Amu Bukhara Irrigation System Rehabilitation (Feasibility Study)

Technical Assistance Consultant’s Report

Project Number: TA 7917 March 2013

Republic of Uzbekistan: Amu Bukhara Irrigation System Rehabilitation (Feasibility Study)

Prepared by Lahmeyer International in association with Info Capital Group

For the Ministry of Agriculture and Water Resources

This consultant’s report does not necessarily reflect the views of ADB or the Government concerned, and ADB and the Government cannot be held liable for its contents. (For project preparatory technical assistance: All the views expressed herein may not be incorporated into the proposed project’s design.

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Amu Bukhara Irrigation System Rehabilitation

VOLUME 1: MAIN REPORT

Feasibility Study

Prepared for the Asian Development Bank

and the Ministry of Agriculture and Water Resources of the Republic of Uzbekistan

(TA: 7917-UZB)

March 31, 2013

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

CURRENCY EQUIVALENTS (as of 21 December 2012)

Currency Unit – Soum (UZS)

UZS1.00 = $0. $1.00 = UZS

ABBREVIATIONS

ABIS – Amu Bukhara Irrigation System ABISOA – Amu Bukhara Irrigation System Operating Authority ADB – Asian Development Bank AES – agro-economic survey BISA – Basin Irrigation System Administration BVO – River Basin Water Management Organization CC – climate change CDM – Clean Development Mechanism CRU-WG – Climate Research Unit – Weather Generator DMI – domestic, municipal, and industrial EA – executing agency FAO – United Nations Food and Agriculture Organization GDP – gross domestic product GHG – greenhouse gas ha – hectare HGME – Hydrogeological Meliorative Expedition I&D – irrigation and drainage IE – irrigation efficiency IEE – initial environmental examination IPCC – Intergovernmental Panel on Climate Change IR – Inception Report ISA – Irrigation System Administration km – kilometer MAWR – Ministry of Agriculture and Water Resources MCA – Main Canal Administration MOU – Memorandum of Understanding MT million tonne O&M – operation and maintenance NGO – non-governmental organization POW – productivity of water PPTA – project preparatory technical assistance PSE&C – Pump Station, Energy and Communications RP – Resettlement Plan RRP – Report and Recommendations of the President SA – Social Assessment

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

SCADA – supervisory control and data and acquisition SPS – Safeguard Policy Statement SRES – Special Report Emissions Scenarios TOR – terms of reference UNFCC – United Nations Framework Convention on Climate Change UZBS – Uzbek Soum (national currency) WUA – water users association

GLOSSARY

Bonitet Classification system for land productivity potential Dekhan Household plot used for households immediate food requirements and sale of surplus. Given to head of family for the livelong ownership. Size of dekhan farms: irrigated land 0.35 ha and 0.50 on non-irrigated area Glavgosecoexpertiza Main Directorate for State Ecological Expertise, or SEE Goskompriroda State Nature Protection Committee Khokim Province or District Governor Khokimiyat Local government authority Makhalla Collection of villages to create a community village Oblast Province (Russian version) Oblvodkhozy Province administration O’zuvnazorat Water inspectorate Rayon District (Russian version) Rayvodkhozy District administration Shirkat Cooperative farm, successor of former kolkhoz Turman District, smaller administrative unit of the viloyat Uzglavgidromet Chief Hydrometeorological Administration Viloyat Province administrative unit of Uzbekistan. Uzbekistan has 12 viloyats and 1 autonomous republic of Karakalpakstan

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

CONTENTS

I. INTRODUCTION ...... 1 II. PHYSICAL FEATURES ...... 3 A. Geography and Climate ...... 3 B. Soils ...... 5 C. Hydrology, Sediment, River Morphology ...... 5 III. POPULATION ...... 7 IV. INSTITUTIONAL BACKGROUND ...... 7 A. The Legal/Institutional Framework ...... 7 B. Organizational Framework...... 9 V. IRRIGATED AGRICULTURE ...... 9 A. Sector Assessment ...... 9 B. Climate Change in Aral Sea Basin and Uzbekistan ...... 12 C. Climate Change Impacts to ABIS ...... 12 D. Agricultural Productivity of Water ...... 13 VI. DESCRIPTION OF THE PROPOSED PROJECT ...... 15 A. Present Situation ...... 15 B. Goal and Objective ...... 15 C. ABIS Overview ...... 16 D. Proposed Components ...... 18 E. Rehabilitation and Improvements ...... 19 1. Climate Change Adaptation and Mitigation ...... 19 2. River Intake Channel and Dredgers ...... 21 3. Pumping Stations ...... 22 4. ABMK – Main Canal Hydraulic Structures and Reservoirs ...... 25 5. Inter-Farm Canal Rehabilitation and Pilot Farm (Demonstration Area) ...... 28 6. Drainage ...... 30 VII. IMPLEMENTATION ...... 31 A. Implementation Schedule ...... 31 B. Procurement ...... 37 VIII. FINANCIAL AND ECONOMIC ANALYSIS ...... 47 A. Development Options ...... 47 B. Development Costs ...... 49 C. EIRR ...... 50 D. Financial Management ...... 51 IX. ENVIRONMENTAL ASSESSMENT ...... 52

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

X. RESETTLEMENT ...... 53 XI. SOCIAL AND POVERTY REDUCTION SAFEGUARDS ...... 56 XII. GENDER ACTION PLAN ...... 61

List of Figures

Figure 1: Amu Bukhara Irrigation System Rehabilitation Project Location Map...... 2 Figure 2: Amu Darya Catchment ...... 4 Figure 3: Khamza New Pump Station Location Map ...... 24

List of Tables

Table 1: Total Costs Summary at Constant 2012 Financial Prices in US$ Million ...... 50

ANNEXES

1. Irrigated Agriculture 2. Engineering 3. ABIS Rehabilitation Subproject Implementation 4. Cost Estimates 5. Economic and Financial Analysis with Supporting Tables 6. Resettlement 7. Initial Environment Examination (IEE) 8. Public Consultation Meeting 9. Poverty and Social Assessment on the ABIS Rehabilitation Project

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

I. INTRODUCTION

1. Since the 1990s the ADB has participated with the Government to achieve significant productivity and reform outcomes. The Country Operations Business Plan 2011-2013 for Uzbekistan incorporates measures to improved agricultural POW with a focus on water infrastructure included in the Amu Bukhara Irrigation System Project (Figure 1).

2. The Amu Bukhara Irrigation System (ABIS) Rehabilitation Project continues the support of the Asian Development Bank (ADB) for the rehabilitation and upgrading of irrigation and drainage infrastructure and capacity development for water management in the Republic of Uzbekistan. The ABIS Rehabilitation Project is structured as a sector loan project. It includes the irrigated areas in Bukhara and Navoi Provinces. The Project will (i) construct a new pumping station near the existing Khamza 1 pump station and rehabilitate and upgrade five pumping station of the six pump stations within the ABIS (Khamza 2, Kuyu Mazar, Kizil Tepa, and Kizil Tepa Auxiliary Pump Stations); (ii) rehabilitate and upgrade priority main system canals and structures, and within a pilot demonstration area the inter-farm irrigation and on-farm canals and structures will be rehabilitated; and (iii) improve inter-farm and on-farm water management through water users’ associations (WUAs). The primary aim is sustained and increased agricultural water productivity.

3. Agriculture remains a key sector of the economy and the main source of livelihood for the rural population in Bukhara. Irrigation and drainage are key factors in agriculture, and critical to productivity, competitiveness, and environmental management. However, infrastructure facilities are deteriorated and agricultural productivity is declining. Pump stations have exceed their service life and are losing capacity, main canal structures are in need of repair, and inter-farm and on-farm canals have deteriorated, which are contributing to water losses, water logging in some areas, salinity, and increasing energy costs for pumping water. Rehabilitation of pump stations, upgrading of irrigation infrastructure, including inter-farm canals are essential to avoid continued decline in water productivity of the ABIS, with the resulting losses to agricultural production and farm incomes.

4. The rehabilitation needs are substantial, but the level of funding available from the Government and development partners is limited. This means prioritizing investments. The Government has requested the focus of the Project to be on improvements and rehabilitation of pump stations, along with development of irrigation works and improved water management by the farmers and WUAs.

5. ABIS’s reliance on large pump stations for supplying a large portion of the irrigated area poses recent challenges to sustainability and reliability. Pumping costs have risen considerably due to the increasing cost of electricity, while many pump sets are highly inefficient and in urgent need of rehabilitation. Substantial investment is required to improve efficiency and transform the pumped-water-supplied schemes into cost-effective and sustainable operations. New O&M cost recovery schemes and other financial initiatives are required to prevent further infrastructure deterioration and to sustain improvements.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Figure 1: Amu Bukhara Irrigation System Rehabilitation Project Location Map

Source: ADB PPTA UZB 7917, 2013 -- Amu Bukhara Irrigation System Rehabilitation Project

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

II. PHYSICAL FEATURES

6. The Amu Bukhara Irrigation System (ABIS) supplies water to irrigated lands, cities, settlements, and industries in Bukhara and Navoi Provinces through a series of large cascading pump stations and thousands of kilometers of irrigation canals and drains. The oasis of Bukhara has been an important center of irrigated agriculture in Central Asia for centuries.

7. The ABIS was built during two waves of construction in the 1960s and 1970s. Maintenance and rehabilitation of the scheme is comprehensive, although original structures are now nearing or have passed their original design life. At the time the main pump stations were built, the technology, design and quality of construction mostly meet international standards. However, modern design standards and pump technologies for irrigation systems have advanced greatly in the decades since the original construction of the scheme. So has the design of pump station features such as electronically- controlled valves, suction inlet piping, flow meters, and SCADA systems. These elements will be incorporated into a long-term program to modernize ABIS and improve water productivity.

8. The existing pump stations in the ABIS now show severe signs of erosion, mechanical damage, and operation of the various auxiliary systems is problematic. The water intakes of the pump stations are seriously deteriorated, as are the electro- mechanical components of the pump sets, and the inlet and discharge pressure pipelines are eroded. Replacement units and spare parts are sourced from national and international manufacturers at high expense, and some parts are no longer available on the market. The age of the pump sets and infrastructure substantially increases running costs of the plants. Instrumentation and control equipment is aged and insufficient. The pump capacity, and especially pump efficiency is reduced.

9. As a result of the severe technical and management deficiencies in the main pump stations and the poor condition of most other irrigation infrastructure, the safety and operational reliability of ABIS continues to diminish. More water has to be pumped at an increasing cost to support a declining agro-economic system that is vital for the country.

A. Geography and Climate

10. With regard to climatic conditions the territory of the ABIS has a typical, although in a way mitigated by irrigation, climate of Central Asian deserts. It is characterized by slight precipitation, high temperature in the vegetation period and relatively low in winter, high air dryness and evaporation in summer.

11. Climatic conditions having an impact on agricultural production were assessed as agro-climatic resources in the region. The climate has an impact on soil formation, the water and salinity balance, crop selection, the chemical composition of water supplies, among other features of the local agro-hydrological environment.

12. According to the general soil and climatic zoning scheme accepted for the Aral Sea Basin, the ABIS is located in the desert area at the southern part of the Central Turan Region, which is characterized by a continental type climate. An extremely arid

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report climate is attributed to the desert area as characterized by: large daily and annual temperature fluctuations; very hot summers with few cloudy days and low humidity; and low levels of precipitation in winter.

Figure 2: Amu Darya Catchment

Source: UNEP, 2011

13. Air temperature in the summer is 27 to 29ºС, while absolute maximum reaches 43ºС. The average temperature in January is approximately 0ºС, while the absolute recorded minimum is -18.9ºС, which was recorded at Bukhara City. Annual rainfall is only about 120-200 mm on average.

14. Unfavourable weather conditions such as frost, hail and dry, strong winds (up to 15 m/s) may occur in entire area. Average wind speeds vary from 3-4 m/s to 6-10 m/s, causing severe dust storms, which is typical for such desert areas. The number of days with dust storms varies from 10 to 30 days per year.

15. The frost-free period is long (about 220 days). The high cumulative temperatures in the area (4600 to 4700ºС) allow for the production many heat-tolerant crops. In general the climate is characterized by hot summers. Even the spring and autumn periods have mostly warm days, but the nights are relatively cool, which is seasonal restrictive factor for heat-tolerant crops such as cotton.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

B. Soils

16. The soil mantle was formed under conditions of the desert type soil formation. According to Uzbekistan’s soil and climatic zoning, the project area falls under the southern sub-area of central desert area (C-II-А). Hydrogeological and geomorphological features play a significant role in soil formation processes. Surface slopes range from 0.002-0.005 to 0.0005-0.001, creating complicated groundwater flow, and increase the soil’s susceptibility to salinity.

17. Soils are of the desert type (desert-sandy, grey-brown, and takyr). Commencement of irrigation raised groundwater levels up to 3-5m, 2-3 m and 1-2 m, depending on the location within ABIS. Currently, the soil mantle is classified as meadow- desert, meadow-takyr and meadow type (depending on groundwater level). Meadow-bog soils are developed in areas with groundwater level of 0.5-1.0 m.

18. Prevailing soils have poor fertility, and low humus content (< 1%) and nutrients, are affected by salt, and require treatment.

19. Soil absorbed base is less than 10 mg-eqv/100 g of soil, i.e., soil are not able to retain much nutrients. Under a GEF grant (ADB LIP Project, 2011) soil surveys were done on demonstration plots in Jondor, Bukhara, Romitan, and Kizil-Tepa Districts. The results showed low and very low content of Ca, P and especially humus; however, micro- elements (Cu, Zn, Mn, B, Mo) in all samplings complied or some exceeded the standards (refer to Annex 1 Agriculture).

20. The mechanical composition of soils within the ABIS varies from sandy clay and sand to heavy loamy and clay. Takyr soils are characterized by: heavy mechanical composition; desert-sand soils consisting of sands and sandy clay; grey-brown soils with light mechanical composition; and including pebble of different sizes. Due to an increase of groundwater level and chemical properties of the soils were changed, but mechanical composition was not changed, as it is a constant characteristic of the soil (provided that there was no any intervention due land development, e.g. mulching with sand).

C. Hydrology, Sediment, River Morphology

21. Future flows in the Amu Darya are likely to decrease both because of infrastructure developments within the river basin and owing to anticipated climate change (see Appendix 2 River Morphology in Annex 2). By the 2050’s summer flows could reduce by up to 35% owing to the scenario: (i) the Rogun Dam is operational (18% decrease assuming the reservoir is used for winter electricity generation);123 (ii) Afghanistan has rehabilitated and expanded their irrigation schemes (1% to 5% decrease); and, (iii) the impact of climate anticipated change is being experienced (16% to 21%

1 Poyry, 2012, Inception Report: Executive Summary – Environmental and Social Impact Assessment for Rogun Hydro Power Plant, for World Bank. 2 Jalilov. S.M. et al, 2011, Impact of Rogun Dam on Downstream Uzbekistan Agriculture, International Journal of Water Resources and Environmental Engineering Vol. 3(8), pp. 161-166 3 World Bank, 2010, Multi-Country Consultations on Terms of Reference for Techno-Economic Assessment Study and Environmental and Social Impact Assessment for Rogun HEP in Tajikistan, Powerpoint Presentation.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report decrease). Further potential developments on the Pyanj, within Afghanistan and within Turkmenistan could further decrease summer flows; however, the likelihood of these developments proceeding within the foreseeable future is unknown.45 The reduction in summer flows will affect all water users along the Amu Darya. However, past experience during the 2000-2001 drought indicates the impact will be more severe on downstream users, such as ABIS, as upstream users will continue withdrawing their original allocated amounts. New water sharing agreements will be needed to fairly distribute the impact. In comparison net winter flows are likely to increase by up to 50% because the Rogun Dam increasing the winter flows by up to 54% greatly exceeds the anticipated 5% reduction owing to climate change.

22. A review of previous studies provides the following information of the Amu Darya’s sediment loads: (i) the turbidity of the Amu Darya is second highest in the world, after the Huanghe in China;6 (ii) annual sediment loads are in excess of 100 Million Tonne (MT) of suspended sediment and about 5 MT/yr of bed load is delivered to the Aral Sea7 (however the DI has provided assessments showing the bed load comprising about 15% of the sediment load8); (ii) sediment loads pre-1980s are about 94.1 MT/yr;9 (iii) turbidity ranges from 0.66 to 1.55 kg/m3 in the winter and 4.3 to 4.5 kg/m3 during summer,10 with the long-term (1992 to 2011) average flow volume for the summer period (May to August) is 26.8 Bm3 and for the remaining winter period (September to April) is 17.9 Bm3 the product of turbidity and flow provides a total annual suspended sediment load of about 127 MT to 148 MT; (iv) with a total river basin area of 309,000 km2, the annual sediment yield is about 445 T/km2 making it the sixth highest yielding river flowing from the Hindu Kush-Himalaya (HKH) region and slightly below the average;11 and, (v) a bed load content of 5% to 15% is much higher compared to other HKH rivers such as the Yangtze (2.5%) and Yellow (0.14%).12

23. The existing sediment management facilities are not able to cope adequately due to issues with the design and age of the equipment, and much of the sediment passes through the main pump stations and canals, creating considerable maintenance problems. Coarse material in the suspended sediment causes erosion to the pumping systems.

4 Olsson, O. and Bauer, M., 2010, Interstate Water Resources Risk Management Towards a Sustainable Future for the Aral Basin (JAYHUN), IWA Publishing 5 UNEP, 2011, Environment and Security in the Amu Darya Basin. 6 Olsson, O. and Bauer, M., 2010, Interstate Water Resource Risk Management: Towards a Sustainable Future for the Aral Sea Basin (JAYHUN), prepared for the European Commission Community Research by IWA Publishing. 7 Samajlov, I. V., Die Flussmundungen, 647 pp., Veb Hermann Haack, Germany, (translated from the Russian original Ust'ia Rek), 1956. 8 Design Institute, 2004 9 Lu, X.X. et al, 2011, The changing sediment loads of the Hindu Kush-Himalayan rivers: an overview, IAHR Publ. 349. 10 Lemna International Inc., 2004, Amu-Bukhara Irrigation System Rehabilitation Project Feasibility Study, prepared for USTDA 11 Lu, X.X. et al, 2011 12 Chalov, R.S., 2004, Morphological expressions of river sediment transport and their role in channel processes, IAHR Publ. 288.

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24. Brown colored water (indicating a significant sediments load) may be observed in the whole ABIS canal system - pump station Khamza 1 and 2, Kuyu Mazar, Kizil Tepa Pump Stations and the distribution work at PK 1520+00 - indicating a substantial amount of fine suspended matter passing pumps, pipes and being transported to the very end of the system, i.e. to the inter-farm canals and the reservoir Tudakul and Kuyu Mazar Pump Station where final settling occurs. Obviously, the very fine sediment fraction smaller than about 0.01 mm is barely deposited in channel and canal sections of the main conveyance canal (ABMK), inter-regional BISA and inter-farm ISA canals because of turbulent flow conditions. However, there might be some thin film deposition in the WUA system furrows at the farms where the clay fraction has a chance to settle. In any case, particles of a few μm will be filtered by the top soil as it was observed in some cotton fields.

