Document of The World Bank
FOR OFFICIAL USE ONIY
Public Disclosure Authorized Report No. 7543
PROJECT PERFORMANCE AUDIT REPORT
Public Disclosure Authorized YEMEN ARAB REPUBLIC
TIHAMA DEVELOPMENT PROJECTS II AND IV (CREDITS 805-YAR AND 978-YAR)
DECEMBER 22, 1988 Public Disclosure Authorized
Operations Evaluation Department Public Disclosure Authorized
This document has a restricted distribution and may be used by recipients only Inthe performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. GLOSSARY OF ABBREVIATIONS
CACB - Co-operative Agricultural Credit Bank CPO - Central Planning Organization CARS - Central Agricultural Research Station CHTC - Central High Tendering Committee DCA - Development Credit Agreement DHV - DHV Counsulting Engineers , ECWA - Economic Commission for West aia EEC - European Economic Community ERR - Economic Rate of Return FAOCP - Food and Agriculture Organization of the United Nations/World Bank Cooperative Program GDP - Gross Domestic Proudet GNP - Gross National Product ICA - International Advisory Company ICB - International Competitive Bidding IDA - International Development Association KFAED - Kuwait Fund for Arab Economic-Development LDA - Local Development Association LRD - Land Resources Division of (0DM) HAF - Ministry of Agriculture and Fisheries M&E - Monitoring and Evaluation OED - Operations Evaluation Department ODM - Overseas Development Ministry (UK) O&M - Operation and Maintenance PCR - Project Completion Report PPAM - Project Performance Audit Memorandum PPAR - Project Performance Audit Report SAR - Staff Appraisal Report TDA - Tihama Development Authority TDPII - Tihama Development Project II TDPIV - Tihama Development Project IV UNDP - United Nations Development Program YAR - Yemen Arab Republic
THE YMAEN ARAB REPUBLIC
FISCAL YEAR July 1 - June 30 OFFICIAL USE ONLY THE WORLD SANK FOR Washington. D.C. 20433 U.S.A.
Oice of orectw-eneral Operatimn Ivaluatie
December 22, 1988
MEMORANDUM TO THE EXT.CUTIVE DIRECTORS AND THE PRESIDENT
SUBJECT: Project Performance Audit Report on the Yemen Arab Republic Tihama Development Projects II and IV (Credits 805-YAR and 978-YAR)
Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Yemen Arab Republic Tihama Development Projects II and IV (Credits 805-YAR and 978-YAR)" prepared by the Operations Evaluation Department.
Attachment
This document has a restricted distribution and may be used by recipients only in the performance of their oficial duties. Its contents may not otherwise be disclosed without World Bank authorization. PROJECT PERFO14ANCE AUDIT REPORT
YEMEN PlAB REPUBLIC TIHAMA DEVELOPMENT PROJECTS II AND IV (CREDITS 805-YAR and 978-YAR)
Table of Contents Page No.
PREFACE ...... *...... I BASIC DATA SHEET ...... #..... t i EVALUATION SUMMARY ...... viii
PROJECT PERFORMANCE AUDIT MEMORANDUM
I. Introduction ...... *...... 1 II. The Development of the Tihama ...... 2 III. The Wadi Zabid Experience ...... o...... 4 IV. Project Evolution, Definition, and Design ...... 7 V. Project Implementatiovn ...... 14 VI. Project Economics ...... o...... 16 VII. Project Sustainability ...... 20 VIII. Lessons ...... 0...... f...... t o...... 23
PROJECT COMPLETION REPORT
I. Highlights ...... 29 II. Introduction ...... 00...... 0...... 31 III. Project Implementation ...... t. 31 IV. Origin, Preparation and Justification ...... 32 V. Tihama Development Project II .. *...... 33 VI. Tihama Development Project IV ...... 35 VII. Economic Analysis ... oo* ...... 39 VIII. Institutional Performance ...... 39 IX. Lessons Learned ..*.** ...... * ...... 42
ATTACHMENTS
1. Comments from Borrower ...... 45 2. Comments from Region ...... 53 3. Comments from Royal Netherlands Embassy - Sanaa ...... 57 4. Comments from Kuwait Fund for Arab Economic Development ...... 58
MAP 0...... IBRD 20964
This document has a restricted distribution and may be used by r" ipients only in the performance of their olfcial duties. Its contents may not otherwise be disclosed without World Bnk authorization. 11
PROJECT PERFORMANCE AUDIT REPORT
YEMEN ARAB REPUBLIC TIHAMA DEVELOPMENT PROJECTS II AND IV (CREDITS 805-YAR and 978-YAR)
PREFAC F
1. This is the report of the performance audit of the Tihama Development Projects II and IV in the Yemen Arab Republic. The first project was partially financed by an IDA Credit of $10.5 millions and was approved by the Board in May 1978. The Credit was closed in June 1986 and was fully disbursed. The latter project was partially financed by an IDA credit of $5.5 million and was approved by the Board in January 1980. The credit was also closed in June 1986 and was fully disbursed.
2. The Project Performance Audit Report (PPAR) consists of: (i) an Evaluation Summary and a Project Performance Audit Memorandum (PPAM), prepared by the Operations Evaluation Department (OED) and; (ii) a Project Completion Report (PCR), dated March 26, 1987, prepared by the staff of the Europe, Middle East and North Africa Regional Office.
3. OED has reviewod the PCR against the President's Report, the Staff Appraisal Report (SAR), the Minutes of the Executive Director's Meeting at which the project was approved, and Bank files and documents related to the project. An OED mission visited the YAR in January 1988 to examine facilities and equipment and discuss the project with government officials. Available Bank staff and consultants, who were associated with or knowledgeable about the project, were also interviewed.
4. Following standard procedures, OED sent copies of the draft PPAR to the Government, cofinanciers and executing agencies for comments. The comments received from the Borrower are reproduced as Attachment I to the PPAR. The EMENA Region submitted comments too lengthy to be fully reflected in footnotes and are reproduced as Attachment II. Comments received from the Government of the Netherlands are included as Attachment III while those received from the Kuwait Fund for Arab Economic Development are reproduced in Attachment IV. Many of the comments represent useful qualifications and extensions of the PPAM and are accepted as such. With some the Audit is in disagreement and notes to this effect are made either in the margin (Attachment I) or as footnotes (Attachment II). PROJECT PERFORMANCE AUDIT REPORT
YEMEN ARAB REPUBLIC
TIRAMA DEVELOPMENT PROJECT II (CREDIT 805-YAR)
BASIC DATA SHEET
KEY PROJECT DATA
Actual as % Appraisal Actual/ of Appraisal Item Estimate Forecast Estimate
Total Project Cost (US$ million) 39.5 41.0 96 Cost Overrun (%) - 4 Credit Amount (US$ million) 10.5 10.5 100 Disbursed (US$ million) 10.5 10.5 100 bate of Effectiveness 09178 03179 Date Project Completion 06184 06/86 Time overrun (%) - 26 Economic Rate of Return (%) 23 Greater than 10%/1
CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS
FY79 FY80 FY81 FY82 FY83 FY84 FY85 FY86
Estimated 1.5 4.2 7.0 9.5 10.5 10.5 10.5 10.5 Actual 0.0 0.0 3.6 6.3 7.8 8.6 9.5 10.5 Actual/Est.(%) - - 51 66 74 82 90 100
PROJECT DATES
Item Orikinal Plan Actual or Reestimate
First Mention in Files 03/76 Appraisal 09/77 09/77 Negotiations 04/78 04/78 Board Approval 05/78 05/78 Closing 06/84 06/86
11 See para 51 page 19 of the PPAM for an explanation. iv
STAFF INPUTS (staff weeks)
FY74/76 FY77 FY78 FY79 FY80 Y81 F2 FY83
Pre-Appraisal 0.9 33.8 5.6 Appraisal 57.7 Negotiations 4.1 Supervision 3.3 10.1 9.0 8.8 19.5
Other 0.7 0.1 2.8 - -. 2 0.3 Total 1.6 33.8 70.2 .3.3 10.1 9.2 9.1 19.5
FY84 FY85 FY86 FY87 Total
Pre-Appraisal 40.3 Appraisal 57.7 Negotiations 4.1 Supervision 9.9 8.8 14.1 3.0 86.6 Other 0.1 4.2 Total 9.9 8.8 14.3 3.0 192.7
MISSION DATA
Date No. of Specializations/2 Performance (mo/yrj. Persons Represented Rating
Appraisal TDPII 9/77 3 EI'A/Ec N.A. Supervision TDPIV 12/78 1 A 1/- Appraisal 2/79 5 E/A/L/2Ec Supervision I 11/79 2 E/A 1/1 Supervision II 6/80 3 E/A/Ec 1/2 Supervision III 2/81 5 A/C/E/F/T 1/2 Supervision IV 12/81 2 A/E 2/1 Supervision V 9/82 3 E/Ec/A 2/1 Supervision VI 5/83 3 E/A/C 2/1 Supervision VII 11/83 3 E/A/C 211 Supervision VIII 11/84 3 E/A/C 2/1
/2 A=Agronomist, E-Engineer, Ec-Economist, L=Livestock Specialist, C=Credit Specialist; T=Training Specialist. v
OTHER PROJECT DATA
Borrower: The Yemen Arab Republic
Executing Agencies: The Tihama Development Authority and The Agricultural Credit Fund
Follow-on Projects: Tihama Development Project III, Credit 880-YAR, 1979. Tibama Development Project IV, Credit 978-YAR, 1979. Tihama V Regional Agricultural Development Project, Credit 1667-YAR, 1986.
Fiscal Year of Borrower: July 1 - June 30 vi
PROJECT PERFORMANCE AUDIT REPORT
YEMEN ARAB REPUBLIC TIHAMA DEVELOPMENT PROJECT IV (CREDIT 978-YAR)
BASIC DATA SHEET
KEY PROJECT DATA
Actual as % Appraisal Actual/ Item of Appraisal Estimate Forecast Estimate Total Project Cost (US$ million) 20.8 22.0 Cost Overrun 94 (%) - Credit 6 Amount (US$ million) 5.5 Disbursed 5.5 100 (US$ million) 5.5 Date of Effectiveness 5.5 100 08/80 04/81 Date Project Completion 06/85 06/86 Time overrun (%) - 7 Economic Rate of Return (%) 17 Less than 5 %/3
CUMULATIVE ESTIMATED AND ACTUAL DISBURSEMENTS
FY80 FY81 FY82 FY83 FY84 FY85 FY86 Actual Estimate (US$ million) 0.1 0.9 2.9 Actual 4.8 5.5 5.5 5.5 (US$ million) 0.0 0.0 Actual/Est.(%) 0.6 2.2 3.3 4.6 5.5 - - 21 46 60 84 100
PROJECT DATES
Item Original Plan Actual or Reestimate First Mention in Files 03/76 Appraisal 09/77 Negotiations 02/79 11/79 11/79 Board Approval 01/80 Closing 01/80 06/85 06/86
/3 See paras 50, 51, and 52 of the PPAM for an explanation. vii
STAFF INPUTS (Staff-Weeks)
FY79 FY80 FY81 FY82 FY83
Pre-Appraisal 6.6 Appraisal 36.4 4.9 Negotiations 5.4 Supervision 2.2 5.2 8.9 13.0 Other 0.1 0.2 1.3 Total 43.1 12.7 5.3 10.2 13.0
FY84 FY85 FY86 FY87 Total
Pre-Appraisal 6.6 Appraisal 41.3 Negotiations 5.4 Supervision 7.7 10.8 10.5 2.7 61.1 Other 0.1 1.6 Total 7.7 10.8 10.5 2.7 116.0
MISSION DATA
Date No. of Specialisations/4 Performance (mo./yr.) Persons Represented Rating
EIA/Ec Appraisal TDPII 9177 3 TDPIV 12178 1 A Supervision N.A. Appraisal 2/79 5 E/AIL/2Ec I 11/79 2 E/A Supervision N.A. Supervision II 6/80 3 E/A/Ec N.A. III 2/81 5 A/CE/F/T Supervision 2/1 IV 12/81 2 A/E Supervision 211 V 9/82 3 ElEc/A Supervision 2/1 Supervision VI 5/83 3 E/AIC 2/1 Supervision VII 11/83 3 E/A/C E/AlE 1/1 Supervision VIII 11/84 3
Specialist, C=Credit I4 A=Agronomist, E=Engineer, Ec=Economist, L=Livestock Specialist; T=Training Specialist. viii
OTHER PROJECT DATA
Borrower: The Yemen Arab Republic
Executing Agencies: The Tihama Development Authority and The Agricultural Credit Fund
Follow-on Projects: Tihama V Regional Agricultural Development Project, Credit 1667-YAR, 1986.
Fiscal Year of Borrower: July 1 - June 30 ix
PROJECT PERFORMANCE AUDIT REPORT
YEMEN ARAB REPUBLIC TIHAMA DEVELOPMENT PROJECTS II AND IV (CREDITS 805-YAR and 978-YAR)
EVALUATION SUMMARY
Introduction
1. The Tihama is the narrow coastal plain of the Yemen Arab Republic. The wadis of the Tihama are drainage courses formed by the intermittent runoff of rainfall from the central highlands of the YAR. For centuries, the people of the Tihama have irrigated the otherwise semi-desert of the Tihama with locally constructed temporary structures that divert a portion of the intermittent floods (or spates) onto the adjoining land. There are about six major wadis passing through the Tihama (see map IBRD 20964) and four of these have served as the focal point for an IDA lending operation (or operations). Tihama I was focused on Wadi Zabid and it set the pattern for the operations that followed. Tihama II was partially focused on Wadi RIma and almost all of Tihama IV was. Tihama III was associated with Wadi Mawr while Ti ama V concentrated on Wadi Siham. Thus, a very neat (in a programming sense) series of area development schemes was launched in the early 1970s.
2. This is the audit of Tihamas II and IV that together comprise the Wadi Rima Project. It is a lengthy, complex and critical audit because it reexamines the audit of the first project in the series (Tihama I) and finds it seriously deficient. The fundamental deficiency was the notion that surface irrigat._a investments in the form of permanent diversion structuvs in the wadis was the desireable and efficient technology to support. This view carried over into Tihamas III, IV, and V. (PPAM, paras. 1-17)/!
3. The Audit is satisfied that the preliminary data collection and analytical work carried out for the project by the British Overseas Development Ministry and the Ft0 CP was of a generally high qnality and that most of the concerns expressed at that time (and subsequently in this audit) have, in retrospect, been well-founded. (PPAM, paras. 18-36)
/5 The Borrower, the Region and the cofinancier providing a major share of the funding take vigorous exception to this statement. Their comments, together with those of the Audit, are recorded in Attachments I, II, and IV. The cofinancier that provided most of the technical input for the project is in general agreement with the Audit's position (See Attachment III) x
Implementation Experience
4. Tihamas II and IV were completed at about the same time and there was no evidence of any expenditures that were grossly out of line with expectations, as had been the case with the Tihama I proje:t. The time overrun of Tihama II is understandable, given the complexity of the project. The Audit then concurs that the Wadi Rima project was completed within a reasonable time period and within the costs expected. For the type of project undertaken, this is a major achievement. (PPAM, paras. 37-40)
Results
5. For Tihama II the case can be made that the investments were economically justified and the benefits equitably distributed. For Tihama IV all of the evidence available to OED at this time suggest a misallocation of risources for a surface irrigation component that is likely to heighten the historical inequities associated with access to water in the Tihama.16 If the Wadi Rima project had stopped with Tihama II, it could be judged as a qualified success. (PPAM, paras. 45-52)
Sustainability
6. Perhaps the most useful of the many studies financed under the project was the Tihama Basin Water Resources Study which commenced in 1980 and was finally completed in late 1987, too late to be of any use for the first five Tihama lending operations. It confirma the uneconomic nature of the wadi surface irrigation investments, documents the rise of privately-financed groundwater extraction and the decline of spate irrigation./Z It also
16 The Region, the Borrower and the main cofinancier take exception to this statement. (See footnote 7 below and Attachments I, II, and IV for detailed positions)
/. The Region has pointed out that the findings of the draft DHV report have not been accepted by the TDA and that TDA has challenged both the assumptions made and the data applied by the consultants that, in the present draft report, support the contention that surface water is more costly than groundwater. Should TDA's contention prove to be correct, the conclusions reported in the November 1987 DHV draft concerning relative costs of water from the two technologies could change significantly. However, the Audit's position does not rest solely on the DHV analysis or the relative costs of water from the two technologies. Rather, it is based on an assessment of the numerous cost and benefit analyses associated with the project and the broader view that groundwater drawn from an aquifer-reservoir is a different, more controlled, more dependable and more efficient source of plant moisture in the Tihama. It has, spontaneously, become the privately- financed technology of choice and actually produces most of the high xi documents the large net deficit in the basin water resourcoe3 and the resultant steady decline in the water table. It points out that the present extraction rates are not sustainable and recommends alternative drastic rationing regimes to avoid major inequities amongst present users.
7. In the Audit's opinion the likely scenario will be the continuance of the laissez faire attitude towards pump operations and the active support of the spate irrigation operations until serious inequities and/or natural disasters such as sea water infiltration or reduced urban water supplies force action. The water balance will eventually come, but only after the water table has been put out of the financial reach of the inefficient, the poorly capitalized, or the poorly located. All of this will certainly raise some serious equity questions.
