Document of 1lileIJt VVTU11Uvv orld B0irilIn__i_

FOR OFFICIAL USE ONLY Public Disclosure Authorized

Report No: 24218

TXAKDT 1VXA'VTrA TTO COV,TLPTLODTtPTT(YK VP1)DCRT (IDA-25920)

ONA

Public Disclosure Authorized CREDIT

IN THE AMOUNT OF SDR 187.3 MILLION (US$258 MivLLION EQ-UIVALENT)

TO THE

INDIA

FOR

HARYANA WATER RESOURCES CONSOLIDATION PROJECT Public Disclosure Authorized JUNE 21, 2002

R-kurnal DevVe:opU-Um en-Mt Sector UntT

South Asia Region

This document nas a restricted aistribution and may be used by recipients only in tne performance of their

Public Disclosure Authorized official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS

(Exchange Rate Effective June 21, 2002)

Currency Unit = Indian Rupee 1 NR (48.915) = US$1.00 US$ 1 = 1NR(31.51) 1993 = INR (46) 2001

FISCAL YEAR April I -- March 31

ABBREVIATIONS AND ACRONYMS

AIP Agriculture Intensification Program CADA Command Area Development Authority CAS Country Assistance Strategy FOT Farmer Organization Turnover GOH Government of Haryana GOI Govermment of India HAU Haryana Agriculture University HID Haryana Irrigation Department HIRMI Haryana Irrigation Research and Management Institute HSMITC Haryana State Minor Irrigation and Tubewell Corporation ICR Imnplementation Completion Report IDA International Development Association L/C/TF No. Loan/Credit/Trust Fund Number MOU Memorandum of Understanding MTR Mid Term Review O&M Operation and Maintenance PIM Participatory Irrigation Management QAG Quality Assurance Group QSR Quality of Supervision Review SAR Staff Appraisal Report SASRD South Asia Rural Development WSU Water Service Units WUA Water User Association

Vice President: Mieko Nishinmzu Country Director: Edwin Lim Sector Director: Constance Bernard Tasck Team L.eader/Tasck Manager: Prabir Joardar FOR OFFICIAL USE ONLY

INDIA Haryana Water Resources Consolidation Project

CONTENTS

Page No. 1. Project Data 1 2 Principal Performance Ratings 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2

t.U1L YUVL1IMUL01 UFJUJLAIVU WILU '.JULpJULO 5. Major Factors Affecting Implementation and Outcome 10 6. Sustainability I I 7. Bank and Borrower Performance 11 8. Lessons Learned 13 9. Partner Comments 13 10. Additional Information 14 Annex !. Key Performan-ce indicators[/LogFnPme Matri 1S Annex 2. Project Costs and Financing 18

P.J1UX .3. ZiUUU1UL %IostWsUU DaUd1eLn AU Annex 4. Baink Inputs 21 Annex 5. Raungs for Achievement of Objectives/Outputs of Components 24 Annex 6. Ratings of Bank and Borrower Performance 25 Annex 7. List of Supporting Documents 26 Annex 8. Borrower's Evaluation 27

nims aocumeni nas a restricted UisLFIUULIUUI and ,lay UV Ub U byU-, Je rcpXJ onJLLyi the Derformance of their official duties. Its contents may not be otherwise disclosed without World Bank authorization.

IProject ID: P009964 IProject Name: Harvana Water Resources Consolidation Project Team Leader: Prabir Joardar TL Unit: SASRD ICR Type: Core ICR Report Date: June 18, 2002

1. Project Data

Name: Haryana Water Resources Consolidation Project L/C/TF Number: IDA-25920 Countrv/Department: INDIA Region: South Asia ReQisnal Office Sector/subsector: Al - Irrigation & Drainage, VM - Natural Resources Management

KEY DATES Original Revised/Actual PCD: 11/07/1991 Effective: 06/24/1994 06/24/1994 Appraisal: 10/01/1993 MTR: 12/12/1997 Approval: 03/29/1994 Closing: 12/31/2000 12/31/2001

Borrower/lImplementingAgency: GOI/STATE DOI (HARYANA) Other Partners: None

STAFF Cuirr ent At Annprical Vice President: M. Nishimizu D. Joseph Wood Country., .n,rager.-: E. T Al . Sector Manager: C. Bernard J. Wijnand lr- T-4--of'V Di Tor-s_. C. SVCrrVy ICR PrimaryAuthor: John Weatherhogg (FAO/CP)

2. Principal Performance Ratings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, HA=High, SU=Substantial, M=Modest, N=Negligible) Outcome: S Sustainability:L InstitutionalDevelopment Impact: M Bank Performance. S

.,o,,ower Du rjur Mr. S

QAG (if available) ICR Quality at Entry: U Projectat RisK at Any Time: Yes 3. Assessment of Development Objective and Design, and of Quality at Entry 3.1 OriginalObjective: 3.1.1 The primary proiect obiectives were to: (a) introduce water resource planning and management; (b) enhance agricultural productivity and diversification, and improve equity (in distribution of water); (c) assure qustainabilitv of the environment: and (d) imnrove TMED's canabilities in all water related functional areas.

3.1.2 The project's objectives were consistent with current country and sectoral assistance strategies which stress. m-,,l., onA rvlrl developmlrnt oan,l m"nvAng covrnnmient -ffpe-thiPv.ne The nvn,ect ob,e-- ue addressed Government priorities and were in line with the Bank's Country Assistance Strategy (CAS).

*M_ - ea v -v _ f.--m4e Ein Vt-ine Balf - S poh;cl.- atI " ,e;e of pIepJ 4lA'un jn_jjt.t._ft _ Y ve;, the second and the most important objective was not supported by any corresponding agricultural ucVcpIUcUL LomponentL, adLLU eLwoW gU1U1loVI 'L-dVUJUU ofJV1,Ac1VI susbVU'1111tjLIbUM4U1U1LY Wda too broad and general. In the SAR, the main environmental concerns were water quality protection, managing water logging and salinity problems, gr ound water over exploitation, drainage and ilood miutgauon whCih were largely addressed by the project. Overall, the objectives were reasonable, given the period of evolution of water sector projects, although detailed mechanism for attaining these oojectives were not very clearly laid down in the SAR.

3.2 Revised Objective: 3.2.1 Tne original objectives remained unchanged during implementation of the project, althougn following the 1997 Mid-Term Review (MTR) much greater emphasis was given to agricultural development and the creation of Water Users' Associations (WUAs).

3.3 OriginalComponents: 3.3.1 The project was a sector investment loan, financing an agreed state-wide, six year program covering both the Bhakra and Western Yamuna Canal systems with a total project cost of US$483 million (base cost $459.7 M) estimated at appraisal. It consisted of four main components, namely, (a) Rehabilitation of the existing canal and drainage systems, and selective lining of canals and water courses ($80.6 M); (b) Modernization of canal and drainage systems and water courses, construction of the Hathnikund Barrage, and construction/extension of minors ($164.4 M); (c) upgraded Qpemfion and Maintenance (O&M) of the water distribution and drainage system ($181.8 M); and (d) Institutional Support for administration, data collection, planning, design, beneficiary participation, research and training ($32.9M).

3.3.2 The choice of components was reasonably in line with the project's development objectives. The construction of new major civil works and rehabilitation/modernization of irrigation and drainage ifrastructure. as envisaged under the project, facilitated better and sustained service deliverv and higher agricultural productivity which are the main objectives of the project. This was supported by institutional refnrm^- innhidina qsntTnti^n nf s ir_e/O&M nrTvni7sttinn frinm imnlemertinangaswnnieqs whirch rpmiitpA in better coordination and management of construction, operation and maintenance activities. Due importance was given to policy reforms a bnl1A]ng ,z.thin the EmT Benef.cio,y poicip.tion WG, an important component in the project design; and project monitoring and evaluation through a computer 1L_ AW_-A AA+ -- TAA_*AOSA_ -+- ___O AXT AA A-A 1. MA AM_ 3_1_ _ _lL UbaseU DyaXu' waD Au 1AcgE ji a0t ND lpt'NV C pLUJtt)L UtD1LI aGh JIJtU'U UISiit'it'Utdt'V. I U Uvail 01 UIV institutional component was inadequate to fully achieve the envisaged changes. Also, there was a lack of o-wnersmAip on iuc par. oI %.nr *U he proposed *,hanges. Scounu, he prouject, at the tume of design and appraisal, lacked effective activities to promote higher agricultural productivity and diversification, on which the major part of the project's justification rested. Also, the slow project implementation in initial years indicates that lessons learned from previous projects were inadequately taken account of in the design. Tne merger of HID, the Haryana Staie iinor irnigation and Tubewe;;s Corporauton (HSMITC) and the Command Area Development Authority (CADA) into a single agency was proposed under the institutional reform component without criticaly looking into the feasibiiity of such proposai.

2 .s*Cv-tuDn ru4 3.4.1 Following the MTR, some critical and appropriate revisions were made to the project. These

uriduureu aSLLLUUM. new vI.OULpUi1VUL, uir e1LUw1 ULLrib uurA;i4UV- alul e-%ifiuo WIJ.al Wwr -UUUUUxuc EL July 1997. The AIP component gave greater emphasis to formation of WUAs and integration of support to farmers, and facilitated improved agricuiural and water management practices in tne field including crop diversification. At the time this component was introduced, the Bank, the Government of India and the Government of Haryana's thinking on participatory irrigation management had progressed, based on international experience in Mexico and in the Philippines and early lessons coming out of a parallel Bank project financed operation in Andhra Pradesh. Other changes included provision of a new Head Quarter building for HID at Panchkula, and some modifications in rehabilitation and modernization components. A further change to the project occurred in March 2001 when SDR37 million (US$48 million) of anticipated savings under the Credit was reallocated to a separate category to be used for the Gujarat earthquake emergency reconstruction.

3.5 Quality at Entry: 3.5.1 No quality assessment of project design was made at appraisal. The project objectives and setting were appropriate and timely at the project design stage and were in line with similar projects being prepared during that time. The component mix was reasonable - some major works construction and lining of canals and water courses; rehabilitation of canals, drains and water courses; a component for improved O&M; institutional strengthening; and policy change. However, the Bank should have given more attention to assess the Borrower's commitment the proposed reforms and preparedness to implement the same. The farmers organization and turnover component was weakly designed, and the non-inclusion of an agricultural component was a major deficiency. Accordingly, the ICR rates the quality of project design as "unsatisfactory".

