World Bank Document

Report No. 2027a-IND Indonesia Irrigation Program Review Public Disclosure Authorized

October 16, 1978 Projects Department East Asia & Pacific Regional Office FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Document of the World Bank

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. CURRENCY EQUIVALENT

US$1.00 - Rupiahs (Rp) 415 Rp 100 - US$0.241 Rp I million - US$2,409.64 ($ refers to US$ throughout report)

WEIGHTS AND MEASURES - METRIC SYSTEM

1 millimeter (mm) - 0.039 inches 1 meter (m) - 39.37 inches 1 kilometer (km) - 0.62 miles 1 square kilometer (sq km) 0.386 square miles 1 hectare (ha) 2.47 acres 1 cubic meter (cu m) - 35.31 cubic feet 1 million cubic meters (MCM) - 811 acre feet 1 liter (1) 0.264 gallons (USA) 1 liter/second (1/sec) 0.035 cubic feet per second 1 kilogram (kg) - 2.2 pounds 1 metric ton (ton) 2,205 pounds

CONVERSION FACTORS FOR RICE

1 ton "dry stalk paddy" - 765 kg rough paddy ("paddy gabah" or "dry rice paddy") 1 ton "paddy gabah" - 680 kg milled rice 1 ton "dry stalk paddy" - 520 kg milled rice

INDONESIA FISCAL YEAR April 1-March 31 Table H 7.1: SAVINGS, INVESTMENT AND FINANCIAL TRANSACTIONS, 1977 (Billion won in current prices)

Total Financial Government Corporate Individual Rest of the World Uqes Sources Uses Sources Uses Sources Uses Sources Uses Sources Uses Sources

Nonfinancial Account 3,725.3 3,725.3 102.2 102.2 829.7 829.7 973.5 973.5 1,502.9 1,502.9 317.0 317.0

Saving - 3,725.3 - 102.2 - 829.7 - 973.5 - 1,502.9 - 317.0

Investment 3,725.3 - 74.5 - 940.1 - 1,951.7 - 759.0 - - -

Financial surplus or deficit - - 27.7 - -110.4 - -978.2 - 743.9 - 317.0 -

Financial Account 6.257.4 6,257.4 2,454.3 2,454.3 514.2 514.2 1,168.2 1,168.2 1,448.2 1,448.2 672.5 672.5

Financial surplus or deficit - - - 27.7 - -110.4 - -978.2 - 743.9 - 317.0

Money 384.1 384.1 5.2 384.1 12.7 - 161.4 - 204.8 - - -

Time and savings deposits 763.1 763.1 4.1 763.1 12.7 - 254.0 - 492.3 - -

Insurance and trust 137.7 137.7 5.1 137.7 5.4 - 13.6 - 113.6 - - -

Other deposits 216.0 216.0 - 216.0 - - 61.6 - 154.4 - - -

Securities 945.1 945.1 169.6 186.3 88.7 255.9 217.5 502.9 469.3 - - -

(NIF) (200.0) (200.0) (125.0) - (29.8) (200.0) (31.2) - (14.0) - - -

bOK loans 150.0 150.0 150.0 - - 150.0 - - - - -

Bank loans 886.9 886.9 886.9 8.9 _ 8.8 - 585.4 - 283.8 - -

Loans of insurance and trust 102.6 102.6 102.6 - - - - 59.4 - 43.2 -

Other loans 603.2 603.2 603.2 - - - - 461.1 - 142.1 -

(NIF) (170.0) (170.0) (170.0) - - - - (170.0) - - - -

Government loans 268.5 268.5 - 268.5 268.5

(NIF) (200.0) (200.0) - (200.0) (200.0) -- -

Equities other than stocks 143.7 143.7 38.9 94.7 97.8 - 4.5 49.0 2.5 -

Trade credit 287.0 287.0 - - 15.8 14.3 271.2 143.5 - 129.2 -

Gold and foreign exchange holdings 355.5 355.5 355.5 ------355.5

Foreign debt 672.5 672.5 - 48.1 - 232.7 - 391.7 - - 672.5 -

1{iscellaneous and ad3ustment 341.5 341.5 133.2 319.2 12.6 -37.1 184.4 -46.6 11.3 106.0 -

Source: EPB, Fourth Five-Year Plan documents.

C)to Page No.

4. ORGANIZATION AND MANAGEMENT OF DGWRD ...... 33

Structure of the DGWRD ...... 33 Suggested Reorganization of DGWRD ...... 36 - Revised Structure ...... 36 - Planning, Programming and Design ...... 37 - Project Implementation ...... 37 - Technical Services ...... 38 Training ...... 38 Project Monitoring ...... 40

5. SUMMARY OF RECOMMENDATIONS.. .. 41

Future Irrigation Development ...... 41 Training and Staff Development...... 41 Organization of the DGWRD...... 43

LIST OF TABLES IN MAIN REPORT

2.1 Harvested Area, Production and Average Yield of Paddy Rice in Java and the Other Islands, 1968-76 ...... 4 2.2 Summary of Estimated Paddy Areas ...... 5 2.3 Summary of Service Areas of Existing Irrigation Systems . . . . . 6 2.4 Summary of Physical Progress and Funding of Irrigation Develop- ment Under Repelita I and II ...... 10 2.5 Estimates of Future Paddy Production with and without Bank Group-Assisted Projects ...... 15 3.1 Summary of Areas Identified for Possible Future Irrigation Development ...... 18 3.2 Imputed Costs of Development for Three Models of Irrigation Development ...... 22 3.3 Estimated Incremental Paddy Rice Production from Potential Irrigation Development ...... 26 3.4 Estimated Costs of Potential Future Irrigation Development . . . 29 3.5 Estimated Implication of Suggested Future Irrigation Development Program .. 30

ANNEXES

1 Terms of Reference . . .. 44 2. The Extent and Quality of Irrigation Development in Indonesia . 46 3. Summary of External Aid for Irrigation and Water Resource Development in Indonesia ...... 62 4. Bank Group Lending for Irrigation Development ...... 72 5. Operation and Maintenance of Irrigation Systems ...... 85 6. Farm Level Water Distribution and Water Users Associations . . . . 92 7. Organization and Management of Directorate General of Water Resources Development ...... 96 8. Training Needs of the Directorate General of Water Resources Development ...... 105 Page No.

9. Potential for Further Irrigation Development or Rehabilitation of Existing Systems ...... 117 10. Economics of Potential Future Irrigation Development ...... 134 11. Estimated Repelita III Development Expenditure by Central Government . 157 12. Preliminary List of Irrigation and Tidal Reclamation Projects for World Bank Assistance ...... 158

LIST OF FIGURES

2.1 Organization of Services for Irrigated Agriculture (8723(2R)) 2.2 Cumulative Disbursements for First Eleven Bank Group Irrigation Loans (19450) 4.1 Ministry of Public Works (18517) 4.2 Directorate General of Water Resources Development (18518) 4.3 Secretariat of the Directorate-General of Water Resources Development (18519) 4.4 Directorate of Planning and Programming (18520) 4.5 Directorate of Rivers (18521) 4.6 Directorate of Swamps (18522) 4.7 Directorate of Irrigation (18523) 4.8 Directorate of Logistics (18524) 4.9 Directorate of Hydraulic Engineering (18525) 4.10 PROSIDA (18724) 4.11 P4S (18662) 4.12 Suggested Structure for Directorate General of Water Resources Development (18663) 4.13 Suggested Structure for a Directorate of Planning, Programming and Design (18664) 4.14 Suggested Structure for a Directorate of Works (18665) 4.15 Typical Organization of a traditional "Dharma Tirta" (18755)

MAPS

Administration and Population (12696 R) National Irrigation Systems, Identifying Location of all Major Systems including Bank- Assisted Projects (13128)

INDONESIA

IRRIGATION PROGRAM REVIEW

SUMMARY AND CONCLUSIONS

Introduction

1. This report represents one component of a program of rural sector studies in Indonesia. It reviews the current program of irrigation development in Indonesia, examines the prospects for and implications of future irrigation development opportunities and finally studies the organization and management of the Directorate General of Water Resources Development (DGWRD) with a view to assessing the planning, implementation and operational capacity of that organization in relation to its current and future activities. It is concerned primarily with the relation between rice production and irrigation development. It does not cover issues such as the relationship between irrigation development and employment and income distribution.

2. Starting from the proposition that increasing rice production should remain a central policy objective for Indonesia this report concludes that by the end of Repelita III (1984) the irrigation development program will need to have been expanded by about 20% if the growth rate of domestic rice production is to keep pace with the expected growth rate in demand (about 4% p.a.). To achieve an expanded and more diversified irrigation development program will require not only an increased budget, but also a larger and more comprehensive training and staff development program, an improvement in supporting services to irrigated agriculture, infrastructure development in islands outside Java as well as a substantial reorganization of the structure of the DGWRD.

3. An earlier Bank survey of Indonesia's irrigation and related agricultural programs in 1975 highlighted the concern of the GOI regarding the continued deficit between the supply of and demand for rice and examined the potential for using irrigation development to reduce that deficit. The situation has not changed, a persistent deficit is further exacerbated by the damage caused by pests and diseases in recent years. Latest estimates indicate that total rice production in 1977 was about 15.9 million tons, virtually the same as the production reported in 1976. This level of output is far less than domestic requirements. During 1977/78 Indonesia imported some 2.3 million tons of rice and the latest estimates suggest that rice imports during 1978/79 will be about the same; these levels of imports exceed those in any of the previous five years. This situation raises crucial questions for the Indonesian Government:

(a) What are the reasons for the apparent deterioration in the domestic rice production/demand situation?

(b) To what extent has irrigation development been able to contribute to increasing rice supplies? - ii -

(c) What are the prospects for an expanded program of irrigation development to bolster the growth rate of rice production?

4. This report will address the second and third questions. The first is outside the terms of reference; however, it will be considered in another study, "Supply Prospects for Major Food Crops", which is currently being prepared.

5. Indonesian farmers harvested some 8.4 million ha of rice in 1976, 4.5 million ha (54%) on Java and 3.9 million ha (46%) on the Other Islands. (Preliminary figures suggest that areas in 1977 were about the same.) Of this total there are about 7.2 million ha of "sawah" (rice fields surrounded by low banks or "bunds") of which 60% are on Java. About 6.1 million ha of the harvested sawah areas are irrigated by irrigation systems of various types (averaging a cropping intensity of about 120%), 1.1 million ha are rainfed. All sawah lands account for almost 95% of the total rice production. As this review shows, irrigation development has received considerable emphasis in the Government's development effort (about 12% of the 1978/79 development budget); the area harvested from sawah lands has increased at an average annual rate of about 1.5% since the late 1960s, compared with the increase of total rice area harvested of about 0.6%. Over the same period the production of rice produced on sawah land increased at an average annual rate of 3.9% compared with about 3.5% for rice production in Indonesia as a whole.

6. Statistics on the areas watered by irrigation systems and the production from these areas have not been published yet. However, from preliminary data made available to the mission it is estimated that in 1968 there were some 4.3 million ha served by irrigation systems, compared with about 5.0 million ha at present. Of the area currently serviced by irrigation systems, it is likely that only about 4.0 million ha of that total are of a quality which is adequate for technically efficient irrigated rice production.

7. The impact of the Government's investment in irrigation is difficult to quantify. The main problem is that rice production is the result of the interaction of a number of factors which jointly influence the final output. Important factors are the production incentives perceived by farmers, the extent and quality of irrigation, crop management standards, the supply of inputs and the services such as extension, credit and marketing facilities available to farmers. The quality of facilities in a number of irrigation systems has not yet achieved design objectives since in many cases the construction of tertiary canals has lagged far behind the construction of primary and secondary canals. In addition, in some areas operation and maintenance and support services for farmers have not been adequate and as a consequence production has suffered.

8. Estimating the impact of irrigation on rice production is further complicated by natural events such as attacks by pests and diseases, abnormal rainfall and various climatic factors. For example, damage to rice crops by the brown plant hopper is estimated to have reduced rice output during 1977 by about one million tons below what it might have been and was probably the major reason for the stagnation of rice production between 1976 and 1977. However, it is accepted that irrigation development has been an important and usually essential ingredient of increased rice production. Analysis of the results of Bank Group-assisted projects has confirmed this.

9. The Bank has been heavily involved with irrigation development in Indonesia since its first loan for rehabilitation of a number of systems in 1969. To date, the Bank has made 11 credits and loans totalling some $447.5 million for irrigation, which are planned to benefit about 1.2 million ha of irrigated land, mainly through the rehabilitation of existing systems on Java which had become run down because of inadequate maintenance. The loans also cover the construction costs for extension of some irrigated areas, studies and training, etc. It is estimated that, when all the ongoing Bank Group-assisted projects have matured and reached full development around 1990, the incremental production resulting from these projects will be in the vicinity of two million tons of rice per year.

Future Irrigation Development

10. With the rehabilitation of most existing irrigation systems either completed or under way, future irrigation development in Indonesia will be heavily oriented to the construction of new gravity systems and swamp and tidal land development outside Java. In addition, it is expected that some large storages will be built on Java to expand dry-season irrigation. On present indications the development on Java is likely to involve about 500,000 ha. In the longer run groundwater development may assume a more significant role throughout Indonesia. In summary the DGWRD has reviewed the potential for future irrigation development and has identified possible projects which would command a total area of about 5.6 million ha made up of 4.0 million ha of new gravity development, 1.3 million ha of swamp and tidal land development, some groundwater development, as well as 0.3 million ha of rehabilitation of existing gravity systems.

11. The orientation of future irrigation development towards the islands outside Java does not mean a rapid move away from irrigation investment on Java. Many of the existing irrigation systems on Java still need to be fully rehabilitated, including further upgrading of simple systems at relatively low cost per hectare, construction of tertiary canals in many existing systems and, where possible, augmentation of water supplies through the construction of storages. By comparison, projects in the Other Islands will generally involve higher investment costs than on Java and require longer lead times between planning and completion of construction. There remain, in economic terms, substantial potential benefits to the economy from the intensification of irrigation development on Java and many of these benefits can be realized relatively quickly compared with the opportunities in the Other Islands.

12. It was not possible in this report to consider the appropriate mix and sequence of irrigation development projects. However, the mission did undertake an assessment of the economics of three of the major types of potential projects. On the basis of the assumptions made in the analysis the rates of return likely to be achieved from swamp and tidal land development, new conventional run-of-the-river gravity systems and large-scale dam development should all be adequate to justify government investment. - iv -

13. An important question facing the GOI now is the rate at which its future irrigation development program can be pursued; it comes at a time when plans are being formulated for the Third Five-Year Plan. The conclusion of this review is that if the GOI wishes to achieve a rate of growth of rice production in the future which matches the expected rate of growth of rice demand (about 4% p.a.), then the annual investment in irrigation development should be increased from its current (1978/79) level of about $520 million p.a. to about $635 million p.a. (1978 prices), by the end of Repelita III (1984), an increase of about 20%. Such an increase should be phased in gradually.

14. Two important matters arise from an enlarged program. The first is whether the future irrigation development will be supported by a comparable expansion of services to irrigation farmers. In particular, extension, input supplies and credit facilities should be available, as well as adequate infrastructure. While the mission has not made an estimate of the funds which would be required for such activities it is likely that the increase would be comparable to the proportional increase suggested for irrigation development. This raises the whole question of whether the volume of funds allocated to agriculture and irrigation (about 19% of all local currency development expenditure in 1978/79) should be increased at the expense of other sectors in the economy, or whether the total budget allocation to agriculture and irrigation should remain constant with reallocation within this total. This is a matter which is beyond the scope of this report, but will need to be addressed in the context of the sectoral planning for the economy as a whole.

Organization and Management of DGWRD

15. The second matter concerns the DGWRD. It is the mission's conclusion that the present staffing and organizational structure of the DGWRD are not likely to be able to cope with such an expansion of activities, particularly since it will involve a substantial change in the type of projects and a much greater geographical spread of work compared with the present.

16. The DGWRD, which is the institution with the primary responsibility for constructing irrigation systems, has a reputation within the Government for efficiency and high standards. Despite the fact that projects have been and are still somewhat delayed, and forward planning and project preparation are at times deficient, the substantial progress which has been made in irrigation development in Indonesia is to a large extent due to the success of the DGWRD and the energy of its staff. However, there is much evidence that already some of the senior staff of the DGWRD are overstretched in terms of the demands made on them. The rapid expansion of the work program in recent years has not only placed increased pressures on senior management, but it has also resulted in an increase in the amount of outside consultant assistance in various forms. While the use of consultants has probably not been out of line with the growth of the work program, it does appear that the activities of consultants are becoming increasingly difficult for the DGWRD to manage and absorb. The mission reached the conclusion that staff should be trained and developed to take control of more of the DGWRD activities, thereby gradually reducing reliance on consultants in the longer term. -v -

17. In addition, the present organization of the DGWRD is reaching the limit of its capacity to undertake a greater volume and variety of work spread over a wide geographical area. The DGWRD is organized on functional lines, having major directorates responsible for such functions as gravity irrigation, river and flood control, swamp development, etc. This type of organization results in duplication of activities and lack of coordination between the different forms of water resources development in the regions. In addition the scope of future work, which emphasizes new development of gravity irrigation, as well as swamp and tidal land development, will place even more pressures on the already strained coordination mechanisms and will also exacerbate the current uneven work load between the functional directorates.

18. While there are traditional reasons for the functional organizational structure, it is recommended that a change in the basic organization to one which emphasizes regional responsibilities, with regional directorates of works, having responsibility for all irrigation development in a specific region of Indonesia., would improve the efficiency and future implementation capacity of the DGWRD. Such a change in structure would make it possible for the DGWRD to carry out an enlarged and more diverse program of irrigation development, give it better control over routine activities and training of staff and, with a special directorate having the responsibility solely for planning, programming and design, give it an improved forward planning capability.

Recommendations

19. This report recommends that, if the GOI wishes to maintain a growth rate in rice production which is comparable to the expected growth rate in demand:

(a) The annual program of irrigation development and the budget in constant prices allocated to the DGWRD be increased in stages by up to about 20% by the end of Repelita III (see para. 3.30 and Annex 9).

(b) The training and development of staff in the DGWRD be given greater priority than it has been given in the past (see para. 4.15 and Annex 8).

(c) The Directorate General of Water Resources Development should be restructured along regional lines (see para. 4.09 and Annex 7).

20. A list of specific recommendations can be found in Chapter 5 of this review.

INDONESIA

IRRIGATION PROGRAM REVIEW

1. BACKGROUND

The Setting

1.01 The declining growth rate in rice production in recent years has worried both the Government of Indonesia (GOI) and the Bank. This concern is underlined by the rising trend in imports of rice to a level which were in the vicinity of 2.3 million tons in 1977/78 and in 1978/79 are likely to be about the same; imports of such a magnitude are substantially greater than in previous years. With about 95% of rice production in Indonesia produced under either irrigated or wet land conditions,/l the Bank was concerned to review the progress made in irrigation, the current development program, the future irrigation development program and the impact of irrigation on capital requirements and rice production.

1.02 The main objective of this report therefore was to review the current program of irrigation development, examine the prospects for and implications of future irrigation development and to study the organization and management of the Directorate General of Water Resources Development with a view to assessing the planning, implementation and operational capacity of that organization in relation to its current activities as well as the plans for future irrigation development. Annex 1 discusses the mission's terms of reference in more detail.

1.03 The quite specific and limited terms of reference for this review were chosen deliberately. There will be no discussion of supporting services for irrigated agriculture, this subject was discussed in detail in the Bank's Irrigation Program Survey of April 1975,/2 and more recently in "A Review of the Supporting Services for Food Production," of October 1978. In addition it is not the purpose of this review to examine in detail each irrigation project receiving financial assistance from the Bank. Supervision reports provide a regular review of each project and moreover Project Completion Reports (PCR), together with Project Performance Audit Reports (PPAR) by the Operations Evaluation Department (OED), provide the Bank's management and the Executive Directors with a considerable amount of information with respect to the progress and results of project loans. Furthermore in the case of Indonesia, OED has completed recently a review of all rural sector lending which placed particular emphasis on the Bank's lending for irrigation.

/1 "Wet land" areas or rainfed sawah refers to rice lands which feature small banks (bunds) around the rice fields which will retain rainfall. They are areas which are not irrigated by an artificial water supply. Irrigated and wet lands will in this report be referred to together as sawah lands.

/2 Indonesia, "Irrigation Program Survey," Report No. 705-IND, April 15, 1975. -2-

Mission Work

1.04 This report is based on the findings of a mission composed of Messrs. J.W. van Holst Pellekaan and R.H.S. Fennell (Bank), Tan Sri John Daniel, R.B. Campbell, and M. Fireman (consultants), which was in Indonesia during September/October 1977. Mr. D. Johnson assisted with the computa- tions. Mission members held extensive and detailed discussions with senior staff of the Directorate General of Water Resources Development (DGWRD) and a number of other government institutions including BAPPENAS and the Ministry of Education. In addition, with the generous assistance of the DGWRD, members of the mission made visits to various ongoing irrigation developments on Java and visited areas in the Other Islands where future irrigation and tidal reclamation developments are under construction or being planned. In January 1978 some members of the mission returned to Jakarta to discuss a preliminary draft of the report with the DGWRD. The mission is grateful to the Director-General and staff of the DGWRD for their substantial assistance during the preparation of this report. -3-

2. CURRENT IRRIGATION DEVELOPMENT

The Extent of Irrigated Agriculture /1

2.01 Although Indonesia has a monsoonal climate with annual rainfall in rice producing areas ranging between 1,500 to 3,000 mm p.a., irrigation is of critical importance to rice production. On Java a large part of this rainfall comes in the wet season and while in aggregate it is usually adequate for paddy rice production, its distribution during the year varies with the result that there may even be periods during the wet season when the supply of rain water is inadequate for optimum rice production. During these periods supplementary irrigation is required to ensure technically efficient rice production. On the other hand crops can also be damaged during the wet season because of excessive amounts of rain, making drainage just as important as irrigation in most rice growing areas. During the dry season rice production is on Java is usually impossible without irrigation. On the islands outside Java rainfall patterns vary a great deal. In Sumatera the distribution of rainfall during the year is more even than in most of Java resulting in a less pronounced dry season. However, more permeable soils in the islands outside Java often make supplementary irrigation still necessary. In most of the eastern islands the wet season is shorter and more pronounced with a severe dry season on many islands.

2.02 Rice is the dominant irrigated crop in Indonesia. In 1976 it was estimated that there were some 8.4 million ha of rice harvested in Indonesia (4.5 million ha in Java and 3.9 million ha on the Other Islands), of which about 7.2 million ha were irrigated or cultivated under wet land (sawah lands) conditions (4.2 million ha on Java and 3.0 million ha on the Other Islands)./2 Sawah lands account for almost 95% of total rice production in Indonesia. Table 2.1 shows that the growth rate of the area harvested from sawah lands has been about 1.5% p.a. between 1968 to 1977. Over the same period the total area harvested increased by about 0.6% per annum; the expansion of the area of sawah land in recent years has been an important factor in the development of the agricultural sector.

2.03 Other crops such as sugarcane, soyabeans and corn are also irrigated. The total irrigated area of these other crops is not yet known; however, it is known that irrigation of crops other than rice is found mainly on Java./3 Most of these other crops become part of the rotation with rice,

LI It is not the purpose of this report to trace the development of irrigation in Indonesia nor to dwell in detail on the present situation. Two recent articles by A. Booth, "Irrigation in Indonesia," Parts I and II, in the Bulletin of Indonesian Economic Studies, Volume XIII, Nos. 1 and 2, March and July 1977, provide an interesting background and discussion of various aspects of irrigation development.

/2 Of the 7.2 million ha of sawah lands, about 6.1 million ha are irrigated, about 1.1 million ha are rainfed. Preliminary figures for 1977 suggest that area and production are about the same as 1976.

/3 Data on the area of palawija crops is now becoming available and will be discussed in more detail in the report, "Supply Prospects for Food Crops." -4-

Table 2.1

Table 2.1: HARVESTED AREA, PRODUCTION AND AVERAGE YIELD OF PADDY RICE IN JAVA AND THE OTHER ISLANDS, 1968-77

Area Harvested Paddy Production /a Yield /a Outside Outside Outside Year Java Java Indonesia Java Java Indonesia Java Java Indonesia ------Million ha ------Million ton paddy ------Ton paddy/ha -----

Irrigated and Wet Land /b

1968 3.86 2.51 6.36 9.955 5.406 15.361 2.58 2.15 2.41 1969 3.95 2.60 6.54 10.653 5,775 16.428 2.70 2.22 2.51 1970 3.96 2.72 6.68 11.205 6.504 17.709 2.83 2.39 2.65 1971 4.05 2.84 6.89 11.991 6.605 18.596 2.96 2.32 2.70 1972 4.01 2.60 6.61 11.518 6.385 17.903 2.87 2.45 2.70 1973 4.24 2.83 7.06 12.600 7.215 19.815 2.97 2.55 2.81 1974 4.45 2.89 7.34 13.526 7.535 21.061 3.04 2.61 2.87 1975 4.39 2.95 7.33 13.369 7.489 20.858 3.05 2.54 2.84 1976 4.22 3.01 7.23 13.723 8.128 21.852 3.25 2.70 3.07 1977 /c 4.15 3.06 7.21 13.354 8.555 21.909 3.22 2.79 3.04

Average Annual Growth Rate, 1968 to 1977 /d 1.2% 2.0% 1.5% 3.5% 4.7% 3.9% 2.3% 2.7% 2.4%

Unirrigated and Dry Land

1968 0.41 1.25 1.66 0.451 1.351 1.802 1.10 1.08 1.08 1969 0.35 1.12 1.47 0.387 1.206 1.593 1.11 1.08 1.08 1970 0.34 1.11 1.46 0.397 1.226 1.623 1.17 1.10 1.11 1971 0.37 1.07 1.43 0.424 1.170 1.594 1.15 1.09 1.11 1972 0.33 0.97 1.31 0.407 1.084 1.491 1.23 1.11 1.14 1973 0.33 1.01 1.34 0.441 1.234 1.675 1.34 1.22 1.25 1974 0.29 0.88 1.17 0.358 1.054 1.412 1.23 1.20 1.20 1975 0.26 0.90 1.16 0.357 1.124 1.481 1.37 1.25 1.28 1976 0.25 0.89 1.14 0.339 1.110 1.449 1.36 1.25 1.27 1977 /c 0.24 0.94 1.18 0.347 1.187 1.534 1.44 1.26 1.30

Average Annual Growth Rate, 1968 to 1977 /d -5.6% -3.5% -4.0% -2.6% -1.4% -1.7% 3.0% 2.1% 2.3%

Total Irrigated, Wet Land, Unirrigated and Dry Land

1968 4.27 3.76 8.02 10.406 6.756 17.163 2.44 1.80 2.14 1969 4.30 3.72 8.01 11.040 6.981 18.020 2.57 1.88 2.25 1970 4.30 3.83 8.14 11.601 7.730 19.331 2.70 2.01 2.37 1971 4.42 3.91 8.32 12.414 7.775 20.190 2.80 1.99 2.43 1972 4.34 3.57 7.90 11.925 7.469 19.394 2.75 2.09 2.45 1973 4.57 3.84 8.40 13.041 8.449 21.489 2.85 2.20 2.56 1974 4.72 3.78 8.51 13.884 8.589 22.473 2.94 2.27 2.64 1975 4.65 3.85 8.50 13.726 8.613 22.339 2.95 2.24 2.63 1976 4.47 3.90 8.37 14.062 9.239 23.300 3.15 2.37 2.78 1977 /c 4.39 4.00 8.39 13.702 9.741 23.443 3.12 2.43 2.77

Average Annual Growth Rate, 1968 to 1977 /d 0.7% 0.5% 0.6% 3.3% 3.8% 3.5% 2.6% 3.2% 2.8%

/a Official statistics up to and including 1976 show production and yield in terms of stalk paddy. Production and yield figures in this table are in terms of rough paddy also referred to as dry rice paddy ("paddy gabah"), assuming 1 kg stalk paddy - 0.765 kg rough paddy. Also official statistics now use conversion rate for paddy gabah to milled rice as 0.68.

/b Refers to irrigated and rainfed sawah. The term "sawah" refers to all rice fields, irrigated or rainfed, which have low banks or bunds built around them to retain water so that rice can be grown under flooded conditions.

/c Preliminary estimate.

/d Computed by fitting semi-log regression line.

Source: Central Bureau of Statistics. - 5 -

although irrigated sugarcane, which has at least a 12 to 18 month growing season if no ratooning is adopted, is a direct competitor with rice for irrigated land. The use of irrigated land for sugarcane is in most cases strongly influenced by the location of established sugar mills and traditional arrangements and agreements between mill managements and village leaders which will probably persist. The total area of land used for sugar in Indonesia is about 200,000 ha. It is estimated that about 50% of this area is irrigated. Thus, while irrigated sugarcane is undoubtedly an important form of land use in some areas of Java and is an important source of employment and income for a number of communities, it is nevertheless relatively unimportant in the context of the total irrigated area throughout Indonesia.

2.04 Irrigated areas in Indonesia are usually classified according to the type and quality of irrigation facilities provided. The three classifi- cations commonly used are "technical", "semi-technical" and "simple". Tech- nical irrigation systems are those which have a water supply system which is separate from the drainage system and where the volume of incoming water delivered can be measured at a number of points. Semi-technical systems have fewer permanent structures, have only one water measurement device (usually at the major intake) and the supply and drainage systems are not always fully

Table 2.2: SUMMARY OF ESTIMATED PADDY AREAS (1977)/a

Cropping Harvested Type of paddy area Service area tb intensity area (million ha) (%) (million ha)

Irrigated Paddy Technical 2.1 Semi-technical 0.9 . . . Simple (incl. village) 2.0 .

Subtotal 5.0 116 5.8

Wet Land Paddy Rainfed 1.0 100 1.0 Swamp (incl. tidal) 0.5 100 0.5 Nonirrigated upland 1.1 100 1.1

Total 7.6 110 8.4

/a Mission estimates based on published statistics.

/b This refers to the service area for irrigated land and cultivated land for nonirrigated areas. Not all of the irrigation service areas are provided with irrigation water because distribution systems have not been constructed and hence the actual rice cropping intensity may be significantly higher than shown in this table. - 6 - separate. Simple systems have no measurement devices, and conveyance systems for water supply and drainage are not separate, with the possibility of recirculation of water. A further classification of irrigation systems is on the basis of the controlling authority. Most of Indonesia's irrigation systems (about 80%) are under the control of the Ministry of Public Works. The remainder are known as "village" irrigation systems which are managed, operated and usually constructed under the leadership of village chiefs. Often village systems are constructed without the advice of professional engineers. In recent years some of the finance for these village construction programs has come through the INPRES program./l The extent and quality of irrigation systems in Indonesia are discussed in detail in Annex 2. Table 2.2 provides a summary of the estimated situation in 1977.

2.05 The regional distribution of irrigation service areas is shown in Annex 2, Table 1. A summary of the estimated current situation for service areas under Government or village control is given below. The discrepancy between the swamp land areas shown in the next table and in the Table 2.2 is accounted for by the areas occupied by spontaneous settlers who occupy fringes of coastal Sumatera and Kalimantan.

Table 2.3: SUMMARY OF SERVICE AREAS OF EXISTING IRRIGATION SYSTEMS /a

Tidal Gravity irrigation and Semi- swamp Technical technical Simple Village lands/b Total' Region ------million ha ------

Java 1.63 0.38 0.55 0.53 - 3.10 62 Bali - 0.04 0.01 0.05 - 0.10 2 Sumatera 0.22 0.32 0.28 0.29 0.03 1.15 23 Kalimantan - 0.02 0.04 0.02 0.04 0.11 2 Sulawesi 0.14 0.09 0.05 0.09 - 0.35 7 Nusa Tenggara 0.07 0.06 0.05 0.04 - 0.21 4

Total 2.06 0.91 0.98 1.02 0.07 5.03 100

Source: Directorate General of Water Resources.

/a All these service areas, except the "village" systems, are under the control of the Ministry of Public Works and Electric Power; they do not include swamp and tidal land areas occupied by spontaneous settlers (see para. 2.05). Some of the totals appear to be incorrect because of rounding.

/b Includes tidal and fresh water swamps.

/1 INPRES is an acronym for Instruksi Presiden - "Presidential Instruction," a rural public works program. 2.06 These figures, together with those in Table 2.1, underline the importance of irrigation to agricultural production on Java. With only 7% of the land area, Java accounts for about 60% of the irrigation service area and about 60% of the area of sawah rice harvested. Java is endowed with the best soils for irrigated rice production L] and supports about 66% of the population, so that the extent of irrigation areas in Indonesia would appear to be in reasonable balance with the broad distribution of population, however, the productivity of sawahs in Java is greater than in the Other Islands. For example, in the years 1976 and 1977 the average paddy yield from sawah areas in Java was about 3.2 ton/ha compared with about 2.8 ton/ha in the Other Islands (see Table 2.1).

Institutional Responsibility for Irrigation

2.07 The earlier Irrigation Program Survey (see para. 1.03) reviewed the responsibilities of various government institutions for irrigated agriculture. Basically the situation has not changed since that report was written. Figure 2.1 shows the current situation; it shows clearly the extent to which the coordination of a number of ministries is required to deliver irrigation and the associated services to Indonesian farmers. Para. 1.03 explains that this report is not intended to review again all those institutions and organizations which have a role in irrigated agriculture. The operations and activities of the Ministry for Public Works, which has the overall responsibility for irrigation, and the Directorate General of Water Resources Development within that Ministry which has the major responsibility for constructing irrigation systems, will be discussed in Chapter 4 and Annex 7 of this review.

Operation and Maintenance of Irrigation Systems

2.08 Operation and maintenance (O&M) of irrigation systems down to the tertiary outlet has traditionally been the responsibility of the Provincial Public Works services. Beyond that point farmers, through their various village organizations, are responsible for O&M. The neglect of this activity at both the provincial and village level over many years first led to the need for the extensive rehabilitation program. Bank Group-assisted projects have included components for the establishment and equipping of O&M organizations, and despite early problems, improvements are being achieved; however, for Indonesia as a whole the standard of O&M is still unsatisfactory and is inevitably resulting in below optimum production on irrigated areas and perpetuating the need for system rehabilitation.

2.09 So far as the primary and secondary canals are concerned, the main constraints to the improvement of O&M standards is the lack of sufficient funds and trained personnel, particularly at the lower levels, and an inappro- priate distribution of staff (see Annex 8, para. 12). It is evident that there is a lack of motivation among O&M staff, who consider that maintenance work is not as "glamorous" as development work. There is also an attitude of "permissiveness" among irrigation officials who are often not sufficiently

/1 Soils in Java used for paddy production are characterized by fine texture, limited swelling, shrinking and a high content of easily decomposable minerals which provide most of the nutrients needed for crop production. These soils are generally more productive than those in the Other Islands (for yield comparison, see Table 2.1). firm on matters of unsatisfactory maintenance and in dealing with problems of water allocation between competing irrigation communities. These attitudes can only be changed by more frequent and direct involvement of the most senior officials of the Provincial Public Works and the DGWRD in O&M work. The normal tendency is for top management to give priority to the construction aspects of projects as these lend themselves to straightforward evaluation of success or failure, whereas the lack of effective maintenance is not readily evident since it often takes several years before its adverse effects become apparent. (Annex 5 contains a number of suggestions for strategies to improve the quality of O&M.)

2.10 At the village level, O&M is dependent on the cooperative effort of farmers through various kinds of water management organizations (see Annexes 5 and 6). These organizations vary in their structure and effectiveness, but generally they are inadequate to achieve efficient or equitable water management. While the mission was concerned by the quality and effectiveness of the O&M carried out by the Provincial Public Works service, it was just as concerned by an apparent weakening of the existing institutional arrangements for water management and O&M at the village level L1 and at the same time a very slow growth in the establishment of formal water user associations.

2.11 The cost of operation and maintenance of primary and secondary canals in Government irrigation systems is financed primarily through the provincial government's budget. Contributions to the costs of regional development are collected from owners of land through the IPEDA tax./2 Some of the proceeds from this tax are allocated to the operation and maintenance of irrigation systems in the provinces. The funds allocated to O&M have, since 1974/75, been supplemented by subsidies from the Central Govern- ment (see Annex 5). Apart from the IPEDA tax share there is at present no formal water charge levied from farmers for primary and secondary delivery. On the other hand, operation and maintenance of the tertiary systems is financed through a variety of gratuities, formal and informal payments by farmers to those in the village responsible for the allocation and distribution of water.

2.12 The improvement of O&M standards in irrigation systems at all levels will need to come from increased and higher quality staffing, greater involvement by senior staff of both DGWRD and the Provincial Public Works and more financial support for O&M, in terms of both the volume and timeliness of funds.

2.13 The suggested changes in the structure of the DGWRD discussed in a later chapter provides for the coordination of O&M responsibilities of the DGWRD in the Directorate of Planning, Programming and Design and for

/1 For example, in some villages the traditional distribution of water through a village irrigation official or "ulu ulu" has been disbanded because of inefficiency and corruption. It has not always been replaced by improved management systems.

/2 IPEDA means "Iuran Pembanguanan Daerah" which operates under Law No. 11/PRP/1959. It is basically a land tax collected annually from land owners at the rate of 5% of the net value of production. The construction of an irrigation system would raise the net value of the land and consequently the IPEDA tax. advice on O&M in each of the proposed regional Directorates of Works. It is imperative that the DGWRD continue its emphasis on improving the quality of O&M work and provide guidance and advice at the regional level. With respect to financing, the DGWRD is pressing for an allocation of 30% of the IPEDA tax to the financing of operation and maintenance of irrigation systems. These funds, together with a continued Central Government contribution and an improvement in O&M staffing should go a long way towards upgrading O&M standards and consequently reducing the need for regular system rehabilitation.

Irrigation Development Under the First Five Year Plan

2.14 Indonesia's first five year plan (Repelita I) set a target of 830,000 ha for rehabilitation of irrigation systems and 430,000 ha of new development. The published data report that the target for rehabilitation L was achieved, but it is doubtful that all work in the plan was actually completed. For example, as the discussion of the Bank-assisted projects in Annex 2 points out, while the primary and secondary distribution systems are well on the way to being finished, most of the tertiary development had not even been started. It is also clear from Table 2.4 that targets for new development (extension) of irrigation systems were not achieved. The GOI was forced to delay the construction of new systems, which were mainly to serve as a basis for transmigration projects in the Other Islands, because of the priority allocation of both finance and manpower to rehabilitation. The government tidal reclamation program, which was started about 1968 with plans for the development of one million ha, achieved only about 33,000 ha during Repelita I (see Annex 9). On the other hand, development of a much larger area, about 300,000 ha, by spontaneous settlers had taken place over a number of years starting well before 1968.

2.15 The emphasis given to rehabilitation in Repelita I was in line with the Government's aims at that time of restoring existing infrastructure to working order as well as its desire to achieve rapid increases in grain production, particularly rice. The First Five-Year Plan also saw a substantial increase in the commitment of foreign aid for irrigation development, much of it from the Bank. The magnitude, origin and nature of foreign aid are summarized in Annex 3.

/1 Rehabilitation usually involves the restoration of existing irrigation systems to their original standard. However for PROSIDA projects it also involves system improvements. Other Directorates are now also taking this example. Table 2.4: SUMMARY OF PHYSICAL PROGRESS AND FUNDING OF IRRIGATION DEVELOPMENT UNDER REPELITA I and II /a

Repelita I Repelita II Total Total Type of planned Achievements planned Achievements program/financing target 1969-70 1970-71 1971-72 1972-73 1973-74 Total target 1974-75 1975-76 1976-77 1977-78 1978-79

Physical targets/progress ------ha ------ha ------

Irrigation rehabilitation 830,000 210,330 171,549 135,754 172,444 263,469 953,546 834,698 108,956 105,143 112,011/d n.a. n.a. Irrigation extension 430,000 43,153 24,379 46,400 45,834 31,480 191,246 950,000 20,684 88,522 63,435/d n.a. n.a. River and flood control /c n.a. 73,259 62,406 57,045 55,875 40,853 248,585 679,190 79,278 148,822 71,797/d n.a. n.a. Swamp and tidal development n.a. 21,059 25,000 14,905 61,562 56,140 178,666 /e /e /e /e n.a. n.a.

Development budget allocation/ expenditure /f ------Rp. million ------Rp. million ------

Irrigation rehabilitation 49,971 7,603 7,865 9,192 11,011 14,300 49,971 n.a. 10,736 16,840 26,485 36,243 53,722 Irrigation extension 25,034 5,335 4,566 4,739 5,394 5,000 25,034 n.a. 14,339 26,131 36,203 50,228 68,812 River and flood control 6,346 1,942 901 920 1,383 1,200 6,346 n.a. 10,095 36,829 37,580 46,830 65,366 Swamp and tidal development / 33,078 5,826 6,336 6,475 7,041 7,400 33,078 n.a. 1,030 2,000 2,000 2,250 2,875

Subtotal 114,429 20,706 19,668 21,326 24,829 27,900 114,429 n.a. 36,200 81,800 102,268 135,551 190,775

Routine expenditure /h n.a. 133 250 261 321 392 1,357 n.a. 583 1,141 1,424 1,794 2,085

Foreign aid /i Project aid 40,125 3,075 1,777 5,382 5,810 7,761 23,805 187,539 5,935 10,043 8,591 18,592 4,939/i Technical assistance 17,063 - 983 1,159 3,113 1,494 6,749 18,883 1,868 3,154 3,486 8,093 Buyer's credit /k ------68,890 - 52,996 3,984 11,911 -/

Subtotal 57,188 3,075 2,760 6,541 8,923 9,255 30,554 275,312 7,803 66,193 16,061 38,596 4,939/i

Total (RP. million) n.a. 23,914 22,678 28,128 34,103 37,547 146,340 n.a. 44,586 149,134 119,753 175,941 n.a.

Total ($ million) /1 64 60 68 82 90 107 359 289 424 520(est.)

n.a.: Not available.

/a Refers to irrigation development under the control of the Directorate General of Water Resources Development and the Jatiluhur Authority. Expenditures on irrigation development under the INPRES program are not included. /b For fiscal years April 1 to March 31. /c Includes tidal and swamp development in Repelita II. /d Includes only area developed during first quarter of 1976-77, namely up to and including June 30, 1977. Te For Repelita II the areas for swampy land development are included with "River and flood control." /f The mission was not able to obtain data on actual expenditure; however, it is reasonable to assume that expenditure was close to the budgeted amount. /g In Repelita II, swamp and tidal development is grouped with river and flood control. The figures shown in Repelita II are contributions to overheads general administrative costs of the Central Government. /h Includes salaries for permanent staff, office equipment and supporting services, etc. 7i Exchange rates used to convert foreign currency to Rp were the official rates prevailing in year of disbursement. X For the first three months of 1978-79 fiscal year. Credit extended to the Government through commercial or semi-Government lending institutions. /1 US$1 = Rp 415 for all years except 1969 up to 1971/72.

Source: Directorate General of Water Resources Development. Irrigation Development Under the Second Five-Year Plan

2.16 The second plan (Repelita II) started in 1974 with an ambitious target, but as is apparent from Table 2.4, the targets are unlikely to be reached by the end of the plan period in April 1979; any estimate of actual achievements would be speculative at this stage, although it is clear that many of these projects will not be completed by 1979. Table 2.4 also shows the rapid growth in the Repelita II rupiah budget allocations for irrigation development since 1974/7-5. The annual rate of growth between 1974/75 and 1977/78 averaged about 40% and even allowing for an annual inflation rate over the same period between 15% and 25% the real rate of growth in the rupiah budget has been substantial. The rapid rate of increase in the domestic budget for irrigation development has meant that the disbursed foreign aid as a proportion of the total outlay on irrigation development has declined considerably in recent years. On the other hand, sharply increased disbursements of foreign aid are expected over the next five years, mainly because of the lags between commitment of funds and project execution. (For the anticipated disbursements from Bank Group loans see Annex 4).

2.17 Table 6 of Annex 2 shows that about 1.6 million ha are presently either under construction or in the design stage. The table shows that a shift is taking place in the broad type and location of irrigation development. While conventional gravity irrigation systems remain important, accounting for about 80% of the current activities, 60% of the work is for new development. Not only is the emphasis of activity moving away from rehabilitation, but in terms of area some 60% of all current work is located outside Java.