8. In this environment, the Bank's support of agricultural research and extension in the Tihama, especially for rainfed agriculture, is certainly appropriate and will hopefully produce sustainable improvements in farm technology and management. The same can be said for rural roads investments and health related investments such as rural water supplies. The latter, however, will be competing with irrigation uses for water and deepening of the IDA-financed wells will certainly be required in the near future if the benefits from the initial investments are to continue to be available.
9. For the surface irrigation components the most profound level of concern is the long term impact of the surface irrigation investment on Tihama farmers. Farmers positioned near the weirs will have the special benefit of diverted spate water at no charge. Since the major recharge to the aquifer comes from spate waters and diverted surface water, these farmers will also have access to some of the lowest cost groundwater. As the water table for those distant from the wadi recharge declines beyond financially feasible depths, those near the weirs and adjacent to the wadi will have exclusive access to financially feasible water. In this sense, things will have reverted to the original days of pre pump technology in which a small group of farmers had access to the surface water. For a period of about thirty years, this monopoly on water was broken by the new pump technology, That technology, uncontrolled, and the construction of permanent diversion structures in the wadis has made the reassertion of the monopoly feasible and even likely. Much depends on how the losers in the groundwater access competition accept their fate./8 For the IDA-financed surface water facilities it assures that strong vested interests will see to it that the facilities are maintained and operated - at least the upstream elements. It also assures an important role for the Tihama Development Authority (TDA) in the region. In this sense, two of the large components of the Wadi Rima
value fruit and vegetables in the Tihama. The erratic surface spate flows are provided at public expense and are used mainly for flood irrigation of low value grain and fodder crops. See the detailed arguments in Attachments I, II, and IV and footnotes 43 and 45 on page 21.
18 See Attachment I for a dissenting view on the equity issue. xii project, The TDA and the surface water irrigation system will endure. (PPAM paras. 53-59)
Lessons
10. The power and the momentum of early commitments to a technical solution are well-illustrated with the irrigation subcomponent of the Wadi Rims project. The crucial decision was made when the Bank announced it would not finance other than permanent engineered structures. The project went ahead on that basis. When the economics of such an initiative became doubtful the commitments had been made and were difficult to abandon or alter. The creative interaction of economist, engineer and agriculturalist; working with preliminary cost, benefit and yield assumptions early in the project cycle; was missing. (PPAM paras. 60-62)
11. For OED, the costs of the inadequate audit of the Tihama I project are well-illustrated. Complex projects that set the tone and pattern of a series of similar lev ing operations need to be audited with particular care. Matching the appropriate staff resources with the project under &vtdit is essential.(PPAM, para. 63)
12. Fortunately, there was much that was good about this project and its implementation. The fact that the surface water irrigation component has become a smaller share of total resource commitments in the most recent Tihama project and that conjunctive development under similar circumstances has become the theme elsewhere is encouraging.12 These developments might have taken place much sooner with the information that was then available if the right critical faculties had been encouraged at the outset.
19 For a dissenting view concerning the relevance of experiences in an adjacent country, see Attachment II paragraph 8. PROJECT PERFORMANCE AUDIT MrMORANDUM
YEMEN ARAB REPUBLIC
TIHAMA DEVELOPMENT PROJECTS II AND IV (Credits 805-YAR and 978-YAR)
I. Introduction
1. The Bank has been actively involved in the development of the Tihama coastal plain of the Yemen Arab Republic since 1970 and has made five credits for development of four subregions of the Tihama, since 1973. This is the combined audit of the second and fourth of these lending operations, that is, Tihama II and IV. Since the five credits were all focused on subregions defined by drainage courses called wadis, the audit will adopt the convention of referring to the various projects by the name of the wadi. Since Tihama II and IV were both focused on Wadi Rima, reference to the Wadi Rima Project will be reference to a composite of both lending operations. Tihama I will refer to Wadi Zabid, while Tihamas III and V will refer to Wadis Mawr and Siham respectively. 11 While this audit is concerned with the Wadi Rima project, it will be analyzed in the context of all of the Tihama projects in order to capture the important interrelations and to give a reasonable time frame to what is an ambitious and complex undertaking. Also, a great deal of new analysis and data collection has been done incidental to the preparation and implementation of the Tihama series. It is the Audit's intention to integrate and summarize some of this work at the outset to set the stage for what follows. This background is essential to understand the PPAR and will be referred to frequently in the course of the report.
2. The audit memorandum (PPAM) for these two projects is lengthier than normal for several reasons. First, the combined project was extremely complex in terms of the discrete and heterogeneous components and their related technical aspects. Second, the Audit finds the PCR and PPAM of the earlier Wadi Zabid project in 1981 to be both inadequate and misleading and some space had to be devoted to rectifying this matter as the Wadi Zabid audit was frequently a major justification for replication of similar technical
11 The Staff Appraisal Reports for the five Tihama lending operations are as follows: Tihama Development Project I, March 27, 1973; Tihama Development Project II (Wadi Rima), April 19, 1978; Tihama Development Project III (Wadi Mawr), February 14, 1979; Tihama Development Project IV (Wadi Rima II), December 13, 1979; and Tihama V Regional Agricultural Development Project, February 25, 1986. 2 solutions in other wadis. Third, the various PCRs and the multiple economic analyses prepared after completion of the Wadi Rima project are internally inconsistent. Space had to be allocated for sorting out the essential facts and analyses from this material. Finally, the Audit concludes that the investment in the surface irrigation infrastructure of the Wadi Zabid and the Wadi Rima projects, and by association the similar investments in other vadis, was of doubtful merit in light of the facts available.
II. The Development of the Tihama
3. The Tihama is the coastal plain between the Red Sea and the escarpment leading to the central highlands of the YAR. It is about 400 km long in a roughly north-south direction and 50 km wide. It is a hot, semi-desert area that could support little agriculture were it not for the seven major water courses or wadis that discharge the runoff from the nearby mountains. This runoff comeo from the brief periods of intense orographic rainfall in the high mountain catchment areas of the wadis. The unique and important nature of this runoff is its variability in terms of volume, duration, and timing of onset. Most of the time the wadis are dry or nearly so. Perhaps half a dozen times a year the wadi will be flowing full for a period of a few hours. Interspersed around these major flows or spates are lesser surges, and underlying all of these is the so called base flow that can be counted on at the foot of the mountains, even in the dry season. Using Wadi Rima as an example, the base flow in the dry season from October to March fluctuates between 0.25 and 1.00 cubic meters per see. A major flood in 1976 had an estimated peak flow volume of about 1000 cubic meters per second, but this is an extremely unusual occurrence. Only 5% of the annual discharge is accounted for by flows with peaks in excess of 100 cubic meters per second. These numbers are important to keep in mind because they have exerted an enormous influence over engineers' attempts at designing control structures for the use of spate water in irrigation. The other fact to bear in mind is that rarely does any of this surface water ever reach the sea. Most of that which is not lost through evapo-transpiration passes into the underlying aquifer and becomes available groundwater.
4. In the Tihama, development is synonymous with agricultural development and agricultural development has been made synonymous with control over water./2 For centuries crude, but surprisingly efficient, attempts have been made to utilize the wadi spate flows to irrigate the gently sloping Tihama and much of the economic and social structure of the Tihama (population of about 1.5 million out of a total country population of 7.6 million) is derived from
/2 In fact, control over water is only one of several constraints to agriculture production. Even wich the primitive water control methods available in the past, enormous increases in production are theoretically possible with the use of modern agriculture methods and inputs. 3 land ownership and rights to surface water./I Four major forces have been impinging on the traditional social and economic structure since IDA began to take an interest in the Tihama region. These are: (i) chan-es in the form of national government, (ii) employment opportunities abroad for the agriculture labor force, (iii) the development of large domestic urban markets for food, and (iv) irrigation technology.
5. The YAR emerged from a long period of isolation and economic stagnation beginning in 1962 with the overthrow of Imam rule and the establishment of republican form of government. This was followed by several years of civil war. By the early 1970's the institutional foundations of a modern state had been established. From the point of view of the Tihama, this meant the interest of a progressive central government in Tihama affairs and an increasingly integrated national market for foodstuffs.
6 The Arabic speaking oil-rich states provided a unique opportunity for the rural labor force to break away from traditional ties with the land and the owners of the land. As much as 20 to 30 % of the male population, especially those without access to land and/or water, had migrated abroad and were sending home substantial remittances.
7. The very large remittance income for the entire population had made it possible for national mi3ration to urban areas and the financing of food imports. This development meant there was a very large import substitution potential for agricultural products, especially perishable fruits and vegetables.
8. The development of low cost gasoline-powered irrigation pumps then revolutionized irrigation technology. Since about 50% of the Tihama is underlain with an aquifer yielding water adequate for irrigation, the 84% of the Tihama population not having access to traditional wadi-irrigated land now had potential access to water through pump irrigation. Furthermore, the dependability and control of groundwater made it possible to grow water sensitive crops that were impossible with the erratic flood irrigation from the surface spates. The remittance income and the high domestic prices and potential profits for perishable foodstuffs led to the rapid installation of pumps since the 1960's. This has created a new type of agricultural entrepreneur, not tied to the ancient surface irrigation technology.
9. The above factors led to a very special situation in the Tihama in the early 1970's a labor-short, capital-surplus situation with easy market access for high priced agricultural products and low cost new technologies for obtaining and controlling water. In addition, the emergence of a progressive central government and a substantial amount of very lew cost foreign aid brought large amounts of low cost public capital to invest in the development
/3 Roughly 11 percent of the land area of the Tihama is irrigated with surface water and this land has supported about 18 percent of the regional population. (Para 54, PPAM) 4 process./A IDA stepped into this situation in 1970 and by 1973 the Wadi Zabid Development Project was on the books. This was followed in 1978-79 by three more credits for Wadis Rima and Mawr. Finally, in 1986 the Wadi Siham project was initiated. Approximately $237 million in current terms was invested in the five-project effort of which IDA contributed $62 million or 26 percent. Cofinancing of about $96 million was obtained on very favorable terms for 41 percent of the total cost and the government contributed $ 79 million for a 33 percsnt share.
III. The Wadi Zabid Experience
10. The first attempt at subregional development was made with the Wadi Zabid project and the experience with this first project is instructive since there were no preconceived notions or models to influence project design. In 1970 an IDA agriculture projects identification and preparation mission visited the Wadi Zabid and had this to say about water development:
"The mission questions the feasibility of regulating in any manner, either by storage or permanent diversion weirs, the erratic streams. The mission is of the opinion that the streams should be permitted to naturally recharge the groundwater reservoir and that irrigation be provided solely by groundwater pumping." /I
To the Audit's knowledge this was the first statement in the files that recognized explicitly the relation between surface water and ground water and the fact that surface water could be transformed into ground water and back to surface water through the underlying aquifer. The mission did not develop the profound institutional and social implications of this technological fact. It simply recognized its existence, considered the engineering and economic problems of controlling spate flows, the relative ease of groundwater extraction, and recommended the support of the already developing trend towards privately-financed pump irrigation.
11. It was not long, however, before the implications of this early recommendation began to emerge. The Hungarian firm TESCO was doing the initial studies for Wadi Zabid and was recommending the inclusion of ten "cheap but permanentu diversion weirs in the Wadi to replace the temporary traditional structures built by the groups with access to the wadi water. The idea was to make the traditional system work better without disturbing the existing distribution system and the associated water rights. The TESCO terms of reference had dealt primarily with surface water development and the injection of consideration of ground water by IDA into the discussion led to the need for more studies.
/4 The per capita levels of concessional aid for the YAR during the period 1976-81 were about six times that of low-income Asia and twice that of low-income Africa.
/5 Back-to-Office and Full Report, November 9, 1970. 5
12. In early 1971 a groundwater development project was proposed for Wadi Zabid in conjunction with the surface water development./6 A synthesis of the two concepts followed and by mid 1971 a modest $6.3 million project had evolved calling for: (i) six to ten permanent diversion weirs - about $1.5 million, (ii) groundwater development - about $3.0 million, (iii) access roads - about $0.5 million, and (iv) technical assistance and studies - about $1.3 million. At this stage the guiding principles emerging were: (i) something had to be done to Liprove wadi spate irrigation, (ii) cheap but permanent diversion structures in the wadi were possible, and (iii) conjunctive development of surface and groundwater, with the emphasis on groundwater was possible.
13. Two subsequent developments changed the evolving project design dramatically. One was the desire of local officials to have a conventional dam and surface storage scheme to serve the wadi irrigation users./Z The other was the opinion of an FAO mission in late 1971 that the rapid increase of private-owned tube wells was leading to a situation where the sustained yield of the aquifer was being approached and there was no longer any justification for public support of pumped irrigation in Wadi Zabid. The guiding principles were now evolving further: (i) something fairly dramatic, in an engineering sense, had to be done to improve surface water irrigation, (ii) cheap but permanent diversion weirs were still possible, and (iii) groundwater development was pretty much taking care of itself. The most important casualty of this development was the loss of the concept of the essential interrelatedness of ground and surface water development in the design of the project.
14. The project approved by the Board in 1972 had a total cost of $17.5 million of which about $10.2 million was for civil works and equipment, $4.5 million for engineering and administration, and $2.7 million for agricultural credit. Provision was made for the beginning of a research and extension service and a small groundwater development component was retained, but not in the Wadi Zabid subregion. Fifty four wells were to be drilled -n the Wadi Mawr subregion because it was urgent that something be done in that area and there was no time to engineer the structures required for surface water development there. In late 1975, two years into project implementation, the project was reappraised and the revised cost was raised from the original estimate of $17.5 millions to %40.8 millions. The cost of civil works and equipment was now $29.7 millions; engineering and administration increased to $8.0 million, and the ag credit component increased to $3.1 million. IDA approved a supplementary credit of $10.3 millions, raising its stake in the project from $9.9 million to $21.2 million. The Kuwait Fund, as a major
/6 A Request from the Government of the YAR to the UNDP for a Project, Groundwater Development in the Wadi Zabid Delta, March 9, 1971.
1 The idea of surface storage was finally suppressed by the unanimous opinions of all engineers who considered it on the grounds that the very large silt loads of the spates would quickly fill up any reservoir capacity. Unfortunately, the concept of an aquifer storage as set forth in the 1970 Back-to-Office and Full Report was never picked up again. 6 cofinancier, raised its stake to $15.3 million. The Government put $2.7 million into this first project. It took about six years to complete the project. The total cost of the surface water irrigation component in 1978 prices was eventually estimated to be $49.7 million./8
15. In 1981, a PCR and an OED PPAM was produced./2 The PCR prepared by the regional staff was based on a lengthy document prepared by the foreign consulting firm that had designed the narface irrigation scheme./10 The initial consultant PCR showed an ERR for the entire investment to be 30 percent in spite of the large increase in costs for the surface irrigation component. This was based on a 67 percent increase in agricultural production in 1980 over without-project levels, because of the existence of the project. It further posited annual compound increase through 1987 of 9 percent./11 The consultant PCR admitted that this high return was based largely on domestic farm prices that were roughly three times economic or border prices and that the use of economic prices " ... would show a theoretical negative rate of return." Bank staff directed the consultant to recalculate the ERR using economic prices for farm output. A supplement to the completion report was then prepared./12 The revised ERR declined only to 22 percent. This was achieved by excluding sorghum stalks and vegetable production from economic pricing on the grounds they were only traded locally. Priced domestically, these two items accounted for approximately two-thirds of the benefit stream which explains why the ERR remained healthy.
16. The PCR claimed that 17,000 ha was being served by the Wadi Zabid project or about 23,000 cropped ha. All of the large yield assumptions were applied to this area over the life of the project. Missing from all this was an estimate of just how much was really being served by spate irrigation alone. Recent work by Dutch consultants, based on aerial photography, indicates that in the entire Tihama only about 40,000 ha is under spate irrigation./13 Based on proportionate shares of water volumes in the Tihama wadis, Wadi Zabid would be serving no more than 12,000 ha today. In summary, completely unrealistic assumptions about areas served, yield increases, output prices and basic causality were allowed to stand unquestioned after completion of the Wadi Zabid project. The story of how a $2 million proposed investment in surface irrigation grew to something like $50 million in nine years and
/8 SAR Tihama IV, Annex 5 Table 2, p 64.
/9 PPAR Tihama Development Project I, June 26, 1981.
/10 Tihama Development Project I Completion Report, Tihama Development Authority, July 1980.
/11 PCR TDA, July 1980, Tables 20 and 21, pp 57 and 58.
/12 Tihama Development Project I Supplement to Completion Report, TDA, November 1980.
/13 Tihama Basin Water Resources Study, Main Report, Draft Final, DHV Consulting Engineers, November 1987. Table 7, p 35. 7 remained economically viable was not told in the PCR or the Audit. The five page PPAM was prepared by a single OED staff member with no background in agriculture, engineering, or economics. Had a thorough audit been prepared in 1981 there is little question that the surface irrigation component would not have been deemed "successful" as it subsequently was. Later it was described as being "very successful" and the uncritical audit report was used as proof that the project concept was sound and worthy of emulation. However, given the rapidity of follow-on project preparation, even a critical audit would not have appeared in time to influence project designs for Tihama II, III, and IV.
17. The Audit has taken some pains to trace the early evolution of the first Tihama development project because it provides a rich context in which the Wadi Rima project, which followed, can be understood.
