C : E 0 F Y. Document of The World Bank FOR OFFICIAL USE ONLY. Report No NEP

Transcription

1 Public Disclosure Authorized Document of The World Bank FOR OFFICIAL USE ONLY C : E 0 F Y Report No NEP Public Disclosure Authorized STAFF APPRAISAL REPORT NEPAL Public Disclosure Authorized BHAIRAWA-LUMBINI GROUNDWATER PROJECT STAGE II Public Disclosure Authorized South Asia Projects Department Irrigation II Divion December 6, 1982 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENTS 1 Nepalese Rupee (NRs) = US$ NRs = US$1.00 FISCAL YEAR Nepal Fiscal Year = July 16 to July 15 WEIGHTS AND MEASURES m = meter (3.28 feet) km = kilometer (0.62 miles) ha = hectare (2.47 acres) Mm = million cubic meters ( acre-feet) m3 = cubic meter (35.31 cubic feet) ton = metric ton (2,205 pounds) liter = cubic inches MW = Megawatt (thousand kilowatts) kwh = Kilowatt hours ( kcals) kv = Kilovolt

3 FOR OFFICIAL USE ONLY PRINCIPAL ABBREVIATIONS AND ACRONYMS USED ADBN - Agricultural Development Bank of Nepal AIC - Agricultural Inputs Corporation AO - Agricultural Officer APROSC - Agricultural Projects Services Centre BLGPO - Bhairawa Lumbini Groundwater Project Office CCA - Cultivable Command Area DADO - District Agriculture Development Officer DIHM - Department of Irrigation, Hydrology and Meteorology DOA - Department of Agriculture ERR - Economic Rate of Return GRDB - Groundwater Resources Development Board HMGN - His Majesty's Government of Nepal HP - Horse Power HYV - High Yielding Variety ICB - International Competitive Bidding ICP - Integrated Cereals Program JT - Junior Technician JTA - Junior Technical Assistant LCB - Local Competitive Bidding MA - Ministry of Agriculture MWR - Ministry of Water Resources NEC - Nepal Electricity Corporation NFC - Nepal Food Corporation NZIDB - Narayani Zone Irrigation Development Board O&M - Operation and Maintenance PCC - Project Coordinating Committee PLAA - Panchayat Level Agricultural Assistant SAO - Senior Agricultural Officer SDV - Supplementary Data Volume SMS - Subject Matter Specialist T&V - Training and Visit UNDP - United Nations Development Programme USAID - United States Agency for International Development GLOSSARY Panchayat - Smallest subdivision of Government Sajhas - Cooperative Society District - Principal administrative unit; there are 20 districts in the Terai region in Nepal Paddy - Unhusked rice Kharif - Wet season (June to September) Rabi - Dry season (October to February) Hot weather- March to May This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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5 NEPAL BHAIRAWA-LUMBINI GROUNDWATER PROJECT VOLUME I - MAIN REPORT Table of Contents Page No. I BACKGROUND The Country... 1 The Agriculture Sector... 1 The Irrigation Sub-sector... 3 The Need for Technical Assistance Project Formulation... 6 II THE PROJECT AREA... 6 General Climate... 7 Topography and Soils. 7 Hydrogeology... 7 Existing Irrigation. 8 Agricultural Supporting Services. 8 Socio-Economic Conditions III THE PROJECT A. General Project Concept Project Components B. Bhairawa-Lumbini Project Stage I Performance and Cost C. Stage I Tubewell Systems and Stage II O & M Component Detailed Features Operation and Maintenance D. New Tubewell Systems Detailed Features Planning Criteria Design Criteria Operation Criteria Construction Methods This report is based on the findings of an appraisal mission to Nepal in February/March Mission members included Messrs. E.L.M. Kramer (Mission Leader), Y.K. Choi, C. Diewald, R. Vick, G. Abdi (IDA), W. Barber K. Mahmood (Consultants) and D. Campbell (FAO/IBRD Cooperative Program).

6 - ii - Page No. E. Agricultural Extension and Training F. Technical Assistance and Training G. Birganj Tubewells Geeran... e r...l.. 28 Performance of the Systems.e...s Justification for IDA Assistance Proposed Improvements...o H. Implementation Scheduleh I. Environmental Effectsf IV PROJECT COST AND FINANCING Cost Estimates Financing.....I Procurement Disbursements Accounts and Audits V ORGANIZATION AND MANAGEMENT G e n e ra1l.o..... e--s The Governing Authorities Project Management Project Coordination & Farmer's Organizations Monitoring and Evaluation.*,, VI AGRICULTURAL PRODUCTION, MARKET PROSPECTS AND PRICES...o..o Cropping Patternse Crop Yieldsi.e Agricultural Production Input Requirementsqus Market Prospects and Prices VII FINANCIAL ANALYSIS A L Y S IS Changes in Farm Incomes.....# Impact on Poverty *. 45 Cost Recovery... 45

7 - iii - Page No. VIII BENEFITS AND JUSTIFICATION ANNEXES Benefits Economic Analysis Sensitivity and Risks IX AGREEMENTS REACHED AND RECOMMENDATIONS Supporting Tables Table 1 to Table 22 2 Consulting Services Draft Terms of Reference SKETCHES I Typical Well Design 2 Pipe Distribution System and Control Chamber CHARTS Implementation Schedule 2 Organization 3 Projected Cropping Pattern MAPS IBRD IBRD Project Location General Plan of Project Area VOLUME II - SUPPLEMENTARY DATA ANNEXES 3 Supporting Tables Table 1 to Table 17 4 Hydrogeology in the Project Area 5 Bhairawa-Lumbini Groundwater Project Stage I (Credit 654-NEP)