2.18 There are two other characteristics of Repelita II worth noting. About 80% of the conventional projects under construction or in the design stage are less than 2,000 ha in size and, while these projects account at most for only 30% of the total area involved, they make up a significant part of the program of irrigation development. The prominence of small projects results to a large extent from the "Sederhana" or small-scale irrigation development program which the GOI initiated at the start of Repelita II, with the stated aims of both increasing rice production and improving the well-being of the low-income segment of the population by means of simplified design and construction standards applied to projects whose size would be no greater than 2,000 ha. Another aspect of the Sederhana program is that most of these projects would be outside Java (see Table 8, Annex 2). The Sederhana program is discussed in more detail in Annex 2.

2.19 A second feature of the current program of construction, which is also relevant to future irrigation development, is the tidal and swamp land reclamation program. As mentioned in para. 2.14, the development of these areas by the GOI started during Repelita I, but progress fell far short of the target. Although many engineering and agricultural questions remain to be solved, substantial areas have already been developed in Sumatera and Kalimantan for the purposes of settling transmigrants. Even though tidal and swamp land reclamation is only a small part of the total water resources - 12 -

development for agriculture, it is important in the context of the expansion of rice-producing areas and the transmigration program. The future prospects of tidal land reclamation and its problems are discussed in more detail in Annex 2. In addition, further background information *isavailable from the report of a conference held in Rome in 1975 to discuss tidal land development in Indonesia./li

Impact of Irrigation Development on Rice Production

2.20 Irrigated land in Indonesia is used primarily for rice production, although in those areas where irrigation systems are incapable of delivering adequate water supplies for rice production during the dry season palawija crops L2 are grown using residual soil moisture and rainfall. Nevertheless, because of the importance of irrigation development to rice production, this section of the report will concentrate on the extent to which the heavy investment in irrigation over recent years has been associated with increased rice output.

2.21 It should be stressed at the outset that the rehabilitation and extension of irrigation systems alone will not necessarily result in significant increased rice production. Improved farm management, namely use of appropriate cultivation practices, correct types and quantities of inputs, pest and disease control, and careful attention to water management are all factors which jointly determine the level and rate of growth of rice output. For example, it is likely that the increased cropping intensity made possible by irrigation has intensified the need for more intensive programs of pest and disease control. Nevertheless there is little argument about the view that the availability of a reliable irrigation system makes it both technically feasible and economic to adopt a more intensive crop management and to use improved levels of inputs.

(a) Aggregate Situation for Indonesia

2.22 Table 2.1 shows that between 1968 and 1977 the area of sawah rice harvested has expanded from 6.36 million ha to 7.21 million ha, an increase of about 0.9 million ha The increase was associated with a decline of 0.5 million ha in the area of dry land rice harvested, most of which was presumably converted to irrigated or rainfed sawah. In addition some 0.4 million ha were added to the total area harvested either through further extension of irrigation areas or increased cropping intensity on existing irrigation areas. Estimates in Table 2.2 suggest that of the total sawah area harvested in 1976/77, up to 5.8 million ha were harvested from irrigated

/1 See "Indonesia, Development of Tidal Lands in South-East Sumatera." Report of a Seminar held at the FAO, Rome, on November 24-26, 1975.

/2 The term "palawija" refers to crops other than sugarcane which are grown in a rotation with rice. This group usually includes crops such as maize, various beans, pulses and cassava. The importance of these crops to total food production will be discussed in more detail in the Bank report on the Supply Prospects for Major Food Crops. - 13 -

land, the remainder being rainfed sawah with no water supply from an irrigation system. Over the same period the production of paddy rice from sawah lands rose by about 6.5 million ton increasing at an annual rate of about 3.9% p.a. (accounted for by a yield growth of 2.4% p.a. and area growth of 1.5% p.a.). On the other hand, because production from dry land areas declined, total production increase by only 6 million ton, growing at a rate of 3.5% p.a. (yield .8% p.a. and area 0.6% p.a.).

2.23 Although average yields on all irrigated land (including rainfed sawah) have been increasing at about the same rate as yields on unirrigated or dry land areas, the absolute increase in per ha yield of paddy on sawah areas (.4 ton/ha) has been twich the increase in yield on dry land (0.2 ton/ha). While it cannot be assumed that the margin between the average yield from irrigated and nonirrigated land has been solely due to improvements and extension of irrigation systems (see para. 2.20), it is reasonable to assume that a significant part of the explanation is irrigation. The significant contribution of sawah production to the growth of total rice output is underlined by the fact that whereas the growth rates of yield on both sawah and dry land areas are about the same 2.4%) the overall growth rate is significantly higher (2.8%). This implies that the shift to a greater proportion of rice production originating from sawah land has had a major influence on aggregate productivity growth.

2.24 The strong growth rate in the area of sawah rice harvested can be attributed to both increased cropping intensity and the extension of irrigation systems. Rehabilitation of village systems in Java has received considerable attention in the years 1968 to 1974, but it is not apparent from the available statistics that as a result yield improvements on sawah land in Java have been significantly better than on the Other Islands (yield increases in both regions have been about 0.6 ton since 1968).

2.25 Although the importance of irrigation development to yield increases is widely accepted, it is difficult to isolate the contribution of irrigation water from other factors. For example, attempts have been made to correlate yield with the extent of irrigation coverage in a region using the ratio between the total of technically and semi-technically irrigated area and total sawah area. The results so far have been mixed and inconclusive and confirm that irrigation alone will not result in significant sustained increases in productivity. The recent Asian Agricultural Survey L1 sought to quantify the relative importance of the contribution of area and yield to rice production. For Indonesia the results of the analysis for the years 1965 to 1972 confirmed the conclusion in paragraph 2.23 that the decline in the growth of dry land rice areas has been more than offset by an expansion in irrigated or sawah area. For the years used in the analysis (a period of rapid production growth) area increases accounted for about 40% of total growth, irrigation

/1 Asian Agricultural Survey, 1976. Rural Asia: Challenge and Opportunity, Asian Development Bank, Manila, April, 1977, p. 75. - 14 - contributed close to 47% and dry land -7%. So far as yield is concerned the major influence was fertilizer which is estimated to have accounted for 25% of total production growth, other factors (most importantly the change in the proportion of land irrigated) about 35%.

2.26 Apart from the difficulties encountered because of the unavailability of statistics which record production from irrigation areas as distinct from all sawah areas, and the many factors which jointly determine production,/l it is probably too early to draw conclusions about the impact of recent investments in irrigation since many of these developments will not mature until well into the 1980s. The mission was not able to obtain information on the likely impact of all irrigation investments, but it has made an assessment of the impact of Bank-assisted projects.

(b) Contribution by Bank Group-Assisted Irrigation Projects

2.27 Annex 4 discusses in some detail the World Bank's lending program for irrigation. These projects cover about 1.2 million ha out of about 5 million ha of land which is declared as being serviced by irrigation systems;/2 over the last four years, disbursements by the Bank for the projects in which it has become involved have accounted for between 3% and 15% of the total DGWRD development budget. It is estimated that, if the ongoing projects are completed according to the current schedule of construction, and if appraisal estimates of future yields are reached, then Bank Group-assisted projects are likely to contribute an additional 2 million tons of rice annually to total Indonesian production by 1990. Included in Annex 4 is a summary of the expected contribution from each project. The following table compares the increased paddy production anticipated from Bank projects with the total projected production of paddy for Indonesia as a whole, without the impact of Bank projects, assuming that the latter increases at an annual rate of either 2.5%, 3.0% and 3.5%.

L1 In the forthcoming study of supply prospects for food crops in Indonesia, an attempt will be made to make a systematic assessment of the relative importance of the different factors which influence rice production.

/2 Rehabilitation in Bank Group-assisted projects is to "technical" standards. Consequently, some systems are upgraded in the course of rehabilitation. Although rehabilitation undertaken by the DGWRD in other projects is often to semi-technical or simple standards, increasingly higher standards are being adopted. - 15 -

Table 2.5: ESTIMATES OF FUTURE PADDY PRODUCTION WITH AND WITHOUT BANK GROUP-ASSISTED PROJECTS

Percentage contribu- Incremental tion of incremental pro- Indonesia production Indonesia duction from Bank Group- (without Bank Group- from (with Bank Group- assisted projects to assisted project Bank Group- assisted projects total estimated pro- at indicated annual assisted at indicated annual duction at indicated growth rates)/a projects /b growth rates) growth rates Year 2.5% 3.0% 3.5% - 2.5% 3.0% 3.5% 2.5% 3.0% 3.5% ------million ton paddy ------(g) ------

1976Lc 23.3 23.3 23.3 - 23.3 23.3 23.3 - - - 1977/d 23.4 23.4 23.4 - 23.4 23.4 23.4 - - - 1978 24.0 24.1 24.2 0.1 24.1 24.2 24.3 0.4 0.4 0.4 1979 24.6 24.8 25.1 0.3 24.9 25.1 25.4 1.2 1.2 1.2 1980 25.2 25.6 25.9 0.7 25.9 26.3 26.6 2.7 2.7 2.6 1981 25.8 26.3 26.8 1.1 26.9 27.4 27.9 4.1 4.0 3.9 1982 26.5 27.1 27.8 1.6 28.1 28.7 29.4 5.7 5.6 5.4 1983 27.1 27.9 28.8 2.0 29.1 29.9 30.8 6.9 6.7 6.5 1984 27.8 28.8 29.8 2.4 30.2 31.2 32.2 7.9 7.7 7.5 1985/e 28.5 29.6 30.8 2.5 31.0 32.1 33.3 8.1 7.8 7.5

Growth rate 1977 to 1985 2.5% 3.0% 3.5% - 3.7% 4.1% 4.6% - - -

/a The average rate of growth for paddy production has been about 3.5% over the last 8 years although very recently the impact of the brown plant hopper and climate factors have resulted in a substantially reduced rate of growth. While the extent of crop damage in the future is difficult to predict, it is the judgment of agronomists and entomologists that it could be 3-4 years before rice varieties resistant to the emerging genotypes can be bred and multiplied in sufficient quantities as to be available throughout Indonesia. Until this occurs the growth rate of rice production is expected to be below past trends.

/b See Table 5 in Annex 4. Includes all Bank Group-assisted projects up to and including Irrigation XI.

/c Central Bureau of Statistics.

/d Preliminary estimates by Central Bureau of Statistics. The production data for 1977 include incremental production resulting from investment in Bank Group-assisted projects up to and including 1977.

/e The analysis is terminated at 1985 because shortly after this year projects designed to increase rice production, but for which no estimates of incremental production are as yet available, will start to make a contribution to total production. - 16 -

28. The table shows that the incremental production from Bank Group- assisted projects to total production is expected to account for about 8% of estimated total Indonesian paddy production in 1985 if only the ongoing projects are included. Whether the assumed range of growth rates in production for all Indonesia without Bank Group-assisted projects is reasonable or not is obviously open to debate. Similarly the accuracy of the estimated incremental production from Bank Group projects depends heavily on the extent to which assumptions in appraisal reports will be achieved. Some projects may fall further behind schedule, and supporting services in most project areas are not yet as good as assumed in appraisal reports./i

2.29 Bearing in mind the difficulties the contribution of the incremental production from Bank-assisted projects to the growth rate of total paddy production is in the vicinity of an additional 1% p.a. For example, if it is assumed that Indonesia's production of paddy will grow at 3.0% in the future without the increased production from Bank Group-assisted projects, then addition of the incremental production from these projects raises the average annual rate of growth over the years to 1985 to about 4% p.a. In other words, the increased production from Bank Group-assisted projects would, if achieved, return the average growth rate of rice production over the years to 1985 to about the levels attained in Indonesia during the late 1960s and early 1970s. However, there are three important qualifications to this conclusion. First, it is expected that the damage being caused to rice crops by the brown plant hopper will be controlled after three to four years following the wider spread of improved resistant varieties. Second, delays in project construction and inadequate delivery of supporting services on Bank Group-assisted projects should be minimal and finally, it should be emphasized that with the maturation of current Bank Group-assisted projects the rice production growth rate is unlikely to be sustained at a rate between 3.5% and 4% p.a. beyond 1985 unless investment in irrigation development is continued at a rate which is at least comparable to the rate of recent years. The next chapter of the report will address this issue.

/1 For example, the Project Completion Report for the first irrigation project in Indonesia (Credit IND-127) notes that in 1976 when planned construction was almost completed, only 52% of the project area was covered by BIMAS/INMAS programs. - 17 -

3. FUTURE IRRIGATION DEVELOPMENT

Government Oblectives in Water Resource Development

3.01 The Government's planning of future irrigation development needs to be considered in the context of its overall plans for water resources development for all purposes. In particular the demand for water from domestic and industrial users needs to be weighed against the demands from agriculture. The competing demands for available water supplies is an increasingly important issue on Java. While details of the Government's investment plans for Repelita III had, at the time of writing, not yet been announced, the broad policy objectives are clear. Economic growth, increased food production, balanced regional development, improved employment opportunities and redistri- bution of incomes remain important goals of the GOI. Irrigation investment in its various forms can be expected to continue to contribute to the achievement of these objectives. The DGWRD will continue to carry a heavy responsibility for irrigation development to increase food grain production and reclamation of tidal lands to assist in the transmigration program. Its activities will also need to be coordinated with those responsible for dry-land development in areas which may in the future become irrigation areas. It will need to take account of the need to provide water supplies for industrial development and hydroelectric power generation, as well as the requirement for drinking water supplies to the rural and urban population.

3.02 Irrigation development should therefore be seen as but one of the many priorities of both the Government and the DGWRD. Nevertheless the proportion of the local currency (Rupiah) development budget allocated to irrigation was about 9.5% of the total in 1977/78 and is planned to be almost 12% in 1978/79. When routine expenditures and foreign aid are added, irrigation has accounted for about 5% of the total GOI budget in recent years. The development budget for irrigation has increased at an average rate of about 40% p.a. since 1974/75 (probably equivalent to a real annual growth rate of between 15% and 25%). This part of the report will show that if Indonesia is to achieve a growth rate in rice production which is comparable to the expected growth rate in demand, then the annual allocation of development budget funds to irrigation by the end of Repelita III will need to be about 20% greater (in real terms) than in recent years, even given the possibility of producing rice under dryland conditions.

Future Potential for Irrigation Development

3.03 Table 3.1 below provides a summary of the areas identified by the DGWRD as having potential for irrigation development; further details are presented in Annex 9. It is envisaged that, of the total of 5.6 million ha, about 5.1 million ha (almost 95%) will involve the construction of new irrigation or swamp development projects, most of which would be on the islands outside Java. The following is a brief summary of the total scope of potential future irrigation development as estimated by the DGWRD: - 18 -

Table 3.1: SUMMARY OF AREAS IDENTIFIED FOR POSSIBLE FUTURE IRRIGATION DEVELOPMENT

Gravity irrigation New Swamp and Province development /a Rehabilitation tidal Groundwater Total ------million ha …

Java /a 0.16 0.07 - 0.05 0.28 Sumatera 2.53 0.08 0.65 - 3.26 Kalimantan 0.68 0.02 0.62 - 1.33 Sulawesi 0.36 0.04 - - 0.40 Nusa Tenggara 0.08 0.01 - - 0.09 Maluku 0.16 - - - 0.16 Irian Jaya 0.03 .07 - - 0.11

Total /b 4.02 0.30 1.28 0.05 5.65

Source: Directorate General of Water Resources.

/a It is not known how much of this area is already used for dry land agriculture.

/b Includes Madura and Bali.

/c Some totals appear to be incorrect because of rounding.

(a) Java

3.04 With most of the basic rehabilitation of existing systems on Java having been completed or already under way, the future pattern of development will be concentrated on more intensive system rehabilitation, including the construction of tertiaries, and on increasing cropping intensity in existing irrigation systems through the augmentation of dry-season water supplies. Indeed some 55% of the area included in the DGWRD inventory of future development potential on Java still involves rehabilitation of existing systems. On the other hand, there are also proposals for a number of large- to medium- scale dams designed to increase the water supply to existing systems.

3.05 The total scope for new storage development on Java is relatively small compared with the extent of existing irrigation development. The DGWRD has some 21 storage proposals under review. The total storage capacity of these dams is currently estimated at about 8,300 million cubic meters (see Annex 9, Table 4) which, depending on the type of crop, soil conditions, hydrology and the demands on water stored for other purposes,could probably irrigate about 500,000 ha per year. Inevitably, in a closely settled island like Java a number of these water storage projects will result in the inundation of farmland and necessitate the resettlement of a significant number of people, - 19 -

creating considerable social and administrative problems, and adding substantially to project costs.IL It is therefore likely that in Java both for social, political and economic reasons, the Government will still prefer to concentrate on rehabilitation, upgrading and "fine tuning" of existing irrigation systems. In addition, the prospects for small-scale irrigation systems, based on small storages, to supplement water supplies in particular localities should also be considered. The question of the choice of projects is an important issue facing those who plan future irrigation development and will be examined further in paragraph 3.23.

3.06 Only a few groundwater projects have been identified for development on Java. At present, the DGWRD is surveying the groundwater resources of Java, partly with Bank financial assistance (Loan 1434-IND), and this source may become a major potential water supply in areas where surface supplies have been exhausted or are too costly to develop. However, the extent to which it becomes a practical source of water supply for irrigation systems depends on a number of factors. The hydrology of areas with groundwater resources needs to be investigated to determine the magnitude of the resource, its response to water withdrawal, its quality and its source of replenishment. Because much of the groundwater is at least 100 m below ground level, appropriate equipment will need to be evolved and operating and maintenance systems devised which will suit Indonesian conditions.

(b) Other Islands

3.07 The potential for development includes both construction of new and rehabilitation of existing irrigation systems, and swamp and tidal land reclamation. New conventional systems and rehabilitation of existing ones involve mainly small to medium size projects which are widely dispersed throughout the islands. Many of them would be in the group broadly known as "Sederhana" projects (small projects with simple standards, see para. 2.18). The Government sees these projects as an important part of its program of regional development, food production and income distribution. The mission was impressed by this program and sees merit in expanding it so long as controls on the quality of work done are strengthened. The larger conventional projects planned for the future are found mainly in South Sumatera and Kalimantan; many of these will involve substantial land clearing and land development adding to total costs. On the other hand additional benefits from these projects may be greater than those from rehabilitation projects.

3.08 The other major potential for development in the Other Islands is swamp reclamation. As explained in Annex 2, these are mainly drainage projects in inland fresh water swamps and tidal lands in the coastal areas of Sumatera and Kalimantan. The reclamation already undertaken is based on a variety of engineering design for drainage and water control. It is the Government's intention to devise the most appropriate drainage system and that these areas should become important settlement areas for transmigrants.

/1 In aggregate the area inundated may amount to about 30,000 ha. This is a very tentative estimate based on the farm land area expected to be inundated by those dams in an advanced planning stage. - 20 -

The identified scope for future tidal land development indicated in Table 1 of Annex 9 (0.56 million ha) is less than the potential suggested by the Government in earlier statements (for example it had been suggested that 2.2 million ha could be developed) probably because actual development experience in these areas has exposed a number of difficulties such as the optimum drainage system, cropping rotations, planting times, soil quality, water and soil management and crop varieties. It is possible that, following further research, current technical problems in the more difficult situations can be resolved and that the potential area for development can be increased in the future.

Preparation of Irrigation Projects for Development

3.09 The DGWRD adopts two distinctly different sets of criteria for evaluating a project's feasibility, depending on the source of finance. If the project is to be financed by the Government, then it needs to satisfy a number of criteria which are mainly concerned with the suitability of the area for irrigation, adequacy of water supplies, and the absence of labor, transport, land ownership and flooding problems. (A detailed list of these criteria is given in Appendix A of Annex 9). On the other hand, if the project is to be financed by an international lending institution or bilateral lenders, then a comprehensive engineering and economic feasibility study is invariably required. While a few of the potential future project areas (Table 3.1) have been considered in terms of the criteria needed for local financing, even less have been the subject of formal feasibility studies required for foreign assistance. Some potential projects in Indonesia are now being subjected to preliminary assessment;]i however, preparation of projects for appraisal, even with the assistance of teams of expatriate consultants (see Annex 3), has been made difficult by inadequate data on basic resources.

3.10 Annex 9 discusses the availability of soils data in Indonesia. Soils information which is sufficiently accurate for planning purposes is not available at present for most of the potential project areas which are mainly outside Java. The mission recommends that, if the development of irrigation systems and tidal lands is to be realized, then soil surveys in target areas should be mounted as a matter of urgency. Most of the areas identified for irrigation development have not been surveyed and it is essential that soils information be obtained and analyzed before project planning starts. The mission considers that there should be some uniformity in the type of information obtained and the type of analysis; it has, therefore, drafted suggested terms of reference for such soil surveys (see Annex 9, Appendix B).

3.11 A similar situation exists for hydrological information, in that few of the potential project areas have adequate climatic and stream flow data. There is an urgent need to extend the network of climate and stream flow measurement points and to make provision for a sound system of data

/1 A team of United Kingdom advisors under a bilateral assistance program are at present undertaking preliminary analyses of the many potential projects with a view to ranking them in order of economic merit. - 21 -

compilation and analysis. The DGWRD is moving to correct this situation and a component of Irrigation XI provides for financing the expansion of the existing hydrological data collection program.

3.12 Many of the potential irrigation and water resource developments are in remote areas where various forms of infrastructure such as roads, marketing facilities and distribution centers for farm inputs do not exist. The establishment of these facilities will need to be accounted for in project costs. It goes without saying that the nature of future irrigation development will intensify the demand on financial resources and lengthening the development period.

Economics of New Irrigation Development

3.13 A systematic analysis of the most appropriate future irrigation development program would need to consider the most economic mix and sequence of projects, their time of construction and their contribution to national incomes. The mission did not have available to it the expected costs and benefits of all potential projects, and was therefore not in a position to undertake this analytical approach, but did make an assessment of the economics of three of the most important types of potential projects. Annex 10 contains economic analyses of two major types of gravity irrigation development (a medium-sized run-of-the-river project on Sumatera and a large storage-based project on Java), and a tidal reclamation development on Sumatera./l The purpose of the analysis is to assess the economics of these three types of p-rojects since they figure prominently in the inventory of potential future projects. A satisfactory analysis was made difficult, however, due to the lack of benefit and particularly cost data for these types of projects. Of course, it is not surprising that many of these pioneering types of projects could not be costed since, as mentioned earlier, basic resource data is not available and feasibility studies have not even been started for most of them. It was therefore decided to make the object of the analysis an estimate of the maximum development cost which would, with a stream of benefits estimated bIy the mission, yield an economic rate of return of at least 15%./2

(a) Run-of-the-River Development in Sumatera

3.14 It is possible that in the future some 50% of new irrigation development outside Java will involve projects in the size range 2,000 to

/1 While "Sederhana" or simple irrigation projects are also likely to be important in the future, the characteristics of these types of projects are so variable that typical models are impossible to construct. The economic analysis, therefore, excludes any consideration of this type of project. The exclusion of these projects from the analysis in no way implies that they are less economic than larger projects.

/2 This is an arbitrary benchmark and does not imply anything about the economic cost of capital in Indonesia. It does, however, serve as a rough guide to the economic justification of a project. - 22 -

10,000 ha (See Table 2, Annex 9). Economic analysis of a hypothetical project designed to simulate a typical irrigation scheme in the province of Jambi (Sumatera) indicates that if the best estimates for all assumptions made in the analysis are realized, then unless total development costs (in mid-1978 prices) are kept equal to or less than a figure of $3,900 per ha of service area, the project will not achieve the chosen target economic rate of return at 15%. As is to be expected, the development cost which would still allow an economic rate of return of 15% is sensitive to delays in the accrual of benefits and variations in those benefits. The results of the analysis for this and other hypothetical projects are given in the following table. More complete details of the analysis are presented in Annex 10.

Table 3.2: IMPUTED COSTS OF DEVELOPMENT FOR THREE MODELS OF IRRIGATION DEVELOPMENT

Imputed Cost of Development /a Conventional Tidal Large storage- irrigation reclamation based irrigation Item (Sumatera) (Sumatera) (Java) ------($ per ha) ------

Best estimate 3,900 2,500 3,700 Full benefits delayed 3 years 3,300 1,600 2,300 25% reduction in rice price 2,400 1,400 2,500

/a Estimated total financial costs per ha which should not be exceeded if the project is to achieve an economic rate of return of 15%. These imputed costs would include costs of construction, physical contingencies, costs associated with placing settlers on the project and providing basic essential infrastructure. All figures are in mid-1978 prices and were calculated from the economic analysis using a shadow exchange rate of $1=Rp. $520. (See Annex 10)

3.15 While the type of economic analysis in Annex 10 was done because no reliable estimates of development costs were available for the simulated development, an attempt was made to determine an indicative cost of development against which to compare the results of the economic analysis. The estimate for the conventional project in Jambi (Table 10 of Annex 10) shows that when transmigration costs are included, total development costs are close to $4,200 per ha. Without the cost of transmigration it would be about $2,500 per ha. The tentative conclusion for a 10,000 ha conventional irrigation project of the type simulated here is that if transmigration costs are involved then there is some doubt that the project could achieve a 15% economic rate of return; if no transmigration costs are involved then the rate of return is likely to be above 15%. The results will, of course, vary according to the specification of the project. For example in most projects, an increase in the service area which results in a decline in the average - 23 -

cropping intensity will reduce the economic rate of return. On the other hand, the extent to which transmigration costs are charged to the project will have a critical effect on the economic rate of return.

(b) Tidal Land Reclamation in Sumatera

3.16 For the purposes of this analysis it was assumed that tidal land development would proceed through the progressive reclamation of blocks of 10,000 ha, even though many developments of this size may well end up being contiguous. The analysis, results of which are summarized in Table 3.2 above, shows that the mission's best estimate of the stream of benefits suggests that if total development costs do not exceed $2,500 per ha then the simulated tidal reclamation project would show an economic rate of return of 15%. A delay of three years in achieving the benefits would lower the development cost which could be permitted to $1,600 per ha before the rate of return would drop to below 15%; a 25% reduction in benefits would reduce the maximum development cost to $1,400 per ha, while a 25% increase in benefits would raise the permissible development cost to $3,100 per ha.

3.17 Investigations into the technical and economic aspects of tidal land reclamation are being undertaken and already some tentative information on development costs is available, from which the mission has estimated that the cost of tidal land development could be in the order of $2,200 per ha when costs of recruiting and establishing transmigrant settlers are included (see Table 11 of Annex 10). In the unlikely event that no transmigration costs are involved then the total costs are estimated at about $1,300 per ha.

3.18 Among the options for future water resource development identified by the DGWRD are a number of large water storages on Java for the purpose of adding to the total available supply of dry-season irrigation water and thereby increasing cropping intensity. The project simulated in Annex 10 assumes some extension of the irrigation area, but mainly the provision of an additional reliable water supply to permit the growing of a dry-season crop on areas which are already irrigated in the wet season. The model assumes an increase in cropping intensity for 100,000 ha from 125% (which includes 20% of the area growing rainfed rice) to 200%. On the basis of the mission's best estimate of the benefit stream, the total development costs for such a project could be as high as $3,700 per ha and still show an economic rate of return of 15%. A three year delay in the realization of full project benefits would reduce the threshold development costs to $2,300. The actual cost of developing one ha in Java will vary considerably depending on land and soil conditions, the extent of the area already serviced, the type of water storage which is built and the cost associated with compensation for the land used, particularly in the catchment and inundated area. Consequently any estimate of costs per ha of large storages would be speculative however, it is likely that most large storages for irrigation purposes on Java would cost in the vicinity of $3,000 to $3,500 per ha of service area. - 24 -

Issues and Options for Future Irrigation Development

3.19 The rehabilitation of irrigation systems was the main objective of the GOI in Repelita I and II. With the realization of this objective there is now an increasing emphasis on the extension of service areas, the increase of cropping intensity and the development of new irrigation systems. One of the main driving forces behind the heavy investment in irrigation development (accounting for some 12% of total Rupiah development budget for 1978/79)1l has been the GOI objective of self sufficiency in food grains, particularly rice. The self-sufficiency target has not yet been achieved and, while ongoing developments are still to reach peak production potential, it is apparent that the Government is faced with a continued need to import rice (see para. 1.01).

3.20 One of the issues which therefore arises is the extent to which further irrigation development can provide a boost to the rate of'growth of food grain production. Four related questions result: First, what contribution to rice production can be derived from the full exploitation of the ongoing and potential future irrigation projects? Second, should the emphasis in the GOI's irrigation development'be concentrated on Java or the Other Islands? Third, what types of projects should the Government choose? Finally, what are the possible budgetary implications of different levels and types of irrigation development for the GOI?

(a) Rice Production and Future Irrigation Development

3.21 Over the last decade the average annual rate of growth of rice production in Indonesia has been about 3.5% (see Table 2.1). After 1970 the trend rate of growth declined to about 3.0%, made up of a growth rate in area of about 0.6% and yield of about 2.4%. Over the last two to three years production fluctuated considerably, in fact total production declined slightly between 1976 and 1977. The damage caused by the brown plant hopper and other pests and diseases, lower fertilizer use, and some movement away from the use of high-yielding varieties appear to be-the main factors contributing to the recently decline in the average annual rate of growth recently. Although it is anticipated that resistant varieties combined with strategic spraying will, in time, overcome the devastating effects of the brown plant hopper and that when this takes place farmers will expand their use of high-yielding varieties, sprays and fertilizers, an important precondition to the wider use of improved varieties and inputs is the availability of irrigation facilities.

3.22 It was concluded earlier (paragraph 2.29) that the trend rate of growth of rice production in Indonesia could be increased by 1% p.a. if the projected production from Bank Group-assisted projects is realized. The issue for the longer term future is the extent to which the higher growth

/1 Agriculture and irrigation together accounted for about 19% of the total Rupiah development budget (DIP) in 1978/79. These two sectors represent about 9% of the total budget (made up of routine expenditures, development budget and foreign aid). - 25 -

rate can be sustained. Using assumptions about incremental production which are similar to those used in recent Bank appraisals, estimates can be made of the additional impact of the potential future irrigation projects. It is estimated that the development of all the areas indicated in Table 3.1 would result, at full development, in an annual incremental production of 18.7 million tons of paddy (see Table 3.3 and Annex 9). The time required before this production level can be achieved will to a large extent be influenced by the composition and magnitude of the annual irrigation development program./1

(b) Java versus the Other Islands

3.23 At present Java accounts for about 60% of all irrigated area and about 60% of all rice production. On the other hand, Java has about 66% of the total population and is a net importer of rice. A question raised by these observations is whether production of rice on Java can be increased by further intensification of irrigation development. Table 3.3 shows that out of an estimated incremental paddy production resulting from rehabilitation and development of all potential projects (18.7 million tons) only about 0.9 million tons (5%) are expected to come from projects on Java. In addition to these production increases there is the possibility that the "simple" village irrigation systems could be upgraded to technical or semi-technical standards and consequently raise the productivity of these systems. There are probably some 500,000 ha of village systems which could be upgraded (see Annex 2, Table 2). On the islands outside Java there are also probably at least 500,000 ha of village systems which could be upgraded. Assuming an incremental yield resulting from the upgrading work of one ton paddy per ha, then the total additional production which can be expected from rehabilitation, new development and upgrading of irrigation systems on Java is about 1.4 million tons of paddy, about 7% of the potential for all of Indonesia. This is naturally only a very approximte estimate and probably does not fully take into account the scope for production increases from further intensification of production leading to both the expansion of area harvested and increases in yield.

/1 The issues surrounding the prospects for the expansion of the production of all food crops on both irrigated and dry land areas in Indonesia are to be taken up in more detail in a separate sector study (Supply Prospects for Major Food Crops). That study will also devote more time than has been possible here to the factors which have influenced the growth in food crop output. Its conclusions should provide further guidance on the optimum size and content of the future irrigation program. Since a large proportion of the total labor force in Indonesia is employed in irrigated agriculture, the projected increases in rice production are also relevant to employment prospects. A study on employment is currently being prepared in the Bank. - 26 -

Table 3.3: ESTIMATED INCREMENTAL PADDY RICE PRODUCTION FROM POTENTIAL IRRIGATION DEVELOPMENT /a

Type of irrigation Other development Java Islands Indonesia ------million ton paddy ------

Gravity New development 0.65 15.45 16.10 Rehabilitation 0.14 0.46 0.60 Subtotal 0.79 15.91 16.70

Swamp and tidal development - 1.92 1.92 Groundwater 0.07 - 0.07 Subtotal 0.86 17.83 18.69 Upgrading /b 0.50 0.50 1.00 Total 1.36 18.33 19.69

/a See Table 3 in Annex 9 for assumptions used in arriving at these estimates. Some columns and rows do not add because of rounding. Although no allowances are made for losses after harvesting due to poor storage, pests and diseases in estimating the totals in Annex 9, the incremental availability is not likely to be significantly affected. It should be emphasized that the estimates in this table do not include the production expected to result from projects currently in the design or construction phase.

/b Upgrading of simple village systems to semi-technical or technical standards (see para. 3.23).

3.24 It is apparent that Indonesia will increasingly need to rely on the islands outside Java to provide the base for major increases in rice production. The question facing the GOI, however, is the extent to which development activity in the short term should be allocated between Java and the Other Islands. A definitive response to this question will depend on a number of factors including the Government's regional development objectives, transmigration planning, project preparation, infrastructure development and the expected economic and social benefits from the projects in different locations. The mission was not in a position to undertake the analysis and form the judgements required to reach conclusions on these issues. However, it is the mission's view that a balanced program of irrigation development in both Java and the Other Islands will be feasible in the longer term, but it is likely that in the short term greater emphasis may need to be given to projects on Java because it is there that many projects have already been prepared and consequently can be rapidly implemented. In addition, it is the - 27 -

mission's judgment that further intensification, and "fine tuning" and upgrading of irrigation systems and improved tertiary development on Java will contribute rapidly to increasing food crop production. Furthermore the staff within the DGWRD have acquired considerable skill in this kind of development; and finally, basic infrastructure and services are either available or can be improved relatively simply./l Nevertheless, there is an urgent need for project planning and preparation in the islands outside Java to proceed rapidly in order that the costs and benefits of the potential projects can be ascertained (See comments made earlier in paragraphs 3.09 to 3.12).

3.25 The GOI's choice of the type of irrigation development program will depend not only on decision with respect to the regional priorities for investment as discussed above, but will also be influenced by factors such as the overall contribution to national income of different combinations of projects in a total program and the available budget. While there are many issues to be considered before a choice is made, the economic returns from potential projects will figure prominently in any consideration of the most appropriate program./2

3.26 The results of Bank appraisals of irrigation projects in Indonesia suggest that, from the point of view of the return on investment, rehabilitation projects show a higher economic rate of return than new developments. Rehabilitation projects take advantage of sunk investment while usually realizing substantial incremental benefits from restoration work on existing structures and distribution systems. Moreover, rehabilitation work requires less engineering investigations than new developments and therefore is less demanding in terms of staff resources, and by virtue of the fact that the irrigation systems are already in operation many investigations such as soil surveys can often be omitted from the preparatory work. Finally, rehabilitation projects can usually proceed faster and result in more rapid increases in production than most new developments. It is for these reasons that the GOI has concentrated on rehabilitation in Repelita I and II and it is the mission's view that the Government should continue to upgrade the rehabilitated systems through improvement and construction of tertiary distribution systems.

3.27 The economics of different types of new developments such as conventional run-of-the-river projects, tidal land reclamation and large storage-based developments will depend on the circumstances of the particular project. On the basis of the analyses discussed in earlier paragraphs of this chapter, all three types of development are likely to show a satisfactory economic rate of return. Tentative cost estimates for tidal land development are significantly less than the cost at which such a

/1 See Annex 4 for a discussion of differing viewpoints on the justification of tertiary canal development.

/2 The need for the DGWRD to conduct a continuing analysis of the optimum irrigation development program will be discussed in more detail in Chapter 4. Increasing pressures on the total budget make such an analysis an urgent matter. - 28 -

development is expected to show an economic rate of return of 15%, and it is therefore tempting to conclude that from an economic point of view tidal land development is the preferred investment strategy. While this may turn out to be correct, there are at present a sufficient number of problems and unresolved questions associated with tidal land development to make any estimate of the costs and benefits speculative at this stage. However, development options are not only a function of costs and returns, they must also take account of the natural resources available, budget limitations and the wider development and social objectives. In some circumstances only conventional irrigation systems will be feasible and may well show higher rates of return than tidal land development. Nevertheless the possibiilty of a sound rate of return for tidal land development may be attractive to the Government because these areas offer substantially greater scope for the settlement of transmigrants compared with other potential projects. Also, questions of title to land in the service area usually present fewer problems than elsewhere.

(d) Budgetary Implications of Irrigation Development

3.28 The implications of future irrigation development on the Govern- ment's budget will depend on the types of projects chosen and the rate at which future irrigation development is planned to proceed. Estimates of the total capital cost of all identified future potential irrigation and water resource developments could be of the order of $14,400 million (see Table 3.4).

3.29 The rate at which the future potential irrigation development can be achieved is a matter of judgment, but depends mainly on the implementation capacity of the DGWRD and the size of the budget. Chapter 4 of this report will discuss the organization and management of DGWRD. The main conclusion of that discussion is that the increasing scope, diversity and wider regional distribution of the future were of the DGWRD call for a substantial reorganization of its administrative structure. The mission considers that if the reorganization outlined in Chapter 4 is achieved that the DGWRD should be able to manage the new development of 100,000 ha p.a. of gravity irrigation systems and 50,000 ha p.a. of swamp and tidal land development. Such a rate of annual achievement would result in all identified projects being completed in about 30 years. The cost of this development would, in 1978 prices, be about $375 million. If this scale of new development were achieved annually it would, depending on the rate of growth of rice production without these projects, be expected to sustain the rate of growth of rice production in Indonesia at between 1.4% and 4.2% p.a., at,least until the year 2000. Table 3.5 presents the results of these calculations together with estimates of the implications for the budget and rice production if the annual development activity fell below and increased above the expectations of the mission, assuming a restructured DGWRD. (Details of the basis for these estimates are discussed in Annex 9). - 29 -

Table 3.4: ESTIMATED COST OF POTENTIAL FUTURE IRRIGATION DEVELOPMENT

Types of irrigation Average unit Estimated total development /a Area capital cost /b capital cost /b (million ha) ($/ha) ($ million)

Gravity - New development /c 4.02 3,000 12,060 - Rehabilitation 0.30 1,500 450

Swamp and tidal development 1.28 1,500 1,920

Total 5.65 14,430

/a Groundwater development is not included in this table since information on costs is very uncertain.

/b Mid-1978 prices, excluding costs associated with the transport and settlement of transmigrants. These costs also do not include overhead costs, but include an allowance for land clearing and levelling where applicable (see Annex 10, Tables 10, 11 and 12).

/c Some would include storages. These would be of varying sizes, the average unit capital cost assumed would allow for some storages. - 30 -

Table 3.5: ESTIMATED IMPLICATIONS OF SUGGESTED FUTURE IRRIGATION DEVELOPMENT PROGRAM

Mission's Mission's Mission's low suggested high Item Unit expectations expectations /a expectations

Projected new development - Gravity ha/yr 80,000 100,000 120,000 - Swamp and tidal ha/yr 40,000 50,000 60,000

Total ha/yr 120,000 150,000 180,000

Cost of development /b $ m 300 375 576

Additional paddy production ton/yr 380,000 475,000 570,000

Average annual production growth rate for Indonesia (1978-2000) - asuming zero growth rate without projects % 1.4 1.7 2.0 - assuming 3% growth rate without new projects % 3.8 4.0 4.2

/a This suggested expectation assumes a major reorganization, training and staff development program for the DGWRD.

/b These are only the costs (1978 prices) of the new development indicated in the table. There would be additional annual costs associated with river and flood control and overheads. For details see Annex 9.

3.30 The Government's options for irrigation development are more varied than are presented in the preceeding discussion, however, the results of the analysis raise a number of significant issues for the GOI. For example, it is expected that the future annual rate of growth of demand for rice will be about 4%; if this is to be met then it is reasonably certain that, given the comparatively small importance of dry land rice production and its slow rate of growth, the irrigation development required to meet the growth rate in demand would need to be about equal to the mission's suggested expectations as summarized in Table 3.5. The annual budget required for that scale of activity, together with river and flood control ($135 million) and overheads ($125 million),/1 is likely to be about $635 million p.a. in 1978 prices. Such an annual budget would require an increase of about 20% over the estimated

/1 Assuming that the amount required annually for river rehabilitation and flood control is about the same as the current budget allocation. Over- heads are assumed to be 25% of total costs (see Table 2.4 and Annex 11). - 31 - current (1978/79) budget of the DGWRD (see Table 2.4). The mission suggests that if the GOI wishes to sustain a growth rate of rice output at about 4% per year, then a phased increase in the total development budget allocation for irrigation should be given serious consideration.

3.31 Two important issues arise from such a substantial increase in irrigation development. The first is whether the enlarged program will be supported by a comparable increase in supporting services (extension, credit, marketing facilities) to farmers. In addition, it will also be necessary to provide infrastructure such as communications, roads and community facilities in newly developed areas. The mission did not make an estimate of the funds and staff required to provide the investment and services necessary to complement the irrigation development; this can only be done when projects have been designed. The types of infrastructure will need to be assessed as will the time at which they need to be available. Both of these matters will require concerted coordination between the various institutions responsible. A further increase in the funds required for the expansion of irrigation raises the whole question of the allocation of development funds to agriculture and irrigation (the share at present is about 19%). In passing the mission would also wish to stress that any increase in the support for irrigated production should not be at the expense of support for dry land production. These choices and demands on resources are matters which must be addressed by the GOI in the context of an analysis of investment priorities for Indonesia as a whole. The second important issue is one of the capacity of the DGWRD to undertake an expanded program; this will be addressed in Chapter 4.

Proposed Irrigation Development under the Third Five-Year Plan (Repelita III)

3.32 At the time this report was prepared, irrigation development plans for Repelita III were not available. However, it is clear that irrigation development has the strong support of the GOI and that the magnitude of the future program of planning, design and construction activity will be mainly a function of the capacity of the DGWRD to undertake a program. In the absence of official Repelita III proposals, the mission has made estimates of likely Central Government development expenditures suggested by the analysis of future investment activity (paras. 3.28-3.30). The suggested program is given in detail in Annex 11 and reflects the mission's judgment regarding the likely order of mag'nitude of a program which the DGWRD could accomplish with the type of reorganization suggested in Chapter 4. It abstracts from the budget constraints on irrigation development and is only suggested as a basis for discussion.

3.33 In summary, the mission estimated that, in addition to projects carried over from Repelita II,/2 the DGWRD should be in a position to nearly

LI Perhaps it should be emphasized here that a 4% growth rate in production in the face of a projected 4% growth rate in consumption will not close the gap between domestic supply and demand.

/2 It is difficult to estimate what this would be, but it may involve about 500,000 ha. - 32 -

complete about 95,000 ha of gravity irrigation systems and bring a further 190,000 ha to an advanced stage during the five-year plan period. In addition, it should be possible to almost complete the development of an additional 50,000 ha of swamp and tidal lands and bring a further 100,000 ha to an advanced stage. Finally, river rehabilitation and flood control as well as further rehabilitation, "fine tuning" and upgrading of existing irrigation systems should be continued. When the estimated costs of all these activities are added to those of the ongoing activities carried over from Repelita II, the annual budget (including overheads) is likely to be about $500 million in the first year and about $635 million in the fifth (all in terms of 1978 prices). This compares with a likely total expenditure by the DGWRD during 1978/79 of about $520 million.

Projected Bank Group Involvement in Irrigation Development

3.34 Annex 12 provides a tentative list of the projects for which the DGWRD has requested the Bank's financial assistance. The list contains a mixture of large- and medium-size projects, new gravity developments, rehabilitation and tidal reclamation. A striking feature of the program is that most projects are located on Java. To the extent that most of the projects identified in Annex 12 represent a continuation of projects already launched with Bank Group assistance on Java this is not surprising. However, since the Government has identified regional development outside of Java and transmigration as major policy objectives, it is not immediately apparent why more projects could not be proposed for Bank assistance outside Java. While the addition of such projects to the list would increase the cost of the total program, the mission recommends that it is an appropriate time to seriously consider an increasing commitment of Bank Group funds for future irrigation development in order to assist the GOI to increase the rate of growth of food grain production and promote regional development.

