Document of The World Bank Public Disclosure Authorized Report No. 12811-AM
STAFF APPRAISAL REPORT
REPUBLIC OF ARNENIA Public Disclosure Authorized
IRRIGATION REHABILITATION PROJECT
NOVEMBER 2, 1994 Public Disclosure Authorized
Public Disclosure Authorized Natural Resources Management Division Country Department IV Europe and Central Asia Region CURRENCY EOUIVALENT
Currency Unit: Ruble Exchange Rate Rubles per $ March 1993 684 June 1993 1,100 October 1993 2,600 Currency Unit: Drum Exchange Rate Drums per $ November 22, 1993 14.0 (introduction) April 29, 1994 400.0 September 28, 1994 385.0
WEIGHTS AND MEASURES
ha hectare knm2 square kilometer kw kilowatt kwh kilowatt hour m meter m3 cubic meter m3/sec cubic meters per second t/ha tons per hectare
FISCAL YEAR
January 1 - December 31
ABBREVIATIONS AND ACRONYMS
asl above sea level Al artificial insemination DWSI Department of Water Supply and Irrigation ERR economic rate of return FAO/CP Food and Agriculture Organization Cooperative Programme FSU Former Soviet Union GDP gross domestic product HSI Hydrological Studies Institute ICB International Competitive Bidding IDA International Development Association IFAD International Fund for Agricultural Development LCB Local Competitive Bidding M&ES Monitoring and Evaluation Section MOA Ministry of Agriculture NMP net material product OME Operation and Maintenance Enterprise of the DWSI O&M operation and maintenance PCR Project Completion Report PPF Project Preparation Facility PIU Project Implementation Unit SOE Statement of Expenditure TOR Terms of Reference USDA United States Department of Agriculture WPI Water Planning Institute WUA water users' association REPUBLICOF ARMENIA
IRRIGATIONREHABILITATION PROJECT
Table of Contents Page No.
LOAN AND PROJECT SUMMARY ...... i
I. BACKGROUND...... 1 A. Introduction...... 1 B. The Economy ...... 1
II. THE AGRICULTURESECTOR .5 A. Background .5 B. AgriculturalProduction. 6 C. Consumptionand Self-Sufficiencyin Agricultural Products .7
III. WATER RESOURCESAND THE IRRIGATIONSUBSECTOR .9 A. Water Resources.9 B. Irrigation.11 C. Objectivesand Strategy of Bank Assistance.14 D. Lessons from Previous Bank Involvement.14
IV. THE PROJECT .17 A. Project Objectives.17 B. Rationale for IDA Involvement.17 C. The Proposed Project .17 D. The Rationale for Project Design .18 E. Detailed Project Description.20 F. Project Costs .24
This report is based on the findings of an AppraisalMission in October 1993. Membersof the Appraisalteam includedEzriel Brook (Task Manager), Stan Peabody(Sociologist), Camilla Brown (OperationsAnalyst), and Oscar Honisch (Principal Agriculturalist)from the Bank; and consultants Eli Gazit (Water Resource and Irrigation Engineer)and Richard Van Klaveren (Water Management Engineer). Editorial support was provided by Alan Zuschlag and RebeccaKary. The project was identifiedby the FAO/CP in September 1992 and March 1993, and preparation was carried out by IRS/TKBconsulting firm, headed by Gabriel Tibor. Data and support for the project identification, preparation, and appraisal was provided by the Armenian Water Planning Institute. Peer reviewers includedUlrich Kuffner, Joma Mohamadi, Willem Van Tuijl, and D. Jeremy W. Berkoff. The Division Chief is GeoffreyFox (EC4NR), and the DepartmentDirector is Basil Kavalsky(EC4DR). G. Financing ...... 25 H. Procurement ...... 26 I. Disbursement ...... 31
V. PROJECTIMPLEMENTATION ...... 33 A. Organizationand Management ...... 33 B. Project Phasing ...... 36 C. Project Monitoring, Evaluation, and Reporting ...... 38 D. Accountsand Audit ...... 39 E. Bank Supervision ...... 39
VI. PROJECT BENEFITS, RISKS,AND ENVIRONMENTALIMPACTS ...... 41 A. Project Benefits ...... 41 B. Economic Evaluation ...... 43 C. Risks ...... 46 D. EnvironmentalImpact ...... 47
VII. AGREEMENTSREACHED IN NEGOTIATIONS ...... 49
ANNEXES 1 StatisticalAnnex ...... 51 2 The AgricultureSector Review ...... 75 3 The Water Supplyand Irrigation Department ...... 87 4 The Irrigation RehabilitationEngineering Program ...... 89 5 Water Management ...... 99 6 LCB Procedures, Contracts, and ProcurementPackages ...... 115 7 Terms of Referencefor the Project ImplementationUnit and Consultants ...... 121 8 Agricultural Development ...... 133 9 Project ImplementationPlan ...... 151 10 Proposed Project SupervisionPlan ...... 159 11 Selected DocumentsAvailable in Project File ...... 161
TABLESIN TEXT 1.1 Armenia: Main Economic and Social Idicators ...... 3 2.1 Developmentof AgriculturalProduction, % Shares ...... 7 2.2 Self-Sufficiencyand Per Capita Food Consumption(1985-1992) ...... 7 4.1 Project Cost Summary ...... 25 4.2 Financing Plan ...... 26 4.3 Summary of Proposed ProcurementArrangements ...... 30 4.4 DisbursementCategories ...... 31 6.1 Summaryof SensitivityAnalysis Cases ...... 43
FIGURES Figure 2.1: CultivatedLand ...... 6 Chart 1: Project Inplementation Unit ...... 34 Chart 2: Armenia Irrigation RehabilitationProject-Implementation Schedule ... 37 Organogram 1: DWSI Structure ...... 88 Box 8.1: Yield ReductionFactors ...... 138 MAPS Project Location IBRD 25388 Irrigation Systems IBRD 25389 Irrigation Systems IBRD 25390 Storage and Pumping Schemes IBRD 25391
i
ARMENIA
IRRIGATIONREHABILITATION PROJECT
Loan and Proiect Summarv
Borrower: Republicof Armenia
ExecutingAgencv: Ministry of Agriculture(MOA)
Beneficiaries: Private farmers and consumersthrough lowered food prices
Amount: US $43.0 mnillion
Ternis: Standard IDA terms, with 35 years' maturity and 10 years' grace period
Project Obiectives: Assist Armenia in maintainingthe level of irrigated agriculturalproduction and improve the country's water resource management.
Description: The project is comprisedof four main investmentcomponents:
(a) Rehabilitationof 12 irrigation schemes and the Ararat Valley groundwater network. These cover an area of about 164,700ha (about 60% of the Armenian irrigated land). There are four types of rehabilitationworks under the project:
(i) Rehabilitationof the conveyance systems, including canals, aqueducts, siphons, and hydraulic structures in eight major irrigation schemes. The area covered under this category is about 151,400 ha (92% of the project area).
(ii) Replacementof pumps and pressure pipelines. This category includesfour pumping schemes.
(iii) Rehabilitationor replacementof about 650 tubewell pumps.
(iv) Rehabilitationof four dam storage schemes (reservoirs).
(b) Establishmentof pilot projects for improvedwater distribution and establishment of water users' associations.
(c) Financing incrementalO&M costs of the irrigation infrastructureuntil effective water users' associationsare in place, and in the meantime to prevent further deteriorationof the irrigation infrastructure.
(d) Technicalassistance, includingestablishment of a project implementationunit; assistance to update the Water Master Plan; training; preparation of the next irrigation project; and assistance to improve irrigated crop production. ii Benefits: The proposed irrigation rehabilitationinvestment project would avert a collapse of the irrigation infrastructure in Armenia. A secure water supply would promote agriculturalproduction, increasethe food supply,and create employmentin the rural areas. Without the project, Armenia would need to substantially increase its food imports, or decreaseits food consumption.Under the project, constructionwork will generateemployment opportunities for unemployedskilled and unskilledlabor. The project would also establish the foundation for improved and rationalized water managementby institutingwater users' associationsand water charges.
Risks: The principal project risk is political. If there is a resumptionof hostilities between Armenia and any of its neighbors, a reimposition of a blockade would have an adverse impact on the project implementationbecause of expected difficulties in importingfuel, spare parts, constructionmachinery, steel pipes and reinforcedsteel, without which large diameter pipes cannot be laid and precast concrete sections cannot be manufactured.In addition, resourcesneeded for operationand maintenance of the irrigation infrastructurewould be drained and the physical structures would be put in jeopardy as well. The Bank approval of the proposed project is therefore based on the assumptionthat the current frameworkfor negotiatingthe international conflict in which Armenia is involved will lead to a peaceful resolution of the conflict, and that the threat of increasedhostilities is no longer imminent. A second risk is that Government would not be strong enough to resist pressures to resume policies of water subsidizationand/or fail to impose and collect water charges. Without sufficientfunds to operate and maintain the new irrigation infrastructure, the system will deteriorate again. To safeguard against such risk the project is contributing to improvementsin water managementby establishingpilot projects with water users' associationsand technicalassistance to aid in the establishmentand managementof the pilot projects. A third risk is that the quality of construction would not meet accepted standards. A properly staffed and trained project implementationunit is plannedto reduce that risk. A fourth risk relates to utilization of energy for irrigation. Power is at present generated mainly from hydro-electric sources and is completely subsidized for irrigation purposes. The risk is that utilization of energy for irrigation is associated with deterioration of the environment. Presently most of the generated energy comes from water originated from Lake Sevan. Over-pumpingof water from the lake has caused the water level to fall which has had an adverse impact on the micro-climaticenvironment around the lake. Imposition of water charges that cover the full cost of operations and maintenanceand energy costs is imperativeto mitigate this risk. iii
Estimated Project Costs:
Item Local Foreign Total % Foreign % Base . . ~~~~~~~~ExchangeCost Millions of US$
1. Rehabilitationof 8 Conveyance 5.54 12.93 18.47 70 40.0 Schemes 2. Rehabilitation of 4 Pumping 0.89 8.57 9.46 91 20.0 Schemes 3. Rehabilitation of Tubewells 0.69 6.25 6.94 90 15.0 4. Rehabilitation of Four Dams 0.56 0.75 1.31 57 3.0
Subtotal 7.68 28.50 36.18 79 78.0 5. PilotProjects to ImproveWater 0.14 2.33 2.47 194 | 5.0 Management l l __ l
Subtotal 0.14 2.33 2.47 _94 _ J 5.0 6. IncrementalO&M Cost [ 2.30 2.70 5.00 54 11.0
Subtotal [2.30 2.70 5.00 54 11.0 7. TechnicalAssistance | - 1.10 1.10 100 2.0 8. ProjectImplementation Unit 1.21 1.25 1.46 86 3.0 | Subtotal [ .21 2.35 2.56 192 5.0
Base Cost 10.33 35.88 46.21 78 1100.0 [9. PhysicalContingencies 1.61 6.45 8.06 80 17.0 10. Price Contingencies 0.66 2.22 2.88 77 6.0
GrandTotal 12.60 44.55 57.15 78 1230
Financing Plan:
Item Local Foreign Total
Million of US$ 1. IDA 4.65 38.35 43.00 2. IFAD 1.80 6.20 8.00 3. The Government 4.15 4.15 4. EndUsers, Fanners 2.00 2.00 TotalProject Cost [12.60 44.55 [57.15 iv
EstimatedDisbursements (US $ million):
Bank FY: 96 97 98 99
Annual 4.0 11.0 16.0 12.0 Cumulative 4.0 15.0 31.0 43.0
Closing Date: June 30, 1999
EconomicRate of Return: 53%
Povertv Category: N.A.
EnvironmentCategorv: "B"
Map: IBRD 25388 I. BACKGROUND
A. INTRODUCTION
1.1 Armenia, with a population of about 3.7 million, has the smallest territory among the former Soviet republics. About one third of Armenia's populationlives in the capital Yerevan, one third in other urban centers, and about one third in the rural sector.
1.2 Before 1988, Armeniaexperienced relatively robust economicdevelopment, unparalleled among other former Soviet republics, which created a diversified industrialinfrastructure, a flourishing agriculture, and a modem transport network. The breakup of the Soviet Union, however, has left the country with an economicstructure dependenton outside sources for energy, raw materials for industry, and food for its people and livestock.The hostilitieswith neighboringAzerbaijan have greatly aggravated the situation. However, recently there have been several positivedevelopments in Armenia's relations with its neighbors. Of greatest importance is the progress towards peace in the six year old Karabakh conflict. In July 1994, Azerbaijan,Karabakh, and Armenia signedan agreementformalizing the ceasefire and providing for the immediatecommencement of negotiationsfor a comprehensivepeace agreement. This development offers a real prospect of a lifting of the blockade in the near future. In addition, rapidly growing trade with Iran, and increasingstability in Georgia have significantlyeased Armenia's isolation.
B. THE ECONOMY
1.3 Under the former centralizedeconomic system of the Soviet Union, Armeniawas a trade- dependenteconomy and a producer of industrial intermediateand finished goods. Before the country's independencein 1992, it had a negativetrade balance, but this has grown up sharply after 1992:in 1991 the deficit was R 2.4 billion, and in the first half of 1993, it grew to R 116.0 billion (Table 1.1).
1.4 Gross domesticproduct (GDP) has been decliningin the last several years, and in 1992, GDP in constant 1990 prices declined by about 52% and further 15% in 1993. A somewhat more moderatedeclining trend also occurred with the net materialproduct (NMP). The NMP, in constant 1983 prices, has been declining since 1987, with only one year (1989) showing positive growth. In 1992 the decline was almost 46%, and further 14% in 1993.
1.5 The economy is going through a difficult transitionfrom a centrally planned to a market- based system; from a situation in which energy and water were practically free goods, to one in which these resources have become increasinglyexpensive; from a system where decision-makingwas in the hands of only a few top-level officials in Moscow and Yerevan, to an economicenvironment in which central and local decisions have to be made daily on all levels of economic activity, and in which economicefficiency and cost-effectivenesshave becomecrucial elements.In additionto these difficulties, which are common to all Former Soviet Union (FSU) countries, the Armenian economy still has not recovered from the effects of closed borders since 1991. The traumatic effects of the blockade on its industry and employment,and years of rapid inflation that was first "imported" because the monetary system was linked to the ruble zone until the end of 1993, also contributedto the economicdifficulties. When new domesticcurrency was later introduced,it was associatedfirst with rapid inflation-fueled by 2 Chapter 1 uncontrolledmonetary policy', but in the second half of 1994, inflationhas tempereddown significantly and the currency and the exchangerate have been quite stable.
1.6 Despite this difficult economic environment, significant economic reforms have been implementedin Armenia. Apart from bread, which is rationed, prices for virtually all goods have been liberalized.All agriculturalland and a part of the retail sector have been privatized. State enterpriseshave been given more autonomyand responsibilityfor self accounting.There is strong commitmenton the part of the Government to support the private sector and to continue privatization among most large enterprises, but a general lack of resources, as well as other practical problems, are causing delays.
1.7 Beforethe start of hostilities with Azerbaijan,agriculture accounted for only 18% of the NMPand for a similar percentageof the employment.With the land reform of 1991, the breakup of the large agriculturalproduction units, distribution of land to individual farmers, and the shortage of food supplies,many people have begun to engage in farmingeither on a full-timeor part-timebasis. Increasing unemployment(about 30% in 1992)has acceleratedthis development.The percentageof the labor force in agriculture, which was only about 18% in 1990, grew to 23% in 1991 and to 30% in 1992. At the same time, the agriculturesector's contributionto NMP, which was 17% in 1990, grew to 32% in 1991 and to about 45% in 1992.
1.8 Agriculturalexports accounted for roughly 12% of total export earnings in 1990 and 23 % in 1992. This includedmainly fresh and processed fruits and vegetables, brandies, champagnes,and wines. By contrast, Armenia produced only 20% of its cereal requirements, 30% of its dairy requirements,and 35% of its required meat products. Sugar and vegetableoils are all being imported. Because the blockade limits Armenia's trade with the outside world, both agricultural production and trade configurations have been changing drastically. In 1993 the land area under grain production increased by about 200,000 ha over that of 1990, while vegetable, orchard, and vineyard areas have decreasedsignificantly. All agricultural imports and exports have been falling substantiallydue to the loss of foreign markets and difficultiesin sustainingproduction caused by materialand energy shortages. Becauseof growing food shortages,a large proportionof the new smallholdershave turned to subsistence farmringwith emphasis on grain and vegetables. This trend is likely to continue.
I Armenia's currency until recentlywas the Russian ruble, and the country was in fact in the ruble zone. As inflationin Russia accelerted in 1992 and 1993, so was the inflationin Armenia. In the fall of 1993 Russia replaced the old ruble with a new ruble and Armenia issued its own currency, the drum. However, the drum depreciatedrapidly, and if the exchangerate is a proxy to domesticinflation, then domesticallyinflation grew faster than 2,000% betweenNovember 1993 and April 1994. However, since May the drum have been relativelystable. Background 3
Table 1.1 Armenia: Main Economic and Social Indicators
Socialand demographkIndicators (1993) Area 29,800 km2 Population 3.742 million Urban 2.533 million (67.7%) Rural 1.209 million (32.3%) PopulationDensity 125.6 per km2 Life Expectancyat birth 72 years in 1993 Infant mortalityrate 17.5 per thousandin 1993 Gross domestic product (GDP) (1993) 779,619 million rubles GDP per capita' 208,343 rubles
1988 1989 1990 1991 192 1993
Annual changes of real output in % Gross DomesticProduct -0.7 12.4 -7.4 -10.8 -52.6 -14.8 Net material product (NMP) -2.6 14.2 -8.5 -11.8 -46.0 -9.3 Industry -1.6 2.3 0.5 -8.5 -52.5 -14.0 Agriculture 43.1 -27.7 -13.2 7.7 -8.4 -10.8 Composition of NMP In % Industry 54.6 50.2 45.4 45.9 46.3 30.5 Agriculture 18.5 14.4 17.4 27.9 39.9 56.6 Construction 10.8 21.2 25.4 15.3 5.3 4.5 Transport and Communication 4.1 3.5 4.1 2.7 1.6 0.7 Other sectors 12.0 10.7 7.7 8.2 6.9 7.7 Average prke change (1993) Wholesaleprice increase 3.2 12.7 4.8 219.7 -- Retail price increase 3.0 4.0 12.0 304 1341.3 Average monthlywage (real change) 3.2 12.7 4.8 47.9 -70.7 -53.3 ConsumerPrice Index (real change) 10.3 100 824.5 3731.9 Interrepublican and foreign trade (in billionsof rubles at domesticprices) Exports 3.8 3.7 3.5 4.9 62.0 190.2 Imports 4.9 4.9 4.7 7.3 75.1 306.2 Trade balance -1.1 -1.2 -1.1 -2.4 -13.1 -116.0 Trade balance in % of GDP -13.7 -12.6 -11.4 -16.0 -22.2 -14.9 Central Governmentbudget Revenue 4.9 4.1 4.3 15.5 183.46 Expenditures 4.7 3.5 5.7 37.6 621.14 Overall balance 0.2 0.7 -1.4 -22.1 -437.68 In percent of GDP 2.1 7.2 0.6 -37.4 -56.1 Money and credit (end of period) Total deposits 4.6 7.3 8.2 15.4 27.0 649.3 Total domesticcredit 3.8 3.5 4.7 10.7 39.3 327.4 Net credit to the Government -1.0 -1.0 -0.6 0.1 12.5 251.9
'The officialBank's estimateis US $660 per annum in 1993. Source:Armenia-Country EconomicMemorandum, March 24, 1993, together with updated figures of October 1994.
II. THE AGRICULTURESECTOR
A. BACKGROUND
2.1 Topography greatly influences agriculture in Armenia. (For details regarding the agriculture sector, see Annex 2) Although mountainpeaks soar to 4,090 m above sea level (asl), land is cultivatedbetween the altitudes of 600 m and 2,500 m. Only about 2% of the land, however, is locatedbelow 1,500 m elevation. Generally,the landformin the center and north comprisesrocky, high mountainranges separatingnarrow, fertile valleys. Towards the south, the broad, flat, and fertile Ararat Valley opens out along the left bank of the Araks River to form the border with Turkey. West and north of the centrally located Aragat Mountain, and to the east around Sevan Lake, the landform is generally rolling, but with many rocky outcrops. In the southeast, a few small, irregularly-shapedvalleys are fringed by high mountain ranges on both the borders with Azerbaijan.
2.2 Climatic conditionsalso greatly affect agriculturein Armenia, dependingon the altitude. Monthlyprecipitation is highest from April to June and lowest from July to September.The crop water deficit between May and August ranges from 200 mm to 700 mm. Soil moisture alone is not enough to compensatefor this deficit; hence, irrigation is necessary for crop growth.
Agriculture in the Economy
2.3 Before the breakup of the Soviet Union, the agriculture sector in Armenia accountedfor about 18% of the NMP and a similar proportion of employment. The economy, by and large, was intertwined with the Soviet economy, which made Armenia highly dependent on outside sources for energy and raw materials for its industries, and on grain for its people and livestock. After Armenia's independencein 1992, agriculture's share in NMP increasedgradually to about 46% in 1993, and the sector employedabout 30% of the labor force also in 1993because of the adverse effects of the blockade on Armenian industriesand services. Two reasons account for the growth of the agriculture sector: (a) it provided critical food supplies for the populationat a time when imports had been curtailed because of the blockade; and (b) the country implementeda land reform program in 1991, under which large agriculturalproduction units were quickly broken up, and land distributed to small individualfarmers. As a result, there was fresh incentive to engage in agricultural production, despite the difficulties transformingthe economy into a market system.
Labor Force
2.4 Total employmentin agriculture was estimated at 285,000 in 1990. With privatizationin 1991, the number of people employedin agriculture rose sharply. Nearly 232,000 people were recorded as living on newly establishedfamily farms, while those remainingon the other types of farms apparently fell by only 173,000. Thus, the official statistics suggest an increase in total agriculturalemployment of nearly 60,000 or 21 %. 6 Wpter 2
B. AGRICULTURAL PRODUCTION
2.5 Of Armenia's overall territory, about 47%, or 1.4 million ha, are cultivableor CULTIVATEDLAND are used as pasture for livestock. The rest is 000 HA rocky wasteland, mountains, forest, and heathlands, suitable only for rough grazing during the few summer months. Figure 2.1 shows the distribution of cultivable land at the PerniAul CoPs end of 1992. Home 67 2.6 Historically, agriculture in Armeniahas had strong dependenceon irrigation; nearly 80% of total crop production is H Grzn produced with irrigation. Approximately 137 286,000 ha are at present irrigable throughoutthe growing season. PermanentPastures 666 2.7 The irrigated land is 80% surface irrigated and 20% pipe irrigated. Irrigation F%ure2.1 intensities range around 100%, but under- irrigation is practiced in most irrigation schemes because the rainfall is concentratedover a short period and because the irrigation system shows serious signs of deterioration(for example, cracks in storage tanks and dams, and collapsedcanals) and because of inadequatemanagement (pars. 3.13, 3.17, 3.21, 3.28, and 3.30), which has led to increasedsalinity in sizable areas. Water resources are plentiful-distribution is the problem-and would allow further expansionof irrigated agriculture.
2.8 Productionefficiency and output levels are below those reached in developedcountries. Agricultural output in Armenia began to decline in the second half of the 1980s when econonmc difficultiesin the SovietUnion were increasing.But compoundingthe economicdifficulties of the Soviet Union due to eruption of the conflict with Azerbaijanagricultural production fell by 28% between 1988 and 1990, more than anywhereelse in the FSU. Production started to recover, however, in 1991 with implementationof the Land Reform, and continued to rise through 1993, when production was 13% below that of the 1988 level. In fact, the 1993 crop output surpassed the 1988 levels.
2.9 Crops in Armenia accountedfor 45% of total agriculturalproduction in the 1980s. Crop yields are generally low and, even accountingfor harsh environmentalconditions, the actual yields of most crops are believed to be barely 50 - 60% of their potential. The country's cropping structure has undergone a dramatic shift over the last three years (1991-93). The proportion of annual food crops increasedsubstantially at the expenseof forage crops, perennial crops, and industrialcrops. Insufficient irrigation water is one of the main reasons for this situation.
2.10 Livestockaccounted for 55 % of total agriculturalproduction in the 1980s.This proportion has decreasedsubstantially in recentyears due to the significantcontraction of the livestocksector caused by the need to import feed for pigs and poultry. In 1993, 73.59%of gross agricultural production originated from the crop sector (Table 2.1). It is likely that this proportion will decrease somewhat The AgriculturalSector 7 further in the coming years. The livestock subsectoris in a deep and unprecedentedcrisis. IEbIe2.1: Development of Agricultural Production, After peaking in 1987/88,livestock production % Shares started to decline due to the combined impact Livestock Crop share % Ag. of reduced livestock populations and lower share of Ag. of Ag. Output in production intensity. Compared with 1987/88, Output Output total NMP total 1992 output of meat dropped by 38%, 1988 48.2 51.8 18.5 milk by 31%, eggs by 60%, and wool by almost 40%. Particularly hard hit was poultry 1989 55.8 44.2 14.4 meat production, down by almost two-thirds 1990 54.8 45.2 17.2 from 1991. Total 1993 meat production fell by another 30% from 1992, eggs by 40%, and 1991 46.3 53.7 32.2 wool by 10%, while milk production remained 1992 33.2 66.8 45.6 at the 1992 levels according to Ministry of Agriculture estimates. Livestock output 1993 26.5 73.5 NA to 1993. Soursc:IBRD Statistical Handbook 1993, State of the FSU, declined by 45% from 1998 and AnnenianMinistry of Agriculture. 2.11 Livestock performance in the late 1980s was only about 35% to 40% of Western standardsfor milk and meat production. At that time, averagefertility rates were 67% of those in the West. The rates have deteriorated further in the past two years. Particularly alarming are decreasing slaughter weights, unacceptably high mortality rates, long fattening periods, and feed conversionratios two to three times lower than in the West for broiler and pig production.
C. CONSUMPTION AND SELF-SUFFICIENCY IN AGRICULTURAL PRODUCTS
2.12 Armenia is far from self-sufficient in TABLE 2.2: Self-Sufficiency and Per Capita Food Consumption food production, since it (1985-1992) produces less than 30% of Self Sufficiency Consumption the flour for bread, and only % (kg per capita) % three quarters of the livestockproducts consumed Prducts 1985 1992 18 9n in the country. Almost half of food output by volume Bread products 27.1 28.5 134.0 130.0 -3.0 consists of fruits and Potatoes 141.8 115.4 65.0 76.0 16.9 vegetables, in which Armenia is self-sufficient Sugar 13.9 0.0 28.7 9.7 -66.2 and able to export in fresh VegetableOil 83.3 75.0 2.4 1.6 -33.3 and processed forms. Since per capita consumptionof all Meat and Meat 65.1 76.0 49.0 20.0 -59.2 products except potatoes fell products between 1985 and 1992 Milk and Milk Products 38.0 84.1 433.0 122.0 -71.8 (Table 2.2), food import needsThave dr2fopd asmwell. EWs (pieces) 116.9 103.1 148.0 65.0 -56.1 needs have dropped as well. Armenia now meets a larger Fruits(including 232.6 292.1 47.0 44.0 -6.4 Grapes) Soirce: Ministry of Agnculture. 8 Chapter 2 share of its food consumptionthrough domestic resources because demand for livestock products has dropped by 60% to 70%. Dependenceon imported flour has not been substantiallyreduced.
2.13 Through 1993, cereal production amountedto about 300,000 ton per year, and imports amountedto about 450,000 to 500,000 tons per year. Before the decline in livestockproduction in the last two years, Armenia required an additional 400,000 to 500,000 tons per year of cereals for animal feed purposes. Because of the blockadeover the last two years this requirement has not been met, and is, among other factors, the most important reason for the decline of livestock production. The net shortage of cereals for human consumptionin the coming years might decreaseslightly. If the price of bread, which presently is the only commoditythat is subsidized,is liberalized,then cereals consumption would fall. An increase of 50% in bread prices would cause a reductionof about 10% in the estimated consumptionof cereals. Potatoes are another importantstaple of the Armenian population. Demand and supply are approximately balanced at 250,000 tons per year or 60 kg per person. Until the 1988 earthquake approximately20,000 tons of sugar per year were being produced domestically, and the balance of about 100,000 tons was imported. After the 1988 earthquake the sole sugar factory was dismantledand sold to Georgia. With the difficultyof importbecause of the blockade,sugar consumption has fallen by two-thirds.
2.14 Until 1991 local productionof milk and dairy products usually met less than half of the country's needs. For meat, domesticproduction met almost two-thirdsof consumption.The reductionof commercialimports since the start of the blockadein 1991 and the large reduction in consumer incomes have pushed up consumer prices and reduced effective demand for livestock products to much lower levels comparedto the end of the 1980s. Both meat and egg production have dropped by over 60% and with low imports (or none in the case of eggs), consumptionhas fallen by more than 50%. Imports of dry milk powder have continued, but at such a low level that consumptionof milk products has fallen by over 70%. For all these products, the combinationof high incomeelasticity and halving of real income over the past three years has accountedfor over half of the fall in demand.
2.15 In adjusting to higher prices and reduced incomes, the population has shifted its consumptionto more potatoes and has maintainedbread and fruit consumptionclose to the levels of the mid-1980s. This has been facilitated by stable or increasing outputs of potatoes and fruits, as well as increasedgrain production and Governmentpriority given to negotiatingand organizingthe delivery of food aid, includinggrain shipments. Thus, the populationhas been able to maintain a minimum level of nutrition and caloric intake. m. WATER RESOURCES AND THE IRRIGATION SUBSECTOR
A. WATER RESOURCES
The Main Sources
3.1 Armenia has limited rainfall, surface water, and groundwater. Average rainfall is about 620 mm per year, but varies considerablywith altitude. The total estimatedvolume of annual precipitation 3 is about 18.4 billion m .'
SurfaceWater
3.2 Surfacewater is availablein 18 principal river basins. Most of the runoff, close to 60%, flows to the four largest rivers (Araks, Debed, Kasakh/Sevdjur,and Akhurian), and an additional 25% to the other three major rivers (Razdan, Arpa, and Vorotan).Water from the Araks River is shared with Turkey.
3.3 The total runoff is about 8.7 billion in3 per year. Of this amount, 1.3 billion m3 per year is useable by neighboring countries. Of the remaining 7.4 billion m3 per year, about 13 percent, or 980 million m3, is stored in 74 irrigation dams (about 1.1 billion m3 live storage). This stored water, togetherwith 1.4 billion m3 diverted by run-of-riverand pumpschemes, comprisesthe present 2.4 billion m3total averagevolume availablefor irrigation from surface water resources.
Groundwater
3.4 Annualreplenishment of groundwateris estimatedat about 4.2 billion m3 , of which about 1.4 billion m3 reappear in springs within the country. The rest, 2.8 billion m3, comprise three main categories:
(a) Groundwaterresources pumped by 2,105 irrigation and drainage wells, most of which are in the Ararat Valley.
(b) Numerous industrial and municipal wells in various parts of the country.
(c) Springs and aquifers reappearingoutside Armenia's borders. At least 500 million m3 (18 percent) of the 2.8 billion m3 are still available,and could be used almostwithout causing reduction of spring or river flows.
Annual water resources includethe following:rainfall, 18.4 billionm 3; runoff through rivers, 7.4 billionm 3; groundwater,0.5 billion m3. Water resources are not entirely mutuallyexclusive. Both rivers and groundwaterresources originate from precipitationand, in years when precipitationsare low, the stock of groundwater falls as well. 10 Chapter 3
Water Use
3.5 Annual use of water amounts to about 4.0 billion m3 . Irrigation is the largest user with 2.5 billion in3, followedby public water supply(including irrigation of gardens) with about 750 million m3 and industrialwater supplywith 310 million m3. Substantialamounts of the utilized water is lost along the conveyanceand distributionsystems; therefore, the total annual consumptionis far below 50% of the availablewater resources. Potentially,with large conservationefforts along the existing systemsand the developmentof new, unutilized water resources, at least 100,000 more land could be irrigated than at present.
Dminage
3.6 Serious drainageproblems exist in the low lying, light, and mediumtextured soils of the Ararat Valley. The high groundwatertable in these areas, some of it under artesian pressure, is causing varying degrees of soil salinity. The area affected is about 100,000 ha. Approximatelyhalf of that area has already been drained by tile and plastic pipes. Open drains have been excavated, natural drainage ways deepened,and vertical pump drainagesystems installed. 2 However, the operationof some drainage wells is essential to avoid resalinizationof some of the reclaimed land. Of the remaining 43,000 ha requiring treatment of some sort, 23,000 ha are classified as slightly saline, 11,000 ha moderately to strongly saline, and some 9,000 ha are consideredseverely alkaline.
Water Quality
3.7 There is a range of water quality in the country. From unpollutedsprings and snowmelt in the high elevations,to untreated or partially treated sewage in the RazdanRiver, to saline groundwater in the Ararat Valley. The quality is deteriorating;power shortagesand lack of funds make it difficult to operate and maintain existing water and sewage treatment plants near cities, and to operate pumped drainagesystems in agriculturalareas.
3.8 Water in storage reservoirs is often pollutedby untreatedsewage and return flows from septic tanks from villages in the watershed. Groundwaterquality, except for some parts of the Ararat Valley, is generally good. The Razdan River carries flows from Lake Sevan and serves as recipient for treated and untreated sewage from Yerevan and other cities along its course. Although the river water is used for irrigation in the Ararat Valley, there have been no reports of outbreak of waterborne diseases due to water pollution, and there have been no reports of any ill effects on the quality of crops in the Ararat Valley.
3.9 Two Government ministries test the quality of water in Armenia.3 The Ministry of Environmentoperates five laboratories that test the quality of drinking water and nine laboratories test the qualityof treated sewage.The Ministryalso supervisesthe operationof industrialquality laboratories,
2 Some of the pumpeddrainage is returned to the canal systemsand reused for irrigadon.
3 Water quality is tested according to four categories:(a) taste, color, etc.; (b) chemicalcontent; (c) microbiological constituents;and (d) degree of radioactivity. WaterResources and the IrrigationSubsector 11 whichtest plant effluent.The Ministry of Agricultureoperates several laboratoriesfor testingthe quality of irrigation water.
B. IRRIGATION
The ConveyanceSystem
3.10 Water is suppliedto most of the irrigationschemes in Armeniaby eight major conveyance irrigationsystems. All main canals and most of the secondarycanals were originallylined using different types of lining.4 Most of the canal networkis in unsatisfactorycondition. Due to landslides, erosion, and encroachingvegetation, unlined canals have lost their cross-sections.The conditionof lined canals is not much better; in many cases long stretches of lining have deteriorated and, in some places, have completelydisappeared.
3.11 In a number of locations, the reinforcedconcrete in large aqueducts (20-30 m3 per sec) has deteriorated, and water is leakingthrough the walls and floors of the structures and through cracks and joints. In some locations, the collapse of the aqueduct appears imminent, putting the entire canal system in jeopardy.
3.12 The deteriorationof the conveyancesystem may be attributedto a combinationof causes: inadequatedesign, lack of quality control during construction,bad and insufficientconstruction material, lack of maintenance, normal aging, adverse climatic conditions, and possibly corrosive water. It is estimated that more than half the water is lost between source and farm gates.
PumpingStations and Pressure Pipes
3.13 About half of the irrigated area (130,000 ha) requires some kind of pump lifts. In sprinkler-irrigatedareas, the pumpsdraw water from gravity conduits and provide the requiredpressure. Other areas require pump lifts from the water source to the head of a gravity distributionnetwork from where the water is conveyed to the commandareas, or to second pumping stations to lift it to another distributionnetwork higher up.
3.14 Altogether some 360 pumping stations, with approximately 900 pumps, provide the energy input for irrigation. The installedcapacity of the electricmotors is approximately440 megawatts. Capacities of the pumping stations range from 100 liters per second to 16 m3/sec. The annual power consumptionof the irrigation sector is reaching about 500-600 million kwh, a drastic cut from the more than 1.1 billion kwh that was consumed before 1992.
3.15 The conditionof most of the major pumping stations is unsatisfactory.Neglect is evident everywhere.Rehabilitation and replacementof pumpingequipment is requiredto save energy and increase the reliabilityof the equipment. However, despite the dilapidatedcondition of the stations, they seem to be operating as well as can be expected, and the rehabilitation of the pumping equipment could be
4 Cast-in-sitereinforced concrete, precast sections, concrete, and paving with concrete slabs and stones. 12 Chapter3 postponedto a later stage.
3.16 Some of the pressure pipelines that convey water from the pumping stations to the distribution systems are at the end of their useful life. Others are in critical condition because of corrosion. Approximately54,000 ha would be affected if the pipelines fail. Design standards used for laying and maintainingsteel pipes are unsatisfactory.Black steel pipes are laid on concretesupports above ground without any internal or external protection against corrosion.
3.17 A large portion of the pumping schemes, however, lift the water far above 100-150 m, which is an economicthreshold limit that justifies production of typical crops grown in Armenia. Each lift of 1 m3 to 100 m consumesabout 0.5 kwh. With an average gross water requirementof 12,000 in3 per ha, a 100 m lift causes power consumptionto reach between about 5,000 and 6,000 kwh per ha. Lifting water beyondthe thresholdof about 100 m is consideredan insurmountableeconomic burden on the farm budget. Consequently,many pumpingschemes are uneconomical,and if they cannot be replaced by the gravity system, they should gradually be phased out of the irrigated commnands.
Tubewells
3.18 About 1,900 wells supply 700-800 million m3 of groundwater annually for drinking, industrialuse, and irrigation in the Ararat Plain.5 About half the wells are irrigation wells. All water from these wells is lifted by submersiblepumps.
3.19 An inventorycompiled by the Departmentof Water Supplyand Irrigation(DWSI) in 1992 found the condition of the mechanical and electrical equipment in many of the wells unsatisfactory. Approximately,two-thirds of the pump sets were not operating.New statisticsfor 1993 confirm that their conditionhas further deteriorated.
3.20 The submersible pumps used in these wells are Russian made. Their life expectancy, under normal working and maintenanceconditions, is said to be four years. This is about half the average Western standard. The actual situation observed in the field seems to be even worse. Pump sets are installed without any protectivedevices against power surges. As a result, motors burn out, sometimes after only a few months' service. Even with a normal supply of electricity, pumpsseldom last four years; two to three years seems to be the norm. Electrical installationsat the well head are also substandard. Cablesfrom transformersto the electric motors are unprotected,which causesfrequent short circuitsand damagesthe motors.
3.21 The accelerateddeterioration of pump sets is also caused by cavitationon the impellers and corrosion of metal parts. The space between the casing of the well and the well bore is left open, exposingthe gravel pack around the "screen" to the intrusion of dirt and mud. Design specificationsfor installing wells, drawn up by the Water Planning Institute6, are sound. The problem seems to be in the construction of the well, the equipment and materials used, the shoddy workmanship, and lack of adequatemaintenance. Screens are made locally of steel pipe. Holes are drilled into the pipe instead of
5 Approximately860 wells are artesian; the balance requires pumping.
6 Under the Ministryof Agriculture. WaterResources and the IrrigationSubsector 13 using slottedstainless steel or fiberglassscreens. The screensare not made of corrosion-resistantmaterial, and they are installed without protective devices as is normally required in other countries.
3.22 Because of a lack of control and metering equipment at the well head, the operating efficiency of the tubewells cannot be measured, and monitoring the performance of equipment is impossible.
Storage Reservoirs and Dams
3.23 Water for irrigationcomes from rivers and lakes and in the Ararat Plain, as well as from groundwater. Surface runoff is stored in 24 major reservoirs, which supply water to approximately 92,000 ha. These reservoirs have a storage capacityof 932 million mn3 and a live storage of 840 mnillion ni3. There are five more reservoirs storing 145 million n3 water for municipal and industrial use. An additional 54 smaller reservoirs have a total storage capacity of approximately300 million mn3 . Of the total 83 reservoirs,74 are under the administrationof the Ministryof Agricultureand have a total storage capacity of 977 million m3 . The largest existing reservoir has 525 million m3 capacity (Akhurian). It provides water for about 30,000 ha in Armenia, and is shared with Turkey.
3.24 Fifteen of the irrigation dams are considered in need of major repairs, and some even require urgent attention to avoid dam failures if operatedat full capacity. The causes of their precarious condition includedesign errors, constructionfaults, and lack of maintenance.
On-FarmIrrigation Systems and Efficiencies
3.25 The division of collective and state farms under the 1991 land reform (para. 2.3), into some 300,000 small holdings,each with a number of farm plots, has created a serious water distribution problem. Part of the land servedby the closed (pressure)systems is farmed communally,in a similar way as before the land reform. However, many of the pressure systems were abandonedbecause they were not able to serve the thousandsof new small plots due to the lack of an effectivedistribution system. In many of the gravity systems, water distribution is chaotic as well. Up to now, no formal network of authority to implementon-farm infrastructurehas been developed,which has resulted in the inefficient, randomly-placedinstallation of earthen delivery ditches.
3.26 The main difficulty is that the irrigation delivery systemswere designed to service large farms whichmay have irrigated 50 to 400 ha from a single headgateor canal outlet. Presently, the same outlet may service 400 or more farmers, which in many cases, makes it difficult to deliver necessary irrigation water to farmers who are not in close proximity to the canal outlet. In some instances, earth ditches must be installed across one or more adjacent farm plots. Some adjacent farmers will not allow ditch easementsthrough their plots because of seepage and/or the loss of land. The result of these kinds of conflictsis that many farms receive insufficientirrigation water during the irrigation season. Further consequencesare that some farmers located even a minimal distance from the existingoutlets have no way of directly receivingwater; no dependablescheduling technique is used to benefit all farms. In some areas, water distribution is erratic, and many irrigators have broken concrete canals and pipes at points closer than the originally installedoutlets in order to have better access to irrigation water. When they are not irrigating, they close the holes in the canal or pipe with soil or sod, which leaks. As the number 14 Chapter 3 of these of-takes in a canal system increases, the delivery efficiencydecreases.
3.27 The most problematicareas of the irrigation systems are those that depend on electric pumps to lift water to gravity systems which irrigate 42% of the total fanned land in Armenia. Unpredictableblackouts and low voltage from the shortage of electricity have paralyzed much of the pumping capacity, leaving farmers in limbo or entirely without water. This past irrigation season, the Ministry of Energy, due to lack of resources, was able to supply only 46% of the electricity needed to meet the pumping requirementsfor crop production. This predicamentleft many farmers with minimal water, and farmers at the end of most pump systems had no water at all.
3.28 Despite the nominal establishmentof water users' associations (WUAs), there is little evidence in the field that such organizationsactually function. In reality, water users are organizedby villages,with outletboundaries corresponding to village boundaries. Last year, during the first irrigation season after privatization, the Operation and Maintenance Enterprise (OME) of the Ministry of Agriculturemade agreements with each individual farm unit specifying the amount of water the unit would receive and the water fees for the season. The OME was overwhelmedby approximately260,000 agreements, and the Government was disappointedby a collection rate of a mere 27% of the water charges in 1992.Therefore, the Governmentinstructed OME to make agreementsthis year with village councils for delivery and charges. Although the Government expected the village councils to execute agreementswith individualfarmers and collect the water charges, this has only partially been realized.
C. OBJECTIVES AND STRATEGY OF BANK ASSISTANCE
3.29 Agriculturehas been recognizedby the Governmentas one of the critical sectors in need of assistancefor two reasons: (a) the sector employs about a third of the labor force (para 2.3), and (b) the sector provides food which, in the context of the country's trade configuration,is difficultto obtain tirough imports in the short to medium term. Because the agriculture sector is heavily dependenton irrigation, and because the dilapidated condition of the irrigation infrastructure constrains both developmentof the sector and profitabilityof existing production, the Bank and the Government have agreed that rehabilitationof the irrigation infrastructureis the first priority in assistance to the sector. Bank assistance would be confined to areas that would have the greatest impact on efficiency in agriculturalproduction. Areas that have been identified are those that are irrigated by gravity or that require minimalpumping, and that under certain croppingpatterns can provide for profitableproduction at the given border prices.
