world bank document...nov 15, 2002 · date board approval 06/08/73 06/11/76 07/15/71 /1 a -...

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 3993

PRtOJECT PERFORMANCE AUDIT REPORT

ARAB REPUBLIC OF EGYPT: NILE DELTA DRAINAGE PROJECT I(CREDIT 181-UAR)

June 21, 1982

Operations Evaluation Department

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

At time of appraisal

LE 1.00 = US$2.30US$1.00 = LE 0.43

At time of completion

LE 1.00 = US$1.43US$1.00 = LE 0.70

1 Feddan = 1.04 acres/0.42 hectares

ABBREVIATIONS

DCA = Development Credit AgreementDRI = Drainage Research InstituteEGAD = Egyptian General Authority for

Drainage ProjectEPADP = Egyptian Public Authority for

Drainage ProjectsFAO = Food and Agriculture Organization

of the United NationsGOE = Government of Egypt

GRI = Groundwater Research InstituteHAD = High Aswan DamKfW = Kreditanstalt fuer Wiederaufbau -

the West German foreign aidagency

MOA = Ministry of Agriculture

MOI = Ministry of Irrigation

NDDA = Nile Delta Authority for DrainageProjects

OED = Operations Evaluation DepartmentPCR = Project Completion ReportPPAR = Project Performance Audit ReportSAR = Staff Appraisal Report (also the

pre-1978 grey cover reports)UNDP = United Nations Development ProgrammeUSAID = United States Agency for Inter-

national Development

BORROWER'S FISCAL YEAR

Up to June 1972 and since July 1979 July-JuneFrom July 1972 to June 1979 Calendar Year

FOR OFFICIAL USE ONLY

PRCOJECT PERFORMANCE AUDIT REPORT

ARAB REPUBLIC OF EGYPT: NILE DELTA DRAINAGE PROJECT I

(CREDIT 181-UAR)

TABLE OF CONTENTS

Page No.

Preface ...... *..... ...... ..................*a*a.. ...... iBasic Data Sheet ............................... . .......... iiHighlights ......... ................................... iii

PROJECT PERFORMANCE AUDET MEMORANDUM .............................

I. SUMMARY.. . *..*.** * -- ..............................

II. MAIN ISSUES ............... .... o.......o.............. 3

A. The Use of Consultants ...... ...... . . ...... 3

B. Project Financing and Utilization of IDA Funds ..... 5

C. Determining Project Benefits ....................... 6

D. Design and Construction .. 9.........* ...... **...a 9

E. Operation and Maintenance .......................... 11

Annex 1: Comments by the Ministry of Irrigation ................. 13

Annex 2: Comments by Chairman, Egyptian Public Authority

for Drainage Projects . ........ .............. 19

PROJECT COMPLETION REPORT ........................................

I. Introduction ......... ......... ..... *. .. *. 21

II. Background .......... 0............... *O............................... 23

III. Project Formuilation .......... ............ ................ 25

IV. Implementaticon o.*..................................... 28

V. Operating Performance .. .......... *...... ........ 34

VI. Institutiona]. Performance .............................. 38

VII. Benefits and Economic Evaluation ....................... 40

VIII. Bank Performaince ......... .. ..... .... ............. ...... ....... 44

IX. Conclusions ......................................... .......... 0..... 45

Annexes l - 13 ................................... * ......... .......a........ 48

Map

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

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PROJECT PERFORMANCE AUDIT REPORT


PREFACE

This is a performance audit of the Nile Delta Drainage I Project inthe Arab Republic of Egypt for which Credit 181-UAR was approved on March 24,1970 in the sum of US$26 million equivalent. The final disbursement inrespect of this credit was made on April 3, 1981 and US$2 million were can-celled on the same day.

The audit report consists of an audit memorandum prepared by theOperations Evaluation Department and a Project Completion Report (PCR), datedJuly 16, 1981, prepared by the Europe, Middle East and North Africa RegionalOffice. The audit memnorandum is based on a review of the Appraisal Report(No. PA-12a) dated October 14, 1969, the President's Report (No. P753) ofNovember 5, 1969, the Development Credit Agreement (DCA) dated April 17, 1970and the PCR. Appraisal Reports of the follow-on project (Nile Delta DrainageII of July 1977) as well as two similar projects in Upper Egypt (Upper EgyptDrainage I of August 1973 and Upper Egypt Drainage II of June 1976) were alsoperused. Internal Bank memoranda on project issues as contained in relevantBank files have been consulted and Bank staff associated with the projectinterviewed.

An OED Miss-ion visited Egypt in December 1981. The mission helddiscussions with staff of the project executing agency, the Egyptian PublicAuthority for Drainage Projects (EPADP), the Drainage Research Institute(DRI), the Groundwater Research Institute, officials of the Ministry ofAgriculture, and the Soil and Water Research Institute. Field trips wereorganized during which the mission interviewed benefiting farmers, noteddata collection activities in the field and observed ongoing construction workunder the follow-on project. The information obtained during the mission wasused to test the validity of the conclusions of the PCR.

A copy of the draft report was sent to the Borrower on March 17,1982. The comments received from the Ministry of Irrigation and the Chairmanof EPADP (see Annexes 1 and 2 of the PPAM) have been taken into account orappropriately footnoted.

The audit finds that the PCR covers adequately the salient features

of the project and the PPAM generally agrees with its conclusions. In addi-tion to summarizing the objectives and results of the project, the PPAMexamines the derivation of project benefits to agricultural production, theissue of consultants and technical assistance, and design and constructioncriteria.

The valuable assistance provided by the EPADP and the Ministry ofAgriculture in the preparation of this report is gratefully acknowledged.

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PROJECT PEBORKANCR AUDIT RPOkRT

ARAB REPUBLIC OF EGYPT N1LE DELTA DRAIRAC PROJECT I(CREDIT 181-UAR)

BASIC DATA SHEET

KEY PROJECT DATAAppraisal Actual or Actual as 2 ofEstimate Estimated Actual Apprait'l Estimate

Project Costs (US$ million) 147 198.9 135Credit Amount (US$ million) 26 26 100Date Board Approval 03/24/70 03/24/70Date Effectiveness 07/14/70 12/22/70 44Date Physical Components Completed 12/75 12/80 200

Proportion then completed (X) - 100 65Closing Date 12/31/76 12/31/80 150Economic Rate of Return (S) 18 25 139Financial Rate of Return (E) NA NA NAInstitutional Performance FairAgronomic Performance GoodNumber of Direct Beneficiaries (year 15) 250-270,000 farm families

CUMULATIVE DISBURSEMENTS

FY71 FY72 FY73 FY74 PY75 FY76 FY77 FY78 FY79 FY80 FY81

Appraisal estimate (US$ million) 6.4 15.9 23.3 25.0 26.0Actual (US$ million) - 0.3 3.8 8.3 14.0 15.9 18.0 21.1 23.9 24.0 24.0Actual as 2 of estimate NA 2 16 33 54 61 69 81 92 92 92Date of final disbursement April 13, 1981Principal repaid to (mo./day/yr.) (US$ million) -------------- 0.6-…

MISSION DATA

Date No. of Mandays Specializations Performance Types ofMission (mo./Yr.) Persons in Field Represented/l RatinRS TrendL3 Proble..&d

4

Identification 02-03/68 n.a.Preparation 09/68 4 25Appraisal 12/68 5 23

Supervision 1 04-05/70 2 13 c, d 2 - M, FSupervision 2 07/70 2 5 c, b 2 2Supervision 3 10-11/70 2 23 c, f - -

Supervision 4 12/70 1 12 d 2 3 MSupervision 5 04/71 2 12 d, e 3 3 MSupervision 6 10/71 1 14 d 3 3 M, FSupervision 7 02/72 2 17 a, c 3 3 M, FSupervision 8 08-09/72 4 24 a, b, c 3 2 M, T, FSupervision 9 07/73 2 16 a, c 2 1 MSupervision 10 04/74 3 10 a, c 2 1 M, PSupervision 11 10/74 3 8 a, c, b 3 2 M, TSupervision 12 03-04/75 3 10 b, c, e 2 1 M, FSupervision 13 12/75 2 12 c, b 2 2 MSupervision 14 04/76 3 7 b, c 2 1 HSupervision 15 11/76 3 7 a, b, c 2 l M, FSupervision 16 03-04/77 1 7 b 2 1 M, FSupervision 17 11/77 1 8 b 2 3 MSupervision 18 03/78 1 8 a 2 1 TSupervision 19 10/78 2 8 a, b, c 2 1 TSupervision 20 02-03/79 3 5 a, c 2 2 M, 0Supervision 21 09/80 3 4 a, b, c 2 2 n, T

OTHER PROJECT DATA

Borrower: Arab Republic of EgyptExecuting Agency: Egyptian Public Authority for Drainage ProjectsFiscal Year: July-June (since July 1979)

Name of Currency (abbreviation) LE (Egyptian pound)Currency Exchange Rate:

Appraisal Year Average US$ 1.00 - LE 0.43Intervening Years Average US$ 1.00 - LE 0.60Completion Year Average US$ 1.00 - LE 0.70

Follow-on Project:Name: Upper Egypt Drainage I; Upper Egypt Drainage II; Nile Delta Drainage IILoan/Credit Number Cr. 393-EGT Ln. 1285/Cr. 637-EGT Ln. 1439/Cr. 719-EGTLoan/Credit Amount (US$ million) 36 10 40 39 27Date Board Approval 06/08/73 06/11/76 07/15/71

/1 a - agriculturist; b - economist; c - engineer; e - financial analyst; f - procurement specialist;d - Division Chief.

/2 1 - problem free or minor problems; 2 - moderate problems; and 3 - major problems.7 1 - improving; 2 - stationary; and 3 - deteriorating.

7T F - financial; M - managerial; T - technical; P - political; and 0 - other.

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PROJECT PERFORMANCE AUDIT REPORT

ARAB REPUBLIC CF EGYPT: NILE DELTA DRAINAGE PROJECT I(CREDIT 181-UAR)

HIGHLIGHTS

The need to provide drainage in the Nile Delta, to control water-logging and soil salinity, has been recognized since controlled perennialirrigation started in the 19th century. The problem became urgent when thedecision was taken to construct the High Aswan Dam (HAD) which would enabledouble cropping and con,equently much higher water applications are becomingthe normal farming practice. The only feasible way to drain the delta soilswas by buried pipes, art expensive and demanding operation. Drainage willeventually be needed on 6 million feddans (2.5 m ha), within no more than 30years. Accordingly, the Government of Egypt approached the Bank Group in 1968to assist with the first tranche of their drainage program, extending to950,000 feddans (400,000 ha). The planned project implementation period wassix years.

The project was expected to assist in installing buried field andcollector drains, remodel the branch and trunk open drains to convey theeffluent and construct and equip 11 pumping stations to pump the water intoirrigation canals for reuse or discharge into the Nile. Factories to manu-facture concrete pipes; pipe laying machines; vehicles and other equipment toassist construction; suitable equipment to clean and maintain the drains afterinstallation and consultancy services to assist the implementation of tech-nical and management aspects were to be parts of the project. The Ministry ofAgriculture would be provided with vehicles to assist extension services.

The project wE.s implemented as planned, but was delayed by fouryears, due in part to the 1973 war and its aftermath. Foreign exchange costsdid not escalate but local costs increased by about 45%. No vehicles werepurchased for the agricu:Ltural extension service and only a minimal amount ofdrain maintenance equipment was procured. Nevertheless, project benefits werebetter than expected and the economic rate of return is now estimated at about25% compared with the appraisal estimate of 18%.

The Egyptian Public Authority for Drainage Projects (EPADP) cameinto existence during execution of this, as well as two other Bank-assisteddrainage projects in Upper Egypt and one in the Delta. After some initialproblems, the Authority became a reasonably efficient organization chargedwith implementing large projects. This project is the world's largest drain-age scheme and is only one of four for which EPADP is responsible.

Other points of interest, and lessons to be learned are:

the effectiveness of consultants in management positions is likelyto be at best marginal in projects where the borrower is inclined to

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resist having outsiders forced on them by the Bank (PPAM paras.7-12);

the Borrower did not see the need for the use of an envelope mate-rial for buried drains and the Bank prevailed in its efforts tobring about a change in this attitude only recently. The absence ofenvelope material could, possibly, lead to a shortened working lifeof the drains (PPAM paras. 22-26); and

the flexibility shown by the Government of Egypt and the Bank inaccommodating drainage needs as they arose and not rigidly adheringto areas identified at appraisal was highly commendable (PCR para.4.11 and PPAM para. 17).

PROJECT PERFORMANCE AUDIT MEMORANDUM


I. SUMMARY

1. The Nile Delta Drainage Project was the first large-scale tiledrainage project undertaken in Egypt. It covered an area of about 950,000feddans (400,000 ha) bettween Cairo and the Mediterranean Sea. It is thelargest single tile-drainage project in the world.

2. The need for drainage became obvious soon after controlled perennialirrigation had replaced free flooding in parts of the Delta, starting over 100years ago. A system of open main and branch drains was being constructedsince around the turn of the century, augmented in many places with pumpingstations that lifted the effluent into the main irrigation canals, backinto the Nile or into the terminal lakes at the end of the canals. This trunkdrainage network was never expected to solve the problem of waterlogging, andit soon became obvious 'that farmers were unwilling to lose some 10% of theirland for additional open drains that would be necessary for complete water-table control. In the late 1930s investigations started into buried tiledrainage, which eliminate land losses. In anticipation of the perennialirrigation and near 200% cropping intensities on all cultivable lands that theHigh Aswan Dam (HAD) would make possible, a program was launched in 1956 toprovide the whole Nile valley with tile drains within 30 years. Ten yearslater, however, only about 300,000 feddans, or 5% of the total area, werecompleted. To speed up implementation, a UNDP pilot project was launched in1963 to establish the criteria and feasibility of mechanized tile laying.Machine operation was not only expected to speed up execution, but also toallow pipes to be laid where the watertable was less than 1 m below thesurface and manual excavation of the trenches would cause sloughing before thepipes are laid. Based on the UNDP study, the project under review was identi-fied, and appraised in December 1968.

3. The project was estimated to cost US$147 million equivalent, with aforeign exchange component of US$26 million equivalent. The objective was toprevent further farmland to be damaged by waterlogging and soil salinizationand to reverse the deterioration of land already affected. Improved drainagewas seen to permit not only continuation of high production but also introduc-tion of new farming technologies not possible, or profitable, otherwise. Tomeet these objectives, the project would support:

(a) the construction of 11 pumping stations on the main drains;

(b) remodelling about 1,700 km of open drains;

(c) installing subsurface field drains and collectors on some 950,000feddans (400,000 ha) of land in the delta, which were in immediateneed of these works;

(d) providing the necessary infrastructure, equipment (mainly tilelaying and tile making machinery) and vehicles to execute projectworks, and maintain them after completion; and

(e) financing consultancy services for management, training and tech-nical assistance.

An amount of US$500,000 equivalent was provided to assist the agriculturalextension service with vehicles to give them better mobility and access tothe farmers, thereby enabling the earlier exploitation of the improved growingconditions. The IDA credit of US$26 million equivalent would be spent entirelyon purchases abroad and on consultancy services, leaving local cost financing,an estimated 82% of total project costs, to Government resources.

4. Project execution ran far behind schedule and completion took notthe expected six years, but ten. One of the reasons was the 1973 war and itsinevitable influence on the allocation of manpower, and on financial resourcesand priorities. However, there were also serious organization and managementproblems. The project was eventually completed in December 1980 instead ofDecember 1976. In spite of this delay, cost estimates proved remarkablyaccurate when general cost escalation rates are considered: foreign exchangecosts were about US$24 million (92% of appraisal estimates) and local costs,US$175 million (150% of appraisal estimates). The cost overrun of US$59million equivalent was borne by the Government of Egypt.

5. The project's economic rate of return (ERR) is difficult to estimatebecause of the inadequate arrangements made under this project properly tomonitor yield responses to drainage. However, the audit accepts the PCR'sestimate of a 25% ERR - if the project life will indeed be 35 years. The factthat no gravel envelope was used with most of the pipes may, in some areas,reduce the expected life of the buried drains (see Section D, para 23).

6. After a difficult start - aggravated by external circumstances -the Egyptian Public Authority for Drainage Projects (EPADP)!/ has become afairly efficient organization. It is currently executing three Bank-supporteddrainage projects in Upper Egypt and the Delta of about 1.2 million feddans(over 500,000 ha) far exceeding in size any other single river basin drainageproject in the world. Its ancillary organizations, the Drainage ResearchInstitute and the Soil and Water Research Institute, when judged in the con-text of the problems facing them, are also well established and coping with

1/ This is the present name of the organization. All references applyequally to the organization operating the project before EPADP wasso named in 1973.

their task. The major issues, arising out of the project and the Bank'sperformance as seen by the audit mission, are discussed below; they pertainmainly to the Bank's performance in project planning and supervision and donot question the overall results and benefits.