3.35 The second matter which stands out from the "pipeline" of Bank Group-assisted projects is the absence of simple irrigation projects in the suggested program. Perhaps other agencies or institutions are already planning to give assistance here./1 However, in the light of the Government's emphasis on the widespread development of simple irrigation systems, the mission recommends that the Bank discuss with the GOI the manner in which it can assist with these projects.

/1 USAID is considering extending its lending for "Sederhana" projects (see Annex 2). - 33 -

4. ORGANIZATION AND MANAGEMENT OF DGWRD

4.01 The Directorate General of Water Resources Development (DGWRD) has earned the reputation in recent years for being one of the most active and progressive government institutions in Indonesia. It was established in its present form in 1966 and has been at the center of irrigation development; it is also the institution responsible for executing Bank Group-assisted irrigation projects.

4.02 There is no question that the progress which has been made in irrigation development in the last five to ten years has been due to the success of the DGWRD and the energy and skill of its senior staff. However, the mission perceived that the DGWRD is facing some problems which need to be resolved at the earliest opportunity. The mission concluded that the DGWRD was already overloaded in terms of its capacity to undertake additional, and in particular, a wider variety of irrigation and water resource development projects in widely dispersed regions of Indonesia. This conclusion was supported by senior government officers both inside and outside DGWRD. In addition, delays in implementation resulting in substantial shortfall between development targets and achievements (see Chapter 2) provide further evidence that the administrative and executing capacity of the DGWRD is currently overstretched. To the extent that these shortfalls became a recurrent event it must also be assumed that forward planning was inadequate. It is the mission's view that a change in the structure and staffing of the DGWRD would achieve important improvements in its management and implementation capacity and also provide scope for expanding and varying its activities. The mission also concluded that apart from a change in the structure of the organization there was a need to give much greater attention to planning and programming activities, staff training and project monitoring. These matters will now be discussed in more detail.

Structure of the DGWRD

4.03 The DGWRD is one of the larger Directorates General within the Ministry of Public Works (MPW). It is responsible for the rehabilitation and construction of those irrigation systems financed by the central government. In undertaking this task it will frequently use the facilities and services of the Provincial Public Works offices or retain outside contractors. The DGWRD is organized along functional lines. The main functions are executed by six directorates and a number of executive bodies (see Figure 4.2). The directorates of Irrigation, Rivers and Swamps which have the main operational responsibilities, are themselves organized internally on similar functional lines (see Figures 4.5, 4.6 and 4.7). The assistant Director General is responsible for a range of administrative activities (see Figure 4.3), while the directorates of Planning and Programming, Logistics and Hydraulic Engineer- ing are responsible for support activities of various kinds (see Figures 4.4, 4.8 and 4.9). In addition to the six directorates, four special executive bodies have been established to cope with specific tasks which cannot be accom- modated within the normal operational activities of the existing directorates. Increasingly, a situation is arising in which it has become necessary to establish - 34 -

special executive bodies to cope with the increasing work load of the DGWRD. The establishment of these bodies is convenient since no change in the basic structure of the organization is required and they can therefore be created by authority of the Minister. Any change in the basic structure of Government institutions requires presidential approval.

4.04 The executive bodies have a number of features in common but are also different in some respects. They all have separate administrations and keep separate accounts, they may have working conditions for employees which are different from other employees in the DGWRD and are formally directly responsible to the Director General. The main difference between the executive bodies is that for some (for example PROSIDA) the General Manager is not a working staff member of one of the six Directorates. Others (of which P4S is an example) have General Managers who are at the same time directors of Directorates. In the case of P4S the General Manager is also the Director of the Directorate of Swamps and as a result there is scope for the activities of the executive body to be integrated with those of the Directorate. While the creation of executive bodies has advantages (for example they can be rapidly established, are simple mechanisms for increasing the implementation capacity of the DGWRD and are easily identified by those inside and outside the Government by virtue of their specific responsibilities) it also presents some problems which will now be discussed.

4.05 One of the executive bodies, PROSIDA, was established to execute Bank Group-assisted projects (see Annex 4). PROSIDA has matured into a competent organization, but the benefits arising from its establishment and ultimate success have not been achieved without some cost. For example, all executive bodies are formally responsible directly to the Director-General, consequently the person in that position now has direct line administrative responsiblity for six directorates and a number of executive bodies. The mission considers that ultimately this structure of responsibility will be too heavy a load for one person to carry, but more importantly, it does not allow the Director General to give enough attention to the broader policy issues associated with irrigation development./l A second concern with the establishment of special executive bodies is that they tend to become separated from the main stream of activities and are further separated from the rest of the Directorate General by virtue of their different and invariably better salaries and working conditions. Of course the nature of their work, including the need to achieve higher standards than other parts of the DGWRD, continuing contact with international and bilateral institutions and the need to conduct business according to different procedures and in a foreign language, are all valid reasons why the terms of employment in executive bodies can logically be better than for the rest of the DGWRD.

/1 To the extent that the General Managers of executive bodies are also the Directors of Directorates this issue is not relevant; nevertheless the increasing number of executive bodies means that the load will at some stage be passed on to the Director General. - 35 -

However, the other staff in the DGWRD are increasingly being asked to achieve the same standards and become more involved with similar work. Many are also executing large projects, partly financed from outside sources, and hence the need to have special executive project bodies will probably become less obvious. The only persuasive argument which remains for the retention of these bodies is that they can be easily established to cope with an expanded workload. These issues have not gone unnoticed at the staff or managerial level in the DGWRD and the mission detected some general concern regarding the long-term impact of a continued separation between special executive bodies such as PROSIDA and the remainder of the DGWRD.

4.06 At this point another institution involved in irrigation development, namely the Jatiluhur Authority, should be mentioned (Figure 2.1). This Authority was established by the Government in 1970 as a semi-autonomous organization with the responsibility of managing the multipurpose development of the Jatiluhur region based on the Jatiluhur reservoir. It is governed by the Minister of Economy, Finance and Industry (MEFI) and its operations are managed by a Board of Directors. The MEFI, in guiding the Authority and setting its policies for Jatiluhur development, is assisted by a Ministerial Council made up of the Ministers of Public Works, Mining and Energy, Home Affairs, Finance and Agriculture. It is through this mechanism that the DGWRD has a very close involvement with the activities of the Jatiluhur Authority which has some 260,000 ha of irrigated land under its control.

4.07 The DGWRD has an immense program of activities spread over a large number of islands which stretch for about 3,000 miles. Although it has a substantial staff of its own, it relies heavily on assistance from consultants. The total professional engineering staff of the DGWRD is about 1,170 at present (see Annex 8, Table 5), but many are inexperienced and hence the management has found it convenient to employ consultants for various purposes. Many of these consultants are involved in activities which in the long run should be undertaken by DGWRD staff. The mission was not competent to judge to what extent there should be a dependence on outside expertise, (no detailed data was available to the mission on the growth in dependence on consultants in relation to the growth and increase in complexity of the DGWRD's work) but it did view with concern the fact that much of the planning of future work involves the continued use of consultants (see for example, the allocations for consultants in Irrigation X and XI). A reduced dependence on consultants would mean increasing the total DGWRD staff and devoting more resources to staff training and development. However such a move should, in the missions's view, be made in the context of a reorganization of the structure of the DGWRD.

4.08 The present functional basis for the organization of the DGWRD, while probably appropriate when most irrigation activities were concentrated on Java, is less efficient when considered in the light of the future wider range of activities in the Other Islands. The mission is aware of the fact that the functional basis of organization in the context of centralized structure of administrative responsibility is very much a traditional organizational framework in Indonesia. However, from various discussions the mission concluded that the management and coordination of DGWRD activities at the regional level was becoming increasingly difficult and, if not improved, was likely to lead to a breakdown in the efficiency of the - 36 - organization. ln addition, it is a large country where distances are great. Communications, while improving, are not yet well developed and it is inefficient to have directors and their staff from headquarters visiting the same areas, each to supervise his own particular sphere of work and needing to establish his own relationship with Public Works officers in each province. Finally, the expanding scope and complexity of irrigation development make it essential that there be maximum coordination between the various forms of development to ensure that the regional exploitation of water resources is coordinated. The mission has therefore concluded that the current, and particularly the future, responsibilities of the DGWRD would be more efficiently achieved if there could be a reorganization of the institution on the basis of a regional division of responsibilities and duties.

Suggested Reorganization of DGWRD

(a) Revised Structure

4.09 A revised structure for the DGWRD recommended by the mission is discussed in Annex 7 and outlined in Figure 4.12. The suggested structural rearrangement involves dividing the operational activites of the DGWRD into four regions of responsibility. Each region would have a directorate of works which would be responsible for all water resource development within that region. The revised structure envisages that each of these directorates would be established along the lines of PROSIDA as it is at present (see Figure 4.10). In addition to the directorates for each of the four regions there would be a directorate of planning, programming and design (see Figure 4.13) and a directorate of technical services. The Director General would be aided by an Assistant Director General who, apart from helping him with the general management of the DGWRD would also be responsible for a number of administrative matters. The suggested reorganization assumes that the head office for each directorate would remain in Jakarta, within the central government structure. However, there would be a significant reorganization of responsibilities within the central office of the DGWRD./1

4.10 The mission suggested to the Director General of the DGWRD that his work would be further assisted if he could have at his disposal two Deputy Director Generals, one responsible for project implementation, whilst the other would be responsible for planning and programming, technical services including hydrology, hydraulic research, design criteria and construction standards, logistics, operation and maintenance and training. However, discussions of the draft proposals with the Director General indicated that there may be substantial problems in the establishment of Deputy Director Generals in the organization because of existing government rules and procedures relating to the structure of government institutions. The mission's conclusions were therefore modified to a certain extent. The suggestions made in this report were discussed with the Director General who had some reservations regarding the regional allocation of responsibilities on the basis that expertise in

/1 The broad thrust of these recommendations will need to be considered in relation to the Government's regional development planning. A Bank report which is relevant to this issue is Report No. 502-IND, "A Framework for Regional Planning in Indonesia," August 1974. - 37 - one field of work should be kept within the same organizational unit. He expressed a preference for modified approach, namely splitting the large Directorate of Irrigation, perhaps on a regional basis, and absorbing PROSIDA in such a change.

(b) Planning, ProgramminR, and Design

4.11 The Directorate of Programming and Planning would be reorganized to become the institution's overall planning body; it would coordinate all surveys and investigations, planning and programming, design and procurement. In addition, it would be responsible for coordinating the planning of operation and maintenance activities of the proposed directorates of works. In general the mission concluded that the management of the DGWRD would be made more effective if more resources were devoted to planning. In particular the DGWRD should aim in the long run to be in a position to undertake most identification and feasibility studies and evolve an optimum development program with less involvement of outside consultants. While the DGWRD is already giving much more attention to planning and programming than it has in previous years, the mission's concern was that these functions were being diluted by other activities; for example, the administration of the development budget, and responsibility for groundwater development (see Figure 4.4).

4.12 The wider scope and greater complexity of future irrigation development calls for a much more intensive planning and programming effort than in the past when most of the DGWRD's activities were concerned with rehabilitation of existing systems. In the mission's view more staff resources should be devoted to evolving longer term irrigation development plans for Indonesia. This planning should be on a regional basis and should be integrated with the ongoing river basin studies. This planning role should logically be carried out by DGWRD staff; they will need to have analytical competence and sufficient experience to weigh the relative importance of various policy objectives and regional priorities. While the mission accepts the view that consultants can and should help in the planning process, it considers that a much greater involvement by DGWRD staff is of crucial importance in order that the outcome of planning studies can, where appropriate, be expeditiously incorporated in the overall programming of future development activity.

4.13 In addition to the activities mentioned in the previous paragraph, the mission considers that the DGWRD should become more directly involved in the preparation of basic data. In particular, coordinating the collection of economic, soils and hydrological data for project preparation purposes need to become part of the responsibility of the planning and programming directorate (see Annexes 7 and 9). A suggested structure for the directorate of Planning, Programming and Design is shown in Figure 4.13.

4.14 The major role for each suggested regional directorate of works would be project implementation. Each directorate would have within it a - 38 -

number of subdirectorates which would be responsible for project implementation in the main functional areas appropriate to the region. For example there would probably be separate subdirectorates responsible for gravity irrigation, tidal and swamp development and groundwater development. As can be seen from Figure 4.14 it is suggested that each of the directorates of works would also have subdirectorates responsible for technical support, logistics and operations and maintenance as well as a subdirectorate under a chief of staff responsible for technical, financial and general administration.

(d) Technical Services

4.15 The suggested Directorate of Technical Services would be basically responsible for the same activities as the present Directorate of Hydraulic Engineering. It would be engaged in basic research and investigations and would act as an advisory body to the operational directorates on technical issues. This directorate should, in the view of the mission, have its headquarters in Bandung as at present. In addition to its current responsibilities it would also become responsible for establishing guidelines for standards to be achieved in irrigation works and for training.

Training

4.16 The responsibility for training in the DGWRD rests with the Personnel and Organization Divison of the Secretariat. In addition, there is the Center for Education and Training (PUSDIKLAT) which arranges and coordinates training activities for all Directorates General in the Ministry of Public Works. The activities of that Division, however, are limited to informal training and "upgrading" since it is not one of the institutions nominated by the GOI to be responsible for formal training and education inside and outside the government.

/1 Presidential decree No. 15, 1974 states that formal training for government employees be the responsibility of the National Institute of Public Administration; training of nongovernment employees would be the responsibility of the Department of Manpower; and general training and education is the responsibility of the Department of Education.

/2 A program financed by the Ministry of Public Works in the Institute of Technology at Bandung. - 39 -

4.17 These informal and formal training activities (discussed in more detail in Annex 8) have no doubt been of benefit to the execution capacity of the DGWRD. However, the mission was left with the impression that much of the current training is not achieving the results expected and that the planning of training programs in recent years has not always been done with a view to the future needgs of the organization. For example, staff are sent overseas to a variety of courses and which have a wide range of content, location and duration. Those who graduate from these courses are often placed in positions where their training cannot be fruitfully used. One of the reasons for this appears to be that unfortunately, selection for overseas training is regarded often as an award for past services rather than as a specific means of upgrading skills for future responsibilities.

4.18 The DGWRD needs to ensure that overseas courses meet its priority needs, and it would be useful to develop closer links with some overseas institutions - such as has already been done with Delft /1 - so that the courses can be tailored to the needs of DGWRD staff. One of the recommendations of the Bank's Irrigation Program Review (1975) - short visits to Malaysia and other neighboring countries by middle level staff - has had limited success partly because lack of forward planning has prevented these visits from being focused on specific practical problems. Further the mission doubts that the training of staff by assigning them as counterparts to consultants has always been productive for either the consultants or the DGWJRD staff.

4.19 Manpower training and staff development is a difficult task, particularly within an institution which has been under a great deal of pressure to undertake and complete projects. Staff have not always been made available for training courses. In addition, adequate financial and staff resources have not always been made available for the training activities. Only recently have the training needs of the DGWRD been systematically surveyed and discussed with senior DGWRD management. As a result of these discussions, training programs are now being formulated and a specific item is allocated to training in the 1978/79 DGWRD budget. These recent steps reflect a realization by senior management of the importance of training; however, the mission is of the view that current initiatives may not go far enough. The mission therefore recommends the following:

(a) The DGWRD should define its responsibilities for training vis-a-vis the training activites undertaken in the Center for Education and Training (PUSDIKLAT) in the Ministry of Public Works and Electric Power.

(b) The DGWRD should review the long-term demand for and supply of trained staff in different specialities.

/1 "Technische Hogeschool te Delft" (Technical Institute in Delft) in the Netherlands. - 40 -

Project Monitoring

4.20 At present the Director-General cannot easily or quickly obtain an up-to-date status report on any one of the many irrigation projects under his control. Status reports are prepared for supervision missions from the Bank and other lenders at regular intervals; in addition a system of annual reporting does exist./L However, no readily accessible record of the progress being made in any chosen project is available to the management of the DGWRD. The suggested reorganization of the DGWRD (discussed in more detail in Annex 7) proposes the establishment of a separate division in the Office of the Assistant Director-General to be responsible for the monitoring of projects.

4.21 A system of regular information supply should be provided by each of the proposed Directorate of Works to the project monitoring division which should have available to it adequate computing facilities for storing and processing the information. A well-organized monitoring system should provide a timely'warning to senior management of difficulties or delays in projects. In the future, when projects are completed it might also be used to monitor the supply and availability of inputs and the production increases in different projects./2 An additional use for the project monitoring activity could be a continued review of operation and maintenance activity in completed projects. The scope of this monitoring activity can be built up gradually as computor facilities and experience is acquired. At no time should it become a managerial burden for the Assistant Director General; in order to ensure this the various Directorates should become responsible for data input.

/L Recently a "Control and Monitoring of Foreign Aid Projects Unit" was established in the Foreign Assistance Administration Division.

/2 Bank Loan No. 1100 (Irrigation VI) included a component to finance the monitoring of benefits from the first six irrigation projects, and further provisions for monitoring subsequent projects were included in the loan agreements for later projects. While that study has not produced any results as yet, it is not suggested that the project monitoring activity in the DGWRD should replace the benefit monitoring study, rather it should complement it. - 41 -

5. SUMMARY OF RECOMMENDATIONS

5.01 The mission's recommendations cover the magnitude of the future irrigation development program, training and staff development of DGWRD personnel and the organization of the DGWRD.

Future Irrigation Development

5.02 The mission recommends that if the GOI intends that the growth rate in the output of rice should keep pace with the expected rate of growth in the demand for rice:

(a) The average annual budget of irrigation development should be increased by about 20% p.a. to about $635 million p.a. (1978 prices). Such a budget should be sufficient to finance the development of about 100,000 ha of gravity irrigation p.a. and about 50,000 ha of swamp and tidal land development p.a., together with river and flood control and overheads. A program of this magnitude should achieve a growth rate of rice output of about 4% p.a., ensuring that the current gap between domestic supply and demand is not widened. Budget increases should be made slowly and in step with the suggested reorganization of the DGWRD (paras. 3.29 and 3.30 and Annex 9);

(b) The DGWRD and the Provincial Public Works Service should place much more emphasis on improving the operation and maintenance of irrigation systems at the primary and secondary levels and should enhance the status of O&M staff (paras. 2.08 to 2.13 and Annex 5);

(c) The DGWRD and the Provincial Public Works Service should, with the Ministry of Agriculture, continue to promote the establishment of water user associations (para. 2.10 and Annex 6);

(d) Soil surveys in areas identified for future irrigation development should be mounted urgently (para. 3.10 and Annex 9);

(e) Any expansion of irrigation development should be complemented by improvements in support services to farmers, although this should not be at the expense of the support given to dry land agriculture (para. 3.31 and Annex 9);

(f) That serious thought should be given to maintaining the present pace of irrigation rehabilitation and development in Java while planning and programming activities proceed for expanded irrigation development in the Other Islands (para. 3.23).

Training and Staff Development

5.03 The mission recommends that:

(a) The Ministry should define the respective responsibilities of PUSDIKLAT and the four Directorates General for the planning and implementation of training schemes (para. 4.19 and Annex 8). - 42 -

(b) DGWRD should review its long-term manpower needs (para. 4.19 and Annex 8). This review would take into account such factors as:

- future total manpower needs; and

- minimum training, experience and types of qualifications required.

(c) The DGWRD should review the long-term supply prospects for engineers and technicians (Annex 8). This review should take particular account of:

- the output from the formal education system;

- the extent to which graduates could be influenced to form the DGWRD through scholarships or other incentives;

- the extent to which upgrading of existing staff could provide the manpower needs;

(d) The DGWRD should review its recruitment policy (Annex 8). This review should include an examination of:

- salary levels and conditions of employment as they affect recruitment;

- the type and number of scholarships;

- the use of short-term local and overseas consultants for particular tasks;

(e) The DGWRD should consider the establishment of a standing committee having representatives from within and outside the organization (para. 4.19 and Annex 8). The committee should be responsible for:

- reviewing long-term plans for all training programs;

- assessing the effectiveness of such programs;

- establishing contacts with major institutions supplying engineers and technicians for the Directorate General and, if appropriate, recommending changes in curricula;

- evolving a program for the use of existing technical talent and make recommendations concerning funds required for writing, testing and publication of Indonesian textbooks and manuals;

- review the possibility of expanding A-V programs for juru pengairan (irrigation subforemen) to all irrigation provinces, the SPMAs and the Ministry of Agriculture;

- consider and if appropriate draft proposals for the establishment of a training center for DGWRD staff in conjunction with the reorganization proposals discussed in Annex 7. - 43 -

Organization of the DGWRD

5.04 In order to achieve these objectives the mission recommends that:

(a) The DGWRD be reorganized along regional lines having four separate Directorates responsible for project implementation in four regions of Indonesia (para. 4.09 and Annex 7);

(b) The Director General be assisted by two Deputy Director Generals. One should be responsible for project implementation and the other should be responsible for planning and programming, technical services and general administration (para. 4.10 and Annex 7). Note: Because the mission was advised that the creation of two Deputy Director Generals would not be possible within the guidelines for the structure of government organization, it recommends an alternative; the retention of the present position of Assistant Director General with broadly the same functions, but with the additional responsibility for project monitoring (para. 4.09 and Annex 7);

(c) Greater emphasis should be given to building up the planning and programming capacity of the DGWRD (para. 4.11 and Annex 7);

(d) All supporting technical services for the DGWRD should be within one Directorate. In addition this Directorate should also become responsible for setting standards and for training and staff development (para. 4.15 and Annex 7);

(e) A system of regular information supply and analysis on the progress of all irrigation projects should be established, backed up by adequate computing, data storage and retrieval facilities. A special project monitoring division should be set up for this purpose (para. 4.20 and Annex 7). - 44 -

ANNEX I Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Terms of Reference

Background

1. The Bank Group's lending operations for irrigation since 1969 have concentrated mainly on rehabilitation of existing irrigation systems which had fallen into a state of disrepair after many years of poor maintenance. Most of these rehabilitation activities have been on Java. The rehabilitation of the major irrigation systems on Java has now been either completed, is in progress or is in an advanced planning stage. In the light of the substantial imports of rice (expected to be about 2.5 million tons in 1977-78), the Bank was concerned to know whether irrigation could contribute to increased food crop production, the nature and direction of the Government's plans for future irrigation development and the extent to which the Bank might assist in financing that development.

2. A related interest arose out of the assumption, based on the Government's regional development objectives, that future irrigation development would concentrate more on developments in the islands other than Java and also that, as a consequence of the trend in the type of project, there would be a trend away from the rehabilitation of existing "run of the river" systems towards construction of new irrigation development involving either run of the river supplies, storage or tidal land and swamp development in areas where clearing, drainage and leveling of new land would be a major requirement. It was assumed that the Bank may become involved in these projects in the future through its lending activities and therefore a preview of the scope and economics of these future projects was considered to be useful for the Bank's forward planning.

3. Finally, there was concern in some quarters of the Bank about the capacity of the line agency responsible for irrigation development, the Directorate General of Water Resources Development (DGWRD) to continue to take responsibility for an increasing number of Bank Group projects. This concern was not stimulated by any dissatisfaction about the performance of the DGWRD, rather a realization that Bank Group loans, together with those from other institutions as well as bilateral lending and assistance, place a considerable burden on a government body such as the DGWRD. One of the main purposes of the mission therefore was to assess the capacity of the DGWRD to cope with the foreseeable investment in irrigation in Indonesia.

Terms of Reference for Mission

4. "The main objective of the Review is to examine the prospects for and implications of future irrigation development in Indonesia. In addition, the mission should make a study of the organization and management of the - 45 -

ANNEX 1 Page 2

Directorate General of Water Resources Development with a view to assessing the planning, implementation and operational capacity of that organization in relation to its current tasks as well as its expected future role. Time permitting, the mission should also review the extent and operation of past and current irrigation development in Indonesia." - 46 -

ANNEX 2 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Extent and Quality of Irrigation Development in Indonesia

1. Irrigation facilities in Indonesia are provided by a range cf institutions, but most can be conveniently classified into those constructed and serviced by the Ministry of Public Works (MPW) and those which are outside the control of the MPWEP (usually referred to as village systems)./l The systems, operated and maintained by the MPW through its Provincial Public Works organization, dominate the irrigation picture in Indonesia.

Extent of Existing Irrigation Development

2. Public Works Irrigation Systems. Table 1 provides a summary of the service area of existing irrigation systems which are administered by MPW, by type and province./2 "Technical" irrigation systems are those which have water supply and drainage systems which are separate and where water supplies are measured; they usually have permanent, well-maintained structures. "Semi-technical" systems have fewer permanent structures, have only one measurement device (usually at the major intake) and the supply and drainage systems are not always completely separate. "Simple" systems have no measurement devices, conveyance systems are not fully separate with the possibility of recirculation of water. "Village" systems (see Table 1 also) are classified as simple and are built and operated er.tirely by the local community; they fall outside the jurisdiction of the MPW. "Swamp and Tidal Swamp" systems are not irrigation systems in the conventional sense, since they usually allow little control over water supply and mainly provide drainage./3 According to the inventory provided by the Directorate General of Water Resources Development (DGWRD), which is the organization within the MPWEP responsible for the construction of publicly financed

A1 Village systems may have been constructed by a village on a cooperative basis, or they may have been constructed using public funds, but subsequently managed by village organizations.

/2 It should be stressed that the areas in Table 1 are the nominal service areas. In some cases only a proportion of the total service area can be irrigated at present because of inadequacies in water supplies, poorly developed reticulation systems, etc. (see para. 3)

/3 More sophisticated systems are being designed which will allow greater control. - 47 - ANNEX 2 Page 2 irrigation systems, the total nominal service area of existing irrigation systems under the control of the MPW is some 4.0 million ha. The service area in Java accounts for about 63% of the national total and is more advanced technically than irrigation areas in the Other Islands.

3. Service areas exceed irrigated area to the extent that a system has an inadequate water supply during the wet and dry seasons, is in need of rehabilitation, tertiary-development or on-farm development. The ratio of irrigated area to service area provides a reasonably good measure of the condition of existing systems; however the area actually irrigated is difficult if not impossible to obtain. Nevertheless an approximate assessment of the quality of the service area can be made by comparing Tables 1 and 2. In the latter table the figures show that on the basis of estimates made by the DGWRD and the Directorate General of Food Crops (DGFC), 3.0 million ha of the service area administered by the MPW will be eligible for production intensification under the BIMAS/INMAS program during the 1977/78 wet season compared with a total service area of 4.0 million ha. This is not a BIMAS/ INMAS target figure, but the area of irrigated land which was estimated to have sufficiently good water control for growing high-yielding varieties of rice with the BIMAS/INMAS packages./l

4. If the DGWRD/DGFC estimate is accurate, approximately one million ha (or 25% of the total service area) of existing "Public Works" systems are currently in need of augmented water supplies, rehabilitation, tertiary canals or on-farm development. Of this area, Sumatera accounts for about 420,000 ha; Java, 294,000 ha; and Sulawesi, 145,000 ha. The reasons for the inadequate quality of one quarter of the MPW service area are likely to be complex and varied. Furthermore not all of the shortcomings in the irrigation systems can be considered as the formal responsibility of the MPW. For example it has traditionally been the responsibility of farmers in the service area to construct tertiary distribution systems, although recent moves by the Government to provide financial assistance for the construction of tertiaries in some areas is changing the strict demarcation of formal responsibility for tertiary construction.

5. The above analysis probably understates the need for the improvement of irrigation systems since no account is taken of potential cropping intensities on lands already irrigated. According to data presented in Table 3, only about 1.4 million ha of the Public Works systems are suitable for the BIMAS/INMAS program during the dry season; this amounts to about 45% of the eligible wet-season area. Cropping intensities are a function not only of water supplies, rainfall and water management, but also of the quality of irrigation facilities. Once all defective systems are rehabilitated a substantial expansion of the area planted to both wet and dry-season crops should be possible. Table 4 which shows the proportion of the Public Works service areas eligible for BIMAS/INMAS loans in the dry season of 1977 and the wet season of 1977-78, indicates the extent to which there are provincial and regional differences in the quality of irrigation systems. For the wet season Java shows one of the highest ratings with an average of

L Unpublished BPS data suggests that the total sawah area harvested in Indonesia during 1976 was about 5.3 million ha compared with the total in Table 2 of 5.5 million ha. - 48 - ANNEX 2 Page 3 about 80%, although there would appear to be considerable scope for rehabilitation in Central Java which shows about 60% of the area as being eligible for the BIMAS/ INMAS program.

6. The discussion to this point has concentrated on the traditional and widespread gravity irrigation systems. There are some 65,000 ha of tidal and fresh water swamp areas under the control of the MPW. All of these areas are assessed as being suitable for the BIMAS/INMAS program in the wet season, and about 50% during the dry season./l

7. Village or Nonpublic Works Systems. The extent of village irrigation systems which are not under the control of the Ministry of Public Works could not be obtained. However, Table 2 shows that some 1.0 million ha of village systems are eligible for the BIMAS/INMAS program during the wet season 1977/78. In other words, village systems account for about one-quarter of the total area served by gravity irrigation systems and which are at the same time eligible for the BIMAS/INMAS program is to be found in the village systems. About half of this area is found in Java.

8. Other Water Resource Developments. It was mentioned earlier that the extent of tidal land development under the control of the MPW was relatively small (about 85,000 ha). By contrast, the area of tidal land in Indonesia developed outside the jurisdiction of the MPW and eligible for the BIMAS/INMAS program is estimated to be in the vicinity of 400,000 ha in the wet season of 1977/78. Most of this area has been settled spontaneously in coastal Sumatera and Kalimantan; water management facilities are seldom more than simple drainage systems built by the settlers. The interesting question which arises is whether those areas which have not been settled spontaneously have been inadvertently missed or have been rejected by these settlers because of doubts about the long-term productivity of some areas.

Extent of Systems Under Construction or in Design Phase

9. Table 5 summarizes the extent of ongoing irrigation development under programs administered and financed by the MPW. Many of these projects, which include some 1.1 million ha of new development and 0.5 million ha of rehabilitation, are planned for completion during the next year or two, although most will probably be completed during the period of Repelita III. Most of the rehabilitation currently under way (66% of the total area) is on Java, while most of the new developments (again about 66% of the total area) are taking place on the Other Islands. Two much publicized components of the new development programs are the "Sederhana" or simple irrigation, and the swamp or tidal reclamation projects.

/1 The difficulties which the mission encountered with the data on the extent of irrigation development referred to earlier are reflected here again. For example the area suggested as being suitable for BIMAS/INMAS in the wet season (Table 2) is greater than the total area available (Table 1). The explanation for these discrepancies is probably to be found in different definitions and the fact that it is difficult to expect that two surveys will cover exactly the same area. - 49 -

ANNEX 2 Page 4

10. "Sederhana" Program. Primarily designed for implementation by Provincial Public Works organizations outside Java, this program was aimed at irrigation development on a small scale (no greater than 2,000 ha) and low cost (costs have ranged between $250 and $500 per ha) leading to rapid increases in rice production and at the same time supplementing the Government's transmigration program by providing increased employment opportunities and regional development generally. A background paper issued by the MPWEP /1 describes the program as follows:

"The Sederhana Irrigation/Reclamation Program was established by the Government as a means of both increasing rice production and improving the well-being of the low income segment of the rural population. It is undertaking projects which can be simply and rapidly executed. The Director General of Water Resources Development, Ministry of Public Works and Electric Power was assigned this responsibility. A proposal was sub- mitted for the construction of projects with a total area of 550,000 hectares, to put into Indonesia's Second Five Year Development Plan (Repelita II from Indonesian Fiscal Year 1974/1975 - 1978/1979), broken down by years as follows":

Indonesian fiscal year Target area Achieved area /a (April 1-March 31) ------(ha) ---- …------

1974/75 40,000 39,398 1975/76 60,000 49,354 1976/77 100,000 56,229 1977/78 150,000 69,537/b 1978/79 200,000 n.a.

Total 550,000 n.a.

/a The achieved areas are drawn from Annex 2, Table 9.

/b This is a target.

11. As can be seen from the above table, development achieved has fallen short of the target and consequently the 1977/78 target has been reduced to 69,500 ha (see Table 7). Most of the Sederhana development to date has involved the rehabilitation of existing small irrigation systems. Results have been variable depending on the effLciency and implementation capacity of the Provincial Public Works and the availability of suitable local contractors,

/1 "Sederhana (simple) Irrigation/Reclamatton Project in Indonesia," Ministry of Public Works and Electric Power, April 1976. - 50 - ANNEX 2 Page 5

but perhaps the most important factor has been the commitment of the local villages where the projects are implemented. There are known to have been outstandingingly successful projects and at the same time some disappointing results; as with larger projects many projects have not yet achieved the construction of tertiary canals and the establishment of water user associations with the result that many of the systems which have been completed are not being used efficiently. Part of the current five-year program is being financed by a loan of $23.7 million from USAID, for the three years (1976/77 to 1978/79) for the DGWRD to retain consultants to advise on design, training, construction, and operation and maintenance (including on-farm distribution) to ensure efficient water management. While results still fall short of expectations, with management at all levels still being a significant problem, it is understood that a further three-year USAID loan arrangement for "sederhana" development is being discussed.

12. It is perhaps too early to evaluate the impact of the Sederhana program on the regional improvement and development of irrigation systems./1 However, there can be little question that it has had a stimulating effect on the staff in the Provincial Public Works in that they have been given the opportunity to participate in the construction and management of irrigation development to a greater extent than previously. Although it is possible that in some provinces resources used for the Sederhana program have been diverted from other activities related to ongoing irrigation development, the program has had the effect of distributing public investment in irrigation widely between regions outside Java and, to the extent that new developments are built, will also assist with the transmigration program. The simple, low cost nature of the program has attraction, particularly at a time of budget stringency. Moreover, a greater number of farmers can be reached than might otherwise be possible. On the other hand the poor quality of the work done sometimes because of inadequate supervision probably means high annual maintenance costs as well as the likelihood of extensive rehabilitation of structures within a relatively short period of time. On balance, however, it must be said that this is an imaginative scheme which, with the right management, has the potential for improving the welfare of farmers outside Java more quickly than some of the larger, technically more complete, but more expensive and time consuming, irrigation schemes.

13. Tidal Reclamation. Sumatera and Kalimantan have on their coast- line at least 5 million of ha of tidal swamps. For some years now, starting with the period of Repelita I, the GOI has been reclaiming small parts of these tidal areas with a view to establishing rice farms mainly for transmigrants from Java. That the development of rice farming was possible in these areas was shown by the many spontaneous settlers, mainly from Sulawesi, who established farming activities in many of the tidal areas on Sumatera and Kalimantan. The tidal swamps consist of peats of varying thickness overlying alluvial or marine sediments which support a natural vegetation which varies from various types of palms to substantial trees (usually secondary growth). Reclamation consists of: (a) construction of a main canal which functions mainly as a drain connecting a tidal river with the swamp area; (b) construction of simple access roads usually adjacent to canals, (c) construction

/1 The USAID is currently undertaking an evaluation of the program. - 51 - ANNEX 2 Page 6 of a network of secondary canals to permit the distribution of fresh water from the river by gravity at high tide and drainage into this same network during low tide; and (d) clearing of vegetation, land leveling settlement and cultivation.

14. Repelita I included ambitious plans for tidal development, however, progress was slower than expected. The following tables show the potential for development assessed-in 1974, along with achievements during Repelita I and plans for Repelita II. It is clear that the target of 1 million ha for Repelita II will not be achieved.

Estimated Estimated Target tidal potential of reclaimed reclamation Location tidal swamp area during proposed for of projects development /a Repelita I Repelita II ------(ha) ------

South/Central Kalimantan 568,000 12,829 50,000 West Kalimantan 180,000 2,730 25,000 South Sumatera 362,000 9,827 75,000 Jambi 114,500 6,802 25,000 Riau 986,000 904 75,000

Total 2,210,500 33,092 250,000

/a This estimate (made by the Government when making its plans for Repelita II) is indicative only and is not based on any specific survey work. Other estimates of the potential area for development have also been used including a figure of 5 million ha at a seminar on Tidal Land Development in S.E. Sumatera held at FAO in Rome in November 1975.

TIDAL AREA RECLAIMED DURING REPELITA II

Location of projects 1974/75 1975/76 1976/77 1977/78 …----______(ha) ---- …------

South/Central Kalimantan 1,668 7,770 11,125 10,817 West Kalimantan 579 4,043 9,025 7,660 South Sumatera 2,068 15,492 15,640 16,560 Jambi 600 7,820 3,680 9,140 Riau 450 11,866 16,780 17,226

Total 5,365 46,991 56,250 61,403

Source: Directorate General of Water Resources. - 52 - ANNEX 2 Page 7

15. The costs of tidal land development (in mid-1978 prices) have been in the order of $1,000-1,500 per ha for drainage, clearing and land development; in addition the costs associated with transmigration and the provision of basic facilities for transmigrants is about $800 per ha. With an allocation of 2 ha per family, total capital cost of settlement to the Government is probably between $3,600 and $4,600 per family. The dominant land use in the areas so far is paddy rice production in the wet season with palawija crops and fruits in the dry season.

16. While there is optimism about the potential of tidal lands as a basis for increased food production and as a target area for transmigrants, a number of technical questions need to be resolved.

(a) Soils. Peat soils deeper than about 100 cm in the undrained conditions are difficult to farm. They grow only a very limited range of crops and are unsuitable for paddy production. Acid sulphate soils, which are formed when the clay soils are aerated, with toxic or potentially toxic layers close to the surface (50 cm), can be farmed provided there is rigid control of the water table.

(b) Water Control. While the maintenance of water levels in soils is necessary to avoid the formation of acid sulphates, it is also important to avoid having water tables too close to the surface which would be detrimental to most perennial crops. Salt water intrusion does not appear a serious problem though some could be expected during a prolonged drought. The main objective of tidal land development is drainage. In the future it may be possible to achieve a level of technology which would permit the supply of supplementary water during periods of drought.

(c) Cropping Patterns. Much work is still required to determine the most appropriate types of crops and rotations of these areas.

(d) Pests and Diseases. These are serious and farmers complain that rats are their biggest problem. This is to be expected in areas opened up close to jungle. Some of the rice diseases, e.g., blast, arise because of adverse soil conditions.

(e) Soil Fertility. Most of the areas are likely to respond to fertilizers, however, research is required to determine optimum appli- cations for various crops.

17. These issues are being investigated, partly with Bank assistance./l While statements which refer to the vast potential of tidal lands need to be treated with caution until the problems referred to above can be

/1 Bank Loan No. 1268 provides an amount of $6.7 million for the financing of studies and the preparation of a feasibility report for tidal land development. This work is under way. - 53 - ANNEX 2 Page 8

resolved. Nevertheless, there are known to be some areas where the problems are minimal. These areas should be identified as rapidly as possible through reconnaissance surveys since they offer significant potential for relatively rapid large-scale land settlement. Tidal land development is an important component of Repelita III. Annex 12 shows that tidal land development has been included in the pipeline of proposed projects for Bank financing. ANNEX 2 Table I

INDONESIA

IRRIGATION PROGRAM REVIEW

Inventory of Existing Irrigation Systems /a (October 1977)

Gravity /b Total Total public Swamp Semi- public works and and Island/Province Technical technical Simple works Village /c village tidal Total ------(ha) ------,---

Java W. Java /d 344,430 82,646 105,910 532,986 199,432 732,418 - 732,418 Jatiluhur 213,500 38,771 45,472 297,743 /e 297,743 - 297,743 C. Java 474,301 67,597 205,416 747,314 163,511 910,825 - 910,825 Yogjakarta - 64,317 - 64,317 4,200 68,517 - 68,517 E. Java 587,445 125,546 194,330 907,321 165,815 1,073,136 - 1,073,136 DKI Jakarta 11,613 5,790 160 17,563 - 17,563 - 17,563

Subtotal 1,631,289 384,667 551,288 2,567,244 532,958 3,100,202 - 3,100,202

Bali - 44,355 8,291 52,646 51,174 103,820 - 103,820

Sumatera Aceh - 132,713 /f - 132,713 33,150 165,863 - 165,863 N. Sumatera 57,047 40,567 38,475 136,089 95,676 231,765 3,800 235,565 W. Sumatera 29,801 94,087 72,632 196,520 55,075 251,595 - 251,595 Riau - 4,933 81,264 86,197 7,070 93,267 3,141 96,408 Jambi 675 3,000 17,804 21,479 12,347 33,826 9,702 43,528 Bengkulu 5,989 16,214 31,089 53,292 4,659 57,951 - 57,951 S. Sumatera 26,549 18,315 40,688 85,552 66,040 151,592 12,445 164,037 Lampung 104,198 10,343 - 114,541 19,000 133,541 - 133,541

Subtotal 224,259 320,172 281,952 826,383 293,017 1,119,400 29,088 1,148,488

Kal imantan W. Kalimantan - 8,470 2,250 10,720 10,730 21,450 5,052 26,502 E. Kalimantan 1,167 200 30,143 31,510 550 32,060 - 32,060 C. Kalimantan - - 2,698 2,698 - 2,698 7,632 10,330 S. Kalimantan 2,323 6,514 6,135 14,972 4,640 19,612 22,438 42,050

Subtotal 3,490 15,184 41,226 59,900 15,920 75,820 35,122 110,942

Sulawes i N. Sulawesi 5,037 18,432 18,613 42,082 8,029 50,111 - 50,111 C. Sulawesi 5,678 8,163 4,470 18,311 29,499 47,810 ' - 47,810 S. Sulawesi 126,907 53,512 20,956 201,375 43,161 244,536 - 244,536 S.E. Sulawesi 2,172 4,564 665 , 7,401 4,215 11,616 - 11,616

Subtotal 139,794 84,671 44,704 269,169 84,904 354,073 - 354,073

Nuss Tenggara W. Nusa Tenggara 63,343 51,267 37,595 152,205 10,869 163,074 - 163,074 E. Nusa Tenggara - 9,803 13,860 23,663 27,627 51,290 - 51,290

Subtotal 63,343 61,070 51,455 175,868 38,496 214,364 214,364

Maluku - 1,419 - 1,419 - 1,419 - 1,419

Total 2,062,175 911,538 978,916 3,952,629 1,016,469 4,969,098 64,210 5,033,308

/a This inventory applies to service areas. All categories except "village" are under the control of MPWEP. Table does not include swamp areas where spontaneous settlers have established drainage systems.

/b Term used to cover the traditional gravity irrigation systems. Most are based on "run-of-the- river" supplies.

/c Taken from information on village systems in Annex 2, Table 2. To the extent that there are village systems which are not suitable for BIMAS/INMAS credit, these figures understate the service area.

/d Excludes area under control of Jatiluhur Authority.

/e Included in W. Java.

/f Includes "simple" irrigation systems.

