Document of The World Bank MAY 17, 1991

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized S Document of The World Bank FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT NEPAL NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE II PROJECT (CREDIT 856-NEP) Agriculture Operations Division Country Department I Asia Regional Office MAY 17, 1991 Report No Thbis document has a restricted diibution and may be used by redpients only In the perfonnmance of their officfl dutie Its contents may not otherwise be disclosed without World Bank authoizaion.

2 ABBREVIATION AADO Assistant Agricultural Development Officer ADBN Agricultural Development Bank of Nepal ADO Agricultural Development Officer AG Auditor General AIC Agricultural Input Corporation BRVPD Bihar River Valley Project Department BSC Branch Secondary Canal CCA Cultivable Command Area DE Divisional Engineer DG Director General (DIHM and DOA) DIHM Department of Irrigation, Hydrology and Meteorology DOA Department of Agriculture EE Executive Engineer ERR Economic Rate of Return FAO Food and Agriculture Organization (UN) GM General Manager GOI Government of India HMGN His Majesty's Government of Nepal HYV High-Yielding Variety ICB Internat 4.onal Competitive Bidding IDA International Development Association IEC Indian Eastern Canal System JT Junior Technician JTA Junior Technical Assistant LCB Local Competitive Bidding M&E Monitoring and Evaluation MOA Ministry of Agriculture MSC Main Secondary Canal MWR Ministry of Water Resources NEC Nepal Eastern Canal NFC Nepal Food Corporation NZIDB Narayani Zone Irrigation Development Board NZIDP Narayani Zone Irrigation Development Project (Stages-I, II and III Areas) OCC Opportunity Cost of Capital O&M Operation and Maintenance PCR Project Completion Report PLAA Panchayat-Level Agricultural Assistant PPAR Project Performance Audit Report RD Revenue Department REC Rice Export Corporation SA Special Account SAR Staff Appraisal Report SCF Standard Conversion Factor Stage-I Area NZJDP, Blocks 1 to 6 (16,000 ha) Stage-II Area NZIDP, Blocks 7 to 12 (12,700 ha) Stage-III Area NZIDP, Blocks 13 to 15 (8,700 ha) TC Tertiary Canal T&V Training and Visit System (of Agricultural Extension) WUG Water Users' Group

3 THE WORLD BANK Washington, D.C U.S.A. FOR OW71CIAL UE ONLY Ofice o MaE ctmw.generai Opse 4is EvaiuU. Hay 17, 1991 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECT: Project Completion Report: NEPAL - Narayani Zone Irrigation Development Stage II (Credit 856-NEP) Attached, for information, is a copy of a report entitled "Project Completion Report on Nepal - Narayani Zone Irrigation Development State II Project (Credit 856-NEP)" prepared by the Narayani Zone Irrigation Development Board and the Asia Regional Office. No audit of this project has been made by the Operations Evaluation Department at this time. This document has a restricte distribution and may be used by recipients only In the performance of their official duties. Its contents mey not otherwise be disclosed without World Dank authoriation.

4 FOR OFFICIAL USE ONLY PROJECT COMPLETION REPORT NEPAL NARAYANI ZONE IRRIGATION EPVELOPMENT STAGE II PROJECT (Credit 856-NEP) Table of Contents Preface... Pag. No. Basic Data Sheet i$1 Evaluation Sumary Overview l v PROJECT COMPIETION REPORT (prepared by the Borrower) Summary and Conclusions 9 T. Introduction. 11 II. The Project at Appraisal 13 III. Project Implementation. 17 IV. Agricultural Impact V. Economic Evaluation * VI. Institutional Performance..o VII. Special Issues and Lessone Learned t VIII. Bank Performance MAPS IBRD 13527R IBRD 13537R IBRD 13648R This document has a restrictedistribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

5 - i - PROJECT COMPLETION REPORT NEPAL NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE II PROJECT (Credit 856-NEP) PREFACE This Project Completion Report (PCR) reviews implementation of the Narayani Zone Irrigation Development Project-Stage II, for which Credit 856- NEP of US$14 million was approved on November 27, The Credit Closing Date was extended three times from December 31, 1983 to December 31, The Credit was fully disbursed on Atgust 12, The Basic Data Sheet, Project Formulation, Project at Appraisal, Project Implementation, Project Results, Conclusions and Lessons Learned were prepared by the Bank. They are based on a review of the Staff Appraisal Report; President's Report; the Credit Agreement; and the Borrower's PCR, prepared by the Narayani Zone Irrigation Project in Nepal. In addition, Bank supervision mission reports, correspondence with the Borrower and internal memoranda on project related matters have been consulted. This PCR was read by the Operations Evaluation Department (OED). The draft PCR was sent to the Borrower on January 18, 1991, for comments by March 8, 1991, but none were received.

6 - Lit - NARAYANT ZOE IRRIBBIEATION EELOPMENT STAGE TT PROJECT (Credit R56-NEP) RAXIC DATA EHEET= Kay pront d&ta Appraisal Actual or Actual as % of FX_4t-nMt-A Eet- Actual anr- Zattimate Project Costs (US$ M.) Credit Amount (USS M.) Date board approval 27/11/1978 Date physical component completed 31/12/ /7/1986 Closing Date 31/12/ /12/1986 Economic rate of return 22% 162 Institutional performance: Satisfactory Agromic performance: Potentially satisfactory Number of direct beneficiaries Potentially 12,600 farm families Cumulative Diaburagments 78/79 79/RO AO/Al L1L8z R2/83 R3/84 84/85 A8/86 Appraisal (US$ M.) Actual (US$ M.) Actual (% Date of final disbursement:august 12, 1987 Mission data Man-days Specializations Overall Mission Date Mission Leader FAr= infli±ald Rarasented_1 Status 2 Identification 3/76 C.M. Bolt Preparation 3/77 C.M. Bolt Appraisal 10/77 C.M. Bolt Supervision 1 1/79 W. Van Tuijl 1 3 E 1 Supervision 2 10/79 W. Van Tuijl 3 9 E,A,C 1 Supervision 3 4/80 W. Van Tuijl 2 4 E,A 1 Supervision 4 11/80 W. Van Tuijl 1 3 E 3 Supervision 5 2/81 W. Van Tuijl 1 5 E 2 Supervision 6 5/81 W. Van Tuijl 2 2 2E 2 Supervision 7 12/81 E.L.N. Kramer 1 2 E 2 Supervision 8 11/82 M. Barber 4 12 E,C,A,J 2 Supervision 9 9/83 W.G. Rodger E,C 2 Supervision 10 11/84 E.L.N. Kramer 2 6 2E 1 Supervision 11 9/85 E. Gazit 2 8 2E 1 Supervision 12 5/86 E. Gazit 2 8 2E,A 1 1 A - agriculturist; C - economist; E - engineer; and J - legal specialist 4 I I S -,... I

7 - iv - Other, Pro4eat d Borrower His Majesty's Government of Nepal Executing Agency Narayani Zone Irrigation Development Fiscal Year July 16 - July 15 Board Name of Currency Nepalese Rupee (NR) Currency Exchange Rate Appraisal year average US$1.0 - NRa Intervening years average US$1.0 - NRa Completion year average US$1.0 - NRs F1LQv-On Project Name Narayani III Irrigation Project Loan/Credit Number 1715-NEP Loan Credit Amount (SDR M) 21,6 Date of Board Approval June 19, 1986 Staff In2uts #Staff weeks) 1 LENP LENA LENN LOP SPN PCR PAD Total LENP - Lending Pre-appraisal LENA - Lending Appraisal LENN - Lending Negotiations LOP - Loan Processing - General SPN - Supervision PCR - Project Completion Report PAD - Project Administration

8 - v - PR&JRZn COrD PLVTON RF.PORT NPAYANI NE INFPA MENT - STA II PROJC' (CREDIT R56-NEP EVALUATION SUNMARY Introduntion i. The Narayani Zone Irrigation Development Project-Stage II was intended to continue the development of the surface irrigation of the Nepal Eastern Canal (NEC) command area together with a small groundwater component. The total project cost estimated at appraisal was US$17.0 M supported by an IDA Credit of US$14.0 M. The Credit closing date wa. extended three times and the project was closed on December 31, The actual project cost was US$17.2 M and the Credit was fully disbursed. 2xgject kbectime ii. The Project under review was designed as a time-slice of the NEC development program. It was to complete the area deleted from Stage I, which was designated as Stage II. The objectives of the project were to: (a) improve the reliability and amount of water delivered to farms and establish farmers' confidence in the irrigation system; and (b) accelerate agricultural development and increase farm incomes as well as rural employment. To achieve the above objectives, the project was designed to: (a) improve the operational control of the NEC and its security against damage by floods; (b) expand the area of the irrigation distribution system capable of delivering regulated supplies to groups of farmers in blocks (chaks) of 7.5 to 10 ha; (c) improve drainaqe of farms and roads; and (d) strengthen agricultural extension services and improve the linkage with research and training. In addition, a pilot tubewell project to irrigate areas above the command of the main system was included. lementation Ex_ eriena iii. Project implementation was slower than expected at appraisal because of delays in the main civil works components due to poor performance of the local competitive bidding (LCB) contractors and shortages of cement, bricks and steel. All physical works were completed with the exception of: (a) the drainage works which were abandoned when farmers refused to allow rights of way; and (b) five deep tubewells and 50 shallow tubewells because farmers would not accept ownership responsibility. iv. The farmer group development component for the surface system, aimed at setting up effective water user groups responsible for constructing field channels and field drains mnder the supervision of the project staff, was not successful. Water supply was limited and uncertain, and farmers had no confidence that the main system would eventually be ab±e to deliver reliable and predictable water supplies that would have made the construction of field channels worthwhile. v. The project accomplished most of the physical construction works specified in the SAR but failed to provide any significant irrigation service during the life of the Credit. The main supply from the Don Branch canal in India proved erratic and unreliable. The Don Branch failed completely in 1986 due to severe floods in

