Document of

The World Bank F4L tr6k

FOR OFFICIAL USE ONLY

Report No. 2174a-IN

INDIA

STAFF APPRAISAL REPORT

OF THE

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

June 30, 1980

South Asia Projects DepartmentAgriculture Division C

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

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CURRENCY EQUIVALENTS

US$1.00 = Rupees (Rs) 8.40 1/

WEIGHTS AND MEASURES (METRIC SYSTEM)

1 meter (m) = 3.28 feet (ft)1 kilometer (km) = 0.62 miles (mi)1 hectare (ha) = 2.47 acres (ac)1 sq. km = 0.39 sq. miles

31 million cubic meters (Mm ) = 810 acre-feet (ac-ft)

31 cVbic meter per second (M /sec) = 35 cubic feet per second (cusec)1 kilogram (kg) = 2.20 pounds1000 kilogram (kg) = 0.98 long tons

FISCAL YEAR

April 1 - March 31

ABBREVIATIONS

CCF - Construction Conversion FactorCWC - Central Water CommissionDFO - District Forest Officer

ERR - Economic Rate of ReturnFAO/CP - FAO/Cooperative ProgramGOI - Government of India

GOP - Government of PunjabHYV - High Yielding Varieties (Seed)ICB - International Competitive BiddingIDA - International Development AssociationLCB - Local Competitive BiddingM - Million

MARKFED - State Marketing FederationOER - Official Exchange RatePAU - Punjab Agricultural University (Ludhiana)PCR - Project Completion ReportSCF - Standard Conversion Factor

CROP SEASON

Kharif - Rainy SeasonRabi - Winter Dry Season

1/| Since September 24, 1975, the Rupee has been fixed against a "basket"of currencies. As these currencies are floating, the US Dollar/Rupeeexchange rate is subject to change. Conversions in this report havebeen made at US$1 to Rs 8.40, which represents the projected exchangerate over the disbursement period.

INDIA FOR OFFICIAL USE ONLY

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Table of Contents

Page No.

I. BACKGROUND ........................................ 1Agriculture in India ......................... 1Bank Group Support ........................... 1

II. THE STATE OF PUNJAB ............................... 2General ...................................... 2Agriculture .................................. 2Agricultural Development Strategy .... ........ 3

III. THE PROJECT AREA .................................. 4A. Background ................................... 4B. Socio-Economic Conditions .................... 6C. Agriculture ... 9...... I..................... 9D. Executing Agencies ........................... 13

IV. THE PROJECT ....................................... 15General Description .......................... 15Detailed Features ............................ 16

A. Rehabilitation of Upper Catchments .... ....... 17Soil Conservation ....................... 17Revegetation ............................. 17Development Package for Farmers and

Livestock Owners ..................... 18

B. Flood Control and Irrigation .... ............. 19Flood Protection Works in Dholbaha ...... 20Dholbaha Dam and Irrigation System ...... 21Flood Protection and Development Works

in Watersheds other than Dholbaha ...... 22

C. Farm Development ............................. 24Land Development in Dholbaha .... ........ 24Land Development in Other Watersheds .... 25Horticultural Development .... ........... 25Fisheries Development ..... .............. 25

This report is based on the findings of a Bank Mission which visited India inMay/June 1978, comprised of: Messrs. N. Krafft, P. Nottidge, and R.D.H. Rowe(Bank); A. Plummer, J. Phelan and R. Noronha (Consultants); and R. Greathouse(Research Assistant). The project was reviewed and cost tables up-dated inApril 1980.

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.

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Table of Contents (Cont'd)

Page No.

D. Technical Assistance, Studies, Researchand Training ....... .......................... 26

Technical Assistance ..... ............... 26Groundwater Investigations, Studies

and Trials ........ .. 27Research ................................ 27Training ................................ 28

E. Project Administration, Monitoring andEvaluation .................................. 29

V. COST ESTIMATES AND FINANCING ...................... 29A. Cost Estimates ............................... 29B. Proposed Financing ........................... 31C. Procurement .................................. 31D. Disbursements and Audit ...................... 32

VI. ORGANIZATION AND MANAGEMENT ............... ........ 33General ...................................... 33Project Organization and Coordination ........ 34Project Management and Technical Assistance .. 35Operation and Maintenance .... ................ 36Monitoring and Evaluation .... ................ 37Cost Recovery ................................ 37

VII. BENEFITS AND JUSTIFICATION ........................ 38General ...................................... 38Benefits in Upper Catchment Areas .... ........ 39Farmer Benefits in Areas Below theUpper Catchments ........................... 39

Dholbaha Watershed ........................... 40Other Project Components ..................... 43Employment, Production and Marketing ......... 43Direct Project Beneficiaries .... ............. 44Social Benefits .............................. 44Environmental Impact ......................... 44Project Risks ................................ 45

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS ....... 46

LIST OF ANNEXES

Annex 1 Terms of Reference for Internationally RecruitedConsultants

Appendix Terms of Reference for Locally Recruited ProjectEconomist

Chart Initial Phasing of Consultants (19216)

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Table of Contents (Cont'd)

LIST OF ANNEXES

Annex 2 Supporting TablesTable 1 Summary of Project CostsTable 2 Reforestation and Soil Conservation Measures

in Upper CatchmentsTable 3 Livestock and Fisheries ')evelopmentTable 4 Dholbaha Dam and Irrigation SystemTable 5 FLood Protection Works (Dholbaha)Table 6 Soil Conservation Works Between Hills and

Road (Dholbaha)Table 7 Directorate of Water Resources (Including

Overseas Training)Table 8 Groundwater Investigations, Recharge Studies

and TrialsTable 9 Agricultural Research and Horticultural DevelpmentTable 10 Program Planning and Coordination UnitTable 11 Estimated Schedule of Disbursements

Annex 3 Financial and Economic AnalysisTable 1 Summary of Prices for Financial and Economic

Analysis in Constant 1978 PricesTable 2 Crop Input RequirementsTable 3 Financial Farm Budget for 2-ha FarmTable 4 Economic Farm Budget for 2-ha FarmTable 5 Models I & II: Project Economic Benefit at

Full Development (Dholbaha)Table 6 Model III: Economic Benefit from Flood

Protection Only (Dholbaha)Annex 4 Related Documents and Data Available in the Project File

List of Charts and MapsChart 1 Physical and Economic Factors that Need to be Examined in

Watershed PlanningChart 2 Organizational Chart (19041)Map 13694 Dholbaha Watershed Development ProposalsMap 13695 Kandi Tract

Supplementary Implementation Volume

The following annexes are in a suppleliXentary volume which isavailable on request.

Annex 5 Forestry/Livestock DevelopmentAnnex 6 Hydrology, Irrigation System and Dholbaha DamAnnex 7 Flood Protection and Soil Conservation Works (Dholbaha)Annex 8 Guidelines for Preparation of Watershed Feasibility ReportsAnnex 9 Supplementary Cost Tables (Fi.,lKries, Horticulture, and

Agricultural Research)

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

STAFF APPRAISAL REPORT

I. BACKGROUND

Agriculture in India

1.01 India has a population of 640 million which is growing at an

annual rate of 2.0%. Per capita income reached approximately US$150 per

annum in 1977 and is increasing at about 1.1% p.a. The dominant sector in

the Indian economy is agriculture, which contributes about 45% of GNP,

employs about 70% of the labor force and provides the base for some 60% of

India's exports. However, the current annual growth rate of agricultural

production is only about 2% - barely keeping pace with population growth.

There has thus been little change in the living standards of the vast masses

of rural poor, which, conservatively measured, consist of some 300 M people

with incomes below the poverty line of US$70 per capita per year (1972).

1.02 India's strategy of agricultural growth has remained remarkably

consistent since its formulation in the mid-1960s, with the main focus on

foodgrain production, principally wheat and rice, and on exploiting technolo-

gical advances in their production. Government's policies thus mainly concen-

trated on organizing the supply of complementary inputs - HYV seeds, chemical

fertilizer, irrigation and credit - and encouraging their use. Other programs

receiving public support include soil conservation, warehousing, cooperation,

command area development, livestock development, minor irrigation, special

small farmer programs and the development of drought-prone areas. Recently,

a number of these activities have been amalgamated into the Government's

rural development program, which is to receive increasing financial support

in recognition of the need to increase rural incomes.

Bank Group Support

1.03 In recent years, the emphasis of Bank Group lending has been on

agriculture. The Bank Group has been particularly active in supporting

minor irrigation and other on-farm investments through agricultural credit

operations. Major irrigation, marketing, seed development, and dairying

are other agricultural activities supported by the Bank Group. Also, the

Bank Group has been active in financing the expansion of output in the

fertilizer sector and, through its sizeable assistance to development finance

institutions, in a wide range of geographically scattered medium- and small-

scale industrial enterprises. IDA financing of industrial raw materials and

components for selected priority sectors has been instrumental in facilitating

better capacity utilization in industry. The Bank Group has also been active

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in supporting infrastructure development for power, telecommunications, andrailways. Family planning, water supply development, and urban investmentshave also received Bank Group support in recent years.

1.04 The direction of assistance under the Bank/IDA program has beenconsistent with India's needs and the Government's priorities. The emphasisof the program on agriculture, industry, power, under development and watersupply remains highly relevant. Projects designed to foster agriculturalproduction through the provision of essential inputs such as credit for on-farminvestments, improved water managment and intensification and streamlining ofextension systems, form an important aspect of the Bank Group's program forthe next several years. Special emphasis will be given to projects benefittingsmall farmers. Projects supporting water supply, sewerages, and urban develop-ment also form an integral part of the Bank's lending strategy to India for thenext several years. Lending in support of infrastructure and industrialinvestments will focus on agriculture-, export- and energy-related projects.

II. THE STATE OF PUNJAB

General

2.01 The State of Punjab, situated in northwest India, is bordered byPakistan in the west, Rajasthan and Haryana in the south and southeast, andHimachal Pradesh to the northeast. It has an area of about 50,000 sq km, anda population of some 15.5 M which is growing at about 2% per year. Per capitaincome at about US$230 is the highest in India and between 1960/61 and 1975/76,State income grew at an annual rate of 4.8%. By almost all economic indicators,Punjab is the most advanced state in India. Although 75% of the populationis rural, the rural areas are more developed and accessible than the rest ofIndia. Nearly 80% of villages have metalled roads and most have electricityand drinking water. Yet, as with most states in India, there are pockets ofpoverty. A recent study on "Rural Poverty and Agricultural Growth in India"put out by the Bank's Development Research Center, shows that 24% of the ruralpopulation of Punjab live below the absolute level of poverty.

Agriculture

2.02 Agriculture provides the key to Punjab's impressive growth record.Agriculture and related activities account for over 60% of the State income,and provide employment for about 70% of the work force. Although Punjab is oneof the smallest states in India, it continues to make the major contributionto meeting the shortfall in India's foodgrain requirements. In 1976/77, Punjabprocured 3.9 M tons of wheat and rice for export to deficit states, represent-ing nearly 50% of its production. Foodgrain production increased at 7.7% perannum in the sixteen years from 1960/61, by any standards a remarkable achieve-ment over so long a period. This has been brought about by annual increasesin yields of some 5% and in cropped area of 2.7%. In brief, the main factorsresponsible for the rapid increase in agricultural production are:

(a) an increase in the area under High Yielding Varieties (HYV)(90% of wheat and rice is sown to high yielding or improvedvarieties);

(b) an increase in the use of fertilizer and pesticide (con-sumption of fertilizer is now 60 kg/ha); and

(c) an increase in the irrigated area (864' of the net areasown is irrigated).

2.03 Unfortunately, the tempo achieved during the peak years of the GreenRevolution has slowed considerably in recent years. From 1971/72 to 1976/77,foodgrain production grew only at a rate of 3.5%, slightly above the pre-GreenRevolution period. However, rice production still retains its growth momentumwith area and yield increases at an annual rate of 7.9% and 5.4%, respectively.Since 1971/72, wheat yields have largely remained stationary at about 2.5 tons/ha. Barley production increased substantially at 16.5% per annum. However,this is mainly due to a recovery in area which declined sharply during theGreen Revolution period to allow expansion of the area under wheat. Exceptfor sugarcane, production to other cash crops has also grown at a slower ratethan that of the previous period.

2.04 The slowiiig down of agricultural production growth is attributed toseveral reasons: (i) the weather -- 1972/73 and 1974/75 were extreme droughtyears; (ii) increased cost of fuel has affected the profitability of tubewellirrigation which was largely responsible for the rapid agricultural growth inPunjab; (iii) increased cost of fertilizers in 1973/74 to 1974/75; (iv) non-availability of high yielding varieties (HYVs) for crops other than wheat andrice; and (v) groundwater potential has been nearly fully utilized.

2.05 While the slow down in agricultural production growth of recentyears is partly explained by unfavorable exogenous factors, it is clear thatthe easy benefits of the Green Revolution have already been reaped. Thus,further increase in the intensity of cultivation and crop yields is increas-ingly dependent on better utilization of irrigation supply and improved drain-age in areas subject to seasonal flooding and waterlogging.

Agricultural Development Strategy

2.06 To regain momentum, the thrust of GOP's agricultural developmentstrategy is now two-fold: firstly, to increase production further by improv-ing the efficiency of existing resources and secondly, to concentrate effortson developing backward and neglected areas of the State. The first objectivewill be met by improving the efficiency of already existing irrigation systems.This will be achieved by improving the water conveyance system and land devel-opment and irrigation practices at the farm level. To support these effortsin Punjab, IDA has been assisting in an on-going irrigation project (Credit889-IN) since July 1979 that includes modernization of canals and water coursesand studies and pilot demonstrations to test advanced irrigation technologiesfor water distribution and on-farm works. Overall efficiency is expected tobe improved by upgrading arrangements for marketing and distribution of inputs.

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To this end, GOP is planning an integrated rural development program whichalso aims to provide a hospital and high school for each cluster of villages,drinking water supplies in each village and metalled roads to every village.The second objective will be addressed through the proposed project, whichseeks to solve the dual problems of developing a backward area and repaicingthe ravages of erosion. A solution to the latter problem will also enablethe rapid development of a considerable area of high potential land which lieslargely unexploited through the constant threat of devastation caused by un-controlled run-off from adjacent hills.

III. THE PROJECT AREA

A. Background

3.01 The largest area of undeveloped agriculture in Punjab is theHimalayan sub-mountainous zone, known as the Kandi Tract. This zone includespart of the Shiwalik range of hills which extend across the whole of northernIndia at the foothills of the Himalayas. The Shiwaliks seldom rise above1000 m above sea level, and are derived from poorly consolidated miopleisto-cene sands, gravels and conglomerates, the erosion products of the Himalayasthemselves. The Punjab Shiwaliks run for about 250 km along the northeasternpart of the State, bordering Himachal Pradesh.

3.02 The Kandi Tract includes all land within the Punjab Shiwalik Hills,together with a narrow band of largely underdeveloped farmland. This bandlies immediately below the hills and to the north of the main highway, whichruns from Chandigarh in the southeast through the towns of Ropar and Hoshiapurto Dasuya in the northwest (see Map 13695). Thus, on the north of the roadlies the Kandi Tract, and to the south the mainly irrigated and rich agri-cultural land of the plains of Punjab. The project area comprises a numberof watersheds to be selected in the Kandi Tract, and includes agriculturalland south of the Chandigarh-Hoshiarpur road below these selected watershedsthat is affected by floods emerging from the Shiwalik Hills. The main focusof the project, however, is on the Kandi Tract, identified as the most back-ward area in the State and which lies mainly within the administrative 2districts of Hoshiarpur and Ropar. It covers an area of about: 4,600 km (9%of the State) and contains some 6% of Punjab's population.

Historical Perspective

3.03 Prior to the middle of the last century, the Shiwalik Hills werestrictly preserved for hunting and no cultivation, grazing or exploitationof timber was permitted. At that time the hills were covered with thick,lush acacia and pine forests with a profuse undercover of shrubs and grasses.The forests contained numerous commercial species and supported a wide varietyof bird and animal wild life. Perennial streams flowed from the hills and

supported agriculture in the plains below. 1/ However, after the Sikh Wars(1845-1849) the Sardars and Rajahs, who owned the hunting lands, were evicted

and the forests were handed over to villages as additions to their villagecommon lands. In less than two generations unrestricted tree felling andovergrazing destroyed the vegetative cover. Heavy rain eroded the weaklycemented soils of the upper catchments and formed steep knife-edged ridgesdropping sharply into ever-deepening gullies. The result was that after heavyrains, perennial clear-running streams became seasonal torrents carrying largeamounts of sand and gravel down to the plains below. On leaving the hills,flood waters spread out in a fan-like fashion, depositing their silt load andcausing the torrent bed to rise higher than the surrounding areas. Thetorrent would then seek a new course, subjecting new areas to flood andsediment damage.

3.04 These torrents are locally known as "choes". Within Punjab, thereare some 21 major and 120 smaller choes that disgorge from steep, rough, highlyerodible catchments in the Shiwaliks. 2The major2choes emerge from the largercatchments that range from about 20 km to 56 km in extent. The choes thenflow through the gently rolling Kandi Tract and eventually find their way intothe Rivers Sutlej and Beas (See Map 13695). Each choe is unique in itscharacteristics; its size and potential for causing devastation determined bythe magnitude and condition of the catchment area feeding it.

3.05 At first the choes brought fertile silt, whose presence was welcomedby the farmers, but later the silt was replaced by sand which overlaid thefields and destroyed them. By 1895, these choes had spread over and ruinedthousands of hectares of valuable agricultural land in the plains. Recognizingthat the basic cause of the problem was loss of vegetative cover in the hills,Government passed the Punjab Land Preservation (Choes) Act in 1902. Thisallowed areas to be closed to grazing, controlled the type of livestock per-mitted within grazing areas and could prohibit tree felling, cultivation andquarrying. Two categories of land were recognized under Sections 4 and 5 ofthe Act. In Section 4 areas, farmers were allowed: (a) to keep cattle andsheep but not goats or camels; and (b) to extract fuelwood, small timber andfodder for their own needs. Section 5 areas were closed to all livestock, andextraction of fuelwood and small timber was prohibited; fodder grass cutting,however, was permitted. Unfortunately, the Act was not implemented with anyvigor until the late 1930s and even then only for a few years and in a smallnumber of upper catchments. From the 1950s to mid-1970s lack of funds forreforestation and soil conservation works, together with increases in live-stock and human populations led to even further degradation, particularly inthe Section 4 areas which were generally situated close to habitations at thelower end of the upper catchments. Thus, although the problem and its solu-tion has been recognized for nearly 100 years, only during about ten of them

1/ Historical background is taken from "Erosion in the Punjab: Its Causesand Cure," by Sir Harold Glover (published 1944).

(1939-49) was there action taken on a large scale. The result is severe gullyerosion, devastation of the plains below through flooding and sedimentationdeposits, an exceedingly sparce vegetative cover of non-economic annualspecies with minimum soil and water retention properties in the hills, and acessation of the perennial stream flows.

3.06 Fortunately, adjacent to the project area is an excellent exampleof successful Shiwalik Hill upper catchment rehabilitation using exactly thetechniques proposed for this project. In 1965, some 2500 ha oE land in theKansil Khol catchment was handed over to the Department of Forests. Livestockwas excluded, trees and grasses were planted and soil conservation structureswere put in wherever needed. The results have been spectacular. Two yearsafter closure, grasses and shrubs were evident on all but the steepest slopes.Now some 80% of the area is covered with vegetation and includes well estab-lished plantations of trees, and bhabhar grass (Eulaliopsis binata) used forpaper pulp manufacture. Within 20 years it is expected that the catchmentwill be 70% rehabilitated; that is, it will have recovered 70% of its originalsoil holding and moisture retention properties.

Present Situation

3.07 Year after year, the choes continue to cause heavy flood and sedi-ment damage. In 1977, in Hoshiarpur district, damage included: loss of ninelives, 63 cattle and 650 houses; damage to roads and bridges amounting to someRs 2.5 million; and destruction of some 5,000 ha of crops. Unfortunately,records of partial crop damage are incomplete and it is thus not possible toquantify crop damage. However, the major economic loss resulting from thecontinual floods is the income foregone from lack of investment in areassubject to flood damage. Because of the annual devastation, there has beenlittle investment in infrastructure in the project area, for example in smallindustries, and farmers have not invested in irrigation and land development.Similarly, farmers apply little or no fertilizer in the kharif season, believ-ing these will be washed away. In sum, until floods are controlled, onlymarginal investments will be induced in the project area and it will continuea backward area. The proposed project would provide the environment to induceprivate investment, both on- and off-farm.

B. Socio-Economic Conditions

3.08 Village Composition. The Punjab village is generally a cluster ofmud-walled houses, increasingly being replaced by stone or cement walls and tileroofs--surrounded by fields. Most villages contain representatives of allmajor castes in varying proportions: the upper (Brahmins, Jat, Rajput, Gujar,Gosain, Banjara) and the scheduled ("service") castes such as the Kamin (scav-enger), Teli (oil processer), and Tanhar (carpenter). Caste permeates villagelife and is expressed in spatial segregation of residence and the provision ofseparate drinking water wells. Generally, the scheduled castes account forabout 25% of an average village population of 2,000. However, in the upper

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reaches of the Shiwaliks, village populations dwindle to as small as 150 persons.

According to the Punjab Forestry Department's 1977 survey, some 22,000 persons

live in 22 villages situated in the upper patchments of five wat5rsheds. This

amounts to a density of 100 persons per km (against some 300/km for the State

as a whole) and 150 families per village.

3.09 Farming and Farm Size. The main source of livelihood in the Kandi

area is mixed farming - sedentary agriculture (generally at subsistence level

only) supplemented by livestock (buffaloes, cows for ploughing, goats and a few

sheep). Here, too, the caste hierarchy is reflected in patterns of economic

dominance: the upper castes own more land and, consequently, have a higher

and more stable source of income; the lower castes are economically dependent

on the upper castes. Landholding patterns are not, however, entirely related

to caste status. The average farm size in the project area is about 2 ha, but

there are variations between districts as evidenced by the following:

Hoshiarpur District Ropar District

Farm Size % of Farms % of Area % of Farms % of Area

_(h-a)

Below 1 55 11 49 9

1 - 2 17 14 18 12

2 - 5 19 32 23 34

5 - 10 6 23 8 26

10 - 50 2 18 2 18

Above 50 1 2 - 1

Total 100 100 100 100

Average Size ofHolding (ha) 1.8 2.1

The median size of operational holdings is about 0.9 ha in Hoshiarpur District

and 1.1 ha in Ropar District. However, the figures above relate to the dis-

tricts as a whole which include irrigated land below the road and where the

farms are generally smaller. It is likely that the median size of dry land

farms is 1.5 ha.

3.10 Livestock: Livestock are an integral part of the village economy.

Nearly every family possesses a few buffaloes and cows--the former for milk,

the latter for manure; both provide draught power. The Department of Forests'

1977 survey of livestock in the proposed project's upper catchment areas

(24,000 ha) recorded some 16,000 head:

Goats 7,450Camels 90Oxen 1,960Cows 4,030Buffalo 2,290Sheep 180

16,000

Allowing for unrecorded animals, the true figure is probably closer to 20,000.Buffaloes are stall fed; cows are allowed to graze free. The wealthier employnon-family labor for fodder collection; among the poorer sections, femalemembers carry out this task. Buffalo milk is an important supplement of diet--consumed directly or converted into ghee. But the poorer groups substitutethe goat for the buffalo as a source of meat and milk, particularly sincetheir care and maintenance involves minimal cash outlay. Even though the goatis important to the poorer people, goats are not compatible with a replantingprogram in the catchments and will have to be replaced. Under the project,the aim is to exchange goats for sheep and to encourage farmers to take upother livestock enterprises.

3.11 For the majority in the project area, an estimated 70%, agricultureand livestock do not suffice to provide subsistence for an average family ofsix persons. The able-bodied are thus compelled to find alternative sourcesof income outside the project area - mainly as unskilled laborers in nearbyurban areas or through service in the armed forces.

3.12 The economic situation is worsened by population growth, the degrad-ation of the slopes of the Shiwaliks through overgrazing and tree removal andthe erratic direction of the ephemeral choe torrents. The villagers are awareof the effects of the degradation and choe torrents and recognize the need forregeneration of plant cover and control of torrents. They, however, feel thatthe steps necessary to do so are beyond their financial, technical and socialcapacity, and that closure of areas to grazing without adequate substituteswould have an immediate negative financial impact, particularly on poorersections who now graze goats in these areas.

