Document of The World Bank 14
FOR OFFICIAL USE ONLY
Public Disclosure Authorized Report No. 5261
THE WORLD BANK
Public Disclosure Authorized PROJECT PERFORMANCE AUDIT REPORT
NEPAL BHAIRAWA-LUMBINI GROUNDWATER PROJECT (CREDIT 654-NEP) Public Disclosure Authorized September 20 , 1984
Operations Evaluation Department Public Disclosure Authorized
This documenmt has a restictd distrbifon and my be used by reciplemis only in the pedersmance of their eelal dEties. It confeant mofado otherwise be disdlese witho World Bank =utherlation. PRINCIPAL ABBREVIATIONS AND ACRONYMS USED
ADBN - Agricultural Development Bank of Nepal DA - Department of Agriculture DIHM - Department of Irrigation, Hydrology and Meteorology ERR - Economic Rate of Return GRDB - Groundwater Resources Development Board HLGN - His Majesty's Government of Nepal ICB - International Competitive Bidding ICP - Integrated Cereals Program IDA - International Development Association JT - Junior Technician JTA - Junior Technical Assistant NEC - Nepal Electricity Corporation O&M - Operation and Maintenance PLAA - Panchayat Level Agricultural Assistant T&V - Training and Visit USAID - United States Agency for International Development
CURRENCY EQUIVALENTS
1 Nepalese Rupee (NRs) = US$0.07 14.3 NRs = US$1.00
WEIGHTS AND MEASURES EQUIVALENT
HP Horsepower (76.0 kgm per second) m meter (3.28 feet) km kilometer (0.62 miles) ha = hectare (2.47 acres) MCH = million cubic meter (810.71 acre-feet) H million MW Megawatt (thousand kilowatts) kV Kilovolt (1,000 volts)
V FOR OFFICIAL USE ONLY
PROJECT PERFORMANCE AUDIT REPORT
NEPAL BRAIRAWA-LUMBINI GROUNDWATER PROJECT (CREDIT 654-NEP)
TABLE OF CONTENTS
Page No.
Preface ...... i Basic Data Sheet ...... 11 Highlights ...... iii
PROJECT PERFORMANCE AUDIT MEMORANDUM
I. SUMMARY ...... 1.....
II. MAIN ISSUES ...... 2
A. General ...... 2 B. Socio-economic Considerations ...... 2 C. Power Supply ...... 4
PROJECT COMPLETION REPORT
I. Introduction ...... 9 II. The Project at Appraisal ...... 10 III. Project Implementation ...... 14 IV. Irrigation and Agriculture Performance ...... 20 V. Costs, Financing and Disbursements ...... 21 VI. Institutional Performance ...... 23 VII. Economic Re-evaluation ...... 25 VIII. Bank Performance ...... 26 IX. Lessons Learnt ...... 27
Tables 1-7
Map - IBRD 164322 - September 1982
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. PROJECT PERFORMANCE AUDIT REPORT
NEPAL BRAIRAWA-LUMBINI GROUNDWATER PROJECT (CREDIT 654-NEP)
PREFACE
This is a performance audit of the Bhairawa-Lumbini Groundwater Project in Nepal, for which Credit 654-NEP in the amount of US$9.0 million was approved in July 1976. The final disbursement was made on March 8, 1983, after one extension of the Closing Date.
The audit consists of a memorandum prepared by the Operations Evaluation Department and a Project Completion Report (PCR) dated March 26, 1984. The PCR was prepared by the South Asia Regional Office following a country visit in November 1983. The audit memorandum is based on a review of the Appraisal Report (No. 1093a-NEP) dated June 17, 1976, the President's Report (P-1883-NEP) of June 23, 1976, the Credit Agreement dated July 9, 1976, and the PCR. Correspondence with the Borrower and internal Bank memoranda contained in relevant Bank files have been reviewed and staff associated with the project have been interviewed.
An OED mission visited Nepal in March 1984. The mission held discussions with officials of the Departments of Agriculture, and Irrigation, Hydrology and Meteorology, as well as the Agricultural Development Bank of Nepal.
A field trip to visit the project area was undertaken and participating farmers were interviewed. The information obtained during that mission was used to test the validity of the conclusions of the PCR and permitted discussion of agronomic and institutional aspects.
A copy of the draft was sent to government on May 24, 1984 for comments but none were received.
The audit finds that the PCR covers adequately the project's salient features, its accomplishments and shortcomings, and the PPAM gen- erally agrees with the conclusions. The issues discussed have been selected because of their importance for this as well as other Bank-assisted irrigation projects.
The valuable assistance provided by the Government, the agencies involved, and their staff, as well as the farmers met during the preparation of this report is gratefully acknowledged. IKjJECT PERFORMANCE A,l RLt'C
NEPAL BHAIRAMA-LUMBINI CROUNDWATER ?RUJECT (CREDIT b54-%EP)
BASIC DATA SHEET
KEY PROJECT DATA
Appraisal Actual or Actual as Z of Estimate Estimated Actual Appraisal Estimate
Project Costs (USS million) 13.7 17.5 128 Credit Amount (USS million) 9.0 9.0 100 Date Board Approval 07/06/76 Date Effectiveness 11/16/76 Date Physical Components Completed 06/80 mid 1984 100 Proportion Then Completed (2) 100 100 Closing Date 06/81 12/8Z Economic Rate of Return (2) 19 10 53 Financial Rate of Return (2) n.a. n.a. Institutional Performance Satisfactory Agronomic Performance Satisfactory Number of Direct Beneficiaries 22,500 22,500
CUMULATIVE DISBURSEMENTS
FY77 FY78 Fy79 FY80 FY81 FY82 FY83
Appraisal Estimate (USS million) 1.0 3.0 5.5 8.0 9.0 Actual (USS million) 0.2 1.0 3.6 6.3 6.8 8.5 9.0 Actual as Z of Estimate 20 33 65 79 76 94 100 Date of final disbursement: March 1983
HISSION DATA
No. of Mandnys Specializations Performance Types of Date Persons in Field Represented/a Rating/b Trend/c Problems1d
Identification 04/76 1 ZO d Preparation 04/75 2 10 d Appraisal 11/75 4 24 a.b.d,e Subtotal Supervision 1 03177 2 4 d 2 1 T Supervision 2 06/77 1 2 d 2 2 M,T,F Supervision 3 10/77 3 4 a,d,e 2 1 T,0 Supervision 4 05!78 1 A d 2 2 T,M Supervision 5 09/78 2 5 d 2 2 H,T Supervision 6 02/79 1 3 d 2 3 X,T Supervision 7 10/79 3 1. a,b,d 3 3 4,0.T Supervision 8 03/80 2 1 a,d 2 0,M Supervision 9 11/80 1 3 4 3 2 - 0, Supervision 10 06/81 2 3 d 2 1 F,0 Supervision 11 12/81 1 3 d 2 2 F,u Supervision 12 03/82 appraisal Stage it Supervision 13 11/82 3 3 b.d 2 2 F
OTHER PROJECT DATA
Borrower: His Majesty's Governme.t of Nepal (HMGN) Executing Agency: Line agencies of IMCN with special arrangements io coordination between them Fiscal Year: July 16 - July 15
Name of Currency (Abbreviation) Nepalese Rupee (NRs)
Appraisal Year Average: USS1.00 - 12.5 Intervening Years Average: US$1.00 - 12.0 Completion Year Average: US1.00 - 13.2
Follow-on Project Name Bhairawa-Lumbini Credit Number 1316 Credit Amount (USS a1n) 16.0 Date Board Approval January 18, 1983
/a a - agriculturist; b - agricultural economist; c - financial analyst; d - engineer; e - hydrogeologist. 7 I - Problem-free or minor problems; 2 - moderate problems; and 3 - major problems. c 1 - improving; 2 - stationary; and 3 - deteriorating. Ti F - Financial; M - Managerial; T - Technical; P - political and 0 - Other. PROJECT PER1ORMANCE AUDIT REPOKI
NEPAL BRAIRAWA-LUMBINI GROUNDWATER PROJECT (CREDIT 654-NEP)
HIGHLIGHTS
The project represented the first stage of a groundwater development program to provide irrigation to the Western Terai, part of the Gangetic plain. As appraised, it included the installation of 63 tubewells, distribution networks to serve about 120 ha under each well, 70 transmission lines, village roads, grain storage facilities and the strengthening of agricultural supporting services in the project areas. Total project cost was estimated at US$13.7 million equivalent and the project was to be completed in 1980. It was expected that the project would benefit 4,500 farm families. Incremental production was assumed to reach 11,000 tons of milled rice and 16,000 tons wheat at full development in 1985.
During project implementation 64 tubewells (plus one) were constructed and most of the infrastructure established, albeit with a considerable time overrun due to delays in land acquisition, delivery of construction materials, poor contractor performance and belated expansion of the electrical power supplies. Tubewell operations did not start until the 1983 season and it is too early to reach any conclusions on increased agricultural production. Due to the delays in project implementation, the ERR had to be revised downwards from the 19% at appraisal to tentatively 10%.
