World Bank Document of The World Bank FOR OFFCIAL USE ONLY Report No. 14409 IMPLEMENTATION...

Document of

The World Bank

FOR OFFCIAL USE ONLY

Report No. 14409

IMPLEMENTATION COMPLETION REPORT

INDIA

BIHAR~ PUBLIC TUBEWELL PROJECT('CREDIT 1737-IN)

APRIL 28, 1995

Agricultural and Water Operations DivisionCountry Department IISouth Asia Regional Office

|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 wvithout World Banki authorization.|

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EOUIVALE1TS

Name of currency = Rupee (Rs)Rate of exchange:

Appraisal (Oct. 1985): USS1.00 = Rsl3.00Intervening years (1986-93): USS41.00 = Rsl9.05

Completion year (1994): US$1.00 = Rs31.37

WEIGHTS AND MEASURES

1 meter (m) = 3.28 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)1 billion cubic meters (Bm3) = b.81 million acre-feet (MAF)

I cubic foot per second (cfs or cusec) = 0.028 cubic meters per second (m3/s)1 kilogram (kg) = 2.2 pounds (lb)

1 metric ton (mt) = 2,205 pounds (lb)

FISCAL YEAR OF BORROWER

April 1 - March 31

ABBREVIATIONS AND ACRONYMS

APM Adjustable Proportional ModuleBSEB Bihar State Electricity BoardBWDC Bihar Water Development CorporationCCA Cultivable Command AreaCWC Central Water CommissionDOA Department of AgricultureEE Executive EngineerERR Economic Rate of ReturnGOB Government of BiharGOI Government of IndiaHYV High Yielding VarietiesICB International Competitive BiddingICR Implementation Completion ReportID Irrigation DepartmentIDA International Development AssociationIPDU Investigation Planning and Design UnitIST Improved Standard TubewellLCB Local Competitive BiddingM & E Monitoring & EvaluationMID Minor Irrigation DepartmentO & M Operation & MaintenancePC Project CoordinatorPCU Project Coordinating UnitPTW Public Tubewell SystemQCU Quality Control UnitSCF Standard Conversion FactorSE Superintending EngineerTMEU Training, Monitoring & Evaluation UnitTW Tubewell Wing (of the MID)T & V Training and VisitskV kilovolt = 1,000 volts

5iLQ2SA&Y

Kharif Wet season (June to October)Rabi Dry season (November to February)Zaid Hot weather season (March to May)levee River and flood control embankment

FOR OFFICIAL USE ONLY


INDIA

BIHAR PUBLIC TUBEWELL PROJECT(Credit 1737-IN)

TABLE OF CONTENTS

PREFACE ........................................... i

EVALUATION SUMMARY ......................................... u i

PART I. PROJECT IMPLEMENTATION ASSESSMENT ......................................... 1

A. Statement/Evaluation of Objectives .I

B. Achievement of Project Objectives .3

C. Major Factors Affecting the Project. 6

D. Project Sustainability. 8

E. Bank Performance. 9

F. Borrower Performance. 12

G. Assessment of Outcome .14

H. Future Operation .14

I. Lessons Learned .14

PART II. STATISTICAL TABLES ......... .. 1 6

I. Summary of Assessments. 1 6

2. Related Bank Loans/Credits .18

3. Project Timetables .19

4. Loan/Credit Disbursements .19

5. Key Indicators for Project Implementation. 20

6. Key Indicators for Project Operation. 20

7. Studies Included in Project. 20

This document has a restricted distribution and may be used by recipients only in the performance of their|official duties. Its contents may not othcrwise be disclosed wvithout World Banlc authorization. I

8. Project Costs and Financing ...................................................... 21A. Project Costs ...................................................... 21B . Project Financing ..................................................... 21

9. Economic Costs and Benefits ..................................................... 22

10. Status of Legal Covenants ............................ ......................... 23

11. Concurrence with Operational Manual Statements ..................................... 25

12. Bank Resources: Staff Inputs ..................................................... 25

13. Bank Resources: Missions ............................. ........................ 26

Appendix 1. FAO/CP Mission Aide Memoire .27

Appendix 2. Staff Positions as on October 10, 1994 .35

Appendix 3. Economic Re-evaluation .36

TABLES

1. Net Irrigable Area Created and Utilized - New Tubewells .......... ................. 402. Net Irrigable Area Created and Utilized - Modernized Tubewells ....... ............ 413. Net Irrigable Area Created and Utilized - Rehabilitated Tubewells ....... .......... 424. Cropping Pattern - New and Modernized Tubewells ............. .................... 435. Cropping Pattern - Rehabilitated Tubewells ....................... .................... 446. Crop Yield - New and Modernized Tubewells .................... ..................... 457. Crop Yield - Rehabilitated Tubewells ................................................... 468. With Project Yields at SAR Compared to ICR for the Project as a Whole ...... ... 479. Estimated Financial Farm Budgets (I ha farm) ......................................... 4810. Exchange Rates and Wholesale Price Indices (WPI) ............. .................... 4911. Economic Analysis of the Project as a Whole .................... ..................... 5012. Economic Analysis of New Tubewells ................................................. 5113. Economic Analysis of Modernized Tubewells .................... ..................... 5214. Economic Analysis of Rehabilitated Tubewells ................. ...................... 5315. Derivation of Economic Prices ..................................................... 5416. Summary of Prices for Financial and Economic Analysis in 1994 Prices ...... ... 55

Appendix 4. Progress of Physical Targets .56

Appendix 5. Project Cost in Nominal and Real Terms .57

Appendix 6. Borrower's Comments and Evaluation Report .58

MAP IBRD 19278R

i


INDIA

BIHAR PUBLIC TUBEWELL PROJECT

(Credit 1737-IN)

Preface

This is the Implementation Completion Report (ICR) for the Bihar Public TubewellProject in India, for which Credit 1737-IN in the amount of SDR 59.5 million (US$68 millionequivalent) was approved on October 16, 1986 and made effective on April 13, 1987.

SDR 40.0 million (US$54.7 million equivalent) was cancelled on December 5,1991during the funds redeployment exercise. The Credit was closed on May 31, 1994, the originalclosing date. Final disbursement took place on November 21, 1994.

The ICR was prepared by an FAO/CP mission which visited India inSeptember/October 1994. It was finalized by the Task Manager, Mr. N. K. Bandyopadhyay,Agriculture Unit, Resident Staff in India, Country Department 2, South Asia Regional Office, andreviewed by Mr. Shawki Barghouti, Chief, Agriculture and Water Operations Division, and Mr.William Nickel, Acting Project Advisor. The Borrower provided comments that are included as anappendix to the ICR.

Preparation of this ICR was begun during the Bank's final supervision mission inMay 1994. It is based on a review of the Staff Appraisal Report and legal documents, supervisionreports, and project files, as well as field investigations and discussions with the Bank staff andstate government officials associated with the project. The Borrower contributed to the preparationof the ICR by commenting on the mission's aide-memoire, preparing its own evaluation, andcommenting on the draft ICR.

ii


INDIA


Evaluation Summary

Introduction

1. The Bank has been associated with the irrigation sub-sector and Bihar since 1962when it approved the first credit of US$15 million for the Sone Irrigation Project, followed by theBihar Agricultural Credit Project for US$32 million in 1973, four all-India Agricultural RefinanceDevelopment Corporation (now National Bank for Agricultural and Rural Development) projectsbetween 1975-1982, the Bihar Agricultural Extension and Research Project in 1977, SubernarekhaIrrigation Project in 1982, and the latest being the Bihar Plateau Development Project in 1992.

Project Objectives

2. The State of Bihar was the third of the Indian States to adopt improved technology forthe deep tubewells and distribution system introduced under Uttar Pradesh Tubewells Project(Credit 1004-IN, 1980 and Credit 1332-IN, 1983). The seven-year Bihar Public Tubewell Projectwas aimed at increasing agricultural production by improving and expanding the use of Bihar'sconsiderable groundwater potential. This was to be achieved by: (a) introducing improvedtubewell technology that would eliminate the planning and design problems inherent in Bihar'sexisting public tubewells (PTWs); (b) undertaking a phased program to rehabilitate and modernizemost of Bihar's existing PTWs; and (c) strengthening the institution responsible for PTWactivities to ensure that project works can be effectively and efficiently implemented as well asoperated and maintained. Project components included:

(i) New tubewell systems. Construction of about 500 improved tubewellsystems of about 150 m3/hr each and net command area of 100 ha.

(ii) Modernization and rehabilitation of existing tubewell systems. Repair orrehabilitation of about 4,700 existing tubewells including construction of newdistribution systems on about 1,000 of the existing tubewell systems andrehabilitation of existing distribution systems on a further 1,300 of theexisting tubewells.

(iii) Dedicated power lines. Connection to separate 11 kV feeder lines of about4,700 existing tubewells and 500 new tubewells.

(iv) Management improvements. Provision of equipment, transportation, andbuildings to be used by the project construction, operation and maintenancestaff; preparation of design and operation and maintenance (O & M) manuals;technical services; studies related to project management, cost recovery andan agro-economic baseline survey for selected project tubewells; training ofproject staff; and monitoring and evaluation activities.

iii

3. Project changes after appraisal. The project was revised in March 1990 by increasingthe tubewells for modernization by 500 which were located in the flood zone, instead ofrehabilitating them as proposed at appraisal (increasing the number of PTWs to be modernizedfrom 1,000 to 1,500 and reducing the number to be rehabilitated from about 3,700 to 3,200), andproviding an underground pipe distribution system instead of repairing the existing bricklinedchannels, which were prone to frequent breaches. On the recommendation of the Government ofBihar (GOB), the provision for dedicated power lines was deleted by the Bank in 1992. TheCredit disbursement percentage was increased commencing in September 1990 in respect oftubewell and energization works from 75 percent to 90 percent as part of the Gulf Initiative toalleviate Government of India's (GOI) foreign exchange constraints. In addition, a sum ofSDR 40 million (US$54.7 million equivalent) was cancelled due to substantial savings resultingfrom the depreciation of the rupee against the US dollar.

4. Loan covenants. Special loan covenants or agreements that were expected to promoteachievement of project objectives were: (i) the provision of dedicated 11 kV feeder lines to eachPTW within a cluster to give power supply from a conductor which would be exclusively used forPTWs; and (ii) the supply of a minimum of 16 hours of power per day per PTW at peak demandperiods. As stated earlier, dedicated power lines were dropped from the project and the power wascontinuously in short supply ranging from 3-8 hrs/day, exacerbated by its unreliability andirregularity.

5. Evaluation of project objectives. The project was based on the sound foundation thatit would complement groundwater development in the private sector and be selective in the targetgroup of beneficiaries to be reached; tubewell siting criteria were designed to achieve this goal.The project took advantage of technical principles developed under the Uttar Pradesh PublicTubewell II Project. Consequently, the project objectives were clear and important for the properdevelopment of the state's groundwater potential. But the project lacked realism particularlyrelating to the installation of new tubewells as it was too optimistic to expect quick implementationresults, given the institutional reorganization required and the past two decades of dismalperformance of PTWs. It was also not realistic to spread water over 100 ha with a 150 m3/hrtubewell. The project was also complex because the proposed number (about 5,200) of tubewellswere to be sited in scattered locations over some 37 of the state's districts and implemented withinseven years, and such implementation to be effective required good coordination with the BiharState Electricity Board (BSEB) and the Department of Agriculture (DOA). This scale and spread ofproject activities also naturally called for high quality management and skillful planning of logisticsand implementation, which the project management has found it difficult to master. Theimportance of water management was not very explicitly emphasized at appraisal, although itconstituted a key element in equitable water allocation and water use efficiency.

Implementation Experience and Results

6. The project experienced considerable difficulties during implementation. The mostcommon of these was the delay in construction and energization. Disorganized management, staffshortages at senior levels and frequent turnover, uncoordinated planning of works between BSEBand the Tubewell Wing of the Minor Irrigation Department (MID), poor extension support in thefield, and shortages of PVC pipes, were other problems which hindered implementation.Achievement of tubewell completion and energization was 18 percent (new tubewells), 29 percent(modernized tubewells) and 73 percent (rehabilitated tubewells). Area actually irrigated wasdismally lower at 13 percent (new tubewells), 15 percent (modernized tubewells) and l percent(rehabilitated tubewells) of the additional potential created. The principal reason for the lowutilization is the shortage of power supply, ranging from 3 to 8 hours per day. As a result,production levels have been substantially less than anticipated at project appraisal. The current

iv

estimate of overall economic rate of return (ERR) for the project is 2.3 percent, down nearly 31percent from an appraisal estimate of 33 percent. Part of this decline is due to the lower increase incropping intensity but most is caused by the lower command area per tubewell utilized than thatestimated at appraisal - 74 percent lower for new tubewells, 78 percent lower for modernizedtubewells and 91 percent lower for rehabilitated tubewells. The slippage of 31 percentage points(from 33 percent to 2 percent) is accounted by -20 percent (new tubewells), 4 percent (modernizedtubewells) and 3 percent (rehabilitated tubewells). For the most part, both appraisal andcompletion estimates of ERR are more speculative than usual, because they incorporate returns alsoto investments projected in later years.

7. The project has only partially achieved its physical and sector policy objectives. Itsachievement of institutional development objectives was negligible. Macroeconomic policies andfinancial objectives were not applicable to this project. There was no coverage of gender issues.

8. Project sustainability. The ERR of the project is too low to be consistent withsustainable economic performance. The major challenge for the sustainability of the tubewellsystem established under the project is the provision of a reliable power supply and adequateO & M. As the power supply cannot be assured by the Electricity Board in the immediate future,the only option would be to install diesel generating sets. In fact, the Bank extended necessaryassistance including consultancy services for determining the economic viability of dieselgenerating sets and agreed to reimburse their cost under the National Water Management Project,provided a small percentage of capital costs and 0 & M expenditure were borne by thebeneficiaries. Unfortunately this was not experimented in a single scheme. As the MID would nothave financial resources to operate and maintain these schemes and their diesel sets, the best courseof action would be to transfer them to farmers' organizations, whether Panchayats or otherwise,and to intensify training and technical assistance programs (provided through the Water and LandManagement Institute). The establishment and functioning of the two Regional and 18 DivisionalWorkshops for the provision of spare parts and repair of tubewells on behalf of farmers'organizations is a prerequisite to sustainability.

9. Actual cost, financing and implementation timetable. At appraisal, it was estimatedthat construction and energization would be completed by September 1993 with a project closingdate of May 31, 1994. Current estimates indicate that final construction is not likely to becompleted until March 1998 although the Credit was closed on May 31, 1994. The final cost ofthe project is now estimated at Rs.3,495 million (US$140 million), compared to the appraisalestimate of Rs.1,296.2 million (US$99.7 million), representing a 170 percent cost overrun innominal rupee terms or 55 percent cost overrun in real rupee terms. The Credit was able to financeonly about US$26.6 million or 19 percent of the estimated total project cost compared to 70 percentat appraisal, severely increasing the burden on the state budget.

10. Key factors relating to achievement of project objectives. The most importantdeficiencies which hampered project implementation can be classified into:

(i) Factors not generally subject to Government control. These included law andorder problems, limiting Bank financing to operative wells only, and theinadequacy of the management and water charges studies. These have in partadversely affected the achievement of project objectives.

(ii) Factors generally subject to Government control. These included delays inthe appointment of key staff, lack of adequate counterpart funds in lateryears, delayed start in the construction of dedicated power lines anduncoordinated construction work between BSEB and the Tubewell Wing of

v

the MID, a long strike by engineers and staff during 1991/92, and delay indelegation of adequate financial power to field officers. These hadsubstantially affected the implementation pace of tubewell installations.

(iii) Factors generally subject to implementing agency control. There wasinsufficient advance planning and updating of implementation, procurementand 0 & M schedules, lack of coordination between the State ElectricityBoard and Department of Agriculture, and delays in institution-buildingmeasures such as M & E and training. Procurement progress was slowmainly because of the cumbersome and time-consuming procedures followedfor evaluation of bids and finalization of awards. There were also delays inconstruction of cluster buildings and workshops, administrative building andaccess roads to PTWs. As the first World Bank project implemented by theMID, the department staff took time to familiarize themselves with the localcompetitive bidding (LCB) and international competitive bidding (ICB)procedures, and this has caused some delays. The frequent change in ProjectCoordinator (eight Project Coordinators over the project period of sevenyears), has meant that proper direction and continuity to the programme ofwork could not be given. The combined effect of these factors was reflectedin substantial under-achievement of project objectives.

11. Performance of Bank and borrower. Both parties have not performed satisfactorilythroughout the project cycle. The Borrower continued its managerial and financial weaknessesduring implementation, although some improvement surfaced towards the closing years. TheBank's unsatisfactory performance included misjudgement on power availability, the poor mid-term review, and the waiver of the covenant on dedicated power lines which did not offer anyremedy to the crucial issue of power supply to tubewells.

12. Project outcome assessment. The project outcome is rated as unsatisfactory.

Summary of Findings, Future Operations and Key Lessons Learned

13. Findings. Incremental agricultural production is significantly less than estimated atappraisal. The ERR is also lower. A matter of particular concern is the continuing shortage andunreliability of power, which has contributed to the dismal average command areas of PTWsutilized under the project. Public investment in tubewell development should therefore bereviewed. Adequate provision of funds is essential for extension, demonstration and training intubewell command areas. Since the success of a public tubewell project depends on theperformance of all interacting government agencies, there should be an effective mechanism forcoordination.

14. Plans for future 2roject operations. Following discussion with MID on futureoperation/action plan concerning completion of all ongoing works and also to maximize net projectbenefits, MID has agreed to: (a) complete all ongoing works by March 1998 and make availableadequate funds for this purpose and refrain from constructing any new structures beforecompleting all ongoing schemes in view of GOB's budgetary constraints; (b) continue transferringO & M responsibility for tubewells to Panchayats/farmers' organizations and also carry out athorough review of the tubewells previously handed over and undertake remedial measures forimproved performance; (c) provide adequate 0 & M funding until all tubewells are turned over toPanchayats/farmers' organizations; (d) allocate sufficient funding for training in installation andoperation of improved electrical regulation system already procured for the efficient operation ofthe tubewells but not in use at present for want of adequate training; (e) implement a pilot scheme

vi

to install diesel generating sets in about 10 selected tubewells to test the effectiveness of operationand fanners' willingness to bear full 0 & M cost and a portion of the capital cost; and (f) monitortubewell performance through collection of data on operational hours per tubewell, irrigatedpotential created, actual area irrigated, cropping patterns, intensities and yields in the kharif, rabiand hot seasons on a continuous basis.

15. It is recommended that an impact evaluation mission from the Bank visit the statearound 1997 to evaluate the performance of project wells.

16. Lessons for future projects in the sub-sector. The main lessons learnt are:

(i) Given the past two decades of poor PTW performance and the institutionalreorganization required to achieve improvements, the proposed installation ofa large number (500) of new tubewells without the prior benefit of a pilotscale operation, as in Uttar Pradesh, was very ambitious. Small farmers'interest, which was sought to be promoted by proper siting of new wells, canbe, for the present time, secured by selecting wells for modernization orrehabilitation in command areas dominated by the target group.

(ii) The provision of dedicated power lines with power availability of 16hours/day at peak demand against a background of poor power generationand poor supply was not realistic. In future, project power supply should beassessed at the state level to ensure that it is adequate for the project.

(iii) The project experience demonstrates the critical significance of state finance inBihar for satisfactory implementation and the need to ensure an adequate flowof funds from the Credit. Limiting Bank financing to operative wells only,though well-intended (by restricting the start-up of numerous works and thecompletion of few) hampered the reimbursement of counterpart funds and thecorresponding legal covenant required adjustment to local circumstances. Arevolving fund at the state level is also required in addition to the specialaccount established with GOI.

(iv) Groundwater development based on PTWs would increasingly face problemsof poor performance, both in terms of productivity and equity, unless properaction is taken for power supply and effective transfer to beneficiaries. Theexisting system would, without significant changes in the management andfinancing, deteriorate as a result of pressure on already strained budgetaryresources.

(v) The re-estimated dismally low ERR of the project suggests that even withimproved technology, investment in public tubewells may not necessarily beeconomically viable. Further investment in public tubewells should thereforebe reviewed, in order to encourage private investment in shallow tubewellswhile resolving most of the problems now faced with public tubewellsthrough their transfer to Panchayats after ensuring certain follow-up stepsincluding adequate power supply and repair facilities.

(vi) There is a need to address issues related to Panchayats, farmers'organizations and 0 & M of PTWs comprehensively at preparation andappraisal of the project to ensure smooth implementation.

vii

(vii) Monitoring and evaluation of tubewell irrigation and agricultural performrancedata deserves high priority as a critical tool for rectifying deficiencies andsustained use of the irrigation potential created.

I


INDIA


PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. STATEMENT/EVALUATION OF OBJECTIVES

Statement of Project Objectives

1. The State of Bihar was the third of the Indian States to adopt improved technology forthe deep tubewells and distribution system introduced under Uttar Pradesh Tubewells Projects(Credit 1004-IN, 1980 and Credit 1332-IN, 1983). As in these tubewell projects, the Bihar PublicTubewell Project was aimed at increasing agricultural production by improving and expanding theuse of Bihar's considerable groundwater potential. This was to be achieved by: (a) introducingimproved tubewell technology that would eliminate the planning and design problems inherent inBihar's existing public tubewells (PTWs); (b) undertaking a phased program to rehabilitate andmodernize most of Bihar's existing PTWs; (c) strengthening the institution responsible for PTWactivities to ensure that project works can be effectively and efficiently implemented as well asoperated and maintained; and (d) increasing agricultural production, employment and incomesespecially for Bihar's small farmers. Project components included:

(i) New Tubewell Systems. Construction of about 500 improved tubewellsystems of about 150 m3/hr each and net command area of 100 ha.