4. Achievement of Obiective and OutDuts 4.1 Outcome/achievement ofobjective: 4.1.1 Tine first objective of introducing water resources planning and management was substantially achieved even though with considerable delays due to the slow preparation of the State Water Plan (SWP) which was just about finalized by the Credit Closing date. However, capacity has been built in HID to use the simulation model prepared under SWP as a decision support tool in future water sector planning and allocation. A State Water Policy has been drafted which recognizes the importance of a holistic approach to water resources planning and management. A National Workshop on Water Sector Reform in Haryana (May 29-30, 2001) drew up an action plan for institutional reforms and integrated water resources management. A positive development following the workshop has been the creation of the State Water Resource Council under the chairmanship of the Chief Minister as a policy making body, supported by the Water Conservation Mission under the Principal Secretary to the Chief Minister and including representation of some 20 departmnents associated with water resources use and management The Water Conservation Mission is responsible for optimization of water use in all sectors. However, all these positive developments happened towards the end of the project, thus denying the opportunity to measure their long term impact/influence on the functioning of the water sector in Harvana.

4-112bee _tiThe seconda_a___d_The_imp_eme-- nhiective of enhancementa of--- aoirclltiiral-m-- - nmrndutivitvi a r---j,z-r diversifiestion t cs andi nmitv h5m been substantially attained. The implementation of modernization and rehabilitation components had progressed well after the initial delays. The Farmer Organization & Turnover (FOT) and Agriculture Intensification Program (AIP) components, albeit very slow starts, have performed well towards the end. The visible interest and involvement of fanners in these programs facilitated greater water use efficiency, enhanced productivity, and delivered the desired outcome of equity of distribution. Where WUAs have been formed and functioning, an average increase in irrigated areas of the order of 15-25% with equitable distribution of water to the satisfaction of tail end farmers have been reported. ICR mission field visits also confirmed this positive outcome. Seen in the context of Country's policies on pricing and procurement of agricultural produce, the performance of the AIP program towards achieving modest diversification of crops in the project areas, is noteworthy. The modernized/rehabilitated water courses were handed over to the farmers (WUAs) for management, operation and maintenance at their own cost, enhancing siLqtainabilitv of investment.

4. 1.3 The nhioijtive to "assumre sstainability of the environment" has been largely achieved if connidered in light of the original project design features. An in-house Environmental Policy for HID has been adopted by the Un,.-yana Gover.nLm..e.t which includes: a mr.ech,aim f.fr rrneiterinrcr .virornmnciptqtdl safpcmnqrdc acnd clearance of new projects and capacity building in environmental planning and management to meet -LUnau-n- and opsp4-onu.ilito nder-. naLtial1 oraL+s1t4 MVJhvU.ULOA,s.sld.-n ad. A rLaLtin. Tn coordination with State Pollution Control Board, the HID established a mechanism for punishing sources pOiiuLug can,a's ando Uler water UbUieV. -JI,oUIU wai eAjJV1LatUUion UVVhaeenL 1VLrULUIL y/dr1 Iin oe (where extraction exceeds 70% of rechargeable ground water), and by providing disincentive in the form of increase in power tarirrr for agricultmre. Flood control and drainage inprovement works were implemented which reduced water logging and salinity in critical areas. Ground water build-up in saline water zones has been reduced by iining of canals and water courses, and through better water management practices.

4.1.4 The positive features of institutional development supported by the project include the reorganization of HID on functional lines by separating construction and O&M units, transfer of O&M of water courses to the farmer organizations (WUAs) and improved O&M cost recovery. HID's reorganization is in place and working to provide improved service delivery to all users including supplying bulk water for municipal uses in the western districts. The change in approach to service delivery with full involvement of farmers organizations at the lower level, is one of the most significant positive institutional changes of the project. Changes in the mind set at the policy making level is indicated by GOH's request for another project with primary focus on participatory irrigation management and options for unbundling/restructuring and corporatization of HID's service units. The policy of down sizing the over staffed HID is also an important positive institutional aspect inducing reduction of O&M costs and for improved O&M cost recovery. The preparation of the State Water Plan has provided the opportunity to enhance HID's capability in water related planming and management. However, these initiatives came up too late to make the same meaningful during the project implementation period. The training program under the projent enhanced capnhilitv of staff in narticinatorv irrigation management throu gh in-houne and external training. The uptake of information technology and modem business and management practices "1l be enhanced with the ma-ryng of the IT investment ilth the conn1ctiot;n nfthbe "nw offnce complex for HID, expected to be completed by May 2002. The ability to manage large and complex civil works corliUOsUU acO,wIUr tjUA.uiy t o1- ---A U LnuLctionhas been onile ofthe areas of -j± -d.-ul capi- enhancement. However, the proposed merger of HID, HSMITC and CADA did not take place, which was cons1UereU mimpUrwnU 4L uIe pIrjecL Udesign s' g. I Ui DJO, in ermU VI u J[Uj..Lue U1desIgnLaLurs, xmaS Ueen largely achieved. Overall, the development objectives were substantially met.

4.1.5 With the completion of main structures like Hathnikund and Pathrala barrages, Ottu Weir (and other major structures) and rehabilitation/ modernization of feeder and distribution canals, the water delivery to the service areas has improved considerably including lowering of transmission and distribution

- 4 - losses. The rehabilitation/modernization of about 1700 water courses coupled with formation of WUAs and training of farmers, enhanced water use efficiency and equity at the farm level (tail ender getting water). The introduction of AIP component has increased cropping intensity and productivity and also facilitated crop diversification in a limited way. WUAs are energetic and collecting adequate funds for maintenance, operation and management of the assets handed over to them, reducing the O&M responsibilities and costs of the Government. This indicates strong likelihood of the sustainability of investments.

4.2 Outputs by components: 4.2.1 Overall project performance was slow during the first half of the project period for reasons discussed in para.5.1.1, 5.2.1 and 5.3.1. Performance over the last 18-24 months has been very much better.

4.2.2 Rehabilitation and Modernization. The primarv obiective of the rehabilitation component was to repair damage to existing irrigation and drainage systems caused largely by deferred maintenance and bring the system back to acceptable nerformance. The modernization comnonent include renlacement of old structure by new ones and lining of canals and water courses. Major works under modernization include constructtin of Hathnimind Barrage (and Link Canal), Otti W.eir and Pathrnla BaTUrge which are the replacement of over 100-year old major masonry structures. For other works, structurally there is little distction bethee-n the rehabaifitowfi^n ann rnnAp'rvi',t.or -ompnonents (can rpb-h4atinn on/n.m lining of canals and water courses, canal structures etc.). The bulk of the Credit was devoted to the umpletuen-taon of these two hnpor-aUt compone.-.Lts ndvrAl.J Lil- rr.agemer.t&ofJL I V'Jraeorgd C-IJOLLU%,ctio Units and their separation form the O&M responsibilities. The quality of construction of these moderniztion aiid rehabiliationi works is genelly very good. in audition to UluinltLe work, the achievements detailed in Annex I are summarized in the following table.

Estimated Rehabilitation and Modernization Achievements by31 December 2001 item I SAR IICR ICR as %of SAR Canal lining (m2 million) 8.8 6.8 77 tcanal earthworks (m3 million) x__.9 18.2 204 Canal structures (number) 7,573 4,363 58 Drain cleaning (m3 million) 0.3 15.0 652 Watercourse rehab.(number) 200 265 123 tItem j SAR j ICR ICR as % of SAR Watercourse rehab.(km) 425 557 131 Watercourse modern.(number) 1,500 1,434 96 Watercourse modern.(kmn) 6,858 5 341 78 WUAs fohned (number) 1,700 1,280 75 WUAs handed over (number) 1,700 754 44 Still to be handed over | 526* (number) Il l * A further 420 watercourses have neen rehabilitated/modernized, but without WUAs being formed.

4.2.3 HID has shown great skill in planning and completing large amount of works in canals that can have only very limited closure periods so as not to disrupt water supplies for drinldng (including supplies for Delhi) and for farmers. The overall quality of construction is good as evident from the important civil works executed by HID, and also reported by Bank supervision missions. The actual Rupee cost of works (excluding Government's contributions) is about 74% of the SAR estimates for rehabilitation and 81% for modernization; for O&M, Rupee costs of works are only 52% of the SAR estimate.

-5- 4.2.4 The SAR approach to turnover of system maintenance to farmers was however very cautious in the initial years. The SAR stipulated that water courses be rehabilitated only when farmers had formed WUAs. However, no such stipulation was there for modernization of water courses, although priority was to be given to those water courses where farmers were willing to form WUAs. A Water Services Policy Supnort (WSPS) unit was to assist implementation of turnover of svstem maintenance to beneficiaries. tracking the program's progress and expanding its scope as the results warranted. Although GOH, in Fehniarv 1995, declared its intention of turning over systems helow outlets to farmers- nothing iuihtantial happened until October 1998 whenr GOH approved the Memorandum of Understanding (MOU) and draft Bye Laiws defining the responsibilities and aut-hnorities of WTAs. At tha§t th mie, onluy some 53 WUTAs w,ere formed (under both modernization and rehabilitation programs) and not a single water course had been handAd ovV to theL,T. A Overt l- he- per..o.-A l I 0o , HSX,ATLV had.LIA arv-A 40 water- co -ses under the modernization program without any WUAs. However, from 1998-99 progress started improving anU consis'.et Ugood progress hsb..U achi eLILVVeUsLnc 1777, WIU.L VY LJhavings UbVee fULII,eU anU functioning in 1,280 water courses. In addition, within the project area but independent of the project, another 790 'WUAs have been formed. Formauton oi these w UAs indicates that the success story was spreading amongst beneficiary farmers in general, even where the project did not have any direct intervention.

4.2.5 The WUJAs are generaily well managed, including maintenance of proper registers and accounts, holding of regular meetings and contribution of labor and cash towards maintenance. Farmers interviewed during the field visits showed very favorable response towards assuming fill maintenance responsibility, and there was also some favorable interaction with Department of Agriculture (DOA) officers. Quality of construction of water courses was found to be good. Training in Participative Irrigation Management (PIM) has been provided by Haryana Irrigation Research and Management Institute (HIRI) to HID and HSMITC staff and WUA members, and Trainer of Trainers (TOT) courses to 2,923 HID staff. Training for farmers which focused primarily on the motivational aspects of formation of WUAs, would require more attention to capacity building of WUAs. HSNITC has conducted two impact studies on PIM, one for 66 water courses and another for 125 water courses, which inter-alia indicate reduction of time to reach water at the tail end of water courses - by 30 minutes to 3 hours, average increase in irrigation area by 15 to 25 percent, and overall increase in farm income between 10 to 25 percent.

4=2.6 Rehabilitation of Augmentation Tubewells and Direct Irrigation Tubewells was included in the project, but did not take place since the State Water Plan which would have provided the basis for prinritizring thiese inv.eshtment hau not hben fiinnli7ed nn fime.