Other points of interest are:
- to increase the operating efficiency of the wateruser groups executive committees proved beneficial (PPAM, para. 12);
- farmers permitted construction work to proceed only during the off season. This contributed to considerable construction time overruns (PPAM, paras. 8, 9; PCR, para. 3.01);
- in areas with small farms and limited land resources, open irrigation canals and drainage ditches are of limited acceptability to farmers (PPAM, paras. 10, 14);
- frequent power failures and delays in executing the project's power component would have called for a power engineer to assist in the appraisal (PPAM, paras. 17-19; PCR, paras. 3.08, 3.13 and 4.04);
- water losses in the unlined canals are high, leading to farmer complaints (PPAM, para. 11; PCR, paras. 3.10, 9.03); and
- the concept of adopting high-yielding wells which require large command areas and complex distribution/water management systems can be chaLlenq- 'OCR. varq-. &.05. 9.03). PROJECT PERFORMANCE AUDIT MEMORANDUM
NEPAL BRAIRAWA-LUMBINI GROUNDWATER PROJECT (CREDIT 654-NEP)
I. SUMMMARY.1/
1. The Bhairawa-Lumbini Groundwater Development Project was the first sizeable public groundwater development project undertaken in Nepal with IDA assistance. It called for the installation of 63 public tubewell schemes to serve a net area of about 7,600 ha located in the Rupandehi District near Bhairawa town in the western Terai.
2. Project cost was estimated at US$13.7 million equivalent, with a foreign exchange component of US$6.8 million. Major project components were: land acquisition (US$0.3 million), civil works (US$3.7 million), equipment and vehicles (US$3.0 million), consulting services (US$1.5 million), agricul- tural supporting services (US$0.2 million), engineering and administration (US$0.5 million), and production credit to farmers (US$1.0 million). The IDA credit approved for the project was US$9.0 million or about 66% of total project cost. The credit became effective in November 1976.
3. Project execution ran behind schedule and, although the IDA credit was fully disbursed in March 1983, the current estimate is that the project will be completed by mid-1984 instead of mid-1980. The delays in project implementation were caused by: (i) slow and cumbersome tendering and land acquisition procedures; (ii) shortages of key construction materials; and (iii) inadequate staffing and budget allocations. The revised cost estimate (to completion) is US$17.5 million, which is about US$3.8 million or 28% higher than the appraisal estimate. The IDA credit was fully committed by mid-1982 with about 80% of the project works completed. To complete the project, additional IDA financing (US$2.0 million) was provided in 1982 under the Bhairawa-Lumbini Stage II Project (Credit 1316, 1983).
4. Since irrigation from project wells has just begun, data on its impact on the immediate beneficiaries and on Nepal's economy are not yet available. Because it will take three to four years longer to implement the project than expected at appraisal, investment costs and estimated O&M costs are substantially higher than estimated at appraisal, and with the lower value of benefits caused by stagnant commodity prices the ERR will be below the 19% estimated at appraisal at about 10%.
I/ Adapted from the PCR. -2-
5. Important benefits from the project are that a nucleus of local staff have gained valuable experience in implementing a groundwater project and that the project has helped to explore some of the difficulties facing groundwater development in a country like Nepal. This is important for Nepal because alternative investment opportunities are limited to large surface irrigation schemes, which require sizeable investments in storage dams and have long gestation periods.
II. MAIN ISSUES
A. General
6. The project contributed to developing an area of high agricultural potential and to exploiting the relatively untapped abundant groundwater resources of the Nepalese part of the Gangetic plains. Groundwater irrigation offers the possibility of bringing substantial areas under irrigation within a relatively short period. Both farmers and the Government have taken considerable interest in irrigated agriculture and after completion of the follow-on project, Bhairawa-Lumbini Groundwater Project - Stage II (Credit 1316, of 1983), enough momentum will have been generated to sustain project activities after Bank assistance will have ceased.
7. Project implementation was delayed by several factors, of which difficulties encountered because of farmers' objections to the project and electrification problems will be dealt with in the following.
B. Socio-economic Considerations
8. The PCR (para. 3.01) correctly lists among the factors contributing to implementation delays the -cumbersome ... land acquisition procedures." Farmers showed little interest in the project prior to its initiation and some became even more antagonistic during construction. A report prepared by the consultants states:
"The strip of land required for canal construction and the burrow pit needed for construction materials resulted in encroachment on the farmers' plots. In fact, some of the farmers had to abandon land for cultivation or were left with plots which were very difficult to cultivate and irrigate. Many of the farmers, therefore, became antagonistic to the project.*2/
9. The same report also found that "the farmers did not allow any work - even survey work - to be done on their plots until completion of the harvest which in some cases lasts until the end of December. As a consequence of limited farmer interest, labor from outside the country had to
2/ Bhairawa-Lumbini Groundwater Irrigation Project - Stage One Evaluation of Key Events in Project Implementation. -3-
be employed. However, the expatriate labor force was only available during the November-April period and not on a year-round basis, thus also extending the construction period.
10. The farmers' less than enthusiastic acceptance of the project was further exacerbated by, in their eyes, significant loss of land for canals and drainage ditches. While they finally had to agree on the land cession for canal construction, they have so far refused to accept drainage ditches.
11. The project did not provide for the lining of canals and all farmers interviewed by the mission complained about the consequently high water losses, waterlogging in fields adjacent to the main canals, and reduced water availability at the tail end. In addition, it was pointed out that maintenance costs of the unlined canals are relatively high.
12. Delays have been encountered in organizing water user groups as stipulated in the Credit Agreement. Instead of 64 groups - one for each well - only 22 had been established by March 10, 1984. Furthermore, water user groups were not functioning well before July 1983. Until that date all water turn-out representatives, about 25 to 35 per tubewell were members of the "governing body" rendering these meetings cumbersome and frequently unable to reach decisions. Following the reorganization between 5-7 members and one chairman are elected as members of an executive committee which can now reach fast decisions.
13. In the audit's view several lessons can be learned from the project experience. The most important omission was the lack of a socio-economic survey which would have provided the necessary insights of farmer behavior and reactions. 3 / Delays could have been overcome by analyzing and then discussing solutions with the farmers, especially land acquisition problems and the expected functioning of the water user groups. The Stage II Groundwater Project (Credit 1316-NEP) provides funds for consultant services to explore prospects for further groundwater development in the Bhairawa-Lumbini area. The terms of reference, annexed to the appraisal report, 4/ indicate that a -socio-economist" would be a member of the survey team. However, his anticipated responsibilities, like: "Review available information and studies to develop estimates of the financial and economic costs of peak and non-peak electrical energy in Nepal;" or "...Make financial and economic comparisons of the costs and benefits of private and public groundwater development..." indicate that there is still no understanding on what the role and contribution of a socio-economist should be.
3/ The Region states that useful information on socio-economic parameters was provided through an agricultural benchmark survey in 1977. In addition the cost recovery study, undertaken by the consultants in 1979, made use of a socio-economic study. In general the Region does not believe that a socio-economic survey would have prevented some farmers from opposing the project.
4/ SAR, Report No. 4038-NEP dated December 6, 1982, Supplementary Data Volume, Annex 9, p. 86. -4-
14. Another important lesson is the proper timing of construction works, especially in cases where farmers cannot be compensated for loss of crops. In the case of this project the small size of the farms - about 90% of the project area's holdings are smaller than 3.25 ha - a 10% reduction of the harvest may lead to the loss of one family member's annual grain require- ments on the smaller farms. Preparation of construction schedules need to take this aspect into consideration to remain realistic in its assumptions. Although more realistic than in other projects, the appraisal assumed six months available for construction per annum, actual time available was only four months (see para. 9 above).
15. Equally important is the question of permanent land loss due to the need of ceding land for the canals. The follow-on Stage II project provides funds for a buried pipe distribution system which, according to the appraisal report, is justified on the grounds of:
(a) conveyance efficiency of a pipe distribution system is much higher than for earthen channels;
(b) delivery valves on the pipe system are located in the center of a 4 ha area served, while the open channel outlets deliver to the boundaries of 5 ha units;
(c) the greater efficiency of delivering water through pipes (at least 25%) would result in a lower energy requirement per unit of water delivered to each field, despite the additional 2 m head required to convey the water through the pipes;
(d) investment costs are in favor of submersible pumps and piped distribution systems; and
(e) maintenance costs strongly favor a buried pipe distribution system.5/
16. In the light of farmers' reluctance to accept drainage recommenda- tions - again mainly due to loss of land and production - it would be worthwile to study alternatives to open drains.6 /
C. Power Supply
17. The PCR (para. 3.13) states that the performance of the Nepal Electricity Corporation (NEC) with regard to the construction of the power transmission lines was poor, and that stable power to the project was supplied only by mid-1982. The audit agrees with the PCR's conclusion on the delays in constructing the transmission lines, but found that stable power
5/ SAR, Stage II, op. cit., page 24.
6/ See also Korea Pyongtaek-Kumgang Irrigation (Loan 600), OED Report No. 2587 dated July 2, 1979. -5- supplies are not yet assured. It is worth noting that the appraisal of Stage II also assumes adequate power supplies from the existing NEC facilities. 7 /
18. While in the field the mission got some first-hand experience of power blackouts. In discussions with farmers it was found that power failures are a frequent feature and farmers' experience in 1983 has had a most negative impact on future project development. Following the advice of agricultural extension, farmers planted recommended high-yielding varieties (HYV) of rice in early spring. Except for the farmers benefitting from the artesian wells with free-flowing water, all lost their seedlings due to insufficient water availability caused by frequent and extended power failures.
