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Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 7856

PROJECT COMPLETION REPORT

WESTERN SAMOA

AGRICULTURAL DEVELOPMENT I PROJECT(CREDIT 951-WSO)

JUNE 27, 1989

Asia Regional Office

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CURRENCY EOUIVALENT

Name of Currency: Tala (WST)

Rate f Exchange:

Appraisal year US$ 1.00 - WST 0.68Weighted average during implementation US$ 1.00 - WST 1.33Present US$ 1.00 - WST 2.03

FISCAL YEAR OF BORROWER

COWS and WSTEC : January 1 - December 31

WEIGHTS AND MEASURES

1-pound (lb) - 0.45 kg1 acre (ac) - 0.41 ha1 mile (mi) = 1.61 km

ABBREVIATIONS

ADB - Asian Development BankAIDAB - Australian International Development Assistance BureauDAFF - Department of Agriculture, Forestry and FisheriesEEC - European Economic CommunityGOWS - Government of Western SamoaPCR - Project Completion ReportSAR - Staff Appraisal ReportUNDP - United Nations Development ProgrammeWSTEC - Western Samoa Trust Estates Corporation

Tf* WORLD BANK FOR OFFICIAL USE ONLYTHE WORLtD BANK

Washington. DC. 20433U.S.A.

MCe co Dvectitw.nIalOpetatw tvakutwin

June 27, 1989

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Reports Western Samoa - AgriculturalDeveloiment I Proiect (Credit 951-WSO)

Attached, for information, is a copy of a report entitled'Project Completion Report: Western Samoa - Agricultural Development IProject (Credit 951-WSO)" prepared by the Asia Regional Office. Fullevaluation of this project by the Operations Evaluation Department hasnot been rade.

Attachment I 7

Tnis 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 fBank authorization.

AL

WESTERN SAMOA

AGRICULTURAL DEVELOPMENT I PROJECT (CR. 951-WSO)


Table of Contents

Page No.

Preface ......................................... i

Basic Data Sheet ...................................... ii

Evaluation Summary .................................... v

I. PROJECT FORMULATIONPolicy Framework ............................. 1Project Preparation .......................... 2Project Objectives ........................... 2

II. IMPLEMENTATION EXPERIENCEComponents ................................... 2Costs and Financing .......................... 5Organization and Management .................. 6Bank Performance ............................. 6Borrower Performance .......................... 8Project Relationships ........................ 8Legal Agreements and Covenants ............... 8

III. PROJECT RESULTSAgricultural .................................8WSTEC Financial Performance ..................9Economic Rate of Return ......................9Environmental Impact ......................... 9Role of Women ................................9Project Beneficiaries ........................ 10Project Sustainability

and Follow-up Projects ............... 10

IV. CONCLUSIONS AND LESSONS LEARNEDConclusions ....................... 10Lessons Learned ............ ................. 10

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

Table of Contents (contd.)

ANNEXES

Table 1 : Disbursement ScheduleTable 2 : Annual Planting ProgramTable 3 : Project CostsTable 4 : Project FinancingTable 5 : Use of Loan FundsTable 6 : Compliance with Lcan CovenantsTable 7 : Physical Indicators of Project AccomplishmentTable 8 : Yield, Area and Production Estimates

ATTACHI4ENT I: Comments from the Asian Development Bank

MAP: IBRD No. 13742R

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WESTERN SAMOA


PREFACE

This is a Project Completion Report (PCR) for the AgriculturalDevelopment I Project in Western Samoa, for which Credit 951-WSO in theamount of US$8.0 million was signed on November 27, 1979. The originalCredit Closing Date was June 30, 1986; after two one-year extensions, thefinal revised Closing Date was June 30, 1988. The accounts were closed onMarch 3, 1989, and an undisbursed balance of about US$1.5 millioncancelled.

This PCR was prepared by staff of the Asia Region, following aproject completion mission in July 1988. This PCR was read by theOperations Evaluation Depattment (OED). The draft PCR was sent to theBorrower and its agencies, as well as to the major cofinanciers, forcomments in February 1989. Comments received from the Asian DevelopmentBank (which financed a parallel project on the island of Upolu) arereproduced as Attachment I.

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WESTERN SAKOA

AGRICULTURAL DEVEL3PHENT I PROJECT (CR. 951-WSO)

PROJECT COHPLETION REPORT

Basic Data Sheet

KEY PR0IECT DATAActual or Actual as %

Appraisal current of appraisalxoectation estimate estimate

Project costs (US$ million) 20.5 19.5 A/ 95Loan/Credit amount (US$ million) 8.0 6.5 &! 81Date Board approval 9/18/79Date effectiveness 3/3/80Date physical components completed 12/3/85 hIProportion completed - WSTEC tree (ha)

plantings 1,930 780 a/ 41- roads (km) 93.5 93.5 100

Closing Date 6/30/86 6/30/88Economic rate of return (%) 13.5 0Institutional performance Adequate PoorAgronomic performance Adequate PoorNumber of direct beneficiary families 2300 240 £/ 10

CUMULATIVE DISBURSEMENTSFY80 FY81F FY83 FY84 F FY86 FY87 FY88 FY89

Appraisal estimate(US$ million) 0 4 1.6 3.2 4.8 6.2 7.4 8.0 3.0 8.0 8.0

Actual (US$ million) 1.0 2.5 3.5 4.2 4.7 5.0 5.4 5.9 6.5 6.5g/Actual as % of estimate 250 156 109 88 76 68 68 74 81 83Date of final disbursement 2/17/88Amount Cancelled US$1.5 million (approx.)Principal repaid to date ncneMISSION DATA

Date No. of Man-days SpecializationsMission LmoLr). Rersons in field represented le

Preparation 5/78 NA NAAppraisal 10/78 6i N&A e,f,f,f,f,f

Subtotal 6 NA

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MISSION DATA (contdlStaff Special- Perfor- Type of

Date No, of days in izations mance Trend ProblemsMission (mo/vr) persons fiel regresented/e ratinjgf /g/k Lh/k

Supervision 1 02/80 2 ii ff, 1 Li LiSupervision 2 10/80 1 Li f 2 Li LiSupervision 3 04/81 2 18 f,f 2 3 M,F,TSupervision 4 12/81 2 10 b,b 2 3 M,F,TSupervision 5 06/82 2 28 a,c 3 1 M,F,TSupervision 6 02/83 2 10 a,b 3 2 M,F,TSupervision 7 11/83 1 7 d 2 1 Ri,F,TSupervision 8 06/84 2 12 d,b 2 1 F,M,TSupervision 9 11/84 1 6 d 2 1 F,M,TSupervision 10 05/85 1 9 d 2 1 F,M,PSupervision 11 12/85 1 8 b 3 3 F,M,TSupervision 12 06/86 2 12 b,e 3 1 F,M,TSupervision 13 12/86 2 22 b,e 3 2 F,MSupervision 14 06/87 2 .0 b,e 3 1 F,MSupervision 15 12/87 2 8 e,c 3 2 FSupervision 16 05/88 2 10 e,c 3 2 F

Subtotal 27 170

PCR 07/88 -1 6 b - - -

Total i4/1 L6Z/1

OTHER PROJECT DATA

Borrower Government e? Western SamoaExecuting agency Western Samoa Trust Estates Corporation (WSTEC)Fiscal year of borrower January 1 - December 31