3.13 Evidence of Poverty. There are no reliable statistics available toestimate per capita income or consumption in the project area--although onesample survey carried out during project preparation indicated that per capitaconsumption of grain was 50% higher in the neighboring district of Ludhiana.As noted in para 2.01, 24% of the rural population of Punjab live below thelevel of absolute poverty. Whilst there is little evidence of strikingpoverty in the plains of Punjab, there are several economic and social indi-cators that highlight the backwardness of the Kandi area and suggest that themajority of people in the Kandi Tract, who comprise 6% of Punjab's population,are part of the 24% that live below the poverty line. Yields, for example,are low. Yields of wheats are 700 kg/ha against a State average of 2,500 kg/ha.Less than 10% of the cropped area is irrigated compared with 86% for the Stateas a whole. Regarding mechanization, the Kandi Tract has only one-seventh thenumber of tractors (per ha cropped) in the rest of the State. Fertilizerconsumption per ha is less than one-third of the state average and high yield-ing varieties of seed are rarely used--only 17% of the area under wheat issown to HYV against a State average of 92%. These figures relate to croppedarea, but only 58% of the potential agricultural land is cropped. The other42% is made up of natural grassland, scrub and choe beds. In the rest of theState, almost all potential agricultural land is cropped.

3.14 Social services in the project area are far below the State average.For example, in Dholbaha, the area in which it is proposed to commence projectworks first, there is no high school. Public dispensaries are dispersed,understaffed, and underequipped while unlicensed medical practitioners thrive.

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The project area suffers from chronic water shortage. Communications, par-

ticularly in the more elevated areas, are poor and consist mainly of foot,

camel and mule tracks. Less than half the villages are linked with metalled

roads, compared with nearly 100% in the plains. Finally, a factor which

cannot be quantified, but is nevertheless very important, is that those

living below the Hills exist in continual fear of flood dama6a, includingloss of life, livestock and homes. In recognition of the state of development

of these areas, GOP has designated the Kandi Tract a "backward area."

C. Agriculture

Factors Affecting Agriculture

3.15 Climate and Soils. Several factors are responsible for the low level

of agricultural production in the project area: floods (which are responsible

for the low level of investment), climate, soils, water availability, and thelevel of agricultural supporting services (paras 3.21-3.30). Climate in theKandi Tract is one of extremes, with very hot, dry summers (mid-April to mid-

June) and cold winters. These two extreme seasons are divided by the monsoon

season from mid-June to mid-October, during which time 80% of annual precipi-tation falls. Winter rain is meager and unreliable and even during the monsoonseason, rains can be sporadic and often are characterized by prolonged periods

of drought. Average annual rainfall is high at about 1,100 mm, and can beintense with downpours of up to 100 mm/hr. The highest daily rainfall recordedi 228 mm, but storms lasting six days have been recorded including one in

1972 with a total of some 510 mm. The combination of intense rain falling

on bare, highly erodible soils leads to flash flooding in the choes. Thiscauses considerable quantities of sediment-laden water to burst from the Hills,

spilling on to the plains below. Soils in the Kandi area vary in texturebetween sandy, sandy loam and loam at the surface, and loam to clay loam atsubsurface levels. South of the road, soils are part of the extensive and

fertile alluvium of the Indo-Gangetic plain. Soils on the whole are easilyworked; their fertility, however, is low.

3.16 Groundwater Resources and Hydrology. The Beas and Sutlej Rivers, nowcontrolled by the Pong and Bhakra dams, respectively, cut through the Shiwalik

Hills and supply surface irrigation water to much of the plains. However, this

water has little effect on most of the project area where those farms presentlyirrigated derive their irrigation principally from groundwater. Flash floods

and runoff from the Shiwaliks play a significant role in replenishing ground-water recharge and maintaining groundwater levels. A brief field survey in1978 showed that the depth of the water table varies from about 2-5 metersnear the Beas river to about 3-8 meters near the Chandigarh-Hoshiarpur road.Immediately below the Hills, depth increases to over 30 m and, in some areas,

to over 70 m indicating that depth of the water table is highly variable.Comprehensive information regarding the groundwater situation is lacking,and would be studied under the proposed project (paras 4.32 and 4.33).

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Agriculture in Project Areas

3.17 Agriculture provides a livelihood for 90% of those living in theKandi Tract. Three distinctive types of agriculture can be identified, depen-dent on social status of farmers and location of their land. Those owning orrenting land in the Shiwalik Hills live principally from livestock-keeping,grazing their herds and flocks over the sparce, natural grasslands. Thosecultivating land immediately adjacent to the Hills and north of the Chandigargh-Hoshiarpur road are entirely dependent on rainfed agriculture. In areas southof the road, irrigated farming predominates, especially in those areas notaffected by seasonal flooding. In flood-prone areas, the cropping pattern

is similar to that north of the road.

3.18 Agriculture North of the Road. In these areas, fields are generallynot levelled and are subject to severe erosion. Because there are frequentlylong dry periods in the monsoon, yields of kharif crops often suffer. Duringwinter, rainfall is generally insufficient to sustain good crops; thus, yieldsare largely determined by the amount of water stored in the soil at the timeof sowing. The principal summer crop grown is maize, sown in late June orearly July and harvested in late September or early October. Farmyard manure(8-15 tons per ha) is ploughed in at the onset of the monsoon, shortly beforesowing of the crop. Chemical fertilizers are generally not applied; conse-quently, yields are low. Wheat and gram, often inter-planted, constitute themain winter crops and are generally sown on heavier soils; some fertilizer isapplied, but yields are erratic, being largely dependent on the extent of winterrains. Yields of wheat average 700 kg/ha and that of gram 500 kg/ha (2,500and 990 kg/ha, respectively, being the State average yields for these crops).

3.19 Agriculture South of Road. In unirrigated areas (generally floodprone), cropping patterns and agricultural practices are similar to those northof the road but with somewhat higher yields. In irrigated areas (those notsubjected to flooding), which amount to about 60-70% of the area south of theroad, paddy constitutes the principal summer crop, with small areas of maizeand fodder. Yields are up to statewide averages. In winter, wheat and potato

form the main crops, the area being particularly suited to the production ofan early potato crop, which commands a premium in the market. Husbandrypractices are good.

3.20 Scope for Improvement in Agricultural Production. Considerablescope exists for improvement of crop yields under rainfed conditions. Since1971, the Soils Department of the Punjab Agricultural University has been con-

ducting trials in areas north of the road. Results show that, given floodprotection, present yields can be more than doubled by following simpleimprovements. These involve the adoption of soil and water conservationpractices, requiring partial land shaping and raising of bunds around fields,creation of a dust mulch once summer crops are removed, planting of improvedcrop varieties, correct seed rates and spacing and use of small amounts offertilizer (40 kg/ha of a compound fertilizer) drilled with the seed at plant-ing. Production of winter crops can be assured if a light irrigation can be

given immediately after planting.

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Agricultural Supporting Services

3.21 General. The situation with regard to supporting services in Punjab

is generally very satisfactory and is unlikely to prove a constraint on project

implementation.

3.22 Agricultural Research. Punjab Agricultural University (PAU) is

responsible for agricultural research which is undertaken at Ludhiana and at

regional centers covering the whole of the State. At Ludhiana, there is also

a strong Department of Agricultural Economics which undertakes a wide range

of farm management and marketing studies. Overall research at PAU is compre-

hensive and practical, being aimed at solving the problems of the farmer and

at achieving better utilization of farm resources. At the beginning of each

cropping season, a recommended package of practices is prepared, covering all

important crops. The All-India Coordinated Dryland Farming Research Project

in Hoshiarpur District is supervised by PAU and is developing packages of

practices for dryland farming areas.

3.23 Agricultural Extension. Agricultural extension is undertaken both

by the State Department of Agriculture and by PAU. The Department of Agricul-

ture is represented at District level by a Chief Agricultural Officer who is

assisted by a number of staff, including Subject Matter Specialists in Agro-

nomy, Plant Protection, Seed Development and Horticulture. Additional support

is provided by District Information and Statistical Officers, a Deputy Registrar

of Cooperative Societies, an Assistant Agricultural Engineer (Minor Irrigation)

and officers responsible for special projects (cotton, citrus, land reclama-

tion, etc.). At Block level, there are normally from 3-5 Agricultural

Inspectors (graduates), and at Village level, Sub-Inspectors of Agriculture

are responsible for extension programs. Each Sub-Inspector covers from 5-10

villages. Current staffing rates allow a ratio of one village level extension

worker to every 800 farming families. These levels are considered adequate.

3.24 Areas north of the Chandigarh-Hoshiarpur road are well suited to

irrigated fruit production, especially mango, litchi, pear, guava, and mandarin

oranges. Advice to growers is provided through a Horticultural Development

Officer located in each district and supported by a number of Horticultural

Inspectors. A Horticultural Research Station in Hoshiarpur District and run

by PAU, provides improved planting material and uptodate advice to growers.

3.25 In addition to normal extension activities, the Department of Agri-

culture provides training for farmers at Training Centers (one of which is

located in each district) and within villages. PAU also provides a Farm

Advisory Service with 3-5 Subject Matter Specialists in each District who

organize farmer-training programs at District and Block level as well as

in selected villages. In addition, PAU provides a wide range of specialized

training courses, ranging from a few days up to one year.

3.26 Agricultural Marketing. All agricultural crop surpluses are now

exclusively sold at either regulated markets or foodgrain procurement centers.

Regulated markets operate under the Punjab Agricultural Produce Markets Act

of 1961. Produce is sold at open auction and sellers are charged 3% of value

of produce sold as a market fee. These fees provide for the operation of

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existing markets, development of new markets and construction and improvementof farm to market roads. In general, a regulated market serves about 110villages. To facilitate sale of foodgrains the Government's food procurementagencies also buy from farmers at temporary procurement centers strategicallylocated throughout all districts. Present facilittes are considered adequateto handle anticipated increased production under the project.

3.27 Processing. Rice and oilseeds are the two main agricultural cropsrequiring processing. Existing facilities in project districts are consideredadequate to meet anticipated demand. There are numerous rice shellers, par-boiling rice plants and small oil extraction plants located throughout theState, and adequate funds and initiative are available for any expansion toprocessing capacity.

3.28 Storage. Storage facilities are provided by five main agencies:the Punjab State Warehousing Corporation, the Punjab State Cooperative Market-ing Federation, the Food Corporation of India, the Food and Civil SuppliesDepartment and the Central Warehousing Corporation. All agencies own storagefacilities in the project area--totalling 178,400 metric tons in 1977 and renta further 48,500 tons. In addition, on-farm and village level storage isestimated to be 5% of marketing surplus. Present facilities are consideredadequate to meet anticipated project requirements. Total storage capacity inPunjab is stated to be 2.2 million tons and expansion of capacity is to beassisted through the Bank-assisted Crop Processing and Storage Project(Credit 747-IN).

3.29 Agricultural Credit. Agricultural credit is well provided for inPunjab State. Short and medium-term credit are provided through a three-tiered cooperative organization--the Punjab State Cooperative Bank at Statelevel, Central Cooperative Banks at district level and primary CooperativeCredit and Service Societies at village level. Recovery performance whichused to be excellent has declined in recent years. For example, overdues ofprimary credit societies which were 17% of demand in 1967 are now up to 40%.GOP and the Reserve Bank of India are aware of the situation and plan torationalize the short-term credit institutions in Punjab. Long-term loans areprovided by Land Development Banks. Commercial banks are also engaged inproviding credit in all three fields. In backward areas of the State (includ-ing the project area) where land values are low as a result of under-develop-ment, farmers have difficulty in raising sufficient collateral to make themeligible for institutional long-term credit. In these backward areas, theState Government provides credit from budgetary sources for such items as landand horticultural development.

3.30 Input Supplies. There is a well developed system throughout theState for distribution of seeds, fertilizers and pesticides. Certified seedof all principal crops is produced and distributed by the State Seed Corpora-tion, whose development is being furthered by two Bank assisted projects(Ln 1273-IN and Cr 816-IN). There are no shortages of seed and sufficientseed is produced annually to replace at least 10% of the statewide cropconcerned. MARKFED (The State Marketing Federation), an apex cooperativeorganization, to which service cooperative societies are affiliated from allover the State, has principal responsibility for procurement and distributionof fertilizer, handling about 170,000 tons of nitrogenous and 50,000 tons of

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fertilizers annually. It also handles the sale of pesticides. In addition,there are numerous private distributors handling input sales and as these arewidely located, inputs are generally available within easy reach of allfarmers.

D. Executing Agencies

Department of Irrigation

3.31 The Department of Irrigation, with a staff of some 300 engineers, isresponsible for the planning, design, construction, operation and maintenanceof dams, irrigation systems, and flood protection levees along rivers anddrains. Over the past 30 years, the Department has been mainly concerned withlarge-scale projects, such as the Bhakra and Pong dams. Completed projects arefunctioning effectively. Departmental activities are divided amongst six chiefengineers, each heading a separate branch of the Department: (i) irrigationcanals (construction and operation); (ii) projects (construction); (iii)drainage (design and construction); (iv) design of hydel projects; (v) Thiendam (design); and (vi) Thien dam (construction). Also within the Departmentis the Directorate of Water Resources; details are in para 3.34. The parts ofthe Irrigation Department that would be involved with the proposed project are:the branch for construction of projects; the drainage branch; and the Directorateof Water Resources.

3.32 The Projects Branch (Construction) is responsible for constructionof projects which do not fall within the jurisdiction of one of the otherbranches of the Department. Technical staff are experienced and would haveno difficulty to construct dams and irrigation systems envisaged under theproject.

3.33 The Drainage Branch is responsible for design, construction andmaintenance of large-scale drainage works and flood levees. Most of its workhas been confined to the broad, flat Indo-Gangetic plain. Over the past 15years, the Drainage Branch has constructed and maintained embankments alonga few choes to confine and control flood waters. However, efforts have notalways been coordinated with other Government Departments and the particularworks have not been accompanied with reforestation in the upper catchments,nor have there been sound criteria for the design of stable channels. Theaim has been to be to attain high velocities to carry sediment from the uppercatchments to the outfall. Instead, channels should be designed for stability- so that the channel neither aggrades nor degrades over time and the banksare stable. To do this, past work needs to be more fully evaluated; newdisciplines and techniques, principally in the fields of hydrology and sedi-ment transport, developed; and planning, design and monitoring strengthened.The proposed project is designed to meet these needs. The Drainage Branch'simplementation ability is adequate.

3.34 Directorate of Water Resources. While past emphasis of the Depart-ment has been on construction of large-scale projects, GOP has recently begunto give increasing attention to small scale water development projects and to

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improve management of existing irrigation. This change of emphasis has re-quired the collection of new data and development of new planning skills. Tomeet this need, GOP set up the Directorate of Water Resources primarily tocollect data, particularly for groundwater, but also to undertake the planningof smaller projects, particularly those involving other Government Departments.The Directorate, responsible for planning the irrigation (but not drainage)aspects of the proposed project, has little experience in the utilization ofwater from small flashy streams, and integrating such use with groundwatersupplies and flood protection. Neither is the Directorate adequately staffedto carry out flood damage field surveys nor able to evaluate the economicbenefits of various planning alternatives. In sum, the Directorate lacks staffspecialized and experienced in the comprehensive planning of small watershedsinvolving flash flood hydrology, sediment transport, design of stabilizedflood channels and flood damage evaluation.

Soil Conservation and Engineering Department

3.35 The Soil Conservation and Engineering Department, is responsiblefor soil conservation and all land improvement on farmers' fields. The Depart-ment is divided into a number of operational circles, the North Circle operat-ing in the project area. This Circle has the capability to plan, superviseand implement works for which they would be responsible. Past activities ofthe department involve the improvement of irrigated lands by improving waterconveyance systems and land levelling; in rainfed area work has primarily beenland levelling and providing water disposal systems. The Punjab Land Improve-ment Schemes Act, 1963 (amended in 1965), provides the legal means for theDepartment to carry out soil conservation works and requires the approval of50% of landowners. Maintenance of works is the responsibility of the farmersand if not satisfactory, is carried out by the Department and the cost chargedto the farmer. Generally, the quality of work is good, although somewhat highin cost. However, experience in integrated planning and treatment of water-sheds is limited, in particular in the fields of hydrology and sedimentation.Support in this field is provided by the Soil Conservation Research Stationat Chandigarh, but even they have done little work in the field of sedimenttransport.

Department of Forests

3.36 The Department of Forests is responsible for forest protection,reforestation, social forestry and wood procesing. The Chief Conservator ofForests is assisted by two territorial conservators and a third conservatorin charge of development including research, working plans, training and util-ization. The State is divided into 11 forestry divisions headed by DivisionalForest Officers; two of the divisions, Hoshiarpur and Ropar, fall in the pro-ject area. Professional staff are trained at the Indian Forestry College andRangers at the Forest Rangers College, both located in Dehra Dun. Over thelast ten years some 54,000 ha of plantations have been established; 35% instrips along road, rail and canal sides and the balance in blocks. Thequality of work is good and the Department would have no difficulty under-taking work proposed under the project.

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Department of Animal Husbandry

3.37 Veterinary and artificial insemination services are provided to

farmers through a series of veterinary hospitals, permanent dispensaries,

mobile clinics and artificial insemination centers located throughout all

districts. Under the control of District Animal Husbandry Officers, these

facilities are staffed by Veterinary Assistant Surgeons, Veterinary Com-

pounders and Livestock Assistants. All units are well staffed. Veterinary

centers provide treatment for farmers' animals (in excess of 100,000 animals

are treated annually in each of the project districts), undertake vaccination

campaigns, principally against Haemorrahagic Septicaemia, Rinderpest, Black

Quarter, Foot and Mouth Disease, Swine Fever and Fowl Pox, and provide castra-

tion of excess male animals. Artificial insemination centers encourage the

upgrading of both cattle and buffalo.

Inland Fisheries

3.38 Punjab is well endowed with waters capable of producing considerable

quantities of freshwater fish. Fish farming is developing rapidly throughout

the State and there are now 500 ha of privately owned and stocked water in 72

of the 117 administrative Blocks covering the State. There are firm proposals

to develop a further 800 ha in the near future. Fingerlings are supplied by

the Fisheries Department to farmers from six "seed" farms located throughout

the State. These farms provide some 550,000 fingerlings annually, mainly India

Major Carp and Chinese Carp. Advice to farmers is provided through district

based staff, whose activities are complemented by a centrally based, but mobile,

Training Unit.

IV. THE PROJECT

General Description

4.01 The proposed project would be the first comprehensive attempt to

tackle the problems of the Himalayan sub-mountainous zone. Its primary objec-

tive would be to lay the basis for sound investment on a larger scale in the

future to: (a) reverse man-made ecological degradation that has been going

on in the lower foothills of the Himalayas for decades and (b) protect and

develop agricultural land that is presently subject to serious erosion and

flooding. The focus of the project is, therefore, on institution building,

in particular strengthening GOP's capability to plan, implement and monitor

similar projects in the sub-mountainous zone. It would be a pilot project

and would comprise a package of complementary investments, most of which have

been tried at one time or another in Punjab, but which have failed to bring

expected results because they have been tried in isolation. The project would

introduce technical and social improvements that, through their replicability,

could have an impact far beyond the proposed project. The project would be

confined to the most backward and neglected areas of the State and would

largely benefit farmers presently living below the absolute level of poverty.

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4.02 The basic unit for project planning and implementation would be the

watershed, each of which varies in size, topography, hydrology and degree of

vegetative cover. Because of these differences, each watershed has to beplanned separately if the best technical and economic solution is to bearrived at. To draw useful lessons for future replication, a variety ofwatersheds need to be examined and planned under the project. To this end,the project would, through strengthening the planning and implementationcapacity of the Government of Punjab, rehabilitate and develop five watershedssituated in the Punjab Shiwaliks. Planning has been completed in Dholbaha,one of the five watersheds; the remaining watersheds would be selected, andworks planned, during the first years of project implementation (para 4.19).

4.03 For the five watersheds selected, the five year project wouldcomprise:

- Rehabilitation of upper catchments to reduce runoff anderosion from the hills, through soil conservation, reve-getation (including tree and grass planting) and a com-prehensive development package for farmers and livestockowners;

- Flood protection and irrigation of farm land below thehills, through control and utilization of run-off; and

- Development of farm land protected from floods, throughland development (including land shaping, terracing andbunding), irrigation, horticulture, livestock, poultry,and fisheries development.

The project would also comprise:

- Technical assistance, Studies, Research, and Staff andFarmer Training; and

- Project administration, monitoring and evaluation.

Detailed Features

4.04 Project works to rehabilitate the upper catchments would be similarin each of the selected watersheds and are, therefore, discussed under oneheading, "rehabilitation of upper catchments." Works to protect land below

the hills from flood and to develop the land to its full potential would differfrom watershed to watershed. Thus, under each of the headings, "flood protec-tion and irrigation," and "farm development," details of project activities arefirst given for Dholbaha, the only watershed on which detailed planning hasbeen completed. Details of project activities in the other watersheds follow.

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A. Rehabilitation of Upper Catchments

4.05 The key component of the project is the rehabilitation of the badly

denuded and eroded upper catchments in five watersheds (Dholbaha and four

others). This would reduce runoff and erosion and would be achieved through

a program of soil conservation and revegetation. The program would be carried

out over about 24,000 ha of upper catchments in the five watersheds. 1/

However, the measures would only succeed if all upper catchment areas are

closed to grazing. During negotiations, the Government agreed that all lands

in the upper catchment areas to be rehabilitated under the project would be

closed to: (a) livestock grazing; and (b) unauthorized extraction of fuel wood

and timber. To ensure effective closure to grazing, land owners and right

holders will be induced to withdraw their cattle and goats from the Shiwalik

Hills. One approach would be for Government to buy the land, declare the

areas as forest reserve, evict all livestock and assist farmers in finding

alternative areas in which to settle. But this would be expensive and would

entail problems of relocation as adequate alternative land is not available in

Punjab. An alternative approach, and the one proposed under the project, aims

at obtaining the full participation of the farmers and livestock owners. Land

owners and right holders would be allowed to remain; upper catchment areas

would be closed to grazing and a comprehensive development package would be

offered to farmers and livestock owners presently living in these upper catch-

ment areas. Details are given in para 4.09.

Soil Conservation

4.06 To repair the ravages of erosion and to induce the process of reve-

getation, small conservation structures (vegetative and stone check dams,

channel grade stabilizers, small drop structures, crate wire dams and debris

basins) would be constructed in gullies of the upper catchments to augment

reforestation and grass planting planned for non-gully areas. Many of the

structures would complete the task of gully stabilization after two or three

years; thereafter, vegetation would take over the task of soil protection.

Where gullies have been stabilized, vegetative recolonization would be assisted

by planting pioneer species such as Arundo donax, Vitex negunde and Ipomea

carnea. Direct costs of soil conservation works are estimated at about

Rs 350/ha.

Revegetation

4.07 The techniques and species used in the past for replanting in upper

catchments have proved most successful, and would be continued under the pro-

ject until research, which is also provided for in the project (para 4.35),

indicates that the use of other approaches and species would reduce costs and

increase benefits. The prime purpose of replanting is to reduce water flows.

In so doing, the productive capacity of upper catchments would be improved.

Two types of tree/grass combinations would be established. Firstly, 6,500 ha

would be planted to Acacia catechu and fodder grass species (Chrysopogon mon-

tanus, Dicanthium anulatum and Cenchrus spp), which would supply the bulk

1/ Dholbaha, Janauri, Chohal, Maili and Patiala-ki-Rao.

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of fodder required to stall feed cattle. Secondly, 11,750 ha of mixed Acacia

catechu and bhabhar grass would be established, which would slupply bhabhargrass for paper pulp manufacture and rope making. Other local tree species

that produce fodder (Albizzia lebbeck), small timber (Dalbergia sissoo), fuel-

wood (Eucalyptus tereticornis) and resin (Pinus roxburghii) would be included

where ecological conditions permit. Direct costs of replanting are estimatedat Rs 1,580/ha.

4.08 The aim would be to replant areas close to villages first as these

are the areas which have suffered the greatest damage due to overgrazing andfelling. The last areas to be treated would be the more remote areas located

mostly in higher elevations of the upper catchments. The average tree densityafter planting would be 600 per ha. Fodder grass would be planted at 3,000

tufts/ha and bhabhar grass at 2,000 tufts/ha. Trees would be planted in themiddle of contour trenches and grasses along the downslope berm of each trench.The project would also provide for 80 km of forest service roads to improve

accessibility, forest nurseries, land preparation, planting, weeding, main-tenance, fire protection and incremental staff, buildings, vehicles and equip-ment required to carry out the program. The total direct and indirect costof the soil conservation and revegetation program is estimated at aboutRs 2,530/ha, excluding price contingencies.