IV. Proiect Evolution, Definition, and Design
18. The Wadi Rima project benefitted from a much more thorough background analysis than that associated with the Wadi Zabid project. This was because the study of Wadi Rima became a part of the British Technical Assistance program in 1972. By 1974 most of the mapping and surveys had been completed. In 1976, the initial report from the Overseas Development Ministry (ODM) was available.1,4 This document proposed the following: (i) improvement of village drinking water supplies - $1.4 million, (ii) agricultural research and demonstration to deal with dry land as well as irrigated agriculture - no amount specified, (iii) Tihama tree crops research unit - $0.5 million, and (iv) sand dune stabilization - $1.4 million. On the question of irrigation improvements the ODM report was not hopeful. They pointed out that the traditional water allocation rules for Wadi Rima were even worse than those for Wadi Zabid. At least in Wadi Zabid downstream users got access to the spates at predefined periods in the year. For Wadi Rima the rule was that upstream users had a right to all they could divert. The 0DM report set forth the benefit of the primitive, temporary diversion structures in use in the wadi:
"The present temporary structures, because they break periodically, do at least ensure that upstream users cannot take all of the available water."
The point is made that virtually all the water gets used somewhere in the Tihama and that the main benefit of permanent structures is to reallocate existing water so it can be used more efficiently and so more users get a fair
/14 The Montane Plains and Wadi Rima Project - A Land and Water Resource Survey, Initial Development Prospects for Wadi Rima, Land Resources Division of the Ministry of Overseas Development, England, 1976. 8 share. It notes the weakness of government institutions and the difficulty of imposing change and concludes: "Unless institutional controls and change are possible, it could be concluded that it is best not to introduce structural changes at this time but to concentrate initially on improvements in crop husbandry through research and extension, leaving structural Improvements until s.ch time as institutional change is possible."
Little is said about pump irrigation except that in four years the area under pump irrigation had doubled.
19. The initial ODM report was followed by an FAQ identification report. /15 The FA0 report praised the thoroughness of the ODM effort. They had much more to say on the surface and ground water irrigation effort, pointing out the "spectacular" change iniolving the installation of diesel pumps in hand- dug wells throughout the country and the need to put the priority on groundwater development. They noted that the financial attractiveness of wells was such that there was no need for public sector promotion. They accepted the interrelation of ground and surface water use, pointing out that almost all water entering the Tihama was currently used for agriculture and that improvements in use were the big payoffs. On the question of surface water development they were unambiguous:
*Whatever approach may be taken to improving surface water utiliation, the economc viability is likely to be marginal in most cases, and hence particular attention mast be directed to exploring opportunities for designing and installing low cost structures."
20. On the question of uncertainty in economic analysis it had this to says
"Because of the lack of long-term recordag particularly of stream flows, silt loads, rainfall, and areas irrigated in different years; it is not possible to estimate with any precision the impact (in terms of either increased yields or increases in area receiving irrigation) of introducing any change or set of changes in the established spate irrigation system.
21. The report goes on to state that benefits from diversion structures are "speculative" but if the benefit stream is assumed at no more than 10 to 15 percent of the gross value of production then they can be considered. Transferred into investment terms, a 10 percent increase in production from 10,000 ha of sorghum would justify an investment of no more than $2.1 million.
/15 Report of the Irrigation Projects Identification Mission - YAR, FA0 Investment Center, Rome, 1976. 2 vols. 9
22. The issue of water rights and the inability of the Government to intervene is highlighted and finally the experience with Wadi Zabid is cited:
'It was intended that development of Wadi Zabid should provide a model replicable in other Tihama vadis, including Wadi Rima. Since appraisal, however, various design changes have been introduced. The result is that massive reinforced concrete weirs end canal headworks are being constructed at the sites at which it was originally intended that simple masonry weirs should be built. While this modification may improve the ability of the works to withstand maximum flooda, it has also marks ily increased the capital costs. While the World Bank has found it 1ossible to justify the increased costs in the case of Wadi Zabid (and approve a supplementary IDA credit), the replicability, in other wadis, of the engineering approach adopted there must be seriously questioned."
At this point the FA0 mission then raises the possibility of semi permanent low cost structures Luch as gabion weirs that replicate farmer-constructed barrages that include breaching sections to be repaired with river-bed materials following each major flood. They recognized explicitly that permanent, low-cost structures in the wadi were a contradiction in terms./16
23. The real thrust of the FAO report for the Tihama was to support a Tihama- wide research and extension project that included not only the relatively small amount of irrigated land, but the much larger rain-fed area as well.117 It noted the quick success and impact of the modest isearch and extension effort associated with the Wadi Zabid project (well before the surface irrigation works were completed) and recommended a $14.9 million program.
24. In 1977 the main ODM recommendations for Wadi Rima were put forth in their complete and comprehensive form.18 That report covers the historical, legal, social, economic and technical dimensions of the development of the wadi. The Audit is satisfied that a thorough effort was made with the data available and that the findings were presented in time to be considered during subsequent project preparation.
/16 This arises from the nature of the spate flows as set forth in para 3. Although the actual offtake from the Wadi Rima weir was designed to divert only 15 m3lsee and 89 percent of the average total annual flow, the structure and spillway had to be designed to take the enormous stresses imposed by floods with peaks as high as 1000 m3/see if it oere to be deemed "permanent".
117 See Annex 4 of vol 11 of the '976 FAO Report.
118 An Investment and Development Plan for Wadi Rima, and, Irrigation and Agricultural Development in Wadi Rima. Volume II, Ministry of Overseas Development, Land Resources Division, England, 1977. 10
25. In its final recommendation the ODM listed the following investments for Wadi Rima:
$ Millions
Agricultural Extension 1.7 Rural Roads 3.6 Village Water Supplies 1.5 Groundwater Resources Evaluation 0.5 State-Owned Pump Irrigation 1.7 Sand Dune Stabilization 1.4 Reorganization and Development of State Farm 1.1 Wadi Irrigation 8.8 Total 20.3
By this time the ODM group had accepted the fact that major investments would have to be made in surfaca water irrigation. However, they explicitly stated that, even with the possible use of relatively low cost gabion structures, such a level of investment in wadi irrigation was not likely to be economically justified. They also pointed out the inequities of improving wadi diversion upstream and depriving down stream users of the water. The development of state-owned pump irrigation facilities was designed to rectify this inequity and to get the Government directly into the groundwater extraction business which, the report asserted, was more in need of control than investment. Finally, the addition of a large rural roads component and a village water supply component offset the narrow impact of the surface irrigation investment on a small, and relatively affluent, proportion of the Wadi Rima farm population. The roads and the water supply were more democratic components in that virtually the entire population of the wadi would have access to the benefits they generated.
26. The major Bank reaction to the ODM proposal was along the same lines of the earlier reaction to the Wadi Zabid proposal: (i) permanent reinforced concrete structures are needed in the wadi, not the doubtful gabion designs put forth by the ODM to keep investment costs down, and (ii) government investment in groundwater development doesn't make sense since privately financed extraction rates are already probably excessive in terms of aquifer recharge. The 0DM team took exception with this response and a great deal of time was expended arguing the merits of gabion structures and their performance under flood conditions./19 In their desire to get the project going, both the Government and the Bank agreed to delete the irrigation
/19 The doubtful gabion designs were eventually tested under actual wadi flood conditions and did not meet the test of being "permanent" structures. This outcome was subsequently used to justify the "permanent" reinforced concrete designs that were eventually adopted. In fact, the outcome would seem to justify the earlier FAO contention that permanent low-cost structures were not feasible. See: Performance of Wadi Rima Gabion Structures May to August 1980, Document No. 156.965(I), 28 January 1981. 11 component at this stage and push ahead wit" the non controversial components. This was how the Wadi Rima Project was divided into the Tihama II and Tihama IV lending operations.120
27. With irrigation relegated to a follow-on project, the emphasis shifted to the build up and support of the Tihama Development Authority, the expansion of agricultural research and extension, and the provision of village water supplies and roads for the Wadi Rima area. All of this required a very large technical assistance effort since there was virtually no local expertise on which the expansion of TDA could be based. After appraisal, Tihama II had evolved in-o the following:
jmillion
Project Management 2.5 Agricultural Services 4.4 Agricultural Credit 2.7 Access Roads 4.1 Village Water Supply 2.0 Groundwater Monitoring and Gabion Tests 0.5 TDA Headquarters Camp 3.5 Institutional Support Ministry of Agriculture 4.5 Agricultural Research Ministry of Agriculture 7.4 Base Cost 31.6 Contingencies 8.1 Total Cost 39.7
Only the first six items were strictly applicable to the development of the Wadi Rima subregion and they amount to $16.2 million or 51 percent of the base cost. The other 49 percent vas either regionwide (TDA Headquarters Camp) or nationwide (Ministry of Agriculture). Under the circumstances 1!. is not entirely appropriate to speak of Tihama II as being the Wadi Rima Project. The addition of the last three items doubled the project size, added two more levels of government to the institutional complexity of the project, and injected an enormous expatriate technical assistance component into the lending operation. Approximately $4.2 million, or 25 percent, of the Wadi Rima base cost was estimated to be expatriate technical assistance. Of the $11.9 million of support for the Ministry of agriculture, about $10.1 million or 85 percent was to be foreign technical assistant. This brought the foreign TA tor the entire project to $14.3 million or about 45 percent of the base cost of the total project. This expansion and shift of focus was to have major implications for project implementation.121
28. By 1979, Tihama I was nearly complete, Tihame II was just getting started, Tihama III (Wadi Mawr) was just being approved, and Tihama IV was under advanced preparation. All of this activity was putting a strain on a
120 The intervening Tihama III Project was for the development of Wadi Mawr.
121 About $6.2 million of IDA's contribution of $10.5 million was allocated for foreign technical assistance. 12
TDA that was five years old and was largely staffed by a fluctuating group of independently recruited expatriates. Tihama IV was to have been the surface irrigation component that was deleted at appraisal from Tihama II. By late 1977, the positions of the ODM team and the Bank staff were clear. The Bank wanted a "...functionally adequate, structurally sound and economically viable..." system for the wadi./22 The ODM line was consistent: "...the idea of building permanent structures economically is illusory."/23 The solution was to delay this component and use the bilateral assistance program of the Dutch Government to undertake revised feasibility studies of alternative permanent strqctures.
29. In January 1979, the draft report of the Dutch-financed consultants (DHV) was available./24 Of most interest to the Bank was the technical solution proposed by the DHV. Rather than a series of diversion weira to replace the traditional structures serving the various sheikdoms on the wadi, as was the case with the Wadi Zabid approach and the ODM approach in Wadi 4% Rima, it was proposed that a single upstream weir be constructed and that two main canals on each side of the wadi bank serve the various groups downstream with canal offtakes instead of wadi offtakes. Another engineering refinement was to slope the weir crest towards one bank and a singhs diversion structure to avoid the problem of the Wadi Zabid design where siltati..n and "braiding" sometimes led to water bypassing the offtakes and passing over the weir without being diverted. Once the flow was in the main diversioa canal it could be bifurcated and a portion of the flow passed under the wadi bed in an inverted syphon to serve the other bank. It was the logical scolution once the concept of "simple low cost masonry weirs" was abandoned and the concept of the permanent costly reinforced concrete diversion structure was accepted./25 The downstream users in Wadi Rima were justifiably nervous at having a single upstream diversion structure, given the long-held water rights policy in Wadi Rima that the upstream user gets all he can divert. Still, the technical solution was elegant and less costly than the multiple weir approach.
30. The associated economic analysis had other problems./26 The ODM contention that permanent structures of any kind (even well-engineered ones that assumed away the water distribution problem) could not be justified remained to be dealt with. The DHV analysts were not asked to consider the interrelation of surface and groundwater. Hence, the groundwater alternative
/22 :ssucs Paper, Wadi Rima Project, November 21, 1977.
123 Letter 0DM to Bank, 10 November 1977.
/24 Wadi Rima Irrigation Development Feasibility Study, 2 volumes. DHV Consulting Engineers, January 1979.
/25 Even TESCO had been driven in this direction with the Wadi Zabid design. There, sixteen low-cost structures became ten and, finally, five very costly ones were built.
/26 Wadi Rima Irrigation Development Feasibility Study, Volume 2, DHV Consulting Engineers, January 1979. Annex E, pp 107-138. 13 was not considered vis a via surface irrigation and, more importantly, surface water not diverted to fields by the diversion weir was assumed to be lost to agricultural production. Conversely, all surface water not allowed to percolate into the aquifer was saved for productive agricultural use. The failure of the Bank to include the groundwater altcrnative in the terms of reference and the subsequent failure of the consultant to insist on considering the alternative remains the major flaw in the thinking associated with the project.
31. A number of adjustments were made to the basic ODM assumptions concerning the efficiency of the existing system and the system proposed. This adjustment effectively doubled the amount of "additional" spate water getting to the fields. The assumed existence of an efficient distribution regime then led to a proportional increase in irrigated acreage. The Bank appraisal mission then adjusted the ODM estimates of existing system crop yields down by about 25%. The DHV analysis then assumed yield increases of from 10 to 20 percent, about double the ODM assumptions, without changes in the cropping pattern. This yielded an ERR of 13 percent on an investment of $11 million. The DHV analysts considered the economic case for investing in a secondary distribution system, which the ODM team insisted was essential if the efficiencies of permanent structures were to be utilized. The additional investment could not be justified and its inclusion would have rendered the entire project marginal or submarginal even with the favorable assumptions utilized.
32. The Audit notes that, whatever the justification for the assumptions made in the DHV report, the report itself is clearly written and the assumptions explicitly stated. There is no record in the file, or in any other document available to the Audit, which indicates that any of these assumptions were examined critically. There appears to have been a general lack of discussion of economic feasibility issues by Bank staff through appraisal, whereas extensive attention was given to the engineering issues.
33. Tihama IV was presented to the Board in late 1979, less than two years after Tihama II.
Item $ million
rroject Management 1.7 Water Resources Stu4y 0.4 Surface Irrigation Works 9.9 Staff Housing 0.5 Sand Dune Stabilization 1.6 Maintenance Equipment 0.8 Base Cost 14.9 Contingencies 5.9 Total Cost 20.8
About $14.2 million or 68 percent of the total cost was to be for irrigation infrastructure as opposed to the $11 million considered in the DHV economic analysis. This increase was because of the inclusion in the project of improvements to the secondary distribution system, something the DHV analysis 14 had found to be uneconomic but the ODM analysis had asserted was essential to making the diversion scheme work.
34. Support of TDA continued with staff housing, maintenance equipment and project management. The water resources study was particularly interesting in that it promoted the development of an integrated systems view of surface and groundwater. In the meantime, major investments were being made which ignored the essential interrelation of the two competing uses of scnrce water resources. The results of this study were not formally made available until late 1987, by which time most of the decisions concerning surface irrigation improvements had been made.
35. A number of troublesome issues did develop in the course of the preparation of Tihama IV and these were set forth in the Issues-Decision papers in March of 1979. These were: (Q) How was scarce surface water to be distributed - according to agro-economic erfteria, equity criteria, or according to custom? (A) Study the issue and recommend a system; (Q) How was cost recovery from the favored group of irrigation beneficiaries to be effected? (A) This was to await the findings of study of this issue being undertaken under Tihama III; and (Q) How was the chronic shortage of Yemeni professional staff to be dealt with? (A) Expatriates would have to be recruited.
36. Under Tihama II, another difficult issue was addressed. It concerned the share cropping arrangements in the Tihama and how they did not provide an incentive for share croppers to take up the technical packages offered by the extension service, in particular, any techniques requiring additional farmer inputs. This too was to be dealt with by first studying the problem. The Audit is impressed by the generally good understanding of the institutional and policy problems that faced development efforts in the Tihama and the forthright manner in which they were defined in the appraisal reports.
V. Proiect Implementation
37. The Wadi Rima project was enormously complicated as only a comprehensive rural development project can be. The accounting problems associated with project implementation placed a very large burden on a TDA administration that was largely sttffed by expatriates. Even a cursory look at the project file indicates the very large effort that went into procurement of the multiple subcomponents and recruitment and retention of expatriate staff. In December 1985, the complexity of the project was faithfully reflected in a 245 page project completion report./27 This report has been criticized as being unduly optimistic and less than comprehensive, and the economic analysis has come under particular criticism. While the Audit concurs that the economic analysis was flawed, it is not difficult to identify the flaws and make adjustments. The report reflects the multiple authorship and some sections are over optimistic to the point of being self serving. However, nothing else
/27 Tihama Development Project II and IV, Completion Report, Tihama Development Authority, Hodeida, YAR, December 1985. 15 written comes as close to telling a comprehensive story and the Audit is favorably impressed with much of the narrative concerning project implementation.
38. Regional staff made an attempt at providing an overview of the project over a year later./28 This document is included in the PPAR as the PCR rather than the 1985 TDA document. Its necessarily briefer treatment of project implementation is adequate and the Audit will not attempt to paraphrase its findings. A number of points will, however, be highlighted.
39. About $ 60 million was disbursed for the joint Tihama II and IV cperations over the period 1979-86. It was financed as follows: (i) Government - $21 million, (ii) Kuwait Fund - $20 million, (iii) IDA - $16 million, and (iv) UNDP, EEC, Netherlands Govt. - $3 milliov.
