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Implementation Completion Report (ICR) Review - National Irrigation Rehabilitation

1. Project Data:   
Project ID:
Project Name:
National Irrigation Rehabilitation
Sri Lanka
Irrigation & Drainage, Agriculture
L/C Number:
Partners Involved:
European Union
Prepared By:
Robert C. Varley, OEDST
Reviewed By:
George T. K. Pitman
Group Manager:
Gregory K. Ingram
Date Posted:

2. Project Objectives, Financing, Costs, and Components:

Objectives: The Project's primary objectives was to stabilize and increase rice production and beneficiary income, by preserving and improving the performance of irrigation schemes through rehabilitation and improved operation and maintenance (O&M).

Financing: total project cost of $44.7 million was 90% of a planned $49.8 million. The Bank committed $29.6 million and there was a cancellation of $6.0 million. The EU committed 13.7 million of which $9.2 million were dispersed.
Components: ($millions from appraisal estimates):
1. Rehabilitation and improvement of 1000 minor and 60 medium/major irrigation schemes covering 37,500 hectares ($31.3 million)
2. Establishment of 1000 Farmer Organizations (FOs) and improved O&M practices in all rehabilitated schemes ($2.1 million)
3. Training of farmers and staff of implementing agencies ($2.3 million)
4. Establish 3 new support units in Irrigation Department (Dam Safety, Quality Assurance, Irrigation Management) and Studies ($3 million)
5. Technical Assistance ($5.1 million)
6. Procurement of Vehicles and Equipment ($3.6 million).

3. Achievement of Relevant Objectives:

The project's primary objective to stabilize and increase rice production was substantially achieved, at least initially. It is expected that the area covered will exceed the SAR target of 37,500 ha by 2%, and that increased rice production will meet 98% of the SAR target of 25,700 tons. Over the short term farmers' incomes increased by from 28-50%, much of which is attributed to rehabilitation. A new culture of participatory irrigation management was introduced amongst the irrigation staff and farmers but the indications are that this is a supply driven process. Overall, 1,262 FOs were registered. 675 minor rehabilitated schemes (64% of SAR target) were turned over to FOs, while only 67 distributary subsystems (32% of SAR targets) of major/minor projects were turned over. The project created a countrywide precedent for partial cost recovery of rehabilitation and FOs' involvement in construction and O&M.

4. Significant Outcomes/Impacts:

1. 1048 compared to 1000 minor schemes, and 34 of 60 planned major/medium schemes "will be complete" by end June 99 and they will cover 25,000 and 13,380 hectares respectively.
2. 483 reservoirs (from 700 planned) and 565 diversions (compared to 300 planned) were completed.
3. Irrigation Department staff undertook overseas training courses benefitting 172 staff (71% of SAR targets) and benefitted from in-country training of 9,232 person days (84% of SAR targets). Other implementing agencies received slightly more than half (8,030 person days) of the training planned .
4. Farmers' representatives and farmers received two thirds (75,209 person days) of the training planned.
5. Successful partnerships with agencies involved in post-conflict reconstruction (e.g. UNHCR and NGOs) enabled implementation and supervision of projects in the conflict-torn northeast region.
6. Useful manuals and guidelines were produced for staff at all levels.

5. Significant Shortcomings (include non-compliance with safeguard features):

1. The objectives of the project were too ambitious in view of the lack of serious commitment to institutional reform/ decentralization and the absence of a coherent agricultural policy (e.g. sub-economic land holdings, and lack of clear legal titles to land, functioning land markets and water rights).
2. Insufficient attention was given to developing incentives for farmers to take on responsibility for O&M.
3. Supervision was inadequate (it used only 56% of the time allocated) and was overly focussed on engineering to the detriment of institutional development and agronomy.
4. Benefits are unlikely to be sustainable without continued and increased external financial support for O&M which government is unable to provide. Quality of construction in some schemes was below expected standards and requirements. Arrangements for system turnover to FOs were too demanding, unrealistic and were largely supply driven. Temporarily, the EU will continue to provide finance to consolidate the FO development and institutional development programs initiated under the project - but only until the end of 1999. Independent evaluations (e.g. by IMMI) indicate that only a few FOs are functioning satisfactorily and overall sustainability is unlikely. Thus in the medium term it is expected that systems will deteriorate and the the ERR is estimated at 10% compared with the 31% at appraisal.
5. Failure to plan rehabilitation taking account of the interdependence of tanks in watersheds means that significant and adverse environmental issues were not addressed in the project.
6. While some important "lessons learned" were incorporated in the design, they were not subsequently heeded during implementation - in particular forming FOs before physical implementation.
7. Unnecessary delays in consultant appointment delayed start-up by 18 months.

6. Ratings:ICROED ReviewReason for Disagreement/Comments
UnsatisfactoryMarginally Unsatisfactory
    Physical achievements satisfactory and potentially sustainable, although not likely.
Institutional Dev.:
Bank Performance:
    Performance on Identification /Appraisal/ Supervision were all deficient.
Borrower Perf.:
Quality of ICR:

7. Lessons of Broad Applicablity:

Although some of the Lessons Learned were known widely at the time of appraisal the following are worthy of note:-
1. Institutional and agricultural policy reforms must precede rehabilitation if the benefits are to be achieved.
2. Low profitability and productivity in agriculture inhibit the development of farmer organizations.
3. Farmer organizations must be established in advance of rehabilitation planning, design and implementation.
4. Implementation management responsibility should be devolved to the provinces for effectiveness and efficiency
5. A maintenance fund with actual support from farmers is a possible solution to project sustainability and should be pursued further.

8. Audit Recommended?  Yes

          Why?  Project outcome was unsatisfactory - the first major attempt to put in place a sustainable O&M system failed. The reviewer agrees with the ICR on the need for a "post project impact evaluation on the status of the FOs formed under the project, effectiveness of the 'O&M funds', status of the O&M of handed over schemes, and the role of irrigation agencies in irrigation management, with a view to revising the present irrigation sector policies and strategies.

9. Comments on Quality of ICR:

A good deal of work has gone into the ICR, it contains much valuable analysis and insight, and comes to right conclusions. However, the report does not present sufficient evidence to justify the post hoc ERR.

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