Currency Exchange Rate:Name of currency (abbreviation) Western Samoa Tala (WST)Appraisal year average (1978) US$1.00 - WST 0.68Intervening years average (1979-87) US$1.00 - WST 1.33Completion year average (1988) US$1.00 - WST 2.03

Follow-on proiect:

Name Agricultural Development IILoan/credit number Cr. 1080-WSOLoan/credit amount (US$ million) 2.0Date Board approval 12/18/80

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STAFF INPUT (Staff Wtks)

FY 77-78 79 se 1 02 63 34 8C se 67 se TOTAL

Pr.-Appralsel 38.1 12.6 1.6 - - - - - - - - 44.4#ppraosll - 4".1 - - - - - - - - - 40.1Negotiation - 2.7 S.@ - - - - - - - - 3.5Supervision - - 12.2 14.5 10.4 15.9 12.6 6.5 14.2 11.2 10.9 112.3Other - 0.7 - 0.1 - - - - - - - 0.3

Total 3S.1 60.1 19.6 14.6 18.4 16.9 12.6 6.5 10.2 11.2 10.9 2W.1

la Approximately US$1.5 million cancelled.lb Components not yet completed./c Smallholder component of project not carried out. Actual

beneficiary families shown represent incremental WSTEC laborrequirements due to project (240 actual as opposed to 600estimated at appraisal).

le a - agriculturist; b - agricultural economist;c = financial analyst; d - agricultural engineer;e - tree crops specialist; f - unknown

if 1 - problem-free or minor problems; 2 - moderate problems; and3 = major problems.

Jg 1 - improving; 2 - stationary; 3 - deteriorating./h1 F- financial; M - managerial; T - technical; P = political; and

0 - other.IL Form 590 not available following this mission.I.J Not available/k Not indicated on form 590s after 5/85; numerical ratings given

here for supervisions after 5/85 based on evaluation ofsupervision report.

LI Totals exclude missions for which data on number of persons andman-days not available.


WESTERN SAMOA


EVALUATION SUMMARY

Introduction

1. This project was based on a project preparation report in s'-pportof the Western Samoa Trust Estates Corporation (WSTEC), the country'slargest enterprise, which the Government submitted to the Asian DevelopmentBank (ADB) in 1977. ADB selected the operations proposed fcr the island ofUpolu. The components proposed for the other main island, Savaii, becamethe core of the project under review, which was appraised in October 1978and presented to the Board in September 1979. Although the Closing Datewas extended twice, from June 30, 1986 to June 30, 1988, the Credit fundscould not be fully disbursed and at accounts closing on March 3, 1989, anundisbursed amount of about US$1.5 million was cancelled.

Proiect Obiectives and Content

2. The objectives of the project were four-fold:

(i) to increase production and exports of copra, cocoa and coffee onfour new WSTEC estates on Savaii;

(ii) to enhance WSTEC's technical capabilities;

(iii) to transfer improved technologies to the farmers; and

(iv) to expand taro exports.

Secondary objectives were land conservation, employment generationand institution building at WSTEC and the Department of Agriculture,Forestry and Fisheries (PCR, paras. 7-8).

The project contained the following components:

(i) the establishment of coconut and cocoalcoffee nurseries and theintroduction of improved planting materials and agriculturalpractices;

(ii) field plantings of a total area of 4,730 acres (ca. 1,900 ha),with about half the area under coconuts, 45Z under cocoa and 5Zunder coffee; these plantings were to be carried out at fourdifferent estates;

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(iii) village land development comprising 500 acr"s (ca. 200 ha) andincludii, a taro marketing component;

(iv) construction of access roads to the four estates and upgrading ofthe major road on Savaii, the 93 km long South Coast road; and

(v) technical assistance, training and studies related to the project(PCR, paras. 9-21).

Total project cost was estimated at US$20.5 million, with thefollowing financing arra-igements: IDA was to cover about 39X of projectcost through a credit of US$8 million equivalent, the Government ofAustralia 26Z, the Government of Western Samoa 10%, WSTEC and UNDP 8S each,the Government of Japan 71 and the EEC 21 (SAR, para. 3.18 and PCR, Table4).

Implementation Experience

3. With the exception of the South Coast road, not a single projectcomponent was carried out as foreseen at appraisal: no seed gardens wereestablished, there was a resistance against the introduction of new plant-ing materials and agricultural practices, and only 411 of planting targetswere expected to be achieved by the end of 1988. The reasons for thislatter shortfall were many-fold: one estate proved unsuitable for treecrops, land disputes arose on another, salt spray from the nearby ocean andinsufficient shading lead to losses of cocoa plantings in two locations;these difficulties were compounded by a lack of planting materials (due inpart to the before-mentioned aversion to new varieties), lack of WSTECcounterpart funds (mitigated by the Bank's agreement to raise the disburse-ment percentage for field development from 42 to 90) and poor plantationmanaigement. However, towards the end of the project WSTEC's performance,both in regard to project plantings and general management, started toimprove (PCR, paras. 11-16).

The village development and taro marketing components were deletedfrom the project in view of the strain the other activities put on WSTEC'scapacities. The technical assistance and staff training activities wereultimately unsuccessful. Although the two crop specialists (the third oneon crop diversification was never recruited) performed good work, theimpact was limited because of the before-mentioned resistance to change.Of the thirteen WSTEC staff sent abroad for training only one is still withWSTEC, and few of the others have remained in plantation agriculture. AnM&E system called for at appraisal was never established, but a comprehen-sive UNDP-sponsored review of WSTEC's management and control system halfwaythrough the project led to the introduction of a management informationsystem for WSTEC (PCR, paras. 17, 18 and 20).

Aerial mapping of Savaii was carried out as anticipated but hasyet to lead to the expected impact on land use planning and villagedevelopment (PCR, para. 21).

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The road building component was the only activity which did notfollow the general pattern of failure and shortfalls. A longer implementa-tion time (five instead of four years) and a 32% nost overrun notwithstand-ing, the road turned out to be the only successful project component.Quality of construction and maintenance service are good, and apparentlythe road is having a stimulating effect on economic activities on the SouthCoast; the Government is now planning to complete the road loop aroundSavaii through an upgrading of the North Coast road (PCR, para. 19).

Despite the various reductions in project scope, total projectcost in US$ was only 5Z less than the appraisal estimate (US$19.5 millionvs. US$ 20.5 million) whereas in the national currency there was a substan-tial overrun (86%, or WST26 million vs. WST14 million), due to successivedevaluations of th Western Samoan Tala. Because of the implementationshortfalls in the agricultural components (which resulted in almost one-fifth of the IDA Credit being subject to cancellation), the early withdraw-al of the Japanese Government from the project and cost overruns on theroad construction component, the actual financing pattern differed consi-derably from ti.e appraisal estimates, with the GovernmentlWSTEC financing25% (instead of 18%), IDA 33% (39%) and the Australian Government 29Z(262), the other three donors covering 132 (17%) (PCR, paras. 22-23, Table4).

The shortcomings of WSTEC's management (which led to a protractedfinancial crisis of the corporation) have already been mentioned above.Because of its prominence in the national economy, WSTEC was also exposedto political pressure; frequent personnel changes in Government and bothWSTEC's Board and management complicated the situation further (PCR,para. 25).