9 - vi - September of 1986; reptirs are now nearing completion. The distribution system design in Stage I and II was judged, as a result of the limited operations up to the failure of the Don Canal in 1986, to be very difficult to manage and is being modified in the current Narayani III projzct, The groundwater facilities were mostly completed but remain essentially unused because of technical and financing problems which ciscouraged farmer participation. vi. The Project was a time slice of the NEC coimand and should be judged in this context. The main benefits were expected to come from timely supplementary irrigation for early planting and insurance against the erratic monsoon during the kharif, and full irrigation during the rabi. While no irrigation su;pply has been provided from the Don Canal after September 1986, good rains and watar captured temporarily from rivers crossing the area have provided a satisfactvry increase in yields. When the Don Canal is functioning, the project will provide the irrigation services mentioned above. The economic rate of return (ERR) as recalculated for this report is 16%. This assumes that the expected water supply is forthcoming from the Don Canal starting in mid-1990, and the distribution system is modified as planned under the ongoing Stage III project. Continued operation without modification of the distribution system would yield an ERR of 14%. SustAinaMbilty vii. The sustainability of the project's surface water component depends on a reliable water supply from the Don Canal and adequate operation and maintenance funding. The risk attached to possibly uncertain water supply from the Don Canal was not adequately addressed during appraisal. The groundwater component was not completed, but the wells developed have potential future use if the technical and financial constraints can be properly identified and removed. Findings~ and LessonsR viii. The main findings and lessons are; (a) The short- and long-term reliability of the surface water source from the Don Canal, both in timing and quantity, was not correctly evaluated at appraisal. The cause of total performance failure was the flood of August 1986, which cut off the main surface supply from the Don Branch Canal. Completion of repairs on the canal is scheduled for June * This experience suggests that under conditions like those which prevailed in the project, a water right based on international agreement may be insufficient guarantee of reliable physical delivery. The operational problems faced in fulfilling the riparian obligations to supply a guaranteed quantity of water on demand at the end of a canal 100 km long, *.ith probably hundreds of illegal offtakes along the way, were not correctly assessed. (b) The water management concept on which design of the distribution system was based has proven difficult to implement and has *-quired system modifications. * The lesson is that operational plans should: be specified and agreed before system design; provide the basis for system design concepts and criteria; and be consistent with the physical and institutional capacity to implement them. (c) The causes of technical failure of the deep tubewells in the area were not adequately investigated during preparation, and high failure rates led to a lack of confidence among the farmers which blocked the planned private deep tubewell development. The financing terms

10 - vii - offered by the Agricultural Development Bank (ADBN) for shallow tubewells were not sufficiently attractive. The failure of the groundwater component indicates that, especially in cases where farmers' participation is critical, the facilities must work as expected (i.e., failure rates must be low), and financing terms must be designed to fit within the farmers' perceived means. Adequate technical preparation and flexible financial arrangements adapted to needs of the farmers are therefore essential. (d) Kev agricultural extension services deteriorated following transfer of extension responsibility from the project Board to DOA. Arrangements for agricultural extension should be included in the irrigation project until the DOA extension service is strong enough to provide adequate extensiun support. (e) Although explicitly included in the project and supported by Narayani Zone Irrigation Development Board (NZIDB), efforts to promote farmer participation in construction of field channels and field drains were unsuccessful. Farmers had no confidence that the system would eventually deliver the reliable water supplies which would make such investments worthwhile. Farmers must feel assured that the system will deliver water as provided, and they must see proof that it will do so. This is a necessary, but not sufficient, condition for effective farmer participation.

11 -1- PR0JECT COMPLET1ON REPORT NA".'YANI ZQON IRI TN DEVELOP TN - STAGE I! PROJECT (CREDIT 856-NEP. 1. The Project Completion Report (PCR) of the Narayani Zone Irrigation Developmer.mt Project (NZIDP), Stage II (Cr 856-NEP) was prepared by the Narayani Zone Irrigation Development Board assisted by the project consultant. This overview is intended to supplement the findings of the PCR with IDA's observations. Prniant QhPtfvd and Rati1nal 2. Secttr Develonment OhiAecives. Nepal's economy is largely dependent on the agriculture sector. Farm prwduction and related activities at the time of appraisal accounted for about 65% of GDP, 93% of employment and 80% of all exports, mostly foodgrains. Nepal has a gross area of 14.1 H ha of which only about 2.3 M ha is cultivable. Paddy accounts for 51% of the total cropped area: maize 19%; wheat and other cereals 16%; and other crops including oilseeds, pulses, jute, potatoes, su9arcane, tobacco and horticultural crops 14%. Development of agriculture has been slow. Over the last 12 years ( ), growth in production had been barely above population growth. Moreover this growth had come primarily from area expansion, the further scope for which is limited. The crops which had the largest area increases were wheat (10% p.a.) and potatoes (5.4% p.a.), mostly in the Terai. Productions of most other crops stagnated or declined in the same period, reflecting: (a) extension of cultivation into areas of marginal productivity; (b) soil denudation; (c) the lack of technology suitably adapted to local conditions, particularly for Hill agriculture; and (d) institutional constaints such as the lack of trained manpower. In view of the limited scope for any further area expansion, future growth in agricultural production was judged to depend essentially on yield improvement. This was thought to be attainable, particularly in the Terai, provided there are effective sxtension services, reliable provision of irrigation and adequate drainage at the farm level. 3. Trrigation Polinv in Nepal. Of about 960,000 ha having some form of irrigation in Nepal, about 750,000 ha or 78% is in the Terai. His Majesty's Government of Nepal (HMGN) started the modern era of irrigation construction in the 1920's in the Terai with the assistance of the Government of India (C-0I) as a part of the water sharing agreements between the two countries. The Terai schemes were all based on river diversions with design standards used in India at the time. The concept was to provide extensive irrigation as drought insurance to kharif crops. The distribution systems were developed only to the 0.6 m 3 /s (20 cusec) 1000 ha (2500 ac) block level. Farmers were expected to construct or their own t.e lower part of the distribution system. In practice, the systems never served the design service areas satisfactorily. The more recent irrigation development policy in the Terai for public sector schemes can be summarized as the upgrading of the old drought insurance schemes to modern standards, and for areas out of conmand of the old systems supplement the surface water through

12 -2- groundwater resources. No plans for conjunctive use of surface and groundwater were formulated. 4. prvious IDA Involvement. The first project undertaken with IDA assistance was the Birganj Irriga.iort Project (Naryani Zone, Cr 373-NEP, US$ 6.0, 1973). Its objective was to complete and upgrade the irrigation and drainage sysvem on 28,700 ha of the 37,400 ha of the Nepal Eastern Canal (NEC) command area, and to provide groundwater irrigation to 2,700 ha north of the NEC command area through public tubewell development (the Birganj Groundwater Scheme). Because of implementation delays and cost overruns, the surface component was reduced to 16,300 ha in November 1973, designated Stage I, and completed in A PPAR dated October 10, 1978 was issued. eroient Obientives 5. The Project under review was a time-slice of the NEC development program. As Stage I had been completed in a reduced form, this Project was to complete the area deleted from Stage I and was designated Stage II, (Stage III, Narayani III Irrigation Project followed in 1986). The objectives of the project were to: (a) improve the reliability and quantity of water delivered to farms and establieh the farmers' confidence in the irrigation system; and (b) accelerate agricultural development and increase farm incomes as well as rural employment. To achieve the above objectives, the project was designed to: (a) improve the operational control of the NEC and its security against damage by floods; (b) expand the area of the irrigation distribution system capable of delivering regulated supplies to groups of farmers ir blocks of 7.5 to 10 ha (chaks); (c) improve drainage of farms and roads; and (d) strengthen agricultural extension services and improve the linkage with research and training. In addition, a pilot tubewell project to irrigate areas above the command of the main system was included. Project Appraisal 6. The project was prepared by the NZIDB with assistance from consultants. Project appraisal took place in September of The prin ''.pal source of water for the NEC originates in India. An international agreement (1959) permits Nepal to draw 850 cusecs (24.1 cumecs) upon demand from the tail end of the Don Branch Canal {a part of the Indian Gandak project serving almost a million ha). In addition to the supplies from India, minor bazrages on the Tilawe, Sirsia and Jhanj rivers which cross the NEC command provide supplemental supply to the project in the kharif and rabi seasons. P'roject Imp]Mentation 7. Civil and Buildings. Construction of planned civil and building works, the main physical components, was completed. However, it lagged well behind the original schedule. The main reasons included the poor performance of the LCB contractors and shortages of cement, bricks and steel. The total project cost estimated at appraisal was US$17.0 M supported by an IDA credit of US$14.0 M. The Credit became effective on January 8, The Credit Closing Date was extended three times and closed on December 31, The actual project cost was US$17.2 M, and the credit was fully disbursed on August 12, The NEC Canal and Distribution Network. Improvement works for NEC specified at appraisal were completed. In addition, there were substantial increases in the scope of work in connection with repairs to flood damage and erosion protection. The irrigation and drainage system was substantially completed by 1985 (a delay of three years because of the weak performance of the

