Documentof The WorldBank

FOROMCIAL USEONLY Public Disclosure Authorized

Report No. 6751 Public Disclosure Authorized PROJECT.PERFORMANCEAUDIT REPORT

CHAD

LAKE CHAD POLDERS PROJECT

(CREDIT 592-CD) Public Disclosure Authorized April 24, 1987 Public Disclosure Authorized

Operations Evaluation Department

This documenthas a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bank authorization. CURRENCYEQUIVALENTS

CurrencyUnit CFAF

1974 (at appraisal) US$1 = CFAF 225 1976-79(estimated average of disbursements) US$1 = CFAF 230

WEIGHTS AND MEASURES

1 kilometer(km) m 0.6215 mile 1 centimeter(cm) 0.033 feet 1 hectare (ha) = 2.47 acres I metric ton = 2207 lbs 1 kilogram(kg) 2.207 lbs

ABBREVIATIONS

ADF or AFBF - African Development Fund CCCE - CaisseCentrale de Coop ration Economique (FrenchDevelopment Aid FundingAgency) ERR - Economic Rate of Return FAC - Fonds d'Aide et de Coop ration (French Bilateral Aid Agency) FAO/CP - CooperativeProgram between FAO and the Bank GDP - Gross DomesticProduct GMT - Grands Moulins du Tchad (MillingCorporation of Chad) GNP - Gross National Product OED - OperationsEvaluation Department PAP - Projet d'Am nagement des Polders (PoldersDevelopment Project) PCR - Project Completion Report PPAM - ProjectPerformance Audit MeF.orandum PPAR - Project Performance Audit Report PPF - Project Preparation Facility RMWA - RegionalMission in WesternAfrica SODELAC - Soci t de D veloppementdu Lac (Lake DevelopmentCorporation) USAID - United StatesAgency for InternationalDevelopment FOROFFCIAL US ONLY THE WORLD BANK Washington,D.C 20433 USSA

OiMweof Detminor-Cfirwm Ope.atk4nEvaualiten

April 24, 1987

MEMORANDUMTO THE EXECUTIVEDIRE(- RS AND THE PRESIDENT

SUBJECT: Project PerformanceAudit Report - Chad Lake Chad Polders Project (Credit592-CD)

Attached,for information,is a copy of a report entitled "Project PerformanceAudit Report - Chad Lake Chad Polders Project (Credit 592-CD)" prepared by the OperationsEvaluation Department.

4ttachment

This dccument has a restricteddistribution and may be used by recipientsonly in the performance of their officialduties. Its contents may not otherwise be disclosedwithout World Bank authorization. FOR 0MCIL USE ONLY

PROJECT PERFORMANCE AUDIT REPORT

CHAD

LAKE CHAD POLDERS PROJECT (CREDIT 592-CD)

TABLE OF CONTENTS Page No.

Preface i .... Basic Data Sheet ...... *.. **...**f..*****.. **. ii Evaluation Summary ...... iv

PROJECT PERFORMANCEAUDIT MEMORANDUM

1. Project Background ...... I

Introduction ...... I Bank Activities in Chad .2...... 2 Setting .. *.,****a. a **.. *..,**...* * 3 Project Formulation ...... Project Objectives...... * 7

1I. Project Implsmentationand Outcome ...... 7

Start-up and Effectiveness ...... 7 Project Implementation ...... ,. 8 Project Results, Outcome and Sustainability 99......

III. Findings and Issues ...... **...... ,*. 10

Overview 10 Issues 10 (a) Lending Pressure 10 (b) Suspension and Supervision 11 (c) Final Disbursement and Closing 11 (d) Technical Feasibility ...... 14

Appendix: Government Comments ...... 17

PROJECT COMPLETION REPORT

I. Background ...... 25 II. Preparation and Appraisal ...... 26 ILI. Imple-nentation 29 IV. Agricultural and Economic Impact 31 V. Performance ...... 32 VI. Special Issues - Lessons Learned ..... 33

PCR ANNEXES:

1. Key Indicators 2. Disbursements

1!a2: 11447

This document has a restrcted distribution and may be used by recipients only .n the performance of their officialduties. Its contents may not otherwise be disclosed without World Bank authorization. PROJECTPERFORMANCE AUDIT REPORT CHAD

LAXECHAD POLDERS PROJECT (CREDIT 592-CD)

PREFACE

This is a performanceaudit of an irrigationproject in Chad, for whicl.Credit 592-CD in the amount of US$5.0 million was approved on Novem- ber 11, 1975. The project was cofinancedby the African DevelopmentFund (ADF) for US$5.0 million equivalent, the French bilateral agency, Fonds d'Aide et de Coop ration (FAC) for TJS$2.0million equivalent,and the United StatesAgency for InternationalDevelopment (USAID) for US$1.0million.

The projectwas expectedto be completedby June 30, 1979 and the credit to be closedby December31, 1980. However,the Associationsuspended creditdisbursements in May 1979 due to politicaland securityproblems which made projectimiplementation and supervisionimpossible. SubsequentIDA mis- sions concluded that resumptionof project activitieswas not viable anrL recommendedreallocation of the balanceof projectfunds to support the min- istries responsiblefor agriculturein their rehabilitationand drought- alleviationactivities. The recommendationwas approvedby tle IDA Board of ExecutiveDirectors in May 1985. The credit Closing Date was extended to June 30, 1985,but finaldisbursements were made on May 30, 1985.

The audit report consists of an audit memorandumprepared by the OperationsEvaluation Department (OED) and a Project CompletionReport (PCR) dated May 31, 1985 preparedby the Western Africa ProjectsDepartment. Data collected during an IDA review mission in February 1984 wer.:.used in preparingthe PCR. The audit report is based on a review of the Appraisal Report (No. 828a-CD dated October 16, 1975), the President'sReport (No. P-1702-CDdated October 30, 1975), the Credit Agreementdated November 26, 1975 and the PCR. Project files, includingcorrespondence with the Borrower and internalBank memorandaon project issues,have been consultedand Bank staff associatedwith the projecthave been interviewed.

The draft report was sent to the Governmentand cofinanciersfor commenton July 18, 1986. Commentsreceived from the Governmentof Chad have been appendedto the audit memorandum.

The audit concurs with the principal findings of this PCR and shares a number of its conclusions. The points discussedin the audit memo- randum have been selectedbecause of their importancefor this and other Bank-supportedprojects. - ii -

PROJECT PERFORMANCEAUDIT REPORT

CHAD

LAKE CHAD POLDERS PROJECT (CREDIT 592-CD)

BASIC DATA SHEET

KEY PROJECT DATA Appraisal Actual or Actaal as % of Estimate EstimatedActual Appraisal Estimate

Total Project Cost (USe million) 13.0 8.2 631 Credit Amount (US5 million) 5.0 5.0 100t /a Cotinancing:(USS million) - African Development Fund (ADF) 5.0 n.a. - - French Aid (FAC) 2.0 n.a. - - USAID 1.0 n.a. - Date PhysicalComponents Completed 06/78 irrelevant/b - Proportionof PhysicalComponents Completed (M) 100 32 /c EconomicRate of Return (%) .. negative InastitutionalPerformance good inadequate AgronomicPerformance good inadequate Number of Beneficiaries 1,200 none

STAFF INPUTS (staff weeks)

PY75 FY76 FY77 FY78 FY79 FY80 FY81 FY82 FY83 FY84 FY85 Total

Identification/ Preparation 15.0 4.3 3.4 22.7 Apppraisal 4.7 2.5 59.9 27.7 0.4 95.2 NegotiaLions 0.2 9.9 10.1 Supervision 3.1 17.5 10.4 17.9 10.6 2.5 9.3 71.3

Total 19.7 6.8 63.3 27.9 13.4 17.5 10.4 17.9 10.6 2.5 9.3 199.3

CUMULATIVEDISBURSEMtNTS

FY76 FY77 FY78 FY79 FY80 ... FY85 /d

Appraisal Fstimate (US$ million) 0.4 2.0 4.0 4.4 5.0 - Actual (US$ million) 0 1.4 2.1 3.8 3.8 5.0 Actual as X of Estimate(X) 0 57 54 86 76 100 Final Disbursement May 30, 1985

MISSION DATA

Date No. of Mandays Specializations Performance Types uf Mission (mo./Yr.) Persons in Field Represented/e Rating/f Trena/g Problems/h

Identification (FAU/CP-RiWA) 1968 n.a. n.a. Preparation(RMWA)/i 02/72 1 2 ae Preparation (FAO/CP-R?WA)LJ 05/72 3 42 ae,i,a Preparation (FAO/CP)/k 11/72 7 3 i

Appraisal/I 10/74 6 108 f,a,l,s,t,i Post appraisal/m 03/75 2 It f,i Post appraisal 06/75 3 15 f,i,l

SupervisionI/n 04/76 1 4 f I I Supervisioni1 11/76/o 1 6 f I I SupervisionIll/n 07/77 1 7 f 2 2 M Supervision I V L 01/78 1 4 (+2) i (X)/ 2 2 M,F Supervision V 04-05/78 3 21 i,i,f 2 3 M,F,P/r Supervision VI/s 12/78/t 2 10 i,a 3 2 F,M,P7F SupervisionV117u 02/807V 3 IZ i,i,e 3 1 F,P SupervisionVIII 02/84 3 1 a,e,i 3 3 F,T,M SupervisionIX/w 10/84 2 n.a. a,f -/x - Total - i.i -

BASIC DATASHEET

OTHER PROJECT DATA

Borrower Republic of Chad Executing Agency Soci t de D veloppement du Lac (SODELAC) Follow-on Project None

Original Actual or Current Project Dates Plan Revisions Estimates

First \ention in Files 1968 1968 Negottations/j 09/08-12/75 09/08-12/75 Board Approval 11/11/75 11/11/75 Credit Agreement Date 11/2b/75 11/26/75 Credit Effectiveness Date 02/26/76 02/26/76 Closing Date 12/31/80 0/30/85

