Document of

The World Bank

FOR OFFICAL USE ONLY

Repot No. 12889

PROJECT CONPLETION REPORT

PAKISTAN

SALINITY CONTROL AND RECLAMATION PROJECT (SCARP) VI(CREDIT 754-PAK)

MARCH 29, 1994

Agriculture Operations DivisionCountry Department IIISouth Asia Regional Office

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otberwise be disclosed witbout World Bank authorization.

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CURRENCY EQUIVALENTS

Name of currency (abbreviation) = Pakistan Rupee (PRs)

Appraisal Year (1977): US$1.00 = PRs 9.90

Intervening Years (1978-91): US$1.00 = PRs 15.19

Completion Year (1992): US$1.00 = PRs 25.08

FISCAL YEAR

July 1 to June 30

WEIGHTS AND MEASURES

I foot (ft) = 30.5 centimeters (cm)i mile (mi) = 1.609 kilometers (km)1 acre (ac) = 0.405 hectare (ha)I cubic yard (cu.yd) = 0.765 cubic meters (m3)I acre foot (ac.ft) = 1,233.5 me1 cu.ft/sec = 0.0283 m3/sec1 maund = 37.3 kg

ABBREVIATIONS AND GLOSSARY

ADBP Agricultural Development Bank of PakistanCCA Cultivable Command AreaECNEC Executive Committee of the National Economic CouncilFGW Fresh groundwaterGCA Gross Command AreaGOP Government of PakistanGOPunjab Government of PunjabKfW Kreditanstalt fir Wiederaufbau (Germany)Kharif Wet season (mid-April to mid-October)ODA Overseas Development Administration (United Kingdom)O&M Operation and MaintenancePC-I GOP project documentPID Punjab Irrigation DepartmentRabi Dry season (mid-October to mid-April)SGW Saline groundwaterSMO SCARP Monitoring Organization (WAPDA)WAPDA Water and Power Development Authority

FOR OFIMCIAL USE ONLYTHE WORLD BANK

Washington, D.C. 20433U.S.A.

Office of Director-General March 29, 1994Operations Evaluation

MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT

SUBJECT: Project Completion Report on PakistanSalinity Control and Reclamation Proiect (SCARP) VI (Credit 754-PAK)

Attached is the Project Completion Report on Pakistan - SCARP VI (Credit 754-PAK). Parts Iand Ill were prepared by FAO/CP for the South Asia Regional Office and Part 11 by the Borrower.

Built in the 1 930s, the Panjnad system expanded to irrigate 500,000 ha. by diverting Induswater. No drainage was provided; water tables gradually rose. Waterlogging lowered yields and, insaline groundwater (SGW) areas, put land out of production.

The project aimed to remedy this principally (a) by providing public tubewells which, in SGWareas, would pump effluent into open drains for evaporation in the desert; and (b) by restructuringcanals to provide perennial water supplies in SGW areas, while cutting off rabi-season canal water tofresh-groundwater (FGW) areas, thus forcing them to pump.

Implementation was delayed three years when the National Economic Council ordered theproject redesigned. There were further major delays and problems getting local financing. Criticalcanal works were lagged to an unfinanced wphase I. Tubewell installation in FGW areas and on-farmdevelopment were left to farmers. Electrification, cofinanced by KfW, proceeded as per plan but mostfarmers chose diesel pumping. ODA financed civil works and equipment. Drainage worked, but salineeffluent has contaminated about one percent of farmland. The remodelled canals are not used and willnot be unless remaining works are completed.

There have been major agricultural benefits from drainage and improved canal water supply,thanks to the project in SGW areas and largely independent of it in FGW areas. Yields and croppingintensities have exceeded appraisal estimates. Despite problems, the PCR proposes a 23% ERR as'broadly indicative' that the project is satisfactory, but expresses doubts about sustainability. Therewere no institution-building objectives.

The PCR, while factual, does not provide a balanced assessment of project achievements andshortcomings. Half of project expenditures, for canal improvements, have generated no benefits sofar. The explanation for this situation is not pursued. Design problems are glossed over. Neithercauses nor solutions to the leaking saline effluent problem are explored. Part 11 provides technicalcorrections, and emphasizes that another estimated US$136 million would be needed to complete theproject. No comments from cofinanciers were received.

An audit is in progress.

Attachment

This document has a restricted distribution and may be used by recipients only In the performance of theirofficial duties. Its contents may not otherwise be disclosed without World Bank authorIzation.

FOR OFFICIAL USE ONLYPROJECT COMPLETION REPORT

PAKISTAN

SALINITY CONTROL AND RECLAMATION PROJECT (SCARP) VI(Cr. 754-PAK)

TABLE OF CONTENTS

PREFACE ................................ i

EVALUATION SUMMARY ................ ................. iii

PARTI .... ............. 1................

1. Project Identity ................................. 1

2. Background ................................. 1

3. Project Objectives and Description .................................. 2

4. Project Design and Organization . ................................. 3

5. Project Implementation ................................. 4

6. Project Results ................................. 7

7. Sustainability ................................. 9

8. Bank Performance and Lessons Learned ................................. 10

9. Borrower Performance and Lessons Learned ............................... 11

10. Project Relationship ............... 1................. 11

11. Consulting Services .... ..................... 12

12. Project Documentation and Data ............. ............ 12

PART II .......................... 13

PART III .......................... 19

1. Related Bank Loans and/or Credits .......................... 19

2. Project Timetable .......................... 20

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

2. Project Timetable ........................ 20

3. Credit Disbursements .... .................... 20

4. Project Implementation ............................................. 21A. Physical Achievements ........................ 21

5. Project Cost and Financing ............ ............ 22A. Project Cost ........................ 22B. Project Financing ........................ 24

6. Project Results ........................ 25A. Direct Benefits ........................ 25B. Economic Impact ........................ 26C. Financial Impact ........................ 26D. Studies ........................ 27

7. Status of Covenants ........................ 28

8. Use of Bank Resources ........................ 29A. Staff Inputs (staff weeks) ........................ 29B. Missions ........................ 30

ANNEX 1 - Economic Evaluation

PROJECT COMPLETION REPORT

PAKISTAN

SALINITY CONTROL AND RECLAMATION PROJECT (SCARP) VI(Cr. 754-PAK)

PREFACE

1. This is the Project Completion Report (PCR) for the Salinity Control and ReclamationProject (SCARP) VI for which Credit 754-PAK in the amount of US$70 million was approved inDecember 1977. Cofinancing was provided by the Overseas Development Administration (ODA) of theUnited Kingdom (£ 10.8 million grant) and Kreditanstalt flir Wiederaufbau (KfW) of Germany (DM 20million loan). The project was revised and approved by the Government of Pakistan (GOP) in 1981, andthe original credit closing date was moved two years to June 30, 1987. After five one-year extensions,the final closing date was June 30, 1992. The credit account was kept open until October 31, 1992, tofacilitate completion of disbursements. The last disbursement was made on November 19, 1992, raisingthe disbursed total to US$65.94 million (94% of the credit). The unspent balance of US$4.06 millionwas cancelled. Both the ODA grant and the KfW loan were almost fully disbursed.

2. Parts I and III of the PCR were prepared by an FAOlWorld Bank Cooperative Programmission, " which visited Pakistan in February 1993, and reviewed by the Agriculture OperationsDivision, Country Department III, South Asia Region. Preparation was based on the staff appraisalreport and legal documents, IDA supervision reports and project files; a draft Part II produced for GOPby the Pakistan Water and Power Development Authority (WAPDA); field visits; and discussions withGovernment officials and beneficiaries as well as IDA staff associated with the project. The short versionof Part II included in this report was submitted by the Borrower in November 1993.

Comprising Messrs. S. Rajagopal (irrigation engineer, mission leader), K. Selvavinayagam (financial analyst),and T. Bachmann (agronomist).

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PROJECT COMPLETION REPORT

PAKISTAN

SALINITY CONTROL AND RECLAMATION PROJECT (SCARP) VI(Cr. 754-PAK)

EVALUATION SUMMARY

Objectives

1. The project was aimed at raising crop production through lowering and controllinggroundwater levels, and provision of increased irrigation deliveries to leach salts, meet optimum cropwater requirements and increase cropping intensities. It covered 1.27 million ac (Units II, III, IV andV") of the Panjnad Abbasia SCARP area located in southern Punjab. Project objectives were to beattained through investments in tubewell drainage and effluent disposal comprising open drains andevaporation ponds, an electrification network to provide energy for tubewells, and canal remodelling tohandle increased irrigation deliveries. Technical assistance was also provided.

Implementation Experience

2. The project was to be implemented over a six-year period (1978-1983). However, duringthe first three years only preparatory work was undertaken and alternative implementation plans werestudied due to queries raised by GOP and non-approval of the project by the Executive Committee of theNational Economic Council (ECNEC). The project scope was revised and ECNEC approval obtainedin 1981. Alternative 1b of the Final Plan Report prepared by the project consultants was adopted forimplementation. The credit closing date was moved to June 30, 1987, reflecting the delayed start of theproject. The actual implementation period ran from 1981 to 1992 - after five one-year extensions, thefinal credit closing date was June 30, 1992. The main contributory factors for this time overrun were:late GOP approval of the project, paucity of local funds, poor performance of contractors, and increasedscope of work resulting from detailed design being carried out during implementation.

3. A total of 514 drainage tubewells have been installed (123 in Unit IV and 391 in Unit V).There were delays in installation due to equipment and communication problems experienced by theinternational contractor working in Unit V. Substantial delays were encountered in the construction ofunlined drains and cross-drainage structures. However, these delays had no significant impact on thecritical path schedules. The tubewells and drains in Unit V were operated initially by the implementingagency, WAPDA, and later turned over to the Punjab Irrigation Department (PID), the operating agency.There were difficulties in handing over these works because of the lack of adequate operating funds inPID's budget. The PCR mission was informed that these difficulties have been overcome and PID wasable to maintain and operate these tubewells and drains. At the time of the mission's visit, the tubewellsand drains in Unit IV were still operated by WAPDA. Some of the tubewells were inoperational due totheft of automatic devices such as trip switches.

" Unit II and m areas (726,000 ac) are underlain by fresh groundwater, Unit IV and V areas (544,000 ac) bysaline groundwater.

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4. The drainage tubewell effluent is to be sent to evaporation ponds constructed in the CholistanDesert by making use of interdunal depressions. Although revised estimates called for 67,500 ac of pondarea" and IDA later agreed to fund up to 60,000 ac, only about 33,000 ac have been provided. Afterthe Government of Sindh withdrew its permission in early 1990 to have ponds located on its territory,new suitable areas of 19,000 ac were found in Punjab, but construction was not undertaken as WAPDAand its consultants considered 33,000 ac sufficient for the time being.' About six months after fillingof the ponds began in 1989, seepage of highly saline water from the evaporation ponds was observed inadjacent irrigated areas. This problem is continuing and so far about 12,000 ac of irrigated land havebeen damaged and about 1,000 families affected.' WAPDA initiated studies to find solutions to thisproblem in 1990 but these studies have not produced conclusive results. The seepage problem requiresthat appropriate solutions be found and implemented quickly, since the project would be compromisedif saline effluent cannot be disposed of as originally envisaged.

5. Construction of an electrification network including six grid stations, 132 kv and 11 kvtransmission lines was carried out to provide energy for public drainage tubewells (Units IV and V) andencourage installation of private irrigation tubewells (Units II and o). Procurement of equipmentfinanced by the KfW loan was considerably delayed due to WAPDA's internal procedures. Even thoughthe electrification network in Units II and m was completed by December 1990, the outcome has beenfar less then anticipated. This is due to (i) higher cost of operation of electrically driven tubewells ascompared to diesel tubewells, which have become very economical in recent years, and (ii) canaloperation problems -- rabi (dry season) water for Unit V still flows through Units II and III thusproviding no incentive for farmers to tap an alternate source of water for their rabi crops.

6. Canal improvement works consisted of developing a parallel system to deliver water to theperennial irrigation areas, with associated modifications to the existing Panjnad delivery system andmodifications to distributaries and minors to handle increased irrigation deliveries. Substantial delays wereencountered in construction. Performance of contractors was poor. Modifications necessary in thePanjnad main system to operate the parallel system have not yet been carried out (see para 9).Installation of gates on regulators at various places has not yet been completed. Investments in the canalcomponent have therefore not been put to use yet. Additional work to be carried out has been identifiedand a new PC-I prepared for submission to the Government of Punjab (GOPunjab) and GOP.

7. Baseline (1980-81) and three follow-up agro-socio-economic surveys have been conductedduring project implementation to record/monitor changes in crop production and socio-economicconditions. The third follow-up report covering 1989-90 was issued in December 1991.

8. In mid-1992, total project cost was PRs 3.59 billion (US$195 million) compared to the 1981(approved PC-I) estimate of PRs 1.88 billion (US$190 million) - an increase of 91 % in PRs but only 3%in US$ terms. The major part of the cost overrun was attributable to civil works whose share increasedto 66% of total cost from about 50% in the 1981 PC-I.

" Final Plan Report 1981, Vol. 1, pp. 6-12.21 See WAPDA letter of April 25, 1990; May 1990 supervision aide memoire, para 4.01; and WAPDA letter of

October 2, 1990.3/ See Part n, para 21 a).

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Project Results

9. The project had mixed results. It achieved most of its objectives (albeit with considerabledelay) in terms of works constructed in Units IV and V (perennial irrigation areas). However, canalremodelling works in Units II and m (non-perennial irrigation areas), deferred to a later phase in theFinal Plan Report, are yet to start. Private tubewell installation has also lagged behind earlierexpectations. Although it is too early for a definite assessment of economic performance, agro-economicsurveys (para 7) indicate that higher crop yields are now being obtained than estimated in the SAR.

10. The reestimated economic rate of return is 23%, against 19% estimated at appraisal and20% at project revision in 1981. Given that actual investment costs are still partly estimated, and theentirety of project benefits is estimated, the recalculated ERR should be treated as broadly indicative.

Project Sustainability

11. Project sustainability depends on the continuity of production benefits which depend to alarge extent on high and stable crop yields. These in turn are governed by the successful operation ofthe tubewell and drainage effluent disposal system and the irrigation delivery network. Project operationwould be compromised unless a satisfactory solution to the problem of seepage from the evaporationponds is found in the near future. In addition, modifications of the existing canal network (Panjnad maincanal, Minchin, Rahimyarkhan and Sadiq Branch Canals) are necessary before the project can be operatedas designed and other project investments (Abbasia Link Canal, Abbasia and Sadiq Feeders) put to properuse. In other words, although the works cofinanced by IDA have been substantially completed, theproject at present is unfinished and therefore cannot be sustained. Assuming that these problems arecorrected in the near future, sustainability would depend on adequate funding for operation andmaintenance (O&M). Adequate manpower and equipment have been made available to PID, but assuredavailability of O&M funds still remains a problem. Willingness of the beneficiaries to contribute moretowards meeting the O&M costs is important.