13 -3- LCB contractors). Initial operational experience with the distribution system, before the Don Canal was breached in 1986 indicated that modifications (costing US$ /ha) were necessary, and these are being implemented in the current Stage III project. The drainage component was abandoned because the farmers refused to allow rights of way to be acquired. 9. W&ter User_ goqu. Water User Groups (WUGs) were to be formed for each 8-10 ha chak. These groups were to be responsible for constructing field channels and field drains under the supervision of the project staff. However, no effective WUGs were formed during the project and only 22 km of field channels were constructed out of a planned 1,900 km. No field drains were constructed. The farmers had no confidence that the main system could deliver reliable and predictable supplies that would have made the construction of field channels or field drains worthwhile. At the end of the project the NZIDP established a Water Management Division to organize effective users groups and provide technical assistance with on-farm works. 10. Community Tubewells SheAme. The project included provision for five deep, privately owned, community tubewells to irrigate about 120 ha each, and 50 shallow tubewells to irrigate about 10 ha each, in the vicinity of the Stage I pilot groundwater development area where surface irrigation development is not feasible. The five deep tubewells were deleted in 1982 because the farmers did not cooperate. Their reluctance was, at least in part, caused by the poor record of performance of the existing deep tubewells nearby which were operated by HMGN. An LCB contract for constructing 50 shallow tubewells was let in 1983, but only 25 wells were drilled by the end of Tenders were called for the pumps and motors in 1985, but no contract was awarded and no equipment installed. A few farmers have installed pumps (hand or diesel driven) on some wells, but most are capped and not in use. Farmers were supposed to take over the tubewells using ADBN financing, but financing terms were apparently unattractive. 11. Microhydro Station. A pilot micro hydroelectric station was included for the Tilawe Barrage. After a detailed study was made, it was concluded that the unit was not feasible and the component was dropped. 12. Agricultural Extension and Training. Promising results were obtained in the pilot scheme for agricultural extension based on the T&V system, which was introduced in Parsa and Bara Districts under Stage I. HMGN decided to extend the T&V system throughout Nepal under a national extension and training project. However, as implementation of a national program was expected to take considerable time, the pilot scheme was to be expanded under this project from two Districts to six, and cover all the four ongoing IDA assisted irrigation projects in the Terai. The project included consultancy services, training, linkages with research, a portion of the staff costs for a four year period, vehicles, staff quarters, stores, a training center and associated equipment. 13. In early 1979, HMGN established the Agricultural Division (AD) within the project headed by a Senior Agricultural Officer (SAO) deputed from the Department of Agriculture (DOA). Initially, the agricultural extension activities were hampered by lack of Subject Matter Specialists (SMSs), frequent staff transfers, inadequate allocation of budget by HMGN and poor logistic support. The progress of the agricultural extension component was slow, partly because of delayed project implementation and construction of the training center, but also because of DOA's reluctance to provide technical support as long as the administrative control was with the NZIDB. However, with the appointment of the SAO in 1980, the AD became a viable and strong unit. All quarters for junior field extension staff, subcenters for farmer training, and inputs warehouses were built in three project districts. Extension workers also

14 -4- assisted farmers in constructing field channels and drains in the project area and started organizing the Water User Groups (WUGs). However, this proved to be extremely difficult because of the uncertainty of water supply. 14. In mid-1984, HMGN transferred the authority for extension staff from NZIDB to the Ministry of Agriculture. Work responsibilities were shifted to the regional directorate of the DOA. Staff on secondment from DOA were trarsferred to the regional director, and tite employment of staff directly employed by the Board was terminated. 15. The extension support to the command area hlas deteriorated since the project's AD was integrated into the T&V system and operated on a district basis under a line department of DOA. Under the DOA extension service, one PLAA was serving over 1,000 farm families, which was inadequate. Under the Stage III project, this weakness will be partly rectified, as the project authority is to be provided with key extension staff for maintaining better coordination between the project management and DOA. 16. Consultants and Bank Performanca. In 1976, when the Stage II Project was prepared and appraised, it was accepted by both the consultants and the Bank that the water supply, to be provided under the treaty with India, would be reliable, predictable and ample for the Stage I and II areas, as well as sufficient for further expansion into the Stage III area. No assessment was made of how the Indian Gandak project, from whose tail-end water was to be derived, performed in practice. In fact, the supply actually provided before the Don Canal failed completely, was unreliable, and NEC on average re eived only about 56% of what was expected. The problem of operation and management of limited, unreliable supplies should have attracted more attention. The small groundwater component was included without an adequate technical and financial base. The root causes for the failure of groundwater development in the area were not intensively investigated and have still not been identified. 17. At appraisal, the Bank advocated smaller (8 ha) chaks, (also for India irrigation projects), assuming that the smaller the chak the easier the management of the system. This assumption was not adequately tested through simulations of system operations and it proved to be incorrect. The Bank supervision concentrated mainly on logistical problems, disbursement, budgeting and procurement related to physical implementation. The risk that the riparian country would not be able to fulfill the water treaty obligations was not adequately assessed, nor was the possibility addressed that the Gandak Project might not be physically capable of meeting the treaty obligations. Supervision failed to emphasize sufficiently the increasing difficulties of managing the system during the brief period when some Don Canal water was available. It should be noted that during supervision the management difficulties of regulation down to 8 ha chaks were only beginning to be recognized by the Bank, in Nepal as well as in other countries in the region. 18. Roxrrcwer PQrformnnes. HMGN had difficulty in obtaining competent contractors, and suffered serious logistical problems involving the national shortage of most construction materials. There was a reluctance to deal firmly with inadequate contractor and consultant performance. However, after the failure of the Don Canal, considerable enterprise was shown in arranging temporary supplies from some of the small rivers in the project area. 19. Agricultural PArformance. The agricultural performance data for the surface system produced by local consultants show kharif production for 1987,

15 -5- Lb after the project was crippled by the 1986 failure of the Don Canal, with no flow from the main source, comparable with the SAR forecast, reflecting mainly favorable monsoon rainfall in the period and capture of temporary water sources. As may be expected, however, the rabi production was much less. The groundwater facilities remained essentially unused. 20. Iate of Return. This project was a time slice of the NEC command development and should be viewed in this context. The main benefits of the project were expected to come from the water supply provided for early planting and supplementary irrigation during the kharif, and full irrigation during the rabi. The economic rate of return (ERR) analysis done at appraisal assumed that the Don Canal would deliver water according to the treaty. However, failure of the Don Canal has limited the initial impact of the project. If, after repairs are completed in mid-1990, the Don Canal provides water in accordance with the treaty, farmers should be able to realize the expected potential. The project ERR, estimated at appraisal at 21%, has been reestimated for this report at 16% (the ERR calculated in the Borrowers' PCR was 15%, but did not follow standard Bank practices). It takes account of the interruption in Don Canal water supplies between However, it assumes that expected water supply will be forthcoming from the Don Canal under the treaty with India, and that the distribution system will be suitably modified under Stage III; the cost of which (US$200/ha) was included in the ERR calculation. Continued operation with the unmodified system would yield an ERR of 14% which is assumed in this report to be the best present estimate of the project's ERR. Summary of Principal Flndings 21. Water Supply to the NEC. Initial achievements of the project have been severely limited due to disruption of water supplies. However, the investments will be useful when the Don Canal supplies are restored. The appraisal assumed that the treaty water rights would be sufficient to guarantee the water supply, and did not take into account the physical reality of supplying water to the tail end of a large Indian system with hundreds of illegal outlets. In addition, the Don Canal passes through the foothills of the Sumasar Range with numerous massive drainage crossings which are liable to flood damage. The Canal's record of performance showed erratic and uncertain supply even when it was nominally in full service. For the years prior to the failure, deliveries amounted to about 56% of the scheduled volume, and the number of closures averaged 191 days per year against the scheduled closures of 45 days per year. The flow in individual weeks sometimes fluctuated widely between 50% and 100% of scheduled rates. In August 1986, a flood destroyed some of the drainage crossings and no supply has been given to the head of the NEC since. The repairs are scheduled for completion in mid The Water Management concept. Following the accepted standards of the period, Stages I and II were to supply water on demand to 8 ha chaks. Operation of the project before the Don Canal failed, and experience with similar projects in India has shown that such systems are very difficult to manage. This has been rigorously confirmed by work on the National Water Management Project in India, and an evolutionary development process over the past six years has identified the parameters of maneageable systems. The NZIDP system is being modified to comply with these simplified concepts under the current Stage III project. Even with the simplified system, a management plan designed to cater for the stochastic nature of the source will have to be very carefully formulated, and should have been the basis for system design originally. 1 ERR analysis made at PCR preparation is in the Project File.

16 Yhm Grnuntsmr re^pnant. As indicated, the groundwat4l component was abandoned and/or not completed. 'the history of unreliable behavior and failure of existing tubewells was not sufficiently addressed during project implementation. About 50% of the wells in the nearby Birganj Tubewell project have suffered screen collapse. Seeing the failure rate of other Government tubewells in the area, farmers were unwilling to accept any liability for a private venture. The unreliability problem is being addressed in more detail in the Stage III follow-on project. The shallow tubewells also did not attract farmer participation, mostly because of the high financing costs which were not adequately analyzed ahead of time. *essona LAarnad 24. The main lessons learned are that: (a) Treaty water rights do not necessarily guarantee the physical integrity of the water supply. A critical evaluation of the reliability of the surface water source should be done during preparation and appraisal. (b) The accepted operational specification of the period, which required on demand delivery to 8 ha chaks, was inappropriate for Nepal and proved impossible to implement in practice. Operational plans should: be fully specified and agreed upon hefore system design; provide the basis for system design; and be consistent with physical and institutional capacity to implement them. (c) The causes of technical failure of nearby tubewells in the region should have been investigated. The high failure rates led co a lack of confidence among the farmers which precluded the planned private deep tubewell development. (d) The experience with the shallow tubewells indicates that the financial viability of investments should be carefully assessed at preparation/appraisal, and where justified, financial terms should be adjusted to make the investments more attractive to farmers. Components which are not financially attractive should not be supported, as the farmers are unlikely to be interested. (e) Formulation of effective Water User Groups is impossible with an inadequate and unreliable irrigation supply. (f) Under conditions like Nepal's, agricultural extension services should be included under the irrigation project, until the respective government department nationwide is proven strong enough to provide adequate extension support.