Development Package for Farmers and Livestock Owners

4.09 The development package to livestock owners and rightholders in theupper catchments would include:

(a) Introduction of Alternative Enterprises: Villagers in theproject area recognize the need to close the upper catch-ment areas to grazing. They also recognize the need for theexclusion of goats. But since goats are mainly owned by thepoorest sections of the population, their exclusion wouldresult in immediate hardship for these sections. ViLlagers,however, have indicated that they would be willing to acceptin exchange, alternate livestock enterprises involving poultry,pigs and sheep (in that order of priority). A program fortheir introduction has already been formulated under the SmallFarmer Development Assistance (SFDA) scheme. This schemewould be expanded in project areas. In addition, the projectprovides for a livestock exchange program through the provi-

sion of 5,000 head of improved cattle and 20,000 head ofsheep to be exchanged for the existing 10,000 head of freegrazing, low yielding cows and buffaloes and 10,000 head ofgoats. The basis for exchange would be one improved cow for

two existing animals and two sheep for one goat; but theexchange ratio would be altered to suit prevailing con-ditions in particular watersheds. Cattle would be stall-fedand provision would be made for haymaking equipment (balers),fodder seed, fodder stores and limited concentrate feed fordairy animals. Sheep grazing would be confined to areas

outside the upper catchments. In addition, credit would beprovided to enable landowners to take up poultry and pig

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keeping and for the establishment of cottage industries suchas rope and bed making (details of credit arrangements are inpara 5.04). Provision would also be made, through the PunjabPoultry Corporation, for supply of poultry feed and dailymarketing of eggs. Extension services and training of farmersand livestock owners would be an integral part of theseprograms. Technical advice, through the services of a locallyrecruited, part-time livestock specialist and full-timesociologist, would also be provided to ensure the meaningfulparticipation of villagers. Villagers have been consultedfrequently during project preparation and it is reasonable toassume that they will cooperate fully in project activities.

(b) Land Development: Scattered throughout the upper catchmentsareas are some 3,730 ha of small cultivated fields whichrequire partial land levelling; terracing and constructionof simple water harvesting structures. The project providesthat this work would be undertaken by the Soil ConservationDepartment at a cost of about Rs 1,800/ha.

(c) Development of Social Services: Social services (schools,public dispensaries, drinking water supplies and roads) inthe project area are below the state average. Development ofthese facilities is covered by on-going statewide GOP programs,in particular the recently inaugurated Integrated Rural Devel-opment Program. Under these programs, priority would be givento development works in the Kandi area.

Assurances were obtained from GOP that it would (a) furnish to the Bank forreview, the details of the above programs to improve the social and economicconditions of farmers and livestock owners in the upper catchment areas; and(b) in the case of Dholbaha, furnish said details to the Bank by December 31,1980.

B. Flood Control and Irrigation

4.10 The reforestation and soil conservation measures to be undertakenin upper catchments would considerably reduce the incidence of flash floodsand the amount of sediment carried by runoff. Total monsoon runoff wouldnot, however, be significantly reduced and without flood protection works,agricultural land below the hills would still be subject to flooding. Theproposed project provides for the protection of agricultural land lyingwithin the influence of choes emerging from Dholbaha and the four otherwatersheds to be selected. It also provides for the utilization of runoffthrough construction of a multi-purpose dam (flood-protection and irrigation)in Dholbaha.

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Flood Protection Works in Dholbaha

4.11 As mentioned in para 4.02, detailed plans to protect and developDholbaha are being drawn up. To protect agricultural land below the hillsfrom flooding, the original plan called for runoff from the hills left andright of Dholbaha Choe to be diverted into the main Dholbaha Choe. In theoriginal plan as shown in Map 13694, diversion levees were proposed to beconstructed immediately below the hills. The present plan, which is a moreeffective and less costly alternative, consists of diverting the 25-yearflood flows from Dholbaha dam and the catchments to the right of the daminto the Dasuya-Zangur Pur Choe. This would involve some enlargement,strengthening and extension of the existing choe, and construction of a bundacross the Dholbaha Choe about two miles below the dam. Provision would beincluded for passing non-flood flows through the Dholbaha bund. This solu-tion was also found more socially acceptable since it would not require theacquisition of a significant area of highly productive land in the projectcommand area for the previously proposed channelization and extension of theDholbaha Choe. More importantly, detailed investigation of the originallyproposed plan determined that the elevation of the receiving Beas River con-siderably exceeded that of the contributing Dholbaha Choe at the proposedpoint of confluence. Initial capicity of the channel below Dholbaha Choewould be adequate to contain 70 m /sec at Dholbaha Choe equivalent to thecurrent 45-year frequency flood release, since She initial capacity wouldbe 295 m /sec increasing progressively to 850 m /sec at its confluence withthe Beas River. The project provides for purchase of the land on which newlevees would be constructed channel, lined waterways under bridges, forremodelling of an existing railway bridge which crosses the proposed channel,and for minor raising and strengthening of the existing embankment.

4.12 Design standards for proposed channelization work in Dholbaha areconsidered adequate, given that one of the major objectives of the projectis to monitor results, so that design standards can be further developed toassure final stability of these open channels. Establishment of improveddesign standards would be one of the principal functions of the team of inter-nationally recruited consultants provided under the project (paras 4.30 and4.31). Construction of levees would confine water to a main channel; thehigher velocities that result, however, would tend to erode the steeper upperportions of the channel and deposit sediment in flatter sections near theoutfall. This would be expected to occur even if the watershed above is wellcovered with vegetation since clearer water entering the channel would pickup sediment from the channel itself. To prevent serious degradation of thechannel, the project provides for construction of drop and other structuresin the channel, and for means to prevent bank erosion through construction ofriprap and revetments, and turfing along side slopes of embankments. However,after heavy floods some degradation of the channel and bank erosion wouldoccur. The monitoring program to be established would identify problemsas they develop and remedial measures would immediately be taken. The designof future channels would be modified accordingly.

4.13 Construction Methods: Construction would generally be carried outby manual labor. This is in line with GOP policy to provide maximum employ-ment during the implementation of public works and to give priority for employ-ment of local resident labor. The use of some machinery is, however, necessary

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and the project provides for vehicles and equipment, including bulldozers,concrete mixers and vibrators, and dewatering pumps.

Dholbaha Dam and Irrigation System

4.14 Dam. The project provides for the construction of an earthfilldam to collect runoff from the hills and thereby prevent flooding and providean assured source of irrigation water. The dam would be located in DholbahaChoe ab9ut 800 m upstream of Dholbaha village. The dam would create a25.6 Mm storage reservoir at full reservoir level 424 m. It would have a340 m long embankment with a 10 m top width. Upstream and downstream slopeswould be 3 to 1 and 2.5 to 1, respectively, above elevation 415.0, and 2.5to 1 and 2.0 to 1 below that elevation. Sufficient, suitable material forembankment construction is available within 4 km of the dam site. The damwould rest on the underlying sandstone which provides a satisfactory founda-tion. The upstream slope of the embankment would have a 60 cm riprap workface. The presently envisaged spillway design consis s of three gated 2 mdiameter pipes, sufficient for discharging up to 94 m /s (about a 100-yearfrequency flood routing) and a 30 m long open crest auxiliary spillway ata higher elevation located on a rock saddle to the right of the main dam.The combined syillways are capable of passing the maximum probable inflowflood (3,200 m /sec) either preceded or followed in three days by a 25-yearfrequency flood (730 m /sec). Criteria for design have been agreed and finaldesigns are under preparation. The top of the dam would be at elevation 430 mwith the maximum water surface at elevation 427 m. Single purpose flood con-3trol storage would be obtained in the reservoir above elevation 424 m (6.1 Mm ).Joint flood control and conservation storage would in5lude the reservoir spacefrom elevation 424 m down to elevation 417 m (11.7 Mm ) and single-purposeconservation storage below that to dead storage level 402 m. Compensationwould be paid to those losing land and/or residences which would be submergedas a result of dam construction. The area to be submerged in Dholbaha catch-ment encompasses the lands and some of the homes of 75 families. Assuranceshave been obtained that GOP would complete by December 31, 1981 the relocationof, or finalize compensation to, residents, right-holders, and landowners inthe area to be submerged by Dholbaha dam. Compensation for land and buildingswould be paid in accordance with standard GOP procedures for compulsory acquisi-tion which are satisfactory.

4.15 Regarding dam safety, GOP has established and will maintain aspecial panel of experts to review and approve the planning and design ofdams to be constructed under the project in accordance with appropriate designpractices; and will ensure that dams are constructed in accordance withappropriate engineering practices. Assurances regarding dam operation andmaintenance are in para 6.16.

4.16 Irrigation System. The irrigation distribution system has beendesigned to cover a cultivable command area of 3,750 ha. The system wouldhave a left bank canal 9.4 km in length with a capacity reducing from about0.7 cumec at the head to 0.1 cumec at the end, capable of serving 1,400 ha.A right bank distributary canal originating at the dam would be 2.8 km

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long and about 1.2 cumecs capacity, dividing into two minor canals, one 7.6 km

long and the other 6.2 km long and capable of serving 2,350 ha. These canals

would be lined to reduce water losses. Layout and designs have been completedand are satisfactory. The distribution system would be designed to serve

about 8 ha chaks, with no holding farther than 300 m from a lined watercourse.

4.17 2 Water Supply and Demand. The Dholbaha Choe, with a catchment of

56 km , is the only choe for which streamflow measurements have been made;eight years of record are available for the monsoon period and 4 years for

the non-monsoon season. By correlating these with 30 years 3of rainfall data,

the annual average streamflow has been estimated at 13.8 Mm3 during the mon-soon or kharif season (late June-early October) and, 3.8 Mm during the dryor rabi season (late October-early April). Although monsoon runoff can vary

from 28% of average runoff to over 240%, irrigation water availability for

rabi season cropping will be known each year by September 30 at the end of

the principal replenishment period.

4.18 The project water demand has been established using the modifiedPenman method to compute water requirements of typical cropping patterns and

using appropriate assumptions for conveyance efficiency and field efficiency.Because the irrigation system is small, it would be fully lined, and because

all land development would be ensured (since it would be financed from thebudget), an overall irrigation efficiency of about 60% has been assumed.With judicious operation of the total single and dual purpose conservation

storage (25.4 Mm ), it would be possible to irrigate, on an average about3,000 ha out of the 3,750 ha cultivable command area, in the rabi season.Key features would be reservoir operation aimed at the promotion of an

irrigated crop calendar which would make maximum use of the monsoon rainfall

for storage and irrigation and provide effective rabi season irrigation.irrigation releases would be timed for their maximum impact on crop yields.The target would be to irrigate up to 3,350 ha of rabi crop and in wetter

years to carry over storage to provide a pre-monsoon irrigation. The finalcropping pattern and water distribution scheme will be developed from opera-

tional studies based upon the WATREQ simulation model.

Flood Protection and Development Works in Watersheds Other than Dholbaha

4.19 As discussed in para 4.02, a variety of watersheds will be investi-gated and the most typical and viable will be developed so as to draw usefullessons for future replication. The project provides funds for development

of four watersheds in addition to Dholbaha. Works to rehabilitate the uppercatchment areas in each of the watersheds would be similar to those for

Dholbaha and have been described in paras 4.05-4.09. Works below the hills

would differ depending upon the physical and environmental factors in eachwatershed. At appraisal it was found that the proposal to replicate the

technical solution found for Dholbaha would probably be sub-optimal in other

watersheds. For example, Dholbaha has the largest catchment areas of the

choes, the largest runoff, and is one of the few with a suitable site fora storage dam. Protection of land below the hills in watersheds other

than Dholbaha may involve the reduction and control of water fLows with-out the construction of a dam. Planning to find the optimal solution toprotect and develop these four watersheds would require technical expertise

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not presently available in India and which is provided under the projectthrough internationally recruited consultants (para 4.31). To ensure thatthe watersheds selected are representative of problems encountered in thePunjab Shiwaliks and that plans drawn up are technically and economicallysound, assurances have been obtained, in respect of watersheds other thanDholbaha, that GOP would:

(a) select four watersheds for implementation under theproject, based on their technical feasibility andeconomic rates of return of not less than 12% unlessotherwise agreed with the Bank. To enable early startof construction taking advantage of the consultants'presence, studies would first be conducted on Janauri,Chohal, Maili and Patiala-Ki-Rao. If selected, con-struction activities on these watersheds can proceedexpeditiously since the upper catchment works on thesefour watersheds have already been started

(b) substitute another watershed if any of the four water-sheds fail to meet the criteria specified in (a) above

(c) submit for Bank's approval, as a condition of disbursement,the detailed implementation plans for watersheds selectedfor impementation under the project; and

(d) by March 31, 1985, complete preparation of plans for aboutten watersheds representative of watersheds generally interms of problems encountered in the project area, includingthe four mentioned in (a) above.

4.20 Cost of Component. It would cost about US$1,770 per ha includingboth the irrigation, flood control and land development costs to protectand develop land below the upper catchment of Dholbaha watershed. As men-tioned, Dholbaha has the largest runoff of all the watersheds. To controlthis runoff requires the construction of flood protection levees and a dam.Other watersheds have smaller upper catchment areas, and it is likely to costonly about US$600 per ha to protect and develop land below these catchments.To determine the cost to protect and develop land in watersheds other thanDholbaha, an analysis has been carried out of the benefit that would beobtained in Dholbaha if no dam were provided (since the other catchments maynot require or may not have suitable sites for storage dams). It is estimatedthat the net present value of the stream of benefits from flood protection andland development alone would be about US$1,000 per hectare protected (at a 12%discount rate). Details are in Annex 3, Section V. This then represents theswitching value - the value above which the return would be acceptable. Withthe US$1,000 per ha value and preliminary plans developed by GOP, the floodprotection works to be implemented in the four watersheds other than Dholbahawould cost an estimated US$13.2 M.

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C. Farm Development

Land Development in Dholbaha

4.21 Construction of the Dholbaha dam, irrigation system and levees toprotect agricultural land from flood would benefit farmers owning land oneither side of the Dholbaha Choe. The primary benefit would be derived byfarmers with undeveloped land north of the road, but would also accrue tofarmers south of the road where land is presently occasionally subject toflooding. To realize the full potential economic benefits of the project,it would be necessary to undertake land development in these areas. Thepresent land use in Dholbaha, including flood-free and upper catchment areas,is as follows:

Present Land Use in Dholbaha (ha)(Includes Flood-Free Land)

Cultivated Cult- Uncult-Irrigated ivable ivable(Tubewells) Rainfed Total Forest Waste Waste Total

Dam CatchmentArea - 370 370 5,180 - 60 5,610

North of Road 160 2,885 3,045 1,270 1,725 1,160 7,200South of Road 4,700 1,900 6,600 - 500 200 7,300

Total 4,860 5,155 10,015 6,450 2,225 1,420 20,110

4.22 Upper Catchment Areas: Treatment of the (a) 5,180 ha forest landin the catchment area of the dam and 1,278 ha forest above the left and rightdiversion embankments (Map 13694) and (b) cultivated land in t:he dam catchmentarea, have been included in estimates of works in the upper catchments (paras4.05-4.09).

4.23 North of the Road. The 7,200 ha between the dam and the road in-cludes 2,170 ha above the left and right diversions and 5,030 ha below. Ofthe area above the diversions, 40% comprises crop and waste land with slopesgreater than 2% or is cut up by gulleys resulting from past erosion. Thisland requires conservation treatment as otherwise it would add considerablyto the sediment load within the flood control channel. Similarly, land belowthe diversions requires treatment to increase productivity and prevent erosion.The project thus provides for: bench terracing on land with slopes above 2%,estimated to cost Rs 4,500/ha; land leveling on flatter land, estimated tocost Rs 2,200/ha; and gully reclamation, estimated to cost Rs 3,000/ha. Gullyplugging comprises construction of small check dams, debris basins, crate wiredams and drop structures and would be accompanied by a planting program of treeand shrub species which would assist the soil stabilization process. The comrbined effect of flood protection, irrigation and land development would be toincrease the cultivated area by nearly 60% and to increase substantially theagricultural potential of these lands. Details are in Chapter VII.

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4.24 Dholbaha dam would irrigate, on average, 3,000 ha of a 3,750 ha cul-tivable command area (para 4.18). The project provides for the brick tilelining of watercourses to reduce seepage losses. Where appropriate, under-ground pipes would be installed. These would also be installed in commandareas of the few existing tubewells north of road, which would increase theirrigable area by some 30%.

4.25 Area South of the Road. About 65% of the land south of the roadis currently irrigated, mainly from private sources, the remainder is rainfed(25%) and waste (10%). A small part of this irrigated land and most of therainfed land is subject to flooding in the monsoon season. With the provisionof flood protection works it is to be expected that much of the present waste-land would be brought under cultivation, and that much of the present rainfedland would be brought under irrigation. Details are in Chapter VII. To thisend, it is expected that farmers would utilize credit to finance installationof private tubewells and land development south of the road. As such, theseitems have not been included in project costs. Adequate institutional creditis available and which could be refinanced by the Agricultural Refinance andDevelopment Corporation.

Land Development in Other Watersheds

4.26 In addition to Dholbaha, it would also be necessary to undertakeland development in the other four watersheds once they have been protectedfrom floods. The project provides funds for similar works to those envisagedin Dholbaha. The cost of such works have been included in the estimate inpara 4.20.

Horticultural Development

4.27 Over the project period, 1,100 ha of fruit trees (mango, mandarinorange, litchi, pear and guava) would be established by farmers throughoutthe project area. Existing nurseries are able to provide planting materialfor the first two years, but will be unable to meet requirements subsequently.Consequently, the project provides for the establishment and operation of a25 ha nursery-cum-progeny orchard. Fruit trees would be sold to farmers atrates determined from time to time by the Director of Agriculture; the currentprice being Rs 1.0 per tree.

4.28 To ensure adequate advice to growers, existing district horticul-tural staff would be strengthened by the provision of one Horticultural Devel-opment Officer, five Horticultural Inspectors and fifteen village level workers.Headquarters staff would also be strengthened. The project provides transport,housing and logistical support for these staff, together with mechanical andhand-sprayers for loan to growers to assist in pest control.

Fisheries Development

4.29 Present statewide demand for fingerlings has outstripped the capa-city of the Fisheries Department. In order to ensure an adequate supply offry for stocking dams to be constructed under the project and to improve the

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overall fingerling position in the State as a whole, the project providesfor the establishment and operation of a hatchery to be located on the banksof the Sutlej River near Ropar.

D. Technical Assistance, Studies, Research and Training

Technical Assistance

4.30 As discussed in para 4.19, development plans would be drawn up for

ten watersheds in addition to Dholbaha, and four more would be selected forimplementation under the project. Although the Shiwalik watersheds are small,their development involves complex and inter-related technical problems thatdiffer between watersheds since each watershed varies in size, topography, andhydrology. In arriving at the optimal solution for flood and erosion control,it would be necessary to: (a) consider a number of alternatives for water and

sediment control; flash flood mitigation and disposal of water; irrigation,either from surface storage or from groundwater, land shaping and other mea-sures to reduce soil erosion; and disposal of stream bed sediment loads; and(b) analyze the most promising alternatives in detail. Thus, the number offactors involved in the planning process are large (a list of factors thatneed to be examined is in Chart I).

4.31 There is limited experience in India with the comprehensive andmulti-disciplinary analysis required for development of watersheds of thetype found in the Punjab Shiwaliks. The project, therefore, provides fortechnical assistance to meet this need. Consultants are critical to thesuccess of the project and are required to introduce technical improvementsand improved planning techniques and thereby to build up GOP's capability toplan and execute projects of a similar nature in the future. Because planning,

execution and monitoring of the watersheds is a dynamic process, the objectiveis for the consultants to be involved in the full scope of operations--planning,construction and monitoring. Thus, as works are implemented, results wouldbe carefully monitored and designs and construction standards modified accord-ingly. In brief, consultants would assist GOP to: investigate, plan andanalyse various technical alternatives for watershed planning; prepare reportsfor submission to the Bank summarizing findings (and which would containdetailed technical, social and economic justification of the solution pro-posed); implement works; monitor progress; draw up technical guidelines and

criteria to enable GOP to plan future works; and arrange and provide in-servicetraining. To this end, the following specialists would be recruited toprovide technical assistance in the first two years of the project (terms ofreference in Annex 1):

Months

Watershed Planning Specialist (team leader) 24Small Watershed Hydrologist 18Water Resource Engineer 24Sedimentationist 4Groundwater Specialist 6Other Specialists 3

Subtotal 79

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It is expected that some of the consultants' contracts would be extended

beyond two years. The project, therefore, provides for a total of 120

man-months of technical assistance in the form of internationally recruited

consultants, at an estimated cost of US$8,500 per man-month. The project

also provides for a locally recruited project economist to work with the

team. Terms of reference are in the Appendix to Annex 1.

Groundwater Investigations, Studies and Trials

4.32 Flash floods play a significant role in replenishing groundwater.

Several years of investigation and analysis are required to generate informa-

tion needed to understand the groundwater situation as it relates to ground-

water pumping and the influence of flood protection, new surface irrigation,

water spreading for groundwater recharge and improved vegetation in the upper

catchments. There is substantial scope to improve the groundwater situation by

artificial recharge. Moreover, because many of Shiwalik watersheds do not have

suitable sites for economic surface storage of water, groundwater storage may

prove a viable alternative. Therefore, to assess the effect of project works

and to find means of economically increasing groundwater recharge, the project

would include a five-year program of groundwater investigations and trials to

strengthen both GOP's information base for planning future projects and its

capacity to monitor the hydrologic effects of groundwater development.

4.33 The groundwater investigation would cover the entire Bist Doab tri-

angle (see map); initially, the major focus would be on areas immediately

below the Shiwalik hills. The project provides for the installation of experi-

mental recharge wells, about 250 ha of siltation and infiltration basins in

choe beds, geologic exploration, and investigation of underlying soil strata.

This would lay the basis to evaluate the economics of groundwater recharge and

to determine which of the choe beds should be preserved for water spreading

and which should be eventually farmed. The project also provides for (a) the

installation of a network of observation wells, to record fluctuations in the

water table; (b) establishment of 10 stream runoff stations; (c) a series

of pumping tests to provide more accurate estimates of yield and transmis-

sability; and (d) a groundwater mapping program, to permit well locations to

be accurately recorded. Detailed terms of reference are contained in the

Supplementary Implementation Volume. To implement these components, the

project provides for construction and maintenance of settling and recharge

basins, installation of wells, and equipment and vehicles. Provision has

also been made for the establishment of a Groundwater Division within the

Directorate of Water Resources to undertake these investigations and trials.

Research

4.34 Agricultural Research. Low agricultural productivity in the Kandi

Tract can be mainly ascribed to the continual danger of floods, soil loss due

to erosion, lack of water conservation due to run off, and to the low inherent

fertility of the soil. Adoption of suitable soil and water conservation

measures with associated aspects of crop, livestock and soil management, both

in the catchment as well as in cultivated areas is, thus, basic to stabiliza-

tion of the agricultural economy in these areas. Research so far carried out

by PAU has shown that crop yields can be more than doubled by adoption of

simple improved farm practices. This work, while of considerable importance,

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is far from comprehensive and has largely been carried out on farmers' fields.To further experimentation, especially in respect of developing water harvest-ing techniques, integrating livestock into the farming system (through evolu-tion of suitable pasture and fodder tree regimes) and by improving husbandry,and soil and water conservation practices, the project proposes to establishan agricultural research farm to be run by PAU. The farm would comprise about30 ha of arable and 250 ha of adjacent forest/grazing land. The sites for thefarm have been selected and are available. Assurances have been obtained thatGOP would, by December 31, 1980, submit to the Bank for review and comment, adetailed program of work for agricultural research.

4.35 Forestry Research: Project research would support the work alreadybeing carried out by the Research and Training Division of the Department ofForests at Hoshiarpur and would be undertaken in close collaboration with:PAU; Soil Conservation, Demonstration and Training Center, Chandigarh; andother departments participating in the project. Special emphasis would begiven to species and provenance trials of both trees and grasses; collectionof runoff and sedimentation data; fertilizer trials; spacing trials; growthrate studies and yield table preparation and nursery practice. Funds wouldbe provided for incremental research staff, construction of a laboratory andstaff quarters, equipment and vehicles required to carry out these studies.An assurance was obtained from GOP that, by December 31, 1980, it wouldsubmit to the Bank for review and comment, a detailed program of research work.

Training

4.36 To build up the Directorate of Water Resources' planning capacity,the team of consultants would work closely with staff of the Directorate andwould provide in-service training. To this end, the project provides forappointment of counterpart staff and for overseas training for 7 specialistsfor periods ranging from 6 to 12 months (Annex 2, Table 7). During nego-tiations an understanding was reached with GOP that it would make its besteffort to select trainees who, on their return, would be likely to stay forabout three to four years on the jobs for which they had received training.

4.37 Farmer and staff training forms an important part of project content.Provision is made for farmer training in agriculture, horticulture, fisheriesdevelopment and forestry using existing departmental staff and facilities.To assist in working with farmers and livestock owners to obtain their fullparticipation in project activities, a mobile unit would be established withinthe Office of the Project Coordinator. The unit would also be available toassist participating GOP Departments in carrying out their training programs.

4.38 Staff training, both within and outside India, is provided under theproject. Local staff training would either be carried out within the State orat facilities located elsewhere in India. In addition to the overseas train-ing provided to staff of the Directorate of Water Resources (para 4.36), theproject provides for two foresters to be sent for overseas training to broadentheir experience in the rehabilitation of upper catchments.

