Document of the World Bank Public Disclosure Authorized Report No: ICR0000998

Document of The World Bank Public Disclosure Authorized Report No: ICR0000998

IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-72770)

ON A

Public Disclosure Authorized LOAN

IN THE AMOUNT OF ¥ 13,107.5 MILLION (US$ 123.0 MILLION EQUIVALENT)

TO THE

ISLAMIC REPUBLIC OF PAKISTAN

FOR A

TAUNSA BARRAGE EMERGENCY REHABILITATION AND MODERNIZATION Public Disclosure Authorized PROJECT

JUNE 1, 2010

Sustainable Development Department Agriculture and Rural Development Unit South Asia Region Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective June 1, 2010)

Currency Unit = Pakistan Rupee (Rs) Rs 1.00 = US$ 0.012 US$ 1.00 = Rs 84.71 US$ 1.00 = ¥ 91.16

FISCAL YEAR July1 – June 30

ABBREVIATIONS AND ACRONYMS

CAS Country Assistance Strategy NCB National Competitive Bidding CO Community Organization NS National Shopping CCA Canal Command Area O & M Operation and Maintenance ECNEC Executive Committee of National OMS Operation, Maintenance & Economic Council Surveillance EIA Environmental Impact Assessment PAPs Project Affected Persons EIRR Economic Internal Rate of Return PBC Punjab Barrage Consultants EMMP Environment Management and PC-1 Planning Commission Pro-Forma Monitoring Plan 1 EPD Environment Protection PDO Project Development Objective Department GDP Gross Domestic Product P&D Planning and Development GOP Government of Pakistan PMO Project Management Office GOPunjab Government of Punjab POE Panel of Experts IA Implementing Agency PRSP Punjab Rural Support Program IBRD International Bank for PSC Project Steering Committee Reconstruction & Development ICB International Competitive Bidding PWD Punjab Wildlife Department IPD Irrigation & Power Department RAP Resettlement Action Plan IRSA Indus River System Authority SOE Statement of Expenditure JICA Japan International Cooperation WWF World Wide Fund for Nature Agency M & E Monitoring and Evaluation

Vice President: Isabel M. Guerrero Country Director: Yusupha B. Crookes Sector Manager: Simeon Kacou Ehui Project Team Leader: Xiaokai Li ICR Team Leader: Winston Yu PAKISTAN Taunsa Barrage Emergency Rehabilitation and Modernization Project

CONTENTS

DATA SHEET A. Basic Information...... i B. Key Dates ...... i C. Ratings Summary ...... i D. Sector and Theme Codes...... ii E. Bank Staff...... ii F. Results Framework Analysis ...... ii G. Ratings of Project Performance in ISRs ...... iv H. Restructuring (if any)...... iv I. Disbursement Profile ...... v

1. Project Context, Development Objectives and Design...... 1 2. Key Factors Affecting Implementation and Outcomes ...... 4 3. Assessment of Outcomes ...... 10 4. Assessment of Risk to Development Outcome...... 14 5. Assessment of Bank and Borrower Performance ...... 14 6. Lessons Learned...... 16 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners...... 17

Annex 1. Project Costs and Financing...... 18 Annex 2. Outputs by Component...... 19 Annex 3. Economic and Financial Analysis ...... 24 Annex 4. Bank Lending and Implementation Support/Supervision Processes...... 31 Annex 5. Summary of Borrower’s ICR and/or Comments on Draft ICR ...... 32 Annex 6. Comments of Cofinanciers and Other Partners/Stakeholders...... 49 Annex 7. List of Supporting Documents ...... 50 Annex 8. Environment Management ...... 52 Annex 9. Implementation of the Resettlement Action Plan ...... 58

MAP IBRD A. Basic Information Taunsa Barrages Emergency Country: Pakistan Project Name: Rehabilitation and Modernization Project Project ID: P088994 L/C/TF Number(s): IBRD-72770 ICR Date: 06/04/2010 ICR Type: Core ICR GOVERNMENT OF Lending Instrument: SIL Borrower: PAKISTAN Original Total USD 123.0M Disbursed Amount: USD 106.5M Commitment: Revised Amount: USD 113.6M Environmental Category: B Implementing Agencies: Irrigation & Power Dept. (IPD) Cofinanciers and Other External Partners: JICA

B. Key Dates Revised / Actual Process Date Process Original Date Date(s) Concept Review: 05/12/2004 Effectiveness: 04/12/2005 Appraisal: 09/10/2004 Restructuring(s): Approval: 03/15/2005 Mid-term Review: 03/31/2007 04/15/2007 Closing: 12/31/2008 12/31/2009

C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Satisfactory Risk to Development Outcome: Low or Negligible Bank Performance: Satisfactory Borrower Performance: Satisfactory

C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Satisfactory Government: Satisfactory Implementing Quality of Supervision: Satisfactory Satisfactory Agency/Agencies: Overall Bank Overall Borrower Satisfactory Satisfactory Performance: Performance:

i C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Rating Performance (if any) Potential Problem Project Quality at Entry No Satisfactory at any time (Yes/No): (QEA): Problem Project at any Quality of No None time (Yes/No): Supervision (QSA): DO rating before Satisfactory Closing/Inactive status:

D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Irrigation and drainage 100 100

Theme Code (as % of total Bank financing) Rural services and infrastructure 67 67 Water resource management 33 33

E. Bank Staff Positions At ICR At Approval Vice President: Isabel M. Guerrero Praful C. Patel Country Director: Yusupha B. Crookes John W. Wall Sector Manager: Simeon Kacou Ehui Adolfo Brizzi Project Team Leader: Winston Yu Xiaokai Li ICR Team Leader: Winston Yu ICR Primary Author: Winston Yu

F. Results Framework Analysis

Project Development Objectives (from Project Appraisal Document) The main objectives of the Project are: (a) to take urgent steps to prevent the failure of the Taunsa Barrage which provides irrigation for two million acres and drinking water to several million farmers in the rural areas of southern Punjab; and (b) to prepare for similar steps with respect to other existing barrages in Punjab. The objectives will be achieved through: (i) rehabilitating and strengthening the Taunsa Barrage and associated structures; (ii) renovation and modernization of gates, hoists and operating and control facilities; (iii) improving operation and maintenance capability; and (iv) rehabilitation design studies for other barrages in Punjab.

ii Revised Project Development Objectives (as approved by original approving authority) The Project Development Objectives were not revised.

(a) PDO Indicator(s)

Original Target Formally Actual Value Values (from Revised Achieved at Indicator Baseline Value approval Target Completion or documents) Values Target Years Indicator 1 : Completion of the most critical ICB I Works Contract Value Full completion of Full completion of quantitative or Contract awarded works under works under Qualitative) contract ICB 1 contract ICB 01 Date achieved 05/16/2005 06/30/2008 06/30/2008 The largest single contract pertaining to Component A was completed on time. In Comments fact, the underwater works under the contract were completed one year ahead of (incl. % schedule. The performance of the contractor in recovering from a slow start was achievement) commendable. Indicator 2 : No. of significant safety incidents at Taunsa Barrage Severe scouring and floor damage in the downstream due to Value retrogression; gate No major safety No major safety quantitative or structures in poor incidents before incidents before Qualitative) conditions; barrage end of project end of project. operated with pool levels lower than the original design level Date achieved 04/12/2005 12/31/2008 12/31/2008 Comments The envisaged project outcome indicators of: (i) not having any significant safety (incl. % incidents at Taunsa after rehabilitation; and (ii) maintenance of desired pond achievement) level upstream of the barrage have been substantially achieved. Completion of designs for rehabilitation of Jinnah and Islam barrages Indicator 3 : rehabilitation Completion of technical designs for the No exisiting rehabilitation two barrages designs. The design Completion of Completion of (Islam and Value consultancy was included technical designs both barrage Jinnah), as quantitative or as part of the project to for the two barrages rehabilitation other funding Qualitative) prepare similar measures (Islam and Jinnah) designs entities took for two other barrages - achieved. up the designs Jinnah and Islam. of the remaining barrages. Date achieved 04/12/2005 06/30/2008 06/30/2008 12/31/2009 Comments The consultancy contract for preparing detailed designs for Islam and Jinnah (incl. % Barrage was signed in August 2007 and October 2007 respectively (against

iii achievement) original target date of October 2005).

(b) Intermediate Outcome Indicator(s)

Original Target Actual Value Formally Values (from Achieved at Indicator Baseline Value Revised approval Completion or Target Values documents) Target Years Upgrading the operation, maintenance & surveillance (OMS) Manual for Taunsa Indicator 1 : Barrage by Dec. 2007 The O&M Manual needs to be upgraded with the Completion of Value state-of-art practice in Completion of OMS (quantitative operation, maintenance OMS Manual/upgrading or Qualitative) and surveillance, Manual/upgrading achieved. financing plan and staff training plan Date achieved 04/12/2005 12/31/2007 12/31/2007 An Operation and Maintenance Manual (O&M Manual) for the barrage and sub- Comments weir including Standing Operating Procedures (SOP) for silt excluder has been (incl. % prepared. The O&M Manual has been operationalized following the training of achievement) staff.

G. Ratings of Project Performance in ISRs

Actual Date ISR No. DO IP Disbursements Archived (USD millions) 1 06/10/2005 Satisfactory Satisfactory 3.10 2 12/11/2005 Satisfactory Moderately Satisfactory 17.26 3 06/09/2006 Satisfactory Moderately Satisfactory 33.53 4 10/12/2006 Satisfactory Moderately Satisfactory 46.07 5 04/20/2007 Satisfactory Moderately Satisfactory 64.06 6 06/18/2007 Satisfactory Satisfactory 76.79 7 10/04/2007 Satisfactory Satisfactory 79.23 8 04/12/2008 Satisfactory Satisfactory 83.64 9 10/13/2008 Satisfactory Satisfactory 90.06 10 05/08/2009 Highly Satisfactory Satisfactory 105.80 11 11/28/2009 Highly Satisfactory Satisfactory 105.80

H. Restructuring (if any) Not Applicable

iv I. Disbursement Profile

v 1. Project Context, Development Objectives and Design

1.1 Context at Appraisal

Pakistan is an arid country where irrigated agriculture occupies an important place in its economy and is a major source of livelihood. The agriculture sector contributes about 25% of GDP and employs nearly 50% of the rural labor force. Around 80% of Pakistan’s arable lands and 90% of agricultural output depend on irrigation. Over 18 million ha of land in Pakistan are irrigated from the Indus River and its tributaries. Barrages in the Indus Basin are vital parts of Pakistan’s irrigation network. They divert water from the rivers into canals serving vast areas of irrigated land. Barrages also serve as road and rail bridges and crossings for oil, gas, and power transmission lines. While the newer barrages built, as a part of the Indus Basin Project in the 1960s, are in good condition, many of the older barrages in Punjab, built 50 to 100 years ago, need rehabilitation. Most of their problems stem from design and construction defects, aging and changes in hydrological conditions. Some of them require urgent remedial measures to avoid severe economic and social impacts on the lives of millions of poor farm families through interruption of irrigation on their irrigated land. The main problem encountered in many older barrages is erosion at the downstream toe, due in part to changes in river hydrology. Another problem is “piping,” that occurs when a loss of integrity in the downstream floor causes a loss of soil from the foundation. Gates and hoists are also in most cases in need of renovation. River training works, upstream of the barrages, also need improvement. These problems are present to varying degrees of severity at all of the older barrages.

The Government of Pakistan engaged consulting firms to review the structural and hydraulic conditions of six existing barrages built between 1890 and 1958 and to prioritize their rehabilitation. The priority for rehabilitation was determined mainly by the following factors: (i) severity of the current problem; (ii) extent to which failure would cause agricultural and other economic and social losses; and (iii) difficulty that would be met in executing temporary measures to restore service. On the Indus River, in case of barrage failure, restoration of service would be more difficult than on other rivers in the Indus Basin because the Indus has a high flow throughout the year. Of the two barrages on the Indus, Taunsa Barrage was selected as the first priority barrage to be rehabilitated because it had the most serious weaknesses.

The construction of Taunsa Barrage on the River Indus was completed in 1958. The barrage diverts a part of the Indus flow to two large canal commands from the D.G. Khan and Muzaffargarh Canals with an irrigated area of some 0.8 million ha (2 million acres) and to other large areas served by the Taunsa-Panjnad Link Canal. This link canal was built in the 1960s to transfer water from the Indus to areas served by the Rivers Ravi and Sutlej that came under the control of India as per the terms of the 1960 Indus Waters Treaty.

There was clear evidence that the Taunsa Barrage was in distress due to severe erosion of the downstream floor and loss of foundation material. In the event of a major flood, the downstream floor, which was already damaged, could be undermined and could cause failure of the barrage at any time. The barrage would not then be able to maintain the water at the level needed to supply the irrigation canals to their design capacities. Moreover, floods in the Indus occur during the

1 kharif cropping season, which lasts from April to September. The flow in the river during this time would be too high for a temporary earth and rock fill dam. Therefore, in the case of barrage failure, all irrigated crops would fail because the command area receives very low rainfall. There is no way to predict with certainty when or how the Taunsa Barrage might fail. However, the operators of the barrage and the consultants were of the view that the weaknesses were so serious that failure could conceivably occur in the near future.

In response to the Government’s request for urgent action, as highlighted in the findings of feasibility studies and by the review of an independent panel of experts, the Bank decided to follow the Bank’s emergency operation procedures (OP/BP 8.50). The concept and design of the Project was developed on the basis of the findings of the consulting firms and is in line with the Bank’s Country Assistance Strategy for Pakistan that emphasizes improvements in rural infrastructure for poverty reduction and provision of reliable and safe water for domestic and productive purposes. This project is the first in a series of projects for rehabilitation and modernization of aging barrages in Punjab.

1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved)

The main objectives of the Project were: (a) to take urgent steps to prevent the failure of the Taunsa Barrage which provides irrigation for two million acres and drinking water to several million farmers in the rural areas of southern Punjab; and (b) to prepare for similar steps with respect to other existing barrages in Punjab. The objectives were to be achieved through: (i) rehabilitating and strengthening the Taunsa Barrage and associated structures; (ii) renovation and modernization of gates, hoists and operating and control facilities; (iii) improving operation and maintenance capability; and (iv) rehabilitation design studies for other barrages in Punjab.

The key outcome indicators were: (i) number of significant safety incidents; and (ii) maintaining pond level upstream of the Barrage to original design level to enable supplies to both canals off- taking from the Barrage.

1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification

The original PDO and key indicators remained relevant and were not revised.

1.4 Main Beneficiaries

The main beneficiaries are some 6 million people who depend on irrigation water obtained through the Taunsa Barrage for their livelihood. They are farmers and residents of the command areas of the Muzaffargarh and Dera Ghazi Khan Canals and those of the Panjnad Headworks canals whose supplies are supplemented by the Taunsa-Panjnad Link Canal off-taking from the Taunsa Barrage. Other beneficiaries from the rehabilitation of the barrage include the population who use the services of the oil and gas pipelines, telephone lines, and the inter-provincial rail and road links passing through the Barrage, and, on average, about 2,000 skilled and unskilled workers employed daily by the contractors, which include members of some 160 households who were displaced due to construction activities.

2 1.5 Original Components

The original components are:

Component A. Rehabilitation and Strengthening Works: The main works include: (a) construction of a 4,300 ft long subsidiary weir located about 1,000 ft downstream of the barrage to raise the tail water level and ensure proper energy dissipation; (b) repair of the barrage floor by removal of weak concrete and replacement with a new layer of concrete, and grouting to seal joints and fill voids in the foundation; (c) a silt excluder at the canal intake on the right bank; and (d) upgrading the internal monitoring system of the barrage structure. This will lead to a secure barrage structure with effective energy dissipation and a functional monitoring and flow measurement system1. The operating manual will be improved and brought up to date.

Component B. Renovation of Gates and Hoists and Strengthening O & M Facilities: This involves: (i) renovation of all the barrage gates and hoists and improvement in the operating and control system for the barrage and canal head-works, including necessary facilities to enhance the flow measurement in existence; and (ii) procurement of necessary equipment for operation and maintenance. This component will lead to upgrading of the operating facilities with higher level of automation through remote control and operation & maintenance equipment.

Component C. Consulting Services and Implementation Support: This component covers: (i) consulting services for construction supervision at Taunsa Barrage; (ii) consulting services for preparation of designs for other Punjab barrages; (iii) maintaining an independent panel of experts for technical design and safety review, and construction quality enhancement; and (iv) incremental administration and operating costs of the Project Management Office (PMO) and Project Steering Committee (PSC) Secretariat.

1.6 Revised Components

There has been no formal revision of Project components.

1.7 Other significant changes

The Project envisaged that Component B would be executed through a single ICB contract and funds accordingly were provided in the Loan Agreement. After Bank’s approval of the Project, however, an agreement was signed between the Governments of Pakistan and Japan on April 30, 2005 to co-finance the implementation of a part of Component B through a grant of ¥ 5,165 million. Furthermore, the Government of Japan designated the Japan International Cooperation Agency (JICA) to implement the necessary works that included the rehabilitation of 29 gates for the left half of the Barrage, superstructure of the Barrage and provision of O & M facilities. As a result, the scope of Component B funded by the Bank was accordingly reduced.

1 IRSA has installed gate opening and water level sensors at many of the barrages and canal headworks along the Indus Rivers. The discharges are derived from the water level and gate opening data that are periodically calibrated by actual flow measurements. The flow data is transmitted in real time through satellite to several hubs and is expected to be accessible soon through the internet. The installation contractor is training IRSA staff in operation of the system.