(ii) Modernization and Rehabilitation of Existing Tubewell Svstems. Repairor rehabilitation of about 4,700 existing tubewells including constructionof new distribution systems on about 1,000 of the existing tubewellsystems and rehabilitation of existing distribution systems on a further1,300 of the existing tubewells.

(iii) Dedicated Power Lines. Connection to separate 11 kV feeder lines ofabout 4,700 existing tubewells and 500 new tubewells.

(iv) Management Improvements. Provision of equipment, transportation,and buildings to be used by the project construction, operation andmaintenance staff; preparation of design and 0 & M manuals; technicalservices; studies related to project management, cost recovery and anagro-economic baseline survey for selected project tubewells; training ofproject staff; and monitoring and evaluation activities.

2. Project Cost. The project was planned to be implemented over seven years fromabout September 1986 to September 1993, and the total project cost including physical and pricecontingencies was estimated at US$99.7 million (Rs.1,296.2 million). The IDA Credit ofSDR 59.5 million (US$68.0 million equivalent) was to finance about 70 percent of the total project

2

cost excluding taxes and duties. The remaining portion of the cost was to be met by theGovernment of Bihar (GOB) and the Government of India (GOI).

3. Project Changes after Appraisal. The project was revised in March 1990 byincreasing the tubewells for modernization by 500 which were located in the flood zone, instead ofrehabilitating them as proposed at appraisal (increasing the number of PTWs to be modernizedfrom 1,000 to 1,500 and reducing the number to be rehabilitated from about 3,700 to 3,200), andproviding an underground pipe distribution system instead of repairing the existing bricklinedchannels, which were prone to frequent breaches. The energization of dedicated power lines didnot make any headway due to a general power shortage in the state and resentment among otherpower users which has resulted in theft of conductors in many lines (see para 22). On therecommendation of GOB, the provision for dedicated power lines was deleted by the Bank in1992. The Credit disbursement percentage was increased commencing in September 1990 inrespect of tubewell and energization works from 75 percent to 90 percent as part of the GulfInitiative to alleviate GOI's foreign exchange constraints. In addition, a sum of SDR 40 million(US$54.7 million equivalent) was cancelled due to substantial savings resulting from depreciationof the rupee against the US dollar.

4. Special loan covenants or agreements that were expected to promote achievement ofproject objectives were: (i) the provision of dedicated 11 kV feeder lines to each PTW within acluster to give power supply from a conductor which would be exclusively used for PTWs; and(ii) the supply of a minimum of 16 hours of power per day per PTW at peak demand periods. Asstated in para 3, dedicated power lines were dropped from the project and the power wascontinuously in short supply ranging from 3-8 hrs/day, exacerbated by its unreliability andirregularity.

Evaluation of Project Objectives

5. Clarity. The area commanded by a new tubewell had been designed at 100 ha andlocations chosen in such a manner as to include a high proportion of small and fragmentedholdings cultivated by small farmers who would not find it profitable to invest their own resourcesin constructing new tubewells. The project design was thus based on a sound foundation that itwould complement groundwater development in the private sector and be selective in the targetgroup of beneficiaries to be reached; tubewell siting criteria were suitably designed to achieve thisgoal. Consequently, the project objectives were clear and important for the proper development ofthe state's groundwater potential.

6. Realism. The project, however, lacked realism at least on two counts. Given theinstitutional reorganization required and the past two decades of inadequate performance of PTWs,the proposed investment in a large number of new tubewells (500) was over ambitious. Thespread of water over 100 ha with a 150 m3/hr tubewell was also unrealistic.

7. Complexity. The project was also complex because the proposed number (5,200) oftubewells were to be sited in scattered locations over some 37 of the state's districts andimplemented within seven years, and such implementation to be effective required goodcoordination with the Bihar State Electricity Board (BSEB) and the Department of Agriculture(DOA). This scale and spread of project activities also naturally called for high qualitymanagement and skillful planning of logistics and implementation, which the project managementhas found it difficult to comply with. It was rather ambitious to expect that deficiencies such asmanagement difficulties, inadequate power supply and the shortage of 0 & M funds could beovercome within a period of seven years when these have haunted the development of the PTWsector over the past several years.

3

8. Responsiveness to Borrower's Circumstances. The project's strategy to provide areliable, timely and equitable irrigation service was a commendable and necessary ingredient, but,without finance for complementary investments in water management and extension, remainedinsufficient to respond to Borrower's financial difficulties and development priorities in not onlyproviding an efficient irrigation service but also realizing fully the irrigation potential by the smallfarmers. The importance of water management was not very explicitly emphasized at appraisal,although it constituted a key element in equitable water allocation and water use efficiency.

B. ACHIEVEMENT OF PROJECT OBJECTIVES

9. Overall Achievement. The project has only partially achieved its physical and sectorpolicy objectives. Its achievement of institutional development objectives was negligible.Macroeconomic policies and financial objectives were not applicable to this project. There was nocoverage of gender issues.

10. Physical Objectives. There is a significant shortfall in the achievement of physicalobjectives as shown below:

Targets and Achievements

Pllanned at i onaComponent Appraisal Fully Completed r rig at ion

& Energized otential (ha) I__Oridnal Revised _ar et ctual Creation Ytllizatlon

________________Levised) of May3L 199QNew tubewell 500 500 89 5Modemized tubewell I I 5 431 1 143,100 978

aehbilbtated tubewell 3712 3212 302,354 257 00___17dicate DOwer lnes* (5.212) (5.212) (624) _

ilotal 5.212 5,212 2.X74 4 40320 7.505

* Denotes numbers, each with an average length of 2.06 km.

11. As shown above, the shortfall is both in terms of tubewell system completed, potentialrealized and area actually irrigated under the project. Achievement of tubewell completion andenergization was 18 percent (new tubewells), 29 percent (modernized tubewells) and 73 percent(rehabilitated tubewells). Area actually irrigated was lower at 26 percentl (new tubewells), 22percent2 (modernized tubewells) and 11 percent (rehabilitated tubewells) of the additional potentialcreated. The principal reason for the low utilization is the shortage of power supply, ranging from3 to 8 hours per day. As a result, production levels have been substantially less than anticipated atproject appraisal.

12. Objectives of Sector Policies. The objectives of sector policies relevant to the projectwere concerned with funding for the 0 & M of project works and cost recovery policies. Actualreleases of budgetary allocations for 0 & M persistently lagged behind requirements.

13. Water rates had not been revised since 1983. Instead, GOB decided to hand over theoperation and management of tubewells to the Panchayats, initially on a five-year lease. Some 490

1 This figure has been brought in line with Tables 1, 2 and 3 of Appendix 3 andGOB's comments.

2 This figure has been brought in line with Tables 1, 2 and 3 of Appendix 3 andGOB's comments.

4

tubewells, most of them (94 percent) modemized or rehabilitated ones, had so far been transferredto the Panchayats. Only two of the Panchayats are financially autonomous in operating them. Thekey reasons for their success are reported to be availability of a reliable power supply and effectiveleadership. GOB's decision to transfer the tubewells to the Panchayats is well-intended and basedon the successful experience of such operation in West Bengal. What has not gone right in Biharis forward planning and preparation of the Panchayats and users for this exercise, and thecontinuous shortage of power supply and its undependability. As a result, in many cases, thePanchayats have not been able to pay the electricity charges and they still look to the MinorIrrigation Department (MID) for repairs and maintenance, largely due to non-availability of repairservices for these sophisticated tubewells in local markets.

14. Institutional Development Objectives. The main means of achieving the institutionaldevelopment objectives, as provided in the Staff Appraisal Report (SAR), were the provision ofinfrastructure and equipment, training of project staff, preparation of design and 0 & M manuals,studies related to project management, and monitoring and evaluation activities. These were allprovided to varying degrees of success. Management and water charges studies were completedbut they were inadequate and had the least impact on project management and cost recovery.Cluster buildings and transportation were also almost completed or nearing completion, albeit withdelays. There was a rapid turnover of senior staff including the Project Coordinator. Some staffvacancies were not filled in full (superintending engineers, geophysicists) or not filled at all(hydrogeologists) (see Appendix 2). The transfer of staff to MID, including the tubewelloperators from the Bihar Water Development Corporation (BWDC), had only increased the staffnumbers but not their quality. Staff training was more or less provided as planned. Themonitoring unit, with one executive engineer and two assistant engineers, was understaffed. Itconcentrated on physical and financial progress of works. An indicator tracking system was notused as a basis for monitoring project performance. The cumulative effect of weak staffing,inadequate studies and ineffective monitoring has led to under-utilization of physical facilitiesprovided under the project (buildings, vehicles and equipment).

15. Equity Objectives. Although equity was the major justification for the investment innew tubewells, the equity impact of the project defies proper assessment. In the absence of M & Edata on beneficiary participation, it is not possible to make a precise assessment. However, it isknown that the systems of water management and distribution have not functioned well. The moreinfluential farmers tended to get water during times of power constraint while others received lessor nothing at all and tubewell operators were reported to be not 'fair' in the distribution of water.The automatic operation system which was supposed to eliminate the partiality of tubewelloperators had not worked as designed. Siting of new wells might not have also favored the targetgroup as field visits of the ICR mission indicated that there were many shallow tubewells (over 20)within the command of a new PTW, which are normally owned by well-to-do farmers.

16. Economic Rates of Return (ERR). The current economic rates of return re-estimatedat completion are 2.3 percent for the project as a whole and -20 percent (new tubewells), 4.4percent (modernized tubewells) and 2.9 percent (rehabilitated tubewells), compared to 33 percent(overall project), 32 percent (new tubewells), 42 percent (modernized tubewells) and 29 percent(rehabilitated tubewells) estimated at appraisal. The recalculated ERRs are based on actualexpenditures incurred up to the closing date and costs to complete thereafter until 1998, and anactual and updated projection of benefits. Underlying assumptions about costs and benefits, andother information supporting the analysis, are shown in Table 9 of Part II and Appendix 3. The re-estimated ERRs differ significantly from the appraisal estimates. There are various factors whichhave contributed to the negative ERR for new tubewells, and significantly lower ERRs formodernized and rehabilitated tubewells, as compared to appraisal estimates. The more importantones include:

5

(i) a 74 percent to 78 percent lower command area per new and modernizedtubewells and 91 percent lower command area per rehabilitated tubewell, thanthat expected at appraisal;

(ii) at appraisal, the cropping intensity was expected to increase by 66-77 percent;revised estimates put the increase between 2-17 percent. The lowest 'withproject' cropping intensity (2 percent) is for areas commanded byrehabilitated tubewells. This is because of the poor maintenance of fieldchannels, resulting in higher conveyance losses, compared to areascommanded by new or modernized tubewells with the buried pipe systemsupported under the project;

(iii) area irrigated by private tubewells 'without project' at completion is about 20percent compared to none assumed at appraisal; and

(iv) increased costs of tubewells compared to appraisal (see para 24);

(v) economic costs in rupee terms have increased much more than the increase inthe price of the main agricultural output (paddy), while the economic price oflabor is six times that estimated at appraisal, the farmgate price of paddy andwheat has gone up between two to three times that estimated at appraisal.

17. Sensitivity Analysis. The potential economic benefits are not being fully achievedparticularly in terms of areas irrigated per tubewell, due to erratic and unreliable power supply.The fact that many PTWs are being used to irrigate areas ranging from 9 ha to 26 ha each achievingan average of 12 ha, is considered exceedingly low. The three factors which are expected toinfluence the ERR are: (i) variations in command areas; (ii) changes in 0 & M funding; and (iii)the inability of the MID to operate and manage PTWs as designed. The sensitivity analysisindicates that: a reduction in command area of 20 percent would lower ERR to -0.6 percent; areduction of 50 percent in 0 & M funding (by assuming that future benefits would be reduced by50 percent), would lower the ERR to about -7.4 percent; and that poor operation and managementwould lower ERR to -0.6 percent, assuming that the ineffective operation of MID would depressproject benefits by 20 percent.

18. Farm Incomes. At appraisal, four farm models were prepared to estimate incrementalcash income generated by the different models. The results showed incremental incomes ofRs.3,165 (heavy soils farm model), Rs.2,765 (mixed cropping farm model), Rs.2,535 (lightssoils farm model) and Rs.4,027 (mixed cropping with vegetable farm model) or Rs.420 to Rs.670per capita, assuming a family size of six members. A similar analysis (but based on irrigation bytype of tubewell) for the ICR based on cropping patterns and per ha crop budgets shown inAppendix 4 revealed incremental incomes of Rs.3,870 (new tubewells), Rs.3,878 (modernizedtubewells) and Rs.2,830 (rehabilitated tubewells) or Rs.470 to Rs.645 per capita in 1986 prices.Although the models prepared at completion are strictly not comparable to those projected atappraisal, well irrigation is profitable for relatively larger farmers but public tubewells (when well-managed and with an adequate power supply), can provide a valuable additional income to smallerfarmers who cannot afford to invest in wells.

19. Subsidies. The total annual 0 & M cost for PTWs is estimated by the MID at anaverage Rs.54,490 per tubewell on the designed utilization basis, including establishment cost ofRs.24,000, energy (electricity) charges of Rs.25,620 and maintenance cost of Rs.4,870, while thedirect revenue from water rates would amount to Rs. 17,045 per year, assuming 100 percent of

6

collection. The balance (Rs.37,445) will have to be supported from GOB's budget. However, thecollection rate has not exceeded 14 percent since 1988/89 and in 1993/94 it was less than 2 percent.Overall subsidies on PTW operation are therefore about Rs.37,445 per year per tubewell assuming100 percent recovery of water charges or about Rs.54,150 per year per tubewell, assuming only 2percent recovery rate. It would seem that some bigger farmers have also benefited, although it wasnot intended under the project.

C. MAJOR FACTORS AFFECTING THE PROJECT

20. Implementation Record. The project has continuously suffered from problems sinceits inception in April 1987, having been rated '3' since early 1989 and '4' during July 1991-May1992, when its rating improved to '3' and later to '2' in August 1993 before falling to '3' again inMay 1994. Overall, energization works out to 55 percent of the total planned at appraisal. Thedrilling of new tubewells was dropped on the advice of the Bank which gave priority to completionof wells already drilled. The position regarding modernized and rehabilitated tubewells issomewhat better. The single most important factor affecting the project is GOB's inability toprovide reliable and quality power for about 16 hours at peak demand to project tubewells. Thesituation further worsened due to the fact that against the planned strategy of extensive irrigation tospread water over as large an area as possible, with the assumption that with water rather than landas a limiting factor the common cultural practice in Bihar is to under-irrigate rabi crops (SAR, para4.34), most of the cultivators under the command areas were demanding optimum irrigation facilityfrom the system to maximize their benefits and, as such, there was too little water to serve too bigan area for productive commercial agriculture which could give adequate returns to pay back the 0& M charges for sustainable operation. Even beneficiary participation for proper management forequity and sustainability can be effective only when the irrigation service is reliable and adequatefor productive commercial agriculture. The other important deficiencies which hampered projectimplementation can be classified into:

(i) Factors not generally subject to Government control. These included law andorder problems, limiting Bank financing to operative wells only (this was tolimit the start-up of numerous works and the completion of a few), and theinadequacy of the management and water charges studies. These have in partadversely affected the achievement of project objectives.

(ii) Factors generally subject to Government control. These included delays inthe appointment of key staff, lack of adequate counterpart funds in lateryears, delayed start in the construction of dedicated power lines anduncoordinated construction work between BSEB and the Tubewell Wing ofthe MID (for example, only four new and 33 modernized tubewells werecompleted in all respects until 1991), a long strike by engineers and staffduring 1991/92, and delay in delegation of adequate financial power to fieldofficers. These had substantially affected the implementation pace oftubewell installations.

(iii) Factors generally subject to implementing agency control. The project hasencountered continuous implementation problems. There was insufficientadvance planning and updating of implementation, procurement and 0 & Mschedules, lack of coordination between the State Electricity Board andDepartment of Agriculture, and delays in institution-building measures suchas M & E and training. The procurement progress was slow mainly because

7

of the cumbersome and time-consuming procedures followed for evaluationof bids and finalization of awards. There were also delays in construction ofcluster buildings and workshops, administrative building and access roads toPTWs. As the first Bank project implemented by the MID, the departmentstaff took time to familiarize themselves with the local competitve bidding(LCB) and intemational competitive bidding (ICB) procedures, and this hascaused some delays. The post of Project Coordinator was filled by a seniorengineer and initially there were five Project Coordinators in three years andeight Project Coordinators over the project period of seven years. Thefrequent change in Project Coordinator has meant that proper direction andcontinuity to the program of work could not be given. The combined effectof these factors was reflected in substantial under-achievement of projectobjectives.

21. Implementation Delays. There had been significant shortfalls in the physicalachievement of targets planned at appraisal as indicated in Appendix 4. At appraisal, it wasestimated that construction and energization of tubewells would be completed by September 1993with a project closing date of May 31, 1994. Current estimates indicate that final construction isnot likely to be completed until March 1998, although the Credit was closed on May 31, 1994.

22. Several factors had contributed to the delays in project implementation. Theseincluded scattered unplanned work without coordinated planning in the initial years to complete allworks in a tubewell system, energization falling behind schedule due to incomplete pumphouseand related works, theft of aluminium conductors in some districts (Aurangabad, Nalanda, Gaya)which delayed the commissioning of PTWs in these districts, delays in award of contracts,inadequate counterpart funding in later years, exacerbated by slow credit disbursements despiteheavy expenditure mainly because of slow materials procurement and non-completion of PTW civilworks, a condition for qualifying tubewell civil works for Bank disbursement, limited delegationof powers to project engineers in regard to contract awards (which was later remedied), poorutilization of tubewells due to unreliable and erratic power supply and vandalism, and pooragricultural extension.

23. Actual Project Cost. Table 8A of Part II gives a comparative statement of appraisalestimates and final costs. The project, as envisaged at appraisal, was only partially completed bythe Credit closing date. When allowance is made for costs to complete, the total final cost wouldamount to Rs.3,495 million (US$140 million), representing a 170 percent cost overrun in nominalrupee terns or 55 percent in real rupee terms. Expressed in US dollars reflecting the depreciationof the rupee against the US dollar, the total overrun would be only 40 percent. As shown inAppendix 5, the overrun was caused mainly by price escalation (115 percent) and partly byquantity changes (55 percent) arising from design and other variations including an increase in 11kV lines for each PTW from an average of 1.35 km at appraisal to 2.06 km during implementation.Some quantity changes also originated from the modemization of 500 existing PTWs in the floodzone instead of rehabilitating them as foreseen at appraisal. The cost of engineering andadministration increased by 677 percent followed by modernized tubewells (245 percent),rehabilitated tubewells (239 percent), new tubewells (45 percent), management improvement (29percent) and dedicated power supply (10 percent), over the respective appraisal estimates.

24. Excluding costs of dedicated power supply, the overall cost per tubewell at completionwould be Rs.745,000 (new tubewell), Rs.700,000 (modernized tubewell) and Rs. 152,000(rehabilitated tubewell) compared to Rs.513,000, Rs.305,000 and Rs.39,000 respectively, atappraisal. Translated in terms of hectare, these would amount to Rs.7,450/ha (new tubewells),

8

Rs.7,000/ha (modernized tubewells) and Rs. 1,900/ha (rehabilitated tubewells) compared toRs.5,130/ha, Rs.3,050/ha and Rs.488/ha.

25. Project Financing. Because of considerable implementation delays combined with thelimitation of Bank financing to operative wells only, credit disbursements have lagged seriouslybehind actual expenditures. The credit was able to finance only about US$26.6 million or merely19 percent of the total project cost compared to the 70 percent envisaged at appraisal, severelyincreasing the burden on the state budget. This has raised into question GOB's ability to completethe project as originally planned.

D. PROJECT SUSTAINABILITY

26. General. The ERR of the project is too low to be consistent with sustainableeconomic performance. The major challenge for the sustainability of the tubewell systemestablished under the project is the provision of a reliable power supply and well-functioningO & M services. As the power supply cannot be assured by the BSEB in the immediate future, theonly option would be to install diesel generating sets. In fact, the Bank extended necessaryassistance including consultancy services for determining the economic viability of dieselgenerating sets and agreed to reimburse their cost under the National Water Management Projectprovided a small percentage of capital costs and 0 & M expenditure were borne by thebeneficiaries. Unfortunately this was not experimented in a single scheme. As the MID wouldnot have the financial resources to operate and maintain these schemes and their diesel sets, the bestcourse of action would be to transfer them to farmers' organizations whether Panchayats orotherwise, and to intensify training and technical assistance programs (provided through the Waterand Land Management Institute). The establishment and functioning of the two Regional and 18Divisional Workshops for the provision of spare parts and repair of tubewells on behalf offarmers' organizations is a prerequisite to sustainability. The project may have an impact on thequality of groundwater due to the increase in fertilizer and pesticide use.