Source: Directorate General of Water Resources Development, Ministry of Public Works and Electric Power, and Directorate General of Food Crops, Ministry of Agriculture INDONESIA

IRRIGATION PROGRAM REVIEW

Area of Paddy Land Identified as Suitable for BIMAS/INMAS Program Wet Season: 1977-78

Paddy Area Served by Irrigation Systems Other Paddy Land Total Total Province Ministry of Public Works and Electric Power Village Total public Rainfed Tidal Land Swamp Land Polder Part other all Semi- Total systems works &village Public Nonpublic Public Nonpublic water paddy paddy Technical technical Simple public works works works works works logged land land ……------(ha) ------

Java W. Java 529,976 161,723 135,946 827,645 199,432 1,027,077 135,114 _ _ _ _ _ - 135,114 1,162,191 C. Java 309,935 104,217 24,239 438,391 163,511 601,902 190,000 - - _ _ _ - 190,000 791,902 Jogjakarta 1,200 23,166 32,032 56,398 4,200 60,598 45,069 - - - _ - - 45,069 105,667 E. Java 550,400 123,100 90,685 764,185 165,815 930,000 ------930,000 Jakarta 5,339 2,446 - 7,785 - 7,785 6,590 - _ _ _ _ - 6,590 14,375

Subtotal 1,396,850 414,652 282,902 2,094,404 532,958 2,627,362 376,773 - - - _ ' - 376,773 3,004,135

Bali - 35,384 4,271 39,655 51,174 90,829 1,599 - - - _ _ - 1,599 92,428

Sumatera Aceh - 20,331 93,443 113,774 33,150 146,924 63,843 ------63,843 210,767 N. Sumatera 9,857 53,305 13,988 77,150 95,676 172,826 91,015 1,278 - _ 9,656 101,949 274,775 W. Sumatera 24,706 70,281 43,593 138,580 55,075 193,655 36,115 ------36,115 229,770 Riau - 3,747 6,373 10,120 7,070 17,190 20,024 15,116 51,882 - 4,122 - 91,144 108,334 Jambi 400 3,000 22,579 25,979 12,347 38,326 3,006 35,439 - - _ - - 38,445 76,771 Bengkulu 8,689 11,539 29,713 49,941 4,659 54,600 -- - - - 54,600 S. Sumatera 14,300 450 850 15,600 66,040 81,640 - - 49,755 - - 49,755 131,395 Lampung 49,606 - 1,150 50,756 19,000 69,756 23,730 - _ - - 2,330 - 26,060 95,816

Subtotal 107,558 162,653 211,689 481,900 293,017 774,917 237,733 51,833 101,637 - 4,122 2,330 9,656 407,311 1,182,228 u

Kalimantan W. Kalimantan - 3,900 7,150 11,050 10,730 21,780 56,400 107,000 93,630 - - - - 257,D30 278,810 E. Kalimantan - 2,170 2,720 550 2,720 25,490 - 25,490 28,210 C. Kalimantan - 13,060 13,060 - 13,060 10,399 - 55,469 - - 2,300 1,699 69,867 82,927 S. Kalimantan 2,323 5,753 3,732 11,808 4,640 16,440 97,119 12,968 117,374 8,950 12,205 5,006 10,985 264,607 281,047

Subtotal 2,323 9,653 26,112 38,088 15,920 54,000 189,408 23,668 266,473 8,950 12,205 7,306 12,684 520,694 574,694

Sulawesi N. Sulawesi 4,082 20,819 11,536 36,437 8,029 44,466 1,113 ------1,113 45,579 C. Sulawesi 5,706 9,716 18,050 33,472 29,499 62,971 2,392 - 450 - - - - 2,842 65,813 S. Sulawesi 62,269 21,621 26,503 119,393 43,161 153,554 79,154 - - - 79,154 232,708 S.E. Sulawesi 279 - - 279 4,215 4,494 - - - - - 4,494

Subtotal 72,336 52,156 56,089 180,581 84,904 265,485 82,659 450 - - 83,109 348,594

Nusattenggara W. Nusa Tenggara 61,049 42,769 31,247 135,065 10,869 145,934 30,205 ------30,205 176,139 E. Nusa Tenggara 3,750 13,088 19,785 36,623 27,627 64,250 67,372 - - _ _ _ 67,372 131,622

Subtotal 64,799 55,857 51,032 171,688 38,496 210,184 97,577 - - - - - _ 97,577 307,761

Total 1,643,866 730,355 632,095 3,006,316 1,016,469 4,022,777 985,749 75,501 368,560 8,950 16,327 9,636 22,340 1,487,063 5,509,840

Source: Directorate General of Water Resources Development and Directorate General of Food Crops.

- re INDONESIA

IRRIGATION PROGRAM REVIEW

Area of Paddy Land Identified as Suitable for BIMAS/INMAS Program Dry Season: 1977

Paddy Area Served by Irrigation Systems Other Paddy Land Total Total Province Dept. of Public Works Village Total public Rainfed Tidal Land Swamp Land Polder Part other all Semi- Total systems works & village Public Nonpublic Public Nonpublic .ater paddy paddy Technical technical Simple public works works works works works logged land land ------(ha) ------~------~----

Java W. Java 278,971 105,906 35,580 420,457 101,458 521,915 ------1,612 1,612 523,527 C. Java 137,012 35,107 4,936 177,055 50,539 227,594 ------227,594 Jogjakarta 1,200 11,775 15,000 27,975 7,025 35,000 ------35,000 E. Java 244,865 3,100 35 248,000 2,000 250,000 ------250,000 Jakarta 5,339 2,446 - 7,785 - 7,785 ------7,785

Subtotal 667,387 158,334 55,551 881,272 ]61,022 1,042,294 ------1,612 1,612 1,043,906

Bali - 24,772 4,154 28,926 37,153 66,079 - - - - 66,079

Sumatera Acehl - 20,331 - 20,331 6,570 26,901 ------26,901 N. Sumatera 8,422 39,690 7,149 55,261 68,884 124,145 91,814 - 848 - - - 11,349 104,011 228.156 W. Sumatera 22,979 56,693 30,937 110,609 47,452 158,061 28,407 -- - - 28,407 186,468 Riau - 2,957 2,897 5,854 6,666 12,520 12,620 - 3,370 - - - 11,950 15,990 40,460 Jambi 400 3,000 12,111 15,511 4,765 20,276 - 21,468 - 23,768 45,236 65,512 Bengkulu 8,689 11,539 29,713 49,941 - 49,941 ------49,941 S. Sumatera 8,400 - - 8,400 6,031 14,431 5,800 - - - - - 125,309 131,109 145,540 Lampung 10,953 - 10,953 6,710 17,663 --- - 17,663 17,663

5ubtotal 59,843 34,210 82,807 276,860 147,078 423,938 138,641 21,468 4, £ 21 172,376 336,703 760,641

Salimantan W. Kalimantan - 3,900 7,150 11,050 10,730 21,780 56,480 10,700 93,630 - - - - 160,810 182,590 E. Kalimantan 181 - 180 361 240 601 2,975 - - 2,975 3,576 C. Kalimantan - - 500 500 - 500 - - 17,000 - - 2,300 - 19,300 19,800 S. Kalimantan 525 1,300 475 2,300 125 2,425 2,200 - 1,750 - - 17,250 25,501 46,701 49,126

Subtotal 706 5,200 8,305 14,211 11,095 25,306 61,655 10,700 112,380 - - 19,550 25,501 229,786 255,092

Sulawes i N. Sulawesi 4,082 20,819 11,536 36,437 - 36,437 1,113 ------1,113 37,550 C. Sulawesi 5,706 9,716 18,050 33,472 29,499 62,971 2,392 - 450 - - - - 2,842 65,813 S. Sulawesi 40,822 25,599 30,900 97,321 40,216 137,537 199,780 ------199,780 337,317 S.E Sulawesi 278 - - 278 5,571 5,849 6,749 - - - - 1,100 - 7,849 13,698

Subtotal 50,888 56,134 60,486 167,508 75,286 242,794 210,034 - 450 - - 1,100 - 211,584 454,378

Nusa Tenggara W. Nusa Tenggara 18,782 5,877 650 25,309 - 25,309 - - - 25,309 E. Nusa Tenggara 2,750 4,413 5,445 12,608 5,700 18,308 - - _ - - _ _ _ 18,308

Subtotal 21,532 10,290 6,095 37,917 5700 43,617 - _ ------43,617

0 2 8 Total 800,356 38829 217,398 1,406,694 437,334 1,844,0 410,330 32,168 117,048 - - 20,650 199,489 779,685 2,623,713

Source: Directorate General of Water Resources Development.

|a X ANNEX 2 Table 4

INDONESIA

IRRIGATION PROGRAM REVIEW

Comparison of Public Works Service Area and Area Suitable for BIMAS/INMAS Pro ram (Dry-season 1977 and wet season 1977/78)

Total public Area suitable for Proportion of service works service BIMAS/INMAS loans area suitable for area /a Dry season Wet season Dry season Wet season 1977 /b 1977/78 /c 1977 1977/78 ------(ha) ------() ------

Java W. Java 830,729 420,457 827,645 51 100 C. Java 747,314 177,055 438,391 24 59 Yogjakarta 64,317 27,975 56,398 43 88 E. Java 907,321 248,000 764,185 27 84 Jakarta 17,563 7,785 7,785 44 44

Subtotal 2,567,244 881,272 2,094,404 34 82

Bali 52,646 28,926 39,655 55 75

Sumatera Aceb 132,713 20,331 113,774 15 86 N. Sumatera 136,089 55,261 77,150 41 57 W. Sumatera 196,520 110,609 138,580 56 71 Riau 86,197 5,854 10,120 7 12 Jambi 21,479 15,511 25,979 72 /a Bengkulu 53,292 49,941 49,941 94 94 S., Sumatera 85,552 8,400 15,600 10 18 Lampung 114,541 10,953 50,756 10 44

Subtotal 826,383 276.860 481,900 34 58

Kalimantan W. Kalimantan 10,720 11,050 11,050 /a /a E. Kalimantan 31,510 361 2,720 1 9 C. Kalimantan 2,698 500 13,060 19 /a S. Kalimantan 14,972 2,300 11,808 15 79

Subtotal 59,900 14,211 38,088 24 64

Sulawesi N. Sulawesi 42,082 36,437 36,437 87 87 C. Sulawesi 18,311 33,472 33,472 /a /a S. Sulawesi 201,375 97,321 119,393 48 59 S.E. Sulawesi 7,401 278 279 4 4

Subtotal 269,169 167,508 180,581 62 67

Nusa Tenggara W. Nusa Tenggara 152,205 25,309 135,065 17 89 E. Nusa Tenggara 23,663 12,608 36,623 53 /a

Subtotal 175,768 37,917 171,688 22 98

Malaka 1,419 - - - -

Total 3,952,629 1,406,694 3,006,316 36 76

/a From Table 4.

/b From Table 3.

/c From Table 2. - 58 - ANNEX 2 Table 5

INDONESIA

IRRIGATION PROGRAM REVIEW

Inventory of Systems in Design Stage or Under Construction /a (October 1977)

Gravity /b Swamp New and Ground- Island/Province development Rehabilitation Subtotal tidal water Total ------(ha) ------

Java W. Java /c 61,680 36,924 98,604 - - 98,604 Jatiluhur 66,000/d 18,243 84,243 - - 84,243 C. Java 88,834 129,151 217,985 - - 217,985 Yogjakarta 27,885 - 27,885 - 1,270 29,155 E. Java 19,752 146,650 166,402 - 88,000 254,402 DKI Jakarta 2,155 - 2,155 - - 2,155

Subtotal 265,506 330,968 596,474 - 89,270 685,744

Bali 3,813 5,118 8,931 - - 8,931

Sumatera Aceh 59,725 33,150 92,875 - - 92,875 N. Sumatera 24,694 14,500 39,194 3,000 - 42,194 W. Sumatera 41,762 6,840 48,602 12,000 - 60,602 Riau 13,589 1,650 15,239 51,626 - 66,865 Jambi 6,585 2,600 9,185 18,340 - 27,525 Bengkulu 31,572 8,800 40,372 - - 40,372 S. Sumatera 60,983 8,250 69,233 70,880 - 140,113 Lampung 92,761 515 93,276 7,000 - 100,276

Subtotal 331,671 76,305 407,976 162,846 - 570,822

Kalimantan W. Kalimantan 3,600 - 3,600 26,630 - 29,230 E. Kalimantan 3,884 100 3,984 - - 3,984 C. Kalimantan 710 - 710 18,405 - 19,115 S. Kalimantan 17,048 2,500 19,548 18,079 - 37,627

Subtotal 24,532 1,600 26,132 62,114 - 88,246

Sulawesi N. Sulawesi 25,704 4,886 30,590 - - 30,590 C. Sulawesi 26,407 4,900 31,307 - - 31,307 S. Sulawesi 76,405 62,787 139,192 - - 139,192 S.E. Sulawesi 15,448 - 15,448 - - 15,448

Subtotal 143,964 72,573 216,537 - - 216,527

Nusa Tenggara W. Nusa Tenggara 22,941 7,890 30,831 - - 30,831 E. Nusa Tenggara 8,331 4,180 12,511 - - 12,511

Subtotal 31,272 12,070 43,342 - - 43,342

Maluku 3,340 - 3,340 - - 3,340

Total 804,808 499,634 1,304,442 224,960 89,270/e 1,618,672

/a This inventory applies to service areas. /b Term used to cover the traditional gravity irrigation systems. 7W Excludes area under control of Jatiluhur Authority. /d Includes 51,000 ha tertiary development. /e Groundwater will supplement conventional irrigatiorn - actual service area will be smaller.

Source: Directorate General of Water Resources Development. - 59 - ANNEX 2 Table 6 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Distribution of Irrigation Systems in Design Stage or Under Construction by Size of Service Area, By Region

Gravity Tidal Ground- Region New development Rehabilitation Swamp swamp water Total

Java 0 - 1,999 ha 57 146 - - 1 204 2,000 - 4,999 ha 8 28 - - - 36 5,000 - 9,999 ha 4 5 - - - 9 10,000 - 19,999 ha 3 4 - - 1 8 20,000 ha and above 4 3 - - 2 9

Total 76 186 - - 4 266

Bali 0 - 1,999 ha 7 11 - - - 18 2,000 - 4,999 ha - - - 5,000 - 9,999 ha - _ 10,000 - 19,999 ha - - 20,000 ha and above - - -

Total 7 11 - - - 18

Sumatera 0 - 1,999 ha 124 28 - - - 152 2,000 - 4,999 ha 11 7 1 3 - 22 5,000 - 9,999 ha 11 3 1 1 - 16 10,000 - 19,999 ha 5 1 1 2 - 9 20,000 ha and above 3 - 1 2 - 6

Total 154 39 4 8 - 205

E. & W. Nusa Tenggara and Maluku 0 - 1,999 ha 37 5 - - - 42 2,000 - 4,999 ha 5 2 - - - 7 5,000 - 9,999 ha - 2 - - - 2 10,000 - 19,999 ha - - 20,000 ha and above - _ _

Total 42 9 - - - 51 - 60 - ANNEX 2 Table 6 Page 2

Distribution of Irrigation Systems Under Construction by Size of Service Area, By Region

Gravity Tidal Ground- Region New development Rehabilitation Swamp swamp water Total

Kalimantan 0 - 1,999 ha 27 5 - 6 - 38 2,000 - 4,999 ha 1 - 2 5 - 8 5,000 - 9,999 ha 1 - 1 5 - 7 10,000 - 19,999 ha 20,000 ha and above

Total 29 5 3 16 - 53

Sulawesi 0- 1,999 ha 41 17 - - - 58 2,000 - 4,999 ha 5 3 - - - 8 5,000 - 9,999 ha 4 5 - - - 9 10,000 - 19,999 ha 2 1 - - - 3 20,000 ha and above 1 1 - - - 2

Total 53 27 - - - 80

Indonesia 0 - 1,999 ha 293 212 - 6 1 514 2,000 - 4,999 ha 30 40 3 8 - 81 5,000 - 9,999 ha 20 1 2 6 - 43 10,000 - 19,999 ha 10 6 1 2 1 20 20,000 ha and above 8 4 1 2 2 17

Total 361 277 7 24 4 675 - 61 - ANNEX 2 Table 7

INDONESIA

IRRIGATION PROGRAM REVIEW

Progress of Sederhana Program in Repelita II (1974/75-1977/78) /a

1974/75 1975/76 1976/77 1977/78 1978/79 Total Repelita II Number of Area Number of Area Number of Area Number of Area /b Number of Target Number of Area Island/province projects (ha) projects (ha) projects (ha) projects (ha) projects area /c projects

Java D.K.I. Jakarta ------W. Java 27 5,336 17 3,996 21 3,233 14 2,548 20 2,475 99 17,588 C. Java 30 4,033 4 813 9 1,724 .19 2,633 21 134 83 9,337 Yogjakarta 2 73 2 134 5 230 4 531 5 168 18 1,136 E. Java 3 2,193 3 632 1 150 3 487 2 0 12 3,462

Subtotal 62 11,635 26 5.574 36 5.337 40 6.199 48 2.777 212 31,522

Bali - - 4 658 2 - 4 1,425 3 1,497 13 3,580

Sumatera Aceh 6 2,925 9 2,480 5 719 2 868 4 234 26 7,226 N. Sumatera 7 3,105 12 3,700 11 1,718 9 4,787 10 756 49 14,066 w. Sumatera 15 4,066 9 2,753 14 2,504 9 4,944 27 2,012 74 16,279 Riau 4 383 8 1,839 21 4,701 13 6,350 27 0 73 13,273 Jambi 28 3,019 31 3,238 26 2,639 14 4,755 44 0 143 13,651 Bengkulu 8 1,214 10 2,246 19 2,746 14 4,534 36 414 87 11,154 S. Sumatera 2 1,350 7 1,993 13 382 11 4,530 16 318 49 8,573 Lampung 5 1,343 12 3,085 11 2,899 9 2,244 37 3,508 74 13,079

Subtotal 75 17.405 98 21.334 120 18,308 81 33.012 201 7,242 575 97.301

Kalimantan W. Kalimantan - - 1 100 2 0 3 1,100 4 375 10 1,575 C. Kalimantan - - 1 108 7 410 2 2,500 7 637 17 3,655 S. Kalimantan 7 1,357 6 1,232 9 3,244 5 4,830 6 0 33 10,663 E. Kalimantan - - 1 100 8 1,680 6 1,118 21 1,600 36 4,498

Subtotal 7 1,357 9 1,540 26 5.334 16 9.548 38 2.612 96 20.391

Sulawesi N. Sulawesi 7 1,681 4 1,925 7 3,080 12 4,265 14 135 44 11,086 C. Sulawesi 4 1,035 5 4,102 6 4,721 11 4,535 16 3,680 42 18,073 S. E. Sulawesi 8 2,631 3 2,564 5 404 7 2,436 9 2,728 32 10,763 S. Sulawesi 8 3,568 32 7,589 20 5,744 6 1,043 17 1,886 83 19,830

Subtotal 27 8.915 44 16,180 38 13,949 36 12.279 56 8.429 201 59.752

Nusa TenRgara W. Nusa Tenggara - - 4 1,400 7 3,275 7 3,500 11 878 29 9,053 E. Nusa Tenggara - - 5 282 10 632 5 2,912 11 637 30 4,463

Subtotal - - 8 1.682 17 3.907 12 6.412 22 1.515 59 13.516

Maluku - - I - 1 100 1 222 1 685 4 1,007 Irian Jaya ------Timor ------

Total 171 39,312 190 46.968 240 46.935 190 69.097 369 24,757 1.160 227,069

/a Fiscal years, April 1 to March 31.

/b Estimated.

/c Target areas generally lower in 1978/79 compared with previous years in order to ensure an improved quality of work.

Source: Directorate General of Water Resources Development. INDONESIA

IRRIGATION PROGRAM REVIEW

Project Loans to Indonesia by International Institutions or Foreign Governments for Water Resources Development 1968 to September 1977

Lending Institution/ Name of Project Year of Loan Country Commitment ($ million)

A. IBRD/IDA Madium-Solo Groundwater 1968 0.030 Jatiluhur Irrigation 1968 0.067 Jatiluhur Extension 1968 0.126 Jatiluhur Aerial Mapping 1971 0.250 .Jatiluhur Irrigation Extension (Fifth Irrigation Project) 1974 30.000 First Irrigation Project 1969 5.000 Second Irrigation Project 1970 18.500 Third Irrigation Project 1970 14.500 Pomali-Comal Irrigation Feasibility Study 1971 0.806 Fourth Irrigation Project 1972 12.500 Sixth Irrigation Project 1975 65.000 Seventh Irrigation Project 1976 33.000 Eighth Irrigation Project 1977 63.000 Ninth Irrigation Project 1977 35.000 Tenth Irrigation Project Eleventh Irrigaton Project

Total 277.779

Source: Directorate General of Water Resources Development.

0 Lending Institution/ Name of Project Year of Loan Country Commitment ($ million)

B. Asian Development Tajum Irrigation Project 1969 0.990 Bank Gambarsari/Pesanggrahan Irrigation 1971 2.700 Sempor Dam 1972 9.200 Wampu Flood Control 1972 5.940 Proyek Serbaguna Karang-Sambung 1975 3.000 Telun Lada Area Development, Phase I 1975 12.200 Lodoyo Irrigation Project 1977 20.500

Total 54.530

C. U.S.A. Citanduy River Basin Master Plan and Feasibility Studies 1972 0.695 1 Lower Citanduy Design 1975 a% Segara-Anakan Pre-Design 1975 } 1.270 Segara-Anakan Project Design 1975 Jragung Dam Pre-Design 1975 0.442 Sederhana Irrigation 1975 23.700 Luwu Area and Transmigration 1975 15.000 Lower Citanduy - Construction 1976 12.500 Jragung Dam - Plan and Detailed Design 1974 1.800

Total 55.407

D. Japan Karang Kates Dam 1968 2.600 Karang Kates Dam 1969 3.536

I. I-I OQooacr iv >D Lending Institution/ Name of Project Year of Loan Country Commitment ($ million)

Karang Kates Dam 1970 3.570 Karang Kates Dam 1971 1.430 Kali Konto Dam (Selorejo Dam) 1968 0.800 Kali Konto Dam (Selorejo Dam) 1969 1.204 Kali Konto Dam (Selorejo Dam) 1970 1.040 Brantas Delta Irrigation 1970 0.905 Brantas Delta Irrigation 1971 0.395 Kali Porong Irrigation 1970 1.238 Kali Porong Irrigation 1971 1.482 Kali Porong Irrigation 1975 1.600 Ular River Flood Control 1971 1.300 River Dredgers Rehabilitation 1972 0.200 Way Jepara Irrigation 1973 2.171 a Way Umpu and Way Pangubuan Irrigation 1974 1.070 .Way Umpu and Way Pangubuan Irrigation 1976 6.430 Kali Surabaya Irrigation (Phases I and II) 1974 4.000 Kali Surabaya Irrigation (Phases I and II) 1976 8.850 Wlingi Multipurpose Dam 1975 18.500 Wlingi Multipurpose Dam 1976 2.340 Wonogiri Dam - Engineering Services for Dam and Hydro Power 1976 1.433 Wonogiri Dam - Construction 1977 35.400 Wonogiri Irrigation - Design 1977 1.750 Way Rarem - Detailed Design 1977 1.100

Total 104.344

OQ a Z M ,tXi Ox> Lending Institution/ Name of Project Year of Loan Country Commitment ($ million)

E. United Kingdom /a Kediri-Nganjuk Irrigation - Phase I 1973 0.538 Kediri-Nganjuk Irrigation - Phase II 1974 0.068 Kediri-Nganjuk Irrigation - Phase III 1974 1.160 Kali Progo Irrigation 1973 0.900 Kali Progo Irrigation - Engineering Services 1974 Dumoga Irrigation 1975 Gumbasa Irrigation 1975

Total 6.246

F. Netherlands Dredger Rehabilitation 1969 0.160 Dredging Equipment Rehabilitation 1969 0.346 Jakarta Flood Control 1969 1.020 Jakarta Flood Control 1974 1.501 Jakarta Flood Control - First Stage 1976 7.200 Jakarta Flood Control - Second Stage 1977 3.688 Semarang-Sedeku Irrigation Rehabilitation 1969 1.250 Tidal Swamp Equipment 1976 1.900

Total 17.065

G. Canada Water Resources Sectoral Development. 1976 9.174 - Bengkulu Design Unit - Central Java Design Unit - Sumbawa Water Resources Development Study

Total 9.174

/a Exchange rates have varied considerably and therefore a rate of US$1 = E 0.5 was used throughout.

CD tIV Z.4 Lending Institution/ Name of Project Country Year of Loan Commitment ($ million)

H. France Cisedane, Jakarta, Cibeet Water Resources Development Study 1975 2.083 Additional Services for cisedane, Jakarta, Cibeet Water Resources Study 1977 0.524 Total 2.607

(D X I - INDONESIA

IRRIGATION PROGRAM REVIEW

Technical Assistance Grants to Indonesia from International Institutions or Foreign Governments for Water Resources Development

Foreign Government /a Name of Project Year Value ($ million)

A. United Nations 1. UNDP Institute of Hydraulic Engineering - Bandung 1970/71 2.416 2. FAO Advisory Services in Water Legislation - Jakarta 1974/75 n.a. 3. WFP Volcanic Debris Control (E. Java/Bali) 1969/70 1.131 Food Assistance for Construction of Irrigation Canals in Kebumen Area (Central Java) 1977/78 1.280

B. Japan Barito River Basin Study (South Kalimantan) 1969/70 0.473 /b Assistance for Irrigation River Improvement and Volcanic Debris Control (E. Java and Bali) 1969/70 n.a. Kali Surabaya Feasibility Study (East Java) 1970/71 n.a. Riam Kana Irrigation (South Kalimantan) 1977/78 n.a. Brantas Basin and River Control Study, including Feasibility Study of Wlingi Dam (East Java) 1971/72 0.650 /b Regional Development in Lampung (Lampung) - Way Jepara 1971/72 0.170 /b - Way Umpu and Way Pengubuan 1972/73 0.150 /b - Way Rarem and Way Abung 1972/73 0.500

/a Note that technical assistance provided by Bank Group is included in project loan amounts in Table 1 (see Annex 4, Table 2 for details).

/b Estimate by DGWRD.

OQVb {D H M K .. Foreign Government Name of Project Year Value ($ million)

Studies and Planning of Central South Sulawesi Water Resources Development (Central and South Sulawesi) 1972/73 0.756 /a Wonogiri Irrigation Project (Central Java) 1974/75 0.600 /a Overall Ular River Flood Control and Drainage Project (North Sumatera) 1975/76 0.750 /a Erosion and Volcanic Debris Control - Master Plan of Mt. Meraju Area (East Java) 1975/76 2.415 /a Strengthening Design Unit of Central Design Unit of South Kalimantan Provincial Public Works (South Kalimantan) 1976/77 0.600 /a

C. United Kingdom Kali Progo Basin Study (Yogjakarta) 1969/70 0.200 /a Kediri Nganjuk Groundwater Development (E. Java) 1969/70 0.192 /a Dumoga and Gumbasa Irrigation (N. and C. Sulawesi) 1970/71 1.655 /a I Krueng Jrene and Krueng Bara Irrigation (Aceh): a - Feasibility Studies 1971/72 0.250 /a - Detailed Design and Supervision of Construction 1977/78 2.687 /a Bali Island Water Resources Development (Bali) 1972/73 0.125 /a Madura Island Water Resources Development (E. Java) 1972/73 0.375 /a Hydrological and Hydrometeorological Network (Lampung) 1972/73 0.302 /b Kali Progo Irrigation Project (Yogjakarta) 1972/73 1.305 /b Water Resources Planning Consultancy (Jakarta) 1972/73 n.a. Strengthening of Design Unit in Provincial Public Works (E. Java) 1973/74 0.345 /a Strengthening of Design Unit in Provincial Public Works (North Sumatera) 1974/75 0.650 /a

/a Estimated by DGWRD.

/b Estimated by mission.

I-.tTl na a (D > M' Foreign Government Name of Project Year Value ($ million)

Water Resources Development Study (Lampung) 1974/75 1.000 /a Groundwater Survey (East Java) 1975/76 0.500 /a Airphoto Interpretation Course 1975/76 0.018 /a Strengthening of Design Unit in Provincial Public Works and Arau and Kuranji River Flood Control 1976/77 0.875 /a Sediment Transport Investigation in the Brantas River (E. Java) 1976/77 0.018 /a Gunung Kidul Groundwater Project (Yogyakarta) 1976/77 0.550 /a Gambarsari Drainage Surveys and Reclamation Studies of Coastal Areas (Central Java) 1976/77 n.a. Strengthening of Design Unit of Provincial Public Works (Bali) 1976/77 0.500 /a Assistance to Institute of Hydrologic Engineering (Bandung): - Hydrologic Training 1977/78 0.230 1 - Supply of Calibration Equipment 1977/78 0.060 Operation and Maintenance Equipment (E. Java) 1977/78

D. Netherlands Jratunseluna River Basin Study (C. Java) 1969/70 2.350 Cimanuk River Basin Development (W. Java) 1970/71 n.a. Jakarta Drainage and Flood Control (Jakarta) 1970/71 1.536 /b North Luwu Plain (S. Sulawesi) 1970/71 0.054 lb Detailed Design of Luwu Irrigation Project (S. Sulawesi) 1973/74 2.269 lb Rawa Pening Improvement Feasibility Study (C. Java) 1973/74 0.269 Tb Serang River Flood Diversion and Juana Drainage (C. Java) 1974/75 0.746 /b Hydraulic and Hydrological Studies and Equipment for Tidal Swamp Reclamation 1976/77 1.200 /b

/a Estimated by DGWRD.

/b Estimated by mission.

X F3

WD > ,DX Foreign Government Name of Project Year Value ($ million)

E. Canada Lombok Water Resources Development (Nusatengara) 1971/72 2.000 Timor Island Water Resources Development (Timor) 1974/75 2.600

F. France Cimanuk River Basin Development (W. Java) 1969/70 n.a.

G. West Germany Anai Delta Irrigation Pre-Feasibility Study (W. Sumatera) 1970/71 n.a.

H. Switzerland Sumani Pumping System Irrigation (W. Sumatera) 1977/78 0.830 /a

I. Australia Serayu River Basin Development (C. Java) 1971/72 Singomerto Weir (C. Java) 1975/76 1.030 /a l West Kalimantan Water Resources Development Study - (W. Kalimantan) 1976/77 0.335 /a C

/a Estimated by DGWRD.

Source: Directorate General of Water Resources Development.

000 F I-' PPz oo LOW - 71 -

ANNEX 3 Table 3

INDONESIA

IRRIGATION PROGRAM REVIEW

Project Loans Negotiated for Irrigation and Water Resources Development by Major Source /a

Asian World Development Year Bank /b UN Bank USA Japan UK Netherlands Canada France ------($ million) ------…------

1968 0.2 - - - 3.4 - - _ _ 1969 5.0 - 1.0 - 4.7 - 2.8 - - 1970 33.0 - - - 6.8 - - - - 1971 1.1 - 2.7 - 4.6 - - - - 1972 12.5 - 15.1 0.7 0.2 - - - - 1973 - - - - 2.2 1.4 - - - 1974 30.0 - - - 5.1 1.5 1.5 - - 1975 65.0 - 15.2 40.4 20.1 3.3 - - 2.1 1976 33.0 - - 14.3 19.1 - 9.1 9.2 - 1977 98.0 - 20.5 - 38.3 - 3.7 - 0.5

Total 277.8 - 54.5 55.4 104.5 6.2 17.1 9.2 2.6

/a Refers to total negotiated during year; it does not represent amount disbursed in each year. Discrepancies between data in this table and detailed data in Table 1 are due to rounding. Amounts in current prices.

/b Two irrigation loans totalling $171 million were negotiated by World Bank in 1978. - 72 - ANNEX 4 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Bank Group Lending for Irrigation Development

Summary of Bank Group Activities

1. Bank Group lending for irrigation development in Indonesia started with an IDA credit of $5.0 million in March 1969. Since that time ten more projects have been financed, four credits and six loans. The most recent estimates of the cost of all Bank Group-assisted projects in terms of end- 1977-prices and including contingencies (see Table 2) is about $1200 million, with Bank credits/loans amounting to $447.5 million. Table 1 provides a summary of the status of each project while Table 2 gives a summary of the most recent cost estimates for all projects together with information regarding their main components.

2. The areas covered by the Bank-assisted projects are indicated in Table 3. The Bank's early activities concentrated on rehabilitation of primary and secondary irrigation canals since this type of development was expected to generate rapid benefits, high economic returns and utilized the existing engineering and managerial expertise in the Directorate General of Water Resources (DGWRD). In 1975 the Bank reviewed its lending activities for irrigation projects /1 and inter alia concluded that greater emphasis needed to be given to the rehabilitation of tertiary canals since these systems were not being constructed by farmers as had been assumed when the early credits for the rehabilitation of primary and secondary canals had been negotiated. At the same time the Bank also commenced lending for new development of irrigation systems as well as continuing its lending for rehabilitation.

Progress and Impact of the Bank-Assisted Irrigation Projects

3. It is not the purpose of this review to examine the progress and impact of each Bank project in detail, that is done in the course of regular supervision missions and the project completion reports as they become due. However, some general comments are appropriate here, some of which will bring out a number of problems and issues which have been the subject of intense debate within the Bank recently.

4. The project completion report for Credit 127-IND summarized engineering accomplishments, institutional benefits and the agricultural and economic impact of the project. It was noted that engineering standards

/1 See Irrigation Program Survey, Report No. 705-IND, April 15, 1975. - 73 - ANNEX 4 Page 2

have improved with consequent advances in cost effectiveness, serviceability, simplicity and endurance of irrigation structures. These improvements have been evident in the execution of subsequent projects.

5. The establishment of PROSIDA /1 as the executing unit for the early Bank projects contributed greatly to the management efficiency of all Bank- assisted projects. The scope of PROSIDA's activities is reflected in its current program which includes responsibility for execution of the bulk of Bank-assisted projects. In the future, other Directorates in the DGWRD will become more involved in the planning and execution of Bank-assisted projects and it is possible that PROSIDA will gradually be absorbed into the operating structure of the DGWRD. The gradual phasing out of PROSIDA as a separate entity will be evidence of its success in providing a training ground for DGWRD personnel (see discussion of PROSIDA in Annex 7).

6. Out of approximately 1,500,000 ha of technical irrigation systems in Indonesia, all of which required rehabilitation in 1968, about 1.1 million ha have been included under the nine Bank Group projects approved to date (see Table 3). Another 91,000 ha requiring rehabilitation will be included under Irrigation X and XI. The balance of about 300,000 ha have been or will be rehabilitated by the GOI with the-aid of loans from the Asian Development Bank (ADB) and bilateral aid assistance. Because much of the rehabilitation work was limited to the most urgent works, many of the systems could benefit from further upgrading. Aside from additional construction of tertiary canals (about 450,000 ha will be provided with tertiary canals under the first 11 Bank projects), most existing systems need further drainage, feeder roads and flood protection. Increased water supply in the dry season through the construction of storage dams is another area for possible future Bank involvement. Another related activity is watershed management. Many of the systems rehabilitated by the Bank have suffered from serious siltation problems and while rehabilitation has helped to remove the problem, it did not cure it. The long-term solution is watershed management, and the Indonesia General Agriculture Division (AEPIA) is presently preappraising such a project in Java.

7. The appraisal reports for Bank Group-assisted projects indicate that, when all development is complete and the assumptions concerning supporting services and productivity have been satisfied, these projects will result in an increase of about two million tons of rice p.a. in about 1990 (see Table 4). In addition, significant increases will occur in the production of secondary crops such as soyabean, corn, ground nuts, and vegetables. All the increased production from irrigation projects cannot be ascribed to water supplies alone since the availability of water needs to be associated with improved inputs (HYV seed, fertilizers) and better management practices (extension). It is the joint application of all these factors of production that makes an irrigation project achieve its full potential. This issue is taken up at greater length in para. 12 below.

/1 PROSIDA is the acronym for "Proyek Irigasi IDA." - 74 - ANNEX 4 Page 3

8. The contribution of Bank-assisted projects to Indonesian paddy production is reflected in the estimates in Table 5. The relative impact of the ongoing Bank-assisted projects rises rapidly to the mid-1980s when they are estimated to contribute about 20% to total rice production. The extent to which this will be the case obviously depends heavily on all the assumptions embodied in the calculations, however,,there can be little doubt about the increasing and significant impact of the Bank-assisted projects in total rice production. Major reasons why this impact may be delayed are a lag in construction of primary, secondary and .in particular tertiary systems, inadequate supporting services and unexpected damage by pests and disease.

9. The nine ongoing Bank-assisted irrigation projects are estimated to improve the income of-some 1.6 million-farm families and increase the work opportunitie's for at least another 0.5 million landless laborer families. Furthermore, these projects are also expected to result in a substantial improvement in the supply of water in villages for purposes other than irrigation.

Problems of Implementation

(a) Cost Overruns, Construction Delays and Quality of Work

10. In the earlier Bank-assisted projects cost overruns caused by inadequacies in preparation and design, together with unexpectedly high rates of inflation resulted in substantial cost overruns. For example, the project completion.report for Credit 127-IND notes a cost overrun of 250% between the estimated cost at appraisal (March 1968) of $8.8 million and the cost estimate following a detailed. assessment (April 1970) by.a consultant of $31.1.million. Subsequently, project costs were raised again to $54.3 million as shown in Table 1 of this annex. That table also shows that many of the Bank' s other projects have cost more to construct, than the appraisal estimates. On average the cost overrun for the first five credits has been 165%. To a large extent these overruns were due to the exceptionally high inflation rates in Indonesia during 1971-1975, together with Government decisions after appraisal to expand the scope of some works.

11. Delays in construction, particularly in early projects, have occurred due to a number of factors. The most common reasons were delays in the:engagement of consultants, time-consuming paperwork and delays in receiving budget supplements required to make up cost-overruns. There were also deficiencies in the quality of construction in early projects due to the lack of trained personnel. While these deficiencies were eventually rectified, they-created significant problems and delays during construction. At present much,greater attention is being given to forward planning, particularly the letting,of tenders.

(b) Operation and Maintenance

12. The quality and funding of operation and maintenance activities were inadequate for many of the Bank projects in earlier years. Again, while more attention has been given to the quality and financing of O&M - 75 -

ANNEX 4 Page 4

activities in recent years, it was not until the Bank placed considerable pressure on the Government that this issue was resolved. At present O&M funds are allocated to various subprojects at levels agreed by the Bank and at least half of these funds are released by mid-August each year.

13. Perhaps the most serious problem faced by the Bank's projects is that while the water distribution facilities in many project areas have been constructed and are operating efficiently, the supply of inputs and associated services for example (agricultural extension services, credit and marketing facilities) have not kept pace with the engineering activity. This situation was recognized some years ago and highlighted in the Bank's Irrigation Program Survey in 1975. Since that time efforts have been made to stimulate action by the GOI to improve the situation. The Bank launched agricultural research and extension projects in 1976, and it had already initiated a seeds project in 1971. The results from the seeds project, while so disappointing early, are expected to have a substantial impact in the next few years. The extension project has not yet fully matured, but progress so far is encouraging. Fertilizer projects were negotiated in 1971, 1973, 1975, and 1976 and these have led to a substantial improvement in the availability of nitrogenous fertilizer to farmers.

14. The whole question of supporting services is examined in a separate Bank report (A Review of the Support Services for Food Crop Production). The recommendations in that report, which cover credit, fertilizer marketing and pricing, rice prices, the role of cooperatives, research and pest control, have been discussed with the Government. Action has been taken to engage consultants to study the pest problems in rice and make recommendations on control measures, prepare a second research project for Bank financing, and to draft terms of reference for the preparation of a second seeds project.

Major Issues Associated with the Bank's Irrigation Lending Program

(a) Incremental Benefits from Rehabilitation

15. While it was noted in paragraph 1.03 (of the main report) that this report is not aimed at a review of Bank-assisted projects, there are two current issues which should be mentioned because they have become the subject of controversial debate within the Bank.

16. The preparation by the Bank's Irrigation Division (East Asia Pacific Region) of the project completion report for Credit 127-IND (PCR 127-IND) and the audit of that report by the Operations Evaluation Department (OED) in a Project Performance Audit Report (PPAR) has given rise to an intense debate on a number of matters. One of these is the magnitude of benefits due to the rehabilitation of irrigation projects. The heart of the controversy is whether wet-season yields in areas where irrigation systems had been rehabilitated using Bank financial assistance are greater after rehabilitation than they would have been without rehabilitation. - 76 -

ANNEX 4 Page 5

17. The PCR position was that the joint effects of rehabilitated irrigation facilities and improved input, credit and extension packages led to increased wet-season yields as well as increased dry-season area and yield. Because the provision of a better water supply is a precursor to the use of improved inputs and services it is impossible to assign project benefits accurately to either rehabilitation or inputs and services. Nevertheless the PCR drew the conclusion, as had the appraisal report, that improved water delivery and distribution in the project area, together with some improvement in supporting services, improved yields in the wet season.

18. The OED in its PPAR assessed this reasoning and concluded that wet- season yield increases in the project areas would have been realized without rehabilitation since climatic records indicated that in recent years paddy fields in those areas would have had adequate water for rice production throughout the wet season and that therefore other factors such as improved inputs and services were the dominant determinants of increased wet season yields. OED suggested that less than half of the yield improvement could be attributed to rehabilitation. The PPAR states that the PCR has implicitly assumed yield increases due to rehabilitation are greater than 50% of the total yield increase.

19. While this issue may never be resolved to the satisfaction of all parties, it is a basic fact that the available hydrological data show that crop water requirements during periods such as two weeks and a month within the wet-season growing period are greater than the amount available from rainfall. Rehabilitated irrigation systems are justified on the basis that they will make up the shortfall between water requirements and supplies and consequently increase yields above levels achieved without rehabilitation. The fact that yield improvements are not occurring as rapidly as had been hoped is not evidence of the failure of rehabilitation but rather, as pointed out in para. 13, the slower than expected build up of supporting services.

(b) The Justification for the Construction of Tertiary Distribution Systems

20. The first four IDA credits for irrigation in Indonesia included no funds for the construction or rehabilitaiton of works beyond the tertiary terminal, except for the first 50 meters of all tertiary canals and scattered pilot tertiary demonstration units. The Government opposed using public funds for tertiary canals, asserting that farmers had always and should continue to construct these themselves under gotong royong or other group schemes organized by the local administration and water authorities. The Bank contested the GOI position from the beginning, but the Government's view prevailed. In 1974, the Bank reviewed its irrigation projects in Indonesia (Irrigation Program Survey) and, amongst other things, pointed out that farmers were not building or repairing the tertiary systems as originally envisaged. This observation had indeed already been made in earlier supervision reports. Following further Bank pressure the Government agreed that future projects should include components for tertiary development where appropriate. The impact of that decision on the nature of the Bank's lending program for irrigation can be seen in Table 1 of this Annex. - 77 -

ANNEX 4 Page 6

21. The justification for the Bank's continuing involvement in the financing of tertiary development has been questioned by OED in its PPAR of Credit 127-IND. While admitting to the inadequacy of basic data, OED has argued that farmers have not constructed tertiary systems themselves because of sociological and financial factors. OED has concluded that these factors are of such importance that the Bank should understand and act on them before proceeding further with tertiary development.

22. It is the mission's view that the question of the justification of tertiary construction support by the GOI and indirectly by the Bank is a matter which can only be argued on a case by case basis. There are some circumstances in which farmers already have or will rehabilitate or construct tertiaries and other circumstances where they will not. In the latter situations factors such as the difficulty of the terrain and the resultant uncertainty of farmers concerning the most appropriate design, the poverty of farmers and hence their lack of finance and/or free time to build tertiaries, the unwillingness of some farmers to grant rights of way, and finally the lack of organizational support from Government required to mobilize village labor on the scale necessary, all contributed to the nonconstruction of tertiaries in some areas.

23. The cumulative disbursement pattern for the 11 ongoing Bank Group- assisted irrigation projects is shown in Figure 2.2. Although actual disbursements in the early years lagged behind expectations, the rate of disbursements is now approaching appraisal estimates even though the absolute amounts disbursed still fall short of the targets by about 20%. As shown in Figure 2.2. it is projected that this gap will be gradually closed./l It is also apparent that the annual rate of disbursements will need to increase substantially if the projects are to be completed according to the projected time- table. For example, whereas the annual disbursements for irrigation projects between 1969 and 1978 totalled about $10 million p.a., the average annual total disbursement over the next seven years for ongoing projects will need to rise to about $50 million to achieve the disbursement projections. If projected additional projects are added this figure is likely to rise to between $100 and $150 million p.a.

