Irrigation Systems Operation Efficiency Improvement Project (Financed by the Japan Special Fund)

Technical Assistance Consultant’s Report

Project Number: 33453 May 2009

PHI: Irrigation Systems Operation Efficiency Improvement Project (Financed by the Japan Special Fund)

Prepared by Kellogg Brown and Root Pty Ltd.

For National Irrigation Administration

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.

ABBREVIATIONS

ADB Asian Development Bank CIS Communal Irrigation Scheme GoP Government of the Philippines NIA National Irrigation Administration IMO Irrigation Management Offices ISOEIP Irrigation System Efficiency Improvement Project PPTA Project Preparatory Technical Assistance PIM Participatory Irrigation Management IA Irrigators Association IDP Institutional Development Program IMT Irrigation Management Transfer ISF Irrigation Service Fees LGU Local Government Unit MASSCOTE Mapping System and Services for Canal Operation Techniques NGO Non-Government Organisation NIS National Irrigation Scheme O&M Operation & Maintenance

EEN901-INC-REP-001-Rev. A 29 May 2009 II

TABLE OF CONTENTS

1. INTRODUCTION ...... 3 2. BACKGROUND ...... 4 3. ACHIEVEMENTS ...... 7 A. Deployment of Consultants...... 7 B. Consultation Meetings ...... 7 C. Office Establishment ...... 8 D. Framework for the Work ...... 8 E. Data Gathering and Field Reconnaissance Visits...... 8 F. Initial Findings from the Field ...... 10 1. Physical infrastructures...... 10 2. IAs...... 11 3. Lack of Capital ...... 12 4. Land Conversion ...... 13 5. NISs and CISs Visited in Davao del Norte ...... 13 6. NISs and CISs Visited in Antique, Aklan and Iloilo ...... 20 G. Subproject Selection Criteria ...... 27 4. WORKPLAN ...... 30 H. Specific areas ...... 30 1. Outline of activities...... 31 5. SPECIAL ISSUES ON PPTA IMPLEMENTATION...... 33 6. ANNEX A: List of Persons Met ANNEX B: Profile of Proposed Subprojects ANNEX C: Criteria for Subprojects ANNEX D: Personnel Schedule ANNEX E: Revised Work Schedule (following Inception Workshop)

EEN901-INC-REP-001-Rev.A 29 May 2009 3

1. INTRODUCTION

1. This document is the inception report for the Irrigation System Operation Efficiency Improvement Project (ISOEIP), TA 7141-PHI, COSO/90-474, between Asian Development Bank (ADB) and Kellogg Brown and Root Pty Ltd, Australia (KBR) of 13 March 2009. The inception report includes elements of above contractual agreement; the deliberations between ADB and KBR, the discussions during the inception Phase between ADB, NIA and the PPTA team and the major observations and findings of the team during the five week inception phase. 2. The inception report is divided into different sections: background to the PPTA, accomplishments by the TA team during the inception Phase, 20 April-22 May 2009, the work plan for the period 23 May-20 October 2009, special issues and the following annexes: (a) a list of persons met during the inception phase, (b) profile of each proposed subproject visited, (c) revised work plan, and (d) manning schedule of consultants. 3. The inception report has been prepared to provide a feedback to the implementing and funding agencies of work done so far, and the next steps to facilitate the tripartite PPTA coordination meeting scheduled in June 2009. (Date and venue to be further agreed upon). 4. This inception report and the subsequent deliberations of the Tripartite inception Meeting between the Government of the Philippines (GoP), ADB and the PPTA team will become an official project document, and will update and replace earlier proposals, implementation plans, deployment schedules and written working modalities for this PPTA.

EEN901-INC-REP-001-Rev. A 29 May 2009 4

2. BACKGROUND

5. The detailed background to the ISOEIP has been described in several documents, and does not need to be fully repeated in this inception report. Just a brief summary is presented to provide context to the contents and recommendations of this inception report, and the forthcoming feasibility study of the PPTA. 6. The irrigation sector in the Philippines, like several other countries in the world, was well supported with heavy investments in development and expansion of irrigation systems in the 1960ies and earlier. It has later proved difficult to operate and maintain many of these facilities and to attain the planned capacities and estimated outputs and benefits. It has also been difficult to maintain the political support and funding for the irrigation sector due to several other development concerns and investments of a modernizing economy and society. The strong international direction to abolish subsidies and incentives, combined with structural reforms, have furthermore reduced the political and financial support to favor national and communal irrigation facilities. This has further hit the irrigation sector since products and commodities of most sectors have increased with some 100 – 1000% during the same period, hence causing less interest in irrigated agriculture among some producers, investors and politicians. 7. The result has been that government funding to the irrigation sector has been reduced with further deterioration and degradation of the irrigation facilities and the decline in agri-cultural production as the result. A number of regional policy efforts aiming to reduce government costs by devolving responsibilities to the water users and to make the National Irrigation Administration (NIA) leaner and more cost effective followed in the 1970s and early 1980s. This followed in the development wake of growing understanding of the application and development of more democratic and participatory methods and principles in decision making at all levels around the world. It has been concretely manifested in the Philippines with the enactment of the Local Government Code into law in 1992. 8. NIA was established by the GoP in 1963, and was in the 1970s struggling with maintaining the existing irrigation facilities while at the same time identifying and developing new ones to meet the increasing demand for rice and food in general. Under its present setup, NIA has been confronted with inadequate funding, and responded to this challenge in the early 1970s by introducing the Participatory Irrigation Management (PIM) and Institutional Development Program (IDP). A core feature of the IDP was the establishment of viable Irrigators’ Associations (IAs) aiming at the formation, development and operation of IAs to assume different degrees of responsibility for O&M at the tertiary level of the increased irrigation facilities under different contractual agreements. 9. The agricultural sector, which includes irrigation as a key part, plays a very important role in the Philippines. It employs some 40% of the labor force, and accounts for almost 20% of the gross domestic product, besides being a critical factor as well as a prime mover in the reduction of rural poverty. Philippines is presently one of the largest importer of rice in the world (self sufficiency in 1970) with a total population of 90 million people, of which some 37% live below the poverty line. (WB statistics and JICA, inception report, March 2009). Although the agricultural sector is very important for the economy, food security, employment, a healthy population, stability and foreign exchange, the secor, and in particular the producers have experienced little, or no, increase in farm gate prices during the past 2-3 decades. 10. An important step in the development of the ISOEIP was the GoP’s request to ADB in 2004 to provide assistance to an investment project aimed at improving agricultural productivity through rehabilitation and improved management of irrigation schemes. The GoP had prioritized the ISOEIP and included it in the Comprehensive Integrated Infra-structure Program (CIIP) of the GoP for CY 2008-2010. NIA and ADB reformulated the ISOEIP

EEN901-INC-REP-001-Rev.A 29 May 2009 5 proposal in September 2006 and reduced the total costs of the capacity building program to just 10% of the costs of the civil works. 11. ADB fielded a Fact-Finding Mission in June 2008 following the GoP’s inclusion of the ISOEIP into the CIIP and the President’s issuance of Executive Order No. 718 of 8 April 2008. The Executive Order called for heavy rationalization measures within NIA that involve a reduction of staff from 4,926 to 3,819 by year 2113. The ADB fact-finding Mission resulted in this present PPTA with the following salient features: 12. Objectives: Will contribute to the GoP’s MTPDP objectives of reducing poverty, increasing agricultural productivity and enhancing food security. 13. Impact and outcome of ISOEIP: Increased farm household incomes and reduced poverty through a project (ISOEIP) that will improve agricultural productivity and production by: (i) improving irrigation services and institutional arrangements increasing the role of the water users in O&M, and (ii) upgrading rural infrastructure, including irrigation systems, roads and post harvest measures. 14. Specific activities: (i) formulate subproject selection criteria (ii) undertake participatory subproject identification and feasibility study (iii) identify possible candidate core and non-core subprojects (iv) prepare social and environmental safeguards and action plans (v) formulate social and environmental strategies and plans for rural development of the service areas and development of agricultural support services (vi) assess NIA’s implementation capacity and support requirements; and (vii) formulate the possible project for implementation. 15. Costs: The total costs are $1.25 million, of which ADB funds $1 million from the Japan Special Fund and the GoP counterpart funding is $250,000. 16. Criteria: The Team was provided with a list of criteria to be applied for sub-projects to become included for funding under the loan. The criteria were identical with those used when NIA prepared a list of candidate sub-project prior to the arrival of the TAs. : 17. The PPTA team was requested by the ADB Project Officer (PO) to review the list and revise it in view of the progressing work. This has been done and the list of proposed criteria is presented as an annex to this report. . 18. ADB also provided the PPTA Team with a list of proposed subprojects, which has been developed by NIA and ADB. The PPTA Team was advised to review the list and mandated to include additional potential subprojects from Region VI and XI. The list is presented below: (i) Mindanao (a) Saug River Multipurpose Project, NIS (b) Saug River Irrigation System, NIS (c) Libuganon River Irrigation System, NIS (d) Balagunan CIS (e) Sta. Lucia CIS (f) Uppper Tuganay CIS

EEN901-INC-REP-001-Rev. A 29 May 2009 6

(g) Gabuyan CIS; and (h) Limbaan CIS. (ii) Visayas (a) Aklan River Irrigation System, NIS; and (b) Sibalom-San Jose River Irrigation System, NIS. 19. Overall, these irrigation systems have a total existing area of 21,343 ha and a total proposed new area of 10,643 ha. 20. The present feasibility study phase has duration of 180 calendar days, comprising 13 working months of international consulting and 39.5 months of national consulting.

EEN901-INC-REP-001-Rev.A 29 May 2009 7

3. ACHIEVEMENTS

21. Over the past one month (20 April-22 May 2009), KBR fielded a small team of consultants to undertake the inception phase activities, involving meetings at the national, regional and sub-regional levels and consultations with key stake-holders; establish the office/s at NIA for the team; gather relevant primary and secondary data on the pre-selected NISs and CISs proposed for inclusion in the project; conduct first reconnaissance visits to familiarize on the conditions of the proposed subprojects; prepare draft subproject selection criteria; and prepare this inception report. These achievements are discussed in more detail below.

A. Deployment of Consultants 22. A total of seven consultants were fielded for the inception phase. Table 1 shows the names and positions of these consultants and the corresponding mobilization dates and levels of effort from 20 April to 22 May 2009.

Table 1: Mobilization of Consultants for inception Phase, 20 April to 22 May 2009

Name Position Date LOE (pd) x H. J. Green Team Leader/Rural Development Specialist (TL) 20 April 33 x C. R. Henkel International Irrigation Engineer (IIE) 11 May 12 x L. P. Eleazar Deputy Team Leader/Institutional and Capacity Dev’t. Specialist 21 April 32 (DTL) x J. F. Sison Project Economist (PE) 24 April 5 x R. T. Uy-Civil Engineering and Irrigation Design Engineer-1 (IDE-1) 24 April 29 Abendan x R. B. Eleosida Civil Engineering and Irrigation Design Engineer-2 (IDE-2) 13 May 10 x R. A. Ramirez Project Resource Specialist 26 April 21 Note: LOE - level of effort; pd - person-days. 23. The engagement of Mr. Romulo Ramirez, Planning Engineer, had prior approval in principle by KBR and ADB, and formalization of his involvement is being sought under this inception report (see section five below). In addition, a TA support staff was fielded on 24 April 2009 to provide administrative assistance to the team.

B. Consultation Meetings 24. A briefing session was held by the TL and DTL with Mr. Ian Makin, ADB Project Officer (PO) and Senior Water Resources Management Specialist, on 21 April 2009, to clarify certain points related to the TA assignment and to gain recent updates on TA development. The ADB PO emphasized that this PPTA is NIA’s project and the team should ensure that NIA management and personnel should be consulted and involved throughout the PPTA process so that the project designs meet the irrigation sub-sector’s requirements for system rehabilitation and capacity development. Initial meetings were also made with NIA Acting Deputy Administrator for Engineering and Operations, Mr. Antonio Galvez: Project Planning Division Manager and ISOEIP Coordinator, Mr. Milo Landicho; Operations Department Manager, Mr. Gregorio Dumandan; and the Institutional Development Division Manager, Mr. Renato Gamboa on two occasions (23 April and 14 May 2009), which clarified the implementation status of NIA Rationalization Plan and its implications on IMT policy enforcement, as well as the expectations of NIA and NEDA from the team. Courtesy calls on and briefing sessions with NIA Regional Irrigation Managers in Davao City (NIA Region XI) and Iloilo City (NIA Region VI) were also held by the team during the weeks of April 27 and May 4, respectively. During these two weeks, a series of consultation meetings were further held with NIA field staff assigned to specific NISs and CISs in Davao del Norte

EEN901-INC-REP-001-Rev. A 29 May 2009 8

province in Region XI, and in Antique, Aklan and Iloilo provinces in Region VI in the course of the team’s first assessment mission to pre-selected irrigation systems (see Section 3.5 below). In addition, the team also made a side visit to the Provincial Planning and Coordination Office in Davao del Norte on 29 April 2009 to confirm a policy statement made by the Provincial Governor, which appeared on a local newspaper, aiming to develop the province as “the banana capital” of the Philippines, and to request for time series data showing land use conversion from rice to banana production. Consultation meetings with farmers, and IA officers and members took place during visits to specific NISs and CISs, are further elaborated in Section 3.5 and 3.6 below. Annex A provides the list of persons met by the team during the inception phase. 25. The team was also invited by NIA to participate in the Orientation Workshop on IMT Institutional Development Program designed for Regional IDS heads to be held at NIA Headquarters in Quezon City on 20 to 22 May 2009, to provide a clear policy direction, program schedule, and categorization and prioritization of NISs for turnover to irrigators associations (IA) in line with NIA’s Rationalization Plan.

C. Office Establishment 26. Prior to the inception phase, the team (through the DTL) had earlier arranged with NIA for provision of office space for consultants at the Project Planning Division (PPD) in its headquarters in Quezon City. During the first week of the inception phase, the team visited the office to ensure provisions for telecommunication facilities and security arrangements, as well as the appointment of a secretarial staff by NIA for the team. Similarly, office spaces for the team were arranged with NIA Region XI and VI Managers in the course of the first field visits to the pre-selected NISs and CISs. At the time of the visits, the team confirmed the availability and suitability of the office provided by NIA Region XI within its regional office premises in Davao City. NIA Region VI Office has indicated that it would provide an office space for the team during the feasibility study phase.

D. Framework for the Work 27. The team reviewed the PPTA terms of reference (TOR), the milestones and deadlines for submission of major reports, preliminary selection criteria for core subprojects, and the approved budget and its allocations among key cost items in order to develop a workable framework for the entire work of the team, with emphasis on completion of the inception report as scheduled. In the inception phase, focus has been placed on preliminary assessment and data/information collection for the identification of the proposed subproject rationale and justification; consultations with local stakeholders and their institutions, including farmer-beneficiaries, to get their views on potential social, financial, economic and environmental impacts of the proposed subprojects as well as on the subproject selection criteria; firming up of the screening criteria for selection of subproject sites; and identification of proposed core subprojects for the feasibility study as well as the list of proposed non-core subprojects which could be the subject of feasibility study during the project implementation phase. Guided by the PPTA TOR and briefing sessions provided by ADB PO and NIA, the team made minor adjustments in fielding schedule of other consultants, which are proposed for consideration by ADB, to maximize consultant inputs during the feasibility study phase. Details on this are discussed in Section 5.

E. Data Gathering and Field Reconnaissance Visits 28. The team conducted first reconnaissance visits to pre-selected NISs and CISs from 27 to 30 April in Davao del Norte, and from 4 to 8 May in Antique, Aklan and Iloilo. A briefing on the purpose of the team’s visit were made with NIA Regional Irrigation Managers and their senior technical staff. After the briefing, the Regional Irrigation Managers and staff gave a short presentation of the existing general physical condition of the proposed subprojects that require rehabilitation, including construction of new NIS in Davao del Norte, for inclusion in

EEN901-INC-REP-001-Rev.A 29 May 2009 9 the project. Additional more in-depth presentation and discussion of proposed subprojects were also provided by designated Provincial Managers of the newly formed Irrigation Management Offices (IMOs) concerned. Of the 10 pre-selected proposed NIS and CIS subprojects, three CISs (Balagunan CIS, Sta Lucia CIP and Upper Tuganay CIS with an aggregate potential service area of 274 ha) in Davao del Norte were recommended by NIA Region XI to be replaced by two exiting CISs (Semong CIS and Anaman CIS with a total potential service area of 650 ha) . The main reason for exclusion of Balagunan CIS and Sta Lucia CIP is the ongoing progressive conversion of land use from rice to banana production. In the case of Upper Tuganay CIS, the system is reported to be newly rehabilitated by NIA. Davao del Norte IMO also recommended for inclusion of two other existing NISs.. The team (consisting of four engineers: the newly mobilized International Irrigation Engineer, the two Civil Engineering and Irrigation Design Engineers and Planning Engineer) made a follow-up assessment mission to Davao del Norte to appraise two other NISs (Lasang NIS and Kipaliku NIS) and other potential NISs/CISs. 29. Table 2 provides an updated list of proposed subprojects, showing the changes in the proposed CISs and additional two NISs in Davao del Norte, and the additional one NIS in Iloilo, one NIS in Capiz, two CISs in Aklan, and one CIS in Guimaras Island, also a province within Region VI. The updated list results in a total potential service area of about 44,569 ha, consisting of nineNISs (4 in Region VI and and five in Region XI) with an aggregate area of 42,629 ha and 10 CISs (3 in Region VI and seven in Region XI) with an aggregate area of 1,940 ha. Table 2: Updated List of Proposed Subprojects

Subproject Type Service Area (ha) Present Design Rehab New Total Region VI: Iloilo, Antique, Aklan and Guimaras provinces Iloilo: Barotac Viejo RIS National 1,700 1,700 532 2,232 Antique: Sibalom-San Jose RIS National 5,065 5,065 - 5,065 Aklan: Aklan RIS National 3,963 4,510 - 4,510 Capiz: Mabusao RIS National 1,420 1,420 80 1,500 Aklan: San Jose CIS Communal 220 220 - 220 Aklan: La Serna CIS Communal 100 100 - 100 Guimaras: Cabano CIS Communal 150 150 - 150 Sub-total 12,618 13,165 612 13,777 Region XI: Davao del Norte province Libuganon RIS National 7,382 7,382 3,118 10,500 Saug-Left Libuganon RIS National 4,689 4,689 196 4,885 Upper Saug RIP National - - 4,300 4,300 Lasang RIS National 4,900 4,900 337 5,237 Kipaliku RIS National 2,317 2,317 2,083 4,400 Semong CIS Communal 500 500 50 550 Limbaan CIS Communal 92 92 - 92 Amanan CIS Communal 100 100 - 100 Gabuyan CIS Communal 174 174 - 174 Balagunan CIS Communal 250 250 - 250 Sta Lucia CIS Communal 54 54 - 54 Upper Tuganay CIS Communal 203 250 - 250 Sub-total 20,661 20,708 10,008 30,792 Total 33,279 33,873 10,696 44,569 Note: Data supplied by NIA and/or IAs.

