Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 9521

PROJECT COMPLETION REPORT

REPUBLIC OF YEMEN

TIHAMA III AGRICULTURAL DEVELOPMENT PROJECT(CREDIT 880-YAR)

APRIL 26, 1991

Ag-iculture Operations DivisionCountry Department IIIEurope, Middle East and North Africa Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official dutieŽ. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Currency Equivalents

1 US $ - YRs1981 - 4.561982 ------ 4.561983 -------------- 4.581984 -------------- 5.351985 -------------- 7.361986 -------------- 9.641987 -------------- 10.341988 -------------- 9.771989 -------------- 9.761990 ------------- 11.75

Weights and Measures

1 millimeter (mm) - 0.039 inches1 meter (m) - 3.28 feet1 square meter (m2) = 10.76 square feet1 kilometer (km) - 0.62 mile1 hectare (ha) = 10,000 square meters (2.47 acres)1 metric ton (ton) - 2,205 pounds1 liter (1) - 0.264 gallon1 1/s - one liter per second1 m3/s - one cubic meter per second1 Mm3

- one million cubic meters

Abbreviations and Acronyms Used

CACB - Cooperative and Agricultural Credit BankDM - Deutsche MarkEEC = European Economic CommunityERR = Economic Rate of ReturnIDA - International Development AssociationIFAD - International Fund for Agricultural DevelopmentKD e Kuwaiti DinarKFAED - Kuwait Fund for Arab Economic DevelopmentKfW - Kreditanstau fur WiederaufbauLCCD - Local Councils for Cooperative DevelkmentM&E - Monitoring and EvaluationNESPAK - National Engineering Services, PakistanO&M = Operation and MaintenanceROY - Republic of YemenRVP - Regional Vice PresidentSAR - Staff Appraisal ReportSDR - Special Drawing RightsTDA - Tihama Development Authority

Fiscal Year

January 1 - December 31

THE WORLD BANKWashington. DC 20433

USA

Offiec of Dite tW.GqeAeaIOpetatrns V I t,uimon

April 26, 1991

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on Republic of Yemen Tihama IIIAgricultural DeveloRment Project (Credit 880-YAR)

Attached, for information, is a copy of a report entitled "ProjectCompletion Report on the Project Completion Report on Republic of Yemen TihamaIII Agricultural Development Project (Credit 880-YAR)" prepared by the Europe,Middle East and North Africa Regional Office with Part II of the reportcontributed by the Borrower. No audit of this project has been made by theOperations Eval",ation Department at this time.

This document has a restricted distribution and may be used by recipients only in the performance Iof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.|

FOR OFFICIAL USE ONLY

PROJECT COMPLETION REPORT

REPUBLIC OF YEMENTIHAMA III AGRICULTURAL DEVELOPMENT PROJECT (CR. e0O-YAR)

Table of Contents

PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . .iEVALUATION SUMMARY . . . . . . . . . . . . . . . . . . . . . .ii

PART I PROJECT XEVIEW FROM BANK'S PERSPECTIVE . . . . . . . .1

A. Project Identity . . . . . . . . . . . . . . . . . . . . .1B. Background. C. Project Objectives and Description . . . . . . . . . . . . 2D. Project Design .... . . . . . . . . . . . . . . . . . . 2E. Organization .... . . . . . . . . . . . . . . . . . . . 4F. Project Implementation Results ........................... 4G. Project Cost and Financing ... . . . . . . . . . . . . . 6H. Project Impact . . . . . . . . . . . . . . . . . . . . . . 6I. Economic Rate of Return. 7J. Project Sustainability. 8K. IDA Performance. 8L. Borrower Performance .8M. Consultants. 9N. Project Relationships . . . . . . . . . . . . . . . . . . . 90. Lessons Learned.. ............... 9

PR II PROJECT REVIEW FROM BORROWER'S PERSPECTIVE . . . . . . 11

Introduction .... . . . . . . . . . . . . . . . . . . . . . 12Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . 12Implementation .... . . . . . . . . . . . . . . . . . . . . 12Results ..... . . . . . . . . . . . . . . . . . . . . . . . 13Production Goals .... . . . . . . . . . . . . . . . . . . . 13Project Cost . . . . . . . . . . . . . . . . . . . . . . . . . 14Rate of Return . . . . . . . . . . . . . . . . . . . . . . . . 14Findings and Lessons .... . . . . . . . . . . . . . . . . . 14

PART III SUMMARY STATISTICAL DATA . . . . . . . . . . . . . . 16

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

PROJECT COMPLETION REPORT

REPUBLIC OF YEMENTIHAMA III AGRICULTURAL DEVELOPMENT PROJECT

(CREDIT 880 - YAR)

PREFACE

This is the Project Completion Report (PCR) for the Tihama III(Wadi Mawr) Project in ROY, for which Credit 880 - YAR in the amount of US$15.0 million was approved on March 6, 1979. The Credit was co-financed inseveral currencies by different donors: IFAD (SDR 9.3 million); KFAED (KD 3.6million); KfW (DM 9.1 million); and the EEC (US$3.0 million equivalent). TheCredit was closed on September 30, 1988, three years behind schedule; however,the project accounts were kept open to iNovember 30, 1989, to allow settlementof an outstanding item in the Special Account. IDA served as the executingagency for the IFAD and EEC loans. Of the IDA Credit, US$14,370,188.95 wasdisbursed and the balance amount of US$629,811.05 was cancelled. While theIFAD and EEC loans were fully disbursed, the project had an undisbursedbalance of KD 0.3 million from the KFAED loan, and DM 0.9 million from KfW.

Part II of this document was prepared by the Borrower. The rest ofthe PCR (Preface, Evaluation Summary, Parts I and III) has been prepared bythe Agriculture Operations Division, Country Department III of the Europe,Middle East, and North Africa Region, and is based on the Staff AppraisalReport, the Legal Documents, other project documents, and visits to theproject area.

Preparation of this PCR was started during the Bank's final super-vision mission of the project, and is based, inter alia, on the Staff AppraisalReport; the Loan, Guarantee, and Project Agreements; supervision reports;correspondence between the Bank and the Borrower; and internal Bank memoranda.

- ii -

PROJECT COMPLETION REPORT

REPUBLIC QF YEMENTIHAM4 III AGRICUTURAL DEVELOPMENT PROJECT (CREDIT 880-YAR)

EVALUATION SUMMARY

OBJECTIVES

The main objective of the project was to increase agriculturalproduction ir. Wadi Mawr by: (a) making efficient use of spate flows andhelping recharge the aquifer; (b) strengthening agricultural support servicessuch as extension, research, and credit; and (c) facilitating the movement ofagricultural produce and farm inputs through the construction of feeder roads.The project also aimed at improving the health of the rural poor by providingpotable water supply.

IMPLEMENTATION EXPERIENCE

Project implementation was delayed by four years due to delays ir.recruitment of key project staff, finalization of technical designs, andcumbersome procurement procedures.

The project provided technical assistance tb ough a consultingfirm for assisting TDA in the design, procurement, anL constructionsupervision of works under the project. For reasons of economy and toincorporate lessons learned from other wadis, the cons,-ltants recommendeddesign changes, which were approved by cofinanciers. The main changes indesign were: building one diversion structure instead of two; the addition ofan inverted syphon; revised sediment control measures; and the ̂ limination ofthe gabion dike. 'However, these designs did not take into account adequatelythe traditional water use pattern prior to the project; and this was one ofthe factors responsible for the project being unable to implement the waterallocation plan agreed upon in project design and contributing to inequitabledistribution of water.