The PCR leaves no doubt that IDA bears a good deal of the respons-ibility for the project's failure: ADB's reluctance to finance the entireproject as identified by the Government should have prompted a thorvughevaluation of WSTEC's capabilities, the more so as WSTEC had so far notoperated on the Island of Savaii. Similarly, Government's and WSTEC'sresponsiveness to agricultural innovations was not properly assessed, norwere the agro-climatic limitations and land ownership questions whichaffected three of the four estates. Similarly, the village developmentcomponent, which was never implemented, seems to have been added on by IDAreflecting the popularity of rural development initiatives in the Bank atthat time rather than the priorities of the Government. IDA's supervisionefforts appear to have been technically sound but ineffective (PCR,para. 25).

In 1982, a supervision report explicitly discussed the option ofan early Credit closure if implementation performance should not improve.Paradoxically, in the following years supervision intensity reached itslowest levels. More specifically, no tree crops specialist visited theproject (which despite its more general title was essentially an investmentin tree crops) until mid-1986 (PCR, paras. 26-28).

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Yields per acre are estimated at or close to appraisal levels(100% for copra, 84% for cocoa, and 91% for coffee). However, since thecorresponding crop areas are only 22%, 64% and 13% of appraisal targets,total production levels are only a fraction of what was aimed at. Withactual costs (in US$) in the neighborhood of appraisal estimates and imple-mentation delays of several years, this means that the economic rate ofreturn is near 0% (instead of the appraisal estimate of 13.5%) (PCR, para.35, Table 8).

Sustainability

4. At the time of the project completion mission, plantation manage-ment had markedly improved. However, the financial and management crisisof WSTEC eontinues, and so far there is no adeq.ate plan to train nationalfield managers to take over from the foreign staff. Thus, the continuityof even the modest achievements of this project remains in doubt (PCR,para. 39).

Findings and Lessons

5. The project experience provides several specific lessons:

(i) lending operations in very small countries carry a much greaterrisk for the borrowers because of the relative orders of magni-tude: the PCR points out that this project would have been equiva-lent to a US$20 billion operation in Indonesia, a country with acomparable GNP/capita. This should oblige the Bank to take thegreatest possible care in preparing a project;

(ii) if in addition, the country is relatively isolated and tradi-tional, technological innovations should be incorporated sparing-ly and only after the Bank is satisfied about their acceptance inthis environment;

(iii) once it decides to start a lending program in such a country, theBank should be careful not to overtax local managerial resources.This would call for a compact and uncomplicated project design,with reasonable post-completion demands on the country's adminis-trative, financial and technical resources; and

(iv) when embarking on a project with such severe diseconomics ofscale, the Bank should be fully prepared to devote a much largerthan average (in relative terms) supervision effort to it, and todo so not only during the project's start-up but throughout imple-mentation (PCR, paras. 41-43).

WESTERN SAMOA

AGRICULTURAL DEVELOPMENT I PROJECT (CREDIT 951-WSO)


I. PROJECT FORMULATION

1. Policy Framework. The Western Samoa Agricultural Development IProject was the second Bank Group operation in Western Samoa 1/ and thefirst in the agricultural sector. At the time of appraisal in 1979 theagricultural sector was considered the country's only viable developmentpossibility, accounting for more than half of GDP and employing two thirdsof the labor force. However, most agricultural production was in villagesfor subsistence and yie'ids were uniformly low. A constraint to introducingnew agronomic practices was the absence of their successful introduction onthe couintry's plantations, especially those of the Western Samoa TrustEstate Corporation (WSTEC). WSTEC, a Government owned plantation company,was and is Western Samoa's largest producer of major tree crops (coconut,cocoa and coffee), as well as the country's largest employer, foreignexchange earner and contributor to GDP.

2. Western Samoa consists of two main islands, Upolu, with thecapital of Apia, and the larger island of Savai'i. At the time of apprais-al another constraint to the country's development was the relative econo-mic isolation of Savai'i, caused in part by a poor infrastructure network.

3. Given the above context, the Government of Western Samoa's (GOWS)economic development strategy was to emphasize agriculture, and:

(a) Make maximum use of WSTEC, which was considered the only entitycapable of rapid agricultural development.

(b) Concentrate on traditional, well proven crops such as coconuts,cocoa and coffee.

(c) Emphasize the development of Savai'i.

(d) Establish the technical/financial basis for agricultural develop-ment in village areas.

(e) Coordinate effective domestic and foreign resources to support acomprehensive, long-term development effort.

4. As will be seen below, the Bank-assisted Agricultural DevelopmentI project, focusing on WSTEC and Savai'i, was designed to fit in well with

11 Following the First Highway Project (Cr. 535-WSO).

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all the points of the GOWS development strategy 2/ However, with the excep-tion of improving the infrastructure (road) network on Savaili, it general-ly failed to achieve any of them.

5. Prolect Preparation. Major project components were identified ina GOWS preparation report submitted to the Asian Development Bank (ADB) in1977. ADB subsequently approved a loan for WSTEC's Upolu operations whichbecame effective in 1978, but which excluded the Savai'i components thatlater became part of the Bank-assisted Agricultural Development I Project.ADB's concern at the time was that WSTEC would be stretched enough byrehabilitating and expanding its operations on Upolu; and a major expansionto Savai'i, where WSTEC had no estates, would overtax WSTEC's managerialand financial resources. In hindsight this concern proved valid.

6. In spite of ADB's reservations, the project did appear consistentwith the GOWS's development strategy, supported by the Bank, and a bankappraisal team visited Western Samoa in November 1978. Board approval camein September 1979 and the project became effective in March 1980. In addi-tion to the Bank, GOWS and WSTEC, financing was provided by the EuropeanEconomic Community (EEC); under a Special Action Credit Agreement admin-istered by the Bank, the United Nations Development Programme (UNDP) in theform of a Technical Assistance Project administered by the Bank, theAustralian International Development Assistance Bureau (AIDAB), and theGovernment of Japan.

7. Pro1ect Objectives. In line with the Bank-endorsed GOWS develop-ment strategy (para 3) the primary objectives of the project were:

(a) A rapid and substantial increase in the production and exports ofcopra, cocoa and coffee from new WSTEC estates in Savai'i.

(b) Improvement of the technical know-how and training of WSTEC staff.

(c) The transfer of the improved technology to village farmers.

(d) Expansion of taro exports.

8. Secondary objectives included land conservation, employmentgeneration and institution building at WSTEC and the Department ofAgriculture, Forestry and Fisheries (DAFF). As discussed later, none ofthe stated project objectives was satisfactorily achieved.

II. IMPLEMENTATION EXPERIENCE

Components

9. Nurseries and Improved Planting Material. A major project objec-tive was the introduction of new agronomic practices, including improvedplanting material. The project called for a coconut nursery and a

2/ The term 'Bank" is used throughout the report to refer to both the Bankand the Association.