8 - iv - 6 Training 7 Monitoring and Evaluation 8 Assumptions for Financial and Economic Analysis 9 Draft Terms of Reference for Study of Groundwater Development Strategies for Irrigation in the Terai

9 NEPAL BRAIRAWA-LUMBINI GROUNDWATER PROJECT STAGE II STAFF APPRAISAL REPORT I. BACKGROUND The Country 1.01 Nepal is landlocked between China and India. It is divided into three parallel ecological zones running east-west: the Terai Plain, an extension of the Gangetic Plain of India; the Hills, actually the foothills of the Himalayas, ranging from 500 m to 4,000 m in elevation; and the Himalayan Mountains to the north. These three zones account for 17%, 68% and 15% of the total area (140,800 sq km), respectively. Rivers and streams, running north-south, cut the Hills into isolated areas and varying microclimatic conditions provide a range of environments for plant growth, depending on elevation, aspect, cloud cover, slope, etc Nepal's population is currently estimated at 15.0 M and is increasing at 2.6% annually with about 65% of the population living in the Mountains and Hills. Population pressure and the lack of employment opportunities in the Hills forces 10% to 50% of male family members to migrate either seasonally or permanently, to the Terai, Kathmandu or elsewhere in order to find employment and supplement incomes. Annual per capita income, estimated at about US$ 156 in 1982, is one of the lowest in the world. A detailed assessment of tht/country's economic performance is to be found in the latest economic report.- The Agriculture Sector 1.03 Agricultural Performance. With farm production and related activities comprising more than 60% of GDP, agriculture is the key sector of economic development. It engages almost 90% of the labor force and provides more than 60% of all exports. Only about one sixth of the total land area is available for cultivation, of which at most 15% is irrigated. About 90% of the cropped area is grown to foodgrains, predominantly rice (half of cropped area), followed by maize, wheat, some other cereals and pulses. Performance of foodgrain production largely determines agricultural growth. Less than 10% of the cropped area is under cash crops, mainly oilseeds, jute, sugarcane, potato and tobacco. During the seventies, the trend in production of major foodgrains and potatoes has been rather disappointing, except for wheat. Production grew at about 1.1% annually due to expansions 1/ "NEPAL, Policies and Prospects for Accelerated Growth," 1981, Report No NEP.

10 -2- in acreage, while yields, except for wheat, fell at a rate of about 0.8% per year. Some bad monsoons, declining demand in India and higher cost of fertilizers might account partly for this, but other endogenous factors have also played a role, such as shortfalls and delays in public investment, inappropriate pricing policies, insufficient support services, lack of trained manpower, etc. Cash crops, however, fared much better due to favorable prices and the fact that these crops are mainly grown in the Terai. Production growth in cash crops, too, was derived from expanded cultivation and not from increasing yields Agricultural Institutions. Agricultural development and policy are the concern of four ministries: the Ministry of Agriculture (MA), the Ministry of Forests, the Ministry of Water Resources (MW'R) and the Ministry of Land Reform. MA includes the Department of Agriculture (DOA) which is in charge of promoting production through extension, training and research. MA has also overall responsibility for a number of public institutions such as the Agricultural Development Bank of Nepal (ADBN) and the Agricultural Inputs Corporation (AIC). The Department of Irrigation, Hydrology and Meteorology (DIRM) is within the jurisdiction of MWR. Both MA and MWR suffer from a chronic lack of trained staff and a sparse distribution of services throughout the country. Annual increases in trained staff are small, readily absorbed and insufficient to meet the rapidly growing demand by projects. A national agricultural extension service is provided under DOA's Division of Agricultural Training Extension, through offices at regional and district level. Agricultural research is carried out at seven research stations, six agricultural, eight livestock and six fishfarms under the direction of DOA. Some agricultural research stations are also national crop development centers (for paddy, maize, jute and wheat) Agricultural Credit. ADBN is the main source of institutional credit in agriculture; the commercial banks as yet play only a minor role in this sector. ADBN extends short, medium and long-term loans to individual farmers, groups of farmers, cooperative societies and village committees. Overall lending has increased considerably over recent years, and covers now about 25% of total agricultural credit needs. ADBN's financial position is sound, and loan recovery has been satisfactory under the circumstances; overdues ran at about 24% of loans outstanding over the past years. Repayment performance of cooperative societies, however, has been poor; their creditworthiness seemed to be declining. Recently, however, ADBN has recorded improvements in loan collection. Loans are extended for a wide variety of purposes, including irrigation, mechanization, warehousing and marketing. Interest rates vary with loan purpose between 6 and 16%. ADBN is making efforts to reach more small farmers directly, although the rules for collateral are not in favor of farmers with very small holdings. Application procedures for institutional credit are lengthy and cumbersome, so that many farmers avoid this source in favor of easy credit from private lenders at higher cost.

