The World Bank

Document of The World Bank

FOR OFFICIAL lSE ONLY

(7 9 . -' / xVt/2&

Report No. 12813-IN Public Disclosure Authorized

STAFF APPRAISALREPC72T

INDIA Public Disclosure Authorized HARYANA RATER RESOURCESCONSOLIDATION PROJECT

MARCH 3, 1994

Public Disclosure Authorized MICROGRAPHICO

Report No: 12813 IN Type: SAR

AgricultureOperations Division Country Department II South Asia Region Public Disclosure Authorized

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not othewise be disclosed without World Bank authorization. Currenz Unit - Rupees (Rs.) US$l = Rs. 31.51/

FrI.gALYxmA Governmentof India, State - April 1 to March 31

WRIrMSWrpNp URE IMETRIC SyS) 2/

1 Meter (m) = '.28 feet (ft) 1 kilometer (km) = 0.62 miles (mi) 1 hectare (ha) = 2.47 acres (ac) 1 million cubic meters (Mm3) = 810 acre-feet (ac-ft) I million acre-feet (MAP) = 1,235 Nm3 1 thousandmillion cubic feet (TMC) = 28.32 Mm3 1 cubic foot per second (cfs or cusec) = 0.028 Mm3 per second (cumec) I cfs = 102.9 m3lhr 1 ton = 1,000 kilograms (kg)

SEAAON$

kharif Monsoon season rabi Dry/Winterseason

The US Dollar/Rupeeexchange rate is subject to change. Conversionsin this report have been made at US$1.00 to Rs. 31.5, which representsthe projected exchange rate over the disbursementp'riod.

2/ The Metric System has been used in most cases However, India is still in the process of transitionto the metric system; non-metricunits are still widely used, and were also used in this report in cases in which a conversionto the metric system may confuse the reader. FOR0MCUL US ONLY ABBREVIATIONS AND ACRONYMS

ATW Augmentation -.jewell AU Administration Unit BC Bhakra Canal CADA Command Area Development Authority CE Chief Engineer CEC Chief Engineer Coordination CU Construction Unit CWC Central Water Commission DIT Direct Irrigation Tubewell DPU Data Collection and Water Resources Planning Unit DRU Design and Research Unit EIC Engineer-in-Chief ERR Economic Rate of Return GDP Gross Domestic Product GOH Government of Haryana GOI Government of India HA Hectare HDOA Haryana Department of Agriculture HDOE Haryana Department of Environment HDOFi Haryana Department of Fisheries HDPH Public Works Department (Public Health; also known as the Haryana Department of Public Health) HID Haryana Irrigation Department HSEB Haryana State Electricity Board HSMITC Haryana State Minor Irrigation Tubewells Corporation HSPCB Haryana State Pollution Control Board ICB International Competitive Bidding LCB Local Competitive Bidding M Million MC Municipal Councils MIS Management Information System NGO Non-Government Organization NPV Net Present Value NTPC National Thermal Power Corporation NWMP National Water Management Project O&M Operation and Maintenance PBC Planning and Budgeting Committee QA Quality Assurance Office SAU State Agricultural University SOE Statement of Expenditure SWP State Water Plan SWRC State Water Resources Committee WRU Water Regulation Unit WSPS Water Services Policy Support WSU Water Services Unit WUA Water User Association WYC Western Yamuna Canal

This documenthas a restricteddistribution and maybe used by recipientsonly in the performance of their officialduties. Its contents may not otherwisebe disclosedwithout World Bank authoriation. HAA WATER RESOURCE CNS LIDATION PROJECT

Draft Staff Aprpaisl Report

Table of Contents

CREDIT AND PROJECT SUMMARY ......

I. WATER RESOURCES SECTOR Water Resources in India ...... 1 Development Priorities ...... 1 The State of Haryana ...... 2 Experience with Past Bank Lending ...... 4

II. THE PROJEi' Rational,; for IDA Involvement and Origin ...... 5 Project Objectives and Design ...... 7 Project Description ...... 7 Project Investments ...... 8 Rehabilitation ...... 8 Modernization ...... 8 Improved Operation and Maintenance ...... 9 Institutional Support ...... 10 Policy Reforms ...... 11 Institutional Reform ...... 11 Operation and Maintenance ...... 12 Cost Recovery ...... 13 Beneficiary Participation ...... 13 Groundwater Regulation ...... 14 State Water Plan ...... I ...... 15 Expenditure Priorities ...... 15 Power Sector ...... 16

III. COST ESTIMATES, FINANCING AND DISB-URSEMENTS Project Costs and Financing ...... 16 Procurement ...... 17 Disbursement ...... 19 Retroactive Financing and Special Account ...... 20 Accounts and Audits ...... 20

IV. PROJECT IMPLEMENTATIONt AND MONITORING Organization and Management ...... 20 Training and Technical Assistance ...... 21 Monitoring and Evaluation ...... 21 Project Reviews and Reporting ...... 22

V. BENEFITS, JUSTIFICATION AND RISKS Project Benefits and Justification ...... 23 Economic and Financial Analysis ...... 24 Project Risks ...... 25 Environmental Impact and Land Acquisition ...... 25

VI. AGREEMENTS AND RECOMMENDATION...... 27 Annex 1 Project Costs Annex 2 Policy Reform Program Annex 3 Haryana Irrigation Department: Institutional Modifications Annex 4 Institutional Support Annex 5 Rehabilitation Component Annex 6 Modernization Component Annex 7 Technical Specifications Annex 8 Improved Operation and Maintenance Annex 9 Communications and Computer System Annex 10 Cost Allocation Recovery and Program Funding Annex 11 Farmer Participation in Irrigation Management Annex 12 State Water Plan Annex 13 Environment and Land Acquisition Annex 14 Economic and Financial Analysis Annex 15 Procurement Annex 16 Supervision and Implementation Plan Annex 17 Schedule of Disbursements Annex 18 Documents Available in Project File WATER RESOtIRCES C NR0LIDATION PROECT

I. CREDIT AND PROJECT SUMMARY

Borrower: India, Acting by its President.

szecuting Agency: The State of Haryana.

Amount: IDA Credit SDR 187.3 million (USS 258.0 million equivalent).

Terus: IDA: Standard with 35 years maturity.

Co-Lending feozs: Government of India would make the proceeds of the Credit available to the State of Haryana (GOH) under standard arrangemer.ts for developmental assistance to the States of India. GOI would assume the foreign exchange risk.

Project Description: The project would be a sector investment loan, financing an agreed state-wide program to improve the water distribution and drainage systems, and upgrade institutional capacity for water management and planning. The project would emphasize the re-ordering of the state's public expenditure priorities, supported by institutional and administrat mrereforms and policy adjustments. The project would finance the following investments under the areas of the Bhakra Canal system and Western Yamuna Canal system (includingGurgaon Canal) of the state: (a) rehabilitation of the existing canal and drainage systems, and selectivelining of canals and watercourses;(b) w inn of canal and drainage systems and watercourses,replacement of the HathnikundBarrage, and construction/extensionof minors; (c) upgraded 2peration and maintAnannA (°&MN of the water distribution and drainage system; and (d) inntituttonal trengtheningto support administration, data collection,planning, design, beneficiary participation and formation of Water User Associations, research and training. Investments would be supported by reforms to reorganize the Haryana IrrigationDepartment (HID). O&M standards and procedures would be adjusted to improve irrigation efficiency and services to all consumers, enhance productivity levels, and implement full O&Mcost recovery. A water policy framework would be developed through multi-use water resourceplanning and formulation of a State Water Plan.

Project 5enef its: The main expenditures under the project -- rehabilitation, modernization, and improving O0M -- would enhance operationalefficiency, and result in improved water use, improved irrigationand higher valued agriculturalproduction. Economic benefits would also result from reouced losses due to recurrent flooding. As importantly,the project would assist the state to transformHID from a constructionand irrigation oriented agency into a specializedwater resource management institution,and improve the ins3itution's financialviability. The policy reforms would help GOH and the private sector to allocate resourcesto higher priority investmentsin water resources development.

Project Risks: There are three main risks to the project. The first risk relates to implementation of the large investment program within an agreed period of time. In the past, HID has demonstrated the ability to implement large, complex projects to high standards. To help maintain the past high standards, &A internal project Quality Assurance Unit would be established in HID during project implementation. The second risk is associated with HID's capabilitiesto sustain the proposed higher standardsof O&M of the canal and drainage system. HID will reorganizethe presently fragmented0&S functionsand the existing 0&M units will be strer.gthenedana better funded at all levels. Annual disbursementof project funds will be linked to expenditures and performance of O&M in the previous year. The third risk is related to GOH's capabilities to implementand sustain the proposed changes in O&M funding, and cost recovery of agriculturalpower and water services under the project. The cost recovery program is l .akedto an administrativereform through which a new unit in charge of programmingand budgeting,program tracking,cost accounting and service cost allocation would be created. Annual disbursements of project funds would also be linked to cost recovery. A specific action plan, agreed at appraisal, will be monitored closely during supervisionto help minimize project risks. atorat. PROnOat t¶!aatil:

C=ntune t Qleal Foraign Total Lna Foreigm ?ntal ---- Rs M ------US$ m ------Rehabilitation 2431.3 108.9 2540.2 77.2 3.5 80.6

Modernization 4949.3 230.5 5179.8 157.1 7.3 164.4

Improved Operation & Maintenance 5560.4 165.9 5726.4 176.5 5.3 181.8

Institutional Support 947.4 89.9 1037.2 30.. 2.9 32.9

Total gageline Cnsat 138aB&_ 595-2 144B3,6 z4409 18_§. g59§-

Physical Contingencies 1104.5 74.5 1178.9 35.1 2.4 37.4

Price Contingencies 2735.9 184.0 2919.9 -15.1 1.3 -13.8 CQaI Pro iert Costs 1721211 8i36 AS 2- .460. 22.51 .49-4

TotalLoal Fro S ~±fl~±Ug21*Af:

------US$ Million ------GOH 224.7 0.7 225.4 IDA 23.61 21.1 259-0

Total 460-9 22_i 453-4

TDK F4snal Year (US$ million)

94 95 96 97 98 99 2000

Annual 25.8 38.7 51.6 43.9 38.7 33.5 25.8 Cumulative 25.8 64.5 116.1 160.0 198.7 232.2 258.0

Poverty Category: Not Applicable.

Bconomic Rate of Return: 18%

MAP: IBRD No. 25512 - INDIA: Haryana Water Resources Consolidation Project

1 Includingtaxes and dutiesof US$11.6million. 1 WATER uZO S SECTOR

Wter Remnurema in India

1.01 ntrournt'4o. Water is an increasingly scarce reseurce in India, and its management in terms of physical, economic and environmental needs is critical to overall economic development. India's limited water resources are distributed unequally, both spatially and temporally. Development of groundwater and surface water is reaching physical limits in many states, particularly in the northwest. The intrlinked nature of surface and groundwater further complicates the problem: exploitation of each affects the availability and development potential of the other, and conjunctive planning of these resources is essential. Water resource development is also constrained by riparian rights of neighboring states and countries.

1.02 Com;eting f Watex. Irrigation is the largest user of water in India (about 93% of present gross water use). However, the National Water Policy of India (Ministry of Water Resources, 1987) gives the first priority to the provision of domestic water supplies for urban and rural populatL.ons and assuring *iater supplies for livestock. Competing demands arise from industry, thermal and hydro-power, fisheries and navigation. in addition, minimum flows on rivers for flushing pollutants, dilution of waste water, and other environmental concerns limit the operation of facilities. The Central Water Commission (CWC, 1988) estimated that community needs would double, and industrial and power requirements would increase almost seven-fold, by 2025. While the total water demand from community use (forecast to be 40 BCM/yr in 2025) is not high compared to the total water resources (930 BCM/yr in 2025), localized and regional demand can lead to severe shortages, particularly for urban areas. Thus, in future, competing uses are likely to limit the water available for agriculture and irrigation, particularly near major metropolises and in dry regions. These increasing demands could also force fundamental changes in irrigation systems, cropping patterns and water use efficiency.

1.03 Agr{U]ture ant Trrigation in India. Agriculture is a key sector in India's economy, contributing about 35% of GDP and employing 65% of its adult population. Annual agricultural growth has been modest at 2.6% p.a. over the last two decades, and performance of the sector has been dsteriorating. India has a land area of 3.27 million km2 of which about 40% is cultivable. and 20% is irrigated. Irrigation has been the major source of agricultural growth, and the pursuit of India's goal of food self-sufficiency has been based on massive investment in irrigation. The potential of irrigation, however, has been constrained in India by inadequate attention to comprehensive planning and system needs, and signif '.:nt issues must be addressed to maintain and surpass past contributions - agricultural growth.

Developent Priorittes

1.04 Development plans of the Government of India (GOI) and State governments give priority to alleviating poverty and creating employment, particularly in the rural areas. While per capita income has increased by about 2% per annum to an average of about US$300, the impact on improvement in the standard of living of the poor or in reducing under-employment has not been significant due to rapid population growth. Of the total population of over 850 million, an estimated 280 million (33%) live Lalow the poverty line. About 75% of the population lives in rural areas, depending directly or indirectly on agriculture. One-third of the agricultural labor force are women, and agriculture is the main source of employment for women in rural areas. Thus, the performance of agriculture, and irrigation, is intrinsically linked to poverty alleviation in India.

1.05 GOI's long-term strategy is to stimulate agricultural growth and promote rural development through improved water and land management, enhanced efficiency of irrigation and drainage networks, strengthened research se--vices, increased attention to environmental protection, and improved rural infrastructure. Investment programs to address these elements and to reestablish growth are of high priority in the Eighth Five Year Plan (1992-97) of GOI and state governments. Equitable distribution of the benefits of growth and sustainability of the resource base is also emphasized. The proposed project has been designed to assist the state of Haryana in pursuing its development goals through increased efficiency in utilizing and managing water resources.

Thg Stat_ of HaryAna

1.06 Geri-al Featureas. Haryana is situated in north-west India (IBRD Map No. 25512). One of the smallest states in the Union, Haryana covers an area of about 4.4 M ha, of which 3.9 M ha is arable. Per capita income in the state is among the highest in India and has been growing at a rate of about 12% annually in recent years. The state has a population of about 12.8 million, and 78% of the population is e-.ployed in the rural sector. Agriculture is the dominant sector of the economy: its share of State Domestic Product (SDP) is about 43.8% (1984/85-1986/87), while the growth of SDP originating in agriculture was 3.7% over the last two decades.

1.07 Water Resonrcea. Haryana is mostly arid or semi-arid, with limited rainfall ranging from 300 mm in the south-west to 1100 mm in the north-east. There are no perennial rivers running through the state, and two thirds of the area is underlain with brackish water, with rising water tables and inadequate natural drainage. The state receives water from the Sutlej and Yamuna rivers. According to the Indus Waters Treaty (1960), India has unrestricted use of the Ravi, Beas and Sutlej rivers for irrigation and other uses, and the right to utilize the natural channels of the rivers for disposal of drainage effluent. on the Yamuna, water sharing is governed by the 1954 Agreement at Tajewala Headworks between the states of erstwhile Punjab (after 1966, parts of Punjab were constituted into Haryana) and Uttar Pradesh. Haryana will receive additional waters when the Sutlej-Yamuna Link Canal and the Thein dam are completed.

1.08 The available surface (about 9Bm3) and sub-surface (about 5Bm3) water resources in Haryana have been almost fully developed. Two major canal systems (a 12,100 km long network) distribute surface waters: the Bakhra Canal (SC) System which is fed from the Indus basin and the Western Yamuna Canal (NYC) system which receives supply from the Yamuna river. Construction of the WYC began in the year 1850 and the BC in 1952. The Tajewala Headworks diverts up to 487 m3/s water from the Yamuna to the NYC. the structure is over 120 years old, and needs modernization. The performanceof the canals have deterioratedalso over time, mainly as a result of insufficientfunding of operation and maintenance. Groundwater development ass progressed rapidly and there is limited scope fox further groundwater utilization. There are more than half a million private wells in the state, and about one thousand functioningpublic irrigationwells. The network of interlinkedcanals of the two surface water systems distributeswater to the main users as follows: irrigation (92%),municipalities (5%), fisheries (1%), industry (1%) and power (1%). The direct availability of water to irrigation is projected to fall substantiallyin the future as municipal anC.livestock demands rise in response to increasingpopulation. Particularly,urban demand for water is expected to increasemany-fold, which could further exacerbate localized shortages. Over the next fifty years, increased demand of water for power is expected to be 11%, with fisheries and industry claiming 8% and 4%. Thus, in future the demands on the state's water resources will far exceed any possible increases in water supply.

1.09 AricUltUre and Irrigation I. Along with Punjab, Haryana led India's Green Revolution,the two states together contributingalmost 70* of the total foodgrainprocurement of GOI. Yields of most major crops are high, and average foodgrainyields are 30-40% higher than the all-Incia average. The cropping intensityin Haryana is about 149% (1980-83)and is limited by irrigationsupplies. About 75% of the state's arable land is served by irrigationcanals in the BC commands (1.2 Mha), the WYC commands (1.1 Mha) and the lift areas in southern Haryana (ultimately0.5 Mha). Present surface water irrigationintensity averages about 60%, reflectingthe limited availabilityof water supplies for the system. The state is reaching its limits of agriculturalexpansion: future gair.sfrom Green Revolution technologyare not likely to mptch past performance,scope for further developmentof new irrigationis limited,past investmentsmade in irrigation infrastructureare deteriorating,and problems of water-loggingand salinity are increasinglyevident.

1.10 nra4naga. Naterlhaglng and salinity. In large parts of Haryana, the impact of irrigationover many decades has caused the groundwatertable to rise, now near or at the root zone in many areas, resulting in severe problems of waterloggingand salinization. In these areas, crop yields have declined significantly,and the sustainabilityof India'smost productiveagricultural area is threatened. Already, water-loggingproblems have developedon about 250,000 ha of land in northwestIndia, and it is foreseen that some 3 Mha may be in jeopardy over the next 30 to 50 years. The incidenceof flooding also increasesas the water table approachesland surface. The 3,800 km long drainage network, constructedover a period of 36 years from 1952 to 1988 in Haryana, drains 24,000 km2 of land but has not been maintained effectively, resulting in extensive village flooding and major agricultural losses.

1.11 Power. Agriculturalusers receive large power cost subsidies, resultingin inefficientuse of power and overdraftingof groundwater. Haryana is one of the few states that charge the GOI minimum recommendedrate of 50 pai-a/kWh for all metered pumps. However, on average the Haryana State ElectricityBoard's (HSEB)tariffs cover only about 60% of its cost of delivery; agriculture represents about 46% of the power sold but contributes only 11% of HSEB's revenues. For private tube-wells, of which about 32% are metered, HSEB charges a minimum tariff of Rs 20/ HP/month on metered connections while the charge should be about Rs 32/HP/ month for minimum returns. The flat rate for unmete-ed connections is Rs 35/ HP/month, while the Rs 0.50/kwh flat rate equivalent is estimated to be Rs 42/HP/month. For public tubewells (all metered) the total arrears to HSEB amounted to about Rs 2.7 billion by March 1993. The GOH subsidy to agriculture is oaly partially compensated through budgetary transfers: in 91/92, HSEB received only Rs 400 million cover its accumulated shortfalls. Thus, policies on pricing of power to agricultural users aggravate and reinforce the problems in both 3ectors.

1.12 waterU easur6es MgenCiaa. The HarDyanaIrrigatl2n 2lnarXtmeS (HID) haa the primary responsibility for mzanagingthe State's water resources and providing essential services in the sector. HID manages the distribution of irrigation water in the main canals, distributaries and minors, up to the water ct..rses,and operates and maintains all related facilities. HID also provides domestic and irrigation supplies in Lift Comnands in the southern parts of the state (see para 2.19). HID provides facilities to protect agriculture and urban/ village areas from flood damage, removes at manages disposal of stormwater, provides sub-surface agricultural drainage -n saline and waterlogged areas of the state, and disposes wastewater discharged into canals. Through the extensive canal system of the state, HID supplies municipalities and villages, industry, power plants, fisheries, horticulture and other miscellaneous categories, and conveys bulk water supplies for the Union territory of Delhi and to the State of Rajasthan. Two other agencies execute developmentalworks in the irrigation sector: the Harvana Stat: Minor TrU4g- ation Tunewell Corporatio (USMITC)was established in the 1970s to carry out public sector groundwater development and water course lining, and the Cammand area Qevelopment Authority (CADA)was establishedto perform lining of water courses in newly developed areas where irrigation utilization is lagging.

1.13 The structure of HID reflects historical work priorities and methods. Further specialization is needed within the organization to reflcot the quite distinct and separate needs of resource planning, design, construction, and O0M. Similarly, administrative and regulatory responsibilities and functions are scattered among a number of units. The situation is further complicated by the overlap of functions between HSMITC and CADA. There is a lack of continuity of staff in any position, and of incentives for improved staff performance. Management procedures require better definition, and the mechanisms to develop, manage and monitor HID's programs and budget can be improved. The -agnitude of the demands in the various areas and the complex situation ii .hich HID must operate demand a fresh examination of alternatives to its current institutional ar.angements and the associated policies and procedures applied to its daily work.

Iieprience with Past Rank LenJiin

1.14 RXperience in India. India's agricultural development efforts have attracted substantial support from the Bank Group. To date, 130 agricultural projects in India have received US$10.2 billion equivalent of - 5 -

IBRD/IDA financing (81% IDA and 19% Bank), the majority of which has been for irrigation. Projects have also included: agricultural support services (credit, research and extension); commercial agriculture (seeds, fisheries and agro-industry); forestry, watershed and resource conservation: livestock development and drought assistance. The objectives of Bank involvement in Indian agriculture have been to expand and modernize the infrastructure supporting sectoral growth, strengthen the institutions rerving agriculture, increase the production of high value commodities, and introduce sustainable land management systems affecting rainfed agriculture. Common problems in agricultural projects have been: (a) delays in project mobilization and procurement; (b) poor quality civil works; (c) institutional weaknesses: and (d) insufficient local funding.

1.15 Earience in Haryan&. Two irrigation projects have been funded: the Haryana Irrigation Project (Credit 843-IN, 1978-83), and the Haryana Irrigation II Project (Credit 1319-IN, 1983-92). These projects provided support for lining parts of the canal system and water courses, improvement of rural roads, improved marketing facilities and water supply to rural communities. More recently, Haryana has been included in the National Water Management Project (NWMP). Past implementation experience is fairly satisfactory. Both Haryana I and 1I were successful in meeting their primary objectives, and major project components were executed to good engineering standards. The PCR of the second project (November, 1993) notes the state's ability to execute a large volume of civil works to high standards, and estimated an Economic Rate of Return (ERR) of 17%. However, the PCR also noted the growing burden of O&M in relation to an inadequate budget, pointing out that maintenance of project works was crucial to project sustainability. There were also problems in project flow of funds. It highlighted the following 'issues for the futureO: (a) the difficulty of inducing change (technical or organizational) into the department; (b) the impact of competing water demands on agricultural availabilityp (c) lack of continuity in key posts within the department; and (d) the interstate drainage problem, and measures for its solution. Finally, the PCR emphasized the need for a realistiu time schedule for future projects: Haryana II (credit of US$300 million) was executed with a four-year overrun from original schedule. These lessons, together with GOH's proposals to improve planning and management of water resources in Haryana, are central to the proposed Haryana Water Resources Consolidation Project (WRCP). This project was prepared jointly by GOH and IDA in 1992-94. The project was preappraised in July 1993 and appraised in October-November 1993.

TIT THE PROECT

Rationale for IDA Tnvolvement and Origin

2.01 The Bank's new strategy for water resources management (Water Resources Management, September 1993), proposes an agenda of policies and institutional reforms that will utilize market forces and strengthen the capacity of governments to carry out their essential roles in resource use and planning. The need for the adoption of a comprehensive framework for analyzing policies and management options regarding water scarcity, efficiency - 6 - of service, allocation of water and environmental damage is highlighted. The proposed project represents a significant first step towards this new strategy. In Indial, water development and irrigation is planned and implemented at the state level, requiring a state-by-state approach, with WRCPs as the main vehicle for Bank support. The Bank is one of the few institutions that could provide the necessary continuity of support required to pursue the state's long-term strategy in water resource development. The Bank also has a strong interest in supporting initiatives that would promote similar policies across states for developing water resources, as this would lead to more rational use and allocation of water in the national context.

2.02 Water Resogures Policy. Consistent with the Bank's strategy, under the WRCP, GOH proposes a shift in emphasis from investment in new facilities towards improved water management, institution building and policy change. GOH's policy supports the provision of water for productive activities, drainage and flood control, and potable water and sanitation, in an economically viable, environmentally sustainable, and socially equitable manner. The policy pursues the following elements for success: (a) strong institutions for improved water management, public investment programs, and drought planning; (b) greater role for efficiency incentives, financial discipline, and cost recovery measures; (c) adoption of technologies and management approaches that increase the efficiency of water use and allocation; (d) priority attention to the water needs of the poor; (e) decentralization of responsibilities; (f) beneficiary participation and formation of Water User Associations (WUAs) to improve water resource management, service delivery and cost recovery; (g) protection, enhancement and restoration of water quality; and (h) upgrading skills for planning, analysis and management.

2.03 Seotoral Strategy for India. The India Irrigation Sector Review (ISR) identified four priority areas of action, which are consistent with GOH's policy as well: (i) instit1jtinal development to upgrade management capability of water resource departments through improved functional responsibilities, institutional accountability, and participation of farmers and the private sector; (ii) redefined p1bl$c expendituregrioriti4s -- emphasizing the performance of existing schemes, enhanced operation and maintenance, and completion of viable incomplete projects, rational cost recovery policies, and prioritized allocation of budgetary resources; (iii) ltisenctoralwater resources policy and planning using river basins as planning units; and (iv) iMroved technical gerformance of water service delivery for water management (including irrigation), system operations and maintenance, and environmental management. These priority actions form the basis of the proposed project.

1 The foilowing main documents detail the evolution of the Bank's strategy pertaining specificallyto India: India, IrrigationSector Review (December, 1991, Report Number 9518-IN); India Public Expenditure Review (Agriculture Report, SA2AG, Draft, May 1993); and Proposed World Bank Operational Strategy for Indian Irrigation (SA2AG,October 1991). The strategy is also supportive of and consistent with the Asia Water Resources Study (Draft 1992). - 7-

Project Objectivea and DesiM

2.04 The primary objectives of the proposed project ould be to: (a) introduce water resource planning (including contingency planning for droughts) and management which addresses current and future inter-sectoral needs; (b) enhance agricultural productivity and diversification, and improve equity; (c) assure sustainability of the environment; and (d) improve HID's capabilities in all water related functional areas.

2.05 Taking into account lessons learnt from past Bank projects in the state, the proposed project is designed to contribute to these objectives by helping GOH put in place a comprehensive, sustainable, water resource development program for the state. The state's capacity to implement such a program would be based on three closely interlocking and interdependent elements: an organizational structure designed and staffed to address the activities to be taken up in the near and longer term, a water resources development plan which provides the general framework within which future water development in all sectors must be analyzed, and a program and budgeting process which reflects the schedule and balance of future investments to fit the available funds. The state's public expenditures in the water resources sector would be reoriented towards sustaining past developmental efforts, and promoting growth enhancing investments for the future. The project would support this strategy by providing investment funds supported by policy reforms.

Project Description

2.06 The project would be a sector investment loan, financing an agreed state-wide program (to be imolemented over six years) to improve the water distribution and drainage syatems, and upgrade institutional capacity for water management and planning. The project would finance the following investments under the areas of the Bhakra Canal system and Western Yamuna Canal system (including Gurgaon Canal) of the state: (a) rehahil4tat4nn of the existing canal and drainage systems, and selective lining of canals and water courses; (b) m arizat'4n of canal and drainage system and water courses, construction of the Hathnikund Barrage, and construction/extension of minors; tc) upgraded ooeration and maintenance CO&M) of the water distribution and drainage system; and (d) insti-utional support for administration, data collection, planning, design, beneficiary participation, research and training. Project investments have been carefully selected from a larger program of investments, according to the priority needs of the state's water management system. Investments would be supported by fundamental reforms to reorganize HID, including integration of selected RSMITC and CADA activities with HID. O&M standards and procedures would be adjusted to improve services to all consumers, enhance irrigation efficiency, increase productivity and diversification, and introduce full O&M cost recovery. Beneficiary participation would be facilitated and policies and procedures for formation of WUAs implemented. A water policy framework would be developed through multi-use water resource planning and formulation of a State Water Plan (SWP), including contingency planning for droughts. -8-

rQoiectInvestment

2.07 Rehabilitation uRS880-6million. 18% of base cost. Annex 5). The primary objective of the rehabilitation component is to invest in one time repair and rehabilitation of the existing systems, to address the problems of the backlog of deferred O&M and bring the system back to acceptable performing standards. This would also encourage beneficiaries to pay for the cost of improved water delivery and facilitate the turnover of system maintenance to WUAs. Implementation responsibilities for this component rests with the Construction Unit (CU) and Design and Research Unit (DRU). Details of the component are in Annex 5. The following works would be funded (lift commands have been excluded from the scope of this project, see para 2.19):

(i) Canal Systam rehabilitation (US$42.5 million) including: (a) replacement of deteriorated lining of the main canals (1.5 Mm2); (b) silt clearance and bank strengthening (13 Mm3 earth work); (c) replacement of about 300 masonry structures and repairs to about 6000 masonry structures; and (d) repairs to buildings;

(ii) nrajnage S:ystem rehabilitation (US$24.6 million) including: (a) resectioning of about 2,300 km of the existing drainage system: and (b) rehabilitation/replacement of 700 masonry structures across the drains;

(iii) River Control Works (US$4.1 million) includes rehabilitation of about 900 km of embankments and about 500 spurs;

(iv) WatCr_Our.se rehabilitation (US$3.0 million) of about 200 existing lined water courses (length 425 Km), including lining of about 70 km and repairs to damaged structures. At negotiations an assurance was obtained that HID shall select water courses for rehabilitation only after beneficiaries served by the water course have been organized in WUAs;

(v) Augmentation Thihpewells(ATWa) and nlreAt Trrigation Tubewells nTTlTs): rehabilitation (US$6.3 million) of selected ATWs and DITs managed by the public sector, including their electromechanical equipment (the support for DITs would be in the context of a rapid program of privatization or closure). At negotiationg, an assurance was obtained that the selection of ATWs and DITs would be in accordance with criteria agreed with IDA (see Annex 5, paras 15 and 17);

2.08 Modernization WtSS164.4million. 36% of hase nost. Annex 6). The main objective of the modernization component is to upgrade assets of HID. Modernization of facilities can lead to substantial water savings, and better control of water delivery. Improved regulation of water flows encourages the adoption of modern farming systems. Implementation responsibilities for this component rests with the CU and DRU (see Annex 6 for a detailed description of the component). Investments would be in the following areas:

(i) Modernization of Canal System (US$ 47.1 million): new lining of about 60 irrigation channels, 25 in the WYC and the rest in BC. Parts of these systems that have been lined under Haryana Irrigation I and II - 9 -

projects, and under the ongoing NWmPt are excluded from the project;

(ii) Modernization of Augmntation Link Feader Canal in WYC System (US$2.1 million): constructing a link channel (about 24 km) of Augmentation Canal to feed Kheri, Budha Khera, Old Nardak and Karnal Distributaries of WYC, including remodelling the existing intermediary channels and the Augmentation Canal;

(iii) Modernization.of Wattr coures (US$56.1 million) including lining of 1500 unlined water courses (550 in WYC and 950 in BC) of a total length of about 7000 km. Priority would be given to modernization of water courses where farmers are willing to form WUAs,

(iv) Hathnikuind arrage and Link Channel (US$51.2 million). A new Barrage would be constructed across the ramuna river at Hathnikund, about 3 km upstream of Tajewala Headwork, to replace the Tajewala (US$43.9 million). A Link Channel would be constructed to connect the new barrage at Hathnikund to the NYC (US$ 7.3 million). It would be a condition of disbursement against the construction of Hathnikund Barrage and Link Channel that the interstate agreement on sharing the waters of the Yamuna river is signed between the riparian states;

(v) Construction/ Extension of Minors (US$7.9 million): extending existitq minors and constructing new minors in 40 locations spread over the command of the two canal systems. T:,is component would depend on completion of the SWP to determine water availability.

2.09 Tmproved O&M (USAl81l8million 40s of base Cost. AnnQx A1. The main objective of the O&M component is to improve service delivery performance to all users and moving over time to price water services at cost. Funding for O&M would be directly linked with service cost recovery for O&M from all users (see paras 2.17-2.19). Services provided by HID would be managed by two Water Services Units (WSUs), the Western Yamuna WSU and the Bhakra WSU, bringing under one line of management the presently fragmented operations and maintenance functions (see Annexes 3, 8). Modern management systems in the areas of planning, programming and budgeting, monitoring and recording, asset and maintenance management and financial management at the center would be introduced. Computer based real-time management would assist canal operations and enhance operational decision making, system monitoring and analysis of performance (see para 2.12).

(i) Canal System maintenance (US$113.2 million) including: silt clearance and bank strengthening (47 Mm3 earthwork); (b) lining repairs (about 890,000 m2 ); (c) weed clearance (90 Mm2); (d) maintenance and repairs of about 20,000 structures; (e) maintenance of 32 pump houses;

(ii) Drainage System maintenance (US$37.7) including: (a) internal silt clearance (22 Mm3); (b) maintenance of about 2,400 structures; (c) maintenance activities on about 150 pump houses. - 10 -

(iii) ft{ver Cpnt,Q1 N-X (US$8.9million) including: (a) maintenanceon a total of 915 km of embankments;(b) maintenanceof about 900 structures;

(iv) Wator Curnie maintenance (VS$13.1 million) including: (a) repairs to lining of 30 km of water course; (b) earthworkson 30 km; (c) nakkas and culverts on 10 km;

(v) aYgntatiC n Tuhewglls (US$7.4 million) includesmaintenance of groundwaterpumping installationsof the ATWa.

(vi) mairtenance of infrastructure of the H x=na Trigaign R&arch_a" =uai,ing in*t{tute. Kurukahet (US$1.5 million).

2.10 TnAtitutia Su=nort ttJRS32-.i 7% of hasp nnMt- Annew 4i. This componentcould supportthe major institutionaland administrativereforms undertakenby HID and proposed under the project (see paras 2.15, 2.16). Four main items comprise the component: (i) institutional strengthening; (ii) planning and data collection; (iii) training; and (iv) research and development.

ti) tttutional Stren^therdng provides technical assistance and training for institutional and administrative reform, groundwater regulation, environmental management and beneficiary participation and WUAformation (see para 2.11). Funds would also be provided to establish an information and communications system, and to upgrade computer capacity. Investments would also cover civil works for office and housing construction. Thplentation royonRihlities: Engineer-in-Chief (EIC), Chief Engineer Coordination (CEC), AdministrativeUnit (AU),CU, Water RegulationUnit (WRU), Water Services Policy Support (WSPS);

(ii) Planning and Data Collection would finance technicalassistance for hydrologicaldata collection,SWP preparationand updating,and project planning. Investmentswould also include specializedequipment for discharge measurement and a groundwater laboratory. A management information system (HIS; para 2.12) would also be introduced. Imp1.ementation renponsibiletlee: EIC, CEC, AU, CU, WSU0,Data Collection and Water Resource Planning Unit (DPU),DRU;

(iii) x=ain±mowould be provided to orient staff with agency policies, procedures and functions. Routine and specialized training would be funded for O&M staff and support staff. Also, training staff of RID and interested farmers in areas related to system turnover and formation of WUAs would be financed. Implntatinn res hilities: RIC, AU, WSU;

(iv) Research and Develomeant would cover: (i) research on drainage collectordesign; and (ii) research on sprinklerand drip irrigation. Investmentsfor research and developmentwould include technical assistance,civil works on drainage collectors,sprinkler and drip irrigationequipment. Implementationresmoplnhilitisa: EIC, CU, DRU. - 11 -

2.11 To support increasedhemIreiarx *nrtitr -ionin maintenanceof water courses on an initialpilot basis (see para 2.20, 2.21), funds are provided for training of HID staff and farmers, contractswith training institutesand NGOs, and study tours, both nationallyand internationallyfor staff and farmers (Annex 11 provides details). At naggL±aFLona,an assurance was obtained that any NGOs contractedunder the project would be selected accordingto criteria agreed with IDA (Annex 11, Attachment1). The WSPS would be responsiblefor the guidance of the turnoverprogram, and the EIC, CEC and WSUs would be responsiblefor its implementation.

2.12 A ce=GutaX based MIS aystem (Annex 9) would be established to support HID's operationalactivities. The design would support distributed processing,hardware, software,connectivity and a communicetionnetwork2. The informationsystem would include data on hydrology,meteorology, crops, population,water service deliveries,budget, program tracking, cost accountingand allocation,water accountingand flood forecasting.A mainframe central computer and approximately500 (486)personal computersto cover the staff offices and field units would be installed.A statewide communication system would be established,and the radio network would be strengthenedto facilitatehydrological data collection.

2.13 For the above components,vehicles and equipmentwill be purchased including: (a) 296 light vehicles and trucks comprisingjeeps (208), cars (36),motor cycles (100),buses (2), and tipping trucks (50); (b) heavy equipment includes speciallyequipped tractors (5), hydraulicexcavators (10),and road graders (20). Office equipmentwould also be provided under the project.

Policy Reforms

2.14 During projectpreparation, GOH initiatedmajor policy reforms to provide the necessary frameworkto achieve project objectives. The reform program includes: (a) reorganization of HID, CADA, and HSMITC into a unified agency with specialist functions; (b) annual programmingand budgeting,with an agreed prioritizationfor allocationof funds; (c) full budgeting and funding of O&M expenditures;(d) full recovery of O&M costs from beneficiaries of services provided by HID; (e) preparationof the SWP and implementationof its recommendations;(f) providingbeneficiaries with options to operate and maintain facilities; (g) rigid groundwatermanagement and a water rights/licensingsystem for all water supplies;and (h) staff specialization and continuity,and increaseddelegation of authority. At negotiations,the detailed Policy Reform Program proposed by GOH was submitted under a Letter of Development Policy, as presented in Annex 2, Attachment 1. The basis for the reforms is as follows.

2.15 Instittinonal Reform (Annex 31. During project preparation, an in-depth internal review of HID was undertaken, as well as a review of the appropriaterole of HID in relationto HSMITC and CADA. The resulting

2 HID plansto introducein futurethe SupervisionControl and DataAciuisition System (SCADA) which would provide safe reliable and accurate informai.ion on water deliveries and enable real time management and control of canal systems. - 12 - recommendations have been consolidated by GOH into an action plan for institutional reform involving organizational, procedural and policy changes to which HID is committed. Consistent with the recommendations of the institutional review, a State Water Resources Committee (SWRC) has been created, chaired by the Chief Secretary and including secretaries from all concerned Departments (Irrigation and Power, Agriculture, Industries, Urban Development, Forestry, Fisheries, Planning, etc). The Committee was constituted to give policy guidance on water use and allocation issues, and ensure that conflicting inter-sectoral demands are dealt with in a rational fashion, noting future needs as well as current demands. A Water Regulation Unit (WRU) has also been established under the Secretary of Irrigation and Power. HID's name would be changed to Haryana Water Resources Department to reflect correctly its broad mandate.

2.16 As part of HID's organizational chanres, the following specialist Staff Offices would be established under the EIC, with regulatory and advisory functions for sectoral management: (i) Programming and Budgeting Comm5ttee (PBC); (ii) Chief Engineer Coordination (CEC); (iii) Environmental Affairs (EA); (iv) Water Services Policy and Support (WSPS); and (v) Quality Assurance (QA). Line Units with operational responsibilities would be established for: Administration, Data Collection and Water Resource Planning. Design and Research, Construction, and regional Water Services. New responsibilities have been established within this framework, including state water planning, project and drought planning, administration, programming and budgeting, quality assurance and environmental affairs (see Annex 3 for institutional modifications and responsibilities). Policy changes include prioritized allocation of funds, utilizing the SWP as the basis for confirming investment viability, full cost recovery of O&M, and changes to personnel policy. procedural changes include, inter ali4, annual and long-term programming and budgeting, and program tracking, cost accounting to provide the basis for allocation of O&M costs among services and for financial monitoring (see Annex 3). HID has initiated the publication of an Annual Report which details their work program, budget, plan and non-plan expenditures, and performance against targets, and its publication would be continued under the project.

2.17 operation and Maintenance (O&M. Annex 81. In preparation for this project, the status of all existing facilities was reviewed in detail and the estimated annual O&M needs of the system defined. Some thirty thousand structures were involved, together with thousands of kilometers of river channels, canals, water courses and levees. The information thus assembled has been computerized as a means of planning and programming future O&M works as well as providing a monitoring mechanism for retrospective analysis. HID proposes to link O&M funding to recovery of O&M cost: over the project period, the aank's financing for O&M would decline, while cost recovery from all users would increase correspondingly to take up the responsibility of O&M financing (see para 2.18, 2.19). Thus, HID is committed to two fundamental and interlinked reform objectives with regard to funding O&M: frat, it is committed to finance fully the needed levels of O&M expenditures, and 9sgQnd, to fully transfer the budgetary burden of O&M to all users over the next six years. The O&M activities of HID would thus become self-supporting, and allow reallocation of scarce public funds to other developmental works. The - 13 -

reorganization of HID, as set out in Annex 3, would also lead t. improvements to the O&M structure: the two units formed with geographical responsibilities for all O&M of irrigation and drainage facilities in the Yamuna commands and the Bhakra commands, respectively, would be exclusively responsible for all O&M functions of HID. This will allow shared equipment between all works, better work scheduling, and allow more specialized attention to the O&M function. At negotiations, an assurance was obtained that, beginning April 1, 1994, and every April 1 thereafter, GOH would fully budget for the works portion (in current prices, see Annex 2, Attachment 2) of the following year's O&M expenditure, which is based on the detailed work program of HID.

2.18 Cost Recooery (Annex 10). HID provides water supply and drainage services to farmers, municipalities, industries, government departments (Forestry, Agriculture, etc), out-of-state users (Delhi), and commercial enterprises. The charges for these services vary, reflecting the different level of priority of service provided. In addition, as is common in India, charges also reflect an element of 'ability to pay". Water provision needs to be more cost effective, and its utilization improved. To this end, with the exception of areas in the south of the state (see para 2.19), GOH has taken a policy decision to raise charges to all users so as to recover fully O&M costs by the end of the project period. Present proposals envisage an approximate doubling of agricultural rates, and larger increases to other users over the project period. The cost accounting system described in Annex 10 would provide a more accurate and detailed breakdown and allocation of costs, and allow further refinement of charges over time, as well as basic information required for the proposed turnover of facilities to users. It is currently estimated that beneficiary contribution to the project through improved cost recovery would be about US$165 million (about 34% of total project cost).

2.19 GOH provides a subsidy in the provision of water in the lift commands of backward and drought affected areas in the south of the state. The bulk of this support provides villages with water for domestic purposes, including drinking and washing, filling village ponds, and livestock watering. Water is also provided to subsistence agriculture for a small area (2% of the irrigated area). The provision of subsidized water (household supplies and water for livestock) is viewed by GOH as a social necessity to stabilize the livelihood of the existing population in these semi-desert areas, avoiding the costs of temporary and permanent migrations. Under the project, the emphasis would be on promoting financial self-sufficiency of 3 Mha of irrigated land, and the 50,000 ha in these backward areas are not targeted for full cost recovery. At nA2 tiatinsnt,an assurance was obtained that full cost recovery of O&M from beneficiaries, with the exception of lift comnands, would be phased in as follows: 30% by April 1, 1995; 50% by April 1, 1996; 60% by April 1, 1997; 80% by April 1, 1998; and 100% by April 1, 1999.

2.20 Beneficiary Participation (Annex 11). It is the policy of GOH to reduce HID's involvement in system O&M, and pass this responsibility to beneficiaries as appropriate. The existing Canal and Drainage Act, based on the Northern India Act of 1873, provides for a clear role of the farmers in operating and maintaining the water course (the lowest common channel, which serves an area of 100-300ha). Traditionally, HID was responsible for - 14 - maintainingfacilities above the head of the water course and farmets were responsiblefor maintainingthe water course. However, as water course lining has progressed,the Departmenthas de facto taken over the 06M responsibilities. Under the project, GOB would promote turnover of maintenance to beneficiariesorganized into WUAs. The approach would be progressiveand voluntary, noting that the present system of aWxatSew is working satisfactorily and should not be disturbed (see Annex 11), while giving farmers the option of assuming full responsibilityfor g4intAnannA of water course or higher level channels in exchange for relative reductionsin water charges, given that water charges are expectedto rise overall for irrigationservices. Also, priority would be given to rehabilitationand modernizationof water courses where farmers are willing to form associationsand take over maintenance responsibilities.GOH would undertakean irnformationand public educationprogram to advise farmers and users of the benefits of the new policies,using experiencedNGos as appropriate.

2.21 Turnover of system maintenancewould be on a pilot basis to confirm the key mechanismsthat ensure success,and to demonstrateto other farmers the benefits of farmer managed systems. GOH intends over time to expand farmer involvementto cover more geographicalareas, and at higher levels of the system. GOH would organize a project council with farmers' representativesto advise HID of their needs and preferences,desired improvementsin service delivery,and possible problems. GOH also intends to recover some part of rehabilitationcost from farmers in the future, as the benefits become more apparent;this, however, is not seen as a viable option at this time. GOH will define its policy on turnover by December 1994, and by June 1995, set out the rules and proceduresthat would govern maintenanceof water courses taken over by farmer groups (see Annex 2, Attachment 1). By December 1995, areas would be selectedfor turnover activities,and training initiatedto promote the approach. Any rehabilitationof infrastructure would be carried out and formal turnover would take place by June 1996, prior to the Rabi irrigationseason. Thereafter,performance would be monitored in the pilot areas to assess farmer response and replicability. Annex 11 describesthe details of the program for system turnover and WUA formation. Irrigationturnover would be formulatedwithin a frameworkof policies and responsibilitiesbeing developedfor all services. It would be importantto assure consistencywith flood control and drainagedistribution.

2.22 Ground Water Regulation and Legialation. In Haryana, the water table is either rising or in overall balance (wherethe salinity is not severe) as a result of conjunctiveuse of ground water with surface supplies. Elsewherewhere fresh, the water table is falling,often rapidly (O.5m/yr)as farmers, cities, villages,and industriesexploit the groundwaterfrom private and public tubewells. The falling water table is a matter of considerable concern. Over exploitation threatens the quality of the resource--the lower level aquifers are generally more saline, and significant differences between fresh and saline areas induce intrusion of saline water. In some areas, unexploitedwater must be retained for village use. To address this problem, GOH proposes to introducelegislation to control groundwaterdevelopment and exploitation. Current controls are limited to a restrictionon institutional credit in areas where the water table is falling,which does not prevent - 15 -

development by those able to invest from their own resources, or over-pumping from existing wells. The proposed legislation will be a modification of the India Model Law making enforcement more rigorous and increasing penalties for violations. A system of water use license would be used: all new groundwater pumps, both private and public, would require licensing in areas of groundwater overdraft. Procedures for regulation would be defined upon finalization of the legislation. The WRU would oversee the process.

2.23 state Water Plan (Annex 121. With demands increasing in the domestic, industrial and commercial sectors (plus substantial existing shortfalls in supplies to the Union Territory of Delhi), future allocations of water among users will require careful attention (see para 1.08). During project preparation, a water resource computer model was formulated to analyze water allocations within the state, the effect of modernization works, and impact on groundwater. In parallel, projections of water demand over the coming 25-50 years were made under the guidance of the newly created SWRCI. Storm drainage, flood control, agricultural drainage, drought protection, water management and environmental protection will play a major part in the state's water resource management. The model would be able to test future scenarios by mid-1994. The SWP would be finalized addressing: (i) land use plans; (ii) demographic projections; (iii) water resources; and (iv) financial capacity (see Annex 12). It would project conditions at 10, 25 and 50 year time horizons, to be updated at five year intervals. It would not only guide programs and projects but also enable enforcement of regulatory measures. The detailed Water Plan would be completed by October 1995. New investment needs in drainage in the state would be addressed through the Northwest India Drainage Study, which is likely to continue with bi-lateral assistance, to produce a consistent package of short-, medium-, and long-term measures fot implementation. The results of the Study would be coordinated with the SWP.

2.24 nndfture Priorities. Under the project, public expenditure priorities would be reoriented to rationalize the use of scarce financial and physical resources. GOH proposes to allocate public expenditures with the following priorities: (i) activities supporting the reorganization and administrative reform of HID; (ii) O&M of existing facilities; (ii:) rehabilitation of facilities; (iv) modernization of canals, control structures, and water courses; and finally (v) construction of new facilities. This prioritization would be reflected in an annual work program, which is an essential element of the project. By restricting activities to those that can be funded in the above sequence of priorities, it would be assured that deterioration in facilities dnie to poor O&M and diversion of funds to new works would be prevented. In addition, a direct linkage between cost recovery and the investment program would be established, since shortfalls in cost recovery would reduce funds available for other activities, including new investments. Finally, the process would ensure that data collection, planning and design activities are properly phased in relation to the work program, thereby maximizing the returns from project investments. This reorientation of public expenditures would help rationalize the use of scarce resources. - 16 --

2.25 Power Sentor. To address the issues of the power sector (para 1.11), during project preparation HID prepared an action plan to: (i) eliminate by March 1996 the full arrears to HSEB due to services provided to HID and HSMITC; and (ii) prevent future recurrence of arrears. For full cost recovery, HSEB would raise agricultural power tariffs to the public sector to Rs 1.42/kWh in 94/95, and continuously escalated at 12% thereafter. In addition, GOH would reimburse HSESB fully for the increased costs incurred in delivering power to irrigation (in the public sector) to the extent of the difference between the new, higher tariff in force and the cost of power delivery. Adjustment of power charges for the private sector is under consideration as part of the overall power sector reforms, and GOH aims to increase the flat-rate tariffs to the equivalent of the GOl recommended minimum tariff applicable to metered users. Raising the current metered rate to the private sector could be addressed through determining a regional power tariff (this option, however, is beyond the scope of the project). The project thus addresses an important need for correcting imbalances in power use, and consequently water use, in the state. The Policy Reform Program (Annex 2, Attachment 1) sets out the details and timeframe of GOH's policy on power sector reform.

2.26 The proposed reforms are integral to GOH's strategy for development of its water resources. GOH has confirmed its commitment to carrying out the Policy Reform Program (which includes institutional reform, O&M, cost recovery, system turnover, and power sector reforms) following the proposed time schedule (see Annex 2, Attachment 1) and would review annually with GOI and IDA its progress in implementing the reforms and evaluating their contribution to GOH's strategies for the sector.

TIT_ COST ESTIMATES, FINANCING AND DISRURSEMNTS

Proiect Costs and Financing

3.01 PrQject Costs. Total project costs are estimated at US$483.4 million equivalent, including physical and price contingencies, and US$11.6 million in local taxes. The direct and indirect foreign exchange is estimated at US$22.5 million, or 4.7% of project costs. Physical contingencies were applied to baseline costs at the rates of 25% for civil works of the Hathnikund Barrage, 15% for all other civil works, 15% for equipment and 10% for vehicles. Price contingencies of 2.5% for 1993 and thereafter were applied to the foreign exchange component. For local costs, price contingencies were added at 7.0% in 1994, 6.5t in 1995, 6.0 in 1996, 5.5& in 1997, 5.0% ir. 1998, and 5.0% in 1999. Detailed project costs are in Annex 1. -17 -

ProEet Cost wmnryary

compgat J^n.rA1 Parrign Tetal LflQa1 Pt rA*gn 'N*a1 --- Rs M ……US=SM…------Rehabilitation 2431.3 108.9 2540.2 77.2 3.5 80.6 Modernization 4949.3 230.5 5179.8 157.1 7.3 164.4 Improved Operation & Maintenance 5560.4 165.9 5726.4 176.5 5.3 181.8 Institutional Support 947.4 89.9 1037.2 30.1 2.9 32.9

^^ael1Castq n 138P8^5 5952 14L136 44S a8~ a 4A Physical Contingencies 1104.5 74.5 1178.9 35.1 2.4 37.4 Price Contingencies 2735.9 184.0 2919.9 -15.1 1.3 -13.8

rnlaoit cet a 127722_g 8536 1U5SZ.5 460- 22.i lILA

3.02 Prnie-t ?rinanri-ng. The proposed IDA Credit of US$258.0 million would finance about 55% of total project costs net of taxes, or 53.0% of total costs including taxes. It would finance 97% of the direct and indirect foreign exchange costs and 51% of local costs. GOH's contribution would be US$225.4 million equivalent, as shown in the following table. Out of the total GOH funding, about US$165 million would be contributed by beneficiaries in the form of cost recovery.

… --- USS Million ------

=GOH 224.7 0.7 225.4 IDA 236.1 219 258.0 Total 460.8 22.6 483.4

The Credit would be made available to G00 on standard terms and conditions and on-lent to GOH under standard arrangements for developmental assistance L_othe states. At n oaAtionA, an assurance was obtained that GOI and GOB shall implement a system satisfactory to IDA for channelling the funds required for the project to the project entities. An understanding was reached at n*u=toa±L.nt that GOl would release about three months' anticipated project expenditures in advance to GOH (in accordance with the amounts established in the Annual Action Plans, para 4.06), and that upon receipt of funds from GOI, GOH would transfer such funds, together with its quarterly counterpart contributions, immediately to the project accounts of HID.

Pronurartnt (Annex l5

3.03 Land (USSS 5 M!. Land would be acquired for the Hathnikund Barrage, Link Channel, Feeder Channel and modernization/ extension of minors. GOH would finance all land costs.

3.04 Civil Works (USS297.7 M). With the exception of the Hathnikund Barrage, civil works are scattered and spread throughout the project area, and would not attract foreign bidders. Works would be procured following international or local competitive bidding (ICB/LCB) or force account - 18 -

proceduresas follows: (a) I= (US$51.3 M): civil works for Hathnikund Barrage would be procured through ICe proceduressatisfactory to IDA: (b) J= (US$191.1M): would includecivil works for canal, drainage and water course rehabilitation,modernization and maintenance; (c) wE-eaAcrcunt (US$49.2M): would include all small civil works contractsvalued at USS 10,000 equivalent or less. For all civil works procured under LCB/1CD,contractors would be respoasible for procurement tifall materials,including cement a4cdsteel. If GOH supplies construction materials, this would be considered as reserved procurement and the estimated cost of such materials thus supplied would be excluded from Bank financing (see Annex 15).

3.05 Vehlel. ZqUipmnt And MAtArials (US$21.2 ML. These would be procured as follows: (a) vehicles (US$3.5M) -- the immediaterequirement of vehicles would be procured followinglocal shoppingprocedures up to an aggregate of US$0.7 M. The balance requirementswould be bulked and procured followingICB procedures; (b) heavy equipment (US$4.1M) and computer equipment includingsoftware (US$9.3M) would be procured through ICB: (c) other equipment (US$4.1M) availablelocally and readily serviced through local facilitieswould be procured through LCB.

3.06 TAchnical Assistance (USS3.6 M.. Consultancyservices (US$3.2M, of which overseasUS$1 M) would be contractedon terms and conditions in accordancewith the "Guidelinesfor the Use of Consultantsby World Bank Borrowersand the World Bank as ExecutingAgency, publishedby the Bank in August 1981. Other technicalassistance including training, contracts, etc. estimatedat US$0.4 M equivalentwould be carried out either by HID or agencies with relevant experienceand subjectto approval by IDA.

