t t tal t t t t R R R mbe ss o o i ources: ADB RR (Far Buff Rev Co Net Cash F Rev C Net Cash F Rev C Net Cash F Rev Cos Net Cash F To I Ex Ex IR Ti Ex Ex IR Dev No.of G No.of G IR Conserv Ex Ex ( ) = S M
Appendix 8 55
ACTUAL PROJECT COSTS
Table A8.1: Budget Utilization by Category (ADB Funds) ($) Category or Subloan Original Last Revised Amount Undisbursed % Original % Revised Allocation Allocation Disbursed Balance Budget Used Budget Used
1 Civil Works 501,920 504,663 839,096 (334,433) 167.2 166.3 2Survey, Design and Mapping 699,975 756,775 315,648 441,127 45.1 41.7
3 Extension and Demonstration 299,796 281,228 351,346 (70,118) 117.2 124.9 4 Institutional Strengthening 999,771 1,040,822 682,222 358,600 68.2 65.5 5a Equipment and Furniture 299,796 307,192 213,740 93,452 71.3 69.6 5b Vehicles 800,360 852,651 285,742 566,909 35.7 33.5 6Consulting Services 1,200,539 1,221,450 1,026,379 195,071 85.5 84.0 7 Training 2,299,338 1,482,248 369,916 1,112,332 16.1 25.0 8a Reforestation 3,900,057 3,061,478 2,647,781 413,697 67.9 86.5 8b Soil Conservation 3,798,317 3,910,610 4,376,345 (465,735) 115.2 111.9 8c Resettlement 0 903,341 3,595 899,746 0.0 0.4 9 Service Charges 500,564 531,875 364,615 167,260 72.8 68.6 10 Unallocated 1,299,567 521,812 0 521,812 0.0 0.0 Total 16,600,000 15,376,145 11,476,425 3,899,720 69.1 74.6
( ) =negative Source: Basic Data Section of Report
Table A8.2: Budget Utilization by Component and Fund Source (All Funds) ($‘000)
Component Appraisal Estimate Actual Cost % Foreign % Local % Total Foreign Local Total Cost Foreign Local Total Cost Exchange Budget Budget Exchange Currency Exchange Currency Budget Used Used Used
Participatory Rehabilitation and A Protection of Forests 800 5,100 5,900 563 3,942 4,505 70.4 77.3 76.4 Conservation Oriented Farming B Systems 1,200 7,400 8,600 1,167 5,824 6,991 97.3 78.7 81.3 Project Management and C Institutional Strengthening 1,600 2,700 4,300 1,239 3,306 4,545 77.4 122.4 105.7
Physical Contingencies 400 1,600 2,000
Price Contingencies 400 2,000 2,400 Total Cost before Service Charge 4,400 18,800 23,200 2,969 13,072 16,041 67.5 69.5 69.1 Service Charge during Construction 500 0 500 365 0 365 73.0 0.0 73.0
Total 4,900 18,800 23,700 3,334 13,072 16,406 68.0 69.5 69.2
Source: Component costs estimated from category-wise figures (Basic Data section of report)
56 Appe
Table A8.3: Actual Costs per Category per Year (ADB Costs)
ndix Category Category Year 8
No. Name 1998 1999 2000 2001 2002 2003 2004 2005 2006 Total 01 Civil Works 5,388 0 72,580 53,452 147,953 136,445 177,539 245,739 0 839,096 02 Survey, Design, Mapping 2,225 0 17,593 18,491 22,407 50,775 109,676 63,987 30,494 315,648 03 Extension and Demonstration 0 0 54,824 76,191 139,147 81,184 0 0 0 351,346 04 Institutional Strengthening 20,486 31,468 93,086 79,649 110,479 128,264 104,423 104,220 10,147 682,222 05A Eqpt, Veh, Furn-Eqpt. 6,766 72,186 85,445 6,489 18,536 9,386 9,238 266 5,428 213,740 05B Eqpt, Veh, Furn-Vehicles 58,592 150,287 13,158 39,093 0 0 0 0 24,612 285,742 06 Consulting Services 189,625 228,625 215,487 90,336 103,040 142,050 20,300 4,339 32,577 1,026,379 07 Training 198 0 65,402 105,090 52,602 54,742 88,451 2,900 531 369,916 08A Field Activities-Reforestation 29,154 39,023 312,056 244,376 515,196 699,896 419,653 291,753 96,674 2,647,781 08B Field Activities-Soil Conservation 7,750 3,570 311,819 379,914 674,599 971,495 927,015 805,698 294,485 4,376,345 08C Resettlement Activities 0 0 0 0 0 0 0 3,595 0 3,595 09 Service Charge 0 2,673 9,376 20,530 33,040 57,572 82,614 103,392 55,418 364,615 10Unallocated 0000000000 99Imprest Account 0000000000 Total 320,184 527,832 1,250,826 1,113,611 1,816,999 2,331,809 1,938,909 1,625,889 550,366 11,476,425 Source: Asian Development Bank Records
PROJECT IMPLEMENTATION SCHEDULE
Table A9.1: Schedule at Appraisal (1997)
Component and Activities Year and Quarter Year 0 (1997) Year 1 (1998) Year 2 (1999) Year 3 (2000) Year 4 (2001) Year 5 (2002) Year 6 (2003) Year 7 (2004) (Project Start Jan 98, End Dec 04: 7 yrs) 12341234123412341234123412341234 A. Participatory Rehabilitation and Protection of Forests 1. Buffer Zone Planting 2. Timber Woodlots Planting 3. Home Gardens 4. Forest & Wilderness Area Boundary Marking 5. Field Supporting and Social Mobilization
B. Conservation-oriented Farming Systems 1. Vegetative Soil Conservation Acivities 2. Physical Soil Conservation Activities 3. Hydrological and Erosion Monitoring 4. Field Supporting and Social Mobilization
