Document of The World Bank FOR OFFICIAL USE ONLY n <;7G( 3- 75 Public Disclosure Authorized Report No. 5869-TU Public Disclosure Authorized STAFF APPRAISAL REPORT TURKEY DRAINAGEAND ON-FARN DEVELOPMENTPROJECT Public Disclosure Authorized February 6, 1986 Public Disclosure Authorized Regional Projects Department Europe, Middle East and North Africa Agriculture III This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCYEQUIVALENT US$1 furkish Lira (TL) 540 'a TL 1 US$ 0.001852 TL 1,000,000 = US$ 1,851.85 WEIGHTS AND MEASURES 1 kilogram (kg) 2.20 pounds 1 metric ton 1,000 kilograms I metric ton 0.98 long ton 1 meter (m) 1.09 yards 1 kilometer (km) 0.62 mile 1 hectare (ha) 2.47 acres 1 decare = 0.1 ha 0.25 acre 2 1 square kilometer (km ) = 110 ha = 0.386 square mile 1 liter (1) 0.264 gallon ABBREVIATIONS DSI - General Directorate of State Hydraulic Works of MENR GDPI - General Directorate of Projects and Implementation within MAFRA GDRS - General Directorate of Rural Services within MAFRA IBRD - International Bank for Reconstruction and Development (World Bank) ICB - International Competitive Bidding MAFRA - Ministry of Agriculture, Forestry and Rural Affairs MENR - Ministry of Energy and Natural Resources 0&M - Operation and Maintenance PPAR - Project Performance Audit Report SPO - State Planning Organization within the Prime Ministry TL - Turkish Lira FISCAL YEAR Government of Turkey - January 1 - December 31 /a Average exchange rate for 1985. FOROFMCUIL USE ONLY TURKEY APPRAISAL OF DRAINAGEAND ON-FARMDEVELOPMENT PROJECT Table of Contents Page No. I. INTRODUCTION ............................................ 1 II. THE AGRICULTURAL SECTOR ................................. 2 A. Sectoral Adjustment Program ......................... 2 B. The Irrigation and Drainage Subsector . .............. 5 C. Performance Under Previous Irrigation Projects ...... 10 III. THE PROPOSED PROJECT .................................... 11 A. Objectives and Strategy ............................ 11 B. Main Features - First Time Slice ........... ......... 13 C. Project Description ................. ................ 14 D. Riparian Rights ................... .................. 16 E. Status of Engineering ................ ............... 17 F. Cost Estimate .................... ................... 19 G. Financing ...........................................21 H. Procurement ......................................... 24 I. ImplementationSchedule ...... ....................... 25 J. Disbursements .................... ................... 25 K. Environmental Impact ................. ............... 27 IV. ORGANIZATIONAND IMPLEMENTATION......................... 27 A. Implementing A;encies and Responsibilities .... ...... 27 B. Operation and Maintenance ........................... 30 C. Accounts and Audits ................................. 31 D. Project Monitoring and Completion Report .... ........ 32 V. PRODUCTION, MARKET ARRANGEMENTS, PROSPECTS AND PRICES ... 32 A. Production .......................................... 32 B. Market Prospects and Inputs Availability .... ........ 34 C. Prices .............................................. 36 VI. FARM INCOMES, FINANCIAL ANALYSIS AND COST RECOVERY ...... 37 A. Farm Incomes ......................................... 37 B. Project Charges and Cost Recovery ................... 39 This document hasa restrictd disutibutionand may be usedby recipientsonl in the perform of their ofrii duties. Its contentsmay not otherwise be dic_sed wthout Wodd Bank authriatn Table of Contents (Con'd) -ii- Page No. VII. BENEFIT AND JUSTIFICATION.............................. 43 A. Benefits .43 B. Economic Analysis .44 C. Risks .45 VIII. ASSURANCES AND AGREEMENTS .47 ANNEXES 1. Public Investment Allocations 1979-1985.49 2. Description of the Subsector Area .50 3. The Proposed Project .........................Pages 1-2 58 Tables 1-12 60 4. Project Organization and Implementation...... Chart 1 77 Map 1 78 Chart 2 79 Map 3 PO Tables 1-2 81 5. Production, Market Prospects and Prices ...... Table 1-4 83 6. Cost Recovery and Farmers' Income Analysis ... Table 1-7 87 7. Benefits and Justification................... Table 1-14 94 8. Selected Documents and Data Available in the Project ImplementationFile ........ 108 CHARTS 1. ImplementationSchedule ...................... 