3.07 Bank's standard bidding documentswould be used for all procurement under ICB/LCB. For comparing foreign and local bids in ICB, both for civil works and equipment, the qualifying domestic bidders would be allowed a margin of preferencein accordancewith the provisionsof paras 2.55 and 2.56 of Bank's Guidelines.

3.08 Tncremental Qperating Cost (USS155.4 M). The Credit would support incrementaloperating costs for vehicles,equipment and energy on a declining basis. GOH would finance all staff costs.

3.09 R9view of Contracts. All contracts for civil works and equipment valued at US$ 200,000 and above, and all consultancycontracts valued at US$ 100,000 and above as well as first five contracts,both for goods and works, irrespectiveof the value would be subject to prior IDA review. All other contractswould be subject to random post review in the field by visiting missions. This will result in about 50% of the project procurementbeing subject to prior review. The nature of the project, consistingmostly of works which have been successfullyimplemented under past Bank projects in the state, is such that a hi-her level of IDA rev4ew would not have a significant impact on procurementquality. - 19 -

3.10 The proposed procurementarrangements are sumnarizedbelow:

uimary nf Prgo6sAd POQUrAMnt Aana ta fSg if eivalent)

Consulting protect Rlment L Sarv±ca. Other mm RIA1h 1. Land 5.5 5S.5 2. Civil Works 51.3 197.1 49.2 297.6 (46.2) (162.1) (20.6) (228.9) 3. Vehicles/Equipment 3.1 Vehicles 2.8 0.7 3.5 (2.3) (0.5) (2.8) 3.2 Equipment 13.6 4.1 17 7 (10.9) (3.2) (14.1) 4. Technical Assistance 4.1 Policy Support 0.7 0.7 (0.7) (0.7) 4.2 Implementation Support 1.2 1.2 (1.2) (1.2) 4.3 Capacity building 1.7 1.7 (1.7) (1.7) S. IncrementalOperating Cost 28.0 127.4 155.4 (8.6) (8.6) TOTAL 67.7 201.2 3 6 77.9 132 9 483 3 (59.4) (165.3) (3.6) (29.7) (258.0) ------__------__------Note:Figuresin parenthesisare the respective amounts to be financedby IDA. ICB: International Competitive Bidding: LCB: Local Competitive Bidding: Other: force account, direct contracting, local and international shopping.

A schedule of procurementactions is given in Annex 16, Attachment3.

Dhrsemmnt_ I Annex 1171

3.11 The proceeds of the Credit would be disbursed against:

(a) 90% of expenditureson civil works for rehabilitationand modernizationof canals, drainage systems,water courses, ATWs and DITs; all expenditureson civil works for improved O0M would be financed on a decliningbasis as in (d) below:

(b) 100% of foreignexpenditures or 100% of ex-factorycosts, or 80% of expendituresfor locally procured vehicles,equipment and furniture;

(d) For incrementaloperating costs: 90% of expenditureson recurrent costs covering the period through March 31, 1995, 35% of expendituresfrom April 1, 1995 throughMarch 31, 1997, and 10% of expendituresthereafter. - 20 -

3.12 Disbursements against expenditures on contracts for consultants and training exceeding US$100,000, and on contracts for civil works, vehicles, machinery and equipment exceeding US$200,000, would be fully documented. For all other expenditures, IDA would disburse against Statements of Expenditure (SOEs). Supporting documents for SOEs would not be submitted to IDA, but would be retained by GOH and be available to IDA staff during supervision.

RAtroactive Finanoina and Special Account

3.13 To expedite project startup, IDA would finance retroactively project expenditures incurred after March 1, 1994 to the date of Credit signing, up to a limit of SDR 7.3 million (US$10 million equivalent), provided that procurement procedures acceptable to IDA were followed. Expenditures on vehicles and equipment, consultancy services, training, other preparatory activities and incremental operating costs would be eligible. To facilitate IDA disbursements, a Special Account in US dollars would be established in the Reserve Bank of India with an initial deposit of up to US$8 million. This deposit is based on estimates of the project's financing needs and projected IDA disbursements (Annex 17). The project Completion Date would be June 30, 2000, and Closing Date of the Credit would be December 31, 2000.

Accounts and Audit

3.14 Project accounts would be maintained by HID. The accounts would identify all project transactions on an on-going basis, including contributions from GOH, GOI and the Credit. Assurances were obtained from GOl and GOH at nggotiationa that: (i) project accounts, including Special Account, would be maintained and audited annually in accordance with sound auditing standards consistently applied by independent and qualified auditors acceptable to IDA; and (ii) certified copies of the annual financial statements and SOEs together with the auditor's report, which would comment separately on the SOEs, would be submitted to IDA no later than nine months after the close of each fiscal year.

TV. P2ROJECT I ENTATTON AND MONTTORTW

0rganimation and Management

4.01 The proposed project would finance part of the state's agreed program in water resources for the next six years, and would be implemented and managed by the Engineer-in-Chief (EIZ), HID. Project guidance responsibility would rest with the Secretary, Irrigation and Power, who would coordinate with the SWRC, the WRU and the EIC. The EIC would be supported by the PBC, and the Offices of the CEC, EA, WSPS and QA. Implementation responsibilities for the rehabilitation and modernization components would rest with the CU and the DRU. The project activities under O&M would be carried out by the BC and WYC Water Services Units. Institutional support activities would be mainly carried out by the AU, and other specific line units (see para 2.10). The implementation arrangements are described in Annex 16, and a matrix of organizational and management responsibilities is in Annex 16, Attachment 1 (for organizational chart for HID, see Annex 3). - 21 -

Training and Tefhninal Assistance (USS3 6 million)

4.02 Training under the project would build skills in the areas of computers, financial management, including budgeting and cost allocation, programming and scheduling, personnel management, water resources planning, and operations and maintenance including water operations, construction, supervisor training and heavy equipment operation and maintenance. Training would also focus on the social aspects of beneficiary motivation, WUA formation and organization, using NGO expertise. Given the extent of change proposed under the project the requirement for technical assistance is extensive. This assistance will be provided by a mix of international and national consultants in the areas of organizational reform, groundwater management, environmental management, state water planning, hydrological data collection and management, administrative reforms, computerization and communications, real time operations of water systems and asset and maintenance management, and turnover policy and regulations. Funds would be provided for national and international study tours. Technical assistance funds for institutional strengthening, beneficiary participation and environmental management are detailed in the relevant Annexes.

Monitoring and Evaluation (Annex 16)

4.03 Physical and financial monitoring of project progress would be the responsibility of the CEC. An implementation schedule is provided in Attachment 2 of Annex 16; a schedule of procurement activities is in Attachment 3. Data on key project indicators, would be collected and analyzed regularly to asness progress, exercise control and identify possible problems. These would include: implementation of HID reorganization and effectiveness of operation within the new structure, preparation and updating of SWP and implementation of its recommendations, agricultural growth and crop diversification, delivery of water and improved services, cost recovery from users, water savings, formation of viable WUAs, water-logging and salinity, and project planning, programming and budgeting (see Annex 16, Attachment 5). HID would commission baseline surveys funded under the project covering the following aspects: agriculture and income data; irrigation data; water use, delivery, and hydrological data; beneficiary participation and WUA activities; etc (see Annexes 4, 16).

4.04 At negotiations, an assurance was obtained that GOH shall (i) under Terms of Reference (TOR) agreed with IDA, carry out, not later than January 31, 1995, a socio-economic baseline survey for various aspects of water resource use, management and delivery services; (ii) furnish the findings of such survey to IDA for its review and comments; and (iii) use such results to monitor the development impact of the project. Responsible implementation units would submit quarterly progress reports to the CEC. The reports would not on'v quantify and compare progress with the action plans and the Staff Appraisal Report, but would discuss the reasons for progress or lack of progress for each component, and propose measures to resolve any problems. The EIC, in coordination with the PBC, CEC, EA, WSPS and QA, would prepare a comprehensive progress report every quarter for submission to the Secretary. HID would also maintain quarterly progress reports to track the performance of - 22 - turnover activities and provide to IDA such information as may be required as part of its consolidated project progress report (see para 4.06). These reports would also cover implementation of the reform measures and how they have contributed to GOH's sector strategies.

4.05 The CEC would also prepare an annual work program and budget, providing documentation on the following: (a) description of each year's works, schedule of activities, staffing requiremests and distribution of responsibilities; (b) proposed expenditures (including consultant and training), compared to previous year's actual expenditure; and (c) financing plan and source of futads (including GOH contribution). Each annual budget should detail: (a) midjor contracts for civil works exceeding US$200,000 and for ICB for goods; (b) list of schemes turned over in the previous year, and proposed schemes for the next year; and (c) details of revenue budget showing charges for preceding year, amounts collected, and proposed future charges, by customer group or service. The QA Office under the EIC would evaluate and make recommendations for corrections for project activities.

Pro5ect Reviews and Reporting

4.06 HID would be responsible for the internal reporting requirements of the State and GOI, and for preparing an annual work program and budget for submission to IDA (see para 4.05). HID would prepare Annual action Plana to assist project planning and implementation, and supervision by IDA. These would also facilitate flexibility year-to-year in amending project components (or possibly, in accordance with IDA's procedures, introducing new components) based on implementation experience. The action plans would review for each project component and responsible unit the past year's achievements in terms of physical and expenditure targets, by quarter, and include a work program, and revenue and expenditure budget for the following year. The Annual Action Plan would also provide details of when and how the policy reforms to be implemented the following year would be carried out. The Office of Environmental Affairs would review each Annual Action Plan from environmental points of view. At nea*tiatiUns,an assurance was obtained that by March 31 each year, starting 1995, GOH would provide to IDA for its review and comments a copy of its approved Annual Action Plan, including work program and revenue and expenditure budget for the following year, and thereafter implement such Action Plan. At ne2otiation, an assurance was obtained also that not later than June 30, 1997, GOH would carry out, jointly with GOI and IDA, a detailed mid-term review of project progress and possible need for adjustments to components, implementation arrangements or reforms, and thereafter implement its recommendations. HID would furnish to IDA every six months a consolidated progress report in such content and detail as IDA may require, including a summary progress report on turnover of system maintenance to beneficiaries. A Project Completion Report would be prepared by HID on the basis of IDA's guidelines no later than six months from the Closing Date of the Credit. - 23 -

V .ENFITSN.JUSTIFICATI OND RISKS

Project Benefits and Justification (Annex 141

5.01 Project Benefits. The project would generate substantial economic benefits in the short- and long runs. Of the many benefits the project would generate, two are quantified for the economic and financial analysis. First, the project would achieve an increase in surface water supplies by reducing seepage losses and increasing the carrying capacity of major canals. Second, the project would improve flood control by rehabilitating and augmenting maintenance and management of the existing drainage structures and river control works. Previous experience suggests that investments in improving the performance of existing surface irrigation systems are economically viable. In addition, the project would generate long-term benefits which are difficult to quantify, including improved water supplies for non-agricultural uses, reduction of water-logging and salinity, and improved groundwater protection.

5.02 irrigation Benefits. At full development in year 2000, project investments would directly increase foodgrain production by 184,000 tons per year and generate a net incremental benefit of Rs 1,498 million (in constant 1993 Rs in the year 2000). Project activities would increase surface water supplies by 950 Mm3 per year, by reducing seepage losses and by increasing the safe carrying capacity of major canals. This would help expand irrigation to 155,000 ha of presently unirrigated land in the Bhakra and WYC commands. The project would increase labor productivity and incomes of a large number of farm families who previously had no (or limited) access to irrigation. Lining of water courses also increases the equity of water distribution within the water course between farmers at the head- and tail-end of the field channel.

5.03 Flood Control Benefits. The annual incremental flood control benefits of the project are calculated as Rs 1150 million annually from reduction in expected annual flood damage. It is assumed that rehabilitation and proper maintenance of the drainage system and flood control works reduces flood damage to agriculture, housing, irrigation and infrastructure by 50% annually (see Annex 14).

5.04 Non-=uantifiable Benefits. In addition to the above quantifiable benefits, rehabilitation, modernization and improved O&M would lead to relieving water shortages to agriculture due to breaches in canals, thereby resulting in improvements of yields. Improvements in water supplies to municipalities and rural areas for drinking water would also be achieved, with concurrent health and sanitation benefits. Wastewater discharge is accepted currently into the canals which is often the source of drinking water, causing health hazards: under the project, the comprehensive water quality monitoring network would enha -e water quality management. Water deliveries for industrial purpose. 3uld also improve. Modernization of canals and water courses limits the rise af the water table, and reduces waterlogging and soil salinization which can reduce crop production and yields up to 13%. Finally, the project supports regulation and enforcement to sustain groundwater levels. - 24 -

Economic and Financial Analysis (Annex 141

5.05 EconomiC analysis. Project investments, incremental O&M costs, and benefit streams are presented in Annex 14, Table 9. The economic analysis has been calculated for total project costs excluding the investments for the replacement of the Hathnikund Barrage and extension of minors (the Hathnikund Barrage is analyzed separately; see Annex 14). The following assumptions are made: (i) all costs are in constant end 1993 prices: (ii) project benefits and costs extend for 30 years; (iii) benefits derive from incremental crop production and reduced flood damages; (iv) incremental 00M expenditures remain constant over the 30 years; (v) Opportunity Cost of Capital (OCC) is 12%; (vi) project implementation is over 6 years.

5.06 ERR and Sensitivity Analynis. The overall Economic Rate of Return (ERR) of the project is estimated at 18%. The Net Present Value (NPV) discounted at 12% (to 1993) is Rs 4062 million. Increased surface water supplies generate 56% and improved flood control 44% of total benefits. Different scenarios have been tested which are described in Annex 14. Overall, the project is robust to significant changes in costs and benefits: benefits would have to drop by 27% or costs increase by 38% for the ERR to fall to 12% (or NPV fall to zero). The ex-post performance evaluation of past projects in the state support these conclusions.

5.07 Finannial Analysis. The main revenues for HID originate from water charges to agriculture, industry and municipal water users. HID's expenditures have increased rapidly in recent years, whereas revenues have decreased in real terms. In 1993/94, about 80% of HID's recurrent expenditures and all investments have to be financed by GOH. The past decline in revenues has not only deepened the financial deficit but has also created a situation where HID could not fully maintain the existing irrigation and drainage system. A major objective of the project is to achieve full cost recovery for all recurrent expenditures for operation and maintenance by the year 2000. HID has prepared a detailed cost recovery program which is based on changes in three important fields due to project activities. First, non- plan expenditures for O&M of the conveyor system would increase considerably as compared to the without-project situation, resulting in improvements of HID's services. Second, total revenues from water charges would increase about 10-fold over the project period due to HID's efforts in improving cost recovery for its higher quality services. Third, an increase in revenues from the irrigation sector can be expected as system modernization and rehabilitation leads to water savings, and consequent increase in area irrigated and revenues from water charges.

5.08 Results and Sensitivity AnalysiA. The project would generate a net financial benefit to GOH in terms of reducing HID's budget deficit by about Rs 3600 million over the next six years (see Annex 14). Whereas in 1993/94 expenditures would exceed revenues by Rs 730 million, six years later the trend is reversed and revenues will slightly exceed non-Plan expenditures by Rs 77 million (however, GOH would have to continue to finance all net investments in the irrigation system). Sensitivity analysis shows that if cost recovery is 10% less than that anticipated, total benefits would be - 25 - reduced by 15%. If total non-plan expenditures would increase by 10% over the six year period, total benefits would be reduced by 20%. Assuming that the increases of water charges are delayed by one year, total benefits would be reduced by 37%. The improvement of the financial status of HID depends greatly on the timely introduction and full recovery of future water charges.

Pro6ect Risks

5.09 There are three main risks to the project. The first risk relates to implementation of the large investment program in a timely manner. In its past two projects, HID has demonstrated the ability to implement large, complex projects to high standards. The funding size of the proposed WRCP is about the same as Haryana 7T, while implementation period has been extended. To help maintain the past high standards, during project implementation an internal project QA Unit, supported by an external consultant, would be established in HID (see Annex 3). The second risk is associated with HID's capabilities 1:o sustain the proposed higher standards of O&M of the canal and drainage system. Throughout the preparation process, HID's commitment to focus on O&M has been strong. HID's reorganization would bring the presently fragmented O&M functions under one line of management and the existing OM units would be strengthened at all levels. Moreover, annual disbursement of project funds would be linked to O&M expenditures and performance of each previous year (see Annex 8). The third risk is related to GOH's capabilities to implement and sustain the proposed changes in OaM funding, and cost recovery of water services under the project. The success of the cost recovery program is particularly associated with the provision of HID's services. This risk would be minimized by GOH's commitment to emphasize pricing policies and financial accountability in the water sector. The cost recovery program is linked to an administrative reform within HID which would be completed prior to the commencement of the project. A new unit in charge of programming and budgeting, program tracking, cost accounting and service cost allocation would be created. Annua' disbursements would also be linked to cost recovery. A specific action plan has been agreed at appraisal which would be monitored closely during supervision to minimize project risks.

Environmental Impact (Annex13)

5.10 The main environmentalconcerns which would be addressedunder the project include water quality protection, waterlogging and salinity problems, groundwater over-exploitation, drainage and flood mitigation. A Category A - Sectoral Environmental Assessment has been completed for the project (August 1993) which concludes that the WRCPsub-projects and activities would have no adverse environmentalimpacts. The project, through improved water planning, water distribution,drainage and better capabilitiesfor measuring environmentalinputs, would have a beneficial impact on the environment. An Office of EnvironmentalAffairs (EA) would be establishedin HID to develop expertise in environmental planning and management, and environmental assessment. The Office would also oversee water quality monitoring, and data collection and processing. The Office would maintain an environmental action plan based on its environmentalassessment activities and in coordination with the WRU, the WSPS, and the recommendations of the Northwest India Drainage - 26 -

Study and SWP. The main responsibilitiesof the EA are in Annex 3, Attachment 2, and liaison requirementswith other State authoritiesis in Annex 13.

5.11 Land AnuQainatin (anngxt13k. There are no on-going or anticipated future R&R issues relatedto project activities. Limited land acquisition would be necessary,usually as a small proportionof land holding. No instanceswhere an individual'sentire holding would be acquired are anticipated. Field interviewssuggest that farmers are willing to allow land acquisitionfor constructionof channels and minors alongsidetheir lands, due to the improvedagricultural benefits that project activitieswould allow. Land acquisitionprocedures would have the followingelements: (i) all land acquisitionunder the project would take place under the Land AcquisitionAct of 1894, amended in Haryana in 1984; (ii) the rate for the different classes of land (irrigated, cultivable, non-cultivable) would be determined according to the prevalentmarket rate plus an additionalamount (at present 30%) for compulsoryacquisition; (iii) compensation would be paid prior to possession; (iv) landownerswould be compensatedfor any other loss such as standing crop, buildings and trees; and (v) land acquisitionshall be completedprior to award of works contracts. Present compensationprocedures are clearly defined and satisfactory. For the proposed HathnikundBarrage, no resettlementof populationwould be involved,and about 158 ha of land (49 ha in Haryana and 109 ha in Uttar Pradesh) are needed, affecting24 persons. Part of this land has already been acquired;about 100 ha remain to be acquired. Haryana has paid an amount of Rs 1 million to GOUP as an advance for acquiringthe land in UP. The constructionof the Western Yamuna Link Channels would involve acq%.sition of 54 ha land (all in Haryana, of which about 18 ha have been acquired),affecting 12 persons. The alignment of the channels are such that they do not pass through villages or habitation. It would be a nnnditsmn for t44Rh,rR.em1 for the HathnikundBarrage and Link Channel componentthat all land acquisitionwould be done followingprocedures acceptable to IDA as outlined above. For the constructionof the Feeder Channel (length24 km and having maximum width of 30 meters), about 20 ha of land would be required in narrow strips, affecting110 persons. For the extension of minors, small and scatteredamounts of land would be required in narrow strips. At nDlggtatlong,an assurancewas obtained that GOB would implementa program satisfactoryto IDA for the acquisitionof land required for the project. Annex 13 provides a detailed discussionof land acquisitionnorms, requirementsand status for project activities.

5.12 PrnogramObjetive n Catggo. The project is directly relevant to the Bank's anti-povertystrategy. The project would improve the incomes and living standardsof small and marginal farmers through improved and equitable distribution of water for irrigation and domestic use. Farmer participation in irrigation management,which had declined in the recent past, would be reinstated through the project with the formation of WUAs. For the urban poor, the project would provide water services for their expanded future needs through improved planning and management of water resources. Domestic usage of water is almost entirely governed by women, and the project would benefit women through increased availability of water for domestic use. - 27 -

VI.- AEEMU NTS AND RECONDATTON

6.01 At negotiations, GOH submitted: (a) its detailed Policy Reform Program (which includes institutional reform, O&M, cost recovery, system turnover, groundwater and power sector reforms) under a Letter of Development Policy, as presented in Annex 2, Attachment 1 (para 2.14); and (b) an action plan to: (i) eliminate by March 1996 the full arrears to HSEB due to services provided to HID and HSMITC; and (ii) prevent future recurrence of arrears (para 2.25).

6.02 At negotiations assurances were obtained: a) from GOH that, beginning April 1, 1994, and every April 1 thereafter, HID would fully budget for the works portion (in current prices, see Annex 2, Attachment 2) of the following year's O&M expenditure, which is based on the detailed work program of HID (para 2.17); b) from GOH that full recovery of OM cost from beneficiaries, with exception of lift commands, would be phased in as follows: 30% by April 1, 1995; 50% by April 1, 1996; 60% by April 1, 1997; 80% by April 1, 1998; and 100% by April 1, 1999 (para 2.19); c) from GOH that it shall: (i) under TOR agreed with IDA, carry out not later than January 31, 1995, a socio-economic baseline survey for various aspects of water resource use, management and delivery services; (ii) furnish the findings of such survey to IDA for its review and comments; and (iii) use such results to monitor the development impact of the project (para 4.04); d) from GOI and GOH that they shall implement a system satisfactory to IDA for channelling the funds required for the project to the project entities (para 3.02); e) from GOH that selection of the ATWs and DITs for rehabilitation would be in accordance with criteria agreed with IDA (para 2.07); f) from GOH that any NGOS contracted under the project would be selected according to criteria agreed with IDA (para 2.11); g) from GOH that by March 31 each year, starting 1995, GOB would provide to IDA for its review and comments a copy of its approved Annual Action Plan (para 4.06); h) that not later than June 30, 1997, GOH would carry out, jointly with GOI and IDA, a detailed mid-term review of project progress and thereafter implement its recommendations (para 4.06); i) that GOH would implement a program satisfactory to IDA for the acquisition of land required for the project (para 5.11); - 28 - j) from GOH that HID shall select water courses for rehabilitation only after beneficiaries served by the water course have been organized in WUAs (para 2.07); and k) from GOI and GOH that: (i) project accounts, including Special Account, would be maintained and audited annually in accordance with aound auditing standards consistently applied by independent and qualified auditors acceptable to IDA; and (ii) certified copies of the annual financial statements and SOEs together with the auditor's report, which would comment separately on the SOEs, would be submitted to IDA no later than nine months after the close of each fiscal year (para 3.14).

6.03 An understanding was reached that GOI would release about three months' anticipated project expenditures in advance to GOH (in accordance with the amounts established in the annual action plans, para 4.06), and that upon receipt of funds from GOI, GOH would transfer such funds, together with its quarterly counterpart contributions, immediately to the project accounts of HID (para 3.02).

6.04 Conditions of disbursement.for Hathnikund Barrage are: (i) the interstate agreement on the Yamuna river between the riparian states of Haryana, Uttar Pradesh, Himachal Pradesh, Rajasthan and Delhi was signed (p.ra 2.08); and (ii) the required land acquisition was done following procedures acceptable to IDA (para 5.11).

6.05 With the above assurances, the project would be suitable for an IDA Credit of SDR 187.3 million (US$ 258.0 million equivalent) on standard terms with 35 years maturity. lrAia verysa, MaRCProject mrjeoat C.t &aary EU. M41t1Ion ratt .4X4O, 9 tSTotal * O Tot l Foreign bass Foroign II.: LtaL Znze TsaL. 5Khna L &a mnn W*5al zCohM W Zastitutional Su£ ort 947.4 89.9 1,037.2 9 7 30.1 2.9 32.9 9 7 Modernization 4,949.3 230.5 5,179.6 4 34 1S.1 7.3 164.4 4 36 Rehabilitation 2,431.) 108.9 2,540.2 4 IS 77.2 3.5 80.6 4 1. Iproving CperatioAs A maintenane oZ . .. ..L.224 a *0 .. ±l" .. 1 . Sa.. l *0 Total 3SaUn 0o0 13,S86.5 '95.2 14,483.6 4 100 440.9 18.9 459.8 4 :00 EPy.Seal Contingencies 1,104.1 74.5 1,178.9 6 a 35.1 2.4 37.4 6 8 Prig* <:t1dq*uCeO8 2-71soo9S,9_18 2,10 _ 20 i1. 1A X X ] o .I tot 83016 Gums 17,720.8 853.6 18,S82.5 5 128 460.9 22.S 403.4 s lOS "*4Dec 22 h1*42s;61993

i-l Project Cost ssa tY 11e" UK0 Project smes"t"ve _OOWAMkV 6Me - 104010 _01000 oaftlese.tes MS$ willievb

Imrvng OperatlOS maatlttmatl.. ftaketitatA"otm A. f.b0 a0_ Caeoultet. local 1.0 1 °0 .2 c.aoclam. Interna.tioal 0.0 - - 0 1 1.0 stu*y tors. ltag eUO.l 0.1 - 0.0 0.1 Sraiw leve -A. a^6 6-P -I bW4 W d1.e A&MlosOm 2.1 1.2 0.2 3.6 *.1005 5.4 0.1 - 5.

Uatmld Uezg - 51.) - - 51.3 W@dstviat0 1. 105.7 - - 109.0 RebakAllttin, S 71.2 11.2 Opattlon & Utateas" -. La.'AL _bdt el civil 3. 157.0 71.2 4.2 297.7 D; wh101. 0.4 0.4 t0.7 2.0 1.5

C_t4 9.00 - 0.1 9.1 mlatrw 0.2 - - 0.2 cavat - - - . Trects0 9405 Ggdgel- . 2.2 2.2 fthee vopl_ e 4 -A.&

t0441 a""_sMmst I5.5 1I6.4 71.1 72.7 327.0 tt. _b.mUe.6ceo"t A. VYbal.s 0.5 0.3 0.0 3.0 5.5 B. Sqmwat 0.5 0.6 1.5 11.2 13.0 c. ttff IT. 1.0 7.3 05.6 127.4 0 toL" 3 009 33.0 1.1 07.0 177.7 403.4

TUUt I.1 5.6 2.3 2.6 11.6 teorselu.t ebh&& 3.3 S.2 4.2 5.9 22S5 V.d b.C 22 11s42:32 1993

6-1 bxp*dltur Account& by coapouota - Total* Includlg Contingenie Indi- UazVn tmc Pto5.ct Px.Se.t cowea_s by Tm

9eeot git.1 *7 X199, ] OSII1P t itE7

Znatitut1onAl UWport 221.6 263.1 249.S 104.0 99.3 99.3 1.037.2 7.0 8.4 7.9 3.3 3.2 3.2 32.9 164.4 NoderaitatiOn 1,062.2 1,244.4 1,162.1 645.8 529.6 S13.3 S,179.8 33.7 39.5 36.9 20.5 16.8 17.0 80.6 Rab51itution 593.2 603.7 465.) 370.1 34S.6 162.2 2,S40.2 18.8 19.2 14.8 11.7 11.0 5.2 IProving Operations G faintenanc .. A1= .LA*LA ..2RAL.3., .iUL. .. 6-2 . l.- .L22& 22 12.A .. __2" 2*- 2L.1 R..*1a w1 aMlZ a* 2,769.3 3.119.2 2.885.4 2,060.1 1.914.7 1,7)1S.0 14,483.6 07.9 99.0 91.6 65.4 60.8 SS.1 459.- 4.2 2.8 37.4 Ibyacal Conticaa 260.4 308.6 280.4 132.3 110.S 86.7 1,178.9 *.3 9.8 8.9 3.5 rtlaa Conettgemie *d latta Local 100.8 3)8.0 520.0 512.2 601.3 617.4 2,729.6 3.2 10.7 16.S 16.3 19.1 20.9 86.7 Foreign 1- 7S-L. 1- 1- 7- s A 10- 5 *°-1 __0 __^ 0 _A 6 1A fbo*oe Zatlutios 102.6 34S.0 130.3 518.2 608.4 i64.9 2.769.4 3.3 11.0 16.8 16.5 19.3 21.1 87.9 -101.8 Devaluation 11.4 30.5 41.1 21.6 23.0 22.9 ISO.S -6.7 -14.7 -20.1 -18.6 -20.2 -21.1 Subtotal Price ftiaftg.nci .711. .2LL R 7 e4 .siLA .A1L. .. 7.*2 ... LSIL -.-. . .7 -2.1 __aL -...L -21-2 493.4 IOtA bMA30 GM& 3,143.6 3,003.) 3.737.2 2,732.2 2.6S6.7 2.S*5.S 10,S12.S 92.7 101.1 96.8 67.1 63.4 17.8

1.0 11.6 Tax** 79.4 113.0 103.2 SO.3 47.8 42.1 434.2 2.4 3.2 2.7 1.2 1.1 2.1 1.9 22S. Por*aga nucagc 1S4.7 222.5 211.4 *4.1 90.0 91.0 053.6 4.6 6.1 S.S 2.3

W" .c 22 U1:421)11993

7-1 Proect C _~meeby Ter F - 32 -

Page 1 of 4

HARYANA WATER RESOtURES CON OTLDATION PROJECT

POLICY REFORM PROGRA?"

Objecttlve of thA Reform Program

1. The complex issues of increasing inter-sectoraldemands facing the water resourcessector points to the critical need for formulatinga comprehensive frameworkfor the management,planning and utilizationof the state's scarce resources. Institutional development and reorientation of expenditure priorities are essential elements of an improved water development policy for the future needs of Haryana. The primary purpose of the proposed Water Resources Consolidation Project would be to tackle the broad issues facing the water resourcessector and to promote developmentin an efficient,equitable and environmentallysustainable manner. Activitiesmust be balanced and responsiveto emergirg needs and resource availabilities,and generally acceptable standards and improvements must be promoted throughout the state. The Government of Haryana (GOH)has identified the following main objectives in framing its strategy for the sector:

(a) introducewater resource planning (includingcontingency planning for droughts)and managementacross all uses of water;

(b) enhance agriculturalproductivity, encourage diversification and improveequity through improved canal and drainage infrastructure;

(e) improve the Haryana IrrigationDepartment's (HID) capabilitiesin all water and related functionalareas.

2. To provide the necessaryframework to achieve these objectives,GOH has initiatedmajor policy reforms in the sector. The reforms address issues regardingthe efficiencyof the institutionaland administrativeframework (including personnel and management procedures), improvement of the water services provided by the public sector through enhanced O&M, improvement of water resources management, planning and utilization, involvement of beneficiaries in water related activities, and the efficiency of power use in public sector water exploitation. GOH proposes to implement further changes during the project.

3. GOH's reform program provides the basis for proposed project investments and expendituresin all areas of HID's activities. Public expenditureswould be reorientedtowards support of fundamentalinstitutional changes and growth enhancing activitiesin accordancewith the followingpriorities: (i) activitiessupporting the reorganizationand administrativereform of HID; (ii) O&M of existing facilities;(iii) rehabilitationof facilities;(iv) - 33 -

hnn*x 2 Page 2 of 4 modernizationof canals, control structures,and watercourses;and finally (v) construction of new facilities. A direct linkage between cost recovery and the investment program would be established, and shortfalls in cost recovery would reduce funds available for other activities, including new investments. The allocation of water across all activities would be governed by the cost recovery reforms and pricing measures proposed by GOH, thereby improving the efficiency of resource use. rocus of Reforms

4. Consistent with its objectives, reforms would be carried out in the following areas: (a) reorganization of HID, CADA, and HSMITC into a unified agency with specialist functions; (b) staff specialization and continuity, and increased delegation of authority; (c) annual programming and budgeting, with an agreed prioritization for allocation of funds; (d) full funding and budgeting of O&M expenditures; (e) full cost recovery of O&M costs from beneficiaries of services provided by HID; (f) preparation of a State Water Plan and implementing its recommendations; (g) rigid groundwater management and water rights/licensing system for all water supplies; and (f) providing beneficiaries with options to operate and maintain facilities themselves.

5. Reforms carried out by GOH and proposed for implementation under the project constitute the Policy Reform Program. The Program comprises specific reforms or actions, which are set out below and also presented in the attached matrix (Attachment 1). The matrix presents the reforms under four headings: Issues, Policies, Strategies and Actions. GOH submitted its Policy Reform Program to IDA under a Letter of Development Policy as a condition of negotiations. Some reforms are covenanted directly and are included in the Project Agreement. GOH has confirmed its committment to carrying out the Policy Reform Program as set out in Attachment 1 and would review annually with GOI and IDA its progress in implementing the reforms and their contribution to GOH's strategies for the sector. The Policy Reform matrix would be attached to the Minutes of Negotiations and cross-referenced to the legal covenants.

Speoiffio Raformn

6. Under the Policy Reform Program, GOH will: a) by April 1, 1994, cause HID to: {i) finalize its new organization structure and staff levels; (ii) finalize unit responsibilities for the new organizational structure; (iii) prepare position descriptions under the new structure; and (iv) finalize the basic implementation schedule for the institutional reform; - 34 -

Anngx 2 Page 3 of 4 b) by April 1, 1994, cause HID to establish Staff Offices for: (i) Ground- water Regulation; (ii) Water Services Policy and Supportl: (iii) Environ- mental Affairs; (iv) Chief Engineer Coordination; and (v) Budget and Program Tracking; and Line Units for: (i) Water Resources Planning and Data Collection; (ii) Administration; (iii) Design and Research2 ; (iv) Construction; (v) Yamuna Water Service; and (vi) Bhakra Water Service; c) by Dec. 31, 1994 cause HID to take on the activities of HSMITC relating to Augmentation and Direct Irrigation Tubewells3, and of HSMITC and CADA relating to watercourse lining, depending on GOI's continuing the grant element against the schemes under CADA; d) (i) by December 31, 1994, delegate the authority for personnel action to HID; and (ii) by June 30, 1994, cause HID to implement a plan: (a) to develop specialized technical staff through rotation & choice of field and (b) for staff housing & incentives benefits; e) cause HID to (i) by December 31, 1993, adopt programming & budgeting of all its activities; (ii) by April 1, 1994: (a) initiate program work task & expenditure tracking & management; (b) introduce a cost accounting system to record costs by projects and introduce service cost allocation to estimate charges by users; and (c) computerize its maintenance scheduling & records; and (iii) by December 31, 1994, computerize its operations scheduling & records & its management action & records; f) from April 1, 1994, cause HID to: (i) assign the full funding of O&M as the first charge on HID's budget; and (ii) budget annually for full funding of the works component of O&M costs (in current prices), in Attachment 2; g) cause HID to (i) phase in full cost recovery of O&M expenditures for all services as follows: 30% of full O&M cost by April 1, 1995; 50% of full O&M cost by April 1, 1996, 60% of full O&M by April 1, 1997, 80% of full O&M cost by April 1, 1998 and 100% of O&M cost by April 1, 1999; h) cause HID to: (i) recover full capital cost of new investments from users, excepting agriculture, from January 1, 1994; and (ii) in case of

1 This unit would be responsiblefor designing and implementingthe program for turnover of system maintenanceto beneficiaries,tracking the progress of the program and expanding its scope as the results warrant (para 6.i). See Annex 12 for details.

2 This unit would be mainly responsiblefor implementingthe research activities funded under the project, see Annex 3,4 for details.

3 The rehabilitation of the Direct Irrigation Tubewells (DITs) would be undertaken only on the condition that these would be handed over to beneficiaries for operation and maintenance or otherwise divested from the public sector. DITs that cannot be made viable would be shut down. - 35 -

Annax 2 Page 4 of 4

agriculture,HID may, over time, recoverpart or all of the capital cost of new investments; i) (i) by October 1, 1995, cause the Water Resource Planning & Data Collection Cell to prepare a State Water Plan (SWP), and thereafter implementits recommendations. Thereafter,the SWP will be periodically reviewed & updated, at intervalsno less than five years; and (ii)by June 1, 1994, introducea groundwaterlegislation based on the model Bill of GOI;

J) (i) by January 30, 1994, issue a policy declarationdescribing the government'sintent of turning over system maintenanceto beneficiaries: (ii) by December 31, 1994, define the details of its policy on system turnover and submit it to the Bank for comments; (iii) by June 30, 1995, define the rules & proceduresto be adopted in system turnover and formationof water user associations(WUAs); (iv) by December 31, 1995, initiate training & sensitization programs to promote turnover, & select pilot areas where farmers are interested in participation; and (v) by June 30, 1996, turnover system maintenanceto beneficiaries;GOH will carry out any required rehabilitation of such systems prior to turnover; and k) (i) includein the 94/95 and 95/96 budgets, amounts to eliminatethe arrears to HSEB from HID and HSMITC; (ii) by March 31, 1995, cause HSEB to raise agriculturalpower tariffs to the public sector to Rs 1.42/kWh, and increase the rate at 12% annually thereafter; (iii) if the above tariff does not cover HSEB's cost of delivery to agriculture (public sector), will compensate HSEB for any difference between the new, higher tariff in force and the cost of power delivery;and (iv) cause HID to budget for future increasesin power costs as charged by HSES to HID and HSMITC.

7. The proposed project would assist GOH put in place a comprehensive, sustainablewater resource developmentprogram for the state consistentwith the above reforms. The state's ability to implementsuch a program would be based on three closely interlockingand interdependentelements: an organizationalstructure designed and staffed to address the activitiesto be taken up in the near and longer term, a water resourcesdevelopment plan which provides the general frameworkwithin which future water developmentin all sectors must be analyzed, and a program and budgetingprocess which reflects the schedule and balance of future activitiesamong the various units of HID prioritizedto fit the availablebudget funds. The reforms, together with the investmentprogram under the WRCP, would assist Haryana in achieving increased growth and improved equity in an economicallyviable and environmentally sustainable manner. - 36 - -A.ttacEunent -1 Page 1 of 4 No. ./Special102 Dated 5.2. 194

From J.K. Duggal, FinancialCommissioner & Secretary, Govt. of Haryana. Irrigation& PowerDepartments, Chandigarh TO Mr. Heinz Vergin. DirectorIndia Department. The WorldBankl Washington,D.C. Subject: Water ResourcesConsolidation Project PolicyReform Project

Govt.of Haryanahas been implementingvarious programmes and schemesrelating to WaterResources Development as per the NationalWater Policy. Whilethis ActionPlan had proceededwith varying success,the normalaction of LD. (proposedto be re-namedas Water ResourcesDepartment) regarding operation & maintenanceof vast canaland drainagenet work in the State had been continuouslydeclining. To meetthe challengesahead in this regardsubstantive reformsare contemplatedin the organizationalstructure so as to utiLisethe availableresources for opertional benefits. Afterconsidering various aspects of the irrigationset up in the State. and the National Water Policy,the Govt. of Haryanahas approvedthe proposedsector reforms as detailedin the attachedpolicy matrix, which synchroniseswith the mainaction to be undertakenin order to operatethe abovementioned study.

FinancialCommissioner & Secretary,Govt. of Haryana Irrigation.& PowerDeparanents Chandigarh

I1. Mr. J.R. Malhotra, WorldBank Mission 70 Lodhi Estate,New Delhi 2.- Mr. J.P. Gupta, Engineer-In-Chief Irigation Department,Haryana, Chandigar HARYANAWATER iQUUB C.ONSOUDAONPROECT

PROPOSED§EMBBMREFO

ISUES POLICY STRATEGY ACTIONS 1. Institutional Increaseinstitutional capacity & - implementinstitutional reform to by Apnl 1. 1994,HID shall: Framework Improveorganizational reorganizeHID into a specializedwater i) finalizeits new organizationstructure and staff levels; structureto better manage managementand policy instituffon. ii) finalizeunit responsibilitiesfor the new organizational the State'swater resources structure; iiI) prepareposition descriptions under the new structure; and lv) finalizethe basic implementationschedule for the institutionalreform.

- establishregulatory and advisory by April 1, 1994,HID shall establishstaff offices for functons separatedfrom day-to-day i) GroundwaterRegulation; operationalacftvities under staff ii) WaterServices Policy and Support; offices. iii) EnvironmentalAffairs; lv) CoordinationChief Engineer, and v) Budgetand ProgramTracidng.

- establishoperational functons and by April1, 1994,HID shall establishrine units for responsibilifies i) WaterResources Planning and DataCollection; under line units il) Administration; iii) Designand Research; lv) Construction; v) YamunaWater Service; and vi) ihakra WaterService.

- bring all water resourcerelated by Dec. 31, 1994HID shall take on the actvities of: (i) activitiesunder the auspicesof HID HSMITCrelating to Augmentationand Direct Irrigation Tubewells;and (ii)HSMITCand CADArelating to watercourselining, depending on GOI'scontnuing the grant elementagainst the schemesunder CADA.

0o% v11S Enhanoestaff benefits & - Authodtyfor selection,pla¢ement & i) by December31, 1994,GOH specIaizatIonto will delegatethe authority Improvelong- dscipline of oftfTerswould be for personnelaction to HID. term efficiencyof staff transterredto immediatesuperisors.

- Staff will be exposedto different i) by June 30, 1994,HID will implementa plan to develop positions& fields of specialization& specializedtechnical staff through rotation& choice of alloweda choiceof technicalfeled. field. * Compensation will be providedfor i) by June 30, 1994,HID will implementa plan for staff Inadequatesalary or housingin housing& incentivesbenefits. backwardlocations or fields. Improvemanagement HID's activitfesin its vadiousfunctional i) by December31, procedures 1993,HID will adoptprogrammning & to better plan, areaswill be subjectto program& budgetingof atl its activities. finance& monitorthe budget development & traceng, cost i) by Apnl 1, 1994,HID will a) initiateprogram work task Department'sactivities accounting & principles,& detailed expendituretracmng & management;b) introduce information a cost management. accountingsystem to recordcosts by projectsand introduceservice cost allocationto estimatecharges by users;and c) computerizeIts maintenancescheduGlng & records. iit) by December31, 1994,HID will computerizeits operaifonsscheduling & records8 Its managementaction & records. 2. Water services ImproveO&M of existing& * All O&M expenditureswould be fully i) HIDwill, from April 1, 1994: a) assignthe fun proviceedby the public future facilties budgeted fundingof in the annualbudgets to O&M as the first chargeon HID's budget;and b) budget ector ensureavailability of funds for service annuallyfor full fundingof the workscomponent of O&M Improvement& revenueswould be costs. dedicatedto the Department

Improvingcost recoveryfor - O&McoStS willbe recoveredfrom all i) HIDwil phasein full cost recoveryof O&M expenditures services sectorsfor aNservices, existing& for all servicesas follows: 30%of full O&Mcost by April1, future, except lft commandareas. 1995;50% of full O&M cost by April 1, 1996, 60% of full O&Mby April 1, 1997.80% of full O&Mcost by AMenI, 1998and 100% of O&Mcost by April 1, 1999. - Capitalcosts will be recoveredfor all i) HID will, fromJanuary 1, 1994,recover full capitalcost of (Ki new investments new investmentsfrom all users, exceptagriculture. ii) in caseof agriculture,HID ray, over time, recoverpart o or all of the capital cost of new investments. IMP7 v H 3. WaterResourcea Improvemanagement, planning - Prepareplans for water resourceuse I) by October1, 1995,the Water ResourcePlanning & Data & utilizationof the State's on an on-goingbasis CollectionCell will preparea StateWater Plan, and Water Resources implementIts recommendations.Thereafter, the SWP will be periodicallyreviewed & updated,at intervalsno less than five years. - Implement& enforcegroundwater ii) by June 1, 1994.GOH will Introducea grc.undwater regulation& legislation legislationbased on the ModelBill of GOI.

4. Beneficiary Increasethe Involvementof - Beneficiaryresponsibility for I) by Janua,y30, 1994,GOH will issuea policydeclaration Participation farmers& beneficiariesIn maintenanceof water courseswould describing the govemment'sintent of tuming over system maintenanceactivities to be promoted. maintenanceto beneficlaries. promoteefficiency & ownetship ii) by December31, 1994,GOH will definethe detaRsof through system turnover its policy on suchtumover. Iii) by June 30, 1995,GOH wil definethe rules & proceduresto be adoptedIn tumoverof systern maintenanceand formationof water user assocations (WUAs). lv) by December31 1995,HID will nitiatetraining & senstization programsto promoteturnover, & select pilot areaswhere armnersare InterestedIn participation. v) by June 30, 1996,HID wUlformally tumover system maintenanceto famers and WUAs;GOH will carryout any required rehabilitationof such systemsprior to turnover.

5. Power Improvethe economic& - Erlminateall past afrearsof HID& i) GOH will includeIn the 94J9S& 95/96 budgetsamounts financeviabiiity of power HSMrTC. to hlly eliminatethe arreasto HSEi from HID& HSMITC. supplyservice. - Implementfull cost recoveryof i) by March31, 1995,HSEB will raiseagricultural power powerin publiclyprovided water tariffs to the public sectorto Rs 1.42/kwh,& continuously services increasethe rate at 12%annualy thereafter. ii) If the abovetariff does not cover HSEB'scost of delivery to agriculture(public sector, GOH will compensate HSEBfor any differencebetween the new, higher tariff in force and the cost of powerdelivery; and IN)HID wil budgetfor futureincreases in powercharges by > HSEB. co

OQC - Annex2 Attaghment2 Page 1 of 1 HARYANAWATER RESOURCES CONSOUDAJION PROJECT (WRCP)

IMPROVINGOPERATION & MAINTENANCE

TOTALPROJECT COST

A: BASECOSTS Total (Rsmillon: 94/95 95/96 96/97 97/98 98/99 99/00 T

WORKS 430.30 546.10 546.51 479.33 479.38 477.34 2958.76

ESTABUSHMENT 462.38 462.43 463.37 463.32 463.19 463.27 2777.96

TOTAL(Base Cost) 892.68 1008.52 1009.88 942.65 942.58 940.61 5736.72

B: TOTALCOSrS (in current prices)

WORKS 460.42 622.30 660.14 610.84 641.45 670.65 3665.82

ESTABUSHMENT 494.75 526.96 559.71 590.43 619.79 650.88 3442.52

TOTAL(current cost) 955.17 1149.26 1219.85 1201.28 1261.24 1321.54 7108.34

Note:Local hnflaion from April1. 1994to March31.1995 Is 7%, and Inthe foilowingyewrs 6.9% 6.0%. U% 6.0%. .0%respectIvely Wortksin year 94/95 and 96/96include Investments for heavymaintenance equipment and vehicles - 41 - AQUKAz Page 1 of 8

HARXA WATPER RESOURCES CONX0LIDATIOM PROJEC?

HARYANA IRRIGATTON DEPARTMENT* INSTITUTIONAL MODIFICATTONS

Introducti2n

1. Conditions are changing rapidly in the traditiot.alareas in which the Haryana Irrigation Department (HID) has been engaged in the past. The magnitude of the demands in the various areas and the complex situation in which HID must operate demand a fresh examination of alternatives to its current institutional arrangements and the associated policies and procedures applied to its daily work. Further specialization is needed within the organization to reflect the quite distinct and separate needs of resource planning, design, construction, and O&M. Similarly, administrative and regulatory responsibilities and functions are scattered among a number of units. The situation is further complicated by the overlap of functions between HSMITC and CADA. Management procedures require better definition, and the mechanisms to develop, manage and monitor HID's programs and budget can be improved. During project preparation, an internal review of HID was undertaken, as well as a review of the appropriate role of HID in relation to HSMITC aid CADA. The resulting recommendations have been consolidated by GOH into an agreed action plan for institutional reform involving organizational, policy and procedural changes. This Annex details the institutional modifications proposed by HID. Charts 1, 2 and 3 in Attachment 1 depict the organizational structure for HID. Func-tional statements of activities of the various units is outlined in Attachment 2. Attachment 3 provides a sample program and budget statement to assist HID in defining actual statements during implementation. Terms of Reference for consultants to be contracted for programming and budgeting, and for cost allocation and cost accounting, are in Attachments 4 and 5, respectively.

2. Responsibilities of HID. HID has the primary responsibility for managing the State's water resources and providing the essential services in the sector. The service responsibilities include: ti) providing bulk water supply to urban, village and farm service areas and forestry preserves; (ii) distributing irrigation water in service areas not operated by the farmers: (iii) providing primary services for storm and agricultural drainage; (iv) collecting drainage within the farm service areas; (v) providing flood protection as justified; and (vi) maintaining river channels and enforcing restrictions on the use of the channel lands. Related to these service responsibilities and its broader responsibilities as the lead department in managing the state's water resources, HID prepares and maintains the State Water Plan (SWP) for the guidance of all government and private activities. The Secretary Irrigation and Power regulates groundwater uses and monitors adherence to the regulations as issued.

Functional focua of Activitias

3. HID has initiated the consolidation of its various present and anticipated future activities into a limited number of functional areas. This would allow more orderly planning and budgeting of all its programs, - 42 -

Annfix-a Page 2 of 9 accountability for performance, specialization of staff, efficient use of personnel and equipment and improved planning for future changes in the workload and the means to execute that work. Modern communications and computer applicationsin all areas of work facilitateradical modifications.

4. Adr4,4m,.n. The administrativeactivities which support MID management and the line units would be grouped into a functionalarea. This would allow orderly, well managed assistanceto be rendered to the various units and remove all distractingtasks from the line units inconsistentwith their main responsibilities,while focusing accountabilityfor this support under one manager.

5. natA C1.tgnign. AnalMin anA eminstio. Basic hydrological, meteorologicaland groundwaterdata are essentialto comprehensivewater resourcesmanagement, including all of HID's activities. Meteorologicaldata is collected by the India Meteorological Service; however, information on the quantity and quality of the state's surface and ground waters and the analysis and diaseminationof this data is a primary responsibilityof HID.

6. kJanning. Planning would include the preparationand maintenanceof the SWP. This document would serve as the firm guide to governmentand private sector actions and investmentswithin the state. It would be updated at least every five years to reflect changes in basic data, new commitments and agreed future programs and projects. Planning also includes the preparationof plans for projects and programs to meet the service responsibilities of KID. An additionalassignment of increasingimportance as Haryana reaches the limits of its available water is the preparation and maintenance of state-wide, regional and urban drought plans.

7. Desnan and Raasareh. The future infrastructure needs in the water sector call for significant design work, particularly to expand agricultural drainage and urban services. Rehabilitation/modernization of existing facilities would be a continuingdesign load for the immediatefuture. All such work, includingthe related field investigationsand the preparationof specificationsfall in this functionalarea. Minor design of routine maintenancework would fall under the services function. Research to resolve technical problems in carrying out the service functions of HID fall under the design and research functionalarea.

8. Canst-nrt.on. All new constructionand rehabilitation/modernizationof existing facilitiesentailing significantquantities of earthwork or lining, reconstructionof the channel sections,or strengtheningor alterationof structures falls under the constructionfunctional area. This would include the final assembly of bid and contract documents,pre-qualification of bidders, administration of contracts, processing of claims and inspection/acceptanceof completedwork. Thus, all work required to complete a fully satisfactoryfacility for hand over to the service units would fall within the constructionarea and be funded as capital expenditures. Routine repair and maintenancewould fall under the service functions.

9. WAtnr Rervi6ee. All water related services provided by HID are grouped under one functionalarea. As mentionedearlier, providingthese services is the most important responsibility of HID. Since all these services entail -43 - Annam I Page 3 of 8

common technicalskills and overlap geographically,the operationsand maintenance lO&N)of fac'lities,regardless of the type of service -- supply, collection,flood protection,etc. -- would be managed in common by one unit. This would greatly increase the effectivenessand efficiencyof the respective service entities.

10. RrgulatoQ. In addition to the above activities,the regulationof groundwateruse is an importantactivity in the sector. In six districts in the State fresh groundwaterbasins are being overdrafted. Presently there are 460,000private wells in the State; a 50% increase in the last ten years. In addition to these private wells the governmentoperates 1545 irrigationwells and 1643 augmentationwells. Continuedgroundwater overdraft can lead to intrusionof saline water into fresh groundwateraquifers and the loss of good agriculturallands. This has occurred in an area of Pakistan. If these lands go out of production, it would be difficultto reclaim them, because large amounts of water are needed to flush salts from these lands; water which the State does not have. Furthermore,this would literallydrain the primary water supply to meet extended drought emergencies. The definitionof proceduresto control over-exploitationof groundwater,introduction of associated rules and regulations and enforcingof groundwateruse regulations is the only importantregulatory function within the Ministry. Surface water quality monitoring and regulation of its use for different purposes are becoming an increasingly important need in the state. These are essential functions in effective water resources management.

11. HID is being restructuredto reflectthe functionalgrouping of its activitiesand take advantageof the inherentefficiencies and increased capabilitiesthereby offered. Consistentwith the recommendationsof the institutional review, a State Water Resources Committee (SWRC) has been created, chaired by the Chief Secretary and including secretaries from all concerned Departments (Irrigation and Power, Agriculture, Industries, Urban Development, Forestry, Fisheries, Planning, etc). The Committee was constituted to give policy guidance on water resource issues and ensure that conflicting inter-sectoral demands are dealt with in a rational fashion, noting future needs and projections as well as current demands, taking into considerationthe results and recommendationsof the State Water Plan. A Water RegulationsUnit has also been establishedunder the Secretaryof Irrigationand Power for defining and advising on regulationand legislation pertainingto groundwater,and enforcementof the same. In accordancewith the principle of separating the HID operating units from the regulatory, under the reorganized structure, HID functions would be carried out by "Staff" offices and various "Line" units. The staff offices would have regulatoryand advisory functions,while the line offices would be responsiblefor operationalactivities in the previouslydefined functionalareas. Details of the responsibilitiesof the staff offices and line units are in Attachment2.

12. Rtaff Offices. The followingspecialist Staff Offices under the HID Engineer-in-Chief(EIC) would be established,with regulatoryand advisory functions: li) Programmingand BudgetingCommittee lPBC); Cii) Chief Engineer Coordination (CEC); (iii)Environmental Affairs (EA); (iv) Water Services Policy and Support tWSPS);and (v) Quality Assurance (QA). - 44 -

Page 4 of 8

13. Chief Engineer Coordination (CICI: Four cells would be in place to perform the functions of the staff office under the CEC: (i) Legislative Liason; (ii) Public information; (iii) Legal and Vigilance: and (iv) Budget and Program Tracking. The overall functions of the Office of the CEC are: to assist the EIC in management of the Department; to provide legislative liaison between HID and GOH; to adminiser HID's public relations program; to provide legal and vigilance services; to manage HID's budget, program and program tracking activities; and to act as Secretary of HID's PBC.

14. Rnvironmental Affairs Office IEA): The Environmental Affairs Office, reporting to the EIC, would be responsible for: providing environmental assessments for Departmental activities to satisfy state law and lender organization requirements; preparing environmental clearance documents, and processing these with clearance authorities and lending institutions; developing environmental juidelines to be used by HID; assisting the Construction Unit (CU) and Water Services Units (WSUs) in meeting environmental regulations; reviewing water resource planning studies, designs and O&H programs to ensure proper consideration of environmental regulations; assist-l.ngWSUs to maintain the quality of water delivery; providing environmental staadards and information to line units; conducting environmental public relations for HID; maintaining a library of environmental information for staff use; and providing reports to management concerning activities of the EA.