19. Difficulties encountered by NEC, and likely to continue for some time, can be traced to the different power systems feeding into the local station. Power produced in Nepal, which constitutes one source, has a different voltage from the second power supply originating from India. These two different systems have to be "mixed" with the help of a synchronizer, which seems to be the root of the problem. Malfunctioning of the synchronizer is further exacerbated by insufficient stocks of spare parts.
20. Farmers' negative experience with HYVs during the last season and their reluctance to try the higher-yielding varieties this year will have a bearing on the project's economic rate of return. It should be noted that the appraisal of Stage II assumes that 50-65% of the project area will come under HYVs. If reliable power supplies cannot be guaranteed this target will be unattainable.
21. In the audit's view this problem could have been avoided by assigning a power engineer to the appraisal. Agricultural and economic specialists assigned to the appraisal missions cannot be expected to reach the appropriate conclusions and determine if additional investments in power facilities are required, or if spare parts need to be financed to safeguard reliable power supplies. The Stage II financed Study of Groundwater Strategies for Irrigation in the Terai provides for the services of a power engineer who, according to the draft terms of reference, will:
7/ The Region states that in 1983, NEC experienced serious defects at the Gandak power station including leaking turbines and a faulty step-up transformer. IDA continues to press NEC to take action to remedy the situation, which may require replacing some of the malfunctioning equip- ment. In the future the power supply will be secured when the project's 5 MW substation is scheduled to be connected with the 132 kV National Grid. The Stage II appraisal took place in March 1982, which was before the problems with Gandak were discovered. During the appraisal a Bank power engineer familiar with the Nepal power sector was consulted on the power supply aspects of the proposed project. His advice was that the Gandak station would be more than adequate to provide the necessary power. In addition HMGN agreed to operate the 33 kV transmission line from Gandak to the project area as a priority feeder. -6-
...review the performance data covering the supply of electrical energy in the groundwater development areas in Nepal. In particular, review the power distribution system's operational characteristics which have an impact on the delivery of power supplies to private and public tubewells. Identify current constraints on the system in terms of generator capacity, transmission and transformation both for the current situation and for the medium-term future. Make recommendations for the corrective measures required to provide a reliable, timely cost-effective power supply to the tubewells. "8/
In this case one could argue better late than never, however, precious time has already been lost and there is no indication how the required improve- ments will be financed. The credit for Stage II provides only US$0.4 million for the construction of transmission lines.
8/ SAR, Stage II, op. cit., Volume II, Annex 9, page 5, para. 10. -7-
NEPAL
Bhairava-Lumbini Groundwater Project
IDA Credit 654
PROJECT COMPLETION REPORT
March 26, 1984
Irrigation II South Asia Projects Department ダ ツ りクア 乃 必ダ り
ー 2 ー 9
NEPAL
BRAIRARA LUMBINI GROUNDWATER DEVELOPMENT
I. INTRODUCTION
Backitround
1.01 Exploitable groundwater resources are abundant in the southern plains of Nepal and can provide tubewell irrigation for about 0.7 million ba or about oue-fourth of the total Terai jJ area. 'While iTrigatiou development through both shallow and deep tubewells appears to be an effective and economically attractive way of increasing irrigation and cropping inten- sities, their development is seriously handicapped by the limited availability of cheap and reliable energy sources, lack of suitable contrac- tors for construction, low capability of maintenance, and high costs to operate the installations. The Bhairawa-Lumbini Groundwater Development Project was the first medium-sized.?J groundwater project in western Nepal designed to provide quantitative and qualitative information with respect to the planning, construction, and O&N of public tubewell schemes. The experience gained and lessons learnt from the development and management of the tubewell systems vinder the present project are expected to provide a major input in determining the most suitable strategy for groundwater development in the Terai.
1.02 This report focuses on the planning, design, construction, and institutional aspects of project implementation. Because of delays in project implementation, the crucial phase of operating and maintaining the irrigation facilities could not be reached under the project. IDA support fox completion of first phase works and for operation and maintenance has been provided under a follow-up project (Credit 1316 NEP; US$16.0 million; 1983).
Identification
1.03 In the early 1970s HMGN assigned high priority to the development of groundwater resources discovered in the Bhairawa-Lumbini area, in the western
1/ The Terai plain in Nepal is an extension of the Gangetic plain in India. It constitutes about 18 percent of Nepal's total land space.
The first IDA-assistance to groundwater development in Nepal was provided under the Birganj Irrigation Project (Credit 373-NEP). The groundwater component included the rehabilitation of 14 existing wells and the con- struction of 14 new wells with a total command area of 2,700 ha. - 10 -
Terai during a USAID supported 5-year deep drilling probzam. In 1974 EMGN notified IDA that it wished to study the feasibility of groundwater develop- ment in that area with financing provided from Credit 373-NEP. An IDA iden- tification mission visited Nepal in May 1974 to review the request. The mission's main findings and recommendations were the following:
1. The growing need for irrigation in this potentially highly productive area can only be met by developing a public tubewell project based on the groundwater resources.
2. Detailed technical and economical feasibility studies should be conducted to prepare a project suitable for IDA assistance.
Preparation and Appraisal
1.04 The Department of Irrigation, Hydrology and Meteorology (DIEM) employed a consulting firm to undertake feasibility studies, which were completed in October 1975. An important recommendation of the studies was to limit the initial groundwater development in the area to about 7,500 ha. This was based on a conservative estimate of groundwater availability (60 MCM per annum). Project appraisal took place in November/December 1975. The appraisal mission questioned the groundwater availability estimate but accepted the recommendation to limit initial development to about 7,500 ha. It decided, however, to include in the project provisions for studying the feasibility of further groundwater development. Another important decision made during the appraisal process was to carry out well drilling by DIBM's forces instead of contractors, as originally proposed. To allow DIfM to carry out this work the project included provisions for the procurement of two drilling rigs. The main reason for this change was the Bank's fear that the strict requirements in the credit agreement for commitments from poten- tial water users, could disrupt a contractor's drilling program and hence result in large claim. These requirements (Development Credit Agreement Section 3.06) stipulated that "no tubewell shall be drilled until farmers holding at least two-thirds of the irrigable land within the area to be served by the well have joined such a group and agreed to pay water charges and to assist in maintaining irrigation works." Negotiations were held in Washington in May 1976. Board presentation took place on July 6, 1976 and the credit became effective on November 16, 1976.
II. THE PROJECT
The Project Area
2.01 The 20,000 ha gross project area is located within the Rupandebi District in the western Terai at an altitude of about 100 m. It lies between the Dana River in the west, the Rohini River in the east and the India/Nepal - 11 -
border to the south. The area is bisected by the north-south Butwal-Bhairawa road which connects to the major highway systems of Nepal and India. Bhairawa has a population of 30,000 and is served by a daily Royal Nepalese Airlines flight from Kathmandu.
Project Description
2.02 The scope of the project was determined on the basis of development need, accessibility to and agricultural potential of the project area, proven groundwater resources, and HMGN's implementing capability. The main project components were:
A. Project Works
1. Installation of 63 deep tubewells varying in depth from 120 to 200 a, equipRed with electric powered pumps capable of discharging 300 m /hour with 30 a lift
2. Construction of 63 storage reservoirs, each with 2,000 m3 capacity for receiving dischArges from the tubewells
3. Construction of irrigation and drainage networks equipped with con- trol structures to serve 120 ha under each well
4. Construction of approximately 75 km of 11 kV transmission lines and stepdown transformers from 11 kV to 0.4 kV through which power would be delivered from the existing 33 kV Bhairawa-Butwal grid to the project pumps
5. Construction of approximately 70 km of village roads linking the major villages to the existing black-top road network
6. Construction of a 1,000 ton grain storage facility, enlargement of the existing offices of the DIBM and of the Department of Agriculture (DA) at Bhairawa, construction of a small training facility, and simple residential housing accommodations at the Bhairawa Research Farm
B. Other Project Components
1. Procurement of two drilling rigs to be owned and used by the DIH for drilling of the tubewells
2. Procurement of vehicles and equipment to be used for surveys, con- struction supervision, project administration, operation and main- tenance, and research and extension - 12 -
3. Financing of about 235 man-months of consulting services to assist with project implementation and to prepare a feasibility report for a further groundwater development in adjacent areas, and a study of irrigation water charges and their future recommended level
4. Provisions for 68 additional staff of Nepalese agriculturists (exten- sion) and technicians for a period of four years to carry out the intensified agricultural extension and training programs in the project areas
5. Provision of NRs 12.5 million agricultural production credit to farmers managed by the Agricultural Development Bank of Nepal (ADBN) for financing the increased agricultural inputs (fertilizer, pes- ticides, seeds, and payment for hired labor and bullock teams) that would be required once an assured irrigation water supply is provided
Cost and Finance
2.03 The total project cost was estimated at US$13.7 million equivalent as shown below:
Items Cost US$ Million
Land acquisition 0.3 Civil works 3.7 Equipment and vehicles 3.0 Consulting services 1.5 Agricultural support services 0.7 Production credit to farmers 1.0
Base project cost 10.2
Physical contingencies 0.9 Price contingencies 2.6
Total project cost 13.7
The foreign exchange component was estimated at US$6.8 million (50 percent). The IDA credit of US$9.0 million amounted to about 66 percent of project costs and was to finance the foreign exchange costs and 32 percent of the local costs. HNGN was to contribute the balance (US$4.7 million) through annual budgetary appropriations. - 13 -
Procurement
2.04 The procurement of well equipment including drilling rigs, pumps, and motors was to be by International Competitive Bidding (ICB), while construc- tion of smaller works involving labor-intensive construction methods such as irrigation distributary canals, drainage networks, and village roads was to be through Local Competitive Bidding (LCB). The drilling and installation of the wells were to be carried out by force account.
