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World Bank Document L S s ~~~~- - . D; u n of The World Bank FOROM-ICI4L USE ONLY 10K.~~~~~~~~~~~ * * ,<t ~a, *;>6 E) ,-L Public Disclosure Authorized ReportNo. Ms-.N Public Disclosure Authorized STAF? APPRAISALREPORT TUNISIA GABESIRRIGATION PROJECT Public Disclosure Authorized May 30, 1985 Public Disclosure Authorized Europe, Middle East and North Africa Projects Department l-dsmmuha a resiuidmdiuibe._ md aybe wad byredplet onlyIn thepeifezee d ~~~brsfMdd l-.:- ;.mt ma ow odme be Alsd _ibu W dd Bak CURRENCY E-QUIVALENTS Currency Tuit Tunisian Dinar (D) US$1.00 D 0.75 D 1.00-=US$1.33 WEIGHTSAND MEASURES Metric System GOVERNMENT OF TUNI;IA FISCAL YEAR January 1 - December 31 INITIALS AND ACRONYMS AIC Association of Common Interest (Association d'Interet Collectif) BNDA : National Bank for Agricultural Development (Banque Nationale pour le Developpement Agricole) BNT : National Bank of Tunisia (Banque Nationale de Tunisie) CNEA : National Center of Agricultural Studies (Centre National des Etudes Agricoles) CRGR : Research Center of the Rural Construction Department (Centre de Recherche du Genie Rural) CRDA : Regional Agricultural Development Commission (Commissariat Regional ae Developpement Agricole) CTV : local Extension Unit (Cellule Territoriale de Vulgarisation) DGR : Department of Rural Engineering (Direction du Genie Rural) DGPC : Highway Department of the Ministry of Public Works (Direction CGnerale des Ponts et Chauss6es) DPSAE : Department of Planning, Statistics and Economic Analysis (Direction de la Planification, des Statistiques et des Analyses Economiques) FOR OMCUL USE ONLY DRE : Department of Water Resources (Direction des Ressources en Eau) DRS : Department of Soil Resources (Direction des Ressources en Sols) FOSDA Agricultural Development Fund (Fonds Spiciaux de D&veloppeuent Agricole) GIN : Group of Hydraulic Interest (Groupement d'Intqr&t Hydraulique) GAF : Association of Fruit and Citrus Growers and Traders (Groupement Interprofessionnel pour les Agrumes et les Fruits) GIL : Association of Vegetable ?roducers and Traders (Groupezent Interprofessionnel pour les LAgumes) MiRAT Tunisian National Institute of Agricultural Research (Institut National de Recherche Agronomique Tunisien) IRA : Arid Zone Institute (Institut des Regions Arides) MOA : Ministry of Agriculture (Ministere de l'Agriculture) MOF Ministry of Finance (Ministere des Finances) OC National Cereal Board (Office des Cereales) OFP National Livestock and 2ange Agency (Office de 1'Elevage et des Piturages) OR Vegetable Oil Agency (Office des Kuiles) OMVGM Gabes and Medenine Irrigation Development Office (Office de Mise en Valeur des Perimetres Irrigu6s de Gabes et MNd6nine) PPI : Public Irrigated Perimeter (Perimetre Public Irrigue) SONEDE National Society for Water Supply (Societe Nationale d'Explaitation et de Distribution des Eaux) STEG Tunisian Electricity and Gas Company (Societe Tunisienne d'Electriciti et du Gaz) STIL Tunisian Milk Processing Company (Societe Tunisienne d'Industrie Laitiere) WUA Water User Associations Thisdocument has a restricteddistribution andnmy beused by recipientsonly in the performance of their oficial dutie Its contents may nototherwise be disclsed without World Bank authorization. REPUBLIC OF TUSIA GABESIRRIGATION PROJECT LOAN AND PROJECT SUMMARY Bor-rower ; Republic of Tunisfa Amount : US$27.7million equivalent Terms 17 years, including4 years of grace, at the standardvariable interestrate. ProjectDescription: The proposedProject would rehabilitate 42 selectedoases of the Gabes Governorate, expand three existingoases and create a new one. To this end, the Projectwould includeof (a) replacementof deep wells and provisionof pumpingequipment, and constructionof piped water distributionsystems; (b) orchard and crop reconversionand intensification;(c) provision of equipmentand staff to the executingagency, the Gabes and Medenine IrrigationDevelopment Office (OMVGM);(d) provisionof technical assistanceto OMVGM and to existingfarmer associations;and (e) provisionof credit to farmersfor onfarm development. The Project would directlybenefit about 7,700 farm families,amoog the poorestin Tunisia. The principalrisk related to slow adoptionby farmersof new croppingpatterns are minimized by provisionof suitableextension services. Estimated Project Costs: Local Foreign Total - --(US$ million)-- Buildings 0.6 0.4 1.0 Irrigationand on-farmworks 10.9 14.1 25.0 Equipment 2.0 3.1 5.1 Studies,training, technical assistance 0.1 0.1 0.2 Onfarm development(credit) 1.7 1.4 3.1 IncrementalOperating Costs 4.2 2.1 6.3 Total Base Costs 19.5 21.2 40.7 Physicalcontingencies 2.0 2.5 4.5 Price contingencies 7.2 5.9 13.1 Total Project Costs 28 .7'a 29.6 58.3' /a Includes$14.3 million of taxes and duties. FinwnelumPkan Local F Total ': (USSmillion)- World Bank _ 27.7 27.7 BNT 1.0 1.9 2.9 Beneficiaries 5.0 - 5.0 Government 8.4 - 8.4 Net ProjectCosts 14.4 29.6 44.0 Taxes and Duties 14.3 - 14.3 Total ProjectCosts 28.7 29.6 58.3 EstimatedDisbursements: Bank FY 1986 1987 1988 1989 1990 1991 1992 -(US$ million) Annual 1.0 2.0 3.0 6.7 8.5 4.5 2.0 Cumulative 1.0 3.0 6.0 12.7 21.2 25.7 27.7 EeononmicRate of Return 21X StaffAppraisal Report: No..5111-TUN, dated May 30, 1985 M>apNo. IBRD 18405 USRD 18490 STAFF APPRAISAL REPORT TEThNISLA GABES IRRIGATION PROJECT Table of Contents Page No. INrTRODUCTION............................................ 