4 A.. 'Ope Mrao n aintnneeand . A manornasf nV TIM rnoniz,oni s connrh O n&M f services from construction agencies and creation of two Water Service Units (WSUs), Bhakra Canal WSU aiiu 'vesLeiu YaU.-.l.aI anual WSU.TV The 4LLV, Iponsib1V lelfIo theLXITI VI Uf tU. I1IjLV WplrU . As shown in Annex 1, silt clearance and bank strengthening reached about 83% of the SAR target and repairs to canal lining were about 92% of appraisal expectation s. Reco-very of Unaual O&ozM COS tS for the surface irrigation areas is reported to be over 90%. This was largely possible due to regular revision of water rates by GOH (4 times during the project period) and good collection rate of water charges Cnarduy any defaulters). However, allocation of adequate funds for future maintenance is crucial. It should be HID's policy to base the budget requests on proper assessment of the needs for maintenance rather than to match the maintenance budget to the funds made available, based on the current thumb rule (per hectare basis) allocation practice.

4.2.8 Agriculture Intensification Program (AIP). The component was added to the project in July 1997 and consists of training, extension, adaptive trials and impact monitoring. After initial slow

- 6- implementation, this copmonent picked un momentumn diiring the year 2000; with better coordinati.n between the field staff of DOA and HSMITC/HID. Positive impacts of AIP activity became evident only tniuarAd the Pnd nfthe nrnojet nerinA Staffand f1rmp,-r Training innh,l,pi tiA;T, nf,of7o nO A stcff rndA83 farmers by Haryana Agriculture University (HAU), mostly on water and soil management; training by HITRIvT of 426 DO!A .fF and45 fa r.si- *mnager..ent A -or,,AAA-ddii^1 48 DnA training camps during the year 2001 for 1,460 farmers. DOA also organized 4,525 farmers to visit agricutural fairs and ree&c ce,es , -a,e ,,e-iuc &,e xhrg rga- Traininrg achievement for staff is generally satisfactory, but delivering useful technological messages to farmers could nave been improved. Extensioin auvice is given by Agriculture uevelopment Omcers (AIDO) and HID/HSMITC Junior Engineers (JE), who work individually within their fields of expertise. All WUAs visited by the mission had such staff and most farmers seem satisfied with the services provided. On this basis, the extension sub-component is rated satisfactory. Farmers seem eager to be trained in improved technologies and ready to volunteer labor and land for demonstration plots, but reported inadequate training opportunities in agriculture subjects and in the involvement in planning and implementation of demonstration plots. Adaptive trials by HAU have included 119 irrigation scheduling/water management trials for the major crops in kharif and rabi seasons in 12 districts, covering most of the project area. These addressed relevant problems in crop production and were used for visits by DOA officers and farmers, but it is not clear how the results are transferred to farmers. Also, the adoption rate of the recommended technologies need to be monitored and documented. Impact monitoring in AIP remains weak, despite the suggestions of most previous supervision missions. DOA has finally included monitoring in its "Action Plan 2001/02". State and District Coordinating Committees and a Core Group Committee meet regularly, ensuring good agency coordination and monitoring of progress. GOH has also set up small working groups comprising Agricultural Development Officers (ADO), HID Junior Engineers (JE) and farmers, in 50 pilot WIJAs. to coordinate nlanning and imnlementation of field level activities. These working groups could he trained to conduct impact monitoring of AIP. These groups need support to carry out their activities, ensuiring effec-tive fairmer participation.

A.2.9 I n t +1lStegBelt.-{oe +epoect com...nenced,m set up sepWraate 0or;s"ct- Units for each of the Bhakra and the Western Yamuna Canal systems, and similarly two Services Units for t_A___.____1_ _- ,,___..1--- A -- A1 v_ l__ .z____A ______,A uJ;1kLWu systems uouvuing buul wrLVIt bujAly aL&U UU1bU1UULIUUL, 1ulIU uLLHar1Va. t IIUIUaI ul uuLt;r Unklugus were also made within the existing staff establishment to make HID more functionally orientated, including estaDbishment of an Environment Ceii, wvicn nas ueveioped successfiuly and produced an HiD Environmental Policy. Participation of beneficiaries in planning and implementation of irrigation schemes (at water course level) and transfer of O&M responsibilities to w'uAs are very significant institutionai changes which developed rapidly during the last two years. With the training of lower level functionaries in participatory management and progressive transfer of O&M responsibilities to WUAs, necessary decentrlization and delegation of authority has been effected which in turn improved service delivery to the beneficiaries. However, this change in approach to water management and service delivery is restricted to the areas where WUAs have been formed and functioning under the project, which is about 20% of the aggregate area under the two Water Service Units.

4.2.10 The inability of HID to use the opportunity provided by the project to modernize and computerize the budgeting and accounting systems represents a very serious loss. The contract was signed in March 1998 and the software proposals (BUCAP) were finalized in October 1999. The reasons for the long delays appear to have been HID unfamiliarity with the use of computer systems. The second phase, which aims at putting the system into operation is moving slowly. Some 58 computers have been purchased, installed and commissioned and it is proposed to train an additional 120 staff in the use of computers. Implementation has been severely constrained by the fact that HED in Chandigarh is located in a number of disnersed offices and computers are also to be installed in four other locationc (T4isar- Rohtak, K;mrnal 2nd

-7 - T-nAN Th..2. -rr%w1pmca ^rp 1i.r .te-, hp'blarrplv nv,ppmnep whpn PMf mm ;nvesh,tn the nipur TTpsi-^ii,rtpr Building at Panchkula financed by the project.

4.2.11 Other important studies include: (a) modernization of communications and provision of an ,: I_% A DI _- _ .+_ -- At +_ _Al_g.{_AA A_.At_ |A__ : _r_wJ.IIUILlaULL bya1, vuj uLawur u. a adLUTV E Jiua, kvj plU99aOuuu vu a ~.+rAaudwu,yaLuuv AMA FLau in participatory irrigation management; and (d) preparation of a socioeconomic and water services baseline survey for the project. 1Tie Sa proposed a s-tate-wide comViimunLicatiun systelU for LrLansitinug hydrologcal and operational data; and an information system with analytical and modeling capacity, covering hydrology, meteorology, land cover, land use, demography, cadastral information and geology. Consultants were appointed in late 1997 and reported on this in October 1999. The contract has been awarded for communications equipment. HID reported that the computer equipment and software will be instaUled and commissioned in the new Headquarters building as soon as the latter is ready. The State Water Plan, has been prepared by an international firm of consultants appointed in 1998. Their draft final report was submitted in April 2000 and has now been finalized. The plan summarizes in detail the water resources and demands for water in the state and provides much basic data, and indicated possible future developments. On the basis of the assumptions made in the report, the demands for water vastly exceeds the water availability.

4.2.12 Policy Reforms. Progress in policy reform has been mixed. The unification envisaged in the SAR of HID, HSMITC and CADA has not happened, nor has there been much advance on groundwater legislation, the draft for which remains under consideration by GOH. Draft Amendments to the Haryana Canal and Drainage Act, 1974 to provide a firm legal basis for the Farmer Organization Transfer (FOT) program are also under review by GOH at the time the ICR was written. On the positive side, there has 0 been a steady increase in water charges, which are ciurrently estimated to cnvf-r over 90 /%of O&M expenditure, and there has been successful WUA growth. Many of the policy advances expected in the SAD h-Ve bee.n del^VPA hv thP -1te PrIr'r-tionn nfthP Rtntp W2tPr P1^n NUMPI (n,,ra A 1 1 'n lnAfhP inability to install computerized management and information systems. Nevertheless, a draft State Water

Io uuty 1100 UtienA y1epm-t- d-h waidng for1 aWLptn by C-ovrme.t.V CH .fl± its JommiUIO for water conservation and integrated water resources management by creating a State Water Council for tiuug pPolcy decUisLV1 oJn wLater rcsouirces aLLouUaLiVii andU UdVUVVlJ1UQLLI, anU also a high poUWeI VT ,VtL, Conservation Mission to look into the details with a holistic approach to inter-sectoral water allocation and use.

4.2.13 Gujarat Earthquake. This new component was added to the project to meet the emergency funding requirements of the Gujarat Earthquake Reconstruction project. A Credit cancellation of SDR 37 million (equivalent to US $ 48 million) was agreed with the Borrower. This amount was re-allocated for Gujarat earthquake reconstruction by creating a separate Category Z by amending the Credit agreement The surplus was generated partly due to variation of exchange rates between Indian rupees and SDR/US$, and partly due to not reaching the some physical targets and quantities as set out in the SAR. By the end of the Credit Closing date, SDR 36.83 million has been utilized for construction of temporary shelters for people whose homes were damaged by the earthquake, reconstruction of fully collapsed houses and repair of partially damaged houses in the affected areas. Supervision reports indicate that the procedures established for damage assessment, identification of beneficiaries and implementation of the owner-driven housing reconstruction activities progressed satisfactorily through a partnership approach involving government, local communities, the private sector and NGOs.

4.3 Net Present Value/Economic rate of return: 4.3.1 The economic analysis of the project has been based on the results of sample surveys carried out by HSMITC on 125 water courses, crop budgets from the Haryana Agricultural University, published

-8 - statistical data and also those available with the Department of Agriculture, Harvana and other data on costs and benefits as available with the Haryana Irrigation Department and other Govermment/public agncyneS. This was qiinnle-.mented hy the infnrmatinn cn1-pietPA iiiirirny the feld visits and cnn-ltatinn with the beneficiary farmers. More precise data on agriculture production could not be mastered in the absence of a detailed impact assessment study, although a.nntrart f-r c-h a stu. dy ,vasnhderonsidA-,;on Adr,ng the ICR mission's visit. The economic analysis therefore relies on the mission's judgment, assumptions and e-0a+eUJLUCLLV, ars..gaGiaLL1r out'JUL ofV.I LUI, fiAl.uhILMl.L obs-rva;-oJ~ VtJOVJIOMJa aJULa.-A A-ul-.--+-1kUIiiJUI.VU rec.--A-.VI.UUa. TheI Uc .-1LUESesu 1+ a-_aLv SUiULdISU-Lm IMLEUz III Annex 3 and detailed in Working Paper 3 (in the Project Files). The overall economic rate of return of the project- l ~ - 1IAnl 1___ .L. I on/ -_ -~ A_1 -. pFoUJect is cUaIUaLCU aL 147o, sorUnW-wUL tUWoe UlWil Uhe 1070 ULJuLOU aappraisa4L UU tosrnaiierLu bUenIits, offset to some extent by savings in costs. The ICR recalculation allows comparison of the results of the main components - whicn was not presented in the SALR. it snows that the resuit is best for the component on watercourse lining and formation of WUAs (27%), followed by flood protection and drainage improvement (i5%), and lowest in the case of canai lining, improvements to canal structures and improved canal operational efficiency where the economic rate of return was calculated at only 9%. A separate analysis of the Hathnikund barrage construction showed a better result at ICR than at SAR, mainly due to improved quantification of benefits arising from prevention of failure of the old barrage, as summarized in Annex 3.