15. Water Servictes Policy/ Support office (WSPSR: The responsibilities of the Water Services Policy/ Support Office are: to assist the development of water service policies of WSUs; to assist the formulation of the cost recovery program (mechanisms and amounts); to define policies and procedures for guiding the program for turnover of system maintenance to beneficiaries (the EIC, CEC and WSUs would be responsible for implementing the program, monitoring its progress, and designing means for its effective replication); to assist in the development and updating of generic O&M guidelines for the WSUs; to assist development of computer applications for O&N; and coordinate the WSUs' activities with headquarters offices.

16. Oualit, Assurance (OA). A Quality Assurance Office (QA), reporting to the Engineer-in-Chief, would be be established in HID. It would serve as the focus of a Quality Assurance Program which would be instituted to oversee quality assurance of HID's activities. This would be accomplished through an ongoing examination of completed projects and activities in progress, the identification of deficiencies, the formulation of remedial measures, and importantly, the diligent application of those remedial measures. All managers and staff would participate by making suggestions and helping implement improvements. The purpose of the QA is to identify primary procedural and support deficiencies and devise solutions in terms of formal policies, procedures, statement of practices, standards and specific staff training. The QA staff would consist of three highly experienced engineers who, in combination, have in-depth knowledge of planning, field investigations, design, construction, operations and maintenance.

17. Line Units with operational and implementation responsibilities would be established for Administration, Data Collection and Water Resource Planning, Design and Research, Construction, and regional Water Services. - 45 - Annax Page 5 of 8

18. ad* ntAtration unit IAU . The AU would support all HID units, removing the many activities from their responsibilities that are otherwise inconsistent with the primary tasks of the units. Personnel, training, finance, revenues, accounting, procurement of materials and equipment, general computer services, and the motor pool would be the primary areas of assistance. Also, AU would manage all real property not intimately a part of the service facilities and would be responsible for the acquisition of all right-of-way requested by the Construction Unit for new facilities.

19. Data Collection and Water Rsgurces Planning Unit tDPU). Data collection, analysis and dissemination, and water resources planning would be grouped under the DPU. This would include quality and quantity information regarding the state's surface and groundwater. Information would be promptly published and made available to all government and public entities and individuals. The DPU would: (i) prepare and update the SWP; (ii) design and evaluate project investments and plans; and (iii) prepare contingency plans for drought relief. The interlinkages of the unit's functions would permit efficient use of limited specialty staff and better assurance that all plans are kept current and reflect the latest information.

20. Design and Research Unit IDRU). All design of new facilities and major rehabilitation/modernization of existing facilities would be assigned to DRU. Increased technical quality of the work would be achieved through establishing specialty civil engineering, mechanical and electrical engineering, specifications, geological and field investigations sub-units within one unit. Any research into new design or construction methods would be conducted by this division. Project research activities in drainage collectors and sprinkler and drip irrigation would be implemented by the DRU.

21. Construction Unit (CU). The construction of all new facilities and major rehabilitation/modernization of existing facilities would be the responsibility of CU. A headquarters sub-unit would process contract documents, determine the qualifications of bidders and assure statewide consistency in contract administration and claims processing. Additionally, the central materials testing would be assigned to this office. Field circles headed by a project engineer would be established where warranted by the locale's construction load. When the construction load reduces, the field circle would be relocated or disbanded. Each field circle would have an office engineering sub-unit to provide plan reviews, project claims processing, surveying, and quantities/payment processing. The field engineering sub-unit would be responsible for overseeing the contractor's construction progress, inspecting work and providing the needed daily controls. A project testing laboratory would support the field engineering sub-unit. The CU, in consultation with DRU and the involved WSUs, would be responsible for identifying the land needs and conducting the necessary surveys.

22. water Services Units IWSUsL Under its new organizational structure, the HID statewide water sector services would be provided by two regional units -- the Yamuna Water Services Unit and the Bhakra Water Services Unit. Both would be similarly structured differing only in the degree of specialization in items such as pumping and the number of circles and sub-units. The two units would be assisted by the earlier noted WSPS staff office that reports to the EIC. The O0M activities of the WSUs would be linked to the - 46 -

Page 6 of 8

cost recoveryprogram under the guidance of the WSPS, and also to the beneficiaryparticipation and system turnover program of GOH. Each services unit office would have unit support,heavy maintenanceand administrative sub-unitsand several service circles. Each circle would have support with field O0M sub-units,all stationedstrategically to efficientlycarry out the unit's O&M activities. Small field crews would be stationedwhere ongoing routine tasks would call for year-roundactivities. Again, the introduction of improved communications,computers and expanded means of transportwould reduce the currentnumber of offices and staff assigned to 06M tasks. The 0M activitiesof HSMITC relatedto the lining of water courses and Direct IrrigationTubewells would be integratedinto HID's functions.

23. cr4Undwat-r Ragulation. A Water RegulationUnit would be attached to the Secretaryof Irrigationand Power to manage, monitor and enforce a regulationprogram. Measures would be recomsendedunder the project to help protect the State's groundwaterresource, including the following:

(i) Developmentand implementationof an educationprogram to inform farmers of the danger of groundwateroverdraft leading to the loss of farm lands: (ii) aevelopmentof facilitiesto rechargethe groundwaterbasins with surplus water during flood season; and (iii)Development of regulationprogram. Regulationmeasures can consist of restrictingthe drilling of new wells, restrictingpumping during some years or in some months of every year, increasingpower rates for pumping, or development/implementation of a licensingprogram.

24. Under the project, GOH is introducinglegislation to control groundwater developmentand exploitation. Current controls are limited to a restrictionon institutionalcredit in areas where the water table is falling, which does not prevent developmentby those able to afford to invest from their own resources,or over-pumpingby existing wells. The proposed legislation would be be a modificationof the India Model Law making enforcement more rigorous and increasingpenalties for violations. Proceduresfor regulationwould be defined upon finalizationof the legislation. Policy and PrggdUral Changs for Reganizatfon

25. To assist in the transformationand reorganizationof HID, the followingpolicy changes have been initiated,and would be further implemented under the project in the areas of personnel and managementprocedures.

26. Staff Beadjuatmnt and Levels. Types and numbers of positions for the new functionalorganization to be implementedby HID are being established accordingto the functionsand workload for each organizationalunit. This staffing pattern would be filled mith employeesfrom HID's existing staff. A few positions require staff with upecialitiesnot now present in HID. These staff would be recruitedor seconded from sources outside of HID. A plan would then be developedto deal with the remainingsurplus staff. Any projected s1,ort duration peak workloads or specialized expertise, not available in HID, would be secured by contract. - 47-

Page 7 of 8

27. Staff Speciali2ation/Rotation.A plan to develop specializedtechnioal staff would be implemented. The plan would consist of rotatingnewly employed engineers through positions in the fie'ds of project planning,design, construction,and operationsand maintenanceduring the part of his career when he is advancing from Junior Engineer to Executive Engineer. At that time he would be given a choice of a technical field in which he wishes to specialize, and he would remain in that field for the remain.derof his career.

28. Position Desgriptions/SeotiOn Oualifinations. For all positions, the current description of the qualifications for filling that position would be further developed. The description would include the technical skills required and the required number of years of experience in the technical discipline for the job (for example, 10 years total experience in design, 5 of which must be in the last 5 years of the employees work experience). The position descriptions would outline the specific tasks of the position.

29. Camnensation. To encourage employees to take certain technical positions or to take positions in difficult geographic locations, incentivo,s would be provided. Furthermore, where government housing is unavailable, the employee would receive a housing allowance adequate to obtain housing equal to normal government housing where it is available.

30. Time in Position - Chief Engineers. To obtain some form of longevity in top imanagement positions, it would be mandated that employees promoted to the position of Chief Engineer must remain in that position for at least one year. For those employees with seniority for promotion to Chief Engineer who, if promoted, would be in the Chief Engineer position for less than one year, because of the mandatory retirement age, would be promoted to the Chief Engineer level, but wouid continue in their existing Supervisory Engineer position until retirement.

31. Delegation of Authority. The Bank has recommended to the state government that the authority for personnel action in respect of staff be delegated to the HID.

32. Tral±n±ng. The training program would be revised as follows:

(i) Revise existing orientation training course by reducing the number of topics from 22 to only the number of topics relating to HID's mission. (ii) Establish training courses for the main disciplines in HID (Planning, Design, Construction, and Operation and Maintenance). These courses would be designed by line managers in these disciplines. (iii) Establish.a computer training program consisting of an orientation course for managers, an orientation and operations course for technical employees, and an orientation and operations course for administrative -ersonnel. (iv) Develop a management/supervisory course for Class I Officers including the topics of supervisory skills, work scheduling and tracking, communication skills, personnel management tasks, etc.

3anagEent Proceditret

33. Program and Budget Delp't.Initially the projects and activities - 48 -

Annex 3 Page 8 of 8 in the HID program would be scheduled annually and over five and fifteen year plan periods. The costs and timeframes for these activities would be scheduled under the following functional items (Data Collection/Processing and Water Planning, Design, Construction, and Operation and Maintenance). The five and fifteen year plans would be adjusted annually according to the progress of the previous year. Presently funds are received from the State Finance Minister monthly via a Letter of Credit based on the previous month's progress. Under the project, funds would be released quarterly so that HID's program can be managed more effectively and efficiently.

34. Program Tracking. The following procedures would be considered for program work task and expenditure tracking and management:

(i) Allocate funds on a quarterly basis to HID managers so they can plan their work activities. (ii) Retain flexibility in budget allocations to allow transfer of funds from one work program to another as required (iii) Develop a simple format for obtaining work progress information. This format would be completed monthly, or more often if required, by line function managers involved in data collection and water resources planning, and O&M, and submitted to the CEC. This format would be completed weekly by line function managers involved in design and construction activities, and submitted to the CEC. Program management staff would also keep in touch with line managers by telephone between monthly and weekly report submittals to keep abreast of key program elements and any significant new information. (iv) Program management staff would evaluate the work progress information and identify any problems in program accomplishment. Reporting line managers, jointly with program management staff, would also develop recommended fund and personnel transfers as required from projects which are behind schedule to projects which are ahead of schedule. (v) Monthly, or more often if serious program deviations occur, the EIC would meet with his Chief Engineers to review program progress, identified problems and recommended solutions developed by the line managers and program management staff. Program changes would be made as necessary.

35. Cost Accounting. A cost accounting system would be developed in which all organizational units would record the costs of their activities by project. For example, the Planning Unit would record the costs of their activities (hydrology study, economic analysis, etc.) for a new drainage project, rehabilitation program, etc.; the Design Unit would record costs for each project for its activities; the Construction Unit would record costs for each complete system component; and each O&M office on the Bhakra and Yamuna canal and drainage systems would record the costs of their activities (desilting, road maintenance, weed control, etc.). HtRYIAWAIERPESURCS CONSOUDATIONKlT

ND STAFF ANDIFUNCTSALLINIT Note:State Water Resouwces Comnuittee. CARTI Chairedby ChiefSectaty. to coordinateand guideinter-sectoral water resource issus, seepara 1.

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At t-agghment -2 Page 1 of 13

HARYANA WATER RESOUJRCES CONSOLIflATION PROJECT

FuNcTIouaL sTATEmENTs OF NEx oReaAN12aTimNL sTtRUCTURgE OF HARYA IRBGATION DEPRTNT

Tnt- reduet Inn

1. The reorganization of the Haryana Irrigation Department (HID) would streamline the activities now undertaken by different units of HID to reduce overlapping or multiplication. Under the Engineer-in-Chief (EIC), staff offices would be established, responsible for regulatory functions and also having an advisory role in the functional areas. In addition, a Water Regulation Unit would be established. The staff offices would be for: (a) Chief Engineer Coordination; (b) Environmental Affairs; (c) Water Services Policy Support; and (d) Quality Assurance. The line units described in the organizational structure would be responsible for operational activities in the following functional areas: (a) Administration; (b) Data Collection and Water Resources Planning; (c) Construction; (d) Design and Research; and (e) Water Services.

A. Water Reuglation Unit (WRU1

2. The WRU would be supported by a Regulations Unit and a Monitoring and Enforcement Unit. The responsibilities of the WRU and the units are: a. administration of the ground and surface rights and regulations program; b. monitoring development and use of the State's water resources to ensure compliance with State laws and regulations; and c. enforcement of State water resource laws and regulations.

3. E1) Regulationa Unit. The responsibilities of the Regulations Unit are: a. administration of the application, processing and permitting activities for the legal use of the States water resources; b. development of programs and policies which can be adopted by the government for the regulation of the States water resources; c. provision of information to the public and existing and prospective water users about water law and regulations, and actions of the WRU; d. settlement of complaints concerning the state's water resources; e. liaison with ministers, legislators, and other government agencies in the field of regulation of water resources; f. maintenance and updating of files of all rights and use permits for the States water resources; and g. preparation of reports of water regulatory activities as requested by the Secretary. - 53 -

Annexa Attaohmeont 2 Page 2 of 13

4. {ii) Monitoring and Enforcement Unit. The responsibilities of the Monitoring and Enforcement Unit are: a. monitoring of water use in the State to ensure that water use laws and regulations are being followed; b. periodic field inspections to monitor water use activities; c. enforcement of water law and regulations by taking necessary action against violators as provided by the law; d. development of programs and policies which can be adopted by for the monitoring and enforcement of State water law and regulations; e. coordination with the Regulations Unit on new water use permits granted; f. preparation of reports, as required by the Secretary, concerning the Unit's activities.

B. Staff Office Responsibilities

(a) Chief Engineer Coordination (CEC):

5. Four cells would be in place to perform the functions of the staff office under the Chief Engineer Coordination: (i) Legislative Liason; (ii) Public Information; (iii) Legal and Vigilance; and (iv) Budget and Program Tracking. The responsibilities of these cells are described in the sections following the overall responsibilities of the staff office, which are: a. assistance to the ETC in management of the Department; b. provision of legislative liaison between HID and GOH; c. administration of the Department's public relations program; d. provision of legal and vigilance services; e. management of the HID's budget, program and program tracking activities; f. acting as Secretary of HID's Programming and Budgeting Committee.

6. (i) Legislative Liaiaon Cell. The responsibilities of this cell are: a. draft new legislation for providing water resource services; b. assist in the drafting of water resource legislation when the Department is requested to do so; c. review of all proposed legislation to ascertain which proposed legislation may pertain to HID's activities; d. provision of the Departments comments on pending legislation; e. provision of information about new legislation affecting HID to Departmental managers: and f. provision of informaticn and comments to legislators concerning water resources legislation.

7. {ii) Publi Information Cell. The responsibilities of this cell are: a. administration of all Departmental public relations activities; b. preparation of speeches for Departmental management; c. preparation of news releases, newspaper articles, TV pieces, and other - 54 -

Annex3 Attachmant2 Page 3 of 13

news media items for Departmentalaffairs; d. publicationof the Department'smagazine; e. arranging for public meetings as requiredby Departmentalmanagement; f. assist with the developmentand implementationof the program to turnover O&M of certain Departmental facilities to water users; and g. preparationof responsesto questions from the public.

8. (ilt) Legal and Vigilanie Cell. The responsibilities of this cell are:

a. provision of legal research and advice to Departmental management; b. representation of the Department in all legal issues and court cases in which the Department may be involved; C. assistance to the Legislative Liaison Cell in legislative matters; d. performance of investigations and audits of Departmental staff or offices in the case of complaints from the public or other entities; and e. scheduling and performance of periodic audits of HID's activities to ensure that its program is being accomplished effectively and efficiently.

9. livl Budgt/krogram Tracking Ca". The responsibilities of the Budget/Program Tracking Cell are:

a. management of HID's programming, budgeting and program tracking; b. development and implementation of processes for the above; C. provision of report format to managers for reporting of program status; d. development, maintenance, and coordination of the Department's program and budget from data furnished by Departmental managers; e. allocation of fiscal year funds to organizational units and offices; f. coordination of the preparation of cost estimates of execution of Departmental programs for budget purposes; g. presentation and justitication of the budget to the Secretary and the legislature; h. tracking of the progress of the departments program through receiving reports from Departmental managers, and continuous communication with Departmental managers concerning program progress and problems; i. analysis of program progress information, and the development of recommendations to management concerning program adjustments; j. organization and arrangement of meetings of the Programming and Budgeting Committee; and k. preparation of reports concerning program, budget, and program tracking.

(bl Environmental affaiXs (EA):

10. The Environmental Affairs Office, reporting to the EIC, would be responsible for: a. provision of environmental assessments for Departmental activities to satisfy State law and lender organization requirements; b. preparation of environmental clearance documents, and the processing of - 55 -

AttachmQnt 2 Page 4 of 13

these documents with clearance authorities and lending institutions; c. development of environmental guidelines to be used by the Department in conducting its activities; d. assisting the Construction (CU) and Water Service Units (WSU) in meeting environmental regulations in their functional activities; e. reviewing water resource planning studies, designs and operation and maintenance programs to insure that consideration of environmental regulations and issues have been taken; f. assisting the WSUs to maintain the quality of water delivered to users; g. providing environmental standards and information to the line units to assist them in carrying out their programs; h. conducting environmental public relations for the Department; i. maintaining a library of environmental information; and J. provision of reports to management concerning activities of EA Office. le) Water Services PolicyJ SuMnprt Office (WSPS):

11. The responsibilities of the Water Services Policy/ Support Office are: a. assist in the development of water service policies for the WSUs; b. assist In the formulation of the cost recovery program (mechanisms and amounts); c. define policies and procedures for guiding the program for turnover of system maintenance to beneficiaries, implementing the program, monitoring its progress, and designing means for its effective replication; d. assist in the development and updating of generic operations and maintenance guidelines for the WSUs; e. assist in development of computer applications for water service operations and maintenance; and f. coordinate the WSUs' activities with headquarters offices.

(d) Ouality Assurance Offinc (OAM:

12. The QA staff would consist of 3 highly experienced engineers who, in combination, have in-depth knowledge of planning, field investigations, design, construction, operations and maintenance. The primary responsibilities of the Office are: a. assemble a complete set of statements of policy, practice, procedures and standards now in force; b. examine proposed and existing systems to identify deficiencies in each phase: planning, design, construction, rehabilitation and O&M; c. visit staff at every level (including entry), determine available guidance, learn views on short-comings and seek suggestions for improvements; d. analyze flow of project/management documents and approval process, formulate procedures to assure timely and complete action by all units; e. where deficiencies are found, draft new statements of policy, practice, - 56 -

Ann~ex3 ,attac-hment_2 Page 5 of 13

procedures and standards and distribute for review and comnent by staff at all levels; discuss draft materials and staff comments with senior management and finalize; f. prepare and distribute a suggested set of materials required for staff in each position within the various units; g. prepare detailed training program for staff including entry orientation, procedures, technical specialties, new technologies, management, contract administration, construction inspection, maintenance and operations and performance evaluation methods; and h. formulate a formal audit system for unit managers to evaluate the effectiveness of policies, procedures, staff motivation and training under their supervision, and to submit an annual report of findings and recommendations to department management.

C Line Unit Responsibilities

(a) Administration Unit (AU):

13. The activities of the Administration Unit, headed by a Chief Manager, would be performed by the followir.gcells: (i) Personnel and Training Cell; (ii) Procurement and Supplies Cell; (iii) Real Property Procurement and Management Cell; (iv) Finance and Accounting Cell; (v) Motor Pool Cell; and (vi) Computer Services Cell. The responsibilities of each cell within the AU are in the following sections. The overall responsibilities of the AU itself would cover: a. administration of all personnel activities and records; b. procurement, storage and dissemination of equipment and supplies; c. procurement and management of real property; d. provision and management of computer services; e. operation and management of the motor pool; f. development and operation of Departmental training programs; management of the Department's finances (cost accounting, financial accounting - disbursements and receipts, audits); h. provision of assistance to all HID units in the above activities; and i. preparation of reports as required .iy management concerning administration activities. - 57 -

raerehm.nt 2 Page 6 of 13

(11 Personnel and Training Cell. The responsibilities of the cell are:

a. development and operation of all personnel training programs; b. maintenance of personnel records for the Department; c. administration of the retirement information, counseling, processing and record keeping program; d. provision of standard formats for position descriptions, assistance to Departmental managers in the preparation of position descriptions, and maintenance of files of position descriptions; e. provision of standard formats and processes for employee performance evaluations, assistance to Departmental managers in making performance evaluations, and maintenance of performance files; f. administration of staff classification, selection and promotion program; g. administration of salary/wages, benefits and incentives programs; h. advice and assistance to Departmental managers in the discipline and dismissal of employees; i. administration of Departmental staff levels and reduction programs; and j. assistance to Departmental managers in negotiating with employee unions.

(ii Procurement and Supplies Cell. The responsibilities of the Cell are:

a. purchasing of supplies and equipment for the Department according to State procurement regulations; b. disposal of the Department's surplus equipment and supplies according to State regulations; C. dispensing of equipment and supplies to all Departmental Units; d. maintenance of equipment and supply inventories and records: e. management of storage of equipment and supplies; f. development of procedures and guidelines to be followed by field office personnel responsible for administration of equipment and supplies; and g. auditing of field office administration of equipment and supplies.

(i4{4 Real Property Procurement and Managent Call. The responsibilities of the Real Property Procurement and Management Cell are:

a. purchase and disposal of all real property for the Department; b. coordination with CU and WSUs in determining real property requirements: c. management of the operation and maintenance program for employee housing and Departmental buildings; and d. maintenance of real property files.

Iiv) Finanne and Accounting Cell. The responsibilities of this cell are:

a. administration of the cost accounting system; b. administration and accounting of all HID disbursements and receipts; c. performance of audits of the financial activities of other HID offices; d. provision of financial information, as required, to the Program Budget Unit for program budget activities; and e. development of financial reports for management. - 58 -

Ann Attanhmnt 2 Page 7 of 13

Iv) Mote PooQl Call. The responsibilities of the Motor Pool Cell are:

a. provision of vehicle service to Departmental headquarters; b. maintenance of the headquarter's vehicles; c. development and dissemination of standards for motor pool operation to field offices; d. auditing field office motor pool operations; and e. keeping vehicle service and maintenance records.

(vXi Co=p ter ServTCe_ Cell. The responsibilities of this cell are:

a. administration of computer services for the Department; b. operation and maintenance of central computer equipment; c. provision of maintenance for all Departmental computer hardware; d. assistance to all Departmental rvits in determining hardware and software requirements; e. maintenance of records for Departmental hardware, software, and communications equipment; f. administration of the Departments Statewide communications system; g. provision of maintenance for the communication system; h. assistance to HID units for changes or additions to the communications system; i. receiving and review of requests from other HID Units for changes in, or additions to HID's computer and communications system; and j. proviaion of reports, as required, to management concerning the computer and communications system.

(bl Data Collection Unit and Water Resources Planning tDPUf:

14. The activities under the Water Resources Planning and Data Collection Unit, headed by a Chief Engineer, would be distributed among the following cells: (i) State Water Plan; (ii) Project Planning; (iii) Drought Planning; (iv) Surface Water; (v) Groundwater; (vi) Special Studies; and (vii) Documents Cell. The responsibilities of each cell within the DPU are in the following sections. The overall responsibilities of the DPU are:

a. collection, analysis, and dissemination of basic hydrologic, groundwater, and meteorological data essential to comprehensive water resources management; b. provision of analytical services under specific service agreements for the specialized analysis of hydrologic information for use by government and private entities; c. storage/maintenance of hydrologic, groundwater, and meteorologic data; d. development and maintenance of a State Water Plan. e. preparation of reconnaissance and feasibility studies of specific projects and programs; f. preparation of a statewide drought management plan; and g. preparation of program progress reports, and submittal according to schedule of the reports to the Budget Program Cell under the CEC. - 59 -

Atachment 2 Page 8 of 13

lB State Water Plan Cell. The State Water Plan Cell is responsiblefor:

a. developmentof a State Water Plan (SWP) through data and information analysis,making of estimationsand projectionsfor present and future State water resourceconditions, identification of water resource problems and issues, testing of various water resource scenarios,and the use of various water resource computer models; b. interactionand coordinationwith the State water Commission; c. interactionand coordinationwith other public and private entities to obtain their input and information,and their review of the Units's State Water Planning activities; d. provision of water resourcemanagement, policy and program recommendationsto the State Water Planning Commission; e. preparationand publicationof a SWP report and annexes; and f. periodic review and update of the SWP (at least every five years).

1ii Progect Planning Cell. The Project Planning Cell is responsible for:

a. preparationof reconnaissanceand feasibilitystudies of projects and programs to serve the water service responsibilitiesof the Department; b. preparationof hydrologic studies,land use and classificationstudies, economic and financialanalysis, and plan formulationstudies for projects and programs; c. coordinationwith the State Water Plan Cell to insure that projects and programs are not in conflict with the SWP; d. obtaining preliminarystructure designs from the Design and Research Unit (DRU); e. obtaining review of project plans from appropriateDepartment Units (Environmental Office etc.), and other government agencies;and f. publication of a main report and annexes for each project and program studied.

(1til Drought Plannin2 Cell. The responsibilities of this cell are:

a. preparation of a contingency plan drought for the State of Haryana; b. coordination and interaction with the State Planning Commission for the development and implementation of the drought plan; c. preparation of a program to inform the public of the drought plan, and for the implementation of the drought plan; d. coordination with the State Water Plan Cell and the Water Service Units in the development and implementation of the drought plan; and e. publication of the State Drought Plan.

(iv) Surface Water Cell. The Surface Water Cell is responsible for: a. collection of basic hydrologic data at key locations in rivers, canals, and drains; b. collection of basic hydrologic data from the WSUs at those locations - 60 -

Attaphnb=n 2 Page 9 of 13

measured by the WSUs; c. installation and maintenance of hydrologic and meteorologic data collection stations at locations necessary to obtain data necessary for the SWP, planning studies and other agency requirements; d. annual review of the data collection system to determine which data collection stations need maintenance or upgrading, which stations should be discontinued, and what new stations should be added; and e. provision of data to the Special Studies Cell as required, and to the Documents Cell for data storage and dissemination.

(x} Groundwater Cell. The Groundwater Cell is responsible for: a. collection of basic groundwater data from public, private and test wells throughout the State; b. collection of groundwater data from the Water service Units for the irrigation tubewells operated by the Water Service Units; C. annual review of the data collection program to ascertain that the proper number of wells at the proper locations are being measured to provide an aecurate record of the State's groundwater basins; d. analysis and portrayal of groundwater data to provide each basins groundwater condition (quality, level, overdraft); and e. provision of data to the Special Studies Cell as necessary, and to the Documents Cell for data storage and dissemination.

(vil SRecial Studie9 Cell. The Special Studies Cell is responsible for: a. conduction of analytical studies of hydrologic data under special service agreements for use by other government and private organizations; and b. assistance to the State Water Plan and Project Planning Cells, the DRU, and the WSUs as required, in making hydrologic studies and analysis. fviil QnrumentsCell. The Documents Cell is responsible for: a. storage and recording of basic hydrologic, meteorologic, and groundwater data received from the Surface and Groundwater Cells; b. dissemination of basic hydrologic, groundwater, and meteorologic data to the public through the publication of an annual report; and c. annual review of data files to determine needed changes to the filing system, and what data should be kept and what data can be destroyed.

15. The Construction Unit would be headed by a Chief Engineer, and its activities would be performed by one Headquarters Circle and three Project Circles. The responsibilities of each circle are in the sections following the overall responsibilities of the CU. The responsibilities of the CU are: a. determine rights of way requireAents for projects to be constructed; - 61 -

Page 10 of 13 b. conduct land surveys for projects to be or under construction; c. maintain a registerof constructioncortractors; d. process contractorclaims; e. provide support to the field constructioncircles; f. testing of materials for construction; g. inspectionof contractorswork; h. determinationof design changes for constructionfield conditions: i. preparationof as-built drawings when constructionis complete: j. calculationof materials and constructionquantities for contractor payment; and k. processingof constructioncontracts.

(J HeadquartersCircle. The responsibilitiesof the HeadquartersCircle are: a. determine rights-of-wayrequirements, and provisionof requests for property acquisitionto the AU; b. processingof contracts (advertisementof constructionrequirements, receivingof bid documents,verification of contractorscapability, review of bids, and contract award); C. registrationof contractors; d. processingand settlementof contractorsclaims; e. provisionof assistanceto field constructioncircles for extraordinary laboratorywork, contractorrelationships, construction inspection, design changes to fit field conditions,and office engineeringwork; f. review of constructionfield staff work quality,'program accomplishment; g. preparationof as-built drawings for completedstructures, and submittal of these to the DRU; h. develop and maintain policies and procedures on matters relating to all phases of constructioncost esimating; i. preparationof analysis of bid abstract prices for use in future constructioncost estimating;and j. preparationof program progress reports and submittalof the reports on schedule to the Budget Program Cell under the CEC.

(ii) Proi nt Circle (31. The responsibilities of the Project Construction Circles are: a. testing of constructionmaterials; b. inspectionof contractorsconstruction activities and work quality, and preparationof constructioninspection reports; c. recommendationof design changes to accommodatefield conditions; d. preparationof data for making as-built drawings for completed structures; e. calculationof materialsand constructionquantities for payments to contractors;and f. preparationof work progress reports, and submittalof the reports to the Headquarters Circle for incorporation in the program progress report for the Budget Program Officer. - 62 -

Atae-Iahmnt_2 Page 11 of 13

dl Deasign indResearch Unit (DRU):

16. The activities under the Design and Research Unit, headed by a Chief Engineer, would be distributed among the following cells: {i) Civil Engineering; (ii) Mechanical and Electrical Engineering; (iii) Specifications; (iv) Geology and Field Exploration; and (v) Research. The overall responsibilities of the DRU are: a. preparation of preliminary level designs for feasibility studies being conducted by the Project Planning Cell; b. preparation of designs for modernization and rehabilitation of existing structures and for new structures; C. maintenance of files of completed designs and as-built drawings from completed construction projects; d. collection of design data from the field; e. conduct geologic investigations in field to obtain data for designs; f. periodic review of new design methodology and design standard releases, and updating of the Department's design methodologies and standards; g. conduction of research of new design and construction methods; and h. preparation of work progress reports, and submittal of the reports according to schedule to the Budget Program Cell under the CEC.

fit Civil RnWineering Cell. The responsibilities of this cell are: a. preparation of designs and design drawings for modernization and rehabilitation of existing structures and for new structures; b. preparation of preliminary level designs and design drawings for projects being studied by the Project Planning Cell; c. maintenance of files of all designs and as-built drawings of completed structures; d. collection of field data as required for structure designs; e. requesting geologic and field data collection by the Geology and Field Exploration Cell; and f. periodic review of new civil engineering design methodology and design standards, and updating of the Department's civil design methodologies and standards.

(iiI Mechanical and gleactrieal Engineering Cell. The responsibilities of the Mechanical and Electrical Engineering Cell are: a. preparation of designs and design drawings for mechanical and electrical features for modernization and rehabilitation of existing features and for new features; b. preparation of preliminary level deigns and design drawings foe the projects being studies by the Project Planning Cell; c. collection of field data as required feature designs; and d. periodic review of new mechanical and electrical engineering methodology and design standards, and updating of the Department's mechanical and electrical design methodologies and standards. - 63 -

Annezl3

Page 12 of 13

1111 S1 cifinatigns Cell. The responsibilities of this cell are: a. preparationof constructionspecifications for the modernizationand rehabilitation of existing facilities and for new facilities; b. coordinationwith the design cells and the CU in the preparationof specifications; c. maintenanceof files of constructionspecifications; and d. review and updating of standard proceduresfor preparing specifications.

(iv) Geology and Field E&plorationCell. The responsibilities of the Geology and Field Exploration Cell are: a. conduction of geologic explorations in the field for the modernization and rehabilitation of structures and for new structures; b. collection of design data in the field for the modernization and rehabilitation of structures and for new structures; c. coordination with the design cells in collection of design data and making of geologic, and source of construction materials investigations; d. preparation of reports of fields design data collection and geologic investigations, including maps, and submittal of the reports to the design cells; and e. maintenance of equipment needed for geologic investigations and design data collection.

(v) Researeh C.ll. The responsibilities of the Research Cell are : a. conduction of research of new design and construction methods for the water service activities of HID; b. arranging for and monitoring of the conducting of physical model tests, as needed by designers, at established laboratories; c. coordination with the design cells, WSUs, and the CU to ascertain what research is needed to assist in improving design/ construction methods; d. keeping abreast of the latest technology in the water resources field, and transferring this information to the other line units of HID; e. maintenance of a library of technical publications for use of all the technical staff of HID; and f. publication of the results of the Cell's research, and transmittal of the report to the proper organizational unit within the department.

(el Yamuna and Bhakra Water Services units (WSUs):

17. Each of the two Water Service Units would be supported by an Advisory Committee, and the WSPS Office under the EIC. The responsibilities of the Bhakra and Yamuni Water Services Units are: a. operation and maintenance of the bulk water supply system (surface water delivery system ar.d public irrigation tubewells); b. operation and maintenance of drainage and flood control works; c. operation and maintenance of groundwater recharge facilities; - 64 -

Anno&2 Attahmaont 2 Page 13 of 13

d. development and operation of a preventative maintenance program for all the equipment and facilities within the water service unit; e. periodic review of all of the Unit's systems to identify modernization and rehabilitation requirements; f. management of shops used for the maintenance and repair of equipment used in operating all water systems; g. collection and analysis of data for system operation and maintenance; h. determining water services provided, and the related water charges; i. arranging for the collection of water service charges with the appropriate Department unit and/or government agency; j. coordinating with water users in system operation, water deliveries, modernization and rehabilitation activities, * ir charges, and provision of information to water users concer q water service activities; k. implementing the Department's drought management plan in drought years; 1. implementing and manageing the turnover of O&M of irrigation tubewells, water courses, and minor canal systems to the water users; m. monitoring water quality of water deliveries, and taking appropriate action with proper authorities for the stoppage of poor quality effluent discharges into the systems operated by the Unit; n. providing hydrologic and groundwater data collected, for O&M activities, to the DPU for its use in planning activities; 3. preparing work progress reports, and submitting the reports according to schedule to the Program Budget Cell under the CEC. -65- Annex 3 Attachment3 INDIA Page 1 of 9

1HARYANA RESOURCES CONSOLIDATION PREOCT

SI4LEPROtaRAM ANDMIDGET STATEMN

Backg,un,

The primary objectiveof the project is to assist HID carry out its responsibilitiesof planning,development and managementof the state's water resourcesin a more efficientmanner through institutional,administrative, managementand technicalmeasures to help transform HID into a modern Water ResourcesDepartment. This transformationwould be essentiallybased on institutinga rigorousprogramming and budgetingprocess to rationalizethe Department'sactivities and sector responsibilities.

The following constitutes a draft of the programs to be implemented under the project. This illustrates the concept and general content of statements to be produced under the programming and budgeting process being instituted by HID. The listed programs are defined in terms of the agreed content and magnitude of work, within an amount approximating the overall budget of HID set out for the project period (the example is based on a sample budget of Rs.15,000 crore). The program amounts are tentative, and would be refined by HID to conform to the final budget.

:.. Program PFrmat

Each program statement would have the following elements: a. Objective: The objective of the program. b. Activity: The activities involved in attaining the objective. C. Assigned Units: The primary units having responsibilities for parts or all of the tasks involved in completing activities, and the allocation of the program budget to the unit. d. Budget: The budget allocation for implementing the program over the six years, by implementing unit (in Rs. crore). e. Duration: The duration of the program within the project period.

3Impam.nation ]IniaXtiQ

The following abbreviations are used in this example for the units/entities responsible for different activities of the Department:

Sec Secretary of Irrigation (Water Resources) and Power Reg Regulatory (Groundwater) Office of the Secretary WRC Water Resources Commission ENC Engineer-in-Chief and his "staff" level offices including the Chief Engineer Coordination Adm Administration Unit Dat Data sub-unit of the Planning and Data Unit Pln/dat Planning and Data Unit Des/res Design and Research Unit Con Construction Unit WSU Water Service Units (O&M Units) Contr private contractor/supplier Consl consultant - 66 - Annex 3 Attachment3 Page 2 of 9 C. Program Statomgntn

1. Institutional Reform

Objeckti.: To increase the capabilityand effectivenessof HID to carry out its responsibilitiesfor the developmentand managementof the water resourcesof the State of Haryana. ALtiitx: Formulatebasic water developmentand managementpolicies for guiding public programs, and public and beneficiary roles, formulate and seek enactment of needed legislation,rules and regulations; formulate and enact the necessary program, personnel and operating policies; restructurethe organization;assign staff and introduce the primary operational procedures in all units necessary for the effective execution of their responsibilities. AssndJlnit: Sec/WRC (Rs.lcr), ENC (Rs.Scr), Adm (Rs.2cr), Consl (Rs.2cr) Budgat: Rs.10 cr. DLrat±on: 2 years

2- Admainistrative Reform

Qhbjactivn: To consolidate all administrative functions into one unit and improve its administrative and support services to the agency. Ac±i.ity: Create individual sub-units in the Adm. Unit; introduce comprehensive cost accounting and cost allocation; introduce improved procedures including position descriptions and candidate qualification statements; create a modern statewide agency communications and basic computer capability in the agency to support all functional units and their activities; establish a management information system (MIS) to serve the information storage and retrieval needs for all units in carrying out their activities; introduce detailed agencywide programming and budgeting and establish a project and program tracking system (these to be introduced and implemented by a sub-unit of the Chief Engineer Coordination's office). AsWsndJanit:ENC (Rs.lcr), Adm (Rs.14cr), Consl (Rs.25cr) Budget: Rs.40 cr. Du2rat-I: 2 years

3- Agency nirention and Management Program froutine)

QkjmectIxa To assure effective overall direction and management of the agency policy, programing and budgeting, legislative liaison, legal, environmental affairs, public information and vigilance. Ac±tri.yty:Prepare and review basic agency policies, prepare the long-term and annual program and budget, maintain legislative liaison, conduct public awareness program, and provide other "staff" level functions including legal, environmental affairs and vigilance. Program tracking, instituted under the 'Administrative Reform Program', and policy and oversight of the system turnover, instituted under the Turnover Program, will be continued under the Agency Direction and Management Program. A&snd4tinitENC (Rs.97cr), WRC (Rs.3cr) auzdgat: Rs.100 cr. puratinn: 6 years - 67 - Annex 3 Attachment3 Page 3 of 9

4- tgeguLatoxy fGrounduaterl Func±ione

Qaiec±ixe: Administer the regulatory laws, rules and regulations enacted for the management of the water resources and associated activities. AcWtlyitL: Formulate a groundwaterregulatory enforcement program to carry out the government'sregulatory policies and enacted legislation; monitor the activitiesof governmentagencies, private enterprises and individualsfor compliancewith establishedlaws, rules and regulations:aggressively take prompt actions to enforce penalties against violators in accordancewith appropriatelaws; draft appropriatelegislation for improvingthe effectivenessof the regulatoryfunction and prepare information regarding purpose, provisions and administration of the state's regulatory program for use by the Public Information Office of the agency. AAagndeZnit: Sec/Reg (Rs.58cr), Consl (Rs.2cr) Budget: RS.60 cr DuratZian: 6 years

5. Administration(routine)

tbjectyve:To assure comprehensiveadministrative support and services are provided efficientlyto the agency in a manner that all units can efficientlyperform their functions. Actl-iv: Provide administrativeservices and support in the areas of personnel,finance, procurement of supplies and selected equipment,real property procurementand management, staff training,communications and computer services (includingany MIS modifications)and motor pool. aasnd-..ni±:Adm (Rs.140cr) Rnudgoe: Rs.140 cr Dura.-inn: 6 years

6. Administration VehiOla and zqiipm.ntPool Pxonurammnt

ObiAcctiva:To provide cost effective efficient transportation and equipment support to all agency units except, for the WSUs. AC±izitx: Procure vehicles and equipment for an agencywidemotor pool managed by the Adm. Unit to serve agency units. Assnd-Unit:Adm (Rs.lcr),Contr (Rs.19cr) lud"gl: Rs.20 cr DLLration: 6 years

1 Training

Clrseti.ym To increase the managementcapability and technicalskills of staff and their awarenessof HID's responsibilitiesand functions.

ActIzitx: Orient staff with agency policies,procedures and functions; conduct routinetraining of O&M staff and agency office support staff; and arrange for specializedtraining in technicalareas, including re-trainingfor reassignedpersonnel. AsArnelZn4I:Adm (Rs.9cr),WSU (Rs.39cr),Consl (Rs.2cr) Ezdzt - Rs.40 cr DunratfnI: 6 years - 68 - Annex 3 Attachment 3 Page 4 of 9

X. Tnrnover

Ohia4crx: To turnover to identified beneficiary entities the responsibilities for the operation and maintenance and defined aspects of assets ownership of selected facilities currently under the full responsibility of the agency. The initial emphasis will be on DIT wells and watercourses.

Activity: Formulate statewide policies applicable to all services (water distribution, drainage and flood control) pertaining to the extent and the governing conditions of turnover including mctters of ownership of assets, facilities rehabilitation, beneficiary contribution to costs of turnover, the rights and responsibilities of the beneficiaries and the government; prepare and secure enactment of legislation, rules and regulations pertaining to turnover; detail the program of activities for executing turnover; create, staff and train the specialized sub-units in the WSUs to carry out the program and initiate the program of turnover. a-and.UnJi: ENC (Rs.4cr), WSU (Rs.9.6cr), Consl (Rs.6.4cr) Budget : Rs.20 cr. Du.rat-In: 4 years

9 Agnny Stataw{de C__ n1-ntions Syate

LbjActLiL: To establish a reliable statewide communications capability for the use of all agency units, in particular for data collection, O&M, construction and routine management. A&tlivtx: Design, construct facilities, install equipment and place in operation a communications system connecting primary WSU offices in the state and key data sensing sites with regional and central offices of the agency; procure, install and place in operation mobile and site communications equipment including terminals for computer and data monitoring equipment and completion of associated office modifications and housing. A&sAnd.ah4t: Des (Rs.lcr), Cori (Rs.2.Scr), Adm (Rs.lcr), Contr(Rs.189cr), Consl (Rs.6.5cr! Buidga: Rs.200 cr. MiratI.on: 2.5 years

10. Agancy Can=uter Capacity Upgrade

Object-iva: To institute full modern computer capability as required to effectively carry out the agency responsibilities in a timely efficient manner. Acnklyl Compile the computer hardware and software needs of the agency units and define, specify and procure computer software and hardware needed for all agency units including a central computer and PCs, office network, office software packages and special software for the various units and establish the programing and support backup services. AsadJnIkz: Adm (Rs.lcr), Cons (Rs.2cr), Contr (Rs.9Ocr), Consl (Rs.12cr) fiLLdet: Rs.105 cr. Durat-Ian: 3.5 years - 69 - Annex 3 Attachment 3 Page 5 of 9

11. Office.sand Housing Construction

QhJaer.tfe: To provide adequate and appropriate office and housing facilities for the central and regional units and their sub-units to permit effective and efficient functioning. Activity: Plan, design and construct modifications to existing buildings and new facilities as required. Assnd.VUnit: Des (Rs.lcr), Con (Rs.15cr), Contr.(Rs.154cr) Budget : Rs.170 cr DuAt-zto: 4 years

12 Hydrologic Data Collection and Managgment

ObjQctixe: To consolidate and improve the quality and comprehensiveness of surface and groundwater hydrologic and meteorological (as appropriate) information for use by all government and private sector entities and individuals. ActivitY: Formulate a comprehensive hydrologic collection and processing system, consolidating the functions of other government entities into the Data Subunit of Pln/dat; assign qualified staff, partially through reassignment from other entities; upgrade existing and install new hydrologic and meteorological stations to form an adequate network of sites; provide data collection platforms and equipment to interface with the statewide agency commanications system being built under another program and formulate and install the necessary procedures and software to provide prompt, accurate recording, evaluation and reporting of information. Analytical services will be offered, under specific service agreements, for the specialized analysis of hydrological information for use by government and private entities. AssndU.nit: Plan/Dat (Rs.120cr), Des (Rs.lcr), Con (Rs.lcr), Contr (Rs.6cr), Consl (Rs.2cr) Budget: Rs.130 cr Durati.n: 6 years (2 years site construction)

13. State Water Plan Preparation

Qbjefti: To prepare and upgrade at regular intervals The State Water Plan (SWP) with time horizons of 10, 25 and 50 years for the development and management of the state's water resources consistent with the state's goals, objectives and policies. AcZtivfv: Document available resources; established goals, objectives and policies; existing uses and new projects and programs adopted by legislation. Subsequently, define alternative future conditions in the state consistent with official spatial plans, projected changes and existing programs; formulate alternative programs and projects to satisfy the state goals under those conditions for the consideration of the public and political bodies and document programs and projects that are formalized by laws. The initial SWP is to be issued within two years and fully updated whenever major changes occur and at maximum intervals of five years. Aas.ndlnI.t: Pln/dat (Rs.20cr), Consl (Rs.3cr) RL"d"eL: Rs.23 cr. Durati.n: 6 years (2 years issue initial plan) -70 - Annex 3 Attachment3 Page 6 of 9 14 ProJect Planning

GFa1IzLe: To prepare reconnaissanceand feasibilitylevel plans for major projects to provide the various services (bulk supply, flood control, irrigation,drainage etc) under the responsibilityof the agency and for programs such as groundwaterrecharge and wastewaterreuse to meet agency responsibilitiesin accordance with the water resourcesdevelopment and managementpriorities establishedunder the State Water Plan.

ActiyItx: Conduct reconnaissanceand feasibilityplanning, present alternativesolutions and, through appropriateprocedures, develope project plans for use in project authorization,budgeting and scheduling. These plans are to serve as the basis for the Design Unit to conduct final design leading to the final constructionplans, specificationsand related documents.

A-ssnd..Unit.:Pln/dat (Rs.20cr),Des (Rs.17crsite investigations), Conal (Rs.3cr) audaet : Rs.40 cr. Dzzra±Iana: 5.5 years (beginafter 1.5 years)

15- O&M EqUipmnt Proeurement

Obieatira: To furnish the WSUs with vehicles and maintenance equipment adequate for efficient maintenance of facilities. Ac±jxi±.s: Determine the equipment needs, prepare procurement documents and procure equipment. Aasa±LUnI.:Adm (Rs.l.Scr), WSUs (Rs.1.Scr), Contr (Rs.177cr) Audgnt! Rs.180 cr puratIon: 3 years

16- Rtut1nea Operation, MaintAnanee/Replaeemipnt of HT1DServieAs FAcilities

ObjectoIva:To provide agency services in an equitable,reliable, cost efficientmanner in accordancewith establishedobjectives and agreed operatingplans and to maintain service facilitiesin a manner to assure services at least costs sustainableon into the future. ActIzLtx: Prepare service plans for every service offered by the agency (bulk supply, irrigation distribution, agricultural drainage,storm drainage and flood control), with beneficiaries' assistance as appropriate; prepare agency annual operatingschedules; execute operationsto meet the service objective;and monitor and report on services rendered. Prepare annual, near-term and long term maintenanceand replacementplans for all agency service facilities;prepare annual agency maintenanceschedules; execute maintenancework;and monitor and report on maintenanceconducted. Assnd-lJnIt:WSUs (Yamunaand Bhakra) (Rs.6328cr) Budoat: Rs.6328 cr. Du.raf-nin: 6 years - 71 - Annex 3 Attachment 3 Page 7 of 9

17_ Modrni2ation nf Canal AyRtam

QkiacZixe: To modernize selected features of bulk water supply canal system to improve the reliability and efficiency of the service, save on present operational and seepage losses and reduce the contribution to rising saline water table. Aot.iv.t: Line existing canals, construct augmentation link canal and upgrade key control structures. AaAnd.-Uni:Des (Rs.7cr), Con (Rs.15cr), Contr. (Rs.1558cr) Bud=te: Rs.1580 cr. Dura.fto: 5 years

lB CprIsntr'ict New Mifl6rR

QbjaoIyt.e: Increase area irrigated.

Activit.: Determine water availability and allocation and specific project uses under State Water Resources Plan and whether this work is consistent with the allocation of water under the plan and fully authorized; design, construct and place in operation new minors. AsandJIUnit: Des (Rs.lcr), Con (Rs.19cr), Contr (Rs.200cr) Bud=ft: Rs.220 cr. Durakion: 2 years (initiated after State Water Plan, if approved)

19L Construction of Hathnikund BarragA and Link Channel

Objeatlve: Re-establish reliability and increase operational flexibility of primary water services from Western Yamuna Canal to a major portion of Haryana and the Delhi urban area. Actiyvx: Secure inter-state agreement for construction of facility to replace existing Tajewala Barrage and channels with new barrage and link canal and, once signed, design and construct facilities. AsasndlrJnit:ENC (Rs.lcr), Des (Rs.40cr), Con (Rs.l5Ocr), Contr (Rs.1419cr) A2doat : Rs.1610 or. OrL.wain: 3 years (commencing after inter-state agreement)

20, Moderni2ation of Water CourseA

ObjacLtlva: To reduce seepage, reduce saline groundwater rise and save water. Acnti.v;e: Line existing water courses. AaundntaUnt:Des (Rs.40cr), Con (Rs.l7Ocr), Contr (Rs.159Ocr) Bzd=g-: Rs.1800 cr. Duratinn: 5 years

21- Canal Rehabilitatinn

Objeatixe: To reduce water losses and re-establish canal conveyance capacity. AcZtiv.i: Repair existing lining, remove silt from canals, repair structures and reshape canal embankments. Assnd.e ni : Des (Rs.lcr), Con (Rs.lOOcr), Contr CRs.924cr) ELS;et: Rs.1025 cr. prza.tIon: 4 years - 72 - Annex 3 Attachment 3 Page 8 of

22. Watercourse Rehabilitation

ObiIetl: To reduce water losses and re-establish canal conveyance capacity. Actvitx: Remove silt, reshape channels and place rigid lining. Assnd-UnitZ: Des, Con (Rs.lcr), Contr (Rs.8cr) aud=t: Rs.9 cr. D-ratzin: 1.5 years

23- Drainage System Rehabilitation

Qbjeatixe: To re-establish channel conveyance capacity and system capability to reduce damages from inundation to crops and property. Aciztiyi: Channel clearance, earthwork and rehabilitate key structures. Assne.lUniZ: Des (Rs.2cr), Con (Rs.60cr), Contr (Rs.608cr) BlIdge": Rs.670 cr. Durati.on: 4 years

24-. River and Channel Rehabilitation

obtet;v: To return the erosion control and levee structures in natural and flood channels to a condition of acceptable flood control performance and reasonable cost-effective maintenance. Aativity: Design construct remedial works and repairs on channel boundaries, groins, channel structures and levees. A.gsnd.UnIt: Des (Rs.20cr), Con (Rs.30cr), Contr (Rs.270cr) BlIdmt.: Rs.320 cr iurat±ie: 2.5 years

25- Augmentation Tubewell Rehabilitatinn d4jective: To return the wells to a viable state of production. Activity: Repair pumps, risers and associated features Aaand-.JVait: Des (Rs.10cr), Con (Rs.2cr), Contr (Rs.28cr) Budget: Rs.40 cr RurAtio-: 1 year

26. Direct Irrigation Tubewell O&M i0lbctIly: To operate and maintain existing DIT wells that are functioning with an adequate submergence in the groundwater (no new wells are to be constructed nor existing wells lowered to secure suitable submergence). ActyIjtd: Operate existing DIT wells that are effectively and efficiently operating and maintain them properly to the extent that it does not require lowering the well or pump unit. Place in operation and maintain those existing DIT wells that become adequately submerged by a rise in the groundwater. A&d.lTI.nt: WSUs (Rs.5cr) Budgat: Rs.5 cr. zLratira: 5 years -73 - Annex 3 Attachment 3 Page 9 of 9

27. Resoarch on Drainagn C11notor Dnasi{

Qbjectsiv To determine the most effective configuration of the drainage collection scheme, identified as promising under current and subsequent studies, to be adopted for control of high water tables in areas underlain by saline groundwater. Activ.tv: Select three sites for research; design the field studies appropriate for consideration and design, construct and monitor performance of various tile collector configurations. This activity would be consistent with the findings of the Northwest Drainage Study and any subsequent studies that will define the most promising collector schemes and configurations for testing. Assnd-Untit:Des/res (Rs.8cr), Con (Rs.2cr), Contr (Rs.85cr) R"d9£t: Rs.95 cr. Duration: 1 yr construction and 4 years monitoring

2A. Research on Sprink1Ar Trrigat4on

Qbjirctav: Identify and introduce efficient sprinkler systems for reducing water demand for the suitable crops under irrigation in Haryana. Act vitx Identify lands and conditions where greatest benefits could be derived by the use of sprinkler irrigation as opposed to current practices; select five sites for installation of pilot studies; conduct a literature search of information available on commercial irrigation experience under like soils, topographic, micro- climatic conditions and potential crops: design agrvnomic and equipment tests to be conducted that best applies to commercial application in the area; procure commercial equipment under specifications; conduct studies, publish findings and recommendations. As.nd..Unit:Des/res (Rs.2cr) and Ministry of Agriculture, Contr (Rs.4cr) A1doet : Rs.6 cr. Duzation: 4 years

292 Research on DrilpIrrigation

Objectize: Identify and introduce efficient drip systems for reducing water demand for the suitable crops under irrigation in Haryana. Acti.itx: Identify lands and conditions where greatest benefits could be derived by the use of drip irrigation as opposed to current practices; select five sites for the installation of pilot studies; conduct a literature search of information available on commercial irrigation experience under like soils, topographic, micro-climatic conditions and potential crops; design the agronomic and equipment tests to be conducted that best applies to commercial application in the area; procure commercial equipment under specifications; conduct studies and publish findings with recommendations. AasndJinIt: Des/res (Rs.lcr) and Ministry of Agriculture, Contr (Rs.3cr) Rndoak: Rs.4 cr. 12"ratlcn: 4 years - 74 -

Page 1 of 2

DRAP TRMt RETMRRKWSIMF PR CONSY RRVS PROGRAMMNGM@D BUtDDGTING

The Haryana IrrigationDepartment (BID) is introe,ucing major irstitutionaland administrativereforms. The objecti¶'eis to allow HID to meet its charter of responsibilities in a cost effective manner. The reforms are directed at improving its functional responsibilities and to conducting its operationsmore efficiently. As part of this exercise, the HID will adopt rigorous Programmingand Budgeting (P&B) proceduresthat will allow rationaldetermination of the agency's work in keeping with its availablebudget. While P&B overall will be governed by the existing financialand accountingcode of the Government of Haryana (GOH), the adopted P&B procedureswill need to be amplified and detailed to reflect the distinct processesof definingprograms and their priority, and subsequently, tailoring the program proposals ;o the funds available. The P&B system would be directly dependentupon developmentof systems f,r Cost Accountingand Cost Allocation (CA/CA)and administrationof HID budget.

The responsibilityfor 28S, includingthe preparationeffort and the ongoing tracking of unit work for compliance,will reside under the CE Coordinationas a staff functionin the Engineer-in-Chief's(EIC) office. The accounting and financial administration functions, including the CA/CA supporting the P&B effort, will reside in the Administration Unit.

