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World Bank Document Document of The World Bank Public Disclosure Authorized Report No: 22230-IN PROJECT APPRAISAL DOCUMENT Public Disclosure Authorized ONA PROPOSED CREDIT IN THE AMOUNT OF SDR 79.0 MILLION (US$100.4 MILLION EQUIVALENT) TO INDIA FOR THE KARNATAKA WATERSHED DEVELOPMENT PROJECT Public Disclosure Authorized May 29, 2001 Rural DevelopmentSector Unit Public Disclosure Authorized South Asia RegionalOffice CURRENCY EQUIVALENTS (Exchange Rate Effective May 29, 2001) Currency Unit = Indian Rupee Rs.1 = US$0.0213 US$1 = Rs.46.96 FISCAL YEAR April I to -- March 31 ABBREVIATIONS AND ACRONYMS DOA Department of Agriculture DOH Department of Horticulture DWDO District Watershed Development Officer FD Forest Department GOK Governnent of Kamataka GP Gram Panchayat GS Gram Sabha JFPM Joint Forest Planning and Management M&E Monitoring and evaluation MIS Management information system MOU Memorandum of Understanding MWDP Micro-Watershed Development Plan MWMG Micro-Watershed Management Group NGO Non-Government Organization PRI Panchayat Raj Institution RESA Regional Environmental and Social Assessment Study VFC Village Forest Committee WDD Watershed Development Department WDT Watershed Development Team ZP Zilla Panchayat Vice President: Mieko Nishimizu Country Manager/Director: Edwin R. Lim Sector Manager/Director: Ridwan Ali Task Team Leader/Task Manager: Harideep Singh/Meena M. Munshi INDIA KARNATAKA WATERSHED DEVELOPMENT PROJECT CONTENTS A. Project Development Objective Page 1. Project development objective 2 2. Key performance indicators 2 B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project 2 2. Main sector issues and Government strategy 3 3. Sector issues to be addressed by the project and strategic choices 5 C. Project Description Summary 1. Project components 7 2. Key policy and institutional reforms supported by the project 8 3. Benefits and target population 10 4. Institutional and implementationarrangements 11 D. Project Rationale 1. Project alternatives considered and reasons for rejection 16 2. Major related projects financed by the Bank and other development agencies 17 3. Lessons learned and reflected in proposed project design 18 4. Indications of borrower commitment and ownership 20 5. Value added of Bank support in this project 20 E. Summary Project Analysis 1. Economic 20 2. Financial 21 3. Technical 22 4. Institutional 23 5. Environmental 25 6. Social 28 7. Safeguard Policies 31 F. Sustainability and Risks 1. Sustainability 33 2. Critical risks 35 3. Possible controversial aspects 37 G. Main Credit Conditions 1. Effectiveness Condition 37 2. Other Conditions 38 H. Readiness for Implementation 39 I. Compliancewith Bank Policies 41 Annexes Annex 1: Project Design Summary 42 Annex 2: Detailed Project Description 48 Attachment 1: List of Sub-watersheds 59 Attachment 2: Sub-watersheds ImplementationPhasing Schedule 61 Attachment 3: Agreed Cost-sharing Arrangementswith Government of Karnataka 62 Attachment 4: Organization Structure 63 Attachment 5: Roles and Responsibilitiesof Main InstitutionalPartners 64 Attachment 6: Representative Scheme Cycle for a Micro-watershedat MWMG level 66 Attachment 7: Micro-watershedDevelopment Plan - FormulationThrough Evaluation 68 Process Steps Attachment 8: Consultative Process Matrix 70 Annex 3: Estimated Project Costs 78 Annex 4: Cost Benefit Analysis Sumrnary 79 Annex 5: Financial Summary 92 Annex 6: Procurement and Disbursement Arrangements 93 Annex 7: Project Processing Schedule Ill Annex 8: Documents in the Project File 112 Annex 9: Statement of Loans and Credits 114 Annex 10: Country at a Glance 118 Annex 11: Environmental Management Plan 120 Annex 12: Tribal and Vulnerable Groups DevelopmentPlan 148 Annex 13: Integrated Pest Management Plan 167 MAP(S) IBRD 31494 INDIA KARNATAKA WATERSHED DEVELOPMENT PROJECT Project Appraisal Document South Asia Regional Office SASRD Date: May 29, 2001 Team Leader: Harideep Singh Country Manager/Director: Edwin Lim Sector Manager/Director: Ridwan All Project ID: P067216 Sector(s): AY - Other Agriculture Lending Instrument: Specific Investment Loan (SIL) Theme(s): Rural Development Poverty Targeted Intervention: Y Program Financing Data- [ Loan [X] Credit [ Grant [ I Guarantee [ Other: For Loans/Credits/Others: Amount(US$m): SDR79.0 million (US$100.4 million) Proposed Terms (IDA): StandardCredit Grace period (years): 10 Years to maturity: 35 Commitment fee: 0.75 Service charge: 0.50% Financing Plan (US$m): Source Local - Forelgnw - Total..-', BORROWER 14.30 0.00 14.30 IDA 100.20 0.20 100.40 LOCAL COMMUNITIES 12.90 0.00 12.90 127.40 0.20 127.60 Borrower: GOVERNMENT OF INDIA Responsibleagency: GOVERNMENT OF KARNATAKA, DEPARTMENT OF WATERSHED DEVELOPMENT Address: Vana Vikasa, 18th Cross Road, Malleswaram, Bangalore 560 003 Contact Person: Mr. R.G. Nadadur, Director, Watershed Development Department Tel: 91-80-3466501 Fax: 91-80-3466501 Email: [email protected] Estimated disbursements ( Bank FYIUS$m): FY --. 