D. LESSONSFROM PREVIOUS BANK INVOLVEMENT
3.30 Investmentsin water resources have played a major role in the Bank's efforts to help countries to reduce poverty and to upgrade living conditions7. Irrigation systems have expanded food production, improved nutrition and increasedrural incomes. Bank assistancehas evolved from simple project lendingtoward country focusedsupport for elaboratingand implementingsubsectoral strategies. These strategies are developed through sector work and subsectoral reviews in which priorities are
7 See Water Resource Management:A Policy Paper, InternationalBank for Reconstructionand Development,R93- 14/1, may 3, 1993. WaterResources and the IrrigationSubsector 15 articulatedand performance is analyzed.The proposed Irrigation RehabilitationProject incorporatesthe Bankexperience in irrigationprojects. Hence, specialattention was paid in the project design and concept to restructuringof the operationand maintenanceof the irrigation system; quality of construction; cost recovery; adequacyof the water management;the need to complete the country's water master plan that will incorporateintersectoral impact of water developmentinvestments; and environmentalissues.
3.31 Two projects have been approved so far for Armenia: an institution-buildingproject (Loan 3585-AM), approvedin March 1993, and an earthquakereconstruction project (Loan 2562-AM), approved in January 1994. The institution-buildingproject has been slow to take off mainly because the Armenians lack experience in implementing Bank-financedprojects. However, recently the pace of implementationhas improved due to more intensive supervisionand guidance on the part of the Bank. The earthquake reconstructionproject just recently became effective, and small amounts have already been disbursed. An implementationunit was establishedfor that loan about six months before Board approval. The experience gained in establishing the implementationunit is important for future Bank projects, especiallyin regard to administration,accounting, and procedures. The significantsuccess of the implementationunit was demonstratedin the adjustment of local staff to the procedures of IDA financedproject requirementsand in the confidencethey gained in implementinga Bank-financedproject. The implementationunit was initially administeredand guided by an expatriate, but local staff are now managingall functionsof the unit successfully,including procurement and disbursements.Of particular interest is the experiencegained by the unit in preparing bids and the enormous interest shown by local state enterprises in bidding for works and supply of goods under the earthquakereconstruction project.
IV. THE PROJECT
A. PROJECT OBJECTIVES
4.1 The main objectives of this project are to assist Armenia in maintaining its level of irrigated agriculture production and to improve the country's water resource management.
B. RATIONALE FOR IDA INVOLVEMIENT
4.2 The Governmentconsiders the proposed project to be a priority investmentin agriculture (para 3.29). It supports the developmentobjectives of agriculture in Armenia identified in the Bank's AgricultureSector Report (June 1994). The key elements in this regard are to: (a) expedite completion of the transition to a market-basedsystem, includingprivatization of food production, processing, and marketing; (b) change the role of Governmenttowards the provision of research, education, extension, and market information; (c) improve the efficiency of production, processing, and distribution of food and agrieulture products; and (d) improve the competitivenessof Armenian agricultural products in internationalmarkets. Following the priorities identified in the Bank's AgricultureSector Report (June 1994), the sector review proposed an assistancestrategy that includes(a) provisionof critical inputs for agriculture production; (b) support to the Ministry of Agricultureto implement a consistent transition program in food and agriculture; (c) development of institutions and support facilities needed for a market-basedprivatized agriculture; and (d) capital investmentsfor the development of competitive production,processing and marketing,and related infrastructure(especially the irrigationsystem). Hence, investments proposed under the project are intended to enable agriculture to maintain and increase productioncapacity which has been erodedbecause of severe deteriorationof the irrigation infrastructure. The project would also support increasingthe role of irrigation beneficiariesin determiningtheir water needs and their financing of the operation and maintenanceof the irrigation infrastructure. Under the proposed project, the beneficiarieswould graduallytake over water distributionand maintenanceof the conveyance networks. The Bank strategy also emphasizes the rehabilitation and protection of the environment, which has been severely damaged by the deteriorationof the water conveyancesystems. The environmentis now threatened by a possible collapse of several irrigation dams (psra. 3.28).
C. THE PROPOSED PROJECT
4.3 The project consistsof four main components:(a) rehabilitationof 12 irrigationschemes and the Ararat Valley groundwaternetwork; (b) establishmentof pilot projects for water distributionand new WUAs; (c) financing incremental operations & maintenance (O&M) costs of the irrigation infrastructure;and (d) technicalassistance, includingthe establishmentof a project implementationunit, assistanceto update the Water Master Plan, training, and assistanceto improve irrigated crop production. The investmentsrelated to the rehabilitationprogram make up about 78% of the project's estimatedbase costs; contributionto O&M about 11 %; the water management,including pilot projects, about 5 %; and technicalassistance, includingthe PIU, about 5%.'
I Other and rounding amount to 1%. 18 Chapter4
D. THE RATIONALEFOR PROJECTDESIGN
General
4.4 The project covers an area of about 164,700 ha (about 60% of the Armenian irrigated land), located mainly in the Ararat Valley, in the western part of the country. About 15% of the project areas are also in the northwest part of the country (Map 25388). With the exception of some of the northeast areas, where some of the irrigated lands are at elevation of +1800 m as], the rest of the irrigated land is at elevation ranging from 800 to 1000 m asl.
4.5 The selection of the project areas in the Ararat Valley was an obvious choice. It is the breadbasketof Armenia and the most fertile and productive agriculturalarea in the country. However, the arid Ararat Valley cannot producecrops withoutirrigation, and the irrigationsystem is now in decay. The Ararat Valley is also in close proximity to the capital Yerevan, where about one third of the country's population lives, dependent on the Valley for most of their food supply. Most of the other irrigatedagriculture areas of the country are at higher elevations,and do not fit into the selection criteria for the project (para. 4.6).
CriteriaUsed in Selectionof Project Components
4.6 The selection of the project's componentsis based on the followingcriteria:
(a) Energy Savings. Schemes have been chosen on the basis of acceptable cost-benefit utilization of energy for pumping water. Investments that would replace pumping economicallyby gravity irrigation were given highest priority.
(b) Water Savings.Those schemes where rehabilitationwould reduce water losses are given high priority, provided the value of the lost water is larger than the investmentsto repair them. Basedon this criterion, substantialcost savings could be realized by rehabilitating leaking canal sections and replacing large diameter pressure pipes that have reached the end of their useful life. At present, water losses in conveyancefrom the source of water to the farmer's field reduce the areas which can be irrigated. Leakingcanal sectionscan damage fields, houses, and infrastructuresadjacent to the structures. The rehabilitation works are located on reaches of canals where the banks and the lining are destroyed, or where there is imminentdanger that old and rusted pressure pipes will burst.
(c) Irrigation at the Critical Growing Period. Rehabilitationof schemes which provide supplementaryirrigation is a priority because water late in the growing season is critical for plants and production. Rehabilitationof schemes that provide supplementarywater is economicalprovided the investmentcost is less than the value of reduced yields caused by insufficientirrigated water. Such cases includethe supply of supplementarywater to three of the Ararat conveyance schemes (Lower Razdan, Octemberian, and Artashat) throughpumping from the SevdjurRiver (Arevshatand Mkchian),and using return flows through pumping from the drainage collectors, as well as restoring supplementary irrigationfrom local boreholes. The use of water stored in reservoirs that fully dominate the nearby commandareas is also essentialfor supplementaryirrigation. T7heProject 19
(d) Assistanceto the EarthguakeReconstruction Zone. Rehabilitationworks of the irrigation infrastructure in the earthquakezone around Spitak (Getik scheme) is a priority, given the vast destruction of the irrigation facilities in 1988.
(e) Danger to Life and Property Downstreamof Storage Dams. Rehabilitationof storage dams is a priority if they are in a significant stage of deterioration and constitute substantialdanger to life and property; and if they are being used for economicpurposes. Followingthe above-mentionedcriteria, the proposedproject would financerehabilitation of four of the most seriouslyaffected storage dams. Studies would be carried out under the proposed project to identifyand appraise additionaldams that constitute significant risk to life and property for inclusion in future Bank-financedprojects. The recent breakup of the Artic dam illustrate the urgent need to carry out studies and rehabilitate Armeniandams. In May 1994 the embankmentof the Artic dam broke across a width of 50 m, flooding two villages, killing several people and sweeping away many animals. Many other dams are in critical condition similar to the Artic dam.
Considerations in the Choice of Certain Components
4.7 The following rationale was used to determine the technology and institutional organizationfor the project:
(a) Introductionof Modern TubewellTechnology. Investment in moderntubewell technology is deemed justified if the incremental benefits are greater than the investment costs. Existing wells are badly constructedand do not follow standards established for their constructionby the DWSI (for details, see Annex 3) (Annex 4, paras. 18 to 21). Motors have been installedwithout protectionfrom power surges, and pump impellers wear out because they were installed without adequate filter screens in the wells. A number of these wells cannot be rehabilitated, and new wells will have to be drilled. If new electrical equipmentwith protective devices against voltage fluctuationsis installed, the life of the pumps can be extendedby four to five years.
(b) Investmentin PrefabricatedConcrete Lining of Canals and Pump Maintenance.Given that plants and workshops that manufacture concrete lining or maintain pumps already exist in Armenia, some investmentsin their restructuring are justified if they do not compromise competitive procurement of the manufactured products, or if the manufacturedproducts are cheaper than similar imported concrete linings, or if there is less need to import new pumps.
(c) O&M Costs. After the breakup of the collective farming system, under which the Governmentwas responsiblefor O&M of the irrigation infrastructureand its financing, it is necessary to reorganize both the O&M system and its financing. Presently the Government still manages the O&M system but it provide only a fraction of the O&M needs due to insufficient budgetary allocation. The budgetary allocation is partially dependent on revenues from collection of O&M charges from water users, but such collectionis in its infancy and covers only a fractionof the budgetary needs. If financial resourcesfor O&M provisionscontinue to be unsatisfactory,there is a strong possibility 20 Chapter 4
that the country would need another irrigation rehabilitation project in a short time. Hence, if the projectwill includea financingcomponent to cover incrementalO&M costs until water charges collection is established and able to cover the needed funds, there would likely to be substantialsavings in terms of preventinglong-lasting damage to the irrigation infrastructureof the country. It has been assessedthat with undertakingother measures proposed under the project, there are good prospects that collection of water charges will improve and that in about five years' time, the necessary O&M costs can be recovered.
(d) Project Implementation Unit. Presently, the ability of the Government to carry out imnplementationof the IDA-financed project without outside assistance is extremely limited. Assistance under the project for managing competitive bidding, construction work, procurement of equipment, contracting, supervision, and cost accounting is essentialfor the success of the project. It is believedthat this will be more efficient if it is carried out under an autonomousproject implementationunit (PIU) contractedunder a single contract to an internationallyrenowned firm.
E. DETAILEDPROJECT DESCRIPTION
The IrrigationRehabilitation Program
4.8 The project consists of 12 irrigation schemes, includinggroundwater development(see Annex 4 for details) (US $28 million).
4.9 There are four types of rehabilitationworks under the project:
(a) Rehabilitationof eight major conveyancesystems (US $18.5 million), includingcanals, aqueducts, siphons and hydraulic structures in eight major irrigation schemes: Shirak, Talin, Abovian (Kotaik), Arzni Shamiram, Lower Razdan, Octemberian, Artashat, and Getik. The area covered under this category is about 151,400 ha (92% of the project area, Map 25389 and Map 25390).
(b) Replacementof gumpsand pressure pipelines (US $9.5 million). This category includes four pumping schemes,of which one, the Vorotan, is an independentscheme that covers about 1,600 ha (1% of the project area). The other three-Azizbekov, Mkchian, and Arevshat-are within two of the eight major conveyanceschemes to be rehabilitated (Map 25390).
(c) Rehabilitationor reolacementof about 650 tubewelland pumps (US $6.9 million). These are located in the Ararat Valley, within the command areas of Octemberian, Lower Razdan, and Artashat conveyanceschemes.
(d) The rehabilitationof four storage schemes(reservoirs) (US $1.3 million). Three of these storage schemes-in Aparan, Mantash,and Sarnakhpiur-have their own commandareas totaling about 11,700 ha (7% of the project area). One storage scheme (Karnout)is part 7he Project 21
of the larger Shirak conveyancescheme (Map 25391).
4.10 The Eight Major ConveyanceSchemes (for details, see Annex 1, Table 1). The condition of much of the conveyancenetwork is unsatisfactory(paras. 3.12 to 3.14). In the reinforced concrete aqueducts, the concrete has disintegrated and water is leaking through the walls and floor of the aqueducts.In some places enterprisingfarmers have made use of a free water supply, and in others the collapseof the aqueductappears imminent. The rehabilitationworks under the project includesome 141.5 km of main canals, 523.2 kn of secondary canals, 1,411.0 km of tertiary canals and 548.5 km of nonpressurepipes, of which 412.9 km are made of concrete; the balance of 135.6 km is made of steel.
4.11 The Pumoing Schemes (for details, see Annex 1, Table 2). In all the four schemes proposedfor rehabilitation,pressure pipelinesconveying water from the pumpingstations to the distribu- tion systemsand someof the pumpsare in critical condition.The replacementof pressure pipes and some of the pumps are included in the project. However, radical anti-corrosion steps are required to be introducedpromptly, to avoid the same situationsin the future, in these and other schemes. Protecting new, as well as existing pipelines that still can be recovered through lining, coating, and other anti- corrosive measures will be financedunder the project.
4.12 The works required in the four pumping schemesare as follows:
(a) The Vorotan PumpingScheme. The rehabilitationworks within the pumpingsystems and the pressure pipelinesof the scheme include: (i) replacementof 2,015 m of 720 mm steel pressure pipeline, of eight mm wall thickness; and (ii) replacementor rehabilitationof three pumps.
(b) The AzizbekovI and II PumpingStations. The rehabilitationworks include replacement of 2,800 m of 630 mm steel pressure pipeline, of 8 mm wall thickness.
(c) The Mkchian I & II Pumping Stations. The rehabilitation works within the pumping systems and the pressure pipelines of the scheme include: (i) replacementof 18,000 m of 1,850 mm steel pressure pipeline, of 14 mm wall thickness, and 1,784 m of 1,800 mm steel pressure pipeline, of 14 mm wall thickness; and (ii) replacementor rehabilitation of 15 pumps.
(d) The Arevshat I & II PumpingComplex. The rehabilitationworks within the ArevshatI & II pumping systemsand the pressure pipelinesof the scheme include: (i) replacement of 15,800 m of 1,420 mm steel pressure pipeline, of 12 mm wall thickness; and (ii) replacementor rehabilitationof seven pumps.
4.13 The TubewellsRehabilitation Program (for details, see Annex 1, Table3). The proposed reconstructionand rehabilitationprogram would be carried out in three years and would include: (a) drilling of 150 new boreholes, in strict compliancewith existingdesign specifications;(b) rehabilitation of 300 existing boreholes; (c) supply and installationof 250 new pump sets, including the required meteringand control equipment;(d) supplyof spare parts for the existingRussian pumps, to enable repair and overhaul of approximately400 pump sets; and, (e) installationof 650 new and rehabilitatedpump sets. 22 Chapter 4
4.14 Rehabilitationof StorageDam Schemes(for details, see Annex 1, Table 4). The project would provide financing for the rehabilitation of four storage dams that are in extremely precarious condition. The rehabilitationprogram under the project would include repairs as follows:
(a) The Aparan Storage Dam: The concrete lining of the spillway tunnel and the chute is completelydestroyed in many sections. Also, in various sections along the outlet tunnel the steel lininghas disintegratedand water is leakinginto the tunnel; the regulationgates and their lifting gear need to be replaced and the cone valve repaired.
(b) The MantashStorage Dam: There are numerous cracks and serious deteriorationof the outlet conduit, with muddy water leaking into the conduit. The accumulationof mud at the bottom of the conduit is an indication that an internal process of erosion and piping is taking place. The concrete in the intake tower, the spillway and the spillway channel also require rehabilitation. The irrigation outlet pipe is corroded, and the regulation valves should be repaired.
(c) The SharnakhpiurStorage Dam: Presently the condition of the dam requires that the spillway be reconstructed,and a stilling basin at the end of the chute provided. Strong vibrations endanger the outlet works. The intake shouldbe redesignedand the gates and valves rehabilitated.
(d) The Karnout Storafe Dam: The dam embankment is in the process of settling. The elevationof the dam crest is some 80 cm below the original constructionlevel and only 90 cm above the maximum water level. The original wave wall has also settled. The concreteof the outlet conduit is cracked in several places and there is leakageof muddy water into the gallery. This indicates serious internal erosion (piping) in the dam structure, which is unsafe accordingto internationalstandards, and which poses risk of failure.
Pilot Projects to Improve Water Management
4.15 The cost of assistanceto improve the water managementis estimated at about US $2.47 million (Annex 1, Table 5). Presently there is no effective institution to manage the water distribution to about 300,000 farmers (paras. 3.25 to 3.28, and Annex 5). Over time, WUAs shouldbe formed and given responsibilityfor O&M and water charge collection.A two-tieredstructure shouldbe developed, with outlet-levelwater user groups of 10-15 farmers, organizedinto a village-levelumbrella association. Present conditionsare unsuitable for investmentin forming WUAs, as the physical structure does not support user groups, and the village councils are not suitablefor the aggregatingrole. Nonetheless,under the pilot project, programs would be developedin about 400 villages that introducelow-cost methods of dividing command areas into manageable units, and would try different techniques and methods to determinewhich approach is most appropriatefor Armenianfarmers. Second,reorienting the Operational MaintenanceEnterprise (OME) of the DWSIand village councils will create a better institutionalclimate for WUAs to develop. Third, as the OME gains institutionalexperience as a service organization,it will learn which O&M tasks can be delegated to local offices and eventually to WUAs, thus increasingthe underlying rationalefor such groups. Technicalassistance will be structured to facilitatethese processes and direct resourcesand attention appropriately. The Project 23
Incremental O&M
4.16 The allocationfor the incrementalO&M componentunder the project is US $5 million (Annex 1, Table 6). The conditionof conveyancestructures, pumping equipment,and tubewells is very poor because of long-term neglect compoundedby poor construction(paras. 4.10 to 4.13). In recent months, staff has not been paid, and maintenancematerials, such as paint to protect steel pipes, could not be procured. Clearly, it is only a matter of time before large parts of the system completelyfail and irrigation in many parts of the country cease. The most serious consequencesof such failures would be in the Ararat valley where no crops can be grown without irrigation.
4.17 Investmentsin the rehabilitationof the most adversely-affecteddams and canals and the procurement and installation of pipes and equipment will not be worthwhile if the rest of the system breaks down because of lack of routine maintenance.The present expenditureson staff, temporarylabor, and materials for routine maintenanceand small repairs, for the entire irrigation system in the country, is estimated at some US $3 million per year and additional US $2 million to US $3 million would be necessary to cover the actual needs. During project implementation,collection of water charges is expected to be better than at present through assistance to improve water managementand distribution systems. Accordinglywater charges to be collectedwould cover 40% of the O&M costs by December 31, 1995 of project implementation2 , 60% by December 31, 1996, 70% by December 31, 1997, and 100% by the project's closing date. With this schedulethere would be a shortfall in maintenancefunds of approximatelyUS $5 million over the four-year project period. This shortfall would be covered from project funds. At negotiationsit was agreedthat collectionof water charges would cover the O&M costs accordingto the schedule mentioned above (para. 7.1 (a)).
Technical Assistance for Training and for Irrigated Crop Production
4.18 A sum of about US $630,000 has been allocated for this purpose (Annex 1, Table 7). Technicalassistance would be focusedon subjectswith which local professionalsare unfamiliar and are relevantto the project successand management.All experts will be on relatively short-term assignments to enable the transfer of technologyto local staff. In addition some technicalassistance is required in areas of irrigatedcrop production, such as virology, bacteriology,and immunology,to prepare a national program of sanitationof the high-valuecrop areas.
Assistance to Update the Country's Water Master Plan and Preparation of the Next Project
4.19 The cost of updating and modifyingthe master plan, includingpreparation of the next followup irrigation project, is about US $500,000 (Annex 1, Table 7). In June 1993 DWSI issued a preliminary draft of the water master plan for the country. The plan deals with overall water resource developmentin Armenia in the next 40 years. The plan assesses the water balance of both runoff and groundwaterresources and comparesthis with the estimatedincreasing demand for water from all sectors of the economy.The detailed assessmentunder the master plan covers all administrativeand hydrological levels. However, the present draft master plan is not yet based on sound economicconsiderations. The plan therefore needs to be scrutinizedon the basis of the economic and financial realities in Armenia;
2 Includingincremental costs. 24 Chapter 4 substantialmodifications are likelyto emerge. On the basis of the updatedmaster plan, a followupproject would be prepared under the financing of the proposed project. This would include rehabilitationof additional dams that were already identified but not yet appraised, and investments in irrigation componentsyielding high economicand social benefits, considered of high priority for the country.
Project Implementation Unit
4.20 The cost of setting up and operating the PIU during the project implementationperiod is estimated at about US $1.5 million (Annex 1, Table 8). The Ministry of Agriculture would have overall responsibilityfor the project. It would delegate responsibilitiesfor project implementationto an independentPIU. The PIU would coordinateplanning and design work, the day-to-day supervisionon the construction sites, and be directly responsible for procurement and contracting. It would be responsible for the financial managementof the project, including the preparation and submissionof disbursementclaims, and liaison with the Bank, including reporting to the Bank. The unit would also carry out monitoringand evaluationof the project and manage the technicalassistance component(see paras. 5.1 to 5.11).
F. PROJECT COSTS
4.21 The proposed project is estimated to cost, based on 1993 prices, about US $57 million, includingphysical and price contingencies.The foreign exchangecomponent is estimatedat about US $46 million or about 78% of the total project cost. The cost of imported equipment and materials reflect current market prices of suppliers in the FSU republics. These prices are lower than internationalmarket prices, and the suppliersof the FSU are known sources to the Armenian planning authorities. Costs of civil works have been estimated from experiencesof the DWSI. Physical contingencieswere calculated at 20% of the investmentcosts because of significant uncertainty regarding the civil works costs and procurement of goods from FSU countries. Price contingenciesare based on the Bank's guidelines, starting at virtual no inflation in 1994; 2% for 1995; 2.5% for 1996; 2.7% for 1997; and, 2.5% for 1998. The project cost is denominatedsolely in U.S. dollar terms because the instabilityof the ruble during appraisal made it inadvisableto quote prices in that currency. In addition, in November 1993, Armenia decidedto issue its own currency, the drum. The underlying assumptionis that in the medium term, the rate of inflationwould be offset by the rate of devaluation,and the cost of the local component in real terms can be denominated in U.S. dollar terms without significant bias. Physical and price contingenciescombined make up about 23% of the project's base cost. Import duties, taxes, and other levies are not included in project costs, since it is assumed that investmentsunder the proposed project are exempt from import duties and taxes. Project costs are summarized in Table 4.1, and details are presented in Annex 1, Tables 10-13. The Project 25
Table 4.1: Project Cost Summary
Item Local Foreign Total % Foreign % Base Millions of US$ Exchange Cost
1. Rehabilitation of 8 Conveyance 5.54 12.93 18.47 70 40.0 Schemes
2. Rehabilitation of 4 Pumping 0.89 8.57 9.46 91 20.0 Schemes
3. Rehabilitation of Tubewells 0.69 6.25 6.94 90 15.0 4. Rehabilitation of Four Dams 0.56 0.75 1.31 57 3.0
Subtotal 7.68 28.50 36.18 79 78.0
5. Pilot Projects to Improve Water 0.14 2.33 2.47 94 5.0 Management
Subtotal 0.14 2.33 2.47 94 5.0
6. Incremental O&M Cost 2.30 2.70 5.00 54 11.0
Subtotal 2.30 2.70 5.00 54 11.0
7. Technical Assistance - 1.10 1.10 100 2.0
8. Project Implementation Unit .21 1.25 1.46 86 3.0
Subtotal .21 2.35 2.56 92 5.0
Base Cost 10.33 35.88 46.21 78 100.0 9. Physical Contingencies 1.61 6.45 8.06 80 17.0 10. Price Contingencies 0.66 2.22 2.88 77 6.0
Grand Total 12.60 44.55 57.15 78 123.0
G. FINANCING
4.22 The Borrower for all componentsof the proposed project is the Governmentof Arnenia. The IDA credit in the amount of US $43.0 Million equivalent would be lent to the Governmentof the Republicof Armenia at standard IDA terms, with 35 years' maturity and a 10-yeargrace period. The share of the IDA's loan is equivalentto 75.25 % of total project cost. The Borrower would contribute US $4.15 equivalent, or about 7.25% of total project costs. End users, including farmers in the irrigated areas, would contributeUS $2 million equivalent(about 3.5 % of total project costs) in the form of labor and local materials3.
3 Although it is assumed that investment costs are exempt from taxes and duties, nevertheless, they will not be financed under any circumstances by the IDA credit. 26 chapter 4
4.23 The International Fund for Agricultural Development (IFAD) has agreed to consider co-financingthe project in the amount of US $8 million to cover the cost of tertiary canals and pipes in the eight conveyance schemes, pilot projects to improve water management, and monitoring and evaluation.
4.24 The financingplan for the project is presented in Table 4.2.
Table 4.2: Financing Plan
Item Local Foreign Total Million of US$
1. IDA 4.65 38.35 43.00 2. IFAD 1.80 6.20 8.00 3. The Government 4.15 - 4.15 4. End Users, Farmers 2.00 - 2.00
Total Projet Cost 12.60 44.55 57.15
4.25 In March 1994 the Bank approved a PPF for this project to finance the establishmentof the PIU (para. 4.20).
4.26 At negotiations,the Governmentconfirmed to the InternationalDevelopment Association (IDA) of its intentionsto provide appropriate contributionsthat are necessaryto fulfill its share in the project financingof the local componentand ensure adequate and timely project implementation.It is estimatedthat in fiscal year 1995 the Governmentshare in the project financingwould be about US $1.0 million, and the same amount would be required for fiscal year 1995.
H. PROCUREMENT
4.27 Procurementof Goodsand CivilWorks wouldfollow the "Guidelines:Procurement under the IBRDLoans and IDA Credits, May 1992." Domesticpreferences shall be applicableto ICB contracts for goods and civil works in accordancewith the BankGuidelines. All consultingservices, includingthe technicalassistance and training would be governedunder the "Guidelines:Use of Consultantsby World Bank Borrowers and by The World Bank as ExecutingAgency, August 1981." The borrower will use IDA's recently issued standard bidding documents for Goods and Works. In the case of consulting assignmentsof time-basedand complex nature the borrower shall use Bank/IDA's standard contract for consultants.
4.28 The project is being co-financedby IFAD (US $8 million). The procurementof goods and services for the co-financedamount will be governed under IDA's ProcurementGuidelines. TheProject 27
4.29 There are several state-ownedconstruction firms or organizationsexperienced in building large dams, excavating complex tunnels, and constructing large water conveyance systems and hydropowerplants. Six of them are active in constructionof irrigation systemsunder the Ministry of Agriculture. All these state-ownedfirms are technicallyqualified to undertakethe proposed rehabilitation works on the eight irrigation conveyanceschemes and the four pumping schemes, the tubewelldrilling, the associatedrepair program, as well as the repair of the dams under the four storage schemes. These firms have financialand managerialautonomy and do not receive subsidiesfrom the Government. They meet the eligibilitycriteria of OD 11.00 (Paras. 88 to 90). They are intendedto be privatized in 1994 or 1995. At present there is only limited contractingcapability in the Armenian private sector for the type of volume of the civil works required for the project.
4.30 Manufacturingof prefabricatedconcrete structures, gravity flow pipes, and canal lining panels for irrigation is done in four plants owned by the Ministry of Agricultureand one plant jointly owned by the private sector and the Ministry of Housing Construction. The latter, called the "Huntsman-Armenia Concrete Corporation," is a modem, efficient facility that manufactures prefabricated prestressed concrete panels for the Ministry of Construction. It is equivalent to any comparable factory in the West. There are also several concrete factories under the Ministries of Construction,Transport and Energy, most of whichwould qualifyto participatein local biddingto supply concrete constructionmaterial for the rehabilitationworks. These state-ownedenterprises also meet the eligibility criteria of OD 11.00 (Parms. 88 to 90).
4.31 Repair and overhaul of submersible and other pumps is at present carried out by a few factories and workshops in Yerevan and in the Ararat Plain. Most of these workshops and factoriesare also financiallyand manageriallyautonomous state enterprisesbelonging to the Ministryof Agriculture.
4.32 Under the present circumstancesin Armenia, the use of competitivebidding relying on the participationof Government-ownedcompanies and the participationof someprivate sector contracting firms shouldbe considered to provide competitionas is the practice in many other FSU republics.
4.33 Procurement arrangements are summarized in Table 4.3. Details of the proposed procurementarrangements are as follows:
(a) GOODS: The equipmentand constructionmaterials, i.e. steel pipes, valves for Pumpingand ConveyanceSchemes; concrete pipes; submersiblepumps; and syphons, valves, etc., for pilot projects would be procured as follows:
(i) ICB will be used for contracts of US$100,000 and above up to an aggregate of US$19.8 million. Bank's standard bidding documents for Goods will be used.
(ii) LCB procedures will be used for contracts of smaller value below US $100,000 each. The local competitivebidding will be conductedin accordance with the Bank Guidelines. The total aggregatefor LCB contractsis estimatedto be US $8.5 million.
(iii) Local Shoppingprocedures will be used for snall items or items that can be obtainedoff-the shelf, estimatedto cost less than US $50,000 per contract, up 28 hapter4
to an aggregate amount of US $1.7 million, on the basis of at least three quotationsfrom qualifiedsuppliers.
(iv) Direct Contracting: Parts for repair of existingpumps will be procured through direct negotiations with the pump manufacturers up to an aggregate amount of US $200,000.
(b) CIVIL WORKS: Contracts for civil works would include rehabilitationof dams and canals, installationof pump sets and drilling of existingand constructionof new wells, etc., and would be procured in the followingmanner:
(i) ICB will be used for contracts estimatedto cost US $300,000 and above and wouldcover rehabilitationof dams, up to an aggregateamount of US $680,000. The borrower will use Bank/IDA's Standard Bidding Documents for Works through ICB (Smaller Contracts), June 1994. The contractors shall be prequalified.
(ii) LCB procedures will be used for most of the smaller contracts which are spread over a large area and may not interest foreign bidders. LCB contracts will typically be those which are estimated to cost less than US $300,000 each and their procurementwill be conductedthrough a locallyadvertised comnpetitive bidding process which will however, be open to foreign bidders if they wish to participatein bidding. The bidders for the works under IrrigationRehabilitation program and Pilot projects to improve water managementwill be prequalifiedas provided in para. 2.10 of the IDA Procurement Guidelines (May 1992) and IDA's standard Prequalificationdocument will be used for this purpose. The total aggregate for LCB contracts is estimated at US $9.7 million. For procurementof these contracts, the borrower shall use IDA's StandardBidding Documents- Smaller Works through LCB, June 1994.
(iii) Local Shopping: Smaller work contracts, estimated cost less than US $25,000 each may be awarded on the basis of comparisonof at least three price quotationsobtained from qualified contractors. The aggregateamount for such smaller contract is estimated at about US $100,000.
(c) CONSULTANTS(US $1.3 million): The borrower will employthrough competitive process an internationalconsulting firm under a single contract to establish the PIU, financed under the PPF (Para. 4.25). The estimated cost for the PIU establishmentis about US $1.3 million, includingcost of required equipment. The borrower will nominatethe Project Manager after obtaining IDA clearance. The Project Manager will be assisted by an expatriateDeputy Manager,experienced in IDA related procurementpolicies and other financialmatters, and four qualified foreign consultants,experienced in PIU operations, to provide necessary training to local staff. The selection of the consultingfirm will be on the basis of a select list which will require IDA prior review and approval.
(d) TA and PILOT PROJECTS( US$ 2.3 million): The consulting services for this componentwill be procured under a single contract on competitivebasis to operate the Pilot The Project 29
Projects to Improve Water Management(Para. 4.15); and for TA services (paras. 4.18 and 4.19) that would be administeredunder the PIU. Technical assistancewould be contracted on individualbasis for assignmentsranging from two weeks to about three months. The selection of these individualconsultants would be based on a reviewof CVs for each selectionand the total aggregate for these contracts is not likely to exceed US $200,000 in value. The training, includingoverseas training, would be providedunder TA contractswith local or foreign training institutionsand universitiesin accordancewith IDA Guidelinesand after prior approval by IDA of short lists, TORs, Letters of Invitation, and final draft contract.
The average contract value for consultingfirms is likely to exceed US $100,000 each while for individualconsultants it may be below US $50,000 each.
(e) INCREMENTALMAINTENANCE COSTS - 0 & M - (US$ 5 million): IDA will financecosts associatedwith maintenanceof existingheavy works and other infrastructureand/or any future remedial activitiesand repairs, etc., whichmay be warrantedto avoid further damage to theseworks. These costs will representreimbursements for supplyof materials and installation or repairs (Paras. 4.16 and 4.17). The PIU with Bank approval will establish the procedures for coordinatingand supervising the O&M administeredby the OME for the purpose of funding under the project. The PIU shall submit to the IDA every year an annual budget, likely unit costs for various categories of repairs, and the procedures for carrying out such repairs and disbursementof funds. Administrativeoverheads for involved departmental forces of public entities would not be reimbursed under the IDA credit.
4.34 IDA REVIEW: All ICB contracts for goods and works will be subject to IDA's prior review. Prior review would also be required for the first three LCB contracts for works regardless of their value and, subsequently,for all LCB contractsfor goods and works, estimatedto cost US $200,000 and above each for civil works and US $300,000 for goods. IDA would also pre-review terms of referenceand consultantcontracts for all consultingassignments costing more than US$100,000for fums, and US$50,000 for individuals. All other contractswill be subject to ex-post review by IDA.
4.35 Country Procurement Assessment Report: A CPAR has not yet been completed. However, procurementproposed under the project would follow IDA's ProcurementGuidelines.
4.36 ProcurementInformation: Informationregarding procurement administrationwould be collected and recorded and would comprise report of contract, status, and award informationby the Borrower, and quarterly reports to IDA by the Borrower. These reports would indicate:(a) revised cost estimatesfor individualcontracts and the total project, includingbest estimatesof allowancesfor physical andprice contingency';(b) revisedtiming of procurementactions, includingadvertising, bidding, contract award,and completiontime for individualcontracts; and (c) compliancewith aggregatelimits on specified methods of procurement.
4.37 Agreement was reached during credit negotiationsthat all procurementprocesses and actions under the project wouldfollow the procedures outlined in Paras. 4.27 to 4.36 (para 7.1(b)). 30 Chapter4
Table 4.3: Summary of Proposed Procurement Arrangements (000' US$)4
rrEM [CB LCB OTHER TOTAL
1. Works
1.1 Canals,Syphcns, Pipes and Hydraulics 4,630 130' 5.040 (3.700) (100) (3,800)
1.2 Inallam of Pumpses 1,200 1,200 (970) (970)
1.3 Drilling and Cstruction of New and Exsting Wells 5,480 5,480 (4,380) (4.380)
1.4 Rehubililatn of 850 790 1,640 Dams (680) (630) (1,310) 2. GoodB
2.1 Precut CocreseSectisa 8,380 8.380 (6,700) (6,700)
2.2 Steel Pipes,Valves, etc. for PumpingSchemes 6,200 700' 6,900 (5,740) (560) (6,300)
2.3 Coerete Pip 1,900 1,580 3,480 (1,520) (1,260) (2,78W)
2.4 Steel Pipes,Valves, etc. for ConveyanceSchemes 10,920 900' 11,820 (9,820) (720) (10,540)
2.5 S ubnmble Pumps 1,200 1,200 (1,200) (1,200)
2.6 SparePan for Subnenble Pumps 280 200- 480 (280) (200) (480)
2.7 Equisent for Pilot Projects(Syphm, Valves, etc.) 1,490 500 1,990 (1,490) (300) (1,790)
2.8 Equimem for TeAniscalAssistance snd PIU 420' 420 (420) (420)
3. C _mallmejes
3.1 Cansultanemisto Establisha PIU (uwdera PPF) 1,300 1,300 (1,300) (1,300)
3.2 TeclhncalAssistance and Pilot Projects 2,300- 2,300 (2.300) (2,300)
4. 04er
4.1 leremetl Expn 5,8C0- 5,8C0 (5,000) (5,000)
Toal 22,560 22,840 11,750 57,150 (20,450) (18,220) (10,600) (49,270)
* Local Shopping = US $1.8 million ** Direct Contracting = US $200,000 * Accordingto IDA Guidelines * Accordingto Proceduresapproved by IDA
4 Figures in parenthesesare the respectiveamounts financedby the IDA and IFAD loan. The Project 31
I. DISBURSEMENT
4.38 The proposed IDA credit of US $43.0 million equivalent would be disbursed over a period of four years, and the expected project closing.date would be June 30, 1999. There is no experience yet to form a disbursementprofile for Armenia, but it is estimated that the country's ability to implementthe project over a four-yearperiod is reasonable,especially given that a PIU will be set up in advanceof the actual implementationof the project works. A mid-term evaluationwould be undertaken by the IDA and the Borrower by April 30, 1997, or when disbursements reach 50% of the total loan amount, whichever is earlier, to examineall aspects of implementation(para. 5.28). Commitmentsfor major contracts would be approved throughOctober 31, 1999. The estimateddisbursement during each year of project implementationis as follows:
FY 96 US $ 4.0 million FY 97 US $11.0 million FY 98 US $16.0 million FY 99 US $12.0 million
4.39 The proceeds of the credit would be disbursed in U.S. dollars as shown in Table 4.4 below:
Table 4.4: Disbursement Categories Disbursement Category Allocation Disbursement Basis (US $ mil.) (1) Goods: Equipmentand 23.5 100% of foreign expenditures, Material 100% of local expenditures(ex factory cost) and 85% of local expendituresfor other items procured locally (2) Civil Works 9.5 100% of foreign expenditures, 85% of local expenditures (3) Technical Assistance 1.0 100% (4) Operationaland 5.0 100% MaintenanceCosts
(5) Refund Of Project 1.5 Preparation Advance (6) Unallocated 2.5 TOTAL 43.0
4.40 Direct paymentprocedures from IDA to suppliers will be used. Disbursementsagainst the categories described in Table 4.4 would be made upon receipt by IDA of fully documented applisations,except for contractsvalued at less than US $50,000, which would be made against certified statementsof expenditures(SOE). Supportingdocumentation for SOE would be retainedby the Borrower and made available to the IDA during supervision. Direct payment applications and applicationsfor 32 Chapter4 special commitmentswould be accepted for minimum amounts of US $20,000. To facilitate project implementation,the borrower would establisha SpecialAccount in one of the major foreign commercial banks to cover IDA's share of expenditures.An initial deposit of US $1.5 million would be made, with the amount in the SpecialAccount increasedto the ceiling of US $2 million when total disbursements reached US $3 million. Applications for replenishment of the Special Account would be submitted monthly or when one-thirdof the amnounthas been withdrawn,whichever occurs earlier. Documentation requirementsfor replenishmentwould followthe same procedureas describedabove. In additionmonthly bank statementsof the Special Account which have been reconciledby the borrower would accompany all replenishmentrequests. At negotiations,agreement would be soughtthat disbursementarrangements willfollow theprocedures described in paras. 4.38 to 4.40 andfor establishingand operatingthe Special Account as described above (para. 7.1 (c) and (d)).
4.41 Disbursementsagainst withdrawalapplications to cover incrementalO&M expenditures would be subject to prior agreement with IDA on annual budget requirement by the Governmentfor O&M operations as described in para. 4.33(v). Such agreement will have to be reached prior to every fiscal year and will stipulatethe extent of the annual IDA disbursementfor that category.Agreement for such arrangementwas reachedduring Credit negotiations(para. 7.1 (e)). V. PROJECT IMPLEMENTATION
A. ORGANIZATION AND MANAGEMENT
5.1 The management,administration, and coordinationof the project will be the responsibility of the PIU (para. 4.20 and Chart 1), which the Government has decided to establish through PPF financing by the Bank (para. 4.25). The Ministry of Agriculture (MOA), would have overall responsibilityfor the project. The MOA has already nominateda Project Board of Management,chaired by a Deputy Minister. Other members of the board are the Director of DWSI, Director of the OME, Director of the EconomicDepartment in the MOA, a second DeputyMinister, and a representativefrom the Ministry of Economy. The Board of Managementmakes policy decisions and provides general guidanceto the project implementationstaff. Micro-managementof the project has been delegatedto the PIU which will report directly to the project's Board of Management.
5.2 The objectives of the PIU are as follows:
(a) coordination of project implementation,including planning and design works, direct responsibilityfor procurementand contracting,and supervisionon the constructionsites;
(b) financial management of the project, including the preparation and submission of withdrawalapplications, and liaisonwith the Bank, includingreporting to the Bank; and
(c) coordinatingpreparation of a follow-upproject.
5.3 In accordancewith project objectives, the PIU would have four sections: Engineering, Services, Monitoring and Evaluation, and TechnicalAssistance.
5.4 The EnRineeringSection would:
(a) complete the detailed planning and preparationfor the project;
(b) approve the designs, specifications and bills of quantities, and prepare contract documents. It would manage tendering procedures and award contracts in accordance with the Loan Agreementand with the Guidelinesfor Procurementof IDA in order for the contracts to be eligible for financing from the project;
(c) schedule and conduct the purchasingprocess; and
(d) provide on-site supervision, approve contractor and supplier payments, and preparation withdrawalapplications.
5.5 The Services Section would be responsible for translations, recruitment of personnel, transportation, communication, disbursement (including payments to contractors and suppliers), accounting and auditing. The section would also be responsible for preparing bi-annual reports to the Bank and the Governmenton the PIU operations and progress in project implementation. Chart 1: Project Implementation Unit W l
ProjePt. t P l
Auditl"g | D^rJ edPrle ~ ~ ~~~~~ai ls Tsll- lstr
. udi X4 *wr X* _e . .. I wa. Pla
a m 2, Contreat~~~~~~~~~~~~~~ i Project Implementation 35
5.6 The TechnicalAssistance Section would principallybe responsiblefor three tasks: (a) to design activitiesthat would enhancethe developmentof the WUAs and repaymentof water charges; (b) to provide consultationto the Water PlanningInstitute in improvingand updating the Water Master Plan; and (c) organizing training activities connected with implementationof the project and for specific managementsystems and irrigated crop production. The training seminars would be conductedby Bank Staff and consultants, with emphasisplaced on-the-jobtraining provided by expatriateconsultants.
5.7 The Monitoring and Evaluation Section would report directly to the Project Board Management(paras. 5.21-5.25). It would be responsible for collecting and analyzing informationon project implementation,and its impact on agricultural production. The monitoring system would alert managementto emergingproblems and draw up periodic progress reports.
5.8 In view of the Government's lack of familiarity with the establishmentand operationof a PIU, the Governmenthas agreed with the Bank to contract with an internationalconsulting firm to establish and managethe PIU. Such a contract was signed with a foreign company in October 1994. Under this arrangementthe Armenian Governmentretained the right to nominate the Project Manager to head the PIU, and this nominationwas approved by the Bank. The PIU will initially be staffed by 4 qualified expatriateconsultants, in additionto the Project Manager. One of them, the Deputy Manager of the PIU, will train and assistthe Project Manager to assume full responsibilityfor the PIU operations. The other expatriateconsultants will have responsibilityfor establishingthe PIU procedures,policies, and accounting,and in collaborationwith the Project Manager, for recruiting local counterpartstaff who they will train to assumetheir functions in the project implementationmanagement. The length of stay for the expatriate staff is dependenton the transfer of appropriatetechnology to the recruited local staff and to the Project Manager.