5. Survey, Mapping & titling
C. Project Management & Institutional Strengthening
1. Estabishment of PMO
2. Establishment of Committees
3. PMO and Committee Activities
4. Training
5. Consulting Services: International
Domestic
6. Procurement of Vehicles and Equipment
Monitoring and Evaluation
Midterm Review Appen Fulfillment of Loan Effectivity Conditions dix Source: ADB 1997. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the Democratic Socialist Republic of Sri Lanka for the Upper Watershed Management Project . Manila 9
57
58 Appendix 9
6 ☼ w 200 e i v 412 Re ard 5 r gu 200 23 Safe $ ► t 341 ☼ 04 ntac 20 ▲ Co ▲ ▲ 412 Admin 3 t 0 0 2 ojec
123 : ty i v ti pq c r Special Pr e t nt A 02 te 20 $ 234 Quar ►▲ rmit e t nt e In and r m a e e Y urs 341 b s 001 ). 2 Di O n M Loa rts" (P 412 o
R 0 Rep s MT 200 23 ▲▲ res og r l P a w u e i n v e 341 9 R "An 9 g P 9 an n 1 M Table A9.2: Actual Schedule Lo eni h d UW Forests f 412 ngt mn o e rt" an
r s o n o 98 St pti em Rep e 19 n st Inc tio ional otection le 123 r mno ut mp it ing Sy o n: io m Inst ct C ss s i es i je ie Far M it ro vit ) s R v d ti i ts) ) "P d e and litation & P e c s e e PC g r t r e t
nt bi Ac Ac s SL it a in n y d e d oj o ent k e r 5 g by m e e . r t t ri n d ew G sh n n i p m i m O a a g nce 7 e r l l e o o p O : p m o d i n a Reha e ti ti e M i p Ma 5
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Appendix 10 59
LOAN COVENANT COMPLIANCE
A. Particular Covenants as Specified under Article IV of Loan Agreementa
Covenant Reference to Status of Compliance Loan Agreement The Borrower shall cause MFE, the Section 4.01 (a) Complied with. Implementing Agencies and the Cooperating Agencies to carry out the Project with due diligence and efficiency and in conformity with sound administrative, financial, engineering, environmental, soil conservation, and watershed management practices. In the carrying out of the Project and Section 4.01 (b) Substantially complied with. operation of the Project facilities, the Borrower shall perform, or cause MFE, the Implementing Agencies and the Cooperating Agencies, to perform, all obligations set forth in Schedule 6 to this Loan Agreement. The Borrower shall make available to Section 4.02 Complied with. MFE, the Implementing Agencies and the Cooperating Agencies, promptly as needed, the funds, facilities, services, land and other resources which are required, in addition to the proceeds of the Loan, for the carrying out of the Project and for the operation and maintenance of the Project facilities, including the vehicles, equipment and buildings to be provided under the Project. In the carrying out of the Project, the Section 4.03 (a) Complied with. Borrower shall cause competent and qualified consultants and contractors, acceptable to the Borrower and the Bank, to be employed to an extent and upon terms and conditions satisfactory to the Borrower and the Bank. The Borrower shall cause MFE, the Section 4.03 (b) Complied with. Implementing Agencies and the Cooperating Agencies, to carry out the Project in accordance with plans, specifications, work schedules and construction methods acceptable to the Borrower and the Bank. The Borrower shall furnish, or cause to be furnished, to the Bank, promptly after their preparation, such plans, specifications and work
60 Appendix 10
Covenant Reference to Status of Compliance Loan Agreement schedules, and any material modifications subsequently made therein, in such detail as the Bank shall reasonably request. The Borrower shall ensure that the Section 4.04. Complied with. activities of MFE, the Implementing Agencies and the Cooperating Agencies, with respect to the carrying out of the Project and operation of the Project facilities are conducted and coordinated in accordance with sound administrative policies and procedures. The Borrower shall make Section 4.05 (a). Complied with. arrangements satisfactory to the Bank for insurance of the Project facilities to such extent and against such risks and in such amounts as shall be consistent with sound practice. Without limiting the generality of the Section 4.05 (b). Complied with. foregoing, the Borrower undertakes to insure, or cause to be insured, the goods to be imported for the Project and to be financed out of the proceeds of the Loan against hazards incident to the acquisition, transportation and delivery thereof to the place of use or installation, and for such insurance any indemnity shall be payable in a currency freely usable to replace or repair such goods. The Borrower shall cause MFE, the Section 4.06 (a). Complied with. Implementing Agencies and the Cooperating Agencies to maintain, records and accounts adequate to identify the goods and services and other items of expenditure financed out of the proceeds of the Loan, to disclose the use thereof in the Project, to record the progress of the Project (including the cost thereof) and to reflect, in accordance with consistently maintained sound accounting principles, the operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the