Implementation Orzanization
2.05 The implementation of the project, which was to take four years, was to be carried out by existing line agencies of HMGN. The Department of Irrigation, Hydrology and Meteorology (DIHM) of the Ministry of Food, Agriculture and Irrigation was made responsible for tubewell installation and construction of irrigation and drainage networks for each well, the construc- tion of village roads and the grain storage, as well as coordination of the other project components carried out by other participating agencies. The Nepal Electricity Corporation (NEC) of the Ministry of Water and Power was to be responsible for the construction of the necessary transmission system for electrifying the wells. The Department of Agriculture was to carry out the extension program. In order to execute its part, the DIEM was to establish the Bhairawa-Lumbini Groundwater Office headed by a project manager, which was to coordinate all other project components with other line agencies. Key staff were to be seconded to the project office from their line agencies; other staff were to be recruited directly by the project office. The project manager was to be assisted by the Project Coordinating Committee operating under the chairmanship of the chief district officer and including repre- sentation of all agencies involved in the project at the local level. Coor- dination of implementing the various project components at the national level was to be achieved through the existing Groundwater Resources Development Board (GRDB). The irrigation and drainage system under each well was to be operated and maintained by a Water Users Group comprised of all cultivators receiving service from an individual well.
Benefits
2.06 It was anticipated that at full development (1985) the incremental production resulting from the project would be about 11,000 tons of milled rice and about 16,000 tons of wheat. Part of the increased foodgrain produc- tion would be available for export, which was to result in annual net foreign exchange earnings of US$1.7 million.
2.07 The project was to benefit directly some 4,500 farm. families (about 22,500 persons), 60 percent of whom were at the time of appraisal living below the poverty level of US$50 per person (MRs 3,100/family). At full development before paying water charges, the annual net incomes of farmers operating farms of 0.7 ha or more were expected to increase as follows: - 14 -
Farm Size Present Future with Project Increase (ha) ------Rs------Per cent
0.7 1,588 4,261 168 1.0 2,002 5,894 194 2.0 3,072 10,459 240 6.0 3,671 21,197 477
The more intensive cultivation anticipated under the project was to double the farn labor requirements-an increase in employment opportunities of about 1.1 million man-days. The economic rate of return of the project was estimated at 19 percent.
III. PROJECT IMPLEMENTATION
General
3.01 The project started at a slow pace mainly because well drilling could not commence as scheduled due to non-availability of a suitable rig and of appropriate well casing and screen materials. With the arrival of essential construction equipment, machines, and materials in 1979, implementation picked up. However, the acquisition of construction materials and repair of vehicles and equipment continued to be slow, resulting in further delays. Completion of all project works is now scheduled for mid-1984. Additional factors which contributed to delays in implementation were: cumbersome tendering and land acquisition procedures; poor performance of contractors; steel, cement, brick and fuel shortages; and inadequate staffing and budget allocations. By mid-1982 IDA funds from Credit 654 were fully committed with about 80 percent of the project works completed (Table 1). Because HMGN was unable to provide from its own resources the additional funds required to cover the cost overrun and complete the Stage I works, IDA agreed to provide the required additional funding (US$2.0 million) in Credit 1316, which was to finance a follow-on Stage II Bhairawa-Lumbini Project.
Revisions
3.02 The project, as actually implemented, departed in several respects from the original project description. Sixty-four instead of 63 tubewells were constructed. The storage reservoirs [(par. 2.02A(b)], which were to compensate for the erratic power supply and to minimize the use of energy during peak power demand periods, were not constructed. While the absence of the reservoirs in the existing systems was to some extent compensated by increasing the pumping capacity of the water points (wells), automation of pumping is not possible at this stage. - 15 -
3.03 The power is supplied from the 33 kV line extended from the Gandak West Power Station to Butwal and Bhairawa. Use of this source of power required construction of 7 km of 33 kV transmission line and provision of a 5 NW 33/11 kV transformer substation, which were not foreseen at appraisal.
3.04 Grain Storage. The original project provided for the construction of a 1,000-ton grain storage unit to be located in or near Bhairawa city [par. 2.02A(f)]. This was to provide a central facility for Nepal Food Corporation (NFC) operations. However, in 1979 a proposal was made to build 5 units of 200 ton each which eventually, with IDA approval, was changed into 100 ton input storage units to be built in eight panchayats in the project area. These units are no longer planned to serve NFC, but are to provide storage agricultural inputs such as fertilizers, improved seeds and plant chemicals and for post-harvest storage of agricultural products. The construction of these eight units was 80 percent completed in early 1983.
Design and Implementation
3.05 Wells. As originally designed, the wells were to have bad a 35 cm inside diameter (ID) mild steel pump chamber to a depth of 40 to 50 a and a 25 cm outside diameter (OD) fiberglass production string to 100-200 m depth made of blank pipe and sections of slotted pipe set opposite selected aquifer material. The fiberglass design, however, was applied only experimentally at two sites and the remainder of tne wells were constructed with 25 cm ID mild steel production strings. The 35 cm ID pump chamber was retnined only for a number of wells constructed at the start of the project. Eventually they were changed to 40 cm ID when casing purchased specifically for the project became available.
3.06 As expected, the permeability of the aquifer proved to be high with specific capacities in the range of 23-176 m3 /h and averaging 107 m /h. The design discharges of the 56 wells successfully completed by early 1983 range from 320 to 545 w 3 /h to serve irrigated areas in the range of 5 to 145 ha. Twenty-three wells have artesian discharges in excess of 200 M /h (see Tables 2 and 3).
3.07 Pumping Units. The pumps purchased under the project are 3 or 4 stage turbines with water lubricated column assemblies, a 25 cm diameter rising main, and powered by vertical hollow shaft squirrel cage induction motors. Of the 68 motors purchased, 48 have 100 HP prime movers and are designed to deliver 400 m 3 /h against 45 1 of head and 20 have 75 HP prime movers and are designed to deliver 300 m./h against 45 m of head. Such pumping head requirements are not expected to develop and certainly not within the expected life of the pumping units because of an under estimation of the groundwater availability in the project area. With lower than design heads, the pumps would deliver higher than design discharges. Nevertheless, almost all the pumps are cous4derably overpowered for the required yield (see Table 3). As a result, some of the stages supplied for the turbine bowl - 16 -
assemblies, and some of the shaft assemblies and rising mains became surplus. There are therefore additional spares available for these important pump elements. The pump bowls supplied permit very little clearance in a 35 cm ID pump chamber. As some of the early wells with this size of chamber showed considerable deviation from the vertical, it in some cases restricted the depth to which the pump could actually be lowered. Moreover, these devia- tions from the vertical may lead to a more rapid wear on the pump bearings.
3.08 Power Generation, Transmission, and Transformation. The Gandak West Hydropower Station is located on a 5 m drop on the Gandak left bark main canal. It has three turbines each with a 5 MW installed capacity. At present, only two of the turbines are operated in parallel (the third being kept on stand by), generating on average about 5 MW from about December 15 through March 15 and about 8 MW during the balance of the year. The firm capacity as presently operated is therefore 5 MW, except when the canal is closed for maintenance. The plant supplies power to the national grid through a 132 kV line to Retauda and through a 33 kV line to Butwal and the project area. These works were not financed under the project.
3.09 The project financed 7 km of 33 kV transmission lines from the Gandak 33 kV line to a location in the Stage I project area where a 33/11 kV trans- former substation has been located. From this substation, 73 km of 11 kV transmission lines have been constructed to serve the 64 project wells. Transformation from 11 to 0.4 kV is provided at each wellhead. At full development the project would require about 3 MW of power at the wellhead, assuming water levels in the area decline by 15 m. Considerably less pow2r would be required in the early years.
3.10 Distribution System and Outlets. The wells discharge into a division box which directs the flow into a network of unlined earthen canals. The majority of the canals are built in fill in order to ensure adequate "command." They are provided with the necessary control structures and bridges. The 5 ha outlets are built in conjunction with check structures provided with wooden stoplogs. As the losses of the unlined canals in cer- tain reaches turned out to be high, the follow-up Stage II project provides for lining of some 10 km of the more vulnerable canal reaches. Below the 5 ha outlets farmers were to construct field channels and drains. This had not taken place before the credit closed, because of the delays in project implementation.