11 Agricultural Input Supply. Agricultural input supply (fertilizer, seeds, chemicals and some implements) is exclusively entrusted to the AIC. AIC procures, both abroad and locally, stores and distributes all inputs through a network of regional and district branches. AIC fixes retail prices for inputs and provides them according to district plans in coordination with District Agricultural Development Officers (DADOs), ADBN and Cooperative Societies or Sajhas. The activities of AIC have been rapidly extending; its services in the Terai are fairly satisfactory in the light of supply problems and bottlenecks related to credit cooperatives. The Irrigation Sub-Sector 1.07 Water Resources Utilization. Nepal has abundant water resources, including major rivers with annual average discharges totalling 150 billion m3 and capable of irrigating 6 to 8 M ha. However, there are only about 1.3 M ha of land suitable for gravity irrigation in the country. Exploitable groundwater resources, which are largely concentrated in the Terai, could provide tubewell irrigation for about 1.0 M ha. The total irrigation potential is therefore about 2.3 M ha. Utilization of water resources for irrigation is limited by several factors: (i) there are few reliable sources of perennial surface water from the eight major riversl/; (ii) these large rivers are costly to develop particularly for relatively small command areas which are typical in the Terai; (iii) heavy sedimentation in riverbeds creates considerable problems in construction, operation and maintenance of irrigation systems; and (iv) power supplies to energize tubewells are severely restricted in extent and amount. At present, only about 300,000 ha (about 23% of the potential surface irrigable area) are provided with some form of irrigation, of which about 150,000 ha are under public schemes Irrigation Development: Before the launching of Nepal's first Development Plan in 1957, few substantial irrigation works had been undertaken by HMGN. The main reasons were limited financial resources and shortage of trained manpower. Nevertheless, with schemes such as the 11,000 ha Chandra Project (1922), farmers' stream diversions, bucket-lift, and other traditional methods, some form of irrigation had been provided to an area of 154,000 ha, mainly in the Hills. During the First and Second Development Plans ( and respectively), HMGN's irrigation programs were concentrated on building medium sized systems (15,000-60,000 ha) in the Terai. In the Third Plan ( ), a program was launched for construction of minor irrigation projects, mostly in the Terai, to encourage greater farmer participation and to expand irrigated areas rapidly. Due to poor investigations and construction, many of these projects fall short of expectations, which resulted in discouraging response from farmers. HMGN then 1/ The Mahakali (Sarda), Karnali, Babai, Rapti, Narayani (Gandak), Bagmati, Kosi and Kankai Rivers.

12 -4- switched back in the Fourth Plan ( ) to a policy of constructing medium-sized irrigation projects. In keeping with the priority given to quick yielding investments, the emphasis has shifted in the Fifth Plan ( ) towards the completion of ongoing schemes and new investment in projects with short gestation periods and high returns, including groundwater development by tubewells. In the Sixth Five Year Plan ( ) major works are proposed to command new areas totalling 155,000 ha of which 70,000 ha are at present under construction; existing major works commanding about 115,000 ha are to be rehabilitated; and approximately 105,000 ha are to be developed for intensive irrigation within existing command areas. The Sixth Plan rightly stresses the need to more fully utilize the existing irrigation infrastructure and to enhance the extension services and associated inputs to irrigated areas Bank Group's Participation in Irrigation Development. The first irrigation project undertaken with Bank Group assistance in Nepal was the Birgani Irrigation Project (Narayani Zone) (Cr. 373-NEP, US$6.0, 1973). The project was completed in mid / and can be considered successful, in particular with regard to the surface irrigation component. The tubewell component has been less successful, mainly because of inadequate attention to maintenance and lack of spares. The proposed Bhairawa-Lumbini Stage II project includes some funding to improve the performance of the Birganj tubewells. At present, the Bank Group is involved in five ongoing irrigation projects and two rural development projects with irrigation components. The Narayani Zone Irrigation Development (Stage II) Project (Cr. 856-NEP, US$14.0 M 1978) followed on the Birganj Irrigation Project. It was designed to develop the remaining 12,700 ha deleted from the Birganj project and to provide intensified agricultural support services. Most civil works and equipment contracts have been awarded, and construction is progressing satisfactorily. The Bhairawa-Lumbini Groundwater Project (Cr. 654-NEP, US$9.0 M, 1976), the first full scale tubewell project in Nepal provides for construction of 64 deep wells, detailed development of the 7,600 ha command area and agricultural supporting services (see para 3.03). The Sunsari-Morang Irrigation and Development Project (Cr. 812-NEP, US$30.0 M, 1978) is designed to restore and improve the existing canal system throughout 66,000 ha, involving, inter alia, river training and sediment control works. The ICB process for the construction of the headreach improvements and irrigation and drainage works in about 12,000 ha is progressing; the contract is scheduled to be awarded during the last quarter of The project is facing a cost overrun and project implementation has fallen about two years behind schedule. The Mahakali Irrigation Project (Stage 1) (Cr NEP, US$16.0 M, 1981) provides for the rehabilitation and upgrading of the existing irrigation system (3,400 ha) on the left bank of the Mahakali River in 1/ For detailed information reference is made to the Project Completion Report (June 1982).