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Covenant Reference to Status of Compliance Loan Agreement Project facilities, or any part thereof. The Borrower shall (i) maintain, or Section 4.06 (b) (i) Complied cause MFE and the Implementing (ii) Complied Agencies to maintain, separate (iii) Complied accounts for the Project; (ii) have such accounts and related financial (iv) Complied statements audited annually, in accordance with appropriate auditing standards consistently applied, by independent auditors whose qualifications, experience and terms of reference are acceptable to the Bank; (iii) furnish to the Bank, as soon as available but in any event not later than 12 months after the end of each related fiscal year, certified copies of such audited accounts and financial statements and the report of the auditors relating thereto (including the auditors' opinion on the use of the Loan proceeds and compliance with the covenants of this Loan Agreement as well as on the use of the procedures for imprest account), all in the English language; and (iv) furnish to the Bank such other information concerning such accounts and financial statements and the audit thereof as the Bank shall from time to time reasonably request. The Borrower shall enable the Bank, Section 4.06 (c) Complied with. upon the Bank's request, to discuss the Borrower's financial statements for the Project and its financial affairs related to the Project from time to time with the Borrower's auditors, and shall authorize and require any representative of such auditors to participate in any such discussions requested by the Bank, provided that any such discussion shall be conducted only in the presence of an authorized officer of the Borrower unless the Borrower shall otherwise agree. The Borrower shall furnish, or cause Section 4.07 (a). Complied with. MFE and the Implementing Agencies to furnish, to the Bank all such reports and information as the Bank shall reasonably request
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Covenant Reference to Status of Compliance Loan Agreement concerning (i) the Loan, and the expenditure of the proceeds and maintenance of the service thereof; (ii) the goods and services and other items of expenditure financed out of the proceeds of the Loan; (iii) the Project; (iv) the administration, operations and financial condition of the agencies of the Borrower responsible for the carrying out of the Project and operation of the Project facilities, or any part thereof; (v) financial and economic conditions in the territory of the Borrower and the international balance-of-payments position of the Borrower; and (vi) any other matters relating to the purposes of the Loan. Progress Reports Without limiting the generality of the Section 4.07 (b). Complied with. foregoing, the Borrower shall furnish, or cause MFE to furnish, to the Bank six-monthly reports on the carrying out of the Project and on the operation and management of the Project facilities. Such reports shall be submitted in such form and in such detail and within such a period as the Bank shall reasonably request, and shall indicate, among other things, progress made and problems encountered during the six months under review, steps taken or proposed to be taken to remedy these problems, and proposed program of activities and expected progress during the following six months. Promptly after physical completion Section 4.07 (c). Complied with. Borrower and of the Project, but in any event not Bank agreed to a submission later than three (3) months date of three months after loan thereafter or such later date as may closure. Report submitted on be agreed for this purpose between February 2006. the Borrower and the Bank, the Evaluation Study reports on Borrower shall cause MFE to (i)Impacts of Project Activities on prepare and furnish to the Bank a Rehabilitation of Natural report, in such form and in such Resource Base ; and (ii) detail as the Bank shall reasonably Socioeconomic Impacts were request, on the execution and initial submitted in January 2006. operation of the Project, including its cost, the performance by the Borrower of its obligations under this