3 No resettlement associated with Component A was originally anticipated at the time of Project appraisal. However, since the encroachment of squatter communities dwelling on the land owned by the Irrigation and Power Department (IPD) at the downstream left and right guide banks of the barrage posed problems for the initiation of construction activities, the ICB-01 Contractor requested the IPD to shift them to an alternate place. As a result, these families were shifted about 0.5 km away from their previous abodes. This resulted in dissatisfaction among the Project Affected Persons (PAPs) and resultantly generated several problems and issues related to resettlement and rehabilitation of the squatters. The Government, after Bank’s clearance, prepared and implemented a comprehensive Resettlement Action Plan (RAP). As a result, 160 families (137 on left and 23 on right bank), comprising of some 900 people, have been properly resettled. The displaced families have been paid disturbance and vulnerability allowances, compensated for their lost housing, and provided with new community infrastructure comprising of a school and clinic buildings, a mosque, roads, drains, toilets and electrification services, etc. The revised Project PC-1 provided for Rs. 19.883 million to meet the RAP costs of which Rs. 14.704 million were actually spent. In addition, an amount of Rs. 17.150 million was spent on community development works through the construction contractor thus bringing the total resettlement cost to Rs. 31.855 million. An independent Panel of Social and Environmental Experts, in August 2007, reviewed the RAP execution and commented that “the Project was doing a reasonably commendable job on resettlement”. More details are provided in Annex 9.

2. Key Factors Affecting Implementation and Outcomes

2.1 Project Preparation, Design and Quality at Entry

The Taunsa Barrage, as the studies indicated, needed to be repaired urgently. In response to the Government’s request for urgent action, the Bank decided to follow the emergency operations procedures (OP/BP 8.50) to prepare the Project. The Project incorporated into its design the lessons learned from other emergency operations financed by the Bank, in and outside Pakistan. The lessons include: (i) emergency loans should be simple in design and consistent with the Borrower’s institutional capacity to prepare and implement projects, and they should have no policy reforms or similar conditions for disbursement; (ii) the speed of appraisal and implementation is critical to project success; and (iii) procurement process for key contracts should start early to ensure a quick project startup. This Project was processed quickly and approved within 10 months of its concept review and within 6 months of appraisal. The Project became effective in less than a month after appraisal. Moreover, the main construction contract was ready to start at the time of the Project’s approval by the Bank’s Board.

The Government’s commitment to the Project has been strong from the beginning. Various critical tasks that were necessary for getting the Project in a state of readiness for implementation were accomplished before appraisal. These included: (i) establishment of a Project Management Office (PMO), headed by a Project Director and manned by qualified professionals; (ii) completion of the feasibility study and draft PC-1 as well as an Environmental Impact Assessment (EIA) and its clearance by the Environment Protection Department (EPD); (iii) appointment and convening of first meeting of the Panel of Experts (POE); (iv) prequalification of contractors for the major works contract (Component A); (v) preparation

4 of draft bidding documents for the first ICB works contract; and (vi) seeking, by the Irrigation and Power Department (IPD), a no objection from the Bank to awarding the construction supervision contract to the consultants who had prepared the feasibility and design. The Government, like the Bank, took speedy actions to complete the various requisite steps for project preparation.

The Project authorities’ initial interaction with the local communities residing in the vicinity of the Taunsa Barrage and the farmers in the D.G. Khan and Muzaffargarh Canal command areas was, however, minimal. It was for this reason that the assessment of risk related to the possibility of extended canal closures at the time of project appraisal was overly optimistic and the mitigation measures conceived were originally inadequate. More careful construction planning, inclusion in the Environmental Management and Monitoring Plan (EMMP) of the construction of a feeder channel for emergency water supply to canal command areas and preparation of a well-perceived communication strategy early on would have helped reduce the duration of canal closures and raise the awareness amongst farmers about such closures. The EMMP also could not anticipate the need for a Resettlement Action Plan (RAP) which had to be prepared subsequently during the implementation of the Project.

2.2 Implementation

There were no changes or restructuring done during the implementation of the Project. The Project was never at risk status. The Project has successfully implemented all three original components. The largest single contract, ICB-01, pertaining to Component A - Rehabilitation and Strengthening Works - was completed on time. In fact, the underwater works under the contract were completed one year ahead of schedule. The performance of the contractor in recovering from a slow initial start was commendable. The implementation readiness at the project start as a result of the Government and the Bank teams working seamlessly together during project preparation was critical to the completion of these project works.

Construction work plans of the ICB-01 contractor did not, however, aim at ensuring minimum canal closures. The result was that the canals remained closed for extended periods causing distress, particularly to a part of the D.G. Khan Canal command area during the rabi cropping season of 2005-06. Also, the PMO did not prepare and implement a proper communications strategy to inform farmers in the D.G. Khan and Muzaffargarh Canal commands ahead of time about the canal closures so that they could adjust agricultural operations and arrange for alternate supplies of irrigation water. It is worth noting, however, that proper construction plans and effective communication programs in the second and third construction seasons resulted in shorter closures and better awareness among farmers.

A pro-poor assistance program was developed and implemented by Punjab Rural Support Program (PRSP) following these extended canal closures. The program included the provision of quality wheat seed at subsidized rates, installation of hand pumps for drinking water supply, social mobilization of local communities, construction of community infrastructure, and provision of microcredit and skills training. The program had a very positive impact in the areas affected by the prolonged canal closures.

5 Award of the ICB-02 contract pertaining to a part of Component B – Renovation of Gates and Hoists and Strengthening of O&M facilities - was delayed considerably. Bid submissions took place in January 2006 and the contractor started work in October 2006. Despite this, the works under the contract were completed during the project period due to close supervision of the PMO and the supervision consultants. The introduction of a JICA grant after Bank approval of the Project also added new challenges to the implementation arrangements for the remaining part of Component B comprising of electro-mechanical works. However, well coordinated teamwork of different parties under the strong leadership and effective coordination of IPD and PMO led to the successful completion of all elements of Component B before the loan closing date.

The four subcomponents of Component C (Consulting Services and Implementation Support) were also implemented satisfactorily: (i) consultants for construction supervision at Taunsa barrage were hired timely and they performed their functions satisfactorily, (ii) despite long delays in the procurement of the consultancy services for the Jinnah and Islam Barrages, all work assigned was completed except the preparation of bidding documents for the two barrages, (iii) independent panels of experts hired on three different occasions during the project period carried out reviews of engineering works as well as the social and environmental aspects of the Project and offered valuable advice, and (iv) the PMO and the PSC secretariat were maintained and performed their functions well.

The scope of the Bank-funded Component B reduced because of the JICA grant taking up a part of the works. The actual cost of this Component was thus about 35% less than the appraisal estimates. The costs of Component A increased by about 38% due mainly to significant increases in construction material prices on the world market at the time of bidding, variation orders and contractual claims and the costs of unanticipated resettlement. Nevertheless, the overall project costs have remained within appraisal estimates.

The Government provided adequate counterpart funds throughout the project period which helped in the timely execution of works. The Project team made use of the mid-term review to reassess the relevance and feasibility of achieving project development objectives and to build on the first two years’ implementation experiences to effectively address emerging issues.

A review by the Quality Assurance Group (QAG) for Supervision in 2006 rated the performance of project implementation and supervision satisfactory and provided useful recommendations to enhance project performance.

Project Cost and Financing: At the revised loan closing date of December 31, 2009, the actual project cost was USD 126.6 million, which represents about 94.3 % of the cost estimated at appraisal. Although there was a nominal saving of USD 7.7 million (see table below), the actual total cost, taking into account the cost of JICA works, was much higher. The overall high cost is due to the following reasons: (i) significant increases in construction material prices on the world market at the time of bidding for the main contracts; (ii) changes in the scope of Component B funded by the Bank; (iii) variation orders and contractual claims related to the two ICB works contracts under Components A and B; and (iv) unanticipated costs on resettlement. The nominal saving, on the other hand, is due to: (i) reduced cost of Component B because of JICA funding; and (ii) less actual cost of consulting services. The total saving amounting to 1 billion yen

6 (almost USD 10 million) was cancelled December 2008. The table below provides a summary of the costs by source of funds. Further details can be found in Annex 1.

Source of Fund Appraisal Actual/Latest Percentage of Estimates Estimates Appraisal Borrower 11.3 13.0 115.0

International Bank for 123.0 113.6 94.2 Reconstruction and Development Total 134.3 126.6 94.3

2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization

Due to the single spot nature of the Project, a simple set of performance indicators was used. These included input indicators, output indicators and outcome/impact indicators. The two outcome/impact indicators were: (i) number of significant safety incidents at Taunsa; and (ii) pond level maintained upstream of the barrage.

Monitoring of implementation progress was done internally as well as externally. For internal monitoring, within the PMO, a Deputy Director collected and collated information received from different functionaries and prepared a monthly progress report which was circulated within the PMO. He also prepared quarterly reports which were circulated to all concerned, including the Bank. These reports were prepared regularly, though delayed at times. A Barrages Cell and Project Steering Committee (PSC) in the P&D Department also monitored progress since they were responsible for the overall oversight of project activities. Externally, monitoring and evaluation was done primarily by the supervision consultants who prepared their own quarterly progress reports, which were circulated widely. Quality Assessment Reports were also prepared periodically. The Bank’s implementation review missions also contributed their share in monitoring and evaluation. In addition, an independent Panels of Experts, one member of which focused exclusively on environmental and social issues, reviewed project activities three times during the implementation of the project. An environmental audit carried out in October 2008 concluded that the Project was environmentally and socially “satisfactory”. The final resettlement implementation evaluation report prepared by the PMO in December 2009 also indicated positive outcomes.

The arrangements for monitoring and evaluation through supervision consultants worked well for monitoring implementation progress and costs and helped ensure quality of project activities. In retrospect, however, it is considered that some indicators relating to implementation of the Environmental Management and Monitoring Plan (EMMP) should have been developed and included as part of the terms of reference for the supervision consultants. Monitoring of environmental impact did not work well until later in the project period when the terms of reference and monitoring indicators for environmental and social aspects were clarified and more staff-time were provided to this function.

7 At the completion of the Project, these outcome/impact indictors showed positive results in that the safety incidents throughout the project period were insignificant and the pond level upstream was maintained at the desired level.

2.4 Safeguard and Fiduciary Compliance

The Bank safeguard policies triggered for the Project at appraisal included: (i) Environmental Assessment (OP/BP/GP 4.01); (ii) Natural Habitats (OP/BP 4.04); (iii) Safety of Dams (OP/BP 4.37); and (iv) Projects on International Waterways (OP/BP 7.50). The key safeguard issues anticipated were concerning: (i) the possible environmental and social impacts of any upstream or downstream changes to the hydrological regime once the rehabilitation was completed; and (ii) management of construction phase environmental and social impacts. An EIA was prepared and implemented, and an independent panel of experts (POE) was established to review the design, implementation progress at critical stages, and advise on the long term operation of the rehabilitated works.

Environmental Aspects: After the start of construction works at the site, a number of environmental management actions were implemented, e.g. (i) protecting the wildlife sanctuary upstream of the Taunsa barrage, (ii) protecting blind dolphins and other aquatic life at the construction area in the river and (iii) creating and maintaining a buffer zone in compliance with the EMMP. The Project engaged the World Wildlife Federation (WWF) Pakistan for preparing an environmental baseline study of the wildlife sanctuary, a Ramsar site, which was completed in August 2006. WWF-Pakistan helped carry out an analytical baseline survey and dealt with the biological and socio-economic aspects of the sanctuary. Due diligence and compliance with the EMMP during the project construction activities resulted in minimal impact on the wildlife sanctuary and blind dolphin population. Also, in order to protect the blind dolphin from the construction work area, the PMO maintained close coordination with the Punjab Wildlife, Forestry and Fisheries Department as well with other stakeholders. WWF-Pakistan also trained the contractors’ staff on rescuing blind dolphins if entangled in the construction work sites. Environmental impacts resulting from the extended canal closure during the construction period which were not anticipated at the time of the EIA study were taken care of through a Change Management Statement (CMS). An environmental audit was carried out in October 2008 to comply with the requirements of the Pakistan Environmental Protection Act 1997 and the recommendations of the POE that met in August 2007. The audit pronounced that overall the environment and social concerns were well addressed during the execution of the Project and that the Project was satisfactory in these regards. Details of the environmental aspects of the Project are available in Annex 8.

Social Aspects: Based on the lessons learnt from the 2005/2006 rabi extended canal closures which caused hardship to the residents of the D.G. Khan Canal command area, the PMO/IPD, jointly with the Punjab Barrage Consultants (PBC) and the ICB-01 contractor, went all out to optimize the construction program, in light of the water availability as predicted by the Indus River System Authority (IRSA), with the objective of minimizing further interruptions to canal operation. This plan of action was also endorsed by the independent Panel of Experts. In addition, preventive measures were taken to minimize the impacts of potential future canal closure extensions, which included: (i) a multi-media strategy and program for information

8 dissemination to the farmers and the rural residents in the Canal Command Areas (CCAs), (ii) distribution of quality wheat seed at subsidized rates, and (iii) installation of additional hand pumps and repair of the state-owned tube wells which were of critical importance and out of order. These efforts produced positive results. Despite a breach occurring in one of the cofferdams, the subsequent canal closures had minimal impact on farmers and local communities in the CCAs. The farmers in the CCAs had a good harvest of wheat crop in April 2007. Furthermore, the livelihood support and poverty reduction measures undertaken by PRSP in the command areas comprising of formation of Community Organizations (COs), provision of vocational training and micro-credit, and construction of community physical infrastructure have been very beneficial for the farming and other communities.

Involuntary resettlement and rehabilitation: The Project did not envision any resettlement activities during its preparation stage. However, early during implementation, contractors operations required that 160 families located along the left and right banks of the river needed to be resettled. Their actual relocation was rushed without adequate consultation and planning as required for compliance with the World Bank policy on involuntary resettlement. At the request and assistance of the World Bank, the Government accordingly developed a Resettlement Action Plan (RAP) that covered both the resettled and host communities. The program included compensation payment, resettlement site development, community infrastructure, house plots allocation, house construction and various assistance allowance. The government established an institutional setup to implement the RAP. With the dedicated staff and commitment to improve the situation, the PMO implemented the RAP successfully. As a result, the living conditions for the resettled households have improved. Details can be found in Annex 9.

Procurement: There has been turnover of the procurement staff at the PMO at various stages of project implementation. In addition, the PMO attempted to meet both their internal and Bank procedures for the selection of consultancy firms. This resulted in considerable delay in the entire consultancy selection process – in particular with the short-listing of firms. The consultancy contracts for Islam and Jinnah Barrages due in October 2005 were signed in August 2007 and October 2007 respectively about 24 months late. The procurement process for the selection of works went relatively smooth. ICB-02 was delayed because of complaints at the bid evaluation stage. These complaints did not cast any bearing on the initial recommendation of award, but the complaint handling and review process took some time. As opposed to the award of ICB-01 which was four months after bid opening, award of ICB-02 took nine months after bid opening. A more defined and specified complaint handling mechanism could have shortened the time to conclude the process. By the loan closing date, however, the works contracts as well as the detailed design consultancy contracts, except bidding documents, for Jinnah and Islam Barrages had been completed.

A Disputes Review Board (DRB) was established. All the disputes in ICB-01 were reviewed by a special committee constituted under the order of the Chief Minister Punjab and a package payment of Rs. 125 million for 11 disputes were agreed and implemented. However, 2 claims under the ICB-02 contract have still to pass through the DRB and whose final settlement may go well beyond the loan closing date. GoPunjab will be required to allocate funds for the payments due to the disputes/claims after the loan closing date.

9 Financial Aspects: The financial management systems and related processes provide reasonable assurance that loan proceeds were used for the intended purposes. The annual and quarterly financial reports were submitted to the Bank in a timely manner and with adequate presentation. Some staff positions remained vacant from time to time as a result of which physical verification of assets was not completed. In addition, there were audit observations which needed to be attended to.

2.5 Post-completion Operation/Next Phase

As part of various envisaged outputs, an Operation and Maintenance Manual (O&M Manual) for the barrage and sub-weir and Standing Operating Procedures (SOP) for the silt excluder have been prepared. The O&M Manual was made operational following the training of staff, including those involved in the operation of gates. PMO/IPD also prepared a post-completion operation work plan detailing transition arrangements, inputs required, budget, staffing needs, monitoring arrangements and performance indicators to monitor and evaluate the Project in the future and any follow-up required from the Bank that might contribute to sustaining benefits, including the desirability of follow-on projects. For preparing annual budgets, IPD has devised a barrage specific yardstick considering the maintenance requirements.

Prior to the rehabilitation and modernization of Taunsa barrage, its operation and maintenance activities were carried out by an irrigation district (Division) which formed part of the existing institutional architecture of IPD. Currently, the operation and maintenance activities are being performed by a set up (Division) which is part of PMO and is supervised by the Project Director, PMO. This is a stepping stone towards building the capacity of the PMO to transition to an autonomous Barrage Management Organization (BMO).

3. Assessment of Outcomes

3.1 Relevance of Objectives, Design and Implementation

The two main objectives of the Project, that is to take urgent steps to prevent the failure of the Taunsa Barrage and prepare for similar steps with respect to other existing barrages in Punjab, remain relevant to the current development priorities of Punjab. The enhancement of irrigation supplies and improvement of overall efficiency through many of its development projects including those on on-farm water management, small dam construction and micro-irrigation, remain key priorities for the Government. These activities support crop production and alleviate poverty among the farming community. The objectives are also in line with the Country Assistance Strategy (CAS), which, for the irrigation sector, supports investments in rehabilitation of critical assets (including barrages) and reforms to improve the quality, efficiency, and accountability with which irrigation services are delivered.