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E. Project Administration, Monitoring and Evaluation

4.39 Funds would be provided under the project for staff, equipment,vehicles and to meet the operating costs of the Joint Development Commis-sioner's (Project Coordinator's) Office, which would be established underthe project. The project would also strengthen the Directorate of WaterResources through the establishment of two divisions: a Groundwater Inves-tigation and Trials Division, and a Surface Water, Hydrology and PlanningDivision. Funds would also be provided for project monitoring and evaluation(paras 6.17-6.19); preparation of a second phase project; and staff, equipmentand vehicles for the information unit (para 4.37) to produce training materialfor participating departments and to assist in activities aimed at obtainingfull participation of farmers and livestock owners.

V. COST ESTIMATES AND FINANCING

A. Cost Estimates

5.01 Total project costs are estimated at Rs 511 M (US$60.8 M) net oftaxes and duties (which are negligble), with a foreign exchange component ofRs 48.1 M or some 9% of total cost. Detailed cost estimates are given inAnnex 2, and summarized below:

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Million Rupees Million US DollarsLocal Foreign Total Local Foreign Total

A. Upper CatchmentsReforestation and Soil

Conservation 60.4 0.7 61.1 7.1 0.1 7.2Livestock Development 39.7 0.4 40.1 4.8 - 4.8Subtotal 100.1 1.1 101.2 11.9 0.1 12.0

B. Flood Control & Irr.Dholbaha - Flood Control 24.5 1.4 25.9 2.9 0.2 3.1

Dholbaha - Dam & Irr. 49.4 10.3 59.7 5.9 1.2 7.1Other Watersheds /a 100.1 11.1 111.2 11.9 1.3 13.2Subtotal 174.0 22.8 196.8 20.7 2.7 23.4

C. Farm DevelopmentHorticulture 4.0 0.3 4.3 0.5 - 0.5Fisheries 5.6 0.2 5.8 0.7 - 0.7Land Development inDholbaha 18.6 1.4 20.0 2.2 0.2 2.4Subtotal 28.2 1.9 30.1 3.4 0.2 3.6

D. T.A. and ResearchTechnical Assistance &Overseas Training 6.1 7.2 13.3 0.7 0.9 1.6

Groundwater Studies 11.6 0.9 12.5 1.4 0.1 1.5Research 5.7 0.2 5.9 0.7 - 0.7Subtotal 23.5 8.2 31.7 2.8 1.0 3.8

E. Project Administration,Monitoring and Eval-uation 7.8 0.6 8.4 0.9 0.1 1.0

BASE PROJECT COST 333.6 34.6 368.2 39.7 4.1 43.8

Physical Cont. 37.2 3.8 41.0 4.4 0.5 4.9Price Cont. 91.6 9.7 101.3 11.0 1.1 12.1

Subtotal 128.8 13.5 142.3 15.4 1.6 17.0

TOTAL PROJECT COSTS 462.4 48.1 510.5 55.1 5.7 60.8

/a Includes land development.

5.02 Cost estimates are based on findings during appraisaL and updatedto March 1980 prices. Costs include charges for administration, design, andsupervision, in respect of dam construction, soil conservation works andflood protection estimated at about 15% of construction costs. Physicalcontingencies have been estimated for the individual project components andaverage about 11% of base project costs. No physical contingencies have beenapplied on vehicles and staff salaries. Price contingencies have been addedusing the following rates, compounded annually: 1980 = 10%, 1981-83 = 7%, and1984/85 = 5%.

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B. Proposed Financing

5.03 Finance to cover total project costs of US$60.8 M would be provided

as follows:

IBRD GOI/GOP Total-------- US$ Million --------

30 30.8 60.8(49.7%) (50.3%) (100%)

The proposed Bank loan of US$30 M (Rs 252 M) would finance about 50% ofproject costs. This would cover all foreign exchange costs (US$5.7 M) and

about US$24.3 M (45%) of local costs. Bank funds would be channeled through

GOI to GOP on GOI standard terms and arrangements for financing of state

development projects. The balance of project financing would come from GOI/

GOP. Incremental costs, following project completion, would be met from GOP's

budgetary sources; they are estimated at about US$1.2 M equivalent annually

and would be met without difficulty. Retroactive financing up to US$1.0

million would be provided from April 1, 1979 to the date of loan signing to

cover eligible expenditures for: (a) soil conservation, land levelling and

revegetation work carried on in Dholbaha and about four other watersheds to

be selected (paras 4.06, 4.07 and 4.08 and Table 2, Annex 2); (b) consultant

services and overseas training of specialists assigned to the Directorate of

Water Resources and the Department of Forests (paras 4.31, 4.36 and 4.37 andTable 7, Annex 2); (c) cattle and sheep to be used in the livestock exchange

program for the upper catchments (para 4.09 and Table 3, Annex 2) and (d) farm

development in the area to be protected by Dholbaha Dam (paras 4.21, 4.22,

4.23, 4.24 and 4.25 and Table 6, Annex 2).

5.04 In accordance with GOP policy for backward areas, farm development,

purchase of improved cattle and sheep, and development of minor cottage indus-

tries, would be financed from budgetary sources and would be recovered by GOP

as arrears of land revenue. The interest rate charged would be 8-1/2% p.a.

with repayment over 10-15 years. This compares with about 10-1/2% charged by

domestic lending institutions for similar types of lending and similar repay-

ment periods. The annual rate of inflation for the five-year period 1974/75

through 1978/79 has been between 4.0% - 4-6% p.a. The year 1979/80 produced

a rather drastic upsurge in the rate but this higher rate is not expected to

continue. Price increases for the future are projected at 10% in 1980, 7% in1981-83 and 5% thereafter.

C. Procurement

5.05 The main item to be financed under the loan would be civil works.

The major single contract would be for the construction of the Dholbaha damcomprising: dam foundation, earthwork placement, spillway and outlet

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(US$5.4 M). Construction would be limited to the dry season and spreadover three years. It would be awarded after local competitive bidding (LCB).Construction of Dholbaha irrigation system (US$1.0 M) would be labor inten-sive and, therefore, suitable for small piecework contracts. Constructionof Dholbaha flood protection works (US$2.1 M) and the flood control andirrigation systems of the other watersheds to be selected (US$15.1 M) wouldalso be labor intensive and restricted to the dry season. It would notbe possible to group this construction into large enough contracts to beattractive for international competitive bidding (ICB). Construction wouldbe carried out under LCB and piece rate contracting procedures. Invitationsto tender would be advertised locally in accordance with the general condi-tions of contract and implementation guidelines agreed with GOI. Forceaccount, limited to 30% of the flood control and irrigation works (Part Bof Table under para 5.01) would be used where required by safety or qualityconsiderations or when the quantities are exceptionally difficult to estimatein advance.

5.06 Equipment, instrumentations and vehicles would cost US$1.6 M.Equipment, which includes small off-the-shelf items, would be bulked forlocal competitive bidding wherever possible, or purchased by limitedtendering through normal trade channels if required in small quantities(less than US$100,000). Field vehicles would be procured locally throughstandard GOP procedures acceptable to the Bank to ensure availability ofspare parts and services.

5.07 Land Development work for Dholbaha comprising land levelling,bench terracing, gully reclamation, etc. (US$2.3 M) would be carried outby force account by the Soil Conservation Department at standard Governmentrates. Equipment required for levelling and terracing would be provided bythe Land Development and Seeds Corporation and rented to the Department.Upper Catchment work consisting of reforestation and soil conservation mea-sures (US$6.6 M) would be carried out primarily by the Department of Forestson force account. However, some soil conservation structures, such as stonecheck dams and crate wire dams, involving mainly labor charges, would be builtthrough piece work contracts. Livestock development, including the purchaseof improved cattle and sheep (US$3.8 M) for farmers in the hills would be byprudent shopping in accordance with procedures satisfactory to the Bank.Shopping would be by the Animal Husbandry Department as this would involvebuying in village markets outside the State. International consultants(US$1.6 M) are being recruited in accordance with Bank guidelines. Thebalance of the project costs do not involve procurement actions and includeland acquisition (US$2.3 M), staff salaries and operating costs (U$5.7 M),and technical assistance, research and training (US$1.2 M). Physical con-tingencies are included in above amounts but not expected price increases(US$12.1M).

D. Disbursements & Audit

5.08 Disbursements would be made for:

(a) 100% of the cost of consultancy services, including servicesof PAU for project evaluation, and of overseas training;

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(b) soil conservation, land leveling and revegetation works inthe upper catchment at the rate of Rs 2,300 per ha (US$270)against a certificate stating that soil conservation workshave been completed and that trees and grasses have beenplanted;

(c) 70% of the cost of civil works expenditures (including landleveling and other soil conservation measures) other thosein (b) above;

(d) 70% of the cost of well drilling and construction of settlingand recharge basins for groundwater investigations;

(e) 100% of the cost of locally manufactured goods procuredex-factory, or 70% of the cost of other locally procuredgoods;

(f) 70% of the cost of cattle and sheep; and

(g) 50% of the cost of salaries for incremental project staff.

5.09 Disbursements for force account work and for payments of lessthan Rs 300,000 under civil works contracts and Rs 150,000 for equipment andvehicles would be made against certificates of expenditure. Documentationfor these works would be retained by GOP and made available for inspection bythe Bank during review missions. Full documentation would be required for allother disbursements. GOP would have its auditors audit all certificates ofexpenditure at least once every six months and furnish the audit report tothe Bank promptly thereafter. It would be a condition of credit disburse-ment against expenditures for civil works in any of the watersheds other thanDholbaha, that the Bank had approved the detailed implementation plan for thatwatershed (para. 4.19). This condition does not apply to expenditures forsoil conservation, land leveling and revegetation works in the upper catch-ments. A schedule of estimated disbursements is in Annex 2 Table 11.

5.10 Concerned Government departments and agencies would be subject tonormal Government control and auditing procedures which are satisfactory.Assurances were obtained that all institutions and Government departmentsusing project funds would keep separate accounts of expenditures made underthe project to be audited annually, for each fiscal year, in accordance withsound auditing principles consistently applied by independent and qualifiedauditors. Audited accounts, together with the auditor's report, would besubmitted to the Bank not later than nine months after the end of each suchyear.

VI. ORGANIZATION AND MANAGEMENT

General

6.01 GOP's organizational set up relevant to project components isdetailed in Chart 2.

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Project Organization and Coordination

6.02 Implementation would be the responsibility of the following GOPagencies: Department of Forests for reforestation, fodder and bhabhar grassdevelopment and soil conservation in upper catchment areas; Soil Conservationand Engineering Department for land treatment (land and bench leveling, ditchlining, gully reclamation and tank construction); Department of Irrigation fordesign, construction and maintenance of dams, irrigation systems and channelsto convey flood runoff and sediment to major rivers; Department of Agriculturefor provision of agricultural extension services and horticultural development;Department of Animal Husbandry for development of livestock enterprises andprovision of supporting services; Department of Fisheries for development ofhatcheries and for advice to farmers; and the Punjab Agricultural Universityfor agricultural research and project evaluation.

6.03 The Department of Irrigation falls under the jurisdiction of theSecretary for Irrigation; the Animal Husbandry and Fisheries Departments fallunder the Secretary for Animal Husbandry and Fisheries; and the rest fallunder the Financial Commissioner, Development and Secretary to the GOP.Coordination at this level of government would be through a Policy ReviewCommittee which has been established under the project and is chaired by theChief Minister. This committee would consist of inter alia: Secretaries andHeads of Departments participating in the project, Vice-Chancellor of PAU,Deputy Commissioners from concerned districts, and elected representativesfrom the project area.

6.04 Overall responsibility for project implementation would lie withthe Financial Commissioner, Development. He would be assisted by a ProjectCoordinator, (designated as Joint Development Comissioner, Kandi Watershed andArea Development Project) who would head a small Program Planning and Coordi-nation Unit (para 6.06). The Project Coordinator has been appointed and theProgram Planning and Coordination Unit established. Assurances were obtainedfrom GOP that the position of Project Coordinator would be filled at all timesfor the duration of the project. To give effect to policy decisions taken bythe Policy Review Committee, and to coordinate the activities of the implement-ing Departments and Agencies, an Implementation Committee, chaired by theFinancial Commissioner and Secretary to Government has been set up. It com-prises, inter alia: the Secretary for Irrigation or his nominee, the Secre-tary for Animal Husbandry and Fisheries or his nominee, heads of participatingdepartments, Deputy Commissioners from concerned districts, a representativefrom PAU, and the Project Coordinator.

6.05 Heads of Department would ensure implementation of project actionsthrough their district staff. Inter-departmental coordination at this level,would be ensured through District Level Committees established and chaired bythe Deputy Commissioner in charge of the respective District. The committeescomprise, inter alia: representatives at the district level from the depart-ments participating in the project and elected representatives from thedistrict.

6.06 The Program Planning and Coordination Unit, under the Joint Devel-opment Comissioner, would be responsible for inter alia: drawing up and

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programming agreed annual development proposals; collating expenditures for

reimbursement from the Bank; project reporting, monitoring and evaluation;

preparation of a project completion report (PCR); sociological support for

work in the upper catchments; and through a small information unit, providing

information to project beneficiaries concerning future project actions.

Assurances were obtained that GOP would, not later than six months after the

closing date, furnish the Bank with a PCR in such detail as the Bank would

reasonably request.

Project Management and Technical Assistance

6.07 During appraisal, a review of the planning and implementation capa-

cities of participating GOP departments was carried out. For most Departments

only minor strengthening is required and provision for such has been included

under the project. The major task of planning, designing and drawing up devel-

opment plans for the ten watersheds would largely be the responsibility of the

Directorate of Water Resources.

6.08 Directorate of Water Resources. The Directorate would be strength-

ened by the establishment of two divisions: a Groundwater Investigation and

Trials Division; and a Surface Water Hydrology, Sedimentation and Planning

Division. The two divisions would work closely. The Groundwater Division

would be primarily responsible for planning and implementation of the ground-

water investigation, studies and trials in the Bist Doab triangle (paras

4.32-4.33). Detailed terms of reference for the trials are contained in the

Supplementary Implementation Volume. The Surface Water Hydrology, Sedimenta-

tion and Planning Division would be primarily responsible for planning,

designing, analysing and drawing up feasibility plans for each watershed.

Feasibility plans would focus on technical, economic and social aspects of

each watershed. The Division would explore the various technically feasible

options, and would estimate preliminary costs and benefits. Detailed plans,

together with the economic analysis, would then be drawn up for the most

promising options. GOP would then select one of the options for submission

to the Bank, with a detailed justification for the selection of that option.

Guidelines for preparation of feasibility reports are contained in the

Supplementary Implementation Volume.

6.09 Irrigation and Drainage. Responsibility for construction of Dholbaha

dam and its irrigation system, and future flood control and irrigation systems

would be under the Chief Engineer, Thein Dam with a new circle (irrigation) to

be established under a superintending engineer. Responsibility for execution

of drainage works (channelization) would be allocated to construction circles

under the Chief Engineer, Drainage. The Circle assigned responsibility for

project works, comprises two operational Divisions (controlled by an Executive

Engineer) and supported at circle headquarters by design engineers, drafting,

tracing and clerical staff. Additional staff, would be required to carry out

project proposals and details are in Annex 2, Tables 4 and 5.

6.10 Department of Forests. Day to day responsibility for execution of

forestry works would be given to a specially appointed Conservator of Forests.

To undertake project works two additional Forestry Divisions would be created.

Details are in Annex 2, Table 2.

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6.11 Soil Conservation and Engineering Department. The North EngineeringCircle, administered by a Conservator of Soils, would have responsibility forall conservation works in project areas. To carry out project works in addi-tion to present programs, it would be necessary to strengthen the North Circlethrough the provision of additional planning and engineering staff. Detailsare in Annex 2, Table 6.

6.12 Department of Agriculture. Existing facilities and numbers of staffare sufficient to meet farmer needs for advice and training envisaged underthe project. The horticultural development program would require additionalfield level staff and a small increase in support services at departmentalheadquarters. Details are at Annex 2, Table 9.

6.13 Department of Animal Husbandry. District level staff would bestrengthened in order to handle the livestock development program. To givesupport for the development effort the services of a sociologist and parttime but experienced livestock consultant would be provided. Details arein Annex 2, Table 3.

6.14 Punjab Agricultural University: Agricultural Research. Strengthen-ing of the Department of Soils at PAU is necessary in order to staff the smallresearch center to be established under the project. Details are in Annex 2,Table 9. Project Evaluation: Responsibility for carrying out an evaluationof the impact of the project, on both the environment and beneficiaries, wouldlie with the Economics Department of PAU. Details are in paras 6.17-6.19.Funds would be provided to enable the Department to engage additional staffrequired to carry out any surveys required.

6.15 Technical Assistance. The team of internationally recruited con-sultants would be responsible to the Financial Commissioner, I)evelopment andSecretary to Government. Under him, the team would work primarily with theDirectorate of Water Resources and closely with the Department of Forests, theSoil Conservation and Engineering Department, and other Departments involvedin project planning, implementation, monitoring and evaluation. Consultantswith qualifications, experience, and terms and conditions of employmentsatisfactory to the Bank have been internationally recruited.

Operation and Maintenance (Irrigation and Drainage)

6.16 The operation and maintenance of Dholbaha dam and irrigation systemwould be the responsibility of the Project Branch of the Irrigation Department.Maintenance of flood channels would be the responsibility of the DrainageBranch. Assurances have been obtained that GOP would, under arrangementssatisfactory to the Bank, cause dams, spillways, irrigation canals, andflood channels constructed under the project to be periodically inspected, inaccordance with sound engineering practices, to determine whether there areany deficiencies in the condition of such structures, or in the quality andadequacy of maintenance or methods of operations of same, which may endangertheir safety and will promptly take all required remedial measures, to correctsuch deficiencies. Assurances have also been obtained that GOP would provideadequate funds at all times to operate and maintain, in accordance with sound

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engineering standards, facilities constructed under the project. Maintenanceof field irrigation ditches would be the responsibility of the farmers. In theevent they fall into disrepair, the Irrigation Department is empowered to repairthem and recover the costs from beneficiaries through the Revenue Department.

Monitoring and Evaluation

6.17 Monitoring (and reporting) of physical progress and financial inputswould be the responsibility of the Director of the concerned department. Suchreports would be collated by Project Coordinator and forwarded to the Bankonce a year (para 6.06). To provide a measure of the degree of achievementof project goals, as well as to generate data concerning the effect ofproject actions, continuous data gathering would be required. This wouldbe supplemented by long and short-term studies as required.

6.18 PAU would assume the major responsibility for project evaluation.To provide data for improvement of design criteria, and to measure the effectsof soil conservation, flood protection and irrigation works, it will be neces-sary for the Departments of Irrigation, Drainage and Soil Conservation toestablish procedures for data recording. To measure the impact of works inthe upper catchments on flood control, would involve the cooperation of theDepartment of Forests and the Central Soil Conservation Demonstration andTraining Center. In order to measure the effects of project actions on theeconomic and social welfare of project beneficiaries would require the coop-eration of several departments of PAU and involve baseline and continuinghousehold surveys. Finally, to understand the groundwater situation as itrelates to groundwater pumping and the influence of flood protection, newsurface irrigation, water spreading for groundwater recharge and improvedvegetative cover of the Shiwalik Hills, it would be necessary to initiatea long-term study to be carried out by the Directorate of Water Resources(paras 4.32 and 4.33).

6.19 PAU, in consultation with the proposed team of consultants and theagencies mentioned above, would prepare details of work to be undertaken.Assurances have been obtained that, by September 30, 1980, PAU would forwardto the Bank, for review and comments, detailed proposals to evaluate theeconomic and social effects of the project on beneficiaries. The resultsof this evaluation would be furnished to the Bank yearly.

Cost Recovery

6.20 Unlike an irrigation scheme, where beneficiaries are easy to iden-tify, it is difficult to pinpoint which farmers should pay for the cost offlood protection works. Flood damage varies from year to year, with some landsubject to perennial flooding and some only occasionally inundated. Thus,charges would vary depending upon the frequency and severity of damage. Norecords of this exist. Moreover, the flood protection works would benefitlarge numbers of people not directly affected by flooding as they would pro-tect roads and bridges, and would lead to secondary benefits, such as invest-ments in permanent housing and small-scale industry. Such benefits would

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accrue to both the farming and non-farming population. Thus, it is difficultto determine what proportion of the cost of works should be borne by farmers.

6.21 In addition to difficulties of determining who should pay, and howmuch, the imposition of a tax on farmers for flood protection works is notjustified on equity grounds. First, the main objective of flood protectionis to restore agricultural land to its original condition. The choes whichcause the flood and sediment damage are of recent origin and have resultedfrom overgrazing and felling of trees in the upper catchments. Agriculturalland has been damaged by actions of those in the hills (who are frequently notlandowners) and the problem has been exacerbated by the inability of Govern-ment to rectify the situation. It would be inequitable to tax farmers toreturn land to its original condition when the damage has been caused by athird party. Second, the population of the Kandi Tract is the most backwardin the State. Thus, most of those who would have to pay the tax are presentlyliving below the absolute level of poverty. To offset years of neglect andpoverty, GOP has declared the Kandi Tract "a backward area" and, as a matterof policy, has directed that development expenses (other than for on-farmdevelopment) would not be recovered through direct means. Moreover, unlikeirrigated areas which usually raise incomes above those of the rest of theState, post-project incomes of those living in the Kandi Tract would stillbe below those of the plains where over 80% of the area is irrigated. Finally,since the dam is dual purpose--to control flooding and provide irrigationwater--any proportioning of the cost of the dam between flood control andirrigation would be arbitrary. Therefore, it is not proposed to recover costsof flood protection works by direct means. However, investment would be part-ly recovered through marketing fees and other indirect taxes. Water and waterrelated charges for irrigation would be collected in accordance with Statepractice. 1/

VII. BENEFITS AND JUSTIFICATION

General

7.01 The proposed project would lay a sound basis for future developmentin the lower foothills of the Himalayas to reverse ecological degradationthat has been going on for decades and to protect and develop agriculturalland that is presently subject to serious erosion and flooding. The projectwould largely benefit those living near or below the absolute level of povertyand would have a considerable beneficial impact on income distribution.

7.02 Because the project would be the first integrated attempt to tacklethe problems of the Himalayan sub-mountainous zone, there is no similar exper-ience in India on which to base an estimate of project benefits with any

1/ The adequacy of existing water charges in Punjab is analysed in detailin the Punjab Irrigation Project SAR, dated March 19, 1979.

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degree of accuracy. Moreover, the long-term benefits from strengthening GOP'scapability to plan, execute, and monitor future projects in the submountainouszone cannot be quantified. However, there is no doubt that the benefits ofthe project are considerable. This chapter briefly discusses project benefitsand indicates, as an illustration, the benefits that might be expected frominvestments in the Dholbaha watershed, the only watershed on which planninghas been completed. This shows that the expected economic rate of return (ERR)in Dholbaha is satisfactory (para 7.11). The ERR in the other four watershedswill exceed 12% (para. 4.20), since only plans in watersheds that have anacceptable return would be approved by the Bank (risk is discussed in paras7.19 and 7.20).

Benefits in Upper Catchment Areas

7.03 Although the main benefit of the upper catchment activities areenvironmental in nature, the project would substantially increase the con-sumption and welfare of those living in the hills. This would be achieved byincreased production of fodder grass for stall-feeding to improved cattle;bhabhar grass, which is in great demand as a pulping material for makingprinting and writing paper and is also sold for making rope, brooms, beds, andfruit baskets; timber for construction, fuelwood and charcoal; and meat, eggsmaize and wool.

7.04 Work in upper catchments would also bring about substantial benefitsto areas below the hills, in particular by increasing infiltration of ground-water and by reducing flood runoff and sediment damage. Reduction in soilerosion would increase the life of Dholbaha dam since sediment inflow would bereduced by about 65%. In addition to reducing erosion, it would reduce peakfloods by about 20%. The reduction in sedimentation and in size and frequencyof floods means that the size and cost of flood protection structures can bereduced accordingly.

Farmer Benefits in Areas Below the Upper Catchments

7.05 The proposed project would directly benefit farmers owning landbelow the hills, but whose holdings are now subject to the ravages of floodand sediment damage and who live in constant fear that their families, homes,cattle, farm investments, and crops might be swept away by flash floods.Accordingly, farmers in these flood-prone areas north of the Chandigarh-Hoshiarpur road, have invested little in permanent structures and in landdevelopment. Moreover, because farmers anticipate that fertilizer will bewashed away by floods, they practice low-risk farming practices with minimalcash inputs and land preparation, so that if crops are destroyed, losses aresmall.

7.06 Without the project, flooding and erosion would continue on theselands. Year after year the quantity of sand deposited would increase. Slowlythe area under cultivation, and with it, soil fertility would decrease. Thus,"without the project" production from flood prone lands is likely to decrease.By converting flood-prone land into flood-free land, the project would makeit attractive for farmers to invest in land development, including land level-ling and sinking of tubewells, in improved land preparation, and in use of

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cash inputs, such as improved seed, fertilizer and pesticides. As a result,crop yields would increase from their present low level, farmers would changecropping patterns moving into higher value crops, and cropping intensities

would increase. In addition, land which is currently idle would be broughtunder cultivation. The following indicates the likely changes that wouldtake place in Dholbaha watershed as a result of the project.