17 1 ~~~~~~~~~~~-7- PROJECT COMPLETION REPORT NEPAL NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE II PROJECT (Credit 856-NEP)

18 -9- NARAYANI ZONE IRRIGATION DEVELOPMENT STAGE-II PROJECT Summary and Conclusion 1. Narayani Zone Irrigation Development Stage-II Project is follow-on project of its Stage-I f.nanced by International Development Association (IDA). It was to develop the remaining 12,700 ha deleted froa the Stage-I project. It also included the upgrade of irrigation and drainage infrastructure in area of Stage-I. In addition, it proposed to introduce a pilot private community tubewell scheme. The project was appraised by IDA in September Estimated total cost of the project was US$17 M and the project was financed by IDA credit of US$14.0 M. The project became effective on November 23, 1978'. Expected completion date was June 30, 1982, and closing date, December 31, Start of the project was not prompt due to delay of Siage-I project completion. Progress of project works particularly for civil and building works was far behind the schedule committed in the appraisal. This was caused mainly by the poor performance of contractors procured through local competitive bidding (LCS) contracts and the scarcity of essential construction materials. A number of additional works proposed in course of implementation also prolonged the construction period. Stress of project works were mainly placed on the improvement of Nepal Eastern Canal (NEC), construction of irrigation system is surface irrigation areas and buildings. However, achievements of on-farm facilities including drainage improvement both in surface and groundwater irrigation area were considerably behind the appralsed target for the reasons of farmers' reluctancy in sharing lands for facilities and in participating in self-reliant constructioa works. 3. The project was virtually complete in the mid-1986 behind the schedule by four years. The total expenditure as of the mid-1986 was NRs M. (US$17.2 M.) against the appraised cost of NRs a. at the 1978/79 constant price. IDA credit was not disbursed in accordance with the initial schedule due to delay In progress and 10% amount of credit still remained at the aid However, the remainder would be fully used for the unexpected urgent remedial works of NEC severely damaged in 1986 monsoon. 4. The sain constralnts to the operation of the project was the erratic water supply from Don canal (India) to NEC. In spite of the disturbance of the lrrigatlon, however, the cropping coverage of the main crops in the area, paddy and wheat, has reached about the objectlve levels. While, institutional component of the project including formation WUGs, participation of farmers ln the project management and training has been still left unsatisfied. The RRR of the project was re-estimated to be 15X compared with appraisal of 22%

19 -11- Background NEPAL NARAYAN1 ZONE IRRIGATION DZVELOPMENT STAGE-I1 PROJECT PROJECT COMPLETION REPORT I. INTRODUCTION 1.01 The economy of Nepal predominantly depends on agriculture. The agriculture engages about So% of the econoaically active population and share of agriculture sector in GDP is about 59% in 1984/65. Despite the fact that agriculture plays a crucial role In the uplift of Nepal economy, productivity in this sector is most wretched giving low income to the farmers. In 1960s, production of foodgrains as whole reached from 3.15 aillion tons to 3.7 aillion tons. But the production level of foodgralas in 1970s was stagnant even apart from inevitable fluctuation due to erratic monsoon climate. Sven during the period of the Sixth Plan agricultural production was more or less stagnant. The foodgrain production per capita has been kept hardly exceeding 260 kg that is slightly lower than average per capita consuaption, without leaving room for surplus. Inadequate Input supplies (especially fertilizers), poor price incentives, and poor extension services contributed to the such productivity stagnant in foodgrains, but even more important were the poor monsoons, since the country relies predominantly on rainfed agriculture. The annual growth rate of GDP has been largely affected by the monsoon of respective years accordingly. Thus, expansion of irrigation under the given cliatic conditions is a key towards the stable development of Nepal econoy. and national welfare Of about 540,000 ha having some form of irrigation in Nepal, about 405,000 ha or 7S% exlts in Terai. The Government of Nepal (HMGN) started the construction of some irrigation schemes from 1920s in Terai with assistance of the Indian Government (GO) as recompense to Nepal for water rights for much larger irrigation schomes in India. These were based on river diversion with adoption of similar deslgn prevailing in India. The idea was to spread water relatively thinly over the largest possible area so as to provide drought insurance to kharif crops. The distribution system was developed only to the ha block level and its downward facilities were exp-eted by farmers construction. This consequently resulted in unsatisfactory service comaand. In view of favorable conditlons in topography and natural resources, irrigatlon projects are to fit into strategy of intensive development of agriculture in Terai which had a higher productive potential, promised quicker returns. It is also lss difficult and costly to develop than agriculture in the hilly area. Incomplete irrigation distribution system. however, has been major constraints to exploiting high agricultural potential of Terai.

20 The first project undertaken with IDA assistance was the Birganj Irrlgation Project (Narayani Zone) (Cr. 313-NEP, US$6.0, 1973). Its objective "as to coaplete and upgrade the irrigation and drainage systen on 28,700 ha of the 37,400 ha commanded by the Nepal Eastern Canal (NBC) and to provide groundwater Irrigation to 2,700 ha north of the NEC command area through public tubewell developnent (the Birganj Groundwater Scheme). Because of implomentation delay and thus considerable cost overruns, the surface component was rduced to 16,300 ha in November 1973, which was designed Stage-1. The reduced project was completed In Formulation 1.04 The IDA's contlnued participatlon In the Narayani Zon-a (Blrganj) Irrigatlon Development Project (NZIDP) was to develop the remainlng 12,700 ha deleted from the original project. The project called Stage-I project, however, Included the upgrade of irrlgatlon and drainage infrastructure in area of Stage-L as a result of experience gained from implementing and operating the Stage-1. It also proposed to Introduce a pilot private community tubewell scheme aimed at rellving the strain on public funds for irrigation development. In addition, the pilot scheme for intensifying agrlcultural extension services started in two Districts under Stage-I was to be expanded to cover six Districts and funded under the project. The project consultants for Stage- I (Nippon Eoei) assisted HEMGN in preparation of the engineering component of the project. Identification. Preparation and Appraisal 1.06 Project appraisal took place in September During appraisal the causes of the previous cost overrun and the available implementation capacity were reviewed in particular to deteraine an optlal design for the project, with the requisite organizataon of agricultural extension and training components,.better cost estimates and a realistic construction period. Finally it was agreed that HMGN: (a) established and maintained adequate accounts; (b) delivered water on a regular basis to e.ach tertiary canal command when Water Users' Groups (WUGs) be formed and field channel be constructed; (c) prepared a comprehensive OhM manual; (d) provided the NZIDP with adequate staffing; (e) prepared two comprehensive evaluation studies of the project and project completion report (PCR); (f) started to collect water charges within one year after completion of the work in each irrigation block; and (g) constructed irrigation distribution channels, transmission lines and access tracks for private comaunity tubowell scheme free of cost to farmers. It was also agreed that EOMN recruited a firm of engineering consultants includlng employment of qualified agricultural consultant for extension and training. IDA agreed to disburse credit for the community tubewell scheme subject to financial arrangements made between HMGN and Agricultural Development Bank ot Nepal (ADBN). Negotiations for credit were held in Washlngton in It was presented to the board on and approved.

21 -13- The Project Area II. THE PROJECT AT APPRAISAL 2.01 The Project extends along the NEC from Pipra to the 8agmati river (Map IERD 19549) and includes a part of its command area, covering about 12,100 ha, between Blrganj to the west and the Arwa river to the east, and bound by the NEC to the north and the Nepal-Indian border to the south. In addltion, a private community tubewell scheme covering about 800 ha between Birganj and Slar& (Map I^RD) are Involved In the Project. There are about 216,000 Inhabitants in the NEC command area of which about 69,300 live in Stage-Ir area. The total number of household in Stage-Il area is about 12,600. with an average family size of 5.5. Para households account for about 85X of the total, of which lese than 10% are landless. The largest and most urbanized area is Birganj whtch has a population about 60,000. The average farm size of the NEC command area is 1.1 ha. About 64% of the holdings below 1.0 ha account for only 28X of the cultivated area. The area is under relatively intensive cultivation based on staple food crops. Main crops are paddy, wheat and sugarcane. Cropping intensity Is about 160% of which paddy occupies 90X of the area during the wet season. Project Objective* 2.02 The objectives of the Project were to: (a) improve the reliabillty and amount of water deliveries to farms and establish farmers' confidence in the irrigation system; and (b) accelerate agricultural development and increase farm incomes as well as rural employment. To achieve the above objectives, the p&jject was deolgnod to: (a) improve the operational control of the NEC as its security againt damage by floods; (b) expand the area of the irrigation distribution systez capable of delivering regulated water supplies to groups of farms of 7.5 to 10 ha; (c) Improve dralnage of farms and roads; and (d) strengthen agricultural extension services and improve the linkage with research and training. Project Description 2.03 The main components of the project were: (a) construction of additional structures for improved water supply control, cross-drainage, protection against floods along about 52 km of the NEC between Birganj and the Bagmati river, and improvement of the NEC service road (about 79 km) between Pipra and Bagmati river; (b) construction of the irrigation distribution and drainage systems down to farm level and canal service roads In about 12,700 ha of the NEC '.omaand between Birganj and the Arwa river;