The Project has been suitably designed as evidenced by the timely completion of all components, with some sub-components completed even ahead of schedule and benefits already flowing to the intended communities. Enhanced discharges were witnessed in the D.G. Khan Canal and in its distributaries and minors following the rehabilitation of the Taunsa Barrage. Moreover, the implementation mechanism was well designed and helped in the timely completion of project

10 activities. A PMO, staffed with qualified and dedicated professionals, a competent expert team of supervision consultants, a qualified team of contractor engineers, the timely availability of adequate funds, and guidance from the Panels of Experts combined to help realize most of the project objectives. The O&M manual has been upgraded to operate the Taunsa Barrage. Long delays did occur (almost 2 years late) in the recruitment of the detailed design consultants for the Jinnah and Islam Barrages.

3.2 Achievement of Project Development Objectives (details in Annex 2)

All Project works have been completed - some of them well ahead of schedule. This has set a good example for well-managed construction. The project objectives of strengthening the Taunsa barrage and preparing for similar steps for other barrages (two were selected, namely Jinnah and Islam) in Punjab have been fully achieved. The major outputs of the Project are: (i) since its rehabilitation and modernization, the Taunsa Barrage has been operated safely at design level without downstream retrogression; (ii) the two canals off-taking from Taunsa barrage and supplying water to over 0.8 million ha (2 million acres) of farmland can now be supplied to their full design capacities with higher reliability and much improved management of sediment entry; (iii) the instrument monitoring system for the barrage is renovated and operational, and the operating staff equipped with an upgraded O&M Manual; (iv) detailed designs for Jinnah and Islam barrage rehabilitation prepared under the Project will lay a good ground for the preparation of the next barrage Project; (v) the barrage structure can now continue to provide the important functions of accommodating the existing rail road crossing connecting Kot Adu with Kashmore, an Arterial Road Bridge, a high pressure pipeline conveying petroleum fuels from Karachi to up- country, and a pressure (1,200 psi) gas pipe line providing up-country link for the Dhodak gas field; and (vi) the barrage will continue to facilitate a telephone line and EHV transmission line crossings, and feed the TP Link canal to supplement the supplies required at the Panjnad headworks for the Panjnad and Abbasia canal systems.

These outputs have a direct link to outcomes. The major outcomes are: (i) the D.G. Khan canal, which in the past used to draw an average historical discharge of 7,500 cusecs during the kharif season, now runs at 9,200 cusecs; and (ii) with the implementation of the Project, the canal has been able to supply an additional 146.88 million ft3 (4.16 million m3) of water to the command area during one kharif season. The impact of increased water availability on agricultural production of the canal command areas is expected to be substantial.

3.3 Efficiency

At appraisal, the Taunsa barrage was found with several structural weaknesses and an unstable hydraulic situation on the downstream floor. It was determined that if a large flood were to occur, the barrage would be at high risk of partial or complete failure. While working out the economic viability of the project, only the economic loss associated with the catastrophic scenario of the barrage was considered. The partial or complete failure of the barrage would cause a direct loss of water availability to about 1.3 million acres which could prolong over a period of more than seven years. The economic benefits were determined by primarily quantifying the avoided crop losses. The avoided non quantifiable losses due to the interruption of the existing oil and gas pipelines (providing natural gas to the 137 MW Kot Adu combined

11 cycle power plant), the road and rail connections between Punjab and Sindh and the road link between Punjab and Balochistan which have strategic importance both from the country’s defense and national integration point of view, and other services were not included but mentioned in the analysis. Thus, avoided losses were conservative. The cost for rehabilitation of the barrage was estimated at about $134 million, at appraisal.

The barrage rehabilitation costs and benefits have been updated in line with the methodology adopted at appraisal. The ex-post economic analysis is based on actual costs under the Project, and investments made by JICA and PRSP. JICA invested about US$40 million on completing a part of the Component B of the Project and the GoPunjab, under the PRSP, incurred costs on the supply of subsidized wheat seed and other infrastructure items to mitigate the effects of extended canal closure of the D.G. Khan Canal during the project period. The analysis has been done at actual costs/latest estimates incurred for completion of the project (at January 2010 price levels).

It was concluded at appraisal that the rate of return on the investment in barrage rehabilitation depended on when its failure would take place. If failure occurred five years from the appraisal, the EIRR was estimated at 42%. If failure occurred ten years from appraisal the EIRR was estimated at 17%. The ex-post economic benefit of the barrage rehabilitation is taken as the avoided crop losses assuming that the situation is set back to the level prior to the failure of barrage within a period of seven years. Using actual/latest cost estimates, the EIRR is calculated to be 21%. NPV of the project has been worked out as US$6.60 million using a discount rate of 12%. Details are given in Annex 3. This ex-post analysis confirms the findings at appraisal that the project is economically viable.

3.4 Justification of Overall Outcome Rating

Rating: Satisfactory

The Project is relevant both in terms of the development priorities of the Government of Punjab and the provisions of the Bank Country Assistance Strategy. Development of the irrigation sector in Pakistan, and particularly in Punjab which possesses the largest share of Pakistan’s irrigation system, is directly linked to poverty reduction and thus the betterment of the people. The Project Development Objective, comprising two objectives, namely strengthening of the barrage and preparing for similar steps for other barrages has been fully achieved. Works have been executed efficiently, the quality of works completed is good, the main works (ICB-01) were completed ahead of schedule, and financial discipline was satisfactory. Combining relevance, achievement of PDO and efficiency in relation to this Project, the rating for the overall outcome is assessed as satisfactory.

3.5 Overarching Themes, Other Outcomes and Impacts

(a) Poverty Impacts, Gender Aspects, and Social Development

No specific study was carried out to assess the Project impact in terms of poverty alleviation or gender aspects. However, increased supplies of irrigation water as a result of barrage rehabilitation will have a positive impact on the economic condition of the people living in the

12 canal command areas through improved agricultural performance. It has been assessed that due to the Project, in one kharif season, 146.88 million ft3 (4.16 million m3) additional water was supplied through the D.G. Khan canal. A total of 3,000,000 man days of work was also achieved under the ICB-01 contract which contributed to the economic uplift of the people living in areas surrounding the Taunsa Barrage.

Moreover, during the initial stages of project implementation, the PRSP launched a 4-year pro- poor program in the districts of D.G. Khan, Muzaffargarh, Rajanpur and Layyah. The Barrage command areas were located in the first three of these aforementioned districts. The project authorities took the initiative and approached the PRSP to launch their program in the tail end areas of the D.G. Khan Canal where farmers had suffered losses due to the extended closure of the D.G. Khan in the 2005-06 rabi crop season. The PRSP were very supportive and they launched their program in four Union Councils (UCs) of the Rajanpur district, which were indicated by the Project authorities where the farmers had suffered the most. The coverage was later expanded to 14 UCs of Rajanpur and Muzaffargarh districts and the resettled and host communities at the Taunsa Barrage, where the PRSP kept the focus and implemented their activities more intensively as compared to other UCs. By the project close, in these selected areas, PRSP had socially mobilized about ten thousand people by establishing 581 UCs; developed community physical infrastructure comprising toilets, brick pavements, drains, culverts, lining of water courses, drinking water supply schemes etc. by investing about Rs 19 million; disbursed micro-credit amounting to Rs. 31 million to 2,760 people; and provided skills training to about 5,860 people.

The GoPunjab, under the PRSP, also launched a crash assistance program in the worst affected four UCs of the Rajanpur District. The program was implemented by the PRSP in a transparent manner whereby 40,593 bags of wheat seed, each of 50 kg, were distributed among all the small farmers of these UCs, numbering 7,047. The seed was supplied at a subsidized price (50% subsidy) and the subsidy amounted to Rs. 16.237 million. A total of 252 hand pumps were also installed in the D.G. Khan and Muzaffargarh CCAs to augment drinking water supplies. These remedial measures were well received by the people, as indicated in a study titled “Impact Assessment of Remedial Measures for Extended Canal Closure” carried out in July 2007. The program of seed distribution was repeated by the PRSP on its own in November 2008 by distributing 8,880 bags of seed to 1,776 farmers at a total cost of Rs. 6.3 million.

(b) Institutional Change/Strengthening

Institution building for this Project started early in the project cycle. A skeleton Project Management Office (PMO) existed at the project preparation stage. It was later expanded and was sufficiently staffed by the time of project appraisal. The PMO is currently manned by an adequate number of qualified professionals. They, by virtue of the Project, have gained rare and invaluable experience of executing civil, mechanical and electrical constructions of a rather large project. The O&M manual for the Barrage has been upgraded and the PMO staff have been trained in operation and management of the barrage. The PMO, gradually, is expected to transition to a larger Punjab Barrages Management Organization which will be responsible for rehabilitating other barrages in Punjab. In this manner, the Project brought about significant institutional strengthening and changes within the Irrigation and Power Department of the

13 Government of Punjab. Also, provincial public sector projects normally do not give importance to social and environmental aspects. This Project was one of the few projects whereby PMO staff gained valuable experience and lessons in handling the social, environmental and resettlement issues. This will serve them well with similar future infrastructure projects.

The PRSP related activities mentioned earlier (originally not part of the Project) have yielded positive outcomes and impacts.

4. Assessment of Risk to Development Outcome

Rating: Low

The possibility of structural failure now has been eliminated with repairs to the barrage floor, rectification of downstream retrogression, barrage gates renovation with dual operating systems, and the addition of a silt excluder. Furthermore, monitoring instruments have been installed to monitor the performance of the barrage structures and its foundation. Operational staff have also been trained for operating and maintaining the remodeled barrage infrastructure in accordance with the upgraded O & M Manual.

The risk to the development outcomes is linked to the maintenance of the Barrage. IPD has prepared a post-completion O&M plan to ensure adequate inputs in the form of staffing, equipment and operational budget. For preparing annual budgets, IPD has devised a barrage specific yardstick considering the maintenance requirements. Given these adequate inputs, the risks to achieving the development outcomes are low.

5. Assessment of Bank and Borrower Performance

5.1 Bank Performance

(a) Bank Performance in Ensuring Quality at Entry

Rating: Satisfactory

At the request of GoPunjab, and being an emergency operation, the Bank acted swiftly to complete the processing of this Project. The Bank’s preparation mission visited Pakistan in June 2004 and the Project was approved by the Bank’s Board in March 2005 and became effective in April 2005. Thus the Project was processed in record time of less than one year. Quick processing could not have been possible without the strong cooperation of the GoPunjab. Various critical tasks that were necessary for getting the Project in a state of readiness for implementation were accomplished by GoPunjab before appraisal. The Bank’s performance in these regards is assessed as satisfactory. (b) Quality of Supervision

Rating: Satisfactory

The Bank remained thoroughly engaged with the Project throughout implementation. Following appraisal, the Bank fielded 10 review missions to regularly supervise and monitor the implementation progress of the Project. In addition, because of the urgency of the matter, two missions related exclusively to resettlement issues were fielded in quick succession between August and November 2005. In fact, the Bank and the PMO worked closely together to ensure timely implementation of the Project and quality assurance of its works. Because of the good rapport between the Bank and PMO, communication by phone was frequent with several audio conferences.

The Bank identified major implementation issues and discussed and agreed with the GoPunjab on time-bound action plans and monitored/advised on their implementation. The Bank promptly and favorably responded to IA’s request for approval of procurement plans, extensively advised on procurement, disbursement, and financial management issues, and approved the credit extension in a timely manner. The Bank continuously emphasized the need for preparing a communication strategy to inform farmers in the Barrage command of possible extended canal closures. Such a strategy was eventually prepared and successfully implemented.

Overarching implementation issues as well as specific procurement, financial management, environmental and social issues were expeditiously handled. The lack of a resettlement action plan at appraisal and its quick preparation and implementation when the need arose during implementation is one example of the quality and responsiveness of the supervision. The role of the Bank’s Islamabad Office in this regard has also been crucial. The quality of supervision by the Bank is assessed as satisfactory.

Rating: Satisfactory

Combining the performances during the lending and implementation phases, there is ample justification to rate the overall performance of the Bank as satisfactory.

5.2 Borrower Performance

(a) Government Performance

Rating: Satisfactory

The Borrower (the Islamic Republic of Pakistan) was involved mainly in the final clearance of the Project PC-1 by ECNEC and in liaising with the Bank in negotiating and processing the Loan. The Borrower carried out these functions and provided guidance to GoPunjab as and when needed. The Borrower’s performance is assessed as satisfactory.

(b) Implementing Agency or Agencies Performance

Rating: Satisfactory

GoPunjab was generally proactive and responsive to the variety of situational needs. Its role was praiseworthy during the preparation and appraisal stages as it complied with most of the Bank’s requirements expeditiously. For example, before appraisal, it had established the PMO, completed the feasibility study and prepared a draft PC-1 and appointed and convened the first meeting of the POE. GoPunjab also acted promptly to assist the people affected by the extended closure of the D.G. Khan canal during the rabi 2005-06 cropping season when it launched a pro- poor program in four southern districts of Punjab to provide the affected farmers with good quality wheat seed at their doorsteps and at subsidized rates.

The PMO also performed its functions efficiently. The staff in the PMO were dedicated professionals who believed in hard work. The engineers and other field specialists, including the Head of PMO, remained vigilant and spent the better part of their time at the work site which helped to resolve emerging issues in an expeditious manner. PRSP, who got associated with the Project during its implementation also performed credibly. Their role in making it possible to provide subsidized wheat seed for the 2006-07 rabi crop timely and at the doorsteps of farmers and install hand pumps for augmenting drinking water supplies was commendable and was widely appreciated. The performance of the Implementing Agencies is thus assessed as satisfactory.

Rating: Satisfactory

The performance of the Borrower and Implementing Agencies taken together justifies labeling the performance of the Borrower as satisfactory.

6. Lessons Learned

The following key lessons were learned from the Project: • A well-structured consultative process involving all stakeholders, particularly the beneficiaries, should precede project preparation. A communication strategy should be developed to keep constant liaison with all stakeholders for projects of this nature. This will minimize complaints that come forth during project implementation. • A suitably staffed PMO established before preparation/project appraisal facilitates project processing and ensures quicker start up of project activities. • An orientation/training for PMO staff and supervision consultants about World Bank policies/procedures, particularly on safeguards, at project launch will help remove impediments and improve implementation. • Approval of PC-1, EIA, and convening of POE for review of feasibility study and engineering design before Board approval enabled a quicker start of project activities. • The borrower should be adequately informed at all levels that the Bank’s procedures need to be followed for all procurements. • The contractors must build good relations with the local community to ensure smooth implementation.

16 • Detailed engineering design of Employer’s site facilities to be constructed by the contractor and location of contractor’s site facilities should be a part of the bidding documents to avoid variation orders later on and social disruption. • A Project Implementation Plan (PIP) prepared at the project preparation stage would be a very valuable guide for all project staff to avoid ad hoc planning. • Periodic review of Project activities by an independent Panel of Experts (POE) is an effective tool for taking corrective measures and ensuring quality. • Main EMMP provisions should be a part of contractor’s agreement so that the contractor is bound to comply with the provisions. • Implementation of resettlement action plan (RAP) and other project activities involving interaction with local communities should be implemented through the process of social mobilization. Involvement of adequately experienced NGOs, can provide valuable assistance. Implementing Agency (IA) role in such a case may be focused on monitoring the progress. • A sound financial management, accounting and reporting system managed by qualified staff is a key element for a smooth implementation of the project. Consideration should be given to out-sourcing certain aspects of financial management to professional firms, instead of setting up in-house systems. • A well-conceived results monitoring framework including Management Information System is needed, and a well designed and effective M & E system pays dividend in terms of timely feedback to implementing agencies and allows mid-course corrective measures. A baseline survey should be carried out before start of any physical activities. • Majority of the M&E and social and environmental staff for both consultants and PMO should be site-based

7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners

(a) Borrower/implementing agencies

None

(b) Co-financiers

None

17 Annex 1. Project Costs and Financing

(a) Project Cost by Component (in USD Million equivalent), Appraisal Actual/Latest Estimate Estimate Percentage Components (USD (USD of Appraisal millions) millions)

Rehabilitation and Strengthening 59.50 80.5 135.3 Work

Renovation of Gates and Hoists and Strengthening O & M 37.6 29.7 79.1 Facilities

Consulting Services and 8.2 5.5 66.6 Implementation Support Total Baseline Cost 105.30 115.7 109.9 Physical Contingencies 9.5 0 0.0 Price Contingencies 8.6 0 0.0 Total Project Costs 123.40 115.7 93.8

Interest During Construction (on 10.3 10.3 100.0 IBRD Loan) Front-end fee IBRD 0.6 0.6 100.0

Total Financing Required 134.30 126.6 94.3

(b) Financing Appraisal Actual/Latest Percentage Type of Co- Estimate Estimate Source of Funds of financing (USD (USD Appraisal millions) millions) Borrower 11.3 13.0 115.0 IBRD 123 113.6 92.4 TOTAL 134.3 126.6 94.3

Annex 2. Outputs by Component

The following three components were envisaged at appraisal: (A) rehabilitation and strengthening works; (B) renovation of gates and hoists and strengthening O&M facilities; and (C) consulting services and implementation support. There was no change made in the scope of the Project during implementation. However, the component B of the Project which was originally to be totally funded by the Bank was co-financed by the Government of Japan (JICA). As a result, the rehabilitation of 29 gates on the left half of the Barrage, construction of the superstructure of the Barrage, and provision of O&M facilities was carried out with the help of the Japanese grant. Works under all components were completed, a substantial part of them ahead of schedule. The outputs obtained through each of the above components are, however, discussed and detailed below:

Component A: Rehabilitation and Strengthening Works. The main works include: (a) construction of a 4,300 ft long subsidiary weir located about 1,000 ft downstream of the barrage to raise the tail water level and ensure proper energy dissipation; (b) repair of the barrage floor by removal of weak concrete and replacement with a new layer of concrete, and grouting to seal joints and fill voids in the foundation; (c) a silt excluder at the canal intake on the right bank; and (d) upgrading the internal monitoring system of the barrage structure.