(d) Relative Importance of Bank Group-Assisted Project in the Total DGWRD Budget

24. The actual and expected Bank disbursements for ongoing Bank-assisted irrigation projects in Indonesia are summarized in Table 6. With the exception of 1976/77 there has been a slow rise in disbursements. This rise should accele- rate in the near future (see Figure 2.2) making necessary a corresponding increase in the allocation of the DGWRD budget to Bank-assisted projects. When the total costs of likely future projects are added to the funds which need to be set

/1 Perhaps it should be noted that the rate of disbursement of loan funds is not always a reliable indicator of the success of a project. Delays in disbursement may merely reflect administrative delays. - 78 -

ANNEX 4 Page 7

aside for ongoing projects the total annual funding required for Bank-assisted irrigation projects could become as high as $250 million (see Annex 12, Table 2). It is difficult at this stage to predict the growth in the DGWRD budget, but on the basis that it increases by 10% p.a. a commitment of such a magnitude would result in Bank-assisted projects accounting for about 30% of the total budget within the next five years. Whether the GOI will allow such a situation to arise is not clear. What is clear is that if Bank Group-assisted projects continue to be implemented and financed at the rate projected, then they will rapidly become an increasingly dominant part of DGWRD operations. INDONESIA

IRRIGATION PROGRAM REVIEW

Bank Group Lending Program for Irrigation

Total project cost estimate Economic Amount Disbursements Credit Loan - Date of rate of Credit/loan Credit Loan 10/13/78 Appraisal Current/a Appraisal CurrentLa effectiveness return Status -…-…-- …------(US$ million) ------(%)/b

Cr. 127 5.0 5.0 8.8 54.3 3/25/69 51 Completed

Cr. 195 18.5 18.5 36.3 91.4 12/31/70 29 Essentially completed

Cr. 220 14.5 14.3 29.1 72.0 5/28/71 25

Cr. 289 12.5 12.1 23.4 58.0 5/05/72 39

Cr. 514 30.0 6.9 68.0 162.0 1/10/75 42 Major construction started mid-1977

Ln. 1100 65.0 14.2 165.0 229.0 6/20/75 30

Ln. 1268 33.0 9.5 60.0 62.0 9/21/76 30 " " late-1977

Ln. 1434 63.0 1.6 118.0 118.0 7/07/77 16

Ln. 1435 35.0 3.7 64.0 64.0 7/07/77 17

Ln. 1578 140.0 0.3 216.0 216.0- 8/16/78 14 Loan signed in June 1978.

Ln. 1579 31.0 - 47.4 47.4 8/16/78 12 Loan signed in June 1978.

Total 80.5 367.0 86.1 165.6 437.4 670.4 736.4

/a As at date of latest Bank Supervision Reports mainly dated in 1978. /b Rates of return as assessed at appraisal.- n.a. - not available.

Note - Major increases in project costs following appraisal have been associated with the first five credits and can be mainly attributed to exceptionally high inflation rates in Indonesia during 1971-75, and GOI decisions following appraisal to expand the magnitude of the work contemplated. - - Credits and loans for irrigation in this table are frequently referred to as Irrigation Projects I to XI.

-a 4 - 80 - ANNEX 4 Table 2

INDONESIA

IRRIGATION PROGRAM REVIEW

Most Recent Cost Estimates for Bank-assisted Irrigation Projects /a (US$ million)

Credit/Loan Number 127 195 220 289 514 1100 1268 1434 1435 1578 1579

Civil works /b 32.1 69.0 46.2 34.0 95.9 126.6 -20.8 49.6 27.7 95.2 19.3 Land acquisition - 5.3 1.4 0.4 6.6 3.4 3.5 2.6 1.9 3.4 1.5 +quipment, vehicles /c 7.2 1.9 4.7 5.0 1.9 2.4 1.1 4.7 2.7 2.8 2.8 O&M during construction 3.2 - 2.6 1.3 1.5 8.9 0.6 - - - - Administration & overhead /d 9.2 9.6 9.7 6.6 10.7 16.1 0.8 4.3 1.5 9.9 1.8 Consultants /e 2.3 2.8 2.5 3.8 2.8 5.5 12.5 9.4 8.9 14.8 5.3 Miscellaneous /f - 0.4 0.9 2.7 3.2 8.4 2.1 5.9 1.4 4.9 0.6 Base cost 54.0 89.0 68.0 53.8 122.6 171.3 41.4 76.5 44.1 131.0 31.3 Physical contingencies - - 1.5 1.6 10.3 14.7 7.8 17.2 8.7 29.8 6.6 Price contingencies - 2.4 2.5 2.6 29.1 43.0 11.8 24.3 11.2 55.2 9.5 Total 54.0 91.4 72.0 58.0 162.0 229.0 62.0 118.0 64.0 216.0 47.4 Credit'(actual) 5.0 18.5 14.5 12.5 30.0 Loan (actual) 65.0 33.0 63.0 35.0 140.0 31.0

/a Credit/Loan Date and Sources of Information

127 Actual expenditures. Project Completion Report (June 1977). 195, 220 October 1977 estimate. Supervision Report (December 1977). 289 October 1977 estimate. Supervision Report (December 1977). 514 October 1977 estimate. Supervision Report (December 1977). 1100 October 1977 estimate. Supervision Report (December 1977). 1268 October 1977 estimate. Supervision Report (December 1977). 1434 End-1977 estimate. Appraisal of Irrigation VIII (May 1977). 1435 End-1977 estimate. Appraisal of Irrigation IX (May 1977). 1578 Appraisal estimate May 1978 1579 Appraisal estimate May 1978

/b In addition to all structures, includes civil works tax, pilot on-farm developments, and communications (only for Credit 195 and for 1100, Sampean Baru subproject - elsewhere communication costs are linked under "miscellaneous").

/c Includes equipment for construction and O&M purposes, where listed; also includes audiovisual equipment for Irrigation IX subproject IV.

/d Administration and overhead: includes "management" and "supervision" costs, but not consultants or vehicles or buildings.

/e Consultants: always listed explicitly in supervision reports and appraisal. Does not include training or technical assistance, which fall under "miscellaneous."

/f Miscellaneous: Composed of the following items:

Credit/ Loan Items Included in Miscellaneous

195 Feasibility studies. 220 Survey and design. 289 PROSIDA mapping and drilling, and training and overhead (for groundwater pilot); feasibility studies (Sampean Baru, Cirebon-Cimanuk). 514 Agricultural extension services, specialists and training, "unallocated." (Jatiluhur). 1100 Training (PROSIDA); feasibility projects, soil erosion problems, groundwater investigation, training and study tours, technical assistance, monitoring systems for rehabilitation projects, mapping (Subproject IV). 1268 Studies of detailed engineering; associated works by P3SA; training; telephone communications for PROSIDA. 1434 Telecommunications; training (Madiun Groundwater Pilot Project); mapping. 1435 Mapping, telecommunications. 1578 Mapping and survey, training, soil surveys and field investigations. 1579 Training, field investigations.

Source: Various Bank appraisal, supervision and completion reports. - 81 - ANNEX 4 Table 3

INDONESIA

IRRIGATION PROGRAM REVIEW

Appraisal Estimates of Areas Associated with Bank Group Irrigation Projects

Rehabilitation, Reclamation and Drainage New Development Primary and Tertiary Primary and Tertiary Credit/Loan secondary canals canals secondary canals canals …------(ha) -…------

Credit 127 /a 174,700 Credit 195 186,000 Credit 220 200,000 Credit 289 229,100 Credit 514 55,000 /b 56,000 /c Loan 1100 122,000 7d 179,000 /e 9,800 9,800 Loan 1268 100,000 /f 6,000 Loan 1434 80,700 30,000 2,800 /g Loan 1435 27,000- 3,500 17,000 Loan 1578 87,900 29,000 36,900 37,700 Loan 1579 - - 7,600 7,600

Total 1,162,400 394,000 66,600 47,980

/a Taken from the Project Completion Report.

/b Includes 4,000 ha reclamation of uninhabited swamp.

/c Includes 5,000 ha pilot tertiary plots in this project and first four rehabilitation projects.

/d Includes 33,000 ha of drainage works in Rentang scheme which was not included in Credit 127-IND.

/e Includes 90,000 ha in Rentang, 89,000 ha in Cirebon.

/f This tertiary development is planned for 100,000 ha in irrigation systems being rehabilitated under Credits 195, 220 and 289-IND.

] Groundwater development in three pilot areas. INDONESIA

IRRIGATION PROGRAM4REVIEW

Estimated Impact of Bank Irrigation Projects on Harvested Area and Paddv Rice Production /a

Year Year Project area /c Cropping intensity Harvested area Credit/ Increase Paddy yield /d Increase Paddy Production Increase Major type of construction of full Without With Without With Without Loan No. With in area Without With In paddy Without With in development completed development project project project project project paddy project harvested project project yield projert I. project production Wet/Dry Wet/Dry Wet/Dry (ha) -- - -(ha) ------(ton/ha) ------(ton) ------…______

Cr. 127 Rehabilitation 1977 1985 153,500 174,700 120 151 183,400 264,200 80,800 2.1/1.7 4.0/3.4 Cr. 195 Rehabilitation 1979 1985 1.9/1.7 490,910 1,177,850 686,940 186,000 186,000 158 200 294,000 372,000 78,000 2.4/1.6 4.0/3.2 Cr. 200 Rehabilitation 1979 1985 189,600 1.6/1.6 686,000 1,329,000 643,000 189,600 120 137 228,100 259,100 31,000 2.0/1.6 3.8t3.8 1.8/1.6 Cr. 289 Rehabilitation 1979 1985 211,600 457,000 973,600 516,600 211,600 140 140 297,300 297,300 - 2.6/2.5 3.9/3.8 1.3/1.3 Cr. 514 Rehabilitation 1982 893,300 1,151,700 258,400 1988 47,000 51,000 125 179 58,600 91,100 32,500 Ln. 1100 Rehabilitation 1985 2.0/1.2 4.0/4.5 2.0/3.3 110,700 363,300 252,600 1991 173,000 180,500 120 120 208,000 217,000 9,000 New development 3.0/2.8 4.5/4.2 1.5/1.4 565,600 919,000 353,400 2,000 7,500 100 100 2,000 7,500 5,500 Ln. 1268 Rehabilitation 1982 1988 1.5/ - 4.0/ - 2.5/ - 3,000 30,000 27,000 100,000 100,000 145 145 145,000 145,000 - 2.8/3.0 4.2/4.5 New development 1.4/1.3 517,000 619,500 102,500 5,800 5,800 126 190 7,300 11,000 Ln. 1434 Rehabilitation 1982 3,700 1.8/2.0 3.8/3.8 2.0/1.8 14,580 41,800 27,200 1988 71,400 71,400 123 125 87,750 89,200 1,450 New development 3.0/2.5 4.2/3.8 1.2/1.3 250,600 364,000 113,400 2,800 2,800 114 150 3,200 4,200 1,000 4.2/2.6 Ln. 1435 Rehabilitation 1981 4.2/4.2 - /1.6 12,100 17,700 5,600 1987 30,000 30,000 122 135 36,600 40,500 3,900 3.4/3.6 New development 4.3/4.3 0.9/0.7 99,860 155,250 55,390 1,500 3,500 100 200 1,500 7,000 5,500 1.8/ - Ln. 1578 Rehabilitation 1984 3.7/3.7 1.9/3.7 2,700 25,900 23,200 1990 79,400 79,400 128 143 102,000 113,400 11,400 Nev development 3.0/4.0 4.2/4.2 1.2/0.2 350,560 489,510 138,950 25,000 36,900 100 109 25,000 40.400 Ln. 1579 Rehabilitation 1982 15,400 2.0/ - 4.2/4.2 2.2/4.2 29,600 181,800 152,200 1988 ------New - - - - - development 7,600 7,600 113 126 8,600 9,600 1,000 2.9/1.8 4.2/4.2 1.3/3.4 22,000 40,300 18,300 Total Rehabilitation 1,241,500 1,274,200 - - 1,640,750 1,888,800 New 248,050 4,421,530 7,542,710 3,121,180 development 44,700 64,100 - - 47,600 79,700 32,100 83,980 337,500 253,520 Total 4,505,510 7,880,210 3,374.700

/a Estimates based on appraisal reports except for Credit 127 for which information was taken from the Project Completion Report. The paddy production assume estimates for future the availability and application of adequate support services including credit. The increased the result of improved production is therefore not only water supplies. All yield and production figures in terms of rough paddy ("paddy gabah"). /b Taken from infornation in latest supervision reports.

/c These areas do not always coincide with the area shown on Table 3 because part of the project area is ued for crops other than rice. In some cases small additional areas have been incorporated as parc of rehabilitation projects. Project areas identified for new development may have been growing rice or other crops prior to development. rainfed

/d Figures in these columns refer to yields for high-yielding varieties in wet and dry seasons. Some figures are averages is involved. when more than one project area

Le The appraisal reports for Credit 195, 220 and Loan 1100 do not show an estimated future paddy production without the project. For the purposes of these calculations, a 1% growth rate of production without the project was assumed. INDONESIA

IRRIGATION PROGRAM REVIEW

Estimated Impact of Bank Irrigation Projects on Paddy and Rice Production Over Time - Increased Production /a ('000 tons)

Total increase in paddy Credit/Loan No. production 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990

Cr. 127 686,940 137,400 274,800 412,200 549,600 686,940 686,940 686,940 686,940 686,940 686,940 686,940 686,940 686,940 Cr. 195 643,000 - - 128,600 257,200 385,800 514,400 643,000 643,000 643,000 643,000 643,000 643,000 643,000 Cr. 220 516,600 - - 103,320 206,640 309,960 413,280 516,600 516,600 516,600 516,600 516,600 516,600 516,600 Cr. 289 258,400 - - 51,680 103,360 155,040 206,720 258,400 258,400 258,400 258,400 258,400 258,400 258,400 Cr. 514 252,600 - - - - - 50,520 101,040 151,560 202,080 252,600 252,600 252,600 252,600 X Ln. 1100 380,400 ------76,080 152,160 228,240 304,320 380 400 Ln. 1268 129,720 - - - - - 25,940 51,890 77,850 103,780 129,720 129,720 129,720 129,720 Ln. 1434 119,000 - - - - - 23,800 47,600 71,400 95,200 119,000 119,000 119,000 119,000 Ln. 1435 78,590 - - - - 15,720 31,440 47,150 62,870 78,590 78,590 78,500 78,500 78,500 Ln. 1578 291,150 ------58,230 116,460 174,690 232,920 291,150 291,150 Ln. 1579 18,300 - - - - 3,660 7,320 10.980 14,640 18,300 18,300 18,300 18,300 18,300

Total paddy 3,374,700 137,400 274,800 695,800 1.116,800 1,557,120 1,960,360 2,363,600 2,541,490 2,795,430 3,030,000 3,164,310 3,298,620 3,374,700

Total rice /b 1,931,110 86,560 173,120 438,350 703,580 980,990 1,235,030 1,489,070 1,601,140 1,761,120 1,908,900 1,993,520 2,078,130 2,126,060

/a These estimates are based on Table 4 adopting the development period assumed in the various appraisal reports. Adjustments have been made where possible to allow for implementation delays. It is assumed that incremental production accrues at completion of construction. To the extent that increased production is possible before construction is completed the rate of build up in increased production is understated.

/b Assuming 63% milling percentage.

OD - 84 -

ANNEX 4 Table 6

INDONESIA

IRRIGATION PROGRAM REVIEW

Comparison Between DGWRD Budget, DGWRD Expenditure on Bank Projects and Bank Disbursements

Total DGWRD Total DGWRD expenditure on Fiscal Year /a budget /b Bank-assisted projects tc Bank disbursements /d ($ million) ($ million) (Z of budget) ($ million) (% of budget)

1974/75 107 n.a. n.a. 11.8 11.0

1975/76 359 n.a. n.a. 12.5 3.5

1976/77 289 n.a. n.a. 7.5 2.6

1977/78 424 68 16 11.2 2.6

1978/79/c 520 220 42 18.8 3.6

/a For fiscal year ending March 31.

/b Actual annual budgets for 1974/75 to 1978/79 inclusive (see Table 2.4).

/c Estimated by Bank.

/d Actual disbursements for 1974/75 to 1977/78. Disbursements commencing 1978/79 estimated by Bank and assumes DGWRD budget for Bank projects is available. -85 - ANNEX 5 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Operation and Maintenance of Irrigation Systems

1. Irrigation development in Indonesia is the responsibility of either the national or communal authorities. The national system is the joint responsibility of the Government and the local community. The Government is responsible for the main system (primary and secondary), and the local community for the terminal (tertiary and quaternary) system. These systems usually command a large area and many were constructed in the colonial period. As explained elsewhere in this report (see Annex 2), there are three main types of national system. If a measuring device is placed only at the intake point, the system is defined as "semi-technical;" a system with measuring devices at all turnouts down to the tertiary level is defined as "technical;" and a "simple" system is one with no measurement devices.

2. In communal systems, the construction and management of the irrigation systems are the responsibility of the local community, although the government would still render its assistance with the preparation of plans and design, with heavy earthwork and large structures. These systems normally have a relatively small command area and have a wide range of physical structures and organizational arrangements. The respective areas under national and communal systems are in the approximate ratio of three to one.

Administration of Operation and Maintenance

3. In this report, "operation" refers to the allocation of irrigation water supplies and the handling of drainage runoff, whilst "maintenance" encompasses the upkeep of irrigation and drainage structures and embankments, and the removal of silt and vegetation from irrigation canals and the upkeep and weeding of drainage channels. There are certain basic distinctions between the two activities, although considerable coordination between operation and maintenance is essential in order to ensure the smooth functioning of each. Operation is normally an everyday activity which involves not only operations personnel, but also the farmers, whilst maintenance normally takes place periodically and, although desirable, need not directly involve the farmers.

4. The Provincial Public Works Service is responsible for the maintenance of all irrigation structures, the actual maintenance work being undertaken through its offices at the Public Works "Seksi" level. The Seksi is also responsible for the distribution and management of irrigation water throughout the main and secondary canal systems. At the village level, when the water is in the tertiary canals, it is the responsibility of farmers although the responsibility is usually delegated to the village head ("lurah") who in turn is assisted by a village water master ("ulu-ulu"). The "lurah", who is normally an influential person is usually chosen by popular election every five years. He is remunerated by the village through allotment of agricultural land from the common village land ("bengkok" land). - 86 - ANNEX 5 Page 2

5. Water distribution in an irrigation area within a district or "Kabupaten" is coordinated by a District Irrigation Committee, under the chairmanship of the Kabupaten Chief ("Bupati"). It consists of officials from the Provincial Public Works Service, the Agricultural Service and other agencies concerned (see Figure 2.1). This coordination is delegated to the subsdistrict ("kecamatan") level and influenced by the prevailing cropping pattern, which differs according to the season, and the availability of water. The village water master, who is elected by the farmers and who traditionally has different names in different regions, e.g., "Ulu-ulu" in Central and East Java, "Ili-ili" in West Java, "Sedahan" in Bali, "Raja Bandar" in North Sumatera and "Tuo Bando" in Central Sumatera, is responsible for the equitable distribution of the water within the tertiary block. The ulu-ulu is the head of the farm-level irrigation organization, and in Java generally is also allotted land from the "Bengkok." In some areas, an organization called "Dharma Tirta" assists the ulu-ulu in carrying out the work of water management. "Dharma Tirta" means "devotion to irrigation work" - it is the rural irrigation unit. The traditional organization of a "Dharma Tirta" is shown in Figure 4.15 and is discussed in Appendix A of this Annex. The ulu-ulu has several assistant ulu-ulu, each controlling an area of about 10 ha. The task of the assistant ulu-ulu is to distribute water in his area and to supervise the work of member farmers. He is chosen from among the farmer members and is paid for his services in various ways. He may receive an allocation of "bengkok" land from the lurah, he may be paid in cash or in terms of agricultural output or in labor. The magnitude of these payments varies between districts.

6. There is no doubt that there are considerable inadequacies in the operation of systems at the tertiary level. Most of these arise from the fact that a very large element of voluntary "service" on the part of the farmers is called for. There are also other factors involved, not the least of which is the urge to survive in an increasingly difficult economic situation. The main problems that paddy farmers have, in greater or lesser measure, may be summarized as follows:

(a) Difficulty in organizing themselves, particularly when farmers from more than one village are involved. This is associated with a shortage of qualified staff.

(b) Declining interest in "gotong royong" or organized self-help amongst villagers.

(c) Increasing commercialization in the rural sector, so that cash earning is becoming relatively more important, and there is a reluctance to donate labor.

(d) Land ownership by people outside the authority of the "lurah."

(e) Shortage of water in many areas makes water-sharing difficult to administer equitably.

(f) Difficulty in collecting fees to support the "Dharma Tirta" organization. - 87 - - 87 - ~~~~~ANNEX 5 Page 3

(g) Greater expectation of government assistance, as a result of promises of more equitable distribution of the national wealth that they have heard from time to time.

Specific Issues

7. The responsibility for and quality of water management at the village level varies and is at present under review by village authorities and the Ministry of Public Works. At the same time, the general standard of management and maintenance in national systems leaves much to be desired. Although most structures inspected by the mission in Java were in good physical condition, there were many signs of damage to canal banks through human and animal activity seeking access to canal waters. There was evidence that positive steps were being taken in various places to avoid further damage, by the construction of specially designed watering pools for animals and by providing stepladders for humans. However, much more needs to be done if these projects are not to deteriorate to the point of requiring to be rehabilitated in a few years' time. The single most serious problem noted was that of siltation. This must be tackled as a national problem as its seriousness cannot be overemphasized.

8. Siltation of irrigation canals arises mainly through deforestation in the watersheds of the rivers which supply water to the irrigation areas. This problem varies in severity from system to system, and in some areas has reached such serious proportions that silt is actually entering the paddy fields and gradually building up field levels. If unchecked, this process could eventually lead to the loss of command in such areas. A substantial proportion of maintenance funds has been allocated to countering the siltation problems. Silt removal by manual means downstream of such structures as are provided with silt-ejecting devices, and from canals, is much in evidence, and dredgers are at work in some primary systems. However, this is likely to be a losing battle unless positive measures are taken to get to the root of the problem, namely, the continued deforestation of catchments, and the lack of effective erosion control at the headwaters of the various streams and rivers which serve the irrigated areas.

9. The main constraints to the improvement of operation and maintenance standards on irrigation projects are the lack of sufficient funds and trained personnel, particularly at the lower levels. It is evident that there is a lack of motivation among O&M staff, who consider that maintenance work is not as "glamorous" as development work. There is also an attitude of "permissiveness" among irrigation officials who are often not sufficiently firm on matters of unsatisfactory maintenance and in dealing with problems arising in water allocation between competing irrigation communities. These attitudes can only be changed by more frequent and direct involvement of the most senior officials of the DGWRD in O&M work. The normal tendency is for top management to give priority to the planning, design and construction aspects of projects as these lend themselves to straightforward evaluation of success or failure, whereas the lack of good and proper maintenance is not readily evident since it often takes several years before its adverse effects become apparent.

10. There is clearly a need for the DGWRD to formulate and strictly follow a policy which could cover at least the following aspects: - 88 - ANNEX 5 Page 4

(a) a clear statement from the top that irrigation works and equipment are expected to be kept in continuous full working condition;

(b) priority in the selection, training and accelerated promotion of those officers who have a particular interest or talent in organizing and carrying out maintenance work;

(d) the establishment of periodic working sessions to discuss O&M problems as they arise;

(e) introduction of other incentives for higher standards of personal performance, punctuality and adherence to targets of performance;

(f) -institutional arrangements for the follow-up by headquarters on the implementation of the new policy; and

(g) appropriation of adequate funds for satisfactory maintenance.

11. Lack of regular maintenance of works leads to the continuous deterioration of irrigation systems below their design capacity. This in turn results in continuous failure to achieve agricultural production targets and economic benefits. Deferred maintenance of irrigation and drainage systems tends to accumulate to the stage where local resources could be overwhelmed and external assistance would then have to be sought again for "rehabilitation." It should be clearly recognized that most rehabilitation works that have been carried out with Bank Group assistance and otherwise are in fact a direct result of the accumulation of deferred maintenance. It is the mission's view that the Public Works Service should intensify its emphasis on improving O&M standards. This would, inter alia, ensure:

(a) maintenance of high levels of production;

(b) the realization among the Public Works staff involved of the importance of high standards of maintenance;

(d) a buildup in the villages of the expectation of a high level of performance by Public Works staff; and

(e) the development of better and more appropriate systems and organization to suit individual projects.

12. The costs of O&M are financed from three sources: the Central Government, the Provincial Government and through the village. The proportion coming from these sources varies between provinces and between villages. - 89 - ANNEX 5 Page 5

Funding of Operation and Maintenance

13. One of the reasons frequently given for poor operation and maintenance performance is the lack of funds; it is apparent that this constitutes a major component of the overall problem. However, further enquiry by the mission revealed that at the national level the financial problem often arises more through delays in obtaining the funds than through insufficient funds being provided in the annual budget for the purpose. The mission was assured that if funds provided by the Central Government for O&M purposes could be made available directly to the Provincial Public Works Office rather than through the Provincial Government (which then passes it down to the Provincial Public Works Office), much improvement could be realized. The delayed timing of fund releases has been the subject of comment by various missions in the past, but there is evidence from recent supervision reports for Bank Group-assisted projects that improvements are being achieved. It is understood that timeliness of funding is still an issue in other projects.

14. The volume of O&M funds provided by the Central Government has been increasing annually over the past three years, even though it has been agreed that O&M is the primary responsibility of the Provincial Government. For the year 1975/76 a total sum of Rp 5.736 billion was provided by the Central Government for O&M. This was increased to Rp 6.273 billion for 1976/77, and further increased to Rp 7.920 billion for 1977/78. More detailed data on the allocation of O&M funds to different projects show that Bank Group-assisted projects receive allocations which are much greater than other Public Works projects. For example, PROSIDA projects and the Jatiluhur project are budgeted at Rp 3,500 and Rp 4,200 per ha respectively in 1977/78. This compares with approvals for 1977/78 for all projects of about Rp 2,000 per ha. In addition, the Bank Group-assisted projects usually receive O&M funds on time. These differences are unfortunate and if they persist will probably mean that many other projects will fall due for rehabilitation sooner or later.

15. Funds from the Provincial Government are obtained through the IPEDA ("Iuran Pembangunan Daerah") tax which is collected from owners of land under Law No. ll/PRP/1959. Taxes are levied at the rate of 5% of the net value of production including a cost allowance for unpaid family labor. The allocation of the tax collected to irrigation varies throughout Indonesia. At the time this report was being prepared the DGWRD was having discussions with the Government with the aim of reaching agreement on the allocation of at least 30% of the IPEDA tax collections to operation and maintenance of the irrigation system. It is understood that the allocation at present is about 10%, although that figure would vary between provinces. This taxing arrangement at the Provincial level is instead of a formal water charge.

16. At the village level the funds for operation and maintenance, principally for the tertiary and quarternary system, come from a variety of payments and gratuities, discussed earlier in para. 5. There is a lack of uniformity and formality at the village level, a matter which could be rectified by the establishment of formal water user associations (see Annex 6). - 90 - ANNEX 5 Table 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Operation and Maintenance Allocation by Central Government for Public Works Irrigation Systems

Eligible Proposed Approved Year area Total Per ha Total Per ha (ha) (Rp '000) (Rp) (Rp '000) (Rp)

74/75 3,659,050 5,854,480 1,600 5,854,480 1,600

75/76 3,859,722 10,977,150 2,844 5,736,000 1,486

76/77 3,655,845 9,033,900 2,671 6,273,850 1,716

77/78 3,966,188 14,750,474 3,719 7,920,444 1,997

78/79 4,009,066 15,076,414 n.a. n.a. n.a. n.a. - not available.

Source: Directorate General of Water Resources Development. - 91 - ANNEX 5 Appendix A

INDONESIA

IRRIGATION PROGRAMI REVIEW

Note on the Structure of "Dharma Tirta" and Water User Associations

1. The traditional "Dharma Tirta" organization was based on village administrative boundaries. The traditional structure (see Figure 4.15) has the following main characteristics;

(a) the lurah (village headman) is responsible to the village consultative assembly. This assembly has ultimate power in the village;

(b) the lurah is assisted by advisors on technical issues related to agriculture and irrigation;

(c) the lurah is assisted in his responsibility for village water management by the "ulu-ulu desa". This person, together with the village security officer and the village secretary, form the central administrative unit for water management at the village level;

(d) the staff of the "Dharma Tirta" have direct access to the ulu-ulu desa on technical matters.

2. The structure for a water user association (the water management organization being suggested by the Ministry of Public Works) is based on tertiary blocks rather than village boundaries. Tertiary blocks may cross village boundaries. This system has the following characteristics;

(a) the members of the water users association (the highest authority of the association) appoint an "ulu-ulu vak" to manage the water distribution in tertiary blocks. This person becomes an executive of the water users association; and

(b) where a tertiary block extends across village boundaries coordination is achieved by a Board of Management made up of the village heads (lurahs) concerned and prominent villagers. This Board in turn appoints an executive body to carry out day-to-day functions.

3. Water user associations will be discussed in more detail in Annex 6. - 92 - ANNEX 6 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Farm Level Water Distribution and Water User Associations

1. While a number of institutional arrangements for water management at the farm level exist in Indonesia today, the distribution of water to farmers generally is not always efficient and frequently is inequitable./1 The reasons for the unsatisfactory situation with respect to on-farm water management are similar to those which have delayed the construction of tertiary and quaternary irrigation distribution systems (see Annex 4). The Government has for some time been aware of the inefficiency of on-farm water distribution and has taken various steps to improve the situation. At the provincial level the "Dharma Tirta" system was established officially in Central Java in 1971 (see Annex 5 for a description of this system). The Central Government has also formulated the concept of "Water User Associations"./2 The purpose in establishing these associations is to formalize in a uniform fashion the existing traditional water management units and to establish the basis for the formation of associations where they do not already exist.

2. The main feature of water user associations is that they provide an administrative structure designed to ensure the efficient and equitable supply, management and distribution of water to farmers' fields. It is envisaged that these associations are formed on the basis of water supply rather than village boundaries. Each association would have a policy for- mulating body (Board of Management) and an executive body to carry out the day-to-day functions. The board of management would be elected from the membership of the association and would maintain continuous liaison with village officials and the government institutions responsible for the supply of irrigation water to the tertiary system (Provincial Public Works Offices) and the institutions responsible for technical advice such as the Directorate General of Food Crops and extension personnel.

3. It is apparent that the progress and efficient utilization of tertiary and quaternary water distribution systems is dependent not only on the quality of design and construction of these systems, but also the manner

/1 See Series Research Report No. 14 "A Research on Water Management at the Farm Level: An Indonesian Case Study," by Research Institute in Social Sciences, Satya Wacana University, Salatiga, Indonesia, 1975. This report discusses a number of water management systems in Bali and Central Java and analyzes their strengths and weaknesses.

/2 Perkumpulan Petani Pemakai Air, (referred to as P3A) is the Indonesian translation. - 93 -

ANNEX 6 Page 2

in which they are used and maintained as well as the efficiency and equity of water distribution through these systems. The establishment of water user associations should therefore be seen as an integrated part of the improvement and extension of the tertiary and quaternary irrigation systems. The mission therefore recommends that the DGWRD, the Provincial Public Works Service and the Ministry of Agriculture should continue to promote the establishment of water user assoc'ations.

4. Progress in the establishment of water user associations has been slow. Table 1 in this Annex shows that, even when those associations which are in the process of being developed are included, they cover only about 250,000 ha of the area under irrigation in Indonesia. The situation for PROSIDA projects only is shown in Table 2. While the Balinese subak system is included in these tables, the data do not, however, cover those areas where there is at present a traditional water distribution system, characterized mainly by the "ulu-ulu" system (see Annex 5). -94 - ANNEX 6 Table 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Formal Water User Associations /a

Active Developing Total Province No. of asso- Member- Area No. of asso- Member- Area No. of asso- Member- Area ciations ship covered ciations ship covered ciations ship covered (ha) (ha) (ha)

Java W. Java 18 5,713 2,480 533 43,061 48,223 551 48,774 50,703 C. Java 282 n.a. 26,000 39 13,324 4,180 321 n.a. 20,180 Yogyakarta 36 2,310 2,190 31 1,384 686 67 3,694 1,871 E. Java 37 6,149 5,762 416 48,302 21,956 453 54,451 24,146

Subtotal 373 n.a. 31,855 1.019 106,071 75,045 1,392 n.a. 106,900

Bali 1,222 132,508 100,586 - - - 1,222 132,508 100,586

Sumatera N. Sumatera 4 660 1,855 49 6,259 15,436 53 6,919 17,291 W. Sumatera 28 1,297 1,008 114 3,548 3,975 142 4,845 4,983 Rian - - - 18 918 918 18 918/b 918 Jambi - - - 22 513 4,642 22 513 4,642 Bengkuhn - - - 4 338 338 4 338 338 S. Sumatera - - - 9 1,522 3,132 9 1,522 3,132 Lampung 3 1,147 995 3 114 600 6 1,261 1,595

Subtotal 35 3,104 3,858 219 13,212 29,041 254 16,316 32.899

Kalimantan W. Kalimantan - - - 7 80 425 7 80Lb 425 E. Kalimantan - - - 4 186 290 4 186 290 S. Kalimantan 4 80 315 23 874 2,569 27 954/b 2,884

Subtotal 4 80 315 34 1,140 3,284 38 1,220 3,599

Sulawesi S. Sulawesi 7 2,375 950 5 121 500 12 2,496/b 1,450

Nusa Tenggara W. Nusa Tenggara - - - 5 218 200 5 218 200 E. Nusa Tenggara - - - 4 80 1,266 4 80/b 1,266

Subtotal - - - 9 298 1,466 9 298 1,466

Total 1,641 n.a. 137,564 1,286 120.842 109,336 2,927 n.a. 246,900

/a This listing does not include the traditional institutions which already exist to provide local village level control over water management (e.g., "ulu ulu" systems which cover almost all irrigation systems in Java. The table does include members of the "subak" systems in Bali.

/b Not all farmers within the area covered are members of Water User Associations.

Source: Subdirectorate of Land and Water Conservation, Directorate General of Food Crops, Ministry of Agriculture, January 1978. (Note: Some figures have been adjusted to make them consistent with separate data received from the Directorate General of Water Resources Development for PROSIDA projects presented in Table 2.) INDONESIA

IRRIGATION PROGRAM REVIEW

Formal Water User Associations in Some PROSIDA Project Areas

Proportion Total Active Developing Total of project ?rovince Project name project No. of Membership Area No. of Membership Area No. of Membership Area area area associations covered associations covered associations covered covered (ha) (No.) (No.) (ha) (No.) (No.) (ha) (No.) (No.) (ha) (X)

Tava W. Java Cisedane 42,000 3 621 369 10 2,082 2,003 13 2,703 2,372 5.6 Rentang 93,000 12 4,693 1,820 128 37,930 15,172 140 42,623 16,992 18.3 Ciujung 24,300 3 399 291 14 2,438 2,482 17 2,837 2,773 11.4 Cirebon 89,000 - - - 370 n.a. n.a. 370 n.a. n.a. n.a.

C. Java Glapaii Sedadj 42,000 5 1,964 589 31 11,497 3,449 36 13,461 4,038 9.6 Pemali Com.l 123,000 49 13,181 5,272 8 1,827 731 57 15,008 6,003 4.9 E. Java Pekalen Sampean 229,000 12 3,947 1,374 73 27,505 11,000 85 31,452 12,374 5.4 Madiua 140,000 25 2,202 816 343 20,797 10,956 368 22,999 11,772 8.4

Sumatera Lampung Way Sepu i- 25,000 3 1,147 995 - - - 3 1,147 995 4.0

Sula-esi S. Sulawesi Sadai. 56,600 7 2,375 950 30 11,261 4,500 37 13,636 5,450 9.6

ource: PR05IDA, iha .--rate General of Water Resources Development (January 1978).

asm lxt - 96 -

ANNEX 7 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Organization and Management of Directorate General of Water Resources Development

1. Rehabilitation and new development of those irrigation systems financed by the Central Government is the responsibility of the Directorate General of Water Resources Development (DGWRD), which is a part of the Ministry of Public Works (MPW). At the regional level the responsibility for the execution of irrigation development, as well as operation and maintenance of existing irrigation systems, is the responsibility of the provincial organization of the Ministry of Public Works through the Water Resources Development Division of the Provincial Public Works organization. Any new irrigation development which is financed by the MPW is executed by the Provincial Public Works Office under the guidance and supervision of the DGWRD. For this purpose the DGWRD does have regional coordinating offices./I In addition, the Minister may also establish additional project executive bodies to directly undertake special projects as .ecessary.

2. The organization of the MPWEP is shown in Figure 4.1 whilst that for the DGWRD is shown in Figure 4.2. Within the DGWRD, there are six Directorates which are organized by functions and comprise a Director with a chief of staff and subdirectors. In addition, there is a Secretariat which provides overall management support and coordination assistance to the Director General. Figure 4.3 shows the organization of the Secretariat to the DGWRD whilst Figures 4.4 through 4.9 show the organizational structure of the six Directorates. In addition to the Directorates of the DGWRD there are at present four special project executive bodies, namely PROSIDA, P4S, Brantas, and Project Banjir./2 P4S may become part of PTPT./3 Even if this occurs it

/1 Regional offices ("Kantor Wilaya") are often abbrcviated to the acrony- 1"KANWIL."

/2 PROSIDA is the acronym for Proyek Irigasi IDA which since 1968 has been an executing body for IDA and IBRD projects. P4S is the acronym for Projek Pengembangam Persawahan Pasang Surut, which is the body created to study and execute tidal land development. The General Manager of these executive bodies can be identical to the Director of a Directorate or completely separate. P3SA (Proyek Perencanaan Pengambangan Sumber - Sumber Air - Proyek Jratunseluna) an executive body created to program and study water resources development, and P2AT (Proyek Pengembangan Air Tanah) an executive body responsible for nationwide groundwater investigations and development, have General Managers who are also directors. PROSIDA has a separate General Manager.

/3 "Direktorat Penyapan Tanal Pemukiman Transmigrasi" (Directorate for Land Preparation for Settlement). - 97 -

ANNEX 7 Page 2

would still leave no less than nine separate heads of Directorates or special executive bodies who are directly or indirectly responsible to the Director General of the DGIRD.

3. Finally one more body should be mentioned. The Jatiluhur Authority (see Figure 2.1) is a semi-autonomous public agency established by the Government in 1970 to manage the multipurpose development of the Jatiluhur region and to implement Credit 195. It is governed by the Ministry of Economy, Finance and Industry (MEFI) and its operations are managed by a Board of Directors. The MEFI, in guiding the Authority and setting its policies for Jatiluhur development is assisted by a Ministerial Council comprising the Ministers of Public Works (MPW), Mining and Energy, Home Affairs, Finance and Agriculture.

4. The Authority's Board of Directors consists of a President Director (Project Manager) and three Department Directors who have separate responsibilities for Irrigation, Electric Power, and Administration. The Irrigation Department Director's responsibilities include the Authority's agricultural support, coordinating and programming activities. An Agriculture Advisory committee, comprising the Ministry of Agriculture's Director of Extension Services, three technical specialists and the head of the Irrigation Depart- ment Agriculture Section, counsels the Board on agricultural matters. While the Authority is an independent body its close ties to the DGWRD result in considerable coordination of activities. This review has not suggested any change in the structure or role of the Jatiluhur Authority. To a large extent the establishment of the Authority was a special case and while the establishment of such an authority in the future may be justified because of similar multipurpose circumstances, the control of government irrigation development within one institution is probably preferable.

Staffing

5. The total staff of the DGWRD at present is about 4,000. Of these some 2,000 are accounted for by those who are on the permanent establishment, the remainder are employed on a temporary basis for specific projects. Most of the professional employees are within the permanent establishment of the DGWRD, whereas most of the temporary employees are nonprofessionals (Table 5 in Annex 8 gives further details).

Scope and Activities of the DGWRD

6. The scope of the work of the DGWRD covers the following main areas:

(a) Irrigation and Drainage.

(b) Development and Reclamation of Deltaic and swampy areas, especially for agricultural purposes.

(d) River basin planning and development.

7. The DGWRD has an immense program of activities. Many of these activities are carried out by consultants (both foreign and local). The program includes:

(a) The selection -and evaluation of new projects and the preparation of these projects for financing.

(b) Project implementation and coordination.

(d) The establishment of improved and hydro meteorological networks for the reporting of hydrological information and the processing of this information.

(e) Selection and preparation of new irrigation and tidal development areas for transmigration.

(f) Development of improved standards of construction.

(g) Development of improved operation and maintenance standards and policies.

(h) Improvement of tidal swamp reclamation techniques.

(i) Improving weed and silt control techniques in irrigation areas.

(j) Improved water management at the farm level.

(k) Liaison with farmers, farmers' cooperatives and provincial governments with respect to irrigation development programs.

(1) Research and development of new techniques in construction and maintenance procedures.

(m) Coordination with agricultural production, planning and development organization and committees.

(n) Organizing training courses and scholarships for the purpose of staff improvement.

8. It is apparent that it will take many years to develop the high levels of competence required to handle even a few of these activities efficiently. Even organizations which have a great depth of internal resources find it convenient and indeed essential to commission consultants and universities to assist with part of their work, particularly the work involved with investigation, design and research. The use of outside - 99 -

ANNEX 7 Page 4

assistance to provide a stimulus to departmental staff ensures that projects do not suffer by diverting essential management personnel to investigation or design.

9. Nevertheless it is the mission's view that a situation should not be created whereby the DGWRD will be dependent for all time on consultants to do all their technical work. Such a situation could be avoided by building up a team of specialists with the appropriate training and aptitude, who would be given the opportunity for career advancement within the specialist service without the need to move out into administrative positions.

Evaluation of Present Organizational Structure

10. The present organizational structure of the DGWRD on a functional basis, namely with Directorates responsible for planning and programming, rivers, swamps, irrigation and logistics does not lend itself to the best use of available skilled manpower. Indonesia is a large country where distances between project areas are great. Communications, while improving, are not yet well developed and it is extremely time-consuming to have Directors from headquarters visiting the same area, each one to look after his own particular sphere of work and needing to establish his own relationship with Public Works officers in each province. While the functional basis for the organization of the DGWRD might well have been appropriate when most of the irrigation developed was on Java, the future situation, in which much more of the activity will be located on the Other Islands, will, in the mission's view, highlight the fact that the current functional basis has a number of disadvantages. In addition the greater variety of future projects with the need to coordinate the various types of development with their competing demands on the available water resources emphasizes further the need for coordinated operational activity within a region.

11. Apart from the problems of distance and liaison with regional organizations, there are a number of other disadvantages with the present system. Not the least of these is the fact that, although all Directors are on the same grade, their workload and responsibilities vary considerably depending on their functional responsibility. It was the conclusion of the mission that these Directors do not really function as specialists in the areas of work for which they are responsible since their function is mainly managerial and administrative. Apart from the uneven load on different Directorates, the present organizational structure results in an enormous administrative and executive burden on the Director General. This situation was confirmed to the mission many times in discussions with DGWRD staff and is basically the result of the centralization of decision and management activity, and is exacerbated by the fact that the Director General is also a member of a number of advisory boards which provide overall management and advice to the executive bodies such as PROSIDA and the Jatiluhur Authority. The mission concluded that the present framework of DGWRD organization is already fully committed and does not allow for any expansion and diversification of its activities except through the formation of new executive bodies. However, even the creation of executive bodies does not resolve the issue of intraregional coordination. Many of the projects have made slower - 100 - ANNEX 7 Page 5

than expected progress; this underlined the mission's concern about the number, and quality and experience of staff and the relevance of the DGWRD structure to its current and future tasks.

12. The DGWRD's planning and programming capability is not well developed, it being diluted by a heavy involvement in matters such as the administration of the development budget, design and construction in connection with river basin studies and groundwater development and liaison with other government departments (see Figure 4.4). The mission considered that more resources should be devoted to forward planning and that more of this function should be carried out by DGWRD staff rather than consultants.

13. Finally, a comment about PROSIDA. The Bank itself, when it started its lending program for irrigation, expressed concern with the capacity of the DGWRD to execute Bank project and consequently requested that a special executing agency be established for the purposes of undertaking the planning and construction of Bank Group-assisted projects. As a result PROSIDA was formed (see Figure 4.10). Although PROSIDA has become a strong and resourceful organization, planning and construction delays have occurred. At the same time the existence of such a body within the DGWRD has created difficulties. Most discussions that the mission had with responsible officers indicate that the continued existence of PROSIDA within its present form needs to be critically examined. There is complete agreement that PROSIDA did have an important role to play in the early days of the first IDA credits when the DGWRD was a fledgling organization. However, there is a strong feeling that PROSIDA has now become an anachronism and an excuse for poor performance by officers outside it. PROSIDA officers work different hours from other officers in the DGWRD, their rates of pay as well as overtime pay are more attractive and they receive better fringe benefits than most other DGWRD employees. Such differences which can also be seen in other executive bodies are resented strongly by almost every other section of the DGWRD. Even though there are sound arguments for the differences between working conditions of PROSIDA and other DGWRD officers (e.g. need to maintain higher standards, working with foreign languages), in the long run such feelings can do nothing but harm to the organization.