22 -14- (c) upgradlng of surface drainage systoms, irrigation facilitls and canal service roads in about 16,000 ha of the NBC coaaand between Pipra and Birganj; (d) installatlon of about 25 tubewell and pumps, irrigation channels, access roads and suppoet to ADBN for providiag loans for an 800 ha pilot, privately-owned communlty tubewell scheme; (e) construction and operation of field trials for waterlogging control, low cost roads, and a pilot mtcro-hydroelectric station; (f) provisioa of intensified agricultural extension services, including adequate staff, for six Districts In the T-rai (Rupanddhi, Parsa, Rautahat, Sunsari and Morang); (g) provision of training for engineering, agricultural and administrative staff; (h) provlsion of engineering operation and maintenance equipment with vehicles for agricultural extension services, spare parts and training equipment;,') construction of bulldings for project agricultural and engineering operation and training, staff housing and agricultural storage; and (j) provision of technical services, including project consultants, air photography and mapping for further development of the NBC command area. Cost Estlate 2.04 Total project cost was estimated at US17T M with a foreign exchange component of US$9.0 M or 54X of the total as follows: Items Local Foreign Total Exchange Civil works and buildings Equipment and vehicles Technical services Establishment Contlngencles Land acqulistlon Taxes ad duties Total project cost

23 -15- Financing 2.05 The IDA credit of US$14.0 M equivalent was to finance the full foreign exchange cost of the project (USS9.2 M) and about 62% of local costs, or about 82% of total project costs. HMGN was to contribute most of the remainder, with ADBN and farmers providing US$0.1 M and US$0.3 M, respectively. The cost of community tubuwell scheme to the farmers excluding costs for irrigation dlstrlbution channels, transmission lines and access tracks was estimated to be about USS0.2 M including price contingencies. These cost was to be financed by the farmers, and each obtained a loan from ADBN proportional to his size of holding under the command of a tubewell. The IDA credit was expected to be disbursed by December 31, about one and halr (1.5) years after project completion. Procurement 2.06 All civil engineering contracts were to be on Local Competitive Biddlng (LCB) contract basis because of several small contracts which might not attract large foreign contractors. All engineering buildings were to be constructed by LCB contra^ts under the supervision of project staff. In addition, agricultural extension buildings in the six Districts were to be carried out by LCB contract under the supervision of engineering staff of the three IDA-assisted irrigation projects; NZIDP Stage- II Project, Shairawa-Luabini Groundwater Project and Sunsari- Morang Irrigation and Drainage Development Project Equipment and vehicles for construction, operation and malatenance were to be procured through International Competitive Bidding (ICB), contracts. The project were also to procure equipment and vehicles requlred for the agricultural extension. services in the six Districts through ICB contract. A firm of engineering consultants was to be employed under the procurement guideline of IDA. Agricultural consultants for extension and training were also to be recruited to the project by NZIDP. Implementation and Organization 2.08 The project was to be implemented for three and half (3.5) years from January 1979 to June 982. The engineering preparations had been sufficiently advanced at the tiae of Bank's Appraisal to peramt start the construction works promptly after the effectiveness of credit agreement. The iaplementation of the project was responsibility of Narayani Zone Irrigation Development Board (NZIDB), whlch was a seum-autonomous agency based in Kathmandu composed with members represented from Ministries of Finance, Water and Power and Land Reform, the Planning Commission, the Department of Agriculture (DA), the Department of Irrigation, Hydrology and Meteorology (DIHm), Regional Directorates of DIEH and DA. The chairman of NZIDB was the Secretary to the Government's Mianstry of Food, Agriculture and Irrigation and the General Manager (GM) of the NZITIP acted as

24 -16- the secretary to the NZIDB. Benefits and Justification 2.09 It was anticipated that at full development (1988), the annual productlon increase duz to the project was estimated at 20,200 tons of foodgrains, 14,800 tons of sugarcane, 300 tons of oilseeds and 4,300 tons of vegetables. Farm employment was to increase by about 1,000 man-years at full development. The project was also to generate about 1.7 M man-days of construction employment during the construction period. The project was justified feasible and its econouic rate of return (ERR) was 22%

25 -17- General III. PROJECT IMPLEMENTATION 3.01 The Development Credit Agre*eent for the project was signed between HMGN and IDA on November 27, It wa*. expected that the project would start Immediately after the agreement, but actually from the middle of 1979 due to delay of Stage-I Project completion. Progress an civil and building works as the major components of the project was considerably behind the schedule committed in the appraisal. The a&in reasons for slow constructlon were the poor performance of contractors procured through LCS contracts and the scarcity of essential construction materials such as bricks, cement and steel. In addition, it was proposed in course of implementation to carry out a number of additional work to respective project components for the proper water management. This consequently resulted in cost over-run and delay in construction works. Disburse of credit was extended three times and finauv, to December The project construction virtually completed by the end of Physical Works 3.02 Improvement of NEC: The lmprovesent works of NEC were to include: (a) construction of 13 additional regulating structures to control flows throughout 52 km long of the NEC commanding Stage-I1 area and the Tall area (to be named Stage- 1II); (b) strengthening of 10 km long embankment on the NEC left bank; (c) provision of ten additional dralnage inlets aad culverts to prevent breaches and ensuring canal closures; (d) construction of three oscape and conveyance channels; (e) construction of gravel metalling with an 3.5 a wide on the right bank of the NEC for 52 km long up to the tail; (f) provision of six cart/foot bridges with access road linking with villages; and (g) construction of an 8 km long flood enbankment near the Sagmati river to prevent recurronce of damage caused by monsoon flooding. Further to the above committed works in the appraisal, various improvements to existing structures throughout the entire reaches of the NEC were added to the project works. Most of the works committed In the appraisal were completed by the year of 1982/ Additlonal works to improvement to NEC are those added to committed in appraisal including strengthening of left bank from 10 km to 57 km, installation of drainage inlets and culverts from 10 nos. to 17 nos., gravel metalling on right bank from 52 km to 72 km and cart/foot brldges with access roads from 6 nos. to 10 nos. (Table 1). Further additional works were mainly river training works adjacent to NEC such as aria and Bheda, downstream protection of NEC structures and miscellaneous restoration to canal structures. The constructloan of telephone line of 16 kk long from 59 kard to 76 kmrd was also included. The total expenditure for this component as of ending flscal year 1985/86 was NRs.6S.6 N against appraised cost of NRs.22.3 M at 1978/79

26 -18- constazat price. The annual progress of the works including additional works in terms of annual expenditure in percentage was as follows: 18/79 79/80 80/81 81/82 82/83 83/84 84/85 85/861 Total (1) (2) (3) (4) (5) (6) (7),8) Appralsal target Actual achievement S The higher cost is attributed to increase of work items as well as increase of labor cost and prlce of major construction aaterials Development of Irrigation System and Drainage Improvement. This consists of two components in appraisal, one is the development of irrlgatlon system and the other drainage improvc-ment. The works for development of Irrigation system were to lnclude: (a) iprovenent of secondary canals of about 40 km long branched off from the NEC and commanding respective six Blocks under the Stage-I1 area (12,700 ha), mainly by the addition of control structures; (b) extension of distribution canals (main and branch secondary canals and tertiary canals) amounting to about 360 km to serve groups of farms covering 7.5 to 10 ha for the entire Stage-I1 area; (c) provision of about 6,500 control structures on these distributlon channels; and (d) construction of service roads of about 360 km along the distribution channels. In addition, structural iaprovements were to be made throughout the Stage-I area (16,000 ha). which Included provision of improved water level control at NEC, additional erosio, control at regulating structures, improvement ot tertiary cana. turnouts to eliminate leakage. strengthening of service roads and repair of some damaged structures of the Tilawe supplementary system in Blocks 5 and The works for dralnage improvements were to include the construction of about 250 km dralns with about 2,000 structures throughout the Stage-II area (12,700 ha). In addition, additional drainage control structures and culverts were to be constru*ted In the Stage-I comand area of 16,000 ha as necessary Th- construction of irrigation system for six Blocks (12,700 ha from 7 to 12) In Stage-I1. area started from the year of 1918/79, but Its progress was so slow that facilities completed by the target year of ending 1981/82 were those covering only about 0S of area (6,240 ha). The main cause of slow progress was poor performance of local contractors procured through LCB concracts. The construction was delayed by three years and flnally completed in 1984/85. The developuent progress of irrigatlon system was as follows (progress of respective

27 -19- Blocks in Table 4): 78/79 79/80 80/81 81/82 82/83 83/84 84/ (Accumulatee ha) Appraisal target 2,240 6,460 10,690 12,70Q Actual achievement 810 2,380 4,460 6,240 8,130 10,990 12,700 (M) (6.4) (18.7) (35.1) (49.1) (64.0) (86.5) (100) The quantities of structural construction were modified from those committed in the appraisal based on the detailed project review made ln 1982, 1983 and These were relatively behind the proposed number in the appraisal such as isprovement of secondary canals from 40 km to 35 ku, extension of distribution channel from 360 km to 299 km, construction of control structures from 6,500 non. to 1,816 nos. and provision of service roads from 360 km to 264 km (Table 1) In Stage-I from Blocks 1 to 6, about 800 additional structures on canals and roads and a number of improvements to existing structures were also proposed for construction in the detailed project review in 1982, 1983 and 1985 in accordance with concepts of appraisal report. Most structures and improvement works were completed by 1985/86 (Table 4). The construction of drainage canals and those contrvol structures were to be carried out concurrently with the 4Avalopment of irrigation system. However, there have been virtuw3ly no achievement, progress less than 0l of proposed provisio& in appraisal, due to farmers' resistance to acquire the right of way for canals and structures. The achievement of drainage devw opment was only 19 km drains in total against the 1,900 km rroposed and 136 nos. structures against 2,000 nos (Table 1) The annual progress of -ihe Development of Irrigation System and Drainage Improvement Inc-luding additional works raised during the implementation period tn terms of annual expenditure in percentage was as follows: 78/79 79/80 80/81 81/82 82/83 83/84 84/85 85/86 TotaL (1) (2) (3) (4) (5) (6) (7) (8) Appraisal target Actual Achievement The total expenditure for this component as of ending fiscal year 1985/86 was NRs.59.9 M against appraised cost was NRs.51.6 M at 1978/79 price.

