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First Bank Mission Document of The World Bank Public Disclosure Authorized Report No: 25941-IND FOR OFFICIAL USE ONLY PROJECT APPRAISAL DOCUMENT ON A PROPOSED LOAN IN THE AMOUNT OF USS45.0 MILLION Public Disclosure Authorized AND A PROPOSED CREDIT IN THE AMOUNT OF SDR 17.9 MILLION(US$25.0 MILLION EQUIVALENT) TO THE REPUBLIC OF INDONESIA FOR THE Public Disclosure Authorized WATER RESOURCES & IRRIGATION SECTOR MANAGEMENT PROGRAM IN SUPPORT OF THE FIRST PHASE OF THE WATER RESOURCES & IRRIGATION SECTOR PROGRAM May 23,2003 Rural Development and Natural Resources Sector Unit Indonesia Country Unit East Asia & Pacific Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Public Disclosure Authorized CURRENCY EQUIVALENTS (Exchange Rate Effective 04/14/2003) Currency Unit = Rupiah IDR 1,000 = US$.113 US$1 = IDR8,853 FISCAL YEAR Government of Indonesia January 1 -- December 3 1 ABBREVIATIONS AND ACRONYMS ADB Asian Development Bank ADP Agricultural Development Project AMDAL Full Environmental Assessments APBD (K) Kabupaten Government Budget APBD (P) Provincial Government Budget APBN Central Government Budget APL Adaptable Program Loan ASEM Asia and Europe Management Fund AWP Annual Work Plan Balai PSDA River Basin Management Unit Bangda DG Regional Development, MoHA Bappenas National Development Planning Agency Bapedalda Local Government Environmental Office Bawasda Regional Internal Auditors BPKP Government Audit Agency BRI Bank Rakyat Indonesia BULOG Rice and Commodities Regulatory Body BWRC Basin Water Resources CounciVCommittee BWRh4 Basin Water Resources Management BWRMP Basin Water Resources Management Planning CAS Country Assistance Strategy CDD Community Driven Development co Community Organizer CQ Consultant's Qualifications DAFEP Decentralized Agric. & Forestry Extension Project DAU Dana Alokasi Umum, General Budget Allocation to APBD DC Direct Contracting DGWR Directorate General ofWater Resources, Min. ofKimpraswil Dinas PUP Public Worksmater Resources Dept. of Local Government DIPP Development Budget Allocation to APBD DIPP-LN Foreign-origin Development Budget Allocation to APBD DPIK Kabupaten Irrigation Improvement Facility (KIIF) DSA Dam Safety Assurance DSC Dam Safety Commission EMP Environmental Management Plan EOM Efficient Operation and Maintenance FMIS Farmer Managed Irrigation System FMR Financial Monitoring Report Go1 Government of Indonesia FOR OFFICIAL USE ONLY GP3AIIP3A FederatiodApex body of Water Users Associations (WUAF) GPN General Procurement Notice GTZ German Technical Assistance ICB International Competitive Bidding IET Independent Evaluation Team ILGRIP Initiatives for Local Governance Reform Project IMEU Impact Monitoring and Evaluation Unit IMRP Irrigation Management Reform Program INSUS Crops Intensification Program IOMP Irrigation Operation and Maintenance Policy IPEDA Land Tax ISF Irrigation Service Fee ISSP I1 Irrigation Subsector Project I1 IWIRIP Indonesia Water Resources & Irr. Reform Implem. Project JIWMP Java Irrigation Improvement & Water Management Project Juru Irrigation gate operator KDP Kecamatan Development Project KGRIP Kabupaten Governance Reform Initiative Project KIIF Kabupaten Irrigation Improvement Facility (DPIK) Kimpraswil Ministry ofSettlement and Regional Infrastructure KLH State Ministry Of Environment KPKN Central Government Treasury Local Branch KPIU Kabupaten Project Implementation Unit KPL Field Facilitator KPMU Kabupaten Project Management Unit MOA Ministry Of Agriculture MoHA Ministry Of Home Affairs and Regional Autonomy NBB Needs Based Budget NCB National Competitive Bidding NPIU National Project Implementation Unit NPMU National Project Management Unit NS National Shopping NSCWR National Steering Committee For Water Resources NWC National Water Resources Council O&M Operation and Maintenance PBB Land & Building Tax PCAR Procurement Capacity Assessment Report Perum Government-owned Corporation PISP Participatory Irrigation Sector Project (ADB) PIU Project Implementation Unit PJT 1/11 Bulk Water Supplier Corporation I/ I1 PKPI Irrigation Management Reform Policy PMM Project Management Manual POJ Jatiluhur Authority Corporation (= PJT 11) POM Plan ofOperation and Maintenance PPIU Provincial Project Management Unit PPMU Provincial Project Management Unit PPTPA River Basin Water Resources Mgt. Committee PROKASIH Clean Rivers Program PSW Procurement of Small Works PWRC Provincial Water Resources CounciliCommittee QA Quality Assurance This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization. QBS Quality Based Selection QCBS Quality and Cost Based Selection RBC River Basin Corporation (PJT) RIM