Suggested Reorganization of DGWRD

14. For the DGWRD to cope with its future role it should, in the view of the mission, carry out a reorganization based on a regional division of responsibilities and duties. The division suggested could be based either on the regional division already used for Water Resources Development Planning and Management or on the Economic Management Regions used for planning purposes. Either form of regional division would provide four regions, work in each could be the responsibility of a Director. The revised structural arrangements envisage that each Directorate would be established very much along the lines of PROSIDA at present. Each Directorate would have subdirectorates responsible for planning and programming, implementation, operation and maintenance, logistics and hydrology. - 101 -

ANNEX 7 Page 6

15. The mission suggested to the Director General of the DGWRD that his work would be assisted if he could have at his disposal two Deputy Director Generals, one responsible for project implementation whilst the other would be responsible for planning and programming, technical services including hydrology, hydraulic research, design and development, logistics, operation and maintenance, training and general administration. However, discussions of the draft proposals with the Director General indicated that there would be substantial problems in the establishment of Deputy Director Generals in the DGWRD because of existing government rules and procedures related to the organization of government institutions. The mission's conclusions were therefore modified to a certain extent. The suggested structural arrangement for the DGWRD is shown on Figure 4.12.

16. The suggested organization is based on the concept of dividing the activities of the DGWRD on a regional basis. While each Directorate would still be located in Jakarta and would be within the central government structure there would be a significant reorganization of responsibilities. The Directorate of Planning, Programming and Design (Figure 4.13) would be responsible for coordinating all surveys and investigations, planning and programming, design, construction, logistics (mainly procurement) and operation and maintenance carried out by the four Directorates responsible for works in each of the major regions. In this respect the planning and programming directorate becomes the overall planning and technical support arm for the DGWRD. Each of the Directorates responsible for works in the four regions would have responsiblilities for technical support, logistics and operation and maintenance, but would coordinate these functions with the Directorate of Planning and Programming. The most important function of this Directorate will be to provide a focal point for long-term planning.

17. The major role of each regional Directorate of Works would be project implementation as shown in Figure 4.14. There would be a number of subdirectorates responsible for projects which could be projects of different types e.g. tidal land development, gravity irrigation, and groundwater development. It will be noted in Figure 4.14 that the subdirectorates responsible for project implementation are depicted as having responsibility for 12 projects. These projects, can of course, be further subdivided into subprojects if the need arises. In addition, each project could be implemented in various ways, for example, by the use of consultants or by DGWRD staff. Basically, the objective would be to provide a coordinated management structure in order that project implementation regions can be effectively undertaken. Separate accounts could be kept for each project or subproject. The most important consideration, in terms of the long-term capacity and capability of the DGWRD will be the establishment of the "technical support subdirectorate" under each Directorate of Works. These subdirectorates can be assisted by consultants in the early stages, but it should be the aim of the DGWRD to staff them entirely with indigenous staff at an early date.

18. The sixth Directorate, that of Technical Services will remain substantially the same as the present Directorate of Hydraulic Engineering. The headquarters of this Directorate should, in the view of the mission, remain in Bandung as at present. It will be noted that the training function has been added to this Directorate. This has been suggested since there are - 102 - ANNEX 7 Page 7

obvious advantages in having this Directorate somewhat removed from the hustle and bustle of project planning and implementation, to quietly undertake the training function which is such an important aspect of the Department's overall development in its goal of facing the increasing challenges of the future. In addition to the functions of the present Directorate of Hydraulic Engineering the proposed directorate should also be responsible for setting standards for all works throughout the DGWRD.

19. If the proposals outlined are accepted by the GOI, the transition from the present establishment and organization to the new establishment can probably be accomplished with a little dislocation of ongoing activities. All that would be immediately necessary would be for the existing directors to revise their role of being responsible for one particular specialist area and to consider themselves managers of the overall water resources development within a defined region.

20. As suggested earlier, the proposed division of the DGWRD would have some attractive advantages which cannot be achieved by any other rearrangement. The Directorate of Works for a particular region would be the only one in day-to-day contact with provincial public works service in any province on any aspect of Water Resource Development falling within the purview of the DGWRD. This alone should help improve rapport between the DGWRD and the provincial administration, which can do nothing but good for the Government's overall plans to push ahead with water resources development in Indonesia.

21. The organization suggested will have the following direct advantages over the present arrangements:

(a) The proposed organization lends itself to rapid expansion to cope with increased size and scope of work.

(b) The Director for each region would only have to travel within his region, i.e. on average a quarter of the area he does now.

(c) He would have to deal with only a limited number of Provincial Public Works Services, i.e. those situated within his region.

(d) He could organize farmer cooperation more effectively and achieve better coordination as he would deal with all aspects of water resources development within a region.

(e) Having a wider field of interest to cover, the staff within a Directorate can more readily be moved around according to an individual's aptitude for any particular work.

(f) There is more opportunity for Directors to compare notes and to learn from one another's mistakes, the Directorate of Technical Services can coordinate this function and resolve questions relating to standards of construction. - 103 -

ANNEX 7 Page 8

(g) The workload can be readily adjusted so that it is more evenly distributed among the Directorates, simply by changing the boundaries of regional responsibility.

(h) The suggested structure provides a better basis for management control over the progress of projects because all functions concerning the implementation of a project in a region are the responsibility-of one directorate.

22. If the reorganization suggested is implemented it is proposed that the Director General, together with his Assistant Director General (or the Deputy Director Generals if they can be established) and Directors constitute the Water Resources Development Planning Council. This council should meet from time to time under the chairmanship of the Director General to plan future development, discuss and resolve major problems and decide on policy.

23. Insofar as projects financed by the Bank Group are concerned they would be treated in the same way as any other projects and would be handled by the Director of the Region in which the project occurs. In effect therefore there will be four Prosida's instead of one. The reorganization would also enable more officers of the DGWRD to be involved in project preparation, planning, implementation and operation and maintenance, thus giving them confidence to identify new projects for Bank financing. The arrangement would also give the Director General an opportunity to consider the overall operation of the DGWRD and critically examine its future development to cope with the ever increasing need to improve and expand irrigated agriculture in Indonesia.

24. In addition to the reorganization suggested above, it is essential, in order to increase the investigation, planning and implementation capacity of the DGWRD to meet foreseeable needs, that the following measures be taken urgently:

(a) Continue to build up the hydrological and meteorological data collection system with a view to preparing a national (or basin or regional, as a first step) Water Resources Inventory.

(b) Institute an official management information system, so that information on performance is readily available to top management in order that, if necessary, timely remedial measures can be taken.

(d) Initiate soils surveys in areas earmarked for early development.

(e) Place more emphasis on manpower planning and training programs.

(f) Move more rapidly with the collection of socioeconomic data both on rehabilitated projects, and on projects that are in the pipeline in order to facilitate project planning and preparation. - 104 - ANNEX 7 Page 9

(g) Critically examine some of the financial procedures that apparently cause delays in procurement of equipment and supplies.

25. These proposals for the reorganization of the DGWRD are presented here in broad terms. The detailed arrangements would need to be formulated separately once the overall principle has been accepted. The mission suggests that, if a reorganization is to be implemented, the changes be guided and monitored by an advisor who is external to the DGWRD, but who has long experience in the organization and management of similar institutions.

Alternative Organizational Structure

26. The mission seriously considered a number of alternative organizational forms for the DGWRD. Some alternative arrangements were also suggested by the Director General. In principle the other organizational forms suggested would retain the functional division of the DGWRD, with each functional directorate subdivided on a regional basis. Included in the alternative proposals were a split of the large Directorate of Irrigation into two separate Directorates, incorporating PROSIDA in the split. In other words there would be a subdirectorate (or in the case of Irrigation, Direc- torates) responsible for major regions. While such an arrangement would be more consistent with existing government guidelines on the organization, of government institutions, it would not overcome the major problems which the mission sees with the existing arrangements, namely that it results in reduced scope for coordination of water resource developments at the regional level and does not avoid duplication of activities by directors in various regions. There remains the real possibility of uneven workloads between directorates, the need for frequent consultation between directorates in the course of project implementation, and finally it would not allow for the expansion and diversification of DGWRD activities unless special executive bodies are formed. -105 -

ANNEX 8 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Training Needs of the Directorate General of Water Resource Development

Introduction

1. The 1975 Irrigation Program Survey noted that while there were a few first-class instititions in Indonesia for training of engineers and agriculturalists, the output was well below national requirements. Training facilities for middle-level technicians was assessed at that time as being qualitatively and quantitatively inadequate. Although the capacity of university and diploma-level institutions has increased since 1975, one of the major constraints on the implementation of an increased long-term national irrigation program continues to be the shortage of trained manpower.

2. This review of training is limited to the Directorate General of Water Resources Development (DGWRD) staff, particularly engineers. However, the general conclusions also apply to the staff of the Provincial Public Works Offices who are associated with much of the work of the DGWRD. The shortage of skilled staff affects both design and implementation capacity for new schemes as well as the effective operation and maintenance of those recently rehabilitated.

3. Before discussing the scope of training activities an important point relating to responsibility for training activities should be made. Presidential decree No. 15, 1974 states that formal training for government employees be the responsibility of the National Institute of Public Administration; training of nongovernment employees would be the responsibility of the Department of manpower; and general training and education is the responsibility of the Department of Education. The DGWRD, therefore, has no authority to conduct formal training activities although it can provide in-service training which does not lead to formal qualifications.

University-Level Training for Engineers

4. The Ministry of Education's current estimate of the output of graduate civil engineers is 150 a year, principally from the Institutes of Technology at Bandung (ITB) and Surabaya (ITS), as well as Hasanuddin Univer- sity. That Ministry estimates the annual output is unlikely to exceed 500 by 1985. Moreover, the majority of civil engineers are absorbed by the private sector, particularly in the field of construction, where the salary incentives are much higher than in Government. Consequently, the needs of the Government, of which DGWRD forms only a small part, are not being met. For subprofessional -106 -

ANNEX 8 Page 2

staff, the main sources of recruitment are the senior technical high schools (STM). While the laboratory and workshop facilities of some of these schools are being upgraded (often with assistance from the Bank, other international agencies and governments), the majority of them lack adequately trained teachers.

Current Training Arrangements in DGWRD

5. The DGWRD, like other units of the Ministry of Public Works (MPW), recognizes that the education system cannot yet produce sufficient qualified manpower and has therefore initiated both pre-service and inservice training schemes for engineers and technicians.

6. Pre-Service Training. DGWRD awards scholarships to students in their undergraduate years at seven higher level institutions /1 to attract them to work in water resource development. By 1977, 74 graduates from this scheme had joined the DGWRD. Through DGWRD initiative and funding, specia- lized degree courses in hydraulic engineering were established at Brawijaya University in 1975 and Gaja Mada University in 1977. About 30 graduates a year are expected to join the Directorate General by 1981 from these 2 universities. At the technician level, a six-month course for graduates of senior technical higher schools (STM) is run by DGWRD to provide more specia- lized training prior to their recruitment. The Directorate-General also manages and finances further training of STM graduates and also trains undergraduates at technical school (ST) level in Jogyakarta which provides courses specifically oriented towards the needs of the irrigation services.

7. In-service Training. The three-year water resources course at the Institute of Technology, Bandung is one of the most important in-service training programs for DGWRD staff./2 This is one of eight parallel courses in building construction, highway engineering, electrical engineering, etc. Participants require about 5 years post-STM experience in the DGWRD and currently 76 students are enrolled in the first year of the course. They are selected from provincial, project and headquarters staff. Fifty-two are studying water resource engineering. Most of the remainder are enrolled in mechanical engineering and geodesy courses. Many of the instructors are drawn from the Ministry of Public Works staff, and, as is common in many educational institutes in Indonesia, only work as part-time lecturers. Annual entry has expanded from 16 in 1975 to 76 in 1977. Upon the successful completion of the three-year course, students are awarded a Bachelor of Irrigation Engineering (BIE), a diploma-level qualification. Since the majority of engineering staff in the provincial irrigation services /3 and a

/1 Institutes of Technology, Bandung and Surabaya, Gaja Mada, Diponegoro, Parahiyangan and Pajajaran Universities and the University of Indonesia.

/2 This course is financed by the Ministry of Public Works.

/3 In East Java Province in 1976, 64 out of 102 higher technical staff (engineers, surveyors, etc.) were holders of the BIE. -107 -

ANNEX 8 Page 3

number of headquarters staff are graduates of these courses, this training constitutes a very important part of the staff-upgrading program. Partici- pants are normally bonded to serve in Public Works for six years. Unfor- tunately, the mission did not have an opportunity to assess the quality of the course work or its relevance to the DGWRD's needs. ITB also runs a 14-month postgraduate training course for engineers in the Directorate General of Roads and Highways, the management of which is coordinated by the ITB and the MPW.

8. On the Job Training. Training courses for irrigation foremen (juru pengairan) have been run for a number of years in several provinces as well as a more intensive course at the Ministry of Works Training Center at Surabaya. The latter, partly in response to one of the recommendations of the last Irrigation Program Survey, has been expanded with Bank financing to include audio-visual (AV) programs. Although the latter are still in the pilot stage, testing the relevance of course content, building up a series of lessons and developing the technical capacity to reproduce training material, the program seems to have considerable potential, not only for juru pengairan training, but also for use in the agriculture sector and even in the Agricultural High Schools (SPMA). Certain problems need to be resolved, however, before the program can be expanded through the provinces. The initiative in design and assessment of the training should be taken by Indonesian rather than as at present by expatriate staff. In addition, it is necessary to make a careful assessment of the practicality of using sophisticated AV equipment before the programs are extended to other provinces.

9. Training of Indonesian engineers by consultant staff has become more widespread. However, consultants often find that their training function, which they generally seem to accept, takes second place to the engineering task partly because of time pressure. Moreover, partly because counterparts may not be assigned on a permanent basis and partly because they lack the necessary technical background, the benefits of such training are limited. This form of "incidental" training is not an adequate substitute for longer term formal training.

10. Overseas Training. An important component of the in-service program is the wide range of overseas courses financed by bilateral and international aid agencies. These courses vary considerably in duration and scope. Table 1 gives an indication of the range of these courses and the countries which are providing them. In the selection of staff for overseas training, a major constraint has been the limited knowledge of English of many DGWRD middle-level staff. Special English classes are organized to prepare engineers for such courses.

11. These overseas courses financed under bilateral and international aid programs have improved the skills of DGWRD staff. However, the wide range of course content, location and duration of training gives the impression that this type of training is rather haphazard and does not form part of a systematic training plan. Often, selection for overseas training is regarded as an award for past services rather than as a specific means of upgrading -108 -

ANNEX 8 Page 4 skills. The DGWRD needs to ensure that overseas courses meet its priority needs, and it would be useful to develop closer links with some overseas institutions - such as has already been done with Delft /1 - so that the courses can be tailored to the needs of DGWRD staff. Much of the technical assistance financed by the Bank and other agencies has been piecemeal and therefore stimulated this dispersion of effort. One of the recommendations of the last Program Review - short visits to Malaysia and other neighboring countries of middle-level staff - has been of limited success partly because lack of forward planning has prevented these visits from being focused on specific practical problems.

Future Training Needs

12. Despite the strenuous efforts made by DGWRD over the last five years to expand training programs, there are four questions which need to be addressed - manpower planning, operational policy alternatives, the organization of training and the provision of an adequate budget for training.

13. Manpower Planning. There appears to be no formalized system for projecting the future needs of graduate engineers, other specialists (such as geologists and surveyors) or technicians. Understandably, the Director General's most pressing priority is 'to staff the growing number of development projects while maintaining a minimum level of competence in the provincial cadres. Nevertheless, the magnitude of rehabilitated schemes in Java demon- strates the need to estimate future manpower requirements by level of responsibility and qualifications. A consultant study of O&M in East Java concludes that "present staff members should suffice for all irrigation service works including O&M, but a major reorganization and intensive training of available staff is needed... The level of staff at provincial headquarters is adequate, but assignment of technical staff to administrative and data collection work is wasteful."/2 It was suggested to the mission by DGWRD staff that this situation also applied in other provinces. Although this study is still under review in the province, these quotations indicate that the size and focus of training programs must be preceded by policy decisions. The mission did not consider it useful to extrapolate future staff needs for the province or on a national basis from the area/staff ratios in the consultant report because the ratios may not be accepted as optimum for that province and variations in terrain and nature of irrigation systems preclude such extrapolation. Nevertheless, this is an example of one basis for manpower projections, although the mission was unable to ascertain if this method is used in the DGWRD for forward planning.

14. Operational Policy Alternatives. There are a number of policy issues which underlie the development of training programs. For example: Does DGWRD intend to expand its own design, research and construction supervision capacity or does it propose to continue to rely to a large extent on expatriate consultant firms? What will be the demand for trained manpower (both engineers and technicians) in the provincial cadres if rehabilitated

/1 Technische Hogeschool te Delft, the Netherlands. /2 Table 2 gives some manpower/area relationships in East Java. -109 -

ANNEX 8 Page 5 systems are to be maintained at an efficient level? Is the long-term objective to have graduate engineers (Insinyur) for divisional engineers (Kepala Daerah) or will BIE's be equally effective? Are the replacement/ wastage rates at engineer and tehnician level in DGWRD the same as the figure (4% to 5%) used by PUSDIKLAT for the Ministry of Public Works? These questions may have been addressed by senior management, but the mission did not find any evidence that the Personnel and Training Divisions were aware of a policy on these matters.

15. Organization of Training. The Center for Education and Training (PUSDIKLAT) /1 in the MPW is responsible for both the planning of the training needs of the three Directorates General (Water Resources, Highways, Housing, Building and City Planning) and managing the five Regional Public Works Training Institutes. Each Directorate General has a training department with a small planning staff. Although PUSDIKLAT's experienced director has a good appreciation of the training needs of the Ministry, he is handicapped by the lack of specialist staff in training technology as well as by an acute shortage of funds. The executive responsibility for specific training programs rests with the Directorates General. This is a practical solution because each of them is such a large institution. However, PUSDIKLAT should be given greater authority to standardize courses, to assess the effectiveness of all training programs and to expand its capacity to develop training techniques. In the DGWRD, the Training Division needs at least one, possibly more, experienced engineers to assist the head of the Division in the planning and evaluation of training courses both in Indonesia and overseas. The Director General should consider the establishment of a standing committee on training which could consist of his six Directors, the head of PUSDIKLAT and representatives of ITB, and at least one major consulting firm. It is essential that the Division have sufficient support staff to administer the many programs.

16. Training Budgets. The budgets for training are inadequate. Despite requests for increased training budgets, it appears that BAPPENAS has repeatedly cut the proposals. By way of illustration, it is noteworthy that while the total Ministry of Public Works budget grew from Rp 45.7 billion to Rp 248 billion between 1970-71 and 1977-78, PUSDIKLAT's budget fell from Rp 327 million to Rp 235 million. The DGWRD chose to send engineers to Holland for an 11-month course rather than conducting the course in Indonesia partly because the cost of the training (Rp 3.0 million per participant) was beyond the resources of the budget. Travel of the Training Division staff has to be paid from operational division's funds. There is a need for Indonesian textbooks and manuals; the mission understands that a number of experienced engineers would be prepared to write textbooks. However, there is little or no budget for incentive payments or production costs. In view of the magnitude of the language problem, an increased allocation of funds for this purpose could pay dividends in operational work as well as in the academic institutions.

/1 Pusat Pendidikan dan Latihan Tenaga kerja. -110 -

ANNEX 8 Page 6

Conclusions and Recommendations

17. The mission concludes that:

(a) The effective supply of professional engineers available to the DGWRD falls far short of the effective demand. The DGWRD is at present not only competing against other directorates general for engineers but it also competes against an expanding demand for engineers in the private sector. It is unlikely that the DGWRD can appreciably increase its recruitment from the formal training institutions unless it expands its scholarship system for undergraduates or improves salaries.

(b) The Ministry of Public Works and Electric Power has training programs in a number of its Directorates General, some of which have received financial support and technical assistance personnel under Bank Group and other loans. Such support, while undoubtedly beneficial, has tended to distract attention from the need for comprehensive plans based upon future expanded investment in new and sometimes different types of projects as well as growing operation and maintenance demands.

(c) The investment proposed during the next five to ten years in new systems as well as in operation and maintenance of existing systems will be of limited effectiveness if the staff required to design, supervise and operate such systems are inadequately qualified. DGWRD should undertake a comprehensive and systematic review of its manpower needs and in the light of those needs and the output of the education system, design an appropriate recruitment and training program.

18. The mission recommends that:

(a) The Ministry shouid define the respective responsibilities of PUSDIKLAT and the Directorates General in the MPW for the planning and implementation of training schemes.

(b) DGWRD should review its long-term manpower needs. This review would take into account such factors as:

(i) future total manpower needs; and

(ii) minimum training, experience and types of qualifications required.

(c) The DGWRD should review the long-term supply prospects for engineers and technicians. This review should take particular account of:

(i) the output from the formal education system; ANNEX 8 Page 7

(ii) the extent to which graduates could be influenced to join the DGWRD through scholarships or other incentives;

(iii) the extent to which upgrading of existing staff could provide the manpower needs

(d) The DGWRD should review its recruitment policy. This review should include an examination of:

(i) salary levels and conditions of employment as they affect recruitment;

(ii) the type and number of scholarships;

(iii) the use of short-term local and overseas consultants for particular tasks;

(e) The DGWRD should consider the establishment of a standing committee having representatives from within and outside the organization. The committee should be responsible for:

(i) reviewing long-term plans for all training programs;

(ii) assessing the effectiveness of such programs;

(iii) establishing contacts with major institutions supplying engineers and technicians for the Directorate General and, if appropriate, recommending changes in curricula;

(iv) evolving a program for the use of existing technical talent and make recommendations concerning funds required for writing, testing and publication of Indonesian textbooks and manuals;

(v) review the possibility of expanding A-V programs for juru pengairan (irrigation foremen) to all irrigation provinces, the SPMAs and the Ministry of Agriculture;

(vi) consider and if appropriate draft proposals for the establishment of a training center for DGWRD staff in conjunction with the reorganization proposals discussed in Annex 7. - 112 - ANNEX 8 Table 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Overseas Training

This table is intended to illustrate the diversity of courses and countries and number of staff affected. It does not give a comprehensive review of all current overseas training.

Departures in the First Nine Months of 1977

(a) Course length

Duration of courses No. staff Man-years

One month 38 3.2 Two months 13 2.2 Three months 4 1.0 Four months 9 3.0 Six to nine months 7 4.1 Twelve months 12 12.0 Two years 10 20.0

93 45.5

(b) Principal countries in which courses are being attended

No. of Country courses

Japan 15 Mostly short courses with consultants head offices ranging in duration from one week to four months.

UK 6 One month to a year including courses in rural development administration at Bradford University and 2 one-year covering irrigation engineering.

Philippines 4 Short 1-3 week courses on such topics as village irrigation (sederhana). In some cases visits included Taiwan.

USA 5 Short courses on seduhana irrigation (AID project and visits to consultants Head Offices).

Netherlands 1 Hydrometry and Survey. In addition, 33 engineers left for Delft in November for 'a 12-month course in water management.

Canada 2 Two-year courses in water resource planning and economics five persons) and applied hydraulics (five persons).

Also courses in Egypt, Thailand, Italy and Korea. INDONESIA

IRRIGATION PROGRAM REVIEW

Comparison of Staff and Irrigation Work in East Java

Head District Section Subsection Type of staff office Biggest Average Smallest Biggest Average Smallest Biggest Average Smallest

Office staff Nontechnical 101 29 25 18 12 10 12 2 2 1 Technical 48 37 14 9 18 16 5 2 1 1 Total 149 66 39 27 30 26 17 4 3 2

Field staff Irrig. foreman 178 26 21 16 8 5 4 1 1 1 Irrig. subforeman 1,321 177 162 151 41 35 30 10 6 4 Laborer 4,352 1,055 356 414 149 135 90 49 24 12

Irrigation system

Irrigation area ('000 ha) 898 139 111 67 38 25 22 7.2 5.3 3.7

Length of government canals (km) 5,385 632 198 750 115 213 23 68 35 11

Storage reservoirs 141 5 - 1 - - - - 1 -

Control structures 11,536 1,660 1,117 890 335 539 628 67 48 27

Rainfall stations 798 102 101 59 17 30 19 5 2 4

Source: Hunting & McDonald (East Java Team) Operation & Maintenance Study, April 1975. o' z (bXm - 114 - ANNEX 8 Table 3

INDONESIA

IRRIGATION PROGRAM REVIEW

District and Section Staffing in East Java

Staff numbers Irrigation area Office staff /a Irriga- Irrigation Gate ope- Fully Non- tion fore- subfore- rators & District Section Total tech. Tech tech Total man man laborers

Malang Malang 18,051 7,820 7 12 19 4 28 86 Repanjen 27,359 15,576 11 11 22 5 44 130 Kasri 22,052 13,924 5 12 17 4 30 90 Pasuruan 20,668 9,457 8 7 15 4 32 93

Total 88,130 46,777 5 15 20 17 134 399

Kediri Kediri 29,140 15,278 12 10 22 7 57 73 Nganjuk 38,801 32,628 17 8 25 7 57 108 Tulungagung 30,202 11,061 23 9 32 7 49 120 Blitar 31,667 16,242 16 13 29 6 50 61

Total 129,810 75,209 20 20 40 27 213 362

Jombang Jombang 24,351 19,524 6 6 12 5 54 175 Mojoagung 23,199 20,884 5 5 10 5 51 154 Paree 19,367 14,461 5 6 11 6 46 85

Total 66,917 54,869 9 18 27 16 151 414

Mojokerto Mojokerto 32,324 15,056 11 10 21 9 76 141 Sidoarjo 33,077 31,968 11 9 20 8 70 178 Wonokromo 5,356 1,996 4 4 8 2 22 97

Total 70,757 49,020 21 31 52 19 168 416

Lumajang Lumajang 34,616 18,647 15 7 22 7 50 116 Probolinggo 19,161 15,915 6 8 14 4 36 146 kraksaan 17,916 12,086 6 7 13 3 27 98 Taoggul 22,441 19,053 9 6 15 5 35 88

Total 94,135 65,701 14 17 31 19 148 448

Bondowoso Bondowoso 25,018 14,004 11 7 18 5 39 76 Jember 32,636 22,725 13 11 24 6 47 87 Rawatamtu 28,919 21,010 13 11 24 5 41 58 Situbondo 24,689 21,271 16 10 26 5 35 135

Total 111,262 78,010 14 25 39 21 162 356

Banyuwangi Banyuwangi 23,433 16,613 16 10 26 4 26 59 Genteng 20,026 19,348 9 11 20 3 27 84 Benculuk 22,526 22,526 11 10 21 4 26 57

Total 65,985 58,587 9 19 18 11 77 200

Mad iun Madiun 28,183 23,164 40 18 58 5 41 293 Barat 37,261 28,754 -20 20 40 7 51 316 Ngawi 36,040 26,181 21 17 38 6 44 297 Ponorogo 37,725 24,116 18 12 30 8 41 149

Total 139,209 102,215 37 29 66 26 177 1,055

Bojonegoro Bojonegoro n.a. n.a. 9 8 7 8 37 242 Lamongan n.a. n.a. 6 9 15 8 30 384

Total 105,381 28,462 16 19 35 16 67 526

Madura (District & Section) 24,488 17,331 7 14 21 4 24 176

/a Nontechnical staff includes district logistic section. Nontechnical staff such as drivers and watchmen, etc. are not included. n.a. - not avaiable.

Source: See Table 2. - 115 - ANNEX 8 Table 4

INDONESIA

IRRIGATION PROGRAM REVIEW

Irrigation Area Per Head of Staff in East Java

Irrigation area per Nontechnical staff Technical staff Ratio of non- Irrigation Irrigation technical staff subfore- to total irri- District Laborer foreman man Section District gation area ------(ha) ------

Malang 221 658 5,184 2,843 17,626 0.32

Kediri 359 609 4,808 1,909 6,490 0.28

Jombang 162 43 4,182 4,182 5,147 0.18

Mojokerto 170 421 3,724 2,721 3,369 0.10

Lumajang 210 636 4,954 2,615 6,724 0.18

Bondowoso 313 687 5,298 2,099 7,947 0.20

Banyuwangi 331 857 6,000 1,833 7,332 0.09

Madiun 132 786 5,354 1,406 3,762 0.19

Bojonegoro 200 1,573 6,586 7,025 6,586 0.29

Average 233 630 5,121 2,959 7,595 0.20

Source: See Table 2. INDONESIA

IRRIGATION PROGRAM REVIEW

Summary of Staffing of Directorate General of Water Resources Development /a

Engineers Other Professions Non Directorate Status of staff 4-yr degree 5-yr degree 4-yr degree 5-yr degree Subtotal professional Total

Secretariat General Permanent civil servant 32 5 56 43 136 175 311 Temporary employee - 2 1 4 7 67 74 Total 32 7 57 47 143 242 385

Directorate of Planning Permanent civil servant 81 43 22 12 158 33 191 & Programming Temporary employee 21 45 2 13 81 91 172 Total 102 88 24 25 239 124 363

Directorate of Rivers Permanent civil servant 109 61 15 31 216 126 342 Temporary employee 14 71 2 28 115 187 302 Total 123 132 17 59 331 313 644

Directorate of Swamps Permanent civil servant 61 49 15 31 156 104 260 1 Temporary employee 11 1 5 7 24 66 90 Total 72 50 20 38 180 170 440 a

Directorate of Irrigation b Permanent civil servant 184 160 38 28 410 149 859 Temporary employee 17 46 3 13 79 1,236 1,315 Total 201 206 41 41 489 1,385 1,874

Directorate of Logistics Permanent civil servant 15 32 3 3 53 77 130 Temporary employee - - - 2 2 30 32 Total 15 32 3 5 55 107 162

Directorate of Hydraulic Permanent civil servant 52 31 I 1 85 125 210 Engineering Temporary employee 22 - 15 7 44 193 237 Total 74 31 16 8 129 318 447

Total Permanent civil servant 534 381 150 149 1,214 789 2,003 Temporary employee 85 165 28 74 352 1,870 2,222 Total 619 546 178 223 1,566 2,659 4,225

/a April 1978, except for "nonprofessional" which are as at January 1978.

/b Includes PROSIDA.

Source: Directorate General of Water Resources Development.

a z MDX kpo - 117 -

ANNEX 9 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Potential for Further Irrigation Development or Rehabilitation of Existing Systems

1. This annex draws on information derived from an inventory of irrigation systems identified for future development or rehabilitation provided by the Directorate General of Water Resources Development (DGWRD). The scope of potential future development discussed here does not represent the aggregate of all possible development, rather it covers only those prospective irrigation and reclamation developments which have been identified by the Directorate of Planning and Programming following a survey of all provinces. Therefore, the projects included in the inventory of development potential are those envisaged by DGWRD (but not yet programmed) for Repelita III and well beyond. For most of these projects, even preliminary feasibility analyses do not exist. The basic source of the information on which this annex is based are data supplied by provincial offices of the Ministry of Public Works (MPW).

Areas for Potential Development

2. Table 1 shows the service area of potential development by province and type of project./l The most striking feature of Table 1 in this annex is the total area under consideration: roughly 5.7 million ha, of which 4.0 million ha (about 75%) is new irrigation development, 0.3 million ha rehabilitation and 1.3 million ha of swamp and tidal land development. The scope of the new development potential can best be appreciated by comparing it to the estimate of existing service area of Public Works systems (4.0 million ha) and the area of Public Works systems currently under construction (1.0 million ha), together about 5.0 million ha. In other words if the potential for expansion of Public Works systems indicated in Table 1 can be realized, then this would more than double the present service area.

3. The distribution of potential projects in terms of service area between Java and the Other Islands is also shown in Table 1. With the rehabilitation of major works nearing completion or under way, only about 20% of the area targeted for rehabilitation is on Java. Almost all of the new development of gravity systems is planned in the Other Islands, of which 63% is on Sumatera. Potential swamp and tidal swamp developments are predominantly in Sumatera and Kalimantan and make up 1.3 million ha (about 30%)

/1 A number of dams are proposed for Java, and have been classified as "new developments" even though they would serve existing irrigation systems, with benefits resulting from increased cropping intensity. - 118 - ANNEX 9 Page 2

of the total new development prospects. Groundwater projects have a fairly low prominence in DGWRD planning,except for areas already heavily populated and lacking alternative water supplies. This is largely due to inadequate data on the geological and hydrological characteristics of the groundwater resources and doubts concerning the ability of users to maintain pumping facilities. A number of studies are at present being undertaken by the DGWRD, some with Bank assistance,/l designed to investigate the technical and economic feasibility of groundwater development in Java and the Other Islands. While a conservative attitude to groundwater development prevails at present there are widespread expectations that this will be a valuable addition to water supplies in the future particularly in the dry season.

Available Data Base for Future Irrigation Development

4. Few of the potential projects included in the DGWRD inventory in Table 1 have been made the subject of feasibility studies, and many may not be justified on technical or economic grounds. Furthermore, for most of the projects indicated in Table 1, neither information on the suitability of soils and climate for irrigated agriculture nor the magnitude and reliability of water supplies is available.

5. Soils. According to the information provided to the mission, soil survey coverage to date in Indonesia can be characterized approximately as follows:

Type of Survey % of Indonesia

Semidetailed and detailed 1 Reconnaissance 25 Exploratory 34 Schematic 40

6. FAO, in collaboration with the Soils Research Institute, Bogor, between 1972-74, made a "land capability" appraisal of the soils of all of Indonesia. The mapping was at a scale of 1:2,500,000 and admittedly was a "desk study" which incorporated many "unconfirmed estimates." The study was designed to indicate the areas considered promising (and not promising) for more detailed follow-up studies of agricultural potential and was not intended to designate the quality of soils. There are several reports available which describe in much greater detail the principal kinds of soils that are available for development. One of these reports is "Soils for Agricultural Expansion in Indonesia" (Soils Research Institute, Bogor, 1974). The descriptions given are of the "Great Soil Groups" as recognized in the more popular soil classification systems (e.g., Seventh Approximation of the USDA, the World System of FAO and the Indonesian System). However, it should be emphasized that

/1 See Bank Loan No. 1434. - 119 - ANNEX 9 Page 3

each of these soil groups covers a wide range of characteristics, physical and/or chemical; in most cases the range is so wide that it is impossible to designate the agricultural suitability of such a group. For example, soil texture rarely is considered to be an important parameter at the Great Soil' Group level, although clearly it is vital in rating a soil as regards its agricultural suitability, particularly for irrigation. Likewise such parame- ters as soil slope, drainability, salinity, fertility, erodability, etc., may vary so widely within a Great Soil Group as to cover the full range of soil suitability from Class I to Class VI (unsuitable for agriculture). Thus, determination of suitability or the potential of the soils of a particular area for agricultural development and the appraisal of their productivity requires careful examination in the field, supplemented by analyses of soil samples and interpretation of laboratory and field test data, the kind and amount depending upon apparent or potential constraints to crop production.

7. The survey of potential projects (see paragraph 1 of this annex) by the Planning and Programming Directorate of the DGWRD covered some 520 project areas throughout Indonesia. The survey extended to about 6.2 million ha and included a preliminary description of soils to determine their suitability and priority ranking as regards irrigation rehabilitation and/or development. The Soils Research Institute, Bogor, provided the mission with the scale at which existing soil surveys for the project areas identified were available, the scale being a good index of the detail and the likely usefulness of a soil survey for project planning and appraisal purposes. The results of the compilation were as follows:

Scale of No. of Total % in each soil survey project areas hectares group

1:10,000 2 10,500 0.2 1:50,000 19 966,000 15.5 1:100,000 55 219,000 3.5 1:200,000 5 160,000 2.6 1:250,000 139 1,492,000 23.9 1:1,000,000 299 3,393,000 54.3

Total 519 6,241,000 100.0

8. These figures show that about 85% of the total area under consideration has been surveyed at a scale greater than 1:100,000; this compares with recommendations by most experts and organizations that soil surveys for determination of land irrigability be made at a scale of 1:12,000 or larger. However, where the soils are relatively uniform or the development problems are quite simple, a scale as small as 1:50,000 may in some cases be satisfactory. Soil surveys at scales smaller than 1:50,000 usually do not provide sufficient information for project planning, design or appraisal. On this basis only 4% of the project areas comprising about 16% of the land in the above inventory could possibly be at a scale satisfactory for project planning and/or appraisal, and it is almost certain that the soils problems for some of the areas - 120 - ANNEX 9 Page 4

surveyed now at a scale of 1:50,000 or larger are so complex that the existing surveys are not satisfactory for project planning.

9. Consideration of the preceding leads to the inevitable conclusion that insufficient soils information is available in most proposed or potential project areas for design or appraisal or even to establish a reasonable order of development priorities except perhaps where irrigation rehabilitation is being planned. The mission therefore recommends that if GOI is intending to continue its irrigation development and if, as indicated in Table 1, most of this development is likely to be new areas, then increasing attention will need to be given to careful and detailed soil surveys of potential irrigation areas. To do this, the GOI should increase its capacity for carrying out soil surveys of potential development areas at an appropriate development scale and detail commensurate with the known or potential appraisal problems. This should be done as soon as possible so that project planning, design and appraisal will not be delayed by lack of soils information known to be essential. As a component of this planning for soil surveys, the mission considers it essential that soil survey contracts be accompanied by terms of reference which will ensure that the information required for project planning will be obtained and that the information will be analyzed and presented in a uniform manner. Suggested general terms of reference for such surveys are provided in Appendix B to this annex.

10. Hydrology. The Institute for Hydraulic Engineering, which is responsible to the Director General for Water Resources Development, has gradually been increasing its capability in the collection, compilation and publication of hydrologic records. Technical assistance has been provided by the UNDP aimed largely at institutional development and implementation of a national hydrologic network. However, at present, only a negligible proportion of the potential future projects have adequate hydrological information for their planning, and design.

11. A component of Irrigation XI (see Annex 4) is directed at speeding up the establishment of a nationwide network of hydrologic and climatic measurement stations by financing the acquisition of equipment and technical assistance. The number, type and location of hydrologic and climatic measurement stations included in the program were determined from the coordinated needs of the individual agencies under the DGWRD. The automatic data processing and printing equipment are supplemental to existing equipment and represent requirements to eliminate a backlog of from five to seven years in the compilation and publication of hydrologic data.

Capital Costs of Possible Future Irrigation Development

12. Assuming that quality of soil and water supplies can be assessed, then the costs and benefits for conventional run-of-the-river gravity irrigation systems can probably be estimated with reasonable accuracy on the basis of experience. The cost of new developments in areas where irrigation systems have not been built before will undoubtedly be more difficult to estimate. Cost estimates for rehabilitation projects should pose little difficulty. However, there is still significant uncertainty concerning the - 121 -

ANNEX 9 Page 5

development costs of swamp and tidal land developments. The types of drainage, the water control mechanisms, the optimum cropping pattern and cropping calendar, the best varieties and their input requirements, the most efficient water management and many other related questions are all the object of intensive investigations at present.

13. Despite the difficulties involved in making an accurate cost estimate for different types of development, some broad assessment of the cost indicated by the inventory of potential projects may be useful if only to underline the magnitude of the program envisaged by the DGWRD. Recent Bank reports appraising irrigation projects in Indonesia have estimated the cost of rehabilitation of conventional run-of-the-river gravity systems, including the cost of tertiary development, can range between $1,000 and $2,000 per ha (mid-1978 prices). Development costs for new gravity systems in Indonesia including the construction of a storage vary considerably in terms of cost per ha serviced; however, recent experience, together with information available from feasibility reports for future projects, suggests a range of cost between $2,500 and $3,500 per ha serviced.]1 So far as swamp or tidal swamp development is concerned cost estimates need to be even more tentative. The information available to date suggests development costs in the range of $1,000 per ha to $1,500 per ha./l Applying these estimates to the inventory of future possible projects identified by the DGWRD suggests a total development expenditure of about $14,400 million in mid-1978 prices.

/1 No account is taken in these estimates of the cost of power generation or flood control. This estimate does not include the cost of transport and housing for transmigrants. It includes the cost of physical contingencies, but not price contingencies. - 122 -

ANNEX 9 Page 6

Type of irrigation Average unit Estimated total development /a Area capital cost/b capital cost/b (m ha) ($/ha) ($ m/ha)

Gravity - New development/c 4.02 3,000 12,060 - Rehabilitation 0.30 1,500 450 Subtotal 4.32 12,510

Swamp and tidal 1.28 1,500 1,920 land development

Total 5.65 14,430

/a Groundwater development is not included in this table since information on potential area and costs is very uncertain.

/b Mid-1978 prices, excluding costs associated with the transport and settlement of transmigrants, but including physical contingencies. Costs do include an allowance for land clearing and leveling where applicable (see Annex 10, Tables 10, 11 and 12).

/c Some would include storages. These would be of varying sizes; the average unit capital cost assumed would allow for some storages.

14. Table 2 shows that while all rehabilitation work can probably be achieved relatively quickly (five years would not be an unreasonable expectation), the new development work will clearly need at least 30-40 years and probably longer before it could all be fully completed. By way of comparison, it is perhaps useful to recall the achievements during Repelita I and II, Table 2.4 in the main text shows that during Repelita I, DGWRD rehabilitated about 190,000 ha per year and achieved about 38,000 ha of new development. As suggested in Annex 4, much of the work was not actually completed during Repelita I and was carried over to the next Five Year Plan. During Repelita II it is likely that some 100,000 ha of rehabilitation (probably of a higher quality than during Repelita I) will be finished with perhaps an average of 75,000 ha of new development and 50,000 ha of tidal land development per year.

Impact on Rice Production of Irrigation Development Potential

15. The impact of the irrigation development potential on rice production in Indonesia is made difficult not only by uncertainties about the pace at which development will proceed, but also by doubts concerning farmer - 123 - ANNEX 9 Page 7

response to the availability of irrigation facilities, the extent to which farmers use improved crop inputs, their crop management capacity, climatic factors, and the capacity of farmers to combat disease and insect attack. However, using assumptions about incremental production similar to those used in recent Bank appraisals of irrigation projects as a basis, the impact of the potential irrigation development is estimated as leading to an incremental annual production of about 18.7 million tons paddy or about 11.8 million tons of rice./l In addition the production of other crops such as corn, soybeans and vegetables would also be expected to increase. Table 3 provides the basis of the increased rice production estimates, the table below provides a summary.

Type of irrigation Incremental yield Incremental development Area of rice annual rice production (million ha) (ton paddy/ha) (million ton paddy)

Gravity - New development 4.03 2.0 16.10 - Rehabilitation 0.30 1.0 0.60

Subtotal 4.32 16.70

Swamp and tidal land development 1.28 1.5 1.92

Groundwater 0.05 1.5 0.07

Total 5.56 18.69

16. Any estimate of the rate of irrigation development in the future will need to take into account the projects started during Repelita III (more details concerning this issue are given in Annex 11). It is the mission's conclusion that, given changes in the organization of the DGWRD (see Annex 7) and sufficient financial resources, it should not be unreasonable for the GOI to plan for a steady program of 500,000 ha of new conventional gravity irrigation development, and 250,000 ha of swamp and tidal land development each 5 years as well as some 100,000 to 300,000 ha of rehabilitation which would be predominantly the rehabilitation and construction of tertiary systems. This future activity could be structured as a five yearly rolling program with development of any particular area usually being started in one five-year period and completed in the next. However, on average it is to be

/1 The conversion ratio used here to convert paddy to rice (0.63) is of course likely to improve over time and hence when the projected development is achieved the resultant rice production, given the assumptions, may well be much higher than 11.8 m tons. - 124 - ANNEX 9 Page 8

expected that in any one year the engineering work for 100,000 ha of new gravity irrigation and 50,000 ha of swamp and tidal development would be completed which will then come into full production about five years later.