5.9 In additionto coordinatingand administeringproject implementation,the PIU would also be responsiblefor coordinatingthe preparationof a follow-upproject.
5.10 The responsibilitiesof the PIU in terms of procurementare as follows:
(a) coordinatedetailed plans for procurement, includingthe packagingof goods into specific contracts; scheduling of purchases and deliveries; designation of responsibilities for conducting the procurement process, and determinationof signature authority for each contract;
(b) ensure that appropriatearrangements are made for advertisingcontracting opportunities; preparation and issuance of bidding documents;conducting public bid openings where required;and evaluationand comparisonsof offers to selectthe lowestevaluated bidders;
(c) obtain the required approvals from Government and IDA for bidding documents;make recommendationsfor bidder selectionand contract award; and prepare the final contract document;
(d) verify that contract conditions for the supply and delivery of goods and services have been met and that contracts are eligible for payments from the Credit; and
(e) monitor the progress of procurementand its compliancewith the terms of the Credit. 36 Chapter 5
5.11 At negotiationsan agreementwas reached that the PIU will be organizedand operate alongthe lines of the program describedin peas. 5.1-5.10 (para. 7.1 (f)). A conditionfor effectiveness of the proposed Credit will be the establishmentof a PIU with an adequate numberof suitably qualified staff as indicated in para. 7.2.
B. PROJECT PHASING
5.12 Project implementationis anticipated to take about three and a half years from loan effectiveness,and another six monthsto loan closing (Chart 2, for details on the project implementation plan see Annex 9). The relatively long project schedule is attributed to the fact that most of the constructioninfrastructure has been idle for a number of years, and has to be geared up to carry out constructionactivities over a wide geographicalarea.'
5.13 Completionof the design and the tender documents is crucial to the prompt initiationof project implementation.Many engineers of the Planning Institutehave been temporarily suspended, but the Institute is now gearing up to re-employthem.
5.14 The constructionwhich could be started in the first season is cast-in-situconcrete work such as the construction of parts of the Getik Main Canal, and rehabilitation works on canals where precast sectionscannot be used. All these works, however, have first to be designed.
5.15 Procurementof importeditems is the most urgent project activity. Specificationswould be prepared immediatelyafter the PIU has been set up, and the necessaryexpertise is availableto discuss design and procurement issues with the Planning Institute of the DWSI. Tender documents would be prepared simultaneouslywith work on specifications.
5.16 Imported goods could be available in Yerevan eight to ten months after tendering. The constrainingfactor in this timetable is the establishment of the PIU and the recruitmentof expatriate experts. Actual implementationof the project can start about six to eight months from establishmentof the PIU.
5.17 Replacementof steel pressure pipes requires the importationof pipe sections. These could be availablefor field work eighteen months after tendering.
5.18 A shorter period would be required for implementationof main, secondary,and tertiary canals which require concrete sections. Most of the concrete manufacturingplants can start operations inmmediately,following LCBprocedures to select the lowest evaluatedbidder, though provisionof some concreteproducts are contingenton modernizationin a plant that is anticipatedto be completebefore the end of the second year of operations.
5.19 Well drilling will be delayeduntil the necessaryequipment is imported(well screensand other equipment),and the hydrogeologicalstudies are completed.The earliest date well drilling can start will be the secondconstruction season.
Each reachof canalwhich has to be repaired and each pipe section which has to be replaced is a separate building site. HaWIj;l,3isI
- -. - .* --...... - -*&--^+-&+6+...... -.-....--.^+...s.-+s-**+6w+.-...... ww-6..00-0+..+.- ...... +. .
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...... I...... -...... ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~. 38 Chapter 5
5.20 The planningand design of dam rehabilitationworks, starting from establishmentof the PIU, will last at least a year. Constructionactivity on the four sites will therefore start only towards the middle of the second constructionseason.
C. PROJECT MONITORING, EVALUATION, AND REPORTING
5.21 A monitoring and evaluation section (M&ES), would report directly to the Project ManagementBoard, though administrativelyit would be servicedand supervisedby the PIU (para. 5.7). The M&ES would establishthe types of informationto be prepared under the project and its evaluation. Broadly this will be divided into three categories:
(a) informationpertaining to physical implementationand services provided by the project, together with relevant financial records. Key indicators would include progress in implementationof the various irrigation schemes, procurement, establishmentof pilot projects for improved water management,and technicalassistance;
(b) information pertaining to the use of the structures and the services by the targeted population and the initial consequences of that use. Key indicators would include informationon the beneficiariesof the various project components,to the extent possible the impact of the project on the beneficiariesincome; and
(c) information on the social, economic, or environmental reasons for any unexpected reaction by the target populationthat is revealedby the informationabout the use of the structures and services.
5.22 The M&ESwould provide annualprogress reports to the Project ManagementBoard and to IDA in an agreed format.
5.23 The M&ES would collect and analyze data on costs, benefits, and financial viabilityof main investmentson the basis of suitablesampling. The evaluation objectiveswould be to:
(a) critically review, in light of subsequentdevelopments, the project design and rationale stated in the appraisal documents;
(b) assess the ongoingeconomic efficiency of the project. This would require the following:
(i) analysisof the project design and determinationof its adequacyto overcomethe identifiedconstraints in agriculture and thus to promote the desired changes;
(ii) comparisonof actual attainmentswith the targets set and identifyingthe reasons for shortfalls or better than anticipatedachievements; and
(iii) assessmentof the efficiencyof project implementationprocedures and quality of managerialperformance.
(c) determine the effects and impact of the project; and ProjectImplementation 39
(d) present the lessons learned and the recommendationsthat follow from them.
5.24 The M&ES would also be responsiblefor preparing information regarding procurement to be collectedand recorded as follows:
(a) prompt reporting of contract awards informationby the Borrower; and
(b) comprehensivequarterly reports to the Bank by the Borrower (assisted by consultants) indicating:
(i) revised cost estimatesfor individualcontracts and the total project, includingbest estimates of allowancesfor physical and price contingencies;
(ii) revised timing of procurementactions, includingadvertising, bidding, contract award, and completiontime for individual contracts; and
(iii) compliancewith aggregate limits on specifiedmethod of procurement.
5.25 Annual evaluation reports will be submitted by the M&ES to the Project Board Managementand to IDA. The M&ES would also prepare a project completion report not later than six months after closing date. During negotiationsagreement was reachedthat M&ES will:
(a) follow the monitoringand evaluationprocedures as outlinedin paras. 5.22-5.25 above;
(b) submit to IDA the periodic reports;
(c) prepare a project completionreport (para. 7.1 (h)).
D. ACCOUNTS AND AUDIT
5.26 The project accounts will be managed by the PIU during project implementation.The project accounts would identify all sources and uses of funds in carrying out the project, including detailedaccounting of the use of the proceedsof the Loan and the operationof the Special Account.The project account would be audited by an independentauditor acceptableto IDA, and the audit reports would be submittedto the Project Board Managementand to the Bank within four months of the end of the fiscal year. The audit reports would contain a separate opinion on the operation of the Special Accountand the statement of expenditure(SOE) procedure, when utilized. Since the auditingprofession is not yet well developedin Armenia, it is anticipatedthat an internationalauditing firm will carry out the audits. During negotiations agreement was reached regarding the accounting and auditing requirementsas outlinedabove (para. 7.1 (i)).
E. BANK SUPERVISION
5.27 The project would require an intensivesupervision, with visits by IDA staff at least twice a year (for details concerningproposed supervisionplan see Annex 10). With the intention of following 40 ChapterS up this project with wider investment in irrigation, supervision would be combined with project preparationin the last year of the project. It is estimated that project supervisionin the first and second year would require about 22 staff weeks each year. In the third year because of the mid-term review, the project would require 25 staff weeks. In the fourth year the project would require about 12 staff weeks, and in the last year together with preparation of a completionreport, the project would require about 18 staff weeks.
5.28 At negotiationsagreement was reachedfor a mid-term review of the project by a joint teamfrom IDA and the MOA (para. 4.38). The expectationof the mid-term review is that there would alreadybe significantprogress in the implementationof all the project components,and that the master plan of irrigationand water supplyfor the countrywould alreadybe substantiallyupdated (para. 7.1 (j). VI. PROJECTBENEFITS, RISKS, AND ENVIRONMENTAL IMPACTS
A. PROJECT BENEFITS
ProjectImpact
6.1 The proposedinvestment of aboutUS $57 million over a four year implementationperiod would financethe rehabilitationof irrigationsystems in the major agriculturalproduction areas and would have profound impacton productivityof the agriculturesector; on the well being of the beneficiaries;and on the country's economy. A secure water supply would promote agriculturalproduction, increasethe food supply, and create employmentand raise incomes in the rural areas. Without the project, Armenia would need to increase its food imports, or decrease its food consumptionsubstantially. Under the project, constructionwork will generate employmentopportunities for about 2,000 unemployedskilled and unskilledworkers. The project wouldalso establish the foundationof improvedand rationalizedwater managementby creating WUAs and a national system of water charges designed to recover the costs of O&M at a minimum.
Basic Assumptions
6.2 The project implementationis predicated on the assumption that there is no economic blockade and the transport constraint has been removed. However, based on the Country Economic Memorandumfor Armenia from March 1993, there are two possiblescenarios after liftingthe blockade. Under the less optimistic one, the country would continue to be hampered by further economic deteriorationin the FSU Countries, with a continuingdepreciation of its currency. Under this scenario Armenia is anticipated to gradually reorient its trade towards Westem customers. As the economic situationbecomes more settled, foreign investmentswill resume, and a large proportionof idle production capacity will be reactivated. The economic situationshould stabilize in about two years after lifting the blockade.In the last years of the decade real growth would reach about 5% per year.
6.3 Under the optimistic scenario, immediately after the blockade is lifted trade and the paymentssystem would stabilize, and the local currency slide halted. This would lead to a rapid growth in productionas existingcapacity is broughtback into use. Followingthe immediateimpact of lifting the blockade,there would be some slowingdown in growth while investmentcapital would continueto flow in. There would be substantialchanges in the compositionof output and some degree of macroeconomic stabilizationshould occur. Towardthe end of the century growth is anticipatedto be 7 % to 8 % per year, leadingto a restoration of the 1989 output level by the year 2000.
6.4 Under either scenario, importation of fuel, chemicals, and fertilizers are to be unrestricted, which implies that the project implementationcan restore the production capacity of the pre-projectlevel in irrigated areas, and can yield additionalbenefits from increaseddemand due to growth in income. 42 Chapter 6
Productionand Pricing
6.5 Without project. Rehabilitationof the conveyancesystems and the tubewells would most affect the low-lying areas, where rainfall is inadequatefor crop production. The assumption was that without the project the system would not completely fail, but only that water losses would gradually increase. As less water reaches the fields, yields would diminish, followedby changes in the cropping patterns. For economicanalysis it was assumedthat water supplywill decreaseby about 5 % per annum and reach about 20% of the pre-project supply in the seventeenthyear if no rehabilitationmeasures are taken.
6.6 Farmers' first response to a growing water shortage would be to under-irrigate.First the cereals and forage would get less water, followed by orchards and, finally, potatoes and vegetables. Wheat crops, now irrigated three or four times, would receive two and eventually only one irrigation. This would reduce yields to about 2.5 t/ha with two irrigations,and 1.5 t/ha with one irrigation. Lucerne could no longer be grown: farmers would revert to a single cut of cereal hay, irrigated once, yielding about 2.0 t/ha.
6.7 In the storage dam rehabilitation component, the assumption has been that without rehabilitationthe damswould cease to function. Apart from the physical and environmentaldamage, their commandareas would be left withoutwater, or at best with much reduced supplies from run-of-the-river flows. These limitedquantities would only be used for the home plots. Since most of the commandareas are at medium and high elevations, crops grown would be rainfed cereals for grain and fodder. The cereals grown for grain would yield about 1.5 t/ha, and fodder yields would be about 2.0 t/ha.
6.8 With Project. The repair of the dams and conveyance structures would ensure that agriculture production will not fall. Present yields, now affectedby a shortage of water, would increase somewhat, and farmers would be more willing to invest in purchased inputs and land cultivation. This would eventually raise average yields to levels now achieved by the more successful farmers. It is unlikely, however, that the irrigated areas would expand significantly.Water distribution arrangements betweennew land owners, resulting from the land reform, are not going to be completelyresolved during project implementation,though the project would contributeto its improvement.
6.9 Increasedagricultural production would be associatedwith increaseddemand for food due to expected increase of income and reopening of the trade routes, mainly to Russia and other FSU republics. In recent years trade was severely restricted due the blockade on Armenia. Before the impositionof the blockade, Armenia exported significant quantities of canned fruits and vegetables. However, the blockadecaused the agroindustrysubsector to be almost completelyparalyzed. Lifting of the blockadeon Armeniawould cause gradual restorationof productionof processedfruits and vegetables for export and also import of needed inputs. The increased production resulting from the project is, therefore, not likely to be difficult to be disposed either domesticallyor through exports.
6.10 Prices. Prices of agriculture products and food in Armenia are liberalized, with the exceptionof bread. Prices of wheat paid to farmers are lower than the world market price; but despite a price of only 70 to 80% of world prices, wheat is still one of the most profitablecrops. However, with normalizing trade after lifting of the blockade, wheat production is likely to fall because fruits and vegetableswhich were unable to be exported due the restricted trade will stop overhangingthe market and would becomemore profitableto produce. Producerprices that were used to estimate the "with"and Project Benefits, Risks, and EnvironmentalImpacts 43
"withoutwproject scenarios were on the conservative side; they were either those paid by Government or the free market prices, where Government prices were not established or not available. All prices of inputs, which have to be imported, are based on, or close to, world market prices. Fertilizer was costed at US $120 per ton, with an average nutrient rate of 30 %; pesticide prices were estimated at US $10 per kg or liter; one hour of tractor work at about US $8.30; and a combine hour at US $10.80. Cost of water was calculated on the basis of US $0.015/kwh, and a consumption of 0.5 kwh/m3 of 100 m lift.
6.11 The returns to forage (Lucerne and Esparcet), of about US $19 per ha in the lowlands and US $4 in the midlands, are calculated up to the point of hay production. Translated into animal production, one ha of forage produces, in the lowlands, yields about 195 kg of dressed weight of beef (at US $0.83 per kg-a return of US $162.5 per ha), or about 3,210 liter of milk (at US $0.165 per I-a return of US $535 per ha). In the midlands 1 ha of forage generates about 2,570 liter of milk (US $429 per ha), or 156 kg of beef (US $130/ha).
6.12 Transport cost estimates are based on ARMPLODORODIE' charges which are: US $1.25 for a tractor or trailer up to 5 km distance, and US $2.5 for the same up to 10 km. Diesel operated truck (Kamaz 8, 10, 12 t) transport is charged at 16 to 21 cents per km .
B. ECONOMIC EVALUATION
Benefits and Justification
6.13 As indicated above, economic benefits from the project realized by the country and beneficiary farmers would be:
(a) avoiding a decrease in production and thus a decrease in farmers' incomes resulting from deterioration of the irrigation infrastructure system;
(b) improvement in yields and changes in the cropping pattern that result in optimizing return;
(c) reducing the foreign exchange expenditures on imported food as necessitated by decreased production if the project is not implemented;
(d) increased employment on construction during project implementation;
(e) improvement in the water management and distribution system which would contribute to an increase in production; and,
(f) energy savings through more gravity irrigation and less energy dependent pumping resources.
The main indirect project benefits would include an increase in employment opportunities for auxiliary
The state enterprise in charge of input distribution. 44 Chapter 6 services,such as developmentof cement lining of steel pipe, and increase in productionof concrete pipes (instead of steel pipes).
6.14 From a national point of view, the project would support the rural poor, who comprise a significantportion of the country's population.2 It would contributeto the stabilizationof their income by guaranteeingthat the water resource infrastructureis maintainedand rehabilitated.
6.15 A separatefinancial analysis is not warrantedsince as mentionedpreviously (para. 6.10), prices of agriculture products and food are liberalizedin Armenia. By and large there is no difference betweeneconomic and financialcosts. The price of grains paid to farmers, however, is lower than world marketprices (para. 6.10), which makes the net value of productionlower by about 4.5 % than if farmers were paid the world market price. The impact of paying the financial price of grains on the economics of the project is treated in the sensitivityanalysis (para. 6.17). The cost of pumping water is subsidized. However, about 82% of the project area is irrigatedby gravity. Since the cost of water in areas irrigated by power generatedsources constitutesabout 22.6 % of the operatingcost, the impactof water generated by electricityon the total project operatingcost is about 4%, which is relativelyinsignificant (Annex 8).3
EconomicRate of Return
6.16 The economic rate of return for the project is estimated at 53% (Annex 1, Table 14). The economicrate of return calculationsare based on the followingassumptions:
(a) agriculturalproduction based on the developmentof the irrigated area in four years and a production period of 20 years;
(b) withoutthe project, agriculturalproduction in the project area would declineby about 5 % per year up to year 17 and then would remain at 20% of the pre-project level;
(c) increases in agricultural production would begin in project year 4.4 In that year about 60% of the fall in the production is restored due to rehabilitation of the irrigation infrastructure under the project. From the fifth year it is assumed that agriculture production would reach the pre-project level;
(d) production costs were priced at local October 1993 constant market prices (Annex 8, Table A.3);
2 It is estimatedthat at least 30% of the farmers do not receive sufficientwater, due to failingand mismanaged irrigationinfrastructure. As a resultthe incomeof these farmersis adverselyaffected.
3 Accordingto Annex 8, Tables A.8 and A.9 operating costs per hectare in lowlandsare Rubles 4,583,980; and operatingcosts per hectare in the midlandsare Rubles 4,432,390. Given that there are 134,600ha in the lowlandand 30,100 ha in the mid lands, total operatingcosts in millionof Rubles are: (134,600 x 4583.98/1000)+ (30,100 x 4432.3911000)= 750,418.65. The share of the operating cost of water in the midland is 22.6%, hence: .226 x (30,100 x 4432.39/1000)/ 750,418.65 = 0.04
It is likely that the impactcan materializesooner than the fourth year. However, it was preferred to use a conservativeassumption. ProjectBenefits, Risks, and Envronmental Impacts 45
(e) economicprices for wheat were based on Bankprojections, but adjustedto the farm gate, prevailing farm gate prices were used for other products(nontradeable, Annex 8, Table A.3);
(f) with the project, production would start in command areas of pressure pipeline and tubewell replacement in year three and in year four in areas which will benefit from conveyancesystem rehabilitation;
(g) as a result of rehabilitationof the irrigation infrastructureand increased availabilityof water there would be a gradual improvement of yields and changes in the cropping pattern. In the Low Lands areas such changeswould continueuntil the twelfth year, and in the Mid Lands areas until the tenth year (Annex 8);
(h) depreciationof project elementswere based on the followingassumptions: for pump sets and mechanicalequipment eight years, wells 15 years, and canals and pipelines25 years. Since some budget allocation has been appropriated for O&M for the existing infrastructure,only 2 % of the investmentcost was consideredas incrementalO&M costs and includedin the calculationof the rate of return analysis; and
(i) all projectworks, equipment,technical services, and physicalcontingencies were included in investmentcosts.
Sensitivity Analysis
6.17 The results of a sensitivity analysis to test the effects of cost overruns and delays or shortfalls in benefits on the rate of return are presented in Annex 1, Table 14 and summarizedin Table 6.1. As can be seen, substantialimpact on reduction in the rates of return are attributed to delays in
Table 6.1: Summary of SensitivityAnalysis Cases
CASE RATE OF RETURN 1. Benefitdown by 20% 47% 2. Benefitdown by 20% and cost up by 20% 43% 3. Benefitdown by 50% and cost up by 20% 33% 4. Improvedwater efficiencyfrom 35 to 50% 61% 5. Payingfarrners less than the worldprice for cereals 52% (currentpractice, a proxy for FRR) 6. Delayproject implementationby one year 48% 7. Delayproject implementationby two years 41% 8. Delayproject implementationby three years 35% implementation.The reason for such a significant decrease in the rate of return is twofold. First, the opportunitycost of delay equals the net value of production that is lost in the year(s) that the project 46 Chapter6 originally yielded benefits'; second, the infrastructure is progressively deterioratingand it is assumed that investmentrequirements rise by about 10% for every year of delay in the rehabilitationworks.
C. RISKS
6.18 The principal project risk is political. If there is a resumption of hostilities between Armenia and any of its neighbors, a reimposition of a blockade would impact the project adversely because of expected difficulties to import fuel, spare parts, construction machinery, steel pipes and reinforcedsteel, without which large diameter pipes cannot be laid and precast concrete sections cannot be manufactured. In addition, resources needed for operation and maintenance of the irrigation infrastructurewould be drained and the physical structures would be put in jeopardy.
6.19 Some of the benefits associated with the project relate to implementationof reforms leadingto a market economy. Suchbenefits are the impositionand collectionof water chargesthat would recover the full cost of energy. It is also critical for the project that water subsidies would be gradually reducedand that beneficiarieswill eventuallyassume full responsibilityfor operation and maintenance. The risk is that if the Governmentwill not be strong enough to resist pressure to resume past policiesof water subsidies and lax collectionof water charges, the irrigation infrastructure in the country would againdeteriorate. To safeguardagainst such risk, any additionalassistance by the Bank in the agriculture sector, as well as in other sectors, shouldconsider Government'sprogress in reducing subsidiesfor water in agricultureas planned under this project.
6.20 Basedon existingmodes the quality of constructionwill not meet internationallyaccepted standards and the project lifetime would be less than estimated. This has been the case with most of the existing irrigation infrastructure. A properly staffed and trained project implementationunit would mitigate this risk.
6.21 Power is at present generated mainly from hydroelectric sources and is completely subsidizedfor irrigation purposes. The risk is that utilizationof energy for irrigation is associatedwith deteriorationof the environment. Presently most of the generated energy comes from water originated from Lake Sevan.Over-pumping of water from the lake have causedthe water level to fall which resulted in adverse impact on the micro climate environmentaround the lake. Impositionof water charges that cover the full cost of operationsand maintenanceand energy costs is imperativeto mitigate this risk.
6.22 Armenia is in a seismically active zone. Conservativedesigns for the rehabilitationof dams were adopted to mitigate this risk.
For example: withoutdebay project benefits start when there is avoidance of a decline in the net value of productionat the completionof the investmentworks, say, in year 4. If the project is delayed by I year, a decrease in net value of productionin year 4 is not avoided. ProjectBenefits, Risks, and EnvironmentalImpacts 47
D. ENVIRONMENTAL IMPACT
6.23 The project has been placed in category "B" in accordancewith Operational Directives.
6.24 The proposed rehabilitation works on the conveyancestructures, the tubewells in the Ararat Plain and on storage darns, would have positiveenvironmental consequences. They would reduce waterloggingand erosion near the conveyancestructures and protect reclaimedareas in the Ararat Plain, and would eliminate the threat to life and property downstream of the dams. To sustain these improvementsin the long term requires adequatemaintenance of the rehabilitatedstructures and careful monitoring of the environmentaleffects. Within the first six month of the project effectivenessthe M&M&ES will define environmental indicators to determine the cost of neglect in infrastructure maintenance.
6.25 Leaking canals and hydraulic structures, if not repaired, would cause environmental damage in the immediate neighborhoodof the leaks. Bursting pumping stations and/or their pertinent pressure pipes can destroy infrastructure in the vicinity of the pipeline, and can cause serious soil erosion.
6.26 A delay in the rehabilitationof tubewells in the Ararat Plain will cause an adverse impact on the environmentas well. High groundwater levels have been controlled by pumped drainage in the low lying areas of the plain. When drainage wells cease to pump, groundwater will gradually rise and destroy land reclaimedover the last decades.
6.27 The most serious threat to the environment, which the project would protect against, however, is posed by storage dam classifiedas high risk. According to data collectedby the DWSI, a breach in any one of the high risk dams will pose a serious threat to life and property along the probable flood path.
6.28 The approximate number of people living in villages, in the approximate area of the probable flood path of the four storage dams slated for rehabilitationunder the project are:
Aparan 163,000 Karnout 4,000 Mantash 9,000 Sarnakhipur 8,000
These people are living at significantrisk though there are no quantitativeestimates as to the likelihood of floods or the loss of life, but such numbers could be astounding.Project would reduce such risk to a reasonablelevel.
6.29 The DWSI has prepared estimates of material damage which will be caused by dam failures in downstreamareas of Armenia. The damage estimates in dollar terms (based on 1991 Ruble) range from about US $3 million for the Aparan Dam to less than US $100,000 for the Karnout Dam.
6.30 Another serious impact of a possible breaching of the Mantash Dam would be the loss of drinking water for a populationof about 25,000. The dams also control flooding in the downstream areas. 48 Chapter 6
6.31 The investment program under the proposed project would affect rivers that are internationalwaterways in accordancewith OD 7.5, para. 2(a)(i)and (ii), i.e., rivers and tributaries that ultimatelyflow to and/or are shared with other riparian countries. However, the project is exempt from notificationrequirements, pursuant to OD 7.5, para. 8, because it finances strictly rehabilitationworks. The nature of the planned investments-replacing corrosive pipes, repairing lined canals, replacementof tubewells and repairing leaking dams-should not have negative impacts on either the quantity or the quality of present and future flows. More specifically:
(a) all investmentsunder the proposed project satisfy the criteria which require: first, that they will have no adverse effect on the quantity of water flows to any other riparian countries, since they will involveno increasein water extraction.In fact there might even be a slight decrease in the amount of water being extracted due to improved water management and distribution. Second, water quality will not be adversely affected becausethe replacementof tubewellpumps under the project, may assist in reducing the water table and averting water salinity, which otherwise finds its way to international waterways;
(b) for any study to be undertakenin regard to future investmentsunder a separate project that may involve internationalwaterways, the terms of reference for such studies will includeexamnination of potentialriparian issues, in accordancewith OD 7.5, para. 8 (b).
6.32 Finally, a review of known internationalagreements or arrangementsthat exist between Armenia and other riparians on the sharing of internationalwaters that might be affectedby this project hasshown that none of these agreementswould require notificationfor the activitiescontemplated by this project. VII. AGREEMENTS REACHED IN NEGOTIATIONS
7.1 During negotiationsthe following agreementswere reached:
(a) collection of water charges to cover operation and maintenance costs will increase accordingto the schedule proposed in para. 4.17;
(b) procurementprocedures will be appliedin accordancewith the Bank and IDA guidelines and in accordancewith conditionsstipulated in paras. 4.27 to 4.36.
(c) disbursementprocedures will follow the arrangementsdescribed in paras. 4.38 to 4.41;
(d) a special accountwill be establishedand operatedas described in para. 4.40;
(e) agreement will be reached prior to every fiscal year, but not later than October 31 of each year, on an O&M Government budget and the extent of IDA disbursementsfor incrementalO&M as described in para. 4.41;
(f) the Government will establish a PIU operating along the program described in paras. 5.1-5.10;
(g) a monitoring and evaluation unit will be establishedby December 31, 1995 that will operate along the outlinesdescribed in paras. 5.21-5.25;
(h) accounts and audits of the project will be carried out as outlined in para. 5.26 and audited project accounts for the project be submitted to IDA for review within four month of the end of each fiscal year; and
(i) a mid-term review of the project will be carried out by April 30, 1997 by a joint IDA and MOA review team. The review will be timed toward the end of the second year of the project implementation,as mentioned in para. 5.28;
7.2 A condition for effectivenessof the proposed Credit will be the establishmentof a PIU with an adequatenumber of suitablyqualified staff as mentionedin para. 5.11.
7.3 Subject to the above assurancesand conditions, the project will be suitable for an IDA credit of US $43.0 million made to the Governmentof the Republic of Armenia, at the IDA standard terms, including35 years' maturity and 10 years' grace period for repayments.
ANNEX 1: STATISTICAL ANNEX
LIST OF TABLES
Table 1. ConveyanceSystems
Table 2. Rehabilitationof Pumping Schemes
Table 3. Tubewell Rehabilitation
Table 4. Rehabilitationof Storage Dam Schemes
Table 5. Water Management Pilots and Field Works
Table 6. Contribution to Operation and Maintenance
Table 7. Technical Assistance
Table 8. Project ImplementationUnit
Table 9. Project Cost Summary
Table 10. Project Components by Year-Investment/Recurrent Costs
Table 11. ExpenditureAccounts by Years-Base Costs
Table 12. ExpenditureAccounts by Components-Base Costs
Table 13. Expenditure Accounts Breakdown
Table 14. Cost/BenefitAnalysis - eA IRRITION EIU,UTfATION PRJC r
TA 1, Cogmac Sdhs USs~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~e.
Paurneteis [in %I * ~~~~~~Phy. Quwntls Uni BaseCost Cond. For. Gross Uni loss lose tso1 11op Total coe 19tr 11s98s 199o 113 Tolal Rate Etch. Tax RPae L knvhuawndCosts A. Coneance Sdcms la 1. ShIak 20.0 70,0 0.0 IV-LC KM 0.9 1.8 2.1 1.2 6.0 6.3 5.7 11.3 13.2 7.6 3705 20.0 700 0.0 IV-CC KM 0.1 0.3 03 0.2 0.9 21.5 2.9 5.8 6.e 39 194 IV-AO KM 0.0 0.1 0.1 P.0 0.2 9.07 0.3 0.6 0.7 0.4 20 20.0 *- 70.0 0.0 SubteolMia Cana 6.9 17.7 20.7 11.6 59.1 Cana b. Secondary 20.0 70 0 0.0 V-LC KM 0.9 1.8 2.1 1.2 5.9 5.24 4.6 9.3 10.8 6.2 309 KM 0. 1.6 1e 1.0 5.2 2.64 2.2 4.4 5.2 30 14.6 200 700 0.o VI-C 20.0 70.0 0.0 VI-CC Cl 2.6 5.3 6.2 3.5 17.6 7.23 19.1 36.2 445 254 127.2 Subtoalaseesda" CMan 25.9 51.9 80.5 34.6 1729 200 700 0.0 c. TwdbyCank KM 25.1 50.1 56.5 43.4 167.0 2.3 57.6 115.2 134.4 76.6 364.1 g. ofabRplc.1Prsure PII. 430 20.0 70.0 0.0 v-.s.p tr KM 0.1 0.1 0.1 0.1 0.4 107.6 6.5 12.9 15.1 8.6 200 70.0 00 VW-SP-Pp" KM 1.? 3.3 3.9 2.2 11.0 21 34.7 69.3 80.9 46.2 231.0 20.0 700 0.0 VNACPPip 9 5.P 30.9 36.1 2PA 103.1 6. 102.1 204.1 2362 1361 660.5 SubtotalReabfh*Mlace of PesuwePipe 143.2 2066. 334.1 190.9 054.5 SU lli93 2! 412 5497 111470
2.Tdl a. MUSCana 20.0 70.0 0.0 *-LC MA 4.2 6.4 9.8 P 26.0 9.6 41.2 62.3 96.0 649 274.4 b. SecondawyCana 200 700 00 VU KM 3.3 0.5 7.0 A.4 21.8 5.24 17.1 34.3 40.0 22.8 114.2 20.0 700 0.0 Vt-LC KM 6.3 126 14.7 p.4 42.0 2.84 17.9 36.6 41.7 23.9 119.3 20L0 700 0.0 V-CC KM 3.6 7.3 6.5 4.9 24.3 11.51 42.0 3.9 97.9 55.9 279.7 9 20.0 70.0 0.0 VI-cC KM 10.5 20.9 24.4 13. 66.7 7.23 75.0 151.2 175.4 100. 5039 152.6 30.1 356.0 203.4 1.017.1 SuMtotalSecOndary Canad 70.0 0.0 cYaTeay CalS KIU 36.7 7313 65.5 4JO 244.4 2.3 84.3 168.6 195.7 112.4 562.1 20.0 d. Rstsabfitsplac Praeas PIpe 20.0 70.0 . 0.0 VI-SP PIp KM 1.7 3.4 4.0 2.3 11.3 21 35.6 71.2 63.1 47.5 237.3 a~Ii2.uKotalhTg ma 0L2M fUL 12L f01
a. MomnCandl 20.0 70.0 00 IV-LC kln 0.4 0.6 1.0 0.0 2.8 6.3 2.0 5.3 6.2 3.5 17.6 06 20.0 70.0 0.0 I-A() km 0.C 0.0 0.0° 9p 0.1 6.22 0.1 0.2 0.2 0.1 SubloaflMain Cana 2.7 5.5 6.4 3.7 16.3 223.2 20.0 70.0 0.0 b. T Canl bn 14.0 27.9 32.6 0.0 93.0 24 33.5 67.0 76.1 44.6 PIp C. RehamleplacePros... 200 700 00 V.SP P kmw 0.0 1.7 1.9 1.1 5.5 107.6 66.6 177.5 207.1 118.4 591.6 0.6 1.6 1.8 1.0 5.2 21 16.4 32.6 38.2 21.6 109.2 200 70L0 0.0 A VN-SPPw ,km 20.0 70.0 0.0 VWACPPip kin 7.4 14.7 17.2 jp 49.0 6.699 49.2 96.5 114.9 65.7 3283 154.4 306.6 360.2 205.9 1.029.3 Subtoa Reabfupc MAU MU AHi UL 10
z 2- Parmelers onInsl Pity. Ouuleles UnN BaseCost Cont. For. Gross UnIt le5 14 6.. 1997 1993 TOMal Cost 131s 191 Illy 9911 Told- Rate Each. Tax Rage 4. Aunf-Sharnlam : a Main Caal I-LC AKl 1.9 36 4.4 Z5 12.6 11.9 22.5 450 52.5 300 149.9 20.0 70.0 0o0 N-LC KM 1.0 2.1 2.4 1.4 6.9 9.5 9.8 19.7 22.9 13.1 65.8 200 700 00 _ I-AG KM 0.1 0.2 0.2 0.1 0.5 6.22 0.5 0.9 1.1 06 3.1 20.0 70.0 0.0 h. Sulaat Main Cal 32.8 65.6 76.5 43.7 218.6 b. Sconday ConIa I-LC KM1 3.5 7.0 8.2 4.7 23.3 9.79 34.2 68.4 79.8 45.6 228.1 200 700 0.0 II-LC KMl 1.1 2.1 2.5 1.4 7.0 9.79 10.3 20.6 24.0 13.7 68.5 20.0 70.0 00 V-LC KM 1.7 3.5 40 2.3 11.5 5.24 9.0 1801 . 21.1 12.1 60.3 200 700 0.0 VI-CC KM 0.6 1.7 1.9 1.1 5.5 7.2 59 11.9 13 9 7.9 39.6 20.0 700 0.0 Sulotat Seonday C1a 59.5 118.9 136.8 79.3 396.5 C.TutbCans KMA 51.5 102.9 120.1 068 343.0 2.3 118.3 236.7 276.1 157.8 768.9 20.0 70.0 0.0 d. Rd RaMepaaPmewe Pipe U-SPPI K.A 0.4 0.8 0.9 0.5 2.5 165.3 62.0 124.0 144.0 82.7 413.3 200 70.0 00 VN-SPPip KM 10.5 21.1 24.6 14.0 70.2 21.6 227.4 454.9 530.7 303.3 1,516.3 20.0 70.0 0.0 UIACP Plp KM 24.6 49.1 57.3 32.8 163.8 6.6 162.2 324.3 378.4 216.2 1,081.1 20.0 70.0 0.0 S* Rsbal_uRplcdoW Presar PI 451.6 903.2 1,063.7 602.1 3,010.7 SubtotalAnarz i HU22 1324441545- 1 2 11 6.Low taidan a. Mai Canw Ut-LC KM 0.3 0.6 0.7 0.4 2.0 9.6 2.9 5.9 6.9 3.9 19.6 200 70.0 0.0 V-cc KM 1.5 3.0 3.5 2.0 10.0 21.5 32.3 64.S 75.3 430 215.0 20.0 70.0 0.0 subIoI mainCana 35.2 70.4 82.1 46.9 234.6 b. Secondwy Canl U-CC KlU 2.5 5.0 5.9 3.4 16.8 24.08 60.7 121.4 141.6 80.9 404.5 20.0 700 o0 v-cc KM 11.0 22.1 2S.8 14.7 73.6 11.51 127.1 254.1 296.5 169.4 847.1 20.0 700 0.0 Vt-cc KM 8.1 16.2 16.9 10.8 54.0 7.23 58.6 117.1 1366 78.1 390.4 200 70.0 0.0 SuboMal Secondawy Canad 246.3 492.6 574.7 326.4 1,642.1 c. Ted"r Cnls KMA 6.9 13.6 16.1 9.2 46.0 2.3 15.9 31.7 37.0 21.2 105.8 20.0 70.0 0.0 d. Rddllec riem Pip SSPPk" IAKM 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 00. 200 0.0 0.0
1. Octndoerla ILMaIn Canal intasCuat KM 0.6 1.2 1.4 0.8 4.0 65 39.0 78.0 91.0 52.0 260.0 20.0 70.0 0. N1-LC KM 2.3 4.7 5.5 31 15.6 9.8 22.9 45.9 535 30.6 152.9 20.0 700 0.0 n-cc KM 3.6 7.2 6.4 4.8 24.0 24.1 06.8 173.5 202.4 115.7 576.4 20.0 70.0 0.0 SuMel Mai CnSal 146.7 297.4 346.9 19.3 991.3 bhSwAndsy Canl v-cc KM 3.3 6.6 7.7 4.4 22.0 11.51 38.0 76.0 88.6 506. 253.2 20.0 70.0 0.0 vI-cc K1 6.6 17.1 20.0 11.4 57.0 7.23 61. 123.6 144.2 824 412.1 20.0 70.0 0.0 Suod SseandwayCanal 99.8 199.6 232.0 133.1 665.3 c.Taun Cad K 32.4 64.8 75.6 432 2160 2.3 74.5 149.0 1739 99.4 49.8 20.0 70.0 0.0 4LFdu6"ph FrNm POP$" vv-sp P" *A 0. 0.0 0.0 00 0.0 0.0 0.0 0.0 0.0 0.0 20.0 0.0 0.0
||bll Od_|h_ = 0 § l o 4s7 2!1 il4~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~f ..z iS 52 t~~u nwrP ders p s
QsOtMdNks tinE Bass Cod Cond. For. Glass Uln 11 136.. 137 131M Tdir Cod 1U15 1N0 1117 1191 Total Rate Each. Tan Rate 7. Aitasba a. Main Cand *-LC KM4 0.5 1.0 .1 0.6 3.2 9.8 4.7 9.4 11.o 6.3 31.4 200 700 00 *-CC KM 2.1 4.2 4.9 2.8 14.1 24.1 51.0 101.9 11.9 68.0 339L8 20.0 700 0.0 IV-cc "A 0.2 0.3 0.4 0.2 1.0 21.5 3.2 6.5 75 4.3 21.5 20.0 70 0 0.0 v-cc KM 0.2 0.5 0.5 0.3 1.5 I.S 2.6 5.2 6.0 3.5 17.3 20.0 700 0.0 IV-AO KM 00 0.0 0o0 0.0 0.1 9.87 0.1 0.3 03 02 1.0 20.0 70.0 0.0 Subtdtal Us Canul 61.6 123.3 143.8 82.2 4109 b. Socndwy Canl n-LC Ko o0 1.2 1.4 0.8 4.0 9.79 5.9 II.? . 13.7 7.8 392 200 700 0O IV-LC KM 08. I.5 1.8 1.0 5.0 6.25 4.7 9.4 10.9 6.3 31.3 200 700 0.0 V-LC KM 0.5 09 .1 p.6 3.1 5.24 2.4 4.9 5.7 3.2 16.2 20.0 700 00 VI-LC KM 3.1 6.2 7.3 4.2 20.8 2.64 8.9 17.7 20.1 11.8 591 20.0 700 0.0 V-CC KMA 1.2 2.4 2.8 .6 8.1 7.23 8.8 178 20.5 11.7 586 20.0 70.0 0.0 Subtotal Secidary Cana 30.6 61.3 71.5 409 204.3 c. TediaryCanI KM 39.6 79.7 93.0 51.1 265.6 2.3 91.6 183.3 213.8 122.2 6109 20.0 70.0 0.0 dLRehbabReplac Pressure PIpe 0.0 V.SPP1p KM 08. 1.5 1.8 1.0 5.0 107.6 80.7 161.4 1883 1076 53S0 20 0 70.0 VN-SPPe KwM 1.4 2.7 3.2 1.8 9.0 21.6 29.2 58.3 68.0 38.9 194.4 20.0 700 00 VIIACPIpe KM 10.7 21.3 24.9 14.2 71.0 6.8 70.3 140.0 164.0 93.7 d686 20.0 70.0 00 Sulal RealiNtbeplacePrearme Pip 160.2 360.3 420.4 240.2 1201.0
a. Main Can v-cc KM 1.2 2.4 2. 1.6 8.0 11.5 13.8 27.6 32.2 18.4 92.0 200 70-0 00 b. Seonda"y Can VI-Cc KM 3.6 7.5 8.8 5.0 25.0 7.23 27.1 54.2 63.3 36.2 1808 20.0 70.0 0.0 c.Teuluy Canb KM 5.4 10.8 12.6 7.2 35.0 23 12.4 24.8 29.0 16. 82.6 20.0 700 0.0 dL RebaldReaci Preseve Pipe 00 b-SP KM 1.1 2.2 2.5 1.4 7.2 165.3 178.5 357.0 416.6 238.0 1,190.2 20.0 700 v-sPPFip KM 0.3 06 0.7 D4 2.0 107.6 32.3 64. 75.3 43.0 215.2 20.0 70.0 0o Vb SP Pie KM 0.9 1.9 2.2 1.3 6.3 21 19.8 39.7 46.3 26.5 132.3 20.0 70.0 0.0 VACP P"e KMA 3.9 7.6 9.1 5.2 26.0 o.e99 26.1 52.3 61. 34.8 174.2 20.0 700 0.0 SubtotalRahdalle Presure p 256.0 513.6 599.1 342.4 1,711.8 *. On -lrh kdv s. onbwokWadnedwe ha 17.3 34 5 40.3 23.0 115.0 2.4 41.4 82.8 96.6 55.2 276. 20.0 70.0 0.0 Eisie ha 8.3 16.5 19.3 11.0 65.0 4.04 33.3 606.7 77. 44.4 222.2 20.0 70.0 0.0 Subtotl 04tum baslrduife 74.7 149.5 174.4 99.6 498.2 SlI>z^llinCI~~~~~~ 3 zz8 m@9 &9a0S11 mi
2IlA AUKA 2 1 I[KIAZ1 is Al codae humf coed *b I ARMWA IRRIGATIONREHABLITATION PROJECT
Table 2: RehabilUtllon of Punmina Schers (US$otoO Pily. Quent ies Unit Base Cost Cont. For. Gioss UnIt 11 l1336 133 13337 Tolat Cost 1996 136 1i397 1393 Total Rale Escim. Tax Rate 1. nvestmenl Costs A. SteelPiessue Pipes Veotan m 906.75 503.75 503.75 100.75 2,015 0.063 57.1 31.7 31.7 6.3 1269 200 900 00 Azlzbekov m 1.260 700 700 140 2.800 0.0560 706 39.2 39.2 768 156. 200 00 0 a 0 Mkchian-SdemlI m 6,100 4,500 4,500 900 18.000 0.285 2,306.5 1,282.5 1,282.5 2565 5,1300 200 S00 00 900 00 iacNan-Schuinell m 789.3 438.5 436.5 87.7 1.754 0.278 219.4 121.9 121.9 24.4 487.6 200 900 00 Aatashal-Schenel im 5,580 3,100 3,100 .620 12,400 0.188 1,049.0 582.0 582.8 116.6 2.331.2 20.0 0.0 An"-Sc_m1 N m 1,530 650 650 t7t 3.400 0.186 267.6 ¶59.8 15986 32.0 639.2 20.0 90.0 B.Mbtldl Presumepgpo1 3,992.3 2,217.9 2,217.9 443.6 6.671.8
1. P _mtLUnKs 00 Vo,adn no 1.35 0.75 0.75 0.15 3 20 27.0 15.0 15.0 30 60.0 20.0 1000 1000 00 M,chm . Schde I no 4.05 2.25 2.25 0.45 9 25 101.3 56.3 56.3 11.3 m2o 200 MUdtan-Schenafl no 2.7 1.5 1.5 0.3 6 25 67.5 37.5 37.S 7.5 150.0 200 1000 00 00 Aml.-.SdwnoI no 1.J I 1 0.2 4 25 45.0 25.0 25.0 5.0 100.0 20.0 1000 00 Ashet.SchulteI no 1.35 0.75 0.75 0.15 3 18 24.3 13.5 13.5 2.7 54.0 20.0 1000 tb.m. Putnpg UnIts 265.1 147.3 147.3 29.5 589.0
TOTAL 4,217.3 2,361.2 2,361.2 473.6 93468.