Dholbaha Watershed

7.07 In the case of the Dholbaha watershed, project works below thehills would benefit farmers in two areas: the undeveloped land north of theChandigarh-Hoshiarpur road and those areas south of the road that are presentlysubject to flooding. Presently all areas north of the road are subject toflooding. South of the road, only about 40% of the area is flood-prone,(generally adjacent to unconfined natural drainage ways); the remaining isflood-free. Unfortunately, data on the extent of areas flooded annually andof complete or partial crop damage are incomplete and any estimate of cropdamage would, therefore, be highly speculative. Consequently, crop damage hasbeen excluded from the financial and economic evaluation. Similarly, damageto infrastructure has been omitted as data are incomplete. However, becauseinfrastructure is so poorly developed in the project area, damage is small.The omission of crop and infrastructure damage in the analysis means thatbenefits are understated. In relation to total benefits, however, the effectis small, since by far the largest project benefit derives from the realiza-tion of the agricultural potential of these lands.

7.08 It has been assumed that production "without the project" wouldremain unchanged, a conservative assumption since, as mentioned above, pro-duction is likely to decrease. Details of changes in crop yields and croppingpatterns are in Annex 3, Tables 2 and 3. Regarding changes in land use, the

following table shows land use "without" and "with" the project. The tablesare the same as the table in para. 4.21 except that they exclude presentlyflood-free land as this would be unaffected by the project.

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Land Use in Dholbaha Without Project (ha)(Excludes presently flood-free land)

CultivatedIrrigated Irrigated Cultivable(Tubewells) (Dam) Rainfed Total Waste Total

North of the Road 160 - 2,885 3,045 1,725 4,770South of the Road - - 1,900 1,900 500 2,400

160 - 4,785 4,945 2,225 7,170

Land Use in Dholbaha With Project (ha)(Excludes presently flood-free land)

CultivatedIrrigated Irrigated Cultivable(Tubewells) (Dam) Rainfed Total Waste Total

North of the Road 170 3,000 1,600 4,770 - 4,770South of the Road 1,300 - 1,100 2,400 - 2,400

1,470 3,000 2,700 .7,170 - 7,170

7.09 Details of the anticipated change in land use in Dholbaha are inAnnex 3. In brief, north of the road, the following changes have been assumed,that:

-- existing cultivable waste would be brought into cultivation;

*- the Dholbaha dam would provide rabi irrigation to 3,000 ha;and

-- the remaining cultivable land would be rainfed, although(after levelling and with increased use of farm inputs)productivity would be enhanced.

Based on the assessment that 40% of the area south of the road is also flood-prone, it has been assumed that:

-- existing cultivable waste (which comprises 5% of the area)would be brought under rainfed cultivation; and

-- production on 1,900 ha rainfed land (25% of the area) whichis presently flood-prone would increase as a result of theproject and complementary investment in tubewells.

The remaining land south of the road, all of which is presently irrigatedby tubewells, is assumed to be unaffected by the project.

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7.10 To show increases in farm income based on these assumptions, farmbudgets have been prepared for representative 2-ha farms (the average farmsize) "with" and "without" the project. Details and assumptions regardingprices, yields, input requirements and the derived crop and farm budgets arein Annex 3. In brief, farm incomes would increase as follows:

Full development Full development Relative increasewithout Project with project due to project (%)

(w) (w) (w - w)

(w)

North of RoadRainfed Rs 1,020 /a Rs 4,550 350Irrigated (dam) - Rs 7,790 660

South of Road(flood-prone)Rainfed Rs 1,630 /a Rs 4,550 170Irrigated(tubewells) - Rs 10,870 540

/a Over estimated since figures have not been adjusted for probabilityof failure due to floods.

Farm incomes are thus expected to increase by as much as 660% as a result ofthe project, depending upon whether a farmer owned land north or south of theroad and whether he would receive irrigation or not. The reason that theseincreases are so high lies in the extremely low base at which farmers operateat present--over 30% of the area "without the project" is uncultivated; thus,incremental production would be substantial.

7.11 Rate of Return based on Dholbaha Watershed. Based on the benefitassumptions in paras 7.07-7.10, the economic rate of return for Dholbahawatershed (32% of project costs) is estimated at 16%. Details are in Annex 3.In brief, the following costs have been included: cost of soil conservationand reforestation works in upper catchment areas; Dholbaha dam and irrigationsystem; flood protection works; soil conservation works; maintenance costsover the life of the project; and complementary investment in land levellingand tubewells.

7.12 Sensitivity Analysis. To test the sensitivity of the ERR to a changein assumptions, a second model (Model II) has been run. In this, it has beenassumed that benefits north of the road would be as in Model [, above. Asmentioned, this is already a very conservative assumption since no privateinvestment in tubewells is assumed. South of the road, however, in Model II,it is assumed that the only benefit would be from the 500 ha of uncultivatedland which would be converted to rainfed farming. Thus in Model II the 1,900ha of existing rainfed land is assumed to be unaffected by the project. TheERR so calculated is 13% showing that even with the most conservative benefitassumptions the rate of return is acceptable.

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7.13 ERR for Rehabilitation of Upper Catchments: To show that reforesta-

tion and soil conservation measures in the upper catchments are viable in

their own right, the ERR has been calculated on this component alone. Details

are in Annex 3, Section VI. In order to achieve benefits in the upper catch-ment areas, forests would have to be closed to grazing, resulting in loss of

certain benefits to users. After deducting these foregone benefits, the ERR

is estimated at 12%. Because the estimate of benefits foregone is uncertain,

a sensitivity analysis was carried out using a 25% and 50% increase in bene-fits foregone. The ERR fell by less than one percentage point, showing thereturn is rather insensitive to errors in estimating benefits foregone.

Other Project Components

7.14 In addition to work in the hills (soil conservation and revegetation)

and below the hills (flood protection, irrigation and land development), the

project includes components for: (a) livestock, fisheries and horticulture;and (b) technical assistance, overseas training, agricultural research, and

groundwater investigations and trials. The economic analysis of the livestock

component has, in part, been reflected in the analysis of the reforestation,grass and soil conservation component in upper catchments. In this, the econo-

mic price of grass has been derived from the economic price of milk. Regard-ing fisheries (1.6% of project costs), existing facilities in Punjab for theproduction of fingerlings are fully utilized. The fisheries component pro-

vides for construction of one farm to raise fingerlings to stock the Dholbaha

and other reservoirs. Fingerlings not used in the Dholbaha reservoir would beused to stock farm ponds, reservoirs and unused canals and would be absorbed

without difficulty. The component would enable full utilization of the reser-voir, provide additional employment and considerably enhance nutritional levelsin the upper catchment areas. Regarding horticulture, the sandy soils north

of the road are ideally suited to horticulture which has a high financial and

economic value and would provide a major source of cash income to farmers.

Costs and benefits of this component have been included in the analysis of theDholbaha as horticulture has been included in the future cropping patterns.

Employment, Production and Marketing

7.15 As discussed, because this is a pilot project, estimation of benefitsis highly speculative. However, in order to have a rough estimate of projectoutput, it has been assumed that the per hectare benefit would be the sameon the 12,000 ha to be protected and developed in the four additional water-sheds as for the 7,170 ha in Dholbaha. On this basis, it is estimated thaton-farm employment would increase annually by about 1.6 M mandays annually

at full development, equivalent to the creation of some 5,000 full-time jobs.The project would also create about 6 M mandays of employment during the con-struction phase. The projected increase in production of major crops, exclud-ing fodder (which could be marketed without difficulty) is as follows:

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Incremental Production at Full Development

Dholbaha Other Watersheds Total

Wheat (tons) 7,000 11,400 18,400Maize (tons) _5,700 9,600 15,300

Sub-total (tons) 12,700 21,000 33,700

Oilseeds (tons) 200 300 500Potato (tons) 2,600 4,300 6,900Sugarcane (tons) 20,000 33,500 53,500HorticulturalProducts (tons) 5,200 8,700 13,900

Milk ('000 litjes) 3,200 7,500 10,700Timber ('000 m ) 90 230 320Bhabhar Grass (tons) 3,300 7,700 11,000

Direct Project Beneficiaries

7.16 The project would directly benefit some 4,000 farm families in uppercatchments and about 12,000 farm families below the hills (of which about4,500 would be in Dholbaha). In the upper catchments, the cost per farmfamily benefitted is US$2,800. However, only part of the benefit accrues tothose living in the upper catchments -- most accrues to those living below thehills. Below the hills, the cost per farm family is US$2,500 in Dholbaha andUS$1,700 in other watersheds (excluding contingencies). As discussed, invest-ment in other watersheds would not be restricted to this amount but would bedetermined on a watershed by watershed basis.

Social Benefits

7.17 The project would have a considerable beneficial impact on incomedistribution. As discussed, most of those who live in the Kandi area livebelow the absolute level of poverty. The project would have an immediate anddirect impact on their incomes. In addition, the project would, by eliminatingthe fear of flooding, make it possible for farmers to initiate development ontheir own accord -- to invest in tubewells, farm machinery, better housing,etc. The proposed project, thus, provides a unique opportunity for allfarmers, small and large, to benefit.

Environmental Impact

7.18 The project would have a strong positive environmental impact.Reforestation, soil conservation and closure to livestock in the upper catch-ment is expected to result in a recovery of the soil and water retentionproperties which prevailed when the hills were covered in forests. Thestorage dams, retention dams, diversionary channels, levees along the choeoutlets, gully plugging, bench terracing, and land levelling will control the

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flood waters in the middle and lower catchments and allow the farm lands ofeach watershed to be developed to their full potential. Once an ecologicalbalance has been reestablished in the upper catchments, it is expected wildlife and perennial streams would reappear.

Project Risks

7.19 There are four main project risks, each of which relates to the pilotnature of the project. First, although most of the project components havebeen tried in Punjab, the proposed project would be the first attempt to inte-grate the various components. The project is thus unproven in its totality andthere is, therefore, a risk that the project will not realize adequate bene-fits to generate an acceptable rate of return. Such a risk is unavoidablein any pilot project. However, the risk is small in relation to potentialbenefits (which are considerable since the institution building aspects ofthe project will enable the project to be replicated in Punjab and elsewherein India). The second risk is that technical problems would emerge thatwould be difficult to resolve. For example, there is a danger that with thecanalization of choes as designed, flood water would pick up sediment in theupper part of the channel and deposit it further down. This would raise thebed of the channel above that of the outfall, causing flooding. This problem,should it arise, would be overcome by carefully monitoring sediment movementand by increasing maintenance of the channels. This may also require con-struction of additional spurs and drop structures, which could cost up to 20%of the cost of the levees. This is equivalent to an increase in the cost ofthe Dholbaha scheme of some 3%, which would reduce the ERR by four-tenths ofa percentage point. Moreover, one of the main purposes of involving the con-sultants in project implementation and monitoring is to quickly identifytechnical problems as they emerge, to take appropriate remedial action, andto modify designs of future works accordingly. The third risk relates to theactive participation of farmers and livestock owners in the upper catchments,in particular their willingness to stop animals from grazing in these areas,and instead to stall-feed cattle. During project preparation, those who livein the upper catchments were consulted frequently and have indicated that(a) they realize the benefits from closing the areas to grazing and (b) theywould willingly participate in project activities, provided assistance isprovided to enable them to develop alternative enterprises to increase theirincomes. The project includes a comprehensive development package, and pro-vides for a sociologist and livestock specialist to work with villagers on apermanent basis to ensure the continued and active participation of villagers.Finally, there is a risk that the reduction in flooding would adversely affectthe groundwater table in the plains. Existing hydrologic data are inadequateto accurately determine, at this stage, the effect of the project on the watertable. The groundwater investigation and trials would enable means to befound to recharge the groundwater, e.g. with recharge basins.

7.20 In addition to the above risks, there is a risk to the Bank inallocating funds for protection works in watersheds for which there are, asyet, no concrete proposals. However, detailed plans will be prepared on tenwatersheds with the assistance of project consultants and the risk that wewould not find four watersheds on which protection works would be implementedunder the project which are acceptable for economic and technical reasonswould be small.

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VIII. AGREEMENTS REACHED AND RECOMMENDATIONS

8.01 An agreement has been reached with GOI that Bank funds would bechanneled through GOI on GOI's standard terms and arrangements for financingof state development projects (para 5.03).

8.02 Agreements have been reached with GOP that:

(a) all lands in the upper catchment areas rehabilitatedunder the project would be closed to livestock grazing,and unauthorized extraction of fuelwood and timber(para 4.05);

(b) it would: (i) furnish to the Bank for review the details ofa comprehensive program to improve the social and economicconditions of farmers and livestock owners in the uppercatchment areas; and (ii) in the case of Dholbaha, furnishsuch details by December 31, 1980 (para 4.09);

(c) it would cause its special panel of experts to periodicallyexamine the concept, the design and the construction of thedams and spillways included in the project until the damshave been completed and their performance during the firstfilling has been assessed (para. 4.15 and 6.16).

(d) in respect of watersheds other than Dholbaha, GOP would:

(i) select four watersheds in addition to Dholbaha for imple-mentation under the project. Selection would be on thebasis that works in each of the watersheds are technicallyfeasible and that the economic rate of return is not lessthan 12% unless otherwise agreed with the Bank; studieswould first be conducted n Janauri, Chokal, Maili andPatiala-Ki-Rao;

(ii) substitute another watershed if any of the four watershedsfail to meet the criteria specified in (i) above;

(iii) submit for the Bank's approval, as a condition of disburse-ment, detailed implementation plans for the irrigation andflood protection works for watersheds selected for imple-mentation under the project; and

(iv) complete plans by March 31, 1985 for about ten watershedsrepresentative of watersheds generally in terms of problemsencountered in the project area, including the four men-tioned in (i) above (para 4.19 and 5.09);

(e) it would, by December 31, 1980, prepare and furnish to theBank for review and comment, a detailed work program foragricultural and forestry research (paras 4.34 and 4.35);

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(f) certificates of expenditure would be audited at least once

every six months and the audit report submitted to the

Bank (para 5.09);

(g) project accounts would be audited annually, for each fiscal

year, by independent auditors. Audited accounts, together

with the auditor's report, would be submitted to the Bank

not later than nine months after the end of each such year

(para 5.10);

(h) it would appoint, at all times for the duration of the project,

a Project Coordinator to assist Financial Commissioner, Devel-

opment and Secretary to Government, who shall be responsible

for the overall implementation of the project. The Project

Coordinator would head a Program Planning and Coordination Unit

(para 6.04);

(i) it would maintain the a Policy Review Committee, the Implementa-

tion Committee, and District Level Committees which have been

constituted for this project (paras 6.03, 6.04 and 6.05);

(j) it would, not later than six months after the closing date,

furnish the Bank with a PCR in such detail as IDA shall

reasonably request (para 6.06);

(k) it would, under arrangements satisfactory to the Bank, cause

dams, spillways, irrigation canals and flood channels constructed

under the project to be periodically inspected, in accordance

with sound engineering practices, to determine whether there

are any deficiencies in the condition of such structures, orin the quality and adequacy of maintenance or methods of

operation of same, which may endanger their safety, and will

promptly take all required remedial measures to correct suchdeficiencies (para 6.16);

(1) it would provide adequate funds at all times to operate

and maintain, in accordance with sound engineering standards,facilities constructed under the project (para 6.16); and

(m) by December 31, 1980, PAU would forward to the Bank for review

and comments, detailed proposals to evaluate the economic

and social effects of the project on beneficiaries. Theresults of this evaluation would be furnished to the Bank

yearly (para 6.19).

8.03 With the above agreements and condition, the project would be suit-

able for a Bank loan of US$30 M on standard Bank terms. The Borrower would

be the Government of India.

48

49ANNEX 1Page I

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Terms of Reference for Internationally Recruited Consultants

General

1. The project provides for a team of internationally recruited

consultants to:

- provide advice, assistance and in-service training tostrengthen GOP's capacity to plan, execute, monitor, andmaintain works on small watersheds of the type found inthe Punjab Shiwaliks;

- identify data requirements and assist GOP set up a systemto collect such data, in particular data on flood damageand benefits;

- assist GOP to: (a) investigate, plan, and analyze thevarious alternative development possibilities in tenwatersheds; and (b) prepare detailed feasibility reportsfor submission to the Bank;

- assist GOP to execute works below hills once plans havebeen approved by the Bank;

- advise GOP on structural and vegetative maintenancerequirements;

- assist GOP to establish a monitoring system to quicklyidentify problems as they arise, such as sediment accumu-lation in the channels, so that appropriate remedialaction can be taken and future plans modified accordingly;

- assist GOP to execute and monitor results of the groundwaterinvestigations, recharge studies and trials;

- assist GOP draw up design criteria in the light of expe-rience gained during project implementation which wouldserve as a basis for future plans and designs; and

- assist Punjab Agricultural University establish a system toevaluate project impact.

50

ANNEX 1Page 2

2. Consultants would be responsible to the Secretary for Agricultureand Forests. The team of consultants would comprise a Watershed PlanningSpecialist, Small Watershed Hydrologist and a Water Resource Engineer. Thesewould be in place initially for a period of about 24 months each, but whichis likely to be extended. In addition, specialists in Groundwater and Sedi-mentation would be required on a short term basis (6 months initially).GOP would provide the services of a project economist to work with the team;terms of reference for the economist are in the Appendix to this Annex. Themajor duties of the internationally recruited team members are outlined below.

A. Watershed Planning Specialist: (Team Leader)

(1) Program and coordinate the activities of the multi-disciplinary team and be responsible for overallwork of the team.

(2) Keep the concerned Departments informed of progress. Hewould be the main contact with other departments.

(3) Assist the Director of Water Resources to: (a) set upthe Groundwater Division and the Surface Water Hydrology,Sedimentation and Planning Division; and (b) allocateresponsibilities for project planning and implementationwithin each division.

(4) Based on the input from team members, provide technicaladvice to assist GOP to:

(a) identify data requirements and set up a system tocollect such data;

(b) assist GOP to set up a system to monitor progress;

(c) draw up detailed design criteria and constructionmethods which would serve as the basis for futurework; and

(d) implement project works using modified constructionstandards.

(5) Supervise work of team members, particularly to ensurecomprehensive in-service training of concerned GOPstaff;

(6) In conjunction with team members, propose alternativeproposals for treatment of watersheds; advise and assistGOP to plan and analyze alternative proposals; adviseand assist GOP to draw up detailed feasibility plans andreports for submission to the Bank; and assist GOP toprogram, implement, monitor and maintain works; and

51

ANNEX 1Page 3

(7) Assist GOP as required in matters related to theproject.

Experience Required:

A University graduate in a related technical field with a 15-20years experience in soil and water development projects; of which 10 yearsexperience should be in planning. He should have not less than 5 yearsexperience as leader or deputy leader of a multidisciplinary planning team,responsible for comprehensive development of small watersheds.

B. Small Watershed Hydrologist

(1) Evaluate existing hydrologic procedures; advise on pro-cedures that are suitable for small watershed planningand development; and assist in implementation of theproject.

(2) Assist GOP to establish the Surface Water HydrologySedimentation, and Planning Division, and advise onprocedures for its operation.

(3) Identify hydrologic data deficiencies and advise onequipment, locations, operation and costs of streamgauging and meteorology observation stations requiredto collect data for future planning. In particular, toassist GOP to collect data for the analysis of ground-water conditions to assess the scope for groundwaterrecharge.

(4) Assist GOP to prepare data on existing frequencies, flowrates and quantities and for alternative plans and designs.Data should be in sufficient detail for the analysis ofchannel stability and sediment transport.

(5) Assist GOP to prepare and implement plans for monitoringand evaluation of hydrologic effects of the project.

(6) Assist GOP to establish a program to train staff and pre-pare technical notes so that GOP staff have a sound basisfor planning of future works.

(7) Assist the project economist with the analysis of flooddamage surveys by providing relevant hydrologic data.

(8) In the absence of the Sedimentationist, assist GOPto implement plans prepared for collecting informationand analysing sediment production and transport,and channel stability.

52

ANNEX 1Page 4

(9) In the absence of the Groundwater Specialist, workwith the Groundwater Division, in particular, theGroundwater Irrigation, Recharge studies and trials,and assist GOP to prepare a final comprehensivereport.

(10) Assist GOP with the preparation of hydrologic aspectsof proposed watershed feasibility reports for submissionto the Bank.

Experience required:

A University degree in engineering or related field, with a minimumof 10 years experience in hydrological research and/or the planning and de-sign of the hydrologic aspects of soil and water development and land treat-ment. He should have about 5 or more years experience in feasibility plan-ning of small watersheds, preferably as part of a multidisciplinary team.

C. Water Resource Engineer

(1) Evaluate existing criteria and standards for the planningand design of structural measures with particular emphasison the design of stable channels, water control works andgroundwater recharge facilities.

(2) Advise on new standards and criteria for the above.

(3) Identify data deficiencies and advise and assist GOP tocollect engineering data required for planning.

(4) Examine in detail existing proposals for treatment ofwatersheds; propose and assist GOP to plan and analysealternative solutions; and assist GOP to execute pro-posals approved by the Bank.

(5) Assist GOP to prepare and implement plans for monitoringeffects of the project so as to quickly identify problemsas they emerge, take immediate remedial action and alterdesign criteria accordingly.

(6) Advise GOP on: construction methods; the optimal mix ofequipment and labor, bearing in mind that labor shouldbe used when possible; and maintenance programs, proceduresand costs.

(7) Assist GOP with the preparation of technical aspects ofproposed feasibility reports for submission to the Bank.

53

ANNEX 1Page 5

Experience required:

A University degree in Civil Engineering, with about 10 yearsexperience in the planning, design and construction of soil and waterdevelopment and land treatment measures. He should have at least 5 yearsexperience in multidisciplinary feasibility planning of small watershedsinvolving irrigation, drainage, and flood and erosion control.

D. Groundwater Specialist (short-term)

(1) Advise and assist GOP in planning and executing the pro-posed groundwater investigations and studies (terms ofreference for this study are in Annex 6, contained in thesupplementary Implementation Report).

(2) Assist GOP to strengthen the Groundwater Division, withinthe Directorate of Water Resources, and advise on proceduresfor its operation.

(3) Advise and assist GOP in planning, execution and monitoringof groundwater recharge trials. Assist GOP to evaluateresults.

(4) Set up a program to train staff of the proposed GroundwaterDivision, in particular, to evaluate and interpret ground-water data.

(5) Assist GOP with the preparation of maps, charts and reportson findings of the groundwater investigations. 1/

(6) Assist GOP with the preparation of groundwater aspects ofthe proposed watershed feasibility reports, for submissionto the Bank.

Experience required:

A University degree in geology or hydro-geology with a minimumof 20 years experience in groundwater studies in semi-arid regions. He shouldalso have experience in areas with seasonal rainfall and flashy intermittentstream flows. At least five years of his experience should be as leader ofa team, responsible for (a) groundwater inventory and water balance studies,and (b) field investigations and the preparation of a final report. Expe-rience with recharge field trials is desirable.

1/ Since the groundwater specialist is a short-term assignment, the smallwatershed hydrologist would be responsible for assisting GOP in hisabsence, in particular, to assist GOP to prepare a comprehensive reportoutlining findings of the Groundwater Investigations, Recharge Studiesand Trials.

54

ANNEX 1Page 6

E. Sedimentationist (short-term)

(1) Evaluate existing sedimentation data and assist GOP on thedevelopment and execution of a program to collect and analyzedata. This is required to determine the effects of sedimentproblems on alternative project plans.

(2) Evaluate existing criteria for the design of water disposalchannels and advise and assist GOP to establish planningand design criteria for stable flood channels.

(3) Advise and assist GOP to set up a system, including instal-lations and equipment required to monitor project effective-ness, in particular: sediment production; sediment trans-port and channel erosion. Special attention should be givento problems of sediment accumulation near the outfall ofthe proposed channels.

(4) Advise GOP on the effects of proposed land treatment measureson sediment production, both in the upper catchments andbelow the hills.

(5) Assist GOP with the preparation of the technical aspects,relating to sediment, of the proposed watershed feasibilityreports.

Experience required:

A University degree in geology, soil science, or engineering witha minimum of 10 years experience in carrying out sediment investigations orresearch. He should also have a minimum of 5 years experience in planningand design of stable channels and small watershed projects in arid or semi-arid areas.

55

ANNEX 1AppendixPage 1

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Terms of Reference for Locally RecruitedProject Economist

1. To generate flood damage data and to carry out the economic evalua-tion of each of the watersheds, GOP would provide a full time project economist.The project economist, who would be recruited locally, would work with theteam of internationally recruited consultants.

2. The major duties of the economist would be to:

(1) establish a sound basis for the economic evaluation ofprojects. To this end, set up a program to train GOPeconomists in the latest techniques of project evaluation.

(2) identify data deficiencies, particularly in the quantifica-tion of flood and sediment damage, for example, total andpartial crop damage, and assist GOP to establish means tocollect such data.