III. POPULATION

25. The Amu Darya River and Syr Darya River Basins have become the third largest cotton producer in the world; it created employment and income for 10 million people settled in the newly developed areas. The expansion of irrigated agriculture started in the late 19th century and accelerated between 1950 and 1990. During this period, huge reservoirs, river diversion structures, pumping stations and canals were constructed to supply water from the Amu Darya and Syr Darya Rivers to 3.2 million ha of reclaimed land for a total irrigated area in the Aral Basin of about 7.5 million ha, of which 4.8 million ha are in the Amu Darya Basin.

26. The ABIS with a command area of 315,000 ha is located in the central part of Uzbekistan, on the right bank of Amu Darya River, and serves the irrigated lands of the Bukhara-Zarafshan and Karakul oases and the Karaulbazar massif.

27. The ABIS includes five (5) Irrigation System Administrations (ISAs)13 providing water for irrigated agriculture in the Bukhara Province and part of the Navoi Province.

28. The population size within the ABIS command area is 1,788,000 people, including 1,550,000 in Bukhara and 239,000 in two districts of Navoi. It is impossible to overstate the importance of reliable water supplies for such a large and important region, 68% of which live in rural areas and fully rely on irrigated agriculture.

IV. INSTITUTIONAL BACKGROUND

A. The Legal/Institutional Framework

1. As far as the ABIS is concerned the only water resources of interest are those generated in the international Amu Darya basin. Hence the management of those resources, particularly the allotment of an adequate share, is of critical importance to the rehabilitation of this irrigation system.

13 The ISAs are the lowest level public entities that deal directly with the WUAs according to the instructions from the Basin Irrigation System Administration (BISA). In the implementation of the distribution of the irrigation water they maintain the secondary canals with funds obtained from the national budget.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

2. The proper allocation of water resources in a multi-state river basin, such as that of the Amu Darya, needs to be based on a treaty or international agreement accepted by all basin states that may establish an institution for the specific purpose of managing and allocating the water resources of the basin. Such a treaty does not exist at this time.

3. Since independence Uzbekistan has been a party to bilateral and multilateral agreements and it is a participant in regional initiatives in the area of joint water and energy resources management. A number of intergovernmental agreements have strengthened dialogue and cooperation amongst the countries that contribute water to the Aral Sea. In 1992, the Central Asian Republics established the Interstate Commission for Water Coordination (ICWC) to oversee water allocation within the Aral Sea region.

4. The ICWC executive bodies include:

(i) Secretariat in Tashkent (ii) Basin water organization "Amudarya" (BWO "Amudarya") in Urgench (iii) Basin water organization "Syrdarya" (BWO "Syrdarya") in Tashkent (iv) Scientific Information Center for water related problems (SIC) and its national branches (v) Coordination Metrological Center (CMC) and national organizations (vi) Training Center (TC) and its branches

5. The Deputy Minister of MAWR is the representative of Uzbekistan on the ICWC. At its main office in Tashkent the ICWC employs about 50 professional staff, but the field staff amounts to about 500.

6. The MAWR has departments dealing with Amelioration, Water Balances, Water Resources, Operation of Irrigation Systems, Pumping Stations, Capital Construction and Civil Works, Design, Technology Development and Investment, and Finance.

7. According to Ministerial Resolution 320 of 2003 the responsibility for implementing water allocation decisions lies with the Basin Irrigation System Authorities. The resolution states that "a decision of a Basin Irrigation System Authority, taken in the framework of its competence, is obligatory for execution by Main Canal Authorities (MCA) and Irrigation system authorities, municipalities, as well as officials and civilians". This wording clearly puts the BISA, under guidance of the MAWR, in charge of implementing water resources allocation decisions on the national level.

8. With reference to the Amu Bukhara Irrigation System it is important to note that the BWO "Amudarya" operates intake structures, waterworks facilities, reservoirs and other interstate structures that are transferred to the BWO's responsibilities for temporary operation. It makes estimates of water use of the shared water resources and formulates annual proposals for water-withdrawal limits, depending on water availability from the resources for a planned period and ensures delivery of ICWC-set water limits to various economic sectors, including the population the environment, the Aral Sea and sanitary releases.

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B. Organizational Framework

29. After the transition from the centralized administrative setup to the basin water management system in 200314, there was a reorganization of the water management sector and the creation of new institutions under the MAWR including: Basin Irrigation System Administrations (BISAs); Main Canal Administrations (MCAs); and Irrigation System Administrations (ISAs).

30. The Amu Bukhara Irrigation System Operating Authority (ABISOA) is responsible for water intake from Amu Darya River and its conveyance, as well as for reliable O&M of the Amu Bukhara Machine Canal (ABMK).

31. Within the ABIS project area the responsibility for O&M of the conveyance canal and the large pumping stations along the canal lies with the ABMK, which was renamed by Resolution 320 as a Major Canal Authority (MCA) under supervision of the local BISA. In actual practice this organization is invariably still referred to as the ABMK, the initials of the original Russian name.

32. Irrigation and drainage infrastructure under the direct responsibility of the ABISOA are commonly referred to as “inter-regional” works, such the ABIS Main Canal, the main pump stations, and the primary drainage network. The ABISOA performs O&M of the inter-regional canals and main pump stations.

33. O&M responsibilities of the remaining portion of the scheme are divided between the Basin Irrigation System Administration (BISA) on one side who handle “inter-farm” works, and Water Users Associations (WUAs) who on the other side handle “farm” works. Farm works are by definition the on-farm irrigation and drainage infrastructure owned by WUAs (previously the assets of the agricultural cooperatives or shirkats), and the WUAs are responsible for all O&M. All the remaining works are owned by the Government, and represented by MAWR and the Irrigation System Authorities (ISAs) under the Amu Bukhara BISA.

V. IRRIGATED AGRICULTURE

A. Sector Assessment

34. Irrigated agriculture accounts for 90% of agricultural production and over 40% of employment in Uzbekistan, and remains a key economic sector. Together with agriculture- based rural small and medium-sized enterprises (SMEs),15 it is the main source of livelihood for rural communities. To further improve rural living standards, the government developed the Welfare Improvement Strategy (WIS) (2008-2010)16 and in 2011 launched the Integrated Rural Development Strategy. The key elements of these strategies include: (i) improved agricultural production, (ii) promotion of non-agricultural economic development in rural areas, (ii) upgraded rural transport networks, (iv) enhanced water supply services,

14 Resolution No. 320 of the Cabinet of Ministers of Uzbekistan – “On Improving the Water Sector Governance” 15 In 2011, the government launched a program to promote rural small and medium-sized enterprises. 16 Republic of Uzbekistan. 2007. Welfare Improvement Strategy of Uzbekistan. Tashkent. http://www.wis.uz.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report and (v) strengthened education and health services in regions. Enhancing the productivity and sustainability of irrigated agriculture—which covers 4.3 million ha—is a central theme of both strategies as over 60% of the population live in rural areas and depend on irrigated agriculture for their livelihood. Irrigation and drainage (I&D) are also critical to agriculture productivity, competitiveness, and environmental management.

35. While Uzbekistan’s I&D infrastructure was built to sound technical standards, it has been in operation far beyond its economic life and it is rapidly deteriorating. The outdated low energy-efficient equipment exacerbates the already high water application rates that lead to land salinization and degradation. The environmental consequences of land degradation and rising greenhouses gas (GHG) emissions are likely to increase unless more is invested in I&D. Modernizing the deteriorating I&D infrastructure is therefore of paramount importance for the government to ensure sustained agricultural production and economic growth.

36. The current major challenges for the sector include (i) limited investment (agriculture’s share in GDP has decreased from 3% in 1995 to 2% in 2002 and continues to fall); (ii) reduced agricultural productivity caused by low water-use efficiency (about 40% on average); (iii) deteriorating main and on-farm infrastructure that has outlived its economic life; (iv) reliance on pump irrigation that covers 65% of the irrigated area, absorbs 70% of the annual operation and maintenance (O&M) budget, and consumes 20% of the country’s electricity; (v) low pump station energy efficiency caused by the system’s poor state of repair and old designs; (vi) poor water management practices; and (vii) high climate sensitivity as 500% water deficit is projected by 2050, resulting in droughts and further desertification.17 Such drier environment is expected to be more reliant on already scarce water resources. Thus, substantial investments in I&D and water management will be required to maintain food security.

37. Since 2001, ADB has helped the government improve agriculture performance by implementing a number of projects and is the largest external supporter of the agriculture sector. Among others, ADB is supporting three projects in the irrigated agriculture sector. The rehabilitation of Amu Zhang Irrigation System18—one of the largest pump irrigation schemes in the country—will increase the reliability, efficiency, and sustainability of irrigation water supply. The Land Improvement Project (LIP)19 is enhancing land quality and productivity by rehabilitating I&D infrastructure and improving water management practices. The Water Resources Management Sector Project20 will sustain and increase agriculture productivity in the Zarafshan River Basin and Fergana Valley by upgrading pumping stations, canals, and structures, and improving water management.

38. Uzbekistan’s territory covers about 45 million ha of which agriculture uses about 28.5 million ha (63% of total area) comprising of 23.4 million ha of low productive pastures and 4.4 million ha of irrigated land. The main agricultural areas are located in

17 World Bank 2010: Climate Change and Agriculture—Uzbekistan Country Note. 18 ADB. 2004. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to Uzbekistan for Amu Zang Irrigation Rehabilitation Project. Manila. 19 ADB. 2006. Report and Recommendation of the President to the Board of Directors on Proposed Loans and Technical Assistance Grant to the Republic of Uzbekistan for Land Improvement Project. Manila. 20 ADB. 2008. Report and Recommendation of the President to the Board of Directors on Proposed Loan to the Republic of Uzbekistan for Water Resources Management Sector Project. Manila

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report the Amu Darya and the Syr Darya River Basins, which supply about 70% of irrigation water. Irrigation is vital and provided virtually for free by the Government.

39. In Uzbekistan, land resources belong to the government and are not subject to sale, exchange, grant, mortgage, except for those specific cases stipulated by law. The main land use form is long-term rent, on the basis of which the farmers use land for crop production, livestock and other agricultural activity. The right for land rent is provided in the Land Code of 1998 (Clauses 24, 53), and “Law on Private Farms" of 1998. The farms in the ABIS specialize in cotton and winter wheat production according to the state order.

40. The other primary land use form is Dekhan farms. Dekhan farms sizes do not exceed 0.35 ha. Land owners are free in crop pattern selection, and mainly involve orchards, vegetables, melons and gourds and potatoes.

41. The WIS identified an investment requirement with the estimated amount of $1.7 billion for agriculture and irrigation, and called for foreign investment in the amount of $400 million. The total investment requirement for inter-farm, on-farm rehabilitation and upgrading, and limited new investments has been estimated for the sector at between $20 and $24 billion over a 20 year time by the World Bank (2000) and the GEF (2002). The gap between the investment requirement and the actual investment is still huge and the proposed Project will contribute to fill the financial gap.

42. The Government acknowledges agriculture as a central avenue for growth of the economy. It acknowledges the significance of private and public investment in the sector, including investment in the modernization of water management and irrigation systems. Restructuring the agricultural sector requires capital investment in irrigation water supply, as well as water efficient technologies, rehabilitation of the irrigation and drainage systems, modernization of pumping facilities, and better water resources management.

43. Compared with other countries, Uzbekistan’s irrigated agricultural sector has performed far below its potential. Uzbekistan was once a main producer of cotton and a large supplier of fresh and processed fruits and vegetables to other parts of the former Soviet Union. Since independence in 1991, the Government’s quest for wheat self- sufficiency has had a significant effect on cropping systems and crop production. For many years, the sector has relied on large government subsidies resulting mainly from low fixed prices for cotton and wheat which have drained the sector of resources. Despite Government resolutions on deepening reforms, the performance of the agriculture sector has experienced only margin improvement because of persisting rigid top-down management command and control systems. The Government sets mandatory production targets and the farmers are subject to quotas to grow large areas with subsidized credits and inputs.

44. In ABIS the majority of the irrigated area is allocated for cotton and wheat (approximately 52% in 2011). Extensive crop diversification is only observed at the level of the household dekhan plots. In the farms, crop rotation is missing: several years of cotton is followed by cotton again, or wheat is followed by wheat, or wheat is planted after cotton. Such exclusive crop rotations as only cotton-wheat exhaust the soil and leads to gradual degradation.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

45. However, in recent years some trend has been observed towards more crop diversification. In 2011 after harvesting almost half the area of wheat was planted by double crops, including vegetables, melons and gourds, legumes, and maize. About 10% of the area under double crops is covered by legumes (see Annex 1 Agriculture for details). This is an important factor for improvement of soil fertility and nitrogen accumulation. Soil covered by vegetation is protected from drying up and salt transferring to the root zone, thus preventing from wind erosion and salinity of upper layers.

B. Climate Change in Aral Sea Basin and Uzbekistan

46. Simulations with global climate models suggest that the annual mean temperatures are going to rise in the Aral Sea Basin by about three degrees during the coming 40 years. Dry south-western parts of Central Asia will become even drier especially during summer, and precipitation might increase in some places in the mountains.

47. The glaciers in the Tien Shan and Pamir are retreating, and have lost 12.6% (0.33%/year) of their 1965 area in the 1965-2003. It is likely that: (i) glacier extent in the Pamir and Tien Shan mountain ranges will decrease by 45 to 60% by the year 2050; (ii) the runoff peak will shift from summer to spring and decrease in magnitude; (iii) total annual runoff into the downstream areas will decrease by 22-28% for the Syr Darya and 26-35% for the Amu Darya by 2050; with inflow decreases up to 45% expected for the late summer months.

48. Annual total water demands in the Syr Darya and Amu Darya basins is likely to increase by 3.0 - 3.9% and by 3.8% - 5.0% in 2050, and annual unmet demand increases from 8.8% currently to 31.6 - 39.7%, and from 24.8% currently to 45.8 – 54.5% in 2050, respectively. The total extent of the Aral Sea will reduce from about 17,000 km2 currently to 13,800 km2 in 2050.

49. In Uzbekistan, climate change projections from 2005 to 2050 indicate that (i) water demand will increase from 59 km3 to 62–63 km3, (ii) supply will decrease from 57 3 3 km to 52–54 km , and (iii) the present water deficit will increase by over 500% from 3 3 21 about 2 km to 11–13 km .

C. Climate Change Impacts to ABIS

50. The following climate change impacts to ABIS are identified; (i) the average crop water demand of ABIS is likely to increase by about 9% by 2050; (ii) climate change alone will result in a decrease in average river flow from the current 38 km³/year to an estimated range of between 22 and 28 km³/year due to possible rising temperatures and loss of glacial storage in the headwaters; (iii) the inter-annual variability of available Amu Darya flow is expected to increase from a historic range of 31 to 34%, to a projected (2050) range of 36 to 44%; (iv) more frequent water deficiencies in some years will have the potential to pose serious irrigation problems by 2050, requiring emergency drought management plans; and (v) in order to cope with these changes there is an imperative to massively reduce the irrigation off-take before 2050. Such drier environment is expected to

21 World Bank. 2010. Climate Change and Agriculture Country Note. www.worldbank.org/eca/climateandagriculture.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report be more reliant on already scarce water resources. Due to the potential for reduced diversions from the Amu Darya River, the ever present risk of drought, and future challenges related to global climate change, feasible adaptation measures are required, including better agricultural practice aimed towards increasing water productivity and preserving land fertility.

D. Agricultural Productivity of Water

51. Productivity of water (POW) is calculated, on a unit area basis, as the crop yield (T) divided by water consumption (m3) and has units of T/m3. Empirical analysis from the Consultative Group on International Agricultural Research (CGIAR) indicates that for Uzbekistan 20% more wheat could be produced on 25% less land (yield increased by 60%) while maintaining present total water consumption.22 This indicates that productivity is presently low because water is over allocated owing to over-extended irrigation areas and that optimum crop water requirements (consumption) are not met. Improvement and consolidation of existing areas should receive priority over new development.23 Improving agricultural POW is important: (i) to meet rising food demands, in light of increasing water scarcity; (ii) to respond to competing demands on water between agriculture, drinking water, industry and environmental uses; and (iii) to contribute to poverty reduction and economic growth including better nutrition for families, productive employment, higher incomes, and greater equity. Targeting high water productivity can reduce investment costs by reducing the amount of water that has to be diverted / withdrawn.24

52. In 2010/11 Uzbekistan produced about 1.0 MT of cotton making it the sixth largest producer of cotton in the world after China (7 MT), India (5.9 MT), USA (4 MT), Pakistan (1.9 MT), and Brazil (1.8 MT). Most cotton produced is exported making it the third largest exporter behind USA and India, and accounts for about 11% of Uzbekistan’s total exports. Traditional customers are China, Bangladesh, Korea, and Russia. Other major crops are wheat, barley, corn, and rice.25 Of Uzbekistan’s total population of 29.56 million (2012)26, about 64% live in rural areas.27 About 40% of the population is employed in the agricultural sector.28

53. Cotton production in Uzbekistan has declined over the past two decades. In 1990/91 approximately 1.6 MT of cotton was produced. In 2010/11, only 1 MT was produced. The decrease in area allocated to cotton sowing is attributed to issues concerning food security, problems with irrigation, and generally the risks associated with monoculture and policy in favour of grain production. These issues, coupled with the problematic shortages in the irrigation sector have decreased cotton production in Uzbekistan. Local

22 Figures 7.2 and 7.3, in CGIAR (2007) Water for Food, Water for Life – A Comprehensive Assessment of Water Management in Agriculture: present winter wheat yield is 4.2 T/ha, potential consumption 500 mm, potential winter wheat yield, with full consumption, is 9.2 T/ha, and crop water stress is assumed to account for half the yield gap. 23 ADB. 2012, Developing Water Resources Sector Strategies in Central and West Asia (draft). 24 Comprehensive Assessment of Water Management in Agriculture. 2007. Water for Food, Water for Life: A Comprehensive Assessment of Water Management in Agriculture. London: Earthscan, and Colombo: IWMI. 25 International Cotton Advisory Committee 26 The State Committee of Uzbekistan on Statistics 27 CIA Fact book 28 ADB. November 2011. Concept Paper, Uzbekistan: Amu Bukhara Irrigation System Rehabilitation. Project Number: 44458

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report consumption of cotton, on the other hand, has been slowly growing since 2004/05 reaching 270,000 T in 2010/11 and accounting for about 25% of production. In 1990/91, consumption was estimated at 205,000 T. Uzbekistan aims at creating an internationally competitive textile sector.29

54. The 4-5 million individual dekhans perform well. Although they comprise of only 11% of cropped land, dekhans produce about 20% of the country’s grain and most of its horticulture. Overall, they produce about 62% of Uzbekistan’s total agricultural output (40% of crop value and almost 90% of livestock value) and also provide most of the farmer’s cash income. Therefore they are vital for the survival of the rural population.

55. In 2007, cotton and wheat crops accounted for 60% of agricultural production, and were grown on 41% and 42% of the irrigated area respectively. The average yields of cotton and wheat are low by international standards. Cotton yields have been declining steadily since 1991 and currently average about 2.54 T/ha.30 In contrast, wheat yields increased from about 2.3 T/ha to about 4.76 T/ha,31 but this is still low for irrigated agriculture.