II. MAIN ISSUES

A. The Use of Consultants

7. Under the project, the Ministry of Irrigation was expected to engageconsultants to assist EPADP with the management and execution of the project.The issue became a condition of project effectiveness - and caused a delay ofover five months. During negotiations, the Government of Egypt agreed to thiscondition only with the greatest reluctance. They believed then - and, asexplained by the Chairman of EPADP_/ to the audit mission - still do, thatan engineering organizatLon that operates, and has operated for many years,the oldest controlled irrigation system in the world, does not require perma-nently attached outside advisers. The provision of consultants was alsoquestioned by one of the Executive Directors (ED) when the project was pre-sented to the Board for approval. The Bank's point was that the project underreview required the resolution of technical issues in which Egypt's Ministryof Irrigation had little or no experience. Even more importantly, the pro-jected rate of implement:ation, if the objective of completing all drainageworks in 30 years was to be met (para 2) would have to be between 150,000 and240,000 feddans (65,000 to 100,000 ha) per annum, an output never beforeachieved by any one drainage authority. Therefore, the Bank believed thatEgypt needed additional expertise for organizing and managing this largeoperation.

8. During negotiat:ions, the Bank was able to prevail upon EPADP that aresident consultant team was necessary and a consulting firm was engaged inDecember 1970. But bec:ause of the Government's reluctance to make use ofthem, they were isolated, largely ignored27 and not allowed to be involvedin the mainstream of project execution; this occurred despite the fact thatofficial and personal relations with the authority, throughout their tenure,remained correct. The consultants' influence on the project - through nofault of their own - was therefore marginal. When their contract ended inMarch 1973, no other resident project consultants were engaged.

1/ The present Chairman was appointed in November 1981, shortly before theaudit mission's visit. However, in different capacities, his associationwith the project goes back for several years.

2/ The Borrower in his comments points out that no complaints were receivedfrom the consultants that would have indicated that they felt ignored.

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9. The EPADP's peformance however reconfirmed the Bank's view thatadditional expertise to help organize and manage a project of this magni-tude was necessary. Therefore, in the three follow-on projects, the Bankcontinued to insist through Loan Agreement covenants - but no longer asconditions of effectiveness - on engaging resident consultants, for "...theoverall planning of works, land reclamation, water management and agricul-tural extension services, and design of pumping stations" (SAR 80a-UAR,Upper Egypt Project, May 23, 1973, para. 4.09). These consultants were notengaged. Therefore, when the Upper Egypt Drainage II project was appraised(SAR llll-EGT of May 27, 1976), no further funds were required for consul-tants, but their engagement was again made into a loan covenant. Theirenvisaged role was to render "advice and assistance in overall planning andcoordination of project works; ...the pre-design surveys and investigation;...water management and reclamation of saline and alkaline lands; ...mainte-nance of tile drainage and in the organization of the maintenance units;"(Annex 5) the very role to which the Government of Egypt objected when theproject under review was negotiated. The allocation in the Upper Egypt Iproject was not used by either of the two Upper Egypt projects so that whenthe Nile Delta Drainage Project II was presented to the Board in July 1977,no funds had to be allocated to finance consultants to provide expertisefor the manufacture and laying of plastic drain pipes.

10. While the audit at this stage is not directly concerned with theevents relating to the three follow-on projects, they are significant tothe extent that they follow directly from the Government of Egypt's standduring the negotiations of the project under review. EPADP pointed out duringnegotiations of the Nile Delta II Project that they recognize the need fortechnical assistance in project design and management, and are receiving itfrom the High-Level Dutch-Egyptian advisory panel, the services of which havebeen provided under a bilateral Dutch Technical Assistance Project since1975. The panel convenes once or twice a year to review progress and problemsthat arise. Dutch technical assistance has been providing resident experts(para 15), some of whom are design and construction specialists. This teamworks with the Director of the Drainage Research Institute (DRI) and notdirectly with the Chairman of EPADP or the heads of EPADP's main divisions.!/The arrangements seemed to work well: working relations were good and theteam was actively involved in technical and design aspects.

11. The Chairman, in discussions with the audit mission, pointed tothe excellent relations between Bank supervision missions and the Authority,which, he stated, have never been otherwise. In his view, technical andmanagement expertise over and above that provided by the High-Level Panelshould have been provided by supervision missions. Since it is not possiblefor the Bank to include in supervision teams at all times all specializedexpertise that may be required, in the audit's view EPADP should have been

1/ The Region points out that EPADP's performance continues, in their view,to support the original contention that the Authority would benefit fromthe services of a management consultant.

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prevailed upon to finance, out of the credit, visiting experts who couldhave cooperated with the supervision missions and provided them with somenecessary backup. Later during project implementation the Bank did include,at its own expense, such specialists, whose contributions were much appre-ciated. EPADP indicated to the audit mission that they would willingly havepaid for specialists as long as their role remained advisory and they werenot seen to direct project execution, and were not resident specialists.l/

12. Obviously, whether the approach described would have been successfulis by no means certain; what is certain, however, based on experience andthe emphatic statements sl:eadily repeated since 1969, is that resident consul-tants are not acceptable in a management function. Therefore, in the projectunder audit, and certainly in all later projects, a different approach, fullyacceptable to the Ministry of Irrigation, should have been tried. If thenthis agreed approach proves not successful, it may well become easier torevert to the Bank's original plan of resident consultants attached to theimplementing divisions of EPADP.

B. Project Financing and Utilization of IDA Funds

13. The credit was to finance only the foreign exchange component ofthe project. This was estimated at 18% (US$26 million out of US$147 million);it eventually turned out to be 12% (US$24 million out of US$199 million).This relatively small IDA participation in total project costs was noted byone of the Executive Directors during Board presentation; he was advisedthat the reason for the small IDA share was due to shortage of funds at thetime. In subsequent projects, Bank/IDA participation was, proportionately,about double (in two cases, along with USAID and KfW2/ parallel financing).The question remains whether it would not have been wiser to reduce the scopeof the project and the time targeted for its execution, but not the amount ofthe credit, and contribute also to some of the local costs. This would havereduced the Government's financial burden, would have led to speedier projectexecution and assured IDA more leverage on technical and operational issues.

14. A further, more serious issue is the fact that about US$2 millionequivalent remained undisbursed and were cancelled, yet little equipmentfor the cleaning of the lateral drains was ever purchased (US$18,000 againstappraisal estimate of U:S$200,000) and the US$0.5 million, allocated to thepurchase of equipment for the agricultural extension service (see para. 3above), also remained unused. The balance of the savings, about US$1.3million, was due to prudent purchasing and tendering procedures. The needfor maintenance equipment, despite the disappointing results of the early

1/ The Region points out that under the bilharzia control component of thetwo Upper Egypt projects, which are managed by the Ministry of Health,the project pays for the services of the bilharzia control consultantwho visits the project once or twice a year.

2/ The West German foreign aid agency (see Abbreviations).

trials, was always manifest, and was repeatedly pointed out by supervisionmissions. The delayed purchase (now to take place under the follow-on proj-ect) may well have contributed to lowering the project's benefits, alongwith the often less than adequate maintenance of the open collector drains.

C. Determining Project Benefits

15. In common with all Bank/IDA projects appraised in the late 1960s,the project contained no monitoring and evaluation component; this omissionwas rectified in subsequent projects. Information on the benefits of drainageis now available from six different sources. The audit does not have suffi-cient information to comment on the reliability and accuracy of these indi-vidual sources. However, all of them give some very positive indications:

(a) the many farmers interviewed by the audit mission stated quiteunequivocally that their yields have improved; a few indicated thatrice yields did not improve with drainage but they were farmers whoalready harvested around 6 tons/ha. Several were able to bringpreviously abandoned land back into cultivation and could grow cropslike potatoes and suyarcane for direct consumption which was pre-viously not possible.-' The farmers' recollections, in discussionwith the audit mission, indicated percentage yield increases asfollows (average of all interviews):

Wheat 60 Cotton 70

Maize 77 Rice 45

Berseem (Egyptian clover), a fodder crop which occupies some 80%of the land during winter, was said to yield "much better": farmersdo not weigh their fodder since it is not sold and is harvested overan extended period, unlike other crops.

(b) The Evaluation Section of EPADP has reported the following data!/resulting from seven years' observation, comparing drained withundrained areas (in percent increase):

1/ For further discussion of this issue, see paras 29 and 30 below.

2/ There are no sugarcane mills in the Delta.

3/ Analysis of the Crop Yield Evaluation in Some Drained Areas, June 1981.

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Average Range

Wheat 12 15-11Cotton 15 19-11Maize 19 23-11Rice 10 No time series

data reported

(c) The Soil and Water Research Institute shows the following results:-/

(i) increase over (undrained) control with different spacing oflaterals, for cotton (in percent increase):

12.5 m 6725 m 3850 m 29

For wheat, berseem and rice, the Institute only revealed to themission the range of yield increases (figures in percent increases):

Wheat: 2 to 28Berseem: 18 to 61Rice: 7 to 64

(ii) from another experiment, testing different buried pipe materialsand envelopes, the following results emerge (percent increaseover control):

Year of Installation One Year Later

Cotton 107 103Wheat 53 _

(d) The "crash program" by DRI which was part of Dutch technical assis-tance (para .IO) gave the following information, over two years(figures show percent increases).

The detailed paper describing these experiments, presented in a seminarin December 1981, was not made available to the audit mission.

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Year 1 Year 2

Berseem 36 18Wheat

grain 5 19straw 36 31

Maize +35 -35Cotton -29 -45

(e) UNDP investigations of the 1960s show "that yield increases, withoutadditional inputs, of at least 20% can be expected in the main cropsgrown following tile drainage, provided that the drainage systemsare maintained in good working condition without blockage or silt"(SAR No. PA-12a of October 14, 1969, Annex 1, para. 8).

(f) Time-series data provided by EPADP refer to four districts, two withand two without drainage, and span six years. The trend over timeis mixed: down on wheat and up in cotton, maize and rice in theundrained districts; up on wheat and cotton and unchanged in maizeand rice in the drained district. The differences, however, areequally accountable by the different attention to detail of culti-vation and inputs. However, comparing drained with undraineddistricts, the average percentage change in yields is as follows:

Wheat +7 Maize -8Cotton +7 Rice +4

16. One major omission in all the foregoing studies/surveys is lack ofinformlation on groundwater levels or on electrical conductivity (EC) of thesoil._

17. Thus, it is almost impossible to be precise about the benefits ofthe project as implemented,2/ although benefits due to drains, properly con-structed and well maintained, in areas clearly and demonstrably in need ofdrainage is obvious (see para 15 (c) above). It is equally difficult to bespecific on the "without-project" picture (para 15 (b)), since areas not yetdrained presumably were deferred because they were less in need of it. How-ever, based on the interviews with farmers and EPADP's data (para. 15a andb), the project was undoubtedly beneficial, and for farmers whose land wasdefinitely in need of drainage, it might well have been very beneficial indeed

1/ Except for "crash program."

2/ The Borrower in his comments draws attention to the fact that this ismainly due to the lack of a well-defined methodology.

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(para. 15 (c) and (e)). It is equally clear that the areas to be drained mustbe carefully selected: in this connection, the flexibility slhown in amendingthe actual project area is most laudable (PCR, para. 4.11 and Annex 5). Theaudit, therefore, accepts the recalculated ERR (PCR, para. 7.11) since eventhe least favorable of tbe investigations related in para. 15 conforms to thecriteria set out in PCR, para. 7.12.

D. Design and Construction

18. Design - Depth and spacing of laterals. (PCR, para. 5.03). Agenerally accepted agronomic finding is that for obtaining maximum yields ofannual - and also many perennial - crops, the watertable has to be about 1 mbelow the surface if non-saline and about 1.60 m if saline.!/ Also, thatthe soil should return to field capacity within the root zone not later thanthree days after irrigation. In most places, except near the north coast,the groundwater is non-saline. Near the coast the main crop is rice whichtolerates higher salinity than other crops. Therefore there is no reason whysalinity and waterlogging should be a limiting factor to obtaining maximumyields after drainage works that meet the foregoing criteria have been com-pleted. The depth and spacing of the laterals must be such that, given thehydraulic conductivity of a particular soil - (which will largely, but notentirely, depend on its clay content) - the watertable is at least 1 m belowthe surface at mid-poini: between the laterals. Obviously, for a given setof conditions, the deeper the laterals, the further may be their horizontalseparation. In the Nile delta, the trunk drainage network would have had tobe deepened considerably and would have occupied much valuable land to allowthe laterals to be placect deeper than about 1.60 m.2/

19. The importance of horizontal spacing is shown in the investigationsdescribed in para. 15(c) above. The DRI consequently mostly advocates spac-ings between 20 m and 50 m depending on soil conditions; occasionally, theyrecommend spacings of 8() or 100 m. However, most of the construction tookplace at 40 m and 60 Dl spacings, which most probably has lowered projectbenefits in areas requiring closer spacing. The audit mission has noted somefields showing better crop growth close to the laterals than at the mid-point:an indication that spacing of the drains was too wide. Regional staff dispute

this observation.3/

20. The reason given for not following theoretical design criteria wasthat the narrower spacing at higher cost and more tile-laying machine hours

1/ e.g., Lower Indus Report - by Sir Murdock MacDonald and Partners andHunting Technical Services Ltd., 1965.

2/ In areas where land is not a limiting factor proper drainage layoutdesign is the other way round: the depth of the open drains, and,following from that., the spacing of the laterals, is determined by themost favorable engineering and economic criteria.

3/ See also footnote to para. 23.

- 10 -

per unit area would reduce the gross area on which drains can be installed.The EPADP wished to benefit the largest possible number of farmers in a givenyear, even if these benefits were less than the maximum obtainable under ade-quate spacing; they expect to return to the same area at a later date anddouble up on the laterals installed.

21. Supervision missions have questioned the rationale of this approachon grounds of costs, convenience and organization. File documents, however,indicate that until quite recently the missions failed to persuade the author-ity to install the laterals at spacings indicated by soil conditions. Thisomission may be one of the reasons why the demonstrable benefits of the proj-ect are lower than the potential indicated by the Soil and Water ResearchInstitute figures (para. 15); one other was, undoubtedly, the attention thatthe Institute has paid to water management.

22. Design - The Use of Envelope Material. (PCR para. 5.02) The DRIdesign criteria, supported by the High-Level panel are that in soils wherethe clay content exceeds 40%, pipes may be laid without any envelope mate-rial. One of the principal reasons advanced was the difficulty of obtainingthe right envelope material at reasonable cost. Perusal of file documentsindicates that the Bank acquiesced to this decision only with the greatestreluctance.

23. The audit mission does not agree with the panel's reasoning.l/American experience in tile drainage at least equals that in the Netherlands;and US experts are firmly opposed to the laying of any buried pipes without anenvelope. While on theoretical grounds the U.S. Bureau of Reclamation acceptthat an envelope may not be necessary if the soil's clay content is high,their official view is that slight errors in the gradient, even if tile-layingmachines are laser-controlled, or errors of misalignment in laying pipes,manufactured in about 30 cm units with a diameter of 10 cm, are bound tooccur. Such errors would reduce the effective diameter of the conveyancesystem and may even cause its complete blockage. A gravel envelope allowswater to escape through joints that do not match and re-enter the lateraldownstream, past the obstruction. In other words, the Bureau of Reclamationadvocates the use of an envelope under conditions when a filter may not benecessary, as a safeguard against construction errors.

24. The issue whether, and under what circumstances, a gravel envelopeis needed to act as a filter, was examined in depth by FAO in 1979. Theyconvened an expert panel of drainage engineers; their recommendations wereincorporated in a paper of drainage guidelines.!' This paper concludes that

1/ In April 1982 the panel, partly at least influenced by perusal of thedraft PPAM, has recommended that "high priority should be given toongoing research work...by DRI" on this issue (Annex 2).

2/ FAO Irrigation and Drainage Paper No. 38, Drainage Design Factors; 28Questions and Answers, based on the expert consultation on drainagedesign factors; Rome, 22-29 October 1979.

- 11 -

"in arid and semi-arid areas, alluvial soils of all textures are unstable and,

therefore, will require envelopes.... This may!! not apply to soils with ahigh clay content, but even there, field experiments have to be conducted...

before final designs are made." The reason for field experiments is that"there is presently no laboratory test to determine whether a given irri-gated soil can be drained without a drain envelope." Therefore, lack of an

envelope, and therefore not providing a filter around the pipes, may increasethe likelihood of drain blockage, increasing maintenance costs and shorteningthe economic life of the project (para 5). At present, there is no conclu-

sive evidence that this has not, or will not, occur and may contribute, atleast partly, for some of the low and inconsistent recorded yield increases(see para. 15 (d) and (f)). In the Region's view the standard of maintenance

of the open drains is also a contributory factor (paras. 14 and 30).

25. Concerning the availability of envelope material, tests in the

laboratories of the US Bureau of Reclamation indicate that the materialavailable just outside the Deltatat reasonable distances, is suitable if someof the fines are sieved out, and therefore need not be costly.

26. Considering all the foregoing, the Bank continued to recommend the

use of a gravel envelope until trials prove conclusively that under the con-

ditions prevailing in the Nile Delta the envelope is not necessary. Thesetrials are now being conducted in the Dutch-assisted pilot project; no results

are available to date. The audit mission was advised that following a super-vision mission in October 1981 which included the former chief of the drain-age division of the Bureau of Reclamation, EPADP is now finally convincedthat a gravel envelope is necessary with plastic as well as concrete pipes,

and advised the mission that in the future they propose to use it. Only the

future performance of the drains, installed under this project, will answerthe question whether the Bank's - most reluctant - acquiescence of laying the

pipes without an envelope did not cause more damage, in monetary terms, thanthe construction cost savings of omitting the envelope.