(3) analyze past benefits of choe canalization to attempt toquantify induced investment in tubewells after workshave been completed.

(4) quantify project benefits for the alternative plans underconsideration, for example, the reduction in flood damageand maintenance costs to roads, benefits from improvedrainfed and irrigated agriculture, etc.;

(5) assess secondary benefits, where possible, such as reductionin dislocation of traffic, induced investments in projectarea, etc.

(6) evaluate alternative proposals for each watershed asto their financial and economic acceptability.

(7) assist in the preparation of the economic analysisand project feasibility reports for submission tothe Bank.

(8) assist GOP and PAU to establish a system for monitoringand evaluation of benefits and costs; and

56

ANNEX 1AppendixPage 2

(9) assist the Sociologist in the Office of the Project Coordinatorto develop and implement a comprehensive development package forthe upper catchments.

Experience required:

A University degree in economics with about 10 years experiencewith the economic analysis of soil and water development projects, preferablywith experience as part of a multidisciplinary team, responsible for feasi-bility planning of watersheds in irrigated regions. He should have experiencewith economic analysis of flood damage and with the evaluation of benefitsfrom: flood protection; irrigation; drainage and/or reduction in soil erosion.

INDIAKANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Initial Phasing of ConsultantsL/

MONTH

0 6 12 18 24

Watershed Planning iii_

Specialist I U i I!*| i

Small Watershed 1 I I,_IHydrologist E i .I E I I

Water Resource * * * I *I. IEngineer I_ -

Sedimentationst2 _I I I

Ground Water2" I I iI 1i1I 1Specialist i I I I I _

I l I l I . ~~I ., I I l I. I I

Other3 ' I I I I I Ii | '! iIl I~ ~ -I 1 I -Thre Man-Months as RequiredSpecialists i a

Project DevelopmentmetI II ,Economist4- _

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _I_I I I I L. L .. ... , 0

jJ Initially for a period of 24 months but likely to beextended

2/ Schedule may need revision depending on monsoon season3/ Other specialist to assist with technical problems presently undefined

4] The project economist would be recruited locally by GOP.World Bank -19216

58ANNEX 2Table IPale I

DIDIA

KAJ4DI WATZZSH1D AND AILA DIVZLOUIT PIOJICT (PUNJAS)

Sum_ary Project Costs(is 000)

YEAR Fore ign1 2 3 4 5 Total Exchange

A. UPPER CATCHIENTS

(i) kRforstation and SoilConservation Measures (Table 2)

Capital 3099.8 5782.7 10,774.7 14,986.9 15,218.5 49,862.6 479Establish,ent 1094.5 1527.8 2.388.5 2,918.0 .3.318.3 11,247.1 246

S.b-total 4194.3 7310.5 13,163.2 17,904.9 18,536.8 61,109.7 725

(ii) Livestock/Poultry etc. (Table 3)

Capital 555.9 559.5 492.3 726.5 654.5 2,988.7 70Purchase of Livestock 2270.0 4300.0 5,310.0 7,335.0 7,335.0 26,550.0Establimbuent 555.1 758.6 948.0 1,154.0 1,171.8 4,587.5 271Credit for Nev Forest Enterprisesand Compensation 235.0 605.0 1,352.5 1,854.5 1,954.5 6,001.5

S.b-total 3616.0 6223.1 8,102.8 11,070.0 11,115.8 40,127.7 341

Total Upper Catcheents 7810.3 13.533,6 21,266.0 28,974.9 29,652.6 101,237.4 1066

B. FLOOD CONTRDL 4 IRRICATION

(i) Dholbaha - Flood Control (Table 5)

Capital 8520 10980 2200 21,700 1060Establishment 1090 1450 380 650 650 4.220 380

Sob-total 9610 12430 2580 650 650 25,920 1440

(ii) Dholbaha Dam & Irrigation Sytem (Table 4)

Capital 14810 27540 10,220 2,540 790 55,900 10070Eatablish.ent 600 1070 1.150 660 350 3.830 210

Sub-total 15410 28610 11,370 3,200 1140 59,730 10280

(iii) Other Watersheds 1/ - 5560 22,230 38.900 44.460 111.150 11120

Total Flood Control & Irrigation 25020 46600 36.180 42.750 46.250 196.800 22840

C. LAND DTEVLOPHENT

(i) Dholbaha (Table 6) 3056 3650 5694 5756 1781 19,937 1394

(ii) Other Watersheds 2/

(iii) Horticulture Development (Table 9)

Capital 839.9 190.5 15.5 67.5 67.5 1180.9 186Establishment 506.9 611.1 655.4 670.9 681.6 3125.9 116

Sub-total 1346.8 801.6 670.9 738.4 749.1 4306.8 302

(iv) Fisheries Development (Table 3)

Capital 2645.0 905.0 372.0 12,0 12.0 3946.0 179Establishent 233.3 402.4 418.3 412.6 406.8 1873.4 68

Sub-total 2878.3 1307.4 790.3 424.6 418.8 5819.4 247

Total Land Development 7281.1 5759.0 7155.2 6919.0 2948.9 30.063.2 1943

59INER 2

Table IINDIA Page 2

IANDl WATERSHED AND AREA DEVELOPMENT PRYJXCT (PUNJAB)

Sumry Project Costs

(3*000)

YEAR Foreign1 2 3 4 5 Total Exchange

D. TECRNICAL ASSISTANCE. RESEARCH. & TRAINING

(i) Technical Assistance (Table 7) 3590 3590 2630 9810 5210

(ii) Croundwater Investilation & Trials (Table 8)

Capital 1460 1700 1640 1660 1050 7510 740

Establishment 560 940 1030 1180 1250 4960 180

Sub-total 2020 2640 2670 2840 2300 12470 920

(iii) Agricultural Research (Table 9)

Capital 2994 1110 108 48 48 4308 100

Establishment 297 320 320 320 320 1577 43

Sub-total 3291 1430 428 3A8 368 5885 143

(iv) Overseas Training (Table 7) 690 450 1140 780

Total Technical Assistance,Research, & Training 9591 8110 5728 3208 2668 29305 7053

E. PROJECT ADMINISTRAnlON, MONITORINGAND EVALUATION

(i) Progrma Planning and Coordination Unit(Table 10)

Capital 427.0 120.0 12.0 559.0 112

Establish.ent 522.3 583.5 589.5 835.5 835.5 3366.3 283

Project Evaluation 240.0 240.0 240.0 24D.0 240.0 1200.0

Sub-total 1189.3 943.5 841.5 1875.5 1075.5 5125.3 395

(ii) Countarpart Staff for TechnicalAssistanca (Table 7) 200 240 250 270 290 1250

(iii) Hydrology, Sedimentation andPlanning Division (Table 7) 310 420 440 450 460 2080 140

Total Project Administration.Monitoring and Evaluation 1699.3 1603.5 1531.5 1795.5 1825.5 8455.3 535

BASE PROJECT COST 52,223.7 76,166.1 72,856.7 83,647.4 83,345.0 368,238.9 34,582

Physical Contingencies 3/ 4.992.1 8,201.1 8,189.8 9,492.7 10.083.5 40.959.2 3,828

Price Contingencies 5,222.4 13,709.9 18,942.7 29,276.6 34 171.4 101,323.0 9,683

Sub-total 10,214.5 21,911.0 27,132.5 38,769.3 44 254.9 14Z,282.2 13,511

TOTAL PROJECT COST 62,438.2 98,077.1 99,898.2 122,416.7 127,599.9 510,521.1 48,093(US$60.8)

1/ It is assumed that construction of flood protection works would be phased as follows:Year 1: 02; Year 2: 5.; Year 3: 202; Year 4: 35%; end Year 5: 402.

2/ Land development costs for other watersheds included undar flood control end irrigation.

3/ Physical contingencies have been estimted for the individual project componentoand averes about112 of base project costs.

60

ANNEX 2Table 2

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Reforestation and Soil Conservation (in Upper Catchments)(Rs 000)

YEAR Foreign1 2 3 4 5 Total Exchange

CAPITAL COSTS

I. Civil Works

building and Housing 344.0 516.0 505.0 569.0 468.0 2,402.0 -Soil Conservation Works 414 931.5 1925.1 3042.9 3808.8 10,122.3 -Reforestation 1286.2 2898.9 6060.9 8330.6 7643.6 26,220.2 -

Cho Embankment Planting 23 51.8 129.9 197.8 290.4 692.9 -

Research Trails 7.6 9.5 18.3 28.1 31.7 95.2 -

Land Development 342 666 1350 2016 2340 6,714 -

Forest Service Roads 192.0 288.0 432.0 480.0 528.0 1,920.0 -

Sub-total 2,608.8 5,361.7 10,421.2 14,664.4 15,110.5 48,166.5 -

II. Vehicles and Equipment 479 415 346 315 96 1,651 479

III. Land Purchase for Offices andHousing in Sec. 4 12 6 7.5 7.5 12.0 45.0 -

Total Capital Costs 3,099,8 5,782.7 10,774.7 14.986.9 15,218.5 49.862.6 479

OPERATING EXPENSES

Staff Salaries 659.7 922.0 1,571.8 2,005.5 2,324.9 7,483.9 -Operation of Vehicles and

Equipment 171.6 275.6 403 507 507 1,864.2 186.4Maintenance of Roads 9.6 24 45.6 69.6 148.8 -Upkeep and Running of Stations 23 80.4 155 205.5 262.4 726.3 29.0Training Costs 240.2 240.2 234.7 154.4 154.4 1,023.9 31.0

Total Operating Costs 1,094.5 1,527.8 2,388.5 2,918.0 3,318.3 11,247.1 246.4

Total Without Contingencies 4,194.3 7,310.5 13,163.2 17,904.9 18,536.8 61,109.7 725.4Physical Contingencies 429.1 860.5 1,621.7 2,300.8 2,365.3 7,577.4 379.0

Grand Total 4,623.4 8.171.o 14,784.9 20.205.7 20,902.1 68,687.1 1 104.4

1/ Details are in the Supplementary Implementation Volume, Annex 5, Appendix 9.

61

ANNEX 2Table 3

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Livestock and Fisheries Development 1/(Rs '000)

YEAR Foreign1 2 3 4 5 Total Exchange

LIVESTOCK DEVELOPMENT

A. Capital Costs

Housing & Buildings 228 192 36 72 - 528.0 -Vehicles and Equipment 219 40 20 - - 279.0 70Purchase of Food 108.9 327.5 436.3 654.5 654.5 2.181.7

Sub-total 555.9 559.5 492.3 726.5 654.5 2,988.7 70

Livestock:

- Cattle 1000 3000 4000 6000 6000 20,000- Sheep 1200 1200 1200 1200 1200 6,000- Rams 60 60 60 60 60 300- Bulls 10 40 50 75 75 250

Sub-total Livestock 2270 4300 5310 7335 7335 26,550

Total Capital Cost 2825.9 4859.5 5802.3 8061.5 7989.5 29.538.7 70

D. 0Oerating Costs

Staff 222.5 296.8 354.3 354.3 354.3 1,582.2Operation of Vehicles and

Equipment 312 409.5 507 702 702 2,632.5 263Office Expenses 14.9 20.1 28.7 31.6 34.4 129.7 8Other Establishment Costs

(Bldg.) - 21.8 40.2 43.7 50.6 156.3Training Costs 5.7 10.4 17.8 22.4 30.5 86.8

Total Operating Costs 555.1 758.6 948.0 1154.0 1171.8 4.587.5 271

C. Credit/Forest Enterprises

Credit for New Enterprises andcompensation for loss ofearnings 235 605 1352.5 1854.5 1954.5 6,001.5Total Livestock Development 3616.0 6223.1 8102.8 11070.0 11115.8 40,127.7 341Physical Contingencies 73 95 89 128 117 502 5

Grand Total 3689.0 6318.1 8191.8 11198.0 11232.8 40.629.7 346

FISHERIES DEVELOPMENT

A. Capital Costs

Land Purchase 1,500 - - - - 1,500 -Civil Works 1,020 780 360 - - 2,160 108Equipment and Vehicles 125 125 12 12 12 286 71.5

Total Capital Costs 2.645 905 372 12 12 3.946 179.5

B. Operating Costs

Staff 115.3 145.3 162.1 162.1 162.1 746.9 -Operation of Plant and Vehicles 69.5 139 139 139 139 625.5 62.5Establishment of Station 40.2 103.5 97.7 92 86.2 419.6 5.1Training 8.3 14.6 19.5 19.5 19.5 81.4

Total Operating Costs 233.3 402.4 418.3 412.6 406.8 1873.4 67.6

Total 2878.3 1307.4 790.3 424.6 418.8 5819.1 247.1Physical Contingency 152 150 90 37 37 466 19

Grand Total 3030.3 1457.4 880.3 461.6 455.8 6285.4 266.1

1/ Detafls are in the Supplementary Implementation Volume, Annex 5 (Appendix 9, Table 4) and Annex 9 (Table 1).

INDIA

[ANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Dholbaha Dam & Irrigation System 1/(Rs'000) Foreign

ExchangeYear 1 Year 2 Year 3 Year 4 Year S Total Component

CAPITAL COSTS -

Detailed Survey & Investigations 550 600 - - - 1,150 10 120

Land Acquisition 2,230 3,900 2,230 - - 8,360 - -

Road Construction 310 130 - _ _ 440 10 40

Dam ConstructionEarth Work 7,920 18,410 4,290 30,620 25 7,660Outlet Work 1,400 1,800 600 3,800 20 660

ONDistribution SystemDistributaries 1,000 1,500 1,140 3,640 10 360Drainage & Projective Works 50 100 50 200 - -

Watercourse 500 800 1,200 740 3,240 10 320

!Buildinas 1,800 600 400 2,800 15 420

Tools and Plant 200 200 140 540 30 160Other 400 400 210 100 1,110 30 330

Total Capital Costs 14,810 27,540 10,220 2,540 790 55,900 10,070

OPERATING COSTS

Establishment Costs (staff) 600 920 920 320 2,760 -Maintenance Costs (dam & IS) 150 230 340 350 1,070 20 210

Total Operating Cost 600 1070 1150 660 350 3,830 210

Total Costs 15,410 28,610 11,370 3,200 1,140 59,730 17.4 10280Physical Contingencies 2.280 4,250 1.700 480 170 8.880 17.4 1540 x

GRAND TOTAL 17,690 32.860 13,070 3,680 1,310 68,610 17.8 11820

1/ Details are in Supplementary Implementation VOlume, Annex 6.

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PRoJECT (PUNJAB)

Flood Protection Works (Dholbaha)(R' 000)

Unit Year 1 Year 2 Year 3 Year 4 Year 5 Total Foreign Excha.igeUnit Cost No. Cost No. Cost No. Cost No. Cost No. Cost Cost Component

% Rs.A. CAPITAL COST

(a) Land Acquisition ha 19.97 135 2696.0 135 2716.0 - - - - - - 5412.0 - -

(b) Civil Works

Preliminary Survey Job 10.9 1 10.9 - - - - - - - - 10.9 - -

bridges and Inlets Job 0.18 - 1000 - 2000 - 2200 - - - - 5200.0 - -Embankment Protection lin.ft 7550 1360 11100 2000 - - - - - - 3360.0 - -Earthwork & Turfing 100 M ft

313.39 200 2680 250 3350 - - _ _ _ _ 6030.0 15 900

Establishment Right of Way Job 32.4 - - 1 32.4 - - - - - - 32.4 - -Buildings - 500 - 500 - - - - - _ 1000.0

Sub-total Civil Works 5550.9 7882.4 2200 15,633.3 900

(c) Equipment

Tools and Plants Lot 115.6 - 200.0 - - - - - - 315.6 25 80Special Equipment Lot 100 100.0 - - - - - - - - 100.0 80. 80Other Equipment Lot 59.1 - 177.3 - - _ _ _ - 236.4 - -

Sub-total Equipment 274.7 377.3 - _ _ _ _ _ 652.0 - 160

Total Capital Cost 8521.6 10975.7 2200.0 - - _ - 21,697.3 - 1060

8. OPERATING COSTS

Establishment Costs 2/ 1065.2 1372.0 275.0 540.0 540.0 3,792.2 10 380Other 26.6 79.0 104.6 104.6 105.6 420.4

Sub-total 1091.8 1451.0 379.6 644. 6 645.6 4,212.6 380

Total 9613.4 12426.7 2579.6 644.6 645.6 25,909.9 1440Physical Contingencies 1170.0 1630.0 380.0 80.0 80.0 3.340.0 180

GRAND TOTAL 10,783.4 14,056.7 2959.6 724.6 725.6 29,249.9 1620

1/ Construction improveaent of diversion and channel levees, bridges etc. Details are contained in Supplementary Volume, Annex 7.2/ During construction period estimated at 12j of capital cost; from year 3 onwards at 2t1 of cumulative capital cost. Would provide

sufficient funds to modify construction, particularly where flood channel starts to aggrade or degrade.

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Soil Conservation Works Between Hills and Road (Dholbaha)

(Ra'000)

---------------------- YEAR-------_________________ Foreign ForeignUnit 1 2 3 4 5 Total Exchange Exchange

Unit Cost No. Cost No. Cost No. Cost No. Cost No. Cost No. Cost Component Component% ~~(Rs.)

Land Levelling Ha 2.2 600 1,320 600 1,320 900 1,980 900 1,980 - - 3,000 6,600 10 660

Bench Terracing Ha 4.5 100 450 200 900 200 900 - - - _ 500 2,250 5 113

Pipe Lines (underground) Ha 2.5 10 25 20 50 20 50 - - - - 50 125 10 12

Gully Reclamation Ha 3.0 200 600 200 600 200 600 200 600 300 900 1,100 3,300 10 330 .

Tanks Ea. 25.0 2 50 2 50 1 25 1 25 1 25 7 175

Watercourse Construction & Lining l/Ha 1.0 1,000 1.000 2,000 2.000 500 500 3,500 3.500

Sub-total 2/ 2,445 2,980 4,555 4,605 1,425 15,950 1,115

Establishment Cost 3/ 611 730 1.139 1.151 356 3.987 279

Total 3,056 3,650 5,694 5,756 1,781 19,937 1,394Physical Contingencies 4/ 458 548 854 864 267 2.991 209

GRAND TOTAL 2/ 3,514 4.198 6.548 6.620 2.048 22.928 1.603

1/ In Command Area of the dam.2/ Includes all soil conservation measures outside forest area and north of road, i.e. all works to be financed from the

budget. Soil conservation measures south of the road would be financed from institutional credit and have not been cryincluded in project costs.

o x3/ Establishment costs include supervisory and support services, including incremental staff, vehicles, offices expenses

etc. and are estimated at 25. of cost of works. a r4/ 15Z of establishment costs.

65

INDIA TabTi /

X42.DL WATERSHED AND AREA DZVE OHDIT PIIECT (PUAf)

Directorate of Water eore lnldn vrsa rIig- (Ru '000>

Cost N.sb-er Fcc,Po. f1 2 3 4 5 T.t.1

Unit Month Specsli.st. Months Costs . ona Cost. Mnotha Costs Moochs CostsST5ENRTKERING A! Xi,2ECIRATE Months___ Coats_ Moths ___t_ Au.~~

(I) Technical ASSEStssne

W htee.hed PIhn.Ing Sp-eil si Month 80 1 12 960 12 960 24 19?081t WVt .Is t d HyNrologist Month 52 1 10 520 8 416 18 J2

6Water Rsoseoe Engin..er Month 76 1 12 912 12 912 24 1c24SedinestationJt Month 74 1 4 296 4 29noruondeter Spscil-lst Honth 79 1 4 316 2 158 6 474Others Month 74 1 2 14b 1 74 3 222

Suh-t.tE1 1/ 44 315' 35 2520 79 5672 b5 3b 7etenl-o- of contracts 2/ Month 74 6 444 35 2590 41 303'1 6> 1972Tosal 44 3152 41 2964 35 2590 120 1204 12 56o-rheed (Tra.el etc.) 3/ 1270 1186 1036 '4I2 20 _ ,,Ot.o 4412 4150 3626 12.

Co-t/ Nonber ofYear 3pec ialist

(ii) Cosnte-p.rt St.ff S/

Planniog Egi..eers (sNnior) 30 2 50 50 60 h0 70 290Reorso e Hevelopnont Econo-mit 14 1 21 20 20 30 30 120 Agrlccitoral tronomist ~~~ ~ ~ ~~15 I 10 10 10 20 2~ 70 -Deolgn Engi..er 30 1 20 30 30 3J 30 140Ant. De.igs EngIneer 18 1 1a 20 20 20 20 90JunIor Zngineer 15 5 70 70 70 70 80 360Clerical Stsff 6 3 10 20 20 20 20 0oOth.ra 6 3 10 20 20 20 20 90 - -Total 200 240 250 270 2O 1250 -

(t11) Hydrology nd Sedin...ttion DIcluEct 5/

Otsff 130 200 280 280 280 1170 - -oflon 10pm... 50 HO OH HO 90 3U0 1I 40VehIcles and Iqulpnent 70 8H 80 90 90 414 25 blOTr6vel Eupenses 60 60 120 -Total 310 420 440 450 460 2060 - 140

OVERSEAS TiLAININC

(I) Direotor.ts of W.ter Deso.rces

r.o..dsa-er Recharge Hydrologist- Senior 1 6 110 110 70 "

S.di .. t.ti.n HyAA-ologi.t- S,nlor 1 6 80 6 80 60 70 110- JunI r 1 6 bO 6 80 160 /0 110Small Watershed llydrolgi.t 1 4 60 4 70 190 70 90Water Re.ouroea E-onprist h 80 6 80 ItO 70 1!0

Watetrhed Plnning Eugine-r 1 6 80 6 Ho 160 70 11Sub-totRl , 600 390 990 70 t;O

(ii) FPresen

Wat.e.hed M.pg ent Spoclalist 2 5 9C 4 60 150 70 100

TOTAL OVERSEAS TRAENIKG 690 450 1140 70 760

1/ Av-rg of US$ 8.500 per n-eonth._/ It 1. eapsotod th.t goonultats' cootract wouId bo entended beyond Iitil1 79 ro.hs. The proJact, theefore., p-olid-n for a total of 120 to-months.3/ Travel nehi.ls., affics eqcip-to etc. Would elm g-oer -ost of looElly recrr,ite proJecE egmsist Tsken as 40. of total coste4/ Doe. not includs counterpart staff in-luded In Hydrology and Sedipent-tin Oliulon cr in ErOAnd-stor 1gventig.tion Dlvislo.5/ DetH1s are in Suppl-tary l Iplent.tios R.port, A-..

66

ANNEX 2Tablc 8

INDIA

KANDI WATERSHZD AND AREA DEVELOPMENT PROJECT (PUNJAB)

Groundvater lnvestlgatien. Rechargs Studies *ad Trials 1(Ri '000) Foreign

ExchangeYear I Year 2 Year 3 Year 4 Year 5 Total Component

X Rs.A. CAPITAL COSTS

Well drilling, incl. casing,collectors, etc. 500 800 840 700 400 3,240 10 320

Deep Piezometer wells 120 120 240 5 10Settling & recharge basins 240 580 600 860 600 2,880 5 120Vehicles, equipment,

instruments 600 200 200 100 50 1.150 25 290Sub-total 1,460 1,700 1,640 1,660 1,050 7,510 740

B. OPERATING COSTS

Groundwater Invest. Divn. 2/- Salaries 260 400 400 400 400 1,860 - -

Other Operating Expenses

Staff travel allowances 60 60 60 60 60 300 10 30Vehicle operation 40 120 120 120 120 520 10 50Headquarters office overhead 40 90 90 90 90 400 - -Circle office overhead 90 110 120 150 150 620 - -Kachine operation 70 100 120 180 190 660 15 100Maintenance of basins 60 120 180 240 600 - -

Sub-total 300 540 630 780 850 3,100 180

Total Operating Costs 560 940 1,030 1,180 1,250 4,960 3.6 180

C. TOTAL Z,020 2,640 2,670 2,840 2,300 12,470 7.3 920

Physical Contingencies 200 250 280 300 250 1,280 7.3 90

GRAND TOTAL 2,220 2,890 2,950 3,140 2,550 13,750 7.3 1010

1/ Details are in Supplementary Implementation Volume, Annex 6.

2/ Comprises a groundwater division to be set up within the Directorate of Water Resources. The head ofthe groundwater investigation division would act as counterpart to the water resource engineer and thegroundwater specialist in the planning teem to be established under the project.