56. Concentration on cotton and wheat has meant that the area planted with other crops (such as potatoes, vegetables and other horticultural crops) has also reduced dramatically. In addition, the area planted with fodder crops declined by two thirds between 1991 and 2004 and now only represents 9% of the cultivated area. Moreover, the cotton/wheat crop rotation is not sustainable and has resulted in a serious loss of soil fertility which has added to environmental degradation.

57. In 2011 cotton yields ranged from about 2 T/ha to 3.7 T/ha depending on the administration district. About 87% of the irrigated area is impacted by saline soils comprising of: (i) about 58% are slightly affected; (ii) 25% are mildly affected; and, (iii) 4% are strongly affected. Salt is known to be accumulating in four out of the 11 districts.32

58. A lack of agricultural support/extension services has been identified as a major sector constraint on productivity in the country.33 This situation is particularly acute because of the limited capacities and minimal technical knowledge available within the established Water User Associations (WUAs), and the reliance on inadequate quasi-state institutions providing seeds, fertiliser and other support products and services.

59. Since 1990, cotton as a mono-crop has been gradually reduced due an increase in the area programmed for winter wheat. Cotton fields have been reduced by up to 55- 60%, which is within the recommended range of cotton-wheat crop rotation. However, wheat production was increased not only by reducing cotton fields, but also alfalfa, which is the most important ameliorative and fodder crop, without which livestock development and soil fertility would be impossible. In many farms alfalfa areas were reduced from 15- 20% to 3-5%, and in some farms this crop is not planted anymore. This aggravated the problem with maintaining acceptable levels of soil fertility.

29 ibid 30 Average years 2005 – 2007 31 On irrigated land, average for years 2005 - 2007 32 HGME, 2012 33 ADB. 2008 Report and Recommendation of the President to the Board of Directors on Proposed Loan to the Republic of Uzbekistan for Water Resources Management Sector Project (40086). Manila.

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VI. DESCRIPTION OF THE PROPOSED PROJECT

A. Present Situation

60. Irrigation and drainage are key factors in agriculture, and critical to productivity, competitiveness, and environmental management. However, infrastructure facilities of the ABIS are deteriorated and agricultural productivity is declining. Pump stations have exceed their service life and are losing capacity, main canal structures are in need of repair, and inter-farm and on-farm canals have deteriorated, which are contributing to water losses, water logging in some areas, salinity, and increasing energy costs for pumping water. Rehabilitation of pump stations, upgrading of irrigation infrastructure, including inter-farm canals are essential to avoid continued decline in water productivity of the ABIS, with the resulting losses to agricultural production and farm incomes.

61. The rehabilitation needs are substantial, but the level of funding available from the Government and development partners is limited. This means prioritizing investments. The Government has requested the focus of the Project to be on improvements and rehabilitation of pump stations, along with development of irrigation works and improved water management by the farmers and WUAs.

B. Goal and Objective

62. The Project continues the support of the Asian Development Bank (ADB) for the rehabilitation and upgrading of irrigation and drainage infrastructure and capacity development for water management in Uzbekistan. The Amu Bukhara Irrigation System (ABIS) Rehabilitation Project is structured as a sector loan project. It includes the irrigated areas in Bukhara and Navoi Provinces. The Project will include: (i) construction of a new pumping station near the existing Khamza 1 Pump Station and rehabilitation and upgrading of five (5) pumping stations of the six main pump stations within the ABIS; (ii) rehabilitation and upgrading of priority main system canals and structures, (iii) a pilot demonstration area covering rehabilitation of inter-farm irrigation and on-farm canals and structures supplying the pilot farm(s); and (iii) improvement of inter-farm and on-farm water management through capacity building of MAWR’s operating agencies and water users’ associations (WUAs). The primary aim is sustained and increased agricultural water productivity.

63. The proposed Project will address irrigated agriculture and water resources management issues in Amu Bukhara Irrigation System (ABIS) in Bukhara and Navoi Provinces. The impact of the Project will be a sustainable economic and social welfare of communities dependent upon ABIS. This will be achieved by a more sustainable and reliable ABIS through implementation of four outputs: (i) obsolete and energy-inefficient pump stations modernized and rehabilitated; (ii) conveyance efficiency in ABIS main canal increased; (iii) climate change adaptation capacity increased; and (iv) efficient project and irrigation system management. In addition, the increase of agricultural productivity by addressing water logging and high soil salinity will be achieved through

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report the government’s fund and ongoing ADB’s loans: Land Improvement Project34 to compliment the outcome and the impact of the Project.35

64. The Project impact is improved rural incomes and welfare of communities dependent upon water from ABIS. The project outcome will be reliable water supply to rural and urban water users in Amu Bukhara. The key outputs will be the following: (i) pump stations provide efficient and reliable water supplies; (ii) the main canal system conveys water requirements on schedule; (iii) GHG emissions from pump stations and climate change risks are reduced; and (iv) efficient project and irrigation system management and monitoring systems are established and implemented.

65. The proposed Project will support the Government’s rural development program launched in 2009, which places priority on improving water management, increasing the productivity of water use, and rehabilitating irrigation systems considering the continued facing problems arising from increasing water stress, which its resource-intensive irrigation system and lesser glacial water flows as a result of global warming.

66. The Project is also fully consistent with prioritized sector highlighted in ADB's Country Partnership Strategy (CPS). The CPS suggests ADB investments in water resources management and irrigation which is one of the five sectors indicated in the CPS for climate-resilient rehabilitation of a major irrigation system to make the system more energy-efficient and reduce the cost of its operations, and for climate-adaptive on- farm water management and the productivity of water resources.

C. ABIS Overview

67. The Bukhara Province is located in the central part of Uzbekistan, which borders Turkmenistan. The population of the Province is 1.7 million in 201236 and has increased by about 3% per year. With an annual growth rate of 3%, the provincial population will double in about 30 years. This increase in population will have a potentially significant impact on the availability and value of water.

68. The ABIS is located on the right bank of Amu Darya River, has a command area of 315,000 ha, including 274,900 ha in Bukhara and 39,900 ha in Navoi, respectively, in which around 6,500 farmers are dependent on agriculture activities with the support of 145 water consumers’ associations (WCAs) (as of 2011), and serves the irrigated lands of the Bukhara-Zarafshan and Karakul oases and the Karaulbazar massif. The diversion point from Amu Darya, the intake channel, and the main canal with the lengths of approximately of 10 km from the intake channel of the ABIS are located in Turkmenistan, and O&M of these sections are carried out by the MAWR based on the bilateral

34 ADB. 2006. Report and Recommendation of the President to the Board of Directors on a Proposed Loans to Uzbekistan for Land Improvement Project. Manila. 35 ADB provided project preparatory technical assistance. ADB. 2011. Technical Assistance to the Republic of Uzbekistan for Preparing Amu Bukhara Irrigation System Rehabilitation. Manila. 36 Data of the survey conducted in accordance with the Resolution of the Cabinet of Ministers of the Republic of Uzbekistan № 71 of 14 March 2011 “On measures for preparing and conducting sampling statistical survey on population.”

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report agreement between Uzbekistan and Turkmenistan.37 The population within the command area is about 1.8 million, including entire Bukhara Province and two districts of Navoi Province. ABIS also provides domestic water supply for water users estimated at about 725,650 persons in the ABIS areas.38 The importance of reliable water supplies for ABIS is thus significant, as 68% of the population live in rural areas and fully rely on irrigated agriculture.

69. During the last century, when cotton production reached its maximum scale in Uzbekistan, large pump stations were constructed for irrigation which covered almost all regions of the country including Bukhara and Navoi Provinces. After construction of the Amu Karakul Canal (1962) and Amu Bukhara Canal (1964-1965, 1975), the Bukhara Province and a portion of the Navoi Province came to be irrigated with water from the Amu Darya River, which is the Amu Bukhara Irrigation System. Since 1990, cotton as a mono- crop has been gradually reduced due an increase in the area for winter wheat, and its fields have been reduced by up to 55-60%, which is within the recommended range of cotton-wheat crop rotation. Further, in recent years some trend has been observed towards more crop diversification. In 2011 after harvesting almost half the area of wheat was planted by double crops, including vegetables, melons and gourds, legumes, maize etc.39

70. Since the ABIS was commissioned in 1965, the main pumps, electric motors, and auxiliary systems have exceeded their design life span, and main, and inter- and on-farm canal systems have been obsolete and in poor condition. Water supplies have become more unreliable due to: (i) continued high expenditures (varying between 216 million UZS in 2007 and 389 million UZS in 201140) for their maintenance of the aging pump stations, which led to several major failures of pumping equipment; and (ii) deteriorated regulatory structures and inefficient water supply operation and management of ABIS leading inefficient water distribution (80% to 85% in inter- and on-farm canals) and low conveyance efficiency (85% to 90% in main canal) resulting in overall irrigation efficiency of about 40%, posing a significant risk to agricultural production in the region and to the livelihood of local communities. In addition, these aging and energy-inefficient pump stations are consuming high electricity (annually 1.32 million MWh41 to 1.63 million MWh42), which is equivalent to about 60% of energy consumption in Bukhara Province and GHG 43 emission of 758,000 tCO2e to 935,000 tCO2e.

71. ABIS area is also suffering poor land quality and about 12% of lands in Bukhara region are in poor condition mainly due to salinity and water-logging. According to HGME

37 Agreement on cooperation on water economics between Uzbekistan and Turkmenistan signed in January 1996. 38 This figure was obtained from the Statistics Department of Bukhara Region, Kizil Tepa, and Karmana Districts reported the “Passports” for the region and districts, 2011. 39 In 2010/11, only 1 MT of cotton was produced in the country while approximately 1.6 MT was produced in 1990/91. The decrease in cotton area is attributed to issues concerning food security, problems with irrigation, and generally the risks associated with monoculture and policy in favour of grain production. 40 O&M Cost Report of ABISOA for 2007-2011 41 ADB. 2012. Technical Assistance to Uzbekistan for Amu Bukhara Irrigation System Rehabilitation (TA 7917) [Consultant's Energy Efficiency & Clean Development Mechanism (CDM) Report]. Manila 42 O&M Cost Report of ABISOA for 2007-2011 ADB. 2012. Technical Assistance to Uzbekistan for Amu Bukhara Irrigation System Rehabilitation (TA 7917) [Consultant's Energy Efficiency & Clean Development Mechanism (CDM) Report]. Manila 43 tCO2e - tons of carbon dioxide equivalent

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report data moderately saline lands in ABIS cover about 25-30% and severely saline about 3- 4% of the irrigated lands. This is attributed to the application of saline irrigation water and the concentration of salts in the soil profile due to inappropriate leaching and poor drainage condition.

D. Proposed Components

72. The following components for the Project were identified and decided for consideration in during the preparation of the feasibility study:

(i) ABIS Management Modernization including Tudakul and Kuyu Mazar reservoirs and pilot on-farm infrastructure and management improvement, and demonstration plots to implement the project, manage a monitoring and evaluation system, and provide improved and cost-effective water delivery service to the farmers for crop yield/intensity increases (ii) Replacement/Rehabilitation/Upgrade of four (4) prioritized Pump Stations and their auxiliaries (Khamza-1 and its Auxiliary, Khamza-2, Kuyu Mazar, and Kiziltepa and its Auxiliary) to provide reliable water for irrigation, domestic, municipal, and industry, reduce operation and maintenance (O&M) costs including power consumption, reduce green gas emissions (iii) Amu Darya River Training and ABIS Intake Desilting Basin to secure water availability, reduce sediment loading with the aim of reduce O&M costs and improve water delivery service (iv) ABIS Main Infrastructure Modernization to reduce conveyance and management water losses, and provide improved water delivery service (v) Structural Drainage Improvement to reduce saline and waterlogged areas, increase crop yields, and to reduce non-beneficial and non-recoverable water consumption

73. As available Project funding constraints became apparent during the preparation of the Project the five components were re-assessed. It was decided to focus the Project on Components (i), (ii), and (iv).

74. Component (iii) would not be undertaken with financing from the ADB. This Component with its interventions would take place outside the territory of the Republic of Uzbekistan could not be financed by the ADB. The Component would require funding from the Government to improve the Intake structure on the Amu Darya. Without the improvement of the Intake and de-silting facilities in Turkmenistan the risk to Project sustainability increases. The Government’s funding of these improvements should be included as a contribution to the Project. This funding for these improvements will amount to approximately $50 million, which would include the procurement of dredgers equipment.

75. Component (v) is also a critical Component as drainage improvements are required to sustain agricultural production within the Project. The Government is currently funding this effort to the level of approximately $5 million to $6 million per year. In addition, another approximate $5 million to $6 million has been allocated and being spent for maintenance and improvement to existing drainage facilities. This level of

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report spending should continue and be considered as part of the Government contribution to the Project. Over the expected duration of the project this may amount to about $30 million solely for improvement of drainage works.

E. Rehabilitation and Improvements

76. The ADB and Government decided the Project’s focus would be on the rehabilitation and / or reconstruction of main pump stations within the ABIS, upgrading inter-farm canals and structures within a pilot demonstration area, and associated water management technologies at the on-farm level. With Component (i) the Project would propose to improve water-use efficiency and water productivity, by use of a pilot-area approach to demonstrate improved water management measures at the inter-farm level and on-farm level. The approach would demonstrate and promote improved water management and operations of the canal commands; and at the on-farm level guide farmers; and WUAs to manage the on-farm systems more effectively. Overall, the approach would strengthen joint operations of inter- and on-farm systems. In addition to overall system management improvement, within Component (i) social, resettlement, and environmental safeguard activities would be funded and implemented. Component (ii) which would relate to replacement / rehabilitation / upgrading of five pump stations (one auxiliary pump station would be combined with its associated main pump stations) would introduce more efficient pumps and modern technical support equipment and systems to improve both water delivery and energy efficiency. Component (iv) would concentrate on rehabilitating the main conveyance system which delivers water supplies to agricultural, industrial, and urban users. Only essential hydraulic control structures along the main system would be rehabilitated.

1. Climate Change Adaptation and Mitigation

77. As climate change impacts are now becoming more apparent and forecast, the Project has been designed to incorporate adaptation measures for sustainable operations of the ABIS. Towards the end of the long-term planning horizon, that is towards 2050, strongly positive annual variation should approximately balance the river decline caused by climate-change. At the other extreme, negative annual variation could double the climate- change deficit. On top of this, there will be an approximate 9% increase in crop water demand, and an unquantifiable decrease in river flow due to human interventions. Overall, the worst-case scenario will consist of a water deficit which cannot be met by any combination of interventions and adaptations. Nevertheless, if the goal of a 40% reduction in water demand by 2050 is achieved then an adequate water supply should still be available in most years. There are too many uncertainties to quantify the probability of adequate yields within the ABIS, but given realization of the target reduction in water demand, a subjective ‘guesstimate’, of about 90% annual water demand attainment, seems reasonable. However, there are significant attendant risks, of which the three most significant are:

 GHG emissions could be worse than the modelled scenarios, thereby accelerating global warming, and hence glacial/snow melt in the Amu Darya’s headwaters.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

 Human intervention, such as increased extraction for irrigation in Tajikistan and Afghanistan, could artificially accelerate the downstream recession.  The water conservation goal of the ABIS might not prove to be attainable within the necessary time-frame.

78. If the long term goal of a 40% reduction in water usage is to be attained then a robust long-term action-plan must be prepared, of which the first seven years will be the ‘demonstration phase’ of this project. In view of the short-term focus of farmers to make a reasonable living, it is unlikely that long-term sustainability of the ABIS will constitute sufficient incentive for farmers to transcend the profound cultural shift that a 40% saving in water usage entails. Therefore, the objectives of this phase must be:

 To set up two initial demonstration farms in selected demonstration areas, followed by a further two demonstration farms within the third year, in which to demonstrate the benefits of water conservation to the wider farming community.  To introduce the full spectrum of water saving technologies to farmers in the selected demonstration areas, with training, subsidy, and demonstrable benefits to the farmers.  To foster an ethos and capability of effective technical assistance within the BISA and MAWR, in which water conservation becomes the universal default practice.  To demonstrate the economic viability of water conserving technologies, coupled with improved yields and the establishment of ABIS sustainability.  To establish at least two micrometeorology sites within the ABIS, by which evapotranspiration (and hence crop water requirements) trends and variability can be monitored on a sustainable basis.  To establish a network of tensiometers and/or other instrumentation, with maintenance and monitoring, to facilitate optimum irrigation and leachate rates.  To create a wholesale and retail infrastructure in which all the materiel necessary for water conservation becomes readily accessible and affordable to farmers in the ABIS.  To establish all of the above both as this projects’ contribution, standing in its own right, and as the initial impetus for the wider imperative of making water conservation a universal long-term goal across the whole of the ABIS.

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79. Climate change mitigation measures will be directed towards reduction of greenhouse gases (GHG) within ABIS and include:

(i) reducing emissions relating to electricity use for powering pumps and operation of the buildings: (a) measures will include electrical metering on motors to improve monitoring and management, leading to reduced energy consumption (b) new building facilities measures to include reduced energy use – such as, double glazed windows, improved ventilation systems (c) high efficiency pumps and electric motors (ii) reducing indirect emissions from diesel and petrol for transportation and the supply of goods/services for direct and indirect staff of the ABIS

2. River Intake Channel and Dredgers

80. The first hydraulic structure in the ABIS system is a gated control structure in Turkmenistan (called the ‘intake gates’) that was built in the 1960s at the start of the ABIS project’s construction. This structure was originally 2.8 km (or “Picket 28+00”) downstream from the River but morphological conditions have changed significantly the location of the point of diversion since then. See Annex 2 Engineering and details refer to Appendix 1 of the same Annex 2.

81. The ABMK Intake Gates are the basic separating line between the intake channel and the Main Canal. The intake gates are located 10.97 km from the first flow division structure in the ABIS, which is situated in between the border crossings of Uzbekistan and Turkmenistan. The canal depth was approximately 3 m in the conditions upstream and downstream of the intake structure. At high flows during the irrigation season, the upstream depth is another 3 to 3.5 m deeper. The channel/canal at this location is approximately 70-80 m wide.

82. The intake gates are in a state of general disrepair and require rehabilitation to all the electro-mechanical components, including some structural repairs to the gates. Specific points mentioned by the operators are that the electrical controls built in 1975 are worn out and unreliable, and the overhead frame for the supplemental sluice gates is under-sized and requires replacement. It is recommended that when the intake gate structure is rehabilitated a trash rack with motorized removal system is incorporated into the design. It may also be practical and cost-effective to install some floating booms at the entrance to the intake channel(s) to keep some of the floating debris from entering the system in the first place.

83. On behalf of ABMK, a separate company called Gidromechanizatsiya State Specialized Control (GSU) operates and maintains a fleet of twenty (20) boat-mounted suction pipeline dredgers in Turkmenistan (refer to Annex 2 and its Appendix 1 for details). The dredgers range in age from 1965 to 1990; all of them are past their design service life and require considerable maintenance to keep operating. GSU has a renewable annual contract to carry out dredging works in the ABMK intake channel and the Amu Darya River in Turkmenistan using electric- and diesel-powered units owned by ABMK.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

84. The capacity for sediment removal of the current dredgers varies from 130 m3/hr to 160 m3/hr. Dredgers are typically operated only 14-16 hrs/day, instead of continuously, because they have to be shut down every day for extensive maintenance. There are 4 to 7 operators per dredger that work in shifts of three. Living quarters for the crew are made available from enclosed boats that are tethered to each dredger unit.

