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Implementation Completion Report (ICR) Review - Groundwater And Soil Conservation Project


  
1. Project Data:   
ICR Review Date Posted:
02/20/2014   
Country:
Yemen
PROJ ID:
P074413
Appraisal
Actual
Project Name:
Groundwater And Soil Conservation Project
Project Costs(US $M)
 53.36  73.43
L/C Number:
C3860, C4497, CH420
Loan/Credit (US $M)
 40.00  54.24
Sector Board:
Agriculture and Rural Development
Cofinancing (US $M)
   
Cofinanciers:
Board Approval Date
  02/26/2004
 
 
Closing Date
10/31/2009 06/30/2012
Sector(s):
Irrigation and drainage (68%), Sub-national government administration (20%), Central government administration (12%)
Theme(s):
Water resource management (50% - P) Participation and civic engagement (25% - S) Rural policies and institutions (25% - S)
         
Prepared by: Reviewed by: ICR Review Coordinator: Group:
Hassan Wally
Kristin Hallberg Soniya Carvalho IEGPS1

2. Project Objectives and Components:

a. Objectives:
According to the Project Appraisal Document (PAD, p. 2) the objective of the project was to:


    "assist GOY (Government of Yemen) in promoting groundwater conservation in farming areas and increasing surface and groundwater availability through: (i) improving irrigation water use efficiency, thus increasing farmer returns to water and creating the conditions that would allow them to reduce groundwater pumping from aquifers towards sustainable levels; (ii) improving recharge and protection of watersheds in order to increase surface and groundwater availability through the improvement of small to medium spate irrigation schemes, bank protection works, terraces and other water harvesting structures; and (iii) supporting the groundwater management framework and institutions that will have the incentive and capacity to manage local water resources in a sustainable manner."
According to the Development Credit Agreement (DCA, p. 11) the objective of the project was to:
    "assist the Borrower in promoting groundwater conservation in farming areas and increasing surface and groundwater availability, through: (a) the improvement of irrigation water use efficiency; (b) the improvement of recharge and protection of watersheds; and (c) the support of groundwater management framework and institutions.
There are no differences in the wording of the project development objectives as stated in the PAD and DCA, except that the former provides more detail on the actions that the project will undertake to achieve the expected outcomes.

This review will use the objectives as stated in the DCA as a benchmark for the evaluation.

b. Were the project objectives/key associated outcome targets revised during implementation?
No

c. Components:
1. Modernization and Improvement of Groundwater Irrigation Systems (Appraisal cost: US$15.47, actual cost: US$30.12 million). This component would provide for the supply and installation of buried PVC and overground galvanized iron pipes to improve water conveyance and distribution efficiency, in turn reducing conveyance losses from existing tubewells to and on existing farms. It would also provide localized on-farm irrigation systems (drip, bubbler or sprinkler) for a part of the project area to further reduce on-farm water losses.
2. Improvement of Spate Irrigation, Water Harvesting and Soil Conservation (Appraisal cost: US$12.02 million, actual cost: US$21.08 million).This component would provide gabion baskets and other materials for the selective improvement of traditional small and medium spate schemes within identified wadis to improve spate conveyance, diversion efficiency, and groundwater recharge, in addition to associated wadi bank protection for villages. It would also involve rehabilitation of terraces to conserve soils from water erosion and water harvesting structures, and divert run-off water for irrigation and recharge the groundwater.

3. Institutional Strengthening of Water Institutions (Appraisal cost US$16.39 million, actual cost: US$14.26 million). This component would provide project implementation support, monitoring and evaluation activities, and institutional and capacity building support in the form of training and facilities to institutions involved in
the project.

d. Comments on Project Cost, Financing, Borrower Contribution, and Dates
Project Cost. The total project cost at appraisal was estimated to be US$53.36 million (PAD, Annex3). According to the ICR (Annex 1) the actual project cost was US$73.43 million. The project portal shows that the amount disbursed stands at US$54.79 million.