67

ANNEX 2Table 9

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUiJAB)

Agricultural Research and Horticultural Development .1(Rs '000)

YEAR Foreign1 2 3 4 5 Total Exchane

AGRICULTURAL RESEARCH

A. Capital Costs

Land Purchase 1,800 ',800Land Development 5SO 150 60 360Buildings 864 780 1,644Equipment 180 180 48 48 48 504 100

Total Capital Costs Z,994 1,110 108 48 48 4,308 100

B. Operating Costs

Salaries 228 234 228 228 228 1,146Establishment of Station 69 86 92 92 92 431 43

Total Operating Costs 297 320 320 320 320 1,577 43

Total 3,291 1,430 428 368 368 5,885 143Physical Contingencies 150 170 30 20 20 390 10

Grand Total 3.441 1.600 458 388 388 6.275 153

HORTICULTUlkE

A. Capital Costs

Civil Works 335.9 335.9Vehicles and Equipment 474 160.5 15.5 67.5 67.5 785.0 179.7Development of Station 30 30 60 6

Total Capital Costs 839.9 190.5 15.5 67.5 67.5 1,180.9 185.7

B. Operating Costs

Staff Salaries 263.7 308.9 328.5 328.5 328.5 1,558.1Establishment of Station 17.8 64.3 77.5 87.5 94.7 341.8 7Operation of Vehicles 218.4 218.4 218.4 218.4 218.4 1,092 109.1Training Costs 7 19.5 31 36.5 40 134

Total Operating Costs 506.9 611.1 655.4 670.9 681.6 3,125.9 116.1

Total 1,346.8 801.6 670.9 738.4 749.1 4,306.8 301.8Physical Contingencies 30 25 25 25 25 130 6

Grand Total 1.376.8 826.6 695.9 763.4 774.1 4.436.8 307.8

1/ Details are in the Supplementary Implementation Volume, Annex 9 Tables 2 and'3.

aO S C .- 'W0r>nb**°ooo " r

6 'oC o " ftt,0 Of Otfe tf. " .. ¶O H

n~~~~~~~~0~ "C nn*=y6 "o,9n >n n' C n en '5fl n

5 . r > 5 n o w -~f _'f n1 j j DI 0IftIl o n . rc n2 r r 0 n3 n*n

n .g .t S > ,°' F-- - - - -S =r °~9~ °S6 -

t<^ ~ ~ '0 ONCO CtCOCO Co CCr C0 0'o s s n i

@ >@ W so tt2g. . t'C CN0'0. ' CO0CN'CC'CC' CC.° C- F o~9 - 9 CIl1f G U @ st C D C C C O ' C 000 C C C''0 0 0 -C° >s 1ss O 'w 9 10 ft o C

__ ~ ~ ~ ~ ~ N''C0 _P C O'0 NCCCNC_ 0ws__ 0'__ NCCC C C f

.' OC C. '0 OS '0 OOO 0C'C: _''0 ON 0 0C,' ;O PC r '0 0CC 0. r CCC1 ' - -- "' OIIn

0'1 O CQC*.b.t1' N. O'COC'0-,0 0'C 'O___ O. --O -_0 w~

. oa . . ooob b oooob ns '. rr- ^r r -'s-rr .tS*.'.;. '.A ft

1- 0o 0@ -Iro I '0CC'b 5W0 ]

Co -o o C C1 - ''-1W

69 ANNEX 2Table 11

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Estimated Schedule of Disbursements(US$ Million)

Bank Fiscal Year Disbursementand Semester Semester Cumulative

FY 81

1st 0.8/ 0.82nd 1.0 1.8

FY 82

1st 2.0 3.82nd 3.0 6.8

FY 83

1st 3.6 10.42nd 4.0 14.4

FY 84

1st 4.0 18.42nd 4.0 22.4

FY 85

1st 4.0 26.42nd 3.6 30.0

1/ Retroactive financing for expenditures prior to loan effectiveness.

70ANNEX 3Page 1

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Financial and Economic Analysis

I. INTRODUCTION

General

1. The proposed project comprises a series of interdependent com-ponents, from reforestation and soil conservation measures in the uppercatchments to protection and development of presently flood-prone agri-cultural land below the hills. These works would primarily benefit farmersbelow the hills. Below the hills, farmers benefitting would be those withland subject to the ravages of flood and sediment damage and who live incontinual fear that their families, homes, cattle, on-farm investments andcrops might be swept aside by flash floods. Accordingly farmers in theKandi area, and in floodprone areas south of the road, have invested littlein permanent structures and in land develepment, for example only 5% of thecropped area is irrigated, while south of the road some 70% is irrigated.Moreover, because farmers anticipate that inputs will be washed away byfloods, they practice low input, risk minimizing cultivation practices --a thin sowing of seed and minimal land preparation so that if crops aredestroyed, losses are kept to a minimum.

2. Farmers below the hills can be divided into two categories: thosewith underdeveloped land north of the Chandigarh-Hoshiarpur road; and thosewith flood-prone land south of the road. Presently, all areas, north of theroad are subject to flooding, while, south of the road, only about 40% isflood-prone. The remainder is flood-free. Unfortunately, data on the extentof the areas flooded annually and of complete or partial crop damage areincomplete. While reliable records are kept on lives and cattle lost, Gov-ernment only records crop damage in years of particularly severe flood, whenit is felt farmers would have insufficient resources to see them through tothe rabi crop. In such years, Government provides a small amount of compen-sation to farmers if crops have been totally destroyed. This data is inade-quate to quantify annual average crop damage and any estimate of such damageswould thus be highly speculative. These damages have, therefore, been ex-cluded from the economic evaluation. As a result, benefits are underestimated.However, since yields in flood-prone areas are low, crop damage is also low,particularly in relation to the large quantifiable benefit. The major quan-tifiable benefit of the project is to help to realize the agriculturalpotential of these flood-prone lands.

3. The project would also benefit farmers and livestock owners in theupper catchments. In this Annex, Section II gives the general assumptionsused in the following analysis; Sections III and IV relate to the economic

71

ANNEX 3Page 2

analysis of the Dholbaha dam, irrigation system and flood control components;

Section V relates to the estimation of benefits of flood protection works in

watersheds other than Dholbaha; Section VI relates to the economic analysis

of the forestry and soil conservation components in upper catchments; and

Section VII gives the project rate of return.

II. BASIC ASSUMPTIONS (General)

4. The economic prices of major traded agricultural output and imputs

are derived from the IBRD projected 1990 world market prices expressed in

1980 currency value with appropriate adjustments for freight, handling and

processing. The projected economic prices for non-traded foodgrains, on the

other hand, are based on the historical ratios between these crops and that of

wheat and paddy. The finanical prices of various crops are projected on the

basis of their historical price trends (para 7). Present and Projected

financial and Pcnnomic nrioor nrp ai'iun in Table 1. The detailed assumptionsbehind the estimates are described below.

Official Exchange Rate (OER)

5. Until September 24, 1975, the Rupee was officially valued at a fixed

Pound Sterling rate. Since then it has been fixed against a "basket" of

currencies. As these currencies are floatinR, the US Dollar/RuDee exchange

rate is subject to change. Conversions of financial prices have been made

at US$ to Rs 8.40.

Standard Conversion Factor (SCF)

6. Project benefits are evaluated at world market prices, i.e. they

measure what India would have to pay for imports or receive for exports.

Most of the costs, however, are for items that are not traded on the world

market. Tariff and trade restrictions introduce a distortion in the price

relationship between traded goods -- valued at world market prices -- and

non-traded goods -- valued at local prices. Thus, the costs are not directly

comparable with the benefits. In order to make them comparable, a SCF is

applied to the price of non-traded goods and consumption. In the absence

of trade restrictions, the SCF can be approximately calculated using the

formula:

X + M 1/SCF + S + M + -x m

For the period since 1970, this calculation gives a SCF of 0.86. However,

since this estimate does not take into consideration quantitative restric-

tions, it provides only an upper limit for the SCF. The Indian Planning

1/ X = fob value of exports at the official exchange rate (OER); M = cif

value of imports at OER; S = export subsidies; T = import duties.

72

ANNEX 3Page 3

Commission recommends for the evaluation of industrial projects the use of

conversion factors for foreign exchange and for untraded goods that implicitly

give a SCF of about 0.75. Because of the approximate nature of this estimate,

a SCF of 0.8 has been used in the economic analysis.

Prices of Agricultural Outputs

7. The economic prices for traded goods such as rice, wheat, maize,

and sugarcane are based on their border prices at the OER. The domestic cost

components (i.e. local transport and marketing charges) are adjusted by the

SCF of 0.80. The economic prices for non-traded foodgrains, such as pulses,

are derived by applying the historical price ratios between pulses and wheat 1/

to the economic price of wheat. 1/ The projected financial prices for various

crops are based on the estimated historical price trends 2/ in India, adjusted

for local conditions in the Kandi area. In general, there is a close cor-

respondence between the projected economic and financial prices.

Prices of Agricultural Inputs

8. Fertilizers have been valued at the projected world market price.

It has further been assumed that there is no change in the taxes, duties

or subsidies levied on them; since these are small, the economic price is

approximately equal to the financial price. Pesticides and insecticides have

been assumed to be traded. The financial price of bullocks and miscellaneous

charges have been multiplied by the SCF to express them in economic terms.

Analyses of farm labor supply and demand in various Indian projects typically

given an economic shadow wage rate for farm labor in the range of 1/2 to 2/3

of the average financial wage rate. The price of farm labor in the Kandi area

is about Rs 8/man-day. Because of relatively high unemployment in the Kandi

area a shadow wage rate of Rs 5/man-day has been assumed -- 62.5% of the

market wage.

Construction Conversion Factor (CCF)

9. The dam, irrigation system and embankments would be constructed using

a mixture of equipment, skilled and unskilled labor. For the economic analysis,

the CCF is calculated as follows:

% of Construction Cost Conversion Factor

Traded items 15 1.0 .15

Non-traded 30 .8 .24

Unskilled labor 55 .625 .34CCF .75 (approx.)

1/ Actually, to the weighted average of the price of wheat and rice.

2/ See Draft on Economic and Financial Prices of Agricultural Projects in

India, by staff of South Asia Projects Department.

73

ANNEX 3Page 4

III. ASSUMPTIONS (Dholbaha Watershed) I/

Yields and Crop Input Requirements

10. Present and projected yield and input requirements (north and south

of the road) are given in Table 2. These are based primarily on data received

from Punjab Agricultural University and the GOP Department of Agriculture.

Present Land Use (Without Project)

11. The present land use in the Dholbaha, excluding the upper catchment

area is as follows:

Present Land Use in Dholbaha (ha)(Includes presently flood-free land)

-------- Cultivated-----------Irrigated Cultivable Total(Tubewells) Rainfed Total Waste Area

North of road 160 2,885 3,045 1,725 4,770

South of road 4,700 1,900 6,600 500 7,100

Total 4,860 4,785 9,645 2,225 11,870

Uncultivableland /a 2,630 /a

Total 14,500

/a Includes 1,270 ha forest (north of road) and 1,360 ha comprising uncul-

tivable waste, such as roads, villages etc.

As discussed in Para 2, all cultivable land north of the road (4,770 ha) is

today subject to flooding. South of the road, some 40% (2,800 ha) is also

flooded in years of heavy rainfall; however, there is no data to indicate

whether the land flooded is presently irrigated or rainfed. For the purpose

of the economic evaluation, it has been assumed that flooding occurs only on

rainfed land. Thus it is estimated that at present south of road:

-- the 500 ha cultivable waste is frequently flooded;

-- the 1,900 ha rainfed land is flood-prone, with a result

that investments in land development (levelling) and incash inputs in the kharif seasons are today very small;

-- a portion of the presently irrigated area is occasionallysubject to flooding. This has been omitted in the calcu-

lation of project benefits.

1/ Below the upper catchment areas.

74ANNEX 3Page 5

Future Land Use in Dholbaha

12. The project provides for: construction of a flood control andirrigation dam which would irrigate an average of 3,000 ha in the rabiseason; 1/ flood protection works; and, north of the road, levelling or benchterracing of land, where required. The flood control works would make itattractive for farmers to increase substantially cash inputs both on irri-gated and rainfed land. Moreover, with the fear of floods removed, therewould be strong incentive for farmers to invest in further improvement, suchas in tubewells.

13. North of the road, the following changes in land use have beenassumed as a result of project, that:

-- the existing cultivable waste would be brought intocultivation;

-- the Dholbaha dam would provide rabi irrigation to3,000 ha; and

-- the remaining cultivable land would be rainfed,although after levelling and with increased farminputs, productivity would be greatly enhanced.

14. Based on the assessment that 40% of the area south of the road isalso flood-prone, it has also been assumed that:

-- the existing cultivable waste (which comprises 5% ofthe area south of the road) would be brought underrainfed cultivation; and

-- production in 1,900 ha rainfed land (25% of the area)which is presently flood-prone would increase as aresult of the project and complementary investment intubewells. Because the groundwater aquifer south ofthe road is high, and hence tubewell irrigation inex-pensive, it is assumed that 70% of the 1,900 ha wouldbe irrigated. This would increase the area irrigatedby 1,300 ha, so that 85% of the cropped area south ofthe road would be irrigated. The remaining land southof the road, all of which is presently irrigated bytubewells, is assumed to be unaffected by the project.

15. Based on these assumptions, the future land use would be:

1/ Lined conveyance canals would be constructed to irrigate 3,500 ha. Ina year when the dam reservoir fills, the full command area would beirrigated. In drought years, the reservoir would not fill and only aportion of the command area would be irrigated. An average of 3,000 hais assumed to be irrigated.

75

ANNEX 3Page 6

Model II: Future Land Use in Dholbaha (ha)(Includes presently flood-free land)

---------------Cultivated-------------Irrigated Irrigated Cultivable TotalTubewell Dam Rainfed Total Waste Area

North of Road 170 3,000 1,600 4,770 - 4,770South of Road 6,000 - 1,100 7,100 - 7,100

6,170 3,000 2,700 11,870 11,870

Cropping Patterns

16. The average farm size in the project area is 2 ha. Tables 3 and 4give the cropping patterns for a typical 2-ha farm: (a) north and south ofthe road, and (b) with and without the project. Table 3 gives the farm budgetin financial prices; Table 4, in economic prices.

Benefit Build-up Rates

17. Major project works in Dholbaha (dam and protective embankments)would be completed by the end of year three. Full development of projectbenefits is projected to be reached eight years after project completion asfollows:

Year % of Full Benefit

1-3 04 205 356 487 608 709 80

10 9011 onwards 100

Project Period

18. The project period is assumed to be 40 years. No residual valueshave been taken into account.

76

ANNEX 3Page 7

IV. ECONOMIC BENEFITS AND COSTS (Dholbaha) 1/

"Without-Project" Benefits

19. Without the project, flooding and erosion would continue on agricul-tural lands below the hills. Year after year the quantity of sand depositedduring floods would increase. Slowly soil fertility and, with it the areaunder cultivation, would decrease. Thus, "without the project" productionfrom such flood-prone land is likely to decrease. However, for purposes ofthe economic evaluation, it has been assumed that on flood-prone land, the"without project" situation would remain unchanged. Flood-free areas southof the road would be unaffected by the project and have thus been omittedfrom the calculation of benefits.

Project Benefits

20. Table 4 gives the per hectare benefit for each of the "with" and"twithout" project situations. These per hectare benefit figures are multi-plied by the appropriate present or projected land use to give the net economicbenefit at full development. Details are in Table 5.

Project Costs

21. Non-traded goods and services have been adjusted by the SCF, CCF orshadow wage, as appropriate (paras 6-9). Project costs with physical con-tingencies include:

-- dam and irrigation system;

-- diversion and canalization works;

soil conservation works (which include all benchterracing and land levelling north of the road).

20% of cost of Program Planning and CoordinationUnit; and

-- maintenance costs over the life of the project.

In addition, the following costs have been included to cover expendituressouth of the road that would be financed through institutiona'L credit andhave not been included in project costs:

-- land levelling of 500 ha of cultivable waste and1,100 ha of the present 1,900 ha rainfed land;

-- tubewells to irrigate 1,300 ha.

1/ Below the hills. Upper catchment areas are in Section VI.

77

ANNEX 3Page 8

Economic Rate of Return in Dholbaha (ERR)

22. The economic rate of return so calculated is 16%.

Sensitivity Analysis

23. To test the sensitivity of the ERR to a change in assumptions, a

second model (Model II) has been run. In this, it has been assumed that bene-fits north of the road would be as before. As mentioned, this is already a

very conservative assumption, since no private investment in tubewells isassumed. South of the road, however, it is assumed that the only benefitwould be from the 500 ha cultivable waste which would be converted to rain-fed land. Thus the 1,900 rainfed land south of the road is assumed to beunaffected by the project. Based on these assumptions, the future land usewould be (details are in Table 5):

Model II: Future Land Use in Dholbaha (ha)(Includes presently flood-free land)

CultivatedIrrigated Irrigated Cultivable Total(Tubewell) (Dam) Rainfed Total Waste Area

North of Road 170 3,000 1,600 4,770 - 4,770South of Road 4,700 - 2,400 7,100 - 7,100

4,870 3,000 4,000 11,870 11,870

24. The rate of return so calculated is 13%, showing that even withthe most conservative benefit assumptions the rate of return is acceptable.Further decreases in benefits and increases in costs generate the followingERR:

Economic Rate of Return in Dholbaha

Benefits Costs Model I Model II

- - 16 13

-10 +10 14 11-20 +20 11 7

78ANNEX 3Page 9

V. BENEFITS FROM FLOOD PROTECTION (Watersheds other than Dholbaha)

General

25. The project also provides funds to develop presently flood-proneareas in four watersheds other than Dholbaha. This would be achieved byprotecting the areas from floods and utilizing available surface and ground-water resources. Detailed plans for works in these watersheds would be drawnup during project implementation. To determine the amount of funding to beincluded in the Loan, three factors have been taken into account:

-- the rate at which detailed feasibility plans (acceptableto the Bank) could be drawn up;

-- GOP's implementation capacity, given that the first imple-mentation plans would only be ready at the end of year 1 andthat all works should be completed by the end of year 5;

-- the likely per hectare benefit that would be derived fromprotecting agricultural lands from flood.

Objective

26. The following section estimates the expected average per hectarebenefit from protecting agricultural land from flooding. This figure is thenused to calculate project costs in other watersheds. The objective is todetermine the discounted present value (PV) of benefits that would arisefrom protecting one of these watersheds from floods. The PV of benefitsindicates the per hectare costs that can be incurred to generate such astream of benefits. However, the per hectare cost figure so calculated isnot intended as a limit to the size of the per hectare investment.

Additional Assumptions

27. Discounting Factor: Benefits and costs have been discounted at12%, as this rate approximately represents the opportunity cost of capitalin India.

28. Construction Costs: Capital expenditures on flood protection worksare assumed to be phased as follows:

Percent of Construction CostYear in Each Year

1 152 453 40

79

ANNEX 3Page 10

The discounted (present) value of construction costs, in economic prices, is

given by:

Pn x C x CCF 069c

( l+i)nn=l

where C = total construction cost (including physical contingencies) atfinancial prices

CCF = construction conversion factorn = year

Pn = percent of construction in year n, andi = discount rate (12%)

It is assumed that physical contingencies are applied at 15%. The discounted

value of construction costs, in economic prices, is thus 0.80 C, where C is

total construction cost without contingencies.

Project Benefits

29. Data are not available on watersheds other than Dholbaha. To esti-

mate the likely benefits from protecting agricultural lands in other watersheds,

Dholbaha has been used as a model. Since most other watersheds may not have

sites that are suitable for storage dams, benefits have been estimated on the

assumption that no dam would be constructed in the Dholbaha watershed.

Thus, there would be no surface irrigation north of the road. As with Model I

and II, it has been assumed that there would be no groundwater development

north of the road (a conservative assumption). Thus, all land north of the

road would remain rainfed. South of the road, it has been assumed that the

present 500 ha cultivable waste and the 1,900 ha currently rainfed (but flood-

prone) would be converted to 2,400 ha of flood-free but unirrigated land.

Thus, the benefit assumption is more conservative than Model I but more

optimistic than Model II. Based on these assumptions, the future land use

(Model III) would be:

Model III: Future Land Use (ha)(Includes presently flood-free land)

Irrigated Cultivable Total(Tubewells) Rainfed Total Waste Area

North of Road 170 4,600 4,770 - 4,770

South of Road 4,700 2,400 7,100 _ 7,100

Total 4,870 7,000 11,870 _ 11,870

80

ANNEX 3Page 11

30. At full development, the incremental economic production value wouldbe Rs 12.8 M per year (Table 6). This would be achieved by investment inflood protection and land development works north of the road, which would allbe paid from budgetary funds. However, it also requires expenditure on landdevelopment south of the road and maintenance of flood protection structuresthroughout the project period. Using the same benefit build-up rates as before(para 17), deducting maintenance costs, and land development costs south ofthe road, and finally discounting the resulting net benefit stream at 12%,gives the present value of the stream of benefits. The PV so calculated isRs 50 M. Details are in Table 6.

Calculation of Investment Cost per Hectare

31. Based on the assumption that 7,170 ha of cultivable land are proneto flooding, 1/ the net present value of future benefits works out to beRs 7,000 (US$833) per hectare protected. Thus the amount that can be spent

to protect and develop land is Rs 7,000 = Rs 8,750 (USS1,040) per hectare.0.80 2/

This includes the cost of land levelling (estimated in the range US$230-400per hectare) and land acquisition required for levees. On Dholbaha, landacquisition worked out at about US$100 per hectare protected.

Project Costs

32. Based on the above calculation, the benefit from protecting onehectare of land (in Dholbaha) is US$1,000. However, this assumes only thatpresent flood prone land would be converted into flood-free rainfed land. Nobenefit has attributed to anticipated investment in private tubewells. Ifsuch benefits were included, the benefit from protecting one hectare of flood-prone land would considerably exceed US$1,000. The amount that can be spent perhectare of flood protection depends on present and future land use and wouldneed to be determined on a watershed by watershed basis. The US$1,000, calcu-lated above, is therefore only a guide to the cost that can be incurred togenerate a stream of benefits yielding a satisfactory rate of return.

VI. ECONOMIC ANALYSIS OF FORESTRY AND SOILCONSERVATION COMPONENTS IN UPPER CATCHMENTS

General

33. A mixture of Khair trees and Bhabhar grass (used for pulp) wouldbe planted in the upper catchments.

1/ North of the road, 4,770 ha.; south, 500 ha cultivable waste and 1,900ha presently rainfed land.

2/ para 28.

81

ANNEX 3Page 12

Assumptions

34. Assumptions used in the analysis are given in Section II of thisannex.

Costs

35. All establishment and maintenance costs to bring trees to maturityin year 25, have been included. Major establishment costs (in financialprices) are: 1/

Year 1 Rs/ha

-- Land clearance 200-- Contour trenching 520-- Seedlings 375-- Planting, fertilizing

and transport ofseedlings, etc. 195

-- Soil conservationworks 350

-- Other 4852,125

Year 2 540Year 3 330Year 4 110Year 5 110Year 6-25 (maintenance) 60

Benefits

36. Benefits would be in the form of increased production of: indi-genous fodder grass, bhabhar grass and khair trees. At full development,the following yields have been projected:

Per ha

Fodder grass 0.6 tonsBhabhar grass 1.2 t3 nsKhair trees 50.4 M 2/

However, these forest lands are currently grazed by cattle and used for supplyof timber for construction and fuelwood. Once closed to grazing these benefits,

1/ These have been converted to economic costs for the economic analysis.

2/ 360 trees (60% of number planted), yielding 0.14 M 3/tree in year 25.

82

ANNEX 3Page 13

though small since lands are overgrazed and production is low, would belost. Present annual production (benefits foregone) is estimated asfollows: 1/

Yield/ha Price/unit Total (Rs)

Fodder Grass 1.6 tons Rs 20/ton 32Fuelwood 0.5 toys Rs 170/t3n 85Timber .12 m Rs 155/m 19Other 20

156

Rate of Return

37. The economic rate of return, after deducting benefits foregone, isas follows:

CostsBenefits C1 C2 ERR

-- - 13- +10% - 12

-10% - - 12-20% - - 10

- - +25% 12-- +50% 11

Where Cl = Establishment and maintenance costs, andC2 = Benefits foregone

Because it is difficult to estimate benefits foregone with any degree ofaccuracy a sensitivity test has been performed with a 25% and a 50% increasein benefits foregone. On these assumptions, the rate of return would bereduced to 12% and 11% respectively, showing the return is rather insen-sitive to changes in the stream of benefits foregone.

VII. PROJECT RATE OF RETURN

38. The ERR has also been calculated for Dholbaha watershed as a whole,comprising the upper catchments (Section VI) and works to protect and developland below the upper catchments (Section IV). The rate of return so calcu-lated is 16%. To test the sensitivity of the ERR to a change in assumptions,model II has been run (para 23). The ERR fell to 13%, showing that evenwith conservative benefit assumptions the ERR is acceptable.

1/ Details are in Annex 5.