27. Construction. The audit mission has noted that the hydraulic exca-vator used to dig trenches for collector pipes was also used to backfill thetrenches when this backfilling was not done by hand. Using again the experi-

ence of the U.S. Bureau. of Reclamation, it is more economical to backfill witha small bulldozer. Th.Ls bulldozer can most usefully assist the heavy machineby levelling small field bunds and generally to prepare the ground for the

heavy, slow and expensive excavator, thereby enabling it actually to dig

trenches all the time. Had this been done, unit area costs would have beenlower and output per expensive excavator higher. Regional staff, as well as

EPADP have advised that backfilling is more often done by hand labor thanwith the use of machinery and the operation observed by the audit mission wasan exception.

E. Operation and Maintenance

28. Originally, maintenance of the drainage system was in the hands ofthe Irrigation Department. Partly due to the Bank's request, EPADP took over

1/ Underlining by FAO.

- 12 -

responsibility for maintaining all buried drains in 1977, and the open drainsexcept the main carriers, in 1979. The Irrigation Department continues tomaintain the major drains, for which the same equipment and organization isneeded as for the irrigation canals. The pumping stations are operated bythe Mechanical Section of the Ministry of Irrigation.

29. In an attempt to clear and de-silt the buried pipes effectively,the Region advises that the Irrigation Department, while they were stillresponsible for drain maintenance (para. 28) have tried using flushing equip-ment. They then reported that the trial was unsuccessful, possibly becausethe force of the water jet was dissipated in the wide pipe joints. The useof flushing equipment for cleaning and desilting drain pipes is standardpractice and therefore the Bank continued to recommend (see supervisionreport of May 13, 1977) that such equipment be bought. However, they wereunable to persuade EPADP to do so. This fact is all the more regrettablebecause some US$182,000 allocated for maintenance equipment remained undis-bursed; only US$18,000 of it was used (see para. 14 above). Maintenance atpresent consists of manually cleaning the manholes where the laterals jointhe collectors, and testing the pipes for blockage with drainage rods. Anyblockage found in many cases cannot be removed without excavating the drainand cutting into the section.

30. EPADP purchased three different flushing units in the second half of1981 and is testing them to determine which design to choose. These tests aregiving, as expected, positive results. While such trials are completelyacceptable, the Bank should have prevailed upon EPADP to start them severalyears ago. By now a complete set of flushing and other appropriate drainmaintenance equipment should be available to all the district maintenanceunits. The lack of capacity to rectify any blockage rapidly and effectivelymay also be a contributing cause to the apparently low overall yield increasesand has also given rise to exaggerated criticism and belittling of the bene-fits of the entire program../ However, as mentioned earlier, delayedmaintenance and clearing of the open collector drains, for which both theequipment and the technology is available, may also be a contributing cause.

1/ Evaluation of the Economic Feasibility of Tile Drainage Project in theArab Republic of Egypt - by Dr. Hassan Aly Khedr (Ph.D. thesis preparedin 1978).

MINISTRY OF IRRIGAI'ION - 13 -

WATER RESEARCH CENTER

DRAINAGE RESEARCH INSTITUTE Annex 1

13 Giza Street - Giza Page 1

A R E.

COMMENTS BY THE MINISTRY OF IRRIGATION

Our Ref No. .. 9.-J g1g . / . o.2. Director OfficeTel. 897054

Date May 9, 1982-

Mr. Shive S. Kapur,Director, operations Evaluation DepartmentThe World Bank1818 H. Street N.W.Washington D.C. 20433, U.S.AU.S.A.

Re: Project performance Audit Report on Arab

Republic of Egypt. Nile Delta Drainage

Project I ( Credit 181 - U.A.R.

Dear Mr. Kapur ,

This is in reference to your letter dated 17 March 1982 Con-

cerning the above subject .

Enclosed please find my comments and some of my suggestions

with my best reclards.

Sincerely yours,

Dr. Mohamed H. AmerDirector

c.c : Mr. Elsheikh Abd Elrahman

MINISTRY OF IRRIGATION - 14 -


DRAINAGE RESEARCH INSTITUTE Annex 113 Giza Street - Giza Page 2

A. R. E.

Our Ref No. :.......... . Director Office

D ate ........................................ ....... ................... 0 5 4

It was mentioned in paragraph 8, page 5,that the consultants

were isolated because of the reluctance of EPADP and they were

igrnored.

- I think this is not true to this extent . I was working with

EPAD at that time as a technical officer at the Chairman office.

I did not notice any complain from the consultants side, and

if there is a complain, then the duty of the consultant firm is

to report to the chairmans office in writing which was not the

case.

The approach of visiting experts that cooperate with the Super-

vision mission should be kept advisory. However visiting experts

should be confined to advice and analysis of the existing pro -

blems. Each problem should be treated separately and better

ways and means should be presented by them. Therefore generality

of visiting experts should be confined to study specific problems

of course very highly qualified visiting experts are appreciated.

B) Project Financing and utilization of IDA funds

- From the report paragraph 13 and 14 , it is clear that cleaning

equipment was not purchased. To my understanding EPAD has no

experience with these cleaning equipment. The solution was that

few machines should have been tried and tested and Training

should take place. In this case it would be easy for the Bank

supervising missions to insist on purchasing such cleaning equip-

ment .




13 Giza Street - G3iza Page 3

A. R. E.

Our Ref No. ........N.. . Director Office

D ate . ........................... ..... ... . .... . ........... T el. 897054

- It is rEaly not clear to me wherether EPAD delayed the pur-

chase of such cleaning equipment or whether there was some-

thing else, in any case I agree fully that these equipment

should be purchased and tested from the beginning of the

project. The visiting missions could have played an effective

role in such situation.

C) Determining project Benefits.

In paraqraph 17. it is stated that : it is almost impo-

ssible to be precise about the benefits of the project .....

- This pa:?agraph is misleading to any reader especially who

are not familiar with the subject . In fact the contraversary

between different results is due to lack of well defined

methodology as accepted to every body, beside lack of detail

investigations on both soils, groundwater , crops and water

managemrant conditions.

But the practice of this evaluation as given here is a

very good exercise to show the benefits of the drainage . In

future measures should be considered to have very well

established methodology and I think this as going now to take

place w.ithin DRI. future plan in cooperation with the other

institutes.

D) Design and Construction

The question of installing drains to the spacing indicated

by soil conditions is a very important one. My personal view

is that I am in favour completely with the spacing as obtained

as a result of soil parameters.



DRAINAGE RESEARCH INSTITUTE Annex 113 GIza Street - 3iza Page 4

A. R. E.

Our Roef No. : .........- ... .. Director Office

Dale ... Tel. 897054D a e ........................................ ............................. T e . 8 7 5

But we should ask ourselves also about the suitable theory of

obtaining the spacing between drains applicable under Egypt

conditions . EPAD is still using the steady state concept

which is not true under Egyptian conditions, secondly the soil

parameters which are obtained are questionable. Therefore I

would like for the missions to stress on the suitable and the

best means of Investigations to find out the spacing rather

than the argument of using spacing of 4Q - 60 meter which is

different from the theory.

The theory and the parameters which are used are not

quite valid . So it is not only the spacing which should be

questioned but the creteria under which the spacing is obtained

which should be subject . The supervision missions should look

further to this matter.

The supervising missions should continue persuade EPAD

of the benefits of installing the drainage system according to

the assigned best possible creteria and theory and not on the

basis of initial investement costs.

Design the use of Envelope material.

- My own personal views are to use gravel envelopes under Egypt

soil conditions.

However DRI is following the panel reasoning - DRI is

at present launching a program of Investigation which will give

right conclusion to this subject .




13 Giza Street - Gi:ra Page 5

A. R. E.

Our Ref f o .N ...... Di-.-.--.--.-.- .... Director Office

D a t e . ........ ........ .......... .... -- - .. Tel. 897054

The project completion report

Art. 7.12 page 24 . Concerning the project Economic rate of return.

The statement : In conclusion it would seem that despite all

the administrative problems, it has been an excellent economic in-

vestement for the nation :

I think this is a very true, highly appreciated statement

The conclusion as stated in Art - 9.01 is self truly explanatory.

- The rate of installation achievement as stated was 141,000 feddan.

should be reviewed and modifications for planning and realoca-

tinq the number of machines should be reviewed. The rate of

progress carn be improved definitly .

In Art. 9.08 page 27. It is clear that there is a need for

more analysis of the impact of drainage on water table levels.

- I think this could be achieved of funds are allocated within the

project funcds to be available for local Research organizations

as separate contract . DRI and soil and water institute could

undertake this responsibility . The availability of funds could

overcome the difficulties which was mentioned in the report

concerning the economic evaluation analysis .

One important point which should be considered is Training.

The on - corning projects should have allocations for Training for

local staff both inside and outside Egypt .




13 Giza Street - Gize Page 6

A. R. E.

Our Rof No Di....... -...... Director Office

Date ....................................................... Tel. 897054

Training should be directed in the fields of

- Planning using new techniques such as PERT and critical path.

-organizational Management Technique .

- Investigations and design of drainage project

- Operation and maintenance.

- Training should be directed to level of senior, Junior,Engineers

and supervisors too.

- A traininq fund shoulc: be Rilocated within each project

- Another fund should also be available for DRI to tackle urgent

problems , such as gravel envelopes and Economic Evaluations.

I think this report ignored training, however the above

points of view on training could be considered.

D. Mohamed H. Amer

- 19 -

Annex 2

COIHENTS BY CHAkIU}AAN, EGYPTIAN PUBLICAUTHORITY FOR DRAINAGE PROJECTS

2 a W4_2 . K,J : L r - ":!li ' r^,/,F

,.t. SHIV KAPUR, DIT ECTORJ -Ocn7ATI0iTh CJVALUTIGOil DEPARVTMENT:

APC WIV ATE \VRY SUCH RICE lVINA3 YG'JF- LLTTER OF t,ARGH 17 ENCLO5$ NG

P'? JJZvT PJERFOG(iAfiC:E AUDJIT REPORT i ';IL' DELTA DlRAINAGE PROJECT

i., SiJT7T$TEiZY OEDT lT 5-UA° UF 1?7,. THE 'PAFT REPORT v.Ih

&ARE_UJLY STUDIED AT THE AUTHOFRITY h; - ruUi'i) THAT M,OST OF OUR

Vkdl 'JE V iTPODUCED,- THELREI v. 0,;LY, '.iOULD LIKE TO CO MMMiET ON)'1'O I SSUES Or CRPUCItAL I;mR{JTAUC ,ZELY, THE US. Or ENiVELOPE

.(ATr'lIAL ANITUL GP.II" iTS LAST FiLETINO APPIL S2.

T'.H- rA.cLL ;;AS5 ,iUCH C01iCEfP?iE WVEIL THESE T\.J4o i SSUES AND RE MENCOM DED

HI3H PrICGrITY SHOULD EEL GIVLE TO THE Oti-GOIN4G PESEARCH !IORK

CARE,I ED OuT 'Y JDRI TO GIVE C3i]CLUS)IVE EVI DENCE OF ANY CHANGES

IF PrF.VE, Li EL iI THIS CONZEIRci.. llILL BE "LAD TO RECEIVE A COPYOF TH2E F U,AL PREGARDS. E'IG. ?i.A. i1AKHLhLOUF. CHAIRPA,

93 4 P) A DP UNT.

q4J4`)3 4 'ORLD34NI(

- 20 -

ARAB REPUBLIC OF EGYPT

PROJECT COMPLETION REPORT

NILE DELTA DRAINAGE I PROJECT

(CREDIT 181-UAR)

July 16, 1981

Agriculture Division IVEMENA Projects Department

- 21 -

ARAB REPUBLIC OF EGYPTPROJECT COMPLETION REPORT

NILE DELTA DRAINAGE I PROJECT(CREDIT 181-UAR)

I. INTRODUCTION

1.01 This completion report for Nile Delta Drainage I Project the firstphase of a multi-stage drainage program in Egypt gives a unique opportunityto record and evaluate the performance on the first project in the largestsingle tile drainage program ever undertaken in the world. The projectprovided the first Pubstantive financial support to the Government of Egypt(GOE) policy of providing improved drainage throughout most of the nearlysix million feddans /1 of the historically irrigated area ("the old lands")in the Nile Valley below the newly completed dam at Aswan. The projectaimed to provide field drainage to some 18% of this area and, following thepattern set by this project, the Bank extended its participation in thedrainage program by financing three similar projects involving threecredits and three loans totalling $152 million. The four projects togethercover improvement of surface drains in about 2.56 million feddans and

installation of tile drains in 2.16 million feddans (about 40% of the oldlands irrigated areas). Annex 2 presents salient features and presentstatus of each of the three repeater projects. The project and itssuccessors has also attracted significant amounts of aid from other donors,including USAID, KfW, thE Netherlands Government and the World Food Program.

1.02 This credit, thE first in the vital agriculture sector, alsoresulted in the resumption of Bank group lending operations with Egyptafter nearly eleven years, following the only previous Loan (234-UAR) ofFY60 for $56.6 million for the Suez Canal improvement. The Credit 181-UARfor $26.0 million was signed on April 17, 1970, and became effective onDecember 22, 1970. The Closing Date, originally December 31, 1976, wasextended three times to December 31, 1980. On this date, the installationof field drainage, an activity critical to full completion of the project,was accomplished in 947,000 feddan out of the 950,000 feddans originallyplanned. The final disbursement from the credit was made on March 5, 1981,bringing the total amount: disbursed to almost $24.0.

Agriculture Sector Setting

1.03 Agriculture continues to be the principal sector of the Egyptianeconomy, although it has been declining in relative terms with the growthof industry. Between the! 1969 appraisal and the date of project completionagriculture's share of total employment has fallen from 47% to 39%, itsshare of GDP has fallen from 27% to about 22% and its share of direct andindirect non-oil export earnings from about 80% to 70%. The agriculturalsector has faltered in the last decade, as evidenced by the fall in theaverage annual growth rate of around 3% in the 1960s to below 2% in the1970s. Population (currently estimated to be 42 million) has continued toincrease at an annual ral:e of 2.6% and rural to urban migration has

/L Or 2.4 million ha. 1 feddan = 0.42 ha.

- 22 -

accelerated. This population increase, together with massive infusions ofmoney repatriated by Egyptians working abroad has increased consumerdemands for more and better foods far beyond the ability of agriculture tosupply. The production of controlled crops, mainly wheat, beans, lentilsand cotton has been depressed by GOE controls over input distribution andoutput marketing and associated pricing policies. Imports of keyfoodstuffs have increasingly been required to complement domesticsupplies. During the same period the value of agricultural exports (mainlycotton) stagnated, leading to a widening trade deficit in agriculturalcommodities. Therefore, the fundamental underlying challenge facing theGovernment is to bring about changes in technology, institutions, policiesand of necessity, improving drainage, for increasing the rate of growth inagricultural production.

Land Constraints and Importance of Improved Drainage

1.04 Good land for crop production is scarce in Egypt and developmentof desert/saline marshy lands identified by GOE for reclamation is costintensive with lengthy gestation periods. Therefore, the main source ofincreases in agricultural production in the short run must be the old landsin the Nile Valley. On these lands productivity is still constrained eventoday by inadequate drainage in about three million feddans. The prioritythus lies in continuing, and to the extent possible, accelerating thedrainage program under which some 1.5 million feddans had been equippedwith tile drains by the end of 1980. This is readily justified since noinput package to increase production will be fully successful until thedrainage constraint has been removed. While there is little evidence thatland is going out of production as a result of salinization caused by highgroundwater levels, it is clear that rising soil salinity in some areas iscausing yields to decline (see para. 7.06).

1.05 Fully aware of this stark reality, the Government has given highpriority to the tile drainage program in recent years. During the fiveyears ending 1979, the capital expenditures on all irrigation and landreclamation activities in Egypt totalled £E 400 million (US$580 million).Out of this, drainage alone accounted for EE 184 million (US$267 million)or 46%. Annex 1, which shows the Ministry of Irrigation's budget,indicates that over the same period the drainage projects consumed 53% onaverage of the MOI's capital funds. The MOI current planning is tocomplete all on-going projects covering about one million feddans by1983/84. Draining the remaining two million feddans is likely to taketill 1990.

Bank's Agricultural Lending

1.06 Since 1970, the Bank has financed ten projects in the agriculturalsector in Egypt. Initially the Bank's policy was to encourage Governmentto maintain and increase production levels in the old lands. This was donethrough the series of four drainage projects, of which 181-EGT was thefirst, and through the Agricultural Development Project (Credit 830-EGT).This is a pilot attempt to raise productivity in two governorates byincreasing the level of farm mechanization and strengthening agriculturalcredit, cooperatives and extension services. Over time there has beenfurther diversification. The Fruit and Vegetables Project (Loan 1276-EGT)

-23 -

of FY?t incluced financing for a vegetable seed farmi, completion ut the

West Nubariya Drain, credit to fruit and vegetable processors/exporters,

and associated activities. The Agroindustries Project (Credit 988-EGT) otFY80 includes financing for small and medium sized agroindustries and

replacement of municipal slaughterhouses in Cairo and Alexandria. The FishFarming Development Project (Credit llll-EGT) of FY81 includes financingfor the development of a large commercial fish farming venture in LakeMaryut and credit for smaller fish farms in other parts of the delta. TheNew Lands Development Project (Credit 1083-EGT) of FY81 marked the

beginning of a further shift in lending to agriculture, being the firstproject primarily aimed at helping the Government's land reclamation

program. It will finance the development of 24,000 feddan of desert intointensive smallholder farms of six feddan each. A Technical AssistanceCredit in FY81 will finance the establishment and training of two units torproject preparation, one in the Ministry of Irrigation and one in theMinistry of Land Reclamation.