/a US$3.8 million was disbursed against project-related activities and the balance of credit funds (US$1.2 million) were disbursed against the rehabilitation and drought-alleviation activities of the ministries responsible for agriculture. /b Project buildings and assets were deutroyed or stolen during the civil war. 7c This represents the weighted average of the physical infrastructure that was either fully or partially completed, before being destroyed. /d Project disbursements were suspended in May 1979 and credit funds uere reallocated and fully disbursed on May 30, 1985, when US$1.2 million was disbursed against other activities (see footnote /a). /a ae - agricultural economist, i - irrigation engineer, a = agronomist, f -financial analyst, 1 loan officer, a soil specialist, t - transport specialist. /f 1 - Problem-Free or Minor Problems; 2 - Moderate Problems; 3 - Major Problems. I1 Improving; 2 - Stationary; 3 - Deteriorating. /h F Financial;F M - Managerial; T - Technical; P - Political; 0 - Other. /i Mission to Paris to discuss preparation with consultants. 7 The loan officer was in Chad at the same time. Mission to Paris to review the feasibility study with consultants. 7l A team of two ADF staff also participated in the appraisal. 7m Updating of cost estimates witn consultants in Paris. 7i; Mission also made stopover in Paris for discussionts with consultants and cofinanciers and in Abidjan for discussion with ADF. /o A disbursement officer subsequently visited Chad in December 1976. 7j; Mission also had discussions with consultants in Paris. 7q A financial analyst reviewed auditing arrangements for two days. /r Described in supervision report as "security situation may deteriorate". 7i tMission jointly with FAC and USAID. 7F A general programs/project mission visited Chad to determine what operations could be combined; however no such proposals were made for this project. /u Part of a broader review mission that visited Chad at that time. 7_ A general agricultural projects review mission by the agricultural projects deputy division chief took place in April/May 983. /w Part of a larger review mission in which the lawyer, loan officer, and disbursetment officer also participated. 7; No supervision report prepared, only BTO. 7jy ADF and FAC sent observers to the negotiatiotns. - iv -

PROJECT PERFORMANCEAUDIT RE?ORT

CHAD

LAKE CHADPOLDERS PROJECT (CREDIT 592-CD)

EVALUATION SUMMARY

Introduction

Chad has a very limited agriculturalresource base, and Govern- ment's strategic options for developing the rural sector are very re- stricted. There is a real limit to the level of increasesin farm incomes that rainfed agriculturaldevelopment projects can generate. Government believed, therefore,that it would be necessaryto develop the irrigation potentialof Lake Chad and the riversof the Lake Chad basin. The Lake Chad Polders Project (Credit 592-CO)and the Sategui-DeressiaIrrigation Project (Credit489-CD), also financedby IDA, were the first stagesof suichprogram.

Objectives

The project,which was the Bank Group's fourth operationin Chad's agriculturalsector, aimed at: (i) promoting cotton and wheat production throughrehabilitating and completingirrigation and drainagenetworks in the Guini polder and constructingthe irrigationand drainage networks of the Berimpolder; (ii) establishinga commercialagricultural development unit to settle farmerson newly developedland; (iii)providing a packageof services to the farmerswho would take up cultivationof the polders; (iv) construct- ing staff houses and service centers;and (v) providingtechnical assistance to projectmanagement.

ImplementationExperience

The project's objectiveswere not achieved because of political conditions,adverse climatic conditions, shortcomings in technicaldesign and poor managementperformance. Productiveactivities took place only in the 1978/79cropping season. Most of the projectworks were not completedand those that were completedwere destroyedduring the civil war.

Results

The projecthas no noticeableagronomic or economicimpact, and the project'seconomic rate of return (ERR) is considerednegative.

Sustainability

Given destructionand deteriorationof the physicalinfrastructure, this is not an issue. -v -

Findilngsand Lessons

The major findings and lessons that can be derived from this project are the following:

(a) the fact that governmentsexplore alternativefinancing arrange- ments might be a reflectionof the high priority they attach to project proposals,rather than an unwillingnessper se to obtain Bank financing(PPAM para. 11);

(b) lending and resource transfer considerationswere of averriding importancein Bank decisionmaking (PPAM paras.22-24);

(c) there is limited impact of the Bank's review process on the scope and contentof projects,once appraised(PPAM para. 24);

(d) the Bank's response to security problems which hamper project implementationis not always consistent and there is extreme reluctanceto cancel IDA credits and close inoperativeprojects (PPAM paras.25-26);

(e) resolution of Chad's arrears problems through a package of amendmentsto existingcredits opened the way for resumptionof IDA -assistanceto the country(PPAM paras.27-33);

(f) the proposedtechnology was inadequate,not only in retrospectbut even at the time of appraisal(PPAM paras. 34-40). - 1 -

PROJECTPERFORMANCE AUDIT MEMORANDUM

CHAD

LAKE (YHADPOLDERS PROJECT (CREDIT 592-CD)

I. PROJECTBACKGROUND

Introduction

1. The projectwas the Bank Group's fourth projectin Chad's agricul- tural sector, followinga livestock(Credit 309-CD),drought relief (Credit 445-CD) and irrigation(Sategui-Deressia, Credit 489-CD) project (see also PPAM paras.3-4). The projectobjectives were not achievedbecause of polit- ical conditions,adverse climatic conditions, shortcomingsin technical design and poor managementperformance, and in the end, the projectfailed because most of the project works were not completedand those that were completedwere destroyedor deterioratedduring the civil war. Despitethis poor projectexperience, a number of interestingissues arise,and these are furtherexplored in this audit memorandum.

2. This project is similar to a number of other irrigationprojects the Bank funded in the early 1970s in Western Africa, such as the Senegal River Polders Project,'/ the Cameroon SEMRY Rice Projects,2/ the Niger NamarigoungouIrrigation Project,3/ and the Mauritania Gorgol Project.4/ All of these were high-cost irrigationprojects and to a certain extent reflected the belief that "engineering"could solve developmentproblems. Part of the rationalefor them was that given arid climates and suscep- tibility to drought, irrigation projects were an essential element of a "droughtproofing" strategy and would provide for additionalfood security. All these projectshave given rise, however,to equity issues:given resource constraintsshould so much developmenteffort be concentratedon so few beneficiariesin such a limited area? In addition, the replicabilityof these investmentshas been severelylimited, while their sustainabilitywill requiresubstantial further efforts.

1/ PPAR, Senegal- River Polders Project (Credit 350-SE),OED Report No. 277 dated December26, 1979.

2/ PPAR, Cameroon- SecondSEMRY Rice Project(Loan 1512-CM/Credit763-CM), OED Report No. 5156 dated June 25, 1984 and see also PPAR, Cameroon- SEMRY Rice Project (Credit 302-CM),OED Report No. 2054 dated May 12, 1978.

3/ PPAR, Niger - IrrigationProject (Credit 851-NIR),OED ReportNo. 6275 dated June 23, 1986.

4/ PPAR, Mauritania - Gorgol EngineeringProject (Credit S-16-MAU) OED

- ReportNo. 3134 dated September18, 1980. -2-

Bank Axtivities in Chad

3. Until recently 5 / no new projects had been funded by the Bank since 1978, but over the perfod 1968-78, 13 projects were funded involving IDA credits totalling about US$80 million (for details see table below). Two credits have been fully cancelled and only four credits coutinue to be dis- bursed. Cancellations amounted to US$19.20 million and disbursements to about US$50 million. About US$6 million has been repaid.

BankLeing to Chad (as of 08i31/86)

Credit Credit Approval Closing OED Project Name No. Amount Date Date Disbursed Cancelled Report No. (UST-miTtion) (US$million)

Highway Maintenance 125 4.55 07/68 06/78 4.55 - 1883 Education 126 2.23 /a 08/68 06/76 2e23 - 2616 Education II 251 2.71 7b 04/71 06/79 2.69 0.02 2616 Livestock 309 2.20 02/72 09/78 2.20 - 3373 Drought Relief 445 2.00 11/73 12/78 2.00 - 2807 *Sategui-Deressia 489 15.50/c 03/74 06/87 15.00 - - Highway II 490 3.50 06/74 06/80 3.42 0.08 5608 Lake Chad Polders 592 5.00 11/75 06/85 5.00/d - /e *Rural Fund 664 12.00 11/76 06/88 8.07 - - *Sahelian Zone 739 1.90 09/77 06/87 1.38 - 5169 /f Livestock II 783 11.50 03/78 03/83 - 11.50 5370 *Education III 811 8.30 05/78 12/86 2.97 - - Highway III 840 7.60 07/78 12/82 - 7.60 5608 Fmrgency Cotton 1716 15.00 06/86 04/89 - / Highway Maintenance 1728 20.00 07/86 06/89 - - - 78.99 '4.51 19.20

* Disbursing Dollar Credits

/a Original credit amount US$1.8 million and supplementary credit of US$0.40 million approved 08/73. /b Original credit amount US$2.21 million and supplementary credit of US$0.50 million approved 08/73. /c Original credit amount US$7.50 million (fully disbursed) and supplementary credi.t of US$8.00 million approved 08/76. /d US$3.8 million was disbursed for the project and the remainder in 198 for rehabilitation and drought alleviation activities. /e Thisreport. 7T Pass-through PCR. 7g As of 08/31/86 not yet effective.

5/ An Emergency Cotton Program was approved in June 1986 and a Highway Haintenance Project in July 1986. - 3 -

4. The prevailing economic and political circumstancesseriously affected the scope of Bank activitiesin Chad and continuedto dominate the Bank/countrydialogue. As a result of. the civil war, all Bank project activitiescame to a standstillin June 1979. A limited resumptionof disbursementswas authorizedfor two agriculturalprojects: Sategui-Deressia (Credit 489-CD)and the Rural Projects Fund (Credit 664-CD),and the Board was informed about these partial resumptionsin May 1983.6/ Priority activitiesthat could be carriedout under these two projectsas well as the Third EducationProject were identifiedin early 1984 and were iully resumed in June 1984. SubstitutionCredit Agreementsfor these three projectswere signed on May 28, 1985.7/ Followingsettlement of arrears(see PPAM paras. 26-33), Bank activitieshave resumed and two Bank operations--Emergency Cotton and HighwayMaintenance--have recently been approved.

Setting

5. Even without the additionaldisadvantages of civil war and polit- ical upheaval, Chad faces unusually difficult handicaps in its economic development,given its extremelypoor naturalresources, a harsh climate,and the high cost of transportationto and from the outside world, because the main centers of activity in this landlockedcountry are located 1,500 to 2,500 km from sea ports.