Financing. The project received US$53.76 million (US$41.22 IDA Credit and US$12.55 IDA Grant) compared to an appraisal estimate of US$40.00 million. On September 11, 2008, the project received US$15.0 million as IDA Grant which would finance scaling up of successful activities under the project. Parallel financing was provided by the Japanese Government- Ministry of Finance (US$1.03 million compared to an appraisal estimate of US$1.08 million, and US$50.73 thousand were cancelled).

Borrower Contribution. At appraisal it was estimated that the borrower and local communities would contribute US$7.55 million and US$5.81 million, respectively. The ICR (Annex 1) reports additional financing of US$2.52 million for the borrower and US$3.63 million from local communities. Actual total financing as reported by the ICR (Annex 1) was US$4.16 million for the borrower and US$15.03 million from local communities.

Dates. On January 13, 2009 the Bank agreed to extend the closing date of the project by two years until October 31, 2011. The closing date was extended again to June 30, 2012 to accommodate delays resulting from political turmoil in 2011 and allow the completion of a number of contracts (works and goods) amounting to US$6.6 million.


3. Relevance of Objectives & Design:

a. Relevance of Objectives:
High. Yemen is a water scarce country with declining ground water resources. Irrigated agriculture remains the main economic activity in the rural areas where 68% of the 24.1 million people live. The depletion of ground water resources - due to unsustainable extraction combined with dwindling rates of recharge - directly impacts poverty, employment and social order. At project completion the project objectives continue to be highly relevant and in line with the Government's priorities and the Bank's Country Assistance Strategy (CAS). The objectives are in line with the Government’s National Water Sector Strategy and Investment Program Update (2008 – 2015) which calls for sustainable and economically efficient use of Yemen's scarce water resources. They are also in line with the Bank’s Country Assistance Strategy for Yemen (April, 2009) for the period of FY2010 to FY2013 which calls among its strategic objectives to “help manage natural resources scarcity and natural risks”, especially to slow down the depletion of water resources. Hence, the conservation of the groundwater resources, improvement of surface spate irrigation systems, and support for the watershed areas is a national top priority. At appraisal the objectives were in line with the Bank's Country Assistance Strategy for Yemen (2002) which identified improvement of water resources management as a CAS priority and underlined the vital role that water resources play in keeping Yemen’s economy profitable and sustainable. The CAS points to the need for urgent action on water resources management in rural areas and, in particular, investments in order to reduce aquifer depletion and improve watershed management, with a focus on the most stressed agricultural areas. In response to this, the Bank prepared its Country Water Resources Assistance Strategy (CWRAS) in 2005 to produce an operational plan for Bank involvement in the water sector.

b. Relevance of Design:
Negligible. Design includes a clear statement of objectives that enlists specific approaches to achieve them. To achieve the stated objectives, the design featured different measures to address water management - mostly on the supply side. The first component aims to improve conveyance and on-farm irrigation efficiency; the second component would support efforts to improve spate irrigation and increase water harvesting and ground water recharge, while the third component would strengthen physical and technical capacity of water management institutions.
While design components were relevant and with clear intermediate and final outcomes, the absence of a systemic approach rather than just focusing on technical measures to reduce farmers' water expenditure and increasing water productivity in farming, is unlikely to achieve the project objectives. The design was overly focused on achieving agricultural goals of reducing irrigation expenses and increasing water productivity in farming. The small scale of the project (reaching only 5-10% of farmers using groundwater) and the failure to control water use by other farmers in the community casts doubt on the possibility of effectively impacting ground water depletion. The ICR (p. 18) states that the design was "inadequate" to overcome aquifer depletion.


4. Achievement of Objectives (Efficacy) :

(a) "to assist the Borrower in promoting groundwater conservation in farming areas." Substantial.