Information Sources

1.07 This report has been prepared by consulting Bank files as well asMOI records on drainage of0 irrigated lands and on project specificstudies. Discussions with the Bank staff and MOI officials, associatedwith the project at various stages, were helpful in distilling views oncertain events. The Egypt:ian Public Authority for Drainage Projects(EPADP) /1 in various fornms has been responsible for planning, design andconstruction of the project. EPADP had agreed with the September 1980

supervision mission to present its views on the project, but its report wasnever prepared. As a result, the views of EPADP are only indirectlyreflected in this Completion Report.

II. BACKGROUND

2.01 Egyptian agriculture has historically been blessed with Nilewaters which both contained very low concentration of salts, and annuallyflooded the Nile Valley thus flushing salts from the soils. Salinity was

thus never a problem. With the gradual introduction of large scaleperennial irrigation from the beginning of this century the natural systemof drainage was lost. Today, as a result of several decades of perennialirrigation, a rather high water table has gradually developed with

consequent rise in soil salinity and reduction in plant production.

2.02 In order to prevent deterioration of the soil, an open drainagesystem was constructed, beginning in the northern part of the Delta aroundthe turn of the century and, over the years, being extended to other partsof the country. By 1965, nearly five million feddans were covered withopen drains. However, farmers did not fulfill their responsibility to

connect each plot with drainage channels, mainly because they could notafford to lose the 10-15% of area that would have been occupied by these

ditches. Accordingly, the drainage system was neither complete noreffective enough to have any significant control on the water table in claysoils. The efficiency of

/1 Set up in 1973 by merging Nile Delta Drainage Authority and theEgyptian Authority for Drainage Projects.

- 24 -

the system was further constrained by inadequate maintenance. Therefore,inadequate drainage of the soils increasingly became the single mostimportant limiting factor in crop production.

2.03 As the land slopes only slightly, the operation of the drainagesystem required the installation of pumping stations. The number of suchstations increased steadily, from 18 in 1934-35 to 52 in 1964-65, of which35 were located in the Delta.

2.04 Recognizing the inadequacy of the conventional methods, researchwas initiated in 1938 at 15 experimental stations to try out covered tiledrainage systems in different parts of the country. By 1952, pilotprojects were extended to an area of approximately 50,000 feddans. Also inthe same year, the MOI organized the "Drainage Research Bureau" forcarrying out research on groundwater flow problems and on technical cumeconomic studies related to tile drainage. This Bureau was later renamedthe Drainage Research Institute(DRI).

2.05 Encouraged by the results obtained with tile drainage, a law waspassed in 1956 giving the responsibility for the execution of fielddrainage to the Government. An ambitious 30-year program to cover all theareas under perennial irrigation with tile drains was also drawn up.However by 1965, as a result of resource constraints, including scarcity offoreign exchange, only about 300,000 feddans had been tile drained.

2.06 Between 1961 and 1965 modern techniques of tile drainage werestudied and tested through a pilot project covering five areas, each up to2,000 feddans implemented under the auspices of the United Nations SpecialFund with FAO as the executing agency and ILACO from Netherlands employedas consultants. The purposes of this project, determining the technicaland economic viability of tile drainage under conditions prevailing in theirrigated lands of Egypt and identifying issues on which further researchwas needed, were largely achieved.

2.07 The final report /1 on the UNDP Project defined the task of theDRI as "to try out new methods of investigation, construction andmaintenance." However, DRI's research on many of the important technicalissues recommended in the FAO report has been limited. Reliable orconclusive answers to many of these aspects are still lacking, andconstitute a weakness of the drainage program. Of particular significanceis the lack of any monitoring of groundwater fluctuations and groundwatermovement in irrigated areas, the lack of measurements of piezometric levelsin drained areas or of discharges from collectors.

2.08 In 1964 a joint committee of the MOI and the Ministry ofAgriculture (MOA) studied the effect of tile drainage on crop yields in an18,500 feddans area in the Delta where buried drains had been installedbetween 1940 and 1942. A statistical analysis showed that maize and cottonrecorded yield increases of about 32% and 35% respectively, mainly becauseof field drainage. Similar analysis carried out regarding wheat in another

/1 Pilot Project for Drainage of Irrigated Land-UAR-Final Report,FAO/SF:30/UAR-1967.

- 25 -

aLc3J iaila LOCaLcU LU Llik Delta, showea avera6e yield increase of about2/X. flnebe results strengthenea the views of tne MOI to provide tile

drainage in much of the irrigated lands.

2.09 The commissioning of the HAD in 1968 brought both developmentopportunities as well as challenges. Relevant to irrigated agriculture,the HAD potential opened the possibility for large scale expansion ofperennial irrigation area. As regards drainage the large additions toirrigation water supplies deriving from the HAD were to aggravate theproblem, thus forcing GOE to take accelerated measures for counteractingextensive deleterious effects on groundwater levels.

2.10 Although the prLority attached to the drainage program greatlyincreasec after 1966 and plans for draining over one million feddans in theDelta over the next five years were drawn up, progress on the drainageprogram continued to be ,3low, hampered mainly by budgetary constraints andlack cf ecuipmert. Bvi the time the Nile Delta I Project was appraised inL968/b9, the total area provided with tile drainage was about 360,000

teddans and was proceeding at the rate of about 50,000 feddans per year.It was explainea to the various Bank missions that visited Egypt during thelate 1960s that the MOI intended to undertake an accelerated program fordrainage provided foreign exchange was available for the import ofmachinery.

III. PROJECT FORMULATION

Project Origin

3.01 The firbt hint ot a Bank-financed drainage project followed theBank Economic Mission tc Egypt, in 1966, when two of its members from theFAO/IBRD Cooperative Prc,gram recommended Bank consideration of a projectthat would include tile drains as well as the expansion of open drains andpumping stations.

3.02 The idea of a drainage project was further advanced late in 1967Dy the visit of the Director of EMENA Projects Department, in early 1968 byanother Economic Mission, and in July 1968 by a visit of the President.These contacts culminated in a Bank Agricultural Mission which visitedEgypt in September 1968. This reviewed a number of project possibilitiesfrom which a drainage project for part of the Nile Delta was chosen astirst priority. The tentative proposal agreed in this respect was toestablish 15 pumping stations in the Delta, and at the request of GOE,which was anxious not to phase or divide the MOI program, to provide for

tile drainage in 1.4 million feddans in the Delta including 460,000 feddansoutside the areas served by the 15 pumping stations.

3.03 Several technical and other questions/issues raised by theAgricultural Mission aeserve special mention because of their validity andthe fact that, even today, reliable information on many of them is stilllacking. The prominent issues included; lack of basic information onvertical drainage; inadequacy of experimental evidence to quantify theincrease in the yields of cotton, maize and wheat and GOE inability toassign benefits to berseem that covered the largest winter crop area in theDelta; and the fact that insufficient data was made available on water

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logged ana saline soils and the rate at which the affected area wasspreading; inadequate information on the pumping need; and lack of watercharges. The Agriculture Mission did not provide a comprehensive diagnosisof MOl's implementation capability and the need or otherwise forconsultants, both of which became crucial at appraisal and duringnegotiations.

Feasibility Report

3.04 On October 9, 1968, the Minister of Irrigation forwarded aFeasibility Report to the Bank for a US$172.5 million project to becompleted in six years as a part of larger 15 year Government program. Inthe letter of transmittal, a request was made for financing by IDA offoreign currency costs estimated at US$24.8 million. The main componentsof the project were the same as proposed by the Bank Agricultural Mission(para 3.02). Based on yield increases of 35% with cotton, 32% with maize,and 2-/% with wheat, the ERR was assessed at 37.8% and 34.4% in terms ofborder and farm prices respectively.

3.05 The Feasibility Report provided only a generalized justificationbased on slender evidence gathered from the proliferation of experimentalwork and studies. It failed to give specific answers to most of the

questions raised by the Agricultural Mission. The areas included in theproject appeared to have been selected on practical considerations,ignoring priority needs for drainage. The implementation schedule wasambitious, projecting completion of open drains and pumping stations infour years and field drainage in five and a half years. This schedulingwas done without relating the rate of implementation to equipment needs,and without providing adequate lead time for procurement. The schedulealso provided no tie up with the pre-drainage surveys and the preparationof designs, perhaps because of the general thinking prevailing in the MOIthat these precedent steps involved no loss of time.

Appraisal

3.06 The appraisal of the project was carried out in December 1968.The appraisal mission reviewed the basic assumptions made in theFeasiDility Report; giving special attention to the managerial capacity ofthe MOI, to the rate of implementation, and to the increases in crop yieldsanticipated with the project. The major issue revolved around themission's opinion that all construction should go to ICB against theinsistence by the MOI that the bidding for construction of open and burieddrains be restricted to quasi independent, government owned contractingfirms. In the end, the mission accepted the MOI arguments but insistedthat ICB be followed for the procurement of all pumping equipment andconstruction machinery including maintenance and training of Egyptianoperators and mechanics by technicians supplied by the equipmentmanufacturers.

3.07 Following the Appraisal Mission, the scope of the project and itsperiod of implementation were intensely debated in the Bank. As a result,the size of the project was finally scaled down to cover only 11 pumpingstations and an area of 950,000 feddans including 637,000 feddans to beserved by the project pumping stations. The period of implementation waskept at 6-1/2 years. Both these decisions were taken in order to reduce

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the risk as well as to learn more about possible increases in the rate ofimplementation before preparing further phases of the drainage program.Limiting the size of the project caused no problems with GOE, possiblybecause the curtailment from 8 to 6 years in the period of implementationdid not affect the program of the MOI or the amount of financing by IDA.

3.08 Some non-technical difficulties were apparent at appraisal. Therewas only a partial response to the mission's concern over the lack ofclosely knit organizational arrangements within the MOI. Also the MOI invery clear terms informed the mission that they would not be prepared tohave expatriate consultants supervising any of the work under the project.However, the mission, notwithstanding the views of the MOI, emphasized thebenefits of strong unified management supported initially by the bestadvice available on managiement techniques. On both these issues, theGovernment was advised before negotiations that its negotiators should beprepared to reach necessa 1, agre_.,ents.

Negotiations

3.09 Negotiations took place between September 8 and October 3, 1969.The two principal issues were how to give the project organization adequateauthority and the employment of outside consultants. The first wasresolved with the presentation by the Egyptian delegation of a draftPresidential Decree for the establishing of the Nile Delta Authority forTile Drainage Projects (NDDA), as a semi-autonomous body within the MOI.An off-shoot issue concerned pre-consultation with the Bank on theappointment of its Director/Chairman which was only agreed afternegotiations, and recorded in the agreed minutes. As regards hiring ofconsultants, the Borrower came to negotiations prepared to resist on thisissue, but ultimately agreed when it was softened to limit consultants'input to providing only management techniques.

3.10 During negotiations some relatively minor changes in the projectwere also agreed. The covenant on recovery of field drainage costsrecommended by the appraisal mission was revised to accord with EgyptianLaw under which land tax is levied on owners of land based on theproductivity of the land. This tax is reassessed automatically every tenyears but the law permits more frequent reassessment. Such reassessment isusually made shortly aftE!r the completion of public works that affect theproductivity of the land.. At the request of the Egyptian delegation theproject phasing was also rescheduled to permit a more gradual build up inproject implementation.

3.11 Procedural matters discussed and agreed during negotiationsincluded amendments to local construction contracts to meet the conditionsof the Credit Agreement, including utilization and maintenance of theequipment to be financed out of the proceeds of the Credit and training ofcontractors' mechanics and operators at the Authority's training centers.Auditing of the Authority's accounts and financial statements by the GOECentral Organization for Accounts and Audit was considered satisfactory.

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The Project

3.12 The primary objective of the project approved by the Bank Board onMarch 24, 1970 was to improve drainage in 950,000 feddans in the Delta at atotal cost of USt147 million equivalent with an IDA credit of US$26million. The project description incorporated in the Credit Agreement isgiven in Annex 4. The project included remodelling of some 1,700 km ofexisting open drains, construction of 11 pumping stations for evacuatingdrainage water, the installation of tile drains in 950,000 feddans ofirrigated land and the provision of maintenance workshops, storagefacilities and a training center. The IDA financing was to be usedprimarily for importation of construction machinery and pumping equipmentincluding its installation and spare parts, as well as for consultingservices. Only nominal sums were provided for procurement of equipment formaintenance and for agricultural extension services.

IV. IMPLEMENTATION

Credit Agreement and Side Letters

4.01 The Development Credit Agreement (DCA) was signed on April 17,1970, as were the three side letters. Of these, two were an adjunct to theAgreement and the third by GOE provided, as of June 30, 1969, thestatements and facts regarding its external debt. Side letters 1 and 2recorded the understandings reached in amplification of two conditions ofthe DCA, on employment of consultants and on technical staff needs forimplementation respectively.

An Overview of Project History

4.02 The agreed implementation schedule projected completion of theproject by December 1975. The Credit Closing Date was set as December 31,1976. While the project objectives remained unchanged, many eventsconspired to cause delay. The closing date was revised three times,generally to accommodate slippages in implementation. The Credit wasfinally closed on December 31, 1980, with the completion of installation oftile drains.

Effectiveness and Start-up

4.03 Of the two conditions for effectiveness, the first was met whenthe Borrower's National Assembly approved the DCA in its session of July 1,1970, and a Presidential Decree ratifying the same was published on October22, 1970. The second condition required appointment of qualified andexperienced consultants upon conditions and under Terms of Referenceapproved by the Association. In order to achieve this, four supervisionmissions visited Egypt betweeen April and December 1970. The consultants'contract was concluded and signed on December 21, 1970, and the Credit wasdeclared effective the next day, a delay of five months compared to theoriginal date of July 14, 1970.

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Construction of Project Works

4.04 In general, prcgress in implementing the project can only beviewed as poor since it took almost four years longer to complete theprincipal objectives than the originally agreed period of about six years.Of the three main components viz pumping stations, open drains and burieddrains, it was the thirc which proved the critical bottleneck to fullcompletion of the project. On the original Credit Closing Date of December3i, i976, tne completior. achieved was 73% on open drains, 86% on civilworks of pumping stations and some 49% on field drainage. Aside from thetime factor, there was noticeable deficiency in coordinating supportingactivities. The three tile-making factories only partially served theproject because they became operational only during 1976/77. The delayoccured entirely due to the slow construction of civil works since theequipment for these factories was delivered during 1974. Neither were thetwo main workshops set up under the project of much help duringimplementation sInLe they were only compl2_e-~ {n 1079. Whilp the -"oiectdid not contain unusual engineering features, it entailed a massive task ofconstruction management and logistics particularly the rate of tile

laying. It was planned to increase the amount of tile laid annually from3,200 km to 20,000 km covering 40,000 and 240,000 feddans respectively.During the course of the project, the maximum area provided with tiledrains in any one year was only 141,000 feddans.

4.05 In general, the delays were due to weaknesses in EPADP's /Iconstruction planning and management organization as well as the lowimplementation capacity of the public sector contractors. While EPADPfailea to manage the program rigorously enough, the delays largely relatedco the management weakness of the contracting organizations. They lacked,anG stilL lack, normal commercial incentives to meeting constructionschedules ana EPADP has no effective means of enforcing the conditions ofcontracts. Project progress was also affected by events not directlyrelatea to these organizations. The October 1973 war, its impact onsKilled manpower, resulting shortage of local funds, scarcity of cementsupplies and the overalL variable quality of staff available to the projectwere factors not directLy under the control of the project management or ofthe public sector contractors. Nor could some of these problems be solvedin the short run. To some extent, the farmers' resistance to destroyingpartially matured crops as well as heavy watering of the rice fieldsdisrupted smooth operatLons by the contractors.

4.06 The problems faced by the project during the first few years wereconsiderable, and requi:ced painstaking effort and persistence on the partof the Bank staff to gel: them resolved at Government/Authority level. Sixsupervision missions were mounted between April 1970 and October 1971. Theproblems reported by these missions were discussed in a special LoanCommittee meeting held Ln December 1971, following which the project wasplaced on the Problem Projects list in January 1972. A supervision missionvisited Egypt in the following month; simultaneously the Director EMENA

Projects Department discussed a specially prepared aide-memoire with the

/I EPADP was only estaiblished in 1973. Remarks here refer to itspredecessor organizations as well, viz. NDDA and the Egyptian GeneralAuthority for Drainage Projects.

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Government. This supervision mission recommended along with othersuggestions that IDA urgently reformulate the project. In December 1972, afour member mission made a comprehensive reassessment of the project, whosephysical execution by then had fallen two years behind schedule. Thismission succeeded in getting assurances from the Minister of Irrigation,the Deputy Prime Minister and the Vice President that all needed actionswould be taken soon. As a follow-up of these assurances, the EgyptianPublic Authority for Drainage Projects (EPADP) was established by aPresidential Decree in early 1973 by merging the NDDA and Egyptian GeneralAuthority for Drainage Projects. The July 1973 mission was encouraged bythe progress made with the reorganization and by filling up of all keypositions but was disappointed with inadequate allocation of local funds.

4.07 A possible and partial solution to the situation prevailing duringthe early seventies could have been for EPADP to make more extensive use ofthe consultants. However, efforts made by the supervision missions topersuade EPADP to do this had no success mainly because the Authority wasunwilling to share any management responsibility. Thus, when theconsultant's contract expired in March 1973, it was not renewed.