The provision of credit for farm inputs and machinery through theCooperative and Agricultural Credit Bank (CACB) was limited by the lack ofadequate collateral by tenants who form the majority of farmers. Aninitiative was jointly undertaken by CACB and TDA to alleviate the collateralissue by borrowing through farmers' organizations, but this effort wasunsuccessful. Adoption of technical recommendations disseminated by theextension service was slow. The research program was successful in improvingthe yield of local wheat varieties, and research is on-going on cropprotection and improvement of fruit and vegetable varieties. Furtherstrengthening of extension and research is underway through the ongoing TihamaV Project, and would continue as part of the proposed National Agriculture

- iii -

Sector Management Project. Tralning was in general effective in providing newskills to local staff, although additional training, particularly in hydrologyand financial controls, is still needed.

The project had a positive impact on regional development throughthe provision of sociai infrastructure, particularly village water supplyschemes, rural roads, and a veterinary center. Also, project organization onthe whole proved to be effective. Although TDA has an M&E unit, its functionwas mainly the collection of data rather than detecting issues at an earlystage to recommend changes in project scope or design when needed.

Economic analysis in TDA's PCR was optimistic: (a) it assumed thatall incremental benefits from well irrigation can be attributei to theproject; (b) cropned area under spate was assumed to increase from 14000 ha in1989 to over 17000 ha in 1993: spate area actually decreased during projectimplementation due to changed cropping patterns and more diversions in theupper part of the wadi; (c) future without project benefits were notconsidered; (d) downstream production loss was assumed to be negligibledespite a significant decline in flow; and (e) the impact of traderestrictions on the importation of fruits and vegetables was not taken intoconsideration. On the other hand, contribution to aquifer recharge and waterquality were excluded because they are difficult to quantify. The SAR's ERRwas 16X, ,while TDA calculated the ERR to be 12.3%. Under more plausibleassumptions, the ERR varies between 4.5% and 9.5%, and was estimated to bearound 6X under the most likely scenario.

SUSTAINAMILIIY

TDA is well managed and staffed, and despite some areas which needstrengthening, it is considered one of the most competent regional developmentauthorities in agriculture in ROY. The continuation of TDA as a competentauthority depends upon: (a) its ability to retain its present staff andrecruit competent staff in areas that need to be beefed up; and (b) adequatefunding of recurrent expenditures.

Due to the shortage of local staff, several positions were filledby expatriate staff. The training of counterparts has partially alleviatedthis problem, but progress in the recruitment/retention of competent staff isslow due to competition from the private sector. Also, the perennial shortageof O&M funding of public spate irrigation schemes endangers the long-runsustainability of the project.

Moreover, unless adequate foreign exchange is made available byGovernment for the importation of inputs, machinery, and equipment, thebenefits from agricultural development would not be fully achieved.

TLESSONS LEARNED

The key findin&of the project is that public spate schemes shouldbe undertaken only after a very careful assessment of the social, technical,and financial aspects. The main lessons are elabor&ted below.

(a) Preparation and Design: Project preparation and design mustbe sufficiently thorough to minimize the need for major changes later. Thepreparation must be advanced enough to allow award of first year contracts

iv

immediately after project effectiveness, and these designs must take irtoconsideration the exDerience of completed projects.

(b) ZEqit: In a society where traditional water rights are anaccepted norm and political commitment to equitable distribution of irrigationwater is difficult to ensure, it is important that these factors are fullyconsidered at the design stage. This can be achieved at two levels:technical design based or. a confirmed assessment of traditional water rightsbefore the project and offtake structures designed to permit waterdistribution with minimum controls; and political commitment to enforce thewater allocation plan agreed upon in project design. This approach is nowbeing followed in the ongoing Tihama V Project.

(c) Prolect Concept: A simplified and less costly design could beeffective in achieving the main objective of improving water use efficiencyand aquifer recharge. The diversion structures and irrigation network in WadiMawr were too sophisticated for this objective. The experience gained in WadiMawr has been used in Wadi Siham (Tihama V Project); designs have beensimplified, unit costs reduced by about 50%, and the scheme would be easier tooperate and maintain.

(d) Cost Recoverv: In countries like ROY where socio-politicaland cultural factors are not conducive to cost recovery, efforts to improvecost recovery should be viewed in a long-term perspective and within thecontext of the process to improve tax collection as a whole. Also, whenGovernment commitment to cost recovery is lacking, the project design shouldfocus on approaches with less taxing fiscal impact.

(e) Aguifer Sustainabilit : The current rates of groundwaterabstraction are not sustainable. The conjunctive use of surface andgroundwater approach that was adopted in earlier projects is being emphasizedeven more in the Tihama V Project, so that these sources of water would notonly supplement each other for irrigation directly, but also improve aquiferrecharge through spate irrigation.

(f) In multi-component area development projects, an effectiveMonitoring and Evaluation system should be able to track projectimplementation, detect problems and issues as they arise, and, if needed,recommend changes in project design or scope.

PROJECT COMPLETION REPORT

ftEPUBLIC OF YEMENTIHAMA III AGRICULTURAL DEVELOPHENT PROJECT (CREDIT 880-YAR)

EVALUATION SUMAY

pART I

PROJECT REVIEW FROM BANK'S PERSPECTIVE

A. PROJECT IDENTITY

Project Name: Tihama Development Project III (Wadi Mawr)Credit Number: 880 - YARRVP Unit: EMENA RegionCountry: Republic of YemenSector: AgricultureSubsecto_r: Irrigation and Agriculture

B. BACKGRQUND

1. The feasibility study of Tihama III (Wadi Mawr) Project was carried outby Tipton and Kalmbach Inc. of the United States, and completed in April 1978.The project was appraised in February 1979, and became effective in February1980. The original closing date of September 30, 1985 was officially extendedthree times to September 30, 1988. However, the project accounts were kept opento November 30, 1989, to allow the settlement of an outstanding payment in theSpecial Account. An undisbursed balance of US$629,811.05, out of the originalcredit amount of US$15.0 million, was cancelled. The project was co-financedby KFAED, IFAD, KfW, and the EEC.

2. This overview is based on a Project Completion Report prepared by theimplementing agency, the Tihama Development Authority (TDA), the Staff AppraisalReport, Legal Documents, visits to the project area, and other project documents.However, it differs from TDA's report on several important issues, particularlyeconomic analysis and equity, the level of design sophistication of irrigationworks, and lessons learned.

3. The project was estimated to cost US$ 87.6 million at appraisal; however,due to the rapid depreciation of the local currency and savings arising frommodifications of irrigation designs, the Actual cost of the project was estimatedto be about US$ 68.2 million.

4. The objective of this overview iL lo evaluate where the project achievedits targets and where it did not or made limited progress only. No attempt ismade to present a detailed account of project implementation which is documentedin the PCR submitted by TDA.

-2-

C. PROJECT OBJECTIVES AND DESCRIPTION

5. The main objectives of the project were the following: (a) increaseagricultural production and farm income in the project area, qadi Mawr, by (i)providing irrigation works for the efficient use of spate flows and rechargingthe aquifer for irrigated agriculture on about 17,000 ha; and (ii) facilitatingthe use of farm ..puts; (b) link the mein population centers and agriculturalareas to facilitate the move.ment of agricultural produce and inputs, throughthe construction of feeder :oads; (c) improve the health of the rural poor byproviding potable water suppiy- , nd (d) assist the Government to aevelop aregional applied agricultural research station and a model production farm atSurdud.