40. Tihamas II and IV were completed at about the same time and there was no evidence of any expenditures that were out of line with expectations, as had been the case with the Tihama I pro4ect. The time overrun of Tihama II is understandable, given the complexity of the project. The Audit concurs that the Wadi Rima project was completed within a reasonable time period and within the costs expected. For the type of project undertaken, this in itself is a major achievement.
41. For the major civil works undertaken; surface irrigation, roads, village water supplies, and TDA headquarters, the Audit is satisfied that the physical implementation was satisfactory and that these facilities are functioning. The very long period between bid opening and contract award for three of the above civil works items (roads - 19 months, TDA headquarters - 16 months, and village water supplies - 7 months) indicates serious problems within the government procurement system. Again, given the organizational problems of an expanding TDA, the experience with civil works was better than might be expected.
42. Of the eight or so special studies that were carried out under the project, all were completed with the exception of the second phase of the share cropping study. The latter was to address one of the most sensitive subjects ie, what share cropping arrangements would be most conducive to providing incentives fo: farmers to invest in the improved technical packages promoted by the extension service. The phase one study was deemed inadequate in September 1980. The internal Bank memo on this subject was clearly the best result of this effort/29* and there is no record of the second phase study ever being completed or reviewed. A special covenant (Section 4.04 of the DCA) was designed to promote action on the share cropping issue beyond the study stage but this has not happened. A similar covenant (Section 4.03 of the DCA) was designed to insure cost recovery of the surface water irrigation investment from the beneficiaries. Here the Government actually authorized
128 Project Completion Report, YAR, Tihama II and Tihama IV, Regional Projects Department, Europe, Middle East and North Africa, March 26, 1987.
129 Memo - Study of Crop Sharing and Land Tenancy Practices, 3 September 1980. 16 the collection of a 2% surcharge on gross agricultural production in the irrigated areas. There is no record of such a tax ever being collected since the completion of the irrigation component in 1984 and the consensus of informed observers is that surface water irrigation is free. Thus, the results of attempts to influence important policy issues are not obvious at this stage. Given the political implications of changes and similar experiences with the same issues in other countries, the results are not unusual.
43. Assessing the implementation of the research and extension component is particularly difficult. Most of the research took place outside the Wadi Rima area and the major technical packages offered by extension agents came from the research results obtained under the earlier Wadi Zabid project. The Audit's impression during the field visit is that the demand for extension services comes largely from the highly profitable irrigated fruit and vegetable sector and that the much larger rainfed area is being neglected. The PCR (para 20) is more specific and asserts that the research effort has failed to develop a technical package for the spate irrigated areas which are mostly planted in sorghum, and that extension effort is concentrated on the fruit and vegetable sector. The volume of follow-up lending in the areas of research (Credit 1259-YAR) and extension (Credit 1667-YAR) indicates that much remains to be done. The national research and extension components of Tihama II should be assissed at the time the above credits are audited.
44. Broadly speaking, project implementation has been satisfactory. This is a very large accomplishment in the face of serious institutional deficiencies, complicated procurement issues, and a continuous background of problems of expatriate recruitment and salary payments.
VI. Project Economics
45. The economic analyses of all the Tihama wadi development projects has involved the use of farm models and assumptions about how cultivated areas, cropping patterns and yields will evolve over time because of the package of itivestments put into place under the project. The net increases in agricultural production are then related to the project investment costs in an economic measure of effectiveness. Given the impossibility of predicting any one of the above variables with precision, the possibility of predicting several, simultaneously, is daunting.130 The use of digital computers has made it possible to compute rapidly the results of a particular package of assumptions. This is clear from examining the many attempts at economic analysis, both pre and post project implementation.
46. The problem of causality then enters the picture. The best example uf the causality problem for the Wadi Rima project is the exogenous effect of financial prices on production with and without the project. The Government's ban on the Import of fruits in 1983 had an immediate impact on the domestic
/30 See, for instance, the quote of the FAO mission in para 20. 17 price for these commodities. Thus, in 1985 the price index on a 1980 = 100 basis for major Tihama commodities was as followas131 Sorghum 350 Millet 417 Cotton 214 Maize 280 Sesame 312 Vegetables 325 Melons 600 Tobacco 144 Papayas 650 Bananas 233
With the general price index over the same period increasing by only 63 percent, the financial incentive for production and shifts in cropping patterns was very large and substantial production increases and shifts have taken place. The problem for project analysts is how much, if any, of these increases and shifts are causally related to the investments made in the project.
47. Another exogenous factor is that of weather. The 1976 Wadi Rima feasibility report estimated average annual wadi flow to be 80 Mm3. Since then, actual measurements have continued and this figure has been revised down to 70Mm3./12 Operation of the Wadi Rima scheme began in 1984-85. In 1985, the average wadi flow was 59.3 Mm3. In 1986 it was a disastrous 36.8 Mm3. With 13 percent less water on the average, the 1976 DHV economic analysis would have produced some different results. This point aside, the "after project" areas, yields, and cropping patterns are greatly influenced by both domestic prices and rainfall. Isolating the effect of the project investments from these macro influences is extremely difficult and very 3ubject to error.
48. Three very different approaches were made to the original economic justification of the Wadi Rima project. The 1977 ODM report called for very modest investments until the institutional environment could justify something larger. Even then, so called "permanent" structures in the wadi coulk not be justified. The 1979 DHV study was able to marginally justify the "permanent" structure approach with some good engineering design combined with very opti4mistic assumptions about efficiencies and rational operating regimes and the absence of the ground water alternative. The subsequent 13 percent decline in available water and the much less than optimal distribution regime that eventually transpired would push a revised DHV analysis into the submarginal. In the 1978 SAR for Tihama II, no irrigation improvements were included. However, the project was easily justified by assuming large increases in yields for all irrigated lands, spate and well, because of the investment in rural roads and extension services. In addition, a new element
/31 PCR Tihama II and IV, TDA, December 1985, pp 33 and 56.
/32 Tihama Basin Water Resources Study, Draft Final Report, November 1987, DHV Consulting Engineers, Annex 6. 18 of cropping pattern changes was predicted which involved a major shift out of coarse grains into fruits and vegetables, but only in the well-irrigated lands133 In the 1979 SAR for Tihama IV, the dramatic shifts out of coarse grains and into fruit and vegetables was predicted for the spate-irrigated areas also and the investment was easily justified./34 The sensitivity of the assumptions concerning the shift to fruit and vegetable production is reflected in the sensitivity analysis in which the failure to shift cropping patterns leads to a negative return on the spate irrigation investment.
49. Subsequent to project completion, three separate attempts were made to prepare revised economic analyses for the PCR. The December 1985 attempt by TDA included the actual 1985 figures on after-project areas and cropping patterns and these showed a very large shift from spate-irrigated area to well-irrigated. Where the SAR had shown 8000 ha under spate irrigation this had declined to 5600 ha by 1985. Conversel*y, the well-irrigated area had increased from 4000 ha to 6400. Equally important, the shift out of coarse grains and into fruits and vegetables had taken place in the well-irrigated areas, but had not happened (except for some banana production) in the spate irrigated areas two years after the completion of the surface irrigation infrastructure./35 Less than average rainfall and spate runoff was given as the explanation for this pattern. 136 These developments were very much contrary to what the SAR had predicted but the implications were avoided by assuming that the cropping intensity of the spate-irrigated areas would increase from the 1985 level of 1.11 to a full development level of 2.17 and that the cropping patterns in spate-irrigated areas would eventually shift to fruit and vegetables. It was also assumed that the cropping intensity of the well-irrigated areas would only rise to a level of 1.05, less than half that of the spate areas. With such assumptions, a 42 percent ERR was calculated for the entire Wadi Rima project. The simple (and unexplained) assumption of a doubling of cropping intensities combined with the shift to high value water intensive cropping pattern generated an embarrassment of benefits for the project, in particular the spate-irrigation investment.
50. Such positive findings in the face of shrinking acreage, cropping intensities and surface water volumes caused some concern, and a second
/33 SAR Tihama II, April 19, 1978, pp 40-48, especially Table 6.1.
!L SAR Tihama IV, December 13, 1979, pp 27-41, especially Table 6.1.
135 PCR Tihama II and IV, TDA, December 1985, Tables A4 and AS, pp 38-39.
/36 The year 1985 was a below-average wadi flow year (59.3M3 compared to an average expected flow of about 70M3) and 1986 was very low (36.8Mm3) and this probably hastened the shift out of spate and into groundwater irrigation. Periodic drought is a statistical fact in the Tihama and the advantage of having an aquifer for storage becomes more apparent. Groundwater irrigation becomes even more reliable than spate irrigation when drought is factored into the equation. 19 economic analysis was called for and carried out./37 This analysis confirmed the general pattern of shrinking spate-irrigated area, the rise of pump irrigation and the importance of the 1983 ban on fruit imports in expanding production independent of the project investment. It also confirmed the shift out of coarse grains and into fruits and vegetables mainly in the well-irrigate areas and not in the spate-irrigated areas. By combining the well and spate Irrigation areas into a single unit with a single stream of benefits, the combined investmencs in Tihama II and IV show a 14 percent ERR. With most of the benefits in fruits and vegetable production coming from the well-irrigated areas, which are now roughly half of the total area cropped, the investments in the spate-irrigated areas presumably have a much lower rate of return, though a separate calculation was not done.
51. There was an attempt to get the FAO to revise the PCR and a mission was fielded. However, the FAO provided only an outline for a PCR and an interesting technical paper on spate irrigation./28 Bank staff were still not satisfied with the revised economic analysis though they were in agreement with the broad pattern of shifts in areas and cropping patterns. Their problem was with the yield assumptions in the original SAR and in the revised economic analysis. Like -he area assumptions, water availability, and cropping intensities of the original justification, they felt the yield assumptions were too optimistic (PCR para 38). The Bank staff PCR then performs a combined Tihama II and IV analysis and produces an ERR of 10-11 percent for the entire Wadi Rima investment. Again, since most of the important shift in cropping patterns, an. resultant benefits, takes place in the well-irrigated areas; the case can be made that the investments in wadi irrigation improvements for the spate areas yields a return much less than the average return for the combined project. If the national and regional investments in research and extension are deleted from Tihama II, the two projects are roughly comparable in size. This would imply an ERR close to 5 percent for the Tihama IV project and about 15 percent for the Tihama II project, using the figures of the regional PCR.
52. The most recent consideration of the economics of spate irrigation investments was made in November 1987 as a part of the water resources study of the Tihama basin. The fully distributed and marginal costs of spate irrigation were compared with those of pump irrigation. The spate irrigation costs were based on the actual costs of construction of the Wadi Rima facilities and the revised flow calculations in the wadi./39 The fully
/37 Tihama Development Proiects II and IV. Wadi Rima Project Completion Report, Economic Analysis, Annex 1, Tihama Development Authority, November 16, 1986.
/38 An Approach to Spate Irrigation and Wadi Development with Particular Reference to the Tihama Plain, Project Completion Report Mission, FAO Rome, February 18, 1986. 139 See Annex 6, "Cost of Irrigation Water" in Technical Paper 6 of the Tihama Basin Water Resources Study, DHV Consulting Engineers, Draft Final, November 1987. 20 distributed cost of pumped water varies between 0.2 YR per m3 at 10 meters pumping depth and 1.2 YR per m3 at 60 meters depth. The fully distributed costs of wadi water varies between 0.6 YR per m3 in Wadi Mawr and 1.5 YR per m3 in Wadi Rasyn. For Wadi Rima the cost is estimated at 1.0 YR per m3. The average pumping depth for the Tihama was about 20 meters which yields a fully distributed pumping cost of about 0.4 YR per m3. Thus, on a fully distributed basis, the Wadi Rima spate water costs about two and a half times as much as pumped water./40 Since the cost of spate water was based on the actual construction costs of completed projects it is clear from the DHV analysis that the use of permanent structures in the wadis to divert spate flows was never an economic proposition. Thus, the statement of the first Bank agriculture project mission to the Tihama in 1970 (para 10) appears, in retrospect, to be correct. The FAO position in 197o (para 19) and the ODM position in 1977 (para 28) also seem to be sustained./41
/40 The marginal cost of spate irrigation, which assumes the investment cost is sunk, is approximately half the cost of pumping. This means that it is worthwhile, in an economic sense, to keep the existing spate facilities operatina until major reconstruction is needed.
/41 The Region has pointed out that the findings of the draft DHV report have not been accepted by the TDA and that TDA has challenged both the assumptions made and the data applied by the consultants that, in the present draft report, support the contention that surface water is more costly than groundwater. Should TDA's contention prove to be correct, the conclusions reported in the November 1987 DHV draft concerning relative costs of water from the two technologies could change significantly. However, the Audit's position does not rest solely on the DHV analysis or the relative costs of water from the two technologies. Rather, it is based on an assessment of the numerous cost and benefit analyses associated with the project and the broader view that groundwater drawn from an aquifer-reservoir is a different, more controlled, more dependable and more efficient source of plant moisture in the Tihama. It has, spontaneously, become the privately-financed technology of choice and actually produces most of the high value fruit &nd vegetables in the Tihama. The erratic surface spate flows are provided at public expense and are used mainly for flood irrigation of low value grain and fodder crops. See the detailed acguments in Attachments I, II, and IV and footnotes 43 and 45 on page 21. 21
VII. Project Sustainability
53. In November of 1987, the long-awaited water resources study of the Tihama Basin was produced.142 The water use and balance figures (MW3) are sobering:
Pump water use 420 Wadi water use 160 Rainfed water use 100 Total water use 680 Total Tihama inflow 380 Total water deficit 300
The dominance and relative efficiency of privately financed and maintained pump irrigation i. the Tihama is now an established fact./43 What is also an established fact is the very large water deficit that exists because of uncontrolled extraction by pump and wadi. With water table levels dropping between 1 and 3 meters per year in the Tihama, it is now clear that the unpleasant issue of groundwater extraction control cannot be avoided much longer.
54. A less dramatic, but equally important, set of facts concerning water use efficiency came out of the same study:144
Water Use Efficiency % Cult. Area % Prod. kz/m3
Pump irrigation 19 56 1.3 Wadi Irrigation 11 18 1.1 Rainfed 69 26 2.5
Pump irrigation accounts for 56 percent dry weight production on 19 percent of the cultivated area. Its water use efficiency, in a physical sense, is substantially above that of the wadi water. Nothing compares to the efficiency of rain water which serves 69 percent of the area and produces 26 percent of the output./45
142 Tihama Basin Water Resources Study, Main Report, Draft Final, DHV Consulting En-ineers, November 1987.
/43 By 1986, about 70,000 ha of the Tihama was irrigated by over 8,000 pumped wells. Only 40,000 ha remained under wadi irrigation, a complete turn around from the early 1970s.
/44 Based on Table 7 page 35 of the Nov 1987 DHV Report.
/45 The Audit believes that a water use efficiency measure that takes into account the value of the dry weight of production would be more appropriate. Presumable the unit dry weijht of high-value pump-irrigated commodities is more valuable than that of wadi and rainfed production. 22
55. The DHV Report uses this information to produce a series of water rationing regimes to eventually reduce the water deficit to a long term sustainable balance./A6 Cutting the wadi irrigation back to a base flow operation and shifting the spate flows to pump irrigation is one of the obvious alternatives. Restricting pump irrigation to one-season operations is another. These are all m-chanistic proposals that ignore the political and social realities. In the Audit9s opinion a far more likely scenario will be the continuance of the laissez faire attitude towards pump operations and the active support of the spate irrigation operations until serious inequities and/or natural disasters such as sea water infiltration or reduced urban water supplies force action./47
56. The most likely scenario will then be continued expansion and deepening of pumping operations as long as high domestic prices for fruit and vegetables make it profitable to mine the aquifer. Pumping costs increase roughly proportional to depth. As the water table continues to decline, the less favorably located and less efficient farmers will gradually be forced back to a rainfed farming regime./48 The water balance may eventually come, but only after the water table has been put out of the financial reach of the inefficient, the poorly capitalized, or the poorly located.
57. In this environment, the Bank's support of agricultural research and extension in the Tihama, especially for rainfed agriculture, is certainly appropriate and will hopefully produce sustainable improvements in farm technology and management. The same can be said for rural roads investments and health related investments such as rural water supplies. The latter, however, will be competing with irrigation uses for water and deepening of the IDA financed wells will certainly be required in the near future if the benefits from the initial investments are to continue to be available.
58. For the surface irrigation components there are two different levels of concern related to the sustainability issue. The first concerns the physical wearing out of the asset. The Wadi Zabid facilities are about nine years old and their performance, even in an engineering sense, leaves much to be
Hence, if physical output is priced, pump irrigation is even more profitable and, therefore, more efficient.
/46 See Table 9, page 45 of the Nov 1987 DHV Report.
/47 The scope of the national water problem has been well known for many years. See, for example, Water Policy Initiatives For Yemen, Recommendations by CID Water Team, Consortium for International Development, Tucson, Arizona, Sept 1980.