6. Chad is a very large country (1.3 million km2) but sparselypopu- lated, rangingfrom around 8/km2 in the south to almost zero in the nomadic north. Its populationof about 3.8 million at the time of appraiselis now estimated at almost 5 million (1985) and its populationgrowth rate is estimatedat 2.4% per annum. Life expectancyis low (43 years) and infant mortality is high (184 per 1000 live births). The present GDP per capita estimate of US$80 is not much different from the per capita income levels estimated in the early seventies. Chad is one of the poorestcountries in the world and remainsclassified by the United Nationsas one of the 25 least developedcountries.

7. Agricultureis Chad's largest sector, accountingfor an estimated one-halfof GDP and for almost all of the exports,providing a livelihoodto most of the country'spopulation. Eighty percentof Lhe populatioulives in the rural areas, with about half consistingof groups of semi-nomadicand nomadicherders living in the Sahelianzone and the other half livingin the relativelyhigher rainfallSudanian zone in the south where crop farming is the prevalent activity. Cotton is Chad's most importantcash and export

6/ Chad: PartialResumption of Disbursements,IDA/SecM83-193 dated May 17, 1983 and IDA/SecM83-193(REV) dated May 26, 1983.

7/ For more details see Status of IBRD/IDAprojects in Execution,SecM85- 1174 dated October31, 1985, and SecM86-443dated April 30, 1986. - 4 -

crop,8/ followedby livestock,a poorlyexploited asset. Foodcrops(millets and sorghums)are grown as subsistenceand paddy is grown in the floodplains of the Logone (as well as sorghum behind recedingfloods). Only a limited area had been equippedfor controlledirrigati)n. Except for wheat, Chad is self-sufflcientin foodgrainproduction only in "normal"years.

8. Chad's developmentpotential lies in its rural areas. However, progressin the rural economy is slow. As the President'sReport 9/ noted, "even assuming politicalstability and normal rainfall,it will take many years and great effort to restore the productivecapacity destroyed by years of rebellionand droughts." That predicamentis as true today as it wes ten years sgo.

9. At the time of project preparationand appraisal,there was no stated sector strategy and no explicit targets and goals (except for cotton). Agriculturalinvestments that were undertakenreflected the ability of particularagencies to obtain funding and the different ositionsof the various foreignaid agencies about what was good for Chad.1?/Given Chad's limitedagricultural resource base, Government'sstrategic options for devel- oping the rural sectorwere, and still are, limited. Rainfed projectswere regardedas high3stpriority, but Governmentbelieved that over the long term it would be necessary to develop Chad's considerableirrigation potential. This was seen to bring a range of benefits from: (i) diversifyingcrop production;(ii) better utilizationof the country's livestock resources through fodder production;(iii) evolvinga high technologyagriculture; and (iv) insuranceagainst the disruptiveeffects of drought. It was realized that the cost of irrigationwas high and that replicabilitywould be limited, as a countrylike Chad did not have the financesto fund such high unit cost investmentsand as it would be inequitableto expend large sums of money for the benefitof relativelyfew farm families. Nevertheless,the pressure to developthe country'sirrigation potential was increasing,stimulated in Chad by the recentdroughts and within the Bank by lendingpressure (PPAM paras. 22-24). Also, Government believed that making a start with irrigation

8/ Productionamounted to around 100,000 tons in the 1960s; 174,000 tons in 1975/76; 125,000 tons in 1977/78; 85,000 in 1979/80; and more recently, in 1983/84, it was back again at 156,000 tons, dropped to 90,000 tons in 1984/85 and is expected to amount to 138,000 tons in 1985/86. However,the recentdrop in internationalprices has seriously affectedthe financialviability of Chad's cottonsector as well as its Government,as it puts 80% of Governmentexports and 25% of its revenues at risk.

9/ Report ard Recommendationof the President to the ExecutiveDirectors on a ProposedCredit to the Republicof Chad for the Lake Chad Polders Project,Report No. P-1702-CDdated October 30, 1975 (para.9).

10/ Chad, Agricultural Sector Memorandum, Confidential Draft Report No. 1438-CDdated February16, 1977. - 5 - projectswas needed as this was the only way Chad could begin to obtain the expertise in irrigationtechnology, the trained personnel,and the needed institutionaldevelopment, In retrospect,as the project experienceshows, none of this was vehieved.

ProjectFormulation

10. The project was identifiedin 1968. At Government request, FAC financedand a French consultingfirm carriedout:

(i) the installationand operation of a 70-ha pilot farm since 1969;and

(ii) a feasibilitystudy completedin late 1972.

The results obtained from the pilot farm, as well as the preparationand conclusionsof the feasibilitystudy., were reviewedin early 1973 and favor- abl-ycommented upon by the Bank's RegionalMission in Western Africa (RMWA) and judged acceptablefor a Bank project. However,because of the relative noveltyof the projectand because the feasibilitystudy raised some serious issues, RMWA recommendeda pre-appraisalwhich would look into a number of criticalissues (listed in the PCR para. 6).1I/

11. However, it took the Bank a long time to decide to appraise the project. In the meantime,given the high priorityGovernment attached to the project,it also approachedother agenciesto financethe project,including FAC, ADF and STA (Soci t des TechniquesAppliqu es), chargedwith implemen- tation of Libyan aid. STA subsequentlybecame involved in a substantial redesign of the project.12/ The main reasons for the slow processingof this projectwere a viciou circle13/ of perceiveddoubts about the inten- tion of Governmentto request IDA7financing,but also uncertaintiesabout

11/ The PCR inadvertentlygives the impressionthat these issues were the result of the May 1972 review mission. In fact, they were formulated during RMWA's review of the feasibilitystudy (RMWA memo No. 51 dated February6, 1973).

12/ The STA proposals envisagedan interlinkedrather than separate water supply system to improve drought-proofing. But costs were also substantiallyhigher and SODELAC thereforedecided in mid-1974 that it did not preferthis solution.

13/ The Bank was slow in respondingto project proposals,and thus, sen- sibly, Governmentexplored alternativefunding arrangements, resulting, however,in furtherdelays in Bank processing,etc. project size, cost14/ and justification,and most importantlyIDA staff constraints(the BaiW was already involvedin the Sategui-DeressiaProject, but more importantlythe projects division concerned covered many other Sahelianand Anglophonecountries and was increasinglyinvolved in a substan- tially expandedagricultural development program in Nigeria). In the mean- time, however,FAC continuedto fund the pilot operations.

12. The project was finally appraised in October 1974 and the major issues raised in the subsequentissues/decision process related to SODELAC reorganizationand IDA commitmentto furtherdevelopment of Lake Chad Polders (PCR para. 7).15/ Substantialreservations regarding this "high cost and high risk" protect were raised during the internal review process, but managementultimately decided to go ahead with the projectas appraised(PPAM paras. 22-24). Further problems arose when estimates had to be revised because of cost updates preparedby the consultants(post-appraisal mission in March 1975) and further delays occurred because of a military coup in April 1975. Another post-appraisalmission was mounted in June 1975. Nego- tiations subsequentlytook place in the second week of September1975 (PCR para. 8).

13. The project was approved by the Board on November 11, 1975. The projectwas presentedto the Board as a high-costproject which, althoughnot replicableon a large scale, would have the followingadvantages: (i) as a technicallyand economicallysound projectit would provideinsurance against drought;(ii) it would be a pole of developmentin the north;(iii) it would raise technologicalstandards in the projectarea; and (iv) it would attract sizeable soft loans. In addition to a questionabout the "recruitment"of settlers, there were other questions relating to potential implementation problems, given the Bank's experience with delays in the education and Sategui-Deressiaprojects. It was pointed out that because of high con- tractor cost, the Sategui-DeressiaProject had been reformulatedand would use force account construction. Force account constructionwould also be used under this project. However,the polder project was much simpler than the Sategui-Deressiaproject which, as mainly a drainage project, required substantialearth moving. The educationprojects had been delayed because,

14/ Given that and the fact that Sategui-Deressia(Credit 489-CD) was facing substantialcost overruns at the time, the Bank, in mid-1974, was seriouslyconsidering if an engineeringcredit for the Lake Chad Polders Projectwould not be more suitable.

15/ In addition to the Berim and Guini polders, the consultantshad also studied the feasibilityof developingthe adjacent Mandi polder (1600 ha). IDA decided to consider developmentof this polder only after detailed engineeringwas completedand the settlementof the Berim and Guini poldershad provensuccessful. At that time, detailedengineering and drying of the polder was estimated to cost US$2.5 million and further development, including water distribution and drainage facilities,access channeland land development,US$17.5 million. - 7 -

in the past, parliamenthad only met irregularly(and the resultingratifica- tion delays causedeffectiveness and start-updelays) and lack of counterpart funds hampered further progress. This was rectifiedwhen a supplementary credit was approvedas well as the principleof 100% externalfinancing (as was the case for the proposedproject). 16/

ProjectObjectives

14. The objectivesof the project were to: (i) increasecotton and wheat productionthrough rehabilitatingand completing the irrigationand drainagenetworks of the Guini polder (370 ha net area) and constructingthe irrigationand drainagenetworks for the Berim polder (800 ha net area); (ii) promote evolutionof a high technologyagriculture as insuranceagainst the disruptiveeffects of drought; (iii) promote the developmentof an under- privilegedregion in the northwesternpart of Chad; and (iv) settleherdsmen who were migratingto the region followingthe droughtsof the early 1970s. In additlon to the two polder components,the project also included:estab- lishing a commercialagriculture section; providinga package of farm ser- vices; construction.)f service centers and houses for staff; agricultural research; and substantialtechnical assistance for project implementation research(PCR para. 9).

15. The projectwas to be carried out by the Lake Region Development Corporation(Soci t de D veloppementdu Lac - SODELAC) through a project unit created for that purpose. Over the four-yearproject implementation period (1976-79),the project was expected to cover 1,200 ha and to reach about 1,200 farm families who would be allotted plots in the polders. Projectcosts were estimatedat US$13.0million equivalent (PCR para. 4) and the financingplan includedIDA (US$5.0million), ADF (US$5.0million), USAID (US$1.0million) and FAC (US$2.0million).