EEN901-INC-REP-001-Rev. A 29 May 2009 10

30. In Region VI, the team visited the three NISs that are proposed for rehabilitation and improvement under the project to familiarize with the general condition of the existing systems because of the limited time. Consultation dialogues were also conducted by the team with concerned NIA field staff, some farmers and IA officers in these NISs. However, the team undertook informal meetings with IA officers of two CISs (La Serna CIS and San Jose CIS) in Aklan to understand the general organizational conditions and activities, and their existing problems related to O&M and agricultural production, including their views on the readiness and willingness of IA members to participate and contribute to the rehabilitation of their CISs under the project. In Region XI, the team visited the three NISs and two CISs (Semong CIS and Limbaan CIS), and also conducted informal meetings with NIA field staff, farmers and IA officers. The team was not able to tour the site of Gabuyan CIS, upon advice on the site by the Semong IA president, due to potential security problem. In the case of Amanan CIS, the team decided not to visit the site as it was learned that the IA of the CIS has submitted to NIA its desire to be excluded in the proposed project, primarily because it is reluctant to incur additional loan for system rehabilitation after full payment of the CIS amortization. 31. The TAs plan to field another mission to additional proposed subprojects in Region VI, consisting of the existing Mambusao RIS in Capiz province, La Serna CIS and San Jose CIS in Aklan province, and Cabano CIS in Guimaras province during the last week of May, because these systems were not covered during the first visit due to time constraints. However, the available profiles of these systems were gathered from NIA Central and Field Offices. 32. During the reconnaissance visits and consultations with local stakeholders, the team also gathered primary and secondary data/information on the proposed subprojects, and also determined the availability of data, maps, and engineering plans and designs.

F. Initial Findings from the Field 33. Based on an initial review of available information, discussions with key stakeholders and reconnaissance visits to some of the proposed subprojects, it is evident that the physical condition of most NISs and CISs visited by the team is far from satisfactory. Annex B shows the profiles of the existing NISs and CISs proposed for inclusion in the project, and the initial findings observed by the team during field visits. Overall, the present conditions of the existing NISs and CISs visited by the team can be described as follows:

1. Physical infrastructures 34. Physical infrastructures (dams, intakes, canals and structures, and drainage systems, etc.) of the proposed NISs have either been rehabilitated only after 32-46 years of system operation, or not at all after 19-29 years of operation. In the proposed CISs, major rehabilitation has not been undertaken from the time system construction was completed and became operational. The nature and extent of damages or problems of specific irrigation and drainage facilities and structures in each NIS and CIS are described below. 35. As observed, available data on system profiles, particularly the designed potential irrigation service areas, firmed-up service areas and actual irrigated areas, often vary depending on the sources of information (i.e., NIA Regional Offices, Irrigation Management Offices, and specific system offices and staff, and farmers). The same is true for types, numbers, lengths and/or widths of diversion dam/ headworks, canals, structures,. Layout maps of service and catchment areas at appropriate scales, as-built plans, updated time- series data on rainfall and stream flow, among others, are not readily available. More importantly, accurate records of inventory of all existing irrigation facilities and related assets at both NISs and CISs, including those damaged or obstructed ones requiring periodic maintenance, urgent repair or major rehabilitation are also not available.

EEN901-INC-REP-001-Rev.A 29 May 2009 11

2. IAs 36. Majority of the IAs in the NISs and CISs visited by the team have been found to be inactive from the early 2000s (5-6 years), particularly in Region VI, and reactivation and reorganization of IAs have started only in the past 2-3 years. In these IAs, institutional development activities have been concentrated on election and installation of IA officers, provision of basic leadership training for IA officers, and facilitation of regular meetings of IA Board of Directors. Only the IAs in Libuganon RIS in Davao del Norte have existing O&M contracts (Types 1&2) with NIA while majority of IAs in other four existing NISs (Saug-Left Libuganon RIS, Barotac Viejo RIS, Sibalom-San Jose RIS and Aklan RIS), which were visited by the team, have none. Most of the IA officers and members, who were interviewed by the team, claimed that they convened regular IA BOD meetings every month, but they could not clearly elaborate on the major topics discussed. The three most common topics cited by IA officers and farmers in Sibalom-San Jose RIS, Aklan-Panakuyan RIS, Barotc Viejo RIS, San Jose CIS, and Semong CIS include: (i) water delivery scheduling; (ii) canal clearing at TSAG level through the traditional voluntary collective labor sharing, locally known as “dagyaw”; and (iii) settling disputes related to irrigation water pilferage or stealing often committed by upstream farmers. These three issues are functionally interconnected, which influence farmers’ cooperation and compliance on the cropping calendars and water delivery schedules agreed by IAs with NIA, and also their active participation in O&M activities. 37. All IA officers and members interviewed by the team also claimed that their entire memberships have not received major capacity development activities to transform them into democratic organizations, technically competent on system management and agricultural development, and financially viable and self-sufficient IAs. Access to, and external assistance on, credit or micro-financing, agricultural extension and marketing, and other agricultural support services have also been limited; and government supports have generally not been sustained. 38. On the NIA side, the number of institutional development officers (IDOs) responsible for organizational and capacity building of IAs, especially in the NISs, has been found to be insufficient in light of the large number of IAs which are mostly institutionally, technically and financially weak. Under the Rationalization Plan of NIA, each NIS will either have one IDO or none at all, as shown in Table 3. This means that IA organizational and capacity building tasks will be shouldered by only one IDO in each NIS regardless of the size of service area, or in tandem with O&M Staff. In Barotac Viejo RIS, such tasks will be assumed by two O&M staff. Based on information gathered from the Manager of the Institutional Development Division at NIA Central Office, the traditional training of O&M staff on IA Institutional Development Program in relation to O&M of NISs had been stopped in the early 1980s, and this type of training has been mainly provided to IDOs and IAs since that time. This fact indicates how much time and resources would be required for capacity building of O&M staff, and even IDOs, to bring them up to reasonable standards. A two-stage capacity development program for IDOs and O&M staff may be necessary (which will be subjected to further investigations and consultations with key NIA personnel during the feasibility study phase): (i) an orientation-workshop on the new NIA Institutional Development Program prepared by NIA-IDD Central Office within the context of NIA’s Rationalization Plan to familiarize them on NIA’s policy and guidelines on IMT, participate in the formulation of IMT implementation strategy and schedule for each NIS, and fully understand their functions, roles and obligations to ensure the transfer of NIS’ management responsibilities to organized IAs consistent with approved IMT implementation schedule for each NIS; and (ii) specialized training on integrated system management and agricultural development including asset management and farm business planning, networking and partnership develop-ment for agricultural production and marketing, participatory and democratic organizational development, conflict resolution techniques and tools, and resource mobilization, among others. Particularly for O&M staff, training on modern irrigation management techniques, starting from participatory walk-through for infrastructure condition assessment survey to the

EEN901-INC-REP-001-Rev. A 29 May 2009 12

planning and implementation of O&M for dams/intakes, canal sections and structures, and on-farm facilities (farm ditches and drains), will be critical to the achievement of the objectives of NIA’s Rationalization Plan and IMT implementation. Table 3: IDO and O&M Staff Deployment in Existing NISs Proposed for Inclusion to ISOEIP in Post-NIA Rationalization Plan Implementation (2009-2013) Region/Province-IMO/RIS Service IDO & O&M staff Staff Ratio with Service Area area (number) (ha) IDO O&M IDO O&M Region VI Iloilo: Barotac Viejo RIS 2,232 0 2 - 1:1,116 Antique: Sibalom-San Jose RIS 5,065 1 6 1:5,065 1:844 Aklan: Aklan-Panakuyan RIS 4,510 1 6 1:4,500 1:752 Sub-total 11,807 3 14 1:3,936 1:843 Region XI Davao del Norte: - Libuganon RIS 10,500 1 6 1:10,500 1:1,750 - Saug-Libuganon Left RIS 8,180 1 5 1:8,180 1:1,636 Sub-total 18,680 2 11 1:9,340 1:1,698 Total 30,487 5 25 1:6,097 1:1,220 Source: NIA Rationalization Plan, 2008 accompanied by an approval letter from the Department of Budget and Management dated eight April 2008. 39. Information gathered from a few IA officers and farmers during the informal meetings conducted by the team reveals a low level of cooperation and unity among IA members as manifested in the recurring water use conflicts (such as head versus tail-end users) arising from unabated illegal checking or diversion of water along the Main Canals by upstream farmers. In addition, the non-functionality of most IA committees, the dominance of IA officers in business affairs of the associations, and low membership compliance on IA internal policies on water distribution and system maintenance, among others, are some evidences of IAs’ institutional weaknesses. 40. The financial weakness of IAs results mainly from their inability to assume system management responsibilities through various O&M contracts with NIA in NISs, and their low collection of amortization payments by members in CISs. Perhaps the exception to this general observation can include the 45 IAs in Libuganon RIS with renewed Type 1&2 O&M contracts with NIA in January 2009, and the two IAs in Amanan CIS and Limbaan CIS, all located in Davao del Norte province, which respectively have fully and substantially paid their amortizations to NIA. These latter two IAs have also stated their desires to be excluded from the proposed ISOEIP, because they are hesitant to incur new loans for rehabilitation of their CISs after the full and substantial payment of their amortizations on the CISs. In Davao del Norte, all NISs have reported higher ISF collection efficiency (close to 100%), which should have provided higher ISF share for IAs. However, historical data on IAs’ share from ISF collection (Type 2 contract) and payments received from NIA for canal clearing (Type 1 contract), including the utilization of those earnings, have not been available or collected during the inception phase. Such data will shed light on how IAs have allocated and utilized their earnings over time to contribute and support O&M of each system, build capacity of their members, provide incentives to members for active participation, and possibly expand the provision of services to members in terms of credit, farm input and marketing support, and general crop and personal insurance. For instance, the IA in Limbaan CIS provides death benefits to its officers (PhP 3,000 per case) and members (PhP 1,000).

3. Lack of Capital 41. Based upon limited information obtained from informal discussions with a few farmers within the proposed subproject sites, many farmers are faced with lack of capital to apply

EEN901-INC-REP-001-Rev.A 29 May 2009 13 recommended cropping patterns and farming practices (for example, use of fertilizers) to obtain projected crop yields, and follow NIA’s proposed water delivery schedules due to the lack of capital to buy farm inputs at right amount and time. Hence, they continued to rely on informal credit provided by traders and landowners for farm inputs (seeds, fertilizers, etc.) who generally imposed a 10% per month interest on borrowed money.

4. Land Conversion 42. In Davao del Norte province, the gradual conversion of irrigated lands from rice to banana production has been evident, particularly in recent years, with the introduction of contract growing of bananas intended for export by private companies. Its rapid and continuous expansion over the long-term will have serious implications on the ability of existing irrigation systems to support and contribute to the government’s objective of attaining self-sufficiency in rice production.

5. NISs and CISs Visited in Davao del Norte (Region XI) 43. Saug-Left Libuganon RIS. Saug RIS and Left Libuganon RIS have different water sources (see Annex B - Profile of Proposed Subprojects) and operated independently from each other with distinct service areas, but have been combined administratively for efficient management by one Irrigation System Office (ISO). Both systems were constructed under ADB-funded First and Third Davao Irrigation Projects, respectively. 44. Saug RIS was constructed in 1980 and became operational the same year, with a designed service area of 7,130 ha. At present, the irrigated area of Saug RIS is about 5,142 ha, mainly planted to rice (3,491 ha) and banana (1,651 ha) covering the municipalities of Asuncion, Kapalong, New Corella and Tagum City in Davao del Norte province. The system is generally flood-prone, experiencing regular flooding every year, particularly during the months of March to April. According to the Irrigation Superintendent (Engr. Bonifacio Ysalina) there are no inventory data of damaged irrigation facilities due to lack of budget support for inventory management. Irrigation facilities have been damaged due to physical deterioration and/or recurrent flooding. 45. Most of the existing irrigation canals are earth-lined and heavy erosion at side slopes of the canals are observed due to overtopping of flood waters on the canal embankments and service roads. Damaged canals are mostly located at the head (upstream) due to flood from rivers and creeks, and the tail end (downstream) due to water backflow from the drainage channels. Existing drainage channels are heavily silted. Existing canal structures are partially damaged and pipes/barrels are silted. The reconnaissance visit to certain sections, canals and structures of the system, and discussions with Irrigation Superintendent and other NIA field staff have affirmed that flooding is the main problem of the irrigation system. Some of the possible rehabilitation works to address the flooding problem and damaged/deteriorated canal networks and structures are outlined below, but further investigation is necessary due to time constraints during the first visits: (i) rehabilitation and improvement of flood protection dikes and drainage structures (ii) reshaping and/or concrete lining of irrigation canals, and modification of canal structures (iii) raising of road embankments and resurfacing/gravelling of some service roads; and (iv) excavation and desilting of existing drainage channels. 46. The rehabilitation of these irrigation and drainage facilities is being proposed to increase irrigation efficiency of the present firmed-up service area of 5,142 ha and to expand the service area to 5, 300 ha.

EEN901-INC-REP-001-Rev. A 29 May 2009 14

47. With the limited time devoted to discussions with Irrigation Superintendent and other NIA field staff, and familiarization visit to the service area and facilities, the team did not have an opportunity to consult with IAs and farmers. Available data on IA profiles indicate that the existing 19 IAs have a total membership of 2,585 farmers, and divided into 161 turn-out service area groups (TSAGs). Currently, each IA covers an average service area of 280 ha, while each TSAG covers an average command area of 33 ha. The present IA membership, however, represents a little over 50% of the total 4,930 farmer-beneficiaries. Based on NIA records, all IAs have had O&M contracts (Types 1&2) in the early 1980s, but most of their contracts were not renewed by NIA in recent years, except for one IA whose contract also ended in 2008. Despite the absence of O&M contracts with IAs, the ISF collection efficiency reached 101% in 2008, indicating the strong leadership of NIA’s Irrigation System Office and the effectiveness of the ISF collection strategies (e.g. imposition of water delivery cut-off on the farms of delinquent farmers) adopted by the same office. The uncertainty of IAs’ capacity for sustainable O&M of Saug RIS will have serious implications on the success of IMT implementation in view of NIA’s Rationalization Plan. 48. The large proportion of irrigated area (about 32%) being used for banana production raises questions on whether further conversion of rice to banana area can be contained in the long-term. This will be heavily dependent on how farmers respond to market demand and their ability to adjust and learn new production technologies required for producing banana. It will be important to know what measures NIA will put in place to prevent further conversion of irrigated rice lands into plantation crops within the system. 49. Left Libuganon RIS was constructed and became operational in 1990, or ten years after the commissioning of Saug RIS, with a designed service area of 1,069 ha. However, problems encountered during construction resulted in deletion of some Lateral Canals with their corresponding areas. This led to a decrease in the service area to about 745 ha. Due to time constraints, this system was not visited by the team during the first reconnaissance visit (26 to 30 April 2009). With the arrival of the International Irrigation Engineer, Mr. Clifford Henkel, on 11 May 2009, and the fielding of the second Civil Engineering/Design Engineer, Mr. Rafael Eleosida, on 13 May 2009, the team dispatched a second mission to Left Libuganon RIS along with other proposed NISs and CISs from 15 to 21 May 2009, and some of the major observations and findings on Left Libuganon RIS are as follows: (i) Headworks (a) 2-engine driven mechanisms for lifting of sluice gates are not functional and poorly maintained (b) sluiceway channel is heavily silted (c) sluiceway and intake gates are full of banana trunks and no cleaning operation is done (d) silt excluder at one bay of sluiceway is not functional (heavily silted and full of debris); and (e) the silt deposit immediately upstream of the intake formed a land extension which is planted with banana that obstructs the flow to the intake and sluice-way resulting in siltation. (ii) Main Canal (a) about 1 km length of the Main Canal from the intake is silted, and some sections are oversized and deteriorated (b) check gates along the Main Canal have no control gates (c) there are illegal turnouts along the Main Canal constructed by farmers paying ISF

EEN901-INC-REP-001-Rev.A 29 May 2009 15

(d) water is pumped from the upstream of the Main Canal for drip irrigation of banana plantation. The water drawn is paid of ISF (e) most of the length of the canal side slopes is eroded and silted bed (f) downstream of the Main Canal, some sections are oversized with flow almost overtopping the banks (g) flow at inlets of structures is obstructed by debris like banana trunks, cut grasses, etc.; and (h) the gatekeepers’ quarters need refurbish. 50. The estimated total cost of the proposed rehabilitation of Saug-Left Libuganon RIS is PhP 25.6 million. With rehabilitation, the incremental economic benefits will mainly be derived from the following: (i) reductions in crop and property damage due to flooding, (ii) reduction in O&M costs; (iii) increases in wet and dry crop yields; and (iv) increases in the capacity of farmers to pay ISF. Based on the past five-year O&M performance records of Saug-Left Libuganon RIS, the crop damage due to flooding covered an average area of 14% (or 543.4 ha) during the wet season, resulting in exemption from ISF payments1 of affected farmers. Irrigation efficiency improvement will also result in improved water delivery and reduced conveyance losses, thereby increasing crop yields, particularly during the dry season. Over the past five years, an average of about 25% (or 1,116.4 ha) of the irrigated and planted area (4,515.9 ha) has been reported to have yielded 40 cavans/ha or below in the dry season due to insufficient water supply. In effect, the present areas reported to be exempted from ISF payments could directly benefit from the proposed rehabilitation. 51. Libuganon RIS. This system was constructed over the period 1977-1989 under the ADB-funded Second Davao Irrigation Project, and became operational in 1990. From a designed service area of 10,500 ha, Libuganon RIS presently covers a service area of about 7,382 ha due to poor condition of irrigation system, as briefly discussed below. Its service area encompasses the municipalities of Carmen, Dujali, Sto. Tomas and Kapalong in Davao del Norte province. The purpose of the proposed rehabilitation is to restore its design area of 10,500 ha. NIA has estimated the total cost of this proposed rehabilitation at about PhP 360.23 million. 52. Based on the combined information from consultation meetings with NIA field staff and IA officers, and two assessment missions conducted by the team, the current condition of Libuganon RIS is as follows: (i) Dam and Headworks (a) the upstream area of the dam is silted (b) dam downstream apron and protection dike are scoured due to soil erosion and flooding (c) the existing eight intake gates and its lifting mechanisms are all functional and in good condition, but all the gates at the inlet are full of debris composed of banana and wooded trunks; and (d) two engine-driven lifting devices at the flushing gates are operational and in good condition. Opening of the flushing gates is performed monthly by the gatekeeper. However, the rubber seals of the gates need replacement.