Findings and Lessons Learned

12. The main lessons learned from the project are that: (a) financial capability and willingnessof the Borrower to execute the project should be ascertained carefully before credit approval; (b) it isimportant to prepare final designs of canal and drainage works for the first project year prior to creditnegotiations, and to allow adequate time for these tasks in the implementation schedule; (c) managementskills and procedures of the implementing agency, including contract packaging, award and supervision,should be analyzed and provisions made for necessary improvements during project implementation; (d)meaningful agro-economic evaluation becomes possible when the base-line survey is carried out prior toproject start and follow-up surveys are made during and after project implementation; (e) a specificcommitment should be obtained from the Borrower to provide annual budgetary allocations for regularmaintenance of project facilities.

1

PROJECT COMPLETION REPORT

PAKISTAN

SALINITY CONTROL AND RECLAMATION PROJECT (SCARP) VI(Cr. 754-PAK)

PART I

1. Project Identity

Project Name Salinity Control and Reclamation Project (SCARP) VI

Credit No. 754-PAK

RVP Unit South Asia Region

Country Pakistan

Sector : Agriculture

Subsectors Irrigation and Drainage

2. Background

2.1 Pakistan's economy has traditionally relied heavily on agriculture as a source of growth withirrigated agriculture being the dominant subsector. Great efforts and resources have been invested inharnessing water from the Indus River and its tributaries on the one hand and from underground aquiferson the other. Drainage, a vital adjunct to irrigation, was not provided on any scale until the 1960s, andtherefore the watertable rose in many areas to levels where it hampered crop production. Also, withincreased areas brought under irrigation without corresponding increases in irrigation deliveries, irrigationwater was often thinly spread, allowing salts to build up in the crop root zone. Consequently,waterlogging and salinization curtailed production in affected areas.

2.2 The first project under GOP's Salinity Control and Reclamation Program was conceivedin the late 1950s and became operational in 1963. By November 1976, more than 8,000 publicly ownedtubewells and over 150,000 privately owned tubewells had been installed. In many parts ofRahimyarkhan District (Southern Punjab), in both fresh and saline groundwater zones, the watertable wasso high that it impeded profitable cultivation. As a result, fresh water tubewell development, whilesubstantial, lagged behind that of the rest of the Punjab. In addition to the effects of high water table,some of the soils had become saline due to deliberate under-irrigation by farmers. To remedy theseshortcomings, a project plan was prepared in 1968 and the need for SCARP VI was confirmed when, in

2

1973, the Federal Planning Commission prepared its "proposals for an accelerated Program for Salinityand Waterlogging Control".

2.3 The Bank Group has been involved in Pakistan's water sector for many years, and aconsiderable share of its lending to Pakistan has been for agriculture and irrigation. SCARP VI was oneof the projects it helped finance.

3. Project Objectives and Description

3.1 Project objectives were to:

(i) lower and control the groundwater table at levels which would facilitateagricultural development and prevent soil salinization;

(ii) provide increased surface water deliveries, mainly in kharif when there issurplus water in the rivers, to give adequate supplies for good irrigationmanagement practices and higher cropping intensity;

(iii) provide additional L& irrigation to non-perennial areas by increasedexploitation of fresh groundwater; and

(iv) dispose of saline drainage effluent safely.

3.2 As agreed at negotiations, these objectives were to be achieved through implementation ofthe following activities:

(a) Construction in Unit II (seasonally irrigated, fresh groundwater) of about 930tubewells of various discharge capacities, and appurtenant works; construction ofabout 250 drainage tubewells in Unit V (perennially irrigated, salinegroundwater); construction of disposal works, including pumping stations andevaporation ponds for saline effluent; construction of an electrification networkto provide energy for the public tubewells and pumping stations; construction orenlargement, as necessary, of canals and structures, irrigation outlets andwatercourses; and provision of gypsum for soil reclamation on about 40,000acres.

(b) Provision of (i) vehicles and equipment for project execution and management;(ii) communication and computer equipment to improve operation of the irrigationand drainage works in the Panjnad Barrage command; (iii) equipment and vehiclesfor the soils laboratory at Bahawalpur; (iv) surveying instruments; (v) tractors forland levelling; and (vi) equipment for the electrification network.

(c) Provision of credit to farmers through participating banks for installation of about2,300 tubewells in Unit III, and land levelling.

(d) Provision of about 420 staff-months of consultancy services for projectimplementation and preparation of other irrigation and drainage projects.

3

Total project costs, over a six-year period, were estimated to be about US$170 million (PRs 1,683million). The IDA credit of US$70 million, U.K. grant of US$15 million equivalent and KfW loan ofUS$8.3 million equivalent were to cover 55% of total cost, while domestic sources (Government,participating banks and beneficiaries) were to contribute the remaining 45%. The project was to beimplemented by WAPDA with participation of the Agricultural Development Bank of Pakistan (ADBP)and other Government agencies.

4. Project Design and Organization

4.1 The project was identified in the Bank's Indus Special Study Report of 1967. A feasibilitystudy was prepared for GOP/WAPDA by an international consulting firm in 1968. This study wasupdated in 1975 by a Pakistani consulting firm. The project was well conceived, forming part of theaccelerated reclamation program (para 2.2) and an integral part of water sector development, specificallyaimed at addressing the twin problems of waterlogging and salinity on about 1.27 million acres ofcultivable command area (CCA)".

4.2 Given the budgetary difficulties, as well as the large area and the complexity of the project,the scope of the project as appraised was probably too ambitious and time allotted for its implementationtoo short. Although the IDA credit became effective in December 1978, no significant progress inphysical implementation was possible until the scope of the project was revised and ECNEC approvalobtained in 1981.

4.3 The revisions included: (i) deletion of on-farm investments, financing for which was to beprovided instead under the fourth IDA credit to ADBP (Cr. 957-PAK); (ii) deferral to a later phase of(a) drainage tubewells in Unit II - until assessment of the impact on the groundwater table of private(irrigation) tubewell installation in the area; (b) remodelling of minor canals in Units n and HI - untilthe scope of private tubewell development in these areas was accurately estimated; (c) drainage tubewellsin Units IV and V originally proposed for locations not critically susceptible to waterlogging problems;and (d) surface drains and disposal system to the extent required for (a) to (c); (iii) assumption thatprivate tubewells installed in Units II and HI would be electrically rather than diesel powered; and (iv)replacement of the originally proposed two-mile electrification grid for tubewell power supply by a one-mile grid as an incentive to farmers who would have to spend less for the shorter hook-up lines. Theapproved project costs (PC-I, February 1981) were estimated to be US$190 million (PRs 1,882 million).ODA increased its grant to US$19.4 million equivalent, and KfW and IDA maintained their originalcontributions to the project.

4.4 The above revisions were intended to provide some advantages. Installation of privatetubewells in Unit H as well as Unit m would mobilize farmers' savings and lead to more efficient watermanagement. Certain investments in public tubewells were deferred until their installation was warranted.Electrically powered tubewells would mean lower farmer investment and O&M costs. However, thesubsidies envisaged meant higher cost to Government. The revised project was found to be technicallyand economically viable.

The Allahabad Pilot Project (Unit I) had already been completed with Goverment funds covering an area of200,000 ac, leaving an ar of 1.27 million acres distributed over Units n (338,000 Sc), m (388,000 Sc), IV(76,000 ac) and V (468,000 ac).

4

4.5 For the most part, the project was planned, designed and implemented by WAPDA underthe General Manager (Water) Central with a Chief Engineer stationed at Rahimyarkhan in charge of theproject. The timing of the project was appropriate. Implementation was achieved with the in-housecapability of WAPDA assisted by consultants in field survey, procurement of equipment, preparation oftenders, supervision and execution of project works.

5. Project Implementation

5.1 Credit Effectiveness. Even though the Development Credit Agreement was signed inJanuary 1978, the credit became effective only in December 1978 due to delay in appointment ofconsultants by WAPDA, which was a condition of effectiveness. However, project implementation didnot start immediately thereafter because of minimal Rupee funding due to serious financial constraintsand non-approval of the PC-I by ECNEC. After a delay of nearly three years, physical implementationbegan in 1981 based on Alternative III b of the Final Plan Report prepared by the project consultants.

5.2 Canal Improvements. Canal improvement works comprised two parts: improvements tothe main and branch canals delivering water to the distributaries, and improvements to the distributionsystem itself. The latter was carried out by the Punjab Irrigation Department (PID) under the overallresponsibility of WAPDA. The improvements to the main and branch canals consisted of developing aparallel system, to deliver irrigation water to Units IV and V on a perennial basis and to supply UnitsHI and m on a non-perennial basis (during khaif only). In the pre-project situation Unit V was suppliedby branch canals offtaking from Panjnad main canal and passing through Units II and III. Seepage lossesfrom these canals aggravated the waterlogging problem in these two Units. A new (earthen) canal, calledAbbasia Link Canal, was to be constructed, the Abbasia and Sadiq Feeders were to be constructed andlined, and the Lower Sadiq Branch Canal was to be modified and lined to handle the irrigation deliveriesin Units IV and V. The Panjnad main canal, the Minchin, Rahimyarkhan and Sadiq Branch Canals wereto be modified to carry only flows necessary in the kharif season for Units II and III.

5.3 The Abbasia Link Canal was excavated and essentially completed in 1984. However, theheadworks necessary to divert water from the river were not complete until 1990. Thus, no water couldhave been diverted through this canal until at least 1990. In fact, some of the regulators did not havegates in place even at the time of the PCR mission's visit in February 1993." Abbasia Link Canal isstill not in service due to these and other reasons explained in para 5.7 below. Its excavated sections arenow covered with bushes and small trees and would need cleaning before it could be put into service.The construction quality of structures built on the canal is good; in particular, the control structure at RD238 is quite impressive in the finish quality of the concrete and joint construction.

5.4 The Abbasia Feeder, which takes off from the Abbasia Link Canal, was completed onlyin 1990 even though work commenced in 1986. The brick lining work is good. This canal has also nothad any water so far. Salt pockets are appearing on the lining due to evaporation of seepage waterentering the canal bank in cut sections. Unless water is let into this canal fairly quickly, deteriorationof the lining would start.

5.5 The Sadiq Feeder, which takes off from Abbasia Feeder, was completed only in 1992 eventhough work started in 1986. The work was given out in two contracts (SVIC-345, RD 0 to 80; and

" See Part n, pas 21 b).

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SVIC-346, RD 80 to 162). Contract No. SVIC-345 was completed in 1990. The SVIC-346 contractorwas unable to execute the work and was expelled; the remaining work was split into three smallercontracts, RD 80 to 100, RD 100 to 122, and RD 122 to 162, which were awarded in 1991. The workwas completed in 1992. Since the smaller contracts were executed efficiently within twelve months, itwould appear that delays in the construction of the feeders could have been avoided, or at least reduced,by proper contract sizing and better contractor selection in the first place. This canal, of course, has notyet received any water either. The brick lining work is good.

5.6 The Lower Sadiq Branch Canal was modified and lined. The work was given out as asingle contract in 1986 but the contractor was unable to execute the work. He was expelled, and theremaining work split into six smaller contracts (RD 0 to 29+400; RD 29+400 to 50+800; RD 50+800to 66+370; RD 66+370 to 86+00; RD 86+00 to 88+00; and RD 97+00 to RD 100+795 plus RD102+585 to RD 103+248), which were awarded in 1991. The work had to be carried out usingdiversions since Lower Sadiq Branch supplies perennial areas. The work was completed in 1992. Sixyears lapsed for work that was actually carried out in little over one year. Since Lower Sadiq Branchis still getting its supplies through Sadiq Branch Canal, it is flowing with irrigation water. However, theobjective of operating a parallel system, with Lower Sadiq Branch being supplied through the SadiqFeeder has not been achieved yet.

5.7 The Abbasia Link, Abbasia Feeder and Sadiq Feeder system cannot be operated unless atleast the Minchin and Rahimyarkhan Branch canals are modified." Additional work necessary has beenidentified and a new PC-I is currently under preparation. For the time being, the investments made inthe Abbasia Link, Abbasia Feeder and Sadiq Feeder system are not providing any benefits.

5.8 Drainage Improvements. 514 deep drainage tubewells have been installed in the projectarea, of which 391 in Unit V and 123 in Unit IV. The tubewells have been placed on a parallel drainconcept. Both carrier and surface drains have been constructed, totalling 444 km in length. Thetubewells are now operating, except in some areas of Unit IV where automatic devices for operation (suchas trip switches) had been installed. These devices have been stolen and, with spares not readilyavailable, the tubewells have remained inoperational. The tubewells were installed by an internationalcontractor over a period of about 30 months with a 12-month completion delay. The delay was due tolack of experience in drilling tubewells in waterlogged areas (equipment difficulties) and communicationproblems with counterpart staff because of insufficient English language skills. However, theconstruction quality appears to be good.

5.9 Construction of unlined drains and cross drainage structures was carried out by localcontractors. Substantial delays were encountered in contract execution. Contracts were awarded startingin 1983 with completion periods ranging from six months to one year in most cases, but were completedwith one to two years delay. However, these delays did not affect tubewell performance since thetubewells were completed only in 1989 and most of the drains were in place by then.

5.10 The tubewell drainage effluent (estimated at 600 mcm/yr) is to be sent to evaporation pondsconstructed in the Cholistan Desert making use of interdunal depressions. Originally, these ponds wereto be constructed using the proceeds of the U.K. grant. As grant funds were exhausted, IDA agreed totake over financing of the ponds. The 1981 estimate of the surface area required for the ponds was

" For completc pallel system operation the Panjnad Main Canal and Sadiq Branch Canal will have to be modified as originallyplanned.

6

67,500 ac". IDA agreed to fund up to 60,000 ac. At present, only 33,000 ac have been provided asa result of the refusal of the Sindh Government to have ponds located on its territory, and the projectconsultants' judgement (endorsed by WAPDA) that this pond area was adequate for the present needs -until future monitoring results showed that additional area was required' . About six months after fillingof the ponds began in 1989, seepage of highly saline water from the evaporation ponds was observed inadjacent irrigated areas. This problem is continuing and so far about 12,000 ac of irrigated land havebeen damaged.' Considering that proper disposal of saline effluent is vital for successful operation ofthe project, design and construction of the evaporation ponds should have been given greater care andattention. It appears that the system was not designed with attention to detail. Even though 12,000 acout of a potential 544,000 ac of benefitting area (Units IV and V) is a small percentage, the problemnevertheless requires attention. In 1990, WAPDA initiated studies to find a solution to the problem, butthe studies have not provided conclusive results. Affected farmers have not been compensated.Appropriate solutions would have to be found and implemented quickly since the project would becompromised if saline effluent cannot be disposed of as originally envisaged.

5.11 Groundwater levels and soil salinity in the project area are being monitored on a twice-yearly basis (at the end of rabi and kharifl by the SCARP Monitoring Organization (SMO) of WAPDA.In addition, soil salinity surveys have been carried out on a regular basis. Based on these surveys andPCR mission interviews with beneficiaries, it can be concluded that drainage of waterlogged lands hasbeen successful so far in Units IV and V and agricultural benefits have begun to accrue (see para 5.14).

5.12 Electrification Network. Construction of an electrification network including three newgrid stations, expansion of three existing stations, 132 KV and 11 KV transmission lines in a one-milegrid was carried out, with electrification equipment financed by the KfW loan and civil works by the IDAcredit. There were considerable delays in the procurement of equipment due to WAPDA's time-consuming procedures. Contracts were awarded in 1985 with expected completion in 1987. However,the electrification network was completed to a large extent only in 1989. Since tubewell installation wasalso completed in that year only, no significant delays in the operation of the drainage system resultedfrom the delayed completion of the electrification network.