II. PROJECTIMPLEMENTATION AND OUTCOME

Start-up and Effectiveness

16. The CreditAgreement was signed on Novem,er26, 1975, shortlyafter Board approval. After having fulfilledthe conditionsof effectivenessin time (PCR para. 10), it became effective three months later (02/26/76). However,late arrival of expatriatestaff causeddelays in preparingbidding documentsand subsequentcontract award (PCR para. 12). As a result,works started one year behind schedule. The original schedule preparedby the appraisalmission was as follows:

issuingbid documents/invitations: June 15, 1975 bid opening: July 30, 1975 bid award: August 15, 1975 start construction: January 1, 1976

16/ Summariesof Discussionsat Meetingsof the ExecutiveDirectors, SD75-54 'atedDecember 4, 1975. The latter had already been chang,.d to April 1, 1976 in the appraisal report,17 / but the first supervisionmission, in April 1976, noted that bid invitationswere now only expectedto be issuedin May 1976.

ProjectImplementation

17. As reportedin the PCR, IDA activitiescame to a standstillin May 1979.18/ By that time only part of the smaller Guini polder was under irrigationand few houses had been built (PCR para. 13 and Annex 1). For project activitiesfinanced until 1979, estimatedproject cost amounted to US$8.2 million (compared to the US$13.0 million appraisal estimate). However, 63X of project costs only financed 32X of expected physical infrastructure(PCR paras. 14-17). Disbursementshad reachedUS$3.8 million (see table below).

Disbursements (as of 12184)

Category Description Amount (US$)

I Cement,equipment, vehicles and chemicals 1,106,011.92

2 Operatingexpenses and local starf salaries 1,468,712.45

3 Technicalassistance 795,813.31

4 Corsultantservices and scholarships 33,983.88

- Revolvingfund 400,000.00

3,804,521.56

17/ SAR: Appraisalof Lake Chad Polders Project, Report No. 828a-CDdated October 16, 1975 (para. 4.17). The same SAR also mentioned that transportof supplies and equipment to the Bol area was only possible by barge between December and March, when the lake level was high. The distance by road is much longer (305 km) and the road is only passable by four-wheel-drivevehicles. In 1978, official transport prices were CFAF 18,000/tonby road comparedto CFAF 7,000/tonover the lake.

18/ In fact, expatriatesand Chadian staff and their families had been evacuated by helicopterfrom Bol on February 16, 1979. Expatriates subsequentlyleft Chad includingthe projectdirector and accountanton March 16, 1979. An IDA mission in May 1979 concludedthat no meaningful project activitieswere possible and disbursementswere subsequently suspendedon July 18, 1979,as reportedto the Board. - 9 -

18. Nevertheless,at that time the future of the project was already very bleak. Substantialdelays had occurreddue to enormouslogistical prob- lems. Access to the Bol area was limited,even over the lake. Costs had been reestimatedand indicateda cost overrunof US$5 millionover the US$13 million appraisalestimate to complete the project. The cost overrun was largelydue to inflation,implementation delays and underestimatedunit costs especiallyfor land levellingand transport. Navigabilityof the lake access channel to the Bol area and the very unsatisfactorysituation regarding repair of equipmentremained major issues to the end. Also, from the agron- omic point of view, attemptsat double croppinghad failed. In addition, project management by the SODELAC project unit was unsatisfactory,largely due to the fact that the SODELAC Director-Generalfailed to delegate any authority,and this sloweddown projectactivities and resultedin the resig- nationof two projectmanagers (PCR paras. 19, 24 and 25).

19. Due to politicaland securityproblems, which made project imple- mentationand supervisionimpossible, the Associationsuspended disbursements in May 1979. In February 1984, an IDA mission reviewed FAC-preparedpro- posals to revivethe projectthrough a two-yearrehabilitation program of the Guini polderbut decided against thia for various reasons (PCR para. 4).19/ A subsequentIDA mission to Chad, in September 1984, recommendedthat the creditbalance (US$1.2 million) be used to supportthe ministriesresponsible for agriculture,and this was subsequentlyaccepted by th! Board (but see also PPAM paras. 26-33).

ProjectResults, Outcome and Sustainability

20. Projectactivities took place only in the 1978/79cropping season, and on a limitedscale (PCR para. 21 and Annex 1). Subsequently,the equip- ment, and what was constructed,was either destroyedor deterioratedduring the civil war. The projecttherefore had no noticeableagronomic or economic impact. Under these circumstances,sustainability is not an issue.20 /

19/ In its comments,Government points out that "all the studiesmade before and after the civil war bear out the economicfeasibility of the project despitethe negativeassertions of World Bank experts." In this context they argue that the report "is too severe and does not take into considerationthe favorable views of its financial partners or the government'sdeclared intention to make this project one of its priorities"(see Appendix).

20/ In its comments, Government "recognizes that certain constraints hindered harmoniousexecution of the project; however we regret the Bank's prematuredeparture." In fact Governmentfeels "that the Bank has abandonedthe project,leaving behind unfinished business. However, this Lake Chad Polders Project is viable, and the Government has included it among its priorities as a means of achieving food self sufficiencyLa the regionand subsequentlynationwide" (see Appendixfor more details). - 10 -

III. FINDINGS AND ISSUES

Overview

21. The project is an obvious failure, but not only because of its destructionand deteriorationduring the civil war. If that had not happened it would have been a failure because of hydrologicalcircumstances: the water level in the lake was much below that needed for gravity irrigation. And even if that had not happened,the wheat/cottonrotation proved to be technicallyand agronomicallyinfeasible (PCR para. 21). Thus, the project's proposed technologywas clearly inappropriate(PPAM paras. 34-40). Also, project institutionalarrangements were clearly inadequateand could have seriously hampered effective project implementation(PPAM para. 19). In retrospect,a strong case can be made that the project would not hcve been successfuleven in the absenceof securityand politicalproblems.

Issues

(ti) Lending Pressure

22. Lendingpressure has been documentedin some OED reports21/. Also audit results have shown that the pressure to lend, and strong mvernment persistence,largely explain why the Niger NamarigoungouIrrigation Project, despite substantialreservations, ultimately reached the Board.22/ This Lake Chad Polders Project providesanother example of the overridUinimpor- tance of lendingconsiderations in Bank decisionmaking. From the beginning this was an importantaspect. As noted in an internal communicationin January 1974: "Top managementhad allocatedimportant IDA resourcesto Chad and withoutprojects such as a viable Lake Chad PoldersProject, I do not see how we can transferto Chad the IDA resourcesallocated for the country."

23. This became even more clear during the reviewprocess following the Bank's appraisal (PPAM paras. 10-13). The issues/decisionprocess already gave rise to substantialopposition to further processingof this project, given its high risk and costs, 2 3 / the seriousfinancial and managerialprob- lems of SODELAC,and the ability of nomadic herdsmento take up the rela- tively sophisticatedfarming methods proposed under the project. It took considerabletime to argue the variouspoints of view, but ultimatelymanage- ment at the highest levels decided to go ahead with the project for the

21/ Annual Review of Project PerrormanceResults 1985, OED Report No. 6417 dated September30, 1986, paras. 2.49-2.53.

22/ PPAR, Niger IrrigationProject (Credit 851-NIR),OED Report No. 6275 dated June 23, 1986.

23/ At that time estimated (in 1974 dollars) at US$5,500/hafor civil works but US$12,500/haincludlng other projectcosts. - 11 - following reasons: (i) the project seemed technicallyand economically sound; (ii) it fitted into the Bank's lending strategyfor the Sahel; (iii) there were no alternativesfor substantialinvestment in Chad's agricultural sector; (iv) Governmentand other donors attachedhigh priority to it; and (v) a relativelymodest IDA credit would attract sizeable soft funds.24/ Even at the Board (both in the presentationand documents)it was acknowl- edged that this was a high-costproject unlikelyto be replicable,but that for variousreasons (see also PPAM para. 13) the projectshould be pursued.

24. As in the case of Niger, it appears in retrospectthat it would have been better if the Bank had not pursued the project. This experience also confirmsthe relativelylimited impact of the Bank's review process on the scope and contentof projects,,once appraised.25/

(b) Suspensionand Supervision

25. In 1979, IDA suspendeddisbursements for all its activitiesin Chad as politicaland security probleVasmade supervision,and to a large extent implementation,impossible. Sudh action is clearly in line with existing legal agreements.2 b/ However, the Bank does not always react similarlyin such situations. It took a much more lenient positionwhen, for example, securityproblems seriously hamp red the implementationof the Lower Adiabo DevelopmentProject in Ethiopia.*C/ Both cases also reveal extreme reluc- tance on the part of the Bank, e en in extreme circumstances,to cancel IDA creditsand close inoperativepro ects.

(c) Final Disbursementand tlosing

26. It is acknowledgedthat!the closing of inoperativeprojects and the cancellationof remainingcredit balancesis never an easy decisionand that a suitablebalance needs to be maJntainedbetween optimism and pessimism. It

24/ This was correct given the 'cofinancingattracted to fund the project. However, these funde were not fungibleas they were linked to specific project procurement. In fact one could argue that they were therefore "lost" to fund alternativedevelopments. It is true, of course, that Chad would gain some foreign exchange as a result of local cost financing.

25/ Limited impact of criticism during project review was raised as an issue in the PPAR on the Nigeria Lafia and Ayangba Agricultural DevelopmentProjects (Loans 1454-UNIand 1455-UNI),OED ReportNo. 5972 dated December16, 1985 (par4s.68-76).

26/ General Conditions Applicable to Loan and Guarantee Agreements (Section6.02).

27/ PPAR, Ethiophia- Lower Adiabo DevelopmentProject (Credit 516-ET),OED ReportNo. 3971 dated June 17, 1982 (paras.23-36). - 12 -

is clear that in 1979 and 1980 no one could have predictedhow long the civil disturbanceswould last. However, it is also clear that when time continues to pass, projects should be closed, especiallyin the case of this project and the SahelianZone Project. Regionalstaff argue that the real question by 1984 was not any more whether IDA should close inoperativeprojects, but how resourcescould be pulled togetherto help Chad recover from civil war and drought. The audit sympathizeswith that position,which was correctat that time, but could only be implementedbecause of indecisionearlier. The audit remains convincedthat with the benefit of hindsightit is clear that some creditsshould have been cancelledearlier.