6. The project included: (i) irrigation works comprising (a) constructionof a diversion d'ke and two diversion weirs and related facilities; (b)construction of feeder canals; (c) remodelling of existing irrigation canals;and (d) installation of about 20 experimental tubewells; (ii) agriculturalsupport services for extension, plant protection, and animal health; (iii) shortand medium term agricultural credit; (iv) establishment of the Surdud regionalagricultural research station and crop production farm; (v) construction ofproject headquarters; (vi) construction of about 148 kms of gravel feeder roads;(vii) installation of water supply schemes for about 103 villages; and (viii)providing technical assistance in managerial, engineering, and agriculturalfields.

D. PROJECT DESIGN

7. The Tihama III Project was a continuation of earlier wadi developmentprojects in the Tihama plain, the most important feature of which was harnessingspate flow. One of the main issues in project design concerned the economicjustificatio. of large investments in permanent diversion structures with fairlysophisticated irrigation works for improving the efficiency of spate flows ofkn ephemeral nature. Proponents claimed that public spate schemes have a majorimpact not only on improving surface irrigation efficiency, but also on therecharge of aquifers, and would therefore render both surface and well irrigationmore sustainable in the long run. Critics argued that traditional spateirrigation or simple designs are as effective and less expensive for improvingrecharge. It appears that project design did not fully investigate the latteroptiS.n. It would have been useful to undertake a more comprehensive study ofregional water resources development before finalizing the project concept.

8. IDA missions observed that construction of a permanent wadi diversionscheme has not helped in ensuring an equitable distribution of water. Becauseof their fragility, dikes and bunds in traditional spate irrigation schemes arewashed out by high floods and allow more irrigation by downstream farmers. ThePCR submitted by TDA estimates that flows reaching downstream of the project areahave decreased from 48 Mma to 28 Mm3 (para 5.8), and claims that most of thewater would otherwise have escaped to the Red Sea, and that annual downstreamlosses are about YRls 22,300 only. These estimates are unrealistically low.A 1990 study funded by co-financiers on the equity of water distribution in WadiMawr revealed that the inequity increased following project implementation,particularly the distribution of base flow. The upjer reach Daraaniah secondarycanal with a service area of 950 ha used 100 percent of the available base flowin 1988 and 1989, whereas according to the water allocation plan prepared byproject consultants base flow was expected to be distributed among ten secondary

-3-

canals serving about 4800 ha. Similarly 35 percent of total flow (base & spate)was diverted by the upper reach Daraaniah secondary canal which is about slixtimes of its shere allocated under the water allocation plan. Moreover, due tosome difficulties during construction, TDA %ith participation of the Ministryof Agriculture and the Covernor of Hedeidah, signed an agreement with theDaraaniah Canal farmers that they would have full control of the offtake totheir secondary canal. This signed agreement makes it difficult for TDA toeffectively carry out any water allocation plan. The study on water regular-onprovided in the project and carried out by TDA with the help of consultantsto serve as the basis for the equitable water allocation plan agreed upon inproject design. This plan did not consider water use prior to the project ateach offtake point and its implementation was based on strict measurement offlow, using gates and devices most of which never worked. The plan was notenforced due to failure of measuring devices, the signed agreement between TDAand Daraaniah secondary canal farmers, the complex nature of designed structureswhich require frequent operation and control of gates to avoid tampering by thefarmers, and most important, the politicel consideration given to some of theinfluential beneficiaries.

9. Cost recovery could to some extent be considered an issue of projectdesign. Under traditional spate irrigation, Government had no fiscal obligation;beneficiaries built and maintained main and secondary canals, dikes and bunds,and hired "water masters" to resolve disputes relating to water rights and tosupervise the rehabilitation or rebuilding of damaged canals. Designs of publicspate schemes in the Tihama plain, aiming at better water management, envisagedlevying a water charge, in addition to zakat (a religious ti'the), equiva]nt to2% of the gross value of agricultural production, to cover investment and O&Mcosts without interest over a period of 50 years. At IDA's insistence,Government enacted regulations for cost recovery as agreed' at appraisal, butthese regulations were not effective as the recovery of the basic zakat tax, onwhich the water charge is a surcharge, is low. Although data are not availablefor Wadi Mawr, tentative data for Wadi Zabeed and Wadi Rima indicate that costrecovery is low and falling (from 14% of loans due in 1985 to 5% in 1988).Similar results are expected in Wadi Mawr. The sociopolitical aspects and lackof commitment related to levying water charges resulted in ineffective collection(para 40(d)].

10. The technical designs of the irrigation scheme in Wadi Mawr are in linewith those applied to perennial schemes and are sophisticated for a spateirrigation system. Experience in other countries has shown that simplerstructures of masonry construction and low cost weirs, coupled with fuse plugsto ensure safety during high floods, could have been equally effective.

11. Issues relating to water rights and cost recovery were raised in the IssuesPaper and later addressed in the Staff Appraisal Report. Solutions proposed inthe SAR were meant to resolve these issues: the water allocation plan, ifimplemented, would have distributed water equitably; similarly, enforcement ofenacted regulations would have recovered investment and O&M costs. Unfortunately,and following project implementation, the equity issue became worsa and the costrecovery issue remained unresolved (paras 8 and 9). With hindsight, it appearsthat project preparation and appraisal did not pay adequate attention to theabove issues.

-4-

E. ORGANI7ATION

12. TDA, a semi-aui:L.nomous oody established as a developmental agency for theTihama plain, was responsible for project implementation. Like other projectsunder TDA, the Wadi Mawr project was headed by a project manager who was directlyresponsible te the chairman.

13. On the whole, project organization proved effective. The main constraintswhich faced the project related to the shortage of local staff, particularly'forthe operation of irrigation facilities, hydrologists, financialmanagement/controls, and "he M&E unit.

F. PROJECT IMPLEMENTATION AND RESULTS

14. Conditions of effectiveness, in addition to official ratification,includ_d meeting conditions of effectiveness of the IFAD loan and signing co.financiers' agreements; as a result, the credit agreement was signed in April1979, but the project only became effective in February 1980. Project completionwas delayed by four years. Initial project start-up was delayed by two yearson account of delays in the selection of a consulting firm and the recruitmentof key project staff. Delays in the execution of c Ivil works were caused bydelays in finalizing detailed designs and protracted procurement procedures.

15. Irrigation Works. TDA appointed Sir M. MacDonald and Partners (MMP), forthe design of irrigation works. MMP's recommendations made in their inceptionreport, and refined further during detailed designs, namely, the elimination ofthe gabion dike, building one diversion structure instead of two, sedimentsluicing and desilting basins, and the addition of one inverted syphon, wereaccepted by TDA and approved by co-financiers. Design changes were madefollowing appraisal -o reduce costs and to incorporate technical lessons learnedfrom the recent expei. ,nce in other wadis in the region where similar projectswere already undertaken; this, however, should have been considered duringproject preparation or initially by MMP consultants.

16. Training. The project provided funding for 128 man-months of short termoverseas training of extension agents in Arab countries (80 mm) and counterpartsto experts (48 mm). Five scholarships in agriculture were offered for overseastraining. In addition, 35 staff were trained in extension (14), agronomy (6),engineering (5), technicians (8), and other areas (2). Training was, in general,effective in providing new skills to local staff, although additional training,particularly in hydrology and financial controls, is needed.