4.08 As a result of the October 1973 war, there was relatively slowprogress during 1974. As of October 1974, roughly 40% of the originallyestimated disbursements had taken place and only about 26% of the tiledrainage had been completed. The project by then had fallen three yearsbehind schedule. Thus the project remained on the Problem Project list fora period of over three years beginning with January 1972.

4.09 Annex 7 presents the construction schedule agreed duringnegotiations for the three major components, those revised from time totime for installation of tile drains and as actually implemented. Thispresentation shows that slippages occured on every schedule for tiledrainage. While EPADP construction planning and control continued to belacking in certain respects, a greater part of the responsibility must beapportioned to the inadequate construction management by the contractingagencies.

4.10 The options available to the Bank staff to do anything about thissituation were, however, limited, because IDA had very limited leverage forinterference with the working of the public sector contractors. In spiteof constant follow-up from Washington, project progress remaineddisappointing. One supervision mission even suggested posting a residentmission in Cairo. However, it was realised that the distinction betweenproviding technical assistance on a day-to-day basis and taking de-factocharge of project management would be difficult to maintain and could evenincrease Egyptian resistance to outside interference. It became clear thatdirect control over project activities and decisions had to be theprerogative and the responsibility of the local EPADP staff, and that Bankstaff influence could at best be indirect. Few new alternative courses ofaction were therefore available to the Bank to bring about a faster rate ofimplementation. When opportunities presented themselves, however, actionwas taken. For instance, when shortages of local funds continued to remaina significant delaying factor the Bank, apart from constantly stressing the

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need for adequate funding to the Minister, inserted a covenant into the

next drainage project (Nile Delta Drainage II) requiring the Government to

establish a Special Fund ifrom which EPADP could draw without restrictionfor implementing all IDA/]Bank financed drainage projects. Another instance

was in 1977, when shortage of cement emerged as a likely cause of delay theBank agreed to finance its import under the Upper Egypt Drainage I Project

for use in all the on-going drainage program of EPADP. This enabled EPADPto maintain its planned rate of implementation.

Revisions

4.11 During the course of the project, no changes were made in the

project scope, its objectives and basic design. However, the originalselection of the areas, a; a result of changes in the behavior of

groundwater over a period of about 11 years, had to be greatly amended fromtime to time, excluding or reducing some and substituting equivalent new

areas. It seems clear that these changes were beneficial by allowing areaswhere the more serious drainage problems were emerging to be givenpriority. Annex 5 preseni:s by catchment unit the areas at appraisal, thoserevised in June 1976 and again in November 1978, and areas in whichdrainage was ultimately improved. As compared to appraisal, the area in

the East Delta increased by 53% and those in the Middle and the West Deltaunderwent reductions of 6'% and 32% respectively.

4.12 Given the extended life of the project, the original cost

estimates and allocations for most items were remarkably accurate (seeAnnex 6). Allocations for equipment for the tile drainage construction andmain drainage remodelling (Categories I and II) were originally $13.6million. Final disbursements on these two accounts were $ll.6 million, ashortfall of 15%. Allocations for machinery, equipment and civil works forpump stations (Category ILI) were originally $6.8 million, while finaldisbursements were $8.0 million, an overrun of 18%. Allocations fortraining and consultants (Category IV) were $6.6 million againstdisbursements of $0.58 million. The largest increase was on tractors,trucks and motorcycles (Category VII) where $2.6 million were allocatedagainst $3.8 million disbursed, an overrun of 68%. This was partly the

result of a substantial i;ncrease in the number of trucks and trailerspurchased late in the project life, and partly a matter of inflation.Category V, for maintenance equipment was virtually untouched ($18,000disbursed against $200,000) allocated). In addition, the $100,000 in

Category VI (agricultural extension equipment and vehicles) was not used atall. Given these relatively minor changes, the original allocation of theproceeds of the credit was only amended twice. The first time was not till

January 1977 (6-1/2 years after effectiveness) to cater to the increased

costs of pumping stations and trucks. The second time in September 1978mainly to cover further increases in the costs of pumping stations. In theend, an amount of just over $2.0 million still remained undisbursed and wascancelled.

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Accounting, Auditing and Reporting

4.13 It was only during the initial years ot project implementationthat it was realized that the accounting system of the project organizationprovided neither an adequate account of the use of project funds nor auseful estimate of the cost of drainage. As a result of the realizationthat the in-place accounting system was inadequate and needed to bereorganized, special covenants were made in the Project Agreements forsucceeding drainage projects. This required that the Authority wouldestablish a new cost accounting system satisfactory to the Association. Inaccordance with terms of reference prepared by the Bank staff, a newaccounting system was eventually, in 1980, designed by an Egyptian firm ofchartered accountants. It is not fully operational as yet. Even toprovide the summary data presented in Annexes 6 to 10, the Authority,assisted by its accounting consultants, had to devote considerable effortto sort out actual project costs.

4.14 Auditing of the Authority's accounts and financial statements iscarried out by the Central Organization for Accounts and Audit. The auditreports submitted to the Bank for each financial year/period were generallysome six months later than the date stipulated in relevant covenant of theProject Agreement. These audits did not reveal any mismanagement of fundsalthough they did sometimes reveal certain deficiencies in the Authority'saccounts. As this system was designed for all Government agencies, Bankattempts to make it more rigorous in accordance with normally acceptablecommercial practices never met with significant success.

4.15 The Drainage Authority furnished, on a regular basis, 43 quarterlyprogress reports, generally with considerable delays. The initialreporting requirements agreed in June 1970, based on suggestions by Bankstaff, included many unneeded details. They imposed an unnecessary burdenon the Authority, which somewhat diminished their utility as a managementtool. The reporting format was improved in 1973 by eliminating unnecessarydetails and by substituting simplified summary tables. The reporting wasstrongly oriented to progress on implementation of works. It was weak onorganizational and other activities. As to the engineering works, a majorshortcoming was that no meaningful comparison was made of achievements withplanned targets; nor were comments made on major difficulties encounteredand actions taken or proposed to overcome such problems. Thus thequarterly reporting was unsatisfactory, both in content and timeliness.

Procurement

4.16 Procurement of imported equipment was arranged in accordance withIDA procedures for international competitive bidding. Initiallypreparation of contract documents proved a major undertaking. DespiteIDA's attempts to speed procurement, prior to the appointment ofconsultants, by retaining an individual consultant for a few months toassist in the preparation of documents, the time taken in preparation oftender documents and the time-consuming procedural delays in evaluation ofbids were responsible for most of the initial delays in implementation.Delays also occured in procurement of some equipment due to disruptioncaused by the October 1973 war.

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4.17 Remodelling of open drains and installation of tile drains werecarried out through contracts let out under local competitive bidding

procedures, under terms and conditions agreed with the Association.According to information supplied by EPADP, these works were performedthrough some 659 contracts of which about 159 were for installation of tiledrains. Delays in the procurement of spare parts and their distribution bythe Authority impeded efficient utilization of the equipment. Instanceswere not uncommon whereby equipment that was spare with one contractorremained idle till he was given a new contract. Accordingly, thearrangements practiced for equipment distribution ought to have beenpredicated by advance planning of contract packages and the contractorsshould have been allowed to import spare parts suiting their operationalneeds.

Final Cost Versus Appraisal Estimate

4.18 The total project expenditures as of December 31, 1980, togetherwith the estimated cost at appraisal are presented in Annex 8. Theexpenditures for local costs on various components, expressed in US dollarequivalent, take into account the parallel market rate of exchange duringeach year of project implementation, excepting 1970-73 for which theofficial rate of exchange has been used. On an overall basis, the cost inUS dollars rose by 35.4% from the appraisal estimate of US$147.0 million toUS$198.9 million. This comparison, however, does not reflect the truepicture due to the change to the devalued parallel market exchange rate forEgyptian pounds between ].974-80. A clearer picture emerges from thecomparison of local costs in Egyptian pounds. On this basis, the appraisalestimate of LE 52.7 mill-ion increased by almost 112% to LE 111.86 million.The entire local cost overrun was financed by the Government. The highincrease in local cost w.ls due mainly to inflation in the post 1973 periodand underestimation at appraisal of the cost for open drains. However,given the cost overrun, the cost of construction of drainage facilities perfeddan works out to a seemingly reasonable US$210. (See para. 7.10 forcosts in 1980 prices).

Disbursements

4.19 Actual disburseinents by half yearly semesters for the full term ofthe project are presented in Annex 9. Four years delay in completion ofthe project is reflected in the extended disbursement period. As shown inthis Annex, only about 67% of the credit was disbursed by the originaltarget date of December 31, 1976. The disbursement from the credit of onlyabout 20% in the three years following effectiveness (50% of the originalcompletion time) is indicative of the Authority's inadequate operationduring the initial years of the project. The credit was closed finally onDecember 31, 1980, cancelling the unutilized amount of some US$2 million.

4.20 Annex 10 compares the IDA financed equipment as estimated atappraisal and those actually procured, together with cost in each case.The reduction in the amount of the equipment imported for open and tiledrain construction and installation had little adverse effect on the rateof implementation because of the higher output efficiency of the imported

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machinery compared with the somewhat conservative assumptions made by theappraisal mission. While some difficulty was experienced due to inadequateinformsiLion submitted by the Authority both for approval of bid documentsand for reimbursements, IDA, in the interest of expediting matters, alwaysresponded promptly in obtaining clarifications and/or taking final actions.

Performance of Consultants

4.21 The agreement for employment of consultants as embodied in a sideletter provided for only limited manpower input; its use was furtherconstrained by provisions which restricted consultants only to givingadvice on resource deployment, logistics, management and training. TheBorrower refused to accept the necessity for retaining consultants'services in order to assist directly in project implementation despitestrong feelings within the Bank that such assistance was needed. Soonafter credit effectiveness, it became apparent that this compromise, madeto accommodate the Egyptian sensitivity to the use of consultants, was amajor obstacle to achieving project objectives.

4.22 Appointment of consultants was a long, drawn-out process.Following receipt of proposals from four firms, it took almost seven monthsto resolve some minor issues and conclude a contract with the selectedfirm. The Authority's wisdom in selecting this firm can also be questionedbecause at that time the firm had practically no experience in tiledrainage works. The Association's agreement to employing this firm wasgiven after the firm acquired the services of two specialists in tiledrainage.

4.23 The relations between the Drainage Authority and the consultantsremained polite but remote. Discords appeared only when financialinterpretations of their contract were involved or when the consultantswere asked to do something over and above that specifically set out intheir contract. Otherwise, the Authority kept the consultants somewhatisolated and their effectiveness was undoubtedly impeded. The individualmembers of the consultants team were competent, but most of them wereunderutilized. Efforts made by various Bank supervision missions failed tobring about substantial improvement. They also failed to persuade EPADP toextend the consultant's contract despite considerable efforts during theyear before it expired in March 1973.

4.24 Because of the delays which occured with procurement of equipment,the consultants staff was not able to be of much assistance in theintroduction of control methods; nor was it of significant use forestablishing monitoring procedures. While the senior draughtsman's reportwas fully adequate, reports made by the stores specialist and workshopengineer failed to lead to results which were comensurate with theinvestment of time and money involved. In general, the material availableon file provides little indication that the work of the consultants had anymajor impact.

V. OPERATING PERFORMANCE

5.01 Because the execution of this massive drainage program has notresulted in advancing the art of tile drainage technology beyond the levelalready practiced in Egypt following the UNDP/FAO Pilot Project recommenda-

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tions of 1965 (para. 2.06), the Bank retained a consultant in 1980 to

review EPADP's drainage design and procedures. He found them generallyadequate for Egyptian conditions, but did make several suggestions for

improvement.

5.02 Two features in particular deserve special attention. The firstis the fact that all pipe drains are being placed without a gravelenvelope, primarily because of the perceived high cost of proper gravel

envelope materials and increased construction time. Drains installed inhydraulically unstable soils require envelope materials. In arid and

semi-arid areas alluvial soils of nearly all textures are unstable and,therefore, will require envelopes to stabilize the soil and to prevent

sediment problems within the drain. A possible exception are soils havinga significant clay content. Field experiments should be conducted on these

soils before final designs are made. Fine textured low permeability soilsmay require a permeable envelope (sometimes called a permeable surround) to

increase drainage efficiency. It is quite probable that many of the casesof drain malfunctioning that are reported (see para. 5.04) are associatedwith the present practice of installing drains without an envelope,particularly as the envelope helps to compensate for the effects of thepoor tile laying which has been observed. Earlier, Bank supervisionmissions also found totally unsuitable gravel mat:erial being used. The

research currently beirLg carried out on this subject by DRI needs to be

studied carefully to see whether changes are needed. The general shift to

PVC pipes will also have a bearing on this decision.

5.03 The second feature is that of drain depth and spacing. The designcriteria in the appraisal report was to install the tiles at 1.4 m in order

to maintain the water depth between laterals at 1.0 m. This issubstantially less than has been found necessary in some parts of theworld, for example in wiestern USA. It is also slightly less than the

depth, quoted in the appraisal report, found necessary under experimentalconditions in Egypt to give optimum crop yields. Furthermore, whilevariable spacings of t.ile rows were visualized, depending upon soil

permeabilities, most drains appear to have been placed at a uniform 40 mspacing, under perceived advantages of time saved in preparing designs.However, the amounts by which yields may be increased or decreased by

increasing the depth oE tiles and the spacing between tile rows, and therelative economics of any resulting changes in production income and costs

and the drainage costs, are still open questions. Until recently, no

further work had been done on this matter than had been available atappraisal. However, work is now going on under the DRI program (see para.

5.07) to compare crop yields at depths of 1.2, 1.5 and 1.8 m at different

drain spacings. This should provide data needed to determine if thepresent practice is optimum or should be revised.

Operation and Maintenance

5.04 It was agreed during negotiations that the operation and

maintenance (O&M) of completed drainage systems would remain theresponsibility of the MOI Maintenance Department outside the purview of the

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project. Under this arrangement, the O&M left much to be desired duemainly to inadequate allocation of funds, lack of equipment andorganizational problems. In order to improve this situation, IDA obtainedGOE agreement to transfer responsibility for O&M of surface and sub-surfacedrains in tiled areas to EPADP. This took effect from January 1979. Sincethen, the Authority has established a well structured organizationincluding one management center for each parcel of 20,000 feddans. Also,with better allocation of funds and more effective control of field work,the standard of O&M has considerably improved. However, much more stillremains to be done. Improper functioning of the drains, whether due topoor installation or inadequate maintenance, is still the single mostimportant deficiency of the project. As an indication of this, under arecently introduced system for registering and redressing farmerscomplaints regarding malfunctioning of tile drains the Authority isreceiving an average of 200 complaints per month. How many more complaintsremain unregistered cannot be assessed. In the long run, the success orfailure of the project will be judged by the ability of EPADP to maintainthe drainage system in working condition everywhere. To do this, theAuthority still needs to plan and devote concerted efforts to develop costeffective methods and work cycles for deweeding, desilting and reshaping ofopen drains as well as for routine inspection and flushing of buriednetworks. One result of the original arrangement, whereby MOI wasresponsible for maintenance, was that only minimal provision was made inthe project for the import of maintenance equipment, especially equipmentneeded for flushing tile drains and for deweeding open drains and even thiswas not disbursed. This has been remedied in subsequent projects but lackof equipment was an important handicap in the early phases. It isemphasized that it is very important to establish the reasons for anymalfunctioning of drains, as no amount of maintenance can offset entirelyinadequacies in design or construction.

Cost Recovery

5.05 Section 4.07 of the Credit Agreement required the Borrower to makesuitable arrangements to have the recovery from users of irrigated landdrained under the project of; (a) the maintenance costs of field drainage;and (b) over a period of 20 years, the capital invested in tile drainagewithout interest. This requirement has only been partially complied with.The principal legal basis for recovering such costs is provided by theIrrigation and Drainage Law No. 74 of 1971. As required by this law, landtax assessments--supposed to be based on the land's net productivity--have not been adjusted in line with actual land market value duringrecent years and collections have tended to lag. /1 Thus, in themid-seventies, land tax collections on a country-wide basis, were onlyabout 25% of the system O&M costs unadjusted for capital charges and powersubsidies. No specific data are available regarding the project area alonebut the position is assumed to be similar to the country-wide position.

/1 In addition, owners of three feddans or less, comprising 80% of theowners, are exempted from land taxes.

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The process for the recovery of field drainage costs is time consuming.While recovery of capital cost should have started one year after

completion of tile drainage in each functional sub-unit of the project, itcommenced only in 1978. According to the information provided by EPADP, atotal of LE 2,936,197 had been recovered as of February 1981.(See para.7.13)

Monitoring and Evaluation

5.06 Proposals for monitoring and evaluation of- agricultural benefitsin the project area were to be developed by the contsultants.Unfortunately, nothing specific materialized from t:his and, in line withcurrent Bank practice at the time, no other provision for monitoring andevaluation was included in the project. To make good this gap a covenantwas included in the second Upper Egypt Drainage Project (signed in June1976) and further elaborated in the second Nile Delta Drainage Project(signed in July 1977), which required EPADP to evaluate the effect ofdrainage works completed under the first Delta Drainage Project on cropyields and soil propertiEs.