5.13 Even though electrification has been provided in Units II and III, installation of privatetubewells has been less than anticipated. Out of 2,850 tubewells envisaged in the 1981 PC-I, only about1,000 have been installed by farmers. This is due to canal operation problems (rb water for Unit Vstill flowing through Units II and III and thus providing no incentive for farmers to tap an alternate sourceof water for their rabi crops) and the high cost of electricity. In recent years, better-performing dieselengines have come on the market which are inexpensive to buy and efficient to operate. Smaller farmerstend to install diesel-operated tubewells, whereas larger farmers prefer electric tubewells for which powercan be obtained at a flat tariff rate irrespective of usage. In retrospect, it would have been prudent forthe Final Plan Report to drop electrification in Units II and III. This would have released some fundsto modify the branch canals in Units II and III, which is necessary for satisfactory performance of othercanals built in Units IV and V and to minimize further waterlogging in Units II and III. Limitation ofGovernment funds has ultimately forced the postponement of canal remodelling works in Units II and IIIbeyond the IDA credit closing date, which has resulted in idling of important investments made in theAbbasia Link, Abbasia Feeder and Lower Sadiq Feeder Canals.

" Final Plan Report - 1981, pages 6-12.2 Land for additional 19,000 ac pond arma is available, if noeded, as per WAPDA letter to IDA of April 1990.3 See Part II, pam 21 c).

7

5.14 Agro-Sodo-Econondc Surveys. A baseline survey (1980-81) and three follow-up surveys(1983-84, 1986-87, and 1989-90) were conducted to record/monitor changes in crop production andsocio-economic conditions during and after the physical implementation of project components. Thesesurveys provided useful information in assessing the impact of the project on crop production and farmincomes.

5.15 Project Cost and Flnancing. In mid-1992, the total cost of the project was PRs 3.59billion (US$195 million), compared to the revised cost estimate of PRs 1.88 billion (US$190 million),representing a 91% overrun in Rupee terms but only 3% in US dollar terms (reflecting the substantialdevaluation of the Pakistan Rupee against the US dollar). The share of civil works in the mid-1992 totalwas 66%, compared to about 50% in the 1981 estimate. The average cost per acre, based on theoriginally envisaged area of 1.27 million ac and the revised cost of PRs 1.88 billion, would have beenabout PRs 1,480. On the basis of the area actually benefited" and the mid-1992 cost total, the averagecost is PRs 6,370/ac. To complete the project as designed and obtain additional irrigation deliveries, anadditional expenditure of about PRs 1.1 billion would be required. Since project implementation wasslow, an undisbursed IDA credit balance of US$4.06 million remained in 1992. After an initial two-yearshift and five subsequent one-year extensions, IDA was unable to agree to GOP's request for furtherextension of the credit closing date. The undisbursed balance was cancelled on November 19, 1992.

6. Project Results

6.1 General. The project had mixed results. While it achieved most of its objectives in termsof drainage construction in Units IV and V, canal remodelling necessary to provide additional irrigationdeliveries is not yet completed. Private tubewell development has also lagged behind estimates - 1,000actual compared to 2,850 planned. It is rather premature to attempt an evaluation of improvement inO&M performance and hence crop production benefits. However, the agro-socio-economic surveys showthat higher yields are now being obtained than estimated in the SAR for full development, due primarilyto lowering of watertables.

6.2 Crop Production. Using the data provided by the agro-socio-economic surveys (para5.14), the PCR mission was able to make a fairly reliable estimate of the potential impact of the projecton crop yields and production (see Part III/6A). As a result of reduced waterlogging and salinization andprovision of increased irrigation deliveries2', overall cropping intensity has reached 147 % thus exceedingthe SAR estimate (128%) by about 19%. Cropping intensity is slightly higher in the previouslywaterlogged and saline areas of Units IV and V (150%) than in Units II and III (144%).

6.3 Changes in overall cropping pattern compared to SAR assumptions are primarily in thereplacement of low value by high value crops. Cotton has reached 51 % in kharif and exceeds the SARestimate by 19%; wheat occupies 48% of the CCA (SAR: 37%); orchards have increased to 7% (SAR:4%); and maize, millet, pulses and oilseed have dropped to about 1 % (SAR: 7%). Larger farmers growmore cotton than small farmers, and small farmers grow considerably more wheat than larger farmers.The area under fodder crops remained basically unchanged.

5 S44,000 ae in Unit IV and V, plu 20,000 ac in Units 1 and III - about 20 ac conmuanded by each of the 1,000 electrictubewell inalcd -- or a total of 564,000 ac.

V Irrigation deliverics in exces of the 5 cusecs quota arm being nade by encroaching on freboard of branch channels.

8

6.4 Economic Impact. In estimating the project's economic impact, assumptions had to bemade regarding: (a) investments still needed to complete the project in Units II and HI; (b) crop mix atfull development; and (c) higher cropping intensity and yields than projected at appraisal. At the timeof the PCR mission's visit (February 1993), canal remodelling in Units H and m was expected to be doneover four years (1994-1997) at a cost of about PRs 1.1 billion. As shown in Part III/6A, the expectedcrop mix does not represent a strong departure from appraisal estimates, except for vegetables andpossibly orchards. Higher cropping intensity and crop yields than estimated at appraisal for fulldevelopment are being achieved now as evidenced by the latest agro-socio-economic survey, aided byavailability of agricultural support services, albeit at a less effective level than originally foreseen. Sincethese higher yields are based on a short time series, they have been held constant for the period ofanalysis, ensuring that the forecast for a 30-year period is kept at a reasonable level. Incrementalproduction benefits have been estimated assuming "without project" situation as projected in the SAR and"future with project" suituation as described above.

6.5 On the basis of these assumptions and others mentioned in Part III/6B and Annex 1, therevised economic rate of return (ERR) is 23%, compared with 19% expected at appraisal. The ERR hasbeen recalculated only for the project as a whole as it is difficult to distinguish with certainty the benefitsderived from different Units. In sum, the improved ERR is due to higher crop yields than projected atappraisal which more than offset the adverse factors including delay in the implementation of civil works,particularly canal remodelling in Units II and III, and higher investment costs per benefited area thanestimated at appraisal.

6.6 Given that part of investment costs and the entirety of project benefits are estimated, therecalculated ERR should be treated as broadly indicative. This is reinforced by the fact that crop yieldscannot be sustained unless adequate funds are allocated for the operation and maintenance of projectirrigation and drainage facilities. Sensitivity analysis shows that a combined reduction in benefits andincrease in costs by 20% will lower the ERR to 16%. A similar reduction may result from delay incompletion of unfinished canal remodelling works accompanied by cost increases and consequential delayin reaching full development production.

6.7 Environmental Impact. Implementation of the project has resulted in lowered water tablesand increased agricultural production in a major part of the project area. Areas that had stagnant poolsdue to waterlogging have been reduced and therefore mosquito breeding grounds nearly eliminated. Farmincomes would increase significantly at full development. In these aspects the project has had a positiveimpact on the environment.

6.8 The saline drainage effluent discharged into the evaporation ponds in the Cholistan deserthas caused unexpected seepage that has affected already about 12,000 acres and dislocated about 1,000farming families." As noted above (para 5.10), this problem has to be studied carefully so that furthernegative impact can be prevented.

6.9 The construction of evaporation ponds may have created new mosquito breeding areas. TheHealth Department advises that a particular species of mosquitos A. stephensi, which is a secondaryvector for malaria, can breed in saline water. The main malarial vector A. culicifacies prefers cleanstagnant water but sometimes does forced breeding in saline water as well. The PCR mission obtainedmalarial survey records from the Health Department, and it appears that no fresh incidence of malaria

It See Pat II, pam 21 d).

9

has been reported in the villages located near the ponds since their filling. However, this aspect has tobe monitored further.

6.10 It is possible to introduce a fish species lUapia in saline water (7lUapia nilotica, MUapiamasambica and lUapia aurea are suitable). The production rate has been estimated by the FisheriesDepartment to be 400 kg/ac/yr. The PCR mission was advised that already some lease agreements havebeen signed in this regard. The additional employment provided and the availability of a protein sourcewould be a positive impact of the project.

7. Sustainability

7.1 Project sustainability depends on the continuity of production benefits, which are determinedto a large extent by high and stable crop yields. These in turn are governed by the availability ofirrigation water and drainage facilities. Continued operation of the project would be compromised unlessa satisfactory solution to the problems caused by the evaporation ponds is found in the near future. Inaddition, to allow operation of the canal network as intended, modifications of the Panjnad main canal,Minchin, Rahimyar Khan and Sadiq Branch canals are necessary before other project investments can beput to proper use. In other words, although the works cofinanced by IDA have been substantiallycompleted, the project at present is unfinished and therefore cannot be sustained. Assuming that theseproblems are corrected soon (by 1997), project sustainability would depend on: (a) having trained staffin place with a low turnover rate together with adequate equipment to maintain the system; (b) ensuringthe O&M costs are fully met; and (c) obtaining not only local acceptance but active local support for theproject, to minimize the risk of neglect, deterioration, and vandalism. The likelihood of meeting theseconditions is discussed below.

7.2 PID has been operating the drainage system for over two years. Adequate equipment (2draglines, 1 motor grader, 1 backhoe, 2 tractor trailers, 1 dozer, 1 truck, 1 portable generator) have beentransferred to PID in good working condition. The Department also has adequate trained staff, so itappears that condition (a) would be satisfied. Farmers interviewed by the PCR mission" expressed theirsatisfaction about the performance of the project. Continued proper operation of the drainage tubewellsand effluent disposal system would maintain farmers' interest in the system. With appropriate extensionmessages, it would be possible to encourage farmers to actively support project activities. However,availability of adequate funds remains a problem, even though PID and GOPunjab assured the PCRmission that appropriate budgetary provisions have been made for the current year and would be madein the future. While there is a consensus on the need to increase the level of water rates in agriculture,its political and social acceptability remains critical. For the sustainability of the project's irrigation anddrainage system, given the limitations of the Government's ability to meet O&M costs fully, it isimportant that farmers contribute more towards meeting these costs.

7.3 Currently, O&M costs of irrigation projects and investment costs of on-farm watermanagement projects are partially recovered through Provincial water charges and payment of a shareof the costs, respectively. Irrigation water charges are levied according to the cropped area and the cropsgrown. In Punjab, water charges have almost doubled since 1978, and revenue from water charges atpresent levels (PRs 53/ac on average) covers almost 80% of estimated annual cost of O&M (PRs 84.5million). Water charges at present levels for a farmer with 5 ac imply a payment equivalent to 1% of

" Thow not affeed by evaporation pond beepage.

10

gross farm income, 1.6% of net farm income, or 3% of total production costs. An increase of 25% (asrecommended by the Nationwide Study for Improving Procedures for Assessment and Collection of WaterCharges and Drainage Cess, 1990), which would cover estimated O&M costs, would imply a paymentequivalent to 1.3% of gross farm income, 2% of net farm income, or 4% of total production costs.While such increases are not insignificant, they appear to be feasible from the perspective of farmers'ability to pay, especially considering that real net farm incomes would have risen by about 12-60% at fulldevelopment.

8. Bank Perfornance and Lessons Lened

8.1 The Bank plays an important role in meeting Pakistan's resource requirements for irrigationdevelopment. Through SCARP VI, the Bank, along with ODA and KfW, continued its involvement inaddressing the problems of waterlogging and salinity. It also provided for a study on water charges andintroduced covenants in the legal documents for the increase of revenue from water charges. At theBorrower's request, several amendments were made to the Development Credit Agreement in line withchanging project needs. These included the significant revision of the project, a change in thedisbursement rate for civil works, reallocation of credit proceeds, and extensions of the credit closingdate.

8.2 The Bank carried out 16 regular supervision missions and three technical missions, of whicheight jointly with ODA/KfW. Continuity of supervision staff was reasonably well maintained, despitethe prolonged implementation period. The resident mission in Islamabad assured a continuous dialoguewith the Borrower and facilitated project supervision.

8.3 Main lessons learned from the project are:

(a) Investment in irrigation and drainage has been economically sound. Agriculturalsupport services should be strengthened to make this investment effective.

(b) The project was severely affected by time and cost overruns, partly due to delaysin Government funding, inflation, problems with contractors as well as insufficientpreparation at the time of appraisal. It is important to ensure adequate preparationof final designs prior to loan/credit negotiations. Where this is not possible anddesigns are finalized during implementation, sufficient time should be allowed inthe implementation schedule, and the project should be reassessed for technicaland economic viability.

(c) Meaningful agro-economic evaluation becomes possible when a base-line surveyis carried out prior to initiating project works and follow-up surveys areconducted regularly during and after project implementation.

(d) Commitment of the Borrower is a pre-requisite for project success. It must beascertained before loan/credit approval".

" Conacqucitly, the Bank Grup has made ECNEC approval a condition of la/credit effoctivenas since 1981.

11

(e) It is desirable to obtain a specific commitment from the Borrower to provideannual budgetary provisions for regular maintenance of project facilities.

9. Borrower Performance and Lessons Learned

9.1 The overall performance of the Borrower throughout project implementation was belowexpectations. Problem areas were delay in starting the project; contract packaging, contractor selectionand management, which led to considerable delay in project implementation; and taking over andoperation of drainage tubewells by PID. WAPDA was assisted by project consultants in the preparationof final project designs, tenders, award of contracts, and construction supervision.

9.2 Lessons learned can be summarized as follows:

(a) Adequate time should be allowed in the implementation schedule for preparationof final designs if this has not been done prior to appraisal.

(b) Management skills and procedures of the implementing agency should bereviewed and improved, if necessary. More decentralized decision-making isneeded.

(c) Selection procedures for the award of contracts may require improvement, orexisting procedures more careful application.

(d) Capability of local contractors (both financial and technical) should be analyzedprior to determining contract packages.

(e) Timely release of funds is necessary for smooth project implementation.

(f) Operating agency and implementing agency should overlap during projectimplementation to facilitate handing over of completed works.

(g) Monitoring and evaluation surveys should be continued to evaluate project impact.

10. Project Relationship

10.1 The implementing agency has had a long association with the Bank. The relationship wasgood and there was a learning attitude on both sides. This was due in part to Pakistan's long experiencein irrigation network design and in part to the quality of WAPDA's management team. While mostproject specific problems were eventually resolved, the issues of seepage from evaporation ponds andfunding for canal remodelling works in Units II and III are still unresolved.

10.2 Bank and Borrower relationships with the cofinanciers (ODA and KfW) and other relevantparties including consultants have been satisfactory.

12

11. Consuldtng Servce

11.1 Consultants" provided valuable assistance to WAPDA in preparing the final project plan,designs, cost estimates, and contract documents; bid evaluation and contract award; and supervisingconstruction of works. When the seepage from the evaporation ponds appeared, WAPDA requested theconsultants to study the problem. Studies were carried out but the results have been inconclusive.

12. Project Documentadon and Data

12.1 As already noted (paras 4.2 and 4.3), the project was restructured in 1981. No new SARwas produced. The original SAR thus provided only a partial famework for project implementation, butit was supplemented by the Final Plan Report. In addition, clarification and guidance were provided byBank missions.