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Covenant Reference to Status of Compliance Loan Agreement Loan Agreement and the accomplishment of the purposes of the Loan, including the impact of the Project on beneficiaries. The Borrower shall enable the Section 4.08. Complied with. Bank's representatives to inspect the Project, the goods financed out of the proceeds of the Loan, and any relevant records and documents. The Borrower shall ensure that the Section 4.09. Complied with. Project facilities are operated, maintained and repaired in accordance with sound administrative, financial, engineering, environmental, soil conservation, watershed management, and maintenance and operational practices. It is the mutual intention of the Section 4.10 (a). Complied with. Borrower and the Bank that no other external debt owed a creditor other than the Bank shall have any priority over the Loan by way of a lien on the assets of the Borrower. To that end, the Borrower undertakes (i) that, except as the Bank may otherwise agree, if any lien shall be created on any assets of the Borrower as security for any external debt, such lien will ipso facto equally and ratably secure the payment of the principal of, and service charge and any other charge on, the Loan; and (ii) that the Borrower, in creating or permitting the creation of any such lien, will make express provision to that effect. The provisions of paragraph (a) of Section 4.10 (b). Complied with. this Section shall not apply to (i) any lien created on property, at the time of purchase thereof, solely as security for payment of the purchase price of such property; or (ii) any lien arising in the ordinary course of banking transactions and securing a debt maturing not more than one year after its date. The term "assets of the Borrower" Section 4.10 (c). Complied with. as used in paragraph (a) of this
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Covenant Reference to Status of Compliance Loan Agreement Section includes assets of any political subdivision or any agency of the Borrower and assets of any agency of any such political subdivision, including the Central Bank of Sri Lanka and any other institution performing the functions of a central bank for the Borrower.
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B. Schedules as Specified under the Loan Agreement (footnote a) Schedule 3: Allocation and withdrawal of Loan proceeds Schedule 5: Consultants Schedule 6: Execution of Project and Operation of Project Facilities: Financial Matters
Covenant Reference to Loan Status of Compliance Agreement I. IMPLEMENTATION ARRANGEMENTS A. Executing Agency and Project Management Office Imprest Account Schedule 3.Para 8 Complied with. Except as the Bank may otherwise agree, the Borrower shall establish within three months of the Effective Date, an imprest account at the Central Bank of Sri Lanka for the reimbursement of small expenditures of less than $50,000 equivalent. The imprest account shall be established, managed, replenished and liquidated in accordance with the Bank’s “Loan Disbursement Handbook” dated June 1996, as amended from time to time, and detailed arrangements agreed upon between the Borrower and the Bank. The initial amount to be deposited into the imprest account shall not exceed the equivalent of SDR 370,000 The consultants shall be selected and Schedule 5. Para 3 Complied with. engaged by MFE, in consultation with MAL, in accordance with the following procedures. (a) Invitation for Proposals. The invitation to submit proposals and all related documents shall be approved by the Bank before they are issued. For this purpose, three copies of the draft invitation to submit proposals, a list of consultants to be invited, the proposed criteria for evaluation of the proposals and other related documents shall be submitted to the Bank. A period of at least 60 days shall be allowed for submission of proposals. A copy of the final invitation as issued, together with all related documents, shall be furnished to the Bank for information promptly after issuance.