2002- 03 - 2004: -.-. 220.. - 206,- _ _ Annual 7.70 21.70 41.90 27.20 1.90 Cumulative 7.70 29.40 71.30 98.50 100.40 Project implementation period: 5.5 years, FY2002-2007 Expected effectiveness date: 08/20/2001 Expected closing date: 03/31/2007 OCS PAD Form Re, Marc, 20 A. Project Development Objective 1. Project development objective: (see Annex 1) A. The key development objective is to improve the productive potential of selected watersheds and their associated natural resource base, and strengthen community and institutional arrangements for natural resource management. The poverty focus has been ensured by selecting districts/talukswith a relatively high poverty incidence, low water availability,and a preponderance of small and marginal farrners. The selection of watersheds has been done using a set of robust poverty and watershed/naturalresource base degradation indicators. B. An associated objective is to strengthen the capacity of communities in the project districts for participatory involvement in planning, implementation,social and environmentalmanagement, maintenance of assets emanating from local level development programs, and to have the implementing department operate in a more socially inclusive manner, within the frameworkof a convergent watershed development plan. This will be achieved through having the communitygroups implement the project, the project's collaborative approach and capacity building initiatives, and policy agreements with GOK. 2. Key performance indicators: (see Annex I) The main performance indicators for the project development objectives would be: * Household income increased: - overall income of various stakeholder groups at the village level increased - agricultural income per hectare increased * Crop yields increased * Groundwater recharged: -Cropping intensity on rainfed areas improved - % of irrigated area increased - drinking water availability improved - number of wells recharged * Soil erosion reduced * Cropping pattern diversified to high value crops Milk, fuel and fodder production increased * Productivity of non-arable lands improved - Forest cover, and forest produce increased, output from revenue lands increased * project-created community based organizationsinvolved in broader community affairs B. Strategic Context 1. Sector-related Country Assistance Strategy (CAS) goal supported by the project: (see Annex I) Document number: Date of latest CAS discussion: 01/17/01 Rural poverty continues to be high in Kamataka with large inter-district variation. Predominantly rainfed districts show a significantly higher poverty. Karnataka has now initiated an extensive dialogue on a set of wide-ranging issues, anchored by discussions on establishing a sustainable fiscal framework. As a part of this dialogue, the Kamataka government has requested the Bank to support rural development on a priority basis, focusing on poverty alleviation, using development of watersheds and tanks as points of entry, and continuing support for rural communities' access to safe drinking water. The proposed watershed project is the first of the larger program of Bank support for rural development in Kamataka. The aim of this project is to target the Bank's assistance to five of the ten rainfed districts in Kamataka, build a relationship with - 2 - the newly created Watershed Development Department, and pilot participatory approaches in a gradual manner to enhance rural livelihoods. Accelerating rural growth is a program priority of the Bank's Country Assistance Strategy (CAS) for India. The CAS explicitly recognizes the need to support India's increased emphasis on the holistic development of rainfed areas, where a large share of the rural poor reside, using watersheds as the basis and taking a participatory approach. The Bank's rural development strategy for India builds on three key principles: (a) supporting policy (cost recovery - notably water and power subsidies, and market liberalization) and institutional reforms (mainly beneficiary participation, decentralization,and reorienting public sector functions); (b) promoting sustainable natural resource management (mainly water and soil); and (c) improving access to, and quality of, public services (rural infrastructure and agricultural technology). The project is fully consistent with CAS goals and the rural development strategy. The project also fits within the CAS program priority of supporting key pro-poor interventionswhich are designed to directly assist and empower rural communities in targeting and use of resources. Hence, while
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