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cocoalcoffee nursery to be established on the new WSTEC estates in Savai'i.They were never completed, partly because the project's Vaiaata site, .hichwas to have been the location for the coconut nursery, was found to beunsuitable for tree crops. It appears from project files that theGovernment of Japan, which was to have provided US$ 1.4 million for ferti-lizers, agro-chemicals, vehicles and equipment for these nurseries, with-drew from the project, after disbursing nearly US$ 900,000, when it becameapparent that the inputs supplied had been diverted for other purposes.

10. Although the project nurseries were not established, projecttechnical assistance did support the coconut seed garden at Olomanu andwork on cocoa and coffee planting material at the Nuu Research Station,both on Upolu. The work at Nuu was also supported by the Bank-assistedAgricultural Development II Project (Cr. 1080-WSO; see para 39), whichbecame effective in 1981 and financed DAFF research and extension activi-ties. However, despite the positive impact on the project of the work doneat Olomanu and Nuu, the failure to establish project nurseries at theremaining sites on Savai'i was evidence of a lack of commitment byGovernment and WSTEC's Board and management to the new agronomic practicesthe project was supposed to support. Throughout the early years of projectimplementation there was active resistance to the introduction of newplanting materials and new technologies in areas such as intercropping,spacing between trees and shade requirements. The stated reasons for theresistance was risk aversion to new agronomic practices in the absence oflong term experimental evidence under Western Staaoan conditions. Theeffect was to delay project implementation and greatly reduce the antici-pated benefits of the project. A related problem was the lack of effectivecooperation between DAFF and WSTEC on technical matters (para 31). Becausethe resistance to new ag;onomic practices was so widespread at differentlevels of Wastern Samoan society and officialdom, it appears that projectpreparation was deficient in anticipating that the project could be carriedout successfully as designed. Towards the end of the project the attitudeof WSTEC's previous Board, and especially WSTEC management., seemed to bechanging in favor of the new agronomic practices, and this provided partialjustification for the extensions of the Credit Closing Date. However, thelong term resolution of these issues, particularly since the Board andmanagement has recently changed, is still unknown.

11. Field PlantinRs. The SAR called for WSTEC to plant 4730 ac by end1984: 2400 ac of coconuts; 2130 ac of cocoa and 200 ac of coffee. By theend of 1984 only 814 ac (17Z of SAR targets) had actually been planted andthe end-1988 estimate is 1916 ac (41%).

12. One problem was the discovery that one of the 4 project sites,Vaiaata, for which 1530 ac had been planned, was unsuitable for tree crops.However, excluding Vaiaata from the SAR target leaves a target of 3200 ac,only 60% of which is expected to be planted by end 1988 (Table 2).

13. Other problvw'.a included a land dispute with a village near theLata estate which reduced the land available for Lata plantings. In addi-tion, areas of the Lata and Asau estates had to be replanted. This waspartly due to the need to replace dead cocoa areas with coconuts becausethe salty seaspray killed the cosoa planted near the coast. There was also

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insufficient shading of some cocoa areas due to technical disputes. Mostimportant, the extremely slow rate of planting and the high mortality ratewas due to: (a) insufficient planting material caused in large part byresistance by GOWS and some members of the WSTEC Board to new agronomicpractices (para 10); (b) a shortage of WSTEC counterpart funds; and (c)poor plantation management, exacerbated by occasional, unwarranted inter-ference from the WSTEC Board in day to day operations, and politicalpressures due to WSTEC's national importance.

14. Some progress in addressing these problems were made duringproject implementation. Vaiaata was appropriately abandoned rather thanthrowing good money after bad. The planting program at the other estateswas adjusted after experience with local agro-climatic condit'ons wasgained and there was a partial resolution of the land dispute at Lata. TheBank disbursement percentage for field development was increased from 42Sto 901 to alleviate the WSTEC counterpart funding problem and a SpecialAccount was stt up. UNDP financed technical assistance recruited a planta-tion manager, two assistant plantation managers and other WSTEC managementstaff. To avoid the politicization of WSTEC's activities, Governmentdecided that as a matter of policy, sitting Members of Parliament shouldnot serve on WSTEC's Board of Directors. Finally, GOWS and the Bank agreedto two one-year extensions of the Credit Closing Date, which was originallyscheduled to close June 30, 1986.

15. In response to these measures the annual planting rate more thandoubled from 136 ac during 1979-84 to 276 ac during 1985-88. While better,the improvement to 276 ac per year fell far short of the SAR estimate of916 ac per year. In the best year, 1986, only 541 ac were planted. Ofeven more positive significance than the increased planting rate has beenthe striking improvement in the quality of plantation maintenance, whichwas very poor as recently as end-1985 and .s now adequate.

16. The outlook for WS.EC and, possibly, for plantings under theproject, would appear difficult after non-adoption of the action plan toredress WSTEC's financial problems, and the resignation of the GeneralManager and Finance Controller. Virtually all key management personnelbelow General Manager have been externally recruited and financed and thereis not yet any realistic plan to phase them out and replace them withqualified local staff.

17. Village Land Development. In addition to WSTEC field development,another project component was to support 500 ac on village lands startingin project year 3. During implementation it was mutually agreed by GOWSand the Bank that the village component should not be carried out due tothe demands being made on WSTEC by its own operations. A taro marketingcomponent associated with the village development component was also nevercarried out.

18. Technical Assistance and Training. The project called forrecruitment of a coconut specialist and a cocoa/coffee specialist. Asdescribed above in the section on nurseries (para 10), while the quality oftheir work appears good, the long-term practical impact may still belimited, due to continuing resistance by some officials to new agronomic

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practices. A third specialist on crop diversification was never recruited,but this was not a problem within the Bank given the Bank's reluctance todiversify into other crops. Training abroad in estate management was to beprovided to 12 WSTEC field staff. In fact 13 staff were trained in PapuaNew Guinea, and 9 returned there for further training. However, only oneis still with WSTEC and reportedly few of the others are still in planta-tion agriculture.

19. Roads. Construction of access roads to the 4 original projectsites and sealing and realignment of the 93 km Savai'i South Coast road,the major road on Savai'i, were completed. This was the largest singleproject component acccunting for 56% of total project costs (SAR estimate:41x; see Table 3), and the only one which can be considered successful.Although road construction took 5 years instead of 4 and was 32X overbudget (US$ 11.0 million actual vs the SAR estimate of US$ 8.3 millionincluding contingencies) the South Coast road in particular is of goodquality and continues to be well maintained. The impact of the road on thequality of life of the Savai'i people is reported to be good. Economicdevelopment along the road is visible, and, although no formal economicevaluation has been done, GOWS believes that the economic benefits of theroad have been high and is planning a Savai'i North Coast road to completethe loop around the island. In sum, although the SAR paid relativelylittle attention to the road component, because of its success and itslarge share of total project costs, the project as a whole cannot beconsidered a total failure, despite the disappointing results of theagricultural components.

20. Program Support Component. The SAR called for a monitoring andevaluation system for the project to be designed by a consultant duringproject implementation. This was not done. However, midway through theproject consultants financed by UNDP did a comprehensive review of WSTEC'smanagement and control system, one result of which was the introduction ofa management information system for WSTEC as a whole, which has had somepositive impact.

21. Aerophotographic mapping of Savai'i was carried out as describedin the SAR. However, the intended impact of these maps on land useplanning for the further development of Savei'i has not materialized. Thepreparation of a follow-up project to concentrate on village development inSavai'i was not done, nor were studies of 10 representative villages inSavai'i and Upolu to analyze constraints to village agricultural develop-ment in Western Samoa.