6bi4et{vA of HID AocitY

The objectiveof this HID activity is to formulate the policies and procedures for instituting the process of Programming and Budgeting in HID including the specific tasks at each level and the Program and Budget Tracking (P&BT)for adherencewith the adopted program and budget by units at each level in HID. This will be followedby an inten3iveprogram of training and scheduledtransition activities to implementthe process.

Scope of Conul tant Sprvyiee

The Consultantwill assist HID with: (1) formulatingthe P&B and P&BT process and proceduresand (2) implementingthe process throughoutthe department. The Consultantwill provide services in support of item (1) as follows: a. Review existing budgetingprocess and procedures b. Prepare summary material that describesthe P&B process for the general informationof the HID staff. - 75 -

Attachment 4 Page 2 of 2 c. Prepare a comprehensiveusers' manual on the P&B process (describe each task, .esponsibilities,participants, period in the P6B cycle) consistentwith existing GOH budgetaryprotocol. d. Specify the appropriatesoftware for use in the P&B process, includingthe necessary linkages with the cost accounting,cost allocation.MIS system and the tracking activity. e. Draft the necessaryforms for use at every level for use in the v&B process. f. Prepare a comprehensiveusers' manual on P&8T (describeeach task, responsibilities, participants, reporting frequency, report detail at each management level in the department). g. Specify the appropriatesoftware for use in collection/inputof data, analysis,unscheduled retrieval of informationand report preparation. h. Draft the necessaryforms for use at every level for reporting informationto the P&B$. i. Suggest the structureand staffing of the P&B office includingthe P&BT activity. J. Develop a program and relatedmaterials for training staff in P&B and P&BT, actions to instituteP&B and P&BT and a schedule for implementation.

Conduct of the Work

The work will involve close cooperationwith other HID institutional and administrativereform activities, particularly those concerning cost accounting/allocation,MIS, communicationnand computer upgrade and the Finance Department of GOH.

7!Tne and Duration of Cgn utat erices

The Consultantwill comaence work March 15 and complete item (1) work by September 1, 1994. Participationin item (2) activitieswill be determinedupon completionof item (1)

Location of Work

The work will be conductedin the course of three trips to India, coupled with drafting time in his place of residence.

Prior to the arrival of the Consultantin India, HID will assign the officers responsiblefor this function and allocate ample time for close work with the Consultant. HID will provide office space and appropriate support services to the Consultantand arrange necessarymeetings with governmentagencies as needed while in India. - 76 -

Attachment 5 Page 1 of 2

INDIA

HARYANA WATER RESOURCES CONSOLIDATTON PROJQCT

DRAFT TERMS OF REFERENCE FOR CONSUtLTTNG SERVICES COST ACCOUNTING AND COST ALLOCATION

Pagk|rtnd

1. The Haryana Irrigation Department (HID) is introducing major institutional and administrative refc=-as. The object_-e is to allow HID to meet its charter of responsibilities in a cost effective manner. The reforms are directed at improving its functional responsibilities and to conducting its operations more efficiently. As part of this exercise, the HID will adopt rigorous Programming and Budgrc-ng (P&B) procedures that will allow rational determination of the agency's work in keeping with its available budget. To provide information to support P&B and create the basis for monitoring results, HID will introduce in parallel a system of detailed Cost Accounting and Cost Allocation (CA/CA). Detailed CA/CA will also allow a clear identification of the cost of services for use in devising cost recovery actions. While CA/CA overall will be governed by the existing financial and accounting code of the Government of Haryana (GOH), the adopted procedures will need to be amplified and detailed to reflect the distinct processes of identifying costing categories, allocation categories and related procedures for every program activity of HID, and in the case of services, every type, level, beneficiary and location of service.

2. The responsibility for CA/CA including collection and verification of information, will reside within the Accounting and Finance Sub-unit under the Administration Unit Chief. The (P&B) and related Tracking efforts, will reside under the CE Coordirnationas a staff function in the Engineer- in-Chief's (EIC) office.

Oegctive of HTD Activity

3. The objective of this HID activity is to formulate the policies and procedures for instituting the rigorous system of cost accounting and cost allocation including the specific tasks at each level and the preparation of information and the application of the system by units at each level in HID.

SR_o of Consultant Sarvi es

4. The Consultant will assist HID with: (1) formulating the CA/CA process and procedures and (2) implementing the process throughout the department. The Consultant will provide servi-es in support of item (1) as follows: - 77 -

Annex I tachrmnt S Page 2 of 2

a. Review the existing accountingprocess and procedures

b. Prepare summary material that describesthe CA/CA process for the general informationof the HID staff.

C. Prepare a comprehensiveusers' manual on the CA/CA process (describeeach task, responsibilities,participants, period in the P&B cycle) consistentwith existing GOH finance and accountingprotocol.

d. Specify the appropriatesoftware for use in the CA/CA process, includingthe necessary linkageswith the P&B activity and the MIS system.

e. Suggest the structureand staffing of the CA/CA office.

f. Draft the necessary forms for use at every level for use in the CA/CA process consistentwith the existing GOH financial code.

g. Develop a program and related materials for training staff in CA/CA, actions to institute CA/CA and a schedule for implementation.

Conduct of the Work

5. The work will involve close cooperation with other HID institutional and administrative reform activities, particularly those concerning programming and budgeting, MIS, communications and computer upgrade and the Finance Departmentof GOH.

Time and Duration of Consultant Services

6. The Consultantwill commence work March 15 and complete item (1) work by September1, 1994. Participationin item (2) activitieswill be determinedupoi completionof item (1) Locationof Work

7. The work will be conducted in the course of three trips to India, coupled with drafting time in his place of residence.

Qernment Support

8. Prior to the arrival of the Consultantin India, HID will assign the officers responsiblefor this functionand allocate ample time for close work with the Consultant. HID will provide office space and appropriate support services to the Consultantand arrange necessarymeetings with governmentagencies as needed while in India. - 78 -

Annozl Page 1 of 2

HARYEA WATIREQ5O!Rmen CONOLATATON PROJ

INSTITUTIONAL SUPPORT

1. Under the project, funds are provided to support the major institutional and administrative reforms undertaken by the Haryana Irrigation Department (HID) and proposed under the project which are described in detail in Annex 3. The project expenditures would cover technical assistance, training and consultancies required to transform HID into a specialized water resources agency, and to build its specialist capacity. Staff costs for strengthening the administration of HID would be covered by Government of Haryana (GO6). Four main items comprise the component: (i) institutional strengthening; (Li) planning and data collection; (iii) training; and (iv) research and development.

A. Institutional Strengjthening

2. Technicalassistance would be provided to support: (i) institutional reform; (ii) administrativerefor. (including -omprehensive cost accounting and cost allocation,management information system (HIS) and project and program tracking system, and detailed agency wide programming and budgeting); (iii) groundwater regulation; (iv) procurement and routine administration; (v) beneficiary participation and formation of Water User Associations (WUAs) (funds are provided for formulation of procedures, training of HID staff and farmers, contracts with training institutes and NG09, and study tours, both nationally and internationally for staff and farmers); (vi) informationand communications system (funds would be provided for design and construction of facilities,equipment installationand operationof a communications system); (vii) and computer capacity upgrade. Attachment1 provides a detailed breakdownof technicalassistance provided for institutionalstrengthening. Investments would also include civil works for (viii) offices and housing construction.

B. Plannina and nata Collantion

3. The planning and data collectionfunctions would be financed through four program areas: Ci) agency direction and management; (ii) hydrological data collection; (iii) State Water Plan (SWP);and (iv) project planning. A management information system (MIS), which is described in Annex 9, would also be introduced to support hydrological data collection, preparation and updating of the SWP, and project planning. Investmentswould include technical assistance of US$300,000, as well as specialized equipment for discharge measurement and a groundwaterlaboratory. - 79 -

Annax 4 Page 2 of 2

C. Training (TuSs2000010

4. Under the project funds would be provided for training to orient staff with agency policies,procedures and functions. HID would also conduct routinetraining of O&M staff and support staff and arrange for specialized training in technicalareas as its activitiesdemand, including re-training for reassignedpersonnel. Funds are also provided for training staff of HID in environmentalaffairs, and for staff and interestedfarmers in areas related to system turnover and formationof WUAs.

D. search and QAvelgZmet.

5. The project funds would support: (i) research on drainage collector design; and (ii) research on sprinklerand drip irrigation. Investmentsfor research and developmentwould includetechnical assistance, civil works on drainage collectors,sprinkler and drip irrigationequipment. The drainage research activity would be consistentwith the findings of the Northwest Drainage Study now underway and any subsequentstudies that would define the most promisingcollector schemesand configurationsfor testing. The Ministry of Agriculturewould be involved in the research related to sprinklerand drip irrigation,and link the resultswith public sector research undertakenon crops and cropping systems, irrigationmanagement and utilization.

E. Baseline survevs

6. Funds are provided for HID to contract a local consultantto carry out baseline surveys. These would cover, inter alia, the followingaspects: agricultureand income data; irrigationdata; water use, delivery,and hydrologicaldata: beneficiaryparticipation and Water User Association (WUA) activities;etc. The consultantwould evaluate the data collectedby all the line units of HID in their regular functionalactivities, identify gaps in the data, carry out additionalsample surveys to cover these gaps, and consolidate the results from the independentsurveys and the existing data into baseline studies. During implementation,the baseline data would be compared to implementation data from updated surveys, and used for supervision, monitoring and evaluation. Draft Terms of Referenceare in Annex 16, Attachment6. Assuranceswould be sought that draft baseline surveys would be carried out by October 1994, and submittedto IDA for its review and comments, and these would be subsequently incorporated for a final report by January 31, 1994. - 80 -

Annex 6 Attachment 1

INDI

HARYANA WATER RESOURCES CON$OLIDATION PROJECT

TECHNICAL ASSISTANICE - INSTITUTIONAL STRENGTHENING ADMINISTRATION (USD)

Total 94/5 5/6 6/7 7/8 8/9 9/00 Base

Institutional F 30,00C 15,000 Reform L 8,000 7,000 60,000

Administrative F 180,000 50,000 Reform L 50,000 100,000 100,00 100,00 100,00 680,000

Groundwater F 45,000 15,000 Regulation L 60,000

Agency Computer F 30,000 10,000 Upgrade L 60,000 60,000 40,000 200,000

Communications F 35,000 Systems L 65,000 100,000

Project F 130,000 70,000 60,000 Coordination L 260,000

Environmental F 40,000 Affairs L 20,000 10,000 10,000 80,000

Base Line F Survey L 30,000 30,000

Turnover F 60,000 24,000 L 15,000 16,000 15,000 130,000

Total F 788,000 387,000 215,000 110,000 100,000 1,600,000

Note: F = Foreign L = Local - 81 -

Page 1 of 5

HARYANAWATER RESOURCES CONSOLIDATION PROJECT

RHARTLTATTON COMPONENT

1. Haryana Irrigation Department (HID) provides irrigation facilities to a Culturable Command Area (CCA) of 2.88 M ha, through a 12,125 km long canal net work, supported by the Bhakra reservoir and the river diversion works at Tajewala. The canal system has a total number of 24,907 masonry structures. In addition to supply of water to agriculture (8817 thousand acre feet), the canal network also provides bulk supplies to urban and rural communities, including to Delhi, the country's capital (604 thousand acre feet), industries and power stations (300 thousand acre feet), and commercial users. HID also provides drainage services to farmers and rural and urban communities (including disposal of effluents), through a 3,800 km long drainage network; and flood control along major rivers and drainage channels, within the state. The canal network can be divided in two main systems: the Western Yamuna Canal System (NYC) and the Bhakra Canal System (BC). Construction of the WYC was initiated in the year 1850 and in 1952 for the SC. The drainage system was constructed over a period of 36 years from 1952 to 1988.

2. The Bank has earlier funded two irrigation projects in Haryana: Haryana irrigation Project and Haryana Irrigation Project II. These projects provided support for lining parts of the canal system and water courses to conserve water, improvement of rural roads, improve marketing facilities and water supply to rural communities. In Haryana Irrigation II Project, in addition to the above items, support was provided for sprinkler irrigation, research and training and augmentation tubewells. Both the projects were successful in meeting their primary objectives. However, due mainly to inadequate funding for O&M, the capital assets worth billions of rupees have deteriorated, affecting their ability to provide the designed service and equitable supplies. Table 1 shows the demand and availability of funds for maintenance of the canal system during the period 1988-89 to 1992-93. The greater part of the available funds has been utilized for the fixed cost of establishment, leaving totally inadequate financial resources for works to maintain the system. Under the proposed Haryana WRCP, the issue of adequate provision of funds for annual O&M, is being addressed separately.

3. The primary objective of the rehabilitation component, therefore, is to invest in one time repair and rehabilitation of the existing systems, both canals and drainage, to address the problems of the backlog of deferred 06I and bring the system back to acceptable performing standards. This would encourage beneficiaries to pay for the cost of improved water delivery and facilitate the turnover of system maintenance to farmers. Enhanced O&M funding would ensure continued functioning in accordance with specifications thereafter. Implementation responsibilities for this component rests with the Construction Unit and the Design and Research Unit. - 82 -

Annea-A Page 2 of S

A.. anal Synt-am fthab1h41tat4oJ

4. The project would finance replacement of deteriorated canal lining, silt clearance, bank strengthening, special repairs and replacement of masonry structures and special repairs to project buildings. The specifications for materials, workmanship, and quality control required are described in Annex 7. CanAl Ting

5. The total length of main canal, branch canals, distributaries and minors in the BCS and WYCS are shown in the following table, along with lengths of respective canals which are lined and the area of lining. The area of lining which has deterLorated and is proposed to be replaced under the project is also shown in the table.

Canal SyAtem AgregAte lenath of Area ZrXgotM ChannalR for rehah to be lined of lining ((ms) (Mm 2)

Main and Branch Canals 144.77 0.195 Distributaries 279.69 0.233 MinDr 32L7-s0 QL2Qfi T!otaJ 7t75A;l - 960-3

Main and Branch Canals 220.01 0.343 Distributaries 364.83 0.175 Minora L29fl04.05 oTaUl- Wet l88 89 0-748 arand ta 2 1 40- 15L32

6. Identification of the canal, its reach and the quantity of lining proposed to be rehabilitated during each year of the project period has been done. System wise abstract is given in Table 2.

Bank StrangthanInSt And Slt~ Clan.

7. Over the years inadequate annual maintenance of the canal section of the unlined reaches has resulted in collapse of the designed bank slopes and excessive silting of canals. The canals in a total length of 2317 Km involving 12.64 Mm3 earth work is proposed to be strengthened to the original designed section and desilted, under the project. Reaches requiring this work in different canals have been identified and reach wise quantities computed. Table 3 gives the year wise program of implementation of these itema. - 83 -

Annax lr Page 3 of 5

Replacementand Rehabilitation of Masonry Structures

8. The SAR of the Haryana II Project had recognizedthat 'many existing control structureswere designed to outdated standardswhich do not enable the degree of water regulationrequired in the systems for efficientand timely distributionand delivery of irrigationsupplies; in addition,some structures are in poor operatingcondition and have reachedthe end of their useful life' (para 3.08 of SAR - January 1983). There have been considerableshortfalls in attendingto the structuresduring the implementationof the Haryana 1I Project. The WRCP thereforelays stress on adequate attentionto replacement and rehabilitationof structures. Replacementof 301 n 'ry structures and special repairs to 5697 structures;of differentcategoro.es, including the control structures,head and cross regulators,(including their gates and gears) , bridges, falls, cross drainage works, escapes, ghats, outlets, tail clusters etc. is planned under the project. Table 4 gives the year-wise schedule of work of the identified structures, on different canals.

9. The rehabilitation program of structures includes replacementof two important structures i.e. Pathrala Dam at Dadupur and Ottu Weir. HID will finalize the designs of these structures on priority, as these two structures are likely to cost about 25% of the total cost of structures rehabilitation.

10. operation and Maintenance (O&M)of the canal system (excluding lift canals) is at present managed by 7 circles supported by 24 divisions. It is anticipated that these circles will handle the work of canal rehabilitation along with the work of annual O&M. The project would provide the necessary logistic support of touring vehicles to enable efficientsupervision of rehabilitationworks. Works are proposed to be executed through contractsas per the World Bank procurementprocedures.

B.. Drainage SyAt-am Reabtation

11. A 3,800 Km long drainage network has been constructedin Haryana during the period 1952 to 1988 for storm water disposal. Inadequate availability for maintenance works of the drainage system has deteriorated the carrying capacity of drains, resulting in submergence of fields in many places for more than the optimum period causing agricultural losses. The project will support one time rehabilitation of the earthen section of the drains, wherever choked, to the original design section in some 60% of the system. The project will also support rehabilitation/replacementof 405 masonry structuresacross the drains, including 65 cross drainage works, 63 water course crossings, 5 head regulators,23 drop structures and 249 bridges of various categories from District road bridge to field path crossing. The work under this component is proposed to be executed as per the annual schedule given in Table 5 (page 148 of Plan of Operation and Maintenance,HID). Five existing drainage circles would supervisethis work in addition to the annual maintenance. HID will ensure that the locationswhere work of resectioningthe drains under the rehabilitationprogram are kept distinct from similar activitiesunder normal annual maintenance, for which HID is also proposing to constderably enhancoe the allocation of funds. - 84 -

Annex- Si Page 4 of 5

C. Rehabilitation of Water CourR-Ro

12 The canal command area has some 13,000 water courses of length about 60,000 Km. Work of lining the water courses was taken up through the Haryana Minor Irrigation and Tubewell Corporation (HSMITC) from the year 1973. From the year 1988, Command Area Development Authority (CADA) is also executing work of lining water courses. Some 24,000 water courses have been lined. In addition, work of lining 600 water courses is in hand with HSMITC under the World Bank assisted National Water Management Project (NWMP).

13. Field surveys by HSMITC indicate that water courses mostly lined during the period 1973-78 are not running at the desired efficiency due to damages to parts of lining and to masonry structures across the water courses. Damages occur mostly due to tampering by farmers, weed growth, cattle menace, rainy season erosion, and unauthorized outlets. Damages are mostly concentrated near the outlets. In some cases, due to lining of parent channels, bed levels of water courses in the initial reaches are required to be raised to provide gravity irrigation to higher level lands which are at present irrigated by putting in siphons in the canals. The project will support rehabilitation of 195 identified water courses in a length of 425 Km involving replacement of an aggregate 66 Km length of damaged lining, adopting the specifications currently being used for lining of water courses: and repairs to the damaged masonry structures like drops, road crossings, culverts and outlets.

14. Five circles, supported by 16 divisions, under the HSMITC, are currently engaged in lining and maintenance of water courses. As a part of the institutional reforms under the WRCP, the work of water courses, including rehabilitation, is proposed to be merged with the HID. Eighty-five Kms of water courses are planned to be rehabilitated annually during the first five years of the project period. At negotiations, agreements were reached that HID shall select water courses for rehabilitation only after benefi-ciaries served by the water course have been organized into Water User Associations.

12-.B kilitatinn of AuGmentation Tubhe-.Pa

15. A total of 1724 Augmentation Tubewells (ATW) were installed in Haryana over the years up to 1983, some 290 of which were under Haryana I and Haryana II projects. Each A.W was expected to have a capacity of 1.5 to 4.5 cusecs, to supplement the flow in gravity canals. Currently only 666 ATWs are operational. The project would support making some 700 selected ATWs operational, involving rehabilitation of carrier channels, replacement and special repairs to pump sets and control panels. An ATW for being eligible to receive funds from WRCP for rehabilitation shall satisfy the following criteria: (i) water table of the aquifer supporting the ATW is not progressively depleting, and availability of groundwater to support the service area is confirmed by the State Water Plan; (ii) water available is tested and certified of a quality fit for irrigation; (iii) ATW's operation is not constrained by power availability; (iv) rehabilitation of the ATW is technically and economically viable; and (v) ATW is supplementing the supplies of continuously running channels. - 85 -

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E. Rehabilitation of Direct Trrigatin Tubewells

16. Over the periods 1955-60 and 1969 - 71, about 616 Direct Irrigation Tubewells (DITs) were installed in Haryana in the public sector; later another 930 tubewells were installed through the HSMITC during 1972-82, making a total of 1546. These DITs are 100 to 150 meters deep with a yield of about 1.25 cusecs and were mostly installed in areas which did not have alternative sources of irrigation. GOH proposes to continue maintaining 720 DITs, out of the total 1546; the remaining are either already abandoned or proposed to be closed down due to technical faults and low demand, as private tubewells have come up in such areas. GOH proposes to divest itself ultimately from the responsibility of operating and maintaining the DITs either through turning over O&M to beneficiaries, sale of wells or through attrition. It is recognized that sudden cessation of services, would not be possible and that some of the tubewells need to be rehabilitated to restore eesign discharge. The project will support rehabilitation of DITs on selective basis, in the context of a rapid (three year) program of privatization or closure.

17. Out of 720 DITs proposed to be maintained, a DIT for being eligible to receive funds from WRCP for rehabilitation shall satisfy the following criteria: (i) the DIT commands land which does not have any alternative source of irrigation, whether Government or private; (ii) water available is tested and certified of a quality fit for irrigation; (iii) water table of the aquifer supporting the DIT is not progressively depleting, and availability of groundwater to support the service area is confirmed by the State Water Plan; (iv) DIT commands land belonging to such cultivators, majority of whom are small to marginal farmers (average holding less than 1 ha); (v) DIT is located in a difficult terrain where special drilling equipmen- would be required to provide alternative private tubewell to serve the area, which would normally not be within the reach of marginal and small farmers; (vi) DIT, having a rated life of 30 years, is not more than 25 years old; (vii) estimated cost of rehabilitation of the DIT, including redrilling, redevelopment, repairs to electro mechanical equipment, pipeline and water course, is not more than Rs. 30,000 (1994 price level); (viii) rehabilitation of the DIT is technically and economically viable; and (ix) prior to rehabilitation, HID will have reached agreement with interested parties to turnover the O&M responsibility, or ownership, of the DIT immediately after completion of works.

F- Rehabilitatinn of River control Works

18. River control works for flood protection and river training constructed so far consist of 627 Km of river embankments, 990 spurs, 40 Km of bank pitching and 38 ring bunds. The project will support rehabilitation of embankments (involving some 0.86 M cum earthwork), and 465 spurs, in the reaches identified by HID. -86 - x s Table 1

Hantana Water ResourceaCorXsolWdation Proiect

RehabilitationComponent

Availabilityof Fundsfor Maintenanceof CanalSystem - Historical Rs.M

S. No. Year Buget Allocation Actual Expenditure

Establishment Works Estsblishment Works

1 1988-89 123.887 59.595 141.316 74.026

2 1989-90 144.873 40.682 176.021 56.513

3 1990-91 166.538 36.989 191.806 79.238

4 1991-92 192.081 54.949 205.689 102.673

5 1992-93 206.631 58.397 190.321 64.337

Average of five years ____ 181.03 75.357

Notes: Averageannual expenditure during the last 5 years has been:

a. On establishmentRs. 181.03 M; correspondsto Rs. 74.31per Ha of CCA.

b. On works Rs. 75.357M; correspondsto Rs. 30.93per Ha of CCA HaryanaWater Resources Consolidation Project

RehabilitationComponent

AnnualProgram of CanalLining m sqm

S.No CanalSystem 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 Total

1 W.Y.C. a Mainand Branch 0.0843 0.1179 0.0646 0.056 0.0205 . 0.3433 Canals b Distributaries 0.053 0.0424 0.0198 0.0278 0.0284 0.0033 0.1747

c Minors 0.0533 0.0921 0.0315 0.0234 0.0228 0.0067 0.2298

00 Total 0.1906 0.2524 0.1159 0.1072 0.0717 0.010 0.7478

2 B.C a Mainand Branch 0.0737 0.0411 0.0266 0.0182 0.018 0.0169 0.1945 Canals

b Distributaries 0.0593 0.0481 0.0396 0.0293 0.0271 0.030 0.2334

c Minors 0.0308 0.0256 0.0355 0.0380 0.371 0.0388 0.2058

Total 0.1638 0.1148 0.1017 0.0855 0.0822 0.0857 0.6337

GrandTotal 0.3544 0.3672 0.2176 0.1927 0.1539 0.0957 1.3815 - 88 - ACAOX..A Table 3

HarvanaWater Resources Consclidation Project

RehabilitationComwonent

AnnualProcram of BankStrengthening

Mcum

SNo. CanalSystem 1994 1995 1996 1997 1998 1999 Total -95 -96 -97 -98 -99 -2000

A. MLY_

a Main and BranchCanal 1.026 0.846 0.473 0.364 0.35 - 3.059

b Distribitaries 0.303 0.315 0.256 0.166 0.114 - 1.154

c Minors 0.333 0.404 0.318 0.289 0.274 - 1.618

Total W.Y.C. 1.662 1.565 1.047 0.819 0.738 - 5.83 l

B BjC_

a Main and BranchCanal 0.150 0.116 0.11 0.085 0.092 0.075 0.628

b Distributaries 0.250 0.269 0.261 0.259 0.257 0.259 1.555

c Minors 0.129 0.158 0.163 0.158 0.144 0.155 0.907

Total B.C. 0.529 0.543 0.534 0.502 0.493 0.489 3.09

GrandTotal 2.191 2.108 1.581 1.321 1.231 0.489 8.921 -89- table 4

HarvanaWater Resources Consolidation Proiect

Rehabilitaton Component

AnnualProgram of Rehabilitationof MasonryStructures Numb=

S.No.Category of CanalSystem Structures 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 Total

1. HeadRegulator W.Y.C. 22 34 76 59 28 1 6 235 B.C. 46 57 34 22 18 15 192 T 68 91 110 - 81 46 31 427 2. Cross Regulator W.Y.C. - 2 2 . . 4 B.C. 10 11 3 . . . 24 T 10 13 5 . . . 28 3. Bridges W.Y.C. 96 121 82 62 56 32 449 B.C. 146 120 106 68 68 52 560 T 242 241 188 130 124 84 1009 4. Falls W.Y.C. 5 5 4 1 15s B.C. 18 23 9 7 7 2 66 T 23 28 13 8 7 2 81 5. C.D.Works W.Y.C. 5 6 3 2 2 . 18 B.C. 27 2 - . . . 29

T 32 8 3 2 2 - 471 6. Escapes W.Y.C. 2 2 2 1 12 8 B.C. . 1 . . . 1 T 2 3 2 1 1 . 9 7. Ghats W.Y.C. 209 230 111 89 95 45 779 B.C. 152 126 119 119 110 81 707 T 361 356 230 208 205 126 1486! 8. Outlets W.Y.C. 432 454 374 373 158 116 19C7 B.C. 97 171 180 191 189 160 988 ______T 529 625 554 564 347 276 2895 HaryanaWater ResourcesConsolidation Project

Behablitation Com_onent

AnmnalProgram for DrainageRehabilitation Works

S.No. Activity Units 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 Total

1. Internl Clearance Thousand cu.m 357 438 45 4568 458 118 22?9

2. CrossDrainages Nos. 38 51 49 47 43 12 240

3. Regulators Nos. 3 3 2 1 1 1 11

4. Bridges Nos. 88 92 88 83 76 20 427

5. Outfalls Nos. 6 8 7 4 4 4 33

.~~~~~~~~~~~~~~~~~~~t - 91 -

INDIA Table 6

HARYANAWATER RESOURCES CONSOLIDATION PROJECT (WRCP) Statementof Civl WorksRequirement REHABILITATION River ControlWorks

Unit Quantiy Total ______a94195 9519 9 7 97198 98/99 99100

CIVILWORKS Repairto Embankments No. 12.17 16.9&. 18.85 20.05 22.63 9.49 100.11 Studs/Spurs/Pitching No. 5.93 7.88 8.68 9.55 10.49 2.73 '5.26

REHABILITATION Rehabilitationof Watercourses

Unit Quantffy Total 94/95 95196 9/7 97/98 9899 99/00

CIVILWORKS Uning km 85 85 85 85 85 425 EarthWork km 85 85 85 85 85 425 Nakkas& Culverts km 85 85 85 85 85 425 Dismantellingof old WC No. 85 85 85 85 85 425

REHABILTATION Rehabilitationof Augmention Tubewells

Unit Quantity Total ______94195_ __ 95/9 96/97 97/98 9899 99/00

CIVILWORKS Canier ChannelRepair 100 krn 50 50 100 0 EQUIPMENT 0 PumpingSets Replacement No. 120 120 240 ControlPanels Replacernent No. 100 100 200 CompressorReplatement No. 1 1 2 - 92 -

Anax Page 1 of 4

HARYANA WATE RRESOt1RCRSCON OLIDATION PROJECT

MODERqTZAfTON COMPONENT

1. Haryana IrrigationDepartment (HID) provides irrigation facilities, through a 12,125 km long canal net work, supportedby the Bhakra reservoir and the river diversion works at Tajewala. In addition to supply of water to agriculture,the canal network also provides bulk supplies to urban and rural communities,including to Delhi,, industriesand power stations. HID also provides drainage services to farmers and rural and urban communities (includingdisposal of effluents),through a 3,800 ka long drainage network; and flood control along major rivers and drainages, within the state.

2. The main objectiveof the modernizationcomponent is to upgrade the existing assets of HID. ModerAizationof facilitiescan lead to substantial water savings, and to better control of water delivery. Improved regulation of water flows allow flexibilityin crop choice and options, and encourages the adoption of modern farming systems. Haryana has assessed its water need for agriculturealone as 34 million acre feet (42 bm;3) against the water availabilityof about 17 million acre feec (21 bn3); need to conserve water is thereforeparamount. The modernizationof the system would also lead to increased efficiencies in cost recovery, while for items such as water courses, this would provide incentivesto farmers to take over maintenance responsibilities.To help achieve these objectives,the project will provide investmentsin modernizingidentified components of existing canal system; constructionof a link channel for improvingsupplies to some distributaries in the tail areas of WYC; replacementof Tajewala Headworkswith a new barrage at Hathnikund;and lining of water courses. Implementationresponsibilities for this componentrests with the ConstructionUnit and the Design and Research Unit.

A. Modernization of Canal SyAtem

3. The project will continue supportingthe modernizationof canal system taken up under Haryana I and II projects,adopting a selectiveapproach (takinginto account the nature of soil characteristicsof the tract through which the canal network traverses,as also the compositionof canal banks) in view of the sharp rise in sub-soil water level, and the effect of salinity in lands in central Haryana. Sixty-threechannels in different areas have been identified for modernizationunder the project, and the work would include the followingitems:

(i) Brick Lining of 63 identifiedchannels, out of which 25 are in WYC and 38 in Bhakra Canal systems. Altogether 1389 km of canals have been identifiedunder the lining program. A total area of 7.4 million m2 would be lined under the project. Table I shows the names of the identifiedchannels, their length and area proposed to be lined. - 93 -

Ang 6 Page 2 of 4

(ii) Lining would result in modification of hydraulic parameters of the canal section and would need corresponding modifications in the connected masonry structures i.e. falls, regulators, bridges, flumes, cattle ghats and outlets.

The project would support modifications, remodelling, and strengthening (where necessary) of 449 structures, 243 bridges and 553 outlets which have been identified. Table 2 shows the number of structures of various types, and falling under different circles, proposed to be remodelled/strengthened as a part of modernization.

4. The modernization of the canal system would generate water savings of about 312 million m 3 per annum. Of these, about 67% would be saved in the Bhakra command and about 37% in the WYC command. This water saving would be available to improve and extend irrigation, in particular at the tail ends of the system. The estimates of water savings are based on experiments conducted by HID to assess seepage losses in lined and unlined ch:.nnels. Seepage losses in unlined channels vary from 7 to 8.5 cusecs per million ft2 of wetted perimeter. The corresponding figure for lined system is 1.6 to 3.2 cusecs per million ft2. Based on these empirical results HID estimates that 8 and 2 cusecs per million ft2 are seepage losses from unlined and lined canals respectively. Water savings from reducing seepage losses by lining canals would therefore equal 6 cusecs per million ft 2 of wetted perimeter or, in total, 525 cusecs annually. Assuming that there are 278 full supply days for irrigation in the Bhakra command and 200 full supply days in the WYC command, about 196 million m 3 of water would be saved in Bhakra and 116 million m 3 in the NYC command annually.

R. Link Channel from Augmentation Canal in NYC

5. In meeting the demand of water for four distributaries of Main Branch of NYC (Kheri, Budhakhera, Old Nardak and Karnal) during the lean season of about 8 months, the Main Branch of WYC having a designed head discharge capacity of 9,100 cusecs, must be operated to deliver a relatively low discharge of about 247 cusecs required by these distributaries, thus resulting in huge losses. An earlier effort to feed these channels through a tubewell channel has failed due to non-running of the tubewells because of acute power shortage. In order to meet the requirement of these distributaries and simultaneously to conserve the disproportionately high seepage loss in the current practice, it is now proposed to deliver these supplies through the existing augmentation channel, and providing a link channel to connect the system, along with remodelling the related tube well channels and other channels suitably. In addition a number of masonry structures would need to be remodelled and a few new structures constructed. Table 3 lists out the works to be executed under this component. The project will support the proposed activities, which are assessed to result in an annual water saving of 276 cusecs annually. Assuming that the feeder canal would be run for 72 days per year, in total 48 million m 3 would be available to extend irrigation in the Western Yamuna Canal Command. The component would be completed during the first three years of the project. - 94 -

hnnm&6 Page 3 of 4

C. Hatbnikund Barrage

6. Yamuna Canal System receives water of Yamuna by diversion at Tajewala Headwork,which diverts up to 16,000 cusecs water of Yamuna river in to the WYC. Tajewala Headwork is over 120 ye^-s old and needs replacement. The NYC serves about 66% of the state's irrigatodarea. Supplies to Eastern Yamuna Canal (EYC)of Uttar Pradesh are also deliveredat Tajewala headwork. The original head of EYC was washed away in 1924 and supply to EYC are now affected through an auxiliaryarrangement which does not function efficiently.

7. The project will support constructionof a new Barrage across the Yamuna river at Hathnikund, about 3 Km upstream of Tajewala Headwork, at an estimated cost of US$51.2 million, to replacethe Tajewala Headwork The Barrage wilL partly lie in Haryana territoryand partly in the territory of Uttar Pradesh. The new barrage at Hathnikundis to be linked to the NYC through link channels proposed to be constructedon Haryana territory.

8. Distributionof water between Haryana and the erstwhilePunjab (Haryana being the successorstate so far as Tajewala is concerned) is governed by an interstate agreementof March 12, 1954, binding for a period of 50 years. Proposals to replace the Tajewala Headwork have been under conziderationsince 1972, when the decision to constructa new barrage, instead of the proposal of strengthening the existing, was taken. An expert committeewas appointedby GOI on February 6, 1982 to examine various alternative sites for the new barrage suggestedby Haryana and UP. The Expert Committee, after detailed examination of various alternatives, and after model studies, furnished its recommendationsto GOI on January 19, 1983. The committee recommended construction of the new barrage at Hathnikundsite and recommendedthe parameters and principal levels for the barrage. The interstateagreement is to be concludedbefore executionof the work. Preliminaryworks have been started.

9. The barrage would be constructedabout 3 Km upstream of Tajewala Headwork. The barrage will have ten spillwaybays of 18 meters each, 8 under sluice bays of 18 meters each, with overall waterway of 363.8 meters to pass 100 year flood of 28,000 cum per second. The crest level of the weir is proposed to be 8 meters above the cistern level in the spillway portion. Proposals framed by GOH are based on the expert committee's recommendations. The estimates are based on the tentative design based on these reco en- dations. Detailed designs will be taken up on priority to fix contract for constructionas early as possible.

D. Lining of Water Courses

10. The canal command area has some 13,000 water courses of about 60,000 length km of which 4920 will be lined by March 31, 1994. Work of lining the water courses was taken up through the Haryana Minor Irrigation and Tubewell corporation (HSMITC)from the year 1973. From the year 1988, Command Area DevelopmentAuthority (CADA)is also executingwork of lining water courses. In addition,HSMITC receives financialsupport from the World Bank assisted National Water ManagementProject, scheduled to close in June 1994. - 95 -

hnnox 6 Page 4 of 4

11. WRCP would support lining of additional1500 water courses, 550 in WYC and 950 in BC, of a total length of 6858 Km ( 2510 Km in WYC and 4240 in BC), along with provision of outlets and culverts,and buildings for supe.rvision staff, and touring vehicles and other equipment. Some 1150 Km length of water courses is planned to be modernizedannually during the project period. The main benefit of lining watercoursesis the reductionof seepage losses and provisionof irrigation. Additionalbenefits stem from improvingthe distributionof water within the watercoursewhich prevents waterloggingand salinity caused by excessivewater use at the head-end. Lining would generate water savings of 307 million m3 per annum. Of these about 78% would be saved in the Bhakra command and about 27% in the WYC command. The estimatesof water savings are equally based on experimentsundertaken by HID. Seepage losses are high in unlined watercoursesand vary from 15-29% in normal soil to 30-40% in sandy soils. In well maintained lined watercoursesseepage losses are reduced to 2 to 5%. Accordingto the soil conditionson average water saved by lining has been assessed as 25% and 12% in Bhakra and WYC respectively. Assuming there are 278 full supply days for irrigationin Bhakra and 200 full supply days in WYC, about 239 million m3 would be saved in Bhakra and 67 million m3 in WYC annually.

E. Construction of New Minors

12. The project would support construction/extensionof minors in 40 locationsspread out in the command of two canal systems to bring additional area of 19,910 ha under command. Even though Haryana has a fairly well developed system of canal irrigation,there are some po-kets of areas where irrigationintensity is low because the canal and watercoursesystem is inadequate. The project would therefore reduce the length of selt-ted watercoursesas well as reduce the size of a chack to ensure a mor. equitable distributionof irrigationwater. Implementationof this componentwill however depend on determiningavailability of water for the additionalcommand as a result of the State Water Plan. - 96 -

Hearvana-Water Resources Consolidationl Prolec Page 1 of 2 New Works (Modernization)

Modemization of Canal S&stem

S. No. Name of Canal Length of Area proposed for Canal in Km lining Lakh sqft 1 2 3 4

A BhakraCanal 1. Kaithal Distributaiy 15.98 14.5 2. Saraswati Distributary 28.96 . 41 3. Shudkan Distributary 46.33 2 4. Dhamtan Sub Branch 26.43 0.3 5. Sirsa Branch 4.78 6.00 RD 189980-2C5646 6. Sirsa Branch 4.21 13.60 RD 328200-342000 7. Pabra Distributary 40.37 1F.52 8. Barwala Branch 42.55 93.34 9. Pabra Sub Branch 10. Balsanand Sub Branch (Raising) 21.01 1.2 11. SmrbaraDistributary 16.61 4.60 12. Udaypur Minor 8.40 13. Lakbarwali Minor 8.40 1.38 14. Kewal Distributary 11.08 1.62 15. Phag; i Distributary 8.17 2.25 16. Bani Distributary 38.48 0.23 17. Rod Branch 33.38 12.3 18. Ratia Sub Brabch 20.20 24.00 19. Gudha Distributary 23.78 0.10 20. Mammen Khera Distributary 61.98 6.55 21. Baruwali Distributary 27.13 15.10 22. Jandwal Distributary 17.01 27.47 23. Kaluwan Distributary 55.10 19.83 24. Sukhchain Distributary 46.10 55.20 25. Ottu Feeder 32.05 54.00 26. Rattangarh Distributary 24.97 1.66 27. Badalgarh Distributary 24.84 0.75 28. MallekanMinor 3.01 1.91 29. Mangala Sub Minor 5.49 0.81 30. Rania Minor 7.71 2.7 Aunnex 6 97 - 221L Page 2 of 2

S. No. Nameof Canal Lengthof Area proposedfor Canalin Km lining Lakhsqft 1 2 3 4 31 KishanpuraMinor 5.33 1.26 32 Amritsar Minor 4.57 1.75 33 SureraMinor 3.06 1.00 34 ChuchalMinor 3.71 1.48 35 EllenabadDistributary 16.62 10.12 36 SalarpurMinor 2.44 0.61 37 Wami Minor 2.29 0.39 38 NakorMinor 2.90 0.61 B W.Y. 39 Markanda Distributary 1.488 4.00 40 SirsaBranch 304.80 50.00 41 MorkhiMinor 11.80 4.52 42 ButanaBranch 2.68 3.40 83200-89000 43 HansiBranch 54.35 66.03 60000-238326 44 ZahidpurMinor 14.02 1.5 45 KasniMinor 11.06 0.75 46 JhaggarSub Minor 45.08 75.70 47 Jhajjar Distributary 5.25 4.46 (0-17200) 48 RampurMinor 8.00 4.95 49 SalhawasLiP Channel 11.76 9.91 (16000-54595) 50 SubanaMinor 4.51 1.20 51 RewariKhera Minor 8.99 1.45 52 Jui Feeder 17.68 30.25 (88000-146000) 53 Kherikalan Minor 10.82 6.79 54 MujheriSub Minor 2.22 1.07 55 FaridpurSub Minor 2.13 0.93 56 RampurDistributary 30.55 21.75 57 BullabgarhDistributary 10.11 5.09 58 Sikri Distributary 8.15 4.15 59 HarphalaMinor 1.52 0.66 60 Sikrana Distributary 2.59 1.20 61 MarchandpurDistributary 17.07 14.20 62 NekpurMinor 4.95 2.51 63 FatehpurMinor 5.49 2.50 Total 762.05 Add 5% for contigentareas 38.10 Total . 800.15 -98 - Annoy Table 2

HaramnaWater Resources Consolidation Proigct

New Works

Modemizadonof CanalSvtem

Satement of MasonryWorks Requring

EReplacement1Modificatign/Strengtheninlg

S.No Nameof Circle Outlets Catth Meotr RegulatorsFalls V.R. D.R. Railway

- ______- TGhatsFlumes BridgesBridges Bridges

1. CanalLining Circle 213 202 2 1 7 1 6 61 1 3 No. 1, Sirse

2. Canal Lining Circle 8 1 6 11 266 No. 2, Hissar

3. Canal Lining Circle 62 2 8 7 1 23 2 No. 3, Kaithal

4. Canal LiniingCircle . - . . No. 5, Kamal

5. Canal Lining Circle 210 89 . 3 1 84 1 No. 6, Rohtak

6. W.J.C. Feeder Circle 60 55 3 32 Delhi _

Total 553 389 2 41 17 143 100 1 - 99 - .naa Table 3

Link Channel'-rom AugmMntIto Can,alin WYC.

AnnualProam of Work

S.No. Item Unit Program 1994-95 1995-96 1996-97 1997.98 1998-99 1999-2000 Total

1. Earth work Mm3 0.16 0.24 0.08 - . 0.48

2. Lining M.sqm . 0.16 0.08 . .. 0 .24

3. New masonry Nos. 1 0 15 . 2 5 structures

4. Remodellingof Nos. 6 1 2 . . . 20 masonry structures - 100 - MnaU* INDIA Table 4

HARYANAWATER RESOURCES CONSOLIDATION PROJECT (WRCP) Sttement of Civil WorksRequirement MODERNIZATION Constructionof Minors

Unit Quantity Total 94195 95 96197 97/198 1 9900 CIVILWORKS Pumphouse No. 2 7 9 T.il cluster No. 6 17 23 Ouitets No. 20 87 107 Syphon No. 3 2 10 15 Ghats No. 0.16 1 3 4.16 WC crossing No. 6 11 17 Regulator No. 5 7 28 40 Falls No. 3 4 7 Drainage No. 0.5 0.5 1 Bridges No. 14 14 103 131 Building 0.15 0.12 0.12 0.39 Earthwork MmA3 0.486 1.042 0.872 2.4 Uning Mm^2 0.021 0.284 0.305

MODERNIZATION Modermisationof Watercourses

Unit Quantity Total 94/95 95/96 967 979 98/99 99/00 CML WORKS Uning kmn 1135 1135 1146 1146 1146 1150 6858 EarthWork kin 1135 1135 1146 1146 1146 1150 6858 Nakkas& Cuivert Ikn 1135 1135 1146 1146 1146 1150 6858 Field Hostes I No. 2 2 2 2 2 10 Field HostelsII No. 5 5 5 5 20 Staff CuartersIll No. 10 10 10 10 10 50 Staff QuartersIV No. 10 10 10 10 40 - 101 -

AnAz4 Page 1 of 4

HARYANAWATER RESOURCES C=SOLTATION PROJECT

TECHNICAITSPEIFICATTONS FOR PARILLTATTON. N1ATNTfMANCR._ESItN. CONSTRUCTION A1bj WAERMAAGMNT PBOCEflTRE

1. The present water supply rates for the agriculture, public health, power generation industrial, etc. users in Haryana are very low. There is no charge on the rural and urban beneficiaries for the drainage and flood protection services provided by HID. Due to the inadequacy or the non-levy of the service charges, the preventive and the special maintenance of the facilities have deteriorated and the water related service systems are functioning on low efficiencies. Additional funds are required not only for their proper operation and maintenance (O&M) but also for the rehabilitation of the works damaged by the de2erred maintenance. This Annex discusses the technical specifications, criteria and practices for survey, investigations, repairs, for rehabilitation, maintenance, design, construction and water management procedures, in support of the Rehabilitation and Modernization component: under the project.

2. The O&M Study conducted for the preparation of the Water Resources Consolidation Project (WRCP) has brought to light some major deficiencies inhibiting the performance of the State's canal water systems to match the designed or defined objectives of the services. The main deficiencies are: canals

reduced carrying capacities of some lined or unlined main, branch, distributary and minor canals due to inadequate bank section or piping, siltation, damaged lining or weed growth.

damaged outlets, tail clusters and the shortage at the tails

..nefficient water management/control works which cause significant operational losses (Budhera Complex, etc.).

decades old structures which require rehabilitation, replacement or modernization (Pathrala Dam, Level Crossing, Meter Majra Regulation -all on Hansi Branch, Ottu Weir, damaged WYC head regulator at Tajewala, etc.), submerged bridges or the bridges "posted" for load limits and speed in the interest of safety.

corroded check gates, rusted hoists and regulation bridges (Munak, etc.).

insufficient flow measuring sites on the main and branch canals. - 102 -

Ana1 Page 2 of 4

infrequentmonitoring of the fluctuatio)nsin the system flows and slow communicationof water gauge data from the tails of the channels.

- Lack of adequatepreventive maintenance of lined watercourse.

- need to rehabilitateor remodel reaches of the watercoursesto match the hydrological improvements in the design of the parent channels (minor or distributary) which have been lined subsequent to the lining of the watercourse.

- submerged road crossings.

- unlined water courses crossing interveninglocal depressionon high ground (tibhas)which are difficultto manage by the irrigators,particularly the tail enders.

Rurface dSains

- choking of the cut sections of the drains due to the siltationor the garbage deposits from the sewers of adjoiningtowns.

- inadequatewaterway of drainage crossingsconstructed decades ago.

Public Tubewells

- irregular and inadequate power supply.

- lack of diagnostic determination of the defects An the augmentation tubewells to be rehabilitated.

- criteria for abandonin- permanently sick tubewells.

3. The growing rural and urban population (total increa-e from 12.8 to 16.5 M during 1981-91) and the developingpower generationand industry needs are adding to the requirements,f good quality water for the essential services in the State. The available surfacewaters from the Bhakra and Yamuna rivers have already been allocated;long-term yearly recharge of good quality groundwater availablemainly in one-thirdof the state's area has been mostly exploited. Additional requirements of good quality water for essential services may have to be diverted from the present irrigated agricultural usages unless water services start operating efficiently and water conservationmeasures or works undertakenon the canal systems improved to meet part of the additionalwater requirements.

4. HID has now been assigned the primary responsibility of managing the State's water resources. The supplies for the essential water related - 103 -

AnneAx7 Page 3 of 4

services particularly in the south-western parts of the State where quality of the ground water is saline are provided by the Department from the canal system. GOH proposes to increase the water service charges progressively during the six years of the WRCP implementation period. The increase would be about 2 and 25 times the present rates of the supply for irrigation and industry respectively. This increase in rates has been necessitated to meet Canal Systems needs and its operation to render the service as designed. GOR also proposes to implement a policy of recovering the cost of providing water supply (agriculture, public health, power generation, industries, etc.), drainage and flood control services from beneficiaries, except in the drought affected areas in the south where the irrigation and rural water supply services are pumped from the gravity canals.

5. To provide water services at higher rates, HID has to ensure that the O&M of the water systems is improved, enabling the provision of upgraded services compared to the present levels of performance. Main work components provided in the WRCP to achieve this objective are:

rehabilitation (or replacement) of the existing canal (gravity commands) and drainage systems, river control works, lined watercourses and augmentation and direct irrigation tubewells.

- support for improved annual O&M of the canals, drainage systems, river control structures and augmentation tubewells.

6. Water conservation works to be implemented for the equitable distribution of the supplies comprise: modernization of canals and water courses; Feeding Kheri, Budha Kher, etc. distributaries from augmentation canal; construction or extension of minors for equitable water distribution; construction of Hathnikund Barrage and link channels. The construction of an earthen dam in Kandi area and the reclamation of waterlogged area by sub- surface drainage, etc. is also proposed under Research and Training Component of WRCP.

7. The glossary of terms used in investigations, planning, design and construction of project works would be those published by Bureau of Indian Standards (BIS) for river valley projects and in HID's Manual of Irrigation Practices (under revision). Terms relating to irrigation management would be those defined in the Haryana Canal and Drainage Act of 1974 with Rules and Notifications. Irrigation monitoring and assessment terms are defined in the Revenue Manual.

8. Latest versions of the BIS standards for investigation, planning, design and construction of various project components would also apply together with instructions contained in HID's Handbook for the Design of Lined and Unlined Channels and Masonry Works, and in the Haryana State Minor Irrigation Tubewell Corporation (HSMITC) Watercourse Manual. Publications on the standards or practices of the Central Water Commission (CWC), Central Board of Irrigation and Power and of international organizations applicable to project works would also be consulted. Indian Road Congress (IRC), Ministry of Surface Transport, - 104 -

Anngx7 Page 4 of 4

Government of India, standards, or those developed by HID would be followed for the construction of the project bridges.

9. Specifications of materials and works as given in the publication "Haryana PWD Specifications, 1990" would serve as standard specifications. These specifications supplement each item of the Common Schedule of Rates (CSR) adopted in HID for work items involving new construction methods or technologies; new specification as appropriate will be drafted by the HID authority component to accord technical sanction. New specifications (use of epoxy, cathodic protection of submerged gates, etc.) proposed for such works will be forwarded to the Bank for Comments.

10. water allocation procedures to a beneficiary in canal commands are well defined and legalized in the State. The procedures have worked satisfactorily in the past. These would be followed in the commands of the new irrigation facilities in the past to be built under the project.

11. The procedures to be adopted for carrying out repairs or rehabilitation works would be site specific. Nevertheless, the relevant guidelines contained in well known publications (USBR Concrete, Earth, Paints, Drainage, Water Measurement, Tubewell Manuals) would be used to plan and implement the works.

12. Attachment 1 contains standards and specifications for the rehabilitation and modernization components. A list (non-exhaustive) of the Indian Standards applicable to the project works are in Attachment 2. - 105 -

Page 1 of 4

HARYANA WATER RESOURCES CON OLTnATION PROJECT

STANARDS, SPRCTFTCATTONS~, CBTTZRTA AND PRAC-TCE FORREAThTATTON AND MODERNIZATION COMPONENTS

1. The glossary of terms used in investigations, planning, design and construction of the project works would be those published by Bureau of Indian Standards (IS) for river valley projects and/or in HID's Manual of irrigation Practices (under revisio). Terms relating to irrigation management would be those defined in the Haryana Canal and Drainage Act of 1974 with Rules and Notifications. Irrigation monitoring, assessment terms and management instructions are defined/provided in the Revenue Manual.

2. Specifications of materials and works, as given in the publication "Haryana PWD Specifications, 1990", would serve as standard specifications. These specifications supplement each item of the Common Schedule of Rules (CSR) adopted in RID. For work items involving new construction methods or technologies, new specifications as appropriate will be drafted by the HID authority competent to accord technical sanction. New specifications evolved for the project works would be forwarded to the Bank for comments.

3. Latest versions of the IS and/or international standards for investigation, planning, design and construction of various project components would also apply together with instructions contained in HID's Handbook for the Design of Lined and Unlined Channels and Masonry Works, and in the Haryana State Minor Irrigation Tubewell Corporation's Water Course Manual. Publications on the standards or practices of Central Water Commission (CWC), Central Board of Irrigation and Power and of International Organizations applicable to project works would also be consulted. Indian Road Congress (IRC)/Ministry of Surface Transport, Government of India, standards, or those developed by HID would be followed for the construction of the project bridges.

Rehabilitation and Modernization of CanalA

4. Hydraulic surveys of the distributaries and minors would be done where the special and rehabilitation works are to be carried out. The surveys would help in the identification of sites where deficiencies in the channels need to be rectified and would also be useful for carrying out rehabilitation works.

5. Soil classification tests from the borrow area would be carried out before undertaking the bank strengthening works. Earth conforming to the PWD specifications would be used unless the local soil involves blending or preconditioning. The bank to be strengthened would be cleaned of jungle and - 106 -

hnn.Z 7

Page 2 of 4 stumps and (scarified) before putting new earth work. The old bank shall be cut into steps, benched and wetted which would help in making good bond between the old and new earth. Guidelines provided in the Indian Standard IS: 11532-1985 would also apply for the construction during strengthening.

6. Canal Lining

The latest L-Section of a channel is checked and approved after carrying out the hydraulic surveys, as required,will form basis for canal lining. Canal lining should be with first class clay burnt bricks of specifications laid down vide SpecificationNo: 3.5, para 3, of Haryana PWD Specifications (1990). Specifications for lining of canals of differentcapacities shall be as follows, as shown in the attached chart.

DLge-hrg up to 150 eg

- lip cutting 1.0 ft.

- 10 mm thick 1:6 cement sand plaster on the sub-grade.

- 10 mm thick 1:3 cement sand plaster over the sub-gradeplaster.

- first class bricks laid in 6 mm thick 1:3 cement sand mortar to cover 10 mm thick 1:3 (cut off) cement plaster.

Danehar= 151 to 1000 Ca

- lip cutting i.0 ft.

- 10 mm thick 1:6 cement sand plaster on the su'3-grade.

- 12 mm thick 1:3 cement sand plaster over the sub-grade plaster.

- first class bricks laid in 6 mm thick 1:3 cement sand plaster to cover 12 mm thick 1:3 (cut off) cement plaster.

Dniaharge 1001 to 2000 Cs

- lip cutting 1.50 ft.

- 10 mm thick 1:6 cement sand plaster on the sub-grade.

- 16 mm thick 1:3 cement sand plaster over the sub-gradeplaster.

- first class bricks laid in 6 mm thick 1:3 cement sand mortar to cover 16 mm thick 1:3 (cut off) plaster. - 107 -

Att-achmanLI Page 3 of 4

7. The specificationsof cement, sand, and first class bricks to be used for canal lining would be those given in Haryana PWD Specifications- 1990. Greater quality control would be exercisedin the preparationof sound sub- grade, brick quality, mortaring,geometry of the section and canal alignment.

8. The lining heading commencedduring a closure would be completedboth on the section sides and bed in the entire length tackled at least 2 hours before the arrival of the supply at he heading site on the opening of the canal.

9. Lining of the canal involvesreadjustment/reconstruction of outlets on both the banks of the ridge canals. The readjustment/reconstructionof the outlets duly approved by the competent authority would be completed simultaneously during the closure period when lining work is progressing. This is necessary to avoid disruptionof irrigationoperations in the afected outlet chaks.