4.4 Financialrate of return: 4.4.1 The SAR included an analysis of the financial implications of the project for HID, mainly as a result of increased revenue from water charges for irrigation. As shown in Working Paper 3, Attachment 1, water charges have been steadily increased since the commencement of project implementation. Default in payment of water charges by farmers is virtually unknown in Haryana and HID estimate that water charges revenues cover over 90% of system operation and maintenance (O&M) expenditure. However, the ICR mission have not attempted a financial analysis since there is only information on amount spent on O&M - nothing on the ultimate O&M needs - which would require detailed surveys and analysis to be undertaken. Also no clear method is available for deciding how much of the large HID establishment costs relate to regular operation of systems and what proportion should be accounted as part of the capital costs of scheme development. HID is already committed to a program of reduction in staff which should significantly reduce future total operating costs (HID has already abolished a large number of vacant posts and embarked upon a program for reducing the staffing strength by over 4000). In these circumstances the nnly general conclusion that can be reached is that due to the policy changes promoted by the project, the financial position of HID has strengthened over the implementation period.

4.5 Institutionaldevelopment impact: 4.5.1 The project impact on HID has been less than what was expected at anpraisal. and is therefore rated as modest at this time, but with the potential to lead to substantial improvements. The setting up of the separate Coinstrnction and Service UInits early in imnlementation enabled HMlT) onerate in a far more functional manner. Turnover of the management of the water courses to the farmer organizations (WUAs) has-been the r.nnt eignifira-nt *hanig in the intiti,tinnal a?rrneTemenrt whhi- h f6aciliwt.afA iA-m.rnr^eA sr delivery to the beneficiaries. This resulted in efficient water utilization and equity in distribution at the farm level mI.4U-A-.4_. 5 A. .- AeoeagA-+i^.C&Id - _ prod. v ..wIhe re llJrlr have- fo-Vuuu e dA assumed responsibilities of management and O&M of water courses. Other important developments taking

1_tA - 1L A_-3|9 AX _ _ _ _ A - I. A- +A- I__ A -__A_Ot.A __ __A_ At L- I _- 11Xl t_- _- b|I- klorn" __ pUWU ULLULU WLU UI UJ11yVUVULLaLLUI LU1lIUUV ULI IULiU UVV1UUS lUJdLdUUII IiiUl LLLES W .lU rlUI ka W r) UiU the installation of new communications, information, budgeting and cost accounting systems, which are expected to be proceeded with as soon as tLe new hiD Hieadquarters building is compieted. GOii's commitment to water conservation and integrated water resources management came towards the end of the project, and would need time to see the impact of these policy changes on overall finctioning of the institutions.

-9- 5. Major Factors Affecting Implementation and Outcome 5.1 Factors outside the control of government or £mpiemenng agency: 5.1.1 Unprecedented rainfall and flooding from July to September 1995 severely disrupted initial project imp.lementation and delayed-work for four months. A;l project staff and resources were diverted to flood damage repair and relief works, not only during the flood period but in subsequent repair and restoration of the damages. rioods caused furinher delays in 1998.

5.2 Factorsgenerally subyect to government control: 5.2.1 Project start-up was slowed by a nine month delay in approval of the project by Planning Coimission, GwI from March 1994 to January 1995. hne State's policy of prohibition in the i99-i998 period resulted in a sharp reduction in revenue with consequent acute budgetary restrictions. These difficulties were firiher compounded in i998i/99 by a revision of pay and allowances of all Government servants and pensioners in order to accommodate the award of the Fifth Pay Commission set up by the Government of India. Slow release of land under the control of the Forest Department also delayed start-up of some of the major works. Very long, and still unresolved consideration of groundwater legislation drafted in 1995 and lateness of the SWP prevented implementation of the groundwater development components.

5.3 Factorsgenerally subject to implementing agency control: 5.3.1 HID staff7s unfamiliarity with IDA requirements led to considerable delays in awarding of tenders and a very high level of re-tendering. Over-frequent re-posting of HID senior staff also discouraged any build-up in the momentum of project implementation and had a negative impact on project planning, management, coordination and monitoring. Delays in implementation occurred as a result of slowness in decision making process, particularly in difficult cases such as canal closures and procurement of equipment and consultancies, as well as due to inadequate staffing and lack of incentives for engineering design offices.

5.4 Costs andfinancing: 5.4.1 Total project cost at the time of ICR mission was estimated at Rs. 19.0 billion (US$474.5 million) or 102%(98%) of the Rs. 18.6 billion (US$483.4 million) cost at appraisal. This total includes the Government's contribution (on land acquisition, O&M, coordination, management etc.) which rose from the SAR provision of US$ 225.4 million to the level of US$ 267.74 million due to extension of the project period as also increase in salary and overhead costs. Costs of the individual projiect components are itemized in Annex 2. Whereas the expenditures on rehabilitation, modernization and O&M components more or less match with the SAR provisions, the most noticeable change in expenditire patern h g occurred in the institutional strengthening component which is about 37 % SAR estimate.

5.4.2 FinancialManagement has been rated as satisfactory over the life of the project. The HID ,.a;nt..,a thaoesrrn,intcrsmet;n the Ronl'c ron,,.entu,o end rornllr a..ibi,.en.cn c,1 mswere . ade~ following the agreed procedures. However, some weaknesses in financial management and accounting have bw^^id..i<.eu~~urn~u nhih115A41 incUAL.U Je J a feI Al~Jjd ---LA L nei_Aes:^uUI1uVjVULI~IWLLCU__'eso re cledb the ---[J4.,'ect, tyw -whicwmnwas was subsequently disallowed by the Bank. The HID which was responsible for the implementation of the project had submitted regular a-udit reports within,the due dates anud these repos were found to be satisfactory. However, the project could not submit on time consolidated audit reports covering all associated implementing agencies, particularly in respect of HiSiiTC, reportedly due to the delay in engaging of the external independent auditor by the Company Law Board (a statutory requirement) on which the State Govermnent had little control.

- 10- 6. Sustainability 6.1 Rationaleforsustainabilityrating: 6. i.i Overall sustainability of the project will depend largely on the ability to levy water charges which reflect the true cost of water supply and for HID to receive sufficient budget allocations to match O&M expenditure needs. Since water charges have been increased to come close to O&M expenditure of i-il), sustainability of maintenance of irrigation infrastructure (diversion structures, main and secondary canals and distribution systems up to minor level) is rated as likely. Regarding WUAs, the depositing of contributions in common accounts to an extent in some cases equivalent to about two years O&M costs provides positive evidence of the members' commitment. However, it was noted during the field visits by the ICR team that HID was yet to assume full ownership of the WUA turnover program which was being carried out mostly through the HSMITC. The sustainability of investment in watercourses is fully dependent on the ability of the WUAs to operate and maintain the watercourses. Though many of the WUAs are showing positive indications that this would be achieved, quite a few of the newly formed WUAs may need further hand-holding. Because turnover of WUAs occurred mostly during the last two years of the project, sustainability of the WUAs and water courses under their management will be evident only after some more time. These WUAs would require continuous guidance and assistance by HID/HSMITC for their capacity building to achieve institutional, technical and financial sustainability. This assistance should he nmvided to the WIJAs even after the nrniect comnietion date to eLnire continuous support for the associations to become wholly sustainable. The positive indication is in that the menvPmPnt of fnrn,itinn nfWTTAs aind tnrnqfpr.rina nflA°rP vnnrndihi1iti;Pc hue ,ninped m-rnd ov, er the last 18-24 months of the project, which also enthused other farmers in the locality to form additional 790 WUAs (not funded from the prject). On a si-la note, the delay in a,- n po.Lnc -es 44l1+.e. end of the project creates some uncertainty in the sustainability of these changes. However, early indications are

that LAM GJVV .UULLentJi sious abutcaIIyG*J inU juL W £LU tLhe 1JtiLtULUUI rfL-.siiLi3. %J V,IO.Il DuaLMUa)liU VA the project is, therefore, rated likely.

6.2 Transition arrangement to regularoperations:

W6..1) .S aIMost~ I.M.JO '.of +16- FW1--p.oJec ;nv1.+-tUL0J.10l'UlW L +_atA Stos,OLMflJ./ - t&%ILu0, -. - t an' 1. Cwoau..-an tUCUldA-n- VVAut.fl fUhichh_eUen vl Vt UL..% AUnop.-u UjJJv1QLIUU for many years and for which operation plans are already well developed. However HID will need to pay p-[UUL%;I11 I:LLLWIUULI LUJCIbUIV LUIULWI Wi2MA tL-UULbV JJIV%U UliUCI LUI) IUJQ%; iUL, LWUU~U UVYL LUCUWUV Ut for full operation and maintenance, as early as possible. For this purpose a Project Operation Plan will be requrea. ALSO, in adiuion to providing funus for tue compietion oI lining of water courses wmcn wiu oe spilling beyond December 31, 2001, efforts should also be directed towards forming WUAs in 420 water courses Hined earlier under the modernization program. As there are now many success stories within the state, visits may be organized for farmers from other areas where WUAs are still deficient. In addition, the Haryana Canal and Drainage Act needs to be suitably modified to empower the W-iAs with necessary legal authority to conduct their business without any impediment from any farmer including nonmembers (para. 4.2.12). Last but not the least, as the principal manager of the water resources in the state, HID needs to take greater ownership and responsibility of the PIM program.

7. Bank and Borrower Performance Bank 7.1 Lending: 7.1.1 Pursuing the water resources management strategy successfully accomplished elsewhere in India aqnd abroad; this nroiect adonnted a simi1ar annroach of rehAhilitAtion and moderni,tinn nf eiritinr irrigation and drainage infrastructure and improving institutions for irrigation management. The focus on the pro,ect esigcm at evntrt nn inctiH,hcnon ivpulnemmnt wsakatr' arnvtivote artwoahr ,inmiavco &tar ,x,.n . Aa'A,1 entrenched taditional practices for O&M needed support and guidance for reform. However, the Bank

-11 - should have given more attenfion to assess the Borrower's commitmnent to the nronosed reforms and preparedness to carryout the same during the initial years of the project. The Bank did not pay enough attention to upfront procurement actions to en sure the readiness of the Borrower to implement workC during the first year. Also, adequate emphasis was not given in the farmers organization and turnover component ~,lhch xs wealyde AscigmAA The need of the A TD nnmnr,n t icrh iwas inf--h,nAe la+t houhe!dil have been foreseen and included in the original design. Therefore, Bank's performance in project p.reparLation and apprl has been- rate-- uA'ufd7.