13 -5- the Far Western Region and extending it to 6,600 ha net. The project's start-up activities have taken somewhat longer than anticipated. The required survey and engineering designs are ongoing and scheduled for completion towards the end of Bids for equipment and vehicles have been invited. The Babai Irrigation Engineering Project (Cr NEP, US$3.5 M, 1981) is to finance the preparation of detailed designs and tender documents for irrigation and drainage project works in 13,500 ha, and for 42 km of highway design. A consulting firm has been engaged and project implementation is progressing as scheduled. A component in the First Rural Development Project (Credit 617-NEP, US$8.0 M, 1976) provides for improvement of small scale Hill irrigation schemes and development of a high lift scheme on the Batar plateau in Nuwakot District for a total of approximately 1,900 ha. The Second Rural Development Project (Cr. 939-NEP, US$11.0 M, 1979) also includes a component for the improvement of small scale Hill Irrigation schemes in the Mahakali Zone. Implementation of this project is in an early stage. The Need for Technical Assistance 1.10 Shortage of adequately trained (technical) manpower is a severe constraint on Nepal's development. It limits the Government's ability to prepare, implement and operate projects, and considerable technical assistance is required to remove this constraint. Because of the high priority given to irrigation and the large number of projects under preparation and implementation this constraint is increasingly felt. Available staff is thinly spread over the various regions, divisions, and projects, and is insufficient to meet present needs. The shortage of engineers will continue to be a major bottleneck in implementing irrigation projects under the Sixth Five-Year Plan. For the Sunsari-Morang Irrigation and Drainage Development Project (Cr. 812-NEP), the Mahakali Irrigation Project (Cr NEP) as well as for the Babai Engineering Project (Cr NEP), DIHM was unable to provide the necessary counterpart design staff and local consulting firms were recruited to work together with project management and expatriate project consultants in order to meet manpower requirements. The use of local consultants has been fairly successful and their use in IDA financed projects is expected to strengthen their development. In addition, any completed project would require about as much staff for operation and maintenance as is now available for construction. Hence, the number of irrigation engineers in the country has to be increased drastically if irrigation development is to be accelerated. IDA and other donors include training components in most projects in Nepal. Under the Mahakali Irrigation Project (Cr NEP), about 80 Nepalese students are to be trained abroad in civil and mechanical engineering and agriculture. In the meantime, local capabilities have to be supplemented by technical assistance, both from overseas and from neighboring countries.

14 -6- Project Formulation 1.11 The proposed project follows on the first stage Bhairawa-Lumbini Groundwater Development Project (Credit 653-NEP) which is to be completed by mid The Stage I project has largely concentrated on the construction of infrastructure, and since adequate power for pumping was only recently supplied to the project area there is as yet not much experience with the operation of the tubewells. In order to generate project benefits HMGN requested IDA-assistance for a Stage II project to help with the operation and maintenance of the completed wells and canal infrastructure and to build up the required institutions for O&M of this and similar groundwater development projects in the future. 1/ 1.12 During the implementation of the Stage I tubewell schemes, delays were encountered with the supply and installation of pumping equipment and the construction of the open-channel distribution system. Because of the nature of the traditional conveyance system (unlined earthen canals) difficulties with water distribution may occur once the systems are operational. The project would therefore experiment with more modern designs of the distribution networks (of 15 new tubewells) and with the pumping equipment used in the wells. This is expected to eliminate some of the major shortcomings of the Stage I designs, i.e. the excessive conveyance losses in the earthen canals, and minimize delays in implementation and the high cost of land acquisition for the traditional type of distribution networks. The project would be executed over a five-year period by the existing project authority under the Groundwater Resources Development Board (GRDB) and the Department of Irrigation, Hvdrology and Meteorology (DIHM)..II. THE PROJECT AREA General 2.01 The project area, which is located within the Rupandehi District in the Western Terai at an altitude of about 100 m, consists of two contiguous sections (see IBRD Map 16432). The Stage I "implementation area" of 7,600 ha net, which is part of a 20,000 ha gross area lying between the Dano River in the west, the Rohini River in the east, the Churia (Siwalik) Hills to the north, and the India/Nepal border to the south. This area was 1/ The Bhairawa-Lumbini Groundwater Project is the first relatively large size tubewell development in Nepal. At present, very little experience exists with the operation of electrically driven tubewells and with the distribution of water to a relatively large number of farmers (120 ha; farmers).

15 -7- selected with the objective of implementing about si-ty-three deep tubewells in the IDA-assisted Stage I groundwater development project. An area of 2,340 ha gross, lying west of the Dano River and with its southern boundary along the Lumbini-Bhairawa highway, has been selected for further experimental groundwater development under the project. The asphalt surfaced Bhairawa-Lumbini road links this area with Bhairawa, where it intersects with the north south Butwal-Bhairawa road which bisects the Stage I implementation area and connects to the major highway systems of Nepal and India. Access to the project area and Bhairawa is facilitated by the existence of a modern airport, located close to Bhairawa, which is served by a daily Royal Nepalese Airlines flight from Kathmandu. Climate 2.02 The project area is located within the monsoon belt. Consequently, its climate is monsoonal or sub-tropical with three distinct seasons: a warm, wet season from mid-june through September, a cool dry season from October through February and a pre-monsoon hot season from March to mid-june (SDV Annex 3, Table 1). Topography and Soils 2.03 The topography of the Rupandehi Plain is that of a flat, or nearly flat, plain sloping in a general north-west to south-east direction with an average gradient of 0.1 to 0.2%. Elevations range from about 120 m in the northeast to about 90 m in the South-west. The land classification for irrigation according to U.S. Bureau of Reclamation standards identified predominantly class II or III lands. Soil and land classification in terms of soil types, drainage conditions and crops recommended for the area selected for further groundwater development is detailed in SDV Annex 3, Table 2. Hydrogeology 2.04 The Western Terai, of which the project area forms a part, is underlain by a sequence of alluvial deposits which thicken southwards onto the Ganges Plain. Drilling has proved thickness of alluvium in excess of 450 m. Coarse fragmented rock deposits predominate in the sections towards the northern edge of the Terai adjacent to the Churia Hills. The results of drilling some 51 production wells in the Stage I implementation area have shown that clean, water yielding sand and gravel forms on average 63% of the section between about 40 and 180 m depth (SDV, Annex 4, Table 1). An exploratory well at Lumbini to the south of the Stage II development area has proved 38% of clean sand and gravel in the section from m depth. It may therefore be expected that the section between about 40 and 200 m depth in the Stage II implementation area will contain about 50% of screenable aquifer material with a range of about 40-60%. Pump tests of the wells constructed in the Stage I area have proved exceptionally high well productivity with yields in the range of m 3 /hr for drawdowns of a few