The civil works under this component were intended to fix the barrage structure of the problems with energy dissipation, excessive silt entry in to D.G Khan Canal, the dysfunctional hydraulic parameter monitoring system, etc. in order to extend the life and safety of the barrage infrastructure. All these works were packaged into one ICB-01 contract which was awarded to a joint venture following the Bank’s ICB procedures. The notice to commence was issued on May 10, 2005 and the contract was signed on May 27, 2005. The contract completion period was 36 months with the completion date of May 05, 2008. The contract works mainly involved: (a) mobilization works that included the construction of contractor’s camp, workshops, site office and the Employer’s site facilities; (b) strengthening of the barrage, which included (i) the rehabilitation of downstream floor and glacis of the main weir, (ii) construction of a silt excluder for D.G. Khan Canal; (iii) remodeling of the D.G. Khan Canal Head Regulator; (iv) remodeling of fish ladders of the barrage; and (v) diversion of escape channel of D.G. Khan Canal silt ejector; and (c) the construction of a 4,346 ft long subsidiary weir, 925 ft downstream of the barrage, along with appurtenant works such as a navigation lock, two fish ladders and extension of the existing downstream guide banks. The details of the execution of works under this component are as follows:

Mobilization Works: The Contractor started mobilizing on May 28, 2005 and constructed the following facilities at the camp at site: office buildings, staff residences, two mess halls, recreation hall, mosque, site laboratory, labor dormitories, canteen, toilets, workshops, material storage facilities, and pre-casting yard. The Contractor also deployed three concrete batching plants (installed capacity of 160 m3/hour) and a crushing plant; and for the Employer, constructed an Erection Supervisors House with a covered area of 5,510 sq. ft., a building to house telecommunication facilities (under a variation order), and a hospital.

Strengthening of the Barrage: Prior to the execution of permanent works, about 9 km of cofferdams were constructed, 2,219 sheet piles were driven, and 100 centrifugal, 225 submersible and 42 mud pumps were installed for dewatering purposes. About 24,570 cubic ft of grouting was injected through 5,990 ft of 2 inch diameter bore holes in order to fill up channels, voids, fractures and open joints in the downstream floor of the barrage. A 2 ft top layer, comprising 1 ft of reinforced skin concrete and underlying 1 ft of lean concrete, was broken and dismantled in the stilling basin. In the downstream glacis, only a 1 ft thick reinforced skin concrete was dismantled, leaving the lower layers intact. Before replacing the deteriorated concrete with new fresh concrete, 8,330 rawl bolts (expanding anchor bolts) of 2.5 to 4.5 ft lengths were installed in different grid patterns, both in the downstream glacis and stilling basin of the barrage.

Piezometers were installed underneath the structure at critical points for monitoring water levels and pressures in order to determine the uplift pressures underneath the structure and thus monitoring its physical conditions. A total of 80 piezometers were installed, 70 of which were the vibrating wire (VW) type and 10 were the stand pipe type.

The new concrete layer laid was 1ft thick on the crest and glacis, while in stilling basin floor the thickness of the new concrete was 3 ft in the right half and 2 ft in the left half of the barrage, in addition to chute blocks and end sill which were cast anew. The concrete was laid in panels in one go and full thicknesses. A total of 1,122,213 cubic ft Class–A concrete (4,000 psi) was used. Quality control measures were strictly followed to comply with requirements of hot weather, ensuring the temperature of concrete at batching plant at or below 28oC, and during winter above 2oC.

The following ancillary works were carried out: (i) grouting of drain pipes; (ii) raising the crest level of the left navigation lock (bay # 8) by 1 ft. and installing of new sill beams; (iii) replacement of sill beams in bays 31 to 65 of the barrage; and (iv) extension of fish ladders of the existing barrage.

Other works undertaken were: (i) a feeder canal was constructed and later its capacity augmented, as a temporary work, for providing drinking water supplies to the population in the command area of D.G Khan Canal during October 15 to April 15; (ii) D.G. Khan Canal head regulator was remodeled; (iii) a silt excluder in the upstream right pocket was constructed for the benefit of the D.G. Khan Canal; and (iv) the outfall channels of D.G. Khan Canal silt ejectors located at RD 7+500 and RD 20+800 were remodeled.

Construction of Subsidiary Weir: A 4,346 ft long subsidiary weir was constructed at 925 ft downstream of the main barrage gate line. With its crest at RL 424.0, the subsidiary weir raised the water level on the downstream of the barrage to provide adequate depth in the stilling basin ensuring formation of a hydraulic jump at the proper location, i.e. toe of or on the downstream glacis, and satisfactory energy dissipation. It was constructed in two stages during the low flow season, with half of the weir length (2,173 ft) under taken in each stage. The right and left halves were constructed during the low flow seasons in October 2005- July 2006 and October 2006-June 2007 respectively. Before starting the permanent works of the sub-weir, temporary works, comprising cofferdams and installation and operation of a well system to take

20 out impounded water and thus maintain dry working conditions, were put in place. The construction involved: (a) a total excavation of 16,907,720 ft3 of river bed material in order to prepare foundation of the subsidiary weir and its ancillary works; (b) 399,858 ft2 of steel sheet piling, 10 to 30.50 ft deep; (c) 7 rows, each containing 7 VW piezometers and one stand pipe type piezometer; and (d) a total of 5,914,271 ft3 of concrete (class A–4,000 psi and class B – 3,000 psi) was laid on 3 inch thick layer of lean concrete (class D–2.000 psi). Additionally, (i) aprons made of 4 ft x 4 ft x 4 ft PPC blocks were laid at both the upstream and downstream sides of the sub weir over graded filter of 1 ft depth and 2 ft depth respectively and (ii) two fish ladders, one on each side of the subsidiary weir, and a navigation lock at the left flank were provided as ancillary works.

The initial findings suggest that the envisaged impact of Component A has been realized. One of the major problems necessitating the Project was the excessive silt entry into the D.G. Khan Canal and resultant silting of the canal reducing its discharge capacity drastically. The construction of a silt excluder in the upstream right pocket and remodeling of the D.G. Khan Canal head regulator have provided the necessary infrastructure to control silt entry. Another key issue of the barrage was the problem of energy dissipation downstream of the barrage due to excessive retrogression and lowering of the tail water. This problem has been addressed by constructing the subsidiary weir which is reportedly functioning very well. It has been possible to maintain the design pond level now without any disruption. And there has been no significant safety hazardous incident at Taunsa barrage since its rehabilitation and modernization.

Component B: Renovation of Gates and Hoists and Strengthening O&M Facilities. This involves: (i) renovation of all the barrage gates and hoists and improvement in the operating and control system for the barrage and canal head-works, including necessary facilities to enhance the flow measurement in existence; and (ii) procurement of necessary equipment for operation and maintenance.

The original gates of the Taunsa barrage and their hoisting arrangement were constructed as per the then available technology in the 1950s. The gates were operable manually. Over the years, the gates and gearing system of the barrage had deteriorated. There was profuse leakage through closed gates. The implementation of this component intended to improve the condition of the gates and upgrade the operating facilities with higher level of automation through remote control, and O&M equipment.

Initially, the entire component was planned to be executed through a single ICB contract, using the Bank’s funds. In view of the grant of the Government of Japan to rehabilitate 29 gates of the left half of the barrage, the superstructure of the barrage and provision of O&M facilities, the scope of Component B funded by the Bank was reduced. The details of the procurement of works under this component are as follows:

Bank Funded: The part of works included in this component to be procured with Bank funding was packaged in ICB-02 Contract. This package included (i) replacement of right under- sluice gates in bays # 62-65; (ii) rehabilitation and increasing the height of weir gates in bays # 8 and #31 to 61; (iii) rehabilitation of 5 gates of the Muzaffargarh Canal; (iv) replacement of 7 gates each D.G Khan Canal and TP Link Canal; (v) hoisting system for the above; and (vi) automation of operation for all the gates of the barrage and canals.

JICA Contracts: The part of works included in this component to be procured with JICA funding comprised: (i) rehabilitation and/or renovation of 22 gates of the main weir (bays # 9 to 30), replacement for 7 left undersluices (bays # 1 to 7), rehabilitation and upgradation of hoists and superstructure deck, and electrification of gate hoists; (ii) supply of five bulkhead gates; (iii) supply of 2 tug boats and three working boats; and (iv) supply of one 50 ton truck crane. The design of the rehabilitation and/or renovation work was carried out by the consultants engaged by JICA specifically for this purpose and their installation was also supervised by these consultants. For this purpose, two separate consulting services contracts for amounts of ¥ 281.945 million and ¥ 129 million were signed

All physical works have been completed, and the operation of gates of the barrage and the canal head regulators has improved, as envisaged. The gates operate smoothly, there is absolutely no leakage from the closed gates, and there is now a central control room available at the barrage site. Thus the envisaged impact of the Component B has been realized.

Component C: Consulting Services and Implementation Support. This component covers: (i) consulting services for construction supervision at Taunsa Barrage; (ii) consulting services for preparation of designs for other Punjab barrages; (iii) maintaining an independent panel of experts for technical design and safety review, and construction quality enhancement; and (iv) incremental administration and operating costs of the Project Management Office (PMO) and Project Steering Committee (PSC) Secretariat. The details of this component are given below:

Consulting Services for Construction Supervision: A consultancy services contract was awarded to a joint venture of three companies on May 9, 2005 for a total input of 1,096 staff months, spanning a period of 44 months. The supervision consultants, acting as the “Engineer”, provided supervisory services for the two Bank-funded ICB contracts, namely ICB-01 (civil works) and ICB-02 (mechanical and electrical works). As the project activities progressed, addendums to the contract agreements were issued increasing the number of staff months to 1,119. The revised contract cost was Rs. 181.7 million.

Consultant Services for Preparation of Designs for Other Barrages: The consultancy contract for preparing detailed design of the Islam Barrage due in October 2005 was signed in August 2007, which was about 22 months late, and that for preparing detailed designs of the Jinnah Barrage due in October 2005 was signed in October 2007, which was about 24 months late. By the loan closing date, detailed designs, contract documents, Environment Impact Assessment and social studies for the Jinnah and Islam Barrages had been completed. Simultaneously, the Environmental Management and Social Development Assistance Plans were also prepared.

Independent Panel of Experts (POE): As envisaged at the time of preparation of the Project, independent Panels of Experts (POEs) composed of experienced international and national experts were appointed. The POEs convened thrice during the implementation of the Project. They reviewed activities of the Project independently and provided findings and recommendations which proved useful and were acted upon. One of the panels was specifically

22 convened to advise on environmental and social issues. This panel imparted advice on how to deal with the serious social issues related to displaced/resettled communities and people in canal command areas who were adversely affected by extended canal closures and environmental issues of wild life sanctuary situated upstream of the barrage, water logging and safety of the Indus dolphin.

Support to Project Management Office (PMO): A Project Management Office (PMO), headed by a Project Director, was set up in IPD. It comprised of four units: (i) Project Management & Procurement Unit that was responsible for project implementation, procurement activities, monitoring and evaluating project progress and performance, liaising with the Bank and preparing annual programs and implementation reporting; (ii) Engineering Unit that oversaw the work of the consultants on design and construction supervision matters; (iii) Financial Management Unit that was responsible for all project-related financial management, disbursements and financial reporting; and, (iv) Environmental Unit that supervised compliance with the Environmental Management and Monitoring Plan. These units were staffed with qualified personnel. For contractual purposes, the Project Director served as the “Employer” for the purposes of administering the ICBs.

Project Steering Committee: A Project Steering Committee (PSC), headed by the Chairman, Planning and Development Board and having Secretaries of Irrigation and Power, Finance and Environmental Protection Departments as its members, provided policy guidance and inter-agency coordination for the Project.

A Barrages Review Cell was also established in the GoPunjab Planning and Development Department, which was headed by a Program Coordinator. This Cell facilitated inter- departmental dialogue and helped address Project related issues in which more than one Government Department were involved, acted as a link between the Project and the P&D Department for the Project and future projects concerning barrages, and also acted as a link between the Project and the Federal Government.

Annex 3. Economic and Financial Analysis

A. Background

The Taunsa Barrage diverts a part of the Indus flow to the D.G Khan and Muzzafargarh canal commands with an irrigated area of about 0.8 million ha (2 million acres) and to other large areas served by the Taunsa-Panjnad Link Canal. This link canal was built in the 1960s to transfer water from the Indus to areas served by two rivers, the Ravi and the Sutlej. The barrage also carries a road, railway, oil and gas pipelines.

As a result of the investigation and feasibility study at appraisal, Taunsa Barrage was found to have numerous structural weaknesses and an unstable hydraulic situation on the downstream floor. It was concluded that the barrage was at high risk of structural failure and may collapse at any time. In case of failure, the barrage would not be able to maintain the water at the level needed to supply the irrigation canals. Thus the funding for rehabilitation of the Taunsa Barrage was put on fast track. While working out the economic viability of the project, only the economic loss associated with the catastrophic scenario of the barrage was considered.

B. The Main Objectives of the Economic Analysis

The main objective of the ex-post economic analysis is to re-examine the economic viability and sustainability of the Project at loan closing date and to re-assess the potential risks to sustainability of the Project. The results of the analysis at completion of the Project will also be compared with the results of economic analysis envisaged at appraisal.

C. Approach and Methodology

The standard economic analysis approach was used here whereby the net present value of costs and benefits were calculated over a period of twenty years discounted at the opportunity cost of capital. Obviously, the project life is much longer than the period considered for this analysis. A conservative approach has been adopted for this analysis. In addition to comparing the results of the catastrophic assumption, the economic analysis has also been carried out under standard perspectives to examine the sustainability of the Project.

During the analysis, the comparisons of costs and benefits of the Project were made on the basis of quantifiable physical inputs and outputs. Incremental net benefits were estimated on the basis of the changes expected to occur and other conditions expected to prevail within targeted geographic areas: (i) in the absence of the Project’s interventions and (ii) as a consequence of implementing the proposed investments. These quantifiable inputs and outputs were valued according to their border price equivalents, at January 2010 price levels. For the farm budget analysis, the established prices determined by local markets were applied.

In assessing input and output prices, the detailed financial and economic farm-gate prices of agricultural commodities and inputs were calculated on export/import parity basis. In this exercise, the World Bank's commodity price projections for tradable commodities such as wheat,

24 cotton, and fertilizers were used as appropriate. Economic prices were calculated and based on domestic price numbers. All key assumptions used in the analysis and their rationales are provided in the following sections. The derivation of economic prices used for the analysis is shown in Table 3.1.

Table 3.1 Derivation of Farm-gate Economic Prices of Agricultural Commodities (Jan 2010 Price Level)

Rice Parity Price Basis (1) Wheat Sugarcane Cotton Irri (6) (I) (I) (E) (E) Projected Price in Current Dollars $/mt (2) 201.2 478.1 1,704.9 571.3 Factor 1.00 1.00 1.00 1.00 Quality Adjustment Factor 0.85 0.97 0.97 0.81 World Market Equivalent $/mt 171.0 463.8 1,653.8 462.7 Transport and Insurance 54 54 162 54 cif, Karachi 225 518 1,492 409 Exchange Rate Rs/US$ 85.00 85.00 85.00 85.00 cif, Karachi (Rs/t) 19,130 44,015 126,788 34,736 Port charges 450 450 1,350 450 Storage and handling 831 831 2,494 831 Value at Karachi market 20,412 45,296 122,945 33,455 Transport to Project Area (Mill) 230 230 1,150 230 Processed Value 20,642 45,526 121,795 33,225 Processing Ratio % 93.6 8.5 33 62 Processing Charges 750 5,100 2,250 1,750 Wholesale Value 20,022 4,303 39,450 19,515 Local agent’s commission 400 129 986 390 Value at farmgate 20,423 4,432 38,463 19,124 Economic Value at farmgate (Rs/40kg) 817 177 1,539 765 Local farmgate price (Rs/40kg) 880 170 1,720 1,280 Ratio of border to local farmgate price 0.93 1.04 0.89 0.60 Financial Price per Kg 22.00 4.25 43.00 32.00 Economic Price per Kg 20.42 4.43 38.46 19.12 (1) Parity : [I] Import [E] Export (2) World Bank Commodity Prices February 2010

Detailed crop and farm budgets were developed to support analysis of with and without Project scenarios, by taking into consideration the amount of potential losses avoided and possible savings in farm operation cost due to Project interventions. Also the sensitivity analysis was carried out.

In addition, all non-quantifiable and indirect benefits that may arise due to the Project were described in detail during appraisal. These indirect economic benefits accruing to other sectors include rail and road transport, gas, and local job creation due to barrage rehabilitation.

At appraisal, the economic analysis assumed a period of five and ten years before collapse of the barrage under the without Project scenario. At midterm review, the analysis was further

25 elaborated assuming that under the without Project scenario the losses would be confined to one year (two crop seasons) and the situation would recoup within 7 years. The ICR repeats both the analyses (appraisal and midterm) and compares the results at completion of the Project. In addition, the impact of the Project in financial terms, on the income of farmers has also been studied herein.