27. The PCR indicatesthat followingan indepthreview IDA decided not to resumeproject activities but recommendedthe use of the balanceof credit funds to support the ministriesinvolved in agriculturalrehabilitation and droughtalleviation activities. FollowingBoard approval,such disbursements were made in May 1985 (PCR paras. 4 and 18). While correct, the story is somewhat more complicatedthan narrated in the PCR given that the Bank pursued its dialogue with the country and resolved Chad's increasingly alarmingarrears vis-a-vis IDA under pArticularlydifficult circumstances.

28. Arrears dated from June 1979 and had become an increasinglyirri- tating issue, not so much because of the amounts of money involved (these were small in relationto the financialmagnitudes in the Bank's accounts), but because of the principlesinvolved. In accordancewith its accounting and auditingprinciples, overdues (initiallyby more than 60 days, later by three months) ef principalinstallments and servicecharges are footnetedin the IDA financialstatements. From 1981 to 1984 these were largely due to Chad arrearsand they were so recordedin footnotesin the respectiveWorld Bank annual reports. However, all four IDA financial statements also mentioned: "It is not anticipatedthat these delays in payments,including those due from Chad, will result in any loss to the Association." At the Bank side there was irritationat the fact that these arrearswould not allow any liftingof suspensionsand hamperedfuture Bank activities. On the other hand, Governmentfrom time to time round the Bank penny pinching and only interestedin getting paid "while children died from malnutritionin the field and peoplewere killed in the streetsbecause of the insurgencies."

29. It should be noted that while the amount of arrears was small in relation to Bank financial magnitudes,it was substantialin the Chadian contextwhere the Governmentbudget at the time amountedto only about US$20 million equivalent. In fact, with increasingarrears a vicious circle was soon in operation. For Chad, in order to pay these arrearsit needed foreign exchange,but for the Bank to providesuch foreign exchangerequired payment of these arrears. Under these circumstancesit is understandablethat the Bank and the Governmentlooked for solutionsto this dilemma.

30. Disbursementshad been suspendedon July 18, 1979. And as projects could no longer be implementedin many cases, there was an increasedfeeling that credits for such projectsshouid be cancelledon project grounds. On the other hand, Programsstaff in general felt that it was neitheropportune - 13 -

nor urgent to cancel. Throughout,missions continued to visit Chad to explore the possibilitiesfor: (i) payment of arrears; (ii) restarting existingprojects; and (iii) designingnew projects. By end 1982, arrears had reachedabout US$1.4million but limitedresumption of disbursementswas authorized28 / followinga first repaymentof arrears in early 1983.

31. In early 1984, a mission was mounted to identify priority activitiesthat could be supportedunder ongoingagricultural projects. That mission was seen as crucial, and at the highest managementlevels it was hoped "that the mission would bring back specific proposals for the settlementof arrears." The returningmission reported in March 1984, that the situation in Chad warranted full resumptionof IDA activities. As a result, the bank pursued proposals under which funds under two inactive agriculturalprojects would financeexpenditures incurred by the Ministry of Agriculture in 1984 (thus retroactivefinancing) and so provide foreign exchangefor Governmentto clear outstandingpayments to IDA. Governmentwas requestedto preparethe necessarywithdrawal requests and agreed in a letter dated March 26, 1985 that IDA could apply the proceedsof these withdrawals directlyfor the paymentof all outstandingbalances.

32. A package of measures was subsequentlysubmitted to the Board29 / on a no-objectionbasis that consistedof:

(i) substitution agreements for Credits 489-CD (Sategui-Deressia), 664-CD (Rural Projects Fund) and 811-CD (EducationIII) to allow for the financingof restructuredactivities;

(ii) amendments to Credits 592-CD (Lake Chad Polders) and 739-CD (SahelianZone) to allow for operationalsupport for the ministries responsiblefor agriculture;and

(iii) harmonization of repayment dates and currency of repayments, including Credits 445-CD (Drought Relief) and 490-CD `Highway

28/ Chad - PartialResumption of DisbursementsIDA SecM83-193dated May 17, 1983 and a revisiondated May 26, 1983.

29/ Chad: Resumptionof Operationsand Revised Amendmentsto Development Credit Agreements(Ctedits Nos. 445-CD,489-CD, 490-CD, 592-CD,664-CD, 739-CD and 811-CD), IDA/R85-177dated May 3, 1985 and revisedMay 17, 1985.

30/ Although these amendmentswere made, the Bank's operationalfiles on these two projectsdo not containany documentsor referencesrelated to these amendments. However, the Legal Department stated that the relevantlegal files did containthese documents. - 14 -

33. As no objections or questions were raised, the proposals were approved and the amendments were signed May 28, 1985. Settlement was immediatelyand directlymade in IDA accounts. Governmentand IDA agreedto implement these transactions directly in IDA's books rather than by transferringfunds to the Chad financialauthorities and back. Having thus settled the arrears,the suspensionof disbursementswas formally lifted.31/ This packoge of amendments to existing credits resolved Chad's arrearage problems vis-a-vis IDA and enabled renewed assistance to the country. In retrospectthe 'uestioncan be raised as to whether this packagemade sense and was thus an appropriateuse of funds. Clearlythere is no doubt that the packagewas the essentialelement in restoringthe relationshipwith Chad and the only method to enable the Bank to consider new developmentlending. However, on the other hand it would not have been possible in the audit's view to justify the retroactivefinancing of recurrentexpenditure for the Ministry of Agricultureas a separateproject proposal. Operationalstaff believe that sufficientnotification was provided to the Board. In the audit's view the Board should have been informedmore explicitlyabout the use of offsettingarrangements for the settlementof arrears.

(d) TechnicalFeasibility

34. The technical package proposed under this project consisted of wheat/cottonrotation, a considerablymore complex farmingmethodology than that which the proposedsettlers were practicingor introducedin other irri- gation projects in Western Africa (rice in Cameroon SEMRY and Niger Nameri- goungou and rice/vegetablesin Senegal Polders). Insufficientagronomic experiencewas provided by the Bank during the preparationand appraisal process.32/ It is clear that the croppingpattern of wheat/cottonwas both technicaliyand agronomicallydifficult to implement,and that was demon- stratedeven during the limitedtime the projectwas operational(PPAM para. 18). While it is undoubtedlytrue that experimentshad confirmedthe feasi- bility of the proposedcropping pattern and vields,once again the experience provesthat the researchstation is not the same as the farmer'sfield.

35. To what extent, as the PCR wonders (PCR para. 30), the desire to imaximize economic returns on the project did take precedence over sound agronomic choice of cropping pattern is difficult if not impossible to prove. It is a fact, however,that the rate of return during projectprepa- rationwas boostedby: the high yields;the substantialtransport element in the wheat importsubstitution price; and the premium for qualitycotton.

31/ Chad, Restorationof WithdrawalRights, IDA/SecM85-212dated June 4, 1985.

32/ In addition, the effectivenessof the agriculturaliston the appraisal missionwas constrainedby his limitedknowledge of the Frenchlanguage. - 15 -

36. In addition to agronomic problems, hydrologicalconditions also adversely affected the project. At appraisal, the principleadopted for irrigationwas gravity (in at least nine years out of ten). However,when the February1984 supervisionmission reviewedthe project,it concludedthat since 1972, hydroclimaticconditions had deteriorateddrastically, to the extent that pumpingwas requiredin 1979 and would have been requiredduring part of the followingseasons if the project had continued, In February 1984, the water level of the lake was 3 m below the level at which gravity irrigationwas possible,and under these conditions,even pumpingwould have been impossible. This, in retrospect,raises the questionas to whetherthis hydrologicalbehavior could have been predicted.

37. The mysteriousdesert lake, Lake Chad has alwaysbeen the object of attentionby explorersand scientists,and since the early sixtieshad been the objectof intensivestudy by the French researchorganization ORSTOM. 33 / Lake Chad is all that remainsof a large inland sea which in ancient times extended over an area of some 350,000km 2 and drained a catchmentarea of about 2.5 millionkm 2. Its main tributariescame from the northernmountains of the Air, Tibesti and Ennedi. Between 5,400 and 4,000 B.C. there was a drastic change in climatethroughout the region. The rivers from the north dried up and the residual lake was formed on an elevated portion of the western ridge of the old basin at the point of discharge of Chari River. There has been no drastic change since that time, only oscillationsin the water levels.34/ These oscillationsfit into cyclical patterns of long duration. The present period of relativedryness, which started some 200 years ago, is similarto that which prevailedbetween 1,000and 400 B.C.

38. In addition,however, the SAR also noted that "at present the lake is below the level it reaches in a one year in a hundred frequency. It is estimated that it will take about two years of normal rainfall over the lake's catchmentarea to raise it to the one year in ten probability,and four to five yeats to raise it to its mean level" (SAR Annex 6, para 1.3). In addition, appraisalgraphs (SAR Annex 6, Table 1) also clearly show a general declining trend in water levels and dramatic drops since 1965. Earlier, In 1972, it was already reported that not enough water entered the canals of the pilot projectand that additionalpumping had been needed. How under these circumstancesgravity irrigationcould have been proposed is unclear. The audit'sview is that too much attentionwas focusedon average occurrence (1 in 100 year occurrence)rather than probable occurrenceand trends. However,to what exteat these trendswill remain permanentand how

33/ Lake Chad, Ecology and Productivityof a Shallow TropicalEcosystem, edited by J.P. Carmouze, J.R. Durand and C. L v que, Dr. W. Junk Publishers,The Hague 1983.

34/ Nevertheless,the changesin water levels are importantgiven the lake bank's slight slopes, which makes the lake area and volume very sensitiveto changesin water levels. - 16 -

they relate to a generaltrend, if at all, of increasingaridity and droughts in the Sahel,is the subjectof much debate.35/

39. Again this raises the questionof whether economic considerations caused over-optimismin hydrologicalassumptions. This is conjecturaland no proof exists. However,as the February1984 supervisionmission pointedout, the appraisalrate of return was very sensitiveto variationsin costs and benefits,and if pumpinghad been consideredrather than gravity irrigation the resultingrate of returnwould probablyhbve been only marginallyaccept- able.