(b) Draft Contract. A draft contract with consultants shall be furnished to the Bank for approval sufficiently before the
66 Appendix 10
Covenant Reference to Loan Status of Compliance Agreement commencement of evaluation of proposals. (c) Execution of Contract. After the conclusion of negotiations but before the signing of the contract, the Bank shall be furnished with (i) the contract as negotiated for approval and (ii) the evaluation of the proposals. Promptly after the contract is signed, the Bank shall be furnished with three copies of the signed contract. If any substantial amendment of the contract is proposed after its execution, the proposed changes shall be submitted to the Bank for prior approval. MFE shall be the Project Executing Schedule 6. Para 1. Complied with. Agency for the Project in close cooperation with MAL. MFE shall have overall responsibility for the Project and shall delegate the coordination, supervision, execution, implementation, monitoring and management of the Project to the PMO. MFE shall establish at all times two field Schedule 6. Para 2. Complied with. offices of the PMO in Welimada and Balangoda. The PMO shall be headed by a full-time Project Director acceptable to the Bank, who shall be assisted by an adequate number of suitably qualified staff from the Forest Department of MFE and DOA. The Project Director shall report directly to the Secretary of MFE, and shall work in close collaboration with the Conservator of the Forest Department of MFE and the Director General of DOA. MFE and MAL shall appoint a Deputy Director in each of the Balangoda and Welimada field offices, respectively. The PMO shall be responsible for the Schedule 6. Para 3. Complied with. day-to-day activities of the Project in cooperation with the Implementing Agencies and the Cooperating Agencies. Specifically, the principal functions and responsibilities of the PMO shall include: (i) development and dissemination of the annual work program and estimated budget for the Project; (ii) supervision of consultants; (iii) procurement activities in cooperation with MFR; (iv) Project coordination and guidance; (v) Project supervision,
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Covenant Reference to Loan Status of Compliance Agreement monitoring and evaluation; (vi) preparation and distribution of training manuals and materials; (vii) training of trainers; and (viii) preparation and distribution of progress reports, audited financial statements and reimbursement claims. B. Implementing and Cooperating Agencies The Implementing Agencies include the Schedule 6. Para 4. Complied with. following: (i) the Forest Department of MFE, which shall be responsible for implementing Part I of the Project, except for the boundary marking, land survey and mapping activities, in cooperation with regional forest officers and social mobilizers; (ii) the Department of Agriculture of MAL, which shall be responsible for implementing Part II of the Project in cooperation with the provincial councils and agriculture departments concerned of the Central, Uva, and Sabaragamuwa provinces. The Cooperating Agencies include the Schedule 6. Para 5. Complied with following: (i) the Department of Wildlife The MASL has prepared Conservation of Ministry of Public quarterly and annual Administration, Home Affairs and reports on hydrological Plantation Industries, which shall be monitoring. responsible for implementing the boundary marking activities under Part l (a) of the Project in the Peak Wilderness Area of the Walawe Ganga and Kalu Ganga watersheds; (ii) the Survey Department of MAL, which shall be responsible for the land survey, mapping and boundary marking activities under Parts l (a) and (b) of the Project in forest lands in the Walawe Ganga and Kalu Ganga watersheds in cooperation with the Forest Department of MFE and DOA.; (iii) the Land Commissioner's Department of MAL which shall be responsible for the regularization of land tenure for titleless occupants and users of the Borrower's land within the Project area under Part l (b) of the Project; (iv) MASL for implementing the hydrological monitoring to measure the impact of the activities under Part II of the Project as described more fully in paragraph 28 of this Schedule. II. NATIONAL, PROVINCIAL AND FIELD COORDINATION
68 Appendix 10
Covenant Reference to Loan Status of Compliance Agreement A. National Coordination Committee Within 6 months of the effective date, Schedule 6. Para 6. Complied with. the Borrower, through MFE, shall establish the National Coordination Committee (NCC), which shall be chaired by the secretary of MFE and shall comprise, the project director, the chief secretary of each Province within the project area, representatives of the implementing agencies, cooperating agencies, and other relevant organizations. The director of the Forestry Sector Development Division of MFE shall be the committee secretary. The National Coordination Committee may invite subject matter specialists, consultants and other experts to attend meetings when the need arises. The National Coordination Committee Schedule 6. Para 7. Complied with. shall meet at least once every three months to (i) discuss the Project implementation progress and problems; (ii) ensure that the Project practices are in accordance with the Borrower's policies; and (iii) provide policy direction. B. Regional Coordination Committees Within six months of the Effective Date, Schedule 6. Para 8. Complied with. the Borrower, through MFE, shall establish a Regional Coordination Committee (RCC) in each province in the Project area. Each RCC shall be chaired by the Chief Secretary of the Province concerned, and shall comprise representatives from the provincial and district levels, and implementing agencies and cooperating agencies concerned. The Deputy Project Director of the Welimada field office shall be the committee secretary for the RCC of Central and Uva provinces. The Deputy Project Director of the Balangoda field office shall be the committee secretary for the RCC of Sabaragamuwa province. Each RCC shall meet at least once every three months, two weeks ahead of the NCC, to discuss the Project implementation and progress, identify and address constraints, and resolve conflicts, if any. The Deputy Project Director concerned shall forward a copy of the minutes of each such meeting to