17. Technical Assistance. The project provided for the services of aconsulting firm (about 460 man-months) to assist TDA in the design, procurement,and construction supervision of works under the project. The firm selected,MMP consultants, also prepared the Operations and Maintenance Manual, and crainedcounterparts. As pointed out earlier, the designs of irrigation works preparedby the consultants were too sophisticated for the spate diversion scheme and mostof the measuring devices failed to function within 3 or 4 months of operation.The training of counterparts for the O&M of the scheme was partially successful.In addition, TDA signed an agreement with O.I.Farming Co. for the management ofthe production farm at Surdud for two years. The consultants carried out thefarm machinery rehabilitation program, and initiated the model production farm;

-5-

but due to consultants' staffing and management problems, Government terminatedthe consultancy contract and assumed supervision of the production componentthrough local staff, with modest results.

18. Reseach. The seed multiplication program at Surdud farm has beensuccessful in improving the yield of iocal wheat varieties. However, farmershave been slow to adopt these varieties due to taste, color, and input and waterrequirements. Research at the farm is ongoing in other areas under thesupervision of the national research authority, particularly for improvedvarieties of fruits and vegetables and plant disease control. It is prematureto assess its effectiveness.

19. Extension. The dissemination of technical information by the extensionservice in the project area has introduced farmers to new practices and inputsfor raising yields. Extension agents received on-the-job training by subjectmatter specialists. They trained 82 village leaders, who in turn reached over2,000 farmtars; but adoption by farmers has been slow. Extension service beingnew in the area should have had extensive demonstrations to convince farmers ofthe benefits of improved packages and practices. This was lacking and theservice was only partially effective. Demonstration farms are now beingestablished and further strengthening of the extension service, along withresearch, has been undertaken as part of the ongoing Tihama V Project (Credit1667 - YAR), and would continue as part of the proposed National AgricultureSector Management Project.

20. Agricultural Credit. The Cooperative a.ad Agricultural Credit Bank (CACB)provided short- and medium-term credit for the purchase of inputs (part5-ularlyfertilizer), and farm machinery and equipment. The use of inputs and, to someextent machinery, has been limited by the shortage of foreign exchange, sincethe project was not designed to meet the input needs of the entire project area.This became critical following ROY's deteriorating economic condition. Animportant problem encountered in the extension of credit is the inadequatecollateral available to the majority of borrowers who are tenants; a joint butweak effort by TDA and CAGB is currently underway to overcome this obstacle,possibly by borrowing through farmers' cooperatives or other organizations whichwould guarantee members' loans.

21. Other Infrastructure. Thirty-five houses, three dormitories, an officebuilding and a veterinary center were built at the project headquarters in Zuhra,in addition to eight housing units at the Surdud farm. In all, 10 extensioncenters were built to serve over 50,000 beneficiaries in the project area. Ofthe 103 village water supply schemes planned at appraisal, 71 were built; also,111 kms of the planned 148 kms of gravel access roads were built. Thesereductions reflect further assessment of project needs, including the type andsize of water supply schemes and the improved quality of roads, and to someextenz inadequate project preparation. Some of the water supply schemes hadhand-operated pumps which were accepted by. '..llagers only after the communitiesconcerned, through Local Councils for Cooperative Development (LCCDs), wereallowed to install power-operated pumps for fiiling storage tanks. The projectobjectives were met with the revised scope. A comparison f the main projectcomponents as envisaged at appraisal and those actually implemented is given inPart III, Table 4.

22. Stdies. The project provided for two studies to be carried out: (a) Astudy on water regulation, with a view to ensuring an equitable distribution of

-6-

spate and base flows in the project area. As indicated earlier (para 8), inthe absence of information on area served and flow withdrawn at each offtake,failure of measuring devices, and socio-political reasons, the water allocationplan was not carried out. (b) A study on land tenure and crop/cost sharingarrangements, with a view to ensure a more equitable crop and cost sharingsystem. The study was completed, but has not been distributed and itsrecommendations concerning changes in the tenancy system have not beenimplemented due to their social and political implications.

23. Monitoring and Evaluation. The project's monitoring and evaluation unitwas established after a slow project start. However, this unit was more involvedin collecting statistical data than identifying issues of project or irrigationdesign, and trying to modify project scope when needed; therefore, itsef2ectiveness was limited.

G. PROJECT COST AND FINANCING

24. Project cost was estimated at appraisal to be US$ 87.6 million, about 40Xof which was expected to be local financing. However, actual cost has beenestimated at US$ 68.2 million due to currency depreciation and savings frommodification of irrigation designs. The project was co-financed in severalcurrencies by different donors: IDA (US$ 15.0 million), IFAD (SDR 9.3 million),X'FAED (KD 3.6 million), KfW (DM 9.1 million), and the EEC (various currenciesequivalent to US$ 3.0 million). While the IFAD and EEC loans were fullydisbursed, the project had an undisbursed balance of US$0.6 million from the IDAcredit, DH 0.9 million from KNW, and KD 0.3 million from the KFAED loan, whichhad to be cancelled.

H. PROJZCT IMPACT

25. The project had a positive impact on regional development through theprovision of social infrastructure, particularly the installation of urgentlyneeded village water supply systems and the construction of rural roads. Ruralroads have contributed to increased economic activity such as the establishmentof workshops, improved market accessibility and reduced spoilage, and thereplacement of animal transportation by vehicles. The project also providedconsiderable direct and indirect employment opportunities in the project areain ancillary activities as a result of a more robust regional economic climate.

26. Records kept by TDA indicate that the cropped area under spate irrigationfell from 15,000 ha before the proJect, to 14,100 ha in 1988, though TDA isprojecting this to increase to 17.200 ha at full development; this compares withSAR projections of 18,000 ha at full development. Areas under well irrigationincreased in the same period from 2,500 ha to over 4,600 ha (compared with theSAR target of 4,000 ha).

27. Available data indicates that SAR yield projections were somewhat over-estimated, particularly for cereals and cotton in spate irrigated areas, butalso for some vegetables under well irrigation. This is partly due to the lackof foreign exchange and farmer resistance to use inputs for cereals. However,the yield of melons exceeded SAR targets. Sorghum and millet remain the majorcrops, while maize production has not increased as expected, possibly due tocompetition from melons, which are increasingly being cropped (area increasedfrom 150 ha to over 1,400 ha - projected to increase further at full development- and yields doubled). The production of fruits and vegetables in well irrigated

7-

areas increased considerably - the bulk of the increase appears to be due toprivate initiative and the import ban in effect against these crops. Thelivestock population increased significantly due to improved vaccination, butalso as a result of import restrictiois on meat.

I. ECONOMIC RATE OF RETURN

28. The economic rate ef return (ERR) was estimated by the SAR (excludingbenefits of village wate; :pply schemes, veterinary iervice, applied researchand sead multiplication Surdud farm, and the impact of extension and crediton rainfed areas), to l' _.,. The PCR prepared by TDA, using similar assumptionsbut including veterin..- c-.sts and benefits, estimated the ERR to be 12.3Z forthe project as a wholh, -lid 11 9% when the Surdud farm is excluded from theanalysis.