Repairs t~ Canal Lining

10. The repairs and rehabilitationof main, branch, distributary,and minor canal lining would be carried out during the operationalor the annual closures. In case of Bhakra Main Line (BML),Warwana Branch, Bhakra Main Branch and BML-BarwalaLink Canals which operate throughoutthe year, being the feeder canal, special closures will have to be arranged for repairs to lining.

11. The damaged portions of lining will be cleaned of the debris, loose earth and surroundinghollow lining portions. The area to be repaired would be prepared to accommodate full brick size courses. Fresh earth of proper specifications would be laid in layers and compacted to the required standards. Pneumatic compactors should be used in restricted areas. The repaired lined surface would be finished flush with the level of the adjoining undamaged lining. This would be checked with a sufficientlylong, straight and hard wood edge.

Rshabilitat4nn and Mornf2at1nn of Masonry st7ructurea

12. Before deciding the rehabilitationor replacementproposals of the structureson the canals, their designs and past performancedata will be studied. Sub-surface explorations to find out the foundation conditions (Code of Practice for Sub-surfaceInvestigation for foundationsis: 1892-1979)and the latest hydraulic data of the channel would be adopted to prepare the design for remodellingthe structure.

Publicx Tubawlls

13. In case of the tubewellswhere pumping units are to be replaced the well design and its data on the performancerecord during the past years would be studied from Master File and Log Book and its present *wire to water" - 108 -

lUne4x 7 taghint 1 Page 4 of 4 efficiency before replacirzg the unit. After taking out the old pumping unit, the cndition of the well assemblywould be ascertainedby taking the soundincrsup to the well bottom and using the bore hole camera to check for incrustation,etc. and inside conditionof the casings, etc. for taking remedial neasuresas required. A pump test would also be run to observe the well hydraulic (draw down, specificcapacity, etc.) and deciding the matching specific,ationsof pumping unit for the tubewell.

14. Data/record of the past performance of the wells which need redevelopment should indicate if the re-development has been necessitated due to the construction deficiency or subsequent incrustation of the slots, etc. If on redevelopment the discharge of the well neither improves nor becomes sand free, soundings of the well assembly should be taken and bore hole camera used to ascertain if the problem is caused by pipe rupture. The wells whose performance dc.esnot improve with redevelopment may have to be abandoned or replaced.

WaerCurae Lining (New Conntrnntl6n and Reh biitAtionn

15. The designs and specifications for the lining and the structures of the canal water course under this project would be those which were evolved during the implementation of Haryana Irrigation I and II and also adopted for the water course lining under the ongoing National Water Management Project in Haryana. The lined section is rectangular and in first class brick masonry. For the water courses which are to be rehabilitated, the same designs and specifications would be followed.

Flood Protection Emhankments and river training works

16. The proposals for the rehabilitation, reconstruction or replacement of the flood protection embankments and the river training works would be finalized on the basis of the recent river surveys and updated flood hydrology of the river or stream. The design criteria of the proposals should be based on the latest IS standards and the guidelines provided in the CBIP Manual on River Behavior, Control and Training. Recommendations contained in the Report of National Commission on Floods, March 1980 would also be considered. Guidelines for the planning, design and the construction provided in IS: 12094-1987 and IS: 11532-1985 would also be applied to implement the works. - 109 -

______Annex 7

TYPICAL X- StC T/OfVS AttachmentChart 1 SHOPvIAle, r.#rjP4-C1A1CA4 rOIVS / W86

.. /,lSlfI I

/ 8Rck ON6 OfE IN C. // .Vs 6AMY r.uCfK CEMJNr moRrAq 1, - IOAv #ICN Cf4M&Vr PZA$7tr. .CamelvJ r y r4 1-:

/M*eA/r )IC1 *6 C.M SWD oz47re 04' 10 MM'trWICRC 03 CEMCIVr SV AA,SMR& 8CD OVa s QsrD srj . f0R.Sr C4*tj* 4e.41CK 1L4 /(M.4AW #CAiC

D/SCWARt66-P L oIOOO Cs 1_

/AICR 0A' (DOe IN CX .3 \4 * / //6MM Bi//C/i CtEeNTr 1MR P:3 oQf. C _ =/0mM 1 rAecoccemeAt PASTAm S/ / @ Z CeME Jt MORuR1.;:3

/0f4 Mw/_/< /:6 CEMET r4w0 .AtA4SrERoN

OVOR#iRSr.PA4.%76A,(*(4u&O YC.NE'D) |, LI .SrFIR- CASs ARICki( 4A/ JNf&MA I_4CME

'OL~Ž41R6Cioooc.f /18Av~ 71

-8RICK OA' tD'E IA Co?43 6 MM rArck c&r ,vr w /.r3 Id/ _A'rm/C/C CECMEVTO.4Sri CEMEW 4iA TRR I.43

m Mo CeaVJ, r s ,OLsreR.01 A16

.,f/rsr C4ASS EA.tCK ,L/1 14v 6A/,4I//CR CsAMN r .uw"o N At4A1/3 o°tA sccwo#

SPJC,$4AyT,OA(100AV Are. 3,. /4-W /tY CM4J. &iV,AS. 44aOP -At Jf TOo sE4wLr&rU,pD rOA 4t VC4rS7Xqk 'rcRi) _-

Annan7 Atanehra1t 2 Page 1 of 5

HARYJMATER pFmSOtRCZS iCON-OL!DATTON PRO (Standards published by Bureau of Indian Standards applicable to the project works)

Tki -No

I. Glossary of terms tRiver Vahlle Projects)

Part 1 Irrigation Practice 4410 (Part 1) - 1967 Part 2 Project Planning 4410 (Part 2) - 1967 Part 3 River and River Training 4410 (Part 3) - 1967 Part 4 Drawings 4410 (Part 4) - 1982 Part 5 Canals 4410 (Part 5) - 1982 Part 6 Reservoirs 4410 (Part 6) - 1983 Part 7 Engineering Geology 4410 (Part 7) - 1982 Part 8 Dams and dam sections 4410 (Part 8) - 1968 Part 9 Spillways and syphons 4410 (Part 9) - 1982 Part 1OCivil works of Hydro-Electric 4410 (Part 10) - 1969 Generation System including water conductor Part 11 Hydrology: Section 1 General Terms 4410 (Part ll)/Sec.1) - 1972 Section 2 Precipitation and run off 4410 (Part l1)/Sec.2) - 1972 Section 3 Infiltration and water losses 4410 (Part ll)/Sec.3) - 1973 Section 4 Hydrographs 4410 (Part 11)/Sec.4) - 1977 Section 5 Floods 4410 (Part 11)/Sec.5) - 1977 Section 6 Groundwater 4410 (Part 11)/Sec.6) - 1985 Part 12 Diversion Works 4410 (Part 12) - 1973 Part 13 Operation, maintenance 4410 (Part 13) - 1985 Part 14 Soil Conservation and Reclamation Section 1 Soil Conservation 4410 (Part 14/Sec.1) - 1977 Section 2 Reclamation 4410 (Part 14/Sec.2) - 1977 Part 15 Canal Structures: Section 1 General Terms 4410 (Part 15/Sec.1) - 1973 Section 2 Transitions 4410 (Part 15/Sec. 2)- 1973 Section 3 Flumwes 4410 (Part 15/Sec.4) - 1977 Section 4 Regulating Works 4410 (Part 15/Sec.4) - 1977 Section 5 Cross Drainage Works 4410 (Part 15/Sec.5) - 1977 Part 16 Gates and Valves: Section 1 Gates 4410 (Part 16/Sec.1) - 1979 Section 2 Valves 4410 (Part 16/Sec.2) - 1981 Part 17 Water Requirements of Crops 4410 (Part 17) - 1977 Part 18 Energy Dissipator Devices Stilling Basins 4410 (Part 18) - 1983 - 111 -

A=n7 kttpdchm.t 2 Page 2 of 5

Glossary of terms used in water well drilling technology 9439 - 1980

Glossary of terms relating to wire ropea 2363 - 1965

Earthwork on canal, code of practice 4701 - 1968

Design of Cross Section of unlined canals in alluvial soils 7112 - 1973

Design of cross section of lined canal, code of practice 4745 - 1968

Under drainage of lined canals, code of practice 4558 - 1983

Guide for soil surveys 5510 - 1969

Canal outlets, code of practice 7986 - 1976

Lining of canals with low density, polyethylene film, code of practice 9698 - 1980

Specifications for low density polyethylene films (second revision) 2508 - 1984

Maintenanceof canals - lined 4839 (Part 2) - 1979

III.Struntn-9m

Design of cross drainage works, code of practice:

Part 1 General Features 7784 (Part 1) - 1975 Part 2 Specific Requirements: Section 1 Aqueducts 7784 (Part 2/Sec.1) - 1980 Section 2 Super passages 7784 (Part 2/Sec.2) - 1980 Section 3 Canal syphons 7784 (Part 2/Sec.3) - 1980 Section 4 Level crossings 7784 (Part 2/Sec.4) - 1980 Section 5 Syphon aqueducts 7784 (Part 2/Sec.5) - 1980

Construction of cross drainage works, code of practice 9913 - 1981

Hydraulic designs of barrages and weirs, criteria 6966 - 1973 - 112 -

Attaehment 2 Page 3 of 5

Hydraulic design of cross regulators for canals, criteria 7114 - 1973

Hydraulic design of sediment ejectors for irrigation and power channel, criteria 6004 - 1980

Guidelines for data required for design of temporary river diversion works 9461 - 1980

Construction of concrete barrages, code of practice 11150 - 1984

Guidelines for dewatering during construction 9759 - 1981

Site investigations for foundation in gravel, boulder, deposit, code of practice 10042 - 1981

Guide for location, selection and hydraulic design of canal escapes 6936 - 1973

IV. Gatea

Inspection and maintenance of cross drainage works, code of practice 7331 - 1981

Inspection, testing and maintenance of fixed wheel and slide gates, reconmendations:

Part 1 Inspection, testing and assembly at manufacturing stage 7718 (Part 1) - 1975 Part 2 Inspection and testing at the time of erection 7718 (Part 2) - 1978 Part 3 After erection 7718 (Part 3) - 1975

Recommendations for inspection, testing, and maintenance of radial gates and their hoists:

Part 1 Inspection, testing and assembly at the manufacturing stage Sec.1 10096 (Part 1/Sec.1) - 1983 Part 2 Inspection, testing and assembly at the time of erection 10096 (Part 2) - 1983 Part 3 After erection 10096 (Part 3) - 1982

Recommendations for structural design of fixed wheel gate 4622 - 1978 - 113 -

Aknnor 7

Page 4 of 5

V. TubewMl!s

Water level in bore hole, method for determination.

Part I Construction IS: 2800 - 1979 Part 2 Testing IS: 2800 - 1979

Requirements for well screens and slotted pipes IS: 11189 - 1985 Method of tubewell development IS: 11189 - 1985 Specification for gravel for use as pack in tubewells IS: 4097 - 1967

Design of gravel pack for tubewells, Centzal Board of Irrigation and Power Publication, August, 1967. External upset drill pipe assemblies for use in water well drilling:

Part 1 screwed on joints drill pipe IS: 11312 - 1985

General requirements for direct circulation rotary drilling rigs for waterwells IS: 7206 - 1086

Kellys for direct rotary drilling Part 1 square and hexagonal kellys IS: 1180 - 1985

Specification for submersible pumpsets for clear, cold, fresh water IS: 8034 - 1976

Specifications for steel tubes used for water wells IS: 7270 - 1983

Ground water and wells (second edition) Published by Johnson 1986 by Fletcher G. Driscoll St. Paul, Minnesota

VI. Maintnance of canals, code of prartioe

Part 1 Unlined canals 4839 (Part 1) - 1979 Part 2 Lined canals 4839 (Part 2) - 1979 Part 3 Canal structures, drains, outlets, jungle clearance, plantation and regulation 4839 (Part 3) - 1979

VII. Hydreloginal

Measurement of seepage losses from canals: - 114 -

Atashmex 2 Page 5 of 5

Code of practice:

Part 1 Ponding method 9452 (Part 1) - 1980 Part 2 Inflow outflow method 9452 (Part 2) - 1980

Guide for selectionof method of measuring flow in open canals 9922 - 1981 Guide for storm analysis 5542 - 1969

VIII. nrainaga and Ri3Mr vrmankments

Guidelines for planning and design of surface drains 8835 - 1978 Guidelinesfor planning and design of river embankments (Leevees) 12094 - 1987 Guidelines for construotionof river embankments (Leevees) 11532 - 1985

IX. BdW

Standard specifications and code of practice for road bridges (Indian Road Congress):

Section I - General features of design IRC: 5-1985 Section II - Loads and stresses IRC: 6-1966 Section III - Cement concrete plain & reinforced IRC: 21-1987 Section IV - Bricks, stone and block masonry IRC: 40-1970 Section VI - Composite construction IRC: 22-1986

Recommendedpractice for the construction of earth embankmentsfor road works IRC: 36-1970 - 115 - an8 Page 1 of 6

AMUA

HARYANATER RESOWRS.

6PRAP?ONS N TATPJHRANC

1. Water resource development in the state of Haryana has reached a mature phase. The primary function of the Irrigation Department (HID) has shifted from development to one of closer management of the State's limited surface and groundwater resources in an environment of increasing competition for available supplies from domestic and industrial users. The effective and efficient management of operations and maintenance (OM) programs to provide high quality services is now a recognized priority of HID and would result in improved water use efficiency that will dampen the effect of reduced water availability to agriculture in the future.

2. The 001 componentof the project has as its objective the improvementof service delivery performancefor irrigation,drainage, bulk water supply to industry,and urban, flood control and ground water supplies through:

a. Reorganizedinstitutional and management arrangements; b. Adoption of a preventativemaintenance philosophy; c. Priority funding of the maintenanceprogram on a needs basis; d. Strengtheningprogram management capabilitiesand processes; a. Moving over time to pricing water services at cost.

3. HID proposes to link the O&M funding to recovery of OM cost: over the project period, the Bank's financing for O&M would decline, while cost recovery from all users would increase to take up the responsibility of O0M financing. Thus, HID is committed to two fundamental and interlinked reform objectives with regard to provision and funding of 06M: £±uX,, it is committed to fully finance the needed levels of O&M expenditures, and nAwd, to fully transfer the budgetaryburden to all users over the next six years. The O&M activitiesof HID would thus become self-supporting,and allow reallocationof scarce public funds to other developmentalworks.

Watgr Rarvheos InnRtitutinal ArrAncagoMtAn

4. Under the reorganizedstructure of HID, the full range of water services provided by the Depdrtmentwould be managed by two Water Services Units (WSUs) based on the two major water supply systems in the state, one on the Yamuna which is supplied from the run of the River Yamuna, and the other on the ahakra system that is supplied from the regulatedresources in the Bhakra and Seas River Basins. Management of the new units would be along functional lines and would bring together under one line of management the presently fragmentedO&M functionsof irrigation,bulk water supply, agricultural drainage and flood control. The institutionalmodifications under the project are in Annex 3 (detailedfunctional statements are in Annex 3, Attachment 2).

5. The concentrationof O0M functionswould lead to cost savings through the more efficient use of resourcessuch as labor, equipment and vehicles. - 116 -

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There would be less duplicationof effort and this will result in improvements in the efficiencyof use of resources. For instance,at the present time the operationof the drainage system is dependentupon disposal into the canal system at some locations. Operationalmanagement of both the canal and drainage systems is not coordinatedand decisionstaken on drainage can have a detrimentaleffect on canal operations.The new arrangementswould ensure the coordinatedmanagement of both. Similarly,resources for 06M of the drainage circles are managed independentof canal resourcesthat are employed in the same geographicalarea doing similar O&M activities. The seasonal nature of maintenancemeans that the bulk of drainage maintenanceis done during a period of low maintenancein the canal systems and vice versa. By bringing both under one management unit greater efficienciescan be achieved.

Managemen Capacity

6. Strengtheningof the WSU's capacity to effectivelymanage the delivery of OXM, rehabilitationand other constructionprograms under their responsibilityis a key componentof the project. The project includes the introduction of modern management systems in the areas of planning prograumming and budgeting, monitoring and recording, asset and maintenance management and financialmanagement at the center. These management systems would assist the WSUs with their program delivery responsibilities.Computer based real time managementwould assist with canal operationsand enhance operationaldecision making, system monitoring and analysis of performance.

,eratigna a nd 4antenanet. Rehabiltation.and ModArnriation Programs

7. The full funding of continuingO&M, including timely replacement of components,the one time rehabilitation,and modernizationof water supply facilitiesis a major financialpart -.f the project. Although the programs are dealt with separately,there is a clear interlinkagebetween them.

8. Public expenditurepriorit'as in water resourcesdevelopment would be reorientedto best ensure the state's short- and long-termgoals and objectivesas follows:

(i) o.arations and Maintenanne. First priority towards ensuring the long term effectivenessof water system performance through adequatemaintenance and timely replacement; (ii) Rehabilitation. Second priority towards re-establishing designed or agreed levels of service through the injection of funds as a once off short term program that addresses deferred maintenancerequirements; and (iii) Pk*enzi.ation. Third priority towards enhancing the performanceand increasingthe efficiencyof water systems through investmentin modernizationprograms over time.

Pr6qSUm for Suatained oneratiQns and Maintenance

9. A key component of the project is the identificationand funding of the maintenance, operations and ultimate replacement needs that are necessary on a recurringbasis to ensure that the performanceof systems would be sustained in perpetuity and that agency services are provided in an equitable,reliable - 117 -

Page 3 of 6 and cost effective manner in accordance with program objectives. The water supply, drainage and flood control systems of the state are large and complex and the maintenance and operational requirements to meet the above objective are considerable.

System DasCription

10. Canals. Some 2.9 million ha. of land is irrigated in Haryana, using on average an annual diversion of 16.84 MAF from surface and groundwater sources. The two main canal systems of the Bhakra and the Western Yamuna comprise a total of 12,100 km. of lined and unlined canals, 6,770 bridges, 2,300 regulating and measuring structures, and 11,700 km. of inspection roads. The canal maintenance program takes into account the characteristics of each system including the age, condition and silt loads carried by each system. In the WYC systems the emphasis on maintenance is on silt clearance, head regulators, bridges, and repairs to lining. In the Bhakra system there is more emphasis on bank strengthening and bridges, then silt clearance and lining repairs.

11. nraina. The surface drainage system provides agricultural drainage services and relief from flooding in the farm areas as well as the highly populated rural and urban areas of the state. There are 1331 villages that benefit from the drainage system. Drainage systems service some 23,400 sq. km. through 3,800 km of drains. There are 159 pump stations with a total discharge of 1600 cumecs. The drainage system has not been maintained effectively in the past. Flooding in 1988, 89, 90, 91, and 1993 caused the considerable damage to villages and agriculture. In the 1993 event, if the drainage system had been well maintained all of the village flooding and half of the agricultural loss would have been avoided. Therefore the proposed increase in maintenance expenditure on drainage would have an immediate and lasting effect. The program of maintenance would concentrate on the waterway of drains with 27% of expenditure directed at internal clearance of drains including weed control and desilting. The other areas of emphasis are structures, 15% and operations 7%.

12. Flood Protection and River Training Works. There are a total of 630 km of embankments, 990 spurs and 40 km of pitching, as well as 38 ring bunds protecting villages.

13. Agmentation and niract Trrigation Tabewells. There are 1643 augmentation tubewells that augment canal flows with groundwater. Direct irrigation tubewells provide water to areas that have no surface irrigation supply. Presently there are 720 tubewells in operation.

Project Expenditures

14. The O&M component provides for the following works in the gravity command areas including drainage and flood control:

(i) Canal System maintenance (US$ 113.2 million) including: silt clearance and bank strengthening comprising 47.3 Mm3 of earthwork; (b) lining repairs to some 879,900 m 2; (c) jungle and weed clearance on 88.7 Mm2; (d) maintenance and repairs on 175,800 structures including bridges, regulators, falls, cross drainage, - 118 -

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escapes, ghats,and outlets: and (e) about 192 maintenance activities on pump houses; (ii) Drainage system maintenance (US$ 37.7) including: (a) internal clearance involving 21.5 Nm3 of silt removal; (b) maintenance on 14,345 structures including cross drainage, regulators, bridges, and outfalls; and (c) maintenance activities on pump houses; (iii) River Control Works (US$ 8.9) including: (a) maintenance on a total of 5,487 km of embankments; and (b) maintenance on 5306 structures including studs, spurs, and pitching. (iv) Watercourse maintenance (USS 13.1 million) including: (a) lining repairs and maintenance to 165 km of water course; (b) earthworks on 30 km; and (c) nakkas and culverts on 54 km. Iv) Augmentation tubewells (US$7.4 millions) includes maintenance on groundwater pumping installations.

Peavy Veh leosand Mguipment Purehase

15. The capacity to deliver the O&M program would be increased by the procurement of selected heavy equipment that would improve the productivity and effectiveness of some of the key maintenance activity. The mobility of both canal operations staff as well as construction and maintenance staff would be enhanced with the provision of motor cars, jeeps and motor cycles. The effectiveness of use of both the heavy equipment and the vehicles would be improved by having them fitted with mobile radios. The following vehicles will be purchased: (a) A total of 240 light vehicles and trucks including jeeps (79), cars (11), motor cycles (100), and tipping trucks (50). In all 85 items of heavy equipment would be purchased including road graders (20), tip trucks (50), wheeled tractors fitted with backhoe, front end loader and weed bucket (5). Desilting of drainage and supply canals would be enhanced with the purchase of hydraulic excavators (10).

Prooram Costs in Detail

16. Funding for maintenance for the total program would increase from Rs 740 million allocation in 1993/94 to Rs 955 million in the first year of the project. This level of funding would be maintained in real terms for the life of the project and beyond. Table 1 tracks the actual expenditure on maintenance for 1992-93 and proposed budget for the first year of the project. Additional budget allocation under th- project for both canal and drainage maintenance would result in real increases in the funds available for works. The establishment costs as a percentage of the overall budget reduce significantly and remain at about 1992/93 levels in real terms.

17. Program details showing the physical and financial requirements by sub- activity for maintenance for all services for 1994 - 2000 are shown in Table 3. The O&M program has been drawn up by management unit and by major activities under canals (gravity and lift), drainage canals, river works and flood control. This framework would be the basis on which the program and budgeting and cost accounting systems would be built to allow the managers of the WSUs to track the cost and physical achievement under each maintenance activity. The work activities involved and supervision needs are further detailed below (see paras 22, 23). - 119 -

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syatem Management

18. In addition to the identificationof O&M needs of the systems, the O&M functionwould be strengthenedby enhancingthe management capabilityof HID.

19. operations Management. The development of activities under this program would address the requirementsof:

a. Preparation of specific system based plans for operations and maintenance covering all services provided within each water service unit; b. Enhanced real time management capability for canal operations: c. Improved effectiveness of operations to meet service objectives through the provision of mobility and cormunications to operating staff and emphasis on maintenance of measuring structures; and d. Improved monitoring and reporting.

20. Maintenance Management. The development activities under this component would lead to:

a. Improved planning prioritization and scheduling of maintenance and replacement programs on an annual, near and long term basis through the development of an asset management system to provide a register of current assets employed by the Department in the delivery of services. The data in the register would be updated annually based on field inspections and reports; b. Greater efficiencies in the implementation of maintenance work through the introduction of a maintenance management work order system that would plan and monitor maintenance activities; and C. Upgrading of heavy equipment and training in modern maintenance techniques.

21. Training. Training of staff to support the O&M program would be provided under the project. This would include programs in the following areas:

a. Heavy equipment operator training; b. Water distribution and measurement; c. Construction and maintenance ski_ls; d. Supervisor training; e. Specialized maintenance of electronic, communications, data processing and computer equipment.

22. For the O&M component the supervision of the project would concentrate on the following:

a. Mtenr. Review progress on programming and budgeting aspects of 08M program including the expenditure against budget for the current year, unit cost of maintenance activities, and cost and effectiveness of maintenance methods. Review progress on the implementation of the asset and maintenance management systems and maintenance activity planning and implementation - 120 -

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procedures as well as forward planning processes for replacement of assets. Inspection of the effectiveness of maintenance activity in the field;

b. QRerations. Review progress on the installation of the real time management system for operations. Review system performance of planned versus actual with particular attention to the downstream end of systems, the collection and transmission of operational data and the decision making processes involved. Supervision missions should also assess, by field visit, the effectiveness of operational procedures including water measurement and regulation and should discuss levels of service being achieved with both local staff and representative customers.

c, Water SArvices Units. Assess the progress and effectiveness of the changes in the water services units and the savings brought about by the consolidation of drainage and canal O&M under one management line. Review and discuss with Water services staff the organizational and managements arrangements at Divisional level and in particular the preparation of system specific Plans of Operations and Maintenance.

23. The skills necessary are those of an engineer with direct experience in the planning, programming and budgeting and implementation of O&M programs for large gravity irrigation and drainage systems. The person should also be familiar with modern maintenance and operational management techniques as they relate to the project. The time allocation would be about 15 staff weeks based on two supervision mission of 10 days duration per year for the life of the project.

Projent Covenant

24. Agreements would be reached with GOH that, beginning April 1, 1994, HID would fully budget for the works component as developed from the agreed works program (total works expenditures in current prices) for the following year's O&M expenditures, on an annual basis. The works amount is given in Table 2. ii Operations and Maintenance Costs Haryana Irrigation Department

I ______1992/93 1994195 _Operations and Maintenance Actual Budget CCA in Expenditure Total Length Expenditure Expenditure Expenditure M he. per ha. CCA of Canals in Km. per km. of canal ______RsM______U__ RaMM _s_R 1992/93 1994195 1992/93 1994195

1 ______2.88 ______12105.751_7 ______81 ______

_ Works [ 189.2 39.70 591.2 62.28 65.69 205.28 15,629 48,836 _ Establishment 287.43 60.30 358.1 37.72 99.80 124.34 23,743 29.581

_Total 476.63 100.00 949.3 100.00 165.50 329.62 39.372 78,417

-2 Gf*Wf / iibV~~'<______2.436 8931.22

Works 64.34 25.27 250.3 50.27 7,204 28,025 Establishment 190.32 74.73 247.6 49.73 21 310 27.723

Total 254.66 100.00 497.9 100.00 28,513 55,748

-3 _ _ 0.597 3174.6

Works 24.9 20.43 52.42 32.19 41.71 87.81 7,844 16,513 _ Establishment 97 79.57 110.44 67.81 162.48 184.99 30,556 34.790

Total 121.9 100.00 162.86 100.00 204.19 272.80 38.400 51,303

______~~Total ______Area 3797 _

______Drained i e ______Dr _ Works 42.3 30.72 109.5 50.99 23.405 1807.31 4678.49 11,140 28,839 _ Establishment 95.4 69.28 105.25 49.01 18q. Km.l 4078.05 4498.90 25,125 27.719

= Total 137.7 100.00 214.75 100.00 5883.38 9175.39 1 38.265 56,558

_a- _ -M-

Cornparisonof costsfor 0 and M 1992J93 and 199419)5 - 122 - Annex R Table 2 HARYANAWATER RESOURCES CONSOUDAIRON PROJECT (MROP)

IMPRO\NGOPERATION & MAINTENANCE

TOTALPROJECT COST

A: BASECOSTS Total (RsmiMcron 94/95 95/96 96/97 97/98 98/99 99/00

WORKS 430.30 546.10 546.51 479.33 479.38 477.34 2958.76

ESTABUSH-MENT 462.38 462.43 463.37 463.32 463.19 463.27 2777.96

TOTAL(Base Cost) 892.68 1008.52 1009.88 942k.65 942.58 940.61 5736.72

B: TOTALCOSTS (in current prices)

WORKS 460.42 622.30 660.14 610.84 641A5 670.65 3665.82

ESrABUSHMENT 494.75 526.96 559.71 590A3 619.79 650.88 3442.52

TOTAL(current cost) 955.17 1149.26 1219.85 1201.28 1261.24 1321.54 7108.34

Note:Locl Infationfrom Aprl ?, 1994to March31. 1995Is 7%.and in the foowng yeas 6.5%.6.0%. 5.5%. 5.0%. 5.0% respectively WodcsIn year 94/95and 95/96hdude Invewmenisfor heavymaoitenance equipment and veNles - 123 - Table 3 IUDIA

HARYANAWATER RESOURCES CONSOUDATION PROJECT (WRCP) Statementof Civil WorksRequirement IMPROVINGOPERATION & MAINTENANCE Canalsin WesternYamuna

Unit Quanfity Total

______94/95 95/96 989 97198 98(99 99/00 CIVILWORKS Silt Clearance& Bank strengthening cu.UxIoo 2684 2810 2809 2809 2809 2809 16730 Repairto Lining Sq.M1e0 56.32 56.32 56.32 56.32 56.32 56.32 338 Jungle& Weed Clearance xlool 8818 8821 8818 7175 8818 8818 51268 Head regulators) No. 410 398 358 379 410 420 2375 Cross-regulators) No. 0 Bridges No. 2316 2310 2341 2356 2362 2379 14064 Falls No. 215 215 216 219 220 220 1305 Crossdrainage works No. 145 144 147 148 148 150 882 Escapes No. 8 8 9 9 9 10 53 Ghats No. 1062 1046 1160 1182 1182 1226 6858 Outlets No. 4031 4214 4214 4214 4214 4254 25141 Pumphouses 29 29 29 29 29 29 174

Stement of Civil WorksRequirement IMPROViNGOPERATION & MAINTENANCE Canalsin Bhakra

Unit Quantity Total 94195 95/96 98/97 97/98 98/99 99100 CIVILWORKS SiltClearance & Bank strengthening x Mldooo 3433 3433 3427 3424 3424 3424 20565 Repairto Uning eq Ibod0 91 91 90 90 90 90 542 Jungle & WeedClearance Seqhaxda 6246 6248 6246 6246 6246 6246 37476 Headregulators) No. 406 352 424 424 424 424 2454 Cross-regulators) 0 Bridges No. 2391 2404 2450 2450 2450 2450 14595 Falls No. 345 339 343 343 345 345 2060 Crossdrainage works No. 136 138 140 140 140 140 834 Escapes No. 0 Ghats No. 1838 1829 1838 1838 1838 1838 11019 Outlets No. 6309 62898 6264 6275 6267 6169 94182 Pumphouses No. 3 3 3 3 3 3 18 - 124 - Table 4 INDIA HARYANAWATER RESOURCESCONSOLIDATION PROJECT (WRCP)

Statementof Civil WorksRequirement IMPROVINGOPERATION & MAINTENANCE Drainage

Unit Quantity Total 94195 95/96 96/97 97/98 98199 99/00 CIVILWORKS Intemal Clearance cumx1000 3607 3548 3548 3548 3548 3726 21525 Cross Drainages No. 685 687 688 691 716 691 4158 Regulators No. 12 13 13 13 13 13 77 Bridges No. 1500 1485 1488 1493 1499 1529 8994 Out Falls No. 184 184 184 187 186 187 1112 Pumphouses No. 145 147 147 145 145 145 874 Workshop No. 10 10 10 10 10 10 60 Building

RiverControl Works

Unit | Quantity Total

_ 94/95 95/96 96/97 97/98 98/99 99/00 r ¶VILWORKS Repairto Embankrnents Km. 915.5 912.5 912.5 912.5 912.5 921.5 5487 Studs/Spurs/Pitching No. 882 877 877 877 877 916 5306

Watercourses

Unit Quantfty Total 94/95 95196 96197 97198 98/99 99/00 CIVILWORKS UningRepairs km 27.5 27.5 27.5 27.5 27.5 27.5 165 Earth Work km 5 5 5 5 5 5 30 Nakkas& Culverts km 9 9 9 9 9 9 54 - 125 -

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HARYANA WATER RESOURCES CONSOLTDATION PROJECT

INFORMATION AND COMMUNTCATTONSYSTRMS

Introduntion

1. The main functionalresponsibilities of the Haryana Irrigation Department (HID) includes planning,design and research, construction, management of water services, maintenance, regulation of the water system and administration. To facilitatethe effectivedelivery of these functions, activitiessuch as data hydrology, weather forecasting, water operations, maintenance,asset management unit programming,budgeting accounting and personnelmanagement, need to be integrallylinked to the operation of the organization, thiough an integrated computer based information system. An effective and efficient computer architectural design would be selected to support the distributed concept of processing,and include as its functioning features the hardware, software,connectivity and a communicationfacility net work, which reliably services the needs of a wide area of user groups. Additional responsibilitiessuch as management of water systems for power generation,municipal and industrialneeds, drainage and flood control, etc. also require a dependableand widespreadcommunication network to provide reliable information.

2. To improve institutionaland operationalefficiency, HID is consolidatingits present and future activitiesinto a limited number of functionalareas, allowing for orderly planning,budgeting and scheduling of all its programs. Radical improvementswould be achieved in the functioning of the newly establishedunits/offices under HID through the introductionof communicationand computer facilitieswhich link the Department'srelevant activities. The informationand communicationsystem would facilitate conductingbaseline surveys for monitoringand evaluationactivities.

Facilities and Eauipment - Present Status

3. Information Systems. Currently, HID has the following hardware computers: one AT/286 at HID office Mani Majra; one AT/386 at HID office Chandigarh;one AT/386 at Kurushetra. In addition,the Department has under approval and processing,one PC 386 at HID Karnal, one PC 386 at HID Kurushetra,one PC 386 at Hisar--EISA486 with 16 mb RAM, Plotter, etc., under UNIX, 24 IntelligentTerminals and 10 modems. The MITC present systems include one PC XT, one UNIX based 486 with 8 terminals,and one AT/386 with plotter and printer at Karnal. While considerabledata has been collected in the various aspects of HID's work (many of which are on Word Star, Lotus, spread sheet or Xbase data format in small files), the initiativeis basically a patchwork lacking a systems approach that provides little connectivityor linkage between files or subjects. - 126 -

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4. C laigatimna. The communicationsbetween the field office and the Headquartersin relayingdata of gauge and dischargeobservations in the irrigationchannels are carried out through: (a) 91 canal telegraphoffices spread over regulationpoints and field offices all over the state: (b) canal telephone lines maintained by P&T Department;and (c) wireless systems connecting importantfield stations through HF and VHP networks. The existing single-wireearth-return telephone system is several decades old, and is not a reliable mode of communication,either between control points or with the state Headquartersin Chandigarh. There are now 52 wireless stations on various VHF frequencieswith varied time and ranges, and 12 HF stations, at important control and comnunicationpoints. The performanceof VHF and HF wireless system are also subject to weather conditions. The objectiveof strengtheningand upgrading the communicationsystem is to fulfill the communicationrequirement of both the State Headquartersand field offices, and to integratethe circle, District and Field offices into a state-wide network. An improved communicationsystem will also connect important flood/drainagemonitoring points of the Departmentand provide links fror importantregulation headworks to the state headquarters.

Pr2nosed Project Activities

5. TnformationSystea. To supportHID's operationalactivities, an informationsystem would be established with analytical and modeling capacity and a communications network, that would link with the computer installation. The information system would cover data needs on hydrology, meteorology, land cover, land use, demography,cadastral and geology:

(i) Lnd over. Vegetationand soils data would be created through field surveys. These survey data bases would then be used as a sampling frameworkfrom which informationon vegetationand soil would be extraditedthrough remote sensed imagery. Biomass and primary productivitywould be derived from such databases, using appropriate models.

(Li) Landaus data would includepatterns of agriculturaldevelopment, urban, residentialand recreationalenclaves, structured, transportation network, utilities,etc., with use of land being derived from various sources such as regionalgovernment agencies, field surveys, aerial and satellitedata or any other reliable data source.

(iii) M4eeology. Data on rainfall,temperature pressure, humidity and air quality would be derived from surface and/or space borne instruments and mathematicallyinterpretated to derive estimatedvalues where measurementsare unavailable.

(iv) Pgemragphin. Informationon characteristicsof people, occupation, etc., would be derived from survey data through periodic census of the population. These will be typicallyrecorded as statistical summaries,and aggregatedas necessary. - 127 -

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(v) r.adaat-l. This data base would indicate property ownership; information about land parcels, its boundaries and characteristic using conventional surveying practices and compiled in analog, or digital map format, as well as real estate documents.

(vi) gr'ng1Qiea1. Lithology of formation and fossil records along with information or structures would be measured at a number of locations and patterns in these data would then be inferred from ancillary data.

(vii) HydrQlogical data would include flow rates within the Bhakra and Yamuna river basin systems, drainage patterns, and depth of groundwater based on correlative information.

(viii) a8ats data will contain a register of data of current assets existing within the department including structures and equipment and its use by the department in the effective delivery of services. This data would be updated annually based on field inspection and periodic reports.

6. AnAlytical and Modelling Capabinlty of rata. An essential goal of information systems and models would be to convert data into information and knowledge through measurements and observations, field surveys etc., which would then be used for evaluating options, as a step towards decision making. The areas in which such analytical and modelling capability would be used is program tracking, cost accounting, water accounting, cost allocation, flood routing, flood forecasting, water routing, design analysis, economic modelling, etc. The purpose of water accounting would be to track water supplied and deliveries, track entitlements and water use, maintain water account balances, collect water revenues, report water use provide historical records and water customer services. Analytical and modelling techniques would be used to assess flood forecasting, estimates, relay broadcasts on flood warnings and water routing information. Data would also be modelled to derive economic value and optimum uses of water.

7. Similarly, the cost allocation and recovery system would allocate state water project costs to various user groups and components under the project, through data entry and storage of water and cost files, processing of water allocations and their allocated costs and repayments.

8. rnmini4at-ionst. The communication technology would be a blend and reinforcement of conventional systems, with upgrade of technology that would provide a greater coverage on regional and subregional basis. A state-wide system of VHF, SHF and EHF bands, generically known as microwaves would be established, covering a range of frequencies, and wavelengths. In addition, the radio network would be strengthened and upgraded, by connecting a modem to the telephone line, when used as telemetry lines for hydrological data collection.

9. The computer capabilities of HID, both hardware and software, would be vastly strengthened to include the installation of a mainframe central - 128 -

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INDIA

HARYNA WATER RESOtRCES COSSOLTDATION PROJECT

COST ALLOCATION, RECOVERY AND PRO0g FT

1. The Haryana irrigation Department (HID) provides water-related services within the state of Haryana and the Union Territory of Delhi. These services include: water .nu22lie for irrigation, urban domestic users, rural village water supplies, industry, power stations, commercial users, government departments (fisheries, forestry, agriculture, horticulture), supplies to other states, including Delhi Union Territory; drainage services to farmers, rural and urban communities (including disposal of effluents); and f1loo control along major rivers and drainage ways within the state and Union Territory.

2. At present, cost recovery is either significantly less than the cost of providing the service, or is indirectly made by one department (e.g. municipal water rates for households) without directly accounted payment to HID for the service provided.

3. GOH proposes to implement a general policy to recover the costs of each of the services identified above from the beneficiaries, with the specific exception of backward and drought-affected areas in the south of the state where provision of water is presently seen as a social necessity to stabilize the livelihood of the existing population in these areas, indirectly avoiding the costs of temporary and permanent migrations.

Basis for Coqt- Allocati-n

4. A cost recovery plan was developed during the appraisal process of the Haryana Water Resources Consolidation Project, in order to allocate as precisely as possible the cost of providing each service to each user/ beneficiary group. In some cases this allocation is clear and direct--for example operation and maintenance of the supply channel to Delhi serves only one purpose and one user. In other c. - activities are common to a number of users, such as major canals serving mans .rmers as well as municipalities, or the service provided to one area indirectly benefits another area--for example where drainage facilities alleviate existing adverse conditions in one area and prevent such problems arising in an adjoining area. Taking note of these factors, the costs incurred by HID were allocated appropriately among all services provided.

5. The second step was to quantify the service, either in terms of the annual volume of water provided to each class of beneficiary, or the area benefited by drainage or flood control services.

6. These two factors (cost of service, and extent of service) provide an indication of the unit cost of the service. The final step in defining the allocation of costs incorporated the "quality" of the service provided, as - 129 -

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well as considerationsof ability to pay. The primary factor in this assessmentis reliability: during periods of severe scarcity,priority services are provided to drinking water facilities,industrial demands, and power stations--requiringreductions and diversionsof irrigationsupplies. Further, during the annual periods of canal closure (for irrigation)the system is run periodicallyat low levels to maintain the needs of non-agriculturalusers.

7. Bearing these factors in mind, GOH proposes to introducethe following rate increasesover the life of the project, to generate the associated (anticipated)revenues:

Fact-or Revenuea

Agriculture/Drainage 2 Rs 571 M Drinking water 3 Rs 50 M Bulk water for commercialpurposes 2 Rs 20 r- Industrialuse and power stations 15 Rs 868 M Deliveriesto Forestry Dept_ 2 Rs 50

8. These rates imply a doubling in real terms of irrigationcharges, minor increasesin other rates, except industry,where capacity to pay and presently very low charges result in an increaseof about fifteen-foldin real terms.. When fully introducedin the final year of the project, the operationsof the HID would be fully financed by user charges. Adjustments,as further informationrelating to operatingcosts becomes available,will be made, particularly to the extent that farmers undertake operation and maintenance (O&M)of facilities below the distributarylevel. Such transferenceof O&M to user groups is expected to reduce the cost of irrigation services by approximately 30%; however, HID's revenue receipts would also decrease by the corresponding reduction in rates charged to users who maintain their facilities themselves.

Sxhndien

9. The above schedule of rates would cover the operationalcosts of the major HID facilitiesin the state, serving an area of some 3 million ha. The areas in the south of the state, which are served by pumping stations and irrigate some 50,000 ha as well as providingvillage water supply services would continue to be financed through subsidies,which amount at present to Rs 500 million/year.

Callntipn Proe~duras

10. Irrigationcharges are collectedby the Revenue Department,which works well--collectionsare about 90% of billings. As systems are turned over to farmers for operation,water charges would be volumetricand based on measured deliveriesat -he turnover point. Until then, charges will continue to be - 130 -

Page 3 of 3 based on crops and areas irrigated, which provides a reasonable proxy for the quantity (and to a degree, the quality) of the service provided.

11. Revenues from other government-administered services (municipal water supply, flood control and drainage) would be collected by the relevant Departments, and the HID reimbursed for the service provided. Supplies to commercial and industrial users would be billed directly by HID.

12. Water charges for irrigation would be progressively raised from present levels (which yield about Rs. 150 million/year) to ultimately cover the shortfall in revenue between receipts from the above charges, and the cost of providing irrigation services. The real increase in water charges would be approximately 150% on the above basis, but would of course be dependent upon receipts from other sources being consistent with the assumptions made above. Further, the irrigation water rate would depend on the cost of O&M, which may be substantially reduced by the proposal to turn over O&M responsibilities to farmers below the distributary level.

13. Revenues in interim years are computed assuming a continuous process of increasing charges, as well as the impact of inflation. Credit funds would cover the balance of O&M costs in the first years of the credit, declining as other receipts increase. At present, as a result of the initial cost allocation exercise carried out by HID, it is projected that the following revenues would be realized towards O&M expenditures: tlser Revenues for Punds fgr O&M

Year: AL J95/ .2iLZ 2La/ 98i/ 99/00 ToaJl

Industry & Po-aer 25 300 400 500 635 868 2728 Drinking Water 10 15 21 30 40 50 166 Bulk Supplies 5 7 10 14 17 20 73 Irrigation Charges 150 165 182 200 220 242 1159 Drainage cess 0 150 175 225 280 329 1159

Total Revenues 190 637 788 969 1192 1509 5285

14. The actual quantities that would be realized for each year would depend on the many factors that have been designed in the allocation model. Attachment 1 provides a discussion of the cost allocation model that would be updated on a continuous basis by HID to determine the cost recovery from different users.

15. In order to ensure that full O&M cost recovery is reached by the last year of the project period to finance fully all O&M activities performed by HID, GOH would phase in rate increases to beneficiaries as follows: 30% of O&M cost by April l, 1995; 50% of O&M cost by April 1, 1996: 60% of O&M cost by April 1, 1997; 80% of O&M cost by April 1, 1998; and 100% of O&M cost by April 1, 1999. The provision of services to the backward and drought affected areas in the south of the state would not be subject to the above conditions. - 131 -

AknniazlIA

Page 1 of 4

INDTA

CoST RECOVERY MOOEL

PrnLA491m1and A anpA A11ncat4nw EveteA1

1. A cost recoverymodel has been developed in preparationof the Haryana Water ResourcesConsolidation Project (WRCP)to demonstratethe principlesof allocatingcosts to different servicesand users. The model is a spreadsheet calculation that has been set up in certain logical steps to systematically develop the data necessaryto allocate costs and calculate recovery rates. A sample of the output from the model ia shown in Appendix A. The spreadsheet consists of a series of tables. A discussion of each table is as follows:

2. Tabla 1. In order tc calculate rates it is necessaryto have a measurementof service. These quantitiesshould be in accordancewith the cost recovery policies of GOH. Table I sets forth the applicable quantities that have been used for this example. The costs are allocated on a "use of facilities" basis. This use for the water service will be measured on the acre-feet volume that is allocated from each facility to the applicable service category. The water quantities are shown in Table 1 for the various services. Other quantities should be included as appropriate. Drainage and other services may be based on acreage benefittedand the applicationacreage would be entered.

3. 2ab1me2. Basic data must be utilized in the cost allocation. The sample shown is for the year 1993-94. The data is the budget breakdown in the form that is availablefrom the HID. For the water supply and distribution function the costs are currentlybroken down into the Bhakra and Western Yamuna Command (WYC) Canal systems with a furtherbreakdown within the NYC system between flow systems and lift commands. No further breakdown is available for cattle ponds or forestry or into the bulk water supply and distribution category. The drainage category has a total cost for all services. No separate breakdown is given for the other services of road maintenance, groundwater recharge or the Delhi or Rajasthan deliveries. This table is the basic factualdata that is availablefrom the HID. It can be seen that it would be useful for the accounting function to be able to allocate costs directly in this table without having to go through a cost allocationprocedure. As the HID is able costs should be broken down further to be inserted directly into this table as basic data.

4. ZahlALA. Table 3 is the allocationof the basic cost data from Table cRM-2 for the non-plan expense category only. As it becomes necessary for the rates to recover plan expenditures as well as debt, new investment and emergencyreserves these would also have to similarlyallocated. The water supply function was allocated based on the water quantities from Table 1. - 132 -

Page 2 of 4

Costs that have already been allocatedsuch as the lift command costs under the NYC system are not allocatedbut assigned to their service. Unallocated costs are proportionedto their various servicesbased on water quality.

5. Zable . Table 4 is the basic data available from the HMITC. It is in a slight different format than the HID because of its different functions and the way their budgets are categorized. Expenses for the watercourse O&M and the watercourse lining functions and the augmentation tubewells and direct tubewells function of the HMITC are given. Again it would be useful to have direct budget allocation of the various expenses to the service categories. This should be incorporated into the model as it is available in the future.

6. Xabla5. Table 5 is the cost allocation for the Haryana State Minor Irrigation Tubewell Corporation (HSMITC). This was also done for only the non-plan expenses and for the augmentation tubewells. Expenses for the direct tubewells are recovered directly from the users therefore have not been included in this calculation. As necessary in the future these other costs should be included into the allocation. Just as for the HID, where costs have already been allocated they have not been proportioned to other services. This is the case for the WYC lift commands under watercourse O&M. The entire non-plan cost for the augmentation tubewells has been allocated to the WYC lift command function. If the augmentation tubewells are used for other services the expenses should be allocated accordingly.

7. Zahl 6i. The basic cost allocations are performed in Tables 3 and 5. Table 6 is the rate calculation function of the model. Various provisions have been made to weigh and adjust costs to account for the priority of service for the urban and industrial demands. The ability has also been given to model possible changes such as a reduction in the establishment expenditures and what impact that would have on rates. Total expenditures are obtained from a sum of the allocated costs from Tables 3 and 5. Rates can be calculated based on the various rate factors and establishment reductions. Provision has also been made to account for State contributions that would be made into the service categories to reduce or subsidize rates.

8. BreakdnDn into subsyatem Segmnts. It is desirable to break down the services and cost allocations into subsystems that would facilitate the subsequent turnover of the lower system segments to customer-owned entities. This presents certain problems that need to be discussed. It is desirable to begin with a breakdown of the water supply function into three delivery categories as follows: i) watercourses, ii) minors and subminors and iii) the remainder of the delivery system from distributaries and larger. Unlined watercourses are maintained by the farmers at the current time. However, the HSMITC is performing maintenance functions on cortain of the water courses that have been lined and herefore it is necessary to provide for this category. - 133 -

Annox I httachm=nt I Page 3 of 4

9. Services to urban, rural, industry, power plants, cattle ponds, and other non-irrigation services need to be accounted for in this breakdown so that if a lower system is taken over by local interests responsibility for these other services are also assumed.

10. In order to adequately account for the various services and differences with the smaller and small systems it will be necessary to perform a cost analysis using the model for each of the delivery categories. A separate cost allocation and rate could thus be determined for each category. If a category is proposed for takeover by a user group the cost both in terms of total allocated cost nd rates would be available.

11. The watercourse component calculation would have its own separate calculations on Tables 1 through 6. Costs would have to be determined by the HID and HSMITC for the watercourses and assigned to the appropriate expense and service categories. Costs would be allocated on a "use-of-facility" basis as in the example but with the appropriate quantities that are delivered through the watercourses. Generally deliveries to urban and rural water systems, industry, cattle ponds and other services have their own watercourse and are not a part of separate irrigation watercourses. They would be accounted for in the watercourse allocation as appropriate.

12. Minors and subminors deliver water to watercourses for urban, rural, industry, cattle ponds and other services as well as for irrigation. The turning over of this system to a local group would mean that the local group would have to continue these services. The rate for delivery of water to urban and other uses may be different than for irrigation delivery. The bulk rate that would be charged by the HID at the head of the minor that is turned over would be a combination of these different rates based on the various volumes that are delivered. Urban and industrial uses may be charged a premium because of the priority that they get in periods that irrigation delivery is not being made. This service would have to be continued by the local users group. Calculation of the costs separately would enable these costs to be determined.

13. Costs for distributaries and larger facilities would also be allocated based on the costs for their services and based on the water quantities that are delivered. It is likely that the deliveries to Delhi and Rajasthan would be a part of this category only. Likewise most of the larger urban deliveries and industries would only be in these larger facilities. This will facilitate a more accurate rate that should be charged for these components. Expenditures for the distributaries and larger must be made and provided for in the model run. These costs would be separate from the other costs and the sum of the computer runs would be the total.

14. Flood water protection is a service provided by HID. Existing flood protection works have been constructed and were paid for out of funds available to HID. An example of an allocation method for flood water would be to determine the total annual cost for the flood protection works including - 134 -

Atnnex 10

Page 4 of 4 the repayment of the capital cost to construct the works and the annual cost of operation and maintenance. This total annual cost would be divided by the benefitted area usually on an acreage basis. The total coat per acre then to be assessed as an assessment to the land would be the total annual cost divided by the total acres benefitted. It would be possible for the benefitted areas to provide in kind contributions which would reduce the capital costs of the project and would therefore reduce their annual assessments.

15. Storm water disposal should be repaid by an area benefitted basis. An example of the cost of the master plan with a capital cost of 4,310 million rupees benefitting an area of approximately 17,207 square kilometers (4.3 million acres) has been analyzed. An example of this calculation is shown in the Cost Recovery Report (available in project files), determining annual cost for the services provided and divides it by the benefit area to come up with an assessed area.

16. Subsurface agricultural drainage is a future problem for significant areas within HID. One method of allocating subsurface drainage costs is to allocate costs for the drained land at a rate three times that of the undrained land. This is based on the assumption that an area benefits because adjacent properties are drained even through its particular property is not drained. Operations costs in this case would be repaid by the benefitted lands.