Costs

Total Project costs have been re-valued on the basis of actual costs/latest estimates incurred for rehabilitation of the Taunsa Barrage. The costs incurred for civil works, mechanical and electrical equipment, project management and technical assistance, and cost of resettlement action plan have been included in the cash flow of costs. However, the costs incurred for model studies and surveys, and for the design of other barrages in the Punjab have been excluded from the total Project costs while working out the economic analysis.

A pro-poor assistance program was developed and implemented by the Punjab Rural Support Program (PRSP) in 124 union councils of four districts (Muzaffargarh, Layyah, D.G. Khan and Rajanpur). In 2005-06, due to extended canal closure of the D.G. Khan canal, irrigation water supply received by the farmers of the canal command area was less than usual. Therefore, GoPunjab, under the PRSP, launched a crash assistance program in selected union councils, which included the provision of quality wheat seed at subsidized rates, installation of hand pumps for drinking water supply, social mobilization of local communities, construction of community infrastructure, provision of microcredit and skills training. The program had a positive impact in the areas affected by the prolonged canal closures. The cost of this program attributed to the Project area has been worked out and included in the cash flow of costs for carrying out the economic analysis.

JICA also financed the rehabilitation of a part of the barrage gates and some other equipment/activities at a cost of about US$ 40 million (about Yen 3,860 million). The decision of partial funding by JICA was made during the implementation of the Project and did not exist at appraisal. This cost has also been included in the cash flow of costs, as segregation of the benefits of JICA’s investment is not possible.

The O&M costs were taken from the historical data of year wise funds allocation and expenditures for the barrage. These allocations are made on a standard yardstick based on discharge of the canals of any barrage. In case of failure of the barrage, the O&M costs were to be redundant, hence full O&M cost of the barrage has been accounted for in the cash flow of costs, after converting into economic values.

D. Key Assumptions Used in the Analysis

ƒ If failure of the barrage occurs in July, the main summer (kharif) crop of cotton would not be irrigated and thus fail because the canal command area in general receives very low natural rainfall. If the barrage could not be put back in service in time for the winter (rabi) crop, the farmers would be unable to grow a winter wheat crop.

26 ƒ The analysis has been done on conservative assumptions; hence only key crops have been taken into account. Though the tangible improvements in yield due to enhanced and uninterrupted water supply have been quantified but these have just been described.

ƒ The opportunity cost of capital is assumed to be 12%, the rate used by the Planning and Development Department, GoPunjab/GoPakistan for Projects’ evaluation purposes.

ƒ The economic benefit of the barrage rehabilitation would be the avoided crop losses as well as other losses due to interruption of the oil and gas pipeline, road and railway linkages and other services. Major agricultural losses in the summer would be the area of cotton in the DG Khan and Muzaffargarh canal commands. By July, the farmers will have invested in most of the inputs, and in the absence of barrage failure the crop would continue to mature.

ƒ Mainly the avoided agricultural losses considered are for the kharif for key crops in the D.G. Khan and Muzaffargarh canal commands. Under the Project, the farmers would be enabled to get more water at the tail end, timely and effective for their crops. In case of failure of the barrage, the agriculture loss would be sum of the two seasons (rabi and kharif), whereas the situation would recover within seven years.

ƒ The Project would yield quantifiable as well as non-quantifiable benefits. Specifically, the evaluation is premised on the fact that the condition of Taunsa Barrage is improved after its rehabilitation. The barrage would be able to maintain the water at 447 ft above sea level and enable timely and effective water supply to the irrigation canals. As the canals are non-perennial, the farmers would be able to grow the main summer (kharif) crops of cotton and rice. The farmer would also take advantage of cultivating winter (rabi) crop of wheat and watering to perennial crops of sugarcane and orchards (mangoes).

ƒ Similar to the assumption at appraisal, it has been further assumed that full losses would be confined to one year (two crop seasons) and the emergency arrangements at a cost of $20 million would be required to restore services to the two canal commands by the start of the next main irrigation season. After that, the barrage would have to be rehabilitated at costs worked out on the basis of actual expenditures/latest estimates at completion of the Project.

E. Benefits of the Project

Quantifiable Benefits

Area Benefited: The two canals are non-perennial, as such the benefited area is assumed as 55 percent (i.e. 6.5 months water supply). Total detriment area is computed more than 1.26 m acres (0.55 million ha). The project benefits have been taken for the value of potential losses averted as a result of the barrage failure.

27 Agriculture Benefits: Under the without Project situation, the partial or complete failure of the barrage, the total estimated agricultural loss during the year (in economic values) would be more than Rs 6.3 billion (US$74.5 million). The other potential losses of human life, cattle and infrastructure would be in addition to the agriculture loss and have not been quantified.

Non-Quantifiable Benefits

Increase in Crop yields: It has now become apparent that the rehabilitation of the barrage and the addition of works to reduce sediment entry to the D.G.Khan canal will ensure a larger (restoration of design level) and more reliable supply of water to the canals served by the barrage, as its capacity to accommodate the flow has increased from 7,500 cusecs to 9,000 cusecs. Obviously, this incremental increase of water would result in increase in intensity and crop yields. However, as a conservative approach, no change in either crop yields or in the inputs level has been assumed for with and without Project scenarios.

Change of Cropping Pattern: After having more water and with a flat rate for the abiana (canal water use charges) introduced by the Punjab government, some of the farmers may have shifted to cash crops, but due to non availability of such empirical data, no benefits of shifting to cash crops (cropping pattern) has been accounted for.

The non-quantified loss which might have occurred in case of partial or complete failure of Taunsa Barrage include: (i) in case of damage to the gas pipeline providing natural gas to Kot Adu combined cycle power plant, the power supply of a 137 MW thermal power station would be interrupted; (ii) the oil transporting pipeline passing through the Project area would also be damaged; (iii) the road and rail connections between Punjab and Sindh and the link between Balochistan and Punjab may be interrupted with the damage of the main road and railway line passing through the Project area, which has a strategic importance both from the country’s defense as well as from the national integration point of view; (iv) the barrage-bridge has facilitated rapid as well as point to point passenger and trucking facilities which have continued to boost all round growth of trade and commercial activities. The damage to barrage-bridge may seriously harm all these economic activities; (v) loss of human life, cattle, infrastructure and other private and public property.

F. Results of Economic Analysis

At appraisal the EIRR was calculated as 42% assuming if the barrage collapsed after 5 years and 17% if it collapsed after ten years (baseline). An ex-post analysis was repeated based on actual/latest costs estimates and the EIRR was calculated to be 34.0% against the scenario assuming the failure of barrage after five years and 15.9% if failure occurs after 10 years. The reduction in EIRR is due to variation in the prices of agricultural input and output commodities. No other scenario was examined for evaluating the economic viability of the Project, at appraisal.

The MTR mission also updated the economic analysis and calculated an EIRR of 25% under standard perspectives. The economic benefit of the barrage rehabilitation was taken as the avoided crop losses assuming that the situation would be set back to the level prior to the failure

28 of barrage within a period of seven years. For the ICR, this analysis was repeated using actual/latest cost estimates. An EIRR of 21% was calculated. The difference between the results of analysis carried out at Appraisal and for this ICR is mainly due to the increase in Project completion cost from US$134 million to about US$166 million (including JICA’s funding). Details are given in Table 3.2.

Table 3.2 Economic Analysis: Cash Flow of Costs and Benefits (Base Case)

Rs Million Avoided Net Project Total Years O&M Agronomic Incremental Costs Costs Loss Benefits

Year-1 2,212.0 14.76 2,226.75 - (2,226.75) Year-2 2,542.2 28.00 2,570.17 6,332 3,762.02 Year-3 3,680.9 32.67 3,713.61 2,159 (1,554.80) Year-4 2,259.1 46.67 2,305.75 1,542 (763.74) Year-5 1,322.3 46.67 1,368.95 925 (443.75) Year-6 74.5 46.67 121.17 617 495.63 Year-7 - 46.67 46.67 617 570.13 Year-8 - 46.67 46.67 617 570.13 Year-9 46.67 46.67 308 261.73 Year-10 46.67 46.67 308 261.73 Year-11 46.67 46.67 308 261.73 Year-12 46.67 46.67 308 261.73 Year-13 46.67 46.67 308 261.73 Year-14 46.67 46.67 308 261.73 Year-15 46.67 46.67 308 261.73 Year-16 46.67 46.67 308 261.73 Year-17 46.67 46.67 308 261.73 Year-18 46.67 46.67 308 261.73 Year-19 46.67 46.67 308 261.73 Year-20 46.67 46.67 308 261.73 NPV @ 12% Rs 561.11 million :equivalent to US$ 6.60 million Base case IRR 21.0%

Sensitivity Analysis: An analysis made at appraisal found that the EIRR remains above 12% even under the worst case scenario, with 10% cost increase and 10% benefit reduction. The sensitivity analysis carried out at the ICR based on actual/latest cost estimates keeps the EIRR above 12% with reduction of benefits up to 6%. The NPV of the Project has been worked out as US$ 6.60 million using a discount rate of 12%.

The analysis at ICR confirms the findings at appraisal and MTR that the Project is economically viable.

G. Farm Budget Analysis

Farm budget analysis has been undertaken to calculate the farm income made possible as a result of Project implementation. Impact of barrage failure on income of a small, medium and large farmer of the Project area was studied by developing typical farm budgets of 2 ha (small farm), 5 ha (medium farm) and 12 ha (large farm). Cropping intensity was worked out for small farms as 159%, for medium farm as 143% and for large farms as 137%. Overall intensity of the Project area has been reported as 153%. (Comparison with at appraisal could not be made as such analysis was not carried out).

Approach and Methodology for Farm Budget Analysis

It is assumed that under the ’without Project scenario’ in the event of barrage failure, farmers would bear the loss of the kharif crops and would not be able to grow wheat and provide irrigation to the rabi crops to some extent (both the canals are non-perennial). A conservative approach has been adopted for evaluating the impact of barrage failure on the income of the farmers by assuming only the key crops for this analysis. Based on the crop budgets, farm budgets for the small, medium and large farm were developed separately. In the farm budget analysis, the cost of farm family has not been added in the expenses.

Farm Budget Development

Farm budget prepared covers analysis of gross value of production (GVP), gross cost of production (GCP), and incremental farm income. For simplicity and to avoid unnecessary details, similar average per acre crop budgets and bench mark prices have been used for all farms under consideration.

Results of the analysis and Impact on Farm Income

The farm budget analysis reveals that rehabilitation of the barrage has saved the farmers from loss of their investment (45% of potential expenses as input to the crops) in farm inputs ranging between Rs. 33,600 (small farm) to more than Rs. 147,700 (large farm). Moreover, in case of failure of barrage, the farmers would not get any returns for their livelihood, whereas, implementation of the Project would enable farmers to receive income for their family members from activities on the farms. Results of the farm budget analysis have been summarized in the following Table 3.3:

Table 3.3: Results of Farm Level Income for the Key Crops Rupees Medium Large Small Farm Description Farm Farm (2 Ha) (5 Ha) (10 Ha) GVP 115,089 258,769 495,823 GCP 74,709 169,657 328,295 Net Returns 40,380 89,112 167,528 Net Return per Farm Acre 20,190 17,822 16,753

30 Key: GVP = Gross Value of Production; GCP = Gross Cost of Production.

Annex 4. Bank Lending and Implementation Support/Supervision Processes

(a) Task Team members Names Title Unit Javaid Afzal Environmental Spec. SASDI Pramod K. Agrawal Consultant EASPR Masood Ahmad Lead Water Resources Specialist SASDA Ali Awais Consultant MNCA4 Tumurdavaa Bayarsaihan Senior Rural Development Specialist SASDA Anwar Ali Bhatti Financial Analyst SACPK Ismaila B. Ceesay Lead Financial Management Spec SARFM Paul Jonathan Martin Sr. Environmental Specialist AFTEN Alessandro Palmieri Lead Dam Specialist OPCQC Usman Qamar Senior Rural Development Specialist SASDA Uzma Sadaf Senior Procurement Specialist SARPS Furqan Ahmad Saleem Sr. Financial Management Specialist SARFM Hasan Saqib Sr. Financial Management Specialist SARFM Abdul Qaiyum Sheikh Consultant SASDA William T. Smith Consultant EASRE Warren Waters Regional Environmental and Staff AFTQK Winston Yu Water Resources Spec. SASDA Vaqar Zakaria Consultant SASDT Chaohua Zhang Sr. Social Sector Specialist SASDI Altaf Iqbal Consultant SASDA

(b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY04 1 26.16 FY05 33 145.46 FY06 0.00 FY07 0.00 FY08 0.00 Total: 34 171.62 Supervision/ICR FY04 0.00 FY05 11 35.69 FY06 58 315.35 FY07 42 221.13 FY08 31 152.85 FY09 3 0.00 Total: 145 725.02

31 Annex 5. Summary of Borrower’s ICR and/or Comments on Draft ICR

INTRODUCTION

THE TAUNSA BARRAGE

The Taunsa Barrage, built across Indus River is located at about 16 Km from Kot Addu, a Tehsil head quarter of Muzaffargarh District, with location coordinates of 30º 31’ N 70º 51’ E. The Barrage as originally constructed has 65 bays with a total width of 4,346 ft between the abutments. Width of each bay is 60 ft except for bay No. 8 which is 22 ft wide and serves as navigation lock to allow boats and other craft to cross the Barrage. Bays No. 9 to 61 constitute main weir and there are two sets of under-sluices separated from the weir by two divide walls as left and right flanks bays No. 1 to 7 from left under-sluices while right under-sluices cover bays No. 62 to 65. The Barrage has 2 fish ladders each 11 ft wide alongside each divide wall.

Figure -1: Downstream View of the Barrage

Table -1 – Discharge, GCA & Districts Irrigated by Taunsa Barrage Canals Sr Name of GCA (Acres) Length District Design Discharge # Canals (Km) (Cusec) 1 Muzaffargarh 940,000 113 Muzaffargarh, 8,901 Layyah 2 DG Khan 1,285,000 (present) 105 DG Khan, i) present day 2,279,874 (Final) Rajanpur 11,540, Final 14,500 3 TP Link 126,000 (Rangpur 62 Muzaffargarh, 12,000 canal tail area) Balawalpur, supplemental support Rahimyar to Panjnad Command Khan

32 FUNCTIONS OF THE BARRAGE

The functions of a conventional Barrage are:

• Raising water level in the river to an extent required for feeding the off-taking canals; • Pinning down the river at one location to facilitate transportation needs; • Regulation and control of the river flows.

But Taunsa Barrage is more than a conventional Barrage. It provides the following:

• Irrigation facilities to areas in Muzaffargarh, DG Khan and Rajanpur Districts (2.354 million Acres); • Converting inundation canal systems into weir regulated irrigation system; • Accommodates rail road crossing for the direct rail link between Kot Adu on the left bank and DG Khan, Rajanpur and Kashmore on the right bank of Indus River in Sindh; • Accommodates a Class 70/AA loading Arterial Road Bridge; • Accommodates a 16 inch dia high pressure pipeline owned by PARCO for conveying petroleum products from Karachi to the up country storage at Mahmood Kot terminal. • Accommodates a 16 inch dia high pressure natural gas pipeline conveying natural gas from Dhodak gas field to KAPCO and serviceable areas.

Taunsa Barrage is thus a truly multipurpose complex.

Problems and Remedial Measures

Taunsa Barrage soon after its commissioning in 1958 ran into multitude of problems, which multiplied with passage of time. Then, a stage reached that indicated that the Barrage could collapse at any time which would have resulted in; stoppage of irrigation water supply to multi-millions of acres and drinking water supply to about 6 million people and their live stock served by Taunsa Barrage canals’ systems; disruption of rail road traffic to trans-Indus areas; non functioning of oil and gas pipe lines crossing the river over the Barrage piers; etc.

Briefly, solutions to the problems lay in immediate rehabilitation of Taunsa Barrage to restore its designed functions. The following table lists the problems and proposed solutions/remedies in annotated form.

33 Table 2: Problems and Solutions/Remedies Problems Solution/Remedies Retrogression of levels on the downstream Construction of a subsidiary weir 925 ft of Barrage and consequential issues downstream of the Barrage to raise tail water levels to safe values. Repeated damages to stilling basin Grouting of leaking Concrete and cavities in appurtenances including rupture of skin or underneath the mass concrete, removal of concrete and leaking joints of mass concrete. existing shattered skin and re-laying of 3 feet thick concrete overlay with nominal reinforcement. Sedimentation problems in DG Khan canal Construction of silt excluder in the u/s right pocket, raising crest of head regulator and removing the silt ejector at RD 20,800 D.G Khan Canal which is not rendering any assistance in silt ejection rather behaving as a hump in the canal flow. Repeated subsidence of the backfill of left Provision of a proper filter and pressure and right flared out walls on the release pipes or an effective seepage cut-off. downstream. Choking of about 80% of pressure pipes and Provision of vibrating wire (electronic) mal-functioning of the remaining 20% piezometers in 10 bays of the Barrage and 7 rows in the new sub-weir. Problems of gates and hoists Overhauling the gates and hoisting system, improvements through amended design and automation with Central Control System for better regulation of flows.

PROJECT OBJECTIVES AND CONSTRUCTION PHASE

The main objectives of the Project were to take urgent steps to prevent a failure of the Taunsa Barrage that provides irrigation for two million acres and drinking water in the rural areas of Southern Punjab benefiting several million farmers, and to serve as a model for rehabilitation of other Barrages in Punjab.