3.11 Drainage Systems. The project was to include the construction of a main drainage network, to connect each 5 ha irrigation block to outfalls discharging into the streams which cross the area. Farmers did not see the need for these drains and were therefore unwilling to give up their land for the required easement. Hence, only a limited number of drains were con- structed under the project. The reluctance of the farmers may diminish once the project becomes fully operational and certain low lying areas may become waterlogged. - 17 -
3.12 Supply and Installation of Pumping Equipment. Problems occurred with the contractor who supplied and installed the pumping equipment. These resulted largely from the lack of verticality of the first wells drilled and because of the initial two-year delay in project implementation. As a result, the contractor claimed price escalation and other expenditures, which resulted from the delay and which they considered legitimate, although they were not covered in his contract. As the Government was slow in considering the claims, the contractor left the site in March 1982. In August 1982 an agreement was reached on most of the issues and the contractor resumed his contractual obligations. A recent (mid-1983) inspection of the remaining electrical control panels still in storage in Bhairawa pending installation, revealed substantial corrosion and deterioration of the insulation materials and their generally poor condition. This may explain in part the problems experienced with the panels installed so far. Negotiations between the contractor and Project staff on this issue are continuing.
3.13 Transmission Lines. NEC performance was poor with regard to the construction of the power transmission lines. This relatively small job ranked low on their priority list. In 1980/81 strong pressure from the Bank resulted in an improvement in NEC's performance. Stable power to the project was cupplied by mid 1982.
Agricultural Extension
3.14 The project included the introduction of the T&V system of agricul- tural extension in the project area, which involved the reorganization and strengthening of the existing extension service. Particular emphasis was given to the tubewell irrigated area of 20,000 ha gross. However, in the early years of project implementation it was considered inadequate to limit introducing the T&V system to the project area only. It was therefore agreed to extend the T&V system to the entire Rupandehi District. In support of the expanded agricultural extension and training activities in the Rupandehi District, the IDA assisted Narayani Zone Irrigation Development Stage II Project (Cr. 856-NEP, 1978) provided additional financing for equipment, vehicles, construction of five training subcenters and 22 housing units for JTAs. Funds for the financing of the agricultural extension operation in the Rupandehi District were exhausted in mid-1980. Consequently provisions for additional operational funds were made in the IDA assisted Mahakali Irriga- tion Project to support the extension activities for three more years.
3.15 The T&V system now covers the entire Rupandehi District. Most of the staff, including the subject matter specialists, are in position. The staff working in the project areas has largely focused on laying out field demon- strations to introduce new crops and new varieties of paddy and wheat and on the formation of water users groups in the tubewell command areas. Training programs of JTs, JTAs, and PLAAs have been set up and are regularly held at the Bhairawa Research Farm. Not much of the extension effort has focused on - 18 -
on-farm water management in the tubewell commands, because most wells are not yet operational.
Procurement
3.16 In order to maintain the agreed implementation schedule, well drill- ing under the project started with two old drilling rigs borrowed from DIEM. Several hundred feet of steel casing and other essential materials were also received from DIEM. This was necessary because the two new drilling rigs with casing pipe and other equipment had to be procured through ICB proce- dures, which took about two years to complete. In mid-1977, at the request of HMGN, the Bank agreed to raise the limits of individual and aggregate cost of contracts, to be let under appropriate competitive procedures, from US$10,000 and US$100,000 to US$70,000 and US$700,000 respectively. This emergency procurement decision allowed the project to expedite buying spares for the repair of the old drilling rig and other essential equipment and materials needed to start with well drilling. Delays during the first two years can partly be attributed to the slow preparation of ICB tender docu- ments by the consultants. The tenders were issued on October 10, 1977 and bids were awarded in July 1978. The first pumps and motors were delivered in June 1979, while the rigs and casing materials arrived on site only in August 1979.
3.17 The experience with purchasing trucks through ICB was disappointing. The six Romanian trucks procured were attractively priced and in accordance with the required specifications. However, they turned out to be very unreliable and proved virtually useless to the project. Spare parts were not available in Nepal and both the supplier and Romanian manufacturer ignored HMGN's requests for help. The ICB tendering method resulted in this case in the procurement of useless goods.
Consultants
3.18 There is no doubt that the consultants have contributed substantially to the project's achievement so far. While most of the services provided by them have generally been effective, there have been areas where they could have performed better. One such area is the preparation of technical specifications for pumps and equipment. All pumping equipment was specified during the first year of project implementation before many wells were com- pleted. Despite doubts raised by the Bank 1J the specifications drawn up by the consultants were too conservative and assumed that drawdown would have to
1/ During project appraisal doubts were expressed by the appraisal mission on the reliability of the consultants' estimate of groundwater availability in the project area, and their estimate was considered too conservative. - 19 -
be large to ensure the design discharges. As a result the pump motors provided were too powerful. In addition, more pump stages, line shaft, and rising mains were purchased than turned out to be necessary. This overly conservative approach was reflected in the costs of the equipment and could have been avoided by staging the procurement. The possibility of a staged procurement was indeed discussed with HMGN and IDA, who opted for a single tender to reduce the risk of having different manufacturers supply the pump- ing equipment for the project.
3.19 Some of the delays which occurred in the first years of project implementation were not only caused by cumbersome RMGN tendering and administrative procedures. The slow preparation of ICB tender documents and specifications by the consultants and the fact that their site engineers were required to send designs for project works as prepared in the field to their h!ad office for approval, also contributed to the delays. The latter con- straint was later relaxed through more frequent site visits from senior head office staff of the consultants. Another area which did not receive suffi- cient attention from the consultants during the design stages of the irriga- tion distribution networks, was the need for a conjunctive use pattern of surface water (available to parts of the project area from inundation canals of the Tinau River) with the proposed tubewell supplies. This became clear when farmers insisted on their surface water rights for the traditional field to field flooding in the rainy season.
Special Studies
3.20 Stage II Study. A Stage II feasibility study was financed under the project. The study was carried out by the consultants, which assisted in the implementation of the project. A report which included the main findings and recommendations was submitted in October 1980. It recommended a Stage II project of further groundwater development in a net area of 14,600 ha, located adjacent to the Stage I project area. Because of the increasing delays in project implementation and doubts about the capabilities of DIEM to operate and maintain the completed project, the concept of the Stage II project was changed in 1981. The new project was to concentrate on complet- * ing the 64 Stage I tubewells and related works and on enruring that they would be properly operated and maintained. In addition, the Stage II project was to induce active farmers' participation in the operation of the wells and ensure the availability of agricultural inputs and support services. It was also to experiment with improved technologies in the design, construction, and O&M of a small number (15) of new tubewell schemes.
3.21 Cost Recovery. Section 4.02 of the credit agreement required the Borrower to establish and collect water charges beginning not later than one year after completion of the works for each tubewell. No water charges have so far been collected, as the first wells became operational only from mid-1982 onwards. In order to come up with a practical cost recovery policy, the borrower with assistance from the project consultants carried out a cost - 20 -
recovery study in 1979. The report provided a generalized analysis of the existing water charges situation, but failed to give specific solutions to the project related cost recovery problems. However, because of delays in project implementation, decisions on cost recovery charges and collection procedures were deferred to the Stage II project.
IV. IRRIGATION AND AGRICULTURE PERFORMANCE
Introduction
4.01 The project has largely concentrated on the construction of infrastructure works and the crucial phase of properly operating and main- taining the tubevell schemes had to be deferred to Stage II. While the project has developed a conceptual framework for O&M of the tubewell systems, sustained agricultural development will hinge on a reliable water supply, on-farm development, experienced and dedicated staff, sufficient funding for O&M, and improved agricultural support services. At the time this ?CR was prepared, it was too early to determine the project-s impact on irrigation and agriculture performance. Most of the descriptions given below are based on observing farmers and the performance of a few schemes which were under partial operation since mid-1982 and should therefore be considered as tenta- tive.
Irrigation System Performance
4.02 Pumping tests of Sompleted wells have given exceptionally high yields in the range of 230-540 m /hour for drawdowns of a few meters. The water levels in the constructed wells are permanently or seasonally near ground level in about two thirds of the area. Water levels deeper than 5 m below land :face occur in only 5 percent of the project area. The project wells will i.!ve no difficulty in producing good quality irrigation water at the requir--d discaargers.
4.03 The expectation that the farmers would readily construct field chan- nels .. ;iuL yet materialized. Part of the problem relates to the Tinau ca-al '-y. tems. These canals cut through some of the tubewell commands and prom% n t-- monsoon considerable quantities of water which the farmers use for foral field to field flooding. This problem may eventually be sol,,..h larmiers realize that the supply from the tubewell systems is more reli_ than the uncertain supplies from the Tinau system. However, strong actiPn by the project authorities is required to have field channel distribu- t io: -- plemr:nted in the 5 ha blocks.
4.04 Since mid-1982 the power supply system from the Gandak West Hydro;-;-r Stztion appears to be working reasonably well. However, outages - 21 -
occur occasionally and there are periods of low voltage, usually associated with periods when the power supply is provided from the Indian network. NEC has so far given the promised power supply priority to the tubewells. The situation is expected to improve further when the 132 kV transmission line is extended to Butwal in two to three years time.
4.05 The project design opted for high yielding wells, which provide the lowest cost water at the wellheads. However, high yields require relatively large comand areas with more complex water distribution and management requirements. It is not yet possible to assess whether adoption of the high well yield concept was correct.
Agricultural Development
4.06 Throughout the first years of the project, the Bank was concerned with promoting agricultural development activities in the project area and supported the planning and coordination efforts of ADBN for the supply of agricultural credit through farmers cooperatives, the supply of inputs, provision of storage, and organization of marketing. The agricultural activities suffered initially from a lack of senior staff, budget, transport, and training facilities. However, the continuous pressure to improve the situation has finally resulted in achievements as described in par. 3.15.