17. Wastewater discharge is another service provided by HID. There are costs that can be identified to these services including treatment schemes so that the discharge of wastewater is not a detriment to HID canals. The actual costs for the services should be determined and should be allocated to the beneficiaries being the urban and/or industrial areas that discharge the wastewaters. This would likely be in the form of assessments or user fees to the beneficiaries. 011Apt93,CRPr50CtEL.W21

TAfILE ClnM I

W_is t Alltrulhon Ared (Acre-tuut) Irin p lo<

______[e^¢1._w_'._ lihoha. _ . I Tolal_s_ SERVICECATEGORIES 2 3 4

I StAkl (whc.Iasale)waii aLa ly ar3 i trMbutaon ______A Urban (Municipsititib) 42,00_ 226.0(0) 268,000 _B RFural(V,ilagersl f4,000 2()2.000 336.000f C Incdustry 96.000 75,o00 171.000 0 Power Plants 0 130,000 130,000 E Fishstles _____ 0O F Horticuluref _ 0 G Const uctioniMisc 0 M. Subtotal 192.000 713.000 905.000 11 Agfjcultural WIet Suppl and Distr.butron _ A Itt1gaton I ShakuaCanet_ a Flow Systems 4,594.000 4.594,000 2,72B,00o b Litt Systems 96.000 __ _ 9fi000 56,000 c Litt Corrimands 68,000 58,000 34,000

d Subtotal 4.748,000 _ 4.748,000 2,81,t000 2 Yestern Jamuna Caknal a Flow Systems 3.673.00373000 1,872.00 b Lilt Sytlfms I WOt 1t0t88,000 1tI O,oK c Lih Comrnrandt 208,0A)O 208,000 208.01)w d Subtotal 4_069,000 4.089,000 2,159,O00 tn E Cattb Ponds 53.*XJ 9s.000o 148,000 C Forstfr 0 D S_blwalel _ 4 titO(i41 4.Iti4U 6.t85.000 5006Ofi) I i-Itl Subtotal 4,'493.006 4.871t t)O 9.870,000 Ill Drainage ___ A FloodPotcection B. Stormwater C SubsurfaceAgriculture Drainage D Wastewater Disposal _ E. Subtotal IV. OtherServices A RoadMuintenance B. Groundwater Recharge

C. Delivey to Delhi Union Terntory 335,000 335,000 _ __ D. Delivety to State of Ralasthanr E Subtotal __t +11.+ill. tlV. Total 49930O0 5212,00 10205000t 01-Apt-93,CAMODEL.WO1

7AfLIE CAM-2 I IAI4YANA110i4tIAl iON D)IPARTMItNT (Rs in lacs) I f N", it11ORMATION (1993-94l) E£f i DiTuhE N(ONt i AN Pt AN Now Emergency Total Tolal Annual _ C-A(EGORIES C

it Agricultural Water Supply and Dimr,bul,c,n ___ _ _ A lrrigaiion _ I Shakla Canal

a Flow Sybtams ___ . _...... b Litt Systems ______c Lih Commands d Subtotal 141? 00 107000 _ 24a2.00 2482 00 t 2 Western Jamuna Canal w0 _ a Flow Systems 284 75 171100 _ _ _ t_ h_ Lih Systsms ______c LsttCommands 4 7'tO2 O 00 d.Subtotal ______07100 _ _ __8 _ _ !7800 678600 B CaltictPonds ' Forery ______, O 9 erlotbi (A4t$i i,r :/t81 0O 6542 00 3tK)2 00 2A4 00 .8906 00 9268 00 t li sruoih tbt t.4it to 'fli1 4JO 5%4? 0 :1113200 264 00 0 00 000 18006 00 9268 00 tl Dfainage - A. Flood Protection P Stormrwate_ C Subsurface Agriculture Drainage _ D Wastewater Disposal E Subtotal 210 00 0.4F 887 60 1098 00 210 00 IV Other Services A Road Maintenance B Groundwater Recharge ______3 C Delivery to DelhiUnion Tntsur _ ____t___ o Derlivry to Stial o1 Rataslh&n E Subtotal IlU lkl.tIV Total 6.,or) 278100 554240 4710_60 2l400 000 20004 947800 01-Apr-93.CRAODEL WOl

lAftl L l f-M 3 iAfYANA INtVI(AI IO('NDEPADI Mf NT (. j;I Al.t Al.AIICN (It- inl.1ru NON PLAN XPEt'JCJTIJ$/E CoJiS _____ Esta&blisbhment _..CATEGORIE - S 13.akta wi_ Total Tot Tolal SEfEViCECATEOES 14 1 17 18 19 20 M.1i'-=wr.oI=SatO) watel suIpply Id dtrIb n ___- I A Unban (Municipaltiest) I-11 1h82 35 4 2?2 9 00 74.19 83 19 107 42 B RA.ral ivellages) 15 * -1tt 301 _tt -15? 025th 104.1b 134.83 C industry 27 15 4 10 312 5 20 57 2462 45 19 76.44 D Poiier Plants 0 00 7 10t 7 10 0.00 42.680 42.68 49.78 E Fsther,es 0_(ol00 o000 _ 000 00 0.00o oo 0o00 F Hcticuiurte _; 00_0_ 000 0.00 000 00 0 00 ( ConstructionJfAisc o0 0r 0 00 0 00 00 0.00 0.00 rt Sublotal 54 30 38 95 9.325 41.15 234 06 275.21 368.46 itAgtricultutal Waler Supplyand 0,5trbutl-on A. ittigation _ _ I BhakraCanal _ a Flow System6 1299 16 1299 16 984 49 984 49 2283.86 b Lift Systems 27 15 27 15 2057 _ 20.57 47.72 c LiftCo,nmands 1640 1640 12 43 12 43 28.83 a Sukiotal 1t4272 1342 72 107 .50 _ 101750 2360.21 2 Western JarnunaCanal ______.__ a Fiow Sy1tems __ _ . 6 _200 _ t205 78 1205.70 1406 44 r, Lillsem s _- ___ . i 27 _tO 27 61.72 7271.99 c Loh Commands _ 481101Of 401o 6tJi 211 ffO2ti 4t69 90 d SubWtal __012 55 5012 55 _ 13357 1335.77 6340.33 o Cattle Ponds 14 99 5 19 20 1 11.38 3119 42 54 62.72 fctr.siyF __ _ _ o _ 300000 0 0.00 0.00 W Suwtwtal 1357 70 5017 74 637545 1028.85 1366 96 239582 8771 26 i-ri Subtotal 1412CO 505670 646 70 107000 1601 03 2671.03 913972 * ilI Orainage - - - -- A Flood Prolection _ _- 8 Sbormwate _ C. Subsurface Agricuslure ,3rainage __ D wastewater Disposeg _. __ | - E Subtotal IV Other Services A Road Maintenance 3 Groundwaler Recharge .. . - C. Deltvty to Delhi Unton Tertiot y 0 00 18 30 18 30 0.00 109.97 0997 12828 C Delivary to Stale of Ra!aslhan __ E S.btotal Total : 42ti 00+IV000 7t 7 00 00c 14 - 0F- -A8 0 - 71- t 00 27810-- 926800 Apf4s.CRaOCOELfwao

IA.E CSM-4 t tAPYANAMINORt IRRIGATION ANM WE3iEWELLCORPORATION FXPENJtit.INFOlMATIOt 41993-04) IR* in fact. kwh kaInes) AIGbMFNTATIONnTUEWELLS I tONPt AN 1' All NON-Pt-AN

tEJC.ATE(aC.RlC (.a*le (alali (.ua9ata I glob CWo,ta_ f Istab kWh Dbt Inv*.l o.pEcf FltAs pn Eapn SERViCE CATEF.OhRIES 2- 2e 24 21 24r 27 28 20 30 31 82 81 Sulk (w'hof*satlSjwt*t supplyard dstadon ______AUreban lMuotunlipeblt) - - 8 Rurat (VIlhoea) _| C industr ,y. o Power Plants

E Fishe.t. - F ornhcultiuse _ G Con ztruelion#M sc______---- N Subtotal aAgrlcuturl WatetSupply and Dtelntjtron - _ A. bitiong__ 1. b'hek, Ctn.l n Flow Systerm. __ - -- t 0.00 b ti Sytamr_s 000 000 cLittCommtannds o - -t ___ _ _ d Subtotl 141 7e 1327 338 , 1tt20t 2t70C a YM..t."ismura cl ,_ __ ._ _0 a flow SysternA 34 lB 480 122 on--o U0t t tz th Syot*m eLrit Commands 20 _ I 384 07 S140 11tA01 40f 64 e5 70 tS4701 9t00 d Subtlolsi 54 __20 33 i 6t414 I 10°t 4C0 04 t 7f 2010.91 9St0t b CatllPonds C Fomeiry ______. t. Sjbtctal lbs lt id200 55. 514 9 t160t 400 04 0 e5 78 389201 11S3 91 elI Siswtc.IaI It,s ai( 2200 557 5149 11801 400 04 O 65 76 S8t20t 1S15t Os il Dainage A. Flood Prolecin ______a Stomwatotr

C. SubeudaceAgtdcullure Drasnotg _ _ - - - - 0 Waata,ater Disposal ______- - - E Subtotal V. O%UU Se_ices A. Road Mainunte b Gtoundwetet RActtiug* _ _ _ _ C, Dlivtwy to Dalh Union ttaop _ _ __ -y - D0lo tYty Stal ol ReAlsthan - - - - I_ E Sub rotai_5 11 0It *tIV Tetal 6

45004 11546 85 6 a 86 TO7 707-42 704 O1-Apr.93.CAMODEL.WQI

TAB3LECHiM-5 I IAIIYAtJAMINoII I II"IiGA ION ANI W11:WflL CORPORATION (:(ki( AtIOCAtIIN (Np9*394W (Rs in lacs, kwh in Iacs) Al XWMENTATIONT;EWEl S _ Ulne)PLAN NON*PLAN EXP V40ITufE vial xcurbe O&M O0 M New ICATEGORIES -;7 Costs EataI costs Estab. kwh Debt Invest. Doprec. Rcs Total SEr VICE CATEGORIES 34 35 36 37 38 39 40 41 42 43 Bulk(wholesale) waler supply and distribution __ __ A.Urban (Municipalities) __ _ B.Rural (Vtlages) _ | C Industry D. Power Plants

E F oshwiys _ __ F Hortscullur3 . 2 _ _ | G. . Construction s 2s__ _ H SubtotaI I Agircullural WaterSuppiy and Dl-striution_ ._ A Irrigatton_ 1 sta anaCanal a Flow Systeams 74 13 209496 b LifSymsb U3 2 I 4.39 a Lit Commrands 2 __1 t 2_ 0 3, 3 d Subtotal 72 66 14 27 010 0600 40000 00 0 00 0600 0700 217.00 _*2 Y/6stsrnJatnuna Canal a Fic-v Sysbtnms __ __ 2 | 4l4A70 104 72 361 07 57 77 o ttO 58 67 68 60 804.03t t, LthiSY1t6m sn ft 2t{ 2 t ts o-,0oo0 3 oo 3 c. Lift Cotnrnnendai 51 4t 15 io IjI b ii . __3 20 45 __ _1 o 3 32 3 0B 73 73 B C.tid Sublolal P______._2 51S4 90 _116.01 ._ 4000 ___ 64)oO ._ _ Ot! 65 00 76 00 9118.9t B Catts Pcrvda_ C Forestry D SuCtoial 19$ 156 14 90 11601 400 64 0 65 76 113591 -i! Subtotal 195 105 51490 11601 400 64 0 65 76 113591 ilI Orainage _ _ A Flood Protection 8. Stormwater C. SubsurfaceAgricultu: Drainage 0. Wastawater Disposal ______. _ . . . _ _ _ E. Subtotal ~ ~ -1t . . _ . _ rEI

OtherOV Services _. ______A.Road Maintenance I1 ___ __ .___ B Groundwaet Recharge_ C. DOtiveryto D*lhi UnionTo,t itoiy ______D. Delivery to Slais of Rajaslhan _ _ E. Suototal vil till. +IV Total - - - Os-Ap.4S3.CRMODEL-WOI

TABLECRM*6 rtA It (,A1 C.t.t Al ION

______fiMla- Tut Ant SZiou *?ti Et1ab _A le er -- si Tota cufn i Rate I E tiI,ITt,f(asiaeitdy )1%il t- span Canit 1`vlot fladluct Uinti incomes Revenue ______- (A. It (i(j~lJl ' Pat Unit its I'ch *(P!~!m.to) . 4"%?-.. {'Flo 49 LaCs) f a t!ac) '.EKA'JiE WAC(36AFUI' .44 ' 46 41 411 4*J b0 51 52 53 I 6.1f. (ov4.0.46610)WONt, Surpply aridi'i.#liilulicA ______A UrtbanItAunicipotlites) ____ 1,94'i,610 600 cuilt 10/ 42 _ 2 10 199 70 199 70 3 BaFRural (Villages) 24:19)60 6000 ci It 1:348'1 1 5 12533 125 33 3 C lndasity 2.19/'.504 2500 cul-t 76 44 4 10 284 22 284 22 5 D. Pow., Plants 2.265.120 2500 culft 49 70 ___ 4 8 ¶85 09 185.09 5 E Fisheries 0 000 _____ F Hocnaculiuge 0 _ _ 00 _____ G3 Construclion/Misc 0 ___ 0 00 ______Ii Sublotal 368)46 0 00 794 35 79435 ;iAgutcultusal V/Moa,Supply. an-d Dikilbullon______

I BI.akts Cbnal aFlow SYst6rns 2.316.692 Cs-dnv 24)3 62 ____ 100 2317909 2317909 33 b Litt aysloma 48.4i1I Cb-(. 52 11 O5 so__5 24 22 24 22 17 c Lift Commands 29.249 ce da 31 48 ___ I- tOO 29 27 29 27 33 di SuAC4aI6 2.34.fl cud~Csa..SJ 77 21 000 2371 48 2371 48 _____ 2 WebstlsinJamnufsi,Canal ______a Flow Systems 1.1152.244 CSeday 221047 1Il 2106470 2064 79 300 C. LtilSpiotoms 9<4.1306 cs-day. _113.4_ __ 0 5 _55 52 59 52 59 Is c LAhCommands I 64.892 cs day_446 _ 1 __ 43511 4595 44 4595.44 30 * Sumlotel 2 G!51.942 LS sd~ 126? 24 0 00 6702 81 8702 St B Cattle Ponds ?4. 634 Cs stay. 87 78 58D31 58 31 C Fe esitryj 000______&S.woolat _ _ _ _ 4 '.jgb& . o.iy r(iJ)0 1/ o 9152 60 1)13260 tIl S.~~~~~~t.loial ~~~~~ 4 i,91,6? i.A Jay li)?/. E1 Ii (kl 9926 4 9926 04

A_Flood_Ptc.tction ______B SIormwletro

C Subsurltac.Agntcultute 0:ainarj _____ D_Waslrawatee_Disposal______E S.btcotal -

C. 066%fivy tc. Statb oli Ab istnar. .. 8 7 7 469 ES~olc.al V1'1??1 liOnX 476 97 478907 -vsl-till IlVTotai '~ 14, ?4'1 *4l 040'l ill (xi( 10403 91 10403 91 - 141 -

AnnAx~ Cab=gr.2 Page 1 of 2

INDIA

HARYANA WATER RESOURCES CONSOLQDATION PROJCT

COST ALLOCAMION EXERCISE - EQOTNOTES

Column 1: Water allocation and other service quantities for the Bhakra System allocated to service categories.

Column 2: Water allocation and other service quantities for the WJC System allocated to service categories.

Column 3: Total of Columns 1 and 2.

Column 4: Area irrigated for the various irrigation service categories.

Column 5 through 8: Non-plan and plan costs for HID. These are the raw budget values.

Column 9: Debt payments.

Column 10: Money spent for new investment.

Column 11: Money allocated for emergency reserve.

Column 12: Sum of Columns 5 through 11.

Column 13: Sum of non-plan expenditures, Columns S and 6.

Column 14 through 16: Allocation of non-plan costs based on the allocation quantities from columns 1 through 3.

Column 17 through 19: Allocation of non-plan expenditures based on the allocation quantities from Columns 1 through 3.

Column 20: Sum of Columns 1 through 3.

Columns 21 through 24: Non-plan and plan costs for the watercourse and lining function of HMITC. These are the raw budget values.

Columns 25 through 31: Raw budget values for the augmentation tubewell category and direct tubewell values shown separately.

Column 32: Sum of columns 21 through 26 and 28 through 31. - 142 -

m.nt- 2 Page 2 of 2

Column 33: Non-plan costs. Sum of Columns 21, 22, 25, 26 and 28 through 30.

Column 34 through 42: Allocationof non-plan costs based on the allocationquantities from Columns 1 through 3.

Column 43: Sum of Columns 34 through 42.

Column 44: Total quantitiesin Column 3 convertedto the units of Column 45.

Column 45: Units for the total quantity in Column 44, the rate per unit in Column 50 and the current rates in Column 53.

Column 46: Sum of Columns 20 and 43.

Column 47: State contributionor other revenue source to the indicated service category. Other sources could include assessmentsor standby charges.

Column 48: Rate factor used to indicate the relationshipof one rate to another.

Column 49: Establishmentreduction. Used to model the calculatedrates it establishment is reduced by the indicated percentage. Establishment is reduced from the sum of Columns 19, 35 and 37. This sum is shown in hidden Column 53b.

Column 50: Calculationof the rate per unit. Column 46 divided by Column 44 adjustedby the rate factors in Column 48 and less the establishmentreduction (Column53b times Column 49). The values are also adjusted to make the sums in Columns 46 and 52 equal.

Column 51: Column 50 times Column 44.

Column 52: Column 47 plus Column 51.

Column 53: Current rates in units of Column 45.

Column 53a (hidden): Column 46 divided by Column 44 times Column 48. The total of this column used to adjust the rates in Column 50 so that the totals of Columns 52 and 46 are equal.

Column 53b (hidden): Sum of establishment costs, Columns 19, 35 and 37. - 143 -

Page 1 of 7

HARYANA WATER RESOCES CONSOLTDATTON PRQTF(T

FARMER p MtAENf7TfTTPT6NTMRG¶-O

1. The performanceof irrigationsystems depends upon: preparation of a realisticoperation plan and its effectiveimplementation to supply water equitablyand reliably to all subecowands;(ii) discipline in water use by the users; and iii) timely maintenanceand repairs of the canal system. While the managementof irrigation systems has traditionallybeen handled by the public sector in India, it is increasinglyapparent that farmer participationand involvementin managementcan lead to more efficientand economic use of water, reducing operationand maintenance (O&M)costs as well as increasing cost recoveriesfor governmentservices.

2. The Haryana IrrigationDepartment (HID) has been mainly responsiblefor the O&M of canals, distributariesand lined watercourses (which is the lowest common channel serving an area of 100-300ha). The maintenanceand repairs of the canal systems has been a matter of concern during recent years, due to inadequatebudget provision and increasedcosts of operation, leading to reductionin funds for maintenanceand repairs. The canal systems are deterioratingand need rehabilitationand modernizationso as to restore design capacitiesof canals and conservationof water. Accordingto the existing Haryana Canal and Drainsge Act of 1974 (whichis based on the Northern India Act of 1873), the maintenanceand repair of watercoursesis the responsibilityof the farmers: alternatively,the Act provides for the Departmentto operate and maintain the system and charge farmers suficientlyto cover the cost. The farmers are maintainingthe katcha (unlined)water courses, either individuallyin the lengthspassing through their fields or through informalgroup actions, where some leading farmers take the initiativeto organize other farmers to clear the channels,but over time HID has de facto taken over the maintenanceof lined watercourses (withoutadequate compensation). It is the policy of Governmentof Haryana (GOH) to reduce HID's involvementin system O0M, and pass this responsibility to beneficiaries, either operationally or financially.

"Warabandi"System of Nater Allocation

3. The state of Haryana is severely constrainedin terms of water availability. HID prepares seasonal operationplans to distribute available water equitably to entire commands and allocate supply to each distributary through predetermined rotational water supply schedules (RWS) known as "warabandi". The system of water allocation is area-proportional,with canals sized in strict proportionto the area they command, and the infrastructure within a canal command designed to automaticallydivide the flows released into that command among the smaller canals and channels in proportion to their - 144 -

Page 2 of 7

area, and finally to the watercourse,in proportionto its size. The infrastructurerequired to meet these needs has been perfected over many years and is now highly standardized.

4. Managementof irrigationwater is in .wo phases, one of which is government-managed, and the second is farmer managed. In the first phase, water available for irrigationis distributedin accordancewith pre-defined priorities:major canals are grouped into (typically)three areas, and each area is assigned a "preferenceorder" which defines the rights of that group in relation to the other two groups. Whatever supplies are available are then allocated in turn to each of the groups, the group in first preferenceorder receivingfull supplies,with residual sunplies going to the group in second preference,and the remainingsupplies (if any) to the third preferencegroup. The preferenceorders are publishedannually and well publicized.

S. After one week the preferenceorders are rotated, so that in a three week period each group will have one first preference,when they are very likely to get a full turn, and one week each in second and third preference,when their chances of receivingwater are progressivelysmaller. In implementingthis system,the HID attempts to match supplies (which in part are from storage) to crop requirements. Thus, in the planting season, several weeks of full supply are given, and farmersnormally receive three or four irrigationsin successiveweeks no matter what the preferenceorder of their canal group. At times when the demand is less, supplies will be limited to one third or two thirds of full supply, so that farmers get water one week in three or two weeks in three. The benefits of the system are extreme transparencybetween farmers within the watercourse--onlyone farmer is entitled to draw water at any particulartime--and between canals as defined by the preferenceorder. The Department'stask is clearly defined, and the rights of the farmers are also clear.

6. Over time, however, the responsibilitiesof the Departmentin O&M have expanded. As watercourselining has progressed,farmers have claimed that the skills needed for maintenanceare now beyond their capacity and that governmentshould thereforetake over. Governmenthas accepted this view by default, largely due to lack of the politicalwill to enforce cost recovery.

Need for Farmers AssAciations

7. The benefits to farmers of lined watercoursesare such as to greatly outweigh additionalcosts of maintenance,and indeed a pr-.v-erly treated watercourse needs less maintenance after lining. However, the maintenance of lined channels along its total length requires collective action and funding. The individual farmer is interested in maintaining the water course up to the 'Nakka' or outlet from where he gets water for irrigation, and not in repair.ng the length down stream. In general, lining is provided only in the upstream portion of water course, and not its full length. Thus, the head reach farmers get the maximum benefits from lining but are not interested in maintenance. On the other hand, the tail reach farmers do not have lined channels in their fields but are interested in maintenance - 145 -

Page 3 of 7 of the head reach aa this brings more water to them. Repairs of division boxes, bridges and other structurescannot be assignedto any individual farmers since these are used by all the farmers. An associationof farmers under the water course would thereforebe more effectivein assuming full responsibilityof the entire water course for timely upkeep, repairs and maintenance.

8. A farmers'association with a legal status can collect funds from individualfarmers, collectmaterial such as bricks, cement and sand, engage skilled labor and execute repairs for the entire length of the watercourse at a time so as to provide improved and systematic service to all farmers. The associationcan also keep vigil on tampering,intentional damages by any individualsand recover the associatedcosts. In addition,it can resolve disputes in water sharing among farmers. These activitiesinvolve collecting of contribution,incurring expenditure and managementof funds, and transparencyin accounting,decision making and implementationis an essential factor in the success of the process. For this purpose, formal associations registeredas body corporatewith legal backup and statutesmay be preferable to informal organizationfor system turnover,and this would be tested.

System Turnover

9. GOH has taken a program vf lining water courses to reduce seepage and provide more water at field level and by now nearly 4600 water courses out of the total 10,000 water courses are lined. Additional1500 water courses are proposed to be lined under WRCP. There is pressing demand from the farmers to provide lining in the remaining5400 water courses. It is estimated that the requirement for proper upkeep and maintenance of watercourses is about Rs. 60/ha. Under the project, as part of the detailed accounting of operational costs and maintenance expenditures summarized above, GOH proposes to identifythe costs of O&M of watercourses,minors, and distributariesas a basis for promotingsystem turnover to beneficiaries organizedinto Water User Associations(WUAs).

10. The turnover approach will be progressiveand voluntary,noting that the present system of operation is working satisfactorilyand should not be disturbed,while giving farmers the option of assuming full responsibility for maintenanceof watercourseor higher level channels in exchange for relative reductionsin water charges,given that water charges are expected to rise overall for irrigationservices. While it may be desirable in the long run to turn over O&H of distributariesand minors to the farmers, this may have adverse impact on the prevailingRWS and warabandi allocationand right of w ter of the individualfarmers and is thereby likely to reduce irrigation efficiencies,impact the equitable distributionof water and affect production negatively. The farmers in Haryana are not very familiarwith cooperatives and communityactivities, and in the absence of any experienceor piloting, sudden changes would be untimely. Turnover of system maintenancewould thereforebe implementedat the watercourselevel, initiallyon a pilot basis, and extended horizontallyover more area or verticallyto higher levels, based on farmer response. To identify farmers' needs and preferencesat all levels - 146 -

Ann*X 1 Page 4 of 7 of the system, GOH would organize a project council with farmers' representatives to advise HID of their needs, desired improvements in service delivery, and possible problems.

11. GOH will, by 12-31-94 define its policy on turnover,and by 6-30-95 set out the rules and procedures which will govern operation of watercourses taken over by farmer groups. By 12-31-95, areas would be selected for turnover activities, and training initiated to promote the approach. Any required rehabilitation to infrastructure would be carried out subsequent to farmers decisions on participation, and formal turnover would take place by 6-30-95, prior to the Rabi irrigation season. Thereafter performance would be monitored in the pilot areas to assess farmer response and replicability. The steps that GOH and HID would follow in the process are as follows:

12. Step If Turnover Policy. The policy would spell out the reasons for turnover, and define its scope and coverage. The policy would unequivocally state the government's determination to promote the formation of WUAs and encourage turnover programs through extended field support, organizational arrangements, financial incentives, operational procedures and training. It would also spell out the need for customer investment and a clear statement on government and customer responsibilities including allocation of resources, ownership of facilities, government access if beneficiaries fail to meet obligation, beneficiary role in defining rehabilitation and the regulatory and oversight measures that will be applied to beneficiary entities. Such a policy resolution would then be supported by legislation, either by amending/modifying the existing Act or promulgating fresh legislation. Project funds would be provided to contract consultants to assist GOH in the formulation of turnover policy.

13. Step II: Legislatinn and Procedures. GOH would enact legislation, rules and regulations to provide a legal basis for the creation and functioning of beneficiary entities, keeping in mind their needs and covering aspects such as water rights, water allocation, water quality and their application. Legislation would also contain obligations of the department/government such as technical guidance, financial assistance for special repairs, support in infrastructure responsibilities for emergency repair, availability and terms of government loan, and its regulatory functions. Definable rights to surface and groundwater need to be established in the form of a permit, license or concession that specifies the nature of the right. Water users "entities" would be vested with adequate authority to conduct business such as financing, cost recoveries, collection, assessment, construction, water allocation within service area and maintenance of facilities. Legal sanction to receive and manage government assets would also be specified. The rules and procedures to operationalize the legislation, existing or new, for system turnover would be defined in detail by GOH, . Subsequently, GOH would submit to IDA its procedures and plans for turnover for review and comments, and incorporate any resulting recommendations. Technical assistance would be provided under the project to assist GOH in defining its legislation and procedures. - 147 -

Page 5 of 7

14. Ste- ITIT System Tnvent=rv. GOH would inventorythe physical facilities,its design and its performancenoting the district water rights and hydrologicaland operationalcharacteristics of the system. This inventorywould spell out and confirm that the features are within the capability of the beneficiaries to operate and maintain, particularly in case of complex hydrological interconnections, multiple usages of water within system reaches or sensitiveenvironmental surroundings. It would also be obligatoryon GOH/HID to update cadastralsurvey map holdings,update system maps, system planning and review or O&M requirements.

15. Step IV! Awareness and PubliiLty. After issue of the policy resolution, and on an on-going basis, the purpose and content of this activity would be brought to the notice of the farming community, other beneficiaries, public in general, and government departments, through intensive mass media coverage. Study tours for staff of HID and for farmer representatives would be arranged to learn lessons from the successes of other states and countries. Financing is provided under the project for national and international study tours. HID would prepare publicity materials for distribution, and contract with local training institutes and non-governmentalorganizations (NGO) for designing awareness campaigns and to assist HID staff in group formation. GOH would then begin identifyinginterested farmers to be part of the pilot turnover program. Attachment 1 provides selection criteria for NGOs to assist HID in group formationand for awarenessand training purposes.

16. sep. V! ehtlIatnton. The rehabilitation of the system would commence in accordancewith agreed policies under the project. GOH would encouragethe beneficiariesreceiving the services from the system to participatein determiningthe extent of rehabilitation,particularly as this is likely to effect service flexibility,their reliabilityand subsequentO&M responsibilities.The program should ensure that all work is of high quality and fully complete before turnover is instituted. The process of group formation would begin along with planning for rehabilitation and modernization.

17. Step VI! Registering the UA. After group formations of the WUAs, the viability of these entities would be assessed,and then only would they be registered. The entity would be organized on a geographical/ hydrological basis at the designated level. Enrollmentof 51-60% of the beneficiaries as member of WUAswould be necessary before registration with every member holding one share (one share to one hectare), and number of share being in proportionto the hectaragesowned. The nominal value of each share would also need to be determined,including capacity and commitmentto pay. GOH would also assist in defining the Bye-laws of the WUA, and a sample draft of Bye-laws is provided in Attachment3 to present some ideas for this exercise. HID would conduct a baseline socio-economicsurvey after identificationof interestedgroups to assist in monitoringthe program after the turnover process is completed. - 148 -

annAos11 Page 6 of 7

18. 9teD VTII Plan nf Operatian. A plan of operation and maintenance including operating policies and procedures, responsibilities and accountability would be prepared (this is a defined project activity, see Annex 8). These would be in the form of manuals, with which the beneficiaries would have to be familiarized.

19. Step VITT! Training. Training in a range of areas would be provided under the project to farmer groups, in fields such as business management, credit and finance, operations and maintenance, crop calendars, farm budgeting, water management, etc. Training would be provided to HID staff in group formation as well. GOH may decide to establish training centers (temporary), at convenient locations, and would use local training facilities and experienced NGOs. The workshop, skills and training needs would be finalized by GOH during the project implementation.

20. steo IX!:urnover. After registration of the WUA, an agreement through a Memorandum of Understanding (MOU) would have to be signed between the WUA and HID. The MOU will specify purpose of turnover, functions of WUA, rights and responsibilities of HID and WUA and the procedure for turn over. The WUA would have a minimum 51% membership of the total number of farmers in the command, at the time of signing MOU. A sample MOU (draft) is given in Attachment 2 to assist HID in preparing MOUs specific to the needs of farmers in Haryana which would be identified as the policy and procedural processes develop. After turnover, the WUA and HID would carry out a joint inspection of the watercourse. The WUA would identify defects, omissions incomplete works during the joint inspection and these would be be rectified, by the HID. The watercourse would then be turned over to the WUA and thereafter the WUA would be fully responsible for its maintenance and repairs.

21. steo X: Monitoring. GOH and HID would monitor the progress of the system turnover program and the performance of WUAs on a continuous basis. Both quantitative and qualitative data would be collected on the community participation activities. The numbers of WUAs formed and the pace of turnover would be monitored. More importantly, the actual performance of the formed WUAs would be measured. This assessment would be based on indicators such as viability of the group, activities performed, financial viability, cost savings accrued to groups, cost recovery performance, and improvements in distributional equity of water. The perfomance of the turnover program would also be assessed in terms of improvements in the technical performance at the tail ends, and area extended under the program. Lessons on the replicability of viable WUAs in the context of the state of Haryana and farmers' views on improvements to the system would be carefully documented. GOH/HID would provide information on the performance of the WUAs and of the turnover program to supervision missions. GOH would maintain quarterly progress reports to track the performance of turnover activities and provide to IDA such information as may be required as part of its consolidated project progress report. - 149 -

Annlx I1 Page 7 of 7

Responsibilityand Funding

22. The Engineer-in-Chief and his staff offices, including the Chief Engineer Coordination would be mainly responsible for preparation and implementation of the system turnover program. They would be supported in their activities by the two water Services Units, and overall guidance would be provided by the Water Resources Policy/Support Unit. Under the investments for institutional strengthening, funds are provided for co:asultants, contracts, training and study tours relating to beneficiary participation. The details of the funding requirements are estimated as follows:

Activit T=a/numhars Total Cost (11SR5

Policy Formulation National Cons. (2 mm) 6,000 Internat. Cons. (1 mm) 21,000 Procedure Formulation National Cons. (4 mm) 12,000 Internat. Cons. (3 mm) 63,000 Training/Awareness/ National Cons. (2 mm) 6,000 Motivation NGO contracts (4 months) 16,000 Monitoring National Cons. (2 mm) 6,000 Study Tours National (15 visits)a/ 10,000 International (5 visits)b/ 60,000

TOTAL 20000a

Notes: a! estimated for ten persons per visit of five days. b/ estimated for two persons per visit of six days. Study tours would include both staff and farmers for national visits, and would include high- and medium-level management (staff) for international visits.

Conclusion

23. Under the project, GOH would provide a credible and viable option to farmers to form WUAs by enhancing the enabling environment for the successful turnover of maintenance functions. The cooperative movement is not deep-rooted in Haryana and most farmers are not familiar with working together or in group activities. In the past, most of the facilities have been provided by the state government with direct subsidies, and farmers were not required to collect funds, raise capital or pay the full cost of services. It is essential, therefore, that the organizing of farmers should be planned carefully and cautiously to ensure better success fLom the beginning. Once a few models are established and the farmers see benefits, the program can be extended quickly in other areas. It is important to note that the turnover policies and responsibilities for watercourse maintenance would be formulated within a framework of policies and responsibilities being developed for all services. It will be important to assure consistency with flood control and drainage distribution as the future needs in the water sector evolve. - 150 -

Attachnlmnt I Page 1 of 1

TNDI

)ARYANA WATER RESOURCES CONSOLIDATION PROJECT

CRITERIA FOR THE SELECTTON OF NON-MOVERNMP!NT ORCANTZATIONS (NGOSI

1. The project would seek NGO participation to assist in formation of Water User Associations (WUAs), farmer mobilization, sensitization and training. HID would invite from interested NGOs detailed proposals for collaboration. The HID would be responsible for reviewing the proposals and agreeing on appropriate mechanisms to involve NGOs in the project. The selection of NGOs would be guided by the following criteria:

a. As part of legal requirements, the NGO should be a registered body under the relevant State Law. It should have meticulous accounts and properly audited annual statements of income and expenditure.

b. Since the program involves working with farmers with diverse socio-cultural backgrounds in an agrarian setting, it is essential that the NGO has a rural orientation. To avoid creating any biases and misconceptions in the minds of the people, the NGO should not be affiliated to any political organization.

c. As the project requires NGO support for farmer mobilization and field level management of assets and resources, the NGO should have adequate number of field level staff conversant with the local language and customs and having a clear understanding of the socio-economic and political situation of the area. They should also have good rapport with the community so as to enthuse and involve them in developmental activities wholeheartedly. This ability should be reflected in some of the projects undertaken by them earlier. Good communication skills are a must here.

d. A prior understanding of the matter under consideration, and experience in WUA formation and interaction would be a plus point. owing to the nature and extent of the physical coverage on the program each selected NGO will be a part of the entire process. Hence the NGO should be able to interact smoothly with and be a part of a team.

e. Finally, the NGO should have internal stability so as to assure long-term support to the project. - 151 -

Annea1

page I of 4

HARYAN WA¶ER RESOURCES CON TOLIDATIONPROJECT

FARMER PARTICIPATION IN IRRIGATION MAAGEMENT

Samnle Memorandum of Under3tanding (MOtUl

MOU between Irrigation Department (ID) and Water Users Association (WUA) at

Water Course Ch. _ of _ Minor _ Distributary _ Canal of _ Irrigation Scheme.

1. Draft Agreement to be executed between i) the chairman on behalf of the

WUA at water course taking off from _ minor of distributary of main canal of _ irrigation schemes Tahsil District on the one side and ii) the Executive Engineers _ Division of the Irrigation Department on behalf of the Government of Haryana on the other side.

2. Objective. The main objective of the agreement is to promote effective participation of the farmers in irrigation management so as to achieve appreciable increase in crop production through economic use of available water in the irrigation scheme, and sustainable level of maintenance of the irrigation channels before outlets. The MOU will provide a written agreement, between the WUA and the Irrigation Department on the activities, rights and responsibilities of the two organizations after the turnover of the water course below outlet number _ taking off from minor of the irrigation scheme.

3. nef ±±gn. For the purpose of the agreement the following definitions shall be understood:

- The WUA refers to the association of farmers are defined in the bylaws of the said WUA.

- The Irrigation Department (ID) refers to the Irrigation Department of Haryana (HID).

- The Irrigation Act means the Haryana Canal and Drainage Act 1974.

- The Chairman refers to the Chairman of the course.

- The Executive Engineer refers to the Executive Engineer of , Division of Irrigation Department of Haryana.

- The Water Course refers to the water supply channel constructed for conveying water from outlet of minor _ distributary for the purpose of supplying irrigation water to the individual farmer's fields and shall include all structures and lining. - 152 -

AnneDL taabmente 2 page 2 of 4

Turnover means the point of in time when the WUA assumes full responsibility for the maintenance of the water course and system below including structures, lining and earthwork.

4. The Rules. The rules in respect of the WUA and the ID will be as under:

Out of the total number of farmers in the command of the water course, minimum 51% shall be the members of the WUA at the signing of this MOU, and the WUA shall get registered as body corporate, as cooperative society under the registrar of cooperative society of Haryana.

On turnover, the WUA shall maintain the water course field channels, field drains and the structures under the jurisdiction.

The WUA shall release water at the off take of the water course according to the operation plan.

5. Rights and ResRon iilitiga.

A. Rig1tL

i) Trrigation Department

- Operation and control of the APM of head of water course.

- Preparing O&M plan, roster of distributaries and exercising powers vested in canal officers as per the Haryana Canal and Drainage Act 1984 in respect of implementation of warabandi.

- Suggesting improvements in O&M below the outlet for efficient and equitable distribution of water to all the farmers.

- Reducing/increasing the water releases proportionately as per the availability of water in the system.

- Levying irrigation fees as fixed by GOR.

ii) IuA

The WUA will have the ownership, jointly with the farmers, of all the works under the water course including lining and structures.

Shall have the right to improve the water course, extend lining, and construct bridges.

Exploitation of groundwater from the command for augmenting irrigation, increasing irrigated areas on community basis. - 153 -

Xtt~hmnt 2 page 3 of 4

Shall have the right to request for training, doomed necessaryby them so as to carry out the O&M responsibility more efficiently.

Shall have the right for informationon irrigationrelated aspects such as water availability,schedules for water supply.

Right to levy fees, service charges to the farmers to meet maintenanceand repairs costs of water course and management costs of the society.

B. RAesonsibilities

i ) TIrrigation DefpartmAnt

- Providing,releasing water as per the share of water proportionalto the command under the water course.

- Maintaining the main canal, branch, distributaries so as to allow designed flow at the outlet.

- Promptly informing the WUAon position of water availability and other irrigationrelated aspects.

- Providingnecessary training for the NUA and farmers.

1i) EVA

Implementing O&M plan below outlet.

- Providing/supplying water equitably to all the farmers in proportionateto their holdings as per the warabandi schedulesin vogue.

- Exploiting groundwater and providing equitably to all farmers.

- Collecting contributions or fees from the farmers for meeting the maintenance and repair costs of water course and management costs of the WUA.

- Maintaining the water course including all earthwork, lining, structuresso as to allow full discharge from head to tail as per design.

- 4Maintaining accounts for the contributions, service charges collected from the farmers and getting the same audited as - 154 -

Attaohm.nt 2 page 4 of 4

per the rules prescribedby the registrarof the cooperative societies.

6. Procedure for the Turnove,

The IrrigationDepartment shall prepare an inventoryof the works under the water course showing lengths of lined/outlinedchannels, structures, crossings,turnouts, division boxes, map showingthe command, list of farmers, area which can be irrigatedof each farmer and time allocated to each farmer as per warabandi schedules.

7. joint Inspecti6n

The works shall be jointlyinspected by the irrigationofficers, and representativesof the WUA.

- --The WUA will identifyany deficiencies,omissions, substandard or incompletework.

- The works as listed in the joint inspectionshall be rectified, improved, completed by the ID.

8.- Hydranilo Tent

- The ID shall organize hydrauliclist of the water course to ensure and exhibit that the designed discharge can pass up to tail-end and then prepare final/recordplans of all the works as executed.

9. ZLUvir

- The ID shall hand over the physical change of the water course along with all the relevant records as listed in above to the WUA.

The chairman of the EE shall sign the handover/takingover at the space provided at the end of this MOU.

The WUA will assume entire responsibilityof O&M of the water course from the date of turnover. - 155 -

At-t-Achmeit- 3 Page 1 of 4

HARYANA WAER RESOURCrIS CONSOLIDArTOI PLO=ECT

SaMple Bylaws of Water User AssooiAtion EWUA)

1. Name of the WUA

2. Head Quarters

3. Date of WUA formation

4. Jurisdiction - all the area under the command of the proposed W>A

5. FormRtion of WmmA

(a) All the farmers will have right to become members.

(b) A member will have only one vote.

'd) In a first general meeting, a chief promoter and six other promoters will be elected for further transactionsup to formation of WUA.

(e) The promoter will issue a letter of intent to the Executive Engineer, PWDregarding the formation of WUA.

(f) The general body will determine the amount of share capital which shall be at a rate of Rs. _ per acre and the promoters will collect a member fee of Rs. per member.

(g) The promoter will open a bank account in the name of the Council and deposit the collectedamount in the bank.

ti) The promoter will apply for registration of the WUA (under appropriatelegislation/ Act).

Cj) At least 51% of registered land owners in the command should be enrolled as members before registration.

(k) After registration of the WUA, branch level committees shall be nominated. A branch level committee shall consist of three members including one leader.

(1) In the first general body meeting after registration, the members of the executive body will be elected. The executive body will - 156 -

hmisxP Att-ahm.nt 3 Page 2 of 4

consist of all the branch level leaders.

(in) Executivebody will elect the office bearers of the WUA such as chairman, vice-chairman,secretary, and treasurer. The genal body will authorizethe executivebody to sign the Memorandum of Understandingwith ID.

(n) As far as possible 10% members of the executivebody or at least one member of the executivebody shall be from women members.

(o) For amending the Bylaws, there should be at least two-third majority.

6. ObjectiaQR of the WUA

(a) To prepare maintenanceplan for the supply of water and monitoring the same.

(b) To imlement a pre-determined schedule of water supply (according to warabandi) among outlets for equitable distribution of water proportionate to the area.

{c) To settle the irrigation disputes of the farmers with mutual understanding and cooperation.

(d) To organize maintenance and repairs of the water course, to ensure full supply of water. The maintenancewill include, inter alia: silt clearance;weed clearance;repairs to structuresAPMS; self- recordinggauges, tail gauges, etc.; maintenanceof service road, environmentprotection; repairs, restorationof lining, etc.

{e) To help the farmers to adopt modern crop techniques for increasing the yield.

(f) To advise farmers for economic and efficient use of available water.

(g) To maintain the accounts of the management cost and O&M costs separatelyand get them audited every year by an authorized auditor.

(h) To prepare Annual Report on the water received and water utilized, area irrigatedunder differentcrops and balance sheet showing amount received in a year and amount spent on various items in a year.

7. Er!ounci1Wu,inean

(a) The financialyear for the WUA shall be from April 1 to March 31 - 157 -

Atach=t Page 3 of 4

of the next year.

(b) The general body will have annual general meeting every year. If necessary,a special general body meeting will be held whenever found necessary, with pre-intimation of 10 days.

(d) The tenure of office bearers shall be three years and thereafter, a fresh election will take place.

(e) Watermen may be appointedby the sluice level committeefor equitable distributionof water. Payments to the Watermen should be decided by the committeeand payment in kind or cash made by the members.

(f) The general body will decide on policy matters and allocate funds for O&M and executivebody will implementthe policy.

(g) To collect the share capital at a rate of Rs. 250/ha and to deposit the amount in the bank and to carry out O&M from the interest gained from the deposits.

(i) The executive body shall decide about maintenance and repairs of the water course, field channels and repairs to structures. The O&M shall be carried out from amount of interest on the share capital amount deposited in the bank.

(j) If there be any legal disputes, the chairman will handle such cases on behalf of the WUA.

(k) The executive body will ensure proper auditing of the WUA accounts.

(1) To conduct the general body meeting, a quorum of 33 1/3% of members shall be obtained. If such quorum is not obtained the meeting will be postponed for one hour. Even if on postponed time, the quorum is not obtained, meeting shall be conducted by the members present.

(m) Resolutions should be passed in the general body meeting as per the majority (51%) of the members present. Voting should be conducted to pass the resolution. In case of an equal vote being polled, for and against the particular resolution, the chairman shall exercise his casting vote.

8. DoeU=nts - 158 -

Itaehmenot 3 Page 4 of 4

(a) Registersto be maintainedand presentedto the concerned officers such as registrar,for inspection: (i) daily cash transaction account; (ii) receiptbook; (iii) list of members; (iv) minutes book; (v) monthly cash transactionaccount; (vi) permanent term deposit account; (vii) assets account; and (viii)bank account.

(b) The WUA shall keep proper books of accounts and at the expiry of each financialyear shall submit report to the registrar cooperativesocieties as per rules prescribed.

(c) The receipts and expenditureaccounts, balance sheet together with a report shall be placed before the general body meeting after the expiry of each financialyear.

(d) Reports on accounts by the auditor and approved by the general body, to be filled by the Council in time copies of the receipts and expenditure statements with a balance sheet and report shall be filed to the registrar and the executive engineer.

9. ingp4dat-4n gf th, TPUA

If 75% of the general body members are agreeable, the Council can be liquidated. On liquidation, the assets may be transferred to Government or matter may be referred to court and action taken as per direction of the court. - 159 -

Anna% 12 Page 1 of 3

HvA1YANA WATER RESOCS CONSOLIDATTON PROJECT

STATE WATEP PL_E

Tnt ro4duct ton

1. The State of Haryana does not have enough water to meet all of its demands. Its water demands are also changing in that municipal and industrial demands are growing rapidly, thus affecting the water supply to agriculture. The State also has groundwater problems: high level saline groundwater conditions in some basins, and overdraft conditions in other fresh water basins. Water quality of surface supplies is also becoming a problem in some areas of the State, and floods and drainage must be controlled. To address these issues, GOHproposed to develop a State Water Plan (SWP) with the following objectives:

a. identifythe quantity and quality of water resources in Haryana, and any projectedchanges in the characteristicsof these resourcesunder various possible scenarios;

b. detail the specific governmentobjectives pertaining to the allocation,development and managementof its resources and associatedgovernment policies, in terms of surface water, groundwater,watershed development, catchment area mangement and protection,etc.;

c. document current uses and commitmentsof the resourcesand develop the projecteddemands in each sector by location and by benefits;

d. develop alternativeprograms and actions to achieve GOH's objectivesin terms of facilities,management measures, and any related legislativeaction; and

e. formulatea composite set of programs,projects and measures from among the alternatives,presenting the associatedpublic and private investmentsthat would constitutethe water plan that would best serve the state.

elaXi,tinn

2. The process adopted for developingand maintainingthe SWP consists of three parts: i) frameworkplan; ii) detailed plan: and iii) updated plans (periodic).

3. The FrameworkPlan (FP) is the best plan that can be developed,using existing data and readily collecteddata, by the end of 1993. The Detailed Plan (DP) is to be an expansionof the FP based upon more data and data - 160 -

annex2 Page 2 of 3 analysis, over the next 18 months. Updating of the Plan would occur periodically, perhaps every five years, to account for current conditions at the time, and any changes that have occurred which would affect future projections. The steps for development of the plan include:

- Data collection - Collection of information concerning other agency plans - Estimations and projections - Mapping of information - Analysis of expected future water resource conditions - Definition of water problems and issues - Modification of some WRCP sub-projects in light of SWP results - Formulation of water resource policy and development of projects and programs to meet future demands and resolve water resource problems.

4. A computer model of the State's water resources system has been developed from a software package called Water Resources Management Model. In this model, the State's water delivery system has been divided into eleven sub-commands. The model includes the surface water delivery system, groundwater basins, recharge from rainfall and irrigation loses, and the draft for irrigation and other water uses. The model will be able to test future water resource scenarios.

Preparation of State Water Plan

5. Early in 1993, a Planning Cell was created in HID and staffed with three engineers to begin working on the SWP. Two consultants have assisted them with guidelines for conducting the activities leading to a water plan, and one consultant was engaged to assist them with the water resources computer model. The consultant for the computer model continues to work with Planning Cell staff. HID has commenced with a reorganization of the agency according to the Institutional Study which was conducted in preparation for the Haryana WRCP. Under the reorganization, a Data Collection and Water Resources Planning Unit (DPU), headed by a Chief Engineer, would have various sub-units, one of which would be the Water Resources Planning Cell. Additional staff in various specialty fields would be added to the State Water Resources Planning Cell.

6. Data collection for the first phase, the FP, is complete, and definition of the State's present water resources situation is almost complete. HID is undertaking work on projections of future conditions and alternative water resource scenarios. The water resources computer model is being calibrated for parameters that determine losses and groundwater behavior. The model is expected to be ready for running future scenarios in the first quarter of 1994. In addition to the Water Resources Model now being calibrated, other models available to the consultants include the U.S. Corps of Engineer's flood control model, HEC, and the groundwater model, SHE. The Power and Water Research Station at Puna has other water resource models. - 161 -

hnnor 12 Page 3 of 3

Northwest Intdia nrainage Study

7. Efforts to address drainage issues in Haryana have been focused through the Northwest India Drainage Study, which is likely to continue with bi- lateral assistance, or with support from the International Program for Technical Research in Irrigation and Drainage, to produce a consistent package of short-, medium-, and long-term measures for implementation. The results of the Study would be coordinated with the State Water Plan.

Bank SuSeirvsion

8. Bank supervision would occur quarterly (one to two weeks per mission) during the completion of the Detailed State Water Plan. Expertise for this supervision should be in the fields of water resource planning, economics, computer programming and modeling, and environmental management.

Consultant Requirements

9. Assistance from consultants would be provided in various specialty fields. The following table shows the estimated consultant assistance:

SPECIALTY SOURCE TIME {man-months)

Study supervision Foreign 18

System operations Foreign 3

Groundwater Local, Foreign 6

Economics Local, Foreign 8

Urban water service/ Local 6 pollution control

Agriculture Local 6

Environmental Management/ Local, Foreign 4 assessment

Demography Local 2

Sociology Local 2

State industries Local 2

Water law Local 2

Computer programming Local 12

Total 71 - 162 -

Page 1 of 11

HARYANA WTR RESOURCRS CONSOLIATON PROJEICT

ENVIRONMENTAND MANDACOUITSTION

IPart T! Envirgnmantal IsguAs

Objantiv~am and Statu ef Sggtgral Envirenmntal AneRsAant

1. The Haryana Water ResourcesConsolidation Project (WRCP)is aimed at improvingthe overall efficiencyof the water resourcesprogram in the state. A Sectoral EnvironmentalAssessment (EA) was conductedto assess the environmentalneeds under the project. The basic objectivesof the Sectoral EA for the Haryana WRCP were to delineatea viable I practical environmental program for HID to pursue and to assess the backgro .situation and potential environmentaleffects associatedwith the various HID sub-projectsand activitiesto be completedunder the WRCP in the 1994-2000period. The SectoralEA report was based on detaileddiscussion with Haryana Irrigation Department (HID) senior management,with other consultantsinvolved in WRCP formulationon behalf of the Bank and with Haryana State Government agencies directly and indirectly involved in environmentalor pollution control aspects relatingto water resource managementor HID activities.

2. The Haryana WRCP sub-projectsand activities,in most instances,are environmentallyacceptable in terms of their overall project benefits. Consequentlythe report was, in effect, a Category A -SectoralEnvironmental Assessmentwith virtuallyno further requirementsfor project-specific Category A documents to be prepared under the WRCP program.

Perspectiva on Water Reasurce Development and Envlronment

3. Water is a scarce resource in Haryana and future planning and management requirementsfor the water resource sector has to focus on efficient use and conservationof water and protectionof water quality of the State's surface and groundwaterresources. Virtuallyall land presently and economically viable for agricultureis in production,with insufficientwater allocation availableto Haryana for double or multiple cropping of all lands serviced by irrigationfacilities. There is very limitedpotential for new broad scale irrigationprojects based on unused government lands. Ownership of agriculturalland is tightly held by private farmers.

4. Overall water availabilityto Haryana, includingthat of allocations presently in dispute and/or under negotiationwith adjacent supplier States, is 18.8 million acre feet per year. Present annual water use is 13.8 million acre feet with irrigationaccounting for over 90% of use. Annual irrigation area utilizationand irrigatedcrop production in Haryana have stabilizedin recent years. An additional3.4 million acre feet of water could be effectivelyused to meet latent irrigation and other water demands (which are unsatisfieddue to shortages). Priority and better use demands for water for - 163 -

Page 2 of 11 non-irrigationpurposes, particularly urban and rural comunity and industrial water supply, are expected to at least double in the next ten years. Consequently,the main foci of the WRCP are to rehabilitateand upgrade existing water supply facilitiesto improvewater supply delivery and use efficienciesand conservationand to reorganizethe core functionsof the water resource administrationand managementsector (HID and the Haryana State Minor IrrigationCorporation - HSMITC) to achieve these efficiencyand conservationobjectives.

5. The existing environmentof Haryana reflects the intensityof developmentof its land resourcesfor agriculturalpurposes, with forested areas in the State accountingfor less thaA 4% of its area. Total areas of undisturbedreserved foreat and wildlife habitat are limited in Haryana; so wildlife resourcesfocus on adaptablespecies such as deer and selected bird and reptile species. Most natural watercourses(i.e., nallas and rivers) have been disturbedto some degree through channelizationand their regimes severely altered through diversionof water for irrigationsupply or conservation. Many are also used, in part at least, as drains for run-off of monsoon rains and/or for irrigation/urban wastewater return flows.

6. Haryana is essentially a state of rural agricultural communities with an increasing trend to extensive urban development in the Chandigarh/Delhi transport corridor, in communities near Delhi such as Faridabad, Gurgaon, Rohtak and Sonipat and in district town centres such as Hissar and Sirsa. Associatedwith this increasingurbanization and industrializationare emerging water resourceproblems; particularly water shortages;poor drainage for run-off and wastewater discharges; contamination of local drains and (in some cases) local shallow aquifers (e.g.,Yamuna Nagar and Faridabad). The State and Central Governmentauthorities plus the Delhi Union Territory administration(which relies on water transferredthrough HID's supply system and which has urban dischargesaffecting HID's canal systems feeding Faridabad and Gurgaon) are presently implementingan EnvironmentalAction Plan to reduce water pollution,public health risks, flood risks and aquifer contamination.

7. The main environmental issues of concern to HID relating to water resources planning and management include:

(i) Water quality protection requirements for the canal supply system; particularly to ensure suitable water to rural/urban raw water sources and for irrigationpurposes; (ii) Waterloggingand soil salinityproblems in irrigation (CCAs), particularlyin those areas with saline or marginallysaline groundwateror soils; (iii)Groundwater over-use and depletion and potentialsfor induced recharge of shallow aquifers underlying permeable zones such as occur in the Yamuna River drainage system; (iv) Long-term drainage and flood mitigation infrastructure to reduce extent and directionof flooding and risks of flood damage to urban and rural communities; (v) Potentials for and managementoptions for and monitoring - 164 -

Annex 13 Page 3 of 11

requirements to protect water quality associated with reuse of wastewater and sub-surface drainage of saline waters reuse in the water supply system.

Env1r6nmsntal asseR,nint of WRCP Ruh-Projent and Activittes

S. The proposed sub-projects and activities under the WRCP focus mainly on improvements to the State's existing water supply and drainage system. Highly controversial projects involving flooding of forested areas or wildlife habitats or requiring extensive community land acquisition and compensation and relocation resettlement are not included in the WRCP program nor are they likely to occur in the long term in relation to development znd management of Haryana's water resource sector.

9. A summary environmental assessment including comments relating to associated required mitigating actions and residual impacts for each of the WRCP proposed sub-projects or activities is presented in Table I. This indicates that neither separately nor cumulatively are any additional EAs needed to meet GOI or World Bank EA requirements; i.e., no project-specific EA need to be prepared under the WRCP program by HID.

10. Most of the sub-projects included in the WRC? would have long-term socio-economic benefits which outweigh any environmental implications of the respective schemes. The major infrastructure project included in the NRCP, the Hathikund Barrage Project, replaces the existing Tajewala Headworks (which are over 120 years old) and already has been subjected to and received an "environmental clearance under the Ministry of Environment and Forest's Central Water Commission's administered project review procedures. Conditions of approval include environmental mitigating measures such as provision of fish passing facilities in the structure,provision of alternatesupply of fuelwood for construction, controls on access to nearby forest reserve lands in liaison with the Forestry Department, provision of adequate under supply and sanitation to construction work force camps and monitoring of environmental effects during construction. The issues of waterlogging and soil salinity in Haryana are both local and regional problems. Surface and sub-surface drainage mitigating actions would be undertaken to solve local problems but the situation is beyond the scope of the WRCP.

11. The HID's proposed Environmental Affairs Office would prepare baseline Environmental Management Plans (EMPs) for the Hathnikund Barrage Project, the Kandi Development Project catchments, and representative CCAs (e.g., those with water quality management, waterlogging/soil salinity problems or groundwater, contamination/recharge problems) in the longer term.

RP vmqrJtalnnv4 Program

12. erApcativze. With only limited EA inputs required for sub-projects and activities proposed under the WRCP, and the overall program focusing on increased efficiency of water resource management, water quality is the dominant environmental concern requiring consideration by HID. Presently - 165 -

Annex 13 Page 4 of 11

several State governmentagencies mainly HSMITC, Haryana Departmentof Public Health (HDPH)and HSPCB have ongoing water qualitymonitoring programs targeted to their water resourceadministrative responsibilities. Each of these agencies and HID have laboratorycapabilities of varying capacitiesand capabilitiesfor water quality testing. Based on discussions,all these agencies agree that a more comprehensiveand interrelatedsystem of water quality samplingdata collection,processing and disseminationis required. HID also has a vested interest as the ultimate authority responsibleto water resource allocation,planning and managementin having access to a diverse and complete water quality data base to complementother hydrologicaldata which will be assembledwithin its Water ResourcesPlanning Unit. This information base would be the basis of preparingand updating State Water Plans and planning of operationaladjustments required to meet changing demands for water in Haryana on a regional and local (i.e.,CCA) scale.