29. The economic analysis i.n tei PCR submitted by TDA, however, is optimistic:(a) it assumes that spate ivrigated area would increase from 14,100 ha in 1988to 17,200 ha at full development (1993) even though cropped area under spateirrigation actually decreased following implementation due to changing croppingpattern and increased diversion of water in the upper reaches of the wadi; (b)future without project benefits are not considered; (c) estimated livestockbenefits arising from the vaccination and veterinary program, which represent10-16X of incremental project benefits, are high; (d) downstream production lossis assumed to be nesligible; and (e) all benefits from ground water irrigationare attributed to the project, thus assuming all well irrigation developmentwould take place only because of the project. On the other hand, the analysisdid not include as benefits the contribution to aquifer recharge, which isdifficult to quantify.

30. Economic analysis based on TDA's PCR, but using more plausibleassumptions, indicates that the project ERR, including the Surdud farm, wouldfall within the range of 4.5 -9.5%, depending on the assumptions used (Part III,Table 9). It is believed that under the most likely scenario', the ERR would bearound 6X.

31. These results indicate that sophisticated permanent diversion structuresof the type built in Wadi Mawr are not economically viable by themselves, eventhough agricultural development projects as a whole may be economic. Publicspate irrigation schemes should be undertaken only if: the volume cf incrementalwater diversion and the size of the cropped area are significant (as in WadiSiham, where incremental water diverted would otherwise be lost in adjacent sand

'The following proportion of benefits in TDA's PCR were assumed to beattributed to the project: spate areas: 0.50; well areas: 0.25; andveterinary costs and benefits were excluded from the analysis. These arebased on the following considerations. Spate: assumed area unlikely tobe achieved; economiz prices of melons should be lower than financial dueto trade restrictions. Wells: this is primarily private initiativeencouraged by restrictive trade policy, but it is also aided to some extentby rural roads, extension and research; economic prices should be used.Veterinary: benefits of veterinarian and support staff assumed to be 5Xof financial value of animals increasing by 5X annually are overestimated;therefore, both incremental costs and benefits were excluded from theanalysis.

dunes); beneficiaries downstream of the diversion structures will not be deprivedof their existing traditional water rights; such diversions would make asignificant contribution to the recharge of the aquifer; equity issues areresolved through irrigation designs and enforcement of water allocation plansby authorities; designs are considerably simplified to reduce cost and ensureease of operation; and a credible cost recovery mechanism is ensured.

J. PROJECT SUSTAINABILITY

32. TDA is well managed and staffed, and despite some areas which needstrengthening, it is considered one of the most competent regional authoritiesin agriculture in ROY. The continuation of TDA as a competent authority dependsupon its ability to retain and recruit competent staff, and adequate funding ofrecurrent expenditures.

33. Due to the shortage of local staff, several positions in engineering andagriculture were filled by expatriates. The training of local counterparts haspartially alleviated this problem, but is proceeding slowly. Competition fromthe private sector in the employment/retention of competent staff could weakenthe performance of the project at its current level. Also, the perennialshortage of O&M funding of public spate irrigation schemes endangers the long-run sustainability of the project.

34. Unless more forei~gn exchange for agricultural credit is made available byGovernment to import agricultural inputs, the benefits from inputs and farmmachinery and equipment would be considerably less than expected at fulldevelopment.

K. IDA PERFORMANCE

35. IDA maintained continuous contact with the project authorities throughregular supervision missions; during the 1980-88 project implementation period,12 missions supervised the project. IDA assisted in project implementation,particularly the technical aspects relating to irrigation designs. IDA alsoassisted in the identification of expatriate staff recruited by the project, andhelped in expediting procurement. It can, however, be argued that: (a) appraisaland supervision missions should have paid more attention to the issues of equity,and cost recovery; and (b) IDA should have been more involved in the preparationof a practical water allocation plan and taken a stronger position with ROYauthorities regarding its enforcement.

L. BORROWER PERFORMANCE

36. From a technical point of view, the project was satisfactorily managedthrough the appointment of a qualified project manager and expatriate and localstaff. The physical implementation of irrigation and civil works wassatisfactory, but experienced delays due to a late start, changing irrigationdesigns, and procurement procedures. The Borrower met IDA credit covenants onaudits and progress reports and studies on a water allocation plan and landtenure, albeit with delays; however, the recommendations of the studies werenot enforced.

37. For socio-political reasons, the Borrower gave up control of a crucialpart of the water delivery system to influential farmers and did not enforce theallocation plan to bring about equity in water distribution. Also, the Borrower

-9

did not show a strong commitment to the principle of cost recovery.

M. CONSULTANTS

38. The consultant engaged for project design and supervision of implementationwas a well-known international firm with experienced engineers on its team.However, the consultant failed to take into account: (a) the experience ofcompleted projects regarding the feasibility of enforcing the water allocationplan without determining areas under irrigation before the project; and (b) theincorporation of such a plan in the technical designs of various structures.Also, project designs were too sophisticated for a spate irrigation system. Theperformance of the consulting firm hired to manage the Surdud model farm was notsatisfactory due to its staffing and management problems; therefore, theconsultancy contract was terminated by Government.

N. PROJECT RELATIONSHIPS

39. IDA, TDA, and the co-financiers maintained a very cordial relationship.Even when disagreements regarding policies or technical designs arose, thesewere discussed in an open and frank atmosphere. Also, TDA cooperated closelywith supervision missions, and provided data requested in a timely manner.

0. LESSONS LEARNED

40. The main findings and lessons learned are the following:

(a) Preparation and Design: Project preparation and design must besufficiently thorough to minimize the need for major changes later.The preparation must be advanced enough to allow award of first yearcontracts immediataly after project effectiveness, and these designsmust take into consideration the experience of completed projects.

(b) Equity: Project design should preserve established water rights.This can be achieved at two levels: incorporate in technical designsfeatures that regulate the volume of water that can be diverted atofftakes; and political commitment to enforce the watet allocationplan agreed upon in project design. Political commitment toequitable distribution of irrigation water in Yemen is difficult;therefore, appropriate technical designs preserving traditional waterrights with minimum control should be applied. This approach is nowbeing followed in the ongoing Tihama V Project.

(c) Proiect Concegt: A simplified and less costly design could beeffective in achieving the main objective of improving water useefficiency and aquifer recharge.. The diversion structures andirrigation network in Wadi Mawr were too sophisticated for thisobjective. The experience gained in Wadi Mawr has been used in WadiSiham (Tihama V Project): designs of diversion and irrigationfacilities have been simplified, costs reduced by about 50%, andthe scheme would be easier to operate and maintain.

(d) Cost Recovery: In countries like ROY where socio-political andcultural factors are not conducive to cost recovery, efforts toimprove cost recovery should be viewed in a long-term perspective

- 10 -

and within the context of the process to improve tax collection asa whole. Also, where Government commitment to cost recovery islacking, the project design should focus on approaches whose fiscalimpact is less taxing.

(e) Aquifer Sustainability: The current rates of groundwater abstractionare not sustainable. The conjunctive use of surface and groundwaterapproach that ' s adopted in earlier projects is appropriate, andwould be emphasized even more in the Tihama V Project, so that thesesources of water would not only supplement each other for irrigationdirectly, but also improve aquifer recharge through spate irrigation.

(f) In multi-component area development projects, an effective Monitoringand Evaluation system should be established at an early stage totrack project implementation, detect problems and issues as theyarise, and, if needed, recommend changes in project design or scope.