1 Under NIA’s policy, exemptions from ISF payment are allowed for farmers whose planted rice has been damaged by flood and other calamities including pests and diseases, yielding 40 cavans/ha or below.

EEN901-INC-REP-001-Rev. A 29 May 2009 16

(ii) Main and Lateral Canals (a) about five km stretch of the Main Canal is planted to banana along the side slopes and banks, and farmers have been given warnings and deadlines by the IMO to clear the banana (b) downstream of the Main Canal, about two km stretch is about to be overtopped due to accumulated silt at the canal bottom; and (c) all unlined Main and Lateral Canals are silted, and some lined canals, gates and structures are damaged. (iii) Flooded Area, Protection Dikes and Drainage System (a) a potential area of 800 ha is located at the middle portion of the service area. Presently, it is a flood plain area where Barobo creek passes through this area. Overflowing of the creek due to heavy rainfall causes flood and prevents farmers from planting crops. According to the personal accounts by NIA field staff (in the absence of a survey), about 700 farmers are dependent on this area for rainfed crop production. If no flooding occurs, farmers produce about four tons per ha twice a year. Some farmers adopt the rice-cum-fish farming. They make a 2.0 m wide x 1.0 m deep canal along the perimeter of their paddy, to raise fish. Fish farming costs about PhP 10,000-15,000 per ha, cost costs of. fingerlings, feeds and labor for excavation. On average, this investment yields PhP 20,000-25,000 per harvest per season, which is an added income for the farmers (d) two existing protection dikes located in Libuganon river and Tuganay river are being overtopped by floodwaters with about 1.5 - 2.0 m depth of water. The floodwater has difficulty of flowing out to the sea due to heavy siltation of the outlet or estuary (e) most of the existing drainage ways, ditches and collector drains are clogged with silt, and flow of used water is therefore restricted. (iv) O&M Facilities, Service and Access Roads (f) some service and access roads are damaged and not accessible due to over-flowing of runoff water caused by flood; and (g) the water masters’ quarters need refurbish. 53. The proposed rehabilitation will essentially address, among others, the foregoing list of the present physical problems of Libuganon RIS. In considering the proposal for protection of the 800 ha by constructing a drainage facility on the banks of Libuganon River, there are two major factors that should be considered for investigation: (i) the presence of sparse and mostly temporary dwelling units, and also population, in the area raises questions on who will benefit from the construction and the amount of benefits that may be derived from it; and (ii) the need to confirm about the presence of peat soil in the area which has implications on the suitability of the area for agricultural crop production. 54. From the institutional perspective, both NIA field staff and IA officers have shown confidence on their abilities to maintain a higher level of cropping intensity (200%) and reasonable crop yields (average of four tons per ha) despite the observed and reported physical problems of the irrigation system. As noted earlier all the 45 IAs within the system have renewed Types 1&2 contracts with NIA, which are the major source of income for these IAs. In 2008, ISF collection reached 117%, which could be considered exceptional for NISs in the region (which averages to 80-90%), and the country (about 50%) as a whole. This exceptional performance has been attributed by the RIM and IMO to the following factors: (i) good relationships and partnerships with IAs and farmers

EEN901-INC-REP-001-Rev.A 29 May 2009 17

(ii) aggressive policy enforcement, accompanied by penalties and sanctions on dysfunctional behaviors or violators, on water delivery and ISF collection by the IMO staff; and (iii) strong and determined leadership of the IMO and his staff. 55. The prompt payment of ISF for farmers engaged in contract growing of banana by the private company, often done at the beginning of the year, could be another factor that contributed to faster and higher ISF collection. 56. During the site visit, there is an apparent gradual expansion of land use conversion from irrigated rice to banana production, marked by new and ongoing land developments for banana plantation. Presently, irrigated rice land occupies about 6,206 ha (82%), while banana covers about 1,099 ha (18%) of the total service area. This is a major concern in terms of supporting this system under the ISOEIP which in the long-term may not be consistent with the government’s objectives of reducing rural poverty, increasing agricultural productivity, and ensuring rice self-sufficiency and food security. 57. With the proposed rehabilitation, the incremental economic benefits will mainly be derived from the following: (i) reductions in crop and property damage due to flooding, (ii) reduction in O&M costs; (iii) increases in wet and dry crop yields; and (iv) enhances farmers’ capacity to pay ISF. Based on the past five-year O&M performance records of Libuganon RIS, the crop damage due to flooding covered an average area of 30% (or 1,993.2 ha) during the wet season, resulting in exemption from ISF payments2 of affected farmers. Irrigation efficiency improvement will also result in improved water delivery and reduced conveyance losses, thereby increasing crop yields, particularly during the dry season. Over the past five years, an average of about 27% (or 1,931.1 ha) of the irrigated and planted area (7,057.3 ha) has been reported to have yielded 40 cavans/ha or below in the dry season due to insufficient water supply. In effect, the present areas reported to be exempted from ISF payments could directly benefit from the proposed rehabilitation. 58. Upper Saug RIP3. This is a new NIS which is being proposed for construction under the ISOEIP with a potential service area of 4,300 ha. The design of this proposed subproject includes construction of a diversion dam across Saug river located upstream of the existing dam of Saug RIS, and a network of irrigation canals and structures, O&M and drainage facilities, terminal facilities, and service and access roads. It is within the Tagum-Libuganon River Basin in Davao del Norte and included in the Comprehensive Integrated Infrastructure Program for the period 2006-2010 and the NIA’s Budget Strategy for CY 2007-2010. It has secured the favorable endorsement of the Region XI Development Council (RDC) and an approved Environmental Clearance Certificate (ECC) issued by DENR. Plans for detailed engineering are nearing completion. The estimated cost of the irrigation system is about PhP 985.0 million, which still needs to be reviewed and finalized. 59. Rice cultivation within the proposed NIS is currently being carried out under rainfed conditions. Farmers build temporary brush dams on rivers to divert water to their rice paddies but they need to rebuild the dams every time flood occurs. An interview with a farmer living in a barangay (Sto. Nino) within the proposed NIS shows the presence of small Sto Nino CISs with a command area of 50 ha, being operated by an IA supported by the Municipal Government of New Corella (LGU), which needs confirmation on the exact potential service area of the proposed subproject and the possible implications on existing locally initiated

2 Under NIA’s policy, exemptions from ISF payment are allowed for farmers whose planted rice has been damaged by flood and other calamities including pests and diseases, yielding 40 cavans/ha or below. 3 Under NIA’s practice of classifying new from existing irrigation systems, the term “project” is attached to the name of the system when it is considered for new development or construction, and “system” when it is an existing one. Hence, for consistency purposes, this practice is observed in this inception report.

EEN901-INC-REP-001-Rev. A 29 May 2009 18

irrigation schemes (such as the Sto Nino CIS). More in-depth field investigations, and farmer and other stakeholder consultations will be required to assess the technical, social, economic, financial and environmental potentials and impacts of the proposed NIS. Extensive technical surveys will be needed to evaluate the geotechnical, hydrological and agronomical suitability of the area for the proposed irrigation infrastructures, and its social, economic and environ-mental costs and benefits. Socio-economic survey will also be needed to determine the social groups who will directly benefit from and who will be adversely affected by the proposed construction of Upper Saug NIS in order to plan for the formulation of appropriate social safeguards. An environmental assessment of the proposed subproject will also be required to identify potential impacts and the corresponding mitigating measures including the necessary environmental safeguard framework. 60. Semong CIS. No records exist on the date of construction completion of Semong CIS and the date it became operational. Based on the information gathered during the meeting with the President of Katipunan-Semong IA, the IA started operating the system at the time it was formed and registered with the Securities and Exchange Commission in 1985, or about 24 years to this date. Semong CIS has a present service area of 500 ha, of which 425 ha have been planted to rice and 75 ha to banana, located in Kapalong municipality, Davao del Norte province. 61. According to the IA President, the water supply from the existing dam is sufficient, and irrigation facilities are generally in good condition and operational. There is no flood problem in the area. The team has visited only the proposed extension area of 50 ha in the downstream area and some sections of Main Canal. Further investigation of the irrigation facilities is needed to assess the actual condition of the present CIS. The purpose of the proposal for rehabilitation of the system is to increase irrigation efficiency by reducing conveyance losses, and extend its services to an expansion area of 50 ha which will benefit some 53 farmers in the downstream area of Main Canal. The scope of the rehabilitation, as presented to the team, focuses on the following civil works estimated at a total cost of PhP 14.32 million: (i) concreting of a 1.5 km earth-lined Main Canal to reduce conveyance losses, to serve an additional 50 ha at the downstream area (ii) desilting of existing Main Farm Ditches (MFDs); and (iii) construction of canal structures and turnouts. 62. The IA has a current membership of 245 farmers, representing about 74% of the total number of 333 farmer-beneficiaries. Of the latter, about 91% (or 302) are rice farmers, and 9% (or 31) are banana growers. Of the rice farmers, 14% (or 45) are tenants and 86% (or 302) are owner-cultivators. All banana growers are owner-cultivators. Some of the largest farms (4.0 to 9.0 ha) are found among banana growers. In the rice area, the farm sizes ranges from 0.10 to 3.27 ha. Thus, the average farm size of 0.95 ha for the whole system does not really reflect the real socio-economic conditions of all farmers in the area. 63. Collection efficiency of amortizations from members has been reported at 85%, and the IA has collected an average of PhP 700,000-800,000 per cropping. The amortization charges follow the ISF rates: four cavans/ha during the dry season and three cavans/ha during the wet season. The IA’s agreed annual amortization with NIA was PhP 800,000, and reportedly complied with its commitment, indicating a substantial amount of IA earnings from surplus amortization payments made by its members. However, the IA President has informed that IA funds have been used for periodic canal clearing, training of IA members, and allowances of IA officers. Available IA funds have accordingly not been sufficient to undertake major canal improvement and clearing main farm ditches of silt deposit. No records of IA annual earnings and expenditures have been available to the team during the assessment visits to the site. Such records can provide useful information of the IA financial position. The remaining amortization with NIA requires another 15 years for the IA to finish its

EEN901-INC-REP-001-Rev.A 29 May 2009 19 financial obligation and take full ownership of the system. The IA President has affirmed that the members are aware of their obligations to pay individual amortizations, and are generally participating in canal clearing every after the harvesting period following the “dagyaw” tradition. 64. Current average yield of rice is five t/ha during the wet season, and about 3.74 t/ha during the dry season. Marketing of rice is usually done by individual members, mostly with traders who visit the area during the harvesting period. Wet paddy price is PhP 16.50 per kg while dry paddy is PhP 17.00 per kg. Under the present marketing system of individual selling of paddy rice, farmers are unable to set farm gate price of rice at competitive level. Lack of capital has been identified as a major constraint for most farmers to apply the recommended farming practices (cropping calendar, fertilizer usage, etc.) in order to achieve the projected higher rice yields. 65. As like in the proposed three NISs, there appears to be an increasing interest among farmers in this area to convert irrigated rice fields into banana plantations. This concern needs further confirmation with IA members and non-members within the existing service area of 500 ha and with potential farmer-beneficiaries in the proposed extension area of 50 ha to assess their future plans and its implications on the government’s development objectives for ISOEIP. 66. Limbaan CIS. This CIS was constructed and completed in 1986, and turned over to the IA on the same year. The diversion weir, irrigation infrastructures and IA building were constructed with a loan of PhP 1.5 million. Payment of this loan was started by the IA in 1987. The IA has been able to pay the annual amortization (PhP 320,000) to NIA on a regular basis. To date, the outstanding loan balance is PhP 37,000, which the IA plans to settle by end of 2009. The two key factors identified by the IA officers for achieving this success are: (i) the consistently good rice production outputs (4-4.5t/ha for both wet and dry seasons), and (ii) the high compliance rate of 100% on ISF payment by IA members and non-members 67. Limbaan CIS covers an irrigation service area of 72 ha (65 ha of rice and 7 ha of banana) in the municipality of New Corella, Davao del Norte province. It serves a total number of beneficiaries of 112 farmers, of whom 97 are IA members and 15 are non- members. Regular monthly meetings of IA BOD are held every last Wednesday of the month, and attended by 70-75% of IA officers. The same attendance rate of membership participation during the IA General Assembly has been reported. The most common agenda discussed in the meetings include: ISF collection, water delivery scheduling, canal maintenance, and complaints and other issues identified by the IA officers and members. 68. According to the IA President, the excess water from Limbaan CIS also serves 80 ha at the downstream which are under the LGU’s supervision. There appears to be a strong social relationship between Limbaan IA and the downstream farmers as manifested in their regular joint meeting every six months to discuss the water delivery scheduling. No water use conflicts between these two major water user groups have been noted by the IA President. 69. The good rice harvests during the wet and dry seasons have been favored by cropping intensity of 200%. Present net farm income for wet season is about PhP 40,000 while for dry season, it is about PhP 30,000. 70. The IA’s major concern is the need for concrete lining of the existing Left and Right Main Canals with a total length of 5.3 km to irrigate an additional potential area of 7-10 ha, reduce damage due to soil erosion, and therefore reduce O&M cost. The Left Main Canal is about four km long with only about 700 m lined with concrete. The Right Main Canal is entirely made of earth and is about 2.0 km. Limbaan river, which is the major water source of the CIS, has sufficient water supply to serve the entire service area even during the dry season. Drainage system has no problem.

EEN901-INC-REP-001-Rev. A 29 May 2009 20

71. The IA President has aired the reluctance of all farmers in the area to incur another debt (after full payment of the amortization), and indicated that they would prefer that the rehabilitation of the CIS be provided through a grant rather than as a loan. Hence, the IA is still undecided if it will participate in the proposed ISOEIP. It is therefore important that for the IA BOD to discuss this matter internally and to determine whether the members would like to include the Limbaan CIS in the proposed ISOEIP. 72. Upper Tuganay CIS. The team visited this CIS to familiarize itself on the present physical condition, land development, and the IA organizational status. The CIS has a total potential service area of 233 ha, and a firmed-up area of 203 ha, which is located in the municipality of Sto. Tomas in Davao del Norte province. Of the firmed-up area, 130 ha are planted to rice and 75 ha to banana. Based on the interview with three IA officers, there are 170 farmers within the service area (Note: this figure is not consistent with NIA Region XI Office’s latest 2009 listing of farmers in this CIS), 130 of them are IA members and 40 are non-members. The IA conducts monthly meeting, involving mainly the officers, to discuss the following topics: ISF collection, cropping pattern, water distribution, and siltation removal through the “dagyaw” tradition. At present, average rice yield is 4-5 t/ha/cropping. 73. The team inspected the canal system, which has a vertical shape lined with concrete, and with section base of 1.00 m and height of 1.20 m. The main farm ditch is made of earth, with trapezoidal section. The farmers’ main concern is the reservoir of the terruvian dam reported to be heavily silted. The team visited the dam and found that it is newly constructed or rehabilitated and its reservoir is not silted. The river water is slightly silted, which could be cleared through the collective effort of the IA members with possible support by NIA and/or LGU. The team also noted the conversion of irrigated lands from rice production to banana plantations, which confirmed the earlier information advanced by NIA Region XI Office staff during the initial briefing conducted on 27 April 2009. The team proposes that this CIS be excluded in the proposed ISOEIP. 74. Balagunan CIS. The team visited this CIS which is located in the municipality of Sto. Tomas in Davao del Notre province, and met with the former IA President to become familiar with the system facilities and service area. Based on the information gathered from the former IA President, the CIS has not functioned since 1992, and the entire service area (about 250 ha) has been converted from rice to banana production. The team proposes that this CIS be excluded in the proposed ISOEIP. 75. Sta. Lucia CIS. The team visited this CIS which is also located in the municipality of Sto.Tomas, and met with the former IA President (as the present President was not available at the time of the visit). The team found that about 74% (40 ha) of the total service area of 54 ha has been converted from rice to banana production. The farmers’ main concern is that the irrigation system is silted. When sections of the system were inspected, the team found that the silt deposit could be managed and removed by the farmers if they will perform their responsibility. The team proposes that this CIS be excluded in the proposed ISOEIP. 76. Amanan CIS. The team decided not to visit this CIS after learning that the concerned IA has informed NIA of its desire to be excluded in the proposed ISOEIP. 77. Gabuyan CIS. Due to potential security problems, the team was advised not to inspect the site. The team proposes to exclude this CIS in the core subprojects of the proposed ISOEP and include it in the list of potential non-core subprojects to be confirmed during the project implementation.