River Infrastructure Maintenance SECAL Sector Adjustment Loan SIL Sector Investment Loan SPP Payment Requests Swakelola Force-Account UKLLJPL Environmental Management and Monitoring Plans VSL Variable-Spread Loan WATSAL Water Resources Sector Adjustment Loan WUAF Water Users Association Federation (GP3AIIP3A) WUA Water Users Association WUR Water Use Right Vice President: Jemal-ud-din Kassum, EAPVP Country ManageriDirector: Andrew Steer, EACIF Sector ManagedDirector: Mark D. Wilson, EASRD Task Team Leader/Task Manager: Guy Alaerts, EASRD INDONESIA WATER RESOURCES & IRRIGATION SECTOR MANAGEMENT PROGRAM CONTENTS A. Program Purpose and Project Development Objective Page 1. Program purpose and program phasing 3 2. Project development objective 5 3. Key performance indicators 5 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 6 2. Main sector issues and Government strategy 6 3. Sector issues to be addressed by the project and strategic choices 9 4. Program description and performance triggers for subsequent loans 11 C. Program and Project Description Summary 1. Project components 14 2. Key policy and institutional reforms supported by the project 21 3. Benefits and target population 22 4. Institutional and implementation arrangements 23 D. Project Rationale 1. Project alternatives considered and reasons for rejection 27 2. Major related projects financed by the Bank andor other development agencies 29 3. Lessons learned and reflected in the project design 30 4. Indications ofborrower commitment and ownership 31 5. Value added of Bank support in this project 31 E. Summary Project Analysis 1. Economic 31 2. Financial 33 3. Technical 35 4. Institutional 35 5. Environmental 38 6. Social 40 7. Safeguard Policies 43 F. Sustainability and Risks 1. Sustainability 44 2. Critical risks 45 3. Possible controversial aspects 46 G. Main Conditions 1. Effectiveness Condition 47 2. Other 47 H. Readiness for Implementation 54 I. Compliance with Bank Policies 54 Annexes Annex 1: Project Design Summary 55 Annex 2: Detailed Project Description 68 Annex 3: Estimated Project Costs 98 Annex 4: Cost Benefit Analysis Summary, or Cost-Effectiveness Analysis Summary 101 Annex 5: Financial Summary for Revenue-Earning Project Entities, or Financial Summary 112 Annex 6: (A) Procurement Arrangements 119 (B) Financial Management and Disbursement Arrangements 131 Annex 7: Project Processing Schedule 144 Annex 8: Documents in the Project File 145 Annex 9: Statement ofLoans and Credits 147 Annex 10: Country at a Glance 149 Annex 11: Social Safeguards Frameworks 151 Annex 12: Environmental Guidelines 156 Annex 13: The Water Resources Sector Reform under WATSAL 160 Annex 14: Monitoring and Evaluation 163 Annex 15: Major Related Projects Financed by The World Bank and Other Donor Agencies 168 Annex 16: Anti-Corruption Strategy 170 BORROWER 30.48 I 0.00 I 30.48 IBRD 13.01 3 1.99 45.00 IDA 7.23 17.77 25.00 LOCAL COMMUNITIES 1.12 0.00 1.12 NETHERLANDS: MIN. OF FOREIGN AFFAIRS / MIN. OF 4.05 9.95 14.00 Total: 55.89 I 59.71 I 115.60 Borrower: GO1 Republic of Indonesia Responsible agency: DIRECTORATE GENERAL FOR WATER RESOURCES. MIN.KIMPRASWIL DIRECTORATE GENERAL REGIONAL DEVELOPMENT7Min. Home Affairs & Reg. Autonomy DIRECTORATE GENERAL AGRICULTURAL FACILITIES, Min. Agriculture Provinces and Kabupaten BAPPENAS, for Project Implementation Coordination Address: MINISTRY OF SETTLEMENT AND REGIONAL INFRASTRUCTURE (KIMPRASWIL) Directorate General of Water Resources JI. Pattimura 20 Jakarta Selatan Contact Person: Drh. Roestam Syarief, Director General of Water Resources Tel: (6221)7262805;7203962;7395588 Fax: (6221)7260769 Email: Other Agency(ies): MINISTRY OF HOME AFFAIRS Directorate General Regional Development (BANGDA) Address: JI. Makam Pahlawan, Jakarta, Indonesia Contact Person: Dr. Seman Widjojo, Director General Tel: (62-2 1) 722-7823/4 Fax: (6221) 726-753 1 Email: BAPPENAS (Project Implementation Coordinator) Address: Jalan Taman Suropati, 2 Jakarta Pusat Contact Person: Dr. Ir. Suyono Dikun Tel: (6221) 334-73 1 Fax: (6221)3 14-5374 Email: [email protected] FY 2004 2005 2006 2007 Annual 6.57 17.29 23.4 1 22.73 Cumulative 6.57 23.86 47.27 70.00 ~ Project implementation period: APL 1: October 2003 to June 2007 Expected effectiveness date: 11/01/2003 Expected closing date: 12/3 1/2007 5sAP. PID F" *r" II_ "0 -2- A. Program Purpose and Project Development Objective 1. Program purpose and program phasing: Strategic Context. The objectives and design of the Water Resources and Irrigation Sector Management Program (WISMP) reflect a new approach to sector development. In broad terms, Indonesia’s water
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