12.2 Information for PCR preparation was readily available. A good record of physical andfinancial progress in works and other activities was available, and also base-line and follow-up agro-economic surveys. In addition, a draft PCR (Part II) prepared by WAPDA provided relevantinformation.

" A Pakigtni-Dutch joint ventum Muinod thmughout pzoi:t inmplemmation.

13

PART H"

Oeneral

1. The Consultant's 'FINAL PLAN' (March 1981) envisaged the followingcomponents and Scope of Work:

a) Irrigation:New feeders/link canal- unlined 58 km- lined 107 kmRemodelling main & branch canals 190 kmRemodelling distributaries & minors 1871 kmNew outlets 1500 Nos.

b) Drainage:Drainage tubewells(cap. 45 to 90 1/s) 431Open surface drains 460 kmEvaporation ponds 67500 ac

c) Electrification:New gridstations (132/11 RV) 3Extension of existing substations(132/11 KV) 4132 KV transmission lines 80 km11 KV distribution lines 2850 kmPower requirement 101 MVA

2. The scope had to be revised somewhat due to actual field conditionsencountered during implementation. The modified Scope of Work accordingto which the project has been constructed is:

a) Irrigation:New feeders/link canal- unlined 73 km- lined 107 kmRemodelling of existing canals 180 km

b) prainaj e:Drainage tubewells 514Surface drains 444 kmEvaporation ponds 33000 acPumping stations 3 Nos.

c) Electrification:Construction of substations 6132 KV transmission lines 68 km11 KV distribution lines 3045 km

" Received with lecr datod November 8, 1993.

14

3. Although the World Bank's credit has been terminated with effect from June30, 1992, the Project as conceived by the Consulants cannot be regarded ascomplete. The following works still remain to be done:

a) Construction of 700 outlets.b) Remodelling of 1046 km of irrigation channels.C) Suitable reclamation measures for pond affected areas.

These works could not be undertaken during the currency of the World Bank'scredit due to non-availability of adequate local funds during the periodof implementation as a result of which the cost and period of executionincreased. The revised cost of the project is now estimated to be Rs. 4085million.

Project Implementation

4. The construction of new canals, tubewells, surface drains, evaporationponds and electrification network was the responsibility of WAPDA while theremodelling of existing irrigation channels was done by Punjab IrrigationDepartment.

S. The project was initiated in July 1981 and after a series of extensions(mainly due to paucity of funds) was substantially completed by June 1992.Except for a few contractual problems, which are common in projects of sucha big size, there was no major incident observed during the course ofimplementation. However, when the disposal of saline effluent from thetubewells into the evaporation ponds started in September 1989, significantrise in the groundwater table was observed in the agricultural landsadjacent to the ponds. This phenomenon is still continuing. TheConsultants, after detailed study of the problem, recommended certainmeasures to arrest this seepage and also advised for constant monitoringof the water level conditions inside the affected areas. This is beingdone by SCARP Monitoring Organization (SMO) WAPDA.

6. On the advice of an FAO/CP Mission who visited the project area in February1993, detailed terms of reference (TOR) have been prepared for engagementof international consultants to study the seepage phenomenon.

Project Monitoring

7. The Planning Directorate (Water) Central has been regularly carrying outthe agro-socio-economic monitoring of the project. The benchmark surveywas conducted in 1980-81 followed by three follow-up surveys conductedduring 1983-84, 1986-87 and 1989-90. The reports on these surveyscontaining changes in crop production and socio-economic conditions wereprovided to the Bank.

8. SMO WAPDA was responsible for conducting hydrological monitoring and soilsurvey. They, too, had their reports published on the surveys carried outduring 1980-81 (benchmark survey), 1983-84, 1986-87 and 1989-90.

15

Project Results

9. The surveys carried out by Planning Directorate (Water) Central and SMOWAPDA indicate that compared to the pre-project conditions there is amarked improvement in the land and water conditions of the area.

Two main objectives of the project were: stabilize groundwater table atsafe level and increase in crop production. The third follow-up surveysconducted during 1989-90 show that:

a) Average yield of cotton, sugarcane and rabi fodder hasincreased. The cropping intensity has increased from 119% in1980-81 to 144% in 1989-90.

b) The area under 0-5 ft water table has reduced from 18% in1980-81 to 10% in 1989-90.

C) The land categorized as "strongly salt affected" has reducedfrom 8% in 1983-84 to 5% in 1989-90.

Bank's Performance

10. The project was mainly financed by IDA. However, the procurement of canalremodelling equipment was financed by the Overseas DevelopmentAdministration (ODA) of the United Kingdom under a grant, and KfW ofGermany financed the procurement of material for the electrificationcomponent under a loan.

11. IDA's performance was good. They provided necessary guidance throughvarious review and technical missions during the period of implementation.The things moved quite smoothly except in a few cases where the differenceof opinion between the Borrower and IDA (e.g. contract for head regulatorand contract for gates etc) caused delay in the execution of work.

12. The performance of both ODA and KfW was also good and maximum utilizationof their finances was achieved.

13. IDA was considerate enough to finance the construction of Tarukari DrainageSystem in Unit IV and the evaporation ponds from the unutilized amount ofits credit. IDA also extended the closing date of the credit many timeswhich allowed the Borrower to utilize it to the maximum possible extent.

Borrower's Performance

14. The following factors cast adverse effects on the Borrower's performance.

a) The Borrower had no choice over the selection of equipmentprocured under the UK grant. Some of this equipment did notproperly suit the project requirements and conditions.

b) The local construction industry was weak.

16

C) Non-allocation of adequate local funds.

Lessons Learat

15. The project should be of such a size that its execution does not take morethan five years.

16. The local funds should be made available by the Government according to thefinancial phasing in the PC-I.

17. In view of the weak construction industry in Pakistan the contract packagesof works should be small.

18. The understanding and communication between the Donor and the Borrowershould be further developed to avoid delays in many trivial matters.

19. The monitoring and evaluation of the project should continue regularly andnecessary funds should be provided to ensure continuity of data even afterthe completion of the project.

20. The selection of equipment, its type and size required for the projectworks should be made keeping in view the project conditions, availabilityof spare parts and repair/service facilities available in the country.

Coments on Parts I & III

21. The Mission is congratulated for having prepared a good report. However,there are certain minor discrepancies as indicated below:

a) At page (iii) of the Evaluation Summary, it has been mentionedthat barely after three months of pumping seepage of highlysaline water from the evaporation ponds was observed inadjacent irrigated areas. This problem is continuing and sofar about 12,000 acres of good irrigated land have beendestroyed and about 1000 families have been displaced.'/

This is not correct. The factual position is that seepage wasobserved in the adjacent irrigated areas after fifteen monthsof pumping as a result of which 550 families have beendisplaced.

b) Line 4 of Para 5.3 - Part I at Page 4 says: "In fact some ofthe regulators do not have gates in place even at the time ofPCR Mission's visit in 1993." 2/

These missing gates on Tallah and Chamman distributaries havenow been completed and are in operation since May 1993.

Comn=t efers to earlier text version. SA3AG.

2/ Colnunet refers to earlier text version. SA3AG.

17

C) Line 9 of Para S 10 - Part I at Page 6 ways: "Barely afterthree months of pumping, seepage .was observed

The period of three months is not correct. It should bechanged to fifteen montha.

d) Line 4 of Para 6.9 - Part I at Page 10: I/ The number ofaffected families is 550 and not 1000 as reported in the PCR.

e) The table on physical achievements given [in Part III/4A3 ofthe Report has been reviewed and amended. The amended tabl- isattached herewith.

" Textrefcwdtonowinpam6.8onupaeV8. SA3AO.

18

4. PROJECT 1MPLZEATION

A. Physical Achievements

Unit Original 1981 Actual ActualRevision as % of

RevisedA. CANAL CONPONENTEarthworkCanal Remodelling mcft 652 639 588* 92*Distributaries & Minors mcft 190* 215 201* 93*Lining km NA 118* 115 97*Lining msft 30* 35 34 97*Structures

Major Structures no 76 92* 92* 100Minor Structures no 320* 158* 144* 91*Outlets no 700* 1415* - * - *

B. DRAINAGE COMPONENTDrains mcft 334 334 457 137Structures no 585 585 590 101Tubewells

Drilling no 250 500 514 103Energizing no 250 500 514 103Operator Quarters no 250 500 216* 43*Relift Stations no 3 3 3 100Evaporation Ponds ac 57000 67500 33000 49

C. ELECTRIF COMPONENTSub-Stations no 6 6 6 100132 KV Tranam. Lines mi 23 - 42 18311 KV Distrib. Network mi 1113 - 1776 160Connection to PrivateTubewells no 2400 2850 1000 35

D. CONSULTING SERVICES(Domestic) m/m 310 NA 679 219*(Foreign] m/m - NA 114 -

N.B. * amended figures.

19

PART mH

1. Related Bank Loans and/or Credits

LoanCredit Purpece Year of LoanCrei SwC C_nsThIe Appro,a Amout

Khairpur Groundwater and Salinity Contol of waterlogging and salinity. 1962 US$21.15 M. Compned No PCR liHteControl Project (Cr. 22-PAK) in OED

Directory.

Khairpur Tile Drainage and Tre dainage and ingtion 1976 US$14 M. Completed PCR iwued

Irrigated Farming Development development. June 19S9.Project (Cr. 648-PAK)

Salinity Control and Reclamation Control of ulinity and watedossing. 1979 US$60 M. Compled Draft PCR

Project (SCARF) Marian under

(Cr. 877-PAK) prmpatiom.

On-Farm Water Management To increase agricultural production by 1911 SDR 33.4 M. Complted PCR issued

(OFWM) Project (Cr. 1163-PAK) improved magement of water saved June 1988.through watercourae renovation andcleaning and related measures in thefbur provinces.

Command Water Management Project To increaae agricultural production 1934 SDR 43.7 M. Compited(Cr. 1487-PAK) thrugh improved water mangement,

along with upplyig agriculturalsrvice and non-water inputs in

sven sub-project areas totallingS10,000 ac located in aOl fourprovinces.

Left Bank Outfall Drain-Stage I To provide an ultimate outlet to the 1984 SDR 147.6 M. OngoingProject (Cr. 1532-PAK) ea for drainage effluent from

igrated areaa of the Lower IndusBasin.

Second On-Farm Water Management To consolidate gains achieved under 1985 SDR 34.8 M. Completed PCR isuedProject (Cr. 1603-PAK) Cr.1 163-PAK and improve OFWM May 1993.

programs in the four provinces toenable them to realize their potential.

SCARP Trmnition Pilot Project Testing transfer modes of public 1986 SDR 8.7 M. CompleWd PCR isued(Cr. 1693-PAK) tubeweU operation in fresh June 1993.

groundwater area to privateownership and operation.

Third On-Farm Water Management To increase aiculturl production by 1991 US$36.3 M. & OngoingProject (Ln. 3327-PAK & Cr. effective use of water saved through SDR 33.4M.2245-PAK) renovation of wateroufses and

related mesureas in irdgated aa wellas bani areas of the four provinces,FATA and FANA

Fordwah Eastern Sadiqia Project Increase agricultural productivity and 1992 SDR 39.6 M. Ongoing(Cr. 2410-PAK) income by improving reliability of

water supplies and urface drainageand reduce the need for sub-surfacedrainage.

Second SCARP Transition Project (Cr. Follow-up on SCARP Transition Pilot 1991 SDR 14.8 M. Ongoing2257-PAK) Project to trnsfer public SCARP

tubewells to private ownership andoperation in fresh groundwater areas.

20

2. Project Timetable

Iten Date Planned Date Revised Date Actual

Identification - - Nov. 1968Preparation - - Dec. 1975

Appraisal - - Nov. 1977

Negotiations - - Sep. 1977Board Approval - - Dec. 6, 1977

Credit Signature - - Jan. 19, 1978

Credit Effectiveness - - Dec. 28, 1978

ECNEC Approval - - Feb. 10, 1981"

Amendment of Legal - - Nov. 19, 1983Documents2 '

Credit Closing June 30, 1985 June 30, 19872' June 30, 19923'

Credit Completion - - Nov. 19, 1992

"When ECNEC approved the project it requested that the proposed two-mile electrification grid fortubewell power supply be changed to a one-mile grid as an incentive to fiamers. The revised costtotal including this change (Rs 1,882 million) was authorized by the Chairman of ECNEC in August1982.

2' Reflecting 1981 change in project scope.' Last of five one-year extensions.

3. Credit Disbursements

Cumulative Estimated and Actual Disbursements(USS Million)

FY79 FY80 FY81 FY82 FY83 FY84 FY8S FY86 FY87 FY88 FY89 FY90 FY91 FY92 FY93

Apprisal Estimte" 0.50 7.00 19.00 33.50 50.00 60.00 70.00 - - - - - - -

AcUal 0.00 0.32 088 1.04 1.72 2.84 3.30 4.43 6.53 16.84 26.03 39.04 49.99 60.57 65.94

Actuas c of 0 5 5 3 3 5 5 6 9 24 37 56 71 87 94Estimate

Date of Final Disbursement: Novenber 19, 1992.

"From Lon Disburwement System. Differs from schedule provided in Annex I 1, Table 3 of SAR At project revision in1981 no revised disbursement schedule appears to have been prepared.

21

4. Project Implementation

A. Physical Achievements

U.k Orgia 1981 Actual ActeaRevision % of

Revied

A. CANAL COMPONENT

Eartwork

Canal Remodelling mcft 652 639 588 92

Distributaries & Minors mcft 190 215 201 93

Lining km NA 118 115 97

Lining nuft 30 35 34 97

Strctum

Major Structures no 76 92 92 100

Minor Structures no 320 158 144 91

Outlets no 700 1415 -

B. DRAINAGE COMPONENT

Drains mcft 334 334 457 137

Structures no 585 585 590 101

Tubewels

Drilling no 250 500 514 103

Energizing no 250 500 514 103

Operator Quarters no 250 500 216 43

Rdift Stations no 3 3 3 100

Evaporation Ponds Ac 57,000 67,500 33,000 49

C. ELECTRIFICATION COMPONENT

Sub-Stations no 6 6 6 100

132 KV Transmission Lines mi 23 - 42 183

11 KV Distribution Network mi 1,113 - 1,776 160

Connection of Private Tubewells no 2,400 2,850 1,000 35

D. CONSULTING SERVICES

Domestic s/m 310 NA 679 219

Foreign s/m - NA 114

Note: Table amended following Part 11, pars 21.