/48 The construction of permanent and efficient weirs upstream in the wadis had already led to such shifts when downstream users no leager received any wadi water. Some reverted to a rainfed regime, most shifted to groundwater pumping. The rainfed regime will be the only alternative in any future shifts. 23 desired. In many places on the upstream weirs, the abrasion of the water- bourn sediment on the reinforced concrete has worn the concrete down to the exposed reinforcing bars, requiring costly repairs. For the downstream weirs, there is so little water passing that this has not been a problem. For these weirs the problem has been the blocking of offtakes with silt and the passing of less than flood flows over the spillway. With the wadi as much as 300 merers wide downstream and no free water storage behind the weir, channels form in unexpected places that do not always allow the structure to function as planned. Both of these "lessons" from Jt wadi Zebid experience were incorporated into the Wadi Rima design. The problem of siltation remains for all structures and all wadis and it raises questions about the useful life of "permanent" facilities and their true annual maintenance costs.
59. Assuming that the upstream weirs continue to function, farmers positioned nea. the weirs will have the special benefit of diverted spate water at no charge. Since a major portion of recharge to the aquifer comes from the wadi channels and diverted surface water, these farmers will also have access to some of the lowest rost groundwater. As the water table for those distant from the wadi recharge declines beycad financially feasible depths, those near the weirs and adjacent to the wadi will have exclusive access to financially feasible water. In this sense, thirgs will have reverted to the original days of pre pump technology in which a small group of farmers had access to the surface water. For a period of abour thirty years, this monopoly on water was broken by the new pump technology. That technology, uncontrolled, and the construction of parmanent diversion structures in the wadis has made the reassertion of the monopoly feasible and even likely. Much depends on how the losers in the groundwater access competition accept their fate.I9 For the IDA-financed surface water facilities it assures that strong vested interests will see to it that the facilities are maintained and operated - at least the upstream elements. It also assures an important role for TDA in the region. In this sense, two of the large components of the Wadi Rima project, The TDA and the surface water irrigation system will endure.
VIII. Lessons
60. The power and the momentum of early commitments to a technical solution are well-illustrated with the Wadi Rima project. The crucial decision was made when the Bank announced it would not finance other than permanent engineered structures. The project went ahead on that basis. When the economics of such an initiative became doubtful the commitments had been made and were difficult to abandon or alter. These decisions should have been
/49 The Region does not regard surface and groundwater user competition for the same water to be an important factor here e-tcept, perhaps, in the alluvial cones just downstream of the diveraion dam command. The enormity of the annual detict overwhelms th6 issue of conjunctivity. In terms of the overall situation in the Tihama the Audit concedes that the Region has a point. For specific subgroups in the Wadi Rima area competition and conjunctivity will be real and urgent. 24 scrutinized by Bank staff from different technical specialties to insure that no particular viewpoint had an undue impact on project design. The Audit here notes the near absence of a Bank agro-technical and economic viewpoint in formulating the irrigation support component. This is not to say there were no individuals from such backgrounds associated with project preparation. It is to say that there is little evidence in the record that the early concerns of the ODM and FAO agro-technical and economic experts were picked up and examined by their counterparts in the Bank.
61. One place where the agro-technical input would have been extremely useful was in the irrigation technology selection process and how it relates to growing crops. The wave of the future in the Tihama is clearly not surface water irrigation from uncontrolled spates - the pressure of events has made that clear. All the current work on irrigation tn arid areas stresses the need to apply just the right amount of water at the riht time and location so that high yielding varieties and the knowledge of optimum water application can be utilized.150 In arid areas this eventually leads to the use of closed conduils that provide measured amounts of water on demand, at a rate calibrated to meet continuous crop needs while preventing waste, salinity, and water logging. While the Tihama is a long way from this ideal, it is definitely moving in that direction. The fact that most of the water- sensitive fruit and vegetable crops are being grown on pump-irrigated land, some of it served by PVC pipes, is indicative. So is the fact that most of the spate irrigated land served by permanent diversion structures remains under traditional coarse grains that are adapted to uncontrolled watering.
62. The quality of the economic thInking that underlay the irrigation subcomponent, especially on the part of Bank staff, must be judged less than satisfactory. A great deal of economic analysis was carried out by different groups at different times but most of this was "downstream" justification well after the major technical commitments had been made. The sort of thinking illustrated in para 21 by FAO staff early in project preparation was never recorded by Bank staff. The simple observation that a ten percent increase in production from 10,000 ha of sorghum would justify an investment of no more than $2.1 million focuses the attention of the engineer and the agriculturalist in a way that pages of computer-generated crop budgets cannot. The creative interaction of economist, engineer, and agriculturalist; working with preliminary cost, benefit and yield assumptions early in the project cycle; was missing.
63. The failure of the Project Completion Report and the OED audit to examine, critically, the economics of the Wadi Zabid Project was an important link in the chain of events. This process was exacerbated by the rapid prepatation of follow-on projects before the economic and technological lessons of Wadi Zabid could have been presented even under a satisfactory
/50 For the latest technologies for irrigation in arid areas see: The Efficient Use of Water in Irrigation, Principles and Practices for Improving Irrigation in Arid and Semiarid Regions by Daniel Hillel, World Bank Technical Paper Number 64, 1987. 25 audit./51 For OED, the costs of the inadequate audit of the Tihama I project are well-illustrated. Complex projects that set the tone and pattern of a series of similar lending operations need to be audited with particular care. Matching the appropriate staff resources with the project under audit is essential.
64. The lessons of the Wadi Rima project have already been partially incorporated in the Tihama V Regicaal Agricultural Development Projec4. There, for the first time in the Tihama series, the term "conjunctive use of irrigation water" is used in the Staff Appraisal Report and typical farm layouts illustrating the use of modern pump irrigation practices, as well as combined pump and sp,ite operations, are set forth. This reflects, to a certain extent, the work done in the Bank in recent years in conjunctive use of ground and surface water.152
65. Another example of the learning experience is the 1980 Wadi Beihan Agricultural Development Project in Sot;th Yemen (PDRY). There, the Bank faced a physical situation very similar to that faced in Wadi Rima in North Yemen (YAR). In the Wadi Beihan project the Bank and the government opted for conjunctive development of surface and groundwater. The concept of permanent structures in the Wadi was rejected on the grounds of lack of hydrological data and poor economics. Instead of building sophisticated "permanent" structures, the emphasis was put on maintaining and repairing the temporary structires with equipment and materials supplied under the credit./3 This approach could be construed as the use of "appropriate technology" and it greatly reduced the need for capital investment in irrigation structures. In the Wadi Beihan project, spate irrigation improvements were estimated at $1.45 million, 11 percent of the base cost of the project, whereas well improvement and on-farm works was $2.35 million, about 18 percent of the base cost. Such an approach has the considerable advantage of flexibility over time. As the shift out of spate irrigation and into groundwater irrigation continues, the
/51 This has been a generalized problem with rural development projects Bankwide. For an interesting and relevant comment on this issue sees World Bank Experience with Rural Development 1965-1986. Report No. 6883, October 16, 1987, pars 6.10, p 82, esp. Box 6.4, "Learning from Experience: Myth or Reality?"
/52 See Efficiency in Irrization: The Conjunctive Use of Surface and Groundwater Resources, A World Bank Symposium, edited by Gerald T. O'Mara, 1988 and its precursor: Issues in the Efficient Use of Surface and Groundwater in Irriat ion, by Gerald T. O'Mara, World Bank Staff Working Paper Number 707, 1984.
153 Attempts were also made to improve the performance of the temporary structures by lowering, widening and compacting the weir crests. Also, by sloping the weir crest and concentrating the breaching action of floods, complete washoucs were to be reduced. Gabions were also used extensively for bank protection. 26 annual investment in reconstructing and maintaining the traditional structures can be reassessed./54
66. Fortunately, there was much that was good about this proje,t and its implementation. The fact that the surface water irrigation component has become a smaller share of total resource commitments in the most recent Tihama project and that conjunctive development under similar circumstances has become the theme elsewhere is encouraging. These developments might have taken place much sooner with the information that was then avrilable if the right critical faculties had been encouraged at the outset.
U
/54 The Region takes exception with the comparison of the Wadi Beihan experience with that of Wadi Rima. See paragraph 8 on page 56 for the Region's position and footnote 7 on the same page for the Audit's response. - 27 -
PROJECT COMPLETION REPORT
YEMEN ARAB REPUBLIC
TIHAMA DEVELOPMENT PROJECT I (CR. 805-YAR)
TIHAMA DEVELOPMENT PROJECT IV (CR. 978-YAR)
March 26, 1987
Regional Projects Department Europe, Middle East and North Africa - 29 -
YEMEN ARAB REPUBLIC
TIHAMA DEVELOPMENT PROJECTS II AND IV (Credits 805-YAR and 978-YAR)
IDA Overview-of the Project Completion Report
I. Highlights
1. The two projects are to a large extent complementary and cover the same geographical area, the Wadi Rima in the Tihama coastal plain of the Yemen Arab Republic (YAR). At the time of appraisal of the Tihama Development Project II (TDPII)(Cr. 805-YAR), the least-cost solution for restructuring the Wadi Rima's traditional irrigation system had not let been established. TDPII was therefore designed as an institutional and rural development project, providing techtical assistance and a number of developmental services including the establishment of an agricultural extension service. The project also provided for the means to test viability of alternative wadi diversion schemes for irrigation development, on the basis of which the Tihama Development Project IV (TDPIV)(Cr. 978-YAR), essentially an irrigation infrastructure project, was'subsequently designed and appraised.
2. The main components of TDPII were the provision of technical assistance for the establishment of research and extension services, agricultural credit, construction of access roads and rural water supply, testing of gabion structures for irrigation works, and some other rural development activities. The components of TDPIV included the construction of a diversion structure and supply canals, remodelling of existing canals, a rural uplift program, and a sand dune stabilization component. Both projects included specialized studies for the Tihama region on cost and crop-sharing arrangements, farm mechanization, water resources, and fruit and vegetable marketing.
3. The extension component was initially only moderately effective; the fundamental problem was the virtual absence of subject matter specialists and links with research in general. In addition, there were serious logistical problems related to staff recruitment, housing and transportation. Towards the end of the projects, especially following the implementation of a separate IDA-assisted Agricultural Research and Development Project (Cr. 1259-YAR) at the national level, the si-cuation improved significantly.
4. The rural uplift program, was devised to advise rural women in activities such as nutrition, child care, health, and education and was to be executed by female agents. It was designed to work closely with the extension service, but its objectives were not really appreciated by middle management levels. The turnover rate of female agents was high and the program's impact had been very modest. - 30 -
5. The credit component, implemented by the Cooperative and Agricultural Credit Bank (CACB), was successful. Demand for medium-term loans far exceeded appraisal estimates; for short-terr loans it was substantially less. Recovery rates, which improved steadily towards the end, were about 70-80% and higher than the average rates for CACB as a whole.
6. Implementation of the engineering/construction components was, on the whole, sat.sfactory, although problems, mostly attributable to lengthy preconstruction procedures, delayed the village water supply component and the construction of extension centers and associated housing. Construction of the Tihama headquarters building and the irrigation development works was very close to schedule, various design modifications notwithstanding.
7. The agricultural impact of the projects at this stage does not seem very impressive, which is attributed to a series of drought years (1982-84) and the fact that the irrigation improvement works having started operating only in 1984, the benefits of those improvements have not yet been fully achieved. It is, therefore, too early to make a proper assessment of the full agricultural impact of the projects. However, the social and economic benefits brought about by the rural infrastructure (village water supply schemes and rural roads) constructed under the project are very much in evidence. For example, the -rural roads constructed under the project have not only facilitated easier and faster movement of men and material in the project area but are also expected to contribute to increased net farm incomes. Furthermore, the technical assistance provided through the projects has helped strengthen managerial and implementation capabilities of TDA which is an asset to the development of the Agriculture Sector in YAR.
8. The economic rate of return presented in the PCR is overstated and had to be reviewed on the basis of a more realistic projection of inputs, yields, cropped area and production. More information on yields which may be reasonably expected in the Tihama area is available now than at appraisal which was rather overoptimistic. Based on the available information and current estimates of future production, the ERR is estimated at about 10-11% compared to 15% indicated in the PCR and the original appraisal estimates of 25%.
9. The performance of Government and TDA was varied. TDA's management and planning capability grew significantly, though its engineering function was better executed than the agriculttral activities. A serious shortcoming of TDA has been its extremely weak capacity to undertake operation and maintenance (O&M) work, particularly the latter. Under the recently approved Tihama V Project (Cr. 1667-YAR), a component has been included to establish a regional O&M apability, intended to lead eventually to the establishment of a national service. Technical assistance to establish a regional extension service is also being provided to strengthen the agricultural section of TDA under the same project. The Monitoring and Evaluation Section of TDA, though supported by an expatriate advisor, was established late. Therefore, it failed to fully document the changes in agricultural production achieved under these projects. This situation contributed to difficulties in obtaining data for assessing project impact. - 31 -
10. IDA was able to assist by periodically suggesting modifications in engineering design and construction, making proposals for organizing the extension component, as well as by liaising with central Government agencies. IDA also repeatedly stressed the need for adequate O&M. IDA's field missions generally concentrated more on the technical than the farm income aspects of the projects; hence the supervision reports, while being detailed in engineering and agricultural aspects, provided little information about the impact of wage and price increases on production economics.
11. The lessons learned from these projects include: (i) the need for early establishment of the evaluation and monitoring function; (ii) the need to accommodate established water rights in irrigation design; (iii) weak research-extension linkages and absence of subject matter specialists would render extension ineffective; (iv) that a regular service for 0&M of infrastructure should be included in the project design; (v) that any separate female extension service should be initiated only after the standard extension service is well established; (vi) that salaries and employment conditions of project staff should be competitive in relation to the public sector; (vii) that IDA's supervision missions should more oftea monitor and evaluate information on production economics during reviews of project implementation; and (viii) that the Government's bureaucratic procedures should be discussed at negotiations to overcome factors which could delay project implementation.
II. Introduction
12. The attached Project Completion Report (PCR) relates to the Tihama Development Projects II and IV (Credits 805- and 978-YAR), which are both located in Wadi Rima in the Tihama coastal plain of the Yemen Arab Republic (YAR). The PCR was prepared by two consultants who had previously worked as management and agricultural advisers in YAR and were contracted by the Tihama Development Authority (TDA) for the purpose. Overall, the draft PCR did not provide a complete account of the projects' impact and was generally uncritical of the performance by the concerned parties. At the request of IDA, FAO/CP fielded a mission to YAR in January 1986, to review the draft PCR with various Government agencies and TDA in particular and to assist in finalizing the draft PCR. TDA provided additional informetion on that occasion which is included as Annexes to the PCR in preference to revising the report. IDA's overview is prepared on the basis of a review of the draft PCR and the additional information so provided by TDA.
III. Project Implementation
13. The IDA Development Credit Agreements (Cr. 805-YAR and Cr. 978-YAR) for the two projects were signed on May 31, 1978, and April 21, 1980, respectively. TDPII (Cr. 805-YAR) became effective only on March 5, 1979, after two extensions due to (a) delay in signing the co-financing agreement with the Kuwait Fund for Arab Economic Development (KFAED) and (b) securing land for the construction of TDA headquarters in Hodeidah. TDPIV (Cr. 978-YAR) became effective on April 14, 1981, after three extensions, due to delays in ratification of the co-financing agreement with KFAED. Both projects therefore started about one year later than originally planned. TDPII, the project with the larger nuiber of components, experienced serious initial delays in the execution of almost all components; as a consequence the - 32 - project closing date needed to be extended from 06/30/84 to 06/30/86, one year at a time. TDPIV, after an initial slow start in the execution of the irrigation works, met with less problems. The closing date for TDPIV had to be extended by only one year, from 06/30/85 to 06/30/86 and, hence, the final closing dates of both projects were identical.
14. Aside from the delayed effectiveness of the credits, progress of project implementation suffered on several occasions due to delays caused by the Government in processing procurements and awarding contracts. For instance, while the tenders for a gravel road construction contract had beea opened November 1979, the contractor's agreement was signed only in July 1981, after a lapse of about 20 months. The Government Tender Board, whose approval is mandatory in awarding public sector contracts, proved to be the major factor of delay in the procurement process. Recruitment of various expatriate specialists was delayed, because of time-consuming bureaucratic procedures for obtaining Government's clearance for employment and service contract extensions as well as in fixing their remuneration.
IV. Origin, Preparation and Justification
15. The coastal plain of the YAR known as the Tihama region is the only area in the country where relatively large scale irrigated crop production is possible. Wadi Rima encompasses about 15% of the cultivable area in the Tihama region, the development of which continues to be a significant undertaking in exploitin- the agricultural potential of YAR. The region is the major producer of food grain, fruit and vegetables. These two projects in Wadi Rima were based to a substantial degree on the experience acquired and lessons learned in the nearby Wadi Zabid under Tihama Development Project I (Cr. 376-YAR), more particularly on the experience gained from performance of various types of irrigation works and adoption by farmers of various cultural practices and on the administrative and technical capability of TDA, gradually developed under the first Tihama project. Though appraised separately, with an interval of about 1-1/2 years, TDPII and TDPIV are to a large extent complementary. At the time of appraisal of TDPII, however, the least-cost solution for restructuring the Wadi Rima's traditional irrigation system had not yet been established. Hence, under TDPII it was decided to provide the means for testing alternative technical solutions for irrigation development works in addition to the provision of a number of services and infrastructure (para. 16) to support agricultural development in the wadi.