6. NISs and CISs Visited in Antique, Aklan and Iloilo (Region VI) 78. Sibalom-San Jose RIS. This system became operational in May 1934, and received its first major rehabilitation in January 1980 under the World Bank-funded National Irrigation Systems Improvement Project Phase II (NISIP II). It has a designed service area of 5,416 ha, but its present firmed-up area for irrigation is about 5,065 ha due to several reported physical

EEN901-INC-REP-001-Rev.A 29 May 2009 21 problems of the irrigation system, covering the municipalities of Patnongon, Sibalom, San Remigio, Belison, San Jose and Hamtic in Antique province. The major water source comes from Sibalom and Tipuluan rivers, with two dams and an intake designed to divert water (diversion capacity is about 7.0 cms) through diversion channel to irrigate the service areas. Presently, there are three main service areas within the system: the Proper area (4,235 ha), restoration (Extension I) area (830 ha), and Extension II area (50 ha). The restoration area is essentially part of the proper area but water cannot reach it due to lack of water supply and high conveyance losses resulting from canal damages. 79. During the assessment mission conducted by the team, it was learned from the NIA field staff that the irrigation system was severely damaged by Typhoon Frank which occurred in June 2008 and caused major damages to the entire Panay Island. Following are the field observations noted by the team: (i) Dam and Intake (a) the Nasuli dam is partially damaged - upstream of ogee, sluiceway and silt ejector outlet and intake are heavily silted (b) galvanised iron pipe railings at sluiceway tower and intake perimeter are dented and rusty, with detached joints due to flooding and filled up by debris; and (c) the discharge provided from the intake is too large for the existing diversion channel and structures. Erosion on both sides of the channel is observed due to runoff water from the hillside. There are no control gates at the turnouts for the Extension II area. (ii) Canals and Structures, Drainage System and Service Road (a) the main canal of the Proper area passes through the residential area, and garbage is thrown at the canal, causing clogging of the structures (b) left embankment of Lateral A experiences overtopping of water due to flood causing water to flow over the creek adjacent to the canal (c) the service road located at the right of Lateral A, including the service area, is also affected by the flood (d) siphon connecting the Proper Area to the Restoration (Extension I) area is silted; and (e) canals at the Restoration (Extension I) area are also silted, and erosions on both sides of the canals are observed. 80. In addition, the farmers are also concerned with dysfunctional farm ditches, due to siltation and man-made removal of ditches. Based on the site visit and discussions with NIA field staff and consultations with two farmers (the SSRIA President and a former barangay captain), the following potential solutions to the foregoing problems have been identified: (i) Dam (a) desilting of upstream of ogee, sluiceway and intake (b) installation of additional gates at the head of the intake to minimize siltation at the intake - at present, there are four openings at the head of the intake with only trash racks in place, and with the size of gate of 1.0 m x 1.0 m (actual size needs to be verified) (c) replacement of galvanised iron pipe railing at the sluiceway tower and in the perimeter of the intake; and

EEN901-INC-REP-001-Rev. A 29 May 2009 22

(d) construction of additional silt ejector located 150 m downstream of the intake. (ii) Proper Area (e) construction of concrete cover and manholes for the stretch of main canal that passes through the residential area (f) construction of drainage structures at Lateral A to drain flood from creek nearby (g) concreting of earth-lined canals to avoid siltation and conveyance losses; and (h) modification of existing canal structures. (iii) Restoration (Extension I) Area (a) modification of existing siphon connecting the Proper area and Restoration (Extension I) area (b) concreting of earth-lined canals; and (c) modification of existing structures. (iv) Extension II Area (a) redesigning of actual size required for the diversion channel (b) concreting of earth-lined canals (c) construction of drainage ditches at the left embankment of the channel with the corresponding drainage structures to drain runoff water from the hillside; and (d) installation of control gates at turnouts. 81. There are nine IAs and one federation of IAs within the system, but six IAs have been re-organized in 2007, with a total membership of 3,576 farmers. Women comprise about 13% (466 farmers) of the IA members. The present membership represents about 85% of the total number of 4,191 farmer-beneficiaries. The team learned that IDOs recruited by NIA under the ADB-funded Grain Sector Project (GSP) were shortly terminated in 2001 with the sudden cancellation of the project loan due to some policy issues. Earlier training programs provided by IDOs to IAs included basic leadership development course, system management, financial management and strategic planning. These capacity building activities were not sustained due to the removal of IDOs. Between 2001 and 2007, the IAs was left to operate by themselves. 82. Irrigation water delivery is undertaken through a 7-day rotation per IA. However, some upstream farmers are stealing water in the evening even if they are not scheduled to receive water supply. NIA currently addresses this problem by closing the Lateral Canal, and coordinating with LGU’s barangay tanods (local law enforcers) to prevent farmers from water stealing. The inability of the IAs and its federation to enforce its internal policies indicates a major organization weakness of these associations. 83. Rice is the main crop produced by farmers in the system. Farmers plant two crops of rice per year: wet season (May-August) and dry season (October-January). In 2008, some farmers participated in the Quick Turn Around (QTA) Program of the Department of Agri- culture (DA) to avail of subsidized inputs (seeds and fertilizers) for a third crop, which was done immediately after the wet season. Over the past five years, average rice yield was 5.24 t/ha during the wet season and 4.24 t/ha during the dry season. Under the QTA Program, about 1,120 ha were planted to rice and the average rice yield was 4.25 t/ha. Based on NIA’s

EEN901-INC-REP-001-Rev.A 29 May 2009 23

O&M performance records for the period 2004-2008, average annual cropping intensity (CI) was about 154%. All irrigated areas were equal to the benefited areas for the past 5-6 years, which shows that farmers have not experienced crop damages or lower yields (i.e., 40 cavans/ha or below) during that period. However, NIA’s records also show a reduction of irrigated area over the years, particularly during the wet season, partly implying the adverse consequence of deteriorating facilities on the irrigation efficiency of the system. Despite the relatively high crop yields and benefited areas, it is unclear why farmers have not regularly paid their ISF. The average ISF collection efficiency has remained low at an average of 57% per year for the period under review. This can be partly attributed to the non-participation of farmers and their IAs in ISF collection, as none of the nine IAs has an O&M contract (especially Type 2 contract - ISF collection) with NIA. A Stage two contract (for canal clearing covering 11.45 km of main canal and 6.85 km of lateral canals which encompass a service area of 714 ha) was awarded by NIA with the federation of IAs. 84. With the proposed rehabilitation of Sibalom-San Jose RIS, the incremental benefits are expected to be mainly derived from: (i) full irrigation of the total service area of 5,065 ha; (ii) increases in crop yields, particularly during the dry season; (iii) reduction in conveyance losses and O&M costs; (iv) increases in farm income and farmers’ capacity to pay ISF; and (v) provides incentives to the IAs to take management responsibilities of improved facilities from NIS. The rehabilitation, however, requires simultaneous capacity development of NIA’s remaining IDO and/or O&M staff, and the IA membership, on the whole spectrum of participatory organizational development including conflict resolution, system management and farm business development, financial management, and linkage building for resource mobilization, among others. 85. Aklan RIS. This system was constructed and became operational in March 1969, and rehabilitated in 2008. It has a total potential service area of 4,500 ha which encompasses six municipalities (see Annex B) in Aklan province. Presently, its firmed-up area is about 3,964 ha, and actual area irrigated for the past six years (2003-2008) is reported to be relatively lower. In 2008, for instance, the irrigated area was 3,516 ha during the wet season and 3,604 ha during the dry season, mainly because of the siltation problem affecting the two intake structures, main and lateral canals, among other facilities. The proposal for rehabilitation, as presented by Aklan IMO to the team, includes: (i) the construction of a diversion dam across the Aklan river; (ii) the concrete lining of existing earth-lined main and lateral canals; and (iii) the rehabilitation of water control structures and roads. Due to time constraints, the team has only visited some sections of the irrigation system and the west intake. Further investigation is needed to confirm the reported damages on canal structures and steel gates, absence of lifting rods at turnouts, high seepage rate along some lateral canals, etc. An informal interview with the President of a federation of the IAs was also conducted to get a general understanding on the current organizational status and activities of the IAs. 86. Some of the preliminary observations of the team on intake structures, and main and lateral canals are as follows: (i) the two existing intake structures which divert water from Aklan river. The west intake is located about four km downstream of the east intake. Both intakes are silted; and during dry season, the river bed elevation of Aklan river is higher than the existing canal bottom of west main canal and east main canal; and (ii) most of the canals are earth-lined and silted. 87. The existing 11 IAs were organized in the 1970s, and became federated in the early 2001. Because of the premature termination of IDOs in 2001 after withdrawal of loan support for the GSP, the IA organizational and capacity development has been stalled, leaving most of them in disarray. The team learned from the IA Federation President that reorganization of the IAs has started two years ago, but no substantive organizational

EEN901-INC-REP-001-Rev. A 29 May 2009 24

activities have been done to build the IA capacities at certain standards that would enable them to engage in water management, system O&M, ISF collection, agribusiness development and/or other livelihood activities. Over 8,800 farmers are reported to be producing rice in the service area, but there is no available record on the number of IA members. From the IA profiles for Region VI gathered from the Institutional Development Section at NIA Central Office, only six of the 11 IAs have successfully undergone the reorganization process with newly elected officers, and with complete registration documents approved by the Securities and Exchange Commission, including the certification of “active” organizational status. To date, only the IA officers have received training on basic leadership development. These reorganized six IAs have a combined membership of 975 farmers, indicating that majority of farmers in the area are still outside of the influence of the IAs. None of these IAs has an O&M contract with NIA. The IAs’ main concern is how to accelerate their capacity development that underscores value formation, cooperation and continuing education (or learning). 88. Rice is the main crop produced in the system. The IA Federation President raises two concerns on the present farming practices by most farmers: (i) the absence of a common cropping pattern and the increasing interest to plant three crops per year, resulting in exhaustion of the soil fertility from continued use of the land; and (ii) the inappropriate use of water as most farmers want to flood their rice fields. These, in turn, create doubts on the educational background, training and experience of O&M staff to provide advice to farmers on the proper and alternative farming practices such as the organic farming, system of rice intensification, integrated pest management, etc. These could also be the result of the demise of agricultural extension works in the country, and the limited capacity (i.e., human and material resources) of the LGUs to deliver the devolved agricultural support services. 89. Based on the O&M performance records of Aklan RIS for the past six years (2003- 2208), the cropping intensity posted an average of 174.3% per year and the benefited area has always been closer to the irrigated area. However, the irrigated area has not really been raised up at the level of the designed service area or even the firmed-up area during the period under review. Such difference in potential irrigable area appears as the major potential benefit of the proposed rehabilitation. Average rice yields are also found to be relatively low, which currently stand at four t/ha during the wet season and 3.5 t/ha during the dry season. The improvement in irrigation efficiency could provide water supply security for farmers to invest more on recommended farming practices and therefore contribute to increasing rice yields and farm incomes. All these potential benefits will trigger a social capital build up within the IAs to assume the management responsibilities of the improved irrigation facilities, while at the same time instill discipline among IA members to pay ISF on a regular basis. The current ISF collection efficiency is about 69%. Efforts to increase ISF collection efficiency cannot be resolved by rehabilitation of the irrigation system alone, but requires an equally important integral component on capacity development based on good practice. 90. Barotac Viejo RIS. This system is not included in the pre-selected NISs proposed for inclusion in the ISOEIP, but visited by the team in response to the recommendation of the NIA Region VI Office. Based on available information gathered from the system’s office in the municipality of Barotac Viejo, Iloilo province, the system was constructed during the period 1974-1976 and became operational in 1977. No major rehabilitation of the system was undertaken since 1977. It has a total potential service area of 2,232 ha and a firmed-up area of about 1,700 ha covering the municipalities of Barotac Viejo (1,009.8 ha) and Banate (696.2 ha) . Its main source of water supply is Barotac Viejo river, which is diverted by an existing dam to the service area through the main canal. Due to time constraints, the team had visited only a small portion of the service area, and some irrigation facilities and drainage canals. The major observations from the reconnaissance visit of the system are as follows: (i) most irrigation facilities are deteriorated

EEN901-INC-REP-001-Rev.A 29 May 2009 25

(ii) seepage and erosion of the side slopes of canals are common (iii) drainage canals are silted; and (iv) some of the service roads are not passable due to poor maintenance. 91. Based on the brief discussions with the engineer in-charge of the system, a feasibility study was done by NIA-SRIP for a construction of an impounding dam located upstream of the existing diversion dam. Such dam was designed to provide water supply for a potential area of 532 ha, and to regulate the water supply for the existing system. The team would try to secure a copy of the feasibility study report for review. From the brief visit, the team sees the need for concreting of earth-lined canals, desilting of drainage canals, and rehabilitation of service roads and canal structures. However, further investigation of the entire system is required during the feasibility study phase. 92. Available records show that there are 986 farmer-beneficiaries within the system, of whom 385 (39%) are members of the existing seven IAs and 601 are non-members. Most of these IAs are less active because of lack of the proper management by the IA officers. According to the only one contractual IDO, who also has been on his job for the past two years, four of the IAs have so far been reorganized (2 IAs in 2007 and two IAs in 2008) with newly elected IA officers. Because he is alone doing the organizing work, the reorganization of other three IAs could only be completed in two years (2009-2010). Overall, orientations and training on the functions, duties and responsibilities of the IA officers and members, including the required working committees, have been identified by the IDO to be of urgent necessity to initiate the proper establishment of the IA management protocols. The IDO has been quick to warn that his training and experience on IA organizational and capacity development are also wanting, and his services are uncertain due to the absence of an IDO position for Barotac Viejo RIS under the NIA Rationalization Plan. As indicated in Table 3, the staff deployment for this system after the Rationalization Plan implementation will consist of two O&M staff and no IDO. In the absence of an IDO position allocated for this system, IAs’ development will depend on the pooled 15 IDOs allocated for three relatively large NISs (Jalaur-Suague-Barotac Viejo RISs) in Iloilo province, and possibly on the two O&M staff allocated for Barotac Viejo RIS. 93. Presently, the O&M performance record of the system is not impressive. The current cropping intensity is 157%, indicating that the farmers could only irrigate about 57% of the firmed-up area during the dry season. This lack of water supply, particularly during the dry season, has been confirmed by the President of the LIBO IA and another women farmer who were briefly met by the team during the site visit. Average rice yields are also low - 3t/ha during the wet season, and 3.5 t/ha during the dry season. Consequently, the ISF collection is currently placed at 40%. The low rice yields could also be attributed to the fact that majority of the farmers, particularly in the LIBO IA’s service area of about 147 ha, are lessees who do not own the lands they till and pay a fixed land rent per ha to the landowners. Many of them also rely on borrowed money for farm inputs, which is to be repaid after harvest at a high interest rate of 10% per month. Some farmers could not also apply the recommended farming practices in terms of fertilizer usage and appropriate rice varieties due to lack of capital and reluctance to access credit from formal sources. 94. At the farm level, the LIBO IA President raised the following needs: (i) restoration of main farm ditches, (ii) rehabilitation of existing canals (including desilting) and service roads, (iii) capacity building on water use conflict resolution, (iv) marketing assistance, (v) and support for land development. These concerns have been reflected in the agenda covered in the regular monthly IA BOD meeting: water distribution, canal clearing, and problems on water stealing. 95. San Jose CIS. The data and information gathered for this CIS came mainly from NIA field personnel and the IA President as the team was not able to visit the system due to time constraints. This CIS was constructed and became operational in March 1976, and

EEN901-INC-REP-001-Rev. A 29 May 2009 26

undertook a minor rehabilitation (desilting of upstream of the existing dam and intake, and concreting of 1 km earth-lined main canal) in December 2003 with funding support from the CARP-ARISP II. The total construction and rehabilitation costs amounted to PhP 26,285,874.45, of which about 70% has been paid by the IA. According to the IA President, the last amortization was paid in December 2008, but this payment will be stopped due to the destruction of the whole system caused by a typhoon. The system is not operational at present. 96. In June 2008, the whole system collapsed due to the aftermath of Typhoon Frank. Canal embankments were eroded and all earth-lined canals have become silted. The proposal for rehabilitation includes: (i) relocation of upstream part of the main canal, (ii) concreting of earth-lined canals, and (iii) modification of existing structures and turnouts. The incremental benefits of rehabilitation are expected in terms of: (i) restoring the operation of the irrigation system; (ii) increasing cropping intensity to 200%, thereby extending irrigation benefits to the downstream areas; (iii) enhancing farm incomes of the farmers and their capacity to pay the ISF for amortization of the system; and (iv) reducing the O&M cost. More importantly, the rehabilitation will directly contribute to the government’s rural poverty alleviation and food security objectives. 97. Prior to the system collapse, the system could irrigate the designed service area of 220 ha during the wet season, and 90 ha during the dry season. Cropping intensity then was about 170%. Rice yields averaged to 2.5-3.0 t/ha during the wet season and 3.5 t/ha during the dry season. Presently, the farmers do not plant rice. NIA has recently the IA, with a reorientation on basic leadership development for IA officers. 98. La Serna CIS. This CIS was constructed and became operational in December 1997, and rehabilitated in January 2000. It has a service area of 100 ha located in the municipality of Nabas in Aklan province, but it is unable to irrigate the area because the water supply from Gibon river has changed its course upstream of the existing ogee dam. Presently, the irrigated area is 40 ha during the wet season and 30 ha during the dry season. Average rice yield is four t/ha for both wet and dry seasons. The CIS covered five barangays of the municipality of Nabas, but due to the present water supply condition, only the two upstream barangays were adequately served. 99. Based on a brief meeting with NIA field engineers and the IA President, the problems of the CIS are as follows: (i) Dam situation. No steel sluice gate was installed to sluice silt from upstream of the dam. Only wood planks have been placed, which are difficult to remove manually. (ii) Canalization. Most of the canals are earth-lined. Water supply cannot reach the irrigable area of 60 ha due to siltation and seepage. (iii) Inlet and outlet transitions of siphon at the main canal are scoured, and pipes are damaged, thus the irrigable area of 60 ha downstream of siphon has no water supply. 100. The proposal for rehabilitation includes: (i) installation of sluice gate; (ii) construction of embankment to close the opening of new river course upstream of the existing dam, and construction guide bank (gabions) to guide the water to the original course; (iii) concreting of the remaining earth-line canals; and (iv) construction of new siphon structure. This package of proposed civil works will require further investigation because the system was not visited by the team due to time constraints. The proposed rehabilitation will immediately restore the 60 ha in the downstream area. 101. In February 2008, NIA started the reactivation of the IA with the election of new IA officers. Recently, the IA officers have attended 16-week training on Farmer Field School (FFS) provided by the Department of Agriculture in cooperation with the LGU’s Municipal

EEN901-INC-REP-001-Rev.A 29 May 2009 27

Agricultural Office. There are a total number of 200 farmer-beneficiaries in the system, but only about 40 are active members of the IA. Membership recruitment is presently undertaken.