Appendix 10 69
Covenant Reference to Loan Status of Compliance Agreement the National Coordination Committee. C. Field Action Committees Within one year of the Effective Date, Schedule 6. Para 9. Complied with. the Borrower, through MFE, shall establish a Field Action Committee (FAC) in each of the nine divisions in the Project area. Each Field Action Committee shall be chaired by the relevant Divisional Secretary. The Agricultural Officer of the Agriculture Department or Divisional Forest Officer of the relevant division, and in case of the Peak Wilderness Area, the Wildlife Ranger shall be the secretary of the relevant FAC, with the representatives of the departments, agencies, community-based organizations, and nongovernment organizations concerned as members. Each FAC shall meet once a month to Schedule 6. Para 10. Complied with. discuss Project implementation and progress, and to assess the performance of the non-government and community based organizations. The FAC shall advise the PMO on any matters affecting the selection of non- government and community based organizations and allocation of works, and report on Project implementation and progress to the relevant RCC on a regular basis. III. BENEFICIARY PARTICIPATION A. Community-Based and Nongovernment Organizations The PMO shall also select non- Schedule 6. Para 11. Complied with government and community based 247 CBOs were registered organizations to assists in carrying out under the project. After Project implementation activities in initial difficulties in accordance with the following selection obtaining assistance of criteria: (i) experience relevant to the suitable NGO’s, Project Project objectives; (ii) ties with the focused on working Project area; (iii) financial capability; and through Social Mobilizers (iv) record of proven competence in and CBOs. group formation. The Borrower shall cause PMO to select Schedule 6. Para 12. Complied with. and utilize community based and non- 60 social mobilizers were government organizations, or other recruited of which around individuals as social mobilizers who 50% were women. shall promote the participation of beneficiaries, in particular women, in Project implementation. The Borrower,
70 Appendix 10
Covenant Reference to Loan Status of Compliance Agreement through the PMO, shall ensure that at least 30 percent of social mobilizers shall be women to ensure that women will participate in all Project activities. The social mobilizers shall train villagers Schedule 6. Para 13. Complied with. to participate in Project planning, design, and implementation. The PMO, with the assistance of the consultants, shall train the social mobilizes before they are fielded in the Project area to provide intensive extension services to the Project beneficiaries. B. Beneficiary Incentives The Borrower shall provide financial Schedule 6. Para 14. Complied with. incentives to the Project beneficiaries Incentives were provided through the (i) provision of seeds, based on Forest seedlings, fertilizers, extension Department rates and information and other farm inputs, and a Ministry of Agriculture range of forest and fruit tree species Development rates. required for Parts l (b) and (c) and II of the Project, including the labor costs for planting and maintenance of trees, and the setting up of erosion control measures; and (iii) payment of hundred percent of the labor costs under Part I (a), including the labor costs for planting and maintenance of tress, and the setting up of erosion control measures. IV. SELECTION OF PROJECT SITES During the first year of Project Schedule 6. Para 15. Complied with. implementation, the Survey Department Land mapping data were of MAL shall carry out further mapping set up in Central and Uva of the critical watershed to verify the provinces. The forestry mapping previously prepared by the digital data were Borrower on the basis of revised transferred to FD and land systematic land use mapping. use data base will be maintained by Land Commissioner. During the first three years of Project Schedule 6. Para 16. Complied with. implementation, the Survey Department Maps available at 1:5,000 of MAL shall map, at the scale of scale for forestry area. 1:10,000, the Kalu Ganga, Walawe Other area mapping in Ganga and Kirindi Oya watersheds to progress. identify specific areas in detail. The mapping will be verified on the basis of revised systematic land use mapping. Within three years of the Effective Date, Schedule 6. Para 17. Complied with. the Borrower, through MFE and MAL, shall complete the identification of the
Appendix 10 71
Covenant Reference to Loan Status of Compliance Agreement critical watershed areas, including the survey and mapping activities PMO, in cooperation with the Land Use Schedule 6. Para 18. Complied with. Policy Planning Division, Department of Micro-catchment basis Agriculture the Forest Department of subprojects were identified MFE and the Department of Wildlife with relevant agencies and Conservation shall organize village level the Project beneficiary meetings with the prospective Project CBOs. Five subprojects beneficiaries to discuss the (i) inclusion were implemented. of the critical sub-watersheds in the Project (ii) individual problem sites in the project and (iii) the proposed Project activities. Based upon these discussions, the PMO shall develop an action plan which shall be mutually acceptable to the Project beneficiaries and the Borrower. V. POLICY MATTERS Within one year of the Effective Date, Schedule 6. Para 19. Partially complied with. the Borrower, through MAL, shall adopt Regulations under the and gazette a regulation to address the existing Soil Conservation degradation of steep slopes in upper Act were initially drafted in watershed areas. The regulation shall 2002 and subsequently the prohibit any cultivation and agriculture MoAD decided to draft a activities which may have a negative new Soil Conservation Act impact on critical slopes on a in 2004. This act is prospective basis. pending approval of the Legal Draftsman. Within one year of the Effective Date, Schedule 6. Para 20. Complied with. the Borrower, through MFE and MAL, shall prepare a (a) draft framework for the regularization of land tenure, which shall include details of the lease arrangements and benefit-sharing arrangements between MFE, MAL, and the Project beneficiaries, and where appropriate, will begin to implement the draft plan; (b) draft framework for regulating the use of critical watershed areas. The framework for regulating the use of land shall take into consideration the slope incline factor and will be designed to ensure that only those agricultural activities which will not have a negative impact on erosion will be permitted. Where appropriate, MFE and MAL shall implement the draft land use framework under the Project. Within three years of the Effective Date, Schedule 6. Para 21. Complied with. the Borrower shall finalize the plan for Based on the existing