40. The appraisal clearly also underestimatedwhat to do about the logisticalaccess to the projectarea (see also PPAM para. 16, footnote5 and paras. 18 and 21). It was clear that lake transportwas far more economic than road transportto the Bol area (wherein additionto this projeLtother polder developmentswere also envisaged in the near future). Before appraisal,two sand barriers in Lake Chad had been exposed, effectively blocking transport to Bol for large parts of the year. However, the appraisal only noted that a channel excavated across the barriers might improvetraffic and irrigationaccess to Bol. Throughoutproject implementa- tion this barrierproved a formidableobstacle. Some of the prolificgrowth of aquaticplants (due to low lake levels)was clearedfrom time to time, but the dredgingof a channel(estimates varied betweena few hundredthousand to more than half a million dollars)was often contemplatedbut never executed. Given its essentialimportance, improved water and transportaccess to Bol shouldhave been an integralpart of the project.36 /

35/ Desertificationin the Sahelianand Sudanian Zones of Western Africa, World Bank 1985.

36/ Government(see Appendix)has stated that "the bottleneckrepresented by transportationwill be solved thanksto the channelbeing constructedas part of the Mamdi project,and above all to the non-floodableroad from N'Djamenato Bol." Appendix Page 1 - 17 - E-291/87 October 9, 1986 Fr(Chad) OED TS:bas

Translation of incoming telex dated September 29, 1986 from Baniara Yoyana, Minister of Agriculture and Rural Development, Ndjamena, Chad, to Otto Maiss, Director, Operations Evaluation Department, IBRD.

No. 072/MADR/DG/86. Further to Evaluation Report on Lake Chad Polders Project (Credit 592-CD), I have the honor to present the following comments.

At the time work on the project stopped following the halting of IDA disbursements in May 1979, all the project components had not been completed.

Altogether a budget line of US$4.8 million remained unused, which 1/ included US$1.2 million in IDA funds. The volume of works completed was l9S for surface developments and 38% as regards infrastructure. Of the planned 1,200 farmers, 220 were allocated parcels. The project activities only lasted one agricultural season and on a very small scale; however, encouraging results were achieved with cotton and potatoes, for which record yields were obtained. The facilities suffered little damage during the civil war. All the studies made before and after the war bear out the economic feasibility of the project despite the negative assertions of the World Bank experts. In this context the evaluation is too severe since it does not take into account the favorable opinions of the financial partners or of Chad. We recognize that certain constraints hindered harmonious execution of the project; however, we regret the Bank's premature departure at a time when excellent prospects were opening up for this region. The Chad Government is exploring other resources for accomplishing the objectives set. We will send you detailed comments by regular mail.

Regards, Baniara Yoyana

l/ Auditor's note

Please remember that these US$1.2 million were subsequently disbursed for other activities (see basic data sheet and PPAM paras. 26-37). )INV7T SI aOvd SIHI Appendix Page 2

- 19 - E-386/87 November3, 1986 French (Chad) OEDDl JCB:bas

Republicof Chad Ministerede l'Agricultureet du DeveloppementRural Secr6tariatd'Etat DirectionGenerale

Ref: 1060/MADR/DR/86 N'Djamena,October 8, 1986

From: The Ministerof Agricultureand Rural Development

To: Mr. Otto Maiss, Director,OED, World Bank, WashingtonD.C.

Dear Sir:

Thank you for sending the ProjectPerfcrmance Audit Report on the Lake Chad PoldersProject (Credit592-CD).

Followingare our commentson the PPAR:

1. The projectobjectives were:

(aa) to rehabilitateand completethe irrigationand drainagenetworks in the Guini polder (370 ha net area);

(bb) to constructan irrigationand drainagenetwork for the BERIM polder (800 ha net area);

(cc) to install1,200 farmersto cultivatethe newly developedlands, and to sedentarizenomadic herders fleeingthe country'sarid zones;

(dd) to providetechnical services to the farmersto help them with double-cropping(cotton/wheat rotation);

(ee) to conductadaptive agricultural research at the Matafo experimental farm;

(ff) to furnishconsultant assistance;

(hh)[sic]to build three seryicecenters and 16 houses for staff;

(ii) to contributeto the country'seconomic takeoff through pilot investmentsin this frequentlyoverlooked area of the country's Northwest. Appendix Page 3 - 20 -

2. Execution

It must be admittedthat as of the date of cessationof project activities,following the suspensionof disbursementsby IDA in May 1979, none of the projectcomponents had been completed:

(aa) there still remaineda $4.8-millionline of credit,of which $1.2 millionwas accountedfor by undisbursedIDA funds;

(bb) only a small part of the Guini polder,220 ha net area of the planned1,200 ha, had been developed;

(cc) five out of the 16 houseshad been built;

(dd) from the agronomicpoint of view, the cottonyield for the 1978/79 croppingseason alone was 35% higher than Lhe targetfigure. A yield of 25 quintalswas recordedfor potatoes. The wheat-growing campaigndid not materializebecause of the disturbances.Only 220 settlersreceived plots, against a planned 1,200. The experimental researchactivities had only just gotten under way. The low water level of Lake Chad, due to the persistentdrought in the Sahel, meant that the lake's irrigationpotential was unusable;

(ee) the total cost of activitiesfinanced was $8.2 million,against $13 millionestimated at the time of projectappraisal;

(ff) which would represent38% of the volumeof infrastructureto be executed,taking account of the high cost of transportation.

3. Contextof projectexecution

(aa) the feasibilitystudies approved by the Bank attestedto the project'seconomic viability;

(bb) after the disturbancesin the projectarea, the FAC studies carried out in 1984 and resumedby the ADB in September1985 confirmedthe project'sviability, despite some damage;

(cc) there is a very large materialpotential that can easily be recoveredat littlecost, were the project to be reactivated;

(ee) this ADB Report is favorableto continuationof the project,and recommendsthat the availablebalance of credit funds be used to develop350 ha net area;

(ff) becauseof errors of design, the projectexperts installedthe pumpingstation beyond the free waters of the lake, causing the irrigationprogram to fail for lack of water; Appendix Page 4 - 21 -

(gg) the projectmanagement institutional framework was acceptedby all parties,being one of the prerequisitesfor projectexecution;

(hh) there may be certainindividual problems, which shouldnot have the slightesteffect on projectexecution;

(ii) the Bank's closingdate is premature,since no tangibleresult has been obtained,whereas all componentswere incompleteand were sharedamong the variousdonors, who experiencedsome delays in their works planning;

(kk) a large number of orderswere not filledby the merchants;

(11) lastly,the persistentdrought in the projectarea was a negative factor.

4. Sustainability

(aa) the projectactivities lasted for only one croppingseason and were very limitedin scope;

(bb) however,the equipmentsuffered little from the civil war;

(cc) significantyields were obtainedwith cottonand potatoesdespite the assumptionsregarding a cotton/wheatrotation;

(dd) the cost of transportationwas relativelyhigh comparedto initial estimates;

(ee) the inadequateknowledge of hydrologicalpatterns in the lake and its affluentswas a negativefactor.

5. Conclusion

(aa) in this setting,the Bank's PPAR is too severeand does not take into considerationthe favorableviews of its financialpartners or of the government'sdeclared intention to make this projectone of its priorities;

(bb) we feel that the Bank has abandonedthe project,leaving behind unfinishedbusiness;

(cc) the bottleneckrepresented by transportationwill be solved thanks to the channelbeing constructedas part of the Mamdi project,and above all to the non-floodableroad from N'Djamenato Bol.

(dd) we regret the Bank's prematuredeparture when this regionfaces such excellentprospects;

(ee) we acknowledgethe Bank'ssovereignty when it considersthat a projectis not "viable"; Appendix Page 5

(ff) however, this Lake Chad Polders Project is viable, and the government has included it among its priorities as a .neansof achieving food self-sufficiency in the region and subsequently nationwide.

Isl Yoyana Minister of Agriculture and Rural Development - 23 -

PROJECTCOMPLETION REPORT

CHAD:LAKE CHAD POLDERS PROJECT (Credit 592-CD)

May 31, 1985

WesternAfrica Regional Department AgricultureD z "'NCr It Im

H~~~~OMCr' - 25 -

CHAD

LAKECHAD POLDERSPROJECT

I. BACKGROUND

1. The Governmentof Chad had requested`DA assistanceto develop 2,800 ha of irrigatedagricultural development tor the promotionof cotton and wheat productionin the Bol area, using water of Lake Chad, and to financean initialstage of 1,200 ha. This requestwas based on a feasibilitystudy financedby Fonds d'Aide et de Cooperation(FAC), and was reviewedby an IDA appraisalmission which visitedChad in October 1974. On November26, 1975 the Associationapproved a Credit of US$5.0million for the project,which was the fourthBank Group operationin Chad's agriculturalsector.

2. Chad has a very limitedagricultural resource base and Government'sstrategy options for developingthe rural sectorare very restricted. There is a real limit to the level of increasesin farm incomesthat rainfedagricultural development projects can generate. While rainfedagricultural projects should continue to be allottedhigh priority, Governmentbelieved that in time it would be necessaryto developthe irrigationpotential of Lake Chad and the riversof the Lake Chad basin. The rationalewas that, given Chad's arid climateand the susceptibilityof most of the countryto drought,an irrigationprogram could solve the criticalproblems faced by the economyas a whole mnd the rural sectorin particular. Governmentbelieved, therefore, that there was a case for making a start in irrigationin spite of its cost becauseit offeredChad an opportunityto begin to obtain the expertisein irrigationtechnology, the trainedChadian personnel, and the evolutionof institutionsneeded to exploitits irrigationpotential effectively and in the long run to improve the economicbase of the country. The Lake Chad PoldersProject and the Sategui-DeressiaIrrigation Project also financedby IDA were the first stagesof such program.

3. The objectivesof the projectwere to: (i) encourageexpansion of cottonand wheat productionthrough rehabilitating and completingthe irrigationand drainagenetworks of Guini Polders (370 ha net area) and constructingthe irrigationand drainagenetworks for Berim Polders (800 ha net a,ea); (ii) promoteevolution of a high technologyagriculture as insuranceagainst the disruptiveeffects of drought;(iii) promote the developmentof an underprivilegedregion in the northwesternpart of Chad; and (iv) settleherdsmen who would migrate to the region followingthe droughtsof the early 1970s. Over the four- year projectimplementation period (1976-1979),the projectwas expectedto cover 1,200 ha and to reach about 1,200 farm familieswho would be allottedplots in the polders.