G. Subproject Selection 102. Based on the assessment mission , consultation meetings with key stakeholders (NIA and IAs), and review of related irrigation projects, the team prepared a set of proposed subproject selection criteria. Annex C shows the proposed selection criteria. The team intends to review these selection criteria with the NIA and ADB to seek comments and guidance for finalization. Using the initial criteria provided by ADB and the results of preliminary condition surveys and IA assessments of each of the proposed sub-projects, the team is proposing the following list of NISs an CISs to be included in the core subprojects of the ISOEIP with a total potential service area of 19,145 ha (excluding Aklan RIS) or 22,710 ha (excluding Mambusao RIS) and to be subject of the feasibility study under the PPTA: (i) Mindanao: (a) Libuganon Right NIS (b) Saug RIS (c) Semong CIS; and (d) Limbaan CIS. (ii) Visayas: (a) Sibalom-San Jose RIS (b) Aklan RIS or Mambusao RIS (c) San Jose CIS; and (d) Cabano CIS. 103. The prioritization classification of the above NISs is based solely on infrastructure condition and priority works required for rehabilitation. The prioritization has not considered institutional, social or environmental criteria. Further classification with respect to these criteria is necessary. IA status and operational capability may well delete several of the above NIS schemes. With respect to the prioritisation, Libuganon (Right) RIS has been prioritized with respect to the concerns of drainage and flooding. All beneficiaries; farmers, IAs and IMOs stressed their concerns as follows: (i) With the frequent flooding; (ii) The frequent overtopping of the levee banks (dikes) by rivers and streams, in particular the Libuganon River and the Tuganay Creek/River; (iii) The siltation of the natural drainage rivers, creeks and streams within the boundaries of the irrigation areas; (iv) The drainage backwater impact on the inundation period and drainage flows of and from the RIS areas of Libuganon Right RIS through the excessive siltation of the estuary and coastal region of the Libuganon and Tuganay Rivers and their distributaries; (v) The siltation of the irrigation canals; and (vi) The condition of structures, gates and canal profile.

EEN901-INC-REP-001-Rev. A 29 May 2009 28

104. Libuganon Right RIS, along with Lasang and Kipaliku RISs, lose production (range of severity is variable) on 1500 ha plus and an additional 400 ha (inundation - one crop per year), 800 ha and 400 ha respectively. These are areas suffering frequent yearly flooding and inundation. These areas are likely to become more productive if floods are controlled through drainage improvements and consideration of protection dikes (relative to river study findings). Improvements in production can be achieved through rehabilitation of the irrigation infrastructure; i.e. canal desilting and reshaping, canal lining, structure repairs and gate repair or replacement. However, the benefits from irrigation rehabilitation will not be realised if the following conditions are not addressed: (i) the natural drainage system, which acts as part of the scheme drainage, is not rehabilitated and upgraded (desilted, improved alignment) to reduce inundation and local flooding (ii) in addition, the “possible” need to increase river levee (dike) heights must be addressed through flood studies and needs (iii) flood heights to address dike overtopping and the time of inundation of the RIS areas; and (iv) the major rivers of Libuganon and Tuganay and their estuaries must be studied in order to assess and address solutions to the relationship of “drainage backwater” and “peak runoff” with respect to the situation and depth of siltation of the estuaries and coastal area. 105. These are the priorities, and if not addressed, the irrigation rehabilitation will have limited impact on increased yields and farmer incomes. Assistance with the so far ignored drainage works will have far greater impact on area yields and income. 106. The rehabilitation of irrigation infrastructure in Libuganon (Right) RIS is required; desilting of the Main Canal, desilting and clearing of the lateral canals, reshaping or re- construction of sections of the Main Canal, lining of some sections of the Main Canal, and repairs to structures and gates, but mainly gates. As well there is a need to desilt and clean the system’s constructed drains. 107. Saug RIS and Libuganon Left RIS are affected by flooding from the Saug River with in excess of an area of 1 500 ha with less than 100 ha of that area totally submerged in Saug RIS and a relatively small area affected in Libuganon Left RIS. The flooding impact is not as severe as in Libunganon Right RIS but the areas adjacent to the banks of the Saug River are frequently flooded; a combination of catchment runoff and downstream backwater. The Saug RIS does, however, have a large percentage of the irrigation infrastructure which is damaged or deteriorated. The Main Canal should be lined for the majority of its entire length as the soil type is not suitable for earth canal construction. The canal has slumped and eroded, and its cross-section dimensions are far greater than what is required for discharge capacity. Lateral canals are silted, overgrown with canal bank erosion and in need of repair. Structures are in need of repair, not necessarily replacement, although many need concrete repair. Gates and lifting mechanisms have not been maintained through greasing or have not been rust- proofed and painted regularly. This has resulted in the gates having to be repaired and in some cases replaced. 108. It is on the basis of the above description of the condition survey and the scope of work priorities that the two NISs have been priority listed. 109. Semong CIS and Limbaan CIS are selected for inclusion in the core subprojects in the Province of Davao del Norte. Each requires simple rehabilitation including the concrete lining of Main Canal - 1.7 km and 1.5 km, respectively. The exact length is not known but each serves the potential additional paddy fields of 30-50 hectares. The works are simple and the IA President and several Board members have advised that farmers are prepared to

EEN901-INC-REP-001-Rev.A 29 May 2009 29 commit to repayment of funds to be invested for rehabilitation works. This commitment will be verified during the feasibility study with respect to the decision of the IA General Assembly. 110. In the Visayas, the 2-3 NISs and two CISs have been prioritized based on the rapid assessment of the infrastructure condition and operational capacity of the IAs. Preliminary condition survey of these proposed subprojects will be conducted from 31 May to 10 June to finalize the core subprojects in this island. 111. For the final core subprojects for Region VI and Region XI, the feasibility study of each RIS inclusive of a detailed “Condition Survey” in a selected 15% of the RIS will be carried out by the team, following the completion of the TOR for the feasibility study and condition survey based on the findings of the preliminary condition survey. 112. In addition, the following NISs and CISs are proposed to be included in the non-core subprojects of the ISOEIP with a total potential service area of 20,369 ha (if including Mambusao RIS) or 23,934 ha (if including Aklan RIS). The feasibility study of these non-core subprojects will be done during the project implementation: (i) Mindanao: (a) Lasang RIS (b) Kipaliku RIS; (c) Libuganon Left RIS; and (d) Upper Saug NIP.

(ii) Visayas: (a) Aklan RIS or Mambusao RIS (b) Barotac Viejo RIS RIS; and (c) Panakuyan RIS. 113. Lasang and Kipaliku RIS have been prioritised with respect to the concerns of drainage and flooding. 114. As for other sector loan projects, such as the Southern Philippines Irrigation Sector Project (SPISP), other proposed NISs/CISs for inclusion in the non-core subprojects may be considered during the project implementation now that the proposed loan is likely to have been increased significantly and the likely that the project might be upgraded to a sector support one..

EEN901-INC-REP-001-Rev. A 29 May 2009 30

4. WORKPLAN

115. The present workplan covers the planned activities of the PPTA Team for the ISOEIP, TA 7141-PHI, during the period 23 May-20 October 2009. It should be noted that the workplan has been prepared with a view of being indicative, since changes, additional works, etc. might be required as the work progresses. 116. The following key factors and findings have been considered when preparing the workplan: (i) NIA possesses some data and information required for the feasibility study, but not all. Tthe number of NIA staff has already been reduced and it is difficult to obtain support from NIA staff in a number of key disciplines, such as institutions, environment, social factors, economics, physical irrigation structures, etc. It is therefore anticipated that more surveys and studies might be required for the feasibility study with possible implications for the timing and final outputs, unless these will be taken car of during project implementation.. (ii) The requested support in Davao del Norte province seems mainly related to drainage and flood protection works. Special attention will therefore be given to whether it is feasible to provide the support, since the land will remain lowland. Moreover, the proposed works will in some cases result in a number of negative impacts of which some are foreseen as follows; serious changes in the water course, water basin, effects on other water users, environment, micro-climate, soil structure, land and others. A regional (China, Vietnam, Laos, Cambodia, Thailand, Bangladesh, India and Sri Lanka) tendency shows that some low lying areas of land will remain flooded, etc. regardless of how many diversions, drainage structures and dikes are constructed. Attempts to divert natural and existing water courses might have adverse long and short term effects. In some cases, a change in cropping pattern, cropping calendar and/or the entire farming system (agri-aqua-semisilvi (including lowland and coastal forestry) and pastoral-based) might be more feasible and to be recommended. (iii) The proposed support to existing NISs in Antique and Aklan provinces have been expanded to also cover other potential subprojects in Capiz and Iloilo provinces. This is partly due to the fact that only two NISs were included in the pre-selected systems proposed to the PPTA team, and additional proposed subprojects require more information and data than so far have been provided. 117. These three key factors will be further considered when undertaking the feasibility study.

H. Specific areas 118. As stated in Section 3 of this Inception Report, a number of more specific findings were done during the inception phase. A brief summary is provided below: (i) Institutional development. The IAs visited have been very weak institutionally. Several have not been functioning for a very long period, and most are not very active It also appears that NIA is no longer holding the same technical and managerial capacity, including capacity building programs for the IAs as in the past. This is, indeed, problematic. While this TA can select some irrigation schemes to become rehabilitated and/or improved and at the same time outline and propose capacity building programs, it will not be possible to ensure viability and sustainability of these unless significant

EEN901-INC-REP-001-Rev.A 29 May 2009 31

additional measures are adopted. Work with LGUs to diagnose and assess possible future cooperation patterns will also need to be undertaken. (ii) Physical infrastructure (dams, intakes, canals, other irrigation structures and drainage structures and systems) is in most cases in a poor shape and has not been rehabilitated or only after 32-46 years of operation. Consequently the condition is generally poor and several irrigation structures are either not in place any longer, or are not operational. Special attention will be given determine needed infrastructure in relationship to costs, institutional aspects, and other development paradigms like food, social, economic, institutional, health, educational, legal, climatic and environmental dimensions. (iii) It appears that formal rural credit structures are not available in the places visited. Many members of the IAs have to accept loans from local money lenders with a monthly interest rate of 10% without collateral. Although rural credit and finance is not an activity under this PPTA, the team will undertake a review and present specific recommendations, since absence of reasonable credit schemes will work against the overall project objectives of improving rural livelihoods, food security and poverty reduction. (iv) It has also been identified that significant areas of land mainly developed for cultivation of rice gradually is being turned into land for banana production by international commercial companies. The team finds that this apparent widespread tendency needs special attention from political level, since the present GoP priorities and programs aiming at providing self-sufficiency in rice, poverty reduction and food security might not be addressed and consequently attained. (v) Comprehensive and detailed studies and surveys are required to determine land and water use, natural resource management, river basin management, farming systems, changes in cropping pattern and calendar, and alternative land use. Institutional, social, environmental, micro-climate, soil, rural several other rural development dimensions will be addressed during the feasibility study. (vi) The team has also noted that the ToR included in the contract with KBR includes review of watershed areas, including development of watershed management plans etc. The team will address this issue as well, where required, although not specifically mentioned in the TORs of the individual specialists.

1. Outline of activities 119. The following is a brief presentation of the major activities to be undertaken for the feasibility study by the PPTA team: (i) Prepare an institutional development plan covering IAs, NIA, LGUs and other local NGOs and POs addressing the major institutional issues encountered: participation, interest, repayment, IMT, user O&M, willingness to pay parts of the project costs, develop a mechanism for cost recovery, fees, water distribution, active, legal aspects, water distribution, IA and NIA training needs, LGU involvement and contributions, capacity building of NIA, (ii) Prepare plans for tertiary development of relevant areas considering; climate, soils condition, present land use and classification, extent of agricultural mechanization, farmer’s capacity and capability, irrigation and drainage activities, agricultural inputs, input supply, storage, harvesting, post harvest measures, marketing, transportation, rural finance, extension services etc.

EEN901-INC-REP-001-Rev. A 29 May 2009 32

Where necessary, prepare topographic survey, land use survey and soil survey, (iii) Prepare a strategy and plan for rural and agricultural development, including extension, rural finance and other needed services and activities; (iv) Prepare irrigation proposals and plans for the included subprojects considering the following factors, among others, water requirement and availability, costs, impacts on other water users, possible conflicting interests in the river basin, including a plan for water allocations where necessary. Undertake a review of the existing condition of irrigation structures. Develop a drainage plan, if required. Apply modern irrigation modernization concepts like the MASSCOTE approach. Conduct necessary hydrological, hydraulic, meteorological, design flows, topographic, and geological surveys in preparation of the irrigation plans and proposals (v) Conduct economic analyses and a financial plan, including assessment of the financial viability and sustainability for subprojects. The economic analyses will follow ADB’s Guidelines for Economic Analysis of Projects; (vi) As part of the institutional development, tertiary development plans and irrigation proposals, develop an IMT operation and maintenance strategy and plan, including pricing of irrigation service fees. (vii) Undertake an in-depth poverty and social analysis including participation, gender and development, social safeguards, and other social risks and vulnerabilities in accordance with ADB handbooks and guidelines as eel as national policies and laws. Develop a gender action plan. Develop subproject baseline socio-economics and agricultural performance data, including strengthening of NIAs monitoring and evaluation systems for performance and impacts of this project. (viii) Undertake an in-depth environmental examination of possible negative and unintended impacts of project interventions by applying GoP and ADB handbooks, policies and guidelines. (ix) Where necessary, analyses watershed management needs for the project interventions and draw-up watershed management plans if required.

EEN901-INC-REP-001-Rev.A 29 May 2009 33

5. SPECIAL ISSUES ON PPTA IMPLEMENTATION

120. The following are some special implementation issues the PPTA team has identified, and recommendations for solutions made at this stage: (i) It is envisaged that the inputs of the international economist and DTL are too short. The international economist should be extended with 1 pm and the DTL with 1.5 pm. The present work of the economist is unlikely to be attainable within the presently allocated input of 2 pm. The incumbent will in particular need more time for the financial and economic analysis and to prepare the inputs to match NIAs and ADB’s requirements. The DTL/Capacity and Institutional Development Specialist is holding specific managerial responsibilities, like day to day management of the team, besides his technical responsibilities, and needs to be extended for almost the entire duration of the PPTA in order to complete his work with day-to-day management. He will also need to be fully involved in the preparation of the Mid Term, Draft Final and Final Report. Formalisation of the support of the Project Resource Specialist is sought with an extension of input for a further 3pm to assist the TA management with liaison with NIA, DA, NEDA, DENR and others. He is also possessing the full background and details to the ISOEIP, including the individual sub-projects and is therefore an irreplaceable resource assest now that NIA has made several people in the field and regional level redundant. . Additional funding required: International Economist 1 month @USD25,700 USD25,700 DTL/ Institutional and Capacity Development Specialist 1.5 months @USD5,500 USD8,250 Project Support Resource 3.7 months @USD3,000 USD 11,100 TOTAL USD45,050

(ii) The amount budgeted for local air transportation does not allow the team the flexibility required to perform necessary field work. It is estimated that a further allowance of USD 32,000 is required to cover planned activities. (iii) NIA has so far been able to provide transport in the provinces. However, it is envisaged that this will no longer be possible when a full team is fielded, since each PPTA team member is very likely to journey in different directions every working day hence requiring 7-12 4WD vehicles. The PPTA therefore strongly recommends that additional funds are provided to enable the team to hire vehicles immediately in the provinces should this be required. It is likewise recommended that sufficient funds are provided to the team to enable travel in Manila, which has so far been by taxi and paid by each team member. It is estimated that a total amount of US$ 70 x 40days = US$ 2,800 be required in the provinces and US$ 7 x 150 times = US$ 1,050 be required in Manila. Total US$ 3,850. (iv) The sub-contracting of surveys and studies are in progress and details are expected to be available during week 6; (v) It is suggested that the funds allocated for workshops also be availed for formal provincial dinners and lunches hosted by the team in the provinces in connection with key workshops. .

EEN901-INC-REP-001-Rev. A 29 May 2009 34

(vi) It is all in all found that the Feasibility Study is more complicated than anticipated and that parts of the feasibility studies for some subprojects could take longer than planned due to the difficulty in identifying and enumerating the necessary data and information. The sub-projects have therefore been divided into two groups: eight core sub-projects, which will be included in the feasibillity study and seven non core-projects, which should be covered by feasibility studies later and/or during project implementation. In addition, more non core-subprojects might be added later since the TAs have been requested to identify and included more sub-proejcst now that the loan has been increased to US$ 100 mill and likely to hold sector status.