V. COSTS, FINANCING AND DISBURSEMENTS
Costs
5.01 At appraisal the project cost was estimated at US$13.7 million (NRs 171 million, see table 4). The revised cost estimate to completion, now scheduled for mid-1984, is US$17.5 million (MRs 228 million).. This represents a cost increase over the appraisal cost estimate of about US$3.8 million or 28 percent. The cost overrun is mainly due to the delay in project implementation which has resulted in higher costs for civil works, engineering, administration, and consulting services. In addition, the cost of the drilling rigs, well casing materials, transformers, and conductors turned out to be higher than estimated at appraisal. The foreign exchange component has not changed much from the 50 percent estimate at appraisal. Based on the revised cost estimate the foreign exchange component*now stands at about 51 percent of the total cost (see Table 5).
Financing
5.02 Because of delays in project implementation and unforeseen costs increases, the original credit (par. 2.03) would have financed only 55 per- cent of the project cost. To assist EMGN in completing the project, it was decided to provide US$2.0 million of additional financing under the - 22 -
Bhairava-Lumbini Stage II project. The financing plan of the project costs up to completion is now as follows:
Financing of Project Cost
IDA Credit US $ Million
654 - Bhairava Lumbini 8.5 a/ 1055 - Mahakali 0.1 856 - Narayani II 0.9 1316 - Bhairawa Lumbini II 2.0
Total IDA financing 11.5 (70%)
HMGN 5.0 (30%)
16.5 (100%) ADBN 1.0
Total 17.5
a/ Excluding US$0.5 million disbursed from Credit 654 for engineering services for the preparation of the Sunsari Morang Irrigation Project authorized on Development Credit Agreement amended in December 1977, wh;zh effectively reduced IDA funding to the project by this amount.
IDA funds under Credits 1055 and 856 were allocated in 1978 to finance part of the extra costs involved in the introduction and operation of the T&V system of agricultural extension in the entire Rupandehi district (US$0.3 million) and to finance the purchase of one of the two drilling rigs procured for the project (US$0.7'million).
Disbursements
5.03 Disbursements from Credit 654 are presented in Table 6. The delays in completion of the project is reflected in the extended disbursement period. Only about 65 percent of the credit was disbursed by the original credit closing target date of July 30, 1981. The credit was closed on March 1, 1983. Disbursements under the various categories as compared with the allocations made at appraisal was as follows: - 23 -
Category Description Allocation Disbursement -- US$ Million-
(1) Construction materials, equipment vehicles, and spare parts 2.7 4.1
(2) Civil works (a) force accounts 0.4 0.4 (b) under contracts 2.4 2.0
(3) Consulting services 1.4 2.5 a/
(4) Unallocated 2.1 -
Total 9.0 9.0 aj Including US$0.5 million for the preparation of the Sunsari Morang Irrigation Project.
VI. INSTITUTIONAL PERFORMANCE
General
6.01 An important objective of the project was to contribute to building up a long-term capacity of staff and institutions capable of planning, con- structing, and running this project, and future similar groundwater develop- ment projects elsewhere in Nepal. The implementation of the project was basically carried out by units of the existing line agencies that were located in the project office. The office was set up under a special arran- gement to ensure coordination among the agencies. The project office was headed by a project manager, who was responsible to the Groundwater Resources Development Board (GRDB) for programming, budgeting, and finance and who coordinated all project activities. The above organizational set up has operated satisfactorily. The Nepalese staff associated with the project received valuable on-the-job training in planning, design, and construction of tubewell schemes, as well as in procurement.
Manasement
6.02 During the early .project years, most of the authority for making day-to-day decisions remained with the Groundwater Development Board, whose members were all based in Kathmandu. Dring 1978 and 1979, responsibilities were gradually transferred to the project manager. The project manager was also to exercise administrative and budgetary control over the project's agricultural activities including the extension service, with responsibility - 24 -
for technical matters to remain with the Department of Agriculture. In practice, this proved difficult and became a frequent source of friction between senior project staff. The decision to extend the T & V system to the entire Rupandehi District (par. 3.14) made it even more difficult for the Department of Agriculture to accept budgetary and administrative control through the project manager (a senior DIEM official).
Staff ing
6.03 During the first years of project implementation, the project was inadequately staffed with engineering and agricultural personnel. The main reasons were:
1. Project allowances offered were lower than for other development projects.
2. The project had been allowed few "regular" posts. In accordance with regulations of the Public Service Commission this meant that tem- porary staff recruited and trained by the project would be posted elsewhere upon qualifying for the Regular Government Service.
In 1979, discrepancies in the pay scales were removed and additional regular posts were established at DIHM head office in Kathmandu. This made it pos- sible to promote project staff to these head office posts, from which they were then immediately deputed back to the project. In spite of these measures, staffing continued to be problematic in particular with regard to agricultural and workshop staff. Given the low level of public sector salaries for trained staff relative to what they could earn in the private sector, the project found it difficult to attract workshop staff, such as mechanics, workshop foremen, and electricians.
Water Users Groups
6.04 The establishment of water- user groups has progressed slowly. HMGN had agreed (DCA; Section 3.06) to start the drilling of a tubewell only after a two-thirds majority of the potential beneficiaries in each well command area had signed up in a water-user group and agreed to pay water charges. This policy was not strictly followed. As a result only a few formal water-user groups exist today in the tubewell command areas.
Accounting, Auditing and Reporting
6.05 The project organization's accounting system was considered adequate. Auditing of the project office-s accounts and financial statements were carried out by a private accounting firm working under contract with the Auditor General's Office of Nepal. The audit reports submitted to IDA for each financial statement were generally delayed beyond the date stipulated in the relevant covenant of the project agreement. The latest audit received - 25 -
covers FY 80/81. The audits confirmed proper management of the funds allo- cated to the project. The project furnished quarterly progress reports though after considerable delays and often incomplete.
Monitoring and Evaluation
6.06 Agreed monitoring and evaluation activities under the project were limited to the monitoring of (i) the effect of pumping on the groundwater aquifers during and after project construction; and (ii) the monitoring of the agricultural production and project benefits. The regular groundwater observations only confirmed the expected seasonal water table fluctuations, because pumping so far has been negligible. A pre-project benchmark survey was carried out in 1979. Project impact studies to measure incremental production and benefits from the project will be carried out under the Stage II project.
VII. ECONOMIC RE-EVALUATION
Economic Rate of Return
7.01 The project's economic rate of return (ERR) has been re-estimated, taking into account the actual costs incurred, and a revised estimate of O&M costs and agricultural benefits. The resulting ERR is about 10 percent as compared with the appraisal estimate of 19 percent. The cost and benefit streams for this analysis are given in Table 7.1/ The lover rate of return is mainly a result of the following factors:
1. A much longer implementation period than foreseen at appraisal
2. Higher investment costs
3. Substantial higher estimates for O&M costs, in particular, elec- tricity cost
4. Stagnation of economic prices for the major commodities grown in the project areas and consequently deterioration of input/ output price relation
While an ERR of 10 percent is relatively low, one should not forget that the project was the first medium-sized groundwater irrigation development in the Western Terai carried out to test the viability of future large scale groundwater development projects in Nepal. This has caused an unnecessarily long and unforeseen implementation period and overhead costs that are larger
1/ Details on the assumptions for the economic re-evaluation of the project are provided in the Bhairava-Lumbini Stage II oAR of December 1982. - 26 -
than normal. In addition the cost of drilling and developing the project's tubevells on force account proved to be higher than if undertaken by contrac- tors. If these considerations are taken into account the economic rate of return for future groundwater projects may be higher.
7.02 Further important benefits from the project are that a nucleus of staff has gained valuable experience in planning, design, and construction of a sizeable groundwater project and that it has contributed to overcome some of the difficulties facing groundwater development in a country like Nepal. This is particularly important because groundwater development in Nepal has enormous potential and is considered an essential component of the short- and medium-term irrigation development strategy of the country. Further invest- ments must be made to continue with the work started under this project: introducing and developing modern tubewell technologies and advanced manage- ment and construction techniques. This is essential for Nepal where alterna- tive investment opportunities are limited to large surface irrigation schemes, wich require huge investments in storage dams in the foothills of the Himalayas and have long gestation periods.
Other Benefits
7.03 The project contains a sizeable village road component. These roads, apart from giving access to wells, will be instrumental in achieving the benefits from irrigation, since they facilitate delivery of inputs to farmers and the marketing of surplus produce. It is likely that the roads will yield substantial additional benefits in the form of increased communication, time, and cost savings. This is already evident from the manyfold increase in vehicle traffic on the existing project roads, including regular bus routes. Another benefit is the year-round availability from the tubewells of safe drinking and bathing water. These additional benefits have not been quan- tified.