17. Leaving aside the impact of rehabilitation work (which in the longer run should be absorbed into improved maintenance activities), it can be expected that the annual increase in paddy production, or its equivalent from these development activities will amount to a tctal of 475,000 tons paddy or about 300,000 tons rice per year. The annual cost and impact of this development on the growth rate of paddy production in Indonesia is shown in Table 4. Also shown in the table are the implications of two alternative levels of future irrigation development, one less than and the other greater than the mission's suggested expectations.

18. Although there are obviously many other options in terms of development strategies and rates of development, the above table makes the general implications of various planning scenarios quite apparent./l For the purposes of this report it can be assumed the future growth rate in demand for rice is in the vicinity of 4% p.a. It is apparent from the previous table that such a growth rate will not be achieved through irrigation development unless the implementation capacity of the DGWRD can match the mission's suggested expectations, 100,000 ha of new gravity systems and 50,000 ha of swamp and tidal each year, and a continued annual growth area of rice production from existing irrigation systems and dry land areas of at least 3% p.a. The budgetary implications are also apparent. When the cost of river and flood control ($135 million)/2 and overheads ($125 million or 25% of costs) are added, a total annual budget of about $635 million (1978 prices) is indicated if the production expectations are to be achieved. This cost compares with a budget for the DGWRD during 1977/78 (including foreign disbursements) of $425 million and a likely expenditure during 1978/79 of about $520 million. The conclusions from this broad analysis are clear: the future budget for the DGWRD will need to be increased in real terms by about 20% if the GOI is to achieve a continuing growth rate in rice production which will meet the anticipated future growth rate in demand. It is the view of the mission that the present organizational structure of the DGWRD is not in a position to cope efficiently with the increase in the megnitude and scope of activities which such an enlarged program requires.

/1 These issues together with the role of nonirrigated crops will be explored in more detail in another sector study, namely "The Supply Prospects for Major Food Crops."

/2 The DGWRD budget for flood control was $120 million in 1977/78 and is set at $165 million in 1978/79. - 125 - ANNEX 9 Table 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Areas Identified for Possible Future Irrigation Development (Service areas)

Gravity /a Swamp New and Ground- Island/Province development Rehabilitation Subtotal Tidal water Total …------______----(Ha) -…------

Java W. Java /b 82,040 32,801 114,841 1,870 - 116,711 C. Java - - - - 40,000 40,000 Yogyakarta 2,459 - 2,459 - - 2,459 E. Java 77,704/b 35,085 112,789 - 8,600 121,389 DKI Jakarta ------

Subtotal 162,203 67,886 230,089 1,870 48,600 280,559

Bali 13,628 300 13,928 - - 13,928

Sumatera Aceh 251,912 22,256 274,168 55,000 - 329,168 N. Sumatera 65,800 11,150 76,950 84,100 - 161,050 W. Sumatera 241,254 12,916 254,170 69,900 - 324,070 Riau 687,978 20,022 708,000 293,800 - 1,001,800 Jambi 181,031 6,469 187,500 - - 187,500 Bengkulu 160,110 4,890 165,000 55,000 - 220,000 S. Sumatera 271,398 1,002 272,400 38,600 - 311,000 Lampung 667,100 5,000 672,100 55,000 - 727,100

Subtotal 2,526,583 83,705 1,994,200 651,400 - 3,261,688

Kalimantan W. Kalimantan 181,200 17,800 199,000 225,000 - 424,000 E. Kalimantan 143,650 1,350 145,000 95,790 - 240,790 C. Kalimantan 352,110 4,885 356,995 25,449 - 382,444 S. Kalimantan 6,660 240 6,900 272,800 - 279,700

Subtotal 683,620 24,275 707,895 619,039 - 1,326,934

Sulawesi N. Sulawesi 133,789 10,911 144,700 2,415 - 147,115 C. Sulawesi 96,401 16,218 112,619 - - 112,619 S. Sulawesi 121,835 11,465 133,300 - - 133,300 S.E. Sulawesi 6,975 2,925 9,900 - - 9,900

Subtotal 359,000 41,519 400,519 2,415 - 402,934

Nusa Tenggara W. Nusa Tenggara 82,680 8,425 91,105 2,000 - 91,305 E. Nusa Tenggara ------

Subtotal 82,680 8,425 91,105 2,000 - 91,305

Maluku 164,450 - 164,450 - - 164,450

Irian Jaya 32,820 73,065 105,885 - - 105,885

Total 4,024,984 299,175 4,324,159 1,279 48,600 5,651,353

/a The term is used here to include conventional "run of the river" gravity and pump systems. /b Mainly areas to be served by proposed dams; irrigation systems already in existence.

Source: Directorate General of Water Resources Development, July 1978. INDONESIA

IRRIGATION PROGRAM REVIEW

Indicated Construction Capacity for Completion of Potential Irrigation Development /a

New Swamp & Tidal Ground Item development Rehabilitation Subtotal development water Total ------(ha/year) ------…

Potential irrigation development (ha) 4,025,000 299,200 4,324,200 1,278,600 48,600 5,651,400

Development period for completion by:/b

10 years 402,500 29,920 432,420 127,860 4,900 565,140

15 years 268,300 20,000 288,300 85,200 3,200 376,800

20 years 201,300 15,000 216,200 63,900 2,400 282,600

25 years 161,000 12,000 173,000 51,100 1,900 226,100

30 years 134,200 10,000 144,100 42,600 1,600 188,400

35 years 115,000 8,500 123,500 36,500 1,400 161,500

40 years 100,600 7,500 108,100 32,000 1,200 141,300

/a Base year = 1978. Irrigation development, both new development and rehabilitation amounted to some 230,000 ha per year during Repelita I and about 170,000 ha per year during the first three years of Repelita II.

/b Area which would need to be developed annually to achieve total potential area in the number X M of years indicated. Total may not add due to rounding. I % - 127 - ANNEX 9 Table 3

INDONESIA

IRRIGATION PROGRAM REVIEW

Estimated Paddy Rice Production Which Could Result From Potential Irrigation Development

Incremental Potential Assumed paddy yields /b Estimated annual paddy production paddy production Type of irrigation service Without With Without With With less without development area /a Present Xc development development Present development development development ha ------(ton/ha)------(million tons) ------…---

Java Gravity - New development/d 162,200 1.0 2.0 4.0 0.16 0.32 0.97 0.65 - Rehabilitation/a 67,900 2.5 3.0 4.0 0.17 0.27 0.41 0.14

Subtotal 230,000 0.33 0.59 1.38 0.79

Swamp and tidal dev./f 1,900 1.0 2.0 3.5 - - - Groundwater 48,600 2.0 2.0 3.5 0.10 0.10 0.17 0.07 Total 280.600 0.43 0.69 1.55 0.86 Other Islands Gravity - New development/d 3,862,800 1.0 2.0 4.0 3.86 7.73 23.18 15.45 - Rehabilttation/e 231,300 2.5 3.0 4.0 0.58 0.93 1.39 0.46

Subtotal 4,094,100 4.44 8.66 24.57 15.91

Swamp and tidal dev./f 1,276,700 1.0 2.0 3.5 1.28 2.55 4.47 1.92 Groundwater ------

Total 5,370,800 5.72 11.21 29.04 17.83 Indonesia Gravity - New development /d 4,025,000 1.0 2.0 4.0 4.03 8.05 24.15 16.10 - Rehabilitation /e 299,200 2.5 3.0 4.0 0.75 1.20 1.80 0.60

Subtotal 4,324,200 4.88 19.25 25.95 16.70

Swamp and tidal dev. /f 1,278,600 1.0 2.0 3.5 1.28 2.56 4.4B 1.92 Groundwater 48,600 2.0 2.0 3.5 0.10 0.10 0.17 0.07

Total 5,651,400 6.26 11.91 30.60 18.69 ia From Table 1.

/b For simplicity incremental yields in wet and dry seasons assumed the same. See footnotes 1c and /d for assumptions on cropping intensity. Some totals may appear incorrect because of rounding.

/c Estimates of productivity in the present are more than usually difficult since the present status of many of these potential development areaa is not known. With rainfed and upland paddy areas together amounting to only about two million ha at present, it is clear that many of the areas identified for new irrigation development are currently not producing rice. The present yield figure is hence intended to be more in the nature of an estimate of productivity in terms of rice equivalents.

/d It is assumed that all new developments will have a final cropping intenstty of 150%, compared with only 100% without the development and at present.

/e Rehabilitation projecta assumed to achieve 1501 cropping intensity at full development and 133% without development and 100% at present.

/f Swamp and tidal projects are assumed to have 100% cropping intensity at present and in the future. - 128 - ANNEX 9 Table 4

INDONESIA

IRRIGATION PROGRAM REVIEW

Broad Outline and Implications of Suggested Future Irrigation Program

Mission's Mission's Mission's low suggested /a high Item Unit expectations expectations expectations

Projected Average Annual Completion Rate - Gravity ha/yr 80,000 100,000 120,000 - Swamp and tidal ha/yr 40,000 50,000 60,000

Total ha/yr 120,000 150,000 180,000

Cost of development /b - Gravity $ million/yr 240 300 486 - Swamp and tidal $ million/yr 60 75 90

Total $ million/yr 300 375 576

Additional paddy production /c - Gravity ton/yr 320,000 400,000 480,000 - Swamp and tidal ton/yr 60,000 75,000 90,000

Total ton/yr 380,000 475,000 570,000

Average annual growth rate in production (1978-2000)/d - zero growth rate without projects % 1.4 1.7 2.0 - 3% growth rate without new projects x 3.8 4.0 4.2

/a These expectations assume a change in the organization of the DGWRD along the lines indicated in Annex 7.

/b Using the expected development costs assumed in the table following para. 12. Does not include price contingencies. Estimates in 1978 prices.

/c Using the increment between expected production with and without irrigation development assumed in Table 3.

/d These are the average annual growth rates which result when the estimated incremental production from investment indicated in the table is added to the expected production between 1978 and year 2000. Two assumptions are made about the growth rate of future production without the indicated investment. It is first assumed that there will be no growth in production without these new projects, secondly that there will be a 3% growth rate without these new projects. Ongoing and Bank Group-assisted project are assumed to be part of the total development program. - 129 - ANNEX 9 Table 5

INDONESIA

IRRIGATION PROGRAM REVIEW

Tentative List of Proposed Storage Projects on Java

Estimated active Name of storage project River Province (mln cu m)

Jatigede Cimanuk West Java 1,500 Matenggeng Cijolong/Citanduy West Java 415 Manenteng. Cisanggarung West Java 248 Ciamis/Cikembang Citanduy West Java 163 Pangkalan Cibeet West Java 950 Parungbadak Cisedane West Java 200 Jragung Jragung Central Java 133 Ngrambat Serang Central Java 195 Glapan Tuntang Central Java 364 Wonogiri Bengawan Sala Central Java 660 Mrica Serayu Central Java 180 Maung Merawu/Serayu Central Java 370 Karangsambung Lukulo Central Java 300 Bantarkawung Pemali Central Java 661 Cijangkelok Cisanggarung Central Java 264 Karang Anjar Comal Central Java 304 Bantarsari Pemali Central Java 253 Jipang Bengawan Sala East/Central Java 920 Bendo Madiun East Java 86 Badegan Madiun East Java 138 Palasari Tukad, Sengiang, Gede Bali 15

Total . 8,319/a

/a Total storage availability of this magnitude would probably be sufficient to irrigate about 500,000 ha of rice per year under Javanese conditions.

Source: Directorate General of Water Resources Development. - 130 -

ANNEX 9 Appendix A

INDONESIA

IRRIGATION PROGRAM REVIEW

List of Criteria Used by DGWRD in Selection of Projects for Local Financing

1. The following main criteria are used:

(a) Priority should be given to quick-yielding projects located in or near the consumption centers.

(b) The soil should be suitable for rice production.

(d) Manpower for agriculture is not a problem.

(e) No problems in transporting the products to consumers.

(f) No problems in land ownership.

(g) No problems on flood or at least the flood can be controlled easily.

(h) The project site should be easily controlled.

(i) And other factors which will enhance the implementation.

2. Further guidelines in executing prxojects are outlined as follows:

(a) Due to comparative shortage of funds, the budget should be used in the first place to rehabilitate the irrigation structures, while canals should be rehabilitated as much as possible by means of "aided self-help," especially in densely populated rural areas.

(b) In these areas construction work should be done mainly and in the first place by manual labor, while equipment should be used only to support manual labor where necessary.

(c) Where equipment is needed for new construction works or large rehabilitation projects, loans for foreign currency will be obtained from international lending agencies or donor countries.

(d) It is the Government's policy that tertiary canals should be dug by the farmers themselves, based on plans and design made by the project. Assistance may be given for the construction of tertiary structures and heavy parts of the canals only. (To some extent the Government's policy on farmer involvement in the construction of tertiary canals is being modified as the Government becomes more closely involved financially with tertiary construction). - 131 - ANNEX 9 Appendix B Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Terms of Reference for Soil Surveys in Potential Irrigation Areas

1. One of the features of future irrigation development in Indonesia is that most projects will be in areas which have not been used for irrigated crops and in many cases have not even been used for agriculture. One of the important issues to be considered in the planning for these irrigation developments is the suitability of the soils for irrigated crops.

2. A review of the Terms of Reference (TOR) used in Indonesian soil surveys shows that-most are similar, regardless of marked differences in soil complexities, crop production and project development problems and survey objectives. Moreover, none of the TOR's specifically require presentation in the survey reports of the kinds of summary data and specific recommendations regarding measures to be taken to overcome soil constraints during project planning and/or project implementation. The reports produced in the past varied widely in usefulness, and even the more useful ones were at times too generalized to provide the specific information needed by planners and engineers.

3. It should be emphasized that the results of any soil survey can be presented in a manner both understandable and useful to planners and engineers, but this will be done only if the desired information is specified in detail in the terms of reference. Also, it should be noted that appropriate terms of reference can be drawn up only after a highly skilled soil surveyor has made an initial reconnaissance study of the project area and has identified the principal crop production constraints, both permanent and,remediable, as well as the detail required in the survey so that the major issues can be analyzed and resolved.

4. The TOR must be flexible, making it the responsibility of the organization undertaking the survey to investigate soil characteristics or problems not identified in the reconnaissance survey. The participation of both planners and engineers in reviews of the original TOR is obviously important for maximum utility of the soil survey results.

Broad Content of Terms of Reference L1 5. The following items should be explicitly covered in the terms of reference for soil survey contracts:

L1 To a large extent these suggestions are based on proposals already put forward by the Soils Research Institute, Bogor. - 132 - ANNEX 9 Awpp,dix B Page 2

(a) Objectives - The objectives and type of survey should be specified.

(b) Location - The survey area must be clearly indicated on a map with sufficient physical reference points to locate the boundaries.

(d) Working Base - Aerial photographs, mosaic, topographic map or plane table. The TOR should state the minimum acceptable scale for the soil maps.

(e) Maps Required - Indicate the soils, vegetation, current land use, topography, potential land use and land classes, specifying the criteria used for the classification.

(f) Design of Rentis Layout - This should be determined by the surveyors after preliminary analysis of the available information.

(g) Intensity of Observations - Under average conditions one soil observation per 12.5 ha is likely to be adequate for a 1:25,000 scale presentation. The intensity will, however, vary according to the nature of the terrain, complexity of the soil patterns and the objectives of the survey.

(h) Methods of Soil/Land Survey, Classification - Methods of survey to be employed and the types of land classification to be presented should be agreed between the client and the soil surveyor.

(i) Soil Sampling - One or more soil profiles should be fully described both chemically and physically for each major soil mapping unit and additional analyses should be done as required by the nature of the problems encountered. Where additional analyses are needed, the samples should consist of the surface 30 cm and three additional samples to a total depth of at least 1.5 m.

(j) Final Survey Report - In addition to presenting the material required in the TOR and outlined above, the mission calls attention to the fact that the items which are of paramount importance to planners and engineers and which seldom if ever have been included in Indonesian soil survey reports are:

(i) summary tables of the areas affected by each separate and by combinations of soil constraints (e.g., salinity, waterlogging, thickness of peat, acid sulphate, fertility status, etc.);

(ii) indication, in the case of each constraint or combination, of the proportion of the areas slightly, moderately and severely affected; - 133 - ANNEX 9 Appendix R B Page 3

(iii) the cost in qualitative or semiquantitative terms of removing each of these constraints;

(iv) the economic and social benefits, both immediate and future, in qualitative or approximate quantitative terms (e.g., the increases in crop yields) that would result from the removal of each constraint or combination; and

(v) specific recommendations from the soil surveyors for amelioration or reclamation of each category of affected land, subject of course to confirmation by more detailed economic analyses. - 134 - ANNEX 10 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Economics of Potential Future Irrigation Development

1. The purpose of this Annex is to contrast and compare the economics of the major types of future irrigation development in Indonesia (see Annex 9). The types of development considered here are conventional, run-of- the-river gravity irrigation development, tidal land development, and a large storage-based irrigation development based on a large storage. Three basic models for these types of development are evolved in this annex. Two of these basic models apply to hypothetical, but realistic situations in Sumatera. The third (the large dam development) applies to a situation in Java./l Because the water resource developments examined in this annex are relatively new to Indonesia, it is inevitable that the analysis which follows is to some extent speculative. However, where possible, the results and experience of the initial pioneering developments that do exist have been used to provide the basis for assumptions made.

2. Method of Analysis. Because of the lack of data on development costs for the hypothetical models, the analysis concentrated on assessing the maximum level of development cost which will still allow the project to achieve a predetermined economic rate of return./2 Using this approach it was possible to derive the present value of the total cost stream. This imputed cost estimate, defined in terms of the present cost (mid-1978 prices) per ha of development, then became the assessed maximum allowable development cost assuming that the predetermined economic rate of return is to be achieved.

3. Indicative project costs based on best estimates are given in Tables 10 and 11. The cost estimates utilize unit rates and actual project cost experience elsewhere, adjusted to the assumed project model conditions. These indicative cost estimates, stated on a per hectare basis, can be compared with the imputed costs resulting from the analysis for each model described above.

/1 While "Sederhana" or simple irrigation projects are an important part of the Government's portfolio of potential future irrigation development, the economics of these projects were not considered here because the characteristics of these projects are so variable, that typical cases are impossible to define. It should perhaps be noted here that the DGWRD is currently engaged in a systematic analysis of many potential sederhana projects with a view to ranking them for future financing and construction.

/2 It was assumed that 15% would be the minimum acceptable economic rate of return. This is an arbitrary benchmark and does not imply any judgment about Bank policy nor of the opportunity cost of capital in Indonesia. - 135 - ANNEX 10 Page 2

4. Both the conventional new irrigation development in the Other Islands and the tidal land reclamation projects analyzed in this annex are pioneer projects in that much of the area to be developed is currently virgin land and unsettled. A number of assumptions are therefore possible concerning alternative future uses for the project area in the absence of the project. In this analysis, however, it is assumed that the future development of the project area without the project will be a continuation of current land use trends, usually timber cutting and hunting.

5. A more detailed investigation of the likely future alternative use for the project areas would probably show that the area set aside for the conventional irrigation project would have more development alternatives than the tidal areas, some of which could possibly yield equally favorable social and economic rates of return. It is beyond the scope of this review to examine in detail the relative economic merits of alternative development possibilities. In the case of the model for the large storage-based dam development on Java, in addition to making assumptions about future incomes from the target area without the project, it is necessary to make assumptions about losses of production and relocation costs because of dam construction.

Conventional (Run-of-the River) Irrigation Development

6. Characteristics of the Model. The basic model is patterned after a straightforward, run-of-the-river project with no special distinguishing characteristics. A project size of 10,000 ha net is assumed./l A project of this size is large enough to realize economies of scale with respect to mobilization of equipment and manpower, and to the provision of administrative and support services.

7. The project model assumes a location in western Jambi province, in central Sumatera. The general location, poorly developed, with a low population density and little infrastructure, has been designated by the Government as one of the major future transmigration receiving areas in the nation. A prereconnaissance survey by the Directorate General of Water Resources Development (DGWRD) in this general area has found that there are likely to be sufficient water supplies to support irrigation projects of the scale proposed in this analysis. Characteristics of the project site, which may become increasingly common to rural development in islands other than Java, are remoteness from major population and market centers, poorly developed transportation and marketing systems, with substantial land clearing and land development requirements.

/1 10,000 ha suitable for paddy cultivation, net of project infrastructure, house plots, etc. - 136 -

ANNEX 10 Page 3

8. The basic farm holding is assumed to be 1.25 ha of which 1.0 ha is in paddy (Sawah) land, detached from a house/garden lot of 0.25 ha. A farm holding of this size is consistent with recent irrigation projects developed for transmigrants on the Other Islands./li

9. All benefits assumed in this model are derived from agricultural production, 95% of which is derived from irrigated rice cropped at an intensity of 150% at full development. About 5% of the net value of crop production is derived from mixed garden and tree crops grown in the house/ garden compound.

10. Purchased inputs, crop production costs, labor requirements, rice and fertilizer prices and a farm budget during the development period are given in Table 1, 2, 3, 4 and 5. The yield assumptions, shown in Table 5 are based on those used in Bank appraisal reports for projects with similar, if not inferior, soils. Improved standards of management, the use of HYV rice, good water control and a high standard of supporting agricultural services are assumed for the future.

11. While the assumed cropping intensity at full development (150%) is greater than cropping intensity assumed for some Bank appraisals of run-of-the- river projects elsewhere in Indonesia, many of the potential locations for irrigation development in the Other Islands have relatively more, and better distributed, rainfall and hence more regular river streamflow than in Java. It is expected that the more attractive physical environment would enable a higher average cropping intensity than in Java. Also, the catchment areas are, as a rule, well-forested and siltation in the lower reaches of most rivers has not yet become a major problem; with conservation of the catchment it should not become a problem in the future.

12. The labor requirements for crop production are supplied mainly by family labor although for transplanting and harvest the use of some hired labor is assumed. Land preparation is done by hired draft animals on a con- tract basis. Should the farmers be able to purchase draft animals in the future, direct land preparation costs could be reduced.

13. Net Benefits Without the Project. The net income foregone from the project area because of the project will depend on assumptions made concerning the present and future use of the land. Based on general land use conditions in the vicinity of the hypothetical project being modelled in this example, the future situation without the project can be approximated as follows:

/1 For example Sitiung/Sungai Dareh in West Sumatera. - 137 - ANNEX 10 PJ?a e 4

Rubber (productive and unproductive) 3,200 Wet rice 1,300 Mixed rainfed annual crops 2,000 Dense primary and secondary forest 2,000 Unproductive brush, alang-alang swamp 1,500

Total 10,000

14. The future land use situation assumes that considerable expansion of agricultural activities will occur over the 12-year period 1978-90 as a result of spontaneous settlement. The annual net income foregone in the future at full development, expressed in 1978 constant prices, is calculated as follows:

Annual Annual Crop Area net return area net return (ha) (Rp/ha) (Rp million)

Rubber 3,200 44,500 142.4 Rice 1,300 95,000 123.5 Mixed annuals 2,000 52,000 104.0 Forest 2,000 7,500 15.0 Unproductive land 1,500 - -

Total 10,000 - 384.9

15. Project Development Phasing. The assumed development schedule is shown below:

Construction Area under cultivation Year costs Incremental Total (%) ------(ha) ------

1 5 2 25 3 35 4 20 1,500 1,500 5 10 2,000 3,500 6 5 2,500 6,000 7 - 3,000 9,000 8 - 1,000 10,000 - 138 -

ANNEX 10 Page 5

Once a given area is brought under command, it is assumed that six more years are required for the attainment of full project benefits.

16. Development Costs. While the principal objective of the analysis is to determine that level of development costs above which the economic rate of return will fall below 15%, an attempt has been made to derive an individual development cost. It is assumed for the purposes of this model that conventional irrigation projects in the Other Islands will incur costs for clearing as well as land and paddy development. These costs would be in addition to the usual irrigation development costs. All these items are indicated in Table 10.

17. Economic Analysis. Project benefits are discounted over a 30-year period, beginning in 1978 (Year 1). The results of the analysis are given in Tables 8 and 9. On the basis of the assumptions made in deriving the core or basic model, the economic rate of return of a conventional run-of-the- river gravity irrigation project is likely to be 15% provided all development costs, including those costs involved in placing settlers on the project, as well as physical contingencies, do not exceed Rp 1,620,000 per ha (about $3,900 per ha) in terms of mid-1978 prices. By way of comparison some very tentative cost estimates for a gravity run-of-the-river project have been pre-sented in Table 10. If the estimate indicated in that table (Rp 1,744,000/ha or $4,200/ha) is correct then the preceding analysis suggests that projects showing a return of 15% are a possibility, although obviously tVie chances of some being marginal is significant. Each project will have different characteristics and will need to be examined separately.

18. Income Position of Farmers. The financial cash flow of the transmigrant farmer family from the first year of settlement through the time when production benefits attain maximum levels is shown in Table 5. Under the assumptions of the model annual family incomes will reach Rp 413,00 ($995) at the end of the sixth cropping year. Per capita incomes will be about Rp 75,100 ($181) assuming an average family size of 5.5. This compares with an estimated absolute poverty level in Indonesia for 1975 of $95 per capita. About 92% of family income at full project development is derived from crop production.

19. Sensitivity Analysis. As there are few, if any, existing projects that possess all of the characteristics of the model designed to simulate a pioneering conventional irrigation project, the model incorporates a compos- ite of features from several outer-islands projects adapted to the assumed physical and geographical setting. The sensitivity analysis tested the

/1 It should be noted that this analysis uses a shadow exchange rate of foreign exchange of US$1 = Rp 520. Recently a rate of US$ 1 = Rp 490 has been used in project appraisals. Such a change would have an insig- nificant impact on the results of the analysis discussed here. - 139 - ANNEX 10 Page 6

impact of changes in the rate of land development, rice price level and level of benefits on the results of the economic analysis. The results of the sensitivity tests are given in Table 9.

Tidal Land Reclamation

20. Characteristics of the Model. The basic, or core, model is patterned after existing government projects. The model incorporates the predominant technical and physical characteristics of tidal swamp projects which were started during the final years of Repelita I and developed further during Repelita II. Many of these projects are still in progress. A project size of 10,000 ha, net, is assumed for the model. The project would be large enough to realize economies of scale with respect to construction and administrative/supporting service, and in the light of available evidence it seems reasonable to believe that a contiguous 10,000 ha block with good soil could be located. It is necessary to assume a geographic location for the project so that farm-gate product and input prices can reflect transport and other marketing costs. The assumed location is in the tidal swamps of South Sumatera, about 100 km downstream from the city of Palembang. The South Sumatera location was selected because some data are available for that area.

21. The basic farm holding is assumed to be a field plot of 1.75 ha and a house/garden lot of 0.25 ha intended for transmigrants. The detached field plot may be from 1 to 3 km from the farm house. Some existing projects give the transmigrants two field plots in different locations to diminish the risk of the farmer receiving a total holding of less than average soil quality. The basic model assumes all benefits are derived from agricultural production, 90% of which consists of the output from one crop of rainfed rice. The remainder is derived from a small area of mixed annual food crops and perennials grown in the house/garden compound.

22. Purchased inputs, crop production costs and labor requirements, rice and fertilizer prices and a farm budget are given in Tables 1, 2, 3, 4 and 6. The yield assumptions shown in Table 6 are based in part on realized test farm and demonstration plot yields in several small ongoing tidal projects, in part on professional agronomic opinion regarding the potential of the soils in tidal lands, and in part on realized yields from farmers' fields reported in recent farm surveys. It is implicitly assumed that adequately detailed soil surveys will be completed prior to final settlement and farm layout, and that areas with problem soils will be avoided.

23. Farm fertilizer recommendations have not been formulated for soils in existing tidal land development areas. Therefore the fertilizer input levels specified in the crop budgets are not based on specific recommendations. However the cost of a recommended nutrient package, given the assumptions concerning yields and soils, is not expected to be significantly different from the cost used here. - 140 - ANNEX 10 Page 7

24. Yields of rice (dry rough rice, or Gabah Kering) are projected to rise from 1.5 tons/ha in year 1 to 3.5 tons/ha in year 6 for a given development block. These yield projections take into account the possibility of yield reductions due to drought in some years, although tidal swamp rainfed rice is less subject to drought effects than are rainfed rice crops outside the swamps. Recent crop-cutting surveys indicate that farmers on the preferred tidal land soils in the pioneer developments on tidal areas in Jambi and South Sumatra are already obtaining yields of 2.5 to 3.0 tons of paddy per hectare using long maturing local varieties and no fertilizer. There is as yet no firm evidence that yields are declining after some ten years of continuous cropping, although some observers have noted a tendency for some spontaneous settlers to adopt a shifting type agriculture leading to specula- tion about declining fertility in some areas.

25. Cropping activities are performed by combinations of hired and family labor. Hired labor, in combination with family labor, is mainly used for land preparation, transplanting and harvesting. Labor employed for land preparation and transplanting is paid a cash wage, while harvesting labor receives a share of the crop. Available family labor supplemented by hired labor and informal labor exchange should be adequate to handle 1.75 ha of rainfed paddy at full project development. It is assumed that the sickle will eventually replace the ani-ani finger blade in harvest operations.

26. It is assumed that land preparation will continue to be performed manually, using hoes or a "scalper" blade which cuts the weedy growth just below the soil surface. At present draft animals are virtually non-existent in the existing tidal projects. Cattle are probably not suitable because of the long period during which much of the land is inundated or saturated in the wet season, however, it is not immediately apparent why buffalo are not present even in Jambi where settlement of tidal lands was started more than ten years ago. Because of the unanswered questions concerning the suitability of draft animals their use is not assumed in the crop budgets used to simulate future development.

27. Project Area Income without the Project. The most probable use that would be made of the project area, were it not developed by Government, would be that either it would remain a dense second growth swamp forest or that it would be eventually developed by spontaneous settlers. The model assumes that in the absence of government activity spontaneous settlers would, over a period of 15 years, develop 40% of the area and that the remaining 60% would remain a secondary growth swamp forest. Although it is assumed that the entire 10,000 ha is suitable for agriculture it is unlikely that unassisted settlers would have the technology or engineering skills to effect the development of the area, particularly those parts some distance away from natural drainage channels. Almost all the spontaneous settlement in the tidal lands at present is on the periphery near rivers and channels.

28. The income foregone from the land used for the project would then be the net value of production from spontaneous agricultural development on 4,000 ha and the net annual return from a second growth swamp forest of - 141 - ANNEX 10 Page 8

6,000 ha./l Table 7 gives estimates of the net farm income of a spontaneous settler. The figures are derived from 1977 survey data on spontaneous settlers in the swamps of Jambi and South Sumatera./2 It is assumed that a given farm will require eight years to reach the indicated "future" yield levels and net returns. The estimation of net income foregone from spontaneous development is based on the net value of production from a single crop of rainfed rice a year and a modest number of coconut trees. Income from other sources such as trading and fishina is not included as these activities are likely to continue irrespective of a government project. There is little data on which to base an estimate of net annual returns from a secondary swamp forest. It is estimated that the return to the nation from occasional noncommercial logging, firewood production and hunting is about Rp 10,000 ha/annum. The weighted average annual opportunity cost or income foregone in mid-1978 prices from the land is estimated to be:

(40% x Rp 110,000) + (60% x Rp 10,000) = Rp 50,000/ha 100

29. Project Development Phasing. Construction, survey and design, is assumed to extend over seven years. During this period land clearing and on-farm development will be completed, as will the construction of the "social" infrastructure such as markets, schools, health facilities and the like. The assumed development program is represented by the table below:

Area under cultivation Year Physical works Incremental Total (% of cost) ------(ha) ------

1 5 2 15 3 20 4 20 2,000 2,000 5 20 2,500 4,500 6 15 3,000 7,500 7 5 2,500 10,000

/1 The 10,000 ha net in rice fields requires the development of a gross area of about 13,750 ha. Thus 40% x 13,750 = 5,500 ha and 60% x 13,250 = 8,250 ha.

/2 "Agro Socionomic Study in the Tidal Swamp Area I Lagan, Sub-P45 Jambi" and "Agro Socionomic Study in the Tidal Swamp Area of Karang Agung, Sub-P45 South Sumatra", Wet Season Survey Reports by Agro Economic Survey, August 1977. - 142 -

ANNEX 10 Page 9

30. Economic Analysis. The benefit stream is discounted over a 30-year period, with 1978 as year 1. The results of the analysis of the basic case are given in Tables 8 and 9. On the basis of the assumptions made in deriving the basic model, the economic rate of return is likely to be 15% provided all development costs, including those involved in placing settlers on the project and physical contingencies, do not exceed Rp 1,020,000 per ha (about $2,460 per ha) in mid-1978 prices. While many technical problems associated with tidal land development still need to be resolved, the indicative costs based on experience so far suggest that total costs may be in the vicinity of $2,200 per ha and about $1,300 per ha without the cost of transmigration./I These figures suggest that the rate of return on investment in tidal reclamation could be well above 15%. However, the indicative cost figures must be regarded as tentative; they may change considerably depending on the final design and the location.

31. Income Position of Farmers. The financial cash flow of the transmigrant farm family from the first year of settlement through the period when production benefits attain maximum levels is given in Table 6. Under the assumptions of the model, annual family incomes will reach Rp 414,400 ($1,000) at the end of the sixth cropping year. Per capita incomes will be about Rp 75,300 ($182),/2 assuming an average family size of 5.5. About 92% of family income at full development is derived from crop production.

32. Sensitivity Analysis. Although the basic model bears a close technical and physical resemblance to existing tidal swamp development projects a number of assumptions have been made concerning implementation and support activities, agronomic responses and farmer behavior which do not represent the present situation. While it is believed that the assumptions are realistic there is a possibility that the assumptions may not be realized, or more likely, that the assumptions may be only partially realized. Conse- quently, the sensitivity analysis concentrates on those assumptions which the mission considers most likely not to be achieved, and which could have a significant bearing on the economic rate of return. The results of the sensitivity tests are summarized in Table 9.

Large Storage-Based Irrigation Development

33. Characteristics of the Model. One of the options facing the Government in terms of future irrigation development in Indonesia is the construction of large storages to improve the water supply to existing irrigation projects and to extend the areas irrigated. It is likely that most of these storages will be suitable for the generation of power, and flood

/1 It should perhaps also be noted here that the force account costs for tidal land development in recent years has been significantly below $1,000 per ha. On the other hand, the requirements for improved water control in future developments may bring a substantial increase in costs. /2 Mid-1978 prices. - 143 -

ANNEX 10 Page 10

control, but at the same time many will necessitate the inundation of useful farm land as well as the relocation of rural people. There are a number of such potential schemes in Java, one of the largest being the Jatigede multipurpose project in Central Java (see Table 4 in Annex 9). The hypothethical model chosen here exhibits many similarities with that project although there is no intention here to provide a complete analysis of the project. For example the model analyzed will not include the potential benefits and costs of power generation.

34. For the purposes of this analysis it is assumed that the total project area is 100,000 ha with rehabilitation planned for 80,000 ha and extension of 20,000 ha, with farms in the project area having an average size of 0.5 ha. A simplification adopted for the purposes of this illustrative model is that the only crop considered in the analysis is rice although it is likely that in an actual situation some other crops such as soybeans and sugarcane would be irrigated.

35. Purchased inputs, crop production costs, labor requirements, rice and fertilizer prices are given in Tables 1, 2, 3 and 4. Yield assumptions shown in Table 8 are in line with the assumptions used for current Bank appraisals in Central Java. Similarly input requirements and labor costs are also based on assumptions made in current reports.

36. Economic Analysis. Estimated income from the project area without the project and the results of the economic analysis are indicated in Table 8. On the basis of the assumptions made in deriving the model, the economic rate of return from a large storage based irrigation development in Central Java, could be about 15% if total costs do not exceed about $3,700 per ha. Costs of dam, channel construction and land preparation for a large project such as the one simulated in this analysis have typically been in the vicinity of $3,000 to $3,500 per ha. (No detailed estimates have been attempted here because of the substantial variations possible due to type of terrain, geological conditions, size, and type of dam and service area.) To this cost will need to be added the cost of moving farmers and villagers from inundated areas and resettling them; in total costs could exceed the notional benchmark estimated above. On the basis of these tentative results it cannot be assumed that the economic rate of return from larger dam construction will exceed 15%. Each proposal, however, will be different and will need to be considered separately. In addition, there may be many other economic and noneconomic reasons for undertaking such projects which have not been considered in this analysis. - 144 - ANNEX 10 Table 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Purchased Inputs at Full Development for Three Hypothetical Water Resource Development Models /a (Unitsiha)

Conventional Tidal Large storage- irrigation reclamation based irrigation Wet Dry Wet Wet Dry Item/activity Unit season season season season season

Land preparation Animal (animal-day)/b 15 15 - 20 15 Man (man-day) - - 30 - - Transplanting (man-day) 18 18 20 - - Seed (kg seed) 30 30 35 30 30 Fertilizer /c Urea (kg/ha) 150 150 150 200 200 TSP (kg/ha) 100 100 100 50 50 Plant protection /d (package) - diazinon (1) 2 2 2 2 2 - zinc phosphide (gm) 200 200 200 200 200 Harvesting /e (% share of crop) 6 6 5 3 3 Interest /f Institutional credit (%/mo) 1 1 1 1 1 Noninstitutional credit (%/mo) 2 2 2 2 2

/a Cash inputs only; unpaid family lauor not included.

/b Economic cost (same as financial cost) at Rp 1,000/day for draft pair and driver.

/c Urea 46% N; TSP 46% P205. /d Package containing 2 liters diazinon or equivalent and 200 gm zinc phosphide (rodenticide).

/e 40% to 50% of harvest done by hired labor on 12.5% share basis.

/f Institutional credit finances purchase of seed, fertilizer and insecticide for 6 months at 1% per month; noninstitutional credit to finance 75% of hired labor cost of land preparation and transplanting for 6 months at 2% per month interest. - 145 - ANNEX 10 Table 2

INDONESIA

IRRIGATION PROGRAM REVIEW

Crop Production Costs: Full Development /a

Tidal Large storage- Conventional irrigation reclamation based irrigation /b Item Wet season Dry season Wet season Wet season Dry season

------(Rp '000 per ha) ------

Cash costs /c Land preparation /d 15.0 (15.0) 15.0 (15.0) 9.0 (12.0) 20.0 (20.0) 15.0 (15.0) Transplanting 4.5 ( 5.8) 4.5 ( 5.8) 5.1 ( 6.7) - ( -) - ( -) Seed 3.2 ( 2.6) 3.2 ( 2.6) 3.8 ( 3.1) 4.2 ( 3.3) 4.2 ( 3.3) Fertilizer 33.5 (26.2) 33.5 (26.2) 31.7 (26.2) 33.9 (26.9) 33.9 (26.9) Plant protection 8.0 ( 8.0) 8.0 ( 8.0) 8.0 ( 8.0) 8.5 ( 2.0) 8.5 ( 2.0) Harvesting 24.0 (20.0) 24.0 (20.0) 17.5 (14.0) 14.0 (11.2) 14.9 (11.2) Other 3.0 ( 3.0) 3.0 ( 3.0) 3.0 ( 3.0) 3.0 ( 3.0) 3.0 ( 3.0) Interest - ( 4.1) - ( 4.1) - ( 4.2) - ( 3.2) - ( 3.2) Taxes /e - ( 8.7) - ( 8.7) - ( 7.3) - (11.0) - (11.3)

Total 91.2 (92.4) 91.2 (92.4) 78.1 (84.5) 83.6 (80.6) 78.6 (75.9)

------(man-days per ha) ------

Labor inputs (man-days/ha) Land preparation 30 30 50 40. 40 Planting 35 35 40 40 40 Crop management 55 55 60 90 90 Harvesting 35 35 30 60 60

Total 155 155 185 230 230

Hired labor (man-day/ha) Man-days 18 18 50 - - Animal days 15 15 - - -

/a Economic and financial costs expressed in constant mid-1978 prices; financial costs in parentheses.

/b To a large extent these costs are based on the Bank appraisal of the Kali Progo project (see Indonesia, irrigation X, Staff Appraial Report, May 1, 1978, Report No. 1872b-IND).

/c Inputs and prices taken from Tables 1, 3 and 4. Cost of hired labor included in cash costs.

/d Average wage rates at full development for hired labor.

Other Islands Java (Conventional and (Large storage- tidal irrigation) based irrigation) Economic Financial Economic Financial ------…-…--(Rp/day) ------

Man 300 400 130 n.a. Woman 200 250 n.a. n.a.

n.a. - not applicable.

/e IPEDA land tax calculated at 5% of the annual net value of production including a cost allowance for unpaid family labor. - 146 - ANNEX 10 Table 3

INDONESIA

IRRIGATION PROGRAM REVIEW

Commodity Price Structure /a Rice

Large storage- Conventional irrigation Tidal reclamation based irrigation Iteam (Jambi) (South Sumatera) (Central Java) Rp/ton lb $/ton Rp/ton /b $/ton Rp/ton /b $/ton

1978 Export price, Thai 5x-42% brokens f.o.b Bangkok /c 122,000 235 122,000 235 122,000 235 Ocean freight and insurance 9,000 17 8,000 15 10,500 20 Import price c.i.f. Sumatera port /d 129,000 252 130,000 250 132,500 255 Port handling 4,000 8 4,000 8 2,500 5 Handling, transport and storage to wholesale point /e 2,000 4 3,000 4 3,000 6 Wholesale imported rice 137,000 264 136,000 262 138,000 266 Transport and handling mill to wholesale /f -11,000 -21 -3,000 -6 -1,000 -2 Ex-mill rice, project area 126,000 243 133,000 256 137,000 264 Paddy equivalent (622) 78,000 150 83,000 159 86,500 166 Milling charge lesp value of byproduct jg -2,000 -4 -2,000 -4 -1,000 -2 Drying and cleaning cost -2,000 -4 -2,000 -4 -1,500 -3 Transport cost farm to mill -1,000 -2 -1,000 -2 -1,;000 -2 Farm-gate paddy 73,000 140 78,000 149 83,000 159 (Financial farm-gate)/h (65,000) (157) (65,000) (157) (65,000) (157)

1985 Export price, Thai 5x-42% brokens f.o.b Bangkok /c 156,000 300 156,000 300 156,000 300 Ocean freight and insurance 7,500 14 6,500 13 10,500 20 Import price c.i.f. Sumatera port Id 163,500 314 162,500 313 166,500 320 Port handling 3,000 6 3,000 6 2,500 5 Handling, transport and storage to wholesale point /e 1,500 3 1,500 3 3,000 6 Wholesale imported rice 168,000 323 167,000 322 172,000 331 Transport and handling mill to wholesale /f -11,000 -21 -3,000 -6 -1,000 -2 Ex-mill rice, project area 157,000 302 164,000 316 171,000 329 Paddy equivalent (63%) 99,000 191 103,000 199 107,500 207 Milling charge less value of byproduct a - - - - -1,000 2 Drying and cleaning cost -2,000 -4 -2,000 -4 -1,500 3 Transport cost farm to mill -1,000 -2 -1,000 -2 -1,000 2 Farm-gate paddy 96,000 185 100,000 193 104,000 200 (Financial farm-gate)/i (83,000) (200) (83,000) (200) (83,000) (200)

/a Economic prices; financial prices in parentheses. All prices in mid-1978 constant values. Shadow exchange rate of $1.00 - Rp 520 used for economic prices; official rate of $1.00 - Rp 415 used for financial prices. Recent appraisals of irrigation projects have used a shadow exchange rate of $1.00 - Rp 490; using this amended rate does not significantly affect the outcome of the economic analysis.

lb Rounded to nearest Rp'000. Dollar and rupiah totals may not agree due to rounding.

/c Based on IBRD commodity price projections (November 1977) for Thai rice; 10% of 5% brokens, 60% of 25-35% brokens, 30% of 42% brokens.

/d Ports are Palembang and Jambi.

/e Wholesale market in port cities, which are the main consumption centers.

/f Transport by river barge in South Sumatera and by truck in Jambi. Future transport costs to Jambi project are reduced to reflect planned road improvements. ft At present, milling costs are high due to scattered, small relatively inefficient mills and the demand by byproducts is low. In the future, more efficient, competitive mills will predominate and the price of byproducts will increase with growth of the economy and population.