5.07 Even before this, however, in December 1975 EPADP had begun anevaluation program under urging from supervision missions and hadestablished an Evaluation Committee for the Drainage Projects includingrepresentatives of MOA, and set up an Evaluation Division. The early work,however, was unsatisfactory because of the way the data was collected andthe lack of information on variables other than drainage. By 1977 thecommittee had lapsed and had to be reestablished in 1978. At the sametime, help was sought from the Drainage Research Institute of MOI whichconducted a statistical evaluation comparing drained and undrained areasusing MOA data. Although this statistical analysis was a refinement overthe procedures used by EPADP it still did not take into account all thevariables other than drainage that influence yields. Thus, later in 1978,a new program was instituted with aid from the Netherlands Government whichwould examine the impact of drainage taking into account also the effect ofother factors. This began as a "crash" program lasting four croppingseasons and covering initially a few representative areas. It has now beenmerged into a larger long-term "regular" program which will continue overthe next several years. In addition, EPADP's Evaluation and TrainingDivision has continued to ex-post evaluation using MOA district data. Thisso called "regular" drainage monitoring program is supervised by a HigherCommittee established in September 1979. With the! Chairman of EPADP as itspresident, its members are representatives of EPADP, Universities, MOA, MOIand its subordinate research organizations DRI and GRI. Responsibility forthe program rests with DRI with assistance from the Netherlands Institutefor Land Reclamation and Improvement, Wageningen with financial assistancefrom the Joint Program of Technical Cooperation between Egypt and theNetherlands.

5.08 Some interesting results have emerged from the "crash" program.Besides the economic impact which is examined in section 7, these resultsindicate that; (i) tile drained areas have considerably higher averagecrop yields than non-tile drained areas, in spite of the fact that tiledrains may not be functioning fully adequately; (ii) the increase in crop

- 38 -

yields due to tile drainage is closely related to the level of thegroundwater prior to drainage; and (iii) soil salinity has a distinctimpact on crop yield in the non-drained areas but in the drained areas itsimpact i,. negligible.

5.09 As yet no monitoring has been undertaken of the simplest and mostdirect measure of the effectiveness of drainage--its impact on the level ofthe water table. Although no piezometers have yet been installed, it wouldbe possible to monitor water level response to drainage with relative easeby comparing water depth-duration curves for drained and undrained areas.These would indicate the degree of control that was being obtained over thewater table. Although provision of piezometer pairs and recorders formonitoring deep and shallow water level changes should be included as acomponent in the next drainage project enough data already exists to enabledepth-duration curves to be developed now for many areas. This data iswidely scattered but there do exist already over 4,000 groundwaterobservation wells many of which have been recorded regularly since the1930s, by the Groundwater Research Institute (GRI). Recently, supplemen-tary funding was made available by the UNDP/Bank Water Master Plan Project(EXWAP), and some of this information was successfully extracted and usedin their groundwater studies of Upper Egypt. A similar approach could beadopted for the monitoring and evaluation of the drainage projects, withfunds being provided through the ongoing drainage projects to both GRI andDRI to carry out this work.

Extension

5.10 The Bank's lack of experience with the Egyptian agriculturalsector shows up in the appraisal report's optimistic assessment of theextension and research services in the project area which were regarded asadequately staffed. The only shortcoming was thought to be the lack ofmobility and this was to be remedied by the provision of vehicles throughthe project. Further experience has shown that the extension and researchservices do have serious shortcomings and, since the extension vehicleswere never procured, the lack of supporting services has been a handicap tothe intensification of agriculture after the installation of drainage. Onthe other hand, because other factors such as inadequate input supplies andlow crop prices were not improved, the inadequacy is perhaps less seriousthan might at first sight appear. In recent years, there has been someimprovement and since 1979, EPADP has been running training courses ondrainage for MOA extension staff.

VI. INSTITUTIONAL PERFORMANCE

Nile Delta Drainage Authority

6.01 Although the MOI insisted that its line departments were perfectlycompetent to execute the project, the Assocation insisted that a Nile DeltaDrainage Authority (NDDA) be set up under the administrative control of MOIwith provision for consultants to carry out the project. This was asuitable technocratic response to what was essentially seen as a problem ofimproving the overall effectiveness of a project organization. The arrange-

- 39 -

ments established were thus based on conventional principles of organizationaldesign for single unit, centrally controlled enterprises with respect tofunctions, powers, repoiting relationships, authority and responsibility. TheAssociation and GOE also agreed during negotiations that the top management ofthe project would be one of the most important elements for its success.

Egyptian Public Authority for Drainage Projects

6.02 In late 1972, iLn order to unify the organizations working on drainagein Egypt, the Association agreed to the GOE proposal to merge NDDA with theEgyptian General Authority for Drainage Projects the organization responsiblefor drainage in Upper Egypt. Accordingly, the Egyptian Public Authority forDrainage Projects(EPADP) was established by a Presidential Decree issued inFebruary 1973 with responsibility for executing all drainage works in Egypt.Tne Association's agreement was strongly influenced by the fact that a secondIDA credit for drainage, this time in Upper Egypt, was under consideration andit did not want to deal with two organizations. Secondly, it seemed that sucha unified organization would best meet the need to more fully utilize the topmanagement ana allow more efficient use of construction equipment and repairfacilities.

b.03 The institutional problems of the MOI we!re correctly diagnosed at thetime of appraisal. The remedy recommended and effected was sound in conceptand had proved successful in many countries. Therefore, the project does nothighlight too many factors of structure. Insteacl, the problems responsiblefor the Authority's performance centered on: the process of decision makingin the new bureaucracy; the variable quality of t:he staff; the shortage ofstafting at miadle and working levels throughout the implementation of theproject; the need for training, and career advancement of, and incentives for,technical staft at all levels; the frequent turnover of staff including havingseven chairmen in a period of 11 years; the underutilization of expatriateconsultants and the failure to use them for introducing proven constructionplanning and management: techniques or to give them responsibility forimplementation; and inadequate attention having been given to a generalupgrading of skills wilth respect to project planning, programming, monitoringand implementation.

6.04 It is also to be noticed that the Authority was generally not keen tomake substantive changes in the traditional administrative pattern, nor toattempt seriously to absorb innovative ideas for creating a result-orientedgroup. This was especially important since staff were beingtransferred/secondea from various Ministries, and needed to be shaken out ofthe constraints of their previous work environment. External assistanceprovided by the consultants as well as by the Association's massivesupervision effort had only partial success in transferring managementtechniques.

u.05 Tne present organization structure of EPADP is shown in Annex 11. Itis basically the same that existed in 1977 when the Nile Delta Drainage IIProject was appraised. During the course of the project, the number ofengineers employed for implementation was consicierably below the strengthagreed in side letter No. 2. The Authority's efforts to make up this shortage

- 40 -

met with little success due mainly to its low wage structure and to the

constant outflow of qualified Egyptian engineers to foreign countries. This

affected both the quality of staff as well as the intensity of construction

supervision. This problem of staff shortages is one which has become a common

problem on most IDA/Bank financed projects in the public sector in Egypt.

Given the low level of public sector salaries relative to those which trained

staff can earn either in the private sector or more particularly outside

Egypt, there is little that the Bank can do. To a limited extent, the payment

of salary supplements is being tried but this is not something which is

readily replicable across a whole agency such as EPADP. The planning of

future projects needs to keep in mind that implementation rates are likely to

lower than technically feasible.

6.06 Irrespective of the weaknesses in areas of management, the project

has made some positive impact in shaping EPADP as well as bringing about some

gradual improvements in its operational character. The Egyptian staff

associated with the project received valuable on-the-job training in planning,

design and construction of drainage works as well as in procurement. However,

the Authority's performance in construction planning, scheduling and

management leaves substantial scope for improvement. Following termination of

the consultant contract in 1973, the Association continued to assist the

Authority in these areas through well timed supervision efforts.

VII. BENEFITS AND ECONOMIC EVALUATION

Estimated Benefits from the Project

7.01 The basis for estimating benefits in the Staff Appraisal Report (SAR)

was that crop yields in the project area were directly limited by poor

drainage. It was estimated that yields would increase about 22% after

drainage without any change in the level of farm inputs applied. Appraisal

missions for the subsequent Delta and Upper Egypt projects went on to make a

further assumption that waterlogging would become more widespread without the

Project, causing yields to fall by 30% after 35 years, the useful life of the

drains.

7.02 During execution of the Project, crop yields have been recorded by

MOA inside the project area before and after drainage. These yields have been

compared with yields in similar undrained areas outside the project area over

the same time period to act as a control. The results have been analysed by

the Evaluation and Training Division of EPADP/1 and are summarized below

together with the estimates made in the SAR.

/1 Analysis of the Crop Yield Evaluation in Some Drained Areas, Eng. Wadie

Rafla Ibrahim, Director General, Evaluation and Training Division, EPADP.

Cairo, July 1980.

- 41 -

Comparison of Yield Increases in SAR and in EPADP Evaluation

SAR Estimates EPADP EvaluationBefore After Increase Area A /1 Area B /2

Project Drainage 160,000 fed 320,000 fed- (tons/fed)----- ---------------- (percent)-------------

Wheat 1.12 1.35 20 16 14Maize 1.54 1.95 27 16 17Rice (paddy) 2.5 3.0 20 15 -Cotton (lint) .32 .38 19 12 13

7.03 Insufficient detail is provided in the EPADP evaluation to check thestatistical soundness of the analysis made. /3 Therefore a fresb analysis hasbeen made for the PCR using the data available in the Bank. The results ofthis analysis are summarfized below.

Yields changes Before (1970/1-73/4).ind After Drainage (1975/6-77/8)

Project Control Overall1970/1 1975/6 1970/1 1970/1 Change-73/74 -77,t78 Increase -73/74 -77/78 Increase(tons/fedd-a - (%) (tons/feddan) T)T (%)

Wheat 1.54 1.52 -2 1.68 1.51 -9 11Maize 2.23 2.33 4 2.34 2.24 -4 8Rice 2.21 2.38 8 2.35 2.30 -3 11Cotton (lint) .35 .38 9 .36 .35 -3 12

7.04 Inspection of the individual district records highlights someinteresting trends and provides some guidelines for further monitoring.First, the response to drainage is apparent in the year following installationof the field drains. The SAR assumed a build up in yield over several years,

/1 An area of 160,000 feddans in which drainage construction commenced in1971-72./2 An area of 320,000 feddans comprising the same 160,000 feddans as in AreaA plus an additional 160,000 feddans in which construction commenced in1973-74./3 The evaluation unit has gone to great efforts to provide information onareas of each crop by village, but has then used a single average yield foreach district. As a result we have effectively one observation only perdistrict. If the individual crop cutting results, which went to make up themean district yield, were available it would provide a measure of the varianceof the mean district yield, and the statistical analysis could be enormouslystrengthened.

- 42 -

whereas in fact once drainage and leaching can take place, yields build upalmost immediately to levels where constraints other than drainage provide alimit to production.

7.05 Some areas show that yields started to fall back towards previouslevels after initial increase. This may well be related to lack ofmaintenance of drains. Visual observations on supervision missions showthat some drains are working and others are not. The overall incidence offailure is not known, but it could be a factor leading to underestimation ofthe benefits from those drains which are working. This aspect is furtherdiscussed in the next sections.

7.06 A third indication from the data is that, whereas yields within theproject area rose following drainage, crop yields outside the project areatended to fall over the same period. Taken on their own, neither theincrease in yields within the project area, nor the decrease in yieldsoutside is statistically significant, although this may be due largely tothe limited number of observations. However when considered together thereis a statistically significant difference between the trend in yields insideand the trend outside the project area as shown above. The data providesupport, albeit tentative, to the hypothesis that drainage not only leads toincrease in yields in the areas drained, but also combats deterioration inyields that would otherwise have occured through the gradual filling of theaquifer in the Delta that has taken place since the expansion of perennialirrigation following completion of the HAD.

Other Monitoring of Benefits

7.07 As discussed in paragraph 5.04, the DRI has been conducting moredetailed monitoring through a micro-level "crash" program. The "crash"program has concentrated on monitoring crop yield, depth to watertable, andsalinity in several pairs of similar villages, one with drainage and theother without. Initially a pair of villages was selected in the WesternDelta and a second pair in the Eastern Delta for the 1978-79 crop year.This has now been expanded to a total of six villages (three with drainageand three without) by the addition of a pair of villages in the Middle Delta.

7.08 The results from sample surveys in these villages show similartrends and problems as indicated by the overall monitoring described above.Poor operation of drainage in some 40% of the area is a major problem whichreduces response in parts of the drained villages. Of particular interest,berseem yields are significantly higher in the drained areas where salinityis observed to be lower. Yield responses for wheat are much less, probablydue to a greater salt tolerance. The results of two summer seasons showincreased yields in the drained areas for rice in both years but littleresponse has been observed with maize probably due to poor functioning ofthe drainage system. However with cotton where yields for the period1974-1980 are available from the cooperatives large increases in yield havebeen recorded following drainage. In the three drained villages, yieldswere about 30% higher in the period 1977-80 than 1974-76 compared to a 17%increase over the same period in the three undrained villages. In terms ofeconomic response, net economic benefits in the order of LE 80-100 perfeddan per year have been recorded.

- 4L3 -

7.09 The results from this "crash" program indicate that there is

clearly a complementary role between monitoring of yield on a wide scale as

carried out by EPADP and the more intensive "regular" program monitoring of

watertable, salinity and yields etc. for a few selected villages, as is now

being started by DRI. This is particularly so because even if a

statistical relationship between areas drained and trends in yields can be

established, it is difficult to be sure whether there is also a causal

relationship involved. The problems associated with yield measurements are

well known - annual climnvtic variation, pests, diseases, sampling

difficulties etc. Moreover, once the drainage constraint has been removed

it is likely that farmers will apply more intensive input packages, thereby

increasing crop yields. Therefore, the measurements of crop yields need to

be supported by some more direct physical measures of the project's

effectiveness such as groundwater levels and soil salinity. To some

extent, this information will be provided by the new regular monitoring

program of DRI, but analysis of the groundwater data collected by DRI over

a wider geographical area would greatly strengthen the monitoring and

evaluation program.

Project Economic Rate of Return

7.10 The re-estimation of the project's rate of return provides some

interesting insights concerning the value of the overall drainage program.

The local cost component of costs has been converted to US dollars at the

parallel market rate prevailing at the time (Annex 12). Project costs have

then been converted to constant 1980 dollars using the International Price

Index, /1 to give a total cost in US dollars of US$ 302 million expressed

in constant 1980 dollars. This compares surprisingly closely with the SAR

estimated cost of $319 million expressed in 1980 dollars. Unit costs were

$319/feddan, compared with $336 at appraisal, or roughly a capital

investment of $800/hectare at 1980 prices.

7.11 Net incremental income was estimated at US$ 35/feddan in the SAR

equivalent to US$ 130/fE:ddan in 1980 constant prices. The question then

arises as to what is an appropriate incremental income to use in the

benefit stream. A series of benefits have therefore been used to provide a

range of estimates of the ERR. The most reasonable estimate from the

results to date is that yield increases within the project area have

resulted in an increase of 7% in the net economic benefits. /2 In addition

annual losses of almost 1% have been averted. Calculated over a 35 year

project life the ERR would be 25%. (It is assumed that losses averted

increase to a maximum of 30% of the net value of production by the 17th

/1 World Bank Report No. 814/80 Price Prospects for Major Primary

Commodities, p. 25.

/2 At the time of appraisal, there was no data on the impact of drainage

on berseem production. The appraisal report, therefore, excluded berseem

from their benefit calculations. In order to make the recalculated ERR

comparable, berseem has also been left out of the calculations here.

However, information from the crash program indicates that berseem benefits

more than any other winter crop from drainage, because it is very

sensitive. The true ERR is thus considerably higher than the 25% adopted

for the PCR.

- 44 -

year). Excluding any benefits from losses averted tne ERR would be 17%.If on the other hand the more optimistic estimate made by EPADP of 14%incremental benefits is accepted then the ERR would be 65%. Details aregiven in Annex 1.

7.12 Finally a switching value has been estimated to indicate theminimum net benefits that would result in a minimum acceptable ERR of 10%.This minimum acceptable rate of return woula be achieved even if drainageprovides only a 5% increase in net benefits. Although yield increases havebeen less tnan anticipated in the SAR, the benefits in each area drainedaccrue in the very next year rather than the gradual build up assumed inthe SAR. The resulting ERR is higher than that projected in the SAR(18%). In conclusion it would seem that despite all the administrativeproblems associated with the project, it has been an excellent economicinvestment for the nation.

Farmers Benefits

7.13 Calculations have been made to indicate the level of farmbenefits. These indicate a net increase of LE 40/feddan, comprising LE25/feddan inside the project area and losses averted of LE 15/feddancompared with undrained areas outside the area over four years ofimplementation. Farmers are liable to pay a drainage tax of LE 7/feddanfollowing drainage. This is less than the full economic rent but thepresent pricing structure results in such a level of agricultural taxationthat any discussion of increasing recovery from farmers can only be lookedat in the wider context of agricultural pricing policies as a whole. Thesepricing policies during the project period resulted in a substantial nettaxation of agriculture, estimated at some 30% in the mid seventies. Theyacted as a disincentive to the increased use of farm inputs and to thatextent must have acted as a brake on the full attainment of the benefits ofdrainage by farmer beneficiaries. The last three years or so, however,nave seen a diminution of this burden of taxation as a proportion of valueadded and an increased use of fertilizers though to what extent this can becorrelated with drainage is impossible to say. While drainage is anecessary condition for the intensification of agriculture, it is notsufficient by itself. As policies and services to farming improve, so willthe potential benefits from drainage increase.