Outputs:
  • Improved conveyance of groundwater irrigation covered 50,868 ha compared to an original target of 27,000 ha and a revised target of 44,500 ha and zero ha at baseline and the number of farms benefitting was 12,003 compared to an original target of 7,000 and a revised target of 11,700; and the expansion in irrigated area was 3% versus a target of 0%.
  • Pressurized modernized irrigation covers 2,238 ha compared to a revised target of 2,440 ha and a baseline of zero ha.
  • Land levelling activity for Tihama and Hadramaut field units was cancelled because the cost of a laser guided grader was far beyond the appraisal estimate and the Government was not keen to carry out this demonstration by purchasing such expensive equipment (ICR, p. 24).

Outcome:
  • The project improved irrigation efficiency through financing piped conveyance of ground water and pressurized irrigation systems in project areas. This led to an estimated saving of 83 million cubic meters (MCM) per year of ground water against the original target of 47 MCM per year and a revised target of 77 MCM. Also, the application of pressurized irrigation in project areas improved on farm irrigation efficiency and led to increasing value per unit of water consumed by about 46% from US$0.24 to US$0.35 per cubic meter. In addition, net farmers' income in project areas increased by 20% compared to baseline. There is ample evidence that the end-project achievements exceeded almost all targets. Water savings and the area in which more efficient water management practices were adopted were significantly above target. Farmers reported savings in pumping costs. It is reasonable to assume that these changes were due to the project activities.
  • However, there was limited achievement to monitor and move toward comprehensive reductions in groundwater consumption and effective management of aquifer depletion. The absence of data on the net water balance makes it challenging to gauge the impact of project intervention on ground water conservation in farming areas. The ICR (p. 29) reports that "groundwater depletion from the aquifers continues to increase at an alarming rate because the project has reached only to 5 – 10 % of the farmers using groundwater, and there is almost no control over the other 90 – 95 % of farmers."

(b) "to increase surface and groundwater availability." Substantial.

Outputs:
  • By project completion 62 small/medium spate diversion weirs were constructed compared to an original target of 55, and 172 bank protections compared to an original target of 105 and a revised target of 130 and 141 canal controls compared to an original target of 126 and a revised target of 146.
  • By project completion 356 km of terraces were rehabilitated compared to an original target of 95.8 km and a revised target of 170 km. Also, 293 wadi bank protections were carried out in the uplands compared to an original target of 302.
  • The project supported farmers' participation in community based water management through the formation of water user groups. By project completion, 2582 water user groups were organized against an original target of 1,520 and a revised target of 2080. While some communities have acted to enforce well spacing and report illegal well drilling, effective, sustainable community-based water management is not yet established. It is not clear how many water user groups were fully functional at project completion.
  • By project completion 100 demonstration flow meters (compared to an original target of 77 and a revised target of 105) were installed on demonstration farms for estimating water savings as compared with water pumped in control areas. Also, 551 flow meters (compared to an original target of 1000 and a revised target of 606) were installed on farmers' wells to record water usage.
  • The project supported watershed protection and recharge enhancement in the project area. By project completion, 4,939 ha compared to an original target of 4,621 ha and a revised target of 5,641 ha were protected and under recharge.

Outcome:
  • The project supported the construction of small and medium spate diversion weirs, building and/or rehabilitating terraces, and building recharge pits and bank protection structures. The project achieved and in some cases exceeded its output and intermediate outcome targets. Such achievements would be expected to improve watershed protection and thus increase surface and groundwater availability.
  • While most of the physical targets were attained with some delays, the ICR provides limited information on the impact of project activities on surface and ground water availability. This was partly because the Government did not allocate budget to carry out monitoring and analysis of groundwater. Satellite monitoring data of 487 project well sites showed that net evapotranspiration actually increased at some sites; and beneficiary farmers, although noting significant savings in pumping costs, did not report increases in groundwater levels.