Proiect Costs and Financing

22. Tables 3 and 4 compare actual project costs and fin&ncing withthose estimated in SAR. Actual project costs in US dollar terms were 952 ofthe SAR estimate (US$ 19.5 million vs US$ 20.5 million), although 862higher measured in local currency (WST 26.0 million actual vs WST 14.0million in the SAR) due to devaluations of the Western Samoa tala againstthe U.S. dollar during project implementation. Costs for the major projectcomponents, agricultural development and roads, were 702 and 132% of theSAR estimates, respectively.

- 6 -

23. A significant change from the estimated financing plan includedless than expected IDA disbursements (USS 6.5 million actual vs US$ 8.0million in the SAR; 81Z; Table 5) due to the failure to fully carry out theagricultural components. As noted in para 9, after US$ 900,000 of anestimated US$ 1.4 million had been disbursed, the Government of Japanstopped financing the project nurseries when it became apparent that thenurseries were not going to be completed and inputs were being used forother purposes. Although AIDAB disbursements of US$ 5.6 million were closeto the SAR estimate of US$ 5.4 million, it should be noted that midwaythrough project implementation AIDAB disbursements to WSTEC were suspended,partly due to concerns over project management and partly due to changingGOWS priorities for the relatively fungible AIDAB funds. On the other hand,AIDAB financed cost overruns for the project's road component. When theBank-executed UNDP TA grant SAM1791005 ended in 1987, UNDP continued tosupport the project with a new TA grant, SAM/861010, executed by Governmentwith the Bank as the cooperating agency. EEC funds were disbursed soonafter project effectiveness for the road component under a Special ActionCredit Agreement administered by the Bank. Vinally, it should be noted thatADB supported WSTEC's Upolu operations throughout project implementationand there was a great deal of coordination between WSTEC's Bank and ADBsupported activities (paras. 31 and 39).

Prolect Organization and Management

24. The SAR envisaged that a Project Steering Committee, chaired bythe Prime Minister who, by statute, is also the Minister for WSTEC, andincluding Directors of the relevant Government Departments and the WSTECGeneral Manager, would have overall responsibility for project policy,budget approval and monitoring. As the non-WSTEC components were completedor dropped, the Project Steering Committee fell into disuse and was dis-banded around 1983. Responsibility for project implementation within WSTEClay with a special project unit which was merged, with Bank concurrence,into the rest of WSTEC's operations in 1986. Given the severity of theproblems experienced, one may conclude that neither of the project specificbodies, the Project Steering Committee or the WSTEC project unit, succeededin providing adequate oversight. One difficulty in maintaining adequateproject management was the negative impact of repeated changes in WSTEC'sBoard and management (including 4 General Managers during project imple-mentation as well as 2 gaps of about 1 year each when WSTEC had no formallydesignated General Manager). Due to the national importance of WSTEC, theinstability of WSTEC management was perhaps unavoidable given WesternSamoa's frequent changes of government during the project period (6Governments in all). WSTEC and project management was further weakened bythe time spent on WSTEC's financial problems (para 34) and on WSTEC's largenumber of peripheral, often uneconomic, activities not related to WSTEC'score plantation and livestock business. In later years the TreasuryDepartment became more actively involved with WSTEC and project managementdue to WSTEC's financial crisis (para 30).

Bank Performance

25. Appraisal. In terms of the Bank assistance strategy, it appearsthat Bank support for a project to address two of Western Samoa's keydevelopment needs, plantation agriculture and Savai9i, was sound. However,

- 7 -

the Bank can be faulted for paying insufficient attention at the appraisalstage to several important problem areas. These include:

(a) Inadequate agro-climatic data. This resulted in one of the fourproject sites being abandoned and large replanting being requiredat other sites.

(b) A serious failure to appreciate the resistance to the newagronomic practices and planting material the project was designedto promote.

(c) Management weaknesses in WSTEC. Although acknowledged as aproject risk in the SAR, and covenanted in the Credit Agreement,in hindsight it appears that the lending pressures at the timeovercame reservations about the ability of WSTEC to take on majornew activities. It is worth recalling that, one year before theappraisal of the Bank project, ADB declined to include the Savai'iestates in its own WSTEC project, precisely because of suchconcerns.

(d) It appears that the village components, which were never carriedout, may have been inserted late in the day, without adequatepreparation, or appraisal due to internal Bank pressure for suchcomponents, rather than any strong desire for them on the part ofGovernment.

26. Supervision. By 1982, a Bank supervision -eport commented that avery high level of supervision would be required to salvage the project,which was already in deep trouble, and recommended cancellation if the Bankconsidered continued support of the project not to be cost effective.Ironically, it was during the years immediately following this recommenda-tion, 1983-85, that the Bank spent the fewest man-days supervising theproject. The effective time spent by supervision missions on theAgricultural Development I project was further reduced by the time requiredworking on other Bank operations in the country. A UNDP project evaluationdocument in 1986 criticized the Bank for the infrequency of Bank supervi-sion missions and the frequent changes of Bank staff supervising theproject. With regard to the composition of supervision missions it shouldbe noted that, despite the extremely poor quality of project field work,there is no record that any tree crop specialist supervi ed the projectbetween project effectiveness in 1980 and 1985.

27. The quality of advice provided by tb" jank supervision missions toaddress WSTEC's financial and management problems, as written in the AideMemoirs, appears generally sound. On the other hand, the fact that itchanged relatively little from mission to mission indicaces that the advicewas often not acted upon, although some progress was made late in projectimplementation. Field conditions deteriorated steadily until 1986 when thesecond UNDP-financed plantation manager started work and a Bank tree cropspecialist started to supervise the project on a regular basis.

28. During the middle years of the project (1983-85), which had thelowest level of Bank supervision and, ironically, the highest supervisionratings, the status of project implementation appears to have been assessed

- 8 -

higher than was justified, and the case for additional supervision re-sources reduced. The initial UNDP-financed plantation manager, recruitedby the Bank in 1984, proved to be an unfortunate choice, as did the firstADB-financed financial controller, in that they were not effective.Although the possible suspension of disbursements due to poor projectimplementation was discussed at least 3 times (in 1982, 1983 and 1986), astrategy was adopted to maintain relations with WSTEC because improvementin its performance was consid:-ed central to the development of WesternSamoa (see para 31 for a discussion of the Bank/Borrower relationship).Meanwhile, ADB had expressed major concern to the Bank about WSTEC'sperformance for projects with which it was associated.