22

5. Project Cost and Flnancing

A. Project Cost

SAR Co, " Revisd Acma CostCost u (a of

06130/1992)

PRs USM PRs USS PRs USS

LAnd Acquisition 19.9 2.0 42.5 4.3 84.2 5.9

Civil Works 705.2 71.2 785.6 79.4 2,38.2 120.3

Construction of Colony - - 57.0 5.8 52.5 4.4

Canal Remodelling 180.0 18.2 205.8 20.8 1,160.8 56.9

Unit n Tubewells and Drains 2 125.7 12.7 - - - -

Unit V Tubowells " 59.0 6.0 93.0 9.4 282.4 12.7

EJectrification Works 173.9 17.5 191.4 19.3 229.5 12.9

Drainage Works 166.6 16.8 159.2 16.1 229.1 13.7

Engineering, Supervision & Admin. - - 79.2 8.0 430.9 19.7

On-Fanr Invesmn 3ts" 200.4 20.2 - - - -

Unit m Tubewells 60.4 6.1 - - -

Land Levelling 100.0 10.1 - - - -

Gypsum 40.0 4.0 - - - -

Equipment and Vediles 153.3 15.5 151.1 15.3 427.2 30.0

Canal Remodelling Equipment 44.5 4.5 44.5 4.5 167.7 13.5

Electrical Conmponents 86.7 8.8 84.5 8.6 220.0 14.1

Transport, Levelling Equipment, Misc. 22.1 2.2 22.1 2.2 39.5 2.4

Monitoring and Evaluation - - - 9.5 0.4

Coultants 51.8 5.2 S1.8 5.2 45.9 2.9

Base Cost 1,130.6 114.1 1,031.0 104.2 - -

Physical Contingencies 140.0 14.2 117.0 1 1.8S

Price Contingencies 412.2 41.7 283.8 28.7 - -

Total (SAR) 1,682.8 170.0 1,449.8 144.7

Interest during Construction - - 432.2 43.6 585.8 33.1

O&M during Construction 117.6 11.9 18.0 1.8 54.8 2.4

Total Project Cost 1,800.4 181.9 1,832.0 190.1 3,592.6 195.0

" November 1976 prices.Approved PC-I, February 1981. See Project rimetable, footnote 1.

" Deleted in 1981 project revision.Unit TV and V drminage tubewells and evaporation ponds in actule costs.

23

Com"ents:

(a) Total project cost in mid-1992 was PRs 3.59 billion (US$ 195 million), compared to the revisedestimate of PRs 1.88 billion (US$190 million), an overrun of 91 % in Rupee terms but only 3% inUS dollar terms (which reflects the substantial devaluation of the Pakistan Rupee against the USdollar).

(b) Civil works accounted for the major share of cost with 66% of the total compared to about 50%estimated in the 1981 revision. Most important among civil works items were canal remodelling;engineering, supervision and administration; and drainage tubewells and evaporation ponds.

(c) Variations at project revision in 1981 included: (i) deletion of on-farm investments, financing forwhich was to be provided under the fourth IDA credit for the Agricultural Development Bank ofPakistan (Cr. 957-PAK); (ii) deferral to a later phase of (a) drainage tubewells in Unit II - untilassessment of the effect of private (irrigation) tubewell installation in the area; (b) remodelling ofminor canals in Units II and III - until the scope of private tubewell development in these aeas wasaccurately estimated; (c) drainage tubewells in Units IV and V originally proposed for locations notcritically susceptible to waterlogging problems; and (d) surface drains and disposal system to theextent required for (a) to (c); (iii) assumption that private tubewells installed in Units II and III wouldbe electrically driven rather than diesel-powered; and (iv) replacement of the originally proposed two-mile electrification grid for tubewell power supply by a one-mile grid as an incentive to farmers whowould have to pay less for the shorter hook-up lines.

(d) The cost overrun was partly due to quantity increases and partly to price increases. The original costestimate was based on preliminary surveys. Work quantities increased when detailed surveys anddesigns were carried out. Price contingencies provided in the revised cost estimate were notsufficient to absorb the cost increases during the prolonged implementation period. The increase incost for canal remodelling was mainly due to high cost of lining of the new feeders. The increasedcost of drainage tubewells was due to the increase in their number (to 514, of which 391 in Unit Vand 123 in Unit IV) and unit cost. The increase in cost of electrification was due to the expansionof the network. The increase in the cost of engineering, supervision and administration was due torising pay and allowances.

(e) The average cost per acre, using the originally envisaged project area (1.27 million ac, of which Unit1 338,000 ac, Unit 11 388,000 ac, Unit IV 76,000 ac, and Unit V 468,000 ac) and the revised costof PRs 1.88 billion (US$190 million), would have been about PRs 1,480 (US$150). On the basisof the area actually benefited and the completion cost of PRs 3.59 billion (US$195 million), theaverage cost is PRs 6,370/ac (US$346/ac). Areas benefited include Units IV and V, and about20,000 acres in Units II and HI - about 20 ac commanded by each of the 1,000 electric tubewellsinstalled - or a total of 564,000 ac.

24

B. Project Fnancing

- C _ q .du Fed

us$ nR urn fR us$ PR INmbG maim MNil MOil h_ maim

IDA

Civil Works 45.0 55.5" 62.7"

Gyp um 2.0 - -

Agricultural Credit 8.5

Consultants 6.0 6.0 3.2

- Project Implementation (4.0) (4.0) (2.6)

- Preparation of Other Proects (2.0) (2.0) (0.6)

Unallocated 8.5 8.5

Sub-Towta 70.0 693.0 70.0 693.0 65.9 1,3953 39

ODA

Civil Works 9.1 7.7

Equipment and Vehicles 5.9 11.7

Sub-Total 15.0" 148.5 19.4Y 192.3 17.3 231.7 3

KfW

Electrification Equipment 8.3 8.3 7.4 -

Sub-Toga 8.3v 82.2 8.3v 82.5 7.4" 107.1 6

Domestic 88.6 876.7 92.4 914.27' 104.4 1,85855' 52

ToWa 181.9 1,800.4 190.1 1,382.0 19S.0 3,592.6 100

"Includes equipment and materials for tubewefls.L Equivalent to £ 8.6 million." Equivalent to £ 10.8 million.4' Equivalent to £ 11.02 mitlion (£ 10.3 million plus supplementary grunt of £ 0.34 mitlion l uraent bance of £ 0. 12 million)." Equivalent to DM 20 million.w Equivalent to DM 19.87 million (originl loan amount leu unspent balance of DM 0. 13 million).

7 Includes only government contribution as deletion of on-farm investments (agriculur credit, gypwm) did not allowany contributions from banks or benefiting farmers.

Note: USS equivalents of cofinancierc' contributions partly estimrted.

CO)' E 5 e S eU e. 5 > e 5 e N | 7 E 0

CZ2E =2a

-1 -A 1 - -0L~ii

U. S -t ° i 8;8 :*Oi

z z z z z ~ ~ JU~IrJhu. I> > > >b . ~I j

26

Comments:

(a) Cropping intensity and crop yields at full development are based on agro-economic surveys.

(b) 'Te reduction in area developed (4,860 ha) and benefiting families (1,000) is due to loss of cultivatedland affected by seepae from evaporation ponds.

NA Not available as a full reappraisal was not carried out.

B. Economic hnpact

4 Ama Reid Fd Admi

Economic Rate of Return 19% 20% 23%

Undwyiag Amsiptions

Project Ufe 30 Years 30 Yeuc 30 Ye

Full Development 10 Years after project 10 Yeom after prject 10 Yam after projectcompletion (1993) compledon completion

Valuation of Traded Items CP of 1.00 CF of 1.00 CF of 1.00

Valuation of non-taded Items CP of 0.85 CP of 0.35 CF of 0.35

Valuation of UnWilled Labor CF of 0.70 CF Of 0.70 CF of 0.70

Comments:

(a) The higher ERR now estimated is due to improved crop yields which more than offset the adversefactors including higher investment costs per ha than estimated at appraisal and prolongedimplementation period.

(b) Economic re-evaluation of the project was undertaken following to the extent possible the sameapproach as in the SAR. This included the use of conversion factors - SCF of 0.85, and specificconversion factor of 0.7 for labor. Since these conversion factors were not given in the SAR, thoseused in the SCARP Mardan SAR prepared at about the same time were taken.

C. Mnancal Impact

Not Applicable

27

D. StudS.

Study Pwrpm - DeW d at Stimn -mpAgro-Socio-Economic Obtaining rekvat da for de la_ed 1982 Povided usl bac4kod i"muadam.Survey - BDeling asansammt of projct benefits

(year covered: 1980w81).

Agro-Socio-Economic Obtaining tevart data for th lad 1985 Pvde priodic modblg of alcwul prodotSurvey - Follow-up I aseameAt of prject benfts ad eocloomic comiliom in thw project ate. Dat

(year covened: 193344). obtained wee useid in th PC execise.

Agr-Socio-8conomic Obtaining revant dat fo th lame 1988Survey - Follow-up 11 as_emat of project benefift

(year covered: 198647).

Agr-Socio-Economic Obtaiing rlvant daet for th le 1991*Suivey - Follow-up H asnme_ t of proect benefits

(year coveed: 1989-90).

Feasibility Study of Preparaton of odber irgapti Comopbated te proj ba been appaied end the IDA crdh be_rPordwah Eastern Sadiqia and drainaep ptqocts. effetive cn Marc 29, 193.(South) Project

28

7. Status of Covenants

Development Credit Coveusm Desdline for Compiance Stats

3.03 WAPDA to enploy consltants to assist in (i) project Sec. 3.03 (a) condition Delayedimplementation nd (i) preparation of other irrigation of credit effectivene. complianceand drainage projects

3.05 (1) Borrower to submit to IDA a plan to improve grain stor June 30, 1982 Substantially inin Pakisan compliance

3.05 3ii) Borrower to comnmence implementation of grain storage plan July 1, 1983 With additiors inin project area progress, available

storage capacitywa consideredadequate

3.07 Borrower to establish and maintain Project Steering Condition of credit In compliance, butCommittee and Project Coordination Conmmittee effectiveness Steering

Commnitteemeetinsg veryinfrequent

4.01 (b) Audit reports due to IDA not later than six mnonthe after end Debyedof each fiscal year compliance

4.02 (a) Study to be caride out on agricultural pricing and Aug. 31, 1985, for Delayedtaxation with particular reference to water charges Part DI of Study compliance (Part

D received Sept.1986)

PuzUab A,geaet

2.03 (b) No surface water to Unit I from bout October 31 to March After October 31, 1980 Not in compliance31 each year

3.01 GOPunjab to revise structure and level of water charges Delayed partiacompliance

3.02 (a) GOPunjab to increase water charges in three stags to July 1, 1990 New schedule forrecover full O&M cost of irrigation nd drainage facilities reaching fulland reasonable portion of investment costa O&M cost

recovery firstagreed underISRP-UD(Cr. 1888-PAK) in1988, and thenunder FordwahEastern Sadiqiaproject

29

S. Use of Bank Resources

A. Staff Inputs (staff weeks)

PNe-Appraisal Appraisal Negotiatiom Supervision Total

Pre-FY81 22.6 122.5 6.1 19.9 171.1

FY81 - - - 12.7 12.7

FY82 - - - 23.7 23.7

FY83 - - - 13.7 13.7

FY84 - - - 17.9 17.9

FY85 - - - 15.1 15.1

FY86 - - - 36.0 36.0

FY87 - - - 33.7 33.7

FY88 - - - 25.1 25.1

FY89 - - - 26.7 26.7

FY90 - - - 19.3 19.3

FY91 - - - 11.7 11.7

FY92 - - - 3.8 3.8

FY93 - - - 13.61" 13.6

FY94 - - - 3.7 3.7

Total 22.6 122.S 6.1 276.6" 427.8

" Including about 8 staff weeks spent by FAOICP for PCR prparation.

B. Missions

Stege of Month/Year No. of Days hi Specidzatlon Status 2v Trend 3' Types ofProject Cycbe Peraons Fied Reprsented ' Problems 4

Identification Carried out by GOP ConsultantsPreparationAppraisat Nov. 76 6 26 AG,SS,EC,GW,IE,CS - - -

Supervision 1 Sep. 78 1 8 IE - -

Supervision 2 Mar. 79 1 4 AG 1 2 M,OSupervision 3 Feb. 80 2 5 AG,EN 1 2 T,PSupervision 4 Nov. 80 2 6 IE,AE 3 2 F,PSupervision 5 Aug. 81 3 8 IE,AE,IE EJNI 3 1 0Supervision 6 Jan. 82 1 4 IE 2 1 M,OSupervisicn 7 Mar. 83 2 8 2 IE EJI 2 1 TTech. Mission May 83 1 4 SS - -

SLpervision 8 Feb. 84 1 10 IE EJM 2 2 TSupervision 9 June 85 2 13 IE,GH EJI3 2 2 M,T

Ovedl Dev. Compi. w. Prt Mlgt.v Avia. Funds stas Impact" Cov."

Supervision 10 Apr. 86 2 10 IE,AE EJMI 3 1 - 2 1Supervision 11 Jan. 87 1 8 AE (JM] 2 1 1 1 0Supervisionl 12 Jan. 8 1 11 AE CJM 2 2 - 2 1Tech. Mission ay 88 1 9 IE - - - -Supervision 13 Oct. 88 1 8 AE EJM3 2 2 - 2 2Tech. lission Feb. 89 2 9 2 IE . . -

Supervision 14 Sep. 89 2 10 AE,IE 2 2 1 2 2Supervision 15 may 90 1 8 IE 2 2 1 2 2Supervision 16 may 91 1 15 IE 3 2 1 2 1PCR Feb. 93 3 14 IE,AG,FA - - - -

AEmagricuttural economist, AG=agriculturalist, CS=credit specialist, EC-economist, FAfinancial analyst, GH=geohydroLogist, GU--groundwater specialist,IE=irrigation engineer, SS=soils speciaList, CJM]=joint mission with ODA and KfW or ODA.

2 1 - Proble_free or minor problems; 2 - Moderate problem; 3 - Major problems.3' 1 - Improving; 2 - Stationary.

F - Financial; N - Managerial; T - Technical; P - Political; 0 - Other.1 No significant problems; 2 - Moderate probtems; 3 - Major problems but appropriate actions being taken to address these problems.

31

ANNEX 1

ECONOMIC EVALUATION

A. FARM INCOMES

1. The SAR assumed increases in farm incomes (owner-operated farms) including wage incomefrom off-farm work in agriculture for three different farm sizes as follows:

Ng Fam [em by Fugm ()

-,, , ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~............., .... .,.I

. .: : .... :: -7 : . ......

1gu0sw.ma1 0 -~0 17D 0 h

NW V* ,4 70

Restated in 1992 prices, incremental incomes would be as follows:

unit n8,0 04t334

UJnit MI ,771,5 24.,697

UtnitsIV & 7,S7161732,343:

2. The impact of the project on farm income has been reestimated by preparing illustrativefarm budgets for the three different farm sizes in two different areas - Units II & Inl, and Units IV & V(Tables 1-6). The reason for combining Units II & HI for this purpose is that the approach for thedevelopment of Unit II was revised in 1981 to be the same as that of Unit III, i.e. installation of privatetubewells in place of public tubewells, and similarity of cropping patterns, given the existence of freshgroundwater in both units. The estimates show incremental farm incomes at full development in 1992prices as follows:

32

- - -PAISAN: Salinity Control and R.cbhmtion Pwt (SCARP) VI, Cr. 754-PAK

Annex 1: EBonomic Evaluato

. i. .. .. . .. . . . .. . . . . . .

. _ ::-::.:. :. ::.:. -.1... . . . . . . . . . . . . :. .. :..

. t . . ' . , t , 4 T T . i, . . T T. T . T . ; r ,] T.T. Bf >r r ..T .. .. . . .... ....

.,.."",.',',N,,'&,."''"'-';'~~~~~~~~~~~~~~~~~~~~~~~~~~........