13. The importanceof water quality as an emerging water resource and environmentalplanning issue is reflectedin the recent implementationof the Yamuna EnvironmentalAction Plan which focuseson resolvingthe water quality, drainage,public health risks and floodingproblems in the central Yamuna River area includingparts of Haryana, Uttar Pradesh and all of the Delhi Union Territory. The situationis approachingcritical stages in respect of water supply and drainage planning and managementin ares such as Delhi and nearby communitiessuch as Faridabad,Gurgaon, Rohtak, Panipat and Sonipat. With increasingurbanization and industrialization,the problem is envisaged as likely to become more "politicallysensitive." Consequently,it would be in HID's best interestto be involved and currently aware of such situations. This would be a prominent role for the EnvironmentalAffairs Office in HID.

R-as2onsibilitiesand Tasks for EnvirormentalAffairs Off ce

14. The needs for main responsibilitiesand tasks of, compositionof and budget for the EnvironmentalAffairs Office being set up as part of HID's reorganizationhave been determinedin consultationwith HID senior management staff. Annex 3 provides details on the functionalactivities and responsibilitiesof the Office.

15. The EnvironmentalAffairs Office would report directly to the Engineer- in-Chief. The main responsibilitiesand tasks to be undertakenby the EnvironmentalOffice are outlined in Table II, which also indicatesliaison requirementswith other State authorities.

16. The main objectivesof setting up the Office of EnvironmentalAffairs under the WRCP can be summarizedas follows:

(i) Develop a core of expertise in environmentalplanning and managementto meet HID obligationsand responsibilitiesunder national or state environmentallegislation and regulations; (ii) Develop HID's environmentalassessment capacity for project planning and developmentactivities that need to be formally evaluated accordingto GOI or lending agency requirements; - 166 -

Anneyg 1 2 Page 5 of 11

(iii) Prepare a plan for and implement a comprehensive water quality monitoring network and data collection and processing in cooperation with other State authorities involved; mainly HSMITC, Haryana Department of Public Health (HDPH) and HSPCB: (iv) Provide sound advice to HID's Engineer-in-Chief on environmentally related matters; (v) Provide environmental inputs to the State Water Plan and project formulation options; (vi) Develop and apply environmental policy directives and standard operating procedures, checklists, construction specification required to manage environmental issues associated with project implementation; (vii) Provide internal training to HID staff and inputs to external programs focusing on water resource conservation and environmental awareness.

Staffingand lUdet Estimate for Environmental PrograM

17. Essentially the proposed Environmental Affairs Office would consist of three (3) senior engineers and six (6) support staff including a junior engineer throughout the WRCP program period. The Environmental Program has been divided into two phases.

phase I (WiFst 2 years - 1944-12 5Q

= Involves recruitment, setting-up, rationalization of the water quality monitoring network and data processing upgrading of water quality testing capabilities and internal training to improve expertise within the Environmental Group;

- Includes all the main capital cost items and consultancies for initial training. Table 3 provides a breakdown of the technical assistance and training provided under the project.

Phase 2 (Latter 4 years - 1997-2000)

- Consolidation of expertise and procedures and preparation of Environmental Management Plans (EMPs) for major projects and -epresentative or environmentally sensitive area (e.g., CCAs experience groundwater depletion or contamination problems);

- Includes training of junior engineer in post-graduate environmental planning/assessment, training of selected HID staff in environmental awareness and development of HID's external environmental awareness and water conservation programs. - 167 -

Page 6 of 11

18. The estimated costs for the WRCP Environmental Program for the 1994-2000 period including staffing and operating costs are outlined in Table 5.2 of the full EA report (available in project files) and summarized as follows:

- Phase 1 (1994-1996) - US$284,000 (Rp 8.8 million) - Phase 2 (1992-20001- USS261.000 (Hp 8-1 mllifn) Total Cost - USS545.000 (BR 16.9 million

Liaison Requirements

19. Implementation of the proposed Environmental Program proposed for the WRCP would involve extensive liaison and establishing working relations with several other state governmental authorities. In particular, coordination of the proposed water quality monitoring and data processing/exchange network would require close liaison with HSPCB, HDPH, Haryana Department of Environ- ment (HDOE) and HSMITC and other agencies with responsibilities relating to water quality protection. Other state and central government agencies such as forestry, fisheries and water project reviews and approvals would also probably be included in the Environmental Group's direct liaison network.

Public Consultat'l

20. Since this project is essentially for upgrading existing systems, operation and maintenance and software, there are no affected people other than the farmers serviced by the irrigation network who will benefit from improved water delivery, management and distribution. Therefore, it was decided that there is no identifiable group with whom meaningful consultation need be carried out.

Cacl1niHn

21. The existing environmental situation in Haryana and the scope of the proposed WRCP program are such that there are no requirements for more detailed formal project specific Environmental Assessments (EAs). Water quality monitoring and management is judged as likely to be the focal point for environmental issues which would confront HID in the period of the WRCP program. Consequently, a major role for HID would be in establishing and maintaining a comprehensive water quality monitoring network and managing the resulting data base.

22. The environmental/water resource management/agricultural issue of waterlogging and salinity in Haryana has been recently studied as part of the North West Drainage Study. These are both local and regional problems. Under the WRCP surface and sub-surface mitigating action would be undertaken to solve local problems, mainly through the rehabilitation and modernization programs; however, the overall problem is beyond the scope of the WRCP. - 168 -

Page 7 of 11

Part TI. - Social Issues

Introdugtion

23. Assessmentsof the possible social impacts arising from this project were made by preparationand preappraisalmissions of the Bank and outside consultants,and reviewed by the Resettlementand RehabilitationUnit in the field office. This section of the Annex summarizesHaryana state's procedures establishedfor land acquisitionand compensation,and various findings on social impacts of the WRCP.

Land Anquisition Needs and Norms

24. There are no on-going or anticipatedfuture R&R issues involvingmove- ment of families or communitiesrelated to activitiesunder the WRCP. It is anticipatedthat total land acquisitionneeds of the project would be very small, usually as a small proportionof land holding. There are no anticipatedcases where the full land holding of an individualwould have to be acquired. Land acquisitionwould be mainly limited to narrow strips for realignedcanals. The project activitiesprovide benefits to people through increasedand assured water supplies for irrigation,agriculture, domestic and livestockrelated uses, as well as providingmany other social benefits.

25. Land acquisitionprocedures would have the followingelements: (i) all land acquisitionunder the project would take place under the Land Acquisition Act of 1894, amended in Haryana in 1984; (ii) the rate for the different classes of land (irrigated,cultivable, non-cultivable) would be determined according to the prevalentmarket rate plus an additionalamount (at present 30%) for compulsoryacquisition; (iii) compensation would be paid prior to possession; (iv) landownerswould be compensatedfor any other loss such as standing crop, buildingsand trees; and (v) land acquisitionshall be completedprior to award of works contracts. Present compensationprocedures are satisfactory,and clearly defined. Compensationfor trees, standing crops, civil structuresto use groundwater,or houses is accordingto assessmentof value by the concerneddepartment (Forestry,Agriculture, Public Works Department). Every effort is made to avoid these. Very occasionally, the land holding of a farmer may get bifurcatedbecause of the alignment of channels. Under such circumstancesthe HID pays a compensationof up to 10 percent of the value of land for a period of three years. The compensation for forest land would be accordingto the Forest ConservationRules, i.e. equivalentquantity of non-forestland would be provided for suitable compensatoryafforestation within the existingguidelines. HID aligns canals such that they do not pass through residentialareas, deliberatelyavoiding buildings and dwellingsto minimize potentialproblems. Canals are usually constructedthrough fields and should not go through any religiousplace or a cemetery. In many cases, it is estimatedthat the lining of canals should result in reductionof canal width and consequentlythere would be saving of land (where this has happened,the Haryana Forestry Departmenthas been requestedto plant trees along the borders; HID d"ei not get income from these trees). - 169 -

;fx0a Page 8 of 11

26. HID has been conductingfield surveys and has estimatedmost of the total area of land that would need to be acquired under the WRCP and the number of people involved. These would be finalized prior to initiating the sub-projects. Investigations conducted by HID, and confirmed by consultants, conclude that people would be affected very minimally, and moreover, the project activities would benefit people. In many of the villages, the water is available at a fairly low level, but tends to be brackish; construction of channels, and modernization and rehabilitation of existing watercourses improve the incomes of people in the area by facilitating irrigation.

27. For the watercourse lining activities, no land acquisition would be required. The main requirement is for the replacement of Hathnikund Barrage involving 168 ha of land acquisition, and the associated Western Yamuna Link Channel, involving 50 ha. For the canal modernization, a 23 km long Feeder Channel, having maximum width of 30 meters, would be constructed to feed Kheri, Buddha Khera, old Nardak, and Karnal Distributaries of the Western Yamuna Canal (WYC). This would require 20 ha of land in narrow strips, which has to be acquired under the project. This would affect 110 persons, of whom 16 persons would have their land bifurcated. Compensation would be provided as described in para 25, and necessary crossings would be provided on consolidation paths according to the state's policy. No-one would be rendered landless or be left with an uneconomic landholding under this land acquisition. For the extension of minors, small and scattered amounts of land would be required in narrow strips (maximum width of 8-10 feet) along existing watercourses, and the exact location of these would be determined along with the annual works program prepared by HID.

L;nd Acquisition for Hathnikund earrage and Link Channels

28. In the Hathnikund Barrage project, which has the largest requirements under the WRCP program, much of the necessary land of 158 ha has been acquired. This land falls in Haryana and Uttar Pradesh: about 49 ha in Haryana and 109 ha in Uttar Pradesh. Almost all of this land is barren and uninhabited, and is not suitable for cultivation: it is river-bed land which is rocky and of poor quality, and is irundated for part of the year. Out of 49 ha in Haryana territory, total private land is 4.7 ha, which has been acquired by GOH in 1989. About 34.8 ha is Panchayat land, of which about 4 ha has been acquired in 1989, and some payments made towards the rest, although GOR has not yet taken possession of the land. The remaining 9.5 ha is government land, and possession is yet to be taken. Of the 109 ha in UP, 29.7 ha have been acquired in 1991 (of which 7.9 ha is private land, while the remaining is government or Panchayat land). Some 6.9 ha of the required land overlaps with the Khara Hydel Irrigation Project in UP, and has already been acquired by GOUP. The remaining land in UP required for the Barrage (72.8 ha) is yet to be acquired by UP, although Haryana has paid an amount of Rs. 10 lakhs to GOUP as an advance for acquiring the land in UP. The negotiations between the two governments are being finalized. Compensation would be according to the provisions under the Land Acquisition Act, and as described in para 25. - 170 -

Annx- 13 Page 9 of 11

29. For the land required for the HathnikundBarrage, the private owners affectedare 24 persons: 5 persons in Haryana and 19 persons in Uttar Pradesh, and no one would be rendered landless. In Uttar Pradesh, 7 persons have less than 2 ha of land after acquisition. However, most of these landowners'original landholdings are between 0.5-2.2 ha and are uncultivable, barren lands.

30. For the Xe YmunXa=aLi-nk MCannal, about 50 ha are required, all of which is in Haryana territory. Of this land, about 23.4 ha is private land: 10.5 ha is cultivable,while about 12.9 ha is uncultivable. Total forest land is 8.9 ha, and the remaining17.8 ha is government land that has already been acquired. Other than the privately held cultivable land, the area is barren and rocky, and uninhabited. For the Link Channel, the number of people affected are 12 persons, of which 3 persons would be left with less than 2 ha; again, the original landholdingis small and uncultivable. No one is expected to be rendered landless under the acquisition. It would be a nondition far _sur@emantanfor the HathnikundBarrage and Link Channels component that all land acquisitionwould be done followingprocedures acceptableto IDA (see para 4.04 of the main text).

Tha Prneeas of Land At9ition

31. The HID is enabled by the Land AcquisitionAct of 1894 to acquire land for the purpose of canals. The Act applies to all of India. There have been many amendments,but they are not substantialand make little difference to the original act. The latest aendment in Haryana was in 1984. It refers to the time factor with regard to the notificationof the land to be acquired to speed up the process of aaquisition. There is provision in the Act for acquiring land by negotiation,but the usual practice is to acquire the land compulsorilyunder the provision of the Land Acquisition Act. The Act does not specifically mention acquiring of land for irrigation purposes under the expression "public purpose" (section 3), buitit is covered under 'the provision of land for any other scheme of development sponsored by the Government., The most relevant sections of the Act are d and 6 for acquiring land.

St.pa in the AeQi{ation of Land i, The land that needs to be acquired is identifiedby the HID, and the Land AcquisitionOfficer (LAO) is informed of the same (the LAO belongs to the Revenue Department,but is on deputationto HID). ii. The purpose of acquisition (publicpurpose, scheme, project) is indicated. The department then shows on a sketch map the village boundaries,distances and the width of the land to be acquired. iii. The scheme of land acquisitionis then given wide publicitythrouglA: a. notificationin the gazette; b. notificationin at least two newspapers (one in regional language)circulated in the area; and c. announcement in specific areas through beat of drums. A period of 30 days from the date of notification is allowed for raising objections by any interested person, which are submittedto the LAO. - 171 -

Annex 13 Page 10 of 11

iv. The Collector fixes a date for hearing objections. He then makes his report/ recommendations to the government, which decides to withdraw the land acquisition or to proceed further with the acquiring of the land.

(All of the above steps are taken under section 4 of the amended Land Acquisition Act of 1894.)

v. Within one year of the above notification for land to be acquired, another notification is made (under section 6) giving specifications of the land, and the boundaries, the field numbers and the land to be acquired compulsorily. (This notification can be made immediately after the expiry of 30 days. As mentioned under step (iii), the outside limit for the notification is one year). vi. The LAO obtains the list of landowners of the land to be acquired. The land records are updated every five years by the Revenue Department. The Land Acquisition Officer obtains the rate for the different classes of land (irrigated, cultivable, non-cultivable) from the Collector of the concerned district. The rates are determined by the sale of land in the sale area, usually the maximum comparable market rate. vii. The LAO is then directed by the acquiring department to acquire the land (section 7 of the Act). After the award has been announced, necessary funds are made available to the LAO, by the concerned department, to Lay the landowners. viii. The award of the compensation amount is announced by the LAO within a period of two years of the notificativn mentioned in step (v). It can also be done earlier. If the award is not announced within two years, the notification lapses. ix. Once the award is announced, the acquiring department can go ahead with the scheme/project, even if the landowner has not received the amount of compensation. The landowner may accept the amount under protest if he is not satisfied with the compensation, which allows him to claim a higher compensation through the courts.

Adequacy of tha Compansation Process

32. In general, the process of compensation for land acquisition is satisfactory in Haryana. The timing of compensation has improved in the recent past due mainly to the 1984 amendment, which makes it mandatory for the acquiring department to complete the process within a period of three years from the date of notification under section 4. Earlier, according to the officials, there used to be substantial delay between the notification and the actual acquiring of land. However, there are areas of further improvement.

33. Although there seemed to be satisfaction about the compensation given in the villages visited on field trips, the department officials were of the view that there is general dissatisfaction at the compensation amount awarded in the state. The collector estimates land values based on the sale deeds of recent times. To avoid excess stamp duty, the amount mentioned at sale is often lower than the actual transaction. Moreover, when compensation payment is delayed, the price of land would have escalated. In such cases, there is a - 172 -

annoxl3 Page 11 of 11 general tendency for people to go to court for a higher award. For example, in a case in the Ambala Circle, there were about 200 cases pending while 100 had been resolved. The court bases its judgment on the latest transaction in the area, and its award is generally higher than what is given by the department. In one case, while the LAO gave an award of Rs. 15,000, the court award was Rs. 93,000, as the land was adjacent to an urban area. In another case, the court awarded Rs. 8,000 while the LAO had offered Rs. 4,000.

34. The amount awarded by the court is paid by the acquiring department with interest, with retrospective effect from the date of the notification of the award. The interest since 3984 is paid at 15 percent (earlier it was between 8-10 percent). The amount to be paid is thus substantial. The court cases have increased in the recent past and HID has designated one official exclusively to deal with the court cases. According to an official dealing with the court casas, in 90 percent of the cases the court has offered higher compensation (in many states, the landowner feels that there are two payments owed to him - one by the government, and the other by the court). GOB should consider measures to further improve the land acquisition and compensation process to minimize problems in the future. In the past, GOH's compensation had been based on five-year average of markt prices; lately, GOH has made an important step towards improving the process by awarding the highsjt market transaction price.

_onclusion

35. The land acquisition needs of HID for the WRCP is very small and only a small portion of the holdings of a landowner would be affected. There would be no need for resettlement of groups. The amended Land Acquisition Act of 1894 is relevant for the acquiring of land. The land is acquired under sections 4 and 6 of the Act. HID officials felt that it would take six months at the earliest to acquire the land (section 17 of the Act allows for almost immediate acquiring of land under emergency conditions, particularly when roads or tracks have to be realigned, when a river changes its route, or floods have destroyed them; the section has been rarely resorted to). In Haryana, every project has to be cleared by the Social Welfare Department, which would consider any adverse effect on the people, as a pre-iequisite to clearance by the Technical Advisory Committee and the Planning Commission. The WRCP has been cleared by all necessary departments, and is considered to have minimal adverse impacts on people, while the overall benefits of the project would be substantial. N&QDA

HARYANAWATER REPSOtURCES a)N8OLJDATION PROJIECT

StUMMARYrENIIROMENTAI,ASSM41JT OF PROPOSEDWFRCPSUB4*JTS

PROJECTISCOPE MAINPOTENTIAL ENVL IMPACTS MAINMMGATION ACTIONS RESIDUALIMPACTS OR -ENERTS ADVERSEANDOR BENEFICIAL E U

1. Rehabilitationof Exisng a) MarkedIncrease in wateruse a) Notificationof worksto user groups a) Environmentallycompatible proect with IrrIgationFacilities efficiency b) Publicrelations program on water benefitsto water conservation b) Benefitsfrom water conservation conservation and drainage c) Temporaryafect to users through changesin supply,turbidity, traffc interference,etc.

2. Researchand Training a) ,ong-term benefitsfor water a) None required a) Environmentalgyneutral project resourcemanagement and b) Improvedcapability re water management conservation and environmentalmonitoring b) Water quality to be integral to data colectionand water resource planningunits in HID

3. CanaiUnlna a) Waterconservation benefits and a) Notificationof worksto user groups. a) Environmentallybeneficial project reducedpotential for neakcanal b) Replantingas appropriate re water conservationand waterogging waterlogging problems

4. WatercourseUning a) Water conservation,better a) Notificationand publicrelations a) Environmentallyand socally beneficial distributionto local farmersand rural programat commandarea level project water supply sources b) Publicheaith benefitsthrough better water supply

S. IA Iam a) Enhanceprovision water to Kheri, a) Notificationof projectand land a) Local agriculturalbenefits to comnmand WJC/AugmentatlonMain Dudhaand other irdgationcommand aoquisitionto affectedparties areasinvolved CanalUnk aeas b) Afforestationalong canal J b) Improvedpotential for monsoon seasonlocal aquifer change c) Minorland acquisitionand compensation PROJECTMPE MAINPOTENTIAL Erwl IMPACTS MAINMITIGATION ACTIONS RESIDUALIMPACTS OR BENERTS ADVERSEANIYOR BENEFICIAL REOJED

6 DrainageProgram a) Floodconmo benefits to local a) Waterqualiy Impactsto be a) Environmentallycompatible project with commuries In westemHaryana evaluatedand monitored public health bensfitslocally b) Reducedlocalized wateogling b) Bank stablzaton by tree planting and oil salitnty c) Minorlocal advwseaffects on rechargepotenfals and duramonof flooding d) Reducedlocal publeihalth dsk re malariathrough reducedmosquito habitat

7. HalhnlkundBarage a) Envm_n clearance and a) Nofficaftonto downstreamriver a) Improvedwater supplydistdbution and (Replcementd Tajewala appw,aI by CWCalready edst cmmunities re water quality changes rioodcontrol in YamunaRiver Headworks) b) TemporaryInconvenience through b) Fish passingfailiies as per approval b) Good potentialfor developmentof tubidity of water with limited possible byMOEF touism corearea with TaiewalaHeadworfk ffects on aquaticand benthicfauna c) Liason with ForestryDepartment re worestReseve and new pondage of YamunaRiver fuelwood and controlson accessto ce Possible ong-tenmbenefits re water c) Occasonaldisrupffon to regl isa ForestReserve supplycontrol for aquiferrecharge In Yamuna road traffic and more frequent d) HID to prepareand implement drainageduring monsoon locally EnvironmentalManaement Piam d) Economicbenefits to local e) Water quality and effeWac communitiesparticulaly Yamuna Nap fisheriesmonitoring program through constructon peiod emplomt and service requirements a) Effectson fisheriesand other aquaticresources minimal as dver zone alreadyaffect.-d by other strucWresand water diversions f) Sedimentpassing not a problemIf done In monsoonseason

6. ShahbadNaivi and Ladwa a) Both areas presentyIrdgated by a) Notfficationilialsonwith local farmers a) Environmentallyoompatible project with s IrdgationScheme monsoonflows andlor tubewells;so re project implementation local socoeconomicbenefits I no probable mapr envifonmental I impact from project b) Socio-economicbenefits to local farmersfrom canal irrigationwater supply PROJECTISCOPE MAINPOTENTIAL Envl IMPACTS MAINMMGATION ACTIONS RESIDUALIMPACTS OR BENEFITS ADVERSEANIYOR BENEFICIAL SEQUIPED

9. KandlArea Development a) Erosioncontrol, wildlife habitat a) Monitoringof waterquality. fisheries a) Environmentallyand socio-economically (Watershedprotection and and fodderavailability benefits fom potentialand healthdsks of small beneficialproject rnall-scele Irrigatioa) watershedprotection program reservoirsadvisable b) Goodsocio-soonomic and water b) Damand borrowarea stabilization conservationbenefits to local through appropriateafforestation communitiesthrough extended c) WatershedEnvironment Programs irrigationand reducedpurrping costs possiblyto be considered c) Seondaxyeconomic and public health benefits through Improved featyleof local communities

v 4

IO J IA HARYMAiWA,TF-R RSOURES C;QNSQUDATIONPROECr RtESPQNSIBLFS MOTASKS * OFFICEOF ElE1NMN TA4LAFF,AIRS

POSIIONmTLE GENERALLIST OFFRESPONSIBILITIES TYPICALUAISON COIMMdENTS (TOBE ALLOCATED ON IMPLEMENTATION) ORPANIZATIONS

SUPRISORYENGINEER 1) Administratfonand supervisionof oMce AUCEs 1) Positionwould report to the Engineerin 2) Adviserto CEs&EICre enwironmental Chiefand wouldinclude preparation of advice aspects re HID environmentalpolicy and responseto 3) Liaisonwith the YamunaEnv. Action Plan HDPH officialand publicqueries 4) lIaison with other State Water Resource Authorites re environmentalmatters 5) Environmentalpublic relations for HID 8) Environmentalawareness training in HID HDPH;HSPCB MC

E)ECUTIVEENGIEER 7) Environmentaldocumentation Inputs to Al CEs 2) Positon wouldbe responsiblefor advice StateWater Plan and GOI fundingproposals and assistanceto water quality monitoring 8) Assistanceto HID waterquality HSPCB;HDPH HDOE; MC and environmentalmatters of state level monitoringprogram and associatedlaison Importanceincluding day-to-day liaison with needs other departmentscollecting water quality 9) Assistanceand adviceto HID water quality HSPCB;HDPH; HDOF, MC data or administeringwater allocations data colletion (inluding externalsources), storageand retieval and dissemination 10) Adviceand assistanceto the O0M and oonstuctionprograms of HID 11) Uaisonwith HID Clent WaterUser Autoies and NGOs

SLBAOIVIONALOFRCER 12) HID EA rquirements and representation HDOFHSPCB 3) The SDOshould be responsiblefor on State EA ReviewCommitees for projects environmentalassessment for projects;special 13) Assistanceto environmental HDOA HDOOFI field surveys,etc. investigationsre drainage,watertogging, saSnityIncluding lIaison with relevant 0 researchers,pilot projets, etc. Q 14) Lfaisonand assistanceto investigations HDOA;HDOFI; HDOE " , re wetlands,flood plainland use planningand 0O management t 15) Environmentallibrary and researchliaison - 177 -

£nnax I

Page 1 of 1

HARYANA WATER RESOURCEq CONSOLTDATTON PROJECT

TCHNICAL ARSISTANrE AMD TRAINING, FOR

ENIROW tALAVE

A. I hntaL Ansiatannea

1. External Consultants

a) Water Quality Network/Data Expert - 2 months $24,000.00 b) Environmental Planner/EA Expert - 1 month $12,000.00 c) EA/Environment Awareness Trainer - 1 month $12,000.00

Sub-Total $48,000.00

2. Consultancy Related Expenses

a) Per Diems - 120 Days $12,000.00 b) Air Travel - 4 Trips $14,000.00 c) Vehicle Rental/Local Travel Nominal $2,000.00 d) Training Materials Nominal $2,000.00

Sub-Total $30,000.00

B. Training for HID Staff

a) Environmental Awareness and Water Quality Monitoring/ Criteria Training Courses (Local) Nominal $4,000.00

b) Environmental Assessment Training - Short Term for Exec. Eng. and 1 x SDO (in India or Regionally) Nominal $8,000.00

c) Water Quality Measurement Analyses, Data Handling Coutre for 1 x SDO, Technicians plus others nominated by HSPCB; PWD (PH),HDOE Nominal $8,000.00

d) Post Graduate Training for Junior SDO in Year 2 (in India or Regionally) Nominal $10,000.00

Sub-Total $30,000.00 - 178 -

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TNDTA

HARYANA WATER RESOURCES CQNSOLIDAT!OW PROJEC

ECONOMIC AND FINANCIAL NATLYSTS

eonomit- nalysis

1. vovrvSaew.The Haryana Water Resources Consolidation Project (WRCP) is a multipurpose project that would generate substantial economic benefits in the short and long run. Two types of benefits are quantified; irrigation benefits and flood control benefits.

2. Besides irrigation and flood control benefits in the short and medium terms, the project would also generate long-term benefits for public health and the environment. Improved agricultural sub-surface drainage would reduce the environmental hazards of crop yield reductions through water-logging and salinization. Groundwater protection against excessive pumping would be enhanced by improving groundwater regulations and their enforcement. The transformation of HID into a specialized water resource management institution would have a number of benefits for non-agricultural users. Water supplies for industrial and domestic uses would be assured throughout the year by higher maintenance levels of the whole system. Improving management and disposal of wastewater would reduce health and sanitation risks for the urban and rural population which depend to a large extent on canal water for domestic purposes. Lack of quantitative data prevents the explicit incorporation of these benefits into the economic analysis; however, a qualitative discussion is provided.

3. A separate analysis is provided for the Hathnikund Barrage. The barrage replaces the Tajewala headworks, a diversion structure on the YamuunaRiver built 1877. The replacement is necessary to avoid the risk of a major break of the Iheadworkswhich would disrupt considerably water supplies to Haryana and Delhi.

Trrigatinn Benefitn

4. Bankgrnazd. Project activities would increase greatly the annual surface water supplies of Haryana. First, the modernization of the conveyance system, i.e., by lining canals and watercourses and by constructing a new feeder canal, would lead to a reduction of seepage losses. AZter project completion annual seepage loss reductions are conservatively estimated at 667 Mm3 in total, of which 312 Mm3 can be attributed to canal lining, 307 Mm3 to watercourse lining and 48 Mm3 to the construction of the feeder canal (compare Table 1 and Annex 6). Second, due to siltation and substandard maintenance, a number of canals can not be run at full design capacity, thus preventing Haryana from receiving its authorized share of water from the Yamuna River and the Ravi-Beas & Sutlej Rivers. The rehabilitation of the Narwana Branch - 179 -

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canal alone would allow Haryana to increase the water offtake from the Yamuna River by 286 Mm3 per annum. The analysis focuses on the irrigationbenefits of increasingannual surface water supplies by 953 Mn3 which can be attributedto the modernizationand rehabilitation componentsof the project (Table1).

5. Meehjdglag. Water is a scarce good and the economic benefits of increasingsurface water aupplies through project activitiescould theoreticallybe calculatedby using bulk water prices for industrial, domestic or agriculturaluse. However, the current water rates in Haryana (industryRs. 70/000m3, municipalitiesRs. 18/'00Om3, irrigationRs. 12-13/'000m3), are more an indicationof political decisions than actual efficiencyprices for water. Thereforethe marginal benefits of increasingsurface water supplies through the project have to be estimated. The marginal benefits are estimated to be higher for industrialand domestic uses than for irrigationpurposes. Currently,about 90% of Haryana'ssurface water resourcesare consumed by irrigation,but industrialand domestic consumptionare increasing rapidly. However, GOH has set higher priorities for water deliveriesto industry and municipalitiesthan for agriculturalproduction. Non- agriculturalusers always receive their full share, whereas in times of short water supplies,water deliveredto agricultureis decreased. Therefore,any increase in surface water supplies through project activitiesis likely to be added to irrigationdue to GOH's priorities. To avoid overestimationof project benefits, the increase in surface water supplies is evaluated in terms of the marginal benefits of water supplied to irrigation.

6. In the analysis,the increasein surface water supplies is valued at the opportunityvalue of using the water for irrigation. Three valuation alternativesseem possible:first, the costs of pumping ground water could be used as an opportunity cost of surface water. Second, informal markets for surface water exist and farmers commonly sell their right of drawing water from the canals to other farmers thereby giving an indication of efficiency prices for irrigation water. Third, the value of the increase in crop productionby irrigatingpreviously unirrigatedcropland is a commonly used indicatorfor the value of water. In Haryana, the cost of ground water pumping can not be used as an opportunitycost because large areas are underlainby saline ground water and pumping is thereforenot a viable option. Moreover,ground water is a free good to private consumers so that using only the costs of pumping would result in an underestimation of the actual opportunity costs of water. Alternatively using prices realized at the informal water rights markets is limited by the lack of rigorous data and representativestudies (however,field evidence suggests that farmers pay up to Rs. 1000/ha/seasonfor purchasingwater from neighbors).

7. In the economic analysis the irrigationbenefits are quantifiedas production increases as a result of expanding the irrigated area within the Bhakra and Western Yamuna Commands from increased surface water - 180 -

Annlex 14 Page 3 of 13 supplies. Most of the irrigationbenefits would be spread out through the whole canal system CCA's, because the increase in surface water supplies is availableto the system as a whole. Only at the watercourse level would water saved through lining be used directly in the chak where it is saved. Generallythe irrigationbenefits could fall into two categories: (i) greater water availabilityto "head-end"irrigators enabling them to derive incrementalirrigated production and (ii) greater water availabilityand reliabilityto "tail-end"users initiatingan inc.-easein irrigatedarea by reducing available fallow land. At present :hereare no: enough statisticaldata availableto disaggreguteproduction and croppingpatterns between head-endersand tail-enders. Therefore,it is assumed that the increase in surface water supplies would be used to expand the irrigatedcropland within the two command areas, by reducingcurrently rainfedor fallow cropland. Currentlyonly 50% of the actual water needs in agricultureare being met so that most farmersdo not receive water to irrigatetheir cropland fully. Moreover, demand for water from non-agriculturalusers is expected to increase rapidly in the future further reducing surface water available for irrigation.

8. Etimating Irrigation fenefits. The economic calculationof irrigation benefits can be subdivided into three steps. First, representative crop budgets are calculatedfor irrigatedand unirrigated land. Second, the financialprices for crop output and inputs are adjusted to reflect economic prices and economic crop budgets are calculated. Third, the incrementalnet benefit of expandingirrigation to presently unirrigatedland in the Bhakra and WYC command is estimated.

9. Representative crop budgets are calculatedfor the two major irrigationcommand areas in Haryana, the Bhakra and the Western Yamuna (WYC) commands (Tables 2 and 3). The information on inputs, outputs and prices for the crop budgets has been provided by the Haryana AgriculturalUniversity (HAU),which monitors farm performanceannually in all districtsof the state based on a stratifiedsampling procedure. This farm managementdata base is currentlythe only representative statewidestatistical source using actual performanceinformation of the 1992/93 farming season. However, the HAU study does not distinguish farms accordingto their source of irrigationwater. Currently,many farmers supplement canal water with ground water from tubewells which allows a better control of the water applied and higher yields especiallyfor paddy and wheat cultivatedon more than 50% of the net irrigatedarea. In order to conservativelyestimate the benefits of an increase in surface water supplies,yields of wheat and paddy rice have been reducedby 20% to reflect the more unreliablenature of surface water supplies. The yields of the major crops used in the analysis are 3.7-4.5 t/ha for paddy, 1.9-2.5 t/ha for basmati rice, 1.4 t/ha for bajra, 1.5 t/ha for cotton, 3 t/ha for wheat, 0.9 t/ha for mustard, and 0.4 t/ha for gram. Cropping patterns are establishedfor Bhakra and WYC for the kharif and rabi season based on the HAU study. A different set - 181 -

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of cropping patterns has been assumed for the unirrigated land. Lack of water forces farmers to grow the drought-resistant crops bajra and jowar and to leave about 50% - 80% of the land fallow (Table 4).

10. Economic import and export parity prices are calculated based on the World Bank Quarterly Review of Commodity Markets, November 1993 (Table 5). World market prices for internationally traded commodities are based on price projections for the year 2000 in constant end-1993 prices. Export parity prices have been calculated for cotton and sugarcane, import parity prices for paddy, wheat, sorqhum, maize and fertilizer. Although India is a marginal importer . addy and wheat, Haryana is one of the major paddy and wheat producers in India and exports these crops to other Indian states. Therefore internal transport costs from Haryana to the major consumption centers are subtracted from the import parity price of these two products. All other non-internationally traded products have been adjusted using a standard conversion factor (SCF) of 0.8. The economic prices for seeds, labor, draught power, machinery. and incremental working capital are based on financial prices adjusted by the SCF.

11. The economic crop budgets are calculated by adjusting the financial crop budgets according to the price differences between the financial and the economic prices as shown in Table 6. The economic costs of irrigation water only reflect actual delivery costs of aurface water to the fields. They vary for the different crops and range from Rs. 100 to 1600/ha and year. The estimated water delivery costs are based on a cost recovery study by McGahan (available in project files). The net incremental benefit is realized by switching to higher value crops and by reducing fallow on the previously unirrigated land. It averages about Rs. 18,000 to 19,000 per hectare and year in WYC and Bhakra, respectively.

12. Results. The increase in surface water supplies would allow expansion of the irrigated area by about 117,000 ha in Bhakra and 39,000 ha in WYC, in the rabi and kharif seasons combined. The expansion in irrigated area is solely based on irrigating currently unirrigated land within the CCA. The expansion of irrigated area has been calculated by dividing the increase in total water supplies through the gross irrigation requirements per hectare at the outlet head. These irrigation requirements are based on established crop water requirements as provided by HID assuming an overall irrigation efficiency of 50%. The total incremental net irrigation benefit of the project is then calculated by multiplying the net incremental benefit per hectare with the additional area irrigated. After project implementation, annual irrigation benefits would amount to Rs. 1498 million at end-1993 prices (Table 1). At full development total fooegrain production of rice, bajra, maize, wheat, gram and barley would increase by 184,000 t per year. - 182 -

AnngX 14 Page 5 of 13

13. The analysis allows a tentative calculation of efficiency prices for water. Depending on the season, the incremental benefit per 1000 m3 of irrigation water varies between Re. 1000/'00Om3 and Rs. 2300/'000. rn the economic analysis the opportunity cost of land is the net value of production foregone when the use of the land is changed from the without-project to the with-project use. To calculate efficiency prices of water, the rental value of the land has to be subtracted from the net incremental benefit. The rental value of irrigated cropland has been assessed in the HAU farm management data base as being about Re. 1500/ha/season on average. Actual efficiency prices (in economic end 1993 prices) could be estimated to be about Rs. 800 to 2000 per 1000 m3 of irrigation water. Even though these values are only tentative estimates and have to be interpreted with caution, the difference between actual water prices and the value of the water is large. Farmers interviewed on site have confirmed that canal water is seriously undervalued when compared to the costs of other farm inputs.

Flood Control Benefits

14. Rask2round. About 2 million hectares in Haryana are prone to flooding and HID has spent about Rs. 100 million annually for flood control measures in the 1980s. In the last four years these expenditures have dropped to only Rs. 80 million and show a further deteriorating trend. Over the last six years damage to agricultural crops and livestock, irrigation facilities, housing, and infrastructure accumulated to Rs. 13,815 million. The loss of human life is not included in the valuation.

Flood Damage in Razyaza (HID, 1993)

Year Area Damage to Damage to Damage to Public Loss of Affected Agriculture Hou-ing Utilities Human Lives (ha) (Rs. million) (Re. million) (RS. million) (No.)

1988 726368 3430.9 507.1 291.6 40 1989 3542 10.4 0.8 15.1 1 1990 85744 98.3 29.3 8.1 12 1991 6 0.2 nil nil nil 1992 nil nil nil nil nil 1993 n/a 7192.6 1146.8 1084.0 n/a

Total 10732.4 1684.0 1398.8

15. Methodonogy anidRenuth. Flood control benefits are defined as the reduction of expected annual flood damage due to project activities. The drainage system and river control works are important measures to prevent flood damage to agricultural production and existing infrastructure. The one-time rehabilitation of the drainage system and existing river control works would increase the flood protection standards considerably. Additionally, increasing the future - 183 -

Ann&A 14 Page 6 of 13

expenditures for O&M of the whole system would ensure a higher standard of flood control in the future. PID engineers estimate that all the damage to housing and 50% of the agricultural losses could have been avoided if the flood control works and the drainage system would have been better maintained. Therefore, it is estimated conservatively that total flood damage would be reduced to 50% after project completion. Based on the existing information of flood damage in the last six years, it is estimated that after project completion total flood control benefits on average would amount up to Rs. 1150 million annually.

Summary Results of RConomic Analysis

16. The overall Economic Rate of Return (ERR) calculation is based on the following assumptions: (i) all costs are in constant end-1993 prices: (ii) project benefits and costs are calculated for 30 years; (iii) quantifiable net returns are from incremental crop production and from avoiding flood damage: (iv) incremental O&M expenditures would remain constant over the 30 years; (v) the opportunity cost of capital is 12%; (vi) project implementation is over 6 years.

17. The economic cash flow is presented in Table 7. Total benefits co.sist of irrigation benefits (56% of total benefits) and flood control benefits (44% of total benefits). The project costs used in the ERR calculation are calculated in end-1993 prices and include physical contingencies. Project costs do not include the costs for the construction of the Hathnikund Barrage! or the extension of minors2 (12% of total base costs). Neither of these two project activities increases surface water supplies or reduce flood damage. The recurrent costs after completion of project implementation in yea.:2000 reflect the estimated incremental expenditures of Rs. 310 million for maintaining the high O&M standards of the total canal and drainage -ystem in Haryana. The incremental O&M expenditures are estimated to total up to 30% of total O&M expenditures from year 2000 onwards and additionally include all non-staff recurrent costs for institutional support, modernization and rehabilitation. The overall ERR for the project is estimated to be 18% and the Net Present Value of the project is Rs. 4062 million in end-1993 prices.

1/ The Hathnikund Barrage will replace an old existing barrage. The replacement is necessary because a collapse of the old barrage might cause considerable damage to crops, irrigation facilities and human lives; for an analysis of benefits, see paras 20 to 24.

2/ The project proposes to construct and extend minors within the existing irrigation command to improve the equal distribution of irrigation water in the command area. This component will only be implemented after the completion of the State water Master Plan, and has therefore not been included into the economic analysis. - 184 -

Agagx 14 Page 7 of 13

SensitivityAnalysis

18. A number of scenarioswere tested to establishthe project's viabilityas shown in the table below. Cost overruns and delays in accrued incrementalbenefits from irrigationcould occur, notwithstandingsafeguards built into the project.

Sensitivity Analysis

Spmt8 ERR NPV fRs . m4ll4nn)

Base case 18% 4062 Benefits decreased 10% 16% 2596 Benefits decreased20% 14% 1126 Benefits lagged 2 years 13% 935 Costs increased10% 16% 3003 Costs increased 20% 14% 1940 Benefits decreased 10% & costs increased10% 14% 1532

19. Switchingvalues show that total project costs would have to increaseby 38% or total benefits would have to drop by 27% for the NPV to fall to zero. This is unlikely because of the long experience with previous projects, the thorough preparationand detailed work in estimatingthe project costs by HID. As for benefits, relatively conservativeestimates of irrigationbenefits and the flood damage have been applied. Irrigationbenefits would have to drop by 48% or flood control benefits by 63% for the NPV to fall to zero. Overall, the project is robust in economic terms.

Benefits of the Hathnikund Barrage

20. BAckg.ound. The HathnikundBarrage is a replacementstructure for the old Tajewala headworkswhich diverts water from the Yamuna River to Haryana. Tajewala headworkswere constructedduring 1873 to 1877. The estimatedlife of such a hydraulicstructure is normally taken as 100 years. The headworksis of vital importancebecause it supplies Delhi with all of its water requirements. It diverts up to 16,000 cusecs of water from the Yamuna River providingtwo-thirds of Haryana'sCCA with canal water. The Tajewala headworksare not safe enough to withstand major floods. During the flood of 1978 it was damaged badly and on the verge of breaking if the high flood had persisted for a few hours more. In 1983 a high-level expert committee appointed by GOl and headed by the Central Water and Power Commission stated that the structure is outmoded and inefficient. The committeerecommended the constructionof a new barrage about 3 km upstream of the Tajewala headworks after a detailed examinationof various alternatives.A rehabilitationof the Tajewala headworksat the old site is not viable because it does not allow a reductionof the frequent and high fluctuationsof the water flow. These - 185 -

AnnBL & Page 8 of 13

fluctuationseffect adverselythe supply of irrigationwater to the Western Yamuna Canal.

21. Since the HathnikundBarrage provides a replacementfor the old and outmoded Tajewala headworks it has no direct, but several indirect benefits. The HathnikundBarrage would: (i) avoid the risk of a major break of the Tajewala headworkswhich would disrupt considerably irrigationsupplies to Haryanaand domestic water supplies to Delhi; (ii) permit a higher water offtake from the Yamuna river for irrigation in Haryana (withinthe limits of the interstateagreement on water sharing): (iii)provide sufficientpondage to absorb fluctuationsin the river flow and ensure smooth suppliesto the offtaking irrigation channels; and (iv) provide a site for future power generation (16 MW) by utilizingthe head availablebetween the HathnikundBarrage and Tajewala headwork.

22. Methodologyand Results. Lack of rigorous data prevents a detailed quantificationof all the benefits involved in replacingthe headworks. Thereforethe economic analysis focuses on the impact of a major breach of the old Tajewala headworkson irrigatedcrop production in Haryana. Consideringthe age of the headworksa major breach in the flood season (kharif)can be expected within the next 5 to 15 years. This would result in the loss of a large proportionof irrigatedcrops in the NYC area. It is assumed in the analysis that the damage would be confined to one kharif season because the headworks would be repaired temporarilyuntil a permanent structurecould be built. Thus, assuming 105 supply days in kharif, a breach would result in loss of irrigation to about 550,000 ha in NYC. Conservativelyassuming that farmers are able to harvest one rainfed crop from their fields, farm income would be reduced by approximatelyRs. 10,000 per hectare from loss of irrigation in that season. The total loss for 550,000 ha would amount to Rs. 5360 million (in end-1993 prices). Total cost of constructingthe Hathnikund Barrage is Rs. 1960 million (incl.physical contingencies)over the four year constructionperiod.

23. The ERR calculationfor the HathnikundBarrage is based on the following assumptions:(i) a major breach of the barrage would occur in the next 5, 10, or 15 years (threeseparate projectionsare estimated); (ii) project costs are calculatedover 4 years of construction;(iii) quantifiablenet returns are from preventingthe loss of irrigated agriculturalproduction on 550,000 ha in kharif in one year; (v) temporary repairswould be initiatedimmediately to prevent further productionlosses; and (vi) the opportunitycost of capital is 12%. If a major breach would occur within the next five years (i.e.one year after completion of the Hathnikund Barrage) the ERR is estimated to be 40%. A breach after 10 or 15 years would result in an ERR of 14% and 8%, respectively. The average of the ERR over that period is 15%. The assumptions on the value of the economic losses due to a breach of the Tajewala headworks are extremely conservative as they do not include the costs of alternatively transporting drinking water to Delhi. - 186 -

&Unea 14 Page 9 of 13

24. Includingthe costs and benefits of the HathnikundBarrage changes the overall ERR for the project accordingly. Assuming a major breach of the Tajewala headworksafter 5, 10, or 15 years the ERR for the whole project is 20%, 17%, and 16%, respectively. If only the costs of the barrage are included in the calculation,the overall ERR drops to 15%.

etnsitivlty hn-aly.i including Eathaikund Barrage

2ak4t mm NPV 1Rl.. mlliann

Costs and Benefits of HathnikundBarrage included Break after 5 yrs 20% 5557 Break after 10 yrs 17% 4241 Break after 15 yrs 16% 3495 Only costs of HathnikundBarrage included Base case (Hathnikund) 15% 2515

Non-qUanifiable Proeclt Benefits

25. Several long-termbenefits have not been included in the analysis: (1) Modernizingcanals and water courses also reduce water-loggingand limit the rise of the water table which have considerable benefits for the environmentand for future crop production. Currently about 65 percent of Haryana is unoorlainby brackish to very saline groundwater. Seepage losses both from the conveyance system and in the field are resulting in a rapid rise of the water table. Areas with high groundwater levels may already account for 0.4 Mha. Eventually, up to 1.5 to 2.0 Mha may be affected by high water levels, water logging and, in the long run, soil salinization,ultimately reducing crop production. It is estimatedthat, depending on the levsl of salinity,yields of wheat could be 7-13% and yields of rice 4-7% lower than on non-saline soils. Another study found that salinity accounts for as much as 72% of the differenceof gross farm income between normal and salt-affected plots in the Sharda Sahayak irrigationproject in Uttar Pradesh. The long-termbenefits of slowingdown the rise of the water table can not be quantifiedbecause the cause-effectrelationship between system modernizationand changes of the water table have not been established scientifically. However, literaturesources suggest that water table control as a means of reducing salinizationis far more cost-effective than reclaimingsaline lands. (ii) In other areas of Haryana, excessive groundwaterpumping has led to a severe overdraftof the groundwater resources. The project supports the formulationof a groundwater regulatory enforcement program to carry out the GOH's regulatory policies and enacted legislation to sustain groundwater levels. (iii) Non-agricultural users would equally benefit from improvements of the conveyance systems. Substandard canal maintenance has often led to temporary shortages in water supplies to municipalities and rural areas for drinking water and industrial purpos-s. The benefits of ensuring - 187 -

&nnaX 14 PagT.10 of 13 drinking water supplieseven in times of water scarcityby improvingthe management of the conveyancesystem are equally hard to estimate but are quite substantial. (iv) Finally, wastewaterdischarge is currently accepted into the canals. As canal water is often used for drinking water, this poses a threat to human health. A comprehensivewater quality monitoring network is planned to improve water quality management.

Financial Analvsia

26. The overall financialposition of Haryana is sound and the State's financialmanagement ranks as one of the best in the country. The fiscal deficit remainswithin a range of 3% of the SDP. Nevertheless, expenditureshave exceeded revenues in the water And power sector. The Government of Haryana (GOH) is determinedto reverse this trend, emphasizingpricing policies and financialaccountability in the water and power sectors.

The Water Sector

27. Background. Water charges for bulk water supplies to irrigation, industriesor mun-cipal uses were increased last year for the first time since 1976, effectivelydecreasing water charges in real terms. Revenues have not kept pace with expenditures,thereby increasingHID's annual budget deficit to about 80% of the non-plan expendituresor to Ps. 754 million in absolute terms (Table 8). The decline in revenues has not only deepened the financialdeficit but has also created a situationwhere the Haryana IrrigationDepartment (HID) could not fully maintain the existing irrigationand drainage system under their responsibility. The under-fundingof maintenanceactivities caused leakages,breaches and a reductionof the safe carrying capacity of major canals.

28. In line with it's new policy, GOH has approved a cost recovery plan prepared by HID to recover the O&M costs of HID's services from the beneficiaries. HID has already increasedwater charges to industrial users and to the Union Territoryof Delhi. The targeted six-year program involvesprogressive increases in water rates to enable ful cost recove-y for all operatingand maintenanceexpenditures by the year 2000. The cost recoveryprogram is described in detail in Annex 10. This would allow HID to decrease state subsidiesto the sector and to improve future maintenanceof the conveyor system. The only exemption from the cost recovery program are marginal and drought-proneareas in the southern part of the state which will continue to receive a transparentand targeted subsidy in the form of water deliveriesthrough a costly system of lift canals. The bulk of this water is used for village water supplies and for irrigatinga very small proportionof the area under irrigationin the state (2% of the area irrigated). The lift canal areas are consequentlyexcluded from the followinganalysis. - 188 -

hntmtli Page 11 of 13

29. MethodolTaiesnnd. nfinitinns. The objective of the financial analysis is to assess the impact of project activitieson the financial situationof HID over the next six years. The expected revenues and expenditures as laid out in the six-year program of HID (with-project scenario) are compared with an estimated situation that would have occurred without the project activities (without-project scenario). Operation and maintenance expenditures are identified in the RID budget as "non-plan expenditures". This category includesall opexation and maintenancecosts broken down by various service categories. It includesall recurrentexpenditures for administration,supervision, workmen, vehicles, equipment, electricity, and all similar costs. Net investmentsand rehabilitationare identifiedas "plan expenditures". These are expendituresfor improvementand major re?>airsof facilities that are not associatedwith a major capital improvementproject.

30. Without-PXoj.ct. Th. without-projectscenario is based on a continuation of the revenue and expenditure pattern as shown in Table 8. It is assumed that both water charges and expenditures would increase annually by 4% up to the year 2000. Thus, the budget defIcit of HID would continue to increase in absolute terms up to Rs. 958 million and would reach an estimated total amount of Rs. 5500 million over the next six years (Table 9j. This is a conservative estimate because HID's expenditures have been increasing by a larger proportion, especially staff costs.

31. with-PrjiecQ. In the with-projectscenario financial stabilization of HID's budget would be reached in the last project year where revenues would be higher than non-plan expenditures. This positive development is based on changes in three important fields due to WRCPactivities. First, non-plan expenditures for operation and maintenance of the conveyor system would increase considerably as compared to the without-project scenario resulting in improvements of HID's services. Second, total revenues from water charges would increaseabout ten-fold over the project period due to HID's efforts in improvingcost r>^overy for its higher quality services. Third, an increase in revenues from the irrigationsector can be expected, as system modernizationand rehabilitationlead to water savings and a consequentincrease in area irrigatedand revenues from water charge collection. These projectionsare based on the detailed cost recovery program for the project period as prepared by HID.

32. Rsaulta. The project will generate a net financial return to GOH in terms of reducing HID's budget deficit by about Rs. 3600 million over the next six years (Table 9). Whereas in the first year expenditures would exceed revenues by Rs. 730 million, six years later the trend in reversed and revenues would slightly exceed non-plan expendituresby Rs. 77 million. If the program is implementedaccording to schedule HID would achieve a balanced budget and reverse the actual and increasing dependenceon external financingfor recurrentexpenditures. The small budget surplus inithe last year of project implementationwould allow - 189 -

Annax 14 Page 12 of 13

HID to partly finance future net investments from own revenues. However, even though HID plans to recover full capital and O&M costs for all new construction for non-agricultural services, GOH would continue to finance all net investments in irrigation in the near future.

33. Sensitivity Analysis. The major risk under the project is associated with the success of the cost recovery program. Sensitivity analysis shows that if cost recovery is 10% less than that anticipated, total returns would reduce by 15%. If total non-plan expenditures increase by 10% over the six year period, total returns wouid reduce by 20%. Assuming that the increases of water charges are delayed by one year, total returns would reduce by 37%. Even thoughithe cost recovery program, if implemented, does improve the financial budget of HID, success depends critically on the timely introduction and full recovery of future water charges.

34. Besides delivering bulk water to consumers, HID provides a number of other services like flood protection, storm water disposal, subsurface agricultural drainage and waste water disposal. These services are generally provided and levied by separate entities in other countries like the US and Germany. HID currently does not levy a charge for these important services but, as part of the project activities, proper cost allocation mechanisms would be worked out in the new administrative unit. When these plans have been approved by GOH, another important revenue source for HID would be created. Further reductions of the operation and maintenance costs can be expected from turning over the responsibility of watercourse maintenance to the farmers after gaining experience in pilot areas. However, turnover of watercourse maintenance is likely to be cost-neutral because the reduction of maintenance expenditures would be matched by a proportional reduction of HID's water charges to the farmers.

The Power Sector

35. Past Trends. The budget deficit of the Haryana State Electricity Board (HSEB) increased considerably over the last years (Table 10). In part, the deficit is caused by a bad payment record and in part by not charging the long run marginal costs of power production. In fiscal year 1992/93 HSEB had receivables equivalent to 9.7 months and has to finance these by not paying their main suppliers (e.g., Coal India, National Thermal Power Corporation). Most of these arrears originate in agriculture or state government departments. The agricultural sector consumes nearly one-half of the total electricity produced but pays the lowest rate for energy use (Table 10). Even though the power rates charged to agricultural users have increased over the last three years, they would have to be raised considerably (up to Rs. 1.5/kwh) to meet the long run marginal costs. The subsidy on account of supplying rural areas (estimated at about Rs. 3500 million in fiscal year 92/93) is reaching unsustainable levels, since tariff increases are not adequate to cover the increase in average cost of supply. - 190 -

Amnax 14 Page 13 of 13

36. FuturA PromoectA. In line with the new policy, GON has agreed to reduce the deficit of HSEB by designingan action plan to eliminate the arrears of governmententities. Under this scheme, HID has agreed to repay fully its arrears to HSEB by March 1995. HID has also agree%..to raise considerablythe charge for public tubewellsto Rs. 1.42/kwh and by 12% annually thereafter. Currently,less than 1% of all tubewells are operated by public institutions,so that these plans will only reduce HSEB's budget deficit marginally. Regarding the more than 380,000privately operated tubewells,a general commitmentwas obtained from GOH, that the power rates for all unmeteredtubewells would be increasedto the equivalentof 50 paise/kwh- The limited impact of the WRCP on energy consumptiondoes not allow a quantitativefinancial analysis.