5. Efficiency:

The PAD (Annex 4) includes an economic and financial analysis of the project. Financial prices at the farmgate were used in the calculation of costs and revenues. Input and output prices were assumed at 2003 constant values, as was the real exchange rate throughout the 20 year time horizon used in the analysis. The financial discount rate was assumed to be 10 percent. The Financial Rate of Return (FRR) for the overall project is estimated at 15.8 percent if subsidies on investments are included in the calculated costs. Economic benefits are calculated on the basis of: (i) incremental crop production coming from more adequate and secure water delivery and improved technology; and (ii) reduced costs of production under irrigation. The overall Economic Rate of Return (ERR) of the project was estimated at 16.5 percent with a discount rate of 10 percent and a Net Present Value (NPV) of US$14.5 million.
The ICR (Annex 3) includes an economic and financial analyses that follows the same logic at appraisal. According to the analyses, the overall project ERR is estimated at 36.4 percent and a net present value (NPV) of US$62.3 million at a 10 percent discount rate. The project investments resulted in improved levels of family incomes for project beneficiaries, where incomes increased from 13.8 to 27 percent over the previous levels-the ICR does not specify previous levels. The combined effects of increased value of production on benefited farms together with reduction in production costs (mainly from the reduction of groundwater pumping by 16%) resulted in a 43% increase of the pumped water productivity from YR53 of net value of production per cubic meter of water pumped to YR76. The higher ERR estimated at closing compared to appraisal resulted from increasing the coverage area of the project due to additional project financing ($59 million instead of the budgeted $35 million). In addition, yield increases from piped conveyance, localized irrigation and spate/water harvesting investments ended up being higher: 6, 13 and 3% respectively, instead of 5, 10 and 2% estimated at appraisal. Also, water savings assumed at appraisal to reach 12 and 30% for piped conveyance and localized irrigation respectively, ended up being 15 and 31%; and prices of agricultural products have more than doubled in real terms between 2003 (appraisal year) and 2012 (ICR year), making agriculture more profitable than anticipated. Finally, component 3 (institutional strengthening and support for the PCU) ended up spending only $14.3 million representing 19.5 % of project costs instead of spending $18.8 million representing 25 % of project costs.

The ICR analysis could have benefitted from some measure of cost effectiveness to compare cost of the schemes supported by the project with other similar projects in the country. The ICR economic analysis carries an ERR that is almost double the estimate at appraisal, considering only direct benefits generated from increased value of production and reduced pumping costs. Although the ICR mentioned several reasons for such increase, the analysis is not clear regarding the different off and on-farm improvements, as well as cost recovery modalities. It is also not clear whether the project investment costs had been converted into the 2012 constant values as the other input/output prices in the analysis; and whether the government subsidy provided to the beneficiaries for enhancing investments under the project had been also considered as the annual investment costs. Also, the pumping and labor costs need further discussion since they both play an important role in the cost structure of farmers. Finally, the ICR (p. 6) reports that during the political unrest, shortage and high prices of diesel led to less pumping and loss of access to markets in some areas, reducing farmer incomes by over 50% in areas of: Northern, Dhamar, Taiz, and Lahej.

Substantial, but with weaknesses.

a. If available, enter the Economic Rate of Return (ERR)/Financial Rate of Return at appraisal and the re-estimated value at evaluation:


Rate Available?
Point Value
Coverage/Scope*
Appraisal:
Yes
16.5%
75.5%
ICR estimate:
Yes
36.4%
80%

* Refers to percent of total project cost for which ERR/FRR was calculated

6. Outcome:

Relevance of objectives is rated high, while relevance of design is rated negligible. The project objectives are highly relevant and are on top of the Government's priorities, however, design was inadequate to address aquifer depletion through focusing only on the supply side of water management. Efficacy is rated substantial for the first and second objectives. The project succeeded in achieving 16% savings in pumped ground water through promoting piped conveyance and efficient on farm irrigation technologies in project areas, however the impact on groundwater conservation is not clear given the absence of data on the net water balance. The project also attained its physical targets for small and medium spate diversion weirs, building and/or rehabilitating terraces, and building recharge pits and bank protection structures, but the ICR provides limited information on the impact of project activities on surface and ground water availability. Efficiency is rated substantial, but with weaknesses. ICR analysis could have benefitted from some measure of cost effectiveness to compare cost of the schemes supported by the project with other similar projects in the country.