4. Projectcosts were estimatedat US$13 million,net of dutiesand taxes. The foreignexchange component was estimatedat US$10.4million or 80 percentof total costs. Principalcomponents were: irrigationworks - 26 -

constructionand supervision,US$5.5 million; farm development;US$0.9 million;agricultural research, US$0.9 million; Project Unit overhead, US$1.2million; other, US$0.1 million; and contingencies,US$4.4 million. The IDA creditof US$5 millionfinanced 38 percentof total projectcosts and coveredsome 48 percentof the foreigncosts. The remainderof project costs were met by the AfricanDevelopment Fund (AFDF),US$5 million or 38 percentof totalproject costs;USAID, US$1 million,8 percent;and FAC, US$2 million, 16 per-tent.IDA financingwould be passed on by Government to SODELACas a loan to be repaidover 50 years startingin 1979 and bearingan interestrate of 0.25%. The Projectwas executedby Socigtgde Developmentdu Lac (SODELAC)through a ProjectUnit createdfor that purpose. Projectimplementation started on January 22, 1976 and by Decem- ber 1978 only 5 houses out of 16 had been built and 220 ha in the Guini Poldershad been developed. Due to politicaland securityproblems, which made projectimplementation and supervisionimpossible, the Association suspendeddisbursement in May 1979. In February1984, an IDA mission visitedChad and reviewedthe prospectsof resumingproject activities on the basis of a PAC financedstudy "MissionBilan et Programmede Relance SODELAC"which proposeda two-yearprogram aimed at rehabilitatingthe completedpart of the Guini Polders (250 ha), includingprovisions for the necessarytechnical assistance and SODELACoperating costs. The study estimatedthe cost of the rehabilitationprogram at CFAF 760 millionor about US$1.8million. Based on its review and analysisof the program,the IDA missionconcluded that the programwas not viable on the groundsof low economicrate of return,technical uncertainties, doubts about the adequacy of farmers'benefits, and uncertaintyconcerning the mechanismsand level of cost recovery. It thereforerecommended to IDA not to resume project activities,and a subsequentIDA mission to Chad in September1984 recommendedthe use of the balanceof credit funds to supportthe Ministriesresponsible for Agriculturein their rehabilitationand drought-alleviationactivities. While the Governmentwelcomed such a supportat this time, it would like to pursue irrigationinvestments in the projectarea at some futuredate.

II. PREPARATIONAND APPRAISAL

Chronology

5. In 1968 an FAO/RMWAidentification mission visited Chad and recommended a 2,800ha poldersirrigation project in the Bol area of Lake Chad. After reviewingthe identificationreport, the Governmentof Chad requestedand obtainedFAC financingfor the installationand operationof a 70 ha pilot farm in the alreadydried up Guini polder and for the preparationof a feasibilitystudy for the identifiedproject. FAC employeda Frenchconsulting firm to performboth tasks. The operationof the pilot farm startedat the end of 1969 and the study began in October 1971. - 27 -

6. In May 1972,a joint FAO/RMWApreparation mission was sent to Chad to reviewthe preparationof the feasibilitystudy as well as the resultsobtained in the Bol-Guiniexperimental farm and pilot project. The mission concludedthat becauseof the very high yields achievedon the experimentalfarm and the pilot project,the projectwas worth considering for IDA financingin spite of the high investmentcosts per hectare. The mission also requestedfurther preparation work to resolvekey issues relatedto: (i) attainableand maintainablefarm yields; (ii) the need for fertilizerapplication during the first few years of cultivation;(iii) Governmentpolicy regardingproduction input subsidies;(iv) optimumsize of the averagefamily farm; (v) SODELACcarrying out other activitiesthan the managementof the proposedproject; and (vi) the possibilityof reducingthe cost of projectengineering works throughforce accountor internationalcompetitive bidding, rather than throughhigh-cost local contracting.

7. The Projectwas appraisedin October )74 by a team of IDA and AFDB staff. Discussionstook placewith FAC and CaisseCentrale de CooperationEconomique (CCCE) in Chad and in Paris. The two issuesraised at the DecisionsMeeting on November26, 1974 were:

(i) SODELACReorganization. Government was requestedto resolve SODELAC'sfinancial difficulties prior to negotiations. Governmentagreed and confirmedthat proposalsfor reorgani- zationof SODELACwould be submittedto IDA for considerationby December1974. If Governmentfailed to do so prior to negotiationsor if the proposedreorganization was not acceptableto IDA, a separateentity would be createdto carry out the project. Subsequently,the latter solutionwas adoptedbecause it would allow timely processingof the project,even though it was not desirable from an institution-buildingstandpoint.

(ii) FurtherDevelopment of Lake Chad Polders. There were severalconstraints which could affectproject imple- mentationincluding difficulty of access,harsh living conditionsand the need to attractpopulation to the project area. The minimumsize of an initialdevelopment of the polderswhich would fullyjustify the investment,and the buildupof an organizationalframework was about 2,800 ha (or the developmentof the three poldersof Guini,Berim and Mamdi). However,to minimizethe financialand operational risks the projectincluded the developmentof Guini and Berim poldersonly. Developmentof Mamdi would be consideredonly after the engineeringdesign for Mamdi had been completedand the settlementon Guini and Berim polders had been proven successful. Furtherdevelopment of Lake Chad Polders also faced the issuesof whether capital intensiveand sophisticatedwater developmentschemes should be pursuedin preferenceto lower cost agricultural developmentprojects; and whetherpriority should be given - 28 -

to developmentin spareselypopulated northern Chad rather than in the populoussouthern regions.

8. Negotiationswere held from September8-12, 1975. Agreementwas reachedthat the projectunit, Projectd' Amenagementdes Polders (PAP), would be relativelyautonomous from SODELAC. Further,several minor changeswere made in the draft legal agreements,relating inter alia to the date for reviewingepidemiological studies, and the executionand delivery of the SubsidiaryLoan Agreement,which was deletedas a conditionof Credit Effectiveness.Board presentation took place on November11, 1975 and the Credit Agreementwas signedon November26, 1975.

ProjectDescription

9. The projectoriginally consisted of:

- rehabilitatingand completingthe irrigationand drainagenet- works of Guini polder (370 ha net area);

- constructingthe irrigationand drainagenetworks for Berim Polder(800ha net area);

- establishinga CommercialAgricultural Development Section under the projectwhich would ease the way for farmersettlement, and be responsiblefor the firstyear of operationson all newly developedland, and for the basic cultivationsduring the follow- ing year;

- providinga packageof servicesto the farmerswho would take up cultivationof the poldersafter the initialfirst year of operationsby the CommercialAgricultural Development Section, includingresettlement assistance, training, extension, credit and marketing;

- constructing3 servicecenters and 16 houses for projectstaff;

- expandingadaptive agricultural research at the Matafo Research Station;and

- providing264 man-monthsof consultantassistance to Project d'Amenagementdes Polders (PAP)for projectimplementation and 108 man-monthsof technicalassistance for Matafo Research Station. - 29 -

III. IMPLEMENTATION

Effectiveness

10. The conditionsof effectivenesswere as follows:

- approvalof AFDF Creditby AFDF board and approvalof PAC grant by FAC committee;

- notificationof IDA that Governmenthad paid its outstanding share of SODELAC'scapital and the subsidiesbudgeted for SODELAC In 1972-74;

- appointmentof ProjectUnit Manager;publication of the decree restatingSODELAC'e authority to organizesettlement of farmers on newly developedpolders; and

- promulgationof long-termcontract between SODELAC and Cotonchad and GrandsMoulins du Tchad (GMT)respectively.

These conditionsof effectivenesswere fulfilledon time and the Credit became effectiveon February26, 1976 as scheduled.

Procurement

11. Pquipment,cement and vehicleswere procuredthrough internationalcompetitive bidding (ICB) in accordancewith Bank guidelines. The same French consultingfirm that had preparedthe projectwas chosento providethe technicalassistance after internationalconsultation and negotiationson contractconditions.

Start-upof Works

12. Due to delays in the preparationof biddingdocuments and in awardingcontracts, irrigation works startedone year behind schedule. The delay resultedfrom the late arrivalof expatriatestaff: the appraisal reportassumed that the expatriatestaff would have been appointedand would have startedwork shortlyafter project negotiation in the fall of 1975, but the contractwith the consultingfirm was not signeduntil April 1976 and the expatriatestaff only resumedduties in May 1976.

PhysicalProgress

13. BeforeIDA activitiescame to a standstillin May 1979, 220 ha of Guini Polderwas under irrigation. Only five of the sixteenhouses estimatedat appraisalwere built. Key indicators(Annex 1) show project accomplishmentsas comparedto the appraisalestimates. These works were carriedout at a relativelyslow pace due to technicaldifficulties. The project'smost seriousand persistentproblem was the transportationof - 30 -

constructionmaterials which had to pass throughthe channelfrom Bol to Lake Chad. From an agronomicalstandpoint, there were also difficulties relatedto double cropping(the late cotton crop precludedsowing wheat at the optimalperiod).

Costs,Financing and Disbursements

14. ProjectCosts. The appraisalreport estimated project cost net of tax at CFAF 2,925 million,equivalent to US$13 millionat the prevailing rate of CFA 225 per US dollar. The cost estimateincluded physical contingenciesof 15% on irrigationworks and 5% on all other projectitems. Price contingenciesapplied on baselinecosts were compoundedas follows:

Annual Rates 1975 1976 1977 1978 1979

Cost of Civil Works 6 14 12 10 10 Cost of Other Items 12 10 8 7 7

15. Actual costs have been difficultto establishbecause important projectcost data were destroyedduring the civil war. An attempthas been made to estimateactual costs by using actualdisbursements made by IDA and PAC up to June 1979 and stagesof completionof AFDF and USAID-financed components. For the projectactivities financed up to June 30, 1979, the estimatedactual costs and appraisalestimates compare as follows:

Appraisal Estimated Actual as X of Estimates Actual Cost Appraisal ____ ------US$ '000… IrrigationWorks 5,490 4,687 85 CommercialUnit Investment 900 1,258 139 AgriculturalResearch 860 791 92 Project Unit Overhead 1,230 1,458 119 Other 140 N.A N.A Contingencies 4,380 - -

TOTAL 13,000 8,189 63

16. Actual expendituresdeviate considerably from the originalcost estimates. Althoughan estimated63% of the total projectcosts were spent, only 32% of the expectedphysical infrastructure was completed. The significantdifferences between actual expenditures and originalcost estimatesare partly attributableto the unexpectedhigh cost of transportation,land levellingand operationsand maintenance. The delays in the start-upof projectoperations, high inflation,and the subsequent effects of the civil war also contributedto cost overrun.