85. In general, the dredgers have exceeded their service life and only repeated and frequent maintenance activities ensure their continued operation. It is recommended that ten (10) dredgers be replaced with new units as an urgent priority and then the remaining ten (10) dredgers are replaced within 5-10 years (ie, total of (20) units replaced in two stages).

86. The sediment loading of the Amu Darya River is extremely high. Data provided by ABMK for 2009 to 2011 show that on an annual basis the 3-year average suspended sediment concentration was 2.30 kg/m3 at the intake channel and 0.89 kg/m3 in the ABMK Main Canal at km 152. During spring and summer the monthly average concentrations in the intake channel reach 4 kg/m3 (range: 2.62 to 4.02 kg/m3) and reduce to 1.1 kg/m3 in the fall and winter months (range: 0.87 to 1.24 kg/m3). At km 152 in the ABMK Main Canal, the spring/summer and fall/winter average concentrations were 1.27 kg/m3 and 0.45 kg/m3, respectively.

87. A cost-effective solution is envisaged by using two structural components: (i) bottom structure to reduce coarse sand coming to the intake; and (ii) large sedimentation basin for deposition of fine sand and silt fraction. A sedimentation basin is a priority option to provide fractional deposition and hence, to exclude the problematic coarser grain size fraction. It has a rectangular top view located in a straight section of the existing channel. The flow velocity has to be significantly reduced by increasing the existing channel cross section. The length of the basin which is required to ensure the deposition of the excludable fraction has to be determined by numerical model investigation.

88. By knowing soil and sediment properties the existing channel will be widened and/or deepened to provide appropriate flow velocity at any water level of Amu Darya and an appropriate storage or buffer volume. Specific soil mechanical investigation has to ensure slope stability of the excavated banks. The appropriate location of the desilting basin is in a straight section of the existing channel. Details of the proposed desilting basin are provided in Annex 2 Engineering; Appendix 2 River Morphology / Sediment; Attachment 2.

3. Pumping Stations

89. The rehabilitation/upgrading of the main pump stations has the following main objectives:

(i) Reduce of pump outages and system failures (ii) Increase of overall pump unit efficiency (iii) Include measures on high wear of wetted pump parts (iv) Lower maintenance and operation (O&M) costs (v) Improve pump control (vi) Increase of overall life time of the pump station equipment

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

90. The pump stations are all well past their design service life (over 30 to 40 years in operation). Each of the pumps and motors are in working condition, but in poor shape and perform below their design efficiency and capacity. Maintenance crews do their best to keep the plants running, but in general the electro-mechanical equipment is worn out and continued repairs are not cost-effective. All pump sets and their auxiliary components require complete replacement.

91. Annex 2 presents detailed assessment reports of the main pump stations and provides a summary of areas of concern for each of the main pump stations and a summary of the equipment at each of the pump stations.

92. In general, the pump impellers have deteriorated from pitting and abrasion due to the heavy silt load in the canal water, and from general wear and tear in the pump set. The damage to the impellers is repaired by the central machine shop at ABMK headquarters; however, the regular practice is to add filler metal to worn parts of the impeller by seam welding. The filler welding results in a very uneven surface on the impeller blades and negatively affects the performance of the pumps. The reinforced pump buildings and auxiliary systems are also in poor condition.

93. During the feasibility phase of this study seismic stability investigations were performed by the Scientific-Research Enterprise “Kuprik” on the Khamza 1 pump house superstructure. From the seismic results it can be concluded that rehabilitation and strengthening of the Khamza 1 pump house superstructure is technically very difficult (refer to the Kuprick investigation report attached to Khamza 1 Pump Station Assessment Report).

94. The Project intends construct a new Khamza 1 Pump Station, which includes the discharge capacity of Khamza Auxiliary; replacing the two pump stations with a single modern unit. All technical equipment within the pump station and associated with the pump station will be replaced. The remaining four pump stations will be rehabilitated by having the building structure strengthened, replacement of old pump sets with new pump sets, and replacement of all technical equipment (electrical and mechanical) associated with operation of the pumping units and building.

95. The Khamza New Pump Station (Figure 3) will consist of the following structures:

 Diversion canal  Trash screen structure  Forebay  Pumping station building with intake chambers  Discharge pipeline system  Sedimentation basin for technical water supply  Water discharge structures  Discharge canal  Auxiliary facilities and building  Sub-station (upgrades)

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Figure 3: Khamza New Pump Station Location Map

Source: ADB PPTA UZB 7917, 2013 -- Amu Bukhara Irrigation System Rehabilitation Project

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

4. ABMK – Main Canal Hydraulic Structures and Reservoirs

96. The Amu Bukhara Machine Kanal (ABMK) is the main conveyance canal of the Amu Bukhara Irrigation System (ABIS), one of the most important water-related systems in Uzbekistan. Almost the entire Bukhara and a portion of Navoi regions are irrigated from the ABMK. Before the construction of the ABIS in the 1960s, the Zarafshan River served as the main source of irrigation.

97. The ABMK canal system has a total length of 384.8 km,44 stretching from the intake on the Amu Darya River in Turkmenistan to the Zarafshan River to the Shofrikan division structure northeast of Bukhara City. The total command area supplied by the ABMK Canal is 315,000 ha.

98. The ABIS intake from the Amu Darya River is 5,300 Mm3/year, including 4,700 Mm3 for the Bukhara Province and 600 Mm3 for the Navoi Province.

99. The rehabilitation of the ABMK Canal system represents a major stage in an overall modernization program for the upgrading of the ABIS. The ABMK rehabilitation component will replace/repair or upgrade worn-out existing control and measurement infrastructure at critical locations in the main conveyance system. The rehabilitation will improve the reliability of irrigation water service and, along with the rehabilitation of the main pump stations, make the main conveyance system more efficient, cost-effective and safer.

100. Ten (10) critical infrastructure sites on the ABMK main conveyance system have been prioritized for rehabilitation. These improvements will facilitate more efficient and safer canal operations and management, in addition to allowing pump operators to more closely match available water supplies with irrigation demands.

101. The main components of the rehabilitation works comprise the following:

(i) Civil engineering work, which includes repairs to existing concrete bulkhead, wing walls and structure decks; replacement and repairs to steel gate assemblies; embankment work; new measurement structures; and concrete lining repairs.

(ii) Electro-mechanical equipment, which includes the replacement and repair of gate lifting mechanisms, electric control systems, and auxiliary equipment.

102. The following principle upgrading and repairs will be undertaken as part of the rehabilitation program for the ten major structures on the ABMK:

(i) Thirty-five (35) control gates including all auxiliary equipment will be installed at eight (8) division points (cross regulators) in the ABMK (ii) Reconstruction of fifteen (15) canal head regulators with a total of twenty- eight (28) control gates and all auxiliary equipment

44 Includes 6.2 km of the Yamandjar Canal starting in Turkmenistan territory that is operated under the authority of ABMK

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

(iii) Twelve (12) new control gates including all auxiliary equipment will be installed at 5 outflow (spill) points in the ABMK (iv) Four (4) new control gates and all auxiliary equipment, plus eight (8) new control gates and all auxiliary equipment will be installed at the inlet and outlet of the Tudakul Reservoir, respectively (v) Wireless radio communications set-ups at four (4) key structure locations.

103. The control gates at the division points, head regulators, and outflows have common design characteristics: (i) heavy duty sluice gates (of various dimensions and configurations), (ii) electrical motors and geared lifting mechanisms, and (iii) local push- button control panels.

104. The various works can be summarized and transformed into procurement packages. Provisions include the fabrication, delivery and installation of new gates, frames, lifting devices, and all miscellaneous items and incidental works. It is foreseen that while the civil and mechanical works to be implemented requires no special skills or capacities from qualified prospective contractors, the lack of any closure period of the ABMK canal system severely constrains timely implementation of the works. It will therefore be necessary to identify suitably qualified contractors who have the capacity to operate several work sites parallel or to develop separate procurement packages for each major section of the canal system. The aim must be to optimize the time required to complete the works foreseen.

105. Any reductions in canal flow, while only expected to be minimal, must also be coordinated with critical periods of irrigation demands, which may be alleviated to a certain extent by utilizing supplemental water storage from Kuyu Mazar and Tudakul Reservoirs during construction. In any case, it would be preferable to aim for an early closure of main canal operations in October so that work could commence during the winter months. Also, diversion works in the form of earthen dikes can be used in order to reduce the periods for disruptions in flow of the canal during the rehabilitation works.

106. There are indications that the conveyance capacity of the canal system is reduced due to siltation. One obvious sign is that the canals are run with every little freeboard, and in some places where the water level is controlled by a cross regulator structure, the canal water surface elevations are extremely high. There was also evidence of siltation and excessive vegetative growth in canals at all levels of the system.

107. The typical practice is to place the sediment piles removed from the canals on top of the canal embankments, where it is left to dry and harden. Operators mentioned that in some cases the top of the canal banks would be graded level subsequent to the excavation work. This deposited silt generally prevents access for service vehicles, and must slow the progress the next time excavators are brought to the area for maintenance.

108. The water level control structures in the canals are rectangular sluice gates, which are difficult for operators to use for maintaining constant (upstream) water levels. The modernization program needs to further examine the operational consequences of

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report this outdated design in terms of the extra O&M costs involved, and in terms of the impact on water delivery service to farm canals.

109. Various measurement structure designs are used in the project, including rated canal sections with staff gauges, submerged orifices, and flumes. The accuracy of most devices is estimated to be roughly about +/-10 to 20%. There are a number of issues affecting the accuracy, and therefore usefulness, of the recorded measurements such as poor structural condition, siltation, submergence, weed growth, non-standard hydraulic conditions, and uneven flow (velocity) distribution.

110. There is wide disparity in the condition of the water control and measurement infrastructure in the project. Such disparities seem to indicate that a more centralized approach to O&M is warranted. In all cases, the project authorities should be striving to provide an equitable water delivery service to farmers regardless of their location in the command area.

111. There is a significant difference between the level of canal maintenance being carried out in the project by ABMK and BISA, compared to the WUAs and farmers. Of particular concern is the lack of maintenance done in the Aryks (on-farm canals), which are the responsibility of the WUAs and farmers. This affects O&M by reducing canal conveyance efficiencies, as well as increasing the amount of non-beneficial ET. It appears that in many places the vegetative growth is so out of control with deep roots that when the plants are removed the channels will have to be reshaped with significant earthwork costs involved.

112. Freeboard is a margin of safety provided in irrigation canals to account for the possibility of excess flows due to unforeseen or improper operations of the canals, diversion intakes, and pumps. In many places the canals are run with very little freeboard. This is likely due to the combined impact of low irrigation efficiency (that is, more water is needed in the system to meet crop water requirements), siltation, vegetation, and a general lack of maintenance. Canal siltation, and heavy weed growth, was evident at all levels of the canal system.

113. There are two main reservoirs located in the ABIS project area: (i) Kuyu Mazar Reservoir with a total volume of 320 Mm3 with a usable storage of 275 Mm3; and, (ii) Tudakul Reservoir with a total volume of 1,200 Mm3 with a usable storage of 700 Mm3. Both reservoirs are feed by the ABMK system and are used for storage and compensation for irrigation supply. However Kuyu Mazar is also the principal fresh drinking water supply reservoir for Bukhara and therefore has public access restrictions and is isolated from drainage return flow which is diverted to the Tudakul Reservoir.

114. Although supplemental water discharge can be anticipated from Kuyu-Mazar and Tudakul Reservoirs, groundwater, and return flow during peak vegetation season, the volume of discharge water from these sources are not substantial and the use of these sources (except for Kuyu-Mazar reservoir) should be minimized due to high saline water.

115. A long-term strategy is needed for maintaining the usable storage volumes, and water quality of these two reservoirs. Even though significant amounts of sediment enter each reservoir with the pumped irrigation water, neither reservoir is dredged, so

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report sediment has been building up for many years. In addition, it is mentioned in previous studies of the project, such as the feasibility study done by Lemna Inc.45, that the water quality of the Tudakul Reservoir is poor, with salt concentrations three times as high as the water diverted from the Amu Darya. Until a water and salt balance of the system is completed, and assessed, it will not be possible to determine the exact source and relative degree of the reservoir’s salinity, but comments by ABMK staff46 indicated that they are aware of the problem with degradation and only operate the reservoir to ‘decant water off the top’ where the quality is better.

5. Inter-Farm Canal Rehabilitation and Pilot Farm (Demonstration Area)

116. The ABIS in Bukhara District is composed of two inter-district canals, the Shakhrud canal and the Juyzar canal, and inter-farm canals as follows: the Chorbakr, Kui Chorbakr, Navruz, Gaziobod, Ot Kuchi, Foshun, and Mablabiyon canals. These canals are in the area of principal interest for Project. A pilot demonstration area, which includes a demonstration farm, was selected on the Gaziobod inter-farm canal. This canal is supplied water from Kuyu Mazar Pump Station.

117. The Gaziobod inter-farm canal is 11.58 km long is operated by the Shakhrud- Dustlik ISA. The canal supplies water to 4 WUAs - Kui-Gaziobod, Yukori Gaziobod, Kavala Makhmud, and Chor-rukh. The Canal has 16 off-takes (outlets) equipped with gates, which are operational, but in need of repair. The Canal has water measuring devices, of which 14 are calibrated-canal structures, one is a weir calibrated for water flow measurement, and one uses a stilling well arrangement with a staff gauge. The following improvements are anticipated:

 Repair of stilling basin-type measurement device  Repair of all off-take gates  Establish a water rotation distribution system  Conduct training workshops for Shakhrud-Dustlik ISA staff for operation and maintenance of the inter-farm system

118. The Kui-Gaziobod on-farm canal is 21.7 km long, including 5.5 km of an upstream section, which is under Shakhrud-Dustlik ISA, and the rest is under Kui- Gaziobod WUA. It has 18 off-takes (outlets) to 12 farms; about 30% of the canal is unlined. The outlets are equipped with the gates, which are in poor condition without water measuring devices and the outlet gates require rehabilitation. In addition, there are small off-takes for the water supply to residents. The following works are proposed:

 Repair and rehabilitation of outlets, including installation of water measuring devices (flumes)  Arrange water measuring points at the boundaries of the settlements  Introduce a rotation / distribution system for planning and management by WUA

45 Lemna Inc. 2004. Rehabilitation of Amu Bukhara Irrigation System – Feasibility Study. 46 Head of Pump Stations, Energy and Communications, Kuyu Mazar.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

 Conduct training workshops for Kui-Gaziobod WUA staff for operation and maintenance  Construct water intake structures from WUA canal to the farm and provide water measuring devices to individual plots / fields  Construct structures with water measurement devices at the outlets to drains  Carry out land levelling with zero slope (level basins)  Introduce temporary field canals to uniformly distribute water across plots  Construct inspection wells / piezometers to monitor ground waters  Measure water salinity at inlet and outlets to fields to determine water-salt balance  Install a mini-meteorological station and tensiometers for determining crop water requirements, timing of application, and irrigation application rates  Consider a pilot irrigation methods demonstration, which may include low- pressure, no-filtration irrigation systems

119. In the Kagan district, water is supplied by the Shakhrud inter-district canal and nine inter-farm canals: the Kui Khomi, Metrobod, Yangi Berishim, Chukati, Kagan, Yabon, Yangiobod, Khonobod and Akhurberdi canals.

120. The farms in the Peshku district receive water from the Pahku and Zandani inter- farm canals and in the Romitan district water is supplied by the Varakhsho and Khasanobod canals.

121. Bukhara City receives water from the Kui Shakhrud, Farakent-2, Chorbakr, Shakhrud Beton and Kabdun Kent canals.

122. In Bukhara Region about 80% of the inter-farm canals are lined with concrete and the rest are in an earth bed. The density of canals (both the inter-district and inter-farm) is about 3.94 m/ha, with lined canals have a density of 2.84 m/ha. The overall efficiency of these canals is reported to be about 91%.

123. The Bukhara region has a developed on-farm irrigation network. The length of this network is 5,024 km, including 3,935 km of canals in earth beds, 693 km lined canals, and 396 km in flumes (prefabricated u-shaped concrete sections of about 3m assembled to form channels for irrigation water).

124. The density of the on-farm irrigation network is about 50.5 m/ha. The average efficiency of the on-farm canals is reported to be 83%. According to BISA and ISA estimates (2011) approximately 173 km of on-farm canals need to be repaired and 3,796 km require rehabilitation to restore design capacities and operational requirements.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

125. The demonstration farms / demonstration areas will introduce and promote, but will not be limited to, at least the following water conservation methods and approaches:

 Change from the current practice of maximizing the amount of available irrigation water, to irrigating ‘what the crop needs (plus an appropriate leachate allowance), and no more  Reduce transmission / seepage losses by lining canals wherever feasible  Improve on-farm and off-farm irrigation control structures  Utilize deep ripping to improve drainage  Apply / extend the practice of minimum tillage  Introduce laser levelling, both to conserve water and to improve crop uniformity  Introduce drip irrigation wherever crops are appropriate – and not just within greenhouses  Utilize other pressure irrigation systems, such as low level sprays, wherever appropriate.  Improve tree shelter belts (e.g. two-trees deep alternate poplar/mulberry)  Better use of appropriate mulching  Optimised crop calendar to respond to the changing temperature and variability regime  Appropriate phased introduction of more thermo-tolerant crops (especially for cotton), halo-tolerant crops, and cultivars requiring fewer chill-days, including GE varieties  Encouragement of appropriate policy reforms, such as a shift in subsidy from water to conservation technologies

6. Drainage

126. The drainage network is composed of large water channels and inter-farm collectors, on-farm open, and buried collectors and drains, and vertical drainage wells. The volume of drainage water in the region varies between 1.70 Bm3/year to 2.70 Bm3/year, 30% of which is diverted to the Amu Darya, and the rest is diverted to low-lying areas near the area of the ABIS.

127. The length of the drainage network is 2,442.2 km. The inter-farm drainage network represents about 33% of the network and on-farm drainage 67%, this includes both open and closed drainage networks. The density of the inter-farm drainage network is about 8.0 m/ha, while the on-farm length is about 16.5 m/ha.

128. The Government through the BISA and HGME has implemented a program (Amelioration Fund) for improvement (expansion) and rehabilitation of the existing system. This program is providing about $5 million to $6 million per year for improvement

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report and approximately an equal amount for maintenance. This funding must continue or be increased to sustain agricultural production in the ABIS.

129. Areas of priority for drainage improvements are updated on an annual basis by HGME based on current conditions. The extent of irrigated crop land affected by saline soils and poor drainage are summarized by district in Annex 1.

130. Rehabilitation of drainage channels in the ABIS done under the Amelioration Fund needs to be closely coordinated with the activities of the on-going ADB LIP to ensure that downstream drainage channels will be properly addressed (in terms of capacity and timing) so as not to create bottlenecks in the system.

VII. IMPLEMENTATION

A. Implementation Schedule

131. Following is an Implementation Schedule prepared for the Amu Bukhara Irrigation System Rehabilitation Project (refer to Annex 3).