a. Outcome Rating: Moderately Satisfactory

7. Rationale for Risk to Development Outcome Rating:

There is high risk that the operation and maintenance of small and medium spate irrigation systems are not being carried out by beneficiaries. This could shorten the expected the lifetime of such structures and undermine the achievement of the project objectives. The ICR (p.15) notes that government funding would be needed to stimulate beneficiaries mobilization. There is also a high risk that the larger goal of controlling groundwater depletion will not be achieved, even though farmers in project areas may have substantially reduced their pumping, unless a comprehensive approach is applied that can reduce groundwater consumption at a community scale. Finally, the savings achieved in project areas could be undermined by any expansion in irrigated areas by neighboring non-project farmers or by project farmers themselves who breach the tripartite agreement.

a. Risk to Development Outcome Rating: High

8. Assessment of Bank Performance:

a. Quality at entry:
The Bank identified a project with highly relevant objectives to the country and on top of the Government's priorities. The project design was influenced by the experience of the Land and Water Conservation Project which relied on improving irrigation efficiency to strengthen sustainable agriculture. This project aimed to tackle aquifer depletion through improving conveyance and on-farm irrigation efficiency to reduce ground water pumping, as well as to improve water harvesting and increase ground water recharge and establish local ground water management. The ICR (p. 4) highlights that in May 2005 a Quality at Entry Panel analyzed the project design rating it as “Satisfactory”. The PAD (p. 17) acknowledges that water resource management problems should be dealt with in a holistic approach, but such approach requires a number of years to conduct various hydrogeological studies with several years to test. It is not clear if such studies were reflected in the project design.

  • The project design suffered from a number of shortcomings: first, design relied on the tripartite agreement-which is a contract with individual farmers, as the main instrument governing water extraction rather than broadening the agreement to encompass the entire population of stakeholders using the groundwater aquifer. Second, design was overly focused on tackling the supply side rather than pursuing a comprehensive approach to ground water management. While achieving savings through localized technical means is worth pursuing, design lacked a broader focus that would include technical, agricultural and management approaches to tackle ground water conservation on a larger scale. Third, design lacked an enforcement mechanism to prevent non-project participants from stepping in and using local water savings which would undermine the ultimate goal of minimizing aquifer depletion. Fourth, the technical approach featured by the design actually carries the risk of accelerating ground water depletion. The ICR (p. 18) notes that satellite monitoring indicates that total water consumption from cropped fields in the project areas has increased. Fifth, design suffered from a narrow focus to achieve better efficiency at conveyance and farm level irrigation and did not address other relevant and critical dimensions related to irrigation. This includes the impact of project investments on various irrigation flows (abstraction, application, consumption through evapotranspiration, runoff, and recharge) and on aquifer life.
  • Design could have benefitted from promoting sustainable agricultural measures as well as cost-effective on-farm water conservation measures aimed at reducing evapotranspiration including: zero tillage, mulching, deficit irrigation, furrow irrigation, cropping pattern changes, plasticulture, weed control, (PAD, p. 7) which are all low cost complements to physical investments.
  • There were some shortcomings on M&E design especially the lack of adequate indicators to measure ground water conservation and the impact of the project on strengthening water management institutions (see section 10).