This means real income increases of 12-39% for the S ac farm, 3-57% for the 12.5 ac farm, and 10-62%for the 25 ac farm in Units II and ml, and of 31% (S ac), 27% (12.5 ac) and 25% (25 ac) in Units IVand V, compared to appraisal estimates. The rise in incomes is due to higher cropping intensity and cropyields, and a larger share of high value crops (vegetables and orchards) than projected at appraisal.

3. The project is expected to directly benefit around 99,000 farm families, about 1,000 lessthan targeted at appraisal. The reduction in benefiting families is due to the loss of cultivated land (about12,000 ac) caused by seepage from the evaporation ponds (see para 63."I

B. ECONOMIC ANALYSIS

Appraisal Estimates

4. At appraisal, the project's economic rate of return (ERR) was estimated to be 19%, basedon the following assumptions:

- project life of 30 years, including an implementation period of 6 years;

- ~~full development reached in about 10 years;

- prices of cotton, rice, wheat, oilseeds, sugarcane, millet, and fertilizer based on projected1985 world market prices expressed in 1976 terms;

- ~~economic prices of non-traded crops (like orchard and vegetables) based on local financialprices adjusted by the ratio of economic prices to financial prices for traded crops; and

- consideration of crop production "with" and "without" the project.

The project was revised in 1981 and a new ERR was estimated at 20%.

" Sec Government comment, Part 11, pa 21 a).

33

PAKSAN: Salinity Cotrol and Rchmation Prqoet (SCARP) VI, Cr. 754-PAKAnnx 1: Economic Evaluation

PCR Estimates

5. The recalculation of the project's ERR follows the SAR. The main differences are:

- actual costs (Table 7) are used for FY79 to FY93; past expenditures have been adjusted to1992 prices, using GDP deflator indices for the local cost component and the MUV indexfor the foreign cost component (Table 8);

- investments still needed to complete the project in Units II and III are estimated to be PRs1.1 billion in financial prices, spread over FY94 - PRs 251.6 million, FY95 - PRs 357.8million, FY96 - PRs 267.1 million, and FY97 - PRs 268.8 million;

- higher cropping intensity and crop yields are used than projected at appraisal;

- all values are expressed in terms of 1992, the project's final disbursement year; and

- financial prices and economic prices of internationally traded goods are based on the SARfor the Fordwah Eastern Sadiqia (South) Irrigation and Drainage Project (Report No.10461-PAK, June 11, 1992) (Table 9).

6. In addition, as in the SCARP Mardan PCR, the following conversion factors are used:Farmlabor - 0.7; civil works - 0.88; all other local costs - 0.85. It is also assumed that only about 75% ofthe Unit IV and V area would ultimately benefit from drainage investment, since about 20% of the areais not presently waterlogged, and an allowance of 5% has been made for other losses including seepagefrom evaporation ponds.

7. The expected crop mix does not represent a major departure from appraisal estimates, exceptfor vegetables and possibly orchards. It does assume, however, an increase in the share of high valuecrops. Higher cropping intensity (an increase of 19%) and crop yields (an increase of 2-15%) overappraisal estimates for full development are being achieved now, as shown by the latest agro-socio-economic survey (1989-90), aided by the availability of agricultural support services, albeit lesseffectively than foreseen at appraisal.

8. On the basis of these assumptions, the revised economic rate of return (ERR) is 23% (Table10) - 4% and 3% higher than the one expected at appraisal and project revision. Unlike in the SAR, onlyan ERR for the whole project was recalculated, as it is difficult to distinguish with certainty the benefitsderived from different components. The improved ERR is due to the higher crop yields now projected,which more than offset the adverse factors including delay in the implementation of civil works(particularly canal remodelling in Units II and III), and higher investment costs per hetare than estimatedat appraisal.

34

Pr Ct RpPAKIrTAN: Smlity Conto ma Racmatsic Project (SCARP) VI, Cr. 7S4-PAK

Anx l: 8o Evabhda.

9. Given that part of invesmet cost and the entirety of project benefits are estimated, thereoclculated ERR should be rated as broadly indicative. This is reinforced by the fact that the majorgeneratr of benefits, crop yields, canot be sustained unless adequate funds are allocated for theoperation nd maintenance of project irrigation and drainage facilities. Sensitivity analysis shows thata combined reduction in bonefts and increae in costa by 20% will lower the ERR to 16%. A similarreduction may result from delay in completing the unfinished canal remodelling works accompanied bycost increses - not an unlikely event in view of recent project implementation experience - andconsequential delay in reaching full development production.

Project Completion ReportPAKISTAN: Salinity Control and Reclamation Project (SCARP) VI, Cr. 754-PAK

Annex 1: Econiomic Evaluation

Tabte 1. Fan Nodet 1 (5 acres) -unit II & III Fanm Plodet - Financialt Budget (in Ru;ieca '000)Crop year

I ncremaent al

1 to 12 13 14 15 16 17 18 19 20 21 22 to 25 26 27 28 29 30

Main Production

Paddy (IRRI) - -0.6 -0.6 -0.6 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 *0.5Seed Cotton - -7.4 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9 7.9Masize - -0.9 -0.9 -0.9 -0.9 -0.9 -0.9 -0.8 -0.8 -0.8 -0.8 -0.8 -0.8 -0.8 -0.8K. Fodder (sorghium, maize) - -0.9 0.9 1.0 1.1 1.2 1.2 1.3 1.4 1.5 1.5 1.5 1.5 1.5 1.5Vegetabtes, Karif - -0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4Whteat 3.2 3.5 3.7 3.9 4.1 4.4 4.6 4.8 5.0 5.0 5.0 5.0 5.0 5.0Pulses - -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7oitseed (muistard) - -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2R. Fodder (ijerseeat) - -- 0.2 -0.1 0.1 0.2 0.3 0.4 0.5 0.7 0.8 0.8 0.8 0.8 0.8 0.8Stugarcane - 0.4 0.5 0.5 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7Ochards - 1.3 1.1. 1.5 1.6 1.7 1.8 1.9 2.0 2.1 2.1 2.1 2.1 2.1 2.1

Sub-totat Main Production-- --- 10.9 12.1 12.7 13.3 1-.0 1-.5 15.1 15.6 16.2-- 16.2 -6.2 16.2 -6.3 16.3su-TtValu Ofi Production - 10.9 12.1 12.7 13.3 14.0 14.5 15.1 15.6 16.2 16.2 16.2 16.2 16.3 16.3

fiet Value Of Production 10.9 12.1 12.7 13.3 14.0 14.5 15.1 15.6 16.2 16.2 16.2 16.2 16.3 16.3~~~~~~~~~~1.Production Cost

UOperatingIniputs

Paddy seed (IRRI) - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Nitrogen (urea) - 0.4 0.5 0.5 0.6 0.6 0.7 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9Phosphate (OAP) - 0.3 0.3 0.3 0.4 0.4 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6Toots - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Uater charges - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Cultivation - 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6Transplanting - -- 0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1co tton seed - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Pesticides - 0.8 0.9 0.9 1.0 1.1 1.1 1.2- 1.3 1.4 1.4 1.4 1.A 1.4 1.4Mechantization - 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8Drilling - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1tJeeding - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1hiarvesting -0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7K Fodder (sorghuma, maize) - -0.1 -0&.I -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Vegetabtes seed -- 0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0Wheat seed - 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4Threshiing - -0.6 0.6 0.7 0.7 0.7 0.7 0.8 0.0 0.8 0.8 0.8 0.8 0.8 0.8Putses seed - -0.1 -0.1 -0.1 -0.0 -0.0 -0.0 -0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Rt. Foidder (berseege) - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Sugarcane secds - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.!Transportation - -0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.! 0.!Sub-totalInputs. ... .2. 4... 4..7 .9. 5.2. 5..5 5.7. 6.0. 6.3... 6.3. 6.3. 6.3. 6.3. 6..3

Sub-Total Oeaingput- 4.2 4.4 4.7 4.9 5.2 5.5 5.7 6.0 6.3 6.3 6.3 6.3 6.3 6.3

CASII FLOWl BEFORtE FINANCING - -6.8 7.7 5.1 8.4 8.8 9.1 9.4 9.7 10.0 10.0 10.0 10.0 10.1 10.1

Sources 0f FinanceTransfer from Previouis Period - 4.2 4.4 4.7 4.9 5.2 5.5 5.7 6.0 6.3 6.3 6.3 6.3 6.3 6.3Less iransfer to Next Period - 4.2 4.4 4.7 4.9 5.2 5.5 5.7 6.0 6.3 6.3 6.3 6.3 6.3 6.3 6.3

Su-b-lotat Sour-ces Of f ina,nce -- 4.2 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 - 0.0 -0.0 -0.0 -0.0iEt FIIIANICiuG - -. 2 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3- -0.0 -0.0 -0.0 -0.0

FARM FAMLhiY (EJEIF ITS AFTER FINiANiCING -- 4.2 6.5 7.4 7.8 8.2 8.5 8.8 9.1 9.4 10.0 10.0 10.0 10.0 10.1 10.1

Project Completion RepoonPAKISTAN: Salinity Control and Reclamtion Project (SCARP) VI. Cr. 754-PAK

Annex 1: Economnic Evaluation

Toble 2. Farm Nodel I (5 acres) - lnit IV & V Farm Nodlt - Finrcist Budget (in Rupees '000)

Crop year...... ........ ..... ....... ... .... . . . . . . . . . . . . . . . . . . . . . . . . .

Incrue,ftat.....................................................................................

I to 12 13 14 15 16 17 18 19 20 21 ZZ to 25 26 27 28 29 30s:SCSSS flit ESS =SUS 355* Saza Sarsara salE -s asss SESUIEUE Ezra *5*5 Eats 555= aSas

Main ProductionPaddy (IRii) - -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.1 -0.1 0.1 -0.1 -0.1 -0.1 -0.1seed Cotton - - 5.6 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1 6.1maize - -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2K. Fodder (sorghum, maize) - 0.5 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.2 1.2 1.2 1.2 1.2Vegetables. Kari - - 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4Uheat * * 2.6 2.8 3.1 3.3 3.6 3.8 4.0 4.3 4.5 4.5 4.5 4.5 4.5 4.5Pulses - - -0.6 -0.6 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5Oilseed (mustard) - - 0.4 *0.4 -0.4 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3R. fodder (berseem) - - 0.2 0.3 0.4 0.5 0.6 0.8 0.9 L.O 1.1 1.1 1.1 1.1 1.1 1.1Sugarcane - - 0.7 0.8 0.9 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1Ochards - - 1.7 1.9 2.0 2.1 2.2 2.3 2.5 2.6 2.7 2.7 2.7 2.7 2.7 2.7

... S...a. . ..Pct. . .. . .... 0 .... .... 1 .... .. .. ...... .. ........ .... .... ...8. .... ....

Su-lotat 0ain Production - - 10.1 11.3 12.0 12.7 13.4 14.0 14.6 15.2 15.8 15.8 15.8 15.8 15.9 15.9

Met Value Of Production - -10.1 11.3 12.0 12.7 13.4 14.0 14.6 15.2 15.o 15.8 IS.P IS1.o 15.9 15.9

Production CostOperating

InputsPaddy seed (IRRI) * -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0Uitrogen (urea) - 0.4 0.5 0.5 0.6 0.6 0.7 0.7 0.0 0.8 0.8 0.8 0.8 0.8 0.8Phosphate (GAP) 0.3 0.3 0.3 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5loots * - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Water charges - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Cultivation - - 0.4 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6Cotton seed - * 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Pesticides - - 0.6 0.7 0.8 0.8 0.9 1.0 1.0 1.1 1.2 1.2 1.2 1.2 1.2 1.2mechanization - 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7Dritting - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Ueeding - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1llarvesting - 0.4 0.4 0.5 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.6 0.6 0.6K fodder (sorghtw, maize) * - 0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0Vegetables seed - - -0.0 -0.0 -0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0wheat seed - - 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4lhreshing - - 0.5 -0.5 0.5 0.6 0.6 0.6 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7Ptulses seed - - -0.1 -0.1 -01I -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1R. Foidder (berseem) - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Sugarcane seeds - - . 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Transportation - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

..... t .t ... .... 3.. .. . .. ... .. . .... .. .. ........ .... ... .. .... .... .....

Sub-lotal Ipruts - - 3.5 3.8 4.1 4.3 4.6 4.9 5.1 5.4 5.7 5.7 5.7 5.7 5.7 5.7suib-Total oper;titig -- 3.5 3-8 4.1 4.3 4.6 4.9 S.l 5.4 5.7 5.7 5.7 5.7 5.7 5.7

CASII FLOU BEFORE FillANCIIG - - 6.6 7.5 7.9 8.4 8.8 9.2 9.5 9.8 10.1 10.1 10.2 10.2 10.2 10.2

Sources Of FinanceTransfer froin Previotis Period - - 3.5 3.8 4.1 4.3 4.6 4.9 5.1 5.' 5.7 5.7 5.7 5.7 5.7 5.7Less Transfer 1o Next Period - 3.5 3.8 4.1 4.3 4.6 4.9 5.1 5.4 5.7 5.7 5.7 5.7 5.7 5.7 5.7

Sub-Total Sources Of Finance -3.5 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.0 -0.0 -0.0 -0.0

RET FINAIICING * -3.5 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3 -0.0 -0.0 -0.0 -0.0

FARM FAMILY BEIIEFIIS AFTER FIIIAPICIIIG - -3.5 6.3 7.2 7.7 8.1 8.6 8.9 9.2 9.5 10.1 10.1 10.2 10.2 10.2 10.2

Returns per Familyy-Day of Labor - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 3.1 I .1 0.1 0.1 0.1 0.1

Project Completion ReportPAKISTAN: Salinity Control and Reclamation Project (SCARP) VI, Cr. 754-PAK

Annex 1: Economic Evaluation

Table 3. Farm Model 11 (12.5 acres) - Unit 11 & III Farm Model - Fimmciel Bxuget (in Rupees '000)Crop year

Ii;crementaI

I to 12 13 14 15 16 17 18 19 20 21 22 to,25 26 27 28 29 30=:::::= =:=: :=:= =::= ::== ==== =r== ==== ra ===r ar= t ==== s=r= == z==r =: =:

Main ProductionPaddy (IRRI) - - -1.1 -1.0 -1.0 -1.0 -0.9 -0.9 -0.9 -0.8 -0.8 -0.8 -0.8 -0.8 -0.8 -0.8Seed Cotton - - 16.6 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8 17.8Maize - - -2.3 -2.3 -2.3 -2.3 -2.2 -2.2 -2.2 -2.2 -2.1 -2.1 -2.1 -2.1 -2.1 -2.1K. Fodder (sorghun, maize) - - 1.5 1.7 1.8 2.0 2.1 2.3 2.4 2.6 2.7 2.7 2.7 2.7 2.7 2.7Vegetables. Karif - 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.3 1.4 1.5 1.6wheat - 6.3 6.8 7.3 7.8 8.3 8.8 9.3 9.8 10.3 10.3 10.3 10.3 10.3 10.3Pulses - - -1.5 *1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5 -1.5Oilseed (imustard) * - -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -0.4 -0.3 -0.3 -0.3 -0.3 -0.3 -0.3R. Fodder (berseem) - -0.9 -0.7 -0.5 -0.3 -0.1 0.2 0.4 0.6 0.8 0.8 0.8 0.8 0.8 0.8Sugarcane - - 0.4 0.7 1.0 1.2 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5ochards - - 2.8 3.0 3.3 3.5 3.7 4.0 4.2 4.5 4.7 4.7 4.7 4.7 4.7 4.7