_ z ARMENLA
NIR AIOIINREHA- LITATIONPROJCT
TAbb 3. TubA RehabI l
Phy. Quannites tUn Base Cost Cont. For. Gioss UnN 1991 1399 1991 1393 Total Cost 1933 1996 133r 133 Tdal Rate Each. Tax Rat L nvlmes l Costs A. Tubeall RebabUUallon NowBaishes unI 25 50 50 25 150 20 500.0 1,0Doo 1,00o 5000 3.0000 ISO 000 00 Rd.hlled oehakn unl 50 100 100 50 300 5 250.0 S000 5000 2500 1500.0 150 900 00 New Pumpsels ,uI 50 75 75 50 250 4 2000 300.0 3000 200.0 1.0000 ISO 900 0 0 Sparnpts larRusslnnPs4selaS uni 60 140 140 60 4C0 1 60o 140.0 1400 600 4000 IS.0 D00 00 RehIbUu8onofRus nPsumnPss unwl 60 140 140 60 400 1 600 140.0 1400 600 4000 150 D00 00 tbnIaanofPumpeds uil 125 200 200 125 650 1 125.0 200.0 200.0 125.0 650.0 150 900 00
mW iflU LiEU LULl luLl LU A_
z z ARMEN
IRRIOATIONREHABILIATION PROJECT
TaMe4: RhabIllaon of Slorme DwnSchames
-Parunetefs fin %Al Pliy. Quantnies Unitl Base Cost Cont. For. Gross UnU I96 1194 1937 1991 Total Cost 1335 1331 1131 1591 Total Rale Esch. Tax Rat L Inveslnma Costs A. RepakiRshabol Storape Scheme 1.Apwm Dum a.balgaton FacUkbs Sa"Owe no 0.5 0.5 0.5 05 2.0 115 57.5 57.5 57.5 57.5 2300 200 100.0 00 A4uslmelisoates no 0.5 0.5 0.5 0.5 2.0 10 5.0 50 5.0 5.0 200 200 0 0 o0 Cen cdsan"-hAemdiaid pipe no 0.3 0.3 0.3 0.3 1.0 10 2.5 25 25 25 IO0 20.0 0 0o0 CoeoelcMukA u 4-amebhg cum 437.5 437.5 437.5 437.5 1.750.0 0.017 7.2 7.2 7.2 7.2 28.9 200 0.0 00 Cencxdecmndu-rb ikcamentsledl Ion 62.5 62.5 62.5 62.5 250.0 0.163 10.2 10.2 102 10.2 406 20.0 1000 00 ILabor Wm 75.0 75.0 75.0 75.0 300.0 0.01 0.6 0.8 0.8 0 8 3 0 200 0 0 00 Tianrsi tm 875.0 675.0 675.0 875.0 3,500.0 0.0 0 0 O0 0.0 0.2 20.0 75.0 00 SubtotaltIdgn Fallbs 63.2 63.2 63.2 63 2 332.7 b. SerIce Spitway Concabt eum 400.0 400.0 400.0 400.0 1,600.0 0.017 66 6.6 6.6 66 264 200 00 00 Rhnmucmntstee Io 40.0 40.0 40.0 40.0 1600 0.163 6.5 6.5 6.S 6.5 26 0 200 100.0 0o Labr NW 5.0 5.0 5.0 5.0 20.0 0.01 0.1 0.1 0.1 0.1 02 200 0.0 00 Teanspea bnlkm 132W0.0 13,200.0 13,200.0 13,200.0 52,600.0 0.7 0.i 0.7 0.7 26 200 75.0 0o SuboalaServic SpOway 13.o 13.8 U38 13.8 55.2 a. EmergenySpOiway Cancil cuam 2,062.5 2,062.5 2,062.5 2,062.5 6,250.0 0.017 34.0 34.0 340 340 136.1 200 00 00 Rdacanc nseded Ion 206.3 206.3 206.3 206.3 825.0 0.163 33.5 335 335 335 134.1 200 1000 00 FMmdi auam 2031.3 2,,331.3 2,031.3 2,031.3 6,125.0 0.3 03 0.3 0.3 1.2 200 0.0 00 Ptecabyer cum 112.5 112.5 112.5 112.5 450.0 0.017 1.9 t.9 1.9 1.9 74 200 0.0 00 Lao mu 62.5 62.5 62.5 62.5 250.0 0.01 0.6 06 0.6 08 2 5 20.0 0 0 0 0 Tanpoet nlkm 106,250.0 106,250.0 106,250.0 106,250.0 425,000.0 5.3 5.3 5.3 5.3 21.3 20.0 75.0 0.0 Sutdal Emgen Sply 75.6 75.6 75.6 75.6 302.6 d. bmulplgatns Pidheeslens I 1.3 1.3 1.3 1.3 5.0 0.0 0.0 0.0 ScabmodstirI b 1.3 1.3 1.3 1.3 5.0 0 0 0.0 0.0 Bor_wis ro 3.0 3.0 3.0 3.0 12.0 0.3 0.9 0.9 09 0.9 3.6 0.0. 'o.o 0.0 L,tabW s" ,yths no 3.0 3.0 3.0 3.0 12.0 0.05 0.2 0.2 0.2 0.2 0.6 0.0 0.0 0.0 Sublold Ihvd"ln 3.6 3.o 3.6 3.6 14.2 L. MOnNtodng sunoap _muts no 4.0 4.0 4.0 4.0 16.0 0.9 3.6 3.6 3.6 36 14.4 0.0 0.0 00 Dawoggplcnmdte Po 0.3 0.3 0.3 Q.3 1.0 5 1.3 1.3 1.3 1.3 5.0 0.0 100.0 0.0 Sutol monulng 4.9 4.9 4.9 4.9 19.4
BuMfia Am Onfiu m mi ui1
z> *2 e Parameets oIn% Phi. ulanumlis UnIN lBas Cost Cod. For. Gross UnL 13312 1331 1331 j331 Total cost 15g3 1396 fogy 13oe Total Rafe Each.Tas Rat 2. Kmnoul Dun a.lnlgllo FacIfIlesC Va. v(Si400imFl no 0.5 0.5 05 0.5 2.0 17.5 86 a.0 880 8.a 35.0 200 1000 0.0 Valn(SO mm) no 0.5 0.5 0.5 0.5 2.0 75. 308 3.8 38 3.8 150 200 1000 00 Lua" mw 10.0 too ' 10.0 10.0 40.0 0,01 0.1 0.C 0.1 0.1 04 200 0o0 00 Teanspeut ton4ran 1.0000 1.000 1,000o.0 ,000.0 4.000.0 0.1 0.1 0.1 01 02 200 660 00 Subtowti,b'tau, Faalebs 12.7 12.7 12.7 12.7 S06 b. Eatunhnn_ . Dowaslig berm E euockl au m 300.0 300.0 300.0 300.0 1.200.0 * 0.0 0.0 0.0 0.0 0 2 200 0.0 o 0 Labo nw 2.5 2.5 2.5 2.5 10.0 0.01 0.0 0.0 0.0 0.0 0 1 200 00 00 Teawtl bnhmgih 5,500.0 55Q0.0 5,500. 5.500.0 225000.0 0.3 0.3 0.3 0.3 1.1 200 75.0 00 Subliot Ennbmk.dv. Downastream t 03 03 03 03 1.4 c. Embnannmf- Damaest Cancrote aum 50.0 50.0 50.0 50.0 200.0 0.017 0.8 0.8 0.8 08 3.3 200 0 0 0 0 Labo 1m 1.3 1.3 1.3 1.3 50 0.01 0.0 0.0 00 0.0 0.1 200 100.0 00 TetWl nm&. 1.67.5 1617.5 1.687.5 1.687.5 6.75.0 0.1 0.1 0.1 01 0.3 20.0 750 00 Subtoa E*aa*un - Dun crest 09 09 09 0.9 3.1 d. ServceSpliaFy Concrete aum 50.0 50.0 50.0 50.0 200.0 0.017 0.8 0.6 0.8 0 a 3o3 200 0.0 0.0 R_ocew_dtl lo 5.0 5.0 5.0 5.0 20.0 0.163 0.8 0.8 08 08. 3.3 20.0 1000 00 LabWr - 6.0 5.0 5.0 5.0 20.0 0.01 0.1 0.1 0.1 0.1 0.2 20.0 0.0 00 Tianpot Im 1687.5 1,687.5 1,687.5 1.6a7.5 6,750.0 0.1 0.1 0.1 0.1 0.3 20.0 750 00 Sudali svk SpImumy 1.8 1.8 1.80 .8 7.1 *. Emrgy 3P.llw0y Concfae cuaim 750.0 750.0 750.0 750.0 3,000.0 0.017 12.4 12.4 12.4 12.4 495 200 00 00 Renlfoceeddeel ton 75.0 75.0 75.0 75.0 300.0 0.163 12.2 12.2 12.2 12.2 480 20.0 1000 00 FMmradhW cam 312.5 312.5 312.5 312.5 1,250.0 00 00 00 00 02 200 00 00 Peol-tclw,ysr cam 27.5 27.5 27.5 27.5 1100 0.017 0.5 0 0.5 o.s 1.0 200 o0 0o0 LAbr am 25.0 25.0 25.0 25.0 100.0 0.01 0.3 0.3 0.3 0.3 10. 200 0o0 00 TrFaned km*m 31,2S0.0 31,250.0 31,250.0 31,250.0 125,000.0 1.6 1.6 1.6 1.6 6.3 20.0 75.0 0.0 subta EmergeySplUwy 26.9 26.9 26.9 26.9 107.5 L InvesUgd fas P1,0l01 keehS _ I 1.3. 1.3 1.3 1.3 5.0 0.0 0.0 0.0 Sce mmdl 1his 1 3 1.3 1.3 1.3 5.0 00 00 00 Tne e 2.5 25 2.5 2.5 10.0 0.0 1000 00 Ewmen ' no 0.3 0.3 0.3 0.3 1.0 1 0.3 0.3 0.3 0.3 1.0 0.0 100. 0.0 bacdmn Ir no 0.3 0.3 0.3 0.3 1.0 I 0.3 0.3 0.3 0.3 1.0 0.0 100.0 0 0 hdlma no 5.3 5.3 5.3 5.3 21.0 0.3 1.6 1.6 1.6 1.6 6.3 00 0.0 0.0 tab _s uImpkI no 3.5 3.5 3.5 3.5 14.0 0.06 0.2 0.2 0.2 0.2 0.7 0.0 00 0.0 bSlloWhwsUg 7.3 7.3 7.3 7.3 29.0 g. uouhminl s a sImKktS C.O 56.0 6. 5. 5.0 20.0 0.9 4.5 4.5 4.5 4.5 10.0 0.0 0.0 0.0 Diahgpls3uWrU tao 0.3 0.3 0.3 0.3 1.0 5 1.3 1.3 1.3 1.3 5.0 0.0 100.0 0.0 |||bidS lo_m 56.0 56. 5.6 5.0 23.0 ffi-~~~~~~~~~~ H HA MA HA inn
lu tu tu tu nu~~~~~~~~~~~~~h. .3. Pmarneters(In %I PillS. q_eill. Unh Base Cod Corl. For. Gross URN 1335 11S 1137 1919 Total Cost 1911 1393 1397 1333 Toal Rate Each. Tax Rat v
. hip Fae_ . Con" p ampip no 0.3 0.3 3 0.3 1.0 1.5 0.4 0.4 0.4 0.4 1.S 20.0 0.0 0.0 TM"" su_m Whiv 1s 2.5 2.5 2.5 2.5 100 200 0 0 0.0 *Imgduy m 5.0 5.0 5.0 5.0 20.0 0.175 0.9 0.9 0.9 0.9 35 20.0 0.0 00 ; NowP%m kn 9.0 9.0 9.0 9.0 36.0 0.25 2.3 2.3 2.3 23 90 20.0 100.0 00 Cedhills sq. 9303 93.8 93.3 93.6 375.0 0.03 2.3 2.8 2. 23 11.3 20.0 100.0 00 LAW NW 37.5 37.5 37.5 37.5 150.0 0.01 0.4 0.4 0.4 04 1.5 20.0 0.0 0.0 Trumet bheIu 750.0 750.0 750.0 7.0A 3.000.0 0.0 0.0 0 0 0.0 0.2 20.0 75.0 0.0 Bubo", FaCUss - Con1 9.2 9.2 9.2 9.2 36.9 LkIlpn FasMes .-Valnve Vd(S00m(m no 0.3 0.3 0.3 0.3 1.0 7.5 1.0 10 1.0 1.9 7.5 200 100.0 0.0 Vi.(I0mq , no 0.5 05 0.5 0.5 2.0 12.25 6.1 0.1 6.1 6.1 24.5 20.0 100.0 00 Ldzer. aN 7.5 75 7.5 7.5 30.0 0.01 0.1 0.1 0.1 0.1 0.3 20.0 0.0 0.0 Truieput ho.br 750.0 750.0 750.0 750.0 3,000.0 0.0 0.0 0.0 00 0.2 20.0 75.0 0 0 a*lW kIpln Faclikles.Vdveus .. 1 0.1 8.1 3.1 32.5 c. Irktm FwaliNks- Tower Cmmdewan cum 350.0 350. 350.0 350.0 1,400.0 0017 65 5.3 5.3 5.3 23.1 200 o0 00 Law a 10.0 10.3 13.3 18.3 75.0 0.01 0.2 0.2 0 2 0.2 0 3 20.0 0.0 00 lualod bi Fa slis- Towr 6.0 6.0 6.0 6.0 239 uLCivt d dheChnnl SpIllwal CuKial cum 350.0 350.0 350.0 350.0 1,400.0 0.017 5.0 5.0 5.0 5.0 23.1 20.0 0.0 00 Rdelcm_ui duel bn 35.0 35.0 35.0 35.0 140.0 0.163 5.7 5.7 5.7 5.7 22 0 200 100.0 0 0 Lawd a 12.5 125 12.5 1zS 50.0 0.01 0.1 0.1 0.1 0.1 DS 200 0.0 00 T _Mu brh 11.3750 11,675S0 11,075.0 1I.575.0 47.5D0.0 0.6 0.6 0.6 0.6 2.4 200 75.0 0.0 &uabl Cmllv m_d mCh_ *_t 1W22 12.2 12.2 12.2 48.7
Prddpbma I_1.3 Is 1.3 1.3 1.3 5.0 0.0 0.0 0.0 -. _I _e.t 1 1.3 1.3 1.3 1.3 50 0.0 0.0 O0 a,hdo no 5.3 5.3 5.3 5.3 21.0 0.3 1.6 1.6 1.6 1.6 6.3 0.0 0.0 0 0 Lduhbsbgaaqim no 3.0 3. 3.0 3.0 12.0 0.05 0.2 0.2 0.2 0.2 0.6 0.0 0.0 0.0 Sdi Nvedlello 4.2 4.2 4.2 4.2 160. L MOaNmIm Uu-p I _mulss or 4.3 4-3 4l3 4.3 17.0 0.9 3.8 3.6 3.0 3.o 15.3 0.0 0.0 0.0 D0igupI m I no 0.3 0.3 0.3 0.3 1.0 5 1.3 1.3 1.3 1.3 5.0 0.0 100.0 0.0 3a||| *leld Sado5.1 5.1 5.1 5.l 20.3
.~~~~~~~~~~~~~~
i z
'4 .4 Paismelers (In %} Phy. Quantil_ UnU BaseCost Cont. For. Gross URN 1115 1521 1117 1333 Total Cosd 111 19916 1317 1531 Total Rate Each. Tas Rat O 4. SanakbpksnDam a. Ilnilla FKIIs - Con"uIt Rqpokd eld * b 0.5 0.5 0.5 0.5 2.0 20.0 0.0 0.0 L NW 2.5 2.5 2.5 2.5 10.0 0.006. 00 00 0.0 00 0.1 20.0 0.0 0.0 Sutml.wa p FnI*es - Cori 0.5 0.5 0.5 OS 2.1 b. kailpi Facliies -Valve Van POOmm) to 05 0.5 0.5 0.5 20 7 35 35 35 35 140 200 100.0 00 Vim(SOWmM) no 05 05 0.5 0.5 2.0 7.5 3.8 38 3.8 3.6 ISO 200 1000 0.0 LOWn nm 10.0 10.0 10.0 10.0 40.0 0.01 0.1 0.1 0.1 0.1 04 20.0 00 0.0 Tunnu bnfh 1.000.0 100O.0 1.000.0 1003.0 4.000.0 0.1 0.1 0.1 0.1 02 20.0 75.0 0.0 IMai kul,an FIEl.. - Valvs 7.4 7.4 7.4 7.4 29.6 a. kduih fadINlus- kWhela wea Ceraads cum 75.0 75.0 75.0 75.0 30.0 0.017 1.2 1.2 1.2 1.2 50 200 0.0 0.0 L1, . m 2.5 2.5 2.5 2.5 10.0 *0.01 0.0 0.0 00 00 0.1 20.0 0.0 0.0 8&6s kdal.m Fmlltl"e- hake o 1.3 1.3 1.3 1.3 5.1 d. E _AkWAmo.D winkeis_ beM Eaeh*d cuirm 137.5 17.5 137.5 137.5 650.0 0.017 2.3 2.3 2.3 2.3 9.1 200 00 00 Laiw - 2.5 2.5 2.5 2.5 10.0 0.01 00 0.0 00 00 0.1 200 00 00 T..rupo b_nm 12,500.0 12.5Q0 12,500.0 12.5W0.0 50000.0 06 06 08t of 2.5 20.0 75.0 00 SubMOSlgho D.gmg beers 2.9 2.9 2.9 2.9 11.7 IL. v .e .I. . Comds =iM 137.5 137.5 137.5 1375 550.0 0.017 2.3 2.3 23 23 9.1 20.0 00 00 Rebhocuemhd dad 13. 1Sa 13.6 13.6 55.0 0.163 2.2 2.2 2.2 2.2 6.9 200 1000 00 E_U cum 3125 312.5 312.5 312.5 1,250.0 O 0.0 0.0 0.0 0.1 20.0 00 0.0 Lalf - 10.0 10.0 10.0 IO 40.0 0.01 0.1 0.1 01 01 0.4 200 0.0 00 Tl_.p.e hfni 10,625. 10,S25.61 IO25010 10,625. 42,500.0 0.5 0.5 05 0.5 2.1 20,0 75.0 00 |ub llpll 5llscS.2 5.2 5.2 5.2 20.6 L.Eaanee qStIw 4aV Ccde cumsiooa 625.0 65.O 625.0 62S.0 2,500 0.017 10.3 10.3 10.3 10.3 41.3 20.0 0.0 0.0 Rehlmmuiuluod LDn 62.5 02.5 6S2 62A 250.0 0.163 10.2 10.2 10.2 102 406 20.0 1000 00 Fumdudd uim 275.0 275. 275.0 275.0 1,10J 0.0 00 00 0.0 0.2 200 00 00 PsdhehSotjef aim 37.5 37.5 375 37.5 150.0 0.017 0.6 0.6 0.6 01 2.5 200 00 00 Laker -, 25.0 A5. 25.0 25.0 IOD O0 0.3 0.3 0.3 0.3 10 20.0 0.0 0.0 'Toapd ha 32500 26250.0 2S,250. 26250.0 106,000.0 1.3 1.3 1.3 1.3 5.3 20.0 75.0 0.0 5G4 d I I SUPO 22.7 22.7 22.7 22.7 90.
P~ .vodp .. Xs.S"ib 1.3 1.3 1.3 1.3 5.0 0.0 0.0 00 lob Nambh"d b 1.3 1.3 1.3 1.3 5.0 00 0.0 0.0 BbeS"*u r 25 2.5 2.5 2. 10.0 0.3 0.6 0. 0.6 08 : 3.0 0.0 0.0 0.0 L u11 s as_ 2.5 2.5 2.5 2.5 10.0 0.05 0.1 0.1 0.1 0.1 05 0.0 0.0 0.0 S.M bw_.e _m 3.4 3.4 3.4 3.4 135 IL _ _ -ef UaM14q " lim eA 2.6 is 2. 2.6 11.0 0.9 25 2.5 2.5 2.5 9.9 0.0 0.0 00 0OigWr Im n0.3 0.3 0.3 0.3 1.0 5 1.3 1.3 1.3 1.3 5.0 0.0 100.0 00 Idbidd MNmUbN 3. 3&7 3.7 ar 14.§ OEANAi dli Ai >U XMTAL EZ -~~~~~~~~~~~~iMRAfhU MA MA 1-1`,1 ARMENIA
IRRIGATIONREHABILITATION PROJECT
TableS. Water Managemnt Pilots and Field Works (US$ 0001 Pararmeters(in %) Phy. Quantitles Uni Base Cost Cont. For. Gross Unit 1996 1996 1997 1993 Total Cost 1996 1936 1997 1993 Total Rate Exch. Tax Rate L hnvesnmntCodsts A. Fldd Works 1. FkId Outlets HeadgatesfrornMainCauI no 35 75 150 110 370 1.2 42.0 90.0 180.0 132.0 444.0 20.0 100.0 0.0 WatrMeswlxtg DMes no 35 75 150 110 370 0.5 17.5 37.5 75.0 55.0 185.0 200 1000 0.0 Temsometers no 150 300 600 450 1,500 0.04 6.0 12.0 240 18.0 60.0 20.0 100 0.0 EatthenDiches I 60.0 160.0 320.0 240.0 800.0 200 1000 0.0 SubtotalFid Outlets 145.5 U0 990 445.0 1,489.0
2. PMl Schmes - GrvIy Headgmtesfrom Moh C no 6 - 6 0.48 2.9 - - 2.9 20.0 100.0 0.0 SacandayOuies Is 0.5 0.7 - - 1.2 20.0 70.0 0.0 W taMeesuriDg mces no 2 4 - - 6 0.5 1.0 2.0 - - 3.0 20.0 100.0 0.0 Ehn Dche0 Is 0.6 0.9 - 1.5 200 100 0.0 Tensknaeters no 200 340 - - 540 0.04 8.0 13.6 - -21.6 200 100.0 0.0 i-creteDhdes br Secory Clu nt 6.0 9.0 - 15.0 20.0 20.0 0.0 Subotgl Pgi Sch_nes - Gmvily 19.0 26.2 - - 45.2
3. PIst S8lunes - Exk*q Sp*dnw MAInVdzM no 1 2 3 0.25 0.3 0.5 0.8 20.0 100.0 0.0 VW"r matemno 1 2 3 0.35 0.4 0.7 - 1.1 20.0 100.0 0.0 Poo PVC ystem 1 2 - - 3 5 5.0 10.0 - - 15.0 20.0 100.0 0.0 Tuulmdws no 20 25 - - 45 0.04 0.8 1.0 - - 1.8 20.0 100.0 0.0 Enm ODkh. h 0.4 0.6 1.0 20.0 10.0 0.0 hiM" Pld Sch_is * Eddh9ingpw 6. 1 - 13.8
S*WA Fisd WAs `1713 336 MA 44A.15U
L Tskucd_ Assisane 1. F_d I_bn lmSpcl sm 6. 4 4 3 17 18 108.0 72.0 72.0 54.0 306.0 20.0 100.0 0.0 c,.mAiyngm nt 12 12 3 3 30 18 216.0 2160 54.0 54.0 540.0 20.0 100.0 0.0 S_ddolFsp 324.0 265.0 12.0 106.0 6460
2.Locad On-Funm enu'e_Amh am 12 12 12 12 48 1.5 180 1.0 10 10 720 0.0 0.0 0.0 Stitat T_ebak*aAslAuc_ 342.0 366.6 1U44 1266 12.8
TOTAL 14305r IILI 2lA1t
A Tosn we stdch m cod h_wIm dots_ tsrus n 2 OwUm- of 2 ARMA
MEN&=0 REUMATION PROJECT
Tdk1 CPSIQdbd to °11 MaNdnc'
Pau leus(in %I Phy. OaatlUn_e _ Unt BaseCodl Cone. For. GCoss thtN 103 196 1407 103 TOdt Ccos 131 1331 1g1 1903 Tali Rate Each. TainRale IL RectwedCodea A. Sdesn b 1.000.0 6000 2000 200.0 2.000.0 0.0 0.0 0.0 U.MalJehsn Supks s 1.500.0 900.0 3O 0 30000 3.0000 200 90.0 0.0
- M DU HU L31
II IRROATIONREH^JfA PROJECT
inm Taiz7:rTeehrAsdUt, fmUmS$i) zp Ca
Parmeters(in %) Phy. quanUils Unt BaseCosl Conl. For. Gross unlk 1615 19" 1?7 1933 TOWa Cod 1955 1936 1337 1931 Total Rale Exch. TaxRate L _ teslmsCosts A. Ig. Agon Equip.S TA gf HighVaY Crp PreiAion 1.s@d Moure Measwg Equiptm for D kslrles T_wro9elera no 100 100 0.3 30.0 * - 300 200 1000 00 PollE ECMw no 60 60 0.1 6.0 6.0 20.0 100.0 0.0 Gypaum no lm*1000 000 0.01 10.0 - - - 10.0 20.0 100.0 0.0 AugwSit (1-3m) no 40 - . 40 0.25 10.0 . 10.0 20.0 100.0 0.0 Suotam Moisu Meaui Equip DItribct 56.0 - - 66.0 L Equa_s hr hd;t f We Mgm_L& 1yokchals ThmOlm_h Reldic lu (TDR) no 1 - - 1 10 10.0 * 10.0 20.0 100.0 0.0 Lyrnuct (saffi 2g)um no 1 - - 1 6060.0 - - 600 200 100.0 00 Tutsulu rSd(050.10 CM) no 16 - - 15 0.3 4.5 , 45 200 1000 0.0 EC 1kip no 2 . . 2 2.5 5.0 5.0 20.0 100.0 0.0 Mhred Thwuomder no 2 - . . 2 2.5 6.0 - * 50 20.0 100.0 0.0 Pod" EC Mist no 2 - 2 0.1 0.2 - 0.2 20.0 100.0 0.0 G lowmBok no IQO - 100 0.01 1.0 1.0 20.0 100.0 0.0 AuwSea (1-3m) no 4 - - 4 0.25 1.0 - . 1.0 20.0 100.0 0.0 Sutot Equip. barIn o War MpiL A Hydrtdulc 86.7 - - 86.7 3 Tctkdal Asdatance Wiobglt mn 2 1 - 3 18 36.018.0 - 54.0 0.0 100.0 0.0 _b*id mmr 2 1 - * 3 18 36.0 18.0 - - 54.0 0.0 1000 0.0 _wmgid artm 2 1 - - 3 18 36.0 18.0 * 54.0 0.0 100.0 00 NMm"HexdbM. nn I 1 2 18 18.0 18.0 - 36.0 0o0 100.0 0.0 _ub'aTecimca Asdstnce 126.0 72.0 - 198.0 Subttalhj 4g Ap. Equip.& TA forHIg Vaa. Crop rdon 268.7 72.0 * 340.7 IL Otw Eapalde Tetdc sdAsace Om bapdh Enghis mo 3 - - . 3 18 54.0 - - 54.0 00 100.0 0.0 m Dei EEr w meW - . 2 18 36.0 - - 36.0 0.0 100.0 0.0 Hdsglal RIo I 1 18 18. - 18.0 0.0 100.0 0.0 te Ppe Casiso _ Speddlid 2 . 2 18 36.0 . - 36.0 0.0 100.0 0.0 Om OCmuclon Egier me 4 - - * 4 18 72.0 - 72.0 0.0 100.0 0.0 medoiE- hfs2 - 2 18 38.0 . . 36.0 0.0 100.0 0.0 ubi dO Ex_b T al As 252.0 - - - 252.0 C. TAfor MauwMm. ad PP of Fassilyell"M Upddsg tPh. . me 12 ' ' 12 18 218.0 * * - 218.0 0.0 1000 0.0 PPN d FmzIy S mI 4 4 4 4 16 18 720 72A0 72.0 72.0 288.0 0.0 100.0 0.0 Subtot TA b MawerPa md11 doF bllwytudy 281.0 72.0 7ZO 720 504.0
TOTL:-I rZ 1ujX XA ns tW6".
.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~1 is * %4 p~~~~~~~~~~~~~~~~~~ (US$in) T 8. PrdS_ b lhll ~~ ~PWNWS(i
Phy. Qumatwes. UnM aMWCost ConL For. Gross Uni 13ff 13#6 1317 1333 Tota Cod 1996 136 1337 1933 Totad Rat Exch. ax Rat L kwestn Coas A. Vddd.. an Eq5omu - - 78.0 20.0 100.0 0.0 VW*im no 3 - - - 3 28 78.0 - 20.0 - - 20.0 20.0 100.0 0.0 C,miiw no 8 - - - 8 2.5 - - 5.0 20.0 100.0 0.0 prklw rno 5 - - - 5 1 5.0 - - 1.5 20.0 100.0 0.0 mMachs no 1 - - - 1 1.5 1.5 - - - 0.6 20.0 100.0 0.0 T _YPWem no 3 - - - 3 02 0.6 - 1.2 - - - 12 20.0 100.0 0.0 FxM0cbtw no I - - - 1 12 0.4 - - 0.4 20.0 100.0 0.0 Tdephan no 4 - - - 4 0.1 - - 10.0 20.0 100.0 0.0 Gema*r no 2 - 2 5 10.0 - - - 116.7 Sub&t Vld.. mid Eq_mst 116.7 -
L. Tchmiel Assisanc 1. Forslg 300.0 - - - 300.0 0.0 100.0 0.0 DWy PraioPtM.uW am 12 - - - 12 25 300.0 - - - 300.0 0.0 100.0 0.0 C o Efggw sm 12 - - - 12 25 25.0 - - 175.0 0.0 100.0 0.0 Pronnmt SpOd 51 6 1 - - 7 25 150.0 150.0 - - - 150.0 0.0 100.0 0.0 P Enghes sam 6 - 6 25 50.0 50.0 50.0 - 150.0 0.0 100.0 0.0 T,ars mo 2 2 2 6 25 50.0 - 1,075.0 Subtotd 950.0 75.0
. Local 2.4 2.4 24 2.4 9.6 0.0 0.0 0.0 Pfapot MW mo 12 12 12 12 48 0.2 1.8 1.8 1.8 1.8 7.2 0.0 0.0 0.0 oDpuy* Pm*ct MwUw m 12 12 12 12 48 0.15 3.6 3.6 3.6 14.4 0.0 0.0 0.0 PbmwgDM Er,ln mao 24 24 24 24 96 0.15 3.6 1.8 1.8 1.8 1.8 7.2 0.0 0.0 0.0 Ca _ucloEngkse mD 12 12 12 12 48 0.15 1.8 1.8 - - 3.6 0.0 0.0 0.0 OLU Enr_ ffmo 12 12 - - 24 0.15 1.8 1.8 1.8 1.8 7.2 0.0 0.0 0.0 WiwMwwqwnut Englu' MO 12 12 12 12 48 0.15 1.8 7.2 0.0 0.0 0.0 Prtcmns Sp.dad ma 12 12 12 12 48 0.15 1.8 1.8 1.8 1.2 1.2 1.2 4.8 0.0 0.0 0.0 Ad _*ior ma 12 12 12 12 48 0.1 1.2 1.5 1.5 5.3 0.0 0.0 0.0 Accoui ma 6 12 12 12 42 0.125 0.8 1.5 17.0 17.7 15.9 15.9 65.5 Subttal Locel 367.0 397 "3 159 1,141J SuIbaW TeduIc_ AssInce a. I" i 1i Tota h _wsbnuwCode jm,
4~~~~~WZ ~~~ ~~Parameter fn %) Phy. Ouanties Unit BaseCod ConL For. Gross Unit 1S95 1996 1397 1992 Total Cost 1996 199S 1997 198 Total Rate Exch. ax Rd L Recurren Costs A. Salares SupportStaff sm 36 36 36 36 144 0.05 1.8 1.8 1.8 1.8 72 0.0 0.0 0.0 Driyws sm 24 24 24 24 96 0.04 1.0 1.0 1.0 1.0 3.8 0.0 0.0 0.0 SubtotalSaaries 2.8 2J 2.3 2.8 11.0
B. Rent Office/ah Is 7.5 7.5 7.5 7.5 30.0 0.0 0.0 0.0 Houskgib Is 7.2 7.2 7.2 7.2 28.8 0.0 0.0 0.0 SubtolPRent 14.7 14.7 14.7 14.7 63.8
C. UtSiles Teephone Is 12.0 12.0 12.0 12.0 48.0 5.0 70.0 0.0 Electricity is 2.8 2.8 2.8 2.8 11.2 5.0 70.0 0.0 SubtotalUtJllties 14.8 14.8 14.8 14.8 69.2
D. Office Supplis Is 3.0 3.0 3.0 3.0 12.0 10.0 30.0 0.0
E. AdbrinistrativeCost, Travelexpens Is 8.0 8.0 8.0 8.0 32.0 10.0 0.0 0.0 Fuelfor Vehiclesand Power Generator Is 5.0 5.0 5.0 5.0 20.0 10.0 20.0 0.0 M sa q Mintanwce Is 2.0 20 2.0 20 8.0 10.0 20.0 0.0 SubtotalAdn istratveCosts 15.0 15.0 15.0 15.0 60.0
Total RecurrentCosts W.3 j0. 6. C 2
TOTAL 1.133.9 1430 116.29f 1 Z 1A912 is Appixoately$W&wmanh. io Threeapartments for fasN years. hT1ufrw.~~~ 66 Anne 1
ARMENIA
IRRIGATIONREHABILITATION PROJECT
Prolect Cost Summarv % %Total (RubelMilNon) (US$S000) Foreign Bae Local Foreign Total Local Foreign Total Exchane Costs A IrrigationRebltation ConveynceSchm 14,410.9 33,625.5 48,036.4 5,542.7 12,932.9 18,475.5 70 40 Pnp Shem 2,306.7 22,291.3 24,598.0 887.2 8,573.6 9,460.8 91 20 TubeweRehabltafion 1,807.0 16,263.0 18,070.0 695.0 6,255.0 6,950.0 90 15 OwmnidReserv 14,ed.1 1,955.4 3,415.4 561.6 752.1 1,313.6 57 3 Subtotalhrgation RdebUation 19,964.7 74,135.2 94,119.8 7,686.4 28,513.5 36,199.9 79 76 B. Watv Mgnt. Pg Proets & Fed Work 365.6 6,061.0 6,426.6 140.6 2,331.2 2,471.8 94 5 C. Opeationan MntenoMc of Systemw 5,960.0 7,020.0 13,000.0 2,300.0 2,700.0 5,000.0 54 11 D. Toaool Ass_tnce - 2,851.4 2,851.4 - 1,096.7 1,096.7 100 2 E.Projectlmplermnton Unit 545.1 3,248.8 3,793.9 209.7 1,249.S 1,459.2 a8 3
27,563.2 93,352.6 120,915.9 10,601.2 35,904.9 46,506.1 77 100
Phyeic_dcotinecies 4,190.6 16,765.2 20,955.8 1,611.8 6,448.2 8,059.9 80 17 Pric ConI c 1,719.1 5,765.1 7,484.2 661.2 2,217.3 2,878.5 77 6 33A4 11L883.0 149365.9 12.874.2 44570.4 67.444.8 zi 124 Staistical Annex 67
ANNEXI Table10 ARMENIA
IRRIGATIONREHABILITATION PROJECT
Prolect Comoonents by Year - InvestmentVRecurrent Costs (USS '000)
Totals Including Contingencies t995 1996 1997 1998 Total A. Irrigation Rehabilitation ConveyanceSchenes InvestmentCosts 3,373.2 6,945.4 8,336.1 4.892.6 23,547.3 Pumping Schemes investntCosts 5,181.9 2,963.8 3.049.1 626.3 11,821.0 TubewellRehabiliation InvestmentCosts 1,393.9 2,738.0 2,816.8 1,516.3 8,465.0 Dam andResrvoir Investent Costs 3921 403.6 415.2 426.5 1,637.4 SubtotalIrrimgation Rehabilitation 10,341.0 13,050.8 14,617.2 7,461.8 45,470.8
IL WaterMgmt Pilot Projets & Field Wor Investm Costs 621.1 803.9 954.0 752.1 3,131.0 Subtotal WaterMgmL Pilot Projecs & Fiel 621.1 803.9 954.0 7521 3,131.0
C. Operaton and Maintenanceof System RecurrentCosts 2,840.0 1,754.3 601.6 617.9 5,813.9 SubtotalOperation and Maintenanceof S 2,840.0 1,754.3 601.6 617.9 5,813.9
D. Technical Assistance Investmnt Costs 849.2 150.4 77.3 79.4 1,156.4 Subtotal Technical Assistance 84.2 150.4 77.3 79.4 1,156.4
E. Project knbplemntaion Unit InvestmentCoats 1,122.8 96.8 70.8 17.5 1,308.0 Rcurrent Costs S3.6 55.1 56.7 58.3 223.7 Subtotal Proct mplmntation Unit 1,176.4 151.9 127.5 75.8 1,531.6
Total PROJECTCOSTS 16,098.5 16,981.1 16,377.7 "87.0 17,44.