109 MAPS 1. IBRD 19280 and 19281 - Maps Showing Completed and Ongoing Irrigation and Drainage Projects TURKEY APPRAISAL OF DRAINAGEAND ON-FARMDEVELOPMENT PROJECT Loan Summary Borrower: Republic of Turkey. Beneficiaries: (a) The General Directorate of Rural Services within the Ministry of Agriculture, Forestry and Rural Affairs (GDRS); (b) The General Directorateof State Hydraulic Works (DSI) within the Ministry of Energy & Natural Resources (MENR); and (c) About 97,000 private farmers benefittingfrom the project. Amount: US$255 million Terms: SevenLeen years including four years of grace, with standard variable interest rate. Description: The Drainage and On-farm DevelopmentProject (1986-1991). consists of the followingworks: (a) rehabilitationof surface drains to restore them to their planned performance; (b) excavation of additional,main, secondary and tertiary drains to supplement the existing drainage system; (c) installationof subsurface drainage network in medium and light clayey soils; (d) addition of subsurface collector pipe drains within the existing subsurfacedrainage installations; (e) reclamationof selected tracts of saline land to avoid serious deterioration; (f) constructionof access roads along the irrigation and drainage networks to facilitateoperation and maintenance; (g) constructionof minor buildings,field workshops and other structures for operation and maintenanceof the system; (h) installationof piezometersand other devices to monitor the waterlogged areas; (i) strengtheningof existing drainage and reclamation research stations in the irrigation areas; (j) employment of engineeringconsulting firms by DSI and GDRS to provide additional design and implementationcapacity; (k) employment of consulting firms by DSI and GDRS for review of the work by the engineeringconsulting firms; and (1) training of GDRS and DSI headquartersand regional staff in selected fields and in appropriatecountries. Benefits and Risks The proposed project would support the rationalizationof the public investmentprogram for drainage and on-farm development,as part of the Government'ssectoral adjustment program for agriculturebegun with Bank assistance under the AgriculturalSector Adjustment Loan (ASAL, Loan 2585-TU). The proposed investmentswould eliminate waterloggingand salinity, restore the existing irrigated areas to full production,and would prevent further deteriorationof soils and reduction in crop production. The approximately 97,000 farmers who own and operate land in the 220,000ha to be improved, and neighboring farmers operating land which without the proposed investments would eventually become waterlogged, would benefit. At full development, annual on-farm employment in the improved areas would increase by about 7 million mandays per year above the current levels, an increase of about 20S of current on-farm employment within the DSI irrigation perimeters. Adkditional exports of cotton and pulses and fewer wheat imports nt fuLl development would generate potential incremental foreign exchange earnings/savings amounting to about US$177 million equivalent per year. The main risks to achieving subsector objectives are institutional: (a) Availability of funding for the Irrigation and Drainage Project, and within the subsector priority allocation of resources to drainage and on-farm development; (b) Government's capacity to prepare, appraise and select priority investments; (c) Ability of the implementing agencies to coordinate overlapping implementation plans and schedules; and (d) Availability of adequate funding for O&M. Measures are included to minimize these risks. To reduce the risk of funding shortfalls, the Government will give the Bank an opportunity to comment on the proposed budget allocations for the project prior to finalization of the budget. If a shortfall in annual program funding or delays should occur, selected program elements could be deferred and the project period extended without jeopardizing individual project benefits or subsector objectives. Further provisions to minimize these risks include application of criteria for selection of priority subprojects, improvement of design and implementation capacities and training of DSI and GDRS staff. In addition, the ASAL includes financing for procuring essential equipment and the project provides the associated costs needed to remove the constraint or.O&M arising from accumulated rehabilitation requirements. Estimated Cost: The costs of the project, net of taxes but including contingealcies, are: Estimated Allocation of Z to be Items Cost Loan Proceeds financed --- US$ Million--- Civil Works for DSI 166.29 74.00 45 Civil Works for GDRS 305.72 169.00 57 Consulting Engineering Services 6.99 6.99 100 Reviewing Consultants 0.61 0.61 100 Training for DSI & GDRS 0.70 0.70 100 Equipment, Books & Periodicals 0.20 0.20 100 Unallocated - 3.50 Total 480.51 255.00 Annual Estimated Disbursements ----- ---- $ Million ----------- Estimated Bank FY 1986 1987 1988 1989 1990 1991 1992 Disbursements: Annual - 11.0 40.0 47.0 51.0 51.0 55.0 Cumulative - 11.0 51.0 98.0 149.0 200.0