Quality-at-Entry Rating: Moderately Unsatisfactory

b. Quality of supervision:
The Bank team worked consistently to promote and implement the use of modern irrigation systems and more efficient water management by local stakeholders. The Bank worked to facilitate implementation by promptly responding to queries by the Government and/or project coordination unit. The Bank also provided support on several aspects during implementation including procurement advice on problematic contracts, financial management assistance, technical guidance on piped conveyance and localized on-farm irrigation systems and groundwater monitoring, environmental assessment, and social, poverty and gender assessment of the project impacts. The Bank team also managed to scale up the project by designing an Additional Financing to expand the scope of the project especially for component 1. However, the project team should have been more proactive in ensuring the collection and analysis of groundwater data to measure the impact of the project on stabilization of the groundwater aquifers.

Quality of Supervision Rating: Moderately Satisfactory

Overall Bank Performance Rating: Moderately Satisfactory

9. Assessment of Borrower Performance:

a. Government Performance:
The Government was generally responsive to issues raised by supervision missions and provided counterpart funding for infrastructure projects as agreed, but with delays. At the initial stage of implementation, there were delays in approvals of imported equipment by the Ministry of Finance and Central Bank of Yemen, and delays in release of such equipment by customs authorities. Collection and analysis of ground water data was not carried out due to local budget constraints. Consequently, no valuable analysis was carried out for measuring the impact of the project on stabilization of the groundwater aquifers in project areas. By-Laws to the Water Law to manage groundwater resources in the country were issued in 2011 after a prolonged process of preparation discussions. The security situation was unstable throughout implementation due to political conflicts which became even worse in 2011.

Government Performance Rating: Moderately Unsatisfactory

b. Implementing Agency Performance:
The Ministry of Agriculture and Irrigation was the implementing agency for the project. It was supportive of project activities even during periods of political unrest. The project coordination and field units staff were dedicated and well organized in terms of procurement, inventory and fiscal management, which had been computerized and connected through internet. The staff worked hard to achieve the project objectives and performed their duties in rural areas and mountain regions of the country despite the security situation. The ICR (p. 17) notes that beneficiaries appreciated advice they received from the Irrigation Advisory Service and support from Field Units throughout implementation.

Implementing Agency Performance Rating: Satisfactory

Overall Borrower Performance Rating: Moderately Satisfactory

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

a. M&E Design:
The PAD (p.p 3-4 and Annex 1) listed a set of output indicators and outcome indicators most of which were relevant to track the project's outputs and outcomes. Most indicators related to physical targets. Design included indicators to measure savings at the pump and water use efficiency, however, it lacked indicators that would adequately capture the achievement of the first objective--to conserve ground water, for example, through including an indicator that measures evapotranspiration. Also, design included indicators to reflect the progress of the project towards the goal of establishing a local water management system, however, such indicators were not adequate to show the sustainability of the results in terms of stabilization of groundwater levels over time. Design also could have benefitted from an indicator that reflects the impact of the project on strengthening water management institutions, for example, the number of fully functional water user groups rather than using the cost of institutional strengthening as an indicator.

b. M&E Implementation:
M&E activities were carried out especially for activities under component 1 and 2 despite a difficult security situation towards the final years of the project (ICR, p. 6). M&E implementation units were established with adequate staffing, training and supervision. Data was collected on the farmers participating in the project under component 1. In addition, information was collected on water pumping form 100 demonstration farms and flow meters on another 500 wells. Data was also collected from separate monitoring wells close to project areas and included in a data base. Satellite monitoring technology was introduced later in the project to monitor irrigated areas by project farmers and assess evapotranspiration in project areas. Data was also collected on the number of water user associations and water user groups formed. A beneficiary survey was conducted in April-May 2012 where beneficiaries were selected using a stratified sample. In total 100 beneficiaries were interviewed in addition to 23 non-beneficiaries; 38 focus group discussions and system walk-throughs were held and 20 key informants were interviewed.

a. M&E Utilization:
Data analysis was mainly carried out for the deduced amount for ground water abstraction. This provided a valid source of information to confirm the reduction of pumping by project farmers. However, little was done on the stabilization of ground water table in project areas and there was no monitoring of water use by neighboring non-project farmers (ICR, p. 7). Water saving data were explained to farmers on field days held on demonstration farms. Satellite image analysis confirmed that there was almost no expansion of irrigation areas by the project farmers. Overall, it was not possible to establish causal relationships between project interventions and changes in groundwater levels due to the failure to collect and analyze ground water data, dispersed nature of project activities, small size of project activities relative to overall water abstraction, complexity of aquifer systems and multiple factors impacting depletion (ICR, p. 7).