In May 2005, the World Bank helped launch the “Taunsa Barrage Emergency Rehabilitation and Modernization Project” to achieve the aforesaid objectives and to assist Irrigation and Power Department, Government of the Punjab in overcoming the problems associated with the Taunsa Barrage.

Engineering Design

The following table lists the design standards adopted for engineering design of various Project works:

34 Table 3: Basis of Design for Various Components Works Sr # Design Features Theory / Standard Adopted 1 Frequency Analysis for Estimation of Gumbel Extreme Value Type-I the Peak Annual Discharge 2 Surface Flow Conditions – Hydraulic Crump and Khosla methods jump analysis and relevant floor thickness 3 Subsurface Flow Analysis • Safety against Uplift Pressures Khosla’ s Theory, Lane Theory • Seepage Analysis Khosla’ s Theory, & Lane Theory • Floor Thicknesses Khosla’ s Theory

4 Stilling Basins USBR Engineering Monograph No. 25 • Type Modified Type IV 5 Stone Aprons Scour depths using Lacey’s Method and the Blench Equation 6 Abutment & Flared out Walls USBR Monograph No. 27 & Irrigation Engineering by SK Sharma 7 Earth Pressure for Stability Analysis for Coulomb’s Theory walls and embankments 8 Structural Design American Concrete Institute (ACI), or British Standards (BS) where ACI Code does not carry certain pertinent information.

PROCUREMENT OF CONSULTANCY SERVICES AND WORKS

PROCUREMENT OF SERVICES OF SUPERVISION CONSULTANTS M/s Punjab Barrages Consultants-PBC (a Joint Venture of National Development Consultants Regd (NDC), and National Engineering Services of Pakistan (Pvt) Limited (NESPAK) in association with ATKINS (Global) Water, UK), who had provided services for feasibility study and detailed design of Taunsa Barrage, were employed to provide construction supervision services for following two International Competitive Bidding (ICB) Contracts financed by the World Bank: i) Civil Works - ICB-01 Contract, and ii) Mechanical & Electrical Works - ICB-02 Contract.

PROCUREMENT OF CIVIL WORKS The procurement for civil works was initiated in July 2004 with a notice for Invitation for Prequalification in the press. In response to the above notice, eleven individual firms and joint ventures (JV), from different countries applied for prequalification.

After evaluation, five applicants qualified for bidding for civil works and these were notified during September 2005. The Letters of Invitation (LOI) to purchase Bidding Documents for ICB-01 Contract were issued to the pre-qualified firms/JVs on November 13, 2004. Out of 5 pre-

35 qualified bidders, 4 submitted their Bids The Bids were opened on January 14, 2005 at 11:30 hours by a Bid Opening Committee in the presence of Bidder’s Representatives.

As a result of bid evaluation process, carried out by the bid evaluation committee, JV of M/S Descon Engineering Ltd (DEL) and M/S China Gezhouba Water & Power Group Corporation Ltd (CGGC), was declared as the lowest evaluated Bidder.

Letter of acceptance for ICB Contract-01 (Civil Works) was issued to JV of DEL-CGGC by Head PMO for Punjab Barrages (Employer) on 12 April 2005. Notice to commence the work was issued by the Engineer on 10 May 2005 and Contract amounting to Rs 4,527.68 million was signed on 27 May 2005 with a stipulated completion period of 1,092 days with May 05, 2008 as the Contracted date of completion.

PROCUREMENT OF M & E WORKS The procurement process for M & E works was initiated in April 2005 with publication of a notice for Invitation for Prequalification in the press. In response to the above notice, eight firms/JVs from different countries applied for prequalification. Out of eight applicants six firms/JVs were pre-qualified. The results of pre-qualification were issued on November 01, 2005 to all the six pre-qualified firms/JVs. The LOI to purchase Bidding Documents for ICB Contract No. 02 was issued to all pre-qualified firms/JVs on November 23, 2005. Only 4 firms/JVs purchased the Bidding Documents.

The Bids were opened on January 09, 2006 at 11:30 hours by a Bid Opening Committee in the presence of Bidder’s Representatives. While the bids were in the final stages of evaluation, M/s China National Electric Wire & Cable Imp/Exp Corporation, the second lowest bidder through their letter of February 10, 2006 addressed to the World Bank Islamabad with a copy to the Employer represented that the evaluation of the bids for Contract ICB–02 is not being done in a fair and transparent manner, not according to the laid down tender conditions and World Bank Procurement Guidelines.

The allegations made by China National Electric Wire & Cable Imp/Exp Corporation were examined by the Bid Evaluation Committee during the evaluation process and the Bid Evaluation Report was submitted by PMO to the World Bank for their review on February 20, 2006 wherein it was recommended that the contract be awarded to the Consortium of M/s Harbin Power Engineering Ltd and M/s Baju Hydropower Construction Group who were the lowest evaluated Bidder with evaluated Bid Price of Rs. 1,471,176,139.

The recommendations of the Bid Evaluation Committee were however assessed by the World Bank not to be in conformity with the Bidding Documents (ITB clauses 28.2 and 28.3) the Bid Evaluation committee further explained their earlier recommendations and reiterated for award of Contract to M/s Harbin Power Engineering but World Bank was unable to agree with these recommendations as the Bank’s evaluation determined the bid of M/s Harbin Power Engineering Construction Group as non-responsive. In the meantime a representation was received from M/s Harbin Power Engineering through their letter of April 29, 2006 which was addressed to the Employer with a copy to the World Bank and others, wherein they explained that they are very well aware of the requirements and Guidelines of the World Bank and that they have submitted a

36 fully responsive bid. The Bid Evaluation committee revisited its earlier evaluation in light of M/s Harbin’s representation and Bank’s review in result of which the committee on June 27, 2006 agreed with the World Bank’s observations and recommended to award the Contract to the next lowest bidder i.e. M/s China National Electric Wire & Cable Imp/Exp Corporation at a Price of Rs. 1,559,580,298.

Letter of acceptance for ICB Contract-02 was issued to M/S CNEWC, China by Head PMO for Punjab Barrages on August 11, 2006. Notice to commence the work was issued by the Engineer on August 29, 2006 and the Contract was signed on October 09, 2006. Total price of the Contract was Rs 1,557.76 million with a completion period of 850 days with a prescribed date of 26 December, 2008.

PROCUREMENT OF CONSULTANCY SERVICES AND WORKS UNDER JICA GRANT IN AID

PROCUREMENT OF SERVICES OF SUPERVISION CONSULTANTS A Consortium of Sanyu Consultants Inc. and Yachiyo Engineering Co., Ltd, who had provided services for feasibility study and detailed design of Taunsa Barrage gates, were employed to provide construction supervision services for following four Contract packages:

i) CP – 1 Contract Package ii) CP – 2 Contract Package iii) CP – 3 Contract Package iv) CP – 4 Contract Package

PROCUREMENT OF M & E WORKS CP – 1 contract was signed on November 19, 2005 between Irrigation and Power Department, Government of the Punjab, Islamic Republic of Pakistan and Consortium of Kurimoto, Ltd and Taisei Corporation, duly organized and existing under the laws of Japan, having its Principal office of business at 12-19, Kitahorie 1 –chome, Nishi-ku, Osaka, Japan. Whereas, the Government of Japan extended its grant to the Government of Islamic Republic of Pakistan on the basis of ‘’the Exchange of Notes’’ signed on the April 30, 2005 between the Governments concerning the project for the Rehabilitation of Gates of Taunsa Barrage.”

CONSTRUCTION OF THE PROJECT WORKS

Civil Works Contract ICB-01 The Contract (ICB-01) civil works in the river bed were completed one year ahead of schedule. Taking over Certificate (TOC) was issued 26 May 2008.

Scope of Work Civil works involved following main components: a) Mobilization Works, involving construction of Contractor’s and Employer’s site Facilities such as Contractor’s labor camp and staff residences, equipment and plants maintenance facilities etc.; b) Strengthening of the existing Barrage included:

37 • Rehabilitation of D/S floor & glacis of Main Weir, • Construction of silt excluder for DG Khan Canal, • Remodeling of D.G. Khan Canal Head Regulator , • Remodeling of Fish ladders of Existing Barrage, and • Diversion of escape channel of D.G. Khan Canal silt ejectors; and c) Construction of 4,346 ft long Subsidiary Weir with essential appurtenances such as navigation lock, two fish ladders and the D/S guide banks.

MECHANICAL AND ELECTRICAL (M & E) WORKS

M & E Works Contract ICB-02 ICB-02 Contract comprising M & E works was awarded to M/S China National Electric Wire & Cable Import/Export Corporation (CNEWC); the acceptance letter was issued on August 12, 2006; ‘Notice to Commence’ was issued on 29 August 2006 and Contract was signed on 09 October 2006. The original Contract Price was Rs 1,557.76 million (excluding provisional sums). The stipulated Contract period was 28 months with completion date of 26 December 2008. Taking Over Certificate (TOC) was issued on 09 February 2009.

Scope of Works M & E works under ICB-02 contract for Taunsa Barrage Emergency Rehabilitation and Modernization Project financed by the World Bank comprised: a) Mobilization Works b) Replacement of 4 right under-sluice gates No. 62-65. c) Rehabilitation of 31 gates of the main weir, (bay No. 31-61) and Gate No. 8 in the navigation bay. d) Replacement of 7 gates each of DG Khan and T.P. Link Canal Head Regulators e) Rehabilitation of 5 gates of Muzaffargarh Canal. f) Automation of gates operation g) Data acquisition and communication system. h) Procurement of necessary equipment for operation and maintenance, including workshop, data observation, and discharge monitoring equipment.

ICB-02 Contractor made use of the coffer dam of the ICB-01 Contractor only for gates # 32 to 37. He had his own coffer dam for gates 38 to 65. JICA contractor, however, made use of the coffer dam of ICB-01 Contractor.

WORKS EXECUTED UNDER JICA GRANT IN-AID

The works under the Japanese Grant Aid project were divided in to four (4) contract packages as below;

Package Description of Package Cost Rs. Date of Completio Million Award n Contract - Bulkhead gate stockyard construction. 2,096.36 Nov 19, May, 2008 Package- 1 - Replacement of seven (7) Under-sluice Gates at 2005 CP - 1 Left bank. - Rehabilitation of twenty two (22) Weir gates.

38 - Replacement and electrification of twenty nine (29) gate hoists. - Electric work. - Replacement of deck on superstructure for sixty five (65) gates. - Bulkhead gate assembly - Installation of gate guide for bulkhead gate - Gate facility manufacturing work. Contract - Procurement of five (5) sets of Bulkhead 359.32 Nov 17, Apr, 2007 Package- 2 gates including gate guides and accessories 2005 CP - 2 - Undertaking of on the job training for the installation of bulkhead gates. Contract - Procurement of two (2) Tugboats and three 60.72 Dec, 02, Sep, 2006 Package- 3 (3) working boats and their spare parts. 2005 CP - 3 - Undertaking of on the job training for steering of ships. Contract - Procurement of one (1) set of 50 Ton Track 33.43 Dec, 02, Sep, 2006 Package- 4 Crane with spare parts. 2005 CP - 4 - Undertaking of on the job training for operation of Track Crane. Detailed Design Consultancy 71.86 Mar 10, 2005 Supervision Consultancy 157.07 Sep 30, Mar, 2009 2005 Total 2778.84

QUALITY ASSURANCE AND QUALITY CONTROL

GENERAL Quality assurance and quality control are the most important grass root processes that are essential for good health and timely completion of large construction project. Taunsa Barrage Emergency Rehabilitation and Modernization Project was a mega project and proper implementation of QA and QC procedures was the essence of the whole construction operation for the project.

ENGINEERS QUALITY ASSURANCE PLAN A quality assurance and control plan was prepared by the Engineer and submitted to the Employer vide # TBRM/01/82.2/61 dated June 20, 2005. It included the details of quality assurance procedures and instructions.

CONTRACTOR’S QUALITY ASSURANCE PLAN The Contractor also prepared and submitted his plan as per Contract Provision (SP-10) which being in order was reviewed and agreed.

39 Source Approvals The first step in the quality assurance/control (QA/QC) activities exercised on the project is the source approval of the materials intended to be used on the project by the Contractor. Source approvals were granted for required materials including steel reinforcement, aggregates, stone, cement, PVC water stops, and admixtures etc. After the source approval, regular tests were conducted in the laboratory established at the site for aggregates, concrete, bricks. For materials such as cement, steel reinforcement, samples were taken periodically from the consignments delivered at site in accordance with provision of the technical specifications of the project. These materials were got tested from Central Materials Testing Laboratory (CMTL) WAPDA, University of Engineering & Technology, Lahore, and PITAC, Lahore.

CONCRETE MIX DESIGN The method given in ACI 211.1-91 was adopted to design the mix for Concrete class A, B, C, D & E. 28 days strength requirement for the above five categories of Concrete was: Class A 4000 Psi Class B 3000 Psi Class C 2500 Psi Class D 2000 Psi Class E 1500 Psi

SOCIAL & ENVIRONMENTAL ASPECTS SUMMARY Water resources development projects invariably result in many far-reaching ecological changes. Some of them benefit human population, while others threaten the long-term productivity of the projects themselves as well as the natural resource base. The undesirable changes are not solely restricted to increasing pollution or loss of habitat for native plants and animals; they cover the entire range of environmental components, such as soil, water, air, energy, and the socioeconomic system.

The Taunsa barrage emergency rehabilitation and modernization (TBERM) project was necessitated due to retrogression of levels on the downstream of barrage and consequential issues; i.e., repeated damages to stilling basin appurtenances including rupture of skin concrete and leaking joints of mass concrete; sedimentation problems in DG Khan canal; choking of about 80% of pressure pipes and mal-functioning of the remaining 20%; and above all, operational problems of gates and hoists.

To comply with Pakistan as well as international financer’s social and environmental safeguards policies, environmental impact assessment was carried out to predict social and environmental impacts of the project during construction as well as operation phases. The environmental management and monitoring plan (EMMP) as well as a resettlement action plan (RAP) were also developed to mitigate the anticipated adverse social and environmental impacts.

The environmental and social impacts anticipated and identified during monitoring were: • Biological Impacts: Impacts on Taunsa wildlife sanctuary; threats to Indus dolphin upstream or downstream; Impacts on algae and micro-invertebrates; impacts on fish fauna; • Physical Impacts: change in river morphology; waterlogging; impacts on water quality; changes in ambient air quality; increased noise levels; and

40 • Social Impacts: Community displacement and resettlement; pending claims/grievances of project affected persons (PAPs); disturbance in fishing; disturbance in business; economic stability to canal command area; social mixing; downstream fish catch.

All these issues were well addressed during construction phase. The most significant positive impact of TBERM project is the sustainability of the agriculture ecosystem in the canal command areas which otherwise could result in desertification of the entire land, in case of failure of the barrage.

PHYSICAL QUANTITIES AND FINANCIAL TABLES - All the project works were completed within schedule time and cost. - The total project cost has remained within the approved PC-1 outlay. - The table showing the breakup appears as Table-I. - The project has been constructed/completed under two International Contracts. The physical quantities completed for ICB-01 are contained in Table-II. - The expenditure on ICB-01 works comes to Rs. 4,974,084,181/- as detailed in Table-III. - All the works have been completed by ICB-02 Contractor in December 2008. - The total expenditure on ICB-02 is Rs. 1,877,403,517/- as detailed in Table-IV. - Since the expenditure is within the approved cost, the economic studies will not yield any significant change in the EIRR calculated earlier.

LESSONS LEARNED

Based on detailed discussions with the government project team and consultants on the lessons learnt from the Project, the following inferences can be drawn for preparation and implementation of similar projects:

Project Design and Preparation: • Project Design should include a component of social and environmental management along with mitigation/support measures. • Adequate orientation / training for PMO and consultants staff on the World Bank safeguards policies is very important. • A Communication Strategy and Program about canal closure should be part of the project preparation to ensure a smooth implementation of the Project. • A PMO fully staffed with competent specialists in all aspects/needs should be on board by project approval and a mechanism should be in place to avoid frequent staff turnover. • Key Borrower actions such as approval of PC-I, EIA, and convening of POE for review of feasibility study and engineering design should be completed before Bank’s approval. • The procurement process for key works, goods and consultants services required during the first year of the project should be at an advanced stage by project negotiations, so that disbursements commence immediately after effectiveness of loan agreement. Likewise, issues such as processing and decision making about project procurements should be streamlined to avoid unnecessary delays. • Constructability of engineering design should be reviewed thoroughly in design phase for execution of the contract in accordance with schedule.

41 • An orientation/training for familiarizing the PMO staff and supervision consultants about World Bank procurement guidelines and safeguard policy at project launch would help improve project implementation.

Project Implementation • A high-level Project Steering Committee (PSC) and effective coordination mechanism in the government prove to be a main success factor in resolving key issues in a timely manner. • A Project Implementation Plan (PIP) prepared during project preparation would be a very valuable guide for all project staff to avoid ad hoc planning; • A well-thought out planning process is important for proactive environmental and social management; • Procurement for consultancy services and works should be done in time to avoid missing critical working periods such as annual canal closure/low flow period. • Supervision Consultants should be properly staffed with contract management, and Environment, Health and Safety (EHS) staff at site. • Contractor’s relations with local community are important for smooth implementation. • International Panel of Experts (POE) is an effective way of independent review and quality enhancement. • Level of commitment and competency of Implementing Agency management and PMO core staff are critical to project success. • There should be certain mechanism built-in the contract document to ensure that the construction contractor fully complies with EMMP of the Project. • Implementation of resettlement action plan (RAP) and other project activities involving interaction with local communities should be implemented through the process of social mobilization. Involvements of rural support networks such NRSP, PRSP can provide valuable assistance. Implementing Agency (IA) role in such a case shall of a monitoring the progress.