- 11 -

PROJECT COMPLETION REPORT

REPUBLIC OF YEMENTIHAMA III AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 880-YAR)

EVALUATION SUMMARY

PART II

PROJECT REVIEW FROM BORROWER'S PERSPECTIVE

The Tihama Development Authority (TDA), the implem.ting agency, prepareda Project Completion Report. following considerable delays and modifications,the PCR was submitted to IDA in February, 1990. The summary of the Borrower PCRis included herein on Part II. The full text of the Borrower PCR is availableupon request from OED or the Region.

- 12 -

YEMEN ARAB REPUBLIC

TIBAKA DEVELOPMENT PROJECT - III(WADI MAWR)

PROJECT COMPLETION REPORT

SUMMARY

INTRODUCTION

Feasibility study of Wadi Mawr Project carried out by M/S Tiptonand Kalmbach Inc., was completed in January, 1979. StaffAppraisal Report was, later, prepared in 1979 by InternationalDevelopment Association (IDA)to evaluate the viability of theproject. Based on the Mission's Report IDA, KFAED and severalother co-financers agreed to finance the project and IDA loanbecame effective in February, 1980.

OBJECTIVES

The project concept evolved from a feasibility study of WadiZabid which was later expanded to include a reconnaissance studyof Wadi Mawr. The objectives of the Wadi Mawr development wasto: (i) provide appropriate irrigation works and infrastructurefor the development area to substantially increase theagriculture production, (ii) provide roads to important centersof population and agriculture, (iii) improve the health andnutrition of rural population by providing potable water supplyand a wide range of crops, (iv) assist the Government to developa regional applied agricultural research station of Surdud, and(v) establish administrative authority for operating andmaintaining the irrigation works,

The project consists of agricultural development of about 17,000hectares in Wadi Mawr by irrigation improvement, infrastructuredevelopment and agricultural services. The completed irrigationworks consist of 1 diversion structure, 1 bifurcation structure,1 flushing sluice structure including sediment removal works, 4.2km long combined head reach canal, 19.37 km long North SupplyCanal, 24.5 km long South Supply Canal with a network of primarycanals, structures, and farm turnouts. Other Wadi Mawr projectworks consist of about 59 km long access and farm roads, 71village water supply schemes, project headquarter Az-Zahra,Surdud Farm, agriculture extension centres, offices, Ware housesand Veterinary Centres.

IMPLEMENTATION SCHEDULE

The implementation of the project was impeded by 4 yearsincluding 2 years delay in start-up and 2 years in completion.

- 13 -

The delay initially was due to the disagreement of the DonarAgency (KFAED) with the conclusions and recommendations of TDA'sEvaluation Report for selection of Consultants, and then re-invitation of the proposals on the basis of the revised terms ofreference. Eventually the selected Consultants (MMP) becameoperative in February, 1982. The first civil contract wasawarded in April, 1983. The execution of civil works was delayedby non-availability of the technical and professional staff,delays in procurement of material due to import policies,shipment, port and custom clearance; and because of policies onimmigration, land acquisition etc.

Several design aspects of the Project were changed during thecourse of the design as well as during construction phase. TDAset up a Design Review Panel in April, 1985 to review the designfloods, sediment entering the canal system, sediment removalworks and design of the canal system. The major changes affectedin the design were: (i) replacement of Sediment Removal Workswith Flushing Sluice Structure, (ii) addition of Vortex Tubes toeject gravel and coarse sand, (iii) addition of settling basinsand changes in the bed slopes of the main North and South Canals.

RESULTS

The project has made substantial efforts to utilize and optimizethe spate flows through the intake structures and canaldistribution system and thus increase crop production. Thepositive impact on production has been unequivocally acknowledgedby farmers and other observers. To the extent possible, the PCRteam collected additional information from farmers in the projectarea.

PRODUCTION GOALS

The production goals of the project in the Appraisal report wereto increase the production of grains from 19,760 tons to 37,230,industrial crops from 1,660 tons to 7,760 tons, fruits and;egetables from 3,610 tons to 41,140 tons. The status at presentand at full development is shown overleaf:

- 14 -

At Present At Full Development

Without With WithProject Project Project(Tons) (Tons) (Tons)

Grains 19,760 25,421 47,669

Industrial Crops 1,660 2,475 3,182

Fruits & 3,610 26,494 40,180vegetables

PROJECT COST

The project cost is approximately 610 Million Yemeni Riyals (63million US Dollars) as against provision of 394 million Riyals(87.6 million US Dollars) in Appraisal Report.

The actual cost in terms of US dollars decreased by about i8%,however in terms of Yemeni Rials it increased by about 55%. TheVariation in cost is due to price fluctuations, changes inexchange rates and delay in implementacion.

RATE OF RETURN

The Economic Internal Rate of Return (EIRR) has been worked outas 12.27 percentwith a benefit cost ratio of 1.03 at 12 percent discount rate.Economic Rate of Return for the project was calculated as 17percent in SAR against presently calculated figure of 12.27percent.

FINDINGS AND LESSONS

Lessoi.s learned from Wadi Mawr Project must guide the design ofcther similar Projects to be undertaken subsequently. IDAinvolvement is rightly recommended so as to provide opportunityto consolidate gains achieved under earlier projects, and to makenecessary changes in the program. to efficiently translate theprevious experience into increased agriculture production and toimprove maintenance of channels and structures. Following isrecommended for future projects;

1) Water Distribution Associations need to be established forequitable distribution of water throughout the command area,

- 15 -

for maintenance of fields by farmers through land levellingand, for. magement. of field ditches and. to ensure equitabledistribution of water.

2) Monitoring and evaluation of the project be carried outvigorously.

3) The emphasis on agriculture, research and extension servicesmust continue to provide research information,demonstrations and assistance in the availability ofagricultural inputs.

4) The operation and regular maintenance of irrigation net workand other infrastructures is imperative for the success ofthe Project.

5) Part of the operation and maintenance cost of the Project isrecommended to be recovered from the farmers according tothe share of water received by them.

6) Extension services need to assume an expanded role.

7) Infrastrucure for spate irrigation be developed, preferablyat the lower end of Wadi for avoiding water right issues andfor equitable water distribution.

8) There is need for intensive demonstration work in spateareas as the farmers are not yet familiar with the moderntechnology and input application. Fertilizer used by thefarmers of spate area is only a small fraction of the totalneed.

- 16 -

PROJECT COMPLETION REPORT

REPUBLIC OF YEMENTIHAMA III AGRICULTURAL DEVELOPMENT PROJECT (CREDIT 880-YAR)

EVALUATION S Y

PART III

STATISTICAL DATA

Table 1. Relatec Sank Loans anogor Credits

Loan/Credit TitLe IDA Cr./Loan Amt. ApprovaL Year Status

(USS in miltion)

1. CR 376 Tihama Development 1 21.2 1973 CLosed

2. CR 545 SUROP I 10.0 1976 Closed

3: CR 805 Tihama Development 11 (Wadi Rima) 10.5 1978 CLosed

4. CR 978 Tihama Development IV (Wadi Rima II) 10.0 1979 Closed

5. CR 1067 SURDP II 17.0 1981 Closed

6. CR 1453 Central Highland Agriculture Development 8.0 1984 On-going

7. CR 1584 Wadi Al Jawf Agriculture DeveLopment 10.0 1985 On-going

8. CR 1667 Tihama V 10.0 1986 Cm-going

9. CR 1772 SRADP 12.3 1987 On-going

10. CR 1886 Agriculture Development (Northern Region) 17.6 1988 On-going

11. CR 1983 Agriculture Development (Eastern Region) 15.0 1989 On-going

SURDP: Southern Upland Rural Development Project.