VIII. BANK PERFORMANCE
Preparation and Appraisal
8.01 The Ehairawa-Lumbini Project was the second IDA-assisted operation in the irrigation subsector and the first sizeable groundwater development in Nepal. Bank missions provided valuable assistance in identifying and for- mulating a suitable project plan. These plans plus the feasibility report prepared by consultants provided the basis for the appraisal of project. In general the project was prepared in adequate detail and the preparation and appraisal concentrated on the right issues. Looking back, it is apparent that the Bank was too optimistic with regard to the borrower's implementation capabilities. This resulted in an unrealistic and overambitious project implementation schedule. - 27 -
8.02 In retrospect it was a mistake to procure drilling rigs for the project to drill the wells under force account. Procurement of the rigs caused a long delay in the implementation of the project and led to the construction of some substandard wells by using the old DIHM rigs. Moreover, the rigs purchased were oversized for the work involved, proved difficult and expensive to maintain, and little additional work can be foreseen for this equipment in the near future. The actual cost of the wells reflects the high cost of the drilling equipment provided for the project. Perhaps a better way to drill the wells would have been through a well drilling contract. When this alternative was proposed to HMGN during apraisal, it strongly opposed the idea, claiming that force account drilling would provide them over time with experienced drillers and foremen who would be trained by the project consultants during project implementation.
Supervision
8.03 Because of the delays and problems faced by the project, the Bank maintained a regular and generally well-timed supervision schedule throughout the project's implementation period. During the 1976-1982 period of project implementation, 13 Bank supervisions visited the project area. Continuity of Bank staff participating in the supervision activities has been good, which certainly helped in resolving problems and in effectively communicating with project staff, consultants, and Government officials at the decision making level in Kathmandu. The options open to the Bank missions to change the construction methods and tubewell technologies as defined for the project were rather limited, primarily because all construction and pumping equipment were procured in the early stages of project implementation. Desirable changes and adjustments in tubewell technologies were deferred to the Stage II project. New project designs to be introduced in this project take into account the lessons learnt from the present project.
IX. LESSONS LEARNT
9.01 The project was limited in scale and scope particularly when measured against the potential for groundwater development for irrigation in the Terai. The construction stage of the project has been fairly successful, considering the lack of experience, the difficult environment, and numerous constraints prevalent in Nepal. In the longer term the success or failure of the project will depend very much on whether the installed tubewells and distribution facilities are properly maintained and operated, and whether active farmers' participation can be induced. To assist in achieving these objectives, the Bank decided in 1982 to continue its association with the project through a Stage II project (IDA Credit 1316, 1983) which will not only assist in the O&M of the project and in agricultural development, but will also experiment with modern tubewell technologies and implementation methods which were successfully tried out in neighboring states in India. - 28 -
9.02 Appraisal estimates of the likely rate of project implementation were overly optimistic. The task of preparing the necessary bidding documents, and awarding the contracts for the supply of the drilling and pumping equip- ment took substantially longer time than foreseen at appraisal. Over the years further delays in implementing the project were incurred because of a shortage of key materials (cement, fuel, steel) and local funding, as well as poor performance of contractors.
9.03 It is premature to conclude whether the adoption of high-yielding wells, unlined conveyance systems, and the installation of vertical shaft-type pumps were the most suitable designs for the project area. Indications are, however, that the pumps installed are overpowered and that the unlined distribution system is likely to cause excessive water losses. While seepage losses appear not to be high in most of the systems, direct leakage through rat and crab holes are considerable and require constant repairs. Moreover, the unlined canals are easily cut by the farmers to deliver water directly to their fields. This is already common practice in the absence of a properly constructed and operated field channel system. The wooden slide gates in the check structures are flimsy and leak badly. They are also easily stolen. A more robust concrete slide gate system would have been a better solution. The Stage II project is planned to eliminate some of the design shortcomings and minimize delays in implementation through the -.--introduction of modern technologies such as pipe distribution systems, sub- mexsible pumps and automated controls. - 29 - Table 1
NEPAL
BRAIRAWA-LUMBINI GROUNDWATER PROJECT
Physical Achievements Achievement Z of Revised Appraisal Revised Achieved Estimate Estimate Estimate Oct 82/Aug 83 Oct 82/Aug 83
Land acquisition - ha L.S. 306 300 301 98 98
Tubevells Drilling - no 63 67 a/ 60 64 90 100 Testing - no 63 66 bI 55 64 83 100 Installation - no 63 64 15 43 23 65 Commissioning - no 63 64 9 39 14 60 Pumphouses - no 63 64 - under construction - no 18 61 28 95 - completed - no 35 48 55 75
Irrigation and drainage network Contracts signed - no 63 18 c/ Construction - no 63 64 - ongoing - no 65 64 100 100 - completed - no 51 62 e/ 80 98
Transmission and transformation 33 kV - km - 7 7 7 100 100 11 kV - km 70 80 66 78 90 97 transformer (33/11 kV) - 1 1 1 100 100 transformer (11/0.4 kV) 63 64 29 43 45 67
Village roads - km 75 96 90 96 94 100
Grain stores - no 1 8d] ) 6 80
Agricultural subeenters ) -no 5 )15% 4 15* 80
JTA quarters L.S. 22 ) 19 85
Offices and residential quarters L.S. L.S. 95% 100% 95 100
Estimated overall achievement 80 90 a/ Including two observation wells in feasibility study area and one abandoned well in stage area. bf Including two observation wells in feasibility study area. rf Covers construction of all 64 units. dI One 1,000-ton unit revised to 8 units of 100 ton each ef Equivalent. - 30 - Table 2
NEPAL
BRAIRAWA-LUMBINI GROMND.ATER PROJECT
Well Desian and Production Data
Sand Z in Unit Depth to Total Pump Sand Total Production Production Specific Specific Static o. Depth Chamber Screen Screened Sand String String Yi1Id Dravdown Ca acit Capacity Water Level (M) (m) (M) (M) (m) (m) (V/) (.1h) (m)
