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37231-033: Punjab Irrigated Agriculture Investment Program

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37231-033: Punjab Irrigated Agriculture Investment Program Completion Report Project Number: 37231-033 Loan Number: 2841 August 2018 Pakistan: Punjab Irrigated Agriculture Investment Program–Project 2 This document is being disclosed to the public in accordance with ADB’s Public Communications Policy 2011. CURRENCY EQUIVALENTS Currency unit – Pakistan rupee (PRe/PRs) At Appraisal At Project Completion October 2011 30 September 2017 PRs1.00 = $0.0117 $0.0094 $1.00 = PRs85.0 PRs105.41 ABBREVIATIONS ADB – Asian Development Bank DMF – design and monitoring framework EIRR – economic internal rate of return EMP – environmental management plan ICB – international competitive bidding IEE – initial environmental examination JICA – Japan International Cooperation Agency LARP – land acquisition and resettlement plan LCC – Lower Chenab Canal MFF – multitranche financing facility NCB – national competitive bidding O&M – operation and maintenance PID – Punjab Irrigation Department PMO – project management office PSC – project steering committee SCADA – supervisory control and data acquisition SDR – special drawing rights WEIGHTS AND MEASURES ha – hectare km – kilometer m3 – cubic meter m3/s – cubic meter per second NOTES (i) The fiscal year (FY) of the Government of Pakistan ends on 30 June. “FY” before a calendar year denotes the year in which the fiscal year ends, e.g., FY2018 ends on 30 June 2018. (ii) In this report, “$” refers to United States dollars. Vice-President Wencai Zhang, Operations 1 Director General Werner Liepach, Central and West Asia Department (CWRD) Director Donneth Walton, Environment, Natural Resources and Agriculture Division, CWRD Team leader Noriko Sato, Natural Resources Specialist, CWRD Team members Elena Alano, Senior Project Officer, CWRD Kristine Joy Villagracia, Operations Assistant, CWRD Asad Ali Zafar, Senior Project Officer (Water Resources), CWRD In preparing any country program or strategy, financing any project, or by making any designation of or reference to a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area. CONTENTS Page BASIC DATA i I. PROJECT DESCRIPTION 1 II. DESIGN AND IMPLEMENTATION 2 A. Project Design and Formulation 2 B. Project Outputs 3 C. Project Costs and Financing 5 D. Disbursements 5 E. Project Schedule 6 F. Implementation Arrangements 6 G. Consultant Recruitment and Procurement 7 H. Gender Equity 8 I. Safeguards 8 J. Monitoring and Reporting 9 II. EVALUATION OF PERFORMANCE 10 A. Relevance 10 B. Effectiveness 10 C. Efficiency 11 D. Sustainability 11 E. Development Impact 12 F. Performance of the Borrower and the Executing Agency 13 G. Performance of the Asian Development Bank 13 H. Overall Assessment 13 III. ISSUES, LESSONS, AND RECOMMENDATIONS 14 A. Issues and Lessons 14 B. Recommendations 14 APPENDIXES 1. Design and Monitoring Framework 16 2. Project Cost at Appraisal and Actual 18 3. Disbursement of ADB Loan Proceeds 19 4. Contract Awards of ADB Loan Proceeds 20 5. Implementation Schedule 21 6. Procurement of Goods 22 7. Status of Compliance with Loan Covenants 23 8. Reassessment of Economic and Financial Analysis 33 BASIC DATA A. Loan Identification 1. Country Islamic Republic of Pakistan 2. Loan number and financing source 2841-PAK (COL) 3. Project title Punjab Irrigated Agriculture Investment Program–Project 2 4. Borrower Government of Pakistan 5. Executing agency Punjab Irrigation Department 6. Amount of loan SDR172.417 million 7. Project completion report number 1705 8. Financing modality Multitranche financing facility B. Loan Data 1. Fact-Finding – Date started 18 July 2011 – Date completed 27 July 2011 2. Loan negotiations – Date started 18 November 2011 – Date completed 9 December 2011 3. Date of Board approval 22 December 2011 4. Date of loan agreement 18 January 2012 5. Date of loan effectiveness – In loan agreement 17 February 2012 – Actual 17 February 2012 – Number of extensions 0 6. Project completion date – Appraisal 30 June 2016 – Actual 25 August 2017 7. Loan closing date – In loan agreement 31 December 2016 – Actual 30 September 2017 – Number of extensions 2 8. Financial closing date – Actual 8 May 2018 9. Terms of loan – Interest rate 1% per annum for the 8 years during the grace period and 1.5% per annum thereafter – Maturity (number of years) 32 – Grace period (number of years) 8 10. Disbursements a. Dates Initial Disbursement Final Disbursement Time Interval 3 May 2013 8 May 2018 60.0 months Effective Date Actual Closing Date Time Interval 17 February 2012 30 September 2017 67.5 months ii b. Amount (SDR ‘000) Increased Canceled Last Original during during Revised Amount Undisbursed Allocation Implementation Implementation Allocation Disbursed Balance Category (1) (2) (3) (4=1+2–3) (5) (6 = 4–5) 1 Works 132,342 0 0 132,342 