SRADP: Southern Rural Agriculture DeveLopment Project.

1Not Yet Effective.

- 17 -

able 2. PROJECT TINETABL

Itm Date Ptanned Date Revised I Date Actumt

Identification

-Fo Lows-up(Executive Project Sunmmry) IPrep4ration I 04/1978

-Preapprsisal

Appraisel Mission M Mrt, ¶978 | ay-June 19781/

- Credit Negotiations | Dec. 11, 1978 Ja:.. 9-15, 1979I.I I

Board Approval | Feb. 22, 1979 j March 06, 1979

-Credit Signature March, 1979 April, 1979r

Credit Effectiveness July, 1979 February, 1980

Project Coapletion Sep. 30, 1984 Sep. 30, 1988 | September, 1988

- Credit Closing Sep. 30, 1984 Sep 30, 1988 I September 30, 1988

Last Disbursement Nov. 3, 19891 (USS35,308.61)

1/ Appraisat Mission Members: 1. KhouriM. FairtessM. S. Fukuda-ParrN. EisaM. A. Mien

- 18 -

Tablo 3. Cululative Estimated and Actual Disbu*somennt(US$ million)

Financial Appraisal Rovisod Actual DisbursementsYoar Estimtos Estimtes Porcent Disbursed

Us $ Actt%al 2 of ug totalApproisal Allocatod IDA credit

1980 1.0 _ _

1981 4.5 0.11 0.16 3.62 1.02

1982 9.0 0.50 1.36 15.12 9.02

1983 13.4 4.00 . 2.55 26.42 17.0o

1984 15.0 10.00 4.36 32.52 29.02

1985 - 13.50 7.06 47.02 47.02

1986 15.00 9.15 81.02 61.02

1987 _ 12.44 82.9X 82.09

1988 _ 13.78 91.92 91.92

1989 _ _ 14.37 958X. 95.86

- 19 - Page I of 2

Table 4. PROJECT IMPLEMENTATION

Appraisal Actual (orIndicators Estimate PCR Estimate)

Irrigation Work

- Diversion structure 2 1- Bifurcation structure 1- Gabion Dike for Daraaniah Canal 1 -

- Syphon Underpass --Flushing slice structure 1- Trash By-pass -

Canals

- Combined Head Reach Supply Canal - 4.84 Km- North Supply Canal 56 Km 37.77 Km- South Supply Canal 44 Kt 41.99 Km

Total length 1020 K 84.60 Km

Canal structures *

- Cross Regulators' 32- Fali Structure - 36- Primarv Canal offtakes H.A. 36- Pipe orftakes S.P. 34- Box culverts 4- Canal crossing for vechicles 15- Canal crossing for predestrain 55

Area commanded fNet) served by:

- Combined Head Reach Supply Canal 95(. ha - . 950 ha- North Supply Canal 8,400 ha 5,170 ha- South Supply Canal 9,500 ha 10,740 ha

Access and Farm Roads:

- 7.0 meter wide roads - 58.8 Km- 6.0 meter wide roads 28 Km 10.6 Km- 4.5 meter wide roads 116 Km 41.8 Km- 3.5 meter wide roads 4 Km -

Total length 148 Km 111.2 Km

* Designs modified following appraisal. . Cont. on next page

- 20- Page 2 of 2

Cont. project implementation

Anpraisal Actual (orIndicators Estimate PCR Estimate)

Village water suoplv schemes:

- Level A 13 1- Level B 10 11- Level C 29 15- Level D 51 44

Total: 10

Pit Latrines: - 63

Buildings:

- Project Headquarters (Al-Zuhra)- Two Bedroom House 20 20- Three Bedroom house 14 14- Six Bedroom house l 1- Domitories 3 3- Offices 1 1- Veterinary Center(Office and clinic) 1+1 1

(combined)* General Building 1 1

- Extension Center 9 10

- Surdud Farm- Two Bedroom House 6 5- Three Bedroom House 6 2- Six Bedroom House 2 1

Comments:

Level A - Well equipped with pump of 4 L/sec capacity *1th 100 cu.mElevated Tank, 6 points and 4 pit latrines.

Level B - Well equipped with pump of 4 L/sec capacity with 50 cu.mElevated Tank, 3 point and 2 pit latrines.

Level C - Well equipped with pump of 1.2 L/sec capacity with 16 cu.mlow level Tank, l point and 2 pit latrines.

Level D - Well with well Head Structure, one hand pump of 1.2 L/sec-capacity, one ground level storage tank of 4 cu.m capacity,1 point and 4 pit latiines.

.~~~~~~~~~~~~~~~~~~~~~~~

Proiect Costs and Financing

Table 5 (a). PROJECT COSTS(USS in million)

APMRAISAL ESTIPATES ACTUAL

ITEMS Local Foreign TOTAL Local Foreign TOTALExchang Exchange

- Project Management and Engineering 2.5 5.1 7.6 6.3 9.0 15.31'

- Extension and Veterinary Services. 1.2 1.2 2.4 1.5 1.1 2.6

- Agricultural Credit 0.8 2.2 3.0 1.5. 1.5 3.0 est.

- Irrigation Work 7.2 17.0 24.2 5;0 21.8 26.8

- Project Keadquarters * 1.5 2.3 3.8 1.0 1.6 2.6

- Access Roads 3.4 4.1 7.5 1.6 4.9 6.>

- Viltage water Supply 0.8 2.4 3.2 0.2 4.0 4.2

- Sur&ad Farm 3.8 4.0 7.8 3.7 3.5 7.2

- Contingencies n Physical 1.5 3.0 4.5 .C

E Price 17.3 6.3 23.6 _

TOTAL ESTINAT- AND ACTUAL COST: 40.0 47.6 87.6 20.8 47.4 68.2

I/ Significant Increase in cost is due to project delays which resulted In higher contingencies particularly for consultants.

- 22 -

Tablg .tb.. PROJECT FINANCING

(US$ million equivalent)

AppraisalReport Actual

Source Estimates

IDA 15.0 14.4

- Co-FinancingInscitutions

- IFAD 12.0 11.0- ECC 3.0 3.0- KFAED 6.0- Other 21.6

- Other ExternalSource

- UK- KfW . 4.0

-Domestic

- Government 35.0 28.8- CACB & Bene- . 1.0 1.0

ficiaries

87.6 68.2TOTAL

- 23 -

PROJECT RES=TS

Table Va). DIRECT BENEFITS

SAR TDAEstimated at Est. at full Closing Full

Indicators closing date development. Date Dev.

Cropped Area(hectares) N.A. 22,000 18,740 22,000

Production (Tons)

Sorghum N.A. 24,860 16,640 21,530Maize N.A. 11,470 250 360Melons N.A. 21,340 21,800 32,100Onions & Vegetables N.A. 12,360 3,220. 5,420Fruits N.A. 3,310 3,000 2,640

Number of Beneficiaries N.A. 53,000 50,000 50,000

Water Schemes 103 schemes 103 schemes 71 71

Access & Farm Roads 148 Km . 148 Km 111 111

Canals (length). * . . 100 Km 85 Km 85 85

EmploymentCmanyear)

- Family Farm Labor N.A. 1300 1000 1300- Hired Labor F.A. 2300 1500 2300

- 24 -

Table 6(b). ECONOMIC/FINANCIAL IMPACT

(Full Developrient)

Indicative .SAR TDA . IDARate of Return

Economic Rate of Return

- Without Surdud Farm 16 percent 12.3- With Surdud Farm 17 percent 11.9 6.0

-25-

Tablg 6(c). STUDIES

Purpose as defined at Impact ofStudies Appraisal Status Study

Water Regulation To ensure an equitable AgreedStudy distribution of the Wadi's recomme-

annual flows to the various dationscanals in the system. Complied were not

enforced.

