Document of The World Bank FOR OFFICIAL USE ONLY Public Disclosure Authorized Report No. 4944 Public Disclosure Authorized PROJECT PERFORMANCE AUDIT REPORT PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN WADI HADRAMA&T AGRICULTURAL PROJECT (CREDIT 615-YDR) Public Disclosure Authorized February 16, 1984 Public Disclosure Authorized Operations Evaluation Department This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. WEIGHTS AND MEASURES Metric System British/US System 1 millmeter (mm) = 0.0394 inch 1 meter (m) = 3.2808 foot 1 kilometer (km) = 0.6214 mile 1 square kilometer (km 2 ) 0.3861 square mile 1 hectare (ha) = 2.4711 acre 1 cubic meter (m3 ) 35.3147 cubic foot 1 million cubic meter (Mm 3 ) 810.7000 acre foot 1 kilogram (kg) = 2.2046 pound 1 metric ton (ton) = 2,204.6000 pound 1 liter per second (1/sec) = 0.0353 cubic foot per second GLOSSARY OF ABEREVIATIGNS ADF - Agricultural Development Fund CA - Credit Agreement ERR - Economic Rate of Return HPO - Hadramawt Project Organization LAC - Local Advisory Committee MAAR - Ministry of Agriculture and Agrarian Reform ?MS - Machinery Renting Station MUV - Manufacturing Unit Value index NBY - National Bank of Yemen NCFT - National Company for Foreign Trade NCET - National Company for Home Trade PCMVF - Public Corporation for Marketing Vegetables and Fruits PCO - Project Completion Overview PCR - Project Completion Report PDRY - People's Democratic Republic of Yemen PWC - Public Water Corporation PWD - Public Works Department TSP - Triple super-phosphate WHPI - First Wadi Radramawt Project WHPII - Second Wadi Radramawt Project FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN WADI hADRAMAWT AGRICULTURAL PROJECT (CREDIT 615-YDR) TABLE OF CONTENTS Page No. Preface .......................... .................. ............. 1 Basic Data Sheet .................................................. ii Highlights ......................... ............................ iii PROJECT PERFORMANCE AUDIT MEMORANDUM ......................... 1 I. SUMMARY ............................................. 1 II. MAIN ISSUES ............................................ 4 A. Measurement of Project Benefits ................... 4 B. Sustainability of Project ....... .. 6 III. CONCLUSIONS ......... .......................... 11 IDA OVERVIEW OF THE GOVERNMENT OF PDRY PROJECT COMPLETION REPORT 13 PROJECT COMPLETION REPORT ............................................ 29 I. Background ................................................. 31 II. Formulation ........................................... 33 III. Implementation ...... .................. 40 IV. Agricultural Impact ...................................... 56 V. Economic Analysis .................................... 61 VI. Institutional Impact .............................. .. 63 VII. Special Issues and the Successor Project ................ 65 VIII. Bank Performance ................... ........... ....... 70 IX. Conclusions -... .................. .............. 71 Annex 1 - Tables 1 - 22 Annex 2 - Technical Assistance Agreement between PDRY and FAO Ma IBRD 11614 (PPA) This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. PROJECT PERFORMANCE AUDIT REPORT PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN WADI HADRAMAWT AGRICULTURAL PROJECT (CREDIT 615-YDR) PREFACE This is a performance audit of the Wadi Hadramawt Agriculcural Project, for which Credit 615-YDR in the amount of US$7.0 million was approved on February 17, 1976 under the special procedure. The Credit was closed on December 31, 1982 following a delay of three years. The Credit was fully disbursed and the final disbursement was made on September 10, 1982. The First Project was followed by the Second Wadi Hadramawt Project (Credit 1346-YDR, in the amount of US$9.0 million), which was approved on April 12, 1983. The audit report consists of a memorandum prepared by the Opera- tions Evaluation Department (OED), a Project Completion Report (PCR), and a Project Completion Overview (PCO). The PCR, of January 1983, was prepared for the Borrower by the. Project Manager, and the PCO, of June 1983, was prepared by the Europe, Middle East and North Africa Regional Office. The audit is based on a review of the Appraisal Report (No. 847a-YDR) dated January 12, 1976, the President's Report (No. P-1711a-YDR) of January 29, 1976, the Development Credit Agreement dated April 22, 1976, the PCO, and the PCR together with a review of correspondence with the Borrower and internal Bank memoranda on project issues as contained in relevant Bank files, and interviews with Bank staff who had been associated with the project. An OED mission visited the People's Democratic Republic of Yemen in July 1983 and held discussions with government and project officials, the manager and other officials of the date processing plant, and officers and members of cooperatives. These discussions and visits to project works and sites