128,121 4,221 2 Vehicles, 61 0 0 61 47 14 Equipment & Supplies 3 Resettlement 137 0 0 137 101 35 4 Consulting 5,553 273 0 5,826 4,913 913 Services 5 Project 928 0 0 928 349 579 Management 6 Interest Charge 4,435 0 0 4,435 2,383 2,052 7 Unallocated 28,961 (273) 28,688 0 0 0 Total SDR 172,417 0 28,688 143,729 135,915 7,814 ( ) = negative number, SDR = special drawing rights. C. Project Data 1. Project cost ($ million) Cost Appraisal Estimate Actual Foreign exchange cost 309.2 227.6 Local currency cost 0.0 0.0 Total 309.2 227.6 2. Financing plan ($ million) Cost Appraisal Estimate Actual Implementation cost Borrower financed 39.1 31.7 ADB financed 270.1 195.9 Other external financing Total implementation cost 309.2 227.6 Interest during construction costs Borrower financed 0.0 0.0 ADB financed 6.9 3.3 Other external financing 0.0 0.0 Total interest during construction cost 6.9 3.3 3. Cost breakdown by project component ($ million) Component Appraisal Estimate Actual New Khanki Barrage 238.2 214.4 Project Management 11.7 9.9 Contingencies 52.4 0.0 Financing Charges During Implementation 6.9 3.3 Total 309.2 227.6 iii 4. Project schedule Item Appraisal Estimate Actual Consulting servicesa Date of contract with consultant 1 Jul 2011 21 Feb 2013 Civil works contract Date of award 31 Mar 2012 2 May 2013 Completion of work 30 Jun 2016 25 Aug 2017 Equipment and supplies First procurement 15 Jan 2012 10 Jul 2013 Last procurement 20 May 2012 28 Sep 2015 Beginning of barrage operations 30 Jun 2016 20 Oct 2016 a Detailed design was completed by 2011, prior to the project, and financed by Japan International Cooperation Agency. 5. Project performance report ratings Implementation Period Single Project Rating From 12 Feb 2012 to 31 Dec 2012 Potential Problem From 1 Jan 2013 to 31 Dec 2013 On Track From 1 Jan 2014 to 31 Dec 2014 On Track From 1 Jan 2015 to 31 Dec 2015 On Track From 1 Jan 2016 to 31 Dec 2016 On Track From 1 Jan 2017 to 31 Dec 2017 On Track D. Data on Asian Development Bank Missions No. of No. of Specialization Name of Mission Date Persons Person-Days of Members Fact Finding 18–27 Jul 2011 3 26 a, b, f Inception 7–12 May 2012 3 17 a, b, k Special Loan Administration 27–29 Aug 2012 4 12 a, b, i, k Review 1 25–27 Feb 2013 1 3 a Review 2 11–19 Feb 2014 3 18 a, g, j Review 3 27–30 Apr 2015 2 8 a, k Midterm Review 28 Sep–3 Oct 2015 4 14 a, g, h, i Review 4 23–28 Apr 2016 2 12 a, b, o Review 5 16–21 Oct 2016 3 17 a, b, f Review 6 24–27 Apr 2017 2 8 f, b Project Completion Review 30 Apr–5 May 2018 4 24 f, b, m, n a = water resources specialist; b = senior project officer; c = principal social safeguards specialist; d = environment specialist; e = director, Environment, Natural Resources and Agriculture Division; f = natural resources specialist; g = project officer; h = safeguards specialist (resettlement); i = consultant (environment specialist); j = safeguards specialist (social development); k = associate project officer; l = consultant (senior water resources specialist); m = consultant (water resources specialist); n = consultant (agricultural economist); o = financial management specialist. I. PROJECT DESCRIPTION 1. Irrigated agriculture has been an important driver for the economic growth of Punjab Province and the food security of Pakistan. Punjab’s contribution to the country’s agriculture sector is estimated at 57%. The agriculture sector accounts for more than 26% of Punjab’s gross domestic product and generates over 40% of the provincial labor force. Punjab’s agriculture production relies on the Indus Basin Irrigation System (IBIS), which supplies irrigation water to 8.4 million hectares (ha) of agricultural land in Punjab.1 The Punjab Irrigation Department (PID) has been responsible for the operation and maintenance (O&M) of infrastructure, such as barrages and canals, in the IBIS.2 The IBIS’s infrastructure severely deteriorated due to (i) aging (mostly over 100 years old), (ii) poor asset management planning, and (iii) underfunding and ineffective implementation of O&M. The Government of Punjab Province sought increased investment for its underperforming irrigated agriculture infrastructure and institutions. The PID presented its asset management plan, prioritizing rehabilitation of seven barrages and five canals and sought the support of the Asian Development Bank (ADB), the World Bank, and the Japan International Cooperation Agency (JICA).3 2. In line with the government’s long-term investment plan, in December 2006, ADB approved the Punjab Irrigated Agriculture Investment Program, a multitranche financing facility (MFF) for $900 million.4 The investment program envisaged financing investments to improve the century-old irrigation infrastructure and prompt institutional reform towards the effective and efficient delivery of irrigation services through farmer management of the irrigation systems.
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