Land Tenure Study Improve equity in crop Complied Study shelvedand cost sharing due to

social,politicalimplications

- 26 -

Tablg 6(d).. 2ICREASE In CROPPED AREAS

SsAff AngrAisal ReDort TDAPreProject Full Dev. Closing Date Full Devt.

(1988)

SPATE IRRIGATION

Sorghum White 7400 8400 9090 10326Sorghum Red 4000 1100 800 950Sesame 1500 1700 1021 1205Millet 1600 1200 1271 1499Cocton 200 1600 241 284Maize 150 2500 127 149Water Melon 90 450 545 643Sweet Melon 70 550 878 1036Onion & Vegecables 0 500 93 132Fruits 0 0 46 60

TOTAL 15000 18000 14112 17234

WELL IRRIGATION

Sorghum 'White 1400 1250 2400 2460Sorghum Red 650 0 260 . 267Sesame 200 600 729 747Millet 0 0 _ 0Cotton 20 200 242 248Maize 50 1200 10 10Water Melon 60 200 458 469SweeE Melor. 50 200 . 356 364Onio;i 20 150 6 6Tomatoes & ocher.Vegs. 40 150 143 147Papaya & other Fruits .10 50 20 21Tobacco 0 0 6 6

TOTAL 2500 4000 4630 4745

Source: SAR, TDA (NESPAK)

- 27 -

jfBL 6 (e)YIELD LEVELS PROJECTED AND ACHIEVED -Kgs./ha.

Crop Base SAR Projection Actual1Year Without

SPATE IRRIGATION

Sorghum white 973 973 1529 1300Sorghum white ratoon 487 487 765 650Sorghum red 626 626 1390 1100Millet 584 584 1112 650Maize 973 973 2691 1800Cotton 973 973 2363 1100Sesame 695 695 1168 1100Onion - 15290 11000Wacer Melon 5560 5560 13066 11000Sweet Melon 5004 5004 12510 11000

WELL IRRIGATION

Sorghum white . 1112 1112 1807 1500Sorghum white ratoon 556 556 904 650Sorghum red 834 834 - 1300.Maize 1112 1112 3197 2200Cotton 1251 1251 2710 1600Sesame 695 695 1251 1100Tomato 11815 11815 24742 15000Onion 8340 8340 18070 10000Water Melon 6950 6950 14455 9000Sweet Melon 5560 5560 13900 8000

Source: TDA's PCR.

L/ At full development after 15 years.

Page 1 of .2

Table 7. TABLE OF COVENANTS

Covenant Description Status Remarks

Sec. 3.02 (a)(i) Appointment of Engineering consultant inorder to assist borrower in carrying outthe civil work under the project. Complied Consultants appointed on 12/5/81.

(ii) Appointment of Agricultural experts inorder to assist the borrower in carryingout Parts 8 (1) and (2) and G (1) of theproject. Complied Agriculture experts appoipted in 1981.

Sec. 3.03 The borrower shalt ensure that the consultantsand experts referred to in the preceding The project was delayed at start-up. due to setection of consult-section (3.02) shalt be appointed not later ants with adequate qualifications.than Septenber 30, 1979 (or such other date Complied,agreed upon). with delay. co

Sec. 3.07 (b) Prepare and furnish to the Association and theFund, not later than December 30. 1980. a Complied, The training program was prepared and iaplemented with the otherdetailed report for overseas training. with delay. Tihama projects. Late compliance due to delay ir. start-up of the

project.

Sec. 4.01 (b) The borrower shall cause TOA to have its Cooplied,project accounts audited, furnish audited re'port with delay.no later than four months after the end of

9 the year.

Sec. 4.03 Provide Quarterly report during ProjectImplementation period and thereafter annually Complied,for the next five year. with delay.

Sec. 4.05 (a)(b) TDA, with assistance of the engineering Complied, The study was conducted but reconiendations were not enforced.consultants, carry out a study on water regula- with delay.tion with a view to ensure equitable distribu-tion of the wadi's annual flow. Complete thestudy and furnish a copy to ID by 12/31/1980.

Cont. on next page

Page 2 of 2

Covenant Description Status Remrks

Sec. 4.07 ti)tiii) Provide , not later than September 30. 1979.copy of study on farming through cost andcrop sharing arrangements between tenants and Complied Study conducted did not pro e tonclusive agreements.landlords. Implement recoimendations through hence not implemented.suitable legislative and governuentat actions.

Sec. 4.08 Iplementation of cost recovery. Government Regulations enacted but not enforced.to take such actions so as to enable TOA,imuediately after completion of irrigation work, Notto charge a 2X surcharge on gross agriculture Compliedproduction.

.I

_,.

Table 8. Usk Ov BANK Nt:cSO (MISSIONSI

Stage of Project Cycle Monith/Year No. of Persons Days in Field Specialization Performance status ratingThrouKh Apprdisal Mdy/Jtuie 19)18

Appraisal Mission 06/78 5 28 Engineer. Livestock SoHorticulturist. Economist.Financial Analyst.Boar.. Approval - Mjrckl Ob. 19)9

Credit EffectLiveneb lebiudLy 1960

Suvervision - FY 1980

Mission 1 06/80 3 2 R.Engineer. Economist. iAgric Extensionist.

Mission 2 02/81 5 27 Agriculturist, Cr. Specialist, 2V Engineer. Training Specialist.Forestry Specialist.

Mission 3 12/81 2 5 Horticulturist. Irria.Enaineer 2Mission 4 08/82 3 21 Irrig.Engineer. Economist. 2 O

Agriculturist CFAO/CP)Mission 5 04/83 3 24 Irrig.Engineer. Horticulturist. 2

MSE consuitant.

Mission 6 10/83 3 16 Irrig.Engineer. Agriculturist. 2Agriculture Ct,dit Consultant.

Mission 7 11/84 4 21 Horticulturist, Irrig.Engineer. 2Credit Spec., Sociologist.

Mission 8 11/85 1 4 Irrigation Eng1ineer. 2Mission 9 10/86 2 17 Irrig.Eiagineer. A4riculturist. 2Mission 10 04/87 4 5 Irrig.Engineer. A4ric. Economist. 2

Financial Analyst (2).Mission 11 11/87 2 10 Irrig.EnSineer, Fin. Analyst. 2Mission 12 04/88 3 5 Irrig. Engineer. Fin. Analyst. 2

ApSr. Economist.

Cominent: Prefereice St4tub Rating: ' Problem Free or Milor Problegn.2 - Moderate Problem3 Major Problem

- 31 -

T:able 9. PROJECT ERR UNDER VARIOUS SCENARIOS

l 2 3 4 S

Space Benefits' 0 85 0.50 0.85 0.50 0.30

Well Benefits' 0.30 0.50 0.30 0.25 0.20

Veterinary Benefits' 1.00 0.50 0.002 0.002 0.002

ERR 9.5X 7.4X 8.21 6.0% 4.5X

j~/ Proportion of incremental benefits in TDA's PCR assumed co be attributedto the project.

2/ Excludes both vecerinary costs and benefits.