1 115 52 35 29 29 63 46 286 5.9 48 1.37 -7.7 2 122 46 444 4 50 76 66 223 2.5 89 2.03 +3.7 3 119 43 34 34 52 76 68 409 4.1 100 2.94 +0.26 4 126 42 5' 47 47 84 56 382 15.9 24 0.44 +2.0 5 107 38 39 39 53 69 77 409 6.4 64 1.64 +1.0 6 120 37 42 42 52 83 68 - - - - - 7 113 35 36 36 46 78 59 409 2.98 137 3.81 -1.4 8 111 41 44 43 43 70 61 409 6.01 68 1.55 +3.3 9 120 38 51 51 56 82 68 409 2.32 176 3.46 -1.3 10 110 32 48 48 57 78 73 400 2.5 160 3.33 -0.9 11 116 35 51 41 41 81 51 409 3.49 117 2.86 -1.78 12 101 38 46 46 46 63 73 409 3.85 106 2.31 -1.6 13 110 29 40 40 47 81 58 4C9 2.79 147 3.66 -4.6 14 126 45 47 47 50 81 62 432 3.8 114 2.42 -4.7 15 119 44 37 37 47 75 63 392 6.9 57 1.54 +0.5 16 139 45 40 40 63 94 67 400 17.5 23 0.57 -2.4 17 123 45 40 40 45 78 58 470 7.2 65 1.63 -'.6 18 118 43 42 42 48 75 64 450 5.7 79 1.88 +2.2 19 140 44 35 35 49 96 51 500 9.2 54 1.54 -4.2 20 118 46 41 41 49 72 68 545 6.0 90 2.20 -2.5 21 140 47 49 49 79 93 85 396 5.6 71 1.44 -8.0 22 141 45 41 41 65 96 68 370 5.4 68 1.66 -3.2 23 121 44 42 42 62 77 81 386 3.9 99 2.36 -7.7 24 130 45 41 41 65 85 76 525 4.0 131 3.12 -3.5 25 132 45 48 48 64 87 74 432 4.1 106 2.21 -4.0 26 141 41 42 42 42 100 42 450 4.7 96 2.21 -2.0 27 137 45 42 42 46 92 50 405 6.3 65 1.55 -4.4 28 130 41 42 42 89 409 3.17 129 3.07 +3.7 29 126 44 43 45 51 82 62 432 3.2 135 3.00 +2.9 30 149 43 53 53 58 106 55 345 3.2 108 2.04 -1.7 31 136 43 48 48 62 93 67 386 2.6 148 3.08 -0.9 32 136 46 47 47 61 90 68 386 2.2 175 3.73 -2.0 33 143 46 50 50 66 97 68 386 2.2 175 3.51 +0.5 34 165 42 59 59 70 123 57 320 3.0 102 1.73 +4.0 35 151 41 50 50 60 110 55 455 2.0 159 3.18 +1.38 36 184 40 60 60 67 144 47 470 6.0 78 .1.39 -0.73 37 162 50 56 56 60 112 54 - - - - - 38 190 48 48 48 80 142 56 - - - - - 39 164 43 57 57 65 121 54 - - - - - 40 175 38 47 47 65 137 47 - - - - - 41 176 54 60 60 70 122 57 - - - - - 42 169 43 77 77 100 126 79 475 3.7 130 1.69 13.37 43 164 41 85 70 90 123 73 530 7.4 72 1.02 +0.66 44 161 43 - - 68 118 59 415 2.7 154 - -1.65 45 163 47 67 67 80 116 69 - - - - - 46 151 41 70 70 72 110 65 395 2.6 150 2.14 -5.18 47 160 48 63 63 70 112 63 - - - - - 48 164 43 60 60 78 121 64 435 4.2 104 1.73 +0.1 51 164 47 63 - - 117 ------52 158 43 77 77 78 115 68 385 3.3 117 1.52 +2.95 53 154 46 81 75 90 108 83 - - - - -
B. 9tatistical Sumary of Important Characteristics
Average Range Sample Characteristice Value From To Size
Sand Screened (a) 49 29 77 49 Total Sand in Production String (m) 59 29 100 49 Sand % iskProduction String 63 42 85 49 Yield Im/h) 414 223 545 40 Specific Capacity (x2/h) 107 23 176 40 Unit Specific Capacity (/h) La 2.2 0.44 3.81 40
LA Unit SC as Tield/Drawdown/Length of sand screened - this is an aquifer permeability indicator. NEPAL
BHAIRAWA-LUMBINI GROUNDWATER PROJECT
Summary of Well and Pump Characteristics
Static Water Pump Dravdown Recommended HP of Pump Well Level Below Chamber Required Specific at Required Pumping Pump to be Irrigated Pumping HP Required No. F;-an&se-. Depth Yield Capacity /1 Yield Water Level Settina b Installed Area Water Level at PWL /c (m) ) (M) (m) (ha) (+15 m) (+15 m)
1 -7.2 50 405 73 5.5 12.7 32 75 108 27.7 70 3 -0.3 39 440 101 4.4 4.7 18 100 117 19.7 55 4 +2.0 40 400 23 17.6 15.6 34 100 107 30.6 76 5 0.0 35 445 60 7.4 7.4 18 100 118 22.4 62 7 -1.4 32 510 131 4.0 5.4 18 100 138 20.4 66 9 -1.3 34 380 180 2.1 3.5 15 75 101 18.5 44 11 -1.8 18 435 109 4.0 5.8 15 100 116 20.8 56 12 -1.6 35 530 86 6.0 7.6 18 100 141 22.6 74 13 -4.6 26 425 12) 3.3 7.9 21 100 113 22.9 60 14 -4.7 39 460 106 4.4 9.1 21 100 123 24.1 69 15 -2.4 43 540 19 28.0 30.4 40 100 144 43.0 144 16 +0.5 42 435 56 7.7 7.2 24 100 116 22.2 60 17 -1.6 43 470 65 7.2 8.8 21 100 125 23.8 69 18 +2.2 39 415 86 4.8 2.6 18 75 110 17.6 45 19 -4.2 44 500 54 9.2 13.4 27 100 133 28.4 88 20 -2.5 43 545 90 6.0 8.5 24 100 145 23.5 79 21 -8.0 44 355 51 7.0 15.0 30 75 94 30.0 66 22 -3.5 42 525 131 4.0 7.5 30 75 98 23.9 55 23 -7.7 41 385 101 3.8 11.5 24 100 102 26.5 63 24 -3.5 42 525 131 4.0 7.5 24 100 140 22.5 73 25 -3.2 42 425 110 3.9 7.1 30 100 113 22.1 58 26 -2.0 43 450 96 4.7 6.7 27 100 120 21.7 61 27 -4.4 41 405 65 6.3 10.7 30 100 108 25.7 65 28 +3.7 40 455 123 3.7 0.0 15 100 121 15.0 42 29 +2.9 40 435 132 3.3 0.4 15 100 116 15.4 42 30 +1.7 43 345 108 3.2 1.5 30 75 92 16.5 35 31 -0.9 39 475 142 3.4 4.3 21 100 127 19.3 57 32 -2.0 42 430 160 2.7 4.7 21 100 114 19.7 53 33 +0.5 43 473 166 2.9 2.4 18 100 126 17.4 51 34 +4.0 42 320 102 3.1 0.9 24 75 85 14.0 27 35 +1.4 41 455 159 2.9 1.5 24 100 121 16.5 47 36 -0.7 40 470 78 6.0 6.8 30 100 125 21.8 64 41 +3.0 43 385 117 3.3 0.3 27 75 103 15.3 37 42 +3.4 43 475 130 3.7 0.3 27 100 127 15.3 45 43 +0.7 41 530 72 7.4 6.8 30 100 141 21.8 72 44 -1.7 43 415 154 2.7 4.3 24 100 110 19.3 50 46 -5.2 41 395 150 2.6 7.8 20 75 105 22.8 56 48 +0.1 43 435 104 4.2 4.1 30 100 116 19.1 52 52 +0.3 43 385 117 3.3 0.3 27 75 103 15.3 37 0"
/A This specific capacity is at aproximately design discharge. /1k As recommended by project. /_ Assumes long term vater level decline of 15 m and pump Wire to water efficiency of 60Z. - 32 - Table 4
NEPAL
BRAIRAWA-LUMBINI GROUNDWATER PROJECT
Cost Estimates (NRa million)
At Appraisal Revised Estimate % % Foreign Foreign Total Foreign Exchange Total Foreign Exchange
Land acquisition 5.0 - - 10.0 -
Civil vorks 66.4 16.6 25 92.3 27.7 30
Equipment, vehicles and materials 50.4 45.3 90 63.1 60.0 95
Consulting services 25.2 21.5 90 26.1 24.8 95
Project services 11.4 1.2 10 24.2 3.6 15
Agr. credit to farmers 12.5 - - 12.5 - -
Total NRs million 170.9 84.6 50 228.2 116.1 51
Total US$ million 13.7 6.8 18.0 9.2
Exchange rate US$1 = NRs 12.5 12.7 - 33 - Table 5
NEPAL
BRAIRARA-LUMBINI GROUNDWATER PROJECT
Summary of Project Expenditures
I Deviation Total Appraisal Revised from to July Estimate Estimate Appraisal Nepal Fiscal Year 1983 Oct 83 77/78 78/79 79/80 80/81 81/82 82/83 ------NRz million ------
Land acquisition 5.0 10.0 100 0.3 0.5 1.9 1.3 2.5 1.4 7.9
Civil works Buildings 3.3 6.2 88 - 0.8 1.3 0.6 0.5 1.9 4.9 Irrigation and drainage networks 33.6 33.8 g/ - - 1.3 2.7 11.5 8.6 6.4 30.5 Village roads 11.7 21.0 80 0.1 1.8 3.5 7.9 4.5 2.6 20.4 Tubewell drilling 8.5 15.4 81 1.1 - - 0.7 6.6 5.8 14.2 Transmission lines and transformers .3 MSA8 70 - 1.4 0.1 ,9 3., JI 12.4
Sub-total (2) 66.4 92.2 39 1.2 7.0 7.4 25.6 23.2 18.0 82.4
Equipment, vehicles and materials
Construction and tubevell equipmentV/ 38.7 55.0 hf/ 42 1.9 19.8 32.1 - - - A.3.8 Vehicles 5.0 3.1 -38 2.4 0.2 - - 0.1 - 2.7 Other equipment and materials 6.7 .2.J -f2 0.1 0.8 1.4 0.6 LI _.2
Sub-total (3) 50.4 63.1 25 4.4 20.8 32.1 1.4 0.7 0.3 59.7
ConsulZing services 25.2 26.1 a 4 9.7 7.4 7.8 c/ 1.8 3.2 1.1 31.0
Project services
Agricultural support services 3.3 6.7 a/ 103 - 0.1 0.3 0.7 1.4 4.1 5.6 Engineering and administration 8.1 17 - 116 3.7 3A 2.4 L4 2.8 28 Jl.a
Sub-total (5) 11.4 24.2 112 3.7 3.5 2.5 2.1 4.2 6.9 22.9
Agricultural credit to farmers 12.5 12.5 ------4/
Total in MRs Million 170.9 228.1 33 19.3 39.2 51.7 32.2 33.8 27.7 203.9
in US$ million 13.7 18.0 31 1.5 3.3 4.3 2.7 2.6 2.0 16.4
Exchange rate: 1 us$ - nRs 12.5 12.7 12.5 12.0 12.0 12.0 13.2 14.0 12.5
a/ Revised estimate with additional IDA financing provided under Credits 812 (US$0.2 million) and 1055 (US$0.1 million). f/ Revised estian e with US$0.7 million provided under IDA Credit 856. c/ Revised estimate with 5880.5 million provided under IDA Credit 654 spent on preparation of of Sunsari-Morang Irrigation Project. dj No information available. e/ Includes pumphouses.
/ Including two drilling rigs (ERs 17.7 million incurred in 79/80). - 34 - Table 6
NEPAL
BEAIRAVA-LUMBINI GROUNDWATER PROJECT
Staite I
Credit 654
Disbursements
Actual or Latest Estimated Disbursements IBRD Fiscal Appraisal Revised Actual Total As Z of Appraisal Year and Semester Estimate Estimate Disbursements Estimate (10/31/79) - -- US $ Million ---
1977 1st 0.5 2nd 1.0 0.2 20
1978 1st 2.0 0.4 20 2nd 3.0 1.0 33 1979 1st 4.0 1.5 38 2nd 5.5 3.6 65
1980 1st 7.0 5.0 4.8 69 2nd 8.0 5.5 3.3 79
1981 1st 8.5 6.0 6.7 79 2nd 9.0 7.0 6.8 76
1982 1st 8.0 7.8 87 2nd 8.5 8.5 94
1983 1st 9.0 8.9 99 2nd 9.0 100 :;!&!!-’�〕J‘一 ＿
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