V-F-. --. 7.2.1 Supervision, during the early part of project implementation, focused mainly on engineering issues .-A , somenf success in helirng TTTb ;nrove +othe pnrfoge n.-A lfiy of mnf-lnn,n+aton- A m.ao positive contribution of the supervision team was the introduction of the ALP component after the mid-term kLVVIGW.r- iew. XT-_ez^Les1-11V1VI 1LV0a +'eULLI~ 1FOT%' '%J I 4ZIUand rILIE^A %UI1JULLLJJ%.1iLcopnet ULUAid LIUL,-.o pIUJLV&~0rgesa a.0 jJ14llI1%Upla_1____ ULUJAu.ing ur LI1,thA---i IUnUd. IULLI years. Progress on other institutional development components were also not satisfactory. The supervision team cu-udd ha-ve given more aLeniuon to-these aspects during ute early years of ihe project by providing better skill mix in the team. The project received focused attention on farmer participation in O&M of water courses and AlP during Tne last 18-24 months, in addition to accelerated implementation of irrigation infrastructure. The end May 2001 workshop in Haryana (facilitated by the Bank) proved extremely valuable in strengthening the dialogue between the Bank and the Borrower and drawing up action plans for institutional (water sector) reforms with a view to introduce a holistic approach in Integrated Water Resources Management. These efforts had a direct bearing on the development outcome and sustainability of the project. Bank's overall supervision is therefore rated as satisfactory.

7.3 Overall Bankperformance: 7.3.1 IDA was correct in giving emphasis under this project to better water resources use and management. A good mix of staff at the HQ and the field office had ensured continuity and efficient use of Bank resources. The inclusion of the critical AIP component provided added value to the project outcome. Some of the critical implementation problems caused by floods, or financial crises could not be foreseen at the preparation stage. The Bank provided necessary guidance and help to the Government in tackling these problems and improving the performance of the project. However, the Bank could have taken some more proactive initiatives during the initial years to correct the design weakness and remedy problems facing proposed institutional changes etc. The Bank was sensitive and correct in extending the credit closing date by one year. Overall Bank performance on balance is therefore rated as satisfactory.

Borrower 7.4 Preparation: 7.4.1 Performance during preparation appears to have been adequate, although GOH should have brought to IDA's attention that the institution reform suggesting that HID, HSMITC and CADA should merge into one organization, was unworkable. The state institutions were apparently reasonably equipped to undertake the physical works for rehabilitation and modernization of irrigation and drainage systems. However, the commitment of the borrower towards institutional reforms were not evident particularly during the initial years which resulted in very slow progress in software areas.

7.5 Government implementation performance: 7.5.1 Government support to the project in the initial years was weak with considerable delays in taking decisions on procurement of works and consultancies. Apart from restructuring of HID on functional lines by separating construction and O&M agencies, other institutional reforms were very slow to take off. However. Governments nerformance was generally adenuate during the later years, althonuh duie to extreme State funding difficulties project implementation progress was severely constrained during 1996 to

- 12 - 1999. GOH could have played a stronger role in encouraging HID to move faster in implementation and to overcome bureaucratic difficulties such as delays in release of land required for canal excavation and works construction. GOH performance on policy change during implementation - in particular adopting a steady increase in water charges to more fully cover O&M expenditures is rated as highly satisfactory. However, the pace of other policy changes did not match this performance.

7.6 Implementing Agency: 7.6.1 Performance of HID, HSMITC, HIRMI and DOA has been largely satisfactory although HID was very slow in starting and failed to take up formation of WUAs quickly enough. Good quality construction of large civil works was the particular strength of HID. However, HID's performance was affected by its inability to adapt auickly enough to IDA's procurement procedures and to push ahead vigorously with the computerization and software aspects of the project Inability to provide periodic closures of running canals le] tn slow imnlementation of the rehabilitation cnmnnnent diirina the initial vears which deficienrv was rectified during the last two years of the project. Handling of consultancy contracts were also not catkfnw'tniry These dlelayu resliltel in snme ornnnnpntc still ren ng iinrnmnlepte at the rrPedi t plwneg date. DOA also took a couple of years to gain sufficient momentum in the implementation of the AIP componn.t

7 7 t)ua,.nll Rnrrnwvr nDrfrwnn,ro 7.7.1 In view of the difficulties listed in para. 5.1.1 and 5.2.1 above, the Borrower's performance is rated on balance a5 satisfactory, if vo.es diso,,poin*,,g,,,,hen compr..ed wit.h the progrss projected at. appraisal and actually achieved during the last two years of project implementation.

8. Lessons Learned 8.1 The mission's list of lessons learned as a result of the project implementation experience are as follows:

1. The policy framework - macro and sectoral - conducive to reforms should be in position before a maior institutional reform program can be implemented. Up front commitment of the Borrower for injtttional changes iSneeded for successful imnlementation of reform nrocess. 2. Efficient and effective WUAs are the key to sustainable irrigation and agricultural development. WUAs enpedtn he fnrmed dlirina e-nrly stnae of the nrnoiert nnd innvlued in the n-nlningin desigmn -nd implementation at appropriate level. 3-- tahol eithi r h.ive a flrmly 4mne.-niinA ,wnmran for nettiit.tw^a1 refnrm ;in .Auance of a major investment project in capital works, or - ideally - have an initial project or project phase supporting

1J.Ui,tUtiUUaL &JLIrUefor and'.L dvo e U to beAWAU wY by zsecon prvjJLA orV. projectLF L phase in WhJIch Lthe reformed institutions implement an investment works project. A A i.L- …- L.- … P1- A1!-…-- '4. tAuvwaLc acUtior audJ IedUinUes Uo UiL UIML UL UU11UWr,w/1Ju1p VnUL1Lg a1genieV are reqU-,U JuLforiiiLLy project implementation and capacity building.

9. Partner Comments (a) Borrower/implementingagency: The bofrower has submitted comments which have been given at Annex 8. (b) Cofinanciers:

(c) Otherpartners (NGOs/private sector):

- 13 - 10. Additional Information 10.1 The ICR mission have prepared three working papers, namely: Working Paper 1 irrigation and Drainage Working Paper 2 Water Course Lining and Water Users Associations (WUAs) Working Paper 3 Economic Costs and Benefits

- 14 - Annex 1. Key Performance Indicators/Log Frame Matrix

Outcome/lmpact Indicators: Indicator/Matrix T Projected in SAR | Actual/Latest Estimate | Water Resources Planning & Management Reorganise HID Yes Done Prepare State Water Plan Yes IDone, but very late Update SWP every 5 years Yes Lot done because plan only just finished No new wells in dark zones Yes vone Limited expansion of wells in grey zones Yes Done Beneficiary participation Ys Enhance Agricultural Productivity I;;WSCe ^ AXA...... ~~~~I .. . IV_;" %...... A crpig itensi6ty Yes Yes iversif t.^.higher value crmns YesI To some extent but not much |Increase yield and productivity Yes Ees Increased water savings Yes lYes WUA formed and operating for at least 3 years Yes Formed but not operating for three years WUAs effectively maintaining watercourses Yes jHard to judge, mostly only recently handed over, although good promise is indicated in .any of the water courses Assure sustainabuity of the environment Decrease in waterlogging and salinity Yes Yes Changes in waLer tLaue leve, s Ul"I &m ay zor.e Yes I Less groundwater pumping Yes es l

mprove sevce delivery to all users | Yes Isomel Imnroved plannin. programmning and budgeting I Yes Isome IFully recover O&M costs I Yes Ainost |Full O&M carried out by farmers | Yes |Farmers carry out O&M of watercourses | I 2I1Zonly |Rigid groundwater management I Yes ISome lWater rights licensing system I Yes INo I |Increased delegation of authority | Yes ISome IStatl speciaiisation ana continuity Yes Io some extent, Out suii cause for coucenm IRecover capital costs | Yes !o Issu15bUc FOF'J I dec^Urti L.VIdJL voU V-. .Wes Eliminate arrears to HSEB Yes |Yes 1rhange MD to water ReYeouNces De-parn1 nt , No

lutnut Indicators., Indicator/Matrix Unit Projected In SAR I Actual Latest Estlmate lDisbursement | M$ 1 258 | 210

Canal liningl lll Bhaka Canal System I_m2 1 633,700 1 2,006,300 West Yamuna Canal System | _m2 747,800 1,586,000 I Bank strengthening l _ I _ Bhakra Canal System | m3 3,090,000 9,076,000 -,.~~~~~~~.I -. oJ i nnn n no I AnnL ~~~~~~ L 7,UvO XVVV I est Yai una1U CanaujlnISyIteI 1 1 J1JI,VVV Masonry Structures l l l -akr Canal Sysem _ NoW. 2567 T 1944 Rest houses 0 6No6 Gates & gearinz I No I 0 1 2 West Yamuna Canal System No 3415 J 1,721 IndicatorlMatrix Unit [ Projected in SAR 1 Actual Latest Estimate Rest houses No | 0 4 Gates & gearing No 0 22 Diversion No 0 1 Drainage Clearance M m3 2.279 is Siruciures NO 7i1i3i River Control er,b_IAr> km 100.11 176__Ii Std,purs,pitching No 45.26 132

Watpren impa Rehabilitation kmi 425 557 Dismantling No 425 Augmentation Tube Wells __ Carrier channel repair kmi 100 O Replace pumpset No 240 0 Replace control panel No 240 0 Replace compressor No j 2 0 Modernisatlon I I I HK Barrage No 4 1 I Ottu Weir I No I I I a-iraua arrage at dLupur I No | Canal fining I Im 113 i h^-l, flo,l Iste m |r 00 4322 West Yamuna Canal System 000 m2 3111 1,837 Structures No 1636 1 722 I Watercourses I t I I Lining I km 6858 I 5,341 Buildings | No 120 21 llmproved O&M I ___ I Canal system maintenance I _ 1 Silt clearance 1 M m34 37 I 39 Lining repairs UU0 m2 880 1 823 Weed clearance M m2 89 | 212 Structures | INo 1 29,0UU 4,733 Pump houses No 32 217 -D-anageSystem maintenance I 2 _ Silt clearance M m3 | _ _22 13 I Structures I No 1 2-390 1 370

PmpI houses | _No 146 134 I River control works I I I Embankments | kmr 915 1,474 Structures _ No 916 { 260 EWatercourses T Lining repairs km 165 149 LAugmentation TWs pumps | $M _ _7.4 9 Irrigation research & training Inst 1 1 lWater Users' Assocations I I I [ Watercourses lined No 1500 1,435

I WasXWu'uU-bfi .viuabili+sd | No 20v 1 265 WUAs formed | No | 1700 1 W.tercnhlse h.,d^,.A nuPr *o WTA No I 1700 754 llnstitutional Support InsiuinlSConsultants & studiesi I $'000$00I 1 1,01.600 I1 1_997.99 Study tours I $'000 100o 7

-16 - Indicator/Matrix Unit Projected In SAR Actual atest Estmate Training Cost 1S000 200 19 Trainees No. 13,422 Research a development Drainage collector design Study 0

opflna_L W A _fl.Atfl .A. ______a______Equlpment & vehles I rnmmlters N o f -Mainro I 0 Jeeps No 208 230 Pick-up trucks No 0 30 Cars No 36 14 Motorcycles No | 100 0 Buses No 2 2 Tip trucks I No 50 1 15_1 Special tractors No 5 0 Excavators I_NO_1 iUo____ Graders _ _No__ 20 HID Offce buudiug .