72 Appendix 10
Covenant Reference to Loan Status of Compliance Agreement regularization of land tenure and the framework annual plans for framework for the use of land in the regularization were drawn critical watersheds as described in the up. preceding paragraph. Within 18 months of the Effective Date, Schedule 6. Para 22. Complied late. Draft policy the Borrower shall prepare a draft prepared by September national policy for watershed 2003. Formally endorsed management, as part of the national by Cabinet in July 2004. water policy, that will identify and address issues related to the (a) long- term sustainability of forests and watersheds; (b) recovery of Government investment costs for the rehabilitation and improvement of watersheds from the downstream beneficiaries; (c) adoption of an integrated approach to national watershed management. The Borrower shall continue to strictly Schedule 6. Para 23. Complied with. enforce the logging ban in all natural protected forests during the duration of the Project. VI. OPERATION AND MAINTENANCE Prior to the implementation of activities Schedule 6. Para 24. Partial Compliance. Some under Part II of the Project, DOA shall of the benefit sharing execute agreements for the operations agreements between the and maintenance of facilities FD and the beneficiaries constructed or provided under the need to be revised to Project with the Project beneficiaries ensure that the benefit (groups or individuals, as appropriate). sharing agreement is 80:20 The operations and maintenance of (beneficiaries: government) gully plugs and check dams provided as stipulated in Project under Part II of the Project shall be the documents and not 75:25 responsibility of local beneficiary groups. as is in some of the The operations and maintenance of contract documents. terraces and vegetative contours shall be the responsibility of individual farmers. The thinning and harvesting of forest trees will be carried out by the farmers who have been granted long- term leases. The field staff of the Forest Department of MFE shall be responsible for the enforcement of the terms of the agreements between the lessees and the borrower, including any provisions relating to the sharing of profits, and operations and maintenance. During the third year of Project Schedule 6. Para 25 Complied with. The MTR implementation, the Borrower and the was held from 16-21 Bank shall jointly conduct a September 2001. comprehensive midterm review (MTR) to evaluate the Project design and status
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Covenant Reference to Loan Status of Compliance Agreement of Project implementation, and to recommend appropriate changes in Project design and implementation arrangements, if required. The midterm review shall, in particular, examine the (i) adequacy of Project scope; (ii) progress by the Borrower on addressing land tenure issues and the formulation of a national policy for watershed conservation; (iii) level of beneficiary participation, including the participation of women in Project activities; (iv) utilization of benefit-sharing arrangements and incentive systems under the Project; (v) propriety of the planning of benefit monitoring and evaluation activities; (vi) sustainability of the Project; and (vii) achievement of Project objectives within the implementation period. With respect to the activities under sub- Schedule 6. Para 26 Complied with. paragraph (ii) above, the Borrower and the Bank shall review the progress under the time-bound action plan for the implementation of such activities as described in paragraphs 21 and 22 above, and agree upon further action as necessary. VIII. BENEFIT MONITORING AND EVALUATION PMO shall conduct socioeconomic Schedule 6. Para 27. Partially complied with. A surveys in accordance with the Bank's socioeconomic survey was Guidelines for Social Analysis at the not conducted in the fourth commencement of the Project to year of Project establish a baseline of socioeconomic implementation. indicators. The findings of the baseline survey shall be used to identify priority areas, Project activities and participatory approaches to be promoted. PMO shall conduct two other socioeconomic surveys, one in the fourth year of the Project implementation, and the second in the seventh year of Project implementation to monitor and evaluate the impact of the Project on the beneficiaries with respect to their socioeconomic well-being. MASL shall carry out hydrological Schedule 6. Para 28. Complied with. Three sub- monitoring to measure the reduction in stations were initially set sedimentation, and to assess the impact up. Flow monitoring was of the activities under Part II of the stopped at one station due Project MASL shall establish, utilizing to low flows. Two stations
74 Appendix 10
Covenant Reference to Loan Status of Compliance Agreement existing manpower, adequate stream were monitored during flow and sediment load monitoring implementation. After stations throughout the watersheds at completion the smaller strategic locations, such as at the base station which comprises a of the sub-watershed receiving catchment of 50 ha has not treatments, to ensure a regular and been monitored. continuous monitoring of the impact of soil and water conservation measures. MASL shall take regular measurements from every sub-watershed and from the monitoring stations. MASL shall ensure that there are sufficient field level and micro-catchment level data gatherings to facilitate impact monitoring. These monitoring and evaluation activities shall be undertaken both during the implementation and after the completion of the Project.