VIII. BANK PERFORMANCE

8.01 In evaluating the Bank's performance consideration must be givento the fact that this was the first IDA-assisted project in theagricultural sector. It was an ambitious attempt to implement the largestsingle tile drainage operation ever undertaken in the world by a newly

- 45 -

established agency of the Government. Looking back, it is apparent that inmanaging the massive task of implementing tic project, both the Bank andthe Government placed too much confidence on the construction administra-tion capability of the MOI personnel and on the capacity of the publicsector contractors.

8.02 The joint FAO/IBRD Coope~rative Program members of an economicmission identified the project in 1968. Subsequent Bank missions providedassistance in formulating and elaborating the plan. Verifying the informa-tion collected by the preceding missions as well as the data provided bythe MOI in the Feasibility Report, the appraisal team put together atechnically and economically viable project. A searching scrutiny of theproject in the Bank scaled down the scope of the project proposed by theappraisal team in order to reduce the risk as well as to gain moreexperience with rates of implementation before preparing further phases ofthe drainage program.

8.03 Supervision of the project was intensive in the start-up phase andlater on timely and satisfactory. During the initial stages, the Bankprovided extensive assistance to the Authority in preparing bid documentsfor procurement of equipment under ICB procedures. Although the use ofconsultants by the Authority became a contentious matter, the Bank staffsucceeded in maintaining a continued good rapport with the Egyptianofficials. Because of b:he the problems and delays faced by the project,the Bank had to maintain a heavy supervision load during project implemen-tation. The well-timed supervision nmissions were instrumental in drawingattention to potential difficulties and generally eliciting appropriateactions.

8.04 Since this was the first project in the phase of Bank lending toEgypt that began on FY70, it was important in that it established thepatterns and the precedents for other projects and many of the lessons thatit has provided in terms of what was feasible and what was not have beentaken into account in the design of future projects. For instance, theorganizational proposals made at appraisal and the arrangements forconsultants to assist the Authority in management techniques did not workwell. The options available to the Bank for improving the situation wererather limited. Although with a delay of four years, the achievement ofthe project appraisal objectives shows that the flexible position taken bythe Bank was correct in the given circumstances. However, since the Bankis likely to be involved in the drainage program for some time to come itis critical that ways be found to assist Egyptian contractors engaged ininstalling the drains to devise ways and means for upgrading theirconstruction management: capability and capacity. Further effort is alsoneeded to upgrade implementation planning, control and reporting systems.Efforts made during the course of the project towards achieving theseobjectives have been relatively unsuccessful but, since they are the keysto accelerating the drainage program, it is important that the pressure forimprovement be maintained.

XI. CONCLUSIONS

9.01 There is now sufficient experience in the Bank with the Egyptiandrainage program as a whole, and with this project in particular, to givedefinite conclusions about the successes and failures of the project. In

- 46 -

terms of its impact on the economy in general and on each of the manybeneficiaries it was a highly successful project. Despite the fact that ittook four years longer to implement the project than expected, projectbenefits suffered very little because each drainage sub-area is in a sensea discrete sub-project and benefits normally become available immediatelyupon completion of each sub-project. Delays in execution have lowered thevalue of benefits in total over the project life but not the ERR of theproject. Recalculation of the ERR indicates that actual results have beenbetter than estimated at appraisal, although for somewhat differentreasons, and have also been unexpectedly variable. Overall, however, theyare higher than for the general run of agricultural projects.

9.02 There can also be no doubt that the Bank made the appropriatechoice in selecting drainage for its first lending activity in theagricultural sector and for staying with drainage for three subsequentprojects. Even today investment in drainage is among the highestpriorities for agricultural investment in Egypt and gives a higher economicreturn than almost any other type of agricultural project.

9.03 Appraisal estimates of the likely rate of implementation wereoveroptimistic. The appraisal mission underestimated the magnitude of thetask which the new Drainage Authority was proposing to undertake andoverestimated the capacity of the local contracting industry to implementit rapidly. Given that this was only the Bank's second project of any kindin Egypt, and the first for over ten years, the appraisal mission had noprior experience to guide them in assessing the likelihood of majordelays. On top of this the project was further delayed by the 1973 war andits aftermath of resource and financial shortages. At no time, however,even when the war's effects had passed, did the annual rate of progressreach the appraisal estimate of 240,000 feddans of tile drains. Thehighest achievement was 141,000 feddans, although taking into account thefact that EPADP was also undertaking three other Bank group assistedprojects as well as some other smaller ones, its total implementation ratereached about 200,000 feddans. Over the years different single factorsemerged as the critical reason for slow progress; at one time it wasshortage of local funds, at another shortage of labor, then later shortageof equipment or shortage of cement. None of these factors are significantat present and yet still the rate of progress has not improved. Anunderlying cause that has delayed the project since its beginning is moreclearly evident, that of management, both at the EPADP and the contractorlevel.

9.04 The Bank made a number of efforts from the start of implementationto assist the Drainage Authority to improve its management, most notablythrough urging the Authority first to employ consultants and then toutilize them in helping to improve the management system. These effortsthrough the use of consultants were fruitless and in the prevailingcircumstances perhaps this was inevitable.

9.05 On the other hand, Bank supervision missions have had a majorimpact in maintaining momentum during implementation although they appearto have paid inadequate attention, at least until recently, to the problems

- 47 -

associated with the use of public sector contractors, particularly the lackof incentive to timely completion of work and the inadequacy of any controlmechanizms available to EPiiDP. The problem was recognized early on in theproject but no adequate soLution has yet been proposed. One response ofthe Bank has been to open up bidding to international competition. In thefirst two drainage projects bidding for the civil works drain layingcontracts was confined to 1Egyptian bidders on the grounds that there wasadequate competition and capacity. While this was true as regardscompetition to win contracts, it does not appear that poor performance onone contract carries any penalties in subsequent ones. Nor did the Bankdisburse against local contracts. In the third and fourth projects, ICBprocedures were followed for civil works contracts. However, sinceEgyptian firms have continued to win all the contracts, this has notintroduced any outside competition. An alternative, yet to be tried, wouldbe to encourage private Egyptian contractors to bid. Until a better systemof incentives and awards for good, or penalties for bad, performance isintroduced it is unlikely that a substantial increase in the rate ofcontractors' output can be expected.

9.06 One area where the Bank and the Borrower have cooperated todevelop a useful working system is in the area of monitoring andevaluation. Although the project did not lay down specific requirementsfor this in subsequent projects it became a covenant in the projectagreement. As a result, useful data on the impact of drainage onagricultural production i; becoming available. However, there is stillneed for analysis of the impact of drainage on water table levels. Whiledata exist to make this analysis a coherent framework needs to be developedfor assembling these data in a single place and using them as part of anon-going monitoring program.

9.07 Over the longer term, the success or failure of the project willdepend on whether the drains which have been installed are properlymaintained and continue to operate properly. Effective monitoring ofmaintenance has yet to be established and should be addressed by futuresupervision missions of the other three ongoing drainage projects. Inaddition, more work is still needed on the design of the drainage.Although the growing use of PVC pipe for tile drains may ease some of theproblems hitherto associated with the use of cement pipes (e.g., excessivegaps between pipes, breakages) insufficient information is as yet availableon drain depth and spacing and the use of gravel envelopes to know whetherthe present system is a reasonable compromise between technical, economicand managerial optima and constraints. While work on this is now underway, it is still on a small scale relative to the size of the drainageprogram and should be exp-anded. Furthermore, the use of vertical drainageneeds to be tested in a pilot area since it appears likely that it willprovide a more economic solution to drainage problems in many of the areasremaining to be drained in Upper Egypt than the use of buried pipes.



Recurrent and Capital Expenditures 1975-80

1975 1976 1977 1978 1979 1980(6 mo.)Ministry of Irrigation Recurrent Capital Recurrent Capital Recurrent Capital Recurrent Capital Recurr nt Capital Recurrent Capital

…(---------------0--------------------------- '000 LE)---------------------------------------------------------------

Central Administration 324 - 339 - 210 - 192 72 26: - 122 -Irrigation Department 15,228 14,000 16,253 10,924 22,073 15,804 31,977 30,108 34,629 27,354 23,678 23,296Mechanical and Electrical Dept. 9,606 1,064 13,100 1,082 10,492 1,440 12,343 10,344 15,23r' 15,525 6,375 6,13,0Drainage Authority 3,504 21,435 2,172 20,035 2,964 34,378 4,277 41,257 6,03 66,568 3,285 28,787Water Research Center - - 385 95 656 607 807 1,208 94 2,312 505 505Survey Authority 4,143 233 4,996 200 5,195 260 6,066 362 7,18, 378 3,766 376Aswan 1.536 394 1,559 620 1,741 1,952 1,321 12,424 1,92-- 14,640 n.a. -

TOTAL 34,341 37,126 38,804 32,956 43,331 54,441 56,983 95,775 66,21: 126,777 37,731 59,094

Drainage as Percentage ofMOI Capital Funds 57.7% 60.7% 64% 43% 52.5% 48.7%

SOURCE; Ministry of Irrigation.

tT

x

X-

-49 - ANNEX 2



Principal Features of Nile Delta II andUpper Egypt I and II Drainage Projects

Upper EgyptDescription Nile Delta II /1 I II /2

Loan/Credit No. Ln. 1439-40/ Cr. 393-EGT Ln. 1285Cr. 719-EGT Cr.637-EGT

Signing Date 07/15/77 06/08/73 06/11/76Effective Date 04/17/78 11/28/73 01/31/77

Estimated ProjectCompletion at Appraisal 12/82 06/79 12/81

Expected ProjectCompletion Date 12/84 06/82 12/84

Original Loan/CreditClosing Date 12/31/83 12/31/79 /3 12/31/83Extended/Expected LoanClosing Date 12/31/84 /4 06/30/82 /4 12/31/84 /4

Appraisal Cost Estimate($ Million) 207.0 123.8 282.0

Revised Estimated as PerLatest Supervision ($ Million) 207.0 104.2 /5 221.4 /5

Loan/Credit ($ Million) 66.0 /6 36.0 50.0 /6Disbursement as of 3/31/81 ($ Million) 19.8 33.6 26.4

Project Area (feddans) 810,000 300,000 500,000

Major Project WorksA. Remodelling/Construction of Open Drains

(i) Area (feddans) 810,000 300,000 500,000(ii) Remodelling Drains-Km 1,565 775 1,226

(iii) New Drains-Km - 865 345

(iv) Completion 03/31/81 47% 100% 61%

B. Field Drains (feddans) 400,000 300,000 500,000Completed 03/31/81 1.5% 75% 2%

C. Pumping Stations 6 5 1Completed 9% 87% 14%

Reclamation of Saline Land (feddans) - 22,400 12,000

Bilharzia Control Program (feddans) /5 Extension to 1.2 900,000 120,000million feddans (Extension)including UpperEgypt I & II areas

/1 KfW financing by an additional DM 100 million loan.75 Additional $30.0 million financing provided by USAID for procurement of equipmentfor three PVC pipe making factories as well as of 6,000 tons granulate material./3 Loan Closing Date extended to 7/31/81./4 Loan Closing Date expected according to latest schedule of the Drainage Authority./5 Applying parallel market exchange rate./ Bilharzia Control Component included in various Credits/Loans is:

Upper Egypt I US$6.4 million

Upper Egypt II US$5.1 millionNile Delta II US$10.4 million

ARAB REPtlBLIC OF EGYPTPROJECT COMPLETION REPORT

NILE DELTA DRAINAGE I PROJECT

(CREDIT 181-UAR)

Bank and/or IDA Financed Projects Other Than Tile Drainage

Estimated Credit/LoanCredit/Loan Date Effectiveness Original Amount

Project Number Signed Date Project Cost (I Million) Remarks

millionI. Projects in Agriculture Sector

Agricultural Development Cr. 830 07/24/78 02/21/79 45.8 32.0 To increase productivity in two Governoratesby strengthening agricultural banking,

extension & cooperatives and providingtractors, agricultural implements & pumpingunits.

New Land Development(W. Nubariya) Cr. 1083 12/16/80 Not Yet 193.0 80.0 To develop 24,000 feddans desert land

including settlement of 4,000 small-holders families and a component forBilharzia Control Program.

Fish Farming Development Cr. 1111 04/24/81 Not Yet 26.3 14.0 Establish fish farms on 1,800 feddans in theDelta. Project also includes facilities 6equipment for training, consultants services

& programs for strengthening extensionservices & monitoring.

II.Agroindustry ProjectsFruit & Vegetable Development Ln. 1276 06/11/76 12/20/76 106.0 50.0 To develop a seed farm & associated

activities 6 to provide credit to processors& exporters of fruits 6 vegetables.

Agroindustries Cr. 988 05/01/80 12t3/89 60.8 45.0 To establish small 6 medium sized agro-

industries as well as replacement ofslaughterhouses at Alexandria & Cairo.

IlI.Other Support ProjectsCotton Ginning Rehabilitation Cr. 423 07/30/73 02/15/74 40.4 18.5 To finance the first of a three-phase

program for modernizing cotton ginniuigindustry.

Talka II Fertilizer Cr. 484 06/24/74 01/22/75 132.0 20.0 To expand urea production capacity.

Agricultural/Industrial Cr. 524 12/20/74 03/19/75 - 15.0 To finance imports of foodstuffs, pesticides,

Imports Ln. 1002 tractors & machinery spare parts.

Regional Electrification Ln. 1453 07/15/77 02/06/78 70.6 48.0 To extenid power facilities for multiple uses

including irrigation water punmping.

- 51 -

ANNEX 4



Project Description From the Credit Agreement

The Project is designed to provide tile drainage for about950,000 feddans of irrigated land in the delta of the Nile River and toincrease crop production on such land, and includes:

(i) the construction of eleven drainage pump stations withrelated electric power transmission facilities;

(ii) the remodelling of about 1,700 km of main open drains andtheir associated structures;

(iii) the installation of field tile drainage in about 950,000feddans of irrigated land by mechanical equipment;

(iv) the construction and equipment of four divisional workshopsfor maintenance and repair of construction equipment andvehicles, within eighteen months from the Effective Date;

(v) the acquisition of mobile field workshops adequate formaintenance and repair of construction equipment andvehicles, promptly as required by the construction schedulefor the Project in accordance with a procurement scheduleapproved by the Association;

(vi) the acquisition of tile drain maintenance equipment; and

(vii) the acquisition of vehicles and farmer training equipmentfor the agricultural extension services in the Project area.

ARAL RFPUB.I(C OF F('YPTPROJECT C(OMPITIPN PEPORT

NIl.L KlAETA ;)RAINA(.F I PROJECT(MRF nTr 1.1 1-UAR )-

Tile Drainage Areas - Appraised and Revised

Region/Catchment Area Project Area (Feldlans) Final Areas (Feddans)

Percentage RemartsRevijed /1 Revised /1 Tile Drained /2 of Appraised

Ntimbers Name of the Catchment Unit Appraised .lmne 19T7h Nov. 107F Ending 17/80) Area

A. Eastern DeltaOEI Qaltbiva 80,000 II?,noo 0166 ((1) 164,3R4 2(05% New areas included in the project.

vc2 z -, S--f t ) ___ . .. - 58 ,3(3 56,(00 I 1O%OE3 N izam l > [ L1,0O vIlu.. 5 4,.- 70, n1( /1 ,>~(, I II Sadaka 43 ,noo ... 3X*,noo 46h01( 4c, 6,h76 I I h Ad justed area .OE7 East Bahr Saft _ . . .... _ 31,0nn 27,7hh _ New area included in the project.OEB Belbis _ _ 15,0()() 17,600 _ New area included in the project.

SUBTOTAL 251,000 301 ,00()3 386gh,(111 3R2,826 153%

B. Middle DeltaOMI SabAl 40,000 14n,o00 39,00 39,()) 1655 New area included in the project.OM2 East Menu!is 00 27,r00 27,00011 Mehallet Roah 70,000 7(0,000 63,000 61,200 90% Ad justed area.IV P.S. No. 5 75,000 25,000 - - 0 Area shifted to Nile Delta IT Project.VIl Samatai 55,000 55,00n 52,nn(0 54,882 lootVIIi Segaeya 75,3)00 75,000 8R,3(10 81,880 109% Adjusted area.Xi Upper No. 8 34,000 34,000 39,0(0 25,sO( 7s% Adjusted area.O!tlE Sabal East - - 30,0100 3n,000 _ New area included in the proiect.OM3 Tala - _ 6,3(30 6,00n0 f New area included in the project.

SIIBTOTAL 349,000 2Q, 00O 337,3,nn 327,462 94%

C. Western DeltaOW Delinegat 65,000 6S,,000 43,0nn 43,0(00 66% Area reduced.V Khandak 38,000 38,0013 36,00( 38,100 100%IX Khairi 57,000 57,3000 52,000 57,444 lo0%X Shereshra 90,000 QO0,(0 - - 0 Area shifted to Nile

Delta 1I Project.I Etai Elbaroud 24,000 24,000 24,000 25,000 104%VI Shobra Khit 76,00n 76,n0o 7?,O0n 73,340 972 Adjusred area.

SUBTOTAL 350,000 35C,000 227,3)0n 236,884 68%

TOTAL 950,000 950,000 950,0(f0 947,1i72 /3 99% /3

/1 Areas were revised each time with the agreement of the Bank./2 Actual areas represent adjusteents necessary as compared to November 1978 revised areas.7T Final area which tile drains bave been installed.