28 Farm Group Development: In continuation of successt.l On-farm Development in the Stage-I area (16,000 ha for Blocks 1-6). flold channels from tertiary outlets, as well as drains, were to be Installed by the cooperative action of local labor under the supervislon of project staff. However, the construction of field channels and drains was extremely slow and there was virtually nothlng in achievement. Fiold channels of only about 22 km In total. 17 km and 6 3m ln Block-? and Block-8 respectively were constructed against 1,900 km by the end of 19S5/86 and no constructlon was done for field drains (Table 1). Thl was caused by slower convince of farmers in accepting the need of field Irrigation system. They were also reluctant to yield any patches of their lands for construction of field channels and drains. To encourage the on-farm Development of the project, NZIDP established a Water Management Division in mid to organixe effective Water Users' Groups (WUGs) and assist them in Implementing the construction of field channels. The prlnciple of on-farm facilities construction should be cooperative action by the participating farmers. if the farmers, group continuously fails to conduct such facillties, however, the work would be done by the project and the farmers would be called upon to repay project authority the full cost as due unpaid of the land revenue. No expendlture took place for this component so far despite of NRs.4.8 N being allotted In the appraisal cost estimate which were to be used for the Pilot Works of Farm Group Development Communlty Tubewells Scheme: To reduce the investment burden on ENGN for groundwater development, the project was to Install up to 5 deop, privately owand community tubewells to Irrigate about 120 ha (about 40 to 80 farms) each, and 20 or more similar shallow tubwells to irrigate about 10 ha (4 to a farms) each, in the vicinity of the Stage-I groundwater pilot development area where surfaae irrlgation development was no feasible. The scheme was to explore and develop the farmers' capabllty to finance and operate irrigation tubewells theaselves, with some assistance from ADBN and the project staff. The maln features of both tubewells proposed in appraisal were as follows: Deep Tubewell Shallow Tubewell Type and diameter Steel cased 25 cm dia. Steel cased 10 cm dia. Depth about 150 m about 30 a Expected dlscharge 80 llt/sec 10 lit/sec Power (electric) 40 kw 2.5 kw Regulatlag pond 2,000 cum A puaphouse with necessary accessories was to be provided at each well, as well as all irrigatloan and dralnage structures. The field channels were to be constructed by cooperative action of labor under the supervisloan of project staff The action for Community Tubewell Scheme was delayed three years behind the appraisal target. The development of deep

29 -21- tubowells were excluded from this scheme in 1982 due to dlfficulty In arousing interest from farmers to finance and operate deep tubewells largely be themselves. Such their reluctancy wms mainly caused by un-satisfied achievoeent of a rew deep tubw_lls Installed and operated by the Government. The project designed 50 shallow tubewells based on the results of deep tubewell scheme tnder the Sirganj Irrlgation Project (IDA Credit 373). A tender of rcb contract for drilling 50 shallow tubowells was made In 1982 and a Nepalese contractor was awardod in 1983 after repeated tenders. However, thls contractor failed in performing the work and the project terminated the contract without gettlng any successful drilling at all. To review and sodify if any of the first design based on deep tubewell concepts, the project consultant (Nippon Koei) studied the shallow tubewell for an area of 20,000 ha in Kalaiya (12,000 ha) and Siara (8,000 ha). The field investigation and testing were also made. Meanwhile, the project called tender for 65 shallow tubewells (15 tubwells added) on ICE contract basis and two contractors were awarded. They started the drilling from 1983/84 and completed lt by the end of Pump houses were constructed separately from the drilling works by local contracts, starting from 1985, but its progress was so slow that only 25 pump houses were build by the end of 19as/86. With regard to the electrical and mechanical works, no progress was obtained after two tenders we made in A few farmers have Installed pumps (hand or diesel engine driven) on these wells, but most are capped and not in use. The progress of Coamunity Tubewell Scheoe in teras of annual expenditure in percentage was as follows. s8/79 79/80 80/81 81/82 82/83 83/84 84/85 85/86 Total (1) (2) (3) (4) (5) (6) (7) (8) Appraisal target T Actual achievement The total expenditure for this scheme as of ending fiscal year 1985/86 was NRs.4.2 M against appraised cost of NRs.3.6 M at 1978/79 constant price fu.ldlngs and Facilities: The project was to bulld: (a) eight low-cost irrigation sub-centers including offices, stores and hous.ing. laboratory and a workshop; (b) 30 subtraining centers and about 120 quarters for agricultural extension services in the six Districts (IDA-assisted irrigation projects in the Terai for Parsa, Sara, Rautahat. Rupandehi, Sunsari and Morang Districts); and (c) six storage facilities of 50 to 100 tons capacity for agricultural inputs. In addition, telephone line along NeC was to be extended by 17 km from 62 kmrd to its tail.

30 Instead of eight irrigation sub-centers proposed in appraisal, the project intended to construct 12 O&M bulldings in Black-I through Block gate operator's houses along NEC and sone improvements of two camps at Tilawe and Lal Bakeya. Except four OaM bulldlngs in Blocks-1, 2, 5 and 6 which were cancelled to construct, all the buildlngs were constructed from 1979/80 to 1986/8?. light agricultural tralnng centers in the project commanding area (flve in Sara DIstrict, two In Parsa District and one in Rautahat District) and 56 quarters in total in three Districts were to be constructed by the project. Except two training centers of whlch constructlon have been suspended due to local adainistrative troubles, six center buildings and 48 quarters were completed by mid In addition, additional buildings in Parawanipur Agricultural Station were also constructed under the project in Construction of six storage facilitles called "Grain Store' was started In 1979;80 and continued with very slow progress until the mid Two grain stores In Blocks-IO and 11 are still incomplete. Additional telephone line was constructed during a period of 1982/83 to 1983/84. However, all the line including that constructed under Stage-I project from intake to 62 kard of NEC was entirely stolen in a year after coupletion. No communication facilities are now availablo along N8C. The annual progress of works excludlng telephone line extension in terms of annual expenditure in percentage was as followst 78/19 79/80 80/81 81/82 82/83 83/84 84/85 85/86 Total (1) (2) (3) (4) (5) (6) (7) (8) (X) Appraisal target 28.6 ST Actual achievement T The total expenditure for buildings as of ending 1985/86 was NRt 19.8 N only for Narayani Stage-I project against appraised cost of NRs.8.4 M including that for Bhairawa-Lumbini Project of NRs.1.1 M at 1978/79 constant price. The higher cost is attributed to increase of building number as well as increase or labor cost and price of building materials. Procurement of Equipment and Vehicles The project was to provide equipment, vehicles and spare parts needed for supplement those procured under Stage-I: (a) for survey and supervision of construction including materials testing; (b) ror operation and effective maintenance of the works including canal telecommunication facilities; (c) for agricultural extenasion and tralinng; and (d) for technical services as well as workshop equipaent for maintenance and repalr. Procurement was delayed about three years behind the schedule proposed In appraisal and started from 19al/82. It completed by 1984/85 and expenditure progress In percentage was

31 -23- as follows: 78/79 79/80 80/81 81/82 82/83 83/84 84/85 85/86 Total (1) (2) (3) (4) (5) (6) (7) (d) - _) f-_ Appraisal target Actual achievement The total expenditure for equipment and vehicles was NRs.42.6 M including a drilling rig procured for Shairawa-Lumbini Groundwater Development Project against appraised cost of NRs.33.6 M at 19T8/79 constant price. The list of equipaent and vehicles procured is given in Table 5. Special Studies Undertaken 3.15 Waterlogging: It was proposed to monitor the fluctuation of groundwater table in low-lying areas of NEC command to provide early warning of any hazard caused by waterlogging. For this, about 70 small observation pipes were to be installed at selected sites in the irrigated area and observation groundwater level was to be done. In addition, to test the draw-down effects on high watertables for the control of waterlogging, five deep tubwells and 20 shallow tubewells were to be installed in this area. Tubewells wore to be operated by electric motor and water was to be discharged into the NEC system. 50 existing wells for observation of groundwater level installed in 1977 were used for this purpose and monitored till However, no effects on waterlogging were found and this study item as well as construction of deep and shallow tubewells were deleted from the project in Soil Stabilization Trials: The project was to investigate the feasibility of using hydrated lime to stabilize and strengthen compacted soils in canal service roads and tertiary canals. Laboratory trials to test strength of soil mixed with lime were done in 1981 with assistance of the project consultant (Nippon Koei). However, results obtained from the laboratory tests were not satisfactory to introduce hydrated lime stabilizatloan lnto the project and lime available was of a poor quality. This was deleted from the project accordingly Micro-hydroelectrlc Development: It was proposed to construct a pilot micro-hydroelectric station at the Tilawe barrage, alaing at help for rural electrification and groundwater development and also possibly for small scale fertilizer production. A feasibility study rade by the project consultant (Nippon Moai) In April 19T9 concluded, however, that the microhydroelectrlc development at the Tilawe barrage was not feasible for the resons: (a) power rate of the Tilawe alcro hydroelectric development was the hlghest compared with other