16 -8- meters. The yields of wells drilled to 200 m in the Stage II development area with production strings from about 40 to 200 m are expected to be high The water levels in the wells constructed in the Stage I implementation area are permanently or seasonally above ground level (i.e. the wells yield artesian free flows) in over two-thirds of the area. Water levels deeper than 5 m below land surface occur in less than 5% of the Stage I area. All wells drilled in the Stage II area to 200 m with screens set in the section from 40 to 200 m are expected to yield artesian free flows. A more detailed description of the hydrogeology, including water supply and demand in the project areas is given in SDV Annex 4. Existing Irrigation 2.06 A relatively small part of the Stage I project area is at present irrigated from farmer constructed irrigation systems which receive water from various stone and brushwork diversion structures on the unstable Tinau River. The diversion works are all located north of the Stage I area, between the town of Butwal and a point some 2 km to the south of the town. The main purpose of the schemes, which have been in operation for many decades, is to convey supplementary water for monsoon paddy. The supplies from these systems, including one such scheme on the Dano River, are in general inefficient and unreliable, particularly to the lower portions of the distribution networks. The operation and maintenance of the diversion schemes is managed by farmers committees, without government participation. The systems are important to the local population. Other small-scale existing irrigation schemes are supplied from artesian wells and from pumping from rivers and local depressions. Agricultural Supporting Services 2.07 Agricultural Extension. The project district is one of the six districts in the Terai in which IDA-assisted irrigation projects are located, and where during the mid-seventies the Department of Agriculture (DOA) decided to introduce the T&V system of agricultural extension. A detailed description of that system is given in IDA's appraisal report of the Agricultural Extension and Research project of January, 1981 (Credit 1100-NEP). Under the Stage I project the existing extension services in the district were reorganized and strengthened. The activities concentrated on (i) the introduction of new demonstration methods, (ii) strict adherence to programmed training and visit schedules and (iii) the enforcement of important cultivation practices for the major crops in the area. The project employed a Senior Agricultural Officer (SAO), who supervised the agricultural extension activities. It also involved the appointment of additional staff which at present consists of eight Subject Matter Specialists (SMS), 20 Junior Technicians (JT), 34 Junior Technical Assistants (JTA) and 55 full-time Panchayat Level Agricultural Assistants (PLAA). At present each

17 -9- PLAA serves three tubewell commands with a net cultivable area of about 350 ha and about 1,900 ha in areas not commanded by the tubewells In support of training of PLAAs and farmers, the IDA-assisted Narayani Zone Irrigation Development Stage II Project (Cr. 856-NEP, 1978) provided funds for equipment, vehicles and the construction of five training sub-centers and 22 housing units for JTAs. The housing units were mainly for the field staff operating in the tubewell command areas of the Stage I project As financing of the agricultural extension services under Stage I was running out in mid-1980, the IDA-assisted Mahakali Irrigation Stage I Project (Cr NEP) provided additional operational funds required to continue with the extension activities for three more years and for the engagement of a local consultant. Total funding for the period was about US$80, Although some setbacks were experienced with the construction of staff quarters and training sub-centers, the performance of the district's agricultural extension service established in accordance with the staffing intensities and methodology as stipulated under the Training and Visit system of extension service, was encouraging Agricultural Research. Agricultural research on crops in the project area is conducted at the Bhairawa Agricultural Farm which employs nine research officers. The Farm also serves as a regional research station for the Western Region. The National Wheat Development Program, which is responsible for all aspects of wheat improvement and production conducts its research at the Farm. The Farm spreads over 35 ha, of which 25 ha are used for research on paddy during the wet season and on wheat during the dry season. Major areas of research conducted by the Farm are: selection and introduction of crop varieties suitable for the region, improved crop cultivation practices, application of fertilizer, plant protection and on-farm water management. In addition, the Bhairawa Station conducts training sessions for extension staff and farmers. The research program at the Station is complemented by the Integrated Cereals Program (ICP), which is assisted by USAID, to carry out research on paddy, wheat and maize. The research activities at the Station are to be further strengthened under the on-going IDA assisted Agricultural Extension and Research Project (Cr NEP) Input Supply. The Agriculture Inputs Corporation (AIC) produces high quality wheat, paddy and maize seeds through a contract system with private growers. These seeds are sold to the farmers at cost. As the number of farmers using high quality paddy and maize seeds is as yet not very significant, AIC does not have problems in meeting the demand. However, the demand for the HYV wheat seed is larger than the available supply. DOA, through assistance given by ICP, is taking steps to improve the situation by allowing the Bhairawa Research Farm to expand its foundation seed production