Appendix 11 75
SUMMARY OF OUTPUT TARGETS AND ACHIEVEMENTS
% Achieved RRP Revised Project Output Unit a Achieved (revised Target Target targets) Participatory Rehabilitation and Protection of Forests Buffer Zone Planting ha 4,000 4,000 2,238 58 Small Timber Farms ha 3,000 1,000 508 50 Multipurpose Home Gardens No 15,000 15,000 18,789 125 Boundary Marking of Forests km 60 600 729 122 Fire Protection Lines km None 500 1,002 200 Stream Bank Reservations km 140 140 408 291 Roadside Tree Planting km 500 50 85 170 Tree Planting in Public Places ha 100 100 76 76 Enrichment Planting ha None 600 350 58 Promotion of Conservation-Oriented Farming Systems On-farm Erosion Control Measures ha 4,000 10,000 12,196 122 Improved Farming Systemsb Pers 18,000 Not stated 100,000 555 Dairy Cattle: Housing Improvement No None 1,750 2,989 170 Distribution of Improved cattle No None 470 563 119 Improved Irrigation Pilot Schemes No None 20 188 940 Regularize Land Title Plot Not stated 11,000 7,588 69 Off-farm Erosion Control Measures km 400 400 346 87 Agro-roads and Footpaths Improved km None 250 118 47 Hydrological Monitoring Established No 3 3 2 66 Capacity-building and Institutional Strengthening PMO Established and Equipped Completed successfully Consultants Engaged Completed successfully Publicity and Awareness Campaign Completed successfully Draft National Watershed Policy Completed, awaits Government adoption Project Staff Trained Pers 560 560 17,455 c Key Farmers Trained Pers 18,000 18,000 Workshops and Seminars Conducted No 40 40 87 217 Pilot Watershed Demonstrations No None 8 5 63 Prepare Resettlement Plansd No None 10 3 33 Develop Provincial WMU Plans No None 2 1 50 ha= hectare, km=kilometer, no=number, pers=persons a Changes approved at midterm review. b On-farm conservation measures and farming systems activities combined at midterm review. c Training figures for staff and farmers were not disaggregated, and many attended several training sessions. d Studies terminated by the Asian Development Bank in early 2005. Sources: Progress Reports of UWMP. Ministry of Environment
76 Appendix 12
Appendix 12 Photographs of Project Area
Photo 1 Complex Land Use Pattern of Small Farms, Ella.
Photo 2 Vegetable Cultivation on Improved Terraces, Welimada
Photo 3 Composting, Conservation-oriented Photo 4 Conservation Farming, Farming, Uma Oya Vegetables, Uma Oya
Photo 5 IPM Potato Farmers, Vidurapola Photo 6 Improved Village Water Supplies at Perawela Appendix 12 77
. Figure 8 Low-cost Gravity Drip System Figure 7 Guinea Grass Terrace Protection, Welimada
Figure 9 Improved Path & Protected Water Figure 10 Welimada Hydrological Channel, built by CBO, Ella Recording Station, Uma Oya 78 Appendix 12
Figure 12 CBO Member proudly shows her 2-year old Mango tree, Homestead Planting
Figure 11 Up-dated Land Holding Map prepared by LUPPD for Badulla District
Figure 13 Farmers with their leased Timber Farm, Balangoda
Figure 14 Farmers display Buffer Zone Planting & Protection, Balangoda