29. Credit Closing Date Extension. Consistent with its position inmaintaining a relationship with WSTEC, the Bank agreed to two one-yearextensions of the Credit Closing Date. Although the planting program didnot expand as rapidly as had been hoped, the two-year extension periodprovided time for field operations to improve dramatically, a goodmanagement team to be recruited, and progress to be made in resolvingWSTEC's financial problems. A third one-year Credit Closing Date extensionwas considered, but WSTEC withdrew the request, with the support of theBank, after analysis indicated that extension would not particularly con-tribute to improving WSTEC's overall corporate position, which dependedupon Government decisions concerning sales of non- or poorly producingassets, and cessation of loss making activities.Borrower Performance

30. As alluded to in para 24, WSTEC's management of the project, andof WSTEC's operations generally, was unsatisfactory and characterized byfrequent changes of Board members and managers, and loose management andfinancial discipline. The result was the plunging of WSTEC into a finan-cial crisis which has yet to be adequately addressed, although someimprovements have been noted in recent years. Because of WSTEC's nationalimportance, the project was also affected by political pressures, exacer-bated by the frequent changes of Government. About midway through theproject, the Treasury Department took a much more active and positive rolein trying to resolve WSTEC's financial crisis; and in supportingrecruitment, late in project implementation, of WSTEC's management team,which had been moving steadily to address the WSTEC and project problems.However, the General Manager and Finance Controller resigned after the newBoard, appointed in mid-1988, rejected their comprehensive recommendations.

Project Relationships

31. The relationship between the Bank and Government was generallygood and staff of both the Bank and the Treasury Department were generallyin accord with the actions needed to rescue WSTEC. One exception wasduring the middle years, when the Treasury Department thought the Bank wasbeing "too soft" with WSTEC. The relationship between the Bank and WSTECwas also good, and, as suggested by the Treasury comment above, perhaps toogood at times. Because ADB had its own WSTEC projects on Upolu, regularcoordination between the Bank and ADB was an important feature of projectimplementation, and while this was generally effective there were dif-ferences from time to time on the most appropriate strategy to correct

- 9 -

deficiencies in WSTEC's performance, on which the Bank took a longer termview than ADB. Within Western Samoa the project suffered because ofinadequate cooperation between DAFF and WSTEC on the introduction of newagronomic practices.

Legal Agreements and Covenants

32. Table 6 sunmmarizes Government and WSTEC compliance with loancovenants. At times during implementation, Section 3.01 of the CreditAgreement, the "due diligence" covenant, was not complied with and thepossibility of formally suspending disbursements arose, although nevercarried out. For the non-WSTEC components adequate records were not kept,audited project accounts were never submitted, and the relevant covenantswere eventually waived. Similarly, in early years adequate :ecords for theWSTEC component were not kept and some IDA disbursements were neveradequately accounted for. Annual audited project accounts for the WSTECcomponent and WSTEC corporate accounts were submitted. However, they werevirtually never on time and were always of unacceptable quality and/orqualified or disclaimed by the auditors. Thei:e has recently been a sub-stantial improvement in WSTEC's record-keeping and accounts due to projecttechnical assistance and an AIDAB recruited financial controller.

III. PROJECT RESULTS 3!

33. Agricultural. As described in para 11, only 419 of the plantingtarget was actually achieved. Current yield estimates are 100%, 84% and 91%of SAR expectations for coconut, cocoa and coffee, respectively. Over the25-year economic life of the project assumed in the SAR, total productionof copra, cocoa and coffee is now estimated to be 22%, 54% and 11% of SARexpectations JTable 8). As a consequence, rapid, significantly increasedexports from the project, a major project objective, will not materialize.The SAR estimated full project development would be reached in 1989 and*would result in incremental exports over the export levels at appraisal of18% for copra, 54% for cocoa and 650% for taro, and coffee exports for thefirsL time. However, current estimates of incremental exports at fulldevelopmaent (now estimated for 1993) are 4% for copra and 23% for cocoa.No tar^ or coffee is expected to be exported as a result of the project.

34. WSTEC Financial Performance. At appraisal, WSTEC's financialperformance appeared healthy. Profits and income tax payments had in-creased steadily during the 1970s and WSTEC's return on total capitalemployed was good. Since the project began in 1980, WSTEC's financialperformance has been extremely poor and in no year did WSTEC report anoperating profit. The deterioration was due to falling export prices;loose financial and management discipline; and severe difficulties forGovernment and the Board to take prompt remedial action. Because ofexternal financing, the project was not a significant direct contributor toWSTEC's deteriorating financial position. Nevertheless, this second largedevelopment project, and its attendant large expenditures, may not onlyhave been an unreasonable burden upon a traditionally managed operation

3/ See Table 7 for physical indicators of project accomplishment.

- 10 -

unaccustomed to change; but also contributed to the loosening of financialand management discipline. Project implementation was adversely affectedby a shortage of WSTEC counterpart funding. This was largely overcome byan increase in the IDA disbursement percentage to 90% and the establishmentof a Special Account in 1983. More significantly, WSTEC's financialproblems have drawn management attention away from its plantation opera-tions, including those related to the project. Because of the project'sgoal of contributing to a strong healthy WSTEC, Bauik supervision in lateryears focussed as much on WSTEC as a corporation as on project specificactivities. Whilst some progress had been made towards a financialrestructuring, and a Bank-endorsed restructuring program prepared bymanagement had been reviewed by GOWS and WSTEC's Board, in the event thiswas not adopted, and the outlook for restoring WSTEC to financial healthremains gloomy.

35. Economic Rate of Return. The SAR estimated the project ERR at13.5%. Because of the large areas which required replanting, the slow paceof field development in relation to infrastru' ture investments, currentyield estimates lower than those in the SAR, and the general mismanagementof assets, especially in early years, the ERR for the project is now esti-mated to be near 0%. If the largely wasted expenditures incurred in earlyyears were excluded, the ERR would be positive, although less than WesternSamoa's estimated opportunity cost of capital of 10%. This appears mostlydue to the reverse economies of scale caused by the failure to achieveplanting targets.

36. Environmental Impact. Consistent with the SAR, the project'senvironmental impact appears to be positive. The trees planted haveprevented uncontrolled shifting cultivation in highly erodable undulatingterrain, and have replaced secondary forest and scrub land with a stablelong-lasting tree crop system.

37. Role of Women. The SAR said that the project would endeavor toassist women as much as men and this would be facilitated by WSTEC's policyof providing equal opportunity to men and women for recruitment, trainingand promotion. In practice, project training and WSTEC supervisory posi-tions appear to have gone exclusively to men.

38. Proiect Beneficiaries. The SAR estimated that about 1700 sub-sistence farm families would benefit from the project's village developmentcomponent, which was never carried out. WSTEC has employed an estimated240 permanent workers as a result of the project, compared to 600 estimatedin the SAR.

39. Proiect Sustainability and Follow-Up Projects. A follow-upproject (Agricultural Development II; Credit 1080-WSO; effective 1981)supported rehabilitation of WSTEC's Upolu estates (financed primarily byADB) and DAFF research and extension (financed primarily by the Bank). TheDAFF component suffered many problems, and, although extended once, arequest for a second extension of the Credit Closing Date was turned downby the Bank. The Agricultural Development II Project suffered from thesame agricultural, management and financial problems as the AgriculturalDevelopment I Project. ADB has extended financing of the WSTEC componentof the Agricultural Development II Project until December 31, 1988. With

- 11 -

the rejection of the management recarmendations to restructure WSTEC, it isdifficult to predict at what stage WSTEC will return to financial viabili-ty. As for the WSTEC field activities supported by both the AgriculturalDevelopment I and Agricultural Development II Projects, while the plantingsare now being adequately maintained, there is not yet an *Aeouate plan totrain local field managers to take over from the externally re ruited staffto ensure that the full benefits of the plantings are obtained over thelong term. Project roads are being adequately maintained and Government isplanning a follow-up Savai'i North Coast road project.