27. Cost Recovery. At appraisal, water rates in the states were expected to be increased tocover the full 0 & M expenses plus a reasonable portion of capital cost. No revision has takenplace since 1983 although the electric tariff has been raised twice, the last one to Rs.120/Brakehorse-power (BHP). Collection of water rates has persistently lagged behind and the averagecollection to billing has declined from 14 percent in 1988/89 to 2 percent in 1993/94. There is thusa clear need not only to secure collection of arrears but also to increase the present rates to ensureefficiency of water use and assure confidence for the GOB to enhance 0 & M allocation until suchtubewell schemes are turned over to farmers' organizations. The present system of handing overtubewells to Panchayats is not based on prior planning, discussion and willingness of potentialusers. This appears to have been done in a routine manner without either preparing the benefitingfarmers, or providing them with the required training and ensuring a clear definition ofresponsibilities of the different parties involved - MID, Panchayats and farmers. As a result,Panchayats, which have taken over, have presumably assumed it to be another "welfare" measurefor funding by GOB. One option to dispel this misconception would be to demonstrate the successof this arrangement through organizing selective water users' associations who are willing and ableto operate it successfully. Based on such experience, the scheme could be expanded.

28. At appraisal, it was expected that the power to PTWs and private shallow tubewellswas to be supplied at a uniform rate of Rs.0.35 per kwh as metered supply. There had since beena change in charging for energy for PTWs from a metered rate to a monthly flat rate based on BHPinstalled - in 1991 Rs.90 per BHP/month and from 1993 Rs.120/BHP/month. These rates wouldcorrespond to the metered rates if these PTWs were to operate for 16 hrs/day as designed. Since,

9

however, the actual working hours of PTWs range from 3 to 8 hours per day, the effective tarifffor these wells is about four times the tariff paid to private shallow tubewell owners (atRs.0.35/kwh). MID is thus billed with high power charges for the unmetered supply which isequivalent to about Rs.2.00 per kwh on the basis of actual working hours of PTWs. There is aneed to bring parity to the power tariff for PTWs and private tubewells for the unmetered supply.There is also a concomitant need to fix energy meters on tubewells.

29. Operation and Maintenance. An important project goal was to create high performancetubewell systems based on equality in water distribution that would allow farmers to increase theircrop production. This has not been realized so far as there is presently no clear plan for 0 & M.The principal constraint is the decline in the quality and quantity of power availability. Otherfactors have also hampered performance, as indicated below:

(i) unreliable water delivery particularly to tail-end farmers;

(ii) delays in repairing pump units during the irrigation season;

(iii) excessive conveyance system losses in rehabilitated tubewells, not using pipesystems;

(iv) deteriorating maintenance due to low 0 & M budget; and

(v) poor operational links between the MID, State Electricity Board and theDepartment of Agriculture especially at tubewell level.

30. The combined effect of these constraints has seriously affected cropping patterns,intensities and crop yields; and the area irrigated declined from 62 percent of the design commandin 1974/75 to about 12 percent for project wells at present. Cost of rented water is high at aroundRs.500/ha for three irrigations. Farmers still pay these high rates because of assured quantity andtimely supply. The major prerequisites for a well-functioning 0 & M system concern adequatestaffing, proper decentralized repair facilities, training, monitoring of tubewell performance andO & M funding, all of which need to be improved for better performance and sustainability.

E. BANK PERFORMANCE

Identification and Preparation.

31. The conceptual framework for the project was based on previous experience under theUP Tubewells Projects I and II, and the inclusion of modernization and rehabilitation componentsat the instance of the Bank was well in line with GOB's development priorities and with the Bank'sstrategy for the country. Preparation assistance to the government was carried out by three Bankmissions composed mainly of groundwater specialists, irrigation engineers and electricalengineers. Although one of these missions included an agriculturist and a management consultant,neither of the three missions had a water management specialist nor a sociologist.

Appraisal

32. Overall, the project appraisal identified project goals and established concise projectobjectives consistent with sectoral strategy. It included sensitivity analysis for one of the keyvariables - power supply. A thorough project appraisal was carried out with the participation of 11professional specialists, again dominated by engineers (irrigation, groundwater and electrical), as

10

reflected in the design of the project to provide a reliable, timely and equitable irrigation service.However, there were inadequacies which made the appraisal deficient.

33. Design. Project design apparently relied heavily on the attractiveness of technicalinnovations on the assumption that the availability of an efficient and reliable irrigation system itselfwould provide adequate incentives for farmers to maximize net production benefits. The requiredlinkages with extension services were not designed at appraisal. The lack of funding foragricultural extension was another lacuna under the project in supporting irrigated farming intubewell command areas. M & E also was not properly designed at appraisal to play its role ofproviding project management with the performance indicators necessary for both forwardplanning and rectification of deficiencies in major factors such as power supply, water managementand agricultural performnance.

34. Technical. Sophisticated technology (particularly automatic operation) of new andmodernized tubewells was directly transferred from the experience of Uttar Pradesh which had ademonstrated experience from the previous project (UP Tubewells Project, Credit 1004-IN, 1980),before its successful experience under the second project. It was too optimistic to expect Bihar toadopt a large number (500) of new wells without learning from a pilot operation in a state with adifferent socio-economic context, and paucity of effective and well-trained operators.

35. Economic. Appraisal estimates were optimistic. For example, the spread of privatetubewells 'without the project' was ignored in estimating agricultural production in both financialand economic analysis. The SAR did not also quantify the risk to the project outcome of slippageon the financial and institutional capacity, when these were recognized to be important sources ofproject difficulty. The SAR did also not designate important variables as indicators for monitoringduring supervision as a basis for indicating by how much the assessment of an operation's impacthad improved or worsened.

36. The appraisal mission was advised during the decision meeting on November 27,1985, that there was considerable public pressure against the creation of dedicated power lines, andthat in the case of the UP Tubewells Project II (Credit 1332-IN), the Government of Uttar Pradeshhad suggested to GOI that the dedicated power line strategy should be scrapped. It was alsoexplained that the opposition had come from pump-set owners not connected to dedicated powerlines and who received less reliable power than public tubewells on dedicated lines. The appraisalmission responded that "a reliable availability of power for efficient public tubewell operation iscrucial and that in the absence of dedicated power lines the risks to the project would beunacceptable." At the request of the meeting, a sensitivity analysis was carried out at appraisal onthe assumption of power availability for only 4-6 hr/day instead of up to 16 hr/day, as stipulated inthe SAR. The ERR was still found to be acceptable at 16 percent. What was missed in thisanalysis was the neglect of farmers' response in the face of not only unreliability but also the erraticnature of the reduced power supply on which they could plan their future investment in irrigatedcrops.

37. This should have been followed up with investment in an alternative source of energyto mitigate the risks. The methodology followed at appraisal for risk analysis proved inadequate.

38. Institutional. The Bank was again over-optimistic in assuming that the proposedinstitutional reforms would help construction, operation and maintenance of tubewells effectivelyand efficiently, when the new Tubewell Wing was to inherit the same staff from the BWDC.

I1

39. Sociological. A baseline survey should have been undertaken prior to appraisal toprepare for farmers' participation in a meaningful manner. The results of the survey proved futileas follow-up surveys were never carried out.

40. Commitment. There was commitment by GOB in the early years of the project asevidenced by the full allocation of counterpart funds for the first two years of the project. Thecommitment of beneficiaries was simply assumed on the grounds that a reliable, timely andequitable irrigation service would induce farmers to make investments in inputs and plant highyielding varieties of crops. This might have been a reasonable assumption if the state had aneffective extension and credit service in place. Both extension and institutional credit hadshortcomings at the time of appraisal.

41. Appraisal of Implementing Agency. This was sufficiently done and managerial andfinancial weaknesses were brought out with mitigating investments in institutional improvements.

42. Incentives for Sustainability. Adequate power supply constituted the key ingredientfor the sustained operation of the tubewells and the project did attempt to provide a minimum of 16hr/day through provision of dedicated power lines.

43. Skill Mix of Appraisal Team. The appraisal team consisted of 11 membersrepresenting specialized skills but not balanced with over-representation in some (irrigationengineering) and no representation in others (water management and a sociology). The inclusionof a water management specialist and a sociologist would have provided more insight into fieldchannel improvement in rehabilitated wells and farmer participation in the operation andmanagement of wells.

Supervision

44. The performance of the supervision missions was also deficient. Twelve supervisionmissions were fielded over seven years from February 1987 to May 1994, at an average of oneevery seven months. There was no staff continuity between appraisal and the start ofimplementation. The staff employed on supervision were skilled in most of the relevant technicaland economic areas but less skilled with respect to expertise in institutional analysis, watermanagement, beneficiary participation and disbursement. The extent of continuity of staffingduring implementation is reflected in the fact that about 67 percent of the project supervisionmissions had the same staff for eight missions. Most missions comprised at least two staffmembers. The water management specialists and sociologists were not at all available in any of thesupervision missions and the management specialist took part in only one of the missions.Considering the incidence of low utilization of irrigation potential and management problems in theproject, this represents a gross under-representation of critically useful and relevant expertisewhich was ignored even in the composition of the mission which undertook the mid-term review.

45. Successive supervision missions have expressed concern at continued poorperformance and the Bank conveyed its concern to the Department of Economic Affairs, GOI by itsletter dated September 9, 1991. The subsequent supervision missions reported no improvementbut further shortfalls on account of funding constraints and a strike by engineering staff. The Bankfollowed it up with a letter threatening to suspend Borrower's rights to withdrawals from theCredit unless certain conditions were satisfactorily completed by April 30, 1992. Based on actionstaken by GOB and a generally satisfactory status of compliance with the conditions, the threat ofsuspension of disbursement under the credit was lifted. Bank's reluctance to take a firm stand withthe Borrower is reflected in the prolonged survival of the problem project.

12

46. Although Bank supervision missions repeatedly expressed concern over the slowutilization of irrigation potential, they did little to direct the project towards rectifying thisdeficiency. In fact, on the contrary, the Bank agreed to the deletion of dedicated feeder lines. Theperformance of the mid-term review mission in 1990 was poor. Although it was difficult for themission to make an overall judgement on the adequacy of project design, it should have drawnattention to the requirement for some restructuring if project performance continued to be poor. Itshould have also fixed a date for possible restructuring. Even two years later, when the Bankrealized the difficulty of continuing the construction of dedicated power lines, it failed to modifythe corresponding covenant and the one on power supply for 16 hours. It also failed to restructurethe project as warranted by its poor performance.

47. The Bank anticipated the important function of M & E in this type of project and madeadequate provisions. However, despite repeated interventions by the supervision missions, theresults of monitoring and evaluation activities did not meet requirements.

48. The Bank was flexible in agreeing to increasing the disbursement percentage for civilworks but its conditions for release of funds for completed/operative wells only, though well-intended, did not help GOB take full advantage of the increased percentage. As a result, there wasa wide gap between expenditure incurred and disbursement claimed, throwing a severe burden onlimited state funds.

F. BORROWER PERFORMANCE

Identification and Preparation

49. The project was prepared by MID and BSEB in close coordination with the CentralWater Commission (CWC) and Ministry of Water Resources (MOWR) in GOI. GOB engineersvisited Uttar Pradesh in 1984 and concluded that any new PTWs in Bihar should incorporateimproved technology similar to that introduced under the Uttar Pradesh Tubewells I and IIProjects. As recommended by the Bank identification mission in February 1985, GOB broadenedthe project scope to include rehabilitation and/or modernization of existing PTWs. GOB also madea decision to replace the BWDC with a new Tubewell Wing within MID, with responsibility forconstruction, operation and maintenance of all PTWs. A project preparation report was compiledfor MID by a consulting firm. The project preparation, however, was deficient. Project coveragecould have been more concentrated rather than scattered as prepared. This has contributed toimplementation difficulties. Another aspect which has been transplanted without deeper study isthe sophisticated system of operation for a project to be implemented for the first time in Bihar.Also, the experience of dedicated feeder lines in UP was not fully absorbed.

50. Given the first experience of a Bank-funded project for the MID, the PTW's poortrack record, and the proposed institutional reorganization, GOB was too optimistic to keep theproject size large with some 500 new tubewells.

Implementation

51. The performance of GOB and the implementing agencies was deficient in the actualimplementation of the project. GOB, as well as the Bank, under-estimated the risk ofimplementation delays due to coordination problems not only between MID and BSEB but alsobetween MUD and the agricultural extension services. Only four new and 33 modernized tubewellscould be completed in all respects until 1991. Coordination has since improved but is still belowexpectations. Other major problems which thwarted progress include:

13

(i) Planning and Ouality Control. The cluster concept of planning and executionof work was not followed, resulting in dispersed works constraining speedycompletion and energization of completed wells. Quality control also proveddifficult due to a large number of tubewells on widely scattered sites,exacerbated by concurrent implementation of modemization and rehabilitationworks. The expertise of the Groundwater Directorate was not utilized insiting, drilling and tubewell design, and this, combined with the absence ofindependent quality control unit, affected the quality of completed wells;

(ii) Power Constraint. Tubewell energization was seriously delayed even afterthe proposal to erect dedicated power lines was dropped in 1992. There wasa time lag of two years between drilling and completion of civil works andcommissioning of tubewells. Part of the delay can be attributed to the lack ofcoordination between MID and BSEB. The power supply to PTW has beenerratic, ranging from three to eight hrs/day with the occasional theft ofconductors, transformers and excessive fluctuations. Some power isavailable at night when demand is low but farmers are reluctant to workduring the night hours. The non-availability of sufficient and timely powerhas made tubewell irrigation unreliable;

(iii) Underutilization of Facilities. The location of cluster buildings has not beendone properly since some such as the one at Bhakra in Muzaffarpur district,was not occupied. Several junior engineers were not provided with vehiclesand the condition of vehicles used by other officers was also not satisfactory;

(iv) Workshops. The workshop facilities at regional and divisional level were notaugmented and reliance was placed on the market for repairs with the resultthat the breakdowns remained unduly long;

(v) Coordination. There was no coordination between MID and the Departmentof Agriculture over extension services in the tubewell command. The farmersare not aware of water use efficiency as they are operating 2-4 outlets at atime on a loop of the distribution network; and

(vi) Inadequate Delegation. Financial powers of project officers were inadequatealthough this was later remedied by enhanced delegated authority. No regularpayments could be made to agencies as the authority to draw cheques wasvested in project officers 4-6 months late on a yearly basis.

52. The project has provided training to 227 engineers (executive engineer - 2, assistantengineer - 72 and junior engineer - 153), 82 electricians, 42 pump fitters, 202 operators and 636beneficiaries. The Water and Land Management Institute has training capabilities for differentaspects of water management and other subjects. It is not adequately utilized by the project as only22 persons in one batch have so far been trained from June 1991 to September 1991.

53. All the studies proposed under the project were completed. However, there was littleimpact of the studies on project design or implementation.

54. The monitoring unit with one executive engineer and two assistant engineers isunderstaffed. Its performance failed to provide project management with the performanceindicators necessary for both forward planning and rectification of deficiencies in initial years. An

14

attempt was made by the Bank to promote computer processing of data, but little progress wasmade. This has not only affected project performance but also hindered forward planning in publictubewell development in Bihar.

55. Compliance with covenants was partial. Some covenants were no longer applicableand required revisions particularly those relating to water charges, 0 & M and dedicated powerlines, which at best can only be considered partially complied with. GOB was not in compliancewith the essential covenant on power supply. The question of water charges has been a long-standing and pervasive problem in India. Attempts to resolve the problem at the level of individualprojects have met with negligible success.

G. ASSESSMENT OF OUTCOME

56. The project's outcome is unsatisfactory as the project has failed to achieve most of itsobjectives and has not yielded, nor is it expected to generate, substantial development impactwithout additional investment, particularly in diesel generating sets.

H. FUTURE OPERATION

57. Following discussion with MID on future operation/action plan concerning completionof all ongoing works and also to maximize net project benefits, MID has agreed to: (a) complete allongoing works by March 1998 and make available adequate funds for this purpose and refrainfrom constructing any new structures before completing all ongoing schemes in view of GOB'sbudgetary constraints; (b) continue transferring 0 & M responsibility for tubewells toPanchayats/farmers' organizations and also carry out a thorough review of the tubewellspreviously handed over and undertake remedial measures for improved performance; (c) provideadequate 0 & M funding until all tubewells are turned over to Panchayats/farmers' organizations;(d) allocate sufficient funding for training in installation and operation of improved electricalregulation system already procured for the efficient operation of the tubewells but not in use atpresent for want of adequate training; (e) implement a pilot scheme to install diesel generating setsin about 10 selected tubewells to test the effectiveness of operation and farmers' willingness to bearfull 0 & M cost and a portion of the capital cost; and (f) monitor tubewell performance throughcollection of data on operational hours per tubewell, yield of the well, pumping power required perwell, irrigated potential created, actual area irrigated, cropping patterns, intensities and yields in thekharif, rabi and hot seasons on a continuous basis.

58. It is recommended that an impact evaluation mission from the Bank visit the statearound 1997 to evaluate the performance of project wells.

1. LESSONS LEARNED

59. The main lessons learned during project implementation are as follows:

(i) Given the past two decades of poor PTW performance and the institutionalreorganization required to achieve improvements, the proposed installation ofa large number (500) of new tubewells without the prior benefit of a pilotscale operation, as in Uttar Pradesh, was very ambitious. Small farmers'interest, which was sought to be promoted by proper siting of new wells, can

15

be, for the present time, secured by selecting wells for modernization orrehabilitation in command areas dominated by the target group.

(ii) The provision of dedicated power lines with power availability of 16hours/day at peak demand against a background of poor power generationand poor supply was not realistic. In future, project power supply should beassessed at the state level to ensure that it is adequate for the project.

(iii) The project experience demonstrates the critical significance of state finance inBihar for satisfactory implementation and the need to ensure an adequate flowof funds from the Credit. Lirniting Bank financing to operative wells only,though well-intended (by restricting the start-up of numerous works and thecompletion of few) hampered the reimbursement of counterpart funds and thecorresponding legal covenant required adjustment to local circumstances. Arevolving fund at the state level is also required in addition to the specialaccount established with GOI.

(iv) Groundwater development based on PTWs would increasingly face problemsof poor performance, both in terms of productivity and equity, unless properaction is taken for power supply and effective transfer to beneficiaries. Theexisting system would, without significant changes in the management andfinancing, deteriorate as a result of pressure on already strained budgetaryresources.

(v) The re-estimated dismally low ERR of the project suggests that even withimproved technology, investment in public tubewells may not necessarily beeconomically viable. Further investment in public tubewells should thereforebe reviewed, in order to encourage private investment in shallow tubewellswhile resolving most of the problems now faced with public tubewellsthrough their transfer to Panchayats after ensuring certain follow-up stepsincluding adequate power supply and repair facilities.

(vi) There is a need to address issues related to Panchayats, farmers'organizations and 0 & M of PTWs comprehensively at preparation andappraisal of the project to ensure smooth implementation.

(vii) Monitoring and evaluation of tubewell irrigation and agricultural performancedata deserves high priority as a critical tool for rectifying deficiencies andsustained use of the irrigation potential created.

16

PART II: STATISTICAL TABLES

I Table 1: Summary of Assessments

A. Achievement of objectives Substantial Partial Negligible Not ApplicableV) V) V) V)

Macro poli:ies Fn o [Z]Sector policies Li Oi ED EliFinancial objectives Li ED Li LInstitutional development Eli Eii EiI EliPhysical objectives Li Li Li Ei

Poverty reduction En Eo E7 LiGender issues Li Li Li LiOther social objectives Li Li Li LiEnvironmental objectives Li Li Li LiPublic sector management [] Ei EJ LPrivate sector development Li Li Li [3I

Other (specify) Li Li Li Li

B. Project sustainabilitv Likely Unlikelv Uncertain() W) V)

HighlyC. Bank performance satisfactory Satisfactorv Deficient

(/) V) V)Identification i E1 LPreparation assistance Li Li LiAppraisal L L L

Supervision L Li Li

17

HighlyD. Borrower performance satisfactorv Satisfactorv Deficient

(/) M) M/)Preparationi / a71 Z

Implementation I L D

Covenant compliance FOi Ea L7Operation (if applicable) Li EII [ZI

Highly HighlE. Assessment of outcome satisfactorv Satisfactorv Unsatisfactory unsatisfactorv

II Ci) L) L)

CZ 2Li[

18

Table 2: Related Bank Loans/Credits

Loan/credit title Purpose Year of approval Status

Preceding operations

1. Bihar Agricultural Credit Mobilize institutional credit to 1974 Closed. PCR issued.Project (Cr.440-IN) USS32 M finance construction of new tubewell

facilities.

2. Bihar Agricultural Extension & Reorganize & stengthen the agri- 1977 Closed. PCR issuedResearch Project (Cr.761-IN) cultural extension service & related Dec. 1985.USS8 M adaptive research throughout the

state.

3. National Seeds 11 Project Continue to ensure that availability 1978 Cosed. PCR issued for(Cr.816-IN) US$25 M of HYV seed nationwide would not Seeds I & II, June 1987.

be a constraint to agriculturaldevelopment, by further developingthe institutional structure of the seedindustry and adding to the existingseed processing capacity. Five states,Bihar, UP, Orissa, Rajasthan &Karnataka were involved in thisproject.

4. Subemarekha Irrigation Project Increase agricultural production 1982 Closed. PCR issued(Cr.1289-IN) US$127 M through irrigation of an area of April 1990.

about 255,000 ha in the States ofBihar, Orissa & West Bengal, toprovide municipal & industrial watersupplies and to provide floodlmoderation on the river in WestBengal and Orissa.

