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Implementation Completion Report (ICR) Review - Albania Irrigation & Drainage II


  
1. Project Data:   
ICR Review Date Posted:
01/10/2006   
PROJ ID:
P043178
Appraisal
Actual
Project Name:
Albania Irrigation & Drainage II
Project Costs(US $M)
 40.47  42.49
Country:
Albania
Loan/Credit (US $M)
 24.00  23.40
Sector, Major Sect.:
Agricultural extension and research, Irrigation and drainage, Central government administration, Flood protection, Other industry,
Agriculture fishing and forestry; Agriculture fishing and forestry; Law and justice and public administration; Water sanitation and flood protection; Industry and trade
Cofinancing (US $M)
   
L/C Number:
C3232      
   
Board Approval (FY)
  99
Partners involved
Kuwait Fund, France 
Closing Date
03/31/2005 03/31/2005
         
Evaluator: Panel Reviewer: Division Manager: Division:  
George T. K. Pitman
Ronald S. Parker Alain A. Barbu IEGSG

2. Project Objectives and Components:

a. Objectives
The primary objectives of the project were to achieve sustainable and equitable use of irrigation water for increased agriculture production and to reduce the risk of floods. It was also to support the Government's initiative in taking the first steps toward establishing an institutional and legal framework for dam safety.

b. Components (or Key Conditions in the case of Adjustment Loans):
System Rehabilitation. (Planned US$26.7 million, actual US$35.52 million or 133% of appraisal.)This component aimed at carrying out critical rehabilitation works to deteriorated irrigation, drainage, and flood protection infrastructure covering 50,000 ha of irrigation at average cost US$350/ha and 50,000 ha of drainage at average cost US$65/ha.

  1. Institutional Support. (Planned US$2.46 million, actual US$3.24 million or 122% of appraisal.) To continue institutional reform in the irrigation sector, (a) develop Water User Associations (WUAs) and their federations to promote irrigation management transfer; and (b) Provide technical assistance and equipment to support reform in the drainage and flood control sector by closing state-owned district irrigation and drainage Water Enterprises (WEs) and establishing Drainage Boards (DBs) to initiate participatory budgeting and planning.
  2. Implementation Support for project management activities. (Planned US$2.73 million, actual US$3.33 million or 122% of appraisal.) These included feasibility studies, environmental assessments and dam safety inspections, financial management, monitoring and information systems (MIS), procurement and engineering management.
  3. Technical Studies had two subcomponents. (Planned US$0.57 million, actual US$0.4 million or 70% of appraisal.)
  • Improve design and operational standards for irrigation infrastructure through the development of guidelines and specifications for engineering designers and WUAs covering gates and pumping stations; the development of a design and an irrigation operation and maintenance (O&M) manual
  • Improved environmental management to mitigate irrigation sector environmental issues including piloting micro-catchment management, promotion of best agricultural practices in ecologically sensitive areas, and environmental monitoring of rehabilitated irrigation schemes.

c. Comments on Project Cost, Financing, Borrower Contribution, and Dates
The US$ Credit was reduced by US$0.6 million because of appreciation of the US$ to SDR. Following flooding in the district of Lezhe in 2002, government increased the scope of the drainage component from 50,000 ha to 90,000 ha. This increase scope was financed by reallocation of US$1.75 million from dam repair work of lesser importance and US$11 million parallel financing from the Kuwait Fund. The Government of France provided US$0.25 million parallel financing to support training of WUAs under the second component.


3. Relevance of Objectives & Design:

The project was fully in accord with CAS objectives that supported poverty alleviation and job creation in rural areas; governance and institution building via WUAs; and private sector growth through facilitation of payment for public service provision to agriculture. Parliament prior to approval had supported development of a reform agenda for the irrigation and drainage subsectors and passed enabling legislation and laws.