in the Wadi Hadramawt also contributed to the conclusions of.the audit. The audit suggested some minor technical changes to the PCO, which were accepted and included therein. On the basis of the above procedure, the audit agrees with the major findings of the PCR and PCO. However, in the memorandum the audit analyzes the sustainability of agricultural development in the Wadi Hadramawt and elaborates on problems of measurement of benefits of the project. OED wishes to acknowledge the very valuable assistance and informa- tion provided to the audit mission by government and project officials and the cooperatives which contributed importantly to the compilation of this report. A copy of the draft audit report was sent to the Borrower on November 7, 1983 for comments; however, none were received. PROJECT PERFORMANCE AUDIT BASIC DATA SHEET PEOPIE'S DENOCRATIC REPUBLIC W YENER WADI HADRANA5T AGRICULTURAL PROJECT (CREDIT 615-TDR) XEY PROJECT DATA Appraisal Actual or Actual as I of Esciate Estumated Actual Appraisal Estimate Project Coasts (USS million) 7.7 11.2 L5 Credit Amount (US adIlion) 7.0 7.0 L00 Disbursed - 7.0 - Repaid ) to November 30, 1983 - 0.0 - Outstaling ) 7.0 - Date Negotiations 12/15/75 L2/10-17/75 - Date Board Approval 02/17/76 02/17/76 - Date Effectiveness 07/21/76 09/16/76 - Dace Physical Components to be Completed 06/30179 06/30/82 - Proportion than completed (Z) 83 100 - Months to physical completion 40 76 190 Closing Date 12/31/79 12/31/B2 - Economic rate of return (Z) 17 S/ 57 CUMLATIVE DISBURSEMENTS n76/77 77178 T78/79 FT79/80 F80181 Fgl/82 FY82/83 Appraisal estimate (USS million) 0.221 2.080 4.806 7.0 7.0 7.0 7.0 Actual (USS million) - 0.390 0.794 2.536 4.250 5.812 7.0 Actual a I of appraisal (Z) 0 19 17 36 61 33 100 Dace of Final Disbursement: March 25, 1983/b MISSION DATA month/ No. of Mandays Specializations PerfoEmance Types of Mission Year Persons In Field Represented je Racing /d Trand/e Probleam/f Appraisal 01/75 4 20 TOcal 4 20 Supervision I 09/76 2 4 e.g 1 1 K Supervision II 05/77 3 4 b.eg 2 2 N Supervision III 03/78 2 4 ce 2 1 M Supervision IV 08/78 2 1 c 3 2 N,0 Supervision V L2/78 2 6 e.g 2 2 K Supervision VI 11/79 3 6 c.g 3 2 0.F.M Supervision VII 04/80 2 6 eg 2 1 0 Supervision VIII 11/80 3 4 C.eg 2 1 0 Supervision IX 05/81 3 7 c,e.g 2 1 0 Supervision 1 12/81 2 7 e.g 2 1 0 Supervision Xx 05/82 2 3 e.g 2 1 0 Total 26 52 Completion/S OTBER PROJECT DATA Borrower Cowernment of the People's Democratic Republic of Temen (PDRT) Coarseatr PDY Executing Agency Ministry of Agriculture and Agrarian Reform Fiscal Tear of Borrowar January 1 to December 31 Name of Currency (abbreviation) emSni Dinar (TD) Currency Exchange Rates: Appraisal Tear Average USS1.00 - ID 2.9 Intervening Tears Average USS1.00 - TD 2.9 Completion Tear Average USS1.00 - YD 2.9 Follow-on Project iame Secod Wndi Hadramswt Agricultural Development Project Credit Humber 1346-YD Amount (USS million) 9.0 Credit Agreement Date April 23. 1983 Is In 1982 prices (O. in 1978 prices). /b Date of approval of the last disbnrsement application. 7c a * Agroladustries Specialist: b - Agricultural Economist: c - Financtal/Credit Specialist; d - Livestock Specialist; e - Agriculturist- f - Marketing Specialiat: and g - Irrigation Engineer. /d 1 problem-free or minor problems; 2 - moderate problems: .nd 3 - major problems. Te'1 Improving; 2 - stationary: and 3 - deteriorating. 7 F * financial: H - managerial; 0 - other. Thare was no formal completion mission. - iii - PROJECT PERFORMANCE AUDIT REPORT PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN WADI RADRAMAWT AGRICULTURAL PROJECT (CREDIT 615-YDR) HIGHLIGHTS The project aimed to increase agricultural production by 70% on about 8,000 ha of cropland which were being irrigated by groundwater in the Wadi Hadramawt, a low-rainfall valley located in the mid-section of the People's Democratic Republic of Yemen, about 100 miles north of the Gulf of Aden. Production was expected to be increased through use of improved tech- nology which was to be promoted by a newly established extension service and supported by improved input supplies. The project also included development of infrastructure in the Wadi and a feasibility study to evaluate the poten- tial for further development of groundwater resources in the area and to provide future development plans for these resources. Estimated cost of the project was US$7.7 million. Of this total, US$7.0 million would be financed by Credit 615-YDR and the remaining US$0.7 million by the Borrower. At completion, total project cost amounted to US$11.2 million - a 45% cost overrun. This overrun was mainly due to the increased cost of labor (wages), infrastructural development, and construc- tion of a date packing plant which was more than double the size originally planned. The project also experienced a considerable completion delay of three years, representing a time overrun of about 90%.