-17 - Annex 2. Project Costs and Financing

Project Cost by Component (in US$ million equivalent)

Appraisal [ Actual/Latest Percentage of I Estimate Estimate AD praIsal Project Cost By Component US$ million US$ million Rehabilitation 87.8 99.79 114 Modernization 184.1 162.63 88 Improving Operations and Maintenance 177.7 199.15 112 institutional support 3 J.a 1Z.8 j 3 Total Project Costs 483.4 474.37 98 Total Financing Required I *8- A7437 9 8 Note: All costs include contingencies and as reported at the time of ICR mission

Project Costs by Procurement Arrangements (Appraisal Estimate) (US$ million equivalent)

Expenditure Category ICB LCB Consult. Other N.B.F. Total Cost |______|_ Services | i . Lana . . 2. Civil Works 51.3 197.1 49.2 297.6

3. Vehicles/Equipment ._ 1 1 t t 3.5 L 3.1 Vehicles 2.8 0.7 3.5 (2.3) (0.5) (2.8) 3.2 Equipment 13.6 4. 17.7. (10. 9) (3.7) I (14.1) 4-Technical Assistance j(09 #.I ruuicy Suppuri 0.7 (0.7) (0.7) 4.2 Implem. Support 1.2 1.2 (1.2) (1.2) 4.3 Capacity Building 1.7 1.7 1 (1.7) _ _ _ __(1.7) 5. Increm. oper. costs I I 28.0 127.4 155.4 5. Increm. o I jI I~~~~~~~~~~~~~~~~~~~~trI to r I | I | ~ ~~~~~~~~I k8.0) I ~ ~ ~~~~I (8.6) I |Total | 67.7 | 201.2 | 3.6 | 77.9 | 132.9 | 483.3 ! ! (59 4) ! (165 3) !(59 6) 1 (29.7) !! (258) ! Note: Figures in parentheses are the respective anounts to have been financed by IDA.

- 18 - Project Costs by Procurement Arrangements (Actual/Latest Estimate) (US$ million equivalent)

Expenditure Category | Procurement Method' Total Cost | I| l!CB MNCB I[Oher N.B.F. 1 l 1. Civil Works l l l 1 t il) Ir fl I l( nA V.11) B.3, B.5 b) V... B. A (93 . c) PartC (33.72)

Consultant Services and

. Incremental Operating | I 1| | (3-56) 1 |Total l l l l t (343.59) Note: No other ,Ita are available tn comnlete thiq table nf prniect nosts hv nrnocurement arrangement other than the total MDA disbursements by expenditure category shown.

1/ Figures in parenthesis are the amounts to be financed by the Bank Loan. Ali costs include contingencies. 2/ Includes civil works and goods to be procured through national shopping, consulting services, services of contracted staff of the project management office, training, technical assistance services, and incremental operating costs related to (i) managing the project, and (ii) re-lending project funds to local government units.

Project FinanCinei byi Comn ennnt tIn I I mrlI!ln aquivalentI)

! ~1Component Apprsalsa! Estimate 1 ArtnaIIatestlmntp I Pereentane fAnnra ! I Bank /b TGovt. /b I Total /c 1Bank I Govt. I Total Bank I Govt. I Total I

RehabJ 257.61 177.96 84.46 262.42 102

.L-oq,-"1 1 1 191.24 1 I!7. I 181.6 1 O15I 11LA

;:z^n e_azo 1_nnnrt1 'A A 1 119 1 I R 1R1_n190 QI_I1 T7K

TnUtl Prnip't net 1 25R 0 1 225 4 14R8340 2066 1267 74 1 47417 1 1l l 98 Notes: a/ Data were not available to disaggregate the rehabilitation and modernisation components. b/ SAR did not provide the cost table showing project costs by component and financier. c/ SAR did not provide the cost table by component of total project costs inclusive of physical and price contingencies. Accordingly contingencies by component have been allocated in proportion of total baseline costs by component.

- 19 - Annex 3. Economic Costs and Benefits

Present v alue of rlows and Economic Rate of Return tER, j Item Appraisal /a | Latest Estimate (ICR) /b Beneits (RKs mllion) ic ZO,U I1 14,/35 Costs (Rs million) /c 18,821 12,702 Ne. BenefbI - Np%r v km mMIUon)ic '7,190 2,036 ERR l18% l14% KFrom SAR irnfated t* e-A 200)nndl p;_e f L 7) , Table I ) b/ From Working Paper 3, Table 10. cl At 12% discount rate end 2001 prices.

The mamn reasons that the re-estimated ERR and NPV of the project are lower than those estimated at appraisal are: (i) the benefits have been re-estimated 43% below appraisal estimates; and (ii) the re-estimated costs are 33% lower than those estimated at appraisal.

Project Component | Net Present Values ERR II R'millinn end 2001 nrieci MM l Be__ _ _ I__ CostsBenefits [Net Benefits _ _ . Canal Lining, Lmnprovements to Canal Rtnintnreq I IS644 I 6,Rnn I -I1 56 and Improved Canal Operational Efficiency I l Water Course Lmining and Formation of Water 4,373 I,869 1 2-04 27 Users Associations 6l I1l Flood Protection and Drainaee Imnrovement 4.719 1 4.032 687 ,~~~~~~~~~ r , . ~ . . _ _ _ _ .1. _

sT-uhnikninul Rnrvnus

Scenario SAR ICR NPV (Rs'mill) ERR (%) NPV (Rs'mlfl) i ERR (%) 1. Collapse after 5 years nc 40 8,422 242 2. Collapse after 10 years nc 14 4,025 36 3. Collapse after 15 years _ nc 8 1,530 19 All NPV's are in Rs million year end 2001 prices discounting at 12%. nc = not calculated

- 20 - Annpe A fank Innuite

(a) Missions: , Stage of Project Cycle No. of Persons and Specialty Performance Rating (e.g. 2, Economists, 1 FMS, etc.) Implementation Development | entificationleMonth/iear Count Specialty Progress Objective

I dentification/Prenaration IIII December 1991 2 2 Economists Februarv 1992 4 Engineer. Economist. Institutions Specialist August 1992 1 1 Economist August-November I I Engineer 1992 November 1992 1 1 Environmentalist March-Anril 1992 4 2 Engineers; 2 Economists

Appraisal/Negotiation July 1993 5 1 Institutional Framework Splst, 2 Water Res. Splsts, I Financial Management Splst, I Construction Specialist September 1993 2 2 Management Information Splsts. September 1993 I I R&R Splst |Supervision March - April I 1 MIS Splst 1994 September 1994 4 3 Irrigation Engineers, I | S Procurement Specialist March 1995 3 3 Irrigation Engineers S S November - S 3 Irrigation Engineers, I U S December 1995 Procurement Specialist, I Sociologist February 1996 3 2 Irrigation Engineers, I U U Construction Splst May 1996 5 2 Irrigation Engineers, 2 U U Construction Splsts, I Farmer l l l U~~~~~~~~~~rganizationsSpist June 1996 5 2 Irrigation Engineers, 2 | U Construction Spists, 1 W UA Spist September - 7 2 irrigation Engineers, i S S October 1996 Construction Splst, 1

Procurr.Lr.: 0 lat, I Socioogis, 1 WUA Splst, I R&R Splst

1997 Procurement Splst, 1 Sociologist, I WTIA Splst, ! R&RSplst July 1997 1 1 FOT Splst Deceber 19 7 3 T,,rn e ! S |Procurement Splst, 1 WUA SpIst,

- 21 - I A n.s May 1998 6 2 Irrigation Engineers, I Water U S

Agronomist, I Construction Splst Nov-mber 998 7 1 Irrigation Engineer, 1 WAPr ITU U Res. Splst, I Operations Advisor, 2 Envt. Snlsts I Procurement Splst, 1 Constuction Splst May 1999 7 2 Irrigation Engineers, Envt. S S Splst, I Economist, 1 Procurement SpIst, I Farmer Organizations Splst, I Institutional Splst October 1999 2 2 IrrigationEngineers I October - 10 I Irrigation Engineer, I Water | S S November 1999 Resources Splst, I Sociologist, I Procurement Splst, I Financial Management Splst, I Drainage Splst, I Agriculture Splst, I Consruction Spist, 1 Economist December 1999 | IrrigationEngineer March 2000 j 2 1 Irrigation Engineer, I I i Economist April 2000 J 2 2 Irrigation Engineers May 2000 10 I Irrigation Engineer, I Water S U Res. Spist, 1 Farmer Organization Splst, I Drainage Spist, i Economist, i Construction Splst, I I … | .....rcuLe en; A Sp:sI rLU-64LIMLIMIL ajiIbL, IL %LUIU Splst, I Envt. Splst, I Sociologist A%Lug-s:00 1%V 4 l onEn^e Agriculture Splst, I WUA Splst 1,u-V~uau- LUU b e 2000;1 T-aa-1nnee; 1 I S iT December2000 | 3 1 Irrigation Engineer, | S S l l lEvo1.&nor.-iSt 1 ,, 1. IA Ips May 2001 7 I Irrigation Engineer, 1

I I svo-"or,Jflfl*iOI, S1 ,o.tn..m al Sp!t, I Financial Management Splst, I l l F_~~PrmEer Org_iqtnon Sp!nlr I | | ~~~Construction Splst Novemh^r _001 S I rriatinn Rnoinr 1

I Financial Management Splst, 1 Social Development Spist

November - 5 2 Economists, I Denemhbr2001 Awrciiltunst- I 1 1 1 Construcfion Splst, I FOT

-22 - (b) Staff.

Stage of Project Cycle | Actual/Latest Estimate

__o Staff weeks US$ (00o) Identification/Preparation 165 281.3 Appraisal/Negotiation 65!5 123.2 Sunervision 294,34 445.65 ICR 13.4 90.14 Tota! 538.24 940.29

-23 - Annex 5. Ratings for Achievement of Objectives/Outputs of Components

(H=!Eiah 5RTJ=1ihQtqtmtiai1 M=Modeqt N=NWoalivioh NA=Nnt Annhipblp) Rating R Macrofpolicies n HOsu SU A n AN A.A Oi Sector Policies O H OSU*M O N O NA Ol Ph.ysical O H * SU OCM ON,A OrN,A O Financial O H *SUOM O N O NA M -in-ti-aion nDelo-mnO"t 0 H 0 SU SM N)At r NA Oi Environmental O H OSU*M O N O NA

Social F PnvPrtv Rpdurtinn O H OSU M ON O NA Oi Gender O H OSUOM O N * NA LOnther (Ple,ase specpifu) OH O SU O M ON n MA Li Privatesector development 0 H O SU O M 0 N 0 NA Ol Public sector management 0 H 0 SU M ON OANA O Other (Please specify) O H OSUOM O N O NA

-24 - Annex 6. Ratings of Bank and Borrower Performance

(H 1 rlit6ly OabIMAWo, S=Satisfac:ory, F PnU=U,atiisfc.r,t=Hinnly U.-atisfactoryj

6! Bank p-1e wi-o -rmanc a.