M&E Quality Rating: Modest

11. Other Issues:

a. Safeguards:
The environmental category of the project is B (partial assessment). Two safeguards were triggered at appraisal: Environmental Assessment (OP/BP 4.01), and Pest Management (OP 4.09) while Physical Cultural Resources (OP 4.11) was triggered during implementation.
Environmental Assessment (OP/BP 4.01). An Environmental Management Plan (EMP) was prepared in January 2003 and disclosed both in country and in the Infoshop on March 2003. The EMP focused on prevention of general construction impacts through the insertion of environmental clauses in the tender documents; and the prevention of site-specific impacts through the use of simplified impact analysis at the design stage to develop site-specific environmental actions. An environmental field analysis (EFA) was carried out for the construction of medium spate diversion structures and canals and pit excavations for water retention under Component 2. The analysis reports that no adverse impacts are likely to be found on the physical, biological, and social environments as a consequence of the construction of medium spate diversion works, canals, and pit excavations for water retention; no negative impact has been observed during or after implementation of works; positive impacts are observed in terms of groundwater recharge, desertification control and improvement in vegetative cover; and a decrease of stagnant water can be observed as a results of the construction (ICR, p. 8).

Pest Management (OP 4.09). The project carried out an integrated pest management (IPM) action plan. IPM training and implementation received adequate resources and staffing. The plan included training of trainers; IPM demonstrations; public awareness campaign; and groundwater quality analysis. IPM training and implementation received adequate resources and staffing. A total of 1,251 farmers were trained under the project, and five IPM plans were adopted in four Governorates (Hadramaut, Hodeidah, Dhamar and Lahej).

Physical Cultural Resources (OP 4.11). The Environmental Management Plan recommended precautionary measures to prevent any damage to cultural objects. In Haksar, located in Dhamar Governorate, one cultural site was discovered. The discovery was promptly brought to the attention of the General Authority for Antiquities, Museums, and Manuscripts and appropriate measures were taken to avoid any disturbance of the cultural property. No further discoveries were made thereafter.

b. Fiduciary Compliance:
Financial Management. The project coordination unit adequately maintained financial management arrangements during most of the project life. Withdrawal applications were smoothly processed except during the political and security crisis that affected Yemen in 2011 and led the Bank to suspend the disbursements across the Yemen portfolio from July 28, 2011 to January 20, 2012. All audit reports were timely submitted to the Bank with unqualified opinion. In the management letters, none of the issues flagged by the external auditors was so material and no accountability issues have been identified.

Procurement. The project coordination unit sustained adequate capacity level to handle procurement throughout the life of the project. Procurement operations were in accordance with the respective procedures approved by the Bank without any major noncompliance issue. The Procurement Plan was revised and updated from time to time and Bank’s approval was provided as necessary. In September 2005, the project adopted the concept of "community contracts" to ensure greater involvement of communities in the implementation procedure for small works under spate improvement and water harvesting works. Such procedure allowed for contracts with a value not exceeding US$10,000 per contract using fixed unit rates approved by IDA and valid for one year. These rates were revised annually. In some cases, when some communities/Water User Groups were not willing to implement works costing less than US$10,000 on this basis, the field unit director resorted to a competitive bidding procedure for implementing such works by calling quotations. A total of 3,394 contracts for procurement of goods, consultancy services and training, and works were signed during the implementation period. Procurement process was impacted by external factors where some contracts were not completed or cancelled due to different reasons such as site disputes, poor design and lack of capacity in contract management. The last batch of additional pipes was not delivered before the closing date of the IDA grant due to security problem in the country, which was eventually paid from the Revolving Fund, instead of IDA grant.