(vii) The team would like to pass the final remark that although the PPTA is one step in the right direction, it is evident that massive capacity and capability programs are required for NIA staff and the IAs, and perhaps even a different structure and set-up to meet the opportunities and challenges of 2010 and ahead. Such might also include a closer cooperation with other Government and non-Government entities, and in particular LGUs

EEN901-INC-REP-001-Rev.A 29 May 2009 35

Annex A

List of Persons Met Name Organization Position/Occupation A. Metro Manila - 21 April to – 2009 Ian Makin ADB Senior Water Resources Management Specialist Kenichi Adachi ADB Water Resources Management Specialist Geraldine Grace Reside ADB Assistant Project Analyst Engr. Antonio Galvez NIA Central Office Acting Deputy Administrator for Engineering and Operations Sector Engr. Milo Landicho NIA Central Office Acting Manager, Project Planning Division Engr. Gregorio Dumandan NIA Central Office Acting Manager, Operations Department Engr. Renato Gamboa NIA Central Office Acting Manager, Institutional Development Section Luzviminda Rasos NIA-PDD Central Office Agriculturist Aida NIA-PDD Central Office Economist

B. Davao City and Davao del Norte - 26 to 30 April 2009; 15 to 21 May 2009 Engr. Felix Razo NIA Region XI Office Regional Irrigation Manager Engr. Encarnacion Soriano NIA Region XI Office Manager, Engg & Equipment Division Engr. Alejandro Alberca NIA Region XI Office and Acting Division Manager and Davao del Norte IMO Concurrent IMO Engr. Maribeth Malinao NIA Region XI Office Senior Engineer A, Planning Section Engr. Bonifacio Ysalina NIA-Saug River ISO Irrigation Superintendent Jose Cabra Katipunan-Semong CIS IA IA President Jose Villapaz Upper Saug NIP Farmer Reynaldo Tabia Limbaan CIS IA IA President Brigeda Cudal Davao Del Norte Provincial Provincial Planning and Development Government Coordinator Engr. Edwin Chavez NIA-LALIK RIS Asst. Irrigation Superintendent/Asst. IMO Renato Cosmod NIA-LALIK RIS Agriculturist A, and Head, Institutional Development Engr.Larry Franada IMO Davao del Norte Engineer A Osmenio Antonio Libuganon RIS Watermaster Saturnino Simbajon Jr. Libuganon Right RIS IA Federation President Ernesto Villamucho Pawas-Dujali IA President

EEN901-INC-REP-001-Rev. A 29 May 2009 36

Name Organization Position/Occupation Pedro Lorca Balia Balisong IA President Arman Lozarita BEDUCAS IA President Alfredo Gretos SICA IA President Eduardo Bernardas DITC IA Chairman Osmenio Antonio Jr LICF IA Chairman

Aniceto Darwin GISA - Upper Tuganay CIS President Liberato Flaviano Zone Leader Virgilio Camba Zone Leader Crisostomo Magallanes BISFA - Balagunan CIS Former President and IA member Ananias Acosta FISAS - Sta Lucia CIS Former President and IA member Virgilio Yuson LIA - Limbaan CIS Member, IA BOD Dominador Uraes Member, IA BOD Glynn Nabua Secretary Meriam Laurente Treasurer Isidro Lacorte LAMIA, Kipaliku RIS President Danilo Montes KATILUNIA, Kipaliku RIS President Roberto Jungco TISANIA, Kipaliku RIS President Bonifacio Blaza TUCHIA, Lasang RIS President Gina Ceballos TUCLIA, Lasang RIS President Romeo Ingco LIA, Lasang RIS President Alexander Alcordo QUENNSODIA, Lasang President RIS Ruben Galagala NIA WRFT Eduardo Ramos NIA WRFT Federico Mina NIA WRFT Ellefredo Cui NIA WRFT Feliciano Bago Lasang RIS Gatekeeper Francisco Amoguis Lasang RIS Gatekeeper C. Iloilo, Antique and Aklan - 4 to 8 May 2009 Engr. Edilberto Lomigo NIA Region VI Office Regional Irrigation Manager Engr. Florencio Coronado NIA Region VI Office Engineering Div. Manager Engr. Antonio Lamzon NIA Region VI Office Engr. Jose Oredina Antique IMO Provincial IMO/Concurrent IS Engr. Andres Bonie Tuala Antique IMO Acting Senior Engineer A Engr. Julito Pamiroyan Antique IMO Senior IDO Engr. Randy Alipis Antique IMO Planning Engineer Bernardo Ragodo Sibalom- San Jose RIS IA IA President Perfecto Ragodo Sibalom- San Jose RIS IA Former Barangay Captain, and IA

EEN901-INC-REP-001-Rev.A 29 May 2009 37

Name Organization Position/Occupation member Engr. Rizalo Concepcion Aklan IMO OIC-IMO and IS, Aklan RIS Engr. Wilson Rey Aklan IMO Asst. PIE Teodulfo Miralles La Serna CIS IA IA President Xxxxxxxxxxxxxx San Jose CIS IA IA President Rene Enriquez Aklan RIS IA Federation IA Federation President and Aklan PARRCOM Chairman Engr. Edgar Soldevilla Barotc Viejo ISO NIA In-Charge of Barotac Viejo RIS Generoso Baseya LIBO IA IA President Rica Balboa LIBO IA IA Member

EEN901-INC-REP-001-Rev. A 29 May 2009 ANNEX B

PROFILE OF PROPOSED SUBPROJECT

Name : Barotac Viejo River Irrigation System (BVRIS) Layout map not available. Location : a) Major Island - Visayas b) Province - Iloilo c) Municipalities - Barotac Viejo, Banate

Year System Construction Started : 1974 Year System Construction Completed : 1976 Year System Became Operational : 1977 Year System Rehabilitated : None

Number of remaining NIA staff : 3 Designations of NIA staff : 1 In-charge : 1 IDO : 1 Clerk

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 2,232 1. Total number of farmer-beneficiaries 986 2. Total firmed-up area (ha) 1,700 2. Number of IAs 7 3. Source of water supply Barotac Viejo river 3. Number of IA members 385 2 4. Catchment area (km ) 4. Number of TSAGs 35 5. Type of dam Diversion dam 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 16.4 y Type 1 - canal clearing None 6.2 Lateral canal 22.6 y Type 2 - ISF collection None 6.3 Sub-lateral canal 11.2 y Type 1& 2 None 7. Number of canal structures y Type 3 - full management transfer None 7.1 Headgates 9 Financial Aspects 7.2 Road/thresher crossings 86 1. Average farm size (ha) 1.5 7.3 Siphons 15 2. Crops planted (ha) 7.4 Flumes 17 y Rice 1,226 7.5 Bullcart crossings 0 - Wet crop 7.6 Check structures 3 - Dry crop 7.7 End checks 2 3. Average yield (ton/ha) 8. Number of turnouts 128 y Rice 9. Length of drainage canal (km) 15.0 - Wet crop 3.0 10. Number of drainage structures 55 - Dry crop 3.5 11. Length of service & access roads 34.6 4. Cropping intensity (%) 157 12. Number of measuring device 14 5. ISF collection efficiency (%) 40 13. Number of water master’s field office 3 14. Number of gatekeeper’s quarter 1

Major Field Observations 1. Technical/management problems: See text. 2. Institutional problems: Lack of NIA’s personnel to reorganize IA and build IA capacity in IMT with reduction in number of staff from the original staffing pattern of 12 to the present 3. The IDO also lacks training/experience on IA capacity building to undertake sustainable IMT. Most IAs were inactive for the past 5-6 years; reorganization/reactivation of 4 IAs has just started in 2007 with mainly the officers receiving re/orientation and training on basic leadership. Water user conflicts arise from weak NIA and IA capacity to manage water delivery (depriving tail-end farmers), and enhance user compliance to water delivery schedules and cropping calendar, particularly during water supply shortage in the dry season.

Majority of farmers are lessees, who pay fixed rental rate per ha to landowners, making them vulnerable to changing priorities and decisions of landowners. 3. Financial problems: Lack of capital is a key constraint to many farmers to carry out proper land preparation and apply recommended farming practices, especially fertilizer usage. EEN901-INC-REP-001-Rev. Many farmers resort to A credit for crop production, mostly derived from traders who impose a high interest rate of 10% per month on 29 May loaned2009 money. 4. Environmental problems: Illegal cutting of trees in the watershed area, and quarrying in the downstream of Barotac Viejo dam. PROFILE OF PROPOSED SUBPROJECT

Name : Sibalom-San Jose River Irrigation System (SSRIS) Layout map not available. Location : a) Major Island - Visayas b) Province - Antique c) Municipalities - Hamtic, Patnongon, Sibalom, San Jose, San Remigio, Belison Year System Construction Started : Year System Construction Completed : Year System Became Operational : 1934 Year System Rehabilitated : 1980 (NISIP II)

Number of remaining NIA staff : Designations of NIA staff : :

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 5,416 1. Total number of farmer-beneficiaries 4,191 2. Total firmed-up area (ha) 5,065 2. Number of IAs 9 3. Source of water supply Tipuluan & Sibalom rivers 3. Number of IA members 3,576 2 4. Catchment area (km ) 5.7 4. Number of TSAGs 102 5. Type of diversion Ogee and intake 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 24.5 y Type 1 - canal clearing None 6.2 Lateral canal 75.8 y Type 2 - ISF collection None 6.3 Sub-lateral canal - y Type 1& 2 None 7. Number of canal structures y Type 3 - full management transfer None 7.1 Headgates 13 Financial Aspects 7.2 Road/thresher crossings 31 1. Average farm size (ha) 1.2 7.3 Siphons 9 2. Crops planted (ha), Year 2008 7.4 Flumes 6 y Rice 7.5 Bullcart crossings 52 - Wet crop 4,200 7.6 Check structures 50 - Dry crop 3,307 7.7 End checks 16 3. Average yield (ton/ha), Year 2008 8. Number of turnouts 204 y Rice 9. Length of drainage canal (km) - - Wet crop 4.4 10. Number of drainage structures 16 - Dry crop 3.9 11. Length of service & access roads 66.6 4. Cropping intensity (%), for CY 2008 148 12. Number of measuring device - 5. ISF collection efficiency (%), for CY 2008 93 13. Number of water master’s field office - 14. Number of gatekeeper’s quarter -

Major Field Observations 1. Technical/management problems: Increased silt on natural drainage; dysfunctional or loss of farm ditches due to silt and removal by farmers; unequal water distribution due to illegal water diversion by upstream farmers. Lack of technical capacity on sustainable O&M by farmers and their IAs. 2. Institutional problems: Organizational and capacity development of IAs essentially stopped with termination of IDO services due to cancellation of loans for Grains Sector Project (GSDP) in 2001; reorganization of IAs has started in July 2007 which focused mainly on election of IA officers and reactivation of regular IA-BOD meetings. Majority of the original IA members, and the farmers in general, have not been reached by reactivated IAs to enlist membership and participate in IA activities. Weak enforcement capacity of NIA and IA to secure compliance to policies on water delivery schedule, with recurrent illegal water diversion by upstream water users during dry season. 3. Financial problems: Lack of capital is a key constraint to many farmers to apply recommended farming practices, especially fertilizer inputs. 4. Environmental problems: Destruction/denudation of the watersheds of major water sources due to intensification of shifting cultivation in upland areas. EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Aklan River Irrigation System (ARIS) Layout map not available. Location : a) Major Island - Visayas b) Province - Aklan c) Municipalities - Banga, New Washington, Lezo, Kalibo, Numancia, Makato Year System Construction Started : Year System Construction Completed : 1969 Year System Became Operational : 1969 Year System Rehabilitated : 2008

Number of remaining NIA staff : Designations of NIA staff : :

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 4,510 1. Total number of farmer-beneficiaries 8,845 2. Total firmed-up area (ha) 3,963 2. Number of IAs 11 3. Source of water supply Aklan river 3. Number of IA members 2 4. Catchment area (km ) 808 4. Number of TSAGs 5. Type of diversion Intake 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 27.5 y Type 1 - canal clearing None 6.2 Lateral canal 47.0 y Type 2 - ISF collection None 6.3 Sub-lateral canal - y Type 1& 2 None 7. Number of canal structures y Type 3 - full management transfer None 7.1 Headgates 18 Financial Aspects 7.2 Road/thresher crossings 72 1. Average farm size (ha) 0.44 7.3 Siphons 12 2. Crops planted (ha), Year 2008 7.4 Flumes - y Rice 7.5 Bullcart crossings - - Wet crop 3,516 7.6 Check structures 13 - Dry crop 3,604 7.7 End checks 19 3. Average yield (ton/ha), Year 2008 8. Number of turnouts 142 y Rice 9. Length of drainage canal (km) - - Wet crop 4.0 10. Number of drainage structures 11 - Dry crop 3.5 11. Length of service & access roads 62.3 4. Cropping intensity (%), Year 2008 174 12. Number of measuring device - 5. ISF collection efficiency (%), Year 2008 69 13. Number of water master’s field office - 14. Number of gatekeeper’s quarter -

Major Field Observations 1. Technical/management problems: Inappropriate use of irrigation water, resulting in “flooded water” on farms, due to lack of farmers’ knowledge/skills on irrigated agriculture, which is aggravated by lack of agricultural extension services. Consequently, farmers are unable to control increasing incidence of pests (rats) and diseases (“tungro”, rice bug), and adapt to changing rainfall patterns and increasing temperatures. Lack of technical capacity on sustainable O&M by farmers and their IAs. 2. Institutional problems: Organizational and capacity development of As halted by termination of IDO services due to cancellation of loans for Grains Sector Project (GSP) in 2001; reorganization of IAs has started in July 2007 which focused mainly on election of IA officers and reactivation of regular IA-BOD meetings. IA Federation President has observed that the lack of education and value formation among farmers/IA members contributes to weak cooperation and low compliance with IA policies on water delivery schedules and cropping calendar. 3. Financial problems: Lack of capital is a key constraint to many farmers to apply recommended farming practices, especially fertilizer inputs. y Access to capital is confined to traders and informal lenders who impose a high interest rate of 10% per month, etc. 4. Environmental problems: Intensive gravel and sand mining in Aklan river below the intake of ARIS, which contributes to lowering of river bed and results in EEN901-INC-REP-001-Rev.reduction in amount of A water diverted to concrete diversion channel. 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : San Jose Communal Irrigation System (SJCIS) Layout map not available. Location : a) Major Island - Visayas b) Province - Aklan c) Municipality - Ibajay

Year System Construction Started : 1975 Year System Construction Completed : 1975 Year System Became Operational : 1976 Year System Rehabilitated : 2003 (CARP-ARISP II)

Number of remaining NIA staff : Designations of NIA staff : : :

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 220 1. Total number of farmer-beneficiaries 292 2. Total firmed-up area (ha) 220 2. Number of IA 1 3. Source of water supply Ibajay river 3. Number of IA members 292 2 4. Catchment area (km ) 233 4. Number of TSAGs/FIGs/sectors 4 5. Type of diversion Trapezoidal dam 5. Year system turned over to IA 6. Length of irrigation canals (km) 6. Number of functional IA committees None 6.1 Main canal 6.8 6.2 Lateral canal 3.5 Financial Aspects 6.3 Sub-lateral canal - 1. Average farm size (ha) 0.75 7. Number of canal structures 2. Crops planted (ha), Year 2007 7.1 Headgates y Rice 7.2 Road/thresher crossings - Wet crop 220 7.3 Siphons - Dry crop 90 7.4 Flumes 3. Average yield (ton/ha), Year 2007 7.5 Bullcart crossings y Rice 7.6 Check structures - Wet crop 2.5-3.0 7.7 End checks - Dry crop 3.5 8. Number of turnouts 4. Cropping intensity (%) 170 9. Length of drainage canal (km) 5. Total amount of amortization (Pesos) 10. Number of drainage structures 6. Total amount of amortization paid (Pesos) 11. Length of service & access roads 7. Agreed annual amortization (Pesos) 52,000 12. Number of measuring device 8. Amortization period (Number of years) 9. Collection efficiency of amortization (%)

Major Field Observations

1. Technical/management problems: Silted canals Illegal checking of water, particularly in Sector 1 (upstream area)

2. Institutional problems:

Weak IA capacity to enforce policies on water delivery and distribution schedule and uniform cropping calendar. Inadequate training of IA officers and members on sustainable O&M; and no clear knowledge on NIA’s new IMT policy/guidelines. No IA plans on system O&M and capacity development; IA President is unclear about the capacity needs of the association.

3. Financial problems: Lack of capital or lack of access to it by farmers is partly addressed by the presence of a local multipurpose cooperative, which provides lending, among other services, to farmer-members who also belong to San Jose CIS IA. y Collection and/or payment of amortization by IA members has temporarily stopped due to severe impact of Typhoon Frank in Jume 2008 that caused total damage/loss of their crops and other properties. 4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

ANNEX B

PROFILE OF PROPOSED SUBPROJECT

Name : Libuganon Right River Irrigation System (LRIS)

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipalities - Carmen, Dujali, Kapalong, Sto. Tomas Year System Construction Started : 1977 Year System Construction Completed : 1989 Year System Became Operational : 1990 Year System Rehabilitated : 1993-1995

Number of remaining NIA staff : 7 Designations of NIA staff : WRFT-6, WRFO-1

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 10,500 1. Total number of farmer-beneficiaries 5,272 2. Total firmed-up area (ha) 7,500 2. Number of IAs 45 3. Source of water supply Libuganon river 3. Number of IA members 5,272 2 4. Catchment area (km ) 9,497.4 4. Number of TSAGs 262 5. Type of dam Diversion dam 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 33.5 y Type 1 - canal clearing 45 6.2 Lateral canal 48.6 y Type 2 - ISF collection 45 6.3 Sub-lateral canal 30.0 y Type 1& 21 45 7. Number of canal structures y Type 3 - full management transfer 7.1 Headgates 21 Financial Aspects 7.2 Road/thresher crossings 111 1. Average farm size (ha) 1.5 7.3 Siphons 6 2. Crops planted (ha) 7.4 Flumes 31 y Rice 7.5 Bullcart crossings - - Wet crop 6,205.5 7.6 Check structures - - Dry crop 6,205.5 7.7 End checks - y Banana 1,098.5 8. Number of turnouts 176 3. Average yield (ton/ha) 9. Length of drainage canal (km) 135 y Rice 10. Number of drainage structures 31 - Wet crop 4.03 11. Length of service & access roads 143.6 - Dry crop 3.81 12. Number of measuring device 9 4. Cropping intensity (%) 20071 13. Number of water master’s field office 8 5. ISF collection efficiency (%) 117.36 14. Number of gatekeeper’s quarter 1 Note: 1Latest Type 1&2 contracts issued in 2009.