Fn Lendincr OnHs n * iUn HI, rI Supervision OHS * S 0 U O HU OI Overall OHS OS O U O HU

6.2 Borrowerperformance Rating

OI Preparation OHS OS 0 U O HU Oi Government implementationperformance 0 HS * S 0 U 0 HU LI Implementation agency performance O HS O S 0 U 0 HU Oi Overall OHS OS 0 U O HU

- 25 - Annex 7. List of Supporting Documents i. Wor1king Paper 1 - inigation and Drainage 2. Working Paper 2 - Water Course Lining and Water Users Associations (WUAs) 3. Working Paper 3 - Economic Costs and Benefits 4. Implementation Completion Reporting and Supervision Mission of the World Bank. Govt. of Haryana. Haryana WRCP. HID November 2001 5. Status Report on Haryana Water Resources Consolidation Project. HSMITC. November 2001 6. Participatory Irrigation Management in Haryana under WRCP. A presentation by S.P.Singh, Chief Engineer HSMITC 7. Participatory Irrigation Management in Haryana. PIM Case Study India (Haryana). Sixth International Seminar on Participatory Irrigation Management, Beijing, China October 21-26, 2001. R.K.Ailawadi and R. Bansal 8. Participatory irrigation Management under WRCP in Haryana - An Evaluation. Arun Kumar HSMITC November 2001 9. WRCP. Ouarterlv Prouress Report ending September 30. 2001. Monitoring Cell. HID 10. Rehabilitation of Water Course Outlet 19782-T.C. Sarangpur Minor. WRCP. HSMITC I . Modernisation and Rehabilitation of Water Course Outlet RT) 40750-R Adampur Distrihutarv WRCP- HSMITC 12. Modernicsation (Lining) of Water Course Outlet RD 47000-R Rana DistrNbutary. wCrp. HSMITC 13. Progress Report (World Bank Mission November, 2001). Agricultural Intensification Programme fA- Ul1DI'M Fnna t f A-4-It- ~L.lIdie L. VT .tt ,. _M .. env.flfl . Are. 14. Draft State Water Policy. HID 1C T-TT-D1,V_Ly I ..J* .LU1 LUUV L AIi AVWP.f0MIV11, AVL 1 L 16. Guidelines, Bye-Laws, MOU for Formation of Water Users Association. Haryana Irrigation Research -- A2 ~ T f..TTTT I AT\ WiLl 1Vi&UMg1ZUWL 111IbULULMkKrLLAvU) 17. Progress Report from HIIRTI to HIRMI. HIRMI, November 2001 18. Achievements of PIMi Programme in HIRTIIHiRMi. iIRMI, November 2001 19. Replacement of Head Regulator RD 88588 Sirsa Branch D/S Budhera Complex. WRCP, HID 20. W.R.C. Project. Construction Division No. 26, Jind, HiD 21. Brief note for Rehabilitation of Munak Canal from Head to Tail, HID 22. Efforts of Water Conservation Mission. Presentation made to the Chief Minister, Haryana by A. Kumar, HSMITC

- 26 - JAUUIIIUUuIA ddiff*aI i-AIUHXAnnex 0.0 BDMUFFrUWCr r ' S JMVlIIUMLIUilu

1.Bac;ground In the water sector in Haryana, irrigation infrastructure was well developed through a series of projects such as Haryana irrigation Phase I, II & Niw^Mvir etc, Dut it was feit necessary to consolidate and resort to better management practices and it was with this idea that Haryana Water Resources Consolidation Project (HiWKRCP) was conceived. HiWRKCP was conceptualized after four studies, i.e. Institutional, O&M, Water Resources and Sectoral Environment Assessment. The HWRCP envisioned reforms in water sector thus bringing in a new concept in management in this crucial sector in Haryana. The salient features of the project are as under:

Date of Agreement April 6, 1994 Total Project Cost Rs. 18582.5 M Funding Agency International Development Agency (IDA) and Govt. of Haryana Funding State Share- Rs.8665 M External credit - IDA SDR 187.3 M or US $ 258 M

2. Design The primary development objectives were (i) Introduce water resources planning and management which addresses current and future inter-sectoral needs; (ii) Enhance agricultural productivity and diversification, and improve equity; (iii) Assure sustainability of environment; and (iv) Improve HID's capabilities in all water related functional areas. The project was designed to improve the irrigation distribution network, drainage system and bring in wide ranging reforms in terms of planning, management and related institutional capacity and policy changes.

In terms of physical works, the state had a well-developed canal network and drainage system and also had an established system of equitable distribution of irrigation water but needed to be consolidated and become self-sustainable. There were a number of constraints in full capacity utilization of the system, which resulted in less agricultural productivity. The project design included construction of new structures such a Hnthiniciind Bsrrncge, Link Channne! Pnthrnln TDam Onttin Weir etr. mndrPMi7atinn wnrke re-hnhilitatinn of existing systems, upgraded O&M of distribution system etc.

The institutional development component included development of state water plan; creation of a computer bwased lAM4 xiet,cn tpmf"jin4y; e .rp.1r%m.Pnt nf vxper+ev in, tb.A fAIA ofp"virmnmpnt PDR,T sn.djrE -hich were fairly new to the Haryana Irrigation Department. The policy reforms designed included restructuring of H&-ja&a .-;gation Department onV basis; revisionmunctiona of water rates in a phased manner for full 0 & M cost recovery; participation of stakeholders in irrigation management etc.

The scope of the project was limited to the gravity irrigation areas of Bhakra and Yamuna Canal Corn ~-.d-oI.adcoeed'-LesAarpct 1o of .- cor...-nAn- Toweve-__ 11._e ofzue Txlso Irrigation Command area from the project has -become a source of weakness in water resources management in 'uIlese aeas. Ai eUw corncptinLI ugaiUn manageiiMCU was Uesigned, which IeU w iuUai problems in implementation due to lack of knowledge and experience among the implementation staff in such wide-ranging reforms. Tne procurement procedure was new to tme department ana lea to delays In procurement decision during the initial years. The main benefit perceived from HWRCP was that the project would consolidate the irrigation system, make the system responsive to the demands of the beneficiaries, improve equity and quality of delivery, make it self-sustainable and protect the environment, which was appropriate from the state's perspective. The physical features and supporting institutional and policy supports envisaged in the project design were rightly included to achieve the development objectives

- 27 - nf the rn;pipt

A Tmn1amen*nt*ion Haryana Irrigation Department faced a number of problems at the initial stages, the main being a lack of ,,,,Aotnd . Aingar.A .ii,aranesc abohuit fhp nrnioet conc-pt a the l.pnnting st, and delay in finalization of procurement procedures following the Bank's guidelines The project faced other problems

oVer whLicu treuv, waso Lon %luuUi, sLuch a3 LIjJI,oodUsJ.1L L 11UUa VI L77.) £LiU 19770, LrU1U11, UI auIJW.Av IiI the implementation of physical works. However, after initial setbacks, the progress picked up due to some concrete steps taken up by the Hari-aa IrUrgation Depaurtent, wiut Ute help anud g-uidauce of tue Wor-ld Bank. The performance of the project was reviewed at the time of Mid Term Review (MTR) and revised targets were fixed keeping in view the past results and future perspectives.

Tne original cost of various components ofuie project was based on rough cost estiMate and there were wide variations in costs at the time of detailed estimation. At the time of MTR, the cost aspect was also reviewed and fresh cost analysis was carried out. Tne new targets and the cost thereof at the time of MWiR reduced this gap substantially. The project components cost after the MTR was more realistic and targets appeared achievable.

4. Results The implementing agencies did face a few problems in the initial stages mainly due to new procurement procedures. During the project implementation, financial constraints also hampered the pace of progress. This was due to change in States financial policies coupled with the additional burden of the award of Pay Commission recommendations. Despite these constraints, implementation of the physical aspects and management of financial aspects has been satisfactory The implementation of software aspects of the project was rather slow mainly due to the fact that the implementing agencies had lack of resources particularly in tenns of human resources and institutional shortcomings. All the implementing agencies of the project geared up for the challenge and have contributed significantly in the project. The results of the project in various fields of the project are summarized below:

Development Obiectives Looking back at the project period and assessing the achievement of purpose, the first and the logical comparison would be with reference to Development Objectives of the project. The achievement on this count indicates its fulfillment to a great extent. Rational analysis of DO vis-a-vis achievement brings out the following conclusions: r Deveinnment Obiective lAchievement tDO#I-Introduce water resources planning and The State Water Plan has been developed, which is a tool to manage management, which addresses current and future future planning process in the water sector takine into account the inter-sectoral needs. inter-sectoral needs. DO#2-Enhance agricultural productivity and Participation of stakeholders in management of water resources diversification, and improve equity. launched at tertiary level, and introduction of Agriculture Intensification Program in 1997 after MTR had resulted in increased productivity at the farm level and higher farm incomes. DO#3-Assure sustainability of environment. Establishment of Environment Cell in HID and adoption of Enviromnental Policy by GOH has generated awareness in HID towards the necessity of integrating environmental concems in the Iproject design. DO#4-Improve HID's capabilities in all water Institutional Reorganization (functional); introduction of modem |related functional areas |MIS & communication system, led to enhanced capacity building in water resources planning & management.

- 28 - Intesrated Water Resources Manasement For Integrated Water Resource Management and to harmonize inter-sectoral and intra-sectoral issues of water management, the State of Harvana has moved ahead in forming State Water Resource Council with the Chief Minister, Haryana as its Chairman and Ministers and Secretaries of the relevant Departments as members. The State Water Resourcerouncil, the policy making body, is bharcked up with Water Conservation Mission as the 'acting arm' with Principal Secretary to Chief Minister, Haryana and S e eMi+es of +Vuherel ev-ani nleprenfns - Ch r andmr,r,A rhcA1t-ively. T- nrao-- Ircr.o1 support and assistance, a special Water Conservation Cell has been formed under the Chairmanship of Secre'L.-;, 'rU-;ga.fVL1 inU the llalyaUa I -;gationL Dep&Jau11ent.

Sustamaoiuly The state is moving towards financial sustainability in the water sector and since 1994 water rates have been more than tripled. Tne last revision itself raised the rates by almost 45% on an average, and most significantly, rationalizing of water rates by reducing categories to only six. The realization of water charges is extremely good, almost entire demands are realized. According to HiD3's estimate, the current cost recovery is more than 90% of O&M costs, a process leading towards sustainability of the investments. Constitution of a State Water Tariff Regulatory Authority to look into the issues of water rates and self-sustainability is under consideration.