- 53 -,

ANNEX 6


NILE DELTA DRAINAGE I PROJECT(CREDIT 181)

Allocation of Proceeds of Credit

FinalCredit 1st 2nd Disbursement

Category Agreement Revision /1 Revision /2 Allocation /3

-- …-----------------------…USS Equivalent--------------------------

I. C.I.F. cost of tile drainageconstruction equipment 10,800,000 9,140,000 9,500,000 9,094,169.84

II. C.I.F. cost of main drainageremodelling equipment 2,800,000 2,800,000 2,800,000 2,526,290.67

III. C.I.F. cost of pump stations-machinery, equipment & installation 6,800,000 7,870,000 8,500,000 7,987,968.69

IV. Training & consultants 600,000 700,000 600,000 583,003.83

V. C.I.F. cost of maintenanceequipment 200,000 200,000 50,000 18,325.35

VI. C.I.F. cost of agriculturalextension equipment & vehicles 100,000 100,000 100,000

VII. (a) C.I.F. cost of imported,and/or

(b) ex-factory price of locallymanufactured tractors, trucks& motorcycles 2,600,000 4,500,000 3,800,000 3,778,918.04

VIII. Unallocated 2,100,000 690,000 650,000

Total Allocation/Disbursement 26,000,000 26,000,000 26,000,000 23,988,676.42Cancellation - - - 2,011,323.58 /4

Total Credit Amount 26,000,000 26,000,000 26,000,000 26,000,000.00Exchange Adjustments 245,450.21

TOTAL 26,245,450.21

/1 First revision made on January 25, 1977./2 Second revision made on September 18, 1978./3 CTR Office Memorandum dated April 16, 1981, addressed to EMIA./4 GOE, Ministry of Economy, informed by telex dated April 3, 1981.


PROJECT COMPLETION REPORT

NILE DELTA DRAINAGE PROJECT

(CREDIT 181-UAR)

Construction Schedule Actual Vs. Scheduled

Item No. Description 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980

I Pumping StationsAppraisalActual --- -- - -- - --- - - -- -- - -- -- - -- -- - -- - -- -- - -- -- - --- - -- - -- -- - -- -- - -- - -- -- - - -- - -- -- - -

Open DrainsAppraisalActual --------------------------------------------------------------------------- ------------

III Tile Drains(Fed.)Appraisal 40,000 - 40,000 - 130,000 l 170,000 -) 200,000 + 240,000 -+ 130,000

Revised 6/9/71 …------ 40,000 -- 40,000 - 130,000 -- 170,000 200,000 -- 240,000 -- 130,000 --

Revised 12/4/72 *-------Completed 120,000------) 90,000 100,000 170,000 170,000 160,000 140,000

Revised 6/15/76 0-------Completed 250,000----------------------------- 90,000 130,000 160,000 160,000 160,000

Actual (------ 40,000 --- 80,000 ------ 70,000 60,000 80,000 133,000 141,000 131,000 126,000 86,000

U1

I-J

- 55 -

ANNEX 8


NILE DELTA DRAINAGE I PROJECT(Credit 181-UAR)

Appraisal and Actual Cost Estimate

Appraisal Cost Estimate Actual Cost EstimateDescription Local /1 Foreign Total Local /2 Foreign /3 Total

----------------------------USS million-----------------------------------

Tile DrainageEquipment 0.14 13.01 13.15 2.00 9.10 11.10Construction 53.10 - 53.10 67.84 - 67.84

Subtotal 53.24 13.01 66.25 69.84 /4 9.10 78.94

Remodelling Open DrainsEquipment 0.05 2.79 2.84 0.32 2.52 2.84Construction 22.35 - 22.35 73.53 - 73.53

Subtotal 22.40 2.79 25.19 73.85 2.52 76.37

Building and Housing 2.81 - 2.81 2.94 - 2.94

Pumping StationsEquipment-Civil Works 4.46 5.71 10.17 7.42 6.78 14.20Transmission Lines 0.89 1.12 2.01 1.00 1.20 2.20

Subtotal 5.35 6.83 12.18 8.42 7.98 16.40

Crop Compensation 10.80 - 10.80 10.17 - 10.17

StaffSupervision & Admin. 10.79 - 10.79 8.66 - 8.66Training & Consultants - 0.60 0.60 - 0.58 0.58

Subtotal 10.79 0.60 11.39 8.66 0.58 9.24 L5

Tile DrainMaintenance Equipment - 0.20 0.20 - 0.02 0.02

AgriculturalExtension Equipment - 0.49 0.49 - 0.02 0.02Tractors,Trucks&Motorcycles/7 - - - 1.01 /6 3.77 4.78Contingencies 10.81 2.08 12.89 - - -Total Without Duties 116.20 26.00 - 142.20 174.89 23.99 /7 198.88

/1 Using official exchange rate at Appraisal of LE 1.00 = USS2.30./2 Using official exchange rate fo- the period ending 1970-73 and parallel market exchange rate for theperiod 1974-80./3 Approximate amount for each item.74 Includes cost of three cement pipe making factories.75 The expenditure is low because of cost sharing by other drainage projects./6 Includes expenditure on miscellaneous items./7 Included under Tile Drainage Equipment or Remodelling Open Drainage Equipment in Appraisal CostEstimates.

- 56 -ANNEX 9



!kppraisal Estimate and Actual Cumulative Disbursements

Bank Fiscal Actual DisbursementsYear and Half Appraisal Actual Total As Percentage of AppraisalYear Semester Estimate Disbursements Estimate

1970/71June 30, 1971 6.40 -

1971/72December 31, 1971 - 0.17 -

June 30, 1'72 15.90 0.33 2%

1972/73December 31., 1972 - 1.20 -June 30, 1973 23.30 3.80 16%

1973/74December 3L, 1973 - 5.10 -June 30, 1974 25.00 8.29 33%

1974/75December 31, 1974 - 11.12 -June 30, 1975 26.00 /L 13.98 54%

1975/76December 31, 1975 - 15.30 59%June 30, 1976 - 15.86 61%

1976/ 77December 31, 1976 - 17.47 67%June 30, 1977 - 18.04 69%

1977/ 78December 2.1, 1977 - 19.66 76%June 30, ]978 - 21.06 81%

1978/79December i1, 1978 - 22.55 87%June 30, 1.979 - 23.91 92%

1979/80December 31, 1979 - 24.03 93%June 30, 1980 - 24.15 93%

1980/81December 31, 1980 - 24.22 93%(March 5, 1981) - 24.23 /2 93% /2

Closing Date 12/31/76 12/31/80 /3

/I Later increased to t26,245, 450.21 including $245,450.21 for exchangeadjustmentE./2 Actual amount disbursed as of March 5, 1981, was t23,988,676.42 excludingexchange rate adjustment of t245,450.21. The amount of $2,011,323 wascancelled on April 3, 1981./3 Loan Closing Date was revised three times, finally on June 25, 1979 to12/31/80.

- 57 -

ANNEX 10



Comparison of Appraisal Estimate and Actual Financing Through Credit 181-UAR

Appraisal Estimate ActualCost Cost

Item Quantity US$'000 Ouantity US$o000

Tile laying machines 100 3,370 48 3,550Pumping stations & workshops 11 6,830 11 6,670Power transmission lines 1,200

Tile making machines 50 700 23 1,600Hydraulic backhoes 10 300 10 300Draglines - excavators 43 1,840 27 1,700Transporters 14 510 7 450Mobile cranes 4 120 3 180Agricultural tractors 400 1,400 220 1,980Agricultural trailers 1,000 1,150 480 570Motor graders 4 170 4 100Back fillers 50 280 - -Workshop equipment 390 -Jeeps & general purpose vehicles 100 100 560Pickups 120 f 6 0 0 80 440Station wagons 49 J Microbuses - - 10 60Trucks & trailers 107 960 131 1,940Caravan trailers 60 270 - -Motorcycles 750 380 750 260Forklifts - - 12 180Laboratory-office equipment 180 30Collector laying machines - - 1 130Tile drainage maintenance equipment 40 200 50 18Extension equipment-projectors - 50 25Crushers - - 3 80Spare parts-miscellaneous 1,700 1,383

SUBTOTAL 21,400 23,406Consultants-training 600 583Contingencies 4,000 -

TOTAL 26,000 23,989


DRAINAGE PROGRAM

EPADP - 1980 Org8nization Chart

t WFP l/ I IDG SECURITYI I|I I DG-TECH I PUBLIC I I LEGAL |I OFFICE I I OFFICEC1 I I- i OFFICE I RELATIONSI I OFFICE I

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ I CHAIRM4AN I _ _ _ _ _ _ _;ORGANIZATION I ; ; ; -OGI MArrERS I |INSPECTION ;I ICONSULTANTSI ISECRETARY I

_ _I __ , !

i I__ _ _ _I I; VICE CHAIRMAN |; FOR EXECUTION | I ii& MAINTENANCE ; I ;

IUNDERSECRETAXIESI 2/ i UNDERSECRETARYI IUNDERSECRETARYI IUNDERSECRETARYI |UNDERSECRETARY I IDS ADMIN I IUS PLANNING IIIRRICATION IN I I UPPER EGYPT i IMAINTENANCE I NHECH 6 ELECT I I DELTA I 16 FINANCE I I6 FOLLOW-UP IIGOVERNORATES i __ _ _ F--T5r----F__

_ _ _ _ _ _ _ _ __DG _TRUCT RES_ I I D EAST_ _ I _ _ _ _ _ I __A_I _ _ _N

i __I DG ; iDDGSTRUCTURES ; ; DG I I I | DGLOWER i I iI|DG STRUCTURESI i DGII _I DG PLANNINGI I1 1 EXECUTION ; i DESIGN ; i I DELTA | I EGYPT ; 1 I DESIGN I I I FINANCEI I 6 FOLLOW-UPI l0

I _ _ __ _ _ _ _ I _ _ _ _ _ I _ _ _ I I I__ _ _ _ _Ii i WC i_ i DG IDDLE ; DGUPPER I; DG Ii i DG I I IDG FIELD I I1 i BENI SUEF | i DG MINYA ; i I DELTA i I EGYPT i i EXECUTION ; I ADMIN i IINVEST. & 6

___________ _ ____________ I ________7 _ I _ _ _ _ _ _IDESIGN Ii_; DG ; i_ III DG WEST I I DG EAST I I Ii I ASSUIT ; ; DG SOHAG 1 i I DELTA I i DELTA i1D -FIELD I

i I |INVEST. & Ii i DG i i I DGNIDDLE I ; DGWEST iI DESIGN II

I QENA i DG ESNA i I i EGYPT I I DELTA i _ i;__ _ _ _ _ _ _ _ I ___________ I _ _ _ _ _ _ _ _ _ _ _ C 1 TRAINING ! I

i I_l DG i I DC PIPE I _ DG UPPER | __ I DCNORTH II I 6 EVAL. II ASWAN ; ; FACTORIES i i EGYPT i IMIDDLE DELTA ii

; DG SOUTH iiIMIDDLE DELTA I I

I DGPIPE __II FACTORIES I

WFP--World Food Program2/ UnderSecretaries Irrigation in Governorates provide general supervision of General Directors responsible for construction work.

- 59 -

ANNEX 12



Project Cost by Year

Year Project Cost US$ Million EquivalentLocal 1/ Credit Total

1970 2.39 - 2.391971 4.13 0.17 4.301972 6.37 1.13 7.501973 6.44 3.90 10.341974 10.69 6.02 16.711975 19.24 4.15 23.391976 16.25 2.17 18.421977 26.94 2.19 29.131978 27.98 2.68 30.661979 35.21 1.38 36.591980 19.25 0.20 19.45

174.89 23.99 198.88

1/ Conversion rates;

1970-72 official LE 1.00 = US$ 2.301973 parallel 1.00 = 1.701974 parallel 1.00 = 1.571975 parallel 1.00 1.501976-80 parallel 1.00 1.43

Maintenance Excluding energy costs

up to Dec 1978 LE 2/feddan1979 LE 4 to 5/feddan

- 60 -

ANNEX 13Table I



Project Benefits and Justification

Economi.c Prices and Incremental Production

Before After Xncrement Economic Increment 2/ Cropping IncrementalProject Project Price 1/ Pattern Production

------ tons per feddan----- $/ton $/per/feddan % $/feddan

Economic Benefits Within Project Area

Cotton 1.0 1.09 .09 1,320 119 33 39

Rice 2.21 2.38 .17 275 47 35 16Maize 2.23 2.33 .10 190 19 32 6Wheat 1.5 1.5 - 250 - 29 -

129 61Berseem etc. 3/ 71

200

Economic Losses Outside Project Area - Over 4 years

Cotton 1.03 1.0 -.03 1,320 -40 33 13Rice 2.35 2.30 -.05 275 -14 35 5Maize 2.34 2.24 -.10 190 -19 32 6Wheat 1.68 1.51 -.17 250 -42 29 12

i129 76Berseem etc. 3/ 71

200

Source; Evaluation and Training Division, EPADP

1/ Border prices adjusted to farmgate.2/ Incremental production costs, such as additional harvesting, have been

assumed to be offset by incremental by product yield (straw, stovaetc.).

3/ No economic value assigned to berseem and other crops, forcomparability to Economic analysis made in SAR.

- 61 -ANNEX 13Table 2




Project Economic Rate of Return - Base Case

Period Year Capital Incremental Net IncrementalCost Operating farm Benefits

Cost Benefit---------------------- (LE million)---------------------

1 1970 7.9 0.0 0.0 -7.92 1971 13.1 0.2 1.8 -11.53 1972 20.6 0.4 4.4 -16.54 1973 23.6 0.6 8.0 -16.25 1974 30.7 0.7 13.2 -18.26 1975 37.2 0.8 18.3 -19.77 1976 28.8 1.0 25.1 -4.78 1977 42.2 1.3 35.7 -7.89 1978 38.3 1.5 47.8 8.010 1979 40.4 3.2 60.6 17.011 1980 19.5 3.4 74.0 51.112 1981 0.0 3.8 86.0 82.213 1982 0.0 3.8 93.6 89.814 1083 0.0 3.8 101.2 97.415 1984 0.0 3.8 108.8 105.016 1985 0.0 3.8 116.3 112.517 1986 0.0 3.8 123.9 120.118 1987 0.0 3.8 131.5 127.719 1988 0.0 3.8 138.8 135.020 1989 0.0 3.8 145.8 142.021 1990 0.0 3.8 152.4 148.722 1991 0.0 3.8 158.5 154.723 1992 0.0 3.8 164.1 160.324 1993 0.0 3.8 169.0 165.225 1994 0.0 3.8 172.9 169.126 1995 0.0 3.8 175.6 171.827 1996 0.0 3.8 177.3 173.528-35 1997-2004 0.0 3.8 178.0 174.2

ERR = 25%, includes benefits within project area and losses averted outsideof project area.

- 62 -

ANNEX 13Table 3

ARAB REPUBLIC OF EGYPTPROjECT rOMPLRFTTON REPORT



Project Economic Rate of Return - Alternative CaseIncluding Incremental Income but Excluding Losses Averted

Period Year CapitaL Incremental Net IncrementalCost Operating farm Benefits

Cost Benefit

---------------------- (LE million)---------------------

1 1970 7.9 0.0 0.0 -7.92 1971 13.1 0.2 1.8 -11.53 1972 20.6 0.4 4.2 -16.84 1973 23.6 0.6 7.2 -17.05 1974 30.7 0.7 11.4 -20.06 1975 37.2 0.8 15.0 -23.07 1976 28.8 1.0 19.8 -10.08 1977 42.2 1.3 27.8 -15.79 1978 38.3 1.5 36.2 -3.6

10 1979 40.4 3.2 44.1 0.511 1980 19.5 3.4 51.7 28.812-35 1981-1982 0.0 3.8 56.8 53.0

ERR = 17% excluding benefits from losses averted outside the project area.

3- 3 32-

M01edlterrdneon ief a Sa

f < < s W X ~~~~~~~~~~~~~~~~~oltrroneon 5ea

;Q$CEXS AStv X i 4SC9V\\ I REGIoke ATCFMaT ,nzal, ,Port Said

KrelDawar ~ 'Disuq

0E 2 Bahr Soft v 'l tX 8 ( 2 w /< E

CE 8 Belbois~~~~~~~~~~~~~~~~~~~~~~~~~~

2Mddle ofDelta DRAINAGE I PROJECT X '.X< 1l ,5 Get\

OMIE East Sobol Proiect Completion Report (o,' _ +, /t i

CM 2 East Monofra~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ofr

OM 3 lola ~- Nile Delta }z,MI\C/ / i

II Mohollet Rooh < Drainage I rlc j9/ LEBANON 'SYRIA

Y1II Samotar Ma,n Canals | D/TA 8AREADEa Medazeran,ea, Sea IsRAEt~ - 0-

Xl Upper No 8 ---- Morn Drains I Ros,ETTA AND DAMU/fTA9 rY1IT Segoeyo Moaor Roads N S ~f¢ AR JORDAN

3 West af Delta \ uz au < c'' \,

OW Deligot Rve AkE>A d erafertO S FuaL\\AAUDI

VA Shabo khit IOlEES 0 20 30 40 50 60 ARA R 9r.e :>rz b dnhhhsn Sdte h F EGPUBLI .s,

MILES2 30 400 -;, doo'i ,pi. 00 ip OF r 5 I Wbs 7@eP

30' ~~~~~~~~~~31,. vi, .oepiteoe of .000bovutdeoeoe 32 - S t A N - - 7a

world bank document...nov 15, 2002 · date board approval 06/08/73 06/11/76 07/15/71 /1 a -...

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