TotalInvesrmnt Cost 13,205.3 14,171.6 15,719.3 8,310.8 51,407.1 TotmiRecuent Costs 2,893.6 1,809.4 658.3 676.2 6,037.5 68 Annax I
ANNEXI Table11
IlitIOn RehabiittonProte expendturs Acu>nts by Years- ease Costs (USS$ 0C)
BaseCost Forign Exchange lif 1oss 1337 9 Totrl W rnount
L InvestmweCosdt A. M nknMyand Equipnei 709.0 607.4 866.4 718.4 2,901.2 84.6 2,453.6 ELTechnkca Assistnc t. Foregn 1.940.0 507.0 248.0 180.0 2,875.0 100.0 2,875.0 2. Locai 35.0 35.7 33.9 33.9 138.5 SubtobaTechnicl Assiadnce 1,975.0 542.7 281.9 213.9 3,013.5 95.4 2,875.0 C. Clv Waft 5,471.5 10,276.1 11,147.8 5,393.2 35,290.4 78.7 27,784.6 D. Tiwipt 11.3 11.3 11.3 11.3 45.0 75.0 33.8 E.Labor 3.1 3.1 3.1 3.1 12.6 0.4 0.1 F. Stuies 10.6 10.6 10.6 10.6 42.4
Total Invstment Costs 11,180.5 11,4532 12,320.9 6,350.5 41,305.1 60.2 33,147.0
L RocurenntCods A. Sasec 1C.002 60Z8 202.6 202.8 2,011.0 - - B. tUt"e 14.8 14.8 14.6 14.6 59.2 70.0 41.4 C. Ren 14.7 14.7 14.7 14.7 58.8 - - 0. MateWasand Supplles Offte 3.0 3.0 3.0 3.0 12.0 90.0 10.8 CAMMltnbi lftsp*guppies 1,900.0 900.0 300.0 300.0 3,000. 90.0 2,700.0 subtota balas ad Supp" 1,503.0 903.0 303.0 303.0 3,0120 90.0 2,710.8 E.Adm_W&w OnCo 1S.0 15.0 15.0 15.0 60.0 9.3 5.6
Totl Recuent Cot 2,550.3 1,550.3 550.3 50.3 5,201.0 53.0 2,75.8
Tol BSEUNE COSTS 13,730.7 13,003.4 tZ871.2 6,900.7 46,506.1 77.2 35,904.9
PhysialContin e 2,141.1 2300.7 2,374.0 1,244.1 8,059.9 80.0 6,448.2 PriceC aocie 227.0 677.0 1,132.5 842.1 2,78.5 77.0 2,217.3
Told E reT JOSTS ULI 14.3.7J §0I. S7.444.6 Z 44.S70.4
F_agE IZM* IIa8.6 I.ui .iz9g .4 Forein Woog 12,755.2 12,29.6 12,776.6 6,789.0 44,570.4 RM3ATK)i REHABØLffATIONPROJECT
ExRp Accowuns kV c_nonns - Banr codRs (US$10) -. :t Water
Piwt :X rkgtIo RelhabUtaialn Projects £ Project Physical Convey. Punnhlg TubeweN Damnand Fied 0 & M of Techniclk knplenmn. Conlingencles Sche Sduunes Rehab Reservoir Woks Systens Assist. Unh Total % Annunt L nvedmd Cots A.L y Eqans nt - *- 1.105.6 1,478.3 . 142.7 116.7 2.901.2 19.4 552.3 ELTedmical Assaunce 1. Foreign ' ' 846.0 954.0 1,075.0 2,875.0 59 169.2 2.1nre . * - - 720 - * 66.5 136.5 - - Saabto calThec"bncAsdsLs* - - - 918.0 - 954.0 1,141.5 3,013.5 5.6 169.2 E. Cli VWoas 16,475.6 0,460.6 6,950.0 46.1 77.5 . - 35,290.4 19.0 6,705.7 F. Trnspmt - - - 45.0 - - - 45.0 20.0 9.0 O. LaOW - 12.6 - - - - 12.6 200 25 H.Skuies * - 42.4 - ' ' 42.4 - -
Tota hnvesneT Codst 18,475.5 ,460.8 6,950.0 1,313.6 2,471.8 1.096.7 1,258.2 41.305.1 16.0 7.449.8
L Rewuren Cods A. Slute* - - 2,000.0 - 11.0 2,011.0 S. U5NeS - - - 5.259- 59.2 5.0 3.0 C. Rent - 58.8 - D. Maleurasand SpplIes omco - - - - . . . 12.0 12-0 100 1.2 O&StbLSnpeir rAFAk - - - - 3,00.0 33,000.0 200 600.0 Subtot MldalwWs and Supplies - . 3,000.0 10 3,012.0 20.0 601.2 E. Addn an Codb - - .- 60.0 60.0 10.0 6.0
TotaRecurruCods . ., 5,000.0 , 201.0 5,201.0 11.7 610.2
Total BASElDIE COSTS 18,475.5 9,460.8 6,950.0 1,313.6 2,471.8 5.000.0 1.096.7 1.459.2 46,506.1 173 8.059.9
Phyl Conincies 3.695.1 1,892.2 1,042.5 232.5 480.0 600.0 28.5 33.5 8,0599 Prke Coningenckes 1,376.7 468.1 472.5 91.3 179.2 213.9 31.1 38.9 2,878.5 152 437.4 Total PROJECT COSTS 2I3M473 11.921.1 IIA91. 1t37.4 3.131.0 6LIiU! iAn4 I4I6311 67I444A 14.S 114!Ua
Texe- - -- Forein Exchlng 16,483.1 10,712.5 7,618.5 949.0 2,967.2 3,363.7 1,156.4 1,302.8 44,5704 15 2 6.793.4
AZ Er X AMIIENIA IRIGATIONREH TIONS -ROJECT
Ex£dum Account Bakdow (UJS$100)
Pk% c - .Pi pCog. Ba1_Cod C u PiePm . _ Td bild. Cod a,. Ct mm Li ~- LQC7 iaw -- , Puce Cai.rns Lai Coxd.am Pbyicd ¢Eud. DI. & (Ead Iulde a (ECL Oun a (End. DOmAs& Taes Tobld Cost Cmi. Pa. Eusd. Tax.E) Ti Tod PFir.Eulh Tsel Tome Tdl FPa.E-b T .) Tons TOM For.Emcd, Taxes)
31A 203.7 3.1161 511.7 3.6n.3 3076.6 166.4 A.11IhI I 2.43 A 447.7 . 21.2 484.3 73. - 123 173.7 3m139 L. TdmhWmmIu 3.13*0 2.6622 lis @ I.Pmsg 2,75.0 . 2A7.6 16.2 - * 16.2 94.. - 146C 146 466 IL aid 13.i - 131.6 .1 .1 616.3 2.333.0 34.042. 3.461.2 - 44.330A 37.251.9 7.0173 I. C Wm 27,746 7T.05S.I 35*290.4 1.244.2 1.412 6,706.7 1,614.1 0.t 32 42.6 143 57.2 47.7 95 F.TI.I1 33.1 11.3 45.0 6.6 2.3 .09 2.4 0. 0- 0.O 15.9 160a 13. 2.1 0. -aa 6.1 12.5 - 121 0. 2.5 2 L5 0.0 4469 443 446 .Skillso 42.4 42.4 - 2.5 2.5
77.0 2,066.1 2.066.1 2.06.1 * 2011 * 2011.0 - - - 77.0 L 8dmu C- - 65.6 62.7 3.1 41.4 17.8 - 2 2.1 0.3 - 30 2.0 1.1 - 3.7 46.1 16.7 at.um 3. 62.3 62.3 62.3 C.RPA 56.6 5"- - 3.5 - 06 12.6 14 140 12.7 13 10. 1.2 - 12.0 1.1 0.1 1.2 0.7 0.1 od 22 ____ 123.7 13.7 ____ 1375S 3.363 1 37317 3__7315 3,1.6 O&MM4nmwaMac epakSqp5 2 700.0 300.0 - 000 540.0 60.0 60. 3.S7t 3.753 t S642 - lilT 1244 -T3 6 iiiT 3p3163 37S I 8a*hId&hbeIeh .. | spos _ 7UTTN--T . 63 5 8 4 0.6 5.4 - 6.0 0.4 3.5 - 39 65 63 4 6939 E.A*udulreIIv Coal$ 56 54.4 GO60 0~ 5.4039 .1W -l-4-f - AT UT___ 1. -iT i T ~TT T-6031. raiiCasts RiammIA ~~T7gff 1 12I74.2 51444'6 48E94.lT-T -IfI rawlRSUlwml ww - - ITWCodeE1F
G Z *CA MWA fRE TBEWol PROJECT
PYI PY2 PY3 PY4 PY5 PYS PY7 PYI PY9 PYIO PYII PY12 PY13 PY14 PYIS PYIS PYI7 PYlS Pyl9 PY20 BEIIEFITS
LowwLanid I w1 hoA prefect#A 17.893 83.498 79,104 74.709 70.314 65.920 61.525 57.130 52UM 48.341 43.948 39.12 35,157 30,762 26.368 21,973 17.579 17.579 17579 17.5793 2 WM proed 1t T7.893 83,496 79.104 62.619 87.893 67.893 87.893 87.863 67,893 87,893 87.893 87.893 87,693 87.893 87.893 67.893 87.693 87.693 67.893 87.893 3 Nd Senei 0 0 0 7.910 17.579 21.973 26.366 30,763 35.157 39,552 43.947 48.341 52.736 57.131 61.525 65,920 70,314 70,314 70.314 70.314 hped of Chwe hI 4 Cueppg Patrn IC 67.193 83.496 79,104 90.881 96882 105,472 114.261 123.050 131.640 140.69 149.418 170.8 170.638 170.6,8 170.638 170.638 170.636 170.630 170.638 170.636 5 (4 -2) 0 0 0 6.262 0.79 17.579 26,368 35.157 43.947 52.736 61.525 82.745 82.745 62.745 82.745 82.745 82.745 82.745 82.745 82.745 6 Subtotal kneE 0 0 0 10,172 26.30, 39.552 52.736 SS6 0 79.104 92.266 105.472 131.066 135.481 130.876 144.270 1411.65 153.059 153.059 153.059 153.059
Idde Land 7 _O4hA pr*d ID 18.566 15.73S 14.909 14.061 13.253 12.425 11.598 10.766 9,940 9.111 8.2B3 7.455 6,626 5.796 4.970 4,142 3.313 3.313 3.313 3.313 6 wlh prjecd / 16.566 15.738 14.909 15.572 16.506 16.566 16.566 16.566 16.566 16,566 16,566 16.566 16.566 16.566 16.566 16.566 16.566 16.566 16.568 18.56 9 Ndt BWf1 0 0 0 1.491 3.313 4.142 4,970 5.796 6.626 7.455 8.283 9.111 9.940 10.768 11.596 12.425 13.253 13.253 13.253 13.253 mpat d Chane hI 10 Ceoppng PattneE 16.566 15,736 14.909 17.129 1.2m 19.679 21.536 23,192 24.U9 25.533 25.533 25.533 25.533 25.533 25.533 25.533 25.533 25.533 25.533 25.533 11 (10.8) 0 0 0 1.557 1.657 3.313 4.970 6.626 8.263 0.967 6.967 8,967 8,907 8.967 *.967 6.967 6.967 8.967 6.967 6.967 12 Subala Bne1iN 0 0 0 3.048 4.970 7.455 9,940 12.425 14.909 16,422 17,250 18,078 18.907 19.735 20.563 21.392 22.220 22.220 22.220 22.220
15 TOTAL BENEFITS 0 0 0 19,220 31.336 47.007 62.76 76.344 94.013 10B.709 122,722 149.165 154.307 159,610 164,833 170.056 175.279 175.279 175.279 175.279
16 Oa MCsuI(2A)IF 0 0 0 0 1,028 1,02. 1.028 1,026 1.026 1.026 1.028 1.028 1.028 1.026 1.028 1,028 1.028 1.028 1.026 1.028 17 Pod Cots 16,099 15.9e1 16.370 8.897 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 IS Tebl Proi Cahd 16.099 15,981 16.378 8.897 1.02 1.028 1.026 1.026 1.020 1.026 1.026 1.028 1.025 1.028 1.026 1.026 1.028 1.028 1,026 1.028
1I NETBENEFITS(W) .16.099 415,961 -16.378 10.323 30.310 45.979 61.847 77.316 92.905 107.681 121.694 148.136 153,359 158.582 163.805 169,028 174.251 174.251 174.251 174.251
20 WL 5X }
IA- *Iho.d pro.ct a hom pm Iwm d1.38 ha Is 8901.13 (7aM. AS. Aamex6). hiome per frm dueck. by 5% per year hough PYI1. *Own 1 reaches 20% of the prprood lnl. Ie *w4ih pred, ndncoe per mimbr ds 3 ymia he o por h W4, 60%Dd mrIl oso h - Is reted, and h PYS. preprjed nod komne k complel*y rldred. IC The chang hi cupping paern Is gra, and kwed b ed hI PYi2 (Tb AS. Am 6). ID.- ho_ pWodct. hdcnem pw km d 1.30 ha Is 759.51 (Table hL. Am 6). hiceme p mtldecnas by 5% per ycmred to PYI Uvough PY17. hmna readm 20% .d th prepoetd lavel. IE The chg to appb m bl _ihd, and biped ahed hi PYIO (TlA A7, Annex 6). /f 2% of hiweabud Cosde..
GE|2pZ RRTATO REwnATIDN PROJEcT
ffeNrs DOWNn#
Pit Pf PY3 PY4 PYS PYC PY? PYS Pn P110 PYII PY12 PY13 PY14 PYIS PY16 PYI7 PYls PYIS PY20 BENEFIS 0 0 0 15.376 25.070 37,105 0,140 62,615 15.211 EN1 ",I?? 11.332 122.510121.6 M11 13 .04S 140.223140.222 140.223 140.o23 COSTS aS,O9IS,9I 16.376 .16 1.0211 1.026 .020 1.0211 1.0211.U 1.021 1.021 1.02I 1.021 6.02l 1.020 1.02I ..O 1.026 1,021
NETBNEFITS .18.096 *15.61-11.315 5479 24.042 30,577 49.112 61.6u 74.142 05.932 t7.14S111.303 122.452 1211.01 130.&3 135.017136.135 1S1.13 133.135131.195
OtOL, ~~~47#1
86146MS DOWN LeN AND COSTS VP MUN
PYI PY2 Pr3 PY4 Pm5 Pr6 PY? PYt Pm PYI0 PYII PY12 PY13 PY14 PYIS PYlt PY1I PYI0 PYIS PYI0 IENEFITS 0 0 10337 25,070 37.105 50,140 62.675 2t11 $kM 16.11 113.332122.510 127,0116 131.867 13.045 140.m 140.m 140.M 140.223 COSTS MM1 19.1 19.S53 10TM 1.24 1,24 1.224 1,234 1.2141,2 .2U I3241.23 4 1,4 1,2S4 1234 1,2S4 1.24 1.234 1.234 1.234
NETBENEFITS .19.31*-13.177 -13.653 4.070 23.637 31.372 44.307 *1.442 73.177 15.714 16,.44 1 1.01 122.276 121.45 130.633 134.011 131.390 13.3900 1311.3 13.W0
LIESRFSDOWN 16 e ANDCOS rS UIP10%
PYI PY2 PY3 PY4 PYS PS6 PI Pn3 P1n PYI0 PYII PY12 PY13 PY14 PYIS PYI6 PYI? PY16 PY11 PO20 BENEFITS 0 0 0 1.410 15.6113 23503 31.330 391.12 47.00 54.355611361 74,562 71,134 139l6 82.411 15.021 67.640 81.640 11.640 G1.64 COSTS 19.313 19.177 13.53 10.67 1.234 1.234 1.234 1.234 1.234 1,234 1.234 1.234 1.234 1.234 1.234 1.234 1.234 1.234 1.234 1.234
NET BENEFITS .11.313 -*13177 -1.11*I?.15 14.435 22.270 30,104 37.36 4773 53121 0%127 73.341 75.960 7Y571 61.113 63.74 61.406 81.406 8.4N 6.406
mm ~~~33N,
AWOWD WATER EfFcEWNCFROM 15K - OIL
Pll PY2 P3 PY4 PYS Pr6 PY7 PY1 P1Y PYI0 PYII PY12 PY13 PY14 PYIS PY16 PY11 PYIS PY19 PY20 BENEFIS 0 0 0 13.236 37.449 G5.1916 16,331 10116164130.316 150.710 110.21S 206.091 214.135221.380 2261.624235.366 243.112 243.112 243.112 243.112 COSIS 16.099 15.91 16,37I CU111 1.0 20 1.036 1.021 1.026 1.026 1.028 1.026 1,021 1.026 1.026 1.021 1.021 1.021 3.021 1.021
NET BENEFITS .11.009 .15.961 *tt.321 t.V32 31.421 64.110 5.903 1011.35 121.311114.53 119.187 2s., 213X10722o.30 227.516 234.640 242.064242.064 242.064 242.064
MENEMSDOWN 4|5%
PYl Pm2 Pm3 PY4 PY5 PY6 PY7 PY6 P1 PIOP PYII PY12 PYI3 PYIl PYIS PYIS PYIl PIts PY13 PYI0fl BENEFITS 0 0 0 Ill.56 123.24 44.891 50.165 74.019 6.763 103.J11 117.199 142.452 147.440 152.421 157.416 MAGI40411.39 167232 161.362 161.39 costs 16.0l 1S.9111 16.378 31.811 1.026 1.023 1,02 1.0261 1.2 3.026 1,026 1.026 1.026 1.026 1.029 1.023 1,026 6.026 1.0211 6.026
NET BENEFITS .16.039 I.911.1 .11.3171 3.456 211.119 433116351.62 131`711 16.75 WIN 116.111 141,424 146.412 ISIA40 156.31 1613116 1616.3141111.314 16.364 166.3G64 LA"EO ONEYEAR
PYI PY2 PY3 PY4 PYS PYS PY PYII PY9 PYIO PYII PY12 PY13 PY14 PYIS PYIG PYI PY1S PYt9 PY2021 BENFITS Low Lwnd 0 0 0 .16172 1,8109 3{7S3 43,947 57.131 70,315 63,496 96,662 10966 135.401139.876 144.270 146,665 153,059 153.059 153.059 153059 Mdkt Lan 0 0 0 .3.049 3,545 5,699 6,626 9.111 11.596 14,061 16,566 18.0`1 16.907 19.735 20,563 21.392 22.220 22.220 22.220 22,220 Tdo hAfIs 0 0 0 -19,221 22.354 36.461 50.573 66.242 a1.91197.5S0 113.248 127.945 154,387 159,610 164.33 170,056 175.279175.279 529 175219 M.
COSTS 0ILMCods 0 0 0 0 0 1,131 1,131 1,131 1.131 1,131 1.131 1,131 1.131 1.131 1.131 1.131 1,131 1.131 1.131 1.131 Pn9d Coue 0o17.709 1757g 1e,015 9.7.7 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TdiMPP*dCod 0 17,709 17.579 14.015 9,767 1,131 1.131 1.131 1,131 1,131 1,131 1.131 1,131 1.131 1.131 1.131 1,131 1,131 1.131 1.131
NETEIENEFITS 0 17.701 .17,510 37.236 12.566 35.330 49.442 65,111 *0,780 96,449 112,117 126,614 153.257 156.479 163,702 16.925 174.145 174.146 174,14f 174.148
LAa0ED 70 WARS
FYI PY2 PY3 PY4 PY5 PYO PY7 PYS PY9 PY10 PYil PY12 PY13 PY14 PY1S PY1S PY17 PylS PY19 PY2022 BENEFITS LowLnd 0 0 0 -16.172 -26,36 21.446 35,157 48,341 61.525 74,709 87.693 101,077 114,261 139,876 144.270 148,665 153,059 153,059 153.059 153.059 Mia Land 0 0 0 .304 .4.970 4.042 6.626 9.111 11.506 14.081 16,566 16.078 16.907 19.735 20.563 21.392 22.220 22.220 22.220 22,220 Tdcalfloraa 0 0 0 .19.220 431.336 25,486 41.764 57.453 73.121 61.790 104.459 119,155 133.166 159,610 164,S33 170.056 175.279 175.279 175.279 175.279
COSTS OEM Coas 2%) 0 0 0 0 0 0 1.234 1.234 1,234 1,234 1.234 1.234 1.234 1.234 1,234 1.234 1.234 1.234 1,234 1.234 Prejad Cols 0 019.319 19,177 19.653 10,676 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Tdal ojCode 0 0 19.319 19.177 19,653 10,676 1.234 1.234 1.234 1.234 1,234 1.234 1.234 1.234 1.234 1,234 1.234 1.234 1.234 1.234
NET BENEFITS 0 0 .19.319 -6.396 -50.991 14.612 40,550 56,219 71,661 67.556 103,225 117.922 131.934 158.377 163,60 168.623 174.045 174.045 174,045 174,045 lRlt. 4114i
LAGGEDTHREE YEARS
PYI PY2 PY3 PY4 PYS PYS PY7 PYS PY9 PYIO PYI PY12 PY13 PY14 PY15 Py`1l PYIl PY18 PY19 PY20 23 BENEFITS LowLand 0 0 0 .16.172 -26.36 -39,552 24,063 39,552 52.736 65.920 79,104 92,286 105.47211S.656 144.270 14.665 153.059153,059 153.059153,059 Mkift Land 0 0 0 J3,048 4,970 Of455 4,539 7,455 9.940 12.425 14,909 17.394 16,907 19,735 20.563 21,392 22,220 2220 22,220 22.220 Tdiedandia 0 0 0 .19,220 .31,338 .47,007 2.622 47,007 62.676 78.344 94,013 109.652124,376 136,391 164.633 170.056175,279 175.279 175,279 175,279
COSTS AM Cools (21 0 0 0 0 0 0 0 1,337 1.331 1.337 1,337 1.337 1,337 1.337 1,337 1.337 1337 1.337 1.337 1,337 PnaCools 0 0 0 20,775 21,291 11,586 0 0 0 0 0 0 0 0 0 0 0 0 0 0
NET BENEFITS 0 0 0 .39,995 52,6N9 58,573 26.62 47.007 62.676 76,344 94,013 109,S62124,373 1365391 164.,33 170,056 175.279175.279 175,279 175,279
PA fl'4I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~C CD aCD
ANNEX 2: THE AGRICULTURE SECTOR REVIEW
A. BACKGROUND
1. Armenia is a landlockedcountry, located to the extremesouth of the CaucasusMountains between 390 and 410 north and 440 and 46° east. The country borders Azerbaijan to the east and south (Map 1, IBRD 25388). To the north lies Georgia, and to the west and south, across the Araks River from Turkey and Iran. Turkey is connected to Azerbaijan through a 25 km long corridor between Armenia and Iran.
2. Agriculturein Armenia is greatly influencedby topography. Cultivatedland lies within an altitude range of 600 to 2,500 m with mountain peaks to 4,090 m above sea level (asl). Only about 2% of the land is located below 1,500 m elevation. Generally, the landform in the center and north comprises rocky high mountainranges separatingnarrow fertile valleys. Towards the south the broad, flat, and fertile Ararat Valley opens out along the left bank of the Araks River to form the border with Turkey. West and north of the centrally located Mount Aragat, and to the east around Sevan Lake, the landform is generally rolling, but with many rocky outcrops. In the south-easta few small irregularly- shaped valleys are fringed by high mountain ranges on both borders with Azerbaijan.
3. Irrigation is necessary to ensure food security; however, about 49% of the arable land is equippedwith irrigationfacilities. The diverse landscapeoffers particular challengesto the collection, transfer, conveyance,and delivery of irrigation water. The high elevationof Sevan Lake (1,925 m asl, about 1,200 kin2) makes it a strategic source of energy and irrigation water.
B. AGRARIAN STRUCTURE
4. Since the land reform of February 1991, most agricultural land has been under private control. The exceptionsare pastures allocated for communalgrazing, and about 100 state farms which have been retained for seed production, animal breeding, research, or other purposes of national importance. About 20% of the land has been reserved for future village expansion, but is generally available for rent. There are about 300,000 smallholderwith holdings averaging about 1 ha to 2 ha; many farmers have less than 1 ha. Most holdings are fragmented; irrigated and rainfed arable land, orchards, and mown grasslandwithin each village were all distributedbetween the families resident in the village. Familiesnot previouslyengaged in agriculturehave also now become smallholder. About 6,000 groups of farmers (about 20 percent to 25% of the farmer population) have elected to operate collectively, either for cattle or crop production.
5. Sale of land has been officiallysanctioned since the beginningof 1994, providedpayment to the state has been completed(typically R2,000/ha - R1O,000/ha). However, with the uncertaintiesof prices, food supplies, and the future of the economy, most families probably regard their smallholding as an indispensableasset, rapid aggregationof holdings is unlikely to occur immediately. Althoughmost land has now been distributedunder the two-yearprogram originally planned and initiatedin early 1991, the Governmenthas decided to extend the land privatizationprogram for a further 2 years to correct anomalieswhich have arisen and to privatize parts of the state farms which still remain.
6. As a result of the break-up of the agriculturalcollective and state farms, village councils 76 Annex 2 have now assumed great importance and authority in rural life. Their responsibilities include: (a) overseeing the land privatizationprogram; (b) administering reserve land area allocated for future village expansion(constituting about 20% of the agriculturalland of the country); (c) control of the "self- supportingenterprises" (which includesome pooled machineryand equipment);(d) organizationof input supplydistribution; liaison between farmers and the local branch of the Departmentof Water Supplyand Irrigation (DWSI, Annex 3); and assistance in the collectionof water charges. The final form of local governmentawaits formulationbased on new legislation. However, it is understoodthat 40% of local taxes (principallythe land tax) are to be allocatedto the village councils, which are also responsiblefor dealing with economic, social, and cultural matters.
C. CLIMATE
7. Armenia enjoys a variety of climatic conditionsdepending upon altitude. The Ararat Valley is characterizedby dry hot summersand cold dry winters, with annual precipitationnot exceeding 300 mm. Precipitationincreases toward the mountainsto 1,000 mm (Mount Aragats). Temperatures decreasewith altitude from an annual averageof 10°C in Yerevanto 4°C at Sevan Lake. Corresponding growing periods vary between 250 days in the lowest valleys and 170 days around Sevan Lake.
8. Monthly precipitationis highest during the period from April to June and lowest from July to September. Crop water deficit from May to August rangesbetween 200 to 700 mm, which cannot be supplied from soil moisture alone. Irrigation is thus necessaryfor crop growth.
D. LAND USE
9. About 47%, or 1.4 million ha of Armenia's overall territory are cultivable or are used as pasture for livestock. The rest is rocky wasteland, mountains,forest and heathlands,suitable only for rough grazing during the few summer months. The cultivatedland is in:
annual crops 465,300 ha perennial plantations 62,700 ha home plots and orchards 57,000 ha permanent pastures 666,000 ha hill grazing and rangelands 137.000 ha
Total cultivatedland 1,388,000 ha
10. Approximately286,000 ha are at present irrigable throughoutthe growing season. In 1992, the distributionof cropping patterns in the main irrigated areas was:
kitchen gardens and home orchards 15% vineyards 8% orchards 11% permanentpasture 4% forests 4% arable crops 58%, of which The AgriculturalSector 77
(19% cereals, 29% fodder, 7% vegetables,2% potatoes 1% others)
11. This crop mix is changing rapidly. The trend, which is expected to continueas long as the present emergencysituation is as follows:
(a) irrigated cereals,mostly wheat, is increasing:farmers want to be self-sufficientand have spare grain to barter for other commodities;
(b) for the same reason, farmers would have liked to expand the potato area, but since Armenia is largely dependenton import of potato seeds, the present area is likely to be maintained;
(c) vegetablesgrown for sale to processingindustries is decreasing;
(d) the area of orchards and vineyardsis decreasing,to accommodatethe additionalcereals; and
(e) the area of forage crops is being maintained, to support livestock, primarily milk producers. At higher elevations, where rainfall is adequate for grazing, increasing amounts of forage are being gatheredfrom un-irrigatedlands. There will be increasing pressure on cultivatedand naturalpasture lands. At low elevations, where there are no pastures and rangelands, people have started supplementingstock feed by collecting weeds, or cutting young reeds. This is a common practice in countries that have no grazing areas.
E. CROP PRODUCTION
12. The principal irrigated crops are:
- cereals mostly winter wheat and some winter barley; - vegetables tomatoes,cabbages, beans, onions, carrots etc.; - potatoes; - forage mostly luceme (alfalfa)and some sanfoin; spring barley, rye, oats and oats/vetch mixture; - orchards apricots, apples, cherries, peaches and plums; - and, vineyards.
13. Wheat varieties are Mexican high-yieldingstrains crossed with Russian frost-resistant varieties. At higher altitudesmore straw is preferred for additionalwinter stockfeed. On the whole, high yield potential and good cultural practices are evident. Several fields with estimated yields of 6.0 t/ha were seen at lower altitudes; at higher altitudes, fields with an estimated yield of roughly 5.0 t/ha were common. These impressionswere corroboratedby farmers, village councilors, and research workers.
14. Winter barley is grown primarily for stockfeed, but also as a grain supplement.It is the high-yieldingsix-rowed species, much favored in Eastem Europe. Yields are comparableto that of wheat. 78 Annex 2
15. Except at high altitudes, spring wheat and two-rowed spring barley are irrigated when winter crops fail due to frost combinedwith an inadequatesnow cover. Even with irrigation however, the yields of spring wheat rarely exceed 2.5 t/ha.
16. The dominantvegetable at low altitudesis the tomato; at middle elevationstomatoes and cabbages;at high elevations,cabbages. Beans, onions, brinjals, carrots, garlic and others, are grown at all altitudes. Average yields are tomatoes 38.0 t/ha, cabbages 40.0 t/ha, beans for seed 2.5 t/ha, 20.0 t/ha if harvested green.
17. At low elevationspotatoes are mostly earlier varieties, and main-crop varieties at high elevations. Yield potentialsare 22.0 t/ha for earlier varieties and 35.0 t/ha for the main crop.
18. The principal forage crop is lucerne (alfalfa). It producesfive cuts at low altitudes and four elsewhere. Yieldsare about 2.0 t of hay per hectare/cut. Sanfoinis grown mostly at high altitudes in places not suitable for lucerne, or where honeyproduction is an importantlocal industry. It gives just two cuts per year, yielding about 3.8 t/ha of hay.
19. Other foddercrops listedare rarely irrigated. Some fodderis also obtainedfrom specially set-aside meadows,which are occasionallyirrigated from snow-melt.
20. Orchards are mostly apricots at low altitudes and apples in higher areas. Traditionally, they are well maintained. Shortagesof plant protectionchemicals caused much damagein 1993, which was further aggravated by severe winter and early spring frosts. The frost killed many trees, and destroyedthe flowers on others. Other common orchard crops are peaches, plums and cherries. Normal yields are about 15.0 t/ha.
21. Until recently grapes have been the mainstay of Armenian agriculture exports. With exports of wine and brandy impededby the blockade,the present outlook is uncertain. Normal yields are 13.0 t/ha.
F. LIVESTOCK PRODUCTION
22. Livestockproduction accounted for about one-third of the output value of agricultural primary production in 1992, down from 46% in 1991 and 53% in the late 1980s. It used about 80% of agricultural land, employedan estimated two-thirds of the agricultural labor force, and represented a major source of nutritionand cash income for about 250,000 private livestockproducers. Becauseof the importanceGovernment had attachedto increasingper capitaconsumption of livestockproducts, the sub- sector was given high developmentpriority in the 1970s and 1980s, receiving between 60% and over 70% of total agricultural investmentsand operational subsidies, and profiting from large imports of livestockproduction related inputs. In the late 1980s, for example, yearly imports amountedto about 400,000 tons of energy feed grains, 100,000 tons of protein meals, and substantialquantities of feed additivesand veterinarysupplies. Altogetherthese constitutedover 50% of the total value of agricultural imports. As a result, the country's livestockpopulations grew substantially in the past two decades, particularlypig and poultry populations. Despitethis growth, Armenia dependedheavily on importation of livestock products, namely dairy products (up to one million tons of milk equivalent per year) and meat, accountingfor respectivelyover 40% and 15% of total agriculturalimports in the late 1980s. TfheAgricultural Sector 79
23. In 1987-88, when livestock numbers peaked, Armenia's livestock population was estimatedat 850,000 cattle (includingabout 310,000 cows), 340,000 pigs (including35,000 sows), 1.75 million sheep (including 1.14 million ewes), 30,000 goats, 7,500 horses, and 12 million poultry. In 1989, overalllivestock numbers began to tumble. It is estimatedthat between 1987-88and the beginning of 1993, overalllivestock inventories in terms of Animal Units fell by 50%. The worst affectedlivestock were pigs and poultry, down by about 75% each; followed by cattle, down by over 60%; and sheep, down by over 50%.
24. Due to heavy livestockinventory culling, overall meat production decreased somewhat slower than livestocknumbers. From 1987-88to 1992, total meat productionfell by about 38%. Poultry meat productionwas by far the worst hit, down threefold. During the same period, production of milk fell by 31 %, eggs by 60%, and wool by almost 40 %.
G. AGROPROCESSING
25. Armenia's 632 agro-processingenterprises are organized under two ministries. The Ministry of Food has control of the milk, meat, canning, baking, feed milling, flour milling, winery, distillation, food retailing, fertilizer enterprises, and pesticide procurementactivities. The Ministry of Food also functionsas purchaser and supplier of ingredientsused by the enterprisesunder its jurisdiction. The Ministryof Agriculturecontrols fewer enterprises, mainly wineries. Some duplication exists with the types of enterprisescontrolled by the two Ministries. The food processingand distributionindustries actuallyconstitute regional and nationalmonopolies controlled by Governmentbecause the private sector has not yet actually entered into these areas.
26. All sectors of the agro-processingcomplexes are operating below engineeredcapacity. This results in their operating at high unit costs, because the fixed costs are allocatedto a smaller than optimum volume of output. There are several practical reasons for the low capacity utilization of facilities:
(a) The break-up of the Soviet Union disrupted normal trade flows which were formerly directed from Moscow. Althougha centralizedadministration was not efficient,a pattern and configurationfor the distributionand flow of products did exist. The dismantling of the Soviet Union has left many unresolvedissues and uncertainties,particularly issues of trade and trade patterns which have been left with uncertainty.
(b) Compoundingthe impactof the Soviet break-up was the rail and road blockadeimposed by Azerbaijanon energy fuels, foodstuffssuch as wheat and feed grains, manufacturing supplies and ingredients, and other inputs required by Armenia's agro-industrial enterprises. Without these inputs, operations of the food factories have become increasinglyinefficient.
H. ENVIRONMENT
27. Of the many environmentalissues facing Armenia today, several appear to urgently need resolution including: 80 Annex 2
(a) development of programs to control soil erosion, which is proceeding at an alarming pace, especially since the blockade, trees are currently being cut and used as fuel wood to substitutefor loss of energy resources;
(b) installation and operation of adequate pollution control technologies in Armenian industrialfacilities;
(c) treatment and disposal of municipalwastes and industrially-derivedhazardous wastes;
(d) reductionof automotive emissionsin urban areas; and
(e) protectionand restorationof the ecologicalintegrity and the quality of water supply from Lake Sevan.
28. To overcomethe pervasivenessof environmentaldegradation in Armenia there must be a move to market-based costs for energy, fuel, water, and other resources in order to induce conservation. Much of Armenia's infrastructurewas developedwithout regard for these input costs, and even some of the government'scurrent planning documents utilize the argument of inexpensiveenergy to justify future developmentplans. Unbridled use of such resources imposes too severe a stress on resource-productionsectors and the environmental components upon which they have an impact. Attainingcontrol of these issues will also require some reorientationof Governmentorganization. In certaincases, roles, responsibilities,and authoritiesmust be clarified, some apparentconflicts of interest should be addressed, and in some cases authority must be horizontally interwoven across the existing verticallyoriented governmentalstructures.
I. PRODUCTION SERVICES
The Input Supply System
29. With few exceptions,Armenia does not have its own pesticideproduction or formulation ability, and is thus almostentirely dependenton imports. In the past, sources of supply were Russiaand Ukraine; further suppliers were Uzbekistan, Azerbaijan,Turkmenistan, and Kazakhstan. However, the Ukrainian production currently covers not more than 20% of its own needs because of difficulties in obtainingenergy and raw materials. The situation in Russiaand the other republics is not much better, thus forcing Armenia to look for alternativesuppliers.
30. Until 1992 two crop protection agents were manufacturedin Armenia. One was the herbicideFenagan, developedin Armeniaand produced by the Chimreaktivfactory in Yerevan, and the other was the fungicidecopper sulphateproduced in a factory in Alaverdi fromdomestically manufactured copper, and imported sulphur from Turkmenistan. Productionof both has been discontinueddue to the economicdifficulties causedby the blockade.
31. Armenia used to manufactureurea in a fertilizer factory near Spitak (the earthquake zone). However, the factory was badly damaged during the 1988 earthquake and has not resumed The Agricultural Sector 81 productionsince. All other fertilizers required in the country came from other former republics of the Soviet Union.
32. The supplyand procurementof agriculturalinputs is almostfully managedby state-owned organizations. The private sector has not begun to operate in these areas, even though there are no legal barriers. The Ministry of Nutrition and Food Reserve is responsible for provision of feed principally grain and forage to the livestockindustry, though the Ministry of Agriculturehas some feed mills under its control. Armplodorodieis the parastatal organizationresponsible for supply of agro-chemicals,down to the farm level, includingfertilizers and pesticides. It has one main supplydepot, five regionalsupply bases, and one distributionfacility (consistingof an Agro-chemicalStation, and a Crop ProtectionStation) in each of the 37 districts of the country.
Machineryand Input Supply Services
33. Armenian agriculture presently works with about 12,500 tractors, 1,400 grain combine harvesters, 950 forage harvesters, 2,300 drilling machines, 2,300 grass mowers, 1,700 fertilizer spreaders, 2,200 spraying machines, 9,700 trucks, and a number of smaller agricultural equipment. However, machinery and equipment are not manufacturedin Armenia, but have to be imported from other FSU republics. With the collapse of the Soviet Union it has become increasingly difficult to procure new machinesand spare parts in all the FSU republics, but in Armenia these problems are much more serious because the country is land-lockedand under a blockade.
34. Despite the relativelylarge fleet of machineryand equipment in the Armenian farms, a number of important machines for land preparation, harvesting, post harvest handling, and animal husbandry are in short supply. However, under the current land privatizationand farm restructuring, with an estimated 300,000 private farms, the most limiting factor to mechanizationof agriculture is clearly the near total absence of farm machinery suited to the small average farm size of about 1.3 ha, and to the even smaller average land plot of about 0.4 ha. Although the farmers apparently try to compensatefor this disadvantagethrough blocking of cropping patterns and field operations, this will likely prove to be a transitional and unsatisfactorysolution.
LivestockSupport Services
35. The Institute for Livestock Breeding and Fodder Production, which has about 100 professionaland support staff, is responsiblefor livestockresearch. Since the dismantlingof the Soviet Union, work at the Institute has come to a stand-stilldue to shortages of funds. The current level of funding is hardly sufficientto meet meager payrolls of Institute staff and does not permit financingof other operatingexpenses, such as electricity, gasoline for transporting staff from and to work, essential chemicals,reagents, and subscriptionsto scientificjournals. Somelimited livestock research is also being done by the Yerevan Zoo-VeterinaryCollege.
36. VeterinaryServices are provided by the public sector through the VeterinaryDepartment of the Ministry of Agriculture. This include 41 Rayon-levelstations and 321 veterinary posts. There is also a central veterinary diagnostic laboratoryin Yerevan, diagnostic laboratories in each Rayon, as well as 12 quarantinestations. Currently, public veterinary services employ about 1,250 veterinarians and 78 veterinary technicians. As of June 1, 1993, former state and collective farms employed an 82 Annex 2 additional817 veterinariansand 362 veterinaryassistants. An estimated850 veterinarians,mostly former state and collective farm employees, have lost their jobs as a result of the dismantlingof state and collective farms through land reform.
37. LivestockBreeding and ArtificialInsemination. The Departmentfor LivestockBreeding and Artificial Insemination(Al) under the Ministry of Agriculture is responsible for operation of the nationalbreeding program for all livestockanimals, except for poultry, which comes under the Ministry of Agriculture's Poultry Production Division. In the past, the Departmenthas had 41 cattle breeding farms and five pig breeding farms as well as six Al Centers and one Al post in each of the 39 Rayons. The nationalbreeding program includesmilk and meat recording, testing, data processing,selection and mating, and Al. Private breeding associationsdo not exist.
38. Since 1991 breed selection and AI have practicallystopped. Only four breeding farms are left. All testingfor milk and meat has ceased as the majority of test bull daughterswere slaughtered or are no longer traceable. Semen collectionhas ceased, as the number of breeding bulls dropped from 120 to 16 by mid-1993. Al for cattle fell to almost zero in the first six months of 1993 (comparedto almost 200,000 or an AI coverage of over 95% in the late 1980's), and to zero for pigs (most sows of the large pig farms were formerly artificially inseminated) and sheep (about 500,000 sheep were artificially inseminatedin the late 1980s).
Product Marketing
39. The Governmentis active in the marketingand distributionof most food products. The Ministryof Food is still the main buyer, but the canneries,dairies, and meatprocessing facilities are now entitled to sell their products directly to any buyer. The exceptionsare flour mills, which are allowed to sell flour only to Government-ownedbakeries, because bread is rationed and remains the only subsidizedfood product; and wineriesand liquor manufacturersbecause their productsare exportableand export of wine and liquor remains a governmentmonopoly. Becauseof the food shortage in the country, the canneriessell their products to the Governmentat prices lower-than-costfor school lunch programs and to other governmentand welfare oriented agencies.
40. Milk and meat productsare still sold mainly through state-ownedretail shops, primarily because state shops have cooling facilities. Prices for dairy products are now relativelyhigh, compared to pre-independence,and products are scarce. Yerevan, which has more than 30% of the national population,receives only 25 % of the milk supply, partly due to increasedtransportation cost. In regard to meat products, due to shortage of animal feed, price increases far exceed the increase in income and demand has been falling.
Financial Services
41. At present, availability of agriculture credit is not a limiting factor to production and investmentsbecause agro-industries,due to the blockade and shortage of energy, are operatingat very low production capacity. Farmers have low demand for inputs due to the difficult economicsituation. With improvementof the economyit is expectedthat credit would becomea limitingfactor to agriculture because the financial intermediarieshave low processing capacity for loan evaluation, as well as for savings, comparedto the substantialgrowth in potential clientele. The AgriculturalSector 83
42. The total credit granted by the banking system amountedto 37 billion rubles in 1992. Of this amount, about six billion rubles, or 16%, went to agriculture. The specializedagricultural bank, Agrobank, provided at least 80% of this amount and the remaining 20% was provided by other state banks and new private commercialbanks.
43. The Armenian State CommercialJoint-Stock Agrobank, or Agrobank for short, is the predominant lender to agriculture. It is a joint stock company and has a wide ownership of 1,549 shareholders, of whom about half are state enterprises under the supervision of the Ministries of Agriculture,Food, and LightIndustries, and the other half are non-stateenterprises such as cooperatives, private enterprises, associations and private individuals. About one half of loans are being made to shareholders.
44. Lending rates are highly negativeconsidering an inflation rate of over 1000% during the past year. Rates are set mainlyon the basis of the Central Bank discountrate. They are, however, lower than in other banks where rates ranges between 3% and 10% per month. For agricultural loans, the annual interestrate is 60 %', for non-agriculturalstate enterprises, 84%, and for non-agriculturalprivate borrowers and shareholders, 108%. The Agrobankobtains advances from the Central Bank at 30% and is limited to an interest rate spread of 4%, i.e. annual lending rate of 34%.
45. Arrears are surprisinglylow, amountingto R 328 million, or 6% of the loan portfolio. Rollingover loans, however, is common.
46. Branchstaff practicessome form of loan assessment. The purpose of loans, profitability, and repaymentcapacity are considered. Land titles and other assets are required to guarantee loans. For those who have no collateral to offer, the guarantee of the state enterprise is required. Loan recovery is not yet a problem, but is expected to become more critical in the future.
47. State and CommercialBanks. Since the banking sector is highly segmented,very little financingfor agriculture is provided by state banks and the new private commercialbanks. The State Industrialand ConstructionBank, which is the largest bank, lends no more than 1 % of its loan portfolio to agriculture. While the new private commercialbanks may be more inclinedto lend to agriculture, the amountof loans these banks may provide will not make any significantimpact on the availabilityof credit to agriculture in the next few years. There are also somecooperative banks but they are undercapitalized and their operations are oriented to urban commerciallending.
48. GovernmentLending to Agriculture. Becauseof the crucial need to sustain operations of critical state enterprises and to support the newly privatized farms, the Governmenthas launcheda special credit program. Loans are processed through the County Council. Agrobank administersthe lending program as a disbursementand collectionagent.
49. Informal Rural Credit Market. An informal rural credit market is slowly developing. Suppliersprovide farm inputs on credit but at significantlyhigher prices than governmentprices. In return, farmers deliver agriculturalcommodities as payment, thereby guaranteeingthe purchase of their products. It is reported that many farmers favor this arrangementprimarily because it is an assured market, versus the problem of being unable to collect from state agroprocessingenterprises. As the
I It is 34% if the loan is rediscounted by the central bank. 84 Annex 2 distributionof farm inputsbecomes privatized, trade related informalfinance may be expectedto expand.
AgricultureEducation, Research and Extension
50. AgriculturalResearch. There are 8 agriculturalresearch institutes in Armenia with 26 experimentalstations. The institutesare for:
- Agricultural Science - Viticulture, Vine and Horticulture - Plant Protection - Soil and Agro-chemistry - Vegetables - LivestockBreeding and Fodder Production(para 2.35) - Veterinary Medicine - Agricultural Economics
51. All Institutes have drastically reduced their research activities due to budgetary constraints. Traditionally,research has been financedfrom budgetary allocations, contributions from state and collective farms, and the sale of products by the relatively large farms attached to the research institutes. In the past two years, however, public funding has been significantly reduced and state/collectivefarm contributionshave ceased. Presently, availablefunding just about covers salaries and wages and, consequently, does not permit any meaningful research work. If the country's agricultural research infrastructure is to respond to the requirements of the emergent new farmers, substantialfunding and reorientation/intensificationof research activities is required.
52. The most important shortfalls of the institutes are lack of access to research results, technology, and methodologyof adaptive research in other parts of the world. Basicallythe institutes lack funds to provide training of Armenian scientists abroad, or to invite expatriatevisiting professors to Armenia; to establish up-to-dateagricultural libraries, including subscriptionsto essential scientific journals and literature;and for comprehensivevariety of field testing anddemonstration work on farmers' fields. Forage and pasture improvementresearch has been neglectedin the past, as has research in farm economics, farm management and marketing. Agricultural policy analysis is not pertinent to the contemporarychanges in the sector, includingprivatization. Finally, before the land reform implemented in 1991, organizedextension was not needed in the collectiveand state farms then self sufficientin regard to the required skills they needed. This situationis drastically differentnow that land is divided between several hundred thousandfarmers with no access to efficient agricultural extension.
53. Extension. Armenia does not have any formal organizationresponsible for transferring technologyand informationto farmers. There are 10 to 20 Ministry of Agriculturetechnical staff per rayon, such as agronomists,and livestock,machinery, and plant protection specialists. Althoughthese specialists have mainly administrative and supply-driven functions, they nevertheless can move informationto farmers. Many of them reportedlyprovide excellenttechnical assistance to the emergent new farmers.
54. Assisted by the U.S. Departmentof Agriculture(USDA), Armenia made commendable efforts in 1993 to develop a modern, client-drivenagricultural extension service relevant and responsive to farmers' needs. Six USDA extensionagents with 26 Armenian counterpartshad taken up their posts 7TheAgricultural Sector 85 at six regionalextension centers by mid-1993. Three additional centers became operationalby the end of 1993;and Governmenthas made R100 millionavailable to operate the centers in 1993, and to provide them with basic equipment and transport and working facilities. By the end of 1994, the extension service is expectedto have a staff of about 150 persons, nine vehicles, a substantialnumber of bicycles, and video recordingcapability. The service is already issuingweekly and monthlypapers for distribution to farmers, and has a weekly hour of "Rural Weekly"television coverage.
55. There is an ample pool of qualifiedstaff in the country from which extension agents can be recruited. Governmentis now in the process of finalizingextension concepts and design. The main considerationsin establishingthe extension service are: cost-effectivenessand lowestpossible recurrent cost requirements;how many rayons each extension center shouldbe servicing;distance of the extension centers and the extent of linkage to research and training facilities; and the extent of mass media utilization.
56. Training. Higher-leveleducation in agricultureand livestockproduction is being offered by the Agricultural University and the Institute for Zootechnology and Veterinary Medicine; and technician-leveltraining is provided by 10 agricultural colleges. A total of 598 higher-level students graduated in 1992, up by about 60% from the three years before, including 135 agronomists, 74 land conservationengineers, 194 mechanicalengineers, and 195veterinarians. However,training has not been reoriented to meet the challenges of privatized agricultural and livestockproduction. This means that there is not sufficientemphasis on cost-effective,smaller-scale production systems, appropriate natural resource management,farm managementeconomics, and produce marketing.
ANNEX 3: THE DEPARTMENT OF WATER SUPPLY AND IRRIGATION
1. The Departmentof Water Supplyand Irrigation (DWSI)has the prime responsibilityfor water supply, irrigation and drainage. Until 1991, DWSI was an independentMinistry. Since then it has becomea Departmentin the Ministry of Agriculture,headed by a Deputy Minister and a Managing Director. The headquartersare in Yerevan, with some 156 field units covering all irrigated areas in the country. The DWSI supplies and distributes water to some 225,000 smallholder farmers on approximately286,000 ha of irrigated land.