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Amu Bukhara Irrigation System Rehabilitation Implementation Schedule Contracta Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Project Management -- Consulting Services for Gov Contract Management, Supervision, and ▲ ADB Loan Effective ▲Project Close Institutional Strengthening Loan Close ▲ Gov Project Director assigned ▲ Establishment of Bukhara Project Management Gov ▲ Office (PMO) Establishment of Project Implementation Unit (PIU) Gov ► with system for data management Establishment of Project Environmental Gov Management and Monitoring Unit with system for ▲ data management Establishment of accounting and financial Gov ▲ management unit with reporting system Staffing and preparation of tenders for project Gov ► management consulting services Tendering and selection of consulting services for Gov ► Project Management Consultant 1 Services of Project Management Consultant ► Submission of Quarterly Technical and Financial 1 ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports Submission of Annual Technical, Financial, and 1 ▲ ▲ ▲ ▲ ▲ ▲ Audit Reports

Khamza New Pump Station (new construction) -- 2 Turnkey Contractor Revision to ADB bidding documents (international Gov w/1 tender) based on Government approval of Decree ► 110 Feasibility Study Additional geotechnical investigations conducted Gov w/1 ► and results included in the tender documents Issue and evaluation of tender in collaboration with Gov w/1 ► Government and ADB Selection and contracting of Khamza New PS Gov w/1 ▲ Turnkey Contractor Mobilization of Turnkey Contractor for Khamza New 2 ▲ PS 2 Site installation, Camp and Facilities ► Detailed Designs and Construction Drawings for 2 Khamza 1 PS and Ancillary Works (new) prepared ► by Contractor and approved by Government Additional field surveys and additional geotechnical 2 site investigations and reconciliation of design data ►

2 Tendering for electro-mechanical equipment ► 2 Model tests (pumps) ► Construction of Khamza New civil works and pump 2 ► building Local procurement of minor systems and equipment 2 ► International procurement of electro-mechanical 2 equipment (pumps, motors, and motor control ► centers) 2 Construction of new intake channel ► Installation of new rising mains with new outlet 2 ► structure Installation of pumps, motors and motor control 2 ► centers 2 Commissioning of new Pump Station ▲ 2 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Contracta Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Kuyu Mazar Pump Station (rehabilitation) -- Turnkey Contractor Gov w/1 Preparation of turnkey tender ► Gov w/1 Issue and evaluation of tender in collaboration with ► Government Gov w/1 Selection and contracting of turnkey contractor ▲ (Government with ADB concurrence) Mobilization of Turnkey Contractor for Kuyu Mazar 3 ▲ PS 3 Site installation, Camp and Facilities ▲ Detailed Designs and Construction Drawings for 3 Kuyu Mazar PS and Ancillary Works (rehab) ► prepared by Contractor and approved by Additional field surveys and additional geotechnicalGovernment 3 site investigations and reconciliation of design data ►

3 Tendering for electro-mechanical equipment ► 3 Model tests (pumps) ► 3 Local procurement of minor systems and equipment ▲ International procurement of electro-mechanical 3 equipment (pumps, motors, and motor control ► centers) 3 Construction of building extension ► 3 Rehabilitation of pump station - 3 new pumps and motor sets per year (including strengthening of ► building) 3 Commissioning of rehabilitated Pump Station (3 + 3 ▲ ▲ Units) 3 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

Khamza 2 Pump Station (rehabilitation) -- Turnkey Contractor Gov w/1 Preparation of turnkey tender ► Gov w/1 Issue and evaluation of tender in collaboration with ► Government Gov w/1 Selection and contracting of turnkey contractor ▲ (Government with ADB concurrence) Mobilization of Turnkey Contractor for Khamza 2 PS 4 ▲

4 Site installation, Camp and Facilities ► Detailed Designs and Construction Drawings for 4 Khamza 2 PS and Ancillary Works (rehab) prepared ► by Contractor and approved by Government Additional field surveys and additional geotechnical 4 site investigations and reconciliation of design data ►

4 Tendering for electro-mechanical equipment ► 4 Model tests (pumps) ► 4 Local procurement of minor systems and equipment ▲ International procurement of electro-mechanical 4 equipment (pumps, motors, and motor control ► centers) 4 Rehabilitation of pump station - 5 new pumps and motor sets per year (including strengthening of ► building) 4 Commissioning of rehabilitated Pump Station (5 + 5 ▲ ▲ Units) 4 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Contracta Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Kizil Tepa Pump Station (rehabilitation) -- Turnkey Contractor Gov w/1 Preparation of turnkey tender ► Gov w/1 Issue and evaluation of tender in collaboration with ► Government Gov w/1 Selection and contracting of turnkey contractor ▲ (Government with ADB concurrence) Mobilization of Turnkey Contractor for Kizil Tepa PS 5 ▲

5 Site installation, Camp and Facilities ▲ Detailed Designs and Construction Drawings for 5 Kizil Tepa PS and Ancillary Works (rehab) prepared ► by Contractor and approved by Government Additional field surveys and additional geotechnical 5 site investigations and reconciliation of design data ►

5 Tendering for electro-mechanical equipment ► 5 Model tests (pumps) ► 5 Local procurement of minor systems and equipment ▲ International procurement of electro-mechanical 5 equipment (pumps, motors, and motor control ► centers) 5 Rehabilitation of pump station - 5 new pumps and motor sets per year (including strengthening of ► building) 5 Commissioning of rehabilitated Pump Station (5 + 5 ▲ ▲ Units) 5 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

Kizil Tepa Auxiliary Pump Station (rehabilitation) -- Turnkey Contractor Gov w/1 Preparation of turnkey tender ► Gov w/1 Issue and evaluation of tender in collaboration with ► Government Gov w/1 Selection and contracting of turnkey contractor ▲ (Government with ADB concurrence) Mobilization of Turnkey Contractor for Kizil Tepa 6 ▲ Aux. PS 6 Site installation, Camp and Facilities ► Detailed Designs and Construction Drawings for 6 Kizil Tepa Aux. PS and Ancillary Works (rehab) ► prepared by Contractor and approved by Additional field surveys and additional geotechnicalGovernment 6 site investigations and reconciliation of design data ►

6 Tendering for electro-mechanical equipment ► 6 Model tests (pumps) ► 6 Local procurement of minor systems and equipment ▲ International procurement of electro-mechanical 6 equipment (pumps, motors, and motor control ► centers) 6 Rehabilitation of pump station - 26 new pumps and motor sets per year (including strengthening of ► building) 6 Commissioning of rehabilitated Pump Station (13 + ▲ ▲ 13 Units) 6 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Contracta Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Infrastructure Improvements to ABMK Main Conveyance Canal (10 Sites) 1 Validation of Feasibility Study data and prioritization ▲ Gov w/1 Preparation of tender, selection, and contracting for ► rehabilitation of ABMK critical structures 7 Additional data and surveys by the Contractor ▲ 7 Detailed engineering designs and construction ► drawings by the Contractor 7 Implementation of improvement / rehabilitation of ► structures 7 Commissioning and turnover of works ▲ 7 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

ABIS Management Modernization (including Water Conservation Demonstration Initiatives) 1 Assessment of the institutional arrangements and capacities of ABMK, BISA, ISAs and WUAs for ► management of the ABIS 1 Recommend implementable procedures and rules to ▲ improve ABIS management 1 Develop capacity building strategies and water conservation program for implementation of ► improvements to ABIS management 1 Undertake capacity development program for ABIS ► water management personnel 1 Detailed planning for DSS and SCADA systems ► Gov w/1 Preparation of tender, selection, and contracting for ► DSS 8 Implementation, testing and training of ► ABIS/BISA/ISA staff on DSS Gov w/1 Preparation of tender, selection, and contracting for ► SCADA 9 Implementation, testing and training of ► ABIS/BISA/ISA staff on SCADA 1 Confirm first demonstration area for irrigation and ▲ agricultural improvement 1 Detailed planning and design for improving water distribution and management on the inter- and on- ► farm canals of the pilot demonstration areas 1 Detailed planning and design for improving water distribution, water conservation and management on ► the farms of the pilot demonstration areas Gov w/1 Preparation of tender, selection, and contracting for rehabilitation of inter-farm and farm canal structures ► in pilot areas 10 Additional data and surveys by the Contractor ▲ 10 Detailed engineering designs and construction ► drawings by the Contractor 10 Implementation of improvement / rehabilitation of ► inter-farm and farm canal structures 10 Plant tree shelter belts ▲ 10 Laser levelling ▲ 10 Deep ripping ► 10 Minimum tilling ► 10 Drip/pressure irrigation ► 10 Drip-related filtration and power supply ► 10 Deploy tensiometers and train in use ► 10 Mulching ► 10 Optimum cropping calendar ► 10 Development of new genetic engineered cultivars ► (assumed developed by yr 5)

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Contracta Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tasks Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 1 Selection of 2nd pilot demonstration area ▲ 1 Detailed planning and design for improving water distribution and management on the inter- and on- ► farm canals of the pilot demonstration areas 1 Detailed planning and design for improving water distribution, water conservation and management on ► the farms of the pilot demonstration areas Gov w/1 Preparation of tender, selection, and contracting for rehabilitation of inter-farm and farm canal structures ► in pilot areas 10 Additional data and surveys by the Contractor ▲ 10 Detailed engineering designs and construction ► drawings by the Contractor 10 Implementation of improvement / rehabilitation of ► inter-farm and farm canal structures 10 Plant tree shelter belts ▲ 10 Laser levelling ▲ 10 Deep ripping ► 10 Minimum tilling ► 10 Drip/pressure irrigation ► 10 Drip-related filtration and power supply ► 10 Deploy tensiometers and train in use ► 10 Mulching ► 10 Optimum cropping calendar ► 1 Based on results of the pilot demonstration areas undertake the capacity development of WUAs to ► improve water management for improved agricultural water productivity 1 Submission of Quarterly, Technical, and Financial ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Reports to PMU

Safeguards 1 and PMU Ensure compliance to all safeguard requirements ► throughout the Project cycle 1 and PMU Assign staff and consultants for monitoring safeguards -- Environment, Resettlement, Poverty ► Reduction, and Gender 1 and PMU Undertake capacity building activities with local government units on environment, poverty reduction, ► and gender 1 Elaborate and implement Gender Action Plans and Poverty Reduction interventions within the scope of ► the Project 1 and PMU Submission of Quarterly and Annual, Technical, and ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ ▲ Due Diligence Reports to Gov and ADB

a Contract reference numbers for the Tasks are identified in the following Procurement Plan.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

B. Procurement

132. The scope of ABIS Rehabilitation Project essentially comprises: a) establishment of a PMO, at Tashkent and a PIU at Bukhara; b) recruitment of international consulting firms for implementation assistance to PMO/PIU; c) civil works for the new construction of the Khamza New Pump Station and rehabilitation of four (4) other pump stations (estimated cost ranging from $31.0 M to $139 M), including ten (10) critical canal structures (ABMK) (total cost $ 8.5 M); d) procurement of goods viz. software, project vehicles, office furniture etc. These are detailed in the Procurement Plan. The procurement activity is proposed strictly as per current procurement guidelines of ADB and selection of bidding method is guided by the threshold value as stipulated by ADB. In view of the complexity of the civil works contracts and as followed in the past for other irrigation projects in Uzbekistan, all the pump stations (total five (5) contracts) are proposed to be constructed on a turn-key basis with ICB method. The ABMK structures, in view of the geographical extent and medium-level contract value, are proposed to be grouped into three (3) separate contracts with ICB method on design-construct basis. Past experience in the country indicates that national contractors are financially and technically capable to carry out such type of works.

133. The consulting firm for PMC services (estimated cost of $10.7 M) for implementation assistance to PMO and PIU will be recruited on QCBS method with the FTP system. Goods such as office furniture and equipment, vehicles etc., are locally available and will be procured through local competitive shopping. All the procurement activities will be carried out with prior review by ADB.

134. Plans are for one Consulting Services package for project management, supervision, and tender preparation for rehabilitation of the above-mentioned four (4) existing ABIS Pump Stations. Included in this contract will be consulting services for institutional development of ABMK staff, WUA strengthening, agricultural and irrigation improvement for pilot demonstration area within ABIS, and supervision in collaboration MAWR of the turnkey contractors.

135. There are other contract packages planned in support of the Project, but these are either for procurement of goods and small works in support of Project activities.

136. The following Procurement Plan is to be updated on an 18-month schedule from Loan effectiveness to completion of the Project.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Procurement Plan

Basic Data Project Name: Amu Bukhara Irrigation System Rehabilitation Country: Uzbekistan Executing Agency: Ministry of Agriculture and Water Resources Loan Amount: To be determined Loan (Grant) Number: To Be determined Date of First Procurement Plan 20 February 2013 Date of this Procurement Plan: 7 March 2013

A. Procurement Thresholds, Review and 18-Month Procurement Plan 1. Project Procurement Thresholds

1. Except as the Asian Development Bank (ADB) may otherwise agree, the following process thresholds shall apply to procurement of goods and works.

Procurement of Goods and Works Method Thresholds International Competitive Bidding (ICB) for Works : Over $1,000,000 ICB for Goods : Over $1,000,000 National Competitive Bidding (NCB) for Works : Between $100,000 and $1,000,000 NCB for Goods : Between $100,000 and $1,000,000 Shopping for Works : Not more than $100,000 Shopping for Goods : Not more than $100,000

2. ADB Prior or Post-Review

2. Except as ADB may otherwise agree, the following prior or post-review requirements apply to the various procurement and consultant recruitment methods used for the Project. Procurement of Goods and Works Procurement Method Prior or Post Comments ICB Works Prior ICB Goods Prior NCB Works Prior Prior review applies to the procurement of the first two NCB contracts. If the first two contracts are procured satisfactorily it will be determined by ADB if post-review may be used. NCB Goods Prior review applies to the procurement of the first two NCB contracts. If the first two contracts are procured satisfactorily it will be determined by ADB if post-review may be used. Shopping for Works Post Shopping for Goods Post Recruitment of Consulting Firms Quality- and Cost-Based Selection (QCBS) Prior Quality and cost based on 80:20 quality–cost weighting. Applied in accordance with Guidelines on the Use of Consultants (2010, as amended from time to time Other selection methods: Consultants Prior Qualifications (CQS), Least-Cost Selection (LCS), Fixed Budget (FBS), and Single Source (SSS)

Recruitment of Individual Consultants Individual Consultants Prior

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

3. Goods and Works Contracts Estimated to Cost More Than $1 Million

3. The following table lists goods and works contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Pre- Advertisement General Contract Procurement qualification Date Comments Description Value Method of Bidders (quarter/year) (y/n) Design Supply, Install and Civil Works Turnkey Contract for $139 million ICB N Q2 2014 post-qualification Construction of Khamza- New Pump Station Design Supply, Install and Civil Works Turnkey Contract for $102 million ICB N Q1 2015 post-qualification Rehabilitation of Khamza-2 Pump Station Design Supply, Install and Civil Works Turnkey Contract for $31.1 million ICB N Q1 2015 post-qualification Rehabilitation of Kuyu- Mazar Pump Station Design Supply, Install and Civil Works Turnkey Contract for $73.1 million ICB N Q1 2015 post-qualification Rehabilitation of Kizil- Tepa Pump Station Design Supply, Install and Civil Works Turnkey Contract for Rehabilitation of Kizil- $92.4 million ICB N Q1 2015 post-qualification Tepa Auxiliary Pump Station Rehabilitation of ABMK canal regulation $8.5 million ICB N Q4 2014 post-qualification structures

4. Consulting Services Contracts Estimated to Cost More Than $100,000

4. The following table lists consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Advertisement International General Contract Recruitment Date or National Comments Description Value Method (quarter/year) Assignment Project Management, Procurement, Advanced $10.7 million QCBS (80:20) Q1 2014 International Construction action, FTP Supervision and Capacity Building

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

5. Goods and Works Contracts Estimated to Cost Less than $1 Million and Consulting Services Contracts Less than $100,000

5. The following table groups smaller-value goods, works and consulting services contracts for which procurement activity is either ongoing or expected to commence within the next 18 months.

Procurement / Value of Number of Recruitment Comments General Description Contracts(cumulative) Contracts Method Office Equipment For PMO and PIU $40,000 1-2 Shopping offices

Civil Works for inter- Demonstration farm and on-farm activities $649,200 3 NCB irrigation system rehabilitation Equipment for inter- Demonstration farm and on-farm activities $331,500 3-4 Shopping irrigation system rehabilitation Vehicles For PMO and PIU $30,000 1-2 Shopping offices

Technical studies and Topographic, surveys $80,000 geologic and 1-4 Shopping hydrological surveys Geotechnical survey for New Khamza Pump $500,000 1 NCB Station Tender design for 4 rehabilitation Pump $500,000 1 NCB Station Audit of Project The shortlist shall Accounts be based on the $90,000 2 LCS, National WB’s qualified list of audit firms

B. Project Procurement Plan

1. Indicative List of Packages Required Under the Project

6. The following table provides an indicative list of all procurement (goods, works and consulting services) over the life of the project. Contracts financed by the Borrower and others should also be indicated, with an appropriate notation in the comments section.

Estimated Estimated Domestic General Value Procurement Number of Preference Comments Description (cumulative) Method Contracts Applicable

Works Design Supply, Install and Civil Works Contract IFB will be issued for Construction of $139 million 1 ICB (Plant) N approximately in Q2 of 2014. Khamza New Pump Station

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Estimated Estimated Domestic General Value Procurement Number of Preference Comments Description (cumulative) Method Contracts Applicable

Design Supply, Install $102 million and Civil Works Turnkey IFB will be issued Contract for 1 ICB (Plant) N approximately Q1 2015 Rehabilitation of Khamza-2 Pump Station

Design Supply, Install $31.1 million and Civil Works Turnkey Contract for 1 ICB (Plant) N IFB will be issued Rehabilitation of Kuyu- approximately in Q1 2015 Mazar Pump Station)

Design Supply, Install $73.3 million and Civil Works Turnkey Contract for 1 ICB (Plant) N IFB will be issued Rehabilitation of Kizil- approximately in Q1 2015 Tepa Pump Station)

Design Supply, Install $92.4 million and Civil Works Turnkey Contract for IFB will be issued 1 ICB (Plant) N Rehabilitation of Kizil- approximately in Q1 of 2015 Tepa auxiliary Pump Station)

Rehabilitation of ABMK ICB IFB will be issued canal regulation $8.5 million 1 N (Small Works) approximately in Q4 of 2014 structures

$649,200 3 NCB N Demonstration activities Civil Works for inter- farm and on-farm irrigation system rehabilitation

Technical studies and $80,000 1-4 Shopping N Topographic, geologic and surveys hydrological surveys

Geotechnical survey for $500,000 1 NCB N Geotechnical survey for New New Khamza Pump Khamza Pump Station Station $500,000 1 NCB Tender design for 4 Tender design for 4 N rehabilitation Pump Station rehabilitation Pump Station Goods

Office equipment $40,000 1-2 Shopping N For PMO and PIU offices

Equipment for inter-farm $331,500 3-4 Shopping N Demonstration activities and on-farm irrigation system rehabilitation

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Estimated Estimated Domestic General Value Procurement Number of Preference Comments Description (cumulative) Method Contracts Applicable

Office furniture for PMO For PMO and PIU offices in Tashkent and 1 PIU at $7,000 2 Shopping No the site (Bukhara province)

Vehicles( for PMO $30,000 2 Shopping No For PMO and PIU offices Tashkent)

Accounting software 1S For PMO and PIU offices (Accounting software $5,000 1 Shopping No used by GOU)

Small Works

PMO and PIU office $20,000 1 Shopping No For PMO and PIU offices refurbishment Estimated Estimated General Recruitment Type of Value Number of Comments Description Method Proposal (cumulative) Contracts

Consulting Services: Project Management, Advance action Procurement, $10,7 million 1 QCBS 80:20 FTP Construction Supervision and Capacity Building

The shortlist shall be based on Audit of Project accounts $90,000 2 LCS BTP the WB’s qualified list of audit firms

C. Procurement Procedures

1. International Competitive Bidding

7. Each civil works contract estimated to cost more than the equivalent of $1,000,000 and each supply contract for equipment or materials estimated to cost the equivalent of $500,000 or more shall be awarded on the basis of international competitive bidding as described in Chapter II of the Guidelines for Procurement. Bidders for civil works contract shall be prequalified before bidding.