Major Field Observations 1. Technical/management problems: Heavy siltation of unlined canals is observed due to side slope erosion. Some service and access roads are damaged, and not accessible due to overflowing of runoff water caused by flood. A potential irrigable area of 800 ha is located at mid-portion of the service area, but it is a flood plain area where Barobo creek passes through it. Overflowing of the creek causes flood to this area, thus prohibiting planting of crops at present. Briefing with NIA Region XI and Davao del Norte IMO identifies problems on silted upstream area of Libuganon dam; scouring of the downstream apron and the protection dike; siltation of unlined Main and Lateral Canals; damaged lined canals, structures and

gates; damaged service and access roads and inaccessibility of some roads due to flooding; siltation of existing drainage system; and damaged on-farm facilities. All of these predefined technical problems require further walk through for detailed investigation. 2. Institutional problems: Lack of canal clearing/maintenance is observed, indicating weak IA capacity and membership participation in O&M activities despite the existence of Type 1&2 contracts with 45 IAs. IA organizational unity and strength needs assessment as preliminary observation shows strong leadership of agency staff. 3. Financial problems: EEN901-INC-REP-001-Rev. A 294. May Environmental 2009 problems:

PROFILE OF PROPOSED SUBPROJECT

Name : Libuganon Left River Irrigation System

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipalities - Asuncion, Kapalong

Year System Construction Started : 1977 Year System Construction Completed : 1990 Year System Became Operational : 1990 Year System Rehabilitated : None

Number of remaining NIA staff : 2 Designations of NIA staff : WRFT-1, WRFO-1

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 10,090 1. Total number of farmer-beneficiaries 420 2. Total firmed-up area (ha) 744.70 2. Number of IAs 2 3. Source of water supply Libuganon river 3. Number of IA members 2 4. Catchment area (km ) 9,497.4 4. Number of TSAGs 5. Type of dam Ogee 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 12.5 y Type 1 - canal clearing 2 6.2 Lateral canal & Sub-Lat 7.3 y Type 2 - ISF collection 2 y Type 1& 21 7. Number of canal structures y Type 3 - full management transfer 7.1 Headgates No data Financial Aspects 7.2 Road/thresher crossings No data 1. Average farm size (ha) 1.08 7.3 Siphons No data 2. Crops planted (ha) 7.4 Flumes No data y Rice 7.5 Bullcart crossings No data - Wet crop 7.6 Check structures No data - Dry crop 7.7 End checks No data y Banana 8. Number of turnouts 41 3. Average yield (ton/ha) 9. Length of drainage canal (km) y Rice 10. Number of drainage structures - Wet crop 11. Length of service & access roads 19.18 - Dry crop 12. Number of measuring device 4. Cropping intensity (%) 13. Number of water master’s field office 5. ISF collection efficiency (%) 14. Number of gatekeeper’s quarter 1 Note: 1Latest Type 1&2 contracts issued in 2008 for only 1 IA.

Major Field Observations

1. Technical/management problems: Lifting mechanism of sluice gates has deteriorated. Silted U/S of dam forming an island resulting to blocking the flow of water to the intake.

Canals are silted and oversized.

2. Institutional problems:

Recently, O&M contracts with IAs were not renewed in 2009, indicating that most IAs faced certain organizational problems to pursue Types 1&2 contracts. IA organizational unity and strength needs assessment as preliminary observation shows strong leadership of agency staff. 3. Financial problems: 4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Saug River Irrigation System (SRIS)

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipalities - Asuncion, New Corella, 7 Tagum City, Kapalong Year System Construction Started : 1974 Year System Construction Completed : 1980 Year System Became Operational : 1980 Year System Rehabilitated : 1996-2005

Number of remaining NIA staff : 3 Designations of NIA staff : WRFT-2, WRFO-1

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 7,090 1. Total number of farmer-beneficiaries 3,441 2. Total firmed-up area (ha) 4,140.3 2. Number of IAs 17 3. Source of water supply Saug& Madgao; 3. Number of IA members 2,237 rivers 4. Number of TSAGs 2 4. Catchment area (km ) 660 5. IA participation in system management 5. Type of dam Ogee Type of contract 6. Length of irrigation canals (km) y Type 1 - canal clearing 15 6.1 Main canal 25 y Type 2 - ISF collection 14 6.2 Lateral canal & Sub-Lateral 70 y Type 1& 21 y Type 3 - full management transfer 7. Number of canal structures Financial Aspects 7.1 Headgates No data 1. Average farm size (ha) 1.47 7.2 Road/thresher crossings No data 2. Crops planted (ha) 7.3 Siphons No data y Rice 3,600 7.4 Flumes No data - Wet crop 7.5 Bullcart crossings No data - Dry crop 7.6 Check structures No data y Banana 7.7 End checks No data 3. Average yield (ton/ha) 8. Number of turnouts 268 y Rice 9. Length of drainage canal (km) 18.2 - Wet crop 4.3 10. Number of drainage structures 16.5 - Dry crop 3.5 11. Length of service & access roads 78.5 4. Cropping intensity (%) 188 12. Number of measuring device 1 5. ISF collection efficiency (%) 101 13. Number of water master’s field office - Note: 1Latest Type 1&2 contracts issued in 2008 for only 1 IA. 14. Number of gatekeeper’s quarter 1

Major Field Observations

1. Technical/management problems: Heavy erosion at side slopes of irrigation canals (mostly earth-lined) on Saug RIS section is observed due to overtopping of flood waters on canal embankments and service roads. Most of the damaged canals are located at the head (U/S) area due to flood from rivers and creeks, and at the tail-end due to water backflow from drainage channels. Canal structures are partially damaged and pipes/barrels are silted. Drainage canals are also heavily silted. 2. Institutional problems: Recently, O&M contracts with IAs were not renewed in 2009, indicating that most IAs faced certain organizational problems to pursue Types 1&2 contracts. IA organizational unity and strength needs assessment as preliminary observation shows strong leadership of agency staff. 3. Financial problems: 4. Environmental problems: EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Lasang Irrigation System (SRIS)

Location : a) Major Island - Mindanao b) Province - Davao del Norte ) Municipalities - Carmen & Panabo Year System Construction Started : 1977 Year System Construction Completed : 1983 Year System Became Operational : 1983 Year System Rehabilitated : 1993-1995

Number of remaining NIA staff : 4 Designations of NIA staff : WRFT-3, WRFO-1

Technical Aspects Institutional Aspects

1. Total potential service area (ha) 5,237 1. Total number of farmer-beneficiaries 1,931 2. Total firmed-up area (ha) 4,618.73 2. Number of IAs 11 3. Source of water supply Lasang River 3. Number of IA members 1,931 2 4. Catchment area (km ) 37.80 4. Number of TSAGs 5. Type of dam Ogee 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 20.46 y Type 1 - canal clearing 11 6.2 Lateral canal 36.97 y Type 2 - ISF collection 11 6.3 Sub Lateral 18.75 y Type 1& 21 11 7. Number of canal structures y Type 3 - full management transfer 7.1 Headgates No data Financial Aspects 7.2 Road/thresher crossings No data 1. Average farm size (ha) 1.0 7.3 Siphons No data 2. Crops planted (ha) 7.4 Flumes No data y Rice 7.5 Bullcart crossings No data - Wet crop 3,385.58 7.6 Check structures No data - Dry crop 3,144.06 7.7 End checks No data 8. Number of turnouts 132 3. Average yield (ton/ha) 9. Length of drainage canal (km) 60.15 y Rice 10. Number of drainage structures - Wet crop 3.66 11. Length of service & access roads 72.42 - Dry crop 3.71 12. Number of measuring device 4. Cropping intensity (%) 13. Number of water master’s field office 5. ISF collection efficiency (%) 14. Number of gatekeeper’s quarter 1 Note: 1Latest Type 1&2 contracts issued in 2008 for only 1 IA.

Major Field Observations

1. Technical/management problems: Canals are silted and side slopes are eroded due poor soil condition Gates of cross-regulators and turnouts are damaged

Poor maintenance of service roads

400 ha are flooded 4 times a year due to the overflow of creek

Scouring of D/S of Dam

2. Institutional problems:

Recently, O&M contracts with IAs were not renewed in 2009, indicating that most IAs faced certain organizational problems to

pursue Types 1&2 contracts. IA organizational unity and strength needs assessment as preliminary observation shows strong leadership of agency staff.

3. Financial problems:

4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Kipaliku River Irrigation System

Location : a) Major Island - Mindanao b) Province - Davao del Norte ) Municipalities - Sto. Tomas Year System Construction Started : 1983 Year System Construction Completed : 1993 Year System Became Operational : 1993 Year System Rehabilitated : 1995

Number of remaining NIA staff : 2 Designations of NIA staff : WRFT-1, WRFO-1

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 2,600 1. Total number of farmer-beneficiaries 735 2. Total firmed-up area (ha) 2,378.22 2. Number of IAs 8 3. Source of water supply Kipaliku River 3. Number of IA members 735 2 4. Catchment area (km ) 2372.6 4. Number of TSAGs 5. Type of dam Ogee 5. IA participation in system management 6. Length of irrigation canals (km) Type of contract 6.1 Main canal 13.68 y Type 1 - canal clearing 8 6.2 Lateral canal 15.45 y Type 2 - ISF collection 8 6.3 Sub Lateral 5.03 y Type 1& 21 8 7. Number of canal structures y Type 3 - full management transfer 7.1 Headgates No data Financial Aspects 7.2 Road/thresher crossings No data 1. Average farm size (ha) 1.0 7.3 Siphons No data 2. Crops planted (ha) 7.4 Flumes No data y Rice 7.5 Bullcart crossings No data - Wet crop 1,558.74 7.6 Check structures No data - Dry crop 1,428.72 7.7 End checks No data 8. Number of turnouts 67 3. Average yield (ton/ha) 9. Length of drainage canal (km) y Rice 10. Number of drainage structures - Wet crop 3.7 11. Length of service & access roads 38.49 - Dry crop 3.35 12. Number of measuring device 4. Cropping intensity (%) 13. Number of water master’s field office 5. ISF collection efficiency (%) 14. Number of gatekeeper’s quarter 1 Note: 1Latest Type 1&2 contracts issued in 2008 for only 1 IA.

Major Field Observations

1. Technical/management problems: Flooding within the service area due to drainage problem Canals are silted and deteriorated. Gates of canal structures are non-operational/damaged.

2. Institutional problems: Recently, O&M contracts with IAs were not renewed in 2009, indicating that most IAs faced certain organizational problems to pursue Types 1&2 contracts.

IA organizational unity and strength needs assessment as preliminary observation shows strong leadership of agency staff.

3. Financial problems:

4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

ANNEX B

PROFILE OF PROPOSED SUBPROJECT

Name : Semong Communal Irrigation System (SCIS)

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipality - Kapalong

Year System Construction Started : 1989 Year System Construction Completed : 1993 Year System Became Operational : 1993 Year System Rehabilitated :

Number of remaining NIA staff : None Designations of NIA staff - IDO : None O&M staff : None

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 520 1. Total number of farmer-beneficiaries 373 2. Total firmed-up area (ha) 411 2. Number of IA 1 3. Source of water supply Semong river 3. Number of IA members 245 2 4. Catchment area (km ) 4. Number of TSAGs/FIGs/sectors 13 5. Type of diversion Diversion Dam 5. Year system turned over to IA 1993 6. Length of irrigation canals (km) 6. Number of functional IA committees 6.1 Main canal 7.53 6.2 Lateral canal 4.08 Financial Aspects 6.3 Sub-lateral canal None 1. Average farm size (ha) 1.1 7. Number of canal structures 2. Crops planted (ha), Year 2007 (Banana) 40 7.1 Headgates 1 y Rice 7.2 Road/thresher crossings 23 - Wet crop 371 7.3 Siphons - - Dry crop 365 7.4 Flumes 2 3. Average yield (ton/ha), Year 2007 7.5 Bullcart crossings 3 y Rice 7.6 Check structures - - Wet crop 54.75 7.7 End checks 1 - Dry crop 3.75 8. Number of turnouts 31 4. Cropping intensity (%) 200 9. Length of drainage canal (km) - 5. Total amount of amortization (Pesos) 22,338,117.95 10. Number of drainage structures 2 6. Total amount of amortization paid (Pesos) 11. Length of service & access roads - 7. Agreed annual amortization (Pesos) 453,250.00 12. Number of measuring device - 8. Amortization period (Number of years) 30 9. Collection efficiency of amortization (%) 33.65

Major Field Observations

1. Technical/management problems:

• Accumulated Dam silts.

• Concreting of earth lined canal gong to extension area.

• Construction of additional canal structure. 2. Institutional problems: Minor water user conflict is reported in the downstream area during the dry season due to low conveyance efficiency of earth-lined canals.

3. Financial problems:

Insufficient IA financial savings/resources to pursue canal improvement and MFD desilting, thereby proposing for financial support to undertake concrete lining of Lateral Canal D and desiting of MFD. y Lack of capital to apply recommended farming practices (cropping calendar, fertilizer applications). 4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Upper Tuganay CIS

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipality - Sto. Tomas

Year System Construction Started : 1994 Year System Construction Completed : 1996 Year System Became Operational : 2005 Year System Rehabilitated :

Number of remaining NIA staff : None Designations of NIA staff - IDO : None O&M staff : None

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 250 1. Total number of farmer-beneficiaries 170 2. Total firmed-up area (ha) 203 2. Number of IA 1 3. Source of water supply Tuganay River 3. Number of IA members 170 2 4. Catchment area (km ) 4. Number of TSAGs/FIGs/sectors 5. Type of diversion Comb. Ogee & 5. Year system turned over to IA Teruviann 6. Number of functional IA committees 6. Length of irrigation canals (km) 6.1 Main canal 3.48 Financial Aspects 6.2 Lateral canal 1.657 1. Average farm size (ha) 6.3 Sub-lateral canal 2. Crops planted (ha), Year 2007 (Banana) 73 7. Number of canal structures y Rice 130 7.1 Headgates 2 - Wet crop 130 7.2 Road/thresher crossings 14 - Dry crop 130 7.3 Siphons 3. Average yield (ton/ha), Year 2007 7.4 Flumes y Rice 7.5 Bullcart crossings 2 - Wet crop 4.25 7.6 Check structures 7 - Dry crop 4.30 7.7 End checks 3 4. Cropping intensity (%) 200 8. Number of turnouts 9 5. Total amount of amortization (Pesos) 32,677,392.13 9. Length of drainage canal (km) 6. Total amount of amortization paid (Pesos) 10. Number of drainage structures 7. Agreed annual amortization (Pesos) 420,000.00 11. Length of service & access roads 0.4 8. Amortization period (Number of years) 12. Number of measuring device 9. Collection efficiency of amortization (%) 7.55

Major Field Observations

1. Technical/management problems: Project system is newly rehabilitated. Canals are silted coming from the river through the Intake. Problem on silt exclusion and cleaning of the teruvian intake.

2. Institutional problems:

IA conducts monthly meetings. Common agenda: Reporting of ISF collection, cropping pattern, water distribution and other problems. 3. Financial problems:

4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Gabuyan CIS

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipality - Kapalong

Year System Construction Started : 1981 Year System Construction Completed : 1983 Year System Became Operational : 1983 Year System Rehabilitated : None

Number of remaining NIA staff : None Designations of NIA staff - IDO : None O&M staff : None

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 174 1. Total number of farmer-beneficiaries 137 2. Total firmed-up area (ha) 174 2. Number of IA 1 3. Source of water supply Gabuyan River 3. Number of IA members 137 2 4. Catchment area (km ) 4. Number of TSAGs/FIGs/sectors 5. Type of diversion Ogee 5. Year system turned over to IA 6. Length of irrigation canals (km) 6. Number of functional IA committees 6.1 Main canal 7.642 6.2 Lateral canal 3.827 Financial Aspects 6.3 Sub-lateral canal 0.826 1. Average farm size (ha) 1.19 7. Number of canal structures 2. Crops planted (ha), Year 2007 (Banana) 7.1 Headgates 4 y Rice 7.2 Road/thresher crossings 14 - Wet crop 126 7.3 Siphons 5 - Dry crop 126 7.4 Flumes 3 3. Average yield (ton/ha), Year 2007 7.5 Bullcart crossings 7 y Rice 7.6 Check structures - Wet crop 4.4 7.7 End checks - Dry crop 4.25 8. Number of turnouts 4. Cropping intensity (%) 145 9. Length of drainage canal (km) 5. Total amount of amortization (Pesos) 6,053,117.73 10. Number of drainage structures 6. Total amount of amortization paid (Pesos) 11. Length of service & access roads 7. Agreed annual amortization (Pesos) 137,200.00 12. Number of measuring device 8. Amortization period (Number of years) 9. Collection efficiency of amortization (%) 54.06

Major Field Observations

1. Technical/management problems: The sluiceway is un-gated. A rectangular steel gate should be installed.

2. Institutional problems:

The IA has fully paid their loan and a resolution was made that they will not apply for a new loan.

