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Algeria : Cheliff Irrigation Project (Loan 2809-AL)

The Algeria Cheliff Irrigation Project, supported by Loan 2809-AL for US$94.0 million equivalent, was approved in FY87. The Loan was closed on schedule in FY95. US$46.8 million equivalent was canceled at project closing since most of the work planned had not been implemented. Security conditions deteriorated rapidly during the life of the project and were a major factor in the unsatisfactory results obtained, despite the efforts of the Algerian authorities. The Implementation Completion Report (ICR) was prepared by the FAO/World Bank Cooperative Program as a desk review since security problems prevented a field visit. No comments were received from the borrower.

The overall objective of this seven-year project was to increase agricultural production through the operationalization of the first time-slice of the Cheliff Water Master Plan, which had been prepared with support from a previous project (Loan 1802-AL). The project was designed to improve and expand irrigation in the Cheliff river basin through a combination of institutional reforms and hardware investments. Five thousand ha of irrigation in Bas Cheliff were to be rehabilitated, and 8,000 ha of new irrigation developed in the Haut Cheliff. The loan provided funding for irrigation works, equipment and vehicles, technical assistance, studies and training, on-farm investments and incremental salaries and operating costs. This design was too ambitious given known institutional and financial weaknesses in the country. And the project followed three earlier projects in the agricultural sector, all of which had performed unsatisfactorily. Nevertheless, the risks of project failure were considered to have been minimized by the grouping of procurement packages and the introduction of a strict system of monitoring agricultural performance so that early remedial measures could be taken if problems arose.

The overall project objectives were not achieved. Agricultural production has not increased and arrangements for the operation and maintenance of irrigation have not improved. Security issues hampered the work of consulting firms, suppliers and contractors, and implementation was constrained from the start by complex administrative and banking procedures and a steady decline in the value of the Algerian dinar. The intended impact on agricultural production was not achieved since none of the irrigation works had been installed by project completion. Many institutional changes during project implementation disrupted work in the irrigation agencies and the planned strengthening of government institutions did not materialize. The executing agency, Agence national de r‚alisation et de Gestion des infrastructures hydrauliques pour l'Irrigation et le Drainage (AGID), lacked the necessary experience and staff to manage and monitor such a large and complex project. Implementation was so slow that the initial deposit of the Bank and the borrower into the Special Account took five years to disburse. Audit reports were consistently submitted late.

The Operations Evaluation Department (OED) agrees with the ICR in rating the outcome of the project as unsatisfactory, sustainability as unlikely and institutional development as negligible. OED disagrees with the ICR rating of Bank performance as satisfactory, and instead rates it as unsatisfactory on the basis of an inappropriate project design and failure to insist on a mid-term review or, alternatively, early project closure.

Two lessons of general value can be drawn from this operation: (i) complex project designs involving major investment activities and critical institutional development should only be considered in countries with a good record of project execution; and (ii) projects should be designed to take account of national implementation capacity and should not depend for success on excessive inputs of technical assistance.

The ICR is satisfactory, despite the fact that no field visit was possible because of adverse country conditions. Incremental agricultural production proved difficult to estimate due to AGID's failure to collect appropriate data and no re-estimation of the ERR was attempted. No audit is planned.

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