8. For contracts to awarded to on the basis of international competitive bidding, these shall be submitted to ADB, as soon as possible, and in any event not later than 90 days before the issuance of either the first prequalification invitation or the first invitation to bid for the project, a General Procurement Notice (which ADB shall arrange to publish separately) in such form and detail and containing such information as ADB shall reasonably request. ADB shall be provided the necessary information to update such General Procurement Notice annually as long as any goods and works remain to be procured on the basis of international competitive bidding.

9. For contracts to be awarded on the basis of international competitive bidding, procurement actions shall be subject to review by ADB in accordance with the procedures set forth in Chapter III of the Guidelines for Procurement. Each Draft prequalification invitation and each draft invitation to bid, to be submitted to be ADB for

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report approval under such procedures, shall reach ADB at least 21 days before it is issued and shall contain such information as ADB shall reasonably request to enable ADB to arrange for the separate publication of such invitation.

1. International Shopping

10. Each supply contract for equipment or materials estimated to cost the equivalent of $100,000 or less (other than minor items) shall be awarded on the basis of international shopping as described in Chapter IV of the Guidelines for Procurement.

11. Each Draft invitation to bid and related bid document shall be submitted to ADB for approval before they are issued.

12. Any award of contract shall be subject to prior approval.

13. In comparing bids under international competitive bidding, a margin of preference may be provided at the option of the Borrower and in accordance with the provisions of the Attachment to this Schedule, for goods manufacture in the territory of the Borrower, provided that the bidder offering such goods shall have established to the satisfaction of the Borrower and ADB that the domestic value added equals at least 20 percent of the ex-factory bid price of such goods; and civil works to be carried out by eligible contractors, as defined by ADB.

2. National Competitive Bidding

14. The procedures to be followed for national competitive bidding shall be those set forth in the applicable resolutions of the Cabinet of Ministers (COM) of Republic of Uzbekistan with the clarifications and modifications described in the following paragraphs required for compliance with the provisions of the ADB Procurement.

a. Direct Purchase

15. Small-scale supply contracts estimated to cost less than the equivalent of $100,000 may be procured through direct purchase in accordance with procedures acceptable to ADB. After award, three copies of each contract for such items shall be furnished to ADB.

b. Force Account

16. Civil works contracts for border-post infrastructure development estimated to cost the equivalent of $50,000 or less may be carried out by the Borrower on a force account basis, provided that the Borrower has the facilities and capacity to implement such works expeditiously and at a reasonable cost.

3. Eligibility

17. The eligibility of bidders shall be as defined under section I of the Procurement Guidelines; accordingly, no bidder or potential bidder should be declared ineligible for reasons other than those stated in section I of the Procurement Guidelines. Bidders must be nationals of member countries of ADB, and offered goods, services, and works must be produced in and supplied from member countries of ADB.

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

4. Prequalification

18. Normally, post-qualification shall be used unless explicitly provided for in the loan agreement/procurement plan. Irrespective of whether post qualification or prequalification is used, eligible bidders (both national and foreign) shall be allowed to participate.

5. Registration and Licensing

19. Bidding shall not be restricted to pre-registered/licensed firms.

20. Where registration or licensing is required, bidders (i) shall be allowed a reasonable time to complete the registration or licensing process; and (ii) shall not be denied registration/licensing for reasons unrelated to their capability and resources to successfully perform the contract, which shall be verified through post-qualification.

21. Foreign bidders shall not be precluded from bidding. If a registration or licensing process is required, a foreign bidder declared the lowest evaluated bidder shall be given a reasonable opportunity to register or to obtain a license.

6. Bidding Period

22. The minimum bidding period is 28 days prior to the deadline for the submission of bids.

7. Bidding Documents

23. Procuring entities should use standard bidding documents for the procurement of goods, works and services acceptable to ADB.

8. Preferences

24. No domestic preference shall be given for domestic bidders and for domestically manufactured goods.

9. Advertising

25. Invitations to bid shall be advertised in at least one widely circulated national daily newspaper or freely accessible, nationally known website allowing a minimum of 28 days for the preparation and submission of bids.

26. Bidding of NCB contracts estimated at $500,000 equivalent or more for goods and related services of $1,000,000 equivalent or more for civil works shall be advertised on ADB’s website via the posting of the procurement plan.

10. Bid Security

27. Where required, bid security shall be in the form of a bank guarantee from a reputable bank.

11. Bid Opening and Bid Evaluation

28. Immediately after the date and time set for the deadline for bid submission, bids shall be opened in public. A record of bid opening shall be prepared by the executing

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report agency, or implementing agency, or the contracting authority, and such record shall be promptly distributed to all bidders and ADB.

29. Evaluation of bids shall be made in strict adherence to the criteria declared in the bidding documents and contracts shall be awarded to the lowest evaluated bidder.

30. Bidders shall not be eliminated from detailed evaluation on the basis of minor, non-substantial deviations.

31. No bidder shall be rejected on the basis of a comparison with the contract cost estimate(s) and budget ceiling(s) set by the borrower/executing agency without ADB’s prior concurrence.

32. A contract shall be awarded to the technically responsive bidder that offers the lowest evaluated price, and meets the qualifying requirements. Negotiations shall not be permitted.

33. Price verification shall not be applied.

12. Rejection of All Bids and Rebidding

34. Bids shall not be rejected and new bids solicited without ADB’s prior concurrence.

13. Participation by Government-Owned Enterprises

35. Government-owned enterprises in Uzbekistan shall be eligible to participate as bidders only if they can establish that they are legally and financially autonomous, operate under commercial law and are not a dependent agency of the contracting authority/executing agency/implementing agency. Furthermore, they will be subject to the same bid and performance security requirements as other bidders.

14. Right to Inspect/Audit

36. A provision shall be included in all NCB works and goods contracts financed by ADB requiring suppliers and contractors to permit ADB to inspect their accounts and records and other documents relating to the bid submission and the performance of the contract, and to have them audited by auditors appointed by ADB.

15. Fraud and Corruption

37. The Borrower shall reject a proposal for award if it determines that the bidder recommended for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for the contract in question.

38. The Asian Development Bank (ADB) will declare a firm or individual ineligible, either indefinitely or for a stated period, to be awarded a contract financed by ADB, if it at any time determines that the firm or individual has, directly or through an agent, engaged in corrupt, fraudulent, collusive, or coercive practices in competing for, or in executing, ADB-financed contract.

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

16. Pre-Shipment Inspections

39. Pre-shipment inspections, if necessary, shall be carried out by an independent reputable testing authority/surveyor in the supplier’s country for reasons of sound engineering practice and economy and efficiency in project implementation.

17. Disclosure of Decision on Contract Awards

40. At the same time that notification on award of contract is given to the successful bidder, the results of bid evaluation shall be published in a local newspaper or a well- known freely accessible website identifying the bid and lot numbers and providing information on (i) name of each bidder who submitted a bid, (ii) bid prices as read out at bid opening; (iii) name of bidders whose bids were rejected and the reasons for their rejection, and (iv) name of the winning bidder, and the price it offered, as well as duration and summary scope of the contract awarded. The executing agency/implementing agency/contracting authority shall respond in writing to unsuccessful bidders who seek explanations on the grounds on which their bids are not selected.

Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

VIII. FINANCIAL AND ECONOMIC ANALYSIS

A. Development Options

137. At the Inception Stage a total development package with an estimated cost of US$517 M was presented, with US$400 M or 77% of the total budget to be invested in replacing or rehabilitating six pump stations, namely Khamza 1, Khamza 1 Auxiliary, Khamza 2, Kuyu Mazar, Kizil Tepa and Kizil Tepa Auxiliary. The remaining 23% was to be spent on four supporting sub-projects, as follows : (i) ABIS Management Modernisation – US$10 m (ii) Amu Darya River Training and Intake Desilting Basin – US$30 m (iii) ABMK Infrastructure Modernisation – US$50 m (iv) Structural Drainage Improvements – US$27 m

138. During the PPTA period there was uncertainty regarding the likely availability of loan funds; that situation still remains at the time of writing. Considerable consideration was given to the identification of a range of Project Options, to match the various estimates of the possible loan value combinations of ADB and other potential cofinancier’s contributions. No clarity ensued and it was finally decided to prepare the Feasibility Study where the full cost of replacing/rehabilitating all six pump stations would be included.

139. Khamza New. This station was constructed in 1963/65 and according to a recent seismic survey is in poor structural condition. In 2011 the average total hours worked per pump in the main station were 201,000. The proposed intervention comprises the construction of a new pump station with the combined capacity of the existing Khamza 1 and Khamza 1 Auxiliary pump stations of 105 m3/s. The capital costs for the civil works were prepared with assistance from Uzsuvloyiha (Design Institute). The specifications and costs for mechanical and electrical components were prepared by the PPTA Consultant. Completely new discharge pipes and intake channel would be required. The overall costs are marginally higher than a previous estimate prepared by the Design Institute in 2008, having allowed for price escalation during the intervening period. The costs, and capacity, used in this report are not those presented in the ADB MOU of March 2013 where a smaller unit, with substantially lower estimated cost prepared by MAWR, was included.

140. Kuyu Mazar. The pump station was constructed in 1965 and its structure received a similar poor assessment as Khamza 1 when a seismic survey was undertaken. Because it would be difficult/expensive to find a suitable alternative site for a new building it was, however, decided not to replace the existing pump station. In 2011 one set of pumps had worked an average of 211,000 hrs in total and the other set had worked 294,000 hrs. The proposed intervention involves the substantial rehabilitation of the existing pump station building and the complete replacement of the mechanical and electrical components. The discharge pipes have recently been replaced and new ones are thus unnecessary. Nearby a new pump station, (which will replace two floating pump stations and have been working as auxiliaries to the main station), is being constructed. It is thus too late to consider combining the two stations into one unit, as is the case in Khamza 1.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

141. Khamza 2. This station, the largest of the six priority stations, which was built in 1975, and whose pumps averaged 176,000 hrs worked by 2011, is in reasonably good structural condition and the recommended approach is to replace the existing mechanical and electrical components and make minor improvements to the building. The discharge pipes will also require complete replacement. Although this station is ten years younger than Khamza 1, the pumps have recently been worked much harder than in Khamza 1 and their total working hours are fast catching up with those in Khamza 1.

142. Kizil Tepa. This station was also built in 1975 and the buildings are in reasonable, repairable condition. There are two sets of pumps, comprising ten in total. In 2011 one set had worked an average of 77,000 hrs in total, whilst the other set had worked an average of 120,000 hrs. Despite being considerably less used than those in the previously discussed stations, some pumps are reported as being worn. The proposal is to completely replace the existing mechanical and electrical components. The main costs of replacing the very expensive discharge pipes will be undertaken by the government, as confirmed officially, and are thus not included in the estimated total cost.

143. Kizil Tepa Auxiliary. This station was constructed in 1982 and is located some distance from the main station on a separate canal system, with some connectivity to the canal network served by the main Kizil Tepa Station. It comprises 26 small pumps, which were locally manufactured, and are reported to be less reliable than the larger Soviet pumps installed in most of the other stations. They pump throughout the year. Whilst the general view is that there is no practical way to combine the two Kizil Tepa stations into one larger single unit, as with Khamza 1 New, there are, nevertheless, opinions to the contrary. If the replacement of the discharge pipes from the main station goes ahead in the near future, this would likely thwart any realistic possibility of redesigning the overall system, if such an approach where considered a possibility. The current proposal is to make minor repairs to the building, to replace all mechanical and electrical components and to replace the existing single discharge pipe with two new ones. A mid-March 2013 government statements indicating that the cost of replacing the discharge pipes would be funded from other sources has not been taken into account, pending official confirmation.

144. In addition to the main pump stations a number of other subprojects were considered. Referring back to the above-mentioned Inception Workshop options, and specifically to (i) Management Modernisation, it was finally decided to include a DSS and SCADA sub-project, with a total cost of around $1.74 M and a Water Saving Demonstration Initiative sub-project with a total cost of $1.93 M. The (ii) Amu Darya River Training proposed investment was dropped. Consideration was given to the possibility of replacing some or all of the 25 dredgers working at the intake of the ABMK but, again, this proposal was dropped. Regarding (iii) ABMK Infrastructure Rehabilitation, the original $50 M proposal was cut back and a relatively modest proposal to rehabilitate ten key control structures, at a total cost of $8.5 M has been included. The (iv) Structural Drainage Improvements sub-project has been dropped as on-going drainage works are being undertaken through the ADB’s Land Improvement Project and the Government’s Amelioration Programme. A provision of around $9 M to cover overall project management through a Tashkent based PMO and a Bukhara based PIU, supported by a consultant team has also been included.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

B. Development Costs

145. Table 1 summarises the total estimated capital expenditure for each option and for each sub-project, in financial prices, and indicates the anticipated phasing over the development period. Supporting tables, providing further cost breakdowns, in financial and economic prices, are given in Annex 5 (refer to Appendix Tables A.7 to A.17)

146. These costs were based on 2012 prices, and wherever possible, taxes and physical contingencies have been separately identified. Most components related to civil works construction are of local origin, and costing was based on late 2012 schedules of unit costs

147. All investments and benefits have been valued at late 2012 prices. The analysis has to recognise that there are two distinct and significantly differing values for foreign exchange. In late 2012 the official exchange rate for 1 US$ was virtually UZS 2,000 whilst the unofficial rate was around UZS 2,650. The official rate is thus around 75% of the unofficial rate. As per local instructions, for financial cost estimation the official rate has been used – at UZS 2,000 per 1 US$.

148. The nominal inclusion of taxes and duties costs, have been calculated elsewhere but are not included in the total presented in Table 1. It is understood that there is a real cost applied to items imported for use on government projects, where a charge of 0.2% of the imported value has to be paid by the implementation contractor as a Custom Registration fee.

149. No allowance has been made for inflation, or financing charges, over the potential Loan period in preparing the Table 1 estimates. They have been calculated elsewhere.

150. Physical contingencies have been included, and have been set at levels which are considered realistic in the circumstances. Regarding the main investment in pumping stations, advice from those who have had experience in replacing pumps within an operating station, is that the chances of being faced with unforeseen and potentially costly situations, are high.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Table 1: Total Costs Summary at Constant 2012 Financial Prices in US$ Million

Component Pump Stations Management

mza2

Khamza1 Kuyu Mazar Kha Kizil Tepa Kizil Tepa Aux

Option1

new rehab rehab rehab rehab

PMO & PIU & PMO Consultancy DSSSCADA & PilotFarms rehabilitation ABMK Total Civil Works - earth works 22.51 0.34 0.05 0.03 0.37 0.00 0.00 0.00 0.13 3.30 26.72 - construction 25.29 2.32 1.30 2.53 1.70 0.00 0.00 0.00 0.20 1.74 35.07 Sub-total civil 47.80 2.66 1.34 2.55 2.07 0.00 0.00 0.00 0.32 5.04 61.80 Equipment

- Mechanical 34.04 13.38 42.24 36.01 9.49 0.00 0.00 0.00 0.00 0.00 135.16 - Ancillary systems 1.05 0.36 0.52 0.49 0.34 0.00 0.00 0.00 0.00 0.00 2.75 - Hydraulic steel structures 24.06 1.28 21.90 4.85 53.80 0.00 0.00 0.00 0.00 2.24 108.12 - Electrical equipment 13.80 8.12 18.58 16.95 10.99 0.00 0.00 0.00 0.00 0.38 68.82 - Instrumentation 0.45 0.41 0.48 0.48 0.53 0.00 0.00 0.00 0.00 0.02 2.36 - Other equipment 0.00 0.00 0.00 0.00 0.00 0.02 0.04 0.83 0.33 0.00 1.22 - Vehicles 0.00 0.00 0.00 0.00 0.00 0.04 0.22 0.00 0.00 0.00 0.26 Sub-total equipment 73.40 23.54 83.72 58.77 75.15 0.06 0.25 0.83 0.33 2.64 318.69 Training, Capacity Building & Studies

Workshops etc. 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.06 0.905 0.00 1.47 Demonstration farming operations 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.193 0.00 0.19 Sub-total training etc. 0.00 0.00 0.00 0.00 0.00 0.00 0.50 0.06 1.10 0.00 1.66 Consulting Services

- international 0.00 0.00 0.00 0.00 0.00 0.00 4.28 0.36 0.00 0.00 4.64 - local 0.00 0.00 0.00 0.00 0.00 0.00 2.04 0.08 0.00 0.00 2.12 - other 0.00 0.00 0.00 0.00 0.00 0.00 1.35 0.01 0.00 0.00 1.36 Sub-total consultancy 0.00 0.00 0.00 0.00 0.00 0.00 7.68 0.45 0.00 0.00 8.12 Project Management and Monitoring 0.00 0.00 0.00 0.00 0.00 1.14 0.47 0.11 0.00 0.00 1.72

Subtotal management 0.00 0.00 0.00 0.00 0.00 1.14 0.47 0.11 0.00 0.00 1.72

Total Capital Costs 121.20 26.20 85.06 61.33 77.22 1.19 8.90 1.45 1.75 7.68 391.99 Physical contingencies civil - rate 7% 7% 7% 7% 7% 0% 0% 0% 10% 10%

Physical contingencies - value 3.35 0.19 0.09 0.18 0.14 0.00 0.00 0.00 0.03 0.50 4.49 Physical contingencies non civil - rate 20% 20% 20% 20% 20% 20% 20% 20% 10% 10%

Physicals contingencies - value 14.68 4.71 16.74 11.75 15.03 0.24 1.78 0.29 0.14 0.26 65.63 Total Base cost incl. physical 139.22 31.10 101.90 73.26 92.39 1.43 10.68 1.74 1.93 8.45 462.11 contingencies

Source : PPTA Consultant Estimates

C. EIRR

151. The crucial assumption upon which the economic viability of the proposed investment depends is what will happen over time to the pumps, and hence to the irrigated areas, if nothing were to be done. In an attempt to cover the range of possibilities two decline scenarios were devised. The gradual decline scenario takes a relatively conservative view, bearing in mind that by the time any new pumps could become operational, if indeed the Project proceeds, the existing Khamza 1 pumps will be over 55 years old and the Khamza 2 pumps around 45 years old. Furthermore, these

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report pumps have been working hard throughout their lives. Whatever happens with the Stage 2 pumps (Kuyu Mazar and Kizil Tepa), if the Khamza pumps fail, the whole system fails.