3. Financial problems:

4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Sta. Lucia CIS

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipality - Sto. Tomas

Year System Construction Started : 1999 Year System Construction Completed : 2001 Year System Became Operational : 2001 Year System Rehabilitated : -

Number of remaining NIA staff : None Designations of NIA staff - IDO : None O&M staff : None

Technical Aspects Institutional Aspects

1. Total potential service area (ha) 60 1. Total number of farmer-beneficiaries 47 2. Total firmed-up area (ha) 44.37 2. Number of IA 1 3. Source of water supply Inagulan Creek 3. Number of IA members 42 4. Catchment area (km2) 4. Number of TSAGs/FIGs/sectors 5. Type of diversion Checkgate 5. Year system turned over to IA 6. Length of irrigation canals (km) 6.1 Main canal 2.34 6. Number of functional IA committees

6.2 Lateral canal 0.508 Financial Aspects 6.3 Sub-lateral canal 7. Number of canal structures 1. Average farm size (ha) 7.1 Headgates 1 2. Crops planted (ha), Year 2008 42 7.2 Road/thresher crossings 7 y Rice 10 7.3 Trajectory 1 y Banana 32 7.4 Drop 1 - Wet crop 14 7.5 Bullcart crossings 5 - Dry crop 14 7.6 Check structures 1 3. Average yield (ton/ha), Year 2008 7.7 End checks 1 y Rice 8. Number of turnouts 7 9. Length of drainage canal (km) FD 2.6 - Wet crop 4.25 10. Number of drainage structures - - Dry crop 4.35 11. Length of service & access roads - 4. Cropping intensity (%) 80% 12. Number of measuring device - 5. Total amount of amortization (Pesos) 3,585,723.61 6. Total amount of amortization paid (Pesos) 7. Agreed annual amortization (Pesos) 73,611.15 8. Amortization period (Number of years)

9. Collection efficiency of amortization (%) 11.95%

Major Field Observations 1. Technical/management problems: All canal structures are silted No control gates at cross regulators 2. Institutional problems: The IA is not active. Conduct BOD meetings only if called by NIA 3. Financial problems: The system is in need of financial support from NIA in rehabilitating their system. 4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Limbaan CIS Layout map not available Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipality - New Corella

Year System Construction Started : 1976 Year System Construction Completed : 1977 Year System Became Operational : 1977 Year System Rehabilitated :

Number of remaining NIA staff : None Designations of NIA staff - IDO : None O&M staff : None

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 60 1. Total number of farmer-beneficiaries 87 2. Total firmed-up area (ha) 60 2. Number of IA 1 3. Source of water supply Limbaan River 3. Number of IA members 87 2 4. Catchment area (km ) 4. Number of TSAGs/FIGs/sectors 5. Type of diversion Check Structure 5. Year system turned over to IA 6. Length of irrigation canals (km) 6. Number of functional IA committees 6.1 Main canal 4.978 6.2 Lateral canal 2.245 Financial Aspects 6.3 Sub-lateral canal 1. Average farm size (ha) 7. Number of canal structures 2. Crops planted (ha), Year 2007 (Banana) 7 7.1 Headgates 1 y Rice 7.2 Road/thresher crossings 13 - Wet crop 53 7.3 Siphons - Dry crop 61 7.4 Flumes 3. Average yield (ton/ha), Year 2007 7.5 Bullcart crossings y Rice 7.6 Check structures - Wet crop 7.7 End checks 3 - Dry crop 8. Number of turnouts 9 4. Cropping intensity (%) 200% 9. Length of drainage canal (km) 5. Total amount of amortization (Pesos) 1,893,335.54 10. Number of drainage structures 8 6. Total amount of amortization paid (Pesos) 1,788,202.17 11. Length of service & access roads 7. Agreed annual amortization (Pesos) 47,250.00 12. Number of measuring device 8. Amortization period (Number of years) 9. Collection efficiency of amortization (%) 94.45%

Major Field Observations

1. Technical/management problems: Concrete lining of the whole canal stretch of MC Left & Right w/ a total Length of 5.30 km. It can irrigate an additional area of 7-10 has. 2. Institutional problems: Minor water user conflict is reported in the downstream area during the dry season due to low conveyance efficiency of earth-lined canals. 3. Financial problems: IA is proposing for a need of financial support to undertake concrete lining of Main Canals Left & Right. 4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

PROFILE OF PROPOSED SUBPROJECT

Name : Anaman CIS

Location : a) Major Island - Mindanao b) Province - Davao del Norte c) Municipality - New Corella

Year System Construction Started : 1981 Year System Construction Completed : 1982 Year System Became Operational : 1982 Year System Rehabilitated : 1989

Number of remaining NIA staff : None Designations of NIA staff - IDO : None O&M staff : None

Technical Aspects Institutional Aspects 1. Total potential service area (ha) 150 1. Total number of farmer-beneficiaries 88 2. Total firmed-up area (ha) 100 2. Number of IA 1 3. Source of water supply Anaman Creek 3. Number of IA members 88 2 4. Catchment area (km ) 4. Number of TSAGs/FIGs/sectors 5. Type of diversion Ogee 5. Year system turned over to IA 6. Length of irrigation canals (km) 6. Number of functional IA committees 6.1 Main canal 2.240 6.2 Lateral canal 1.758 Financial Aspects 6.3 Sub-lateral canal 1.500 1. Average farm size (ha) 7. Number of canal structures 2. Crops planted (ha), Year 2007 7.1 Headgates 3 y Rice 7.2 Road/thresher crossings 13 - Wet crop 100 7.3 Siphons - - Dry crop 100 7.4 Flumes 3 3. Average yield (ton/ha), Year 2007 7.5 Bullcart crossings 8 y Rice 7.6 Check structures 3 - Wet crop 7.7 End checks 4 - Dry crop 8. Number of turnouts 10 4. Cropping intensity (%) 9. Length of drainage canal (km) 5. Total amount of amortization (Pesos) 1,058,497.87 10. Number of drainage structures 4 6. Total amount of amortization paid (Pesos) 20,952.93 11. Length of service & access roads 7. Agreed annual amortization (Pesos) 12. Number of measuring device 8. Amortization period (Number of years) 9. Collection efficiency of amortization (%)

Major Field Observations

1. Technical/management problems: Insufficient water supply for the tail end portion due: earth canal sections are too big due to erosion of embankments

2. Institutional problems: Minor water user conflict is reported in the downstream area during the dry season due to low conveyance efficiency of earth-lined canals. 3. Financial problems:

4. Environmental problems:

EEN901-INC-REP-001-Rev. A 29 May 2009

Annex C

Criteria for Subprojects

The following is a draft proposed list of criteria for inclusion of subprojects for selection in the ISOEIP. The final list is meant to be included in the Inception Report of TA 7141-PHI and applied in future work for selection of subprojects. Comments, suggestions etc are therefore welcome:

Overall Development Criteria • Must address and directly contribute to the overall present development polices, strategies, priorities and plans of the Philippines, like the Medium Term Philippine Development Plan, 2004-2010, the Philippine Millennium Development Goals, the Poverty Reduction Strategy, the present policies and plans to close the rice deficit in the Philippines, including the GMA rice programme, the FIELDS programme and the Rice Self-Sufficiency Plan 2009-2010 and others; • Significantly assists providing sustainable livelihood opportunities for approximately 35,000 participating farm households in terms of food, social, economic, institutional, educational, health, nutrition, access to clean and safe water, rural accessibility, access to rural finance and rural markets, legal access and protection, gender mainstreaming, climate and environmental securities and opportunities; • To generate sustainable positive impacts in direction of increased sustainable household incomes and reduced poverty through food crop production and a nutritious and balanced household diet; and • The total irrigated area to become upgraded under ISOEIP will amount to some 40,000ha and the total EIRR of the investment costs will amount to at least 15%

Social, Economic, Environmental and Institutional Criteria • The beneficiaries must commit themselves firmly to active membership of an IA during the initial stage of subproject planning, including a commitment to assume full responsibility for O&M of subproject facilities within three years of subproject completion; • Each beneficiary will also make a formal commitment to their right to a share of available irrigation in proportion to the size of their landholding and to assure equal distribution and allocation of irrigation to head and tail enders, as well as meeting their equity contribution to the cost of the construction; • The expected increase in productivity of upgraded areas should increase with 30- 50%; • The upgraded area should significantly contribute to increase social, economic and institutional development and been balanced in such a manner that it does not have negative impacts on the environment and micro-climates. • No household must possess more than 3.0 ha land under the entire irrigation facility inclusive of new areas to be included and the EIRR of the investment costs for each sub-project must be at least 15%; • Rehabilitation efforts can in very special cases be considered to include contributions to reduce areas being subject of regular and frequent crop damage;

EEN901-INC-REP-001-Rev. A 29 May 2009

Accessibility • Encourage and ensure rural accessibility in terms of: on-and off farm employment opportunities, rural finance, rural institutions, rural roads, footbridges, multipurpose pavements, village-based storage structures, health, education, clean and safe water, social services, through LGU involvement and active participation.

Technical Criteria • Sufficient evidence that sustainable and adequate water of needed quality is and will remain available; • Feasibility studies must be undertaken in each case and include ADB’s gender, social and environmental guidelines, including preparation of resettlement plans, if required; • Upgrade feasible NIS and CIS irrigation systems that meets the criteria set forth and responds to the target groups need of increasing agricultural production and income and at the same time prepared to diversify agricultural production to match and cope with the climatic changes; • Fulfill GoPs and ADBs design and safeguard requirements; • The beneficiaries and the effected communities should review and endorse feasibility studies through open forums involving barangay (purok) councils and other local organizations representing farmers’ interests. This to ensure full participation of the community in selection of area to become upgraded, cropping calendar, cropping pattern and intensity, and to fully understand which households will benefit and by how much and who will not benefit; • Each upgraded area should range from 100ha to no more than 3,000ha; • The upgraded area must be suitable for cultivation of irrigated crops and land presently used for permanent cropping and cropping systems, including coconuts, home garden cultivation, nurseries and orchards, should not be converted; • Storage dams for SRIS should not be larger than 25 meters in height nor impound more than 50 million cubic meters of water;

EEN901-INC-REP-001-Rev. A 29 May 2009

Personnel Schedule

TA7141 - PHI Irrigation System Operation Efficiency Improvement Project

April May June July August September October

Responsibility

1 2 3 4 5 6 7

Personnel Plan Name Months Input Project Home Total International Experts

Team Leader/Rural Development Specialist 6.0 0.0 6.0 Hans Green

Irrigation Engineer 3.5 0.0 3.5 Clifford Henkel

Project Economist 3.0 0.0 3.0 Jerome Sison

Cost Estimator and Contract Specialist 1.5 0.0 1.5 Virgilio Balandra

14.0 0.0 14.0

National Experts

Evnironmental Specialist 3.0 0.0 3.0 Felix Pascua

Deputy Team Leader/Institutional and Capacity Development Specialist 5.5 0.0 5.5 Eleazar, Luis P

Rural Sociologist 4.0 0.0 4.0 Corpuz, Angelito N

Hydrologist and Water Resources Specialist 2.0 0.0 2.0 Aldovino, Lino P

Irrigation Agronomist 4.0 0.0 4.0 Tetangco, Miguel

Geodetic Engineer 2.0 0.0 2.0 De la Paz, Eric

M&E Specialist 2.0 0.0 2.0 Panganiban, Corazon

Geotechnical Engineer 2.0 0.0 2.0 Roy Luna

Civil Engineer/Irrigation design engineer 5.0 0.0 5.0 Eleosida, Rafael B

Civil Engineer/Irrigation design engineer 5.0 0.0 5.0 Uy-Abendan, Rosalinda T

Financial Management Specialist 2.0 0.0 2.0 Tan, Eleanora E 0.0 Project Resource Specialist 0.7 0.0 0.7 Ramirez, Romulo A

37.2 0.0 37.2

EEN901-INC-REP-001-Rev.A 29 May 2009

ANNEX E: Revised Work Schedule (following Inception Workshop)

TA7141-PHI - Irrigation System Operation Efficiency Improvement Project Prepared after Inception Workshop for ADB approval

April May June July August Sept Oct Months Input NAME AND POSITION Original Additional TOTAL

INTERNATIONAL Firm Original Additional Green, Hans Team Leader /Rural Development Specialist KBR 6.00 -1.00 6.00 -1.00 5.00 Henkel, Clifford Irrigation Engineer KBR 3.50 0.8 3.50 0.80 4.30 Sison, Jerome Project Economist KBR 2.00 1.00 2.00 1.00 3.00 Balandra, Virgilio Cost Estimator and Contract Specialist KBR 1.50 1.50 1.50 13.00 0.80 13.00 0.80 13.80 DOMESTIC Eleazar, Luis Deputy Team Leader / Institutional and Capacity Specialist PRIMEX 4.00 1.50 4.00 1.50 5.50 Pascua, Felix Noel Environment Specialist PRIMEX 3.00 3.00 3.00 Corpuz, Angelito Rural Sociologist PRIMEX 4.00 4.00 4.00 Aldovino, Lino P Hydrologist and Water Resources Specialist PRIMEX 2.00 0.50 2.00 0.50 2.50 Tetangco, Miguel Irrigation Agronomist PRIMEX 4.00 4.00 4.00 De la Paz, Eric Geodetic Engineer PRIMEX 2.00 2.00 2.00 Panganiban, Corazon M&E Specialist PRIMEX 2.00 2.00 2.00 Luna, Roy Anthony Geotechnical Engineer PRIMEX 2.00 2.00 2.00 Eleosida, Rafael Civil Engineer/Irrigation Design Engineer PRIMEX 5.00 5.00 5.00 Uy-Abendan, Rosalinda T Civil Engineer/Irrigation Design Engineer PRIMEX 5.00 5.00 5.00 Tan, Eleanora Financial Management Specialist PRIMEX 2.00 2.00 2.00 Romulo Ramirez Project Development Specialist PRIMEX 0.00 3.00 0.00 3.00 3.00 35.00 5.00 35.00 5.00 40.00 48.00 5.80 48.00 5.80 53.80 Reports Inception Report Midterm Report Draft Final Report Final Report MTR Deadline for KBR - Aug 01

DFR Deadline for KBR - Sept 15

RRP Deadline for KBR - Oct 15 Irrigation System Operation Efficiency Improvement Project (ADB TA7141-PHI) WORK SCHEDULE (24 April - 19 October 2009)

Draft Work Schedule presented at Inception Workshop

Responsible ACTIVITY JUNE JULY AUGUST SEPTEMBER OCTOBER OUTPUT DEADLINE Specialist I. INSTITUTIONAL 1. Liaison - National level: ADB, NIA, LAs, LGUs, Donors, Projects TL Notes Ongoing - Provincial: NIA, LGUs, Line Agencies Notes & - Communities and Rural Institutions TL, IIS, ICDS Ongoing Reports Notes & 30/5/2009 & 2. Parameters and Criteria for Subprojects ICDS, TL Reporting 30/6/2009 Trainin plan & 3. Management training of IAs ICDS Ongoing designs 4. Assess M&E Systems, gaps, and develop M&E Report 7/05/2009 recommendations 5. Review monitoring system in all NIA offices, provide Report, M&E Ongoing training,, advice, support, and develop recommendations Designs 6. Undertake critical baseline surveys M&E Surveys 7. Assess capacity and capability of beneficiary contributions TL, ICDS, IE, Analysis and IMT IDE, RS TL, ICDS, 8. Stakeholder workshops, national and regional Workshops others 9. Strengthening of IAs and NIA on IMT ICDS Designs Ongoing II. AGRICULTURAL AND RURAL DEVELOPMENT Inputs to 1/8/09,1/9/09, 1. Rural development analysis TL reports 1/10/09 2. Review and recommendations of extension packages,production, productivity, technology, credit, input supply, post harvest facilities, etc. Inputs to 1/8/09,1/9/09, 3. Recommendations on crop water requirements IA reports 1/10/09 Inputs to 4. Assistance to prepare land use plans IA Ongoing reports Inputs to 1/8/09,1/9/09, 5. Agricultural market, supply and demand, suitable crops. IA reports 1/10/09 6. Constraints to irrigated agriculture and recommendatios, Inputs to 1/8/09,1/9/09, IA etc. reports 1/10/09 Inputs to 1/8/09,1/9/09, 7. Assess climate, land use, farmersorganizations, etc. IA reports 1/10/09 1/8/09,1/9/09, 8. Development of agricultural plans IA Plans 1/10/09 Responsible ACTIVITY JUNE JULY AUGUST SEPTEMBER OCTOBER OUTPUT DEADLINE Specialist III. SOCIAL Inputs to 1/8/09,1/9/09, 1. Poverty impact assessment PE, RS reports 1/10/09 2. Social assessment and absorting capacity ICDS & RS Contracts & 3. Subcontracting of surveys TL, RS 20/6/2009 TORs Inputs to 1/8/09,1/9/09, 4. Identification of social and institutional contrainst RS reports 1/10/09 Meetings, 5. Stakeholder meetings, village, communities, districts, etc. RS Ongoing notes 6. Gender action plan RS Plan 9/05/2009 1/9/2009, 7. Annexes to RRP RS Annexes 1/10/2009 IV. ENVIRONMENTAL Inputs to 1/8/09,1/9/09, 1. Assess environmental impacts ES reports 1/10/09 2. EIA and EARF reports ES Reports 9/01/2009 3. Plan and capacity of EMP ES Plan 9/01/2009 Inputs to 1/8/09,1/9/09, 4. Public environmental consultation ES reports 1/10/09 1/9/2009, 5. Annexes to RRP ES Annexes 1/10,2009 V. FINANCE AND ECONOMICS 1/9/2009, 1. Project cost estimates PE Estimates 1/10/2009 1/9/2009, 2. Financial and economic annexes for RRP PE Annexes 1/10/2009 1/9/2009, 3. Financial capacity of participating institutions FMS Analysis 1/10/2009 4. Financial management assessment of participating 1/9/2009, FMS Assessment agencies 1/10/2009 VI. TECHNICAL 1. Subcontracting for surveys IIE & TL Contract 30/6/2009 2. Preparation of detailed workplan for the I&D Component of IIE & TL Workplam 15/6/2009 ISOEIP (for details please refer to the workplan attached) 3. Hydrological and meteorological info HWRS Data 8/01/2009 4. Water availability and flows HWRS Data 8/01/2009 5. List of diversions HWRS Data 8/01/2009 6. Water resource availability and potential uses conflicts HWRS Data 8/01/2009 7. Topographic surveys GD Report 8/01/2009 8. Quality of existing surveys GD Report 8/01/2009 9. Geotechnical consultations GE Report 8/01/2009 Responsible ACTIVITY JUNE JULY AUGUST SEPTEMBER OCTOBER OUTPUT DEADLINE Specialist 10. Geotechnical aspects for rehabilitation and construction GE Report 8/01/2009 1/9/2009, 11. Development of irrigation and drainage plans IIE Plans 1/10/2009 VII. REPORTING 1. Midterm Report All Report 20/8/2009 - Internal TA deadline All Inputs 8/01/2009 2. Draft Final Report All Report 20/9/2009 - Internal TA deadline All Inputs 9/01/2009 3. Final Report All Report 20/10/2009

TL /RDS ‐ Team Leader / Rural Development Specialist RS ‐ Rural Sociologist DTL/ICDS ‐ Deputy Team Leader / Institutional and Capacity ES ‐ Environment Specialist Development Specialist CECS ‐ Cost Estimator and Contract Specialist IIE ‐ International Irrigation Engineer M&E ‐ Monitoring and Evalauation Specialist IDE ‐ Irrigation Design Engineer HWRS ‐ Hydrologist and Water Resources Speciallist IE ‐ Irrigation Engineer GD ‐ Geodetic Engineer PE ‐ Project Economist GE ‐ Geotechnical Engineer FMS Financial Management Specialist