18 -10- program. This seed is to be supplied to AIC for certified seed multiplication and distribution AIC is also responsible for the procurement and distribution of fertilizer and plant protection chemicals. For the project areas these inputs are available through the District AIC located in Bhairawa. Fertilizer and agro-chemicals are generally sold to the Sajhas at subsidized prices at the district AIC godowns. The Sajhas transport the inputs to their facilities at the panchayat level. During the 1980/81 cropping season, AIC sold about 1,100 ton of fertilizer (in nutrient) in the district. At present, the overall district storage capacity for agricultural inputs (6,600 ton) appears adequate. However, there is a need for additional input storage facilities in the Stage II tubewell development area Storage, Processing and Marketing. Storage of agricultural produce at the farm level is limited to grain for home consumption. Paddy is usually stored in mud bins. Farmers normally sell their produce at harvest inter alia for want of suitable storage facilities. Private dealers buy the surplus paddy and transport it to nearby areas or deficit Districts in the hill region. The processing facilities in the project area are well developed. At the village level, many small rice mills, flour mills and oil presses exist which satisfy the local demand. Larger scale rice mills and a flour mill operate in Bhairawa. Socio-Economic Conditions 2.15 The project area consists mainly of small, mostly owner-cultivated farms. About 64% of the smallest farms occupy about 35% of the land (SDV Annex 3, Table 3). The average farmsize is about 2.0 ha. According to a survey, only about 5-10% of the land is farmed by tenants or owner-cum-tenants. These survey results, however, appear somewhat suspect as evidence collected by the mission (from interviews) suggests a much higher percentage of tenancy. Less than one third of the families represent the original Tharu population, while the remainder are settlers, mostly from the hills. The average family size is about 7.2 persons. About 55% of the family members are available for work. Women also participate in agricultural activities, such as transplanting and harvesting About 90-95% of the farm families are estimated to live below the poverty threshold of about NRs 1,050 (US$80) 1/ per capita per year. Most farm families have earnings in addition to their subsistence income from crop cultivation and animal husbandry, mainly from seasonal work as hired laborers on other farms or from occasional construction jobs. The sale of land in emergencies is not uncommon. Not much is known about indebtedness, but it is probably high, particularly among small farmers. The dominance of large farmers is a pervasive feature of the agricultural economy of the area. 1/ Estimated for the project area (para 7.03).

19 -11- III. THE PROJECT A. General Project Concept 3.01 Although the implementation of major works in the Stage I project is nearing completion, it is clear that the crucial phase of properly operating and maintaining the tubewell schemes is still to be tested. While the Stage I project has developed a conceptual basis for O&M of the tubewell systems, sustained agricultural development will hinge on a reliable water supply, proper distribution and on-farm management of water, experienced and dedicated staff, sufficient funding for O&M and improved agricultural support services. The essence of the proposed project is to ensure that the existing Stage I tubewell systems would be operated and maintained in accordance with sound engineering standards, that there would be active farmers participation and that the agricultural inputs and support services would be made available to achieve the projected production. Therefore, a central task of the project would be to build up institutions to operate and maintain the project as well as similar projects elsewhere in Nepal in the future. In addition, the project would experiment with improved technologies in the design and construction of new tubewell irrigation systems. The improvements are to be introduced on a pilot scale (about 15 tubewell systems) to enable comparison of both technologies -- improved designs versus Stage I technology -- during the project's five-year implementation period. The proposed project would also include a comprehensive study to compare the advantages and disadvantages of the tested technologies and of other alternative strategies to direct future groundwater development in Nepal. Project Components 3.02 The project would finance over a five-year period the following components: (a) staff required for project operation and maintenance of 64 wells,1/ 280 km of canal distribution networks, 96 km of village roads and for organizing farmers: 1/ In the course of Stage I project implementation, it was agreed to increase the number of tubewells to 64, by converting one observation well into a production well.

20 -12- (b) design and construction of approximately 500 km of field channels to convey irrigation supplies from the 5 ha outlets to the farmers- fields; (c) procurement of equipment, vehicles, spare parts, construction materials and workshop and office facilities required for operating and maintaining the project and for constructing 15 new wells; (d) training of project staff; (e) staff, vehicles and buildings required for the T&V system of agricultural extension in the Rupandehi District; (f) provision of seeds, fertilizer and pesticides to progressive farmers for the growing of major crops in about 150 ha; (g) planning, design, installation and operation of 15 new tubewell schemes, to be 3 equipped with submersible pumps discharging about 300 m /hr and distribution networks of buried PVC pipes, to serve 120 ha required for each well, a drainage network and about 100 km of field channels; (h) construction of approximately 25 km of roads to provide access to the 15 new tubewells and to connect the major villages in that area; (i) construction of approximately 35 km of 33 kv transmission lines with transformers to provide power to the new wells. (j) the completion of the Stage I project including the installation of 64 tubewells, the construction of 280 km of distribution and drainage systems, 80 km of power transmission lines, 96 km of roads and the project buildings. Other project components would be: (k) monitoring and evaluation studies; (1) provision of consulting services for this and, if required, other IDA-supported irrigation projects in Nepal for project implementation, aerial photography and mapping, for undertaking a comprehensive study to compare the advantages and disadvantages of alternative strategies for future groundwater development in Nepal, and, if required, for updating the existing