2. The Departmentemploys some 11,000 permanentand 3,000 temporary staff, the latter during the irrigation season. Due to financial constraints, the managementis considering a reduction of the permanentstaff by approximately10%. Most of the staff are skilled in the engineeringand technical aspects of water supply and in irrigation and drainage. However, project management,procurement, contracting,economic and financialassessment, and monitoringand evaluation,are activitieswith which they are unfamiliar. They also lack modernequipment such as computers, software,and basic laboratory equipment.
3. The DWSI is divided into three sections (see Organogram1). The largest section is the Constructionand Water Supply section, which has six divisions:
- Construction,with 56 field units; - Operation and Maintenance,with 66 field units;' - Pumping Stations, with 32 field units; - Vorotan-Arpa-Sevan-OperationalManagement, with two project units; - Rock Excavation; and - Industrial Support, which supervises productionof pre-cast concrete canal sections and the repair of pumps.
4. The Water Resourcesand Reservoir Section has two divisions:
- Water Resource Management; and - Special Assignment.
5. The third section deals with the planning of water resource development. The work is carried out by two independentplanning and research institutes:
- the Water Planning Institute(WPI), which plans and designs all water supply activities, irrigation and drainage schemes; and
- the Hydrological Studies Institute (HSI), which is responsible for applied research, hydraulicmodelling, water quality control and the introductionof new technologies. HSI has eleven laboratoriesand two research stations.
This division collects water charges from the Village Councils. OrganogramI Siructureof the Depoamentof Wolor Suppl and Irriatin
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Mu tw , n , * IP ANNEX 4: THE IRRIGATION REHABILITATION ENGINEERING PROGRAM
A. GENERAL
The EngineeringComponents
1. The irrigation rehabilitationprogram covers an area of about 164,700 ha, about 60% of the Armenian irrigated land. It consist of 12 irrigation schemes, includinggroundwater development.
2. There are four types of rehabilitationworks under the project:
* rehabilitationof the conveyance systems, including canals, aqueducts, siphons and hydraulicstructures in eight major irrigation schems: Shirak, Talin, Abovian (Kotaik), Arzni Shamniram,Lower Razdan, Octemberian,Artashat, and Getik. The area covered under this category is about 151,400 ha (92% of the project area);
* replacementof pumps and pressure pipelines. This category include four pumping schemes, of whichone, the Vorotan, is an independentscheme, covering about 1,600 ha (1 % of the project area). The other 3 - Azizbekov, Mkchian and Arevshat- are within two of the eight major conveyanceschemes to be rehabilitated;
* rehabilitation/replacement of about 650 tubewell pumps. These are located in the Ararat valley, within the commandareas of Octemberian, Lower Razdan, and Artashat conveyanceschemes; and
* the rehabilitationof four dam storage schemes (reservoirs). Three of these dam storage schemes - Aparan, Mantash, and Sarnakhpiur- have their own commandareas totaling about 11,700 ha (7 % of the project area), and one dam storage scheme (Karnout) is part of the larger Shirak conveyancescheme.
Sourcesof Water and Area of the Eight Major ConveyanceSchemes
3. All the eight schemesare characterizedby being river gravitationsystems. They are fed by four of the Armenian major rivers: the Razdan, Akhurian, Araks, and Debed (through its Chichkan tributary).
4. The Razdan river provideswater to four of the eight schemes;Abovian, Arzni Shamiram, Artashat, and Lower Razdan, which together cover about 79,600 ha (about 52% of the eight schemes).
5. All the irrigationprojects in the Ararat valley rely on supply of water from the Razdan River, of which about 300 million m3 per year originate from lake Sevan and 730 million rn3 originate from tributaries of the Razdan River below its departure from the Sevan Lake. Additional water is provided to the schemes irrigated by the Razdan sources, mainly by pumping from the lower Sevdjur River and its diversioncanals (throughArevshat, Mkchian,Ranchpar, and other pumpingschemes). The Sevdjur/KasakhRivers (with annual runoff of over 1,050 million m3 per year), and the Azat/Vedi(with 90 Annex 4
a flow of about 300 million m3 per year), are the main supplementarysource, along with a large amount of water pumped from tubewells (estimated at 500 million m3/year) that utilize the huge groundwater aquifer of the valley.
6. The Akhurian River, with average annual flow of 985 million m3 , is the main provider of water to two schemes, Shirakand Talin (43,800 ha). It is the only river in Armenia which is equipped with enoughstorage capacity to accumulatethe winter and the snow-meltflows that are required to back up the decreasing rivers' flows of the spring/summer irrigation season.
7. The Araks River, with an annual flow of 1,930 million m3 , feeds the Octemberian scheme (21,600 ha). Armenia's share in the Araks flow is 50 percent, accordingto an agreement with Turkey; the two countries share the diversion facilities. Presently Armenia experiences a shortage of water to provide the Octemberianscheme in the late season. Such shortage cannot be resolved before a joint reservoir being negotiatedwith Turkey, is constructed. Meanwhile,pumping from lower Sevdjur, drainagecollectors, and tubewellpumping cover the water deficit of the Octemberianscheme during the irrigation season.
8. The Chichkan/Pambakrivers, a sub-tributary and a tributary of the Debed River respectively, with averageannual flow of 1,090 million m3 , provide the water to the Getik conveyance scheme (6,400 ha). The Chichkan River flows decrease during the spring and summer. Only after completionof a storage reservoir (started in 1985but stoppedafter the 1988 earthquake)could the scheme be extended by about 50%. However, the winter flows could be used, in the meantime, to produce hydropowerto the Spitak area.
9. All the eight schemesare, basically, gravity systems. However, all of them are provided with pumping facilitiesof one of two types': (a) pumping that brings additionalwater to the scheme (i.e Sevdjur's Mkchian, Arevshat and Ranchpar, drainage collectors, tubewells); and (b) pumping facilities that lift water from the schemes' gravity main or secondary canals to higher lands within the command, or raise, within the command, the water pressure in closed pipes for sprinkler irrigation. The majority of the sprinklersare now abandoned,as the 1991 land reform resulted in land fragmentation,which made irrigation with the large sprinklersunpractical.
B. SCOPEOF WORKSREQUIRED
General
10. The rehabilitationworks under the project includesome 141.5 kmnof main canals, 523.2 km of secondary canals, 1,411.0 km of tertiary canals and 548.5 km of non-pressure pipes, of which 412.9 km are made of concrete and the balance of 135.6 km are made of steel.
11. Most of the conveyancenetwork is in an unsatisfactorycondition. The unlined canals have lost their geometricalcross-sections, due to earth slides, erosion, and encroachingvegetation. The conditionof lined canals is not much better. In many cases long stretches of lining have deterioratedand in places completelydisappeared. In the reinforcedconcrete aqueducts, the concretehas deterioratedand
I The pumpingdo not exceed a lift of more than 100 m. The IrrigationRehabilitation Engineering Program 91 water is leakingthrough the walls and floor of the aqueduct. In some places enterprising farmers have made use of a free water supply. In some locationsthe collapse of the aqueductappears imminent.
12. The deteriorationof the conveyancesystem may be attributed to a combinationof causes: inappropriate design; lack of quality control during construction; bad and insufficient construction material; indifferentworkmanship; lack of maintenance;normal aging; adverse climatic conditionsand possiblycorrosive water.
13. As experienceindicates, the qualityof concreteproduced in precast factoriesis better than the concretecast on the building sites. However, the precast concrete is also deficient. One of the main reasons for the low quality concrete is the use of unwashed aggregates and sand, with high contents of quarry dust. This, however, is relativelyeasy to correct. There are other deficienciesas well, as it was observedthat the joints are not interlockingappropriately. It is therefore necessary to establish norms where standarddesigns for precast elementsof varioustypes, 2 includingthe joints betweenthe sections,3 should be developedby DWSI.
14. In sections of the conveyancesystem, steel pipes of various diameters are used. These pipes are not under pressure. Sections of such defective pipes will have to be lifted and new pipes in- stalled. In other cases, the concrete supports on which the pipe rests have to be repaired or rebuilt. Wherever possible, part of the steel pipes should be replaced by the much cheaper and much more durable concrete pipes.
The Conveyance System
15. The works required in the eight conveyanceschemes and brief description of pertinent features are described below:
* The Arzni ShamiramScheme. The scheme commandsan area of about 34,000 ha in the Ashtarak and Nairi Districts. The rehabilitationworks within the conveyancesystems of the scheme includethe constructionof 20 kn of main canals, 47.3 km of secondaries, 343.0 km of tertiaries and 236.5 km of pipes, of which 163.8 km of concrete and 72.7 km of steel. The estimated cost of these works is US $4,418,000, or about 130.0 US$/ha.
* The Talin Scheme. The scheme commands an area of about 30,000 ha in the Talin and Bagramian Districts. The rehabilitation works within the conveyance systems of the scheme include the constructionof 280 km of main canals, 157.8 km of secondaries, 244.4 km of tertiaries and 11.3 km of steel pipes, and the estimatedcost of these works is US$ 2,100,000, or about 70 US$/ha.
* The Octembrian Scheme. The scheme commands an area of about 21,600 ha in the
2 Panelsto lineearth canals, aqueduct sections, small concrete flumes (canaletti) and controland outletstructures.
3 Precast units should be designed to interlockwith each other, and where water-tightnessis required the joints should be providedwith water stops and sealants. 92 Annex 4
Bagramianand Armavir (Octemberian)Districts. The rehabilitationworks of the scheme includetwo components:
(a) the intake and diversion canal on the Araks river. This include: (i) rehabilitation of the intake; (ii) constructionof the sand silting basin (0.82 km of the diversion canal); and (iii) increaseof the main canal capacity along the first 4 km from 35 m3/sec up to 53.0 m3/sec. The rehabilitationis in compliancewith an agreement with Turkey (March 30, 1979) for increasingthe intake and the diversion canal capacity for better operationand maintenanceof the irrigation system4; and
(b) the conveyancesystem, which include: constructionof 39.6 km of main canals, 79.0 km of secondaries,and 216 km of tertiary canals. The estimated cost of these works - including the diversion - is 2,155,000 US$, or about 99.8 US$/ha.
* The Artashat Scheme. The scheme commands an area of about 24,000 ha in the Artashat, Masis, Yerevan and Ararat Districts. The rehabilitation works within the conveyancesystems of the scheme includethe constructionof 19.9 km of main canals, 41.0 km of secondaries,265.6 km of tertiaries and 85 km of pipes, of which 71 km of concrete and 14.0 km of steel. The estimated cost of these works is US $2,429,400, about 101.2 US$/ha. In addition US $6,156,000 (257 US$/ha) would be investedin the two pumpingschemes: Azizbekovand MkchianI & II, that comprise part of the Artashat conveyancescheme.
* The Low Razdan Scheme Complex. The complexscheme comprises five sub schemes and commandsa total area of about 13,300 ha in the Yerevan, Echmiadzin,and Nairi Districts. The rehabilitation works within the conveyance systems include the construction of 12.0 km of main canals, 144.4 km of secondaries, and 46.0 kn of tertiaries. The estimated cost of these works is US $1,982,400, about 149.1 US$/ha. In addition US $3,121,000 (235 US$/ha) would be invested in the pumping scheme of Arevshat I & II that is also part of the Lower Razdan conveyancescheme.
* The Shirak Scheme. The scheme commandsan area of about 13,800 ha in the Akhurian District. The rehabilitationworks within the conveyancesystems of the scheme include the constructionof 7.1 km of main canals, 28.7 km of secondaries, 167 km of tertiaries and 114.5 km of pipes, of which 103.1 km of concrete and 11.4 km of steel. The estimatedcost of these works is US $1,578,600 or about 114.4 US$/ha.
* The Kotaik (Abovian)Scheme. The scheme commandsan area of about 8,300 ha in the Kotaik (Abovian)District. The rehabilitationworks within the conveyancesystems of the scheme include the constructionof 2.9 kin of main canals, 93 km of tertiaries and 59.7 km of pipes, of which 49.0 km of concrete and 10.7 km of steel. The estimated
3 4 The intakewas constructedin 1930on thc Araks river, with a total capacity of 35 m /sec,equally divided between the riparians. Turkey had already completedthe works on their river bank, rehabilitatedits intake and increasedthe diversion capacityto 53.() mt'sec. ThteArmenian completedso far only the design (in 1991). but. becauseof lack of funds did not start the rehabilitation. ThleIrrigation Rehabilitation Engineering Program 93
costs of these works is US $1,260,300 or about 152 US$/ha.
* The Getik Scheme. The works within the conveyancesystems include constructionof 8.0 km of main canals, 25 km of secondary canals, 36 km of tertiaries, 3.6 km of 2 parallel II-SP steel syphons, and 34.3 km of non pressure pipes, of which 26 km are of concrete. The estimated cost of these works is US $2,565,000 or about 400 US$/ha, includingUS $496,000 for on farm systems on 6,400 ha, the eventual irrigated area of Getik. The Getik scheme rehabilitationwas prepared in detail quite a long time ago. Implementationhas started in 1986 but stopped after 1988 earthquake. The scheme was designed and built as a gravity supply system,diverting the water of the ChichkanRiver, and providing it to about 4,000 ha at the river outlet to the Pambakvalley. In the early 1980s,a dam site was selectedabout 4 km upstream the existingdiversion, and work has started on the dam site in 1986. After the 1988 Spitak earthquake,whose epicenterwas located some 15 km from the dam site, the diversion canal was severely damaged, and a provisional pumping station was installed at the entrance of the main canal from ChichkanRiver to the commandarea at both banks of the Pambak valley, and the works on the dam were discontinued. It is now intended to complete the project as a gravity scheme, with a new, larger canal at a higher elevation. The canal intake shall start downstream the dam site, at elevation + 1,850 m above sea level. The existing command, of 4,040 ha, which at present is only partially irrigated, would be increased by about 2,400 ha of new areas, with complementary water supply to the existing command and, eventually, generation of power at both the dam site (will not be built under this project), and the tail end of the main canal.
The Pumping Schemes
16. Four pumpingschemes are includedunder the project. In all the four schemes,pressure pipelinesconveying water from the pumping stations to the distributionsystems and some of the pumps are in critical condition, and the replacementof the pressure pipes and some of the pumps are included in the project. However, radical anti-corrosionsteps are required to be introducedpromptly, to avoid the samesituations in the future in these and other schemes. Protectingnew, as well as existingpipelines that still can be recoveredthrough lining, coating and other anti corrosive devices will be financedunder the project.
17. The works required in the four pumping schemes and brief description of pertinent features are described below:
* The Vorotan PumpingScheme. The Vorotanpumping scheme whichcommands an area of about 1,615 ha at the Goris District, at the far south east of Armenia, is part of a larger commandthat gets its water from the RegionalVorotan HydroelectricComplex. The rehabilitationworks within the pumping systems and the pressure pipelines of the scheme include: (a) replacementof 2,015 m of 720 mm steel pressure pipeline, with 8 numwall thickness; and (b) replacement/rehabilitationof 3 pumps, at the total estimated cost of US $188,000.
* The AzizbekovI and II PumpingStations. The AzizbekovI and II pumping stations are commandingan area of about 1,622 ha at Masis District, within the upper reach of the 94 Annex 4
Artashat scheme. The rehabilitationworks include replacementof 2,800 m of 630 mm steel pressure pipeline, with 8 mm wall thickness, at an estimated cost of US $156,000.
* The Mkchian I & II Pumping Stations. The Mkchian I & II pumping stations are providingcomplementary water to the Artashatscheme whichcommands an area of about 24,000 ha at the Yerevan, Masis, Artashat and Ararat districts. It comprises two pumping stations, the lower with a discharge totaling 16.6 m3/sec, an average yearly supply of 122 million m3 , a lift of 75 m, equipped with 9 parallel pumps with 14.4 mw; and the upper one, at elevation 872 m above sea level with a discharge totaling 9.4 m3/sec, an average yearly supply of 74.8 million m3, a lift of 85 m, equipped with 6 parallel pipes, with 9.6 MW. The rehabilitationworks within the pumping systemsand the pressure pipelines of the scheme include: (a) replacementof 18,000 m of 1,850 mm steel pressure pipeline, with 14 mm wall thickness and 1,784 m of 1,800 mm steel pressure pipeline, with 14 mm wall thickness; and (b) replacement/rehabilitation of 15 pumps, at an estimatedcost of US $6,000,000.
* The Arevshat I & II Pumping Complex. The Arevshat I & II pumping complex is providingsupplementary water to the "LowerRazdan complex" which commands an area of about 13,300 ha in Yerevan, Echmiadzinand Nairi Districts. The rehabilitationworks within the Arevshat I & II pumping systems and the pressure pipelines of the scheme include: (a) replacementof 15,800 m' of 1,420 mm steel pressure pipeline, with 12 mm wall thickness, and (b) replacement/rehabilitationof 7 pumps, at an estimatedcost of US $3,121,000.
The TubewellRehabilitation Program
18. Groundwaterprovides water in the Ararat Plain for irrigation and drainage, for drinking water, and for industrial use. In irrigation, the main role of groundwateris to provide complementary supplytoward the end of the irrigation season, when other river sources are dwindlingat a crucial time for the plants, negatively affectingthe yields. Wells for complementaryirrigation are used only for 2 to 3 monthsper year. Another use of wells is to drain, through pumping, the large areas of lowlands, which are negativelyaffected by high water tables. Of the 650 wells includedin the project, more than half (347 units), covering an area of over 11,000 ha, are used for drainage, for up to 5 to 6 months per year. Their water is not lost however, as they are drained into collectors and their water is reused for irrigationat adjacent lands. The wells are of various depths, from 30 to 270 m. The shallowerare the drainagewells, with capacitiesof up to 70 liters per second (250 m3/h), operated with electricsubmers- ible pumps. The most common are 100 m deep wells, with an average capacity of 120 m3/h (33.3 liter/sec),and with pumping head of about 60 m.
19. The conditionof the equipment, both mechanicaland electrical, is unsatisfactoryand hundredsof pumps are out of service. One hundred and sixty pumps were locally repaired prior to the 1992 irrigation season. The submersiblepumps are made in Russia and their life expectancy, under normal working and maintenanceconditions, is four years.5
5 The reported life expectancyof the Russian pumps is low by any accepted westernstandards, where eight years is dte norm. The IrrigationRehabilitation Engineering Program 95
20. Under the project about 215 pumps would be replacedduring each of the first three years of project implementation(650 in total), at an estimated cost of US $6,950,000. The replacementis expected to be within the Octemberian, Lower Razdan, and Artashat conveyance schemes. The replacementwould include: (a) 290 pumps in the OctemberianDistrict (along the Octemberiancollector and Sovietachenpumping station); (b) 143 pumps in the EchmiadzinDistrict (around Sovietachenand Igerlichpumping stations and Sevdjur,Lower Razdan,Echmiadzin and Nedjirly collectors);(c) 29 pumps in the Masis District (aroundNedjirly and Artashatcollectors); (d) 65 wells in the ArtashatDistrict (along Artashatand Arazdaiancollectors); and (e) 123 pumps in the Ararat District (also along the Artashat and Arazdaiancollectors).
21. The proposed three-year reconstructionand rehabilitationprogram would include:
* Boreholes:
(a) drilling of 150 new boreholes in strict compliance with existing design specifications;and
(b) rehabilitationof 300 existing boreholes.
* Pumpsets:
(a) supplyand installationof 250 new pumpsets, includingthe required meteringand control equipment;
(b) supply of spare parts for the existing Russian pumps, to enable the repair and overhaul of approximately400 pumpsets;
(c) rehabilitationof 400 Russianpumpsets; and
(d) installationof 650 new and rehabilitatedpumpsets.
Rehabilitation of Storage Dam Schemes
22. The project would provide financing to rehabilitate four storage dams which are in extremelyprecarious condition. All the four dams are earthfill and have a service spillwayand irrigation outlets. The investigationand survey of the storage dams focusedon defectsand on changesin the design criteria since the dams were constructed. That included:
* Revisedseismic criteria for dam design. All the dams were constructedprior to the 1988 earthquake.At that time, seismic design criteria was for dams to withstandthe effects of earthquakeswith an intensity of eight on a Mercalli scale of twelve. After 1988, the criteria was changed, and dams must now withstandan earthquake intensityof nine.
* Spillway designs were reviewedto ensure that the embankmentswill not be overtopped because of inadequate maximum flood flow assumptions, or insufficient freeboard. Present Armenian practice is to select a design flood on the basis of long term stream 96 Annex 4
flow measurementsand by statisticalprojections. Western practice is to design spillway capacitiesfor a flood resulting from a storm producingProbable MaximumPrecipitation (PMP). If investigationshows that the dam may be overtopped by flood flows generated by such a storm, correctiveactions would have to be taken. In addition, large snow melt flows, which are typical to the Armenian watersheds, need also to be taken into consideration.
* In at least one dam - the Karnout - dangerous deformations of the embanlanents, includingmovement and settlement,were observed. In other dams, seepagethrough the embankmentsand piping were observedas well.
* In all the four dams erosion and severe deterioration of concrete in tunnel liners and structures were observed. Water leaks through the concrete and at constructionjoints exceedany reasonablelevel expected from the normal ageingprocess of these structures.
* Preventivemeasures are necessaryas well, as there is an accelerateddeterioration of steel pipes, gates and valves due to a continuouscorrosion and cavitation.
23. The storage dam rehabilitationprogram under the project would include repairingof the followingdefects:
* the Aparan Storage Dam: The dam maximum height is 51 m. The storage capacity is about 91 million m3 at normal water level of 1835 m. Serious leakagesappear along the right hand side of the reservoir, with water losses estimated at 1.0 m3/sec. Attemptsto seal the bottom and sides of the reservoir through a program of grouting was discontinued, because of lack of funds, and should be completed along a length of approximately950.0 m. Wet spots were observed on the downstreamslope of the dam embankment. The concrete lining of the spillway tunnel and the chute is completely destroyedin many sections. Also, in varioussections along the outlettunnel the steel lin- ing has collapsed and water is leaking into the tunnel; the regulation gates and their lifting gear need to be replaced and the cone valves repaired. The cost estimate for rehabilitationof the Aparan dam is US $724,100.
* the MantashStorage Dam: The dam height is 31 m and it is constructedof zoned layers with a central imperviouscore. Cutoff and grout curtains are provided. The damcrest is at elevation of 2,000.8 m with a maximum height over the river bed of 31 m. The storage capacity, at normal water level of the reservoir, is 7.9 million ry3 net. There are numerous cracks and serious deterioration of the outlet conduit, with muddy water leaking into the conduit. The accumulationof mud at the bottom of the conduit is an indication that an internal process of erosion and piping is taking place. Repair of the conduit is urgently required. The concrete in the intake tower, the spillway, and the spillway channelalso requires rehabilitation. The irrigation outlet pipe is corroded and the regulationvalves shouldbe repaired. The estimatedcost for the rehabilitationof the dam is US $179,100.
* The SharnakhpiurStorage Dam: The dam height is 29 m with a storage capacity of 4.2 million n3. The dam is built as a zoned embankment with a central impervious core. T7heIrrigation Rehabilitation Engineering Program 97
The dam crest is at an elevation 1,847 m with a maximum height over the river bed of 29 m. A side channel spillwaywith a crest of 19 m. is locatedat the left side of the dam and evacuates flood flows through a chute of 170 m. long. Water is released for irrigation through an intake tower with three gate entrancesat different water levels and conveyed through a 600 mm steel pipe laid in a gallery through the embankment. Presently the conditionof the dam requires that the spillwayhas to be reconstructed,and a stilling basin at the end of the chute provided. Strong vibrationsendanger the outlet works. The intake should be redesigned and the gates and valves rehabilitated. The estimated cost for the rehabilitationof the dam is US $188,200.
* The Karnout Storage Dam: The dam height is 35 m with a storage capacity of 21.3 million m3 at normal water level of 1,598.7 m. The dam is constructedof homogenous layers. The crest level of the embankmentis at 1,601.0 m. A side channelspillway with a 28.0 m long overflow weir is located at the left side of the dam. Water is released through an intaketower and regulatingvalves, and is conveyedthrough a steel pipe laid in a reinforced concretegallery through the dam structure. Another regulating valve is installed in a valve chamberat the toe of the dam. The dam embankmentis in process of settling. The elevation of the dam crest is now 1,600.2 m, some 80 cm below constructionlevel and only 90 cm above maximumwater level. The original wave wall has also settled. Interimmeasures such as reducing the storage level in the reservoir are imperative. The concrete of the outlet conduit is cracked in several places and there is leakageof muddy water into the gallery. This indicatesserious internalerosion ('piping') in the dam structure. The estimated cost of the dam rehabilitationis US $222,300.
ANNEX 5: WATER MANAGEMENT
A. CURRENT STATUS
SystemFunctioning
1. The Armenian irrigation systems clearly indicate a state of transition. The land reform program has turned former collective and state farms into a patchwork of small holdings, generally ranging from 0.5 to 1.2 ha, which in many cases are split into several plots in various locations. The people presentlyirrigating the land are former factory workers, schoolteachers, shop keepers, bus drivers and farmers, etc; associatedwith the original collectiveor state fanns. Many of the present farmers are inexperienced,working their new holdings instead of pursuing their chosen occupations.
2. The irrigation delivery systems were designed to service large farms which may have irrigated 50 to 400 ha from a single headgateor canal outlet. Presently, the same outlet may service400 or more farmers, which in many cases, makes it difficultto deliver necessary irrigation water to farmers not in close proximity to the canal outlet. Therefore, many farmers have installed earth ditches to transportirrigation water to their fields. In some instances, the earth ditches must be installedacross one or more adjacent farm plots. Some adjacent farmers will not allow ditch easementsthrough their plots due to seepage and/or the loss of land. The result of these kinds of conflicts is that many farms do not receive adequateirrigation water during the irrigation season.
3. At this time, no formal networkof authorityto implementon-farm infrastructurehas been developed,and the result is a helter-skelterinstallation of earthendelivery ditches. Further consequences are that some farmers located even a minimaldistance from the existing outlets have no way of directly receiving water and no dependable scheduling technique is used to benefit all farms. In some areas, water distributionis erratic and many irrigators have broken concrete canals and pipes at points closer than the originally installed outlets in order to get irrigation water, and then repairing the broken canal or pipe with soil or sod, which leaks. As the number of repaired points in a canal system increases, the delivery efficiencydecreases. Consequently,those near outlets have a virtually unlimitedwater supply and in many instancesthose at or near the end of the system remain water short.
4. The primary irrigation delivery infrastructure is designed for surface irrigation and consistsof main canals with secondaryand tertiary canals, supplementedby lift pumpingin variousplaces to raise the water for gravity flow. A small number of former state and collective farms had more modern irrigation infrastructure--centerpivot and sprinkler systems--of which undergroundpipes and risers remain. These systems are rarely used because of their energy demands, but primarily because they were intendedto irrigate a large area of a single crop, thus they are not suitablefor the current farm structure, with smaller diversifiedplots growing various crops that require differentwatering schedules and applications.
5. Stories of system difficulties, poor water service and poor ditch/canal maintenanceare numerous. There are also many instances in which things work much better than might be expected, given the poor conditionof the infrastructure,an administrationthat is under funded and unpreparedto deal with so many clients, and the dishearteningenvironment in which farmers must work. They cannot afford inputs; they almostcannot afford to transport their produceto market. In some instances,payment by state agribusinessesthat purchase the farm produce is delayed for months. Nonetheless,the farmers 100 Annex 5 are now charged for their water, an unprecedenteddevelopment.
6. The most problematicareas of the irrigation systems are those that depend on electric pumps to lift water to gravity systems which irrigate 42% of the total farmed land in Armenia. Unpredictableblack-outs and low voltage due to a shortage of electricity have paralyzed many of the pumps, leaving farmer without water. This past irrigation season the Ministry of Energy, due to lack of resources, was only able to supply 46% of the electricity needed to meet the pumping requirements for crop production. This predicamentleft many farmers with minimal water, and farmers at the end of most pump systemshad no water at all.
Water Users, Water Distributors,and Delivery
7. Despite the nominal establishment of water user associations (WUA), there is little evidencein the field that such organizationsactually function. In reality, water users are organizedby villages,with outlet boundariescorresponding to village boundaries. Last year, during the first irrigation season after privatization,the Operationand MaintenanceEnterprise (OME) made agreementswith each individual farm unit specifying the amount of water the unit would receive and the water fees for the season. The OME was overwhelmedby approximately260,000 agreementsand the governmentwas disappointedby a collectionrate of a mere 27% of the water charges in 1992. Therefore,the government instructed OME to make agreementswith Village Councils for delivery and charges this second year. The Governmentexpected the VillageCouncils to executeagreements with individualfarmers and collect the water charges. This expectationhas only partially been realized.
8. Under this Village Council arrangement, water is managedby water masters or water distributors who are supposed to managedistribution within an area up to 150 ha, generally supporting 300 to 400 farmers. This means two to four water masters per village. Originally, water masters were paid directly by OME. With the new agreements, the villages are to retain 7 to 10% of the collected water charges to pay the water masters a fair salary. Accordingto official OME descriptions,the water miastersgather information about crops to be grown the next growing season. With the technical assistanceand approval of OME and based on crop, area, and provisional delivery schedule, the village councilsprepare a precise water demand estimateupon whichthe water chargesare levied. Farmers are expected to pay 50% of the estimated charge by February 20, and are billed for actual deliveries by August 1 and again at the end of the irrigation season.
9. In actuality, most water users sign agreements with Village Councils but few really understandthe distributionschedule. Water users are given little informationon the availabilityof water or appropriatetimes to irrigate. Thereforewhen water is available,water users irrigate with little or no cooperationamong farmers. Withoutirrigation schedules or lack of compliancewith proposedschedules, water is not availableto those users farther away from the canal. To eliminatethe unpredictabilityof water delivery to these end users, a responsiblewater master must establish irrigation schedulesamong farmers and ensure water is delivered to the appropriate farm when scheduled.
10. Currently, water masters perform their intendedfunctions in some areas, but are virtually invisiblein others, except when trying to collect water charges. Not surprisingly,overall paymentrates are low; if paymentsare made at all most occur at harvest time. In most cases, Village Councils have collectedvery little (11 % by October 1) leaving the water masters essentiallyunpaid this year, which in turn affects their performance. This year, farmnersin many parts of the republic suffered frost damage Water Management 101 for which they are scheduled to receive compensatorypayments. The government arranged to have outstandingwater charges deductedfrom the frost payments and paid directly to OME.
11. Existing institutionalarrangements do not encouragecooperation among water users, and the design of the existing irrigation system does not encouragethe establishmentof WUA. Since the privatizationof land, irrigation delivery units are too large and ill defined to foster functioningwork related groups. Rather, they constitutehuge units of 300 - 400 people, too many to be consideredWUA. With the installationof headgates, secondary,and tertiary canals, smaller delivery units will be formed and WUA can be establishedand function as intended.
B. ISSUESAND RECOMMENDATIONS
System Design
12. Water deliveryunits are presentlytoo large to be operatedefficiently or to support WUA formation. The present design is lacking in farm infrastructure. In many areas, secondaryand tertiary canals need to be installedto deliver water to the approximatelocation of several farms and then install earth ditches strategicallyto deliver the water directly to individualfarm plots. Other areas simply need earth ditches installed from the existing canal to deliver water to individual farms. In any case water measurementand/or meteringdevices must be installedto ensureproper watermanagement and minimize the effect on overall water quality. The on-farm infrastructure can be simple, and in most cases can consist of precast concrete and earth ditches, simple headgates, and weir control measuring devices. Nonetheless,before a complete redesign of the water distribution is implemented,it would be useful to carry out pilot projects in a few villages to transform the systemsby creating major delivery units of perhaps 75 to 100 farm units, further broken into small farmer outlet units, encompassing10 to 15 farm units. This should be done in consultationwith the Village Counciland farmers.
13. The pilot projects shouldvary in design and could includepipe with individualoutlets and water meters, concrete ditches where siphon tube irrigation can be demonstrated and ditches with automaticoutlets. In additionsome areas where sprinkler systemsnow exist but are not in use should be includedin the pilot projects utilizingthe sprinkleroutlet, installingwater control valves, water meters and various methodsto distributewater to the field. Technicalassistance would be required for location and design of pilot projects along with training of irrigators and water masters in irrigation water management. After pilot projects are initiated,monitoring must be establishedto identify which one is best suited for particular situationsand practices.
14. Additional headgates should be installed at strategic locations to allow more efficient deliveryof irrigationwater. Water users have damagedcanals and pipes at locationscloser than installed outletsto get irrigation water because existingheadgates are too far away and/or water is too difficult to get to individual fields. OME should be able to determine additional headgate requirements while preparing plans and schedulesfor standard repair and maintenanceof the irrigation system. 102 Annex 5
Reliabilityof Water Delivery
15. Experiencein many countries has shownthat the most critical characteristicof irrigation service is reliability. It is more important for farmers to have reliable water deliveriesthan it is to have adequate supplies, because they can adjust to shortages if they know when to expect water. Reliable supplies enable farmers to work together cooperativelyto meet their varying needs, while unreliable supplies encouragemisuse, over watering, and competitionamong farmers. The deterioration of the irrigation infrastructurein Armenia, together with the parcellizationof previously large farms, threatens the economic and social status of farmers. Priority should thus be given to rehabilitatingthe existing systemsto assure functioning;designing inner irrigationstructure for improved water delivery to make water more accessibleto farmers; promotinggravity alternativesin systemsthat now depend on irregular energy supplies; and improvingO&M and establishingprocedures to sustain O&M. All of these steps will improve reliability.
Water Charges
16. For the immediatefuture, given the precarious economicstatus of farmers, and uncertain opportunitiesfor non farmers who currentlywork their new landholding,a portion of the recurring O&M costs should be covered by project funds rather than depending entirely on water charges. Meanwhile, the process of collecting water charges should be established more systematicallyand with better information,clearly indicatingto farmers that charges will be raised graduallyuntil they meet real costs. At the same time information about costs should be disseminated, and farmers and Village Councils should have an active role in setting local O&M priorities and budgets so they know how their money is being spent. Once the current major constraints on the economy disappear, transporting products becomes more economical,and electricity is more reliable, full cost recovery should be phased in over approximatelya five-yearperiod.
17. Presently, energy costs for pumping irrigation water is totally subsidized by the Governmentof Armenia through the Ministry of Finance. Since energy costs are increasingat a higher rates than farm income, energy subsidiesshould be continueduntil the economic status of the farmers is improved. The Government is now considering changing its policy and passing energy cost on to OME. If this happens project funds should cover such energy costs as part of the O&M cost package for which farmers are responsible. The change should be introduced transparently however so that farmersknow far in advancehow much their water charges will increaseas the subsidyis withdrawnover a five year period.
18. Over time, water charges shouldbe set to reflect real O&M costs of the region, including a share of overall institutioncosts, and electricitycharges shouldbe added accordingto local use. That is, systemswithout pumps should not subsidizepumping costs of other systems,but the pumpingcharges should be pro-rated accordingto all who benefit from the pumping. Similarly, if highland water charges are to be subsidized, the subsidy should come from governmentrevenue, not from the water charges of lowland farmers. In addition, the cost of river and stream bank stabilizationand mud flow protection and restoration should not be included in water charges as they presently are. Such activities have national environmentalimpact, rather than benefiting farmers alone, thus they should be paid from governmentrevenue funds. Drainage improvementcosts that are attributableto non local causes, such as high river levels from increasedhydroelectric production and neighboringirrigation systems that raise water tables, likewise should not be includedin present water charges. Water Management 103
19. Over time, as WUA developand assume increasingresponsibilities for O&M, they should become the collection agents for water charges. Until then, Village Councils are the most reasonable collectionmechanisms, through water masters or other agents. At present, however, the Councilshave little incentiveto assumethe responsibility. In order to operate and maintain the irrigation system, it is feasiblefor the governmentto advancefunds to OME and charge them to VillageCouncils, which would then be motivatedto collect water charges in order to repay the advance. As full cost recovery is phased in, the portion that is to be collected from water users would be advancedto OME, thus getting water users and VillageCouncils involved gradually and consistently.
Discipline
20. Current water laws provide sanctionsfor destructionof canals and nonpaymentof water charges, but existing fines are small and there is no real enforcement. Village Councils are responsible for imposingsanctions for destructionof canals and other infrastructure,as well as non paymentof water charges. The Village Councilsdo not want to assume responsibilityfor enforcement, for political and other reasons, and they also prevent OME from taking action. OME has no authority to enforce sanctions, however, it is trying to get legislationthat will enable it to work through District Councils. OME would like to levy fines for nonpayment,which would be multipliedevery year that the farmer is delinquent. Such action is bound to be self defeating, however as the larger the fine becomes, the less likely it will be paid. Consequently, this approach would not achieve the objective of inducing compliance. Ideallyenforcement should be direct and immediate,such as cutting off the farmer's water supply. The existing physical structure precludes such action, however, if the commandarea is broken into smallerunits, it would be possible to use group pressure to enforce payment if small outlet units are cut off when farmers in the group are delinquent.
21. Before this can successfullyoccur, a clear policy must be developed, supported by necessaryregulations or legislationand an enforceablemechanism must be establishedand promulgated. Given the intent of the project to phase in full cost recovery, these provisions shouldbe in place by the third year of project effectiveness,at the latest.
InstitutionalRe-orientation
22. OME is an administrativeorganization, rather than a service organization. Like most bureaucracies,OME treats farmers as subjectsrather than clients. One componentof technicalassistance shouldbe public relationsand managementsupport to transform OME into a focused, pro-activeservice enterprise. This would consist of several elements: develop clear and effectivecommunication channels from top managementto farmers and back up the hierarchy; develop regular informationcampaigns to inform staff and farmers about opportunities,constraints, and schedules; assist regional and lower-level staff to develop more effective ways to communicate with Village Councils and farmers; develop consultativeplanning programs that engage VillageCouncils and farmers in the process of settingO&M priorities and budgets; and prepare staff to be able to respond creativelyto a growing role of water user associationsboth as advising groups and managemententities, includingsuch actions as subcontracting maintenanceresponsibilities to groups.
23. Village Councils currently have mixed roles in water managementdepending on the interestsof the chiefs. Technicalassistance should be availableto Village Councilsto engage them more 104 AnnexS actively in technicalwater managementissues, rather than political. Informationand training could be directed to strengthensuch a role, and at the same time, financingcould be used to structure the interest of the Councils. For example, Village Councils currently agree to collect water charges for OME, and then followthe agreementwith greater or lesser interest. If the governmentadvanced funding to OME and billed the Councils, they would have incentive both to collect water charges from farmers and to demand high quality service from OME.
Water User Associations
24. Over time, WUA should be formed and given responsibilityfor O&M and water charge collection. A two-tiered structure should be developed, with outlet-level water user groups of 10-15 farmners,aggregated into a village (system)level umbrellaassociation. Present conditionsare unsuitable for investmentin forming WUA, as the physical structure does not support user groups and the Village Councils are not suitable for the aggregating role. Nonetheless,the rehabilitationproject can play an important role in establishingproper conditions. First, pilot programs to develop simple, low cost methods of dividing commandareas into manageableunits trying different techniquesand methods to determine which approachis most appropriatefor Armenianfarmers. Second,reorienting the OME and Village Councils will create a better institutionalclimate for WUA to develop. Third, as OME gains institutionalexperience as a service organization,it will learn whichO&M tasks can be delegatedto local offices and eventually to WUA, thus increasingthe underlying rational for such groups. Technical assistancewill be structuredto facilitatethese processesand direct resourcesand attention appropriately, both directly and indirectly, through nongovernmentalorganizations, if promising ones are found.
C. TECHNICAL ASSISTANCE
Objectives
25. The field-focusedtechnical assistance team will work in five major areas, each of which has a specific objective to be achievedduring the period of assistance:
(a) Institutionalreorientation Objective: Change the OME from an administrativeorganization that manages water suppliesand water infrastructureto a client-centeredservice organizationthat transparentlyserves the needs of its clients.
(b) Decentralizedwater delivery Objective: With the active participation of Village Councils and farmers, design and construct secondary channels and outlets (major on-farm civil works) to serve no more than 50 farmers each.
(c) Water User AssociationsPilot Schemes Objective: WaterManagement 105
Determine the most effective ways to organize farmers into active, effective WUA by executing 3 or 4 pilot schemes designed to test different participatory methods and approaches. Active and effectiveWUA assume responsibilityfor developingminor on- farm channels and outlets serving 10-15 farmers, low-leveloperations and maintenance, water schedulingand the collectionof water charges.
(d) National Water User AssociationsProgram Objective: Develop and begin implementationof a program to establish active WUA throughout Armenia, based on insightsgained from pilot schemes.
(e) Cost Recovery Objective: Develop and implementa program to achieve full O&M cost recovery within 5 years of project-effectiveness,in conjunctionwith WUA organizingefforts.
Institutional Reorientation
26. Comparedto most irrigation agencies,OME is in an advantageousposition. It has a clear mandate, potential financial autonomy and a relatively lean staffing pattern. In order to make the best use of those advantageshowever, OME needs to change one significantcharacteristic that it shares with most irrigation agencies: it has an administrativeorientation, as opposed to a managementorientation. Consequently,OME sees itself as the administrator of infrastructure and water supplies, rather than a client-centeredservice orientation, in which it acts as a managemententity responsiveto the needs of its clients. The administrativeorientation is manifest in a number of ways:
(a) OME gives priority to developingits revenue flow (water charges) rather than assuring water delivery, thus the "success" of a district office is determined by payment rates, rather than the reliability or adequacyof water delivery.
(b) It gives priority to farmers' obligations(to pay water charges), rather than their rights (to know about O&M programs and budgets, and to receive reliable, equitable service).
(c) OME issues directives, deliverycalendars and water charge scheduleswithout following up to see whetheror not farmers receive the informationand directives, understandthem or consent to them.
(d) OME collects water charges to fund budgets and work programs that are internally generated; however, farmers are not informed about the use of water charges and have no say in setting O&M priorities or in developingor overseeingthe implementationof work plans, thus they are not sympatheticto OME pleas to pay their fees.
(e) OME's paymentschedule reflects the budgetary needs of the enterprise, rather than the seasonal cash flows of the farmers, thus requirementsto pay do not necessarilycoincide with ability to pay.
(f) OME recognizesthat one of the most difficult problemsfarmers face is to establish field 106 Annex S
channelsto move water to their individualplots, which involvesboth technicalskills and the cooperation of neighbors, but it has taken no steps to prepare sub-district staff, Village Council members, or water distributors to provide assistanceto farmers in this area.
27. Over time, OME must depend on water charges to generate the revenue it needs to operatesatisfactorily. To enhancethe likelihoodthat it can generate the needed revenue, OME will need to change the way it does business. In a word, OME must reverse its overall orientation, becoming accountableto its clients, the water users, rather than expectingthe water users to be accountableto it. This will require changes in substance and in appearance; it must adopt new objectivesand procedures and it must make sure its clients know about the changes. Specifically,technical assistance will help OME acquire at least the following six characteristics:
(a) Informative. OME must make concerted efforts to inform other officialsand farmers about the enterprise--its objectives and plans, calendars and budgets, strengths and weaknesses, opportunities and constraints, and its needs and deeds. It should adopt simple, direct ways of disseminating information and ensure that the messages reach target groups. It must formulatea coherentcommunication strategy and mobilize various communicationsmethods to implement the strategy, acquiring the skills needed to packageand disseminate its messageseffectively.
(b) Responsive. OME must develop consistent, dependableways to identifyproblems and needsof its clients, and to adapt its programsto resolveproblems and meet the needs that are articulated, or else provide adequate feedback to enable clients to understand why there is no response. Equally important, it must demonstrate concretely how it is responsive--specifyingwhich ideas are generated and how they are incorporated into policy or program changes--andinform clients accordingly.
(c) Transparent. OME operations and budgets must be made transparent so that clients know what resources are required, how they are used, and what will be the result. Without transparency,water users have no way of knowing whether or not their money is being spent productively, effectively,and efficiently. Unless they are convincedthat they get valuable services for their money, OME's clients will not provide resources unless they are coerced. Transparencyin planning, budgeting and implementingwill enable OME to gain the confidenceand support of its clients.