17 Financing. The originalfinancing plan was adheredto. APDF financedthe irrigationworks built by local contractorsand the equipment - 31 -

requiredfor their construction,the procurementof PVC secondary distributionpipes, and the constructionof staff houses and service centers. USAID financedagricultural research component for cereals. AFDF and USAID financingwas parallelto IDA and FAC, who financedpari passu (71%-29%)all other projectitems.

18. Disbursement.Annex 2 comparesappraisal estimates with actual disbursement.Disbursement over time startedslowly relative to appraisal estimatesdue to delays in the start-upof projectactivities. Disbursementdid not exceed 86% of appraisalestimates through the implementationphase till creditsuspension in May 1979. In May 1985, IDA disbursedthe balanceof credit funds (US$1.2million) to the Ministries responsiblefor agriculturein supportof their rehabilitationand drought-alleviationactivities.

ProjectManagement

19. The Projectd' Amenagementdes Polders (PAP)was responsiblefor projectmanagement with the GeneralDirector of SODELACas its president. The PAP was to be managed by an expatriateproject manager and staff accordingto an establishedorganization chart. In reality,the General Directoref SODELAC,who was relativelyinexperienced, failed to delegate authorityto the projestmanager; from the start of the projecthe got closelyinvolved in projectexecution and took all decisionshimself. Thus, an ambiguousand conflictingsituation prevailed regarding responsibilitiesof the GeneralDirector of SODELACand the project manager. In practice,the GeneralDirector imposed his views and it was extremelydifficult for the projectmanager to challengehim or have projectexecution under control. This resultedin dilutionof responsibilities,ineffective use of the technicalexperts (expatriates) providedto SODELAC,and delayswhich led to unsatisfactoryproject performance. That also explainedwhy two successiveproject managers resignedtheir posts.

IV. AGRICULTURALAND ECONOMICINPACT

20. AgriculturalImpact. The objectivesof the projectwere to increasecotton and wheat productionthrough the constructionand rehabilitationof poldersin the Bol area of Lake Chad region,resettle herdsmenin the projectarea, and promote the evolutionof high technology agricultureas insuranceagainst the disruptiveeffect of drought. At appraisal,the projectwas expectedto cover 1,200ha and to reach 1,200 families. Unfortunately,these projectobjectives were not met, mainly becauseof politicaland climaticconditions.

21. As indicatedin Annex 1, productiveactivities took place only in the 1978/79cropping season. This was followedby civil war which resulted in damages and losses involvinglooting of equipment,supplies and furniture,destruction of houses and offices,and theft of cars and trucks. - 32 -

Meanwhile,there was deteriorationof equipmentand irrigationworks due to lack of maintenance. The situationwas compoundedby drasticdeterioration of hydro-climaticconditions. By 1984, after the secondmajor drought,the water level of the Lake was 3 meters below the level at which gravity irrigationis possibleand even pumpingwould be difficult,if not impossible,under the circumstances.The crop rotationof wheat-cottonas envisagedduring project appraisalproved to be technicallyand agronomicallyunfeasible. The projectis, therefore,considered to have littleor no agriculturalimpact.

22. EconomicImpact. The appraisalreport estimated the ERR of this projectat 17%. In its assumptions,the agriculturalresearch component and the cost of consultingservices to PAP were excludedsince the benefits they would generatewould be attributableto developmentactivities beyond the scope of the project. A shadowexchange rate of CFAF 270 per USdollar was used to take accountof the prevailingimport and exporttaxes and the then weak Chadianbalance of paymentsand low level of foreignreserves. The sensitivityanalysis indicated that the rate of returnwould drop to 11.5% if costs were to increaseby 25%.

23. Becauseof the civil war and coupledwith changesin hydro-climaticconditions, this projecthas no noticeableagronomic or economicimpact. No attemptis made to recalculatethe ERR of the project, which in any case would be negative.

V. PERFORMANCE

Consultants

24. Under the circumstances,any assessmentof consultants' performancewould be speculative. Qualificationsof the expertsprovided were good and somuiof them were exceptionallymotivated to ensure the successof the project. But the two successiveproject managers were never given the opportunityto take responsibility,since the GeneralDirector of SODELACdid not delegateauthority.

Borrower

25. After some delays in the start of the project,because of Governmentdelay in finalizingcontracts with the consultants,implementa- tion proceededsmoothly until managementproblems between the ProjectUnit and the GeneralDirector of SODELACslowed down projectactivities. The problemswere reportedto Governmentofficials but no actionswere taken to resolveit. Moreover,local projectstaff were weak and Governmentfailed to assignmore competentstaff, while refusingto recruitexpatriates as substitutes. - 33 -

Co-financier-AFDF

26. The generalproject management problems also affectedthe implementationof AFDF-financedcomponents, which were furtherset back by confusionabout methodsof procurementand delays in the disbursementof funds.

Bank

27. After an identificationmisoion in 1968, the Bank sent a prepara- tion missionin 1972. Identificationand preparationwas performed primarilyby FAO/RMWA. Appraisaltook place in October 1974. The Bank sent nine supervisionmissions, an averageof two missionsper year from 1976 to 1978,one in 1980, and two in 1984. The total number of man-weeks spent in the field was 17.9. Four of the missionshad the participationof an engineer. The continuitywas good with the same projectofficer participatingin all missionstill after 1978.

28. While the technicalsupervision was done competently,the Bank could in hindsighthave taken a strongerstand in the face of the project's managementproblems. In particular,the Bank did not clearlydefine the roles of the ProjectUnit and SODELACbefore project implementation started,resulting in much frictionbetween these two institutions. However,supervision missions and follow-upletters often urged Government to take measureswhich could improveoverall project performance. The responsewas not encouraging,particularly with respectto the performance of SODELAC.

VI. SPECIALISSUES - LESSONSLEARNED

29. The main issue of this projectwas the organizationof SODELAC. Once IDA made a decisionto createa separateUnit within SODELAC to carryout the project,adequate efforts should have been made to carefullydelineate the functionsof the ProjectUnit and SODELAC Directory. Unfortunately,in an attemptto speed up projectprocessing, a number of loose ends were not tightened,which showedup duringproject implementation.If the roles of SODELACand ProjectUnit had been clearly definedat the outset,a number of thesemanagement problems which hindered projectimplementatior might have been avoided.

30. There are also questionsabout the soundnessof projectdesign. The projectdesign was highly sophisticatedand very costly to maintain. The croppingpattern of wheat-cottonwas both technicallyand agronomically difficultto implement. Irrigatedcotton is not cost-effectivein Chad, becausecotton can be grownmore cheaplyin the South. One therefore wonderswhether the desire to maximizeeconomic returns on the projectdid not take precedenceover sound agronomicchoice of croppingpattern. - 34 -

31. It shouldbe recognizedthat the projectarea has good agriculturalpotentials, given a soundlydesigned project. Small traditionalirrigation schemes, similar to the schemecurrently financed by USAID in the projectarea or by IDA in the SateguiDeressia area, are worth consideringfor futuredevelopment in the Lake Chad region. It shouldbe equallyrecognized that IDA's decisionto scale down projectsize from 2,800 to 1,170ha was sound; in hindsight,project size shouldhave been even smaller. The idea of cofinancingthe projectwith other donors also proved to be beneficial. Becausethe projectwas cofinancedwith other donorswho are activein Chad, there was a systematicapproach to the developmentof Lake Chad Polders and the experienceof the projecthas convincedthe donors that any futureproject in the area shouldnot depend on theoreticalmodels but on real chancesof success.

May 31, 1985 WAPAD -35 Annex_I

CHO

LAXE CHAD POLDERSPROJECT (Credit 592-CD)

PROJECTCOMPLETION REPORT Key Indicators2/

Appraisal 2 of Appraisal ----Reali.ed-- -- tstim e- ---Estimates- 1977/78 1978/79 1977/78 1978/79 1977/78 197S/79

1. Cultivated area (ha) Cotton - 220 2032 270 0 81 Wheat - pm 50 520 0 0 Potatoes pm 50 - - - _ Maiz - PM - - - -

2. Yields (t/ha) (forecast) Cotton - 3.5 4.5 2.6 - 134 Wheat - - 3.1 2.6 - 0 Potatoes 25 _- - -

3. Production(t) Cotton 770 90 715 0 108 Wheat - 155 1,330 0 0 Potatoes PM 3/ 1,250 - - - Maize - pm - - - - 4. No. of direct beneficiaries 220 300 -3

Characteristicsof the 1978/79agricultural campaign, as comparedto appraisal estimates,can be summarizedas follows:

(a) Area cultivatedwith cottonwas 812.

(b) Wheat was not grown.

(c) Cotton yield was 35% higher,resulting in an 82 higherproduction.

(d) Number of benefi:iarieswas 73%.

1 / Credit was suspendedin 1979 and project activities were never resumed. 1/ iO fia of cottonon experimental farm. 3/ A large portionof the productionwas lost becauseof inadequatemeans of transportation. 4/ 1 ha per beneficiary. - 36 - Annex 2

CRAD

LAKECHAD POLDERS Credit 592-CD) PROJECTCOMPLETIOid REPORT

Disbursement Table

IDA FiscalYear Actual Disbursements I/ Appraisal 2/ Actual Semester Apprai.sal

1976 1st - 400 N.A 2nd 400 NA

1977 1st 625 1,000 63 2nd 1,136 2,000 57 1978 1st 1,413 3,000 47 2nd 2,143 4,000 54

1979 1st 3,262 4,200 78 2nd 3,800 4,400 86

1980 1st 3,800 4,600 .83 :nd 3,800 . 5,000 76

l/ Creditwas suspendedin 1979 and the balanceof credit funds (USS1.2million) were disbursedagainst the rehabilitationand drought-alleviationactivities of the Ministriesresponsible for Agriculture.

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