21 -13- feasibility study for a further groundwater development project in the Bhairawa-Lumbini area to serve about 13,000 ha. (m) repair and improvement of the Birganj tubewell systems. The project cost is estimated at US$19.4 M. It will be implemented over a five-year period by the Bhairawa-Lumbini Groundwater Project Office under the Groundwater Resources Development Board. The rehabilitation of the Birganj tubewell system would be carried out by the Narayani Zone Irrigation Development Board (NZIDB). B. Bhairawa-Lumbini Project Stage I Performance and Cost 3.03 General. The project was appraised in November/December 1975 and became effective in November It represented the first stage of a groundwater development program to provide irrigation to the Western Terai and included the design and installation of 63 tubewells, distribution networks to serve about 120 ha under each well, 70 km of 11 kv transmission lines, 70 km of village roads, 1,000 ton grain storage facilities and the strengthening of agricultural supporting services in the project areas. The project cost was estimated at US$13.7 M and the IDA-credit approved was US$9.0 M (Credit 654-NEP). The scope of the project was selected on the basis of need, accessibility to and agricultural potential of the project area, proven groundwater resources, and implementing capability of HMGN. Project implementation was to take four years and to be completed in Physical Progress. Due to inadequate staffing and budget allocations, cumbersome procurement, tendering and land acquisition procedures and poor performance of local contractors, the construction of project works, the acquisition of construction materials and repair of equipment and vehicles was held up. With the arrival of essential construction equipment and machines in 1979, the implementation of works picked up and completion of all works is now scheduled for mid Procurement problems also delayed the erection of the 33 kv substation at the Gandak West Power Station. As a result power was only supplied to the project from March The construction of field channels by the farmers has not made much progress, because water was not available from the tubewells. The situation may change once water becomes available at the outlets. Also only a small portion of the programmed drainage works was constructed, because of resistance from farmers. It is anticipated that farmer-s reluctance for the implementation of the drainage program would diminish once the tubewells become operational and certain low-lying areas may become waterlogged.

22 Financial Progress. The revised cost-estimate tco completion of the project, which is scheduled for mid-1983, amounts to US$15.6 M. This represents a cost increase over the appraisal cost estimate of about US$1.9 M, or about 15%. The cost overrun is mainly due to the 3-year delay in project implementation which has resulted in higher costs for civil works, project staff and consulting services. Until September 1982 IDA had disbursed US$8.8 M 1/ or 98% of the us89 n M credit Full disbtursemernt is likelv bv end Futrther details on physical and financial progress are given in SDV Annex 2. C. Stage I Tubewell Systems and Stage II 0 & M Component Detailed Features 3.06 General. As originally conceived at appraisal, the tubewell irrigation systems were to have included the following elements: (a) installation of 63 tubewells varying in depth from 120 to 200 m equipped with Slectric motor powered pumps capable of discharging 300 m /ha against 30 m of head; (b) constriction of 63 earth storage reservoirs each with 2000 m capacity for receiving the discharge from the tubewells; (c) construction of earth channel conveyance systems serving 120 ha down to 5 ha outlets and drainage networks with outfalls to rivers and streams; and (d) construction of approximately 70 km of 11 kv transmission lines through which power would be delivered to the project pumps from the existing 33 kv Bhairawa-Butwal grid and provision of 11/0.4 kv transformers at each wellhead As actually implemented, the project departed in several respects from the original design concept. The storage reservoirs, which were intended to allow maximization in use of the erratic power supply and minimize use of energy during peak power demand periods, were not constructed. The absence of the reservoirs in the existing systems was to some extent 1/ Including US$0.5 M disbursed from Credit 654 for engineering services for the preparation of the Sunsari Morang Irrigation Project authorized and Development Credit Agreement amended in December 1977, which effectively reduced IDA funding to the Bhairawa-Lumbini Project by this amount.

23 -15- replaced by increasing the pumping capacity of the water points but automation of pumping is now not possible. The power supply is from the 33 kv line extended from the Gandak power station to Butwal and Bhairawa. Use of this source of power required construction of 7 km of 33 kv transmission line and provision of a 5 MW 33/11 kv transformer substation which were not foreseen at appraisal Wells. As originally designed, the wells were to have had a 14 in. inside diameter (ID) mild steel pump chamber to a depth of 40 to 50 m and a 10 in outside diameter (OD) fiberglass production string to m depth consisting of slotted pipe set opposite selected aquifer material and the balance of blank pipe. In the event, the fiberglass design was applied only experimentally at two sites and the remainder of the wells were constructed with 10 in ID mild steel production strings. The 14 in ID pump chamber was retained for a number of the early wells but the size of this element was increased to 16 in ID when casing purchased specifically for the project became available The wells range in depth from 101 to 190 m with pump chamber depths in the range of m. The length of screened section ranges from 29 to 77 m and averages about 50 m. As expected, the permeability of the 3 aquifer proved to be high with specific capacities in the range of m /h and averaging 107 m /h. The design discharges of the 56 wells successfully completed to date range from 320 to 545 m /h to serve irrigated areas in the range of 85 to 145 ha (SDV Annex 4, Table 2) Of the 58 wells completed to date, 42 are either permanently or seasonally free fl 9 wing at land surface level and 23 have artesian discharges in excess of 200 m /h. Water levels range from about +4 to -8 m relative to land surface. However, the artesian flowing conditions are not expected to persist for long after the well field becomes fully operational. The initial decline of the water level would be relatively rapid and a long-term decline of up to 15 m is foreseen. Such declines can be easily accommodated within the existing well design Pumping Units. The pumps are 3 or 4 stage turbines with water lubricated column assemblies, a 10 in. diameter rising main, and powered by vertical hollow shaft squirrel cage induction motors. There is a flow meter on the delivery pipe. Of the 68 motors gurchased, 48 have 100 HP prime movers and are designed to deliver 400 m /h against P5 m of head and 20 have 75 HP prime movers and are designed to deliver 300 m /h against 45 m of head. Such pumping head requirements are now not expected to develop and certainly not within the expected life of the pumping units. With lower than design heads, the pumps would deliver higher than design discharges. Nevertheless, almost all the pumps are considerably overpowered for the required yield. Assuming a long-term water level decline of 15 m below the present pumping level at the required discharge and a wire to water pumping unit efficiency