4. Achievement of Objectives (Efficacy) :

Sustainable and equitable use of irrigation water (substantial). More than the target area for rehabilitation was achieved (52,000 ha vs 50,000 at appraisal) through canal rehabilitation, water measurement structures, and improved operation and maintenance after successful transfer of O&M to water user associations and farmer water users' associations established under the project. However, at the end of the project only 45% of the rehabilitated area was operational due to late completion of the works. Within the completed areas water distribution by WUAs has improved equity. Formerly 12% of the area was non-functional and tail ends of canals received no water; currently all the upstream areas area receive water and 75% of the tail enders (although 42% of tail enders receive less than their full requirements.) Water allocation among the 16 WUAs is also problematic during drought as river basin managers are ineffective at allocation and dispute reconciliation. Sustainability has improved compared with the pre-project situation primarily because WUAs have financial autonomy and collect sufficient water user fees to cover operations and short-term maintenance. Even so, O&M fees are only a third to half of the levels needed to finance replacement investment. Increased agricultural production (modest). Irrigated areas are reported to have increased 20% to 50% over pre-project levels. There has been a switch from rain-fed low yielding crops to irrigated higher yielding crops and diversification to vegetables and fruits. Crop yields are reportedly 20 to 150% higher than pre-project levels although the evidence presented is scanty. Higher yields of forage crops have increased livestock density. Gross margins with irrigation increased by about a third compared with pre-project values and are almost doubled for rainfed areas converted to irrigation. Main shortcomings are the lack of adequate complementary inputs (seeds, fertilizer etc.,) and access to markets.
Reduce flood hazards (high). The target area for drainage was exceeded by 84% (92,000 ha vs 50,000 at appraisal) through rebuilding of drainage collection canals and rehabilitation of pumping stations. Judging from performance post-2002 after exceptionally heavy rains these efforts have reduced the incidence of flooding. However, a longer period of time will be require to collect data to verify a definite reduction in flood hazard. Ineffective state Water Enterprises have been replaced with 17 Drainage Boards that cut overhead costs through retrenchment and retirement of staff. Covering the whole country, they now include stakeholder representatives ranging from farmers and local governments and business entrepreneurs. Although there has been a change in the management culture the difficult question of adequate funding for operation and maintenance is unresolved - currently the Ministry of Agriculture only provides 35-40% of total budget needs and DBs are attempting to rationalize costs to close the budget gap.
Establish an institutional and legal framework for dam safety (modest). Due to the change in flood remediation priorities the number of dams benefiting was reduced from 30 to 25 and the budget allocated was cut by 70%. There is no mention of the progress towards establishment of an institutional and legal framework for dam safety and most of this work has been passed to a follow-on project.

5. Efficiency:

The ERR reported of 22% is unreliable. The details in Annex 3 are not convincing as it is only a reworking of the assumptions made at appraisal, is not based on sound and systematic M&E, and there is no distinction between financial and economic prices. Gross margins for various crop types are presented but the source of the average gross margins quoted are unclear - they do not have a clear relation to the data presented in the tables.
  • Another measure of efficiency is the rehabilitation costs per ha. Compared with appraisal estimates, rehabilitation of irrigation systems was US$353/ha compared with US$600 /ha and drainage was US$177/ha compared with an average of US$65 to US$200/ha. On this basis investment was quite efficient in meeting project targets.
  • Other potential measures of efficiency, such as the positive impact of WUA per area O&M costs were not made available; similarly although the overhead cost of drainage O&M appears to be reduced no data are presented.
6. M&E Design, Implementation, & Utilization:

The PAD (page 23) highlighted the difficulties of M&E in Albania's irrigation sector under the first project and proposed to redress it during this project. The Project Design Summary in the PAD provides a long list of outcome, output and process indicators but defers the details of M&E to the PMU. Substantial funding for TA to assist in setting up MIS was planned and implemented (ICR page 15 and 18) but did not yield any discernible improvement in M&E of outcomes, particularly agricultural costs and benefits, farmers' incomes or distributional aspects judging from Annexes 1 and 3.
7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative):

The impact of the project on the Ramsar site, the Karavasta Lagoon, was an issue at appraisal but the pilot watershed management study to assess impacts was dropped during the project. The report in the ICR is inadequate.

8. Ratings:
ICR
ICR Review
Reason for Disagreement/Comments
Outcome: 
SatisfactoryModerately SatisfactoryThe ICR's 4-point scale does not allow for a "moderately sat." rating.
Institutional Dev.: 
SubstantialSubstantial
Sustainability: 
LikelyLikely
Bank Perf.: 
SatisfactorySatisfactory
Borrower Perf.: 
SatisfactorySatisfactory
Quality of ICR: 
Satisfactory

NOTES:
- When insufficient information is provided by the Bank for IEG to arrive at a clear rating, IEG will downgrade the relevant ratings as warranted beginning July 1, 2006.
- ICR rating values flagged with ' * ' don't comply with OP/BP 13.55, but are listed for completeness.

9. Lessons:

Participation of farmers in the operation and maintenance of irrigation systems allied with measures to ensure the up-front co-financing of rehabilitation and improved governance yields high returns.
  • Ensure balanced attention to institutional support and capacity-building. While bypassing ineffective ministries and line agencies through establishments of independent PMUs may facilitate efficient project implementation, it must be recognized that they do have an important coordinating, policy, regulatory and monitoring functions that also needs to be strengthened.

10. Assessment Recommended?  Yes

          Why?  The first project was rated Highly Satisfactory (completed FY99) and exceeded its expectations yet data presented in this ICR shows that only 76% of its benefited area is adequately maintained and only 65% of the WUAs established then are now operational. This second project claims to have improved the efficacy of WUAs and rehabilitation through a demand-led approach. A joint PPAR of both projects would enable a comparison of the differing approaches and also the institutional sustainability of the newly established Drainage Boards. There is also a need to look more carefully into the benefits claimed.

11. Comments on Quality of ICR:

Satisfactory overall, but could have focused more on achievement of stated objectives. Gives a fairly good description of what happened but omits mention of the institutional aspects of dam safety management, and is very thin on the results of improved environmental management. The economic analysis is weak and appears to contradict the ICR's assertion that effective M&E was established.

(ES-Rev4B-Dec/05)
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