Sbotl.. a P u n .6 .2 .6 .0 .5 .6 .8 .9 3.1 .1 .2 . 34. .5Sub-Total Oain Production - - 22.6 25.2 26.6 20.0 29.5 30.6 31.8 32.9 34.1 34.1 34.2 34.3 34.4 34.5

lIet Vatue Of Production - Z2.6 25.2 26.6 28.0 29.5 30.6 31.8 32.9 34.1 34.1 34.2 34.3 34.4. 34,5

Production CostOperating

InputsPaddy seed (IRRI) - - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Nitrogen (urea) - 0.8 1.0 1.1 1.2 1.3 1.4 1.6 1.7 1.8 1.8 1.8 1.8 1.8 1.8Phosphlate (DAP) - 0.5 0.6 0.7 0.8 0.8 0.9 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.2loots - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Uater charges - * 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Culltivation - 0.9 0.9 1.0 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1Transplanting - * -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Cotton seed - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Pesticides - 1.7 1.8 2.0 2.2 2.3 2.5 2.7 2.9 3.0 3.0 3.0 3.0 3.0 3.0Mechanization - - 1.6 1.6 1.6 1.6 1.6 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7Drilling - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Ueeding - - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2llarvesting - 1.1 1.1 1.2 1.2 1.3 1.3 1.4 1.4 1.5 1.5 1.5 1.5 1.5 1.5K rodder (sorghum, maize) - - 0.1-0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Vegetables seed -0.0 -0.0 -0.0 -0.0 -0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Ul.eat seed - - 0.4 0.5 0.5 0.5 0.6 0.6 0.7 0.7 0.8 0.8 0.8 0.8 0 8 0.8Ilireshiing - - 1.1 1.2 1.3 1.3 1.4 1.4 1.5 1.6 1.6 1.6 1.6 1.6 1.6 1.6Pulses seed - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1R. Foidder (berseem) - - 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Sugarcane seeds - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 O.l 0.1 0.1 0.1transportation - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 o.2S-otl.. ...n ..t. ...8 ..1 ....1 .3.1 . .9 ..51 .1.1 ...7.13. ... 3 ...3 .3 .3 .3

Sub-Total Inputs - -8.5 9.1 9.7 10.3 10.9 ll S 12.1 12.7 13.3 13.3 13.3 15 3 13.3 13.3Sub-lotal Operating - - 8.5 9.1 9.7 10.3 10.9 11.5 12.1 12.7 13.3 13.3 13.3 13.3 13.3 13.3

CASII FLOW BEFORE FINAIICIG - - 14.1 16.2 17.0 17.8 18.6 19.2 19.7 20.3 20.8 20.8 20.9 21.0 21.1 21.2

Sources Of Financetransfer From Previous Period - - 8.5 9.1 9.7 10.3 10.9 11.5 12.1 12.7 13.3 13.3 13.3 13.3 13.3 13.3Less Transfer To Next Period - 8.5 9.1 9.7 10.3 10.9 11.5 12.1 12.7 13.3 13.3 13.3 13.3 13.3 13.3 13.3

. . ... .. . ... ... .... .. . ..... .. . ... .. . ..... . .... .... .. . .. . . ...

Sub-Total Sources Of Finance - -8.5 -0.6 -0.6 -0.6 -0.6 -0.6 -0.6 -0.6 -0.6 -0.0 -0.0 -0.0 -0.0

NET FIIIAIICIIIG * -8.5 -0.6 -0.6 -0.6 -0.6 -0.6 -0.6 -0.6 -0.6 - -0.0 -0.0 -0.0 -0.0

FAR1M FAMILY IEIIEfITS AFIER fIIAHICIIICG -8.5 13.5 15.6 16.4 17.2 lf.0l 18.6 19.1 19.7 7n.8 7n1 I 7n.9 71 n 71.1 71 7

Project Completion ReportPAKISTAN: Salinity Control and Reclamation Project (SCARP) VI, Cr. 754-PAK

Annex 1: Economirc Evaluation

Table 4. Form todel 11 (12.5 acres) - LUnit IV & V Farn Model - Finrwcial Budiget (in Rltees '0W0)Crop year

................. ............................... ..... ......... ........... ...

I gcrefntat .............. ....... ........... ....... ........... ..................

1 to 12 13 14 15 16 17 18 19 20 21 22 to'3O

Main ProductionPaddy (IRRI) - -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5 -0.5Seed Cotton - - 13.5 14.6 14.6 14.6 14.6 14.6 14.6 14.6 14.6Mai re - - -0.9 -0.9 -0.9 -0.8 -0.8 -0.8 -0.8 -0.8 .0.7K. Fodder (sorghitue. maize) - - 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7 2.9Wheat - 5.6 6.1 6.7 7.2 7.8 8.3 8.9 9.4 10.0Pulses - -0.8 -0.8 -0.8 -0.8 -0.8 -0.8 -0.7 -0.7 .0.7Oilseed (u.istard) - -1.3 -1.2 -1.2 .1.2 -1.1 -1.1 -1.1 -1.1 -1.0R. Fodder (berseem) - - 0.3 0.6 0.8 1.0 1.2 1.4 1.7 1.9 2.1Sugarcane - - 2.6 2.9 3.3 3.7 4.0 4.0 4.0 4.0 4.0Ochards 2.1 2.3 2.5 2.7 2.9 3.1 3.3 3.5 3.7

Sub-Total main Prodkction - - 21.8 24.6 26.2 27.8 29.4 30.6 31.8 33.1 34.3

Met Value Of Production - - 21.8 24.6 26.2 27.8 29.4 30.6 31.8 33.1 34.3

Prodtction CostOperating

Inixts 00Paddy seed (IRRI) - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1

Nitrogeni (urea) - - 0.8 1.0 1.1 1.2 1.3 1.5 1.6 1.7 1.8Phosphate (OAP) - - 0.5 0.6 0.7 0.18 0.8 0.9 1.0 1.1 1.2Tools - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Vater charges - - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Cultivation - - 0.9 0.9 0.9 1.0 1.0 1.0 1.1 1.1 1.1Iransplanting - - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Cotton seed - - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Pesticides - - 1.4 1.5 1.7 1.9 2.0 2.2 2.4 2.5 2.7mechanization - - 1.4 1.4 1.4 1.4 1.4 1.4 1.5 1.5 1.5Dritling * - 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Ueeding - - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2llarvesting - - 0.9 1.0 1.0 1.1 1.1 1.1 1.2 1.2 1.3K Fodder (sorgliun, maize) - - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Uhieat seed - - - 0.4 0.4 0.5 0.5 0.6 0.6 0.7 0.7 0.8threshiing - - 1.0 1.1 1.1 1.2 1.3 1.3 1.4 1.5 1.6Putses seed - - -0.1 -0.1 -0.1 -0.1 -0.0 -0.0 -0.0 -0.0 0.0Vegetables seed - - 0.0 -0.0 -0.0 -0.0 -0.0 -0.0 0.0 0.0 0.0R. Foidder (berseem) - - 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2Sugarcarie seeds - - 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5Transportation 0 2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3

Sub-lotat Inputs - - 8.2 8.8 9.4 10.1 10.7 11.3 11.9 12.6 13.2Sub-Total Operating - - 8.2 8.8 9.4 10.1 10.7 11.3 11.9 12.6 13.2

CASII FLOu BEFORE F IIIAIICIIIG - - 13.7 15.8 16.8 17.8 18.7 19.3 19.9 20.5 21.2

Sources Of FinanceTransfer froms Previotis Period - - 8.2 8.8 9.4 10.1 10.7 11.3 11.9 12.6 13.2Less transfer to Next Period 38.2 8.8 9.4 10.1 10.7 11.3 11.9 12.6 13.2 13.2

Suib-lotat Sources Of Finance - -8.2 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7

EitE FINAIICIIIC --. 2, -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7 -0.7

FAR1t FAMIIY nFIDEFItS ArIER FliIAHIICIIC - -8.z 13.1 15.2 16.2 17.1 18.1 I t.7 19.3 19.9 71.2

n i n 1 n i n i n A n i n l n i n i

Project Completion ReportPAKISTAN: Salinity Control and Reclamation Project (SCARP) VI, Cr. 754-PAK

Annex 1: Economic Evaluation

Table 5. Farm Nodel ITT (25 acres) - Unit 11 & III Farm ModeL - Financial Buliget (in Rtuees 000)

Crop year,,........... .............................. ,,,.................................. .,,,,,...........:

Incrcircntal,.......................................................................................

I to 12 13 14 15 16 17 18 19 20 21 22 to 25 26 27 28 29 30

Main ProductionPaddy (IRRI) - -2.3 -2.3 *2.2 -2.2 *2.2 -2.1 -2.1 -2.0 -2.0 -2.0 -2.0 -2.0 -2.0 -2.0Seed Cotton - 37.8 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4 40.4maize - -4.2 -4.0 -3.9 -3.8 -3.7 -3.6 -3.5 -3.4 -3.3 -3.3 -3.3 -3.3 3.3 3.3K. Fodder (sorghum, maize) - - 0.6 0.7 0.9 1.1 1.2 1.4 1.6 1.7 1.9 1.9 1.9 1.9 1.9 1.9Vegetables, Kari I - - 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 3.1 3.3 3.6 3.8Uheat - - 10.9 11.7 12.6 13.4 14.2 15.1 15.9 16.8 17.6 17.6 17.6 17.6 17.6 17.6Pulses - - -1.9 -1.9 -1.5 -1.0 -1.8 -1.7 -1.7 -1.7 -1.6 -1.6 -1.6 -1.6 -1.6 -1.6Oitseed (Custard) - - -1.3 -1.3 -1.3 -1.3 -I.3 -1.3 -1.3 -1.3 -1.3 -1.3 -1.3 -1.3 -1.3 -1.3R. Fodder (berseem) - - -3.4 -3.2 -3.0 -2.8 -2.6 -2.4 -2.1 -1.9 -1.7 1.7 -1.7 -1.7 -1.7 -1.7Sugarcane - - 8.4 9.3 10.2 11.1 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9 11.9Ochards - - 0.9 1.1 1.4 1.6 1.9 2.1 2.4 2.6 2.9 2.9 2.9 2.9 2.9 2.9

S ..---- otal Main Pruci .. - -.8.3 53.5 5.0- 58.5 6.1- 6.7- -.... 6.0- 67.7 6.7- 67.9 6.2- 6.1.. 68.7 ----Sub-Total 0ain Production - 48.3 53.5 56.0 58.5 61.1 62.7 64.4 66.0 67.7 67.7 67.9 68.2 68.4 68.7

Met Value Of Prodiction * -48.3 53.5 56.0 58.5 61.1 62,7 64,4 66.0 67.7 67.7 67.9 68.2 65,4 68.7

Production CostOperat ingW

I nput s soPaddy seed (IRRI) - - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Nitrogen (utea) - - 1.6 1.9 2.1 2.3 2.6 2.8 3.1 3.3 3.6 3.6 3.6 3.6 3.6 3.6Phosplhate (DAP) - - 1.0 1.2 1.3 1.5 1.6 1.8 1.9 2.1 2.2 2.2 2.3 2.3 2.3 2.3lools - - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Uater charges * 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.1 0.4 0.1 0.4Cultivation 1.5 1.6 1.6 1.7 1.7 1.8 1.8 1.9 2.0 2.0 2.0 2.0 2.0 2.0Transplanting - - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Cotton seed - - 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5Pesticides - - 3.6 3.9 4.3 4.6 5.0 5.3 5.7 6.0 6.4 6.4 6.4 6.4 6.4 6.4Mechanization - - 3.5 3.5 3.5 3.5 3.6 3.6 3.6 3.7 3.7 3.7 3.7 3.7 3.7 3.7Drilling - - 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Ueeding - - 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6Harvesting - - 2.3 2.4 2.5 2.6 2.7 2.8 2.8 2.9 3.0 3.0 3.0 3.0 3.0 3.0K Fodder (sorghum, maize) - - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Vegetables seed °-.0 0.0 0.0 -0.0 0.0 -0.0 -0.0 -0.0 -0.0 -0.0 -0.0 °0.0 °0.0 -0.0Uheat seed - 0.7 0.8 0.8 0.9 1.0 1.1 1.1 1.2 1.3 1.3 1.3 1.3 1.3 1.3Tlireshing - 1.9 2.0 2.1 2.2 2.3 2.4 2.6 2.7 2.8 2.8 2.8 2.8 2.8 2.8Pulses seed - - -0.1 -0.1 -0.1 -0.1 -0.0 0.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1A. foidder (berseem) - 0.1 0.0 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2Sugarcane seeds - 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7Iransportation - - 0.5 0.5 0.6 0.6 0.6 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 0.8

Sub-Total Inrputs 19.3 20.4 21.6 22.8 23.9 25.1 26.3 27.4 28.6 28.6 28.6 28.6 28.6 28.6Sub-lotal Operating - - 19.3 20.4 21.6 22.8 23.9 25.1 26.3 27.4 28.6 28.6 28.6 28.6 28.6 28.6

CASH FLtO BEFORE FIIANCING - - 29.0 33.1 34.4 35.8 37.2 37.7 38.2 38.7 39.2 39.2 39.4 39.6 39.9 40.1

Sources 01 Financelransfer From Previous Period - 19.3 20.4 21.6 22.8 23.9 25.1 26.3 27.4 28.6 28.6 28.6 28.6 28.6 28.6Less Iransfer lo Next Period - 19.3 20.4 21.6 22.8 23.9 25.1 26.3 27.4 28.6 28.6 28.6 28.6 28.6 28.6 28.6

, ........... ..... ...... .... ..... .... ..... .... ..... .... ..... ... ... ... ..... .... ..... .... ................... .......... ...

Sub-Total Sources O Finance - -19.3 -1.2 -1.2 -1.2 -1.2 1.2 -1.2 -1.2 -1.2 - 0.1 -0.1 -0.1 0.1

NEI FINAUCInG - -19.3 -1.2 -1.2 -1.2 -1.2 -1.2 -1.2 -1,2 -1.2 - -0.1 -0.1 -0.1 -0.1

FARM FAHIIY IIEIIEFIIS AFIER FIUANCIIIr - 19.3 27.9 31.9 33.3 34.6 36.0 36.5 37.0 37.5 39.2 39.2 39.4 39.6 39.9 n0.1

Project Completion Report

PAKISTAN: Salinity Control and Reclamation Project (SCARP) VI, Cr. 754-PAKAnnex 1: Economic Evaluation

Table 6. Farm Model III (25 acres) - Uknit IV & V Far. Model - Finmisal BIlget (in Rupees '000)Crop year

.. .......................................... .....................................