16. TDPII was therefore primarily designed as an institution-building and a rural development project, while TDPIV had a large irrigation component (about 50% of all investment costs). The main components of TDPII were technical assistance in agricultural extension and research, agricultural credit, construction of access roads and rural water supply and hydrometeorological monitoring facilities. TDPII also included construction of a headquarters building for TDA at Hodeidah, gabion test structures for wadi protection works, as well as funds for UNDP's Institutional Support and Central Agricultural Research projects. The project was in part based on an investment plan prepared by the Land Resources Division of the British Overseas Development Ministry (LRD/ODM) under the British technical assistance program to YAR. The institutional support to the Ministry of Agriculture and - 33 -
Fisheries (MAF) and the Central Agricultural Research Station were continuations of earlier UNDP special support projects. The Government requested IDA to finance these institutional development activities as part of the development of Wadi Rima.
17. TDPIV was based on feasibility studies for the improvement of the Wadi Rima's irrigation system, carried out by Dutch consultants financed under bilateral assistance from the Government of The Netherlands,.and by a British technical assistance team of LRD/ODM for a pilot sand dune stabilization program. The latter component was included to arrest drifting sand dunes in the Tihama region which constitute a serious problem to sustained agricultural development. A third component was the execution of a rural uplift program, aimed at improving health, nutrition, education, etc. in the project area, thus complementing the extension activities undertaken under TDPII.
18. Because of the dearth of specialized personnel in MAF and the project management and the paucity of essential information regarding agriculture and water resources, both projects provided substantial funds for expatriate expertise of various kinds (155 man-years), as well as for a number of specialized studies. Although the expatriate assistance was very effective in physically implementing the projects, the other main objective of the technical assistance component, i.e. transfer of skills to counterparts and training of local personnel, was not fully achieved.
V. Tihama Development Project II Staff ing 19. Soon after the project had been declared effective, most senior staff, with the exception of the extension advisor, were posted. On some occasions, suitable replacements of staff when their contracts expired were appointed only after considerable delays stemming from lengthy and tedious procedu:es in obtaining clearances from various governmental agencies for appointments and approvals of emoluments. Throughout its course, the project authorities also experienced considerable problems in appointing and maintaining Yemeni counterpart extension personnel.
Extension and Research
20. A modest extension service was established for the project area. Major problems in establishing the service included the hiring of suitable staff, delays in construction of buildings, inadequacy of transportation (motorcycles often broke down), and, more fundamentally, the inadequate link with research which prevented the necessary interaction between extension and research. As a consequence, no suitable technical packages were available for the large spate irrigated areas, mostly planted to sorghum; extension workers concentrated instead on the smaller areas with assured water supplies and on promoting fruit and vegetable development. Toward the end of the project, the agricultural research component was continued and also expanded under a separate IDA-assisted national project (Credit 1259-YAR). A closer integration of extension with research is also being pursued now. -34-
Credit
21. The project provided for supply of short-term loans to farmers for farm inputs and medium-term loans for farming machinery and equipment. The demand for medium-term loans far exceeded the appraisal estimates, but during the middle of the project there was a significant slowdown in short-term loans for which no specific reason is given. It could perhaps be attributed to the long delays (several weeks) for loan approval and the slow pace in agriculturAl production during the drought years 1982-84; The credit component was, however, fully implemented and the amount allocated for it was entirely drawn. Separate data relating to recovery of project loans are not readily available. However, the collection performance of the Cooperative and Agricultural Credit Bank (CACB) at the Zabid branch, which provides a major proportion of loans to project area farmers, indicates a steady improvement in loan recoveries since 1981. Local recovery rates of 70-80% are higher than the average rates for the bank as a whole, though well below the levels (80-90%) reached in the 1970's.
Engineerinw/Construction
22. TDA headquarters buildings at Hodeidah and the Wadi Rima access roads were satisfactorily completed with only minimal delays. A cost-effective layout of the access roads network involving a total length of 85 km was adopted against the appraisal estimate of 105 km. The access roads have proved to be extremely beneficial as evidenced by the significant transportation activity generated in the project area. The main concern here, however, especially for the gravel roads, is one of inadequate maintenance
(para 39). Construction of extension centers and additional project housing - was seriously delayed largely because of delays in preconstruction activities, including selection and approval of contractors. This, of course, affected the implementation of the project's extension component. Implementation of the village water supply schemes was also very slow, again largely attributable to time-consuming preconstruction activities and procedures. The total number of schemes constructed was 49 against 68 at appraisal. The number of schemes was reduced, but the size of each scheme was enlarged to serve the targeted population in the project area.
Hydrome.eoroLojical Monitoring
23. The hydrology section of TDA continued the collection and processing of data on all wadis in the Tihama region, including an assessment of water balance in major wadis with emphasis on aquifer response to surface hydrology. This activity is now included in the second phase of the Tihama Basin Water Resources Study, assisted by the Netherlands Government and IDA (para 30). The surface water data collected for the wadi was applied in the design of irrigation diversion and conveyance structures under TDPIV.
Gabion Test Structures
24. In the project preparation reports, it was argued that gabion construction (stones packed in galvanized iron wire crates) could be cost-effective for the wadi diversion works. The technical feasibility of -35- this proposal was tested or. field models at two locations in the wadi. The conclusions drawn from the field trials were; (a) gabions would be a suitable means for protection of structures in the flat bed wadis, provided routine inspection and maintenance could be assured, and (b) gabions would not be suitable for permanent structures in the wadis which are entrenched in narrow gorges and where water levels and velocities in floods are high. Based on these conclusions, it was decided to construct permanent reinforced concrete structures for all irrigation works and to limit use of gabions only for slope protection, especially below the main structures.
Short Term Studies
25. Five short-term studies were carried out under TDP II. (i) A Fruit and Vegetable Marketing Study was undertaken by consultants and a draft report issued in December 1985. Government plans are in hand to organize a seminar to discuss the findings of the report in a large audience including interested farmers and entrepreneurs in the private sector. (ii) A Banana Production Study was undertaken in fall 1985. Based on its recommendations, training of three Yemeni agriculturists is being arranged in the banana plantations of Central America. (iii) A Date Palm Production Study was undertaken by FAO; its findings are reported to have been accepted by the project's agricultural specialists who plan to implement the recommendations of the study through extension. (iv) Farm Mechanization: This study has not been carried out because adequate maciAnery testing was carried out under a British farm mechanization project and its findings were accepted by MAF officials. (v) The Economic Commission for West Asia (ECWA) agreed to undertake a follow-up to an earlier Sharecropping Arrangements Study; its report was issued in January 1987 and is presently being reviewed by TDA and other governmental agencies. The outcome of above studies (i) zo (iv) is expected to be very beneficial for the development of agriculture not only in the Tihama Region but also in the country as a whole. The acceptance of most of the recommendations of the studies by the Goverument is a testimony to its willingness to respect the advice received from experts in the related fields. The subject of study (v) of sharecropping arrangements, however, is politically sensitive and will need time and determination on the part of the Government to enforce an equitable arrangement. IDA should follow up the progress ou this subject.
VI. Tihama Development Project IV Enieerig
26. To complement the agricultural development initiative taken in TDPII, wherein the rural infrastructure development and establishment of agricultural support services werc undertaken, this project was designed to provide irrigation works comprising a wadi diversion structure, a syphon, a supply canal, and two take-off structures, as well as remodeling existing primary aid secondary canals. A Dutch consulting firm, financed under a Dutch/Yemeni bilateral agreement, was responsible for design, preparation of tender documents etc. and supervision of construction. During implementation, various changes in the irrigation works were called for. The design of the wadi diversion structure was adjusted to incorporate the lessons learned from the operating experience of Wadi Zabid structures (Cr. 376-YAR). Also, the - 36 - cross-drainage structures constructed on the main supply canal, which is aligned along the toe of a series of hill slopes, were found to be inadequate after the first rainy season. The consultants revised the designs, and the required modifications were executed before the next flood season.
27. The inlet structures and downstream canals were originally designed according to standard system distribution principles. In the project area, however, upstream users have priority rights to water over downstream users. The consultants, thereupon, modified the design criteria for the distribution of water and the related works, taking into consideration the specific conditions under which the system was expected to operate. The canal flows can now be regulated to fully meet the legitimate irrigation requirements of the upper farmers.
28. The two main contracts for civil works, i.e. one for the diversion works, the other for the construction of main supply canals, distributian canals and appurtenant works, wcre both completed on schedule, the above mentioned delays to incorporate design changes notwithstanding. The consultants produced the manual of O&M guidelines to operate various components of the works in accordance with the design considerations.
Studies
29. The water regulation study for distribution of wadi flows was completed by consultants in November 1983, and after review by TDA, a report was issued in March 1984. The finalized plan called for the distribution of one-third of the volume of spates to the northern areas and two-thirds to the southern supply canals. The base flow would be distributed by rotation also in the same ratio between the two areas. This pattern was adopted on the basis of the water rights of various segments of the wadi and analysis of hydrological data for a period of seven years preceding project implementation. Government is taking the nectssary steps to implement the recommended pattern of water regulation, though with some opposition from a section of the population in the northern area; this is reportedly being resolved by TDA at the present time.
30. A consultancy contract for carrying out a water resource study for the entire Tihama region was signed in November 1984. The study, mainly financed under a Dutch/Yemeni bilateral agreement and partly funded by IDA, covers several aspects, including land use and agriculLural practices, as well as an overall assessment of the area's water resources potential. It is scheduled for completion by the end of 1987.
Agricultural knpact
31. The agricultural impact of the projects during the period 1978/9-1985/6 was rather modest, largely because the project area suffered from three consecutive years of drought; consequently crop yields were much below appraisal estimates. According to the PCR, total cropped area exclusively under spate irrigation remained about the same, whereas cropped areas under well irrigation supplemented by spate irrigation increased by about 25%; a large shift away from cereals to fruits and vegetables production took place reflecting higher returns from these crops. - 31 -
Yields
35. Yield estimates for selected crops under spate and well irrigation before the projects started and as projected at "with" and "without" development -:re given below:
Yields (tons/ha)
Before Project FWO /1 Projected /2 Spate Well Spate Well Sate Well
Sorghum 1.0 1.2 1.1 1.3 1.5 1.8 Millet 0.8 1.0 0.8 1.0 1.2 1.4 Maize 1.0 1.2 1.5 1.7 2.3 2.8 Sesame 0.5 0.6 0.6 0.8 0.8 1.0 Banana 6.0 6.0 7.0 8.0 9.0 10.0 Papaya - 24.0 - 30.0 - 42.0 Watermelon - 6.0 - 8.0 - 12.0 Tomato - 6.0 - 9.0 - 13.0 Onion - 5.0 - 6.0 - 13.0
/1 Future without project. /2 At full development
Project Impact
36. The quantifiable project benefits derive from crop production increases resulting mainly from changes in cropping patterns, better utilization of available water, and agricultural inputs. The construction of permanent irrigation works has reduced the danger of production loss resulting from floods damaging the traditiona' earth diversion -tructures that existed before the project. It has also achieved the desired objective of reducing the need for reconstruction and repair of the damages in the diversion structures. The rural road construction has made positive contribution to the agricultural development program by increasing the benefits accruing to agricultural production through a decrease in transport costs and improvement of marketing infrastructure; it has benefited farmers by facilitating their access to the market, and improving links between agriculturEl areas and national road networks. They have thus served more than their primary purpose of providing access to farms and population concentrations. Unfortunately, these quantifiable benefits have not been measured satisfactoriLy by :he Government due to poor data base in the beginning of the project and delay in the establishment of the monitoring and evaluation service. Consequently, the PCR has failed to quantify the project's economic performance 4nd its impact on farmer's income.
37. The nonquantifiable benefits attributable to the prctect are quite significant and merit mention. There is a definite social uplift in the area as evidenced by the construction of housing with better amenities by the - 38 -
32. By the time the project is fully on stream, expectations are that, total cropped areas (spate and well irrigated) for fruits (mainly banana and papaya) would have increased from 640 ha to 1,150 ha (an increase of about 180%) and for vegetables from 850 ha to 2,560 ha (a threefold increase). The projected area planted to high-value crops (comprising 26% of the total cropped area) exceeded appraisal estimates; while those of cereals and industrial crops (sesame, cotton and tobacco) fell below the appraisal estimates. While the above area allocations to crops reflect the relatively high value obtained from fruit and vegetable production, they could also be due partly to Government's decision to ban imports of these commodities, whicI induced area farmers to expand their planting of fruits (especially banana and papaya). Out of these, only bananas were being imported prior to the imposition of the ban. With increasing cultivation of improved varieties of these crops and better marketing infrastructure, the domestic prices compare favorably with the imports. The low prices of cotton and tGoacco, on the other hand, have discouraged production increases of these commodities.
Cropped Areas
33. The cultivated areas under spate and well irrigation for the project area before the project and at full development (in hectares) are tabulated oelow:
Irrioated Areas (ha)
wall Irriaated Spate Irrioated Totals Before Before Before Ernct am Prlc Be IN Eroaec EA EW Cereals 3.645 3.475 2.SSO 6.560 6.1S5 6.100 10,205 9.630 8,650 Industrial Crops 1.495 1.575 1,660 400 360 500 1.895 1.93S 2.160 fruits so 300 650 100 340 500 150 640 1,150
Vegetables 375 850 2560 - - - 37S 850 2.560
FIO: Future without project. FW: At full development.
Cropping Pattern
34. The cropping pattern in the spate areas remained virtually the same, consisting entirely of sorghum, millet and maize; only close to the wadi bed, in the upstream ar,as, banana production expanded significantly. In the well-irrigated areas (supplemented by spates), production of fruits and vegetables increased substantially (para. 32) and now constitutes about one-third of the cropped area. This rapid expansion is attributed in the PCR to the introduction of new crops, improved varieties of existing crops and especially to rapid price inc.eases, and improved road communications. - 39 - farmers and other related infrastructure along the rural roads. The construction of water supply schemes has facilitated availability of potable water to the rural population in the project area which have not only improved hygienic conditions but have also relieved the womenfolk of time and effort to fetch water from distant ponds and streams, enabling them to be more productive in agricultural activities. The provision of technical assistance has led to the strengthening of TDA (para. 47) which at present is one of the best organized institutions in YA1 and was commended by the President of the Republic in 1986 for its noteworthy contribution to the development of the Agriculture Sector.
VII. Economic Analysis 38. It is evident that the appraisal estimates of "with project" yields, largely influenced by the "good" season which had occurred during 1975-76, to almost double the "before project" yields for all main crops, were too optimistic. Also, the appraisal estimates of "without-project" data were likely to have been erroneous when compared with actual 1979-85 yields. The Economic Rate of Return (ERR) of TDP II and IV estimated in the PCR ib 15% compared to original appraisal estimates of 30% and 25%, excluding all investments on rural women development, veterinary services and sand dune stabilization. However, the yield projections at full development (expected to be attained about seven years after project completion) made in the PCR also appear overestimated as the data on yield and areas are mostly based on production information obtained from field test plots and farms of "leader farmers". Based on experience and Bank Staff's knowledge of the Tihama area, the yield projections in the Tihama area for most commodities provided in the PCR are about 20-25% higher than the actuals. With appropriate adjustments made accordingly in yield projections, the ERR would be about 10-11%. It should be noted, however, -that this result is based on partial information; therefore, the full economic impact of the project is not precisely known.
VIII. Institutional Performance
Government
39. In the course of executing the various Tihama projects, TDA has developed a substantial management and planning capacity but only at the higher executive levels. TDA's project implementation capabilities still need to be supported by expatriate assistance. Initially, the existing design and supervision team of TDA was not in a position to cope with-the projects in hand. The capacity and capabilities of this team had to be significantly enhanced by the recruitment of three expatriate civil engineers and various other expatriate staff. Generally speaking, it would appear that TDA's engineering function was better executed than its agricultural activities. The extension service suffered from the late arrival of the various expatriate experts, frequent changes amongst these, substantial problems regarding housing and transportation and, perhaps most important of all, a wholly inadequate integration of extension work and the research effort in the initial years of the projects. The most serious shortcoming of TDA is its extremely weak capacity to undertake operation and maintenance (0&M) work, especially the latter, and to effectively coordinate project-based services. This is partly due to inadequate funding by Government and partly to the difficulty of organizing O&M activities for the individual projects. A major component of the recently approved Tihama V Project (Cr. 1667-YAR), is to - 40 - establish a regional O&M capability which will be replicated in future regional projects such as the proposed Southern Regional and Northern Regional Agricultural Development Projects. Also, the extension service ia being strengthened by the establishment of regional services in the Tihama, Southern, Central and the Northern areas of the country through various IDA-assisted projects. These regional development activities are expected to lead eventually to the establishment of national services for 0&M and Extension and thus make it possible for the Ministry .of Agriculture to implement the sectoral development objectives.
40. During the implementation of the project, TDA experienced serious financial problems as its budget requests for local funds were invariably curtailed by the central Government authorities, and payments to TDA were often delayed. This was an important reason for the failure to execute tha sand dune fixation component which was to be financed by the Government itself. Pa.ments to contractors, suppliers and expatriate experts were often delayed due to time-consuming procedures of MAF and CPO for preparation of withdiawal applications. In the latter stages of project implementation, however, procedures were adopted which resulted in reducing the processing time for payments.
41. TDA generally submitted its quarterly progress reports in time; progress of works, purchase 'of equipment, financial information in general were well documented, but because of a substantial delay in establishing a monitoring and evaluation (M&E) unit, information on agricultural development was initially not available, and was only very partially provided in later reports. TDA should improve M&E capability of its ongoing projects so that their costs and benefits can be timely and most precisely measured.