(d) Participatory. OME must bring clients into the decision-makingprocess. It should developmechanisms that enable water users, or water user representatives,to participate in processes that set priorities, develop budgets, oversee implementation,and monitor quality. Participationsupports transparencyand assures accountability,with little cost and great potential benefits to an enterprise like OME.
(e) Proactive. OME must be responsive, transparent, and participatory; however as a professionalenterprise, it must also be proactive, anticipatingproblems and needsbefore they arise, and preparing itself and its clients to face them. In short, OME cannot be effective if it is passive and responsive; it must assume leadership in ways that demonstrate professionalismas well as responsiveness, that demonstrate a long-term WaterManagement 107
vision of the enterprise and irrigated agriculture, as well as a precise understandingof the current situationand how to move from the present to the future. This characteristic differentiatesOME from its clients, and potentially is the greatest value obtained from water charges.
(f) Skldled. To be proactive and credible, OME must have the skills needed to assume current and future responsibilities. In the most concrete sense, this means that all the people engaged in OME operations--full-timestaff, part-time workers and water distributors-are fully qualified to undertake their responsibilities. OME has moved quickly from a governmentalunit that delivers water to large collectiveand state farms, to an autonomousenterprise that delivers water to thousandsof farmers working on small plots, without changing the orientation or the skills of its staff. The new arrangement requires new public relations skills, as well as field skills, such as the ability to help farmers create and maintain field channels, which staff must acquire in order for OME to be seen by farmers as a credible, professional,and useful organization. At present such credibilityis at risk.
28. A technical assistance institutional specialist will help OME acquire these six characteristicsby assessing OME communications,operations, and skills, and by working with staff to formulate and implement programs to reorient the enterprise along the lines suggested above. The programs will:
(a) develop new communicationspatterns up and down the OME hierarchy, and between OME and outside entities;
(b) modify operational policies, objectives, and procedures to assure participation, transparency, and responsiveness, and to communicate the changes to clients and colleagues;and
(c) formulate and help implementa human resources developmentstrategy that gives staff the skills they need now to work effectively,and prepares staff and farmers for future responsibilities.
Decentralized Water Delivery
29. Despite the fact that the irrigation systemswere designedto deliver water to an outletthat serves a large collective or state farm, and that the command areas have been divided into many small parcels that must each receive water, the systemsare operating better than one would expect. Without assistance, and without an established means to adjudicate conflicts or differences of opinion, most farmers have dug field channels to reach their fields in one way or another, either from existing outlets or new outlets that they created by breaking the canals. However, many of these adjustmentsare wasteful, inefficient, and ineffective; thus water delivery is irregular and inequitable, or at least potentially so. As quickly as possible, secondary, tertiary, and on-farm delivery systems must be regularizedand fully articulatedto ensure that water deliveries can be equitable and efficient. 108 Annex 5
30. Water deliveryshould be decentralizedin a two-stageprocess using project financialand technicalassistance resources. In the first stage, secondaryand tertiary channels and outlets (major on- farm civil works) will be constructedto deliver water to units of 20 ha or less, dependingon terrain. In the secondstage, implementedwhile organizingWUA, micro-channels(minor-on-farm civil works) will be constructedto deliver water to groups of 10 to 15 farmers.
31. Major on-farm channels will be constructed under OME supervision, using local participationin design and constructionas much as possible. Villageboundaries coincidewith irrigation system boundaries, thus the Village Council can assist in mobilizingparticipation and, as appropriate, oversee the process.
32. A technicalassistance water managementspecialist (on-farm irrigation engineer) will help OME develop general specificationsfor the major on-farm channels and gates and, working with the technicalassistance community organizer, train OME field-levelstaff to carry out the operations.
33. The objectivein the design and constructionof the major on-farm civil works is to make the work as simple as possible, technicallyand socially. That is, using acceptabletechnical criteria, the channels should make the best use of the terrain, be as short as possible and take up as little land as possible. Field execution will have three critical components: consultation, technical design, and participatoryexecution. At the outset, the OME engineerwill meet with the Village Counciland farmers to explain the task and obtain the adviceof officialsand farmers on the location of channels. Technical design will follow, based on field surveys and observation. Once the design is completed,the engineer will meet again with the Village Counciland farmers to describe design options considered, explain the rationalefor the selectionof the final choice, describe O&M implicationsof the choice and seek consent. Onceagreement is reachedon the design, the engineerand VillageCouncil will organizethe construction process. The engineerwill specify labor and materialrequirements and the VillageCouncil will mobilize farmers to maximizeparticipation in the constructionphase and thus to maximizelocal ownership.
34. Once the approach is fully developedand organized, and staff are trained, this whole process can be executed in a decentralizedfashion. Constrained by the number of sites for which each field engineerwould be responsible, this program shouldbe fully completed within two years of project effectiveness. First priority would be given to villages that would be the site of WUA pilot schemes. Work in such villages must be completed during the first year.
WUA Pilot Schemes
35. The WUA pilot scheme program would be designed to test different methods of organizingfarmers and mobilizingtheir resourcesfor minor on-farm civil works, to determine the most cost-effectiveway to develop and implementa national water user associationprogram. A technical assistancecommunity organizer would design and advise OME in the implementationof pilot schemes in 3 or 4 villages. The schemes would cover a whole irrigation system (village), using different organizationalmethods in different parts of the system. Specificpilot schemes would be designed and organized with the active involvement of the Village Council and farmers, based on commitments negotiatedat the outset. The program designwould specify the experimentalframework used, identifying variables to manipulate, indicators to monitor and outcomes to evaluate. At least four different approaches would be used to organize farmers using: regular OME staff; Village Council members; outside organizers;and trained local organizers. To the extent possible, the differentapproaches will be WaterManagement 109 used in each site, varying the level of intensity of contact in each.
36. The most importantcaveat in the design of the pilot schemes is to ensure that the pilots require no more financial, technical,or staff resourcesto implementthan can reasonably be expected to be availablefor any site through a national program.
37. The technicalassistance community organizer will designthe program, train staff, advise during implementation(two years), oversee a program evaluation, and draft a final report that presents findings, conclusions,and recommendationsfor a nationalprogram.
WUA National Program
38. By the middle of the fourth year of project effectiveness,the technicalassistance team will jointly prepare a program to organize water user associationsthroughout Armenia, drawingon the findings of the pilot schemes and lessons learned while implementingthe major on-farm civil works program and various communicationsefforts. Given the level of accumulatedexperience at that point, the program shouldbe designed to begin implementationduring project year five and continueentirely with OME staffing after the withdrawalof the technicalassistance team at the end of year five.
39. The program would be designed to establisha proper legal and institutionalframework for WUA, enabling them to have the responsibilityand authority to collect water charges, to enforce payment through group sanctions, and to contract with OME to undertake O&M responsibilitiesas desired. The framework would recognize the rights of WUA to participate in OME decision-making processes, establish OME's accountabilityto WUA, and specify the relationship between WUA and between WUA and Village Councils.
Cost Recovery
40. Perhaps OME's greatest challenge is to make itself financiallyautonomous, to generate from water charges the revenue it needs to execute routine O&M, replace machinery, and upgrade systems. This is an opportunity afforded to too few irrigation agencies, an opportunityto make the enterpriseaccountable to farmers, who can express their satisfactionby paying or not, and who can be assured that their payments stay in the irrigation sector, rather than go to a general revenue office. Nonetheless, OME has a few obstacles to overcome to make this opportunity a real opportunity for advancement.
41. Prior to the parcellizationof state and collective farms, water charges were invisibleto farmers, if they existed at all. Once the land was distributed, however, and OME was made an autonomousentity, Armenian farmers were told that they must pay water charges. In most countries, such new cost recovery policies are effected when systems are newly constructedor rehabilitated, and farmersare due to see immediatebenefits. They are imposedwith prior warning, so farmers know what to expect and there may or may not be concomitantenforcement mechanisms to assure compliance. In the case of Armenia however, cost recovery policies were adopted without prior warning, unrelated to system improvements. Indeed, water charges were imposedat the point when the systemswere required to meet needs for which they were not even designed. Insteadof signallingan improvedsituation, water charges signalled the deteriorationof the irrigation systems. Given this situation, collectionhas been 110 Annex S greater than one might expect.
42. OME has tried two methods of levying and collectingwater charges: first, by making contracts with individual farmers; and then by contracting with Village Councils, who were to write individualcontracts. Not surprisingly, neither system has worked. OME has not done an effectivejob of informing farmers about water charges or water schedules and, except for the odd opportunityto deduct water chargesfrom frost subsidiesor state enterprisepayments, OME has not aggressivelysought to collect. Consequently,OME's ability to function has been compromised--itdoes not have the budget it needs to do the work that would have the impact that would induce farmers to pay the charges. OME is caught between what is required and what is reasonable. That is, it cannot be too aggressive about collectinguntil it can demonstrate its effectivenessin O&M, because of political repercussions;yet it cannot demonstrateeffectiveness until it generates the revenue it needs. It has receivedsubsidies at the end of the year, but they come too late to allow OME to establish the credibility it wants and needs. Moreover, if it indeed is required to pass electricity charges on to farmers in 1994, the situation will worsen, because charges will increase markedly without obviousjustification.
43. Given the current situation, OME shouldrevise its water charge scheduleto phase in full cost recovery over a five-year period, correspondingto the project period, increasing 20% each year. Project funds will cover the balance, thus enabling OME to do its work, fulfill its responsibilities,and establish credibility. The full technical assistanceteam will assist in this process by helping to:
(a) create effective communicationpatterns and information flows, thus giving farmers proper informationand adequate warning;
(b) make systems complete and functional, assuring reliable water delivery;
(c) ensure that O&M programs are well conceived, cost-effective,well executed, and well publicized;
(d) establish means for farmers to participate in decision-making processes, ensuring transparencyand accountability;and
(e) create and disseminatea corporate vision, with appropriateaction plan, so people inside and outside of OME know where the enterprise is going and how it will get there.
These steps, reflecting the achievementof other objectivesidentified above, will create the environment in which OME can seriously implementa cost recovery program that will be acceptableto farmers.
D. TERMS OF REFERENCE
Background
44. Concurrentwith the privatizationof land in Armenia in 1991, the Ministryof Agriculture turned a departmentresponsible for irrigation operationand maintenanceinto a financiallyautonomous state enterprise,the Operationand MaintenanceEnterprise (OME). The irrigationsystems were designed WaterManagement 111 to deliver water to large state and collective farms, each of which was considered a client. The privatizationof land brought three major changes:
(a) first, the number of clients rose from 860 state and collective farms to about 300,000 individualfanrs and peasant collectives;
(b) second, both farmers and OME had to try to manage water in irrigation systems that were not designed to deliver water to a plethora of small plots; and
(c) third, the OME was constrainedto generate its operationalbudget through water charges, thus giving farmers the unprecedentedobligation to pay for deterioratingor unreliable service.
45. Not surprisingly,collection rates havebeen low, whichhas contributedto OME's inability to carry out maintenanceor improvementprograms. The IrrigationRehabilitation Project is designedto fund investmentsto halt the deteriorationof the irrigation infrastructure,improve irrigation systems,and to provide technical assistance and temporary financial support to OME to help it become a viable, functional, and sustainableenterprise.
46. Technicalassistance to OME has four major objectives:
(a) reorient OME to be a client-centered service enterprise, through improved communications,restructuring and training, so that it works effectively with, and on behalf of its clients--waterusers;
(b) complete major and minor on-farm civil works to ensure equitable water delivery to all farmers;
(c) develop active water user associations(WUA) that serve as clients and O&M partners to OME, testing organizationalapproaches in pilot schemes and than launchinga national program; and
(d) achieve full cost recovery to enable OME to function efficientlyand effectivelyas a financiallyautonomous enterprise.
Descripdon
47. The OME technicalassistance team will be housed in the office of the ManagingDirector of OME, acting as advisors to the ManagingDirector and working closely with appropriatedepartments and field offices to design and execute work programs. The team will consist of three members--an institutionalspecialist (Team Leader), an on-farm irrigationengineer, and a communityorganizer. They will work on most tasks as a multi-disciplinaryteam, but individual team members will have primary responsibilityfor specificprograms and tasks. Team members will work through OME counterpartswho are responsiblefor coordinatingeach technical assistanceprogram, and who will be expectedto assume full responsibilityat the end of the technical assistanceperiod. 112 Annex5
48. The major tasks of team members is as follows:
(a) the Institutional Spedalist will have prime responsibilityfor institutionalreorientation. This will consist of helping OME prepare a corporate vision; develop new, effective communicationspatterns, both internal and external; revise incentives; develop and implementa staff trainingprogram; define the roles and rights of WUA, with appropriate legal recognition; and mobilize short-term expertiseas needed;
(b) the On-Farm Irrigation Engineer will have major responsibility for helping OME prepare appropriatespecifications and manuals for major on-farm civil works; train field staff for field application;prepare information manuals describing alternative designs, materials, and standards for minor on-farm civil works executed by WUA; and, in conjunctionwith other team members, developtraining programs for WUA on minor on- farm works;
(c) the Community Organizerwill be responsiblefor helping OME design and implement WUA pilot schemes intendedto determine the most effectiveways to organize farmers in Armenia; oversee monitoring and evaluation of the pilot schemes; work with other team members, evaluatethe pilot program to identifylessons learned and their practical implications;and design and begin implementationof a nationalWUA program.
Qualflcations
49. Qualificationsfor the team members are as follows:
Instituonal Specalist (Team Leader)
(a) Masters or Ph.D. or equivalent experience in managementor sociology, with strong credentials in complex organizationsand communications;
(b) Minimal 10 years professionalexperience, at least 5 of which in developingcountries;
(c) Successfulexperience in working on multi-disciplinaryteams in a field situation;
(d) Successful experience in developing capacity building programs, with strong human resource developmentcomponents, preferably in the irrigation sector;
(e) Proven ability to conceptualizeand communicateclearly orally and in writing;
(f) Proven ability to design and implement corporate communicationsstrategies, using differentmedia;
(g) ExcellentEnglish skills, oral and written;
(h) Russianor Armenian oral skills are highly desirable. Water Management 113
On-Farm Water Management Specialist
(a) Masters or Ph.D. or equivalentexperience in irrigation engineeringor civil engineering with specializationin irrigation;
(b) Minimum10 years professionalexperience, 3 of which in developingcountries;
(c) Provenexperience in designingand implementingon-farm irrigation infrastructure,using simple technologies;
(d) Proven ability to work effectivelyon multi-disciplinaryteams in a field situation;
(e) Proven ability to prepare technicalmanuals demonstratingthe use and implementationof simple technologiesfor a non-technical,village-level audience;
(f) Proven ability to work effectivelyto organize and manage labor-intensiveconstruction of civil works, preferably in irrigation;
(g) ExcellentEnglish skills, oral and written;
(h) Russianor Armenian oral skills are highly desirable.
CommunityOrganizer (CommunityDevelopment Specialist)
(a) Mastersor Ph.D. in sociologyor social work, with emphasison communityorganization and communitydynamics, or equivalent practicalexperience;
(b) Minimum10 years professionalexperience, 3 of which in developingcountries;
(c) Successful experience in designing, implementing, and evaluating community developmentprograms, with strong empowermentobjectives;
(d) Successfulexperience in designing, implementing,and evaluatingpilot programs intended to test approaches and methods for organizingself-help groups;
(e) Proven ability to work with and train communityorganizers;
(f) Proven ability to work effectivelyon multi-disciplinaryteams in a field situation;
(g) Excellent English skills, oral and written;
(h) Russianor Armenian oral skills are highly desirable.
ANNEX 6: LCB PROCEDURES, CONTRACTS AND PROCUREMENT PACKAGES
A. PROCEDURES FOR LCB
Procurementof goods (equipmentand materials) and related incidentalservices, as well as civil works (includingincidental electro-mechanical works) would be handled in accordancewith IDA's Guidelinesfor Procurement(May 1992 version). Presentlythere are no local competitivebidding (LCB) regulations in Armenia. Hence, whenever the need for procurement under LCB arises, the IDA guidelinesfor ICB procedures would be adaptedto LCB. Requirementsfor LCB requirementsshould include:
(a) LCB bid offerings to be based on agreed modificationsto sample/standardBank ICB documents. Key requirementsshould be:
(i) the provisionsin the documentsmust be detailed using Data Sheets;
(ii) agreed basic documents should be translated into Armenian (legally certifiable quality) reproduced and distributed as a separate document (similar to Bank standard documents)for inclusionin all Contracts;
(iii) the agreed basic documentsin englishshould be similarlyreproduced (preferably with accompanyingArmenian version)for the ready referenceof non-Armnenian speakingentities but must be clearly identifiedas a referencedocument; and
(iv) Data Sheetsand other variablesunique to each offeringare to be providedfor the Bank's prior review and no-objection on the basis of a certifiable quality translationfrom Armenianto English. These prior reviewswould continueuntil a pre-agreednumber of bid offeringshave been reviewed and approved without substantivechanges. In this manner, any concerns with the applicationof the LCB process can be addressedand corrective measures identified.
(b) Advertisementshould be extendedbeyond the limited number of available newspapers (two exist but only one is now used) to include:
(i) increasing local awareness of firm/enterprisesby mounting a substantialeffort through the availablemedia;
(ii) specific notices (SPN's) should:
(1) be posted in key locations (possibly bulletin boards) identified by the Government;and
(2) placed in key Ministries (e.g., Agriculture, Construction) having a tradition of state ownership of firms. This traditional source of works construction and goods production constitutes an information network that currently exists and which, until the transitionto a fully privatized 116 Annex 6
competitive economy is attained, should be utilized to promote competitive bidding procedures giving the Government increased visibility in their privatizationefforts. Access to the informationshould remain an open and free resource availableto all enterprises.
B. CONTRACTING
2. Contracts for project works will be:
(a) manufacturingof precast segments for canal repair work;
(b) installationof these segments in the canals and in-situ concrete work;
(c) earthworkon the dam sites and in the canals;
(d) specializedwork, such as grouting, manufacturing, and installation of metal parts in concrete structures;
(e) well drilling; and,
(f) procurementof reinforcingsteel, steel pipes, pumpsets, equipmentetc.
3. The rehabilitation of the four dams would be carried out under two groupings of contracts.
(a) D/1 series Contract Works, for the rehabilitation of Aparan, Karnout, Sarnakhpiur, Mantashdams;
(b) D/2 series Contract Works, for the laying of steel pipes, valves, etc.; and
(c) D/I Contracts will be advertisedlocally, D/2 contractswill be advertisedinternationally (see series contractsIR/2).
4. The rehabilitationof irrigation systems,canals and pressure pipelineswould be advertised in four groupingof contracts:
(a) IR/I Series Contracts for goods, the manufacture and delivery of precast concrete sections;
(b) IR/2 Series Contracts for goods, the supply of steel pipes, valves, etc.;
(c) 1R/3 Series Contracts for works, the rehabilitationof canals; and
(d) IR14 Series Contracts for works, the replacementof pressure pipes;
5. IR/l, IR/3 and IR/4 Series Contracts will be advertised locally. LCB Procedures,Contracts, and ProcurementPackages 117
6. IR/2 Series Contract Goods, would be advertisedinternationally.
7. The well drilling and equipmentrenewal program would be advertisedin four series of contracts:
(a) Series BH/1 - Goods, for the supply of new submersiblepumps;
(b) Series BH/2 - Goods, for the supply of spare parts for existing Russian submersible pumps;
(c) Series BH/3 - Works, for the drilling and construction of new wells and for the rehabilitationof existingwells; and
(d) Series BH/4 - Direct, for the repair and overhaul of existing submersiblepumps;
8. BH/1 Series Contracts will be advertised internationally.
9. BH/2 Series Contracts will be by direct contract with the pump manufacturer(s).
10. BH/3 and BH/4 Series Contracts will be advertisedlocally.
11. Spare parts purchased under BH/2 Series Contracts would be delivered to the selected pump repair workshops for the rehabilitationof old pumps.
12. Constructionof the Getik Irrigation Schemewould be advertisedas one contract.
(a) G/i - for the constructionof main canals and distribution system; and
(b) the supply of pipes for the irrigationdistribution system will be in IR/2 series contracts. 118 Annex 6
DRAFT PROCUREMENTPLAN AND SCHEDULE PageI of 2 (INCLUDING ALL FINANCING SOURCES)
i i i MajorActivities Schedule , * Total Cost * (Month and Year) Typeof * * Estimate , Methodof Contract Natureof Package (ThousandUSS) Procurement Issueof Submissionof Award/Sign Completion _ , ' ' _ Documents Bid/Proposal Contract of Package Goods PressurePipes, Pumping Scheme 1 1 4,889 ' ICB December94 March96 May 96 98
I PressurePipes, PumpingScheme 2 1,311 ICB April 96 July 96 September96 98
' PressurePipes, Conveyance Scheme I ' 5,527 ' ICB March95 July 95 September95 96 I PressurePipes, Conveyance Scheme II | 5,393 | ICB July 95 October95 December95 96
ConcreteSections, Conveyance Scheme I ' 4,452 ' LCB November96 January97 February97 98 (4 Contracts)
ConcreteSections, Conveyance Scheme II I 3,928 I LCB March97 May 97 June97 98 (12 Contracts)
g ConcretePipes, Conveyance Scheme I * 9501 ICB March97 August97 October95 98 (4 Contracts)
i ConcretePipes, Conveyance Scheme II 950 ICB November97 January98 February98 99 * (2 Contracts) l I ConcretePipe ' 1,580| LCB March97 May 97 June97 98 I SubmersiblePumps | 1,200 ICB May 95 August95 October95 96
I SpareParts for SubmersiblePumps 280 LCB May 95 July 95 August95 98
'Equipment for Pibt Projects I 1,490 ICB January 97 Aprl 97 June 97 98
I Equipmentfor PilotProjects II 1490 LCB January97 April 97 June97 98 * (2 Contracts)
e Valves,Siphons, Outfets for Conveyance 90g 0 LS NA. N.A. NA. 98 * Schemes *
Valves,Siphons, Outlets for Pumping 700 LS NA. NA. NA. 98 ,Schemes _ ,__ LCB Procedures, Contracts, and ProcurementPackages 119
Page 2 of 2
i iI Major Activities Schedule . . . (Monthand Year) Typeof i i Total Cost i Methodof o S Contract Natureof Package Estimate i Procurement Issue of Submissionof Award/Sign Completion * , JDocuments Bid/Proposal Contract of Package
Goods s Equipmentfor PIU 155 LS December94 January95 January95 95
Equipmentfor TechnicalAssistance 265 LS N.A. N.A N.A. 96 nstall SpareParts, Rehabilitate Submersible 200 DC N.A. N.A. N.A. 96 l Pumps ;
Works * DamRehabilitation | 850 I ICB ay 95 August95 October 95 97
' DamRehabilitation (3 Contracts) j 790 ' LCB May 95 July 95 August95 97
* ConveyanceScheme I (3 contracts) 938 LCB November95 January96 February96 96
ConveyanceScheme 11 (7 Contracts) , 2,190 j LCB March96 May 96 June96 97
PumpingSchemes (4 Contracts) | 1,502 LCB July 96 September96 December96 97
SmallWorks in Conveyanceand Pumping ' 130 LS N.A. N.A. N.A. 98 . Schemes
I PumpsetsInstallation * 1,200 LCB October95 December95 January96 97
Constructionof Wells(9 Contracts) . 2,990 . LCB June95 September95 November95 97
Constructionof Wells(9 Contracts) * 2,490 ' LCB January96 February96 April 96 97
Consukant5PIUConsuftants j1,300 ' -June 94 August94 November94 99 1 Serices ,Pilot Projects, Consultants under single j198j -May 95 July 95 August 95 98 l contract.l
Consuftantsfor Pilot Projects ,1,102 i, -May 95 July 95 August 95 99 | |. Contracts as Needed) , .(Multph
ANNEX 7: TERMS OF REFERENCE FOR THE PROJECT IMPLEMENTATION UNIT AND CONSULTANTS
A. TERMSOF REFERENCEFOR PROJECTIMPLEMENTATION CONSULTANT OF THE PROJECTIMPLEMENTATION UNIT
1. The Project ImplementationConsultant is to be an internationallyrecruited firm (the Firm) retained to establish, staff, and operate the Project Implementation Unit (PIU) for the Irrigation RehabilitationProject (the Project). The Project is dependent on the future signing of the Loan Agreement for its financing. Financingfor the operationof the PIU has, however, been made available in the form of Projects PreparationFacilities (PPF) funds provided by the World Bank. The PIU reports directly to Project ManagementBoard (PMB) which in turn reports directly to the Minister of the Ministry of Agriculture (MOA).
2. The Firm will fulfill a series of evolving responsibilitiesthroughout the estimated four year duration of the Project which is projected to begin approximatelysix months after the start of the Firm's Contract. During the initialphase (Stage 1) of the assignmentthe Firm will establishand oversee, as specifiedin the following paragraphs, the setting-up of a fully-staffed,operational, and autonomous Project ImplementationUnit. For the remainderof the Project (Stage 2), the Consultantwill supervise the PIU to assure its continued compliancewith established procedures, Bank guidelines, and agreed project elements and schedules.
3. During Stage 1 of the Firm's contract, estimated to last for one year, the Firm is to:
(a) provide qualifiedstaff for the four expatriatepositions of the PIU whose responsibilities are detailed in Section B;
(b) establish policies and procedures guiding all activities (e.g., procurement, accounting, inspection, etc.) the PIU is to autonomouslyperform in fulfilling its responsibilities within the Project;
(c) develop annual project schedulesfor presentationto the Board on the basis of identified undertakings,objective levels of performanceand schedules for procurement activities;
(d) prepare agendas and presentationsfor semi-annualBoard meetingsto update the status of the project and highlight positive and negative variations from standard established in the precedingschedules approved by the Board;
(e) liaise with the Ministry of Agricultureand its designatedProject ManagementBoard to ensure coordinationbetween respective actions and establish an effective communication system;
(f) recruit local personnel to:
(i) complete the staffing of the PIU, and
(ii) replace key expatriatestaff upon completionof the Stage 1; 122 Annex 7
(g) design and conductall necessarytraining to ensure appropriatetransfer of skills from the expatriate staff to the locally recruited personnel;
(h) procure listed items for the Project ImplementationUnit in accordancewith World Bank guidelinesand procedures;
(i) establish an internal system designed to facilitate supervision and as-needed technical assistanceto the PIU during Stage 2 of the Consultant's contract. This shall be separate and distinct from the Monitoringand EvaluationUnit within the PIU whose function is project oriented;
(j) phase the appropriate transfer of responsibilityfrom its expatriate staff to its locally recruited staff in accordance with the schedule and plan originally proposed and subsequentlyadjusted by the firm; and
(k) maintain quality controls on the Project within the planned time of four years as measured from Loan Agreementeffectiveness.
4. The Project Director shall be nominatedby the Project ManagementBoard and approved by the World Bankbut shall be employedby the Firm. The Firm will establish an appropriatelevel of com>pensationfor the Project Manager and will provide orientation and other training as the Firm may deem appropriatefor assumptionof Stage 2 responsibilities. In the event the nominatedcandidate should, in the Firm's evaluation, prove inadequate for the task, the Firm may request the Board provide a replacementand its request will be considered.
5. In recognitionof the conditionsin Armenia, it is proposed that:
(a) the Firm will supply a certificate of health for each of its proposed expatriate staff. Particular attention is called to the limited emergency and evacuation services as they may affect conditionsof the heart, diabetes, and similar medical concerns; and
(b) subsequentto the Firm's selectionand signing of the Contract, if an expatriatemember of the Firm's staff is determinedto be marginallyor unqualifiedas regardstheir technical skills, health, or cultural incompatibility,the Board shouldnotify the Firm and agree on the schedule for the individual's departure and the arrival of a replacementexpatriate more suited to the assignment.
6. Within the Project ImplementationUnit are two unique sub-units:
(a) Pilot Projects: This sub-unitwill be separatelyfinanced outside the Firm's Contractand the consultant's will be retained on the basis of invitation documents prepared by the PIU. When established, the Pilot Project's sub-unit will be administered through the PIU. The PIU will not, however, be held liable for the performanceof the sub-unit. The Pilot Projects sub-unit will not be establisheduntil after the Loan Agreement is signed and effective.
(b) Water Master Plan: This sub-unitalso has financing from outside the Firm's Contract for financingthe updating of the Master Plan. The Water Planning Institute (WPI) has Termsof Referencefor the ProjectImplementation Unit and Consultants 123
been nominatedby the Board and approvedby the World Bank to provide such services as are needed as an extensionof its previous Water Master Planning assignment. The Firm will negotiate a sole source contract with the WPI on an equitable basis. Work or services needed by the Firm or requested by the Board prior to Loan effectivenessmay be financed from the availablePPF as an advanceprocurement for compensationupon Loan effectiveness. Additionally, the Water Master Plan will be responsible for preparation of the next project proposed for World Bank financing. Funding for the preparationwill be secured separately. The PIU will coordinatethe project preparation activities.
7. In recruiting local employeesfor employmentby the Firm, the Firm will be expectedto:
(a) developjob descriptionsfor these employeesand review them with the Board prior to their recruitment. The Board may identify their concerns with the job description and these concerns will be consideredby the Firm.
(b) independently establish salaries for their locally recruited staff of employees that consistent with the local economy and availability of the needed skills within that economy while being adequatefor employeesto rely on the Firm's income as their sole support.
8. The first period of the consultant'scontract will be consideredended when the milestone of an effectiveskills transfer to the long-termPIU staff has been accomplished;this is referred to a the Stage 1 Milestone. For this purposes, MOA and the World Bank (the Bank) will agree on the basis for evaluationand will jointly review the progress of the skills transfer program after 6 and 12 months from mobilization. In the event it is determinedthe requirementscannot be effectivelyprovided by the locally recruited staff, the duration of the expatriate experts' residence in Armenia may be required to be extended. Followingthe joint evaluationin which it is determinedthe locally recruited staff has acquired the required knowledge,skills, and competencyto provide quality services, the full-timeexpatriate staff will be released. In the event the availableexpatriate staff is suited and agreement regardingtheir Terms of Referenceand compensationcan be reached,they may be retainedto accomplishspecifically identified objectivesnot within the present Terms of Reference.
9. The secondphase of the assignmentwill involve the continuedautonomous operation of the PIU with primary reliance on the firm's locally recruited staff. The firm will continueto be directly responsiblefor the performanceand will remain liable for any failure of the PIU to exercisedue care in the performanceof their activities. The Firm should be prepared to provide additionaltechnical inputs and guidanceas needed by their PIU staff in additionto periodic reviews and monitoringfrom the firm's home office throughoutthe life of the Project.
10. The Firm's reporting on the progress and managementof the Project through the Project Managerto the Board. Various forms of reports will need to be prepared and presented including,inter alia:
(a) A PIU InceptionReport will be developedand presented to the Board within two months of Contract effectiveness. The report will outline the planned actions anticipatedin the Contract, their current status, problems encountered and recommendationsfor any changes determinedappropriate in the agreed action plan. 124 Annex 7
(b) Monthly status reports will be developedand provided to the Board members no later than the seventh day of the month following.
(c) Contract status/deviationreports.
(d) Disbursementand accountingreports.
11. The Project will be auditedannually to determine its compliancewith requirementsof the Loan Agreementand World Bankprocurement guidelines and procedures. In additionto establishingand maintaininga suitable accountingsystem covering all activitiesunder its control and providing reports on those activities, the PIU will assist in the preparationsfor the audits. Final arrangementsto obtain auditors is outside of the scope of the PIU.
Incentive for Early Completion:
12. The early completion of the project infrastructure rehabilitation (e.g., dam/channel rehabilitationbut excludingadministrative actions such as the Pilot Projects and Water Master Plan and operation of the PIU through final disbursementand project closing) is deemeddesirable and the Board is accordinglyoffering the followingincentives to the Firm:
For comnletion Percent of Contract Price
Six months or more in advance 15%
More than 3 but less than 6 months 10%
More than 1 but less than 3 months 5%
Less than 1 month None
B. TERMS OF REFERENCE FOR DEPUTY MANAGER AND FOREIGN CONSULTANTSOF THE PROJECT IMPLEMENTATION UNIT
Deputy ProjectMananer
13. The deputy to the Project Managerwill be an externally recruitedconsultant. The deputy project manager(DPM) will be in his office for a period of one year, after which it is assumed that the Project Manager would be able to operatewithout foreign assistance. The objectivesof the DPM work would be as follows:
(a) To assist the MOA to set up the PIUThis will entail:
(i) overseeingthe settingup of policies and procedures under which the PIU office Terms of Referencefor the Projea ImplementationUnit and Consutants 125
would operate;
(ii) preparing terms of reference for the PIU staff, including local and foreign consultants; and
(iii) providing assistance to the Project Manager in recruiting the appropriate personnel to the PIU.
(b) To provide counseling to the Project Manager in administering and managing the PIU.
(c) To oversee the work program preparation and implementation of each of the PIU four sections: engineering, services, technical assistance, and monitoring and evaluation.
Tasks
14. The DPM will perform the following tasks in respect to the project:
(a) Advise the PIU manager in recruiting and selecting locally hired staff for all the PIU sections and recruiting and selecting foreign consultants for the engineering and the technical assistance sections, including:
(i) construction supervision engineer;
(ii) water planning and design engineer;
(iii) procurement and contract management engineer;
(iv) institutional specialist;
(v) on-farm irrigation engineer; and
(vi) community organizer.
(b) Provide guidance and coordinate the work of the PIU sections.
(c) Participate in the monthly meeting of the Project Board Management and assist the Project Manager in preparing monthly progress report for the meetings.
(e) Assist the Project Manager to prepare semi-annual progress reports to the Bank.
Qualifications
(a) Water resource and irrigation engineer;
(b) Minimum 20 years' professional experience, 10 of which in developing countries;
(c) Proven experience in designing and managing implementation of irrigation projects. 126 Annex 7
(d) Proven ability to work effectivelyon multi-disciplinaryteams and ability to coordinate and motivate staff work;
(e) Proven ability to conceptualizeand communicateclearly orally and in writing;
(f) Proven ability to design and implementcorporate strategies;
(g) ExcellentEnglish skills, oral and written;
(h) Working experience in Armenia is highly desirable.
C rUCdn SuMervisonAdvisor
IS. The constructionsupervision advisor (CSA)will be externally recruitedconsultant. The CSA will be recruited for a period of six months, and will prepare a local engineer to assume the respomibility of constructionsupervision.
16. The objectives of the CSA work will be as follows:
(a) to provide advice to the PIU and the MOA on the development of systems and procedures required to ensure that constructionactivities on this project are adequately supervised;
(b) to providetraining to locallyhired supervisorsin the use of the constructionsupervision procedures and in preparation of bidding documentsand bidding procedures; and
(c) to oversee the implementationworks of the engineering components of the project, including the rehabilitation works concerning the conveyanceschemes, the pumping schemes, the tubewells, and the storage dams.
Tasks
17. The CSA will perform the following tasks in respect to the project:
(a) advise the PIU and MOA in recruiting and selecting locally hired consultants who will perform on-site field supervision("supervisors");
(b) advise the PIU and MOA on the design of quality and quantity control systems and the developmentof commonproject reportingsystem for all constructioncontracts, including standardsfor preparationof monthly certificates;
(c) advisethe PIU and MOA on proceduresfor coordinatingand monitoringthe performance of the local constructionsupervisors and provide ongoingassistance in carrying out this coordinationand monitoringprogram;
(d) with the PIU and MOA, train the local supervisorsin constructionsupervision including Terms of Referencefor the ProjectImplementation Unit and Consultants 127
quantity and cost control, scheduling, and project componentreporting;
(e) with the PIU and MOA, train and assist local supervisors in appropriate techniquesof dispute resolution with contractorsand appropriateuse of sanctions;
(f) on an ongoingbasis, monitor the performanceof the local supervisors, advise them on how to improve performance, advise the PIU where serious performanceproblems are perceived, and generally serve as a 'technical resource" for the local supervisors in performing their work over the initial phase of the project; and
(g) advise the PIU and MOA on preparing comprehensivereports, including revised cost estimatesfor individualcontracts, revised timing of completionof contracts, and revised estimatesof allowancesfor physical and price contingencies.
18. It is understoodthat all direct, on-site supervisionof constructionactivities for the project will be performed by Armenian supervisorsretained by the PIU and that the CSA will be functioningin an advisory and training capacity in relation to this activity. Authorizationof requisitionsor change orders for cost schedule increases will be handled by the PIU. Negotiationsfor the bid documents or contractualagreements will be handled by the PIU staff.
Reporting
19. The CSA will prepare monthlyprogress reports to the PIU managementthat describe:
(a) major activities undertaken and their significance and progress toward achieving the project objectives;
(b) major issues and problems; and
(c) projected activities for the coming month.
These reports shouldbe submittedno later than 15 days after the end of each month.
Qualifications
(a) Water resource and constructionengineer;
(b) Minimal 10 years' professional experience, five of which in developingcountries;
(c) Proven experiencein constructionsupervision of irrigation projects;
(d) Proven ability to work effectivelyand coordinate and motivate staff work;
(e) Proven abilityand experiencein conductingtraining activities in constructionsupervision;
(f) ExcellentEnglish skills, oral and written; 128 Annex 7
(g) Working experience in Armenia is highly desirable.
Procurement and Contract Advisor
20. The procurement and contract management advisor (PCMA) will be an externally recruited consultant. The PCMA will be recruited for a period of one year, and will prepare a local engineerto assume the responsibilityof procurementmanagement in the PIU office.
21. The objectivesof the PCMA will be as follows:
(a) to provide assistanceand advice in all procurementrelated matters under the Irrigation RehabilitationProject; and
(b) to train local Armenianstaff from the PIU and public and privatecontractors on all issues of procurementprocedures that involve supply and procurementunder the IDA financed loan.
Tasks
22. The PCMAduty will includethe following:
(a) assistin the preparationof procurementnotices for appropriatepublication/circulation and ascertain that advertisements have been carrying out in accordance with agreed procedures;
(b) establish a master list of suppliers responding to the advertisements including the distributionof appropriatesupplier lists to the procuring agencies. This will form part of the managementinformation system to be establishedby the PIU;
(c) prepare standard bid documents to be utilized by the PIU and ascertain that such documentsare in compliancewith procedures agreed upon by the Government and the Bank;
(d) review the list of goods to be imported to determine that they are eligible for procurement under the proposed project loan and confirm availability of funds for procurementof the proposed goods;
(e) assist in the establishmentof a schedule/timetablefor the procurementof goods;
(f) assist in the public opening of bids and preparation of appropriate protocol to be submittedto the PIU managementand the Bank;
(g) monitor the technicalevaluation of the bids received, includingprovision of assistance as needed in the selectionof the lowest evaluatedbidder in strict compliancewith agreed proceduresgiven in the bid documents; Terms of Referencefor the ProjectImplementation Unit and Consultants 129
(h) oversee the payment arrangement (such as letter of credits or other methods) stipulated in the bidding documents;and
(i) provide on the job training to a designatedArmenian procurementadvisor and prepare training program for interestedparties, such as local suppliersand other staff of the PIU.
Reporting
23. The PCMA will prepare within 15 days of the end of each month a monthly progress report on all the procurementactivities to be submittedto the PIU managementand IDA.
Qualifications
(a) Constructionor civil engineer;
(b) Minimum 10 years of professionalexperience, five of which involve procurement;
(c) In depth knowledgeof procurementprocedures used by the World Bank and other United Nations organizations;
(d) Proven experience in procurement management that involve international and local competitivebidding;
(e) Proven experience in preparationsof technicalspecifications and evaluationsof bidding documents;
(f) Proven ability and experiencein conductingtraining activities in procurement;
(g) Excellent English skills, oral and written; and
(h) Working experience in Armenia is highly desirable.
Planningand Design Advisor
24. The planning and design advisor (PAD) will be an externally recruited consultant. The PAD will be recruited for a period of one year, and will prepare a local engineer to assume the responsibilityof planningand design in the PIU office.
25. The objectivesof the PAD would be to provide assistance and advice in all engineering and designactivities related to the IrrigationRehabilitation Project; to assist in planningthe next irrigation project; and to update of the Water Master Plan for the country.
26. The planning and design of the project has been carried out by the Water Planning Instituteof the DWSI, supportedby the HydrologicalStudies Instituteand for special items of work, by other organizationsinside and outside of the MOA. Despite the fact that detailed planning has already 130 Annex 7 been prepared, at the implementationstage it is necessary to scrutinize again the detailed project engineeringdesign. The PAD will approveplanning reports, designs, specificationsand bills of quantities and in coordinationwith the CSA and the PCMA he will prepare contract documents.
Tasks
27. The PAD duty will include the following:
(a) scrutinize all planning and design aspects of the engineering works of the project and coordinateany necessarychanges that lead to cost optimizationwith the Water Planning and HydrologicalStudies Institutes;
(b) coordinate planning implementation with construction program and procurement activities;
(c) provide assistance to the Water PlanningInstitute in updating a realistic and cost optimal water master plan for the country; and
(d) provide assistance to the Water Planning Institute in preparation of the next irrigation project.
Reporting
28. The PAD will prepare monthlyprogress reports to the PIU managementthat describe:
(a) major activities undertaken in regard to the three major tasks of the PAD and their significanceand progress toward achievingthe project objectives;
(b) major issues and problems; and
(c) projected activities for the coming month.
These reports should be submittedno later than 15 days after the end of each month.
Quaffications
(a) Water resource and irrigation planning engineer;
(b) Minimum 10 years' professionalexperience, five of which in developingcountries;
(c) Proven experiencein planning and design of irrigation projects;
(d) Proven ability to work effectivelyand coordinatevarious phases of planning and design work; Terms of Referencefor the ProjectImplementation Unit and Consultants 131
(e) ExcellentEnglish skills, oral and written; and
(f) Working experience in Armenia is highly desirable.
ANNEX 8: AGRICULTURAL DEVELOPMENT
1. The proposed project area will consist of a total of about 164,700 ha, of which some 134,600 ha (82%) will be in the lowlands, and the remainingestimated 30,100 ha in the midlands.
A. TYPICAL CROPPING PATTERNS
2. The latest statistics on cropping patterns date from 1992. In 1993 there have been significantchanges whichare likely to continue. The followingTable 1 summarizesthe 1992 data from the district statisticsand presents the best estimatesfor 1993. The estimateswere made by specialistsof the Ministry of Agriculture(MOA) in cooperationwith the Bank's AgriculturalSector Mission and the Project PreparationTeam.
Table 1: CroppingPatterns (in percentage of irrigated area) Lowlands Midlands Highlands 1992 1993 1992 1993 1992 1993 Cereals 27 33 50 53 52 55 Potatoes 3 3 3 2 3 2 Vegetables 10 9 4 4 1 1 Forage 7 6 40 39 44 42 Orchards & 53 49 3 2 - - grapes
3. The greater part of the project area is situated in the lowlands (the Ararat valley), where traditionally more than 80% of Armenia's agricultural output is produced. The underlying assumptionis that the cropping pattern evolutionin the next five years is as presented in Table 2.
4. The project will secure water supplies to presently irrigated areas, increase the areas which can be irrigated, or firm up suppliesto presently under-irrigatedareas. It has been assumedthat future changesin the cropping patterns would occur mainly in response to market forces. As shown in Table 2, the scenario for the likely developmentof cropping patterns indicate the following possible changes:
(a) cereal area would decreaseas affordablegrain imports would become available,and land would be liberated for higher value crops;
(b) vegetable areas in the lowlandswould increase as fresh produce exports and processing would resume;
(c) potato area would increasefor similar reasons as vegetables; 134 Annex 8
(d) overallforage area would go up in line with anticipatedincreasing livestock numbers; and
(e) orchardsand grapeswould in generalgradually increase as areas occupiedby grain crops would become availablefor higher value crops.
5. As at present, about 13% of the irrigated area would continue to be in "home plots" (kitchengardens); these small, intensivelycultivated fields will continueto produce vegetablesand fruits for home consumption. The area under home plot cultivation,however, would not increasebecause they already take up all suitable land near the villages.