CONCLUSIONS AND LESSONS LEARNED

40. Conclusions. None of the project's four main objectives (a rapidincrease of WSTEC's production and exports of copra, cocoa and coffee;improvement of WSTEC staff skills; a transfer of technology to villages;and increased taro exports) was satisfactorily achieved. As a result, theproject also failed to satisfactorily achieve any of the points ofGovernment's economic development strategy (para 3). WSTEC s financialposition will remain unviable, unless a satisfactory alternative ActionProgram to that prepared by WSTEC managers (who have since resigned) isadopted. At this time the most significant net project benefit appears tobe the Savai'i South Coast road, which, as described above (pare 19),accounted for 56Z of total project costs and is considered to have beensuccessful in stimulating economic development on Savai'i and improving thequality of life of the people there.

41. Lessons Learned. The most important lessons of the Western SamoaAgricultural Development I Project relate to the special problems indesigning and implementing projects in small, isolated economies such asthose in the South Pacific. First, there is the need to recognize thegreater vulnerability a tiny economy has to a project failing. If the Bankis to be associated with small country projects in the future, more pre-paration work in areas such as agro-climatic conditions, project managementand the country's commitment to project design will have to be done thanwas the case in the Western Samoa Agricultural Development I Project. Theoverall Implication is that Bank operations in small countries, because thecountries must be more risk averse, may need larger staff inputs foreconomic and sector work and project preparation than in larger countries.In a relatively isolated, traditional country, like Western Samoa, it isespecially important to assess the likely acceptance of the technologicalinnovations a project may be designed to promote.

42. Another lesson for external donors is the need to avoid over-burdening local management capability. Especially in a small cou try,there may be relatively few institutions capable of handling a project ofthe minimum size required by an organization like the Bank. This isperhaps why the US$ 20 million Agricultural Development I project had 5external financiers. In the rush to provide assistance, there is a dangerthat new activities ercouraged by external donors may do more harm thangood and contribute to turning a relatively strong institution (like WSTECin 1979), into a problem-filled one.

- 12 -

43. Following from the above two points, the final lesson is that if aproject starts to go wrong, as happened in the Western Samoa AgriculturalDevelopment I Projoct, the Bank should be preparod to take a far moreactive role in trying to improve project performance. Not only should thoBank's sense of responsibility be greater in a small country which is morevulnerable to damage if a Bank-assisted project fails, but the need for,and the ability of, Bank supervision missions to provide project technicalassistance and advice may be greater in small countries where projectmanagement may be relatively thin. If the Bank is going to be associatedwith projects in such small economies in the future, supervision rosourcesuhould be increased substantially.

- 13 -

Table 1

WESTERN SAMOA



Disbursement Schedule

IDA FY SAR Estimate ActualUSS M 2 USS M 2

80 0.4 5 1.0 1381 1.6 20 2.5 3182 3.2 40 3.5 4483 4.8 60 4.2 5384 6.2 78 4.7 5985 7.4 93 5.0 6386 8.0 100 5.4 6887 5.9 7488 6.5ls 8189 6.5Lb 81

As of May 18, 1988.

Revised following final disbursement transactions (See Prefave). Anestimated US$ 1.5 M or 192 of the Credit was cancelled followingfinal disbursement transaction on March 3, 1989 (See Preface).

- 14 -

Table 2WESTERN SAMOA



Annual WSTEC Planting Program (Acres La)

X ofAppraisal Appraisal

Site Estimate 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988b/Total EstimateASAUCoco& 500 51 - 52 50 0 86 48 - - - 287 57

FALELIH&Cocoa 1000 - - 39 64 60 34 88 101 20 - 406 41Coconuts - - - - - - - 35 65 - - 100 /e

AOTEAROA A leCocoa 46 - 91 52 71 118 - 150 - - 528 80

AOTEAROA B /cCocoa - - - - - - 110 25 - - 135 27Coconuts - - - - - - 185 100 150 435 80Coffee - - - - - - 15 - - 15 le

AOTEAROA C leCoffee - - - - - - 10 - - - 10 /e

VAIAATA /dCocoa 130 - - - - - - - - - - 0 0Coconuts 1200 - - - - - - - - - - 0 0Coffee 200 - - - - - - - - - - 0 0

TotalCocoa 2130 97 - 182 166 131 238 246 276 20 - 1356 64Coconuts 2400 - - - - - - 35 250 100 150 535 22Coffee 200 - - - - - - 10 15 - - 25 13

TOTALSAVAI'I 4730 97 - 182 166 131 238 291 541 120 150 1916 41

/a 2.47 acres = 1 ha. Table excludes areas abandoned or replanted areas./b Estimate./c Aotearoa A, B and C originally constituted Lata Estate in the Staff

Appraisal Report with the following estimates : cocoa - 500 acres,coconuts - 1200 acres.

/d Vaiaata Estate was found unsuitable for tree crop development./e No planting originally envisaged.

- 15 -

Table 3

WESTERN SAMOA



Proiect Costs

Component SAR estimate Actual la Actual/SAR----------US$ '000------ (%) lb

Planting material andnurseries 1064 1375 98

Agricultural development le 6063 5555 70Aerophotographic surveys 665 474 54Technical assistance 1311 1102 64Monitoring & evaluation

and studies 180 0 0Roads 6360 10997 132

Subtotal base costs 15643 19503 95

Contingencies 4904 - -Total costs 20547 19503 95

/a Estimated prior to final disbursement transactions, which wereinsignificant.

lb Based on base costs plus an allocation of contingencies.

lc Including field development and associated civil works, vehicles,incremental WSTEC staff, maintenance and other operatingcosts.

- 16 -

Table 4

WESTERN SAMOA


PROJECT CONPLETION REPORT

Prolect Financing

Financier SAR estimate Actual SAR/ActualUS$ M 2 US$14 M 2

GOWS 2.1 10 2.8 14 133

WSTEC 1.7 8 2.1/a 11 122

IDA 8.0 39 6.5 33 83

EEC 0.3 1 0.3 1 100

UNDP 1.7 8 1.3 7 76

AIDAB 5.4 26 5.6 29 104

Japan 1.4 7 0.9 5 63

Total 20.5/a 100 19.5 100 95

/a Estimated through end-1988.

lb Column does not add up precisely due to rounding.

- 17 -

Table 5

WESTERN SAMOA



Use of Loan Funds

CateRory SAR estimate Actual /a Actual/SARUS$'000 z US$'000 Z Z

1. Equipment 200 3 675 10 338

2. Fertilizers and 2700/b 34 151 2 6agro-chemicals

3. Field development3a. WSTEC 850/c 11 2420 37 2853b. Villages 100 1 0 0 0

4. Roads 3000 38 3149 48 105

Other Id 150 2 160 2 107

Unallocated 1000 13 - -

Total 8000 100 6555 100 82

/a Revised following final disbursement (see Preface).

/k Changed during project implementation to US$ 400,000.

/c Changed during project implementation to US$ 3,250,000.

Id Category 5 (US$ 150,000) was part of the original project design andincluded monitoring and evaluation, feasibility studies and preparationactivities for a follow-up project. No disbursements were actually madeagainst Category 5. During project implementation, additional categorieswere created to permit IDA disbursements against incremental operating costs(Category 6; no disbursements made; apparently reimbursements for increment-al operating costs were made from Category 3A) and consultant services(Category 7; US$ 160,231 disbursed).