32 -24- alternate diesel plant and extension of a 11 kv transmission line froa the central Nepal power supply system; (b) poor quality of power; and (c) shortage of river flow of Tilawe available. This proposal was deleted from the project coaponents in Preparation for Stage-III Project 3.18 Aerial Photography and Mapping: In the tall reach of the NEC command, an area of about 10,000 ha remained to be covered by aerial photography and 1:5,000 scale maps. Prior to commencement of its development under a future project (Stage-III Project), provision was made for this survey work under the Stage-I project. The work was to be done in the year of 1984/81 in appraisal target but actually carried out in 1983/84. It was done by a UK's survey company (Hunting Survey Ltd.) and cost expenditure was NRs.4.2 M against appraised cost of NRs.1.8 M at 1978/79 constant price ftasibility Study: Expected commd area of Stage-III project was about 8,700 ha and located in the Rautahat District along the tail reach of NEC. The agricultural development in Stage-ITI project was to raise the production level of paddy, wh&at, sugar cane and other vegetables through perennial irrigation, intensive use of lnputs and the organization of marketing outlets. This ltograted section would result in a increase in production of 28,000 tons foodgrains. The project works was to include further improvement of NEC, provision of irrigation and drainage facilities, flood protection works and on-farm structures, construction of buildiags and procurement of equlpment. The project consultant (Nippon Koei) prepared a fealsbillty report in 1984, giving a falrly high ERR of 23.3X. This study report was updated by in 1986 for proceoding with the implemetatlon Detailed Design: In successlon of IDA appraisal for Stage-III project made in November/December 1985, the project advanced the detailed design from the end of The project consultant (Nippon Koei) was appointed for the detailed design work. The design consisted of improvement of NEC, irrigation and drainage system in Blocks-13 to 15, flood protection and river training, improvement of service roads and restoration of the Tilawe barrage. In addition, upgrading of irrigation distribution network in Stages-I and rr areas (28,700 ha) was also added to the project component of Stage-III pro,ect. This improveents to exlsting system would cover rehabilitation of control structures to be ungated on major dlstribution channels In each Black and provision of ungated outlets on tertiary canals commanding about 30 ha unlt area. Purther outlets for serving 4 ha sub-unlt area are also constructed and thus the project would introduce a realistic rotational irrlgation system under the new water management concepts. Except the deslgn of upgrading of Stages-I and II, all the detalled deslgn includlg preparation of tender drawings was completed by the mid-1986.

33 -25- Design Standards and Quality of Works 3.21 Most deslgn standards had been established during the iapleaentation of Stage-I and there was no substantial changes in it. Unit disecarges of distribution channels were taken at 0.75 lit/sec/ha for main and secondary canals commanding Blocks and at 1.5 lit/sec/ha for tertiary canals. Average command area served by a tertiary canal in Stage-II was 33 ha which was little bit improved froa Stag-I of 36 ha. Deslgn discharge of drainage canal was 2.5 lit/sec/ha estimated by water balance calculation in an unit area of paddy field. Drainage canal can accommodate up to 3.1 lit/s.c/ha using free board and this appears to be quite adequate where drainage network be successfully provided. Thickness of gravel metalling on service roads along NEC increased by 10 cm from 20 cm to 30 ca. Service road paved in Stage-I was strengthened accordingly. Construction Standards and Quality Control 3.22 The structures for the irrigation, drainage and road works were mostly designed in brick except precast flume applied to groundwater scheme area and standard concrete pipes extensively used for crossing structures. Brick structure is appreciated in saving ceoant which was often in short supply and easy construction without large scale plant, but the quality of the bricks zanufactured in local kilns was very poor. Quality control of the works was also difficult because many small works were scattered over a largo area. In addition,, local contractors lacked always operation fund, reasonable number of construction equipment and sufficient supervisory staff, which resulted often in termination of contracts due to extremely slow progress. Continuous construction supervlsion by project staff at site was available under guidance of project consultant and reasonable quality control and field test were regularly carried out before payment to contractors. It has been proved that recent cost of brick structure was higher than that of concrete structure depending upon the cement quantity mixed within allowable strength, and quality of bricks locally available have not been improved. It is recommended to use precast concrete structure extenslvely in Stage-III project. Consultants 3.23 In continuation of Stage-I Nippon Keel was appointed as the project consultant for Stage-1I project. The Contract between NZZDB and Nippon Koel was ade oan December 14,1978 as a form of amedmet of original contract for Stage-I. The Contract was amended three tles in 1982, 1986 and 1986 respectively due to extension of implementation period and detail deslgn of Stage- III project. 162 M/M was used by the uld Of these, 35 M/M was usd for Stage-! project (CredIt 373) due to delay of its construction works and 45 M/M ws used for detall design for Stage-III In 1985/86. The task of consultant was to provide: (a) In-sevvice training, advice and guidance to project engineering

34 -26- staff in project planning and scheduling; (b) design of works; (c) preparation of bidding documents and bid evaluation; (d) modern construction techniques; (.)J construction quality control; arad (f) sonitoring of progress and costs. The consultants input for Stage-II project was so small compared with 400 M/M used for Stage-I because project staff became considerably to manage the engineering works. The services provided by the consultant have generally been satisfactory. With regard to consulting services for ltensified agricultural extension and training in the six Districts, recruitment of agricultural extension and training consultants, which was proposed in appraisal report, was cancelled as HMGN concerned organization performed satisfactory ih this context. Other Issues 3.24 Iprovement Works for Birganj Tubewells: A pilot public groundwater development project, consisting of 28 tubewell systems and associated power supply system was implemented under the Birganj Irrigation Project (Credit 373). At the time of appraisal of the Stage-l project in Septeaber 1977, the tubewell systems were performing extresely well. Hfowever, by March 1982, the performance of the tubewell systems found to be deteriorated drastically due mainly to O&M problems. An element for rehabilitation and iaprovement of the 0&H of the Birganj tubewell systems wa3 therefore included under the Bhairawa-Lumbini Groundwater Project Stage-II (Credit 1316) with an estimated total cost of about NRs M. The work consisted of civil works including provision of buildlngs and mechanical and electrical works. The improvement works started from 1984/84 and most of civil work3 have been completed by the mid-l'86 except some alnor items. However, progress so far obtained of mechanlcal and electrical works was as slow as only 40X and these works have been suspended since July Urgent Remedial Works of NEC: On September 13 and 14, 1986 extremely heavy rain, about 530 mm for ten hours, at the upper reaches of NEC caused severe damage to the NEC structures on its upper part of about 19 km long. Two large syphons (Sikta and Uriya) were covered with mud and water though there were no structural damages. Many protective structures for canal against flood were seriously damaged and wash-out of embankment by overtop of flood at several parts were also taken place. NZIDP took ilsediate remedial action. IDA agreed with NZIDP to shift credit fund to urgent remedial works of NBC from those for *lectrification of shallow tubewells in Simra, which would be deleted from Stage-Il project, and additionally for redrilling of the *ight deep tubewells (or part of them) under Shairawa-Lusbini Groundwater Irrigation Project (Credit 1316) if necessary. NZIDP called for short-tern tenders oan LCB contract basis in December, contracts were a warded with an amount of about NRs.21 M In total. Contractors started the works prouptly and succesfully completed the remedial works by the end of April 1967.

35 -27- Project Cost 3.26 ProJ*ct cost as estimated at appraisal is compared below with actual expenditures: Actual Description Appraisal as of July,1986 (NR&.M) 1. Civil Works and Buildings (a) NEC improvements (b) Surface irrigatlon and drainage (c) Comsunity groundwater development (d) On-farm development t-) Buildings Sub-total quipmuent and Vehicles (a) Engineering (b) Agriculture Sub-total Technical Service Establishment (a) Engineering & Administration (b) Agriculture Sub-total Contingency. (a) Physical (b) Price Sub-total Land Acquisition T. Taxes and Duties Total Project Cost A detailed breakdown of the actual project expenditure by years against the appraisal estimate is presented in Table 2. The main reasons for the cost differences between actual expenditure and appraisal estimates are explained in paras Exchange rate of Nepalese Rupee against one US Dollar changed froa NRs in 1978 to NRs in With change of actual expenditure frou appraised estimate, credit fund were reallocated with IDA approval. Disbursement 3.2? Due to delay in construction works, actual disbursement of credit was so slow that only 45X of total amount was withdrawn at the appraised target by the end of Closing of disbursment was extended to the end of 1986, but still l0o of

36 -28- credit mount r.aln.4 undlaburs*d at the revised closing date. However, remalning amount would be fully consumed for the urgent remedial works of NUC taken place in 1986/87. Table 3 sumarizes dlabursements by accumulated actual semester-wise froa fiscal year 1979 to 1966.

