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Implementation Completion Report (ICR) Review - Integrated Watershed Management Development Project

1. Project Data:   
ICR Review Date Posted:
Project Name:
Integrated Watershed Management Development Project
Project Costs(US $M)
 193.0  184.8
Loan/Credit (US $M)
 135.0  131.6
Sector, Major Sect.:
General agriculture fishing and forestry sector, General public administration sector, Other social services, Roads and highways, Water supply,
Agriculture fishing and forestry; Law and justice and public administration; Health and other social services; Transportation; Water sanitation and flood protection
Cofinancing (US $M)
L/C Number:
C3243; L4492      
Board Approval (FY)
Partners involved
Closing Date
03/31/2005 09/30/2005
Evaluator: Panel Reviewer: Division Manager: Division:  
Christopher D. Gerrard
George T. K. Pitman Alain A. Barbu IEGSG

2. Project Objectives and Components:

a. Objectives
The project had two objectives:

(1) To improve the productive potential of the project area in the five participating states (Jammu & Kashmir, Himachal Pradesh, Uttaranchal, Punjab, and Haryana), using evolving watershed treatment technologies and community participatory approaches. This would contribute significantly to decreasing soil erosion, increasing water availability, and alleviating poverty in the project areas.
(2) To assist the states with institutional development and consolidate progress already made in harmonizing approaches to watershed development management among various programs in the Shivalik Hills (the foothills of the Himalayas), which constitute a contiguous region lying within the borders of the five participating states.
The project was a follow-on project to the Integrated Watershed Management (Hills) Project which closed 2 1/2 months before this project was approved. OED completed a PPAR of the first project in June 2000.

b. Components (or Key Conditions in the case of Adjustment Loans):
The project had two components, the first focusing on primary (treatment) activities and the second focusing on secondary (support) activities. Both components had several sub-components, as follows:

(1) Watershed Protection and Development (US$ 139.2 million at appraisal and US$ 144.3 million actual):

    (a) watershed treatments
    (b) fodder and livestock development
    (c) rural infrastructure development.
(2) Institutional Strengthening (US$ 53.8 million at appraisal and US$ 40.5 million actual):
    (a) policy reforms, studies and human resource development
    (b) beneficiary capacity building
    (c) income generating activities for women
    (d) information, management, monitoring and evaluation
    (e) project coordination.

c. Comments on Project Cost, Financing, Borrower Contribution, and Dates
All project funds (foreign and local) were spent at project closure. The decline in project costs relative to appraisal estimates is due entirely to the depreciation of the Indian rupee during the project. The Government of India contributed $34.5 million (compared to $45.0 million at appraisal), and beneficiaries contributed $18.7 million, or 44% more than anticipated ($13.0 million) at appraisal. There were no external co-financiers. The project was extended for six months to consolidate project achievements and help ensure sustainability.

3. Relevance of Objectives & Design:

The objectives of the project were highly relevant. These addressed both conservation and development: conserving the fragile natural ecology of the project areas and promoting sustainable production systems for agricultural, livestock, and forest products. Rural development, rain-fed agriculture, poverty reduction, and environmental sustainability are all key objectives in both national development plans and Bank CASs.

The design of the project comprised an appropriate mix of treatment and support activities, promoted important policy changes such as cost-sharing with beneficiaries, and built on lessons from previous projects in three areas:
(1) a demand-driven implementation mode, (2) an incentive-based rather than control-based natural resource management strategy, and (3) reaching out to marginalized and vulnerable groups, particularly women and nomads.
But the ICR rated overall quality at entry as unsatisfactory due to four design weaknesses:
(1) Insufficient preparation for community-level mobilization
(2) Inadequate arrangements for ensuring effective coordination among different government agencies (e.g. soil conservation, forestry, agriculture, horticulture, and animal husbandry) at the district level
(3) Lack of a framework for maintaining balance between conservation and development goals, especially when demand-driven popular choice favored the latter
(4) Lack of a uniform and systematic monitoring and evaluation framework.

4. Achievement of Objectives (Efficacy) :

Objective (1): Improving the productivity of arable land while slowing down/reversing the degradation of natural resources was substantially achieved with few shortcomings.