24 -16- of 60%, the required capacities of the pump motors would range from 27 to 88 HP (with one exception of 144 HP) Power Generation, Transmission and Transformation. The Gandak West Hydropower Station is located on a 5 m drop structure on the Gandak left bank main canal. It has three turbines each with 5 MW installed capacity. At present, only two of the turbines are operated simultaneously (the third being kept on stand by), generating on average about 5 MW from about December 15 through March 15 and about 8 MW during the balance of the year. The firm capacity as presently operated is therefore 5 MW, except under canal closure conditions which are supposed to be for one month in October but in fact are for shorter periods. The low projected generation at the plant is not properly explained. There is no shortage of water in the canal, it seems unnecessary to have a turbine on standby at all times and the head fluctuations through the turbines are minimal. The plant supplies energy through a 132 kv line to Hetauda and the national grid and through a 33 kv line to Butwal and the project area The project has constructed 7 km of 33 kv transmission lines from the Gandak 33 kv line to a location in the Stage I project area where a 5 MW 33/11 kv transformer substation has been located. From this substation, 73 km of 11 kv transmission lines have been constructed to serve the 64 wells planned for Stage I. Transformation from 11 to 0.4 kv is provided at each well head It is estimated that the Stage I project would require about 3 MW of power at the well head assuming water levels in the area decline through time by 15 m. Considerably less power would be required in the early years. HMGN would cause NEC to operate the 33 kv transmission line from the Gandak West Hydropower Station to the 33/11 kv Substation in Stage I as a dedicated feeder and to provide the required power which is expected not to exceed 5 MW (inclusive of the power requirements for the 15 new tubewells) at the substation at full development Pumphouse. The pumphouses are brick built structures and provision is made for access through the roof so that the pump and rising main can be removed from the well. The structure includes a residence for the pump operator Water Requirements. The annuil water requirements for a typical tubewell unit are estimated at 10,400 m per ha. This is based on a cropping patte5n designed to match the following main assumptions: pump discharge of 450 m /hour, supply unit of 120 ha net, conveyance efficiency of 70% from pump to 5 ha outlet and no more than 18 hours pumping per day during the June peak demand period in a mean rainfall year (SDV Annex 3, Tables 9, 10A, 10B and 10E). In years of lower rainfall pumps would need to run up to 24 hours per day during the peak demand period.

25 Distribution System and Outlets. The wells discharge into a division box which directs the flow into a network of canals: the canals are on the average 4.5 km long for a 120 ha cimmand area. The unlined earthen canals, designed to convey about 450 m /hr or 125 1/sec, have a bottom width of 0.4 m, a depth of 0.6 m with water depths ranging from 0.20 to 0.45 depending on the available gradient (0.05 to 0.30 %). The majority of the canals are built in fill in order to ensure adequate command and provided with the necessary control structures and crossings. An overall conveyance loss of 30% from the pump to the 5 ha outlets is assumed. The 5 ha outlets are built in conjunction with check structures provided with wooden stoplogs. As the losses of the unlined canals in certain reaches are expected to be high, the proposed Stage II project provides for lining of 10 km of the most vulnerable reaches. A 1.20 m wide track runs alongside the canals to facilitate O&M and to provide access to the fields. Below the 5 ha outlets farmers are responsible for the construction of field channels and drains. No field channels were constructed so far and only a small proportion of the drainage network proposed under Stage I was implemented (SDV Annex 5). Operation and maintenance of the facilities down to the 5 ha outlets would be the Stage II project's responsibility Completion of Stage I. The proposed Stage II project would finance the Stage I cost overrun to complete the installation of 64 tubewells, the construction of 280 km of distribution and drainage network, 80 km of power transmission lines, 96 km of roads and the project buildings, estimated at US$1.7 million. In addition it would provide funding to compensate for US$0.5 M disbursed from Credit 654 to finance engineering services for the preparation of further irrigation projects in the plains of Nepal (see para 3.05). This is justified as HMGN finds itself unable to provide from its own resources the additional funds required to complete the construction of the Stage I project works. Without completion of these works Stage I objectives would not be achieved. Consequently HMGN requested IDA to provide financing for the balance of the Stage I civil works, materials, equipment and advisory services in the proposed follow-up project. Operation and Maintenance (component of Stage II) 3.19 A special division of the project organization would deal with all aspects of operation and maintenance. This division would have an O&M sub-division and a mechanical engineering sub-division, supported by a workshop equipped with mobile repair units. The O&M sub-division would operate in close cooperation with the agriculture division. The main criteria for operation and maintenance of the Stage I tubewell systems are outlined in SDV, Annex 5. Maintenance works under the project would cover routine and preventive maintenance work, repair of breakdowns and general repairs. The Nepal Electricity Corporation (NEC) would operate, maintain and repair the facilities which supply electricity to each wellhead. These facilities include the Gandak West Hydropower Station, the substations, and the transmission lines up to the electricity meter at each wellhead. In