Incremental

I to 12 13 14 15 16 17 18 19 20 21 22,to 30

Main ProductionPaddy (IRRI) - -0.3 -0.2 -0.2 -0.2 -0.2 -0.2 -0.1 -0.1 -0.1Seed Cotton - * 37.2 39.8 39.8 39.8 39.8 39.8 39.8 39.8 39.8Maize - -2.1 -2.1 -2.1 -2.1 -2.0 -2.0 -2.0 -2.0 -2.0K. fodder (sorglii.* maize) - * 0.2 0.5 0.7 1.0 1.2 1.4 1.7 1.9 2.2Wheat - 8.8 9.7 10.6 11.5 12.4 13.4 14.3 15.2 16.1Pulses - - -1.2 -1.2 -1.2 -1.2 -1.1 -1.1 -1.1 -1.1 -1.1Oilseed (maistard) - - -2.9 -2.8 *2.7 -2.7 -2.6 -2.6 -2.5 -2.4 -2.4R. Fodder (berseem) * 0.6 1.0 1.3 1.7 2.1 2.4 2.8 3.1 3.5Sugarcane - -0.3 0.4 0.9 1.4 1.9 1.9 1.9 1.9 1.9Ochards 4.0 4.4 4.9 5.3 5.8 6.2 6.7 7.1 7.6

Sub-Total Main Production - - 44.0 49.3 51.9 54.5 57.1 59.2 61.3 63.4 65.5

Net Value Of Production - 44.0 49.3 51.9 54.5 57.1 59.2 61.3 63.4 65.5

Prodck t i on CostOperating

InputsPaddy seed (IRRI) * - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Nitrogen (urea) - - 1.6 1.9 2.1 2.3 2.6 2.8 3.1 3.3 3.5PlIosilhate (DAP) - - 0.9 1.1 1.3 1.4 1.6 1.7 1.9 2.0 2.2Tools - 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Uater charges * 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4Cultivation - - 1.5 1.6 1.6 1.7 1.7 1.8 1.9 1.9 2.0rransp(anting - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 *0.1 -0.1Cotton seed - - 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5Pesticides - - 3.3 3.7 4.0 4.4 4.7 5.1 5.4 5.8 6.1Mechanization - 3.1 3.1 3.2 3.2 3.2 3.2 3.3 3.3 3.3Drilling - 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Ueeding 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4llarvesting - - 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.0 2.9K Fodder (sorghui., maize) - - -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1Uhieat seed , - 0.6 0.7 0.7 0.8 0.9 1.0 1.0 1.1 1.2Fhreshing 1.5 1.6 1.8 1.9 2.0 2.1 2.2 2.4 2.5Pulses seed - -0.1 -0.1 -0.1 -0.1 -0.0 0.0 0.0 0.1 0.1Vegetables seed - - *0.1 -0.1 -0.1 -0.1 -0.0 -0.0 -0.0 0.0 0.0R. foidder (bersee..) - - 0.1 0.1 0.1 0.2 0.2 0.2 0.3 0.3 0.3Sugarcane seeds - - -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2 -0.2transportatio i- - -0.0 0.1 0.1 01 0.1 0.2 0.2 0.2 0.3

Sub-lotal Inputs - - 15.8 17.0 18.1 19.3 20.5 21.7 22.9 24.1 25.3Sub-lotal Operating - - 15.8 17.0 18.1 19.3 20.5 21.7 22.9 24.1 25.3

CASII FLOU BEFORE FIIAIICIIIG - - 28.3 32.4 33.0 35.2 36.7 37.6 38.5 39.4 40.3

Sources of F inalcetransfer From Previous Period - - 15. 17.0 18.1 19.3 20.5 21.7 22.9 24.1 25.3Less transfer lo Next Period - 15.8 17.0 18.1 19.3 20.5 21.7 22.9 24.1 25.3 25.3

Sub-Total Sources Of Finaice -15.8 -1.2 -1.2 -1.2 -1.2 -1.2 -1.2 -1.2 -1.2

IIET FINANCING - -15.8 - 1.2 -1.2 - 1.2 - 1.2 -1.2 - 1.2 - 1.2 -1.2

FARM FAHltY REIJEFIlS AFTER FINAIICIIIC - -15.8 27.1 31.2 32.6 34.1 35.5 36.4 37.3 38.2 40.3

Rettirn per r. i-n.- * -r -I ^r

41

Project CoMpletfon ReportPAKISTAN: Salinity Control nd Reclamatlon Project ($ARP) VI, Cr. 754-PM

Anrex 1: Economic Evaluation

Table 7. Investment Costs h Fh nobl and Eoornoml Tewme (PRe M =lan

FY79 fQ F 8 1 U fl fl fYl8

1. Land Acquisition - - 0.055 20.000 11.145 8.2J6 14.477 26.597

2. Interest 0.432 2.246 5.398 11.666 19.603 33.371 39.819 61.065

3. Monitoring & Evaluation - LC - - - - - -

4. Engineering, Supervisfonand Adninistration - LC 0.902 2.422 9.172 17.571 25.694 36.906 32.252 42.450

5. Operation & Maintenance - LC - - - - - 0.04 0.177 0.243

6. Consultants- LC 0.086 5.432 0.345 1.116 0.776 1.705 1.555 4.015- FC - 1.284 2.660 0.561 0.081 1.196 0.051 (3.72)

7. Equipment & Vehicles(Net of duties & taxes)- LC - 0.553 0.458 0.919 5.188 12.183 18.297 44.701- FC - 1.381 0.803 1.078 88.229 47.262 43.962 15.965

8. Civil Works- LC 0.736 7.989 10.231 40.679 48.465 105.048 U.196 112.696- FC - 5.387 12.017

Total Financial Cost 2.156 21.307 29.122 93.590 204.568 246.003 196.786 316.026

Total Economic Cost 1/ 3.315 35.542 44.071 109.371 278.208 315.273 212.091 321.113

1/ Excluding land acquisition, Interest, duties and taxes.Foreign exchanWe cost (FC) adjusted to 1992 term using MNV Index: 1.623 (1979), 1.480 (1960), 1.474(1981), 1.497 (1982), 1.532 (1983), 1.565 (1984), 1.553 (1985), 1.317 (1986), 1.199 (1967), 1.118(1988), 1.125 (1989), 1.065 (1990), 1.043 (1991), and 1.00 (1992).Local cost (LC) converted to economic cost using specfic conversion factor of 0.88 for civil works *ndSCF of 0.85 for all other costs, and adjusted to 1992 term using GDP deflator: 2.229 (1979-1981),2.038 (1982), 1.936 (1983), 1.765 (1984), 1.689 (1965), 1.635 (1986), 1.564 (1987), 1.427 (196), 1.314(1989), 1.234 (1990), 1.091 (1991), nd 1.00 (1992).

42

Project Completion ReportPAKISTAN: Salinity Control nd Recl_amtion Project (SCARP) VI, Cr. 754-PAK

Annex 1: Economic Evaluation

Table 7. Invesent Cote hi Fhnolal and Eoonombo Terms (PRs Milon)(Continued)

110 FY8 FY89 FY90 FY91 112 fs

1. Lend Acquisition 7.643 (0.562) (5.785) (3.414) 3.014 2.750

2. Interest 75.765 104.920 100.298 128.485 (2.000) 4.653

3. Monitoring & Evaluation - LC - - - 3.131 - 6.346 -

4. Engineering, Supervisionand Administration - LC 56.337 68.469 57.423 37.943 16.730 26.531 15.831

5. Operation & Maintance - LC 0.764 1.636 1.364 15.557 13.795 21.195 2.290

6. Consultants- LC 0.342 2.767 5.060 4.208 2.489 4.826 (1.240)- FC - 0.592 - 5.602 1.347 0.051 2.232

7. Equipment & Vehicles(Met of duties & taxes)- LC 11.001 23.062 4.793 (3.917) 8.532 (56.648) -- FC 1.151 14.145 - 3.694 0.227 -

8. CiviL Works- LC 255.270 239.358 190.022 303.608 267.912 289.153 27.706- FC - - 0.013 10.768 - 7.908 -

Total FinanciaL Cost 408.273 454.892 353.476 501.971 315.513 306.992 46.819

Total Economic Cost 1/ 444.422 433.259 296.529 414.740 302.597 299.939 39.015

1/ Excluding twnd acquisition, interest, duties nd taxes.Foreign exchange cost (FC) adjusted to 1992 term using MNJV index: 1.623 (1979), 1.40 (1980), 1.474(1981), 1.497 (1982), 1.532 (1983), 1.565 (1984), 1.553 (1985), 1.317 (1986), 1.199 (1987), 1.118(1988), 1.125 (1989), 1.065 (1990), 1.043 (1991), and 1.00 (19).Local cost (LC) converted to economic cost using specific conversion factor of 0.88 for civil works ndSCF of 0.85 for all other costs, and adjusted to 1992 term using GDP deflator: 2.229 (1979-1981),2.038 (1982), 1.936 (1983), 1.765 (1984), 1.689 (1985), 1.635 (1986), 1.564 (1987), 1.427 (1988), 1.314(1989), 1.234 (1990), 1.091 (1991), nd 1.00 (1m).

43

P Ct RpPAKISTrAN: Sainy Car ad R__lam Projet (SCAM VI, Cr. 754-FAK

Ax 1: BEominc B8ahauoc

Table 8. Exchage Rate and Infladon Fcton

Fiscal Year Exchag Rat GDP Dev`lator fto MUV LuieR"US 1.0, (9m * 1-0) (1992 - 1i)

period aveage)

1979 9.9 2.229 1.623

1980 9.9 2.229 1.480

1981 9.9 2.229 1.474

1982 11.847 2.038 1.497

1983 13.117 1.936 1.532

1984 14.046 1.765 1.S6S

1985 15.928 1.689 1.553

1986 16.648 1.635 1.317

1987 17.399 1.564 1.199

1988 18.003 1.427 1.118

1989 20.541 1.314 1.125

1990 21.707 1.234 1.065

1991 23.801 1.091 1.043

1992 25.083 1.000 1.000

"Innational Monetay Fund (IMP), Inernadonal Finncial Stdistics.2' Paistan Economic Survey, Staidsical Supplement.3' World Bank, Interntional Economics Departmnt, Intenaional Trade Division. Unit value index

in US$ terms of manufactures exported from th 0-5 countries (Frnco, Germny, Japan, U.K., adU.S.A.) weighted proportionally to the countries' expots to the developing countries.

44

Pt4sot Compidie RlpotPAKISTAN: Saityi Cosr and Raclsaan Prhoct ARP) VI, Ct. 754-PMK

Annex 1: EBonomic Evalaioa

Table 9. Prices Used In FInncial and Economic AnalysisOn Rupees)

Frnndai . . Eo ri ..Unit (consL 1"1-92) 1991-92 1998-" 2006-11

OutputsWhet kg 2.80 4.73 6.09 5.52Paddy (URR kg 2.00 3.09 2.83 2.54Seed Cotton kg 7.13 11.82 12.47 12.15K. Fodder (sorghum, maize) kg 0.30 0.26 0.26 0.26R. Fodder (berseem) kg 0.23 0.20 0.20 0.20Sugarcane kg 0.42 0.33 0.56 0.60Oilseeds (mustard) kg 6.80 5.78 5.78 5.78Vegetables, Kharif kg 2.80 2.38 2.38 2.38Vegetables, Rabi kg 3.00 2.55 2.55 2.55Pulses kg 11.52 9.79 9.79 9.79Orchards Rs/ac 6,500 5,525 5,525 5,525Maize kS 4.25 3.78Y1 4.87 4.42

InputsSeed 2

Wheat kg 3.30 5.57 7.18 6.51Paddy (IRRI) kg 2.50 3.86 3.54 3.18Cotton kg 7.25 12.02 12.68 12.35K. Fodder (sorghum, maize) kg 2.55 2.17 2.17 2.17R. Fodder (berseem) kg 24.00 20.40 20.40 20.40Oilseeds (mustard) kg 6.08 5.17 5.17 5.17

Sugarcane Cuttings kg 0.42 0.33 0.56 0.60Pulses kg 6.88 5.85 5.85 5.85

Nitrogen Fertilizer kgI 8.87 12.89 13.12 12.25Phosphatic Fertilizer kge 10.83 9.39 10.65 10.48Pesticdes

Cotton Appl/a 617.30 524.70 524.70 524.70Paddy (IRRU) AppI/ha 86.00 73.10 73.10 73.10Wheat 2 Appl/ha 86.00 73.10 73.10 73.10Sugarcane Appl/ba 37.00 31.50 31.50 31.50

Bullock Pairday 45.00 38.30 38.30 38.30Tractor Hour 74.00 62.90 62.90 62.90Labor Work-day 35.00 24.50 24.50 24.50

Based on SAR for Fordwah Eatem Sadiqia (South) Irrigation and Drinage Project, June 1992, and dat frm WAPDA,Punjab; using specific conversion factor of 0.7 for labor and atand conversion factor of 0.85 for all other local oost.

2v Using whea pricclec kdicount of 20%.21 Usually demands a preinum over output price.4 Of nutriert." Large farm only.

45

PC_M RLtPAMKSTAN: S^hnky COecoI *nd R.oia ltYsD Prejog (SCAR") VI. Cr. 754-PAK

Amx 1: Eooomic Bvalwalon

Table 10. Eonomic Analysi(R MNilon)

hixe.| O&M Vahe of asm m WRam Iac . .. smaIr.. P :Cod" vp_e '. -

I (FY79) 3.3152 35.5423 44.0714 109.3715 278.2086 315.2737 212.0918 321.1139 444.42210 433.25911 296.529 32.9912 414.740 52.1713 302.597 69.3114 299.939 34.54 2342.0015 (FY93) 39.015 34.54 2572.0016 221.408 62.95 S4.54 2533.0017 314.U32 62.95 U4.54 2563.00iS 235.030 62.95 84.54 2594.0019 236.544 62.95 84.54 25385.0020 62.95 84.54 2575.00

1 62.95 34.54 2565.002 62.95 34.54 2555.0023 62.f U4.54 2555.004 62.95 U3.54 2555.00

25 62.95 *4.54 2555.0026 62.95 U4.54 2555.007 62.ff *4.54 2560.00S 62.f U4.54 2565.009 24.95 62.95 U.S4 2570.000 90.29 62.95 U4.54 2576.001 60.72 62.95 *4.54 2576.002 35.37 62.95 34.54 2576.003 62.95 U4.54 2576.004 62.9f 34.S4 2576.005S 62.95 3.54 2576.00

ERR -23%

Cost of canal remodeling required to make Unts IV and V ladepnadt: Fimuia cowats of Pta 251.6 mrilbIn Pts 1 15.8 pia 242.02million, PRs 267.08 million and PRs 263.3 mllia covoned by applynS a ctor of O.3 in y 16-19 (FY94 to FY97). laplaceAeof ubewells and dinap pumping ton s mehail equlpew ia Yer 29 (PRs 24.95 million, 30 (PRS 90.29 mllio.), 31 (Pt 60.72million) and 32 (PRs 35.37 millon) cood to eomme coat sine a *acor of 1.00.

L Comprising po- triff (PRa 63.33 million, drinage nto (PMa 1.00 mN*e, eabli_a t c (Pta 5.00 milon), and rqpirand regular maitenrace (PRr 4.23 milIon, ttali PRr 74.06 miNion, eoavse to scoaic coa ust d SCF of 0.35.

3 Updated to 1992 prices based on appraia 4r.