c. Unintended Impacts (positive or negative):
Positive. The project contributed to climate change adaptation by promoting awareness of groundwater depletion among farmers who use 95% of the available water in the country and provided monitoring equipment for groundwater levels as well as flow meters for irrigation pumps to control water use by farmers themselves. The project also supported rain water harvesting infrastructure (terraces, spate diversions, groundwater recharge pits, check dams, etc.) which can be valuable means to cope with climate change impact in Yemen. The project team explained that climate change could lead to more rain fall in Yemen.

d. Other:



12. Ratings:

ICR
IEG Review
Reason for Disagreement/Comments
Outcome:
Moderately Satisfactory
Moderately Satisfactory
 
Risk to Development Outcome:
Significant
High
There is high risk that the operation and maintenance of small and medium spate irrigation systems are not being carried out by beneficiaries. There is also a high risk that the larger goal of controlling groundwater depletion will not be achieved unless a comprehensive approach is applied that can reduce groundwater consumption at a community scale. Finally, the savings achieved in project areas could be undermined by any expansion in irrigated areas by neighboring non-project farmers or by project farmers themselves who breach the tripartite agreement.  
Bank Performance:
Satisfactory
Moderately Satisfactory
There were significant shortcomings in Quality at Entry relating to design (see section 8a).  
Borrower Performance:
Satisfactory
Moderately Satisfactory
Government performance suffered from significant shortcomings. There were delays in approving imported equipment and provision of counterpart funds. Also, failure to provide funding necessary for the collection and analysis of ground water data.  
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.
- The "Reason for Disagreement/Comments" column could cross-reference other sections of the ICR Review, as appropriate.

13. Lessons:
The following lessons are emphasized with some adaptation by IEG:
  • Project design. Ground water management requires a systematic approach to move communities toward comprehensive reductions in water consumption and effective management of aquifer depletion. The spread of efficient irrigation technologies could lead to savings at the pump given no increases in irrigated areas. However, farmers could be tempted to increase their irrigated areas especially in the absence of proper enforcement arrangements, which may actually accelerate rather than reduce groundwater depletion.
  • Alternative Livelihoods. In areas where affordable groundwater stocks are being exhausted, assistance should also be provided to help farmers cope with the transition to non-irrigated livelihoods. This would include specific support for transitions to alternative livelihoods. As part of this, it would be useful to explore win-win mechanisms, including buyouts or early retirement of irrigated land, to compensate farmers for reducing irrigated area and water consumption. This would need to be done only where local regulation was effective enough to limit irrigated area or water consumption, so that reductions by one farmer are not simply used by others. Payments might be done on a lease basis with payments contingent on continued compliance, which can be monitored by local observation and satellite imagery. Win-win compensation levels should be attractively higher than the income from irrigated agriculture, which would still be much cheaper than the opportunity cost of additional water supply from other sources, such as inter-basin transfer or desalination.

14. Assessment Recommended?

No

15. Comments on Quality of ICR:

The ICR provides thorough coverage of project activities and reports candidly on most shortcomings. It includes five lessons based on the project experience, however, some lessons are lengthy and lack focus. The ICR provides limited evidence on the impact of the project on aquifer depletion. Also, in Annex 3, the ICR refers to tables 1 to 40 (GSCP_ICR_Results Final.xls) that are not included in the document. Also, p. 12 para 46 the ICR stated that: "instead of spending $18.8 million (representing 35 % of project costs)" should be 26% of project costs not 35% given that total costs were about US$73 million. In addition, the numbers reported in p. 31, para 12, are not identical to those reported in Annex 1.
Overall, ICR is rated satisfactory, but with some weaknesses.

a. Quality of ICR Rating: Satisfactory

(ICRR-Rev6INV-Jun-2011)
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