42. Through technical assistance provided under these projects, TDA benefited significantly in terms of training of the counterparts and other local staff. However, a local cadre of staff has not yet been fully established to be able to handle future development projects independently. TDA, therefore, still requires technical assistance from expatriate staff for project implementation, operation and maintenance, The technical assistance components of the ongoing projects have been designed to ensure maximum transfer of knowledge so that the local staff can progressively assume major responsibilities and eventually carry out projects without need for expatriate assistance.
IDA 43. Nine supervision missions averaging 20 man-days each in the field at about 1.5 per year were launched by IDA during implementation of the projects. Government and TDA hale been appreciative of the effectiveness of these missions, especially regarding their contribution in reviewing and suggesting modifications in engineering design and construction, in making proposals for organizing the extension component, including the rural uplift program, and in assisting TDA to coordinate its activities with such central agencies as the Central Agricultural Credit Bank, CPO in the Ministry of Planning, the rAnistry of Finance and the Ministry of Agriculture and Fisheries. On various occasions, IDA assisted by agreeing to modifications in procurement arrangements; nevertheless procurement was often slow because of -41- lengthy procedures followed by Government. Frequently IDA stressed the need . for appropriate and adequate O&M and the formulation of the necessary O&M guidelines; this vital activity will now be carried out on a regional basis (para 39).
44. TDA's quarterly progress reports in the initial years of the projects dealt almost exclusively with engineering and hydrological matters; and during supervision missions, IDA, too, had not concentrated adequately on the efficiency of the extension component and its.impact on agricultural development. Thus, the supervision reports, while being detailed in engineering and agricultural aspects, provide little information on production economics, effects of high farmgate prices for fruits and vegetables, increases in wage levels, etc. On the other hand, as YAR agriculture was free of large-scale Government intervention and controls during most of the time when these projects were being implemented, no major issues regarding economic or sector policies affected the projects during implementation.
Consultants
45. TDA, being a relatively new organization at the start of the projects, eztablished in 1973, was obliged to recruit a substantial number of expatriates for some management positions and a large r-imber of technical positions. At an early stage it was decided to attract these, not as a team to be provided by a consulting firm or specialized organization, but through individual recruitment. One of the reasons advanced for the latter method was that earlier experience had shown that it would be a more efficient way for the transfer of knowledge by the individual experts to the Yemeni counterparts. However, this strategy had its own problems as individual recruitments provea difficult and time-consuming; various positions, especially for agricultural specialists lay vacant for two to three years, and in such instances young Yemenis had to make do without expert guidance. The Engineering Section, which was staffed by expatriates from within and around the Middle East who had Yemeni experience from the first Tihama project, carried out much of the design work and prepared tender documents for most major contracts as well as procurement documents in a timely manner; only preparation of the irrigation works contracts was done by the foreign firm. The agricultural experts were relatively less effective due mainly to delayed appointments, as pointed out above.
46. A Dutch consulting firm was responsible for the design of the irrigation works. Although initially some problems arose on account of their unfamiliarity with the project area, these problems were later resolved satisfactorily. The firm also prepared the tender documents, assisted in their issuance and award, supervised the construction and prepared the &uideline manuals for operation and maintenance of irrigation systems.
47. Both TDA and the Government appreciated the benefits of technical assistance and the contribution of expatriate experts, particularly at the field level, in the implementation of the projects. A total of 155 man-years- of expatriate technical assistance costing US$2.47 million
1/ Excludes 14.5 man-years (Dfl. 4.5 million) provided under bilateral assistance by the Government of the Netherlands. - 42 - was provided under the two projects. The expatriate experts appointed as advisors at the TDA headquarters were successful in training the executive and high-level staff in the administrative, planning, financial, agricultural and engineering sections of TDA. This has led to the establishment of an effective organization at the central level of TDA to follow up on the development process for the Tihama region. However, there was a shortage of adequately qualified staff at the field level to fill in counterpart positions during the initial stages of the projects. The implementation of civil works was supervised directly by the consultants as the required strength of local supervisory staff was not available and only a few of those available had the education and background to receive knowledge from the experts. There was also a shortage of local staff to participate in the agricultural activities of the projects. Nevertheless, the conditions improved as some of the recipients of local pre,ervice training (98 trainees totalling 730 man-months), on-the-job training (97 trainees totalling 90 man-months) and foreign training (71 trainees totalling 378 man-months) financed by the projects became available. About 20% of the staff who received overseas training under the projects did not return to TDA, while about half of them were assigned to other agricultural projects in YAR.
IX. Lessons Learned
48. These are summed up as follows:
(a) In multicomponent area development projects which include extension, irrigation, water supply, roads, etc., an evaluation and monitoring system should be established at an early date to measure impact and suggest changes in project scope or direction, if necessary. In this case, this was done only towards the end of the projects.
(b) The design of irrigation networks in areas with established water sharing procedures should follow the latter as much as is reasonale; adherence to standard layouts in TDPIV called for modifications of structures and canals.
(c) The weak linkage between research and extension in the initial stages as well as the absence of subject matter specialists to back up the extension agents, greatly reduced the efficiency and impact of the projects' extension service. In the course of time, this situation was gradually improved.
(d) Under YAR conditions, the rural uplift component directed towards rural women and executed by female agents was difficult to execute and aad only a modest impact. It would appear that such an innovative component as this could have been better launched once the normal, standard, extension service was well established.
(e) The establishment of a regular service for carrying out 0&M of infrastructure constructed under the project should have been included in the project design and provision of funds for post-project activities should have been agreed upon with the Government during negotiations. - 43 -
(f) The salaries and other employment conditions of the local staff of the project should be competitive with those of the private sector so that suitably qualified staff could be recruited and retained for implementation and O&M.
(g) IDA's supervision missions should collect and record information more often on production economics during project implementatior reviews so that the assumptions of yields and cropping patterns made at appraisal could be verified.
(h) The Government's bureaucratic procedures for approving procurements and appointment of expatriate staff cause delays and adversely affect project implementation; those procedures could be discussed during loan negotiations to remove bottlenecks.
2029C - 45 - ATTACHMENT I Page 1 of 8
COMMENTS FROM BORROWER
AUG.07, 1988
AGR/AAG/225/88
FM. TDA HODEIDAH, YAR.
TO. IDA - WASHINGTON DC, ATTN: MR. P. GARG, CHIEF, AGR/DIV. EMENA III. MR. GRAHAM DONALDSON, A/CHIEF, OPERATION EVL.DEPT.
CC. H.E.THE DEPUTY PRIME MINISTER, MINISTER OF DEVELOPMENT AND CHAIRMAN, CPO - SANA'A.
CC. H.E.THE MINISTER OF AGRICULTURE N FISHERIES RESOURCES - SANA'A.
CC. KFAED - KUUAIT, ATTN: MR. H. ALUAQAYAN, DIRECTOR OF OPERATION.
CC. EMBASSY OF NETHERLAND, SANA'A, THRU CPO - SANA'A.
T.D.A. COMMENTS ON PROJECT PERFORMANCE AUDIT REPORT FOR TIHAMA DEVELOPMENT PROJECT II AND IV (WADI RINA).
THE REPORT SUPPORTED THE MAIN FINDINGS OF THE TIRANA WATER RESOPURC ES STUDY ON UHICH TDA HAS ALREADY COMMENTED AT LENGTH. THE FOLLOWING AR E COMMENTS ON SOME ISSUES RAISED IN THE REPORT:- ATTACHMENT I Page 2 of 8
1. TO SETTLE THE DIFFERENCE IN OPENION ABOUT THE UNECONOMIC NATURE OF THE SURFACE IRRIGATION INVESTMENT OF THE PROJECTS, TDA CONSIDER IT NECESSARY TO CARRY OUT A COMPREHENSIVE STUDY OF THE SITUATION BASED ON RELAIABLE DATA.
The rules did not 2. AS REGARDS INEQUITY IN SPATE WATER AVAILABLITY TO FARMERS, THE change but the RULES CONTROLLING ACCESS CF FARMERS TO WATER DID NOT CHANGE AS A technology for restricting water RESULT OF THE IMPLEMENTATION OF THE SURFACE IRRIGATION FACILITIES. S for upstream users 0 did. See paras. 18, 25 and 35 and THERE MAS NO QUESTION OF HIGHTENING THE HISTORICAL INEQUITIES. footnote 48 of the Audit Report. WHAT PROBABLY HAPPEND IAS THAT:-
A) DUE TO YEARS OF DROUGHT THAT HIT THE UHOLE COUNTRY, SPATE UATER SHORTAGE LEAD TO THE DOUN STREAM FARMERS RECEIVING LESS WATER.
B) THE CHANGE UHICH TOOK PLACE IN THE CROPPING SYSTEM RESULTED IN REPLACING CROPS OF LOU WATER REQUIREMENT UITH CROPS OF HIGH VATER REQUIREMENTS E.G. BANANA. THIS CHANGE IS ECONOMICALLY AND POLICYUISE JUSTIFIABLE.
3. AS FAR AS THE SUGGESTION TO RESTRICT PUMP IRRIGATION TO ONE-SEAS ON OPERATION, TDA DOES NOT CONSIDER THE PROPOSAL FEASIBLE. SUCH OPERATION WILL NOT SATISFY THE FARMER LIVING NEEDS AND WILL NOT ALLO U See para. 55 and 56 CULTIVATION OF CROPS WITH HIGH ECONOMIC RETURN. AS A RESULT of the Audit Report.UNEMPLOYMENT AND IMIGRATION WILL BE ENCOURAGED. IN OUR OPENION THE PROBLEM CAN BE EASED BY INTRODUCING CANTROL LEGISLATION AND DEMARKATING THE PROBLEM AREA AND STRICITLY BANNING UELL DISGING INSIDE ITS BOUNDRIFq. I - 47 - ATTACHMENT Page 3 of 8
AND EXTENSION ALL OVE 4. TDA AGREES TO THE NEED SUPPORTING RESEARCH R GIVEN TO THE RAINFE THE PROJECT AREA, BUT THINKS THAT THE PREFERENCE D FACED WITH SOME AREAS CONCERNING EXTENSION ACTIVITIES WILL BE OF THE RAINS WILL RESULT PROBLEMS. THE SEASONALITY AND UNCERTAINITY THE FARM YIELD. IN GROWING SEASONAL CROPS ONLY IN LOWERING WILL BE SMALL AS THE CONSEQUENTLY THE USE OF AGRICULTURAL INPUTS YIELD MAY NOT JUSTIFY THE COST.
TO THE ABSENCE OF RESEAR THE EXISTING PROBLEM AT PRESENT IS RELATED CH SPATE IRRIGATED AREA. WORK AND RESEARCH RECOMMENDATIONS IN THE ACTIVITIES TO BE RESERCH WORK WILL PAVE THE WAY TO EXTENSION CONCENTRATED IN THAT ECONOMICALLY IMPORTANT AREA.
DATED 26TH MAY 1988 WHICH PLEASE ALSO REFER TO NY LETTER NO. 848/88
BASIN WATER RESOURCES CONTAINS THE DRAFT FINAL REPORT OF THE TIHAMA REPORT AND ADDITIONAL STUDY AND TDA COMMENTS ON THE ABOVE MENTIONED OF VIEW. POINTTS NO.1 TO 10 WHICH CLARIFY TDA POINTS
BEST REGARDS. E.A.ALDOUMI CHAIRMAN 5673 ALHAIA YE 248423 WORLDBANK 5673 ALHAIA YE - 48 - ATTACHMENT I Page 4 of 8
AUG.167 1988 ENG/MAN/237/88
FM. TDA - HODEIDAH, YAR.
TO. IDA - WASHINGTON DC1 ATTN: MR. P.GARG, CHIEF, AGR/DIV. EMENA III. "f MR. DONALDSON, OED.
CC. H.E.THE DEPUTY PRIME MINISTER7 MINISTER OF DEVELOPMENT AND CHAIRMAN, CPO - SANA'A.
CC. H.E.THE MINISTER OF AGRICULTURE N FISHERIES RESOURCES - SANA'A.
C. KFAED - KUWAIT, ATTN: MR. HISHAN ALUAQAYAN7 DIRECTOR OF OPERATION.
REFERENCE PPA REPORT OF JbNE 1988, PREPARED BY OED (UORLD BANK) AN D OUR COMMENTS VIDE OUR TLX DD 7.8.1988, JE FURTHER COMMENTS ON THIS REPORT AS FOLLOUS.
The Audit's findingel. THE OED REPORT IS BASED ON CONCLUSIONS MADE BY DHV IN THEIR FIRS are based on severalT reports prepared over a number of DRAFT REPORT ON UHICH THE TDA HAS ALREADY FORUARDED COMMENTS VIDE years by different ETTER NO. 848/88 groups with differen TR DD 26.5.1988 AS WELL AS TLX NO. 138 DD 26.5.1988, perspectives. The IN THIS TLX, UNDER PARA 7, IT UAS CLEARLY STATED THAT DHI'S DerV analysis is CONCLUSIONS ARE SUBJECTIVE merely the mostM BECAUSE THEY ARE BASED ON WEAK ASSUMPTION recent and most S comprehensive. AND UNRELAIABLE DATA. THEY SHOULD BE CONSIDERED VERY CRITICALLY. THEIR CONCLUSIONS ON WADI DEVELOPMENT HAVE TO BE COMPLETELY REJECTED W - 49 - Page 5 of 8
See footnote 40 2. THE TDA IS NOT CONVINCED THAT GROUNDWATER FOR IRRIGATION IS in the Audit Report CHEAPER THAN SURFACE WATER. PLS, REFER TO PARA 8 OF TDA'S ABOVE and footnote 3 of Attachment II. MENTIONED LETTER. FOR THIS REASON7 WE DO NOT AGREE TO THE STATEMENT OF OED REPORT THAT FARMER POSITIONED NEAR THE WEIR WILL HAVE ACCES3 TO SOME OF THE LOWEST COST GROUNDWATER.
3. THE TDA DO NOT AGREE THAT CONSTRUCTION AND OPERATION OS IRRIGATI ON WELLS IN UPPER PART OF TIHAMA PLAIN IS CHEAPER THEN IN LOWER PART. ALL COST EFFECTING FACTORS LISTED BELOW ARE AGAINST PUMP IRRIGATION IN UPPER AREAS. This is a useful qualification of the Audit statement FACTORS UPPER TIHAMA PLAIN LOWER TIHAMA PLAIN in para. 59.
1. SUB-SURFACE GEOLOGY OLDER ALLUVIUM, YOUNGER ALLUVIUM7 BEDROCK, GENERALLY, GENERALLY UNCONSOL- CONSOLIDATED AND IDATED AND CEMENTED UNCEMENTED 2. DRILABILITY LOW HIGH 3. AVERAGE WATER LEVEL 55M 40M 4. AVERAGE DEPTH OF WELL 80M 60M 5. AVERAGE PUMPING LIFT 65M 50M 6. ENGIN BHP FOR 12.5 E/S CAPACITY WELL 23BHP 15BHP 7. COST OF WELL AND EQUIPMENTS MORE LESS 8. COST OF OPERATION MORE LESS
This does not 4. ACCORDING TO EXISTING SHARE-CROPPING PRACTICES7 FARMERS ASSOCIA explain the shift TED from wadi to pump irrigation. WITH WELL IRRIGATION GET 25 0/0 OF PRODUCTION, WHILE WITH WADI IRRIGATION 33 0/0, WHICH INCREASES TO 50 0/0 IN STATE OWNED LANDS. I N MIXED IRRIGATION AREAS, IF THE FARMER RECEIVES TWO OR MORE FLOODS, THE PUMP OWNERS SHARE IS REDUCED TO ZERO, WHILE THAT OF THE FARMER I S - 50 - ATTACHMENT I Page 6 of 8
INCREASED TO 50 0/0 OF THE PRODUCTION. FINANCIALLY7 THEREFORE, UADI IRRIGATION IS MORE ATTRACTIVE TO THE FARMER THAN UELL IRRIGATION.
5.THE TDA DOES NOT AGREE TO MATER-USE EFFICIENCES CALCULATED BY THE
DHV AND PRESENTED ON PAGE 21 OF THE REPORT BEING COMMENTED 0. FIRSTLY, THE AREA OF MIXED (MADI + ELLS) IRRIGATION HAS NOT BEEN IDENTIFIED AND ACCOUNTED FOR. SECONDLY, THE RATE OF PRODUCTION AND UATER-USE EFFICIENCY OF RAINFED AREA HAVE BEEN OVERESTIMATED. DURING
THE LAST FIVE YEARS OF DROUGHT SPELL, VERY LOU PRODUCTION UAS ACHIEVED IN RAINFED AREAS. COMMENTS ON UATER-USE EFFICIENCY METHODOLOGY ADOPTED BY DHV HAVE ALREADY BEEN MENTIONED BY TDA IN THE
ABOVE REFERRED LETTER. THE BREAKUP OF UADI RIMA PROJECT AREA IS GIVE N BELOU :
TYTYPE TDA DHV (1979)
The Audit's positionUELL IRRIGATION 3500 HA 3750 HA is based not only SPATE IRRIGATION (REGULAR) 3200 HA on the DHV report but also the Dec. SPATE IRRIGATION (IRREGULAR) 4000 HA )8000 HA 1985 and Nov. 1986 Pr8c cndNovpletio MIXED IRRIGATION 3000 HA Project Completion = = Report prepared RAINFED AGRICULTURE 1168 HA = = by TDA.