6. Althoughthe project would be predominantlylocated in the lowlands, to give a national overview, the table below informs also on expectedchanges in midlandsand highlands in percentageof irrigated area:
Table 2: Expected Changes in Percentage of Irrigated Areas 1994 1995 1996 1997 1998 Lowlands Cereals 27 23 28 12 10 Potatoes 5 6 6 6 6 Vegetables 14 15 17 17 17 Forage 19 20 22 27 28 Orchardsand vineyards 35 36 37 38 39 Midlands Cereals 50 44 40 36 32 Potatoes 3 4 4 4 4 Vegetables 3 3 3 3 3 Forage 20 32 27 30 33 Orchards and vineyards 24 25 26 27 28 Highlands Cereals 50 46 40 37 35 Potatoes 12 12 12 12 12 Vegetables I I I I I Forage 35 33 45 48 50
B. CROP WATER REQUIREMENTS.
7. Crop water requirementsat the plant root were calculatedfor all agro-ecologicalregions and districts of Armenia by the Department("laboratory") of Irrigated Crops (Laboratoria Oroshenia Seldkhozkultur)of the Research Instituteof Water Affairs and Hydrotechnics(Institut Vodnykh Problem i Gydrotekhniky). Representativefigures for amount of water, as well as frequencyof irrigations, which were used for the lowlandsand midlandscalculations of the crop budgets and farm models, are given in the Table 3: AgriculturalDevelopment 135
Table 3: Frequency of Irrigation Lowlands Midlands
m3 No. of 3 No. of Irrigations Irrigations Wheat 5,000 3-4x 3,000 3x Potatoes 3,000 5x 3,000 5x Vegetables 8,000 lox 6,000 12x Forage 8,000 6x 4,000 5x Orchards 6,000 7x 5,500 7x Vineyards 7,000 7x 6,000 7x
8. It is estimated that the "with project" yields presented below could be attained if 70% of the above crop water requirements would reach the plant roots at the right time, and thus would prevent shortages of water at critical phases of crop development.
9. The project would assist management to ensure that good principles of irrigation scheduling are being respected. The three imperatives of efficient irrigation water management are that the water supply must be reliable, adequate, and timely. When the first two requirements have been ensured, timing becomes particularly crucial and demands some irrigation agronomy insight and considerable experience. To strengthen the irrigation agronomy capability of the research and extension establishment, the project would finance some soil water measuring equipment, such as one weighing lysimeter, one time dimension reflectometer, and a number of tensiometers and gypsum blocks, as well as soil augers.
10. While overall water use efficiency from the source to the plant without the project is estimated at 35% at best, it is judged that in the "with project" situation the efficiency would increase to a reasonable 50%.
C. THE "WITHOUT PROJECT" SITUATION
11. Rehabilitation of the conveyance systems and the tubewells would mostly affect the lowlands, where rainfall is totally inadequate for crop production. These areas include most districts of the fertile Ararat Plain, with a total annual precipitation of about 250 mm, of which usually less than half falls during the main vegetation period. The assumption was made that the system would not completely fail immediately, but that water losses would gradually increase. As less water reaches the fields yields would diminish, followed by changes in the cropping patterns. For the economic analysis it was assumed that water supply would decrease by 5% annually, if no rehabilitation measures were taken and would remain at 20% of the preproject level from year 17 and on. 136 Annex 8
12. Farmers' first response to a growing water shortage would be to under-irrigate. First, the cereals and forage would get less water, followed by orchards and, finally, potatoes and vegetables. Wheat, now irrigated three or four times, would receive two and eventuallyonly one irrigation. This would reduce yields to about 2.5 t/ha with two, and 1.5 t/ha with one irrigation. Lucerne could no longer be grown: farmers would revert to a single cut of cereal hay, irrigated once, yielding about 2.0 t/ha. Eventually,only inadequatelyirrigated cereals would be grown for grain. The last to be deprived of water would be the home plots.
13. In the dam rehabilitationcomponent the assumptionwas made that without rehabilitation the dams would cease to function. Apart from the physical and environmentaldamage, their command areas would be left without water, or at best with much reduced supplies from run-of-the-riverflows. These limitedquantities would only be used for the home plots. Since most of the commandareas are at mediumand high elevations,crops grown would be rainfed cereals for grain and fodder. The cereals grown for grain would yield about 1.5 t/ha; fodder yields would be about 2.0 t/ha. No viability calculationswere made for the dam rehabilitationcomponent; dam failure would threaten hundreds of lives and that has to be consideredas adequatejustification.
Table 4: EstimnatedGross Yields (t/ha) In the "With"(W) and "Without"(WO) ProjectSituation Lowlands (1992) WO project W project Cereals 3.5 2.5/1.5 5.0 Potatoes 16.0 nil 20.0 Vegetables* 28.0 nil 38.0 Forage** 8.0 2.0 10.0 Apricots 10.0 nil 12.0 Vineyards 9.0 nil 11.0
* Tomatoes ** Lucerne
Midlands (1992) WO project W project Cereals 3.0 1.5 4.0 Potatoes 18.0 nil 22.0 Vegetables* 28.0 nil 40.0 Forage 6.0 2.0 8.0 Apples 10.0 5.0 12.0 Vineyards 9.0 6.0 13.0
* cabbage AgriculturalDevelopment 137
D. THE "WITH-PROJECT"SITUATION
14. The repair of the conveyance structures, pumps and dams would ensure reliable and adequate water supply in the command areas. Yields, now affected by a shortage of water, would increaseand farmers would be more willingto invest in purchasedinputs and landshaping. This would eventuallyraise averageyields to levels now achievedby the better farmers. It is unlikely, however,that the irrigated areas would expand significantly, unless there are large unirrigated areas (tail-enders), equippedwith on-farm systems and not irrigated because of a shortage of water.
15. With adequate and secure water supplies, the primary issue affecting agricultural production would be the availabilityof inputs, and whether expenditureon them will be justified in view of the market situation.
E. TYPICAL CROP BUDGETSAND FARM MODELS
16. The calculationsof budgets, models, and incrementalproduction were done under the following assumptions:
(a) Calculationsare based on the end-October 1993 exchangerate of Rb 2,400 = US $1;
(b) Producer prices used were on the conservative side; they were either those paid by Government ("goszakupki"), or the lower estimates of free market prices, where Governmentprices were not establishedor not available;
(c) All prices of inputs which have to be importedwere taken at, or close to, world market prices. Fertilizer was costed at US$ 120/t (Rb290/kg),the averagenutrient rate was taken as 30% which about correspondsto the averagenutrient content of most used fertilizers; pesticide prices were estimated at US $10 (Rb24,000) per kg or liter; one tractor hour was costed at about US $8.30 (Rb2O,000);one combinehour at US $10.80 (Rb 26,000). Note that the actual prices in October 1993 for most of the inputs, exceptthe mechanized field operations, were substantiallylower;
(d) Cost of water was calculatedon the basis of US $0.015/Kwh, and a consumptionof 0.5 Kwh per 1 m3 of 100 m lift, coming to Rbl8/m3 which was roundedup to Rb2O/m3. (For comparison, in Washington, D.C., the residential cost of electric power in November 1993 was US $0.08174/Kwh,and commercialcost wasUS $0.04239/Kwh.
(e) The returns to forage (lucerneand esparcet), of about Rb -46,000/ha in the lowlandsand Rb38,000 in the midlands,are calculatedup to the point of hay production. In the farm models they were recalculatedinto animal production. One ha of forage thus produces in the lowlands about 195 kg of dressed wight of beef (at Rb2,000/kg a return of Rb390,000/ha),or about 3,210 1 of milk (at Rb400/l a return of Rb 1.284 M/ha). In the midlands 1 ha of forage generates about 2,570 1 of milk (Rbl,030 M/ha), or 156 kg of beef (Rb312,000/ha); 138 Annex 8
(f) The forage unit (FU) coefficientsper kg of fodder crop used in Armenia are: 1.15 for barley; 0.26 for straw; 0.5 for hay; and 0.2 for silage. It is consideredthat 1.4 FU will produce 1 It of milk, and 12 FU 1 kg of beef. Dressing percentageof beef is estimated at 52 percent. In the farm models, it was assumedthat half of the forage would be used for milk production and half for beef production;
(g) The proportion of annual planting material cost in grapes is based on a spacing of 2.5x 1.25 m, or 3,200 plants/ha, a cost of Rb300/cutting,and an economicplantation life of 40 years. Similarly, the plantingmaterial cost for orchardsis based on an average375 trees/ha, Rb 550/seedling,and an economic life of 25 years;
(h) The tractor work in orchards and vineyards is for spraying;
(i) Transport cost estimatesare based on ARMPLODORODIEcharges which are: Rb3,000 for tractor/trailer up to 5 km distance, and Rb6,000 for the same up to 10 km. Truck transport is charged at Rb400-500per tkm with a diesel operated truck (Kamaz 8, 10, 12 t). (Most trucks are ZILs, however, which operate on gasoline at about 25-30 1/100 km; they are all standing
(i) The gross yield estimates were adjusted in the crop budgets for losses yed ReductionFacto (field, transport, handling, storage) as Wheat -15 % shown in Box 1. Potatoes -30 % Forage -10 % 17. The analyticalbackground material for Tomatoes -50 % incremental production and benefits calculations Cabbage -40 % consists of the following tables in the attached Fruits -35 % appendix: Grapes -35 %
Table A.1 - Estimated development of Box 8.1 croppingpatterns on an average irrigated farm of 1.38 ha (in two major agroecologicalareas -- lowlands and midlands).
Table A.2 - Anticipatedyield development(net yields kg/ha).
Table A.3 - Input and producer prices (October, 1993).
Table A.4 - One ha crop budgets at full development - lowlands.
Table A.5 - One ha crop budgets at full development - midlands.
Table A.6 - Farm model - lowlands, at full development.
Table A.7 - Farm model - midlands, at full development.
Table A.8 - Farm model in PYl - lowlands. AgriculturalDevelopment 139
Table A.9 - Farm model in PYI - midlands.
Table A.10 - Estimates of incrementalproduction at full developmentin lowlands.
Table A.11 - Estimates of incrementalproduction at full developmentin midlands.
18. As indicatedearlier, calculationsare based on the assumptionthat with the progressively deterioratingconveyance system, pumping stations, boreholes and dams, yields would progressively decline year after year, until they would reach 20% of pre-project levels by about project year 17.
F. INCREMENTAL PRODUCTION
19. Tables A.10 and A.11 show the estimatedannual incrementalproduction, based on the differencesof expectedyields in the last year Table 5: Summaryof Increment before system rehabilitation, which is anticipated to be PY3 for about 60% of the project area, and Crops Full Development PY4 for some 40% of the project area. The data show that vegetable production would be almost Grain 44,707 three times higher than in 1993; forage output Potatoes 32,118 would be more than four times higher; potato production would be expected to double; fruits Vegetables 135,309 would almost double; while grape production would increaseonly by about 5%, indicating the Forage 117,195 importancegrapes have in the Armenianeconomy Fruits 58,759 even under the current circumstances. Table 5 summarizes the total annual incremental Grapes 60,709 production betweenfull developmentand 1993.
G. NET FARM BENEFITS
20. The farm models in Tables A.6 and A.7, shows the net incomeper farm and per hectare at full project development.Table 6 below summarizesthe net incomeper farm in project year one and at full development.
Table 6: Net Farm Income at Full Development in US Dolars Situation Lowlands Midlands Before Project (PY1) 901 257 With Project' 1,749 1,171
The full developmentof the Low Lands would be reached in PY12. In the Mid Lands it is expected to be reached faster in PYIO, because in in smaler area the adjusmentis expected to be quicker. 140 Annex8
21. A more detailed analysis of net farm benefits was done for the lowlands and midlands showing income per ha is presented in Tables A.8 and A.9. Under the prevailing cost and price structure, the results are as presented below:
(a) highest net returns per ha are being achievedfrom vegetables,followed by fruits, grapes and potatoes;despite the conversionof forage into milk and meat, forage fares relatively poorly, just somewhatbetter than wheat, which gives lowest returns;
(b) highest retums per laborday come from fruits, followedby vegetablesand wheat; and
(c) best returns from the cubic meter of water are from potatoes and vegetables, followed by fruits. Agricultural Development 141
Table A.1
Estimated Development of Cropping Patterns on Average Irrigated Farm of 1.38 ha in Two Major Agroecological Areas: Lowlands and Midlands
1994 1996 Full Development
Lowlands Midlands Lowlands Midlands Lowlands Midlands
% ha % ha % ha % ha % ha % ha
Cereals 27 .37 50 .69 18 .25 40 .55 10 .14 32 .44 Potatoes 5 .07 3 .04 6 .08 4 .06 6 .08 4 .06 Tomatoes 14 .19 2 .03 17 .23 2 .03 17 .23 2 .03
Cabbage 0 0 1 .01 0 0 1 .01 0 0 1 .01 Forage 19 .26 20 .28 22 .30 27 .37 28 .39 33 .46 Fruits 14 .19 24 .33 15 .21 26 .16 16 .22 28 .39 Grapes 21 .29 0 0 22 .30 0 0 23 .32 0 0
Total 100 1.38 100 1.38 100 1.38 100 1.38 100 1.38 100 1.38
Table A.2
Lowlands Without Project With Project Crop PYI PY2 PY3 PY9 Total Increment
Wheat 2975 2644 2314 661 4250 1936 Potatoes 11200 10869 10539 2488 14000 3461
Tomatoes 14000 13669 13339 3111 19000 5661 Lucerne 7200 6869 6539 1600 9000 2461 Fruits 6500 6169 5839 1444 7800 1961
Grapes 5850 5519 5189 1300 7150 1961
Midlands Without Project With Project
Crop PY1 PY2 PY3 PY Total Increment
Wheat 2550 2219 1889 566 3400 1511
Potatoes 12600 12269 11939 2800 15400 3461 Tomatoes 12000 11669 11339 2666 17000 5661
Cabbage 16800 16469 16139 3733 24000 7861 Forage 5850 5519 5189 1300 7200 2011
Fruits 6500 6169 5839 1444 7800 1961 142 Annex 8
Table A.3, I: INPUT AND PRODUCER PRICES (OCTOBER 1993)
1. PUTS 1. Seed (Rb/Kg) Wheat 300-350 Barley 250-300 Potatoes 300-450 Maize 230-250 Rapeseed 150-200 Tomatoes 450 Beans 350 Cabbage 7,500 Alfalfa 2,500-3,000 Annual Grasses 300-350 Perennial Grasses 200-250
2. Planting Materials (Rb/I Piece) Apricots 500-600 Apples 600-650 Plums 500-600 Cherries 800-1,000 Peaches 500-600
3. Fertilizer (Rb/ton) N: Urea (46%) 120,000 AmnmoniumNitrate (36%) 120,000 P: Single superphosphate (18% P205) 15,000 Double superphosphate (36% P205) 30,000 K: Potassium chloride (60% K20) 8-10,000 Potassium salt (30% K20) 8-10,000
4. Pesdtddes (Rb/kg or 1) Herbicides (average) 2,000-3,000 Fungicides (average) 5,000-10,000 Insecticides (average) 5,000-10,000
S. Mechanized Work (Rb/ba) Tractor Ploughing 40,000 Cultivating 15,000 Sowing 15,000 Spraying 10,000 Fertilizing 10,000 Combine Harvesting 28,000 Tractor Straw Baling 15,000 Tractor Transport (Rb/ton/Km) 500
6. Energy (Rb/I) Gasoline 2,300 Diesel 1,000 Oil 1,500
7. Cost of Water (for Irription) (Rb/m) I m3 in the plain 18 1 m3 in the midlands 18
S. Cost of Labor (Rb) 1 Worker-Day 300 AgriculturalDevelopment 143
Table A.3, H: PRODUCT PRICES (Rb/kg)
Market Price Government Price Wheat 250-300 Straw 20 Barley 200-250 Straw 30 Potatoes Early 450-500 350 Potatoes 450-500 350 Tomatoes 700 420 Cabbage 450-500 350
Beans 2500 --
Fruits _ Apricots 1000 800 Apples 900 700 Plums 1,000 700 Cherries Peaches 1,000 700 Grapes 700 500
(Rb/ton)
Forage (Green) 15-20,000 -- Forage (Hay) 60,000 . Forage (Silage) 20-25,000 144 Annex 8
Table A.3, HI: SEED AND PLANTING RATES
SEED (Rb/kg) SEED RATES (kg/ha) Spring Winter
Wheat 220 300 Barley 220 250 Potatoes 3,200 - 4,000
Maize 30 (grain) 50 (silage)
Rapeseed 20 Tomatoes 1 Beans 120 - 200 Cabbage 0.5 Alfalfa 12 - 20 Annual Grasses 2,5 - 3 Perennial Grasses 35 - 40
Planting Materials Planting Rates (Nr-trees/ha) Apricots 208 - 286 Apples 208 - 1,000 Plums 333 - 667 Cherries 333 - 500 Peaches 333- 667 Agricultural Development 145
Table A.4: ONE ha CROP BUDGETS AT FULL DEVELOPMENT - LOWLANDS
Wheat Potatoes Vegetables Forage Fruits Grapes Quantity Total Quantity Total Quantity Total Quantity Total Quantity Total Quantity Total Rb '000 Rb '000 Rb '000 Rb '000 Rb '000 Rb '000 INCOME Yield (kg) 5000.00 20000.00 38000.00 10000.00 12000.00 11000.00 Loss Coeff (%) 0.85 0.7 0.5 0.9 0.65 0.65 Net Yield (kg) 4250.00 1275.00 14000.00 4900.00 19000.00 7980.00 9000.00 540.00 7800.00 5460.00 7150.00 3575.00 Straw (kg) 7500.00 150.00 Gross Margin 1425.00 4900.00 7980.00 540.00 5460.00 3575.00 EXPENDITURE Seed (kg) 300.00 97.50 3600.00 1350.00 1.00 0.45 5.00 13.75 15.00 8.25 24.00 Fertilizer (kg) 730.00 211.70 800.00 232.00 900.00 261.00 470.00 136.30 770.00 223.30 770.00 233.30 Pesticides (kg, 1) 2.00 48.00 5.00 120.00 5.00 120.00 2.00 48.00 5.00 120.00 5.00 120.00 Tractor (hrs) 11.00 220.00 13.00 260.00 7.00 140.00 3.00 60.00 3.00 60.00 3.00 60.00 Combine (brs) 1.25 32.50 0.00 0.00 0.00 0.00 0.00 Water (mn) 10000.00 180.00 6000.00 108.00 16000.00 288.00 16000.00 288.00 12000.00 288.00 14000.00 252.00 Transport CM1) 2.00 40.00 4.50 90.00 8.00 160.00 2.00 40.00 3.00 60.00 3.00 60.00 Total Cost 829.70 2160.00 969.45 586.05 687.55 739.30
NET INCOME ('000 Rb) 595.30 2740.00 7010.55 -46.05 4772.45 2835.70 Net Income (S) 248.04 1141.67 2921.06 -19.19 1988.52 1181.54 Net Income/MD ('000 Rb) 39.69 16.61 48.35 -0.54 57.50 12.89 Family Labor (MD) 15.00 165.00 145.00 85.00 83.00 220.00 146 Annex 8
Table A.5: ONE ha CROP BUDGETS AT FULL DEVELOPMENT - MIDLANDS
Wheat Potatoes Tomatoes Cabbage Forage Fruits Quantity Total Quantity Total Quantity Total Quantity Total Quantity Total Quantity Total Rb '000 Rb '000 Rb '000 Rb '000 Rb '000 Rb '000 INCOME Yield (kg) 4000.00 22000.00 34000.00 4000.00 8000.00 12000.00 Loss Coeff. (%) 0.85 0.7 0.5 0.6 0.9 0.65 Net Yield (kg) 3400.00 1020.00 15400.00 5390.00 17000.00 7140.00 24000.00 8400.00 7200.00 432.00 7800.00 5460.00 Straw (kg) 6000.00 120.00 Gross Margin 1140.00 5390.00 7140.00 8400.00 432.00 5460.00 EXPENDITURE Seed (kg) 300.00 97.50 3600.00 1350.00 1.00 0.45 0.5 3.75 5.00 13.75 15.00 8.25 Fertilizer (kg) 600.00 174.00 940.00 272.60 900.00 261.00 870.00 252.30 470.00 136.30 770.00 221.30 Pesticides (kg, 1) 2.00 48.00 5.00 120.00 5.00 120.00 2.00 48.00 5.00 120.00 Tractor (hrs) 11.00 220.00 13.00 260.00 7.00 140.00 13.00 260.00 3.00 60.00 3.00 60.00 Combine (hrs) 1.25 32.50 0.00 0.00 0.00 0.00 Water (n 3) 6000.00 108.00 6000.00 108.00 12000.00 216.00 12000.00 240.00 8000.00 144.00 11000.00 198.00 Transport (TH) 2.00 40.00 5.00 100.00 8.00 160.00 2.00 40.00 3.00 60.00 Total Cost 720.00 2210.00 897.45 756.05 422.05 669.55 NET INCOME ('000 Rb) 420.00 3179.40 6242.55 7643.95 -10.05 4790.45 Net Income ($) 175.00 1324.75 2601.06 3184.98 -4.19 1996.02 Net Income/MD ('000 Rb) 30.00 18.70 44.59 57.91 -0.15 57.72 Family Labor (MD) 14.00 170.00 140.00 132.00 66.00 83.00 AgriculturalDevelopment 147
Table A.6: FARM MODEL AT FULL DEVELOPMENT - LOWLANDS
Net Income (Rb '000) Labor MD (Rb '000) ha perha per farm per ha per farm Cereals 0.14 595.30 83.34 15.00 2.10 Potatoes 0.08 2740.00 219.20 165.00 13.20 Tomatoes 0.23 7010.55 1612.43 145.00 33.35 Forage 0.39 837.00 326.43 85.00 33.15 Fruits 0.22 4772.45 1049.94 83.00 18.26 Grapes 0.32 2835.70 907.42 220.00 70.40 1.38 4198.76 170.46 Net Income ($) 1749.48 $/MD 10.26
Table A.7: FARM MODEL AT FULL DEVELOPMENT - MIDLANDS
Net Income (Rb '000) Labor MD (Rb '000) ha perha per farm per ha per fanm Cereals 0.44 420.00 184.80 15.00 6.60 Potatoes 0.06 3179.40 190.76 165.00 9.90 Tomatoes 0.03 6242.55 187.28 145.00 4.35 Cabbage 0.01 7643.95 76.44 132.00 1.32 Forage 0.45 671.00 301.95 85.00 38.25 Fruits 0.39 4790.45 1868.28 83.00 32.37 1.38 2809.51 92.79 Net Income ($) 1170.63 $IMD 12.62 148 Annex 8
Table A.8: FARM MODEL IN PYI - LOWLANDS
Gross Income Crop cost Net Inc. per Net Inc. per Crop Yidd Unit Price Rb '000 PY4 Cost Coeff. Total Cost ha Crop area farm kg/ba Rb '000 Rb '000 Rb '000 Rb '000 ha Rb '000 Wheat 2975.00 0.30 892.50 830.00 0.70 581.00 311.50 0.72 224.28 Potatoes 11200.00 0.35 3920.00 2160.00 0.80 1728.00 2192.00 0.04 87.68 Tomatoes 14000.00 0.42 5880.00 969.00 0.74 717.06 5162.94 0.07 361.41 Forage 7200.00 0.14 1008.00 586.00 0.65 380.90 627.10 0.06 37.63 Fruits 6500.00 0.70 4550.00 688.00 0.83 571.04 3978.96 0.19 756.00 Grapes 5850.00 0.50 2925.00 739.00 0.82 605.98 2319.02 0.30 695.71 19175.50 4583.98 14591.52 1.38 2162.70 Net nc.(S) 901.13 2.40
Table A.9: FARM MODEL IN PY1 - MIDLANDS
Gross Income Crop cost Net Inc. per Net Inc. per Crop Yield Unit Price Rb '000 PY4 Cost Coeff. Total Cost ha Crop area farm ykg/ha Rb '000 Rb '000 Rb '000 Rb '000 ha Rb '000 Wheat 2550.00 0.30 765.00 720.00 0.75 540.00 225.00 0.63 141.75 Potatoes 12600.00 0.35 4410.00 2210.00 0.82 1812.00 2597.80 0.03 77.93 Tomatoes 12000.00 0.42 5040.00 897.00 0.71 636.87 4403.13 0.03 132.09 Cabbage 16800.00 0.35 5880.00 756.00 0.70 529.20 5350.80 0.01 53.51 Forage 5850.00 0.11 643.50 442.00 0.81 358.02 285.48 0.35 99.92 Fruits 6500.00 0.70 4550.00 670.00 0.83 556.10 3993.90 0.33 1317.63 21288.50 4432.39 16856.11 1.38 1822.83 NetInc.(S) 759.51 2.40 AgriculturalDevelopment 149
Table A.10: ESTIMATES OF INCREMENTAL PRODUCTION IN LOWLANDS - STARTING IN PY5*
CroppingPattern Increment Crop % ha kg/ha Total (t) Cereals 10 13460 1936 26059 Potatoes 6 8076 3461 27951 Tomatoes 17 22882 5661 129535 Cabbage 0 0 0 0 Forage 28 37688 2461 92750 Fruits 16 21536 1961 42232 Grapes 23 30958 1961 60709 Total 100 134600
* Note: It is anticipatedthat about 60% of the decreasein production compare to the pre-project level would be restored by the fourth project year, and the remaining40% by the fifthproject year.
Table A.11: ESTIMATES OF INCREMENTAL PRODUCTION IN MIDLANDS - STARTING IN PY5*
CroppingPattern Increment Crop percent ha kg/ha Total (t) Cereals 32 9632 1936 18648 Potatoes 4 1204 3461 4167 Tomatoes 27 602 5661 3408 Cabbage 1 301 7861 2366 Forage 33 9933 2461 24445 Fruits 28 8428 1961 16527 Grapes 0 0 0 0 Total 100 30100
* Note: It is anticipatedthat about 60% of the decrease in production compare to the pre-projectlevel would be restored by the fourth project year, and the remaining40% by the fifth project year.
ANNEX 9: PROJECT IMPLEMENTATION PLAN'
ACTIVITY START COMPLETE BY IN CHARGE 'Te Ministry of Agriculture April 27, 94 Ministry of appoint a Project Board to oversee Agriculture project implementation (MOA) Project Board Select a Project Manager April 27, 94 Project Board (PM) Bank no objection May 9, 94 Establishment of PIU (a) Bank propose a list of qualified April 27, 94 firms to establish a PIU. (b) Project Board select a short list. May 13, 94 Project Board (c) Bank no objection. May 27, 94 (d) Bank forward to the Project Board May 27, 94 letter of invitation (LOI) for firms to bid for establishment of PIU, proposed Terms of Reference, and draft contract for hiring the selected firm. (e) The Project Board issue LOI. June 30, 94 Project Board (f) MOA receive Consultants' tender August 15, 94 Project Board proposals. (g) MOA complete evaluation of August 15, 94 September 1, 94 Project Board consultant's proposal and submit to the Bank for clearance. (h) Bank no objection September 15, 94 (i) Negotiations and contract with September 15, 94 October 1, 94 Project Board selected company completed. j0)Consulting firm establish the PIU. November 1, 94 December 1, 94 Consulting firm.
Survey and Design of works in 1st December 1, 94 April 1, 95 Planning and group of 8 conveyance schemes. Design Unit of PIU. (a) Preparing tender documents for January 1, 95 March 1, 95 Procurement Unit goods on 1st group of 8 conveyance of PIU. schemes (ICB). (b) Bank no objection March 15, 95 (c) advertisement March 16, 95 July 15, 95 (d) Preparing protocol of responses July 16, 95 Aug 1, 95 (e) Bank no objection June 15, 95 (1)Signing of contract July 1, 95 Implementation of contract of 1st group September 1, 95 September 1, 96 Contractor of 8 conveyance scheme.
The Plan is subject to revision, particularlyfollowing detailed discussions with the PIU now being established. 152 Anne 9
Survey and Design of works in 2nd April 1, 95 August 1, 95 Plnning and group of 8 conveyanceschemes. Design Unit of PIU. (a) Preparing tender documentsfor May 1. 95 July 1, 95 Procurement Unit goods on 2nd group of 8 conveyance of PIU. schemes ([CB). (b) Bank no objection July 15, 95 (c) advertisement July 16, 95 October 15, 95 (d) Preparing protocol of responses October 16, 95 November 1, 95 (e) Bank no objection November 15. 95 (f) Signing of contnact December 1. 95 Implementationof contract of 2nd December 1, 95 December 1, 96 Conactor group of 8 conveyancescheme. Survey and Design of works in 3rd August 1, 95 December 1, 95 Planning and group of 8 conveyanceschemes. Design Unit of P1U. (a) Preparing tender documents for civil September 1, 95 November 1, 95 Procurment Unit works on 3rd group of 8 conveyance of PIU schemes. (b) Bank no objection November 15. 95 (c) advertisement November 16, 95 December 15. 95 (d) Preparing protocol of responses December 16, 95 January 2 96 (e) Bank no objection January 15, 96 (f) Signing of contract ___ February 1, 96 Implementationof civil works of 3rd February 1, 96 February 1, 97 Contractor group of 8 conveyancescheme. Survey and Design of works in 4th December 1, 95 April 1. 96 Phnning and group of 8 conveyanceschemes. Design Unit of ______P______IU . (a) Preparing tender documents for civil January 1, 96 March 1, 96 ProcurementUnit works on 4th group of 8 conveyance of PIU schemes. (b) Bank no objection March IS1 96 (c) advertisement March 16. 96 April 15. 96 (d) Preparing protocol of responses April 16, 96 May 1, 96 (e) Bank no objection May 15, 96 (f) Signingof contract June 1, 96 Implementationof civil works of 4th June 1., 96 June 1, 97 Contractor group of 8 conveyancescheme.
Survey and Design of works in 5th April 1, 96 August 1 96 Plann and group of 8 conveyanceschemes. Design Unit of PIU. ProjectImplementation Plan 153
a) Preparing tender documents for civil May 1, 96 July 1, 96 Procurement Unit works on 5th group of 8 conveyance of PIU schemes. (b) Bank no objection July 15, 96 (c) advertisement July 16, 96 August 15, 96 (d) Preparing protocol of responses September 16, 96 October 1, 96 (e) Bank no objection October 15, 96 (f) Signing of contract November 1. 96 Implementationof civil works of 5th October 1, 96 October 1, 97 Contrawtor group of 8 conveyance scheme. Survey and Design of works in 6th August 1, 96 December 1, 96 Pluming and group of 8 conveyance schemes. Deign Unit of PIM. a) Preparing tender documents for September 1, 96 November 1, 96 ProcurementUnit concrete sections in Ist group of 8 of PIU conveyance schemes. (b) Bank no objection November 15, 96 (c) advertisement November 16, 96 December 15, 96 (d) Preparing protocol of responses December 16, 96 January 2, 97 (e) Bank no objection January 15, 97 (f) Signing of contract February 1, 97 Implementationof concrete secdons February 1, 97 February 1, 98 Contactor works of Ist group of 8 conveyane scheme. Survey and Design of works in 7th December 1, 96 April 1, 97 Plannizg Nd group of 8 conveyanceschemes. Design Unit of . ______PIU a) Preparing tender documentsfor January 1, 97 March 1, 97 Procurement Unit concrete sections on 2nd group of 8 of PIU conveyanceschemes. (b) Bank no objection March 15, 97 (c) advertisement March 16, 97 April 15, 97 (d) Preparing protocol of responses April 16, 97 May 1, 97 (e) Bank no objecdon May 15, 97 (f) Signing of contract June 1, 97 Implementationof concrete sections June 1 97 June 1, 98 contractor works of 7th group of 8 conveyance scheme. Survey and Design of works in 8th April 1, 97 August 1, 97 Planning and group of 8 conveyance schemes. . Des Unit of PIM 154 Ann= 9
a) Preparing tender documents for May 1, 97 July 1, 97 Procurement Unit concrete pipes works on 8th group of 8 of PIU conveyanceschemes. (b) Bank no objection July 15, 97 (c) advertisement July 16, 97 August 15, 97 (d) Preparing protocol of responses August 16, 97 September 1, 97 (e) Bank no objection September 15, 97 (f) Signing of contract October 1, 97 Implementationof concrete pipes works October 1, 97 October 1, 98 Contractor of 8th group of 8 conveyance scheme. Survey and Design of works in 9th August 1, 97 December 1, 97 Planning nd group of 8 conveyance schemes. Design Unit of PIU a) Preparing tender documents for September 1, 97 November 1, 97 ProcurementUnit concrete pipes on 9th group of 8 of PIU conveyance schemes. (b) Bank no objection November 15, 97 (c) advertisement November 16, 97 December 15, 97 (d) Preparing protocol of responses December 16, 97 January 2, 98 (e) Bank no objection January 15, 98 (f) Signing of contract February1, 98 Implementationof concrete pipes works February 1, 98 February 1, 99 Contractor of 9th group of 8 conveyance scheme. Survey nd design of dam December 1, 94 April 1. 95 Panning and rehabilitadons. Design Unit of PIU a) Preparing tender documents dams March 1, 95 May 1, 95 Procurement Unit rehabilitation(ICB). of PIU (b) Bank no objecdon May 15, 95 (c) advertisement May 16, 95 August 15, 95 (d) Preparing protocol of responses August 16, 95 September 1, 95 (e) Bank no objecdon September 15, 95 (f) Signing of contract October 1, 95 Implementationof dam rehabilitadons October 1, 95 November 1, 97 Contractor (ICB) a) Preparing tehdfr documents dams March 1, 95 May 1, 95 Procurement Unit rehabilitation (LCB). of PIU (b) Bank no objection May 15, 95 (c) advertisement May 16, 95 June 15, 95 (d) Preparing protocol of responses June 16, 95 July 1, 95 (e) Bank no objection July 15, 95 (f Signing of contract August 1, 95 Implementationof Dam rehabilitation August 1, 95 August 1, 96 Contractor (LCB) l Project Implementation Plan 155
Survey andDesign of rehabilitationof 4 December 1, 94 November 1, 95 Planning and pumping schemes Design Unit of I______PIU a) Preparing tender documents of Ist August 1, 95 December 1, 95 Procurement Unit group of pumping schemes of PIUl rehabilitation(ICB). (b) Bank no objection December 15, 95 (c) adverdsement December 16, 95 March 15, 96 (d) Preparing protocol of responses March 16, 96 April 1, 96 (e) Bank no objecdion April 16, 96 (f) Signing of contract May 1, 96
Implementationof rehabilitationof 1st May 1, 96 May 1, 98 Contractor group of pumping schemes a) Preparing tender documents of 2nd December 1, 95 April 1, 96 ProcurementUnit group of pumping schemes of PIU rehabilitation(ICB). (b) Bank no objection April 15, 96 (c) advertisement April 16, 96 July 15, 96 (d) Preparing protocol of responses July 16, 96 August 1, 96 (e) Bank no objection August 16, 96 (t) Signing of contract September 1, 96 Implementadonof 2nd group of September 1, 96 September 1, 98 Contuactor pumping schemes rehabilitation l a) Preparing tender documents of 3rd August 1, 95 October 1, 95 Procurement Unit group of pumping schemes of PIU rehabilitation(LCB). (b) Bank no objecdon October 15, 95 (c) advertisement October 16. 95 November 15, 95 (d) Preparing protocol of responses December 1, 95 December 15, 95 (e) Bank no objecdon Juaiy 2, 96 (f) Signing of contract JarPy 15, 96 Implementationof 3rd group of January 15, 96 May 15, 97 Contractor pumping schemes rehabilitadon Well drilling and equipment acquisition December 1, 94 March 1, 95 Planning nd Desin Unit of PIU a) Preparing tender documents for well February 1, 95 May 1, 95 Procurement Unit drilling and equipmem of PIU (b) Bank no objection May 15, 95 (c) adverisement June 1, 95 September 1, 95 (d) Preparing protocol of responses September 15, 95 October 1, 95 (e) Bank no objection October 15, 95 (f) Signingof contract November 1, 95 Procurementof submersible pumps November 1, 95 May 1, 96 Supplier 156 Annex 9
a) Preparingtender documents for well October1, 95 December1, 95 ProcurementUnit drillingand pumpinstallations of PIU (b) Bankno objection December15, 95 (c) advertisement January2, 96 February15, 96 (d) Preparingprotocol of responses March 1, 96 March15, 96 (e) Bankno objection April 1, 96 (f) Signingof contract April15, 96 Implementingwell drillingand pump May 1, 96 May 1, 98 Contractor installadon a) Preparingtender documents for December1, 94 April1, 95 ProcurementUnit acquisitionof spareparts for pumps of PIU (b) Bankno objection April 15, 95 (c) advertisement May 1, 95 June 15, 95 (d) Preparingprotocol of responses July 1 July 15, 95 (e) Bankno objection August1. 95 (t) Signingof contract August1S, 95 Implementingacquisition of spareparts August15, 95 November1, 95 Supplier for pumps Pilot nroiects for establishin2 WUA (a) Procurementunit of PIU prepare a January2, 95 March 1, 95 ProcurementUnit list of consultantsto of PIU implementthe pilot projects. (b) ProjectBoard select a short list. March 15, 95 ProjectBoard (c) Bankno objecdon. April 15, 95 (d) LOIsent to companieson the short May 1, 95 list ProcurementUnit (e) PIU receiveconsultant's tender July 1, 95 of PIU proposal. (f) PIU completeevaluation of July 15, 95 proposals. ProcurementUnit (g) Bankno objection. August1, 95 of PIU (h) Contractnegotiation and signing. August15, 95 September1, 95 (i)Consultingfirm commenceswork as October1, 95 ProjectBoard a Unit for Pilot projects. Selectingfirst group of four villagesto November1, 95 December1, 95 Pilot Projects establish WUA Unit of PIU Preparingwork program for the first December1, 95 January2, 96 Pilot Projects group of WUA Unit of PIU Surveyand designof outletsfor the January2, 96 March 1, 96 Planningand frmrs in the first group of WUA designUnit of PIU Shoppingand contractingworks to March 1, 96 May 1, 96 ProcurementUnit installoutlets for the first groupof of PIU WUA Implementinginsllation of outletsto May 1, 96 December1, 96 Contractor WUA Project Implementation Plan 157
Selecting second group of fifty villages January 2, 96 April 1, 96 Pilot Projects to establish WUA Unit of PIU
Preparing work program for the second April 1, 96 August 1, 96 Pilot Projects group of WUA Unit of P1U
Survey and design of outlets for the August 1. 96 December 1, 96 Planning and farmers in the second group of WUA design Unit of PIU
a) Preparing tender documents for December 1, 96 February 1, 97 Procurement Unit equipment for pilot projects (LCB) in of PIU the second group. (b) Bank no objection February 15, 97 (c) advertisement February 16, 97 March 15. 97 (d) Preparing protocol of responses March 15, 97 April 1, 97 (e) Bank no objecdon April 15, 97 (f) Signing of contract May 1. 97
Implementing installation of outlet for May 1 97 December 1, 98 contramtor the second group of WUA Selecting third group of 350 villages to April 1, 96 August 1, 96 Pilot Projects establishWUA Unit of PIU
Preparing work program for the second June 1, 96 November 1, 96 Pilot Projects growp of WUA Unit of PIU
Survey and design of outlets for the June 1, 96 May 1. 97 Planning and farmers in the third group of WUA design Unit of PIU
a) Preparing tender documents for December 1, 96 June 1 97 Procurement Unit equipment for pilot projects (LCB) in of PIU the third group. (b) Bank no objecdon June 15 97 (c) advertisement July 1, 97 August 15, 97 (d) Preparing protocol of responses August 15, 97 September 1,97 (e) Bank no objection September 15, 97 (f) Signing of contract October 1, 97
Implementing installation of outlet for October 1, 97 October 1, 98 Contractor the third group of WUA
a) Preparing tender documents for May 1 96 December 1, 96 Procurement Unit equipment for pilot projects (ICB) in the of PIU third group. (b) Bank no objection December 15, 96 (c) advertisement January 2, 97 April 1, 97 (d) Preparing protocol of responses April 15, 97 May 1, 97 (e) Bank no objection May 15, 97 (f) Signing of contract June 1, 97
Implementing installadon of outlet for June 1 97 June 1, 98 Contractor the second and third group of WUA 158 Annea 9
Technicl Assisnce StaffTraining (a) Preparingplan for technical January2. 95 April 1. 95 Unit of PIU assistancefor irrigatedcrop producdon and for stafftraining. (b) PreparingTOR for technical April 1, 95 July 1, 95 asistance for irrigatedcrop production. (c) PreparingTOR for PIU stff April 1, 95 July 1, 95 training. (d) Bankno objectionto technical July 15, 95 usistance andsff training program. Conractingtechnical Assistance and staff August1 95 Continuousbasis ProcurementUnit traning of PiU Assistanceto UpdateWater MasterPlan WaterMasterplan Reviewte watermaster plan with the January2, 1995 December31 95 Unitof PIU WaterPlaning Insdtute, discuss assumptionsand proposechanges. Bankno objection January15, 96 Prearatdonof New IrriaadonProiect WaterMasterplan (a) Determiningobjectdves and priorides Januay 2, 1995 April 1, 1995 Unit of PIU of new irrigationproject (b) Idendtfyingcomponents of the April 1, 1995 July 1, 1995 projct (c) contracdngthe WPI to prepare July 1, 1995 January2, 1996 engineein designof the project (d) preparecost esmate of the project January2, 1996 April 1. 1996 componer (e) preparebenefits evaluadon of the April 1, 1996 August 1, 1996 project (Mprepare benefit cost analyis of the August1, 1996 project ANNEX 10: PROPOSED PROJECT SUPERVISION PLAN
Approximate Activity Expected Skill Requirement Staff Week Date of Input l December94 SupervisionMission Task Manager 12 Briefing the PIU on its tasks Irrigation Engineer and project launch ProcurementSpecialist DisbursementSpecialist Water Management Specialist l May 95 SupervisionMission Task Manager 10 Irrigation Engineer l November 95 SupervisionMission Task Manager 12 Irrigation Engineer Dam Specialist ProcurementSpecialist May 96 SupervisionMission Task Manager 10 Irrigation Engineer November 96 SupervisionMission Task Manger 10 l______IrrigationEngineer l May 97 SupervisionMission (mid- Task Manager 15 term review) Irrigation Engineer Water Management Specialist Dam specialist Procurementspecialist November97 SupervisionMission Task Manager 10 Irrigation Engineer May 98 SupervisionMission Task Manager 10 Irrigation Engineer November98 SupervisionMission Task Manager 10 l______IrrigationEngineer May 99 SupervisionMission Task Manager 12 (and PCR preparation) Irrigation Engineer Water Management Specialist .______.__ Agriculturalist
ANNEX 11: SELECTED DOCUMENTS AVAILABLE IN PROJECT FILE
1. Republicof Armenia, Irrigation Subsector Review and Project Identification SubsectorReview and Project IdentificationReport, Report No: 79/93 CP - ARM 2, May 25, 1993, FAO/InvestmentCenter.
2. PreparationReport for Irrigation RehabilitationProject, September 1993, IRS-TKB, InternationalConsultants Ltd. Two Volumes.
3. Armenia Irrigation RehabilitationProject, Safety Check Seven Dams, Two Volumes, HASKONING, Royal Dutch Consulting Engineers and Architects, December 1993.
4. Armenia Irrigation RehabilitationProject, First Priority RehabilitationProgram, HASKONING, Royal Dutch ConsultingEngineers and Architects, February 1994.
5. Armenia Irrigation RehabilitationProject, SecondPriority RehabilitationProgram, HASKONING, Royal Dutch Consulting Engineers and Architects, February 1994.
6. Republicof Armenia, Irrigation RehabilitationProject, Panel Expert Report, Dam Safety Review, March 94.
7. ARM - Armenia Irrigation RehabilitationProject. Concrete Linings of Main and Secondary Canals of Major Irrigation Systemsin Armenia. Mission Report. Prepared by Piero Sembenelli, Consultant,August, 4, 1994.
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