5. UP Second Public Tubewell Construct improved public tubewell 1983 Closed. PCR issuedProject (Cr.1332-lN) USSIOI M systems, modemize existing standard Dec. 1992.

tubewells and connect to exclusive 11kV feeder lines of existing standardtubewell systems.

6. National Agricultural Research Strengthen location-specific research 1985 OngoingProject 11 (Cr.1631-IN) at the level of the agro-climaticUS$72.1 M zones of India including Bihar;

providing needed field-orientedresearch support to the ongoingprojects.

6. National Agricultural Research Help strengthen agricultural research Closed. PCR issuedProject (Cr.855-lN) USS27 M at state agricultural universities. June 1990.

Following operations

1. West Bengal Minor Irrigation Upgrade and construct public 1986 Closed. PCR underProject (Cr.1619-IN) US$99 M tubewell irrigation systems, open dug preparation.

wells and river-lift installations.

2. National Agricultural Extension Introduce T & V system in Himachal 1987 OngoingProject III (Cr.1754-IN) Pradesh, Bihar and Uttar Pradesh;USS85M further strengthen the reorganized

agricultural extension and linkagesbetween extension and research inAssam.

9. National Water Management Increase agricultural output pro- 1987 OngoingProject (Cr.1770-IN) US$114 M viding farmers with a more reliable

& predictable irrigated supply.

10. Bihar Plateau Development Help GOB efforts to increase rural 1992 OngoingProject (Cr.2439-IN) incomes & reduce the incidence of

poverty in the plateau area of Bihar.

19

Table 3: Project Timetable

l ___________________ l Date actual/Steps in project cycle Date planned latest estimate

Identification (Executive Project Summary) _ February 1985

Preparation May 19851/

Appraisal September 1985 September/October 1985

Negotiations March 1986 16-23 June 1986

Letter of development policy (if applicable) NA. NA.

Board presentation May 1986 October 16, 1986

Signing January 13, 1987

Effectiveness January 1987 April 13, 1987

First tranche release (if applicable) NA. NA.

Mid-term review (if applicable) February 19902/ 5-9 March 1990

Second (and third) tranche release (if applicable) NA. NA.

Project completion September 1993 November 30, 1993

Loan closing May 31, 1994 May 31, 1994

N-A. = Not applicable.

1/ Time taken to prepare 6 months, prepared by GOB with assistance from IDA.2/ According to Schedule 2, Para 7, of the Project Agreement, GOB is required to furnish to the Association

by December 31, 1989, for its review and comments, draft terms of reference for undertaking a mid-termreview of the project. This review was tentatively scheduled for the week of February 5, 1990.

Table 4: Loan/Credit Disbursements: Cumulative Estimated and Actual(US$ thousands)

FY86 rY87 FY88 FY89 FY90 FY91 FY92Y/ FY93 FY94 FY95

Appraisal - 1,900 8,100 17,600 29,800 44,100 56,300 65,100 68,000 68,000

Revised estimate 1'l - 1,900 8,100 17,600 29,800 44,100 10,600 19,400 22,300 22,300

Actual - - 5,597 9,402 10,808 14,220 17,515 18,544 18,884 26,640

Actual as % of revised - - 69 53 36 32 165 96 85 115Vestimate

Date of final disbursement November 21, 1994

1/ Cancellation as of Decembcr 5, 1991 - USS45.7 million (SDR 40 million).2/ Exceeds 100% becausc of USS deprcciation against SDR. In terms of SDR, actual disbursement was 19.5 million against the revised

estimate of 195 million, giving 100%.

20

Table 5: Key Indicators for Project Implementation

I. Key implementation indicators in Estimated ActualSAR/ President's Report Appraisal

Appralsal Revisedl

1. New tubewells (No.) 500 500 892. Modernized tubewells (No.) 1,000 1,500 4313. Rehabilitated tubewells (No.) 3,712 3,212 2,354

II. Modified indicators (if applicable) l

1.2. NA.3.

III. Other indicators (if applicable)

1. Dedicated power lines (No.) 5,212 5,212 6242. Average length of conductors (km) 7,036 7,036 4,6971/3. Existing power lines (No.) 1,656

'/ Average length of conductors at 2.06 km for dedicated power lines (624) plus existing power lines (1,656)totalling 2,280 tubewells.

Table 6: Key Indicators for Project Operation

(Not identified at appraisal)

Table 7: Studies Included in Project

Purpose as definedStudy at appraisal/redefined Status Impact of study

1. Agro-economic base- Study of existing facilities Survey completed Negligibleline survey and new lands to be served

by project tubewells.

2. Cost Recovery study Introduce an improved Study completed Water rates not raisedwater charges system.

3. Management study Assist in developing an Study completed Negligibleefficient managementstructure for the newlycreated Tubewell Wing.

Table 8A: Project Costs

Project Components | Appraisal Estimate1/ Actual Expenditure up to Costs to Complete3/ from Final CostCredit Closure (May 31, 94) May 31, 94 to March 31, 98

(Rs miltion) (USS million) (Rs million) (USS mitlion)2

1 (Rs million) (USS miltion) (Rs mittion) (USS million)

1. New tubewelt systems 256.7 19.7 62.4 3.2 310.0 9.9 372.4 13.1

2. modernized distribution 304.6 23.4 361.0 14.6 690.0 22.0 1,051.0 36.6systems on existing tubewetts

3. Rehabilitation of existing 144.4 11.1 256.4 13.6 232.0 7.4 488.4 21.0tubewelts

4. Dedicated power supply 355.7 27.4 291.0 17.9 102.0 3.2 393.0 21.1(existing & new tubewells)

5. Management improvement 95.7 7.4 35.5 1.6 88.0 2.8 123.5 4.4

6. Engineering & administration 139.1 10.7 653.4 30.1 413.0 13.2 1,066.4 43..3

Totat Project Cost 1,296.2 99.7 1,659.7 81.0 1,835.0 58.5 3,494.7 139.5

1/ Physicat and price contingencies identified with specific components.

2/ Dottar figures based on annual expenditures using the fotLowing exchange rates: 1987 = Rsl2.962; 1988 = Rs13.917; 1989 = Rs16.226; 1990 = Rs17.504;1991 = Rs22.742; 1992 = Rs25.918; 1993 = Rs3O.493; 1994 and after = Rs3l.371.

3/ Costs based on annual estimates made by MID.

22

Table 8B: Project Financing

Source Appraisal Estimate Actual/latest Estimate

(US$ million) (US$ million)

IDA 68.0 26.6

Cofinancing Institutions Nil Nil

Other external sources Nil Nil

Domestic contribution 31.7 112.9

TOTAL 99.7 139.5

Table 9: Economic Costs and Benefits

Appraisal Estimate ICR Estimate

Incremental foodgrairn production 247,000 tons/year 34,000 tons/yearat full development .

Incremental wheat production at 146,000 tons/year 14,000 tons/yearfull development

Net Present Value (Rs million) 1,546 -810

Economic Rate of Return_(%)

- Whole Project 33 2.3- New Tubewells 32 -20- Modernized Tubewells 42 4.4- Rehabilitated Tubewells 29 2.9

Assumptions:

Project life (years) 25 25

Standard conversion factor 0.8 0.9

Unskilled labour valued at: 50% of financial wage rate 90% of financial wage rate

Financial wages (Rs/day) of 10.5 35unskilled labour I _I__ _

23

Table 10: Status of Legal CovenantsIndia

Bihar Public Tubewell Project

Agreement/ Covenant Type Present Original Revised Description of Covenant CommentsSection Status' Fulfillment Fulfillment

Date Date

3.01(a) Accounts C // // Maintain separate accounts andand furnish to IDA certifiedcopies of accounts & financialstatements within 9 months fromend of financial year.

3.01(b) Accounts/Audit Soon // // Have accounts audited annually Audit Report - overall& furnish to IDA on finalization Account & Audita report of the audit. Report SOE's for

period April 2 - March31, 1993: yet to bereceived.

3.04(a) Regulatory/ CD 12/31/87 // Prepare draft TOR for a water See para 3.04(b).Institutional charge system survey.action

3.04(b) Regulatory/ CP 12/31/88 // Furnish a proposal for the GOB has decided toInstitutional establishment of a water charge transfer all TV in-action system together with a timetable stallations to Pan-

for its implementation. chayats for O&M.This resolves O&Mcost recovery throughwater charges. GOByet to hand over alltubewells to

I ______________ ___________ ___________ ______________________________ Panchayats.

3.04(c) - do - CP 07/31/89 // Adopt & implement an irrigation See remarks in 3.04(b)water charge system. above.

3.05 - do - CP // // Maintain irrigation water charges See remarks in 3.04(b)at levels adequate to cover O&M above.and a reasonable portion ofinvestment costs.

SCH.2(la) Implementation C // // Locate, plan & design worksI_____I____ under part A-C of the project. .

SCH.2(1b) - do - C // // Operate & maintain irrigationworks under part A.

SCH.2(1c) - do - CD 03/01/87 // Prepare draft design & O&Mmanuals for tubewell system.

SCH.2(ld) Management C // // Sanction staff positions in Tube-aspects of the well Wing in accordance withproject staffing schedules satisfactory to

IDA.

SCH.2(le) - do - CP // // Provide adequatc staffingfacilities services for agriculturalextension to operationalcxtension services, throughout theproject area.

SCH.2(2a) - do - C // // Maintain a Project CoordinatingI _________ I____ ___________ ___________ Unit within Tubewell Wing.

SCH.2(2b) - do - C // // Maintain a Project CoordinatingUnit within Tubewell Wing.

24

Agreement/ Covenant Type Present Original Revised Description of Covenant CommentsSection Status' Fulfillment FulRillment

Date Date

SCH.2(3a) Monitoring/ CD 03/31/87 // Furnish to IDA for review, draftReviews work plans and schedules for

.__________ ________ M&E activities.

SCH.2(3b) Monitoring/ C 07/01/87 // Revise above plans for M&E.Reviews

SCH.2(4a) Management C /1 1/ Carry out a Management Studyaspects of the of TW.project

SCH.2(4b) - do - CP 12/31/87 // Furnish to IDA for its review, theresults of above ManagementStudy and carry out itsrecommendations.

SCH.2(5a) Implementation NC // // Install & maintain in project area Dedicated power linesdedicated & independent 11 kV were withdrawn by theelectric feeder lines to energize Bank in 1992.part A tubewells.

SCH.2(5b) - do - NC // 1 Provide electric power at Power supply erratic.minimum of 16 hrs per day at Diesel generating setspeak demand periods to tubewell to be provided.irrigation system under part A.

SCH.6b Management CD 07/31/87 /1 Carry out baseline agro-socio- Study has beenaspects of the economic survey. completed.project

SCH.6c Monitoring NC // // Carry out M&E activitiesrecommended under above agro-socioeconomic survey.

SCH.7a Management C 12/31/89 // Furnish to IDA for its review,aspects of the draft TORs for mid-term review.project

SCH.7b - do - C 06/30/90 // Carry out such mid-term review.

SCH.7c - do - C // // Carry out adjustments to projectrequired following mid-termreview.

SCH.8 Monitoring Soon 03/31/87 // Furnish to IDA semi-annual Reports due April-review & reports covering periods April I Sept.93 & Oct.-Marchreporting to Sept.30 & Oct.1 to March 31. 94.

1 C - Covenant complied with; CD - complied with after delay; CP = complied with partially; NC - not complied with.

25

Table 11: Concurrence with Operational Manual Statements

Statement jiumber and title Describe and comment on lack of compliance

1. OMS 2.25 Cost recovery policy The OMS emphasizes the importance of recovering thefull cost of operation and maintenance of irrigationschemes with a reasonable proportion of investmentcost, subject to repayment capacity of the beneficiaries.Water rates should have been raised for this purposebut this was delayed. Meanwhile, the Governmentdecided to transfer all tubewells to Panchayats foroperation & maintenance, resolving cost recoverythrough water rates. However, GOB has yet to handover all tubewells to Panchayats.

Table 12: Bank Resources: Staff Inputs

Planned Revised Actual

Stagc of Weeks USS Weeks US$ Weeks us$

Through appraisal NA. NA. NA. NA. 81.9 NA.

Appraisal-Board NA. NA. NA. NA. 44.3 NA.

Board-effectiveness NA. NA. NA. NA. 6.7 NA.

Supervision NA. NA. NA. NA. 65.7 NA.

Completion NA. NA. NA. NA. 15.0 NA.

TOTAL 213.6

26

Table 13: Bank Resources: Missions

Performance rating

Number Specialized Implemen- Develop-Stage of Month/ of Days in staff skills tation ment Types of

project cycle year persons field representedl/ status objectives problems2/

Through appraisal:Preparation I Feb.1985 3 14 IE,GE,EEPreparation 2 May 1985 7 19 EC,IE(2),GE,

EE,AG,MSPreparation 3 July 1985 1 8 EE

Appraisal through Sept.1985 11 27 EC(2),1E(3),Board approval ESAR,GE,

EE.AG,PF

Board approval - - - -through effectiveness

Supervision:I Feb. 87 4 10 IE,GE(2),EE 2 1 M2 April 88 5 4 IE.GE(2),EE 2 1 M3 April 89 5 5 IE(2),SPO, 3 2 M

PE.EE4 Dec. 89 3 5 IE.PE,EE 3 2 M5 March 90 6 6 IE,PE(2), 3 3 M

GE(2),EE6 Oct. 90 4 5 IE,EC,EE,DS 3 3 F,M7 Jan. 91 6 9 EC,IE,PE, 3 3 M

AG,EE, DS8 July 91 4 5 IE.PE,EE, 4 3 M

AG9 Oct/Nov.91 2 4 EC,IE 4 3 M10 May 92 2 3 EC,IE 3 3 M11 Aug. 93 1 4 IE 2 2 M12 May 94 2 5 IE(2) 3 3 M

Completion Oct. 94 4 8 EC,IE(2),AG _ _

11 AG = Agriculturist: AR = Agricultural Research Specialist; DS = Distribution System Specialist; EC = Economist; EE - ElectricalEngineer, GE - Groundwater Engineer, IE = Irrigation Engineer; MS = Management Specialist; PE = Procurement Engineer, PFProgrammes Specialist (Finance); SPO = Senior Project Officer.

2/ F = Financial; M = Management.

27


INDIA

BIHAR PUBLIC TUBEWELL PROJECT(CREDIT NO. 1737-IN)

Appendix 1. FAO/CP MissionAide Memoire

A. Introduction

1. An FAO/World Bank Cooperative Program team comprising Messrs K. Selvavinayagam(Financial Analyst, Mission Leader) A.S. Malhotra (Irrigation Engineer) and B.C. Biswas(Agronomist), with the participation of Mr. N.K. Bandyopadhyay (Irrigation Engineer) from theWorld Bank Resident Mission, New Delhi visited Bihar from 3 to 10 October, 1994 to reviewimplementation performance of the Bihar Public Tubewell Project and prepare its ImplementationCompletion Report (ICR). Mr. J-.P. Baudelaire, the Task manager, joined the mission on 9October. After initial meetings with Mr. A.R. Sinha, the Project Coordinator and other SeniorOfficials of the Minor Irrigation Department (MID), Bihar State Electricity Board (BSEB) and theDepartment of Agriculture (DOA), the mission made field visits to some tubewells - newlyestablished, modernized and rehabilitated - located in selected districts (Patna, Nawadah, Saran,Gopalganj, Motihari, Muzaffarpur and Begusarai) and held discussions with the concerned projectstaff and farmers as well as Panchayats which received from MID tubewells for operation andmanagement.

2. The mission wishes to thank all concerned staff for the assistance and hospitality extendedto the mission during its stay in the State.

B. Statement of Project Objectives

Project Objectives

3. The State of Bihar was the third of the Indian States to adopt the improved technology forthe deep tubewells and distribution system introduced under U.P. Tubewells Projects (Cr. 1004-IN and Cr. 1 332-IN). As in these tubewell Projects, the objective of the Bihar Public TubewellProject was to increase agricultural production by improving and expanding the use of Bihar'sconsiderable groundwater potential. This was to be achieved by (a) introducing improved tubewelltechnology that would eliminate the planning and design problems inherent in Bihar's existingpublic tubewells (PTWS); (b) undertaking a phased program to rehabilitate and modernize most ofBihar's existing PTWs; (c) strengthening the institution responsible for PTW activities to ensurethat project works can be effectively and efficiently implemented as well as operated andmaintained; and (d) increasing agricultural production, employment and incomes especially forBihar's small farmers.

Project Components

4. Project components included: (i) construction of about 500 new tubewells systems toimproved design standards to deliver about 150 M3/hr to serve individual command areas of about100 hectares each; (ii) modernization of about 1000 tubewells; (iii) rehabilitation of 3712 tubewells;(iv) construction of dedicated power lines to about 5200 tubewells; (v) improvements in tubewell

28

management; and (vi) provision of buildings, vehicles, equipment, staff training, M and E, andspecial studies.

5. The project was planned to be implemented over seven years and the total project costincluding physical and price contingencies was estimated at US$ 99.7 million (Rs. 1296.2million). The IDA Credit of US$ 68.0 million was to finance about 70% of the total project costexcluding taxes and duties. The remaining portion of the cost was to be met by GOB/GOI.

6. The project was revised in March 1990 by increasing the tubewells for modernization by500 and reducing the tubewells for rehabilitation by a similar number. The erection of dedicatedpower lines did not make any headway due to general power shortage in the state and resentmentamong other power users which has resulted in theft of conductors in many lines. On therecommendation of GOB, the provision of dedicated power lines was deleted by the Bank. InSeptember 1990 the Credit disbursement percentage was increased in respect of tubewell andenergization works from 75% to 90% as part of the Gulf Initiative to alleviate GOI's foreignexchange constraints. In addition, a sum of US$ 45.7 million (SDR 40 million) was cancelled dueto substantial depreciation of the Rupee against the US dollar.

C. Evaluation of Project Objectives

7. The project was based on the sound foundation that it would complement groundwaterdevelopment in the private sector and be selective in the target group of beneficiaries to be reached;tubewell siting criteria were designed to achieve this goal. The project took advantage of technicalprinciples developed under the Uttar Pradesh Public Tubewell II Project. Consequently, theproject objectives were clear and important for the proper development of the state's groundwaterpotentials. But the project lacked realism particularly relating to the installation of new tubewells asit was too optimistic to expect quick implementation results, given the institutional reorganizationand past two decades of poor performance of PTWs. The project was also complex because theproposed number (5212) of tubewells were to be sited in scattered locations over some 34 of thestate's districts and implemented within seven years and such implementation to be effectiverequired good coordination with BSEB and DOA. This scale and spread of project activities alsonaturally called for high quality management and skillful planning of logistics and implementation.Project management has been deficient on all three scores. The importance of water managementwas not very explicitly emphasized at appraisal, although it constituted a key element in equitablewater allocation and water use efficiency.

D. Achievement of Project Objectives

8. The project has partially achieved its physical objectives. Its achievement of institutionaldevelopment objectives was negligible. Macroeconomic policies and financial objectives were notapplicable to this project.

There is a significant shortfall in the achievement of physical objectives as shown below:

29

Target and Achievements

Component Planned at Fully completed Additional Irrig. Potential (ha)appraisal and energized Target Actual Utilization

(Revised) CreationOriginal Revised

New Tubewell 500 500 89 50000 8,900 1144

Modernized TIW 1000 1500 431 150000 43,100 6578

RehabilitatedT/W 3712 3212 2354 257000 188,320 19783

Dedicated Power* (5212) (5212) (624) - - -

Lines

TOTAL: 5212 5212 2874 457000 240320 27505

* Denotes numbers, each with an average length of 2.06 Km.

9. As shown above, the shortfall is both in terms of tubewell system completed, potentialrealized and area actually irrigated under the project. Achievement of tubewell completion andenergization was 18% (New tubewells), 29% (Modernized tubewell) and 73% (rehabilitatedtubewell). Area actually irrigated was much lower at 13% (new tubewell) 15% (Modernizedtubewell) and 11 % (rehabilitated tubewells) of additional potential created. The principal reasonfor the low utilization is the shortage of power supply, ranging from 5 to 8 hrs. per day. Poormanagement of tubewells has also affected performance. As a result, productive levels have beensubstantially less than anticipated at project appraisal. The economic viability of tubewell irrigationis, therefore, likely to be much lower than envisaged at appraisal. Under the present power andmanagerial constraints, the prospect for a good economic rate of return looks bleak. An estimatewill be made and presented in the ICR.

Improved Tubewell Operation System

10. All new and modernized tubewells under the project were required to be equipped with wellregulated and controlled water distribution system to be operated with automatic switchgear. Waterwas to be released in the distribution system in response to the irrigation demand. A capacitor anda single phase preventer was also to be fixed to protect the motor from voltage fluctuations andburning. Field visits indicate that the above improved system of water regulation and automaticoperation of pumping unit have not been implemented under the project. The pump's panelcontroller was found installed in only one tubewell but was lying in disuse due to some electronicfault. It was explained by the field officers that the staff is not yet trained for the installation andoperation of such sophisticated equipment and prefers to use the old system comprising of switch,starter Voltmeter & Amperemeter.