/h The present financial price is equivalent to the Government-supported floor price at the BUWD/KUD cooperative center less Rp 1.5/kg for drying and cleaning, Rp 2.3/kg for quality imperfections, and Rp 1.0/kg for transport, farm-to-BUWD.

/i Future financial prices are equal to the economic price converted at $1.00 - Rp 415. Taxes and market distortions are assumed to be negligible. The Government "one-price" policy is assumed to remain in force. - 147 - ANNEX 10 Table 4

INDONESIA

IRRIGATION PROGRAM REVIEW

Commodity Price Structure /a

Fertilizers

Large storage-based Conventional irrigation Tidal reclamation irri ation prolect Item (Jambi) (South Sumatera) (Central Java) Rp/ton /b S/ton Rp/ton /b $/ton Rp/ton /b $/ton

Urea: 1978 Ex-PUSRI plant; bagged /c 86,000 165 86,000 165 86,000 165 Transport to project area /d 17,000 33 3,000 6 3,000 6 Storage and handling 7,000 13 7,000 13 20,000 38 Transport to farm 1,000 2 1,000 2 1,000 2 Farm-gate 111,000 213 97,000 186 110,000 211 (Financial farm-gate)/e (71,000) (171) (71,000) (171) (71,000) (171)

1985 Ex-PUSRI plant; bagged /c 114,000 220 114,000 220 114,000 220 Transport to project area /f 12,000 23 3,000 6 3,000 6 Storage and handling 7,000 13 7,000 13 20,000 38 Transport to farm 1,000 2 1,000 2 1,000 2 Farm-gate 134,000 258 125,000 241 138,000 266 (Financial farm-gate)/g (110,000) (266) (110,000) (266) (110,000) (266)

TSP: 1978 Export price US Gulf f.o.b., bulk /h 62,000 120 62,000 120 62,000 120 Freight and insurance /i 10,000 19 10,000 19 10,000 19 Import price c.i.f Surabaya 72,000 139 72,000 139 72,000 139 Handling and bagging / 10,000 19 10,000 19 7,000 13 Transport to project area /k 18,000 35 11,000 21 7,000 13 Storage and handling 7,000 13 7,000 13 6,000 12 Transport to farm 1,000 2 1,000 2 1,000 2 Farm-gate 108,000 208 101,000 194 93,000 173 (Financial farm-gate)/e (71,000) (171) (71,000) (171) (71,000) (171)

1985 Export price US Gulf f.o.b., bulk 90,000 173 90,000 173 90,000 173 Freight and insurance 10,000 19 10,000 19 10,000 19 Import price c.i.f Surabaya 101,000 192 101,000 192 100,000 192 Handling and bagging 10,000 19 10,000 19 7,000 13 Transport to project area /f 16,000 31 12,000 23 7,000 13 Storage and handling 7,000 13 7,000 13 6,000 12 Transport to farm 1,000 2 1,000 2 1,000 2 Farm-gate 134,000 257 130,000 249 121,000 233 (Financial farm-gate)/g (97,000) (233) (97,000) (233) (97,000) (233)

/a Economic prices; financial prices in parentheses. All prices in mid-1978 constant values. Shadow exchange rate of $1.00 - Rp 520 used for economic prices; official rate of US$1.00 - Rp 415 used for financial prices. Recent appraisals of irrigation projects have used a shadown exchange rate of $1.00 - Rp 490; using this amended rate does not significantly affect the outccme of the economic analysis.

/b Rounded to nearest Rp '000. Dollar and rupiah totals may not agree due to rounding.

/c Based on I8RD world market price projections (November 1977) for bagged urea, f.o.b. Europe, adjusted to South East Asia markets.

/d Based on river transport to tidal swamp project and rail and truck transport to conventional irrigation project. For large storage-based irrigation projects in Java, it is cost of sea transport.

/e Based on current government farm cooperative (8UUD/KUD) retail selling price plus cost of transport cooperative-to-farm.

If Future transport cost to Jambi reduced to reflect planned road improvements.

/R In deriving the future financial farm-gate price, it is assumed that taxes and market distortions are negligible. The financial price is derived by converting the economic farm-gate price at the official exchange rate of US$1.00 - Rp 415. The Government "one-price" policy is assumed to continue in the future. The basis for the price level is Central Java.

/h Based on IBRD commodity price forecasts (November 1977) for TSP, f.o.b. US Gulf coast ports.

/i Freight and insurance for bulk shipment US Gulf coast to Surabaya bagging facility.

LI Cost of discharging, bagging, handling and reloading.

/k Ocean freight (interisland steamer) Surabaya to Palembang, off-loading and reloading on barge (Tongkang) and shipment to tidal swamp. Ocean freight to Jambi (interisland steamer) Surabaya to Jambi port, off-loading and reloading on trucks and truck freight to project area. - 148 - ANNEX 10 Table 5

INDONESIA

IRRIGATION PROGRAM REVIEW

Conventional Irrigation: Generalized Cash Flow for 1.0 ha Irrigated Farm during Development Period /a

Year Item Unit 0 /b 1 2 3 4 5 6

Crop Production Irrigated paddy Wet (ha) - 1.0 1.0 1.0 1.0 1.0 1.0 Dry (ha) - 0.3 0.4 0.5 0.5 0.5 0.5 Paddy yield Wet (ton/ha) - 1.8 2.3 2.9 3.4 3.8 4.0 Dry (ton/ha) - 1.8 2.3 2.9 3.4 3.8 4.0

Total annual production (ton) - 2.3 3.2 4.4 5.1 5.7 6.0

------______------(Rp '000) …-…---

Value of Production Gross value of production - 149.5 217.6 312.4 377.4 438.9 498.0 Production costs, excl. labor - 19.0 27.0 47.0 51.0 56.0 58.1 Hired labor cost - 24.3 31.0 48.0 55.0 60.0 62.7 Land tax - 1.8 3.3 6.4 8.8 11.3 13.0 Interest - 2.5 3.0 4.5 5.4 5.8 6.1 Net value of production - 101.9 153.3 211.5 257.2 305.8 358.1

Government Assistance Food /c 62.0 62.0 - - - - - Seed /d 5.0 - - - - Tools, clothing, utensils /e 25.0 ------

Subtotal 92.0 62.0 - - - - -

Off-Farm Income /f 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Home Garden - Net Value of Production /a - 10.0 15.0 15.0 15.0 20.0 25.0

Farm Family Income Farm income /h 62.0 173.9 168.3 226.5 272.2 325.8 383.1 Off-farm income 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Total annual income 97.0 193.9 188.3 246.5 302.2 355.8 413.1

/a Calendar year basis, in mid-1978 financial prices. /b Year 0 covers six months. Settlers arrive on site at end of rainy season in June-July and spend balance of year working on tertiaries and preparing sawah. lc Rice and other food sufficient to provide basic requirements for family of five. Valued at mid-1978 financial prices. /d Rice and vegetable seed. /e Standard transmigration package. /f. Based on results of surveys by Agro Economic Survey, Bogor. This income is derived mainly from the raising of ducks, chickens, fishing, wood cutting as well as laboring work. /g Miscellaneous vegetables and palawija crops consumed at home; value increases as fruit trees begin bearing in Year 5. /h Includes income from rice, garden crops and government food grants. - 149 - ANNEX 10 Table 6

INDONESIA

IRRIGATION PROGRAM REVIEW

Tidal Reclamation Model: Generalized Cash Flow for 1.75 ha Farm during Development Period /a

------Year ------Item Unit 0 /b 1 2 3 4 5 6

Rainfed paddy Wet season (ha) - 1.40 1.60 1.75 1.75 1.75 1.75 Paddy yield (ton/ha) - 1.5 2.0 2.6 3.0 3.3 3.5 Total annual production (ton) - 2.1 3.2 4.5 5.3 5.80 6.1

… ______-- (Rp '000) …------Value of production Gross value - 136.5 217.6 319.5 408.1 464.0 506.3 Production costs excluding family labor - 16.0 25.0 45.0 59.0 65.0 69.6 Hired labor cost - 23.0 30.0 39.0 50.0 54.0 57.2 Land tax - 1.7 3.3 6.5 9.5 11.5 12.8 Interest - 3.1 3.7 5.7 6.4 7.0 7.3 Net value ex-production - 92.7 156.3 223.3 283.2 326.5 359.4

Government assistance Food /c 62.0 62.0 - - - - - Seed /d 5.0 ------Tools, clothes, utensils /e 25.0 ------

Subtotal 92.0 62.0 - - - - -

Off-farm income /f 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Home garden - net value of production /a - 10.0 15.0 15.0 15.0 20.0 25.0

Farm family income Farm income /h 62.0 164.7 171.3 238.3 298.2 346.5 384.4 Off-farm income 35.0 20.0 20.0 20.0 30.0 30.0 30.0

Total annual income 97.0 184.7 191.3 258.3 328.2 376.5 414.4

/a Calendar year, in mid-1978 financial prices.

/b Year 0 covers a six-month period from transmigrants' arrival in June/July to end of year.

/c Rice and other food sufficient to provide basic requirements for family of five.

/d Rice and vegetable seed.

/e Standard transmigration package.

/f Based on results of surveys by Agro Economic Survey, Bogor.

/g Miscellaneous food crops and fruit mainly consumed at home; value increases over time as fruit trees mature.

/h Includes income from rice, garden crops and government food grant. - 150 - ANNEX 10 Table 7

INDONESIA

IRRIGATION PROGRAM REVIEW

Tidal Reclamation: Net Farm Income from Unassisted Development /a

Present and Future

Item Unit Present Future without development

Yield of paddy /b (ton/ha) 1.5 2.0

Farm-gate price /c (Rp'000/ton) 78.0 100.0

Gross return (Rp'000/ha) 117.0 200.0

Cash production cost /d (Rp'000/ha) 17.0 50.0

Net return-paddy (Rp'000/ha) 100.0 150.0

Net return-coconuts /e (Rp'000/ha) - 17.0

Net return from crops (Rp'000/ha) 100.0 167.0

Economic cost of family labor and land /f (Rp'000/ha) 52.0 57.0

Net farm income (Rp'000/ha) 48.0 110.0

/a Economic prices, mid-1978 prices.

/b Taken from field survey and crop cutting data for Jambi and South Sumatera tidal areas, rainy season 1976/77.

/c Economic farm-gate prices from Table 3.

/d Based on Agro Economic Survey data from Jambi and South Sumatera tidal swamps, rainy season 1976/77.

/e Coconuts growing in rice fields. Planted at density of 25/ha, yielding 20 nuts/tree/year, valued (economic) at Rp 35/nut, net.

/f Family labor: 150 man-days at shadow wage of Rp 300/man-day plus nominal opportunity return from an undisturbed second-growth swamp forest of Rp 8,000/year. INDONESIA

IRRIGATION PROGRAM REVIEW

Economic Analysis: Projected Future Production at Full Develogent /a

Gross value Net value Projected Economic Incremental Cropped Price /c of Production of net labor net value of area Yield (Rp '000 production cost /d production return cost /e production (ha) (ton/ha) ton) ------(Rp '000/ha) ------Rp millions ------

Conventional Irrigation Wet season Rubber and forest /b W 5,200 - - - 79 Rainfed rice W 3,300 - - - - - 228 - Irrigated rice W 10,000 4.0 96.0 384.0 91.2 292.8 2,928 370 Garden and fruit W 750 - - - - 160.0 120 45

Dry season Rubber and forest /b W 5,200 - - - - - 78 ' Irrigated rice W 5,000 4.0 96.0 384.0 91.2 292.8 1,464 185 Garden and fruit W 750 - - - - 160.0 120 45

Total W 8,500 385 _ W 16,500 4,632 645 3_602 Tidal Reclamation Wet and dry season Rainfed rice and forest /b W 10,000 - - - - - 500 - Irrigated rice W 10,000 3.5 100.0 350.0 78.1 271.9 2,719 365 Garden and fruit W 1,500 - - - - 166.7 250 90

Total W 10,000 500 - WU 10,000 2,969 455 2,014 Large Storage-Based Irrigation Development Wet season Irrigated rice W 80,000 4.5 104.0 468.0 83.6 384.4 30,752 2,000 w 100,000 4.5 104.0 468.0 83.6 384.4 38,440 2,900 Rainfed rice W 20,000 2.0 104.0 208.0 45.0 163.0 3,260 425 Dry season Irrigated W 25,000 4.2 104.0 436.8 67.0 369.8 9,245 625 W 100,000 4.5 104.0 468.0 78.6 389.4 38,940 2,990 Total W 125,000 43,257 3,050 W 200,000 77.,380 5.980 31,193

La In 1978 constant terms. /b For the estimates of benefits without the project, see paragraph 14 for conventional project and paragraphs 27 and 28 for tidal project. /c From Table 3. /d From Table 2 for costs "with project." Costs without the project from estimates in recent appraisal reports for projects i > similar areas. . z /e Costed at an average economic wage of Rp 270/day for conventional irrigation and tidal project and Rp 130/day with the project and X Rp 130/day without the project for the storage irrigation development. m - 152 - ANNEX 10 Table 9

INDONESIA

IRRIGATION PROGRAM REVIEW

Summary of Sensitivity rests

Imputed cost of development /a Conventional Tidal Large storage- Item irrigation reclamation based irrigation

… ------Rp'000/ha

Best estimate 1,600 1,000 1,500

Three-year delay in development 1,400 650 950

25% reduction in rice price 1,000 600 1,000

25% increase in benefits 2,000 1,300 1,900

------US$/ha ------

Best estimate 3,900 2,500 3,700

Three-year delay in development 3,300 1,600 2,300

25% reduction in rice price 2,400 1,400 2,500

25% increase in benefits 4,900 3,100 4,600

/a Estimated total financial costs per ha which should not be exceeded if project is to achieve an economic rate of return of 15%. These imputed costs would include costs of construction, physical contingencies as well as costs associated with placing settlers on the project and providing infrastructure. All figures in terms of mid-1978 prices. - 153 - ANNEX 10 Table 10 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Indicative Cost Estimates: 10,000 ha Conventional Irrigation Project

Measurement Number of Cost item unit units Unit cost Total cost (Rp) (Rp million)

1. Diversion structure 650.0 2. Canals and structures Main canal km 14 47.0 658.0 Secondary canal km 90 22.4 2,016.0 Tertiary system ha 10,000 0.10 1,000.0

3. Drainage ha 10,000 0.0075 75.0 4. Access/inspection roads and bridges New access roads to diversion km 6 6.2 37.2 Upgrade connection to access km 15 4.0 60.0 Inspection roads km 36 3.3 118.8 Bridges -- - 79.0

5. Land acquisition for civil works ha 500 0.125 62.5 6. Engineering Design, supervision (5%) 259.5 7. Other /f Studies and investigations 1,200.0 Housing, O&M staff 88.4 Office, O&M staff 14.3 Communications 214.2 Equipment 76.2 O&M during construction (2%) 103.8 O&M costs /g 256.0

Subtotal (other) 1,952.9

Subtotal (items 1-7) 6,968.9

8. Land clearing (on-farm) lh ha 10,000 0.169 1,690.0

9. On-farm development /i Leveling, shaping, bunds, etc. ha 9,000 0.05 450.0 10. Market/village/farm roads and bridges /k Class II roads km 16 5.56 89.0 Class III roads km 86 3.26 280.4 Class IV roads km 300 0.06 18.0 Bridges meter span 375 0.14 52.5

Subtotal (items 8, 9, 10) 2,579.9

Subtotal (items 1-10) 9,548.8

11. Transmigration costs /1 family 10,000 0.68 6,800.0

12. Physical contingencies (15X of civil works cost) 1,091.0

Total all costs 17,439.8

Cost per hectare Rp 1,743,980 $ 4,202 /m

Cost per hectare without transmigration Rp 1,063,980 $ 2,564 /m - 154 - ANNEX 10 Table 10 Page 2

Footnotes:

/a Costs expressed in 1978 constant terms.

/b Approximately 20 cm diversion.

/c Density and unit costs averaged from several studies of similar projects.

/d Based on prereconnaissance study of Batang Tabir Project, Jambi.

/e Unit costs adopted from Southeast Sulawesi Transmigration and Area Development Study, ADB/D.G. Transmigration, Hunting Technical Services, 1977.

/f Estimates adopted from various studies including Appraisal of Irrigation IX, IBRD, May 1977.

/g Present value of O&M cost stream, Rp 6,000 a year for 27 years at 15%.

/h Average cost per hectare: 6,600 ha primary/heavy secondary forest at Rp 220,000/ha. 1,800 ha in thin secondary forest/old rubber @ Rp 110,000/ha. 800 ha alang-alang and light brush @ Rp 50,000/ha. 800 ha in annual crops - no cost.

/i Nearly all sawah will require moderate shaping and leveling.

/k Densities and unit costs from Southeast Sulawesi Study.

/1 Official government budgeted support amounts; includes social infrastructure costs for markets, schools, health facilities. Unit costs from Southeast Sulawesi Study (footnote /e) and Identification of Transmigration Projects II, III, IV. May 1977.

/m Converted at $1 = Rp 415. - 155 - ANNEX 10 Table 11 Page 1

INDONESIA

IRRIGATION PROGRAM REVIEW

Indicative Cost Estimates: 10,000 ha Tidal Reclamation Project

Measurement Number of Cost item unit units Unit cost Total cost /a (Rp) (Rp million)

1. Survey, investigation and design ha 10,000 0.015 150.0

2. Canals, ditches and drains /b Primary canal km 21.6 9.72 210.0 Secondary canal km 22.8 7.50 171.0 Supply and drain ditches km 655.0 2.33 1,526.1

3. Land acquisition for civil works ha 500 0.05 25.0

4. Other Housing, O&M staff 65.0 Office, O&M staff 11.0 Equipment 28.0 O&M during construction /c 38.0 O&M annual costs Id 171.3

Subtotal (other) 313.3

Subtotal (items 1-4) 2,395.4

5. Land clearing /e ha 10,000 0.20 2,000.0

6. On-farm development /f ha 10,000 0.03 300.0

7. Roads and bridges Village tracks km 150 0.04 6.0 Foot bridges meter span 100 0.08 8.0

Subtotal roads and bridges 14.0

Subtotal (items 5, 6, 7) 2,314.0

Subtotal (items 1-7) 4,709.4

8. Transmigration costs /Jg family 5,000 0.68 3,400.0

9. Physical contingencies (20% of civil works costs) 844.2

Total all costs 8,953.6

Cost per hectare Rp 895,360 $ 2,157 lh Cost per hectare without transmigration Rp 555,360 $ 1,338 /h - 156 - ANNEX 10 Table 11 Page 2

Footnotes:

/a 1978 constant prices.

/b Adapted from Unit Cost Upang, DPUTH/DGWRD/P4S, 1976. Preliminary results from some feasibility studies being undertaken at present suggest that in some areas levees and more intensive drainage networks are likely to add significantly to the costs indicated in earlier feasibility studies. these possible cost increases have not been taken into account here.

/c Adapted from unit costs for conventional irrigation project adjusted downward to reflect lower O&M requirements.

/d Present value of O&M cost stream (discounted at 15%) mainly for canal maintenance.

/e Average per hectare cost assuming 9,000 ha in primary/heavy secondary forest with clearing cost of Rp 50,000/ha. Clearing operations include cutting, stump removal and clean-up of debris.

/f Mainly for bunds and farm ditches/drains with minor leveling and shaping.

/£ Includes costs of recruitment, staging, transportation, housing, subsis- tence grant for one year, social, physical and administrative infrastructure and administrative costs.

/h Converted at $1 = Rp 415. - 157 - ANNEX 11 Table I

INDONESIA

IRRIGATION PROGRAM REVIEW

-Estimated Repelita III Development Expenditure by Central Government on Irrigation, Swamp Land Development, River and Flood Control /a

Timing of start of Type of development development /b Area Unit cost 1979/80 1980/81 1981/82 1982/83 1983/84 (ha) (Rp/ha) ------Rp million ------

Future new development Gravity Technical /c Series 1 20,000 1,500,000 1,500 3,000 7,500 9,000 6,000 Series 2 20,000 1,500,000 - 1,500 3,000 7,500 9,000 Series 3 20,000 1,500,000 - - 1,500 3,000 7,500 Series 4 20,000 1,500,000 - - - 3,000 3,000 Series 5 20,000 1,500,000 - - - - 1,500

Semitechnical /c Series 1 25,000 800,000 1,000 2,000 5,000 6,000 4,000 Series 2 25,000 800,000 - 1,000 2,000 5,000 6,000 Series 3 25,000 800,000 - - 1,000 2,000 5,000 Series 4 25,000 800,000 - - - 1,000 2,000 Series 5 25,000 800,000 - - - - 1,000

Simple /d Series 1 50,000 650,000 3,250 6,500 6,500 6,500 6,500 Series 2 50,000 650,000 - 3,250 6,500 6,500 6,500 Series 3 50,000 650,000 - - 3,250 6,500 6,500 Series 4 50,000 650,000 - - - 3,250 6,500 Series 5 50,000 650,000 - - - - 3,250

Swamp/tidal /d Series 1 50,000 600,000 3,000 6,000 6,000 6,000 6,000 Series 2 50,000 600,000 - 3,000 6,000 6,000 6,000 Series 3 50,000 600,000 - - 3,000 6,000 6,000 Series 4 50,000 600,000 - - - 3,000 6,000 Series 5 50,000 600,000 - - - - 3,000

River and flood control /e 57,000 57,000 57,000 57,000 57,000

Rehabilitation /d /f Series 1 50,000 700,000 3,500 7,000 7,000 7,000 7,000 Series 2 50,000 700,000 - 3,500 7,000 7,000 7,000 Series 3 50,000 700,000 - - 1,750 3,500 3,500 Series 4 50,000 700,000 - - - 1,750 3,500 Series 5 50,000 700,000 - - - - 1,750

Subtotal 69,250 93,750 124,000 156,500 181,000

Overhead - 25% 17,310 23,440 31,000 39,125 45,250

Ongoing investment L Bank Group projects 60,590 70,550 58,930 34,030 33,200 Other projects 60,000 45,000 30,000 15,000 5,000

Subtotal 120,590 115,550 88,930 49,030 38,200

Total (Rupiah million) 207,150 232,740 243,930 244,655 264,450 Total (US$ million) /h 499 561 588 590 637

/a Bank estimates in 1978 prices.

/b Not all development planned for Repelita III will start at the same time. Development activity is assumed to be phased in a number of construction series as shown.

/c Development costs for each series are phased in the proportions 5%, 10%, 25%, 30%, 20% and 102.

/d Development costs for each series are phased in the proportions 10%, 20% 20%, 20%, 20% and 10%.

/e Estimate based on expenditures during Repelita II.

/f Includes tertiary rehabilitation and development.

/g These are estimated total costs for known carryovers of Bank Group-assisted projects and an estimate of the continuing investment for other projects. See Table 2 in Annex 12 for details of ongoing Bank Group-assisted projects.

/h US$1 = Rp 415. - 158 - ANNEX 12 Table I Page I

INDONESIA

IRRIGATION PROGRAM REVIEW

Preliminary List of Irrigation and Tidal Reclamation Projects for World Rank Assistance, 1979-1983

Rehabili- New Tentative Projects Province tation development Status of preparation Executing unit cost /a (ha) (ha) (tentative) ($ a)

Irrigation XII: Appraisal - June 1978 Negotiations - November 1978 1. Jatiluhur Tertiary Development West Java Jatiluhur Authority 70 - 150,000 ha (DO) - 186,000 ha (construction) DD completed

2. Cisedane Drainage - construction West Java DD 30% complete PROSIDA 36

3. Tidal Lands Development - 230,000 ha (FS) South Sumatera P45 - 120,000 ha (FS) Central Kalimantan P4S } 9 - 110,000 ha (DD) South Sumatera & FS completed in mid-1978 P4S Jambi

4. Drainage Studies - Pemali-Comal Central Java PROSIDA - Sadang South Sulawesi PROSIDA 4

Total 119

Irrigation XIII: Appraisal - June 1979 Negotiations - November 1979 1. Jatigede Dam (preconstruction) Central Java Directorate of Rivers 31 - access roads &base camp - tunnel - resettlement

2. Ci=anuk River Flood Protection (construction) West Java DD completed Directorate of Rivers 75

Total 106

Irrigation XIV: Appraisal - June 1979 Negotiations - November 1980 1. Segala Mider Dam Lampung DD completed end of 1979 Directorate of Planning 50 - construction and Programing

2. Jragung Dam Central Java DD completed in mid-1979 PROSIDA 100 - construction

3. Batutegi Dam Lampung Directorate of Irrigation 20 - preconstruction DD completed mid-1979

Total 170

Irrigation XV: Appraisal - October 1980 Negotiations - March 1981 1. South Crobogan Irrigation Central Java PROSIDA 30 - DD and construction 10,000 FS completed in March 1978

2. Medium-Sized Irrigation Projects Java, Sumatera, Design reviews completed in Directorate of Irrigation 100 - completion of ongoing construction Sulawesi mid-1978

3. Tidal Land Development South Sumatera - construction 5 Jambi 20,000 P4S 70

Total 200 -159- ANNEX 12 Table i Page 2

Rehabill- New Tentative Projects Province tation development Status of preparation Executing unit coat /a (ha) (ha) (tentative) (S m)

Irrigation XVI: Appraisal - June 1981 Negotiatione - November 1981 1. Jatigede Central Java Directorate of Rivers 300 - construction 90,000 20,000 DD completed in March 1978

2. Way Sep.tih Irrigation Lampung 2.1 Way Ketibung 3,500 ) DD completed in end-1979 Directorate of Planning { 20 2.2 North Kandis 1,250 ) and Programming

3. Way Sekampung Irrigation Lampung Directorate of Planning 3.1 bekri 8,600 DD completed in end-1979 and Programming 20 Total 340

Irrigation XVII: Appraisal - June 1982 Negotiations - November 1982 1. Sungei Darch - construction 20,000 60

2. Kedung Obo Dam Central Java Directorate of Planning - preconstruction DD completed in mid-1979 and Programming 15

3. Madiun Dams Central Java - two dams (DD) FS completed early 1978 PROSIDA 2 Total 77

Irrigation XVIII: Appraisal - June 1983 Negotiations - November 1983 1. MIadiun Dams Central Java PROSIDA - two dams (construction) FS completed 1978 60

2. Madiun Rehabilitation Central Java PROSIDA - construction 65,000 DD completed in 1978 100

Total 160

Irrigation XIX: Appraisal - June 1984 Negotiations - November 1984 1. Bnatutegi Dam Lampung Directorate of Irrigation - construction (including power) 27,000 DD completed in 1979 160 2. Tidal Land Development - 80,000 ha conatruction) S. Sumatera 6 Jambi 80,000 DD completed mid-1980 P4S 90 - 300,000 ha (DD) S. Kalimantan b FS completed mid-1979 P4S 10 Jambi

Total 260

Irrigation XX; Appraisal - June 1985 Negotiations - November 1985 1. Kedung Ombo Dam Central Java DD completed in 1979 Directorate of Planning 6 100 - construction DD completed in 1979 Programming

2. Other projects not yet nominated (including Bantarkawang and Karang Angar)

DD - Detailed Design; FS - Feaaibility Study.

/n Mid-1978 prices plus contingencies. - 160 - ANNEX 12 Table 2

INDONESIA

IRRIGATION PROGRAM REVIEW

Estimated Expenditures for Ongoing and Proposed Bank Group-Assisted Irrigation Projects /a ($ million)

Fiscal Irrig. X - XI Irrig. XII Irrig. XIII Irrig. XIV Irrig. V year Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD) /b /c /c

1978/79 70 (35) ------_ _ 1979/80 146 (73) 0.8 (0.5) 0.9 (0.6) - - - - 1980/81 170 (85) 24.0 (15.5) 20.0 (13.4) 5 (3) - - 1981/82 142 (71) 39.0 (25.0) 33.0 (21.9) 30 (20) 10 (5) 1982/83 82 (41) 32.0 (20.5) 30.0 (19.6) 30 (20) 30 (20) 1983/84 80 (40) 18.0 (12.0) 17.0 (11.2) 40 (25) 40 (30) 1984/85 60 (30) 5.2 (3.5) 5.1 (3.3) 40 (25) 50 (30) 1985/86 ------25 (17) 50 (30) 1986/87 ------20 (15) 1987/88 ------1988/89 ------1990/91 ------1991/82 ------1992/83 ------

Total 750 (375) 119.0 (77.0) 106.0 (70.0) 170 (110) 200 (130)

Irrig. XVI Irrig. XVII Irrig. XVIII Irrig. XIX Total Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD) Total (IBRD)

1978/79 ------70.0 (35.0) 1979/80 ------147.7 (74.1) 1980/81 ------219.0 (116.9) 1981/82 ------254.0 (142.9) 1982/83 15 (10) - - - _ _ - 219.0 (131.1) 1983/84 40 (30) 5 (3) - - - - 240.0 (151.2) 1984/85 60 (40) 10 (6) 5 (3) - - 235.3 (140.8) 1985/86 80 (50) 20 (15) 20 (15) 10 (5) 205.0 (132.0) 1986/87 70 (45) 20 (15) 30 (20) 30 (20) 170.0 (115.0) 1987/88 50 (30) 15 (8) 40 (30) 50 (30) 155.0 (98.0) 1988/89 25 (15) 7 (3) 40 (25) 50 (35) 122.0 (78.0) 1990/91 - - - - 25 (12) 50 (30) 75.0 (42.0)

1991/82 ------40 (30) 40.0 (30.0)

1992/83 ------30 (20) 30.0 (20.0)

Total 340 (220) 77 (50) 160 (105) 260 (170) 2,182.0 (1,307.0)

/a Based on 1978 prices plus contingencies; estimated by Bank. Assumes Bank loans are 65% of total cost after Irrigation XI. (Proposed projects are based on Table 1 of this Annex.)

/b Estimated by Bank assuming disbursements are 50% of total costs incurred.

/c Derived from draft appraisal reports.

INDONESIA IRRIGATION PROGRAM REVIEW ORGANIZATION OF SERVICES FOR IRRIGATED AGRICULTURE

IRRIGATION SERVICES ADMINISTRATION AGRICULTURAL SERVICES

MINISTRYOF AGRICULTURE | FINANCE& INDUSTRY ______|

| 1 ' ;XLE;:!j ' r~~~~~~~~------i1ig[fftf * 'd--- I I~~~~~~~~~-

I I~~~~~~~~~~~~~~~~~~~~~~~~I1 ------''-----'1'A I ---

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OEERATIONh MAINTENANCE STAFFI

I I

Figu,re 2. 2

INDONESIA CUMULATIVE DISBURSEMENTS FOR FIRST ELEVEN BANK GROUP IRRIGATION LOANS

$ Million

450 -

400 / //

350 /

// Most Recent Projection 300 _

250 - Appraisal Estimates

200 -

150 /

/1 100 /

Actual

1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 Fiscal Years

World Bank - 19450

INDONESIA IRRIGATION PROGRAM REVIEW Ministry of Public Works

Minister of Public Works

Inspectorate Secretariat General General

Directorate General Directorate General Directorate General of Water Resources of Roads and High- of Housing, Building Development ways and City Planning

Center fr for XCenter Cene fo Center for Natonal Hous- Asphalt Mi- National Research and Education and Data and Equipment ing Public ing Public Construction Development Training Statistics Management Corporation Corporation Corporation

Provincial Publiccl Works Services World Bank - 18517 INDONESIA IRRIGATION PROGRAM REVIEW Directorate General of Water Resources Development

T irectorD General ofGe | Water Resources Devt .

Director General 1. Management Information Division Secretariat of DGWRD 2. Financial Administration Division 3. Personnel and Organization Division Assistant Director General 4. Legal Division 5. Foreign Assistance Adm Division 1 2 3 4 5 6 6. General Affairs Division J

Directorate~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Dretrt||| of of Planning Directorate Directorate Directorate Directorate D rate o and of Irrigation of Rivers of Svvamps of Logistics Hydnerauing Progra mming Eninern

Special Prolect Executive Bodies (Prosida, P4S, Brantas, Jakarta Flood Control Project)

Plaroaing Irrigation River Swamp Equipment EHydraulic

River Basin Studies Proiects Projects Projects Project Projects and Groundwater Exploration ( World Bank - 18518 INDONESIA IRRIGATION PROGRAM REVIEW Secretariat of the Directorate-General of Water Resources Development

Assistant Director General

Management Infor- Financial Personnel and Foreign Assistance General Affairs mation Division Administration Organization Legal Division Adm. Division Division Division Division

Technical Dev. - Budgeting rganization and Law [ Technical Asst. General Adm. Sub-Divison j | Sub-Division Methods. Sub-Div. | Sub-Division Sub-Division Sub-Division

Dev. Evaluation Treasurer Personnel Dev Legal Order 1 Project Asst. Filing & Reproduc- Sub-Division Sub-Division Sub-Division Sub-Division j Sub-Divison tion Sub-Div.

Dev. Reporting | Finance Adminis- 1 Personnel Adm. Civil Law Aspect 1 Foreign Aid Adm. Internal Affairs Sub-Division j tration. SSub-iivi Sub-Division Sb-Division Sub-Division Sub-Division

Adm. & Building Control and Public Relations Maintenance Monitoring Sub-Division Sub-Division of Foreign Aid Projects Unit

World Bank - 18519 INDONESIA IRRIGATION PROGRAM REVIEW Directorate of Planning and Programming

Director of Planning and Programming

D AdminSstratIonD Apprisa SDivision

Sub-Division Sb-Division 1 Sub-Div 'si'on Adminstra

Oraizto of River Basin Dev. Ground Water WR Plnnn Planning Dev. Planning

mn stratof on~ ~ ~ Preparation, |w DSre

WRDPlanin Programming & Deig Seto

Section ~~~~~~Reporting Sectionio

WRD Ecnoi Suve Secio Technical GWDFinance Construc-| - ] GeneJral Bfank s Fore8520i JSeSuvetionon| tion Section

AdmofDI Design Section |Operation Dev.

Liaso Appraisal Section |S4Upervisio

Water Re- | _sournces Data Unit

World Bank -18520 INDONESIA IRRIGATIO PROGRAM REVIEW Directorate of Rivers

Director of Rivers

Administration Division

Technical Finance General Affaris Foreign Equipet Sub-Oivision Sub-Division Sub-Division Aid Admin- istration Supervision I~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~l Unit Unit

1st. Construction 2nd Construction River Operation Development Development and Maintenance

1st Section for 4th Section for _al R Survey Section Construction Dev. Construction Dev. tation Section

River Rehabili- 2nd Section for 5th Section for River Training tativer Section- Construction Dev. Construction Dev. SecTion tation Section ~~~~~~~Section _ Section_ Seto

River Control 3rd Section for 6th Section for River Operation Design Section Construction Dev. Construction Dev. and Maintenance - Section Section Section 1 OQ

World Banik -18521 INDONESIA IRRIGATION PROGRAM REVIEW Directorate of Swamps

Director of Swamps

Administration Division

Technical Finance General Affairs Foreign Aid Sub-Division Sub-Division Sub-Division Administration

Swamp Planni 1st Construction 2nd Construction Swamp Operation and Swmlann Development Development Maintenance

1st Section for 4th Section for Swamp Functional Survey Section Construction Construction Organizing Section Development Development

2nd Section for 5th Section for Swamp Functional I nf ra Structure _ Co nstructlo n Co nstructlo n _ Development Planning Section I Development Development Section

3rd Section for 6th Section for Infra Structure Operation and Construction Construction Maintenance Planning Unit il _ Development Development Section

ID _Swamp Functional B Plnnn Sc Io World Bank -18522

IEquiplment Plan- INDONESIA IRRIGATION PROGRAM REVIEW Directorate of Irrigation

| Director of l Irrigation

l l j ~~~~~~~~~~~~~~~~~~~~Divsionl

Technica[ Finance General Affairs Foreign Aid Equipment sub-Division Sub-Division Sub-Diviiion Administration Supervision Unit Unit

Mainan Irrigation 1st Construction 2nd Construction Rehabihtation Planning Servic Development DevelopmentSevcMannne PltiSetio for 4thService Service

1st Section for Irrigation Net- 1 1stTechnical | J Cst ection fo 4th Section for work Control Planning Service Development CDevelopment Rehabilitation

Operation and 2nd Irrigation 2nd Section for 5th Section for 2nd Section for Rehabilitationf Maintenance Technical- _ Construction Construction Section Planning Section Development Development

3rd Section for 6th Section for 3rd Section for ertiary Network Development Design Section Construction onstruction e tion Development Development RehbiaSectiont C

Survey Section lX Projects Mon- |_ Irrigation l| itoring Unit l

*Badan Pelaksana Proyek Induk Irigasi dengan bantuan Bank Dunia (Executive World Bank- 18523 Body for Major Irrigation Projects with World Bank Assistance) INDONESIA IRRIGATION PROGRAM REVIEW Directorate of Logistics

Director of Logistics

Administration | ; | ~~~~~~~~~~Divions

Technical I Finance General Affairs Sub Division SubDyson j Sub Division

Equipment Service l Materials Service l

Land and Floating Mtrian Planning Equipment Section I and Procurement (Sumatera) Section

Land and Floating Equipment Section II Transportation (Java) Section Y

Land and Floating H Equipment Section IIItoaeSeto Storage Section tjr- (Kalimantan/Sulawesi)

Land and Floating Equipment Section IV (Maluku, Bali, Nusa Tenggara, Irian Jaya) World Bank - 18524 INDONESIA IRRIGATION PROGRAM REVIEW Directorate of Hydraulic Engineering

Director of Hydraulic Engineering

! Administration | lDivision

Technical Financial General Affairs Foreign Aid Sub-Division Sub-Division Sub-Division Administration Unit

Hydrology Service Hydraulic Service Hydraulic Structure Documentation Hydrology Servicel l Hydrauhc Service l l ~~~~~Servicell Dissemination Serviceand |

y rometrics eneral Hydrau- Technical Geology Dcut ion Sectionalic Section Section

Groundwater. Hydrology River Hydraulic Soil Mechanics Dissemination Section _ Section Section Section

Water Quality Estuary & Shore (Chemistry) Section Hydraulic Section Structure Section Data Collection

General f ) Hydrology f

World Bank - 18525 INDONESIA IRRIGATION PROGRAM REVIEW PROSIDA (Special Project Executive Body Responsible for IDA and IBRD Projects*)

DIR. GENERAL WATER RESOURCES DEVELOPMENT

EXPERTS * _ S GEN. M AGEADVISORY GRROUP

CHIEF CHIEF ENGINEERING OP. & MAIN. l DMISR

|DEPUTY CHIEF | |DPT HE ENG./CONSTRUC. | ENG.SUV.DS

ASST. TO THE ASST. FORASST. FOR GEN. MANAG. SUPERV CONST.FINANCE

ZIISST.}FOR AASST. FOR CEARSBFO 7 BUILDING/FACl 7 DESIGN HYDROLOG. GEN. AFFAIR

_l ASST.FOR l | ~~ASST. FOR ASST. FO7R | ASST. FOR 7 MECH.g EQUIPM.7 BUDGET/REP. l 7 AGRICULT. LOGISTIC AFFAI

7 BUDGET/REPORT.UDE|E AI

FOR (E-SERIES)MADIUN A-SERIES B-SERIES. FOR

ProyekIDA Irigasi FACPROSIDAI

'Proyek IrigasM (PROSIDA) WDA

World Bank -18724 INDONESIA IRRIGATION PROGRAM REVIEW P4S (Special Project Executive Body Responsible for Tidal Land Development*)

Director General of Water Resources Development

General Manager m_ mm_ Advisory Board

Deputy General Manager

Chief of Staff

Deputy Chief of Staff

E A-~~~~~~~- E g X s E | X X Cw|>. | N E >| % " ° | -d,.|1- | c

R IAU JAMBI SOUTH WEST SOUTH/CENTRAL SUMATERA eaure E C~~~~~~~~~~~~c KAIANA < ALIMANTAN < LD

Proyek Pengembangan Persareahan Pasang Surut (P4S) World Bank-18662 INDONESIA IRRIGATION PROGRAM REVIEW Suggested Structure for Directorate General of Water Resources Development

Director General of Water Resources Development

Divi sions Under-I

DirecAratsofsrecorarecort firctorantD Secretariat of DGWRD

ProjectW. Monitor ing 2O Personnel Administration AsUistant Director General 3. Financial Administration 4. Foreign Assistance Administration a R I e_ neacad vl6 5- Legal Affairs1 2 3 4 5 6 6. General Affairs _ _ _ m

Planning and Works. Works, Works, Works, Technical Design Region I Region 11 Region III Region IV Services

Overall Co-ordination of: Units and Sub-Directorates for. Units and Sub-Directorates for.l Survevs & Investigations Survey & Investigaticons HydrologYl Planning and Programrming Planning & Design Same Same Same Hydraulics/Researchl Design Construction (3) as for Region I as for Region I as for Region I Design, Research and Develop-l Construction & Logistics Logistics mentran O 81 M O & M Trining {r _M D.&_ Dissemination J D

World Bank - 18663 Figure 4.13

INDONESIA IRRIGATION PROGRAM REVIEW Suggested Structure for Directorate of Planning, Programming and Design

D irector of Planning, Programm- ing and Design

_ _ _ _ Chief of Staff

Technical Financial General Administration Ad ministration Administration

Sub-Directorate Sub-Directorate Sub-Directorate S De r Sub-Di rectorate Sub -Di|rectorate Co- ordination 1~Co-ordination ~ ~ 1 Co-ordination Co-ordination of Surveys & of Planning of Designs of Construction of 0 & M. Investigations & Programming and Logistics

S & I Region I P & P Region I Designs Region I C & L Region I 0 & M Region I

S & I Region 11 P & P Region 1| Designs Region 11 C & L Region °10 & M Region II

S & I Region III P& P Region III Designs Region III, C & L Region III 0 & M Region III

S & I Region IV P & P Region IV Designs Region IV C & L Region°V 0 & M Region IV

World Bank - 18664 INDONESIA IRRIGATION PROGRAM REVIEW Suggested Structure for a Directorate of Works

|Director of |Works, Region I

Chief of Staff

Technical iaca Gerl |Administration | diltaion |i dlnsrton|

[ Sub-Directorate Sub-Directorate Sub-Directorate Sub-Directorate Sub-Directorate Sub-DirectorateOperation Technical Project Project Project Logistics and Support Implementation Implementation Implementation Maintenance

SurveysL and l X Project I Project V Project IX Investigations Unit Logistics I O& M I

Plannning Project 11 Project VI Project X Logistics II Unit 0 & M II

Design Unit Project III Project VIl Project XI Logistics III 0 & M III

M Project Unit Project IV Project Vil Project XIl Logistics IV 0 & M IV I Monitoring Unit I I I I I I I I W a

World Bank -18665 Figure 4.15

INDONESIA IRRIGATION PROGRAM REVIEEW Typical Organization of a Traditional "Dharma Tirta"

Village Assembly

TechnicalAd-~ ~ ~ Tchnca Technical Ad- LrhAdvisors for visors for Lurah Agriculture Irrigation at Village Level at Village

Ulu-Uiu desa

Assistant Ulu-Ulu Approx. 10 Ha. per Assistant Ulu-Ulu

World Bank - 18755

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Tyaninp aSb kalroI . ,tdy Art 4.20050. RANKGROUP ASSISTED PROJECTS (IS)7,600b hZ r a. -. hu L I EXISTINGAREAS UNDER IRRIGATION CIletuhSrudy Arer oee ROADS 7F00 SSeS r.-be, RIVERS 5IrRORh. rta ~ oo TIDAL LANDS .- N SWAMPLANDS LOBKL i hdLNPK~ PorIPNay - INTERNATIONALBOUNDARIES MIi - I, P I 75,00 haTrehab,I--r,o kr Srrt . o, ,S.-"-. rrl,r oe A I ~~~~~~~~30,0heTO2800hDOOIP 2.800hr -r-udcrat prior proje- BMBAWAdr-huN 0 lOS 200 300 400 Soo N G C A K \l, ~ Rudy KILOMETER6S IV AyLV0 C AI o too 200 300 - A.E.d 0 Al0r d ~A.b - rMILES -4,-. MO 100- 196- 109- 112- ruc Urrraot..- 121~~~~~~~~~~~cepane- BAI S 0< RO