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World Bank Document Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No: 63459-PK PROJECT APPRAISAL DOCUMENT ON A PROPOSED CREDIT IN THE AMOUNT OF SDR161.2 MILLION (US$250 MILLION EQUIVALENT) Public Disclosure Authorized TO THE ISLAMIC REPUBLIC OF PAKISTAN FOR THE PUNJAB IRRIGATED AGRICULTURE PRODUCTIVITY IMPROVEMENT PROGRAM PROJECT (PIPIPP) Public Disclosure Authorized February 23, 2012 Agriculture and Rural Development Unit Sustainable Development Department South Asia Region Public Disclosure Authorized This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS April 2011 Currency Unit = Pakistan Rupees (Rs) US$ = 85 Rs FISCAL YEAR July 1 – June 30 Weight and Measures Metric System 1 meter (m) = 3.280 feet 1 hectare (ha) = 2.470 acres 1 Kilometer (km) = 0.620 miles 1cubic meter(m3) = 35.310 cubic feet 1 million acre feet (MAF) = 1.234 billion cubic meters 1 cubic foot/second (cfs) = 0.0283 cubic meters/sec (m3/sec) ABBREVIATIONS AND ACRONYMS ACZ Agro-climatic Zones GIS Geographic Information System ADB Asian Development Bank GM General Manager AWBs Area Water Boards GMRC Glacier Monitoring and Research Center BEC Bid Evaluation Committee GoP Government of Pakistan BER Bid Evaluation Report GoPunjab Government of Punjab CAS Country Assistance Strategy GPN General Procurement Notice CCGT Combined Cycle Gas Turbine Gwh Gigawatt hour CPPA Central Power Purchase Agency Ha Hectare CPS Country Partnership Strategy HEIS High Efficiency Irrigation Systems CQ Consultants‟ Qualification I&D Irrigation & Drainage CSCs Construction Supervision Consultants IBRD International Bank for Reconstruction and DA Designated Account Development DD Deputy Director IBWS Indus Basin Water System DGAWM Director General Agriculture Water IBWT Indus Basin Water Treaty Management ICB International Competitive Bidding dgMarket Development Gateway Market ICR Implementation Completion Report DIC District Implementation Committee ICS Individual Consultant Selection DISCO Distribution Company IDA International Development Agency DP Development Partner IDB Islamic Development Bank DPLs Development Policy Loans IDC Interest During Construction DRC District Rate Committee IDP Irrigation and Power Department DSCR Debt Service Credit Ratio IFIs International Financial Institutions EA Environmental Assessment IFR Interim Financial Report ECA Export Credit Agencies IPOE Independent Panel of Experts EIA Environmental Impact Assessment IPPs Independent Power Producers EPA Environmental Protection Agency IUFR Interim Unaudited Financial Report ERR Economic Rate of Return JICA Japan International Cooperation Agency ESMP Environmental and Social Management Plan KAPCO Kot Adu Power Company FBS Fixed Budget Selection KESC Karachi Electric Supply Corporation FM Financial Management Kg Kilogram FOs Farmers Organizations Km Kilometer GBHP Ghazi Barotha Hydropower Project KP Khyber Pakhtunkhwa GDP Gross Domestic Product Kwh Kilowatt hour ii LCS Least Cost Selection PRC Project Rates Committee LIBOR London Inter-Bank Exchange Rate PRSP Poverty Reduction Strategy Paper M&E Monitoring & Evaluation PRW Punjab Rice-Wheat MAF Million Acre Feet PSC Project Steering Committee M&ECs Monitoring and Evaluation Consultants PSW Punjab Sugarcane-Wheat mm millimeter QBS Quality Based Selection MOWP Ministry of Water and Power QCBS Quality and Cost Based Selection MTR Mid Term Review RAP Resettlement Action Plan MW Megawatt RCU Regional Coordination Unit NCB National Competitive Bidding RPD Regional Project Director NEPRA National Electric Power Regulatory RSC Residual Sodium Carbonate Authority RTW River Training Work NGO Non Government Organization SAP Social Action Plan NPV Net Performance Value SCARP Salinity Control and Reclamation Program NTDC National Transmission and Dispatch SEMP Social and Environmental Management Plan Company Limited SFMS Sr. Financial Management Specialist O&M Operation and Maintenance SIL Specific Investment Loan OCC Opportunity Cost of Capital SOPs Standard Operating Procedures OFWM On Farm Water Management SSS Single Source Selection ORAF Operational Risk Assessment Framework T4HP Tarbela Fourth Extension Hydropower PAD Project Appraisal Document Project PCC Project Coordination Committee TA Technical Assistance PCW Punjab Cotton-Wheat TATCs Technical Assistance and Training PD Project Director Consultants PDO Project Development Objectives TDP Tarbela Dam Project PEPCO Pakistan Electric Power Company TOR Terms of Reference PHAP Public Health Action Plan UIB Upper Indus Basin PISCs Project Implementation Supervision UNDB United Nations Development Business Consultants USA United States of America PIC Project Implementation Committee WAPDA Water and Power Development Authority PIDA Punjab Irrigation Development Authority WCAP Water Sector Capacity Building Project PIPIPP Punjab Irrigated Agriculture Productivity WEC WAPDA Environmental Cell Improvement Program Project WMO Water Management Officer PMU Project Management Unit WMTI Water Management Training Institute PMW Punjab Mixed-Wheat WSIP Water Sector Improvement Project POE Panel of Experts WTP Willingness to Pay PPC Project Policy Committee WUA Water Users‟ Association PQ Pre-qualification Regional Vice President: Isabel M. Guerrero Country Director: Rachid Benmessaoud Sector Director: John Henry Stein Sector Manager: Simeon K. Ehui Task Team Leader: Masood Ahmad This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization iii Table of Contents I. Strategic Context .............................................................................................................. 1 A. Country Context ............................................................................................................... 1 B. Sectoral and Institutional Context .................................................................................... 1 C. Higher level objectives to which the project contributes ................................................. 7 II. Project Development Objectives (PDOs) ........................................................................ 7 A. PDOs ................................................................................................................................ 7 1. Project Beneficiaries ........................................................................................................ 7 2. PDO Level Results Indicators .......................................................................................... 8 III. Project Description........................................................................................................... 8 A. Project components .......................................................................................................... 8 B. Project Financing ........................................................................................................... 11 1. Lending Instrument: The lending instrument is Specific Investment Loan (SIL). ....... 11 2. Project Cost and Financing ............................................................................................ 11 C. Lessons Learned and Reflected in the Project Design ................................................... 12 D. Alternatives considered and reasons for rejection ......................................................... 13 IV. Implementation .............................................................................................................. 14 A. Institutional and Implementation Arrangements ........................................................... 14 B. Results Monitoring and Evaluation ............................................................................... 15 C. Sustainability.................................................................................................................. 16 V. Critical risks and possible controversial aspects (Refer to Annex 4) ............................ 17 VI. Appraisal Summary ....................................................................................................... 17 A. Economic and Financial Analysis .................................................................................. 17 B. Technical ........................................................................................................................ 19 C. Financial Management ................................................................................................... 19 D. Procurement ................................................................................................................... 20 E. Social (including safeguards) ......................................................................................... 20 F. Environment (including safeguards) .............................................................................. 21 Annex 1: Results Framework and Monitoring.............................................................................. 26 Annex 2 Detailed Project Description .......................................................................................... 28 Annex 3: Implementation Arrangements ...................................................................................... 52 Annex 4: Operational Risk Assessment Framework (ORAF) .....................................................
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