11. Under the improved design standards, the tubewell was provided with a buried pipedistribution system in the form of two loops, each serving about 50 ha and outlet valves on pipesystems commanding 4-5 ha. The farmer is to operate only one outlet on a loop so that he getsabout 75M3/hr and could irrigate his fields with minimum water application time and seepagelosses in his field channel. Field observations, however, indicate that 2 to 4 outlets are opened at a

30

time in each loop and water is diverted in different field channels entailing heavy field losses andincreased water application time. Since the charges for water utilization are based on acreage basis,the farmers are not tuned to proper water management and water use efficiency. MID haddifficulty in enforcing the operation of the water distribution system as proposed under the project,due to power shortage and inadequate farmer organization.

12. Since the electrical equipment for the improved regulation system has already been procuredfor most of the tubewells, it would be desirable to train the field staff and instal the said equipmenton new and modernized tubewells at the earliest. Despite the difficulties and the lack of progress inautomatic operation of pumping units, the improved technology consisting of buried pipe systemworks has been adopted.

13. The Project financed a number of activities to improve management. Although the bulk ofthem were carried out, weakness in management persisted, exacerbated by high turnover of staff atsenior levels; for example there were eight Project Coordinators in seven years. In particular, therewas little improvement in the monitoring and evaluation studies. Agro-economic base line surveywas not followed up to provide a reliable impact of crop production and small farmer participation.Some cluster buildings such as the one at Bakhara in Muzaffarpur were not occupied; severalJunior Engineers were not provided with vehicles to ensure their mobility.

14. MID was required to set up two regional centers and 10 Divisional workshops to supportmaintenance during construction and for O&M of all public tubewells in the state. Thisinfrastructure would have been helpful for the timely repair of tubewells and to reduce thebreakdowns. Nothing has been done in this direction and the repairs are generally being arrangedfrom the market which takes unduly long time. As a result, the inadequacy of the tubewellmaintenance together with shortage of power and poor management have made tubewell irrigationtotally unreliable.

15. Water rates were not revised as foreseen at appraisal and the issue was intended to beresolved through handing over of completed tubewells to the panchayats or their committees whocould fix up reasonable water rates for the O&M. However, sustainability of operation stillremains a question as Panchayats look to GOB for funding and to MID for repairs. Their ability tocollect water rates, except in a few cases, is in doubt.

16. Although equity was the major justification for the investment in new tubewells, the equityimpact of the project seems to be modest. More reliable data are required to establish the extent ofbenefits to small farmers under the project.

E. Main Factors Affecting the Project

17. Factors not generally subject to Government control: These included law and orderproblems, Bank's restrictive condition on release of funds only against completed/operative wells,and the inadequacy of the management study. These factors have prevented the project fromachieving its full objectives.

18. Factors generally subject to Government control: These included delay in appointment ofkey staff, lack of adequate counterpart funds, inadequate levels of water charges (which have notbeen revised since 1983), poor billing and collection of billed water charges. These hadsubstantially affected the implementation pace of tubewells installations.

19. Factors generally subject to Implementing Agency control: The project has encounteredcontinuous implementation problems. There was insufficient advance planning and updating ofimplementation, procurement and O&M schedules, lack of coordination between State ElectricityBoard and Department of Agriculture, and delays in institution-building measures such as M&E

31

and training. Procurement progress was slow mainly because of the cumbersome and time-consuming procedures followed for evaluation of bids and finalization of awards. Staff turnoverwas frequent. Common complaints from farmers were lack of power for reliable irrigation,unscheduled deliveries, absent operator, and incorrect system design not commanding some fields.The combined effect of these factors was reflected in substantial under achievement of projectobjectives.

Actual Project Cost

20. At credit closure, the total expenditure under the project amounted to Rs. 1660 million(US$ 90 million), representing a cost overrun of 28% in nominal terms. Because of thedepreciation of the rupee against the US dollar, there was a cost underrun of 10% in dollar terms.The increase in cost is attributed partly to price escalation and partly to quantity changes arisingfrom design and other variations including increase in I IKv lines for each PTW from the average1.35 Km at appraisal to 2.35 Km during implementation. Some quantity changes also originatedfrom modernization of 500 existing PTWs in the flood zone instead of rehabilitating them asforeseen at appraisal. It should be noted that a further cost of about Rs. 1835 million are estimatedby MID to complete the project fully by 1997/98.

F. Project Sustainability

General

21. The major challenge for the sustainability of the tubewell system established under theproject is the provision of reliable power supply and adequate O&M. As power supply cannot beassured by the Electricity Board in the immediate future, the only option would be to instal dieselgenerating sets. As the MID would not have financial resources to operate and maintain theseschemes and their diesel sets, the best course of action would be to transfer them to farmers'organizations whether Panchayats or otherwise and to intensify training and technical assistanceprograms (provided through the Water and Land Management Institute). The establishment andfunctioning of the 2 Regional and 18 Divisional workshops for the provision of spare parts andrepair of tubewell on behalf of farmers' organizations is a prerequisite to sustainability.

Cost Recovery

22. At appraisal, water rates in the states were expected to be increased to cover the full O&Mexpenses plus a reasonable portion of capital cost. No revision has taken place since 1983although electric tariff has been raised twice, the last one to Rs. 120/BHP. Collection of waterrates has persistently lagged behind and the average collection to billing has declined from 14% in1988/89 to 2% in 1993/94. There is thus a clear need not only to secure collection of arrears butalso to increase the present rates to ensure efficiency of water use and allow for the GOB toenhance O&M allocation until such tubewell schemes are turned over to farmers' organizations.The present system of handing over tubewells to Panchayats is not based on prior planning,discussion and willingness of potential users. This appears to have been done in a routine mannerwithout either preparing the benefiting farmers, or providing them with required training andensuring, a clear definition of responsibilities of the different parties involved-MID, Panchayatsand farmers. As a result, Panchayats, which have taken over, have presumably assumed it to beanother "welfare" measure for funding by GOB. One option to dispel this misconception would beto demonstrate the success of this arrangement through organizing selective water usersassociations who are willing and able to operate it successfully. Based on such experience,thescheme could be expanded.

32

23. At appraisal, it was expected that the power to PTWs and private shallow tubewells was tobe supplied at a uniform rate of Rs. 0.35 per KWH as metered supply. There had since been asteep rise in the tariff for PTWs, first in 1991 to Rs. 90 per BHP per month and then in 1993 toRs. 120 per BHP per month, despite the progressive reduction in working hours of the PTWschemes. The tariff of shallow tubewels is now 25% of that of PTWs although both are connectedto the same power feeders. MID is thus billed with high power charges for the unmetered supplywhich is equivalent to about Rs. 2.00 per KWH on the basis of actual working hours of PTWs.There is a need to bring parity in the power tariff for PTWs and private tubewells for the unmeteredsupply. There is also a concomitant need to fix energy meters on tubewells.

Operation and Maintenance

24. An important project goal was to create high performance tubewell systems based onequality in water distribution that would allow farmers to increase their crop production. This hasnot been realized so far as there is presently no clear plan for O&M. The principal constraint is thedecline in the quality and quantity of power availability. Other factors have also hamperedperformance as indicated below:

a. unreliable water delivery particularly to tailend farmers;b. delays in repairing pump units during the irrigation season;c. excessive conveyance system losses in rehabilitated tubewells, not using pipe

systems;d. deteriorating maintenances, due to a low O&M budget, ande. poor operational links between the MID, State Electricity Board and Department of

Agriculture especially at tubewell.

25. The combined effect of these constraints has seriously affected cropping patterns and cropyields; and area irrigated declined from 62% of the design command in 1974/75 to about 7% now.Cost of rented water is high at around Rs. 500/hectare for three irrigations. Farmers still pay thesehigh rates because of assured quantity and timely supply. The major prerequisites for a wellfunctioning O&M system concern adequate staffing, proper and decentralized repair facilities,training, monitoring of tubewell performance and O&M funding, all of which needs to beimproved for better performance.

G. Future Operation/Action Plan

26. A detailed discussion was held with MID for future operation/action plan with regard to thecompletion of all ongoing works and also to optimize benefits from the investments made in asustainable manner. To achieve the above objectives, MID has agreed to:

a. complete all ongoing works by March 1998 and make available adequate funds forthis purpose and refrain from constructing any new structures before completing allongoing schemes in view of GOB's budgetary constraints;

b. turn over the O&M responsibilities of TWs to Panchayats/farmers' organizationsand also carry out a thorough review of the tubewells handed over to Panchayatsand undertake remedial measures for improved performance;

c. provide adequate O&M funding until the TWs are turned over toPanchayats/farmers' organizations;

d. allocate adequate funding for training in installation and operation of improvedelectrical regulation system already procured for the efficient operation of the TWsbut not in use at present for want of adequate training;

33

e. implement a pilot scheme to install diesel generating sets in about ten (10) selectedtubewells to test effectiveness of operation and farmers' willingness to bear fullO&M cost and a part of the capital cost; and

f. monitor TW performance through collection of data on operational hours per TW,irrigated potential created, actual area irrigated, cropping patterns, croppingintensities and crop yields in the Kharif, Rabi and hot seasons on a continuousbasis.

H. Lessons Learned

27. The main lessons learned during project implementation are as follows:

1. Given MID's and BSEB's past and present difficulties, there is no justification for furtherinvestment in new public tubewells. Small farmers' interest can be, for the present timesecured by selecting wells for modernization or rehabilitation in command areas dominatedby the target group.

2. Power supply is a problem not confined to the project. This is a state-wide problem anddurable solutions should be tackled at the state level. Until power supply becomesavailable, i.e. at least 16 hours per day in rural areas, the only alternative at project level isto instal stand-by diesel generating sets.

3. The provision of dedicated power lines with power availability of 16 hours/day at peakdemand against a background of poor power generation and poor supply was not realistic.In future, project power supply should be assessed at the state level to ensure that it isadequate for the project.

4. The system of water rates based on irrigated acreage is against the concept of water useefficiency. This does not encourage farmers to economize use of water, which is suppliedat high cost by the MID. Some means of volumetric measurement should be built into theproject.

5. The project remains incomplete and part of the reason was the shortage of counter-partfunds. The project experience demonstrates the critical significance of state finance inBihar for satisfactory implementation and the need to ensure adequate flow of funds fromthe credit. Legal covenants that unduly hamper the reimbursement of counterpart fundsshould be avoided or adjusted to local circumstances. Revolving fund at state level isrequired in addition to the special account established with GOI.

6. The need for improved tubewell technology particularly buried distribution system isclearly demonstrated by the project.

7. There is a need to address issues related to Panchayats, farmers' organization and O&M ofPTWs comprehensively at preparation and appraisal of the project rather than mid-waythrough implementation.

8. Groundwater developments based on PTWs would increasingly face problems of poorperformance, both in terms of productivity and equity, unless proper action is taken forpower supply and effective transfer to beneficiaries. The existing systems would, withoutsignificant changes in the management and financing, deteriorate as a result of pressure onalready strained budgetary resources.

34

I. Follow-up

28. The mission will return to Rome and prepare the relevant parts of the ICR for transmittal tothe World Bank by Mid-December 1994. The MID is requested to prepare its own evaluation asper Bank guidelines and send it to the World Bank Office in New Delhi by the same date.

35

Implementation Completion ReportIN'DIA: Bihar Public Tubewell Project

(Cr.1737-lN)

Appendix 2. Stafl Position as on October 10, 1994

Engineering Staff Sanctioned In Position

1. Project Coordinator 1 1

2. Chief Engineers 2 1

3. Superintending Engineers:(a) Project Coordinator Office 4 3(b) Chief Engineer (North) 3 1(c) Chief Engineer (South) 3 1

4. Executive Engineers(a) Project Coordinator Office 4 4(b) Chief Engineer (North) 16 15(c) Chief Engineer (South) 15 15

5. Assistant Engineers 127 116

6. Geophysicists 2 1

7. Hydrogeologists 2 Nil

8. Junior Engineers:(a) Chief Engineer (North) and

Chief Engineer (South) 289 269

9. Helpers 34 34

10. Foremen 1 1

11. Mechanics/Fitters 178 160

12. Drivers Vehicle 168 143

13. Tubewell Operators 4,600 4,299

14. Drillers 8 7

15. Assistant Drillers 16 16

16. Welders 6 6

17. Electricians/Armature Binders 138 132

18. Compressor/Pump Operators 12 11

19. Armin 153 128

36


INDIA

BIHAR PUBLIC TUBEWELL PROJECT(Cr. 1737-IN)

Appendix 3

Economic Re-evaluation

General

1. The project was expected to result in higher production of mainly paddy andwheat, and moderate increases in the output of oilseeds, maize and potato. These wereto be generated through the construction of 500 new tubewells, modernization of 1,500tubewells and rehabilitation of 3,212 existing tubewells, making a total of 5,212 wells.Considering GOB's financial constraints, the MID has projected future operation, givingpriority to completion of ongoing schemes. This is reinforced by the growing number ofprivate tubewells promoted by the State Government. Accordingly, the future planforesees a total of 4,212 tubewells, comprising 250 new, 750 modernized and 3,212rehabilitated wells (see Table 1-3).

2. Overall crop development. No data on annual crop production in the projectarea has been systematically recorded, and little effort has been made to record theimpact of project tubewells on crop production. Therefore, data used for compiling thecrop development which has taken place over the past seven years in the impact area arelargely based on field investigations and mission estimates.

3. Net cultivable areas. At appraisal, an average of 100 ha command area fortubewells (new or modernized) and 80 ha per rehabilitated well were assumed. Theirrigation potential created and actually utilized between 1987 and 1994 was given inTable 1-3 which shows actual utilization from 26 ha (new tubewells), 22 ha (modernizedtubewells) to 9 ha (rehabilitated tubewells), indicating low availability of power supply.In view of the overall power constraint in the state, it is unlikely that material changeswould occur in power availability in the medium and long term. An average of 26 hafor new, 22 ha for modernized and 9 ha for rehabilitated tubewells has therefore beenassumed for financial and economic analysis. This is further confirmed by the data givenby the MID on power availability by district which varies from a low of 3 hrs/day(Madhusari and Sitamarhi), rising to 4 hrs/day (Jahanabad), 4-5 hrs/day (Samastipur),6 hrs/day (Arrah) and finally to 8 hrs/day (Patna).

4. Cropping pattern. As expected at appraisal, irrigation from tubewells hasresulted in increases in wheat acreage; oilseeds and potatoes have also increased (seeTable 4-5).

37

5. Cropping intensity. A comparison of actual and SAR estimated croppingintensity is summarized below:

SAR ICR

_ Zone I Zone 11 Zone III NTW MTW RTW

(100 ha) (80 ha)

Without project 108 111 107 109 109 109

With project 174 181 184 126 123 111l

Incremental 66 70 77 17 14 2

For the project, the SAR estimated cropping intensities were to go up from 'Withoutproject' estimates of 107%-111% to 174%-184%o 'with project'. SAR and ICR estimatesare strictly not comparable because lack of data has precluded estimating zone-wisecropping intensity and as a result, calculations were instead based on different types oftubewell models supported under the project. Based on these data, cropping intensityfor the project has actually gone up to 111%-126% from 109% 'without the project'. Thesignificantly lower cropping intensity 'with project' on areas commanded by therehabilitated tubewells is explained by poor maintenance of field channels, resulting inhigher conveyance losses, compared to areas commanded by new of modernizedtubewells with the buried pipe system, supported under the project.

6. Crop yields. As anticipated at appraisal, yield levels of all crops have goneup modestly from 3-18% (see Table 8). Although the use of fertilizer has increased, itsapplication is mainly confined to HYV. Furthermore, the rates of application are limitedto farmers' affordability and have generally remained below recommended rates. Basedon investigations in the field, it appears that farmers are not getting adequate extensionsupport required; this is reported as being due to problems of staff and inadequatemobility. Table 8 gives a comparative statement of SAR and ICR crop yields.

7. Production. The estimated annual incremental production at fulldevelopment is only about 14% of the appraisal estimate of 247,000 tons. Wheatproduction contributes 14,000 tons annually. Compared with appraisal estimates,incremental production is lower for all crops due to the reduced command area actuallyirrigated and slightly lower cropping intensity under the project.

Farm Incomes

8. At appraisal, four farm models were prepared to estimate farm incomesderived by participating farmers. These models were divided according to soil types. Asimilar analysis has been carried out (see Table 9) at completion, based on croppingpattern assumptions shown in Table 4-5 and per ha crop yields shown in Tables 6 & 7,but analysis was based on type of tubewells. Farm incomes are therefore strictly notcomparable.

38

9. Incremental. In all cases, farm incomes are higher in nominal terms thanthose estimated at appraisal. In real terms, incomes would be Rs3,870, Rs3,878 andRs2,830. These represent Rs645 and Rs470 per capita, based on a six-person family.

Economic Re-evaluation

10. General. At the time of appraisal, economic rates of return (ERR) wereestimated for the project as a whole (33%) and for its components - new tubewells(32%), modernized tubewells (42%) and rehabilitated tubewells (29%).

11. In re-estimating the project's economic impact, the basic assumptions madeat appraisal have been retained. The principal difference is that total incrementalbenefits arising from the project have been phased on the basis of actual energizationup to 1994 and projected energization thereafter (see Tables 1-3). Also, an averagecommand area of 26 ha per new, 22 ha per modernized and 9 ha for rehabilitated hasbeen used. The analysis has beer carried out in 1994 constant price terms. Historicaltubewell investment costs have been restated in 1994 prices by applying the wholesaleprice indices (see Table 10). These costs have been restated in border terms by usingthe standard conversion factor (SCF) of 0.9 (see Tables 11-14). In estimating costs, dutyand local taxes have been excluded. Financial prices and economic values of crops andinputs are presented in Tables 15 and 16. Future prices are based on World BankPrimary Commodity Forecasts dated August 1994. In line with estimates in recent WorldBank appraisal reports, farm labour has been valued at 90% of the financial wage rate.

12. Benefits. The calculation of agricultural benefits is based on the physicalbuild-up and performance of tubewells, and on the resulting agricultural production.Based on the experience with project wells, it can be estimated that the average build-uptime from commissioning of a tubewell to full development is about four years with cropyields at 60% in year 1, 80% in year 2, 90% in year 3 and 100% in year 4.

13. Costs. The replacement costs for a 150 m3/hr tubewell are included on thebasis of SAR assumptions.

14. The 0 & M costs for tubewells are calculated using a weighted averagepumping of 1,500 hrs per year and a power input of 11.6 kw/hr. Based on this, energyconsumed annually amounts to 17,400 kw. With a long-run marginal rate of power atRsl.47/kwh, energy costs amounts to Rs25,620 per year. Other costs are establishment(Rs24,000) and maintenance (Rs4,870).

15. Based on the above assumptions, the cropping pattern and per ha cropbudget assumptions shown in Tables 4-7 and a 25-year period of analysis, the currentestimate of ERR for the project as a whole is around 2.3%, for new tubewells -20%,modernized tubewells 4.4% and rehabilitated tubewells 2.9%. There are various factorswhich have contributed to the negative ERR for new tubewells and the significantlylower ERRs for modernized and rehabilitated tubewells, as compared to appraisalestimates. The more important ones include:

39

(i) a 74-78% lower command area per new and modernized tubewellsand a 91% lower command area per rehabilitated tubewell, than thatexpected at appraisal;

(ii) at appraisal, the overall cropping intensity was expected to increaseby 66% to 77%; revised estimates put the increase between 2%-17%.The lowest 'with project' cropping intensity (2%) is for areascommanded by rehabilitated tubewells. This is because of the poormaintenance of field channels, resulting in higher conveyance losses,compared to new or modernized tubewells with the buried pipesystem supported under the project;

(iii) the use of private tubewells in the 'without project' situation wasassumed for about 20% of the area, compared to none assumed atappraisal; and

(iv) economic costs in rupee terms have increased much more than theincrease in the price of the main agricultural output (paddy), whilethe economic price of labour is six times that estimated at appraisal,the farmgate price of paddy and wheat has gone up nearly two tothree times respectively.

16. The lack of adequate data precluded the estimation of insurance value of thetubewell against unexpected droughts during kharif. Discussions with farmers confirmedthe correlation between rainfall data and hours pumped even if the latter wassubstantially reduced. There was evidence of less pumping during kharif 1993/94because of even distribution of rain. Continuous monitoring, a matter that has laggedunder the project, is required before a valuation of such benefits could be attempted.

17. Sensitivity analysis. The potential economic benefits are not being fullyachieved particularly in terms of areas irrigated per tubewell, due to erratic andunreliable power supply. The fact that many PTWs are being used to irrigate areasranging from 9-26 ha, each achieving an average of 12 ha, is considered exceedingly low.The three factors which are expected to influence the ERR are: (i) variations incommand areas; (ii) changes in 0 & M funding; and (iii) the inability of the MID tooperate and manage PTWs as designed. The sensitivity analysis indicates that: areduction in command area of 20% would lower ERR to -0.6%; a reduction of 50% in0 & M funding (by assuming that future benefits would be reduced by 50%), wouldlower the ERR to about -7.4%; and that poor operation and management would lowerERR to -0.6%, assuming that the ineffective operation of MID would depress projectbenefits by 20%.

Implementation Completion ReportINDIA: Bihar Public Tubewetl Project (Cr.1737-IN)

Appendix 3: Economic Re-evaluation

Table 1. get Irrigable Area Created and Utilized1i - New Iubewells

Component FY87 FY88 FY89 FY90 FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY96 FY99

New tubewells energized (No.) 4 10 44 82 100 150 200 250 250

Potential created21(ha) . . . 400 1,000 4,400 8,200 10,000 15,000 20,000 25,000

Area utilized3/ (ha) 104 260 1,144 2,132 2,600 3,900 5,200 6,500

Incremental (ha) 104 156 884 988 468 1,300 1,300 1,300

It is assumed that utilization takes place in the year following installation.