83ANNEX 3

INDIA Table I

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Economic & Financial Prices

PricesCrops (Rs/t) Financial Economic

Wheat 1,300 1,900Paddy 1,100 1,900Maize 1,200 1,300Sarghum 1,200 1,300Bajra 1,300 1,550Pulses 2,650 3,300

Gram 2,000 2,400Oilseed 3,300 3,850Sugarcane 150 200Potato 700 600

Other Output (Rs/t)

Fodder crops 1/ 70 (K), 80(R) 60 (K), 70 (R)Fodder grass 20 20Bhabbar grass 90 110Horticultural products 2/ 600 600Khair (tree) (Rs/m3) 780 1050

Inputs

Nitrogen (N) (Rs/t) 5,100 5,300Phosphorus (P) (Rs/t) 4,700 4,500Pottassium (K) (Rs/t) 1,900 1,900Animal Power (Rs/pair/day) 16 12.5Labor (Rs/man/day) 8 5

Conversion Factors

Standard Conversion Factor 0.8Construction Conversion Factor 0.75Skilled Labor 0.8Unskilled Labor 0.625Farm Labor 0.625

1/ K - Kharif R - Rabi

2/ Farmers sell fruit on the tree: price excludes harvesting cost.

84

ANNEX 3

INDIA Page 2

KANDI WATEESHED AND AREA DE1VEWIINT PRO7ECT (PUNIJAD)

Crop Inpue Eacirntt

---- GRAM (Rbi) ------- --- PADDY (Kdhorif) ---- OILSEED (Rabi) --------------- POTATO SUGARCANE HORTICULTUREWithout With Visout With With With

--- Without Pro-ect--- Project Project Ctt ---- Wth Protect----- Project Proct Project

UOirrlieted Irrigated Irigatd Irrigat#d itrriastad ioiritrd r t rigated Irriated lrloate.

Yield tone#/h 0.5 1.0 3.0 4.0 0.4 0.5 0.8 t6.0 80.0 15.0Gross Pioecial Value of Product 1000.0 2000.0 3300.0 4400.0 1320.0 1650.0 2640.0 11200.0 12000.0 9000.0Gross Ioosotic Volc of Product 1200.0 2400.0 5700.0 7600.0 1540.0 1925.0 3080.0 9600.0 16000.0 9000.0

MATERIAL IIIPDT

Labor

Total jo-daye) 40.0 55.0 130.0 150.0 25.0 35.0 35.0 755.0 302.0 10.0 2/Floonil 320.0 440.0 1040.0 1200.0 200. 0 200. 200.0 1240.0 2576.0 80.0Econoeil 200.0 275.0 650.0 750.0 125.0 175.0 L75.0 275.0 1610.0 50.0

Bullock Labor (B-days) 1 0 15.0 33.0 uO.0 10.0 10.0 10.0 35.0 140.0 0.0FPiaoiai1 (/a/ha) 176.0 240.0 360.0 640.0 160.0 160.0 160.0 360.0 2240.0 0.0Eonosic (R/ha) 137.5 187.5 437.5 5D0.0 125.0 125.0 125.0 437.5 1750.0 0.0

Seed kg/ha 40.0 40.0 25.0 25.0 10.0 10.0 10.0 106.0 16.0 0.0i niiclil ks/he 65.0 64.0 28.0 28.0 30.0 30.0 30.0 63.0 200.0 0.C

Econo-cr R./ha 60.0 60.0 38.0 38.0 35.0 35.0 35.0 79.0 150.0 0.0

Fertilizer

N kg/ho 0.0 20.0 70.0 10.0 0.0 30.0 50.0 46.0 72.0 63.0F.an.i l Ris/ha 0.0 102.0 357.0 570.0 0.0 153.0 255.0 234.6 367.2 306.0 3/Eronic as/h o.o 106.0 371.0 530.0 0.0 159.0 265.0 243,8 381.6 318.0 3/

P kg/hb 0.0 40.0 30.0 50.0 0.0 10.0 20.0 42.0 0.0 0.0Fioancial e/hs 0.0 188.0 141.0 235.0 0.0 47.0 94.0 197.4 0.0 0.0

E.cconic Ru/ha 0.0 180.0 135.0 225.0 0.0 45.0 90.0 1l9.0 0.0 0.0

K ku/h. 0.0 0.0 15.0 25.0 0.0 0.0 0.0 2b.0 0.0 0.0FPiosclsl RH/he 0.0 0.0 28.5 '7.5 0.0 0.0 0.0 53.2 0.0 0.0Econoffc Re/ho 0.0 0.0 28.5 47.5 0.0 0.0 0.0 53.2 0.0 0.0

Pesticide Herbicides 0.0 30.0 0.0 60.0 0.0 0.0 0.0 0.0 0.0 400.0

TOTAL PRODUCTION COST I/

FPisocl-l 561.0 1064.0 2154.5 2740.5 390.0 670.0 dl9.0 234d.2 5383.2 706.0E-ooelc 397.5 838.5 1660.0 2120.5 285.0 539.0 690.0 1777.5 3891.6 768.0

MET VALUE OF PRODIlCTION

Fill'ct', 429.0 936.0 1145.5 1659.5 930.0 900.0 lo 1.0 8651.h 6616.0 8214.0E_ooom.c 802.5 1561.5 4040.0 5429.5 1255.0 1386.0 2390.0 7022.5 12106.4 0232.0

I/ Al] labor i.lerdiog ftlly labor, fut1 costed. Dore cot include -ter charges. (.. A-o 3. Table 3).2/ Forge se11 frcit prior to harvesting. Hro-s-tLig c-oto, therefore, not hohe.3/ Not brckeo door bet-eec N:P.K.

ANNEX 3

Table 2

INDIA P.R. 1

KANDI WATIRSHED AND ANRA DEVE U PROJECT (PUEIAB)

Crop Iggot ReruiCar_

---------- MAIZE (kh-arif)------------------ ---------- NU5(xharif)-------- --------------- WHEAT (Rbt)a-----------------------------With

With;ot Proltrt With Protlect Without Prolct Prol''t WiNho- P-tu t With Prolect

North SoothUni _gte Irrig.ted Unirrigat.d Irrigated U-i-r ted Irrigated Irrigated Unirtigated Ufir-irgaed Irrigd jLrat IrriRted

Yield. to../h. 0.7 1.2 1.6 2.4 0.5 0.7 O.8 0.7 1.0 2.0 1.5 l.0

Gro-.. PFin-i.l Val1e of Ptoduct 840.0 1440.0 1920.0 2880.0 1325.0 1855.0 2120.0 910.0 1300.0 2600.0 1950.0 3900.0

Cr0... E-toig Valo. of Prodoct 910.0 1560.0 2080.0 3120.0 1650.0 2310.0 2640.0 1330.0 1900.0 3800.0 2850.0 5700.0

MATERIAL INPUT

Labor

Total (tn day.) 25.0 35.0 40.0 45.0 25.0 35.0 40.0 30.0 40.0 60.0 50.0 00.0

Financ.al 200.0 280.0 320.0 360.0 200.0 280.0 320.0 240.0 320.0 480.0 400.0 500.0

Et-oic 125.0 175.0 200.0 225.0 125.0 175.0 200.0 150.0 200.0 300.0 250.0 350.0

BIl1t1-k Lbor(B-dayo) 10.0 13.0 15.0 15.0 10.0 10.0 10.0 11.0 15.0 15.0 20.0 20.0

Fin.a.l. 1 160.0 208.0 240.0 240.0 160.0 160.0 160.0 176.0 240.0 240.0 320.0 320.0

E-onoai. 125.0 162.5 187.5 187.5 125.0 125.0 125.0 [37.0 187.5 187.5 250.0 250.0

S..d kg/h. 16.0 23.0 20.0 20.0 20.0 20.0 20.0 05.0 20.0 100.0 100.0 100.0

FinancIal Ra/h. 1.0 26.0 23.0 23.0 52.0 52.0 52.0 114.0 96.0 135.0 135.0 135.0

E-onogit ga/ha 2t.0 31.0 27.0 27.0 60.0 60.0 60.0 133.0 88.0 157.0 157.0 157.0

Fertili-er

N kg/ha 0.0 30.0 20.0 40.0 0.0 0.0 0.0 20.0 20.0 40.0 20.0 85.0

Fio..tial Rg/h. 0.0 153.0 102.0 204.0 0.0 0.0 0.0 102.0 102.0 204.0 102.0 433.5

Econor-it R./ha 0.0 159.0 106.0 212.0 0.0 0.0 0.0 10b.0 106.0 212.0 106.0 450.5

P kg/ha 0.0 10.0 5.0 15.0 0.0 0.0 0.0 0.0 5.0 20.0 5.0 25.3

Fi.a.cial Rg/h. 0.0 47.0 23.5 70.5 0.0 0.0 0.0 0.0 23.5 94.0 23.5 117.1

Econogi. Rg/ha 0.0 45.0 22.5 67.5 0.0 0.0 0.0 0.0 22.5 90.0 22.5 112.S

K kg/ha 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.0 20.0 5.0 .0.0

Fi..nc.a i Rg/ha 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 9.5 38.0 9.5 19.0

Econo-iC E./ha 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 9.5 38.0 9.5 35.0

Pe-ticida Rg/ha 10.0 15.0 20.0 25.0 0.0 0.0 0.0 0.0 0.0 20.0 0.0 30.0

rOTAL ROUCTION COST 1/

Fina.cial 480.0 2/ 729.0 728.5 922.5 412.0 492.0 532.0 632.0 798.0 1211.0 990.0 1615.0

tot-tlc 301.0 2/ 587.5 563.0 744.0 310.0 360.0 3b5.0 526.5 613.5 1004.5 795.0 1369.0

OET VALUE OF PRODUCTION

Fin..ca l 352.0 711.0 1191.5 1957.5 913.0 1363.0 1588.0 278.0 509.0 13d9.0 960.0 2205..

E.-oi.t 529.0 972.5 1517.0 2376.0 1340.0 1950.0 2255.0 803.5 1286.5 2795.5 2055.0 4331.0

l/ All labor, forioding tni b- lohor, Eolly cotted -d. nro t o-lod .oaterohargno Iaee hoCA- 3. Table 3).

2/ I-cluding Earf. y-rd -macre -t Rt 100/ha.

86

ANNEX 3Table 3

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Financial Farm Budget for 2 ha Farm

Without Project With ProjectNorth North South

North Irrigated Leveled LeveledNorth South South Leveled Rabi and and

Unirrigated Unirrigated Irrigated Unirrigated Only Irrigated Irrigated -

CROPPING PATTERN (ha)

KHARIF

Maize 352 352 711 1191 1191 1957 1957Pulses 913 913 1363 1363 1588 - -Paddy - - 1145 - - 1659 1659Fodder 500 500 800 800 800 1000 1000

RABI

Wheat 278 509 1389 960 2285 2285 2285Oilseeds - 930 1200 980 - - 1821

Gram 439 439 936 - - - -

Potato - - - - - - 8851Fodder 500 500 1000 1000 1500 1500 1500

BI-SEASONAL

Sugarcane - - - - - - 6617Hsrticultural Producta - - - - S214 8214 -

TOT" cuor,rD AlE" 2.75 1/ 3.00 2/ 3.00 3.25 3.50 3.75 3.75

NET FX4HZCIAL VALUE OFPRODUCTION (Rs) 1,734 1/ 2,246 2/ 4,845 4,718 8,266 13,064 12,829

MAN DAYS REOUIRED(family labor) 3/ 81 95 180 172 164 220 375

OTHER COSTS

Irrigation 4/ 0 0 415 0 220 390 600Other Costs 133 130 860 160 260 1,260 1,360

NET FINANCIAL VALUE OF PRODUCTION 1,601 1/ 2,116 2/ 3,570 4,558 7,786 8,414 10,869

1/ Presently some 36, of the area north of the road comprises cultivable waste; thus, a typical 2 ha farm wouldcomprise 1.28 ha cultivated land, and 0.72 ha cultivable waste. The cropping pattern given here is for a 2 hafarm, all of which is fully cultivated. Data is presented in this form to distinguish between value of 1 hacropped and I ha waste (zero value). To convert to the typical 2-ha farm (with 0.72 ha cultivable waste), datapresented should be multiplied by 0.64, giving a total cropped area of 1.76 ha (0.8 ha in kharif, 0.96 ha inrabi) and a cropping intensity of 887.. The net value of production on such a farm works out to be Rs. 1,024.

2/ Presently some 500 ha south of the road are cultivable waste. Assuming such waste is part of the rainfed farms,then a typical 2 ha rainfed farm would comprise 1.6 ha cultivated land and 0.4 ha cultivable waste. To convertto a typical farm data presented should be multiplied by 0.80 giving a net value of production of Rs. 1,693.

3/ Each farm family can provide approximately 500 man-days of labor each year,hence all labor requirements can bemet from family labor and are thus costed at zero. See Annex 3, Table 2.

4/ Includes capital and interest repayments on tubewells.

87

ANNEX 3Table 4

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Economic Farm Budget for 2.0 ha Farm

Without Project With Pro ectNorth North South

1/ 2/ Leveled Irrigated Leveled LeveledNarth- South- and Rabi and and

Unirrigated Unirrigated Irrigated Unirrigated Only Irrigated Irrigated 1/

CROPPING PATT ERN (ha)

KHARIF

Maize 0.75 0.75 0.40 1.00 1.00 0.75 0.40Pulses 0.10 0.10 0.10 0.10 0.10 - _Paddy - - 0.40 - - 0.35 0.60Fodder 0.40 0.40 0.35 0.40 0.40 0.40 0.35

RA.BI

Wheat 0.85 1.10 1.25 1.25 1.25 1.50 1.00Oilseeds - 0.15 0.1. 0.25 - - 0.10Gram 0.50 0.30 0.15 - _Potato _ - - - - - 0.225Fodder 0.15 0.20 0.25 0.25 0.25 0.25 0.25

BI-SEASONAL

Sugarcane - - - - 0.40Horticultur.l Products - - - _ 0.25 0.25

TOTAL CROPPD AREA 2.75 3.00 3.00 3.25 3.50 3.75 3.75

NET ECONOMIC VALTE OF PRODUJCTION( )1,563 1/ 2,749-/ 6,505 4,500 3,834 13,102 16,301

OTHER COSTS 3/ (Rs)

Irrigation 4/ 0 0 415 0 220 390 600Other Costs - 133 130 360 160 260 260 360

NET (ECONOMIC) VALUE OF PRODUCTITO 1,355 1/ 2,544- 5,730 4,740 9,354 12,360 15,431

11 See Footnote 1, Annex 3, Table 3;2! s Footnote 2, Annex 3, Tahle R-3/ Costs of crop inputs are itemized in Annex 3, Table 2.4/ Capital costs of tubewells included in economic analysis in year the cost is incurred.

88

ANNEX 3Table 5

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Models I & II: Project Economic Benefits at Full Development (Dholbaha)(Change in Land LUse - Flood-Prone Land Only -- and Value of Production)

IncrementalIrrigated Irrigated Cultivable Production(Tubewell) (Dam) Unirrigated Waste Total Value

MODEL I-/

North of Road

Without Project

Land Use (ha) 160 - 2,885 1,725 4,770Value per ha 2/ (Rs.) 2,865 _ 678 - _

Total (Rs. '000) 458 - 1,954 - 2,382

With Project

Land Use (ha) 170 3,000 1,600 - 4,770 _Value per ha 2/ (Rs.) 6,180 4,677 2,370 - - -

Total (Rs. '000) 1,050 14,031 3,792 - 19,053 16,671

South of Road

Without Project

Land Use (ha) - - 1,900 500 2,400 -Value per ha 2/ (Rs) - 1,272 - -Total (Rs. 'OUO) - - 2,417 - 2,417 _

With Project

Land Use 3/ (ha) 1,300 _ 1,100 - 2,400 _Value per ha 2/ (Rs) 7,716 - 2,370 - - -Total (Rs. '000) 10,030 - 2,607 - 9,127 10,220

MODEL 1 26,891

MODEL II 4/

North of Road

As Model I 14,465

South of Road

Without Project

Land Use (ha) - - - 500 500 -Value per ha (Rs.) - - - - -Total (Rs. '000) - - - - - -

With Project

Land Use (ha) - - 500 - 500 -Value per ha (Rs.) - - 2,370 - - -Total (Rs. '000) - - 1,185 - 1,135 1,135

MODEL II 17,806

1/ Assumes an increase in tubewell irrigation;2/ From Annex 3, Table 4;3/ Assumes that benefit is derived from existing cultivable waste, converted to rainfed land; and 1900 ha flood

prone land, converted to flood-free land, of which 70% is irrigated;4/ As Model I north of road; south assumes that only benefit is from 500 ha of cultivable waste which can be

brought into rainfed production.

ANNEX 3Table 6

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Model III: Economic Benefits from Flood Protection Only (Dholbaha)(Change in Land Use and Value of Protection)

IncrementalCultivable Production

Irrigated Unirrigated Waste Total Value(Tbewells)i

NORTH OF ROAD

Without ProjectLand Use (ha) 160 2,885 1,725 4,770Value per ha (Rs) 2,865 678 -

Total ('000 Rs) 458 1,956 - 2,414

With Flood ProtectionLand Use (ha) 170 4,600 - 4,770Value per ha (Rs) 6,180 2,370 -

Total ('000 Rs) 1.050 10,902 - 11,952 9,538

SOUTH OF ROAD

Without Project

Land Use (ha) 1,900 500 2,400Value per ha (Rs) 1,272 -

Total ('000 Rs) 2,417 - 2,417

With Flood ProtectionLand Use (ha) 2,400 2,400Value per ha (Rs) 2,370 -

Total ('000 Rs) 5,688 - 5,688 3,27112,809 1/

1/ Based on the assumptions given in Section IV of this annex, the value of productionin Dholbaha (after protecting the land from flooding) would be expected to increaseby Rs 12.81 million per year at full development. Incremental benefits would startin year 4 and are assumed to reach full development in year 11 (build-up rates arein Section II of this annex).

The following costs have been deducted before calculating the NPV of the stream ofbenefits:

- cost of levelling (a) 500 ha of presently cultivable waste landsouth of the road and (b) 1000 ha of the present 1900 rainfed landsouth of the road; and

- maintenance cost of structures, which is estimated at Rs 615,000 per year.

On this basis the PV of benefits derived from protecting this land from flood isRs 50 M or Rs 70 0 0/ha flooded.

90

ANNEX 4Page I

INDIA

KANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Selected Documents and Data Available in the Project File

A. Documents Relating to Project Preparation

1. Summary Preparation Report2. Report of Forest Department3. Report of Fisheries Department4. Report of Irrigation Department: Dholbaha Dam and Irrigation System

(i) Dholbaha Dam - General Description and Salient Features(ii) Dholbaha Dam - General Report, Designs, and Cost Estimates

(Volume I)(iii) Dholbaha Dam - Drawings (Volume II)(iv) Dholbaha Irrigation System

5. Report of Irrigation Department: Preliminary Details of StorageDam Units on Other Watersheds

6. Report of Drainage Department: Project Estimate for Canalizationof Dholbaha Choe

7. Report of Drainage Department: Project Estimate for Canalizationof Dholbaha, Janauri, Chohal, Maili, and Patiala-ki-Rao Choes

8. Report of Drainage Department: Cost Estimate for CanalizingDholbaha Choe

9. Report of Drainage Department: Estimate for Reclamation of Landalong River Sutlej (not included in Project)

10. Report of Department of Soil Conservation and Engineering11. Report of the Directorate of Water Resources: Research (Ground-

water Investigation, Recharge Studies and Trials) and Training12. Report of Animal Husbandry Department13. Reports, Studies, and Trials Relating to Agricultural Research

within Punjab14. Additional Maps of Project Area15. Photographs of the Shiwalik Hills Showing Status of Erosion

B. Documents Relating to General Agricultural Situation

1. The Third Decennial World Agricultural Census (1970-71):Report for Punjab State

2. Agricultural Statistics (Punjab)3. Hoshiarpur District Census (1971)4. Ropar District Census (1971)5. Spacial Pattern of Levels and Growth of Agricultural Output

in India, Center for the Study of Regional Development, 1978

91ANNEX 4Page 2

6. Growth of Punjab Agriculture: Problems and Prospects, Departmentof Economics and Sociology, Punjab Agricultural University

C. Legal and Tax

1. Income Tax Act, 19612. The Land Improvement Schemes Act, 19633. Schedule of Water Rates4. Impact of Indirect Tax on Punjab Agriculture (1975-76),

Punjab Agricultural University

D. Other Documents and Studies

1. Erosion in the Punjab: Its Causes and Cure, Sir Harold Glover,1944

2. A Note Regarding Choe Problem in Hoshiarpur District

E. Supplementary Implementation Volume (See Table of Contents)

The .ollowing Tables and Charts are referred to in the SupplementaryImplementation Volume and are contained in the Project File.

1. Forestry: Additional Diagrams2. Irrigation: Additional Tables (Volume I)

Additional Figures (Volume II)3. Drainage: Additional Diagrams

92INDIA CKART 1

KANDI WATERSHED AMS AURA DEVKLQPISNT PROJECT (PUNJSAB)

Physical & Iccnoelo factors That Head T.oHe RsAai-ns in w.tcreICe PLanning

PHSsICAL WRinS O O

(Reweetetiao, channel La-Prove-manas, dma, .-cals.

.0 0 well.~~~~~~~211, roads, buldLose. see.)

FACTORS INWIPVED Ma

ull1 lardA 0Valle landa SCr.m flosw 0 DMn & Reaw. Site."Grosmdwtatr00

INTERESTED GROUPSectio 4 Laidwners 0 0 c! alrr. syutmn 0 00 0 0 FloodedArea ' 0 a ReseOrvoir area 0 0

For. scry lepe. 0 0 0

Soil Conservation Dept. o ' c a c c 0

,rIrlaclon Dept. 0 0 0 0 0

P-ajabDsvwopammt Comeu. 0 0 0 0

SmCentral Utatr C.issmion 00 0 a 0 0 ___

SP CICPURPOSESOs,matic & stock vatox 10 0Used & fiber pcodoctioe0

Vh-nfood 0 cx allamas hoLnalg

Protect property 0 0 0

faclitate traneport 00

Conserve snergy 0

1.=cr euelo=eear 0 Z .0 0 0 0

ALTZRNA= TYPE oP vow

Three. 0

MAsonry0 0 0

ALEIATIMETHODS O? COISTETIOHHand lOVabor 0 0 0

Maom powered equipmenatuAnmlPower 0

Local made mactiaes 0 a 0 0 :Fri'sre maed mctine, 0 0

2 0 0 30

ALTSaATZZ SIZE 0ft CAPACTIT

2 o

LZZZ* OF

240"

~A1 & I I(2)2 0 0 0 ( 3 .____ 0 0. 0

OPERATION &MICIJIEfs

2 0 0 t C 0

3 0 0 0 0 0 AVERAGE ANNUAL WflTS (2)

AVERACE ANNUAL BESIFITS (3)

3 _____ c t c a a0 HtETCOTRATIO (3)

1 0 C0 0 0 0 o 0

2 0 0 0 0 00 0 0 0 0

RETVRN ON I.'JVSTh (3)

3 000 ½ o X xTOTAL PROJECT(1) Ix dstrndg loetcoet for each eizs emay different dedins and construction methdod roat be considered And

s,etiomtd.(2) Size andC ro:tof dam -ill vary with capacity of flood control oulcs pil:veyo and methodo of operating

for multiple urpoooo.(3) Whoraes copital oet and annul coot may be computed for each phystoal work and 0lsz-ootcure be cn-

s=trutd, the. to -olo th. besmt toctal Urojoc: various cocinctlons of aliferent sizes of physical works.ill hove to be ..lscred for trials to see hich will gi-s the best conbtoed benefits in relation to costs.ovalla.bllity of fnnl tine for conatruction and dewel.oo'en, otilcoaties or oxcrvation of scarce natural

reore,deoire or local people, sod ability of g-vco,nn r--on c...o an.d nary othsr conaiderotione.Thoe 'bmiction. hove b..n deissiontd -s "A through X", -co the b.rr f:scC - chooesn ia a jodw.nt

deojojW. of thCs planing -Xagr.

INDIAKANDI WATERSHED AND AREA DEVELOPMENT PROJECT (PUNJAB)

Organization Chart

Chief Miit, - ----------------- -Rev,evvCommittee

ScetarY Se tal | Financial Commissioner,| Punjab Project

Seiretusbandry rtry Development and - - - - - - Agricultural - Implementation

and Fisheries lon Secretar to GOP Univesity Committee

~~~~~~~~~~~~~~~cons I_omto Moni__ __ ~e toEalaiong |Commissie USoioei

Prr,ject Coordinator

Animal Husbandry Fisheries Department Irrigation Department Forest Department Soil Conservation & Agriculture epartment

Department Director & Warden Irrigation) (DrainaseC Chief Conservator of Engineering Departmen (Inctuding Horticulture)

Director of A. H. of Fisheries Chief Engineer (Projects) Chief Engineer (Drainage) Soils

Consemato ~~Conservator Jt. Director J.Drco

Joint Div. of A.H. Deputy Director Directorate o - of Soils Hortic lture Agriculture

of Water

Resources

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Offi cer ~~(Irrigation) (Drainage) I (IVOfficer Officer Officer ee

tJ One for each Project DMstrict (initially Hoshiapur and Ropar), under the Chairmanship of the Deputy Commissioner.

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