37 -29- General IV. AGRICULTURAL IMPACT 4.01 Present evaluatlon of the agricultural impact iseather limited due to soveral reasons: (a) The agronole survey whlch had been conducted by APROSC in 1986 was not satisfactory and provided only partial information. Other survey, conducted by the Monitoring and Evaluation Section also provided limited lnformation. (b) The water supply In 1986/87 and 1987/88 was greatly dlsturbed due to flood damago to the Don canal. Water supply has been practically stopped in September 198a, and has not yet been restored. This affected the agricultural production seriously. (c) During the surveys (APROSC and M&Z Section) that provided the only available information to evaluate the agricultural impact, the irrigation was erratic. The project implemented temporary wator resource developmeat of various local rivers crossing NEC. Thus the yield levels do not reflect the actual potential yield levels of the project In spite of the disturbance of the irrigation, the cropping coverage of the maln crops in the area, paddy and wheat, as reached about the objective levels. However, yields especially of wheat were badly affected and this affected the overall agricultural production. Water Supply to NEC 4.03 The main factor that affected the agricultural impact of the project is the pattern of the water supply to NEC. This issue is separately discussed in Chapter VII in more detail. Cropping Pattern and Cropping Intensity 4.04 The proposed cropping pattern and cropping intensity of the SAR for Stage II, and the coming Stage III as reference, is presented in Table 6 together with the actual cropping pattern for years 1985/86 to 1987/88. The actual cropping pattern is about the same as the proposed pattern. Consequently, the cropping intensity has achieved the proposed levels of the SAR. Maintalinng tho desired cropping pattern and intensity for several years, including the cropping seasons of 1986/8? and 1967/88. is a signlficant achievement in view of the difficulties in the water supply. It is noted that farmers are ready to plant the main crops of paddy and wheat as their own risk, hoping for good rains. Thus, regardless of the effectiveness of the

38 -30- irrigation schedules, farmers tend to plant most of the area with paddy. The extent of wheat is more *ffected by the erratic lrrigatlon wlth coverage of 40 % in comparlson to a proposed 48 X coverage and over 50 X coverage as practiced in the Tubewells area. Crop Yields and Agricultural Productlon 4.05 The achelvement of crop yields and production is analyzed for the two major crops In the project: paddy and wheat, for which data Is available. The average crop yield and total production for Stage r area of 12,700 ha are given in Table 7. The main conclusions in regards to crop yield. and production are: (a) The crop yield and total production of paddy has achloved approxiately the expected levels of 2.9 t/ha and 37,500 ton respectively. (b) With regular irrigation and undisturbed water supply, farmers have achieved high paddy yields of 3.3 t/ha in comparlsonl to 2.95 t/ha expected. (Tubewell area 1987). Cc) The yleld of wheat in 1986/87 and 1987/88 is significantly lower than the expected level. It is about 1.8 t/ha in compare to planned level planned level of 2.6 t/ha. Thls is mainly due to shortage of water supplies and inadequate irrigation in these crop seasons. (d) With regular irrigatlon the expected level of wheat yield can be achieved as demonstrated in the Tubewell area: 2.5 t/ha. Furthermore, in 1985/86 season when water was higher than the expected level, it reached to 3.0 t/ha. (e) The overall production of wheat in the years 1986/87 and 198?/88 was about 11,000 tons in compare to the expected production of 16,700 tons. This is mainly due to the inadequate irrigation. In 1985/86 the overall production of wheat was 19,100 ton, exceeding the expected level. (f) Wheat was sensitive to the availability of irrigation water and the yield decreased by about 30 X when irrigation was inadequate. While, paddy was less sensitive to the disturbances in the water supply. With the good monsoon rains and temporary irrigation practices, it maintained the expected levels of yield and overall productlon. (g) It can be antclipated that with undisturbed water supply, crop yield and production in the project area wi_l exceed the planned level

39 -31- V. ECONOMIC EVALUATION Econosic Rate of Return 5.01 The project's economic rate of return (ERR) has been re-estimated, taking lnto account the actual costs incurred, and revised estimate of agricultural benefits arising frou the improvement of water supply network In Stage-I1 area. The economic beneflts of Stage-I area through the upgrading of surface drainage system, irrigation facilities and canal service roads have not been quantified and omitted from this reevaluation accordingly. The analysis is made only for thio surface irrigation project commanding 12,700 ha. The analysis for the Community Tubewells Scheme (Deep and Shallow Tubewlls) are not Included since there have been virtually in no progress in the shallow tubewells scheme and the deep tubowells one was excluded from the project in As coapared with the appraisal estimates the ERR are re-estimated as follows: Economic Rate of Return At appraisal At PCR SX) ($) surface irrigation and Groundwater 22X lsx Deep tubewells scheme 33% Shallow tubewells scheme 21X - The re-estimated ERR includes the costs of upgrading and facillties of Stage-I area. The cost and benefit streams for the analysis is given in Tablo-8. The lower rate of return is mainly a result of delay of construction.

40 -32- VI. INSTITUTIONAL PERFORMANCE Narayani Zone Irrigation Development Board 6.1 NZIDB was responsible for the implementation of the project. Chairman of NZIDB was changed to the Soecreiary to the H14GN's Ministry of Water Resources (MWR) from Hinistry of Food, Agriculture and Irrigation due to shifting DIEM under MWR. No function of and no meuber comprlsing NZIDB were changed. NZIDB's functions were: (a) approval of annual budget; (b) staff appointuents; (c) approval of contracts; (d) review of progress; and!e) coordination of policy matters on project implementation. These functions worked out satisfactorily throughout the implementation of the project The GM of NZIDP had overall management responsibility for: (a) preparation of annual program, budget and staffing to present to NZIDS; (b) general site administration; (c) authorization of contract payment within a limited amount; and (d) coordination of project activities at Regional and District levels. Highly qualified GM to the satisfaction to IDA was appointed and his performance was satisfactory throughout the project implementation. Four divisions were organized under the GM: (a) Engineering Division; (b) Agricultural Division; (c) Administrative Division; and (e) Finance Division. Of which. Agricultural Division was abolished in 1986 and its function was shifted to District Agricultural Development Office. (DADO). Engineering Division was divided into two units: (1) Design and Construction Unit; and (2) Operation and Malntenance Unit. Mechanical Division was newly established in 1963 to reinforce the maintenance of project facilities under the mechanized operation done by the NZZDP. The project consultant (Nlppon Koei) was placed betmwen the GM and these Divisions. Coordination among these groups we e satisfactorily worked out. Accounting and Auditing 6.03 NZIDB established and has been maintaining separate records and accounts. The accounts were audited annually. The audit reports submitted to IDA for each financial statement prepared under the HMGN regulation were generally delayed. Au IDA aission visited Nepal in 1986 particularly on review of accounting system of irrigation projects under the IDA Credit. The mission pointed out, however, that some of accounts and records did not adequately reflect the status in accordance with. accounting practices. On the basis of recommendation of the mission, accounting system would be Improved. Water Users Group 6.04 Parers were expected to fora Water Users' Assoi^ations/Groups (WUAs/WUGs) to achieve successful water a-nag emet under the guidance of the project staff. In Stage-I area, 505 WUA and 2, 264 WUGs had been already formed though

41 -33- these are not properly functioned. In Stage-It area, 33 WUAs and 147 WUGs were formed so far only in Blocks-7 and 8, however no activities have been observed. Agricultural Extension 6.05 The project appraisal in 1987 intended that the RegioTal Dlrector of Agriculture would be responsible for the technical cont*nt of extension prograas in the six Districts 1/. while execution of these programs and their administration would be vested in the General/Project Manager of the three on-going IDA-assisted projects (Narayani, Sunsari-Morang and Shairawa- Lumbini Groundwater Projects). The Agricultural Development Officer (ADO) and other extension staff were under the supervision and technical guidance of Agricultural Divlsion of the project. Wlth the prograams sanctioned by the Regional Director of Agriculture, the project had been providing extension activities including Training and Visit (T&V) System on the whole project districts! 6.06 In 1985, however, the whole agricultural support programs was merged to Agricultural Extension and Research Project (AERP) from the project and all the extension staff were transferred to AERP. Since then the extension services have been provided by the Department of Agriculture (DOA) through the administrative district. The ADO is in charge of all extensionrelat4d activities within a district, asslted, by an Assistant ADO (AADO) and technicians. The nuaber of staff involved in the extension services for the Bara District including the Stage-I1 area has been Increased double from 139 to 250 since the project started. Zi the command area of the project, 77 extension staff are in action, about 175 ha being covered by a extension staff and the number of staff 1s considered adequate. However, their services are not always favorably recelved by farmers because of insufficient introduction of new farming technlques and lack of coordination for giving loans and fertllizers. On the other hand, activities of extension staff are restricted by the lack of adequate facilities of housing and transportation.

42 -34- VII. SPECIAL ISSUES AND LESSONS LEARNED Water supply to NEC 7.01 The main factor that effected the agrioultural impact of the project is the pattern of the water supply to NEC. The monthly average flows at the NEC iltake are given in Table 9 f)r a period of T years, IS6 together with the NBC flows as planned by the SAR of Stage II and Stage III. The number of closure days of NEC in each month is given ln Table 9, too Considering the flow requirement of entire project area development including coming Stage-III as estimated in the Stage- III SAR, it is obvious that the aonthly average flow was well below the desired during the dry season (Dec.- Apr.) and during August and September (Table 9). As known from Table 10 which shows the deficiency of water supply for 7 years average, the deficiency In the monthly average dischrge (Def Q in Table 10) was around X for the dry season and X In August and September. During May, June and July, however, excessive average discharge was supplied. T.03 Other major problem of the water supply at NEC intake Is the unscheduled closure of the Don canal. During 1984, 1985 and 1986 the water supply from the Don canal was completely stopped durlng and after the. monsoons. Furthermore, coaplete cut In the water supply occurred alaost every month (see Table 9, closing days). On the average for , the actual supply time of flow to NEC intake was 59.6 X of the scheduled supply time (Table 10). The total number of closure days of the canal as an average for is days per year. Considering the scheduled closure to be 30 days in November and 15 days in December, the yearly average of us cheduled closure of supply to NEC i3 146 days Considering the combined effect of the deficient discharge and the unscheduled closure of NZC, the annual water quantity whichi was actually delivered into NZC, as an average for is 56.2 X of the annual scheduled quantity (Table 11). The monthly supply quantity is X of. scheduled supply in December, January and February and only 10 X in March. It was X in August, September and October. Schedulod supply and more was provided in June and July The variations in flow levels are relatively wide and frequent. Detailed analysis of the variation of flow is beyond the scope of this report, however it can be mentioned that often the flow level varied within a period of one week and in a range of S. These changes in discharge complicated the operation of the system.