2/ Average command area of 100 ha per new tubewell, created one year after energization.

3/ At 26 ha per tubewell, based on average area utilized in 1994 from wells energized in 19.93 which were 1,144 ha for 44 wetls.

Implementation Completion ReportINDIA: Bihar Public TubewelL Project (Cr.1737-IN)

Appendix 3: Economic Re-evatuation

Table 2. Met Irrigable Area Created and Utilized-/ - Modernized Tubeuetls


Modernized tubewells 2 33 45 305 600 650 700 750 750 750energized (No.)____ __ ____ _ _ _

Potential created2/(ha) - 200 3,300 4,500 30,500 60,000 65,000 75,000 75,000 75,000

Area utilized3/ (ha) 44 726 990 6,710 13,200 14,300 16,500 16,500 16,500

Incremental (ha) 44 682 264 5,720 6,490 1,100 2,200 -

1/ It is assumed that utilization takes pLace in the year following installation.

2/ Average commond area of 100 ha per modernized tubewell, created one year after energization.

3/ At 22 ha per tubewell, based on average area utilized in 1994 from welts energized in 1993 which were 6,578 ha for 305 wetls.

lmplementation Comptetion ReportINDIA: Bihar Public Tubewelt Project (Cr.1737-IN)


Table 3. Net Irrigable Area Created ard Utilized - Rehabilitated Tubewells


Rehabilitated tubewells 52 351 440 548 2,221 2,585 2,700 2,900 3,212 3,212 3,212energized (No.)

Potential created2/(ha) 4,160 28,080 35,200 43,840 177,680 206,800 216,000 232,000 256,960 256,960

Area utilized3/ (ha) - - - 468 3,159 3,960 4,932 19,989 23,265 24,300 26,100 28,908 28,908

Incremental (ha) = 468 2,691 801 972 15,057 3,276 1,035 1,800 2,808 2,808

1/ It is assumed that utilization takes place in the year following installation.

2/ Average command area of 80 ha per rehabilitated tubewell, created one year after energization.

3/ At about 9 ha per tubeweLL, based on average area utilized in 1994 from weLLs energized in 1993 which were 19,783 ha for 2,221 wells.

43

Implementation Completion ReportINDIA: Bihar Public Tubewell Project (Cr.1737-IN)


Table 4. Cropping Pattern - New and Modernized Tubewells1/

Without Project With Project

Crop Rainfed l Irrigated Rainfed I Irrigated

l____) ....... .. (%).... _ .... l

Kharif l

- Paddy 55 5 65

- Maize 10 - 15

- Pulses (arhar) 21 1 2 1

- Jute 2 2 1

- Vegetables 3 - 2

- Fodder - 3

Rabi _ |

- Wheat 9 10 _45

- Pulses (gram) 6 4 2 l

- Mustard 2

- Potato 1 _ 3_ll

- Maize _1 7 ||

- Fodder __1 - 2

Hot Season

- Moong __I - 2

- Vegetables (onion) - - 5

Perennial

- Sugarcane - 4

TOTAL 89 20 12 160

Cropping Intensity3/ (109) (172)

/ Cropping intensity for analysis has been computed on area actually utilized; 26 ha for new tubewells (seeTable 1) and 22 ha for modernized tubewells (see Table 2). Although the project developed 100 hacommand area for new and modernized tubewells, there has been no change in cropping pattern in theremaining 74 ha and 78 ha respectively.

l/ arhar = pigeonpea.2/ Land occupancy percentage: sugarcane counted in each of the three seasons.

44

Implementation Completion ReportINDlA: Bihar Public Tubewell Project (Cr.1737-IN)


Table 5. Cropping Pattern - Rehabilitated Tubewells1'

Wlthout Project With Project

Crop Rainfed Irrigated Rainfed Irrigated

......... ...............Kharif

- Paddy 58 2 - 45

- Maize 10 4 10

- Pulses (arhar) 2 / 1 1 l

- Jute 1 1 1

- Vegetables 3 4

- Fodder 1 1 1

Rabi

- Wheat 9 10 - 40

- Pulses (gram) 6 - 4 1

- Mustard 1 1 - 3

- Potato 1 2

- Maize 1 - 3

- Fodder __1 2

Hot Season

- Moong 1 2

- Vegetables (onion) 1 2

Perennial

- Sugarcane _ _1 - 3

TOTAL 89 20 11 119

Cropping Intensity3 (109) (130)

/ Cropping intensity for analysis has been computed on area actually utilized - 9 ha (see Table 3).Although the project developed 800 ha command area, there has been no change in cropping patternin the remaining 71 ha.

2 arhar = pigeonpea.~/ Land occupancy percentage: sugarcane counted in each of the three seasons.

45

Implementation Completion ReportINDLA. Bihar Public Tubewell Project (Cr.1737-IN)


Table 6. Crop Yield - New & Modernized Tubewells

Without Project With Project

Crop Rainfed I Irrigated Rainfed Irrigated

....... _ _ _ _ (ton/ha) ....... ....... (ton/ha)

Kharif

- Paddy 1.2 2.6 2.6

- Maize 13 - 1.8

- Pulses (arhar) 1/ 1.2 . 1.2 1.4

- Jute 1.5 1.5 1.8

- Vegetables 12.0 - 16.0

- Fodder . 15.0

Rabi TX !- Wheat 1.3 23 - 2.3

- Pulses (gram) 0.6 X _ _ 0.6 1.0

- Mustard 0.6 1.2 0.6 1.2

- Potato 15.0 - 15.0

- Maize 1.8 1.8

- Fodder 15.0 . 15.0

Hot Season

- Moong 1.0 1.0

- Vegetables (onion) -- 15.0

Perennial

- Sugarcane 50.0 50.0

u, arhar = pigeonpea.

46

Implementation Completion ReportINDIA Bihar Public Tubewell Project (Cr.1737-IN)


Table 7. Crop Yield - Rehabilitated Tubewells

Without Project With ProjectCrop Rainfed I Irrigated Rainfed I Irrigated

l_________ ........ .(ton/ha) ....... ....... (ton/ha) l b n ____ ____

|Kharif

- Paddy 1.2 2.6 . 2.6

- Maize 1.3 __13 1.8

- Pulses (arhar)1'/ 1.2 . 1.2 1.4

- Jute 1.5 _ _1.5 1.8

- Vegetables 12.0 . 14.0

- Fodder __15.0 12.0 15.0

Rabi

- Wheat 1.3 2.3 __2.3

- Pulses (gram) 0.6 0.6 1.0

- Mustard 0.6 1.2 1.2

- Potato _ _15.0 _ _15.0

- Maize _ _1.8 _ _1.8

- Fodder 15.0 15.0

Hot Season

- Moong __ 1.0 __1.0

- Vegetables (onion) - 15.0 __15.0

Perennial

- Sugarcane __50.0 - 50.0

/ arhar = pigeonpea.

47


Appendix 3 - Economic Re-evaluation

Table 8. With Project Yields at SAR Compared to ICR for the Project as a Whole

Total Project

Crops SAR ICR

l ___________________________ (ton/ha) (ton/ha)

Kharif

- Paddy 2.2 2.6

- Maize 1.7 1.8

- Pulses (arhar) 1/ 1.3 1.4

- Jute 1.7 1.8

- Vegetables 14.0 14.0

- Fodder 14.5 15.0

Rabi

- Wheat 2.0 2.3

- Pulses (gram) 1.0 1.0

- Mustard 1.2 1.2

- Potato 14.5 15.0

- Maize . 1.8

- Fodder 14.5 15.0

Hot Season

- Moong 0.97 1.0

- Vegetables 14.5 14.5

Perennial

- Sugarcane 48.0 50.0

1/ arhar = pigeonpea.

48

Implementation Completion ReportINDIA: Bihar Public Tubewell Project (Cr.1737-.IN)


Table 9. Estimated Financial Farm Budgets (1 ha farm)

Without Project With Project(Rs) (Rs)

New & Mlodernized Tubewells(farm size - 1 ha)

- Gross value 6,505 17,854

- Hired labour 1,888 3,982

- Other inputs 460 2,052

Total Inputs 2,348 6,034

Net Value 4,157 11,820

Incremental Income (Rs/ha) 7,663

Increase due to Project (%) 184

Rehabilitated Tubewells(farm size - 1 ha)

- Gross value 6,737 13,518

- Hired labour 1,892 2,127

- Other inputs 460 1,410

Total Inputs 2,352 3,537

Net Value 4,385 9,981

Incremental Income (Rs/ha) 5,596

Increase due to Project (N) 128

49



Table 10. Exchange Rates and Wholesale Price Indices (WPI)

Year Exchange Ratel/ WPI"Rs = USS1

1979 60.0

1980 72.0

1981 80.9

1982 82.8

1983 89.4

1984 95.6

1985 12.369 100.0

1986 12.611 105.6

1987 12.962 112.9

1988 13.917 122.7

1989 16.226 131.1

1990 17.504 142.9

1991 22.742 162.2

1992 25.918 181.4

1993 30.493 194.7

1994 31.371 208.9

IMF Statistics.

50

INDIABihar Public Tubewell Project

Table 11 -Economic Analysis of the Project as aWhole(Rs. Million)

Fiscal Year Total Costs Incremental IncrementalNet Prod. Net BenefitsBenefits

1987 119.2 0.0 -119.21988 204.4 0.0 -204.41989 390.2 0.0 -390.21990 289.3 0.7 -288.61991 256.5 5.9 -250.61992 168.4 14.0 -154.41993 247.8 23.0 -224.81994 148.7 68.2 -80.51995 237.8 138.3 -99.51996 238.3 192.5 -45.81997 238.3 234.9 -3.41998 247.7 257.9 10.21999 47.6 . 265.9 218.32000 80.0 269.9 189.92001 93.2 272.3 179.12002 106.6 272.3 165.72003 66.1 272.3 206.22004 68.3 272.3 204.02005 73.9 272.3 198.42006 87.4 272.3 184.92007 73.3 272.3 199.02008 83.4 272.3 188.92009 5'.8 272.3 215.52010 59.2 272.3 213.12011 58.2 272.3 214.1

ERR= 2.3%1h NPV= -810.1 Rs. Million

51

INDIABihar Public Tubewell Prcject

Table 12-Economic Analysis of New Tubewells(Rs. Mdlicn)

Fiscal Year irnvestment Suilding. Venicle & Ecuitment.2/ Snergizacai / O&M 4/Total CCSts Incrinentl Incre.menalCcsts 1/ Training. .M&E. Tecrinical Services EnCineering Net Prod. Net Benerits

S Admin. 21 Benefits1987 0.0 0.2 6.7 0.3 7.2 0.0 -7.21988 11.9 3.5 2.5 1.2 19.1 0.0 -19.11989 224 4.0 10.0 3.3 39.7 0.0 -39.71990 16.2 3.6 4.7 4.1 28.6 0.0 -28.61991 10.9 S.2 1.0 4.4 0.2 21.7 0.0 -21.71992 6.0 3.1 0.0 4.2 0.5 13.8 0.2 -13.61993 5.2 2.6 0.3 4.4 2.3 14.8 0.9 -13.91994 5.7 0.9 0.0 4.0 4.2 14.8 3.5 -11.31995 29.9 1.6 1.7 0.8 5.7 39.7 8.7 -31.01996 31.3 1.5 6.8 4.9 7.7 52.2 14.1 -38.11997 31.3 1.2 6.8 5.9 10.3 55.5 18.2 -37.31998 31.3 1.1 6.8 6.5 12.9 58.6 20.4 -38.21999 12.9 12.9 21.1 8.22000 12.9 12.9 21.1 8.22001 0.4 12.9 13.3 21.1 7.82002 1.0 12.9 13.9 21.1 7.22003 4.4 12.9 17.3 21.1 3.82004 8.2 12.9 21.1 21.1 0.02CO5 10.0 12.9 22.9 21.1 -1.82006 15.0 12.9 27.9 21.1 -o.82007 20.0 12.9 32.9 21.1 -11.82008 25.0 12.9 37.9 21.1 -16.82009 t2.9 12.9 21.1 8.22010 12.9 12.9 21.1 8.22011 12.9 12.9 21.1 8.2

E.RR -20.0% NPV- -137.2 Rs. Million

1/ Ecznomic =sts derwed by using SCF af 0.9 and inflaing n 1 994 pr:ce arms using wnclesale price index incicated in Table aP.rciec zosts since 1 S95 easea cn MIO esurnates but adjusted D a lcwer overall tctal Ct 250 wells ins;eaa cf 50 crc:csed at a^paisal.Reczaczrmenr cCsis assumed at 1Fs. 1 COCOtwelJ ,'rom year 2001.2/ Acccnticnec on Me basis cd tucewell numcers (250: 750; 3.212)."I AGOoriarOed on the casis Ct tubewells nurncers uzo 1994 and incentified secarately tnerear.ar.I/ based on esaolishrrent ct Rs. 24.000 ct m3ainrenance (cMI worKs+ mecnanical): Ss 8.525 and energy c.arges cf Fs. 24.:CO.adjusted by SCF (elecircty costed at long run marginal cost assumed at Rs. 1.47/kwh).

52

INDIABihar Puolic Tuceweil Project

Table 13-Economic Analysis of Moderneed Tubewells(Rs. Millicn)

Fiscal Year Irovestmrent Building, Venic!e & Ecuicment. Energizatc. C&M Z/Total Ccs:s Incrementa IncrementlCosts 11 2/ Training, M&E. 7ecnnical Servicas Engineenng Net °rcC. .Nei Senefi:s

& ACmin. neneAts1987 0.0 0.5 19.9 0.9 21.3 -21.319&8 12.3 10.6 7.5 3.6 34.1 -34.11989 32.1 12.0 3a.0 9.8 83.9 -83.91990 42.0 6.2 14.2 9.8 0.0 72.2 -72.21991 66.8 15.5 3.1 9.8 0.6 95.8 0.1 -95.71992 51.6 9.4 0.0 9.8 0.8 71.6 1.7 -59.91993 128.5 7.7 1.0 9.8 5.2 152.2 4.4 -147.81994 41.8 2.6 0.0 9.8 10.3 64.5 18.7 -45.81995 71.6 2.5 6.8 9.3 11.2 101.9 -0.9 -51.01996 56.9 4.6 6.8 9.8 12.0 90.1 78.6 -11.51997 56.0 3.7 6.8 9.8 12.9 89.2 96.4 7.21998 5 a.0 3.3 0.0 9.3 12.9 82.0 10.9 23.91999 12.9 12.9 105.9 93.02000 2.5 12.9 15.4 105.9 90.52001 6.4 12.9 19.3 105.9 86.62002 8.4 12.9 21.3 105.9 84.620C3 13.4 12.9 26.3 105.9 79.620O4 10.3 12.9 23.2 105.9 82.72005 13.0 12.9 25.9 105.9 80.020C6 25.7 12.9 38.6 105.9 67.32007 8.4 12.9 21.3 105.9 34.62008 14.3 12.9 27.2 1C5.9 78.72009 11.4 12.9 24.3 105.9 81.62010 11.2 12.9 24.1 105.9 81.82011 11.2 12.9 24.1 105.9 81.3

E?R= 4.4% NPV= -202.14 Rs. million

1/ Similar nroms as in Tanle 12 fcr new Tucewell econcmic csts.21 assumea at 20% of C&M czsts AFis. 51 .SCC) as incremenal.2/ Assumed at 20% cd irveszment ccszs taP reciacnmernt.

53

INOIA2iriar Public Tutewell Project

Table 14-Economic Analysis of Rehabilitated TLbewelIs(Rs. .Sillicn)

Fiscai Year Investment Building. Vehicle & Equiomenj. Energizatim C&-M 2Tozal Costs inceamerTl IncementlCosts 11 r Training, M&E. Tecnnical Se-vices Engineering Net Proa. .Net Benetits

& ACmin. Ben etits1987 0.7 2.1 84.1 3.8 90.7 -90.71988 59.0 44.9 32.0 15.3 151.2 -151.21989 73.9 50.6 126.5 15.3 0.3 266.6 -266.61990 85.2 26.2 60.0 15.3 1.8 188.5 0.7 -187.81991 42.6 65.6 13.2 15.3 2.3 139.0 5.8 -133.21992 25.3 39.6 0.0 15.3 2.8 83.0 12.1 -70.91993 17.2 32.4 4.4 15.3 11.5 80.8 17.7 -63.11994 29.9 10.9 0.0 15.3 13.3 69.4 46 -23.41995 55.5 10.7 0.8 15.3 13.9 96.2 78.7 -17.51996 45.5 19.6 0.6 15.3 15.0 96.0 99.8 3.81997 45.4 15.8 0.5 15.3 16.6 93.6 120.3 26.71998 60.7 14.0 0.5 15.3 16.6 107.1 131.6 24.51999 5.2 16.6 21.8 138.9 117.12000 35.1 16.6 51.7 142.9 91.22001 44.0 16.6 60.6 145.3 84.72002 54.8 16.6 71.4 145.3 73.92003 5.9 16.6 22.5 145.3 122.82004 7.4 16.6 24.0 145.3 121.32005 8.5 16.6 25.1 145.3 120.22006 4.3 16.6 20.9 145.3 124.42007 2.5 16.6 19.1 145.3 125.22008 1.7 16.6 18.3 145.3 127.02009 3.0 16.6 19.6 145.3 125.72010 5.6 * 16.6 22.2 145.3 123.12011 4.6 16.6 21.2 145.3 124.1

E.RR= 2.9% NPV= -470.8 Rs. million

If Similar noes as in Table 12 for new tubewell economic costs.21 Assumea at 1 G0 cf C&M ccsts as incemental.2/ Assumed at 1 0% cf irnvestment ccsts fcr reclacament.

Implementation Completion ReportINDIA: Bihar Pubtic Tubewell Project (Cr.1737-IN)


Tabte 15. Derivation of Economic Prices

Fertitizer _______Uni t Paddy Wheat Jute Sugar

N P K

Projected World market price 1 USS/ton 312 177 326 254 145 135 1101995/2000 in 1994 constant USS /

Quatity adjustment % 75 95 100 98 100 100 100

World market equivalent USS/ton 234 168 326 249 145 135 110

international shipping, insurance USS/ton 40 50 50 50 50 50 50

c.i.f./f.o.b. Catcutta USS/ton 274 218 276 299 195 185 160

c.i.f./f.o.b. Calcutta2/ Rs/ton 8,596 6,839 8,658 9,380 6,117 5,804 5,019

Domestic handling & transport Rs/ton 770 770 (500) 770 830 830 830

Processing or nutrient ratio X 66 95 3/ 70 10 46 48 60

Processing costs Rs/ton (110) . 175 (52) ___

Wholesale price, raw product Rs/ton 6,071 7,228 5,885 963 15,102 13,821 9,748

Transport to/from farmgate Rs/ton (503) (654) 160 -160 160 160

Farmgate Price Rs/ton 5,568 6,574 6,045 963 15,262 13,981 9,908

1/ IBRD Commodity Price Forecast of August 1994, adjusted by PYV index to obtain price in 1994 constant terms.

2/ Corwerted at the current exchange rate of US$1.00 = Rs3l.37.

3/ 5X loss in cleaning.

55



Table 16. Summary of Prices for Financial and Economic Analysis in 1994 Prices

Financial Economic SeedsCrops (Rs/ton) (Rs/ton) Financial (Rs/ton) Economic (Rs/ton)

Paddy 3,100 5,568 4,000 7,185

Wheat 3,500 6,574 4,000 7,510

Maize 2,650 4,977 4,000 7,510

Pulses

- Gram 6,400 5,760 9,000 8,100- Moong 7,000 6,300 9,000 8,100

Oilseeds

- Rape/mustard 8,100 7,290 9,000 8,100

Jute 4,500 6,045 6,000 5,400

Sugarcane 600 963 650 1,040

Potato (Rabi) 1,250 1,125 4,000 3,600

Onion (Rabi/hot season) 1,500 1,350 4,000 3,600

Lady's finger, etc.(Kharif) 1,250 1,125

Inputs

Nitrogen 7,220 15,262

DAP (P) 13,000 13,981

K 6,300 9,908

Labour (person-day) 35 32 _

Bullock (pair-day) 135 122

Tractor hire (per hour) 150 135

Implementatlon CoepLetfon ReportINDIA: Bihar Public Tubwettl Project

(Cr.1737-IN)

Appendix 4. Progress of Physica Targets

No. of 1987-0 19a8-as 1989-90 1990-01 1991-92 1992-93 1993944/

Target Actuas Target Actuat Target Actual Target Actums Target Actia Tarqet Acbmi Tare Ach

New Tubewels

Wellpoint 500 60 140 130 238 200 240 300 246 400 247 500 256

Pipe distribution system 500 60 16 130 19 200 24 300 39 400 72 500 105

Energizatlon 500 60 130 200 4 300 10 400 44 500 89

Modenerd TLAwefis

Replacement and/or repair1 ,element in the weli 1.500 60 35 200 57 400 59 600 224 800 333 1.500 773 tn

Pipe distrlbution system 1.500 60 54 200 106 400 106 600 165 800 253 1.500 431

Energization 1.500 _ 60 - 200 2 400 33 600 45 0 305 1,500 1.244

RePhabE itd Tubewds _ _

Replacemert and/or repair1/2/element In the well 3.212 470 1.460 1,341 2,450 1,5B0 3.130 1.597 3.212 1.684 1,944 2.455

Plpe distribution system3/ 1,313 200 A-x A-x A-x 1.100 A-x A-4 A-9 A-15

B-102 500 B-624 800 6-847 8-984 1,313 B-1084 B-10t4 B-1064

Energizatlon2 / 3,212 470 1.460 52 2 480 351 3.130 3.212 548 2,221 3.197

1/ Average figures of repair or construction of pumphouse and repair and replacement of pump units, are In the row of replacement and/or repair element In well.