Financial Management • It is essential that anomalies arising due to application of the Government procedures versus financing agency’s procurement guidelines needs to be clearly defined. • It is necessary that Provincial Government including the Finance and the Audit Department understand the procedure and discipline intended for implementation of the project, subsequent audit observations discourage the pace of the project. • A sound financial management, accounting and reporting system managed by qualified staff is a key element for a smooth implementation of the project. Considerations should be given to out-sourcing certain aspects of financial management to professional firms, instead of setting up in-house system.

TRANSITION ARRANGEMENT TO ACTUAL OPERATION AND FUNCTIONING OF TAUNSA BARRAGE

Before the Project Taunsa Barrage was being operated and maintained by Taunsa Barrage Division. To ensure that the construction operations proceed smoothly, Taunsa Barrage Division as a whole was transferred to PMO for Punjab Barrages. The Division has been operating the

42 Barrage during the construction period and is handling the functional issues after completion also. No additional operation or maintenance arrangements are needed. The Taunsa Barrage Division will continue to responsible for the operation and maintenance for future also. The work as such is not to be transferred to any other organization nor is such an organization needed to be created.

If the PMO for Barrages is transformed into BMO (Barrage Management Organization) as envisaged in the project preparation of PBIP II, the Division will keep functioning with the BMO or else transferred to the original Irrigation Zone of D. G Khan. This will be only an administrative change and will not require any new arrangement, both institutional and financial. The maintenance funds will be continued to be released through Chief Engineer D. G Khan.

PERFORMANCE EVALUATION BY PMO

Bank performance

Rating: Satisfactory

Right from start of the project till ending, the Bank performance remains satisfactory. All the required NOL from Bank got well in time, withdrawal applications were processed in time by the Bank, close co-ordination throughout the project implementation was the key for timely completion of the project. The Bank performance during the project is therefore assessed as Satisfactory.

Borrower’s performance

Rating: Satisfactory

PMO as implementation agency performed well. During the execution of the project, PMO officers visited the site after every 15 days in order to have progress review meetings with both the Contractors of World Bank funded and with Contractors of JICA Grant in-aid funded. They also conducted co-ordination meetings of all the Contractors working at Taunsa Barrage along with the Consultants of World bank funded and JICA Grant in-aid. The performance of implementing agency during the project is therefore assessed as Satisfactory.

JICA’s performance

Rating: Satisfactory

During the execution of the project, the JICA also performed well. All the payments were made timely and their co-ordination with the implementing agency, consultants and contractors were excellent. The performance of JICA during the project is therefore assessed as Satisfactory.

TABLE-I - PROJECT COST SUMMARY -COMPONENT WISE

Description Actual Cost Civil Works (ICB-01 Contract) 4,539.91 Mechanical and Electrical (M&E) Works B-1 1,687.05 ICB-02 Contract (World Bank Funding)

117.77 Variation due to Exchange Rate B-2 2,778.84 (i) JICA Grant-in-Aid (ii) Recipient Country’s Share 109.13 Sub - Total (i+ii) = 2,926.89 2,887.97 Sub - Total B, (B1+B2) 4,692.79 Project Management Support and Technical Assistance 383.23 Total Base Costs (A+B+C) 9,615.92 Physical Contingencies @3% on Civil and E & M Works - Escalation @6% on Local and 2.5% on Foreign Currency Base Cost 653.02 Taxes and Duties etc @ 12.5% of Foreign Exchange Component - Interest During Construction @ 9.23% on Local and 5% on Foreign 207.00 Front end fee for World Bank Loan 36.59 (As per Loan agreement with Exchange rate of 1Yen = 0.5583 Rs) TOTAL PROJECT COST 10,512.54

TABLE-II - ICB-01 CONTRACT

Overall Physical Progress Summary

BOQ Sr No Item Units Total Work done Provision

1 Earthwork Excavation Cft 20,114,222 20,063,577

2 Embankment Cft 8,452,500 9,293,468

3 Dismantling of Existing Stone Pitching Cft 71,950 292,141

4 Steel Sheet Piles Sft 384,692 421,128

5 Concrete Class A Cft 5,967,100 7,156,984

6 Concrete Class B Cft 2,288,800 2,438,115

7 Concrete Class D Cft 254,397 456,144

8 Concrete Class E Cft 786,100 547,103

9 Steel Reinforcement Ton 5,604 6,666

10 Dismantling of Concrete Cft 1,259,260 820,482

11 Drilling and Grouting Inches 164,124 173,121

12 Vibrating Wire Piezometers No. 120 119

13 Stand Pipe Piezometers No. 14 11

14 Stone Apron Cft 4,175,700 5,136,238

15 Filter Material Cft 539,900 589,661

16 PVC Water Stop Type A L Ft. 9,348 85,539

17 PVC Water Stop Type B L Ft. 140,090 7,619

18 Rawl Bolts No. 14,295 8,762

19 Gate Equipment for Navigation Lock Bay Set 1 1

20 Stop logs for Gate of Navigation Lock Bay Set 1 1

21 Slide Gate Equipment for Fish Ladders Set 1 1

TABLE-III - CONTRACT NO. CIVIL WORKS

SUMMARY

Sr. Total Work Executed Description No. (Pak Rupees) A B C 1 General Items 938,653,381 2 Sub Weir 2,742,068,398 3 Guide Bank 119,063,209 4 Repair Works of Existing Barrage 397,066,002 5 Silt Excluder in U/S right Pocket 37,589,900 6 Excavation of diversion channel 2,183,652 7 Remodeling of DG Khan Canal Head Regulator 5,539,588 8 Remodeling of Fish Ladder Existing Barrage 17,259,698 9 Gate Equipment for Sub Weir 24,445,019 Sub Total for BOQ Bill 1 to 9 4,283,868,848 1 Variation Orders 421,616,647 2 Provisional Sum/Prime Cost Items 2,219,626 3 Day work Orders 148,816 4 Discount (346,655,823) 5 Sub-Total 4,361,198,114 6 Amicable settlement Amount 125,000,000 7 Deduction of Rent on account of Camp facilities used by the Contractor (4,928,000) 8 Miscellaneous items 58,636,400 9 Sub-Total 4,539,906,514 10 Price Adjustment under Clause 70.3 (Provisional Sum) 481,163,859 11 Total Amount (Rs.) 5,021,070,374 12 Other sums due under the Contract (Clause 60.1) DRB Expenses 5,987,015 13 Total Amount Payable 5,027,057,389

TABLE-IV - CONTRACT NO. MECHANICAL AND ELECTRICAL WORKS

SUMMARY

Sr. No. / Total Workdone (PKR) BOQ Bill Description No. BOQ Items A B C 1 General Items (Less Prov. Sum) 159,441,318 132,471,160 2 Rehabilitation Works of Under-slucies Gates (Less Prov. Sum)

3 Rehabilitation Works of Weir Gates (Less Prov. Sum) 633,343,627

4 Rehabilitation Works of Canals Head Regulator Gates (Less Prov. Sum) 48,592,756

Modernization of Hoisting Mechanism and Installation of Discharge Monitoring 5 121,647,083 and Communication System

6 Electro-Mechanical Works of Lock Gates 18,874,214

7 Electro-Mechanical Works of 11 Left & 4 Right Under-sluice Gates) 57,921,893

8 Rehabilitation Works of Canals Head Regulator Gates 164,247,732

Installation of water Discharge Data Acquisition System /Modernization of 9 14,682,138 existing Gates Hoist Mechanism.

10 Spare parts Tests & Mechanism 15,318,663 11 Discharge Monitoring and Communication Network 48,118,096

12 Work Shop Equipment 18,436,565

Equipment/Instrument Required for Survey, GIS Related Hardware, Software 13 29,587,573 and date Observation.

14 Central Operation Control Room 10,928,006 Total Amount (Bill No. 1 to 14) 1,473,610,823 15 Discount (14,810,560) 16 Variation Orders 228,576,865 17 Sub-Total 1,687,377,128 18 Credit to Employer on account of Scrap material (328,320) 19 Sub-Total 1,687,048,808 20 Adjustment due to currency conversion rates 117,770,089 21 Total 1,804,818,897 22 Price Adjustment under Clause 70 171,861,010

23 Grand Total 1,976,679,907 Note: 1 US $ = Rs 59.90

48 Annex 6. Comments of Co-financiers and Other Partners/Stakeholders

None

Annex 7. List of Supporting Documents

Document Date Bank Mission Aide Memoires Preparation Mission June 2004 Appraisal Mission September 2004 Project Launch Workshop and 1st Supervision Mission May 2005 2nd Supervision Mission November 2005 3rd Supervision Mission March 2006 4th Supervision Mission September 2006 5th Supervision Mission Oct/Nov 2006 6th Supervision Mission (MTR) April 2007 7th Supervision Mission September 2007 8th Supervision Mission Mar/Apr 2008 9th Supervision Mission November 2008 10th Supervision Mission (ICR) January 2010 Resettlement Missions (2) Aug-Nov 2005 Other Documents Date Feasibility Study Report 2004 Design Report 2004 Project PC-1 (Revised) May 2006 Revised PC-1 for Integrated Rural Development Project for Poverty Alleviation in Southern Punjab y PRSP July 2007 Technical Annex February 18, 2005 Loan Agreement March 24, 2005 Project Agreement March 24, 2005 Environmental and Social Impact Assessment 2004 Environmental Management and Monitoring Plan (EMMP) 2004 Change Management Statement (CMS) - 1 2006 Change Management Statement (CMS) - 2 2007 Drilling & Grouting Report 2006 Quality Assurance & Quality Control Report 2006 Monthly Progress Report Various Mid Term Review (MTR) Report 2007 Operation & Maintenance Manual 2008 Quality Assessment Report 2008 Drilling & Grouting Report ( Final) 2007 Standard Operation Procedure for Regulation of Silt Excluder 2007 Traffic Management Plan 2006-07 Quarterly Progress Reports Various Emergency Preparedness plan (EPP) 2007 Resettlement Action Plan (RAP) 2005 Environmental Baseline Survey and monitoring for Taunsa Barrage Project (Detailed Analytical baseline survey completion report WWF) 2006

50 Environmental Baseline Survey and Monitoring of Taunsa Barrage Emergency Rehabilitation and Modernization Project (WWF) Technical Progress Report 2006 Environmental Baseline Survey and monitoring for Taunsa Barrage Project (Biological aspects) 2006 Environmental Baseline Survey and monitoring for Taunsa Barrage Project (Socio Economic Aspects) 2006 RAP Implementation completion Report Final 2006 Monitoring and evaluation report for dissemination of information on annual canal closure February 2007 Terminal progress report by communication specialist (Field Survey Report) April 2007 Impact assessment of remedial measures for extended canal closure July 2007 Panel of Experts (POE) Report on Environmental and Social Issues August 2007 Socio economic monitoring of Taunsa Barrage wild life sanctuary (WWF) By: Sadia Ayesha March 2008 Detailed Air & Water quality monitoring report (WWF) By: Rizwan Mehmood March 2008 Environmental Audit Report October 2008 RAP Implementation Evaluation Report December 2009 Project Completion Report by PBC January 2010 Islam Barrage: Final Design Report June 2009 Islam Barrage: Environment Impact Assessment Report September 2009 Islam Barrage: Project Report September 2009 Islam Barrage: PC-1 Proforma (Final) September 2009 Jinnah Barrage: Inception Report January 2008 Jinnah Barrage: Environment and Social Assessment Report July 2009 Jinnah Barrage: Project PC-1 August 2009 Jinnah Barrage: Design Report September 2009

Annex 8. Environment Management

Background

Prior to appraisal and in compliance of the Bank’s policies and procedures and the provisions of the Pakistan Environmental Protection Act 1997, an Environmental Impact Assessment (EIA) of the Project was carried out by consultants who had earlier prepared the feasibility study report for the Project. The EIA included an Environmental Management Plan (EMP) and a Social Framework Agreement (SFA). A public hearing to discuss the draft EIA was held in Dera Ghazi Khan on August 23, 2004, following which the Punjab Environment Department (PED) cleared the EIA on September 6, 2004. The clearance was, however, subject to a number of conditions, including requirements that (i) the results of monthly environmental monitoring be submitted to PED, (ii) unskilled labor and, to the extent possible, the skilled labor, should be hired locally, and (iii) trees should be planted. The EIA was made publically available at the office of the District Officer (Environmental) in Dera Ghazi Khan, and in the Punjab Public Library, Lahore. The SFA was signed with the community members residing in the vicinity of the Project site on March 12, 2005. The Bank processed the Project as an environmental category B emergency intervention.

The appraisal mission of September 2004 suggested certain amendments to be made in the EIA of which the PED was to be duly notified. These were:

• A clearer statement that winter flows in canals, and winter barrage pool levels, will remain within the maximum and minimum limits of the last five years; • An assessment of whether the currently identified borrow sites will be sufficient to provide the estimated requirement of 45.5 million cubic feet of fill material. If this is not the case, the final EIA will clearly identify any additional sites required to meet this total. • For all borrowed sites and work bases, the EIA will establish current usage, and provide for compensation if this is required to maintain livelihoods; • A requirement that the final EIA be provided to the National Council for the Conservation of Wildlife (NCCW), with a recommendation that since no ecological change is anticipated as a result of the Project, no notification need be sent to the Ramsar Secretariat; • A statement that the advice of the Panel of Experts was to not proceed with the proposed J-spurs, together with a recommendation that any such work within the boundaries of the wildlife sanctuary would require a more detailed ecological baseline and impact assessment; • A clarification that the proposed annual environmental audits be conducted by an independent third party.

52 • Clause regarding environmental and social obligations will be incorporated into the bidding documents for work contracts and also in agreements with consultants. An additional requirement would be that the civil works contractor appoint an officer with full-time responsibility for Environment, Health and Safety (EHS); • More effective designs for migration systems for aquatic vertebrates will be assessed and if feasible adopted; • A Memorandum of Understanding (MoU) will be signed between IPD and WWF to collect baseline data regarding the Taunsa Wildlife Sanctuary situated upstream of Taunsa Barrage over an area of 6,567 hectares, and subsequently monitor changes during Project implementation. This sanctuary is listed as a site under The Convention on Wetlands of International Importance i.e. the Ramsar Convention; and • Include an item in the supervision consultant’s contract (a provisional sum) to develop designs for remodeling of the existing fish ladder as an example for other barrages, and an undertaking from IPD to remodel the Taunsa fish ladder in line with new designs. The EIA, however, did not anticipate that (i) the communities living downstream (illegally on government lands) of the Taunsa Barrage on both banks of the Indus River might have to be shifted to provide space for contractors facilities necessitating their resettlement, and (ii) there could be extended canal closures which would have resulted in reduction of rabi season water supplies inducing lower crop production and shortage of potable water in the canal command areas. Accordingly, a Resettlement Action Plan was not prepared as part of the EIA.

Salient Features of the EMMP

The Environmental Management and Monitoring Plan (EMMP), which was developed from the EIA EMP, is a tool to implement the mitigation measures and monitor their progress and impacts. The EMMP laid down mitigation measures and actions to be taken, parameters of monitoring, functionaries responsible for monitoring and the frequency of monitoring in the following areas of concern:

• Land resources ƒ Sites for extraction of fill material ƒ Subsidiary weir ƒ Labor camp ƒ Access paths/roads ƒ Relocation of camps and approaches ƒ Contamination from diesel and other spills • Water resources ƒ Diesel and other fluids spilling over to river ƒ Water source for construction and other uses ƒ Subsidiary weir and other associated structures • Air quality and noise pollution ƒ Dust, smoke and other potential pollutants ƒ Smoke from burning of waste material or firewood

53 ƒ Noise from use of outdated machinery • Biological resources ƒ Damage to biological resources in general ƒ Damage to Indus dolphin ƒ Disturbance to upstream wildlife sanctuary (a Ramsar site) • Socio-economic and cultural issues ƒ Education, health, electricity, drinking water, public gathering and religious congregation ƒ Tribal tension, local rivalries on running canals and use of aquatic life ƒ Adverse effects on archeological sites and graveyards ƒ Public safety at construction site ƒ Employment opportunities ƒ HIV/AIDS • Restoration

The EMMP also included an impacts monitoring plan, an emergency response and contingency plan, a waste disposal plan, instructions on communication and documentation, change management, training, and post–completion restoration and rehabilitation.

Change Management Statements

During the implementation of the Project, two Change Management Statements amended the EMMP. The first statement was necessitated due to new land requirements and activities that were not anticipated earlier and the recognition that the boundaries of the wildlife sanctuary extended southward to the gate line of the barrage and not up to the north of the barrage guide banks as earlier understood. Major changes were, therefore, required to be made in the EMMP. The second statement was triggered by the fact that for carrying out Project activities, the three canals emanating from the barrage had to be closed, in the rabi crop season, for longer periods than the normal.

In Change Management Statement 1, the following changes necessitated determining of new possible impacts and suggesting suitable mitigation measures: (i) shifting of a part of the contractor’s labor camp to a new site which will also house certain other facilities; (ii) work places on the right and left side downstream will be expanded to accommodate certain other facilities; (iii) construction of silt excluder and cofferdams on upstream side; (iv) installation of piezometers; (v) fabrication and installation of gates; (vi) grouting activities; (vii) workplace for ICB-02 contractor; (viii) construction of jetty; (ix) extended closure of D.G. Khan Canal; (x) lead channel to feed D.G. Khan Canal; (xi) change of earth borrow areas; and (xii) upgrading of fish ladders. In Change Management Statement 2, the following factors became the cause for amending the EMMP and for determining possible impacts and suggesting mitigation measures: (i) extended canal closure of all the three canals off taking from the Taunsa Barrage; (ii) construction of cofferdams on left side upstream; (iii) provision of pre-cast concrete blocks all along the left bank worksite, (iv) provision of barbed wire fencing; (v) use of Chief Resident Engineer’s office

54 building as residence of ICB-02 contractor; and (vi) social issues related to the left side work site and dislocation of people.