- 18 -

Table 6Page 1

WESTERN SAMOA



Compliance with Loan Covenants

Section Covenant Afreement Remarks

3.01 Borrower/WSTEC to fund and carry Complied with for non-WSTECout project with due diligence and components. For WSTEC, notefficiency in accordance with in compliance in earlierappropriate practices. years; improved in later years.

3.02 Borrower to maintain the Project Initially in compliance.Steering Commttee with planning, Condition waived duringoverview and coordination functions, project implementation.and appoint the Project Managerand Field Operations Coordinator.

3.03 Borrower to employ the required (a) and (b) complied with,consultants for (a) road building (c) and (d) waived, compo-supervision, (b) mapping, (c) moni- nents not carried out.toring and evaluation, and (d)studies.

3.04 Borrower to cause WSTEC to Complied with for coconutemploy consultants and experts and cocoa/coffee consultants.whose qualifications, experience Crop diversification consul-and terms of employment are satis- tant never appointed.factory to IDA.

3.05 Borrower to (a) present to IDA Waived, component not carrieda program for the village deve- out.lopment component, and (b) imp-lement such a program.

3.07(a) Borrower to furnish IDA promptly Poor compliance in earlythe plans, specifications, reports, years; in compliance in latercontract documents and work and years.procurement schedules for theproject, and any material modifi-cations thereof or additionsthereto, in satisfactory detail.

3.01(b) Records and accounts. Not complied with in earlyyears; in compliance in lateryears.

- 19 -

Table 6Page 2

Section Covenant Azrement Remarks

3.07(c) Borrower to furnish IDA with a Waived. PCR prepared by theCompletion Report not later than Bunk.six months after the Closing Date.

3.08 Borrower to acquire land rights Generally complied withnecessary. except for a land dispute

with a village adjoining oneproject estate.

3.09 Road design standards. Complied with.

4.01(a) Records and accounts Not complied with in earlieryears, in compliance in lateryears.

4.01(c) Borrower to submit to IDA Waived for non-WSTEC compo-audited project accounts not nents. Submitted for WSTEClater than six months after the but nearly always late, andend of each yer. not in compliance with generally

accepted auditing standards.

4.02 Borrower to cause road equipment Complied with.and roads to be reasonably main-tained.

4.03 Borrower to collect Information Complied with.on road traffic and road construc-tion and maintenance costs.

4.04 Borrower to take action necessary Complied with.to ensure that dimensions and axleloads of vehicles are consistentwith the road design standards.

Subsidiary Loan Aareeiment

Article Terms and conditions of Government Complied with.II loan to WSTEC.

3.03 WSTEC to not, during project Complied with.implementation, undertake addi-tional responsibilities or sub-stantially expand its activitieswithout prior consultation withGovernment and IDA.

3.04 WSTEC's post of General Manager to Generally complied with.be filled with a person with quali-fications and experience satiseactoryto Government and IDA.

- 20 -

Table 7

WESTERN SAMOA

AGRICULTURAL DEVELOPMENT I PROJECT (CR. 951-11O0


Indicators of Prolect Accomllishment I&

Credit Agreement Unit SAR Actualla Actu-lISARCategory (X)

A. Savai'i Nurseries 2 0 0

B. WSTEC tree cropplantingCoconuts ac 2400 535 22Cocoa ac 2130 1356 64Coffee ac 200 25 13

Subtotal as 4730 1916 41

C. Taro marketing component not carried out 0

D. WSTEC staff training J of 12 13 108staff

E. Village tree crop planting ac 500 0 0

F. Village agricultural not carried out 0credit component

G. RoadsSouth Coast highway km 93.5 93.5 100Estate access roads 1 4 4 100

H. Aerographic mapping done 100Village feasibility studies 1 10 0 0

I. Department of Agriculture not carried out 0component

/a Estimate to end 1988.

- 21 -

Table 8

WESTERN SAMOA



Yield. Area and Production Estimates

Copra Cocoa CoffeeYields (TIac)Ia

SAR 29 12 10Current 29 11 9Current/SAR (Z) 100 84 91

Area (ac)

SAR 2400 2130 200Current 535 1356 25Current/SAR (Z) 22 64 13

Proiect Production ('OOOT)

SAR 69 27 2Current 15 14 0.2Current/SAR (Z) 22 54 11

/a Over an assumed economic life of 25 years.

- 23 -ATTACHMENT I

ASIAN DEVELOPMENT BANEK (Page 1 of 2)

12 April 1989

Mr. Graham Donaldson, ChiefAgriculture, Infrastructure andHuman Resources DivisionThe World Bank1818 H. Street M.W. Washington D.C. 20433U. S. A.

Dear Mr. Donaldson:

Re: Western Samoa: Agricultural Development Project(CR. 951-WSO) - Draft Project Completion Report

Thank you for your letter dated 21 February 1989 which we received on7 March 1989, with the enclosed draft Project Completion Report (PCR) on thecaptioned Project. We have reviewed the draft report as revised and would liketo offer the following comments:

1. It is a frank report which candidly brings to light the difficultiesencountered by small island countries of the South Pacific inimplementing relatively large agricultural projects;

2. The Project did not achieve its four main objectives, but it wasable to complete the Savaii South Coast road which was a major linkof communities in that part of Western Samoa. How this road hasimproved the quality of Western Samoa of life of the peopli>, shouldhave been further elaborated in the PCR;

3. We noted your conclusion (para 28 of your PCR) that the UNDP-financed plantation manager and the ADB-financed financialcontroller were ineffective. Our PCR mission found out that theplantation manager had helped organize for planting of hybridcoconuts and cacao replanting. The financial controller initiatedmanagement information and control systems (MICs). However,implementation of the MICs was not very satisfactory due to lackof trained staff.

4. The provision of a long-term (3-5 years) implementation consultantin the plantations at the beginning of the Project could haveimproved Project performance, but this subject was not fullydiscussed in the report.

We have taken note of the lessons learned in this Project. We agree withthe view that projects should be carefully designed so that the technologicalinnovations being introduced are readily accepted, and that the localimplementing capabilities are not overburdened. The rush to provide development

7 o R. ... 1- .. 1--J..M- MAP. .k ..r... * ,4AJJ. ...A I' () 1- ,,,,"ADh . Y0 A

'r.l. 3t 7V ...A3 7 , o*t61l AJd,... ASIANANAK.MANILA. I-1-mr.. T,1-X-4*:(Ft CA)W.-11-ADKlll MIAM *.107 AMSl P.-Att I 1.) sar ff^"AIM V\

- 24 -

ATTACHMENT I(Page 2 of 2)

assistance which had ambitious targets and was to yield fruits in 5-7 years, isnot readily grasped by people with a unique culture and who have led such a lifefor centuries.

Enclosed is an edited copy of our PCR for the Agricultural DevelopmentProject, which we promised in our telex of 21 March 1989.

Yours sincerely,

fficer-in-chargeAgriculture East (Division 3)

attachment: a/s

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toW 142W 10

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world bank document · 2016-08-29 · document of the world bank for official use only report no....

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