2/ Actual numbers of energization of rehabtitated tubeweris done by BSEB in the years 1992-93 and 1993-94 are 752 and 1.342 respectIvely. Total number of redrilled tubeweHls 1s 178.

3/ A - No. of pipe clstrbutlon systems completed; B - No. of channel distribution systems repaired.

4/ Up to May 31.1994.

Source: MNO. Pabe

Implementation Completion ReportINDIA: Bihar Pubtic TutbewelI Project

(Cr.1737- I)

Appendix 5. Project Cost in Mominal and Real Terms

________________________________I/_Final CostAppraisal Estimate A p Final In Total Overrun Price Overrun Quantity Overrun

Actual plus et7td1I 96Pie expenditure" l

. . . . . . . . . . . . . . (Rs million) . . . . . . . . . . . . . . . . . . . . . . . ( . . . . . . . . .

1. New tubewelt systems 256.7 372.4 200.4 45 67 (22)

2. Modernized distribution system 304.6 1,051.0 559.5 245 161 84on existing tubewells _

3. RehabiLitation of existing 144.4 488.4 304.3 238 120 110tubewetts _

4. Dedicated power supply 355.7 393.0 323.1 10 19 (9)(existing + new tubewetts)

5. Management improvement 95.7 123.5 64.9 29 61 (32)

6. Engineering and administration 139.1 1,066.4 552.8 667 370 297

Total Project Cost 1 296.2 3,494.7 2,005.0 170 115 55

I/ n 1986 prices.

2/ Actual expenditure up to May 31, 1994 plus costs to complete until 1997/98, i.e. March 1998.

58

Appendix 6

INDIA

GOVERNMENT OF BIHAR

DEPARTMENT OF MINOR IRRIGATION.

PARAWISE COMMENTS

ON

THE IMPLEMENTATION COMPLETION REPORT(I.C.R.)

AND

THE EVALUATION REPORT

BIHAR PUBLIC TUBEWELL PROJECTS(CREDITNo. 1737- IN)

59

PARA WISE COMIMENTS ON IMPLEMENTATIONCOMPLETION REPORT OF

BIHAR PUBLIC TUBEWELL PROJECT(CREDIT NO. 1737-IN)

1. No comments.

2. No comments.

3. No comments except to the extent that S.D.R. 40 M was slashed down

saying substantial savings resulting froim devaluation of the rupee

against the U.S. $, this was unilateral decision of the bank and which

was not justified. More over due to inflation in the domestic market,

the project was affected.

4. No comments.

5. No comments.

6. The objective of the project was realistic based on improved design

standards for new system (S .AR Para 4.07), but the objective could notbe achieved due to irregular flow of fund at the time of execution(AnnexureA appended.). So far as completed tubewelis are concerned,

the objective could not be achieved due to inadequate and irregular

supply of electricity.

7. It is true that 5200 tubewells were located within 37 districts of state,

the effective co-ordination with B.S.E.B. and D.O.A. was made. As aresult, co-ordination committee had been set up at Executive Engineer/Suprintending Engineer/Chief Engineer and State levels. These committees

held regular meetings as will be evident from the annexure-B enclosed.

Further weekly task force meeting takes place at district level underchairmanship of D.M./D.D.C, which review the performence ofB.S.E.B/D.O.A. and M.I.D. at district level.

Satisfactory result could not be achieved due to tirne taken in procurement

60PARA U . COMMENTS

of materials, lengthy process of bid decision, irregular and insufficientflow of fund.

8. Adequate electricity supply is sine qua non for desired watermanagement. It is true that M.I.D. faced financial difficulties butinspite of such stumbling blocks the endeavour to ensure eqauitablewater allccation and water use efficiency was not deterred. M.I.D.carried out training programme for machanics, tubewell operators,pump fitters and beneficiaries. M.I.D. also felt that to achieve itsobjective. people participation is a must and hence a policy decisionto transfer tubewells to Panchayats and beneficieries committeeswas taken and 490 tubewells were transferred to local bodies.

9. Relevant comments have been made in the appropriate paras.

10. The table under this para shows target and achievements of Project.

On perusal from the physical objective of table, it is evident thatsignificant short fall in achivement has appeared in different schemesof the Project. In this table, Bank has considered only the tubewellscompleted in all respect. But component wise achievement of theProject is more (as appended in Annex ure C) . At this juncture, itwould be pertinent to mention some of the factors which affectedthe progress at desired pace. The target was not fully acieved dueto pau-ciy of fund in later years of the project when it! gainedmomentum. In the begining year of the project, emphasis was laiddown on rehabilitation of pump units and repair of water distributionsystems of rehabilitaion tubewell with the objective that it willgive quick relief to the small and marginal farmers. Procurementsof basic inputs for the projects work were also taken up at the rightearnest. but procurement through bank guidelines took considerabletime in finalization of the bids. Further since it was a new systemneither project officials nor contractors of the State were accustomedto it. The low ceiling of 2.9 m.US$ for unit/price rate contract andBanks constant pressure to switchover to L.C.B. system of biddingvirtually brought the pace of Project activities to a grinding halt.The field officials were asked to stop the work where it was on oldbasis for the residual works. Naturally they took time to become

(2)

61 PAPR 'VISE COMMENTS

used to L.C.B. bidding. Intitially bidding did not take place becauseof non submissionm of bids for large number of tubewells. Thiswas due to Bank's suggestion for inviting one L.C.B. bid for entirecluster. This method failed because either no bid was received orthe bid received was non responsive. The bids received in the firstyear were rejected on one ground or other (Please refer letter no.510 dated 16.2.91). Meanwhile strike by Engineers and Staff causedfurther impediment for the progress. Thus for almost two yearsinspite of all effort's the project suffered badly for reasons beyondthe control of the Project Authority.

11. This is relevant to point out that the assessement of performance isbased on 89 nos. of new tubewells, 431 nos. of modernized tubewellsand 2354 nos. of rehabilitated- tubewells in the year 1993-94. Butactually the above numbers of tubewells were completed up to May'94and majority of them are not declared operative in 1993-94. Only 4 nos.of New Tubewells, 253 nos. of Modernized Tubewells and 1563 nIos.

of Rehabilitated Tubewells were operative in 1993-94. The tubewellshave irrigated 27505 Hect. of land. 1144 Hect. was irrigated by newtubewells against 4400 Hect. of additional irrigation potential created.

Similarly 6578 Hect. and 19783 Hect. were irrigated by modernizedand rehabilitated tubewells against 25300 Hect. and 132400 Hect. ofadditional irrigation potential created respectively. This shows thatin the year 1993-94 area actually irrigated was 26% foriNew Tubewells,26% for Modernised Tubewells and 15% for Rehablitated Tubewellsagainst the additional irrigation potential created. (Detailed statementof yearwise physical progress potential generated and actual areasirrigated by New Modernized and Rehabilitated Tubewells is enclosedvide Annexure D.E & F)

12. No comments.

13. Waterratesrevisionisunderprogress. A sum of rupeestwothousandfive hundred per T1W has been given to panchayat as revolving fundto run the T/W only.

The tubewells in working condition were handed over to Panchayats

(3)

62

PARA WISE COMMEYi-7S

with the advice that M.I.D will pr wide technical know how :c-rmaintenance of the different component of tubewells.

14. No comments.

15. The perception of the mission that the-c was no equitable distributi-cof water needs to be reconsidered- In order to ensure equitaeledistribution of water, two loops were foried at each new and modernizldtubewells for distribution and 20 out!frs were provided to irrigate 5Hect. of land per outlet. While providir outlets, only technical aspemswere considered so as to irrigate the lan_ properly and no considerati:iiwas allowed for any kind of influence from any farmer. Due to irregL : =and erratic power supply, adequate amount of water could not :provided and hence it is likely that the cutlets near the tubewells mi-ithave received water, where as oulet -- farther ends might not ha.--received the same. This technical analvzis makes it clear that no favo_rwas done for influential farmers.

The mission's observation that the autc matic operation system did nxiwork as designed and hence partiality a tubewell operators could .cbe eliminated, needs reconsideration. Eue to high voltage fluctuatio-.automatic operation system did not fuxction properly and therefoneold system of operation continued. This might have allowed sor.tubewell operators to operate the tu-,wells under the influence zIinfluencial farmers. But once again tLs is to be kept in mind, whIE.designing outlets the influential farzers were not favoured anadtherefore it is not correct to say that equ-able distribution of water u-snot ensured.

16. Regarding the factors pointed out in the.-eport, follwing aspects net_fto be reconsidered:

(a) One of the major reasons for Toor increase in the croppir-:intensity is inadequate and erratc power supplv. If the pow.-supply situation is improved by using stand by system like D.C-Set, then the chances of getting te desired increase in croppik.intensity are high.

(4)

_ _ _ _ _6PARA WISE COMMENTS

(b) This is true that Private tubewells have irrigated 20% of thecommand area which was supposed to be irrigated by the publictubewell at the time of appraisal, once again it would beimportant to reiterate that due to poor power supply positionpublic tubewells could not irrigate the area as expected in theS .A.R. If some alternative arrangement is made to ensure powersupply, then it would certainly be possible to irrigate the area asenvisaged in the S.A.R. Farmers would like to depend anirrigation by Public Tubewells because this is more cost-effective., In such a situation, private tubewells will automaticallybecome redundant and the irrigated area by private tubewellswill become negligible. This, in turn, will improve the E.R.R.of the Public Tubewells.

(c) The costs of labour at the time of project appraisal, mid-termreview and at present are Rs. 15.85, Rs. 20.50 and Rs. 30.50respectively and thus it has increased about two times and notsix times as stated in the I.C.R.

17. It is true that poteritial economic benefits have not been fully achieveddue to erratic and unreliable power supply. On an average irrigation pertubewell is from 15 to 20 Hect. each achieving an average of 20.5 hect.

The comments on the three factors influencing ERR are as follows:

(i) Variation in comm and areas depend not only upon the yield oftubewells but also upon the desire of farmers. Similarly the Cropintensity also diffijs in command areas of different tubewellsupon the capability and desire of the farmers.

(ii) Since the tubewells are being transferred gradually to VillagePanchayats/tubewell beneficiaries committees the operationand maintenance of these tubewells will be taken up by them.Thus, due to their involvement in the future ERR will go up.

(iii) There has been no slackness on the part of MID to operate andmanage the tubewells. The original design in which particularoutlet has to be operated in each loop of a tubewell, did not

(5)

64 PARA WI.F' COMMENTS

materialize because of lower working hours of tubewells havinginsufficient power supply. It resulted in pressure on differentoutlets of tubewells because the farmer were not sure of gettingtheir fields irrigated on there turn. If power improves, thetubewells can be operated and managed as per design envisagedat the time of appraisal.

18. The farm income as indicated have been taken to be on lower side asthe irrigation per rehabilitated tubwell has been taken to be 9 Hect.instead of 16 Hect. Similarly the farm income depends also upon thechoice of the farmers, selection of particular crop and crop intensityin the command areas of tubewells. In respect of tubewells with goodpower supply the farm income are quite satisfactory.

19. Since the tubewells are transferred to the village panchayats /beneficiary Committees, the operation and maintenance of thesetubewells is to be done by them. Therefore, the question of providingsubsidy for this work wil] not arise in future.

20. In the initial period of the project, rehabilitation of non-workingtubewells due to mechanical, electrical or other breakdowns andrenovation of their water distribution system was seriously taken up toprovide maximum and quick benefits to farmers of the tubewells ina short period with minimum expenditure. At the later stage of theproject, modernization and construction of new tubewells, iraining topersonnel, establishment of work shop and construction of administrativebuilding and tubewell cluster building was taken up.

The slow progress in the initial stage of implementation of theprogrammes is attributed to the following points.:

(i) Intricate & lengthy procedure of LCB/ICB as laid down by theWorld Bank for any work like repair, rehabilitation, renovation,modernization and construction of new tubewells.

(ii) The LCB/ICB system was initially not well under stood byeither the officers or available contractors who became nonresponsive at different stage of processing.

(6)

65 PAr 'ISE COMMENTS

(iii) The financial powers of officers were inadequate.

(iv) Contractors available in the state were used to F-2 contract ,asall the works of the state are done through F-2 contract. Hencethe lengthy and time consuming procedure of LCB/ICB couldhardly attract responsive contractors.

(v) In the year 1991-92 a long strike by the State Engineers and Staffhas also affected the anticipated progress.

(vi) As per agreement with World Bank, Works had to be done onunit price contract/price work for $ 2.9.m, works for an amount$ 0.7 M, on the basis of departmental procedure and an amountof $3.1 M to be spent for drilling and development works oftubewells. The Bankwas requested through the Ministry ofFinance that the limit of small works of $2.9 M should beincreased to $ 10.M, the limit of departmental works from $0.7Mto $2.lMand the limit of field works from $3.1mto $4.77M butthis facility was also not provided by the Bank. It resulted incancellation of all ongoing works followed by assessment ofincomplete works, survey preparation/sanction of estimates,devising tender documents, floating of tenders and finalising theaward of contracts.

(vii) The Bank was requested to correspond with the Deptt. ofEconomic Affairs, Ministry of Finance, Govt. of India andaccept the reimbursement claim in three phases of constructionsuch as

(a) Drilling and development of new tubewells and replacementtubewells.

(b) Rehabilitation/construction of pump house and pump unit and,

(c) Remaining works of all the types of tubewells but the same hasnot been accepted by the Bank. The Bank was also requested toaccept the reimbursement claims for procurement of materialsequipment done by Bihar State Electricity Board for D.P.L. to

(7)

66 PARAW' COMMENTS

rabewells but the same was not conceded.

(viii) In 1991-92 the project credit was slashed from59.5 M. SDR to19.5 M SDR on account of portfolio rationalisation exerciseunder taken by Govt. of India. Though the exchange rate of US$cnanged from Rs.12,962 in 1987 to 22.742 i.e. an increase of.5.45% the reduction in credit was to the tune of 205.13 %

It resulted in severe increase on the State Budget. It resulted inimpro;er funding of the project by the State Govt. This is the reasonwhy the project which actually picked up in 90-91 could not achievethe desiedphysical progress in the later years specially after 92-93 andonwards where the funding was Rs. 1 1.00 Crores 93-94 and Rs. 12.00Crores in 94-95. The Govt. of India though assured of providingnecessary additionalfunding but request made by the State Govt. onthis account was not considered.

21. DelaY in the implementation is because of non-availability of creditsuppor; by the Bank/Govt. of India. This resulted in poor paymentrespons! to the suppliers/contractors by MID. This affected the paceof progess because the contractors/suppliers ran short of workingcapital.

22. No coniments.

23. Actual project cost wouldhave been less and the project overrun wouldhave been within reasonable limits but because of unfavourablerespons- as pointed out in para-22 of the report by the Bank and para-20 above.

24. The construction of New Tubewells, Medernized Tubewells andRehabilitated Tubewells at the cost estimated at the time of mid termreview could not be achieved.The project could have been completedat the cost much lower than that estimated at present viz. Rs.7.45lakhsfornew tubewells, Rs.7.00 lakhs for modernized tubewells andRs. 152 lakhs for rehabilitated tubewells, had the impediments indicatedin para 20 above not been there.

(8)

6 7 PARA WISE COMMENTS

25. Comments has already been recorded in para-20 above.

2c. No comments.

2?. Cost recovery-steps are being taken to speed up the recovery of arrearwater charges. However, with the transfer of tubewells to villagepanchayats the problem will be reduced gradually. Banks' suggestionat the end of the paragraph will be taken up for implementation.

2S. The issue of installation of meters on tubewells andrationalization ofpower tariff for both private and public tubewells will be taken up withBihar State Electricity Board.

29. Though the observations recorded in this para are by and large true.The water delivery to tail end farmers is not made because of low hoursof power supply to the tubewells..Now, since about 350 submersiblepump sets have been procured, the delay in repairing of pumps will beminimised. The conveyance system loss is mainly due to frequentpower cuts and open channels. Since tubewells are gradually beingtransferred to panchayats/beneficiaries committee dependence uponState's 0 & M budget will be reduced in future. Though there had been

effective coordination between MID and B SEB, the later could not takeup the issue at tubewell level probably because of their poor financialstatus.

30. The area irrigated as indicated in this para is not correct as will beevident from the comments stated in para- 11 above. If power supplyimproves the position will be more than satisfactory. It has already beenstated that performance of tubewell is reasonably good, if power isadequately supplied to it. However, when the 0 & M of tubewells willbe transferred to village panchayats the tubewell wing's role will belimnited to providing only technical back up and thus the position islikely to imporve further. Additionally when the farners will besatisfied with the performance of tubewells owned by them, they mayuse the desired cropping pattern with more intensive crops to haveprofitable crop yields as envisaged at the time of appraisal.

31 No comments.(9)

68 PARAW'- COMMENTS

32. No comments.

33. No comments.

34. No comments.

35. No comments.

36. No comments.

37. No comments.

38. No comments.

39. No comments.

40. No comments.

41. No comments.

42. No comments.

43. No comments.

44. No comments.

45. No comments.

46. No comments.

47. No comments.

48. No comments.

49. No comments.

50. No comments.

51. As will be evident from the discussion made in para-20, the prioritywas attached to rehabilitation of tubewells and thus construction ofnew tubewells and modernization of existing tubewells

(10)

69 PAF '/ISE COMMENTS

were taken up at a latter stage.

The tubewell project was divided into 187 tubewell clusters. It wasprogrammed that work will be taken up in 40 clusters, in stage I, 49clusters in stage H, and other 40 clusters in stage-HI and rest 67 clustersin stage-IV, latter on it was assessed that in 32 clusters both tubewellswing and B.S.E.B. have already went ahead with their works and therfore, it was decided that works of these 32 clusters will be completed onpriority basis and then the project activities should be kept limited so thatentire 80 clusters can be completed. It resulted in idle capacity with theproject. The project works in phase-III and IV could be taken up at a muchlater stage which contributed to a large noumber of tubewells remainingpartly incomplete at the end of the project. As far as selection of sites isconcerned, it was made by district level committees consisting of DistrictMagistrate./ DDC, Dist. Agriculture Officer, Executive Engineers oftubewells wing and BSEB. The performance of drilled new tubewells isby and large satisfactory as will be evident from their irrigation figures.

Power Constraints: No comments.

Under utilisation of facilities: Effort is being made to shift the offices

located near cluster building into newly constructed ones and a good

number of cluster building have been occupied. The-rest will also beoccupied shortly. Since Junior Engineers are given vehicle allowances for

maintaining their own motor cycles and since they draw these allowances

against having their motor cycles, there is no provision for providing themvehicles. The condition of vehicles used by other officers are satisfactory.

Workshop: A good number of workshop buildings has been

constructed. Effort will be made to make them functional in near future.Further, when these tubewells will be transferred to village Panchayats,

the utility of these work shops will be limited to providing them required

service only.

Co-ordination: The farmers are opening 2-4 outlets not because of thereasan stated in the paragraph but because of unreliability of power supply

to the tubewell. On the tubewells where power supply is satisfactory only

( 11 )

70 PARA M - COMMENTS

one outlet in each loop is utilised by them.

Inadequate delegation: Agreeable.

52. No comments.

53. No comments.

54. No comments.

55. No comments.

56. The assessment of the project outcome by the Bank can not be accepted

in totality. The factors like poor power supply, farmers involvement,

procedure for bidding, irregular flow of fLJ.n5&, sharp slashing in the

credit etc. have to be taken into account before assessing the projects

outcome. In case of any project one takes into consideration plausible

factors to assess the viability of the project but on implementation newI unexpected factors crop up and the expected outcome of the project is

affected. In this light it is essential that the assessment of the project

outcome be considered in a wholistic manner before arriving at any

conclusion. M.I.D. is sure that the project was based on very sound fasting

and is bound to deliver irrigational benefits to the small and marginal

farmers of the state. The factors which have been identified to affect the

project outcome need consideration for the future projects in this field.

Even the Bank has observed that by providing diesel generator sets,substantial development impacts can be generated. Under these circumstances,

M.I.D. is sure that if in future any such project takes into account the

factors mentioned above, in all likelihood, project is bound to suceed.

57. No Comments.

58. No Comments.

59. As stated in the Evaluation report.

(12)

A\NNII,,U RV|!-A

Statenientsliowiiig Budget provisiom aflll allotnient recive(d for biliarPlulc'hlall)elvdIsN l'ro,Jec(

Credil No. 1737-IN, lRs. in 1ites.

Financial year Provision in Allotment reccived RemarksBudget by from G.O.B.

G.O.B. GOB.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

86-87 2070.00 698.5()0

87-88 2885.20 1303.00Duringthe latterperiod ol theexecution of theproiect work

88-89 2670.93 2550.00 i.e. from )92-93 to 94-95, when the execution gainfed

89-90 2600.00 2000.00 memenitum the fund flow decreased.