Implementation of EMMP

Implementation was carried out by the staff of PMO (Deputy Directors of Environment and Sociology), supervision consultants and contractors whose duties were defined. They would ensure that actions were duly and timely taken and submitted daily, monthly and annual reports to their superiors for information. A weekly summary of non-compliances was also submitted to superiors so that they could take remedial actions. The World Bank supervision missions visited work sites, reviewed and discussed reports and agreed on further actions.

The mitigation measures largely succeeded in reducing the likely adverse impacts due to Project activities although the needed actions were sometimes delayed and not completely followed through. Some of the indicators of success were: (i) sufficient water levels were maintained upstream and downstream to allow free movement of the Indus dolphin to forage and to carry out reproduction; (ii) there was no adverse effect of the Project on fish fauna because river discharge and pond levels were suitably maintained; (iii) the various river water quality parameters were found to be within safe limits during the Project period; (iv) air quality results were normal except that particulate matter in the air remained high; (v) noise levels were generally within safe limits; (vi) the Project has not caused any change in river bed configuration, its active flood plain or the morphology of its channels so as to produce any adverse effect on downstream fishery; (vii) the buffer zone between the river and the worksite on the right bank was enforced; (viii) a traffic management plan was prepared and implemented; (ix) compensatory trees were planted; and (x) safety measures adopted were adequate.

Non-compliance was reported relating to solid waste management, burning of fuel wood, and review of fish ladders designs and their effectiveness. There was no adequate emergency response system in place at the work site which once resulted in the breach of a coffer dam causing extensive damage. For a short period, the supervision consultants did not have any environmental expert and the expert when available was not site-based with the result that response to emerging issues was delayed.

Some important incidents/accomplishments are mentioned below:

Indus Dolphin Incident: Death of two Indus dolphins in the vicinity of the Taunsa barrage was reported in January 2006. Investigation was conducted separately by PMO staff, supervision consultants, WWF and Wildlife Department officials. The final report by WWF concluded that only one dolphin was involved and this was released into the river after becoming entangled in a fishing net, although its subsequent survival was uncertain. Because of the incident, surveillance was enhanced by appointing a person from the community, who was provided with a boat, to patrol the area regularly. Also, one staff each of the contractor and supervision consultants, were trained in dolphin handling by the Sindh Wildlife Department. The contractor also set up and

55 provided basic training to a Dolphin Rescue Team, and employed a game watcher to ensure the protection of the Indus Dolphin and other species

Baseline Survey of the Taunsa Barrage Wildlife Sanctuary: WWF-Pakistan was contracted to provide an environmental baseline survey of the Taunsa Barrage Wildlife Sanctuary. The final version of this report was submitted to the PMO in August, 2006. The report noted a range of threats to the wildlife sanctuary, including a variety of forms of resource extraction, as well as hunting and fishing. In particular, the report noted that Hog Deer, endangered nationally, was at risk of becoming extinct within the sanctuary, as the population was not viable and was not connected to other populations. The report also recorded some 25 Indus Dolphins within 2.5 km of the Barrage, and noted that these appeared to have been displaced by the disturbance arising from project activities. The report concluded with recommendations for the Government of Punjab to enhance the preservation of this valuable sanctuary and for IPD to minimize the disturbance to the sanctuary due to construction activities under the Project. Not all recommendations of the report were implemented.

Health and Safety at Construction Sites: It was noted that both contractor and supervision consultants were ensuring implementation of the requirements of the EMMP and monitoring and reporting performance including any safety incidents. Personal protective equipment comprising hard hat, protective overall and site safety boots (except protective gloves) remained in use. Training related to health issues, specifically HIV/Aids and Hepatitis awareness and prevention was provided to all site personnel.

Panel of Experts on Environmental and Social Aspects: An international panel of experts, comprising of two international experts and a local expert, reviewed Project activities in August 2007. The purpose was to assess the adequacy of the program for attending to the important environmental and social issues and make recommendations on how to enhance the management of environmental and social aspects and plan future investment Projects. The panel commended the work done so far and made the following recommendations: strengthen PMO by establishing a directorate of environment, headed by a director (new position) and manned by two sociologist (one new position) and one environmentalist; improve the progress reporting system; foster better communication with Project affected people, and carry out an environmental audit of the Project. These recommendations were duly implemented.

Environmental Audit: The audit report was prepared by a locally hired consultant in October 2008. The report provides an account of environmental mitigation and management activities during Project implementation. The main deficiencies pointed out were: the EIA did not visualize that the squatter communities living on both banks of the river would need to shift; extended canal closures were not anticipated; and the suitability and performance of existing fish ladders was not assessed. Main recommendations made were: a program for monitoring the performance of fish ladders be prepared and implemented; ground water table monitoring be carried out on a regular basis; and the pending claims of displaced persons be settled. The auditor certified that overall the environmental and social concerns were well addressed and, on the basis of assessment made, the Project is environmentally and socially satisfactory. In compliance of this report, claims of displaced persons were settled but no action could be taken on the other recommendations.

Lessons Learned

• Project design should include a component of environment and social management along with mitigation and support measures; • For better monitoring of actions to be taken under the EMMP, an environmentalist should be stationed at the project site throughout the project period; • Project and consultant staff should be made familiar with World Bank safeguard policies and trained in their implementation.

Annex 9. Implementation of the Resettlement Action Plan

Background

The Taunsa Barrage Emergency Rehabilitation and Modernization Project did not expect to require any land acquisition or involuntary resettlement during its preparation. Impact screenings and surveys, carried out as part of the project feasibility study and detailed designs, concluded that the project would not cause any land acquisition and resettlement impacts. This finding was confirmed through the Environmental Impact Assessment.

However, at the mobilization stage for construction, the contractor requested a change of working areas for their construction operations. This request would require the relocation of two villages living on the embankment lands owned by IPD near the barrage on both sides of the river. IPD agreed to this request without consulting the World Bank, rushed through the relocation planning process and moved the two villages in June 2005 to two new sites within half a kilometer distance. This process did not follow World Bank Operation Policy (OP 4.12) on Involuntary Resettlement.

The World Bank learned of this through a local NGO in July 2005. The World Bank carried out immediate investigative missions and reviewed the consultation, planning and relocation process. The World Bank team concluded that the process was not in compliance with World Bank OP 4.12 and required the carrying out of necessary planning steps to develop a resettlement action plan (RAP) in line with relevant domestic and World Bank policies. A RAP was developed with assistance of local and World Bank experts and in consultation with the affected communities. The RAP was finalized and approved by the IPD and the World Bank in November 2005.

RAP Summary

The objective of the RAP was to restore the livelihoods of the affected population regardless of their legal status. Key features of the RAP included:

• Social economic survey of project affected persons (PAPs). There were 160 households displaced (137 on the left bank and 23 on the right bank). These households were located on IPD embankment lands without titles. Their main occupations included working as fishermen on contractors’ boats, odd job, broom and basket making. Identity cards were issued to all households. • Project impacts and entitlement. Major project impacts included loss of use of IPD land for residential purpose, residential structures and associated structures. A list of PAPs and an impact inventory was developed in consultation with community members and an entitlement policy was prepared. The entitlement package included compensation for loss of residential structures, new residential sites, income loss during shifting, vulnerability allowance, restoration and development of community facilities.

58 • Grievance redress. This system included a Grievance Redress Cell (GRC), a grievance registration book, an on-site public information office and a two-tier review mechanism to review and determined on grievances filed. • Institutional framework. A Resettlement Task Force headed by Head PMO was constituted to oversee the implementation of the RAP. Its members included representatives from the Assessment and Compensation Disbursement Cell (ACDC), Community Development Cell (CDC) and GRC. • RAP monitoring. Internal monitoring of activities was to be done by PMO through the Resettlement Task Force (RTF) while external monitoring was to be carried out by resettlement consultants hired by the PMO. The consultants were also to carry out a final evaluation of the resettlement work carried out.

Initial RAP Cost. It was estimated at Rs.12.42 million

RAP Implementation

Payment of compensation and allowances: In line with the entitlement policy in the RAP, all household compensation funds and allowances were delivered to the entitled households. Additional allowances were provided as a result grievances resolution.

Resettlement site development: The new sites on each side of the bank are located on IPD lands about 0.5 km away from the old settlements. These were laid out on an area of about 2.8 hectares. The sites are next to the barrage and its management facilities, with good potentials for employment and business development. Village layout plans of both sites were prepared and shared with, and publically disclosed among, the resettled and host communities. On these layout plans, the residential areas, community infrastructure and facilities were mapped.

Housing, community infrastructure and livelihood support: Individual house plots were allocated among the entitled households. All households were able to build their own houses with the compensation money received and moved into their new houses. In all, 137 households were resettled on the left bank and 23 on the right bank.

While there was hardly any community infrastructure before, basic community infrastructure were planned and provided at both sites. These included open sewage drains, community toilets with showers, flushing latrines, household electricity connections, link road and paved streets, mosque and schools. The communities were provided access to medical services set up by the construction contractor during the construction period. The PMO established a 12-bed basic health unit and turned it over to the District Health Department to service the local population, including the resettled communities. The host communities also benefited from the infrastructure development programs.

The main economic activities of these communities are broom and basket making and fishing. A large number of people among PAPs were working as fisherman under the fishing contractors. The project did not have any immediate impacts on their livelihood activities. The project gave priority to eligible members of the communities in its construction jobs. About 136 local people took up employment with the contractor, including 66 PAPs. The communities also requested

59 IPD help to obtain concessionary fishing rights for them. Despite tremendous efforts, the IPD was not successful due to conflicts with relevant local laws. A lump-sum of Rs 1.16 million was provided to the community instead. Public consultation and participation: The RAP followed a consultative and participatory fashion for its implementation. This was managed through public meetings and individual household interviews. Relevant project information, particularly the RAP entitlement policy, was shared with both communities. All grievances and requests as well as resolution decisions were disclosed to the community members. The project office kept its continuous presence in the villages through its staff and experts from the supervising consultants. This provided direct access to the community members over project progress and grievance resolution. Women actively attended such community gatherings and were on the Resettlement executive committee.

Management set-up: The Project Management Office set up a Resettlement Task Force that included the Assessment and Compensation Disbursement Cell, the Community Development Cell and the Grievance Redress Cell. The Head PMO, assisted by his deputy directors (environment and sociology), assumed the overall responsibility of the RAP implementation. These units were staffed by PMO staff, IPD site engineers, consultant experts, supervising engineer consultant and community representatives. Their responsibilities were gradually expanded as the RAP implementation evolved. This system proved to be quite efficient in managing the RAP program.

Grievances mechanism: The Grievance Redress Cell (GRC) was established comprising of resettlement/supervision consultant, a sub-engineer stationed at Taunsa barrage, and a PAP representative. An open register was available at the site Public Information Centre where all grievances, both oral and in writing, were registered. The grievances were reviewed and decisions were made at the GRC. A Second Tier Grievance Committee was later established at the Planning and Development Department level to further review grievances that were not resolved at the GRC. This system worked very well.

Resettlement cost: The total resettlement cost at completion was Rs.31.85 million, including a compensation amount of Rs.14.7 million and Rs.17.15 million for additional community infrastructure. The cost increase (above the initial estimate) was largely due to the additional infrastructure required and additional allowances for the PAPs.

Monitoring and evaluation: The PMO played a very rigorous role in the RAP implementation. The PMO Head took the RAP implementation directly under his responsibility and continuous presence of PMO staff was maintained at the site and in the resettlement villages, including on environment specialist and two sociologists to monitor and supervise the RAP implementation. A sociologist of the supervision consultants, in the later stages, was stationed permanently at the Taunsa barrage to do internal monitoring. A resettlement consultant was engaged externally to monitor RAP implementation. The PMO prepared a final resettlement implementation evaluation report in December 2009.

Performance Evaluation and Lessons Learned

60 The PMO engaged an independent consultant to carry out an evaluation of the RAP implementation. On the basis of the regular monitoring data, the evaluation was conducted through a community survey, group meetings and interviews of key informants. The evaluation concludes that the RAP program has managed to mitigate the adverse impacts of the project and has improved the living conditions of the affected households through better residential housing, improved and new community infrastructure and facilities, better social services and a brighter prospect for development at the rehabilitated barrage, and an enhancement of social prestige as a new community. The project experienced a quick turnaround from its initial problems to smooth implementation in its resettlement program. These have yielded important lessons.

• Realization that people affected should be assisted in mitigating the project adverse impacts regardless of their legal status is pivotal in this turnaround. This, partially for compliance with the World Bank policy, changed the PMO’s attitude and approach in the resettlement implementation. • Quality in planning carries significant implications for implementation outcome in resettlement programs. The initial simplistic and rushed approach skipped the required planning steps and led to many of the grievances and cost increases later. The resettlement planning exercise immediately after laid a good foundation for its smooth and successful implementation. • Resettlement planning and implication requires continuous consultation with and participation of the affected communities. This mechanism ensured the ownership of the resettlement program by the affected communities and their support in its implementation. • Strong leadership and dedicated staff members are critical in resettlement program implementation. Since the RAP was prepared and ready for implementation, the PMO Director provided strong leadership throughout its implementation, providing guidance, supporting operating staff and coordinating inter-departmental policy matters. The PMO was also privileged with a group of very committed staff members, dedicated not only to the program implementation itself, but also trying to assist to improve the livelihoods of the affected people. These made the program outcome possible.

61 74° TURKMENISTAN 70° 71° er 72° 73° 74° iv UZBEKISTAN TAJIKISTAN CHINA R t Up 36° a pe 36° w r S Approx. S w L a Line of Control o t C w a er na AFGHANISTAN Kabu Swat Ca l N.W.F.P. l R na JAMMU . l 34° AND TARBELA ISLAMABAD KASHMIR DAM JAMMU & 34° Area K 32° 32° ab KASHMIR of Map ul R.C. PUNJAB Approximate ISLAMABAD Line of Control PAKISTAN BALOCHISTAN 28° 28° Kohat SALAL DAM

SINDH INDIA MANGLA 33° ver DAM an Ri 33° So 24° Arabian 24° N.W.F.P. Sea 62° 66° 70° 74° RASUL Uppe JINNAH r J r BARRAGE he e BARRAGE lu Gujrat v m i C MARALA 68° 69° R . ver BARRAGE Mianwali Ri CHASHMA QADIRABAD KHANKI BARRAGE BARRAGE C HEADWORKS . l J. L a in n k l a 32° a r R C n e . a iv Q b C R a PAKISTAN . n 32° L e m i Chenab C. n h lu RAVI k e C h r J e SYPHON r p TAUNSA BARRAGE we p m o L Lower U u l e h J r EMERGENCY REHABILITATION l e iv a Lahore R n h s a c b n Faisalabad a C a a e AND s n r B B u e BALLOKI l T h d g a R C n BARRAGE n h I a T E h MODERNIZATION PROJECT J S TRIMMU 31° E B BARRAGE . H l S B

a . D a n . L v S FEROZEPUR i e a 31° n .

l e C i k BENEFIT AREA iv i L BARRAGE L r i R Ba I n i er k

A C v w o I L I

a Ra

H l n

MAJOR RIVERS T a a n l a SIDHNAI l C Sahiwal na BARRAGE ur Ca r Dipalp MAIN CANAL, BRANCHES AND RIVERS u p g

n T SULEIMANKE

T a . .P. R

TAUNSA S L BARRAGE in .

SYPHONS, BARRAGES BARRAGE k M . r

L e i SELECTED CITIES Multan n nal iv k R l Ca 30° a n

l Vihari a M a n j l C ta a n

NATIONAL CAPITAL u pat le r. n z k t a 30° a Pa u B C

a ISLAM h

C S a h n

f i f w a a

a a BARRAGE d w

h r

r n d g o r K h F o

PROVINCE BOUNDARIES a id MAILSI F . r t

h S as

G SYPHON C E . D l na al INTERNATIONAL BOUNDARIES Ca n Ca lsi ai wal M ha Ba Bahawalpur PANJNAD BARRAGE 29°

29° l a n a C ia l s a ba an b C A PUNJAB P d at a Fe jn ede un r Canal P Rahimyar Khan

Desert Canal GUDU al BARRAGE Can Jacabadad 28° ar ri Canal rth Baga er Ki ed 28° N Fe . tki W ho . G C a n al anal Watah C SUKKUR BARRAGE E G N l a T A n a R R C E e S 27° c i l E Hamal R a n D Lake a 27° C R R INDIA

A l a r A l n u a p H a H n r i C T a a T C h u

K R d

a R a I

o r D

h a

K r N i

a n BALOCHISTAN Manchhar a l Chotiari Lake Lake 26° In Sanghar d u 26° s R iv e r SINDH

KOTRI BARRAGE Hyderabad

L in e d 25° C a n l a a F l 25° Kalri n u 0 20 40 60 80 100 Kilometers l a e l Lake C i Karachi l i

a r C n a

y a a in

C P n 04020 60 80 100 Miles

a i l lr a K

This map was produced by the Map Design Unit of The World Bank. The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank Group, any Arabian RANN OF KUTCH 24° DHANDS & judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. COASTAL CREEKS IBRD 33568 MARCH 2004 24° Sea

67° 68° 69° 70° 71° 72° 73° 74°