1 II. YTHEAGRICULTURAL SECTOR ............... ............. 2 A. Place of Agriculture in the Economy ................. 2 B. Previous Bank Involvement in Agricultural Projects ... 3 C. Sector Issues Relevant to the Project ............... 4 III. DTHEPROJECT AREA ... 7 A. Introduction ...................................... 7 B. Location, Climate, and Soil Resources ................ 7 C. Water Resources .......................................... 8 D. Population Structure and Trends ................ 9 E. Land Tenure and Cropping Systems ........... ......... 10 F. Agricultural Support Services .................. 11 G. Infrastructure .................... .................. 13 IV. 1THE PROJECT' ........ .................................. 14 A. Concept and Objectives .... 14 B. Components ..... 15 C. Detailed Features ............. ........... 16 D. Status of Engineering .... 18 E. Costs ...... 18 F. Financing ..... 20 G. Procurement ..... 21 H. Disbursement . ........ ......................... 22 V. PROJECT B&PILEMENTEATION .... ........................ 24 A. Organization and Management .. 24 B. Project Implementation Strategy . .25 C. Execution of Project Works .. 26 D. Agricultural Support Services .. 27 E. Monitoring and Evaluation .. 28 F. Accounts and Audit.. 29 This report is based on the findings of an appraisal mission which visited Tunisia in November 1984 composed of Messrs. C. Gois (Mission Leader), P. van der Veen (Agriculturalist) and Ms. T. Riley (Economist). The appraisal team was assisted by Mr. B. Dussert (Financial Analyst). Table of Contents (Cont'd) No. VI. BENEFrIS AND JUSTIFICATIONS . ......................... 29 A. Production ..........................................29 B. Marketing ................. *a...................31 C. Beneficiariesand Distributionof Benefits .......... 31 D. Cost Recovery .......................................32 E. FinancialImpact on Government ...................... 36 F. EconomicAnalysis ....... ............................37 G. Risk and SensitivityAnalysis ....................... 40 VII. AGREEMENTSREACHED AND RECOMMENDATIONS ......... 42 SUPPORTING TABLES Table 1. ProjectComponents by Year .. 44 Table 2. ProjectCosts Summary.......................... 45 Table 3. EstimatedSchedule of Disbursementsof Bank Loan 47 Table 4. Major ProcurementPackages . .48 Table 5. Vehicles .. 49 Table 6. List of Oases - Characceristics,Works, Costs,Cropping Pattern . .50 Table 7. OMVGM's IncomeStatement (1981-1985) 51 Table 8. SelectedDocuments and Data Available in the Praject File ............ 52 Table 9. Rent Recovery (Dinar1985 constantprices) 53 Table 10. Farm Budgets: (a) Model A - Date Intensification.54 (b) Model B -- Fruit and Vegetable Intensification 55 (c) Model C - Olives Intensification .56 (d) Model D - Olives and Crops Intensification. 57 (e) Model E - New Irrigation.58 (f) Model F - Fruit Developmentin VegetableFarms 59 Table 11. ConversionFactors for Project Costs . .60 Table 12. Economic Price of Fertilizer 61 Table 13. Prices Used in Economicand FinancialAnalysis 62 Table 14. Project Related Cash Flow .......... 63 "able 15. EconomicCost and BenefitStreams . .64 CHARTS 1. ImplementationSchedule .65 2. OMVGM - Organization Chart .66 3. IrrigationDevelopment .67 MAPS IBRD 18405 - Gabes Irrigation Project IBRD 18490 - Gabes IrrigationProject: ProjectArea 691E/p51 STAFF APPRAISAL REPORT TUNIA GABESIRRIGATION PROJECT L INTRODUCTION 1.01 During the 1970s,Tunisia experienced an impressiveeconomic growth. Gross DomesticProduction (GDP), in constantprices, increasedby about 7X p.a. and GDP per capitamore than doubled to US$1,420in 1981. Boostedby high revenuesfrom petroleumexports and a substantialimprovement in its terms of trade, the countrymanaged to sustaina massive increasein investmentsand a rapid growth in public and private consumptionwithout endangeringits balanceof paymentssituation. In 1982 and 1983, the economic situationsuffered set-backs. Adverse weather conditionsdepressed agriculturaland agroindustrialoutput and recessionin Europe affected Tunisianexports. The fall in petroleumrevenues affected the balance of paymentsand domesticsavings. 1.02 The medium term outlookfor investmentand
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