152. Results from the assessment of economic viability indicate that for the Full Cost Option, and assuming a gradual pump decline, with a current capital financial cost estimate of $462 million, a Base Case EIRR of around 13% would result. With the somewhat conservative assumptions made, the result is marginally acceptable. With the total failure scenario, the result is, predictably, a little higher at 16%. For this possibly over-pessimistic scenario the result is reasonably attractive.

153. Whilst it would be possible to increase or decrease these results by modifying some of the key variables, it should be borne in mind that no benefit has been attributed to the protection of current DMI water availability. If these were to be included, it is very likely that the overall EIRR would be substantially higher.

154. The capital costs can be considered as realistic; in the most part they have been based on information provided by suppliers and have taken advantage of having access to a company data base built up over many years. Considerable confidence can also be placed on the estimated future estimates of maintenance costs and power consumption.

D. Financial Management

155. The purpose of the Financial Management Assessment (FMA) is to assess the financial management capacity of the Ministry of Agriculture and Water Resources (MAWR), the Executing Agency (EA) for the upcoming ADB-financed Project Amu Bukhara Irrigation System Rehabilitation. The Project with a cost of $400 million will be implemented over 6 years, starting mid-2013. The estimated project completion date is 30 June 2019 and the loan closing date is 31 December 2019.

156. The FMA is based on ADB’s Guidelines for the Financial Governance and Management of Projects Financed by the Bank (2002). The instrument used for assessment was ADB’s standard financial management assessment questionnaire (FMAQ). The FMA is presented in detail in Annex 5.

157. The FMA concluded that MAWR meets ADB’s minimum financial management requirements for EAs. The MAWR has a satisfactory financial management capability to: (i) record required financial transactions and balances; (ii) provide regular and reliable financial statements and monitoring reports; (iii) safeguard financial assets; and (iv) submit the required financial documents to auditors with arrangements acceptable to ADB.

158. However, MAWR should ensure that the PMO and a possible PIU are adequately staffed with efficient and experienced personnel, and that MAWR pays special attention to train project staff in procedural and reporting requirements of ADB as a means to enhance staff professional capacity.

159. The proceeds of the ADB loan will be disbursed according to ADB’s Loan Disbursement Handbook (2012, as amended from time to time). For large scale contracts for consulting services and equipment following ICB procedures, loan funds will be disbursed through direct payment. For civil works following NCB procedures and

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report small expenditures related to the PMO, reimbursement and imprest fund procedures will be applied. For minor goods or services procured at provincial levels payments to suppliers can be done through corresponding PIU.

IX. ENVIRONMENTAL ASSESSMENT

160. The Project falls into Category B of the Asian Development Bank’s (ADB) environmental classification, i.e. the Project is judged to have limited potential environmental impacts. This Initial Environmental Examination (IEE) is prepared as part of the Project Preparation Technical Assistance (PPTA) for the Amu Bukhara Irrigation System Rehabilitation (refer to Annex 7). This IEE is based on a review of available reports, the analysis of existing data, discussions with stakeholders and various experts, and field visits. The findings of the study have been discussed with, and supported by representatives of the State Nature Protection Committee, Goskompriroda, and prospective beneficiaries in the workshop held on 23 November 2012 and stakeholder consultations held throughout the Project area. This IEE presents an analysis of the potential environmental impacts, both positive and negative, together with an Environmental Management and Monitoring Plan (EMMP) for all components.

161. The findings and assessment of the project area illustrate that there will be no significant adverse environmental impacts on the project affected area. Mitigation measures are deemed sufficient for the small impacts identified. There is no need to carry out a full scale EIA.

162. The environmental monitoring program will be part of an integrated Project monitoring program to be set up by the Project Management Office (PMO). The PMO will be responsible for implementing all environmental mitigation measures. The PMO will establish a Monitoring and Evaluation Unit (MEU), which will develop a procedure and system to monitor both progress and effects. The PMO, supported by consultants in the Environmental Management Unit (EMU), will undertake formulation of a detailed monitoring system and will select monitoring indicators and frequency of measurement. The main tasks of the environmental specialists will be to assist in the setting up of a monitoring system, draw up clauses to be included in the civil works contracts, assist with environmental enhancement measures, provide training for environmental management, and assist with preparation of terms of reference for environmental studies and work.

163. Contracts with sub-contractors for civil works will include clauses to ensure minimum environmental impacts. The staff of PMO will prepare the contract documents and supervise the activities. The Provincial Committee on Nature Protection would be responsible for environmental clearance. Procedures will have to be followed as established in the national regulations (i.e. the “National Guidelines on Conducting Environmental Studies”, 1993).

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

X. RESETTLEMENT

164. ABIS, which supplies water to more than 315,000 ha of irrigated lands, cities, populated areas as well as enterprises in the Bukhara region, needs significant modernization as it is approaching the end of its effective operational period.

165. The ABIS Rehabilitation Project will involve rehabilitation and renovation of priority components of the main irrigation system: large pumping stations, main water supply canals and hydraulic structures with the objective to increase incomes and well- being of people in the rural area, who depend on water supply from ABMK Canal.

166. The Project considers all possibilities to minimize land acquisition and to avoid physical displacement. The methods for the minimization of land acquisition for the Project activities described below are (i) new structures are entirely located within the fenced area owned by ABMK and (ii) new structures are entirely located within the ROW of canals, and (iii) civil works for rehabilitation of canals are entirely executed within the ROW of the canals.

167. Within the project’s framework a new pump station “Khamza New” (replacing the existing pump station and including the discharge capacity for Khamza Auxiliary) will require land acquisition for new construction. In the neighbourhood of the existing pumping station Khamza 1 at a distance of 300 m there is a village with 14 households / 8 families (5-6 family members). Houses are the property of ABMK, the pumping station`s operational staff and their family members live in village. The construction of new structures will not affect residential or agricultural areas; hence, there will be no physical displacement of population. The land required for the construction of the pump station is entirely located within the fenced area under the ownership of ABMK, no land outside the fence will be affected. Annex 6 presents the resettlement issues in detail.

168. Another four pump stations will be modernized. The project will not cause land acquisition in any significant amounts, since it is limited to the rehabilitation and renovation of existing facilities.

169. ADB Board of Directors approved the Regulations on the Policy on Protective Measures (RPPM) governing the environmental and social safeguards of ADB operations. RPPM tasks consist of measures to avoid or, where possible, to minimize and mitigate the adverse effects of a given project on the affected environment and people and help borrowers to strengthen their protective measures and build the management capacity for addressing environmental and social risks.

170. Hence, while no displacement or relocation of affected persons is anticipated, if such situations arise a Land Acquisition and Resettlement Framework has been prepared for the Project. The essential requirement is borrower / client shall perform the resettlement process and provide for replacement of land, buildings and structures at least equivalent to those lost or compensate cost of their partial or full loss at full replacement costs.

171. In addition, RPPM requires improving living standards, especially for the poor and vulnerable part of the affected population. RPPM also requires meaningful consultation

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report with affected people; a robust grievance mechanism, targeted measures for the poor and vulnerable groups, as well as an implementation plan with clear timelines, the establishment and implementation of a sound monitoring process and a robust budget.

172. In the land acquisition-and resettlement context, the following laws and regulations are of relevance:

i. The Land Code; approved by the Republic of Uzbekistan on 30 April1998, and amended from 2003-2004; ii. The Civil Code of Republic of Uzbekistan from 1996, and amended from 2004-2008; iii. The Housing Code , approved by the Republic of Uzbekistan on 24 December 1998; iv. Law of the Republic of Uzbekistan on “State Cadastre” N171-II from 15.12.2000; v. Law of the Republic of Uzbekistan on “State land cadastre” N666-I from 28.08.1998, as amended between 2002-2004; vi. Cabinet of Ministers (CoM) resolution on “measures on improving order of providing lands for urban construction and other non-agricultural needs” № 146 of 25.05.2011; vii. CoM resolution on "Approving the Provisions for compensating losses to citizens and legal persons due to land acquisition for State and public needs" No 97, 29 May 2006; viii. CoM resolution on “legalization of seizure and allocation of land plots for non-agricultural needs in the Republic of Uzbekistan” No. 248, 27 May 1992; ix. CoM resolution on “adjudication of land disputes in the Republic of Uzbekistan” x. №246 dated 25.05.1992; and xi. CoM resolution on “compensation for agricultural production losses related to land acquisition, for needs not connected with farming or forestry management” № 223 dated 16.06.1995 and No. 282 dated 15.06.1992.

173. The provisions of these laws are not fully in line with the requirements of ADB's Safeguard Guidelines. In addition, a lack of clear instructions and procedures, could affect their implementation in practice. For example, the Land Code of the Republic of Uzbekistan (Article 86) proclaims that "the damage caused to land of landowners, shall be totally reimbursed (including lost profits)" but the period of reimbursement is not specified. The requirement of ADB on protective measures is the obligatory compensation for displacement before the proposed relocation of affected persons (D 1, 8).

174. The following mechanism is proposed to achieve compliance of national legal framework with ADB requirements, including multilateral official consultations with

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report participation of ADB representatives, GRP, regional Khokimiats, and districts of project zone, as well as other project stakeholders.

175. The design and implementation of a robust and accessible grievance mechanism to be provided to the affected population is a key ADB requirement. Proposed procedure of considering and settlement of claims shall be made with a help of official agencies, with the purpose of making process of claims and grievances more accessible and easy for APs.

176. According to the ADB procedure, in the framework of the Project Public Consultations (PC) were conducted for local communities, representatives of governmental and non-governmental organizations and other interested people. Consultation materials developed with a purpose to inform all parties about the project, to give them an opportunity to make comments, make modifications and suggestions to improve Project activities. Consultations also were conducted as an approach to obtain social- economic information and study public opinion on proposed project.

177. Public Consultations were conducted twice. The first, consultations (PC 1) were held on 24-29 September 2012 in Kizil Tepa District of the Navoi Province, and in districts of Alat, Bukhara, and Jondor of the Bukhara Province. Total number of participants were 148 people for the four districts. The second Public Consultations (PC 2) were held on 23 November 2012. In Romitan District Khokimiyat, more than 60 stakeholders from 2 districts of Bukhara Province: Romitan and Bukhara districts participated in PC 2.

178. An analysis / comparison ADB Resettlement Safeguards with Republic of Uzbekistan Law and Regulations on and Acquisition and Resettlement was undertaken. Provisions to bridge the gap between ADB requirements and national legislation was proposed for discussion agreement between the ADB and Government.

179. Furthermore, based on the review of government policy on land acquisition and resettlement as well as requirements of ADB Safeguard Policy related to involuntary resettlement entitlements to compensation were determined. The construction of a new pumping station, the modernization of the existing stations, and other irrigation infrastructure improvement probably will not require land acquisition in significant amounts. Nevertheless it is advisable to consider all options for possible losses, since compliance with engineering standards may require additional land alienation. Hence an entitlement matrix was developed for the Project, this is presented in Annex 6.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

XI. SOCIAL AND POVERTY REDUCTION SAFEGUARDS

Country/Project Title: UZBEKISTAN Amu Bukhara Irrigation System Rehabilitation Project

Central and West Asia Lending/ Department/ Department/ Agriculture, Financing Sector Loan Environmental and Modality: Division: Natural Resources Division I. POVERTY ANALYSIS AND STRATEGY A. Linkages to the National Poverty Reduction Strategy and Country Partnership Strategy 1. The Welfare Improvement Strategy/Poverty Reduction Strategy Paper (WIS/PRSP 2008 - 2010) sets out a strategy to improve living standards, especially for low-income and socially isolated groups, with medium-and long-term priorities for the period up to 2015. A key strategic priority is to maintain robust economic growth at 7-8% /year and hereby to increase public welfare spending. 2. In social policies, special attention will be paid to targeted use of welfare funds. In the context of overall improved livelihoods and higher living standards, welfare will develop a focus on children and vulnerable groups including the elderly and disabled people. 3. Poverty reduction and improved public health are entirely linked to access to safe water and sanitation, constituting a main development objective, especially for rural areas and small towns. 4. The strategy emphasizes on the development of the agricultural sector as the main source of livelihood for a significant part of the population in rural areas. 5. The following tools will support the implementation of agricultural water management policy on the long term: (i) Development and implementation of the national program irrigation water metering system (ii) Staged introduction of water fees to facilitate sustainable management of o irrigation schemes (iii) Program for reliable supply of irrigation water, including investment projects (iv) Capacity building for WCA as basic level (local level, grass root level) for sustainable water management (v) Overall improvement/restoration of irrigated areas

1. Proposed Project 6. Amu-Bukhara Irrigation System Rehabilitation (ABIS) Project will rehabilitate and upgrade prioritized components of the main irrigation system, provide modern technologies and equipment to ensure efficient water management and introduce effective project and irrigation system management and monitoring systems. The Project will comprise (i) ABIS Management Modernization including Tudakul and Kuyu Mazar reservoirs and pilot on-farm infrastructure and management improvement, (ii) Replacement/Rehabilitation/Upgrade of 4 prioritized Pump Stations (Khamza-1 and its Auxiliary, Khamza-2, Kuyu Mazar, and Kiziltepa and its Auxiliary); and (iii) ABIS Main Infrastructure Modernization to reduce conveyance and management water losses, and provide improved water delivery service. The primary aim is sustained and increased agricultural water productivity. A feasibility level design has been completed. Estimated project implementation period is 7 years. MAWR is proposed to be an executing agency.

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B. Poverty Analysis Targeting Classification: Geographic

1. Key Issues 7. According to results of a national household budge survey (2005) results the poverty rate in Uzbekistan (as per World Bank definition) is estimated to be at 25.8%47. WIS document defines the national poverty line at 2.15 USD per capita per day (or 4407,5 UZS equivalent as for February 2013). 8. The following paragraphs present results of the PPTA Socioeconomic Survey, (November 2012 in Bukhara and Romitan districts). Average total monthly income of surveyed households was 1,897,800 UZS (358,075 UZS per HH), with significant seasonal fluctuations; typically, 84.5% of HH income is higher in summer, due to market sale of agricultural products (constituting the main source of revenue for the surveyed HH). Average monthly income of non-poor households exceeds income of poor households by 3.4 times. In last three years, a trend towards overall improvement of living conditions has been observed, confirmed by self-assessment of 79.7% of the respondents. 9. Hired employment in the non-agricultural sector (including entrepreneurial activities and labour migration) is the most significant income source, providing about 21% of households’ income in Bukhara district and about 17% in Romitan district. The second important income source is an agricultural activity which provides more income for people in Romitan district than Bukhara. Poor families receive almost 4 times less income from non-agricultural entrepreneurial activities compared to non-poor families in Bukhara district. 10. Social payments (pensions, low–income family allowances, unemployment allowances, single- family allowances, disabled-person allowances, and other benefits from the Government) are an additional source of income for the families in the subproject area. However, due to small amounts, these allowances do not play any significant role in improvement of the living standards. 11. Average monthly expenditures exceed monthly income by 1.7 times, reaching 3,252,900 UZS (or 613,754 UZS per capita). Discrepancies between income and expenditures are due to families' self-consuming and selling production from dekhan plots, is not considered as income. Food is the most significant expenditure item. Low income households lack financial resources to allocate to health and education as incomes are spent to cover basic needs. Households follow various strategies to cope with emergency needs. Less than half of the surveyed households sell their own property and assets, with a higher share of the poor population. However, most of respondents in Bukhara district rely on relatives and friends for coping with emergency needs. 12. The general educational level of the population is relatively high, corresponding to the high overall national levels. Official statistics indicate a trend towards increasing numbers of graduates from vocational institutions in Bukhara province (2005 – 2011). 20 % of graduates of vocational schools are part of the agricultural sector. 6.9% of the population in Bukhara district and 5.7% in Romitan district are unemployed. From the employed population, hired workers make up 15.8%, Entrepreneurs and self-employed individuals in all sectors make up the second largest group. 13. According to respondents, poor land quality is one of the main reasons restricting agricultural production. (soil salinity, shallow water tables, water with high mineralization content). However, the core reason impeding domestic agricultural production is related to limited access to irrigation water. Practically, all dekhan plots in the subproject area depend on irrigation. Majority (92.8%) of respondents in survey area use water from rivers, canals and ditches to irrigate their land plots, in average 68.7% of the land in subproject area is irrigated (Romitan district: 70.9%, Bukhara district: 66.6%. 14. Lack of irrigation water dramatically affects crop production as indicated by 86.6% of respondents. Reduction of the crop production is more severe in Romitan district than in Bukhara district. 15. Many 89.6% of the surveyed households keep livestock and poultry as a typical form of safety net in rural areas.

47 Welfare Improving Strategy of Uzbekistan: Full PRSP document for 2008-2010

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

II. SOCIAL ANALYSIS AND STRATEGY A. Findings of Social Analysis 1. Key Issues 16. 51.6% survey respondents are male and 48.4% are female. 17. Household characteristics of surveyed households correspond with those of typical rural households in Uzbekistan. Average HH size is 5.3 persons (5.4 in Bukhara and 5.2 in Romitan districts). Poor and non-poor households differ in size and composition. Poor families are larger and have more children under 7 years old. These settings correspond to official statistics. 18. There are more infirm adult HH members (people in pension age, old-age and disability pensioners) in poor families (58.2%) than in non-poor families (42.7%) which indicate on vulnerability of the former group. The share of the population in economically active age is 85.1% in Bukhara district and 61.5% in Romitan district. The survey findings are close to official statistics. Among the economically inactive population at the able-bodied age, the prevailing group is students, including students from poor families. 19. A majority of surveyed households have own small-size land plots. In terms of land use, garden plots (tomorka) are most represented (98.2%). Other forms of land use such as dekhan farms allocated specifically for agricultural activity or for construction, are not widespread. 17.9% of respondents have a second plot mainly dekhan plot, used for agricultural crop production. 20. Surveyed households use more than a half of their garden plots for crops, the rest of the land is used for housing and other structures. Every fourth household in the sample size does not use its land plot for crop production due to lack of irrigation water. The main reason for lack of irrigation water is due to insufficient amounts of water in river and canals. A second reason is significant loss of water in canals and ditches as indicated by 14.5% respondents. Lack of water is more severe in poor families than in non-poor ones. According to survey respondents the crop productivity could be increased on average by 19% with sufficient irrigated water. Productivity could be potentially increased up to 25% as indicated by 45.5% respondents in Bukhara district and 27.6% in Romitan district. B. Consultation and Participation 1. Description 21. PPTA Consultants conducted Public Consultations in Kyzyltepa district (Navoi province), Alat, Jandor, Bukhara and Kagan districts (Bukhara province) in September 2012, focusing on information about the Project, potential environmental and social impacts and on survey activities. 22. The next set of Public Consultations was conducted in November 23, 2012 at Romitan district Kholimiyat with participants from two core rayons– Romitan and Bukhara of Bukhara Province. Various community groups were informed about Public Consultations through Hokimiyats. 52 participants attended at the Public Consultations, amongst them representatives of Makhalla (Village) Committees of Romitan and Bukhara Districts, as well as representatives of District Hokimiyats, Representatives of Natural Protection Committee, Pump Station Management, chiefs of WCA and Farmers of districts. Forty women also attended, who represented the rayons. During the meeting, the participants were introduced to the Project objectives, goals, and proposed activities. The participants were given Project Information Booklet Participants stated their appreciation of the information and opportunity to participate. The joint disclosure and public consultations were carried out by the PPTA Consultants. Participants were invited to provide comments and questions which were answered and clarified by the local authorities and PPTA Consultants. There was no indication of any objections or worries about the project. 2. What level of consultation and participation (C&P) is envisaged during the project implementation and monitoring? Information sharing Consultation Collaborative decision making Empowerment 3. Was a C&P plan prepared? Yes No The process and preparation of the WRMP is anchored on consultative and participatory process. The C&P framework was established in the Project Safeguards, i.e. environment, social development, and resettlement.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

C. Gender and Development 1. Key Issues 23. More than 29 million people live in Uzbekistan, 50% of which are women, and 48% of population lives in rural areas. Women’s share in economically active population is 40%. Economic development of the country is exceptional for the last five years, since the growth of GDP by 3.7 times in 201148. 24. Gender composition of the population corresponds to the national setting. With regard to gender disparities, low levels of female employment and economic activity are due to a lack of professional education. For example, the share of female students in the water related sector is only 15.7%. Accordingly, women are not represented in management positions. Corresponding gender disparities are also observed in participation in trainings and upgrade qualifications. 25. The role of women in household economy is not significant. Women contribute 2.1 times less than men to the HH economy in Bukhara district and 2.3 times less in Romitan district. Women’s incomes are generally lower, in both absolute and relative terms. A striking example is hired employment in the non-agricultural sector where women’s income is on average two times lower than the income of males in comparable positions.