37. In view of the financialdifficulties faced by both government institutions, it is important that the envisaged cost iacovery programs in both sectors can be implemented fully and on time. This will not only reduce the burden on the state budget but also increase the long- term quality standards of the services provided in the water and power sector and lead to more optimal use of water resourcesand power. - 19 -

INDIA Table I

HARYANAWATER RESOURCES CONSOUDATION PROJECT EstimatingIrration Benefits

SHAKRA WYC TOTAL kharif rabi kharif rabi Reductionof seepagelosses 1) Modemizationof existingcanals (MmA3) 103.60 93.00 60.70 54.80 312.10 2) Constructionof feeder canal (Mm^3) 15.80 32.60 48.40 3) Liningof watercourses (MmA3) 126.20 113.20 35.30 31.90 306.60 Increasein actualcarrying capacity of canals 4) Rehabil0tationof canals 142.90 142.90 285.80

5) Incrementallncrease In Surface Water (MmW3) 372.70 349.10 111.80 119.30 952.90

6) Irdgationrequirement per hectare (mA3) 7082 6437 7417 5058

7) Expansion of Irrigatedarea (ha) 52623 64206 15073 23585 155489

8) IncrementalNet Beneit (Rs/ha) 6896 12487 9745 7943

9) Total Incremental Net Beneft (Rs M) 302.89 800.45 146.89 18735 1497.68

Notes: 1) 525cusec saved annualy by reducng seepage sses, asmng 278fui supplydap InBhaba and 200 wdlsUpphr days In wYC. 2) 276cusecs saved annually by reducinseepage losses, assuig 72ful supplydays In WYC. 3) 498 cusecssaved annuallyby rducin sePag losses,as n 278fuh supply day in Bitac ad 200u supplydws inWYC. 4) Safecanying capacity of Neawnabrtah nreasesby 800 cusecs annually. assuming 148 fuh supply days for higaion in Bhba 5) Sumof rows1 2.3,4 6) Gross igatlonrequremts atoutlet heat asestimaed by HID asswming aon o eiciencyof fte wholesysem of C0% 7) IncrementalInrease in sufacewaer supply to rIgte previouslyunfrgaed oplndwitin te twaonnds. Deviderow 6/ row5 8) SeeTable 4 9) lffiga00nbenefit calculated by muflpyng rows 7 and8. INDIA

HARYANAWATER RESOURCES CONSOUDATION PROJECT CropfudgeSt caclated withfinancial and economfc pnces. VWestem Yamuna Canal Command

FINANCIALPRICES KHARIF RABI Rs/ha Paddyfine Basmatl CottonAm Baira Jawar Wheat Gram Baf,ey SunflowerMustard Barseem Crop 16998 19380 15126 2976 9917 12977 3809 7701 14235 8512 18073 By-Product 247 304 348 1359 0 2549 284 1539 0 0 0 GrossRetum 17243 19683 15475 4335 9917 15526 4073 9240 14236 8512 18073

Seed 371 408 257 158 501 714 445 380 776 128 1220 Nitrgen 1084 474 598 153 356 526 12 89 659 390 474 Phosphorus 496 190 222 20 30 e72 37 49 672 385 190 Potassium 62 79 2 0 0 S4 0 0 0 2 12 Plantprot. 998 274 122.3 27 5 0 10 0 69 89 0 Fieldworks 1) 3100 3290 3048 2137 1613 3364 1181 3028 2591 2280 2949 IrrigatIon 2132 1927 776 136 830 1198 54 832 795 682 2023 Inc.work cap. 2) 408 348 333 128 158 346 82 215 314 183 380 Misc. 94 74 119 57 77 77 52 62 54 42 77 TotalVar. cost 8744 7064 6583 2816 3369 8900 1872 4456 5921 4182 7326

GrossMargin 8499 12619 8892 1519 6648 8536 2201 4784 8314 4330 10747

ECONOMICPRICES

KF1ARIF RABI RsMha Paddyfine Basmab' CottonAm Bajra Jawar ,Wheat Gram Bartey SunflowerMustad Barseem Crop 22163 15504 23597 5000 7934 20660 3047 6161 11388 6809 14458 By-Product 158 243 279 1087 0 1631 211 1231 0 0 0 GrossRetum 22321 15747 23876 6087 7934 22291 3258 7392 11388 6809 14458

Seed 237 326 206 127 401 457 356 304 620 103 976 Nibogen 2212 1209 1524 391 907 1073 31 227 1682 995 .209 Phosphorus 294 141 165 15 22 398 27 37 497 285 141 Potassium 55 88 3 0 0 83 0 0 0 3 14 Plantprot. 798 274 1228 27 5 0 10 0 59 89 a Fleldworks 1984 2632 2438 1709 1290 2153 945 2423 2073 1824 2359 Inrgaton 427 534 559 87 87 225 324 255 302 302 1820 inc.work. cap. 261 279 267 103 126 221 65 172 251 146 304 MiS= 60 59 95 45 61 49 41 49 43 34 e1 TotalVau. cost 6328 5542 6484 2503 2900 4659 1800 3486 5528 3780 8685

GrossMargin 3) 15993 10205 17392 3584 5034 17632 1459 3926 5860 3029 7774

Soune:Haryana Agriculttral Universdy, Directorate of ExtendsltEducvaftn a e Finandalparya farmig Uason19v2es3 D i) nancalt arc,la"r.mi sastne. 9O9193 rin bwttd ftrwe p t t 2) ttfnetotwokc twpiw edtas12%/yewfoto?pT"t tildp'mls on tle 3) Gl ilam andtot tben bJCp fi to otreat Wl 0n rdtcd 2O lht oi vilh IlDMIA

ARYANAWTER RESOURCESCONSOLIDATION PROJECT CropBudget cauated wi financaan onomicpic shab Command

FINANCILlPRtCES KHMF RABI Rsaf Paddyfine eme Cot Am eba .law Maize Sugare _ Wh Mustard Sunflower Bareem 19184 Crop 1.1622 17206 13797 3011 9638 3851 26194 1196o 82e6 131T0 0 By-Product 210 368 818 2076 0 368 1193 2256 0 0 826O 13190 19184 GrossReturn 14832 17574 14416 S0S6 983 4219 27387 U235 1118 See$ 427 613 163 341 254 "1o 4478 74m 341 719 es8 Nitrogen o52 403 452 148 259 361 753 8'4 437 442 606 440 Phophorus 516 291 247 12 82 114 766 734 682 0 0 Potassium 69 94 0 0 0 0 116 0 0 371 0 Pla prof. 163 282 929 42 0 190 163 s 0 3726 Fid works 1 3097 3085 3083 2023 1640 1689 S224 3372 3248 2878 958 7499 Irrigtson 2016 1798 405 49 385 0 1813 1102 692 631 bncwork cap. 2) 356 333 277 116 124 126 1423 351 220 321 72 64 Min 82 77 37 0 64 57 64 54 42 13963 Totl Var. cost 7358 6975 6692 2732 2799 2757 14800 7237 6641 638e 6625 s231 GrossMargin 7474 1os99 8823 2354 7040 1482 12587 6996 2618

ECONOMICPRICES RABI ' KHARIF tj Reiliea Paddyfin bamats ColtonAm Saira _ we Maio suPcnw V*at Mustard Suwlowe earsen 10652 1s348 Crop 19066 13785 21624 S068 7870 6046 33a29 10071 6608 0 0 0 By-Product 168 368 61s 2075 0 388 1193 1604 10652 1s346 Groan n 19238 1433 22141 7133 7870 414 34722 20S75 6608 273 57s 833 Seew 273 490 130 273 204 168 3582 477 1489 Nit n 1330 1027 1163 378 661 920 1921 1784 111s 1127 325 Phoq**u 306 216 183 9 60 84 587 434 490 448 0 Potssulm 61 104 0 0 0 0 129 0 0 0 0 PlaProt. 130 282 929 42 0 190 163 4 0 371 296o Fladworks 192 2468 2488 1618 1312 1359 4179 2158 2598 2302 386 6928 r'igaton 564 682 715 111 111 364 1668 308 386 176 257 426 km work.cap. 228 267 221 93 99 101 1138 224 43 MIN_ 40 61 30 0 43 45 51 35 34 57 6522 12094 TotalVaer. cost 4896 s559 e827 2524 2491 3232 13397 5424 5070 5030 3264 Grs Margin3) 14339 8537 18315 4609 5360 3182 21325 15451 1537

Soure: HwaryanaAgriculturalUn dy,Osecorate of ExtensionEducati Fanidal pr, frming season1992W93 t) hcJtbbrdwwmfr.#theox6*wr_dt n t@ 2) IserIlon woritigcepwalasocqLad s 2%fyw frtrepeildlecrop reanson Ore115 3)Ga _lat"iu i oa aas ai opdyadalu w te eae y2%to 1010 laa rdda otie traaaabla - 194 -

INDIA Table 4

HARYANA WATER RESOURCESCONSOUDATION PROJECT Yields, cropping pattem, and aggregatedcrop budge.s

A. IRRIGATED LAND Crop Perce it of Gross Margin Gross Margin Yields total area Financial Prices Economic Prices (Uha) (tfha) (Rslha) (Rslha) (Rstha) (Rs/ha) Khakra WYC Bhakra WYC Bhakra WYC Bhakra WYC KHARIF Paddy fine 1) 3.7 4.5 24.08% 10.46% 7474.00 8499.00 14339.00 15993.00 8asmati 1.9 2.5 24.34% 23.42%Me 10599.00 12619.00 8537.00 10205.00 Cotton Am. 1.4 1.6 1.65% 40.66% 8823.00 8892.00 16315.00 17392.00 Bajra 1.4 1.3 3.29% 18.54% 2354.00 1519.00 4609.00 3584.00 Jawar 38.9 38.9 13.61% 6.19% 7040.00 6548.00 5380.00 5034.00 Maize 1.2 - 28.78% 0.00% 1462.00 0.00 3182.00 0.00 Sugarcane 56.6 56.6 4.2S% 0.74% 12587.00 12587.00 21325.00 21325.00 Total (khaniY 100.00% 100.00% 6516.16 8238.92 8505.6F 12266.59

RABI Wheat 1) 2.9 3.1 77.64% 47.82% 6998.00 8536.00 15451.00 17632.00 Mustard 0.9 0.9 4.58% 29.51% 2618.00 4330.00 1537.00 3029.00 Sunflower 1.5 1.7 2.97% 0.71% 6825.00 8314.00 5030.00 5860.00 Barseem 67.2 66.4 14.81% 1.72% 5231.00 10747.00 3254.00 7774.00 Gram - 0.4 0.00% 19.03% 0.00 2201.00 0.00 1459.00 Barley - 3.1 0.00% 1.21% 0.00 4784.00 0.00 3926.00 Total (mba) 100.00% 100.00% 6530.53 6080.14 12697.95 9825.75

Sourco:Gros margi andcroppin patem asProvkded by HAUfor 1992193

B. UNIRRIGATEDLAND Yields (t/ha) Bhakra WYC Bhakra WYC Bhakra WYC Bhakra WYC KHARIF Baira 1.4 1.3 26.00% 35.00% 2354.00 1519.00 4609.00 3584.00 Jowar 38.9 38.9 1.00% 2.00% 7040.00 6548.00 5380.00 5034.00 Maize 1.2 1.2 s.00% 2.00% 1462.00 0.00 3182.00 0.00 Barseem 67.2 66.4 .0.00% 15.00% 5231.00 10747.00 3254.00 7774.00 Faflow - - 62.00% 46.00% 0.00 0.00 0.00 0.00 Total (karit 1220.16 2274.66 1609.36 2521.18

RABI Wheat 2.9 3.1 1.00% 7.00% 6998.00 8536.00 15451.00 17632.00 Mustard 0.9 0.9 5.00% 5.00% 2618.C0 4330.00 1537.00 3029.00 Gram 0.4 0.4 13.00% 26.00% 0.00 2201.00 0.00 1459.00 Barley 3.1 3.1 2.00% 3.00% 0.00 4784.00 0.00 3926.00 Fallow - - 79.00% 59.00% 0.00 0.00 0.00 0.00 Total(rab) 200.88 1529.80 231.36 1882.81

Source:Cropping pterm provied byHO. Cropbudts andyds OMasswumedto be ndcalason tritelnds Might eadto oersmation of under dx end onti

C. NET INCREMENTAL BENEFIT (A-B=C)

(Rs/ha) Financial Prices Economic Prioes Bhakra WYC Bhakra WYC

KHARIF 5296.00 5964.26 6896.29 9745.41 RABI 6329.65 4550.34 12466.59 7942.94 TOTAL 11625.65 10514.60 19362.88 17688.34

1) Yieldsad vaible costshave been reduced by 20% to Me the lowe produc intensity on fieelswthoA addiionaltubewe ngi Yiedswem irto tosedh in the of Haryam rtWon Il project.1983 However,these are consde cons.vl in view o tnea yil8kt ices of more en 3% p.a. forpaddy and wheat documentedover the ts 16 years. INDIA

HARYANAWATER RESOURCES CONSOLIDATION PROJECT Importand Export Parity Prices

Unit EXPORTPAR IMPORTPAR Cotton* SCane Paddy Wheat Sorghum Maize Urea TSP MP

WorldMarket Prce US$ft (Year2000projectfons.1990 prices) 1500 255 255 166 102 105 144 125 107

MUVIndex: Adjustment (Year1990 > end1993) % 1.09 1.09 1.09 1.09 1.09 1.09 1.09 1.09 1.09

WORLDPRICE US$1t 1635 278 278 181 111 114 157 136 117

QualtyAdjustment % 90 90 80 100 65 100 100 100 100

WorldMarketEqulvalent US$/t 1472 250 222 181 72 114 157 136 117

Freight& lnsurance US$1t -70 -35 35 35 35 35 35 35 35

CIFIndia InUS$ US$Sf 1402 215 257 216 107 149 192 171 151.63 InRS 31.50RS/t 44147 6777 8107 6802 3379 4708 6047 5394 4776

PortCharges RSlt -260 -240 240 240 240 240 240 240 240 IntemalTransport RSft -400 -180 -180 -180 180 180 180 180 180 InternalMktg and Hndl RS/ -65 -100 100 100 100 t00 t00 tO t100

ProcessngRtafo % 35 10 62 95 100 100 100 100 100

Whobesalevalue RS/t 15198 626 5125 6614 3899 5228 8567 5914 5296

LocalMarketing & Transport RSlt -70 -50 -50 -50 -50 -50 50 50 50

EconomicFarmgate Price RS/t 15128 576 5075 6564 3849 5178 6617 5964 5346 Farmgateprice per nutrient kg 1) Rs/kg 15.8 12.9 8.9

FinancialFarmgate Price RSft 9690 450 3120 3300 2290 3300 6.2 17.4 8.0

Source:World Bank Quarterly Review ot CommodityMarkets, November 1993 and Haryana II PCR,1993 1) Urea=42% N: TSP= 46%P; MP = 60%K - 196 - Table 6 INDIA HARYANA ATERRESOURCES CONSOLIDATION PROJECT Summaryof Financialand EconomicFarmgate Prices

Crop Financial Economic Unit 1993 2000

Paddyrice 1) RsIt 3120 5075 8asmaffrice 2) Rs/t 8370 6696 Cotton 1) Raft 9690 15128 Bajra 3) Rsot 2290 3849 Jowar 2) Rs/t 275 220 Maize 1) RsAt 3300 5178 Sugarcane 1) Rs/t 450 576 Wheat 1) Rs/t 3300 6564 Barley 2) Rsft 2500 2000 Gram 2) Rs/t 8570 6856 Mustard 2) Rs/t 9000 7200 Sunflowe. 2) RsIt 8500 6800 Barseem 2) Rs/t 300 240 N 4) Rs/kg 6.2 15.8 P 4) Rs/kg 17.4 12.9 K 4) Rslkg 8.0 8.9

Financialprices as providedby HAUfor 1992193farming season. 1) ImporVExportparity prices as calculatedin table5 2) Financialp.ice converted into economicprice usingSCF of 0.8 3) Importpafity price of sorghumreduced by 25%to reflectquality dferential 4) Derivedfrm importparity prices of Urea,TSP, MP INDIA

HARYANAWATER RESOURCES CONSOLIDATION PROJECT EconomicCashl*w Analyss (Rsmillion)

ECONOwMCRATE OF RETURN 18% NET PRESENTVALUE (12%) Rs4062 million

A. BENEFITS years 1 2 3 4 5 6 7 8 9 10 > 30 IRRIGATIONBENEFITS Modernizationof Canals 0.00 80.63 177.57 273.55 345.64 412 73 479.92 479.92 479.92 479.92 > 479.92 Constructionof FeederCanal 0.00 12.09 26.62 41.01 51.80 61.88 71.95 71.95 71.95 71.95 > 71.95 Uningof Watercourses 0.00 80.46 177.20 272.98 344.82 411.86 478.91 478.91 478.91 478.91 > 478.91 Rehablittionof Canals 0.00 78.42 172.72 26B.08 336.10 401.45 466.80 466.80 466.80 466.80 > 466.80 Total 0.00 251.66 554.26 853.86 1078.56 1288.28 1498.00 1498.00 1498.00 1498.00 > 1498.00 FLOODCONTROL BENEFITS PreventingDanage to Agricutre 0.00 150.25 330.91 609.79 643.94 769.15 894.36 894.36 894.36 894.36 > 894.36 PreventingDamagetoPublicUtilit4es 0.00 19.58 43.13 66.44 83.93 100.25 118.57 116.57 116.57 116.57 > 116.57 PreventingDamage to Housing 0.00 23.58 51.92 79.99 101.04 120.68 140.33 140.33 140.33 140.33 > 140.33 Total 0.00 193.37 425.87 6S6807 828.72 989.86 1151.00 116100 1151.00 1151.00 > 1151.00

8. PROJECTCOSTS

INSTITUTIONALSUPPORT InvestmnentCost 137.95 188.17 174.82 5.53 0.4e 0.51 Recurrent Cost 1) 97.65 98.23 98.34 98A9 98.53 98.52 19.70 19.70 19.70 19.70 > 19.70 Total 235.80 288.40 273.24 104.02 98.98 99.03 MODERNIZATION InvestmentCost 1136.27 1328.82 1239.08 621.15 532.87 539.93 Recurrent Cost 1) 99.97 114.90 113.50 111.88 66.60 66.72 13.34 13.34 13.34 13.34 > 13.34 Total 1238.23 1443.72 1352.57 733.03 599.47 606.65 HathnikundBarrage 578.30 672.30 577.32 131.85 0.00 0.00 Extension of Minors 31.33 101.48 128.49 0.08 0.08 0.07 Total without Hathn. & Ext of minors 626.60 669.95 646.77 601.10 599.39 606.57 REHABILITA ION InvestmentCost 570.30 574.88 435.95 344.30 319.35 130.10 Recurrent Cost 1) 96.69 102.74 85.63 71.06 68.28 49.30 9.88 9.86 9.86 9.86 > 9.86 Total 666.99 677.61 521.67 415.28 387.63 179.39 IMPROYINGOPERATIONS & MAINTENANCE InvestmentCost 357.84 463.49 444.51 363.07 382.33 360.53 Recurrent Cost 2) 533.86 556.40 573.42 575.84 576.00 576.30 281.05 281.05 281.05 281.05 > 281.05 Total 891.70 1019.89 1017.92 938.90 938.33 936.83

TOTAL PROJECTCOST 3) 2420.e9 2653.85 2459.60 2056.30 2024.33 1821.82 310.61 310.61 310.61 310.61 > 310.61 TOTAL PROJECTBENEFITS 0.00 446.03 980.13 1509.93 1907.28 2278.14 2649.00 2649.00 2649.00 2649.00 > 2649.00

1 ¢ C. TOTAL NET PROJECT BENEFIT -2420.89 -2208.82 -1479.47 -849.37 -117.06 458.32 2338.39 233P39 2338.39 2338.39 * 2338.39

erebovOSM. 1) trtowes only .of eeu.et oost (80% of toUtl reet coss) fom yea 7 to er go. Stl ad aorerodu h t h met coll of I 2) leam OAO&Meturs esUtatd to atoa to 30% 1 totaaOA rcosts.tordg rUl rots as wet a stal ad otam reet oots fom yer7 to yar 30 3) rooArt.cosls o ItSowo sawr &od elnsto 0oMos (CostabrSolS 1114J1994) - 198 -

INDIA Table 8

HARYANAWATER RESOURCES CONSOLIDAl ION PROJECT HaryanaIrrigation Department Budget

(currentRs million) 88/89 89190 90/91 91192 92/93 93/94

Expenditures Non-Plan 423.6 518.0 344.1 712.5 928.5 938.3 Plan 790.3 812.5 963.8

Revenues Watercharges 155.5 135.7 173.1 158.1 179.6 184.3

Balance -268.1 -382.3 -171.0 -554.4 -748.9 -754.0

Source:HID Handbookon irrigationstatitics, July 1993 Note:Financdal budget of 1993/94has been estmated based on infornationprovided by the Ministryof Finanoe Balance= WatercN.arges - non-plan expenditures - 199 -

INDIA Table 9

HARYANAWATER RE3OURCES CONSOLIDATION PR )JECT Projectionof HID Budgetfor 1994/95- 19991U0 (Rsmillior.)

94/95 95196 96197 97/98 98/99 99/00 TOTAL Without Project Expenditures Non-Plan 975.83 1014.87 1055.46 1097.68 1141.59 1187.25 6472.67 Plan 1002.35 1042.45 1084.14 1127.51 1172.61 1219.51 6648.58 TOTAL 1978.18 2057.31 2139.60 2225.19 2314.20 2406.76 13121.25

Revenues Watercharges 189.00 196.50 204.10 212.30 220.80 229.60 1252.30

Balance -786.83 -818.37 -851.36 -885.38 -920.79 -957.65 -5220.37

With Project Expenditures Non-Plan 920.00 1n15.00 1101.00 1186.00 1314.00 1450.00 6986.00 Plan 1328.00 1805.00 168400 1444.00 1446.00 1106.00 8813.00 TOTAL 2248.0n) 2820.00 2785.00 2630.00 2760.00 2556.00 15799.00

Revenues Watercharges 189.00 637.00 788.00 969.00 1192.00 1509.00 5284.00 Add. Water charges 1) 000 3.90 7.80 11.70 14.63 17.55 55.58

Balance -731.00 -374.10 -305.20 -205.30 -107.38 76.55 -1646.43

NetFinancial Benefit 55.83 444.27 546.16 680.08 813.41 1034.20 3573.94

Source:Wthout scenariobased on projectonsof trend as shownin table 9. With scenariobased on projecUonsprovided by HID 1) Additionalrevenues generated by irrigatingmore land throughproject acUvities. Assumedincrease of watercharges for irrigationis 10%per year. - 200 - An & 14 INDIA Table 10

HARYANAWATER RESOURCES CONSOLIDATION PROJECT Budgetof the HaryanaState ElecbicdtyBoard (Rs million)

91/92 92/93 93t94

Expenditures Non plan (Revenue) 6779.9 9046.6 11280.5 Nonplan (Capital) 1424.7 1877.3 2110.7 TOTAL 8204.6 10923.9 13391.2

Revenues Sa'eof Power(Irrig.) 699.0 1066.6 1435.0 Saleof Power(others) 4420.2 5112.2 6840.7 Others 1465.6 1644.8 1800.0 Capitalreceipts 1252.4 1832.4 1164.6 TOTAL 7837.2 9656.0 11240.3

Balance -367.4 -1267.9 -2150.9

Source:Ministry of Finance

PowerConsumption and Tarift

91/92 92193 93194 Energysold Av. Rate Energysold Av. Rate Energysold Av. Rate (%) (PaisetKWh) (°K) (Paise/KWh) (X) (Paise/KWh)

Irrigaton 46.90% 19.24 49.40% 25.50 44.70% 35.00 Industries 22.80% 153.08 22.60% 179.95 25.50% 177.07 Domestic 16.70% 67.79 17.50% 70.09 16.70% 90.00 Commercial 2.60% 139.61 2.70% 149.47 2.80% 185 MO Other 11.00% 408A, 7.80% 38.84 10.30% 66.33

Source:Ministry of Finance - 201 -

Page 1 of 3

HARYANA WATER RiOtRCES CONS TOfM PR0JE(Z

1. Land. Under the project, land valued at US$5.5 million equivalentwould be acquired for the construotionof the HathnikundBarrage, Link Channels, Feeder Channel, and modernization/extensionof minors. All land costs would be financed by GOH.

2. CZvil Works. The project supports civil works valued at US$297.7 million Civil works comprise a replacementdiversion structure;canal and watercourse modernization; rehabilitation works and a limited number of new buildings. with the exception of the diversion structure (Nathnikund Barrage), the works are predominantly scattered and spread throughout the project, and would not attract foreignbidders. Works would be procured followinginternational or local competitivebidding (ICB/LCB)or force account proceduresas follows:

2.1 IC HathnikundBarrage (US$51.3million) would be procured through ICB proceduressatisfactory to the Association.

2.2 LCf (US$197.1million) would include civil works for canal, watercourse and drainage modernizationand rehabilitation. The works would be grouped into convenientpackages for bidding and necessary land would be acquired prior to bidding. All works contractswould be let using standard LCB documentsand followingprocedures satisfactory to the Association. Foreign contractorswould not be precludedfrom participation. Land acquisition,if necessary,and detailed design and engineeringof the works would precede invitationsto bid. Total LCB contractsare distributedaccording to the followingtable:

tUSS mLillionl 0l-0102 ~ >

Total number of contracts (No.) 2,055 380

Average size of contracts (US$million) 0.04 0.3

The majority of the constructionwork involvescontracts of less than US$100,000which explains the high proportionof contractsunder LCD procedures. For all contractsexpected to cost US$1 million or more, contractors would be prequalified under terms and conditions acceptable to IDA.

2.3 For6e Account (US$49.2million) would include all small civil works procurementvalued at US$10,000equivalent or less, up to an aggregate amount not exceeding20% of total LCB. These works would not be suitable for competitivebidding because of the small amounts involvedand scattered - 202 -

Annex 15 Page 2 of 3

locations. The works would be carried out either through force account or may be procured under contractsawarded on the basis of bids invited from a list of at least three qualified contractorseligible under guidelines in accordancewith proceduresacceptable to IDA.

3. Z=upmnt_ . The project supports expenditures on vehicles,equipment and materialsvalued at US$21.2 million. These would be procured as follows:

3.1 The project would require vehicles valued at US$3.5 million. Of this amount US$2.8 million will be bulked and procured following International CompetitiveBidding (ICB)procedures as per Association'sGuidelines. The immediaterequirement of vehicles (20% of total requirements) will be procured followinglocal shopping procedures (usingavailable DGS&D rate contracts)in packages below US$100,000equivalent each, up to an aggregatetotal of US$0.7 million.

3.2 Heavy equipment,mostly for canal and drain maintenance,estimated to cost US$4.2 million and computer equipment includingsoftware aggregating US$9.4 million would be procured through ICB. Other equipment estimated to cost US$4.1 million available locally and readily serviced through local facilitiesin contractsvalued below US$200,000equivalent each would be procured through LCB. For all civil works procured under LCB/ICB contractors would be made responsible for procurement of all materials including cement and steel. If GOH supplies construction materials this will be considered as reserved procurement and the estimated cost of such materials will be excluded from IDA financing (as stated on page 180/181 - Clause 59 of SBD (Major).

4. The Association's standard bidding documents would be used for all procurement under ICB/LCB. For comparing foreign and local bids in ICB, both for civil works and equipment,the qualifyingdomestic bidders would be allowed a margin of preferencein accordancewith the provisionsof paras 2.55 and 2.56 of Bank's Guidelines.

5. Tehnica1 Alsistanca (US93 6 million). Consultancy services estimated at US$3.2 million (overseasUS$1 million) would be contractedon terms and conditionsin accordancewith the "Guidelinesfor the Use of Consultantsby World Bank Borrowersand the World Bank as ExecutingAgency', published by the Bank in August 1981. Other technicalassistance including training, study tours, etc. estimatedat US$0.4 million equivalentwould be carried out either by HID or agencies with relevant experienceand subject to approval by IDA. Of the total amount for technicalassistance (US$3.6million), US$0.7 million would be used for policy support, US$1.2 million for implementationsupport, and US$1.7 million for capacity building.

6. rg=ntal Onrating St ITISSISS 4 mi11Ion). This includes expenditures for staff, vehicles, equipment and energy. The project supports the incrementaloperating costs of vehicles,equipment and energy on a decliningbasis. These would be procured under local shopping. All staff costs would be financed by GOH. - 203 -

A nnx 5 Page 3 of 3

7. Revew of Contracts. All contractsfor civil works and equipment valued at US$200,000and above and all consultancycontracts valued at US$100,000and above as well as first five contracts,both under goods and works and first three consultancycontracts irrespectiveof the value would be subjectedto prior IDA review. All other contractswould be subject to random post review in the field by visiting missions. This will result in about 50% of the project procurementbeing subjectto prior review. The nature of the project which consists mostly of works which have been successfullyimplemented under past Bank projects in the state is such that a higher level of IDA review would not have a significantimpact on procurementquality.

8. The project elements,their estimatedcosts and proposed methods of procurementare summarizedbelow:

summary of Proposed P guremnt Arrangamntn IT1Rg M qumval nt)

Consulting Prngect RAement IlR L.i .ieea - othar mmE 1ntAl 1. Land 5.5 5.5

2. Civil Works 51.3 197.1 49.2 297.6 (q16.2) (162.1) (20.6) (228.9) 3. Vehicles/Equipment 3.1 Vehicles 2.8 0.7 3.5 (2.3) (0.5) (2.8) 3.2 Equipment 13.6 4.1 17 7 (10.9) (3.2) (14.1) 4. Technical Assistance 4.1 Policy Support 0.7 0.7 (0.7) (0.7) 4.2 Implementatinn Support 1.2 1.2 (1.2) (1.2) 4.3 Capacity building 1.7 1.7 (1.7) (1.7) 5. Incremental Operating Cost 28.0 127.4 155.4 (8.6) (8.6) ------__------__------TOTAL 67.7 201.2 3.6 77.9 132.9 483.3 (59.4) (165.3) (3.6) (29.7) (258.0) ______Note:Figures in parenthesis are the respective amounts to be financed by IDA. ICB: International Competitive Bidding; LCB: Local Competitive Bidding; Other: force account, direct contracting, local and international shopping. - 204 -

AMMUm- Page I of 4

TNT

STJRRVTS IO NINLMMAO PN

1. Projent ObQjctiv3s. The primary purpose of the proposed Water Resources ConsolidationProject would be to tackle the broad issues facing the water resourcessector and promote developmentin an efficient,equitaLle and environmentallysustainable manner. The main project objectivesare to: (a) introducewater resourceplanning (includingcontingency planning for droughts)and managementacross all uses of water: (b) enhance agricultural productivityand diversification,and improve equity; (c) assure sustainability of the environment;and (e) improve HID's capabilitiesin all water and related functional areas.

2. Project neacription. The project would be a sector investment loan, financing an agreed state-wideprogram to improve the water distribution system. The investmentprogram would cover: (a) r habitation of the existing canal and drainage systems, and selective lining of canals and water courses; (b) m0derna.At.Qat of canal and drainage system and water courses, replacement of the Hathnikund Barrage, construction/extension of minors: (c) upgraded ogeration and maintenanne (O&M) of the water distribution system; and *d) lnatitnt{onal ntrangthening to support administration, data collection, farmer participation in system maintenance, planning, design, research and training. Investmentswould be supportedby reorganization of the Haryana IrrigationDepartment (HID),reform of O&M standardsand procedures, implementation of full O&M cost recovery,power sector reforms and enhanced beneficiary participationin O&M of facilities. A water policy framework would be developedthrough multi-usewater resource planning and formulation of a State Water Plan (SWP).

ImplAmentation Plan

3. Project Management and Im91Pmentat4bon. All project activities would be implementedby the line units under the reorganizedstructure of HID, while policy and advisory matters would be handled by the responsiblestaff offices. Projectguidance reponsibilitywould rest with the Secretary,Irrigation and Power, who would coordinatewith the State Water ResourcesCommission, the Water RegulationUnit and the Engineer-in-Chief(EIC), HID. The EIC would have the main responsibilityfor coordinationof all activitiesand their implementation. The EIC would be supportedby the Programmingand Budgetting Committee (PBC),and the Offices of the Chief Engineer Coordination (CEC), EnvironmentalAffairs (EA),Water ResourcesPolicy and Support (WRPS),and Quality Assurance (QA). Responsibilities of all units and offices are further described in Annex 3 (an organizationalchart is attached in Annex 3). Attachment 1 provides a table summarizing the implementation responsibilities for the various project activities. Attachment2 presents the implementation schedule of activitiesunder the project. For the HathnikundBarrage, the actual commencement of implementation would depend on the signing of the - 205 -

Page 2 of 4

Interstate Agreement between Haryana, Him-chal Pradesh, Rajasthan, Delhi and Uttar Pradesh; the implementation schedule provides expected dates, and the sequence of actions would remain the same.

4. Procurement Schedule. Procurement actions would include the following:

1. initiate preparation of specifications and bid documents 2. transmit specifications and bid documents to IDA 3. IDA clearance of specification and bid documents 4. issue invitation to bid 5. open bids 6. transmit evaluation report and award recommendations to IDA 7. IDA clearance of recommendations 8. award contracts 9. civil works: construction 25% complete 10. civil works: construction 50% complete 11. civil works: construction 75% complete 12. civil works: construction 1bO% complete 13. equipment: initial delivery at site 14. equipment: interim deliveries at site 13. equipment: final delivery at site

Attachment 3 provide a schedule of procurement actions for the civil works and equipment/vehiclesprocurement under the rehabilitation, modernization and operation and maintenance components.

5. Economic and Financial Analysis. Detailed economic and financial analysis, and risks of the project are described in Annex 14 and in paras 4.12 to 4.15 of the main text of the SAR. The overall Economic Rate of Return (ERR) of the project is estimated at 17%. The Net Present Value (NPV) discounted at 12% (to 1993) is Rs. 3838 million. Overall, the project is robust to significant changes in costs and benefits: benefits would have to drop by 25% or costs increase by 31% for the ERR to fall to 12% (or NPV fall to zero). The financial analysis concludes that the project would generate a net financial benefit to GOH in terms of reducing HID's budget deficit by about Rs. 3600 million over the next six years.

Supervision Plan

6. IDA Contribution to Supervision. To assist GOH in achieving project objectives and to ensure that risks to successful project implementation are minimized through appropriate and timely adjustments, IDA would provide supervision input during project implementation. The project includes organizational and procedural changes as well as a substantial program of physical works. The Supervision Plan provides routine supervision missions at six-monthly intervals, which would review general progress in technical areas such as implementing civil works (including associated issues such as quality control, land acquisition, procurement and disbursement), with supplementation in terms of sociologist/ farmer organization specialist, institutional specialist, programming and budgeting specialist, water resource planner, - 206 -

Page 3 of 4 etc., either visiting independentlyor associatedwith the regular mission. Resources would be roughlyevenly divided between routine and specialist tasks, that is an average of 5-6 man weeks for each per year. Supervision missions would be defined, where appropriate,to coincide with and be support.veof major milestonesin project implementation.

7. ijL;sion Cogmroition. Of the two missions per year, one would focus mainly or acheivementof physical targets, procurement,disbursement and other procedural issues (physicaltargets for the project componentsare given in each associatedAnnex). The other mission would concentrateon the effectiveness of the project's technicaland social activities,and if required,make recommendationsfor changes in the design, organizationand management arrangements. The start up of IDA mission would reconfirm formats required for project accounts and reportsand arrangementsfor procurementand disbursement. The initialmissions would require a mix of technical and institutionalexpertise, while the later missions would be more routine.

8. The fir&t mission (FY94,Second Semester)would be a major exercise, focussingon procurement,disbursement, progranming and budgetting and institutionalissues in particular. The visit would be coordinatedalso with input from the consultantwho has been assisting GOH in review of its organizationalstructure. The output from this mission would provide a framework for actions in the followingsix-twelve months. Attachment 4 provides an indicativesupervision schedule and staff input requirements.

Monitoring and Evaluation

9. DeveloomentTndicators. The various project investmentsand reforms have been designed to help achieve the project objectives. Development indicatorshave been identifiedto assist GOH monitor the progress towards this end. Attachment 5 provides a matrix of the project objectives,the different componentsor reformsthat are designed to assist in acheivingthe objective. The indicatorsto be tracked are defined, and comments given on how the progress in terms of the indicatorsare to be monitored. The indicatorswould include: implementationof HID reorganiza-tionand effectivenessof operationwithin the new structure,preparation and updating of State Water Plan (SWP) and use of its recommendations,improved agriculturalgrowth and productivity,and crop diversification,increased delivery of water and improved services,increased cost recovery from users, water savings, formationof viable WUAs, decrease in water-loggingand salinity,and improved project planning,programming and budgeting.

10. baseline Surveys. To uionitorthe developmentimpact of the project, and measure against the identifiedindicators, baseline surveys would be carried out at project commencement. These would cover the followingaspects: agricultureand income data (crop types, yields, cropping intensity- separatedby irrigatedand non-irrigatedagriculture, farm costs, revenues and net incomes, etc. ), irrigationdata (area under irrigation,irrigation intensity,irrigation efficiency, private sector groundwaterexploitation in sample areas, etc.), water use, delivery, and hydrologicaldata (water - 207 -

Angx1 i Page 4 of 4 supplies to various sectors/uses, water delivery efficiency at different outlet levels and within each distribution level, groundwater levels, drainage, salinity - responsibility of Data Collection and Water Resources Planning Unit (DPU), etc.), beneficiary participation and Water User Association (WUA) activities (number of WUAs formed, activities performed, sustainability and viability, other informal associations, etc.; responsibility of Water Resource Policy and Support Unit), etc. At negotiations, agreements were reached that the baseline surveys would be carried out by GOH by January 31, 1995. During project implementation, the baseline data would be compared to on-going data collected in terms of the development indicators, to monitor and evaluate the progress made towards achieving the project objectives. Under the project, technical assistance of US$30,000 is provided to contract local consultants to carry out the baseline survey. Draft Terms of Reference for the baseline surveys are in Attachment 6.

11. Annual Action Plans. Annual action plans would be developed by the Project Planning Cell under the DPU of HID. The action plans would integrate the recommendations of the SWP (prepared by the SWP Cell of the DPU) and the North West Drainage Study. The action plans would be adjusted as required to reflect changes that have to be made to the initial plans as a result of field experience in project implementation and the recommendations of the above mentioned studies. The action plans would review for each project component and responsible unit the past year's achievements in terms of physical and expenditure targets, by cpzarter,and define that proposed for the coming year. The action plans would provide details of when and how the policy reforms to be implemented the following year would be carried out. Action plans would be an important tool for monitoring the development indicators and project progress. Physical targets for the rehabilitation, modernization and O&M components are defined in the associated Annexes, and would be monitored by GOH and IDA supervision missions.

12. Annual Work Program and Budget. The CEC, in coordination with the Programming and Budgeting Committee would also prepare an annual work program and budget, providing documentation on the following: (a) description of each year's works, schedule of activities, staffing requirements and distribution of responsibilities; (b) proposed expenditures (including consultant and training), compared to previous year's actual expenditure: and (c) financing plan and source of funds (including GOH contribution). Each annual budget should detail: (a) major contracts for civil works exceeding US$200,000 and for ICB for goods; (b) list of schemes turned over in the previous year, and proposed schemes for the next year; and (c) details of revenue budget showing charges for preceding year, amounts collected, and proposed future charges, by customer group or service. The annual budget, revenue, and expenditure plans would allow monitoring of the progress of financial aspects under the project.

13. Mid-term Review. Prior to December 1996, provision would be made for a mid-term review in 1997. The terms of reference for this review would be agreed with IDA and provide for a complete assessment of the progress of the project and facilitate major design changes if necessary. HARYANAWATER RtESOURtCES MH=DATItON PROJECT

ORGANIZATION& MANAGEMENT iATRI

ACTMnTY IMPLElMENTATIONSUPEoR coo RDINATION/AQVISORYAND RESPONSIEBULmES GUIDANCERESPONSliB3U11TES

A. General Engineer-ln-Clliet(EIC) Secretary,IrrigaUon 8& Power, GOH OverallCoordinadon of Projectimplementadon ChiefEngineer Coordination (CEC) StateWater ResourcesCommission (SWRC)

B. InstitutionalSuMoort

1. Insdtutlonal Strengthenina

I) InsUitutionalReform AU,9C Secretary,Irigation & Power,SWRC ii) AdministrativeReform AU,EIC Secretary,Irrigabon & Power iii) Groundwater Regulatory Funcffons E1C,WRU Secretary, Irrigation and Power iv) Procurement& Routine Administration AU,CEC EC v) TumoverProgram EIC.CEC,WSPS Secretary,Irigation & Power vi) CommunicationsSystem DRU,CU,AU C.,CEC 00 vii) ComputerCapacity Upgrade AU,CU EIC,CEC viii) Office& HousingConstruction DRU,CU EIC,CEC

2. Planning& DataCollection

I) AgencyDirective & Management SC SYi iI) HydrologicData Collection DPU,DRU, CU EIC,CEO Ili) StateWater PlanPreparation DPU EC,CEO, SWRC. EA iv) ProjectPlanning AU,WSU EIC;CEO; Secretary, Irrgation & Power

3. Training AU,WSU QC,CEC

4. Research& Development

i) DrainageCollection Design DRU,CU SC.CECO ii) Sprinider& Drip Irrigafion DR) EIC;Secretary, Agriculture, GOH f 0 ACTIvrr IMI PIEC T ANUPRr COOROINATIOWAIMiSORYAND

C. R _

I) Cana System CU,DR C,CEC II) DrainageSystem CUJ,CRJCEO S iii) RiverContro Works CUJ,DRJ 8C.CEC iv) Watercourses C,DRU 3C.CEC v) Augmentatfon& Direct lrigation CU.DCR BC,CEC Tubewelbs

D. Modgmgzaton

i) Cml system CU.J 80.CEC ii) AugmentationUnk Feeder Canal CU,OI 0,CEC iil) Watercourses Ca,Di) 50,CEC iv) HahnlkxmdBanage & UnkChannels CUDR SI. CEC,.EA v) Extensionof Minors a,DRJ ECCEC

1) Can System W8UCCEC li) DraiageSystem WSU BC,CEC III) RiverCont"o Works WSU E)C,CK fv) WatercourseMaintenance WSU ecCEO v) AugmentationTubewells WSU BC,CEC vi) inkshetraResearch &Training WsJ EC,CEC Institute F. PqU Reomg

I) InstitutionalReforms EIC Secretary,Irigation & Power;SWRC iI) OperationS Maintenance EC Secretary,Inigation & Power Ill) CostRecovery EiC,WSPS Secretary,Irgation & Power,SWRC lv) Beneficiary.Participation & System liC,WSPS Secretary,Irrigaffon & Power Tumover t v) GroundwaterRegulation & Legislation sIC,WIU Secretary,Irrigation & Power vi) StateWater Plan DPU.SWRC EIC;EA; Secretary, Irdgaton & Power vii) Power Sector Reforms HSEB Secretary,Irrigation & Power wII vili) BudgetAllocation EiC, Programming& Budgeting Comrittee Secretary,Irrigafton & Power 0 _ . . _ t~~~~~~~~~~~994 _ 9t_19 99981m19 ID Nam ______1uratlo Ot4Ori r 1i3 Or ti '" T -_ I Ot4 Ti Otf2 (r- Qti 4 1CW. Q I Negotiations , 1w 2 Pro ecteffecthertes I Od 3 Modernzaio 311-fi_i;, _;W 4 ModemizatIonof canals 311w I . .e. . 8 Constructionooee 156w 6 ConsxOn of Mhnots iS"w.g77 7 ModernizationofWatercoutses 311w 8 Constructbonof Hathnikund Barrag 156w 9 RehabIliaton I311w 10 RehabtatIonof Canals 3131w 11 RehabatIon of Drainage 311w 12 Rehallatsn of FloodControl 31w 13 RehabIlton of 2Waercouasea 266w 14 Rehatdaton of Ars 104w 1t5 RehabmalRon -tOM$s 104w _6 Operaton& Ma__tenance 311w 17 O&Mof Canals 31tw l8 O&Mof Drainage 311w 19 O&MOf Flood Control 311w 20 O&Mof Watercourses 3t11w S 7^ 21 O&MofATs 104w 22 O&Mof KuruketshaResearch 311w 23 Pmour.Eq upmentO&M 104w 24 SystemTumover 056w 25 DefinePolcy 26w 26 DefineRules and Responsblites 26w 27 FamnerTraini 2w 28 SystemTurnover 26w 29 Peromnce Monitoring 104w 30 StateWater Plan 3 2 - 31 Initial 104w 32 Updating 208w

Project:Haryena WRCP c ritical Progress Summary Date:218i94 Noncritical Milestone* 1,llcdl I

Page I

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Page 1 of 2

RARYA1bA EnY~RRSOUl RCNOLTDATION PR=tCT

RCIDLR OF RUPIRVISTON MIS9TON9

flrnmidmato atanAeRlit E,meted Wiperts/ rn-Qa-- yX S;ax Setff TInut Raqulree tStaff wheekl

FY94 II Start Up Procurement 20 Disbursement Institutions Progravming/Budgeting Computer/Communications Finance

FY95 I Supervision 1 Institutions 10 Water Resources Planning Environmentalist Civil Engineer (Irrig./Drainage) Sociologist/Farmer Organization Lawyer

FY95 II Supervision 2 Programming/Budgeting 10 Sociologist/Farmer Training Procurement Disbursement Finance Institutions

FY96 I Supervision 3 Sociologist/Farmer Organization 6 Civil Engineer (Irrig./Drainage) Computer/Communications Economist

FY96 II Supervision 4 Water Resources Planning Hydrologist Civil Engineer (Irrig./Drainage) Procurement Disbursement

FY97 I Supervision 5 Civil Engineer (Irrig/Drainage) 7 Civil Engineer (Structures) Sociologist/Farmer Organization - 213 -

Attanhym.nt~ Page 2 of 2

FY97 II Mid-term Review Civil Engineer (Irrig./Drainage) 20 Civil Engineer (Structures) Procurement Disbursement Economist/Finance Water Resources Planning Environment Sociologist Institutions Computer/Commtunications

FY98 I Supervision 6 Civil Engineer (Irrig./Drainage) 6 Water Resources Planning Disbursement Computer/Conwunications

FY98 II Supervision 7 Civil Engineer (Irrig./Drainage) 5 Sociologist/Farmer Organization

FY99 I Supervision 8 Civil Engineer (Irrig./Drainage) 5 Finance Procurement Disbursement

FY99 II Supervision 9 Civil Engineer (Irrig./Drainage) 5 Sociologist/Farmer Organization

FY2000 I Supervision 10 Civil Engineer (Irrig./Drainage) 5 Finance Disbursement

FY2000 II Proj.Completion Civil Engineer (Irrig./Drainage) 10 Economist Finance Water Resources Planning iNDA

,HARYANAWATEP F U CESOQNSOUDATPROEC'r

iOETBoIecQ vEEN&Nil INQiTO

PROJECTOPJEC1ES ACTlVT Yi9;R iDOCATOR c amw

1. Introduce water - Instituffonalreform - Institonal reorganizatio taken place & HIO - Reorganizationwould take place prior resources,planning & - Institutionalsupport operatingaccording to new structuto to project commencement management - StateWater Plan(SWP) - SWP prepared& updatedevery 5 years - AnnualAction PlanslMkidtefmReview - GW regulaton& - GOWHIDactng upon recommendationsof the - DataColection & Water Resources legislation SWP PlanningUnit (DPU) to camrout - Non-newwells in darkzones, limited expansion samplehydrological & wta.s resource In gray zones use baserinesurvey & montor changesduring proje¢t Implementation * OWt - Improveddelivery system efficiencyfor all - Baselinesurvey & monitoring - Beneficiay participation users a Enhanceafl- Rehabilitation - Increasedareas under rigation accordingto - HID to commissionsample cultural productivity, - Modemization physicaltargets of rehabilitation& agricultural,Irrigation & Income diversification& equity - O&M Investment mc.'em)zat)onprgram baselinesurvey and monitorchanges - O&Mreform - Increasedagricultural growt & cropping dudng projectimplementaton. This - Cost recovery intensity shouldbe coordinatedwith HDOA. - Seneficiarypartici- - DWversificationto higher valuedcrops pation& WUA formation - Increasedyields & producvity of crops

- Increasedrate of utilizationof irigation 6 potenffal

- Increasedwater savings a - Tail-endersof systemroceive more water - Increasedcost recoveryaccording to schedule - Project covenant - Sustainedlevels of O&M funding - Proportionof establishmentcost to works - Annual Budgets/Revenue/ expendituresfor all maintenancecategories ExpenditurePlans remainstable or decine

- WUA formed& operatingfor at least 3 years - Water ServicePo-icy Support Unit to ' - WUAs effectivelymaintaining water courses cany out baselinesurvey of WUA

actlhites and beneficiaryparticipation I-A & monitorduring project implementation. PROJWTQ S ACTIVITY/RLFORIUi INDICATOB COMMENT

3 Assuresustainability of - SWP * DecreaseIn water-logging& saHlnity * DPUto p.rfonmsample data the environment collectionand monitoragainst baselinesurvey - Groundwaterregulation & * Changesin watertable levels In dark/grey * DPU to monitorgroundwater levels legislation zones - Powersector reforms - Lessgroundwater pumping due to increased - DPU to monitoractiviffes powerchanges

4. ImproveHID's - Institutional reform - HID'sreorganization in place & woridng * Reorganizationto take place priorto capabilitiesIn all water - Institutional support - Improvedservice delivery to all users project commencement& & relatedareas performancemonitored - Baserinesuwevr comparison - Budgetaitocation and public Fundsallocated to priorityactfvities & linked - AnnualAction Plan; Works, Budget expenditurereorientation to cost recovery & RevenuePlans; Mid-term Review * Improvedproject planning, programming & budgeting

b iD O t

0 t0 - 216 -

Annax 16 Attachment- 6 Page 1 of 2

HARYANAWAER RESOURCS CONSOLIDATTONPROJECT

DRAFT TERMS OF REFRRENCE FOR SOCIO-ECONOMTC AND WATER SERVICES RASELI=E StrVYS

1. To evaluate the impact of the Haryana Water Resources Consolidation Project (WRCP), a baseline survey would be commissioned under the project. Survey findings should: (i) provide insight into the situation in the initial phase of water resource development under the project; and (ii) form the basis for future monitoring and evaluation of project impact. Key project indicators identified to assist GOH monitor the progress towards achieving project objectives include: implementation of Haryana Irrigation Department (HID) reorganization and effectiveness of operation within the new structure, preparation and updating of the State Water Plan (SWP) and implementation of its recommendations, agricultural growth ard crop diversification, delivery of water and improved services, cost recovery from users, water savings, formation of viable Water User Associations (WUA), water-logging and salinity, and project planning, programming and budgeting.

2. The socro-enonomi;-surv'ev would in particular address the aspects relevant from a beneficiary point of view to evaluate project impact in terms of changes in incomes and living standards, as well as beneficiary perception of project related services. The survey would cover about 1-2% of the project beneficiaries selected randomly with a representative distribution among the Western Yamuna Command and the Bhakra Command in proportion to the number of farms recorded in each area, with farm sizes ranging as follows: 0 - 0.5 ha; 0.5-1.0 ha; 1.0-2.0 ha; 2.0-5.0 ha; 5.0-10.0 ha; and above 10 ha. The sample should contain at least 10-15% women, of which there should be a mix of women family heads, wives of surveyed male family heads, and other women. The survey should cover the following broad categories:

AL. Farmer Identity/ Household Characteristchs: Name; age; origin; composition of family; level of education; work distribution; etc.

B. Ownership aand Use of Land: Farm size; land ownership and distribution system among family members; number of plots and location; distribution of crops and cropping patterns, by plots and by sources of irrigation; farm equipment and implements; debts, land mortgages; etc.

C_ Household Activities: Sources of income; on-farm activities and their distribution; off-farm activities and their distribution; livestock ownership and activities; role of women and children in on- farm and off-farm activities; etc.

D. Arriaultural Practices and Income! Crop/livestock types, varieties and yields (by size of plot and source of irrigation); fertilizer, irrigation usage and other input usage and costs, by season and - 217 -

Attachment 6 Page 2 of 2

ownership: production; revenues; yearly on-farm income; yearly off-farm income; sources of finance; major production problems; perceptions on: impact of salinity on yields, availability of groundwater; etc.

E. Irri4ation and Water Use: Area under irrigation, by source; irrigation intensity; irrigation efficiency; distance from outlet (at head-end or tail-end); reliability of irrigation/ water delivery; water use per unit of production; payments made/outstanding for water use; etc.

F. Participation in Farmer Associations: Farmer participation in associations or cooperatives, formal or informal; activities performed; farmer rating of and attitudes towards: quality of irrigation service, operation of irrigation system, maintenance of irrigation system, m-embershipand participation in a Water User Association, payment of irrigation/water fees, support services from institutional sources; etc.

G. Project Benefits: Farmer perception of social infrastructure and quality of life; most important benefits of the project.

Hz women Respondents: Family health and education; water supply and usage; household equipment; house and field work; perception of project benefits; perception of current and future status; etc.

3. The baseline survey would further cover aspects of Water delivery, management and hydrological data, from the institution's point of view. Data needs would be determined and collected in consultation with the Data Collection and Water Resources Planning Unit (DPU), and a representative sample taken from areas of different water/soil conditions in the state. The following (sample) aspects would be covered:

A. Water supplies and volumes to various sectors/uses;

B. Water delivery efficiency of each major water supply system, branch and distributary canals, and within each distribution level; etc.

C. Groundwater levels at sample points; density of wells in area, public and private (number per square km); size of pumps; total extractions per square km; etc.

D. Drainage: measurement of quantity and quality of drainage discharges for each major drainage sub-system; and

E. Salinity: extent of salinization of land, salt content; areas lost to production; etc.

4. The baseline surveys would be carried out by GOH by January 31, 1995. During project implementation, the baseline data would be compared to on-going data collected in terms of the development indicators, to monitor and evaluate the progress made towards achieving the project objectives. - 218 -

anuwA 17 Page 1 of 1

HARYANA WATER RESOURCES CONSOLIDATION PROJECT

SCHEDULE OF DISBURSEMENTS

IDA Fiscal Cumulative % of Samester nishurgemant Diluhrrqa Cnt

FY94 ?/ I 12.9 12.9 5 II 12.9 25.8 10

FY95 I 15.5 41.3 16 II 23.2 64.5 25

FY96 I 25.8 90.3 35 II 25.8 116.1 45

FY97 I 23.2 139.3 54 II 20.6 160.0 62

FY98 I 20.6 180.6 70 II 18.1 198.7 77

FY99 I 18.1 216.7 84 II 15.5 232.2 90

rYoo I 12.9 245.1 95 II 12.9 258.0 100

a/ Includes retroactive financing of US$10 million and special account for US$8 million. - 219 -

Anax 18 Page 1 of 1

HARYANA WNTEA RELO RCEI COUSOLnlTO? PROCT

DOCUMENTS AVAILABLE IN PROJECT rILE

1. Haryana WRCP: Back to Office Report on Rehabilitation and Resettlement Mission - A.P. Barnabas, 1993.

2. Review of Canal Acquisition of Haryana Water Resources Consolidation Project - A.K. Gupta, 1993.

3. Haryana WRCP: Investment Plan and Project Cost Summary, Haryana - Irrigation Department (HID), Government of Haryana, 1993.

4. Haryana WRCP: Project Estimate for Modernization of Existing Channels in Haryana (Unit I) - HID, 1993.

5. Haryana WRCP: Project Estimate for Feeding Kheri, Budha Khera, Old Nardak and Karnal Distributaries of WYC System (Unit II) - HID, 1993.

6. Haryana WRCP: Construction/Extension of Minors for Equitable Water Distribution in Haryana (Unit III) - HID, 1993.

7. Haryana WRCP: Project Estimate for Research and Development Unit - HID, 1993.

8. Haryana WRCP: Modernization of Watercourses - HID, 1993.

9. Haryana WRCP: Plan of Operation and Maintenance - HID, 1993.

10. Haryana WRCP: Cost Recovery - J.C. McGahan, 1993.

11. Haryana WRCP: Sectoral Environmental Assessment Report - J. Prosser, 1993.

12. Haryana WRCP: Plan of Operation and Maintenance Summary Report/Outline and Instr--tions - L. Simpson, 1992. MAP SECTION READ'AM}HIMACHAL PRADESH HEADW'OBX

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