90-91 3299.00 2000.0()

91-92 -3290.00 19((.((

92-93 2800.00 2040.00

93-94 3913.00 1099.67

94-95 400.00 1200.00

72

ANNEXURE- B

Statement showing co-ordination meeting between tubewell wing officialsand Bihar State Electricity Board officials.

Date Details of meeting

09-04-91 High level co-ordination meeting between MemberAdministration, Member, Finance of BSEB and Secretary,Minor Irrigation and Project Co-ordinator, Tubewell Wing.

02-08-91 As above.

05-08-91 & 06-08-91 High level Co-ordination meeting Hon'ble Minister & StateMinister, M.I.D. and Officer's of B.S.E.B. and TubewellWings.

03-01-92 MemberAdministration andMember, Finance and Officialsof Tubewell Wing & B.S.E.B

19-02-92 Project Co-ordinater, Chief Engineer of South Tubewellwing & Joint Secy. BSEB and M.D. Fathuah PhulwarisharfRural Electrification Co-Operative Society.

12-03-92 Secretary, M.I.D. & Officers of TubewelrWing & BSEB.

27-03-92 High level Coordination meeting between Officers of T/Wand BSEB at Darbhanga.

26-03-92 As above at Muzaffarpur.

14-04-92 As above Kishanganj.

21-05-92 As above in the chamber of Project Co-ordinater at Patna.

21-05-92 High level co-ordination meeting between officers of TJWBSEB in the chamber of Hon'ble Minister M.I.D.

27-05-92 Meeting between Senior Officials of T/W and BSEB in theMeeting hall of BSEB.

73 ANNEXU; -B (Contd.)

09 TO 10-02-93 Meeting bet-een officers of T/W and BSEB in presence ofHon'ble Minister, MID At Purnea.

04 To 05-02-93 As above at Darbhanga.

02-03-93 High level Coordination meeting betw. een officer of T/W &BSEB in the Meeting Hall of BSEB.

11.06.93 High level coordination meeting between Hon'ble Ministerof MID & Energy Deptt. with OfficerS of BSEB and T/Wwing in tho meeting Hall of BSEB.

21-06-93 Chief Engneer level special meeting be.rween officer's of T/WV wing & BSEB at Patna.

22-06-93 As above at Darbhanga..

20-06-93 As above at Saharsa.

22-06-93 As above at Bhagalpur.

22-06-93 As above at M.tuzaffarpur.

05-07-93 High level meeting between officers of TfW wing and BSEBin presence of Hon'ble Health Minister at Patna Collectariate.

07-09-93 Meeting on Flood and Drought in the Chairmanship ofHon'ble Chief Minister.

02-09-93 Hon'ble Minister level meeting betwe.n Officers of T/Wwing and BSEB for removing Electrical Fault of T/W atBiharsharif.

21-01-94 Meeting between Engineer-in-Chief. BSEB & ProjectCoordinator T/W in the chamber of Co-ordinator.

In addition to that, in every month co-ordination meeting at ChiefEngineer's and Superintending Engineer's level of T/W wing andBSEB officials are held.

INDIA ANNEXURE- CBIHAR PUBLIC TUBE WELL PROJECT

(CREDIT NO.1737 - IN)

Physical Achievement and Programme of Various Components.

As on 31, May 1994)

Components of work and Targets Total Target Cummulative Progress to the end ofAs per Revised Programme As per

S.A.R. 3/90 3/91 3/92 3/93 6/93 3/94 UP to 5/94 Remarks500 New Tubewells

1. Drilling and Development of Wells 500 238 240 246 247 249 255 256

2. Construction of Pump House 500 21 26 38+6p 9 4+54 p 11 2+36p 149+30p 154+25p

3. ConstructionofElevatedTank 500 20 23 38+Xp 8 5+64p 97+52p 139 +4 1p 144+37p

4. Pipedistrubutionsystem 500 19 24 39+13p 72+71p 7 5 +68p 96+68p 105+59p

5 EnergisationofD.P.L./E.P.L 500 Nit 4 10 44 44 82 89

Contd ...

ANNEXURE - C (Contd.)LNDIA

BIHAR PUBLICTUBEWELL PROJECT(CREDIT NO. 1737 - IN)


(As on 31, May 1994)

Components of work and Targets Total Target Cummulative Progress to the end ofAs per Revised Program me As per

S.A.R. 3/90 3/91 3192, 3/93 6/93 3/94 UP to 5/94 Remarks

1500 Modernization

1. RepairorConstructionofPumphouse 1000 113 156 288+4 0p 355+213p 505+63p 707+138p 7 73 +108p

2. Repair andreplacementof pump unit 1000 Nil 2 165+2p 311+103p 441 612+56p 723+35p

3 Constructionofelevatedtank 1000 88 90 138+30p 282+224p 38 5+121p 593+199p 620+184p

4. Pipedistributionsystem 1000 106 106 166+60p 253+242p 307+188p 370+139P 431+99P

5. EnergizationofD.P.L./E.P.L 1000 2 33 45 305 369 600 1244

Inculding No.s of

Tubewell alreary

energized before

projecL

ANNEXURE - C (Contd.)

INDIABIHAR PUBLICTUBEWELL PROJECT

(CREDIT NO. 1737 - IN)


As on 31, May 1994)

Components of work and Targets Total Targel Cummulative Progress to the end ofAs per Revised Programme As per

S.A.R. 3/90 3/91 3/92 3/93 6/93 3/94 UP to 5/94 Remarks

3212 REHABILITATION

1. Replacementofwells 271 129 145 178 178 178 178 178

2. Repairof replacementof pump unit 1155 1948 1948 2()74+29P 222X+44p 2666 2791+30P 2847+20P

3 Repairof Replacementof Pump house 1213 121 1245 1293+17p 1655+178 p 1851 2118+304p 2354+80p

4. Repair of Water distribution system 1313 847 984 1084 1084 1084 1084 1084

5. Energization by D P LEPL 3712 299 351 548 2221 2311 2585 3197

6. Replacement of Open

Channals by distribution Nil 4 9+1 OP 14+5P 15+8P 15+8P

system with PVC pipe line

ANNEXURE-D

Net irrigable areas created and utitised -NewTubewells.

Component Fy87 Fy88 Fy89 Fy90 Fy91 Fy92 Fy93 Fy94 Fy95 Fy96 Fy97 Fy98 Fy99

NewTubewells

completedNos. - - - - 4 10 44 89 89 200 250 250 250

Potential - - - - - 400 1060 4-00 8900 20000 25000 25000 25000

created (Ha.)

AreaUtilised

(Ha.) - - - - - 351 . 566 1144 2759 8000 12000 20000 25000

Incrementel - - - - - 351 215 578 1615 524 4000 8000 5000

(Ha.)

NB It is assumed that power will be available @ 8 hours per day from 1996 onwards. ifpower supply imporves further the actual area utilised will further go up.

ANNEXURE - E

Net irrigable areas created and utilised -Modernised ,Tubewell

Component Fy87 Fy88 Fy89 Fy90 Fy91 Fy92 Fy93 Fy94 Fy95 Fy96 Fy97 Fy98 Fy99

ModernizedT/W

completed No. - - - 2 33 45 253 431 600 800 1000 1300 1500

Potential - - - - 200 3300 4500 25300 43100 60000 80000 100000 130000created (Ha.)

AreaUtilised

(Ha.) - - - 88 1448 1935 6578 30000 32000 48000 80000 130000

Incrementel - - - - 88 1360 487 4643 23422 2000 16000 22000 50000

(Ha.)

NB It is assumed that power will be available @ 8 hours per day from 1996 onwards. ifpower supply imporves further the actual area utilised will further go up.

ANNEXURE - F

Net irrigable areas created and utilised -Rehabilitated Tubewells

Component Fy87 Fy88 Fy89 Fy90 Fy91 Fy92 Fy93 Fy94 Fy95 Fy96 Fy97 Fy98 Fy99RehabiliatedTubewell

completed No. - - 52 299 351 548 1655 2354 2354 2854 3212 3212 3212

Potential - - - 4160 23920 28080 43840 132400 188320 188320 256960 256960 256960created (Ha.)

AreaUtilised(Ha.) - - - 3314 15969 21600 24137 27505 35765 85620 125268 167024 208780

Incrementel - - - 3314 12655 5631 2537 3368 8260 5811' 39648 41756 41756(Ha.)

NB: It is assumed that power will be available @ 8 hours per day from 1996 onwards. ifpower supply imporves further the actual area utilised will further go up.

80

EVALUATION REPORT ON BIHAR PUBLIC TUBEWELL

(CREDIT No. 1737-IN)

A. PROJECT OBJECTIVE

(a) The objective of Bihar Public Tubewell Project was to increase the

agricultural production by improving and expanding the use of ground water

potential of the State. This was to be achieved by (i) introducing improved

technology which restricts and eliminates misuse of water, (ii) undertaking a

phased programme to rehabilitate and modernize the existing PTW. ( iii)

strenghthening the institution to ensure that the project works be efficientlyimplemented, operated and maintained and (iv) increasing the agricultural production,

employment and income especially for small farmers.

This was to be donc by (i) construction of 500 new improved

tubewell systems each of about 150 M3/h discharge and net conimand area of

about 100 hect. (ii) modernization of about 1000 (1500 revised) tubewells, (iii)

rehabilitation of about 3712 (3212 revised) tubewells. (iv) Construction of

dedicated power lines to about 5212 tubewells and (v) provision of equipment,

transportation vehicles and buildings to be used during the project construction,operation and maintenance, preparation of design and 0 & M manuals, monitoringtechnical services, studies related to project managament, cost recovery and

agro-economic base line survey for selected project tubewells and training of

project staff to monitor and evaluate the different activities.

Against the target of 500 new tubewells, 256 nos. were drilled and

developed. Out of this 256, 89 were fully completed and energized. Besidesthat, the civil works on 105 nos. were completed. Similarly, against the targets

of modernization of 1500 tubewells and rehabilitation of 3212 tubewells, 431and 2354 tubewells were fully modernized and rehabilitated respectively. Under

training programme, 2 Executive Engineers. 72 A. Es. 153 J.Es, 82 Electriciansand 42 Nos Pump fitters, 202 Tubewell Operators where the tubewell has

already been handed over to Panchayats, were trained. Besides this 636 beneficiaries

were also trained.

( I)

81 EVALUATION REPORT

Under the studies programme, Project Management study and an Agro-Economic baseline survey of selected project tubewells have been completed. Ateam consisting of 2 S. Es, 3 E.Es., 2 A. Es. and 5 beneficiaries were sent toWest Bengal under Management and Technical studies programme. They havesubmitted their report which is a useful document for handing over the Public

Tubewells to beneficiaries' committee, in a manner similar to that of WestBengal.

A Design, Construction, Operation and Maintanance manual has beenprepared as per S.A.R. and circulated among the field officers for standardizationof acivities related to these topics.

The above shortfalls in completion of the project components weredue to the slow progress in the initial stage of the project which is attributed tothe following main reasons

1. Intricate and lengthy procedure of LCB/ICB as laid by the WorldBank for procurement and work like repair, rehabilitation, modernizationand construction of new Tubewells. Initially the LCB/ICB systemwas not understood properly by cithcr officers or available contractorsin the state. The result was that most of the tenders offered by the

contractors became unresponsive at different stages of processing.

2. The power for approval of tenders was vested in the Departmental

Level Tender and Purchase Comrmittee, consisting of Secretary, MinorIrrigation Department, Bihar, Secretary, Finance Depertment, Bihar,Engineer-in-chief, Vigilance, Cabinet Vigilance, Bihar, Project Co-ordinator, Tubewell Wing, Govt. of Bihar. The Chief Engineer couldhardly approve Civil works tenders for Rs. 0.3 m. It was a usualhappening that most of these tenders were not responsive. Theworld Bank had also laid the criterion that only one tender shouldbe awarded for all tubewells in a cluster consisting of 25-30 tubewells,

but no contractor was available for such a big project costing aboutRs. One Crore or so as the tubewells are scattered here and there in

country side only.

3. Frequent transfer and posting of the Project Officers retarded the

(2)

82 EVA'I UATIONREPORT

progress of the Project work. As per Govt. of Bihar norm, officersare transferred after three vears of service from onc office to anotheroffice. This was also applicable to the officers posted in the project.

4. Iln iniitial stages (from 86-87 to 89-90) of the project, tle GoVt. of

Bihar used to sanction the project on yearly basis. And the annualsanction of establishment continued till the end of the project period.

As a result. during the first few month of every financial year. The

Executive Engineers were not allowed to function as drawing anddisbursing officers due to non-sanction of the posts during the

poriod which used to be main working period.

5. Cheque drawing authority was made available to the tubewell wing

on yearly basis.

6. The construction of Dedicated Power Line (D.P.L.) was not foundsuitable because it used to run in the country side mostly throughareas devoid of habitaion and was more prone to theft..On review

however the World Bank agreed to waive the Dedicated Power Line

concept.

(b) PROJECT DESIGN

All New and Modernized Tubewells were constructed as per design ofan Improved Standard Tubewell System. But only 170 New and ModcrrnisedTubewells were equipped with well regulated and controlled water distributionsystem to be operated with automatic switchgear. But the result of its use was

not encouraging. The pump controllers were designed to operate at 415V +10%,-15% voltage i.e. between 352 V and 456 V . But the voltage of power supliedto tubewell was too erratic and fluctuating to enable smooth functioning of

these controllers. The voltage received was even as low as 300 V, some times.

The old system of auto-starter with main switch was operative in that case.

(C) IMPLEMENTATION AND OPERATION EXPERIENCE

Though for the Bihar Public Tubewell Project, advance planning for

(3)


energization was done, but the BSEB could not cope with the above planning.Later on in place of D.P.L., the switch over to EPL, with independent transformerwas even allowed but that could accelerate the energization to some extentonly. Although advance payment was made to BSEB but the desired improvementcould not be had from them. The project took some time to cope with theBank's guideline on LCB/ICB tenders and agreements. The project was plannedfor receiving 16 hours power supply, but due to quite inadequate and untimelypower availability from the BSEB, on an average 4 to 6 hours power supplycould be received at tubewells, and this thwarted the realization of the objectiveof the project.

As stated above, from 1987-91 the project could not gearup to WorldBank procedure and LCB/ICB tenders, so the fund available frorm GOB couldnot be fully utilized. When the project came in the position to complete the

Scheme in the stipulated period i.e. 31 May 1994, funding from GOB becomepoor. From Sept.'93 to May 1994 no fund could be received from GOB toexecute the works. Here it will not be out of place to mcntion that in aiiyproject execution, of the maximum work is achieved in the last phase of theProject and thereby its targets but in Bihar Public Tubewell Project it could notbe done due to financial scarcity. I

Concerted moves were made from the project authority for takingAgriculture Extension Services of DOA to the maximum. But the extensionservices received were not adequate at Public Tubewell level.

B. PROJECT EVALUATION

The Mission's observation on I.C.R. is based on the assesement ofperformance of 89 nos. of New Tubewells, 431 nos. of Modernized Tubewellsand 2354 nos. of Rehabilitated Tubewells in the year 1993-94. But actually theabove numbers of Tubewells were completed upto May'94 and majority of themwere not declared operative in 1993-94. Only 4 nos. of NPw Tubewells. 253Nos. of Modernised Tubewells and 1653 nos. of Rehabilitated Tubewells wereoperative in 1933-94. These Tubewells have irrigated 27505 Hect. of the land,1144 Hact, was irrigated by New Tubewells against 4400 Hect. of additionalirrigation potential created. Similarly 6578 Hcct. and 19783 Hect. were irrigatedby Modernized and Rehabilitated Tubewells against 25300 Hect. and 132400

(4)


Hect. of additional irrigation potential created respectively. This shows that in

the year 1993-94, area actually irrigated was 26% for New Tubewells, 26% forModernized Tubewells and 15% for Rehabilitated Tubewells of additional irrigation

potential created.

Yearwise detailed performance of Bihar Public Tubewells is given in

the table. From the table it may be seen that over-all potential utilization of

completed Tubewells of the Project was 79-66% in 89-90, 66.21% in 90-91,

68.00% in 91-92, 45.00% in 92-93 and 16.96% in 93-94. The principal reasonsfor gradual decrease in potential utilization is shortage of power supply.

Study of performance of the Tubewell is quite early as compared to

the time span of about 6 to 8 years required for the complete build up of

Tubewell system and reasonable assessment of the full impact of the Project.

Tubewells declared operational, requires a period of 4-6 months for

becoming fully stabilized and for being capable of irrigating in full swing. Uptothe year 1992-93, only 1952 Tubewells have been completed which were declaredoperative in 1993-94. Some Tubewells completed in the year 1992-93 were in

testing period.

LESSONS LEARNED DURING THE PROJECT IMPLEMENTATION

The Main factors affecting the implementation of the Project have

been discussed in the previous paras. However, the same are summarised below

1. Officers posted in the work of Project execution work should notbe replaced till the project is completed.

2. Executing work of new tubewell should not be taken up till tubewells

already completed or partially completed are made fully operational.

3. Shortage of power supply has been the main factors affecting theimplementation of the Project. The Tubewell Project was designed

for 16 hrs. power supply per day as envisaged in the S.A.R. But theaverage power supply is 3 to 6 hrs/day. This is a Statewise problem,

hence it should be tackled at State level. Till the improvement in

(5)


power supply position, there should be stand by arrangement by

providing D.G. Set to supplement the shortage of power. Energy

bill should be on the basis of units consumed because the duration

of supply is much below the Minimum Guarantee clause, hence in

place of fixed charge (Minimum guarantee) the Energy meter should

be installed on each Tubewell and energy bill should be as per

consumption.

4. As per Govt. order, all the Tubewells are being handed over to thePanchyat in phases. Till now 488 Nos. of Public Tubewells havebeen handed over to Panchayats. It has been found that the Panchayatsare not coming forward to take-over Public Tubewells. It is nacessaryto motivate the farmer's society/panchayat to take over Public Tubewells.The maintenance and running by the Panchayats is by and largepoor.

5. At present water rate is charged on the basis of area irrigated. Thewater rate has to be reviscd and it is under process. The water rateshould be worked out on volumetric basis. This will encourage theeconomic use of water for irrigation and thereby over more areadue to saving from optimum use of water.

C. BANK PERFORMANCE AND LESSONS LEARNED:

So far as the relations with World Bank with Government of Bihar isconcerned, it was cordial. Their suggcstions were mostly for improvement isimplementation and Govt. of Bihair carried out their suggestions in its rightearnest.

I1. The only grievance is regarding the curtailment of the credit amountwithout consulUting Govt. of Bihar.

2. The Word Bank insisted that on the basis ot comnpleted Tubewellonly, reimbursement would be made for civil works but that includedthe energization part. As energization part was dependent on theperformance of Bihar State Electricity Board, the reimbursementfigure was negligible in the early years. Actually the disbursementshould be allowed on completed jobs to accelerate the progress aswas done in case of Govt. of West Bengal but, unfortunately the

Bank refused in case of Bihar

( 6)

PERFORMANCE OF BIHAR PUBLIC T1'UBEWELL

TABLE:

Progress Numlber ol Tubewells declared Comiipleted Year ol Add. Irii. Potential Utiliz.ation Percenlageupto. actual created as per in Ilect. Of utilii.ation.

New Modernised Rahabilitated. Total operation. Bank in Hecl.

1. 2. 3. 4. 5. 6. 7. S. 9.

1988-89 - - 52 52 1989-90 4160 3314 79.66

1989-90 - 2 299 301 199(-91 24120 15969 66.21

1990-91 4 33 351 388 1991-92 31780 21600 68.00

1991-92 10 45 548 603 1992-93 53740 24137 45.00

1992-93 44 253 1655 1952 1993-94 16210() 27505 16.96 0

1993-95 89 431 2354 2874 1994-95 240320 -

(3I ,Maiy'94)

IntlhcYearl993-94areaactuallyirriga,tedwas26% (NewTubewells!).26': (NMod(ernised Tubewell) &

15%Yt (Rehabilitated Tubewells) of additional potential created.

IBRD 19278R

IDA' ) _ ~~~~~~~~~~~~~~~~I N D I A

BIHAR PUBLIC TUBEWELL PROJECT-27' /V PROJECT AREA

-26'- 't 26°

w ~~~~~PATNAi) ' -' i'

23' R irss:

252

-24'2' . '. '8vs 24--

V~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~RVR)~~~~~~~~~~~~~~~~~~~~~~~~~~~9 STT CAPITAL

Th.3' 3,d,0 0 20 4 " , '___ 23I

i-p", ~ ~ ~ ~ -_ tg 7

.''--1 ..,,\<t

-4" 872 8 F" -5 ' 220

PROJECT AREA LIMITS

- RIVERS

®i STATE CAPITAL

The boundaries. rolors, 0 20 42 60 80 100 120 KILOMiETES _ DlSTIRICTBOtJNDARIESdenominations and any Iother information shownI I I _ _STIEBUDRS

The yWord tBak pGtrOoup 2 20 40 6200 [LES *) INTIRNAlION4AL BOUNDARYany judgment on the legalstratus of any territoryor any endorsementor acceptance of suchboundaries. 21-

~~~ 84 8~~~~~~~~50 66 870 88'

APRIL 19>95

IMAGING

Report No: 14409Type: ICR

World Bank Document of The World Bank FOR OFFCIAL USE ONLY Report No. 14409 IMPLEMENTATION...

Documents

Transcript of World Bank Document of The World Bank FOR OFFCIAL USE ONLY Report No. 14409 IMPLEMENTATION...