Evidence includes:

  • Higher than expected gains in crop productivity, cropping intensity and crop diversification
  • Significant increases in numbers of improved cows and buffaloes, and increased milk productivity
  • Improved access to input and output markets, improved access to drinking water, and more diversified economic activities as a result of substantial rural infrastructure investments
  • Saving/reclaiming non-arable land, reducing soil run-off, and increasing perennial vegetative cover.
  • Overall hydrological regeneration (better soil moisture regimes and groundwater augmentation) and enhanced biodiversity and ecological restoration of forests -- although systematic, project-wide data are not available for this (see section 6 below).
The demand-driven nature of project implementation led to substantially increased expenditures on the rural infrastructure subcomponent (increasing from 13 to 33% of project costs) compared to the watershed treatment component (falling from 48 to 37% of project costs). Available data are insufficient to assess whether this compromised the achievement of the conservation objectives of the project.

Objective (2): Assisting the five participating states with institutional development and harmonization of approaches to watershed development management was partially achieved with some shortcomings.
Good progress was made in mainstreaming cost-sharing, community participation, and empowerment. The project has fostered development of local organizations which are representative, empowered and accountable. It successfully targeted support to women for income generating activities and to previously marginalized tribal and transhumant groups. Women are increasingly engaged in the institutional and decision-making processes in their communities.
But less progress was made in (a) achieving effective coordination among line departments of state government,
(b) instituting better linkages between project-supported village institutions and local governments, and (c) developing less transaction-intensive implementation modalities.

5. Efficiency:

For the production-related benefits arising from interventions in agriculture, horticulture, livestock, farm forestry, and afforestation as well as the quantifiable benefits from investments in rural infrastructure (roads, markets, and potable water supply), the ICR estimated an ERR of 14.7% compared to 16.6% at appraisal. Broadening this to include environmental and natural resource benefits from saved and reclaimed land and from improved soil fertility, this increases to 15.7% compared to 17.2% at appraisal.

The difference between ICR and PAD estimates arises mainly from differences between assumed and realized values to (a) production benefits from agriculture, and (b) area under silvipasture, farm forestry, and afforestation.

6. M&E Design, Implementation, & Utilization:

Monitoring and evaluation was deficient compared to expectations. The project failed to develop a uniform and systematic framework for evaluation of project outcomes and impacts across the five states, in spite of this being a lesson noted in the PAD. Although an ex post impact evaluation study was conducted by the Energy and Resources Institute in New Delhi, and although a large volume of diverse data was collected in the course of project implementation, the M&E system did not generate sufficient systematic data, comparable across the different project states, to enable a full assessment of project outputs, outcomes and impacts. This failure compromised the ability of the project to systematically capture and represent some innovations and achievements (such as hydrological regeneration and enhanced biodiversity), about which only partial, non-uniform evidence is available.
7. Other (Safeguards, Fiduciary, Unintended Impacts--Positive & Negative):

The project was classified in environmental category B. It was expected to have and has had a positive environmental impact in alleviating one of India's most serious ecological problems -- the environmental degradation of the Shivalik Hills. The rural infrastructure component was not expected to have a negative impact on the environment because only existing infrastructure would be rehabilitated and upgraded. If anything, improving rural roads was expected to minimize soil erosion with proper design and appropriate drainage.

The Bank's task team and investigation unit investigated allegations of financial mismanagement received from one of the five states (Jammu and Kashmir). This investigation found some inefficiencies in financial management, but no major irregularities.

8. Ratings:
ICR Review
Reason for Disagreement/Comments
Institutional Dev.: 
LikelyLikelyVillage-level institutions still require technical support to maintain community investments supported by the project.
Bank Perf.: 
SatisfactorySatisfactoryGood supervision compensated for poor quality at entry.
Borrower Perf.: 
Quality of ICR: 

- 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:

The ICR has extracted a number of relevant lessons from the experience with this project.

(1) Involving local communities in the planning and implementation of natural resource management interventions improves outcomes by enhancing ownership, by accessing exclusive local knowledge and information, and by better integrating the conservation goals with local livelihood concerns.
(2) That having been said, mobilizing local communities and building their capacity in support of conservation and development objectives takes time. But such efforts are as critical as external finance in achieving project objectives and work powerfully when matured.
(3) Since many conservation measures in watershed projects typically benefit landowners, it is also important to have pro-poor interventions targeting the weaker and marginal segments of the community in order to increase their stake in the project as well.
(4) For projects with a demand-driven planning and implementation modality and with multiple -- conservation and productivity -- objectives, it is essential to have a well planned and executed monitoring and evaluation framework with relevant output and outcome indicators, especially to help assess the trade-offs involved in large allocational changes across project components and to help project staff and the beneficiaries make more informed choices consistent with both conservation and development.

10. Assessment Recommended?  No


11. Comments on Quality of ICR:

This is an exemplary ICR that should be a candidate for IEG's best ICR award for FY06. It is concise while covering all the bases. It is very forthright about both the strengths and weaknesses of the project. And it extracts good lessons from the project experience.

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