Project’s potential to promote gender equality The project has a potential to enhance private entrepreneurship amongst women, resulting in generation of additional household income. To enhance a positive project impact on women and minimize project-related risks for women and children, the Gender Action Plan was developed within the Social Analysis component. 2. Project’s potential adverse impact on women and gender equality The Project is not expected to have any adverse impact on women and girls and will be gender neutral.

3. Key Actions. Measures included in the design to promote gender equality and women’s empowerment— access to and use of relevant services, resources, assets, or opportunities and participation in decision-making process: Gender plan Other actions/measures No action/measure

To enhance a positive project impact on women and minimize project-related risks for women, the Gender Action Plan was developed within the Social Analysis component. It includes the following key components:  Recruit local Social/Poverty & Gender Specialists in the PMU (UCSA) on permanent basis  Ensure collection of sex-disaggregated baseline information and monitor and evaluate trends. Ensure inclusion of GAD issues in the social profile at implementation and completion phases  Develop a mechanism of effective cooperation with the Women’s Committee at all levels in project area  Identify Gender focal points for adequate implementation, M&E of gender indicators/targets and GAP at PMU levels  Allocate scholarships for female students at secondary professional and higher Institutions  Ensure gender-balanced composition (and equal pay) of the PMU  Capacity development training and consultation with EA, PMU, and PMU on the implementation of the GAP  Ensure that GAP is one of the criterions during Project implementation  Women will be trained on effective water usage and private business operating

48 According to official statistics of the State Statistics Committee

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

III. SOCIAL SAFEGUARD ISSUES AND OTHER SOCIAL RISKS Issue Significant/Limited/ Strategy to Address Plan or Other No Impact Issue Measures Included in Design

Involuntary Not Significant A Project Resettlement Full Resettlement Framework (RF) has Resettlement Plan been prepared in line with ADB social Resettlement safeguard requirements Framework defining (i) land acquisition process; (ii) Short eligibility, compensation Resettlement and entitlements; (iii) Plan gender impacts and mitigating measures; (iv) Due Diligence public participation and Report disclosure; (v) grievance No Action redress mechanism; (vii) institutional arrangements.

Indigenous Peoples No Impact There are no issues on Plan indigenous peoples. Other Action

Indigenous Peoples

Development Framework No Action

Labor Significant The construction of Plan subprojects will create Employment employment Other Action opportunities opportunities in the Labor retrenchment poseloks (villages) of No Action Core labor rayons (towns) It will standards also encourage farmers to engage in micro enterprises that requires additional workers.

Affordability No Impact Action

No Action

Other Risks and/or No Impact Social assessments do Plan Vulnerabilities not indicate any significant risks with Other Action HIV/AIDS regard to child labor, HIV/AIDS and Human No Action Human trafficking Trafficking. However, the EA will ensure that Others(conflict, all civil works will

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

political instability, comply with all etc), please specify applicable labor laws, will not employ children during construction and maintenance activities. The EA will stipulate in the contract for civil works the employment of people in the subproject areas particularly those from the poor households.

IV. MONITORING AND EVALUATION

Are social indicators included in the design and monitoring framework to facilitate monitoring of social development activities and/or social impacts during project implementation? Yes No

XII. GENDER ACTION PLAN

1. The total population of Uzbekistan is more than 29 million, 50% of which are women. Rural residents represent 49% of the total population. According to the official data, one third of women are employed in the agricultural sector. Based on preliminary assessment of the official statistics, resident population of the Bukhara Province as of 1 January 2012 was 1.696 million, showing 1.6% of an average growth rate per year49. According to the official statistics female population outnumbers male population by more than 9,000 individuals. More than half of women are in the economically active age, i.e. from 18 to 35 years old (51.9%)50. According to the Project’s Terms of Reference (ToR), Khamza New Pump Station will be constructed in the Alat District to replace the existing Khamza 1 Pump Station and its Auxiliary Pump Station. The total population of Alat District is 86.6 thousand, of which 43.4 thousand are women. In district management staff women have a share of 15.3%; however, more than half of the farmers are women (56.2%).

2. According to the objectives and tasks of the social assessment, in November 2012 a Socioeconomic and Gender Assessment was conducted in the Project area covering Romitan and Bukhara Districts. In order to evaluate the economic, social and cultural factors which may influence the Project, 335 households were surveyed within 11 Makhalla Assemblies of Citizens or Makhallas (MACs). Gender composition of the surveyed households was 51.6% men and 48.4% women respectively. According to survey results, 83.7% of households are headed by men, and 16.3% by women.

3. In 90% of the female-headed households, women are generally the final decision makers. Women become heads of households out of various reasons, i.e. divorce, death of spouse, migration of the husband, etc. Even in such cases a woman has to accept the

49 Average for 10 years, Source: Statistics Department of Bukhara region 50 Source: Uzbekistan’s Statistical Yearbook, Tashkent, 2012

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report decisions made by male family members (i.e. parents, family in law, children) who participate in the decision making process. Lack of gender awareness due to the relevance of traditional values and roles is the main reason of gender inequality among household members. In 89% of male-headed households, men make the final decision. In the remaining 11% of households other family members are involved in decision making (wife, parents, and children).

4. The survey showed relatively moderate public awareness about the project: 50.7% of respondents did not have any information on the expected Project activities. With regard to most frequent information channels, 51.3% of the respondents obtain information referring to the agricultural and water sector, via mass media and Makhalla authorities. About 20% of the interviewed households receive information from the District Department for Agriculture and Water Resources within the MAWR, and 10.8% from Water Consumer Associations WCAs51. Moreover, the survey results underline the importance of water availability in the region and of rational use of water.

5. In the Project area the role of women in household economy is not significant. Women’s contribution to family’s income mainly consists of income from employment in the non-agricultural sector and of pensions. To a lesser extent women have income from employment in the agricultural sector. On average, women contribute only 19.3% to the total family income in Bukhara District, and 14.1% in Romitan District. It should be noted that there were some constraints with reference to the collection of disaggregated data during the survey: specific statistical information on women is available neither in the regional committee of statistics department nor in the water resources sector. According to the available data for Alat District women are mainly involved in the educational and healthcare sectors (61.5% and 78.7% respectively). To a lesser extent women are employed in industry, transport and communication, construction, as well as in trade and public catering. Interviews show lower women’s contribution to the family income by 2.2 times in average, compared to the share of men. Peculiarities of women’s employment (low employment level, high involvement in housekeeping activities) are mainly related to lack of womens’ professional skills and capacities in entrepreneurship and human resource management, business planning, and other skills related business.

6. A notable gender disparity exists in professional education, with less female graduates from universities specializing in the areas of agriculture and water resources. According to official statistics, in the 2011-2012 academic year women made up only 17.5% of the graduates. As a result, there is a notable disparity in the management of the water resources sector in the Project area.

7. Due to gender disparities in higher and vocational education, a lower female employment rate is observed in the water related sector. In particular, in employment structure of Amu Bukhara Machine Canal (ABMK) women comprise 9.3% only of all

51 On 25th of December 2009 “Water and Water Use” Law was revised based on the “Law of the Republic of Uzbekistan No 240 dated 25.12.2009 according to which “Water Users Associations” (WUA) were renamed into the Water Consumer Associations (WCA). Distinctions between them were clarified as: water users do not affect the actual amount of available water (such as fisheries and hydropower), and water consumers reduce the actual amount of available water (e.g. in irrigation).

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report employees, and 8.7% of the total qualified staff. There is not a single female management staff member due to the lack of respective education levels. Amu Bukhara BISA is characterized by the same situation. Out of 98 employees working in the BISA, only 10% are women. More women are working in Romitan ISA (about 16%). Typical positions occupied by women are e.g. senior accountant, economist, hydraulic engineer, computer operators, office cleaners and gardeners.

8. Participants of Focus Group Discussions (FGD) mentioned numerous conflicts related to water distribution among water users – farmers and households. However, according to participants’ statements, in other districts’ WCAs such conflicts are less frequent. The number of women among mirabs (lead irrigators) is very few; they make up only 3.7% of the total staff. While women are not present in the mirabs in Bukhara and Romitan Districts, in other districts the number of female mirabs is up to four (Vobkent district). Women’s involvement to the WCAs is very limited. In the WCAs interviewed there were no women working in the WCAs. Staff members are entirely male. Common existing positions in the WCAs include chairman, accountant, hydro-technicians and IT specialist. It was noted by the FGD participants that women manage and distribute more efficiently the irrigation water, and they are more rational in issues like planning, consumption and use of water resources. Thus, most of the respondents (74.3%) believe that women in the Project area play an important role in rational use and distribution of water resources.

9. During a conduction of FGD with the representatives of households, participants noted a lack of coordination in management among the main Project stakeholders and beneficiaries (Bukhara Province Khokimiyat and District Khokimiyats, ABMK, BISA, ISA, Women Committee under Khokimiyats, etc). Thus, Women Committees in Bukhara and Romitan Districts do not have sufficient information about key stakeholders activities and how to get involved in the project and in subprojects. There was a concern that in case of involvement of the subcontractor(s) in the construction of the Khamza New Pump Station and the rehabilitation of the Kuyu Mazar Pump Station, the local population will not be made aware on new work places, work progress and any other relevant information. The participants also noted that complaints related to shortage of irrigation water normally have to be addressed to different authorities and to be repeated many times. In the context of farming, the absence of management tools such as schedules and fair water distribution principles lead to regular conflicts and arguments amongst the water users. According to 58.5% of the respondents, WCAs often fail to resolve such conflicts.

10. According to survey results, women are more actively involved in farming than in other economic activities. 68% of the women working in agriculture in Bukhara Province are employed on a full-time basis. In Romitan District the corresponding share is 62%. About 12% of dekhan farms face problems due to high soil salinity, and about 30% of the farms are challenged by shallow ground water tables on their land plots. It was found that the main reasons for these problems are related to the lack of farmers’ knowledge about modern technologies and the lack of equipment for efficient and rational water resources management (automatic water measuring devices, remote management) and of environmentally friendly technology.

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

GENDER ACTION PLAN

Activities Indicators and Targets Responsibility Time/ Year Component 1: ABIS Management Modernization Conduct information campaign 9 local TV programs at the local TV Project Management Unit 1-5 about the project (written (once a year, duration is one (PMU), Project Gender materials, local TV and month) to describe current situation Specialist in association newspapers) among key with regional and district and future activities during Project stakeholders and ensure Khokimiyats, Republican women’s participation in Project implementation. Women’s Committee area districts, use most frequent (RWC), Makhallya information channels to ensure 18 articles (twice a year) at local committees, Mass media full coverage newspaper in beginning and middle (TV), ABMK, BISA of each year to describe current situation and future activities during Project implementation. 300 written materials (leaflets, brochures) about the Project distributed. 10% of women in relevant water agencies (ABMK, BISA, ISA) are familiar with Project (proportional number of Women in organizations). Conduct trainings/seminars on 6 seminars with 30 participants held GAD awareness for key in each district (The optimal number stakeholders and beneficiaries: of training participants should not representatives of ABMK, BISA, exceed 35) MAWR, WCA members, At least 180 written materials regional and district branches, (leaflets, brochures) distributed to HH members training participants. 10% of participants in relevant water agencies (ABMK, BISA, ISA) are Women (proportional number of Women in organizations). Creation of Information Center Regularly inform and coordinate all Project Implementation 1-5 in project area under the stakeholders and international Unit (PIU), Project Gender Khokimiyat of Romitan District partners about the construction Specialist in association works (annual meeting with with key stakeholders, representatives of stakeholders) including Bukhara Province Khokimiyat and District Khokimiyats, Basin Irrigation System Authority (BISA), Amu Bukhara Machine Canal (ABMK), Pump station authority, Water Consumers Associations (WCA) and Makhalla Committees Gathering and analysis of Monitoring of disaggregated data on Project Gender Specialist complaints from the population complaints; Number of complaints of Project area through the resolved Project’s Grievance Mechanism

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Activities Indicators and Targets Responsibility Time/ Year Component 2: New Construction and Rehabilitation of Pump Stations Conduction of 2 weeks trainings 60 women from each district have Project Implementation 1-5 on private business operation the skills on opening and operating Unit (PIU), Project Gender for women of Project area of private business (management Specialist and Women districts (territory of construction and business planning, personnel Committee in association works) management etc.). Only interested with Business Women and capable women admitted to Association the training. 24 women in Project area districts are involved to entrepreneurship and provide services to the specialists and workers of new and rehabilitation pump stations (> 20% from the training participants). Component 4: ABIS Main Infrastructure Modernization Conduct four-day trainings on 180 participators aware about Project Implementation 1-5 effective water usage for key modern methods in water saving Unit (PIU), Project Gender Project stakeholders and technologies and land salinity Specialist in association beneficiaries, including WCA, issues (>30 participants from each with Agronomist BISA, ABMK, farmers and HH project area). members in Project area 180 written materials (leaflets, districts on annual basis. brochures) distributed to participants. 8-10% women participations from water management organizations and farmers 30% women-participants from local households 2-3% women-mirabs included to the WCAs staff in the Project area from the total number Baseline: 0% in 2011. Allocate scholarships for female Scholarships for 24 women- MAWR, ABMK, PIU, PMU 1-5 students at secondary students of Bukhara Irrigation and and Social/Poverty & professional and higher Amelioration College (10% from the Gender Specialist Institutions -Bukhara state current number of women- college of irrigation and students). amelioration, Agro-technical Scholarships for 6 women-students college in Romitan District and of Agro-Technical College in Tashkent branch of state Romitan District (no women- Institute of Irrigation and students currently). Melioration in Bukhara City on a Scholarships for 18 women- competitive basis (for those students of Tashkent branch of fields of study where women's Irrigation and Melioration Institute in participation is most effective). Bukhara city (10% from the current number of women-students) from 17.7% to 19% increased the share of women-students in Bukhara Irrigation and Amelioration College from 0% to 2% increased the share of women-students in Romitan Agro-Technical College from 18.9% to 20.5% increased the

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Activities Indicators and Targets Responsibility Time/ Year share of women-students in Tashkent branch of Irrigation and Melioration Institute in Bukhara City Component 5: Program Management Facility (PMF) Recruit local Social/Poverty & Specialists available for all project PMU and Social/Poverty 1-5 Gender Specialists in the PMU period on permanent basis & Gender Specialist, PIU (UCSA) on permanent basis Gender disaggregated baseline in collaboration with the Ensure inclusion of GAD issues information available and M&E regional state in the social profile at reports. Social/gender profile in the departments of statistics implementation and completion reports, Reporting indicators by and NO,URM (Reporting phases gender indicators reflected in the Develop a mechanism of Agreement between ABMK and ADB’s Project effective cooperation with the Women Committee in Project area Performance Report Women’s Committee at all districts at different project levels, System) levels in Project area including all tasks and Identify Gender focal points for responsibilities of two sides. adequate implementation, M&E Availability of GAD focal points in of gender indicators/targets and PIU during project implementation GAP at PMU levels Gender-balanced PMU and PIU Capacity development training # of women at decision making and consultation with EA, PMU, level in PMU and PMU on the implementation Progress toward meeting the GAP of the GAP indicators and targets

GAD – Gender and Development; PS – Pumping Stations; M&E – Monitoring and Evaluation; PIU – Project Implementation Unit; PMU – Project Management Unit; Makhalla – community based local organization of self-regulation; Khokimiyat – local administration; RWC – Republican Women's Committee (NGO Chaired by the Deputy Prime Minister), ISA - Irrigation System Administration, BISA - Basin Irrigation System Administration, ABMC – Amu Bukhara Machinery Canal; WCA – Water Consumers Association; MAWR - Ministry of Agriculture and Water Resources

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InfoCapital Group Amu Bukhara Irrigation System Rehabilitation Feasibility Study – Final Report

Budget for GAP to be implemented for 5 years (USD)

Unit # of # of Total Cost years units Cost 1. Project Information Campaign 1.1. TV program 200 5 9 9000 1.2. Articles in newspaper 50 5 18 4500 1.3. Written materials (leaflets, brochures) creating and printing 10 5 300 15000 Sub Total: 28500

2. GAD awareness raising training 2.1. Payment for trainer and assistance 150 3 6 2700 2.2. Written materials (leaflets, brochures) creating and printing 10 3 180 5400 2.3. Lunch 7 3 180 3780 2.4. Coffee break 4 3 180 2160 2.5. Participants transportation costs 5 3 90 1350 2.6. Accommodation, per diem of trainers 50 3 6 900 2.7. Flight of trainers 200 3 6 3600 Sub Total: 19890

3. Two-week trainings on private business operating 3.1. Payment for trainer and assistance 1500 3 6 27000 3.2. Written materials (leaflets, brochures) creating and printing 10 3 120 3600 3.3. Lunch 70 3 120 25200 3.4. Coffee break 40 3 120 14400 3.5. Participants transportation costs 50 3 60 9000 3.6. Accommodation, per diem of trainers 500 3 6 9000 3.7. Flight of trainers 200 3 6 3600 Sub Total: 91800

4. Four-day trainings on effective water usage 4.1. Payment for trainer and assistance 500 5 6 15000 4.2. Payment for Agronomist 300 5 6 9000 4.3. Written materials (leaflets, brochures) creating and printing 20 5 180 18000 4.4. Lunch 28 5 180 25200 4.5. Coffee break 16 5 180 14400 4.6. Participants transportation costs 20 5 90 9000 4.7. Accommodation, per diem of trainers 200 5 6 6000 4.8. Flight of trainers 200 5 6 6000 Sub Total: 102600

Scholarship for women students of vocational and higher schools specializing in water 5. resources management sector 30 scholarships for women-students of specialized secondary 5.1. 360 5 30 54000 education schools in Bukhara and Romitan districts ($30/month) 18 scholarships for women-students of higher school in Bukhara 5.2. 600 5 18 54000 district ($50 US per month.) Sub Total: 108000

GRAND TOTAL: 350790

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InfoCapital Group