THE DHV'S PRESENT REPORT DOES NOT GIVE BREAKUP OF UADI RIMA AREA. THEIR FINAL REPORT IS EXPECTED TO PROVIDE THIS INFORMATION.
6. THE PRICE OF UADI IRRIGATION LANDS, AFTER COMMISSIONING OF THE N EU IRRIGATIOIN SYSTEMS, HAS INCREASED UPTO 800 0/0 OF PRE-DEVELOPMENT PRICE. - 51 - ATTACHMN L Page 7 of 8
7. ADVANTAGES OF MODERN WADI DEVELOPMENT OVER THE TRADITIONAL ONE A RE MENTIONED IN TDA'S ABOVE REFERRED LETTER.
8. THE IMPLEMENTATION OF AGRICULTURAL DEVELOPMENT PROJECTS IN THE TIHAMA PLAINS AS WELL AS IN OTHER PARTS OF THE COUNTRY HAS ENCOURAGE The Audit notes D that most of the THE GOVERNMENT TO STOP IMPORTATION OF FRUITS AND DEPEND UPON LOCAL fruit and vegatables are grown on vell- PRODUCTION. THIS EVIDENCE FAVOURS GOVERNMENT DECISION OF DEVELOPMENT irrigated land. SCHEMES. FOR EXAMPLE THE AREA UNDER BANANA PLANTATION HAS INCREASED DUE TO INCREASED RELIABLITY OF SPATE WATER.
9. THE TDA DOES NOT ACCEPT CERTAIN ASSUMPTIONS ADOPTED BY DHV FOR ESTIMATION OF COST OF IRRIGATION WATERS. FOR INSTANCE :- (1)AVERAGE DISCHARGE OF A WELL IS ASSUMED CONSTANT OVER ITS LIFE SPA N OF 17 YEARS. FIRSTLY, THE LIFE OF A WELL IN THE TIHAMA ENVIRONMENT HAS BEN OVERESTIMATED. SECONDLY, THE FACT THAT THE WELL EFFICIENCY/OUT PUT DECREASES, CONSIDERABLY, WITH THE PASSAGE OF TIME
I HAS NOT BEl GIVEN DUE CONSIDERATION. (2) COST OF PUMPING EQUIPMENT HAS BEEN UNDER ESTIMATED. (3) COST OF PUMP HOUSE AND WATER CONVEYENCE FROM WELL HEAD TO FIELD (CANALS AND PIPES) HAS NOT BEEN ACCOUNTED FOR IN THE CALCULATIONS (4) COST OF UELL, ENGINES AND PUMP AT THE YEAR OF REPLACEMENT HAS BEEN ASSUMED TO BE THE SAME AS AT BEGINNING OF THE PROJECT. FOR EXAMPLE, DURING THE LAST FIVE YEARS PERIOD THE COST OF A TURBINE PUMPS HAS TICREASED FROM 25,000/ TO 85,000/ Y.RIALS. ATTACHMENT I - 52 - Page 8 of 8
This does not (5)COST OF PUMPED VATER HAS BEEN CALCULATED ON PRESENT VALUE (PV) square with the BASIS, UHEREAS THE COST OF CANAL VATER HAS BEEN CALCULATED, ON ACTUA massive shift from vadi to pump irrigation in YEARLY INVESTMENTS SAME CRITERIA SHOULD HAVE BEEN USED. the last fifteen (6)COST OF CONSTRUCTION OF MODERN UADI IRRIGATION HAS INCREASED years. Clearly, BY there are important USING RATE OF EXCHANGE OF YRLS 10/ = 1 USDLR AS COMPARED TO YRLS qualitative 4.575/USDLR, AT UNICH RATE PAYMENT UAS ACTUALLY MADE TO THE differences between uncontrolled CONTRACTOR. spate water and (7) ACCORDING TO TDA'S ASESSMENT, UADI UATER IS CHEAPER THAN PUMPED controlled well water. See para. NATER. A COMPARATIVE STATEMENT IS GIVEN BELOU. THE COST IS EXPRESSFD 61 of the Audit Report. IN YEMENI RTIALS PER CUBIC METER OF UATER.
SOURCE OF MATER TDA DHV
UELL 0.70 0.41 UADI 0.20 1.00
IT MAY BE POINTED OUT THAT SITUATION FOR 27 METER DEEP HIGH CAPACIT Y DRILLED IRRIGATION UELLS IS EXTREMELY RARE IN THE AREA. AQUIFER LEVE L IN MOST OF THE AREA IS MORE THAN 35 METERS BELOU GROUND SURFACE. THE
DHV'S SUGGESTED AVERAGE COST OF PUMPED UATER OF YRO.40/03 (ANNEX 6, UATER RESOURCE MANAGEMENT) IS BASED ON 12.5 E/S DISCHARGE, 20 METER PUMPING VATER LEVEL AND 27 METER TOTAL DEEPTH. THESE ASSUMPTIONS AND
GENERALIZATIONS ARE NOT APPLICABLE TO UADI RIMA AREA, UNERE PUMPING MATER LEVEL, GENERALLY EXCEEDS 50 METER.
BEST REGARDS.
E.A.ALDOUMI CHAIRMAN
5673 ALHAIA YE 248423 UORLDBANK 5673 ALHAIA YE - 53 - ATTACHMENT I Page 1 of 4
COMMENTS FROM THE REGION
1. Wadi Water vs. Groundwater: The basic problem in the Audit's analysis of the two is the lack of full appreciation of the wadi irrigation techniques and the dependence of the groundwater recharge on the wadi water distribution. Wadi diversion structures, conveyance and distribution systems, wadi controls and regulation are quite different from the traditional canal irrigation systems elsewhere which deliver irrigation water from perennial sources e.g. large rivers with continuous flow or from storage reservoirs. The regimen of the two are extremely different. The sporadic nature of the short time based high peak floods in the Tihama wadis require that all available flows be controlled to the possible extent by retaining them at the desired locations in the Tibama area for making the best use of the directly available surface water and recharging the aquifer for year round groundwater irrigation./1
2. Groundwater irrigations The shallow aquifer used for pumped irrigation in the Tihama area is charged mostly by the surface water diverted for wadi irrigation and to some extent from wadi bed seepage. To reduce pumping costs, the farmers make every possible effort and are successful most of the time to bring spate water to the lands irrigated by well water. The benefits from areas where the farmers have dug wells or tubewells can not be fully attributed to the groundwater as surface water is also used in those areas for direct irrigation, as available, and for recharging the aquifer. One of the main functions of the wadi water development schemes is to divert water to those areas where in addition to the surface irrigation, seepage into the soil would contribute to the aquifer recharge./A
3. The basis used for evaluating the costs and benefits of the wadi flow and the groundwater in the water resources study of the Tihama basis and unconditionally accepted by the Audit in para. 52 of the audit report are questionable, (a). The average pumping lift of 20 meters does not appear to be correct. Sustainable lift under continuous pumping would be more than 30 meters and increasing further due to the prevalent overpumping; (b) benefits of the permanent structures in saving cost of construction of the seasonal temporary diversion devices, which could be substantial, should have been taken in to consideration; (c) contribution made by the wadi diversion in improving shallow aquifer in areas suitable for agriculture should have been evaluated. There are positive indications that this phenomenon is taking place gradually; and (d) it is not clear from the analysis whether benefits attributable to wadi irrigation include large production of sorghum and maize which is out for fodder and not accounted for in grain production. All these
11 The Audit went to considerable pains to point out the special characteristics of wadi irrigation. See especially paras 3, 10, 11, 12, 13 and footnote 16 of the Audit Report.
12 The Audit concurs with the statement. - 54 - ATTACHMENT II Page 2 of 4 factors, if considered, might tilt the balance in tavor of the wadi control and diversion structures./3 4. Rainfed Agriculture: More than 902 of agriculture in TAR is rainfed. The Yemenis are improving yields and production by adopting modern practices in areas when rainfall is considerable or where there is no alternative source of water. Bank financed projects in the southern, central and the northern regions of YAR are designed to provide technical assistance to improved rainfed agriculture. Since most of the Tihama area receives less than 250 mm of rainfall annually, it can not support agriculture for which other available sources of water should be exploited.
5. Permanent Wadi Diversion Structures: The audit's contention that wadi diversion structures should not have been constructed is not tenable. In an area where (a) water is scarce; (b) aquifer is being overexploited to the extent that water table is continuously declining and water quality is deteriorating; (c) thexe is coastal discharge of over 200 million cubic meters of water annually, mostly through Tihama subsoil and (d) wadi water is the only source of recharge of the aquifer, there is no alternat've but to manage the wadi water for its maximum utilizing through direct irrigation or through recharge of the aquifer at the desired locations./A
/3 The statement in paragraph 52 of the Audit Report is conditioned by footnote 40 which indicates that the current marginal cost of spate water are less than current fully distributed water costs. If completed investments are considered as "sunk" than spate water is currently less costly than groundwater. However, the Audit's position does not rest solely on the DHV analysis or the relative costs of water from the two technologies. Rather, it is based on an assessment of the numerous cost and benefit analyses associated with the project and the broader view that groundwater drawn from an aquifer-reservoir is a different, more controlled, more dependable and more efficient source of plant moisture in the Tihama. It has, spontaneously, become the privately-financed technology of choice and actually produces most of the high value fruit and vegetables in the Tihama. The erratic surface spate flows are provided at public expense and are used mainly for flood irrigation of low value grain and fodder crops.
/4 The Audit accepts the need to manage surface water and to promote recharge of the aquifer. This was accomplished at little cost under the old system of temporary structures. Very little water flowed to the sea under the old regime except for deep aquifer flows. It is the use of costly permanent structures that redistribute water to upstream users that is questioned and was questioned at the outset by the ODM report, among others. A:LALnMRi. 11 Page 3 of 4 - 55-
6. The concept of "simple low cost masonary weirs" though mentioned at several places and supported by the Audit has not been fully explained. Does it mean brick masonry, stone masonry or concrete block masonary. None of these would be low cost permanent water diversion structures. The gabion structures were given a fair trial but were ruled out because these failed to test in the field./15
7. The old practice of constructing temporary dikes across the wadis and the primitive diversion and water conveyance system needed improvement to (a) efficiently regulated spate flow, (b) eliminate losses to the infrastructure and the crops due to frequent failures of these structures during the irrigation season and (c) divert wadi flow in the upper reaches of the streams to irrigate more productive lands and recharge the aquifer at the desired locations for more efficient use of the groundwater. The design of the Tihama development projects has evolved over a period of 15 years starting with the development of wadi Zabid in 1973, Wadi Rima in 1979 and Wadi Mawr in 1978. These designs were discussed and debated at those time and the most appropriate decision taken as justified by the data, information and the analyses available and the relevant Bank assistance strategies. In retrospect, some of the decisions might appear to be not the best but what is important is to see whether lessons were drawn from the previous projects and applied in the design of the subsequent projects. As acknowledged in the PPAR -" the fact that the surface water irrigation component has become a theme elsewhere is encouraging", it is clear that the evolution of the Tihama development design has gone through its normal course and is heading in the right direction.16
15 The Audit does not support the concept of "simple low-cost masonary weirs". It merely points out that the assumption by engineers that such a thing was possible was responsible for the inappropriate design of the Wadi Zabid scheme (see paras. 11, 12, 13 and 22 of the Audit Report). When it became cleav that low cost permanent structures were not feasible (see paras. 25, 26, 29 of the Audit Report), the Wadi Rima project went ahead with a high cost permanent weir that was not economically justified (see paras. 31 and 33 of the Audit Report).
At The Audit is critical of the permanent weir technology adopted precisely because there was no debate over the economics or the equity implications of such a choice. It was a decision based on the desire to have so-called permanent structures for which a retroactive economic analysis was prepared that excluded the possible uses of groundwater and temporary structures and ignored the equity issues. Even the gabion designs were judged on their permanence rather than their flexibility, potential low cost, and possible improvement of traditional temporary structures. ATTACHMENT II Page 4 of 4
- 56 -
8. Tihama vs. Wadi Beihan: As was also pointed out previously, Wadi Beihan in PDRY has little relevance to the Tihama conditions. Wadi Belhan is a closed end system and most of the seepage from spates enters the aquifer which is subsequently pumped out for irrigation. Concerning the maintenance of temporary spate diversion works, reportedly, the project is already facing problems in restoring the works after the spates. It may be mentioned here that the engineer appraising the Tihama development was the same who appraised the Wadi Beihan project. So, the solutions adopted by him should apply appropriately, in his view to the specific conditions of the two cases./Z
/7 The Audit disagrees that the Wadi Beihan experience is not relevant for Wadi Rima and others. All of the -ihama wadis are nearly closed end systems except for the deep aquifer flow into the sea and share the common characteristics of uncontrolled spate, and groundwater potential related to surface recharge. The "problem" of restoring temporary weirs after spate damage is both manageable and low cost compared to the problems and costs generated by constructing, maintaining and operating permanent structures in the wadis. -57 -ATTACHMENT III Page 1 of 1
COMMENTS FROM THE ROYAL NETHERLANDS EMBASSY - SANAA
FROM: ROYAL NETHERLANDS EMBASSY, SANA'A, YAR TO : VORLD BANK ATTN: MR. GRAHAM DONALDSON ACTING DIRECTOR, OPERATIONS EVALUATION DEPARTMENT INTBAFRAD
RE. YR TLX OF 050888
UE HAD HOPED TO SUBMIT DETAILED COMMENTS, BUT LACK OF TIME PREVENTED US FROM DOING SO. THE DRAFT REPORT IS A GOOD PIECE OF ANALYSIS. UE AGREE UITH THE GENERAL LINES OF ARGUMENTATION, AS UELL AS VITH THE CON- CLUSIONS. ALSO, THE DISCUSSIONS UITH IJZERMANS BY UB-STAFF ARE DULY AND CORRECTLY REFLECTED.
REGARDS J.J. UIJENBERG AMBASSADOR,
SANA'A, 7.8.1988
2429 NEDENB YE
006876 0923 070888 01710171 223
=08070921
NNNN
UORLDSANK TMSS UORLDBANK THSS 58 - ATTACHMENT IV Page 1 of 1 ZCZC M3AP1082 JUS0121 EM3AG EM3CO REF : TCP HC
* EM3A6 *
JUS0121 ZJO871 IN 11/06:49 OUT 11/06:55 ALSUNDUK
REF: KF/GEN/1805 11.9.1988 FROM : KUUAIT FUND FOR ARAB ECONOMIC DEVELOPMENT, KUUAIT (REPLY TO 22025 ALSUNDUK OR 22613 KFAED KT) TO : IDA - VASHINSTON D.C., U.S.A.
ATTN : MR. P. GARS 7 CHIEF, AGR./DIV. ENENA III MR. GRAHAM DONALDSON, A/CHIEF, OPERATION EVL. DEPT. COPY TO :1. MR. E.A. ALDOUNI CHAIRMAN, T.D.A., HODEIDAN, Y.A.R. 2. H.E. THE DEPUTY PRIME MINISTER, MINISTER OF DEVELOPMENT AND CHAIRMAN C.P.O., SANA'A Y.A.R. 3. N.E. THE MINISTER OF AGRICULTURE AND FISHERIES RESOURCES SANA'A - Y.A.R. ME REGRET THAT ME HAVE BEEN UNABLE TO COMMENT EARLIER ON 'THE PROJECT PERFORMANCE AUDIT REPORT" ENCLOSED UITH YOUR LETTER OF 20TH JUNE 1988 DUE MAINLY TO ABSENCE OF STAFF CONCERNED DURING SUMMER VACATION. HOMEVER, THE COMMENTS MADE BY TDA IN ITS TELEXES OF 7TH AND ISTH AUGUST 1988 REGARDING USE OF GROUNDUATER VIS-A-VIS SURFACE MATER SOUND CONVINCING AND SHOULD THEREFORE BE DISCUSSED UITH ALL CONCERNED. AS VE HAVE POINTED OUT IN EARLIER CORRESPONDENCE THE EXTENSIVE USE OF GROUND UATER SEEMS TO BE LEADING TO ADVERSE EFFECT. ON SOME OF THE AQUIFERS IN THE AREA AND BURDEN THE FARMERS VITH OPERATION AND MAINTENANCE PROBLEMS. JE ALSO NOTE MITH SURPRISE THE VAST DIFFERENCE BETUEEN THE ESTIMATED COST OF GROUND MATER AND SURFACE MATER FOR IRRIGATION PURPOSES AE CALCULATED BY TDA AND THE CONSULTANTS. AS THE CONSULTANTS REPORT UILL HAVE A MAJOR IMPACT ON THE DEVELOPMENT OF TIHANA PLAN, VE SUGGEST THAT THOROUGH INVESTIGATION OF THE BASES OF THE CONSULTANTS FINDINGS SHOJLD BE RECONSIDERED IN THE LIGHT OF TDA'S COMMENTS BEFORE INCLUDING THEN IN YOUR REPORT. BEST REGARDS HISHAM AL-UO0AYAN DIRECTOR OF OPERATIONS IBRD 20964 0 43 440 YEMEN AR 'S REPUBLIC
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