Beneficiary Participation During the project implementation, it was experienced that the component of lining of watercourses provides direct benefits to the farmers, though other components also have a collective impact. But in watercourse it is more pronounced, direct and significant in terms of equity, efficiency, saving of seepage losses, reduction in travel time etc. This has a great impact on the agriculture production and leads to poverty alleviation as majority of the beneficiaries are small and marginal tail end farmers.

The benefits are enhanced with the turning over of irrigation management to stakeholders at watercourse level= A delayed be,inning of the nrocess did not dither its exnansion but the voluntary anproach restricted it to the tertiary outlet level. This has led to a new perspective to take up the works of modernization and rFhnhiitntinn of wqtPnrr-riAeQ qtnteuwide with henpAfinrv'q nomnlete involvernent to dip-ve mnYimllm benefits. The encouraging results of participation of stakeholders at tertiary level have entailed the need to tke, tb;0 cncep.at tno hi eahnr,/eovnnAony by9-rn1nn4na1 fnr.na,.;onnc ie *h-e Akstrln,ta, !-ve!.

In the .+.. t azrea, 2055 UTvs TAhave beenu fo..I.I. tril%Decem-b:3, 201,')A to o vv-' M h l,TVV754A A h-v . been turned over to WUAs for management after completion of rehabilitation works and joint walk through sur-vey of completedd wvorL- -WIU: U beneficiay VVI.TTA. IrL-1-us I.-langiL- of ir.igstion at b wuue level has been transferred to stakeholders covering more than 160,000 hectares area. Lining of 1700 watercourses (1435 moderniz ation and 265 renabilitation) complete under the project, and these are in the process of being transferred to WUAs after necessary joint walk-through survey of completed works.

Environment Haryana irrigation Department established an Environment Cell at head-quarters, which is manned by an Executive Engineer and is under the direct control of the Engineer-in-Chief (EIC). The Cell achieved a first in this region, when developed an In-house Environmental Policy for Haryana Irrigation Department. The policy has been approved by the -Council of Ministers and takes care of environmental concerns of water resources development and management. The Cell has also acquired the skills of environmental appraisal of the water resources projects, and all projects are being appraised for environmental screening following the

- 29 - provisions of the Policy.

Benefits in Irrigated Area Development of water resources in Haryana has had benefits for increase in irrigated area and this is more pronounced in the initial stages of develoDment process. Over the vears a number of proiects were taken up and when HWRCP was launched the irrigation system was well established. It is sigificant to note that even in a well-etablished canal svqtem- the nverall incre.se in area irrigated has been 8.45% d ring the project period of HWRCP. However, the increase in area due to savings in water losses is particularly irnnpornssip in the uwest~ Iitr:cta iundPr the Rh,srn ptcv,rLn,,k wxher~ fnrmsati^vn of JTTAa and liing oyf watercourses has ushered in the concept of participatory irrigation management and considerable savings in cost as well as of cnscrce ateor re-ces.

5. Borrower's Performance The perfonnance of borrower i.e. the State can be termed as satisfactory so far implementation of the project is concerned. lne impleimentng deparurenis have risen to the need of tue project and given tne desired result despite initial setback during the launching period. A brief on various aspects is given below:

Poruwy RefoViu The main reform i.e. the merger of HID, HSMITC & CADA could not take place but there are other noteworthy maor poicy reforms such as in-house enviromnentai policy for Haryana irrigation Department, policy guidelines for fornation of WUAs, Draft State Water Policy etc. The difficulty in the merger as envisaged in the design of the project was that the three organizations are totaliy diferent as nrst being Government department, second govemment undertaking and third being a society working primarily with GOI aid.

Financial Progress Financial progress was rather slow at the outset of the project but picked up midway. Ending December 2000, Rs 9472 M were spent against the provision of Rs. 13620 M, this being 69%. For extension portion the provision was Rs. 2530 M and the progress was Rs. 1989 M, which was 79 %, (likely to increase to 100 % once all pending liabilities are cleared and reimbursed), indicating the fast pace at the last leg of the project. Cumulative financial progress ending December 2001 was Rs. 11461 M i.e. 84 %. The percentage achievement might touch the figure of 88 % once all pending liabilities are cleared and reimbursed. Thus it can be concluded that financial progress was satisfactory.

Land acauisition Haryana lrrigation Department has adhered to the sound land acquisition procedures as laid down in the relefv.ant L-nd Acquisition Ant Adequiate compensation has been pnid to the persons, whose land has been acquired at market rates through an elaborate system of evaluation of price. There has been only one case of Project Affected Peo ns;m TR,hm.c PxAxPc wer s ci,Dne,,x-nff,enc+eA b-esdes of'er...-g Jobs.

Tg:a:plementadon of 1PIiiaub4J1U- on -- andAUvJIJ-UJ A L.1U41 Performance in implementing the Rehabilitation and Modernization components had been excellent The works under uhis coiponent were plawnue anu eAcCuteu wiwn proper quality contnuvi mcasures. I Re expertise of the department in execution of civil works has always been good and duly recognized and appreciated by the missions of the w'orid Bank.

Beneficiary Participation Participation of stakeholders was not envisaged in SAR in a focused manner, although its presence in the

- 30 - state in existing system was acknowledged. This concept was initiated in real sense only in 1998 with the approval of Model Bye laws and Memorandum ofLUnderstanding. The concept picked up momentum at the later part of the project with statewide launch of the program. The concept got the necessary impetus with the active involvement of Agriculture Department as the third partner in the partnership of WUA and Haryana Irrigation Departnent.

Human Resources Development The project has helped this sector in terms of human resources development to quite an extent The department responded well to the initial restructuring by creation of specialized distinct units for water services and construction activities. Other activities such as development of State Water Plan, Fnvironment Cell, Computer Cell[ C.ordinati.n U nit etc. have Gnntrihlted grpatly for hlrman resources development. Although provisions of the project for MIS and computerization could not be completely eP,vijited yet it has he.pedA ;in p,rp,tinrg g-wnmvnpr ltowe1 x,whi4h wldn1 iiave wa, forfnto,l I crt.,o* of the department in near future.

Coordination tIL e pe.J-LIuuLLa4U. of UIV Iiml1UVLnenUUg agencies can aUbe bUV, UU.ULUZ LU Ui coLUUIULLLULL iUUU VI UUIMMUL units engaged on different activities. The concept of a separate independent coordination unit has contributd towards beter performancc, as ths unit was carying ouT all the jobs of colection of dama from implementing agencies and this unit interwcted with all outside agencies.

6. Performance of the Bank

Supervision Mission The World Bank supervision missions have been taking place at regular intervals and it is felt that initialy there was a gap in communication. This was removed as the project progressed and of late an excellent workable partnership between implementing agency and the World Bank has emerged. The supervision missions have been quite useful for the state particularly in dissemination of information, data, knowledge, adjustments and improvements in the project.

Team Composition The HWRCP supervision missions had a unique feature that they comprised of specialists in all related fields of water sector. The teams on the missions have always been weli balanced and as per the needs of the state at a given time.

Role as Facilitator It is felt that the World Bank missions have played the role of facilitator rather than the regulatory agency, whinh haq had a healthv imaret oin the impnleimenting arcienre The tendeimv *f the micsinns has heen tn work as a team with the line staff and as a facilitator.

Timely Approvals IMost of L'eappivv YlsLI req "LDeBawe1re 0wO1s muoun U.LLLV IUU U1:Any 0JqJuva'. anUUha-i contributed greatly towards the healthy progress of the project. The department has had no instance of any d'elay OinxUUUofWUo" rLI 4%ULUILuI Uofidy ofI Ul BDUaLn apprlVals.

Leaming and Shanng Sessions Another important impact of the bank missions has been on interactive sessions with the implementing agencies. Tnese sessions have proved to be a great leaning experience for the staff as the World Bank missions always had specialists in all relevant fields and have provided the officials a wider perspective by

- 31 - sharing knowledge and experiences elsewhere. Comprehensive interaction with the staff of implementing agencies has helped them to a great extent in developing skills in those specialized fields.

7. Lessons Learnt

On conclusion of HWRCP, a number of lessons have been learnt, which can mainly be listed as follows: 1. Continuity of senior staff at the policy and decision making level is essential for good performance of the project. Quick turnover of staff delays implementation and affects the performance of the project. 2. Participation of beneficiarv farmers and other stakeholders in planning, implementation and monitoring ensures transparency, accountability, reduction of costs and better management of rehn_bilitntpfl/mo.rni7i7d infi ninwtiir 3. Realizing and understanding the necessity of an integrated and holistic approach in planning and ...anagement of water resow-res. has been the halLmarlk of fthe propt A!! fiitirp nrnipirt in, the wanter sector should be planned with a holistic approach, taking into consideration the needs of all s'akeholders and user of water. 4. Haryana Irrigation Department needs to focus on enhancing the skills of technical staff through iainings, higher studies, study to-urs etc., keeping in -viw tLe advance technologies and maagement practices being developed in the water sector. 5. For better performance in tie implementation of a project, it is essenuial to pro-vide at the o-uset. in-depth information and knowledge on every aspect of the project to the implementation agencies and line staff through a series of workshops, seminars, training programs etc. 6. There is a need to expand the concept of PIM to higher hydrological formations for enhancing the financial viability of WU-As. This could be achieved by preparing a comprehensive plan duly complemented with necessary policy and legal framework/amendments to facilitate implementation and consolidation of benefits. Further active involvement of stakeholders in planning, prioritization, water rates structure regulation etc. would also pave way for efficiency and better management. 7. There is a need to establish an effective data collection and data sharing system,, which could be combined with the dynamic State Water Plan.Establishment of a comprehensive MIS supported by a central data collection and processing unit, would enhance the efficiency. This would also facilitate monitoring, review and adjustments in planning and implementation. 8. Integration of agriculture in irrigation management is essential for achieving the goal of higher agricultural productivity. This has proved to be an excellent -tool for motivating the beneficiary farmers towards better water management, crop diversification and higher crop productivity, and should form an integral part of any future planning in irrigation sector. 9. Farmer led extension approaches are most effective methods of disseminating knowledge to other farmers, and also usRhering cronp diverSification in a big way= 10. External monitoring and evaluation is necessary to identify lapses and take timely corrective actions during the course of thke project.

8. ruture vision With the experience gained during the execution of HWRCP and the recommendations of the Workshop on Water sector Reform-ns in Har-yana'; Ute Haryana Irrigation DepaULrment has developed an action planl for the proposed activities. A Concept Paper has been developed on the subject, which would usher in revolutionary and sweeping reforms in water sector in the state. Tne state is worKing on preparaution oi a framework for the new project in line with the concept developed, which would go a long way in bringing about revolutionary changes in this crucial sector of the state. T-nis when achieved, would benefit not only the water sector but other sectors as well.

- 32 -

WMAGING

Report No.: 24218 Iype: i;